SIR.L Regulatory News (SIR)

Secure Income REIT Plc

(the 'Company')

SALE OF THE MADAME TUSSAUDS FREEHOLD INVESTMENT FOR £332.5 MILLION

26 May 2015: The Board of Secure Income REIT (AIM: SIR) announces that it has exchanged contracts for the sale of the Madame Tussauds property investment to the Fubon Life Insurance Company Limited, the Taiwanese Insurance company, for a cash consideration of £332.5 million. Completion of the sale of this iconic freehold property on Marylebone Road in Central London is expected in the third quarter of 2015. 

The property is let on a full repairing and insuring lease to Merlin Attractions Operations Ltd, the owner and operator of Madame Tussauds, guaranteed by Merlin Entertainments PLC, the world's second biggest visitor attraction business with a market capitalisation of circa £4.7 billion. The lease runs for a minimum of a further 27 years with the option for the tenant to extend by up to a further 70 years upon expiry, bringing the potential tenancy length to almost 100 years from today. The current rent payable on the property is £15.7 million per annum and the lease provides for uncapped, upward only annual rent reviews throughout the term geared to RPI.

The contract price of £332.5 million represents an 8% premium to the valuation of the property as at 31 December 2014 of £309.3 million and will be partly applied to debt repayments with the balance held for general corporate purposes.

Madame Tussauds has occupied the current site for more than 130 years and has consistently been one of London's most successful tourist attractions. This is the first time ever that this property investment has been sold individually in the open market. 

Secure Income REIT was represented by CBRE and Patrizia UK Limited acted as investment manager for the Fubon Life Insurance Company Limited.

Commenting on the transaction, Secure Income REIT PLC Chairman, Martin Moore said: "While we have a strong tie to this internationally iconic building, from a management perspective we realise that having such a large single property exposure unbalances the spread of assets in our portfolio. We are pleased to be selling at a satisfactory premium to the most recent valuation, which is less than five months old.

"Our strategy remains firmly to invest in and hold high quality assets which generate very long term income from exceptional tenants."

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About Secure Income REIT

Secure Income REIT floated as a Real Estate Investment Trust on the AIM segment of the London Stock Exchange in June 2014. Upon Admission, the Company had a share price of 174p, representing a market capitalisation of £293 million, which has subsequently grown to in excess of £530 million.

The Company specialises in generating long term, inflation protected, secure income from real estate investments. Its investment strategy is designed to satisfy investors' growing requirements for high quality, safe, inflation protected income flows.

At its preliminary results to 31 December 2014 the Company reported gross assets of £1.63 billion and, with a weighted average unexpired lease term of 25 years across its portfolio, all with annual fixed or RPI rental uplifts, has one of the longest income profiles in quoted property sector.

The Company's Board is chaired by Martin Moore and also comprises three further independent Directors in Leslie Ferrar, Jonathan Lane and Ian Marcus, as well as three members of the Prestbury Team in Nick Leslau, Mike Brown and Sandy Gumm.

The Company is externally managed by Prestbury Investments LLP which was also external manager to Max Property Group plc until August 2014, when was sold to Blackstone Group.