AGM and Trading Update

1 July 2021

AGM and Trading Update

McKay Securities Plc, ("McKay" or "the Company"), the only UK REIT specialising entirely in the South East and London office, industrial and logistics markets, announces an update on trading for the quarter to 30 June 2021 ahead of its 75th Annual General Meeting to be held later today.

Simon Perkins, CEO of McKay, commented:

"We saw a pick-up in both occupier enquiries and return to work plans across our office portfolio in the lead up to the anticipated move to Step 4 of the Government's roadmap out of lockdown on 21 June. This proved premature with the Government's decision to delay consideration of the final step to July. However, encouragingly there have been a number of recent significant lettings within the South East office market, and once restrictions are lifted we anticipate a further increase in occupier interest, with the office continuing to play an essential role in corporate life.

"Our portfolio of high quality office, warehouse and logistics assets located within established South East regional centres and London suburbs are ideally placed to benefit from economic recovery and the hybrid working practices that will continue to evolve.

"With the existing 23% portfolio reversion and undrawn facilities of circa £100 million for acquisitions and other accretive initiatives, we remain well positioned to benefit as the market recovers."

In-house portfolio management continuing to deliver strong rent collection

· 95.0% of all March 2021 quarter rents received, ahead of the 82.0% received at the same period last year. Collection of the majority of the outstanding 5.0% anticipated on conclusion of ongoing discussions

· 97.0% of rent received for the year to 31 March 2021, up from 96.0% at the announcement of year-end results on 18 May 2021, with collection of a further 1.0% still expected

Letting and asset management progress

· Completion of four new lettings with a combined contracted rent of £225,630 pa, in line with our valuer's open market rental assumptions as at 31 March 2021 ("ERV")

· The 'McKay Way' customer service commitment contributing to continued strong retention of 68.8% of occupiers at lease break and expiry, retaining combined contracted rent of £494,020 pa, 2.2% ahead of ERV

· In addition, constructive dialogue with existing occupiers resulting in value enhancing lease extensions and the removal of future break clauses, protecting and extending contracted rent totalling £723,750 pa

· Lease expiries totalling £565,550 pa, versus an ERV of £806,850 pa, providing the opportunity to refurbish to improve letting prospects to unlock asset rental reversions

· Recently completed and current office refurbishment projects at Corinthian House, Croydon; Crown Square, Woking and Swan Court, Wimbledon generating encouraging interest, with the McKay+ offer of semi-fitted, flexible office space proving attractive

· Positive progress with feasibility studies and potential scheme design at Sopwith Drive, Weybridge (logistics: 63,140 sq ft) and Great Brighams Mead, Reading (office: 84,840 sq ft) informing asset strategy regarding possible refurbishment, redevelopment or sale options

· External ESG targets set for the current financial year as required under the Company's Sustainability Framework, maintaining focus on, and delivery of, key long term ESG priorities

· Substantial 22.8% portfolio reversion of £5.84 million pa (as at 31 March 2021)

· Selective acquisition opportunities under active consideration

 Share buy-back programme

· Continued positive progress with the share buy-back programme, previously announced on 8 March 2021, of up to £10.00 million (circa. 5.0% of the issued share capital), proving accretive to shareholder value and earnings

· Total investment under the programme to date of £3.62 million through the purchase of 1.66 million shares at an average discount to EPRA NTA of 29.1%

· The current programme expires at the AGM for procedural reasons. Subject to renewal of shareholder approval of the relevant resolution at the AGM, the Company's intention is to continue with the buy-back programme, which will require a further announcement in due course

Strong balance sheet maintained

· Net debt of £141.60 million (31 March 2021: £141.75 million), providing cash and undrawn facilities of circa. £100 million

· Loan to value ("LTV") of 32.3% (31 March 2021: 32.4%), based on the external portfolio valuation of £437.90 million (as at 31 March 2021)

· Robust balance sheet, with no loan renewals until April 2024

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information, please contact:

McKay Securities Plc FTI Consulting

Simon Perkins, CEO Dido Laurimore, Talia Jessener

Giles Salmon, CFO 0203 727 1000

0118 950 2333 mckay@fticonsulting.com

The person responsible for release of this announcement on behalf of the Company is Giles Salmon (Chief Financial Officer).

About McKay Securities

McKay Securities Plc is a commercial property investment company with Real Estate Investment Trust (REIT) status, listed on the main market of the London Stock Exchange. It specialises in the development and refurbishment of office, industrial and logistics buildings within proven markets of South East England and London. The portfolio at 31 March 2021 comprised 33 properties, valued at £437.90 million, located in established areas, predominantly along the M4 corridor, where McKay has deep expertise, with a focus on growing satellite towns benefitting from strong connectivity to London and robust demand amongst leading occupiers.

www.mckaysecurities.plc.uk