Caledonian Tst. Regulatory News (CNN)

Information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR")

5 February 2018

Caledonian Trust plc

("Caledonian Trust" or the "Company")

Proposed sale of St Margaret's House, Edinburgh

Caledonian Trust, the Edinburgh-based property investment holding and development company, announces that, on 2 February 2018, it entered into an agreement to sell St Margaret's House, 151 London Road, Edinburgh ("St Margaret's" or the "Property") for a cash consideration of £15.0 million (exclusive of VAT) (the "Consideration") to Drum Property Group Limited ("Drum" or the "Purchaser"), an established and award-winning Scottish-based property development and investment company (the "Proposed Disposal").

St Margaret's is the Company's largest property development and located in Edinburgh, approximately one mile from the Parliament and Princes Street and adjacent to Meadowbank Stadium. The existing building is a 92,000ft2 multi-storey building that is currently fully let out with the main tenants being Edinburgh Palette, a registered charity, and the Registrars of Scotland. The Company has planning permission in principle (PPP) at St Margaret's for a 231,000ft2 mixed-use development of residential and/or student accommodation, a hotel, offices and other commercial space, together with parking for 225 cars.

The Consideration which would be payable under the Proposed Disposal is significantly above the book value of £5.0 million which was attributed to St Margaret's as at 30 June 2017 in the last audited accounts published by the Company. For the year ended 30 June 2017 St Margaret's generated gross rental income of £158,717 for the Company and an operating profit of £138,919. The Company also incurred a valuation gain of £500,000 on St Margaret's in the year ended 30 June 2017.

Under the terms of the missives entered into on 2 February 2018 by Caledonian Trust and Drum completion of the Proposed Disposal is conditional on the Purchaser obtaining, inter alia, detailed planning permission and all other consents to their entire satisfaction for a mixed used development of student and residential accommodation. It is anticipated that it will take up to 18 months for the conditions of the missives including detailed planning permission to be obtained and completion of the Proposed Disposal to take place.

The agreement contains a long stop date for the Purchaser obtaining all the necessary consents to their entire satisfaction of 18 months from the conclusion of the missives, such long stop date being capable of extension in certain specified circumstances.

Under the terms of the signed agreement the Company has the potential to receive additional cash consideration should the planning permission process result in the development comprising additional student bedrooms and/or additional housing units. Based on the discussions that the Board of Caledonian Trust has held to date with the Purchaser it is not envisaged that there will be any material change to the overall gross value of the development or any material change to the housing mix as a result of the planning permission process. As such the Board of Caledonian Trust believe it is unlikely that any additional consideration will be received over and above the £15.0 million which will be payable on completion of the Proposed Disposal.

The Company intends to use the net proceeds from the Proposed Disposal to provide funding to accelerate the Company's existing property development programme, re-invest into new property developments, repay certain existing debt and provide general working capital.

The Company will release further announcements on the Proposed Disposal at the appropriate time.

Douglas Lowe, Chairman and CEO of Caledonian Trust, commented:

"We are delighted to enter into this agreement with Drum Property Group, a successful and award-winning property company in Scotland, for the sale of St Margaret's for a cash figure that is significantly in excess of our net book value and the last independent valuation undertaken on the site. The development is in a prime location in Edinburgh for student accommodation and affordable housing. Having owned St Margaret's since 1988 we are pleased that Drum Property, with their expertise and resources, will become the new owners of the St Margaret's site once the Proposed Disposal has completed. The net cash proceeds from the Proposed Disposal will, when received on completion, significantly strengthen the Group's balance sheet and provide funding to enable the Company to accelerate the Group's existing property development programme."

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