Proposed Firm Placing and Open Offer

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY NEW ORDINARY SHARES, NOR SHALL IT (OR ANY PART OF IT), OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH OR ACT AS ANY INDUCEMENT TO ENTER INTO, ANY CONTRACT OR COMMITMENT WHATSOEVER WITH RESPECT TO THE PROPOSED FIRM PLACING AND OPEN OFFER OR OTHERWISE, THIS ANNOUNCEMENT IS NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY NEW ORDINARY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT SOLELY ON THE BASIS OF INFORMATION IN THE PROSPECTUS EXPECTED TO BE PUBLISHED LATER TODAY. COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM REDEFINE INTERNATIONAL P.L.C.'s HEAD OFFICE AT TOP FLOOR, 14 ATHOL STREET, DOUGLAS, ISLE OF MAN IM1 1JA.

THE SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION. NO PUBLIC OFFERING OF THE SECURITIES DISCUSSED HEREIN IS BEING MADE IN THE UNITED STATES AND THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFERING OF SECURITIES FOR SALE IN THE UNITED STATES AND THE COMPANY DOES NOT CURRENTLY INTEND TO REGISTER ANY SECURITIES UNDER THE SECURITIES ACT. THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES.

13 September 2012

REDEFINE INTERNATIONAL P.L.C.

("Redefine"/ "Company"/ "Group")

PROPOSED FIRM PLACING AND OPEN OFFER TO RAISE GROSS PROCEEDS OF £127.5 MILLION

The Board of Redefine announces today the details of a proposed Firm Placing and Open Offer to raise approximately £127,500,000 (£122,475,000 net of expenses) through the issue of 490,384,616 New Ordinary Shares at an Issue Price of 26 pence per New Ordinary Share.

Redefine will shortly be publishing a Prospectus in relation to the Firm Placing and Open Offer and will convene an Extraordinary General Meeting to approve matters necessary to implement the proposed fundraising.

Summary:

·; Fundraising totalling £127,500,000 (£122,475,000 net of expenses) by way of a Firm Placing and Open Offer.

·; 89,223,606 New Ordinary Shares will be issued through the Firm Placing and 401,161,010 New Ordinary Shares will be issued through the Open Offer at the Issue Price of 26 pence per New Ordinary Share.

·; The Issue Price of 26 pence represents a discount of 7.5 pence (approximately 22.4 per cent). to the closing price of 33.5 pence per Ordinary Share on 12 September 2012 (being the last practicable date prior to the announcement of the Firm Placing and Open Offer) and a discount of 9.08 pence (25.9 per cent.) to the Company's fully diluted net asset value per Ordinary Share of 35.08 pence on 29 February 2012 (being the date of the Group's most recent published accounts).

·; The Board remains confident of the Group's long term growth prospects but, in order to achieve this growth, the Group needs to reduce its financial leverage and create a stable long-term capital structure.

·; Accordingly, the Board has decided that it is in the best interests of the Group and its Shareholders as a whole to raise approximately £122,475,000 (net of expenses) of new equity capital. The net proceeds of the Firm Placing and Open Offer will be used to reduce the Group's financial leverage through the repayment and restructuring of certain debt facilities as a priority and further to take advantage of distressed and/or attractive investments. The capital raised is expected to provide a long-term stable capital structure from which a sustainable dividend can be distributed.

·; The Firm Placing and Open Offer has the support of the Company's largest shareholder, Redefine Properties International, which holds approximately 71.7 per cent. of the Company's Ordinary Shares, and accordingly your Board is confident that the Firm Placing and Open Offer will be successful.

Terms of the proposed Firm Placing and Open Offer:

·; The Company is proposing to issue 89,223,606 New Ordinary shares through the Firm Placing and 401,161,010 New Ordinary Shares through the Open Offer, in each case at the Issue Price of 26 pence, raising approximately £127,000,000 (£122,475,000 net of expenses).

·; Under the Open Offer the Company proposes to raise £104,301,863 (before expenses).

·; Under the Firm Placing the Company proposes to raise £23,198,137 (before expenses), in respect of which £10,318,140 has been conditionally placed by the Joint Sponsors with institutional and other investors pursuant to the Placing Agreement and £12,879,997 will be subscribed for pursuant to the RIFM Placing Agreement.

·; Qualifying Shareholders are, subject to the terms and conditions of the Open Offer, being given the opportunity under the Open Offer to apply for New Ordinary Shares at the Issue Price on the following pro rata basis:

9 Open Offer Shares for every 13 Existing Ordinary Shares

held by them and registered in their names on the Record Date and so in proportion to any other number of Existing Ordinary Shares then held, rounded down to the nearest whole number of Open Offer Shares.

·; Qualifying Shareholders applying for their full Basic Entitlements may also apply, under the Excess Application Facility, for Excess Shares in excess of their Basic Entitlement. Qualifying Shareholders eligible to apply under the Excess Application Facility will be entitled to apply for up to a maximum number of Excess Shares equal to 1 times the Basic Entitlement of such Qualifying Shareholders at the Record Date, rounded down to the nearest whole number of Excess Shares as at the Record Date, allocated in such manner as the Directors may, in their absolute discretion determine.

·; Those Directors, who in aggregate hold 4,600,040 Existing Ordinary Shares representing approximately 0.79 per cent. of the Existing Ordinary Shares, have irrevocably undertaken to take up their Open Offer Entitlements in respect of an aggregate of 3,184,642 New Ordinary Shares (£828,007 in aggregate) and have irrevocably undertaken to vote in favour of each of the Resolutions at the EGM.

·; Redefine Properties International, which holds 415,507,157 Existing Ordinary Shares (representing approximately 71.7 per cent. of the Existing Ordinary Shares) has irrevocably undertaken to take up, in full, its Basic Entitlement in respect of 287,658,801 New Ordinary Shares (£74,791,288 in aggregate) and has irrevocably undertaken not to apply for any Excess Shares.

·; Certain other existing Shareholders, who in aggregate hold 60,645,071 Existing Ordinary Shares representing approximately 10.5 per cent. of the Existing Ordinary Shares, have irrevocably undertaken to take up their Open Offer Entitlements in respect of an aggregate of 38,523,505 New Ordinary Shares (£10,016,112 in aggregate).

·; The balance of Open Offer Shares not otherwise taken up by existing Shareholders under the Open Offer (including the Excess Application Facility) have been conditionally placed by the Joint Sponsors and RIFM with institutional and certain other investors pursuant to the Placing agreement and the RIFM Placing Agreement.

·; Further, Redefine Properties International has irrevocably undertaken to vote in favour of each of the Resolutions at the EGM, representing approximately 71.7 per cent. of all votes capable of being cast in respect of each of the Resolutions.

·; The Firm Placing and Open Offer are conditional, inter alia, on Admission and the passing of the Resolutions.

·; Admission is expected to occur and dealings in the New Ordinary Shares are expected to commence on 9 October 2012.

·; Investec Bank plc and Peel Hunt LLP are acting as Joint Sponsor and Joint Brokers to the Company.

Commenting, Greg Clarke, Chairman of Redefine, said:

"The launch of our £127.5 million Firm Placing and Open Offer represents a significant step in the Company's evolution. We have achieved considerable success in the restructuring of our finance facilities over the last year which has significantly strengthened the Company's financial position. The Company is now well placed to initiate this capital raising to further reduce Redefine's leverage and provide capital to take advantage of distressed or attractive opportunities.

"We are pleased to have secured underwriting or irrevocable commitments for the full £104.3 million Open Offer and are delighted to announce additional Firm Placing commitments of £23.2 million from leading institutions. We look forward to applying the proceeds in order to drive the next stage of our growth and deliver value to our shareholders."

For further information, please contact:

A copy of the Prospectus and presentation will both be made available today on the Company's website http://www.redefineinternational.com 

Notes to editors:

Redefine International P.L.C.

Redefine is an income focused property investment company with exposure to a broad range of properties and geographical areas. The Company has direct and indirect property investments geographically diversified across the UK, Germany, Switzerland, the Channel Islands, the Netherlands and Australia, providing exposure to the retail, office, industrial and hotel sectors. On 23 August 2011 the Company completed a reverse takeover of RIHL (then called Redefine International plc), an AIM listed company. The Company is admitted to trading on the main market of the London Stock Exchange and is part of the Redefine Properties group.

The Company is managed by its Investment Advisor, RIFM.

Investec Bank plc

Investec Bank plc ("Investec"), which is authorised and regulated in the United Kingdom by the FSA, is acting solely for the Company in relation to the Firm Placing and Open Offer and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Investec nor for providing advice in relation to the Firm Placing and Open Offer or any other matter referred to in this announcement.

Peel Hunt

Peel Hunt LLP ("Peel Hunt") which is authorised and regulated in the United Kingdom by the FSA, is acting solely for the Company in relation to the Firm Placing and Open Offer and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Peel Hunt nor for providing advice in relation to the Firm Placing and Open Offer or any other matter referred to in this announcement.

This announcement and the information contained herein is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada or Japan or any jurisdiction into which the publication or distribution would be unlawful.

This announcement is for information purposes only and does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any New Ordinary Shares in the United States, Australia, Canada or Japan or any jurisdiction in which such offer or solicitation would be unlawful. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. The securities have not been and will not be registered under the Securities Act and may not be offered, sold or transferred, directly or indirectly, within the United States unless registered under the Securities Act except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The securities are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. No public offering of the shares referred to in this announcement is being made in the United States, Australia, Canada or Japan or any jurisdiction in which such public offering would be unlawful.

The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding the Company's and/or the Group's intentions, beliefs or current expectations concerning, among other things, the Company's and/or the Group's business, results of operations, financial position, prospects, growth and strategies.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the actual results of the Company and/or the Group's operations, financial position and the development of the markets and the industries in which the Group operates may differ materially from those described in, or suggested by, the forward-looking statements contained in this announcement. In addition, even if the Group's results of operations and financial position and the development of the markets and the industries in which the Company and the Group currently operate, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. A number of risks, uncertainties and other factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements.

Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement reflect the Group's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business, results of operations, financial condition, prospects, growth and strategies. Investors should specifically consider the factors identified in this announcement, which could cause actual results to differ, before making an investment decision. Subject to the requirements of the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules, the Company undertakes no obligation publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement.

FIRM PLACING AND OPEN OFFER

EXTRACT FROM THE CHAIRMAN'S LETTER

INTRODUCTION

The Board of Redefine announces today that it proposes to undertake a Firm Placing and Open Offer to raise approximately £127,500,000 (£122,475,000 net of expenses) through the issue of 490,384,616 New Ordinary Shares at an Issue Price of 26 pence per New Ordinary Share. The Issue Price represents a discount of approximately 22.4 per cent. to the Closing Price of 33.5 pence per Existing Ordinary Share on 12 September 2012 (being the last Business Day prior to the announcement of the Firm Placing and Open Offer). 89,223,606 New Ordinary Shares will be issued through the Firm Placing and 401,161,010 New Ordinary Shares will be issued through the Open Offer.

The Firm Placing and Open Offer is conditional upon, amongst other things, the approval of Shareholders at the Extraordinary General Meeting and upon the Placing Agreement becoming unconditional in all respects. The purpose of this announcement and the Prospectus and circular containing a notice of the Extraordinary General Meeting issued today, is to explain the background to and rationale for the Firm Placing and Open Offer and why your Board believes that proceeding with the Firm Placing and Open Offer is in the best interests of Shareholders as a whole and, accordingly, unanimously recommends that you vote in favour of the Resolutions at the Extraordinary General Meeting, details of which are set out in the Notice of Extraordinary General Meeting in Part XVIII of the Prospectus.

In addition, the Board also proposes to effect a share consolidation subsequent to completion of the Firm Placing and Open Offer, under which the Existing Ordinary Shares and the New Ordinary Shares issued pursuant to the Firm Placing and Open Offer will be consolidated into consolidated Ordinary Shares on a 0.9 for 1 basis.

INFORMATION ON THE COMPANY

The Company, which is not regulated or authorised in any jurisdiction, is an Isle of Man registered property investment company with an existing portfolio of investments geographically diversified across the UK, Germany, Switzerland, the Channel Islands, the Netherlands and Australia, providing exposure to the retail, office, industrial and hotel sectors. The Company completed the Reverse Takeover of RIHL (then called Redefine International plc), an AIM listed company, on 23 August 2011 and the enlarged group was admitted to trading on the main market for listed securities of the London Stock Exchange on that date. The Company is part of the Redefine Properties group. The majority shareholder of the Company is Redefine Properties International, which is listed on the JSE. The ultimate holding company, Redefine Properties, which has a 54 per cent. shareholding in Redefine Properties International, is listed on the JSE and has a market capitalisation of approximately £1.9 billion.

The Company is a diversified, income focused property investment company owning 182 properties in the UK and Continental Europe totalling 7,072,000 square feet, valued by external valuers at £942.7 million as at 31 August 2012 (assuming 100 percent ownership of each of the properties). The Company also owns a 23.08 per cent. interest in ASX listed Cromwell, with a market value of approximately £132.1 million as at 31 August 2012 (based on an exchange rate of £1.536 AUD).

For the financial year to 31 August 2011, the Group reported an annual rental income of £26.8 million, profit from operations of £23.3 million and profit before tax of £5.1 million. As of 29 February 2012, the Company had total assets of £1,196.6 million, net debt of £821 million and total equity of £217 million. The Company's market capitalisation was approximately £194.1 million as at 12 September 2012, being the last practicable date prior to the date of this announcement.

The Company is advised on an exclusive basis by the Investment Adviser. Redefine Properties indirectly owns a 76.05 per cent. shareholding in the Investment Adviser. The Investment Adviser's management team has considerable expertise in property and structured finance.

BACKGROUND TO AND REASONS FOR THE FIRM PLACING AND OPEN OFFER

On 13 July 2011 the Company announced the Reverse Takeover of Redefine by Wichford. As part of the terms of the merger, a Capital Raising Implementation Agreement was entered into between the Company, Redefine Properties International (its largest shareholder following completion of the Reverse Takeover) and its ultimate parent, Redefine Properties. The Capital Raising Implementation Agreement was entered into with the objective of reducing the Group's debt to equity ratio and to assist with, inter alia, the refinancing of the Company's Delta and Gamma debt Facilities, which mature in October 2012.

The Group's current loan to value ratio of 82.5 per cent. needs to be reduced in order to achieve a long term stable capital structure from which a sustainable dividend can be distributed to Shareholders. As a result of a significant decline in property values, the Directors believe the current loan to value ratio is excessive, and should be reduced to provide a stronger capital base and lower financial leverage. The target in the medium term is for an overall loan to value ratio (net of cash) of not more than 60 per cent.

Following on-going negotiations with the servicer of the Delta Facility, the Company has reached agreement to restructure the Delta Facility and, at this point in time, envisages a sales and marketing process for the properties which are the subject of the Gamma Facility which will result in a smaller portfolio of core assets let to the UK Government. The reduction in exposure to regional government-let offices will enhance the overall quality of the Group's portfolio and significantly reduce the risk associated with on-going Government austerity programmes.

The Company has agreed to the sale of the VBG assets with the sales proceeds being utilised to repay the associated loan facilities in full and final settlement of the outstanding balances. The balance of the loan, €37.3 million, not repaid from the €80 million sales proceeds will be fully sub-ordinated with the Company acquiring the remaining debt balance for a nominal amount. In addition, the servicer has acknowledged in the workout agreement that there shall be no further claims against the remaining debt balance. As part of the sales process, the Company has agreed to acquire a 50 per cent. share of the assets in joint venture with a major pension fund.

The Board has also identified new acquisition opportunities in German discount retail units and London-based limited service hotels.

As part of the Company's strategy to increase its operational focus and reduce its leverage, the sale of certain legacy and non-core assets will continue. The Company has successfully completed the sale of shares in the companies which held a 96 per cent. shareholding in the Justice Centre in Halle, Germany. The sale removed €37.1 million of debt from the Company's balance sheet. The sale of certain smaller non-core assets will also be targeted to reduce the overall number of assets within the Group's portfolio.

The Company remains committed to simplifying its corporate structure and continues to explore ways in which it could eliminate the separate listings and corporate structures of Redefine and Redefine Properties International on the London Stock Exchange and JSE respectively. It is the Company's ultimate intention to create a single vehicle with a primary listing on the London Stock Exchange. Approval for this is dependent on SARB consent, which to date has not been forthcoming but which the Company continues to pursue as part of its longer term strategy. The Company continues to monitor the situation and any changes to policy which would allow the Company to be dual-listed on the London Stock Exchange and JSE respectively.

The proposed capital raising as envisaged in the Reverse Takeover prospectus will proceed as set out in the letter from the Chairman of the Company contained in the Prospectus and the Directors can confirm that Redefine Properties International has agreed to subscribe for its full Basic Entitlement under the Open Offer (amounting to £74,791,288) and has undertaken to support the Company by voting in favour of the Resolutions at the EGM.

The equity funding has been structured as a Firm Placing and Open Offer to minimise the time and cost of a traditional rights offer, whilst still giving Shareholders a pre-emptive entitlement to participate in the capital raise. The Firm Placing element has been included to broaden the institutional shareholder base, which is considered important in light of the single largest majority shareholder Redefine Properties International currently holding over 70 per cent. of the Company's issued share capital.

The Directors believe that the Issue Price represents an attractive opportunity for the Company to secure additional equity funding without significant dilution if Shareholders participate in the Open Offer. Furthermore, given the discount to net asset value that the issued Ordinary Shares currently trade at (congruous with the sector), the Board believe that it would be imprudent to issue shares at a large discount to the prevailing share price.

USE OF PROCEEDS

The Directors intend to use the net proceeds of the Firm Placing and Open Offer amounting to approximately £122,475,000 million to reduce the Group's financial leverage through the repayment and restructuring of certain debt facilities as a priority and further to take advantage of distressed and/or attractive investments. The capital raised is expected to provide a long-term stable capital structure from which a sustainable dividend can be distributed.

Restructuring of the Delta Facility

Following ongoing negotiations with the servicer, the Company has reached an in principle agreement on restructuring and extending the Delta Facility for a period of approximately two and a half years. Key commercial terms include:

·; The repayment of debt associated with seven selected assets for a total consideration of £33.5 million. Six of the selected assets (excluding the Lyon House development site) are occupied primarily by UK central government departments, providing a WAULT of 17 years and a net initial yield on the repayment amount of 7.6 per cent.

·; Lyon House, Harrow is included in the seven assets which are to be released from security. The Company received full planning consent in May 2012 for a new residential-led, mixed use, development scheme on the currently vacant Lyon House and Equitable House sites in the heart of Harrow town centre. The development, between St. John's Road and Lyon Road, will provide a total of 287 residential units, of which 49 will be affordable housing. The scheme will offer a range of accommodation including maisonettes and apartments across seven separate blocks of varying heights. The Company has already concluded a development agreement with Metropolitan Housing Trust for the affordable element of the scheme.

·; The existing facility balance of £114.6 million will be reduced to £81.1 million following repayment and release of the seven assets identified above. The facility will be extended to 15 April 2015 during which period the Company has agreed to undertake a sales and marketing process to realise assets and repay, to the extent possible, the remaining debt balance. The Company will continue to receive a proportion of net cashflows after debt service costs (subject to certain limited sales targets) on those assets still secured by the facility. The facility margin will remain unchanged at 0.75 per cent. p.a. during the period of the extension with interest being charged at 3 months Libor plus the 0.75 per cent. margin. The Company aims to enter into an interest rate cap with a strike price of 4.95 per cent. p.a. (equating to the previous and now matured swap rate) for the period of the extension.

VBG sale and restructuring

As announced on 3 August 2012, the Company has agreed in principle the sale and restructuring of all four VBG assets. The proceeds from the sale will be used to repay the VBG financing facilities in final settlement of the €117.3 million (£98.7 million) outstanding loan balance. The carrying value of debt as at 29 February 2012 was £93.4 million reflecting the loan value (£98.7 million) less the remaining fair value adjustment (£5.3 million). The balance of the loan, €37.3 million, not repaid from the €80 million sales proceeds will be fully sub-ordinated with the Company acquiring the remaining debt balance for a nominal amount. In addition, the servicer has acknowledged in the workout agreement that there shall be no further claims against the remaining debt balance.

The VBG1 facility matured on 15 January 2010 and was subsequently extended to 15 January 2012. The VBG2 facility matured on 21 April 2011. Both facilities were not repaid on the original or extended maturity dates. Following the expiry of the VBG1 and VBG2 facilities on 15 January 2012 and 21 April 2011 respectively, the borrowers entered into separate standstill agreements in respect of both facilities pursuant to which the lenders agreed to refrain from exercising any rights they have in respect of the repayment breaches. As part of the agreed VBG restructure a workout agreement was entered into in July 2012, as set out in Part XV of the Prospectus, and contains further standstill provisions in respect of both facilities which supersede the previous standstill agreements.

As part of the VBG restructure, the Company will dispose of 50 per cent. of its interest in Wichford VBG Holding S.a.r.l (the VBG holding company) for a nominal value establishing a new joint venture with a major pension fund. Wichford VBG Holding S.a.r.l, and certain of its subsidiary companies falling under the joint venture, have reached agreement with the servicer to dispose of the VBG assets for €80.0 million to new subsidiary companies within the joint venture vehicle. The proceeds from the disposal will be used to settle the original VBG facilities in full with the assets being released from security.

The new joint venture will part fund the gross acquisition cost (inclusive of transaction costs) of €84.9 million with a new five year €57.0 million debt facility at an indicative all in interest rate of 2.8 per cent. The Company will inject €14.0 million (£11.7 million) for its 50 per cent. stake which shows an initial yield on equity of 19.0 per cent. per annum. The Company will take on full management responsibility for the VBG assets.

The VBG assets comprise four individual office properties let to a German government-backed social insurance body in Berlin, Dresden, Cologne and Stuttgart. The leases have unexpired terms of between 7.8 and 12.6 years and are indexed to 100 per cent. of German CPI.

Refinancing and deleveraging of existing facilities

The Company has agreed and completed the restructuring of the Delamere Place, Crewe Facility with Aviva in May 2012. The outstanding balance of £17.15 million was settled in return for an £11.0 million cash payment. The £11.0 million repayment was funded from the Coronation Facility although it is intended that the Coronation Facility will be repaid using £11.0 million of the proceeds of the Firm Placing and Open Offer.

In addition to the Coronation Facility repayment and in line with the Group's strategy to reduce its overall debt to equity ratio, various near term facilities detailed below totalling £71.3 million are anticipated to be refinanced at loan to value ratios of approximately 60 per cent., resulting in equity requirements of approximately £8.9 million In the absence of suitable refinancing options, the Company has a number of alternative options at its disposal including the repayment of the loans through the sale of the secured assets, the use of cash funds or a combination of these alternatives. All of these loans are non-recourse to the Group meaning the Group is not obliged to inject new capital into these facilities on maturity.

The following facilities have been taken into account in arriving at the anticipated capital requirements above:

·; Zeta Portfolio, Lloyds TSB - the £46.0 million facility matures in May 2013. The last reported loan to value ratio was 63.3 per cent.

·; Newington House, Allied Irish Bank - the £6.4 million facility matures in September 2013. The last reported loan to value ratio is 65.1 per cent.

·; Swansea, Lloyds TSB - the £1.4 million facility matures in June 2014. The last reported loan to value ratio was 88.7 per cent.

·; Ciref Berlin/German Portfolio, ABN Amro - the €22.0 million (£17.5 million) facility matures in September 2014. The last reported loan to value ratio was 92.8 per cent.

Funds for new opportunities

Current economic conditions, a lack of bank finance and a general deleveraging process in the broader real estate sector are creating opportunities for well capitalised investors. Approximately £57.4 million (assuming net proceeds from the Firm Placing and Open Offer of £122,475,000 million) has been earmarked to take advantage of distressed and/or attractive investment opportunities where the Company aims to achieve a 10 per cent. yield on equity on a blended basis.

The Company is in discussions on a number of potential investment opportunities, particularly within the London based limited service hotel sector and the German discount retail market. Investments currently under negotiation but not yet committed total approximately £14.0 million

CURRENT TRADING AND PROSPECTS FOR THE GROUP

Current Trading

UK Stable Income

The investment market for UK regional offices remains subdued as concerns over excess supply, government austerity measures and the lack of availability of bank funding continue to impact demand for these types of assets. Transactional activity and values have been negatively impacted but the Company remains focused on maintaining occupancy levels and income across the portfolio. The Company's exposure to UK regional offices is anticipated to reduce materially as a result of the negotiations on the Delta and Gamma financing facilities.

Overall occupancy has reduced slightly to 93.3 per cent. (February 2012: 95.0 per cent.). A number of smaller asset management initiatives are in progress and shorter term leases totalling 195,000 sq ft are under negotiation for extension or renewal.

Following the refurbishment of Coburg House in South London, the Company has let the top floor (5,550 sq ft) to InterHealth Medical at a rent of £69,313 p.a. This recent letting successfully completes a complex asset management plan to retain the existing tenant in occupation while refurbishing the property, extending the existing tenants lease to 2023 with a break in 2018 and re-letting the vacant top floor. The property is now fully occupied.

Harrow redevelopment

Following receipt of full planning consent for a new residential led, mixed use development scheme on the currently vacant Lyon House and Equitable House sites in the heart of Harrow town centre, the Company has received Greater London Authority approval. It has also made significant progress on the Section 106 agreement with Harrow Borough Council.

The development, between St. John's and Lyon Roads, will provide a total of 287 residential units, of which 49 will be affordable housing. The scheme will offer a range of accommodation including maisonettes and apartments across seven separate blocks of varying heights. The Company has already concluded a development agreement with Metropolitan Housing Trust for the affordable housing element of the scheme.

The Company intends to secure a joint venture partner to carry out the development of the scheme. The development is anticipated to commence in early 2013, subject to agreement on terms and the completion of the Section 106 agreement.

UK Retail

Whilst overall conditions remain difficult, there have been signs of improved consumer confidence in the second quarter of the calendar year, possibly driven by the Queen's Diamond Jubilee celebrations and the Olympics. There is a risk however, that this could be overshadowed by the impact of the continuing European sovereign debt crisis.

Although the number of retailer insolvencies appears to have stabilised recently, certain retailers remain under pressure. Some comfort can be taken from the fact that, with certain exceptions including, Game, Clinton Cards and Blacks Leisure, the profile of retailers entering administration has mainly been the smaller local and regional operators.

The portfolio maintained a healthy occupancy rate of 95.2 per cent. (94.8 per cent. as at 29 February 2012). Overall footfall for the period to 31 May 2012 was down 0.1 per cent. year on year.

Europe

The European portfolio has maintained near full occupancy and is providing consistent inflation-linked rental income returns. The majority of the Group's exposure is to German discount retail assets let to predominantly multi-national discount retailers and office assets let to government-backed organisations.

Hotels

The Hotel portfolio tenant continues to trade well and, with a strong peak season and Olympic period, underlying performance is expected to exceed revenue budgets for the current quarter. London's Organising Committee of the Olympic and Paralympic Games (LOCOG) took occupancy of 222 rooms across the Company's hotel portfolio throughout the period of the Olympic and Paralympic Games.

Occupancy throughout the two-week Olympic period was an exceptional 98 per cent.

Cromwell Property Group ("Cromwell")

The Company's strategic 23.08 per cent. shareholding in Cromwell continues to produce consistent distributions supported by the high quality investment portfolio. The June 2012 distribution, announced as AUD 1.75 cents per security, was received on 17 August 2012. The receipt of this distribution was fixed at an exchange rate of AUD1.5032:GBP1.00. Distribution guidance for the 2012 financial year has been confirmed by Cromwell at AUD 7.0 cents per security. Cromwell continues to refine its portfolio to focus on those assets considered to have the highest risk-weighted return.

Debt Restructuring

As at the date of the Prospectus, the Company has agreed the restructuring of approximately £254.5 million of debt secured against the Group's assets, including the sale of the VBG assets and the restructuring of the Delta Facility, both legacy investments.

The Gamma Facility is due to mature during October 2012, at which time the £199.7 million principal balance will become due and payable. The Gamma Facility is secured against 38 properties in the Company's UK stable income portfolio that are valued at approximately £155.7 million and generated rental income of approximately £17.1 million in the year ended 30 August 2011. The Company is in on-going negotiations with the facility servicer to amend or restructure the terms of the facility, however, the parties have not reached any agreement to date.

Given the existing loan to value ratios within the Gamma Facility, the Directors cannot recommend to Shareholders that a significant amount of capital be utilised to refinance the facility and, therefore, the Directors envisage a sales and marketing process for the Gamma assets. The Company will continue to explore all available options to refinance all or part of the Gamma Facility on terms that are attractive to Shareholders and justify new capital being invested, however, there is no certainty that any agreement will be reached. If no agreement is reached the servicer may appoint an administrator to realise the assets and utilise the proceeds to repay the Gamma Facility. The servicer may enforce its security rights which would include debentures in respect of all secured Gamma assets and the shares in each Gamma subsidiary granted as security. Were the servicer to enforce its security over all the Gamma assets and such subsidiaries' shares there would be a positive impact on the Group's net asset position but the Group's rental income would be reduced by the amount otherwise receivable in connection with the Gamma assets. The Directors are currently of the opinion that whilst it is unlikely that an agreement will be reached to restructure the Gamma Facility prior to the maturity date of the loan they expect that the servicer will grant a standstill period whilst a workout agreement can be agreed with respect to the Gamma Facility and the associated assets.

Prospects

There has been substantial progress in meeting the Group's strategic objectives, particularly in respect of exiting non-core assets, restructuring debt facilities and investing into sectors which continue to perform and deliver strong income returns. These actions, together with the proposed capital raise, will result in a significantly strengthened balance sheet and reduction in exposure to near term debt maturities.

Lower valuations are anticipated in the near term as rental and capital growth remains susceptible to fragile economic conditions and the availability of capital remains limited. These conditions are, however, providing attractive opportunities for well capitalised investors.

The progress achieved in this last period has placed the Company in a significantly stronger position from which to raise the proposed new capital. Over £254.5 million of legacy facilities have been, or are in the process of being, restructured or repaid, significantly reducing both leverage and near term refinancing requirements.

The Reverse Takeover Prospectus dated 13 July 2011 included a profit forecast which is still outstanding in relation to the year ended 31 August 2012. In accordance with the Prospectus Rules Appendix 3 Annex 1 13.4 the Directors confirm that, at the date of the Prospectus, the profit forecast and the principal assumptions on which it was based are still valid and correct in all material respects, save for significant variances to the assumptions relating to fair value adjustments both in respect of investment property and finance expenses, which are factors outside of the control or influence of the Directors, and the impact of the Halle sale in July 2012 described in Part V of the Prospectus. In particular, the forecast for distributable earnings included in the profit forecast remains valid and correct.

KEY TERMS OF THE FIRM PLACING AND OPEN OFFER

Redefine is proposing to raise approximately £122,475,000 (net of expenses) by way of the Firm Placing and Open Offer. 89,223,606 New Ordinary Shares will be issued through the Firm Placing and 401,161,010 New Ordinary Shares will be issued through the Open Offer.

Under the Open Offer the Company proposes to raise £127,500,000 (before expenses). Redefine Properties International has irrevocably undertaken to accept its Basic Entitlement under the Open Offer in respect of £74,791,288 of Open Offer Shares. The Company has received irrevocable undertakings from certain other existing Shareholders to accept Basic Entitlements under the Open Offer in respect of £10,016,112 of Open Offer Shares. Further details of such irrevocable undertakings are set out in the Prospectus. In addition, £3,796,185 of Open Offer Shares have been conditionally placed by the Joint Sponsors with institutional and other investors pursuant to the Placing Agreement, and £15,698,278 of Open Offer Shares have been conditionally placed with certain other investors pursuant to the RIFM Placing Agreement, in each case subject to clawback to satisfy valid applications under the Open Offer. Further details of the Placing Agreement, and the RIFM Placing Agreement are set out in the Prospectus.

Under the Firm Placing the Company proposes to raise £23,198,137 (before expenses), in respect of which £10,318,140 has been conditionally placed by the Joint Sponsors with institutional and other investors pursuant to the Placing Agreement, and £12,879,997 will be subscribed for pursuant to the RIFM Placing Agreement.

The Issue Price of 26 pence per Open Offer Share and Firm Placed Share represents a discount of 7.5 pence (22.4 per cent.) to the closing price of 33.5 pence per Ordinary Share on 12 September 2012 (being the last practicable date prior to announcement of the Firm Placing and Open Offer) and a discount of approximately 25.9 per cent. to the net asset value per Existing Ordinary Share of 35.08 pence at 29 February 2012. However, your attention is drawn to paragraph 5 of Part VIII of the Prospectus which explains the valuation movements since 29 February 2012.

Open Offer

Redefine Properties has underwritten Redefine Properties International's participation of up to £65.6 million, and Redefine Properties International has irrevocably undertaken to subscribe for its pro rata share of 71.7 per cent. under the Open Offer. The balance of Open Offer Shares not otherwise taken up by existing Shareholders under the Open Offer (including the Excess Application Facility) have been conditionally placed by the Joint Sponsors and RIFM with institutional and certain other investors pursuant to the Placing Agreement and the RIFM Placing Agreement.

Qualifying Shareholders are being given the opportunity to subscribe under the Open Offer for Open Offer Shares at the Issue Price payable in full on application and free of expenses, pro rata to their existing holdings of Existing Ordinary Shares, on the following basis:

9 Open Offer Shares for every 13 Existing Ordinary Shares held by them

and registered in their names on the Record Date, and so in proportion to any other number of Existing Ordinary Shares then held, rounded down to the nearest whole number of Open Offer Shares.

Qualifying Shareholders applying for their full Basic Entitlement may also apply, under the Excess Application Facility, for Excess Shares in excess of their Basic Entitlement at the Issue Price, payable in full on application and free of expenses. Qualifying Shareholders eligible to apply under the Excess Application Facility will be entitled to apply for up to a maximum number of Excess Shares equal to 1 times the Basic Entitlement of such Qualifying Shareholders validly applying for Excess Shares as at the Record Date, rounded down to the nearest whole number of Excess Shares, allocated in such manner as the Directors may, in their absolute discretion determine.

Fractions representing Open Offer Shares which would otherwise have arisen under the Open Offer (including under the Excess Application Facility) following the Consolidation will be aggregated and sold in the market place for the benefit of the Company.

The Open Offer is not a "rights issue". Invitations to apply under the Open Offer are not transferrable. Application Forms are not documents of title and cannot be traded. Qualifying Shareholders should be aware that, in the Open Offer, unlike in the case of a rights issue, any New Ordinary Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders. Qualifying Shareholders applying for their full Basic Entitlement may, however, apply for Open Offer Shares in excess of that Basic Entitlement through the Excess Application Facility.

The Firm Placing and Open Offer is conditional, inter alia, upon:

·; the passing, without amendment, of the Resolutions;

·; Admission taking place by no later than 8.00 a.m. on 9 October 2012 (or such later time and date as the Company, Investec and Peel Hunt may agree being not later than 31 October 2012); and

·; the Placing Agreement and RIFM Placing Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms.

Details of the Open Offer and the terms and conditions on which it is being made, including procedure for application and payment, are contained in Part VII of the Prospectus and for Qualifying Non-CREST Shareholders in the accompanying Application Form.

To be valid, Application Forms (duly completed by Qualifying Non-CREST Shareholders) in respect of Basic Entitlements and payment in full for the Open Offer Shares applied for in respect of Basic Entitlements and in respect of Open Offer Shares pursuant to the Excess Application Facility and payment in full for such Excess Shares applied for, should be delivered to the Company's Receiving Agent Capita Registrars, Corporate Actions, 34 Beckenham Road, Beckenham, Kent BR3 4TU by post or (during normal business hours only) by hand as soon as possible but in any event so as to arrive no later than 11.00 a.m. on 3 October 2012.

Application has been made for the Basic Entitlements and the Excess CREST Open Offer Entitlements to be admitted to CREST. It is expected that the Basic Entitlements and Excess CREST Open Offer Entitlements will be admitted to CREST at 11.00 a.m. on 14 September 2012. The Basic Entitlements and Excess CREST Open Offer Entitlements will also be enabled for settlement in CREST at 11.00 a.m. on 14 September 2012.

Qualifying CREST Shareholders should note that, although the Basic Entitlements and Excess CREST Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit.

Application will be made to the UKLA for the Open Offer Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the Open Offer Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective on 9 October 2012 and that dealings in the Open Offer shares will commence at 8.00 a.m. on the same day.

The Open Offer Shares, when issued and fully paid, will be identical to and rank in full with the Ordinary Shares for dividends and other distributions declared, save that the New Ordinary Shares will not rank for the second interim dividend expected to be paid on 22 November 2012 to those Shareholders on the register as at 28 September 2012, and will rank pari passu in all respects with the existing Ordinary Shares as at the date of issue. No temporary documents of title will be issued.

Any Qualifying Shareholder who has sold or transferred all or part of his/her registered holding(s) of Ordinary Shares prior to the close of business on 11 September 2012 is advised to consult his or her stockbroker, bank or other agent through or to whom the sale transfer was effected as soon as possible, since the invitation to apply for Open Offer Shares under the Open Offer may be a benefit which may be claimed from him/her by the purchaser under the Rules of the London Stock Exchange.

Redefine Properties International has irrevocably undertaken not to apply for any further New Ordinary Shares under the Excess Application Facility.

Further information on the Firm Placing and Open Offer and terms and conditions on which it is made, including procedure for application and payment, are set out in Part VII of the Prospectus and, where relevant, on the applicable Application Form.

Firm Placing

The Company is proposing to issue 89,223,606 Firm Placed Shares pursuant to the Firm Placing, pursuant to the Placing Agreement, the principal terms and conditions of which are summarised in paragraph 20.1 of Part XV of the Prospectus.

The Firm Placed Shares are not subject to clawback and do not form part of the Open Offer. The Firm Placing is expected to raise approximately £22,649,164 (net of expenses).

The Firm Placing is subject to the same conditions and termination rights which apply to the Open Offer.

Application will be made to the UKLA for the Firm Placed Shares to be admitted to the premium segment of the Official List and to the London Stock Exchange for the Firm Placed Shares to be admitted to trading on the London Stock Exchange's main market for listed securities.

The Firm Placed Shares, when issued and fully paid, will be identical to and rank in full with the Ordinary Shares for all dividends and other distributions declared, made or paid after Admission, and will rank pari passu in all respects with the existing Ordinary Shares as at the date of issue save that the New Ordinary Shares will not rank for the second interim dividend expected to be paid on 22 November 2012 to those Shareholders on the register as at 28 September 2012. A further announcement will be made in respect of this dividend in due course.

Redefine Properties International is not participating in the Firm Placing.

EFFECT OF THE FIRM PLACING AND OPEN OFFER

In structuring the Firm Placing and Open Offer, the Directors have given a great deal of thought as to how to structure the proposed equity fundraising, having regard to current market conditions, the level of the Company's share price and the importance of pre-emption rights to Shareholders. After considering all of these factors, the Directors have concluded that the Firm Placing and Open Offer is the most suitable option available to the Company and its Shareholders. The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by subscribing for Open Offer Shares pro rata to their current holding of Existing Ordinary Shares.

Upon completion of the Firm Placing and Open Offer, the New Ordinary Shares will represent approximately 45.8 per cent. of the Company's Enlarged Issued Share Capital and the Existing Ordinary Shares will represent approximately 54.2 per cent. of the Company's Enlarged Issued Share Capital. New Ordinary Shares issued through the Firm Placing and New Ordinary Shares issued through the Open Offer will account for approximately 18.2 per cent. and 81.8 per cent. respectively of the total New Ordinary Shares issued through the Firm Placing and Open Offer. The Resolutions set out in the Notice attached to the Prospectus must be passed at the Extraordinary General Meeting in order for the Firm Placing and Open Offer to proceed.

The Firm Placing and Open Offer will result in an increase in cash and other short term funds of £122,475,000 with a corresponding £122,475,000 increase in net assets. A pro forma statement of net assets illustrating the effect of the Firm Placing and Open Offer on the Company's net assets as at 29 February 2012, as if they had been undertaken at that date, is set out in Part XII of the Prospectus. This information is unaudited and has been prepared for illustrative purposes only.

Dilution

Following the issue of the New Ordinary Shares to be allotted pursuant to the Firm Placing and Open Offer, Qualifying Shareholders who take up their full entitlements in respect of the Open Offer will suffer a dilution of up to 8.3 per cent. to their interests in the Company. Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer and Shareholders not eligible to participate in the Open Offer will suffer a dilution of approximately 45.8 per cent. to their interests in the Company.

RELATIONSHIP AGREEMENT

In connection with the Reverse Takeover which completed in August 2011, Redefine Properties International (as the majority Shareholder) and the Company, in respect of itself and the Group entered into the Relationship Agreement setting out the governance arrangements for the Group. Following the Firm Placing and Open Offer, Redefine Properties International will be interested in at least 65.7 per cent. of the Company and, therefore, the Relationship Agreement will continue to apply.

Subject to ongoing compliance with all regulatory requirements (including the rules of the JSE), the Relationship Agreement contains certain corporate governance arrangements to facilitate the independent operation of the Group. The Relationship Agreement limits the ability of Redefine Properties International from appointing Associates as directors to form a majority of the board of the Group and would prevent Redefine Properties International from taking actions that could result in the de-listing of the Group.

The Relationship Agreement also:

·; limits the ability of Redefine Properties International and its Associates from voting on matters not permitted under Chapter 11 of the Listing Rules or otherwise not complying with the Listing Rules;

·; ensures that all transactions between the Group and Redefine Properties International and/or its Associates will be on a normal commercial basis as would be agreed between parties acting in their own interests; and

·; prevents Redefine Properties International from modifying the Articles in any manner that is inconsistent with the Relationship Agreement.

Redefine Properties International has undertaken not to dispose of any shares held by it in the capital of the Company prior to completion of the Placing and Open Offer.

The Relationship Agreement applies to Redefine Properties International and, to the extent that any shares in the Group which are beneficially owned by Redefine Properties International are transferred to one or more of its Associates, Redefine Properties International would be required to procure that such Associates enter into parallel obligations prior to the transfer of shares.

The obligations of Redefine Properties International and its Associates under the Relationship Agreement will only terminate if the beneficial ownership of Redefine Properties International and its Associates in the Group either falls below 30 per cent., or the Company is no longer admitted to listing on the Official List and to trading on the London Stock Exchange

PROPOSED SHARE CONSOLIDATION

Following the completion of the Firm Placing and Open Offer and Admission it is proposed that the Existing Ordinary Shares and New Ordinary Shares issued pursuant to the Firm Placing and Open Offer, will be consolidated into consolidated Ordinary Shares on a 0.9 for 1 basis.

Following the Firm Placing and Open Offer and the Share Consolidation, the Company's issued ordinary share capital will comprise 962,855,467 ordinary shares of 8.0 pence each in the capital of the Company.

The Share Consolidation will give rise to fractional entitlements to Consolidated Ordinary Shares where Shareholders hold a number of Existing Ordinary Shares and/or New Ordinary Shares which is not exactly divisible by 0.9. Subject to Resolution 5 being approved by Shareholders at the General Meeting, Shareholders with a holding of Existing Ordinary Shares and/or New Ordinary Shares which is not exactly divisible by 0.9 will, pursuant to the Share Consolidation, have their holding rounded down to the nearest number of Consolidated Ordinary Shares. Fractional entitlements to Consolidated Ordinary Shares will not be issued and will, so far as possible, be aggregated and be sold at the best price reasonably obtainable in the market for the benefit of the Company.

In the view of the Board, aggregating such fractional entitlements, selling them and sending cheques to Shareholders in respect of their pro rata proportion of the proceeds is neither practical nor cost-efficient given the relatively small sums of money attributable to each individual Shareholder concerned. In accordance with Resolution 5, any fractional entitlements to Consolidated Ordinary Shares arising on the Share Consolidation will therefore be sold for the benefit of the Company.

The proportion of the issued ordinary share capital of the Company held by each Shareholder following the Share Consolidation (save for any fractional entitlements) will remain unchanged. Apart from having a different nominal value, each Consolidated Ordinary Share will carry the same rights as set out in the Articles that currently attach to the Existing Ordinary Shares and will attach to the New Ordinary Shares issued pursuant to the Firm Placing and Open Offer. The Share Consolidation will not affect the Company's net assets nor the assets of the Group, as a whole.

Any New Ordinary Shares to be issued in certificated form in connection with the Firm Placing and Open Offer will be represented by definitive share certificates, which are expected to be despatched by 16 October 2012 to the persons entitled thereto at the relevant person's registered address. The share certificates will reflect the effects of both the Firm Placing and Open Offer and the Share Consolidation which is expected to occur on 11 October 2012 if approved at the General Meeting. Pending the issue of definitive certificates, transfers will be certified against the register. No temporary documents of title in respect of the New Ordinary Shares will be issued.

The Share Consolidation is conditional upon the approval of Shareholders at the General Meeting as required by the IOM Acts and the Articles. Due to the inter-conditionality of the Resolutions proposed at the General Meeting, all such Resolutions will need to be passed in order for the Share Consolidation to take effect.

Requests will be made to the UK Listing Authority and to the London Stock Exchange to reflect, on the Official List and the London Stock Exchange's main market for listed securities, respectively, the effect of the Share Consolidation.

IRREVOCABLE UNDERTAKINGS

Those Directors who are also Shareholders, who in aggregate hold 4,600,040 Existing Ordinary Shares representing approximately 0.79 per cent. of the Existing Ordinary Shares, have also irrevocably undertaken to take up their Open Offer Entitlements in respect of an aggregate of 3,184,642 New Ordinary Shares (£828,007 in aggregate).

Redefine Properties International, which holds 415,507,157 Existing Ordinary Shares (representing approximately 71.7 per cent. of the Existing Ordinary Shares) has irrevocably undertaken to take up, in full, its Basic Entitlement in respect of 287,658,801 New Ordinary Shares and has irrevocably undertaken not to apply for any Excess Shares. Admission will be the final condition in relation to the irrevocable undertaking given by Redefine Properties International.

Certain other existing Shareholders who in aggregate hold 60,645,071 Existing Ordinary Shares representing approximately 10.5 per cent. of the Existing Ordinary Shares, have also irrevocably undertaken to take up their Open Offer Entitlements in respect of an aggregate of 38,523,505 New Ordinary Shares (£10,016,112 in aggregate).

Further, Redefine Properties International has irrevocably undertaken to vote in favour of each of the Resolutions at the EGM, representing approximately 71.7 per cent. of all votes capable of being cast in respect of each of the Resolutions.

Those Directors who own Existing Ordinary Shares have irrevocably undertaken to vote in favour of each of the Resolutions at the EGM, representing approximately 0.79 per cent. of all votes capable of being cast in respect of each of the Resolutions.

CONTINUED INTENTION TO CONVERT TO A UK REIT

The Company has previously highlighted its intention to convert to a UK REIT and continues to closely monitor changes to the UK REIT regime. A decision as to whether to convert to a UK REIT will be confirmed once the proposed new legislation is enacted, and a final assessment of the benefits to Shareholders can be confirmed. Under current proposals it is expected that the 2.0 per cent. gross asset conversion charge will be removed, providing an efficient method of converting to a transparent and tax efficient regime.

The Board recognises the trend towards and advantages of internalising management and intends to conduct a detailed assessment of this alternative and whether it would be in the best interests of Shareholders.

INVESTMENT POLICY OF THE GROUP

The Group's strategy is focused on delivering sustainable and growing income returns through investment into income yielding assets, let to high quality occupiers on long leases. Development exposure is generally limited to asset management and ancillary development of existing assets in order to enhance and protect capital values. The Group is focused on real estate investment in large, well developed economies with established and transparent real estate markets. The investment portfolio is geographically diversified across the UK, Europe and Australia providing exposure to the retail, office, industrial and hotel sectors.

The Group's current investment policy is set out below.

Investment Policy

The Group's investment policy is to provide investors with strong investment returns and a balanced exposure to lower risk income generating assets and opportunities that will provide a higher capital return.

In implementing its investment policy, the Group will contemplate available opportunities and future undertakings that will yield satisfactory returns at acceptable risk levels. In making investments the Group will seek to achieve a reasonable level of diversification across a spread of assets and geographies. The Group currently has investments in the United Kingdom, Switzerland, Germany, the Netherlands, the Channel Islands and Australia concentrating on the retail, government, commercial (office and industrial) and hotel sectors.

Investment Criteria

·; The Group will focus on property investments which provide a stable, predictable and low risk income stream, with opportunities to enhance value through active management.

·; The Group will also selectively pursue development or redevelopment opportunities where they can be substantially pre-let to businesses with strong rental covenants or in order to protect, enhance or extract additional value from existing investments. This will include residential, hotel, retail or mixed use developments if appropriate.

·; The Group may also look at distressed property investments where opportunities arise as markets recover. Investments outside the above criteria will only be made where risk adjusted returns to Shareholders are satisfactory and the Group has the reserves necessary to extract an above-market return from the investments.

The Group will make investments in property via a number of methods which include:

·; acquisition of the real estate assets or portfolio of assets;

·; direct investment in or acquisition of the holding company of the real estate asset or portfolio of assets;

·; direct investment in or acquisition of a joint venture vehicle which has a direct investment in or holds the real estate assets or the holding company of the real estate asset or portfolio of assets; and

·; investments in property securities (debt and/or equity securities) which are acquired when their value is considered superior to physical property. These investments are often of a strategic nature where the shareholding can be used to unlock value in underlying property assets or significant influence can be exerted through board representation or through management.

Gearing

The level of gearing of the Group will be governed by careful consideration of the cost of borrowing and the ability to mitigate the risk of interest rate increases and the effect of leverage on the returns generated from assets acquired. The Directors intend that the Group's level of borrowing will be between 50 per cent. and 65 per cent. of the gross value of its total assets through the cycle. The Group's maximum level of gearing will not exceed 85 per cent. of the gross value of the Group's total assets at any point in time. Details of the Group's borrowing limits under its Articles of Association are set out below:

"The Group's board may exercise all the powers of the Group to borrow money, to give guarantees, to mortgage, hypothecate, pledge or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Group and, subject to the provisions of the IOM Act and the Articles, to create and issue debenture and other loan stock and debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of the Group or of any third party. Provided that the Board shall restrict the borrowings of the Group so as to secure that the aggregate principal amount for the time being of all borrowings by the Group and for the time being owing to persons outside the Group shall not at any time, without the previous sanction of an ordinary resolution of the Group exceed ten times the aggregate of:

·; the amount paid up on the issued share capital for the time being of the Company; and

·; the total of capital and revenue reserves (including any share premium account, capital redemption reserve, all as shown in the latest balance sheet of the Company)."

Investment Restrictions

·; The Group will not invest in forward funding a development on land in which the Group does not have an interest without a pre-let agreement to lease.

·; The Group will not invest in properties where the purchase price is not supported by an external valuation.

·; The Group will not invest in properties where there are known to be material environmental issues.

·; The Group will typically invest in properties in the UK with fully repairing and insuring leases.

·; No more than 15 per cent. in aggregate, of the value of the total assets of the Group may be invested in other listed closed-ended investment funds and/or debt instruments (provided that if such listed closed-ended investment funds themselves do not have a published investment policy limiting exposure to other listed closed-ended investment funds to 15 per cent. of total assets, the maximum exposure of the Group shall be 10 per cent. of its total assets).

·; In addition, pursuant to the Listing Rules, the Group is subject to the following investment restrictions:

- The Group must at all times manage its assets in a way which is consistent with its object of spreading investment risk and is in accordance with the Company's published investment policy.

- The Group and other members of the Group must not conduct any trading activity which is significant in the context of the Group as a whole.

Investment Process

The Directors set the investment policy (subject to Shareholder approval), parameters and objectives and review and approve each sale or purchase of investment assets.

The Group's Investment Advisor is responsible for identifying and reporting to the Company's Directors, the availability of new investment opportunities that fall within the investment policy and objectives. Following the identification of a potential new investment opportunity and approval by the Company's Directors, the Investment Advisor is responsible for negotiating the terms of investment.

It is anticipated that all associated costs and expenses incurred by the Group when acquiring or disposing of properties, property portfolios or special purpose property vehicles will be paid for and capitalised by the Group in order to determine the total cost.

Changes to the Investment Policy

The Group will apply its investment policy to all investments made and held by it. Any material changes to the investment policy of the Group will only be made with the approval of Shareholders by ordinary resolution at a general meeting, which will also be notified via a regulatory information service provider to the London Stock Exchange.

If the Group breaches its investment policy (including any investment restrictions), the Group will make a notification via a regulatory information service provider to the London Stock Exchange of details of the breach and of actions it may or may have taken.

Investor Profile

The Directors expect typical investors in the Group to be primarily UK based fund managers or sophisticated private investors or those acting on the advice of their stockbroker or financial adviser, who are looking to allocate part of their investment portfolio to the UK, Continental European and Australian commercial property market.

DIVIDEND POLICY

Shareholders on the shareholder register of the Company on the Redefine Record Date have received an interim dividend of 2.10 pence per Existing Ordinary Share for the six month period ended 29 February 2012, as declared on 30 April 2012. The rights attaching to the Ordinary Shares are uniform in all respects and they form a single class for all purposes. Holders of Ordinary Shares have uniform voting rights and rights to dividends or distributions in proportion to the number of Ordinary Shares they hold at any time, save that the New Ordinary Shares will not rank for the second interim dividend expected to be paid on 22 November 2012 to those Shareholders on the register as at 28 September 2012.

Following completion of the Firm Placing and Open Offer, with effect from 1 September 2012 (and taking into consideration the Company's desire to convert to a UK REIT) it is expected that the Company will seek to distribute at least 90 per cent. of property rental profits, to fall in line with the current UK REIT regime. However, there is no assurance that the Company will pay a dividend or if a dividend is paid, the amount of such dividend.

WORKING CAPITAL

The Company is of the opinion that, after taking into account the existing bank and other facilities and the guaranteed proceeds of the Firm Placing and Open Offer, the Group does not have sufficient working capital for its present requirements, that is, for at least the next 12 months from the date of this announcement.

The Gamma Facility is due to mature on 15 October 2012, at which time the £199.7 million principal balance of the loan will become due and payable. The Gamma Facility is non-recourse in nature and given the existing loan to value ratio in this portfolio the Company does not intend that a significant amount of capital be utilised to refinance the facility. The Company will continue to work with the loan servicer to manage the portfolio of assets, however, should the Company fail to reach an agreement with the servicer the servicer will be entitled enforce its security rights over the assets secured against the Gamma Facility. Should the servicer enforce its security rights over the assets secured against the Gamma Facility the £199.7 million liability to the servicer will be settled in full by such enforcement of its security rights and the Group will no longer own those assets secured by the facility and will not benefit from the rental income receivable from them (being approximately £17.1 million in the year ended 31 August 2012). The Directors are currently of the opinion that whilst it is unlikely that an agreement will be reached to restructure the Gamma Facility prior to the maturity date of the loan they expect that the servicer will grant a standstill period whilst a workout agreement can be agreed with respect to the Gamma Facility and the associated assets.

Notwithstanding the Directors' intention to restructure the Gamma Facility, the Company is of the opinion that, should the servicer enforce its security and after taking into account the subsequent forfeiture of the assets secured against the Gamma Facility, the existing bank and other facilities and the guaranteed proceeds of the Firm Placing and Open Offer, the Group has sufficient working capital for its present requirements, that is, for at least the next 12 months from the date of this announcement.

SIGNIFICANT CHANGE

With the exception of the impact of valuations prepared as at 31 August 2012 as outlined in paragraph 4 of Part VIII of the Prospectus there has been no significant change in the financial position of the Group from 29 February 2012 (being the date of the unaudited condensed consolidated interim financial statements of the Group) to the date of this announcement. The value of investment properties (excluding property assets held in joint ventures and associates) decreased from £870.5 million as at 29 February 2012 (excluding properties sold since that date) to £793.6 million as at the date of this announcement (excluding acquisitions). This represents a decrease of 8.8 per cent.

There has been no significant change in the trading position of the Group from 29 February 2012 to the date of this announcement excluding:

·; the impact of fair value adjustments on investment properties outside the control of the Directors. Adverse fair value adjustments on investment properties (excluding joint ventures and associates) in the period were £76.9 million;

·; the impact of the restructuring of the Delamere Place, Crewe Facility with Aviva in May 2012. As outlined in paragraph 4 of the Prospectus, the outstanding balance of this facility (£17.15 million) was settled in return for an £11.0 million cash payment resulting in a gain of £6.15 million being recognised in the period.

TAXATION

Information regarding certain aspects of UK and Isle of Man taxation is set out in Part XIV of the Prospectus. These details are, however, intended only as a general guide to certain aspects of the current tax position under UK and Isle of Man taxation law. Shareholders who are in any doubt as to their tax position or who are subject to tax in jurisdictions other than the UK and Isle of Man are strongly advised to consult their own independent financial adviser without delay.

EXTRAORDINARY GENERAL MEETING

A notice convening the Extraordinary General Meeting, to be held at 09.30 a.m. on 8 October 2012 at Top Floor, 14 Athol Street, Douglas, Isle of Man, IM1 1JA is set out at the end of the Prospectus. The Extraordinary General Meeting is being convened for the purpose of considering and, if thought fit, passing the Resolutions. The full text of the Resolutions is set out in the notice at the back of the Prospectus.

RECOMMENDATION

Your Board considers that the terms of the Firm Placing and Open Offer and each of the Resolutions to be proposed at the Extraordinary General Meeting are in the best interests of the Company and the Shareholders as a whole.

Accordingly, your Board unanimously recommends that all Shareholders vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting, as those Directors who own Existing Ordinary Shares intend to do in respect of their own beneficial holdings comprising 4,600,040 Existing Ordinary Shares in aggregate, representing approximately 0.79 per cent. of the existing issued share capital of the Company as at 12 October 2012, the latest practicable date prior to the publication of the Prospectus.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

General notes:

1. Reference to times in the Prospectus are to London time unless otherwise stated.

2. The ability to participate in the Open Offer is subject to certain restrictions relating to Overseas Shareholders, details of which are set out in Part VII of the Prospectus.

3. The times and dates set out in the expected timetable of principal events above and mentioned throughout the Prospectus may be adjusted by Redefine, in which event details of the new times and dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, Qualifying Shareholders. In particular, in the event that withdrawal rights arise under Section 87Q of FSMA prior to Admission, Redefine, Peel Hunt and Investec may agree to defer Admission until such time as such withdrawal rights no longer apply.

4. Different deadlines and procedures for return of forms may apply in certain cases. For example where Shareholders hold their Existing Ordinary Shares through a CREST member or other nominee, that Shareholder may set an earlier date for application and payment than the dates noted above.

DEFINITIONS AND GLOSSARY OF TECHNICAL TERMS

The following definitions apply throughout this announcement, unless the context otherwise requires: