SIR.L Regulatory News (SIR)

25 February 2020

Secure Income REIT Plc

(the "Company")

Management proposal for fee reduction

The Independent Directors of the Company announce that the Prestbury advisory team have proposed a reduction in their advisory fees which has been accepted.

In August 2019 the Company completed the sale of a portfolio of eight private hospitals at a premium to book value, raising net cash of £164 million (the "Hospitals Disposal"). Since the Company listed in 2014 its strategy has been to keep a prudent cash reserve, but to raise significant sums by way of non-dilutive equity issues only when acquisition targets have been secured. As announced at the time of the Hospitals Disposal, our assessment was then, as it remains now, that the surplus cash is best retained by the Company in order to provide flexibility to optimise the use of the surplus cash.

While the market uncertainty that prevailed at the time of the Hospitals Disposal has abated somewhat, the Board of the Company still believes it is prudent and desirable for the Company to retain the surplus cash whilst the nature of Brexit is resolved and the management team continue their search to source value accretive deals. In the meantime, as indicated at the time of the Hospitals Disposal, part of the net proceeds have been applied to topping up dividend payments and the surplus currently stands at some £158 million.

The view of the Prestbury team is that charging shareholders for holding such a significant amount of surplus cash would be inequitable. They therefore approached the Independent Directors with the proposal to reduce the advisory fees to the levels that would be payable if the surplus cash were returned to shareholders. The fees payable on the surplus cash currently held amounts to some £1.2 million per annum. The Investment Advisory Agreement (as summarised in the Company's latest annual report) will therefore be amended such that the surplus cash is excluded from the calculation of the Company's EPRA NAV for the purposes of calculating the advisory fee. Surplus cash is defined as the £164 million surplus realised on the Hospitals Disposal net of any amounts deployed to top up dividends or make special returns to shareholders, deployed in new investments or used to manage or repay debt. The Company will include updates on the remaining balance of the surplus cash in its interim and annual reports to shareholders.

Prestbury believes this to be in the best interests of the Company and the Independent Directors have accepted this proposal. The revised documentation is expected to be entered into shortly and the changes will take effect from the end of the current calendar quarter. The Independent Directors consider, having consulted with Stifel Nicolaus Europe Limited, the Company's nominated adviser, that the terms of the revised Investment Advisory Agreement are fair and reasonable insofar as its shareholders are concerned.

Martin Moore, Chairman of Secure Income REIT said:

"The management team is the Company's second largest shareholder and so is exceptionally closely aligned with all shareholders. They consider that they should not benefit from temporarily acting as managers of the Company's unusually high cash balance. The Board agrees with this proposal and would like to thank the management team for a proposal that puts the interests of all shareholders above their entitlement to advisory fee income."

For further information on the Company, please contact:

About Secure Income REIT Plc

Secure Income REIT 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 30 June 2019, the Group's investment property portfolio (adjusted for the sale of eight hospitals after the balance sheet date) was valued at £2.1 billion, producing £111.1 million per annum of rental income from long term leases with a weighted average unexpired term to expiry of 21.5 years with no breaks. All rental income is subject to fixed uplifts or RPI upwards only rent reviews with 59% of rental income subject to RPI-linked reviews and 41% having fixed uplifts.

The Group's portfolio comprises key operating assets let to strong businesses in defensive sectors with high barriers to entry. The RPI-linked rent reviews and fixed rental uplifts combine with fixed cost debt to drive healthy dividend growth, creating attractive and predictable returns.

The Company is advised by Prestbury Investments Partners Limited, owned by the team which advised Max Property Group plc until August 2014, when all of the assets of Max Property Group plc were sold to Blackstone Group. Prestbury is owned and run by a team of real estate and finance professionals including Nick Leslau, Mike Brown, Tim Evans, Ben Walford and Sandy Gumm.

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

The Company is a UK REIT which floated on the AIM market of the London Stock Exchange in June 2014.

The Company's LEI is 213800M1VI451RU17H40

Further information on Secure Income REIT is available at www.SecureIncomeREIT.co.uk.