Expanding into London flexible officesInvesting in opportunityJanuary 2018

rdireit.com

1Agenda

• Business update post FY17 results• Strategic rationale for major capital recycling• Transaction and deal specifics• Overview of the UK flexible office sector• Portfolio effects• Outlook and conclusion• Q&A

Investing in income-led opportunity St Dunstan’s, Monument

2RDI market update post FY17 resultsStrong investment and operational activity underpins a solid year to date performance

Committed to being the UK’s leading income focused REIT

• New name and refreshed brand• Leasing activity

• Completed 59 lease events totalling £5.3m gross annualised rent

• Occupancy remains high

• TK Maxx fitting out

• Key retail tenants delivered pleasing Christmas results

• Continued success in active recycling:• Increased holding in IHL from

17%  to 74%

• Completed the sale of the Leopard portfolio for €205m at a 10.8% premium realising €117.5m (£103.5m) of equity

• Strategic disposals of smaller assets totalling £28.8m, including: – Two regional offices in Bristol

and Plymouth

– Retail asset in Hull, let to House of Fraser

• Acquisition of Kingston Business Park for £18.8m at NIY of 5.8%, presenting clearly identified opportunities

• Acquisition of 80% interest in high quality London flexible office portfolio valued at £161.7m

Kingston-upon-Thames Business Park

3Relentless focus on delivering sustainable and growing incomeRecycling low growth income at a premium and capitalising on £/€ cyclical high

Opportunistic disposal capitalising on exceptionally strong investment market:German Retail Portfolio

• €205m disposal at £20m profit• €12.7m net annualised rental income;

implied 5.8% NIY• 66 assets with average lot size: €3.1m

• Limited near to medium-term income growth

• Completed on 29 December 2017

Increase investment in strong property fundamentals and structural growth opportunity:Office Space In Town (OSIT’s) portfolio

Recycle

• 80% interest in 4 flexible London offices valued at £161.7m

• £10.3m EBITDA; implied NIY >6%(1)

• Average lot size: £40.4m

• Significant income growth opportunity• Completed on 12 January 2018• LTV: 45% in line with strategic priority

to reduce group leverage

Diversified business model provides ability to opportunistically invest for growth(1) Net initial yield net of management fee.

4

• £161.7m portfolio value yielding >6%• Consideration of approximately £72.5m reflecting 80%

interest

• Existing debt of 45% LTV

• Established flexible office operator

• Anticipated yield on equity >9%• Experienced, high quality management team with

aligned interest through retained co-investment and management fee based on % of EBITDA• Office Space In Town was founded in May 2009 by

Giles and Niki Fuchs

• Manage 6 London and 5 regional flexible offices, including the 4 acquired assets

• Income focused cultural fit

• Non‑compete arrangements and right of first refusals on future OSIT developments in place

Transaction summaryEarnings accretive acquisition in line with strategic priorities

HoldCo

PropCo OpCo

80% 20%

Assets

Little Britain

Boundary Row

New Broad Street

St Dunstan’s

RDI experienced with investing in operational/serviced real estate

Ownership structure

Manag

emen

t agreem

ent

5

Increased allocation of capital to areas of long‑term economic growth• Sector outlook supported by occupier trends

and ongoing structural change• Increased exposure to London, particularly

Crossrail and Southbank

Differentiated flexible office business model• Owned model with a proven sustainable track record• Established and experienced operator with

aligned interests• Highly serviced, uniquely designed and wholly

refurbished space in recent years• Not competing directly with ‘lower margin’

co‑working models• Benefiting from progression of start‑ups in to

highly serviced but more ‘corporate’ space

Deal rationaleLondon exposure at over 6% NIY with improved growth prospects

Asset management opportunities• Synergies with existing portfolio• Improved brand awareness• Other revenue opportunities

Scalable platform• Right of first refusal on future developments• Simple integration of future acquisitions and

potential repurposing of existing assets• RDI experienced with investing in operational/

serviced real estate

Alignment with strategic priorities to continue delivering superior, sustainable and growing income

6

St Dunstan’s, EC3R

Boundary Row, SE1

Little Britain, EC1A

New Broad Street, EC2M

Market value: £63.7m £36.3m £32.3m £29.4mCapital value per sqft: 1,090 902 984 830Nearest tube: Monument Southwark St Pauls Liverpool StreetLettable area: 58,432 sqft 35,796 sqft 36,908 sqft 35,419 sqftNumber of desk: 694 453 328 352Number of clients: 58 29 27 35Average monthly desk rate(1): (license fees only)

£814 £635 £663 £644

Implied rent per sqft: £78 £66 £50 £63Occupancy(1): 86% 99% 92% 96%Average stay(1): n/a 30 months 23 months 30 monthsIllustrative opportunities: Shared space

revenuesHotel synergies

Space reconfiguration

Restricted use gym operator

In December 2017, 3 of the acquired assets were included on Easy Offices’ Top 10 serviced offices

Portfolio summary – buyers of strong property fundamentalsHigh quality London flexible office portfolio yielding >6%

(1) Source: Data as at 31 December 2017.

7

Waterloo

Cannon Street

Wapping

Whitechapel

Moorgate

Fenchurch StreetBlackfriars

Charing Cross

Little Britain,St Pauls

New Broad Street,Liverpool Street

St Dunstan’s,Monument

Boundary Row,Waterloo

Liverpool StreetFarringdon

Tottenham CourtRoad

Leicester Square

Embankment

Covent Garden

Temple

Holborn

Chancery Lane

Monument

London Bridge

Mansion House

Southwark

BankSt Paul’sAldgate

Borough

Tower Hill

Barbican

127 Charing Cross Road

Coburg HouseNewington House

Holiday Inn, Southwark

Existing RDI portfolio

OSIT portfolio

Well located assets complementing existing portfolioLocations weighted towards areas in London expected to deliver medium to long-term growth

High occupancy and enquiry levels underpinned by strong occupier demand

8London flexible office sectorLondon is the single largest and most developed flexible office market globally

Market summary and outlook• London economy is suited to flexible space, both culturally

and practically• Demand for flexible space in London is on the rise and supported

by increased occupier demand for flexible, cost efficient space• Flexible workspace and co‑working account for c.7% of Central London

office stock. JLL expects share to increase to 30% by 2030

• The sector is more resilient in times of economic uncertainty• Since Brexit, London job creation has slowed, however flexible offices

share of take‑up has increased

UK growth forecasts 2025CAGR

2014‑25

# serviced offices 6,952 10.7%# workstations 1,562,615 14.8%Monthly desk rate (ave.) £527 4.1%Source: Capital economics.

9Structure of London flexible office sectorOSIT’s ownership model allows control over use, design, density and cost base

Owned model

Leased model

Ownership modelsLondon operators by size

0.50.0 1.0 1.5 2.0 2.5

2.2

1.2

1.2

0.8

0.6

0.4

0.17

Regus

million sqft

WeWork

TOG

Workspace

LEO

i2 Office

RDI (OSIT portfolio)

0.2

0.2

Serviced Office Group

Business Environment Group

Owning the assets allows for:• Control over use, design and service provisions• Flexibility in density, rates and cost management• Freedom to realise asset management opportunities

Source: Serviced Offices: 'A new asset class' – Capital Economics ( June 2016), Savills, Cushman & Wakefield, The Instant Group.

10Competitor landscape changing from providing a product to providing high quality serviceNot competing directly with lower margin co-working models

Traditional office space (c.93% of Central London)• Providing a product• Inflexible longer leases• Generally larger, corporate tenants

Tre

ndy

Co

rpo

rate

Flex

ible

offi

ce s

pace

(c.7

% o

f Cen

tral

Lon

don)

Serviced offices (c.80% of flexible office space)• Providing a high quality and tailored service• Occupier demand from large corporates and smaller,

growing businesses• Flexibility to manage costs and adapt• More ‘corporate’ space

Co‑working space (c.20% of flexible office space)• Provides greater community and creative freedom• Experiencing significant growth and demand from small

companies and start ups• High density, but generally shorter average stay and less

profitable• Generally noisy, disruptive and confidentiality risk

11Current Central London serviced office monthly desk ratesOSIT portfolio provides premium flexible space at mid-market rates

Higher value Lower value

Cost per desk per month

West End Core£900 – £1,500 Southbank

£650 – £800

City Core£500 – £800

Strand£650 – £750

Eastern Fringe£450 – £550

Midtown£500 – £650

Northern Fringe/Shoreditch£450 – £600

Knightsbridge£900 – £1,300

Soho£800 – £950

Canary Wharf£700 – £900

Paddington£700 – £800

North of Mayfair£700 – £850

Victoria£650 – £850

Noho£650 – £800

North£600 – £800

Boundary Row£635 average

St Dunstan’s£814 average

New Broad Street£644 average

Little Britain£663 average

Targeting between 90% and 95% occupancy whilst maintaining competitive desk rates

Source: Knight Frank, Flexible Office ServicesOSIT average monthly desk rates as at 31 December 2017

12

• Globalising markets drive increased satellite offices, outsourcing and offshoring

• Technology supports mobility

• Businesses require flexibility and ability to adapt and save costs

• More flexible workforce with employees demanding flexibility and work life balance

• Collaboration and attracting talent

• Overflow and project space

Structural and behavioural change set to continue driving demand for flexible, cost efficient space

Currently 92% of all London companies have <9 staff. Estimated net growth of 1.8m small firms in next decade

Large corporates taking up more flexible space

Employment rates in key sectors for flexible offices anticipated to grow at twice the rate of wider economy

Occupier trends:

Business with 0 to 49 employees (small)

Business with 50 to 249 employees (medium)

Business with 250 or more employees (large)

2000

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

80

160

90

100

110

120

130

140

150

0.0

0.5

1.0

1.5

2.020%

Overall growthin jobs across thewhole economy

annually

Share of total flexible office space:

Information andcommunications

sector

Professional,scientific and

technicalactivities sector

Adminstrativeand support

serviceactivities sector

Financialand insurance

activitiessector

0.9%

2.0%

1.7%

40% 20%

1.5%

1.9%

Source: Capital Economics Source: Capital Economics

Major international investment bank

indicated an increase in flexible space to account for 30% of

total footprint

13Portfolio effectsSignificant progress in enhancing portfolio property fundamentals whilst maintaining EPRA NIY at 5.7%

Income growth targets underpinned by improved long-term occupier demand

(1) Pro forma reflects the portfolio as at 31 August 2017 adjusted for IHL, Leopard and OSIT transactions.

Increased exposure to long‑term economic growth geographies

Increased weighting to subsectors underpinned by strong occupier demand

Overall retail exposure reduced

28.8%

27.8%

38.5%

28.8%

Greater London Other big cities

13.9%

25.0%

33.9%

16%

60%

24%14.7%

12.2%

46.2%

21%

46%

33%

Pro forma(1)Pro forma(1) Pro forma(1)As at 31 Aug 2017As at 31 Aug 2017 As at 31 Aug 2017

UK Indexed Germany indexed Open market rent reviews exposed to strong occupier demand

Hotels Retail Commercial

14Outlook and conclusionSustainable and growing income underpinned by strong occupier demand

• Continued delivery against strategic priorities• Relentless focus on superior, sustainable and

growing income

• Portfolio quality and income credentials enhanced

• Reducing LTV

• OSIT, a clear income-led opportunity to enhance the portfolio

Medium-term guidance unchanged and continue to target 3% – 5% growth in

underlying earnings per share

Superior income

Sustainable income

Growing income

Scalable business

Efficient capital

structure

Income focused portfolio

Financial discipline

RDI REIT (formerly Redefine International)

15

Q Q&A

A16

Appendices

17Pro forma portfolio

Pro forma Portfolio

% ofportfolio by

market valueMarket

value (£m) Properties

Annualisedgross rentalincome (£m) ERV (£m) EPRA NIY

EPRA topped

up yieldReversionary

yield

Weightedaverage

lease length

EPRAoccupancy

(by ERV) % Indexed

UK Shopping Centres 19% 316.5 6 26.2 27.1 6.4% 6.8% 8.0% 8.0 3.3% 27.5%

UK Retail Parks 10% 169.9 5 11.4 10.8 5.8% 6.2% 6.0% 7.7 3.8% 4.7%

UK Other Retail 2% 28.3 3 2.3 2.3 7.5% 7.5% 7.8% 16.6 — —

UK Retail 31% 514.7 14 39.9 40.2 6.3% 6.6% 7.3% 8.4 3.2% 19.4%

UK Offices – Greater London 6% 90.2 3 3.4 4.4 2.8% 3.3% 4.6% 5.1 4.1% 23.7%

UK Offices – Flexible London 10% 161.7 4 10.3 10.3 6.0% 6.0% 6.0% 2.2 5.6% —

UK Offices – Regions 7% 113.6 15 9.6 9.2 6.9% 7.7% 7.6% 3.3 4.2% 23.0%

UK Distribution & Industrial 7% 117.6 4 6.3 7.5 4.8% 5.0% 6.0% 5.0 3.7% —

UK Automotive 3% 42.8 36 2.9 2.3 6.3% 6.3% 5.0% 12.3 — 100.0%

UK Commercial 33% 525.9 62 32.5 33.7 5.4% 5.7% 6.0% 4.3 4.2% 18.2%

Greater London RBL portfolio 11% 184.4 7 11.9 12.5 6.0% 6.0% 6.4% 8.3 — —

Edinburgh 2% 39.1 1 2.6 3.0 6.1% 6.1% 7.1% 8.5 — 3.4%

IHL Hotels – RBL portfolio 5% 75.4 5 6.0 6.0 7.5% 7.5% 7.5% 10.0 — —

IHL Hotels – Travelodge portfolio 2% 29.0 4 1.6 1.6 5.3% 5.3% 5.3% 21.1 — 100.0%

Enfield Travelodge 1% 16.1 1 0.7 0.7 4.2% 4.2% 4.2% 29.9 — 100.0%

UK Hotels 21% 344.0 18 22.8 23.8 6.2% 6.2% 6.5% 10.3 — 10.5%

Total UK 85% 1,384.6 94 95.2 97.7 5.9% 6.2% 6.6% 7.5 2.8% 16.9%

German Shopping Centres 11% 181.3 3 9.4 10.6 4.2% 4.3% 5.5% 4.8 0.6% 94.5%

German Supermarkets and Retail Parks 4% 68.7 11 4.8 4.9 5.9% 5.9% 6.6% 5.2 3.2% 94.4%

Europe 15% 250.0 14 14.2 15.5 4.7% 4.7% 5.8% 4.9 1.4% 94.5%

Total 100% 1,634.6 108 109.4 113.2 5.7% 6.0% 6.5% 7.1 2.6% 27.0%

18Product overview

Membership/product Contrib.(1) Description Desks/Clients Pricing(2) Avg. length

Office/ Desk rental 80%

• Private offices with capacity for 1‑60 people

• Flexible terms to allow for growth and change

• Access to all buildings in the portfolio

1,826 desks146 clients(3)

Pricing based per room per month:• £500 – £900+ implied

rate per desk

• Initial contract average 11 months

• Length of stay average 30(3) months

Meeting rooms 7%

• 37 individually designed meeting rooms• Capacity for 4‑100 people• Suitable for bespoke meetings, training

courses, seminars, interviews, product launches, etc.

• Catering facility provided

Pricing based on a per room per hour basis:• £20-£250 per hour• Larger spaces and

meetings are done on a delegate rate

Average annual spend, including catering:• Over £6.5k per internal

client• Over £250k by external

clients

Contracted Service Fees 10%

• Contracted IT and telephony, including bandwidth, handsets, call charges, IP’s, rack rental, etc.

• Beverage charges

Pricing based on individual tailored packages:• Introduced target

package price of £85 per head in 2017

Average annual spend:• Over £82 per desk

at 100% occupancy, including call charges

Adhoc Service Fees 3% • Including office customisation, support

services, photocopying, postage, etc.Pricing per product or service

• n/a

Virtual 0.1%• Virtual office product, which allows

clients to connect to all centres• Includes telephone answering and

mail handling

• Priced per month full Virtual product at £150

• Monthly rolling contracts

(1) Based on 2017 Sales Income.(2) Pricing excludes VAT.(3) As of Dec 2017.

19St Dunstan’s – London Monument‘Sunseekers Luxury Yachts’

Occupancy (%)

71

2016

86

2017

Average monthly desk rate (£) license fees only

694

2016

814

2017

Historic performance International Property Awards UK 2016Best office interior London

Note: St Dunstan’s only trading since 2015.

20Boundary Row – London Waterloo‘Alice in Wonderland’

Occupancy (%)

96

2016

96

2015

81

2014

99

2017

Historic performance Featured as Rightmove’s Dream PropertyOctober 2017

606

2016

584

2015

495

2014

635

2017

Average monthly desk rate (£) license fees only

21Little Britain – London St Paul’s‘Old English culture and English authors’

Historic performance

Occupancy (%)

93

2016

95

2015

90

2014

92

2017

661

2016

613

2015

577

2014

663

2017

Average monthly desk rate (£) license fees only

22New Broad Street – London Liverpool Street‘Historic London board game’

Historic performance

Occupancy (%)

91

2016

90

2015

93

2014

96

2017

623

2016

640

2015

545

2014

644

2017

Average monthly desk rate (£) license fees only