Capital & Regional Regulatory News (CAL)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM, ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT IS A FINANCIAL PROMOTION FOR THE PURPOSES OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 AND IS BEING ISSUED BY GROWTHPOINT PROPERTIES LIMITED. THIS ANNOUNCEMENT HAS BEEN APPROVED AS A FINANCIAL PROMOTION FOR PUBLICATION IN THE UNITED KINGDOM BY GOLDMAN SACHS INTERNATIONAL WHICH IS AUTHORISED BY THE PRA AND REGULATED BY THE FCA AND PRA (FRN: 142888).

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN RELATION TO THE CAPITAL & REGIONAL SHARES EXCEPT ON THE BASIS OF INFORMATION IN THE OFFER DOCUMENT AND THE COMBINED PROSPECTUS AND CIRCULAR WHICH ARE PROPOSED TO BE PUBLISHED IN DUE COURSE.

17 October 2019

RECOMMENDED PARTIAL OFFER

and

PROPOSED SHARE SUBSCRIPTION

by

Growthpoint Properties Limited

in

Capital & Regional plc

Summary

·; Further to the announcements on 11 September and 9 October 2019 the directors of Growthpoint Properties Limited ("Growthpoint") and the directors of Capital & Regional plc ("Capital & Regional") are pleased to announce that they have reached agreement on a recommended substantial investment by Growthpoint in Capital & Regional.

·; The investment comprises:

·; a recommended partial offer to be made by Growthpoint at 33 pence in cash per Capital & Regional Share to acquire 219,786,924 Capital & Regional Shares, representing approximately 30.3 per cent. of the issued ordinary shares in the capital of Capital & Regional by way of a contractual offer under the City Code (the "Partial Offer"); and

·; a subscription to acquire 311,451,258 new Capital & Regional Shares (the "Subscription Shares") at a price of 25 pence per Subscription Share to raise approximately £77.9 million (before costs) for Capital & Regional (the "Share Subscription").

(the Partial Offer and the Share Subscription together the "Proposed Transaction"). The Partial Offer and the Share Subscription are inter-conditional.

·; On completion of the Proposed Transaction, Growthpoint (or its nominees) will hold approximately 51.2 per cent. of the enlarged issued ordinary share capital of Capital & Regional.

·; The Proposed Transaction has the dual benefits of allowing existing Capital & Regional Shareholders the opportunity to realise an attractive premium to the current share price on part of their investment at 33 pence per Capital & Regional Share while affording them the opportunity to participate in the future value of a recapitalised Capital & Regional.

Partial Offer

·; Under the terms of the Partial Offer to be made by Growthpoint, either directly or indirectly (through 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), accepting Capital & Regional Shareholders will receive 33 pence in cash for each Capital & Regional Share sold by them pursuant to the Partial Offer (the "Offer Price").

·; The Offer Price represents a premium of approximately:

·; 100 per cent. to the undisturbed closing price per Capital & Regional Share of 16.5 pence on 10 September 2019 (being the last Business Day prior to the announcement of Growthpoint's possible partial offer and subscription for new shares in Capital & Regional);

·; 124 per cent. to the volume-weighted average price of 14.7 pence per Capital & Regional Share for the three-month period ended 10 September 2019 (being the last Business Day prior to the announcement of Growthpoint's possible partial offer and subscription for new shares in Capital & Regional); and

·; 85 per cent. to the volume-weighted average price of 17.8 pence per Capital & Regional Share for the six-month period ended 10 September 2019 (being the last Business Day prior to the announcement of Growthpoint's possible partial offer and subscription for new shares in Capital & Regional).

·; The Partial Offer element of the Proposed Transaction values (i) the entire issued ordinary share capital of Capital & Regional at approximately £239.7 million and (ii) the Capital & Regional Shares subject to the Partial Offer at approximately £72.5 million.

·; The Partial Offer will provide Capital & Regional Shareholders the opportunity to realise approximately 30.3 per cent. of their shareholding in Capital & Regional at 33 pence in cash, and potentially sell a larger proportion of their Capital & Regional Shares depending on the level of acceptances of the Partial Offer.

Share Subscription

·; The Share Subscription will provide Capital & Regional with proceeds equal to approximately £77.9 million (before costs). Under the Share Subscription Agreement Capital & Regional has agreed with Growthpoint that at least £50 million of the proceeds will be used to reduce leverage with the balance of proceeds to be used to fund capital expenditure. This will provide the Company with additional balance sheet flexibility and allow the Company to accelerate existing pipeline capital expenditure projects which are expected to help drive future income growth and reposition the assets in line with the Company's Community Shopping Centre strategy.

Rationale for the Proposed Transaction

·; Growthpoint's 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, as well as strategic insight and planning, governance and controls and financial and treasury discipline. Core to its investment philosophy, Growthpoint seeks opportunities where it can invest in companies through subscriptions for new shares, thereby providing fresh capital to such companies to take advantage of growth opportunities in the markets in which they operate. Since Growthpoint started this investment approach, it has provided approximately £1.0 billion of capital to investee companies and their management teams to pursue growth opportunities. As a fundamental principle to this approach, Growthpoint seeks a meaningful stake in its investments.

·; Growthpoint views Capital & Regional as an attractive investment opportunity given its:

·; well articulated strategy to transition from a fashion led "wants" based offering to a more sustainable community led "needs" offering;

·; sustainable position with affordable rentals averaging £15 per square foot;

·; significant concentration in the attractive London and South East England markets; and

·; strong management team.

·; Growthpoint will support Capital & Regional to acquire further assets in the UK retail market taking advantage of current market conditions. However, Growthpoint is of the view that Capital & Regional's existing balance sheet will need to be deleveraged more in line with Growthpoint's existing treasury policy of between 35% and 45% LTV first in order to obtain the required financial flexibility and target an improved dividend pay-out level.

Capital & Regional Board Recommendation

·; The Capital & Regional Directors, who have been so advised by Numis and J.P. Morgan Cazenove as to the financial terms of the Partial Offer, consider the terms of the Partial Offer to be fair and reasonable. Accordingly, the Capital & Regional Directors intend to recommend unanimously that Capital & Regional Shareholders accept (or procure the acceptance of) the Partial Offer. In providing advice to the Capital & Regional Directors, Numis and J.P. Morgan Cazenove have taken into account the commercial assessments of the Capital & Regional Directors.

·; The Capital & Regional Directors, who have been so advised by Numis and J.P. Morgan Cazenove, consider the waiver granted by the Panel of any obligation that would otherwise arise under Rule 9 as a result of the Partial Offer and the Share Subscription to be fair and reasonable and in the best interests of Independent Shareholders and the Company as a whole. Accordingly, the Capital & Regional Directors intend to recommend unanimously that Capital & Regional Shareholders vote (or procure the vote) in favour of the Partial Offer Resolution (being a single resolution to approve the Partial Offer and the Whitewash) and the other Resolutions to enable the Share Subscription to proceed at the Capital & Regional General Meeting to be convened in due course. In providing advice to the Capital & Regional Directors, Numis and J.P. Morgan Cazenove have taken into account the commercial assessments of the Capital & Regional Directors.

·; Numis is providing independent financial advice to the Capital & Regional Directors for the purpose of Rule 3 of the City Code.

Irrevocable Undertakings and Letter of Intent

·; Growthpoint has received irrevocable undertakings from the Capital & Regional Directors, other than Louis Norval (whose associated companies have granted separate irrevocable undertakings described below) and Wessel Hamman (who owns no Capital & Regional Shares), to (i) accept (or procure the acceptance of) the Partial Offer at the Offer Price representing 30.3 per cent. of their aggregate holding and approximately 0.6 per cent. of the aggregate number of Capital & Regional Shares which are the subject of the Partial Offer; and (ii) vote (or procure the vote) in favour of the Resolutions at the Capital & Regional General Meeting in respect of 4,631,730 Capital & Regional Shares representing, in aggregate, approximately 0.6 per cent. of the issued share capital of Capital & Regional as at 16 October 2019 (being the last Business Day prior to the date of this Announcement).

·; Growthpoint has also received irrevocable undertakings from Mstead Limited and PDI Investment Holdings Limited (being associated companies of Louis Norval) and Peens Family Holdings to (i) accept (or procure the acceptance of) the Partial Offer at the Offer Price representing 47.9 per cent. of their aggregate holding and, in aggregate, approximately 41.1 per cent. of the aggregate number of Capital & Regional Shares which are the subject of the Partial Offer; and (ii) vote (or procure the vote) in favour of the Resolutions at the Capital & Regional General Meeting in respect of 188,509,201 Capital & Regional Shares representing, in aggregate, approximately 26.0 per cent. of the issued share capital of Capital & Regional as at 16 October 2019 (being the last Business Day prior to the date of this Announcement).

·; Growthpoint has also received irrevocable undertakings from 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 2016 Relationship Agreement) to (i) accept (or procure the acceptance of) the Partial Offer at the Offer Price representing approximately 33.7 per cent. of their aggregate holding and, in aggregate, approximately 15.6 per cent. of the aggregate number of Capital & Regional Shares which are the subject of the Partial Offer; and (ii) vote (or procure the vote) in favour of the Resolutions at the Capital & Regional General Meeting in respect of 101,688,046 Capital & Regional Shares, representing, in aggregate, approximately 14.0 per cent. of the issued share capital of Capital & Regional as at 16 October 2019 (being the last Business Day prior to the date of this Announcement).

·; Growthpoint has therefore received irrevocable undertakings to (i) accept (or procure the acceptance of) the Partial Offer at the Offer Price in respect of a total of 126,022,842 Capital & Regional Shares, representing, in aggregate, approximately 17.3 per cent. of the issued share capital of Capital & Regional as at 16 October 2019 (being the last Business Day prior to the date of this Announcement) and 57.3 per cent. of the aggregate number of Capital & Regional Shares which are the subject of the Partial Offer; and (ii) vote (or procure the vote) in favour of the Resolutions at the Capital & Regional General Meeting in respect of a total of 294,828,977 Capital & Regional Shares, representing, in aggregate, approximately 40.6 per cent. of the issued share capital of Capital & Regional as at 16 October 2019 (being the last Business Day prior to the date of this Announcement).

·; Growthpoint has also received a letter of intent from Henderson Global Investors Limited to (i) accept (or procure the acceptance of) the Partial Offer at the Offer Price representing approximately 30.3 per cent. of its holding and approximately 3.8 per cent. of the aggregate number of Capital & Regional Shares which are the subject of the Partial Offer; and (ii) vote (or procure the vote) in favour of the Resolutions at the Capital & Regional General Meeting in respect of 27,670,181 Capital & Regional Shares, representing, approximately 3.8 per cent. of the issued share capital of Capital & Regional as at 16 October 2019 (being the last Business Day prior to the date of this Announcement).

·; Further details of these irrevocable undertakings and the letter of intent are set out in Appendix III to this Announcement.

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 erf measuring 123 hectares (304 acres). In addition to South Africa, Growthpoint has made significant investments in Australia and Eastern Europe. Growthpoint owns 62.2 per cent. of Growthpoint Properties Australia Limited, which is separately listed on the Australian Stock Exchange and has a portfolio of 57 office and industrial assets. Growthpoint also has a 29.3 per cent. interest in Globalworth Real Estate Investments Limited, a company listed on the Alternative Investment Market of the London Stock Exchange with property interests in Poland and Romania.

Information on Capital & Regional

·; Capital & Regional is an English public limited company listed on the premium listing segment of the Official List and admitted to trading on the main market of the London Stock Exchange. Capital & Regional also has a secondary listing on the Main Board of the JSE. Capital & Regional was established in 1978 and was admitted to trading on the London Stock Exchange in 1986. Since then, the Company has developed a strong record of delivering value enhancing retail and leisure asset management opportunities and currently owns seven shopping centres predominantly in London and the South East of England and owns and operates the Snozone Leisure Business. Capital & Regional has consolidated property assets of approximately £764 million.

Listing, Financing and Timing

·; Growthpoint intends to maintain Capital & Regional's admission to the premium listing segment of the Official List and to trading on London Stock Exchange's main market for listed securities and Capital & Regional's secondary listing on the Main Board of the JSE.

·; Growthpoint intends (so far as it is within its control) to maintain Capital & Regional's status as a UK REIT but it, like Capital & Regional presently, cannot guarantee that the necessary conditions will continue to be satisfied now or in the future.

·; Growthpoint will finance the Proposed Transaction via an amendment and restatement of an existing facility with Absa Bank Limited under which additional commitments have been made available.

·; Growthpoint expects the Proposed Transaction to complete by the end of 2019.

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

This summary should be read in conjunction with, and is subject to, the following full text of this Announcement and the Appendices.

Commenting on the Proposed Transaction, Hugh Scott-Barrett, Chairman of Capital & Regional, said: 

"The Capital & Regional Board is unanimously recommending the Proposed Transaction as we firmly believe it provides a transformational catalyst for the future growth of Capital & Regional to the benefit of all shareholders. Not only does it provide a liquidity event for shareholders at a significant premium to the Company's share price prior to this Announcement, it also delivers a cash injection of approximately £77.9 million that de-risks the business and provides a long-term foundation for growth. This puts Capital & Regional on the front foot by reducing leverage and allowing our strong management team to focus its full attention onto executing its strategy and implementing the roll out of its community centre asset management plan.

Growthpoint is a well capitalised and highly experienced global real estate business with a proven track record of creating shareholder value at the companies it chooses to invest in. Furthermore, its management team shares our confidence that retail centres, such as those which Capital & Regional owns and invests in, that serve the daily 'needs' rather than the 'wants' of underlying communities, will continue to play an important role in local economies and the wider retail landscape. As a result, with Growthpoint's support, Capital & Regional will also be well positioned to take advantage of opportunities that we expect to become apparent in an increasingly dislocated market."

Commenting on the Proposed Transaction, Francois Marais, Chairman of Growthpoint, said:

"Growthpoint views its investment in Capital & Regional as an exciting next step in the execution of its internationalisation strategy. Growthpoint's strategic intent is to support the growth of Capital & Regional in the same way it has done following its investments in GOZ and GW. The result of Growthpoint's investment in GOZ and GW was a significant improvement in profitability, growth in their property portfolios, both in size and quality, and a value uplift for shareholders.

Growthpoint is fully supportive of Capital & Regional's "needs based" retail strategy and of the management of Capital & Regional. Growthpoint looks forward to a productive and profitable ongoing engagement with the management of Capital & Regional to assist Capital & Regional to achieve its stated objectives."

The Partial Offer will be subject to the Conditions and certain further terms of the Partial Offer set out in Appendix I to this Announcement and the full terms and conditions to be set out in the Offer Document. Appendix II to this Announcement sets out the sources of information and bases of calculations used in this Announcement. Appendix III to this Announcement contains details of the irrevocable undertakings given by the Capital & Regional Directors and certain other Capital & Regional Shareholders and the letter of intent by certain other Capital & Regional Shareholders. Appendix IV to this Announcement contains the definitions of certain terms used in this summary and in the full text of this Announcement. This Announcement contains property valuations supported by valuation reports for Capital & Regional as at 30 September 2019 set out in Appendix V pursuant to the requirements of Rule 29 of the City Code.

The Offer Document, together with a Form of Acceptance, the Prospectus (subject to approval of the FCA) and a Form of Proxy, will be posted to Capital & Regional Shareholders in due course and, in any event, within 28 calendar days from the date of this Announcement, unless otherwise agreed with the Panel, other than to certain Non-UK / Non-South African Shareholders in a Restricted Jurisdiction in the circumstances permitted under the City Code or in accordance with any dispensation given by the Panel. The Offer Document, the Form of Acceptance, the Prospectus and the Form of Proxy will be made available, subject to certain access restrictions in respect of Non-UK / Non-South African Capital & Regional Shareholders, on Capital & Regional's website at www.capreg.com and Growthpoint's website at www.growthpoint.co.za.

The full terms of, and conditions to, the Partial Offer will be set out in the Offer Document and the Form of Acceptance. In deciding whether or not to accept and/or approve the Partial Offer, Capital & Regional Shareholders should rely solely on the information contained in, and follow the procedures set out in, the Offer Document, the Form of Acceptance, the Prospectus and the Form of Proxy (as appropriate).

Enquiries:

Goldman Sachs International ("Goldman Sachs"), which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the Financial Conduct Authority ("FCA") and the PRA in the United Kingdom, is acting as financial adviser to Growthpoint and no one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Growthpoint for providing the protections afforded to clients of Goldman Sachs, or for giving advice in connection with the matters described in this Announcement or any matter referred to herein. Neither Goldman Sachs nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Goldman Sachs in connection with this Announcement or any matter referred to herein.

J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised by the PRA and regulated by the PRA and the FCA in the United Kingdom. J.P. Morgan Cazenove is acting exclusively as financial adviser to Capital & Regional and no-one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to the matters set out in this Announcement and will not be responsible to anyone other than Capital & Regional for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, or for providing advice in relation to the contents of this Announcement or any other matter referred to in this Announcement.

Numis Securities Limited ("Numis"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Capital & Regional and no-one else in connection with the Partial Offer and any other matters referred to in this Announcement, and will not regard any other person as its client in relation to such matters and will not be responsible to anyone other than Capital & Regional for providing the protections afforded to clients of Numis or for providing advice in relation to the Partial Offer, the contents of this Announcement or any other matter referred to in this Announcement.

Further information

THIS ANNOUNCEMENT IS PROVIDED FOR INFORMATION PURPOSES ONLY. IT IS NOT INTENDED TO, AND DOES NOT, CONSTITUTE OR FORM ANY PART OF, AN OFFER, INVITATION OR THE SOLICITATION OF AN OFFER TO PURCHASE, OTHERWISE ACQUIRE, SUBSCRIBE FOR, EXCHANGE, SELL OF OTHERWISE DISPOSE OF ANY SECURITIES, OR THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION, NOR WILL THERE BE ANY SALE, ISSUANCE, EXCHANGE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW.

THE PARTIAL OFFER WILL BE MADE SOLELY BY MEANS OF THE OFFER DOCUMENT, WHICH WILL CONTAIN THE FULL TERMS AND CONDITIONS OF THE PARTIAL OFFER, AND, IN THE CASE OF CAPITAL & REGIONAL SHARES HELD IN CERTIFICATED FORM, THE FORM OF ACCEPTANCE. CAPITAL & REGIONAL SHAREHOLDERS ARE ADVISED TO READ CAREFULLY THE OFFER DOCUMENT AND THE FORM OF ACCEPTANCE (IF APPLICABLE), ONCE THEY HAVE BEEN DISPATCHED. ANY DECISION, ACCEPTANCE OR APPROVAL IN RELATION TO PROPOSED TRANSACTION SHOULD BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN THE OFFER DOCUMENT, THE FORM OF ACCEPTANCE (IF APPLICABLE) AND THE PROSPECTUS.

This Announcement does not constitute a prospectus or prospectus equivalent document.

This Announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for, securities, nor is it a solicitation of any vote or approval in any jurisdiction, nor will there be any purchase or transfer of the securities referred to in this Announcement in any jurisdiction in contravention of applicable law or regulation.

Restricted Jurisdictions

The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom and South Africa may be restricted by law and therefore any persons into whose possession this Announcement comes who are subject to the laws of any jurisdiction other than the United Kingdom and South Africa should inform themselves about and observe any applicable requirements. In particular, the ability of persons who are not resident in the United Kingdom or South Africa to vote their Capital & Regional Shares with respect to the Resolutions at the Capital & Regional General Meeting or to execute and deliver Forms of Proxy appointing another to vote at the Capital & Regional General Meeting on their behalf may be affected by the laws of the relevant jurisdictions in which they are located.

Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Proposed Transaction disclaim any responsibility or liability for the violation of such restrictions by any person.

The availability of the Partial Offer and the release, publication and distribution of this Announcement in jurisdictions other than the United Kingdom and South Africa may be restricted by the laws of those jurisdictions and therefore persons who are not resident in the United Kingdom or South Africa into whose possession this Announcement comes should inform themselves about and observe any such restrictions.

This Announcement has been prepared for the purpose of complying with English law, the rules of the London Stock Exchange, the Listing Rules and the City Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom and/or South Africa.

Unless otherwise determined by Growthpoint or required by the City Code and permitted by applicable law and regulation, the Partial Offer will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction. Accordingly, copies of this Announcement and any documentation relating to the Proposed Transaction are not being, and must not be, directly or indirectly, mailed or otherwise distributed or sent in, into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction where to do so would violate the laws in that jurisdictions as doing so may invalidate any purported acceptance of the Partial Offer.

Further details in relation to Capital & Regional Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom and/or South Africa will be contained in the Offer Document.

Forward-looking statements

This Announcement, oral statements made regarding the Partial Offer, and other information published by Growthpoint and/or Capital & Regional contain statements which are, or may be deemed to be, "forward-looking statements" in respect of the financial condition, results of operations and business of Growthpoint, Capital & Regional and their respective groups, and certain plans and objectives of Growthpoint and Capital & Regional. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Growthpoint and/or Capital & Regional about future events and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The forward-looking statements contained in this document include statements relating to the expected effects of the Partial Offer on Growthpoint and Capital & Regional, the expected timing and scope of the Partial Offer and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "project", "will likely result", "will continue", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Growthpoint and Capital & Regional believe that the expectations reflected in such forward-looking statements are reasonable, Growthpoint and Capital & Regional can give no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. In addition to the information regarding these risks, uncertainties, assumptions and other factors set forth in the public filings made by Capital & Regional and the public filings made by Growthpoint, important risk factors that may cause such a difference include, but are not limited to, (i) the completion of the Partial Offer and Share Subscription on anticipated terms and timing, (ii) legislative, regulatory and economic developments, (ii) the impact of foreign exchange rates, (iii) the performance of the global economy, and (iv) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realisation of forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors.

Neither Growthpoint nor Capital & Regional, nor any of their respective associates or directors, officers or advisers provides any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Each forward-looking statement speaks only as at the date of this Announcement. Other than in accordance with their legal or regulatory obligations (including under the City Code, the Listing Rules, the Disclosure Guidance and Transparency Rules, MAR and the JSE Listing Requirements), none of Growthpoint, the Growthpoint Group, Capital & Regional or the Capital & Regional Group is under, or undertakes, any obligation, and of the foregoing expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

All forward looking statements contained in this Announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast, projection or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Capital & Regional or Growthpoint for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Capital & Regional or Growthpoint.

Disclosure requirements of the City Code

Under Rule 8.3(a) of the City Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

For the purposes of this section (Disclosure requirements of the City Code) and the section (Publication on of this Announcement and availability of hard copies) below of this document, "business day" means a day on which the London Stock Exchange is open for the transaction of business.

Electronic communications

Please be aware that addresses, electronic addresses and certain information provided by Capital & Regional Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Capital & Regional may be provided to Growthpoint during the Offer Period as required under Section 4 of Appendix 4 of the City Code to comply with Rule 2.11(c) of the City Code.

Publication of this Announcement and availability of hard copies

A copy of this Announcement and the display documents required to be published pursuant to Rule 26.1 and Rule 26.2 of the City Code will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Capital & Regional's website at www.capreg.com and on Growthpoint's website at www.growthpoint.co.za by no later than 12 noon on the business day following the date of this Announcement. For the avoidance of doubt, neither the contents of those websites are incorporated into, or form part of, this Announcement.

Subject to certain restrictions relating to persons in any Restricted Jurisdiction, Capital & Regional Shareholders may request a hard copy of this Announcement by contacting:

(a) Equiniti Limited (Capital & Regional's UK registrar) on 0333-207-5963 or +44 121-415-0088 (if calling from outside the UK). Lines are open from 8.30 a.m. to 5.30 p.m. (UK time) Monday to Friday (excluding English and Welsh public holidays). Calls to the helpline from outside the UK will be charged at the applicable international rate. Please note that calls may be recorded and randomly monitored for security and training purposes. Please note that Equiniti Limited cannot provide advice on the merits of the Proposed Transaction nor give financial, tax, investment or legal advice; or

(b) Java Capital Trustees and Sponsors (Capital & Regional's JSE sponsor) on +27 (0)11 722 3050 during normal business hours (8:00 a.m. to 5.00 p.m. (South Africa time)) Monday to Friday. Please note that Java Capital Trustees and Sponsors cannot provide advice on the merits of the Proposed Transaction nor give financial, tax, investment or legal advice.

If you have received this Announcement in electronic form, copies of this Announcement and any document or information incorporated by reference into this document will not be provided unless such a request is made. Capital & Regional Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Partial Offer or the Share Subscription should be in hard copy form.

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Time

All times shown in this Announcement are London times, unless otherwise stated.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM, ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

17 October 2019

RECOMMENDED PARTIAL OFFER

and

PROPOSED SHARE SUBSCRIPTION

by Growthpoint Properties Limited

in

Capital & Regional plc

1. Introduction

Further to the announcements on 11 September and 9 October 2019 the directors of Growthpoint Properties Limited ("Growthpoint") and the directors of Capital & Regional plc ("Capital & Regional") are pleased to announce that they have reached agreement on the terms of a recommended partial offer to be made by Growthpoint, either directly or indirectly (through 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) (each a "Growthpoint Nominee"), to acquire 219,786,924 Capital & Regional Shares, representing approximately 30.3 per cent. of the issued ordinary share capital of Capital & Regional (the "Partial Offer").

In addition, the Growthpoint Directors and Capital & Regional Directors have agreed the terms on which Growthpoint (or a Growthpoint Nominee(s)) will make a subscription for 311,451,258 new Capital & Regional Shares (the "Subscription Shares"), 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, at a price of 25 pence per Subscription Share (the "Share Subscription" and, together with the Partial Offer, the "Proposed Transaction"). The Partial Offer and the Share Subscription are inter-conditional.

The Offer Document, the Form of Acceptance in connection with the Partial Offer, and the Prospectus (subject to approval of the FCA) and the Form of Proxy for use at the Capital & Regional General Meeting to be convened in connection with the passing of the Resolutions required in connection with the Proposed Transaction, will be posted to Capital & Regional Shareholders in due course and, in any event, (except with the consent of the Panel) within 28 calendar days after the date of this Announcement, other than to Non-UK / Non-South African Capital & Regional Shareholders in the circumstances permitted under the City Code or in accordance with any dispensation given by the Panel.

2. The Partial Offer

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

The Partial Offer, which will be subject to the terms and conditions set out in Appendix I to this Announcement and to the full terms and conditions to be set out in the Offer Document and the Form of Acceptance (if applicable), will be made on the following basis:

33 pence in cash

for each Capital & Regional 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 £239.7 million and (ii) the Capital & Regional Shares subject to the Partial Offer at approximately £72.5 million.

The Offer Price represents a premium of approximately:

·; 100 per cent. to the undisturbed closing price per Capital & Regional Share of 16.5 pence on 10 September 2019 (being the last Business Day prior to the announcement of Growthpoint's possible partial offer and subscription for new shares in Capital & Regional);

·; 124 per cent. to the volume-weighted average price of 14.7 pence per Capital & Regional Share for the three-month period ended 10 September 2019 (being the last Business Day prior to the announcement of Growthpoint's possible partial offer and subscription for new shares in Capital & Regional); and

·; 85 per cent. to the volume-weighted average price of 17.8 pence per Capital & Regional Share for the six-month period ended 10 September 2019 (being the last Business Day prior to the announcement of Growthpoint's possible partial offer and subscription for new shares in Capital & Regional).

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

i) if Capital & Regional Shareholders accept (or procure the acceptance of) the Partial Offer in respect of approximately 30.3 per cent. or less of their registered holdings, then their acceptances will be met in full; and

ii) if Capital & Regional Shareholders accept (or procure the acceptance of) the Partial Offer in respect of more than approximately 30.3 per cent. of their registered holdings and the total acceptances received from all Capital & Regional Shareholders are in respect of more than 219,786,924 Capital & Regional Shares, each such Capital & Regional Shareholder would have their acceptances in excess of approximately 30.3 per cent. scaled down in the same proportion to the total number of Capital & Regional Shares tendered to the extent necessary to enable Growthpoint (or one or more Growthpoint Nominee) to acquire 219,786,924 Capital & Regional Shares.

If scaling down, as described above, is required in respect of any accepting Capital & Regional 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 Subscription Shares are issued, Growthpoint will hold Capital & Regional Shares carrying more than 50 per cent. of the voting rights of Capital & Regional and Growthpoint will be free (subject to Rule 36.3 of the City Code as described immediately below) to acquire further Capital & Regional Shares without incurring any obligation under Rule 9 of the City Code to make a general offer.

Following a successful partial offer, Rule 36.3 of the City Code prevents Growthpoint and any person acting in concert with it from acquiring any interest in the shares of Capital & Regional 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 Capital & Regional.

The Partial Offer will extend to all Capital & Regional Shares unconditionally allotted or issued and fully paid on the date of the Partial Offer and any additional Capital & Regional Shares which are unconditionally allotted or issued and fully paid whilst the Partial Offer remains open for acceptance or by such earlier date as Growthpoint may decide, subject to the City Code.

The Capital & Regional Shares will be acquired pursuant to the Partial Offer fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other interests of any nature whatsoever and together with all rights attaching to them (except for the Interim Dividend (as defined below)).

Except for the Interim Dividend, Growthpoint reserves the right to make an equivalent reduction in the Offer Price if Capital & Regional announces, declares or pays any dividend or makes any other distribution to Capital & Regional Shareholders on or after the date of this Announcement although, in such circumstances, Capital & Regional Shareholders would be entitled to retain any such dividend or other distribution made or paid.

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

The Partial Offer is conditional upon, amongst other things:

·; Growthpoint (or one or more Growthpoint Nominee) receiving valid acceptances (which have not been validly withdrawn) in respect of at least 219,786,924 Capital & Regional Shares (representing approximately 30.3 per cent. of the Capital & Regional Shares in issue as at 16 October 2019 (being the last Business Day prior to the date of this Announcement));

·; Independent Shareholders holding Capital & Regional Shares carrying over 50 per cent. of the voting rights of Capital & Regional held by Independent Shareholders approving the Partial Offer Resolution;

·; the passing of the other Resolutions at the Capital & Regional General Meeting; and

·; Admission of the Subscription Shares.

One of the Resolutions at the Capital & Regional General Meeting will be the Partial Offer Resolution. The passing of this resolution by Independent Shareholders is a condition of the Partial Offer. For this resolution to be passed, Capital & Regional Shareholders, who are independent of Growthpoint and persons acting in concert with Growthpoint, holding more than 50 per cent. of the voting rights in Capital & Regional held by Independent Shareholders must vote in favour of the resolution. If this resolution or any of the other Resolutions are not passed, the Partial Offer will lapse. All Capital & Regional 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 the Prospectus and paragraph 17 below.

The Panel has been consulted and has agreed to waive the requirement for Growthpoint to make a general offer under Rule 9 of the City Code in cash for ordinary shares in the Company which might otherwise arise as a result of the Proposed Transaction, subject to the Partial Offer Resolution being passed on a poll of the Independent Shareholders.

3. The Share Subscription

In connection with the Partial Offer, Growthpoint and Capital & Regional have entered into a subscription agreement pursuant to which Growthpoint (or any Growthpoint Nominee) has agreed to subscribe for the Subscription Shares at a price of 25 pence per Subscription Share. If (i) valid acceptances are received in respect of all of the 219,786,924 Capital & Regional Shares which are the subject of the Partial Offer (ii) the Partial Offer is approved by Independent Shareholders holding shares carrying over 50 per cent. of the voting rights of Capital & Regional held by Independent Shareholders by voting in favour of the Partial Offer Resolution and (iii) the Share Subscription completes in accordance with the terms of the Share Subscription Agreement, Growthpoint and any Growthpoint Nominee(s) would hold 531,238,182 Capital & Regional Shares, representing, in aggregate approximately 51.2 per cent. of the enlarged issued ordinary share capital of Capital & Regional immediately following completion of the Proposed Transaction.

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

·; the Partial Offer becoming unconditional in all respects (save only for admission of the Subscription Shares); and

·; Capital & Regional Shareholders approving the Resolutions.

The Share Subscription will take place upon Admission and will provide Capital & Regional with proceeds equal to £77.9 million (before costs).

Pursuant to the Share Subscription Agreement, Capital & Regional 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 Capital & Regional's existing debt arrangements and to apply the balance to assist in funding Capital & Regional's capital expenditure; and (ii) for so long as Growthpoint and its Nominee(s) hold in aggregate an interest in at least 35 per cent. of the voting rights in Capital & Regional, 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, Capital & Regional 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. LTV; and (c) implement Growthpoint's treasury policy (subject to such commercial realities as may be relevant to Capital & Regional and the United Kingdom) provided that such obligations will continue for so long as Growthpoint and its Nominee(s) hold in aggregate an interest in at least 35 per cent. of the voting rights in Capital & Regional.

If UK Admission does not occur for any reason, including in the event that the Resolutions are not approved by Capital & Regional Shareholders, the Partial Offer will lapse. If the Partial Offer lapses, it will cease to be capable of further acceptance. Capital & Regional Shareholders who have already accepted the Partial Offer shall then cease to be bound by acceptances delivered on or before the date on which the Partial Offer lapses.

4. Background to and reasons for the Proposed Transaction

The Proposed Transaction forms part of Growthpoint's internationalisation strategy which has allowed Growthpoint to expand successfully outside of South Africa into Australia and Eastern Europe.

Growthpoint is a property investor with a long term outlook and views the United Kingdom as a desirable investment destination despite current events linked to Brexit. In particular, certain parts of the UK retail real estate market currently represent an attractive investment opportunity with strong long term fundamentals. In Growthpoint's view, community centres such as those owned by Capital & Regional, which serve the daily 'needs' rather than the 'wants' of underlying communities, have an increasingly important role to play in local economies.

Growthpoint's investment philosophy is to invest into existing property platforms, where it backs incumbent management teams and provides them with ongoing access to capital to pursue growth opportunities, as well as strategic insight and planning, governance and controls and financial and treasury discipline. Core to its investment philosophy, Growthpoint seeks opportunities where it can invest in companies through subscriptions for new shares, thereby providing fresh capital to such companies to take advantage of growth opportunities in the markets in which they operate. Since Growthpoint started this investment approach, it has provided approximately £1.0 billion of capital to investee companies and their management teams to pursue growth opportunities.

Growthpoint believes that Capital & Regional represents an attractive investment opportunity and a strong platform for the UK real estate market. Growthpoint believes the Proposed Transaction will support and complement the execution of Capital & Regional's strategy, in particular to the continued transition of its portfolio of shopping centres from a fashion led 'wants' based offering to a more sustainable community led 'needs' offering. Capital & Regional's underlying shopping centres have leading positions in the various retail markets they serve. They are concentrated in the attractive London and South East England markets and have a sustainable income profile with affordable rents averaging £15 per square foot.

Growthpoint's offer has been structured as a partial offer under the City Code together with a Share Subscription to enable Capital & Regional Shareholders to:

·; monetise a meaningful stake in Capital & Regional of approximately 30.3 per cent. of their current shareholding at a significant premium and potentially more than this should they wish to do so (subject, amongst other things, to sufficient acceptances being received in aggregate to satisfy the acceptance condition set out in paragraph 1 of Part A of Appendix I below); and

·; participate in the future value of a recapitalised Capital & Regional with Growthpoint as an anchor shareholder.

Central to Growthpoint's rationale for investing in Capital & Regional is its desire to ensure that Capital & Regional is adequately capitalised to participate in the potential consolidation of the UK real estate market, similar to what Growthpoint Properties Australia Limited ("GOZ") did following Growthpoint's investment. The Share Subscription, assuming it is approved by Capital & Regional Shareholders (and the Proposed Transaction completes), will provide Capital & Regional with proceeds equal to approximately £77.9 million (before costs). The proceeds will be applied to reduce Capital & Regional's debt and to fund investment in Capital & Regional's existing portfolio.

Growthpoint believes Capital & Regional has a strong management team which is well placed to execute the combined strategy of Growthpoint and Capital & Regional for Capital & Regional and take advantage of current opportunities in the UK retail real estate market.

5. Recommendation of the Proposed Transaction by Capital & Regional Directors

The Capital & Regional Directors, who have been so advised by Numis and J.P. Morgan Cazenove as to the financial terms of the Partial Offer, consider the terms of the Partial Offer to be fair and reasonable. Accordingly, the Capital & Regional Directors intend to recommend unanimously that Capital & Regional Shareholders accept (or procure the acceptance of) the Partial Offer which each of the Capital & Regional Directors (other than Wessel Hamman who holds no Capital & Regional Shares), including for these purposes the irrevocable undertakings given by Mstead Limited and PDI Investment Holdings Limited (which are associate companies of Louis Norval), has irrevocably undertaken to do (or procure to be done) in respect of an aggregate of up to 62,403,412 Capital & Regional Shares (which represents 44.6 per cent. of their respective holdings and, in aggregate, 28.4 per cent. of the aggregate number of Capital & Regional Shares which are subject to the Partial Offer). In providing advice to the Capital & Regional Directors, Numis and J.P. Morgan Cazenove have taken into account the commercial assessments of the Capital & Regional Directors.

The Capital & Regional Directors, who have been so advised by Numis and J.P. Morgan Cazenove, consider the waiver granted by the Panel of any obligation that would otherwise arise under Rule 9 as a result of the Partial Offer and the Share Subscription to be fair and reasonable and in the best interests of Independent Shareholders and the Company as a whole. Accordingly, the Capital & Regional Directors intend to recommend unanimously that Capital & Regional Shareholders vote (or procure the vote) in favour of the Partial Offer Resolution (being a single resolution to approve the Partial Offer and the Whitewash) and the resolutions to enable the Share Subscription to proceed at the Capital & Regional General Meeting to be convened in due course, which each Capital & Regional Director (other than Wessel Hamman who holds no Capital & Regional Shares) has irrevocably undertaken to do (or procure to be done) in respect of all of the Capital & Regional Shares in which they have a beneficial interest, and including for these purposes the irrevocable undertakings given by Mstead Limited and PDI Investment Holdings Limited (which are associate companies of Louis Norval), amounting, in aggregate, to 140,073,383 Capital & Regional Shares, representing approximately 19.3 per cent. of the issued ordinary share capital of Capital & Regional. In providing advice to the Capital & Regional Directors, Numis and J.P. Morgan Cazenove have taken into account the commercial assessments of the Capital & Regional Directors.

Numis is providing independent financial advice to the Capital & Regional Directors for the purpose of Rule 3 of the City Code.

Whilst the irrevocable undertakings given by Mstead Limited and PDI Investment Holdings Limited are in respect of more than the approximately 30.3 per cent. interest which Growthpoint is seeking to acquire pursuant to the Partial Offer, Growthpoint will only acquire shares in excess of approximately 30.3 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 Capital & Regional Shareholders in excess of the approximately 30.3 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 set out in further detail in paragraph 3 of this Announcement.

Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.

6. Background to and reasons for the recommendation of the Capital & Regional Directors

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. The Capital & Regional Board believes that Capital & Regional is well positioned to capitalise on the changes taking place in the industry by focusing on affordable rents, convenience locations which serves the daily 'needs' rather than the 'wants' of underlying communities and careful deployment of capital expenditure.

As part of Capital & Regional's strategy, asset masterplans have been established and designed to provide a blueprint to reposition the retail into the community model and maximise the value of the real estate by unlocking value through the re-use or development of the upper parts into residential, hotel, offices or other uses. These masterplans provide a pipeline of a wide variety of capital expenditure programmes which have been undertaken across the portfolio to improve the quality and relevance of its shopping centres. Capital & Regional intends capital expenditure to be accretive to future income and value. Recent examples include investments at Wood Green for a Travelodge hotel, capital expenditure at Walthamstow to secure the likes of Lidl and The Gym Group as tenants, and funds to secure a 25 year cinema lease at Hemel Hempstead with Empire Cinemas. Against this programme of ongoing investment, market conditions have become increasingly challenging, with physical retailing venues being impacted by not just economic uncertainty but also by the continued impacts of technology. This places more emphasis on the need to accelerate the repositioning of the centres via the capex programme which, given the expansion in cap rates, carries the risk of increasing leverage to the detriment of the balance sheet despite being accretive to income. Alongside this, many retailers have faced difficult trading conditions coupled with increases in business rates, employment costs and a devaluation in sterling currency placing pressure on their capital structures, resulting in multiple restructurings or failures including both CVAs and administrations. Four CVA processes have impacted Capital & Regional in 2019 being Debenhams, Arcadia, Monsoon/Accessorize and Select.

Despite the wider market pressures impacting the shopping centre industry, Capital & Regional'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 97.0 per cent. In addition, Capital & Regional's contracted rent position remains robust at £61.1 million at 30 June 2019 down only 1.9 per cent. in comparison to 30 June 2018 and for the equivalent period net rental income is down 3.1 per cent. in comparison to 30 June 2018. This resilience is a result of Capital & Regional's strategy, focusing on convenience and community-based shopping centres with affordable rents and a diversified tenant base.

Despite Capital & Regional's relatively resilient income position, there has been significant pressure on Capital & Regional's property valuations which is a feature consistent across the UK shopping centre industry. The impact has been most acute outside of London with Capital & Regional'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 Capital & Regional's portfolio in the first three quarters of 2019 compared to year-end in 2018:

Property portfolio valuation

As at 30 September 2019, Capital & Regional'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. Capital & Regional 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, Capital & Regional 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 would see this increase to 54 per cent. on a pro-forma basis. This has placed pressure on Capital & Regional's ability to continue investment in capital expenditure and maintain at least the minimum level of dividends required to be paid under the UK REIT regime. Without the injection of new equity there is a risk such pressure may increase further and enforce greater constraints on the business such that it may be necessary to take actions that address short term concerns but are not in the longer term interests of the Company.

The Capital & Regional Board believes that the Company's focus on retailers, categories and services where consumers prefer, or have, to shop physically and where online retail economics are challenging, combined with the investment it is making in the customer journey and positioning, are showing positive results, as demonstrated by the operation metrics in its recent half year results. The Capital & Regional Board also believes that the continuation of this programme is key to maintaining the relevance and income potential of Capital & Regional's shopping centres.

To this end, Capital & Regional's strategy includes the repositioning and remerchandising of its assets with a pipeline of identified capital expenditure projects which are critical to ensuring the portfolio remains relevant for tenants and shoppers alike, and therefore enables it to maintain occupancy and income. Given Capital & Regional's current high level of leverage and potential for further downward movements in valuations, Capital & Regional is unable to commit to funding this identified capital expenditure programme without additional balance sheet flexibility given headroom under its financial covenants.

Capital & Regional believes that the Proposed Transaction with Growthpoint provides a long-term strategic partner to support Capital & Regional's strategy with a significant amount of new equity committed to deleverage and strengthen the balance sheet such that it can fully commit to its pipeline of capital expenditure projects with the target of enhancing future rental income and improving Capital & Regional's competitive positioning. The Capital & Regional Directors believe that this equity injection will allow Capital & Regional to prosper despite difficult market conditions with a strengthened financial position that will allow the Company 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 £77.9 million (before costs) at a significant premium to the undisturbed share price.

Capital & Regional believes that a successful conclusion of the Proposed Transaction will position it as a business with:

·; an appropriate capital structure;

·; a platform which will facilitate its experienced management team to take advantage of the market distress and therefore opportunity;

·; 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

·; appropriate corporate governance and a relationship agreement in place to ensure minority shareholders are protected.

In light of the structural headwinds the retail sector is currently experiencing and the potential impact those may have on Capital & Regional's asset values, as well as the current high LTV ratio, the Capital & Regional Board believes that in order to maintain adequate financing flexibility whilst being able to continue with selective investment over the short to medium term, the Proposed Transaction is the best option available to Capital & Regional.

As a result of the Share Subscription, the Company's pro forma net LTV (as at 30 September 2019) will reduce from 54 per cent. to approximately 44 per cent. (exclusive of costs and assuming all the proceeds from the Share Subscription are used to reduce debt). Notwithstanding the cash injection from the Share Subscription, Capital & Regional is making positive inroads in relation to the realisation of returns from its residential schemes at Wood Green and Walthamstow. At Wood Green, Capital & Regional has conditionally exchanged contracts on the sale of non-core land to a residential developer for £5 million, in line with the book value. Proceeds are expected to be realised in Q4 2019. At Walthamstow, Capital & Regional 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. Capital & Regional 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 Capital & Regional 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 Capital & Regional 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 Capital & Regional against a worse than anticipated scenario thereby protecting shareholder value and providing a significant liquidity opportunity for Capital & Regional Shares.

The Capital & Regional Board therefore believes that the recommended Proposed Transaction will allow Capital & Regional to achieve the best long-term outcome for the Capital & Regional Shareholders. The Proposed Transaction will allow the executive management team to continue to pursue its strategy by deploying selective capital expenditure to improve further the relevance and performance of its assets, whilst improving balance sheet strength to absorb future CVAs and tenant administrations which may occur as a result of the uncertain UK economic backdrop and structural headwinds facing the retail industry whilst at the same time providing a capital structure from which it can consider accretive acquisitions.

7. Irrevocable undertakings and letter of intent

Peens Family Holdings

In addition to the irrevocable undertakings from each of the Directors, Mstead Limited and PDI Investment Holdings Limited referred to in paragraph 5 above, the Peens Family Holdings have entered into irrevocable undertakings to:

(a) accept (or procure the acceptance of) the Partial Offer at the Offer Price in respect of 29,338,274 Capital & Regional Shares which represent 55.3 per cent. of their holdings and 13.3 per cent. of the aggregate number of Capital & Regional Shares which are subject to the Partial Offer; and

(b) vote (or procure the vote) in favour of the Resolutions at the Capital & Regional General Meeting in respect of all of the Capital & Regional Shares in which they are interested, which represent approximately 7.3 per cent. of the Capital & Regional Shares in issue on 16 October 2019 (being the last Business Day prior to the date of this Announcement).

Whilst the irrevocable undertakings given by the Peens Family Holdings are in respect of more than the approximately 30.3 per cent. interest which Growthpoint is seeking to acquire pursuant to the Partial Offer, Growthpoint will only acquire shares in excess of approximately 30.3 per cent. from the Peens Family Holdings to the extent necessary to ensure the acceptance condition is met. If acceptances are received from Capital & Regional Shareholders in excess of the approximately 30.3 per cent. required, then the Peens Family Holdings will have their acceptances scaled back in accordance with the terms of the Partial Offer set out in further detail in paragraph 3 of this Announcement.

Other Capital & Regional Shareholders

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 2016 Relationship Agreement) has entered into an irrevocable undertaking to:

(a) accept (or procure the acceptance of) the Partial Offer at the Offer Price in respect of 34,281,156 Capital & Regional 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 Capital & Regional Shares which are subject to the Partial Offer; and

(b) vote (or procure the vote) in favour of the Resolutions at the Capital & Regional General Meeting in respect of all of the Capital & Regional Shares in which they are interested, which, in aggregate, represent approximately 14.0 per cent. of the Capital & Regional Shares in issue on 16 October 2019 (being the last Business Day prior to the date of this Announcement).

Growthpoint has therefore received irrevocable undertakings to:

(a) accept (or procure the acceptance of) the Partial Offer at the Offer Price in respect of a total of 126,022,842 Capital & Regional Shares, representing, in aggregate, approximately 17.3 per cent. of the issued share capital of Capital & Regional as at 16 October 2019 (being the last Business Day prior to the date of this Announcement) and 57.3 per cent. of the aggregate number of Capital & Regional Shares which are the subject of the Partial Offer; and

(b) vote (or procure the vote) in favour of the Resolutions at the Capital & Regional General Meeting in respect of a total of 294,828,977 Capital & Regional Shares, representing, in aggregate, approximately 40.6 per cent. of the issued share capital of Capital & Regional as at 16 October 2019 (being the last Business Day prior to the date of this Announcement).

Growthpoint has also received a letter of intent from Henderson Global Investors Limited to

(a) accept (or procure the acceptance of) the Partial Offer at the Offer Price in respect of 8,372,293 Capital & Regional Shares which represents approximately 30.3 per cent. of its holding and 3.8 per cent. of the aggregate number of Capital & Regional Shares which are subject to the Partial Offer; and

(b) vote (or procure the vote) in favour of the Resolutions at the Capital & Regional General Meeting in respect of all of the Capital & Regional Shares in which it is interested, which represents approximately 3.8 per cent. of the Capital & Regional Shares in issue on 16 October 2019 (being the last Business Day prior to the date of this Announcement).

Further details of these irrevocable undertakings and the letter of intent are set out in Appendix III to this Announcement.

8. 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 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 GOZ, which is separately listed on the Australian Stock Exchange ("ASX") and has a portfolio of 57 Office and Industrial assets valued at A$3.8 billion (£2.1 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$3.4 billion (£1.8 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 (12.4 million square feet) portfolio of 60 properties in Poland and Romania comprising mainly office assets with a combined value of €2.75 billion (£2.4 billion) and has a market capitalisation of £1.8 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.

9. Information on Capital & Regional

Capital & Regional is a UK focused retail property REIT specialising in shopping centres that dominate their catchment, serving the non-discretionary and value orientated needs of the local communities. It has a strong track record of delivering value enhancing retail and leisure asset management opportunities across a portfolio of in-town shopping centres valued at approximately £764 million. Capital & Regional is listed on the main market of the London Stock Exchange and has a secondary listing on the JSE.

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

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

Capital & Regional's property valuations, supported by a valuation report pursuant to the requirements of Rule 29 of the City Code, have been published in this Announcement and will be reproduced in the Prospectus and the Offer Document.

10. Dividends

Subject to the Proposed Transaction becoming unconditional save as to Admission, Capital & Regional plans to announce an interim dividend of 1p per Capital & Regional Share payable to Capital & Regional Shareholders on the register at a date to be determined but that is anticipated to be in advance of Admission and completion of the Partial Offer.

Except for the Interim Dividend Growthpoint reserves the right to make an equivalent reduction in the Offer Price if Capital & Regional announces, declares or pays any dividend or makes any other distribution to Capital & Regional Shareholders on or after the date of this Announcement although, in such circumstances, Capital & Regional Shareholders would be entitled to retain any such other dividend or other distribution paid or made.

11. Financing of the Proposed Transaction

The cash consideration payable by Growthpoint under the terms of the Proposed Transaction will be financed via an amendment and restatement of an existing facility (the "Facility Agreement") with Absa Bank Limited (the "Lender") under which additional commitments have been made available.

In accordance with Rule 2.7(d) of the City Code, Goldman Sachs, as financial adviser to Growthpoint, is satisfied that sufficient resources are available to Growthpoint to satisfy in full the cash consideration payable to (i) Capital & Regional Shareholders pursuant to the terms of the Partial Offer; and (ii) Capital & Regional pursuant to the terms of the Share Subscription.

Under the Facility Agreement, Growthpoint has agreed to a number of restrictions including in relation to its conduct of the Partial Offer including that it shall not, save with the prior written consent of the Lender, which consent shall not be unreasonably withheld or delayed, amend or vary, waive, withdraw, decide not to or fail to enforce, in whole or in part, any material term or condition of the Partial Offer or any Offer Document (as defined in the Facility Agreement) or declare, accept or treat as satisfied, any material condition of the Partial Offer where it is not actually satisfied or has not been complied with unless (i) to the extent required by the City Code, the Panel, the London Stock Exchange or an order of the High Court of Justice in England and Wales or any other applicable law, regulation or body; or (ii) reasonably determined by Growthpoint (acting on the advice of its legal advisers) as being necessary to comply with the requirements of the City Code, the Panel, the London Stock Exchange or an order of the High Court of Justice in England and Wales or any other applicable law, regulation or body.

12. Management, employees, locations and pension schemes

Growthpoint's strategic plans for Capital & Regional

Growthpoint supports Capital & Regional's current strategy and intends to work with the existing Capital & Regional management to develop and implement the strategy following completion of the Proposed Transaction. As the controlling shareholder and strategic investor, Growthpoint intends to provide ongoing support to Capital & Regional in the form of capital, management expertise, governance and control, as well as other best in class practices Growthpoint has developed in the management of its diverse portfolio of assets across South Africa, Australia and Eastern Europe.

Headquarters, fixed assets and research and development

After the completion of the Proposed Transaction, Growthpoint does not intend to make any changes to the locations of Capital & Regional's places of business or the manner in which its assets are deployed, and Capital & Regional will continue to be operated, managed and headquartered in London and Growthpoint does not intend to make any material changes to the headquarter functions. Capital & Regional does not currently have a research and development function and Growthpoint has no plans in this regard.

Management and employees

Growthpoint recognises the expertise and knowledge of Capital & Regional's existing management and employees and believes that they will be a key factor in contributing to the future success of Capital & Regional. Therefore, Growthpoint has no intention to make changes to the continued employment of the employees and management of Capital & Regional or its subsidiaries (including any material change in the conditions of employment or the balance of skills and functions of the employees and management). Further, Growthpoint confirms that the existing contractual and employment rights of employees of Capital & Regional, including accrued pension rights under applicable law, will be safeguarded following completion of the Proposed Transaction.

As a result of the Proposed Transaction, there will be no accelerated vesting or exercise of the outstanding share options or awards under the Capital & Regional Share Plans.

Following completion of the Proposed Transaction, Growthpoint does not intend to make any changes with regard to the agreed employer contributions into Capital & Regional's existing defined contribution pension scheme(s) or the accrual of benefits to existing members to such scheme(s). Capital & Regional does not operate a defined benefit pension scheme.

Capital & Regional Directors

Growthpoint will have the right under the Relationship Agreement, amongst other things, to appoint (i) two directors to the Capital & Regional Board for so long as it holds, directly or indirectly, 20 per cent. or more of the issued voting share capital of Capital & Regional and (ii) one director to the Capital & Regional 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 share of Capital & Regional.

Growthpoint proposes to appoint Norbert Sasse and George Muchanya as its appointed directors. Wessel Hamman shall step down.

Following completion of the Proposed Transaction, the Capital & Regional Board would comprise:

·; Lawrence Hutchings (Chief Executive)

·; Stuart Wetherly (Group Finance Director)

·; Hugh Scott-Barrett (Chairman)

·; Tony Hales (Non-Executive Director)

·; Ian Krieger (Non-Executive Director)

·; George Muchanya (Non-Executive Director)

·; Louis Norval (Non-Executive Director)

·; Norbert Sasse (Non-Executive Director)

·; Laura Whyte (Non-Executive Director)

As previously disclosed the Capital & Regional 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.

None of the statements in this paragraph 12 are "post-offer undertakings" for the purposes of Rule 19.5 of the City Code.

13. Retention of Capital & Regional's admission to the premium listing segment of the Official List

Following the Partial Offer becoming, or being declared, wholly unconditional in accordance with its terms, Capital & Regional will remain an independently managed public company. Growthpoint intends to maintain Capital & Regional's 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.

14. Relationship Agreement

Growthpoint and Capital & Regional have 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 of its nominee(s) hold at least 20 per cent. of the voting rights in Capital & Regional, 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 Capital & Regional 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 Capital & Regional 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 Capital & Regional and will be able to appoint one director to the Capital & Regional 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 Capital & Regional.

For as long as Growthpoint (together with its associates) is entitled to exercise at least 15 per cent. of the voting rights in Capital & Regional, Growthpoint shall have a right in priority (i) to underwrite any rights issue or other pre-emptive offer to Capital & Regional 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 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 Capital & Regional 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 Capital & Regional 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 J.P. Morgan Cazenove or Numis (the "Banks") being able to find a purchaser on best execution terms, Growthpoint (together with is associates) will effect any sale through the Banks with a view to maintaining an orderly market in Capital & Regional 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 Capital & Regional Shares are admitted to trading on the London Stock Exchange's main market for listed securities.

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

15. Other offer-related documents

In addition to the Share Subscription Agreement described in paragraph 3 and the Relationship Agreement described in paragraph 14, Growthpoint and Capital & Regional entered into a confidentiality agreement (the "Confidentiality Agreement") pursuant to which Growthpoint has undertaken to keep confidential information relating to the Capital & Regional 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 Capital & Regional's directors or certain categories of employees subject to certain exceptions. This undertaking will terminate on Admission.

16. Arrangements with Louis Norval and related entities

Given the historic support given by Louis Norval through the capital raisings in 2009, 2013 and 2014 and his agreement to waive his rights under the 2016 Relationship Agreement to participate in the Share Subscription (which will result in his interest in Capital & Regional being diluted to below 15 per cent. of the entire issued share capital), Capital & Regional has agreed to enter in to a new relationship agreement (the "New Relationship Agreement") with Homestead Group Holdings Limited ("Homestead") to take effect upon completion of the Proposed Transaction. The New Relationship Agreement will provide that, for so long as Homestead, PDI Investment Holdings Limited and Mstead Limited and any wholly-owned subsidiary of Homestead (the "Shareholder 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:

(a) Homestead will retain its right to appoint a director to the board of Capital & Regional; and

(b) 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.

Growthpoint has given its consent to the New Relationship Agreement.

17. Offer Document, Form of Acceptance, Prospectus and Form of Proxy

The Partial Offer will be subject to the Conditions and the further terms set out or referred to in Appendix I to this Announcement and in the Offer Document together with, for Capital & Regional Shares held in certificated form, the Form of Acceptance, when issued. The Offer Document will contain important information on the Partial Offer and on how Capital & Regional Shareholders may accept it.

Capital & Regional will be required to produce a prospectus in connection with the issue of the Subscription Shares and their admission to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. The Prospectus will also contain notice of the Capital & Regional General Meeting to be convened in due course to propose the Resolutions required to be passed to effect the Proposed Transaction, as well as information as to how Capital & Regional Shareholders may attend and vote, in person or by proxy, at the Capital & Regional General Meeting.

It is expected that the Offer Document, the Prospectus (subject to approval of the FCA) and the Form of Proxy will be posted in due course and, in any event, (except with the consent of the Panel) within 28 calendar days from the date of this Announcement. The Offer Document, the Prospectus and the Form of Proxy will be made available to all Capital & Regional Shareholders, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at no charge to them on Capital & Regional's website at www.capreg.com and Growthpoint's website at www.growthpoint.co.za.

All Capital & Regional Shareholders are urged to read the Offer Document and the Prospectus when published and/or received.

18. Admission to the Official List and to trading on the London Stock Exchange

Application will be made to the FCA and the London Stock Exchange for the Subscription Shares to be admitted to the Official List and to trading on the London Stock Exchange's market for listed securities respectively. Application will also be made to the JSE for the Subscription Shares to be admitted to listing and to trading on the Main Board of the JSE. It is expected that Admission will become effective and that dealings for normal settlement in the Subscription Shares will commence on the London Stock Exchange at 8.00 a.m. and on the JSE at 9.00 a.m. on the date on which the Partial Offer becomes, or is declared, wholly unconditional in accordance with its terms.

19. Capital & Regional Shareholders outside the United Kingdom or South Africa

The availability of the Partial Offer to persons not resident in, and not citizens of, the United Kingdom or South Africa may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens.

Persons who are not resident in, or not citizens of, the United Kingdom or South Africa should inform themselves about, and observe, any applicable legal or regulatory requirements of their jurisdictions. Non-UK / Non-South African Capital & Regional Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

Further details in relation to Non-UK / Non-South African Capital & Regional Shareholders will be contained in the Offer Document.

20. Disclosures of interests

As at the close of business on 16 October 2019, being the last practicable date prior to the publication of this Announcement, the interests or short positions in, or rights to subscribe for, relevant securities (within the meaning of the City Code) of Capital & Regional held by the Growthpoint Directors and their close relatives and related trusts were as follows:

As at the close of business on 15 October 2019, being the last practicable date prior to the publication of this Announcement, the following persons acting in concert with Growthpoint (within the meaning of the City Code), were interested, directly or indirectly, in the following Capital & Regional relevant securities:

Save as disclosed in this Announcement and except for the irrevocable undertakings mentioned in paragraph 7 above, neither Growthpoint nor any of its officers nor, so far as the Growthpoint Directors are aware, any person acting in concert with Growthpoint:

·; has any interest in, or right to subscribe for, relevant securities of Capital & Regional;

·; had any short position in (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, relevant securities of Capital & Regional;

·; had procured an irrevocable commitment or letter of intent to accept the Partial Offer in respect of relevant securities of Capital & Regional; or

·; had borrowed or lent any relevant securities of Capital & Regional Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the City Code).

Save for the Share Subscription Agreement and as disclosed above, no arrangement exists with Growthpoint or any person acting in concert with Growthpoint in relation to Capital & Regional Shares. For these purposes, an "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to Capital & Regional Shares which may be an inducement to deal or refrain from dealing in such securities.

21. Documents published on a website

The following documents will promptly and, in any event, by no later than 12 noon on the Business Day following the date of this Announcement, be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Capital & Regional's website at www.capreg.com and Growthpoint's website at www.growthpoint.co.za until the end of the Offer Period:

·; this Announcement;

·; the irrevocable undertakings and the letter of intent referred to in paragraph 7 above and described in Appendix III to this Announcement;

·; the Share Subscription Agreement in connection with the Share Subscription referred to in paragraph 3 above;

·; the Facility Agreement referred to in paragraph 11 above and any other any documents relating to the financing of the Proposed Transaction required to be published pursuant to Rule 26 of the City Code;

·; the Relationship Agreement referred to in paragraph 14 above; and

·; the Confidentiality Agreement referred to in paragraph 15 above.

Neither Growthpoint nor Capital & Regional's website should be taken to form part of this Announcement.

22. General

The Partial Offer will be made on the terms and subject to the Conditions and further terms set out in Appendix I to this Announcement. The sources of information and bases of calculation contained in this Announcement are set out in Appendix II. Details of the irrevocable undertakings received by Growthpoint and given by the Capital & Regional Directors and by the other Capital & Regional Shareholders and the letter of intent by another Capital & Regional Shareholder are set out in Appendix III. Certain definitions and terms used in this Announcement are set out in Appendix IV. Property valuation reports for Capital & Regional (as at 30 September 2019) are set out in Appendix V.

In the event that Capital & Regional's property portfolio was to be sold at the valuations contained in the valuation reports set out in Appendix V, any gains realised on such disposals may be subject to taxation in the UK. Generally, disposals by a UK-REIT of assets held for the purpose of a property rental business should be exempt from UK corporation tax, however there are specific rules which can result in assets held as part of the property rental business being subject to tax on disposal (for example when a property is materially developed and sold within three years of completion of that development). In connection with the Proposed Transaction it is not contemplated that the aforementioned liability to taxation will crystallise.

For the purposes of Rule 29.5 of the City Code, the Capital & Regional Board confirms that CBRE has confirmed to it that an updated valuation of Capital & Regional's property portfolio included in the CBRE Valuation Report as at the date of this Announcement would not be materially different to the valuation contained in the CBRE Valuation Report.

For the purposes of Rule 29.5 of the City Code, the Capital & Regional Board confirms that Knight Frank has confirmed to it that an updated valuation of Capital & Regional's property portfolio included in the Knight Frank Valuation Report as at the date of this Announcement would not be materially different to the valuation contained in the Knight Frank Valuation Report.

Each of Goldman Sachs, Numis, J.P. Morgan Cazenove, CBRE and Knight Frank has given and not withdrawn its consent to the publication of this Announcement with the inclusion herein of the references to its opinions and names in the form and context in which it is included.

Enquiries:

Goldman Sachs International ("Goldman Sachs"), which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the Financial Conduct Authority ("FCA") and the PRA in the United Kingdom, is acting as financial adviser to Growthpoint and no one else in connection with the matters described in this Announcement and will not be responsible to anyone other than Growthpoint for providing the protections afforded to clients of Goldman Sachs, or for giving advice in connection with the matters described in this Announcement or any matter referred to herein. Neither Goldman Sachs nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Goldman Sachs in connection with this Announcement or any matter referred to herein.

J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised by the PRA and regulated by the PRA and the FCA in the United Kingdom. J.P. Morgan Cazenove is acting exclusively as financial adviser to Capital & Regional and no-one else in connection with the matters set out in this Announcement and will not regard any other person as its client in relation to matters set out in this Announcement and will not be responsible to anyone other than Capital & Regional for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, or for providing advice in relation to the contents of this Announcement or any other matter referred to in this Announcement. Numis Securities Limited ("Numis"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Capital & Regional and no-one else in connection with the Partial Offer and any other matters referred to in this Announcement, and will not regard any other person as its client in relation to such matters and will not be responsible to anyone other than Capital & Regional for providing the protections afforded to clients of Numis or for providing advice in relation to the Partial Offer, the contents of this Announcement or any other matter referred to in this Announcement.

Further information

THIS ANNOUNCEMENT IS PROVIDED FOR INFORMATION PURPOSES ONLY. IT IS NOT INTENDED TO, AND DOES NOT, CONSTITUTE OR FORM ANY PART OF, AN OFFER, INVITATION OR THE SOLICITATION OF AN OFFER TO PURCHASE, OTHERWISE ACQUIRE, SUBSCRIBE FOR, EXCHANGE, SELL OF OTHERWISE DISPOSE OF ANY SECURITIES, OR THE SOLICITATION OF ANY VOTE OR APPROVAL IN ANY JURISDICTION, NOR WILL THERE BE ANY SALE, ISSUANCE, EXCHANGE OR TRANSFER OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAW.

THE PARTIAL OFFER WILL BE MADE SOLELY BY MEANS OF THE OFFER DOCUMENT, WHICH WILL CONTAIN THE FULL TERMS AND CONDITIONS OF THE PARTIAL OFFER, AND, IN THE CASE OF CAPITAL & REGIONAL SHARES HELD IN CERTIFICATED FORM, THE FORM OF ACCEPTANCE. CAPITAL & REGIONAL SHAREHOLDERS ARE ADVISED TO READ CAREFULLY THE OFFER DOCUMENT AND THE FORM OF ACCEPTANCE (IF APPLICABLE), ONCE THEY HAVE BEEN DISPATCHED. ANY DECISION, ACCEPTANCE OR APPROVAL IN RELATION TO THE PROPOSED TRANSACTION SHOULD BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN THE OFFER DOCUMENT, THE FORM OF ACCEPTANCE (IF APPLICABLE) AND THE PROSPECTUS.

This Announcement does not constitute a prospectus or prospectus equivalent document.

This Announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for, securities, nor is it a solicitation of any vote or approval in any jurisdiction, nor will there be any purchase or transfer of the securities referred to in this Announcement in any jurisdiction in contravention of applicable law or regulation.

Restricted Jurisdictions

The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom and South Africa may be restricted by law and therefore any persons into whose possession this Announcement comes who are subject to the laws of any jurisdiction other than the United Kingdom and South Africa should inform themselves about and observe any applicable requirements. In particular, the ability of persons who are not resident in the United Kingdom or South Africa to vote their Capital & Regional Shares with respect to the Resolutions at the Capital & Regional General Meeting or to execute and deliver Forms of Proxy appointing another to vote at the Capital & Regional General Meeting on their behalf may be affected by the laws of the relevant jurisdictions in which they are located.

Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Proposed Transaction disclaim any responsibility or liability for the violation of such restrictions by any person.

The availability of the Partial Offer and the release, publication and distribution of this Announcement in jurisdictions other than the United Kingdom and South Africa may be restricted by the laws of those jurisdictions and therefore persons who are not resident in the United Kingdom or South Africa into whose possession this Announcement comes should inform themselves about and observe any such restrictions.

This Announcement has been prepared for the purpose of complying with English law, the rules of the London Stock Exchange, the Listing Rules and the City Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom and/or South Africa.

Unless otherwise determined by Growthpoint or required by the City Code and permitted by applicable law and regulation, the Partial Offer will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction. Accordingly, copies of this Announcement and any documentation relating to the Proposed Transaction are not being, and must not be, directly or indirectly, mailed or otherwise distributed or sent in, into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction where to do so would violate the laws in that jurisdictions as doing so may invalidate any purported acceptance of the Partial Offer.

Further details in relation to Capital & Regional Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom and/or South Africa will be contained in the Offer Document.

Forward-looking statements

This Announcement, oral statements made regarding the Partial Offer, and other information published by Growthpoint and/or Capital & Regional contain statements which are, or may be deemed to be, "forward-looking statements" in respect of the financial condition, results of operations and business of Growthpoint, Capital & Regional and their respective groups, and certain plans and objectives of Growthpoint and Capital & Regional. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Growthpoint and/or Capital & Regional about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The forward-looking statements contained in this document include statements relating to the expected effects of the Partial Offer on Growthpoint and Capital & Regional, the expected timing and scope of the Partial Offer and other statements other than historical facts. Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "project", "will likely result", "will continue", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although Growthpoint and Capital & Regional believe that the expectations reflected in such forward-looking statements are reasonable, Growthpoint and Capital & Regional can give no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. In addition to the information regarding these risks, uncertainties, assumptions and other factors set forth in the public filings made by Capital & Regional and the public filings with the JSE made by Growthpoint, important risk factors that may cause such a difference include, but are not limited to, (i) the completion of the Partial Offer and Share Subscription on anticipated terms and timing, (ii) legislative, regulatory and economic developments, (ii) the impact of foreign exchange rates, (iii) the performance of the global economy, and (iv) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities. While the list of factors presented here is considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realisation of forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors.

Neither Growthpoint nor Capital & Regional, nor any of their respective associates or directors, officers or advisers provides any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Each forward-looking statement speaks only as at the date of this Announcement. Other than in accordance with their legal or regulatory obligations (including under the City Code, the Listing Rules, the Disclosure Guidance and Transparency Rules, MAR and the JSE Listing Requirements), none of Growthpoint, the Growthpoint Group, Capital & Regional or the Capital & Regional Group is under, or undertakes, any obligation, and of the foregoing expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

All forward looking statements contained in this Announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast, projection or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Capital & Regional or Growthpoint for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Capital & Regional or Growthpoint.

Disclosure requirements of the City Code

Under Rule 8.3(a) of the City Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

For the purposes of this section (Disclosure requirements of the City Code) and the section (Publication on of this Announcement and availability of hard copies) below of this document, "business day" means a day on which the London Stock Exchange is open for the transaction of business.

Electronic communications

Please be aware that addresses, electronic addresses and certain information provided by Capital & Regional Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Capital & Regional may be provided to Growthpoint during the Offer Period as required under Section 4 of Appendix 4 of the City Code to comply with Rule 2.11(c) of the City Code.

Publication of this Announcement and availability of hard copies

A copy of this Announcement and the display documents required to be published pursuant to Rule 26.1 and Rule 26.2 of the City Code will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Capital & Regional's website at www.capreg.com and on Growthpoint's website at www.growthpoint.co.za by no later than 12 noon on the business day following the date of this Announcement. For the avoidance of doubt, neither the contents of those websites are incorporated into, or form part of, this Announcement.

Subject to certain restrictions relating to persons in any Restricted Jurisdiction, Capital & Regional Shareholders may request a hard copy of this Announcement by contacting:

(a) Equiniti Limited (Capital & Regional's UK registrar) on 0333-207-5963 or +44 121-415-0088 (if calling from outside the UK). Lines are open from 8.30 a.m. to 5.30 p.m. (UK time) Monday to Friday (excluding English and Welsh public holidays). Calls to the helpline from outside the UK will be charged at the applicable international rate. Please note that calls may be recorded and randomly monitored for security and training purposes. Please note that Equiniti Limited cannot provide advice on the merits of the Proposed Transaction nor give financial, tax, investment or legal advice; or

(b) Java Capital Trustees and Sponsors (Capital & Regional's JSE sponsor) on +27 (0)11 722 3050 during normal business hours (8:00 a.m. to 5.00 p.m. (South Africa time)) Monday to Friday. Please note that Java Capital Trustees and Sponsors cannot provide advice on the merits of the Proposed Transaction nor give financial, tax, investment or legal advice.

If you have received this Announcement in electronic form, copies of this Announcement and any document or information incorporated by reference into this document will not be provided unless such a request is made. Capital & Regional Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Partial Offer or the Share Subscription should be in hard copy form.

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

Time

All times shown in this Announcement are London times, unless otherwise stated.

APPENDIX I

CONDITIONS AND FURTHER TERMS OF THE PARTIAL OFFER

The Partial Offer will comply with the applicable rules and regulations of the FCA, the London Stock Exchange, the JSE and the City Code. In addition, the Partial Offer will be subject to the terms and conditions set out in this Appendix and to be set out in the Offer Document and the Form of Acceptance.

PART A: Conditions of the Partial Offer

The Partial Offer will be subject to the following Conditions

Acceptance condition

1. Valid acceptances of the Partial Offer being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. (London time) on the First Closing Date (or such later time(s) and/or date(s) as Growthpoint may, subject to the rules of the City Code or with the consent of the Panel, decide) in respect of not less than 219,786,924 Capital & Regional Shares.

Partial Offer approval and Share Subscription conditions

2.

(a) (i) the resolutions required to implement the Proposed Transaction as set out in the notice convening the Capital & Regional General Meeting (including, without limitation, the Resolutions) being duly passed by Capital & Regional Shareholders at the Capital & Regional General Meeting (ii) by no later than the 22nd day after the expected date of the Capital & Regional General Meeting which will be set out in the Prospectus in due course (or such later date as Growthpoint and Capital & Regional may agree, subject to the requirements of the Panel);

(b) (i) the FCA having acknowledged to Capital & Regional or its agent and to Growthpoint or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the Subscription Shares to the premium listing segment of the Official List has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject (for the purpose of this paragraph, "listing conditions")) admission will become effective as soon as a dealing notice has been issued by the FCA and any listing conditions have been satisfied; and (ii) the London Stock Exchange having acknowledged to Capital & Regional or its agent (and such acknowledgement not having been withdrawn) that the Subscription Shares will be admitted to trading on the London Stock Exchange's main market for listed securities;

(c) the JSE having acknowledged to Capital & Regional or its agents (and such acknowledgement not having been withdrawn) that the Subscription Shares will be admitted to trading on the Main Board of the JSE; and

(d) the allotment of the Subscription Shares to Growthpoint (or any Growthpoint Nominee(s)) in accordance with the terms of the Share Subscription Agreement.

Admission conditions

3.

(a) UK Admission; and

(b) SA Admission.

General conditions

4. Additionally, except as stated below and subject to the requirements of the Panel, the Partial Offer will also be subject to satisfaction or the waiver of the following Conditions:

Third party clearances and authorisations

(a) other in respect of Conditions 2(b) and 2(c) above, no central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, trade agency, professional association, institution, employee representative body, or any other such body or person whatsoever in any jurisdiction (each a "Third Party" and all collectively "Third Parties") having decided or given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case not having withdrawn the same), or having required any action to be taken, or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision or change to published practice (and in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to:

and all applicable waiting and other time periods (including any extensions thereof) during which any such Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any relevant jurisdiction in respect of the Partial Offer or proposed acquisition of any Capital & Regional Shares or otherwise intervene having expired, lapsed or been terminated (as the case may be);

(b) all material notifications, filings or applications which are deemed necessary or appropriate having been made in connection with the Partial Offer and all necessary waiting and other time periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with in each case in respect of the Partial Offer and all Authorisations which are deemed by Growthpoint, having consulted with Capital & Regional, to be reasonably necessary or appropriate in any jurisdiction for or in respect of the Partial Offer or the proposed acquisition of any shares or other securities in, or control of, Capital & Regional by any member of the Wider Growthpoint Group having been obtained in terms and in a form reasonably satisfactory to Growthpoint from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider Capital & Regional Group or the Wider Growthpoint Group has entered into contractual arrangements and all such Authorisations which are deemed by Growthpoint to be necessary or appropriate to carry on the business of any member of the Wider Capital & Regional Group in any jurisdiction having been obtained in each case where the direct consequence of a failure to make such notification or filing or to wait for the expiry, lapse or termination of any such waiting or other time period or to comply with such obligation or obtain such Authorisation would be unlawful in any relevant jurisdiction or have a material adverse effect on the Wider Capital & Regional Group, any member of the Wider Growthpoint Group or the ability of Growthpoint to implement the Partial Offer and all such Authorisations remaining in full force and effect at the time at which the Partial Offer becomes otherwise unconditional in all respects and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;

Certain matters arising as a result of any arrangement, agreement etc.

(c) except as Disclosed, there being no provision of any agreement, authorisation, arrangement, lease, licence, permit, franchise, lease or other instrument to which any member of the Wider Capital & Regional Group is a party or by or to which any such member or any of its assets may be bound, entitled or be subject or any event or circumstances which, as a consequence of the Partial Offer or the proposed acquisition by any member of the Wider Growthpoint Group of any shares or other securities in Capital & Regional or because of a change in the control or management of Capital & Regional or any member of the Wider Capital & Regional Group, would or might reasonably be expected to result in to an extent which is or would be material in the context of the Wider Capital & Regional Group taken as a whole:

and no event having occurred which, under any provision of any agreement, authorisation, arrangement, lease, licence, permit or other instrument to which any member of the Wider Capital & Regional Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would be reasonably likely to result in any of the events referred to in Conditions 4(c)(i) to 4(c)(ix);

Certain events occurring since

(d) except as Disclosed, no member of the Capital & Regional Group having, since 31 December 2018:

(a) the terms of the governing documents of any pension scheme(s) established by any member of the Wider Capital & Regional Group for its directors, former directors, employees, former employees or their dependants;

(b) the contributions payable to any such scheme(s) or to the benefits which accrue, or to the pensions which are payable, thereunder;

(c) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or

(d) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued, made, agreed or consented to;

No adverse change, litigation or similar

(e) except as Disclosed, since 31 December 2018 there having been:

No discovery of certain matters

(f) except as Disclosed, Growthpoint not having discovered:

Anti-corruption and sanctions

(g) except as Disclosed, Growthpoint not having discovered that:

PART B: Further terms of the Partial Offer

1. If the Partial Offer lapses, it will cease to be capable of further acceptance. Capital & Regional Shareholders who have already accepted the Partial Offer shall then cease to be bound by acceptances delivered on or before the date on which the Partial Offer lapses.

2. The Partial Offer will be governed by English law and be subject to the exclusive jurisdiction of the English courts, to the Conditions set out above and the further terms set out in this Announcement and to be set out in the Offer Document and the Form of Acceptance. The Partial Offer will be subject to applicable requirements of the FCA, the City Code, the Panel and the London Stock Exchange (including, without limitation, the Listing Rules).

3. The Conditions are inserted for the benefit of Growthpoint and no Capital & Regional Shareholder shall be entitled to waive any of the Conditions without the prior written consent of Growthpoint.

4. Capital & Regional Shares that are subject to the Partial Offer will be acquired by Growthpoint pursuant to the Partial Offer fully paid and free from all liens, charges, encumbrances, equitable interests, pre-emption rights and other interests and rights of whatsoever nature and together with all rights now or hereafter attaching thereto, including the right to receive and retain in full all dividends other than the Interim Dividend and other distributions (if any) announced, declared, paid or made or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, in each case, by reference to a record date falling on or after the date of this Announcement.

5. Except for the Interim Dividend, Growthpoint reserves the right to make an equivalent reduction in the Offer Price if Capital & Regional announces, declares or pays any dividend or makes any other distribution to Capital & Regional Shareholders on or after the date of this Announcement although, in such circumstances, Capital & Regional Shareholders would be entitled to retain any such dividend or other distribution made or paid.

6. Subject to the requirements of the Panel, Growthpoint reserves the right to waive, in whole or in part, all or any of Conditions 2(a)(ii), 2(c), 3(b) and 4(a) to 4(g)(iii) (inclusive) of Part A above. Conditions 1, 2(a)(i), 2(b), 2(d) and 3(a) of Part A above are not waivable. Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

7. Except with the consent of the Panel, the Partial Offer will lapse unless all of the Conditions are fulfilled or (if capable of waiver) waived or, where appropriate, have been determined by Growthpoint to be or to remain satisfied no later than midnight on the twenty first day after the later of the First Closing Date of the Partial Offer and the date on which the Partial Offer becomes, or is declared, unconditional as to acceptances, or such later date as the Panel may agree.

8. Growthpoint shall be under no obligation to waive (if capable of waiver) or treat as fulfilled any of Conditions 2(a)(ii), 2(c), 3(b) and 4(a) to 4(g)(iii) (inclusive) of Part A by a date earlier than the latest date specified above for the fulfilment thereof, notwithstanding that the other Conditions of the Partial Offer may at such earlier date have been fulfilled and that there are, at such earlier date, no circumstances indicating that any of such Conditions may be incapable of fulfilment.

9. If Growthpoint is required by the Panel to make an offer for Capital & Regional Shares under the provisions of Rule 9 of the City Code, Growthpoint may make such alterations to the above Conditions of the Partial Offer as are necessary to comply with the provisions of that Rule.

10. Under Rule 13.5(a) of the City Code, except with the Panel's consent, Growthpoint may not invoke any of the above Conditions so as to cause the Partial Offer not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the relevant condition are of material significance to Growthpoint in the context of the Partial Offer. The determination of whether or not such Conditions can be invoked would be determined by the Panel. Conditions 1, 2(a)(i), 2(b), 2(d) and 3(a) of Part A are not subject to this provision of the City Code.

11. If:

(a) the Partial Offer or any matter arising from or relating to the Partial Offer constitutes a concentration with a Community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)I of the Regulation or makes a referral to a competent authority of the United Kingdom under Article 9(1) of the Regulation and there is then a CMA Phase 2 Reference; or

(b) the Partial Offer or any matter arising from or relating to the Partial Offer becomes subject to a CMA Phase 2 Reference,

in each case, before the later of midnight on the First Closing Date and the date on which the Partial Offer becomes, or is declared, unconditional as to acceptances, the Partial Offer will lapse. If the Partial Offer does so lapse, not only will the Partial Offer cease to be capable of further acceptance but also Capital & Regional Shareholders and Growthpoint will thereafter cease to be bound by prior acceptances.

12. This Announcement does not constitute, or form part of, an offer or invitation to purchase Capital & Regional Shares or any other securities.

13. The availability of the Partial Offer to persons not resident in the United Kingdom may be affected by the laws of the jurisdictions in which such persons are resident. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

14. The Partial Offer will not be made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex, telephone, internet or email) of interstate or foreign commerce of, or of any facility of a national securities exchange of, any Restricted Jurisdiction and the Partial Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within any Restricted Jurisdiction.

APPENDIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this Announcement, unless otherwise stated, or the context otherwise requires, the following sources and bases have been used:

(a) the financial information relating to Capital & Regional has been extracted or derived, without material adjustment, from Capital & Regional's unaudited interim financial statements for the period beginning 1 January 2019 and ended on 30 June 2019;

(b) the financial information relating to Growthpoint has been extracted or derived, without material adjustment, from Growthpoint's audited consolidated financial statements for the financial year ended 30 June 2019;

(c) as at the close of business on 16 October 2019 (being the last Business Day prior to the date of this Announcement) Capital & Regional had in issue 726,389,117 Capital & Regional Shares;

(d) the value attributed to the existing issued share capital of Capital & Regional is based upon the Offer Price of 33 pence for each Capital & Regional Share and 726,389,117 Capital & Regional Shares being in issue on 16 October 2019 (being the last Business Day prior to the date of this Announcement);

(e) the value attributed to the Partial Offer is based upon the Offer Price of 33 pence for each Capital & Regional Share and 219,786,924 Capital & Regional Shares (being the number of Capital & Regional Shares subject to the Partial Offer);

(f) prices quoted for Capital & Regional Shares are closing middle market prices on the relevant date, derived from the Daily Official List of the London Stock Exchange;

(g) volume-weighted average prices have been derived from Bloomberg and have been rounded to the nearest two decimal places;

(h) an exchange rate of R19.16 to £1 has been used, being the R/£ exchange rate as at close of business in London on 16 October 2019 apart from references to balance sheet figures in which case an exchange rate of R17.89 to £1 has been used as of 30 June 2019, sourced from Bloomberg;

(i) an exchange rate of A$1.90 to £1 has been used, being the A$/£ exchange rate as at close of business in London on 16 October 2019 apart from references to balance sheet figures in which case an exchange rate of A$1.81 to £1 has been used as of 30 June 2019, sourced from Bloomberg;

(j) an exchange rate of €1.16 to £1 has been used, being the €/£ exchange rate as at close of business in London on 16 October 2019 apart from references to balance sheet figures in which case an exchange rate of €1.12 to £1 has been used as of 30 June 2019, sourced from Bloomberg;

(k) for the purposes of Rule 29.1(d) of the City Code, the following adjustments, based on the 30 June values, have been made to Capital & Regional's 30 September 2019 property valuation in order to calculate Capital & Regional's Rolled-Forward Basic NAV as at 30 September 2019:

i. Add cash: £25.3 million;

ii. Deduct debt: £438.4 million; and

iii. Deduct other assets and net liabilities: £10.5 million.

The Capital & Regional Rolled-Forward Basic NAV of £340.8 million or 47 pence per share is Capital & Regional's Basic NAV as at 30 June 2019 of £373.7 million (51 pence per share) plus the valuation decline on Capital & Regional's portfolio of £32.9 million (4.5 pence per share) between 30 June 2019 and 30 September 2019. The CBRE Valuation Report and the Knight Frank Valuation Report for Capital & Regional are set out in Appendix V. The Capital & Regional Directors have confirmed that other adjustments required to calculate the Capital & Regional Rolled-Forward NAV as at 30 September 2019 are not material;

(l) the Capital & Regional pro forma NAV is calculated as follows:

Capital & Regional Rolled-Forward Basic NAVas at 30 September 2019 £340.8 million

Plus Share Subscription (excluding costs) £77.9 million

Pro forma NAV as at 30 September 2019 £418.7 million

Issued share capital pre-Share Subscription 726.4 million shares

Issued share capital post Share Subscription 1,037.8 million shares

Pro forma NAV per share as at 30 September 2019 40 pence per share

(m) the Capital & Regional pro forma LTV is calculated as follows:

Net debt as at 30 June 2019 £413.1 million

Less proceeds from Share Subscription to repay debt £77.9 million

Net debt as at 30 June 2019 adjusted for Share Subscription £335.2 million

Property valuation as at 30 September 2019 £764.4 million

Pro forma LTV as at 30 September 2019 43.9 per cent.

APPENDIX III

DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

Part A: Capital & Regional Directors

The following Capital & Regional Directors (other than Louis Norval and Wessel Hamman) have entered into irrevocable undertakings in respect of their beneficial holdings of Capital & Regional Shares:

* Beneficially owned by Caron Krieger

The irrevocable undertakings include undertakings for each of the abovenamed Capital & Regional Directors to:

(a) to vote, or procure the vote, in favour (or to submit, or procure the submission of, Forms of Proxy, voting in favour) of the Resolutions at the Capital & Regional General Meeting in respect of such number of Capital & Regional Shares against their name in column 2 above; and

(b) to accept, or procure the acceptance of, the Partial Offer in respect of such number of Capital & Regional Shares against their name in column 3 above.

The irrevocable undertakings given by each of the Capital & Regional Directors provide that they will cease to be binding if the Partial Offer lapses or is withdrawn.

Part B: Other Capital & Regional Shareholders

(1) The following Capital & Regional Shareholders (including associated companies of Louis Norval) have entered into irrevocable undertakings:

The irrevocable undertakings include undertakings from each Capital & Regional Shareholder to:

(a) vote, or procure the vote, in favour (or to submit, or procure the submission of, Forms of Proxy, voting in favour) of the Resolutions at the Capital & Regional General Meeting in respect of such number of Capital & Regional Shares against their name in column 2 above; and

(b) accept, or procure the acceptance of, the Partial Offer in respect of such number of Capital & Regional Shares against their name in column 3 above.

The irrevocable undertakings given by such Capital & Regional Shareholders provide that they will cease to be binding if the Partial Offer lapses or is withdrawn.

(2) The following other Capital & Regional Shareholders have entered into irrevocable undertakings:

The irrevocable undertakings include undertakings from each Capital & Regional Shareholder to:

(a) vote, or procure the vote, in favour (or to submit, or procure the submission of, Forms of Proxy, voting in favour) of the Resolutions at the Capital & Regional General Meeting in respect of such number of Capital & Regional Shares against their name in column 2 above; and

(b) accept, or procure the acceptance of, the Partial Offer in respect of such number of Capital & Regional Shares against their name in column 3 above.

The irrevocable undertaking given by Stabilis Investments Holdings Limited provides that it will cease to be binding if the Partial Offer lapses or is withdrawn.

The irrevocable undertakings given by each of the other Capital & Regional Shareholders provide that they will cease to be binding if:

(a) the Partial Offer lapses or is withdrawn; or

(c) a third party announces a firm intention to make a cash offer for the issued and to be issued Capital & Regional Shares (whether including or excluding any Capital & Regional Shares held in treasury) (a "Competing Offer"), provided that: (i) the Competing Offer is at a price that implies a value for each Capital & Regional Share which exceeds the Offer Price (or, in the case of New Fortress Holdings Limited only, which exceeds the Offer Price by 10 per cent.); (ii) Growthpoint has not announced a firm intention to make a revised offer pursuant to the Partial Offer for an equivalent or improved consideration to that available under such Competing Offer by 5.00 p.m. on the fifth Business Day (being any day other than a Saturday, Sunday or public holiday when banks are open for business in London) after the day of the relevant announcement of the Competing Offer (the "Revised Offer Date"); and (iii) the Competing Offer has not lapsed or been withdrawn by 5.00 p.m. on the Revised Offer Date.

(3) The following other Capital & Regional Shareholder has given a letter of intent:

The letter of intent provides that such Capital & Regional Shareholder intends to:

(a) vote, or procure the vote, in favour (or to submit, or procure the submission of, Forms of Proxy, voting in favour) of the Resolutions at the Capital & Regional General Meeting in respect of such number of Capital & Regional Shares against their name in column 2 above; and

(b) accept, or procure the acceptance of, the Partial Offer in respect of such number of Capital & Regional Shares against their name in column 3 above.

APPENDIX IV

DEFINITIONS

The following definitions apply throughout this Announcement, unless the context requires otherwise:

In this Announcement:

·; "subsidiary", "subsidiary undertaking" and "undertaking" have the meanings given to them by the Companies Act 2006 and "associated undertaking" has the meaning given to it by paragraph 19 of Schedule 6 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, other than paragraph 19(1)(b) thereof which shall be excluded for this purpose;

·; all references to "GBP", "pounds", "£", "penny", "pence" or "p" are to the lawful currency of the United Kingdom;

·; all references to "R" or "Rand" are to the lawful currency of South Africa;

·; all references to "A$" or "Australian dollars" are to the lawful currency of Australia;

·; all references to "€" or "Euro" are to the lawful currency of the European Union;

·; the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender;

·; all references to legislation are to English legislation unless the contrary is indicated, and any reference to any provision of any legislation includes any amendment, modification, re-enactment or extension thereof; and

·; all times referred to are London time unless otherwise stated.

APPENDIX V

VALUATION REPORTS

Appendix A

VALUATION REPORT IN RELATION TO THE PROPERTIES

The Directors

Capital & Regional plc (the "Company")

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

17 October 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, 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.

1.4 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.

1.5 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.

2.3 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.

2.4 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.

2.5 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). 

3.6 The Properties have been valued individually and not as part of a portfolio.

3.7 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 or reviewed the occupational lease documents.

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.

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. We consider that the impact of securing the Agreement to Lease is positive and has enhanced the market value of the shopping centre by around £900,000.

6. 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, 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.

7. General Conditions

7.1 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.

7.2 Our liability

(a) 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.

(b) We confirm that we hold adequate and appropriate PII cover for this instruction.

(c) 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.

(d) 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.

7.3 We acknowledge that this Valuation Report will be published on the Company's website in accordance with Rule 26.3 of the Code.

7.4 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

Gavin Spreyer MRICS

RICS Registered Valuer

Partner, Valuation & Advisory

For and on behalf of Knight Frank LLP

55 Baker Street

London

W1U 8AN