Trading Statement

Release date: 22 November 2018

Embargoed until: 07:00

CLS Holdings plc

("CLS", the "Company" or the "Group")

Trading Update for the period 1 July 2018 to 21 November 2018

Improving occupancy and strong operational performance across the Group

Chief Executive of CLS, Fredrik Widlund, commented:

"In the second half of 2018 we have seen a robust performance across each of our markets in the UK, Germany and France. We have completed significant lettings including key properties acquired in 2017 where we identified asset management opportunities at the time of purchase, and our Group vacancy level has fallen from 5.7% to 4.3%.

"We remain confident that our results will be in line with market expectations for the full year, notwithstanding the current political and economic uncertainties. Our cost of debt is at a historical low, we have a strong balance sheet with substantial liquid resources and are well positioned to take advantage of opportunities as they arise."

Operational metrics

Vacancies being driven down across the Group.

· Vacancy rate:

· A net reduction in vacancies of 83,000 sq ft (7,711 sqm) since 30 June 2018:

o 323,961 sq ft (30,097 sqm) of new leases, lease renewals and extensions completed

o 240,961 sq ft (22,386 sqm) vacated or expired

o Since 1 January 2018, 493,000 sq ft of new leases, lease renewals and extensions completed at an average 4.3% above ervs at 31 December 2017

· Included in the above, since 30 June 2018:

o In total 69 separate lettings

o 86% of UK expiries renewed

o Notable new leases included 75,390 sq ft (7,003 sqm) to four tenants at East Gate, Munich, and 23,594 sq ft (2,192 sqm) to IWG Group at One Elmfield Park, Bromley

Portfolio changes since 30 June 2018

Repositioning the portfolio for growth.

· Disposals since 30 June 2018 comprised:

o Buspace Studios, 10 Conlan Street, London W10 for £13.5 million, 4.2% above the value at 31 December 2017 and at a net initial yield of 4.5%

o Three smaller individual disposals for an aggregate value of £6.6 million: Melita House, Chertsey; Units 3/5, Brooklands, Plymouth; and Marler Stern, Marl, Germany, which were sold in aggregate at 8.2% above their collective value at 31 December 2017

Developments and refurbishments

Completed developments will create value.

· At Ateliers Victoires, 48 Rue Croix des Petits Champs, Paris, the £8.2 million redevelopment completed in October 2018, and the fit-out of the entire 21,500 sq ft (2,000 sqm) of space to our tenant Epoka is under way

· The development of 16 Tinworth Street SE11 (formerly known as Phase 2 of Spring Mews), a 7-storey development of 9,181 sq ft (853 sqm) of office and student accommodation in Vauxhall, reached practical completion in August

Financing

Low cost of debt and substantial liquid resources.

· Redemption of £65 million 5.5% unsecured bonds due 2019 on 31 July 2018, 17 months early for £68.4 million

· Weighted average cost of debt reduced to 2.43% (30 June 2018: 2.65%)

· Balance sheet loan-to-value 38.1% (30 June 2018: 38.4%)

· Corporate bond portfolio reduced through disposals to £34.3 million (30 June 2018: £46.5 million)

· Current liquid resources of over £180 million, comprising £89 million of cash, £34 million of corporate bonds, and undrawn facilities in excess of £60 million

Portfolio statistics

A diversified, pan-European portfolio with strong fundamentals.

· Portfolio split by region:

· 49% of rent roll is subject to indexation increases

· 27% of rent roll is derived from government tenants and 26% from major corporations

Stakeholder engagement

Enhancing the environment.

· Listening to customers - in the UK and France, we completed surveys of occupiers at 29% of the Group's portfolio as part of a continual improvement process

· Award-winning responsibility - we have been awarded a Green Apple Award for best environmental practice on our recycling campaign across our managed UK assets

· Enhancing renewable energy - we have more than doubled our on-site renewable generation capacity through 3 large solar PV installations in 2018, taking our capacity to 304kW (2017: 128 kW) and further reducing energy costs for our customers

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For further information, please contact:

CLS Holdings plc +44 (0)20 7582 7766

www.clsholdings.com

Fredrik Widlund, Chief Executive Officer

John Whiteley, Chief Financial Officer

Liberum Capital +44 (0)20 3100 2222

Richard Crawley

Jamie Richards

Whitman Howard +44 (0)20 7659 1261

Hugh Rich

Robin White

Elm Square Advisers +44 (0)20 7823 3695

Jonathan Gray

Smithfield Consultants (Financial PR) +44 (0)20 3047 2476

Alex Simmons

Forward-looking statements

This document may contain certain 'forward-looking statements'. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from those expressed or implied by such forward-looking statements. Any forward-looking statements made by or on behalf of CLS speak only as of the date they are made and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. Except as required by its legal or statutory obligations, the Company does not undertake to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Information contained in this document relating to the Company or its share price, or the yield on its shares, should not be relied upon as an indicator of future performance.