HEXO Corp. — Investor Presentation 2021

May 25, 2021

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PA D L O C K PA RT N E R S U K F U N D I I

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Disclaimer

A final prospectus (the “Prospectus”) containing important information relating to the securities described in this document has been filed with the securities regulatory authorities in each of the provinces and territories of Canada. A copy of the Prospectus, and any further amendment, is required to be delivered with this document.

This document, dated May 25, 2021, does not provide full disclosure of all material facts relating to the securities offered. Investors should read the Prospectus, final prospectus and any amendments for disclosure of those facts, especially risk factors relating to the securities offered, before making an investment decision.

Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Prospectus.

The presented materials and accompanying oral presentation include statements with respect to Padlock Partners UK Fund II (the “Trust”), including its business operations and strategy, and financial performance and condition, which may constitute forward-looking information, future oriented financial information, or financial outlooks (collectively, “forward-looking information”) within the meaning of Canadian securities laws. Forward-looking information may relate to the Trust’s future outlook and anticipated events, including future results, performance, achievements, prospects or opportunities for the Trust or the real estate industry and the Offering and, in some cases, can be identified by terminology such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “should”, “believe” or “continue”, or the negative thereof, or other similar expressions concerning matters that are not historical facts.

Forward-looking information in this presentation includes, but is not limited in any manner to statements with respect to:

a) opportunities in the UK self-storage and mixed-use real estate market;

b) optimal market conditions in the UK;

c) expectations regarding recent economic developments in the UK and the future of the UK real estate markets;

d) the availability of financing for the Properties;

e) the Trust’s intention to make distributions quarterly;

f) the Trust’s anticipated cash burn rate;

g) the Manager’s intention, after completion of the indirect acquisition of the Initial Portfolio by the Trust, to use the remaining net proceeds from the Offering within 12 months to acquire additional Properties and that not more than 40% of net proceeds of the Offering and any concurrent private placement will be deployed to acquire such additional Properties;

h) the Manager’s expectation regarding the closing date of the acquisition of the Brentwood Property and the Huntingdon Property, including the expected timeline for the Trust’s development plans in respect of the Brentwood Property;

i) the Manager’s expectations regarding the operation of the Properties and the development of the Brentwood Property, including, but not limited to, the planned conversion of unused open warehouse space into storage units;

j) the possibility of the Manager leveraging its network in the real estate sector to explore possible co-investments between the Trust and potential co-investors;

k) the Trust’s target annual pre-tax distribution yield and investor internal rate of return for the term of the Trust, in each case across all Unit classes;

l) the Manager’s intention to complete a liquidity event within five years of the Closing Date, subject to two one-year extensions;

m) the possibility of completing any private placements concurrent with the closing of the Offering;

n) the expectation that the Trust will satisfy the requirements stipulated by the Tax Act to qualify as a “mutual fund trust”;

o) the expected public filings of the Trust; and

p) the anticipated and potential adverse impacts resulting from the ongoing COVID-19 pandemic.

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Disclaimer (continued)

Material factors and assumptions used by management of the Trust to develop the forward-looking information include, but are not limited to, the Trust’s current expectations about: vacancy and rental growth rates in the UK self-storage and mixed-use market; demographic trends in the UK; the impact of Brexit on the UK economy, including the UK property sector; the realization of property value appreciation and timing thereof; the inventory of self-storage and mixed-use properties; the availability of self-storage and mixed-use properties (other than the Initial Portfolio) for acquisition and the price at which such properties may be acquired; the price at which Properties may be disposed and the timing thereof; closing and other transaction costs in connection with the acquisition and disposition of Properties; the availability of mortgage financing and current interest rates; the capital structure of the Trust; the extent of competition for self-storage and mixed-use properties; assumptions about the markets in which the Trust intends to operate; expenditures and fees in connection with the maintenance, operation and administration of the Properties; the ability of the Manager to manage and operate the Properties; the global and UK economic environment; fluctuating global economic conditions due to COVID-19; the scope and duration of the COVID-19 pandemic and its impact on the Trust, the global economy, demand levels for self-storage in the UK, the UK housing market, work-from-home policies, the expansion of online presences for smaller retailers and storage facility development activity; foreign currency exchange rates; and governmental regulations or tax laws. With respect to factors and assumptions used to calculate the 10-14% pre-tax, gross investor internal rate of return, see the “Description of Securities” section of the Prospectus. While management of the Trust considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.

Although the Manager believes that the expectations reflected in such forward-looking statements are reasonable and represent the Trust’s internal projections, expectations and beliefs at this time, such statements involve known and unknown risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, many of which are beyond the Trust’s control, may affect the operations, performance and results of the Trust, and could cause actual results in future periods to differ materially from current expectations of estimated or anticipated events or results expressed or implied by such forward-looking statements. Such factors include, among other things, the availability of suitable Properties for purchase by the Trust, the availability of mortgage financing for such Properties, and general economic and market factors, including interest rates, prospective purchasers of real estate, the attractiveness of the Trust’s Properties and the ability of the Trust to sell its Properties upon termination of the Trust, business competition, public health crises and disease outbreaks, including the COVID-19 pandemic, and changes in government regulations or income tax laws. See the “Risk Factors” section of the Prospectus.

Investors are cautioned against placing undue reliance on forward-looking statements. Except as required by law, the Trust undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

An investor should rely only on the information contained in the Prospectus. This presentation is qualified in its entirety by reference to, and must be read in conjunction with, the detailed information appearing in the Prospectus. Neither the Trust nor any of the Agents has authorized anyone to provide investors with different or additional information. The Trust is not offering, or soliciting offers to acquire, the securities in any jurisdiction in which the offer is not permitted. For purchasers outside Canada, neither the Trust nor the Agents have done anything that would permit the offering or distribution of this presentation together with the Prospectus in any jurisdiction where action for that purpose is required, other than in Canada. An investor is required to inform itself about and to observe any restrictions relating to the planned public offering and the distribution of this presentation and of the Prospectus.

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Disclaimer (continued)

No securities regulatory authority has expressed an opinion about the securities of the Trust discussed in this presentation and it is an offence to claim otherwise. The securities of the Trust discussed in this presentation have not been, and will not be, registered under the U.S. Securities Act, or the securities laws of any state of the United States and, subject to certain exceptions, may not be offered, sold or delivered, directly or indirectly, in the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. This presentation does not constitute an offer to sell or solicitation of an offer to buy any of the securities of the Trust in the United States.

An investment in the securities offered by the Prospectus must be considered speculative as the securities are subject to certain risk factors as set out under the heading “Risk Factors” or otherwise described in the Prospectus. An investment in units of the Trust is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment. Investors should also review the financial statements included in the Prospectus.

There will be no closing unless a minimum of $20,000,000 of Class A Units, Class F Units, Class C Units and/or Class U Units are sold pursuant to the Offering and any concurrent private placement. The closing of the Offering will not proceed unless all preconditions to the closing of the acquisition of the Properties comprising the Initial Portfolio have been satisfied or waived. See “Risk Factors – Risk Related to the Offering – Acquisition of the Initial Portfolio” in the Prospectus. The distribution under this Offering will not continue for a period of more than 90 days after the date of the receipt obtained from the principal securities regulatory authority for the final prospectus for this Offering (the “Final Prospectus”). If one or more amendments to the Final Prospectus are filed and the principal securities regulatory authority has issued a receipt for any such amendment, the distribution under this Offering will not continue for a period of more than 90 days after the latest date of a receipt for any such amendment. In any case, the total period of distribution under the Offering will not continue for a period of more than 180 days from the date of the receipt for the Final Prospectus. If the Minimum Offering is not achieved during the 90-day period, subscription funds received by the Agents (which will be held by the Agents in trust) will be returned to the applicable Purchasers without any deductions, unless the applicable Purchasers have otherwise instructed the Agents. The Class U Units are denominated in pound sterling and designed for investors wishing to make their investment and receive distributions in pound sterling.

There is no market through which the Units may be sold and Purchasers may not be able to resell Units purchased under the Prospectus. This may affect the pricing of the Units in the secondary market, the transparency and availability of trading prices, the liquidity of the Units, and the extent of issuer regulation. As at the date of the Prospectus, the Trust does not have any of its securities listed or quoted, has not applied to list or quote any of its securities, and does not intend to apply to list or quote any of its securities, on the Toronto Stock Exchange, Aequitas NEO Exchange Inc., any other Canadian marketplace, a U.S. marketplace, or a marketplace outside Canada and the U.S. See the “Risk Factors” section of the Prospectus.

While the Trust Declaration contains a redemption right, such redemption right is not intended to be the primary mechanism for Unitholders to liquidate their investment. The total cash amount available for payment of the redemption price of Units by the Trust is limited to $100,000 in each calendar quarter and is also limited in any 12-month period to 1% of the aggregate Net Asset Value (as defined in the Prospectus) at the start of such 12-month period. If redemptions in excess of these cash limits occur, the redemption of Units may be paid and satisfied by way of an in specie distribution of property of the Trust, and/or unsecured subordinated notes of the Trust, as determined by the Trustees in their discretion, to the redeeming Unitholder. Such property may not be liquid and generally will not be a qualified investment for Plans and may be a prohibited investment for RRSPs, RRIFs, TFSAs, RESPs and RDSPs. See the “Risk Factors — Risks Related to the Offering — Limited Liquidity of Units” and “Risk Factors — Risks Related to Redemptions” sections of the Prospectus.

The Investment objectives of the Trust are substantially similar to those of Padlock Partners UK Fund I (“Padlock I”). Furthermore, the trustees and executive officers of the Trust also act as trustees and executive officers of Padlock I. Accordingly, there is a risk that, in situations where a conflict of interest arises as between the Trust and Padlock I, the interests of Padlock I may be perceived to be favoured by Clear Sky over those of the Trust. For more information on these and other potential conflicts of interest, see the “Trustees and Executive Officers”, “Clear Sky and the Management Agreement – Potential Conflicts of Interest”, “Risk Factors – Same Management Group for Various Entities” and “Risk Factors – Relationship between the Trust and Padlock I” sections of the Prospectus.

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Disclaimer (continued)

An investment in the securities offered by the Prospectus is subject to certain risk factors as set out in the “Risk Factors” section of the Prospectus or otherwise described in the Prospectus.

Although the Trust intends to distribute its available cash to Unitholders, such cash distributions may be reduced or suspended. The ability of the Trust to make cash distributions and the actual amount distributed will depend on the ability of the Trust to indirectly acquire an interest in the Properties and the ongoing operations of the Properties, and will be subject to various factors including those referenced in the “Risk Factors” section of the Prospectus. The Minimum Return payable to Unitholders is not guaranteed and may not be paid on a current basis in each year or at all. The return on an investment in the Units is not comparable to the return on an investment in a fixed income security. Cash distributions, including a return of a Unitholder’s original investment, are not guaranteed and the anticipated return on investment is based upon many performance assumptions. It is important for Purchasers to consider the particular risk factors that may affect the real estate investment markets generally and therefore the availability and stability of the distributions to Unitholders. See the “Risk Factors” section of the Prospectus for a more complete discussion of these risks and their potential consequences.

The Trust intends to make quarterly cash distributions commencing at the end of the first fiscal quarter immediately following the Closing Date. Initially, and until the Trust’s cash flows from operations stabilize, it is expected that such quarterly cash distributions will constitute a return of capital (which may include a return of Invested Capital (as defined herein) and distribution of proceeds from any refinancing in respect of the Initial Portfolio). If only the Minimum Offering is sold and the Trust successfully executes its investment strategy in respect of the Initial Portfolio, including but not limited to, (i) converting the unused open warehouse space available at the Brentwood Property into storage units, and (ii) implementing valueadd plans for the Huntingdon Property, subject to the UK Manager’s assumptions regarding, among other things, vacancy and rental growth rates in the UK self-storage and mixed-use market, the availability of mortgage financing and current interest rates, and expenditures and fees in connection with the maintenance, operation and administration of the Properties comprising the Initial Portfolio, the Trust anticipates that it will have positive cash flows from operations by year three following the Closing Date and distributions to Unitholders are expected to include a return of capital for at least the first three years of the Trust’s operations. See the “Forward-Looking Statements”, “Description of the Activities of the Trust – The Properties”, “Use of Proceeds” and “Risk Factors – Risks Related to the Trust and its Business – Capital Depletion Risk” sections of the Prospectus.

The after-tax return from an investment in Units to Unitholders who are subject to Canadian income tax will depend, in part, on the composition for tax purposes of distributions paid by the Trust (portions of which distributions may be fully or partially taxable or may be tax deferred). Income (i.e., return on capital) is generally expected to be taxed in the hands of a Unitholder as dividends, ordinary income or capital gains. Amounts in excess of the income and capital gains of the Trust that are paid or payable by the Trust to a Unitholder (i.e., return of capital) are generally non-taxable to a Unitholder (but reduce the Unitholder’s adjusted cost base in the Unit for purposes of the Tax Act). See the “Certain Canadian Federal Income Tax Considerations” and “Certain United Kingdom Tax Considerations” sections of the Prospectus.

Each investor should satisfy himself or herself as to the federal, provincial, territorial and other tax consequences of an investment in Units by obtaining advice from his or her tax advisor.

All figures in this presentation are in Canadian dollars unless otherwise noted.

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CONTENTS

01	Executive Summary	07
02	Experienced Asset Manager	08
03	Investment Highlights	12
04	Initial Portfolio	16
05	Summary Term Sheet	19
06	Investment Opportunity	20
07	Contact Information	21

– 01 EXECUTIVE SUMMARY

Padlock Partners UK Fund II

Padlock Partners UK Fund II (the “Trust”) provides investors with an opportunity to invest in a portfolio of diversified income-producing commercial real estate properties in the UK, with a particular focus on selfstorage and mixed-use properties, and will be managed by Padlock Capital Partners II, LLC (the “Manager.”)[1]

The Trust is designed to generate positive risk-adjusted returns across all market environments by capitalizing on market inefficiencies, executing value-add initiatives and unlocking overlooked areas of value.

Investment Opportunity

• The Manager believes the UK self-storage sector demonstrates favourable property fundamentals and is positioned to provide attractive yield and return upside.

• The Manager believes the current economic and geopolitical conditions in the UK present an opportunity to capitalize on stresses in the marketplace.

• The self-storage sector has proven to be resilient and a top real estate sector performer in previous economic downturns as periods of stress have typically created self-storage demand.

• The Management team has a track record of successfully capitalizing on real estate investment opportunities, with expertise managing self-storage assets.

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C$20-40MM

OFFERING SIZE

5 Year

INVESTMENT TERM

6%

TARGET ANNUAL PRE-TAX DISTRIBUTION YIELD

10-14%

TARGET GROSS IRR

1. The Manager is an affiliate of Clear Sky Capital, Inc (“Clear Sky”).

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– 02 EXPERIENCED ASSET MANAGER

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The Manager is an affiliate of Clear Sky, an active investor in diversified, valueadd real estate opportunities since its inception in 2009.

Management

ACQUISITIONS

Since 2009, though Q4 2020, Clear Sky and affiliates acquired or developed US$875 million of real estate and operating asset investments.

INVESTMENTS

Through Q4 2020, Clear Sky and affiliates have invested in excess of US$323 million of equity through various investment vehicles.

CAPITAL DEPLOYMENT

Capital deployed across real estate investments primarily sourced from U.S. and Canadian based retail and institutional investors.

Asset Classes

SELF-STORAGE

Acquire, operate existing and convert/develop new sites

EXPRESS CAR

WASH Acquire, operate existing and develop/convert new sites

Geography

GLOBAL

Based in Phoenix, Arizona, with team members in the US, Canada and the UK

UNITED KINGDOM

Established self-storage platform and holdings

MULTI FAMILY

Acquire, operate value-add locations across numerous markets

MANUFACTURED HOUSING

Acquire and operate existing sites

UNITED STATES

Established commercial real estate platform and holdings

CANADA

Established capital markets and investor relations team

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– 02 EXPERIENCED ASSET MANAGER

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John Stevenson

CEO & MANAGING DIRECTOR / Padlock Capital Partners II, LLC

Mr. Stevenson joined Clear Sky in 2015 and currently serves as Chief Executive Officer of Padlock Partners UK Fund I and Managing Director of the Manager, leading Clear Sky’s self-storage platform. In this capacity, Mr. Stevenson is responsible for sourcing, underwriting, acquiring, developing, operating and financially managing assets. Mr. Stevenson works closely with the Clear Sky leadership team in executing the investment and growth objectives of the business. He is a member of the Self Storage Association and Self Storage Association UK. Prior to joining Clear Sky in 2015, Mr. Stevenson was an executive and founding partner of a domestic and international hospitality franchisor. He was instrumental in leading such company in establishing over 100 locations within the first six years of inception. Born and raised in Germany, Mr. Stevenson attended Georgia Southern University in the US and graduated with a Bachelor of Arts in Communications.

Marcus Kurschat

FOUNDER & CEO / Clear Sky

Mr. Kurschat founded Clear Sky in 2009 and serves as its Chief Executive Officer. He has ultimate responsibility for the company’s investment strategy, growth initiatives, capital formation, risk management and operations. He has over two decades of principal real estate investing experience with expertise in sourcing, acquisitions, structuring, development, redevelopment and repositioning. Under his leadership, Clear Sky is a leading investor and operator with value-add platforms focused on multifamily, self-storage, car wash, manufactured housing and co-working salon suites. He has extensive relationships with U.S. and Canadian-based retail and institutional investors and has formed investment vehicles that support their investing needs. Prior to founding Clear Sky, Mr. Kurschat was founder of a boutique real estate investment management firm focused on multifamily transactions primarily located in Canada. He began his career as an entrepreneur and has syndicated various multifamily transactions with joint venture partners and investors. He received his Structural Engineering diploma from British Columbia Institute of Technology in Burnaby, British Columbia. Mr. Kurschat is also the Chairman and a trustee of Padlock Partners UK Fund I.

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– 02 EXPERIENCED ASSET MANAGER

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Matt Collins

CHIEF FINANCIAL OFFICER / Clear Sky

Mr. Collins joined Clear Sky in 2014 and serves as its CFO. In this capacity, he oversees the company’s accounting, tax, financial reporting and treasury functions. He is also actively involved with the company’s capital markets efforts and investor communications. Mr. Collins is a seasoned professional experienced with GAAP and IFRS accounting rules and standards for financial reporting. Before joining Clear Sky, he was a Senior Manager at Ernst & Young, LLP , where he served nine years in the audit and financial accounting and advisory services practice, with a focus on serving companies funded through capital markets. While at EY, he served a portfolio of private and public companies, gaining experience in technical accounting, international operations, Securities Exchange Commission reporting and internal controls. In addition, he also served on a selective team at EY, carrying out the firm’s corporate social responsibility initiatives in Brazil and Costa Rica, consulting with local business owners on strategic business initiatives. He has his Masters of Accounting and Bachelor of Science in Business Administration with a Major in Accounting from the University of Arizona, Tucson. Mr. Collins is also the Chief Financial Officer and Treasurer of Padlock Partners UK Fund I.

Matt Mason

GENERAL COUNSEL / Clear Sky

Mr. Mason joined Clear Sky in 2017 and serves as General Counsel with oversight of the company’s corporate governance and legal matters, risk management and financial structuring activities. He is well versed with real estate and corporate law and adheres to regulatory, compliance and other relevant standards that impact investors. Before joining Clear Sky, Mr. Mason was a partner and shareholder at Gallagher & Kennedy, a large regional law firm in the southwestern United States. During his ten years in private practice, He represented clients in well over US$1 billion worth of complex real estate and corporate transactions. Mr. Mason presently serves as a member of the Arizona State Board for Charter Schools and has previously served as a member of the City of Scottsdale Development Review Board, City of Scottsdale Board of Adjustment and other statewide boards. He is admitted to the practice of law in all state and federal courts in the State of Arizona and is a member of the State Bar of Arizona. Mr. Mason earned a Juris Doctor and a Master of Dispute Resolution from Pepperdine University School of Law, and a Bachelor of Science in Political Science from Arizona State University. Prior to practicing law, he worked as a Legislative Assistant to the United States House of Representatives, Committee on Rules. Mr. Mason is also the General Counsel and Secretary of Padlock Partners UK Fund I.

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– 02 EXPERIENCED ASSET MANAGER

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Chris Herthel

CHIEF OPERATING OFFICER / Clear Sky

Mr. Herthel joined Clear Sky in 2020 and currently serves as Chief Operating Officer and is a member of Clear Sky’s Executive Management team. In this capacity, he is responsible for corporate operations, strategic growth initiatives, and oversight of asset and portfolio management functions. He also collaborates on investment decisions and supports investment performance and fiduciary standards.

Mr. Herthel has over 23 years of real estate investment management and consulting industry experience. He has been involved in over US$2 billion of real estate transactions across property types and investment structures. Prior to joining Clear Sky, Mr. Herthel was a Director within Moss Adams’ Real Estate Advisory Services practice. During his tenure at Moss Adams, he worked with entrepreneurial real estate firms on growth and capital raising initiatives and with private investors and family offices on investment strategies. Prior to joining Moss Adams, he held senior positions with real estate and private equity firms including Buchanan Street Partners, Somera Capital Management, and AEW Capital Management in roles across acquisitions, portfolio management, capital markets, and corporate leadership. Mr. Herthel received both his Bachelor of Science degree in Business Administration, with concentration in Real Estate Finance and Development, and his Master of Business Administration degree from the Marshall School of Business at the University of Southern California.

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– 03 INVESTMENT HIGHLIGHTS

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UK SELF-STORAGE PROVIDING RETURN PREMIUM OVER SOVEREIGN BOND

UK Self Storage providing return premium over sovereign bond

As at January 15, 2021,The UK self-storage sector offers the highest expected return risk adjusted premiums to 10year government bond rates

The 780-basis point spread over the sovereign bond reflects the attractiveness of self-storage when compared to other property types

Expected outperformance of UK self-storage over a 10 year period reflects the high cap rates and low financing rates for self-storage assets

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1. 10-year government yield represents an average based on the location of REIT properties for that sector. Source: Green Street – Global Property Allocator January 15, 2021

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– 03 INVESTMENT HIGHLIGHTS

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GBP TO CAD PERFORMANCE (DEC. 31, 2015 – DEC. 31, 2020)

Attractive Arbitrage Opportunity

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• GBP vs. CAD is currently near the low end of the five-year trading range

• Investors who acquire Canadian-denominated units have increased purchasing power in the UK

• The Manager believes that with adjustment for health, social and political variables, the pound sterling’s balance of risk has shifted in favour of further pound sterling upside

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– 03 INVESTMENT HIGHLIGHTS

Positive sector fundamentals with opportunity for growth

MARKET ADOPTION

The UK self-storage sector is a highly fragmented sector that is quickly being adopted by UK consumers. As of December 31, 2019, there were 1,900 storage sites in the UK, equating to 0.73 square feet per person.

PROFITABILITY

Profitability and occupancy rates have seen strong growth over the past several years, indicating increasing demand and market adoption.

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OPPORTUNITY FOR GROW TH IN THE UK SELF-STORAGE
MARKET
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Source: SSA UK Annual Industry Report 2020

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– 03 INVESTMENT HIGHLIGHTS

Positive sector fundamentals with opportunity for growth

POPULATION & DEMAND

UK cities have among the smallest average living space per capita in comparison to countries in Western Europe. London and the UK generally have seen large urban population growth in recent years.

PURCHASING POWER

Primary southern and coastal markets have strong purchasing power.

RESIDENTIAL FLOOR AREA PER CAPITA

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URBAN POPULATION GROW TH (2009-2019)

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Source: GFK 2020

Source: SSA UK Annual Industry Report 2019

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– 04 INITIAL PORTFOLIO

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Initial Portfolio Overview

Following the completion of the offering, the Trust intends to indirectly acquire one selfstorage property and one development property from arm’s length vendors (the “Initial Portfolio”)

Properties in the Initial Portfolio are located in Brentwood (London MSA) and in Huntingdon, a commuter town north of London.

The Huntingdon self-storage site is newly opened and in lease up with room for expansion.

The Brentwood site is an existing warehouse which will be converted into self-storage in two phases to reach 53,000 net rentable sq. ft.

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BRENTW OOD
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HUNTINGTON
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Property	Tenure	Year Built / Converted	CLA1 (sq. ft.)	MLA2 (Sq. ft.)	Purchase Price	Expected Capital Expenditure	Occupancy (as at 03/31/21)
Brentwood3	Freehold	1986	43,417	53,000	£5,100,000	£2,952,000	100%
Huntingdon	Freehold	2020	54,485	80,000	£5,125,000	£241,000	55.5%
TOTAL			97,902	133,000	£10,225,000	£3,193,000

1 CLA = Current lettable area. 2 MLA = Maximum lettable area. 3 The Brentwood Property will be acquired subject to and with the benefit of the Brentwood Lease which expires on December 31, 2021. Following the expiration of the Brentwood Lease on December 31, 2021, the Trust plans to initiate the internal fit out for self-storage use in two phases.

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– 04 INITIAL PORTFOLIO

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Initial Portfolio Overview

– B R E N T W O O D

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W AREHOUSE EXTERIOR
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W AREHOUSE INTERIOR
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LOCATION

The property is in Brentwood, an upscale municipality located just northeast of London off the M25 and A12 motorways.

PROPERTY

The property consists of a modern warehouse and offices totaling 43,417 square feet with a self contained, secure yard with 29 parking spots.

ACQUISITION

The 1.16 acre property will be acquired as a freehold sale leaseback with the existing tenant vacating in December 2021. The purchase price for the property is contracted at £5,100,000.

STRATEGY

Upon expiration of the tenant lease, the Trust plans to fit out the current warehouse to provide 53,000 net rentable square feet across 3 internal floors at a cost of £2,952,000.

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– 04 INITIAL PORTFOLIO

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Initial Portfolio Overview

– H U N T I N G T O N

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RENTAL OFFICE
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SELF STORAGE UNITS
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LOCATION

The freehold property is in Huntingdon, Cambridgeshire, a growing market town located 46 miles north of London and 15 miles northeast of Cambridge.

PROPERTY

The 1.235 acre site houses a multi story warehouse which was newly converted to self- storage in late 2019 and the contracted purchase price is £5,125,000. The property consists of warehouse, bulk, drive up, parking and interior self-storage units totaling 54,485 rentable square feet.

OCCUPANCY

In less than two years, the site has achieved 55.5% occupancy as of March 31, 2021. Rental rates across all unit types is £12.50.

STRATEGY

Management plans to improve the site by adding 7,487 rentable square feet shortly after closing at a cost of £241,000.

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Summary Term Sheet

A portfolio of diversified income-producing commercial real estate properties in the UK, with a particular focus on self-storage and mixed-use properties

Target Investments

Public offering of Class A Units, Class F Units, Class C Units and/or Class U Units in each of the provinces and territories of The Offering Canada qualified by a prospectus. No subscription form is required for purchases of Class A Units, Class F Units, Class C and/or Class U Units

Offering Size	Minimum Offering:$20,000,000 of Class A Units, Class F Units, Class C Units and/or Class U Units Maximum Offering:$40,000,000 of Class A Units, Class F Units, Class C Units and/or Class U Units
	Class A:$10.00 per Unit Listing: unlisted; Fees: 2.75% agents’ commission, 3.00% selling concession Class F:$10.00 per Unit Listing: unlisted; Fees: 2.75% agents’
Unit Classes and	commission
Attributes1	Class C:$10.00 per Unit Listing: unlisted; Fees: 0.00% agents’
	commission
	Class U:£10.00 per Unit Listing: unlisted; Fees: 2.75% agents’
	commission, 3.00% selling concession
Use of Funds	Following the completion of the Offering, the Trust intends to indirectly acquire one existing self-storage Property and one
	development Property located in the United Kingdom
Distribution	Target 6% annual distribution payable quarterly

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	Target Leverage	Up to 65% loan-to-cost at the Trust level
	Target Total Return	10%-14% Gross IRR
	Term	Five-year term with two one-year extensions at the discretion of the Manager
		Return of invested capital and minimum return of 7.0%
		Following this, there is a catch-up wherein amounts in excess of
	Carried Interest	the 7.0% will first be split 50/50 between unitholders and Clear Sky and affiliates until the overall returns are split 80% / 20%
		After the catch-up is achieved, the carried interest will be equal to
		20% of all payments made thereafter
	Asset Management Fee	The greater of $400,000 and 1.5% of the sum of Invested Capital and the UK Holdco Invested Capital
		Paid by UK Holdco to the Manager equal to 3% gross costs and
	Construction	expenses directly associated or incurred in connection with the
	Management Fee	demolition, renovation, construction or development of the
		Properties
	Acquisition Fee	1% acquisition fee
	Commitment by Clear Sky & Affiliates	5% of committed capital

1. The Class C Units will only be sold to institutional and certain other investors known to Clear Sky.

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Padlock Partners

STABLE DISTRIBUTIONS

UK Fund II – Investment Opportunity

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6% target pre-tax distribution yield

ATTRACTIVE RISK-ADJUSTED RETURNS

10-14% target pre-tax IRR

MARKETPLACE

Opportune time to capitalize on stresses in the marketplace

RESILIENT SECTOR

Opportunity to invest in a sector with robust fundamentals and resilience to economic downturns

EXPERIENCED MANAGER

Experienced, aligned manager with proven track record of value creation

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CIBC World Markets Inc.

For further information with respect to this investment opportunity, please contact:

MARK DRIMAN

Managing Director, Real Estate Investment Banking mark.driman@cibc.ca 416-594-7918

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