THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to what action you should take, you should immediately seek your own financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser, who is authorised under the Financial Services and Markets Act 2000 ("FSMA") if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

If you sell or have sold or otherwise transferred all of your Existing Ordinary Shares, please send this document, together with the Form of Proxy, to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee except that such documents should not be sent to any jurisdiction where to do so might constitute a violation of the registration or any other local securities laws or regulations. If you have sold or transferred part of your holding of Existing Ordinary Shares, you should retain this document and consult with the bank, stockbroker or other agent through whom the sale or transfer was effected, as to the action you should take. However, the distribution of this document and/or any accompanying documents into a jurisdiction other than the UK may be restricted by law or regulation and therefore such documents should not be distributed, forwarded to or transmitted in or into the United States, any member state of the European Economic Area (other than the United Kingdom), Australia, Canada, Japan, New Zealand or South Africa (save to the extent this document is distributed to Shareholders in South Africa in order to provide the notice of General Meeting) or any other jurisdiction where to do so might constitute a violation of local securities laws or regulations.

Capital & Regional PLC

(incorporated in England & Wales with registered number 01399411)

Recommended partial offer by Growthpoint Properties Limited to the Shareholders to acquire 219,786,924 Existing Ordinary Shares, each at an Offer Price of 33 pence per share representing approximately 30.2 per cent. of the entire issued ordinary share capital of Capital & Regional plc

and

Proposed cash subscription by Growthpoint Properties Limited for 311,451,258 new Ordinary Shares, each at an Issue Price of 25 pence per share representing 30.0 per cent. of the enlarged issued ordinary share capital of Capital & Regional plc

and

Waiver of obligations under Rule 9 of the Takeover Code

and

Notice of General Meeting

Numis Securities Limited J.P. Morgan Cazenove Java Capital

Sponsor and Joint Financial Adviser Joint Financial Adviser JSE Sponsor

The whole of this document (in particular the section headed "Risk Factors" set out on pages 12 to 22 of this document) should be read together with the documents incorporated by reference in their entirety. Recipients of this document should review the risk factors set out on pages 12 to 22 of this document for a discussion of certain factors that should be considered when deciding on what action to take in relation to the Proposed Transaction. In making a decision, each shareholder must rely on its own examination, analysis and enquiry of the Company and the terms of the Proposed Transaction, including the merits and risks involved.

This document, which comprises: (a) a circular prepared in compliance with the Listing Rules of the Financial Conduct Authority (the "FCA") for the purposes of the General Meeting convened pursuant to the Notice of General Meeting contained in this document; and (b) a prospectus relating to the Share Subscription prepared in accordance with the Prospectus Regulation and the Prospectus Regulation Rules made under Section 84 of FSMA and made available to the public in accordance with section 85 of FSMA and Rule 3.2 of the Prospectus Regulation Rules. This document has been approved by and filed with the FCA in accordance with the Prospectus Regulation Rules.

This document has been approved by the FCA of 12 Endeavour Square, London, E20 1JN, as the competent authority under the Prospectus Regulation. The FCA only approves this document as meeting the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval shall not be considered as an endorsement of the Company or the quality of the securities that are the subject of this document. Investors should make their own assessment as to the suitability of investing in securities.

The Company and each of the Directors and the Proposed Directors, whose names appear on page 30 of this document, accept responsibility for the information contained in this document. To the best of the knowledge of the Company, the Directors and the Proposed Directors the information contained in this document is in accordance with the facts and the document makes no omission likely to affect its import.

The Existing Ordinary Shares are admitted to (a) the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange's main market for listed securities and (b) listing and trading on the Main Board of the JSE. Application will be made to (a) the FCA and to the London Stock Exchange for the New Shares to be admitted to the premium segment of the Official List of the FCA and to trading on the main market for listed securities of the London Stock Exchange, respectively and (b) the JSE for the New Shares to be listed and traded on the Main Board of the JSE. It is anticipated that Admission will become effective and that dealings in the New Shares, will commence on the Main Market at 8.00 a.m. (London time) on 9 December 2019 and on the Main Board of the JSE at 9.00 a.m. (South African time) on 9 December 2019, (assuming, inter alia, the Partial Offer has become unconditional as to acceptances). No application is currently intended to be made for the Existing Ordinary Shares or the New Shares to be admitted to listing or dealing on any other exchange.

The attention of Overseas Shareholders and other recipients of this document who are residents or citizens of territories other than the United Kingdom (including, without limitation, a nominee or trustee who has a contractual or legal obligation to forward this document or any other document if and when received, to a jurisdiction outside the United Kingdom) is drawn to pages 24 and 50 of this document.

Notice to Overseas Shareholders

The release, publication or distribution of this document in jurisdictions other than the United Kingdom may be restricted by laws and/or regulations of those jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote at the General Meeting may be affected by the laws of the relevant jurisdictions in which they are located. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and should observe, any applicable requirements. Any failure to comply with these requirements may constitute a violation of the securities laws of any such jurisdiction. Unless otherwise determined by Capital & Regional or required by the Takeover Code, and permitted by applicable law and regulation, the Share Subscription will not be implemented and documentation relating to the Share Subscription shall not be made available, directly or indirectly, in, into or from an Excluded Territory where to do so would violate the laws of that jurisdiction and no person may vote in favour of the Resolutions by any use, means, instrumentality or form within an Excluded Territory or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this document are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Excluded Territory and persons with access to this document and any documents relating to the Share Subscription (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Excluded Territory.

The availability of New Shares under the Share Subscription to Growthpoint who is not resident in the UK may be affected by the laws of the relevant jurisdictions in which it is resident. This document has been prepared for the purpose of complying with English law and applicable regulations and the information disclosed may not be the same as that which would have been disclosed if this document had been prepared in accordance with the laws of jurisdictions outside of England.

This document does not constitute an offer to sell or issue or the solicitation of an offer to buy, acquire or subscribe for shares in the capital of Capital & Regional in any Excluded Territory or to any person to whom it is unlawful to make such offer or solicitation. None of the securities referred to in this document shall be sold, issued or transferred in any jurisdiction in contravention of applicable law and/or regulation.

It is the responsibility of each person into whose possession this document comes to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdiction in connection with the distribution of this document, the receipt of the New Shares and the implementation of the Share Subscription and to obtain any governmental, exchange control or other consents which may be required, comply with other formalities which are required to be observed and pay any issue, transfer or other taxes due in such jurisdiction. To the fullest extent permitted by applicable law, Capital & Regional, the Directors, the Proposed Directors, the Group, Numis (as defined below) and JPMC (as defined below) and all other persons involved in the Share Subscription disclaim any responsibility or liability for the failure to satisfy any such laws, regulations or requirements by any person.

Further details relevant for Growthpoint and the Shareholders in overseas jurisdictions are contained in the Offer Document.

Notice to Overseas Shareholders in the United States

Subject to certain limited exceptions at the discretion of the Company, this document is not being sent to Shareholders with addresses in the United States The New Shares have not been, and will not be, registered under the US Securities Act or under any securities laws of any state or other jurisdiction of the United States. The New Shares may not be offered, directly or indirectly, into or within the United States, except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offering of the New Shares in the United States.

No representation has been, or will be, made by the Company, Numis (as defined below) or JPMC (as defined below) as to the availability of Rule 144 under the US Securities Act or any other exemption under the US Securities Act or any state securities laws for the reoffer, pledge or transfer of the New Shares.

Any person in the United States who obtains a copy of this document and who is not a QIB is required to disregard it.

None of the securities referred to in this document have been approved or disapproved by the US Securities and Exchange Commission (the "SEC"), any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of this document. Any representation to the contrary is a criminal offence in the United States.

The financial information included in this document has been prepared in accordance with International Financial Reporting Standards ("IFRS"). Generally accepted accounting principles in the United States ("US GAAP") differ in certain significant respects from IFRS. None of the financial information in this document has been audited in accordance with auditing standards generally accepted in the United States or the auditing standards of the Public Company Accounting Oversight Board (United States).

This document is being furnished by the Company in connection with an offering exempt from the registration requirements of the US Securities Act. The information contained in this document has been provided by the Company and other sources identified herein. Any reproduction or distribution of this document in whole or in part, in the United States and any disclosure of its contents or use of any information herein in the United States for any purpose, other than in considering an investment by the recipient in the New Shares offered hereby, is prohibited. Each prospective investor in the New Shares, by accepting delivery of this document agrees to the foregoing.

Numis Securities Limited ("Numis"), which is regulated in the United Kingdom by the FCA, is acting as sponsor and joint financial adviser in relation to the Share Subscription exclusively for the Company and no-one else in connection with the matters referred to in this document, and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Numis nor for providing advice to any other person in relation to the matters referred to in this document.

J.P. Morgan Securities plc ("JPMC"), which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Prudential Regulation Authority and the FCA, is acting as joint financial adviser in relation to the Share Subscription exclusively for the Company and no one else in connection with the matters referred to in this document, and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, for the contents of this document or for providing any advice in relation to this document.

Java Capital Proprietary Limited ("Java") is acting as JSE sponsor and broker in relation to the Share Subscription solely for the Company in relation to matters referred to in this document and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Java, nor for providing advice in relation to the Share Subscription.

Apart from the responsibilities and liabilities, if any, which may be imposed by the FCA, FSMA or the Main Board of the JSE or the regulatory regime established thereunder, none of Numis, JPMC or Java, or any person affiliated with them, accept any responsibility whatsoever and make no representation or warranty, express or implied, in respect of the contents of this document including its accuracy or completeness or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Company or any matter described in this document and nothing in this document is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. None of Numis, JPMC or Java have approved the contents of, or any part of, this document and no liability whatsoever is accepted by Numis, JPMC or Java for the accuracy of any information or opinions contained in this document and accordingly, each of Numis, JPMC and Java and their respective affiliates disclaim, to the fullest extent permitted by law, all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have to any person, other than the Company, in respect of this document or any such statement.

Notice of a General Meeting of the Company to be held at 110 Rochester Row, Westminster, London SW1P 1JQ at 9.00 a.m. (London time) on 26 November 2019 is set out at the end of this document. The Form of Proxy for use at the General Meeting accompanies this document and, to be valid, should be completed and returned in accordance with the instructions set out thereon as soon as possible but, in any event, so as to reach the Company's Registrars, Equiniti, not later than 9.00 a.m. on 22 November 2019. Completion and posting of the Form of Proxy does not prevent a Shareholder from attending and voting in person at the General Meeting.

This document is available on the Company's website at https://capreg.com/. This documents will only be provided in hard copy on request. Such requests should be made by either writing to the Company Secretary at 22 Chapter Street, London SW1P 4NP or contacting the Company Secretary by telephoning +44 (0)207 932 8000.

Date of this document The date of this document is 7 November 2019.

	Summary	5
	Risk Factors	12
	Important Information	23
	Share Subscription	27
	Expected Timetable of Principal Events	28
	Directors, Proposed Directors, Company Secretary, Registered Office and Advisers	30
Part 1	Letter from the Chairman	32
Part 2	Information on Capital & Regional	52
Part 3	Operating and Financial Review	63
Part 4	Historical Financial Information on Capital & Regional	80
Part 5	Property Valuation Reports	81
Part 6	Unaudited Pro Forma Financial Information of the Group	117
Part 7	Taxation	121
Part 8	Additional Information	127
Part 9	Documentation Incorporated by Reference	171
Part 10	Definitions	174
Part 11	Notice of General Meeting	183

SUMMARY

1. INTRODUCTION, CONTAINING WARNINGS

This summary should be read as an introduction to this document. Any decision to invest in the securities should be based on consideration of this document as a whole. An investor could lose all or part of their invested capital. Where a claim relating to the information contained in this document is brought before a court, the plaintiff investor might, under the national legislation of the member states of the European Union, have to bear the costs of translating this document before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this document or it does not provide, when read together with the other parts of this document, key information in order to aid investors when considering whether to invest in such securities.

The securities which Capital & Regional intends to issue are ordinary shares of the company of £0.01 each ("Ordinary Shares"), whose ISIN is GB0001741544. The Company's LEI is 21380097W74N9OYF5Z25.

Capital & Regional PLC (the "Company"), can be contacted by writing to its registered office, 22 Chapter Street, London, SW1P 4NP or by calling, within business hours, +44 (0)207 932 8000.

This document was approved on 7 November 2019 by the FCA of 12 Endeavour Square, London, E20 1JN. Contact information relating to the FCA can be found at https://www.fca.org.uk/contact.

2. KEY INFORMATION ON THE ISSUER

2.1 Who is the issuer of the securities?

Capital & Regional PLC, is a public limited company limited by shares incorporated in England and Wales under the Companies Act 1985 and is domiciled in the United Kingdom. The Company's LEI is 21380097W74N9OYF5Z25.

The Company is a UK focused retail property REIT specialising in shopping centres that serve the non-discretionary and value-orientated needs of their local communities, across a portfolio comprising seven properties with a total portfolio value of approximately £764.4 million as at 30 September 2019. The principal activity of the Company is the generation of rental income and capital growth from its role as a property owner, operator and asset manager.

As at the close of business on 6 November 2019 (being the latest practicable date before publication of this document), the following parties were known to be the Company's major shareholders:

Number of Ordinary Shares following Admission**	Percentage of issued ordinary share capital following Admission**
	4.70
45,682,651	4.40
41,219,776	3.97
37,088,823	3.57
32,134,423	3.09
26,020,803	2.50
24,628,069	2.37
19,563,018	1.88
19,309,396	1.86
15,401,623	1.48
Number of Existing Ordinary Shares 69,978,847 65,462,806 59,067,548 53,147,931 46,048,324 37,287,564 35,291,790 28,033,620 27,670,181 22,070,380	Percentage of existing issued ordinary share capital 9.62 48,834,132 9.00 8.12 7.31 6.33 5.13 4.85 3.85 3.80 3.03

* these entities are beneficially owned by Louis Norval, a Non-Executive Director of the Company.

** assuming the Shareholders listed above each sell 30.2 per cent. of their Existing Ordinary Shares under the Partial Offer.

The Company maintains a primary listing on the London Stock Exchange ("LSE") and a secondary listing on the Johannesburg Stock Exchange ("JSE") in South Africa.

The Company's board of directors ("Board") is comprised of:

Hugh Scott-Barrett (Chairman, Non-Executive Director); Lawrence Hutchings (Chief Executive Officer); Stuart Wetherly (Group Finance Director); Tony Hales (Non-Executive Director); Wessel Hamman (Non-Executive Director); Ian Krieger (Non-Executive Director); Louis Norval (Non-Executive Director); and Laura Whyte (Non-Executive Director).

As part of the proposed transaction with Growthpoint Properties Limited ("Growthpoint"), it is proposed that Norbert Sasse and George Muchanya will be appointed to the Board and Wessel Hamman will stand down.

The auditor of the Company for the financial year ended 30 December 2018 was Deloitte LLP of 1 New Street Square, London, EC3A 3HQ.

2.2 What is the key financial information regarding the issuer? KEY HISTORICAL FINANCIAL INFORMATION

2.2.1 The selected historical financial information set out below, which has been prepared under IFRS, has been extracted without material adjustment from the audited financial statements of the Company for the three financial periods ended 30 December 2016, 2017 and 2018 and from the unaudited financial statements for the Company for the six-month periods ended 30 June 2018 and 2019:

INCOME STATEMENT

Total revenue	Year to 30 December 2018 (£m) 91.0	Year to 30 December 2017 (£m) 89.2	Year to 30 December 2016 (£m) 87.2	Interim 30 June 2019 (£m) 45.2	Comparative Interim 30 June 2018 (£m) 45.5
Operating profit/loss or another similar measure of financial performance used by the issuer in the financial statements1	30.5	29.1	26.8	14.8	15.5
Net profit or loss (for consolidated financial statements net profit or loss attributable to equity holders of the parent)	–25.6	22.4	–4.4	–55.4	6.7
Year on year revenue growth Operating profit margin1 Net profit margin Earnings per share2	2.0% 34% –28% 4.23p	2.3% 33% 25% 4.10p	8.1% 31% –5% 3.82p	–0.7% 33% –123% 2.04p	3.6% 34% 15% 2.15p

1 Adjusted Profit as per the financial statements

2 Adjusted Earnings per Share as per the financial statements

BALANCE SHEET

	Year to 30 December 2018 (£m)	Year to 30 December 2017 (£m)	Year to 30 December 2016 (£m)	Interim 30 June 2019 (£m)
Total assets	966.8	1,007.9	945.9	908.3
Total equity	433.0	481.4	477.6	373.7
Net financial debt (long-term debt plus
short-term debt minus cash)	411.1	404.0	398.11	413.1

¹ December 2016 comparative figures in this section are adjusted for the refinancing of Mall assets completed on 4 January 2017, Ipswich disposal completed on 17 February 2017 and Ilford acquisition completed on 8 March 2017.

CASH FLOW

	Year to 30 December 2018 (£m)	Year to 30 December 2017 (£m)	Interim 30 June 2019 (£m)	Comparative Interim 30 June 2018 (£m)
Relevant net Cash flows from operating activities	33.1	33.7	11.2	14.6
Relevant net Cash flows from investing activities	(17.6)	(86.7)	(7.4)	(7.4)
Relevant net Cash flows from financing activities	(13.7)	34.1	(5.6)	(11.7)
Cash and cash equivalents	32.0	30.2	30.2	25.7

PRO FORMA FINANCIAL INFORMATION

2.2.2 The pro forma financial information presented below has been prepared to illustrate the effect on the consolidated net assets of the Group as if the Share Subscription had taken place on 30 June 2019.

2.2.3 The unaudited pro forma financial information has been prepared for illustrative purposes and, because of its nature, addresses a hypothetical situation and, therefore, does not represent the Group's actual position and results.

UNAUDITED PRO FORMA STATEMENT OF NET ASSETS

	Consolidated net assets of the Group at	Share Subscription – Proceeds, net	Pro forma consolidated net assets at
	30 June 2019 Note 1	of expenses Note 2	30 June 2019 Note 3
	£'m	£'m	£'m
Non current assets
Investment properties	840.4	–	840.4
Plant and equipment	1.9	–	1.9
Fixed asset investments Receivables	2.0 15.3	– –	2.0 15.3
	—–———	—–———	—–———
Total non-current assets	859.6	–	859.6
Current assets	—–———	—–———	—–———
Receivables	18.5	–	18.5
Cash and cash equivalents	30.2	72.6	102.8
Total current assets	—–——— 48.7	—–——— 72.6	—–——— 121.3
Total assets	—–——— 908.3	—–——— 72.6	—–——— 980.9
Current liabilities	—–———	—–———	—–———
Trade and other payables	(34.3)	–	(34.3)
Total current liabilities	—–——— (34.3)	—–——— –	—–——— (34.3)
Net current assets	—–——— 14.4	—–——— –	—–——— 87.0
Non current liabilities	—–———	—–———	—–———
Bank loans	(433.3)	–	(433.3)
Other payables	(5.5)	–	(5.5)
Obligations under finance leases	(61.5)	–	(61.5)
Total non-current liabilities	—–——— (500.3)	—–——— –	—–——— (500.3)
Total liabilities	—–——— (534.6)	—–——— –	—–——— (534.6)
Net assets	—–——— 373.7 —–———	—–——— 72.6 —–———	—–——— 446.3 —–———

Notes:
(1) The net assets of the Group as at 30 June 2019 have been extracted without material adjustment from the unaudited consolidated financial statements of the Group for the period ended 30 June 2019, as incorporated by reference in Part 9 of this document.
(2) Adjustment to reflect the net proceeds from the Share Subscription receivable by the Company of £72.6 million (being gross proceeds of £77.9 million less estimated fees relating to the Transaction of £5.3 million).
(3) The unaudited pro forma financial information does not take into account the financial or trading performance of the Group subsequent to the interim balance sheet date of 30 June 2019 or of any other event, save as disclosed above.

2.3 What are the key risks that are specific to the issuer?

The attention of Shareholders is drawn to the risks associated with an investment in the Company which, in particular, include the following:

2.3.1 The Company has relatively high levels of indebtedness and recent declines in property valuations have increased the Company's loan to value ratios

Structural change in retailing is creating uncertainty in the retail property market which has led to declines in property valuations. As the Company's debt facilities contain loan to value covenants this has placed pressure on the Company's ability to continue investment in capital expenditure which enables the company to better respond to the structural changes affecting physical retailing and shopping centres whilst maintaining the minimum level of dividends required to be paid under the UK REIT regime. Without the injection of new equity there is a risk that the property valuations continue to decline further then greater constraints will be imposed on the business such that it may be necessary to take actions to address short term leverage levels which may adversely impact the prospects of the Company in the longer term. Such actions include postponing or cancelling the Company's dividend and/or reducing capital expenditure investment which in turn may adversely affect the Group's business, financial condition, results of operations and prospects.

2.3.2 The Company's current strategy is focused on repositioning its existing assets; such a strategy requires significant capital expenditure

Capital expenditure is required to perform landlord works to repurpose units, to improve customer amenities and facilities to drive footfall and therefore letting interest and to support leasing transactions to new customers. If the Company is in a position where capital expenditure is significantly restricted this could inhibit leasing activity leading to weaker letting demand and higher void and vacancy costs. There is a risk that these could increase further as higher vacancies would likely drive lower footfall further reducing the attractiveness of centres to new tenants to take space and existing tenants to renew leases on economic terms which may adversely affect the Group's business, financial condition, results of operations and prospects.

2.3.3 Weakening economic conditions and poor sentiment in commercial real estate markets could lead to low investor demand and an adverse movement in the valuation of the Group's portfolio

The Group operates in the UK retail real estate sector. During periods of difficult market conditions or slowdown the Group's property values can experience significant declines or increased volatility in valuations. Small changes in property market yields can have a significant effect on the value of the properties owned by the Group. The effect of debt funding magnifies the impact of valuation movements. Any significant deterioration in economic conditions or conditions in the commercial real estate market which contributes to a decline in rental revenues or decline in market values of the assets of the Group may adversely affect the Group's business, financial condition, results of operations and prospects.

2.3.4 The trend towards online shopping and multi-channel retailing may adversely impact consumer footfall in shopping centres

Retail tenants face increasing competition from the internet and trade diversion from traditional retail outlets to the internet could adversely affect certain of the tenants of the Group, increasing the risk of tenant defaults and potentially reducing the demand for retail space. This could result in higher vacancy rates, lower rental income, and revaluation losses on the value of the investment properties of the Group, or otherwise have an adverse effect on the Group's business, financial condition, results of operations and prospects.

2.3.5 Prolonged downturn in tenant demand and resulting pressure on rent levels, occupancy and renewals

2.3.6 Threat of company voluntary arrangement and administrations amongst the retail industry

Market conditions in the UK retail sector continue to be challenging. Tenant restructuring, in the form of company voluntary arrangements ("CVA") and administrations, have the effect of reducing the Company's rental income. In the context of CVAs in particular, landlords are usually the most compromised creditor group as cost reduction plans invariably include rent cuts and store closures determined by unit profitability. Examples of CVAs or administrations impacting the Company recently include Debenhams, Arcadia, Monsoon/Accessorize and Select. In total CVAs and Administrations in 2018 and 2019 have impacted net rental income by more than £4 million. Such CVAs and administrations could result in higher vacancy rates, lower rental income, and revaluation losses on the value of the investment properties of the Group, or otherwise have an adverse effect on the Group's business, financial condition, results of operations and prospects.

2.3.7 Illiquid nature of assets

The properties owned by the Group are relatively illiquid, as there may not be buyers willing to pay fair value at the time the Group decides to sell any such properties. If the Group were required to sell any of its respective properties for any reason, it may not be able to sell any of those properties on favourable terms, or at all. There may be a significant shortfall between the carrying value of a property on the balance sheet and the price that the Group would be able to achieve on an accelerated sale of such property. This could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

3. KEY INFORMATION ON THE SECURITIES

3.1 What are the main features of the securities?

3.1.1 Ordinary Shares

The securities which the Company intends to issue are ordinary shares of the Company of £0.01 each, whose ISIN is GB0001741544. The Company's LEI is 21380097W74N9OYF5Z25.

As at the close of business on 6 November 2019, the latest practicable date before the publication of this Prospectus, the Company had 727,389,117 fully paid Ordinary Shares in issue (the "Existing Ordinary Shares"). The Company has no partly paid Ordinary Shares in issue.

3.1.2 The rights attaching to the Ordinary Shares

The Ordinary Shares have the following rights

(a) Dividend rights: all Ordinary Shares are entitled to participate in dividends which the Company declares from time to time proportionate to the amounts paid or credited as paid on such Ordinary Shares;
(b) Rights as respect to capital: all Ordinary Shares are entitled to a distribution of capital in the same proportions as capital is attributable to them (including on a winding up). In the event of insolvency, the Shareholders will be entitled to a share in the capital of the Company in the same proportions as capital is attributable to them, only after the Company has settled all amounts owed to its creditors; and
(c) Voting rights: every Shareholder shall have one vote for each Ordinary Share held by it.

3.1.3 Restrictions on free transferability of Ordinary Shares

The Ordinary Shares are freely transferable and there are no restrictions on transfer in the UK.

3.1.4 Dividend Policy

The Company intends to adopt a policy from Admission of distributing on a semi-annual basis (in the approximate proportions of 45 / 55 and in that order in respect of each financial year) not less than approximately 90 per cent. of the Company's EPRA earnings. The Board, conditional on completion of the Proposed Transaction, intends to pay an interim dividend of 1p per Existing Ordinary Share to Shareholders in relation to the half-year ended 30 June 2019. This dividend will only be paid as per the timetable set out on page 45 of this document if the Proposed Transaction completes in accordance with the indicative timetable set out in this document.

3.2 Where will the securities be traded?

Application will be made to (a) the FCA and to the London Stock Exchange for the New Shares to be admitted to the premium segment of the Official List of the FCA and to trading on the main market for listed securities of the London Stock Exchange, respectively ("UK Admission") and (b) the JSE for the New Shares to be listed and traded on the Main Board of the JSE ("SA Admission" together with UK Admission, "Admission").

3.3 What are the key risks that are specific to the securities?

3.3.1 The market price of Ordinary Shares could be volatile and subject to fluctuations

The value of an investment in the Company may go down as well as up. The market price of Ordinary Shares could be volatile and subject to fluctuations due to a variety of factors relating to the Group. Furthermore, stock markets may experience significant price and volume fluctuations which affect the market prices for securities, including the Ordinary Shares, and which may be unrelated to the Group's operating performance or prospects. Furthermore, the Group's operating results and prospects from time to time may be below the expectations of market analysts and investors.

3.3.2 Controlling Shareholder

Following completion of the Partial Offer and Share Subscription, Growthpoint (or its Nominee(s) (as defined below)) will own approximately 51.1 per cent. of the issued ordinary share capital of the Company. Such a shareholding will afford Growthpoint the ability to exert substantial influence over the Group and Growthpoint's interests may differ from or conflict with those of other shareholders. Growthpoint will possess sufficient voting power to have an influence on all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. Additionally, any significant change in Growthpoint's shareholding may result in changes in the Group's business strategy, focus or practices, which may in turn adversely affect the Group. The market price of the Ordinary Shares may decline if Growthpoint uses its influence over the Company's voting capital in ways that are or may be adverse to the interests of other shareholders.

4. KEY INFORMATION ON THE OFFER OF SECURITIES TO THE PUBLIC AND/OR THE ADMISSION TO TRADING ON A REGULATED MARKET

4.1 Under which conditions and timetable can I invest in this security?

There is no public offer of Ordinary Shares being made.

The New Shares will be issued to Growthpoint and admitted to: (i) trading on the premium listing segment of the Official List of the FCA and to trading on the London Stock Exchange's main market for listed securities; and (ii) listing and trading on the Main Board of the Johannesburg Stock Exchange.

4.1.1 Conditions of the Share Subscription

On 17 October 2019 the Company and Growthpoint announced that they had reached agreement on the terms of a recommended partial offer to be made by Growthpoint, (or its Nominee(s)) to acquire 219,786,924 Existing Ordinary Shares, representing approximately 30.2 per cent. of the issued ordinary share capital of the Company (the "Partial Offer"). In addition, Capital & Regional and Growthpoint agreed the terms on which Growthpoint (or its Nominee(s)) shall make a subscription for 311,451,258 new ordinary shares ("New Shares") at a price of 25 pence per share representing approximately 30.0 per cent. of the enlarged issued ordinary share capital of Capital & Regional following completion of the Share Subscription and the Partial Offer.

The Share Subscription is, conditional on:

(i) the following resolutions (the "Resolutions") being passed by the Shareholders at the general meeting to be held at 9.00 a.m. on 26 November 2019:
l the ordinary resolution to approve the authority to allot the New Shares;
l the special resolution to disapply statutory pre-emption rights in respect of the New Shares;
l the resolution to approve the Partial Offer and waive any obligation on Growthpoint which may arise under Rule 9 of the City Code on Takeovers and Mergers as a result of the Partial Offer and Share Subscription; and
(ii) the Partial Offer becoming or being declared unconditional in all respects (save as to UK Admission).

4.1.2 Expected Timetable

Announcement of the Partial Offer	17 October 2019
Publication and posting of this document and Form of Proxy	7 November 2019
Latest date/time for receipt of Form of Proxy (48 hours (not including any part of a day that is not a Business Day) before the General Meeting)	22 November 2019
General Meeting	26 November 2019
UK Admission of and commencement of dealings in New Shares	8.00 a.m. (London time) 9 December 2019
South African Admission of and commencement of dealings in New Shares	9.00 a.m. (South African time) on 9 December 2019
New Shares issued and credited to Growthpoint (or one or more Nominees) CREST account	on or soon after 8.00 a.m. on 9 December 2019

4.1.3 Admission

It is expected that Admission will become effective and that dealings in the New Shares will commence on the Main Market at 8.00 a.m. (London time) on 9 December 2019 and on the Main Board of the JSE at 9.00 a.m. (South African time) on 9 December 2019 (assuming, inter alia, the Partial Offer has become unconditional as to acceptances on the First Closing Date).

4.1.4 Dilution

Upon completion of the Share Subscription, Shareholders will suffer an immediate dilution of approximately 15.1 per cent., based on the rolled forward NAV per share of 47 pence as at 30 September 2019. On the same basis, upon completion of the Share Subscription and the Partial Offer, Shareholders will suffer an immediate total dilution as a result of the Share Subscription and Partial Offer of approximately 18.8 per cent. (assuming that Shareholder participate pro-rata in the Partial Offer). If the Share Subscription becomes effective (which is conditional on the Partial Offer becoming effective and Growthpoint acquiring approximately 30.2 per cent. of the Existing Ordinary Shares from Shareholders), Growthpoint will hold approximately 51.1 per cent. of the Company's enlarged issued ordinary share capital.

4.1.5 Expenses

The total costs and expenses of, and incidental to, the Share Subscription and Partial Offer payable by the Company, are estimated to amount to approximately £5.3 million (excluding VAT). These costs and expenses will be funded from the Share Subscription proceeds.

4.2 Why is this document being produced?

As the New Shares will represent 30.0 per cent. of the enlarged issued ordinary share capital, the Company is required to publish this prospectus in connection with the Share Subscription.

4.2.1 Background to and reason for the Share Subscription, Partial Offer and issue of this document

The structural shift in the retail landscape has continued to accelerate, economic conditions in the UK remain uncertain and high street retail has faced a considerable amount of pressure as a result of the macro-economic backdrop and changes in shopping habits. This has also been the case in the UK shopping centre market which is rapidly evolving with increasing polarisation between 'wants' focused centres anchored by major department stores and 'needs' focused centres anchored with non-retail and leisure tenants. As part of the Company's strategy, a wide variety of capital expenditure programmes have been undertaken across the portfolio to improve the quality and relevance of its shopping centres.

Additionally, there has been significant pressure on the Company's property valuations which is a feature consistent across the UK shopping centre industry. As at 30 September 2019 the Company's property portfolio was valued at £764.4 million compared to £855.2 million as at 30 December 2018 representing a decline of 11 per cent.. The Company is relatively heavily indebted given the capitalintensive nature of asset ownership and capital expenditure programme required to maintain and improve centres through repositioning or remerchandising space. As at 30 June 2019, the Company had net debt of £413.1 million resulting in a net LTV ratio of 52 per cent. (compared to 48 per cent. as at 30 December 2018).

The proposed transaction with Growthpoint provides a long-term strategic partner to support the Company's growth strategy with a significant amount of new equity committed to deleverage and strengthen the balance sheet such that it can commit further to its pipeline of capital expenditure projects with the target of enhancing future rental income and improving the Company's competitive positioning and the long-term relevance of the Group's assets. The Directors believe that this equity injection will allow the Company to prosper despite difficult market conditions with a strengthened financial position that will allow the Group to continue to operate despite any potential future decline in asset valuations or potential CVAs or administration processes within its tenant base.

4.2.2 Use of proceeds and amount of proceeds

The Company will receive gross proceeds of approximately £77.9 million pursuant to the Share Subscription and net proceeds of approximately £72.6 million. Out of these net proceeds, at least £50 million will be used to reduce and/or restructure the Group's existing debt arrangements. The balance of the net proceeds will be used to assist with funding capital expenditure across the portfolio. The Company has a pipeline of potential capital expenditure totalling over £45 million across approximately 10 different projects. These include the potential introduction and/or enhancement of food courts and grab and go dining areas, the refurbishment of currently vacant office space and the repurposing of current major units into leisure, residential or other alternative uses.

4.2.3 Underwriting

The Share Subscription is not being underwritten.

4.2.4 Material conflicts of interest

There are no material conflicts of interest in relation to the Share Subscription.

RISK FACTORS

Any investment in Ordinary Shares involves risk. Prior to investing in Ordinary Shares, an investor should carefully consider the risks associated with any investment in securities and, in particular, all the information in this document, including the risks described below. The risks set out below do not purport to be a complete list or explanation of all the risks involved in investing in the Ordinary Shares or which may adversely affect Capital & Regional's business, but are those which the Directors are aware of and which they consider material. However, additional risks and uncertainties not currently known to the Directors, or that the Directors currently consider immaterial, may also adversely affect the Group's business, results of operations, financial condition and prospects. If any or a combination of the following risks materialise, the Group's business, financial condition and/or operational performance could be materially adversely affected. In that case, the trading price of the Ordinary Shares may decline and investors may lose all or part of the value of their investment.

1. THE SHARE SUBSCRIPTION

1.1 If the Proposed Transaction does complete and the Company does not receive funds from the Share Subscription, the Company will need to take certain short term measures to preserve cash

If the Share Subscription does not complete, the Company would not benefit from the funds raised through the Share Subscription. In such a scenario the Company would need to take various actions in the short term to preserve cash and provide adequate balance sheet flexibility over the medium to longer term given the potential for further declines in property valuations and risk of future tenant CVAs or administrations (all of which have an adverse impact on the Company's financial position and headroom on covenants). This would involve a suspension of the Company's dividend for at least a period of 18 months which is expected to provide adequate headroom against bank facility covenants and working capital whilst investing in capital expenditure. However should market conditions deteriorate further with further declines in property valuations, the Company might be required to undertake additional actions over the medium to longer term to preserve cash and provide additional headroom on its banking covenants such as reducing capital expenditure or disposing of assets. Any of these actions could have a material adverse impact on the Company's financial condition and operating results, and compromise the Company's competitive position and growth prospects.

1.2 Implementation of the Share Subscription is subject to the satisfaction of a number of conditions The Share Subscription is conditional upon, amongst other things: (a) the Shareholders approving the Transaction Resolutions (including the Partial Offer and Rule 9 Waiver Resolution ); and (b) the Partial Offer becoming or being declared unconditional in all respects (save for UK Admission). There can be no assurance that these conditions will be satisfied and that the Share Subscription will be completed. In the event the Proposed Transaction was not approved by Shareholders, the Company would not benefit from the funds raised through the Share Subscription. Without the funds committed under the Share Subscription the Company would need to take various actions in the short term to provide adequate headroom under the Group's debt facilities including postponing or cancelling the dividend and/or reducing capital expenditure investment. Therefore, the consequences of a failure to complete the Share Subscription may have a material adverse effect on the business, results of operations and financial condition of the Group.

There is no guarantee that the conditions will be satisfied in the necessary time frame and the Share Subscription may, therefore, be delayed or not complete. Delay in completing the Share Subscription will prolong the period of uncertainty for the Group and both delay and failure to complete may result in the accrual of additional costs to the Group's businesses. Therefore, the consequences of a material delay in completing the Share Subscription may have a material adverse effect on the business, results of operations and financial condition of the Group.

Growthpoint's ability to invoke certain conditions of the Partial Offer to lapse the Partial Offer is subject to the Panel's consent. The Panel will need to be satisfied that the underlying circumstances are of "material significance" to Growthpoint in the context of the Partial Offer and this is a high threshold to fulfil. If any of the events described above were to occur, they may result in additional costs and/or the delay or the failure (partial or otherwise) to realise the financial benefits relating to the Share Subscription.

1.3 The Share Subscription will result in dilution of holdings of Shareholders

Shareholders will be diluted as a consequence of the Share Subscription. Since the size of the Share Subscription is capped, the Company's issued share capital shall increase by 42.8 per cent.. Upon completion of the Share Subscription, Shareholders will suffer an immediate dilution as a result of the Share Subscription of 30 per cent.. The Share Subscription is conditional on the Partial Offer becoming unconditional in all respects (save as to UK Admission). If the Shareholders participate in the Partial Offer, they will also suffer dilution in line with the percentage of shares tendered pursuant to the Partial Offer. If the Share Subscription becomes effective, Growthpoint will hold approximately 51.1 per cent. of the Company's enlarged share capital.

1.4 The Share Subscription will result in the Company having a controlling shareholder

Following completion of the Partial Offer and Share Subscription, Growthpoint will retain significant interest in, and may continue to exert substantial influence over, the Group and Growthpoint's interests may differ from or conflict with those of other shareholders. Immediately following Admission, Growthpoint (or its Nominee(s)) will continue to own approximately 51.1 per cent. of the issued ordinary share capital of the Company. As a result, Growthpoint will possess sufficient voting power to have an influence on all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions, subject in each case to the terms of the Relationship Agreement. Additionally, as Growthpoint (or its Nominee(s)) will hold Ordinary Shares carrying more than 50 per cent. of the voting rights of the Company, Growthpoint and its concert parties will be free (subject to Rule 36.3 of the Takeover Code) to acquire further Ordinary Shares without incurring any obligation under Rule 9 of the Takeover Code to make a general offer. Although Growthpoint has no plans to sell down its stake in the near term and has, pursuant to the Relationship Agreement, agreed for 9 months following Admission, not to sell or dispose of any Ordinary Shares, any significant change in Growthpoint's shareholding may result in changes in the Group's business strategy, focus or practices, which may in turn adversely affect the Group. The market price of the Ordinary Shares may decline if Growthpoint uses its influence over the Company's voting capital in ways that are or may be adverse to the interests of other shareholders.

1.5 Abort costs in the event the Share Subscription does not proceed

The Company has incurred significant costs in negotiating the terms of the Proposed Transaction. These mainly include legal and professional costs. Approximately £2 million of estimated costs would be incurred if the Proposed Transaction aborted following the publication of this document. To the extent that the Proposed Transaction does not proceed, these costs would need to be borne by the Company.

2. CAPITAL & REGIONAL'S FINANCIAL POSITION

2.1 The Company has relatively high levels of indebtedness and recent declines in property valuations have increased the Company's loan to value ratios. The credit facilities and borrowings of the Group contain various covenants, such as LTV ratios, which, if not complied with, could result in acceleration of the maturity of such facilities or restrict the Company's ability to pay dividends.

Structural change in retailing has led to declines in property valuations which has resulted in the aggregate value of the Company's property portfolio declining from £855.2 million as at 30 December 2018 to £764.4 million as at 30 September 2019. Additionally, as at 30 June 2019, the Group's combined net loan to value ratio was 52 per cent.. The facilities in relation to the Mall Luton, the Exchange Ilford, Marlowes Hemel Hempstead and the Four Mall Assets have various covenant packages with net loan to value ratio limits of currently no greater than between 60 per cent. and 70 per cent. (with the exception of the Marlowes Hemel Hempstead facility which has a two year relaxation and/or waiver of LTV testing from March 2019 and also the Luton facility which has an increased LTV threshold of 80 per cent. until 30 September 2020). As the Company's debt facilities contain loan to value covenants this has placed pressure on the Company's ability to continue investment in capital expenditure which enables the company to better respond to the structural changes affecting physical retailing ad shopping centres whilst maintaining the minimum level of dividends required to be paid under the UK REIT regime. Without the injection of new equity there is a risk that the property valuations continue to decline further then greater constraints will be imposed on the business such that it may be necessary to take actions to address short term leverage levels which may adversely impact the prospects of the Company in the longer term. Such actions include postponing or cancelling the Company's dividend and/or reducing capital expenditure investment which in turn may adversely affect the Group's business, financial condition, results of operations and prospects.

Longer term adverse changes in the value of the commercial real estate assets of the Group could consequently have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

2.2 The Company's current strategy is focused on repositioning its existing assets; such a significant strategy requires capital expenditure

Capital expenditure is required to perform works to remerchandise and reposition shopping centres to take account of the structural changes in physical retailing. Such works include the improvement of customer amenities and facilities with the objective of driving improvements in footfall, retail sales and therefore retailer demand which in turn drives leasing transactions, income retention and ultimately growth. In addition, there is an opportunity in the greater London market to create opportunities for high density residential development, either above or adjoining the Company's assets which are potentially accretive to property values and returns. If the Company is in a position where capital expenditure is significantly restricted this could inhibit leasing activity, leading to weaker letting demand and higher void and vacancy costs. There is a risk that these could increase further, as higher vacancies would likely drive lower footfall, further reducing the attractiveness of centres to new retailers to take space and existing tenants to renew leases on economic terms. This could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

2.3 Weakening economic conditions and poor sentiment in commercial real estate markets could lead to low investor demand and an adverse movement in valuation

The Group invests in the UK retail real estate sector. As a result, during periods of difficult market conditions or slowdown the Group's investments can experience significant declines in returns or increased volatility in valuations. Small changes in property market yields can have a significant effect on the value of the properties owned by the Group. The effect of debt funding magnifies the impact of valuation movements.

In addition to general economic conditions, there are a number of other factors, which may significantly impact the value of commercial real estate investments, including interest rates and credit spreads, levels of prevailing inflation, the availability of financing in the longer term, the returns from alternative investments as compared to real estate and changes in planning, environmental, commercial lease, and tax laws and practices. In particular, commercial property values are dependent on current rental values and occupancy rates, prospective rental growth, lease lengths, tenant creditworthiness and solvency, and investment yields (which are, in turn, a function of interest rates, the market appetite for property investments in general and with reference to the specific property in question) together with the nature, location and physical condition of the property concerned. Rental revenues and commercial real estate values are also affected by factors specific to each local market in which the property is located, including the supply of available space, demand for commercial real estate and competition from other available space. Any declines in UK property valuations could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

As a result of the above or other factors, the ability of the Group to maintain or increase occupancy of it's properties through the execution of leases with new tenants and the renewal of leases with existing tenants, as well as the ability to increase rents over the longer term, may be adversely affected. In particular, non-renewal of existing leases or early termination by significant existing tenants in the properties owned by the Group would result in a significant decrease in the Group's net rental income. If the net rental income of the Group declines, it would have less cash available to service and repay its indebtedness and the value of those properties would decline further as well. In addition, significant expenditures associated with each property, such as real estate taxes, works to comply with new regulations, service charges, renovation and maintenance costs, are generally not reduced in proportion to any decline in rental revenue from that property. If rental revenue from a property declines while the related costs do not decline, the income and cash receipts of the Group could be adversely affected. Any significant deterioration in economic conditions or conditions in the commercial real estate market which contributes to a decline in rental revenues or decline in market values of the assets of the Group may adversely affect the Group's business, financial condition, results of operations and prospects.

2.4 The Group may not be able to refinance its borrowings in the longer term and/or the cost of finance could increase

The Group has a substantial amount of outstanding indebtedness. The ability of the Group to operate their respective businesses depends in part on being able to raise funds.

In the longer term the Group will be required to access debt funding. There can be no assurances that lenders will be found who are willing to lend on similar terms to those which apply to existing financing arrangements, or at all, or that existing financing arrangements will be able to be refinanced on similar terms, or at all, upon maturity. Declines in property values may occur, for example, as a result of prevailing economic conditions stemming from a global economic downturn and/or adverse change in retail economic conditions. An increase in LTV ratio as a result of declines in property values, would be one factor which could restrict the ability of the Group to arrange such financing or refinancing in the longer term.

A reduction in the availability of finance or an increase in the future cost of finance (whether for macroeconomic reasons, such as a lack of liquidity in debt markets or reasons specific to the Group, such as the extent to which it is leveraged and declines in property values), could impact both the ability to progress capital investment opportunities necessary to deliver required rates of return to meet shareholder expectations and the day to day financing (or refinancing) requirements of the Group in the longer term. None of the debt facilities currently held by the Group are due to mature in the 24 months following the date of this document. However, if in the longer term the Group is not able to refinance borrowings as they mature and/or the terms of such refinancing are less favourable than the existing terms of borrowing, this may have a material adverse effect on the business, financial condition, results of operations, future prospects if the Group.

2.5 Property valuation is inherently subjective, uncertain and could be overstated

The current and prospective properties of the Group are valued by external valuers and adopted by management for the purposes of the Group's financial statements and for determining prices in the context of acquisitions and disposals. Valuations of property and property-related assets are inherently subjective, due to the individual nature of each property. As a result, valuations are subject to a degree of uncertainty. This is exacerbated in times like the present where there is a relatively low volume of comparable transactional activity. Moreover, property valuations are made on the basis of assumptions which may not prove to be accurate. Incorrect assumptions or flawed assessments underlying the property valuations could result in asset valuations being overstated or understated, which could negatively affect the financial condition and net assets of the Group and potentially inhibit the ability of the Group to realise a sale price that reflects the stated valuation. Further, if the Group acquires properties based on inaccurate assumptions, the Group's net assets and results of operations may be materially adversely affected. There is no assurance that the valuations of the current and prospective properties of the Group will be reflected in the actual transaction prices or that estimated yield and annual rental income will prove to be attainable. Failure to realise transaction prices close to valuation and estimated yields and annual rental incomes envisaged could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

2.6 The hedging transactions used by the Group to minimise interest and exchange rate risk may limit gains, result in losses or have other adverse consequences

The derivatives used by the Group to hedge exchange rate risk and interest rate risk can have adverse financial consequences. As far as interest hedges are concerned, where the contracted interest rate on the hedge instrument is above the current market rate, if the underlying asset on which the borrowing being hedged is sold before the hedging instrument matures it can result in the realisation of significant losses.

Further, because a significant proportion of the indebtedness of the Group has been hedged at a fixed rate of interest, the Group will not fully benefit from any future reduction in market interest rates. In addition the Group is subject to credit risk based on hedge counterparties' inability to perform their obligations. Any or all of the factors above could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

3. CAPITAL & REGIONAL'S BUSINESS ACTIVITY AND INDUSTRY

3.1 The trend towards online shopping and multi-channel retailing may adversely impact consumer spending in physical retail stores and therefore footfall, retailer demand and rents in shopping centres

The Group's properties are exposed to factors that affect the retail sector. Retail tenants face increasing competition from the internet and the increased penetration of online retailing. Any resulting trade diversion from traditional retail outlets to the internet could adversely affect footfall in the Group's shopping centres as well as trading conditions or performance of certain of the Group's tenants, with the risk that tenant defaults and voids could increase as well as potentially reducing the demand for retail space. This could result in higher vacancy rates, lower rental income, and revaluation losses on the value of the investment properties of the Group, or otherwise have an adverse effect on the Group's business, financial condition, results of operations and prospects.

3.2 The threat to the Group's property assets from competing in-town and out-of-town retail and leisure schemes

Any upcoming competing schemes and investments in real estate along with new property developments and construction, in geographical proximity of the Group's properties such as the proposed out of town scheme at Newland Park in Luton, could impact demand for space in the town centre by reducing rents and occupancy, and if Newland Park is built, impact footfall. Such outcomes could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

3.3 Prolonged downturn in tenant demand and resulting pressure on rent levels, occupancy and renewals

Tenant failures and reduced tenant demand could adversely affect rental income, occupancy rates, renewal negotiations and require lease incentives or generate void costs. These issues in turn could result in a decline in revaluation losses on the value of the investment properties of the Group, reduce its cash or otherwise have an adverse effect on the Group's business, financial condition, results of operations and prospects and/or the price of the Ordinary Shares and the Group's ability to pay dividends. Similarly, as a result of poor market conditions tenants may put pressure on the Company to lower the contractual rent amounts and, if accepted, would result in decreased rental income for the Group upon lease renewal and/or rent review. Equally, tenants might decide to break their lease and/or refuse to renew leaving premises unoccupied. Such outcomes could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

3.4 The Group is subject to the credit risks associated with tenants, has a high level of dependency on the retail sector and the threat of company voluntary arrangements and administrations amongst the retail industry

The Group's properties are significantly exposed to factors that affect the retail sector. A significant decline in overall retail tenant revenues, or the bankruptcy or insolvency or restructuring through a CVA of significant individual tenants, or of a substantial number of smaller tenants, would materially decrease revenues and available cash, and also materially lower the value of the properties owned by the Group.

Retail tenants are affected by, among other things, general economic conditions, including increases in the cost of imports, and the resulting level of consumer spending, declining consumer confidence in the face of an economic downturn, and seasonal earnings. Retail tenants also face increasing competition from the internet and the increased penetration of online retailing. Any resulting trade diversion from traditional retail outlets to the internet could adversely affect certain of the tenants of the Group, with the risk that tenant defaults and voids could increase as well as potentially reducing the demand for retail space.

The Group is exposed to the credit risk of each of their tenants and the creditworthiness of those tenants can decline over the short term. A number of the Group's tenants have undertaken company voluntary arrangements ("CVA"), faced administration or voluntarily closed certain of their stores in recent years, and there is a risk other tenants do the same. Market conditions in the UK retail sector continue to be challenging. Tenant restructuring, in the form of CVA and administrations have the effect of reducing the Group's income. In the context of CVAs in particular, landlords are usually the most compromised creditor group as cost reduction plans invariably include rent cuts and store closures determined by unit profitability. Examples of CVAs or administrations impacting the Company recently include Debenhams, Arcadia, Monsoon/Accessorize and Select. In total CVAs and Administrations in 2018 and 2019 have impacted Net Rental Income by more than £4 million. Such CVAs and administrations could result in higher vacancy rates, lower rental income, and revaluation losses on the value of the investment properties of the Group, or otherwise have an adverse effect on the Group's business, financial condition, results of operations and prospects.

3.5 The Group is exposed to the risks associated with having specific tenants or types of tenant

The Group's focus on specific tenants or types of tenant (for example retailers) generates a level of concentration risk as tenant failures are more likely to occur simultaneously when markets for such tenant's businesses decline, which may impact significantly on the Group's rental income and profitability. This could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

3.6 Business disruption from a major incident

Financial loss to the Group might result from a single major incident if it is capable of hindering trade or impacting upon shopper footfall in retail centres. For example, a fire at the shopping centre in Walthamstow in July 2019 caused the shopping centre to have to be closed to the public. While insurance for loss of rent and rebuilding cost was maintained it still resulted in an economic and business recovery task force needing to be established to support businesses affected by the fire and to manage the re-opening and rebuilding process. Business disruption from a major incident could therefore have a material adverse effect on the Group's business, financial condition, results of operations and prospects. The Group maintains insurance policies to counteract the financial risk of a number of such major incidents occurring, but it cannot possibly foresee and insure against every possible risk of this nature.

3.7 The market for the properties which the Group owns is generally illiquid

The properties owned by the Group are relatively illiquid, in that there may not be buyers available and willing to pay fair value at the time the Group decides to sell any such properties. If the Group were required to sell any of its respective properties for any reason, including in response to changes in economic or real estate market conditions, or as a result of the longer term need to raise funds to support operations or to repay outstanding indebtedness, it may not be able to sell any of those properties on favourable terms, or at all.

There may be a significant shortfall between the carrying value of a property on the balance sheet and the price that the Group would be able to achieve on an accelerated sale of such property. This could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

3.8 Reputational risks

The Group's business is reliant on the support of retailers and the local communities which frequent the centres and generate sales for retailers, and therefore any adverse events or publicity, including on social media, may cause it reputational damage thus harming its business. Any such reputational damage may negatively impact investor market perception of it and reduce shopper footfall and demand from tenants for space. This could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

3.9 The departure of key employees or the inability to hire employees with the required skills could materially adversely affect the Group's business

The Group's business is dependent on the skills of a small number of key individuals. Failure to put in place an appropriate and attractive reward system may result in the loss of some key individuals. Whilst the Group has ongoing service agreements with each of these individuals, their retention cannot be guaranteed. Equally, the ability to attract new employees with the appropriate expertise and skills cannot be guaranteed. The loss of key employees or the inability to hire employees with the required skills could materially adversely affect the Group's business, financial condition, results of operations and prospects.

4. THE ORDINARY SHARES

4.1 The market price of Ordinary Shares could be volatile and subject to fluctuations

The value of an investment in the Company may go down as well as up. The market price of Ordinary Shares could be volatile and subject to fluctuations due to a variety of factors including changes in sentiment in the market regarding the Ordinary Shares (or securities similar to them), any regulatory changes affecting the Group's operations, variations in its operating results, business developments or its competitors, the operating and share price performance of other companies in the industries and markets in which it operates, or speculation about the Group's business in the press, media or investment community. Stock markets may experience significant price and volume fluctuations which affect the market prices for securities, including the Ordinary Shares, and which may be unrelated to the Group's operating performance or prospects. Furthermore, the Group's operating results and prospects from time to time may be below the expectations of market analysts and investors.

4.2 The liquidity of the Ordinary Shares could be affected by the actions of Growthpoint

Immediately following Admission, Growthpoint (or its Nominee(s)) will own approximately 51.1 per cent. of the issued ordinary share capital of the Company. Growthpoint has agreed that subject to certain customary exceptions, during the period of nine months from the date of Admission, they and their affiliates will not, without the prior written consent of the majority of the Directors, dispose of any Ordinary Shares. Whilst these Ordinary Shares are subject to a lock-up there will be reduced liquidity in the market for Ordinary Shares. Furthermore, Growthpoint has indicated that it has no plans to sell down its stake in the near term which will reduce the number of Ordinary Shares which may be traded in the market. Equally, the sale of a substantial number of Ordinary Shares by Growthpoint in the public market after the lock-up restrictions expire, may depress the market price of the Ordinary Shares. Therefore, any action by Growthpoint in relation to its Ordinary Shares may affect the market price and the liquidity of the Ordinary Shares. Under the rules of the Takeover Code, Growthpoint is also prevented from acquiring Ordinary Shares for 12 months following completion of the Proposed Transaction subject to limited exceptions (including the acquisition of new Ordinary Shares).

4.3 Dilution of Shareholders' interest as a result of subsequent equity fundraisings

The Company may decide to issue additional Ordinary Shares in the future in subsequent public offerings or private placements to fund expansion. If existing Shareholders do not subscribe for additional Ordinary Shares on a pro rata basis in accordance with their existing shareholdings, this will dilute their existing interests in the Company. Furthermore, the issue of additional Ordinary Shares may be on more favourable terms than those pursuant to which the Shareholder subscribed. The issue of additional Ordinary Shares by the Company, or the possibility of such issue, may cause the market price of the Ordinary Shares to decline and may make it more difficult for Shareholders to sell Ordinary Shares at a desirable time or price. There is no guarantee that market conditions prevailing at the relevant time will allow for such a fundraise or that new investors will be prepared to subscribe for Ordinary Shares at a price which is equal to or in excess of the price paid by the Shareholder.

4.4 Dividends

Notwithstanding that the Company is required to distribute 90 per cent. of the income profits (broadly, calculated using normal tax rules) of the qualifying property rental business of the Group (being the worldwide rental business of UK resident companies and the UK rental business of non-UK resident companies within a UK REIT) for each year, any dividend on the Ordinary Shares will be limited by the Company's performance. Therefore, historic dividend payments made by the Company may not be sustainable or reflective of the dividends that might be expected in coming years. The Company can only pay cash dividends to the extent that it has distributable reserves and cash available for this purpose. In addition, the Company may not pay dividends if the Directors believe this would cause the Company to be inadequately capitalised or if, for any other reason, the Directors conclude it would not be in the best interests of the Company. Any of the foregoing could limit the payment of dividends to Shareholders or, if the Company does pay dividends, the amount of such dividends.

5. LEGAL AND REGULATORY

5.1 Growthpoint or its Nominee(s) will become a controlling shareholder if the Proposed Transaction completes and this could jeopardise aspects of the Company's compliance with the UK REIT regime If Growthpoint or its Nominee(s) acquires 51 per cent. of the shares in the Company as a result of the Share Subscription and Partial Offer, there is a risk that the Company would not meet the requirements of the UK REIT regime due to the Company becoming a close company.

Notwithstanding Growthpoint's or its Nominee(s) intended shareholding, the Company will not be a close company provided that the "public ownership test" is met. Based on the current shareholdings in the Company, it is anticipated that the public ownership test will continue to be satisfied immediately after completion of the Share Subscription and Partial Offer.

In addition, if the Company were to become close on (or subsequently to) completion of the Share Subscription and Partial Offer, Growthpoint or its Nominee(s) should be an institutional investor by virtue of the fact that it will be acting on behalf of a limited partnership which is a collective investment scheme and also by virtue of the fact that it is a REIT for South African tax purposes, provided that the South African REIT regime is considered to be equivalent to the UK REIT regime.

5.2 Status as a UK Real Estate Investment Trust (under Part 12 of the CTA 2010) is dependent on the Company complying with the UK REIT regime

Under the UK REIT regime the Company must meet a minimum distribution test for each year that it is the principal company of a UK REIT group. The minimum distribution test requires the Company to distribute at least 90 per cent. of its income profits from its UK property rental business for each year and, to the extent that any property rental business profits are attributable to income from other UK REITs, the Company must distribute 100 per cent. of the income. If and to the extent that the Company fails to meet the distribution test, it becomes subject to a corporation tax charge on the amount of income which it should have distributed but failed to distribute. This is also a breach of the UK REIT conditions which may result in expulsion of the Company from the UK REIT regime if HMRC considers the breach to be so serious that the Company should cease to be a UK REIT.

The Company cannot guarantee continued compliance with all of the UK REIT conditions and there is a risk that the UK REIT regime may cease to apply to it in some circumstances. HMRC may terminate the Company's UK REIT status by serving notice if:

^l it regards a breach of the conditions (which does not result in automatic termination of UK REIT status) or an attempt to obtain a tax advantage, as sufficiently serious;
^l the Company has committed a certain number of minor or inadvertent breaches of the UK REIT regime in a specified period; or
^l HMRC has given the Company at least two notices in relation to the avoidance of tax within a ten-year period.

In addition, if the conditions for UK REIT status requiring the Company to have only one class of ordinary shares (or one class of ordinary shares together with non-voting preference shares) or the prohibition of being a debtor in respect of loans with abnormal returns are breached, or the Company ceases to be UK resident or becomes an open-ended investment company, the Company will automatically lose its UK REIT status and will be taken to have ceased to be a UK REIT at the end of the previous accounting period. If the Company's shares cease to be admitted to trading and listed or traded on a recognised stock exchange it will be deemed to have ceased to be a REIT at the end of its previous accounting period.

The Company could also lose its status as a UK REIT if it becomes a close company (unless it is only close by virtue of having a participator which is an institutional investor), in which case the Company will cease to be a UK REIT unless the breach is remedied by the end of the accounting period following that in which the breach first accrued. Accordingly, if a UK REIT becomes a close company, for example as a result of a takeover, the UK REIT has a grace period to correct this breach.

As indicated earlier, a UK REIT will not lose its status as a result of becoming a close company if this is only due to its having a participator which is an institutional investor. For these purposes, an institutional investor includes various categories of investor including (1) a person acting on behalf of a limited partnership which is a collective investment scheme and (2) a person resident outside the UK which, under the law of its territory, is the equivalent of a UK REIT. Furthermore, a company will not be a close company at any time if the "public ownership test" is met, meaning that at least 35 per cent. of its shares are held by the public (within the meaning of section 447 Corporation Tax Act 2010 (as applied for the purposes of the UK REIT regime)) and any of those shares have, in the preceding twelve months, been the subject of dealings on a recognised stock exchange, provided that shareholders each holding at least 5 per cent. of the voting power in a company do not collectively exceed 85 per cent. of the voting power.

For completeness, it is noted that a company may voluntarily give notice to cease to be a UK REIT, if it wishes to do so.

If the Company were to be required to leave the UK REIT regime, it would cease to benefit from the UK REIT regime's corporation tax exemption and may be subject to an increased tax charge. If this occurs as a result of a breach of the UK REIT rules which result in automatic termination of the Company's UK REIT status, the Company will be deemed to have ceased to be a UK REIT company at the end of its previous accounting period. In other cases, the property rental business of the company is treated as ceasing immediately before the company leaves the UK REIT regime and the assets of the property rental business are treated, for corporation tax purposes, as being sold immediately before and re-acquired for market value immediately after the company leaves the UK REIT regime.

5.3 Uncertainty surrounding the process and terms of the UK's withdrawal from the EU could have a material adverse effect on the Group

On 23 June 2016, a referendum was held on the UK's membership in the EU, the outcome of which was a vote in favour of leaving the EU. On 29 March 2017, the UK government notified the EU that it was triggering the formal process for leaving the EU under Article 50 of the Treaty of the European Union, which allows a Member State to decide to withdraw from the EU in accordance with its own constitutional requirements. The triggering of Article 50 commenced a two year negotiating period for the UK to agree the terms of its exit from the EU. This period was extended on 28 October 2019 until 31 January 2020.

The UK is still attempting to negotiate the terms of the UK's future relationship with the EU and the UK has not determined the date upon which it will leave the EU or the terms of its departure. The Government has called a general election to be held on 12 December 2019, the outcome of which will have a significant impact on the UK position and strategy in respect of Brexit and wider economic policy. Therefore, as at the date of this document, the terms on which the UK is expected to leave the EU remain uncertain. There are a number of areas of uncertainty in connection with the future of the UK and its relationship with the EU and the negotiation of the UK's exit terms, if any. Given this uncertainty and the range of possible outcomes, it is not currently possible to determine the impact that the referendum, the UK's departure from the EU and/or any related matters may have on general economic conditions in the UK, including the UK retail sector. Accordingly, the terms of any such exit, and the accompanying political and economic uncertainty surrounding the UK's withdrawal from the EU, could have a material adverse effect on the Group's business, results of operation, financial condition and prospects.

5.4 Investors may, in certain circumstances, be exposed to adverse ERISA consequences

The Company cannot guarantee that equity interests in the Company will not be acquired by, or transferred to, investors that are ERISA Entities. If 25 per cent. or more of the total value of any class of equity interest in the Company (determined after the most recent acquisition of any equity interest in the Company and subject to certain other computational rules) were to be held by ERISA Entities, an undivided portion of the Company's assets could be required to be treated as "plan assets" subject to ERISA or the Code. In such a case, the Company and those responsible for advising the Company and its assets could become subject to applicable requirements of ERISA and the Code and could be obligated to cause the operations and investments of the Company to be administered, consistent with those requirements, other than as the Company and its advisers might otherwise think advisable. Moreover, it is not clear that, in such a case, the Company or its advisers could comply with all applicable requirements of ERISA or the Code. A failure of the Company or its advisers to comply with any such applicable provision could result in injunctive or other relief that could adversely affect the Company, its advisers and its investors and in the assertion of a tax or penalty with respect to transactions involving the "plan assets" deemed held by the Company.

6. ENVIRONMENTAL, SOCIAL AND GOVERNANCE

6.1 The Group's investments are subject to potential environmental liabilities and costs

In the ordinary course of business and in connection with future any acquisitions, the Group may become responsible for certain environmental clean-up liabilities or costs. As the owners of real estate property, the Group is subject to environmental regulations that can impose liability for cleaning up contaminated land, watercourses or groundwater on the person causing or knowingly permitting the contamination. If the Group own or acquire contaminated land, it could also be liable to third parties for harm caused to such third parties or their property as a result of the contamination. If the Group is found to be in violation of environmental regulations, it could face reputational damage, regulatory compliance penalties, reduced letting income, reduced asset valuations and reduce the ability of the Group to borrow using property as security, which could have a material adverse impact on the Group's business, financial condition, results of operations and prospects.

6.2 The Group's investments are subject to potential health and safety liabilities and reputational risk from incidents or accidents at the properties they own and manage

The Group manages and operates shopping centres, other retail outlets and indoor ski operations which attract significant consumer footfall and by their nature are subject to the risk of health and safety incidents. Whilst the Group has detailed health and safety procedures it is impossible to rule out totally the risk of an incident occurring involving loss of life, serious injury or significant damage to a property which could have a material adverse impact on the Group's business, financial condition, results of operations and prospects.

6.3 The Group's properties may suffer uninsured losses

The Board seeks to ensure that all of the Group's properties are adequately insured to cover potential losses. However, the Group's properties could suffer physical damage as a result of fire or other causes, resulting in losses which may not be fully compensated by insurance. In addition, there are certain types of losses, generally of a catastrophic nature, for which insurance is either unavailable or which are not economically insurable. In the event that the Group incurs a loss that is not fully covered by insurance, the value of the relevant asset or assets of the Group will be reduced by or in proportion to the amount of any such uninsured loss, which could have a material adverse effect on the Group's business, financial condition, results of operations and prospects and the Group's ability to pay dividends.

Inflation, changes in building codes and ordinances, environmental considerations and other factors, including terrorism or acts of war, might also result in insurance proceeds being insufficient to repair or replace a property if it is damaged or destroyed. No assurance can be given that material losses in excess of insurance proceeds will not occur in the future. In addition, whilst the Group will attempt to ensure that all of its properties are adequately insured, changes in the cost, cover or availability of insurance could expose the Group to uninsured losses, any of which could have a material adverse effect on the Group's business, financial condition, results of operation and prospects.

IMPORTANT INFORMATION

NOTICE TO ALL SHAREHOLDERS

Any reproduction or distribution of this document, in whole or in part, and any disclosure of its contents or use of any information contained in this document for any purpose other than considering an investment in the New Shares is prohibited.

The distribution of this document and/or the transfer of the New Shares into jurisdictions other than the United Kingdom may be restricted by law. Persons into whose possession this document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. In particular, this document should not be distributed, forwarded to or transmitted in or into any jurisdiction where to do so would or might contravene local securities laws or regulations. No action has been taken by Capital & Regional or by Numis or JPMC that would permit an offer of the New Shares or rights thereto or possession or distribution of this document or any other offering or publicity material in any jurisdiction where action for that purpose is required, other than in the United Kingdom.

Potential investors and the Shareholders should only rely on the information contained in this document and contained in any documents incorporated into it by reference. No person has been authorised to give any information or make any representations other than those contained in this document and all documents incorporated by reference into it and, if given or made, such information or representations must not be relied upon as having been authorised by the Company or by Numis or by JPMC. No representation or warranty, express or implied, is made by Capital & Regional or by Numis or by JPMC as to the accuracy or completeness of such information, and nothing contained in this document is, or shall be relied upon as, a promise or representation by Capital & Regional or by Numis or by JPMC as to the past, present or future. Except to the extent imposed by FSMA and/or the Prospectus Regulation Rules and/or the Listing Rules, neither the delivery of this document nor any subscription or sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Group since the date of this document or that the information in this document is correct as at any time subsequent to its date.

The contents of this document are not to be construed as legal, business or tax advice. Each recipient should consult their own legal, financial or tax adviser for legal, financial or tax advice.

Capital & Regional will update the information provided in this document by means of a supplement hereto if a significant new factor, material mistake or material inaccuracy arises or is noted relating to the information included in this document. Any supplementary prospectus will be subject to approval by the FCA and will be made public in accordance with the Prospectus Regulation Rules.

Capital & Regional will comply with its obligation to publish supplementary prospectuses containing further updated information required by law or by any regulatory authority but assumes no further obligation to publish additional information.

Each recipient should consult with such advisers as it needs to in order to make its investment decision and to determine whether it is legally permitted to hold shares under applicable laws or regulations. An investor should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time.

Investing in and holding Ordinary Shares involves financial risk. Prior to investing and holding Ordinary Shares, potential investors should carefully consider all of the information contained in this document, paying particular attention to the section entitled Risk Factors on pages 12 to 22 of this document. Potential investors should consider carefully whether an investment in the Ordinary Shares is suitable for them in light of the information contained in this document and their personal circumstances.

Numis or JPMC and their respective affiliates may have engaged in transactions with, and provided various investment banking, financial advisory and other services to the Group, for which they would have received customary fees. Numis or JPMC and their respective affiliates may provide such services to the Group and any of their affiliates in the future.

NOTICE TO OVERSEAS SHAREHOLDERS

The New Shares have not been and will not be registered or qualified under the relevant laws of any state, province or territory of the United States or the Excluded Territories and may not be offered or sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, into or within the United States or any of the Excluded Territories except pursuant to an applicable exemption from registration or qualification requirements. This document is not or does not constitute an invitation or offer to sell or the solicitation of an invitation or an offer to buy New Shares in any member state of the European Economic Area (other than the United Kingdom), Australia, Canada, Japan, New Zealand or South Africa (save to the extent this document is distributed to Growthpoint and to Shareholders in South Africa in order to provide the notice of General Meeting) or any jurisdiction in which such offer or solicitation is unlawful. Persons into whose possession this document comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

No public offer of the New Shares is being made by virtue of this document in or into any jurisdiction outside the United Kingdom in which such offer would be unlawful. Subject to certain exceptions, this document will not be distributed in or into the United States or any Excluded Territories, and this document does not constitute a public offer of New Shares to any person with a registered address in, or who is resident or located in (as applicable), the United States or any Excluded Territory.

Incorporation by reference

Certain information in relation to the Group has been incorporated by reference into this document. Please see Part 9 of this document. Except as set out in Part 9, no other part of these documents are incorporated by reference into this document and those parts which are not specifically incorporated by reference in this document are either not relevant for the Shareholders or the relevant information is included elsewhere in this document.

To the extent that any document or information incorporated by reference incorporates any information by reference, either expressly or impliedly, such information will not form part of this document for the purposes of the Prospectus Regulation Rules, except where such information or documents are stated within this document as specifically being incorporated by reference or where this document is specifically defined as including such information.

Any statement contained in a document which is deemed to be incorporated by reference into this document shall be deemed to be modifies or superseded for the purposes of this document to the extent that a statement contained in this document (or in a later document which is incorporated by reference into this document) modified or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this document.

No incorporation of website

None of the content of the Company's website (www.capreg.com) and the Growthpoint's website (www.growthpoint.co.za) (or any other website) or the content of any website accessible from hyperlinks on the Company's or Growthpoint's (or any other) website is incorporated into, or forms part of, this document.

Definitions

Capitalised terms have the meanings ascribed to them in Part 10 of this document.

Shareholder Helpline

If you have any questions in relation to this document or the completion of the form of proxy, please telephone the relevant Shareholder Helpline as follows:

^l Equiniti, the UK Receiving Agent, on 0333-207-5963 for Shareholders registered on the UK Register calling from within the UK (or +44 121-415-0088 for Shareholders registered on the UK Register calling from outside the UK). Lines are open from 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (except English and Welsh public holidays)

^l Link Market Services, the South African Transfer Secretary, on 0861-472-644 for Shareholders registered on the South African Register calling from within South Africa (or (+27) 011 029 0112 for Shareholders registered on the South African Register calling from outside South Africa). Lines are open between 8.00 a.m. and 4.30 p.m. (South African standard time) Monday to Friday (except South African public holidays).

Calls to the Shareholder Helplines from outside the United Kingdom or South Africa (as applicable) will be charged at international rates. Different charges may apply to calls made from mobile telephones. Calls may be recorded and randomly monitored for security and training purposes.

Please note that, for legal reasons, the Shareholder Helpline will only be able to provide information contained in this document and information relating to Capital & Regional's register of members and will be unable to give advice on the merits of the Share Subscription or to provide financial, legal tax or investment advice.

Presentation of financial information

The Company publishes its consolidated financial statements in Pounds Sterling ("£" or "Pounds Sterling"). The abbreviation "£m" represent millions of Pounds Sterling and references to "pence" and "p" represent pence in the UK.

The financial information presented in a number of tables in this document has been rounded to the nearest whole number or the nearest decimal point. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding, and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

The significant accounting policies are set out in the notes to the Group's historical consolidated financial information.

Forward-looking statements

This document includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms anticipates, believes, estimates, expects, intends, may, plans, projects, should or will, or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include, but are not limited to, statements regarding the Company's and/or Directors' intentions, beliefs or current expectations concerning, amongst other things, the Group's results of operations, financial position, prospects, growth, strategies and expectations for the retail property market.

Any forward-looking statements in this document reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. Potential investors should specifically consider the factors identified in this document which could cause actual results to differ before making an investment decision. A number of factors could cause results and developments of the Group to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, changes in regulation, currency fluctuations, changes in its business strategy, political and economic uncertainty and other factors discussed in the section headed "Risk Factors" of this document. Past performance of the Company is not necessarily indicative of future performance.

The information in this document will be updated as required under the Prospectus Regulation, the Prospectus Regulation Rules, the Disclosure Guidance and Transparency Rules and the Takeover Code. Subject to the foregoing sentence, the Company, Numis and JPMC expressly disclaim any obligations to update or revise any forward-looking statement contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based. All subsequent forward-looking statements that can be attributed either to the Company or to individuals acting on its behalf (including the Directors and the Proposed Directors) are expressly qualified in their entirety by this paragraph.

Nothing in this paragraph should be taken as qualifying the working capital statement in paragraph 21 of Part 8 of this document.

Time

All references to time are to London time unless stated otherwise.

No forecasts or estimates

No statement in this document is intended as a profit forecast or estimate for any period.

Accretion statements or statements as to the effect of the Share Subscription should not be construed as profit forecasts and are, therefore, not subject to the requirements of Rule 28 of the Takeover Code.

No statement in this document should be interpreted to mean that earnings, earnings per share or income, cash flow from operations or free cash flow for the Group, for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per share or income, cash flow from operations or free cash flow for the Group.

Sources of financial information

In this document unless otherwise stated:

(A) financial information relating to Capital & Regional has been extracted unless otherwise stated, without material adjustment, from (i) the audited historical financial information referred to in Part 4 of this document for the financial years ended 30 December 2018, 30 December 2017 and 30 December 2016 prepared in accordance with IFRS and (ii) the unaudited statements for the period ending 30 June 2019 also referred to in Part 4 of this document; and
(B) where information has been sourced from a third party, Capital & Regional confirms that the information has been accurately reproduced and, as far as Capital & Regional is aware and able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate of misleading. Where third party information has been used, the source of such information has been identified wherever it appears in this document.

SHARE SUBSCRIPTION

Issue Price per New Share	25 pence
Number of Ordinary Shares in issue at the date of this document	727,389,117
Number of New Shares to be issued to Growthpoint	311,451,258
Enlarged Ordinary Share capital immediately following completion of the Share Subscription	1,038,840,375
Estimated gross proceeds of the Share Subscription receivable by the Company	£77.9 million
Estimated expenses of the Share Subscription	£5.3 million
Estimated net proceeds of the Share Subscription receivable by the Company	£72.6 million

EXPECTED TIMETABLE OF PRINCIPAL EVENTS1,2,3

Some of the dates and times below are indicative only and may be subject to change. References to a time of day are to London time unless otherwise stated.

17 October 2019
7 November 2019
7 November 2019
12 November 2019
22 November 2019
Latest date/time for receipt of Form of Proxy (48 hours (not including any 22 November 2019 part of a day that is not a Business Day) before the General Meeting)
26 November 2019
1.00 p.m. on 28 November 2019
9 December 2019
8.00 a.m. (London time) on 9 December 2019
9.00 a.m. (South African Time) on 9 December 2019
on or soon after 8.00 a.m. on 9 December 2019
Close of business on 13 December 2019
1.00 p.m. on 13 December 2019 under Rule 31.4 of the Takeover Code) assuming the Partial Offer has become unconditional as to acceptances before the First Closing Date5
By no later than 9.00 a.m. on the second Business Day following the closing of the Partial Offer
By no later than 12.00 noon (South Africa time) on the first day on which banks are generally open for business in Johannesburg following the closing of the Partial Offer, being 17 December 2019
23 December 2019
7 January 2020
10 January 2020

Record date in the UK for the Consolidation and disablement of the existing ISIN (6.00 p.m. (London time))	14 January 2020
Trading in the Consolidated Ordinary Shares under the new ISIN on the JSE and the LSE commences on	15 January 2020
Admission and listing of the Consolidated Ordinary Shares on the JSE and LSE	15 January 2020
Consolidated Ordinary Shares credited within CREST	15 January 2020
Record date for Shareholders to be recorded in the SA share register to be eligible to participate in the Consolidation (close of business in South Africa)	17 January 2020
Lifting of suspension of movement of ordinary shares of the Company on the JSE and the LSE (close of business)	20 January 2020
Posting of share certificates in respect of certificated Shareholders following the Consolidation and update of dematerialised Shareholders' accounts with their CSDP and brokers (South Africa)	20 January 2020
Share certificates issue to certificated Shareholders (UK)	Within 14 days of the admission of the Consolidated Ordinary Shares

Notes:

(1) The times set out in the expected timetable of principal events above and mentioned throughout this document are times in London unless otherwise stated, and may be adjusted by the Company in consultation with or, if required, with the agreement of Numis and JPMC, in which event details of the new times and dates will be notified to the Financial Conduct Authority, the London Stock Exchange and, where appropriate, Shareholders.
(2) These dates and times given are indicative only and are based on Capital & Regional's current expectations and may be subject to change (including as a result of changes to the regulatory timetable). If any of the times and/or dates above change, the revised times and/ or dates will be notified to Shareholders by announcement through a Regulatory Information Service and on SENS.
(3) In respect of the Partial Offer, share certificates may not be dematerialised or rematerialised between Wednesday, 11 December 2019 and Friday, 13 December 2019, both days inclusive, nor may transfers of shares between sub-registers in the United Kingdom and South Africa take place between Wednesday, 11 December 2019 and Friday, 13 December 2019, both days inclusive.
(4) Growthpoint has reserved the right at any time or from time to time to extend the Partial Offer after such time.
(5) Growthpoint has reserved the right not to extend the Partial Offer if the acceptance condition set out in the Offer Document has not been satisfied by the first or any subsequent closing date or otherwise permitted under the Takeover Code or the Panel, or to extend it by a different time period from that indicated above in its sole discretion.
(6) Please see paragraph 18 of Part 1 of the Offer Document for a full description of the settlement timing.
(7) In respect of the Consolidated Ordinary Shares, share certificates may not be dematerialised or rematerialised between Wednesday, 15 January 2020 and Friday, 17 January 2020, both days inclusive, nor may transfers of shares between subregisters in the United Kingdom and South Africa take place between Friday, 10 January 2020 and Monday 20 January 2020, both days inclusive.

If you have any questions in relation to this document or the completion of the form of proxy, please telephone the relevant Shareholder Helpline as follows:

^l Equiniti, the UK Receiving Agent, on 0333-207-5963 for Shareholders registered on the UK Register calling from within the UK (or +44 121-415-0088 for Shareholders registered on the UK Register calling from outside the UK). Lines are open from 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (except English and Welsh public holidays).
^l Link Market Services, the South African Transfer Secretary, on 0861-472-644 for Shareholders registered on the South African Register calling from within South Africa (or (+27) 011 029 0112 for Shareholders registered on the South African Register calling from outside South Africa). Lines are open between 8.00 a.m. and 4.30 p.m. (South African standard time) Monday to Friday (except South African public holidays).

Please note that Shareholder Helplines cannot provide legal, tax or financial advice or any advice on the merits of the Proposed Transaction.

DIRECTORS, PROPOSED DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS

Directors	Hugh Scott-Barrett, Non-Executive Chairman Lawrence Hutchings, Chief Executive Officer Stuart Wetherly, Group Finance Director Tony Hales, Non-Executive Director Wessel Hamman, Non-Executive Director Ian Krieger, Non-Executive Director Louis Norval, Non-Executive Director Laura Whyte, Non-Executive Director
Proposed Directors	Norbert Sasse, Non-Executive Director George Muchanya, Non-Executive Director
Company Secretary	Stuart Wetherly
Registered Office and Directors'	22 Chapter Street
Business Address	London SW1P 4NP
Sponsor and Joint Financial Adviser	Numis Securities Limited The London Stock Exchange Building 10 Paternoster Square London EC4M 7LT
Joint Financial Adviser	J.P. Morgan Securities plc 25 Bank Street London E14 5JP
South African Sponsor	Java Capital Trustees and Sponsors Proprietary Limited 6A Sandown Valley Crescent Sandown Sandton 2196 South Africa
Legal Adviser to the Company as to English law	CMS Cameron McKenna Nabarro Olswang LLP Cannon Place 78 Cannon Street London EC4N 6AF
Legal Adviser to the Company as to South African law	Cliffe Dekker Hofmeyr Incorporated 1 Protea Place Sandton 2146 South Africa
Legal Adviser to the Sponsor and Joint Financial Advisers as to English law	Travers Smith LLP 10 Snow Hill London EC1A 2AL
Reporting Accountant	Grant Thornton UK LLP 30 Finsbury Square London EC2A 1AG
Auditors	Deloitte LLP 1 New Street Square London EC4A 3HQ

Property Valuers	CBRE Limited St Martin's Court 10 Paternoster Row London EC4M 7HP and
	Knight Frank LLP 55 Baker Street, London W1U 8AN
UK Registrar and Receiving Agent	Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA
SA Transfer Secretaries	Link Market Services South Africa Proprietary Limited 13th Floor, 19 Ameshoff Street, Braamfontein 2001 South Africa

LETTER FROM THE CHAIRMAN

(registered in England & Wales with registered number 01399411)

Hugh Scott-Barrett, Non-Executive Chairman 22 Chapter Street Lawrence Hutchings, Chief Executive Officer London Stuart Wetherly, Group Finance Director SW1P 4NP Tony Hales, Non-Executive Director Wessel Hamman, Non-Executive Director Ian Krieger, Non-Executive Director Louis Norval, Non-Executive Director Laura Whyte, Non-Executive Director

Directors Registered Office:

7 November 2019

Dear Shareholder,

Recommended partial offer by Growthpoint to the Shareholders to acquire 219,786,924 Existing Ordinary Shares, each at an Offer Price of 33 pence per Ordinary Share representing approximately 30.2 per cent. of the entire issued ordinary share capital of Capital & Regional

and

Proposed cash subscription by Growthpoint for 311,451,258 new Ordinary Shares, each at an Issue Price of 25 pence per share representing 30.0 percent of the enlarged issued ordinary share capital of Capital & Regional

and

Waiver of obligations under Rule 9 of the Takeover Code

and

Notice of General Meeting

1. INTRODUCTION

On 17 October 2019 the Boards of Capital & Regional and Growthpoint jointly announced they had reached agreement on the terms of a recommended partial offer to be made by Growthpoint (or its Nominee(s)) to acquire 219,786,924 Existing Ordinary Shares, representing approximately 30.2 per cent. of the current issued ordinary share capital of the Company (the "Partial Offer"), by way of a contractual offer under the Takeover Code at a price of 33 pence per Existing Ordinary Share representing a premium of 100 per cent. to the undisturbed closing share price on 10 September 2019 (being the last Business Day prior to the 2.4 Announcement).

In addition, the Growthpoint Directors and the Directors jointly announced the terms of a substantial investment into the Company whereby Growthpoint (or its Nominee(s)) will subscribe for 311,451,258 New Shares ("Share Subscription"), representing approximately 30.0 per cent. of the enlarged issued ordinary share capital of the Company following completion of the Share Subscription and the Partial Offer, at a price of 25 pence per New Share (the Share Subscription, together with the Partial Offer, being the "Proposed Transaction"). Following completion of the Proposed Transaction, Growthpoint (or its Nominee(s)) will hold 51.1 per cent. of the enlarged issued share capital of the Company.

The Share Subscription would provide the Company with gross proceeds of approximately £77.9 million. The Company has undertaken to apply a minimum of £50 million of the net proceeds of the Share Subscription to reduce and/or restructure the Group's existing debt arrangements and apply the balance to assist in funding the Group's capital expenditure as further described below.

Shareholder approval

The Proposed Transaction requires Shareholder approval (i) to grant the Directors authority to allot and issue the New Shares as if the applicable statutory pre-emption rights did not apply and (ii) approve the terms of the Partial Offer and the waiver of any obligation on Growthpoint which would otherwise arise under Rule 9 of the Takeover Code as a result of the Proposed Transaction (the "Rule 9 Waiver"). Shareholders will be asked to approve the Resolutions at a General Meeting which has been convened for 9.00 a.m. on 26 November 2019 at 110 Rochester Row, Westminster, London, SW1P 1JQ. Details of the Resolutions are set out in more detail in paragraph 18 of this Part 1 and the Notice of General Meeting is set out at the end of this document. If the Transaction Resolutions are not passed, the Proposed Transaction will not proceed.

The purpose of this document is to set out the background to and reasons for, the Proposed Transaction, and:

^l to explain the Resolutions to be put to Shareholders at the General Meeting;
^l to explain why Shareholders are being asked to vote on the Resolutions; and
^l to recommend that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

2. SUMMARY OF TERMS OF THE PARTIAL OFFER

It is intended that the Partial Offer be implemented by means of a contractual offer under the Takeover Code.

The Partial Offer, which will be subject to the terms and conditions set out in the Offer Document and the Form of Acceptance will be made on the following basis:

33 pence in cash

for each Existing Ordinary Share to be sold pursuant to the Partial Offer

The Partial Offer element of the Proposed Transaction values: (i) the entire issued share capital of Capital & Regional at approximately £240.0 million; and (ii) the Existing Ordinary Shares subject to the Partial Offer at approximately £72.5 million.

The Offer Price represents a premium of approximately:

^l 100 per cent. to the undisturbed closing price per Existing Ordinary Share of 16.5 pence per Ordinary Share for the three-month period ended 10 September 2019 (being the last Business Day prior to the Rule 2.4 Announcement);
^l 124 per cent. to the volume-weighted average price of 14.7 pence per Existing Ordinary Share for the three-month period ended 10 September 2019 (being the last Business Day prior to the Rule 2.4 Announcement); and
^l 85 per cent. to the volume-weighted average price of 17.8 pence per Existing Ordinary Share for the six-month period ended 10 September 2019 (being the last Business Day prior to the Rule 2.4 Announcement).

Shareholders may accept (or procure the acceptance of) the Partial Offer in respect of any number of the Existing Ordinary Shares held by them or none. Subject to the Partial Offer becoming, or being declared, unconditional in all respects:

(i) if Shareholders accept (or procure the acceptance of) the Partial Offer in respect of approximately 30.2 per cent. or less of their registered holdings, then their acceptances will be met in full;

(ii) if Shareholders accept (or procure the acceptance of) the Partial Offer in respect of more than approximately 30.2 per cent. of their registered holdings and the total acceptances received from all Shareholders are in respect of more than 219,786,924 Existing Ordinary Shares, each such Shareholder would have their acceptances in excess of approximately 30.2 per cent. scaled down in the same proportion to the total number of Existing Ordinary Shares tendered to the extent necessary to enable Growthpoint (or one or more Growthpoint Nominees) to acquire 219,786,924 Existing Ordinary Shares.

If scaling down, as described above, is required in respect of any accepting Shareholders, Growthpoint will make an announcement stating the basis of such scaling down as soon as reasonably practicable and in any event by 9.00 a.m. on the second Business Day following the closing of the Partial Offer.

If the Partial Offer becomes, or is declared, unconditional in all respects and the New Shares are issued, Growthpoint will hold Ordinary Shares carrying more than 50 per cent. of the voting rights of the Company and Growthpoint will be free (subject to Rule 36.3 of the Takeover Code as described immediately below) to acquire further Ordinary Shares without incurring any obligation under Rule 9 of the Takeover Code to make a general offer.

Following a successful partial offer, Rule 36.3 of the Takeover Code prevents Growthpoint and any person acting in concert with it from acquiring any interest in the shares of the Company during a period of 12 months after the end of the Offer Period without the consent of the Panel. This restriction does not prevent Growthpoint or any persons acting in concert with Growthpoint from acquiring new shares in the Company.

The cash consideration under the Partial Offer is priced in Pounds Sterling. However, shareholders on the South African register of the Company will, as required, receive any cash consideration due to them under the terms of the Partial Offer in Rand. The Offer Document will include further details in relation to this currency exchange.

The Partial Offer is conditional upon, amongst other things:

^l Growthpoint (or one or more Nominee(s)) receiving valid acceptances (which have not been validly withdrawn) in respect of at least 219,786,924 Existing Ordinary Shares (representing approximately 30.2 per cent. of the Existing Ordinary Shares in issue as at 16 October 2019 (being the last Business Day prior to the date of the Rule 2.7 Announcement));
^l the Partial Offer and Rule 9 Waiver Resolution being approved by Independent Shareholders holding Existing Ordinary Shares carrying over 50 per cent. of the voting rights of the Company held by Independent Shareholders;
^l the passing of the other Transaction Resolutions at the General Meeting; and
^l UK Admission of the New Shares.

One of the Resolutions at the General Meeting is the Partial Offer and Rule 9 Waiver Resolution. The passing of this resolution by Independent Shareholders is a condition of the Partial Offer. For this resolution to be passed, Shareholders, who are independent of Growthpoint and persons acting in concert with Growthpoint, holding more than 50 per cent. of the voting rights in the Company held by Independent Shareholders must vote in favour of the resolution (whether in person or by proxy). If this resolution or any of the other Transaction Resolutions are not passed, the Partial Offer will lapse. All Shareholders who are in favour of the Proposed Transaction should therefore complete and return the Form of Proxy (once received by them) in accordance with the procedures set out in this document.

3. SHARE SUBSCRIPTION

In connection with the Partial Offer, Growthpoint and the Company have entered into the Subscription Agreement pursuant to which Growthpoint (or any Growthpoint Nominee(s)) has agreed to subscribe for the New Shares at a price of 25 pence per New Share. The Issue Price represents a premium of approximately 51.5 per cent. to the undisturbed closing price per Existing Ordinary Share of 16.5 pence for the three-month period ended 10 September 2019 (being the last Business Day prior to the Rule 2.4 Announcement).

The Share Subscription is conditional, amongst other things, upon:

^l the Partial Offer becoming or being declared unconditional in all respects (save only for UK Admission); and
^l Shareholders approving the Transaction Resolutions.

The Share Subscription will take place automatically upon Admission at which point Growthpoint (or its Nominee(s)) will be interested in 531,238,182 Ordinary Shares representing in aggregate approximately 51.1 per cent. of the enlarged issued ordinary share capital of the Company. Upon completion, the Share Subscription will provide the Company with proceeds equal to approximately £77.9 million (before costs).

Pursuant to the Subscription Agreement, the Company has agreed to various provisions, namely (i) to apply a minimum of £50 million of the proceeds from the Share Subscription to reduce and/or restructure the Group's existing debt arrangements and to apply the balance to assist in funding the Group's capital expenditure (as further described below); and (ii) for so long as Growthpoint and any Growthpoint Nominee(s) hold in aggregate an interest in at least 35 per cent. of the voting rights in the Company, to adopt a policy from Admission of distributing on a semi-annual basis (in the approximate proportions of 45 / 55 per cent. and in that order in respect of each financial year) not less than approximately 90 per cent. of the Company's EPRA earnings. In addition, the Company has agreed in that same agreement, with effect from Admission, to strive, as soon as is reasonably commercially practicable, to (a) obtain an investment grade rating; (b) reduce its LTV in line with Growthpoint's existing treasury policy of between 35 per cent. and 45 per cent.; and (c) implement Growthpoint's treasury policy (subject to such commercial realities as may be relevant to the Company and the United Kingdom) provided that such obligations will continue for so long as Growthpoint and any Growthpoint Nominee(s) hold in aggregate an interest in at least 35 per cent. of the voting rights in Capital & Regional.

4. BACKGROUND TO AND REASONS FOR THE PROPOSED TRANSACTION

The structural shift in the retail landscape has continued to accelerate. Economic conditions in the UK remain uncertain and high street retail has faced a considerable amount of pressure as a result of the macro-economic backdrop and structural changes in retailing driven by technology, particularly online shopping. This has also been the case in the UK shopping centre market which is rapidly evolving with increasing polarisation between 'discretionary' or 'wants' focused centres, typically anchored by major department stores with a large fashion presence and increasingly entertainment uses, and 'needs' focused centres anchored by 'non-discretionary' offers such as grocery, professional and personal services including health and beauty and day to day services. Notwithstanding the pressures being witnessed in the UK shopping centre and retail market the Board believes that Capital & Regional is well positioned to capitalise on the changes taking place in the industry by focusing on affordable rents and convenience locations which serve the daily 'needs' rather than the 'wants' of underlying communities with careful deployment of capital expenditure.

As part of the Group's strategy, asset masterplans have been established and designed to reposition the Company's shopping centres into a community-based model and maximise the value of its portfolio by unlocking value through the re-use or development of its assets. These masterplans include a pipeline of a wide variety of capital expenditure projects which have been undertaken across the portfolio to improve the quality and relevance of its shopping centres. The Company intends for capital expenditure to be accretive to future income and value. Recent examples include investments at the Mall Wood Green for a Travelodge hotel, capital expenditure at the Mall Walthamstow to secure the likes of Lidl and The Gym Group as tenants, and funds to secure a 25 year cinema lease at Marlowes Hemel Hempstead with Empire Cinemas. Against this programme of ongoing investment, market conditions have become increasingly challenging, with physical retailing venues being negatively impacted by not just economic uncertainty but also by the continued impact of technology. This places more emphasis on the need to continue repositioning the Company's shopping centres via the capital expenditure programme. Given the potential for further falls in property valuations, ongoing capital expenditure has the effect of increasing leverage (and balance sheet risk) despite projects expected to be accretive to income. In addition, many retailers are facing difficult trading conditions, coupled with increases in business rates, employment costs and a devaluation in sterling currency which has had the effect of placing pressure on their capital structures. This has resulted in multiple retailer restructurings or failures including both CVAs and administrations. A number of CVA or administration processes have impacted the Group in 2019 including Debenhams, Arcadia, Monsoon/Accessorize, Select and Thomas Cook.

Despite the wider market pressures impacting the shopping centre industry, the Group's performance has been relatively resilient with like-for-like footfall outperforming the market with 37.2 million shopper visits in the first half of 2019 and occupancy at 96.8 per cent. In addition, the Group's contracted rent position remained robust at £61.1 million as at 30 June 2019 down only 1.9 per cent. in comparison to 30 June 2018 and, for the equivalent period, net rental income was down 3.1 per cent. in comparison to 30 June 2018. This resilience is a result of the Group's strategy, focusing on convenience and community-based shopping centres with affordable rents and a diversified tenant base.

Despite the Group's relatively resilient income position, there has been significant pressure on the Group's property valuations which is a feature consistent across the UK shopping centre industry. The impact has been most acute outside London with the Group's London asset values proving to be far more resilient given their location and the strength of demand experienced at these sites. This can be seen in the table below which sets out the change in valuations across the Group's portfolio in the first three quarters of 2019 compared to year-end in 2018. The Directors expect that this downward trend in property valuations is likely to continue in the short term given the macro-economic backdrop.

	30 December 2018		30 September 2019
	£m	NIY per cent.	£m	NIY per cent.
London
Exchange, Ilford	86.2	5.69 per cent.	82.3	5.64 per cent.
Mall Walthamstow	124.6	5.01 per cent.	127.0	4.68 per cent.
Mall Wood Green	238.3 —–––——	5.12 per cent. —–—––––——	218.8 —–––——	5.39 per cent. —–—––––——
	449.1	5.20 per cent.	428.1	5.24 per cent.
South East
Marlowes,Hemel Hempstead	44.9	7.35 per cent.	40.9	8.00 per cent.
Mall Luton	195.4	7.01 per cent.	160.0	7.75 per cent.
Mall Maidstone	69.0 —–––——	7.74 per cent. —–—––––——	60.9 —–––——	8.27 per cent. —–—––––——
	309.3	7.23 per cent.	261.8	7.91 per cent.
Regional
Mall Blackburn	96.8 —–––——	7.70 per cent. —–—––––——	74.5 —–––——	9.05 per cent. —–—––––——
Wholly-owned portfolio	855.2 –––———	6.23 per cent. —–––––———	764.4 –––———	6.54 per cent. —–––––———

Property portfolio valuation

As at 30 September 2019, the Group's property portfolio was valued at £764.4 million compared to £855.2 million as at 30 December 2018 representing a decline of 11 per cent. The Group is relatively heavily indebted given the capital-intensive nature of asset ownership and the capital expenditure programme required to maintain and improve centres through repositioning or remerchandising space. As at 30 June 2019, the Group had net debt of £413.1 million resulting in a net LTV ratio of 52 per cent. (compared to 48 per cent. as at 30 December 2018). The updated valuations as at 30 September 2019 and the Group's net debt position of £413.4 million as at 30 September 2019 results in a higher net LTV ratio at 54 per cent.. This has placed pressure on the Group's balance sheet and the ability to maintain at least the minimum level of dividends required to be paid under the UK REIT regime and to continue investing in capital expenditure.

Without an injection of new equity into the Group there is a risk that if property valuations continue to decline further then greater constraints will be imposed on the business such that it may be necessary to take actions to address leverage levels which may adversely impact the prospects of the Company over the medium to longer term. Such actions include postponing the dividend in the short term and potentially other actions in the medium to longer term such as reducing or postponing capital expenditure.

The Board believes that the Company's focus on the segment of the market where consumers prefer, or have, to shop physically, and where online retail economics are challenging, combined with the investment it is making into its portfolio, are showing positive results. This is demonstrated by the positive operating metrics achieved in the six months ended 30 June 2019, namely the relative outperformance in footfall and positive comparisons of new lettings to both ERV and the previous passing rent. The Board also believes that the continuation of this capital investment programme is key to maintaining the relevance and income potential of the Group's shopping centres.

The Company has a recent history of investing approximately £15 million to £20 million per annum on capital expenditure. This capital expenditure allows the Company to ensure its shopping centres remain relevant to their local communities and attract footfall, driving high occupancy and income generation. Capital expenditure is targeted on a range of projects. The largest project is the cinema development and surrounding food and leisure complex at Marlowes Hemel Hempstead where the cinema is expected to open in the summer of 2021 with a total remaining cost to complete of approximately £15 million. The table below includes a summary of the Company's key committed capital expenditure projects as well as the pipeline of uncommitted potential capital expenditure projects which the Company could undertake provided adequate funds are available (the Company has absolute discretion as to which projects are pursued in order to deliver the highest return on investment whilst having regard to cash resources and funding limits available to the Group). In the event the Proposed Transaction does not complete the Company would very likely curtail most elements of the capital expenditure pipeline to preserve balance sheet strength and ensure adequate funding headroom.

Committed key capital expenditure projects

Asset	Projects	H2 2019 (£m)	2020 (£m)	Estimated total spend (£m)
Maidstone	MSU Remerchandising	1.6	–	1.6
Hemel Hempstead	Cinema & F&B	1.6	13.5	15.1
Hemel Hempstead	Gym —–—––––——	1.0 —–—––––——	– —–—––––——	1.0 —–—––––——
Total	—–––––———	4.2 —–––––———	13.5 —–––––———	17.7 —–––––———

Uncommitted capital expenditure pipeline 2020-2022

		Estimated
		total project
Asset	Projects	cost (£m)
Ilford	MSU for Healthcare Trust	5.1
Ilford	Leisure/F&B/Cross rail Mall/Residential	18.9
Luton	Office Refurbishment	1.2
Maidstone	Grab & Go and Guest Amenities	4.5
Maidstone	Family & Ambience	0.9
Walthamstow	Food Court	2.0
Wood Green	Family Zone & Ambience	3.4
Wood Green	Food Court & Dining	1.5
Wood Green	Hotel Expansion	9.2
General	Strategic Asset Plans	0.5 —–—––––——
Total		47.2 —–––––———

Capital & Regional believes that the Proposed Transaction with Growthpoint provides a long-term strategic partner to support the Group's strategy with a significant amount of new equity committed to deleverage and strengthen the balance sheet such that it can further commit to its pipeline of capital expenditure projects with the target of enhancing future rental income and improving the Group's competitive positioning. The Directors believe that this equity injection will allow the Group to prosper despite difficult market conditions with a strengthened financial position that will allow the Group to continue to operate despite any potential future decline in asset valuations or potential CVAs or administration processes within its tenant base. The Share Subscription would provide a cash injection of approximately £77.9 million (before costs) at a significant premium to the undisturbed share price of 16.5 pence per Existing Ordinary Share for the three month period ending 10 September 2019 (being the last Business Day prior to the 2.4 Announcement).

The Directors believe that a successful conclusion of the Proposed Transaction will position it as a business with:

^l an appropriate capital structure;
^l a platform which will facilitate its experienced management team to take advantage of the market distress and therefore opportunity;
^l increased scale anchored by a majority shareholder who, as a successful global real estate investor, has a track record of making successful investments in other listed real estate companies in different geographies generating returns for not only its own shareholders but its shareholder partners in the residual listed business; and
^l appropriate corporate governance and a relationship agreement in place to ensure minority shareholders are protected.

As a result of the Share Subscription, the Company's net LTV will reduce given the net proceeds to be received of £72.6 million.

Irrespective of the Proposed Transaction, the Group is making positive inroads in relation to the realisation of returns from its residential schemes at the Mall Wood Green and the Mall Walthamstow. At the Mall Wood Green, the Group has conditionally exchanged contracts on the sale of non-core land to a residential developer for approximately £5 million, in line with the book value. Subject to satisfaction of the conditions, proceeds are expected to be realised around the end of 2019. At the Mall Walthamstow, the Group is at an advanced stage in the identification of a preferred development partner to fund fully and build out an approximately 450 unit apartment scheme that received planning consent in the second half of 2018. The process has demonstrated a strong depth of interest from both build-to-rent and develop-to-sell operators. The Group anticipates announcing a partner later this year enabling the potential to realise a significant capital receipt of approximately £20 million in 2020.

In considering the Proposed Transaction, the Board also took into account the currently limited demand for asset sales as evidenced by the fact that shopping centre transaction levels are at a near all-time low. The value and timing of any proposed asset sale would therefore be uncertain, with any outcome resulting in a reduction in the size of the business and likely reduction of the overall quality of the remaining portfolio. The Board is also fully cognisant that a very wide range of possible retailer and economic outcomes remain. With this in mind, it believes that proactive steps need to be taken at this time to insulate the Group against a worse than anticipated scenario thereby protecting shareholder value and providing a significant liquidity opportunity for Shareholders.

The Board therefore believes that the recommended Proposed Transaction will allow the Group to achieve the best outcome for Shareholders. The Proposed Transaction will allow the executive management team to continue to pursue a growth strategy by deploying capital expenditure to further improve the relevance and performance of its assets as well as improving balance sheet strength. Given the potential for further declines in property valuations and risk of future tenant CVAs or tenant administrations, it is important that the Company has a robust balance sheet with adequate level of headroom on its debt facilities and the Proposed Transaction provides this. The Board notes the uncertain UK economic backdrop and structural headwinds facing the retail industry and the Proposed Transaction provides the Company with a suitable capital structure under which its growth strategy can be pursued.

The Board believes that the capital expenditure programme is important to maintaining the Company's competitive position and growth prospects. In the event the Proposed Transaction was not approved by Shareholders, the Company would not benefit from the funds raised through the Share Subscription. In such a scenario, the Company would need to take various actions in the short term to preserve cash and provide adequate balance sheet flexibility for the medium to longer term given the potential for further declines in property valuations and risk of future tenant CVAs or administrations (all of which have an adverse impact on the Company's financial position and headroom on covenants). The main short term action would be a suspension of the Company's dividend for at least a period of 18 months which is expected to provide adequate headroom against bank facility covenants and working capital, whilst the Company continues to invest in capital expenditure. As announced in the Company's interim results on 11 September 2019 the Company's dividend policy was placed under review pending the outcome of the Proposed Transaction. Over the medium to longer term, should market conditions deteriorate further with further declines in property valuations, the Company is able to undertake additional actions to preserve cash and provide additional headroom on its banking covenants. These measures include scaling back the Company's capital expenditure programme. As referenced above, the Company has a recent history of investing approximately £15 million to £20 million per annum on capital expenditure and this would need to be reduced in such a scenario. It is difficult to quantify what level of reduction would be required in the medium to longer term as it would depend on market conditions and the Company's trading position at the time. In addition, the Company could undertake alternative actions to maximise funding headroom in the medium to longer term such as disposing of assets. These alternative actions would improve the strength of the Company's balance sheet and provide additional funding headroom but could have an adverse impact on the Company's competitive position and growth prospects over the medium to longer term. For the avoidance of doubt, nothing contained in the foregoing paragraph qualifies in any way the working capital statement contained in Part 8 of this document.

5. INFORMATION ON CAPITAL & REGIONAL

The Company is a UK focused retail property REIT specialising in shopping centres that serve the non-discretionary and value-orientated needs of their local communities, across a portfolio comprising seven properties with a total portfolio value of approximately £764.4 million. The principal activity of the Company is the generation of rental income and capital growth from its role as a property owner, operator and asset manager. The Company is listed on the main market of the London Stock Exchange and has a secondary listing on the JSE.

The Group owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. The Company manages these assets through its in-house expert property and asset management platform. The Company also owns Snozone, the largest indoor ski slope operator in the UK.

The principal activity of the Group is the generation of rental income and capital growth from its role as a property owner, operator and asset manager.

Further details on Capital & Regional are set out in Part 2, 3, 4 and 8 of this document.

6. INFORMATION ON GROWTHPOINT

Growthpoint is the largest primary listed South African REIT listed on the Main Board of the JSE. The Growthpoint Group has total property-related assets of approximately R139 billion (£7.7 billion) and a market capitalisation of R68.6 billion (£3.6 billion). Growthpoint owns and operates a diversified portfolio of retail, office and industrial assets in South Africa covering 5.4 million square metres (58 million square feet). Growthpoint also owns a 50 per cent. share of the iconic V&A Waterfront mixed-use property in Cape Town which consists of approximately 480,000 square metres (5.2 million square feet) of developed bulk on a single site measuring 123 hectares (304 acres). In addition to South Africa, Growthpoint has made significant investments in Australia and Eastern Europe.

Growthpoint's international investment philosophy is to invest into existing property platforms, where it backs existing management teams and provides them with ongoing access to capital to pursue growth opportunities, strategic insight and planning, governance and controls, financial discipline and a range of other disciplines including investment analysis and evaluation. As a fundamental principle to this approach, Growthpoint seeks a meaningful stake in its investments.

Growthpoint owns 62.2 per cent. of Growthpoint Properties Australia Limited ("GOZ"), which is separately listed on the Australian Stock Exchange ("ASX") and has a portfolio of 57 office and industrial assets valued at A\$4.0 billion (£2.2 billion) with a combined gross lettable area of 1.0 million square metres (11.0 million square feet). GOZ has a market capitalisation of A\$3.3 billion (£1.7 billion). By providing financial and management support to the company over the past ten years (approximately A\$1.1 billion or £600 million in total has been invested), Growthpoint has enabled GOZ to become one of the largest REITs listed on the ASX. GOZ has grown its total assets from A\$775 million to A\$4.2 billion over the last 10 years and now ranks as an ASX Top 200 company. Growthpoint is represented by three directors on the board of GOZ, which governance practices comply with the Australian Corporations Act, 2001, the ASX Listings Rules and ASX Corporate Governance Council Corporate Governance Principles and Recommendation.

Growthpoint also has a 29.3 per cent. interest in Globalworth Real Estate Investments Limited ("GWI"), a company listed on the Alternative Investment Market of the London Stock Exchange. GWI owns a 1.2 million square metres (12.8 million square feet) portfolio of 60 properties in Poland and Romania comprising mainly office assets with a combined value of €2.86 billion (£2.6 billion) and has a market capitalisation of £1.7 billion. When Growthpoint initially invested in GWI, GWI had assets only in Romania. Today, GWI is the largest office landlord in Poland in addition to its leading position in Romania.

7. CURRENT TRADING, TRENDS AND PROSPECTS

The Company reported its interim results for the six months ended 30 June 2019 on 11 September 2019. Copies of the announcement and investor presentation can be found at www.capreg.com.

The Company reported a robust set of operational results in its half year results despite the challenges faced across the retail industry and, in particular, the impact of CVAs and retailer administrations witnessed across the portfolio in the period. Despite these headwinds, the Company's income position was robust with like-for-like Net Rental Income down 3.1 per cent. at £25.2 million (H1 2018: £26.0 million) and contracted rent at £61.1 million down 1.9 per cent. (H1 2018: £62.3 million) with new letting activity partially offsetting the impact of CVAs and administrations. Despite the difficult market backdrop the Company demonstrated good levels of lettings and renewals activity in the period. There were 44 new lettings and renewals in the period totalling £3.1 million at a combined average premium of 31.2 per cent. to previous passing rent and 6.9 per cent. to ERV (for lettings and renewals (excluding development deals and CVA variations) with a term of 5 years or longer which do not include turnover rent or service charge restrictions). Examples of new lettings include Vodafone at the Mall Blackburn and Empire Cinema and Pure Gym at Marlowes Hemel Hempstead. Examples of renewals include Sports Direct and Tesco at the Mall Luton, TUI at the Mall Blackburn and Marlowes Hemel Hempstead and Claire's Accessories at the Mall Walthamstow.

Adjusted Profit was down 4.5 per cent. to £14.8 million (H1 2018: £15.5 million) given the impact of CVAs and administrations offset by positive leasing activity and a small improvement in net operating costs. Footfall significantly outperformed the national index with the Company's three London centres increasing by 0.6 per cent. There were 37.2 million visits across the wider portfolio in the period, reflecting a decline of 1.8 per cent., but substantially ahead of the national index, which was down by 3.6 per cent. Occupancy remained high at 96.8 per cent. (H1 2018: 96.9 per cent.)

Four CVAs impacted the Company in the period being Debenhams, Arcadia, Monsoon/Accesorize and Select. The largest single impact was that of the Debenhams CVA which is expected to result in a reduction of approximately £0.7 million to NRI in the second half of the year and £1.3 million on an annualised basis (all three Debenhams units remain trading). The total expected impact on 2019 NRI of all of the CVAs and administrations to date is £1.3 million, of which the majority (£1.1 million) will be borne in the second half of the year, or £2.3 million on an annualised basis.

As explained in paragraph 4 of this Part 1, there has been a significant re-pricing of assets in the retail property industry due to investors' concerns around the sustainability and risks to income in light of the structural changes in retailing, which continue to impact the investment market and have resulted in an absence of transactional evidence and general negative sentiment. As such, the Company's property portfolio decreased in value from £855 million as at 30 December 2018 to £797.3 million as at 30 June 2019, a 6.8 per cent. decline, with an overall increase in net initial yield from 6.23 per cent. to 6.34 per cent. Net of capital expenditure in the period of £5.9 million (including tenant incentives) there was an overall revaluation loss on wholly-owned assets of £63.0 million. Yields on the Group's London assets were broadly flat, reflecting progress on residential options and other alternative uses. Valuations on the Group's regional assets saw declines largely reflecting outward market yield shift and the loss of income, most prominently Debenhams, through CVAs or retailer restructurings. As a result of valuation movements, NAV per share fell overall by 13 pence from 60 pence as at 30 December 2018 to 51 pence as at 30 June 2019.

Below is a summary of the Group's key financial performance indicators for the financial year ended 30 December 2018 and interim periods ended 30 June 2019 and 30 June 2018.

	2018	H1 2019	H1 2018
NRI1	£51.9m	£25.2m	£26.0m
Adjusted Profit2	£30.5m	£14.8m	£15.5m
Adjusted Earnings per share3	4.23p	2.04p	2.15p
IFRS (Loss)/Profit for 2018	(£25.6)m	£(55.4)m	£6.7m
NAV per share	60p	51p	66p
EPRA NAV per share	59p	52p	65p
Group net debt	£411.1m	£413.1m	£406.4m
Net debt to property value	48 %	52 %	46 %

Notes:

(1) NRI is the Group's share of the rental income, less property and management costs (excluding performance fees) of the Group.

(2) Adjusted Profit is the total contribution from wholly-owned assets and the Group's joint ventures and associates, the profit from Snozone and property management fees less central costs (including interest but excluding non-cash charges in respect of share based payments) after tax. Adjusted Profit excludes revaluation of properties, profit or loss on disposal of properties or investments, gains or losses on financial instruments and exceptional and/or one-off items. Results from discontinued operations are included up until the point of disposal or reclassification as held for sale.

(3) Adjusted Earnings per share is Adjusted Profit divided by the weighted average number of shares in issue during the year excluding own shares held.

Trading since 30 June 2019

Footfall for the nine months to 30 September 2019, excluding Walthamstow from the date of the fire, declined 2.6 per cent.. The national index was down 4.3 per cent.. In the nine months to 30 September there were a total of 57 new lettings and renewals in the period totalling £3.9 million at a combined average premium of 26.9 per cent. to previous passing rent and 5.1 per cent. to ERV (for lettings and renewals (excluding development deals and CVA variations) with a term of 5 years or longer which do not include turnover rent or service charge restrictions).

Property valuations at 30 September 2019 were £764.4 million, representing a decline of £32.9 million or 4.1 per cent. from 30 June 2019 with an overall increase in net initial yield from 6.34 per cent. to 6.54 per cent. On a rolled forward basis as at 30 September 2019 this would reduce NAV per share to 47 pence and increase the Group's net LTV ratio to 54 per cent..

8. USE OF PROCEEDS OF THE SHARE SUBSCRIPTION

The Company has undertaken various initiatives to strengthen its balance sheet and provide additional funding headroom given the recent fall in valuations, due primarily to the impact of CVAs and retailer administrations and market yield shift, which has increased net LTV to 52 per cent. as at 30 June 2019 (and 54 per cent. as at 30 September 2019). These initiatives include:

^l Conditional disposal of non-core land at the Mall Wood Green for £5 million with cash receipt subject to satisfaction of conditions expected around the end of 2019; and
^l Progress made with the residential scheme at the Mall Walthamstow (subject to planning and targeting a £20 million cash receipt in 2020).

Despite these initiatives, the Company's balance sheet remains under significant pressure at a time when market conditions remain volatile and there is risk that valuations may fall further and additional tenants may enter into CVA's or administration which would adversely impact the Company. In addition, as described above the Company's strategy requires a significant level of ongoing capital expenditure in order to deliver successfully the repositioning of its centres and drive shareholder returns which, given the market backdrop and the Company's current capital structure, cannot be pursued.

The Share Subscription will deliver proceeds of approximately £77.9 million (before costs) and net proceeds of approximately £72.6 million to the Company. The Company has agreed pursuant to the Subscription Agreement to apply a minimum of £50 million to reduce and/or restructure the Group's existing debt arrangements and to apply the balance to assist in funding the Group's capital expenditure. The Company has a pipeline of a variety of different capital expenditure projects totalling over £60 million. These include the potential introduction and/or enhancement of food courts and grab and go dining areas, the refurbishment of currently vacant office space and the repurposing of current major units into leisure, residential or other alternative uses.

Approximately £5.3 million of the proceeds from the Share Subscription will be used to pay fees and expenses incurred in connection with the Share Subscription and the Partial Offer.

9. EFFECTS OF IMPLEMENTATION OF THE PARTIAL OFFER AND SHARE SUBSCRIPTION

9.1 Dilutionary impact of the Partial Offer

Upon completion of the Partial Offer, participating Shareholders will suffer an immediate dilution as a result of the Partial Offer of approximately 30.2 per cent. The Partial Offer is subject to the condition that Growthpoint (or its Nominee(s)) ultimately acquires 51.1 per cent. of the issued share capital of Capital & Regional. If the Partial Offer becomes effective, Growthpoint (or its Nominee(s)) will hold approximately 51.1 per cent. of the Company's enlarged issued share capital.

9.2 Dilutionary impact of the Share Subscription

Upon completion of the Share Subscription, Shareholders will suffer an immediate dilution as a result of the issue of the New Shares of approximately 15.1 per cent. Upon Admission, and assuming the passing of the Transaction Resolutions, the enlarged share capital is expected to be 1,038,840,375 Ordinary Shares. On this basis, New Shares issued pursuant to the Share Subscription will represent 30 per cent. of the enlarged share capital. The effect of the issue of the New Shares will be that the Shareholders at the date of this document will own 48.9 per cent. of the enlarged share capital following Admission. If the Share Subscription becomes effective, Growthpoint (or its Nominee(s)) will hold approximately 51.1 per cent. of the Company's enlarged issued share capital.

As a result, upon completion of the Partial Offer and Share Subscription, assuming that Shareholders participate in the Partial Offer up to their pro-rata entitlement, Shareholders will suffer an immediate dilution to 48.9 per cent.

9.3 Growthpoint will become a controlling shareholder

In the event that the Partial Offer becomes, or is declared, unconditional in all respects and the Share Subscription is completed, Growthpoint (or its Nominee(s)) will hold Ordinary Shares carrying more than 50 per cent. of the voting rights of Capital & Regional and therefore will hold a controlling interest in the Company.

10. RELATIONSHIP AGREEMENT WITH GROWTHPOINT

On 17 October 2019, the Company and Growthpoint entered into the Relationship Agreement which is conditional on and will become effective upon Admission. The Relationship Agreement incorporates those terms required by the Listing Rules as a result of Growthpoint becoming a controlling shareholder of Capital & Regional (that is the holder of 30 per cent. of more of the Ordinary Shares). The Relationship Agreement regulates the parties' relationship on an ongoing basis following completion of the Proposed Transaction. The principal purpose of the Relationship Agreement is to ensure that, for so long as Growthpoint and any of its Nominee(s) hold at least 20 per cent. of the voting rights in the Company, Capital & Regional can carry on as an independent business as its main activity. The Relationship Agreement contains, among others, undertakings from Growthpoint, on behalf of itself and its associates, that: (i) transactions and arrangements with it (and/or any of its associates) will be conducted at arm's length and on normal commercial terms; (ii) neither it nor any of its associates will take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules, and (iii) neither it nor any of its associates will propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules.

Growthpoint will be able to appoint two directors to the Board for so long as it (together with its associates) holds at least 20 per cent. or more of the voting rights in the Company and will be able to appoint one director to the Board for so long as it (together with its associates) holds at least 15 per cent. but less than 20 per cent. of the voting rights in the Company.

For as long as Growthpoint (together with its associates) is entitled to exercise at least 15 per cent. of the voting rights in the Company, Growthpoint (or its associates) shall have a right in priority: (i) to underwrite any rights issue or other pre-emptive offer to Shareholders; (ii) to participate pro rata in any vendor placement by the Company in connection with an acquisition by the Company; (iii) to participate pro rata in any placing of shares by the Company provided that, in the case of (ii) or (iii), where shares would otherwise remain unallocated in any such placing, Growthpoint shall have the right ("Placing Right") to be the placee for the balance of such placing to the extent that its percentage of the total voting rights of the Company would otherwise fall below 55 per cent. immediately following such placing, but in such circumstances it will consider requests from other shareholders who wish to take up more than their pro rata entitlement. Any offer made by Growthpoint (or its associates) to underwrite any rights issue or other pre-emptive offer or to exercise any Placing Right must be on terms at least comparable with those available to the Company from a third party.

For a period of 9 months from Admission and subject to certain limited exceptions, Growthpoint (together with its associates) shall not dispose of any Ordinary Shares without the prior written consent of a majority of the Directors (other than the director(s) appointed by Growthpoint), and for a further period of 9 months and subject to JPMC or Numis being able to find a purchaser on best execution terms, Growthpoint (together with is associates) will effect any sale through JPMC or Numis with a view to maintaining an orderly market in the Ordinary Shares.

The Relationship Agreement will continue for so long as (a) Growthpoint and its associates hold an interest, whether held directly or indirectly, in 15 per cent. or more of the voting rights in Capital & Regional; and (b) the Ordinary Shares are admitted to trading on the London Stock Exchange's main market for listed securities.

The Directors believe that the terms of the Relationship Agreement will enable the Group to carry on its business independently of Growthpoint.

11. RELATIONSHIP AGREEMENT WITH THE LN GROUP

The Company and Homestead (an associate of Louis Norval, a non-executive director of the Company) are parties to a relationship agreement, to regulate the relationship between the Company, Homestead and the Parkdev Parties (a group of entities associated with Louis Norval). The Parkdev Relationship Agreement provides Parkdev Parties with a right to nominate up to two non-executive directors to the Board. The Parkdev Relationship Agreement also contains an obligation on the Company in the event of an issue of Ordinary Shares or other offer, or other corporate action affecting Shareholders generally, to enable each of the Parkdev Parties to participate pro rata to its shareholding in the Company. The Parkdev Relationship Agreement contains an undertaking from the Company not to solicit or recommend any partial tender offer, or to undertake any buyback of Ordinary Shares without the consent of Parkdev Parties, except in certain circumstances. In connection with the Proposed Transaction, Homestead has entered into a waiver letter pursuant to which Homestead, on behalf of the Parkdev Parties, agreed to waive their rights of pre-emption under the Parkdev Relationship Agreement.

In connection with the Proposed Transaction, Homestead has entered into a new relationship agreement, to take effect from completion of the Proposed Transaction. The Homestead Relationship Agreement will supersede the Parkdev Relationship Agreement and will provide that, for so long as the LN Group are associates of Louis Norval (or, in the event of the death of Louis Norval, any of his lineal descendants) and have an aggregate interest of at least 6 per cent. of the issued share capital of the Company from time to time:

^l Homestead will retain its right to appoint a director to the Board; and
^l each member of the LN Group shall be offered the opportunity to participate pro rata to its shareholding in connection with any future capital fundraisings.

Growthpoint has given its consent to the Homestead Relationship Agreement.

12. ADMISSION TO TRADING OF NEW SHARES

Subject to the Partial Offer becoming unconditional as to acceptances and Shareholder approval of the Transaction Resolutions, application will be made to: (i) the Financial Conduct Authority for the New Shares to be admitted to listing on the premium segment of the Official List and an application will be made to the London Stock Exchange for the New Shares to be admitted to trading on the Main Market; and (ii) the JSE for the New Shares to be listed and traded on the Main Board of the JSE.

It is expected that (assuming, inter alia, the Partial Offer has become unconditional as to acceptances on the First Closing Date) Admission of the New Shares would become effective and dealings would commence by 8.00 a.m. (London time) on 9 December 2019 and 9.00 a.m. (South African time) on 9 December 2019 whereupon an announcement will be made by the Company through a RIS and on SENS.

The New Shares will be issued by Capital & Regional to Growthpoint free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after Admission other than the Interim Dividend.

Following completion of the Proposed Transaction, the Company intends to maintain its listing on the premium listing segment of the Official List and trading on the London Stock Exchange's main market for listed securities and admission to listing and trading on the Main Board of the JSE.

13. FINANCIAL IMPACT OF THE SHARE SUBSCRIPTION

On a pro forma basis and assuming that the net proceeds from the Share Subscription received by the Company were £72.6 million, the Group would have had net assets of £446.3 million at that date (based on the net assets of the Group as at 30 June 2019), as extracted from the unaudited pro forma statements of the net assets of the Group at Part 6 of this document.

14. MANAGEMENT OF THE GROUP

Following completion of the Proposed Transaction, Capital & Regional will remain an independent public company. Growthpoint will have the right under the Relationship Agreement, amongst other things, to appoint: (i) two directors to the Board for so long as it holds, directly or indirectly, 20 per cent. or more of the voting rights of the Company; and (ii) one director to the Board for so long as it holds, directly or indirectly, 15 per cent. or more, but less than 20 per cent., of the issued voting rights of the Company.

Growthpoint proposes to appoint Norbert Sasse and George Muchanya as its appointed directors. Wessel Hamman shall step down. These Board changes are due to take effect from Admission.

Following completion of the Proposed Transaction, the Board would comprise:

^l Lawrence Hutchings (Chief Executive)
^l Stuart Wetherly (Group Finance Director)
^l Hugh Scott-Barrett (Chairman)
^l Tony Hales (Non-Executive Director)
^l Ian Krieger (Non-Executive Director)
^l George Muchanya (Non-Executive Director)
^l Louis Norval (Non-Executive Director)
^l Norbert Sasse (Non-Executive Director)
^l Laura Whyte (Non-Executive Director)

The Board strives to adhere to the highest standards of corporate governance in-line with the requirements of the UK Corporate Governance Code. Mindful of the Code requirements regarding independence it is intended that two new independent non-executive directors are appointed to the Board in the next six to twelve months.

15. DIVIDEND POLICY

Subject to the Proposed Transaction becoming unconditional, the Company intends to pay an interim dividend of 1p per Existing Ordinary Share to Shareholders in relation to the half-year ended 30 June 2019. This dividend will only be paid as per the timetable below if the Proposed Transaction completes in accordance with the indicative timetable set out in this document:

Ex-dividend on the JSE	27 November 2019
Ex-dividend on the LSE	28 November 2019
Record date	29 November 2019
Payment date	27 December 2019

The New Shares will not be entitled to receive the Interim Dividend. However, the New Shares, when issued and fully paid, will rank equally in all respects with the Existing Ordinary Shares, for all other dividends or distributions made, paid or declared, if any, by reference to a record date after the date of their issue or otherwise pari passu in all respects with the Existing Ordinary Shares.

Following the Interim Dividend, the Company intends to target a sustainable dividend pay-out ratio and has agreed with Growthpoint, to distribute on a semi-annual basis (in approximate proportions of 45/55 and in that order in respect of each financial year) not less than approximately 90 per cent. of the Company's EPRA earnings, in line with the Company's requirements to distribute at least 90 per cent. of its taxable profits under the REIT regime. Notwithstanding this intention, there can be no guarantee of the level of future dividends to be paid, if any.

In the event the Proposed Transaction does not complete, as explained in paragraph 19 of this Part 1, the Company would suspend the payment of dividends for at least the next 18 months (this would result in no interim dividend for the half-year period ended 30 June 2019). As a UK REIT the Company is required to distribute 90 per cent. of the income profits arising from its property rental business, after certain tax adjustments including for capital allowances and any interest restrictions. These profits are distributed as a Property Income Dividend (PID). A suspension of the PID would breach the rules of the UK REIT regime and as a result the Company would be liable to pay UK corporation tax on the amount of income that the Company should have distributed under the UK REIT rules but failed to distribute. The Company has obtained confirmation from HMRC that should the PID not be paid in the short term then the Company would not lose its status as a REIT in the UK REIT regime but would be subject to UK corporation tax as summarised above.

16. WHITEWASH

Under Rule 9 of the Takeover Code, where any person acquires, whether by a single transaction or a series of transactions over a period of time, an interest (as defined in the Takeover Code) in shares which (taken together with shares in which persons acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code, that person is normally required by the Panel to make a general offer, in cash (or with a cash alternative), to all remaining shareholders to acquire their shares. An offer under Rule 9 of the Takeover Code must be made at a price not less than the highest price paid for the Ordinary Shares in the Company by the acquirer or its concert parties during the previous 12 months.

As at the date of this document, Growthpoint does not hold any Ordinary Shares (although some persons acting in concert with Growthpoint have a small interest in Capital & Regional as detailed in the Offer Document). Following completion of the Proposed Transaction, Growthpoint (or its Nominee(s)) will hold 51.1 per cent. of the issued share capital of Capital & Regional. Consequently, under Rule 9 of the Takeover Code, Growthpoint would ordinarily be required to make an offer to the Shareholders to acquire their remaining Existing Ordinary Shares (meaning those Existing Ordinary Shares which they have not tendered through the Partial Offer). The Panel has agreed to waive the requirement for Growthpoint to make a general offer under Rule 9 of the Takeover Code in cash for the Existing Ordinary Shares which might otherwise arise as a result of the Proposed Transaction, subject to the Partial Offer and Rule 9 Waiver Resolution (as set out in the Notice of General Meeting), being passed on a poll of the Independent Shareholders (meaning the Shareholders who are independent of Growthpoint and persons acting in concert with it, and excluding Norbert Sasse, Estienne de Klerk, Lynette Finlay and Frank Berkeley and each of their associates). To be passed the Partial Offer and Rule 9 Waiver Resolution will require approval of more than 50 per cent. of the voting rights in the Company held by Independent Shareholders. Norbert Sasse, Estienne de Klerk, Lynette Finlay and Frank Berkeley have all agreed not to vote on the Partial Offer and Rule 9 Waiver Resolution.

Other than the irrevocable undertakings given by the Directors as set out in paragraph 24 and 25 of this Part 1, there are no relationships (personal, financial or commercial), arrangements or undertakings between Growthpoint (or its Nominee(s)) and any of the Directors having any connection with or dependence upon the Proposed Transaction. Growthpoint has confirmed that they have no agreement, arrangement or understanding with any other persons to transfer any Ordinary Shares acquired in connection with the Proposed Transaction.

From Admission, since Growthpoint (or its Nominee(s)) will hold 51.1 per cent of the issued share capital of Capital & Regional no obligations under Rule 9 of the Takeover Code would normally arise from acquisitions by Growthpoint (or its Nominee(s)) or any persons acting in concert with it. They may accordingly increase their aggregate interests in Ordinary Shares (subject to Rule 36.3 of the Takeover Code) without incurring any obligation under Rule 9 of the Takeover Code to make a general offer, although individual members of a concert party will not be able to increase their percentage interests in shares through or between a Rule 9 of the Takeover Code threshold without Panel consent.

In the event the Partial Offer and Rule 9 Waiver Resolution is passed by Independent Shareholders at the General Meeting, Growthpoint will not be restricted from making an offer, save for the restrictions under Rule 36.3 of the Takeover Code.

17. SHARE CONSOLIDATION

The Directors have concluded that, given the number of Ordinary Shares that will be in issue following completion of the Proposed Transaction (being 1,038,840,375 Ordinary Shares of 1 pence each), the issued share capital should be consolidated on the basis of 10 Ordinary Shares of 1 pence each for one new ordinary share of 10 pence (a "Consolidated Ordinary Share"), by reference to the Ordinary Shares in issue on the date falling on or around the Record Time. Any fractional entitlements arising on the Consolidation will be aggregated and sold in the market for the best price reasonably obtainable and the net proceeds will be distributed to Shareholders entitled to such sums, save that the Company shall be entitled to retain the net proceeds of the sale representing such fractions where the individual amount of the net proceeds to which a Shareholder is entitled is less than five pounds (£5).

Shareholder approval is required for the Consolidation and an ordinary resolution to approve the Consolidation is included in the Notice of General Meeting. The resolution is conditional upon Admission occurring and will become effective if the Proposed Transaction becomes unconditional and completes. It is expected that the Record Time for the Consolidation will be 6.00 p.m. on 14 January 2020 in the case of Shareholders on the UK share register, and close of business on 17 January 2020 in the case of Shareholders on the SA share register.

The Proposed Transaction is not, however, conditional on the Consolidation being approved by the Shareholders.

If the Resolutions are passed by the Shareholders, the Company will, prior to the Record Time, issue such number of additional Ordinary Shares to the ESOT as will result in the total number of Ordinary Shares in issue being exactly divisible by 10. Assuming no other Ordinary Shares are issued before the Record Time, this will result in 5 additional Ordinary Shares being issued.

Shareholders that hold their Existing Ordinary Shares in certificated form will be issued with new certificates in the respect of the new Consolidated Ordinary Shares. It is anticipated that new share certificates will be despatched to Shareholders within 14 days of the Record Time.

Shareholders who hold their Existing Ordinary Shares in uncertificated form will have their CREST accounts credited with the new Ordinary Shares as soon as practicable following the record date for the Consolidation as described above.

18. GENERAL MEETING

You will find set out at the end of this document a Notice of General Meeting convening a General Meeting to be held on 26 November 2019 at 9.00 a.m. at 110 Rochester Row, Westminster, London, SW1P 1JQ. The full text of the Notice of General Meeting is set out in Part 11 of this document.

At the General Meeting, the following Resolutions will be proposed:

^l an ordinary resolution (requiring approval of more than 50 per cent. of the votes cast in person or by proxy in respect of the resolution) to grant the Directors authority pursuant to section 551 of the Companies Act to allot Ordinary Shares generally and in connection with the Share Subscription;
^l a special resolution (requiring approval of 75 per cent. of the votes cast in person or by proxy in respect of the resolution) to disapply where relevant statutory pre-emption rights set out in section 561 of the Companies Act;
^l a resolution (requiring approval of more than 50 per cent. of the voting rights held by Independent Shareholders to be taken by way of a poll) to approve the Partial Offer and the waiver of any obligation on Growthpoint which may arise under Rule 9 of the Takeover Code as a result of the Proposed Transaction; and
^l an ordinary resolution (requiring approval of more than 50 per cent. of the votes cast in person or by proxy in respect of the resolution) which is conditional on Admission, to approve the consolidation of the enlarged share capital of Capital & Regional as described in paragraph 17 of this Part 1.

The Share Subscription will not proceed unless each of the Transaction Resolutions is passed by the requisite majority. The Partial Offer is also conditional on the passing of the Transaction Resolutions.

The Consolidation Resolution is not a condition to completing the Proposed Transaction. The Consolidation Resolution is, however, conditional on the completion of the Proposed Transaction and Admission occurring.

19. IMPORTANCE OF VOTE

If the Transaction Resolutions are not passed, the Company would not benefit from the funds raised through the Share Subscription. In such a scenario the Company would need to take various actions in the short term to preserve cash and provide adequate balance sheet flexibility over the medium to longer term given the potential for further declines in property valuations and risk of future tenant CVAs or administrations (all of which have an adverse impact on the Company's financial position and headroom on covenants). The main short term action would be a suspension of the Company's dividend for at least a period of 18 months which is expected to provide adequate headroom against bank facility covenants and working capital whilst the Company continues to invest in capital expenditure as part of the Company's strategy. As announced in the Company's interim results on 11 September 2019 the Company's dividend policy was placed under review pending the outcome of the Proposed Transaction and the Board confirms that the dividend can be suspended under its dividend policy. Over the medium to longer term, should market conditions deteriorate further with further declines in property valuations, the Company is able to undertake additional actions to preserve cash and provide additional headroom on its banking covenants. These measures include scaling back the Company's capital expenditure programme. The Company has a recent history of investing approximately £15 million to £20 million per annum on capital expenditure and this would need to be reduced in such a scenario. It is difficult to quantify what level of reduction would be required in the medium to longer term as it would depend on market conditions and the Company's trading position at the time. In addition, the Company could undertake alternative actions to maximise funding headroom in the medium to longer-term such as disposing of assets. These alternative actions would improve the strength of the Company's balance sheet and provide additional funding headroom but would have an adverse impact on the Company's competitive position and growth prospects over the medium to longer-term. For the avoidance of doubt, nothing contained in the foregoing paragraph qualifies in any way the working capital statement contained in Part 8 of this document.

Accordingly, it is therefore very important that Shareholders vote in favour of the Transaction Resolutions so that the Share Subscription can be completed.

20. ACTION TO BE TAKEN IN RESPECT OF THE GENERAL MEETING

You will find enclosed with this document a Form of Proxy for use at the General Meeting (or any adjournment thereof) by Shareholders on the UK share register and by Shareholders on the SA share register (as applicable).

Shareholders on the UK share register

Whether or not you intend to attend the General Meeting, you should ensure that your Form of Proxy is returned to the Equiniti, by one of the following means:

^l in hard copy form by post, by courier or by hand to, Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA; or
^l in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out in the notes to the notice of the General Meeting.

In each case, the Form of Proxy must be received by the Company not less than 48 hours before the time of the General Meeting. In calculating such 48 hour period, no account shall be taken of any part of a day that is not a Business Day. To be valid, the relevant Form of Proxy should be completed in accordance with the instructions accompanying it and lodged with Equiniti by the relevant time.

Completion and return of the Form of Proxy will not affect a Shareholder's right to attend, speak and vote at the General Meeting.

Shareholders on the SA share register

If you hold your Ordinary Shares in uncertificated form on the SA share register and do not have "own name" registration you should not complete the Form of Proxy. In order to vote at or attend the General Meeting you should be in contact with your CSDP or broker. If you have not been contacted by your CSDP or broker, it is advisable for you to contact your CSDP or broker immediately and furnish your CSDP or broker with your voting instructions in the manner and by the cut-off time stipulated by your CSDP or broker in terms of the custody agreement between you and your CSDP or broker.

If your CSDP or broker does not obtain voting instructions from you, your CSDP or broker will be obliged to act in accordance with the instructions contained in the custody agreement between you and your CSDP or broker.

Should you wish to attend, speak and vote, or to send a proxy to represent you at the General Meeting, you must, in accordance with the custody agreement between you and your CSDP or broker, advise your CSDP or broker. Your CSDP or broker should then issue the necessary letter of representation to you for you or your proxy to attend, speak and vote at the General Meeting.

If you have not dematerialised your Ordinary Shares, or if you have "own name" registration Dematerialised Shares you may attend the General Meeting in person.

Alternatively, you will find enclosed with this document a Form of Proxy which you are asked to complete in accordance with the instructions printed thereon and return as soon as possible, but in any event so as to be received by the SA Transfer Secretaries at least 48 hours prior to the General Meeting. In calculating such 48 hour period, no account shall be taken of any part of a day that is not a Business Day. However, the Form of Proxy for the General Meeting cannot be handed to the chairperson of the General Meeting and will be invalid if it is received after the time mentioned above. The return of a completed Form of Proxy will not prevent Shareholders from attending the General Meeting and voting in person if they so wish and if they are entitled to do so.

Shareholders on the SA share register who wish to be assisted in completing or forwarding their Forms of Proxy in accordance with the above instructions should contact the SA Transfer Secretaries as soon as possible and those who wish to revoke or replace their Forms of Proxy should contact the SA Transfer Secretaries at 13th Floor, 19 Ameshoff Street, Braamfontein, 2001 (PO Box 4844, Johannesburg, 2000, South Africa) or email to [email protected].

21. OVERSEAS SHAREHOLDERS

The attention of Overseas Shareholders is drawn to the information which appears on page 24 of this document. This document does not constitute an offer to sell or the solicitation of an offer to purchase securities in any jurisdiction in which it may be unlawful to do so, and, in those circumstances, this document must be treated as sent for information only and should not be copied or redistributed.

Any Overseas Shareholders should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to receive this document.

This document has been prepared to comply with English law, the Listing Rules and the Prospectus Regulation Rules, and the information disclosed may not be the same as that which could have been disclosed if this document had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

22. TAXATION

Information regarding taxation in the UK in relation to the Ordinary Shares is set out in of Part 7 of this document. Shareholders who are in any doubt as to their tax position, or who are subject to tax in any other jurisdiction, should consult their appropriate professional adviser as soon as possible.

Information regarding taxation in South Africa in relation to the Ordinary Shares is set out in Part 7 of this document. Shareholders who are in any doubt as to their tax position, or who are subject to tax in any other jurisdiction, should consult their appropriate professional adviser as soon as possible.

23. RISKS FACTORS AND ADDITIONAL INFORMATION

Your attention is drawn to the risk factors set out on pages 12 to 22 of this document which are important and which should be read in full.

Shareholders are advised to read the whole of the document and not rely only on the summary information presented in this Part 1.

24. IRREVOCABLE UNDERTAKINGS TO ACCEPT THE PARTIAL OFFER

As at the date of this document, Growthpoint has received irrevocable undertakings to accept the Partial Offer in respect of 128,689,438 Existing Ordinary Shares representing 17.7 per cent. of the issued share capital of the Company as at 6 November 2019 (being the latest practicable date prior to the publication of this document) and 58.6 per cent. of the Existing Ordinary Shares subject to the Partial Offer.

The Directors (excluding Wessel Hamman who holds no Existing Ordinary Shares but including the irrevocable undertakings given by Mstead Limited and PDI Investment Holdings Limited being associates of Louis Norval) have entered into irrevocable undertakings to accept (or procure the acceptance of) the Partial Offer in respect of an aggregate of up to 62,403,412 Existing Ordinary Shares (which represents 44.6 per cent. of their respective holdings and, in aggregate, 28.4 per cent. of the aggregate number of Existing Ordinary Shares which are subject to the Partial Offer).

Whilst the irrevocable undertakings given by Mstead Limited and PDI Investment Holdings Limited are in respect of more than the approximately 30.2 per cent. interest which Growthpoint is seeking to acquire pursuant to the Partial Offer, Growthpoint will only acquire Existing Ordinary Shares in excess of approximately 30.2 per cent. from Mstead Limited and PDI Investment Holdings Limited to the extent necessary to ensure the acceptance condition is met. If acceptances are received from Shareholders in excess of the approximately 30.2 per cent. required, then Mstead Limited and PDI Investment Holdings Limited will have their acceptances scaled back in accordance with the terms of the Partial Offer as set out in the Offer Document.

The Peens Family Holdings have entered into irrevocable undertakings to accept (or procure the acceptance of) the Partial Offer at the Offer Price in respect of 32,004,870 Existing Ordinary Shares which represent 54.2 per cent. of their holdings and 14.6 per cent. of the aggregate number of Existing Ordinary Shares which are subject to the Partial Offer. Whilst the irrevocable undertakings given by the Peens Family Holdings are in respect of more than the approximately 30.2 per cent. interest which Growthpoint is seeking to acquire pursuant to the Partial Offer, Growthpoint will only acquire shares in excess of approximately 30.2 per cent. from the Peens Family Holdings to the extent necessary to ensure the acceptance condition is met. If acceptances are received from Shareholders in excess of the approximately 30.2 per cent. required, then the Peens Family Holdings will have their acceptances scaled back in accordance with the terms of the Partial Offer as set out in the Offer Document.

In addition, each of New Fortress Finance Holdings Limited, Premier Fund Managers Limited, Thames River Capital LLP and Stabilis Investments Holdings Limited (an entity which has certain rights under the Parkdev Relationship Agreement) has entered into an irrevocable undertaking to accept (or procure the acceptance of) the Partial Offer at the Offer Price in respect of 34,281,156 Existing Ordinary Shares which represent, in aggregate, approximately 33.7 per cent. of their respective holdings and approximately 15.6 per cent. of the aggregate number of Existing Ordinary Shares which are subject to the Partial Offer.

Growthpoint has also received a letter of intent from Henderson Global Investors Limited to accept (or procure the acceptance of) the Partial Offer at the Offer Price in respect of 8,372,293 Existing Ordinary Shares which represents approximately 30.3 per cent. of its holding and 3.8 per cent. of the aggregate number of Existing Ordinary Shares which are subject to the Partial Offer.

A letter of intent has also been received from Allan Gray Proprietary Limited ("Allan Gray"), the duly authorised investment manager of its clients who are beneficial and/or registered holders of Ordinary Shares, confirming its intention to accept the Partial Offer in respect of Ordinary Shares representing not less than 30.3 per cent. of such shares held by its clients at close of business two Business Days prior to the First Closing Date. As at 05 November 2019 Allan Gray's clients were the beneficial owners of, or otherwise directly or indirectly controlled, 46,048,324 Ordinary Shares.

25. VOTING IRREVOCABLE UNDERTAKINGS

As at the date of this document, Growthpoint has received irrevocable undertakings to vote in favour of the Resolutions from Shareholders accounting for 128,689,438 Existing Ordinary Shares representing 17.7 per cent. of the issued share capital of the Company. This includes irrevocable undertakings from the Directors (and their associates).

The Directors (excluding Wessel Hamman who holds no Existing Ordinary Shares but including Mstead Limited and PDI Investment Holdings Limited, being associates of Louis Norval) have irrevocably undertaken to vote in favour of all of the Resolutions in respect of their direct holdings, amounting, in aggregate, to 140,073,383 Existing Ordinary Shares, representing approximately 19.3 per cent. of the Existing Ordinary Shares in issue as at 6 November 2019 (being the latest practicable date prior to the publication of this document).

The Peens Family Holdings have entered into irrevocable undertakings to vote (or procure the vote) in favour of the Resolutions at the General Meeting in respect of all of the Existing Ordinary Shares in which they are interested, which represent approximately 8.1 per cent. of the Existing Ordinary Shares in issue as at 6 November 2019 (being the latest practicable date prior to the publication of this document).

In addition, each of New Fortress Finance Holdings Limited, Premier Fund Managers Limited, Thames River Capital LLP and Stabilis Investments Holdings Limited (an entity which has certain rights under the Parkdev Relationship Agreement) has entered into an irrevocable undertaking to vote (or procure the vote) in favour of the Resolutions at the General Meeting in respect of all of the Existing Ordinary Shares in which they are interested, which, in aggregate, represent approximately 14.0 per cent. of the Existing Ordinary Shares in issue as at 6 November 2019 (being the latest practicable date prior to the publication of this document).

Growthpoint has also received a letter of intent from Henderson Global Investors Limited to vote (or procure the vote) in favour of the Resolutions at the General Meeting in respect of all of the Existing Ordinary Shares in which it is interested, which represents approximately 3.8 per cent. of the Existing Ordinary Shares in issue as at 6 November 2019 (being the latest practicable date prior to the publication of this document).

A letter of intent has also been received from Allan Gray, the duly authorised investment manager of its clients who are beneficial and/or registered holders of Ordinary Shares, confirming its intention to recommend to its clients who hold voting rights in the Company to exercise such voting rights in favour of the Resolutions at the General Meeting. As at 05 November 2019 Allan Gray's clients were the beneficial owners of, or otherwise directly or indirectly controlled, 46,048,324 Ordinary Shares.

26. FINANCIAL ADVICE

The Board has received financial advice from Numis and JPMC in relation to the Proposed Transaction including the Partial Offer and Rule 9 Waiver Resolution. In providing their financial advice to the Board, Numis and JPMC have each taken into account the commercial assessment of the Board.

27. RECOMMENDATION

The Board, who have been so advised by Numis and JPMC, consider the waiver granted by the Panel of any obligation that would otherwise arise under Rule 9 as a result of the Proposed Transaction to be fair and reasonable and in the best interests of Independent Shareholders and the Company as a whole.

The Board considers the Share Subscription and the passing of the Resolutions to be in the best interests of Shareholders as a whole.

Accordingly, the Board unanimously recommend that Shareholders vote in favour of the Partial Offer and Rule 9 Waiver Resolution and the other Resolutions to be proposed at the General Meeting, as the Directors have irrevocably undertaken to do in respect of their own beneficial holding, which together amount to 140,073,383 Ordinary Shares, representing approximately 19.3 per cent. of the Ordinary Shares in issue as at 6 November 2019 (being the latest practicable date prior to the publication of this document).

Shareholders should also be aware that if the Transaction Resolutions to be proposed at the General Meeting are not passed, the Share Subscription will lapse and the Proposed Transaction will not be completed.

Yours sincerely,

Hugh Scott-Barrett

Chairman

Part 2

INFORMATION ON CAPITAL & REGIONAL

1. INTRODUCTION

Capital & Regional is a UK focused retail property REIT specialising in shopping centres that dominate their catchment, serving the nondiscretionary and value-orientated needs of their local communities. It has a strong track record of delivering value enhancing retail and leisure asset management opportunities across an approximately £764.4 million portfolio of tailored in-town community shopping centres. Capital & Regional is listed on the main market of the London Stock Exchange and has a secondary listing on the Johannesburg Stock Exchange.

Capital & Regional wholly owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green and has a 12 per cent. joint venture interest in the Kingfisher Centre in Redditch. Capital & Regional manages these assets through its in-house property and asset management platform, which comprise over 900 retail units and attracts approximately 1.5 million shopping visits each week. Capital & Regional also owns Snozone, the largest indoor ski operator in the UK.

2. BUSINESS OVERVIEW

2.1 Principal Activities of Capital & Regional

The Group's business is focused on acquiring, enhancing and managing community shopping centres. The Group aims to generate sustainable income and capital value growth by combining active asset management with operational excellence.

The Group also owns Snozone, the largest indoor ski operator in the UK.

2.2 Principal markets of Capital & Regional

The Group's shopping centre and Snozone businesses operate exclusively in the UK.

3. GROUP HISTORY AND IMPORTANT EVENTS

The Company was incorporated on 13 November 1978. The Company became a public company and was admitted to trading on the Unlisted Securities Market of the London Stock Exchange on 19 November 1986. After listing in 1986, the Group continued to invest in properties both on its own as the sole investor and through joint ventures. These properties were either sold into funds and managed by the Group or prepared for disposal. The Company moved its listing to the Official List in 1995. In 2000 the Company changed its name from Capital & Regional Properties plc to Capital & Regional plc.

In 2001, the Company and Norwich Union Life Pensions Limited formed the Mall Fund and the Junction Fund with Morley Fund Management (now Aviva Investors). In consideration for units in each of the Mall Fund and the Junction Fund, the Company transferred interests in certain shopping centres and retail parks which it had acquired. The Capital & Regional Property Manager was appointed the property manager of both funds. Hammerson (Oldbury Limited) acquired the Junction Fund in October 2012 for £259.5 million. The Group received net cash consideration of £11.4 million for its 13.43 per cent. interest, excluding performance fee income of £2.6 million. In 2003, the Group acquired its interest in the X-Leisure Fund from Marylebone Warwick Balfour for £31 million. The Capital & Regional Property Manager was appointed as the property manager and Hermes Investment Management Limited as the fund manager.

In July 2005, the Mall Fund raised £1,060 million via a commercial mortgage backed securitisation (the "CMBS"). In 2005, the Group began investing in commercial retail property in Germany through a joint venture with the Hahn Group ("Hahn"). In 2008, Capital & Regional sold 50 per cent. of its interest in the German properties held through its joint venture with Hahn to Apollo (an investment fund managed by AREA Property Partners (now Ares)) for £65.6 million. As part of this Ares and Capital & Regional formed a joint venture through with the Group, together with Ares, invested in commercial retail property portfolios in Germany (the "German Joint Venture"). The German Joint Venture subsequently purchased Hahn's minority equity stake in the same properties. The transaction also resulted in a reduction in the Group's balance sheet debt of £374 million.

In September 2006, a second issue of notes under the CMBS was made raising £375 million. In June 2008, the Mall Fund raised £286 million of capital through an open offer. The proceeds were used to repay the Mall Fund's capital expenditure facility in full. The Company voted in favour of the capital raising, but decided not to take up its entitlement. As a consequence, the Group's interest in the Mall Fund was diluted and decreased from 24.24 per cent. to 16.72 per cent.

In February 2008, the Group sold an 80 per cent. interest in its FIX-UK portfolio to Paradigm Real Estate Management Ltd and Bank of Scotland Corporate. This resulted in a further reduction in the Group's balance sheet debt of £120 million.

In September 2009, the Group completed a £69 million placing and open offer. The Parkdev Parties subscribed for a 25 per cent. equity interest in the Company and entered into a relationship agreement with the Company, pursuant to which Louis Norval and Neno Haasbroek (representatives of and connected persons with the Parkdev Parties) were appointed as non-executive directors to the Board.

In August 2010, the Group purchased 30.06 per cent. of the issued share capital of Garigal, a German asset and property manager, for cash consideration of €1. The Group's partner in the German Joint Venture, Ares, purchased a further 20.04 per cent. of the issued share capital of Garigal in the same transaction. As part of the investment, the asset and property management contract for the real estate portfolio held by the German Joint Venture was transferred to Garigal. By 2015, Capital & Regional had completed the disposal of its German portfolio.

During the second half of 2011, the Group purchased 13.6 million units in the Mall Unit Trust at an average price of £0.30 per unit for total consideration of £4.0 million. This acquisition increased the Group's holding in the Mall Unit Trust by 1.44 per cent. to 18.16 per cent. In February 2012, the Group purchased a further 18.7 million units in the Mall Unit Trust at £0.30 per unit for total consideration of £5.6 million increasing its holding further from 18.16 per cent. to 20.15 per cent.

In May 2012, the Group completed its acquisition of a 20 per cent. interest in the Kingfisher Shopping Centre, Redditch for a total consideration of £10.6 million in partnership with funds managed by Oaktree Capital Management L.P. The Kingfisher Shopping Centre was purchased for £130.0 million at an 8 per cent. net initial yield.

In February 2014, the Group completed the sale of its Leisure World, the Hemel Hempstead property to the Tesco Pension Fund for net cash consideration of £8.5 million.

In June 2014 the Company raised £165 million through a firm placing and placing and open offer and used the proceeds to acquire a further 62.56 per cent. stake in the Mall Fund for a consideration of £212 million. In the remainder of the year the Group acquired the remaining minority interests increasing its ownership to 100 per cent.

In December 2014, Capital & Regional converted to a REIT which enabled Capital & Regional to benefit from a zero corporate tax rate on qualifying property income and capital gains. Further information in relation to the REIT regime is set out in Part 7 of this document.

In September 2015, the Group commenced a secondary listing on the Johannesburg Stock Exchange.

In 2016, the Group acquired the Marlowes centre and the adjacent Edmonds Parade and Fareham House properties in Hemel Hempstead for a combined cost of £53.8 million representing an initial yield of 7.0 per cent. and completed the sale of the Mall Camberley to Surrey Heath Borough Council for £86.0 million at a net initial yield of 5.9 per cent. In 2017 the Group sold the Buttermarket Centre in Ipswich to the National Grid Pension Fund for a price of £54.7 million at an equivalent yield of 5.9 per cent. In March 2017 the Group acquired the Exchange Ilford from Meyer Bergman for £78 million.

4. THE GROUP'S PRINCIPAL INVESTMENTS

4.1 UK Shopping Centres

The following shopping centres are wholly-owned assets.

The Mall Blackburn

The Mall Blackburn is a shopping centre located in Blackburn with 600,000 square feet of lettable space with 122 units which was extended and refurbished in 2011. It contains 122 units with principal occupiers including Primark, H&M, Next, Wilko and Pure Gym. As at 30 September 2019, the Mall Blackburn was valued at £74.5 million with a net initial yield of 9.05 per cent.

The Mall Luton

The Mall Luton is a 900,000 square feet mall with 170 lettable units within a London satellite town with a growing population. As the primary shopping destination in Luton, the focus is to continue to develop and expand, maintaining its primary position in the area. As at 30 September 2019, the Mall Luton was valued at £160 million with a net initial yield of 7.75 per cent.

The Mall Maidstone

The Mall, Maidstone is a freehold shopping centre located within a South East town with strong population growth. Currently there are 107 lettable units with tenants such as Boots, Sports Direct, Wilko and Iceland. As at 30 September 2019, the Mall Maidstone was valued at £60.9 million with a net initial yield of 8.27 per cent.

The Mall Walthamstow

The Mall Walthamstow has 260,000 square feet of space with 69 lettable units. In 2015 the shopping centre had undergone a dramatic internal refurbishment with ambitious plans for an 86,000 square feet extension. Since the refurbishment, the Group has secured long-term commitments from a number of national brands including TK Maxx, Sports Direct, The Gym Group and Lidl. As at 30 September 2019, the Mall Walthamstow was valued at £127 million with a net initial yield of 4.68 per cent. In 2018, planning consent was received to build a significant 80,000 square feet retail extension, 460 unit residential development and new town square. The plans envisage an enhanced two acre town square, which would include informal play facilities, sensory gardens, flexible events space and feature landscaping. The Company is at an advanced stage in the identification of a preferred development partner to fund fully and build this development. On 22 July 2019, a fire broke out at the shopping centre causing considerable damage to the centre. Approximately 75 per cent. of the centre has subsequently re-opened with the balance expected to re-open progressively over the next six to nine months. The centre is fully insured for both replacement and for up to four years' loss of income.

The Mall Wood Green

The Group acquired the freehold for the Mall Wood Green shopping centre in 2002 which is prominently located on either side of the main High Road in the heart of the Wood Green town centre. The Mall Wood Green consists of 540,000 square feet with 109 lettable units. Principal tenants include Primark, Wilko, H&M, Boots, TK Maxx, Travelodge and Cineworld. The Company has conditionally exchanged contracts on the sale of non-core land to a residential developer for £5 million, in line with the book value. As at 30 September 2019, the Mall Wood Green was valued at £218.8 million with a net initial yield of 5.39 per cent.

The Marlowes, Hemel Hempstead

The Group completed the acquisition of the freehold of The Marlowes Hemel Hempstead shopping centre in 2016, which is the main retail offering in Hemel Hempstead, for £35.5 million reflecting an initial yield of 7.0 per cent. The centre has 350,000 square feet of space and 109 lettable units. The Group view the location of the asset as strategic given its location, on the fringes of the M25, which has recently benefited from significant investment from the local authority. The opportunity exists to reposition this asset and potentially consolidate it with other retail properties as part of a regeneration of the wider town centre. As at 30 September 2019, the Marlowes Hemel Hempstead was valued at £40.9 million with a net initial yield of 8.00 per cent.

Exchange, Ilford

The Group acquired the Exchange shopping centre in Ilford in March 2017 with three trading levels consisting of 79 units providing 300,000 square feet of lettable space and a multi-storey car park with over 1,000 spaces. The Exchange Ilford is located opposite Ilford train station which will be rebuilt ahead of the opening of Crossrail. The shopping centre is anchored by Debenhams and Marks & Spencer and includes other retailers including H&M, Next, River Island, Sports Direct, TK Maxx and Wilko. As at 30 September 2019, the Exchange Ilford was valued at £82.3 million with a net initial yield of 5.64 per cent.

4.2 Other assets

Kingfisher, Redditch

^l On 1 May 2012, the Group completed its acquisition of a 20 per cent. interest in the Kingfisher Shopping Centre in Redditch for a total consideration of £10.6 million as a joint venture with Oaktree Capital Management L.P. (the "Kingfisher Redditch Joint Venture"). Following a restructuring of the joint venture that completed in March 2019 the Group now holds a 12 per cent. interest. The Group acts as the property and asset manager for the shopping centre. The shopping centre represents 900,000 square feet of retail accommodation. supported by 2,600 car parking spaces, an integrated bus station and an adjacent rail station.

Snozone

The Group owns Snozone which is the largest indoor ski slope operator in the UK. Snozone opened in 2000 and is the UK's leading indoor destination for snowsports on real snow, located in the Xscape leisure centres in Milton Keynes and Castleford, West Yorkshire. In October 2017, Snozone was voted 'Best Sporting Venue' at The School Travel Awards UK, beating Manchester United, Twickenham Stadium, The National Football Museum and Wimbledon Lawn tennis museum & tours. This award was voted for by teachers and is awarded to destinations that they believe excel in Learning Outside the Classroom.

4.3 Future Assets

The Group's current focus is optimising its existing assets. Consequently, the Group is not making, and has no plans to make, future material investments in new assets with the proposed proceeds from the transaction and therefore has not made any firm commitment in respect thereof.

5. KEY STATISTICS

5.1 The table below shows a breakdown of the Group's net asset value across its wholly-owned portfolio as at 30 September 2019, extracted from the Property Valuation Reports.
5.2 The properties the Mall Walthamstow, Mall Wood Green and Mall Luton are the principal property assets of the Group. The Marlowes Hemel Hempstead, Mall Luton and Mall Maidstone have been valued by Knight Frank. The Mall Walthamstow, Mall Wood Green, Mall Blackburn and Exchange Ilford have been valued by CBRE.
5.3 All values are on the basis of "market value" in accordance with the RICS Standards. The following table sets out a breakdown of Knight Frank's valuation of the Marlowes Hemel Hempstead, Mall Luton and Mall Maidstone properties and the CBRE valuation of the Mall Walthamstow, Mall Wood Green, Mall Blackburn and Exchange Ilford properties, in each case as at 30 September 2019.

PROPERTY PORTFOLIO VALUATION	30 September 2019
Property at independent valuation	£m	NIY %
London
Exchange Ilford	82.3	5.64
Mall Walthamstow	127.0	4.68
Mall Wood Green	218.8 —–—––––——	5.39 —–—––––——
	428.1	5.24
South East
Marlowes Hemel Hempstead	40.9	8.00
Mall Luton	160.0	7.75
Mall Maidstone	60.9 —–—––––——	8.27 —–—––––——
	261.8	7.91.
Regional
Mall Blackburn	74.5 —–—––––——	9.05 —–—––––——
Wholly-owned portfolio	764.4 —–––––———	6.54 —–––––———

5.4 The valuation of the wholly-owned portfolio at 30 September 2019 was ££764.4 million, reflecting a net initial yield of 6.54 per cent. Values of the Group's assets have decreased since 31 December 2018, except for the Mall Walthamstow which marginally increased. In particular, the Group's assets outside London have been significantly impacted by negative sentiment towards retail assets with the headline valuation of the Group's three South East assets declining by 15.4 per cent. and the Mall Blackburn falling by over 23.0 per cent.
5.5 On a rolled forward basis as at 30 September 2019 the Company's NAV is £340.8 million and NAV per share is 47p (based on a property valuation of £764.4 million as at 30 September 2019 and net debt of £413.4 million as at 30 September 2019).

6. CAPITAL RESOURCES AND GROUP FACILITIES

6.1 Capital Resources

The Group's borrowings are arranged to ensure an appropriate maturity profile and to maintain short-term liquidity. There were no defaults or other breaches of financial covenants under the Group's facilities that were not waived under any of the Group borrowings during the year ended 30 December 2018 and the year ended 30 December 2017.

Summary of the Group's debt structure

The Group has a long-term diversified debt structure with non-recourse facilities across four asset pools. All of the asset backed facilities had at least 3.5 years of duration left as at 30 June 2019.

As at 30 June 2019				Average		Duration
	Debt	Cash	Net debt	interest rate1		Fixed with extensions
	£m	£m	£m	%	%	Years
Four Mall assets	265.0	(10.0)	255.0	3.33	100	7.1
Mall Luton	107.5	(6.7)	100.8	3.14	100	4.5
Marlowes Hemel
Hempstead	26.9	(0.8)	26.1	3.42	100	3.6
Exchange Ilford	39.0	(1.7)	37.3	2.76	100	4.7
RCF/(Group Cash)	–	(6.1)	(6.1)	3.81	–	2.6
Total	438.4	(25.3)	413.1	3.26	94	5.9
Group net debt to
property value at
30 June 2019	52%
Rolled forward LTV at
30 September 2019	54%

1 Assuming loans fully drawn.

2 The Group's Revolving Credit Facility of £15 million was undrawn and fully available at 30 June 2019 and 30 December 2018.

6.2 Cash flow

The Group's primary sources of recurring cash inflows are rental payments and other income from its shopping centre investments, property and asset management fees and distributions from the Snozone ski business. The primary recurring cash outflows are the operating costs, both at the Group's shopping centres and from its central overheads, interest charges, capital expenditure and dividend payments made to shareholders.

6.3 Borrowing Requirements and Restrictions

The Group's credit facilities and borrowings contain banking covenants which require that specific interest income, asset coverage and LTV ratios be met in addition to certain non-financial covenants that require continued compliance. The continued compliance with these covenants by the Group depends on a number of factors, some of which are outside the Group's control. The Group aims to manage its balance sheet and funding position such that it maintains a prudent level of headroom over all covenants whilst also optimising efficiency and minimising cost of capital.

The table below details the headroom on the LTV covenants on each of the Group's four asset backed facilities with reference to the updated 30 September 2019 property valuations.

Covenant Headroom

	Debt	LTV as at 30 Sep	LTV cash trap	LTV default	Headroom to covenant as % of Sep 2019 valuation:
Facility	£m	2019	covenant	covenant	Cash trap	Default
Four Mall Assets	265.0	55%	65%	70%	15.3%	21.3%
Mall Luton1	103.0	64%	n/a1	80%1	n/a	19.5%
Exchange Ilford	39.0	47%	60%	70%	21.0%	32.3%
Marlowes Hemel
Hempstead2	26.9	43%2	n/a	60%	n/a	27.7%

1 Luton debt reduced from 30 June 2019 by £4.5m utilising cash within the structure. Cash trap covenant waived and default covenant increased to 80% until 30 September 2020 (revert to 65% and 70% respectively thereafter).

2 Hemel Hempstead LTV reflects amended agreement with new £7m development facility completed on 13 March 2019. Covenant assessed on current loan to projected Gross Development Value of scheme with leisure development. Default covenant shown as no cash trap

7. TRENDS, MARKET OVERVIEW AND COMPETITION

7.1 Recent trends

^l Polarisation

Retail continues to polarise between discretionary "wants" and nondiscretionary everyday essential "needs". Consumers differentiate their shopping trips accordingly, with retailing destinations needing to align clearly to these distinct shopping trips. With this in mind the Group's aim is to ensure that the community centres provide a clearly defined focus in satisfying the everyday needs of its communities, in engaging and stimulating environments.

^l Omni Channel Evolution

Traditional retail has evolved from simple bricks and clicks to deeper and more co-ordinated cross-channel integration. Shoppers increasingly demand speed and optionality in how and where they purchase and expect limited friction in purchase and returns fulfilment. Physical stores continue to provide a central role in the omni-channel retailing environment, providing a crucial intersection between products and people. The Group focuses on community centres, in well connected, easily accessed town centre locations, so that the assets are well positioned to meet the modern consumers' needs.

^l Retailer Evolution

Online penetration is continuing to influence tenant mix with the impact felt most clearly by discretionary "wants" based retailers, whose store portfolios are rationalising, particularly across the fashion sector. Non-discretionary "needs-based" retailing remains more resilient to this change. Retailers at this end of the retail spectrum continue to predominantly fulfil their customers everyday needs directly from store, with limited online integration.

^l Community Fundamental

With growing trends in localism, community assets provide wide-ranging opportunities to drive performance and growth. Community centres represent the engine room for retailer profitability, with the mix of affordable occupancy costs (illustrated by Zone A rents), attractive productivity levels and high footfall driving profitability. With rentals averaging £15 per square foot, Capital & Regional's portfolio offers flexibility to profitably remerchandise space, providing the opportunity in so doing to evolve and broaden its offer to its growing community populations.

7.2 Market Overview

Market conditions in the retail sector have provided a challenging backdrop to the implementation of the Group's strategy. The Group's asset management team has energetically focused on the repositioning of the Company's convenience-based community shopping centre portfolio, leading to tangible improvements in performance at those centres where the process is most advanced. Considerable progress has been made on the remerchandising of schemes with a focus on those occupiers which directly respond to the needs of the local community, embrace omni-channel retailing, or those that are most resilient to the continuing growth in online shopping. The Group has not been immune to CVAs and retailer restructurings with four CVAs impacting the Company in the period being Debenhams, Arcadia, Monsoon/Accesorize and Select. The largest single impact was that of the Debenhams CVA which is expected to result in a reduction of approximately £0.7 million to NRI in the second half of the year and £1.3 million on an annualised basis (all three Debenhams units remain trading). However, Capital & Regional's rebased rents, which average £15 per square foot, in combination with capital values below replacement cost, do give it flexibility in diversifying its tenant base.

Capital & Regional's ability to invest in accretive capital expenditure initiatives has been critical to achieving these outcomes. During the course of the 2018 year Capital & Regional has invested £18.5 million in asset management initiatives, including the refurbishment of the previously vacant Arndale House office space in the Mall Luton; the delivery of the new Family Zone in the Exchange Ilford; providing a new façade at the Fareham House high street block in Marlowes Hemel Hempstead and upgrading guest facilities at Marlowes Hemel Hempstead, Exchange Ilford and the Mall Wood Green. There is a pipeline of initiatives across the portfolio but with particular focus on Marlowes Hemel Hempstead; Exchange Ilford and the Mall Walthamstow. The Board takes a very active role in reviewing these projects. Its aim is to ensure that the Company engages openly and transparently with all stakeholders in the development and roll-out of the plans. It also aims to ensure that the speed of investment is carefully balanced with the need for prudent balance sheet management.

8. STRATEGY

The Group's strategy is centred on four pillars: (i) redefining community shopping centres; (ii) repositioning the asset and retail mix of its portfolio; (iii) refocusing the management team; and (iv) enhancing shareholder value.

Redefine and own the Community shopping centre category in the UK, consistent with global best practice

8.1 The Group defines and assesses its community shopping centre portfolio across three key aspects:

^l Physical attributes including the location, size and dominance of the centre and its accessibility in terms of local transport links and parking provision;
^l Products and services including the retail mix, the provision of grocery, leisure and services offerings and the quality of facilities; and
^l Differentiation being the ways in which a centre stands out as more than just a retail destination, including the strength of community links, how well tailored the offer is to the locality, how it contributes and measures on sustainability and in being a local employer of choice.
8.2 In 2018 Revo Retail Property Community committed to reclassifying the UK Shopping Centre/ Retail Property classification to include the Community Shopping Centre classification. Following an extensive industry consultation, a new draft categorisation was launched, split into three broad categories and further subcategories: (i) regional; (ii) local; (iii) community centre; (iv) neighbourhood centre; (v) convenience centre; and (v) specialised. Further refinement of the classification definitions is expected as the new terminology becomes more widely utilised. Encouraging the industry to then fully adopt and embed the new categorisations will be an ongoing process requiring continued focus to move away from outdated terminology.

Actively re-merchandise centres to increase exposure to growth and online resilient categories and differentiate from competition. Tailored to community requirements with focus on local, value, relevance, quality and total experience

8.3 The Group believes retailers and communities are clear in their expectations for what they want to see from its community centres with a strong mix of everyday essentials including: (i) grocery, pharmacy and general merchandise; (ii) catering options covering express food, coffee and casual dining; (iii) personal services including health, beauty, dry cleaners, shoe repairs; and (iv) everyday value fashion, leisure and children's wear. All these need to be tailored to the specific community's needs and aspirations. This needs to be supported with exceptional centre services, for example parents' parking, change facilities and kids' play. Each shopping centre is competing for Capital & Regional's guests' time against other physical destinations and online options so making the experience as convenient and pleasurable as possible is critical. The Group believe when it gets this proposition right, when it is highly relevant to the community, then the Group can drive footfall and dwell time, which drives retailers' sales.
8.4 The Group has established asset masterplans for every centre, informed by research and data insights. These masterplans provide the strategic direction for each asset, directing capital investment and leasing decisions in delivering the optimal community mix and offer. Throughout 2018 and 2019, the Group has proactively remerchandised to a needs-based, non-discretionary offer that is most relevant to the communities' needs and most resilient to structural changes in retail. In 2018 and the first half of 2019, the Group invested more than £24 million in capital expenditure across Capital & Regional's portfolio. The capital expenditure programme is helping to maintain leasing momentum, retain engagement with the Group's core occupiers and help attract new occupiers and guests to the centres. The Group has seen the strongest operational results where the strategy is most advanced. The Group's capital expenditure projects are largely designed to enable swift delivery and maximise impact. Typically delivered over six to nine month programmes, the Group can deploy projects with agility to follow customer needs and trends.

Agile management, data driven, decentralised to accelerate decision making and delivery

8.5 The Company has refocused its business and resources with a revised management platform and operational structure that puts the shopping centres at the heart of the Group, facilitating accelerated responsiveness and optimal decision making in the delivery and execution of the masterplan-led community strategy.
8.6 The Group's ethos is that master planning is a collaborative process and the decentralised management platform puts the Group's general managers at the heart of the business where they live and breathe the local communities every day. These individuals are considered best placed to drive the business forward, ensuring decisions are tailored to provide the right solutions for the community, with support and professional advice from key functions within Capital & Regional's support office. The Group has invested in and repositioned the support office team functions, to align the specialist skills most effective to delivering the strategic aims at the centres. The support structure is focused on delivering at pace and with agility, capable of acting and adapting swiftly to the opportunities and challenges that arise. In an environment where the community centre is

increasingly embracing a range of different occupier uses, it is essential that the management platform and skill base is tailored to deliver the strategy effectively.

8.7 With the structural shifts in retail and the diverse changes and growth experienced in town centres, it is essential the Group's management platform retains agility and flexibility to adapt. Data insight and research will continue to inform strategy and operational delivery decisions. Through that insight the Group can continue to shape and evolve the management platform to provide aligned and appropriately resourced expertise in the right areas, at all times, to deliver strategy at pace.

Capital & Regional income and shareholder returns.

8.8 The right offering to the public drives footfall and dwell time. This in turn boosts retailer sales and ultimately letting tension, which improves rental income, property values and consequently Capital & Regional's revenue and shareholder returns. The results in 2018 and interim results in 2019 from the masterplan-led capital expenditure investment reinforces the Group's confidence in the strategy and the importance of continued disciplined investment to drive performance.
8.9 Continued capital expenditure investment is critical to the delivery of the community shopping centre strategy and the acceleration of the programme is fundamental to driving income growth. This will position Capital & Regional well to proactively respond as markets stabilise.

9. REGULATORY ENVIRONMENT

9.1 Macroeconomic and UK retail market conditions

Capital & Regional's results are influenced by macroeconomic factors and conditions in the UK retail and property investment markets. Macroeconomic factors affect consumer confidence which impacts upon retailer profitability and hence their demand for taking up new leases or renewing existing space and in certain cases their ability to meet contractual demands. This in turn impacts upon Capital & Regional's revenue and profits. The majority of the Group's income is from existing lease agreements, typically over multiple years, which helps mitigate the impact of short term fluctuations in consumer confidence.

9.2 UK Government policies

The retail market is impacted by the general tax and regulatory environment including but not limited to legislative requirements regarding business rates, minimum wage and VAT (Value Added Tax). Changes in such areas can have a positive or negative impact upon retailer revenues and profitability which in turn could impact the Group's revenue and profitability.

The retail market could also be adversely affected by uncertainty, disruption or other consequences of the UK's referendum decision to leave the EU.

The information contained in paragraphs 9.1 and 9.2 of this Part 2, contains all the governmental, economic, fiscal, monetary or political policies or factors that materially affect or could materially affect, directly or indirectly, the Company's business and the Group's operations.

10. INFORMATION ON THE BOARD

The Directors of the Company and their principal functions are as follows:

Name	Position
Hugh Scott-Barrett	Chairman, Non-executive Director
Lawrence Hutchings	Chief Executive Officer
Stuart Wetherly	Group Finance Director
Tony Hales	Non-Executive Director
Wessel Hamman	Non-Executive Director
Ian Krieger	Non-Executive Director
Louis Norval	Non-Executive Director
Laura Whyte	Non-Executive Director

Hugh Scott-Barrett – Chairman, Non-executive Director, 61

Before moving to become Non-Executive Chairman, Hugh was Chief Executive of Capital & Regional from 2008-2017. He was previously a member of ABN AMRO's managing board serving as Chief Operating Officer and Chief Financial Officer and before that worked at SBC Warburg and Kleinwort Benson. He was educated both in Paris and at Oxford University. Hugh is a director of GAM Holding AG, a Swiss asset management company, and a non-executive director of RBR Group Limited, a privately owned leisure group.

Lawrence Hutchings – Chief Executive Officer, 53

Lawrence joined Capital & Regional 2017 following four years at Blackstone in Australia, two as Managing Director, and has over 20 years' experience in the property industry. Prior to Blackstone, Lawrence was at Hammerson PLC for four years, the last three as Managing Director – UK Retail, before which he spent almost seven years at Henderson Global Investors, latterly as Director (Property) European Retail.

Stuart Wetherly – Group Finance Director, 42

Stuart joined Capital & Regional as Group Financial Controller in October 2012 and took on the additional role of Company Secretary in 2013, and was appointed Group Finance Director in March 2019. Prior to joining Capital & Regional, Stuart was a director in Deloitte Audit in London specialising in listed companies and previous to that Stuart was Corporate Accounting Manager at Johnson Matthey plc having originally qualified as a Chartered Accountant in his first spell with Deloitte.

Tony Hales – Non-Executive Director, Senior Independent Director, Chairman of Remuneration Committee, 71

Tony is currently Chairman of the Greenwich Foundation, NAAFI Pension Fund Trustees and the Associated Board of the Royal Schools of Music. Tony was previously Chief Executive of Allied Domecq plc, and has extensive Non-Executive Director experience including HSBC Bank plc and as Chairman of Workspace Group plc.

Wessel Hamman – Non-Executive Director, 46

Wessel is the Chief Executive of Clearance Capital Limited, a real estate investment management firm which he co-founded in 2008. Wessel qualified as a Chartered Accountant at KPMG in South Africa and spent ten years in the Investment Banking industry with the FirstRand Group.

Ian Krieger – Non-Executive Director, Chairman of Audit Committee, 67

Ian is the Audit Committee Chairman and Senior Independent Director at Safestore Holdings plc and the Audit Committee Chair of Primary Health Properties PLC. He is also Chair of Anthony Nolan. Ian was previously a senior partner and vice-chairman at Deloitte.

Louis Norval – Non-Executive Director, 63

Louis was a co-founder, Executive Chairman and Chief Executive of Attfund Limited (one of the largest private property investment companies in South Africa) until the company was sold to Hyprop Investments Limited (a REIT listed on the JSE) in 2011. Louis is Executive Chairman of Homestead Group Holdings Limited and serves on the board of a number of other companies including Hyprop Investments Limited. He graduated with a BSc (QS) (with distinction) from the University of Pretoria.

Laura Whyte – Non-Executive Director, Chairman of Responsible Business Committee, 60

Laura had a long and successful career with John Lewis Partnership where she served on the Management Board for over ten years, firstly as Registrar and latterly as HR Director. Laura is also Chair of XLVets UK Ltd, a Non-Executive Director of the Defence People and Training Board of the Ministry of Defence, where she is also a member of the People Committee and Non-Executive Director of the British Horseracing Authority. She is a Trustee of The Old Royal Naval College, Greenwich.

11. INFORMATION ON THE PROPOSED DIRECTORS

Norbert Sasse – Proposed Non-Executive Director, 54

Norbert is the Group Chief Executive Office of Growthpoint and holds a BCom and Honours Degree in Accounting from Rand Afrikaans University and is a Chartered Accountant. Norbert has 25 years' experience in corporate finance, funds management and all aspects of listed property, as well as equity and debt capital market experience. He is a director of all major Growthpoint subsidiaries and investments in South Africa, Australia and the United Kingdom.

George Muchanya – Proposed Non-Executive Director, 48

George is part of the Growthpoint's Group Executive Committee and also sits on the boards of some of Growthpoint's investee companies. Working alongside the Group CEO and the South African CEO of Growthpoint, George has played a key role in the implementation of Growthpoint's strategic initiatives both offshore and in South Africa/ An engineer by training, George had career stints in investment banking and management consulting before joining Growthpoint in 2005.

As previously disclosed the Board has commenced a recruitment process for the Chairman role with the intention that a new appointment is made and Hugh Scott-Barrett steps down before the Annual General Meeting in 2020. Additionally, subject to completion of the Proposed Transaction, the Company also intends to appoint two further independent non-executive directors over the course of the next six to twelve months to ensure ongoing compliance with the Corporate Governance Code. Following these replacements and appointments, the Board considers that these changes will deliver an appropriately sized and balanced board with the complementary skills necessary to drive the Company forward.

OPERATING AND FINANCIAL REVIEW

The following discussion and analysis is based on, and should be read in conjunction with, the Group's audited consolidated financial statements as at and for the years ended 30 December 2016, 2017 and 2018 which have been prepared in accordance with IFRS and the interim unaudited financial statements for the period beginning 31 December 2018 and ended 30 June 2019.

The audited financial statements of the Group for the years ended 30 December 2016, 2017 and 2018 contained in those parts of the Annual Reports and Accounts of Capital & Regional are incorporated by reference into this document as detailed in Part 9 of this document.

The unaudited interim financial statements for the period beginning 31 December 2018 and ended on 30 June 2019 are incorporated by reference into this document as detailed in Part 9 of this document.

Investors should read the whole of this document and use the documents cited above for reference and should not just rely on the summary information contained in this Part 3. The documents included by reference contain an extensive review of the financial periods in question on both an operating and a financial level.

1. INTERIM PERIOD FROM 31 DECEMBER 2018 TO 30 JUNE 2019

1.1 Profitability

Amounts in £m	Six months to June 2019	Year to December 2018	Six months to June 2018

Net Rental Income	25.2	51.9	26.0
Net interest (see analysis on next page)	(9.4)	(18.9)	(9.4)
Kingfisher, Redditch	–	0.4	0.1
Snozone profit (indoor ski operation)	1.0	1.5	1.0
Central operating costs net of external fees	(2.0)	(4.3)	(2.2)
Tax	– —–———	(0.1) —–———	– —–———
Adjusted Profit	14.8	30.5	15.5
Adjusted Earnings per share (pence)1	2.04p	4.23p	2.15p
Reconciliation of Adjusted Profit to statutory result
Adjusted Profit	14.8	30.5	15.5
Property revaluation (including Deferred Tax)	(64.3)	(52.5)	(12.4)
Loss on disposal	(0.2)	(3.8)	–
(Loss)/Gain on financial instruments	(4.9)	2.6	3.1
Other items2	(0.8) —–———	(2.4) —–———	0.5 —–———
(Loss)/Profit for the period	(55.4) —–———	(25.6) —–———	6.7 —–———

Components of Adjusted Profit and reconciliation to IFRS Profit

1 EPRA figures and a reconciliation to EPS are shown in Note 6 to the condensed financial statements set out in the Interim Results.

2 Includes £0.5 million for the non-cash accounting charge in respect of share-based payments (Year to December 2018: £0.7 million, Six months to June 2017: £0.5 million)

^l The Adjusted Profit decreased by 4.5 per cent. on the prior year resulting from a £0.8 million decrease in NRI. This decrease in NRI was a consequence of the impact of CVAs and administrations of certain of the Group's tenants, which impacted NRI by £1.1 million.

Amounts in £m	Six months to June 2019	Year to December 2018	Six months to June 2018
Wholly-owned assets
Net Interest on loans	7.2	14.4	7.2
Amortisation of refinancing costs	0.5	0.9	0.4
Notional interest charge on head leases1	1.7 —–———	3.4 —–———	1.7 —–———
	9.4	18.7	9.3
Central	– —–———	0.2 —–———	0.1 —–———
Net Group interest	9.4	18.9	10.0

Net interest as broken down in the table below was flat on prior year period.

1 Notional interest charge with offsetting opposite and materially equal credit within other property operating expenses.

^l The Group's ongoing focus on cost efficiencies resulted in the net central operating costs improving by £0.2 million compared to 2018.
^l The loss for the period was £55.4 million (30 June 2018: profit £6.7 million) which was driven primarily by a total revaluation loss of £64.3 million. This included the adjustment to the Group's interest in the Kingfisher Redditch Joint Venture. The Group had previously accounted for its interest as an associate on the basis it held a 20 per cent. share and exercised significant influence through its representation on the general partner board and through acting as the property and asset manager. An agreement to restructure the Kingfisher Redditch Joint Venture holding was in place at 30 December 2018 and formally completed on 8 March 2019. As a result of this the Group's equity holding was diluted to 12 per cent. and while the Group continues to act as property and asset manager it no longer has representation on the General Partner board. On this basis, the Group no longer exercises significant influence and consequently the Group's remaining interest in the Kingfisher Limited Partnership was reclassified to a fixed asset investment at 30 December 2018.
^l This revaluation loss resulted in a NAV of £373.7 million and EPRA NAV of £377.2 million compared to the December 2018 respective balances of £433.0 million and £431.7 million. Basic NAV per share and EPRA NAV per share were 51p and 52p respectively, representing a reduction of 9 pence and 7 pence respectively against the interim results (December 2018: 60 pence and 59 pence respectively).

1.2 Property portfolio valuation

	30 June 2019	30 December 2018
Property at independent valuation	£m	NIY %	£m	NIY %
The Mall Blackburn	82.7	8.42	96.8	7.70
Marlowes Hemel Hempstead	41.7	7.74	44.9	7.35
The Exchange Ilford	82.4	5.54	86.2	5.69
The Mall Luton	173.0	7.25	195.4	7.01
The Mall Maidstone	64.1	8.00	69.0	7.74
The Mall Walthamstow	127.0	4.85	124.6	5.01
The Mall Wood Green	226.4 —–———	5.28 —–———	238.3 —–———	5.12 —–———
	797.3 —–———	6.34 —–———	855.2 —–———	6.23 —–———

^l The valuation at 30 June 2019 was £797.3 million, reflecting a net initial yield of 6.34 per cent. (June 2018: NIY 6.04 per cent.). Net of capital expenditure spent in the period of £5.9 million (including tenant incentives) this resulted in a revaluation loss on wholly-owned assets of £63.0 million. Yields on the Group's London assets saw some inward shift reflecting progress on residential options and other alternative uses. Valuations on the Group's regional assets saw declines largely reflecting outward market yield shift and the loss of income, most prominently Debenhams, through CVA's or retailer restructurings.

1.3 Group debt

^l The Group's debt facilities are outlined in the table below. In light of the fall in valuations, the net debt to value ratio increased to 48 per cent. over the period.

30 June 2019	Debt1 £m	Cash2 £m	Net debt £m	Loan to value3 %	Net debt to value3 %	Average interest rate %	Fixed %	Duration to loan expiry Years	Duration with extensions Years
Four Mall assets	265.0	(10.0)	255.0	53	51	3.33	100	6.4	7.1
Mall Luton	107.5	(6.7)	100.8	62	58	3.14	100	4.5	4.5
Marlowes Hemel
Hempstead	26.9	(0.8)	26.1	65	63	3.42	100	3.6	3.6
Exchange Ilford	39.0	(1.7)	37.3	47	45	2.76	100	4.7	4.7
Group RCF	– ———	(6.1) ———–	(6.1) ———	———	———	3.81 ———	– ———	2.6 ———	2.6 ———
On balance sheet debt	438.4 ———	(25.3) ———	413.1 ———	55 ———	52 ———	3.26 ———	94 ———	5.5 ———	5.9 ———

1 Excluding unamortised issue costs.

2 Excluding cash beneficially owned by tenants.

3 Debt and net debt divided by investment property at valuation.

l In early March 2019, the Group agreed a combined restructuring of its Marlowes Hemel Hempstead loan and revolving credit facility. Part of the revolving credit facility was replaced with a £7 million capital expenditure facility that will help to part fund the development of the cinema and related leisure works. The facility has effectively been reset on a development basis with income and LTV covenants relaxed or waived for the next two years. The revolving credit facility has been rebased to a £15 million facility with improved headroom on both total net worth and LTV covenants.
^l The Group was compliant with covenants in its banking facilities from the period beginning 31 December 2018 and ended on 30 June 2019.

1.4 Operating Performance

^l There were 37.2 million shopper visits across the Group's portfolio in the first half of 2019, representing a like-for-like decline of 1.8 per cent. however, performance continued to outperform the national index which was down 3.6 per cent.. This highlights the continued resilience of the Group's assets and demonstrates the important role they play in fulfilling the needs of their local community. It also provides a useful indicator as to the impact of the Group's strategy as the implementation of the family zones in the Exchange Ilford and Marlowes Hemel Hempstead has resulted in positive movements. Additionally, the relevance of the Company's centres in the omnichannel trading environment was further demonstrated by growth in click & collect transactions in the first half of the year, up 19 per cent. year on year. Alternatively, car park usage declined but car park income remained robust at £5.1 million, representing an increase of 0.2 per cent. on a like-for-like basis with the interim period ended 30 June 2018.
^l As at the date of this document, there have been eight CVAs involving national retailers or leisure operators this year affecting more than 1,400 stores across the UK. Four of the CVAs – Debenhams, Arcadia, Monsoon/Accesorize and Select – have impacted the Group's portfolio across 13 units. The total expected impact upon 2019 NRI of all of the 2019 CVAs and Administrations experienced to date is £1.3 million, of which the majority (£1.1 million) will be borne in the second half of the year, or £2.3 million on an annualised basis.
^l Set out below is the rental income and occupancy statistics as at 30 June 2019 together with a comparison as against the position for the year ended 30 December 2018 and the interim period ended 30 June 2018. The contracted rent of £61.1 million showed a decline of £1.2 million from the contracted rent as at 30 June 2018 and £2.3 million from the contracted rent for the year ended 30 December 2018 which reflected the impact of the CVAs and retailer restructurings. The passing rent at £59.8 million was lower than the passing rent for the year

ended 30 December 2018 but increased by £0.6 million from the previous year's interim results (June 2018). The occupancy percentage of the Group's assets remained strong at 96.8 per cent. and was broadly in line with the occupancy level over the last eighteen months.

Rental income and occupancy

	30 June 2019	30 December 2018	30 June 2018
Contracted rent (£m)	61.1	63.4	62.3
Passing rent (£m)	59.8	60.7	59.2
Occupancy (%.)	96.8 —–———	97.0 —–———	96.9 —–———

1.5 Capital expenditure investment

^l From 30 December 2018 to 30 June 2019, the Group invested £5.9 million of capital expenditure (including tenant incentives).
^l At Marlowes Hemel Hempstead the transformation of the centre court was completed to deliver a new family zone, building on the successful delivery of this concept in the Exchange Ilford in 2018. The Group intends to launch the new Tinies childcare offer at Marlowes Hemel Hempstead by the end of 2019. These developments together with the upgrade to the guest amenities completed in 2018 and the mall ambiance works completed in 2019, have advanced the repositioning of Marlowes Hemel Hempstead. The Group has plans to regenerate the food and beverage offering with a grab and go development and to install a cinema. These works are due to start in 2021 with the aim of completing the works in 2021.

2. YEAR ENDED 30 DECEMBER 2018

2.1 Profitability Amounts in £m Year to 30 December 2018 Year to 30 December 2017 Net rental income (Wholly-owned assets) 51.9 51.6 Net interest (18.9) (18.7) Central operating costs net of external fees (4.3) (5.9) Kingfisher Redditch 0.4 0.7 Snozone profit (indoor ski operation) 1.5 1.5 Tax charge (0.1) (0.1) —–——— —–——— Adjusted Profit 30.5 29.1 Adjusted Earnings per share (pence) 4.23 4.10 Reconciliation of Adjusted Profit to statutory result Adjusted Profit 30.5 29.1 Property revaluation (including Deferred Tax) (52.5) (6.3) Loss on disposal of Ipswich2 (3.8) – Gain on financial instruments 2.6 1.1 Refinancing costs – (0.5) Other items (2.4) (1.0) —–——— —–——— IFRS (loss)/profit (25.6) 22.4 —–——— —–———

^l The adjusted profit and adjusted earnings per ordinary share showed increases of 4.8 per cent. and 3.2 per cent. respectively, reflecting growth in NRI and a £1.6 million reduction in net central operating costs, driven by the Group's implemented cost initiatives over the year ended 30 December 2018. The NRI from wholly-owned assets increased by £0.3 million or 0.5 per cent. from the previous year. This included the benefit of £4.7 million of NRI from the Exchange, Ilford, which was acquired on 8 March 2017. Without the NRI from the Exchange Ilford, the NRI was in line with the NRI for the year ended 30 December 2017. The net interest on loan increased by £0.2 million compared to the year ended 30 December 2017 due to the impact of the Exchange Ilford acquisition.

^l The net central operating costs improved by £1.6 million compared to the year ended 30 December 2017 as a result of the Group's cost improvement plans.
^l The income contribution from the Kingfisher Redditch Joint Venture fell from £0.7 million for the year ended 30 December 2017 to £0.4 million for the year ended 30 December 2018 due to lower NRI and a higher interest charge following the refinancing of the King Redditch Joint Venture which completed in July 2017.
^l Including the share of revaluation loss resulting from the King Redditch Joint Venture the total revaluation loss of investment properties for the year ended 30 December 2018 was £52.5 million. This was the key component driving the loss for the period ended 30 December 2018 of £25.6 million. Additionally the disposal of Ipswich represented a write down of £3.8 million following the true-up of deferred consideration after the end of the two year earn out window.

2.2 Property portfolio valuation and Net Asset Value

	30 December 2018	30 December 2017
Property at independent valuation	£m	NIY %	£m	NIY %
London
Exchange Ilford	86.2	5.69	82.4	6.54
Mall Walthamstow	124.6	5.01	107.7	5.25
Mall Wood Green	238.3 —–———	5.12 —–———	231.2 —–———	5.25 —–———
	449.1	5.20	421.3	5.51
South East
Marlowes Hemel Hempstead	44.9	7.35	54.0	6.88
Mall Luton	195.4	7.01	214.0	6.35
Mall Maidstone	69.0	7.74	76.0	6.70
	309.3 —–———	7.23 —–———	344.0 —–———	6.51 —–———
Regional
Mall Blackburn	96.8	7.70	121.3	6.65
Wholly-owned portfolio	—–——— 855.2	—–——— 6.23	—–——— 886.6	—–——— 6.06
	—–———	—–———	—–———	—–———

^lThe valuation of the Group's wholly-owned portfolio as at 30 December 2018 was £855.2 million, reflecting a net initial yield of 6.23 per cent.. The values of the Group's London assets increased over the year, driven primarily by income growth in Walthamstow following on from the remerchandising of the previous BHS unit into a new Lidl, gym, restaurant and Pret store, which was supported by continued strong investment demand and underpinned by alternative use values. The Group's assets outside of London were significantly impacted by negative sentiment towards retail assets with the headline valuation of the Group's three South East assets declining by 10.1 per cent. and Blackburn falling by over 20 per cent.
^l As a result, NAV decreased to £433.0 million and EPRA NAV to £431.7 million (December 2017: £481.4 million and £482.6 million), respectively, reflecting the net impact of the fall in valuations and the capital expenditure of £18.5 million. On a per share basis basic NAV fell by 7p to 60p and EPRA NAV fell by 8p to 59p from the 2017 equivalents.

2.3 Group debt

^l The Group's debt facilities for the year ended 30 December 2018 are outlined in the table below. The fall in valuations resulted in LTV increasing to 51 per cent. and the net debt to value increasing to 48 per cent..

30 December 2018	Debt1 £m	Cash2 £m	Net debt £m	Loan to value3 %	Net debt to value3 %	Average interest rate %	Fixed %	Duration to loan expiry Years	Duration with extensions Years
Four Mall assets	265.0	(9.3)	255.7	50	48	3.33	100	6.9	7.6
Marlowes Hemel
Hempstead	26.9	(1.7)	25.2	60	56	3.32	100	4.1	4.1
Exchange Ilford	39.0	(2.3)	36.7	45	43	2.76	100	5.2	5.2
Mall Luton	107.5	(5.2)	102.3	55	52	3.14	100	5.0	5.0
Group RCF	– ———	(8.8) ———–	(8.8) ———	– ———	– ———	3.87 ———	– ———	3.1 ———	3.1 ———
On balance sheet debt	438.4 ———	(27.3) ———	411.1 ———	51 ———	48 ———	3.27 ———	94 ———	5.9 ———	6.3 ———

1 Excluding unamortised issue costs.

2 Excluding cash beneficially owned by tenants.

3 Debt and net debt divided by investment property at valuation.

^l In early March 2019, the Group agreed a combined restructuring of its Marlowes Hemel Hempstead loan and revolving credit facility. As part of this the revolving credit facility was rebased to a £15 million facility with improved headroom on both total net worth and LTV covenants.
^l The Group was compliant with covenants in its banking facilities during the financial year ending 30 December 2018.

2.4 Operational Performance

^l During the financial year ended 30 December 2018, 87 new lettings and renewals were completed at a combined average premium of 3.1 per cent. to previous passing rent and a 1.5 per cent. premium to ERV.

	Year ended 30 December 2018
New Lettings
Number of new lettings	42
Rent from new lettings	£2.9m
Comparison to ERV1	+0.9 % —–———
Renewals settled
Renewals settled	45
Revised rent	£2.6m
Comparison to ERV1	+2.0 % —–———
Combined new lettings and renewals
Comparison to previous rent1	+3.1 %.
Comparison to ERV1	+1.5 % —–———
Rent reviews
Reviews settled	21
Revised passing rent	£2.7m
Uplift to previous rent	+0.7 % —–———

1 For lettings and renewals (excluding development deals and leases impacted by CVA's) with a term of five years or longer and which did not include a turnover element.

^l During 2018 there were approximately 78.8 million visits to the Group's centres. The footfall in 2018 increased by 1.2 per cent. on a like-for-like basis for 2017 across the Group's wholly-owned portfolio, which represented a significant outperformance of the national index which declined by 3.5 per cent.. The footfall performance was strongest at the Group's centres which are the furthest advanced in terms of delivering the Group's strategy, most notably in Exchange Ilford and the Mall Walthamstow. Income from car parks increased to £10.7 million, which represented an improvement of 2.3 per cent. on a like-for-like basis for 2017. The click and collect transaction volumes continued to grow during 2018, increasing by 29 per cent. from 2017, further reinforcing the strength of the Group's position in the omnichannel shopping experience and cost effective last mile fulfilment.
^l There were 35 units impacted by administrations or CVAs during 2018 resulting in a loss of £1.5 million in NRI for the period ended 30 December 2018. The pro-rata impact, prior to any mitigation or re-letting of any closed units, is approximately double the impact during 2017.

Rental income and occupancy

30 December 2018	30 December 2017
	64.1
	61.0
97.0	97.3 —–———
	63.4 60.7 —–———

^l The contracted and passing rent showed small declines of £0.7 million (1.1 per cent.) and £0.3 million (0.5 per cent.) respectively demonstrating the resilience of the portfolio in the face of CVAs and insolvencies. At 30 December 2018, there was £2.7 million of contracted rent in respect of tenants in a rent-free period, of which £1.9 million were to convert to passing rent during 2019. The occupancy levels of the Group's assets remained strong at 97.0 per cent. which was in line with the occupancy level for 2017 of 97.3 per cent.

2.5 Capital expenditure

^l During 2018, the Group invested £18.5 million of capital expenditure across the Group's portfolio, enabling the Group to progress its asset masterplans and reposition projects consistent with the Group's strategy. A number of major projects were progressed or completed during 2018 including:
(a) the completion of a £5.2 million office fit-out at Arndale House, the Mall Luton (of which £4.3 million was spent in 2018);
(b) obtaining planning permission for the cinema development (costing £0.4 million) at Marlowes Hemel Hempstead and completion of the installation of a new facade for the Fareham House high street block (costing £0.6 million);
(c) the delivery of new family zone at Exchange Ilford (costing £1.7 million in 2018);
(d) obtaining planning consent received in July 2018 for approximately 500 new homes and 80,000 square feet of new retail and leisure space at the Mall Walthamstow incorporating a dedicated new tube entrance within the scheme (£1.1 million spend in 2018); and
(e) the completion of guest facilities at Marlowes Hemel Hempstead, Exchange Ilford, the Mall Wood Green (costing a combined £2.1 million in total in 2018).

3. YEAR ENDED 30 DECEMBER 2017

Amounts in £m	Year to 30 December 2017	Year to 30 December 2016
Net rental income
Wholly-owned assets	51.6	50.4
Kingfisher, Redditch	1.6	1.7
Buttermarket, Ipswich	– —–———	0.5 —–———
	53.2	52.6
Net interest	(19.6)	(20.3)
Snozone profit (indoor ski operation)	1.5	1.4
Central operating costs net of external fees	(5.9)	(6.9)
Tax charge	(0.1) —–———	– —–———
Adjusted Profit	29.1	26.8
Adjusted Earnings per share (pence)	4.10p	3.82p
Reconciliation of Adjusted Profit to statutory result
Adjusted Profit	29.1	26.8
Property revaluation (including Deferred Tax)	(6.3)	(14.5)
Loss on disposals	–	(2.6)
Gain/(Loss) on financial instruments	1.1	(2.5)
Refinancing costs	(0.5)	(11.0)
Other items	(1.0) —–———	(0.6) —–———
IFRS Profit/(loss) for the period	22.4 —–———	(4.4) —–———

^l The adjusted profit and adjusted earnings per share showed increases of 8.6 per cent. and 7.3 per cent. respectively from 2016, reflecting growth in NRI (see breakdown below), lower interest costs following the refinancing of the Mall assets and a £1.0 million reduction in net central operating costs, reflecting the benefit of completed and ongoing cost initiatives through 2017. Gross central costs fell from £9.6 million in 2016 to £8.4 million in 2017, reflecting a reduction of £1.2 million.

Wholly-owned assets Net Rental Income

	Year to	Year to
Amounts in £m	30 December 2017	30 December 2016
Like-for-like (the Mall Blackburn, Mall Luton,
Mall Maidstone, Mall Walthamstow,
Mall Wood Green)	43.5	42.7	+1.9 %
Marlowes Hemel Hempstead – acquired
February/March 2016	3.7	3.5
Camberley (sold November 2016) and other disposals	–	4.2
Exchange Ilford – acquired 8 March 2017	4.4	–
Net rental income (NRI)	51.6	50.4	+2.4 %

Net Interest

	Year to
30 December 2017	30 December 2016

14.0	14.0
1.0	1.4
3.4	3.6 —–———
18.4	19.0
	0.8
	0.1
0.3	0.4 —–———
19.6	20.3 —–———
	Year to —–——— 0.9 – —–——— —–———

1 Notional interest charge with offsetting opposite and materially equal credit within other property operating expenses.

^l The decrease in interest reflected the lower interest cost and amortisation charge following the refinancing of the Mall assets that completed on 4 January 2017 and the acquisition of Ilford in March 2017.

3.2 Property Portfolio Valuation and Net Asset Value

		30 December 2017	30 December 2016
Property at independent valuation	£m	NIY %	£m	NIY %
Mall Blackburn	121.3	6.65	124.1	6.53
Marlowes Hemel Hempstead	54.0	6.88	54.6	7.07
Exchange Ilford1	82.4	6.54	78.0	6.70
The Mall Luton	214.0	6.35	207.0	6.35
The Mall Maidstone	76.0	6.70	80.0	6.78
The Mall Walthamstow	107.7	5.25	103.3	5.25
The Mall Wood Green	231.2 —–———	5.25 —–———	225.1 —–———	5.25 —–———
Wholly-owned portfolio	886.6 —–———	6.06 —–———	872.1 —–———	6.08 —–———

1 Ilford at acquisition price on 8 March 2017 in the 30 December 2016 column.

^l The valuation of the Group's wholly-owned portfolio at 30 December 2017 was £886.6 million, reflecting a net initial yield of 6.06 per cent.. This was marginally below the 30 December 2016 valuation of £794.1 million after allowing for capital expenditure in the period of £17.5 million and the £78.0 million acquisition of the Exchange Ilford in March 2017 (excluding acquisition costs of approximately £1.0 million). Yields on the Group's London and South East assets proved resilient and were largely unchanged over the period, with the decline in the Mall Maidstone yields reflecting the unlet BHS unit. Additionally the Mall Blackburn experienced a slight decline in valuation due to outward market yield shifts partially offset by an increase in valued income.
^l The NAV at £481.4 million and EPRA NAV at £482.6 million represented a marginal increase from the previous year (December 2016: £477.6 million and £481.5 million respectively) with retained profit offsetting the minor decrease in valuations net of capital expenditure (see below). On a per share basis basic NAV and EPRA NAV fell by 1p to 67p due to a slightly increased issued share capital resulting from scrip dividend scheme and the vesting of the Company's LTIP.

3.3 Group debt

^l The refinancing activity completed in the early part of 2017 delivered a funding cost fixed at 3.25 per cent. and secured over a weighted average 6.7 year maturity, with the flexibility to extend maturity to 7.3 years (if all extensions are exercised).

30 December 2017	Debt1 £m	Cash2 £m	Net debt £m	Loan to value3 %	Net debt to value3 %	Average interest rate %	Fixed %	Duration to loan expiry Years	Duration with extensions Years
30 December 2017	£m ———	£m ———–	£m ———	% ———	% ———	% ———	% ———	Years ———	Years ———
Four Mall assets	255.0	(8.4)	246.6	48	46	3.36	100	7.6	8.6
Mall Luton	107.5	(5.8)	101.7	50	48	3.14	100	6.0	6.0
Marlowes Hemel
Hempstead	26.9	(1.1)	25.8	50	48	3.32	100	4.1	5.1
Exchange Ilford	39.0	(2.4)	36.6	47	44	2.76	100	6.2	6.2
Group RCF	– ———	(6.7) ———–	(6.7) ———	– ———	– ———	3.40 ———	– ———	4.1 ———	4.1 ———
On balance sheet debt	428.4 ———	(24.4) ———	404.0 ———	48 ———	46 ———	3.25 ———	94 ———	6.7 ———	7.3 ———

1 Excluding unamortised issue costs.

2 Excluding cash beneficially owned by tenants.

3 Debt and net debt divided by investment property at valuation.

^l The Group was compliant with covenants in its banking facilities during the financial year ending 30 December 2017.

3.4 Operational Performance

^l During 2017, there were 79 new lettings and renewals at a combined average premium of 10.3 per cent. to previous passing rent and an 8.4 per cent. premium to ERV.

	Year ended 30 December 2017
New Lettings
Number of new lettings	47
Rent from new lettings (£m)	£2.7m
Comparison to ERV1 (%)	+8.7 % —–———
Renewals settled
Renewals settled	32
Revised rent (£m)	£1.7m
Comparison to ERV1 (%)	+8.1 % —–———
Combined new lettings and renewals
Comparison to previous rent1	+10.3 %
Comparison to ERV1	+8.4 % —–———
Rent reviews
Reviews settled	32
Revised passing rent (£m)	£5.2m
Uplift to previous rent (%.)	+1.2 % —–———

1 For lettings and renewals (excluding development deals) with a term of five years or longer and which do not include a turnover element.

^l At the Mall Walthamstow, new lettings were agreed with Smiggle, Gökyüzü (a Turkish restaurant) and Lidl, all of which opened and began trading in January 2018. At the Mall Wood Green, new lettings were completed with River Island, Blue Inc, Five Guys and Pak cosmetics, while Aldo and Superdrug renewed their existing leases.

^l At the Mall Blackburn, Specsavers took a new unit and River Island, Scotts, Superdrug, The Perfume Shop and Thorntons renewed their existing leases. Genus and Superdrug agreed new leases at the Mall Maidstone and the Card Factory signed a five year term lease at the Exchange Ilford. At the Mall Luton, Kiko and Scotts opened new units from a split of the former USC unit, while KFC agreed a 10 year lease in the new food court and FootLocker renewed for a further five year term lease.
^l In December 2017 the Company obtained planning consent subject to the completion of a satisfactory s106 agreement for the proposed extension at the Mall Walthamstow. The proposals included the addition of 80,000 square feet of new retail and leisure space and approximately 500 new homes, as well as improved public spaces and community facilities.
^l In Marlowes Hemel Hempstead planning consent was granted in October 2017 for the transformational plans to create a leisure hub with up to six new restaurant units, anchored by a cinema. Terms were also agreed with a leading cinema operator. Furthermore, work completed to renew the atrium roof was well advanced, the cost of which was being met by the previous owner of the centre.

Rental Income

	30 December 2017	30 December 2016
Contracted rent (£m)	64.1	55.8
Passing rent (£m)	61.0	53.0
Occupancy (%)	97.3 —–———	95.4 —–———

^l The increase in contracted and passing rent reflected the acquisition of the Exchange Ilford in March 2017 and the like-for-like growth of 3.1 per cent. and 3.0 per cent. respectively. At 30 December 2017, there was £3.1 million of contracted rent deriving from tenants in a rent-free period, of which £3.0 million would convert to passing rent in 2018. The strong letting activity during the year resulted in an improvement in occupancy to 97.3 per cent. at the year end.

Insolvencies Year ended Year ended December 2017 December 20161 Insolvencies (units) 15 18 Passing rent of insolvencies (£m) 0.7 2.4 —–——— —–———

^l The number of insolvencies in 2017 was similar to 2016, but the value was significantly reduced owing to the material impact of the BHS administration in 2016. The most significant insolvency during the period was Blue Inc, involving five units with a total rent of £0.3 million. As at 30 December 2017, five of the fifteen units affected by insolvency had been re-let and eight were continuing to trade as usual.
^l During 2017, there were approximately 76 million visits to the Group's centres. For the second half of 2017, the Group's wholly-owned shopping centres achieved a 0.5 per cent. increase in footfall compared to a NRI figure of –2.9 per cent. Additionally, footfall for the year as a whole increased by 0.1 per cent., again significantly ahead of the NRI which showed a decline of 2.8 per cent.
^l Usage of the car park remained stable and car park income was £10.2 million, an increase of 7.2 per cent. on a like-for-like basis with the year ended 2016. The Collect+ service continued to expand with in excess of 42,000 packages handled in the year, an increase of 24 per cent. year on year.

3.5 Capital expenditure

During 2017 the Group invested £17.5 million of capital expenditure. A number of major projects were concluded over the period including:

^l At the Mall Wood Green, the new 78 bedroom Travelodge opened in October 2017 following a £6.4 million investment project.
^l At the Mall Walthamstow, Lidl and The Gym both launched successfully around the turn of 2018. Gökyüzü, a new Turkish restaurant for a local operator which has traded very successfully at our Mall Wood Green centre for a number of years, opened in February 2018 and two further retail units totalling 5,000 sq ft were also created. All of the above were formed out of the former BHS store.
^l At the Mall Blackburn, Wilko opened in September 2017 at the refurbished former BHS unit. Sports Direct also continues to trade from the unit, now via a direct lease.

4. YEAR ENDED 30 DECEMBER 2016

4.1 Profitability

Amounts in £m	Year to 30 December 2016	Year to 30 December 2015
Net rental income
Wholly-owned assets (see analysis on next page)	50.4	47.3
Kingfisher, Redditch	1.7	1.8
Buttermarket, Ipswich	0.5 —–———	0.2 —–———
	52.6	49.3
Net interest (see analysis on next page)	(20.3)	(19.5)
Snozone profit (indoor ski operation)	1.4	1.4
Central operating costs net of external fees	(6.9) —–———	(7.2) —–———
Adjusted Profit	26.8	24.0
Adjusted Earnings per share (pence)	3.8p	3.4p
Reconciliation of Adjusted Profit to statutory result
Adjusted Profit	26.8	24.0
Property revaluation (including Deferred Tax)	(14.5)	74.8
(Loss)/profit on disposals	(2.6)	2.5
Loss on financial instruments	(2.5)	(0.8)
Refinancing costs	(11.0)	-
Other items	(0.6) —–———	(0.5) —–———
(Loss)/profit for the period	(4.4) —–———	100.0 —–———

^l The adjusted profit and adjusted earnings per share increased 11.7 per cent. reflecting good operational performance in the period together with the positive impact from the Marlowes Hemel Hempstead acquisitions, net of the sale of The Mall, Camberley. The loss experienced for the period included £11.0 million of refinancing costs triggered by serving notice on the existing debt facility on the five Mall assets on 28 December 2016. This comprised £7.6 million of fixed rate loan redemption costs and the non-cash write off of £3.4 million unamortised financing costs at 30 December 2016. The central operating costs net of external fees improved by £0.3 million from the previous year.
^l The gross rental income increased by 7.8 per cent. to £62.0 million and NRI by 6.6 per cent. to £50.4 million from the previous year.

Net Interest

Amounts in £m	Year to 30 December 2016	Year to 30 December 2015
Wholly-owned assets
Net Interest on loans	14.0	13.0
Amortisation of refinancing costs	1.4	1.3
Notional interest charge on head leases1	3.6 —–———	3.6 —–———
	19.0	17.9
Kingfisher, Redditch	0.8	0.8
Buttermarket, Ipswich	0.1	–
Central	0.4 —–———	0.8 —–———
Net Group interest	20.3 —–———	19.5 —–———

1 Notional interest charge with offsetting opposite and materially equal credit within other property operating expenses.

^l The increase in interest payable in respect of the Group's wholly-owned assets resulted from the interest incurred on the Hemel Hempstead loan of approximately £1.1 million since its acquisition.

4.2 Property Portfolio Valuation and Net Asset Value

	30 December 2016	30 December 2015
Property at independent valuation	£m	NIY %	£m	NIY %
Mall Blackburn	£124.1m	6.53%	£127.8m	6.37%
Camberley1	–	–	£87.8m	6.14%
Marlowes Hemel Hempstead	£54.6m	7.07%	–	–
Mall Luton	£207.0m	6.35%	£215.1m	6.00%
Mall Maidstone	£80.0m	6.78%	£81.4m	6.85%
Mall Walthamstow	£103.3m	5.25%	£94.3m	5.49%
Mall Wood Green	£225.1m —–———	5.25% —–———	£216.3m —–———	5.25% —–———
Wholly-owned portfolio	£794.1m —–———	6.01% —–———	£822.7m —–———	5.89% —–———

1 Camberley sold on 11 November 2016 for £86.0 million at a net initial yield of 5.9 per cent..

^l The valuation of the Group's wholly-owned portfolio at 30 December 2016 was £794.1 million. On a like for like basis, excluding the impact of the sale of Camberley in November 2016 and the acquisition of Hemel Hempstead in February/March 2016, the value increased by £4.6 million resulting in a revaluation loss of £14.2 million for the year after allowing for capital expenditure and tenant incentive and letting fee amortisation.
^l The Group experienced a reduction of 1.6 pence to the NAV per share primarily due to the costs associated with putting in place the new long-term debt on the five Mall assets. A further 1.2 pence reduction was due to the 1 per cent. increase in stamp duty implemented during the year and a 0.9 pence reduction related to the decline in property values.

4.3 Group debt

^l The group debt analysis for 2016 was prepared on a proforma basis to reflect the refinancing of the debt on the five Mall assets that completed on 4 January 2017 as the notice to repay the existing debt had been served on 28 December 2016 and the redemption costs were reflected as a charge in the profit for the year ended 30 December 2016. The table demonstrates the impact of the sale of the Buttermarket Ipswich on 17 February 2017 and acquisition of the Exchange Ilford on 8 March 2017.

Group share 30 December 2016	Debt1 £m	Cash2 £m	Net debt £m	Loan to value3 %	Net debt to value3 %	Average interest rate %	Fixed %	Duration to loan expiry Years	Duration with extensions Years
Mall assets	362.5	(17.3)	345.2	49	47	3.27	100	7.8	8.8
Marlowes Hemel
Hempstead	26.9	(1.9)	25.0	49	46	3.32	100	4.0	6.0
Group RCF	– ———	(41.6) ———–	(41.6) ———	n/a ———	n/a ———	3.52 ———	– ———	2.4 ———	2.4 ———
On balance sheet
debt	389.4	(60.8)	328.6
Buttermarket Ipswich	9.7	(0.1)	9.6	36	36	3.51	–	–	–
Kingfisher Redditch	16.8 ———	(0.8) ———–	16.0 ———	55 ———	52 ———	3.66 ———	100 ———	2.3 ———	2.3 ———
Off balance sheet
debt	26.5 ———	(0.9) ———–	25.6 ———	———	———	———	———	———	———
Proforma see-through
debt	415.9 ———	(61.7) ———	354.2 ———	49 ———	42 ———	———	———	———	———

Adjusted for the sale of Buttermarket Ipswich and acquisition of Exchange Ilford:

Buttermarket Ipswich disposal Exchange Ilford	(9.7)	(9.7)	(19.4)
acquisition	39.0	40.3	79.3	50	50	2.76	100	7.0	7.0
	———	———–	———	———	———	———	———	———	———
See-through debt	445.2	(31.1)	414.1	49	46	3.26	94	7.0	7.8
at time of results	———	———	———	———	———	———	———	———	———

1 Excluding unamortised issue costs.

2 Excluding cash beneficially owned by tenants.

Debt and net debt divided by investment property at valuation.

Luton

^l As part of the refinancing The Mall Luton was transferred out of The Mall Limited Partnership which held the other four assets. The Mall Luton is now held in a separate structure which allowed the Group to fund this asset separately providing greater flexibility.

The Hemel Hempstead debt facility

^l The Group entered into the £26.9 million Hemel Hempstead loan, which was drawn in two tranches in February and March 2016, for an initial five year term with two one year extension options available at the end of each of the first two years.

The Exchange Ilford debt facility

^l The Group entered into a £39 million facility which was drawn in full on completion of the acquisition of the Exchange Ilford on 8 March 2017. The debt was 100 per cent. hedged for the full term using interest rate swaps resulting in an all-in cost of debt of 2.76 per cent. in 2016.

Group Revolving Credit Facility (RCF)

^l The interest on the facility was charged at a margin of 3.0 per cent. per annum above LIBOR. A non-utilisation fee of 1.5 per cent. was also payable. The Group did not draw on this facility during 2016.

Covenants

^l The Group and its associates and joint ventures were compliant with their banking and debt covenants for the year ended 30 December 2016.

4.4 Operational performance

^l The Group's contracted rent increased by 1.6 per cent. on a like-for-like basis with 2015, driven by a strong letting performance despite the impact of the BHS administration which initially reduced both passing and contracted rent by £1.3 million. By 30 December 2016, £0.6 million of income had been contracted in relation to the BHS let space and a further £0.3 million had been signed since 30 December 2016. In total, as at 30 December 2016, there was £2.7 million of contracted rent owed by tenants in a rent free period of which £2.6 million would convert to passing rent during 2017. There was also a further £1.8 million of contracted rent where the income would commence once the works to create or convert the units had completed.
^l The occupancy levels as at 30 December 2016 reflected the impact of the BHS administration where the units involved closed during the second half of the year. Whilst good progress was made to re-let the units, the impact of BHS on occupancy at the 2016 year end accounted for 1.2 percentage points of the decrease in occupancy levels.

New lettings, renewals and rent reviews
Wholly-Owned Centres excluding Camberley	Year ended 30 December 2016
Number of new lettings	58
Rent from new lettings (£m)	£4.0m
Comparison to ERV1 (%)	+2.3 % —–———
Renewals settled	24
Revised rent (£m)	£1.6m
Comparison to ERV1 (%)	+1.7 %
Lettings and renewals compared to previous rent	+18 % —–———
Rent reviews settled	24
Revised passing rent (£m)	£3.3m
Uplift to previous rent (£m)	–
Comparison to ERV (%)	+3.5 % —–———

For lettings and renewals with a term of five years or longer which did not include a turnover rent element

Highlights of letting activity

^l There was strong leasing activity across the Group's wholly-owned portfolio reflecting the affordability of the centres units, with £4.0 million of rental income achieved through new lettings and a further £1.6 million of rent on renewals settled.
^l During 2016, good progress was made in increasing the leisure element in the Group's schemes with 13 new leisure lettings completing with a rent of £0.8 million. The increasing leisure offer, which stood at over 10 per cent. of the portfolio in 2016 compared to approximately 7 per cent. at the end of 2014, attracted a wider customer base and increased dwell time at the Group's centres.
^l At the Mall Blackburn in addition to Wilko, lettings were agreed with Costa, Burger King and Muffin Break totalling 6,500 square feet on terms of at least 10 years. At the Mall Luton, Holland & Barrett acquired a lease in respect of a new 3,700 square feet store whilst JD Sports upsized to a 5,500 square feet unit and Schuh took a 3,400 square feet unit, all for a term of 10 years. Lettings were also completed on a cluster of five new catering offers, further improving the leisure offering at the centre.
^l At the Mall Maidstone, TJ Hughes agreed a 10 year lease of a 33,000 square feet unit and Poundland completed a 10 year lease on a 6,400 square feet store. Holland & Barrett relocated and upsized to 5,000 square feet unit and several other occupiers including Greggs, McDonalds and Pizza Hut refitted their premises following the general refurbishment of the Mall Maidstone scheme that completed in the summer of 2016.
^l At the Mall Walthamstow, in addition to The Gym and Lidl lettings, Holland & Barrett took a 4,400 square feet unit on a 10 year term and Shoe Zone and Select each signed a lease for a term of five years for a 3,300 square feet store.
^l At the Mall Wood Green, lettings were agreed with Choice and Footlocker for a term of 10 years for units of 5,900 and 3,800 square feet respectively. Pret also agreed a 15 year lease for a unit with 2,500 square feet at the entrance to the Wood Green scheme.
^l In Marlowes Hemel Hempstead planning consent was obtained in October 2017 for the transformation of the centre through the creation of a leisure hub with up to six new restaurant units, anchored by a cinema.

Administrations and Insolvency
Wholly-owned Centres	Year ended	Year ended	6 months ended
	30 December 2016	30 December 2015	30 June 2016
Administrations (units)	18	9	12
Passing rent (£m)	2.4	0.5	1.9
	—–———	—–———	—–———

^l In 2016, on a like-for-like basis with 2015, there were twelve administrations accounting for passing rent of £2.4 million, which was largely due to three administrations: AJ Levy Group (affecting seven units) BHS (affecting three units) and Ed's Diner (affecting two units). Eight of the affected units were re-let at an increased level of rent. As at 30 December 2016, there were five units with passing rent of £0.5 million which were affected by tenant administrations where the tenant continued to trade.
^l During 2017 there were approximately 76 million visits to the Group's centres. For the second half of 2017, seven wholly-owned shopping centres achieved a 0.5 per cent. increase in footfall compared to a NRI figure of –2.9 per cent.. Footfall for the year as a whole increased by 0.1 per cent., again significantly ahead of the NRI which showed a decline of 2.8 per cent.
^l Usage of the car park was stable and car park income was £10.2 million, an increase of 7.2 per cent. on a like-for-like basis with 2015. The Collect+ service continued to expand with in excess of 42,000 packages handled in the year, an increase of 24 per cent. year on year.

4.5 Capital expenditure and developments

^l The Group's £65 million capital expenditure plan was announced with The Mall acquisition in 2014. £21.2 million was spent during 2016, bringing the total spend to date in 2016 to £36.1 million. Spending in 2016 included:
(a) £2.9 million at the Mall Blackburn relating to the reconfiguration to create a 15,000 square feet gym and three retail units in the new entrance opposite the redeveloped bus station.
(b) £6.2 million at the Mall Maidstone including the refurbishment and works to secure the letting of the 33,000 square feet anchor store to T J Hughes which reported strong trading.
(c) £4.2 million at Mall Wood Green including the conversion of offices into a 78 bedroom Travelodge and the extension of the gym. The 23,000 square feet gym was completed in September 2016 and the Travelodge works progressed well with completion expected by August 2017. In addition, Deichmann opened its store following the amalgamation of two units to create a new 5,800 square feet unit.

Disposals

The Mall, Camberley

^l The Group completed the sale of The Mall, Camberley to Surrey Heath Borough Council on 11 November 2016 for £86.0 million at a net initial yield of 5.9 per cent. This compared to the value of £75.0 million, and a net initial yield of 7.18 per cent., when Capital & Regional bought out The Mall Fund in 2014. Allowing for the capital expenditure invested and income returned since then this represented an Internal Rate of Return ("IRR") of 10 per cent.

Buttermarket Centre, Ipswich

^l The Group sold its 50 per cent. interest in The Buttermarket Centre in Ipswich to National Grid Pension Fund on 17 February 2017. This realised £13.5 million to the Group after repayment of related debt. The impact of the sale was reflected in the 2016 year end numbers as the investment was reclassified as an asset held for sale as at 30 December 2016.

Acquisitions

The Marlowes Hemel Hempstead

^l On 5 February 2016 the Group completed the acquisition of The Marlowes Shopping Centre for £35.5 million, representing an initial yield of 7.0 per cent., with the vendor funding the replacement of the glazed atrium roof as part of the transaction. The Group subsequently acquired the adjacent Edmonds Parade and Fareham House properties for a total of £18.3 million.

Exchange, Ilford

^l On 8 March 2017 the Group completed the acquisition of Exchange Ilford for £78 million, representing a net initial yield of 6.70 per cent.. The Exchange Ilford is located opposite Ilford train station which will be rebuilt ahead of the opening of Crossrail.

Part 4 ^IHISTORICAL FINANCIAL INFORMATION ON CAPITAL & REGIONAL

The unaudited interim financial statements of Capital & Regional and its subsidiaries for the period beginning 31 December 2018 and ended 30 June 2019 is incorporated by reference into this document, as detailed in Part 9 of this document.

The audited consolidated financial statements of Capital & Regional and its subsidiaries included in the Annual Report and Accounts of Capital & Regional for the years ended 30 December 2018, 2017 and 2016 are incorporated by reference into this document, as detailed in Part 9 of this document.

Deloitte LLP of 1 New Street Square, London EC4A 3HQ is registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales and has issued unqualified audit opinions on the consolidated financial statements of Capital & Regional and its subsidiaries included in the Annual Report and Accounts of Capital & Regional for the years ended 30 December 2018, 30 December 2017 and 30 December 2016.

Part 5 ^IPROPERTY VALUATION REPORTS

This Part A comprises the CBRE Valuation Report, which values the Mall Walthamstow, the Mall Wood Green, the Mall Blackburn and the Exchange Ilford properties owned by the Group as at 30 September 2019.

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VALUATION REPORT

Report Date	7 November 2019
Addressee	The Directors Capital & Regional plc 22 Chapter Street London SW1P 4NP
	Numis Securities Limited 10 Paternoster Square London EC4M 7LT (in their capacity as Sponsor and Joint Financial Advisor)
	J.P. Morgan Securities plc 25 Bank Street Canary Wharf London E14 5JP (in their capacity as Joint Financial Advisor)
The Property	The properties held by Capital & Regional plc (the "Company") as described in Appendix A below.
Ownership Purpose	Investment
Instruction	To value without re-inspecting the unencumbered freehold and long leasehold interests in the properties on the basis of Market Value as at the Valuation Date in accordance with the terms of engagement entered into between CBRE and the Addressees dated 16 October 2019.
Valuation Date	30 September 2019
Capacity of Valuer	External valuer, as defined in the RICS Valuation – Global Standards 2017

Purpose of Valuation	The Valuation has been prepared for a Regulated Purpose as defined in the RICS Valuation – Global Standards 2017 (the "Red Book"). We understand that our valuation report and the Appendices to it (together the "Valuation Report") is required for the purposes of inclusion in an announcement pursuant to Rule 2.7 of the City Code on Takeover and Mergers (the "Code") in relation to a partial offer and share subscription by Growthpoint Properties Limited ("Growthpoint") (the "Announcement"). We will also be required to provide a valuation report that will be included in (i) a combined prospectus and circular (the "Prospectus") in connection with the proposed issue of new ordinary shares of 1 penny each in the capital of the Company and admission of the ordinary shares of the Company to listing on the premium listing segment of the Official List and to trading on the Main Market of the London Stock Exchange and (ii) an offer document (the "Offer Document") to be published by Growthpoint in connection with the proposed partial offer to the shareholders of the Company.
	In accordance with the Red Book we have made certain disclosures in connection with this valuation instruction and our relationship with the Company.
Market Value	£502,600,000 (Five hundred and Two Million, Six Hundred Thousand pounds) exclusive of VAT.
	The valuations have been prepared in accordance with the Red Book and on the basis of "market value" as defined in the Red Book.
	For the avoidance of doubt, we have valued the Properties as real estate assets and the values reported above represent 100% of the Market Values of the assets.
	Our opinion of Market Value is based upon the Scope of Work and Valuation Assumptions attached and has been primarily derived using comparable recent market transactions on arm's length terms.
	We have valued the Properties individually and no account has been taken of any discount or premium that may be negotiated in the market if all or part of the portfolio was to be marketed simultaneously, either in lots or as a whole.
	We are required to show the split of values between

Category	Freehold	Long Leasehold	Short Leasehold*	Total
Investment	£301,100,000	£201,500,000	NIL	£502,600,000
	*Short leasehold is less than 50 years unexpired

Material Change since 30 December

2018

freehold, long leasehold and short leasehold properties and these values are:-

Report Format Appendix A of this Valuation Report contains a short summary of the property details of the Properties. The Valuation Report consists of 23 pages ignoring the Appendix.

We are required pursuant to paragraph 130 of the ESMA update (ESMA/2013/319) of the Committee of European Securities Regulators' (CESR) recommendations for the consistent implementation of the European Commission regulation (EC) n. 809/2004 implementing the Prospectus Directive (as now applicable to the Prospectus Regulation (EU) 2017/ 1129) (the "ESMA Guidelines") to comment on any differences between the valuation figure in this Valuation Report and the valuation figure as at 31 December 2018 included in the Company's latest published annual accounts which are to 30 December 2018.

The Market Values are lower than those reported to the Company for annual accounting purposes as at 31 December 2018, where in aggregate we reported a market value of £545,900,000.

The differences between the valuation as at 31 December 2018 and the present valuation are attributable to a number of factors, including but not limited to:

A number of tenancy changes have occurred including the CVA of Debenhams at Blackburn (£224,399 reduction) and Ilford (£275,625 reduction). Further CVAs and administrations have impacted the shopping centres leading to a reduction in both the current income received by the Company and the estimated rental values applicable to the Properties. In addition, certain tenancies have expired to which the relevant tenant has either renewed at a rental level that is lower

	than it was previously paying or vacated the unit.
	The decline in value has also been caused by the continuing deterioration in the capital markets leading to an increase in the returns required resulting in a fall in values.
	Conversely the potential residential developments at Wood Green and Walthamstow have moved forward and the completion of a new Travelodge at Wood Green has increased the value of that Centre offsetting part of the decline in the Properties.
Market Conditions	Continuing concern about the retail occupational market remains. Particularly, the structural change in the retail occupational market show no signs of slowing with online purchases continuing to increase and a number of retailers and A3 operators finding their margins continuing to come under increasing pressure.
	The shopping centre investment market also remains subdued with limited debt available to support any acquisitions resulting in a low level of transactions and a material decline in the purchase price. A number of schemes have been offered to the market, but not sold, as the vendor's expectations have not been met by the market. Investors and lenders are likely to await further clarity on the outcome of Brexit and for the occupational markets to stabilise before committing to future purchases.
Material Change	We hereby confirm, that notwithstanding the above, as at the Report Date:
	We have not become aware (after having made enquiry of the Company) of any material change since 30 September 2019 in any matter relating to any property covered by our Valuation Report which in our opinion would have a material effect on the aggregate value as at the Report Date of the Properties owned by the Company and included in this Valuation Report, and
	In relation to market conditions and movements in the property markets in which the properties covered by our Valuation Report are located, based on observed transactions involving comparable properties which have occurred and independent data published, in each case, since 30 September 2019, we do not consider that the movement in respect of the aggregate value of the Properties constitutes material change.

Compliance with Valuation Standards	The valuations have been prepared in accordance with the RICS Valuation – Global Standards 2017 incorporating the International Valuation standard and the UK national supplement 2018, ("the Red Book"). The property details on which each valuation is based are as set out in this Valuation Report.
	The valuations and this Valuation Report are compliant with the International Valuations Standards and in accordance with the relevant provisions of (i) the Listing Rules; (ii) the Prospectus Regulation Rules issued by the Financial Conduct Authority, particularly Rule 5.4.5G; (iii) paragraphs 128 to 130 of the ESMA Guidelines; and (iv) the London Stock Exchange requirements.
	We confirm that we have sufficient current local and national knowledge of the particular property market involved and have the skills and understanding to undertake the valuations competently.
	Where the knowledge and skill requirements of the Red Book have been met in aggregate by more than one valuer within CBRE Ltd, we confirm that a list of those valuers has been retained within the working papers, together with confirmation that each named valuer complies with the requirements of the Red Book.
	This Valuation is a professional opinion and is expressly not intended to serve as a warranty, assurance or guarantee of any particular value of the subject properties. Other valuers may reach different conclusions as to the value of the subject properties. This Valuation Report is for the sole purpose of providing the intended user with the Valuer's independent professional opinion of the value of the subject properties as at the Valuation Date.
Assumptions	The property details on which each valuation is based are as set out in this Valuation Report. We have made various assumptions as to tenure, letting, taxation, town planning, and the condition and repair of buildings and sites – including ground and groundwater contamination – as set out below.

If any of the information or assumptions on which the Market Value is based are subsequently found to be incorrect, the Market Value figures may also be

	incorrect and should be reconsidered.
Variation from Standard Assumptions	None.
Market Conditions	The values stated in this Valuation Report represent our objective opinion of Market Value in accordance with the definition set out above as at the Valuation Date. Amongst other things, this assumes that the Properties had been properly marketed and that exchange of contracts took place on this date.
Valuer	The Properties have been valued by a valuer who is qualified for the purpose of the valuation in accordance with the Red Book.
Independence	The total fees, including the fee for this assignment, earned by CBRE Ltd (or other companies forming part of the same group of companies within the UK) from the Addressee (or other companies forming part of the same group of companies) is less than 5.0% of the total UK revenues.
Disclosure	In accordance with the Red Book we make the following disclosures:
	• We confirm that we have previously valued all of the properties on the Company's behalf on a bi-annual basis since 2009.
	• The principal signatory of this Valuation Report has continuously been the signatory of valuations for the same addressee and valuation purpose since 2015.
	• CBRE Capital Markets team provides advice to the Company on an ad hoc basis.
	• CBRE Capital Markets acted for the Vendor in the sale of Ilford to the Company in March 2017.
	From, time to time, CBRE Ltd advises various occupiers, some of whom may have units in the subject shopping centres; an information barrier exists between the teams and as individual units would not be considered

be a conflict of interest.

We confirm that we have had no previous material

proportionate to the value, we do not consider this to

involvement with any of the Properties other than as set out above, and that copies of our conflict of interest checks have been retained within the working papers. We have disclosed the relevant facts to you and have received confirmation that it is in order for us to carry out your valuation instruction.

We do not consider that any of the above provides a conflict of interest preventing us from preparing this Valuation Report and the Company has confirmed to us that it also considers this to be the case.

Responsibility For the purposes of Prospectus Regulation Rule 5.3.2R(2)(f), we are responsible for this Valuation Report and accept responsibility for the information contained in this Valuation Report and confirm that to the best of our knowledge the information contained in this Valuation Report is in accordance with the facts and this Valuation Report contains no omissions likely to affect its import. This declaration is included in the Prospectus in compliance with Annex 1 item 1.2 of the Commission Delegated Regulation (EU) 2019/980 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council (the "PR Regulation") This Valuation Report complies with Rule 5.4.5G of the Prospectus Regulation Rules and paragraphs 128 to 130 of the ESMA Guidelines.

Save for any responsibility arising under Prospectus Regulation Rule 5.3.2R(2)(f) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in accordance with this Valuation Report or our statement, required by and given solely for the purposes of complying with the PR Regulation.

Reliance This Valuation Report is for the use only of the party to whom it is addressed and the shareholders of the Company for the specific purpose set out herein and no responsibility is accepted to any third party for the whole or any part of its contents save as set out in "Responsibility" above.

No reliance may be placed upon the contents of this Valuation Report by any party for any purpose other than in connection with the Purpose of Valuation.

We would draw your attention to the fact that where our

appointment is from an entity to which the European Parliament and Council Directive 2011/61/EU ('the Directive'), concerning Alternative Investment Fund Managers ('AIFM'), applies, our role is limited to providing valuations of individual property assets or liabilities (based on the assumptions as set out within our Valuation Report) – not the net asset value ('NAV') of either the fund or the individual properties within the fund. Furthermore, and for the avoidance of doubt, we are acting in the capacity of a 'valuation adviser' to the AIFM and not as an 'external valuer' as defined in the Directive. Details of any limitations to our liability in respect of the valuations we carry out are as set out within this Valuation Report and our terms of engagement. You have confirmed that the 'valuation function' under the Directive is performed by the

Publication Neither the whole nor any part of our Valuation Report nor any references thereto may be included in any published document, circular or statement nor published in any way without our prior written approval of the form and context in which it will appear. Before this Valuation Report, or any part thereof, is disclosed orally or otherwise to a third party, CBRE's written approval of the form and context of such publication or disclosure must first be obtained. Such publication or disclosure will not be permitted unless where relevant it incorporates the Assumptions referred to herein. For the avoidance of doubt, such approval is required whether or not CBRE is referred to by name and whether or not the contents of our Valuation Report are combined with others.

Company itself – not CBRE.

Such publication of, or reference to this Valuation Report will not be permitted unless it contains a sufficient contemporaneous reference to any departure from the Royal Institution of Chartered Surveyors Valuation Standards or the incorporation of the special assumptions referred to herein.

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SCOPE OF WORK & SOURCES OF INFORMATION

Sources of Information	We have carried out our work based upon information supplied to us by the Company and its advisers as set out within this Valuation Report, which we have assumed to be correct and comprehensive.
	We have been provided with, inter alia:
	• Tenancy schedules/tenancy updates as at September 2019
	• Outstanding capital expenditure updates as at September 2019 covering the periods
	• Ancillary and car park income updates as at September 2019
	• Heads of terms for proposed lettings as at September 2019
	• Turnover income updates as at September 2019
The Properties	Our Valuation Report contains a brief summary of the property details on which our valuation has been based.
Inspection	As instructed, we have not re-inspected the properties for the purpose of this instruction. However, as part of our wider valuation instruction from the Company for financial reporting purposes, we have inspected all the Properties internally and externally over the last twelve months as set out below:-
	• Walthamstow-17th May 2019
	• Wood Green-17th April 2019
	• Blackburn-22nd February 2019
	• Ilford-18th June 2019
Areas	We have not measured the property but have relied upon the floor areas provided to us by Capital & Regional plc, which we have assumed to be correct and comprehensive, and which you have advised us have been calculated using the Net Internal Area (NIA) measurement methodology as set out in the RICS Code of measuring practice (6th edition) or RICS property

All areas quoted in this Valuation Report are approximate.

Environmental We have not undertaken, nor are we aware of the content of, any environmental audit or other environmental investigation or soil survey which may have been carried out on the Properties and which may draw attention to any contamination or the possibility of any such contamination.

Matters

Lettings

We have not carried out any investigations into the past or present uses of the Properties, nor of any neighbouring land, in order to establish whether there is any potential for contamination and have therefore assumed that none exists.

Services and Amenities We understand that all main services including water, drainage, electricity and telephone are available to the property.

None of the services has been tested by us.

Repair and Condition We have not carried out building surveys, tested services, made independent site investigations, inspected woodwork, exposed parts of the structure which were covered, unexposed or inaccessible, nor arranged for any investigations to be carried out to determine whether or not any deleterious or hazardous materials or techniques have been used, or are present, in any part of the Properties. We are unable, therefore, to give any assurance that the Properties are free from defect.

Town Planning We have not undertaken planning enquiries.

Titles, Tenures and Details of title/tenure under which the Properties are held and of lettings to which they are subject are as supplied to us. We have not generally examined nor had access to all the deeds, leases or other documents relating thereto. Where information from deeds, leases or other documents is recorded in this Valuation Report, it represents our understanding of the relevant documents. We should emphasise, however, that the interpretation of the documents of title (including relevant deeds, leases and planning consents) is the responsibility of your legal adviser.

We have not conducted credit enquiries on the

financial status of any tenants. We have, however, reflected our general understanding of purchasers' likely perceptions of the financial status of tenants.

VALUATION ASSUMPTIONS

Appendix 3 to be a "supposition taken to be true" (an "Assumption"). Assumptions are facts, conditions or situations affecting the subject of, or approach to, a valuation that it has been agreed need not be verified by the valuer as part of the valuation process. Assumptions are made when it is reasonable for the valuer to accept that something is true without the need for specific investigation. The Company and its advisers has confirmed and we confirm that our Assumptions are correct as far as the Company and we, respectively, are aware. In the event that any of these Assumptions prove to be incorrect then our valuations should be reviewed. The principal Assumptions which we have made are stated within this Valuation Report. For the avoidance of doubt, the Assumptions made do not affect compliance with the approach to Market Value under the Red Book. Capital Values The Valuation has been prepared on the basis of "Market Value", which is defined in the Red Book as: "The estimated amount for which an asset or liability should exchange on the Valuation date between a willing buyer and a willing seller in an arm's-length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion." The valuation represents the figure that would appear in a hypothetical contract of sale at the valuation date. No adjustment has been made to this figure for any expenses of acquisition or realisation - nor for taxation which might arise in the event of a disposal. No account has been taken of any inter-company leases or arrangements, nor of any mortgages, debentures or other charge. No account has been taken of the availability or otherwise of capital based Government or European Community grants.

Introduction An Assumption is defined in the Red Book Glossary and

In the event that the Properties were to be sold at the

	valuations contained in this Valuation Report, any gains realised on such disposals over the book value for tax purposes would be subject to taxation in the applicable jurisdiction.
Taxation, Costs and Realisation Costs	As stated above, no allowances have been made for any expenses of realisation nor for taxation which might arise or crystallise in the event of a disposal.
	Our valuations reflect purchasers' statutory and other normal acquisition costs.
VAT	We have not been advised whether the properties are elected for VAT.
	All rents and capital values stated in this Valuation Report are exclusive of VAT.
Gross Contracted Rent	Passing rents quoted in this Valuation Report are the rents which are currently payable under the terms of the leases.
Rental Values	Unless stated otherwise rental values indicated in our Valuation Report are those which have been adopted by us as appropriate in assessing the capital value and are not necessarily appropriate for other purposes nor do they necessarily accord with the definition of Market Rent which is as follows:
	"The estimated amount for which an interest in real property should be leased on the Valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm's-length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion"
Estimated Net Annual Rent Receivable	This represents the total income receivable from all tenancies and licences, (including deemed income on outstanding rent reviews and any deemed income on tenancies that are holding over) less any non recoverable revenue costs. Deemed income is the valuer's estimate of the level at which any outstanding rent reviews or renewals are to be agreed, in accordance with our understanding of the terms of the occupational lease provisions.
	Non-recoverable revenue costs includes, but is not

limited to, such items as any non-recoverable service charge, empty rates, insurance, marketing contribution

or ground rent payable by the landlord.

Lease Expiries Fixed-term leases frequently incorporate either tenants' options to extend or tenants' break clauses; other leases are rolling to indeterminate, subject to stated notice periods. For the purposes of our valuations, we have made assumptions as to appropriate presumed expiry dates.

Any weighted average unexpired terms indicated in our Valuation Report are calculated to lease expiry allowing for break options.

The Property Where appropriate we have regarded the shop fronts of retail and showroom accommodation as forming an integral part of the building.

Landlord's fixtures such as lifts, escalators, central heating and other normal service installations have been treated as an integral part of the building and are included within our valuations.

Process plant and machinery, tenants' fixtures and specialist trade fittings have been excluded from our valuations.

All measurements, areas and ages quoted in our Valuation Report are approximate.

In the absence of any information to the contrary, we have assumed that:

(a) the Properties are not contaminated and are not adversely affected by any existing or proposed environmental law;

(b) any processes which are carried out on the Properties which are regulated by environmental legislation are properly licensed by the appropriate authorities;

(c) in England and Wales, the property possesses current Energy Performance Certificates (EPCs) as required under the Government's Energy Performance of Buildings Directive, and that they have an energy efficient standard of 'E', or better. We would draw your attention to the fact that under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 it will be unlawful for landlords to

Environmental

Matters

rent out a business premise from 1st April 2018 unless the site has reached a minimum EPC rating of an 'E' or secured a relevant exemption. In Scotland, we have assumed that the property possesses current Energy Performance Certificates (EPCs) as required under the Scottish Government's Energy Performance of Buildings (Scotland) Regulations, and that it meets energy standards equivalent to those introduced by the 2002 building regulations. We would draw your attention to the fact the Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016 came into force on 1st September 2016. From this date, building owners are required to commission an EPC and Action Plan for sale or new rental of non-domestic buildings bigger than 1,000 m2 that do not meet 2002 building regulations energy standards. Action Plans contain building improvement measures that must be implemented within 3.5 years, subject to certain exemptions.

(d) the properties are either not subject to flooding risk or, if they are, that sufficient flood defences are in place and that appropriate building insurance could be obtained at a cost that would not materially affect the capital value.

(e) invasive species such as Japanese Knotweed are not present on the Property

High voltage electrical supply equipment may exist within, or in close proximity of, the Properties. The National Radiological Protection Board (NRPB) has advised that there may be a risk, in specified circumstances, to the health of certain categories of people. Public perception may, therefore, affect marketability and future value of the property. Our valuation reflects our current understanding of the market and we have not made a discount to reflect the presence of this equipment.

Repair and Condition In the absence of any information to the contrary, we have assumed that:

(a) there are no abnormal ground conditions, nor archaeological remains, present which might adversely affect the current or future occupation, development or value of the Properties;

(b) the Properties are free from rot, infestation, structural or latent defect;

(c) no currently known deleterious or hazardous materials or suspect techniques have been used in the construction of, or subsequent alterations or additions to, the Properties; and

(d) the services, and any associated controls or software, are in working order and free from defect.

We have otherwise had regard to the age and apparent general condition of the Properties. Comments made in the property details do not purport to express an opinion about, or advise upon, the condition of uninspected parts and should not be taken as making an implied representation or statement about such parts.

Unless stated otherwise within this Valuation Report, and in the absence of any information to the contrary, we have assumed that:

(a) the Properties possess a good and marketable title free from any onerous or hampering restrictions or conditions;

(b) all buildings have been erected either prior to planning control, or in accordance with planning permissions, and have the benefit of permanent planning consents or existing use rights for their current use;

(d) all buildings comply with all statutory and local authority requirements including building, fire and health and safety regulations;

(e) only minor or inconsequential costs will be incurred if any modifications or alterations are necessary in order for occupiers of each Property to comply with the provisions of the Disability Discrimination Act 1995 (in Northern Ireland) or the Equality Act 2010 (in the rest of the UK);

(f) all rent reviews are upward only and are to be

Title, Tenure, Lettings, Planning, Taxation and Statutory & Local Authority requirements

assessed by reference to full current market rents;

(g) there are no tenant's improvements that will materially affect our opinion of the rent that would be obtained on review or renewal;

(h) tenants will meet their obligations under their leases, and are responsible for insurance, payment of business rates, and all repairs, whether directly or by means of a service charge;

(i) there are no user restrictions or other restrictive covenants in leases which would adversely affect value;

(j) where more than 50% of the floorspace of a property is in residential use, the Landlord and Tenant Act 1987 (the "Act") gives certain rights to defined residential tenants to acquire the freehold/head leasehold interest in the property. Where this is applicable, we have assumed that necessary notices have been given to the residential tenants under the provisions of the Act, and that such tenants have elected not to acquire the freehold/head leasehold interest. Disposal on the open market is therefore unrestricted;

(k) where appropriate, permission to assign the interest being valued herein would not be withheld by the landlord where required;

(l) vacant possession can be given of all accommodation which is unlet or is let on a service occupancy; and

(m) Stamp Duty Land Tax (SDLT) – or, in Scotland, Land and Buildings Transaction Tax (LABTT) – will apply at the rate currently applicable.

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Property	Description, Age and Tenure	ms of Existing Tenancies Ter	receivable Current Annual Rent	Value (ERV) mated Rental Esti	Value as at mber Market 2019 Septe 30
Blackburn, 25 Church St, Blackburn	Other major tenants include Primark, H&M, Next, Sports Direct and Wilko and (CVA) dated April 2019 the store is a Category 3. There are mutual breaks on The property is anchored by a Debenhams store that generates approximately The property was built in the 1960s and is located in the centre of Blackburn. the second, third, or fifth anniversary from the CVA date, subject to 90 days' years to expiry and 10.01 years to break (excluding car parking income and The property benefits from weighted average unexpired lease term of 13.72 The property - Long leasehold from 7 December 1993 for 150 years with a 5% of total income. In accordance with the Company Voluntary Agreement The centre comprises approximately 55,750 sq m (600,000 sq ft) of retail accommodation in 100 units and 1,304 car parking spaces. It was last principal ground rent payable at 12.19% on a side by side basis. The centre is an enclosed scheme built over two levels. their income represents 15% of the total income. The property's occupancy rate is 96% by ERV. extended and refurbished in 2008. prior written notice. mall income).	are several licences held stations and sundry mall concessionary rents and reviews to market rental lettings that have been repairing and insuring The majority of leases these tenancies, there terms. In general, the subject to five yearly, value. In addition to advertising, telecom short-term inclusive within the centre in retail unit rents are upwards-only rent are drawn on full respect of kiosks, There are also a provisions. number of granted.	£9,050,055 (Excl.)	£9,820,104 (Excl.)	£74,500,000

Property	Description, Age and Tenure	ms of Existing Tenancies Ter	receivable Current Annual Rent	Value (ERV) mated Rental Esti	Value as at mber Market 2019 Septe 30
Walthamstow, Walthamstow, 45 Selborne The Mall E17 7JR London Rd,	for London has agreed to finance improvement works to Walthamstow Central The property - Long leasehold from 24 June 1998 for 99 years and option for 2018. The Section 106 payment has been agreed for development. Transport % of the total income. The Asda lease expiry is 4 June 2027 predominantly on the ground floor, with a small first floor which houses three The property is located in Walthamstow town centre, opposite Walthamstow incorporating a residential development. The decision was confirmed by the planning permission to redevelop the Mall shopping centre in Walthamstow Built in 1988. An enclosed scheme comprising approximately 24,150 sq m years to expiry and 4.81 years to break (excluding car parking income and The property benefits from weighted average unexpired lease term of 5.34 with no break option and the Lidl lease expiry is 4 July 2042 with a tenant 26 years with the ground rent payable at 11.523% of the net passing rent Other major tenants include TK Maxx, Boots and The Gym. Their income Mayor of London in March 2018 and formal consent was granted in July In December 2017 Waltham Forest Council issued a resolution to grant The property is anchored by Asda and Lidl and their income represents (260,000 sq ft) of retail accommodation in 60 retail units arranged food outlets and a multi-storey car park with c.670 spaces. represents circa 9.5% of total income. excluding the car park income. break option on 5 July 2032. approximately 11 Central Station. mall income).	are several licences held stations and sundry mall concessionary rents and reviews to market rental lettings that have been repairing and insuring The majority of leases subject to five yearly, these tenancies, there terms. In general, the value. In addition to advertising, telecom within the centre, in short-term inclusive retail unit rents are upwards only rent are drawn on full respect of kiosks, There are also a provisions. number of granted.	£7,167,312 (Excl.)	£7,447,447 (Excl.)	£ 127,000,000

Value as at mber Market 2019 Septe 30
Value (ERV) mated Rental Esti
receivable Current Annual Rent
ms of Existing Tenancies Ter
Description, Age and Tenure	due to the Landlord including reinstatement and loss of income would be fully development opportunity and are currently discussing and documenting terms phases over the next 3-12 months. We have been informed all material costs Capital and Regional have conditionally agreed with the Freeholder (London On the 22 July 2019 a significant fire took place with over 75% of the stores Borough of Waltham Forest) to be granted a new 250 year lease (across the existing scheme and land required for the development) from the start of the met by the Company's group insurance cover. It is assumed that a fair and reasonable settlement, reflecting the above, would be made by a purchaser reopened before the valuation date with the remaining units due to open in Station by creating a new underground entrance within the scheme. We understand that Capital & Regional have openly marketed this work at a reduced overall percentage head rent payable. The property's occupancy rate is 99% by ERV. with the Company's insurer. with the preferred bidder.
Property	Walthamstow, Walthamstow, 45 Selborne (Continued) The Mall E17 7JR London Rd,

Property	Description, Age and Tenure	ms of Existing Tenancies Ter	receivable Current Annual Rent	Value (ERV) mated Rental Esti	Value as at mber Market 2019 Septe 30
Wood Green, Wood Green, 159 High Rd, N22 6YQ The Mall London	with a tenant break option on 10 August 2025. Primark lease expiry is 21 June The property is anchored by Cineworld, Primark and TK Maxx. Their combined In 2017 as a part of the scheme a 78-room hotel opened and there is a lease income is c.14% of the total income. Cineworld lease expiry is 9 August 2035 Built in 1977 and comprising two separate elements having frontage to either Other major tenants include H&M, New Look and Argos and their combined in place until 2042 to Travelodge with 5 yearly CPI rent review. The scheme 2034 with no break options. TK Maxx lease expiry is 6 January 2028 with a also includes ancillary office accommodation above the retail units and two years to expiry and 5.49 years to break (excluding car parking income and The property benefits from weighted average unexpired lease term of 6.89 The scheme provides approximately 50,000 sq m (540,000 sq ft) of retail As at valuation date the sale of the former Petrol Station site known as the side of the High Street and is connected at first floor level via an enclosed Mayes road site at the eastern end of the scheme was in progress. A multi-storey car parks with c.1,500 car spaces. The property's occupancy rate is 99% by ERV. tenant break option on 7 January 2023. income is c.10% of the total income. accommodation in 100 units. The property - Freehold. mall income). bridge link.	are several licences held stations and sundry mall concessionary rents and reviews to market rental lettings that have been repairing and insuring The majority of leases these tenancies, there terms. In general, the subject to fiveyearly, value. In addition to advertising, telecom within the centre, in short-term inclusive retail unit rents are upwardsonly rent are drawn on full respect of kiosks, There are also a provisions. number of granted.	£12,994,878 (Excl.)	£13,278,003 (Excl.)	£218,800,000

Value as at mber Market 2019 Septe 30 Value (ERV) mated Rental Esti
receivable Current Annual Rent
ms of Existing Tenancies Ter
Description, Age and Tenure	conditioned exchange of contracts took place in August 2019 and at the date of valuation the company is working to clear the conditions to facilitate completion.
Property	Wood Green, Wood Green, 159 High Rd, (Continued) N22 6YQ The Mall London

Property	Description, Age and Tenure	ms of Existing Tenancies Ter	receivable Current Annual Rent	Value (ERV) mated Rental Esti	Value as at mber Market 2019 Septe 30
Ilford, London Exchange, High Rd, IG1 4FA The	are mutual breaks on the second, third, or fifth anniversary from the CVA date, and Spencer both have trading frontages to the centre, but the main stores are (100 retail units) arranged predominantly along an L shaped mall across three Voluntary Agreement (CVA) dated April 2019 the store is a Category 3. There for approximately 1,000 vehicles accessed via Havelock Road and Ley Street. There is a multi-storey car park located within the property providing parking Other major tenants include TK Maxx, H&M and Marks and Spencer, whose total of approximately 27,871 sq m (300,000sq ft) of retail accommodation combined income is c. 12 % of total income. In addition, Wilko and Marks years to expiry and 3.09 years to break (excluding car parking income and The shopping centre is an enclosed scheme opened in 1991 comprising a The property benefits from weighted average unexpired lease term of 4.68 The property is located opposite Ilford train station in the centre of Ilford. approximately 13% of total income. In accordance with the Company The property is anchored by the Debenhams store that generates The property's occupancy rate is 99% by ERV. subject to 90 days' prior written notice. The property-Freehold. outside the ownership. mall income). floors.	are several licences held stations and sundry mall concessionary rents and reviews to market rental lettings that have been repairing and insuring The majority of leases subject to five yearly, these tenancies, there terms. In general, the value. In addition to advertising, telecom within the centre, in short-term inclusive retail unit rents are upwards only rent are drawn on full respect of kiosks, There are also a provisions. number of granted.	£5,729,294 (Excl.)	£6,493,466 (Excl.)	£82,300,000

PART B: KNIGHT FRANK VALUATION REPORT

This Part B comprise the Knight Frank Valuation Report, which values the Marlowes Hemel Hempstead, the Mall Luton and the Mall Maidstone properties owned by the Group as at 30 September 2019.

VALUATION REPORT IN RELATION TO THE PROPERTIES

The Directors and the Proposed Directors (Nobert Sasse and George Muchanya) of Capital & Regional plc 22 Chapter Street London SW1P 4NP

Numis Securities Limited 10 Paternoster Square London EC4M 7LT

J.P. Morgan Securities plc 25 Bank Street Canary Wharf London E14 5JP

Our Ref: I:1054070

7 November 2019

Dear Sirs

Valuation Report for the properties listed in Schedule A (Project Oval) ("Valuation Report")

1. Introduction

1.1 In accordance with our instructions from the Company confirmed within our letter of engagement dated 16 October 2019 (and our supplemental Proposed Directors Reliance Letter of 6 November 2019), we confirm we have carried out a valuation of the freehold and/or leasehold interests in the properties referred to in Schedule A (the "Properties") appended to this Report and we now report on our opinion of the Market Values (as defined in paragraph 3.1) of the Properties as at 30 September 2019.
1.2 We have been appointed to undertake the Valuation of the Properties for inclusion in:
(1) a report to be included in an announcement pursuant to Rule 2.7 of the City Code on Takeovers and Mergers (the "Code") in relation to a partial offer and a share subscription by Growthpoint Properties Limited ("Growthpoint") (the "Transaction") (the "Announcement");
(2) a report to be included in:
- i. a combined prospectus and circular (the "Prospectus") to be published in connection with the proposed issue of new ordinary shares of 1 pence each in the capital of the Company (the "New Shares") to Growthpoint and admission of the New Shares to the premium listing segment of the Official List and to trading on the London Stock Exchange's Main Market for listed securities;
- ii. an offer document (the "Offer Document") to be published by Growthpoint in connection with the proposed partial offer to the shareholders of the Company.

The Announcement, Prospectus and the Offer Document together comprise the "Offer Documents". The purpose of our Valuation is the publication of the Offer Documents in connection with the Transaction.

1.3 The Properties comprise shopping centre assets and have been categorised as investment properties.
1.5 The Schedule attached comprises brief details of each of the Properties, the associated terms of tenure, occupational tenancy overview and details of Net Annual Rent (as defined below), as well as the Market Values, as at 30 September 2019, (the "Valuation Date").

Net Annual Rent which includes our estimate of the level at which outstanding rent reviews or lease renewals are settled, is defined within the FCA's handbook as: "The current income or income estimated by the valuer:

(1) Ignoring any special receipts or deductions arising from the property;
(2) excluding Value Added Tax and before taxation (including tax on profits and any allowances for interest on capital or loans); and
(3) after making deductions for superior rents (but not for amortisation) and any disbursements including, if appropriate, expenses of managing the property and allowances to maintain it in a condition to command its rent.
1.6 All Properties have been inspected by us within the last 6 months and the dates of inspection for each of the Properties are set out in Schedule A.

2. Compliance and Disclosures

2.1 Knight Frank LLP is instructed as External Valuer, as defined by the RICS Valuation Global Standards 2017 (the "Red Book") (and as independent experts for the purposes of paragraph 130 of the ESMA update (ESMA/2013/319) of the Committee of European Securities Regulators' (CESR) recommendations for the consistent implementation of the European Commission regulation (EC) n. 809/2004 implementing the Prospectus Directive, as now applicable to the Prospectus Regulation (EU) 2017/1129 (the "ESMA Guidelines").
2.2 In addition to these instructions,
(a) Knight Frank LLP is retained by the Company as external valuer for accounts purposes. We have been valuing for accounting purposes since June 2017; and
(b) Knight Frank LLP has been retained since March 2019 by the Company to undertake the retail occupational agency in respect of three shopping centres that it is not responsible for valuing for accounts purposes, namely The Mall, Walthamstow; The Mall, Wood Green and The Exchange, Ilford.
2.6 The valuer on behalf of Knight Frank LLP, with responsibility for this report is Gavin Spreyer MRICS, RICS Registered Valuer (the "Valuer"). Parts of the valuation have been undertaken by additional valuers. We confirm that the Valuer and additional valuers collectively (i) are appropriately qualified and (ii) meet the requirements of Red Book, having sufficient current knowledge of the particular market and the skills and understanding to undertake the valuations competently.
2.7 In relation to Knight Frank LLP's preceding financial year, the proportion of the total fees paid by the Company to the total fee income of Knight Frank LLP was less than 5 per cent. We recognise and support the RICS Rules of Conduct and have procedures for identifying conflict of interest checks.
2.8 The addressees of this Valuation Report (as defined in our letter of engagement) have confirmed that they are content for us to provide the Valuation notwithstanding these matters.

3. Basis of Valuation

3.1 We confirm our opinion of value on the basis of Market Value and in accordance with the RICS Valuation - Global Standards 2017, which incorporate the International Valuation Standards, and the RICS UK National Supplement effective from January 2019. References to the "Red Book" refer to either or both of these documents, as applicable. The Red Book defines Market Value as:

"The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion".

3.2 No allowance has been made for expenses of realisation or for any taxation which might arise, and our valuations are expressed exclusive of any Value Added Tax that may become chargeable.
3.3 Our valuations reflect usual deductions in respect of purchaser's costs and, in particular, full liability for UK Stamp Duty as applicable at the valuation date.
3.4 Our valuation has been undertaken using appropriate valuation methodology and our professional judgement.
3.5 The Valuer's opinion of Market Value was primarily derived using recent comparable market transactions on arm's length terms, where available, and appropriate valuation techniques (The Investment Method).
3.7 The Properties have been valued individually and not as part of a portfolio.
3.8 Save as otherwise disclosed, it has been assumed for the purpose of the valuations that the relevant interests in the Properties are free of mortgage, charge or other debt security and no deduction has been made for such charge or debt. Equally, under Red Book guidance, we are not permitted to value corporate entities and can only value direct real estate.

4. Valuation Assumptions - Sources of Information

4.1 Our valuations are based on information provided by the Company and its professional advisers, upon which we have relied, and which has not been verified by us. Our assumptions (as defined in the Red Book) relating to this information are set out below. If any of the information or assumptions are subsequently found to be incorrect then our valuations should be reviewed.
4.2 We would note that where information or documentation has not been provided to us we have adopted the appropriate assumptions required to undertake, and report, Market Values. When considering the covenant strength of individual tenants we have not carried out credit enquiries but have reflected within our valuations our general understanding of the investment market's likely perception of tenants' financial status.

4.3 Title

We have been informed by the Company whether the Properties are either held freehold or long leasehold. Where Properties are held leasehold we have been provided with the principal terms by the Company together with the calculation of any head rents payable. We have not been provided with title information and Certificates or Reports on Title in respect of the Properties by the Company.

Our valuations are prepared on the basis that the Properties have good and marketable titles and are free of any undisclosed onerous burdens, outgoings or restrictions. The tenure of each property is identified within the Schedule.

4.4 Tenancy Information

We have been provided by the Company with schedules identifying the salient occupational leases terms and any non-recoverable revenue costs for each of the Properties. We have not considered i d th ti l l d t

4.5 Land Register Inspection and Searches

We do not undertake searches or inspections of any kind (including web based searches) for title or price paid information in any publicly available land registers, including the Land Registry for England & Wales, Registers of Scotland and Land & Property Services in Northern Ireland.

4.6 Planning, Highway and Other Statutory Regulations

We have made verbal/web based enquiries of the appropriate Town Planning and Highways Authorities in respect of matters affecting the Properties, where considered appropriate, although this information was given to us on the basis that it should not be relied upon.

We have not seen specific planning consents other than for the leisure development at Lakeside and have assumed that the Properties have been erected and are being occupied and used in accordance with all requisite consents and that there are no outstanding statutory notices. No allowances have been made for rights, obligations or liabilities arising under the Defective Premises Act 1972.

4.7 Structural, Mechanical and Electrical Condition

We have not been instructed to carry out structural surveys or a review of the mechanical & electrical services of any of the Properties. We have reflected in our valuations advice from the Company where works are required as well as the general condition of the Properties as observed during the course of our internal and external inspections. Our valuations assume the buildings contain no deleterious materials and that the sites are unaffected by adverse soil conditions, except where we have been notified to the contrary.

4.8 Environmental Issues

We have not carried out any investigations into past or present uses of any of the Properties, nor any neighbouring land to establish whether there is any potential for contamination from these uses or sites to the Properties.

We understand that none of the Properties are, nor are likely to be, notably affected by land contamination and that there are no ground conditions which would affect the present or future uses of the Properties.

Should it be established subsequently that contamination exists at any of the Properties or on any neighbouring land or that the Properties have been or are being put to a contaminative use this could reduce the Market Values now reported.

We have used the website of the Environment Agency's Indicative Floodplain Maps to provide a general overview of lands in natural floodplains and therefore potentially at risk of flooding from rivers or the sea. The maps use the best information currently available, based on historical flood records and geographical models. They indicate where flooding from rivers, streams, watercourses or the sea is possible. From the website, and our due diligence review, we have established that none of the Properties are currently classified as being at high risk from flooding without the appropriate flood defences being present.

4.9 Property Insurance

Our Valuations assume that all the Properties would, in all respects, be insurable against all usual risks including terrorism, flooding and rising water table at normal, commercially acceptable premiums.

4.10 Building Areas

We have been supplied with floor areas for the Properties including retail zoning where appropriate. We are making the assumption that they have been prepared in accordance with the current RICS Code of Measuring Practice.

4.11 Inspection

We were instructed us to inspect the Properties internally and externally. Inspection dates are as set out in Schedule A. Our general terms of business set out the scope of our investigations.

5. Valuation

We are of the opinion that the aggregate of the Market Values of the freehold or leasehold interests in the Properties as at the Valuation Date was as follows:

Portfolio Value

£261,800,000 (Two hundred and sixty one million, eight hundred thousand pounds)

(the aggregate "Market Value")

Due to the deterioration in the occupational market and adverse investor sentiment towards the shopping centre sector, the valuations reported as at 30 September 2019 are lower than those reported to the Company for year end accounting purposes as at 31 December 2018. A comparison of the Market Values is detailed in the table below.

The valuation of each asset has reduced over the period from 31 December 2018 to 30 September 2019, due to a reduction in income and market rents and due to higher investment yields applied to the net income and cashflow, with the yield moving by a greater level for The Mall, Luton, due to lot size.

Further, the difference in the Market Values as at 31 December 2018 to 30 September 2019, for all the centres, also took account, inter alia, the restructure of certain rentals following various CVAs/Administrations, which have occurred. In particular, The Mall, Luton was impacted by the Debenhams CVA and the lower rent payable and the insertion of flexible lease terms.

Property	Market Value as at 31 December 2018	Market Value as at 30 September 2019
The Mall, Luton, Bedfordshire, LU1 2LJ	£195,400,000	£160,000,000
The Mall, Maidstone, Kent, ME15 6AT	£69,000,000	£60,900,000
The Marlowes Shopping Centre & Fareham House/Edmonds Parade & St Stephyns Chambers, Hemel Hempstead, Hertfordshire, HP1 1DX	£44,900,000	£40,900,000
Total	£309,300,000	£261,800,000

We advise that in respect of The Mall, Maidstone, since the Valuation Date a significant Agreement to Lease dated 7 October 2019 has been secured in respect of part of Unit 42-50, to Matalan, removing a section of a major void within the shopping centre.

7. Market Commentary

Since the Valuation Date, there has been continuing concern about the retail occupational market. The shopping centre investment market has been subdued with very low transactional volumes as investors await further clarity.

We confirm that although there has been some adverse movement in asset values through a reduction of income and a change in investment yields, there is nothing contained therein which would have a material impact in aggregate on our opinion of the Market Value of the Properties as at the date of this Report.

8. General Conditions

8.1 This Valuation Report has been prepared for inclusion in the Announcement.

We understand that the form of this Valuation Report or similar will also be included in the

Prospectus and the Offer Document.

Knight Frank LLP has given and has not withdrawn its consent to the inclusion of this Valuation Report in the Offer Documents and in any further announcement to be published or made available by the Company relating to the Transaction in accordance with the City Code on Takeovers and Mergers (the "Code"), and to the references to this Valuation Report and Knight Frank LLP in the Offer Documents in the form and context in which they appear.

Knight Frank LLP authorises and accepts responsibility, for the purposes of the Prospectus Regulation Rule 5.3.2(2)(f) and of the Code, for the contents of this Valuation Report and confirms that the information contained in this Valuation Report is, to the best of our knowledge, in accordance with the facts and the Valuation Report contains no omission likely to affect its import. This declaration shall be included in the Prospectus in compliance with Annex 1 item 1.2 of the Commission Delegated Regulation (EU) 2019/980 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council.

This Valuation Report complies with, and is prepared in accordance with, (i) the Prospectus Regulation Rules issued by the Financial Conduct Authority, particularly Prospectus Regulation Rule 5.4.5G and (ii) paragraphs 128 to 130 of the ESMA Guidelines and (iii) the requirements of Rule 29 of the Code.

8.2 Our liability

(c) Knight Frank LLP's total liability for any direct loss or damage (whether caused by negligence or breach of contract or otherwise) arising out of or in connection with this Valuation is limited in accordance with the terms of our engagement letter. Knight Frank LLP accepts no liability for any indirect or consequential loss or for loss of profits.
(d) We confirm that we hold adequate and appropriate PII cover for this instruction.
(e) No claim arising out of or in connection with this Valuation may be brought against any member, employee, partner or consultant of Knight Frank LLP. Those individuals will not have a personal duty of care to any party and any claim for losses must be brought against Knight Frank LLP.
(f) Nothing in this Valuation shall exclude or limit our liability in respect of fraud or for death or personal injury caused by our negligence or for any other liability to the extent that such liability may not be excluded or limited as a matter of law.
8.3 We acknowledge that this Valuation Report will be published on the Company's website in accordance with Rule 26.3 of the Code.

8.3 The contents of this Valuation Report may be used only for the specific purpose to which they refer. Before this Valuation Report, or any part thereof, is reproduced or referred to, in any document, other circular or statement or published in any way whatsoever whether in hard copy or electronically (including on any web-site), and before its contents, or any part thereof, are disclosed orally or otherwise to a third party, Knight Frank LLP's written approval as to the form and context of such publication or disclosure must first be obtained, but may not be unreasonably withheld or delayed. For the avoidance of doubt such approval is required whether or not Knight Frank LLP is referred to by name and whether or not the contents of our Valuation Report are combined with others.

Yours faithfully

For and on behalf of Knight Frank LLP Gavin Spreyer MRICS RICS Registered Valuer Partner, Valuation & Advisory

SCHEDULE A TO THE VALUATION REPORT THE PROPERTIES

Market Value	£160,000,000
Current estimated net annual rent receivable	£12,845,212
Terms of tenancies	effectively fully repairing and insuring terms by upward only reviews drawn predominantly on The property is multi-let by way of over 150 tenancies typically incorporating five yearly way of recovery by service charge.	income, turnover income and car park revenue. The average weighted unexpired term for the centre is 4.68 years to break, excluding mall	Wilko, Superdrug, Debenhams, H&M, Tesco and The principal tenants include Boots, TK Maxx, Luton Borough Council
Description age and tenure	The property comprises an enclosed two level shopping mall providing a total internal floor area of c. 900,000 sq ft with retail and leisure accommodation, two office towers (one 1,707 car parking spaces. There are c.158 units providing vacant) and ancillary storage.	The Mall, Luton is located in the centre of the town and provides the principal retail thoroughfare. Age: 1970's	Tenure: Part freehold, part leasehold.	There are two head leases over the principal parts of the property. The two head leases are from Luton Borough Council with an unexpired term of around 127 years, assuming the option to extend by 51 years has been	income receivable of the car park, with the head rent under calculated at 9.6% of the income receivable and 10% of the the second lease calculated at 9.6% of income in excess of exercised. The head rent under one of the leases is	£1,250,000.
Inspected Date	June 2019
CENTRE ASSETS SHOPPING Address	Bedfordshire, The Mall, LU1 2LJ Luton,

CENTRE ASSETS SHOPPING Address	Inspected Date	Description age and tenure	Terms of tenancies	Current estimated net annual rent receivable	Market Value
Maidstone, Kent, ME15 6AT The Mall,	June 2019	The Mall, Maidstone is located in the centre of the town and mall providing a total internal floor area of c.500, 000 sq ft The property comprises an enclosed three level shopping with 1,075 car parking spaces. There are c.103 units providing retail and leisure accommodation. provides local convenience shopping. Tenure: Freehold Age: 1970's	effectively fully repairing and insuring terms by The principal tenants include Wilko, TJ Hughes, upward only reviews drawn predominantly on The average weighted unexpired term for the Boots, Sports Direct and Maidstone Borough centre is 3.96 years to break, excluding mall tenancies typically incorporating five yearly The property is multi-let by way of over 90 way of recovery by service charge. income, and car park revenue. Council.	£5,497,707	£60,900,000
Chambers, Hemel Shopping Centre House/Edmonds The Marlowes Hertfordshire, Hempstead, Parade & St & Fareham Stephyns HP1 1DX	June 2019	The Marlowes shopping centre is located in the centre of the 340,000 sq ft with 1,175 car parking spaces. There are c.100 The property comprises an enclosed shopping mall and high Praetorian and Churches Housing Association Ltd, effective Age: Shopping Mall c1990 and the external units (Fareham There is one head lease over Stevens Chambers, which is street terraces, providing a total internal floor area of c. held on a long leasehold of 999 years from Hightown town and provides the principal retail thoroughfare. units providing retail and leisure accommodation. House and Edmunds Parade) c1950s/1960s Tenure: Part freehold, part leasehold. 31 March 2014 at a peppercorn rent.	effectively fully repairing and insuring terms by income, turnover income and car park revenue. The principal tenants include New Look, Sports Direct, The Entertainer, Wilkinson's and Metro upward only reviews drawn predominantly on The average weighted unexpired term for the centre is 3.73 years to break, excluding mall tenancies typically incorporating five yearly The property is multi-let by way of over 90 There is an AFL with Empire Cinema as a principal tenant, subject to conditions. way of recovery by service charge. Bank.	£3,257,434	£40,900,000
CENTRE ASSETS SHOPPING (TOTAL)				£21,600,353	£261,800,000

		Capital & Regional Portfolio Valuation as at 30/09/2019 Summary Of Totals
	Tenure Number of Aggregate Market % of Total MV Properties Value (MV)
FH	Freehold Investment Properties	1	£60,900,000	23%
FH/LH	Part Freehold/Part Long Leasehold Investment Properties	2	£200,900,000	77%
	Total	3	£261,800,000	100.00%

Part 6

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Section A – Unaudited Pro Forma Financial Information

The unaudited pro forma financial information of the Group in this Section A of Part 6 is based on the consolidated net assets of the Group set out in the unaudited consolidated financial statements of the Group for the period ended 30 June 2019. The pro forma financial information has been prepared to illustrate the effect on the consolidated net assets of the Group as if the Share Subscription, involving a cash subscription by Growthpoint for 311,451,258 New Shares at a price of 25 pence per share raising approximately £77.9 million gross proceeds, had taken place on 30 June 2019.

The unaudited pro forma financial information has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not represent the Group's actual financial position. It may not, therefore give a true picture of the Group's financial position or results nor is it indicative of the results that may, or may not, be expected to be achieved in the future.

The unaudited pro forma financial information has been prepared on the basis set out in the notes below and in accordance with the requirements of item Annex 20 to the PR Regulation. The unaudited pro forma financial information has been prepared on the basis of the accounting policies adopted by the Company in preparing the unaudited consolidated interim financial statements of the Group for the period ended 30 June 2019 for which no audit or review report has been or will be published.

The unaudited pro forma information does not constitute a statutory account within the meaning of section 434 of the Companies Act. Prospective investors should read the whole of this Prospectus and not rely solely on the summarised financial information contained in this Part 6.

UNAUDITED PRO FORMA STATEMENT OF NET ASSETS

	Consolidated net assets of	Share Subscription –	Pro forma consolidated net
	the Group at	Proceeds, net	assets at
	30 June 2019 Note 1	of expenses Note 2	30 June 2019 Note 3
	£'m	£'m	£'m
Non current assets
Investment properties	840.4	–	840.4
Plant and equipment	1.9	–	1.9
Fixed asset investments	2.0	–	2.0
Receivables	15.3 —–—––––——	– —–—––––——	15.3 —–—––––——
Total non-current assets	859.6 —–—––––——	– —–—––––——	859.6 —–—––––——
Current assets
Receivables	18.5	–	18.5
Cash and cash equivalents	30.2 —–—––––——	72.6 —–—––––——	102.8 —–—––––——
Total current assets	48.7 —–—––––——	72.6 —–—––––——	121.3 —–—––––——
Total assets	908.3 —–––––———	72.6 —–––––———	980.9 —–––––———
Current liabilities
Trade and other payables	(34.3) —–—––––——	– —–—––––——	(34.3) —–—––––——
Total current liabilities	(34.3) —–—––––——	– —–—––––——	(34.3) —–—––––——
Net current assets	14.4 —–––––———	72.6 —–––––———	87.0 —–––––———
Non current liabilities
Bank loans	(433.3)	–	(433.3)
Other payables	(5.5)	–	(5.5)
Obligations under finance leases	(61.5) —–—––––——	– —–—––––——	(61.5) —–—––––——
Total non-current liabilities	(500.3)	–	(500.3)
Total liabilities	—–—––––—— (534.6) —–—––––——	—–—––––—— – —–—––––——	—–—––––—— (534.6) —–—––––——
Net assets	373.7 —–––––———	72.6 —–––––———	446.3 —–––––———

Notes:

(1) The net assets of the Group as at 30 June 2019 have been extracted without material adjustment from the unaudited consolidated financial statements of the Group for the period ended 30 June 2019, as incorporated by reference in Part 9 of this document.

(2) Adjustment to reflect the net proceeds from the Share Subscription receivable by the Company of £72.6 million (being gross proceeds of £77.9 million less estimated fees relating to the Transaction of £5.3 million).

(3) The unaudited pro forma financial information does not take into account the financial or trading performance of the Group subsequent to the interim balance sheet date of 30 June 2019 or of any other event, save as disclosed above.

Section B – Accountants' Report on Unaudited Pro Forma Financial Information

Grant Thornton UK LLP 30 Finsbury Square London EC2A 1AG T +44 (0)20 7383 5100 F +44 (0)20 7184 4301

The Directors and the Proposed Directors Capital & Regional PLC 22 Chapter Street London SW1P 4NP

7 November 2019

Dear Sirs

CAPITAL & REGIONAL PLC (the "Company") and its Subsidiary Undertakings (together the "Group") – Report On Pro Forma Financial Information

We report on the pro forma statement of net assets (the Pro Forma Financial Information) set out in Section A of Part 6 of the Company's combined prospectus and circular dated 7 November 2019 (the "Prospectus"), which has been prepared on the basis described in notes 1 to 3 to the Pro Forma Financial Information, for illustrative purposes only, to provide information about how the Share Subscription (as defined in the Prospectus) might have affected the financial information presented on the basis of the accounting policies adopted by the Company in preparing the financial statements for the year ending 30 December 2019.

This report is required by Section 3 of Annex 20 to Commission Delegated Regulation (EU) 2019/980 (the PR Regulation) and is given for the purpose of complying with that Section 3 of Annex 20 of the PR Regulation and for no other purpose.

Responsibilities

It is the responsibility of the directors and the proposed directors of the Company to prepare the Pro Forma Financial Information in accordance with Annex 20 to the PR Regulation.

It is our responsibility to form an opinion, as required by Section 3 of Annex 20 to the PR Regulation, as to the proper compilation of the Pro Forma Financial Information and to report that opinion to you.

Save for any responsibility arising under 5.3.2R(2)(f) of the Prospectus Regulation Rules of the Financial Conduct Authority (the Prospectus Regulation Rules) to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with Item 1.3 of Annex 1 of the PR Regulation consenting to its inclusion in the Prospectus.

gran hornton.co.uk

Chartered Accountants. Grant Thornton UK LLP is a limited liability partnership registered in England and Wales: No.OC307742. Registered office: 30 Finsbury Square, London EC2A 1AG. A list of members is available from our registered office. Grant Thornton UK LLP is authorised and regulated by the Financial Conduct Authority. Grant Thornton UK LLP is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. Services are delivered by the member firms. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another's acts or omissions. Please see grantthornton.co.uk for further details.

In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro Forma Financial Information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

Basis of Opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro Forma Financial Information with the directors of the company.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro Forma Financial Information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion

In our opinion:

a the Pro Forma Financial Information has been properly compiled on the basis stated; and
b such basis is consistent with the accounting policies of the Company.

Declaration

For the purposes of Prospectus Regulation Rule 5.3.2R(2)(f) we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with Item 1.2 of Annex 1 to the PR Regulation.

Yours faithfully

GRANT THORNTON UK LLP

Part 7

TAXATION

1. UK TAXATION

1.1 General

The following statements are intended to apply only as a general guide to certain aspects of current UK tax law and to the current published practice of HMRC (which is not binding), both of which are subject to change at any time, possibly with retrospective effect. They are intended to apply only to Shareholders who are resident (and in the case of individuals, domiciled) in the UK for UK tax purposes (save where express reference is made to non-UK tax resident persons), who hold the Ordinary Shares as investments and not as securities to be realised in the course of a trade, who did not (and were not deemed to) acquire their Ordinary Shares by virtue of an office or employment (whether current, historic or prospective) and are not officers or employees of any member of the Group, and who are the beneficial owners of the Ordinary Shares (and whose Ordinary Shares are not held through an Individual Savings Account (ISA) or a Self Invested Personal Pension). The statements may not apply to certain classes of Shareholders such as dealers in securities. Any Shareholders who are in any doubt as to their tax position regarding the acquisition, ownership or disposal of the Ordinary Shares or New Shares, or who are subject to tax in a jurisdiction other than the UK, should consult their own tax advisers.

1.2 Capital gains

The disposal (including deemed disposal) by a Shareholder of all or part of his holding of Ordinary Shares may, depending on the Shareholder's circumstances, render him liable to UK tax on capital gains.

A disposal by a Shareholder within the charge to UK capital gains tax, such as an individual, trustee or personal representative, will, subject to the availability to the Shareholder of any exemptions, reliefs or allowable losses, be subject to tax on any gain. The 2019/2020 capital gains tax rate for share disposals is 10 per cent. for an individual who is subject to income tax at the basic rate to the extent that any chargeable gain does not exceed the unused part of their basic rate income tax band. For an individual who is subject to income tax at the basic rate, and to the extent that any chargeable gain exceeds the unused part of their basic rate income tax band, the rate of capital gains tax on the excess is 20 per cent. The rate of capital gains tax for individuals who are higher or additional rate taxpayers is 20 per cent. UK resident trustees and personal representatives will generally be subject to capital gains tax at a rate of 20 per cent.

Any gain on a disposal by a Shareholder within the charge to UK corporation tax, such as a company or unincorporated association other than a partnership, will, subject to the availability to the Shareholder of any exemptions, reliefs or allowable losses, be subject to tax on any gain at the Company's rate of corporation tax for the accounting period in which the gain accrued.

From 6 April 2019, persons who are not UK tax resident are liable for UK capital gains tax or corporation tax on direct and indirect disposals of UK land. Where such a person disposes of the shares in a company which derives 75 per cent. or more of its value from UK land and that person holds at least a 25 per cent. share in that company, that person will be liable for tax on any gain. Furthermore, where a non-UK tax resident person holds shares in a UK REIT (or other collective investment vehicle) which derives 75 per cent. or more of its value from UK land, that person will be liable for tax on any gains arising on disposal of the shares regardless of the size of their shareholding.

Shareholders who are resident for tax purposes outside the UK may be subject to foreign taxation on capital gains depending on their circumstances.

1.3 Dividends

A REIT may distribute property income distributions ("PID") and non property income ("Non PID") dividends (both of which may include share capital issued in lieu of dividends). The tax treatment may vary in each case.

(a) PID dividends

(i) Withholding tax

(A) General

Subject to certain exemptions summarised below, the Company is required to withhold income tax at source at the basic rate (currently 20 per cent.) from its PIDs (whether paid in cash or in the form of a stock dividend). The Company must on request provide Shareholders with a certificate setting out the gross amount of the PID, the amount of tax withheld and the net amount of the PID. A reduced treaty rate must be reclaimed by the recipient.

(B) Shareholders solely resident in the UK

Where tax has been withheld at source, Shareholders who are individuals may, depending on their individual circumstances, either be liable to further tax on their PID at their applicable marginal rate, or incur no further liability on their PID, or be entitled to claim repayment of some or all of the tax withheld on their PID. Shareholders who are companies will in general, depending on their circumstances, be liable to pay corporation tax (currently 19 per cent.) on their PID and if (exceptionally) income tax has been withheld at source that tax can be set against the liability to corporation tax or income tax which they are liable for in the accounting period in which the PID is received.

(C) Shareholders who are not resident for tax purposes in the UK

The right of a Shareholder to claim repayment of any part of the tax withheld from a PID will depend on the existence and terms of any double tax convention between the UK and the country in which the Shareholder is tax resident. Any refund claim under a double tax treaty would need to be made to HMRC. Shareholders who are not resident for tax purposes in the UK should obtain advice concerning tax liabilities in their jurisdiction of residence on PIDs received from the Company.

(D) Exceptions to requirement to withhold income tax

In certain circumstances the Company must not withhold income tax at source from a PID. These (as set out in regulation 7 of the Real Estate Investment Trusts (Assessment and Recovery of Tax) Regulations 2006) (the "REIT Regulations 2006") include where the Company reasonably believes that the person beneficially entitled to the PID is a company resident for tax purposes in the UK (or a company resident for tax purposes outside the UK which is carrying on a trade through a permanent establishment in the UK and is required to bring the PID into account in computing its chargeable profits) or a charity or a body mentioned in regulation 7(3) of the REIT Regulations 2006 which is allowed the same exemption from tax as charities. They also include where the Company reasonably believes that the PID is paid to the scheme administrator of a registered pension scheme, or the sub-scheme administrator of certain pension sub-schemes, the account manager of an ISA, or the account provider for a child trust fund, in each case, provided that the Company reasonably believes that the PID will be applied for the purposes of the relevant fund, scheme, account or plan.

The Company will also not be required to withhold income tax at source from a PID where the Company reasonably believes that the recipient of the PID is a partnership each member of which is one of the bodies described in the paragraph above and provided that where the PID is paid to the scheme administrator of a registered pension scheme, sub-scheme administrator of a registered pension sub-scheme, account manager of an ISA or account provider for a child trust fund, its share in the partnership profits is to be applied for the purposes of the fund, scheme or account (Regulation 7(6) of the REIT Regulations 2006). In order to pay a PID without withholding tax, the Company will need to be satisfied that the Shareholder concerned is entitled to that treatment. For that purpose, the Company will require such Shareholders to submit a valid claim form (copies of which may be obtained on request) from the Company's Registrars. Shareholders should note that the Company may seek recovery from Shareholders if the statements made in their claim form are incorrect and the Company suffers tax as a result. The Company will, in some circumstances, suffer tax if its reasonable belief as to the status of the Shareholder turns out to have been mistaken.

(ii) Individuals

Subject to certain exceptions, a PID will generally be treated in the hands of Shareholders who are individuals as the profit of a single UK property business (as defined in section 264 of the Income Tax (Trading and other Income) Act 2005). A PID is, together with any property income distributions from any other company which is within the REIT regime, treated as a UK property business separate from any other UK property business carried on by the relevant Shareholder. This means that surplus expenses from such separate UK property business of the relevant Shareholder cannot be off-set against a PID as part of a single calculation of the profits of the Shareholder's UK property business. A Shareholder who is subject to income tax at the basic rate will be liable to pay income tax at 20 per cent. on the PID. Higher rate taxpayers will be subject to tax at 40 per cent. and additional rate taxpayers at 45 per cent. No dividend tax credit will be available in respect of PIDs. However, credit will be available in respect of the basic rate tax withheld by the Company (where required) on the PID. You are referred to the paragraph above relating to withholding tax.

(iii) UK tax resident corporate Shareholders

Subject to certain exceptions, a PID will generally be treated in the hands of Shareholders who are within the charge to corporation tax as profit of a property business (as defined in section 205 of the Corporation Taxes Act 2009). This means that, subject to the availability of any exemptions or reliefs, such Shareholders will be liable to corporation tax on income on the entire amount of their PID. A PID is, together with any property income distribution from any other company which is within the REIT regime, treated as separate from any other property business carried on by the relevant Shareholder. This means that any surplus expenses from such separate property business of the relevant Shareholder cannot be offset against a PID as part of a single calculation of the Shareholder's property profits. A withholding will not generally be made on a PID paid to a Shareholder within the charge to corporation tax (but please also refer to paragraph (i)(D) above relating to exceptions to the requirement to withhold tax).

(iv) Non-UK tax residents

Where a Shareholder who is resident outside the UK for tax purposes receives a PID, the PID will generally be chargeable to UK income tax as profit of a UK property business and this tax will generally be collected by way of a withholding tax (please refer to the paragraph relating to withholding tax above). Under section 548(7) of CTA 2010, this income is expressly not treated as non-resident landlord income for the purposes of regulations under section 971 of the Income Tax Act 2007. Such Shareholders may also be subject to tax on such PIDs under any law to which they are subject outside the UK. Such Shareholders should consult their own tax adviser concerning their tax liabilities on any PIDs received from the Company.

(b) Non-PID Dividends

(i) Withholding tax

Under current UK tax law, the Company will not be required to withhold tax at source from Non-PID Dividend payments that it makes (whether in cash or in the form of a stock dividend).

(ii) Individuals

A Shareholder who is an individual resident for UK tax purposes in the UK and who receives a Non-PID Dividend from the Company will be entitled to a dividend allowance in the form of a 0 per cent. tax rate on the first £2,000 of dividend income per year. UK resident individual Shareholders will pay tax on any dividends received over the dividend allowance at the following rates: 7.5 per cent. to the extent that, when treated as the highest part of the individual's income, the dividend income falls within the basic rate band, 32.5 per cent. to the extent that, when treated as the highest part of the individual's income, the dividend income falls within the higher rate band and 38.1 per cent. to the extent that, when treated as the highest part of the individual's income, the dividend income falls within the additional rate band. Whilst dividends within the dividend allowance are tax free, these dividends will still count towards the thresholds for the purposes of applying the basic rate, higher rate and additional rate tax bands. For these purposes, the same thresholds apply for Scottish taxpayer Shareholders as for other Shareholders resident in the United Kingdom. Scottish taxpayer Shareholders should consult their own professional advisers if they are in any doubt as to their tax position in respect of dividends.

(iii) UK tax resident corporate Shareholders

Non-PID Dividends received by a UK company from another UK resident company are taxable subject to a number of exemptions. It is expected that generally one of these exemptions would apply to exempt a UK resident corporate Shareholder from tax on the receipt of any Non-PID Dividend received from the Company in respect of the New Shares, although whether an exemption class applies and whether the relevant conditions are met will depend on the circumstances of the particular Shareholder.

(iv) Non-UK tax residents

Non-UK resident Shareholders may be liable to foreign taxation on Non-PID Dividends paid by the Company. Such Shareholders should consult their own tax advisers concerning their tax liabilities on Non-PID Dividends received from the Company. The dividend allowance is also available to individual Shareholders who are tax resident outside the UK. In addition, non-UK resident individual Shareholders are treated as having paid tax at the dividend ordinary rate of 7.5 per cent. on Non-PID Dividends received. However, this tax that is treated as having been paid is not repayable.

1.4 Stamp duty and SDRT

Where Ordinary Shares are issued there is generally no charge to stamp duty or SDRT, subject to the special rules referred to below.

Subject to an exemption for certain low value transactions, the transfer on sale of Ordinary Shares will be liable to ad valorem stamp duty, generally at the rate of 0.5 per cent. (rounded up to the next multiple of five pounds (£5)) of the consideration paid. Stamp duty is normally the responsibility of the purchaser or transferee of the Ordinary Shares. An unconditional agreement to transfer such shares will normally give rise to SDRT, at the rate of 0.5 per cent. of the amount or value of the consideration paid for such shares, but such liability will be cancelled, or any SDRT paid refunded, if the agreement is completed by a duly stamped transfer within six years of the agreement having become unconditional. SDRT is normally the liability of the purchaser or transferee of the Ordinary Shares.

Under the CREST system for paperless share transfers, no stamp duty or SDRT will arise on a transfer of shares into the system, unless the transfer into CREST is itself for consideration in money or money's worth, in which case a liability to SDRT will arise, usually at the rate of 0.5 per cent. of the amount or value of consideration given. Transfers of shares within CREST are generally liable to SDRT (at a rate of 0.5 per cent. of the consideration paid) rather than stamp duty, and SDRT on relevant transactions settled within the system or reported through it for regulatory purposes will be collected and accounted for to HMRC by Euroclear.

The above statements are intended as a general guide to the current stamp duty and SDRT position. Certain categories of person, including market makers, brokers, dealers and persons connected with depositary arrangements and clearance services, may not be liable to stamp duty or SDRT and others, including persons connected with depositary arrangements and clearance services, may be liable at a higher rate or may, although not primarily liable for tax, be required to notify and account for it under the Stamp Duty Reserve Tax Regulations 1986.

2. SOUTH AFRICAN TAXATION

2.1 General

The below information is based on the current South African taxation laws as contained in the Income Tax Act, 58 of 1962 ("SA Tax Act"). South African tax legislation and principles are subject to change occasioned by future legislative amendments and court decisions. The commentary below does not constitute tax advice and is intended only as a high-level guide on the indicative South African tax treatment.

In principle, South African tax residents are subject to tax on their worldwide income and capital gains.

The South African tax system distinguishes between the tax treatment of receipts and accruals of a revenue nature and those of a capital nature. Generally, capital receipts and accruals are subject to capital gains tax ("CGT"), while revenue receipts and accruals are subject to income tax.

This commentary is limited to only South African tax resident shareholders that constitute individuals and companies.

2.2 Capital gains

Receipt or accruals of a capital nature are subject to capital gains tax at an effective rate of 22.4 per cent. for companies (which is the inclusion rate of the capital gain into taxable income at 80 per cent. multiplied by the corporate income tax rate of 28 per cent.), and at a maximum effective rate of 18 per cent. for individuals (which is the inclusion rate at 40 per cent. multiplied by the highest marginal income tax rate of 45 per cent.).

For Shareholders who are individuals, an annual exclusion from capital gains can be applied against any capital gain.

A capital gain or loss is calculated as the difference between the proceeds realised on the disposal of the Ordinary Shares and the base cost of such Ordinary Shares (broadly speaking, the cost incurred to acquire the Ordinary Shares). Where the proceeds derived from the disposal of the Ordinary Shares exceed the base cost, a capital gain will arise in the hands of the Shareholders. However, where the base cost of the Ordinary Shares exceeds the proceeds, a capital loss will arise.

In certain instances where a Shareholder disposes of the Ordinary Shares on capital account, depending on the facts and circumstances, such shareholder may rely on the participation exemption from CGT, subject to meeting very specific requirements. The participation exemption would apply where a shareholder holds 10 per cent. or more of the equity shares and voting rights in the Company. Accordingly, this should be examined on a case-by-case basis.

2.3 Income tax implications where the Ordinary Shares are held as trading stock

To the extent that the Ordinary Shares are held for trading purposes, any gains or losses arising from the disposal of such shares will be revenue in nature and should be subject to South African income tax in the hands of South African tax resident Shareholders.

Companies are subject to income tax at a corporate income tax rate of 28 per cent., whilst individuals are taxed on a sliding scale. The statutory tax rates for individuals range between 18 per cent. and 45 per cent..

2.4 Dividends

The summary below sets out the tax implications arising upon the receipt or accrual of foreign dividends settled in cash. The South African tax implications in respect of a foreign dividend comprising of assets in specie or where the dividend comprises of further shares in the Company may be different. Shareholders should consult their own professional advisers in order to establish the South African tax implications which may arise.

Cash settled foreign dividends received by or accrued to individual Shareholders are subject to income tax at the statutory marginal rates for individuals. Cash settled foreign dividends received by or accrued to Shareholders who are companies are subject to income tax at the corporate rate of 28 per cent..

A Shareholder that holds at least 10 per cent. of the shares and voting rights in the Company (whether alone or together with certain related parties) may be exempt from income tax in respect of the foreign dividend in terms of section 10B of the SA Tax Act.

Natural persons, trusts and companies may benefit from a partial exemption from income tax on a sliding scale calculated based on the ratios provided in section 10B(3) of the SA Tax Act. The effect of this partial exemption is to align the effective income tax rate with the dividends withholding tax rate in South Africa (i.e. 20 per cent.).

2.5 Foreign return of capital

Should a South African tax resident Shareholder receive a distribution from the Company that is not a foreign dividend (which may be the case in respect of distributions made other than from retained earnings, such as distributions made from share premium), the distribution will constitute a "foreign return of capital". In such a scenario, the Shareholder will be required to reduce the base cost of Ordinary Shares with the amount of the foreign return of capital. If the amount of the foreign return of capital exceeds the base cost of the Ordinary Shares in the hands of the Shareholder, the excess will constitute a capital gain in his/her/its hands and the Shareholder must account for CGT on such capital gain, unless the shareholder can rely on a CGT exemption.

A Shareholder that holds at least 10 per cent. of the shares and voting rights in the Company (whether alone or together with certain related parties) may be entitled to disregard any capital gain in respect of the foreign return of capital. Accordingly, such a Shareholder may effectively be exempt from CGT in respect of the foreign return of capital.

A foreign return of capital will not be subject to South African dividends tax.

Part 8

ADDITIONAL INFORMATION

1. RESPONSIBILITY

1.1 The Company and each of the Directors and the Proposed Directors, whose names are set out on page 30 of this document, accept responsibility for the information contained in this document (including any expressions of opinion). To the best of the knowledge and belief of the Company, the Directors and the Proposed Directors, the information contained in this document is in accordance with the facts and the document makes no omission likely to affect its import.
1.2 CBRE accepts responsibility for the information contained in its Property Valuation Report set out in Section A of Part 5 of this document. To the best of the knowledge and belief of CBRE, the information contained in its Property Valuation Report is in accordance with the facts and its Property Valuation Report makes no omission likely to affect its import.
1.3 Knight Frank accepts responsibility for the information contained in its Property Valuation Report set out in Section B of Part 5 of this document. To the best of the knowledge and belief of Knight Frank, the information contained in its Property Valuation Report is in accordance with the facts and its Property Valuation Report makes no omission likely to affect its import.

2. INCORPORATION AND REGISTERED OFFICE OF CAPITAL & REGIONAL

2.1 Capital & Regional was incorporated and registered in England and Wales on 13 November 1978 under the Companies Act 1948 as a private limited company under the name Legibus Eighteen Limited. On 29 January 1979, it changed its name to Manchester Corn Exchange Estates Limited. On 16 July 1985, it changed its name to Capital & Regional Property Investments Limited. On 19 November 1986, it changed its name to Capital & Regional Properties plc, and re registered under the Companies Act 1985 as a public limited company.
2.2 On 10 May 2000, it changed its name to its present name, Capital & Regional plc. On 2 December 2014, the Company adopted new articles of association under the Companies Act. The Company is registered under company number 01399411.
2.3 The Company is domiciled in England and Wales and its registered office is at 22 Chapter Street, London, SW1P 4NP. The Company's telephone number is +44 (0)20 7932 8000.
2.4 The principal laws and legislation under which the Company operates, and under which the Ordinary Shares have been created, is the Companies Act and regulations made thereunder.
2.5 Deloitte LLP, whose address is 1 New Street Square, London EC4A 3HQ, are the auditors of Capital & Regional. Deloitte LLP is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales.

3. THE COMPANY'S SHARE CAPITAL

3.1 As at 6 November 2019 (being the latest practicable date prior to the issue of this document) the issued and fully paid share capital of the Company was as follows:

		Issued and fully paid
Class of Share	Number	Amount
Ordinary shares of 1 pence each	727,389,117	£7,273,891.17

3.2 The issued and fully paid Ordinary Share capital of the Company, immediately following completion of the Share Subscription is expected to be as follows:

		Following completion
Class of Share	Number	Amount*
Issued and fully paid ordinary shares of 1 pence each	1,038,840,375	£10,388,403.75

3.3 The issued and fully paid Ordinary Share capital of the Company immediately following completion of the Consolidation is expected to be as follows:

		Following consolidation
Class of Share	Number	Amount*
Issued and fully paid ordinary shares of 10 pence each	103,884,038	£103,884,038

* The number of Ordinary Shares in issue immediately following completion assumes that no further Ordinary Shares will be issued between the publication of this document and completion of the Share Subscription.

3.4 The number of Ordinary Shares outstanding at the beginning and end of the last financial year is as follows:

	Issued and fully paid
31 December 2017	718,275,760
30 December 2018	726,389,117

History of Ordinary Share Capital

3.5 As at 31 December 2015, 700,752,626 Ordinary Shares were in issue fully paid or credited as fully paid. Since 31 December 2015, there have been the following changes in the issued share capital of the Company, as a result of the Company issuing Ordinary Shares:
^l on 28 October 2016, in connection with the interim dividend declared for 2016, the Company issued 1,589,874 Ordinary Shares to Shareholders who elected to receive a scrip dividend;
^l on 16 May 2017, in connection with the final dividend declared for 2016, the Company issued 6,135,235 Ordinary Shares to Shareholder who elected to receive a scrip dividend;
^l on 15 August 2017, to satisfy Long-Term Incentive awards, the Company issued 6,300,000 Ordinary Shares to employees;
^l on 26 October 2017, in connection with the interim dividend declared for 2017, the Company issued 3,498,025 Ordinary Shares to Shareholder who elected to receive a scrip dividend;
^l on 16 May 2018, in connection with the final dividend declared for 2017, the Company issued 3,964,342 Ordinary Shares to Shareholder who elected to receive a scrip dividend;
^l on 27 June 2018, to satisfy Long-Term Incentive awards, the Company issued 1,000,000 Ordinary Shares to its Employee Share Ownership Trust employees;
^l on 25 October 2018, in connection with the interim dividend declared for 2018, the Company issued 3,149,015 Ordinary Shares to Shareholder who elected to receive a scrip dividend; and
^l On 1 November 2019, to satisfy Long-Term Incentive awards, the Company issued 1,000,000 Ordinary Shares to its Employee Share Ownership Trust employees.
3.6 As at 6 November 2019 (being the latest practicable date prior to the publication of this document), the Company does not hold any Ordinary Shares in treasury and, other than in connection with the ESOT, there are no Ordinary Shares held by or on behalf of the Company itself or by subsidiaries of the Company.
3.7 Other than in connection with the Capital & Regional Employee Share Plans, no share capital of the Company or any of its subsidiaries is under option or agreed conditionally or unconditionally to be put under option.
3.8 There are no convertible securities, exchangeable securities or warrants in relation to the Company currently in issue, and there are no acquisition rights or obligations over the authorised but unissued share capital of the Company or an undertaking to increase the capital of the Company.

3.9 Shareholder authorities to be proposed at the General Meeting

At the General Meeting the Resolutions will be voted on by the Shareholders for the purposes of facilitating the Proposed Transaction and approving the Consolidation. The Notice of General Meeting, which sets out the Resolutions in full, is set out in Part 11 of this document, and a summary of the Resolutions follows below.

Resolution 1 is an ordinary resolution to grant the Directors authority to allot New Shares up to an aggregate nominal value of £3,114,512.85 (representing 30.0 per cent. of the Existing Ordinary Shares as at 6 November 2019, being the latest practicable date prior to the publication of this document). This authority shall expire (unless previously renewed, varied or revoked) at the earlier of the conclusion of the next annual general meeting of the Company after the date on which this resolution is passed and the date which is 15 months from the passing of the resolution. The Directors intend to utilise the authority in full for the purposes of the Share Subscription.

Resolution 2 is a resolution, conditional on the passing of Resolutions 1 and 4 (i) to approve the Partial Offer on the terms set out in the Offer Document and (ii) to approve the grant of a waiver by the Takeover Panel, of any requirement under Rule 9 of the Takeover Code on Growthpoint to make a general offer to the Shareholders as a result of the Proposed Transaction. This resolution is to be taken on a poll by the Independent Shareholders (those Shareholders who are independent of Growthpoint and persons acting in concert with Growthpoint) and requires the approval of more than 50 per cent. of the voting rights in the Company held by Independent Shareholders.

Resolution 3 is an ordinary resolution, conditional on the Proposed Transaction becoming effective, to approve the consolidation of Ordinary Shares of £0.01 each in the share capital of the Company in issue and held, in the case of Shareholders on the UK share register at 6.00 p.m. on 14 January 2020 and, in the case of Shareholders on the SA share register at the close of business on 17 January 2020, on the basis of 10 Ordinary Shares of 1 pence each for one new ordinary share of 10 pence each.

Resolution 4 is a special resolution, conditional on the passing of Resolution 1, to permit the Directors to allot 311,451,258 New Shares (representing 30.0 per cent. of the Existing Ordinary Shares as at 6 November 2019, being the latest practicable date prior to the publication of this document) as if the pre-emption rights set out in section 561 of the Companies Act did not apply.

4. RIGHTS AND RESTRICTIONS ATTACHING TO THE ORDINARY SHARES

4.1 The rights attaching to the Ordinary Shares including dividend rights, voting rights, pre-emption rights, rights to share in profits, rights on a winding up or liquidation are set out in the Articles of Association incorporated by reference into this document, as detailed in Part 9 of this document.
4.2 Any restrictions on transfer of the Ordinary Shares including any provisions which would have the effect of delaying, deferring or preventing a change of control of Capital & Regional are set out in the Articles of Association incorporated by reference into this document, as detailed in Part 9 of this document.

5. MANDATORY TAKEOVER BIDS AND SQUEEZE-OUT AND SELL-OUT RULES

5.1 Mandatory bids

The Takeover Code applies to the Company. Under the Takeover Code, if an acquisition of Ordinary Shares were to increase the aggregate holding of an acquirer and its concert parties to an interest in Ordinary Shares carrying 30 per cent. or more of the voting rights in the Company, the acquirer and, depending upon the circumstances, its concert parties, would be required (except with the consent of the Panel) to make a cash offer for the outstanding Ordinary Shares in the Company at a price not less than the highest price paid for the Ordinary Shares in the Company by the acquirer or its concert parties during the previous 12 months. A similar obligation to make such a mandatory offer would also arise on the acquisition of Ordinary Shares by a person holding (together with its concert parties) Ordinary Shares carrying between 30 to 50 per cent. of the voting rights in the Company if the effect of such acquisition were to increase that person's percentage of the voting rights.

5.2 Squeeze-out

Under the Companies Act, if an offeror were to acquire, or unconditionally contract to acquire 90 per cent. of the shares to which the offer relates and 90 per cent. of the voting rights attached to those shares, within three months of the last day on which its offer can be accepted, it could compulsorily acquire the remaining 10 per cent. It would do so by sending a notice to outstanding Shareholders telling them that it will compulsorily acquire their shares and then, six weeks later, it would execute a transfer of the outstanding shares in its favour and pay the consideration to the Company, which would hold the consideration on trust for outstanding Shareholders. The consideration offered to the Shareholders whose shares are compulsorily acquired under the Companies Act must, in general, be the same as the consideration that was available under the takeover offer.

5.3 Sell-out

The Companies Act also gives minority Shareholders in the Company a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer related to all the Ordinary Shares and at any time before the end of the period within which the offer could be accepted, the offeror held or had agreed to acquire not less than 90 per cent. of the Ordinary Shares to which the offer relates, any holder of shares to which the offer related who had not accepted the offer could, by a written communication to the offeror, require it to acquire those shares.

The offeror would be required to give any Shareholder notice of his/her right to be bought out within one month of the right arising. The offeror may impose a time limit on the rights of minority Shareholders to be bought out, but that period cannot end less than three months after the end of the acceptance period. If a Shareholder exercises his/her rights, the offeror is bound to acquire those shares on the terms of the offer or on such other terms as may be agreed.

5.4 Takeover bids

Other than the Partial Offer, no public takeover bid has been made in relation to the Company during the last financial year or the current financial year.

6. DIRECTORS OF THE COMPANY

6.1 The Directors, and their principal functions are as follows:

Name	Position
Hugh Scott-Barrett	Chairman, Non-executive Director
Lawrence Hutchings	Chief Executive Officer
Stuart Wetherly	Group Finance Director
Tony Hales	Non-Executive Director
Wessel Hamman	Non-Executive Director
Ian Krieger	Non-Executive Director
Louis Norval	Non-Executive Director
Laura Whyte	Non-Executive Director
	The Proposed Directors, and their proposed principal functions are as follows:

Name	Position
Norbert Sasse	Non-Executive Director
George Muchanya	Non-Executive Director

6.2 The biographical details of the Directors are set out in paragraph 10 of Part 2 of this document.
6.3 The biographical details of the Proposed Directors are set out in paragraph 11 of Part 2 of this document.
6.4 In addition to their directorships of Capital & Regional and companies in the Group, the Directors and the Proposed Directors hold or have held the following directorships and/or have been partners of the following partnerships in the five years before the date of this document:

(i) Hugh Scott-Barrett

Current GAM Holding AG RBR Group Limited

(ii) Lawrence Hutchings

Current N/A

(iii) Stuart Wetherly

Current

London Wildlife Limited London Wildlife Trust (The)

(iv) Tony Hales

Current

The Greenwich Foundation for the Old Royal Naval College Greenwich Trading Company Limited Services Sound and Vision Corporation (The) NAAFI Incorporated Trustees NAAFI Pension Fund Trustees Mirodas Properties Limited Associated Board of the Royal Schools of Music

(v) Wessel Hamman

Current

Cederberg Capital (Cayman) Limited Clearance Capital Limited Karoo Investment S.a r.l. Clearance Segura Master Fund Limited Clearance Segura Fund Clearance Segura Fund GP Limited Oubaai 959 cc Stabilis Investment Holdings Limited Whippersnapper Limited Homestead Group Holdings Limited Hystead Plc Clearance Cantara Fund Clearance Cantara Master Fund Limited Clearance Camino Fund Limited Beyond Retail Property Fund Limited

(vi) Ian Krieger

Current

Anthony Nolan Trading Limited Safestore Holdings plc Primary Health Properties plc

Former

Dinton Associates Limited (dissolved) Goodwood Estate Company Limited (The)

Former

N/A

Former

N/A

Former

Welsh National Opera Limited Canal & River Trust International Personal Finance plc

Former

Groenkloof Office Park cc Clearance Capital LLP European Real Estate Investment Trust Limited Sirius Facilities (UK) Limited Sirius Real Estate Limited

Former

Nuffield Trading Limited Nuffield Trust for Research and Policy Studies in Heath Services Premier foods plc

(vii) Louis Norval

Current

AMZ Holdings Limited Arctospark (Pty) Ltd Balkan Retail NV Cederberg Capital (Cayman) Clearance Capital (Cayman) Ltd Emerging African Property Holdings Erf 11038 Steenberg Constantia (Pty) Ltd Gerhard Moerdyk Holdco (Pty) Ltd Green Create Holdings Ltd Green Create Limited Green Create Nutra Limited Green Create W2V Africa Limited Green Create W2V Limited Green Create W2V SA (Pty) Ltd Homestead Group Holdings Ltd Hyprop Investments Limited Hystead Limited Makrogate Limited Marula Mines Limited Mstead Ltd Oceanwise Holdings (Pty) Ltd Parkdev BW (Pty) Ltd Parkdev Investments (Pty) Ltd Parkdev RC (Pty) Ltd Parkdev SA (Pty) Ltd PDI Investment Holdings Ltd Mettle Solar Africa Ltd Travenna Development Company (Pty) Ltd Trigen Group (Pty) Ltd Vidna Holdings Limited Y3K Investments (Pty) Ltd

Former

Oceanwise (Pty) Ltd Como Capital (Pty) Ltd Everard Read Holdings (Pty) Ltd Leopard 220 Investments (Pty) Ltd Retail Capital (Pty) Ltd Luxstead S.a.r.l Luxembourg Tassei Limited Stenham European Shopping Centre Fund IC

(viii) Laura Whyte

Current

The Greenwich Foundation for the Old Royal Naval College Xlvet UK Limited British Horseracing Authority Limited

Former

Ebony Horse Club British Equestrian Foundation

(ix) Norbert Sasse

Current

Acucap Properties Limited Globalworth Real Estate Investments Limited Globalworth Poland Real Estate N.V. Growthpoint ABQ (Pty) Ltd Growthpoint Healthcare Property Holdings (RF) Limited Growthpoint Healthcare Property Management Company (Pty) Ltd Growthpoint Management Services (Pty) Ltd Growthpoint Note Issuer Company (Pty) Ltd Growthpoint Properties Australia Limited Growthpoint Investec African Property Management Limited Growthpoint Properties Limited Growthpoint Properties International (Pty) Ltd Growthpoint Security SPV Series 2 (Pty) Ltd Growthpoint Telecommunication Infrastructure (Pty) Ltd Growthpoint TPG (Pty) Ltd Metboard Properties Limited Paramount Property Fund Limited The Two Oceans Aquarium Trust V and A Waterfront Developments (Pty) Ltd V and A Waterfront Holdings Limited V and A Waterfront Marina (Pty) Ltd Victoria and Alfred Waterfront (Pty) Ltd

(x) George Muchanya

Current

Former N/A

GIAP Manco Empowerment Limited Globalworth Real Estate Investments Limited Globalworth Poland Real Estate N.V. Growthpoint Healthcare Property Holdings (RF) Limited Growthpoint Healthcare Property Management Company (Pty) Ltd Growthpoint Investec African Property Management Limited Humbaco (Pty) Ltd

6.5 At the date of this document, save as disclosed in this paragraph 6 of Part 8 of this document, none of the Directors or the Proposed Directors have at any time in the five years preceding the date of this document:
(a) been a director or partner of any companies or partnerships; or

Former

323 Festival Street (Pty) Ltd Abseq Properties (Pty) Ltd Africa Real Estate Management Company Limited Aquarella Investments 136 (Pty) Ltd Canyon Springs Investments 23 (Pty) Ltd Growthpoint Security SPV Number 1 (Pty) Ltd Growthpoint Security SPV Number 2 (Pty) Ltd Growthpoint Security SPV Number 3 (Pty) Ltd Growthpoint Security SPV Series 1 (Pty) Ltd Tiber Property Group (Pty) Ltd

V & A Waterfront Properties (Pty) Ltd

(b) had any convictions in relation to fraudulent offences (whether spent or unspent); or
(c) been adjudged bankrupt or entered into an individual voluntary arrangement; or
(d) been a director of a company which has been placed into receivership, compulsory liquidation, creditors' voluntary liquidation or administration, or which entered into any CVA or any composition or arrangement with its creditors generally or with any class of its creditors, at any time while he was a director of that company or within 12 months after his ceasing to be a director; or
(e) been a partner or senior manager in a partnership which, while he was a partner or senior manager or within 12 months of his ceasing to be a partner or senior manager, was put into compulsory liquidation or administration or entered into any partnership voluntary arrangement or had a receiver appointed over any partnership asset; or
(f) had a receiver appointed with respect to any assets belonging to him or a partnership of which he has been a partner; or
(g) been subject to any official public incrimination and/or sanction by any statutory or regulatory authority (including any designated professional body) or been disqualified by a court from acting as a director or other officer of a company or from acting in the management or conduct of the affairs of any company.
6.6 None of the Directors or the Proposed Directors have any family relationship with another Director.

7. SENIOR MANAGEMENT

7.1 Other than the Directors and James Ryman, who acts as the Group's investment director, the Group has no senior managers.
7.2 James Ryman, as investment director, is responsible for driving investment performance from Capital & Regional's shopping centre portfolio. He joined Capital & Regional in 2007 and prior to that qualified as a Chartered Surveyor at Donaldsons Chartered Surveyors where he spent 13 years specialising in all aspects of shopping centre asset management, latterly running the Retail Asset Management team.
7.3 James has held the following directorship and/or has been a partner of the following partnerships in the five years before the date of this document:

Current Former None Capital & Regional plc

7.4 At the date of this document James has not at any time in the five years preceding the date of this document:
(a) been a director or partner of any companies or partnerships; or
(b) had any convictions in relation to fraudulent offences (whether spent or unspent); or
(c) been adjudged bankrupt or entered into an individual voluntary arrangement; or
(d) been a director of a company which has been placed into receivership, compulsory liquidation, creditors' voluntary liquidation or administration, or which entered into any CVA or any composition or arrangement with its creditors generally or with any class of its creditors, at any time while he was a director of that company or within 12 months after his ceasing to be a director; or
(e) been a partner or senior manager in a partnership which, while he was a partner or senior manager or within 12 months of his ceasing to be a partner or senior manager, was put into compulsory liquidation or administration or entered into any partnership voluntary arrangement or had a receiver appointed over any partnership asset; or
(f) had a receiver appointed with respect to any assets belonging to him or a partnership of which he has been a partner; or
(g) been subject to any official public incrimination and/or sanction by any statutory or regulatory authority (including any designated professional body) or been disqualified by a court from acting as a director or other officer of a company or from acting in the management or conduct of the affairs of any company.
7.5 James has no family relationship with another Director. James does not have any potential conflicts of interest between his duties to the Company and his private interests or other duties.

8. INTERESTS OF THE DIRECTORS, PROPOSED DIRECTOR AND SENIOR MANAGER

Save as set out in paragraph 8.1 below, no Director or Proposed Director or the Senior Manager has any interests (beneficial or non-beneficial) in the share capital of the Company or any of its subsidiaries.

Directors', Proposed Directors' and Senior Manager's shareholdings

8.1 As at 6 November 2019 (being the latest practicable date prior to the publication of this document), the beneficial interests of the Directors, Proposed Directors and Senior Manager and their connected persons (as defined in sections 252 to 255 of the Companies Act) are as follows:

Director/Proposed Director/Senior Manager	Number of Existing Ordinary Shares	Percentage of existing issued ordinary share capital
Hugh Scott-Barrett	3,540,000	0.49
Lawrence Hutchings	79,790	0.01
Stuart Wetherly	229,956	0.03
Tony Hales	599,999	0.08
Wessel Hamman	–	–
Ian Krieger	103,133	0.01
Louis Norval*	135,441,653	18.62
Laura Whyte	78,852	0.01
Norbert Sasse (Proposed Director)	549,400	0.08
George Muchanya (Proposed Director)	–	–
James Ryman (Senior Manager)	257,498	0.04

* Louis Norval holds his Ordinary Shares through PDI Investment Holdings Limited and Mstead Limited

8.2 The beneficial interests of the Directors, Proposed Directors and the Senior Manager and their connected persons (as defined in section 252 of the Companies Act) in the Ordinary Shares as are expected to subsist immediately following Admission, are as set out below, assuming completion of the Proposed Transaction and that where applicable, directors are scaled back to acceptances of approximately 30.2 per cent. of their shareholdings.

Director/Proposed Director/Senior Manager	Number of Existing Ordinary Shares following Admission	Percentage of existing issued ordinary share capital following Admission
Hugh Scott-Barrett	2,470,358	0.24
Lawrence Hutchings	55,680	0.01
Stuart Wetherly	160,472	0.02
Tony Hales	418,704	0.04
Wessel Hamman	–	–
Ian Krieger	71,970	0.01
Louis Norval	94,516,784	9.10
Laura Whyte	55,026	0.01
Norbert Sasse (Proposed Director)	383,394	0.04
George Muchanya (Proposed Director)	–	–
James Ryman (Senior Manager)	179,692	0.02

8.3 Taken together, the combined percentage interest of the Directors, the Proposed Directors and the Senior Manager and their connected persons (as defined in section 252 of the Companies Act) in the Ordinary Shares expected to subsist immediately following Admission is approximately 9.46 per cent., assuming completion of the Proposed Transaction and that where applicable, directors are scaled back to acceptances of approximately 30.2 per cent. of their shareholdings.

8.4 Save as disclosed in paragraphs 8.1 and 8.7 of this Part 8, as at 6 November 2019 (being the latest practicable date prior to the publication of this document), none of the Company nor any of the Directors (including any members of such Directors' respective immediate families, related trusts or connected persons) or any person deemed to be acting in concert with the Directors, has an interest in or a right to subscribe for, or had any short position (whether conditional or absolute, and whether in the money or otherwise) in relation to, any relevant securities (as defined in the Takeover Code), nor had any such person dealt in any relevant securities during the Disclosure Period; and neither the Company nor any of the Directors nor any person acting in concert with the Company or Directors have borrowed or lent any relevant securities.
8.5 There are no arrangements of the kind referred to in Note 11 of the definition of acting in concert in the Takeover Code which existed between the Company nor any of the Directors (including any members of such Directors' respective immediate families, related trusts or connected persons) or any associate of the Company and any other person, nor have any dealings in relevant securities taken place between such parties during the Disclosure Period.
8.6 Neither the Company nor any of the Directors (including any members of such Directors' respective immediate families, related trusts or connected persons) had any interest in or right to subscribe for, or had any short position in relation to, any relevant securities in any corporate member of the Growthpoint Group (or derivatives referenced thereto) and securities convertible into, rights to subscribe for and options (including traded options), any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery, in respect thereof.

Interests of Directors and the Senior Manager under the LTIP

8.7 As at 6 November 2019 (being the latest practicable date prior to the publication of this document), the following awards over Ordinary Shares have been granted to the following Directors and Senior Manager:

Director/Senior Manager	Shares subject to award
Hugh Scott-Barrett	291,068*
Lawrence Hutchings	2,746,771*
Stuart Wetherly	626,736
James Ryman	789,827

* Including deferred bonus shares.

These figures represent the maximum options allocated to these individuals but will only vest upon the achievement of revenant performance criteria for the LTIP awards.

Conflict of Interest

8.8 Save for interests of Louis Norval in the Parkdev Parties (insofar as they are significant shareholders of the Company and beneficiaries under the Parkdev Relationship Agreement and the Homestead Relationship Agreement) and the Proposed Directors relationship with Growthpoint:
^l in respect of any Director, any Proposed Director and the Senior Manager, there are no actual or potential conflicts of interests between any duties they have to the Company, either in respect of the Partial Offer, the Share Subscription or otherwise, and the private interests and/or other duties they may also have. Save as disclosed in this Part 8, there are no interests, including conflicting ones, that are material to the Partial Offer or Share Subscription;
^l no Director, any Proposed Director and the Senior Manager, has a material interest in any significant contract with the Company or any of its subsidiaries.
8.9 No Director, any Proposed Director and the Senior Manager, was selected to be a director of the Company pursuant to any arrangement or understanding with any major customer, supplier or other person having a business connection with the Group. The Proposed Directors will be appointed as a consequence of the rights that Growthpoint have pursuant to the Relationship Agreement.
8.10 There are no family relationships between any of the Directors, any Proposed Director and the Senior Manager.

9. REMUNERATION DETAILS, DIRECTORS', PROPOSED DIRECTORS' AND THE SENIOR MANAGER SERVICE CONTRACTS AND LETTERS OF APPOINTMENT

Executive Directors: service agreements

9.1 Each of the Executive Directors has a rolling service agreement that may be terminated on one year's notice by either party. The service agreements of Lawrence Hutchings and Stuart Wetherly entitle them, on termination of their service agreement, to payment equal to basic salary and the value of benefits for 12 months.
9.2 The key provisions of the Executive Directors' service agreements are set out below:

Name	Current annual salary (£)	Maximum bonus as percentage of salary	Benefits	Date of contract	Date of expiry of contract	Notice period
Lawrence Hutchings	£425,000	300%	Pension contribution, private medical insurance, permanent health insurance, critical illness cover, life insurance	13 June 2017	Rolling Contract	12 months
Stuart Wetherly	£275,000	250%	Pension contribution, private medical insurance, permanent health insurance, critical illness cover, life insurance	11 March 2019	Rolling Contract	12 months

Non-Executive Directors: letters of appointment

9.3 Non-Executive Directors, including the Chairman, do not hold service contracts and each of the Non-Executive Directors has been appointed pursuant to letters of appointment. Non-Executive Directors are all appointed on rolling contracts with no notice period save for the Chairman who has a six-month notice period. All Directors stand for re-election annually and their Board appointment automatically terminates in the event of a Director not being re-elected by shareholders.
9.4 The Non-Executive Directors are not entitled to bonuses, benefits, pensions contributions or to participate in any incentive schemes. The fees payable to the Non-Executive Directors comprise a standard director's fee and a fee, where relevant, for additional responsibilities. Tony Hales receives an additional fee of £5,000 in respect of his position as senior independent Director. Tony Hales, Ian Krieger and Laura Whyte receive an additional fee of £5,000 in respect of their position as members of the Audit and Remuneration Committee.

9.5 The key provisions of the Non-Executive Directors' letters of appointment are set out below:

Name	Basic fee (£)	Chair fee (£)	Additional fee (£)	Total (£)	Appointment	Date of expiry of appointment
Hugh Scott- Barrett	–	140,454	–	140,454	9 March 20081	Rolling Contract
Tony Hales	42,448	–	10,000	52,448	1 August 2011	Rolling Contract
Wessel Hamman	42,448	–	–	42,448	2 June 2015	Rolling Contract
Ian Krieger	42,448	–	5,000	47,448	1 December 2014	Rolling Contract
Louis Norval	42,448	–	–	42,448	15 September 2009	Rolling Contract
Laura Whyte	42,448	–	5,000	47,448	1 December 2015	Rolling Contract

H. Scott-Barret's contract was amended on 13 June 2017 when he ceased to be Chief Executive and became Non-Executive chairman

Senior Manager: service agreement

9.6 James Ryman has a rolling service agreement that may be terminated on six months' notice by either party. The service agreement entitles him, on termination of his service agreement, to payment equal to basic salary and the value of benefits for six months.
9.7 The key provisions of the James Ryman's service agreement is set out below:

Name	Current annual salary (£)	Maximum bonus as percentage of salary	Benefits	Date of contract	Date of expiry of contract	Notice period
James Ryman	£175,026	N/A	Pension contribution, private medical insurance, permanent health insurance, critical illness cover, life insurance	20 August 2007	Rolling Contract	6 months

Proposed Directors: letters of appointment

9.8 On appointment each of Norbert Sasse and George Muchanya will enter into letters of appointment substantially on the terms described in paragraphs 9.3 and 9.4 above. They will not be entitled to receive any director's fee.
9.9 Save as set out above, none of the service agreements of the Directors provide for benefits upon termination of employment.
9.10 There have been no amendments to the service agreements or letters of appointment of any of the Directors within the period of six months preceding the date of this document.

Name	Salary/fees (£)	Bonus (£)	Benefits (£)	Pension supplement(£)	Total (£)
Hugh Scott- Barrett	137,700	No entitlement	No entitlement	No entitlement	137,700
Lawrence Hutchings	383,000	301,613	10,000	57,450	752,063
Stuart Wetherly	164,865	70,000	4,196	9,490	248,551
Tony Hales	51,616	No entitlement	No entitlement	No entitlement	51,616
Wessel Hamman	41,616	No entitlement	No entitlement	No entitlement	41,616
Ian Krieger	46,616	No entitlement	No entitlement	No entitlement	46,616
Louis Norval	41,616	No entitlement	No entitlement	No entitlement	41,616
Laura Whyte	46,616	No entitlement	No entitlement	No entitlement	46,616
James Ryman	171,595	60,000	4,806	12,392	248,793

Directors' and Senior Manager emoluments for the financial year ended 30 December 2018

9.11 For the financial year ended 30 December 2018, the total amount paid by the Group to provide pension, retirement or similar benefits for Directors was £86,000.

10. BOARD PRACTICES

10.1 Introduction

The Board is firmly committed to a high standard of corporate governance. The Company currently complies with the Corporate Governance Code and has complied with such code in such manner throughout the financial year ended 30 December 2018 with the exceptions that (i) Hugh Scott-Barrett was not considered independent on his appointment as Chairman of the Company on 13 June 2017, having previously served as the Chief Executive and (ii) at least half the board are not considered to be independent.

10.2 Board structure

The roles of the chairman and chief executive on the Board are, and will continue to be, separate.

The Board currently has three non-executive directors, Tony Hales, Ian Krieger and Laura Whyte, who are independent in character and judgement and free from relationships or circumstances which are likely to affect, or could appear to affect, their judgement.

Under the terms of the Homestead Relationship Agreement, Homestead will be entitled to appoint one director to the Board following Admission. Consequently, Wessel Hamman shall stand down and Louis Norval shall remain on the Board.

Under the terms of the Relationship Agreement, Growthpoint will have the right to appoint two directors, Norbert Sasse and George Muchanya, to the Board following Admission. The Directors nominated by Growthpoint would not be considered independent for Corporate Governance Code purposes as they represent a controlling shareholder of the Company. However, the Board considers that this will not impede the effective operation of the Board in light of the strength and skills of the independent Non-Executive Directors on the Board.

The Board is responsible for the strategy, effective control and management of the Group. There is a formal schedule of matters specifically reserved for Board approval, which includes approval of the annual and interim accounts, the approval of authority levels below the Board and material acquisitions, disposals and financing arrangements. The Board delegates authority to the executive committee of the Board, which consists of the Executive Directors, in respect of operational decisions and certain transactions within defined, limited parameters. The Board has a regular schedule of meetings together with further meetings as required by the ongoing business of the Company. The executive committee meets on a weekly basis to deal with the ongoing management of the Group.

The Board has established Audit, Remuneration, Nomination and Responsible Business Committees which operate within defined terms of reference, which are made available on the Company's website (www.capreg.com), and their minutes are circulated to the Board. Tony Hales is the senior independent Non-Executive Director.

Under the terms of the Relationship Agreement, a director appointed by Growthpoint has the right to attend the meetings of the Audit, Remuneration and Nomination Committees as an observer and be provided with all papers of such committee of the Board.

10.3 Remuneration Committee

The Remuneration Committee is chaired by Tony Hales. The other members are Ian Krieger and Laura Whyte. The Remuneration Committee meets regularly during the year. Its responsibilities include:

^l determining the remuneration policy of the Executive Directors and senior employees;
^l determining the terms of the service agreements, salaries and discretionary bonus payments; and
^l determining the awards to be made to all participants in the Company's incentive schemes.

The terms of the service agreements, salaries and discretionary bonus payments of the members of the Remuneration Committee are determined by the other directors of the Company who are not on the Remuneration Committee.

10.4 Audit Committee

10.5 The Audit Committee is chaired by Ian Krieger. The other members are Tony Hales and Laura Whyte. The Audit Committee meets regularly during the year. The Audit Committee's responsibilities include:
^l monitoring the integrity of the financial statements of the Company and any formal announcements relating to the Company's financial performance;
^l reviewing the Company's internal financial controls and the Company's internal control and risk management systems and the biannual Risk Review report;
^l making recommendations to the Board in relation to the appointment of the external auditor and approving the remuneration and terms of engagement of the external auditor;
^l reviewing and monitoring the external auditor's independence, objectivity and effectiveness;
^l reviewing and monitoring the valuation process; and
^l developing and implementing policy on the engagement of the external auditor to supply non-audit services, taking into account relevant ethical guidance.
10.6 Under the terms of the Relationship Agreement, Growthpoint has the right, on written notice to the Board, for its chief financial officer or other senior member of Growthpoint's finance team to attend any meeting of the Audit Committee as an observer and be provided with all papers of such committee of the Board.

11. INTERESTS OF SIGNIFICANT SHAREHOLDERS IN THE COMPANY

11.1 As at 6 November 2019 (being the latest practicable date prior to the publication of this document), the Company had been notified of or was otherwise aware of the following Shareholders who were directly or indirectly interested in 3 per cent. or more of the issued Ordinary Shares:

Shareholder	Number of Existing Ordinary Shares	Percentage of existing issued ordinary share capital	Number of Ordinary Shares following Admission**	Percentage of issued ordinary share capital following Admission**
Mstead Limited*	69,978,847	9.62	48,834,132	4.70
PDI Investment Holdings*	65,462,806	9.00	45,682,651	4.40
Peens Family Holdings	59,067,548	8.12	41,219,776	3.97
ICAMAP Investments	53,147,931	7.31	37,088,823	3.57
Allan Gray Investment Management	46,048,324	6.33	32,134,423	3.09
Aberforth Partners	37,287,564	5.13	26,020,803	2.50
Thames River Capital	35,291,790	4.85	24,628,069	2.37
New Fortress Finance Holdings	28,033,620	3.85	19,563,018	1.88
Janus Henderson Investors	27,670,181	3.80	19,309,396	1.86
Premier Asset Management	22,070,380	3.03	15,401,623	1.48

* these entities are beneficially owned by Louis Norval, a Non-Executive Director of the Company.

** assuming the Shareholders listed above each sell 30.2 per cent. of their Existing Ordinary Shares under the Partial Offer.

11.2 Save as disclosed in this paragraph 11, the Company is not aware of any person who, as at 6 November 2019 (being the latest practicable date prior to the publication of this document), directly or indirectly, has a holding which exceeds 3 per cent. (and in the case of a fund management holding company, 5 per cent.) of the total voting rights attaching to its issued share capital.
11.3 The Company is not aware of any person who, as at 6 November 2019 (being the latest practicable date prior to the publication of this document), directly or indirectly, jointly or severally, exercises or could exercise control over the Company, nor is it aware of any arrangements, the operation of which may at a subsequent date result in a change of control of the Company, other than in favour of Growthpoint under the terms of the Proposed Transaction which will, if the Proposed Transaction completes, obtain approximately 51.1 per cent of the Ordinary Shares of the enlarged issued share capital of the Company following Admission.
11.4 None of the Shareholders referred to in this paragraph 11 has different voting rights from any other holder of Ordinary Shares in respect of such shares held by them.

12. SUBSIDIARY UNDERTAKINGS

The Company is the holding company of the Group and has the following principal subsidiaries and associated undertakings each of which is directly or indirectly owned by the Company and is considered by the Company to be likely to have a significant effect on the assessment of the assets and liabilities, the financial position and/or the profits and losses of the Group. In each case the issued share capital is fully paid.

		Percentage of equity and voting rights	Country of
Subsidiary	Holding	held	incorporation	Principal activity
Capital & Regional (Europe Holding 5) Limited	Ordinary shares	100	Jersey	Property investment
Capital & Regional (Jersey) Limited	Ordinary shares	100	Jersey	Property investment
Capital & Regional (Mall GP) Limited	Ordinary shares	100	Great Britain	Property investment
Capital & Regional (Projects) Limited	Ordinary shares	100	Great Britain	Property investment
Capital & Regional (Shopping Centres) Limited	Ordinary shares	100	Jersey	Property investment
Capital & Regional Earnings Limited	Ordinary shares	100	Great Britain	Property investment
Capital & Regional Holdings Limited	Ordinary shares	100	Great Britain	Property investment
Capital & Regional Ilford Limited	Ordinary shares	100	Jersey	Property investment
C&R Ilford Limited Partnership	Ordinary shares	100	Great Britain	Property investment
C&R Ilford (General Partner) Limited	Ordinary shares	100	Great Britain	Property investment
Capital & Regional Income Limited	Ordinary shares	100	Great Britain	Property investment
Capital & Regional Property
Management Limited	Ordinary shares	100	Great Britain	Property management
Mall People Limited	Ordinary shares	100	Great Britain	Property management
Marlowes Hemel Limited	Ordinary shares	100	Jersey	Property investment
Snozone Holdings Limited	Ordinary shares	100	Great Britain	Operator of indoor ski slopes
Snozone Leisure Limited	Ordinary shares	100	Great Britain	Operator of indoor ski slopes
Snozone Limited	Ordinary shares	100	Great Britain	Operator of indoor ski slopes
The Mall (General Partner) Limited	Ordinary shares	100	Great Britain	Property investment
The Mall (Luton) (General Partner) Limited	Ordinary shares	100	Great Britain	Property investment
The Mall Limited Partnership	Ordinary shares	100	Great Britain	Property investment
The Mall (Luton) Limited Partnership	Ordinary shares	100	Great Britain	Property investment
The Mall Unit Trust	Ordinary shares	100	Jersey	Property investment
Principal associate entities
Euro B-Note Holding Limited	Ordinary shares	39.90	Jersey	Finance

Save for the material subsidiaries disclosed in this paragraph 12 above the Company does not hold capital in any other undertakings that have a significant effect on the assessment of the Company's assets and liabilities, financial position or profits and losses.

13. EMPLOYEES

13.1 The monthly average number of full-time employees (including the Executive Directors), employed by the Group during the years ended 2018, 2017 and 2016 was as follows:

	Year to	Year to	Year to
	30 December	30 December	30 December
	2018	2017	2016
CRPM/PLC	43	46	51
Shopping Centres	70	60	67
Snozone	135	132	142
	—–—––––——	—–—––––——	—–—––––——
Total staff numbers	248	238	260
	—–––––———	—–––––———	—–––––———

13.2 The monthly average number of total employees (including Executive Directors) employed by the Group during the years ended 2016, 2017 and 2018 was as follows:

	Year to	Year to	Year to
	30 December	30 December	30 December
	2018	2017	2016
CRPM/PLC	45	49	52
Shopping Centres	85	80	86
Snozone	237	225	229
	—–—––––——	—–—––––——	—–—––––——
Total staff numbers	367	355	367
	—–––––———	—–––––———	—–––––———

14. CAPITAL & REGIONAL EMPLOYEE SHARE PLANS

14.1 The Company operates:
^l The Capital & Regional plc 2008 Long-Term Incentive Plan ("2008 LTIP");
^l The Capital & Regional plc 2018 Long-Term Incentive Plan ("2018 LTIP");
^l The Capital and Regional plc 2018 SAYE Scheme ("2018 SAYE Scheme"); and
^l The Capital & Regional plc 2019 Combined Incentive Plan ("2019 CIP"),

pursuant to which awards or options are outstanding or may be granted in the future (together, the "Capital & Regional Employee Share Plans"). For the purposes of facilitating the operation of the Capital & Regional Employee Share Plans, the Company also operates the Capital & Regional plc Employee Share Ownership Trust 2002 ("ESOT").

Set out below is a brief summary of the principal terms of the Capital & Regional Employee Share Plans and the ESOT.

14.2 The 2008 LTIP

^l Following the expiry of the 2008 LTIP on 9 May 2018, no further awards may be granted under the 2008 LTIP. Awards (in the form of options to acquire shares for nil consideration) are outstanding over 8,826,017 Ordinary Shares. Set out below is a summary of the principal terms applying to the outstanding awards under the 2008 LTIP.

Grant of awards in 2014 pursuant to the 2008 LTIP

^l Awards over 273,453 Ordinary Shares have vested and are exercisable.

Grant of awards in 2016 pursuant to the 2008 LTIP

^l Awards over 785,488 Ordinary Shares have vested and may be exercised from 23 August 2021 except for certain 'good leavers' who are able to exercise immediately.

Grant of awards in 2017 pursuant to the 2008 LTIP

^l There remain live awards granted in 2017 over a maximum of 4,416,826 Ordinary Shares which will vest over a three-year period expiring on 19 April 2020 subject to the achievement of performance targets. The vested awards will not be capable of exercise for a period of 24 months except for certain 'good leaver' who are able to exercise their awards once vested.

Grant of awards in 2018 pursuant to the 2018 LTIP

^l There remain live awards granted in 2018 over a maximum of 3,350,250 Ordinary Shares which will vest over a three-year period expiring on 18 April 2021 subject to the achievement of performance targets. The vested awards will not be capable of exercise for a period of 24 months except for certain 'good leavers' who are able to exercise their awards once vested.

Performance targets

^l The outstanding awards are subject to performance targets based on average Adjusted Profit per Share growth, relative property return versus the IPD Retail Index and relative Total Shareholder Return versus the FTSE 350 Real Estate Index, with each element representing one third of the maximum.
^l The performance targets may not be amended or waived unless an event occurs that causes the Company to consider that an amended target would be a fairer measure of performance and is not materially less difficult to satisfy or that it is appropriate to waive the target. The Remuneration Committee may, in line with the scheme rules, adjust existing awards to reflect the Share Subscription.

Vesting of Awards

^l An award will normally vest only on or after the third anniversary of the date of grant subject to the achievement of the performance targets. The Remuneration Committee has the discretion to allow a participant's Award to vest early if he is transferred within the Capital & Regional Group to work overseas and as a result would suffer less favourable tax treatment in respect of his award or become subject to a restriction on his ability to hold or deal in the shares acquired or the sale proceeds received.

Rights attaching to Ordinary Shares

^l Ordinary Shares allotted or transferred under the 2008 LTIP will rank pari passu with Ordinary Shares then in issue (except in respect of rights attaching to such shares by reference to a date prior to the date of exercise).

Leaving employment

^l Where the participant ceases to be employed within the Capital & Regional Group as a result of death or as a result of the company or part of the business by which a participant was employed ceasing to be a member or part of the Capital & Regional Group, a proportion of the award will vest immediately subject to the achievement of the performance targets. The targets will be tested at the date of cessation of employment. The amount of the award which may vest will then normally be proportionately reduced by taking into account the period of time the award has been held by the participant at the date of cessation of employment. An option lapses if it has not been exercised within six months of the date on which employment ceases (12 months in the case of death).
^l Where the participant ceases to be employed as a result of injury, disability, ill health, redundancy or retirement, no early vesting will occur, and the award will remain in existence and subject to the performance targets. The targets will be tested at the end of the performance period. The amount of the award which may vest will then normally be proportionately reduced by taking into account the period of time elapsed from the date of award to the date of cessation of employment. An option lapses if it has not been exercised within six months of the date on which the performance conditions are assessed.
^l If a participant ceases to be employed within the Capital & Regional Group for any other reason prior to the tenth anniversary of the date of grant of an award, the award will lapse unless the Remuneration Committee, in its absolute discretion, determines otherwise.

In this case, vesting will be subject to the achievement of the performance targets as described above.

Corporate events

^l In the event of a takeover, reconstruction, amalgamation or winding up of the Company, a proportion of the awards will vest immediately subject to the achievement of the performance targets. If such an event occurs within the three year performance period which causes the Awards to vest early and the performance target has been met at that time or as a result of the event, the level of the vesting will not reduce to take account of the length of the performance period remaining.
^l The Partial Offer and Share Subscription will not cause an immediate vesting of the outstanding awards under the 2008 LTIP.

Dividends

^l If dividends have been paid in respect of the Ordinary Shares during the vesting period, the Remuneration Committee may at its discretion determine that an amount of cash equivalent to such dividends will be payable to a participant following vesting based on the number of Ordinary Shares that vest, subject to the deduction of any applicable income tax and social security contributions. The Remuneration Committee may at its discretion determine that the net amount of any payment shall be delivered in Ordinary Shares.

Adjustment of Awards

^l In the event of any variation of the share capital of the Company, whether by way of a capitalisation issue (other than a capitalisation issue in substitution for or as an alternative to a cash dividend), a rights issue, bonus issue, rights offer or any sub-division, consolidation or reduction in the Company's share capital, the exercise price and/or the number of Ordinary Shares comprised in an award and/or the description of the Ordinary Shares may be adjusted in such manner as the Remuneration Committee and the grantor of the award (where the award is not granted by the Company) determine.

Clawback

^l Clawback provisions apply to the outstanding awards during the 12-month period following vesting (for 50 per cent. of the Ordinary Shares subject to an award) and 24-month period following vesting (for the balance of Ordinary Shares subject to the award). The level of vesting may be reduced (including to nil) if there is a material restatement of any of the accounts of the Company for each of the three years in the performance period or in the event of an act or omission of a participant which entitles his employer to summarily dismiss him.

14.3 The 2018 LTIP

Introduction

^l The 2018 LTIP is a discretionary share plan that will be administered by the Remuneration Committee. The 2018 LTIP includes a schedule (the "CSOP Plan") designed to be registered with HMRC as a Schedule 4 CSOP Scheme (as defined in Schedule 4 to ITEPA). There are currently no outstanding awards under the 2018 LTIP.
^l The 2018 LTIP allows the award of share options and contingent share awards (together referred to as "awards"). The Remuneration Committee has discretion to set the exercise price of options. It is intended that options granted pursuant to the 2018 LTIP will be granted as 'nil cost' options. Awards granted under the CSOP Plan will take the form of market value options. The commercial terms of an option granted pursuant to the CSOP Plan will broadly mirror those of an option granted under the main rules of the 2018 LTIP. Where the terms differ, the difference is explained below.

^l Awards may be satisfied from newly issued shares, treasury shares and/or shares purchased in the market. It is intended that the 2018 LTIP will be operated in conjunction with an employee benefit trust established by the Company.

Employee Eligibility

^l All employees (including executive directors) of the Company and its subsidiaries may be granted awards under the 2018 LTIP provided that, in the context of the CSOP Plan, they are not prohibited under the legislation governing Schedule 4 to ITEPA from being granted an option by virtue of having, or having had, a material interest in the Company. Following the introduction of the 2019 CIP (see paragraph 14.5 below), it was intended that no further awards under the 2018 LTIP will be made to the executive directors of the Capital & Regional Group.

Participant Limits

^l Each individual's participation will be limited so that ordinarily, in any year, the aggregate market value of Ordinary Shares subject to all awards under the 2018 LTIP or any other discretionary share plan established by the Company will not exceed 200 per cent. of the participant's basic salary from the Capital & Regional Group, expressed as an annual rate at the award date.
^l In addition, each individual's participation in the CSOP Plan will be limited so that the aggregate market value of shares subject to all options (calculated at the date of grant of each option) held by that individual and granted under the CSOP Plan or any other Schedule 4 CSOP Scheme operated by the Company or any other associated company will not exceed £30,000 (or such other amount as may be permitted by Schedule 4 to ITEPA from time to time).

Shareholder dilution

^l The 2018 LTIP contains limits on the numbers of shares made subject to awards under the 2018 LTIP as follows:
(a) On any date, no award may be granted under the 2018 LTIP if, following the grant of the award, the aggregate nominal value of ordinary shares issued or issuable pursuant to options or awards granted on that date or during the previous ten years under the 2018 LTIP or any other employee share plan (whether or not discretionary) operated by the Company for employees of the Group, would exceed 10 per cent. of the share capital of the Company in issue at that date.
(b) In addition, no award may be granted under the 2018 LTIP if, following the grant of the award, the aggregate nominal value of ordinary shares issued or issuable pursuant to options or awards granted on that date or during the previous ten years under the 2018 LTIP or any other discretionary employee share plan operated by the Company for employees of the Group, would exceed 5 per cent. of the share capital of the Company in issue at that date.
(c) Options and awards which have lapsed or been renounced are disregarded for the purposes of these limits. Shares which have been purchased in the market, including any so purchased and held by trustees for the purpose of satisfying awards are disregarded. The reissue of treasury shares will be treated as a new issue of shares if required by institutional shareholder guidelines.

Making of awards

^l Awards may only normally be made within the period of 42 days beginning on the day on which the 2018 LTIP is approved by the Company, or within the period of 42 days beginning on the day following the announcement of the Company's interim or annual results, or, results over any other period, or, otherwise at other times if the Remuneration Committee considers there are exceptional circumstances.

^l The grant of any award shall be subject to the provisions contained in the Listing Rules and the rules governing market abuse.
^l An award will be personal to the participant and not transferable.
^l No award can be granted more than 10 years after adoption of the 2018 LTIP.

Performance Targets

^l At the time of making an award the Remuneration Committee may set performance targets which must be satisfied before the award can vest. Such targets will normally be measured over a three-year period.
^l After an award has been granted, the Remuneration Committee may substitute, vary or waive a performance target or other condition if an event happens which causes the Remuneration Committee to consider it appropriate to do so provided that the Remuneration Committee considers it reasonable to do so in the circumstances and, in the case of a substitution or variation, the amended targets and conditions constitute a fairer measure of performance and are not materially less difficult to satisfy than the original target or conditions were intended to be when set. The Remuneration Committee may, in line with the scheme rules, adjust existing awards to reflect the Share Subscription.

Cessation of employment

^l An award will generally lapse if a participant ceases to be employed within the Capital & Regional Group. If, however, a participant's employment ceases:
(a) due to death;
(b) as a result of the company or part of the business by which a participant was employed ceasing to be a member or part of the Capital & Regional Group;
(c) due to injury, ill-health, disability (in each case evidenced to the satisfaction of the Remuneration Committee), redundancy (within the meaning of the Employment Rights Act 1996) or retirement;
(d) in any other circumstance that the Remuneration Committee determines that the award should not automatically lapse,

an award held by that participant will not lapse. Instead, the award may be retained and, other than in the case of death and cessation as a result of the transfer of the company or part of the business from the Capital & Regional Group (in which case, awards will vest immediately), awards will vest at the end of the usual vesting period. The proportion of the awards which will vest will be determined by the Remuneration Committee in its absolute discretion taking into account the period of time for which the award has been held by the participant up to the date on which he ceases to be employed and performance against any applicable performance target. Other than in the case of death and cessation as a result of the transfer of the company or part of the business from the Capital & Regional Group, performance will be assessed at the time it would have been assessed had the participant not ceased to be employed and shall not be assessed early. An option ordinarily lapses if it has not been exercised within 6 months (or 12 months in the case of death) of the date of cessation of employment as a result of death or a company or business transfer and, in all other circumstances, within 6 months of the date on which it is determined that the option is exercisable.

^l The Remuneration Committee has the discretion to allow a participant's award to vest if he is transferred to work overseas and as a result would suffer less favourable tax treatment in respect of his award or become subject to a restriction on his ability to hold or deal in the shares acquired or the sale proceeds received.

Takeover events

^l In the event of a takeover, scheme of arrangement or winding up of the Company, a proportion of the awards will vest immediately. The proportion of the awards which will vest will be determined by the Remuneration Committee in its absolute discretion taking into account the period of time for which the award has been held by the participant and performance achieved in the period from the date of the award to the date of the relevant corporate event as compared to the applicable performance period.

^l The Remuneration Committee may, where it considers it likely that a takeover or scheme of arrangement will take place declare that awards will vest during a limited period prior to the relevant event.
^l The Partial Offer and Share Subscription will not cause an immediate vesting of the outstanding awards under the 2018 LTIP.

Variation of share capital

^l Upon any variation of the share capital of the Company, whether by way of a capitalisation issue (other than a capitalisation issue in substitution for or as an alternative to a cash dividend), rights issue, sub-division, consolidation, or reduction in the Company's share capital, the number of shares comprised in an award and, in the case of an option, the exercise price, may be adjusted in such manner as the Remuneration Committee determines.

Dividends

^l If dividends have been paid in respect of the Company's shares during the vesting period, the Remuneration Committee may at its discretion determine that amounts equivalent to such dividends will be payable to an award holder (in shares or cash) following vesting of an award (other than an option granted under the CSOP Plan) based on the number of shares that vest, subject to the deduction of any applicable income tax and social security contributions.

14.4 The 2018 SAYE Scheme

Introduction

^l The 2018 SAYE Scheme is designed to comply with the requirements of Schedule 3 to ITEPA ("Schedule 3").
^l There are currently no outstanding awards under the 2018 SAYE Scheme.

Eligibility

l Participation in the 2018 SAYE Scheme will be offered to all employees (including fulltime executive directors) of the Company and participating subsidiaries who have been employed for a continuous period to be determined by the Board (which cannot be more than five years ending on the date of grant of the relevant option) and whose earnings from employment are general earnings (or would be if there were any) for a tax year in which the employee is ordinarily resident in the United Kingdom. In addition, certain other employees of any member of the Group nominated by the Board may be permitted to participate in the 2018 SAYE Scheme.

Shareholder Dilution

^l The 2018 SAYE Scheme contains a limit on the number of new shares to be issued as a result of the exercise of options granted under the 2018 SAYE Scheme. This limit applies both to options granted under the 2018 SAYE Scheme and options granted/awards made under all other employee share schemes operated by the Capital & Regional Group. Awards and options which have lapsed or been renounced are disregarded. Shares which have been purchased in the market for the purpose of satisfying options and awards are disregarded. The reissue of treasury shares will be treated as a new issue of shares if required by institutional and shareholder guidelines. The directors will ensure that appropriate policies regarding the timing and amount of SAYE options granted exist in order to spread the potential issue of new shares over the life of the SAYE Scheme.

^l On any date, no option may be granted under the 2018 SAYE Scheme if, following the grant of that option, the aggregate nominal value of ordinary shares issued or issuable pursuant to options granted on that date or during the previous ten years under the 2018 SAYE Scheme or any other share incentive scheme adopted by the Company for employees of the Capital & Regional Group would exceed 10 per cent. of the share capital of the Company in issue at that date.
^l In addition, the rules of the 2018 SAYE Scheme allow the directors to place a limit on the maximum number or value of shares to be applied for by all employees in one offering.

Issue of Invitations

^l Invitations to participate in the 2018 SAYE Scheme ("Invitations") may be issued to eligible employees at any time within the period of 42 days following the announcement of the Company's interim or final results, or, at other times if the directors consider there are exceptional circumstances. No Invitation may be made more than 10 years after the date on which the 2018 SAYE Scheme is adopted.
^l Each eligible employee who receives an Invitation may apply for an option within such time period as specified in the Invitation (such period not being less than 14 days).

Savings Contract and Grant of Options

^l An eligible employee who wishes to be granted an option must enter into a savings contract ("Savings contract") with an approved savings body selected by the Board. Under the Savings Contract, the eligible employee will save a regular sum each month for three or five years of not more than £500 per month (or such greater amount as may from time to time be permitted by Schedule 3). Employees who complete a Savings Contract may be entitled to a bonus from the building society or bank. The bonus is fixed at the inception of the Savings Contract.
^l In relation to a given round of option awards, the Board may determine whether the savings period will be three or five years or whether each employee will be given a choice.
^l An option to acquire ordinary shares will be granted to each eligible employee who enters into a Savings Contract. The number of ordinary shares subject to such an option will be that number of ordinary shares which have an aggregate option price not exceeding the projected proceeds of the Savings Contract concerned including the bonus (subject to any scaling back - see below).
^l No consideration is payable for the grant of an option.

Scaling Back

^l If there are insufficient ordinary shares available to fully satisfy all applications received for an option from eligible employees (either due to the scheme limit referred to below or such other limit imposed by the Board for the purposes of an option), the Board may scale down the applications by taking one or more prescribed steps approved by HMRC as set out in the rules of the 2018 SAYE Scheme to reduce the amount of savings made under each Savings Contract or otherwise reduce the proceeds derived from each Savings Contract so as to ensure that the options are granted over such number of ordinary shares as does not exceed the number of ordinary shares available to satisfy those options.

Exercise Price

^l The exercise price per Ordinary Share subject to an option will be selected by the Board but will not be less than the greater of 80 per cent. (or such lesser percentage as may from time to time be permitted by Schedule 3) of the market value of an Ordinary Share on the day on which Invitations to apply for options are issued and, in the case of an option to subscribe for ordinary shares, the nominal value of an Ordinary Share.
^l The exercise price (as well as the number of ordinary shares under option and their nominal value) may be adjusted by the Board in the event of any capitalisation issue or

rights issue (other than an issue of ordinary shares pursuant to the exercise of an option given to the shareholders of the Company to receive shares in lieu of a dividend) or any other variation in the share capital of the Company including (without limitation) any consolidation, subdivision or reduction of capital. Any such adjustment will need to be effected so that the total market value of ordinary shares which are subject to options, and the total price payable by each option holder upon exercise, remain substantially the same.

Exercise and Lapse of Options

^l Options are not transferable and (except in the circumstances described below) an option may normally only be exercised within a period of six months following the maturity of the relevant Savings Contract by a person who remains a Director or employee.
^l Where an option holder dies before the maturity of his Savings Contract, his personal representatives may exercise his option within a period of 12 months from the date of his death. Where an option holder dies within a period of six months following the expiry of his Savings Contract without having exercised his option, his personal representatives may exercise his option within a period of 12 months from the date of expiry of the Savings Contract.
^l An option holder may exercise his option within a period of six months of ceasing to be an employee of the Group where the cessation occurs more than three years from the date of grant of the option or as a result of:
(a) injury, disability, redundancy (within the meaning of the Employment Rights Act 1996) or retirement;
(b) a relevant transfer (within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006); or
(c) his employing company being disposed of outside the Group.
^l Options will lapse upon cessation of employment of the option holder in any other circumstances not referred to above.
^l An option holder may exercise his option within a limited period following and, in certain limited circumstances prior to, a takeover of the Company, the Court sanctioning a scheme under section 899 of Companies Act or a non-UK company reorganisation. An option holder may also exercise his option within a limited period following the passing of a resolution for the voluntary winding up of the Company.
^l In certain circumstances option holders may release their rights under options in consideration of the grant to them of equivalent rights over shares in an acquiring company which gains control of the Company.
^l The number of ordinary shares acquired on exercise will in any event be limited by reference to the proceeds accrued under the relevant Savings Contract up to the date of exercise.

Other Option Terms and Issues of ordinary shares

^l The 2018 SAYE Scheme provides the facility for the exercise of options to be satisfied by either the issue of ordinary shares, the transfer of ordinary shares held by trustees of an employee benefit trust established for the purpose of facilitating the holding of ordinary shares by Capital & Regional Group employees or by the transfer of ordinary shares held in treasury.
^l Options are not capable of transfer or assignment.
^l Until options are exercised, option holders have no voting or other rights in relation to the ordinary shares subject to those options.
^l Ordinary Shares allotted pursuant to the exercise of an option will rank pari passu in all respects with the ordinary shares already in issue but shall not rank for any dividends or

other distribution payable by reference to a record date preceding the date of allotment. Ordinary Shares transferred on the exercise of an option shall be transferred without the benefit of any rights attaching to the ordinary shares by reference to a record date preceding the date of that exercise. For so long as the Company's ordinary shares are traded on the Official List, the Company will use its reasonable endeavours to procure that the ordinary shares issued following exercise of any options are admitted to trading on the Official List as soon as practicable after allotment.

Overseas Employees

^l The Board may adopt additional sections to the 2018 SAYE Scheme to facilitate the granting of awards to individuals not resident in the UK provided that such supplemental rules will, so far as the Board in its discretion considers reasonably practicable, follow the rules of the 2018 SAYE Scheme.

14.5 The 2019 CIP

General

^l The 2019 CIP is a discretionary incentive plan that will be administered by the Remuneration Committee. Bonus Awards granted under the CIP ("Bonus Awards") will entitle the holder to a cash payment ("Cash Payment") and a notional right to receive an award to acquire shares in the capital of the Company ("Share Award").
^l There are currently no outstanding awards under the 2019 CIP.

Eligibility and Individual Limits

^l All employees (including executive directors) of the Company and the Capital & Regional Group may be granted Bonus Awards under the 2019 CIP. Each individual's participation will be limited so that, in any one financial year of the Company ("Financial Year"), the amount of all Bonus Awards granted to the individual under the 2019 CIP in that Financial Year will not exceed 300 per cent. of the individual's gross annual base salary.
^l Ordinarily, each individual's entitlement to a Cash Payment under a Bonus Award will be limited to one-third of the amount of the Bonus Award. Share Awards may only be granted to individuals who have been granted a Bonus Award in respect of the previous financial year and only to the extent to which such Bonus Award vests. For the avoidance of doubt and as further described below, Share Awards may be granted to former employees (and executive directors) of the Group.

Grant of Bonus Awards

^l The Remuneration Committee will have absolute discretion to select the persons to whom Bonus Awards may be granted and, subject to the limit above, in determining the amount of a Bonus Award. The Remuneration Committee will also have absolute discretion in determining the date on which a Bonus Award is to be granted, provided it falls before the ninth anniversary of the date on which the 2019 CIP is approved by the Company in general meeting.

Performance target and vesting of Bonus Awards

^l Vesting of Bonus Awards granted under the 2019 CIP will be made conditional upon the achievement of a performance target (or targets) set at the time of grant and measured over the Financial Year to which it relates and/or to other conditions as determined by the Remuneration Committee.

Cessation of employment – Bonus Awards

^l If, during a Financial Year to which a Bonus Award relates, an Award holder ceases to be employed by the Capital & Regional Group, his Bonus Award will lapse with immediate effect. Where, however, an Award holder's employment ceases:
(a) due to death; or
(b) due to injury, ill-health or disability (in each case evidenced to the satisfaction of the Remuneration Committee); or
(c) due to redundancy or upon the transfer out of the Capital & Regional Group of a company or business by which the Award holder is employed; or
(d) in any other circumstance that the Remuneration Committee determines (other than dishonesty, fraud, misconduct or any other circumstance that justifies the summary dismissal of the Award holder),

any Bonus Award held by that individual will not lapse and, other than in the case of death, may be retained to the extent that the Remuneration Committee in its discretion determines taking into account such factors as the Remuneration Committee in its discretion determines including, but not limited to, the proportion of the Financial Year which had expired on the date of cessation of employment. Such retained Bonus Award will vest on the normal vesting date and in the normal manner subject to the extent to which any performance targets or other conditions applying to the Bonus Award are met unless the Committee in its discretion determines that the circumstances are so exceptional as to justify the Bonus Award being settled, to the extent vested, in full by the payment of a Cash Payment.

^l Where the employment ends in the case of death, vesting of the Bonus Award will take place on the date of death to the extent that the Committee in its discretion determines taking into account such factors as the Committee in its discretion determines including, but not limited to, the proportion of the Financial Year which had expired on the date of death and any performance target or other condition applying to the Bonus Award (assessed on such modified basis at the Remuneration Committee considers in its discretion to be appropriate). To the extent to which a Bonus Award vests on the death of an individual, it will be settled in full by the payment of a Cash Payment.

Takeover events – Bonus Awards

^l In the event of a takeover, scheme of arrangement or winding-up of the Company during the Financial Year to which a Bonus Award relates, Bonus Awards will vest early to the extent that the Remuneration Committee in its discretion determines taking into account such factors as the Remuneration Committee in its discretion determines including, but not limited to, the proportion of the Financial Year which had expired before the takeover, scheme of arrangement or winding up of the Company and any performance target or other condition applying to the Bonus Award (assessed on such modified basis at the Remuneration Committee considers in its discretion to be appropriate). To the extent that a Bonus Award vests in the event of a takeover, scheme of arrangement or winding-up of the Company, it will be settled in the normal way unless the Remuneration Committee in its discretion determines that the circumstances are so exceptional as to justify the Bonus Award being settled, to the extent vested, in full by the payment of a Cash Payment.
^l The Partial Offer and Share Subscription will not cause an immediate vesting of any Bonus Award.

Settlement of Bonus Awards

^l As soon as practicable following the end of the Financial Year in respect of which a Bonus Award is granted, the Remuneration Committee will determine the extent to which the Bonus Award has vested and may, in its discretion, adjust the extent of such vesting if it reasonably considers that the extent of vesting is not a fair and accurate reflection of the Company's performance over the Financial Year to which the Bonus Award relates. Any such adjustment may increase or decrease the extent of vesting provided always that a Bonus Award may not vest at to more than 100 per cent. of the Bonus Award.
^l To the extent that a Bonus Award vests, the Company will pay the relevant holder of the Bonus Award a Cash Payment of up to one-third of the Bonus Award and will consider the grant of a Share Award in respect of the balance of the vested Bonus Award. All Cash Payments will be paid subject to any necessary withholdings in respect of income

tax and employee's national insurance contributions (or any equivalent taxes and social security arising outside the United Kingdom).

Grant of Share Awards

^l The Remuneration Committee will have absolute discretion in determining the date on which a Share Award is to be granted, provided it falls before the tenth anniversary of the date on which the 2019 CIP is approved by the Company in general meeting. Share Awards may be granted during the period of 42 days commencing on the date immediately after the end of a closed period of the Company (as determined in accordance with the rules governing market abuse), or at any other time when the Remuneration Committee in its discretion considers that exceptional circumstances justify the grant of Awards. If the grant of an Award during any such 42-day period would be prohibited by any statute, order, regulation or government directive, such Award may be granted during the 42-day period commencing at the time that such prohibition ceases to have effect. Share Awards may only be granted in respect of a Bonus Award that has vested in respect of the financial year ending immediately before the date of grant (including, for the avoidance of doubt, to a 'good leaver' who holds a vested Bonus Award).
^l The aggregate value of shares to be subject to a Share Award to be granted to an individual will equate to the amount of the vested Bonus Award held by that individual that was not (or will not be) satisfied by payment of a Cash Payment. The number of shares subject to the Share Award (rounded down to the nearest whole share) will be calculated by dividing this value by the average market value of a share over the final 20 dealing days of the Financial Year to which the associated Bonus Award relates.
^l Share Awards granted under the 2019 CIP may take the form of options with a nil or nominal exercise price ("Options") or contingent rights to acquire shares for no consideration ("Conditional Awards").
^l Share Awards may be satisfied from newly issued shares, treasury shares and/or shares purchased in the market. It is intended that the 2019 CIP will be operated in conjunction with the Capital & Regional EBT.
^l There are no Options or Conditional Awards currently outstanding under the 2019 CIP.

Plan limits

^l On a given date, the total number of shares issued or transferred from treasury (or capable of issue or transfer from treasury) in respect of awards granted in the preceding ten year period under the 2019 CIP or under any other employee share CIP operated by the Company, shall not exceed 10 per cent. of the ordinary share capital of the Company in issue at that time.
^l In addition, the total number of shares issued or transferred from treasury (or capable of issue or transfer from treasury) in respect of awards granted in the preceding ten year period under the CIP or under any other employee share 2019 CIP operated by the Company on a discretionary basis shall not exceed 5 per cent. of the ordinary share capital of the Company in issue at that time.
^l Options, awards or other rights that are satisfied, or which are intended to be satisfied, from shares purchased in the market shall not be taken into account for the purpose of applying these limits.

Performance target and vesting of Share Awards

^l Vesting of Share Awards granted under the 2019 CIP will be made conditional upon the achievement of a performance underpin (or underpins) set at the time of grant and measured over a specified period of time and/or to other conditions as determined by the Remuneration Committee. Subject to any applicable performance underpin or other condition, a Share Award will vest on the date or dates specified in the certificate relating to the Share Award provided that no vesting shall take place before the third anniversary of the start of the financial year in which the Share Award is granted ("Vesting Commencement Date").

^l Before vesting of Share Awards (or, in the case of Options, before exercise), Award holders will have no voting or other rights in relation to the shares subject to those Share Awards. Shares transferred on the vesting of a Conditional Award or on the exercise of an Option shall be transferred without the benefit of any rights attaching to the shares by reference to a record date preceding the date of vesting (or exercise).

Settlement of Share Awards

^l On vesting:
(a) an Option shall become exercisable; and
(b) shares shall be transferred or issued to the holder of a Conditional Award.
^l If, at any time, a dividend or other cash distribution is paid by the Company in respect of its shares, the number of shares subject to each Share Award then subsisting (and in respect of which the normal vesting date has not passed) shall be increased to reflect the value of the dividend. The number of shares to be added to a Share Award ("Dividend Equivalent Shares") shall equate to such number of shares as could have been purchased, at the share price prevailing on the date the dividend is paid, from an amount equal to the dividend paid on each share multiplied by the number of shares under the Share Award.
^l To the extent that a Share Award does not vest in relation to any shares, the Share Award shall also cease to be capable of vesting in respect of a proportionate number of Dividend Equivalent Shares.
^l Dividend Equivalent Shares that have been issued and any Dividend Equivalent Shares that have been notionally added to a Share Award shall be taken into account for the purposes of applying the plan limits set out above. Any potential right to receive additional Dividend Equivalent Shares in the future shall not, however, be taken into account.

Holding Periods – Share Awards

^l Shares acquired pursuant to Share Awards will be subject to one or more holding periods (which must not end earlier than the fifth anniversary of the Vesting Commencement Date) during which such shares or interests in such shares may not be assigned, transferred or otherwise disposed of other than to fund any tax liability of the Award holder arising on the vesting of a Share Award (in the case of a Conditional Award) or on the exercise of a Share Award (in the case of an Option) and/or to enable the Award holder to take up the balance of their nil-paid entitlements under a rights issue.

Cessation of employment – Share Awards

^l If, before the normal vesting date of a Share Award, an Award holder ceases to be employed by the Group, his Bonus Award will lapse with immediate effect. Where, however, an Award holder's employment ceases:
(a) due to death; or
(b) due to injury, ill-health or disability (in each case evidenced to the satisfaction of the Remuneration Committee); or
(c) due to redundancy or upon the transfer out of the Group of a company or business by which the Award holder is employed; or
(d) in any other circumstance that the Remuneration Committee determines (other than dishonesty, fraud, misconduct or any other circumstance that justifies the summary dismissal of the Award holder),

any Share Award held by that individual will not lapse and, other than in the case of death, may be retained to the extent that the Remuneration Committee in its discretion determines taking into account such factors as the Remuneration Committee in its discretion determines including, but not limited to, the number of days of the normal vesting period which had elapsed on the date of cessation of employment as compared to the total number of days in the normal vesting period. Such retained Bonus Award will vest on the normal vesting date subject to the extent to which any performance underpin or other condition applying to the Share Award have been met. If the Remuneration Committee in its discretion determines that it would be appropriate or necessary in the circumstances to assess vesting before the normal vesting date and to allow the Share Award to vest (and allow any applicable holding period to cease to apply) on the date on which the Award holder ceases to be an employee, the Remuneration Committee will assess the performance underpin or other condition applying to the Share Award on such modified basis as the Remuneration Committee in its discretion determines to be appropriate. To the extent that the Remuneration Committee determine that a Share Award may not be retained, it will lapse with immediate effect.

^l Where the employment ends in the case of death, vesting of the Share Award will take place (and any applicable holding period will cease to apply) on the date of death to the extent that the Remuneration Committee in its discretion determines taking into account such factors as the Remuneration Committee in its discretion determines including, but not limited to, the number of days in the normal vesting period which had elapsed on the date of death as compared to the total number of days in the normal vesting period and any performance underpin or other condition applying to the Share Award (assessed on such modified basis as the Remuneration Committee considers in its discretion to be appropriate). To the extent that an Option vests on the death of an individual, it may be exercised at any time until such date as the Remuneration Committee in its discretion determines. Any Option not exercised by such date will lapse with immediate effect.

Takeover events – Share Awards

^l In the event of a takeover, scheme of arrangement or winding-up of the Company before the normal vesting date of a Share Award, Share Awards will vest early (and any applicable holding period will cease to apply) to the extent that the Remuneration Committee in its discretion determines taking into account such factors as the Remuneration Committee in its discretion determines including, but not limited to, the number of days of the normal vesting period which had elapsed before the takeover, scheme of arrangement or winding up of the Company (as compared to the total number of days in the normal vesting period) and subject to the extent to which any performance underpin or other condition applying to the Share Award (assessed on such modified basis as the Remuneration Committee considers in its discretion to be appropriate) have been met. To the extent that a Share Award does not vest in the event of a takeover, scheme of arrangement or winding-up of the Company, it will lapse with immediate effect.

Adjustment of Share Awards

^l The number of shares under a Share Award and their nominal value may be adjusted by the Remuneration Committee in the event of any variation of the share capital of the Company.

Performance targets, performance underpins and vesting of Awards

^l After a Bonus Award or a Share Award (either being an "Award") has been granted, the Remuneration Committee may vary a performance target, performance underpin or other condition if an event happens which causes the Remuneration Committee to consider it appropriate to do so provided that the Remuneration Committee reasonably considers the amended targets, underpins and conditions to constitute a fairer measure of performance and a more effective incentive to the Award holder and the amended targets, underpins or conditions are no more difficult to satisfy than the original performance target or conditions were intended to be when set.

Malus and Clawback

^l The rules of the 2019 CIP include malus and 'clawback' provisions that will apply to all Awards if it is discovered (within two years of the vesting of an Award) that:
(a) there has been a material misstatement in the financial results of the Company or a miscalculation of any performance target or performance underpin;
(b) any information used to determine the Bonus Award and/or the number of shares subject to a Share Award was based on error or inaccurate or misleading information;
(c) the Award Holder has committed an act of gross misconduct;
(d) the Award holder has committed an act which in the Remuneration Committee's opinion has given or could give rise to serious reputational damage to the Group;
(e) the Award Holder has committed an act which in the Remuneration Committee's opinion deliberately misled the Board or the market as to the performance of the Group;
(f) the Award Holder has committed an act which in the Remuneration Committee's opinion has caused the Company or business in which the Award holder is employed to suffer a material failure of risk management; and/or
(g) the Company enters an involuntary administration or insolvency process or a CVA,

and such misstatement, miscalculation, conduct or event has resulted in an Award vesting to a greater extent than it otherwise should have done ("Excessive Award").

^l In these circumstances, the Remuneration Committee may make reductions (up to the value of the Excessive Award) to other Awards held by the Award holder in question which would otherwise vest under the 2019 CIP and/or require the Award holder in question to pay an amount equal to the value of the Excessive Award which has not otherwise been recovered (after taking into account any income tax and social security paid by the Award holder in relation to the Excessive Award).

Other Award terms

^l The Company may adopt additional sections of the 2019 CIP or further CIPs applicable in any jurisdiction under which Awards may be granted subject to additional and/or modified terms and conditions having regard to any securities, exchange control or tax laws which apply to the Award holder, the Company or any other member of the Capital & Regional Group.

14.6 Principal terms of the ESOT

^l The ESOT is a discretionary trust established by the Company to facilitate the operation of the Company's incentive schemes. Beneficiaries of the ESOT include employees and former employees of the Capital & Regional Group. The trustees of the ESOT may grant options and awards to acquire Ordinary Shares to eligible employees under the Company's incentive schemes (having consulted with the Board or the Remuneration Committee (as appropriate)). The trustees may purchase Ordinary Shares in the open market and new Ordinary Shares may be issued by the Company to the trustees. Awards and options granted under the Capital & Regional Employee Share Plans may be satisfied using Ordinary Shares transferred out of the ESOT to participants.
^l As at 6 November 2019 (being the latest practicable date prior to publication of this document) the ESOT holds 1,000,885 Ordinary Shares.

14.7 Dormant employee benefit trusts

^l The Company established the Capital & Regional plc Employee Share Ownership Trust 2004 and Lancaster Court Hove Employee Benefit Trusts, which are dormant.

15. PENSION BENEFITS

15.1 The Company has in place a workplace pension scheme, as required by auto enrolment legislation, whereby the Company and the employee contribute into a pension via the Company's payroll. From April 2019 the Company contributions are 4 per cent. of salary for each worker.
15.2 Executive Directors and 3 senior employees are eligible to receive a pension allowance equivalent to up to 15 per cent. of basic salary. All pension benefits are paid either to a defined contribution pension scheme or as a cash supplement.
15.3 The total pension contributions paid by the Company for the financial year ended 30 December 2018 was £231,783.

16. MATERIAL CONTRACTS

The following is a summary of each contract (not being a contract entered into in the ordinary course of business) that has been entered into by Capital & Regional or any member of the Group:

(a) within the two years immediately preceding the date of this document which are, or may be, material to the Group; or
(b) at any time and contains obligations or entitlements which are, or may be, material to the Group, as at the date of this document.

16.1 Sponsor Agreement

Capital & Regional entered into a sponsor's agreement dated 7 November 2019 with Numis relating to the Share Subscription pursuant to which Numis agreed to act as sole sponsor for Capital & Regional for the purposes of the Listing Rules (the "Sponsor's Agreement").

Under the terms of the Sponsor's Agreement, Capital & Regional has given certain customary warranties and undertakings to Numis including, amongst others, warranties in relation to the business, the accounting records and the legal compliance of the Company and in relation to information contained in this document. The Company agreed to provide the sponsor with certain customary indemnities pursuant to the terms of the Sponsor's Agreement. The indemnities provided by the Company indemnify Numis against certain liabilities including, in respect of the accuracy of the information contained in this document, losses arising from a breach of the Sponsor's Agreement and in respect of certain other losses suffered or incurred in connection with the Proposed Transaction. The liability of the Company under the Sponsor's Agreement is not limited in time or amount. In addition, the Sponsor's Agreement provides that the sponsor may, in its absolute discretion terminate the Sponsor's Agreement before Admission in certain specified circumstances which are customary for an agreement of this nature.

16.2 Numis engagement letter

On 6 November 2019, the Company entered into an engagement letter with Numis pursuant to which Numis was appointed as lead financial adviser in relation to the Proposed Transaction. On completion of the Proposed Transaction, the Company has agreed to pay Numis customary fees for the services provided by Numis in connection with the Proposed Transaction. The engagement letter contains certain other terms which are customary for this type of agreement, including an indemnity in favour of Numis for any losses suffered or incurred in connection with the Proposed Transaction.

16.3 JPMC engagement letter

On 10 September 2019, the Company entered into an engagement letter with JPMC pursuant to which JPMC was appointed as joint financial adviser in relation to the Proposed Transaction. On completion of the Proposed Transaction, the Company has agreed to pay JPMC customary fees for the services provided by JPMC in connection with the Proposed Transaction. The engagement letter contains certain other terms which are customary for this type of agreement, including an indemnity in favour of JPMC for any losses suffered or incurred in connection with the Proposed Transaction.

16.4 Subscription Agreement

On 17 October 2019, Capital & Regional and Growthpoint entered into a subscription agreement, as amended and restated on 29 October 2019 (the "Subscription Agreement") pursuant to which Growthpoint (or its Nominee(s)) has agreed to subscribe for 311,451,258 New Shares at the price of 25 pence per New Share, raising approximately £77.9 million (before expenses). The New Shares will represent approximately 30.0 per cent. of the Company's issued share capital following Admission. The Share Subscription is conditional upon: (i) the Partial Offer becoming, or being declared, wholly unconditional (save for UK Admission); and (ii) Shareholders approving at the General Meeting the Transaction Resolutions necessary to grant the Directors sufficient authority to issue the New Shares and approve the Partial Offer. Pursuant to the Subscription Agreement, the Company has agreed to various provisions, namely (i) to apply a minimum of £50 million of the proceeds from the Share Subscription to reduce and/or restructure the Group's existing debt arrangements and to apply the balance to assist in funding the Group's capital expenditure (as further described below); and (ii) for so long as Growthpoint and any Growthpoint Nominee(s) hold in aggregate an interest in at least 35 per cent. of the voting rights in the Company, to adopt a policy from Admission of distributing on a semi-annual basis (in the approximate proportions of 45/55 per cent. and in that order in respect of each financial year) not less than approximately 90 per cent. of the Company's EPRA earnings. In addition, the Company has agreed, with effect from Admission, to strive, as soon as is reasonably commercially practicable, to: (a) obtain an investment grade rating; (b) reduce its LTV in line with Growthpoint's existing treasury policy of between 35 per cent. and 45 per cent. LTV; and (c) implement Growthpoint's treasury policy (subject to such commercial realities as may be relevant to the Company and the United Kingdom) provided that such obligations will continue only for so long as Growthpoint and any Growthpoint Nominee(s) hold in aggregate an interest in at least 35 per cent. of the voting rights in Capital & Regional.

16.5 Relationship Agreement

On 17 October 2019, Growthpoint and Capital & Regional entered into the Relationship Agreement, which is conditional upon Admission, in order to regulate their relationship on an ongoing basis following completion of the Proposed Transaction. The principal purpose of the Relationship Agreement is to ensure that, for so long as Growthpoint and any Growthpoint Nominees hold at least 20 per cent. of the voting rights in the Company, the Company can carry on as an independent business as its main activity. The Relationship Agreement contains, among others, undertakings from Growthpoint, on behalf of itself and its associates, that: (i) transactions and arrangements with it (and/or any of its associates) will be conducted at arm's length and on normal commercial terms; (ii) neither it nor any of its associates will take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules; and (iii) neither it nor any of its associates will propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules.

Growthpoint will be able to appoint two directors to the Board for so long as it (together with that of any of its associates) holds at least 20 per cent. or more of the voting rights in the Company and will be able to appoint one director to the Board for so long as it (together with that of any of its associates) holds at least 15 per cent. but less than 20 per cent. of the voting rights in the Company.

For as long as Growthpoint (together with its associates) is entitled to exercise at least 15 per cent. of the voting rights in the Company, Growthpoint shall have a right in priority: (i) to underwrite any rights issue or other pre-emptive offer to Shareholders; (ii) to participate pro rata in any vendor placement by the Company in connection with an acquisition by the Company; (iii) to participate pro rata in any placing of shares by the Company provided that, in the case of (ii) or (iii), where shares would otherwise remain unallocated in any such placing, Growthpoint shall have the right ("Placing Right") to be the placee for the balance of such placing to the extent that its percentage of the total voting rights of the Company would otherwise fall below 55 per cent. immediately following such placing, but in such circumstances it will consider requests from other Shareholders who wish to take up more than their pro rata entitlement. Any offer made by Growthpoint to underwrite any rights issue or other pre-emptive offer or to exercise any Placing Right must be on terms at least comparable with those available to the Company from a third party.

For a period of 9 months from Admission and subject to certain limited exceptions, Growthpoint (together with its associates) shall not dispose of any Ordinary Shares without the prior written consent of a majority of the Directors (other than the director(s) appointed by Growthpoint), and for a further period of 9 months and subject to Numis and JPMC being able to find a purchaser on best execution terms, Growthpoint (together with is associates) will effect any sale through either Numis or JPMC with a view to maintaining an orderly market in Ordinary Shares.

The Relationship Agreement will continue for so long as: (a) Growthpoint and its associates hold an interest, whether held directly or indirectly, in 15 per cent. or more of the voting rights in Capital & Regional; and (b) the Ordinary Shares are admitted to trading on the London Stock Exchange's main market for listed securities.

16.6 LN Group Relationship Agreements

On 28 January 2016, the Company and Homestead, an associate of Louis Norval, entered into a relationship agreement, to regulate the relationship between the Company, Homestead and the Parkdev Parties. The Parkdev Relationship Agreement granted Homestead, a right to nominate up to two non-executive directors to the Board. The Parkdev Relationship Agreement also contained an obligation on the Company in the event of an issue of Ordinary Shares or other offer, or other corporate action affecting Shareholders generally, to enable each of the Parkdev Parties to participate pro rata to its shareholding in the Company. This Parkdev Relationship Agreement contained an undertaking from the Company not to solicit or recommend any partial tender offer, or to undertake any buyback of Ordinary Shares without the consent of Parkdev Parties, except in certain circumstances. On 17 October 2019, Homestead, on behalf of the Parkdev Parties agreed to waive their pre-emption rights in respect of the Proposed Transaction.

As part of the Proposed Transaction, Capital & Regional entered in to a new relationship agreement with Homestead dated 17 October 2019 and which is conditional on and shall take effect upon completion of the Proposed Transaction. The Homestead Relationship Agreement will provide that, for so long as Homestead, PDI Investment Holdings Limited and Mstead Limited and any subsidiary of Homestead (together the "LN Group") are associates of Louis Norval (or, in the event of the death of Louis Norval, any of his lineal descendants) and have an aggregate interest of at least 6 per cent. of the issued share capital of Capital & Regional from time to time:

^l Homestead will retain its right to appoint a director to the board of Capital & Regional; and
^l each member of the Shareholder Group shall be offered the opportunity to participate pro rata to its shareholding in connection with any future capital fundraisings.

If the Proposed Transaction completes, the Homestead Relationship Agreement will supersede and replace the Parkdev Relationship Agreement. Growthpoint has given its consent to the Homestead Relationship Agreement.

16.7 Confidentiality Agreement

On 7 August 2019, the Company entered into a confidentiality agreement with Growthpoint (the "Confidentiality Agreement") pursuant to which Growthpoint has undertaken to keep confidential information relating to the Group and not to disclose it to third parties (other than those to which disclosure is permitted in accordance with the terms of the Confidentiality Agreement) unless required by law or regulation. These confidentiality obligations will remain in force until two years after the date of the Confidentiality Agreement.

The Confidentiality Agreement also contains undertakings from Growthpoint that, for a period of 12 months from the date of the Confidentiality Agreement, Growthpoint shall not offer employment to, solicit or endeavour to entice away any of the Directors or certain categories of employees subject to certain exceptions. This undertaking will terminate on Admission.

16.8 Registrar Engagement Letter

On 1 November 2019, the Company entered into an engagement letter with the Registrar, (the "Registrar Engagement Letter"), pursuant to which the Registrar has been appointed to act and provide registrar services in respect of the General Meeting and receiving agent services in respect of the issue of New Shares to Growthpoint in connection with the Share Subscription and management of the Consolidation. Under the Registrar Engagement Letter, the Company agrees to indemnify and hold the Registrar harmless against all loss, liability or expense, including any costs and expenses of defending any claim or liability incurred in connection with the Registrar's functions under the Registrar Engagement Letter, other than with respect to any loss, liability or expense arising as a result of the Registrar's wilful default, negligence, fraud, or material breach of the Registrar Engagement Letter. The Registrar agrees to indemnify and hold harmless the Company against any loss, damages, costs or expenses, including the costs and expenses of investigating, preparing for or defending any actual, or any threatened or pending, claims or liability incurred arising out of a material breach by the Registrar of its obligations in connection with the Registrar Engagement Letter or its wilful default, fraud or negligence.

16.9 RBS Revolving Facility Agreement 2015 as amended on 3 August 2017 and 13 March 2019

On 9 November 2015, Capital & Regional entered into a revolving credit facility agreement as parent and guarantor with Capital & Regional Holdings, as company (which is the borrower) and guarantor, and The Royal Bank of Scotland plc ("RBS"), as original lender, arranger and agent (the "Revolving Facility Agreement").

Pursuant to the Revolving Facility Agreement, RBS made available to Capital & Regional Holdings a revolving credit facility up to £30 million to be used for capital expenditure requirements, general corporate purposes and bridging investments of real estate being undertaken by the Group and any joint venture in which any member of the Group has interest.

Capital & Regional guarantees punctual performance by Capital & Regional Holdings of all its obligations under the agreement and undertakes with RBS, whenever Capital & Regional Holdings does not pay any amount due under or in connection with the agreement, to pay that amount immediately on demand. The guarantee is a continuing guarantee extending to the ultimate balance of sums payable regardless of any intermediate payment or discharge in whole or in part. Capital & Regional has also provided an indemnity in favour of RBS against any cost, loss or liability incurred as a result of Capital & Regional Holdings not paying any amount due to unenforceability, invalidity or illegality which would, but for such unenforceability, invalidity or illegality, have been payable.

The Revolving Facility Agreement was originally for a term of four years but was extended on 3 August 2017 to 22 January 2022. The terms of the Revolving Facility Agreement remain in full force and effect and the guarantees and indemnities given by Capital & Regional under the original agreement and Capital & Regional Holdings remain continuing.

Pursuant to an order of the Court of Session under Part VII of FSMA approving a ring-fencing transfer scheme among RBS, NatWest Markets plc ("NatWest Markets") and National Westminster Bank plc ("NatWest") (the "Scheme"), the rights and obligations of the arranger, agent and original lender under the Revolving Facility Agreement were transferred from RBS to NatWest on 30 April 2018.

On 13 March 2019, the Revolving Facility Agreement was further amended (the "Amended RBS Facility"), which included the amended of the total commitments available under the Revolving Facility Agreement from £30 million to £15 million.

Interest is charged on each loan made for each interest period at the percentage rate per annum which is the aggregate of 3 per cent. per annum and LIBOR. Interest shall accrue on any overdue amount from the due date up to the date of actual payment at a rate which is 2 per cent. per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a loan in the currency of the overdue amount for successive interest periods.

A number of events would lead to a prepayment, including but not limited to illegality and change of control (where Capital & Regional ceases to have control of the voting rights, board or operating and financial policies of Capital & Regional Holdings).

The Revolving Facility Agreement contains various representations, warranties, covenants and indemnities. The financial covenants given by Capital & Regional Holdings are:

^l gearing, meaning the ratio of total net debt to net assets, at the end of any twelve month period ending on or about the last day of the financial year and each period of 12 months ending on or about the last day of each financial half year (the "Relevant Period") must not exceed a ratio of 1.5:1;
^l income as a percentage of finance costs in respect of any Relevant Period is at least 200 per cent; and
^l net assets at the end of any Relevant Period shall not be less than £350 million.

The events of default are customary for a facility of this nature, including, but not limited to, non-payment, which allows for a grace period of 3 Business Days, breach of a financial covenant, breach of any other provision which is either not capable of remedy or not remedied within 15 Business Days of either NatWest giving notice or Capital & Regional Holdings becoming aware of the failure, misrepresentation, cross default, insolvency, unlawfulness and material adverse change. On and at any time after the occurrence of an event of default which is continuing NatWest may by notice to Capital & Regional Holdings cancel the facility and require immediate repayment with accrued interest and all other amounts accrued or outstanding.

16.10 Hemel Facility Agreement

On 12 January 2016 Capital & Regional entered into a facility agreement as guarantor with MHL, Capital & Regional Europe, Capital & Regional Holdings and RBS as lender ("Hemel Facility Agreement"). The Hemel Facility Agreement was amended and restated on 19 February 2016 and 13 August 2018, and again on 13 March 2019 pursuant to the Scheme, introducing NatWest and NatWest Markets as parties, as arranger, lender, hedge counterparty, agent and security agent, and RBS as account bank (together, the "Lenders").

Pursuant to the Hemel Facility Agreement, the Lenders made available to MHL a sterling term loan facility. The amounts available under the facility named 'A' and the facility named 'B' are £26,887,599 and £7,000,000 respectively, for financing the cost of acquisition of the Marlowes Shopping Centre. In certain circumstances, a further £3,875,000 may be made available in relation to the Fareham House property project.

Capital & Regional has entered into a separate guarantee agreement in its capacity as guarantor under the Hemel Facility Agreement. Under its terms, Capital & Regional guarantees punctual performance by MHL of all its obligations under the agreement and undertakes, whenever an amount is not recoverable on the basis of guarantee, to pay the same amount as would have otherwise been paid on the same day, within 60 days of the injured finance party's demand.

MHL must repay the loans in full on the termination date, being the seventh anniversary of the first utilisation.

Interest is charged on each loan for each interest period at the aggregate of the applicable margin, being two per cent. for facility A and three per cent. for facility B, and LIBOR. Default interest accrues on any overdue amount at a rate which is two per cent. per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a loan in the currency of the overdue amount for successive interest periods.

MHL has agreed to maintain hedging agreements being at least 75 per cent. of the aggregate amount of the loans outstanding from time to time, which may only be terminated in specific circumstances without the consent of NatWest. Such a hedging agreement was agreed under the terms of an ISDA Master Agreement 2002 entered into between RBS and MHL on 3 February 2016.

A number of events would lead to prepayment, including, but not limited to, illegality and change of control (if Capital & Regional ceases to be the ultimate beneficial owner (directly or indirectly through a chain of wholly-owned subsidiaries) of the entire issued share capital of Capital & Regional Europe).

The Hemel Facility Agreement contains various representations, warranties and covenants given by MHL. The financial covenants, the breaches of which can (subject to exceptions) be cured within up to 10 business days of the relevant test date, are:

^l interest cover, meaning passing rental income as a percentage of finance costs, must be at least 200 per cent (although it could potentially be as low as 150 per cent. in certain limited circumstances);
^l projected interest cover, calculated on the basis of the projected net rental income, must be at least 200 per cent;
^l LTV proportion must not exceed 60 per cent (but with RBS having agreed a waiver of breaches up until the commencement of the cinema development, which needs to commence by 30 November 2019, and thereafter, up until the longstop date for the cinema being opened, the valuation assumes practical completion has occurred and the project is fully built);
^l debt to net rent cover ratio must not be greater than 10:1 in the period from and including the second anniversary of the date of the agreement and 9:1 in the period from and including the third anniversary of the date of the agreement; and
^l loan to cost proportion must not exceed 45 per cent.

The events of default include, but are not limited to, non-payment, which allows for a grace period of 3 Business Days, breach of a financial covenant, breach of any other provision which is either not capable of remedy or not remedied within 15 Business Days of either NatWest giving notice or MHL becoming aware of the failure, misrepresentation, cross default, insolvency, cessation of business (except as a result of a disposal allowed under the agreement), unlawfulness, repudiation and rescission of agreements, compulsory purchase of any property, major damage to any part of any property, MHL is not or ceases to be legally and beneficially wholly-owned by Capital & Regional Europe, material adverse change, forfeiture in respect of a headlease, abandonment of a significant part of the cinema development for a continuous period of 28 days or more and if practical completion does not occur on or before the practical completion longstop date. On and at any time after the occurrence of an event of default which is continuing NatWest may by notice to MHL cancel the facility and require immediate repayment with accrued interest and all other amounts accrued or outstanding.

16.11 Ilford Facility Agreement

The Capital & Regional Partnership, as borrower, Capital & Regional Nominee 1, Capital & Regional Nominee 2 and Capital & Regional GP (the "Guarantors"), Dekabank Deutsche Girozentrale ("Deka"), as arranger, agent and security agent, entered into a facility agreement for a term loan of up to £39 million to finance the acquisition of the Exchange Ilford, which shall terminate on the seventh anniversary of the utilisation (the "Ilford Facility Agreement").

The Guarantors guarantee punctual performance and undertake to pay on demand in the event of any non-payment by the obligors. Guarantors have also provided an indemnity in favour of Deka against any cost, loss or liability incurred as a result of an obligor not paying any amount due to unenforceability, invalidity or illegality which would, but for such unenforceability, invalidity or illegality, have been payable.

Interest is charged on each loan for each interest period at the percentage rate per annum which is the aggregate of 1.75 per cent. per annum and LIBOR. If amounts are not paid when they are due, interest shall accrue on the overdue amount from the due date up to the date of actual payment at a rate which is 1 per cent. per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a loan in the currency of the overdue amount for successive interest periods.

The Capital & Regional Partnership has agreed to maintain hedging agreements being at least 80 per cent. of the aggregate amount of the loans outstanding from time to time, which may only be terminated in specific circumstances without the consent of Deka, as agent. Such a hedging agreement was agreed under the terms of an ISDA Master Agreement 2002 entered into between Deka and the Capital & Regional Partnership on 8 March 2017, with a notional amount of £39 million and a termination date of 8 March 2024.

A number of events would lead to prepayment, including but not limited to, illegality and change of control (such change of control including a number of potential events, all of which are tested below Capital & Regional in the Group's structure).

The Ilford Facility Agreement contains various representations, warranties and covenants given by the Capital & Regional Partnership. The financial covenants, the breaches of which can generally be cured within up to 20 business days of the relevant breach, are:

^l interest cover, meaning passing rental income as a percentage of finance costs, must be at least 225 per cent; and
^l LTV proportion must not exceed 70 per cent. (and a cash trap set at 60 per cent.).

The events of default include, but are not limited to, non-payment, which allows for a grace period of 3 Business Days, breach of a financial covenant, breach of any other provision which is either not capable of remedy or not remedied within 10 Business Days of either Deka giving notice or the Capital & Regional Partnership becoming aware of the failure, misrepresentation, cross default, insolvency, cessation of business (except as a result of a disposal allowed under the agreement), unlawfulness, repudiation and rescission of agreements, compulsory purchase of any property, major damage to any part of any property, material adverse change, forfeiture or irritancy in respect of a headlease and there is a breach of any of the Capital & Regional Partnership's partnership documents. On and at any time after the occurrence of an event of default which is continuing Deka may by notice to the Capital & Regional Partnership cancel the facility and require immediate repayment with accrued interest and all other amounts accrued or outstanding.

16.12 Luton Facility Agreement

The Capital & Regional Mall LP, as borrower, the Capital & Regional Mall GP, Capital & Regional Mall 3 and Capital & Regional Mall 4 as nominees, Wells Fargo Bank International Unlimited Company, as mandated lead arranger and original lender, Wells Fargo Securities International Limited, as original hedge counter party, and Wells Fargo Bank N. A. London Branch as agent and security agent, (together "Wells Fargo") entered into a facility agreement on 28 December 2016 (the "Luton Facility Agreement") to finance the cost of acquisition of the Mall Luton, and other properties in Luton.

On 10 September 2019, Wells Fargo and Capital & Regional Mall LP entered into an amendment letter in respect of the Luton Facility Agreement (the "Amended Luton Facility Agreement"), The Amended Luton Facility Agreement provides for, among other things: (1) early repayment of certain amounts by way of voluntary prepayments (including with amounts derived from rental payments related to Mall Luton and/or, partially, any capital raised by Capital & Regional before 31 December 2019 in excess of £2,500,000); and (2) amendments to and relaxation of certain financial covenants as described further below.

Each obligor guarantees punctual performance both jointly and severally and has provided an indemnity in favour of Wells Fargo against any cost, loss or liability incurred as a result of an obligor not paying any amount due to unenforceability, invalidity or illegality which would, but for such unenforceability, invalidity or illegality, have been payable.

Interest is charged on each loan for each interest period at the percentage rate per annum which is the aggregate of 2 per cent. per annum and LIBOR. If amounts are not paid when they are due, interest shall accrue on the overdue amount from the due date up to the date of actual payment at a rate which is 1 per cent. per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a loan in the currency of the overdue amount for successive interest periods.

The Capital & Regional Mall LP has agreed to maintain hedging agreements with a maximum amount equal to 100 per cent. of the aggregate amount of the loan then outstanding, and a minimum amount equal to 75 per cent. of the aggregate amount of the loan then outstanding. Such a hedging agreement was agreed under the terms of an ISDA Master Agreement 2002 entered into between Wells Fargo Securities International Limited and the Capital & Regional Mall LP on 23 December 2016.

A number of events would lead to prepayment, including but not limited to, illegality and change of control (where Capital & Regional, as the sponsor, does not or ceases to control any obligor under the agreement).

The Amended Luton Facility Agreement contains various representations, warranties and covenants given by the Capital & Regional Mall LP. The financial covenants, which have cure rights which may be exercised within twenty business days of delivery of the compliance certificate showing a breach, are:

^lhistorical interest cover, meaning passing rental income as a percentage of finance costs, must be not less than 250 per cent;
^lprojected interest cover, calculated on the basis of the projected net rental income, must be not less than 200 per cent;
^lLTV must not exceed 80 per cent. in the period until (and including) 30 September 2020 and thereafter 70 per cent. up until (and including) the date falling on the fifth anniversary of the Luton Facility Agreement and thereafter 65 per cent.;
^lthe Luton Facility Agreement contained a cash trap event if the LTV was greater than 65 per cent. However, the Amended Luton Facility Agreement deems such cash trap event not to have occurred during the periods up to (and including) 30 September 2020;
^ldebt yield, meaning the passing net rental income less the aggregate amount of fees, costs and expenses paid by the obligors to the managing agent during that period, expressed as a percentage of the net debt, must be not less than 8 per cent.

The events of default include, but are not limited to, non-payment, which allows for a grace period of 2 Business Days, breach of a financial covenant, unless cured as permitted under the agreement, breach of any other provision which is either not capable of remedy or not remedied within 15 Business Days of either Wells Fargo giving notice or the Capital & Regional Mall LP becoming aware of the failure, misrepresentation, cross default, insolvency, cessation of business (except as a result of a disposal allowed under the agreement), unlawfulness, repudiation and rescission of agreements, compulsory purchase of any property, major damage to any part of any property, material adverse change and forfeiture in respect of a headlease. On and at any time after the occurrence of an event of default which is continuing Wells Fargo may by notice to the Capital & Regional Mall LP cancel the facility and require immediate repayment with accrued interest and all other amounts accrued or outstanding.

16.13 Luton Deed of Guarantee and Indemnity

Capital & Regional Europe, as guarantor, and Wells Fargo, as beneficiary, entered into a deed of guarantee and indemnity on 4 January 2017 (the "Luton Deed of Guarantee and Indemnity") in respect of a hedging agreement dated on or around the same date incorporating the ISDA Master Agreement 2002 terms.

Capital & Regional Europe guarantees to Wells Fargo punctual performance by the Capital & Regional Mall LP of all its obligations under the hedging agreement and undertakes that whenever the Capital & Regional Mall LP does not pay any amount when due under or in connection with the hedging agreement it shall promptly on demand, but in any event no later than within 2 business days of such demand, pay that amount. Capital & Regional Europe indemnifies Wells Fargo promptly on demand, but in any event no later than within 2 business days of such demand, against any cost, loss or liability incurred as a result of the Capital & Regional Mall LP not paying any amount which would otherwise be payable if any obligation is or becomes unenforceable, invalid or illegal. Capital & Regional Europe shall be released from all obligations under the Luton Deed of Guarantee and Indemnity on and from the utilisation date.

16.14 Mall Asset Facility Agreement

On 4 January 2017, the Capital & Regional Mall 4 Asset LP, as borrower, the Capital & Regional Mall General Partner (the "General Partner"), subsidiaries of the Capital & Regional Mall 4 Asset LP ("Nominees"), Teachers Insurance and Annuity Association of America ("TIAA") and RBS, as lenders and arrangers, RBS as hedging counterparty and CBRE Loan Services Limited ("CBRE"), as agent and security agent, entered into a sterling term loan facility (the "Mall Asset Facility Agreement"). The facility named 'A' makes available an aggregate amount equal to £165 million and, subject to any agreed increase, the facility named 'B' makes available a further amount equal to £100 million. The advances under facility A are purposed for refinancing existing financial indebtedness and repaying amounts owing by the Capital & Regional Mall 4 Asset LP to affiliates of Capital & Regional, as sponsor, in connection with costs incurred in respect of the Mall Blackburn, Mall Maidstone, Mall Walthamstow and Mall Wood Green. The advances under facility B are purposed for refinancing existing financial indebtedness, financing capital expenditure, tenant lease incentives and related professionals' costs and repaying amounts owing by the Capital & Regional Mall 4 Asset LP to affiliates of Capital & Regional, as sponsor, in connection with costs incurred in respect of the same properties.

The General Partner and the Nominees (together the "Guarantors") guarantee punctual performance and undertake to pay on demand in the event of any non-payment by the obligors. The Guarantors also provided an indemnity in favour of TIAA, RBS and CBRE against any cost, loss or liability incurred as a result of an obligor not paying any amount due to unenforceability, invalidity or illegality which would, but for such unenforceability, invalidity or illegality, have been payable.

Interest is charged on each facility A loan for each interest period at the percentage rate per annum which is the aggregate of 2.175 per cent. per annum and the rate agreed between TIAA and the Capital & Regional Mall 4 Asset LP by reference to the UK swap rate based on a floating rate to fixed rate swap for 100 per cent. of the relevant facility A loan. Interest is charged on each facility B loan for each interest period at the percentage rate per annum which is the aggregate of 2 per cent., if the LTV ratio is greater than 60 per cent, or 2.75 per cent. if the LTV is greater than 60 per cent., and LIBOR. If amounts are not paid when they are due, interest shall accrue on the overdue amount from the due date up to the date of actual payment at a rate which is two per cent. per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a loan in the currency of the overdue amount for successive interest periods.

The Capital & Regional Mall 4 Asset LP has agreed to maintain hedging agreements with an aggregate notional amount of at least 80 per cent, but not more than 100 per cent, of the total commitments. Such a hedging agreement was agreed under the terms of an ISDA Master Agreement 2002 entered into between RBS and the Capital & Regional Mall 4 Asset LP on 4 January 2017. An amendment was issued on 5 January 2017 confirming the notional amount of £100 million and a termination date of 22 January 2024.

A number of events would lead to prepayment, including but not limited to, illegality and change of control (where Capital & Regional, as the sponsor, ceases to be the owner of at least 51 per cent. of the limited partnership interests in the Capital & Regional Mall 4 Asset LP and at least 51 per cent. of the shares in the General Partner, or Capital & Regional ceases to control, as defined in sections 450 and 451 of the CTA 2010, each of the Capital & Regional Mall 4 Asset LP and the General Partner).

The Mall Asset Facility Agreement contains various representations, warranties and covenants given by the Capital & Regional Mall 4 Asset LP. The financial covenants, which have cure rights which may be exercised within twenty business days of delivery of the compliance certificate showing a breach, are:

^lhistorical interest cover, meaning net rental income as a percentage of finance costs, must be not less than 175 per cent;
^lprojected interest cover, calculated on the basis of the projected net rental income, must be not less than 150 per cent; and
^lLTV proportion must not exceed 70 per cent. (and a cash trap set at 65 per cent.).

The events of default include, but are not limited to, non-payment, which allows for a grace period of 3 Business Days, breach of a financial covenant, unless cured as permitted under the agreement, breach of any other provision which is either not capable of remedy or not remedied within 15 Business Days of either CBRE giving notice or the Capital & Regional Mall 4 Asset LP becoming aware of the failure, misrepresentation, cross default, insolvency, cessation of business (except as a result of a disposal allowed under the agreement), unlawfulness, repudiation and rescission of agreements, compulsory purchase of any property, major damage to any part of any property, material adverse change, forfeiture in respect of a headlease and the General Partner ceasing to be the sole general partner in the Capital & Regional Mall 4 Asset LP and a Nominee ceasing to be a wholly-owned subsidiary of another obligor. On and at any time after the occurrence of an event of default which is continuing CBRE may by notice to the Capital & Regional Mall 4 Asset LP cancel the facility and require immediate repayment with accrued interest and all other amounts accrued or outstanding.

17. LEGAL AND ARBITRATION PROCEEDINGS

There have not been any governmental, legal or arbitration proceedings (including any such proceedings pending or threatened of which the Company is aware) in the 12 months prior to the publication of this document, which may have or have had in the recent past, a significant effect on the financial position or profitability of the Group.

18. ENVIRONMENTAL ISSUES

The Company is of the opinion that there are no environmental issues which may affect the Group's utilisation of its tangible fixed assets.

19. DIVIDENDS

The Company has to date operated, and will continue to operate, a dividend policy through which dividends are normally covered by operational cash flow generated by the Group.

The following table sets out the dividend per Ordinary Share paid or payable in respect of each of the financial periods ended 30 December 2018, 2017 and 2016:

	Dividend per
	Ordinary Share in
Period ended	pence reported
12 months to 30 December 2018	2.42 pence
12 months to 30 December 2017	3.64 pence
12 months to 30 December 2016	3.39 pence

There are no arrangements in existence under which future dividends are to be waived or agreed to be waived.

20. STATEMENT OF CAPITALISATION AND INDEBTEDNESS

Set out below is a statement of capitalisation of the Group at 30 June 2019 and indebtedness of the Group at 30 September 2019.

	As at 30 June 2019 £m
Capitalisation Share capital – allotted, called up and fully paid Share premium Other reserves	7.3 166.5 64.7 —–—––––——
Capital and reserves	238.5 —–––––———
	As at 30 September 2019 £m
Indebtedness Current debt Secured Unsecured	(3.0) –
Total current debt	—–—––––—— (3.0)
Non-current debt (excluding current portion of long-term debt) Secured Unsecured	—–—––––—— (430.9) –
Total non-current debt	—–—––––—— (430.9)
Total indebtedness	—–—––––—— (433.9) —–—––––——
Net financial indebtedness Cash Cash and cash equivalents	20.5
Liquidity	—–—––––—— 20.5
Current financial liabilities Current bank debt Current portion of non-current debt	—–—––––—— (3.0) –
Current financial debt	—–—––––—— – —–—––––——
Net current financial indebtedness Non-current bank loans Bonds issued	– (430.9) –
Non current financial indebtedness	—–—––––—— – —–—––––——
Net financial indebtedness	(413.4) —–––––———

Notes:

There has been no change in the capitalisation of the Company since 30 June 2019.

21. WORKING CAPITAL

In the opinion of Capital & Regional, the working capital available to the Group is sufficient for its present requirements, that is, for at least the 12 months following the date of this document.

22. NO SIGNIFICANT CHANGE

22.1 Capital and Regional

There has been no significant change in the financial performance or the financial position of the Group since 30 June 2019, the date to which the latest unaudited interim financial statements of the Group were drawn up.

For the purposes of Rule 29.5 of the Takeover Code the Directors confirm that there has been no material change in the valuation of the properties which are the subject of the Property Valuation Reports set out in Part 5 of this document since 30 September 2019, being the effective date each such Property Valuation Report was prepared.

23. RELATED PARTY TRANSACTIONS

Save as disclosed in this document and the financial information incorporated by reference into this document (see note 30 to the financial statements for the year ended 30 December 2018) there are no related party transactions between Capital & Regional and any related party that were entered into during the aforementioned periods.

24. STATUTORY AUDITORS AND CONSENTS

24.1 Deloitte LLP, whose address is 1 New Street Square, London EC4A 3HQ, and which is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales has audited and reported on the annual accounts of Capital & Regional for the financial years ended 30 December 2018, 30 December 2017 and 30 December 2016. Statutory accounts of Capital & Regional for the years ended 30 December 2018, 30 December 2017 and 30 December 2016 have been delivered to the Registrar of Companies in England and Wales. The auditors of Capital & Regional have made reports under the relevant provisions in English company law in respect of these statutory accounts and the report was an unqualified report.
24.2 Grant Thornton UK LLP has given and not withdrawn its written consent to the inclusion of its report on the unaudited pro forma statement of net assets in Section B of Part 6 of this document and has authorised the contents of its report for the purposes of Rule 5.3.2R(2)(f) of the Prospectus Regulation Rules and item 1.3 of Annex 1 of the PR Regulation.
24.3 CBRE has given and not withdrawn its written consent to the inclusion in this document of its report in Section A of Part 5 of this document and has authorised the contents of its report for the purposes of Rule 5.3.2R(2)(f) of the Prospectus Regulation Rules and item 1.3 of Annex 1 of the PR Regulation.
24.4 Knight Frank has given and not withdrawn its written consent to the inclusion in this document of its report in Section B of Part 5 of this document and has authorised the contents of its report for the purposes of Rule 5.3.2R(2)(f) of the Prospectus Regulation Rules and item 1.3 of Annex 1 of the PR Regulation.
24.5 Numis has given and not withdrawn its written consent to the inclusion in this document of the references to its name in the form and context in which they appear.
24.6 JPMC has given and not withdrawn its written consent to the inclusion in this document of the references to its name in the form and context in which they appear.

25. MIDDLE MARKET QUOTATIONS

25.1 The following table sets out the closing middle market quotations for an Ordinary Share (as derived from the Daily Official List of the London Stock Exchange) for the: (i) first Business Day of each of the six months immediately preceding the date of this document: (ii) (5 November 2019 being the latest practicable date prior to the publication of the document; and (iii) 10 September 2019 being the last Business Day prior to the Rule 2.4 Announcement:

Date	Price per Ordinary Share (pence)
3 June 2019	18.8
1 July 2019	15.0
1 August 2019	15.7
2 September 2019	14.5
10 September 2019	16.5
1 October 2019	19.7
1 November 2019	26.4
5 November 2019	26.2

26. GENERAL

26.1 The total costs and expenses of, and incidental to, the Share Subscription, are estimated to be approximately £5.3 million and are payable by Capital & Regional. Accordingly, the net proceeds of the Share Subscription are estimated to be approximately £72.6 million. Approximately £2 million of estimated costs would be incurred if the Proposed Transaction aborted following the publication of this document.
26.2 The Company remains subject to the continuing obligations of the Listing Rules with regard to the issue of securities for cash and the provisions of section 561 of the Companies Act (which confers on Shareholders rights of pre-emption in respect of the allotment of equity securities which are, or are to be paid up in cash) apply to the balance of the unissued share capital of the Company which is not the subject of a disapplication approved by the Shareholders in a General Meeting.
26.3 The Ordinary Shares are in registered form, are capable of being held in uncertificated form and are admitted to the Official List and are traded on the main market for listed securities of the London Stock Exchange.
26.4 The New Shares will be in registered form and from Admission of the New Shares will be capable of being held in uncertificated form and title to such shares may be transferred by means of a relevant system (as defined in the CREST Regulations).. The New Shares will be admitted with the ISIN GB0001741544 and SEDOL (Stock Exchange Daily Official List) number 0174154, being the same ISIN and SEDOL under which the Existing Ordinary Shares are admitted. LEI of Capital & Regional is 21380097W74N9OYF5Z25.
26.5 The New Shares will be issued at 25 pence per share.
26.6 The financial information contained in this document or incorporated by reference, unless otherwise stated, has been extracted from the Annual Reports and Accounts for the years ended 30 December 2018, 30 December 2017 and 30 December 2016 and the unaudited financial statements for the periods ended 30 June 2019 and 30 June 2018.
26.7 Where information has been sourced from a third party, the Company confirms that the information has been accurately reproduced and, as far as the Company is aware and able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. Where third party information has been used, the source of such information has been identified wherever it appears in this document.
26.8 In the event that the Group's property portfolio was to be sold at the valuations contained in the Valuation Reports set out in Part 5 of this document, any gains realised on such disposals could be subject to tax in the UK. Generally, disposals by a UK REIT of assets used for the purpose of its property rental business will be exempt from UK corporation tax. However, there are specific rules which can result in assets used for the purpose of the property rental business being subject to tax on disposal (for example, when a property has been used for a UK REIT's property rental business and it has been developed and the cost of development exceeds 30 per cent. of the fair value of the property when it was acquired and it is disposed of otherwise than in the course of the property rental business within three years of completion of the development to a party outside of the UK REIT's group).
26.9 This document is available on the Company's website at https://capreg.com/. This documents will only be provided in hard copy on request. Such requests should be made by either writing to the Company Secretary at 22 Chapter Street, London SW1P 4NP or contacting the Company Secretary by telephoning +44 (0)207 932 8000.

27. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at https://capreg.com/ from the date of this document until Admission:

(a) the Articles;
(b) the Property Valuation Reports contained in Part 5 of this document;
(c) this document;
(d) the written consents referred to in paragraph 24 of Part 8 of this document;
(e) the material contracts referred to in paragraph 16 of this Part 8 in so far as they relate to the Proposed Transaction;
(f) the irrevocable undertakings and letters of intent that have been received in connection with the Proposed Transaction; and
(g) all documents incorporated by reference into this document as stated in Part 9 of this document.

28. ANNOUNCEMENT OF RESULTS OF SHARE SUBSCRIPTION

The Company will make (an) appropriate announcement(s) to a Regulatory Information Service giving details of the results of the Share Subscription and the Partial Offer as soon as reasonably practicable upon the Partial Offer becoming wholly unconditional save as to Admission.

Dated: 7 November 2019

DOCUMENTATION INCORPORATED BY REFERENCE

The following documentation, which is available as described below, contains information which is relevant to the Share Subscription.

^l The Annual Report and Accounts of Capital & Regional for each of the financial years ended 30 December 2016, 2017 and 2018. The annual reports contain the audited consolidated financial statements of the Company for the financial years ended 30 December 2016, 2017 and 2018 prepared in accordance with IFRS, together with audit reports in respect of each such period.
^l The unaudited interim financial statements for the period beginning 31 December 2018 and ended 30 June 2019.
^l The Articles of Association of the Company adopted by the Company on 2 December 2014.

Shareholders attention is drawn to the Offer Document which contains certain information relating to Growthpoint which is required to be disclosed to Shareholders under the Takeover Code in connection with the Rule 9 Waiver (as referred to below). The Shareholders are advised to read such information, which is being incorporated by reference, and the Offer Document in its entirety. The remainder of the Offer Document, for the avoidance of doubt, is not incorporated by reference into this document and shall not form part of this document for the purposes of the Prospectus Regulation Rules.

These documents are also available on the Company's website at https://capreg.com/. These documents will only be provided in hard copy on request. Such requests should be made by either writing to the Company Secretary at 22 Chapter Street, London SW1P 4NP or contacting the Company Secretary by telephoning +44 (0)207 932 8000.

The table below sets out the various sections of such documents which are incorporated by reference into this document so as to provide the information required under the Prospectus Regulation and to ensure that Shareholders and others are aware of all information which, according to the particular nature of Capital & Regional and of the Ordinary Shares, is necessary to enable Shareholders and others to make an informed assessment of (i) the assets and liabilities, profit and losses, financial position and prospects of Capital & Regional, (ii) the rights attaching to the New Shares, (iii) the reasons for the Share Subscription and its impact on Capital & Regional. Any non-incorporated parts of documents incorporated by reference in this document are either not relevant for the purposes of the Share Subscription or the relevant information is included elsewhere in this document. Any documents themselves incorporated by reference or referred or cross-referred to in these documents shall not form part of this document, save for any documents themselves incorporated by reference or referred or cross-referenced to in the sections of the Offer Document which are set out in the table below and which are incorporated by reference.

Document	Section documents	Pages numbers in such
Annual Report and	Chairman's Statement	4-5
Accounts for the year	Director's Report	64-67
ended 30 December 2016	Independent Auditors' Report	69-76
	Consolidated Income Statement	77
	Consolidated Statement of Comprehensive Income	78
	Consolidated Balance Sheet	79
	Consolidated Statement of changes in Equity	80
	Consolidated Cashflow Statement	81
	Notes to the financial statements	82-118

Document	Section documents	Pages numbers in such
Annual Report and	Chairman's Statement	4-5
Accounts for the period	Director's Report	61-64
ended 30 December 2017	Independent Auditors' Report	66-73
	Consolidated Income Statement and Statement
	of Comprehensive Income	74
	Consolidated Balance Sheet	75
	Consolidated Statement of changes in Equity	76
	Consolidated Cashflow Statement	77
	Notes to the financial statements	78-115
Annual Report and	Chairman's statement	4-5
Accounts for the period	Director's Report	64-67
ended 30 December 2018	Independent Auditors' Report	69-77
	Consolidated Income Statement and
	Statement of Comprehensive Income	78
	Consolidated Balance Sheet	79
	Consolidated Statement of changes in Equity	80
	Consolidated Cashflow Statement Notes to the financial statements	81 82-112

Unaudited interim financial statements	Operating review	5-8
for the period beginning 31 December	Financial review	9-18
2018 and ended 30 June 2019	Independent Review Report to Capital & Regional PLC Condensed consolidated income statement and	19
	statement of comprehensive income	20
	Condensed consolidated balance sheet	21
	Condensed consolidated statement of changes in Equity	22
	Condensed consolidated cash flow statement	23
	Notes to the condensed financial statements	24-39
Unaudited interim financial statements	Operating review	5-7
for the period beginning 31 December	Financial review	8-15
2017 and ended 30 June 2018	Independent Review Report to Capital & Regional PLC	16
	Condensed consolidated income statement	17
	Condensed consolidated balance sheet	18
	Condensed consolidated statement of changes in Equity	19
	Condensed consolidated cash flow statement	20
	Notes to the condensed financial statements	21-35
Articles of Association dated	Share Capital	9-12
2 December 2014	Allotment and Alteration of Capital	12-14
	Transfer of Shares	14-20
	Transmission of Shares	21-22
	Votes of Members	31-33
	Dividends	53-58
	Winding Up	71

Section documents	Pages numbers in such
The directors of Growthpoint as set out in Appendix 5 (Additional Information) paragraph 2 (Directors and registered offices)	68
The source of funding for the cash consideration to be paid by Growthpoint to Existing Shareholders and to Capital & Regional in relation to the Proposed Transaction as set out in Part 1 (Letter from Growthpoint) paragraph 10 (Financing the Partial Offer and Share Subscription)	84
Financial information relating to Growthpoint incorporated by reference, details of which are set out in Appendix 2 (Financial Information relating to Growthpoint) Part A (Financial information incorporated by reference)	62
Credit ratings information relating to the Growthpoint Group as set out in Appendix 2 (Financial Information Relating to Growthpoint) Part B (Credit ratings information relating to the Growthpoint Group)	62
Offer related information as set out in Appendix 5 (Additional Information) paragraph 6 (Offer related arrangements)	74-78
Growthpoint interests and dealings in Ordinary Shares and persons acting in concert as set out in Appendix 5 (Additional Information) paragraph 4 (Interests and dealings in shares and persons acting in concert)	69-73
The future intentions of Growthpoint in respect of Capital & Regional's management, employees, location and pension schemes as set out in Part 1 (Letter from Growthpoint) paragraph 8 (Capital & Regional's management, employees, locations and pension schemes)	7-8
Information relating to property valuations and NAV required under Rule 29.1(d)(ii) of the Takeover Code as set out in Appendix 5 (Additional Information) paragraphs 9.10 to 9.13 (Basis of	83
	calculation and sources of information)

DEFINITIONS

In this document the following expressions have the meaning ascribed to them unless the context otherwise requires:

A\$	the lawful currency of Australia
Adjusted Profit	the total of Contribution from wholly-owned assets and the Group's joint ventures and associates, the profit from Snozone and property management fees less central costs (including interest but excluding non-cash charges in respect of share-based payments) after tax
Admission	together, the UK Admission and SA Admission
Admission and Disclosure Standards	the "Admission and Disclosure Standards" of the London Stock Exchange containing among other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities
Approved Options	options granted under Schedule 4 of ITEPA
Articles	the articles of association of the Company
Awards	awards under the LTIP
Board	the Directors of Capital & Regional
Business Day	a day (other than a Saturday, Sunday or public holiday) on which banks are generally open for business in the City of London for the transaction of normal banking business
CBRE	CBRE Limited
Capital & Regional or the Company	Capital & Regional PLC, a public limited company incorporated in England and Wales with registered number 01399411
Capital & Regional Employee Share Plans	awards or options outstanding pursuant to LTIP and SAYE Schemes
Capital & Regional Group or Group	the Company and each of its subsidiaries and subsidiary undertakings from time to time
CCSS	the CREST Courier and Sorting Service established by Euroclear to facilitate, amongst other things, the deposit and withdrawal of securities
certificated or in certificated form	in relation to a share or other security, a share or other security which is not in uncertificated form
Code	the US Internal Revenue Code of 1986, as amended
Companies Act	the Companies Act 2006 as amended
Consolidated Ordinary Share	an ordinary share of £0.10 in the capital of the Company following the Consolidation
Consolidation	the proposed consolidation of the Ordinary Shares on the basis of 10 Ordinary Shares of 1 pence each for one new ordinary share of 10 pence each

Consolidation Resolution	the ordinary resolution, conditional on the Proposed Transaction becoming effective, to approve the consolidation of the enlarged issued ordinary share capital (following completion of the Share Subscription) on the basis of 10 Ordinary Shares of 1 pence each for one new ordinary share of 10 pence each
Contribution	net rent less net interest, including unhedged foreign exchange movements
Corporate Governance Code	the UK Corporate Governance Code published in July 2018 by the Financial Reporting Council
CPI	Consumer Price Index
CREST	the relevant system, as defined in the CREST Regulations (in respect of which Euroclear is the operator as defined in the CREST Regulations)
CREST Manual	the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, CCSS Operations Manual and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended since)
CREST Member	a person who has been admitted to Euroclear as a system-member (as defined in the CREST Regulations)
CREST Participant	a person who is, in relation to CREST, a system-participant (as defined in the CREST Regulations)
CREST Regulations or Regulations	the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended
CREST Sponsor	a CREST participant admitted to CREST as a CREST sponsor
CREST Sponsored Member	a CREST Member admitted to CREST as a sponsored member
CRPM	Capital & Regional Property Management Limited, a subsidiary of Capital & Regional plc, which earns management and performance fees from the Mall assets and certain associates and joint ventures of the Group
CSDP	a Central Securities Depositary Recipient accepted as a participant under the South African Financial Markets Act, 2012, appointed by a Shareholder in South Africa for the purposes of, and in regard to, dematerialisation and to hold and administer securities or an interest in securities on behalf of such Shareholder
CTA 2010	the Corporation Tax Act 2010
CVA	a company voluntary arrangement, a legally binding agreement with a company's creditors to restructure its liabilities
Daily Official List	the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange
Dematerialised Shareholders	Shareholders on the SA share register who hold Dematerialised Shares
Dematerialised Shares	Ordinary Shares which have been incorporated into the Strate system, title to which is no longer represented by physical documents of title

Directors	the executive directors and non-executive directors of the Company, whose names appear on page 30 of this document
Disclosure Guidance and Transparency Rules	the rules relating to the disclosure of information made in accordance with section 73A(3) of FSMA
Disclosure Period	the period commencing on 11 September 2018 (being the date 12 months prior to the commencement of the Offer Period) and ending on the latest practicable date prior to the publication of this document
EPRA	the European Public Real Estate Association index
EPRA NAV	the net asset value calculation in accordance with the guidelines issued by EPRA from time to time
EPS	EPRA earnings per share which is the profit / (loss) after tax excluding gains on asset disposals and revaluations, movements in the fair value of financial instruments, intangible asset movements and the capital allowance effects of IAS 12 "Income Taxes" where applicable, less tax arising on these items, divided by the weighted average number of shares in issue during the year excluding own shares held
Equiniti	Equiniti Limited
ERISA	the US Employee Retirement Income Security Act of 1974, as amended
ERISA Entity	any person that is: (i) an "employee benefit plan" as defined in Section 3(3) of ERISA that is subject to Title I of ERISA; (ii) a "plan" as defined in Section 4975 of the Code, including an individual retirement account or other arrangement that is subject to Section 4975 of the Code; or (iii) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title I of ERISA or Section 4975 of the Code; or any governmental, church, non-U.S. or other employee benefit plan that is subject to any federal, state, local or non-U.S. law that is substantially similar to the provisions of Title I of ERISA or Section 4975 of the Code whose purchase, holding, and disposition of the New Shares could constitute or result in a non-exempt violation of any such substantially similar law
ERV	estimated rental value which is the Group's external valuers' opinion as to the open market rent which, on the date of valuation, could reasonably be expected to be obtained on a new letting or rent review of a unit or property
ESOT	Capital & Regional Employee Share Ownership Trust 2002
EU	the European Union
Euroclear	Euroclear UK & Ireland Limited, the operator of CREST
Exchange Ilford	the shopping centre owned by the Group as more particularly described in section 4 of Part 2 of this document
Excluded Territories	any member state of the European Economic Area (other than the United Kingdom), Australia, Canada, Japan, New Zealand and South Africa and any other jurisdiction where the extension or availability of the Share Subscription (and any other transaction contemplated thereby) would breach any applicable law or regulation

Existing Ordinary Shares	the 727,389,117 Ordinary Shares in issue as at the date of this document
	Financial Conduct Authority or FCA the Financial Conduct Authority of the United Kingdom
First Closing Date	28 November 2019
Form of Acceptance	the form of acceptance and authority relating to the Partial Offer being despatched to Shareholders who hold their Ordinary Shares in certificated form (other than those in any Excluded Territories)
Form of Proxy	the form of proxy for use at the General Meeting
Four Mall Assets	the Mall Blackburn, the Mall Maidstone, the Mall Wood Green and the Mall Walthamstow
FSMA	the Financial Services and Markets Act 2000, as amended
General Meeting	the general meeting of Capital & Regional to be held at 9.00 a.m. on 26 November 2019 notice of which is set out in Part 11 of this document
GDP	gross domestic product
Growthpoint	Growthpoint Properties Limited
Growthpoint Directors	the board or directors of Growthpoint
Growthpoint Group	Growthpoint and each of its subsidiaries undertakings from time to time	and subsidiary
Growthpoint Nominee or Nominee	any one or more wholly-owned subsidiaries of Growthpoint or partnerships in which Growthpoint holds (directly or indirectly) all or substantially all of the economic rights, together with any person (including a general partner) acting on behalf of any such person or partnership
HMRC	HM Revenue & Customs
Homestead	Homestead Group Holdings Limited
Homestead Relationship Agreement	the relationship agreement dated 17 October 2019 between the Company and Homestead which governs their relationship following the Proposed Transaction as further described in paragraph 16.6 of Part 8 of this document
IFRS	International Financial Reporting Standards as issued by the International Accounting Standards Board and, for the purposes of this document, as adopted by the European Union
Independent Shareholders	the Shareholders who are independent of Growthpoint and persons acting in concert with it, and excluding Norbert Sasse, Estienne de Klerk, Lynette Finlay and Frank Berkeley and each of their associates
Interim Dividend	the conditional interim dividend of 1p per Existing Ordinary Share payable to Shareholders as per the timetable below:
	Ex-dividend on the JSE Ex-dividend on the LSE Record date Payment date	27 November 2019 28 November 2019 29 November 2019 27 December 2019
Interim Results	the interim unaudited financial statements beginning 31 December 2018 and ended on 30 June 2019	for the period

ISIN	International Securities Identification Number
ITEPA	Income Tax (Earnings and Pensions) Act 2003
Issue Price	25 pence per New Share
Java	Java Capital Trustees and Sponsors Proprietary Limited
JPMC	J.P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove)
JSE	the exchange operated by JSE Limited (registration number 2005/022939/06), licensed as an exchange under the South African Financial Markets Act, 2012, as amended, and a public company incorporated in terms of the laws of South Africa
JSE Listing Requirements	the Listing Requirements issued by the JSE from time to time
Kingfisher Redditch Joint Venture	as defined in paragraph 4.2 of Part 2 of this document
Knight Frank	Knight Frank LLP
LEI	Legal Entity Identifier
LIBOR	London inter bank offered rate
Link	Link Market Services
Listing Rules	the Listing Rules made by the FCA under Part VI of FSMA
LN Group	Homestead, PDI Investment Holdings Limited, Mstead Limited and any subsidiary of Homestead
London Stock Exchange	London Stock Exchange PLC
LTIP	Capital & Regional 2018 Long-Term Incentive Plan
LTV	loan-to-value
Main Board	the Main Board of the list of securities admitted to listing on the JSE
Main Market	the London Stock Exchange's main market for listed securities
Mall Blackburn	the shopping centre owned by the Group as more particularly described in section 4.1 of Part 2 of this document
Mall Luton	the shopping centre owned by the Group as more particularly described in section 4.1 of Part 2 of this document
Mall Maidstone	the shopping centre owned by the Group as more particularly described in section 4.1 of Part 2 of this document
Mall Walthamstow	the shopping centre owned by the Group as more particularly described in section 4.1 of Part 2 of this document
Mall Wood Green	the shopping centre owned by the Group as more particularly described in section 4.1 of Part 2 of this document
Market Abuse Regulation	Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing the Market Abuse Directive and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC
Member Account ID	the identification code or number attached to any member account in CREST
Marlowes Hemel Hempstead	the shopping centre owned by the Group as more particularly described in section 4 of Part 2 of this document

Member State	a sovereign state which is a member of the European Union
Money Laundering Regulations	the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) 2017 Regulations S.I. 2017/692, as amended
Net Asset Value or NAV	the net asset value
Net Rental Income or NRI	the Group's share of the rental income, less property and management costs (excluding performance fees) of the Group
New Shares	the new Ordinary Shares to be issued to Growthpoint (or its Nominee(s)) under the terms set out in this document
Non-PID Dividend	any dividend of the Company other than a PID
Note 11 Arrangement	any indemnity or option arrangement, and any agreement or understanding, formal or informal, of whatever nature, relating to the Company's relevant securities which may be an inducement to deal or refrain from dealing therein;
Notice of General Meeting	the notice of the General Meeting contained in Part 11 of this document
Numis	Numis Securities Limited
Offer Document	the offer document issued by Growthpoint on or about the date of this document in relation to the Partial Offer
Offer Period	the offer period (as defined in the Takeover Code) relating to the Company which commenced on 11 September 2019 and shall end on the earlier of the date on which the Partial Offer becomes or is declared unconditional as to acceptances and/or the date on which the Partial Offer lapses or is withdrawn (or such other date as the Panel may decide)
Offer Price	the consideration for the Partial Offer, being 33 pence in cash for each Ordinary Share to be sold pursuant to the Partial Offer
Official List	the Official List of the Financial Conduct Authority pursuant to Part VI of FSMA
Ordinary Shares or Shares	ordinary shares of £0.01 each in the share capital of the Company
Outstanding Awards	Awards granted on 16 August 2013
Overseas Shareholders	Shareholders with registered addresses outside the United Kingdom or who are citizens or residents of countries outside the United Kingdom
Panel or Takeover Panel	The Panel on Takeovers and Mergers
Parkdev Group	each of the Parkdev Parties, their respective holding companies and the subsidiaries and subsidiary undertakings of each Parkdev Party and each such holding company from time to time, and any other company or other legal entity (in any case wherever incorporated) of which a majority in number or nominal value of the issued shares is ultimately beneficially owned or controlled by either or both of Louis Norval (or any one or more of his associates) and Neno Haasbroek (or any one of more of his associates), and for these purposes "associate" shall have the meaning given in section 435 Insolvency Act 1986

Parkdev Parties	PDI Investment Holdings Limited, Pinelake International Limited, Clearance Capital (Cayman) Limited, PDI Investment Holdings Limited and Pinelake International Limited
Parkdev Relationship Agreement	the relationship agreement between Homestead and the Company dated 28 January 2016 as further described in paragraph 16.6 of Part 8 of this document
Partial Offer	the recommended partial cash offer being made by Growthpoint (or its Nominee(s)) at the Offer Price for Growthpoint to acquire 219,786,924 Existing Ordinary Shares on the terms and subject to the Conditions, set out in the Offer Document
Partial Offer and Rule 9 Waiver Resolution	the resolution (to be taken on a poll) to approve the Partial Offer and the waiver of any obligation on Growthpoint which may arise under Rule 9 of the Takeover Code as a result of the Proposed Transaction which requires approval by Independent Shareholders holding over 50 per cent. of the voting rights of Capital & Regional
Participant ID	the identification code or membership number used in CREST to identify a particular CREST Member or other CREST Participant
Peens Family Holding	Louis Peens and certain family members and related entities and trusts
PFIC	passive foreign investment company
PID	property income distribution
Pounds Sterling, Sterling or £	the lawful currency of the United Kingdom
PR Regulation	Regulation (EU) 2019/980 of the European Commission
Property Valuation Reports	the property valuation reports prepared by the Property Valuers and set out in Part 5 of this document
Property Valuers	CBRE and Knight Frank
Proposed Transaction	the Partial Offer and the Share Subscription
Proposed Directors	Nobert Sasse and George Muchanya
Prospectus Regulation	Regulation (EU) 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC
Prospectus Regulation Rules	the Prospectus Regulation Rules published by the FCA under Section 73A of FSMA in accordance with the Prospectus Regulation
Rand	the lawful currency of South Africa
RBS	The Royal Bank of Scotland plc
Record Time	the record time for the Consolidation being in the case of Shareholders on the UK share register 6.00 p.m. on or around 14 January 2020 and, in the case of Shareholders on the SA share register, at close of business on 17 January 2020
Registrars or Receiving Agent	Equiniti and/or Link, as the case may be
Registrar Engagement Letter	the registrar engagement letter dated 1 November 2019 between the Company and Equiniti and further described in paragraph 16.8 of Part 8 of this document

Regulation S	Regulation S under the US Securities Act
Regulatory Information Service or RIS	one of the regulatory information services authorised by the Financial Conduct Authority to receive, process and disseminate regulatory information in respect of listed companies
REIT	Real Estate Investment Trust
Relationship Agreement	the relationship agreement dated 17 October 2019 between the Company and Growthpoint which governs their relationship following the Partial Offer becoming or being declared wholly unconditional and completion of the Share Subscription as further described in paragraph 16.5 of Part 8 of this document
Resolutions	the resolutions to be proposed at the General Meeting set out in the Notice of General Meeting
RPI	retail price index
Rolled Forward Basic NAV	the rolled-forward basic NAV based on NAV as at 30 June 2019 of £373.7 million (51 pence per share) plus the valuation decline of £32.9 million (4.5 pence per share) between 30 June 2019 and 30 September 2019 as more particularly set out in the Rule 2.7 Announcement
Rule 2.4 Announcement	the announcement by Capital & Regional of a possible partial offer and subscription for shares in Capital & Regional by Growthpoint released on 11 September 2019
Rule 2.7 Announcement	the joint announcement by Growthpoint and Capital & Regional of a firm intention by Growthpoint to make the Partial Offer pursuant to Rule 2.7 of the Takeover Code, which was published on 17 October 2019
Rule 9 Waiver	the waiver of any obligation on Growthpoint which would otherwise arise under Rule 9 of the Takeover Code as a result of the Proposed Transaction
SA Admission	the admission of the New Shares to listing and trading on the Main Board
SA share register	the share register maintained on behalf of the Company in South Africa by the SA Transfer Secretaries
SA Transfer Secretaries	Link Market Services South Africa Proprietary Limited
SAYE Scheme	Capital & Regional 2008 SAYE Scheme
SDRT	stamp duty reserve tax
SEC	the United States Securities and Exchange Commission
Senior Manager	James Ryman who holds the position of Group Investment Director for the Group
SENS	the Stock Exchange News Service of the JSE
Shareholder	a holder of Ordinary Shares from time to time
Share Subscription	the proposed subscription by Growthpoint of the 311,451,258 New Shares pursuant to the Subscription Agreement
Subscription Agreement	the share subscription agreement dated 17 October 2019 and amended and restated on 29 October 2019 between the Company and Growthpoint relating to the Share Subscription as further described in paragraph 16.4 of Part 8 of this document

Statutes	the Companies Act, CREST Regulations and every other statue or statutory instrument, rule, order or regulation for the time being in force concerning companies and affecting the Company
stock account	an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited
Strate	Strate Proprietary Limited (registration number 1998/022242/07), a private company incorporated with the laws of South Africa and the electronic clearing and settlement system used by the JSE to settle trades
Takeover Code	the City Code on Takeovers and Mergers
Transaction Resolutions	the Resolutions to be proposed at the General Meeting except for the Consolidation Resolution
UK Admission	the admission of the New Shares: (i) to the premium listing segment of the Official List; and (ii) to trading on the London Stock Exchange's main market for listed securities
UK REIT	a real estate investment trust established in the United Kingdom to which Part 12 of the CTA 2010 applies
UK REIT Group	a group UK REIT within the meaning of Part 12 of the CTA 2010
UK share register	the share register maintained on behalf of the Company by Equiniti
uncertificated or in uncertificated form	recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
United Kingdom or UK	the United Kingdom of Great Britain and Northern Ireland
US GAAP	generally accepted accounting principles in the United States
US Securities Act	the United States Securities Act of 1933, as amended
United States or US	the United States of America, its territories and possessions, any state of the United States and the District of Columbia
VAT	value added tax

NOTICE OF GENERAL MEETING

Capital & Regional PLC

(Incorporated and registered in England and Wales with registered number 01399411)

Notice of General Meeting

NOTICE IS HEREBY GIVEN that a general meeting (the "Meeting") of Capital & Regional plc (the "Company") will be held at 110 Rochester Row, Westminster, London SW1P 1JQ on 26 November 2019 at 9.00 a.m. to consider and, if thought fit, pass resolution 1 and 3 as an ordinary resolutions, resolution 2 as a resolution requiring approval of more than 50 per cent. of the voting rights in the Company held by Independent Shareholders and resolution 4 as a special resolution. Resolution 2 must be voted on by way of a poll by the Independent Shareholders. Unless the context otherwise requires, words and expressions used in this notice, including in the notes herein (the "Notice") have the meanings given to them in the combined prospectus and circular sent to shareholders dated 7 November 2019 (the "Prospectus"), of which this Notice forms part.

ORDINARY RESOLUTION

1. THAT: subject to and in addition and without prejudice to any existing authorities conferred upon the directors of the Company, the Directors be and are hereby generally and unconditionally authorised pursuant to section 551 of the Companies Act to exercise all or any of the powers of the Company to allot Ordinary Shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company in connection with the Share Subscription (as defined in the Prospectus) up to an aggregate nominal amount of £3,114,512.58 provided that such authority shall expire (unless previously renewed, varied or revoked) at the earliest to occur of conclusion of the next annual general meeting of the Company after the date on which this resolution is passed or the date 15 months after the date of passing of this resolution, save that the Company may, before such expiry, revocation or variation, make an offer or agreement which would or might require relevant securities to be allotted after such expiry revocation or variation and the directors of the Company may allot relevant securities in pursuance of such offer or agreement as if the authority hereby conferred had not expired or been revoked or varied.

RESOLUTION

2. THAT: subject to, and conditional on the passing of Resolutions 1 and 4: (i) for the purposes of Rule 36.5 of the Takeover Code, the Partial Offer be and is hereby approved on the terms and conditions as set out in the Offer Document; and in connection therewith; (ii) the grant of a waiver by the Takeover Panel, of any requirement under Rule 9 of the City Code on Takeovers and Mergers on Growthpoint (or its concert parties) to make a general offer to the shareholders of the Company as a result of the Proposed Transaction be and is hereby approved.

ORDINARY RESOLUTION

3. THAT: subject to, and conditional on Admission becoming effective and in accordance with section 618 of the Companies Act: (i) every ten ordinary shares of £0.01 each in the capital of the Company in issue, in the case of Shareholders on the UK share register, at 6.00 p.m. on 14 January 2020 and, in the case of Shareholders on the SA share register, at close of business on 17 January 2020 be consolidated into one ordinary share of £0.10 each having attached the rights specified in the Articles of Association of the Company; (ii) the movement of ordinary shares of £0.01 each on the JSE and the London Stock Exchange be suspended between close of business on 10 January 2020 and close of business on 20 January 2020; (iii) any fractions of ordinary shares of £0.10 each arising on consolidation pursuant to this resolution shall not be allotted to the holders of ordinary shares of £0.01 each otherwise entitled to them; and (iv) the directors may appoint some person to execute transfers or renunciations on behalf of persons otherwise entitled to any such fractions and generally may make all arrangements which appear to them necessary or appropriate for the settlement and disposal of fractional entitlements.

SPECIAL RESOLUTION

4. THAT: subject to, and conditional on the passing of Resolution 1 and in addition and without prejudice to any existing and unexercised powers, the directors of the Company be and are hereby empowered pursuant to section 570 and 573 of the Companies Act to allot equity securities (within the meaning of section 560 of the Companies Act) of the Company for cash pursuant to the authority conferred by Resolution 1 above, as if section 561 of the Companies Act did not apply to any such allotment, provided that such power shall be limited to the allotment of up to 311,451,258 Ordinary Shares provided that this power shall expire (unless previously renewed, varied or revoked) at the earliest to occur of the conclusion of the next annual general meeting of the Company after the date on which this resolutions is passed or the date 15 months after the date of passing of this resolution.

By order of the Board

Stuart Wetherly Company Secretary

Registered office: 22 Chapter Street London SW1P 4NP

Dated 7 November 2019

Notes for the General Meeting

1. Shareholders are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the General Meeting. A Shareholder may appoint more than one proxy in relation to the General Meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that Shareholder. A proxy need not be a Shareholder of the Company. A proxy form which may be used to make such appointment and give proxy instructions accompanies this notice. If you do not have a proxy form and believe that you should have one, or if you require additional forms, please contact the Company on +44 (0) 20 7932 8000.
1. To be valid any proxy form or other instrument appointing a proxy must be returned by one of the following methods:
in hard copy form by post, by courier or by hand to the appropriate Company registrar; in the case of members on the UK share register, to Equiniti at Aspect House, Spencer Road, Lancing BN99 6DA, United Kingdom and, in the case of Shareholders on the SA share register who certificated Shareholders, to Link Market Services South Africa Proprietary Limited, 13th Floor, 19 Ameshoff Street, Braamfontein, 2001 (PO Box 4844, Johannesburg, 2000 South Africa); or
by email for members on the Company's UK Register to [email protected]
in the case of CREST members, by utilising the procedure set out below under paragraphs 8-11; or
in the case of Dematerialised Shareholders on the SA share register holding their shares through a CSDP or broker, by providing their voting instruction to the CSDP or broker (as applicable).

Dematerialised Shareholders on the SA share register holding their shares through a CSDP or broker must advise their CSDP or broker if they wish to attend the General Meeting or send a proxy to represent them at the General Meeting. Their CSDP or broker will issue them with the necessary letter of representation to attend or be represented at the General Meeting. If they do not wish to attend the General Meeting, but wish to cast their votes, they should provide their CSDP or broker with their voting instructions. In the absence of such instructions, their CSDP or broker will be obliged to vote in accordance with the instructions contained in the custody agreement mandate between them and their CSDP or broker.

To be valid, proxies must be received no later than 48 hours (not including any part of a day that is not a Business Day) before the time of the General Meeting or, if the General Meeting is adjourned, 48 hours (not including any part of a day that is not a Business Day) before the time fixed for the adjourned meeting. Where shares are held by a CSDP or broker, voting instructions must be provided in sufficient time to permit the CSDP or broker to advise the registrar no later than 48 hours (not including any part of a day that is not a Business Day) or 48 hours before the time of the meeting in the event of an adjournment (not including any part of a day that is not a Business Day).

1. The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described in paragraph 9 below) will not prevent a Shareholder attending the General Meeting and voting in person if he/she wishes to do so.
1. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a "Nominated Person") may, under an agreement between him/her and the Shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the Shareholder as to the exercise of voting rights.
1. The statement of the rights of Shareholders in relation to the appointment of proxies in paragraphs 1 and 4 above does not apply to the Nominated Persons. The rights described in such paragraphs can only be exercised by Shareholders of the Company.
1. To be entitled to attend and vote at the General Meeting (and for the purpose of the determination by the Company of the votes they may cast) Shareholders must be registered in the Register of Members of the Company at 6.30 p.m. on 22 November 2019 (or, in the event of any adjournment, you must be entered on the register at 6.30 p.m. on the date which is two days before the date of the adjourned meeting) or in the SA share register at close of business (South African time) on 22 November 2019 (or, in the event of any adjournment, you must be entered on the register at close of business (South African time) on the date which is two Business Days prior to the date of any adjourned meeting). Changes to the Register of Members after the relevant deadlines shall be disregarded in determining the rights of any person to attend and vote at the meeting.
1. As at 6 November 2019 (being the last practicable date prior to the publication of this Notice) the Company's issued share capital consists of 727,389,117 ordinary shares of £0.01 each, carrying one vote each. Therefore, the total voting rights in the Company as at 6 November 2019 are 727,389,117 ordinary shares.
1. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
1. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual (which can be viewed at www.euroclear.com). The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to

be received by the issuer's agent (ID RA19) by 9.00 a.m. on 22 November 2019. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

1. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
1. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertified Securities Regulations 2001.
1. Any corporation which is a Shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a Shareholder provided that they do not do so in relation to the same shares.
1. Any Shareholder attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
1. In accordance with section 311A of the Companies Act 2006, the contents of this notice of meeting, details of the total number of shares in respect of which members are entitled to exercise voting rights at the General Meeting and, if applicable, any members' statements, members' resolutions or members' matters of business received by the Company after the date of this notice will be available on the Company's website www.capreg.com.
1. Shareholders may not use any electronic address provided either in this notice of meeting or any related documents (including the Form of Proxy) to communicate with the Company for any purposes other than those expressly stated.

AI assistant

CAPITAL & REGIONAL PLC — M&A Activity 2019

5288_prs_2019-11-12_18edd1d9-032b-4685-adba-ffb96207d90b.pdf

THIS DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION.

Capital & Regional PLC

Notice to Overseas Shareholders

Notice to Overseas Shareholders in the United States

Any person in the United States who obtains a copy of this document and who is not a QIB is required to disregard it.

SUMMARY

1. INTRODUCTION, CONTAINING WARNINGS

2. KEY INFORMATION ON THE ISSUER

2.1 Who is the issuer of the securities?

2.2 What is the key financial information regarding the issuer? KEY HISTORICAL FINANCIAL INFORMATION

INCOME STATEMENT

BALANCE SHEET

CASH FLOW

PRO FORMA FINANCIAL INFORMATION

UNAUDITED PRO FORMA STATEMENT OF NET ASSETS

2.3 What are the key risks that are specific to the issuer?

2.3.1 The Company has relatively high levels of indebtedness and recent declines in property valuations have increased the Company's loan to value ratios

2.3.2 The Company's current strategy is focused on repositioning its existing assets; such a strategy requires significant capital expenditure

2.3.3 Weakening economic conditions and poor sentiment in commercial real estate markets could lead to low investor demand and an adverse movement in the valuation of the Group's portfolio

2.3.4 The trend towards online shopping and multi-channel retailing may adversely impact consumer footfall in shopping centres

2.3.5 Prolonged downturn in tenant demand and resulting pressure on rent levels, occupancy and renewals

2.3.6 Threat of company voluntary arrangement and administrations amongst the retail industry

2.3.7 Illiquid nature of assets

3. KEY INFORMATION ON THE SECURITIES

3.1 What are the main features of the securities?

3.1.1 Ordinary Shares

3.1.2 The rights attaching to the Ordinary Shares

3.1.3 Restrictions on free transferability of Ordinary Shares

3.1.4 Dividend Policy

3.2 Where will the securities be traded?

3.3 What are the key risks that are specific to the securities?

3.3.1 The market price of Ordinary Shares could be volatile and subject to fluctuations

3.3.2 Controlling Shareholder

4. KEY INFORMATION ON THE OFFER OF SECURITIES TO THE PUBLIC AND/OR THE ADMISSION TO TRADING ON A REGULATED MARKET

4.1 Under which conditions and timetable can I invest in this security?

4.1.1 Conditions of the Share Subscription

4.1.2 Expected Timetable

4.1.3 Admission

4.1.4 Dilution

4.1.5 Expenses

4.2 Why is this document being produced?

4.2.1 Background to and reason for the Share Subscription, Partial Offer and issue of this document

4.2.2 Use of proceeds and amount of proceeds

4.2.3 Underwriting

4.2.4 Material conflicts of interest

RISK FACTORS

1. THE SHARE SUBSCRIPTION

1.3 The Share Subscription will result in dilution of holdings of Shareholders

1.4 The Share Subscription will result in the Company having a controlling shareholder

1.5 Abort costs in the event the Share Subscription does not proceed

2. CAPITAL & REGIONAL'S FINANCIAL POSITION

2.2 The Company's current strategy is focused on repositioning its existing assets; such a significant strategy requires capital expenditure

2.3 Weakening economic conditions and poor sentiment in commercial real estate markets could lead to low investor demand and an adverse movement in valuation

2.4 The Group may not be able to refinance its borrowings in the longer term and/or the cost of finance could increase

2.5 Property valuation is inherently subjective, uncertain and could be overstated

2.6 The hedging transactions used by the Group to minimise interest and exchange rate risk may limit gains, result in losses or have other adverse consequences

3. CAPITAL & REGIONAL'S BUSINESS ACTIVITY AND INDUSTRY

3.2 The threat to the Group's property assets from competing in-town and out-of-town retail and leisure schemes

3.3 Prolonged downturn in tenant demand and resulting pressure on rent levels, occupancy and renewals

3.4 The Group is subject to the credit risks associated with tenants, has a high level of dependency on the retail sector and the threat of company voluntary arrangements and administrations amongst the retail industry

3.5 The Group is exposed to the risks associated with having specific tenants or types of tenant

3.6 Business disruption from a major incident

3.7 The market for the properties which the Group owns is generally illiquid

3.8 Reputational risks

3.9 The departure of key employees or the inability to hire employees with the required skills could materially adversely affect the Group's business

4. THE ORDINARY SHARES

4.1 The market price of Ordinary Shares could be volatile and subject to fluctuations

4.2 The liquidity of the Ordinary Shares could be affected by the actions of Growthpoint

4.3 Dilution of Shareholders' interest as a result of subsequent equity fundraisings

4.4 Dividends

5. LEGAL AND REGULATORY

5.2 Status as a UK Real Estate Investment Trust (under Part 12 of the CTA 2010) is dependent on the Company complying with the UK REIT regime

5.3 Uncertainty surrounding the process and terms of the UK's withdrawal from the EU could have a material adverse effect on the Group

5.4 Investors may, in certain circumstances, be exposed to adverse ERISA consequences

6. ENVIRONMENTAL, SOCIAL AND GOVERNANCE

6.1 The Group's investments are subject to potential environmental liabilities and costs

6.2 The Group's investments are subject to potential health and safety liabilities and reputational risk from incidents or accidents at the properties they own and manage

CAPITAL & REGIONAL PLC M&A Activity 2019