Canada Jetlines Operations Ltd. — Management Reports 2024

Apr 5, 2024

PADLOCK PARTNERS UK FUND II

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

FOR THE YEAR ENDED DECEMBER 31, 2023

APRIL 5, 2024

MANAGEMENT’S DISCUSSION AND ANALYSIS

The following management’s discussion and analysis (“ MD&A ”) of the financial results of Padlock Partners UK Fund II (the “ Trust ”) and its subsidiaries, dated April 5, 2024 for the year ended December 31, 2023 should be read in conjunction with the Trust’s audited consolidated financial statements for the same period (the “ Trust’s Audited Financial Statements ”) and accompanying notes for the period. Additional information relating to the Trust can be found on the Trust’s issuer profile at www.sedarplus.com.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain statements contained in this MD&A constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information is provided for the purposes of assisting the reader in understanding the Trust’s financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management’s current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking information may relate to future results, performance, achievements, events, prospects or opportunities for the Trust or the real estate industry and may include statements regarding the financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, occupancy levels, taxes, and plans and objectives of or involving the Trust. Particularly, matters described as “Future Outlook” are forward-looking information. In some cases, forwardlooking information can be identified by terms such as “may”, “might”, “will”, “could”, “should”, “would”, “occur”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “seek”, “aim”, “estimate”, “target”, “goal”, “project”, “predict”, “forecast”, “potential”, “continue”, “likely”, “schedule”, or the negative thereof or other similar expressions concerning matters that are not historical facts.

Forward-looking information necessarily involves known and unknown risks and uncertainties, which may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, assumptions may not be correct and objectives, strategic goals and priorities may not be achieved. A variety of factors, many of which are beyond the Trust’s control, affect the operations, performance and results of the Trust and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results.

Information contained in forward-looking information is based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including management’s perceptions of historical trends, current conditions and expected future developments, as well as other considerations that are believed to be appropriate in the circumstances, including the following: the inventory of self-storage and mixed-use properties in the United Kingdom (the “ UK ”); the timing and anticipated results of any improvements or fit-outs of, as well as occupancy, rental rates and rentable area related to, the properties of the Trust, including the ongoing expansion of the Houghton Regis Property; the availability of properties for acquisition and the price at which such properties may be acquired; the availability of mortgage financing and current interest rates; the extent of competition for properties; assumptions about the markets in which the Trust operates; the ability of Padlock Capital Partners II, LLC (the “ UK Manager ”), the UK manager of the Trust, to manage and operate the properties; the global and UK economic environment; foreign conflict; foreign currency exchange rates; and governmental regulations or tax laws.

Although the Trust believes the expectations reflected in such forward-looking information are reasonable and represent the Trust’s projections, expectations and beliefs at this time, such information involves known and unknown risks and uncertainties which may cause the Trust’s actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking information. Important factors that could cause actual results to differ materially from the Trust’s expectations include, among other things, the availability of suitable properties for purchase by the Trust, the availability of mortgage financing for such properties, the availability of mortgage refinancing for the Trust’s existing properties, and general economic and market factors, including interest rates, business competition and changes in government regulations or in tax laws. See “Risks and Uncertainties”. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information, as there can be no assurance that actual results will be consistent with such forward-looking information.

The forward-looking information included in this MD&A relate only to events or information as of the date on which the statements are made in this MD&A. Except as specifically required by applicable Canadian securities law, the

• 2 -

Trust undertakes no obligation to update or revise publicly any forward-looking information, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

BASIS OF PRESENTATION

The Trust’s Audited Financial Statements have been prepared in accordance with International Financial Reporting Standards (“ IFRS ”). Unless otherwise stated, amounts expressed in this MD&A are in UK pound sterling (£). The Trust’s Audited Financial Statements represent the activity and financial position of the Trust and its controlled subsidiaries. The Trust’s Audited Financial Statements are presented on a consolidated basis with any intercompany activity eliminated in accordance with IFRS.

NON-GAAP AND CERTAIN FINANCIAL MEASURES

In this MD&A, the Trust uses certain non-GAAP and/or supplementary financial measures as defined in National Instrument 52-112, Non-GAAP and Other Financial Measures Disclosure (“ NI 52-112 ”), such as weighted average net achieved rent per square foot per annum (“ weighted average net achieved rent PSF PA ”), net asset value per unit (“ NAV per unit ”), adjusted net asset value per unit (“ adjusted NAV per unit ”), and NOI margin. These supplementary financial measures do not have standardized meanings and may not be comparable to similar measures presented by other issuers.

Weighted average net achieved rent PSF PA is a supplementary financial measure defined as rental revenue for the period divided by average occupied square footage over the respective period, then annualized.

NAV per unit represents the net assets attributable to unitholders as calculated under IFRS and allocated to each class of Units (as defined below) and divided by the number of Units outstanding for such class of Units. NAV per unit is a measure of the value held by the Unitholders as at the reporting date.

Adjusted NAV per unit is a non-GAAP ratio which represents the net assets attributable to unitholders as calculated under IFRS adjusted for the valuation assumption for purchasers’ cost (as described under the heading “Valuation Committee assessment of value as at December 31, 2023”) and allocated to each class of Units and divided by the number of Units outstanding for such class of Units. Adjusted NAV per unit is a measure of the value held by the Unitholders as at the reporting date. Adjusted NAV per unit is not a measure recognized under IFRS, does not have a standardized meaning prescribed by IFRS and should not be compared to or construed as an alternative to net assets attributable to unitholders as calculated under IFRS. Management and the Trust use this measure to more accurately reflect the value of Unitholders’ investments in the Trust. The Trust’s method for calculating Adjusted NAV per unit may differ from other issuers’ calculations. See the section “Valuation Committee assessment of value as at December 31, 2023” for a reconciliation of Adjusted NAV per unit to net assets attributable to unitholders as calculated under IFRS.

Leverage ratio is a supplementary financial measure representing the amount of outstanding debt related to its acquisition and development of the Trust’s investment properties and is calculated by taking the sum of loans payable, before deferred financing costs, divided by investment properties.

NOI margin is a supplementary financial measure to show operating profitability as a percentage of revenue, which is calculated by dividing the NOI by the revenue from property operations.

In this MD&A, the Trust also uses certain a non-GAAP financial measure, as defined in NI 52-112, being Adjusted Net Income and Comprehensive Income. This term is not a measure recognized under IFRS, does not have a standardized meaning prescribed by IFRS and should not be compared to or construed as alternatives to net income and comprehensive income, profit/loss, cash flow from operating activities or other measures of financial performance calculated in accordance with IFRS. Adjusted Net Income and Comprehensive Income may not be comparable to similar measures presented by other trusts or companies in similar or different industries. The Trust uses this measure to better assess the Trust’s underlying performance and provides this additional measure so that investors may do the same.

Adjusted Net Income and Comprehensive Income is defined as net (loss) income and comprehensive (loss) income in accordance with IFRS before unrealized foreign exchange gains and losses, deferred income taxes, amortization of financing costs, and fair value adjustments on investment properties. See “Distributions to Unitholders Relative to Net

• 3 -

Income and Comprehensive Income Attributable to Unitholders” for a reconciliation of Adjusted Net Income and Comprehensive Income to net income and comprehensive income under IFRS.

BUSINESS OVERVIEW, OBJECTIVES, STRATEGY AND PORTFOLIO SUMMARY

The Trust is an unincorporated investment trust established under and governed by the laws of the Province of Ontario pursuant to a declaration of trust dated April 16, 2021, as amended and restated on May 25, 2021 (the “ Declaration of Trust ”). The registered and head office of the Trust is located at 199 Bay Street, Suite 4000, Commerce Court West, Toronto, Ontario, Canada, M5L 1A9. The Trust was established for the primary purpose of indirectly acquiring, owning and operating a portfolio primarily comprised of value-add, income producing self-storage and mixed-use real estate properties in the UK. The Trust is managed by Clear Sky Capital Inc. (the “ Canadian Manager ”) and the UK Manager (collectively, the “ Managers ”), whose address is 4300 E Camelback Rd, Suite 450, Phoenix, AZ 85018 and telephone number is 1 (877) 643-1257.

The beneficial interest in the net assets and net income of the Trust is divided into four classes of units (the “ Units ”). The Class A Units, Class F Units and Class C Units are denominated in Canadian dollars and Class U Units are denominated in UK pound sterling. All of the Units are unlisted. As of the date of this MD&A, the Trust had 2,436,240 Class A Units, 409,450 Class F Units, nil Class C Units, and 302,550 Class U Units issued and outstanding.

Investment Objectives

The Trust’s investment objectives are to:

• (a) provide holders of Units (“ Unitholders ”) with an opportunity to invest in a portfolio of diversified incomeproducing commercial real estate properties in the UK, with a particular focus on self-storage and mixeduse properties;

• (b) provide Unitholders with quarterly cash distributions; and

• (c) enhance the potential for long-term growth of capital through rental escalations in tenant leases, acquisition and conversion opportunities from the Trust’s unique position in the market, and a liquidity event by way of an exit into the public markets or other transaction.

Investment Strategy

The Trust was established for the purposes of sourcing and acquiring:

• (a) existing self-storage assets that are held by owners that lack the capital, patience or expertise to improve cash flow and value;

• (b) existing value-add multi-purpose assets through lease or purchase and improve cash flow and value through the appropriate use of capital, patience, and expertise; and

• (c) vacant and/or under-utilized industrial and commercial assets, obtain necessary titles to such assets, substantially improve such assets, and reposition such assets through lease-up processes and marketing.

Investment Restrictions

The Trust is subject to certain restrictions and practices contained in securities legislation. In addition, the Trust is subject to the following investment restrictions which limit the assets that the Trust can invest in:

• (i) the Trust may only invest, directly or indirectly, in interests (including fee ownership and leasehold interests) in commercial real estate properties located in the UK, with a focus on self-storage and mixeduse properties (i.e. a property with self-storage, retail and multifamily components) and assets ancillary thereto necessary for the operation of such real estate and such other activities as are consistent with the other investment restrictions;

• 4 -

• (ii) the Trust may invest, directly or indirectly, in vacant land and development properties located in the UK where such investment is made for the purpose of developing new self-storage and mixed-use facilities and assets ancillary thereto necessary for the operation of such real estate and such other activities as are consistent with the other investment restrictions;

• (iii) the Trust may, directly or indirectly, invest in a joint venture arrangement for the purposes of owning interests or investments otherwise permitted to be held by the Trust, including, for greater certainty, joint venture arrangements with affiliates of Clear Sky Capital Inc. (“ Clear Sky ”); provided that such joint venture arrangement contains terms and conditions which, in the opinion of the trustees of the Trust (the “ Trustees ”), are commercially reasonable, including without limitation such terms and conditions relating to restrictions on the transfer, acquisition and sale of the Trust’s and any joint venturer’s interest in the joint venture arrangement, provisions to provide liquidity to the Trust, provisions to limit the liability of the Trust and its Unitholders to third parties, and provisions to provide for the participation of the Trust in the management of the joint venture arrangement. For purposes hereof, a “joint venture arrangement” is an arrangement between the Trust and one or more other persons (including, for greater certainty, affiliates of Clear Sky) pursuant to which the Trust, directly or indirectly, conducts an undertaking for one or more of the purposes set out in the investment guidelines of the Trust and in respect of which the Trust may hold its interest jointly or in common or in another manner with others either directly or through the ownership of securities of a corporation or other entity;

• (iv) except for temporary investments held in cash, deposits with a Canadian chartered bank or trust company registered under the laws of a province of Canada or a UK chartered bank, short-term government debt securities or money market instruments maturing prior to one year from the date of issue and except as permitted pursuant to the investment restrictions and operating policies of the Trust, the Trust may not hold securities of a person other than to the extent such securities would constitute an investment in real property (as determined by the Trustees);

• (v) the Trust shall not invest in rights to or interests in mineral or other natural resources, including oil or gas, except as incidental to an investment in real property;

• (vi) the Trust shall not invest, directly or indirectly, in properties whose primary business is that of a hotel, retirement home or senior care facility;

• (vii)notwithstanding anything else contained in the Declaration of Trust, the Trust shall not make any investment, take any action or omit to take any action that would result in the Trust not qualifying, at all times, as a “unit trust” and a “mutual fund trust” within the meaning of the Income Tax Act (Canada) (“ Tax Act ”);

• (viii) notwithstanding anything else contained in this Declaration of Trust, the Trust shall not, and shall not permit any of its subsidiaries to, make any investment, take any action or omit to take any action that would result in the Trust or any subsidiary being a SIFT or result in the Trust holding any “non-portfolio property”, as defined in the Tax Act;

• (ix) notwithstanding anything else contained in this Declaration of Trust, the Trust shall not any time hold any property that is “taxable Canadian property” within the meaning of the Tax Act;

• (x) the Trust shall not invest more than 10% of Investable Funds (as such term is defined in the Trust’s final prospectus dated May 25, 2021 (the “ Prospectus ”)) in securities of a publicly traded entity;

• (xi) the purchase price for any one property acquired by the Trust shall not exceed the greater of £12 million (less any debt obligations) and 10% of the Net Asset Value (as such term is defined in the Prospectus) of the Trust; and

• (xii)if the Trust invests, directly or indirectly, in securities of an issuer managed by a Clear Sky entity, there will be no duplication of fees chargeable in connection with such investment.

• 5 -

Portfolio Summary

As at December 31, 2023, the Trust indirectly owned four properties (the “ Properties ”) located in the UK: (i) the Huntingdon Property, the Brentwood Property, the Newmarket Property, and the Houghton Regis Property (each as defined herein).

Property	Location	Primary Market	Rentable area (Sq Ft)	Property Type	Asset Type	Date Acquired
Huntingdon	Huntingdon, England, UK	London Adjacent	57,351	Self-Storage	Freehold	6/10/2021
Brentwood	Brentwood, England, UK	London Adjacent	33,250	Self-Storage	Freehold	6/25/2021
Newmarket	Newmarket, England, UK	London Adjacent	30,495	Self-Storage	Freehold	3/31/2022
Houghton Regis	Houghton Regis, England, UK	London Adjacent	-	Redevelopment	Freehold	9/1/2022

Huntingdon

The property located in Huntingdon, England (the “ Huntingdon Property ”) was indirectly acquired by the Trust via a purchase of the shares of the controlling company.

The Huntingdon Property was converted from an existing warehouse into a self-storage facility in late 2019 and currently consists of warehouse, bulk, drive up, parking and interior self-storage units totaling 57,351 rentable square feet on a 1.235-acre site.

The Trust’s plan to add 7,487 net rentable square feet of new storage space was completed during the fourth quarter of 2022, taking the total net lettable space to 57,351 square feet. Occupancy for the Huntingdon Property, as of December 31, 2023, was 83.7% as compared to 75.5% as of December 31, 2022. As of December 31, 2023, rental rates were £13.88, which represents an increase from the rental rates in the prior quarter of £12.69 as of September 30, 2023. The Manager believes the store’s position has been strengthened by the arrival of a new assistant manager who has experience in sales. A new customer moved in on August 1, 2023, occupying a 7,850 square foot warehouse unit that was vacated earlier in 2023 and this has increased the store’s occupied area by over 8%. The customer’s business is a car mechanic and detailing shop, which is likely to drive significant footfall to the store. Going forward, the focus continues to be on improving occupancy, increasing rental rates and finalizing the bulk/warehouse space fit-out.

Brentwood

The property located in Brentwood, England (the “ Brentwood Property ”) was indirectly acquired by the Trust via a purchase of the shares of the controlling company. The Brentwood Property was originally going to be acquired by an affiliate of Clear Sky. However, it was determined the affiliate of Clear Sky had insufficient funding to acquire and develop the Brentwood Property. As a result, the purchase agreement was assigned to the UK Manager with the expectation of transferring it to a subsidiary of the Trust upon successful completion of the Trust’s initial public offering (the “ IPO ”). Subsequent to the closing of the IPO, the affiliate of the UK manager transferred its right in the purchase agreement to the Trust and on June 25, 2021, the Trust indirectly closed on the acquisition of the Brentwood Property.

The Brentwood Property is located within the London MSA, just off the M25 and A12 motorways. Brentwood is an upscale community just northeast of central London. The Brentwood Property consisted of a modern warehouse and offices totaling 43,417 square feet with a self-contained, secure yard with 29 parking spaces. Upon closing, the seller of the Brentwood Property signed a lease to “lease back” the Brentwood Property until December 31, 2021 at a rate of £275,000 per annum. The applicable tenant planned to move into its newly constructed warehouse by the end of 2021. However, in October 2021, the Trust was informed the tenant’s new warehouse construction was significantly

• 6 -

delayed and they wished to remain on the Brentwood Property for a longer period of time. The Trust secured a lease extension which doubled the rent (to £550k per annum) for the first four months of 2022 and to £750k per annum should they need to remain for an additional four months through August 2022. In June 2022, the tenant vacated the building and the fit-out works commenced.

In June 2022, the Trust commenced the two-phase conversion of the existing warehouse to develop an approximately 53,000 square foot Class “A” facility. Having raised the roof to provide an extra floor of storage, as at December 31, 2023, the internal fit-out works have largely been completed across the three floors. The Trust has commenced lease up of the available space and significant progress has been made in a short time. As at December 31, 2023, 16,060 square feet were occupied, representing 48% of the current lettable area. The second phase of the construction achieved practical completion post year-end in early 2024 and will take lettable space up to 53,000 square feet. The store is witnessing a growing interest in office moves, with 11 out of 17 offices already leased as at December 31, 2023.

Newmarket

The property located in Newmarket, England (the “ Newmarket Property ”) is a recently developed self-storage property that is located in an affluent suburban market approximately 50 miles northeast of London with no selfstorage supply in the one, three, and five mile radii. On April 4, 2022, the Trust announced that it had successfully completed the indirect acquisition of the Newmarket Property from a subsidiary (the “ Seller ”) of Padlock Partners UK Fund I (“ Padlock I ”) on March 31, 2022 for an aggregate purchase price of £6,680,000. The Newmarket Property was sold by the Seller to a subsidiary of the Trust (the “ Buyer ”) pursuant to a share purchase agreement, whereby the Buyer agreed to acquire 100% of the outstanding shares of a subsidiary of the Seller holding the Newmarket Property (“ Acquired Subsidiary ”).

Prior to the sale, on June 24, 2021, the Buyer entered into a £4,700,000 loan agreement with the Acquired Subsidiary for the purposes of funding the development of the Newmarket Property (the “ Newmarket Loan Facility ”). The Newmarket Loan Facility was later amended to £5,500,000. The Newmarket Loan Facility could have been drawn on at any time during the term of the Newmarket Loan Facility and provided the Buyer, as lender, with a purchase option to allow the Buyer to purchase an interest in the Acquired Subsidiary, which was exercised by the Buyer in order to pursue the acquisition of the Newmarket Property. Subsequent to the acquisition of the Acquired Subsidiary, the Newmarket Loan Facility was terminated.

After giving effect to working capital adjustments and the balance owed per the Newmarket Loan Facility in the amount of £5,572,293 (inclusive of accrued interest), the adjusted purchase price of £735,940 was satisfied by way of deferred consideration paid by the buyer to the seller in June 2022. As a result, the Newmarket Property and the associated risks and rewards from ownership of the Newmarket Property have been consolidated into the Trust for all applicable periods subsequent to the three-month period ended March 31, 2022.

The facility has approximately 48,000 net rentable square feet, of which 30,495 net rentable square feet are available now with more units coming online as the store fills up. In addition, the Trust has added six drive-up units which were included in the initial fit-out plans, totaling 960 square feet. As of December 31, 2023, rental rates were at £19.70. Such rental rate represents a decrease from the prior quarter, which was £22.48 as of September 30, 2023. The store reached 62.8% occupancy at the end of December 2023, which is an increase from the 53.6% occupancy as at September 30, 2023. The store continues to get the majority of customers onto auto bill which increases efficiency and the Trust’s ability to push rental rates. Going forward, the focus will continue to be on filling the store and driving rental rates as the original opening concessions expire.

Houghton Regis

The Trust indirectly acquired a freehold interest in the land and existing building located in Houghton Regis, England (the “ Houghton Regis Property ”) on September 1, 2022 for £2,300,000 net purchase price.

The Trust intends to convert and expand the existing warehouse into approximately 35,000 net rentable square feet of Class A self-storage space. Total build out and conversion is expected to cost £3,650,000 and to be completed in 2024 with the first of the newly created self-storage units expected to be available by the second quarter of 2024.

• 7 -

The Trust has completed its value engineering process to ensure net rentable square feet is maximized while reducing costs as much as possible. The development of the site has been split into two phases, Phase I is the conversion of the existing property into a self-storage facility. Planning consent has been received, enabling works have been completed and external works can proceed with a target for Phase I to be trading in April 2024. This is a two month delay from previous expectations as a result of planning-related variances.Phase II is for an additional building on the site which will increase the capacity of the store and this is currently awaiting planning consent.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

This section includes highlights of the financial and operational performance of the Trust as at and for the year ended December 31, 2023 (the “ Reporting Period ”).

2023 Highlights

• The Trust’s Rental revenue and Ancillary fees and charges combined totaled £1,186,681 for the year ended December 31, 2023 (year ended December 31, 2022: £1,074,881).

• The Trust had Net operating income of £228,846 for the year ended December 31, 2023 (year ended December 31, 2022: £498,756).

• Net loss and comprehensive loss totaled £996,644 for the year ended December 31, 2023 (net income and comprehensive income for the year ended December 31, 2022: £4,591,141).

• As calculated for the quarter ended December 31, 2023, the weighted average net achieved rent PSF PA across the properties was as follows:

• Huntingdon Property: £13.88;

• Brentwood Property: £13.52; and

• Newmarket Property: £19.70.

• The Trust’s total indebtedness through loans payable was £11,040,341.

• The Trust’s leverage ratio was 35%.

• The Net assets attributable to unitholders decreased from approximately £21.0 million as of December 31, 2022 to approximately £18.9 million as of December 31, 2023.

• Portfolio occupancy increased to 68.5% as of December 31, 2023 as compared to 67.0% as of December 31, 2022 as a result of increased occupancy at all three operating stores.

Impact of Foreign Conflict

Foreign conflict remains a persistent risk to the global economy and as a result the knock-on effect to the business at this time; however, it is not expected to impact the UK self-storage sector significantly. Management is monitoring the Israel-Palestine conflict and the Russia-Ukraine conflict and the potential economic, social, and political ramifications therefrom.

Impact of Inflation and Rising Interest Rates in the UK

The self-storage market remains resilient despite the economic headwinds currently being faced in the UK. Inflation continues to put downward pressure on the economy despite the rate dropping to 5.2% in December 2023. The Bank of England has kept interest rates at 5.25% since August 3, 2023, based on expectations that inflation is now under control and growth will continue to be flat. In fact, the British economy shrank by 0.3% in the final quarter of 2023 meeting the technical definition of a recession, being two quarters in a row of contraction.

Despite the wider economic challenges, the Trust’s properties continue to perform well, a testament to the resiliency of self-storage. Historically, the self-storage industry has thrived during periods of disruption and change. We have not seen material impacts to our operating performance metrics, and we continue to exceed projections. Real estate best practices will increasingly show their value in a more stressed environment. This means quality assets in quality

• 8 -

locations, that have depth of tenant and liquidity demand in the hands of skilled managers, are likely to be more resilient and we are confident the Trust falls into that category.

The Trust continues to carefully monitor the economic climate and local market conditions to ensure that the portfolio is managed strategically and efficiently. While costs have risen and inflation is a concern, the Trust has been able to offset most of the pressures via our strong rental rate achievements over these past several quarters.

The Trust’s existing debt facility is due to mature in the next 12 months with a June 2024 maturity, and management will continue to monitor longer term refinance options to ensure the Trust is well-capitalized for the long term.

Financial and Operational Highlights

(In UK Pound Sterling)

(In UK Pound Sterling)
Summary Financial Information – Consolidated	Year ended December 31, 2023	Year ended December 31, 2022	Period from April 16, 2021 to December 31, 2021
Rental revenue and Ancillary fees and	£1,186,681	£1,074,881	£408,107
charges
Net operating income from properties	£228,846	£498,756	£246,192
Net income (loss) and comprehensive	(£996,644)	£4,591,141	£126,787
income (loss)
	As at	As at	As at
	December 31,	December 31,	December 31,
	2023	2022	2021
Investment Properties	£31,760,000	£30,210,000	£11,198,660
Loan payable, before loan costs	£11,040,341	£8,316,759	-
Leverage ratio(1)	35%	28%	-

NAV per unit Summary NAV per unit Net asset value per unit (£)(2) Net asset value per unit ($C)(2) Issuance price Issuance price, net of agent fees Increase in NAV per unit since issuance Increase in NAV per unit since issuance, net of Agent fees Summary NAV per unit Net asset value per unit (£)(2) Net asset value per unit ($C)(2) Issuance price Issuance price, net of agent fees Increase in NAV per unit since issuance Increase in NAV per unit since issuance, net of Agent fees	As at December 31, 2023 Class A Class F Class U
	£5.59 £5.77 £9.58 $9.41 $9.71 N/A C$10.00 C$10.00 £10.00 C$9.425 C$9.725 £9.425 (5.9%) (2.9%) (4.2%) (0.1%) (0.1%) 1.6% As at December 31, 2022 Class A Class F Class U
	£6.20 £6.40 £10.62 $10.12 $10.44 N/A C$10.00 C$10.00 £10.00 C$9.425 C$9.725 £9.425 1.2% 4.4% 6.2% 7.4% 7.4% 12.7%

• 9 -

Operational Information of Operating properties: As at December 31, 2023

As at December 31, 2023
	Huntingdon	Brentwood	Newmarket	Houghton Regis
Total rentable square footage(3)	57,351	33,520	30,495	-
Total occupied square footage(3)	47,978	16,060	19,150	-
Occupancy %	83.7%	48.0%	62.8%	-
Weighted average net achieved rent PSF PA	£13.88	£13.52	£19.70	-
Closing Weighted Average rate PSF PA(4)	£13.94	£16.13	£18.98	-

As at December 31, 2022

As at December 31, 2022
	Huntingdon	Brentwood	Newmarket	Houghton Regis
Total rentable square footage(3)	58,081	-	35,550	-
Total occupied square footage(3)	43,840	-	18,920	-
Occupancy %	75.5%	-	53.2%	-
Weighted average net achieved rent PSF PA	£12.65	-	£19.88	-
Closing Weighted Average rate PSF PA(4)	£12.81	-	£21.10	-
As at December 31, 2021
	Huntingdon	Brentwood	Newmarket	Houghton Regis
Total rentable square footage(3)	52,291	-	-	-
Total occupied square footage(3)	36,921	-	-	-
Occupancy %	70.6%	-	-	-
Weighted average net achieved rent PSF PA	£12.70	-	-	-
Closing Weighted Average rate PSF PA(4)	£12.84	-	-	-
**Summary Financial Information - Properties **	For	the year ended	December 31, 2023
	Huntingdon	Brentwood	Newmarket	Houghton Regis
Rental Revenue	£597,890	£67,516	£384,831	-
Ancillary fee and charges	£69,012	£17,406	£50,026	-
	For	the year ended	December 31, 2022
	Huntingdon	Brentwood	Newmarket	Houghton Regis
Rental Revenue	£514,120	£272,545	£214,417	-
Ancillary fee and charges	£47,624	£2,000	£24,175	-
	For	the year ended	December 31, 2021
	Huntingdon	Brentwood	Newmarket	Houghton Regis
Rental Revenue	£250,050	£142,021	-	-
Ancillary fee and charges	£12,764	£3,272	-	-

Notes:

(1) Leverage Ratio is the quotient of loans payable, before deferred financing costs, divided by investment properties.

(2) NAV per unit is the net assets attributable to unitholders allocated to each class of Units and divided by the number of Units outstanding for such class of Units.

(3) Included total current rentable area of built storage units, excluded bulk and open warehouse space.

(4) Weighted average annual rental rate charged per square foot on occupied space at the balance sheet date.

• 10 -

Distributions by Class:

	Year ended December 31, 2023	Year ended December 31, 2022	Period from April 16, 2021 to December 31, 2021
Class A	£874,882	£911,615	£271,440
Class F	£151,247	£157,141	£46,761
Class U	£185,917	£193,744	£57,381

Financial Performance

Trust’s financial performance for the year ended December 31, 2023 and 2022 is summarized below:

(In UK Pound Sterling)	Year ended December 31, 2023	Year ended December 31, 2022
Rental revenue and Ancillary fees and charges Direct operatingexpenses	£1,186,681 (957,835)	£1,074,881 (576,125)
Net operating income Finance costs General and administrative (Loss) Gain on foreign exchange Interest Income Other expense Fair value adjustment to investment properties Income tax expense – current and deferred	228,846 (1,096,892) (716,315) (1,922) - - 205,730 383,909	498,756 (457,777) (691,007) 4,550 256 (36,950) 6,653,917 (1,380,604)
Net (loss) income and other comprehensive (loss) income	(996,644)	4,591,141
Calculation of Net operating income (“NOI”) Margin (A) Net operating income (B) Rental revenue and Ancillary fees and charges	228,846 1,186,681	498,759 1,074,881
NOI Margin(A/B)	19.28%	46.40%

• 11 -

Quarterly Financial Highlights

(In UK Pound Sterling) Three months ended March 31, 2022	Three months ended June 30, 2022	Three months ended September 30, 2022	Three months ended December 31, 2022	Three months ended March 31, 2023	Three months ended June 30, 2023	Three months ended September 30, 2023	Three months ended December 31, 2023
Rental revenue 254,973 Ancillary fees and charges 11,083 Direct operating expenses (73,537)	303,549 16,292 (136,024)	206,087 21,943 (167,310)	236,473 24,481 (199,254)	246,530 23,867 (201,468)	234,664 28,163 (196,275)	256,747 36,558 (270,032)	312,296 47,856 (290,060)
Net operating income 192,519 Interest income - Finance costs - General and administrative (125,963) Gain / (loss) on foreign exchange 7,204 Other expense (36,950) Fair value adjustment to investment property - Income tax expense -	183,817 - (44,665) (243,612) 1,194 - 5,268,355 (1,321,097)	60,720 256 (176,114) (167,549) (1,223) - - (17,664)	61,700 - (236,998) (153,883) (2,625) - 1,385,562 (41,843)	68,929 - (255,254) (148,900) (1,481) - - -	66,552 - (265,151) (206,381) (88) - - -	23,273 - (282,507) (150,547) (76) - - -	70,092 - (293,980) (210,487) (277) - 205,730 383,909
Net income (loss) and other comprehensive income(loss) 36,810	3,843,992	(301,574)	1,011,913	(336,706)	(405,068)	(409,857)	154,987
Calculation of NOI Margin (A) Net operating income 192,519 (B) Rental revenue and Ancillary fees and charges 266,056	183,817 319,841	60,720 228,030	61,700 260,954	68,929 270,397	66,552 262,827	23,273 293,305	70,092 360,152
NOI Margin(A/B) 72.36%	57.47%	26.63%	23.64%	25.49%	25.32%	7.93%	19.46%

Calculation of Supplementary Financial Measures

Calculation of Weighted average net achieved rent PSF PA for the three months ended December 31, 2023	Calculation of Weighted average net achieved rent PSF PA for the three months ended December 31, 2023	Calculation of Weighted average net achieved rent PSF PA for the three months ended December 31, 2023	Calculation of Weighted average net achieved rent PSF PA for the three months ended December 31, 2023	Calculation of Weighted average net achieved rent PSF PA for the three months ended December 31, 2023
	Huntingdon	Brentwood	Newmarket	Total
Rental revenue(IFRS)	£168,333	£51,493	£92,470	312,296
Average occupied area(sq. ft)	48,117	15,107	18,620	n/a
Rentper square foot	3.50	3.41	4.97	n/a
Number of days	92	92	92	n/a
Weighted average net achieved rent PSF PA	13.88	13.52	£19.70	n/a

• 12 -

Calculation of NAV per unit:

Calculation of NAV per unit:	Calculation of NAV per unit:	Calculation of NAV per unit:	Calculation of NAV per unit:
	Class A Unit	Class F Unit	Class U Unit
	per unit	per unit	per unit
Net assets attributable to unitholders	13,620,755	2,362,056	2,897,581
Outstanding units at December 31, 2023	2,436,240	409,450	302,550
NAV per unit, December 31, 2023 (£)	£5.59	£5.77	£9.58
NAV per unit, December 31, 2023 (C$)(1)	$9.41	$9.71	n/a
Issuance price	C$10.00	C$10.00	£10.00
Issuance price, net of agent fees	C$9.425	C$9.725	£9.425
Increase in NAV per unit since issuance	(5.9%)	(2.9%)	(4.2%)
Increase in NAV per unit since issuance, net of Agent fees	(0.1%)	(0.1%)	1.6%
(1) Based on an exchange rate at December 31, 2023 of 1.6837 CAD to GBP.

Calculation of Leverage ratio:
	As at December 31, 2023	As at December 31, 2022
Investment Properties(B)	£31,760,000	£30,210,000
Loanspayable	£10,975,991	£8,097,969
Add back: Loan costs	£64,350	£218,790
Loans payable and Loan payable to related party, before loan costs(A)	£11,040,341	£8,316,759
Leverage ratio(A/B)	35%	28%

See “Non-GAAP and Certain Financial Measures”.

As discussed above, the accounting policies adopted under IFRS have been applied in preparing the Trust’s Audited Financial Statements.

Valuation Committee assessment of value as of December 31, 2023:

The Valuation Committee has completed its annual valuation assessment of the value of the Units of the Trust and concluded that an adjustment to the IFRS NAV per unit is necessary in order to determine the fair value of the Units, as a result of the assumptions used in the appraised values of the Trust’s investment properties.

The freehold and leasehold investment properties have been valued at December 31, 2023 by external valuers, (“Appraisers”). These valuations have been prepared in accordance with the version of the RICS Valuation – Global Standards (incorporating the International Valuation Standards) and the UK national supplement (“the Red Book”) current as at the valuation date. The valuation of each of the investment properties and the investment properties under construction has been prepared on the basis of either “Fair Value” or “Fair Value as a fully equipped operational entity”, having regard to trading potential, as appropriate.

The Trust’s investment property assets have been valued for the purposes of the financial statements after deducting notional weighted average purchaser’s cost of 6.75% on the net value, as if they were sold directly as property assets. The valuations of the investment properties are asset valuations which are entirely linked to the operating performance of the business. However, the investment property assets would have to be sold with the benefit of operational contracts, employment contracts and customer contracts, which would be very difficult to achieve except in a corporate structure. This approach follows the logic of the valuation methodology in that the valuation is based on a capitalization of the net operating income after allowing a deduction for operational cost and an allowance for central administration costs. A sale in a corporate structure would result in a reduction in the assumed Stamp Duty Land Tax, however, would result in an increase in other transaction costs, reflecting additional due diligence and other expenses, resulting in a reduced notional purchaser’s cost of 2.25% of gross value, which has been calculated as 0.5% of Stand Duty Land Tax on the sale of shares and 1.75% of estimated due diligence costs. To the Manager’s knowledge, all the significant sized transactions that have

• 13 -

been concluded in the UK market in respect of investment properties similar to those of the Trust in recent years were completed in a corporate structure. Accordingly, the Valuation Committee instructed the Appraisers to carry out an additional valuation on the above basis, resulting in a higher property valuation at December 31, 2023 of £34,090,000 million (£2,330,000 higher than the value recorded in the financial statements). The Valuation Committee has concluded this revised valuation is a more appropriate valuation for use in the Trust’s determination of the NAV per unit of each of its Units.

The Valuation Committee has further adjusted this valuation to include the impact of this adjustment on the deferred tax liability by applying a 25% UK tax rate on the increase in investment property fair value.

Additionally, the increase in value, net of the tax impact, has been further adjusted to reflect the UK Manager’s share of this increased valuation as a co-investor of the UK Holdco as a result of its unrealized carried interest allocation associated with this increase in net asset value.

For purposes of redemptions of Units pursuant to the Trust Declaration, the Valuation Committee has determined that “Net Asset Value” as defined in the Trust Declaration shall be equal to Adjusted NAV per unit, as disclosed herein.

The amounts below represent the reconciliation of the gross valuation assumption to net valuation assumption adjustment for each class of Units based on their respective proportionate interest percentage:

Calculation of Adjusted NAV per unit:

Calculation of Adjusted NAV per unit:	Calculation of Adjusted NAV per unit:	Calculation of Adjusted NAV per unit:	Calculation of Adjusted NAV per unit:
	Class A Unit	Class F Unit	Class U Unit
Net asset value under IFRS	13,620,755	2,362,056	2,897,581
Net adjustment to the valuation assumption for purchasers’ cost	1,167,016	202,380	248,262
Adjusted net asset value	14,787,771	2,564,436	3,145,843
Number of units	2,436,240	409,450	302,550
Adjusted NAVper unit	£6.07	£6.26	£10.40
Exchange rate	1.6837	1.6837	1.000
Adjusted NAVper unit	C$10.22	C$10.55	£10.40

Reconciliation of Net adjustment to the valuation assumption for purchaser’s cost

Reconciliation of Net adjustment to the valuation assumption for purchaser’s cost	Reconciliation of Net adjustment to the valuation assumption for purchaser’s cost	Reconciliation of Net adjustment to the valuation assumption for purchaser’s cost	Reconciliation of Net adjustment to the valuation assumption for purchaser’s cost	Reconciliation of Net adjustment to the valuation assumption for purchaser’s cost
	Total	Class A	Class F	Class U
Gross adjustment to the valuation assumption forpurchasers’ cost	2,330,000	1,680,916	291,498	357,586
Impact on deferred tax liability	(582,500)	(420,229)	(72,874)	(89,397)
Portion associated with the UK Manager (non-controllinginterest)	(129,842)	(93,671)	(16,244)	(19,927)
Net adjustment to the valuation assumption forpurchasers’ cost	1,617,658	1,167,016	202,380	248,262

Results of Operations

Overall, the Trust’s properties have achieved a steady performance for the three months ended December 31, 2023. Through the assistance of the third-party management company and execution by the UK Manager, the Trust’s properties continue to see increased rental rates since the acquisition of each property and progress on planned refurbishments. Portfolio occupancy increased during the fourth quarter of 2023, and higher rates and the opening of the Brentwood Property store have helped to increase overall rental income levels.

• 14 -

Rental income generated in the fourth quarter of 2023 increased 38% from the fourth quarter of 2022; however, NOI only increased by 14% over the same period as a result the additional overhead costs resulting from the recent store opening of the Brentwood Property.

Closing rental rates at the Huntingdon Property are up 9% compared to December 31, 2022 as a result of recent bulk space letting and at the Newmarket Property are down 10% compared to December 31, 2022, partly due to a focus on driving up occupancy and offering larger discounts. Inflationary pressures on costs have been mitigated where possible through increasing rental rates. Occupancy at the Huntingdon Property is up 8.2% as a result of some strong lettings and at the Newmarket Property is up 9.6%, compared to December 31, 2022.

Rental revenues and Ancillary fees and charges

Rental revenues and Ancillary fees and charges includes the rent charges for the lease of storage units and other ancillary income, including office rent, parking, insurance, and packaging supplies.

Rental revenues and Ancillary fees and charges for the three months ended December 31, 2023 was £360,152. Revenues for the period consisted of £312,296 from rental revenue and £47,856 from ancillary and other income. As compared to the three months ended September 30, 2023, revenue from property operations increased by £66,847 as a result of higher occupancy at the Huntingdon Property and lease up at the Brentwood Property. As compared to the three months ended December 31, 2022, revenue from property operations increased by £99,198 due to higher income at the Huntingdon Property and the Newmarket Property and lease up at the Brentwood Property.

Rental revenues and Ancillary fees and charges for the year ended December 31, 2023 was £1,186,681. Revenues for the period consisted of £1,050,237 from rental revenue and £136,444 from ancillary and other income. As compared to the year ended December 31, 2022, revenue from property operations increased by £111,800 due to higher revenue from the Huntingdon Property and the acquisition of the Newmarket Property on March 31, 2022. The increase was partially offset by the decrease in revenue at the Brentwood Property resulting from the loss of the commercial tenant that occupied the space in the prior year.

Direct operating expenses

Property operating costs for the three months ended December 31, 2023 were £290,060. This consisted primarily of £106,365 in property rates and insurance, £64,729 in wages and benefits, and £50,837 property management and administrative expenses. As compared to the three months ended September 30, 2023, direct operating expenses increased by £20,028 due to higher property rates and insurance. As compared to the three months ended December 1, 2022, direct operating expenses increased by £90,806 primarily as a result of the Brentwood Property becoming operational during the second quarter of 2023.

Property operating costs for the year ended December 31, 2023 were £957,835. This was primarily driven by £331,391 in property rates and insurance, £211,323 in wages and benefits, and £184,949 in property management and administrative expenses. As compared to the year ended December 31, 2022, direct operating expenses increased by £381,710 primarily as a result of the Brentwood Property becoming operational during the second quarter of 2023 and a full year of costs in 2023 relating to the Houghton Regis Property following its acquisition in September 2022 and the acquisition of the Newmarket Property on March 31, 2022.

Net Operating Income

NOI for the three months ended December 31, 2023 was £70,092, with an NOI margin of 19.46%, as calculated by dividing the NOI by the Revenue from Property Operations. As compared to the three months ended September 30, 2023, NOI decreased by £46,819. As compared to the three months ended December 31, 2022, NOI decreased by £8,392 due to higher operating expenses as described above. NOI for the year ended December 31, 2023 was £228,846, with an NOI margin of 19.28%, as calculated by dividing the NOI by the Revenue from Property Operations. As compared to the year ended December 31, 2022, NOI increased by £269,910.

With the utilization of its third-party property management, the Trust continues to focus closely on increasing occupancy and rate per square foot, while diligently managing operating costs to improve NOI results since acquisition of its properties.

• 15 -

Finance costs

For the three months ended December 31, 2023, Finance costs were £293,980. This includes interest expense on the outstanding debt and amortization of financing costs. As compared to the three months ended September 30, 2023, finance costs increased by £11,473 due to additional draws on the loan. Compared to the three months ended December 31, 2022, finance costs increased by £56,982 due to additional draws on the loan.

For the year ended December 31, 2023, Finance costs were £1,096,892. As compared to the year ended December 31, 2022, finance cost increased by £639,115 as the first draw on the loan occurred in June 2022.

General and administrative expense

General and administrative expenses include costs incurred by the Trust, its Canadian subsidiary, or a UK holding company that are not directly attributable to the properties. These costs include items such as legal and audit fees, director fees, investor relations expenses, professional advisory, directors’ and officers’ insurance premiums, expenses relating to the administration of the Trust’s distributions and other general and administrative expenses associated with the operation of the Trust and its subsidiaries. Also included in general and administrative expenses are asset management fees payable to the Managers (see “Related Party Transactions and Arrangements”).

For the three months ended December 31, 2023, general and administrative expenses were £210,487, consisting primarily of asset management fees of £78,592 and professional fees of £96,925. Compared to the three months ended September 30, 2023, general and administrative expenses increased by £59,940, primarily as a result of higher professional fees. Compared to the three months ended December 31, 2022, general and administrative expenses increased by £56,604 due to higher professional fees.

For the year ended December 31, 2023, general and administrative expenses were £716,315, consisting primarily of asset management fees of £317,916 and professional fees of £294,272. Compared to the year ended December 31, 2022, general and administrative expenses increased by £25,308 primarily due to higher insurance expense.

Other Expenses

During the year ended December 31, 2022, the Trust recognized £36,950 of other expenses in connection with the acquisition of the Newmarket Property. As part of the agreement, the Trust was required to reimburse the Seller for the net loss incurred at the Newmarket Property from January 1, 2022 to March 31, 2022.

Fair value adjustment to investment properties

The fair value adjustment to investment properties for the year ended December 31, 2023 was £205,730 (December 31, 2022: £6,653,917).

Income Tax Expense

In connection with the fair value adjustment recorded for the year ended December 31, 2023, a deferred tax liability was recorded, which is not recognized within income tax until realized.

Capital Investments

Following the acquisition of the Huntingdon Property, the Trust has invested £285,620 in costs related to the conversion of bulk and unused space into additional storage units. In addition, construction has now been completed at the Brentwood Property with the previously existing warehouse having been fit-out with 53,000 net rentable square feet. As of December 31, 2023, the Trust had invested £3,956,510 towards the Brentwood Property development. Following the acquisition of the Newmarket Property, the Trust has invested £140,404 in costs related to additional drive-up units. The Houghton Regis Property was acquired in 2022 and planning costs and enabling works have been carried out in preparation for the Phase I redevelopment and fit-out commencing in 2024.

Liquidity and Capital Reserves

The Trust’s cash flow from operating activities is dependent upon occupancy levels, rental rates on its leases, the collectability from its tenants, the level of operating and other expenses and other factors. Material changes in these factors may adversely affect the Trust’s net cash flow from operating activities and liquidity.

• 16 -

The Trust expects to be able to meet all of its obligations, including distributions to Unitholders and property maintenance and capital expenditure commitments as they become due. The Trust has financing sources to fulfill its commitments including cash flow from its operating activities and reserves from proceeds from the IPO. The Trust also expects to obtain mortgage debt secured by investment properties and future funding from its first mortgages to assist with value-enhancing initiatives.

Additionally, on June 6, 2022, the Trust closed a £16,015,751 Senior Secured Term Loan Facility (the “ Facility ”). The Facility is solely secured by a first, fixed legal mortgage over the Trust properties. The Facility includes a fixed interest rate of 9.3% per annum and a two-year maturity, prepayable with no penalty after 1 month. As of December 31, 2023, the outstanding balance of the Facility was £11,040,341 (as of December 31, 2022 - £8,316,759).

There are no liquidity covenants under the Facility. If there is a cost overrun on the development projects, the Trust will need to fund it. As of December 31, 2023, the Trust was in compliance with all of it covenants and expects to have sufficient funding to complete the development projects and maintain compliance for the foreseeable future.

At December 31, 2023, the Trust had a net working capital deficit of (£10,688,218) including cash of £548,149. It is in deficit because the loan facility matures in June 2024 and is therefore payable in less than 12 months. The Trust is in discussions with the current lender to extend the facility beyond the current expiry date in order to cover the remaining period of capital expenditure before it is refinanced with an investment facility and therefore believes that despite the net working capital deficit, the liquidity risk highlighted by the debt maturity in June 2024 is being managed. At December 31, 2022, the Trust had net working capital of £1,618,214 including cash of £1,691,723.

The Trust’s contractual obligations consist of accounts payable and accrued liabilities, amounts due to related parties, tenant deposits, loan payable, and trust units. Accounts payable and accrued liabilities and tenant deposits are due within one year. Loan payable is due in 2024 as described above. The Trust estimates the majority of trust unit redemptions to occur near dissolution of the Trust.

Cash Flows

The following table details the changes in cash during the Reporting Period:

(In UK Pound Sterling)	Three months ended December 31, 2023	Three months ended December 31, 2022	Year ended December 31, 2023	Year ended December 31, 2022
Cash (used in) / from operating activities Cash (used in) investing activities Cash from financingactivities	(131,940) (329,407) 170,290	180,641 (1,296,984) 830,874	(302,524) (1,344,270) 503,220	(514,130) (5,710,077) 6,349,241
(Decrease) / increase in cash Cash,beginningofperiod	(291,057) 839,206	(285,469) 1,977,192	(1,143,574) 1,691,723	125,034 1,566,689
Cash,end ofperiod	548,149	1,691,723	548,149	1,691,723

Cash on hand as at December 31, 2023 was £548,149 as compared to £1,691,723 as at December 31, 2022.

Distributions

The Trust declared a distribution on January 13, 2023 (the “ January 2023 Distribution ”). The distribution for each class was as follows:

• C$0.15065 per Class A Unit

• C$0.15546 per Class F Unit

• £0.15912 per Class U Unit

The Trust declared a distribution on April 14, 2023 (the “ April 2023 Distribution ”). The distribution for each class was as follows:

• 17 -

• C$0.14737 per Class A Unit

• C$0.15208 per Class F Unit

• £0.15063 per Class U Unit

The Trust declared a distribution on July 14, 2023 (the “ July 2023 Distribution ”). The distribution for each class was as follows:

• C$0.14900 per Class A Unit

• C$0.15379 per Class F Unit

• £0.15017 per Class U Unit

The Trust declared a distribution on October 13, 2023 (the “ October 2023 Distribution ”). The distribution for each class was as follows:

• C$0.15065 per Class A Unit

• C$0.15545 per Class F Unit

• £0.15458 per Class U Unit

The January 2023 Distribution, April 2023 Distribution, July 2023 Distribution and October 2023 Distribution each constituted a return of capital. The Trust decided to declare the January 2023 Distribution, April 2023 Distribution, July 2023 Distribution, and October 2023 Distribution using its own capital in order to satisfy the Trust’s investment objectives and ensure the Trust is able to achieve its targeted annual pre-tax distribution yield as set out in the Prospectus. The use of Invested Capital (as such term is defined in the Prospectus) to satisfy distributions is consistent with the Trust’s expectations that distributions will include a return of capital for the first three years of operations. The Trust anticipates that upon stabilization of operations in year three, cash flows provided by the Trust’s operating activities will thereafter be sufficient to cover its distribution requirements. See “Risks & Uncertainties” in this MD&A.

Distributions to Unitholders Relative to Net Income and Comprehensive Income Attributable to Unitholders

	Three months ended December 31, 2023	Three months ended December 31, 2022	Year ended December 31, 2023	Year ended December 31, 2022
Net (loss) income and comprehensive (loss) income attributable to unitholders:	151,186	893,665	(848,204)	4,353,530
Add / (deduct): non-cash or one-time items and distributions(1)	(550,746)	(1,301,550)	(433,098)	(5,207,543)
Adjusted net (loss) income and comprehensive (loss) income (2)	(399,560)	(407,885)	(1,281,302)	(854,013)
Distributions to Unitholders	(305,460)	(334,505)	(1,212,046)	(1,262,500)
(Shortfall) excess of adjusted net loss and
comprehensive loss over distributions to	(705,020)	(742,390)	(2,493,348)	(2,116,513)
Unitholders

• (1) Comprised of unrealized foreign exchange gain, deferred income taxes, amortization of financing costs, and fair value adjustments on investment properties.

(2) This metric is a non-GAAP financial measure. Non-GAAP financial measures do not have standardized meanings prescribed by IFRS (see “Non-GAAP and Certain Financial Measures”).

The Trust covered any shortfall between adjusted net (loss) income and comprehensive (loss) income and distributions using cash generated from operating activities of the Trust as applicable or through cash on hand. See “Distributions”, above.

• 18 -

Adjusted Net Income is used due to non-cash items such as unrealized fair value adjustments to investment properties and deferred tax movements being included in the net income and comprehensive income attributable to unitholders. In any given financial period, distributions paid may be greater than cash flows provided by operating activities as a result of expenses incurred to operate the business. If distributions exceed cash flows from operating activities regularly, the Trust may be required to use part of its borrowings on the credit facilities or further reduce or suspend distributions in order to operate. If the Trust were unable to raise additional funds or renew existing maturing debt on acceptable terms, capital expenditures could be further reduced or assets could be sold. If distributions paid are in excess of cash flows provided by operating activities, they represent a return of capital, rather than a return on capital, since they represent cash payments in excess of cash generated from the Trust’s operating activities during the period. Management intends to manage cash flows provided by operating activities and distributions paid so that cash flows provided by operating activities exceed distributions paid over the longer term.

Capital Management

The primary objective of the Trust’s capital management is to invest in a portfolio of well-located, quality revenueproducing properties with positive cash flows and to provide distributions to its Unitholders. The Trust is restricted in its use of capital to making investments in real property in the United Kingdom. The Trust manages its capital structure, and makes adjustments to it, in light of changes to prevailing economic conditions.

As at December 31 ,2023, the capital structure consisted of net assets attributable to Unitholders and non-controlling interests of £20,020,475 and loan payable of £11,040,341. In comparison, as at December 31, 2022, the capital structure consisted of net assets attributable to Unitholders and non-controlling interests of £22,295,029 and loan payable of £8,316,759.

Commitments and Contingencies

The Trust may be involved in litigation and claims in relation to the Trust’s investment properties that arise from time to time in the normal course of business. In the opinion of management, none of these, individually or in aggregate, would result in the recognition of a liability that would have a significant adverse effect on the financial position of the Trust. The Trust has agreed to indemnify, in certain circumstances, the trustees and officers of the Trust and its subsidiaries.

Net Liabilities Attributable to Unitholders

An unlimited number of Trust Units may be created and issued pursuant to the Declaration of Trust.

Each Unit is redeemable and represents an equal undivided beneficial interest in and distributions from the Trust, whether of net income, net realized capital gains or other amounts and in the net assets of the Trust and in the event of a termination or winding up of the Trust. All Units have equal voting rights and privileges.

(In UK Pound Sterling) Balance, April 16, 2021 Capital contributions IPO costs – Agents’ fees IPO costs – Legal & other Return of capital Net income for the period Balance, December 31, 2021 Return of capital Redemption Net income for the year Balance, December 31, 2022 Return of capital Redemption	Class A Units Class F Units Class U Units Net Liability Attributable to Unitholders
	- - - - 14,317,221 2,390,251 3,025,500 19,732,972 (823,240) (65,732) (173,966) (1,062,938) (337,155) (58,080) (71,247) (466,482) (271,440) (46,761) (57,381) (375,582) 83,810 14,437 17,710 115,957
	12,969,196 2,234,115 2,740,616 17,943,927 (911,615) (157,141) (193,744) (1,262,500) (28,451) - - (28,451) 3,144,809 542,380 666,341 4,353,530
	15,173,939 2,619,354 3,213,213 21,006,506 (874,882) (151,247) (185,917) (1,212,046) (65,864) - - (65,864)

• 19 -

Net loss for the year Balance, December 31, 2023	(612,438) (106,051) (129,715) (848,204)
	13,620,755 2,362,056 2,897,581 18,880,392

As of the date of this MD&A, the Trust has fully deployed or committed its capital in current investments, committed capital expenditure and development, or for working capital.

RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

Arrangements with the Managers

The Trust engaged the Managers to perform certain management services, as outlined below. The Managers are related parties to the Trust as each Manager is an affiliate of Clear Sky, a promoter of the Trust. In addition, Marcus Kurschat, a Trustee, is the principal and beneficiary of the UK Manager and John Stevenson, Matthew Collins and Matthew Mason, each an executive officer of the Trust, are officers of the UK Manager whose address is 4300 E Camelback Rd, Suite 450, Phoenix, AZ 85018 and telephone number is 1 (877) 643-1257.

Pursuant to the management agreement dated June 8, 2021 (the “ Management Agreement ”), the Managers are to provide financing services, asset management services, property management services and other general services to the Trust and its subsidiaries. As compensation for such services, the Management Agreement provides that the Trust will pay the following fees:

Type of Fee	Amount and Description
Asset Management Fee	An annual amount, equal to the greater of C$400,000 and 1.5% of the sum of the gross proceeds of the IPO and the gross proceeds raised by Padlock UK Holdco 2 Limited (“UK Holdco”), a subsidiary of the Trust, in connection with the issuance of its class B shares (the “Class B UK Holdco Shares”)
Acquisition Fee	An amount equal to 1.0% of the gross acquisition cost ofeachproperty (or interestina property).
Construction Management Fee	An amount equal to 3.0% of the gross costs and expenses directly associated or incurred in connection with, or related to, the demolition, renovation, construction,or development of theproperties.

The Management Agreement expires on the winding-up or dissolution of the Trust and certain of its subsidiaries. The Management Agreement can be terminated early in certain circumstances, including (i) upon the dissolution, liquidation, bankruptcy, insolvency or winding-up of the Managers; and (ii) breach of the Managers’ standard of care, which breach may be disputed by the Managers acting in good faith by referring the matter to arbitration, the decision resulting from such arbitration to be final.

For the year ended December 31, 2023, asset management fees charged to the UK Holdco by the Managers were £317,916 (year ended December 31, 2022: £333,467).

For the year ended December 31, 2023, no acquisition fees were incurred (year ended December 31, 2022: £24,635).

For the year ended December 31, 2023, construction management fees charged to the UK Holdco by the Managers were £41,675 (year ended December 31, 2022: £58,346).

As at December 31, 2023, amounts due from related parties consist of £3,397 due from the UK Manager (due to manager December 31, 2022: £54,383). Amounts due to the UK Manager are unsecured, bear no interest and have no specific terms of repayment.

Carried Interest

• 20 -

The UK Manager, as a holder of all issued and outstanding Class B UK Holdco Shares, is entitled to receive, after (i) payment of all expenses of the Trust and its subsidiaries, (ii) payment of the UK Holdco Minimum Return (as such term is defined in the Prospectus) of 7% per annum by UK Holdco to holders of Class B UK Holdco Shares (the calculation of which, for greater clarity, includes repayment of the UK Holdco Invested Capital (as such term is defined in the Prospectus)), calculated in Canadian dollars based on the applicable exchange rate on the date such distributions are paid by UK Holdco, (iii) payment of the Minimum Return (as such term is defined in the Prospectus) of 7% per annum by the Trust to Unitholders (the calculation of which, for greater clarity, includes the repayment of Invested Capital), the UK Manager, as the holder of all issued and outstanding Class B UK Holdco Shares, will be entitled to receive 50% of all further distributions made by UK Holdco (i.e., a catch-up) until the amounts (calculated in Canadian dollars based on the applicable exchange rate on the date of any such payment), if any, distributable to the Trust as payment of interest and principal on the UK Holdco Notes (as such term is defined in the Prospectus) and to the holders of the class A shares of UK Holdco and Class B UK Holdco Shares (other than catch up payments) in excess of the sum of (i) Invested Capital, and (ii) the UK Holdco Invested Capital is equal to four times (i.e. 80%/20%) the catch-up payment receivable by the UK Manager, and thereafter the UK Manager will be entitled to receive, in addition to its pro rata share of distributions based on the UK Holdco Invested Capital, 20% of all further distributions made by UK Holdco.

As at December 31, 2023, carried interest allocated to the UK Manager was £nil. As of December 31, 2022, the carried interest allocated to the UK Manager was £92,056.

OFF-BALANCE SHEET ARRANGEMENTS

The Trust does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the financial performance, liquidity or capital resources of the Trust.

SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies is available in Note 4 of the Trust’s Audited Financial Statements. The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and contingent assets and liabilities at each financial statement date, and revenues and expenses for the periods indicated. Actual results could differ from those estimates.

Use of Estimates

The preparation of the Trust’s Audited Financial Statements in accordance with IFRS requires estimates and assumptions that affect the carrying amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Trust’s Audited Financial Statements, and disclosure of the reported amounts of revenues and expenses during the Reporting Period. Actual results could differ from estimates.

The following significant areas use estimates and assumptions made by management in the preparation of the Trust’s Audited Financial Statements.

Investment Properties

The determination of the fair value of investment properties requires the use of estimates such as the estimated useful lives and related depreciation and amortization charges. The useful lives could change significantly as a result of technical innovations or other events. The depreciation and amortization charge will increase where the useful lives are less than previously estimated, or technically obsolete or non-strategic assets that have been abandoned or sold and will be written down.

Deferred Income Taxes

The amounts recorded for deferred income taxes are based on estimates as to the timing of the reversal of temporary differences and tax rates currently substantively enacted. They are also based on estimates of the probability of the Trust and its subsidiaries utilizing losses carried forward. To the extent assumptions regarding future probability change, there can be a change in the amounts recognized in respect if deferred tax assets as well as the amounts recognized in profit or loss in the period in which the change occurs. The Trust’s estimate of deferred taxes is based

• 21 -

on the assumption that the Trust’s liquidating event occurs through a direct sale of the properties. Should the Trust’s liquidating event occur through a sale of the Trust’s Units, or a disposition of its ownership interests in its UK subsidiaries, the estimated deferred taxes may differ .

RISKS AND UNCERTAINTIES

There are certain risks inherent in an investment in the Units and in the activities of the Trust, including the factors listed below and other events and factors which are beyond the control of the Trust:

Real Property Ownership and Revenue Risks

All real property investments are subject to a degree of risk and uncertainty. There can be no assurance that the operations of the Trust will be profitable or that cash from operations will be available to make distributions to Unitholders. Because real estate, like many other types of long-term investments, experiences significant fluctuations and cycles in value, specific market conditions may result in occasional or permanent reductions in the value of the Trust’s portfolio. Further, the Trust may buy and/or sell properties at less than optimal times. By specializing in a particular type of real estate, the Trust is exposed to adverse effects on that segment of the real estate market and does not benefit from a diversification of its portfolio by property type. The Trust’s revenues as well as the marketability and value of the portfolio will depend on many factors beyond the control of the Trust, including, without limitation: (i) changes in general economic conditions (such as the availability, terms and cost of mortgage financing and other types of credit); (ii) local economic conditions (such as business layoffs, industry slowdowns, changing demographics, neighbourhood characteristics and other factors); (iii) local real estate conditions (such as an oversupply of properties or a reduction in demand for real estate in the area); (iv) changes in occupancy rates; (v) competition from other available properties; (vi) the ability of the Trust to provide adequate maintenance at competitive costs; (vii) the promulgation and enforcement of governmental regulations relating to land-use and zoning restrictions, environmental protection and occupational safety; (viii) changes in governmental rules and fiscal policies; (ix) various uninsured or uninsurable risks; (x) civil unrest; (xi) acts of God and natural disasters; and (xii) acts of war or terrorism. In the event that any of the Trust’s properties experience any of the foregoing events or occurrences, the value of, and return on, such investments would be negatively impacted.

There can be no assurance of profitable operations because the costs of operating the portfolio, including debt service, may exceed gross rental income therefrom, particularly since certain expenses related to real estate, such as property taxes, utility costs, maintenance costs and insurance, tend to increase even if there is a decrease in the Trust’s income from such investments. There is also no assurance that there will be a ready market for the sale of the portfolio because, as outlined below, investments in real estate generally are not liquid.

The success of the Trust will depend on the availability of, and the degree of competition for, attractive investments. The Trust’s operating results will depend on the availability of, as well as the ability of management to identify, consummate, manage and realize, attractive real estate investment opportunities. It may take considerable time for the Trust to identify and consummate appropriate investments. No assurance can be given that the Trust will be successful in identifying and consummating future investments which satisfy the Trust’s rate of return objective or that such investments, once consummated, will perform as expected. The Trust will be engaged in a competitive business and will be competing for attractive investments with existing real estate investment funds and other funds formed in the future with similar investment objectives. These factors may affect the Trust’s ability to make investments in the future.

In the event of default by a tenant, delays or limitations in enforcing rights as lessor may be experienced and substantial costs in protecting UK Holdco’s investment may be incurred. A prolonged deterioration in economic conditions could increase and exacerbate the foregoing risks. The failure to rent unleased space on a timely basis or at all would likely have an adverse effect on the Trust’s financial condition.

Historical occupancy rates and revenues are not necessarily an accurate prediction of the future occupancy rates for the Properties or revenues to be derived therefrom. There can be no assurance that, upon the expiry or termination of existing leases, the average occupancy rates and revenues will be higher than historical occupancy rates and revenues, and it may take a significant amount of time for market rents to be recognized by the Trust due to internal and external limitations on its ability to charge these new market based rents in the short-term.

• 22 -

Catastrophic Events, International Conflict, Natural Disasters, Severe Weather and Disease

The Trust’s business may be negatively impacted to varying degrees by a number of events which are beyond its control, including tornadoes, earthquakes, fires, floods, ice storms, cyber-attacks, unauthorized access, energy blackouts, pandemics, outbreaks of infectious disease, other public health crises affecting the markets where the Trust operates, terrorist attacks, acts of war, or other natural or manmade catastrophes. In addition, liquidity and volatility, credit and insurance availability, and market and financial conditions generally could change at any time as a result. Any of these events in isolation or in combination, could have a material negative impact on the Trust’s financial condition, results of operations, and decrease the amount of cash available for distribution to Unitholders.

Construction and Development Risk

Property development and construction are subject to a number of risks, including: (i) the potential that the Trust may fail to recover expenses already incurred if it abandons the development opportunity; (ii) construction or development costs may exceed original estimates, possibly making a development project less profitable than originally estimated, or unprofitable; (iii) the time required to complete the construction or development of a development project or to lease up the completed project may be greater than anticipated, thereby adversely affecting the Trust’s cash flow and liquidity projections; (iv) the cost and timely completion of construction (including risks beyond the Trust’s control, such as weather, labour conditions or material shortages); (v) contractor and subcontractor disputes, strikes, labour disputes or supply disruptions; (vi) the failure to achieve expected occupancy levels within the projected time frame, if at all; (vii) delays with respect to obtaining governmental permits and changes in zoning and land use laws; (viii) occupancy rates and rents of a completed development project may not be sufficient to make such development project profitable; (ix) the Trust’s ability to dispose of a completed development project could be impacted by the ability of prospective buyers to obtain financing; and (x) the availability and pricing of financing to fund the Trust’s development activities on favourable terms or at all.

The above risks could result in substantial unanticipated delays or expenses and, under certain circumstances, could prevent the initiation of development activities or the completion of development activities once undertaken. In addition, development projects entail risks that investments may not perform in accordance with expectations and can carry an increased risk of litigation (and its attendant risks) with contractors, subcontractors, suppliers, partners and others. Any of these risks could have an adverse effect on the Trust’s cash flows, financial condition or results of operations and its ability to make distributions to Unitholders.

Public Health Crises and Disease Outbreaks

Public health crises, including relating to any virus, flu, epidemic, pandemic or any other similar disease or illness (each a “ Health Crisis ”) could materially adversely impact the ability of tenants to meet their payment obligations and thereby the Trust’s business. A Health Crisis could further result in a general or acute decline in economic activity in the regions in which the Trust holds assets, increased unemployment, staff shortages, reduced tenant traffic, mobility restrictions and other quarantine measures, supply shortages, increased government regulation, and the quarantine or contamination of one or more of the Trust’s properties. Contagion in a property or market in which the Trust operates could negatively impact its occupancy, reputation or attractiveness. All of these occurrences may have a material adverse effect on the Trust’s business, cash flows, financial condition and results of operations and ability to make distributions to holders of Units. Furthermore, increased government regulation relating to a Health Crisis could result in legislation or regulations that may restrict the Trust’s ability to enforce material provisions under its leases, including in respect of the collection of rent or other payment obligations or the ability of the Trust to raise rent or the ability of the Trust to evict tenants for non-payment of rent, among other potential adverse impacts, that could have a material adverse effect on the Trust’s business, cash flows, financial condition and results of operations and ability to make distributions to holders of Units.

Rental Income Risks

The Properties generate income primarily through rent payments made by the tenants thereof. Upon expiry of any lease, there can be no assurance that the lease will be renewed or the tenant replaced for a number of reasons. Furthermore, the terms of any subsequent lease may be less favourable than the existing lease. If a significant number of tenants of the Properties are unable to meet their obligations under their leases or if a significant amount of available space in the Properties becomes vacant and cannot be re-leased out to tenants on economically favourable terms, the Properties may

• 23 -

not generate revenues sufficient to meet Operating Expenses, including debt service and capital expenditures, and Distributable Cash will be adversely affected.

The short-term nature of self-storage and mixed-use leases exposes the Trust to the effects of declining market rent, which could materially adversely affect the Trust’s results from operations and ability to make distributions to Unitholders. Most of the Trust’s self-storage and mixed-use leases will be for a term of one year or less. Because self-storage and mixed-use leases generally permit tenants to leave at the end of their lease term without any penalty, the Trust’s rental revenue may be materially adversely affected by declines in market rents more quickly than if such leases were for longer terms.

Competition for Real Property Investments or Tenants

The Manager will compete for suitable real property investments with individuals, corporations, REITs and similar vehicles, and institutions which are presently seeking or which may seek in the future real property investments or tenants similar to those sought by the Manager. Such competition could have an impact on the Trust’s ability to lease units in the Properties and on the rents charged. An increased availability of investment funds allocated for investment in real estate would tend to increase competition for real property investments and increase purchase prices, reducing the yield on such investments. There is a risk that continuing increased competition for real property acquisitions may increase purchase prices to levels that are not accretive.

General Competition from Other Self-Storage Operators

The Trust faces competition in most markets in which its Properties are located and, in the future, this level of competition may increase if and as existing operators become more successful and new operators enter the market.

Certain competitors may offer lower prices, better locations, better services or other attractive features in any given properties’ catchment area, which may heighten competition for tenants. Local market conditions play a significant role in how competition affects the Trust, in particular on the prices the Trust is able to set, and additional competition may lower occupancy levels and rental revenue of the Trust’s properties in specific markets from time to time.

In addition, there are limited barriers to entry into the self-storage business due to relatively limited amounts of capital needed to acquire existing properties or build new facilities, and, therefore, any of the properties comprising the Initial Portfolio could face additional competition from new market entrants on relatively short notice. Maintaining a competitive position in the markets in which the Trust operates may also require continued investment in its properties and in the development of new properties. No assurance can be given that the Trust will have sufficient resources to make the necessary investments, that any such investments would lead to higher occupancy rates, allow the Trust to charge higher rental rates or otherwise generate incremental earnings. If competition intensifies and the Trust occupancy rates or rental revenues decline, this could result in a material adverse effect on the Trust’s business, financial condition and results of operations.

Regulation and Changes in Applicable Laws

The Trust is subject to laws and regulations governing the ownership and leasing of real property, zoning, building standards, landlord tenant relationships, employment standards, environmental matters, taxes and other matters. It is possible that future changes in applicable laws or regulations or changes in their enforcement or regulatory interpretation could result in changes in the legal requirements affecting the Trust (including with retroactive effect). Any changes in the laws to which the Trust is subject could materially adversely affect the Trust’s rights and title to its assets. It is not possible to predict whether there will be any further changes in the regulatory regimes to which the Trust is subject or the effect of any such changes on its investments. Lower revenue growth or significant unanticipated expenditures may result from the Trust’s need to comply with changes in applicable laws or the enactment of new laws, including: (i) laws imposing environmental remedial requirements and the potential liability for environmental conditions existing on properties or the restrictions on discharges or other conditions; or (ii) other governmental rules and regulations or enforcement policies affecting the development, use and operation of the properties, including changes to building codes and fire and life-safety codes. As a result, the Trust may, in the future, incur capital expenditures which may not be fully recoverable from tenants.

The Trust is subject to a number of laws relating to privacy and data protection, including General Data Protection Regulation (Regulation (EU) 2016/679) (“GDPR”) and certain other data protection and privacy laws. Such laws govern

• 24 -

the Trust’s ability to collect, use and transfer personal data relating to customers, as well as any such data relating to our employees and others.

While the Trust strives to comply with all applicable laws and regulations relating to privacy and data protection, it is possible that such requirements may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or may conflict with other rules or our practices. That concern is particularly relevant for the GDPR given that different member state of the European Union regulators may differ as to its interpretation and their approach to enforcement. Additionally, the Trust relies on third parties and our employees for the collection and processing of personal data, and as a result are exposed to the risk that such data could be wrongfully appropriated, lost or disclosed, damaged or processed in breach of privacy or data protection laws.

Property Encumbrances

The Properties are subject to various easements and charges including, without limitation, gas, water, electricity and other utility easements and rights of access and conduits to and across the Properties. The Trust has identified that in some instances, the buildings and other improvements located on the Properties encroach onto these easements and, in some isolated instances, improvements on the properties encroach onto adjacent properties. Where such encroachments exist, the Trust may be required to grant or obtain additional easement area and could be responsible for the cost of moving existing infrastructure. In the event that the owner of an easement damages an improvement while working within the easement, the Trust could be responsible for the cost of repairs. Further, in certain circumstances if an owner of an adjoining property were to take action to block certain rights of access, the Trust may be required to seek a court order to maintain access to and from the applicable property.

Environmental Matters and Climate Change Risk

Under various environmental laws, UK Holdco and/or its subsidiaries could become liable for the costs of removal or remediation of certain hazardous or toxic substances that may have been or may in the future be released on, in or under one or more of the Properties, or may have liability for offsite migration of such substances. The failure to deal effectively with such substances may adversely affect the Manager’s ability to sell such property or to borrow using the property as collateral, and could potentially also result in claims against UK Holdco by third parties. In addition, if hazardous substances are located on or in, or released from one of the Trust’s properties, the Trust could incur substantial liabilities through a private party personal injury claim, a claim by an adjacent property owner for property damage or a claim by a governmental entity. It is also possible that the Trust’s customers will violate their lease agreements by introducing hazardous or toxic substances into the Properties the Trust owns or manages and expose the Trust to liability under environmental laws. The costs of defending these claims, conducting environmental remediation, resolving liabilities caused by tenants or to third parties or responding to changed conditions could have a material adverse effect on the Trust’s business, financial condition and results of operations.

Environmental laws and regulations may change and the Trust may become subject to more stringent environmental laws and regulations in the future. Compliance with more stringent environmental requirements, the identification of currently unknown environmental issues, or an increase in the costs required to address a currently known condition may have a material adverse effect on the Trust’s business, cash flows, financial condition, results of operations, property values, ability to finance assets, and ability to make distributions to Unitholders.

Events arising due to climate change, such as natural disasters, earthquakes and severe weather such as hurricanes, tornadoes, floods, ice storms, blizzards, wildfires, rising temperatures and other adverse weather and climate conditions may result in damage to the Trust’s properties, decreased property values, reduced operating income and cash flows.

Capital Expenditures and Fixed Costs

Certain significant expenditures, including property taxes, maintenance costs, mortgage payments, insurance costs and related charges must be made throughout the period of ownership of real property regardless of whether a property is producing any income to pay such expenses. In order to retain desirable rentable space and to generate adequate revenue over the long-term, the Trust must maintain or, in some cases, improve each property’s condition to meet market demand. Maintaining a rental property in accordance with market standards can entail significant costs, which the Trust may not be able to pass on to its tenants. Numerous factors, including the age of the relevant building structure, the material and substances used at the time of construction or currently unknown building code violations could result in substantial

• 25 -

unbudgeted costs for refurbishment or modernization. The timing and amount of capital expenditures required by the Trust will indirectly affect the amount of cash available for distribution to Unitholders. Distributions may be reduced, or even eliminated, at times when the Trust deems it necessary to make significant capital or other expenditures.

If the actual costs of maintaining or upgrading a property exceed the Trust’s estimates, or if hidden defects are discovered during maintenance or upgrading which are not covered by insurance or contractual warranties, the Trust will incur additional and unexpected costs. If competing storage or mixed-use properties are built in the area where one of the Trust’s properties is located, the net rental income derived from and the value of such property could be reduced. Any failure by the Trust to undertake appropriate maintenance and refurbishment work in response to the factors described above could materially adversely affect the rental income that the Trust earns from such properties and could have a material adverse effect on the cash slow, financial condition and results of operations and its ability to make distributions to Unitholders. Certain operating costs or cost increases that may not be able to be reflected in rental rates include the following:

• increases in payroll expenses and energy costs;

• currency fluctuations; and

• changes in laws, regulations or government policies (including those relating to health, safety and environmental compliance), which increase the costs of compliance with such laws, regulations or policies.

Liquidity

Real property investments tend to be relatively illiquid, with the degree of liquidity generally fluctuating in relation to demand for and the perceived desirability of such investments. Such illiquidity will tend to limit the Trust’s ability to vary its portfolio of properties promptly in response to changing economic, investment or other conditions. If the Trust were to be required to quickly liquidate its real property investments, the proceeds to the Trust might be significantly less than the aggregate carrying or net asset value of the Properties or less than what would be expected to be received under normal circumstances which could have an adverse effect on the Trust’s financial condition and results of operations and decrease the amount of cash available for distribution. Illiquidity may result from the absence of an established market for real property investments, as well as from legal or contractual restrictions on their resale. In addition, in recessionary times, it may be difficult to dispose of certain types of real estate. The costs of holding real estate are considerable, and during an economic recession the Trust may be faced with ongoing expenditures with a declining prospect of incoming receipts. In such circumstances, it may be necessary for the Trust to dispose of properties at lower prices in order to generate sufficient cash for operations and making distributions. There can be no assurance that the fair market value of any properties held by the Trust will not decrease in the future.

Liability and Reputational Damage due to Goods Stored by Customers

The Trust does not generally have access to its customers’ storage units and cannot prevent its customers from storing hazardous materials, stolen goods, counterfeit goods, drugs or other illegal substances in our storage units. Although the terms of the Trust’s standard lease contracts for customers prohibit the storage of illegal and certain other goods on our premises, it is not possible to monitor goods stored by tenants at the Properties and the Trust cannot exclude the possibility that the Trust may be held ultimately liable with respect to the goods stored by the Trust’s tenants. In the event that a tenant stores an item that is contrary to the Trust’s tenant terms and conditions, any subsequent damage to a third party caused by the item may not be covered by our insurance. In addition, unfavorable publicity as a result of illegal contents stored at one of the Trust’s properties, or items that have been used or are planned to be used in crimes or for other illegal purposes, including terrorist attacks, could have a material adverse effect on our business, financial condition, and results of operations.

Economic Environment

The Trust is subject to risks involving the economy in general, including recessions, inflation, deflation or stagflation, unemployment and geopolitical issues such as the conflicts in Ukraine and the Middle East. Poor economic conditions could adversely affect the Trust’s ability to generate revenues, thereby reducing its operating income and earnings. Such conditions could also have an adverse impact on the ability of the Trust to maintain occupancy rates which could harm the Trust’s financial condition. In weak economic environments, the Trust’s tenants may be unable to meet their rental payments and other obligations due to the Trust, which could have a material and adverse effect on the Trust. In addition, fluctuation in interest rates or other financial market volatility may restrict the availability of financing for future prospective Purchasers of the Trust’s investments and could potentially reduce the value of such investments.

• 26 -

Geographic Concentration

The Properties are located in the UK. Concern about the stability of the markets generally and the strength of the economy may lead Lenders to reduce or cease to provide funding to businesses and consumers, and force financial institutions to continue to take the necessary steps to restructure their business and capital structures. Weak economic conditions in the UK and the uncertainty over the duration of these conditions could have a negative impact on the retail industry. Recent improvements in demand trends globally may not continue, and the Trust’s future financial results and growth could be harmed or constrained if the recovery stalls or conditions worsen.

Holding Entity Structure

As a holding entity, the Trust’s ability to meet its obligations, including payment of interest, other operating expenses and distributions, and to complete current or desirable future enhancement opportunities or acquisitions generally depends on the receipt by the Trust of dividends, distributions and/or interest payments from its subsidiaries as the principal source of cash flow to pay distributions on the Units. As a result, the cash flow and ability to pay distributions, including on the Units, are dependent upon the earnings of its subsidiaries and the distribution of those earnings and other funds by its subsidiaries to it. The payment of interest, dividends and/or distributions by certain of the Trust’s subsidiaries may be subject to restrictions set out in relevant tax or corporate laws and regulations, constating or constitutional documents or other governing provisions, which may require that certain subsidiaries remain solvent following payment of any such interest, dividends and/or distributions. Substantially all of the Trust’s business will be conducted through its subsidiaries.

Distributions may be Reduced or Suspended

Although the Trust intends to distribute its available cash to Unitholders, such cash distributions may be reduced or suspended. The ability of the Trust to pay Unitholders a targeted annual pre-tax distribution yield of between 6% and 8% across all Unit classes and the actual amount distributed or paid to Unitholders will vary as between classes of Units based on the proportionate entitlements of each class of Units and exposure to the Canadian dollar/pound sterling exchange rates, and will depend on the ability of the Trust to fully deploy the net proceeds of the Offering and any concurrent private placements to indirectly acquire interests in the Properties and manage ongoing operations of the Properties. The Minimum Return payable to Unitholders of Class A Units, Class C Units, Class F Units and Class U Units, is not guaranteed and may not be paid on a current basis in each year or at all. The return on an investment in the Units is not comparable to the return on an investment in a fixed income security. Cash distributions, including a return of a Unitholder’s original investment, are not guaranteed and their recovery by an investor is at risk and the anticipated return on investment is based upon many performance assumptions. It is important for Purchasers to consider the particular risk factors that may affect the real estate investment markets generally and therefore the availability and stability of the distributions to Unitholders. Moreover, while the Minimum Return is 7% per annum in respect of the Units, it may not be equal to 7%, and does not mean that Unitholders should expect to receive a 7% return per annum and return of their Invested Capital before the Carried Interest becomes payable.

Capital Depletion Risk

While the Trust expects that its cash flows will stabilize in the third year following closing of the IPO, distributions to Unitholders may, in whole or in part, be comprised of returns of capital prior to and following such date. A return of capital means all, or a portion of, the distributions provided to Unitholders is derived from funds that were invested in the Trust originally, as opposed to the returns or income generated by the investment in the Trust. Returns of capital that are not reinvested will reduce the net asset value of the particular class of Units of the Trust, as applicable, and may reduce the total assets of the Trust available for investment. This may affect the ability for the Trust to generate future income.

Acquisitions

The Manager intends to acquire interests in properties selectively. The acquisition of interests in properties entails risks that investments will fail to perform in accordance with expectations. In undertaking such acquisitions, the Manager will incur certain risks, including the expenditure of funds on, and the devotion of management’s time to, transactions that may not come to fruition. Additional risks inherent in acquisitions include risks that the Properties will not achieve anticipated occupancy levels. Properties may be subject to unknown, unexpected or undisclosed liabilities which could have a material adverse impact on the operations and financial results of the Trust, and estimates of the costs of improvements to bring an acquired property up to standards established for the market position intended for that property may prove inaccurate.

• 27 -

Limited Recourse Against Property Vendors

When acquiring assets, the Trust will endeavour to obtain certain representations and warranties with respect to the assets being acquired. Such representations and warranties, to the extent obtained, are subject to limitations, and generally represent unsecured contractual rights. Notwithstanding the foregoing, when acquiring assets on a go forward basis, the Trust will endeavour to negotiate holdbacks from the aggregate purchase price, where appropriate, which holdback amounts are deposited into escrow at the closing of an acquisition, and are held and released in accordance with, and subject to, the terms of the relevant purchase and sale agreement and a separate holdback escrow agreement. Holdback amounts are used to satisfy the indemnification obligations of the sellers of the assets acquired by the Trust with respect to the representations and warranties provided by the sellers under the purchase and sale agreements pursuant to which the assets are acquired.

Alternatively, to address such risk the Trust may (i) seek warranty and indemnity insurance to insure against any misrepresentation or breach of warranty or indemnity caused by the seller; or (ii) seek a personal guaranty from the seller which provides greater ability for the Trust to collect against the personal assets of the seller in the event of default. Although the Trust shall endeavour to exercise such precautions, the Trust may, in the sole and absolute discretion of the Manager, determine that such measures are not necessary or that the opportunity presented by a potential acquisition outweighs the risk of foregoing such measures.

There can be no assurance of recovery by the Trust for any breach of the representations and warranties provided under any of the purchase and sale agreements pursuant to which it will acquire properties, as there can be no assurance that the holdback amounts, warranty and indemnity insurance, or guaranty, if any, or assets of the sellers of the properties will be sufficient to satisfy such obligations. The Trust may not be able to successfully enforce applicable indemnities contained in the purchase and sale agreements pursuant to which the Trust will acquire properties and such indemnities may not be sufficient to fully indemnify the Trust from third party claims. Only the Trust (or its subsidiaries) will be entitled to bring a claim or action for misrepresentation or breach of contract under such purchase and sale agreements and Unitholders will not have any contractual rights or remedies under such agreements.

Use Of Property Appraisals

Appraisals are obtained for acquired properties and the Trust may, from time to time, engage appraisers to provide independent estimates of the fair market value range in respect of existing properties. Caution should be exercised in the evaluation and use of appraisals, which are estimates of market value applying the analysis and opinion of qualified experts as of the effective date of such appraisals. It is not a precise measure of value but is based on a subjective comparison of related activity taking place in the real estate market. The appraisals are based on various assumptions of future expectations, and while the appraisers’ internal forecasts for the applicable properties are considered to be reasonable at the current time, some of the assumptions may not materialize or may differ materially from actual experience in the future.

Reliance on Assumptions

The Trust’s investment objectives and the Manager’s strategy have been formulated based on the Manager’s analysis and expectations regarding recent economic developments in the UK, the future of UK real estate markets generally, and the pound sterling to Canadian dollar exchange rate. Such analysis may be incorrect and such expectations may not be realized, in which case, if UK Holdco fails to generate the Minimum Return, Unitholders can expect the annualized pre-tax distribution yield per Unit to be less than 6% across all Unit classes.

Access to Capital

The real estate industry is highly capital intensive. The Trust will require access to capital to maintain its properties, as well as to fund its growth strategy and certain capital expenditures from time to time. Although the Trust expects to have access to debt financing, there can be no assurances that the Trust will otherwise have access to sufficient capital or access to capital on terms favourable to the Trust for future property acquisitions, financing or refinancing of properties, funding operating expenses or other purposes. Further, in certain circumstances, the Trust may not be able to borrow funds due to the limitations set forth in the Trust Declaration. Market conditions and unexpected volatility or illiquidity in financial markets may inhibit the Trust’s access to long-term financing in the Canadian capital markets. As a result, it is possible that financing which the Trust may require in order to grow and expand its operations, upon refinancing any particular property owned by the Trust or otherwise, may not be available or, if it is available, may not be available on favourable

• 28 -

terms to the Trust. Failure by the Trust to access required capital could have a material adverse effect on the Trust’s business, cash flow, financial condition and results of operations and ability to make distributions to Unitholders.

Financing Risks

There is no assurance that the Manager will be able to obtain sufficient loans (“ Mortgage Loans ”) to finance the acquisition of interests in properties, or, if available, that the Manager will be able to obtain Mortgage Loans on commercially acceptable terms. Further, there is no assurance or guarantee that any Mortgage Loans, if obtained, will be renewed when they mature or, if renewed, renewed on the same terms and conditions (including the rate of interest). In the absence of mortgage financing, the number of properties which UK Holdco is able to purchase will decrease unless further funding is successfully sought and the return from the ownership of properties (and ultimately the return on an investment in Units) will be reduced. Even if the Manager is successful in obtaining adequate Mortgage Loans, the Manager may not be able to generate sufficient funds through the operation of the Properties to service the Mortgage Loans. If a default occurs under any of the Mortgage Loans, one or more of the Lenders could exercise its rights including, without limitation, foreclosure or sale of the Properties.

Inflation Risk

Global and domestic inflationary pressures, external supply constraints, competitive labour markets, together with the imposition by central banks of higher interest rates, may put pressure on the Trust’s financing and labour costs as well as tenants’ ability to pay rent in full or on a timely basis. If inflation at elevated levels persists and interest rates continue to climb, an economic contraction could be possible. There can be no assurances regarding the impact of a significant economic contraction on the business, operations, and financial performance of the Trust and its tenants. If the Trust’s operating costs were to become subject to significant inflationary pressures, it may negatively influence its operations and the Trust may not be able to offset these higher operating costs by increasing rent from its tenants. This may have a material adverse effect on the Trust’s business, cash flows, financial condition, results of operations, and ability to make distributions to Unitholders.

Revenue Shortfalls

Revenues from the Properties may not increase sufficiently to meet increases in operating expenses or debt service payments under the Mortgage Loans or to fund changes in the variable rates of interest charged in respect of such loans.

Fluctuations in Interest Rates and Capitalization Rates

The Mortgage Loans may include indebtedness with interest rates based on variable lending rates that will result in fluctuations in UK Holdco’s cost of borrowing.

As interest rates fluctuate in the lending market, generally capitalization rates will as well, which affects the underlying value of real estate. As such, when interest rates rise, generally capitalization rates should be expected to rise. Over the period of investment, capital gains and losses at the time of disposition can occur due to the increase or decrease of these capitalization rates.

Litigation at the Property Level

The acquisition, ownership and disposition of real property carries certain specific litigation risks. Litigation may be commenced with respect to a property acquired by the Trust or its subsidiaries in relation to activities that took place prior to the Trust’s acquisition of such property. In addition, at the time of disposition of an individual property, a potential buyer may claim that it should have been afforded the opportunity to purchase the asset or alternatively that such buyer should be awarded due diligence expenses incurred or damages for misrepresentation relating to disclosures made, if such buyer is passed over in favour of another as part of the Trust’s efforts to maximize sale proceeds. Similarly, successful buyers may later sue the Trust under various damage theories, including those sounding in tort, for losses associated with latent defects or other problems not uncovered in due diligence.

General Litigation

• 29 -

In the normal course of the Trust’s operations, whether directly or indirectly, it may become involved in, named as a party to or the subject of, various legal proceedings, including regulatory proceedings, tax proceedings and legal actions in relation to personal injuries, property damage, property taxes, land rights, the environment and contract disputes. The outcome with respect to outstanding, pending or future proceedings cannot be predicted with certainty and may be determined in a manner adverse to the Trust and as a result, could have a material adverse effect of the Trust’s assets, liabilities, business, financial condition and results of operations. Even if the Trust prevails in any such legal proceedings, the proceedings could be costly and time-consuming and may divert the attention of management and key personnel from the Trust’s business operations, which could have a material adverse effect on the Trust’s business, Cash Flow, financial condition and results of operations and ability to make distributions to Unitholders.

Control Over Investments

The Trust may, on advice of the Manager, invest in, or be a participant in, directly or indirectly, joint ventures and partnerships with third parties in respect of the Properties. A joint venture or partnership involves certain additional risks, including:

• (i) the possibility that such co-venturers/partners may at any time have economic or business interests or goals that will be inconsistent with the Trust’s or take actions contrary to the Manager’s instructions or requests or to the Manager’s policies or objectives with respect to the Properties;

• (ii) the co-venturer/partner may have control over all of the day to day and fundamental decisions relating to a property;

• (iii) the risk that such co-venturers/partners could experience financial difficulties or seek the protection of bankruptcy, insolvency or other laws, which could result in additional financial demands to maintain and operate such properties or repay the co-venturers’/partners’ share of property debt guaranteed by the Trust or its subsidiaries or for which the Trust or its subsidiaries will be liable and/or result in the Trust suffering or incurring delays, expenses and other problems associated with obtaining court approval of joint venture or partnership decisions;

• (iv) the risk that such co-venturers/partners may, through their activities on behalf of or in the name of the ventures or partnerships, expose or subject the Trust or its subsidiaries to liability; and

• (v) the need to obtain co-venturers’/partners’ consents with respect to certain major decisions or inability to have any decision making authority, including the decision to distribute cash generated from such properties or to refinance or sell a property.

In addition, the sale or transfer of interests in certain of the joint ventures and partnerships may be subject to certain requirements, such as rights of first refusal, rights of first offer or drag-along rights, and certain of the joint venture and partnership agreements may provide for buy-sell or similar arrangements. Such rights may inhibit the Trust’s ability to sell an interest in a property or a joint venture/partnership within the time frame or otherwise on the basis the Manager desires. Additionally, drag-along rights may be triggered at a time when the Manager may not advise the Trust to sell its interest in a property, but the Trust may be forced to do so at a time when it would not otherwise be in its best interest.

Potential Conflicts of Interest

The Trust may be subject to various conflicts of interest because certain affiliates, and their respective directors, officers and associates, as well as the Trustees, the executive officers and the Manager, are engaged in a wide range of real estate and other business activities. The Trustees will, from time to time, in their individual capacities, deal with parties with whom the Trust may be dealing, or may be seeking investments similar to those desired by the Trust. The interests of these persons could conflict with those of the Trust. Pursuant to the Trust Declaration, all decisions to be made by the Board which involve the Trust are required to be made in accordance with the Trustee’s duties and obligations to act honestly and in good faith with a view to the best interests of the Trust and its Unitholders. In addition, the Trust Declaration contains provisions requiring the Trustees to disclose their interests in certain contracts and transactions and to refrain from voting on those matters. Conflicts may also exist as certain Trustees will be affiliated with Clear Sky. There can be no assurance that the provisions of the Trust Declaration will adequately address potential conflicts of interest or that such actual or potential conflicts of interest will be resolved in favour of the Trust.

• 30 -

Cyber Security Risk

Cyber security has become an increasingly problematic issue for issuers and businesses around the world, including the Trust. Cyber attacks against large organizations are increasing in sophistication and are often focused on financial fraud, compromising sensitive data for inappropriate use, or disrupting business operations. As the Trust’s reliance on technology has increased, so have the risks posed to its systems. The Trust’s primary risks include operational interruption, damage to its reputation, damage to the Trust’s business relationships with its tenants, disclosure of confidential information regarding its tenants, employees and third parties with whom the Trust interacts, and may result in negative consequences, including remediation costs, loss of revenue, additional regulatory scrutiny, and litigation. The Trust has implemented processes, procedures, and controls to mitigate these risks, including cyber security awareness training.

Insurance Coverage May be Inadequate

The Trust will attempt to obtain adequate insurance of the type and coverage customarily obtained for properties similar to those owned by the Trust to cover significant areas of risk to it as an entity and to its properties. However, there are types of losses at the property level, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, tornadoes, hurricanes, pollution or environmental matters, which are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. The Trust may not have adequate coverage for such losses. If any of the Trust property incurs a casualty loss that is not fully insured or the insurer is unable to pay due to insolvency, the value of the Trust’s assets will be reduced by any such uninsured loss. In addition, other than any working capital reserve or other reserves the Trust may establish, it has no source of funding to repair or reconstruct any uninsured damaged property. Further, to the extent the Trust must pay unexpectedly large amounts for insurance, it could suffer reduced earnings that may result in lower distributions to Unitholders.

Reliance on the Manager

Unitholders assessing the risks and rewards of this investment will, in large part, be relying on the good faith and expertise of the Manager and its senior executives, Marcus Kurschat and Matthew Collins. In particular, Unitholders rely on the discretion and ability of the Manager and their principals in determining the composition of the portfolio of properties, and in negotiating the pricing and other terms of the agreements leading to the acquisition and disposition of properties, and implementing a capital expenditure program for each property. The ability of the Manager to successfully implement the Trust’s investment strategy will depend in large part on the continued employment of Marcus Kurschat and Matthew Collins. Neither the Trust nor Manager maintains key person life insurance for any of these named individuals. If the Manager loses the services of such individuals, the business, financial condition and results of operations of the Trust may be materially adversely affected.

Reliance on Third Party Property Management

The UK Manager may rely upon independent management companies to perform property management functions in respect of each of the Properties. To the extent the UK Manager relies upon such management companies, the employees of such management companies will devote as much of their time to the management of the Properties as in their judgement is reasonably required and may have conflicts of interest in allocating management time, services and functions among the Properties and their other development, investment and/or management activities.

Currency Exchange Rate

Although investors in the Class A Units, Class F Units and Class C Units are investing in Canadian dollars and will receive distributions in Canadian dollars, the distributions are calculated based on the Canadian dollar equivalent of a given distribution (which calculation shall use the pound sterling spot exchange rate available to the Trust in respect of such distribution). The Canadian dollar is not maintained at a fixed exchange rate compared to foreign currencies but rather the value of the Canadian dollar has a floating exchange rate in relation to the pound sterling. Additionally, the business of the Trust’s subsidiaries and its affiliates is conducted in the UK. Consequently, any income and gains will be earned and any expenses and losses is incurred in UK dollars. As a result of fluctuations in the Canada/pound sterling exchange rate, the value of an investment in Units and distributions on Units when expressed in Canadian dollars, may be greater

• 31 -

or less than that determined only with reference to pound sterling. Accordingly, Unitholders are subject to currency exchange rate risk.

Use of Available Cash

The payment in cash by the Trust of the redemption price of Units will reduce the amount of cash available to the Trust for the payment of distributions to Unitholders, as the payment of the amount due in respect of redemptions will take priority over the payment of cash distributions.

Limitation on Payment of Redemption Price in Cash

The total cash amount available for the payment of the redemption price of Units by the Trust is limited to $100,000 in each calendar quarter and is also limited in any 12-month period to 1% of the aggregate Net Asset Value at the start of such 12-month period.

Payment of Redemption Price in Kind

The redemption price of Units may be paid and satisfied by way of an in specie distribution of property of the Trust, and/or unsecured subordinated notes of the Trust, as determined by the Trustees in their discretion, to the redeeming Unitholder. Such property may not be liquid and generally will not be a qualified investment for Plans. Adverse tax consequences generally may apply to a Plan and/or the annuitant, holder, subscriber or beneficiary thereunder or thereof, as a result of the redemption of Units held in a trust governed by a Plan. Accordingly, investors that propose to invest in Units through Plans should consult their own tax advisors before doing so to understand the potential tax consequences of exercising their redemption rights attached to such Units.

DIRECTORS AND EXECUTIVE OFFICERS OF THE MANAGERS

The name and municipality of residence of each of the directors and executive officers of the Managers and their principal occupation are as follows:

Name and Municipality of Residence	Date Individual became a Director or Officer	Position with Manager	Principal Occupation in the Last Five Years
Marcus Kurschat Scottsdale, AZ, USA	February 23, 2009 as to Clear Sky Capital Inc. and April 18, 2018 as to the UK Manager	Director of Canadian Manager and Manager of UK Manager	Founder and Chief Executive Officer of Clear Sky Capital Inc.
John Stevenson Tempe, AZ, USA	April 18, 2018	Chief Executive Officer of the UK Manager	Chief Executive Officer and Managing Director of the UK Manager Managing Director, Self Storage, Clear Sky Capital Inc.
Matthew Collins Phoenix, AZ, USA	April 18, 2018	Chief Financial Officer of the UK Manager	Chief Financial Officer, Clear Sky Capital Inc.
Matthew Mason Phoenix, AZ, USA	April 18, 2018	General Counsel of the UK Manager	General Counsel, Clear Sky Capital Inc.

AUDIT COMMITTEE

The Trustees have adopted a written charter for the audit committee of the Trust which sets out the audit committee’s responsibility in accordance with applicable laws including reviewing the financial statements of the Trust and public disclosure documents containing financial information and reporting on such review to the Trustees, oversight of the

• 32 -

work and review of the independence of the external auditors of the Trust and reviewing, evaluating and approving the internal control procedures that are implemented and maintained by management. A copy of the audit committee charter is attached to this MD&A as “Schedule A”.

The audit committee of the Trust is comprised of Marcus Kurschat, Dale Williams and Abbas Osman. Dale Williams and Abbas Osman are “independent” within the meaning of National Instrument 52-110 — Audit Committees (“ NI 52-110 ”) . As a “venture issuer” under applicable securities laws, the Trust is permitted to have an audit committee not comprised exclusively of independent Trustees and the Trust is relying on such an exemption in Section 6.1 of NI 52110. Set out below is a brief excerpt from the biographies of Marcus Kurschat, Dale Williams and Abbas Osman highlighting the basis for the determination that each of the members of the audit committee is financially literate within the meaning of applicable securities laws.

Marcus Kurschat: As the Founder and Chief Executive Officer of Clear Sky, Mr. Kurschat has over two decades of experience in real estate sourcing, acquisitions, structuring, development, redevelopment and repositioning. Mr. Kurschat is responsible for Clear Sky’s financial planning and oversees all aspects of the company’s financial decisions, as well as relationship with the company’s key lending/banking relationship. Mr. Kurschat holds a Structural Engineering diploma from the British Columbia Institute of Technology in Burnaby, British Columbia.

Dale Williams: Mr. Williams is a Partner in Assurance Services at WBM Partners LLP, an accounting firm. Mr. Williams has over 25 years of experience as a Chartered Professional Accountant providing accounting, assurance and business advisory services.

Abbas Osman: Mr. Abbas holds a Bachelor of Arts in Business Administration from the American University of Beirut and a Masters in Finance & Investments from the University of Nottingham, United Kingdom.

The audit committee assists the Trust in fulfilling its responsibilities of oversight and supervision of its accounting and financial reporting practices and procedures, the adequacy of internal accounting controls and procedures, and the quality and integrity of its financial statements. In addition, the audit committee will be responsible for directing the auditors’ examination of specific areas, for the selection of the Trust’s independent auditors and for the approval of all non-audit services for which its auditors may be engaged.

The audit committee is required to review and recommend for Trustee approval the external auditors to be nominated and the compensation of such external auditor. The audit committee has the ultimate authority to approve all audit engagement terms and fees, including the auditors’ audit plan. The audit committee is also required to approve in advance any retainer of the auditors to perform any non-audit service to the Trust that it deems advisable. The audit committee is authorized to delegate pre-approval authority to any member of the audit committee. The decisions of any member of the audit committee to whom this authority has been delegated must be presented to the full audit committee at its next scheduled audit committee meeting.

The following table sets forth the approximate amounts of fees paid and accrued to the Trust’s auditor, RSM Canada LLP, for services rendered during each period presented. All amounts are set out in Canadian dollars.

Type of Work	Fiscal 2023	Fiscal 2022
Audit fees	$100,323	$77,961
Tax fees	$10,474(1)	-
Total	$110,797	$77,961

Note:

(1) Includes fees paid and accrued for tax compliance, tax planning and/or tax advisory services, including the review and preparation of tax returns.

COMPENSATION DISCUSSION AND ANALYSIS

The Trust’s executive team is employed by the Managers and, as of the date hereof, does not directly employ any persons who would be considered a named executive officer (“ NEO ”) of the Trust as such term is defined in Form

• 33 -

51-102F6V – Statement of Executive Compensation – Venture Issuers . The services of the NEOs are provided by the Managers. No compensation is paid by the Trust or its subsidiaries to those persons provided by the Managers as officers of the Trust, and the compensation received by such persons from the Managers is not within or subject to the discretion of the Trustees. The compensation paid by the Trust or its subsidiaries to the Managers for services rendered is calculated in accordance with the Management Agreement.

The Trust is obligated to pay the Managers certain amounts pursuant to terms of the Management Agreement, as discussed in “Related Party Transactions and Arrangements – Arrangements with the Managers”. As such, any variability in compensation paid by the Managers to the executive team does not impact the Trust’s financial obligations.

The Trust may hire officers and employees, but such hiring, if not of the Managers’ officers, consultants or employees, would be at the sole expense of the Trust. Further, any officer that is an officer, consultant or employee provided by the Managers may be removed from such position with the Trust, at the discretion of the Trustees. The Trust is not responsible for any change of control, severance, termination or constructive dismissal payments that may be provided, or required to be provided, by the Managers to the executive team members. The following discussion is intended to describe the portion of the compensation of the executive team members that is attributable to time spent on the activities of the Trust, and supplements the more detailed information concerning compensation that appears in the table below and the accompanying narrative that follows.

As private companies, the Managers’ process for determining executive compensation is straightforward, with no specific formula for determining the amount of each element of compensation, and no formal approach applied by the Managers for determining how one element of compensation fits into the overall compensation objectives in respect of the activities of the Trust. Objectives and performance measures may vary from year to year as determined to be appropriate by the Managers without reference to any formal benchmarking.

The compensation of the NEOs paid by the Managers includes two major elements: (i) base salary; and (ii) an annual cash bonus. The Trust does not have a long-term incentive plan pursuant to which cash or non-cash compensation has been or will be paid or distributed to any Trustee or NEO. The Trust also does not have any stock appreciation rights or incentive plans. The Trust has similarly not issued any stock options to any NEO or Trustee. Perquisites and personal benefits are not a significant element of compensation of the NEOs. The two principal elements of NEO compensation are described below.

Base Salaries. Base salaries are intended to provide an appropriate level of fixed compensation that will assist in retention and recruitment. Base salaries are determined on an individual basis, taking into consideration the past, current and potential contribution to the success of the Trust, the position and responsibilities of the NEOs and competitive industry pay practices for other real estate funds, real estate investment trusts and corporations of comparable size. The Managers do not benchmark compensation to a specific peer group. Increases in base salary are at the sole discretion of the Managers. The Trustees may review the compensation payable to its officers by the Managers and provide recommendations to the Managers, which are considered in good faith by the Managers, but are not binding upon the Managers.

Annual Cash Bonuses. Annual cash bonuses are discretionary and are not awarded pursuant to a formal incentive plan. Annual cash bonuses are awarded based on qualitative and quantitative performance standards, and reward performance of the Trust or the NEO individually. The determination of the performance of the Trust may vary from year to year depending on economic conditions and conditions in the real estate industry and may be based on measures such as Unit price performance, the meeting of financial targets against budget, the meeting of acquisition objectives and balance sheet performance. Individual performance factors vary and may include completion of specific projects or transactions and the execution of day-to-day management responsibilities. The Trustees may review the bonuses payable to its officers by the Managers, and provide recommendations to the Managers, which are considered in good faith by the Managers but are not binding upon the Managers.

The following table outlines the compensation information concerning the persons determined to be NEOs of the Trust pursuant to applicable securities laws and the Trustees. All amounts are set out in Canadian dollars.

• 34 -

Name and position	Year	Salary, consulting fee, retainer, or commission	Bonus	Committee or meeting fees	Value of perquisites(3)	Value of all other compensation	Total compensation
Marcus Kurschat, Chairman and Trustee	2021(1) 2022 2023	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil(4) Nil(4) Nil(4)
John Stevenson, Chief Executive Officer	2021(1) 2022 2023	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil(4) Nil(4) Nil(4)
Matthew Collins, Chief Financial Officer	2021(1) 2022 2023	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil(4) Nil(4) Nil(4)
Matthew Mason, General Counsel and Secretary	2021(1) 2022 2023	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil(4) Nil(4) Nil(4)
Dale Williams, Trustee	2021(1) 2022 2023	$7,049(2) $12,500 $12,500	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	$7,049 $12,500 $12,500
Abbas Osman, Trustee	2021(1) 2022 2023	$7,049(2) $12,500 $12,500	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	$7,049 $12,500 $12,500

• (1) The Trust completed its initial public offering on June 8, 2021, and accordingly, information in 2021 is presented for the period from June 8, 2021 to December 31, 2021.

• (2) On an annualized basis, salaries, consulting fees, retainers or commissions paid to the non-executive Trustees for the period ended December 31, 2021 would have been equivalent to $12,500 each.

• (3) None of the NEOs or the Trustees are entitled to perquisites, which, in the aggregate, are more than C$15,000.

• (4) Marcus Kurschat is not compensated by the Trust for serving as a Trustee and is not compensated by the Managers for providing services as an executive officer or as a Trustee of the Trust.

• (5) John Stevenson, Matthew Collins and Matthew Mason are each employed by the Managers. Each such NEO receives compensation from the Manager for services provided to the Trust.

FUTURE OUTLOOK

The objective of the Trust is to generate stable cash flows, while maximizing the Trust’s value through active management and value enhancing initiatives such as the fit-out of bulk space into additional storage and the development of new self-storage and mixed-use facilities. The UK Manager estimates that there is an opportunity to increase the NOI over the short to medium term by raising market rental rates after improving the properties, fitting out additional storage space, and by reducing operating expenses through more prudent management controls.

The Trust has fully deployed proceeds from the IPO. In addition, the Trust intends to carry out the following development and redevelopment activities with respect to the Properties:

• The Trust intends to continue to focus on increasing rental rates and occupancy at the Huntingdon Property through 2023.

• The Trust intends to complete the remaining fit-out of the warehouse at the Brentwood Property in order to develop an 80,000 square foot gross lettable area self-storage facility with 53,000 net rentable square feet of purpose built, self-storage units across three floors and continue to lease up the recently completed available space.

• The Trust intends to continue the lease up of the Newmarket Property while focusing on occupancy, rental rates, and community outreach in order to stabilize the asset.

• The Trust intends to finalize redevelopment plans of the Houghton Regis Property in order to establish a brand new 35,000 net rentable square feet of Class-A self-storage space. Total build out and conversion is

• 35 -

expected to be completed in 2024, with the first phase conversion of the existing building to be completed in April 2024 when the newly created self-storage units will be available.

SUBSEQUENT EVENTS

Distributions to Unitholders

The Trust declared a distribution on January 15, 2024 (the “ January 2024 Distribution ”). The distribution for each class was as follows:

• C$0.15065 per Class A Unit

• C$0.15544 per Class F Unit

• £0.15267 per Class U Unit

The January 2024 Distribution constituted a return of capital. The Trust decided to declare the January 2024 Distribution using its own capital in order to satisfy the Trust’s investment objectives and ensure the Trust is able to achieve its targeted annual pre-tax distribution yield as set out in the Prospectus. The use of Invested Capital to satisfy distributions is consistent with the Trust’s expectations that distributions will include a return of capital for the first three years of operations. The Trust anticipates that upon stabilization of operations in year three, cash flows provided by the Trust’s operating activities will thereafter be sufficient to cover its distribution requirements. See “Risks & Uncertainties” in this MD&A.

• 36 -

Schedule “A”

Audit Committee Charter

(see attached)

• 37 -

Padlock Partners UK Fund II (the “Trust”)

1. Mandate

The primary function of the audit committee (the “ Committee ”) is to assist the Trust in fulfilling its responsibilities of oversight and supervision of its accounting and financial reporting practices and procedures, the adequacy of internal accounting controls and procedures, and the quality and integrity of its financial statements.

The Committee’s primary duties and responsibilities are to:

• (a) serve as an objective party to monitor the Trust’s financial reporting and internal control system and review the Trust’s financial statements;

• (b) review the performance of the Trust’s external auditors; and

• (c) provide an open avenue of communication among the Trust’s auditors, the trustees of the Trust and senior management of Clear Sky Capital Inc., in its capacity as manager of the Trust (the “ Manager ”).

2. Composition

The Committee shall be comprised of three trustees of the Trust as determined by the trustees of the Trust, two of whom shall be free from any relationship that, in the opinion of the trustees, would interfere with the exercise of his or her independent judgment as a member of the Committee.

• (a) At least one member of the Committee shall have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of this Audit Committee Charter, the definition of “financially literate” is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Trust’s financial statements.

• (b) The members of the Committee shall be appointed by the trustees of the Trust. Unless a Chair is elected by the trustees, the members of the Committee may designate a Chair. The Chair shall be responsible for leadership of the Committee, including preparing the agenda, presiding over the meetings and reporting to the trustees.

3. Meetings

The Committee shall meet four times annually, or more frequently as circumstances dictate. If so requested by a member of the Committee, the external auditor shall attend any meeting of the committee held during the term of office of the external auditor.

4. Authority

The Committee is granted the authority to investigate any matter brought to its attention, with full access to all books, records, facilities and personnel of the Trust. The Committee has the power to engage and determine funding for outside counsel or other experts or advisors as the Committee deems necessary for these purposes and as otherwise necessary or appropriate to carry out its duties.

• 38 -

5. Duties and Responsibilities

The Committee shall:

• (a) Documents/Reports Review

• (1) Review the Trust’s financial statements, management’s discussion and analysis of financial results (“ MD&A ”) and any financial press releases before the Trust publicly discloses this information and report on such review to the trustees.

• (2) Review and assess the adequacy of procedures in place for the review of the Trust’s public disclosure of financial information extracted or derived from the Trust’s financial statements, other than the Trust’s financial statements, MD&A and financial press releases.

• (b) External Auditor

• (1) Oversee the work of the external auditor for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Trust, including reviewing with management of the Manager and the external auditor the overall scope and plans for the audit.

• (2) Review annually the performance of the external auditors, who shall be ultimately accountable to the trustees of the Trust and the Committee as representatives of the unitholders of the Trust.

• (3) Recommend to the trustees of the Trust the selection and compensation and, where applicable, the replacement of the external auditor nominated for the purpose of preparing or issuing an auditor’s report or performing other audit review services for the Trust.

• (4) Consult with the external auditor, without the presence of management of the Manager about the quality of the Trust’s accounting principles, internal controls and the completeness and accuracy of the Trust’s financial statements.

• (5) Review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Trust’s external auditors.

• (c) Financial Reporting Processes

• (1) In consultation with the external auditor, review with management of the Manager the integrity of the Trust’s accounting and financial reporting practices and procedures, both internal and external, and approve, if appropriate, changes to the Trust’s auditing and accounting practices.

• (2) Review and assist with the resolution of any significant disagreement among management of the Manager and the external auditor in connection with the preparation of the financial statements.

• (3) Establish procedures for (A) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters; and (B) the confidential anonymous submission by the Manager’s employees of concerns regarding questionable accounting or auditing matters.

• (d) Risk Management

• (1) Be aware of the risks of the business and ensure management of the Manager has adequate processes in place to monitor, manage and mitigate these risks as they arise.

• 39 -

6. Other

The Committee shall review any related-party transactions not in the ordinary course of business in the absence of a special committee of the board of trustees designated for such purpose.

• 40 -