Hibernian REIT Prospectus
Upcoming SlideShare
Loading in...5
×
 

Hibernian REIT Prospectus

on

  • 711 views

Prospectus for Hibernian REIT plc

Prospectus for Hibernian REIT plc

Statistics

Views

Total Views
711
Views on SlideShare
711
Embed Views
0

Actions

Likes
0
Downloads
3
Comments
0

0 Embeds 0

No embeds

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Hibernian REIT Prospectus Hibernian REIT Prospectus Document Transcript

  • Registration of a prospectus approved by the Central Bank for issue by an Irish registered company ~o AN OIFIG UM CHLARO CUIDEACHTAf ~ ~ COMPANIES REGISTRATION OFFICE CI V/1 Investment Funds, Companies and Miscellaneous Provisions Act 2005 Section 38(1)(b) of S.l. No. 324 of 2005 Prospectus (Directive 2003/71/EC) Regulations 2005 Central Bank Reform Act 2010 I1111l Ill IIIII IIIII IIIII IIIII IIIII IIIII Ill Ill 5142508 CRO receipt date stamp Companies Acts 1963 to 2012 818 --------) Company Details Please complete using black typescript or BOLD CAPITALS, re./f~~ng ~'~cxptanato.:.•:s . - , -. I ' ~ ~ ~,C;"o Company Number "' ··~~~ '--"--~ Company Name Date Approved by the Central Bank Hibernia REIT Public Limited Company Day Month Year [Q[b] []]4] I 21 olt 131 I certify on behalf of the issuer that the attached prospectus has been approved by the Central Bank.~an~' Slgnatu<e J Surname Position held ~ IROSS BURNS ~ Date h /I>/).() 1 1 Forename(s) L--------------------~ Company Secretary, for and on behalf of Castlewood Corporate Services Limited Presenter details Name Address Castlewood Corporate Services Limited T/A Chartered Corporate Services, Taney Hall, Eglinton Terrace, Dundrum, Dublin 14, Ireland. OX number Telephone number Email 01-2169800 rburns@corporateservices.ie DX exchange Fax number 01-2169866 Reference number Hibernia 818
  • 1 Further information ) CROaddress When you have completed and signed the form, please file with the CRO. The Public Office is at 14 Parnell Square, Dublin 1. The OX address for the CRO is 145001. If submitting by post, please send with the prescribed fee to the Registrar of Companies at: Companies Registration Office, O'Brien Road, Carlow, County Carlow Payment If paying by cheque, postal order or bank draft, please make the fee payable to the Companies Registration Office. Cheques or bankdrafts must be drawn on a bank in the Republic of Ireland. A Form B18 that is not completed correctly or is not accompanied by the correct documents or fee is liable to be rejected and returned to the presenter by the CRO FURTHER INFORMATION ON COMPLETION OF FORM B18, INCLUDING THE PRESCRIBED FEE, IS AVAILABLE FROM www.cro.ie OR BY EMAIL info@cro.ie
  • THIS PROSPECTUS IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this Prospectus, or as to what action you should take, you are recommended to immediately consult, if you are resident in Ireland, an organisation or firm authorised or exempted pursuant to the European Communities (Markets in Financial Instruments) Regulations 2007 (Nos. 1 to 3) or the Investment Intermediaries Act 1995 (as amended) and, if you are resident in the United Kingdom, a person authorised under the Financial Services and Markets Act 2000, as amended (the "FSMA"), of the United Kingdom or another appropriately authorised professional adviser if you are in a territory outside Ireland or the United Kingdom. This document constitutes a prospectus for the purposes of Article 3 of the European Parliament and Council Directive 2003171/EC of 4 November 2003 (the "Prospectus Directive") relating to the Company (the "Prospectus") and has been prepared in accordance with Part 5 of the Prospectus (Directive 2003/71 EC) Regulations 2005 oflreland, as amended (the "Prospectus Regulations") and the Commission Regulation (EC) No. 809/2004, as amended (the "EU Prospectus Regulations"). The Prospectus has been approved by the Central Bank of Ireland (the "Central Bank"), as competent authority under the Prospectus Directive. The Central Bank only approves this Prospectus as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Such approval relates only to the Ordinary Shares which are to be admitted to the Official Lists of the Irish Stock Exchange and trading on the regulated market for listed securities of the Irish Stock Exchange Limited (the "Irish Stock Exchange") or other regulated markets for the purposes of the Directive 2004/39/EC and/or which are to be offered to the public in any member state of the European Economic Area. The Company has requested that the Central Bank provide a certificate of approval and a copy of this prospectus to the FCA in the United Kingdom in connection with the Company's applications to the UK Listing Authority for all the Ordinary Shares to be admitted to listing on the premium listing segment of the Official List of the UK Listing Authority and to the London Stock Exchange p.l.c. (the "London Stock Exchange") for all of its Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. This Prospectus has been made available to the public in Ireland and the United Kingdom in accordance with Part 8 of the Prospectus Regulations by the same being made available, free of charge, in electronic form on the Company's website www.hibemiareit.com. Other materials on the Company's website are not incorporated into and do not form a part of this Prospectus. You should read this Prospectus in its entirety and in particular the risk factors set out in the section of this Prospectus headed "Risk Factors··. The Directors, whose names appear on page 48 of this Prospectus, and the Company, accept responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect the import of such information . • hibernia ___ reit 12Ic Hibernia REIT p.l.c. (Incorporated and registered in Ireland under the Irish Companies Acts with registered number 53 I 267) Issue of 364,600,000 Ordinary Shares of €0.1 0 each at a price of €1.00 per Ordinary Share and Admission to the Official Lists of the Irish Stock Exchange and the UK Listing Authority and to trading on the Irish Stock Exchange and the London Stock Exchange Credit Suisse Securities (Europe) Limited Goodbody Joint Bookrunner and Sole UK Sponsor Joint Bookrunner and Sole Irish Sponsor View slide
  • The Ordinary Shares are being offered hereby (i) in the United States to qualified institutional buyers (each a "Qffi") as defined in Rule 144A ("Rule 144A") under the US Securities Act of 1933, as amended (the "US Securities Act") that are also qualified purchasers (each a "QP") as defined in section 2(a)(51) of the US Investment Company Act of 1940, as amended (the "US Investment Company Act") and the related rules thereunder in reliance on Rule 144A or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and applicable state securities laws and under circumstances that will not require the company to register under the US Investment Company Act.; and (ii) outside of the United States to persons who are not US Persons (as defined in Regulation S under the US Securities Act ("Regulation S")) (each a "US Person") in offshore transactions in reliance on Regulation S. The Ordinary Shares have not been and will not be registered under the US Securities Act. Prospective purchasers are hereby notified that sellers of the Ordinary Shares may be relying on the exemption from the provisions of section 5 of the US Securities Act provided by Rule 144A. Purchasers who are inside the United States or are US Persons will be requested to sign the US Investor's Letter contained at Annex A herein in which they, among other things, commit to resell the Ordinary Shares only in an offshore transaction complying with Regulation S or to the Company or a subsidiary thereof. For a description of these and certain further restrictions on offers, sales and transfers of the Ordinary Shares and the distribution of this Prospectus, see paragraph 8 of Part XI (The Issue). Application has been made to (i) the Irish Stock Exchange for all of the Ordinary Shares to be admitted to listing on the primary listing segment of the Official List of the Irish Stock Exchange (the "Irish Official List"); (ii) the UK Listing Authority for all the Ordinary Shares to be admitted to listing on the premium listing segment of the Official List of the UK Listing Authority (the "UK Official List" and, together with the Irish Official List, the "Official Lists"); (iii) the Irish Stock Exchange Limited for all of the Ordinary Shares to be admitted to trading on its regulated market for listed securities; and (iv) the London Stock Exchange for all of the Ordinary Shares to be admitted to trading on its main market for listed securities. Admission to the Official Lists, together with admission to trading on the regulated market of the Irish Stock Exchange and the main market of the London Stock Exchange, respectively, for listed securities constitutes admission to official listing on a stock exchange (the "Admission"). It is expected that such Admission will become effective and that unconditional dealings in the Ordinary Shares will commence on the Irish Stock Exchange and the London Stock Exchange at 8.00 a.m. on 11 December 2013. This Document is only directed at, and being distributed: (A) in the United Kingdom, to persons (i) who have professional experience in matters relating to investments and who meet the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or who meet Article 49 of the Order, and (ii) are "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000, as amended; (B) in Ireland, to Qualified Investors who are "professional clients" as defined in Schedule 2 of the European Communities Markets in Financial Instruments Regulations 2007 (as amended); and (C) any other persons to whom it may otherwise be lawfully communicated (together all such persons being referred to as "relevant persons"). This document must not be acted on or relied on, (a) in the United Kingdom and Ireland, by persons who are not relevant persons and, (b) in Norway, Sweden and the Netherlands, by persons who are not Qualified Investors and "professional investors" (as that term is used in AIFMD). Any investment or investment activity to which this document relates is available only to, (1) in the United Kingdom and Ireland, relevant persons and, (2) in Norway, Sweden and the Netherlands, Qualified Investors and "professional investors" (as that term is used in AIFMD); and other persons who are permitted to subscribe for the Ordinary Shares pursuant to an exemption from the Prospectus Directive and other applicable legislation and will only be engaged in with such persons. In accordance with the AIFMD Regulations, the Investment Manager has sought clearance to market Ordinary Shares in the Company to professional investors in the United Kingdom, Norway, Sweden and the Netherlands in accordance with AIFMD and the AIFMD Regulations and has been duly notified by the Central Bank that the relevant marketing notifications have been made to the relevant competent authorities in those jurisdictions. Stabilisation In connection with the Issue, Credit Suisse Securities (Europe) Limited (as "Stabilising Manager"), or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law and for stabilisation purposes, over-allot Ordinary Shares up to a total of 20,000,000 Ordinary Shares (representing 5.49% of the total number of Ordinary Shares comprised in the Issue before any utilisation of the Over-allotment Option) or effect other transactions with a view to View slide
  • supporting the market price of the Ordinary Shares at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the conditional dealings of the Ordinary Shares on the Stock Exchanges and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilisation, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price ofthe Ordinary Shares above the Issue Price. Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Issue. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotment and/or from sales of Ordinary Shares effected by it during the stabilising period, the Company has granted to the Stabilising Manager an over-allotment option (the "Over-allotment Option") pursuant to which the Stabilising Manager may purchase or procure purchasers for additional Ordinary Shares up to a total of20,000,000 Ordinary Shares (the "Overallotment Shares") at the Issue Price, representing up to 5.49% of the Ordinary Shares comprised in the Issue before any utilisation of the Over-allotment Option. The Over-allotment Option may be exercised in whole or in part upon notice by the Stabilising Manager at any time on or before the 30th calendar day after the commencement of conditional dealings of the Ordinary Shares on the Stock Exchanges. Any Over-allotment Shares made available pursuant to the Over-allotment Option will be sold on the same terms and conditions as Ordinary Shares being offered pursuant to the Issue and will rank pari passu in all respects with, and form a single class with, the other Ordinary Shares (including for all dividends and other distributions declared, made or paid on the Ordinary Shares). Notice to Overseas Investors The distribution of this Prospectus and issue of Ordinary Shares in certain jurisdictions other than Ireland and the United Kingdom may be restricted by law. No action has been taken by the Company or the Joint Bookrunners to permit a public offering of Ordinary Shares or possession or distribution of this Prospectus (or any other offering or publicity materials relating to Ordinary Shares) in any other jurisdiction where action for that purpose may be required or doing so is restricted by law. Accordingly, neither this Prospectus nor any advertisement may be distributed or published in any other jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Prospectus comes are required by the Company and the Joint Bookrunners to inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This Prospectus does not constitute or form part of an offer to sell, or the solicitation of an offer to buy or subscribe for, Ordinary Shares to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful. The Ordinary Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan, Switzerland or the Republic of South Africa. Accordingly, subject to certain exceptions (noted below), the Ordinary Shares may not be offered or sold in Australia, Canada, Japan, Switzerland or the Republic of South Africa or to, or for the account or benefit of, any resident of Australia, Canada, Japan, Switzerland or the Republic of South Africa. Further information on the restrictions to which the distribution of this Prospectus is subject is set out in paragraph 8 of Part XI (The Issue). Each subscriber for Ordinary Shares will be deemed to have made the relevant representations set out therein. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. The Ordinary Shares have not been, and will not be, registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States and, subject to certain exceptions, may not be offered or sold, directly or indirectly, within the United States or to, or for the account or benefit of, US Persons. The Company has not been, and will not be, registered under the US Investment Company Act and investors will not be entitled to the benefits of that Act.
  • The Joint Bookrunners and any of their respective affiliates may arrange for the offer and sale of Ordinary Shares (i) in the United States only to persons reasonably believed to be QIBs that are also QPs in reliance on Rule 144A or pursuant to another exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and applicable state securities laws and under circumstances that will not result in the Company being an "Investment Company" under the US Investment Company Act; and (ii) outside of the United States to persons who are not US Persons in offshore transactions in reliance on Regulation S. None of the US Securities and Exchange Commission, any other US federal or state securities commission or any US regulatory authority has approved or disapproved of the Ordinary Shares offered by this Prospectus nor have such authorities reviewed or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence in the United States. Until the expiry of 40 days after the commencement of the Placing, an offer or sale of Ordinary Shares within the United States by a dealer (whether or not it is participating in the Placing) may violate the registration requirements of the US Securities Act if such offer or sale is made otherwise than in accordance with an applicable exemption from registration under the US Securities Act. The Ordinary Shares are subject to selling and transfer restrictions in certain jurisdictions. Prospective purchasers should read the restrictions described in paragraph 8 of Part XI (The Issue). Each purchaser of the Ordinary Shares will be deemed to have made the relevant representations described therein and in Part XVI (Terms and Conditions of the Placing). NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES ANNOTATED, 1955, AS AMENDED ("RSA"), WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT, ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH. Other Important Notices Credit Suisse, which is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the FCA and PRA, is acting exclusively for the Company and no one else in connection with the Issue and Admission and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, for the contents of this Prospectus or for providing any advice in relation to this Prospectus, the Issue or Admission. Apart from the responsibilities and liabilities, if any, which may be imposed by the Central Bank, the FCA or the FSMA, Credit Suisse, or any person affiliated with it, does not accept any responsibility whatsoever and makes no representation or warranty, express or implied, in respect of the contents of this Prospectus including its accuracy or completeness or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Company and nothing in this Prospectus is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. In addition, Credit Suisse does not accept responsibility for, nor authorise the contents of, this Prospectus or its issue, including without limitation, under section 41 of the 2005 Act or Regulation 31 of the Prospectus Regulations. Credit Suisse accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have to any person, other than the Company, in respect of this Prospectus. Goodbody Stockbrokers is regulated in Ireland by the Central Bank. Goodbody Corporate Finance is regulated in Ireland by the Central Bank (Goodbody Stockbrokers and Goodbody Corporate Finance collectively "Goodbody"). Goodbody is acting exclusively for the Company and no one else in connection with the Issue and Admission and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, for the contents of this Prospectus or for providing any advice in relation to this Prospectus, the Issue or Admission. Apart from the l __
  • responsibilities and liabilities, if any, which may be imposed by the Central Bank, the FCA or the FSMA, Goodbody, or any person affiliated with it, does not accept any responsibility whatsoever and makes no representation or warranty, express or implied, in respect of the contents of this Prospectus including its accuracy or completeness or for any other statement made or purported to be made by any of them, or on behalf of them, in connection with the Company and nothing in this Prospectus is or shall be relied upon as a promise or representation in this respect, whether as to the past or future. In addition, Goodbody does not accept responsibility for, nor authorise the contents of, this Prospectus or its issue, including without limitation, under section 41 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 (as amended) (the "2005 Act") or Regulation 31 of the Prospectus Regulations. Goodbody accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have to any person, other than the Company, in respect of this Prospectus. The Joint Bookrunners and any of their respective affiliates may have engaged in transactions with, and provided various investment banking, financial advisory and other services for, the Company and the Investment Manager, for which they would have received customary fees. The Joint Bookrunners and any of their respective affiliates may provide such services to the Company and the Investment Manager and any of their respective affiliates in the future. In connection with the Issue each of the Joint Bookrunners and any of their respective affiliates acting as an investor for its or their own account(s) may subscribe for or purchase Ordinary Shares and, in that capacity, may retain, purchase, sell, offer to sell or otherwise deal for its or their own account(s) in the Ordinary Shares, any other securities of the Company or other related investments in connection with the Issue or otherwise. Accordingly, references in this document to the Ordinary Shares being issued, offered, subscribed for or otherwise dealt with should be read as including any issue or offer to, or subscription or dealing by, the Joint Bookrunners and any of their respective affiliates acting as an investor for its or their own account(s). The Joint Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so. In addition, in connection with the Issue the Joint Bookrunners may enter into financing arrangements with investors, such as share swap arrangements or lending arrangements where Ordinary Shares are used as collateral, that could result in the Joint Bookrunners acquiring shareholdings in the Company. No person has been authorised to give any information or make any representations other than those contained in this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorised by the Company. Neither the publication of this Prospectus nor any subscription or sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this Prospectus or that the information in this Prospectus is correct as at any time subsequent to its date. The contents of this Prospectus should not be construed as legal, financial or tax advice. Each prospective investor should consult his, her or its own legal, financial or tax adviser for advice. Certain terms used in this Prospectus, including certain technical and other items, are explained and defined in Part XVII (Definitions and Technical Terminology).
  • TABLE OF CONTENTS PART 1: SUMMARY ...••.•............•.•..•••.•••••••.•.............................••.•.•...•••...•.......••••..•.....•.•........•..............•.•.........•..2 PART II: RISK FACTORS ..................................................................................................................................24 PART Ill: EXPECTED TIMETABLE ...................................................................................................................46 PART IV: ISSUE STATISTICS ...........................................................................................................................47 PART V: DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE, INVESTMENT MANAGER AND ADVISERS ••..••.......•...•...•.•............•..•..............••.•••.•.•••••••.•.••••....•...............•.....•.•.........•.......................•.•............48 PART VI: IMPORTANT INFORMATION ............................................................................................................50 PART VII: INFORMATION ON THE COMPANY ........•.............••...•.•.••..•..•••.•.••.................•...........•....•.•...•......•.64 PART VIII: NOWLAN PROPERTY REIT MANAGEMENT LIMITED AND THE REIT INVESTMENT MANAGEMENT AGREEMENT ................••...•....................•.......•...•..............•...•••••.••••..•.•...........•......•...............68 PART IX: DIRECTORS AND CORPORATE GOVERNANCE •....•..••.•.•...•.•..........•.......•........................•..•..•...•.80 PART X: HISTORICAL FINANCIAL INFORMATION ..•...............•....•..•..•.•••...••..•.•....................•.........•......•.•..•.91 PART XI: THE ISSUE ..••..•..............••...........•.•.•..•.........•...........•...•....••.•....•.•.......•...........•...•.................•••.•..•...•.97 PART XII: IRISH REAL ESTATE INVESTMENT TRUST REGIME AND TAXATION INFORMATION .••...•.. 106 PART XIII: CERTAIN ERISA CONSIDERATIONS ..................•..•••.............•....•..•.•...•....•..........•........•.........•...120 PART XIV: ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE •...••...•.••.•.................•.......•...•.•.123 PART XV: ADDITIONAL INFORMATION •...•...•...........................•...•.••.•.......•....•.••..................•............•.•....••..125 PART XVI: TERMS AND CONDITIONS OF THE PLACING ...••..•.•..••..••.••...•.•..•••..........•.....•.•..••.......•.•..........158 PART XVII: DEFINITIONS AND TECHNICAL TERMINOLOGY .•...•..•.••.••..••...•..•..........•...................•.........•..163 ANNEX A: US INVESTOR'S LETTER ....•.•..•.••.••..•.....•..•..•....•.•.•........••..••..•.•..••....•...•.•..•....•............•...........•..178 APPENDIX TO ANNEX A ..••...........•............•.................................•....•..•.........•..•.••........•..•......•••....•..••••.•...•••.182 ANNEX B: JONES LANG LASALLE MATERIALS •..•.•••.•...•.•.........•.••.•.....•.........•...•..•..•.•..............•........•.•...184
  • PART 1: SUMMARY Summaries are made up of disclosure requirements known as 'Elements'. These elements are numbered in Sections A-E (A.I-E.7). This summary contains all the Elements required to be included in a summary for this type of securities and Issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and Issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of 'not applicable'. Section A-Introduction and warnings A. I Introduction: THIS SUMMARY SHOULD BE READ AS AN INTRODUCTION TO THIS PROSPECTUS. ANY DECISION TO INVEST IN THE ORDINARY SHARES SHOULD BE BASED ON CONSIDERATION OF THE PROSPECTUS AS A WHOLE BY THE INVESTOR, INCLUDING IN PARTICULAR THE RISK FACTORS. Where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the member states of the European Union, have to bear the costs of translating this Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or it does not provide, when read together with other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities. A.2 Subsequent resale of securities or final placement of securities through financial intermediaries: Not applicable. The Company is not engaging any financial intermediaries for any resale of securities or final placement of securities requiring a prospectus after publication of this document. Section B - Issuer B. I Legal and commercial name: The legal and commercial name of the issuer is Hibernia REIT p.l.c. B.2 Domicile and legal form: The Company is incorporated in Ireland with registered number 531267 and is a public limited company under the Irish Companies Acts and is domiciled and tax resident in Ireland. 2
  • Section B - Issuer B.3 B.4 Key factors relating to the nature of the issuer's current operations and its principal activities: A description of the most significant recent trends affecting the issuer and the industries in which it operates: The Company is a property investment company the principal activity of which will be to acquire and hold investments in Irish property (primarily commercial property) with a view to maximising shareholder returns. It will elect to become an Irish REIT upon Admission. The Board considers the timing of the Company's establishment to be opportune due to the material level of bank de leveraging that it anticipates shall occur within the next number of years based on market and financial institution commentary, following the substantial reduction in commercial property values in Ireland since 2007. Following this fall in property values the Directors believe that there will be a significant upward re-pricing of property assets in the Company's chosen market over the medium term, following which the Directors believe that the market will stabilise. In addition, the Board is confident that the Investment Manager's expertise in identifying, acquiring and actively managing suitable properties will distinguish the Company from its competitors and result in increased re-sale values of the Company's investment properties. The Company will concentrate on investing in commercial property, primarily including Dublin prime offices, with an allocation to good quality industrial and retail assets and prime Dublin residential properties. The latest data from Jones Lang LaSalle Irish Property Index for Q3 2013 supports the Management Team's belief in a gradual improvement in the performance of the Irish commercial property market, with total returns increasing by 3.5% quarter-on-quarter during that period, the eighth consecutive quarter of positive growth. Although commercial property values have continued to fall on an annual basis (down 0.9% year-on-year), capital values increased for the second consecutive quarter, with a 1.1% increase in Q3 2013. This increase was supported by growth across all sectors, with the greatest increase in offices, which increased by 1.7% in the quarter, followed by retail and industrial which increased by 0.6% and 0.5% respectively. (Source: Jones Lang LaSalle Materials). Rental values in the Irish commercial property market increased overall for the second consecutive quarter in Q3 2013 (by 0.8%). In terms of sectoral trends, office and industrial ERVs increased by 3.3% and 1.2% respectively, while retail ERVs decreased by 2.2%. Retail rents have stabilised for prime product only, with signs of rental growth still not readily apparent. Secondary retail rents remain under pressure (Source: Jones Lang LaSalle Materials). The uplift in activity levels in H2 2012 has continued through 2013 with total investment volumes of €1.06 billion across 79 transactions in the nine months to 31 October 2013. This compares to total investment volumes for the whole of 2012 of €557 million. Investment volumes in Q3 2013 totalled €452 million across 27 transactions, which is the highest quarterly total since Q3 2007. Dublin continues to dominate activity (accounting for 99% of investment volumes and 81% of deals) while the split across sector was balanced with mixed-use accounting for 33% of transactions, followed by office (22%), residential (22%) and retail (19%). (Source: Jones Lang LaSalle Materials). The Management Team believes that the prevailing conditions in the Irish commercial real estate market will provide significant opportunities for the Company in the short to medium term. The combination of the Company's stated investment focus, the growth in capital values anticipated by the Directors, the leverage policy that the Company intends to adopt (and which the Directors consider to be prudent), the scale of the potential investment opportunities anticipated by the Management Team and the strength of the Management Team's relationships with key market participants will leave the Board well placed, following completion of the Issue and Admission, to build a property company of strong yielding sustainable cashflows. 3
  • Section B - Issuer B.S Group description: Not applicable. On Admission the Company will have no subsidiaries. B.6 Major Shareholders: Under the Irish Companies Acts a public limited company is required to have a minimum of seven members and may not commence business until its issued share capital is at least €38,092.14. As at 5 December 2013 (being the latest practicable date prior to the issue of this Prospectus), William Nowlan holds 399,994 Ordinary Shares representing over 99.99% of the issued share capital of the Company being €40,000 made up of 400,000 Ordinary Shares. He is also the beneficial holder of the remaining six Ordinary Shares in issue (where each of Kevin Nowlan, Frank O'Neill, Christina Brady, John McNally, Eoin McDermott and John Vaudin is the registered holder of one such Ordinary Share). Christina Brady is an employee and shareholder of WKN. John McNally is a director of WKN. Eoin McDermott and John Vaudin are directors and shareholders ofWKN. On Admission, CREF will hold 23,570,000 Ordinary Shares, representing 6.46% 1 of the issued share capital of the Company. On Admission, funds managed by Moore Capital will hold 25,000,000 Ordinary Shares, representing 6.85%2 of the issued share capital ofthe Company. On Admission, funds managed by Putnam Investments will hold 30,000,000 Ordinary Shares, representing 8.22%3 of the issued share capital of the Company. On Admission, Quantum will hold 30,000,000 Ordinary Shares, representing 8.22%4 of the issued share capital of the Company. On Admission, investment advisory clients of Wellington Management will hold 15,962,100 Ordinary Shares, representing 4.37%5 of the issued share capital of the Company. The above Shareholders do not have any different voting rights to other Shareholders. The Company is not aware of any persons who, directly or indirectly, jointly or severally, exercise or could exercise control over the Company as at, or immediately following, Admission. 8.7 1 2 3 4 5 Historical key financial information: Not applicable. This Prospectus contains limited historical financial information about the Company as the Company is recently incorporated and has a limited operating history. Assuming no exercise of the Over-allotment Option. As per footnote 1. As per footnote 1. As per footnote 1. As per footnote 1. 4
  • Section B - Issuer B.8 Selected key pro forma financial information: Not applicable. This Prospectus does not contain pro forma financial information. 8.9 Profit forecast: Not applicable. This Prospectus does not contain profit forecasts or estimates. 8.10 A description of the nature of any qualifications in the audit report on the historical financial information: Not applicable. Except for limited balance sheet information, no audited historical financial statements have been prepared as at the date of this Prospectus as the Company is recently incorporated. 8.11 Qualified working capital: Not applicable. In the opinion of the Company, taking into consideration the net proceeds to be received by the Company from the Issue, the working capital available to the Company is sufficient for the Company's present requirements and, in particular, is sufficient for at least the next 12 months from the date of this Prospectus. 5
  • Section B - Issuer 8.34 Investment policy: Background The Directors believe that a unique opportunity currently exists to build a high quality property portfolio by investing in the Irish commercial property market. Following the substantial fall in commercial property values in Ireland since 2007 (67% from Q3 2007 to Q2 2013) (Source: Jones Lang LaSalle Materials), the Directors believe that there will be a significant upward re-pricing of assets over the medium term. In addition, the Directors believe that a significant amount of Irish property assets will become available as a result of expected deleveraging by banks and other institutions. As and when this expected deleveraging and re-pricing has occurred, the Board believes the market will stabilise. By that time, the Directors expect to have built a high grade rental income stream and intend to continue to grow the business thereafter as an income focused, active asset management property company. Summary Investment Policy The Company aims to build a portfolio of attractively located, institutional quality, incomeproducing properties primarily in the Greater Dublin area. The Company intends to concentrate on the office sector, but will consider industrial, retail, warehousing and distribution, recreational, residential and other Irish property assets. The Company may consider investments outside the Greater Dublin area, but only where the opportunities meet the Company's investment policy. When considering property for acquisition or development by the Company, the Investment Manager will typically seek targets with some of the following characteristics: • Individual property assets in the value range of € I 0 million to €50 million (property assets outside of this range can be considered where approved by the Board); • Central Dublin office properties; • Office properties that the Management Team expects to be in demand by high quality tenants; • Prime and good quality secondary assets in prime city and regional locations; • Properties with significant rental and capital growth potential which can be realised through active asset management; • Retail properties in city centres and certain suburban areas; • Warehousing, industrial and distribution facilities located in close proximity to motorway infrastructure; • Prime Dublin single-family and/or multi-family residential units; • Recreational, leisure, hospitality or other type properties which the Management Team believes are well-let and have potential for long-term capital appreciation; • Multi-tenanted assets; • Sites or buildings with early potential for development;
  • Section B - Issuer • Mixed use buildings where the major user of the building fits into one of the above categories but where the buildings non-primary uses may not; • Such other specialist building or property that the Board considers will give attractive investor return. The Company intends to assemble a high quality, diversified portfolio of property assets including through the following methods: • by participating in public bidding processes for suitable property offered on the market; • by actively seeking to acquire assets off market, using the considerable network and long standing professional relationships which the Management Team has established with expected suppliers of suitable assets; • by seeking to enter into joint bidding arrangements with other investors for selected parts of portfolios which are the subject of sale processes, particularly those investors interested in acquiring large distressed loan books; • by seeking to enter into joint venture arrangements where the existing owner transfers a portion of its shareholding in a property investment to the Company with a view to benefitting from the Company's property management expertise; • by seeking to make commitments to acquire buildings which meet the Company's investment criteria but are still under development and the development and letting risk is taken by a third party; and • by constructing buildings or becoming involved in joint ventures or other arrangements whereby such construction may occur. In the implementation of the Investment Policy and so as to ensure flexibility in how the Company pursues acquisitions from time to time in a manner which enhances shareholder value, the Company may acquire assets (including securities) with cash and, in circumstances where the Board believes it to be in the interests of shareholders so to do, through the issue of new Ordinary Shares or through a mixture of cash and the issue of new Ordinary Shares. Under Irish law, shareholders' statutory pre-emption rights arise only on the allotment of shares for cash. However, any issuances of new Ordinary Shares for noncash assets would be subject to compliance with the Irish Companies Acts, the Prospectus Regulations, the Prospectus Rules, the Listing Rules, the requirements of the Irish REIT regime, and other applicable requirements. The Management Team expects that a supply of property is likely to become available offmarket as vendors are anticipated to perceive off-market transactions as offering greater privacy, greater certainty of execution, opportunities to build long term relationships and the potential to execute larger portfolio transactions. The Management Team expects to deploy a significant portion of the Net Proceeds within 18 to 24 months. 7
  • Section B - Issuer The Company intends to use the experience and skills of the Management Team to engage in active asset management. This would involve acquiring properties that may not initially fall into the category of institutional grade (for example, assets which feature short leases, vacancies or require refurbishment), but are in good locations and can be brought up to institutional standard by new investment and skilled asset management. The Management Team believes that this sector of the market will be less competitive than the market for institutional grade assets and therefore has the potential to generate enhanced long term returns compared to those achievable by investing in properties requiring a more passive asset management role. The Management Team will seek to generate significant returns, in terms of income and capital, for Shareholders with a target Total Shareholder Return range of I 0% to 15% when the Net Proceeds are fully invested. 6 Leverage The Company will use commercially prudent levels of leverage to enhance equity returns over the long term. Under the Irish REIT Regime, the Company is restricted in terms of borrowing to a REIT LTV ratio which does not exceed 50%. The Board currently intends that the Company's aggregate borrowings as a percentage of the market value of the Company's total assets will not exceed 40% at the time of any borrowing, and, in any event, the Company shall not, without prior shareholder approval, increase its borrowing above a level of 50% of the aggregate market value of its assets. However, within the REIT LTV ratio restrictions of the Irish REIT Regime, the Board may modify the Company's leverage policy from time to time taking into account then prevailing economic and market conditions, availability and cost of finance, the fair value of the Company's assets, acquisition and active management opportunities or other factors the Board deems appropriate. No modification of the Company's aggregate borrowings policy above a 50% level shall occur without prior shareholder approval. The Board will monitor the levels of borrowing carefully and manage maturity profiles to reduce refinancing risk. The Board may also use hedging to mitigate interest rate risk. Restrictions To comply with the Irish REIT Regime, the Company will be required to carry on a Property Rental Business, generating rental income, and at least 75% of its Aggregate Income must be derived from such a Property Rental Business. Furthermore, at least 75% of the aggregate market value of the Company must relate to assets of the Property Rental Business. It must acquire at least three properties, of which the market value of no one of which may be more than 40% of the total market value of the properties constituting the Property Rental Business. This latter condition has a grace period of three years from the date upon which the Company elects to become an Irish REIT to allow time to build up a portfolio of rental properties. Once fully invested however, the Company will have a greater diversification within its portfolio than the minimum required under the Irish REIT Regime with a minimum of five properties, with no one property asset representing more than 30% of the Company's total assets at the time of acquisition. The Company can have borrowings of up to 50% of the aggregate market value of the assets 6 These are targets only and not profit forecasts. There can be no assurance that these targets can or will be met and they should not be seen as an indication of the Company's expected or actual results or returns. Accordingly investors should not place any reliance on these targets in deciding whether to invest in the Ordinary Shares. In addition, as noted previously. prior to making any investment decision. prospective investors should carefully consider the risk factors described in Part II (Risk Factors) of the Prospectus. 8
  • Section B - Issuer of the business and must also maintain a ratio of Property Income plus Financing Costs to Financing Costs of not less than 1.25: 1. Cash Management Pending deployment of the Net Proceeds the Depositary, upon instruction from the Investment Manager, wiii manage the Company's cash not yet invested, in accordance with a Cash Management Policy approved by the Board. B.36 Regulatory status: The Company is incorporated and operates under the Irish Companies Acts. The Company is not currently subject to regulation by the Central Bank as a variable capital investment company pursuant to Part XIII of the 1990 Act, a unit trust pursuant to the Unit Trusts Act 1990 or as another form of regulated fund pursuant to any other collective investment scheme legislation in force in Ireland. Based on the provisions of AIFMD it is considered by the Directors that the Company may be an AIF within the scope of AIFMD. On this basis the Company has considered it prudent to proceed on the basis it is an AIF, which accordingly requires the appointment of an Alternative Investment Fund Manager ("AIFM") authorised or registered under the AIFMD Regulations and other matters such as, in the case of authorised AIFMs, the requirement for a depositary to be appointed to act as a depositary for the Company. The Investment Manager has been authorised as an AIFM under the AIFMD Regulations. However, while the Company is proceeding on the basis it is an AIF, the Directors do not believe that the Company is required itself under current law to be authorised by the Central Bank as a retail investor, or qualifying investor, AIF as it is not a variable capital investment company pursuant to Part XIII of the Companies Act 1990, a unit trust pursuant to the Unit Trusts Act 1990 or as another form of regulated fund pursuant to any other collective investment scheme legislation in force in Ireland. As the Company accordingly is not a regulated AIF it is not subject to such regulatory requirements and restrictions under the Irish collective investment scheme legislation that apply to retail investor, or qualifying investor, AIFs. Such requirements would depending on whether the Company was authorised as a retail investor, or qualifying investor, AIF, include additional restrictions including in relation to the nature of investments, level of borrowing, the type of service providers it can utilise and additional disclosures required to be made to investors. The Company wiii elect to become an Irish REIT upon Admission and will need to comply with certain on-going conditions and requirements in order to maintain Irish REIT status (including minimum distribution requirements). B.37 Typical investors: It is anticipated that the profile of typical investors in the Company will be institutional and sophisticated investors to include specialised international property investors who may seek to diversify their portfolios by way of investment in the Irish commercial property market. In addition it is anticipated that investors will include private investors acting on the advice of their stockbroker or financial adviser. A prospective investor should be aware that the value of an investment in the Company is subject to normal market fluctuations and other risks inherent in investing in securities. There is no assurance that any appreciation in the value of the Ordinary Shares will occur or that the investment objectives of the Company will be achieved. The Ordinary Shares may not be suitable as investments. The value of investments and the income derived therefrom may fall as well as rise and investors may not recoup the original amount invested in the Company. 9
  • Section B - Issuer There is no guarantee that any appreciation in the value of the Company's investments will occur and investors may not get back the full value of their investment. Any investment objectives of the Company are targets only and should not be treated as assurances or guarantees of performance. 8.38 Investment of 20%. Not applicable. The Company will not invest 20% or more in a single underlying issuer or or more in a single investment company. underlying issuer or investment company: 8.39 Investment of 40%. Not applicable. The Company will not invest 40% or more in another collective investment or more in another undertaking. collective investment undertaking: 8.40 Applicant's service providers: - REIT Investment Management Agreement The REIT Investment Management Agreement entered into by the Company and Nowlan Property REIT Management Limited (the "Investment Manager") governs the provision of investment management and related services to the Company by the Investment Manager. The REIT Investment Management Agreement has an initial term of five years and thereafter will automatically continue for consecutive three year periods, unless terminated by the Company or the Investment Manager. The Investment Manager is appointed on an exclusive basis to acquire properties on behalf of the Company, to manage the Company's assets and properties on behalf of the Company and to provide or procure the provision of various accounting, administrative, reporting, record keeping, AIFM and other services to the Company. The Investment Manager has discretionary authority to enter into transactions for and on behalf of the Company subject to certain reserved matters that require the consent of the Directors. Base Fee The Base Fee in respect of each Quarter will be calculated by reference to the sum of: (i) 0.25% of that portion ofEPRA NAY (excluding any uninvested Net Proceeds) at the end of that Quarter that is less than or equal to €450,000,000, (ii) 0.2% of that portion of EPRA NAY (excluding any uninvested Net Proceeds) at the end of that Quarter that is greater than €450,000,000 but less than or equal to €600,000,000, (iii) 0.15% ofthat portion ofEPRA NAY (excluding any uninvested Net Proceeds) at the end of that Quarter that is greater than €600,000,000, and (iv) 0.125% of any uninvested Net Proceeds at the end of that Quarter. The Base Fee will be paid to the Investment Manager quarterly in arrears, with the exception of the fee for the periods ending on 31 March 2014 and 30 June 2014, which shall be paid in advance to cover initial diligence and deal costs incurred by the Investment Manager. The base fees paid in advance will be calculated based on 0.125% of Net Proceeds raised per period and for the period ended 31 March 2014 will be increased prorata to reflect the period from Admission to 31 December 2013. Should any of the Net Proceeds be invested in the period to 31 March 2014 or 30 June 2014, any incremental fees due from the fee arrangements set out above in addition to those monies already advanced to the Investment Manager will be paid quarterly in arrears. 10
  • Section B - Issuer Performance Fee The Perfonnance Fee has been designed to incentivise and reward the Investment Manager for generating returns to Shareholders and to outperfonn the Reference Index annual return. The return to Shareholders in an Accounting Period is the sum of the change in the EPRA NA V per Ordinary Share and the total dividends per Ordinary Share that are declared in the Accounting Period (adjusted to exclude the effects of any issuance of Ordinary Shares during that Accounting Period). The Perfonnance Fee is calculated annually on a per Ordinary Share basis as to 50% by reference to the return to shareholders (via the calculation of REIT IMA Shareholder Return) and as to 50% by reference to outperfonnance of the Reference Index (via the calculation ofthe Relative Perfonnance Fee). REIT IMA Shareholder Return Performance Fee Following the end of each Accounting Period, the Investment Manager shall be entitled to be paid by the Company a fee equal to 50% of the lesser of: (I) (i) 15% of the excess of REIT IMA Shareholder Return over a I 0% annual return hurdle up to a 15% annual return hurdle Iili!li (ii) 20% of the excess ofREIT IMA Shareholder Return over a 15% annual return hurdle; and (2) 20% of the excess of the year-end EPRA NA V per Ordinary Share (which is adjusted to include total dividends declared in the Accounting Period and adjusted to exclude the effects of any issuance of Ordinary Shares during that Accounting Period) over the relevant high watennark per Ordinary Share, provided always that the numerical results of both (l} and (2} above are each greater than zero for the Accounting Period in question (the "REIT IMA Shareholder Return Perfonnance Fee"). The annual return hurdles reset annually to l 0% and 15% (as applicable) of the previous Accounting Period's closing EPRA NAV per Ordinary Share. The relevant high watennark in each Accounting Period is the highest EPRA NA V per Ordinary Share (adjusted to include total dividends declared during the most recent Accounting Period in which a Perfonnance Fee was payable (the "reference Accounting Period") and adjusted to exclude the effects of any issuance of Ordinary Shares during the reference Accounting Period) achieved in the reference Accounting Period or, if greater, the gross proceeds of the Issue plus further cash and non-cash issues of Ordinary Shares (excluding any issues ofPerfonnance Fee Shares) calculated on a per Ordinary Share basis, as at the end of the Accounting Period in respect of which the Perfonnance Fee is calculated. Relative Performance Fee In addition to the REIT IMA Shareholder Return Perfonnance Fee, the Investment Manager is entitled to a Relative Perfonnance Fee to incentivise and reward the Investment Manager for generating a total property return in excess of the Reference Index. The published methodology employed by IPD for calculating total property return excludes properties that are purchased, sold or in the course of development during the measurement period. IPD 11
  • Section 8 - Issuer publishes the Reference Index on an annual basis in accordance with its published methodologies and formulae. The total return of the Company's Property Portfolio in each Accounting Period as calculated by IPD will be expressed as both a monetary amount (the "Portfolio Return") and as a percentage return (the "Portfolio Percentage Return"). The difference between the total percentage return of the Reference Index and the Portfolio Percentage Return for an Accounting Period (the "Relative Performance Percentage"), if positive, will be used to determine the outperformance of the Portfolio Return. A monetary amount ("the Relative Outperformance Figure") will be calculated by multiplying the Portfolio Return by the percentage that the Relative Performance Percentage represents of the Portfolio Percentage Return. The following hurdle must also be overcome before a Relative Performance Fee becomes payable in respect of any Accounting Period (each a "Reference Period"): The Relative Performance Percentage relating to the First Accounting Period must be carried forward and aggregated with the Relative Performance Percentage in the immediately following Accounting Period. The resulting percentage figure must, in tum, be carried forward and aggregated with the Relative Performance Percentage in each successive Accounting Period preceding a Reference Period. A Relative Performance Fee will only be payable in respect of a Reference Period if and only to the extent that the Relative Performance Percentage in the Reference Period as reduced by the amount of any negative Relative Performance Percentage so carried forward itself results in a positive figure. Subject to overcoming this hurdle, the Relative Performance Fee is calculated at a rate of 50% of30% ofthe Relative Outperformance Figure in each Reference Period. The derived Performance Fee payable on a per Ordinary Share basis under REIT IMA Shareholder Return Performance Fee is then multiplied by the number of Ordinary Shares in issue at the year-end (but excluding, for that Accounting Period only, any Ordinary Shares issued during that Accounting Period), thereby increasing the multiplier for future years if any new Ordinary Shares are issued. EPRA-NAV will be a NAV calculated on the basis specified for calculations of "EPRA NAV" in guidelines issued by EPRA (August 2011 version only, unless otherwise agreed between the Company and the Investment Manager). In any calculation of such NA V as at a Valuation Point the value of the Property Portfolio taken into account in such calculation shall be the Open Market Value ofthe Properties at that Valuation Point and "NAV" as at the date of Admission shall be the amount of the Investment Equity (net of costs and expenses incurred by the Company in respect of the Admission and Placing). There is no maximum fee under the REIT Investment Management Agreement. The REIT Investment Management Agreement contains provisions to adjust the Performance Fee in certain circumstances. These circumstances are limited to amendments to take account of corporate actions which entail changes to the Company's share capital, such as consolidations, sub-divisions or bonus issues or other restmcturings or reorganisations affecting its share capital. There are no such adjustment provisions in respect of the Base Fee. The Performance Fee will be payable in Ordinary Shares, rounded down to the nearest 12
  • Section B - Issuer whole number, at a price per Ordinary Shares equal to the Average Closing Price (unless restricted by law or other regulation or if the Company otherwise determines that it is unable to issue or reissue Ordinary Shares in exchange for the Performance Fee, in which case it will be paid in cash) and will be subject to the following lock-in provisions (during which time there will be no disposal of the relevant portion of the Performance Fee Shares by the Investment Manager): -one third of the Performance Fee Shares (or cash) will be released from lock-in after 12 months; -one third of the Performance Fee Shares (or cash) will be released from lock-in after 24 months; and -one third of the Performance Fee Shares (or cash) will be released from lock-in after 36 months, unless a Lock-In Termination Event occurs, in which case they may be released earlier. The provisions permitting releases from the lock-in arrangements will be suspended if EPRA NA V falls below the gross proceeds of the Issue and any other subsequent equity issues excluding issues of Performance Fee Shares. Under the REIT Investment Management Agreement the Investment Manager is entitled to recover certain 'excluded costs' incurred by the Investment Manager that are paid to third parties. These excluded costs include advisory costs relating to valuations, rent review, disposals agency, legal fees, debt collection, specialist property management services of complex multi-united developments and administrative costs. The Directors and the Investment Manager currently intend that, at the expiry of the initial five year term of the REIT Investment Management Agreement and subject to the EPRA NAV of the Company then being not less than €650,000,000, the Company and the Investment Manager would seek that individuals comprising the management team of the Investment Manager would become an internal resource within the Company and in lieu of a continued engagement of the Investment Manager by the Company. The Directors and the Investment Manager would not anticipate such event resulting in any material increased costs for the Company, or involving the payment of any consideration or other amounts in connection with such engagement other than salaries and benefits and/or fees on market commercial terms and any regulatory costs and minimum capital requirements that may be required as a result of such direct engagement. However, there is no certainty that such an arrangement will occur. Placing and Sponsor Agreement The Company, the Investment Manager, the Directors, the Management Team and the Joint Bookrunners have entered into the Placing and Sponsor Agreement pursuant to which the Joint Bookrunners have severally agreed, subject to certain conditions that are typical for an agreement of this nature (the last condition being Admission), to use their respective reasonable endeavours to procure subscribers for the Ordinary Shares under the Placing at the Issue Price. The Company has agreed to pay the Joint Bookrunners, (i) if the Placing is less than or equal to €200 million, a commission equal to 2.25% of the value of the Placing or, (ii) ifthe Placing is greater than €200 million, a commission equal to 2.25% of the first €200 million of the Placing and 3.25% of the value of the excess of the Placing over and above €200 million. 13
  • -- Section B - Issuer Registry Services Pursuant to the Registrar Agreement dated 4 November 2013, the Registrar has been appointed to act as the Company's registrar. Under the Registrar Agreement the Registrar shall be entitled to fees based on the number of shareholder accounts subject to a minimum annual fee of €4,000 and to additional fees for processing transfers, allotments and dividends and attending at shareholder meetings. There is no maximum amount payable under the Registrar Agreement. The Registrar will also be entitled to recover reasonable disbursement costs. Depositary Agreement Pursuant to the Depositary Agreement, the Company has appointed Credit Suisse International, Dublin Branch, as the Depositary for the safe-keeping of the Company's assets and to provide such other services as required under the AIFMD. The Depositary is eligible to act as a depositary under the AIFMD Regulations and is obliged to comply with its obligations under the AIFMD and AIFMD Regulations. Upon instruction from the Investment Manager, the Depositary will also manage the Company's cash not yet invested, in accordance with the Cash Management Policy approved by the Board. For the services provided under the Depositary Agreement, the Depositary shall be entitled to the annual fees of 0.04% of Net Asset Value where assets are under €300 million and 0.03% of Net Asset Value where assets are over €300 million subject to a minimum fee of €4,500 per month as well as transaction and on boarding fees. Audit Services Deloitte will provide audit services to the Company. The Company's annual report and accounts will be prepared in accordance with IFRS as adopted by the EU. The fees charged by Deloitte will depend on the services provided and will be computed, among other things, on the time spent by the auditor on the affairs of the Company. There is therefore no maximum amount payable under the Deloitte engagement letter. Company Secretarial Services Chartered Corporate Services is the Company Secretary of the Company. The Company Secretary will be responsible for carrying out the function of Company Secretary to include the preparation of agendae and minutes for Board and committee meetings and other matters such as the filing of the Company's annual return and the maintenance of statutory registers. The fee payable to Chartered Corporate Services for their services will be €19,000 per annum in addition to reasonable out-of-pocket expenses. Any work which is carried out and which does not form part of the agreed service package will be invoiced as an additional charge, to be agreed in advance but which will usually be at normal hourly commercial rates. B.41 Regulatory status of The Investment Manager has obtained authorisation from the Central Bank as an authorised Investment Manager: AIFM under the AIFMD Regulations. As a consequence of being authorised as an AIFM under the AIFMD Regulations, the 14
  • Section B - Issuer Investment Manager is obliged to adopt and implement and will be obliged to (i) comply on an on-going basis with a programme of activity, the form of which has been agreed with the Central Bank, (ii) put in place a variety of policies and procedures dealing with matters such as risk management, liquidity management, conflicts of interest, supervision of delegates, complaints handling, internal audit, record keeping and remuneration among other matters and (iii) comply with on-going requirements regarding minimum levels of capital as well as reporting obligations to the Central Bank and to Shareholders. As a consequence of being an AIF which has an authorised AIFM, the Company is obliged to engage the Depositary to act as depositary for the Company. B.42 Calculation ofNet Asset Value: The NA V attributable to the Ordinary Shares will be published at the time of publication of the Company's interim and annual financial results through a Regulatory Information Service. The NAV will be based on the most recent valuations of the Company's property assets, as at 3 I March and 30 September in each year, and calculated in accordance with IFRS as adopted by the EU. Valuations of the Company's property assets will be made in accordance with the appropriate sections of the RICS Red Book at the date of valuation. This is an internationally accepted basis of property valuation. The valuations will be undertaken by a suitably qualified independent valuation firm or firms. B.43 Cross liability: Not applicable; the Company is not an umbrella collective investment undertaking and as such there is no cross liability between classes or investment in another collective investment undertaking. B.44 Key financial information: Not applicable; the Company is recently incorporated and has a limited operating history and, except for limited balance sheet information, no financial statements have been made up as at the date of this Prospectus. B.45 Portfolio: Not applicable; the Company is recently incorporated, has a limited operating history and does not hold any investment assets as at the date of this Prospectus. B.46 Net asset value: Not applicable; the Company is recently incorporated, has a limited operating history and does not hold any investment assets as at the date of this Prospectus. Section C- Securities C.l Type and class of security: 365,000,000 Ordinary Shares of nominal value €0.1 0 each. The ISIN number of the Ordinary Shares will be IEOOBGHQ1986. There will be no application for any other class of shares of the Company to be admitted to listing or trading on any exchange. C.2 Currency of the securities issue: The Ordinary Shares will be denominated in euro. C.3 The number of shares issued: On Admission, the Company will have in issue 365,000,000 fully paid Ordinary Shares with a nominal value of€0.10 each, all ofwhich will be issued fully paid. 15
  • Section C - Securities The Ordinary Shares will be issued credited as fully paid and will rank pari passu in all respects with each other and will rank equally for all dividends and other distributions thereafter declared, made or paid in respect of the Ordinary Shares. C.4 A description of the rights attached to the securities: c.s Pursuant to the Articles, the Directors may, on the allotment and issue of any shares, impose Restrictions on the free transferability of restrictions on the transfer or disposal of such shares comprised in a particular allotment as the securities: may be considered by the Directors to be in the best interests of the Shareholders as a whole. In addition, the Directors in their absolute discretion and without assigning any reason therefor may decline to register any transfer of a share which is not fully paid or any transfer to or by a minor or person with a mental disorder as defined by the Mental Health Act 200 I, but this shall not prevent dealings in the shares from taking place on an open and proper basis. The Directors may decline to recognise any instrument of transfer unless: (a) the instrument of transfer is accompanied by the certificate of the shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer (save where the transferor is a stock exchange nominee); (b) the instrument of transfer is in respect of one class of share only; (c) the instrument of transfer is in favour of not more than four transferees; (d) the instrument of transfer is lodged at the registered office of Company or at such place as the Directors may appoint; (e) they are satisfied that all applicable consents, authorisations, permissions or approvals of any governmental body or agency in Ireland or any other applicable jurisdiction required to be obtained under relevant law prior to such transfer have been obtained; and (f) they are satisfied that the transfer would not violate the terms of any agreement to which the Company (or any of its subsidiaries) and the transferor are part or subject. The Directors of the Company may, under the Articles, refuse to register a transfer of any shares in the capital of the Company if the transfer is in favour of any person, as determined by the Directors, to whom a sale or transfer of shares, or whose direct, indirect or beneficial ownership of shares, would or might (i) cause the Company to become an "investment company" under the US Investment Company Act (including because the holder of the shares is not a "qualified purchaser" as defined in the US Investment Company Act) or to lose an exemption or status thereunder to which it might otherwise be entitled; (ii) cause the Company to be required to register under the US Exchange Act or any similar legislation; (iii} cause the Company not to be considered a "foreign private issuer" as such term is defined in Rule 3b-4(c} under the US Securities Exchange Act of 1934 (the "US Exchange Act"); (iv) result in a person holding shares in violation of the transfer restrictions set forth in any offering memorandum published by the Company, from time to time; (v) result in any shares being owned, directly or indirectly, by Benefit Plan Investors or Controlling Persons other than, in the case of Benefit Plan Investors, Shareholders that acquire shares on or prior to Admission with the written consent of the Company, and, in the case of Controlling Persons, Shareholders that acquire the shares with the written consent of the Company; (vi) cause the assets of the Company to be considered "plan assets" under the Plan Asset Regulations; (vii) cause the Company to be a "controlled foreign corporation" 16
  • Section C- Securities for the purposes of the US Internal Revenue Code of 1986 (the "Code"); (viii) result in Ordinary Shares being owned by a person whose giving, or deemed giving, of the representations as to ERISA and the Code set forth in the Articles is or is subsequently shown to be false or misleading; or (ix) otherwise result in the Company incurring a liability to taxation or suffering any pecuniary, fiscal, administrative or regulatory or similar disadvantage (any such person a "Non-Qualified Holder"). In addition, if it comes to the notice of the Company that any shares in the capital of the Company are owned directly, indirectly or beneficially by any Non-Qualified Holder, the Board may, under the Articles, serve a notice upon such Non-Qualified Holder requiring such Non-Qualified Holder to transfer the shares to an eligible transferee within 14 days of such notice; and, if the obligation to transfer is not met, the Company may compulsorily transfer the shares, in a manner consistent with the restrictions set forth in the Articles. If a Property Income Distribution is paid to a Substantial Shareholder and the Company has not taken reasonable steps to avoid doing so, the Company would become subject to an additional tax charge. The Articles include provisions that enable the Company to demonstrate to the Irish Revenue that it has taken reasonable steps to avoid paying a Property Income Distribution to a Substantial Shareholder. Among other matters, these provisions allow the Directors of the Company to require the disposal of shares in the Company by giving notice in writing to the persons they believe are Relevant Registered Shareholders in respect of the relevant shares if (i) the Directors believe such shares comprise all or part of a Substantial Shareholding of a Substantial Shareholder and are not satisfied that such a Substantial Shareholder would not be beneficially entitled to the Property Income Distribution if it were paid; or (ii) there has been a failure to comply with a notice given by the Directors, to the persons they believe are Relevant Registered Shareholders in respect of the relevant shares, to the satisfaction of the Directors within the period specified in such notice; or (iii) any information, certificate or declaration provided by any person in relation to shares in the Company for the purpose of the REIT provisions was materially inaccurate or misleading. In addition to any other right or power of the Company under the Irish Companies Acts, under the Articles the Directors of the Company may at any time give a Shareholder a notice requiring that Shareholder to notify the Company of his interest in any Ordinary Shares in the Company and, where a Shareholder fails to comply with such notice or any notice served by the Company under the Irish Companies Acts, the Directors of the Company may serve a further notice on the relevant Shareholder directing that, amongst other things, where the relevant Ordinary Shares represent at least 0.25% of the issued share capital of that class, save in specified circumstances, no transfer of any of such shares shall be registered. The Placing of Ordinary Shares to persons located or resident in, or who are citizens of, or who have a registered address in, countries other than Ireland or the United Kingdom, and the holding of Ordinary Shares by such persons, may be affected by the law or regulatory requirements of the relevant jurisdiction, which may include restrictions on the free transferability of such Ordinary Shares. Investors in such jurisdictions should consult their own advisers prior to an investment in the Ordinary Shares. C.6 Admission: Application has been made to (i) the Irish Stock Exchange for all of the Ordinary Shares to be admitted to the primary listing segment of the Official List of the Irish Stock Exchange; (ii) the UK Listing Authority for all of the Ordinary Shares to be admitted to the premium listing segment of the Official List of the UK Listing Authority; (iii) the Irish Stock Exchange for all of the Ordinary Shares to be admitted to trading on its regulated market for listed securities; and (iv) the London Stock Exchange for all of the Ordinary Shares to be 17
  • Section C - Securities admitted to trading on its main market for listed securities. C.7 Dividend policy: The Directors intend to maintain a dividend policy which has due regard for the Irish REIT Regime and for sustainable levels of dividend payments. Under the Irish REIT Regime, subject to having sufficient distributable reserves, the Company will be required to distribute to Shareholders at least 85% of the Property Income of its Property Rental Business for each accounting period. Subject to the foregoing, the Directors intend to reinvest proceeds from disposals of assets in accordance with the Company's investment policy. The Company intends to pay dividends when it is considered appropriate to do so by the Board. However, in accordance with the Irish REIT Regime, provided it has sufficient distributable reserves, the Company's first dividend must be paid by 23 December 2014. Section D-Risks D.l Key information on the key risks that are specific to the issuer or its industry: Prior to investing in the Ordinary Shares, prospective investors should consider the risks associated therewith. The risks relating to the Company and/or its industry include the following: • The Company is newly formed and has a limited operating history, and prospective investors in the Company will have limited data to assist them in evaluating the prospects of the Company and the related merits of an investment in the Ordinary Shares. • The Company is to be externally managed and so the ability of the Company to achieve its investment objectives is significantly dependent upon the Investment Manager and the expertise of the Management Team. There can be no assurance that the Investment Manager will be successful in achieving the Company's investment objectives. • The Company is dependent on the Investment Manager's ability to procure and maintain access to suitable skilled and experienced staff to support the Management Team and to retain the services of those support staff (to the extent it employs support staff directly). • The Company expects to face competition from other property investors for the purchase of suitable properties and in seeking creditworthy tenants for acquired properties. The existence and extent of competition in the commercial property market may also have a material adverse effect on the Company's ability to secure tenants for properties it acquires at satisfactory rental rates. • Pending deployment of the Net Proceeds to acquire property investments, the Company intends for cash held by it to be invested by the Depositary, upon instruction from the Investment Manager, in cash deposits, government securities and money market funds in accordance with the Cash Management Policy. There can be no assurance as to how long it will take for the Company to invest any or all of the Net Proceeds in accordance with its investment policy and it may not find suitable properties in which to invest all of the Net Proceeds. • Uncertainty continues to surround the pace and scale of economic recovery, both in 18
  • Section D-Risks Ireland and globally, and conditions could deteriorate. Continuation or worsening of current strained global economic conditions and the volatility of international markets could affect the Company. The precise nature of all the risks and uncertainties the Company faces as a result of the Irish and global economic outlook is difficult to predict, in view of uncertainty regarding the scale and pace of economic recovery. Consequential adverse effects could be manifested by any, all or a combination of: lack of available credit, reducing property values, decreasing rental values, difficulties in selling properties at acceptable values or at all, tenant defaults and changes in planning, environmental, commercial lease and tax laws and practices. • Revenues earned from, and the capital value and disposal value of, properties held by the Company and the Company's business may be materially adversely affected by a number of factors inherent in property management. • The valuation of property and property-related assets is inherently subjective. To the extent that valuations of the Company's properties do not fully reflect the value of the underlying properties this may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. • Property markets are generally illiquid, and the Company may dispose of or be required to dispose of, investments at a time which results in a lower than expected return (and possibly a loss) on such investments. • The target Total Shareholder Return range set out in this Prospectus is a target return only and is based on a number of assumptions including assumptions relating to forecasts of increases in property capital and rented values. There can be no assurance that the Company's investments will meet these targets or level of return. • The Investment Manager is a newly incorporated entity with no experience of operating as an AIFM. If the Investment Manager fails to comply with the legal requirements applicable to an authorised AIFM it may lose its authorisation. In that event, the Investment Manager may not be permitted to continue to manage the Company or market interests in the Company and a successor investment manager duly authorised as an AIFM would need to be appointed to perform these functions. The Company is reliant upon the investment expertise of the Investment Manager and there is no guarantee that a suitably qualified successor investment manager could be found or could be engaged on terms comparable to those applicable to the Investment Manager. Any transition to a successor investment manager could result in significant costs being incurred by the Company and material disruptions to the investment activities, operations and marketing of the Company and its relationships with its tenants. These factors may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. • The Investment Manager has obtained authorisation from the Central Bank as an AIFM under the AIFMD Regulations. The AIFMD has only recently come into force. Changes to the AIFMD regime or new recommendations and guidance as to its implementation may impose new operating requirements and result in a change in the operating procedures of the Investment Manager and its relationship with the Company and service providers and may impose restrictions on the investment activities that the Investment Manager (and in tum the Company) may engage in, and may increase the on-going costs borne, directly or indirectly, by the Company by virtue of the contractual arrangements agreed between the Company and the Investment Manager and between the Company and the Depositary. 19
  • Section D-Risks • • D.3 Key information on the key risks that are specific to the securities: The Directors do not believe that the Company itself requires to be authorised by the Central Bank as a retail investor, or qualifying investor, AIF. If the Company itself is subsequently determined to be a retail investor, or qualifying investor, AIF the Company would be brought within the scope of Irish collective investment scheme legislation. This could result, among other things, in the Company becoming subject to the Central Bank's AIF Rulebook and the requirements therein applicable to retail investor, or qualifying investor, AIFs as the case may be, depending on whether the Company was a retail investor, or a qualifying investor, AIF. These requirements depending on whether the Company was a retail investor or a qualifying investor AIF are prescriptive in a number of respects and could materially restrict the Company and may significantly impair the Company's ability to achieve its investment objectives and return to shareholders. In addition, there is a risk that although the Company may be required to be authorised as a retail investor, or qualifying investor, AIF the Central Bank may refuse to so authorise the Company, in which case the Company could not continue its business and would have to be liquidated. The Company will elect for Irish REIT status under the TCA on Admission but there is no guarantee that the Company will, following its election to become an Irish REIT, continue to be able to maintain Irish REIT status (whether by reason of failure to satisfy the conditions for Irish REIT status or otherwise). If the Company does not obtain status as an Irish REIT or if it achieves such status and such is subsequently withdrawn it would then be subject to tax on the profits of its Property Rental Business and chargeable gains on disposal of property forming part of its Property Rental Business. The risks relating to the Ordinary Shares include the following: • A liquid market for the Ordinary Shares may fail to develop . • The market price of the Ordinary Shares may not reflect the value of the underlying investments of the Company and may be subject to wide fluctuations in response to many factors. In addition, the market value of the Ordinary Shares may vary considerably from the Company's underlying Net Asset Value. There can be no assurance that Shareholders will receive back the amount of their investment in the Ordinary Shares. • There is a risk that the Company may generate Property Income but not have sufficient cash to make the level of distributions required under the Irish REIT Regime. If the Company does not have sufficient cash, it may be required to borrow to fund the distribution, which would increase its finance costs, could reduce its ability to borrow to finance property acquisitions and could have a material adverse effect on the Company's financial condition, business, prospects and results of operations. • Sales of Ordinary Shares by members of the Board, the Investment Manager or the Management Team (or any other entity controlled by any of them or in which any of them has an interest), or the possibility of such sales, may affect the market price of the Ordinary Shares and may make it more difficult for Shareholders to sell the Ordinary Shares at a time and price that they deem appropriate. • Immediately following Admission, a number of Shareholders will have significant 20
  • Section D-Risks holdings of Ordinary Shares. It is possible that, in the future, other investors may also have significant holdings of Ordinary Shares potentially possessing significant voting power to influence matters requiring Shareholder approval. The interests of any other significant investor may accordingly conflict with those of other Shareholders. Sales of Ordinary Shares or interests in Ordinary Shares by any significant investor could cause the market price of the Ordinary Shares to decline. • The Company may become subject to an additional tax charge if it pays dividends to, or in respect of, a Substantial Shareholder. Consequently, the Articles contain provisions designed to avoid the situation where dividends may become payable to Substantial Shareholders. Accordingly, if a Shareholder is a Substantial Shareholder this would adversely affect that person's ability to receive dividends and may result in a requirement for all or some of the Ordinary Shares held by that person to be sold. Section E-Offer The estimated net proceeds receivable by the Company from the Issue (assuming there is no exercise of the Over-allotment Option and after the deduction of commissions and other estimated fees and expenses payable by the Company and incurred in connection with the 7 Issue of approximately €12,600,000 ) is €352,360,000. E. I The total net proceeds and an estimate of the total expenses ofthe issue: E.2a The estimated net proceeds are as set out in E.1 above. The Company's principal use of the Reasons for the Net Proceeds will be to fund future property investments as well as to fund the Company's issue, use of operating expenses consistent with the investment policy of the Company. proceeds and estimated net amount of the proceeds: E.3 A description of the terms and conditions ofthe issue: Not applicable; there is no public offer. Credit Suisse and Goodbody have conditionally placed 360,938,000 Ordinary Shares at the Issue Price with certain institutional and qualified professional investors, and in Ireland through Goodbody only, with certain other investors, being existing clients of Goodbody, and a further 462,000 Ordinary Shares have been conditionally placed at the Issue Price with certain persons directly, in each case in circumstances which do not give rise to a public offer in respect of which the Company would be obliged to publish a prospectus. These 361,400,000 Ordinary Shares in aggregate 8 represent 99.01% of the issued share capital of the Company on Admission. The Placing is conditional upon, among other things: (a) the Placing and Sponsor Agreement having become unconditional in all respects and not having been terminated in accordance with its terms before Admission; (b) Admission occurring; and 7 8 Assuming no exercise of the Over-allotment Option. Assuming no exercise of the Over-allotment Option. 21
  • Section ~ffer (c) the requirement under Rule 16.2.8 of chapter 16 of the Irish Listing Rules, that the Company demonstrates that it will have a significant market capitalisation on admission (based on the issue price and shares, other than treasury shares, in issue on admission), being satisfied. 9 In addition, members of the Board and Founder Group have entered into the Board and Founder Group Subscription Agreement with the Company pursuant to which they have agreed, conditional upon Admission occurring and the Placing and Sponsor Agreement having become unconditional in all respects and not having been terminated in accordance with its terms before Admission, to subscribe for 3,200,000 Ordinary Shares for an aggregate amount of €3,560,000, which together with the 400,000 Ordinary Shares beneficially held by William Nowlan at the date hereof aggregate to an investment by the Board and Founder Group of €3,600,000 for 3,600,000 Ordinary Shares (representing approximately 0.99% of the issued share capital of the Company on Admission assuming there is no exercise of the Over-allotment Option). Furthermore, WKN Staff have been given the opportunity to acquire Ordinary Shares at the Issue Price. E.4 A description of any interest that is material to the issue/offer including conflicting interests: Under the Irish Companies Acts a public limited company is required to have a minimum of seven members and issued share capital of at least €38,092.14. As at 5 December 2013 (being the latest practicable date prior to the issue of this Prospectus), William Nowlan holds 399,994 Ordinary Shares representing over 99.99% of the issued share capital of the Company. He is also the beneficial holder of the remaining six Ordinary Shares in issue (where each of the members of Kevin Nowlan, Frank O'Neill, Christina Brady, John McNally, Eoin McDermott and John Vaudin is the registered holder of one such Ordinary Share). In addition, members of the Board and Founder Group have entered into the Board and Founder Group Subscription Agreement with the Company pursuant to which they have agreed, conditional upon Admission occurring and the Placing and Sponsor Agreement having become unconditional in all respects and not having been terminated in accordance with its terms before Admission, to subscribe for 3,200,000 Ordinary Shares for an aggregate amount of €3,560,000, which together with the 400,000 Ordinary Shares beneficially held by William Nowlan at the date hereof aggregate to an investment by the Board and Founder Group of €3,600,000 for 3,600,000 Ordinary Shares (representing approximately 0.99% of the issued share capital of the Company on Admission assuming there is no exercise of the Over-allotment Option). Furthermore, WKN Staff have been given the opportunity to acquire Ordinary Shares at the Issue Price. In addition, the Cornerstone Investors have entered into the Cornerstone Subscription Agreements with the Company pursuant to which they have agreed, conditional upon Admission occurring and the Placing and Sponsor Agreement having become unconditional in all respects and not having been terminated in accordance with its terms before Admission, to subscribe for, in aggregate, 124,532,100 Ordinary Shares at the Issue Price (representing approximately 34.12% of the issued share capital of the Company on Admission assuming there is no exercise of the Over-allotment Option). 9 For the purposes of Rule 16.2.8 'significant' means at least €100 million unless the Irish Stock Exchange agrees otherwise. 22
  • Section E-Offer E.S Name ofthe person or entity offering to sell the securities and details of any lock-in agreements: Save for the Company, there are no entities or persons offering to sell Ordinary Shares. The Company and the Board and Founder Group have agreed that, subject to certain customary exceptions, none of the Board and Founder Group shall sell any Ordinary Shares prior to the first anniversary of Admission. Ordinary Shares may be issued to the Investment Manager in accordance with the terms of the REIT Investment Management Agreement in respect of the Investment Manager's Performance Fee. Such Ordinary Shares will be subject to the following lock-in provisions (during which time there will be no disposal of the relevant portion of the Performance Fee Shares by the Investment Manager): -one third of the Performance Fee Shares (or cash) will be released from lock-in after 12 months; -one third of the Performance Fee Shares (or cash) will be released from lock-in after 24 months; and -one third of the Performance Fee Shares (or cash) will be released from lock-in after 36 months, unless a Lock-In Termination Event occurs, in which case they may be released earlier. Any distributions or dividends attributable to Performance Fee Shares declared and paid during the lock-in period shall be paid to and for the benefit of the Investment Manager. E.6 Dilution: Prior to Admission, William Nowlan holds I 00% of the beneficial interest in the Company and immediately following Admission he will hold a total of 500,000 Ordinary Shares and 0.14% of the beneficial interest in the Company; the Issue will result in the beneficial interest of William Nowlan in the Company being diluted by 99.86%. E.7 Estimated expenses charged to the investor by the issuer: Not applicable; no expenses will be charged to any investor by the Company in respect of the Issue. 23
  • PART II: RISK FACTORS Any investment in the Ordinary Shares is subject to a number of risks. Accordingly, prior to making any investment decision, prospective investors should carefully consider all the information contained in this Prospectus and, in particular, the risk factors described below. This Prospectus also contains forward-looking statements that involve risks and uncertainties. See "Forward Looking Statements" in Part VI (Important Information) of this Prospectus. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by the Company described below and elsewhere in this Prospectus. Prospective investors should note that the risks relating to the Company, its industry (being the commercial property market in Ireland) and the Ordinary Shares summarised in the section of this Prospectus headed Part I (Summary) are the risks that the Directors believe to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Ordinary Shares. However, as the risks which the Company faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarised in the section of this Prospectus headed Part I (Summary) but also, among other things, the risks and uncertainties described below. The Board considers the following risks to be material for prospective investors in the Company. However, the following list is not comprehensive of all risks that prospective investors should consider when making an investment in the Ordinary Shares and should be used as guidance only. Additional risks and uncertainties not currently known to the Board, or that the Board currently deems immaterial, may also have an adverse effect on the Company's financial condition, business, prospects and/or results of operations. In such a case, the market price of Ordinary Shares could decline and investors may lose all or part of their investment. Investors should consider carefully whether an investment in the Ordinary Shares is suitable for them in light of the information in this Prospectus and their personal circumstances. If investors are in any doubt about any action they should take, they should consult a competent independent professional adviser who specialises in advising on the acquisition of listed securities. The order in which risks are presented is not necessarily an indication of the likelihood of the risks actually material ising, of the potential significance of the risks or of the scope of any potential harm to the Company's financial condition, business, prospects and results of operations. Prospective investors should read this section in conjunction with this entire Prospectus. RISKS RELATING TO THE BUSINESS The Company is newly formed and has not yet made any investments. The Company was incorporated on 13 August 2013, has a limited operating history and, except for the limited balance sheet information in Part X (Historical Financial Information) of this Prospectus, does not have any historical financial statements or other meaningful operating or financial data. It is therefore difficult to evaluate the probable future performance of the Company. The Company intends to invest primarily in the Dublin commercial property market but currently it neither owns any properties nor has it entered into any formal negotiations with respect to any investment opportunities and it will not do so until after Admission. As a consequence, as at Admission, prospective investors in the Company will have no opportunity to evaluate the terms of any potential investment opportunities, actual investments or financial data to assist them in evaluating the prospects of the Company and the related merits of an investment in the Ordinary Shares. Before making any investment in a property, the Company will assess the value or potential value of such property and the potential return on its investment. In making this assessment and otherwise conducting due diligence, the Company will rely on the resources available to it, and the investigation by the Investment Manager. There can be no assurance, however, that due diligence examinations carried out by the Company and the Investment Manager will reveal all of the risks associated with such property, or the full extent of such risks (including structural damage, environmental hazards, legal restrictions or encumbrances, and non-compliance with existing building standards or health and safety or other regulations). In addition, where such risks are identified, the Company may decline to invest in that property. 24
  • Any investment in the Ordinary Shares is, therefore, subject to all of the risks and uncertainties associated with a new business, including the risk that the Company will not achieve its investment objectives and that the value of any investment made by the Company, and of the Ordinary Shares, could substantially decline. The Company is reliant on the performance of the Investment Manager and the expertise of the Management Team. The Company's asset portfolio is to be externally managed and the Company will rely on the Investment Manager, and the experience, skill and judgment of the Management Team, in identifying, selecting and negotiating the acquisition of suitable investments. Furthermore, the Company will be dependent upon the Investment Manager's successful implementation of the Company's investment policy and investment strategies, and ultimately on its ability to create a property investment portfolio capable of generating attractive returns. There can be no assurance that the Investment Manager will be successful in achieving the Company's investment objectives. The ability of the Company to achieve its investment objectives is therefore significantly dependent upon the expertise of the Management Team. The departure for any reason of a member of the Management Team could have an adverse impact on the ability of the Investment Manager to achieve the investment objectives of the Company. Any member(s) of the Management Team could become unavailable due, for example, to death or incapacity, as well as due to resignation. In the event of such departure or unavailability of any member(s) of the Management Team, there can be no guarantee that the Investment Manager would be able to find and attract other individuals with similar levels of expertise and experience in the Irish commercial property market or similar relationships with commercial property lenders, property funds and other market participants in Ireland. The loss of any member of the Management Team could also result in lost business relationships and reputational damage and, in particular, if any member of the Management Team transfers to a competitor this could have a material adverse effect on the Company's competitive position within the Irish property market. If alternative personnel are found, it may take time for the transition of those persons to the Investment Manager and the transition might be costly and ultimately might not be successful. The departure of any of the Management Team without timely and adequate replacement of such person(s) by the Investment Manager may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. The Company is also dependent on the Investment Manager's ability to procure and maintain access to suitably skilled and experienced staff to support the Management Team and to retain the services of those support staff (to the extent it employs support staff directly). Competition for skilled staff may be intense. In addition, the Company has no control over the personnel of or used by the Investment Manager. If any such personnel were to do anything or be alleged to do anything that may be the subject of public criticism or other negative publicity or may lead to investigation, litigation or sanction, this may have an adverse impact on the Company by association, even if the criticism or publicity is factually inaccurate or unfounded and notwithstanding that the Company may have no involvement with, or control over, the relevant act or alleged act. The Investment Manager is responsible for carrying out the day to day management and administration of the Company's affairs and, therefore, any failure in or disruption to the services of the Investment Manager (whether due to termination of the REIT Investment Management Agreement or otherwise) could cause a significant disruption to the Company's operations and relationships with tenants until a suitable replacement is found. The Investment Manager is also responsible for carrying out the day to day management and administration of the Company's affairs and, therefore, any failure in or disruption to the services of the Investment Manager (whether due to termination of the REIT Investment Management Agreement or otherwise) could cause a significant disruption to the Company's operations until a suitable replacement is found. The REIT Investment Management Agreement has an initial term of five years and thereafter will automatically continue for consecutive three year periods, unless terminated by either party in accordance with the terms further described in paragraph 11.1 of Part XV (Additional Information). There can be no guarantee that the Directors will continue to consider that the continuation of the REIT Investment Management Agreement is in the best interests of the Company (whether as a result of changing market conditions, availability of alternative providers or otherwise). However, under the terms of the REIT Investment Management Agreement the Company is restricted in its ability to terminate the REIT Investment Management Agreement prior to the expiration of its initial term. Prior to expiration, the Company may terminate the REIT Investment Management Agreement only in limited circumstances, including, among other things, if the Investment Manager is in breach of a material term of the REIT Investment Management Agreement and such breach, if capable of 25
  • remedy, has not been remedied within thirty days of the defaulting party being notified of such breach. See paragraph 11.1 of Part XV (Additional Information) for details on the Company's termination rights under the REIT Investment Management Agreement. There can be no assurance that the REIT Investment Management Agreement will be renewed at the end of the initial five year term or any subsequent three year term and furthermore in limited circumstances the Investment Manager may terminate the REIT Investment Management Agreement upon notice in writing to the Company. In the event of the expiry or termination (whether in accordance with its terms or otherwise) of the REIT Investment Management Agreement, there is no assurance that an agreement with a new investment manager can be entered into on similar terms or on a timely basis. Any entry into an agreement with less favourable terms or a replacement of the Investment Manager (whether on a timely basis or not) may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. Competition may affect the ability of the Company to make appropriate investments and to secure tenants at satisfactory rental rates. The existence and extent of competition in the property market for tenants may also have a material adverse effect on the Company's ability to secure suitable tenants for properties it acquires at satisfactory rental rates and on a timely basis and to subsequently retain such tenants. In addition an over-supply of commercial properties to the rental markets through over-development could impact on rental rates. Competition for tenants may cause difficulty in achieving rents in line with the Company's expectations and may result in increased pressure to offer new and renewing tenants financial (including lower rent levels) and other incentives. Any inability by the Company to compete effectively against other property investors or to effectively manage the risks related to competition may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. Delays in the deployment of the proceeds of the Issue (including due to delays in locating and/or acquiring suitable investments) may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. The Company expects to face competition from other property investors for the purchase of suitable properties and in seeking suitable tenants for acquired properties. Competitors for the acquisition of suitable properties may include the recently listed Green REIT p.l.c., any subsequently established REITs, and a number of institutional and private investors, both domestic and international that have been, are or may be, active in the Dublin and Irish commercial property market. Competitors may have greater financial resources than the Company and a greater ability to borrow funds to acquire properties, and may have the ability or inclination to acquire properties at a higher price or on terms less favourable than those the Company may be prepared to accept. Furthermore, the number of entities competing for suitable properties may increase. Competition in the commercial property market may lead to prices for existing properties being driven up. There can be no assurance that the Company will be successful in identifying or acquiring suitable investment opportunities. At the date of this Prospectus, the Company owns no properties and, pending deployment by it of the Net Proceeds to acquire property investments, it intends for cash held to be invested in cash deposits, government securities and money market funds. The Company expects that the income return on these temporary investments will be lower than the income return that it would earn from investment in property. There can be no assurance as to how long it will take for the Company to invest any or all of the Net Proceeds in property and it may not find suitable properties in which to invest all of the Net Proceeds. The longer the period before investment the greater the likelihood that the Company's financial condition, business, prospects and results of operations, and its ability to make distributions to Shareholders, will be materially adversely affected. Market conditions may have a negative impact on the Company's ability to identify and execute investments in suitable properties that generate acceptable returns. As was evident during the recent market downturn, market conditions have had a significant negative impact on the availability of credit, property pricing and liquidity levels. Lenders have also tightened their lending criteria, lending lower multiples of income, and increasing gearing restrictions and requiring greater levels of loan amortisation. Furthermore, locating suitable properties, conducting due diligence, negotiating acceptable purchase contracts and ultimately completing the purchase of a property typically require a significant amount of time. The Company may face delays in locating and agreeing the purchase of suitable investments (resulting in exposure to a risk of 26
  • increasing property prices) and, once the properties are identified, there could also be delays in completing the purchases, including delays in obtaining any necessary approvals. Necessary approvals may be refused, or granted only on onerous terms, and any such refusals, or the imposition of onerous terms, may result in an investment not proceeding as originally intended and could result in significant costs associated with aborting the transaction being incurred by the Company. In addition, in the event that the Company invests in properties through joint ventures (which could include joint ventures with sellers of properties), it will need to negotiate suitable arrangements with its proposed investment partners, which may also prove to be time-consuming or could restrict the Company's ability to act quickly or unilaterally. The Company's inability to select and invest, alone or as co-owner, in properties expeditiously may have a material adverse effect on the Company's financial condition, business, prospects and results of operations and may delay or limit distributions to Shareholders by the Company. The past performance of the Management Team is not a guarantee of the future performance of the Company. The Investment Manager is wholly-owned and controlled by WKN and by Frank J. Kenny and the Company is reliant on the Investment Manager to identify and manage prospective investments in order to create value for Shareholders. The Investment Manager was incorporated on 26 August 2013 and, accordingly, does not have any historical financial statements or other meaningful operating, financial or other performance data. As a consequence, as at Admission, prospective investors in the Company have limited data to assist them in evaluating the prospective performance of the Investment Manager. This Prospectus includes certain information regarding the past performance of the Management Team in respect of other companies and ventures. The past performance of the Management Team is not indicative, or intended to be indicative, of the future performance or results of the Company for several reasons. The previous experience of the Management Team and companies and ventures advised and/or operated by members of the Management Team may not be directly comparable with the Company's proposed business. Differences between the circumstances of the Company and the circumstances under which the track record information in this Prospectus was generated include (but are not limited to) actual acquisitions and investments made, investment objectives, fee arrangements, structure (including for tax purposes), terms, leverage, performance targets, market conditions and investment horizons. All of these factors can affect returns and impact the usefulness of performance comparisons and, as a result, none of the historical information or track record contained in this Prospectus is directly comparable to the Company's business or the returns which the Company may generate. The Company's investments will be concentrated in the Irish commercial property market and the Company will therefore /rave greater exposure to political, economic and otlrer factors affecting the lrislr market tlran more diversified businesses. General economic conditions in Ireland have experienced severe distress in recent years and have been adversely affected by Eurozone instability. The Company intends that its investment portfolio will consist primarily of direct or indirect interests in commercial property assets in Ireland, the majority of which are expected to be located in Dublin. This means the Company will have a significant geographic concentration risk relating to the Irish commercial property market, particularly in Dublin, and an investment in Ordinary Shares may therefore be subject to greater risk than investments in companies with more geographically diversified portfolios. Accordingly, the Company's performance may be significantly affected by events beyond its control impacting Ireland, and the Irish commercial property market in particular, such as a further general downturn in the Irish or global economy, changing demand for commercial property in Ireland, changing supply within a particular geographic location to include an unforeseen increase in supply of commercial property in the future, the attractiveness of property relative to other investment choices, changes in domestic and/or international regulatory requirements and applicable laws and regulations (including in relation to taxation and land use), Ireland's attractiveness as a foreign direct investment destination, political conditions, the condition of financial markets, the availability of credit, the financial condition of tenants, interest rate, exchange rate and inflation rate fluctuations, higher accounting and control expenses and other developments. Iflreland's status as a global business destination were damaged or diminished, tenant demand for commercial office space in Ireland could decrease. Any of these events could reduce the rental and/or capital values of the Company's property assets and/or the ability of the Company to acquire or dispose of properties and to secure or retain tenants on acceptable terms and, consequently, may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. In addition, significant concentration of investments in the Irish property market (and/or any particular sector within that market, such as commercial property in Dublin) may result in greater volatility in the value of the Company's investments and consequently its Net Asset Value and any downturn in 27
  • such markets may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. Uncertainty continues to surround the pace and scale of economic recovery, both in Ireland and globally, and conditions could deteriorate. Continuation or worsening of current strained global economic conditions and the volatility of international markets could affect the Company. The precise nature of all the risks and uncertainties the Company faces as a result of the Irish and global economic outlook is difficult to predict, in view of uncertainty regarding the scale and pace of economic recovery. Consequential adverse effects could be manifested by any, all or a combination of: lack of available credit, reducing property values, decreasing rental values, difficulties in selling properties at acceptable values or at all, tenant defaults, and changes in planning, environmental, commercial lease and tax laws and practices. Speculation regarding the creditworthiness of the sovereign debt of various Eurozone countries, including Ireland, and various related events (including proposals for investors to incur write-downs on the face value of Greek sovereign debt, a number of ratings downgrades of the sovereign credit ratings for Ireland since early 2009 and the taking of significant steps by the Irish government to support or recapitalise all domestic Irish banks and building societies) have given rise to concerns that sovereign debtors might default and that one or more countries might leave the European Union and/or the Eurozone, despite efforts to support affected countries and the Euro as a currency. The outcome of this situation remains unclear. Sovereign debt defaults and European Union and/or Eurozone exits (whether involving Ireland or other countries) could have a material adverse effect on the Company by, for example, impacting the availability of credit to the Company and causing uncertainty and disruption in relation to financing. Austerity and other measures (including, but not limited to currency redenomination or the reintroduction of exchange controls) introduced to limit, or to contain these issues, whether in Ireland or elsewhere, may themselves lead to economic contraction. As a result of the above or other factors, the Company's ability to acquire properties, and maintain or increase the occupancy levels of those properties through the execution of leases with new tenants and the renewal of leases with existing tenants, as well as its ability to increase rents over the longer terms, may be adversely affected. In particular, tenants going into administration, non-renewal of leases or early termination by significant tenants would result in a decrease in the Company's net rental income. In addition, significant expenditures associated with real estate, such as taxes, regulatory compliance works, service charges and renovation and maintenance costs, are generally not reduced in proportion to any decline in rental revenue from a property. If rental revenue from a property declines while the related costs do not decline, the Company's income and cash receipts could be adversely affected. Any deterioration in local or global economic conditions or conditions in the commercial or residential real estate market in Ireland which contributes to a further decline in real estate assets or rental revenues may result in adverse effects on the Company's financial condition, business, prospects and results of operations. The Company's business may be materially adversely affected by a number offactors inherent in property management, which have historically led to substantial fluctuations in the valuation ofproperty. Revenues earned from, and the capital value of, properties held by the Company and the Company's business may be materially adversely affected by a number of factors inherent in property management, including, but not limited to: decreased demand by potential tenants for properties; material declines in rental values; inability to recover operating costs such as insurance premiums, property taxes and service charges and maintenance on vacant space; incurring additional costs in respect of vacant space; exposure to the creditworthiness of tenants which could result in delays in receipt of rental and other contractual payments, inability to collect such payments at all including the risk of tenants defaulting on their obligations and seeking the protection of bankruptcy laws, the re-negotiation of tenant leases on terms less favourable to the Company, or the termination of tenant leases; 28
  • defaults by a number of tenants with material leasehold obligations (including pre-let obligations, obligations to maintain and repair a property or ensure a property's compliance with regulations) or a default by a significant tenant at a specific property or the continuing occupation of a property by a defaulting tenant that may hinder or delay the sale or re-letting of such property; material litigation with tenants; material costs and expenses in relation to inducing a new tenant to acquire a leasehold interest in vacant premises including the cost of refurbishing and/or fitting out the space or the provision of financial inducements such as the concession of rent free periods or the payment of a contribution towards the cost of the tenant's relocation or fitting out; reduced access to financing for tenants, thereby limiting their ability to alter existing operations or to undertake expansion plans; and increases in operating and other expenses or cash needs without a corresponding increase in income or tenant reimbursements, including as a result of increases in the rate of inflation in excess of rental growth, property taxes or statutory charges or insurance premiums, costs associated with tenant vacancies and unforeseen capital expenditure affecting properties which cannot be recovered from tenants. If the Company's revenues earned from tenants or the value of its properties are adversely impacted by the above or other factors, the Company's financial condition, business, prospects and results of operations may be materially adversely affected. The cyclical nature of property markets can be seen from the experience of the Irish property market in recent years: the value of property in Ireland declined sharply starting in 2007 as a result of economic recession, the credit crisis and reduced confidence in global financial markets caused by the failure, or near-collapse, of a number of global financial institutions. From a Q3 2007 "peak" in Irish commercial property values to Q2 2013 there was a fall of approximately 67% according to Jones Lang LaSalle. Although there have been recent signs that the Irish commercial property market has begun to recover, with commercial property values increasing in the second quarter of 20 13 and consequently, yields in certain segments compressing (Source: Jones Lang LaSalle Materials), there is no assurance that any recovery will continue or be sustainable. Irish property values could decline further and those declines could be substantial, particularly if the economy were to suffer a further recession. Further declines in the performance of the Irish economy or the Irish property market could have a negative impact on consumer spending, levels of employment, rental revenues and vacancy rates and, as a result, have a material adverse effect on the Company's financial condition, business, prospects and results of operations. Property valuation is inherently subjective and uncertain. Property assets may be difficult to value due to their lack of liquidity. The success of the Company depends significantly on the ability of the Company and the Investment Manager to assess the values of properties, both at the time of acquisition and the time of disposal. Independent valuations of the Company's property assets will also have a significant effect on the Company's financial standing on an on-going basis, on its ability to obtain financing and on its continuing compliance with the provisions of the Irish REIT Regime. The valuation of property and property-related assets is inherently subjective, in part because all property valuations are made on the basis of assumptions which may not prove to be accurate (particularly in periods of volatility or low transaction flow in the commercial property market), and in part because of the individual nature of each property. In determining the value of properties, the valuers are required to make assumptions in respect of matters including, but not limited to, the existence of willing sellers in uncertain market conditions, title, condition of structure and services, deleterious materials, plant and machinery and goodwill, environmental matters, statutory requirements and planning, expected future rental revenues from the property and other information. Such assumptions may prove to be inaccurate. Incorrect assumptions underlying the valuation reports could negatively affect the value of any of the Company's property assets and thereby have a material adverse effect on the Company's financial condition and performance. This is particularly so in periods of volatility or when there is limited property transactional data against which property valuations 29
  • can be benchmarked. There can also be no assurance that these valuations will be reflected in the actual transaction prices, even where any such transactions occur shortly after the relevant valuation date, or that the estimated yield and estimated rental value will prove to be attainable. The Company may invest in properties through investments in various property-owning vehicles, and may in the future utilise a variety of investment structures for the purpose of investing in properties, such as joint ventures. Where a property or an interest in a property is acquired through another company or an investment structure, the value of the entity or investment structure may not be the same as the value of the underlying property due, for example, to tax, environmental, contingent, contractual or other liabilities, or structural considerations. As a result, there can be no assurance that the value of investments made through those structures will fully reflect the value of the underlying property. To the extent valuations of the Company's properties do not fully reflect the value of the underlying properties, whether due to the above factors or otherwise, this may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. Loan asset acquisitions may not result in tile acquisition of tile property collateral, affecting the Company's return on investment in respect of that asset If loan receivables secured on property assets are acquired, the asset will be the loan receivable and not the collateral. Accordingly, the return on that investment will depend on the Investment Manager's credit appraisal of the loan receivable, the ease and value of enforcement against such collateral following default and the net proceeds of realisation of any subsequent sale of the collateral. Where, having acquired a property backed loan portfolio the Company also proposes to acquire such property collateral from a receiver, arms-length considerations and conflict of interest rules may result in the Company not acquiring such property collateral in which case the value of the property backed loan portfolio will be limited to the net realised proceeds of sale of the property collateral by the receiver. These factors may have an adverse effect on the Company's financial condition and results of operations. Property markets are generally illiquid, and the Company may dispose of or be required to dispose of investments at a time which results in a lower than expected return (and possibly a loss) on such investments. The Company may be required to dispose of an investment at certain times, including due to a requirement imposed by a third party (for example, a lending bank) or by reason of its winding up, and may elect to dispose of investments at any time. Investments in property can be relatively illiquid for reasons including but not limited to commercial properties being tailored to tenants' specific requirements, varying demand for commercial property, the investigation by individual potential buyers involved, and the complexity and significant amount of time and cost incurred for completion of property transactions. Such illiquidity may affect the Company's ability to vary its portfolio or dispose of properties in a timely fashion and/or at satisfactory prices in response to changes in economic, property market or other conditions. Property market downturns exacerbate low liquidity by reducing the number of available investors, deflating the market prices available and limiting sources of funding. There can be no assurance that, at the time the Company seeks to dispose of assets (whether voluntarily or otherwise) relevant market conditions will be favourable or that the Company will be able to maximise the returns on such disposed assets. It may be especially difficult to dispose of certain types of property during recessionary times. To the extent that market conditions are not favourable, the Company may not be able to dispose of property assets at a gain and may even have to dispose of property assets at a loss. Property values are affected by such factors as demand for property, interest rates, economic growth, fluctuations in property yields, rental levels and tenant default. Acquisitions of property or property related assets can be difficult or impossible to realise and, as there may not be an available market for them, it may not be possible to establish their current value at any particular time. The marketability and value of any properties owned by the Company will, therefore, depend on many factors beyond the control of the Company and there is no assurance that there will be either a ready market for properties of the Company or that such properties will be sold at a profit. If the Company is required to dispose of an investment on unsatisfactory terms, it may realise less than the value at which the investment was previously recorded, which could result in a decrease in Net Asset Value and lower returns to Shareholders. In addition, if the Company disposes of an asset within a period of three years from completion of 30
  • development of that asset where development costs exceed 30% of the market value of that asset at the date of commencement of the development, the profits arising from disposal of the property will be taxable (see risk factor entitled "Certain disposals of properties may have negative implications under the Irish REIT Regime" in this Part 11 (Risk Factors)). Further, in acquiring a property, the Company may agree to restrictions that prohibit the sale of that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that property. In addition, in circumstances where the Company purchases properties when the rate of return is low and purchase prices are high, the value of its properties may not increase over time and in the event it then sells such a property, it may incur a loss. Any inability of the Company to dispose of its investments or to do so at a gain, or any losses on the disposal of the Company's investments, may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. The Company may not acquire 100% control of some investments and may therefore be subject to the risks associated with shared ownership and control ofproperties. Pursuant to the Company's investment strategy, the Company may enter into a variety of investment structures in which the Company acquires less than a I 00% interest in a particular asset or entity and the remaining ownership interest is held by one or more third parties. As a result, the Company may not retain complete control over all decisions regarding those properties. These joint venture arrangements may expose the Company to the risk that: co-owners become insolvent or bankrupt, or fail to fund their share of any capital contribution which might be required, which may result in the Company having to pay the co-owner's share or risk losing the investment; co-owners have economic or other interests that are inconsistent with the Company's interests and are in a position to take or influence actions contrary to the Company's interests and plans (for example, in implementing active asset management measures), which may create impasses on decisions and affect the Company's ability to implement its strategies and/or dispose of the asset or entity; disputes develop between the Company and co-owners, with any litigation or arbitration resulting from any such disputes increasing the Company's expenses and distracting the Board and/or the Investment Manager from their other managerial tasks; co-owners do not have enough liquid assets to make cash advances that may be required in order to fund operations, maintenance and other expenses related to the property, which could result in the loss of current or prospective tenants and may otherwise adversely affect the operation and maintenance of the property; a co-owner breaches agreements related to the property, which may cause a default under such agreements and result in liability for the Company; the Company may, in certain circumstances, be liable for the actions of co-owners; and a default by a co-owner constitutes a default under mortgage loan financing documents relating to the investment, which could result in a foreclosure and the loss of all or a substantial portion of the investment made by the Company. Accordingly, the Company may not be able to resolve all the issues that arise with respect to such joint venture arrangements, or it may have to provide financial or other inducements to its joint venture partners to obtain a resolution in its favour. In the absence of dispute resolution and expert determination mechanisms provided for in some joint venture arrangements, major conflict with joint venture partners or co-owners may lead to deadlock and result in the Company being unable to pursue its desired investment strategy or exit the joint venture other than on disadvantageous terms. Any of the foregoing may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. 31
  • There can be no assurance that any target returns will be achieved. The target Total Shareholder Return range set out in this Prospectus for the Company's investments is a target only (and, for the avoidance of doubt, is not a profit forecast). There can be no assurance that the Company's investments will meet these targets, or any other level of return, or that the Company will achieve or successfully implement its investment objective. The existence of a target Total Shareholder Return range should not be interpreted as an assurance or guarantee that such levels of return can or will be met by any of the Company's investments. Although the target Total Shareholder Return range is presented as a specific range, the actual returns achieved by the Company's investments may vary from the target Total Shareholder Return range and these variations may be material. The target Total Shareholder Return range is based on the Investment Manager's assessment of appropriate expectations for returns on the nature of the investments that the Company proposes to make and the ability of the Investment Manager to enhance the return generated by those investments through active management and based on assumptions including assumptions relating to forecasts of increases in property capital and rental values. The Investment Manager believes such assessment to have been made on a reasonable basis, and on a number of assumptions, including assumptions relating to third-party forecasts of increases in property capital and rental values. There can be no assurance that these assessments and expectations will be proved correct and failure to achieve any or all of them may materially adversely impact any or all investments from achieving the target Total Shareholder Return range. As a result, an investment in the Company should only be considered by persons who can afford a loss of their entire investment. Past activities of investment entities associated with the Management Team provide no assurance of future success. Potential investors should decide for themselves whether or not the target Total Shareholder Return range is reasonable or achievable and consider the factors that could affect the returns achievable by the Company and the value of the Ordinary Shares in deciding whether to invest in the Company. Any refurbishment or redevelopment projects may suffer delays, may not be completed or may fail to achieve expected results. The Company may on occasion undertake refurbishment or redevelopment projects or invest in property that requires refurbishment prior to re-Ietting the property. The risks of refurbishment or redevelopment include, but are not limited to: delays in timely completion of the project; cost overruns which are not borne by a third party; poor quality design, management or workmanship; the performance of third party service providers as more particularly described in the risk factor headed "The Company may be dependent on the performance of third party service providers" of this Part II (Risk Factors); failure to obtain governmental and regulatory permits on a timely basis or at all; and diversion of resources and attention of the Board and the Management Team from operations and acquisition opportunities. There is no assurance that the Company will realise anticipated returns on an investment in property refurbishment or redevelopment. Failure to generate anticipated returns may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. There may be circumstances where the Investment Manager and members of the Management Team have a conflict of interest. The Investment Manager is wholly-owned and controlled by WKN and by Frank J. Kenny. There may be circumstances in which the Investment Manager and members of the Management Team have, directly or indirectly, a material interest in a transaction being considered by the Company or a conflict of interest with the Company. 32
  • The Investment Manager has agreed that, during the term of the REIT Investment Management Agreement, it will not, and will procure that none of its group companies or affiliates or Investment Manager employees or owners will (i) be involved in any capacity in the launch or operation of another REIT or other property investment vehicle or fund involved in a similar area of business as the Company, or in any other area of business, in each case without approval of the Board, (ii) acquire or act for another party to acquire a property investment that is within the parameters of the investment policy of the Company, include all non-income producing property assets of any value and all income producing property assets with a market value or purchase price of at least €10 million, other than where the Company has had the opportunity to invest in a particular property, and has declined to do so and has consented to the party or employee pursuing the opportunity or (iii) advise any investor in competition with the Company for the acquisition of an investment property. All possible or actual conflicts of interest will be disclosed in writing by the Investment Manager to the Board. These provisions shall not apply to any dealings or interest in property held as of the date of the REIT Investment Management Agreement. Additionally, William Nowlan and Frank J. Kenny have each provided an undertaking to the Company, in each case, that they will not: (i) be involved in any capacity in the launch or operation of another REIT or other property investment vehicle/fund involved in a similar area of business as the Company, or in the launch or operation of a REIT or other property investment vehicle/fund in a different area of business, without approval of the Board (such approval not to be unreasonably withheld), (ii) acquire or act for another party to acquire a property investment that is within the parameters of the investment policy of the Company, other than where the Company has had the opportunity to invest in a particular property, and has declined to do so and has consented to William Nowlan/Frank J. Kenny as the case may be pursuing the opportunity, or (iii) advise any investor in competition with the Company for the acquisition of an investment property. All possible or actual conflicts of interest will be disclosed in writing by William Nowlan or Frank J. Kenny, as the case may be, to the Board. These provisions shall not apply to any dealings or interest in property held as of the date of the REIT Investment Management Agreement. Members of the Management Team and the support staff available to the Investment Manager may also have conflicts of interest in allocating their time and activity between the Investment Manager and other entities with which they are currently involved. Pursuant to the REIT Investment Management Agreement, the Investment Manager is required to ensure that each member of the Management Team devotes sufficient time to the supervision and performance of the Investment Manager to enable it to comply with its obligations under the REIT Investment Management Agreement. Should the Investment Manager or any member of the Management Team act in a way that is contrary to the interests of the Company or fail to act in a way that is beneficial to the interests of the Company, this may have a material adverse effect on the ability of the Company to successfully pursue its investment strategy and may adversely affect the Company's financial condition, business, prospects and results of operations. The Company may be dependent on the performance of third party service providers. In circumstances where the Company seeks to create value by undertaking refurbishment or redevelopment of its property assets, it will typically be dependent on the performance of third parties who undertake the design, management and execution of such refurbishment or redevelopment works on behalf of the Company. In such circumstances, the Company would be exposed to various risks, including: failure by such third parties in performing their contractual obligations; the inability of the third parties to retain key members of staff; cost overruns in relation to the services provided by the third parties; delays in properties being available for occupancy; fraud or misconduct by an officer, employee or agent of a third parties, which may result in losses to the Company and damage to the Company's reputation; disputes between the Company and third parties, which may increase the Company's expenses and distract the Board and the Management Team; 33
  • insolvency of such third parties; and liability of the Company for the actions of the third parties. If the Company's third party service providers fail to successfully perform the services for which they have been engaged, either as a result of their own fault or negligence, or due to the Company's failure to properly supervise any such service providers, this could have a material adverse effect on the Company's financial condition, business, prospects and results of operations. Any costs associated with potential investments that do not proceed to completion will affect the Company's performance. The Company will need to identify suitable investment opportunities, investigate and pursue such opportunities and negotiate property acquisitions on suitable terms, all of which require significant expenditure prior to consummation of the acquisitions. The Company expects to incur certain third party costs, including in connection with financing, valuations and professional services (such as legal and technical due diligence) associated with the sourcing and analysis of suitable assets. There can be no assurance as to the level of such costs and, given that there can be no guarantee that the Company will be successful in its negotiations to acquire any given property, the greater the number of potential investments that do not reach completion, the greater the likely adverse impact of such costs on the Company's financial condition, business, prospects and results of operations. The Company's due diligence may not identify all risks and liabilities in respect of an acquisition. Prior to entering into an agreement to acquire any property, the Investment Manager, on behalf of the Company will perform due diligence on the proposed investment. In doing so, it would typically rely in part on third parties to conduct a significant portion of this due diligence (including providing legal and technical reports on title and property valuations). There can be no assurance, however, that due diligence examinations carried out by the Company or third parties in connection with any properties the Company may acquire will reveal all of the risks associated with that property, or the full extent of such risks. Properties the Company acquires may be subject to hidden material defects that were not apparent at the time of acquisition. To the extent that the Investment Manager or other third parties underestimate or fail to identify risks and liabilities associated with an investment, the Company may be subject to one or more ofthe following risks: defects in title; environmental, structural or operational defects or liabilities requiring remediation and/or not covered by indemnities or insurance; an inability to obtain permits enabling it to use the property as intended; or acquiring properties that are not consistent with the Company's investment policy or that fail to perform in accordance with expectations. Any of these consequences of a due diligence failure may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. The Company's investment strategy includes the use of gearing, which exposes the Company to risks associated with borrowings. The property investment business is highly capital intensive. The Company's strategy is to fund the acquiSitiOn of investments, in part, through borrowings within the limitations of the Irish REIT Regime, whereby, in order to maintain its REIT status, an Irish REIT is not permitted to incur debt which exceeds an amount equal to 50% of the aggregate market value of its assets. In practice, the Board intends that the Company's aggregate borrowings will not exceed 40% of the aggregate market value of its assets at the time of any borrowing. Since the middle of 2007, domestic and international financial markets have experienced significant disruptions that have been driven by failures in the banking system. These disruptions have severely impacted the availability of, and the terms applicable to, credit and have contributed to rising costs associated with obtaining credit. There can be no guarantee that 34
  • the Company will be able to obtain the credit it may need on acceptable terms which could adversely affect its ability to implement its investment policy. If the Company is unable to obtain credit, it may seek additional capital through the issuance of debt or equity securities to fund further acquisitions. To the extent the Company incurs a substantial level of indebtedness, this could reduce the Company's financial and operating flexibility and the amount of cash available to pay dividends to Shareholders due to the need to service its debt obligations and to amortise its loans. Prior to agreeing the terms of any debt financing, the Company expects to comprehensively consider its potential debt servicing costs and all relevant financial and operating covenants and other restrictions, including restrictions that might limit the Company's ability to make distributions to Shareholders in the light of cash flow projections. However, if certain extraordinary or unforeseen events occur, including breach of financial covenants, the Company's borrowings and any hedging arrangements that they may have entered into may be repayable prior to the date on which they are scheduled for repayment or could otherwise become subject to early termination. If the Company is required to repay borrowings early either in full or in part, it may be forced to sell assets when it would not otherwise choose to do so in order to make the payments and it may be subject to pre-payment penalties. In addition, in the event that the rental income ofthe Company's portfolio decreases (for example, due to tenant defaults), the use of borrowings will increase the impact of such a decrease on the net income of the Company and accordingly, will have an adverse effect on the Company's ability to pay dividends to Shareholders. Lenders are increasingly requiring borrowers to amortise loans and the Company could also find it difficult or costly to refinance indebtedness as it matures, and if interest rates are higher when the indebtedness is refinanced, the Company's costs could increase. Any of the foregoing events may have a material adverse effect on the Company's financial condition, business, prospects, results of operations and ability to make distributions to Shareholders. If the Company incurs floating rate debt it will be exposed to risks associated with movements in interest rates. The Company may incur debt with floating interest rates. Interest rates are highly sensitive to many factors, including international and domestic economic and political conditions, and other factors beyond the Company's control. The level of interest rates can fluctuate due to, among other things, inflationary pressures, disruption to financial markets, the availability of bank credit and increases in bank margins. If interest rates rise, the Company will be required to use a greater proportion of its revenues to pay interest expenses on its floating rate debt. Whilst the Company intends to hedge its interest rate exposure on any such borrowings and may appoint a specialist hedging adviser in due course to assist the Company in managing this risk, such measures may not be sufficient to protect the Company from risks associated with movements in prevailing interest rates. In addition, hedging arrangements expose the Company to credit risk in respect of the hedging counterparty. Increased exposure to adverse interest rate movements through floating rate debt may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. The Net Asset Value is expected to fluctuate over time by reference to the performance of the Company's investments and changing valuations. The Net Asset Value is expected to fluctuate over time with the performance of the Company's investments. Moreover, valuations ofthe Company's investments may not reflect the price at which such investments can be realised. To the extent that the net asset value information of an investment or that of a material part of an investment's own underlying investments is not available in a timely manner, the Net Asset Value will be published based on estimated values of the investment and on the basis of the information available to the Investment Manager at the time. There can be no guarantee that the Company's investments could ultimately be realised at any such estimated valuation. Because of overall size, concentration in particular markets and the nature of the investments held by the Company, the value at which its investments can be disposed of may differ, sometimes significantly, from the valuations obtained by the Investment Manager. In addition, the timing of disposals may also affect the values ultimately obtained. At times, third party pricing information may not be available for certain properties held by the Company. In calculating the Net Asset Value, the Investment Manager will be relying, inter alia, on estimated valuations that may include information derived from third party sources. Such valuation estimates will be unaudited and may not be subject to 35
  • independent verification or other due diligence. The type of investments traded by the Company may be complex, illiquid and not listed on any stock exchange. Accordingly, as a result of each of these factors, Shareholders should note that actual Net Asset Value may fluctuate from time to time, potentially materially. The Investment Manager has limited assets to cover any claims which the Company may have against it in the future. As the primary assets of the Investment Manager will be any fees it receives under the REIT Investment Management Agreement, should the Company have any claims against the Investment Manager, the extent of its ability to recover damages will be limited. Although the Investment Manager will have insurance to cover such claims, claims may not be compensated under such insurance in full or at all. The Company may be subject to potential claims relating to leasing, developing or disposing of investments. The Company may be subject to claims due to defects relating to the development and leasing of its properties. This liability may apply to defects in properties that were unknown to the Company but could have, or should have, been discovered. In addition, the Company may be exposed to substantial undisclosed or unascertained liabilities relating to properties that were incurred or that arose prior to the completion of the Company's acquisition of such properties. Although the Company may have obtained contractual protection against such claims and liabilities from the seller, there can be no assurance that such contractual protection will always be successfully obtained, or that it would be enforceable or effective if obtained under contract. Any claims for recourse that the Company may have against parties from which the Company has purchased such a property may fail because of the expiration of warranty periods and the statute of limitations, lack of proof that the previous seller knew or should have known of the defect, the insolvency of the previous seller, or for other reasons. Claims may also be brought against the Company with respect to any development properties by, among others, tenants or buyers of such properties as a result of delays, construction defects or other factors. As the Company does not intend to perform development and construction activities itself, but rather uses the services of design and construction companies as general contractor and professional team consultants, any claim for recourse by the Company against a constructor or contractor could fail because of the expiration of contractual restrictions on claims, the statute of limitations, the claim being uncollectible, or for other reasons. The Company may also be exposed to future liabilities and/or obligations with respect to the properties that it sells. The Company may be required or may consider it prudent to set aside provisions for warranty claims or contingent liabilities in respect of property disposals. The Company may be required to pay damages (including but not limited to litigation costs) to a purchaser to the extent that any representations or warranties given to a purchaser prove to be inaccurate or to the extent that the Company breaches any of its covenants or obligations contained in the disposal documentation. In certain circumstances, it is possible that representations and warranties incorrectly given could give rise to a right by the purchaser to rescind the contract in addition to the payment of damages. Further, the Company may become involved in disputes or litigation in connection with such disposed investments. Certain obligations and liabilities associated with the ownership of investments can also continue to exist notwithstanding any disposal, such as certain environmental liabilities. Any claims, litigation or continuing obligations in connection with the disposal of any properties may subject the Company to unanticipated costs and may require the Management Team to devote considerable time to dealing with them. As a result, any such claims, litigation or obligations may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. Environmental and health and safety laws, regulations and standards may expose the Company to the risk of substantial costs and liabilities. Laws and regulations, which may be amended over time, may impose environmental liabilities associated with investment properties on the Company (including environmental liabilities that were incurred or that arose prior to the Company's acquisition of such properties). Such liabilities may result in significant investigation, removal, or remediation costs regardless of whether the Company originally caused the contamination or other environmental hazard. In addition, environmental liabilities could adversely affect the Company's ability to sell, lease or redevelop a property, or to borrow using a property as security and may in certain circumstances (such as the release of certain materials, including asbestos, into the air or water) form the basis for liability to third persons for personal injury or other damages. Environmental laws 36
  • and regulations may limit the development of, and impose liability for environmental matters on the Company including, the disturbance of wetlands or the habitats of threatened or endangered species. The Company's investments may include properties historically used for commercial, industrial and/or manufacturing uses. Such properties are more likely to contain, or may have contained, storage tanks for the storage of hazardous or toxic substances or been subject to processes involving the use or storage of hazardous or toxic substances. Letting properties, such as those containing warehouses, to tenants that engage in industrial, manufacturing and other commercial activities may cause the Company to be subject to increased risk of liabilities under environmental laws and regulations to the extent that such liabilities arise due to tenant default and the Company is unable to recover from the relevant tenant(s). In the event the Company is exposed to environmental liabilities or increased costs or limitations on its use or disposal of properties as a result of environmental Jaws and regulation this may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. The Company may suffer losses in excess of insurance proceeds, if any, or from uninsurable events. The Company's properties may suffer physical damage resulting in losses (including Joss of rent) which may not be covered or compensated for by insurance, either fully or at all. In addition, there are certain types of losses, generally of a catastrophic nature, that may be uninsurable or are not economically insurable. Inflation, changes in building standards and regulations, environmental considerations, and other factors, might also result in insurance proceeds being unavailable or insufficient to repair or replace a property or pay for environmental remediation costs. Should an uninsured loss or a Joss in excess of insured limits occur, the Company may suffer losses in relation to capital invested in the affected property as well as anticipated future revenue from that property. In addition, the Company could be liable to repair damage caused by uninsured risks or pay for uninsured environmental remediation costs. The Company may also remain liable for any debt or other financial obligations related to that property. Any material uninsured losses may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. Reputational risk in relation to the Investment Manager or Board may materially adversely affect the Company. The Investment Manager or Board may be exposed to reputational risks. In particular, litigation, allegations of misconduct or operational failures by, or other negative publicity and press speculation involving any of the Management Team or Board, whether or not accurate, may harm the reputation of the relevant member of the Management Team or Board. Any damage to the reputation of any of the Management Team or Board could result in potential counterparties and other third parties such as occupiers, landlords, joint venture partners, lenders or developers being Jess willing or unwilling to deal with the Company. This may have a material adverse effect on the ability of the Company to successfully implement its investment policy and may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. RISKS RELATING TO REGULATION AND TAXATION Changes to the AIFMD regime or its interpretation, or the Investment Manager becoming unable to act as the Company's AIFM, may have a material adverse effect on the Company. The Investment Manager has obtained authorisation from the Central Bank as an AIFM under the AIFMD Regulations. As the AIFM for the Company, the Investment Manager is required to comply with on-going capital, reporting and transparency obligations and a range of organisational requirements and conduct of business rules, and to adopt a range of policies and procedures addressing areas such as risk management, liquidity management, conflicts of interest, valuations, compliance, internal audit and remuneration. The Investment Manager is a newly incorporated entity with no experience of operating as a regulated entity. If the Investment Manager were to fail to comply with the legal and other regulatory requirements applicable to an authorised AIFM or otherwise cease to hold authorisation as an AIFM, the Investment Manager would not be permitted to continue to manage the Company or market interests in the Company and a successor investment manager duly authorised as an AIFM would need to be appointed to perform these functions. The Company is reliant upon the investment expertise of the Investment Manager and there is no guarantee that a suitably qualified successor investment manager could be found or could be engaged on terms comparable to those applicable to the Investment Manager. Any transition to a successor investment manager could result in significant costs being incurred by the Company and material disruptions to its investment activities and operations and to the marketing of interests in the Company. 37
  • The AIFMD has only recently come into force. Changes to the AIFMD regime or new recommendations and guidance as to its implementation may impose new operating requirements and result in a change in the operating procedures of the Investment Manager and its relationship with the Company and service providers and may impose restrictions on the investment activities that the Investment Manager (and in turn the Company) may engage in, and may increase the on-going costs borne, directly or indirectly, by the Company by virtue of the contractual arrangements agreed between the Company and the Investment Manager and between the Company and the Depositary. These factors may have a material adverse effect on the Company's financial condition, business, prospects and results of operations. There is a risk of a change in law which would require the Company to be authorised as a retail investor, or qualifying investor, AIF by the Central Bank. At present, the Company is not itself subject to regulation by the Central Bank as it is not a variable capital company that requires authorisation pursuant to Part XIII of the 1990 Act (as amended). In addition, it is not a unit trust or other form of regulated fund. However, a subsequent change in law may render a REIT, such as the Company, a form of collective investment scheme that is subject to authorisation and regulation by the Central Bank (or other regulator). In that regard, in July 2013, the Central Bank issued a consultation paper entitled "Consultation on types of Alternative Investment Funds under AIFMD and unit trust schemes under the Unit Trust Act 1990 (including EUTs, REITs etc.). While this paper dealt almost entirely with exempt unit trusts ("EUTs") the inclusion of a reference to REITs suggests the possibility that a REIT, such as the Company, may be subject to direct regulation in the future, cannot be discounted entirely. Were the Company to become subject to the current regulatory requirements for a collective investment scheme that invests in real estate, the Company would be subject to additional restrictions regarding the investments it could make. Such restrictions would, depending on whether the Company was authorised as a retail investor, or qualifying investor, AIF, include additional restrictions including in relation to the nature of investments (including as to type, level of diversification and acquisition price), level of borrowings it could incur, the type of service providers it can utilise and additional disclosures required to be made to investors. In those circumstances, the Company would become subject to the Central Bank's AIF Rulebook and the requirements therein applicable to retail investor, or qualifying investor, AIFs as the case may be, depending on whether the Company was a retail investor, or a qualifying investor, AIF. In addition, in the event that the Company was authorised as a retail investor AIF, the requirements of the Central Bank's AIF Rulebook applicable to retail investor AIFs are prescriptive in a number of respects, including in terms of the eligible investments and diversification limits applicable to a retail investor AIF's investments, such as not being able to invest more than 30% of its net assets in a single property interest or not being able to invest more than 25% of its net assets in property interests which are vacant in the process of development or requiring development. There would also be additional requirements relating to the price at which property interests may be acquired. Accordingly, there could be significant additional restrictions and costs imposed upon the Company which would have a negative impact on the performance of the Company. Should such requirements apply to the Company, this could materially restrict the Company in terms of its investment activities, operations and performance and may significantly impair the Company's ability to implement its investment objective. The Company would be required to comply with various reporting requirements (including the preparation of semi-annual and annual reports) and other conditions (including as to its liquidity profile and the use of leverage) all of which would increase the on-going costs borne, directly or indirectly, by the Company. In addition, there is a risk that although the Company may be required to be authorised by the Central Bank as a retail investor, or qualifying investor, AIF, the Central Bank may refuse to so authorise the Company, in which case the Company could not continue its business and would have to be liquidated. Any such liquidation could result in the Company selling its assets prematurely or on unfavourable terms which could adversely affect the Net Asset Value of the Company and (having regard to the illiquid nature of property assets) could result in a loss in some or all of an investor's investment in the Company. 38
  • The Company may fail or cease to qualify as a REIT under the Irish REIT Regime, which would have adverse consequences for the Company and to the basis on which it delivers returns to Shareholders. The Company will elect for Irish REIT status under the TCA upon Admission. The requirements for maintaining Irish REIT status, however, are complex and the Irish REIT Regime is new with no history of interpretation (see Part XII (Irish REIT Regime and Taxation Information) for a discussion of these requirements, in respect of certain of which an initial 3year grace period is granted). Furthermore, there may be changes subsequently introduced (including a change in interpretation) to the requirements for maintaining Irish REIT status. Prospective investors should note that there is no guarantee that the Company will, following its election to become an Irish REIT, become an Irish REIT or continue to maintain Irish REIT status (whether by reason of failure to satisfy the conditions for Irish REIT status or otherwise). If the Company fails to distribute at least 85% ofthe Property Income of its Property Rental Business it will be chargeable to tax (currently 25%) on the shortfall of the distribution, unless it is restricted from making such a distribution by any provision of the Companies Acts. If the Company fails to meet any of the statutory requirements to maintain its status as an Irish REIT it must notify the Irish Revenue of the failure and detail how the failure arose and the steps that have been taken to prevent a recurrence of the condition not being met. If the failure is not rectified within a reasonable period, as determined by the Irish Revenue, the Irish Revenue may deem the Company to have ceased to be an Irish REIT at the end of the accounting period immediately prior to the accounting period in which it failed to meet the condition. If the Company's status as an Irish REIT were withdrawn it would then be subject to tax on the profits of its Property Rental Business and chargeable gains on disposal of property forming part of its Property Rental Business. Should the Company fail to obtain or maintain its status as an Irish REIT, the Company may no longer be eligible for listing on the Official List of the Irish Stock Exchange under chapter 16 of the Irish Listing Rules. Although it would be able to seek to transfer its listing to an alternative category, there can be no assurance it would be able to do so successfully. The inability to maintain its listing on the Irish Stock Exchange could adversely impact the marketability and liquidity of the Ordinary Shares and their value. Furthermore, certain non-resident investors may be subject to Irish capital gains tax on the disposal of Ordinary Shares if the Company were to fail to maintain this listing. All of the above matters may have a material adverse effect on the Company's financial condition, business, prospects or results of operations. The Company may be adversely affected by change of law, regulation and/or practice guidance in relation to AIFMD. Changes to laws, regulations and practice guidance to include any ESMA guidance or recommendations, could adversely affect the Company or the Investment Manager. Regulation of, and practice guidance relating to, entities such as the Company, and their investment managers and depositaries, is evolving and subject to change. In addition, many governmental agencies, self-regulatory organisations and exchanges are authorised to take extraordinary actions in the event of market emergencies. Changes to the legal and regulatory regime applicable to the Investment Manager could adversely affect the Company because of the Company's reliance upon the continuing availability to it of the expertise of Investment Manager and the likelihood that such changes would increase the on-going costs borne, directly or indirectly, by the Company by virtue of the contractual arrangements agreed between the Company and the Investment Manager. The effect of any future legal or regulatory change (including changes in practice guidance) on the Company or on the Investment Manager is not possible to predict, but could be substantial and adverse. Future changes in tax legislation (including the Irish REIT Regime) may adversely affect the Company. For so long as the Company qualifies as an Irish REIT, it will not pay Irish corporate taxes on the income or gains of its Property Rental Business provided certain conditions and tests are satisfied (see paragraph 1.2 of Part XII (Irish REIT Regime and Taxation Information)). Therefore any change (including a change in interpretation) in the legislative provisions relating to Irish REITs or in tax legislation more generally, either in Ireland or in any other country in which the Company may operate, including but not limited to the imposition of new taxes or increases in tax rates in Ireland or elsewhere, or any change in the tax treatment of assets held by the Company may have a material adverse effect on the Company's financial condition, business, prospects or results of operations. In particular, an increase in the rates of stamp duty in Ireland could have a material adverse impact on the price at which Irish property can be acquired, and therefore on property values. 39
  • The Irish REIT regime will restrict dividend payments to Substantial Shareholders. The Company will under the Irish REIT Regime become subject to an additional tax charge if it pays a dividend to, or in respect of, a Substantial Shareholder unless it has taken "reasonable steps" to avoid paying dividends to such a shareholder. The Articles contain provisions designed to avoid the situation where dividends may become payable to Substantial Shareholders. Among other matters, these provisions, which are summarised at paragraph 6.2 of Part XV (Additional Information), prohibit the payment of a Property Income Distribution on or in respect of shares that form part of a Substantial Shareholding, unless certain conditions are met. Furthermore, the Articles allow the Directors to require the disposal of shares by a Shareholder in the Company by giving notice in writing to the persons they believe are Relevant Registered Shareholders in respect of the relevant shares if the Directors believe such shares comprise all or part of a Substantial Shareholding of a Substantial Shareholder and are not satisfied that such a Substantial Shareholder would not be beneficially entitled to the Property Income Distribution if it were paid. Distribution requirements and leverage restrictions under the Irish REIT Regime may limit the Company's ability and flexibility to pursue growth through acquisitions. The Directors contemplate growth for the Company through investments in property in Ireland. However, the Irish REIT Regime distribution requirements limit the Company's ability to fund acquisitions and capital expenditures out of retained income and debt financing. To obtain full exemption from Irish corporate tax, the Company is required, among other things, to distribute annually to Shareholders (by way of dividend) at least 85% of its Property Income. The Company would be required to pay the non-trading corporate tax rate (currently 25%) on any shortfall to the extent that it distributes less than the amount required to meet the 85% distribution test under the Irish REIT Regime each year. As a result, the Company will only be able to apply a limited amount of its income to acquiring additional properties and its ability to grow through acquisitions will be limited if it is unable to obtain further debt or equity financing. Furthermore, the Irish REIT Regime also restricts the Company's debt financing. In order to maintain its status as an Irish REIT the Company will not be permitted to incur debt which exceeds an amount equal to 50% of the aggregate market value of its assets. It must also maintain a ratio of Property Income plus Financing Costs to Financing Costs of not less than 1.25:1. A general guide to the Irish REIT Regime is included in Part XII (Irish REIT Regime and Taxation Information). In addition, differences in timing between the receipt of cash and the recognition of income for the purposes of the rules governing Irish REITs and the effect of any potential debt amortisation payments could require the Company to borrow funds to meet the distribution requirements that are necessary to achieve the full tax benefits associated with qualifying as an Irish REIT, even if the then prevailing market conditions are not favourable for these borrowings. As a result of these requirements, the obligations associated with maintaining its status as an Irish REIT may limit the Company's ability and flexibility to make investments and pursue growth through acquisitions. Certain disposals ofproperties may potentially have negative taxation consequences under the Irish REIT Regime. Although the Company is not a trading company, if it disposes of a property in a manner indicative of a company that is dealing in property rather than investing, the property may be treated as being disposed of as part of the Residual Business under the Irish REIT Regime, and any profits from that disposal of such property would be subject to corporation tax. For example, if the Company were to acquire a property with a view to generating profit through a short-term disposal of the property rather than with the intention of earning profit through generating rental receipts from the property, profits on disposal of the property could be subject to tax. Furthermore, where development of a property has occurred following acquisition and the cost of development exceeds 30% of the market value of the property at the date of the commencement of the development, the profits arising from the disposal of the property will be taxable if the disposal takes place within three years of completion of the development. Whilst the Company does not intend to deal in property and intends to refrain from disposing of any such asset within the period of three years from completion of development of that asset where development costs exceed 30% of the market value of that asset at the date of commencement of the development, there can be no assurance that circumstances will not arise that require the Company to do so or that the Irish Revenue will not deem a disposal by the Company to have been dealing in property, with the consequence that corporation tax may be payable in respect of any profits from the disposal. Furthermore, if the Company disposes of a property that is part of its Property Rental Business or raises cash from the issue of ordinary share capital, and the Company holds those proceeds, any profits arising from the investment of such proceeds, 40
  • (other than in property for the Property Rental Business) will be treated as Property Profits during the period of24 months from the date of disposal, or the date ofthe issue of the ordinary share capital (as appropriate) and as not being Property Profits thereafter. However, where such funds are held at any time after that date, they will be treated as being assets of the Residual Business and therefore any income or gains they generate may be subject to tax and there can be no assurance that the proceeds of a fundraising or disposal of a property will not be held beyond this 24 month period. More information on the Irish REIT Regime is included in Part XII (Irish REIT Regime and Taxation Information). Future ownership of the Company may adversely impact on its status as an Irish REIT. If the Company is taken over by another entity, the Company may fail to meet the requirements for being an Irish REIT and would in those circumstances be treated as leaving the Irish REIT Regime at that time. As a result, it would cease to benefit from the exemption from tax on the profits of its Property Rental Business and chargeable gains on disposal of property forming part of its Property Rental Business at that time. A general guide to the Irish REIT Regime is included in Part XII (Irish REIT Regime and Taxation Information). The Company and/or any of its properties may be adversely impacted by changes in applicable government, statutory and regulatory policies. Governmental and regulatory authorities promulgate and enforce laws and restrictiOns relating to taxation including taxation of property (particularly capital taxes and stamp duties), land use, zoning and planning restrictions, environmental protection and safety and other matters. The introduction and enforcement of such laws and regulations could have the effect of increasing the expenses and/or lowering the income or rate of return of the Company, as well as adversely affecting the value of any of the Company's assets. RISKS RELATING TO THE SHARES There has been no public trading in the Ordinary Shares prior to Admission and a liquid trading market may not develop or be sustained following Admission. Prior to Admission, there has been no public trading market for the Ordinary Shares. Admission should not be taken as implying that there will be a liquid market for the Ordinary Shares or that it will develop. Therefore, there can be no assurance that an active trading market in the Ordinary Shares will develop or, if it does develop, that it will be maintained indefinitely following Admission. If a liquid trading market is not developed or maintained, the liquidity and trading price of the Ordinary Shares could be adversely affected. The market price of the Ordinary Shares may not reflect the value of the underlying investments of the Company and the Company's share price may fluctuate, as with all publicly traded companies. The market price of the Ordinary Shares may not reflect the value of the underlying investments of the Company and may be subject to wide fluctuations in response to many factors, including, among other things, variations in the Company's operating results, additional issuances or future sales of the Company's Ordinary Shares or other securities exchangeable for, or convertible into, its shares in the future, the addition or departure of Board members, replacement of the Investment Manager, change in the Management Team, change to the Investment Manager, expected dividend yield, divergence in financial results from stock market expectations, changes in stock market analysts' recommendations regarding the Irish commercial property market as a whole, the Company or any of its assets, a perception that other markets may have higher growth prospects, general economic conditions, prevailing interest rates, legislative changes in the Company's market and other events and factors within or outside the Company's control. Stock markets experience extreme price and volume volatility from time to time, and this, in addition to general economic, political and other conditions, may materially adversely affect the market price for the Ordinary Shares. The market value of the Ordinary Shares may vary considerably from the Company's underlying Net Asset Value. There can be no assurance, express or implied, that Shareholders will receive back the amount of their investment in the Ordinary Shares. In addition, the share prices of publicly traded companies can be highly volatile. The price at which the Ordinary Shares may be quoted and the price which investors may realise for their Ordinary Shares will be influenced by a large number of factors many of which are outside the control ofthe Company, some specific to the Company and its operations and some which affect the investment property as a whole, or equity markets generally. 41
  • The Company's ability to pay dividends will depend upon its ability to generate profits available for distribution and access to sufficient cash. All dividends and other distributions paid by the Company will be made at the discretion of the Board subject to the requirements of the Irish REIT Regime (assuming the Company achieves Irish REIT status) and will be dependent on the availability, in accordance with legal and accounting rules, of profits available for distribution and the availability of sufficient cash. The generation of profits available for distribution depends on a number of factors including the successful management of the Company's investments, the yields on the Company's properties, interest costs and the level of loan repayments, taxes and profits on the development and sale of properties. The payment of any such dividends or other distributions will depend on the Company's ability to generate profits available for distribution and cash flow. Start-up costs associated with the Issue may affect the Company's ability to pay dividends to Shareholders. Should this situation arise it could be mitigated if the Company were to increase its profits available for distribution, for example by means of a court-approved reduction of the Company's capital. Pursuant to the Irish REIT Regime the Company will be required, subject to having sufficient distributable reserves, to distribute to Shareholders at least 85% of the Property Income of its Property Rental Business for each accounting period. Failure to meet this requirement will result in the Company incurring a tax charge calculated by reference to the extent of the shortfall in the dividend paid and could result in the Company ceasing to maintain its status as an Irish REIT. See paragraph 1.2 of Part XII (Irish REIT Regime and Taxation Information) for further details on the dividend requirements of the Irish REIT Regime. There is a risk that the Company may generate Property Income, but not have sufficient cash to make the level of distributions required under the Irish REIT Regime. If the Company does not have sufficient cash, it may be required to borrow to fund the distribution, which would increase its finance costs, could reduce its ability to borrow to finance property acquisitions and could have a material adverse effect on the Company's financial condition, business, prospects and results of operations. The Company may in the future issue new Ordinary Shares, which may impact the market price and dilute Shareholders' shareholdings. The Company may in the future seek to obtain funding by way of further equity financing or by further equity offerings or consideration in the form of equity to finance the growth of its portfolio, this would dilute the Company's existing Shareholders' shareholdings and may have a negative impact on the trading price of the Ordinary Shares and increase the volatility in the trading price of the Ordinary Shares. The Companies Acts provide for pre-emptive rights in respect of equity offerings for cash to be granted to its existing Shareholders unless such rights are disapplied by shareholder resolution. As at the date of this Prospectus pre-emption rights have been disapplied for (i) the issue of Ordinary Shares up to an aggregate nominal value of €50,000,000 in order to facilitate the issuance of Ordinary Shares in respect of the Issue pursuant to the Placing and Sponsor Agreement, the Cornerstone Subscription Agreements, and the Board and Founder Group Subscription Agreement; and (ii) an annual issue of Ordinary Shares in respect of 5% of the nominal value of the issued share capital of the Company. In addition, in return for the services it is to provide to the Company under the REIT Investment Management Agreement, the Investment Manager is entitled, subject to satisfying certain performance criteria, to receive Ordinary Shares from the Company and pre-emption rights have been disapplied for the issue of those Ordinary Shares. The interests of any significant investor may conflict with those of other Shareholders and future sales of Ordinary Shares by any significant investor in the public market may cause the share price to falL Immediately following Admission a number of Shareholders will have significant holdings of Ordinary Shares, as described in paragraph 4 of Part XV (Additional Information). It is possible that, in the future, other investors may have significant holdings of Ordinary Shares. Accordingly, any significant investors will potentially possess sufficient voting power to have a significant influence on matters requiring Shareholder approval. The interests of a significant investor may accordingly conflict with those of other holders of Ordinary Shares. In addition, any significant investor may make investments in other businesses in the Irish property market that may be, or may become, competitors of the Company. Sales of Ordinary Shares or interests in Ordinary Shares by any significant investor could cause the market price of the Ordinary Shares to decline. 42
  • The Ordinary Shares are subject to transfer restrictions and forced transfer provisions in respect of Non-Qualified Holders. The Ordinary Shares are subject to transfer restrictions and forced transfer provisions that are intended to prevent, among other things, (i) the Company becoming an "investment company" under the US Investment Company Act; (ii) the Company being required to register under the US Exchange Act or any similar legislation; (iii) the assets of the Company from being deemed to be "plan assets" under the Plan Asset Regulations; (iv) the Company becoming a "controlled foreign corporation" for the purposes of the Code; or (v) the Company otherwise incurring a liability to taxation or suffering any pecuniary, fiscal, administrative or regulatory or similar disadvantage. In particular, the Board of the Company may refuse to register a transfer of Ordinary Shares if the transfer is in favour of any person determined by the Board to be a NonQualified Holder (as defined in the Articles). In addition, if any Shareholder is determined by the Company to be a NonQualified Holder or a substantial shareholder such Shareholder may be required by the Company to transfer its Ordinary Shares to an eligible transferee within 14 days of receiving notice from the Board; and, if the obligation to transfer is not met, the Company may compulsorily transfer the Ordinary Shares, at a price to be agreed between the Company (exercising its sole discretion) and an eligible purchaser at the time of sale, subject to the restrictions set forth in the Articles. Sales of Ordinary Shares by members of the Board and/or the Management Team, or the possibility of such sales, may affect the market price of the Ordinary Shares. Sales of Ordinary Shares or interests in Ordinary Shares by members of the Board, the Investment Manager, or the Management Team (or any other entity controlled by any ofthem or in which any of them has an interest) could cause the market price of the Ordinary Shares to decline. Whilst the Board and Founder Group (through which the Board and Management Team have invested in the Company) may, following the expiry of a 12 month lock-in period (subject to certain limitations, as described in paragraph 11.5 of Part XV (Additional Information), sell their Ordinary Shares in the market, a substantial number of Ordinary Shares being sold, or the perception that sales of this type could occur, could cause the market price of the Ordinary Shares to decline. This may make it more difficult for Shareholders to sell their Ordinary Shares at a time and price that they deem appropriate. The assets of the Company could be deemed to be "plan assets" that are subject to certain requirements of ERISA and/or section 4975 of the Code, which could restrain the Company from making certain investments. Under the current Plan Asset Regulations, if interests held by Benefit Plan Investors are deemed to be "significant" within the meaning of the Plan Asset Regulations (broadly, if Benefit Plan Investors hold 25% or greater of any class of equity interest in the Company) then the assets of the Company may be deemed to be "plan assets" within the meaning of the Plan Asset Regulations. After the Issue, the Company will be unable to monitor whether Benefit Plan Investors acquire Ordinary Shares and therefore, there can be no assurance that Benefit Plan Investors will never acquire Ordinary Shares other than during the Issue or that, if they do, the ownership of all Benefit Plan Investors will be below the 25% threshold. If the Company's assets were deemed to constitute "plan assets" within the meaning of the Plan Asset Regulations, certain transactions that the Company might enter into in the ordinary course of business and operation might constitute non-exempt prohibited transactions under ERISA or the Code, resulting in the imposition of excise taxes and penalties. In addition, any fiduciary of a Benefit Plan Investor or a governmental, church, non-US or other plan which is subject to Similar Law that is responsible for such plans investment in the Ordinary Shares could be liable for any ERISA fiduciary violations or violations of such Similar Law relating to the Company. Potential withholding and forced transfers under FATCA. FA TCA and consequent changes in non-US tax law may have the effect, beginning no earlier than 1 January 2017, of imposing a 30% withholding tax on a portion of payments of non-US-source dividends, such as dividends on the Ordinary Shares. In addition, redemptions of and proceeds of sale of Ordinary Shares would also be subject to a 30% withholding tax beginning no earlier than I January 2017. Withholding would not apply to a holder that is a "foreign financial institution" (or "FFI") that enters into an agreement with the US Internal Revenue Service ("IRS") to provide certain information on its US account holders or is otherwise exempt or to other holders that provide the necessary tax certifications and information. An FFI generally will be exempt if it is established in a country (a "Partner Country"), such as Ireland, that has entered into an intergovernmental agreement (an "IGA") with the United States that exempts FFis in 43
  • that country from entering into such an agreement but such an IGA generally requires equivalent reporting of similar information indirectly to the IRS via reporting to the revenue service or authority ofthe Partner Country. If the Ordinary Shares are actively traded on an established securities market, the Company will be exempt from information reporting with respect to the Ordinary Shares. However, the Company expects that each intermediary financial institution, broker or agent (each, an "Intermediary") through which a beneficial owner holds its interest in an Ordinary Share will, in order to comply with FATCA (or be considered exempt from FATCA) (i) obtain certain identifying information regarding the holder of such Ordinary Share to determine whether the holder is a US person or US-owned foreign entity and to periodically provide identifying information about the holder directly or indirectly to the IRS and (ii) comply with any applicable withholding and other requirements. To the extent any payments in respect of the Ordinary Shares are made to a shareholder by an Intermediary, such shareholder may be required to comply with the Intermediary's requests for identifying information that would permit the Intermediary to comply with its own IRS Agreement or the requirements arising under an applicable IGA. Any Shareholder that fails to properly comply with requests for certifications and identifying information or, if applicable, a waiver of non-US law prohibiting the release of such information to a taxing authority, will be treated as a "Recalcitrant Holder". Unless exempted or deemed compliant, an FFI that does not enter into such agreement or whose agreement is voided by the IRS will be treated as a "non-Participating FFI". An Intermediary may be required to deduct a withholding tax of up to 30% on payments (including gross proceeds and redemptions) on the Ordinary Shares made on or after I January 2017 to a Recalcitrant Holder or a non-Participating FFI. Neither the Company nor any Intermediary will make any additional payments to compensate a holder or beneficial owner of any Ordinary Shares for any amounts required to be deducted and withheld (whether pursuant to FA TCA, Partner Country law relating to an IGA, an agreement with the IRS, or otherwise). It is also possible that an Intermediary may be required to cause the disposition or transfer of an Ordinary Share held by a Recalcitrant Holder or non-Participating FFI and the proceeds from any such disposition or transfer may be an amount less than the then current fair market value of the Ordinary Shares transferred. The Company expects to be treated as a passive foreign investment company. The Company expects to be classified as a passive foreign investment company (a "PFIC") for US federal income tax purposes, which could result in adverse US federal income tax consequences to US holders of the Ordinary Shares. Prospective investors should review paragraph 3 of Part XII (Irish REIT Regime) for further matters to consider regarding PFICs. Shareholders outside Ireland and the United Kingdom may not be able to participate in future equity offerings. Irish company law provides for pre-emptive rights in respect of equity offerings for cash to be granted to a company's existing Shareholders, unless such rights are disapplied by shareholder resolution. However, Shareholders in certain jurisdictions (including in the United States) may not be entitled to exercise these rights unless the rights and Ordinary Shares are registered under their applicable laws (for example, in the United States pursuant to a registration statement under the US Securities Act or where an exemption from the registration requirements of the US Securities Act is available). The Company cannot at this point predict whether it would seek such registrations and intends to evaluate, at the time of any rights offering, the costs and potential liabilities associated with such registrations or qualifying for an exemption, as well as the indirect benefits to the Company of enabling Shareholders in those jurisdictions to exercise rights and any other factors it considers appropriate at the time and then to make a decision as to whether to file such a registration statement. The Company cannot assure investors that any registration statement would be filed as to enable US or other Shareholders outside of Ireland and the United Kingdom exercise of such holders' pre-emptive rights or participation in a rights offer. Irish law governs the rights of holders of Ordinary Shares and these rights may differ from the rights of Shareholders in other jurisdictions. The Company is incorporated under the laws of Ireland. The rights of holders of Ordinary Shares are governed by Irish law, including the Companies Acts, and by the Articles of Association and certain laws of the EU. These rights differ in certain respects from the rights of shareholder corporations incorporated in other jurisdictions, including in the United States. As a result, it may be difficult for investors outside Ireland to serve process on or enforce foreign judgments against the Company. In particular, Irish law significantly limits the circumstances under which Shareholders in Irish companies 44
  • may bring derivative actions. In addition, Irish Jaw does not afford appraisal rights to dissenting Shareholders in the form typically available to Shareholders of a US corporation. Exchange rate fluctuations may expose an investor whose currency is not the euro to foreign exchange rate risk. The Ordinary Shares will be priced in euro on their primary trading market and any dividends to be paid in respect of them will be denominated in euro. Any investment in Ordinary Shares by an investor whose principal currency is not the euro exposes the investor to foreign currency exchange risk. Any depreciation of the euro in relation to such foreign currency will reduce the value to the investment in the Ordinary Shares or any dividends in foreign currency terms. 45
  • PART III: EXPECTED TIMET ABLE Each of the times and dates is subject to change without further notice. All references are to Dublin time. Expected commencement of conditional dealings on the Irish Stock Exchange and the London Stock Exchange 6 December 2013 Issue of New Ordinary Shares 11 December 2013 Admission and expected commencement of unconditional dealings on the Irish Stock Exchange and the London Stock Exchange 8.00 a.m. on 11 December 2013 CREST accounts credited with uncertificated shares 01 8.00 a.m. on 11 December 2013 Despatch of definitive share certificates (where applicable)(ll by 18 December 2013 (I) Or as soon as practical thereafter. No temporary documents of title will be issued. 46
  • PART IV: ISSUE STATISTICS Issue Price per Ordinary Share(ll. €1.00 Total number of Ordinary Shares being issued pursuant to the Issue subject to the Overallotment Option 364,600,000 Total number of Ordinary Shares being issued to the Board and Founder Group pursuant to the Board and Founder Group Subscription Agreement(2l 3,200,000 Total number of Ordinary Shares being issued to the Cornerstone Investors pursuant to the Cornerstone Subscription Agreements Total number of Ordinary Shares being issued to WKN Staff3l Total number of Ordinary Shares in issue immediately following Admissiont 4 ) Total number of Ordinary Shares the subject of the Over-allotment Option 124,532,100 462,000 365,000,000 20,000,000 Market capitalisation ofthe Company following the Issue(s) €365,000,000 Estimated net proceeds receivable by the Company(6) €352,360,000 (I) Save in respect of issue of Ordinary Shares to William Nowlan pursuant to the Board and Founder Group Subscription Agreement which shall be at the issue price of€4.60 per Ordinary Share (being an adjusted price to reflect his existing holding of Ordinary Shares), the subscription price to be paid by the Board and Fotmder Group pursuant to its subscription of Ordinary Shares under the Board and Founder Group Subscription Agreement is €1.00 per Ordinary Share. Accordingly, following the subscription by the Board and Founder Group pursuant to the Board and Founder Group Subscription. the Board and Founder Group shall hold 3,600.000 Ordinary Shares for an aggregate amount paid of €3,600,000, being an average issue price of€1.00 per Ordinary Share. (2) William Nowlan is the holder of 399,994 of the existing 400,000 Ordinary Shares in the Company and the beneficial owner of the remaining six Ordinary Shares of€0.10 each. (3) These Ordinary Shares are issued at the same Issue Price as under the Placing. (4) The number of Ordinary Shares described assumes the Over-allotment Option is not exercised. (5) Based on the issued share capital of the Company on Admission and the Issue Price of €1.00 per Ordinary Share and assuming the Overallotment Option is not exercised. (6) The estimated net proceeds receivable by the Company is stated assuming there is no exercise of the Over-allotment Option and after the deduction of commissions and expenses payable by the Company and incurred in connection with the Issue of approximately €12,600,000. 47
  • PART V: DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE, INVESTMENT MANAGER AND ADVISERS DIRECTORS Daniel Kitchen Independent non-executive Chairman Colm Barrington Independent non-executive Director and Senior Independent Director Terence O'Rourke Independent non-executive Director Stewart Harrington Independent non-executive Director William Nowlan Non-executive Director CONWANYSECRETARY Castlewood Corporate Services Limited Eglinton Terrace Dun drum Dublin 14 Ireland COMPANY REGISTERED OFFICE Marine House Clanwilliam Place Dublin 2 Ireland Tel: 353 (I) 9058370 ThNESTMENTMANAGER Nowlan Property REIT Management Limited Marine House Clanwilliam Place Dublin 2 Ireland Tel: 353 (I) 9058375 LEGAL ADVISERS TO THE CONW ANY (as to Irish law) (as to English and US law) A & L Goodbody 25/28 North Wall Quay IFSC Dublin I Ireland Ashurst LLP Broadwalk House 5 Appold Street London EC2A 2HA United Kingdom 48
  • JOINT BOOKRUNNER AND SOLE UK SPONSOR JOINT BOOKRUNNER AND SOLE IRISH SPONSOR Credit Suisse Securities (Europe) Limited One Cabot Square London E 14 4QJ United Kingdom Goodbody Ballsbridge Park Balls bridge Dublin 4 Ireland LEGAL ADVISERS TO THE JOINT BOOKRUNNERS, SOLE UK SPONSOR AND SOLE IRISH SPONSOR (as to Irish law) (as to English and US law) McCann FitzGerald Riverside One Sir John Rogerson's Quay Dublin2 Ireland Allen & Overy LLP One Bishops Square London El 6AD United Kingdom AUDITORS AND REPORTING ACCOUNTANTS Deloitte & Touche Chartered Accountants Hardwicke House Upper Hatch Street Dublin2 Ireland REGISTRAR Capita Registrars {Ireland) Limited 2 Grand Canal Square Dublin 2 Ireland 49
  • PART VI: IMPORTANT INFORMATION Forward Looking Statements This Prospectus includes statements that are, or may be deemed to be, forward looking statements. These forward looking statements can be identified by the use of forward looking terminology, including the terms "anticipates", "believes", "estimates", "expects", "intends", "may", "plans", "projects", "should" or "will" 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 Prospectus and include, but are not limited to, statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial position, prospects, growth, target Total Shareholder Returns, investment strategy, financing strategies, prospects for relationships with tenants, liquidity of the Company's assets and expectations for the Irish property industry. 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's operations, and the development of the markets and the industry in which the Company operates, may differ materially from those described in, or suggested by, the forward looking statements contained in this Prospectus. In addition, even if the Company's results of operations, financial position and growth, and the development of the markets and the industry in which the Company operates, are consistent with the forward looking statements contained in this Prospectus, those results or developments may not be indicative of results or developments in subsequent periods. A number of factors could cause results and developments of the Company to differ materially from those expressed or implied by the forward looking statements including, without limitation, general economic and business conditions, Irish property market conditions, industry trends, competition, changes in law or regulation, changes in taxation regimes or development planning regime, the availability and cost of capital, currency fluctuations, changes in its business strategy, political and economic uncertainty and other factors discussed in Part II (Risk Factors). The forward looking statements herein speak only at the date of this Prospectus. Save as required by the Prospectus Regulations, Prospectus Rules, the Market Abuse Rules, the Transparency Regulations and the Transparency Rules, the Disclosure and Transparency Rules and the Listing Rules, the Irish Stock Exchange and London Stock Exchange or by law, the Company undertakes no obligation to update these forward looking statements and will not publicly release any revisions it may make to these forward looking statements that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this Prospectus. Investors should note that the contents of these paragraphs relating to forward looking statements are not intended to qualify the statements made as to sufficiency of working capital in this Prospectus. Market, Economic and Industry Data This Prospectus includes certain market, economic and industry data, which were obtained by the Company from industry publications, data and reports, including the Jones Lang LaSalle Materials, compiled by professional organisations and analysts, data from other external sources and internal surveys conducted by or on behalf of the Management Team. The market, economic and industry data sourced from third parties used to prepare the disclosures in this Prospectus have been accurately reproduced and, as far as the Company and the Directors are aware and are able to ascertain from the information provided to them by third parties, no facts have been omitted which would render the reproduced information inaccurate or misleading. Some of the aforementioned third party sources may state that the information they contain has been obtained from sources believed to be reliable. However, such third party sources may also state that the accuracy and completeness of such information is not guaranteed and that the projections they contain are based on significant assumptions. As the Company does not have access to the facts and assumptions underlying such market date, statistical information and economic indicators contained in these third party sources, the Company is unable to verify such information. Currencies Unless otherwise indicated, all references in this Prospectus to euro and € are to the lawful single currency of member states of the EU that adopt or have adopted the euro as their currency in accordance with the legislation of the EU relating 50
  • to the European Monetary Union, all references to Pounds Sterling, sterling, GBP, £ or p are to the lawful currency of the United Kingdom and all references to US$, US Dollars or$ are to the lawful currency of the United States. The Company intends to prepare its financial statements in euro. Presentation of Financial Information and Status of Company The Company is newly formed and as at the date of this Prospectus has only commenced limited operations and has no assets or liabilities which will be material in the context of the Issue and, therefore, no statutory financial statements have been prepared as at the date of this Prospectus. All future financial information for the Company is intended to be prepared in accordance with IFRS as adopted by the EU and, unless otherwise indicated, the financial information in this Prospectus has been prepared in accordance with IFRS as adopted by the EU. The Historical Financial Information in this Prospectus has been prepared in accordance with the requirements of the Prospectus Directive Regulations and in accordance with the Annexure to the Standards for Investment Reporting 2000 ("SIR") (revised). In making an investment decision, prospective investors must rely on their own examination of the Company from time to time, the terms of the Issue and the financial information in this Prospectus. The Company has not traded nor prepared any audited accounts since its incorporation and has had limited operations. Deloitte & Touche, Chartered Accountants, whose address is Hardwicke House, Upper Hatch Street, Dublin 2, Ireland, have been appointed as the auditors of the Company and have been the only auditors of the Company since its incorporation. Save for matters connected with the Issue and the entry into of the contracts discussed in paragraph 11 of Part XV (Additional Information), the Company has not engaged in operations since its incorporation and has not incurred borrowings. Rounding Some financial and other data in this Prospectus have been rounded. As a result of this rounding, figures shown as totals in this Prospectus may vary slightly from the exact arithmetic aggregation of the figures that precede them. In addition, certain percentages presented in this Prospectus reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers. No Incorporation of Website Information This Prospectus will be made available to the public in Ireland and the United Kingdom at www.hibemiareit.com. Notwithstanding the foregoing, the contents of the Company's website, the contents of any website accessible from hyper! inks on the Company's website, or any other website referred to in this Prospectus are not incorporated in and do not form part of this Prospectus. Investment considerations An investment in the Company is suitable only for investors who are capable of evaluating the risks and merits of such investment, who understand that there is potential risk of capital loss and that there may be limited liquidity in the underlying investments of the Company and in the Ordinary Shares, for whom an investment in the Ordinary Shares constitutes part of a diversified investment portfolio, who fully understand and are willing to assume the risks involved in investing in the Company and who have sufficient resources to bear any loss (which may be equal to the whole amount invested) which might result from such investment. It is anticipated that the profile of typical investors in the Company will be institutional and sophisticated investors to include specialised international property investors who may seek to diversify their portfolios by way of investment in the Irish commercial property market. In addition it is anticipated that investors will include private investors acting on the advice of their stockbroker or financial adviser. A prospective investor should be aware that the value of an investment in the Company is subject to normal market fluctuations and other risks inherent in investing in securities. There is no assurance that any appreciation in the value of the Ordinary Shares will occur or that the investment objectives of the Company will be achieved and the Ordinary Shares 51
  • may not be suitable as investments. The value of investments and the income derived therefrom may fall as well as rise and investors may not recoup the original amount invested in the Company. There is no guarantee that any appreciation in the value of the Company's investments will occur and investors may not get back the full value of their investment. Any investment objectives of the Company are targets only and should not be treated as assurances or guarantees of performance. The contents of this Prospectus are not to be construed as advice relating to legal, financial, taxation, accounting or regulatory matters, investment decisions or any other matter. Prospective investors must rely upon their own representatives, including their own legal advisers and accountants, as to legal, tax, accounting, regulatory, investment or any other related matters concerning the Company and an investment therein. An investment in the Company should be regarded as a long-term investment. There can be no assurance that the Company's investment objective will be achieved. It should be remembered that the price of the Ordinary Shares, and the income from the Ordinary Shares (if any), can go down as well as up. This Prospectus should be read in its entirety before making any investment in the Ordinary Shares. All Shareholders are entitled to the benefit of, are bound by, and are deemed to have notice of the provisions of the Memorandum of Association and the Articles which prospective investors should review. A summary of the Memorandum of Association and the Articles is contained in paragraph 6 of Part XV (Additional Information). Important Note Regarding Performance Data This Prospectus includes information regarding the track record and performance data of the Investment Manager and members of the Management Team. Such information is not necessarily comprehensive and prospective investors should not consider such information to be indicative of the possible future performance of the Company or any investment opportunity to which this Prospectus relates. Past performance of the Investment Manager and members of the Management Team is not a reliable indicator of, and cannot be relied upon as a guide to, the future performance of the Company or the Investment Manager. The Company will not make the same investments reflected in the track record and performance data included herein. For a variety of reasons, the comparability of the track record and performance data to the Company's future performance is by its nature very limited. Without limitation, results can be positively or negatively affected by market conditions beyond the control of the Company or the Investment Manager which may be different in many respects from those that prevail at present or in the future, with the result that the performance of investment portfolios originated now may be significantly different from those originated in the past. Prospective investors should be aware that any investment in the Company is speculative, involves a high degree of risk and could result in the loss of all or substantially all of their investment. Available Information The Company has agreed that, for so long as any Ordinary Shares are "restricted securities" as defined in Rule 144(a)(3) under the US Securities Act, it will during any period that it is neither subject to section 13 or 15(d) of the US Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder furnish, upon request, to any holder or beneficial owner of Ordinary Shares or any prospective purchaser designated by any such holder or beneficial owner the information required to be delivered pursuant to Rule 144A(d)(4) under the US Securities Act. Service of Process and Enforcement of Liabilities The Company and the Investment Manager were incorporated and are domiciled in Ireland. All of the Directors, as well as the majority ofthe Management Team, are resident outside the United States, and a substantial portion ofthe assets of such persons and the Company are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon the Company or such persons or to enforce against any of them in the United States courts judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state or territory within the United States. 52
  • Stabilisation In connection with the Issue, Credit Suisse Securities (Europe) Limited (as "Stabilising Manager"), or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law and for stabilisation purposes, over-allot Ordinary Shares up to a total of 20,000,000 Ordinary Shares (representing 5.49% of the total number of Ordinary Shares comprised in the Issue before any utilisation of the Over-allotment Option) or effect other transactions with a view to supporting the market price of the Ordinary Shares at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the conditional dealings of the Ordinary Shares on the Stock Exchanges and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilisation, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Ordinary Shares above the Issue Price. Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Issue. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotment and/or from sales of Ordinary Shares effected by it during the stabilising period, the Company has granted to the stabilising manage an over-allotment option (the "Over-allotment Option") pursuant to which the Stabilising Manager may purchase or procure purchasers for additional Ordinary Shares up to a total of 20,000,000 Ordinary Shares (the "Over-allotment Shares") at the Issue Price, representing up to 5.49% of the Ordinary Shares comprised in the Issue before any utilisation of the over-allotment option. The Over-allotment Option may be exercised in whole or in part upon notice by the Stabilising Manager at any time on or before the 30th calendar day after the commencement of conditional dealings of the Ordinary Shares on the Stock Exchanges. Any Over-allotment Shares made available pursuant to the Over-allotment Option will be sold on the same terms and conditions as Ordinary Shares being offered pursuant to the Issue and will rank pari passu in all respects with, and form a single class with, the other Ordinary Shares (including for all dividends and other distributions declared, made or paid on the Ordinary Shares). 53
  • - I PART VII: INFORMATION ON THE COMPANY Hibernia REIT p.l.c is a recently incorporated Irish property investment company. The Company has an experienced Board, chaired by Daniel Kitchen, and will be externally managed by the Investment Manager, whose management team currently comprises Kevin Nowlan, William Nowlan, Frank J. Kenny and Frank O'Neill (together the "Management Team"). The Company will raise proceeds of €364,960,000 pursuant to the Issue and will be listed on the Official Lists of the Irish Stock Exchange and the UK Listing Authority and the Ordinary Shares will be traded on the main markets for listed securities of the Irish Stock Exchange and the London Stock Exchange. The Company will elect to become an Irish REIT upon Admission. The Company has a limited operating history; save for matters connected with the Issue and the entry into the contracts discussed in paragraph 11 of Part XV (Additional Information) the Company has not engaged in operations since its incorporation. At the time of Admission, the Company will not own any properties. The Company intends to assemble a substantial, high quality, largely commercial, property portfolio through a combination of judicious investment, prudent financial gearing and active asset management. The Directors believe that, in establishing the Company now, Shareholders will be able to benefit from the significant upward re-pricing of assets which they anticipate over the medium term. The Company's primary objective is to realise attractive returns for Shareholders by generating and growing long term cashflows to pay dividends and enhance capital values. THE MANAGEMENT TEAM 1. The Management Team, who will manage the Company through the Investment Manager, consists of seasoned property and finance professionals who have extensive experience in Irish property and a long track record of creating and protecting value for their clients and investors. The Directors believe that the Management Team is suitably expert and experienced to provide the Company with the services it requires to assemble and proactively manage a substantial property portfolio of the envisaged scale and quality. For more information on the Management Team and its track record, see paragraphs 1.2 and 1.3 of Part VIII (Nowlan Property REIT Management Limited and the REIT Investment Management Agreement). 2. THE BUSINESS STRENGTHS The Directors believe that the Company has the following key business strengths: • The Management Team has senior level experience of assembling and managing property portfolios. The Management Team has a range of experience in assembling and managing property portfolios and the Management Team believes it possesses the key competencies required to successfully acquire and manage property portfolios and to provide supplementary property services such as tenant management services. The Management Team has senior level management experience in property owning companies and institutions. William Nowlan has over 40 years' relevant property sector experience including over 20 years' experience at Irish Life Assurance p.l.c. Frank J. Kenny has over 23 years' experience at Flagstone Properties Inc. and Willett Companies, LLC in the United States. Kevin Nowlan has over 20 years' experience in the Irish property market including positions in Treasury Holdings and NAMA. Prior to joining WKN in 2006, Frank O'Neill spent over I 0 years working at Rohan Holdings, a property investment and development company. • The Management Team has a successful track record and long-standing relationships in the Irish property market and with key financial institutions in Ireland The Directors believe these relationships will enable the Management Team to gain access to suitable investment opportunities for the Company. The track record of the Management Team is evidenced by its members' involvement and roles with a variety of property investment businesses over a significant period of time. These credentials include the performance of the property investment 54
  • funds at Irish Life Assurance for which William Nowlan had responsibility between 1985 and 1995, together with the performance of IPUT between 1997 and 2007 during which he was a member of the IPUT Committee of Management. This track record and experience is re-enforced through the track record and experience of Frank J. Kenny through Willett Companies, LLC and Flagstone Properties, Inc. and the track record of the wider WKN team, as more particularly described in paragraph 1.3 of Part VIII (Nowlan Property RElT Management Limited and the REIT Investment Management Agreement). This collective experience and activity has given rise to long standing relationships with the property sector including with NAMA and other institutions, developers, landlords, tenants, agents, bankers and other sector participants as more particularly described in paragraph 1.3 of Part VIII (Nowlan Property REIT Management Limited and the REIT Investment Management Agreement). • • The Investment Manager has access to the multi-disciplinary WKN team which has the capacity and expertise to carry out detailed assessments of suitable investment opportunities identified by the Management Team. This assessment will encompass all the financial, property (for example, valuation, landlord/tenant planning) and technical aspects of the subject property to enable a value to be established and a deal to be agreed in principle subject to legal and technical due diligence. • The Company has a highly experienced Board with Daniel Kitchen as chairman and four other nonexecutive Directors. Board members have held senior positions in a number of public companies and have considerable experience in the property and financing industries. • 10 The Investment Manager will provide the Company with the opportunity to acquire investment properties on an exclusive basis. In particular the Investment Manager has agreed pursuant to the REIT Investment Management Agreement, that during the term of the REIT Investment Management Agreement, it will not, and it will procure that none of its group companies (if any) or affiliates or Investment Manager employees or owners will, (i) be involved in any capacity in the launch or operation of another REIT or other property investment vehicle involved in a similar area of business as the Company, or in any other area of business, in each case without approval of the Board, (ii) acquire or act for another party to acquire a property investment that is within the parameters of the investment policy of the Company, other than where the Company has had the opportunity to invest in a particular property, and has declined to do so and has consented to the party pursuing the opportunity, or (iii) advise any investor in competition with the Company for the acquisition of an investment property which falls within the investment policy of the Company. All potential or actual conflicts of interest will be disclosed by the Investment Manager to the Board. The Directors believe that the interests of the Management Team will be closely aligned with those of Shareholders through the investment of capital by the Board and Founder Group in the business, the manner by which the Performance Fee is calculated and through the payment of any Performance Fees in the form of Ordinary Shares. Pursuant to the Board and Founder Group Subscription Agreement and William Nowlan's initial subscription for 400,000 Ordinary Shares, the Board and Founder Group will, conditional upon Admission, have invested €3,600,000 in the Company through the subscription of 3,600,000 Ordinary Shares. 10 These Ordinary Shares will represent approximately 0.99% of the Company's issued share capital on Admission. All of these Ordinary Shares will also, subject to certain customary exceptions, be subject to lock-in arrangements whereby none of these Ordinary Shares may be sold for 12 months from Admission. Further details of these arrangements are described in paragraph 11.4 of Part XV (Additional Information). In addition, Performance Fees will be paid in the form of Ordinary Shares and will be subject to lock-in arrangements. Further details of these arrangements are described in paragraph 2 of Part VIII (Nowlan Property REIT Management Limited and the REIT Investment Management Agreement) and paragraph 11.1 of Part XV (Additional Information). Assuming no exercise of the Over-allotment Option. 55
  • 3. INVESTMENT POLICY Background The Directors believe that a unique opportunity currently exists to build a high quality property portfolio by investing in the Irish commercial property market. Following the substantial fall in commercial property values in Ireland since 2007 (67% from Q3 2007 to Q2 2013) (Source: Jones Lang LaSalle Materials), the Directors believe that there will be a significant upward re-pricing of assets over the medium term. In addition, the Directors believe that a significant amount of Irish property assets will become available as a result of expected deleveraging by banks and other institutions. As and when the re-pricing that is anticipated by the Directors has occurred, the Board believes the market will stabilise. By that time, the Directors expect to have built a high quality income producing portfolio and intend to continue to grow the business thereafter as an income focused, active asset management property company. Property Criteria and Strategy The Company aims to acquire a portfolio of attractively-located, institutional quality, income-producing properties primarily in the Greater Dublin area. The Company intends to concentrate on the office sector, but will also consider industrial, warehousing and distribution, recreational, retail, residential and other Irish property assets. The Company may consider investments outside the Greater Dublin area, but only where the opportunities meet the Company's investment criteria as set out. When considering property for acquisition or development by the Company, the Investment Manager will typically seek targets with some of the following characteristics: • Individual property assets in the value range of €1 0 million to €50 million (property assets outside of this range can be considered where approved by the Board); • Central Dublin office properties; • Office properties that the Management Team expects to be in demand by high quality tenants; • Prime and good quality secondary assets in prime city and regional locations; • Properties with significant rental and capital growth potential which can be realised through active asset management; • Retail properties in city centres and certain suburban areas; • Warehousing, industrial and distribution facilities located in close proximity to motorway infrastructure; • Prime Dublin single-family and/or multi-family residential units; • Recreational, leisure, hospitality or other type properties which the Management Team believes are well-let and have potential for long-term capital appreciation; • Multi-tenanted assets; • Sites or buildings with early potential for development; • Mixed use buildings where the major use of the building fits into one of the above categories but where the buildings non-primary uses may not; and • Such other specialist building or property that the Board considers will give attractive investor return. 56
  • The Company's strategy for assembling the desired property asset portfolio shall include the following methods: • Participating in public bidding processes for suitable property offered on the market; • Actively seeking to acquire assets off market, using the considerable network and long standing professional relationships which the Management Team has established with expected suppliers of suitable assets; • Seeking to enter into joint bidding arrangements with other investors for selected parts of portfolios which are the subject of sale processes, particularly those investors interested in acquiring large distressed loan books; • Seeking to enter into joint venture arrangements where the existing owner transfers a portion of its shareholding in a property investment to the Company with a view to benefitting from the Company's property management expertise; • Seeking to make commitments to acquire buildings which meet the Company's investment criteria but are still under development and the development and letting risk of which is assumed by a third party; and • Constructing buildings or becoming involved in joint ventures or other arrangements whereby such construction may occur. Within the portfolio composition and other parameters prescribed by the statutory requirements for maintaining Irish REIT status (see Part XII (Irish REIT Regime and Taxation Information)), the Company may also from time to time invest in other property investment funds or listed property companies or make debt or equity investments in Irish commercial or other property including through the acquisition of loans or other debt interests secured on Irish commercial or other property or through equity interests in property investment vehicles (including joint ventures and acquisitions of controlling interests or minority interests) or through licence agreements. In the implementation of the Investment Policy and so as to ensure flexibility in how the Company pursues acquisitions from time to time in a manner which enhances Shareholder value, the Company may acquire assets (including securities) with cash and, in circumstances where the Board believes it to be in the interests of Shareholders so to do, through the issue of new Ordinary Shares or through a mixture of cash and the issue of new Ordinary Shares. Under Irish law, shareholders' statutory pre-emption rights arise only on the allotment of shares for cash. Any issuances of new Ordinary Shares would be subject to compliance with the Irish Companies Acts, the Prospectus Regulations, the Prospectus Rules, the Listing Rules, the requirements of the Irish REIT regime, and other applicable requirements. The Management Team expects that a significant supply of property is likely to become available off market as vendors are anticipated to perceive off market transactions as offering greater privacy, greater certainty of execution, opportunities to build long term relationships and potential to execute larger portfolio transactions. The Management Team expects to deploy a significant portion of the Net Proceeds within 18 to 24 months. The Company intends to use the considerable experience and skills of the Management Team to engage in active asset management. This activity will focus on the acquisition of properties that may not initially fall into the category of institutional grade, (for example, assets which feature short leases, vacancies or require refurbishment), but are in good locations and can be brought up to institutional standard by new investment and skilled asset management. The Management Team believes that this sector of the market will be less competitive than the market for institutional grade assets and therefore has the potential to generate enhanced long term returns compared to those achievable by investing in properties requiring a more passive asset management role. The Management Team expects that this active asset management approach will also generate opportunities for joint venture projects with institutions such as NAMA and other short term holders of property. The primary objectives of the Company will be to generate and grow long term cash flows to pay dividends and to enhance capital values by way of focussed asset management. The Management Team will seek to generate significant returns, in 57
  • tenns of income and capital, for Shareholders with a target Total Shareholder Return range of I 0% to I5% when the Net Proceeds are fully invested. 11 The Company may consider a limited number of property development or redevelopment opportunities, including site acquisitions. The aggregate development costs incurred in respect of assets under development at any time will not exceed I5% ofthe Company's most recently published NAY. The Company may, in certain circumstances, consider 'forward commitments' to acquire properties which fit the investment policy but are still to be completed by third parties. Such commitments will only be made where they are in full compliance with existing Irish REIT legislation and where the development and leasing risk is substantially borne by a third party. The Company does not currently intend that active trading ofproperty assets will fonn a material part of the Company's operations. Leverage The Company will use commercially prudent levels of leverage to enhance equity returns over the long tenn. Under the Irish REIT Regime, the Company is restricted in tenns of borrowing to a REIT LTV ratio which does not exceed 50% (i.e. maximum borrowings must not exceed 50% of the aggregate market value of the assets of the business). The Board currently intends that the Company's aggregate borrowings as a percentage of the market value of the Company's total assets will not exceed 40% at the time of any borrowing, and, in any event, the Company shall not, without prior Shareholder approval, increase its borrowing above a level of 50% of the aggregate market value of its assets. However, within the REIT LTV ratio restrictions of the Irish REIT Regime the Board may modify the Company's leverage policy from time to time taking into account then prevailing economic and market conditions, fair value of the Company's assets, acquisition and active management opportunities or other factors the Board deems appropriate. No modification of the Company's aggregate borrowings policy above a 50% level shall occur without prior Shareholder approval. The Board will monitor the levels of borrowing carefully and manage maturity profiles to reduce refinancing risk. The Board may also use hedging to mitigate interest rate risk. Restrictions To comply with the Irish REIT Regime, the Company will be required to carry on a Property Rental Business, generating rental income and at least 75% of its Aggregate Income must be derived from such a Property Rental Business. Furthennore, at least 75% of the aggregate market value of the Company must relate to assets of the Property Rental Business. It must acquire at least three properties, the market value of none of which may be more than 40% of the total market value of the properties constituting the Property Rental Business. This latter condition has a grace period of three years from the date on which the Company became a REIT to allow time to build up a portfolio of rental properties. Once fully invested however, the Company will have a greater degree of diversification within its portfolio than the minimum required under the Irish REIT Regime, with a minimum of five properties with no one property asset representing more than 30% of the Company's total assets at the time of acquisition. The Company must also maintain a ratio of Property Income plus financing costs to financing costs of not less than I.25: I. For more infonnation on the conditions the Company must satisfy to qualify as an Irish REIT, see paragraph I.2 of Part XII (Irish Real Estate Investment Trust Regime and Taxation Information). 11 These are targets only and not profit forecasts. There can be no assurance that these targets can or will be met and they should not be seen as an indication of the Company's expected or actual results or returns. Accordingly investors should not place any reliance on these targets in deciding whether to invest in the Ordinary Shares. In addition, as noted previously prior to making any investment decision, prospective investors should carefully consider the risk factors described in Part II (Risk Factors) of the Prospectus. 58
  • Cash Management Policy Upon instruction from the Investment Manager, the Depositary will manage the Company's cash not yet invested by the Company in property assets or otherwise applied in respect of the Company's operating expenses with the aim of preserving the capital value of such assets. This cash management will be subject to the Cash Management Policy approved by the Board and to the instruction of the Investment Manager. In accordance with the Cash Management Policy, the Depositary, upon instmction, may only invest in various approved types of financial instruments including cash deposits, term deposits, depository bonds, fixed rate depository bonds, commercial paper, treasuries, bonds with short term to maturity and government securities as well as floating rate notes and other money market instruments. The Company also intends to hedge its interest rate exposure through the use of forward contracts, options, swaps or other forms of derivative instruments. Changes to the investment policy Material changes to the Company's investment policy set out above may only be made by ordinary resolution of the Shareholders in accordance with the Listing Rules, which will also be notified to the market through a Regulatory Information Service. If the Company breaches its investment policy, the Company will make a notification via a Regulatory Information Service of details of the breach and of actions it may or may not have taken. For as long as the Company remains admitted to the Official Lists, any changes to the Company's investment policy must be made in accordance with the requirements of the Listing Rules. Active Asset Management The Management Team intends to use established asset management techniques where appropriate to improve income profiles and add value to the Company's portfolio, including: • Restructuring oflease terms; • Negotiating lease surrenders and re-letting; • Providing high quality housekeeping services (where appropriate); • Maintaining strong relationships with tenants with a view to securing long term income flow; and • Improving assets by cost effective refurbishment or reconfiguration programmes where appropriate. The Management Team shall adopt a rigorous approach to risk management across its portfolio and will undertake a thorough analysis of the financial strength of tenants. 3.1. Potential Sources of Investments The Management Team has extensive relationships in the Irish property market and significant expertise in property acquisitions, which the Management Team believes will enable it to source investments that meet the Company's investment criteria. The Management Team has already identified a number of property assets which it has been monitoring for some time. There can be no certainty that these assets will tum into opportunities for the Company but the Directors believe that such situations are representative of the type of opportunities which they believe are likely to become available. The Management Team believes that investment opportunities for the Company will emerge mainly from the following sources: • NAMA: At 31 December 2012, NAMA had €16.5 billion in loans secured on property in Ireland of which €12.3 billion was secured on Irish investment property. NAMA had approved asset sales of€11.7 billion to the end of 2012. Of sales completed to the end of 2012, circa 80% related to property in Britain (particularly London). 78% of NAMA's Irish assets at 31 December 2012 were in the Dublin region (Source: NAMA Annual Report and Financial Statements 2012). €1.5 billion of NAMA related property is currently for sale in Ireland and on 26 September 2013 NAMA announced its intention to bring two portfolios with an estimated value of between €350 59
  • million to €400 million to the market. (Source: Opening Address by Brendan McDonagh, Chief Executive of NAMA, to the Public Accounts Committee Thursday, 26 September 2013). Given the recent stabilisation in the domestic commercial property market and the expected repayment by NAMA of €7.5 billion of NAMA senior debt by the end of 2016 (Source: Opening Address by Brendan McDonagh, Chief Executive of NAMA, to the Public Accounts Committee Thursday, 26 September 2013), the Management Team expects NAMA to significantly increase the volume of Irish property it makes available for sale. NAMA has confirmed it will provide joint venture opportunities to develop NAMA-controlled assets to suitable joint venture partners. The Management Team, due to its extensive planning and construction experience, believes that the Company will be well placed to benefit from such joint venture opportunities. In addition, the Management Team believes that NAMA will seek to achieve its stated objectives by disposals of property assets by receivers acting on behalf of NAMA or by debtors of NAMA; this should be a further source of potential investment opportunities for the Company. • Domestic and International Banks: IBRC had €10.2 billion of Irish commercial property lending (including investment and development property loans) at end June 2012 (Source: IBRC 2012 Annual Report). The IBRC loan portfolio is due to be offered for sale before the end of2013 by the special liquidators appointed to IBRC and any loans not sold by the special liquidators will be transferred to NAMA (Source: NAMA Annual Report and Financial Statements 2012). Bank of Ireland Group and Allied Irish Banks p.l.c. as at 30 June 2013, held large Irish property loan books that were not transferred to NAMA (Source: AlB June 2013 Interim report; Bank of Ireland June 2013). International banks have been very active to date in terms of both asset backed loan sales and asset disposals. Lloyds Banking Group continues to wind down its Irish loan book which is a legacy from when its subsidiary, Bank of Scotland (Ireland) Limited, operated in Ireland (Source: Lloyds Banking Group Half Year Report 2013). Danske Bank has a loan portfolio that is no longer considered part of its core activities, which consists mainly of loans to Irish customers (Source: Danske Bank 2013 Q3 Interim report). Danske Bank expects to significantly reduce this portfolio by the end of 2014 (Source: Danske Bank CEO statement, 2 May 2013). Ulster Bank intends to materially reduce its non-core assets, which refers to assets that it intends to run off or dispose (Source: Ulster Bank Group financial statements year ended December 2012 ), by 2016 (Source: Ulster Bank Investor Round Table- 2 July 2013). The Management Team believes that disposals oflrish property assets by domestic and international banks will provide opportunities for the Company to acquire assets that meet the Company's investment criteria. • Private equity: International private equity buyers have been active in the Irish market over the past 24 months. Their activity has included direct acquisitions of property from receivers acting for Lloyds Banking Group, Danske Bank and Ulster Bank, as well as acquisitions of property backed loan portfolios from NAMA, Lloyds Banking Group and Allied Irish Banks. The Management Team anticipates that opportunities will arise to selectively acquire some of the property assets securing loan portfolios which have been acquired by international private equity buyers, particularly those assets which would benefit from active asset management. In addition, the Management Team believes that these overseas investors are not long term holders of Irish property and therefore are likely to seek to dispose of their Irish property assets as the Irish property market recovers and liquidity returns. The Management Team believes that opportunities are likely to be created for the Company to acquire assets in line with the Company's investment criteria as international investors seek to dispose of the Irish assets they have acquired. • Other: The Management Team believes that investment opportunities for the Company may also arise from disposals by receivers; sale and leaseback by large corporations and Government entities and disposals by private owners and various institutional investors including pension funds; forward purchase arrangements for properties under development; and disposals by private syndicates wishing to exit investments. For more information on the Investment Manager and its relationship with the Company, see Part VIII (Nowlan Property REIT Management Limited and the REIT Investment Management Agreement). 60
  • 4. IRISH COMMERCIAL PROPERTY MARKET AND ECONOMY 4.1. The Irish Economy Irish output (GOP) fell by a cumulative 11.5% from its peak in Q4 2007 to its trough in Q4 2009 (Source: Central Statistics Office (CSO) Quarterly National Accounts Q2 2013). The scale of decline in output stemmed from the imbalanced nature of the Irish economy in the immediate period prior to the global financial crisis starting in mid-2007. During that period, the dependence on construction activity rose to very high levels compared to the long term average. This increased construction activity, amounting to 19.4 % of GOP and 22.5% of GNP at the peak in 2007, versus a long-term GNP average of 14% and a long term GOP average of 12.3% since 1970 (Source: CSO, National Income and Expenditure 1995-2012, Historical National Income & Expenditure Tables 1970-1995), was facilitated by rapid growth in credit outstanding (Source: Central Bank oflreland, Money and Banking Statistics). Unlike in the period from 1994-2000, when exports were the main driver of economic growth, growth in the period from 2003-2007 was driven by domestic economic factors (Source: CSO, National Income and Expenditure 1995-2012, Historical National Income & Expenditure Tables 1970-1995). During this period problems began to emerge in the following areas: (i) Banking: Banks were heavily exposed to construction and property loans and were very dependent on wholesale funding (Source: Report of the Commission of Investigation into the banking sector in Ireland, Nyberg). As credit markets dried up during the global financial crisis the banks required significant government support. (ii) Fiscal: The fall in construction activity triggered a rapid fall in tax revenues emanating from that sector (Source: European Commission). This was compounded by capital injections into the Irish banks. (iii) Competitiveness: Prior to the global financial crisis, Irish unit labour costs grew well in excess of the euro area average over the period from 2003-2007 (4.2% per annum versus 1.3% in the euro area, Source: Eurostat), illustrating a significant loss of competitiveness in the important exporting sectors of the Irish economy. A combination of these issues, along with the wider systemic concerns that existed in the euro area in 2010, triggered a loss of confidence in Irish sovereign bond markets. An announcement of further capital needs for the Irish banks in September 2010 triggered a further loss of confidence, pushing Irish government 10-year bond yields above 9%. In November 2010, the Troika of the International Monetary Fund, the European Commission and the European Central Bank conducted an official visit to Ireland and in December 20 I 0, Ireland applied for a programme of assistance to run from December 2010 to December 2013. Ireland is now approaching the end of its three-year programme and has successfully completed 11 separate Troika reviews. Significant progress has been made since the arrival of the Troika in November 2010 to return public finances to health, rehabilitate the banking system and improve the competitive position of the Irish economy. This progress is reflected in the yields on Irish government bonds. While 10-year bond yields initially rose in the first half of 2011 to peak at 14%, they have since fallen sharply. A newly issued Irish government 10-year bond as at 5 December 2013 (being the latest practicable date prior to the issue of this Prospectus) trades at 3.55% (Source: Bloomberg). From an economic perspective, Ireland has moved from being heavily dependent on investment in 2006 (with investment accounting for 22% of GOP in that year) to a position where investment accounts for just 11% of GDP (Source: CSO, National Income and Expenditure 1995 - 2012), the lowest recorded level in Ireland's history (CSO data goes back to 1970). GDP grew in both 2011 (2.2%) and 2012 (0.2%) (Source: CSO, National Income and Expenditure Annual Results for 2012) and is expected to grow again in 2013. Preliminary estimates for Q2 2013 indicate that GOP increased by 0.4% in volume terms compared with Ql 2013 and that GNP decreased by 0.4% (Source: CSO, Quarterly National Accounts Q2 2013). GNP is forecast to grow by 2.0% and 2.7% in 2013 and 2014 respectively. (Source: Economic and Social Research Institute Quarterly Economic Commentary Spring 2013). Continued growth in the contribution from net exports and a return to growth in domestic demand for the first time since 2007 underpin projected growth in 2013 while an increase in growth in investment and the domestic economy is also expected to contribute in 2014. After declining by 3.8% in 2009, export growth averaged 4.4% per annum over the three years to 2012, relative to just 1.1% average annual import growth (Source: CSO, National Income and Expenditure 1995- 2012). This has facilitated a 61
  • return to current account surplus, which amounted to 4.4% of GDP in 2012 (Source: CSO, National Income and Expenditure 1995 - 20 12). Services have been the key driver of this growth, growing by an average of 7.I% in real terms over the period (Source: CSO Quarterly National Accounts Q2 20 13). Goods exports grew by an average of 1.8% over the three years but were weak in 2012, falling by 3.6% due to industry-specific issues in the pharmaceutical sector (the "patent cliff') (Source: CSO, National Income and Expenditure 1995- 2012). Recent flows ofFDI have been strong, with the IDA pointing out that 2012 was the best year for net jobs growth in IDAsupported companies since 2000, with 6,570 net new jobs created. Ireland has been able to attract a significant amount of FDI from the Information and Communications Technology sector. Foreign companies that have chosen to locate operations in Ireland include eBay, PayPal, Twitter, Facebook, Google and Yahoo!. Among the reasons cited by the IDA for Ireland's strong performance in attracting FDI is its business-friendly government policies and the corporation tax rate and its highly skilled, flexible workforce which is recognized as being one of the best educated workforces in the OECD (Source: OECD). The IMD World Competitiveness Yearbook (20 13) ranked Ireland as the 17th most competitive economy in the world, but Ireland was ranked first for the flexibility and adaptability of its workforce. Ireland has seen the most rapid reduction in unit labour costs since the beginning of the crisis in the euro area. As a broad measure, unit labour costs have decreased by 14.2% since 2008 (Source: Eurostat). However, other costs are also down significantly. For example, commercial property prices have fallen by 67% since 2007, while commercial rents are down by approximately 50% (Source: Jones Lang LaSalle Materials). Domestically, employment growth has begun to return, with the total number of people in employment up 3.2% year-onyear in Q3 2013 (Source: CSO, Quarterly National Household Survey, Q3 2013). Within this, full-time employment was up 3.8% year-on-year. Secondly, the unemployment rate has fallen from a peak of 15.1% to its current rate of 12.8% (Source: CSO, Quarterly National Household Survey, Q3 2013). The Irish economy has become more reliant on the services sector in recent years. As ofQ3 2013, 76% of those employed in Ireland worked in the services sector, relative to 66% in 2003 (Source: CSO, Quarterly National Household Survey). In Greater Dublin, the services sector is even more important, representing 85% of the total in Q2 2013 (versus 75% in 2003). This compares to just 70% in Q2 2013 outside of the Greater Dublin area (Source: CSO, Quarterly National Household Survey). The Directors believe that the fundamentals of Ireland's strengthening export sector, favourable demographics, comparatively low unit labour costs, an English-speaking, well-educated workforce and a competitive corporation tax rate should underpin a return to increased economic growth. 4.2. Irish Commercial Property Market Background Commercial property is highly correlated with the economic cycle. The Irish commercial property market peaked in 2007. This preceded, the onset of the international credit crisis and the subsequent domestic economic recession and a fall in value of Irish commercial property assets of 67% from the peak in Q3 2007 to the end of Q2 2013 (Source: Jones Lang LaSalle Materials). The scale of the downturn was exacerbated by a lack of funding arising from the global credit crisis such that the property investment market in Ireland came to a virtual standstill between 2008 and 2011. Commercial property investment volumes contracted from €1.6 billion in 2007 to an annual average of€244 million between 2008 and 2011 (Source: Jones Lang LaSalle Materials). A key feature of the downturn was a reduction in the number of banks (both domestic and foreign) providing debt finance for the purchase of Irish commercial property. Banks that were still actively participating in the market tightened lending standards significantly. In addition to the lack of bank funding, other contributing factors included excess supply, uncertainty surrounding the continuation of the Euro, uncertainty regarding the rate of stamp duty on commercial property transactions (subsequently clarified by the Irish government in the 2009 budget with a reduction from 9% to 6%, with a subsequent reduction to 2%) and uncertainty regarding potential legislative changes to abolish upward only rent reviews (subsequently clarified by the Irish government in the 2012 budget with confirmation that such legislation would not be introduced). 62
  • Establishment of NAMA As a result of the downturn in the Irish commercial property market, Irish banks were left with significant property loan assets secured on property with a market value significantly below the amount owed. This caused a rapid depletion in bank regulatory capital and required remedial action to remove uncertainty and to repair the balance sheets of a number of financial institutions deemed to be of systemic importance to the Irish economy. In the budget statement of April 2009, the Irish government announced the proposed creation of an asset management agency that would acquire loans linked to land and development from a number of key institutions. Draft legislation was published in September 2009 and the National Asset Management Agency Act, 2009, was passed into law in November 2009. NAMA was formally established on 21 December 2009. Five institutions applied to join the NAMA scheme and were designated as participating institutions in February 2010: AlB; Bank oflreland; IBRC (under its former name Anglo Irish Bank Corporation); Irish Nationwide Building Society; and EBS Building Society. NAMA subsequently acquired loan assets with a nominal value of €74 billion incorporating just under 800 debtors' connections and more than 12,000 individual loans collateralised by more than 10,000 groups of properties across a range of asset classes. Approximately two-thirds of the assets backing those loans are located in Ireland, of which approximately 67% are located in Dublin. In exchange for these loans NAMA issued Government-guaranteed securities to the five participating financial institutions. NAMA's primary objective is to obtain the best achievable financial return for the Irish State over the course of a projected 10-year wind down of the portfolio (commencing in 2009). Market Recovery The latest data from Jones Lang LaSalle Irish Property Index for Q3 2013 supports the Management Team's belief in a gradual improvement in the performance of the Irish commercial property market, with total returns increasing by 3.5% quarter-on-quarter during that period, the eighth consecutive quarter of positive growth. Although commercial property values have continued to fall on an annual basis (down 0.9% year-on-year), capital values increased for the second consecutive quarter, with a 1.1% increase in Q3 2013. This increase was supported by growth across all sectors, with the greatest increase in offices, which increased by 1.7% in the quarter, followed by retail and industrial which increased by 0.6% and 0.5% respectively. (Source: Jones Lang LaSalle Materials). Rental values in the Irish commercial property market increased overall for the second consecutive quarter in Q3 2013 (by 0.8%). In terms of sectoral trends, office and industrial ERVs increased by 3.3% and 1.2% respectively, while retail ERVs decreased by 2.2%. Retail rents have stabilised for prime product only, with signs of rental growth still not readily apparent. Secondary retail rents remain under pressure (Source: Jones Lang LaSalle Materials). The uplift in activity levels in H2 2012 has continued through 2013 with total investment volumes of€1.06 billion across 79 transactions in the nine months to 31 October 2013. This compares to total investment volumes for the whole of 2012 of €557 million. Investment volumes in Q3 2013 totalled €452 million across 27 transactions, which is the highest quarterly total since Q3 2007. Dublin continues to dominate activity (accounting for 99% of investment volumes and 81% of deals) while the split across sector was balanced with mixed-use accounting for 33% of transactions, followed by office (22%), residential (22%) and retail (19%). (Source: Jones Lang LaSalle Materials). Dublin Office Market In the Dublin office market, take-up in Q3 2013 amounted to 458,370 square feet spread across 57 separate transactions, resulting in total office take-up during the first nine months of 2013 of I. 15m square feet spread across 135 separate transactions. This represented year-on-year growth of 18%. Overall demand for office accommodation stood at I .3m square feet at the end ofQ3 2013. The suburbs of Dublin accounted for 56% of take-up in Dublin in Q3 2013 with the city centre accounting for the remaining 44%. The overall office vacancy rate in Dublin at the end of Q3 2013 was 18.5%, down from 19.0% in Q2 2013. Prime headline rents in the Dublin office market were in the region of€30 to €35 per square foot during Q3 2013, remaining stable in comparison to Q2 2013. Yields for transactions completed in Q3 2013 remained at historically high levels although the market witnessed some compression of prime office city centre yields. This was particularly evident in the market for prime Dublin 2 office blocks. Yields on city centre offices are now in the region of 6.25% to 6.75%. In terms of supply, there are currently only five Grade A buildings greater than 50,000 square feet vacant in Dublin 2, Dublin 4 and the IFSC, with no single building in excess of 150,000 square feet currently available in that 63
  • location (Source: Jones Lang LaSalle Materials). The Management Team estimates that there is currently active demand for more than 1.5 million square feet in the marketplace. Prime office rents are forecast to increase by 21.8% between 2013 and 2017. Prime office capital values are forecast to increase by 33.1% over the same period (Source: Jones Lang LaSalle Materials). Dublin Industrial and Logistics Market In the Dublin industrial and logistics market sales and letting activity amounted to 771,374 square feet in Q3 2013, an increase of 16% from Q2 2013. Total take-up is expected to hit and possibly exceed 2.5m square feet by the year end which would be the highest take-up level since 2008 (Source: Jones Lang LaSalle Dublin Industrial Take-Up Report Q3 2013). Prime industrial rents in Dublin remained stable at approximately €5.50 to €6.00 per square foot in Q3 2013 and there are signs that secondary rents in Dublin are beginning to stabilise. Prime industrial rents are forecast to increase by 33.3% between 2013 and 2017. Prime industrial capital values are forecast to increase by 45.5% over the same period (Source: Jones Lang LaSalle Materials). Dublin Retail Market The Dublin retail market remains characterised by low rents, store vacancies and weak consumer sentiment. However, there is some evidence of rents stabilising in certain high street and large centre locations. In contrast, secondary product continues to struggle with pressure on rents and limited activity. There was some evidence of yield compression in the retail sector during Q3 2013 driven by an uplift in demand for prime retail investment opportunities. Prime high street retail yields are currently in the order of 6.0% to 7.0% while prime retail shopping centre yields are currently in the order of7.5% to 8.0%. Prime retail rents are forecast to increase by 4.3% between 2013 and 2017. Prime retail capital values are forecast to increase by 13.4% over the same period (Source: Jones Lang LaSalle Materials). Conclusion The Management Team believes that the prevailing conditions in the Irish commercial property market will provide significant opportunities for the Company in the short to medium term. The combination of the Company's stated investment focus, the growth in capital values anticipated by the Directors, the commercially prudent leverage policy that the Company intends to adopt, the scale of the potential investment opportunities anticipated by the Management Team and the strength of the Management Team's relationships with key market participants will leave the Board well placed, following completion of the Issue and Admission, to build a property company of high quality yielding sustainable cashflows. 5. FINANCING STRATEGY Following Admission and in addition to using cash to make acquisitions and distributions to Shareholders, the Company will incur operating expenses that will need to be funded. Initially, the Company expects these expenses will be principally funded through the Net Proceeds. In addition to the Investment Manager's fees under the REIT Investment Management Agreement such operating expenses include: (i) acquisition costs and expenses (such as due diligence costs, legal costs and taxes); (ii) costs in connection with any debt financings; (iii) Directors' fees and audit fees; and (iv) other operational costs and expenses. As the investment portfolio grows, the Directors expect that the Company's operating expenses, including the payment of interest on any borrowings and transaction related costs, will be paid with income generated from the Company's investment portfolio and surplus cash. The Directors expect that the annualised running costs of the Company will initially be approximately €3,000,000 per annum 1 including the annual Base Fee but excluding property acquisition costs. A Base Fee will, and a Performance Fee may, be paid to the Investment Manager under the REIT Investment Management Agreement. For more information on the Base Fee and Performance Fee, see paragraph 11.1 of Part XV (Additional Information). 5.1. Proceeds of the Issue The Company's principal use of the Net Proceeds will be to fund future property investments consistent with the investment policy of the Company disclosed at paragraph 3 of this Part VII (Information on the Company) as well as to fund the Company's operating expenses. 64
  • 5.2. Borrowings The Company may choose to finance a portion of certain acquisitions with debt financing (including by issuing bonds). The Company's approach will be to use gearing with a view to enhancing equity returns whilst maintaining pmdent levels of interest cover and protecting Shareholders' funds. The Directors and the Management Team intend to determine the appropriate level of borrowings on a deal specific basis. The Company will use commercially pmdent levels of leverage to enhance equity returns over the long term. Under the Irish REIT Regime, the Company is restricted in terms of borrowing to a REIT LTV ratio which does not exceed 50% (i.e. maximum borrowings must not exceed 50% of the aggregate market value of the assets of the business). The Board currently intends that the Company's aggregate borrowings as a percentage of the market value of the Company's total assets will not exceed 40% at the time of any borrowing, and, in any event, the Company shall not, without prior Shareholder approval, increase its borrowing above a level of 50% of the aggregate market value of its assets. However, within the REIT LTV ratio restrictions of the Irish REIT Regime the Board may modify the Company's leverage policy from time to time taking into account then prevailing economic and market conditions, fair value of the Company's assets, acquisition and active management opportunities or other factors the Board deems appropriate. No modification of the Company's aggregate borrowings policy above a 50% level shall occur without prior Shareholder approval. The Board will monitor the levels of borrowing carefully and manage maturity profiles to reduce refinancing risk. The Board may also use hedging to mitigate interest rate risk. 5.3. Other sources of finance As substantially all of the cash raised pursuant to the Issue will be used in connection with the Company's acquisitions of commercial property, the Company's future liquidity will depend primarily on: (i) the collection of rents from its investment portfolio; (ii) the timing of the sale of the properties and property-holding entities it acquires; (iii) the Company's management of available cash; and (iv) the use of borrowings to fund acquisitions and, if necessary, to fund short-term liquidity needs. The Company may also use further equity offerings or consideration in the form of equity to finance the growth of its investment portfolio. 6. VALUATION POLICY The NAV attributable to the Ordinary Shares will be published at the time of publication of the Company's half-yearly and annual financial results through a Regulatory Information Service. The NAY will be based on the Company's property assets most recent valuations, as at 31 March and 30 September in each year, and calculated in accordance with IFRS as adopted by the EU. Valuations of the Company's property assets will be made in accordance with the appropriate sections of the RICS Red Book at the date of valuation, which is an internationally accepted basis of property valuation. The valuations will be undertaken by a suitably qualified independent valuation firm or firms. Pursuant to the REIT Investment Management Agreement, the EPRA NA V will be determined for the purpose of determining the fees payable to the Investment Manager. See paragraph 11.1 of Part XV (Additional Information) for a summary of the REIT Investment Management Agreement. The Company will appoint an internationally recognised expert with the appropriate resources and expertise to value the property assets of the Company. They will be independent of the Investment Manager, the Company and any persons with close links to the Investment Manager or the Company. These valuations will be performed in accordance with the RICS valuation - Professional Standards Global edition ("the Red Book"). The Red Book sets out the minimum contents of a Red Book valuation. The Investment Manager will ensure that all necessary information is provided to the external valuer for the purposes of performing valuations. The Investment Manager's valuation policy and oversight framework of management functions provide for a review process of the individual valuation of each asset given the materiality and illiquid nature of each asset. 65
  • The Investment Manager's valuation policies undergo a periodic review, at least on an annual basis. The valuation policies and procedures also outline how a change to the valuation policy may be effected, and in what circumstances it would be appropriate to effect such a change. The value of any investment which is not quoted, listed or normally dealt in on a regulated market or of any investment which is normally quoted, listed or dealt in on a market but in respect of which no price is currently available shall be the probable realisation value estimated with care and in good faith by a competent person appointed by the Directors. In determining the probable realisation value of any such investment, the Company may accept a certified valuation from a competent independent person, or in the absence of any independent person, (notwithstanding that the Investment Manager has an interest in the valuation), any investment manager appointed by the Directors. 7. TREASURY POLICY Until such time as funds are required for investment in property opportunities, the Company intends that the Net Proceeds and cash not yet invested will be managed by the Depositary upon instruction from the Investment Manager and in accordance with the Cash Management Policy approved by the Board. In accordance with the Cash Management Policy, the Depositary, under instruction from the Investment Manager, may invest only in various approved types of financial instruments including cash deposits, term deposits, depository bonds, fixed rate depository bonds, commercial paper, treasuries, bonds with short term to maturity and government securities as well as floating rate notes and other money market instruments. The Company also intends to hedge its interest rate exposure through the use of forward contracts, options, swaps or other forms of derivative instruments. 8. DIVIDEND POLICY The Directors intend to maintain a dividend policy which has due regard for the Irish REIT regime and for sustainable levels of dividend payments. Under the Irish REIT Regime, subject to having sufficient distributable reserves, the Company will be required to distribute to Shareholders at least 85% of the Property Income of its Property Rental Business for each accounting period. Subject to the foregoing, the Directors intend to reinvest proceeds from disposals of assets in accordance with the Company's investment policy. The Company intends to pay dividends when it is considered appropriate to do so by the Board. However, in accordance with the Irish REIT Regime, provided it has sufficient distributable reserves, the Company's first dividend must be paid by 23 December 2014. 9. STRUCTURE AS AN IRISH REAL EST ATE INVESTMENT TRUST The Company will elect to be an Irish REIT on Admission. As an Irish REIT, the Company will have a tax efficient corporate structure with the consequences for Shareholders described in Part XII (Irish REIT Regime and Taxation Information). Provided certain conditions and tests are satisfied, as an Irish REIT, the Company will not pay Irish corporate taxes on the income or gains of its Property Rental Business. These conditions and tests are discussed in Part XII (Irish REIT Regime and Taxation Information). 10. CORNERSTONE INVESTORS A brief description of each of the Cornerstone Investors is as follows. The information set out below in respect of each of the Cornerstone Investors has been provided by each relevant Cornerstone Investor. CREF College Retirement Equities Fund ("CREF"), is registered as an investment company with the U.S. Securities and Exchange Commission and organised under the laws of the State of New York, and is acting by its duly authorised investment adviser, TIAA-CREF Investment Management, LLC, which is a limited liability company organised under the laws of Delaware. 66
  • Moore Capital Moore Capital Management, LP ("Moore Capital") is a Delaware limited partnership. Moore Capital is the investment manager for PL Credit Fund (Master) LP and AB Moore Long Term Investments, LP, both of which will subscribe for Ordinary Shares pursuant to the Cornerstone Subscription Agreement between the Company and PL Credit Fund (Master) LP and AB Moore Long Term Investments, LP. Putnam Investments Putnam Investment Management, LLC, a limited liability company formed under the laws of Delaware, U.S.A, and Putnam Fiduciary Trust Company, a New Hampshire, U.S.A non-depository trust company (collectively, "Putnam Investments") is acting as investment manager for various funds who will each subscribe for Ordinary Shares pursuant to the Cornerstone Subscription Agreement made between Putnam Investments and the Company. Quantum Quantum Strategic Partners Ltd. ("Quantum") is a Cayman Islands Exempted Company, which will subscribe for Ordinary Shares pursuant to the Cornerstone Subscription Agreement between Quantum and the Company. Soros Fund Management LLC is the principal investment manager to Quantum. Wellington Management The Ordinary Shares to be subscribed under the Cornerstone Subscription Agreement between the Company and Wellington Management Company, LLP ("Wellington Management") will be acquired by various investment advisory clients of Wellington Management. Wellington Management is an investment adviser registered under the United States Investment Adviser Acts of 1940, as amended. Wellington Management is organised as a Massachusetts limited liability partnership. Each of the Cornerstone Investors has entered into a Cornerstone Subscription Agreement with the Company. 67
  • PART VIII: NOWLAN PROPERTY REIT MANAGEMENT LIMITED AND THE REIT INVESTMENT MANAGEMENT AGREEMENT 1. NOWLAN PROPERTY REIT MANAGEMENT LIMITED 1.1. Overview The Company will, pursuant to the REIT Investment Management Agreement, be managed by the Investment Manager. The Investment Manager is owned by WKN and Frank J. Kenny and is operated by them and a team of property and finance professionals who collectively have extensive experience in Irish property and strong track records in both asset management and in successfully creating value for clients and investors. Through the Investment Manager, the Company will also have access to the asset management operation of WKN, which includes approximately 30 full time property, financial and support staff. The Investment Manager was incorporated in Ireland on 26 August 2013 with registered number 531777 under the Irish Companies Acts as a limited liability company named Nowlan Property REIT Management Limited. The Investment Manager is domiciled in Ireland and its registered office and principal place of business is Marine House, Clanwilliam Place, Dublin 2, Ireland. Based on the provisions of AIMFD it is considered by the Directors that the Company may be an AIF within the scope of AIFMD and the Company has considered it prudent to proceed on the basis it is an AIF, which requires the appointment of an Alternative Investment Fund Manager ("AIFM") authorised or registered under the AIFMD Regulations. Accordingly, the Investment Manager has been authorised by the Central Bank as an authorised AIFM under the AIFMD Regulations. As a consequence of being authorised as an AIFM under the AIFMD Regulations, the Investment Manager has been obliged to adopt and implement and will be obliged to (i) comply on an ongoing basis with a programme of activity, the form of which has been agreed with the Central Bank, (ii) put in place a variety of policies and procedures dealing with matters such as risk management, liquidity management, conflicts of interest, supervision of delegates, complaints handling, internal audit, record keeping and remuneration among other matters and (iii) comply with ongoing requirements regarding minimum levels of capital as well as reporting obligations to the Central Bank and to Shareholders. As a consequence of being an AIF which has an authorised AIFM, the Company has been obliged to engage the Depositary to act as depositary for the Company. Aside from entering into the REIT Investment Management Agreement and carrying out activities in contemplation of its role as Investment Manager, the Investment Manager has not conducted operations since the date of its incorporation. 1.2. The Management Team The directors of the Investment Manager, each of whose business address is Nowlan Property REIT Management Limited of Marine House, Clanwilliam Place, Dublin 2, are Kevin Nowlan, William Nowlan, Frank J. Kenny and Frank O'Neill. Each of these individuals are executive directors of the Investment Manager and together form the Management Team. Within the Investment Manager, Kevin Nowlan acts as the chief executive officer, Frank J. Kenny as development director, William Nowlan as investment director and Frank O'Neill as chief operations officer. William Nowlan and Kevin Nowlan are connected as related family members. The Management Team is led by Kevin Nowlan. Biographical details of the Management Team are as follows: Kevin Nowlan (born: 26 June 1971) is chief executive officer of the Investment Manager. He has more than 20 years of experience in the Irish property market, including commercial agency and property management, investment and development financing, property development, commercial loan portfolio management and debt restructuring. He is a qualified chartered surveyor. Prior to joining WKN, Kevin Nowlan was senior portfolio manager at NAMA for 3 years and senior portfolio manager at Treasury Holdings (an Irish property development company) for 4 years. Prior to joining 68
  • NAMA in 2010, Kevin also spent 6 years as managing director ofWKN. He has a B.Sc. in Estate Management from the University of Ulster, an MBA from Ulster Business School and a Diploma in Project Management from Trinity College, Dublin. William Nowlan (born: 19 February 1946) is the Chairman and investment director of the Investment Manager. As the investment director, he will be responsible for assisting the chief executive officer on the identification and assessment of potential property acquisitions for recommendation to the Board, having regard to the investment policy of the Company. In addition, he will have responsibility for the ongoing monitoring of the composition of the Company's property portfolio to ensure that it continues to comply with the Company's investment policy and with good investment management principles. He has more than 40 years' experience investing in Irish commercial property. Prior to forming WKN in 1996, William Nowlan was Head of Property Investment at Irish Life Assurance p.l.c. from 1985 to 1995 and for a period during that time was also Secretary to the Investment Committee. He was a member of the Committee of Management of IPUT (Irish Property Unit Trust) from 1997 to 2007. He is a member of the Irish Town Planning Institute, a fellow of the Royal Institute of Chartered Surveyors and a former Chairman of both the Royal Institute of Chartered Surveyors Ireland and the Royal Institute of Chartered Surveyors Europe. He was also a member of the RICS Governing council in London. He was the founding chairman of the Irish Property and Facilities Managers' Association. He was also Visiting Professor in the University of Ulster and lecturer in Town Planning at University College, Dublin. He assembled and led the Irish REITs Forum, a voluntary body of leading property industry practitioners and stakeholders in the property investment market who came together in January 2011, to promote the introduction ofREITs to Ireland that influenced the introduction ofthe Irish REIT legislation in early 2013. Frank J. Kenny (born: 28 January 1953) is the development director of the Investment Manager. He has more than 35 years of experience in the Irish and US property markets in all aspects of commercial and residential property investment and development for both private investors and institutions. He trained as a chartered surveyor at Lisney, Dublin and also worked as an investment analyst under William Nowlan at Irish Life. He is the founder and chief executive officer of Willett Companies, LLC, of Rye, New York, a mid-sized property investment company specialising in multi-tenanted office and retail properties on the East Coast of the United States. Previously, he was chief executive officer of Flagstone Properties, Inc. At Willett Companies, LLC he is responsible for overseeing all the property aspects of Willett's operations including property acquisition, lettings, refurbishment and disposals. He is a qualified Chartered Surveyor and has a diploma in Environmental Economics. He has recently been involved in the successful negotiation, structuring and delivery of significant long term investment and development transactions in the Dublin Central Business District. Frank O'Neill (born: 10 December 1958) is the chief operations officer ofthe Investment Manager. He has more than 20 years of experience in the Irish property market. He currently has responsibility for WKN's Portfolio Management division, which manages a significant portfolio of Irish and UK properties. He has considerable experience in property transactions and advising financial institutions in relation to distressed borrowing. Previously, he was director at Rohan Holdings, one of ireland's leading property investment and development companies. A qualified chartered accountant and chartered surveyor, he has a B.Comm from University College Dublin, an M.Sc. in Spatial Planning from the Dublin Institute of Technology and diplomas in Property Investment, Property Tax and Property and Facilities Management. 1.3. Track Record The track record of the Management Team has been accumulated across a number of different entities over a significant period of time. The core elements of this track record comprise: • The performance of the property investment fund at Irish Life Assurance p.I.c. for which William Nowlan had responsibility for making investment recommendations to the board of directors in relation to a specific fund between 1985 and 1995 together with the performance of IPUT between 1997 and 2007 during which time he was a member of IPUT's Committee of Management; • The track record and experience of Frank J. Kenny through Willett Companies, LLC and Flagstone Properties, Inc.; and • The track record of WKN in light of the key executive roles held in WKN by William Nowlan, and since they joined WKN, by Kevin Nowlan and Frank O'Neill. 69
  • William Nowlan Prior to forming WKN in 1996, William Nowlan was Head of Property Investment at Irish Life Assurance p.l.c. from 1985 to 1995 and for a period during that time was also Secretary to the Investment Committee. During his period at Irish Life Assurance p.l.c., the performance of the property funds for which he was responsible for making investment recommendations to the board of directors were in the top or second quartile performance of Irish property funds for 61.4% of all quarterly periods from 1985 to 1995. He was a member of the Committee of Management ofiPUT, from 1997 to 2007, which Committee of Management received investment proposals brought to it by investment managers. During his period at IPUT, IPUT was one of the largest institutional property investment vehicles in Ireland and its performance was in the top or second quartile performance of Irish funds for 53.7% of all quarterly periods from 1997 to 2007. (Source: Investment Property Databank) Kevin Nowlan Kevin Nowlan has more than 20 years' experience in the Irish property market. During this time he had a wide variety of property roles including in commercial agency, banking, development, investment, consultancy and at NAMA. At NAMA he had the responsibility for the management of a debt book with a par value of approximately €9 billion and was involved in the overseeing of sales of approximately €650 million. He was also a senior member of the Asset Management team led by the head of Asset Management at NAMA. At Treasury Holdings as one of only three senior portfolio managers he was centrally involved in the feasibility, planning and delivery of a number of the company's most significant projects including the Nestle site in Kilmainham, Montevetro and Altra Vetro, Tower Building and a joint venture with Trinity College on College Green. His responsibilities included the selection, appointment and management of multi-disciplinary project teams and the delivery of complex construction projects. In 2005, he joined WKN where he assumed the role of Managing Director and specialised in the formulation and delivery of innovative asset management strategies that generated and realised significant added value for clients. He was recently involved in the €1 billion Grangegorman redevelopment project where he led an external development management team of over fifteen consultants during the initial feasibility and site preparation stages. Willett Companies, LLC Frank J. Kenny is the founder and chief executive officer of Willett. Willett was founded in 1990 and is based in Rye, Westchester County, New York. Willett Companies, LLC is the company through which Frank J. Kenny and his business partner (who is not a member of the Management Team or involved with the Company) raise funds for property investments. Typically each investment vehicle has a stand-alone shareholder structure in respect of the particular investment. Accordingly, Willett consists of several entities which invest in, operate, develop and manage commercial property, primarily in New Jersey, New York and the District of Columbia. Willett has managed, controlled or owned a commercial portfolio of over 2 million square feet of primarily Class A and Class B multi-tenanted office space and retail space. (Source: Internal unaudited Willett information). Willett has completed 26 property purchase or sale transactions in the past 20 years, with a total value of over US$650 million. (Source: Internal unaudited Willett information). These properties had an aggregate acquisition cost of circa US$247 million and aggregate gross proceeds of circa US$408 million. The gross capital gain (defined as the excess of sale price over acquisition price) from these disposals amounts to circa US$161 million, which is equivalent to approximately 65% profit on cost. Through an investment vehicle, Willett was also involved as a minority partner in Radiant Ventures I, LLC in respect of the acquisition and subsequent breakup of a substantive property portfolio acquired for approximately $176 million and with a subsequent aggregate disposal value of over $230 million. (Source: Internal unaudited Willett information). At Willett, Frank J. Kenny is responsible for overseeing all of the property activities including acquisitions, lettings, refurbishments and disposals. Willett is currently taking advantage of a strong investment market in the United States to sell a sizeable portion of its portfolio. WKN WKN was founded in 1995 by William Nowlan after his departure from Irish Life Assurance p.l.c. to provide general property asset management consultancy services. In the period up to 2003, the principal investment focus of WKN in Ireland was on interpreting property market trends and providing property investment advice although investment decisions were ultimately the responsibility of the client. Examples of transactions the company advised on are: (i) the acquisition of Lansdowne House, a commercial office block based in Dublin 4, for €12 million in 1996 and subsequent sale of the same building in 1999 for €30 million, representing a profit on cost of approximately 150%; and (ii) the 70
  • acquisition of Dartmouth House, a commercial office block based in Dublin 2, for €1 0 million in 2002 and subsequent sale in 2006 for €14 million, representing a profit on cost of approximately 40% (Source: internal unaudited WKN information). Returns on these investments benefitted from prevailing market conditions at the time they were made. The sale of Dartmouth House in 2006 reflected WKN's shift in investment focus in Ireland from acquisitions to disposals which had taken place in 2004. This shift in focus had earlier been reflected in WKN's role in 2004 in advising Thomas Crosbie Holdings, a leading media group, on the sale of obsolete printing works and offices in Cork city centre for €55 million in 2004 and more recently in advising a client on the sale of Dudley's Field, a 3 acre site in Dundrum, to a developer for €19 million in 2005. In 2012 this same property was reacquired by the same client for €1.3 million, with WKN as investment adviser (Source: internal unaudited WKN information). The reacquisition of Dudley's Field in 2012 was reflective of a renewed focus on acquisition advice on Irish assets which WKN had initiated in 2010. WKN advised clients in respect of the acquisition of two office blocks in the IFSC in 2010 and 2012. In recent years under the leadership of its management team WKN has grown rapidly to become one of the leading property asset managers in Ireland. In response to the decline of the Irish property market, the business expanded its scope of services to include valuation, business planning and property receivership services. It has provided receivership and distressed borrowing related advisory services to a wide range of Irish and international financial institutions including NAMA, AlB Bank, Bank of Ireland, Ulster Bank, Danske Bank, KBC, Investec and Bank of Scotland. Its receivership team has to date been appointed to 40 receiverships relating to over 55 properties. These receiverships have enhanced WKN's relationships with key financial institutions in the Irish market. WKN has been appointed by NAMA as Property Asset Manager to the Receiver of the Liam Carroll Connection Portfolio. This is one of the most significant property receiverships in Ireland, consisting of circa 900 residential units, 180,000 square feet of retail space, 280,000 square feet of office space and 45 acres of development land in Dublin spread across 15 sites. As part of this appointment WKN has prepared business plans for each asset. The active management of the portfolio and ongoing implementation of these business plans requires, inter alia, the selection and management of specialist multi-disciplinary teams, the management of significant contract tendering and contractor appointment processes, complex negotiation with tenants, the establishment of appropriately structured property management arrangements, the resolution of statutory compliance problems and the management and execution of asset disposals. All of the members of the Management Team except Frank J. Kenny are directors ofWKN. Kevin Nowlan joined WKN as chief executive officer in 2005 and has been a director of WKN since joining, with the exception of the period from June 2010 to January 2013, when he was employed by NAMA as senior portfolio manager. Frank O'Neill joined WKN in June 2006, became a director in 2008 and was appointed Chief Operations Officer in 2011. In addition to the members of the Management Team, WKN employs 26 professional staff and 4 administrative staff. The professional staff includes surveyors, accountants, an engineer, architects and a consultant lawyer. These employees have extensive and varied experience. The senior staff, in particular, have worked largely for companies and institutions engaged in investing and/or managing commercial property. In addition, WKN's multi-disciplinary team has coordinated and managed the delivery of numerous complex construction and development projects on behalf of clients. The past performance of the Management Team is not indicative, or intended to be indicative, of the future performance or results of the Company and should not be construed as an indication of the future performance of the Management Team, the Investment Manager and/or the Company or any investment opportunity to which this Prospectus relates. Past performance of the Investment Manager and members of the Management Team is not a reliable indicator of, and cannot be relied upon as a guide to, the future performance of the Company or the Investment Manager. The Company will not make the same investments reflected in the track record and performance data included herein. For a variety of reasons, the comparability of the track record and performance data to the Company's future performance is by its nature very limited. Without limitation, results can be positively or negatively affected by market conditions beyond the control of the Company or the Investment Manager, which may be different in many respects from those that prevail at present or in the future, with the result that the performance of investment portfolios originated now may be significantly different from those originated in the past. Prospective investors should be aware that any investment in the Company is speculative, involves a high degree of risk, and could result in the loss of all or substantially all of their investment. For further information, see the risks described in Part II (Risk Factors). 71
  • 2. REIT INVESTMENT MANAGEMENT AGREEMENT The REIT Investment Management Agreement entered into by the Company and the Investment Manager shall govern the investment management services to be provided to the Company by the Investment Manager. Investment Policy The Company will invest in assets identified by the Investment Manager in accordance with the Company's investment policy. Authority The Investment Manager has discretionary authority to enter into transactions for and on behalf of the Company subject to certain reserved matters which require the consent of the Board of the Company. Such reserved matters include the (i) acquisition of a property investment; (ii) disposal of a property investment or the entry into any option to dispose of a property investment where the aggregate consideration payable in respect of such disposals is in excess of €1 0 million; (iii) surrender of leases where the rent referable to the relevant lease is greater than 25% of the aggregate rental income of the relevant property or 5% of the aggregate rental income of the Company; (iv) acquisition or entering into any agreement to acquire any property investment where the acquisition is proposed to be made through a joint venture or co-investment structure; (v) arrangement of any financing or refinancing, or related matters including hedging or use of derivatives; (vi) capital expenditure on a property investment in excess of €5 million; (vii) entering into any pre-funding agreement; and (viii) engagement or instruction on any valuations on a basis other than the RICS Red Book or other guidance published by the RICS. The Company has put in place a corporate governance structure to ensure that any reserved matters which require the consent of the Board are approved at a meeting attended by an appropriate number of Directors. Term and Termination The REIT Investment Management Agreement has an initial term of five years and thereafter will automatically continue for consecutive three year periods, unless terminated on twelve months' notice by either party in accordance with the terms further described in paragraph 11.1 of Part XV (Additional Information). A twelve month notice period shall be applicable in respect of both the Company and the Investment Manager with the earliest termination (without cause) being at the end of the initial five year period (and at the end of every subsequent three year period). Matters relating to insolvency, breach and key persons provide immediate termination entitlements. In addition, the Directors and the Investment Manager currently intend that, at the expiry of the initial five year term of the REIT Investment Management Agreement and subject to the EPRA NA V of the Company then being not less than €650,000,000, the Company and the Investment Manager would seek that individuals comprising the Management Team of the Investment Manager would become an internal resource within the Company and in lieu of a continued engagement of the Investment Manager by the Company. The terms under which such engagement may occur will be a matter to be agreed at the relevant time; and the Directors and the Investment Manager would not anticipate such terms including any material increased costs for the Company as a result, or involving the payment of any consideration or other amounts in connection with such engagement other than salaries and benefits and/or fees on market commercial terms in connection with the services provided by the relevant individuals and any regulatory costs and minimum capital requirements that may be required as a result of such direct engagement. However, there is no certainty that such an arrangement will occur. Base Fee The Base Fee in respect of each Quarter will be calculated by reference to the sum of: (i) 0.25% of that portion of EPRA NAV (excluding any uninvested Net Proceeds) at the end of that Quarter that is less than or equal to €450,000,000, (ii) 0.2% of that portion ofEPRA NAV (excluding any uninvested Net Proceeds) at the end of that Quarter that is greater than €450,000,000 but less than or equal to €600,000,000, (iii) 0.15% of that portion ofEPRA NAV (excluding any uninvested Net Proceeds) atthe end of that Quarter that is greater than €600,000,000, and (iv) 0.125% of any uninvested Net Proceeds at the end of that Quarter. The Base Fee will be paid to the Investment Manager quarterly in arrears, with the exception of the fee for the periods ending on 31 March 2014 and 30 June 2014, which shall be paid in advance to cover initial diligence and deal costs incurred by the Investment Manager. The base fees paid in advance will be calculated based on 0.125% of 72
  • Net Proceeds raised per period and for the period ended 3I March 2014 will be increased pro-rata to reflect the period from Admission to 3I December 2013. Should any ofthe Net Proceeds be invested in the period to 3I March 2014 or 30 June 20 I4, any incremental fees due from the fee arrangements set out above in addition to those monies already advanced to the Investment Manager will be paid quarterly in arrears. Performance Fee The Performance Fee has been designed to incentivise and reward the Investment Manager for generating returns to Shareholders and to outperform the Reference Index annual return. The return to Shareholders in an Accounting Period is the sum of the change in the EPRA NA V per Ordinary Share and the total dividends per Ordinary Share that are declared in the Accounting Period (adjusted to exclude the effects of any issuance of Ordinary Shares during that Accounting Period) ("REIT IMA Shareholder Return"). The Performance Fee is calculated annually on a per Ordinary Share basis as to 50% by reference to REIT IMA Shareholder Return and as to 50% by reference to outperformance of the Reference Index. REIT IMA Shareholder Return Performance Fee Following the end of each Accounting Period, the Investment Manager shall be entitled to be paid by the Company a fee equal to 50% of the lesser of: (I) (i) IS% of the excess of REIT IMA Shareholder Return over a I 0% annual return hurdle up to a IS% annual return hurdle Jllilli (ii) 20% of the excess ofREIT IMA Shareholder Return over a IS% annual return hurdle; and (2) 20% of the excess of the year-end EPRA NA V per Ordinary Share (which is adjusted to include total dividends declared in the Accounting Period and adjusted to exclude the effects of any issuance of Ordinary Shares during that Accounting Period) over the relevant high watermark per Ordinary Share, provided always that the numerical results of both (I) and (2) above are each greater than zero for the Accounting Period in question (the "REIT IMA Shareholder Return Performance Fee"). The annual return hurdles reset annually to IO% and IS% (as applicable) of the previous Accounting Period's closing EPRA NA V per Ordinary Share. The relevant high watermark in each Accounting Period is the highest EPRA NAY per Ordinary Share (adjusted to include total dividends declared during the most recent Accounting Period in which a Performance Fee was payable (the "reference Accounting Period") and adjusted to exclude the effects of any issuance of Ordinary Shares during the reference Accounting Period) achieved in the reference Accounting Period or, if greater, the gross proceeds of the Issue plus further cash and non-cash issues of Ordinary Shares (excluding any issues of Performance Fee Shares) calculated on a per Ordinary Share basis, as at the end of the Accounting Period in respect of which the Performance Fee is calculated. Relative Performance Fee In addition to the REIT IMA Shareholder Return Performance Fee, the Investment Manager is entitled to a Relative Performance Fee to incentivise and reward the Investment Manager for generating a total property return in excess of the Reference Index. The published methodology employed by IPD for calculating total property return excludes properties that are purchased, sold or in the course of development during the measurement period. IPD publishes the Reference Index on an annual basis in accordance with its published methodologies and formulae. IPD has agreed with the Company to calculate the total property return of the Company's Property Portfolio for each Accounting Period on the same basis and applying the same methodologies and formulae as are used by IPD to determine the Reference Index. IPD will notifY the Company and the Investment Manager of the total return of the Company's Property Portfolio and the total return of the Reference Index during each Accounting Period. The total return of the Company's Property Portfolio in each Accounting Period as calculated by IPD will be expressed as both a monetary amount (the "Portfolio Return") and as a percentage return (the "Portfolio Percentage Return"). The 73
  • difference between the total percentage return of the Reference Index and the Portfolio Percentage Return for an Accounting Period (the "Relative Performance Percentage"), if positive, will be used to determine the outperformance of the Portfolio Return. A monetary amount (''the Relative Outperformance Figure") will be calculated by multiplying the Portfolio Return by the percentage that the Relative Performance Percentage represents of the Portfolio Percentage Return. The following hurdle must also be overcome before a Relative Performance Fee becomes payable in respect of any Accounting Period (each a "Reference Period"): The Relative Performance Percentage relating to the First Accounting Period must be carried forward and aggregated with the Relative Performance Percentage in the immediately following Accounting Period. The resulting percentage figure must, in tum, be carried forward and aggregated with the Relative Performance Percentage in each successive Accounting Period preceding a Reference Period. A Relative Performance Fee will only be payable in respect of a Reference Period if and only to the extent that the Relative Performance Percentage in the Reference Period as reduced by the amount of any negative Relative Performance Percentage so carried forward itself results in a positive figure. Subject to overcoming this hurdle, the Relative Performance Fee is calculated at a rate of 50% of 30% of the Relative Outperformance Figure in each Reference Period. The derived Performance Fee payable on a per Ordinary Share basis under REIT IMA Shareholder Return Performance Fee is then multiplied by the number of Ordinary Shares in issue at the year-end (but excluding, for that Accounting Period only, any Ordinary Shares issued during that Accounting Period), thereby increasing the multiplier for future years if any new Ordinary Shares are issued. EPRA-NA V will be a NA V calculated on the basis specified for calculations of "EPRA NA V" in guidelines issued by EPRA (August 2011 version only, unless otherwise agreed between the Company and the Investment Manager). In any calculation of such NA V as at a Valuation Point the value of the Property Portfolio taken into account in such calculation shall be the Open Market Value of the Properties at that Valuation Point and "NAV" as at the date of Admission shall be the amount of the Investment Equity (net of costs and expenses incurred by the Company in respect of the Admission and Placing). There is no maximum fee under the REIT Investment Management Agreement. The REIT Investment Management Agreement contains provisions to adjust the Performance Fee in certain circumstances. These circumstances are limited to amendments to take account of corporate actions which entail changes to the Company's share capital, such as consolidations, sub-divisions or bonus issues or other restructurings or reorganisations affecting its share capital. There are no such adjustment provisions in respect of the Base Fee. The Performance Fee will be payable in Ordinary Shares, rounded down to the nearest whole number, at a price per Ordinary Share equal to the Average Closing Price (unless restricted by law or other regulation or if the Company otherwise determines that it is unable to issue or reissue Ordinary Shares in exchange for the Performance Fee, in which case it will be paid in cash) and will be subject to the following lock-in provisions (during which time there will be no disposal of the relevant portion of the Performance Fee Shares by the Investment Manager): -one third of the Performance Fee Shares (or cash) will be released from lock-in after 12 months; -one third of the Performance Fee Shares (or cash) will be released from lock-in after 24 months; and -one third of the Performance Fee Shares (or cash) will be released from lock-in after 36 months, unless a Lock-In Termination Event occurs, in which case they may be released earlier. The provisions permitting releases from the lock-in arrangements will be suspended if EPRA NA V falls below the gross proceeds of the Issue and any other subsequent equity issues excluding issues ofPerformance Fee Shares. 74
  • After delivery of an invoice from the Investment Manager setting out the Investment Manager's statement of the Performance Fee the Company may agree it, in which case the Performance Fee shall become due and payable twenty business days after the date of the invoice. If the Company disputes the invoice by giving notice in writing to the Investment Manager within ten business days of receiving it, the parties shall negotiate in good faith to resolve the dispute. If this fails to resolve the matter a dispute resolution mechanism shall apply with a determination by an independent expert by reference to the audited accounts of the Company in respect of the relevant Accounting Period. The Investment Manager shall use the Performance Fee due to it to subscribe for Ordinary Shares, subject to certain limited exceptions. The Company's liability to pay the Performance Fee in respect of any Accounting Period shall be satisfied by the release by the Investment Manager of the sum due to it as that Performance Fee in consideration for the allotment and issue by the Company to the Investment Manager of such number of Performance Fee Shares, rounded down to the nearest whole number, as is determined by dividing the relevant Performance Fee by the Average Closing Price for the applicable period relating to that issue of Performance Fee Shares (such Average Closing Price being determined by reference to the period of twenty days prior to the business day immediately preceding the date of the invoice from the Investment Manager in respect of such Performance Fee). Under the REIT Investment Management Agreement the Investment Manager is entitled to recover certain 'excluded costs' incurred by the Investment Manager that are paid to third parties. These excluded costs include advisory costs relating to valuations, rent review, disposals agency, legal fees, debt collection, specialist property management services of complex multi-united developments and administrative costs. Policies and Procedures Manual A Policies and Procedures Manual has been adopted by the Directors to document those procedures which will govern the day-to-day operations of the Company. The Policies and Procedures Manual sets out financial reporting and other procedures and policies of the Company and addresses the respective authority levels and responsibilities of the Company and the Investment Manager, the transactions which are the responsibility of either the Company or the Investment Manager, the authorisations required in order to effect those transactions and the necessary controls to ensure that appropriately authorised individuals in either the Investment Manager or the Company can approve a transaction. Delegation In order to ensure that the REIT's strategy is delivered effectively and efficiently, the Investment Manager must seek the Board's approval of any acquisition of property. Services The services to be provided by the Investment Manager include the following: (i) Property Services - the property services will include services relating to property acquisition (including, to advise on and actively seek to identify and thereafter (subject to Board approval, as appropriate), negotiate the acquisition of appropriate properties having regard to the Company's investment policy, property management (for example, to select, appoint and manage specialist property management service providers) and portfolio management services (for example, to advise on all aspects of the property portfolio including disposals, redevelopment and refurbishment); (ii) Accounting - the accounting services will include such roles as providing to the auditors the annual accounts for the purposes of the annual audit. The Investment Manager will procure and provide that certain administrations services be carried out relating to Investor relations, listing rule compliance, corporate governance compliance, etc.; (iii) Regulatory- to provide the Company with services required under AIFMD; and (iv) Any other services as may arise that may be required by the Company and agreed by the Company to be provided by the Investment Manager. The Company has agreed to the delegation by the Investment Manager of certain investment management functions. 75
  • Key persons If any of Kevin Nowlan, William Nowlan, Frank J. Kenny or Frank O'Neill ceases to be significantly involved in the delivery of the services by the Investment Manager pursuant to the REIT Investment Management Agreement, the Investment Manager agrees to take all reasonable steps to ensure that he is replaced by a person of materially similar experience who is approved by the Company. If the Investment Manager has not replaced Kevin Nowlan, William Nowlan, Frank J. Kenny or, as the case may be, Frank O'Neill by a person of materially similar experience who is approved by the Company within 6 months (or a longer period agreed by the parties) of him ceasing to be involved in the delivery of the relevant services, the Company may terminate the REIT Investment Management Agreement. Reporting The Investment Manager will procure the provision of reports for the Company: (i) to comply with its obligations under the ISE and UKLA Listing Rules; (ii) to comply with accounting standards adopted by the Company; (iii) to produce the Company's financial statements (including relevant EPRA NAY updates) for the purposes of the completion of its annual audit; and (iv) any other reporting requirements of the Company as may be determined from time to time. Limits of liability The Investment Manager is required to maintain at its own cost appropriate professional indemnity insurance in an amount not less than €25 million for each and every claim under the REIT Investment Management Agreement until three years after the date of termination of the REIT Investment Management Agreement. Indemnities The Company shall indemnify the Investment Manager and its directors, officers and employees against any and all liabilities and properly incurred costs or expenses (excluding consequential or indirect Joss or damage) incurred by such person in the performance of its obligations under the REIT Investment Management Agreement or arising from any claim which is made against the Investment Manager in its capacity as the investment manager of the Company provided that such liabilities, costs or expenses do not relate to a matter in respect of which the Investment Manager has not acted in good faith and provided that the Investment Manager shall not be indemnified to the extent that such liabilities, costs or expenses have arisen as a result of the Investment Manager acting outside the scope of its authority (other than with the written consent of the Company) under the REIT Investment Management Agreement, or as a result of its negligence, fraud, wilful default, bad faith or recklessness or breach in the performance of its obligations under the REIT Investment Management Agreement or the Policies and Procedures Manual. The Investment Manager shall indemnify the Company, its Directors, officers and (if any) employees against any liabilities and properly incurred costs or expenses (excluding consequential or indirect loss or damage) arising as a result of the Investment Manager's negligence, fraud, bad faith, recklessness, breach, wilful default or breach of agreement by the Investment Manager in the performance of its obligations, under the REIT Investment Management Agreement. The Investment Manager shall indemnify the Company against any liabilities and properly incurred costs or expenses (excluding consequential or indirect loss or damage) arising as a result of the termination by the Company of the employment of any employee of the Investment Manager whose employment transfers to the Company on termination of the REIT Investment Management Agreement pursuant to the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003, provided such termination is effected within 30 days of the date on which the Company becomes aware of such transfer. 76
  • Standard of care The Investment Manager is to exercise the level of professional skill, care and diligence in relation to the perfonnance of its duties under this Agreement which would reasonably be expected from a manager experienced in the management of properties similar to the properties acting in accordance with the Good Estate Management Criteria. In any event the Investment Manager is to be liable for its breach of contract, its fraud, negligence, wilful default, recklessness and bad faith and that of its employees, delegates and agents. Board and Founder Group Subscription Pursuant to the Board and Founder Group Subscription Agreement, the Board and Founder Group will, conditional upon Admission, invest €3,560,000 in the Company through the subscription of 3,200,000 Ordinary Shares in the Company which together with the 400,000 Ordinary Shares beneficially held by William Nowlan at the date hereof, aggregate to a total investment by the Board and Founder Group of€3,600,000. Details of the subscription are set out in paragraph 11.3 of Part XV (Additional Information). The Board believes that this significant cash investment in the Company provides alignment of their interests of the Board and Founder Group with those of the Company's other Shareholders. 3. CONFLICTS OF INTEREST-INVESTMENT MANAGER AND MANAGEMENT TEAM The Investment Manager is wholly-owned and controlled by WKN and by Frank J. Kenny. All members of the Management Team are also directors of the Investment Manager. William Nowlan is also a director of the Company. The Investment Manager has agreed that, during the tenn of the REIT Investment Management Agreement, it will not, and will procure that none of its group companies or affiliates or Investment Manager employees or owners will (i) be involved in any capacity in the launch or operation of another REIT or other property investment vehicle or fund involved in a similar area of business as the Company, or in any other area of business, in each case without approval of the Board, (ii) acquire or act for another party to acquire a property investment that is within the parameters of the investment policy of the Company, include all non-income producing property assets of any value and all income producing property assets with a market value or purchase price of at least €10 million, other than where the Company has had the opportunity to invest in a particular property, and has declined to do so and has consented to the party or employee pursuing the opportunity or (iii) advise any investor in competition with the Company for the acquisition of an investment property. All possible or actual conflicts of interest will be disclosed in writing by the Investment Manager to the Board. These provisions shall not apply to any dealings or interest in property held as of the date of the REIT Investment Management Agreement. William Nowlan and Frank J. Kenny have each provided an undertaking to the Company, in each case, that they will not: (i) be involved in any capacity in the launch or operation of another REIT or other property investment vehicle or fund involved in a similar area of business as the Company, or in the launch or operation of a REIT or other property investment vehicle or fund in a different area of business, without approval of the Board (such approval not to be unreasonably withheld), (ii) acquire or act for another party to acquire a property investment that is within the parameters of the investment policy of the Company, to include all income producing property assets of any value and non-income producing property asset with a market value or purchase price of at least €1 0 million, other than where the Company has had the opportunity to invest in a particular property, and has declined to do so and has consented to William Nowlan or Frank J. Kenny as the case may be pursuing the opportunity or (iii) advise any investor in competition with the Company for the acquisition of an investment property. All possible or actual conflicts of interest will be disclosed in writing by William Nowlan or Frank J. Kenny, as the case may be, to the Board. These provisions shall not apply to any dealings or interest in property held as of the date of the REIT Investment Management Agreement. Board and Founder Group The members of the Board and Founder Group have agreed that, subject to certain customary exceptions, they shall not sell any Ordinary Shares prior to the first anniversary of Admission. Further details of these arrangements are described in paragraph 11.4 of Part XV (Additional Information). See paragraph 11.1 of Part XV (Additional Information) for further infonnation on the REIT Investment Management Agreement and the Management Team's undertakings. 77
  • 4. OTHER DIRECTORSHIPS AND PARTNERSHIPS Save as set out below, members of the Management Team have not held any directorships of any company, or been a partner in a partnership, at any time in the 5 years prior to the date of this Prospectus. Management Team member Current Directorships Previous Directorships Kevin Nowlan Nowlan Property Limited Nowlan Property REIT Management Limited William Nowlan Nowlan Property Limited Nowlan Property REIT Management Limited Hsil Properties (Self Storage) Ireland Limited Terviso Limited U-Store-It (Services) Limited U-Store-It (Construction) Limited U-Store-It Limited U-Store-lt (Residential) Limited U-Store-lt (Holdings) Limited Dublin Self Storage Limited Core Asset Management Limited Hibernia REIT p.l.c. Focus Ireland Limited Focus Housing Association Limited Frank J. Kenny Willridge Advisors LLC 3 7 Purchase Street LLC Willnew Holdings LLC Willnew Advisors LLC Willwood Holdings LLC Willcon Holdings LLC Willcon Advisors LLC Willgreen Holdings LLC Willgreen Advisors LLC Willcap Holdings LLC Willcap Advisors LLC Willschool Holdings LLC Willschool Advisors LLC Willford Holdings LLC Willford Advisor LLC Milford Post Road LLC Willroad Holdings LLC Willroad Advisors LLC Willmarc Holdings LLC Willmarc Advisors LLC 1979 Marcus A venue Associates LLC 1979 Marcus A venue LLC Willben Holdings LLC Willben Advisors LLC 33 Benedict LLC 33 Benedict Place LLC Willett Properties LP Flagstone Properties, Inc Willcity Holdings LLC Willcity Advisors LLC Willcity Associates LLC Willwest Holdings LLC Will west Advisors LLC Will chester Holdings LLC Willsquare Holdings LLC Willsquare Advisors LLC Willrye Holdings LLC Willrye Advisors LLC Willrose Holdings LLC Frank O'Neill Nowlan Property Limited Nowlan Property REIT Management Limited Oneilland Limited Hibernia REIT Limited 78
  • Within the period of5 years preceding the date of this Prospectus, none of the members of the Management Team: has had any convictions in relation to fraudulent offences; has been associated with any bankruptcy, receivership or liquidation while acting in the capacity of a director or senior manager (who is relevant to establishing that a company has the appropriate expertise and experience for the management of that company); or has received any official public incrimination and/or sanction by any statutory or regulatory authorities (including designated professional bodies) or has been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of a company. 79
  • PART IX: DIRECTORS AND CORPORATE GOVERNANCE 1. DIRECTORS The business of the Company is managed by the Directors, each of whose business address is Hibernia REIT p.l.c., Marine House, Clanwilliam Place, Dublin 2, Ireland. The Directors and their ages and positions are as follows: Name Age Position Date appointed Daniel Kitchen 61 Independent non-executive Chairman 23 August 2013 Colm Barrington 67 Independent non-executive Director and Senior Independent Director 23 August 2013 Terence O'Rourke 59 Independent non-executive Director 23 August 2013 Stewart Harrington 70 Independent non-executive Director 23 August 2013 William Nowlan 67 Non-executive Director 13 August 2013 There are no executive Directors. Briefbiographical details of the Directors are as follows: Daniel Kitchen The Chairman, Daniel Kitchen (born: 23 April 1952) is currently the non-executive chairman of Workspace Group p.l.c. and a non-executive director of LXB Retail Properties p.l.c., as well as the ISE-nominated director on the Irish Takeover Panel. Previously, he was finance director of Green Property p.l.c. from 1994 to 2002, the Irish Government-appointed chairman of Irish Nationwide Building Society, deputy chief executive of Heron International p.l.c. from 2003 to 2008 and a non-executive director of Kingspan Group p.l.c. and Minerva p.l.c. Daniel Kitchen will bring the benefit of his expertise and the experience gained across a variety of property sector, finance and public company roles to his chairmanship of the Board. Colm Barrington Colm Barrington (born: 1 January 1946) is currently chief executive officer and a director of Fly Leasing Limited, the NYSE listed and Irish based aircraft leasing company, non-executive chairman of Aer Lingus Group p.l.c. and the senior independent director of IFG Group p.l.c .. Previously he was managing director of Babcock & Brown Limited in Ireland, president of GE Capital Aviation Services Limited, chief operating officer of GPA Group p.l.c. and chief executive of GPA's Capital division. Colm Barrington's senior executive and non-executive board roles will add significant experience to the Board from outside the property sector and within the context of a public company. Terence O'Rourke Terence O'Rourke (born: 4 October 1954) is currently chairman of Enterprise Ireland, a non-executive director of The Irish Times, a board member of the Chartered Accountants Regulatory Board and a council member of the Irish Management Institute. Previously, he was managing partner of KPMG Ireland from 2007 to 2013, president of The Institute of Chartered Accountants in Ireland and chairman of the Leinster Society of Chartered Accountants. He was also a member ofthe Global Board and the EMA Board ofKPMG International from 2007 to 2013 and of the Global Executive Team of KPMG International from 2008 to 2013. Terence O'Rourke's professional accounting and management background and experience over many years in advising clients across a range of sectors, will contribute to the balance of skills, experience and knowledge of the Board. 80
  • Stewart Harrington Stewart Harrington (born: 16 March 1943) is currently a director of Killeen Properties and a non-executive director of BWG Group, Stafford Holdings Limited and St. Vincent's Healthcare Group. He has gained extensive knowledge and experience of the Irish property market gained over many years in a variety of roles. He was a partner in Jones Lang Wootton (now Jones Lang LaSalle), a founding partner of Harrington Bannon Chartered Surveyors (now BNP Paribas Real Estate Ireland), and managing director of Dunloe Ewart Limited (formerly known as Dunloe House Group p.l.c.). Stewart Harrington was also previously a non-executive director ofCIE (C6ras Iompair Eireann, Ireland's national public transport provider), ESB (the Electricity Supply Board, Ireland's premier electricity utility) and the National Development Finance Agency. William Nowlan William Nowlan's (born: 19 February 1946) biographical details are summarised in paragraph 1.2 of Part VIII (Nowlan Property REIT Management Limited and the REIT Investment Management Agreement). William Nowlan's directorships are summarised in paragraph 4 of Part VIII (Nowlan Property REIT Management Limited and the REIT Investment Management Agreement). William Nowlan is the chairman and investment director of the Investment Manager and the father of Kevin Nowlan, who is also a director and chief executive officer of the Investment Manager. There are no family relationships or other relationships between any of the Directors, as set out in the UK Code, which could be perceived to compromise the independence of Daniel Kitchen, Calm Barrington, Terence O'Rourke or Stewart Harrington. Under the Articles, one third of the Directors must retire by rotation each year and may seek re-election by the Shareholders. Notwithstanding the arrangements under the Articles, in keeping with the UK Code and best practice in corporate governance, all Directors intend to seek re-election at every annual general meeting of the Company. The Company Secretary of the Company is Castlewood Corporate Services Limited t/a Chartered Corporate Services. 2. CONFLICTS OF INTEREST Section 194 of the 1963 Act requires each Director who is in any way, either directly or indirectly, interested in a contract or proposed contract with the Company to declare the nature of his interest at a meeting of the Directors. The Company keeps a record of all such declarations which may be inspected by any Director, secretary, auditor or member of the Company at the registered office of the Company. The Chairman and each ofColm Barrington, Terence O'Rourke and Stewart Harrington are independent ofthe Investment Manager. William Nowlan is a director of the Investment Manager and a member of the Management Team, as well as being a Director. William Nowlan has also provided an undertaking to the Company in the form set out in paragraph 3 of Part VII (Nowlan Property REIT Management Limited and the REIT Investment Management Agreement). Subject to certain exceptions, the Articles generally prohibit Directors from voting at Board meetings or meetings of committees of the Board on any resolution concerning a matter in which they have a direct or indirect interest which is material or a duty which conflicts or may conflict with the interests of the Company. Directors may not be counted in the quorum in relation to resolutions on which they are not entitled to vote. See paragraph 6.2 of Part XV (Additional Information) for a summary of the Articles and details of the exceptions to the prohibition referred to above. William Nowlan accordingly will not be permitted to vote on any matter at Board level relating to the Investment Manager. In addition, appropriate Board procedures will also be implemented as required to address any potential conflict which may arise by virtue of William Nowlan's position as a Director and investment director of the Investment Manager. 81
  • Under the Articles, one third of the Directors must retire by rotation each year and may seek re-election by the Shareholders. Notwithstanding the arrangements under the Articles, in keeping with the UK Code and best practice in corporate governance, all Directors intend to seek re-election at every annual general meeting of the Company. The Directors also consider that the interests of the Company and the Investment Manager are aligned via the incentivisation structure within the REIT Investment Management Agreement. The Directors consider that the fact that William Nowlan and Kevin Nowlan are related does not give rise to a conflict not addressed by any of the above procedures and provisions. However, should any conflict emerge in relation to this or any other matter, the Directors believe that sufficient provisions in the Articles, and corporate governance procedures, exist in the Company to address it. To the extent any matter arises that is unforeseen at this point, additional procedures or provisions that may be required shall be put in place. 3. INTERESTS OF THE DIRECTORS IN SHARE CAPITAL As at 5 December 2013 (being the latest practicable date prior to the issue of this Prospectus) William Nowlan holds 399,994 Ordinary Shares, representing over 99.99% of the issued share capital of the Company and is beneficially entitled to the other six Ordinary Shares in issue. Pursuant to the Board and Founder Group Subscription Agreement, certain Directors will, conditional upon Admission, invest in the Company through the subscription of 1,600,000 Ordinary Shares. Accordingly, effective and conditional on Admission, the Directors are expected to hold Ordinary Shares on Admission as follows: Ordinary Shares Director % of Company on Admission Daniel Kitchen 100,000 0.03% Stewart Harrington 100,000 0.03% Colm Barrington 800,000 0.22% Terence O'Rourke 100,000 0.03% William Nowlan 500,000 12 0.14% 4. LOCK-IN DEED Subject to certain exceptions, the members of the Board and Founder Group and the Company have agreed that the members of the Board and Founder Group shall not sell any Ordinary Shares prior to the first anniversary of Admission. The Investment Manager has also agreed to lock-in arrangements in respect of Performance Fee Shares that may be issued under the terms of the REIT Investment Management Agreement as described in paragraph 2 of Part VIII (Nowlan Property REIT Management Limited and the REIT Investment Management Agreement). 5. REMUNERATION ARRANGEMENTS As Chairman, Daniel Kitchen will receive a fee of €100,000 per annum subject to annual review by the Board. Colm Barrington, Terence O'Rourke and Stewart Harrington will each receive a fee of €50,000 per annum as Directors subject to annual review by the Board. These fees cover the Directors' various roles on committees of the Board. 12 Assuming no exercise of the Over-allotment Option. 82
  • 6. DIRECTORS' LETTERS OF APPOINTMENT The Directors do not have service contracts but do have letters of appointment which reflect their responsibilities and commitments. Each Director has the same general legal responsibilities to the Company as any other Director and the Board as a whole is collectively responsible for the overall success of the Company. The Directors were appointed for an initial term of 3 years, commencing on 23 August 2013. The Company may lawfully terminate a Director's appointment with immediate effect in certain circumstances, including where a Director has breached the terms of his letter of appointment and no compensation would be payable to such Director in such event. In addition to their general legal responsibilities, the Directors shall have responsibility for the Company's strategy, performance, financial and risk control and personnel. 7. OTHER DIRECTORSHIPS AND PARTNERSHIPS Save as set out below, the Directors have not held any directorships of any company, other than the Company, or been a partner in a partnership, at any time in the 5 years prior to the date of this Prospectus. Notwithstanding other directorships, the Company is satisfied, as required by the UK Code, that all of the Directors will have sufficient time to allocate to the Company to discharge their responsibilities effectively. Director Current Directorships Previous Directorships Daniel Kitchen Hibernia REIT p.l.c. Strathspey Limited Irish Takeover Panel Key Capital Real Estate Limited LXB Retail Properties pic St. Patrick's University Hospital Workspace Group pic Irish Nationwide B.S. Quattrocentro Limited Kingspan Group pic Minerva pic Colm Barrington Aer Lingus Group Public Limited Company Aer Lingus Limited Amber Aircraft Leasing Aphrodite Aviation Ltd. Apicius Leasing I B.V. Arden Aviation Australia Pty Ltd Artemis Aviation Limited B&B Air Acquisition 3151 Leasing Limited B&B Air Acquisition 3237 Leasing Limited B&B Air Acquisition 34953 Leasing Limited B&B Air Acquisition 34956 Leasing Limited B&B Air Acquisition 403 Leasing Limited B&B Air Funding 27974 Leasing Limited B&B Air Funding 27974 Mezzanine Leasing Limited B&B Air Funding 28042 Mezzanine Leasing Limited B&B Air Funding 28595 Leasing Limited B&B Air Funding 29052 Leasing Limited B&B Air Funding 29330 Leasing Limited (Formerly known as B&B Air Funding 34896 Leasing Limited) B&B Air Funding 29330 Mezzanine Leasing Limited (f/k/a B&B Air Funding 34896 Mezzanine Leasing Limited) B&B Air Funding 733 Leasing SARL A&B Credit Limited A&B Finance Limited Amhem Company, Limited B&B Air Funding 29052 Mezzanine Leasing Limited B&B Air Funding 34898 Mezzanine Leasing Limited B&B Air Funding 34899 Mezzanine Leasing Limited Babcock & Brown Rail (Ireland) Limited BBGP Ireland Holdings Limited Breda Company, Limited Ede Company, Limited Eircom Group Limited Eircom Limited ERC ESOT Services Limited (Formerly BCM ESOT Services Limited) ERC Ireland Equity SPC (Formerly BCM Ireland Equity SPC) ERC Ireland Finance Limited (Formerly B&B Ireland Group Limited) ERC Ireland Group Limited (Formerly B&B Ireland Group Limited) ERC Ireland Holdings Limited (Formerly B&B Ireland Holdings Limited) ERC Ireland Preferred Equity Limited (Formerly 83
  • Director Current Directorships Previous Directorships B&B Air Funding 747 Leasing SARL B&B Air Funding 888 Leasing Limited Babcock & Brown Air Acquisition I Limited Babcock & Brown Air Funding I Limited Babcock & Brown JET- I Limited Baker & Spice Aviation Ltd Balfour Aviation Ltd Brookdell Limited Caledonian Aviation Holdings Ltd Callista Aviation Ltd Cardamon Ltd Carnelian Aircraft Leasing Central Aviation Australia Pty Ltd Churchill A viaton Ltd Clementine Aviation Ltd Commercial Aviation Solutions Australia Pty Ltd (ex Novehill Proprietary Ltd) Coral Aircraft Holdings Limited Coral Aircraft One Leasing Limited (ex B&B Air Funding 34898 Leasing Limited) Coral Aircraft Three Limited Coral Aircraft Two (ex B&B Air Funding 34899 leasing Limited) Coronet Aviation Australia Pty Ltd Drake Aviation Ltd Eternity Aviation Ltd Fairydell Limited Fly Acquisition 37774 Leasing Pte. Ltd FLY Acquisition 37774 Owner Limited FLY Acquisition 39330 Limited Fly Acquisition II Fly Air Promotions Limited FLY Aircraft Holdings Eight Limited FLY Aircraft Holdings Eleven Limited FLY Aircraft Holdings Five Limited (ex JET- I 34898 Leasing Two Limited) FLY Aircraft Holdings Four Limited (ex JET- I 34896 Leasing Two Limited) FLY Aircraft Holdings Nine Limited Fly Aircraft Holdings One Limited (ex B&B Air Acquisition 2397 Leasing Limited) FLY Aircraft Seven Limited FLY Aircraft Holdings Six Limited (ex JET- I 34899 Leasing Two Limited) FLY Aircraft Ten Limited FLY Aircraft Holdings Three Limited (ex JET- I 25738 Leasing Limited) FLY Aircraft Holdings Twelve Limited Fly Aircraft Holdings Two Limited (ex B&B Air Acquisition 26IOI Leasing Limited) Fly Leasing Limited (f/k/a Babcock & Brown Air Limited) Fly Leasing Management Co. Limited (f!k/a Babcock & Brown Air Management Co. B&B Ireland Preferred Equity Limited) Fly-BBAM Holdings Limited Halodell (Formerly B&B Air Acquisition 373360 Leasing Limited) Helmond Company, Limited Iberbus Arena) Limited JET-I 25232 Owner Limited JET-I 25233 Owner Limited JET-I 25233 Leasing Limited JET-I 29945 Leasing Limited JET- I 29946 Leasing Limited JET- I 548 Leasing Limited Locomotive 1 Leasing Limited Tl T2 Finance Limited Tangara Canada Leasing Limited Tangara Japan Deposit Limited Tangara Japan Deposit No. 2 Limited Tangara Japan Leasing Limited Tangara US 2 Leasing Limited Tangara US 3 Leasing Limited Tangara US 4 Leasing Limited Tangara US 5 Leasing Limited Tangara US 6 Leasing Limited Tangara US Leasing Limited Train Financing Corporation Limited Valentia Telecommunications 84
  • Director Current Directorships Limited) FLY Peridot Holdings Ltd Fly Promotions Limited Fly Promotions Holdings Limited Fly-Z/C Aircraft Limited (ex B&B Air Acquisition 28560 Leasing Limited GAAM China No 1. Ltd GAHF (Ireland) Ltd Garnet Aircraft Leasing GOA Aviation Ltd Grace Aviation Ltd Great Wall Aviation Ltd Hermes Aviation Ltd Hibernia REIT p.l.c. Hobart Aviation Holdings Ltd IFG Group Public Limited Company Irish Sailing Association JET- I 2522 Leasing Limited JET- I 25232 Leasing Limited Jet-I 25232 Owner One Limited Jet-I 25233 Leasing Limited JET-1 2670 Leasing Limited JET-I 2728 Holdings Limited JET-1 2728 Leasing SARL JET -I 28042 Leasing Limited JET-I 2849 Leasing Limited JET -1 34293 Leasing Limited JET-I 34295 Leasing Limited JET -I 34898 Leasing Limited JET-I 34899 Leasing Limited JET-I 35089 Leasing Limited JET-I 35211 Leasing Limited JET-I 533 Leasing Limited JET -I 566 Leasing Limited Judbury Investments Pty Ltd Ker Yachting Ltd Kimolos Ltd Lemongrass Aircraft Leasing Pte. Ltd Marlborough Aviation Ltd Maryland Investment Company Limited Montgomery Aviation Ltd Mumbai Aviation Ltd Nelson Aviation Ltd Opal Holdings Australia Pty Opal Holdings Australia Pty Limited Opal Holdings Cayman Limited Opal Holdings II Australia Pty Limited Padoukios Ltd Palma Aviation Ltd Panda Aviation Ltd Quartz Leasing Pty Ltd Quilldell Limited Richoux Aviation Ltd Roosevelt Holdings Ltd 85 Previous Directorships
  • ---- Director Current Directorships Rush cutters Aviation Australia Pty Ltd Sage Ltd Sapphire Leasing Pty Ltd Shire Aviation Australia Pty Ltd Somerset Aviation Ltd Suffolk Aviation Ltd Surrey Aviation Ltd Sussex Aviation Ltd Temple Aviation Holdings Ltd Tournaline Aircraft Leasing Victoria Peak Aviation Ltd Wingate Aviation Ltd Previous Directorships Terence O'Rourke Hibernia REIT p.l.c. The Irish Times Limited Dublin Theatre Festival Limited Enactus Ireland The Children's Fund for Health Social Innovation Fund Ireland Limited The Institute for International and European Affairs Enterprise Ireland Stokes Kennedy Crowley & Co. Stokes Kennedy Crowley Legal SKC Nominees Harclon Holdings KPMG Pension Trustees Iditarod Limited Epperly Limited KPMG Corporate Finance Limited KPMG Audit Committee Institute Limited Verify Investment Company Stokes Bros. & Pim Ruby Investment Company Harcourt Motors KLegal Stokes Kennedy Crowley Legal Lancer Investment Company Twyford Investment Company KPMG Business Development Services Nixen Investment Company KPMG Publications Limited KPMG Consulting Limited Saltburn Company KPMG Pension & Actuarial Consulting Cargillside Company Chillmoor Investment Company Torbay Investment Company Peat, Marwick, Mitchell & Co KPMG People Strategies KPMG Personal Financial Services K TAX Limited Stokes Kennedy Crowley Financial Services KPMG Financial Services Klynveld Peat Marwick Goerdeler Kalgoorlie Limited KPMG Trade & Customs Limited Duarenga Company Waugh Holdings KPMG Peat Marwick The Crew Network Limited KPMG PPS Trustee Limited Ionat Investments Limited 86
  • Director Current Directorships Previous Directorships Verify Investment Company Stokes Kennedy Crowley KPMGTrust KPMG Services KPMG Trustees Limited Stewart Harrington Hibernia REIT p.l.c. Dubki Limited BWGGroup Killeen Properties Limited Stafford Holdings Limited Knockanore Properties St. Vincent's Healthcare Group Limited Aztec Properties Limited Pombury Limited National Development Finance Agency Within the period of5 years preceding the date ofthis Prospectus, and save as disclosed below, none ofthe Directors: has had any convictions in relation to fraudulent offences; has been associated with any bankruptcy, receivership or liquidation while acting in the capacity of a director or senior manager (who is relevant to establishing that a company has the appropriate expertise and experience for the management of that company); or has received any official public incrimination and/or sanction by any statutory or regulatory authorities (including designated professional bodies) or has been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of a company. Save as discussed above, there are no arrangements or understandings with major Shareholders, members, suppliers or others pursuant to which any Director was selected. 8. CORPORATE GOVERNANCE AND BOARD PRACTICES 8.1. Corporate Governance and Shareholders' Safeguards The Company is wholly committed to attaining the highest standards of corporate governance. Therefore, as at, and from, the date of Admission, the Company intends to be fully compliant with the relevant requirements and procedures as set out by the Irish Code, UK Code and AIC Code. To this end, the Board has established audit and nominations committees as described below composed of independent non-executive Directors. In addition, as and when the Company has employees, the Board will review the matter further with a view to complying with the requirements of the UK Code and AIC Code. The UK Code sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with Shareholders. Listed companies are required to report on how they have applied the main principles of the UK Code, and either to confirm that they have complied with the UK Code's provisions or, where they have not, to provide an explanation. Except as set out in paragraph 8.3 in relation to Board committees, the Company intends to comply with the UK Code. The Irish Code contains additional requirements to the UK Code for companies listed on the regulated market in Dublin. 8.2. Board of Directors The Board is responsible for providing governance and stewardship to the Company and its business. This includes establishing goals for management and monitoring the achievement of these goals. The Company has entered into the REIT Investment Management Agreement with the Investment Manager, whereby the Investment Manager is required to produce an annual business execution plan setting out the strategy for the provision of its services and the management of the properties held or acquired by the Company. For more information on the REIT Investment Management Agreement, see paragraph 11.1 of Part XV (Additional Information). 87
  • The Board oversees the performance of the Investment Manager and the Company's activities. The Investment Manager has discretionary authority to enter into transactions for and on behalf of the Company save for certain matters which require the consent of the Board. In such instance a Board meeting must be convened whereby a pre-determined quota of Directors must consent to the Investment Manager's course of action. The quota will vary depending on the value of the transaction. The Board is at all times free to offer ideas to the Investment Manager relating to the structure of a transaction so as to afford the Company the greatest value. Directors are expected to attend all Board meetings as well as all AGMs. All Directors are to be furnished with information necessary to assist them in the performance of their duties. The Board intends to meet at least four times each calendar year and prior to such meetings taking place, an agenda and board papers are to be circulated to the Directors so that they are adequately prepared for the meetings. The Company Secretary will be responsible for the procedural aspects of the Board meetings. Directors are, where appropriate, entitled to have access to independent professional advice at the expense of the Company. Any Director appointed to the Board by the Directors will be subject to election by the Shareholders at the first AGM after his/her appointment. Furthermore under the Articles, one third of all Directors must retire by rotation and may seek reelection. However, in keeping with best corporate governance practice, all Directors intend to seek re-election each year at the AGM. The Board intends to communicate with Shareholders on a frequent basis and will consider their views. Members of the Management Team will provide presentations on the release of the Company's annual and interim results. The Board will also be responsible for reviewing the Company's fees and expenses on at least an annual basis to determine that the expenses incurred are in the best interest of the Shareholders. Details of the remuneration of Directors are set out at paragraph 5 of this Part IX (Directors and Corporate Governance). The composition of the Board will be reviewed regularly to ensure that the Board has the appropriate mix of expertise and experience. The Articles provide that the number of Directors that may be appointed cannot be fewer than two or greater than ten. Two Directors present at a Directors' meeting shall be a quorum. As at the date of this Prospectus, there are five Directors on the Board, all of whom are non-executive Directors. Daniel Kitchen (the Chairman), Colm Barrington, Terence O'Rourke and Stewart Harrington are each considered independent for the purposes of the Listing Rules. William Nowlan is also a member of the Board of the Investment Manager and a member of the Management Team. 8.3. Board Committees of the Company The Board, as recommended by the UK Code, has established two committees: the Audit Committee and the Nominations Committee. The duties and responsibilities of each of these committees are set out clearly in written terms of reference, which have been approved by the Board. For so long as the Company has no employees, it is not intended to have a Remuneration Committee and an appropriate explanation will be made in the Company's Annual Report in accordance with the UK Code and the AIC Code. If that position changes, the Board will review the matter further with a view to complying with the terms of the UK Code and the AIC Code. As all of the Directors, with the exception of William Nowlan, are regarded as independent, the Board intends for the foreseeable future that each of the Audit Committee and the Nominations Committee shall be comprised of all of the independent Directors. The membership and chairmanship of each committee is intended to be reviewed by the Board at least every three years. The terms of reference for each of the committees are summarised below. Audit Committee The Board as the Audit Committee will be chaired by Terence O'Rourke, who is also an independent non-executive Director and is considered by the Board to have sufficient financial experience and sufficient understanding of financial reporting and accounting principles. All members of the Audit Committee shall be accordingly independent non-executive 88
  • directors, appointed by the Board for a period of up to three years. The Audit Committee is constituted in compliance with the UK Code, the AIC Code, IFA Code and the Articles regarding the composition of the Audit Committee. The Audit Committee assists the Board in discharging its responsibilities with regard to corporate governance, financial reporting and external and internal audits and controls. The Audit Committee shall meet at least four times per year and as otherwise required. The main duties of the Audit Committee are set out in written terms of reference and include the following: a) to keep under review the adequacy and effectiveness of the Company's internal financial controls and internal control and risk management systems; b) to verify that procedures in place comply with applicable legislation, the Listing Rules and the Irish REIT Regime guidelines; c) to review the adequacy and security of the Company's arrangements for its employees and contractors to raise concerns in confidence about possible wrongdoing in the financial reporting; d) to review the Company's procedures, if any, for the detection of fraud, bribery, compliance and money laundering; e) to monitor the integrity of the Company's financial statements included in its annual report and any other formal announcement relating to the Company's financial performance business model and strategy and reviewing significant financial reporting issues and all other material continuous disclosure obligations; f) to annually assess the external auditors' performance qualifications, expertise, resources and their terms of reference, determine their independence, approve their fees, conduct an audit tender process when appropriate and review external audit reports to ensure that where deficiencies in internal controls have been identified, appropriate and prompt remedial action is taken by the management; g) to develop and implement a policy on the supply of non-audit services by the Company's auditor, taking into account any relevant ethical guidance on the matter; h) to review and approve the annual audit plan and ensure that it and the Company's internal audit function is consistent with the scope of the audit engagement and the Company's overall risk management system; and i) to produce a report on its activities to be included in the Company's annual report. Nominations Committee The Board as the Nominations Committee will be chaired by Daniel Kitchen, who is also the independent non-executive Chairman. All members of the Nominations Committee shall be independent non-executive Directors, appointed by the Board for a period of up to three years. The Nominations Committee is accordingly constituted in compliance with the UK Code, the AIC Code, IFA Code and the Articles regarding the composition of the Nominations Committee. Following Admission, the Nominations Committee wiii be responsible for the appointments to the Board and shall meet at least once a year and as otherwise directed. The Nominations Committee's terms of reference include the following: a) to review the structure, size and composition of the Board and the combination and balance of experience, core competencies and other attributes which the Board should possess in order to discharge its role and to propose changes to the Board where appropriate; b) to assess the effectiveness ofthe Board and each of its committees; c) to identify and nominate for the approval of the Board, candidates to fill Board vacancies as and when they arise; d) to engage in succession planning for Directors and other senior executives, if any, of the Company taking into account any skills set or expertise that the Board may require; 89
  • e) review the leadership needs of the Company and stay fully informed about strategic issues and commercial changes affecting the Company; and f) provide a report on its activity to be included in the Company's annual report. Before any appointment is made by the Board, the Nominations Committee will evaluate the balance of skills, knowledge and experience and diversity of the Board. Information on the appointment and rotation of Directors is set out in paragraph 8.2 of this Part IX (Directors and Corporate Governance) and information on the Directors' letters of appointment is set out in paragraph 6 of this Part IX (Directors and Corporate Governance). The Nominations Committee may not be chaired by the Chairman when it is dealing with the matter of succession to the chairmanship of the Company. Other Committees The Board will fulfil the responsibilities typically undertaken by a management engagement committee. These duties and responsibilities will include the regular review of the performance of, and contractual arrangements with, the Investment Manager and only the independent non-executive Directors will be involved in undertaking such review. 8.4. Internal controls The Board acknowledges it is responsible for maintaining the Company's system of internal control and risk management in order to safeguard the Company's assets. Such a system is designed to identify, manage and mitigate financial, operational and compliance risks inherent to the Company. The system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable, but not absolute, assurance against material misstatement or loss. The Board has adopted the Policies and Procedures Manual to document those procedures which will govern the day to day operations of the Company. Information on the Policies and Procedures Manual is set out in paragraph 11.1 of Part XV (Additional Information). 8.5. Model Code The Company must comply with the Model Code which imposes restrictions on share dealings for the purposes of preventing the abuse, or suspicion of abuse, of inside information by Directors and other persons discharging managerial responsibilities within the Company. The Board will be responsible for taking all proper and reasonable steps to ensure compliance with the Model Code by the Directors and others to whom the Model Code is applicable. 90
  • PART X: HISTORICAL FINANCIAL INFORMATION SECTION A: ACCOUNTANT'S REPORT ON THE HISTORICAL FINANCIAL INFORMATION OF THE COMPANY The Directors Hibernia REIT p.l.c. Marine House Clanwilliarn Place Dublin 2 Ireland 6 December 2013 Dear Sir: Hibernia REIT p.l.c. (the 'Company') We report on the financial information set out in Part X (Historical Financial Information) for the period ended 3I October 2013. This financial information has been prepared for inclusion in the prospectus dated 6 December 20I3 ofthe Company (the "Prospectus") on the basis of the accounting policies set out in Note 2 to the financial information. This report is required by paragraph 20.1 of Annex I of the Commission Regulation (EC) No. 809/2004 (the "Prospectus Directive Regulation") and is given for the purpose of complying with that paragraph and for no other purpose. Responsibilities The Directors of the Company are responsible for preparing the financial information on the basis of preparation set out in Note 2 to the financial information. It is our responsibility to form an opinion on the financial information and to report our opinion to you. Save for any responsibility arising under paragraph 2(2)(f) of Schedule I to the Prospectus (Directive 2003/7I/EC) Regulations 2005 (S.I. No. 324 of 2005), as amended, to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with paragraph 23 .I of Annex I of the Prospectus Directive Regulation, consenting to its inclusion in the Prospectus. Basis of opinion We conducted our work in accordance with Standards for Investment Reporting (SIR) 2000 issued by the Auditing Practices Board in the United Kingdom and Ireland. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of the significant estimates and judgments made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the entity's circumstances, consistently applied and adequately disclosed. We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error. Opinion on financial information In our opinion, the financial information gives, for the purposes of the Prospectus dated 6 December 2013, a true and fair view of the state of affairs of the Company as at 3I October 2013 and of its profits, cash flows and changes in equity for the periods then ended in accordance with the basis of preparation set out in Note 2 to the financial information. 9I
  • Declaration For the purposes of paragraph 2(2)(f) of Schedule I to the Prospectus (Directive 2003/71/EC) Regulations 2005 (S.I. No. 324 of 2005), as amended we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the prospectus in compliance with paragraph 1.2 of Annex I of the Prospectus Directive Regulation. Yours faithfully Deloitte & Touche Chartered Accountants Dublin, Ireland 92
  • SECTION B: HISTORICAL FINANCIAL INFORMATION OF THE COMPANY The Historical Financial Information ("HFI") set out below in respect of the Company for the period from incorporation (being 13 August 20 13) to 31 October 2013 has been prepared by the Directors on the basis set out in Note 2. Statement of financial position Note As at 31 October 2013 2013 € Current assets Cash and cash equivalents 40,000 Total current assets 40,000 Total assets 40,000 Equity Called up share capital 3 40,000 Retained earnings Total equity 40,000 Total equity and liabilities 40,000 Notes to the Financial Information I. General Information Hibernia REIT p.l.c. (the "Company") was incorporated on the 13 August 2013 in Ireland as a limited liability company in accordance with the Companies Acts 1963 to 2012. The Company's registered office address is Marine House, Clanwilliam Place, Dublin 2, Ireland. The Company did not trade during the period from incorporation (being 13 August 2013) to 31 October 2013 and received no income and incurred no expenditure. The Company is set up to manage investment properties and will be subject to the Irish REIT Regime. 2. Significant Accounting Policies Basis of preparation The HFI has been prepared in accordance with the requirements of the Annex I item 20.1 of Prospectus Directive Regulations and in accordance with the Annexure to the Standards for Investment Reporting 2000 ("SIR") (revised). The HFI presents the financial records of the Company for the period from incorporation (being 13 August 2013) to 31 October 2013. The Company did not trade during the period from incorporation (being 13 August 2013) to 31 October 2013 and received no income and incurred no expenditure. Consequently, during this period the Company made neither a profit nor loss. The Company has no other recognised gains or losses, during this period and the only cash flows relate to the issue of share capital. Accordingly no statement of comprehensive income, statement of changes in equity or statement of cash flows is presented. The financial information is presented in euro (€), being the functional currency of the Company's operations. 93
  • The preparation of financial information in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may differ materially from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis. Revisions in accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods. Judgments made by management in the applications of IFRS that have a significant effect on the financial information and estimates with a significant risk of material adjustment in the next year are discussed in the notes to these non-statutory financial statements. As a company preparing a prospectus under the Prospectus Directive Regulations, the Company is required by paragraph 20 .I of Annex I to the Prospectus Directive Regulations to prepare and present in this Prospectus the last three years (or such shorter period that the issuer has been in operation) of audited financial information in a form consistent with the accounting policies to be adopted by the Company in its next published annual financial statements. Accordingly, the Directors have prepared financial information for the Company for the period ended 3I October 2013 on the basis expected to be applicable, in so far as this is currently known, for the first set of financial statements of the Company expected to be prepared for the period ended 3I March 20 I5. Forthcoming requirements The following standards and interpretations to existing standards have been published by the International Accounting Standards Board {"IASB") and, to the extent indicated, have been adopted by the EU and will be mandatory for future accounting periods. The Company has not early adopted these standards or interpretations. IFRS 9 (2009 & 20IO) Financial Instruments, which are effective for annual reporting periods beginning on or after I January 20 I5, introduce new requirements for the classification and measurement of financial assets and introduce additions relating to financial liabilities. IFRS I 0 Consolidated Financial Statements, which is effective for annual reporting periods beginning on or after I January 2013 (EU effective date: I January 20I4), introduces a single control model to determine whether an investee should be consolidated. IFRS II Joint Arrangements, which is effective for annual reporting periods beginning on or after I January 2013 (EU effective date: I January 20I4), sets out new criteria in determining the type of joint arrangement and therefore the subsequent accounting treatment. IFRS I2 Disclosure of Interest in Other Entities, which is effective for annual reporting periods beginning on or after I January 2013 (EU effective date: I January 20I4), bring together into a single standard all the disclosure requirements about an entity's interest in subsidiaries, joint arrangements, associates and unconsolidated structured entities. lAS 27 Separate Financial Statements, which is effective for annual reporting periods beginning on or after I January 2013 (EU effective date: I January 20I4), Consolidation requirements previously forming part ofiAS 27 (2008) have been revised and are now contained in IFRS I 0 Consolidated Financial Statements. lAS 32 Financial Instruments: Presentation, which is effective for annual reporting periods beginning on or after I January 20I4, amends lAS 32 and deals with the offsetting of financial assets and liabilities. lAS 28 Investments in Associates and Joint Ventures, which is effective for annual reporting periods beginning on or after I January 20I3 (EU effective date I January 20I4), amends the previous version ofiAS 28 and prescribes the accounting for investments in associates and sets out the requirements for the application ofthe equity method when accounting for investments in associates and joint ventures. 94
  • The Company has not yet fully determined the impact of these amendments on its future financial reporting. However, the Company does not expect the other amendments listed above to have a material impact. Cash and cash equivalents Cash and cash equivalents include cash and highly liquid investments with initial maturities of three months or less and are stated at cost, which approximates market value. Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of taxation, from the proceeds. Other classes of share capital are classified as equity where the instruments are non-redeemable, or redeemable only at the Company's option, and any dividends are discretionary. Discretionary dividends thereon are recognised as distributions within equity upon approval by the Company's Shareholders. 2. Share capital 31 October 2013 € Authorised 100,000,000 1,000,000,000 ordinary shares of€0.10 each Allotted, called up andfully paid equity 40,000 400,000 ordinary shares of €0.1 0 each On incorporation the issued share capital of the Company was €100 divided into 100 ordinary shares of€1.00 each. On 31 October 2013, the Company subdivided the entire existing share capital into ordinary shares of €0.1 0 each and increased its authorised share capital to €100,000,000 divided into 1,000,000,000 ordinary shares of€0.10 each. As at the date of this financial information, the issued share capital is €40,000, made up of 400,000 ordinary shares of €0.10 each. All ofthese shares were fully paid up on that date. 3. Indebtedness As at the date of this financial information, the Company has no guaranteed, secured, unguaranteed or unsecured debt and no indirect or contingent indebtedness. 4. Related Party Transactions As at 5 December 2013 (being the latest practicable date prior to the issue of this Prospectus), William Nowlan holds 399,994 Ordinary Shares representing over 99.99% of the issued share capital of the Company. He is also the beneficial owner of the remaining six Ordinary Shares in issue (which are held by Kevin Nowlan, Frank O'Neill, Christina Brady, John McNally, Eoin McDermott and John Vaudin as registered owners). Christina Brady is an employee and shareholder of WKN, John McNally is a director of WKN, and Eoin McDermott and John Vaudin are directors and shareholders of WKN. The Company has entered into a RE1T Investment Management Agreement with Nowlan Property REIT Management Limited (the "Investment Manager"), which is a related party of the Company. 95
  • PART XI: THE ISSUE 1. THE ISSUE The Company will issue 364,600,000 Ordinary Shares pursuant to the Issue raising proceeds of €364,960,000 before 13 commissions and other estimated fees and expenses of approximately €12,600,000 . Credit Suisse and Goodbody have conditionally placed 360,938,000 Ordinary Shares at the Issue Price with certain institutional and qualified professional investors, and in Ireland through Goodbody only, with certain other investors, being existing clients ofGoodbody, and a further 462,000 Ordinary Shares have been conditionally placed at the Issue Price with certain persons directly, in each case in circumstances which do not give rise to a public offer in respect of which the 14 Company would be obliged to publish a prospectus. These 361,400,000 Ordinary Shares in aggregate represent 99.01% of the issued share capital of the Company on Admission. Further details of the Placing and Sponsor Agreement are set out in paragraph 11.2 of Part XV (Additional Information). In addition, the members of the Board and Founder Group have entered into the Board and Founder Group Subscription Agreement with the Company pursuant to which the members of the Board and Founder Group have agreed, conditional upon Admission occurring and the Placing and Sponsor Agreement not being terminated in accordance with its terms, to subscribe for an aggregate 3,200,000 Ordinary Shares for a subscription amount of €3,560,000, which together with the 400,000 Ordinary Shares beneficially held by William Nowlan at the date hereof, will aggregate to 3,600,000 Ordinary 15 Shares being held by the Board and Founder Group, representing 0.99% of the issued share capital of the Company on Admission. For further information on the Board and Founder Group Subscription Agreement see paragraph 11.3 of Part VII (Information on the Company). In addition, the Cornerstone Investors have entered into the Cornerstone Subscription Agreements with the Company pursuant to which the Cornerstone Investors have agreed, conditional upon Admission occurring and the Placing and Sponsor Agreement not being terminated in accordance with its terms, to subscribe for an aggregate of 124,532,100 Ordinary Shares at the Issue Price under the Placing, representing 34.12% 16 of the issued share capital of the Company on Admission. For further information on the Cornerstone Subscription Agreements see paragraph 11.4 of Part VII (Information on the Company). 17 The Placing comprises an offer of 360,938,000 Ordinary Shares, representing 98.89% of the issued share capital of the Company on Admission. The Ordinary Shares to be issued pursuant to the Issue will rank pari passu in all respects with the existing Ordinary Shares, including as regards the right to vote and the right to receive all dividends and other distributions declared, made or paid on the Company's share capital after Admission. Immediately following Admission, the Ordinary Shares will be, subject to certain restrictions set out in paragraph 6.2 of Part XV (Additional Information), freely transferable under the Articles .. The Placing will be made by way of (a) an offer to institutional investors outside the United States pursuant to Regulation S who are not US Persons and (b) a placement to persons reasonably believed to be QIBs and who are also QPs in reliance 13 14 15 16 17 Assuming no exercise of the Over-allotment Option. Assuming no exercise of the Over-allotment Option. Assuming no exercise of the Over-allotment Option. Assuming no exercise of the Over-allotment Option. Assuming no exercise of the Over-allotment Option. 97
  • on Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. The Placing is conditional upon, among other things: (a) the Placing and Sponsor Agreement having become unconditional in all respects and not having been terminated in accordance with its terms; (b) Admission occurring; and (c) the requirement under Rule 16.2.8 of chapter 16 of the Irish Listing Rules, that the Company demonstrates that it will have a significant market capitalisation on admission (based on the issue price and shares, other than treasury 18 shares, in issue on admission), being satisfied. If any of the above conditions is not satisfied the Placing will not proceed and the subscription for 3,200,000 Ordinary Shares by members of the Board and Founder Group will not take place. WKN Staff have been given the opportunity to acquire Ordinary Shares at the Issue Price. 2. THE ORDINARY SHARES The Ordinary Shares have been created pursuant to the Irish Companies Acts. Each of the Ordinary Shares carries one vote on a poll at a meeting of the Company's Shareholders. There are no restrictions on the voting rights of the Ordinary Shares other than those discussed in paragraph 6.2 of Part XV (Additional Information). The ISIN for the Ordinary Shares will be IEOOBGHQ1986. Subject to certain provisions in the Articles, which are described in paragraph 6.2 ofPart XV (Additional Information), the Ordinary Shares are freely transferable immediately following Admission. The Ordinary Shares will be in registered form and capable of being held in uncertified form. The Placing of Ordinary Shares to persons located or resident in, or who are citizens of, or who have a registered address in, countries other than Ireland or the United Kingdom, and the holding of Ordinary Shares by such persons, may be affected by the law or regulatory requirements of the relevant jurisdiction, which may include restrictions on the free transferability of such Ordinary Shares. Investors in such jurisdictions should consult their own advisers prior to an investment in the Ordinary Shares. 3. ALLOCATION AND PRICING All Ordinary Shares under the Placing will be sold at the Issue Price. The allocations of Ordinary Shares have been determined by the Joint Bookrunners in consultation with the Company. The rights attaching to the Ordinary Shares will be uniform in all respects and will form a single class for all purposes. All rights attaching to the Ordinary Shares are described in article 3 of the Articles, which Articles are summarised in paragraph 6 of Part XV (Additional Information). 4. PLACING AND SPONSOR AGREEMENT The Company, the Management Team, the Directors, the Investment Manager, Credit Suisse and Goodbody have entered into the Placing and Sponsor Agreement under which the Joint Bookrunners have severally agreed, subject to certain conditions that are typical for an agreement of this nature (the last condition being Admission) to use their respective reasonable endeavours to procure subscribers for the Ordinary Shares under the Placing at the Issue Price. Further details of the Placing and Sponsor Agreement are set out in paragraph 11.2 of Part XV (Additional Information). 18 For the purposes of Rule 16.2.8 'significant' means at least €100 million unless the Irish Stock Exchange agrees otherwise. 98
  • 5. LOCK-IN Certain members of the Board and Founder Group and the Joint Bookrunners have agreed, subject to certain exceptions, that Ordinary Shares acquired by those members of the Board and Founder Group will be subject to a lock-in period. Further details of this lock-in period are described in paragraph 11.4 of Part XV (Additional Information). In return for the services it is to provide to the Company under the REIT Investment Management Agreement, the Investment Manager is entitled to a combination of a cash fee and, subject to satisfying certain performance criteria, Ordinary Shares from the Company. The Company and the Investment Manager have agreed, subject to certain exceptions, that any Ordinary Shares issued to the Investment Manager pursuant to the REIT Investment Management Agreement will be subject to a lock-in period. Further details ofthese arrangements are described in paragraph ll.l of Part XV (Additional Information). 6. ADMISSION AND DEALINGS Application has been made to the Irish Stock Exchange for the Ordinary Shares to be admitted as a primary listing to the Official List of the Irish Stock Exchange and to trading on its regulated market. Application has been made to the UK Listing Authority for the Ordinary Shares to be admitted to the premium listing segment of the Official List of the UK Listing Authority, and to the London Stock Exchange for the Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. No application has been or is currently intended to be made for the Ordinary Shares to be admitted to listing or dealt in on any other exchange. It is expected that Admission to the Official Lists will become effective and that unconditional dealings in the Ordinary Shares will commence on the Irish Stock Exchange and the London Stock Exchange at 8:00 a.m. Dublin time on II December 2013. 7. SEITLEMENT The Company will apply for the Ordinary Shares to be admitted to CREST with effect from Admission. Settlement of transactions in Ordinary Shares following Admission will take place within CREST. CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a share certificate and transferred without executing written stock transfer forms. The system is designed to reduce the costs of settlement and facilitate the processing of settlements and the updating of registers through the introduction of an electronic settlement system. Ordinary Shares may be held in electronic form and evidence of title to Ordinary Shares will be established on an electronic register maintained by the Registrar. Settlement of transactions in Ordinary Shares following Admission may take place within the CREST system if any Shareholder so wishes. With effect from Admission, the Articles will permit the holding of Ordinary Shares in CREST. Temporary documents of title will not be issued. CREST is a voluntary system and holders of Ordinary Shares who wish to receive and retain share certificates will be able to do so. OVER-ALLOTMENT AND STABILISATION In connection with the Issue, Credit Suisse Securities (Europe) Limited (as "Stabilising Manager"), or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law and for stabilisation purposes, over-allot Ordinary Shares up to a total of 20,000,000 Ordinary Shares (representing 5.49% of the total number of Ordinary Shares comprised in the Issue before any utilisation of the Over-allotment Option) or effect other transactions with a view to supporting the market price of the Ordinary Shares at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the conditional dealings of the Ordinary Shares on the Stock Exchanges and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transaction and there is no assurance stabilising transactions will be undertaking. Such stabilisation, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Ordinary Shares above the Issue Price. Except as required by law or regulation, neither 99
  • the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Issue. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotment and/or from sales of Ordinary Shares effected by it during the stabilising period, the Company has granted to the Stabilising Manager an over-allotment (the "Over-allotment Option") pursuant to which the Stabilising Manager may purchase or procure purchasers for additional Ordinary Shares up to a total of 20,000,000 Ordinary Shares (the "Overallotment Shares") at the Issue Price, representing up to 5.49% of the total number of Ordinary Shares comprised in the Issue before any utilisation of the Over-allotment Option. The Over-allotment Option may be exercised in whole or in part upon notice by the Stabilising Manager at any time on or before the 30th calendar day after the commencement of conditional dealings of the Ordinary Shares on the Stock Exchanges. Any Over-allotment Shares made available pursuant to the Over-allotment Option will be sold on the same terms and conditions as Ordinary Shares being offered pursuant to the Issue and will rank pari passu in all respects with, and form a single class with, the other Ordinary Shares (including for all dividends and other distributions declared, made or paid on the Ordinary Shares). In connection with settlement and stabilisation, certain investors have agreed to the deferred settlement of Ordinary Shares (the "Deferred Shares") for the purposes, among other things, of allowing the Stabilising Manager to settle, at Admission, over-allotments, if any, made in connection with the Issue. Settlement of the Deferred Shares will be any time up to and including the date which is 30 calendar days after the date of commencement of conditional dealings of the Ordinary Shares on the Stock Exchanges. 8. SELLING AND TRANSFER RESTRICTIONS No action has been or will be taken in any jurisdiction (other than Ireland and the United Kingdom) that would permit a public offer of the Ordinary Shares, or possession or distribution of this Prospectus or any other offering material, in any country or jurisdiction where action for that purpose is required. Accordingly, the Ordinary Shares may not be offered or sold, directly or indirectly, and this Prospectus may not be distributed or published in or from any country or jurisdiction, except under circumstances that will result in compliance with any and all applicable rules and regulations of any such country or jurisdiction. Persons into whose possession this Prospectus comes should inform themselves about and observe any restrictions on the distribution of this Prospectus and the offer of Ordinary Shares contained in this Prospectus. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This Prospectus does not constitute an offer to acquire any of the Ordinary Shares to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction. 8.1. United States Prospective purchasers are hereby notified that sellers of the Ordinary Shares may be relying on the exemption from the provisions of section 5 of the US Securities Act provided by Rule 144A. Restrictions on offering under the US Securities Act and the US Investment Company Act The Ordinary Shares have not been and will not be registered under the US Securities Act and, subject to certain exceptions, may not be offered or sold within the United States or to, or for the account or benefit of, US Persons. The Company has not been, and will not be, registered under the US Investment Company Act, and investors will not be entitled to the benefit of that Act. The Ordinary Shares are being offered and sold outside of the United States to non-US Persons in reliance on Regulation S. The Placing and Sponsor Agreement provides that the Joint Bookrunners may, directly or through their respective US broker-dealer affiliates, arrange for the offer and sale of Ordinary Shares to QIBs who are also QPs in reliance on Rule 144A or another available exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. In addition, until 40 days after the commencement of the offering of the Ordinary Shares an offer or sale of Ordinary Shares within the United States by any dealer (whether or not participating in the Placing) may violate the registration 100
  • requirements of the US Securities Act if such offer or sale is made otherwise than in accordance with an applicable exemption from registration under the US Securities Act. Each person that is purchasing or otherwise acquiring Ordinary Shares and that is located within the United States or that is a US Person (or is purchasing or acquiring Ordinary Shares for the account or benefit of a US Person), prior to any such purchase or acquisition, will be required to execute a US Investor's Letter in the form set out in Annex A (US Investor's Letter) to this Prospectus and deliver the letter to the Joint Bookrunners and the Company. The US Investor's Letter will require each such person to represent and agree that, among other things, (i) it is both a QIB and a QP and (ii) it will offer, resell, transfer, assign, pledge or otherwise dispose of the Ordinary Shares only (a) outside the United States in an offshore transaction complying with the provisions of Regulation S (including, for the avoidance of doubt, a bona fide sale on the Irish Stock Exchange's main securities market or the London Stock Exchange's main market for listed securities) to a person not known to be a US Person (by pre-arrangement or otherwise), and in compliance with applicable securities Jaws, and in connection therewith, it will execute an Offshore Transaction Letter in the form of the Appendix to Annex A (US Investor ·s Letter) to this Prospectus and promptly send it to the Company or (b) to the Company or a subsidiary (if any) thereof. The transferor will notify any subsequent transferee or executing broker, as applicable, of the restrictions that are applicable to the Ordinary Shares being sold. The US Investor's Letter and the Offshore Transaction Letter contain additional written representations, agreements and acknowledgements relating to the transfer restrictions applicable to the Ordinary Shares. Restrictions on offering in reliance on RegulationS Each purchaser to whom the Ordinary Shares are distributed, offered or sold outside the United States (other than US Persons who have executed a US Investor's Letter) will be deemed by its subscription for, or purchase of, Ordinary Shares, to have represented and agreed as follows: (a) it is not a US Person and is not acquiring the Ordinary Shares for the account or benefit of a US Person; (b) it is acquiring the Ordinary Shares in an offshore transaction meeting the requirements of RegulationS; (c) it is aware that the Ordinary Shares have not been and will not be registered under the US Securities Act and may not be offered or sold in the United States or to, or for the account or benefit of, US Persons, absent registration or an exemption from, or in a transaction not subject to, registration under the US Securities Act; (d) it is aware that the Company has not been and will not be registered under the US Investment Company Act and that the Company has put in place restrictions for transactions not involving any public offering in the United States, and to ensure that the Company will not become an "investment company" under the US Investment Company Act; (e) if in the future it decides to offer, sell, transfer, assign or otherwise dispose of the Ordinary Shares, it will do so only in compliance with an exemption from the registration requirements of the US Securities Act and under circumstances that will not require the Company to register under the US Investment Company Act; (f) it has carefully read and understands this Prospectus, and has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this Prospectus or any other presentation or offering materials concerning the Ordinary Shares to any persons within the United States or to any US Persons, nor will it do any of the foregoing; (g) (i) it is not, and is not acting on behalf of, a Benefit Plan Investor or a Controlling Person unless, in the case of Benefit Plan Investors, it acquires the Ordinary Shares on or prior to Admission with the written consent of the Company, and, in the case of Controlling Persons, it acquires the Ordinary Shares with the written consent of the Company, and (ii) (A) if it is, or is acting on behalf of, a Benefit Plan Investor, its acquisition, holding and disposition of such Share does not and will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and (B) if it is a governmental, church, non-US or other plan which is subject to any federal, state, local or non-US Jaw that is similar to the prohibited transaction provisions of section 406 of ERISA and/or section 4975 of the Code ("Similar Law"), (I) it is not, and for so long as it holds such Ordinary Shares or interest therein will not be, subject to any federal, state, local, non-US or other laws or regulations that could cause the underlying assets of the Company to be treated as assets of a shareholder by virtue of its interest 101
  • in the Ordinary Shares and thereby subject the Company (or any persons responsible for the investment and operation of the Company's assets) to laws or regulations that are substantially similar to the prohibited transaction provisions of section 406 of ERISA or section 4975 of the Code and (2) its acquisition, holding and disposition of such Ordinary Shares will not constitute or result in a non-exempt violation of any Similar Law and (iii) it will agree to certain transfer restrictions regarding its interest in such Ordinary Shares. (h) the Company, Joint Bookrunners and their respective Directors, officers, agents, employees, advisers and others will rely upon the truth and accuracy of the foregoing representations and agreements; and (i) if any of the representations or agreements made by it are no longer accurate or have not been complied with, it will immediately notify the Company and the Joint Bookrunners and, if it is acquiring any Ordinary Shares as a fiduciary or agent for one or more accounts, it has sole investment discretion with respect to each such account and it has full power to make such foregoing representations and agreements on behalf of each such account. 8.2. European Economic Area ("EEA") This Prospectus has been approved by the Central Bank, being the competent authority in Ireland. The Company has requested that the Central Bank provides a certificate of approval and a copy of this Prospectus to the competent authority in the United Kingdom. In relation to each member state of the EEA which has implemented the Prospectus Directive (each, a "Relevant Member State") except for Ireland and the United Kingdom, with effect from and including the date on which the Prospectus Directive was implemented in that relevant member state (the "Relevant Implementation Date") no Ordinary Shares have been offered or will be offered pursuant to the Placing to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Ordinary Shares which has been approved by the competent authority in that Relevant Member State, or where appropriate approved in another Relevant Member State and notified to the competent authority in that Relevant Member State all in accordance with the Prospectus Directive, except that an offer to the public in that Relevant Member State of any Ordinary Shares may be made at any time with effect from and including the relevant implementation date under the following exemptions under the Prospectus Directive if they have been implemented in the Relevant Member State: (a) to any legal entity which is a Qualified Investor; (b) to fewer than I 00, or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive, 150 natural or legal persons (other than Qualified Investors); or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive; provided that no such offer of Ordinary Shares shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in a Relevant Member State and each person who initially acquires any Ordinary Shares or to whom any offer is made on the basis of(a), (b) or (c) above will be deemed to have represented, acknowledged and agreed that it is a Qualified Investor. The expression "offer of any Ordinary Shares to the public" in relation to any Ordinary Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Ordinary Shares to be offered so as to enable an investor to decide to purchase or subscribe for any Ordinary Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State. In the case of any Ordinary Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to have represented, acknowledged and agreed that the Ordinary Shares acquired by it in the Placing have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to persons in circumstances which may give rise to an offer of any Ordinary Shares to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined or in circumstances in which the prior consent of the Joint Bookrunners has been obtained to each such proposed offer or resale. The Company and the Joint Bookrunners will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement. 102
  • Further, in order to comply with AIFMD and local laws, the Ordinary Shares may only be marketed (as that term is used in AIFMD) in the following EEA countries United Kingdom, Ireland, Norway, Sweden and the Netherlands, and only to Qualified Investors and "professional investors" (as that term is used in AIFMD) domiciled or incorporated in those countries. 8.3. Australia This Prospectus has been prepared under the law and operating rules of a foreign market, namely Ireland and the United Kingdom. This Prospectus does not constitute a disclosure document under Part 6D.2 of the Corporations Act 2001 of the Commonwealth of Australia (the "Australian Corporations Act") and has not been, and will not be, lodged with the Australian Securities and Investments Commission. Accordingly, this Prospectus does not necessarily contain all of the information a prospective investor would expect to be contained in a disclosure document in Australia or which he/she may require to make an investment decision. The Company is not, and will not be, subject to the continuous disclosure requirements of the Australian Corporations Act. The offer of Ordinary Shares under this Prospectus to investors in Australia will only be made to the extent that such offers do not need disclosure to investors under Part 6D.2 of the Australian Corporations Act. In particular, any person who receives an offer of Ordinary Shares under this Prospectus in Australia represents and warrants to the Company and the Joint Bookrunners that they are a person who falls within an exemption from disclosure to investors provided by section 708 of the Australian Corporations Act, including a "sophisticated investor" within the meaning of section 708(8) of the Corporations Act, or a "professional investor" within the meaning of section 708( 11) of the Australian Corporations Act. Any offer of Ordinary Shares received in Australia is void to the extent that it needs disclosure to investors under the Australian Corporations Act. Any person to whom Ordinary Shares are issued or sold pursuant to an exemption provided by section 708 of the Australian Corporations Act must not, within 12 months after the issue, offer those Ordinary Shares for sale in Australia unless that offer is itself made pursuant to a disclosure document under Part 6D.2 of the Australian Corporations Act or is made in reliance on an exemption from the disclosure requirements provided by section 708 of the Australian Corporations Act. 8.4. Hong Kong This Prospectus has not been approved by the Securities and Futures Commission in Hong Kong and, accordingly: the Ordinary Shares may not be offered or sold in Hong Kong by means of this Prospectus or any other document (i) other than to "professional investors" as defined in the Securities and Futures Ordinance of Hong Kong (Cap. 571) and any rules made thereunder, or in other circumstances which do not result in the document being a "prospectus" as defined in the Companies Ordinance of Hong Kong (Cap. 32) or which do not constitute an offer to the public within the meaning of the Companies Ordinance; and no person shall issue or possess for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, (ii) invitation or document relating to the Ordinary Shares which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the Ordinary Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors (as set out above). 8.5. Indonesia This Prospectus may not be distributed directly or indirectly in Indonesia or to any Indonesian entity or Indonesian citizen (person), and neither the Company nor the Investment Manager nor any of the Banks, may offer or sell, directly or indirectly, any Ordinary Shares in Indonesia or to any Indonesian entity or Indonesian citizen (person), in a manner constituting a public offering of securities under Law No.8 of 1995 on Capital Markets and the applicable regulations of the Financial Services Agency (Otoritas Jasa Keuangan). 103
  • 8.6. People's Republic of China The Ordinary Shares may not be offered, sold or delivered, or offered or sold or delivered to any person for reoffering or resale or redelivery, in any such case directly or indirectly, in the People's Republic of China (excluding Hong Kong, Macau and Taiwan, the "PRC",) in contravention of any applicable laws. This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any Securities in the PRC to any person to whom it is unlawful to make the offer or solicitation in the PRC. Neither the Company, the Investment Manager, nor the Banks make any representation as to whether this Prospectus may be lawfully distributed, or that any Ordinary· Shares may be lawfully offered, in compliance with any applicable registration or other requirements in the PRC, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Company, the Investment Manager or the Banks which would permit a public offering of any securities or distribution of this document in the PRC. Accordingly, the Ordinary Shares are not being offered or sold within the PRC by means of this Prospectus or any other document. Neither this Prospectus nor any advertisement or other offering material may be distributed or published in the PRC, except under circumstances that will result in compliance with any applicable laws and regulations. 8.7. Singapore This Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore (MAS). In addition, any offer of the Ordinary Shares does not relate to a collective investment scheme which has been authorised under Section 286 of the Securities and Futures Act (Chapter 289 ofSingapore) (SFA) or recognized under Section 287 of the SF A and, accordingly, neither the Company nor the Ordinary Shares constitute a "real estate investment trust" subject to regulation under the Code of Collective Investment Schemes in Singapore. Furthermore, neither the Company nor the Ordinary Shares have been registered with the MAS as a collective investment scheme which is "restricted scheme", pursuant to Section 305 of the SFA (and regulations made thereunder) and hence offers of the Ordinary Shares to accredited investors and other persons pursuant to Section 305 of the SF A are not permitted. In respect of persons in Singapore, the Ordinary Shares may only be offered or sold or made the subject of an invitation for subscription or purchase, and this Prospectus and any other document or material in connection with the offer or sale or invitation for subscription or purchase of the Ordinary Shares may only be circulated or distributed, whether directly or indirectly: (i) to an institutional investor pursuant to Section 274 of the SFA or otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA; and in any case, in accordance with the requirements of the Securities and Futures (Offers of Investments) (Use of the Term "Real Estate Investment Trust") Order 2007. (ii) 8.8. Switzerland The Company has not been licensed by the Swiss Financial Market Supervisory Authority (the "FINMA") for distribution to non-qualified investors pursuant to Article 120 paragraph I to 3 of the Swiss Federal Act on Collective Investment Schemes of 23 June 2006, as amended ("CISA"). Accordingly, pursuant to Article 120 paragraph 4 CISA, the Ordinary Shares may only be offered and this Prospectus may only be distributed in or from Switzerland to qualified investors as defined in the CISA and its implementing ordinance. Further, the Ordinary Shares may be sold under the exemptions of Article 3 para. 2 CISA. Investors in the Company do not benefit from the specific investor protection provided by CISA and the supervision by the FINMA in connection with the licensing for distribution. The Ordinary Shares are not publicly offered within the meaning of Article 652a of the Swiss Code of Obligations. As a consequence, this Prospectus is not a prospectus within the meaning of this provision and may therefore not comply with the information standards required thereunder. This Prospectus is not a listing prospectus according to Article 27 et seq. of 104
  • the Listing Rules of the SIX Swiss Exchange and may therefore not comply with the information standards required thereunder or under the listing rules of any other Swiss stock exchange. Under the new rules pertaining to distribution contained in the CISA, if a foreign collective investment scheme wishes to be distributed in Switzerland to qualified investors, a Swiss representative and a Swiss paying agent have to be appointed by the collective investment scheme. Please note, however, that Article 158d paragraph 4 CISA provides for a transition period until 28 February 2015 during which a foreign collective investment scheme may be distributed to qualified investors in Switzerland without yet complying with the aforementioned requirements. The Company intends to make use of this transition period and will appoint and inform its investors about the appointment of a Swiss representative and a Swiss paying agent in due time. When appointed, the seat of the Swiss representative will be deemed to be the place of performance and jurisdiction with regard to shares distributed in Switzerland. 8.9. Taiwan The offering of the Ordinary Shares has not been and will not be registered with the Financial Supervisory Commission of Taiwan, the Republic of China pursuant to relevant securities laws and regulations and may not be offered or sold in Taiwan, the Republic of China through a public offering or in circumstance which constitutes an offer within the meaning of the Securities and Exchange Act of Taiwan, the Republic of China that requires a registration or approval of the Financial Supervisory Commission of Taiwan, the Republic of China. No person or entity in Taiwan, the Republic of China has been authorized to offer or sell the Ordinary Shares in Taiwan, the Republic of China. 9. INTERESTS OF PERSONS INVOLVED IN THE ISSUE Other than: the interests of the Directors as disclosed in paragraph 3 of Part IX (Directors and Corporate Governance); the interests of the members of the Board and Founder Group as disclosed in paragraph 1 of this Part XI (The Issue); and the interests of each person who is interested in 3% or more ofthe Company's capital as disclosed in paragraph 4 of Part XV (Additional Information), the Directors are not aware of any interests material to the Issue which are held by persons involved in the Issue. 105
  • PART XII: IRISH REAL EST ATE INVESTMENT TRUST REGIME AND TAXATION INFORMATION 1. IRISH REIT REGIME The following paragraphs are intended as a general guide only and constitute a high-level summary of the Company's understanding of current Irish law in respect of the Irish REIT Regime (which is subject to change). The Irish REIT Regime is a new regime introduced in Finance Act 2013 and accordingly interpretation of the rules is likely to develop as participants gain exposure to the regime. This summary sets out the key aspects of the Irish REIT Regime as they apply to the Company. Investors should seek their own advice in relation to taxation matters. 1.1. Overview The Irish REIT Regime is intended to facilitate attracting new sources of capital to the Irish property market and follows similar legislation in the UK and other European countries, as well as the long-established regime in the United States. One of the primary aims of REIT regimes is to minimise the tax inefficiency of holding property through corporate ownership by removing corporate taxation at the level of the REIT. Provided certain conditions and tests are satisfied (see paragraph 1.2 of this Part XII (Irish REIT Regime and Taxation lriformation)), a REIT or Group REIT does not pay Irish corporate taxes on the income or gains of its Property Rental Business. Instead, distributions to shareholders in respect of the Property Rental Business are treated for Irish tax purposes as income in the hands of shareholders. Corporation tax is still payable in the normal way in respect of income and gains from a group's Residual Business (generally including any property trading business) not included in the Property Rental Business. An Irish REIT is required to distribute to its shareholders (by way of dividend), on or before the filing date for the Irish REIT's tax return for the accounting period in question, at least 85% of the Property Income of the Property Rental Business arising in each accounting period (provided it has sufficient distributable reserves). Failure to meet this requirement will result in the Irish REIT incurring a tax charge calculated by reference to the extent of the shortfall in the dividend paid. A dividend paid by an Irish REIT or the principal company of a Group REIT, as the case may be, from its Property Rental Business is referred to as a Property Income Distribution or PID. Any other dividend paid by the Irish REIT is referred to as a Non-PID dividend. In this Part XII (Irish REIT Regime and Taxation Information), references to a company's accounting period are to its accounting period for tax purposes. This period can differ from a company's accounting period for other purposes. Subject to certain exceptions, PIDs will be subject to withholding tax at the standard rate of income tax (currently 20%). Further details of the Irish tax treatment of shareholders under the Irish REIT Regime are contained in paragraph 2 of this Part XII (Irish REIT Regime and Taxation Information). 1.2. Qualification as an Irish REIT In order to qualify for the Irish REIT Regime, a REIT or Group REIT must satisfy certain conditions set out in Part 25A of the TCA. A summary of the material conditions is set out below. Conditions to qualify for the Irish REIT Regime An Irish REIT must be an Irish resident and incorporated company whose ordinary shares are admitted to trading on a main market of a recognised stock exchange in an EU Member State, such as the main markets of the Irish Stock Exchange and the London Stock Exchange. An Irish REIT must not be a close company for tax purposes. Broadly, a close company is an Irish resident company controlled by five or fewer participators, or by participators who are directors. A participator is a person having a share, interest, or other right in the income or capital of a company, or any loan creditor of the company. There is a "quoted company" exemption which allows an otherwise close company to not be treated as close where at least 35% of the votes are held by the public and the shares have been quoted and dealt with on a main market of a recognised stock exchange in 106
  • an EU Member State within the previous 12 months. For this exemption to apply, not less than 35% of the Irish REIT's shares must be beneficially held by the public and for this purpose the "public" excludes directors of the Irish REIT and certain of their associates and shareholders who, alone or together with certain associates, control more than 5% of the Irish REIT's share capital. An Irish REIT which is under the control of certain Irish resident qualifying investors (including Irish investment undertakings within section 739B of the TCA, Irish pension schemes, Irish charities or Irish life companies) as set out in the TCA will not be regarded as a close company. On entering the Irish REIT Regime, there is a grace period of up to three years for the shares to be admitted to be listed or admitted to trading on the main market of a recognised stock exchange in an EU Member State and for the requirement not to be a close company. Share capital restrictions An Irish REIT must have only one class of ordinary shares in issue and the only other shares it may issue are non-voting restricted preference shares. Financial statements The Irish REIT must prepare financial statements in accordance with statutory requirements and submit these to the Irish Revenue. For tax purposes, the financial statements must contain information separating the results of the Property Rental Business from the Residual Business. An Irish REIT must make an annual statement to the Irish Revenue in relation to its compliance with the conditions of the Irish REIT Regime. Conditions for the Irish REIT Regime The REIT or Group REIT must satisfy the conditions summarised below at the end of each accounting period: (a) at least 75% of the Aggregate Income of the REIT or Group REIT is derived from carrying on a Property Rental Business; (b) it should conduct a Property Rental Business consisting of the generation of rental income from at least three properties, the market value of no one of which is more than 40% of the total market value of the properties in the Property Rental Business (in the case of a new REIT or Group REIT this condition is regarded as having been met if it is met within 3 years of it becoming a REIT or Group REIT); (c) it should maintain a property financing ratio being, broadly, the ratio of Property Income plus Financing Costs to Financing Costs, of at least 1.25: I; (d) at least 75% of the market value of the assets of the REIT or Group REIT must relate to assets of the Property Rental Business; (e) it should maintain a REIT LTV of property ratio which does not exceed 50%; and (f) subject to having sufficient distributable reserves, the Irish REIT must distribute at least 85% of its Property Income to its shareholders by way of Property Income Distribution for each accounting period. 1.3. Effect of being within the Irish REIT Regime Tax status While the Company is within the Irish REIT Regime, for corporation tax purposes the Property Rental Business is treated as a separate business to the Residual Business. A REIT or Group REIT will not pay Irish direct tax on profits and gains from its Property Rental Business. A loss incurred by the Property Rental Business cannot be set off against profits of the Residual Business. Corporation tax will still apply in the normal way in respect of its Residual Business which may include certain trading activities, incidental letting in relation to property trades, letting of administrative property which is 107
  • temporarily surplus to requirements and asset management services. Corporation tax may also be payable in respect of profits arising in joint venture arrangements where no REIT election has been made (or on the non-REIT proportion of the profits of joint ventures where a REIT election has been made); and also where shares in a member of a group or an interest in an investment vehicle (as opposed to property involved in the Property Rental Business) is sold. A REIT or Group REIT would also be liable to pay other taxes such as VAT, stamp duty, local property tax and payroll taxes in the normal way. Holders of excessive rights An Irish REIT will become subject to an additional tax charge if it pays a dividend to, or for the benefit of, a Substantial Shareholder. A Substantial Shareholder is a shareholder which holds I 0% or more of the share capital or voting rights in the REIT or principal company of a Group REIT or is entitled to I 0% or more of a distribution. The I 0% shareholding rule does not apply to a "qualifying investor" i.e. certain Irish pension schemes, Irish life companies, Irish investment undertakings, charities and NAMA. The additional tax charge (currently 25% of the amount of dividend so paid) will be calculated by reference to the whole dividend paid to such a shareholder and not just by reference to the proportion which exceeds the I 0% threshold. The charge is calculated without allowance for losses or expenses. The additional tax penalty does not apply in the first three years the company has REIT status. The charge also will not be incurred if the Irish REIT has taken "reasonable steps" to avoid paying dividends to such a shareholder. One such action would be to include restrictive provisions in the Irish REIT's articles of association to address this requirement. The Articles contain such restrictive provisions which are summarised at paragraph 6.2 of Part XV (Additional Information). Profit distribution obligations At least 85% of property rental income earned by a REIT in an accounting period must be distributed to Shareholders on or before the REIT's tax return filing date i.e. within 9 months of the period/year end. Where a REIT fails to make the required distribution, the REIT will be chargeable to tax at 25% on an amount equal to the difference between the distribution made and the amount equal to 85% of the property income. No deductions may be made in arriving at the amount chargeable to tax. REITs may issue stock/scrip dividends (i.e. the issue of new shares to shareholders) instead of cash dividends. Section 816 TCA treats a shareholder who elects to take additional shares as if they have received a dividend of an amount equal to the cash dividend that the shareholder would have received if they had not elected to take the shares. Where a REIT is restricted under company law from distributing all or part of the property income (e.g. the company does not have sufficient distributable reserves) regard will be had to this restriction when calculating the amount chargeable to tax. The 85% distribution requirement does not apply to gains arising from the disposal of property. Profit to Financing Cost ratio A tax charge will arise if, in respect of any accounting period, the ratio of Property Income plus Financing Costs to Financing Costs is less than 1.25: I. If the proportion of the Financing Costs exceeds this ratio, the excess above the amount of Financing Costs as would cause that ratio to equal 1.25 is subject to corporation tax as passive income (currently 25%). The profit to Financing Cost ratio will need to be considered in conjunction with the requirement that debt shall not exceed 50% of the market value of the assets of the Company. Income test 75% of a REIT or Group REIT's Aggregate Income must derive from its Property Rental Business. Capital gains on 108
  • the sale of assets are not considered income for the purposes of the 75% income test. Where the REIT raises cash either by selling a rental property or raising cash from the issue· of ordinary share capital then any profits deriving from the reinvestment of such proceeds, other than in property for the Property Rental Business, will be treated as profits of the Property Rental Business during the first 24 months following the sale or share issue. Following the 24 month period, the profits will be treated as profits ofthe residual business and therefore may be subject to tax. Property development Property development by a REIT or Group REIT can be within the Property Rental Business provided certain conditions are met. However, where development of a property has occurred following acquisition and the cost of development exceeds 30% of the market value of the property at the date of the commencement of the development, the profits arising from the disposal of the property will be taxable if the disposal takes place within three years of completion of the development. The same treatment applies in respect of property (whether or not a development property) which the REIT or Group REIT deals in the course of a trade. Asset test 75% of the market value of a REIT must relate to assets of the property rental business. In the case of a Group REIT, the 75% asset and income test will be determined using the consolidated accounts of the group. A REIT must hold at least three separate property rental assets directly, and no one of these assets can exceed 40% of the market value of the total portfolio. QualifYing properties may be residential, industrial or commercial and in any location worldwide. If an asset owned by a REIT and used for the Property Rental Business ceases to be used for the Property Rental Business and begins to be used for the Residual Business, the asset shall be deemed to have been sold and reacquired by the REIT at market value. If an asset ceases to be used for the Residual Business and begins to be used for the Property Rental Business this will constitute a taxable disposal of the asset at the market value of the asset. Acquisitions and takeovers If an Irish REIT is acquired by another Irish REIT, the acquired Irish REIT does not necessarily cease to be an Irish REIT and will, provided the conditions are met, continue to enjoy tax exemptions in respect of the profits of its Property Rental Business and chargeable gains on disposal of properties in the Property Rental Business. The properties of the acquired Irish REIT are not treated as having been sold and reacquired at market value. The position is different where an Irish REIT is acquired by a person which is not an Irish REIT. In these circumstances, the acquired Irish REIT may cease to satisfy the requirements to be an Irish REIT and will therefore be treated as ceasing to be an Irish REIT from the date of acquisition. On leaving the Irish REIT Regime it will no longer benefit from the exemption from tax on the profits of its Property Rental Business and chargeable gains on disposal of property forming part of its Property Rental Business. The properties in the Property Rental Business will be treated as having been sold and reacquired at market value for the purposes of corporation tax on chargeable gains at that date. These disposals should be tax-free as they are deemed to have been made at a time when the company was still an Irish REIT and future chargeable gains on the relevant assets will, therefore, be calculated by reference to a base cost equivalent to this market value. Certain tax avoidance arrangements If the Irish Revenue believes that a REIT or Group REIT has been involved in certain tax avoidance arrangements, it may cancel the tax advantage obtained and, in addition, impose a tax charge equal to the amount of the tax advantage. These rules apply to both the Residual Business and the Property Rental Business. 109
  • 2. TAXATION The statements of Irish and United Kingdom tax laws set out below are based on existing Irish and United Kingdom tax laws, including relevant regulations, administrative rulings and practices in effect on the date of this Prospectus and which may apply to investors who are the beneficial owners of shares and dividends paid in respect of such shares in an Irish REIT. Legislative, administrative or judicial changes may modify the tax rates, reliefs or consequences described below, possibly with retrospective effect. The statements do not constitute tax advice and are intended only as a general summary. Prospective purchasers should consult their own tax advisers as to the tax consequences in Ireland and the United Kingdom or other relevant jurisdictions (including the jurisdiction(s) in which they reside, hold citizenship, are domiciled or are otherwise subject to tax) of the purchase, ownership and disposition of the share in an Irish REIT. 2.1. Irish Taxation This summary sets out the Irish tax treatment of Shareholders who hold their Ordinary Shares directly as an investment and who are the absolute beneficial owners of both the Ordinary Shares in and dividends received from an Irish REIT. Furthermore, this information only applies to Ordinary Shares of an Irish REIT held as capital assets and does not apply to all categories of Shareholders, such as dealers in securities, trustees, insurance companies, collective investment schemes and Shareholders who have, or who are deemed to have, acquired their Ordinary Shares by virtue of an office or employment. The following paragraphs are intended as a general guide only and are based on the Company's understanding of current Irish tax law and Irish Revenue practice, each of which is subject to change, possibly with retrospective effect. This shall not be taken as advice. Prospective investors who are in doubt about their tax position, or who are subject to tax in a jurisdiction other than Ireland, should consult their own appropriate independent professional adviser without delay, particularly concerning their tax liabilities on PIDs, whether they are entitled to claim any repayment of tax, and, if so, the procedure for doing so. Irish taxation of dividends received from an Irish REIT As outlined in paragraph 1.1 of this Part XII (Irish REIT Regime and Taxation Information) a dividend paid by an Irish REIT or the principal company of a Group REIT, as the case may be, from its Property Rental Business is referred to as a Property Income Distribution or PID. Any dividend paid from the Residual Business by an Irish REIT is referred to as a Non-PID dividend. The various taxation implications of the receipt of PID and Non-Pill dividends by a shareholder are outlined below. Irish taxation of Shareholders who are Irish resident and/or ordinarily resident individuals Irish resident and/or ordinarily resident individual Shareholders in the Company will be liable to Irish income tax on PIDs and Non-PID dividends received from the Company at their marginal rate, plus social security and the universal social charge, depending on their circumstances, on the aggregate of the net dividend received and the withholding tax deducted. Subject to certain exceptions, the Company is required to apply dividend withholding tax at source at the standard rate of income tax (currently 20%) on PID and Non-PID dividends paid to Irish resident and/or ordinarily resident individual Shareholders. The Company should provide the shareholder with a certificate setting out the gross amount of the dividend, the amount of tax withheld, and the net amount of the dividend. Where tax has been withheld at source a shareholder may, depending on their circumstances (i) be liable to further tax on their dividend at their applicable marginal rate, (ii) incur no further liability on their dividend, or (iii) be entitled to claim repayment of some or all of the tax withheld on their dividend. The withholding tax deducted will be available as a credit against the individual's income tax liability. An individual may claim to have the withholding tax refunded to him to the extent that it exceeds his/her income tax liability. 110
  • Irish resident and/or ordinarily resident individual Shareholders will be liable to capital gains tax (currently 33%) on any gains arising on a disposal of shares in the Company. Irish taxation of Shareholders who are Irish resident companies (or the Irish branch of a non-Irish resident company) A shareholder which is an Irish resident company will be chargeable to corporation tax on any PID received from the Company as a PID is treated as passive income subject to tax at 25%. Non-PID dividends received by Irish resident company Shareholders would not be subject to Irish corporation tax on dividends received from the Company. Tax will not be withheld at source by the Company on PID or Non-PID dividends paid to an Irish resident company shareholder provided the appropriate declaration is validly made by the shareholder to the Company. If dividend withholding tax is withheld at source, an Irish resident company shareholder can set-off the tax withheld against any liability to corporation tax in the accounting period in which the distribution is received. Irish resident company Shareholders which are close companies, as defined under Irish legislation, may be subject to a corporation tax surcharge on PID's and Non-PID's income to the extent that it is not re-distributed within the appropriate time frame. Capital gains tax (currently 33%) will apply on the disposal of shares in the Company by an Irish company shareholder. Irish taxation of certain other Irish resident Shareholders Tax will not be withheld at source by the Company on PID or Non-PID dividends to certain other Irish resident Shareholders including certain pension schemes, collective investment undertakings and charities provided the appropriate declaration is validly made by the shareholder to the Company. If dividend withholding tax is withheld at source, the shareholder can set the tax withheld against their liability to income or corporation tax in the accounting period in which the distribution is received, or obtain a refund to the extent that the shareholder has no such liability. Capital gains tax (currently 33%) may apply on the disposal of shares in the Company by such other Irish resident Shareholders depending on their specific tax status. Irish taxation of Shareholders who are not resident or ordinarily resident for tax purposes in Ireland The Company is obliged to apply dividend withholding tax at the standard rate of income tax (currently 20%) on PIDs made to non-resident Shareholders. It is not possible for a non-resident shareholder to make a claim under a double taxation treaty for a PID to be paid by the Company gross or at a reduced rate of withholding tax. The right of the shareholder to claim repayment of any part of the tax withheld from a PID will depend on the existence of and terms of any double taxation treaty between Ireland and the country in which the shareholder is resident. Non-PID dividends made to certain non-residents may be exempt from dividend withholding tax on the basis that the distribution is made to: (a) a resident of a foreign country with which Ireland has a double tax treaty (b) a resident of an EU Member State (other than Ireland) (c) a company not resident in Ireland which is ultimately controlled by a resident of a tax treaty country or an EU Member State (other than Ireland) (d) a company resident in a country with which Ireland has a double tax treaty or an EU Member State (other than Ireland) which is not ultimately controlled by Irish resident persons, or (e) a company if its principal class of share is substantially and regularly traded on a recognised stock exchange in a tax treaty country or Member State. 111
  • In each case, an appropriate declaration must be made to the Company and evidence of entitlement to exemption provided. Non-Irish residents will not be liable to capital gains tax in Ireland on the disposal of shares in the Company as the Company is a public listed company, unless such persons are either ordinarily resident in Ireland or hold the shares in connection with a trade or business carried on in the state through a branch or agency. Irish Capital Acquisitions Tax Capital acquisitions tax ("CAT') is an Irish tax which can apply to both gifts and inheritances of property. Irish CAT may be chargeable on an inheritance or a gift of Ordinary Shares as such shares would be considered Irish property, notwithstanding that the gift or inheritance may be between two non-Irish resident and non-ordinarily Irish resident individuals. The current rate of CAT is 33%. Shareholders should consult their tax advisers with respect to the CAT implications of any proposed gift or inheritance of Ordinary Shares. Stamp Duty Transfers or sales of Ordinary Shares will be subject to ad valorem stamp duty. This is payable by the purchaser. The Irish rate of stamp duty on shares is currently I% of the consideration paid for the Ordinary Shares (or the market value of the Ordinary Shares, if higher). 2.2. United Kingdom Taxation This summary only covers the principal UK tax consequences for the absolute beneficial owners of Ordinary Shares and any dividends paid in respect of them, in circumstances where the dividends paid are regarded for UK tax purposes as that person's own income (and not the income of some other person), and who are resident in the UK for tax purposes. In addition, the summary (i) only addresses the tax consequences for holders who hold the Ordinary Shares as capital assets; (ii) does not address the tax consequences which may be relevant to certain other categories of holders, for example, dealers in securities, employees, directors, charities, registered pension schemes, insurance companies, or collective investment schemes; (iii) assumes that the holder does not control or hold directly or indirectly, either alone or together with one or more associated or connected persons, I 0% or more of the shares and/or voting power of the Company; (iv) assumes that there will be no register kept in the United Kingdom in respect of the Ordinary Shares and that the sole register will be maintained in Ireland; and (v) assumes that the Ordinary Shares will not be paired with shares or securities issued by any company incorporated in the United Kingdom. Dividends No UK tax will be withheld by the Company when it pays a dividend. The receipt of dividends from the Company by a UK resident Shareholder will be regarded as a foreign income dividend for UK tax purposes. Broadly, Non-PID dividends paid by the Company to a UK resident shareholder (individual or corporate) should not be subject to Irish withholding tax, however PID dividends are subject to Irish withholding tax (currently at 20%, unless specifically exempted). It may be possible for the Shareholders to reclaim part of this withholding tax from the Irish Revenue by way of a claim under the UK/Ireland double tax treaty. Shareholders are advised to discuss this aspect further with their tax adviser. An individual Shareholder who is resident in the UK for tax purposes and who receives a dividend from the Company may be entitled to a non-refundable tax credit where the UK individual shareholder holds less than I 0% of the issued shares in the Company, and this tax credit is set against the individual's tax liability on the gross dividend income. The gross dividend income is equal to the aggregate of the net dividend received, any tax credit and any Irish withholding tax deducted at source on PID dividends. For Non-PID dividends, this tax credit is equal to one-ninth of the dividend received, which is equivalent to I 0% of the aggregate of the Non-PID dividend received and the tax credit. For PID dividends, the tax credit is equal to one-ninth of the aggregate of the net PID dividend received and any Irish withholding tax. HMRC will allow claims for unilateral relief for any residual Irish withholding tax suffered (after any treaty claim) as a credit against the UK income tax liability on the dividend, up to a maximum equal to the lower of (a) the treaty 112
  • withholding tax rate of 15%, or (b) the UK tax payable on the gross dividend income less the dividend tax credit. Shareholders are advised to discuss this aspect further with their tax adviser. A UK resident individual Shareholder who is subject to UK income tax at the basic rate will be liable to income tax on the gross dividend income at the rate of(currently) 10% (the dividend ordinary rate), so that the tax credit will satisfy the income tax liability of such a Shareholder in full. No double tax relief is available in the UK for any Irish tax withheld on PID dividends in this case. A UK resident individual Shareholder who is subject to income tax at the higher rate will be liable to income tax on the gross dividend income at the rate of(currently) 32.5% (the dividend higher rate) to the extent that such sum, when treated as the top slice of the Shareholder's income, falls above the threshold for higher rate income tax (please note this does not take into account the clawback of the individual personal allowance where the individual's income exceeds £100,000). After accounting for the 10% tax credit, a higher rate taxpayer will therefore be liable to additional income tax of 22.5% of the gross dividend income (which in the case ofNon-PID dividends will be equal to 25% of the net Non-PID dividend received). As outlined above, double tax relief may be available in relation to PID dividends such that some or all of the Irish tax withheld can be deducted from the UK liability. Shareholders are advised to discuss this aspect further with their tax adviser. Individuals subject to UK income tax at the additional rate of (currently) 45% on income exceeding £150,000 will be liable to income tax on the gross dividend income at the rate of (currently) 37.5% (the dividend additional rate). After accounting for the 10% tax credit, a higher rate taxpayer will therefore be liable to additional income tax of27.5% of the gross dividend income (which in the case ofNon-PID dividends will be equal to 30.56% of the net Non-PID dividend received). As outlined above, double tax relief may be available in relation to PID dividends such that some or all of the Irish tax withheld can be deducted from the UK liability. Shareholders are advised to discuss this aspect further with their tax adviser. UK resident Shareholders who do not pay UK tax or whose liability to income tax on the dividend and related tax credit is less than the UK tax credit (including pension funds, charities and certain individuals) are not entitled to claim repayment from HMRC of any part of the above UK tax credit associated with the dividend. A UK resident individual Shareholder who is non-UK domiciled can elect to be taxed on the dividend only when it is remitted to the UK. This is a complex area of UK taxation and specific detailed advice should be obtained before taking any action in this regard. For example, if you are regarded as a "long-term" resident (i.e. resident in the UK for seven of the last nine tax years) you will generally be required to pay an annual charge of£30,000 to enable the remittance basis of taxation to be used (this increases to £50,000 for those who have been UK resident for at least 12 of the previous 14 years). A UK resident corporate Shareholder which pays tax at the main rate (currently 23%) will not generally have to pay UK corporation tax on dividends received from the Company (whether PID or Non-PID), provided the dividends meet an exempt class and certain other conditions are met. Small companies who hold less than I 0% of the shares in the Company will also qualify for an exemption such that they will not generally have to pay UK corporation tax on dividends received from the Company. Such a Shareholder will not be able to claim repayment of tax credits attaching to the dividends. Shareholders are advised to seek specific tax advice on this when completing their UK corporation tax returns. Taxation of Chargeable Gains A disposal of Ordinary Shares by an individual Shareholder who is resident in the UK may, subject to their specific circumstances and any available exemption or relief, give rise to a chargeable gain (or allowable loss) for the purposes of UK capital gains tax. The annual exemption is £10,900 for the tax year 2013/2014. Capital gains tax chargeable on aggregate gains during the tax year 2013/2014 after the annual exemption will be at the current rate of 18% (for basic rate taxpayers) and 28% (for higher and additional rate taxpayers). A Shareholder who is non-UK resident will not be subject to UK tax on a gain arising on a disposal of Ordinary Shares unless (i) the Shareholder carries on a trade, profession or vocation in the UK through a branch, agency or permanent establishment and, broadly, holds the Ordinary Shares for the purposes of the trade, profession, vocation, branch, agency or permanent establishment or (ii) the Shareholder falls within the anti-avoidance rules applying to individuals who are temporarily not resident or in the UK. 113
  • Similar to the position with UK dividends, a UK resident individual Shareholder who is UK resident but non-UK domiciled may elect to be taxed on the capital gain only when it is remitted to the UK. As mentioned above this is a complex area of UK tax law and detailed UK tax advice should be obtained before considering whether to adopt the remittance basis of UK taxation. In the case of a Shareholder within the charge to UK corporation tax, subject to the availability of any exemptions, reliefs and/or allowable losses, a chargeable gain on disposal of Shares will generally be subject to corporation tax at the current rate of 23%. It should be noted that indexation allowance should be available to reduce the amount of chargeable gain realised on a disposal of Ordinary Shares by a UK resident corporate (but not to create or increase any loss). UK Stamp Duty and Stamp Duty Reserve Tax ("SORT") No UK stamp duty or SORT will be payable by a Shareholder on the allotment, issue or registration of Ordinary Shares. This is on the basis that the Company is incorporated outside of the UK and any agreements to transfer the Ordinary Shares will not be registered on any share register kept in the UK or paired with shares issued by any body corporate incorporated in the UK. Legal instruments transferring the Ordinary Shares should not be within the scope of UK stamp duty provided that such instruments are executed outside of the UK and do not relate to any matter or thing done or to be done in the UK. Where such an instrument is chargeable to stamp duty in both the UK and Ireland and has been duly stamped in one of those countries it is deemed to be stamped in the other country up to the amount of duty it bears but must be stamped for any excess. The above comments are intended as a guide to the general UK stamp duty and SORT position. Special rules apply to persons such as market intermediaries, charities, persons connected with depositary arrangements or clearance services and to certain sale and repurchase and stock borrowing arrangements. 3. US FEDERAL INCOME TAXATION TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, PERSONS SUBJECT TO US TAX ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF US FEDERAL TAX ISSUES IN THIS DOCUMENT IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY SHAREHOLDERS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON, SHAREHOLDERS UNDER THE INTERNAL REVENUE CODE OF 1986; (B) SUCH DISCUSSION IS INCLUDED HEREIN BY THE COMPANY IN CONNECTION WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) BY THE COMPANY OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) SHAREHOLDERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISER. The following is a summary of certain of the US federal income tax consequences of the acquisition, ownership and disposition of Ordinary Shares by a US Holder (as defined below). This summary is based upon the US Internal Revenue Code of 1986 (the "Code"), Treasury Regulations promulgated (and in certain cases, proposed) thereunder, judicial decisions, and the current administrative rules, practices and interpretations of law of the US Internal Revenue Service ("IRS"), all as in effect on the date of this Prospectus, and all of which are subject to change and differing interpretations, possibly with retroactive effect. As used herein, the term "US Holder" means a beneficial owner of Ordinary Shares that is, for US federal income tax purposes: (i) a citizen or individual resident of the United States; (ii) a corporation created or organised in or under the laws of the United States or any State thereof (including the District of Columbia); (iii) an estate, the income of which is subject to US federal income tax without regard to its source; or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more US persons have the authority to control all substantial decisions of the trust, or the trust has elected to be treated as a domestic trust for US federal income tax purposes. A "Non-US Holder" means a beneficial owner of Ordinary Shares other than a partnership or an entity treated as a partnership for US federal income tax purposes, that is not a US Holder. If an entity treated as a partnership for US federal 114
  • income tax purposes holds Ordinary Shares, the US federal income tax treatment of a partner in the partnership generally will depend on the status and the activities of the partner and the partnership. A partnership holding Ordinary Shares should consult its own tax advisers with respect to the US federal income tax consequences applicable to it and its partners of the acquisition, ownership and disposition of Ordinary Shares. This summary is only a general discussion and is not intended to be, and should not be construed to be, legal or tax advice to any prospective investor. In addition, this summary does not discuss all aspects of United States federal income taxation that may be relevant to a US Holder in light of such person's particular circumstances, including certain holders of Ordinary Shares that may be subject to special treatment under the Code (for example, persons that (i) are tax-exempt organizations, qualified retirements plans, individual retirement accounts and other tax-deferred accounts; (ii) are financial institutions, insurance companies, grantor trusts, real estate investment trusts, regulated investment companies, or brokers, dealers or traders in securities; (iii) own Ordinary Shares as part of a straddle, hedging, conversion transaction, constructive sale or other arrangement involving more than one disposition; (iv) are expatriates or other former long-term residents of the United States; (v) own (or are deemed to own) 10% or more (by voting power or value) of the stock of the Company; and (vi) hold Ordinary Shares other than as capital assets or do not use the US Dollar as their functional currency). Moreover, this summary does not include any discussion of US federal alternative minimum, estate or gift tax consequences or state, local or foreign income, estate, gift or other tax consequences or US federal income or other tax consequences applicable to Non-US Holders. The summary of US federal income tax consequences set out below is for US Holders for their general information only. US Holders are urged to consult their own tax advisers as to the particular tax consequences to them of owning the Ordinary Shares including the applicability and effect of state, local, non-US and other tax laws and possible changes in tax law. THE COMPANY EXPECTS TO BE TREATED AS A PASSIVE FOREIGN INVESTMENT COMPANY FOR THE CURRENT AND SUBSEQUENT TAXABLE YEARS. AS A RESULT, MATERIALLY ADVERSE US FEDERAL INCOME TAX CONSEQUENCES COULD RESULT TO US INVESTORS THAT HOLD SHARES. ACCORDINGLY, EACH US HOLDER WHO ACQUIRES SHARES IS STRONGLY URGED TO CONSULT HIS, HER OR ITS OWN TAX ADVISER WITH RESPECT TO THE US FEDERAL, STATE, LOCAL AND FOREIGN INCOME, ESTATE, GIFT AND OTHER TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES, WITH SPECIFIC REFERENCE TO SUCH HOLDER'S PARTICULAR CIRCUMSTANCES. PROSPECTIVE INVESTORS SHOULD SEEK ADVICE FROM THEIR OWN INDEPENDENT TAX ADVISERS CONCERNING THE UNITED STATES FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF AN INVESTMENT IN SHARES BASED ON THEIR PARTICULAR CIRCUMSTANCES. 3.1. General Taxation on Distributions Subject to the discussion below under "PFIC Considerations", which is significant, a US Holder that receives a distribution, including a constructive distribution, of cash or property with respect to the Ordinary Shares, other than certain distributions, if any, of the Ordinary Shares distributed pro rata to all Shareholders, generally will be required to include the amount of such distribution in gross income as dividend income (without reduction for any foreign income tax withheld from such distribution) to the extent of the current or accumulated "earnings and profits" of the Company, as determined under US federal income tax principles. Such dividends will not be eligible for the dividends received deduction generally allowed to corporate US Holders. Subject to the discussion below under "PFIC Considerations", which is significant, to the extent that a distribution exceeds the current and accumulated "earnings and profits" of the Company, such distribution will be treated (a) first, as a tax-free return of capital to the extent of a US Holder's tax basis in the Ordinary Shares, causing a reduction in the adjusted basis of the Ordinary Shares, and (b) thereafter, as capital gain from the sale or exchange of Ordinary Shares (as discussed below). However, the Company does not maintain calculations of its earnings and profits in accordance with US federal income tax accounting principles. US Holders should, therefore, assume that any distribution by the Company with respect to the Ordinary Shares generally will constitute ordinary dividend income. An additional 3.8% tax may apply to dividends received by certain US Holders, which may include individuals, estates and trusts. 115
  • Any such dividend paid in a currency other than the US Dollar will be included in the gross income of a US Holder in an amount equal to the US Dollar value of such currency on the date the dividend is actually or constructively received. The amount of any distribution of property other than cash will be the fair market value of such property on the date of distribution. If a distribution that is made in a currency other than the US Dollar is converted into US Dollars on the date of receipt, a US Holder receiving such distribution generally should not be required to recognise foreign currency gain or loss in respect of such distribution. A US Holder may have foreign currency gain or loss if the amount of such distribution is converted into US Dollars on a date other than the date of receipt. Any gain or loss realised by a US Holder on such conversion will be treated as US source ordinary income or loss. Dividends received by a US Holder with respect to Ordinary Shares will be treated as foreign source income, which may be relevant in calculating such US Holder's foreign tax credit limitation, if any. A US Holder who does not elect to claim a foreign tax credit may instead claim a deduction in respect of foreign income taxes paid during the taxable year provided the US Holder elects to deduct (rather than credit) all foreign income taxes for that year. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by the Company generally will constitute "passive income". The rules relating to computing foreign tax credits or deducting foreign taxes are extremely complex and US Holders are encouraged to consult their own tax advisers regarding the availability of foreign tax credits under their particular circumstances. 3.2. Sale or other disposition Subject to the discussion below under "PFIC Considerations", which is significant, a US Holder will generally recognize gain or loss on the sale or other taxable disposition of Ordinary Shares in an amount equal to the difference, if any, between (a) the amount of cash plus the fair market value of any property received, determined on (i) the date of receipt of payment in the case of a cash basis US Holder and (ii) the date of such sale or other disposition in the case of an accrual basis US Holder, and (b) such US Holder's adjusted tax basis in the Ordinary Shares sold or otherwise disposed of. Any such gain or loss generally will be treated as a capital gain or loss, which will be a long-term capital gain or loss if the Ordinary Shares are held by such US Holder for more than one year. The deductibility of capital losses is subject to limitations. Gain or loss recognised by a US Holder on the sale or other taxable disposition of Ordinary Shares generally will be treated as "US source" for purposes of applying the US foreign tax credit rules. A cash basis US Holder or an electing accrual basis US Holder that receives payment in a currency other than the US Dollar upon the sale or other disposition of the Ordinary Shares will realise an amount equal to the US Dollar value of such currency on the settlement date if Ordinary Shares are treated as being "traded on an established securities market". Any other US Holder generally will determine the amount realised by reference to the US Dollar value of such currency on the date of sale and will have additional ordinary foreign exchange gain or loss attributable to the movement in exchange rates between the date of sale and the settlement date. Any gain or loss realised by a US Holder on a subsequent conversion of the currency for a different amount generally will be ordinary foreign currency gain or loss. The initial tax basis of Ordinary Shares to a US Holder will be the US Dollar value purchase price determined on the date of purchase. If the Ordinary Shares are treated as traded on an "established securities market", a cash basis US Holder or an electing accrual basis US Holder will determine the US Dollar value of the cost of such Ordinary Shares by translating the amount paid at the spot rate of exchange on the settlement date of purchase. The conversion ofUS Dollars to a non-US currency and the immediate use of such currency to purchase Ordinary Shares generally will not result in taxable gain or loss for a US Holder. 3.3. PFIC Considerations A non-US corporation will be a PFIC for US federal income tax purposes for any taxable year if either: (a) 75% or more of its gross income for such year is "passive income" which for this purpose generally includes dividends, interest, royalties, rents and gains from commodities and securities transactions and gains from assets that produce passive income (the "Income Test"); or (b) 50% or more of the value of its assets (based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passive income (the "Asset Test"). 116
  • For this purpose, a corporation will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which the corporation owns, directly or indirectly, at least 25% (by value) of the stock. A separate determination with respect to the Asset Test and Income Test after the close of each taxable year must be made by the Company as to whether it was a PFIC for that year. The Company expects it is and will continue to be a PFIC. The balance of this section assumes that the Company will be a PFIC. Under the PFIC rules, a US Holder will be subject to special tax rules with respect to any "excess distribution" that it receives and any gain realized from a sale or other disposition (including a pledge) of the Ordinary Shares, unless such US Holder makes a "mark-to-market" election as discussed below. Distributions received in a taxable year that are greater than 125% of the average annual distributions received during the shorter of the three preceding taxable years or a US Holder's holding period for the Ordinary Shares will be treated as an excess distribution. Under these special tax rules: (a) the excess distribution or gain will be allocated rateably over a US Holder's holding period for the Ordinary Shares; {b) the amount allocated to the current taxable year, and any taxable years in a US Holder's holding period prior to the first taxable year in which the Company was a PFIC, will be treated as ordinary income; and (c) the amount allocated to each other taxable year will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. The tax liability for amounts allocated to taxable years prior to the year of disposition or excess distribution cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the Ordinary Shares cannot be treated as capital gains, even if the Ordinary Shares are held as capital assets. To the extent the Company has any subsidiaries and any of the Company's subsidiaries is also a PFIC, a US Holder may be deemed to own shares in such lower-tier PFIC that are directly or indirectly owned by the Company in that proportion which the value of the Ordinary Shares such US Holder owns bears to the value of all of the Company's Ordinary Shares, and such US Holder may be subject to the adverse tax consequences described above with respect to the shares of any such lower-tier PFIC that they would be deemed to own. US Holders should consult their tax advisers regarding the application of the PFIC rules to any of the Company's subsidiaries. A US Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If a US Holder makes a mark-to-market election for its Ordinary Shares, such US Holder will include in income for each year that the Company is treated as a PFIC an amount equal to the excess, if any, of the fair market value of the Ordinary Shares as of the close of such US Holder's taxable year over its adjusted basis in such Ordinary Shares. A US Holder will be allowed a deduction for the excess, if any, of the adjusted basis of the Ordinary Shares over their fair market value as of the close of the taxable year. However, deductions will be allowable only to the extent of any net mark-to-market gains on the Ordinary Shares included in their income for prior taxable years. Amounts included in income under a mark-to-market election, as well as gain on the actual sale or other disposition of the Ordinary Shares, will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of any mark-to-market loss on the Ordinary Shares, as well as to any loss realized on the actual sale or disposition of the Ordinary Shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such Ordinary Shares. A US Holder's basis in the Ordinary Shares will be adjusted to reflect any such income or loss amounts. The tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by the Company, except that the lower capital gains rate applicable to qualified dividend income (as defined in the Code) would not apply. The mark-to-market election is available only for "marketable stock", which is stock that is "regularly traded" on a "qualified exchange" as defined in applicable Regulations. "Regularly traded", in general, means that the Ordinary Shares are (A) traded on a qualified exchange and (B) traded in more than de minimis amounts for 15 or more days during each 117
  • calendar quarter. However, a special rule applies for the calendar year of an initial public offering. In such calendar year, the Ordinary Shares will be considered to be regularly traded if they are traded, other than in de minimis quantities, on 1/6 of the days remaining in the quarter in which the public offering occurs and on at least 15 days during each remaining quarter of the calendar year. If the initial public offering occurs in the fourth quarter, the stock must be traded, other than in de minimis quantities, on the greater of 1/6 of the remaining days in the quarter or 5 days. The Company expects that the Ordinary Shares will be listed on the Irish Stock Exchange and the London Stock Exchange. A "qualified exchange" includes any foreign exchange that is regulated by a government authority in the jurisdiction in which the exchange is located and in respect of which certain other requirements are met. Although each of the Irish Stock Exchange and the London Stock Exchange is likely to constitute a "qualified exchange or other market" based on these Regulations, the question is factual, and there is no specific authority that designates either the Irish Stock Exchange or the London Stock Exchange as a "qualified exchange". Even assuming either the Irish Stock Exchange or the London Stock Exchange is a qualified exchange for these purposes, the Company can give no assurance that its Ordinary Shares will be regularly traded. Because a mark-to-market election cannot be made for equity interests in any lower-tier PFICs that the Company owns, a US Holder may continue to be subject to the PFIC rules with respect to its indirect interest in any investments held by the Company that are treated as an equity interest in a PFIC for US federal income tax purposes. US Holders should consult their tax advisers as to the availability and desirability of a mark-to-market election, as well as the impact of such election on interests in any lower-tier PFICs. If a non-US corporation is a PFIC, a holder of shares in that corporation may avoid taxation under the rules described above by making a "qualified electing fund" ("QEF") election to include in income its share of the corporation's income on a current basis. However, US Holders may make a QEF election with respect to their Ordinary Shares only if the Company agrees to furnish them annually with certain tax information, and the Company currently does not intend to prepare or provide such information. Therefore, the QEF election will not be available to US Holders to mitigate the adverse US federal income tax consequences arising under the PFIC rules described above. Holders ofPFIC stock are also subject to additional information reporting rules. Very generally, each US Holder of a PFIC is required to file an annual report containing such information as the US Treasury may require. US Holders should consult their tax advisers regarding any reporting requirements that may apply to them. 3.4. Backup withholding and information reporting US information reporting requirements and backup withholding tax generally apply to certain payments to certain non-corporate holders of Ordinary Shares. Information reporting generally will apply to payments of dividends on, and to proceeds from the sale or redemption of, Ordinary Shares by a paying agent within the United States, and by certain paying agents outside the United States, to a holder of Ordinary Shares (other than an "exempt recipient," which includes corporations, payees that are not US Holders that provide an appropriate certification and certain other persons). A paying agent or other intermediary within the United States, and certain paying agents and intermediaries outside the United States, generally will be required to withhold, at a rate currently of 28% on any payment of dividends with respect to, and on the proceeds from the sale or redemption of, Ordinary Shares within the United States to a US Holder (other than a corporation or other "exempt recipient") if such person fails to furnish its correct taxpayer identification number or otherwise fails to comply with such backup withholding requirements. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules from a payment to a US Holder generally may be refunded (or credited against such US Holder's US federal income tax liability, if any) provided the required information is furnished to the IRS. US Holders should consult their tax advisers as to the application of US information reporting and backup withholding and their qualification for exemption from backup withholding and the procedure for obtaining such an exemption. If information reporting requirements apply to a US Holder, the amount of dividends paid with respect to, and the gross proceeds from the sale or redemption of, such Ordinary Shares will be reported annually to the IRS and such US Holder. US Holders that are individuals (and certain entities formed by or for US Holders) are required to report information with respect to their investment in the Ordinary Shares to the IRS unless the Ordinary Shares are held in an account at a domestic US financial institution. Investors who fail to report required information could become subject to substantial penalties. Investors are encouraged to consult with their own tax advisers regarding the potential information reporting obligations in respect of their investment in the Ordinary Shares. 118
  • US Holders who acquire any Ordinary Shares for cash may be required to file a form 926 (return by a US Transferor of Property to a Foreign Corporation) with the IRS and to supply certain additional information to the IRS if (i) immediately after the transfer, the US Holder owns directly or indirectly at least 10% of the Company's total voting power or value, or (ii) the amount of cash transferred to the Company in exchange for the Ordinary Shares, when aggregated with all related transfers under applicable regulations, exceeds US$ 100,000. Substantial penalties may be imposed on a US Holder that fails to comply with this reporting requirement. Each US Holder is urged to consult with its own tax adviser regarding this reporting obligation. 3.5. Proposed changes to PFIC rules Proposals are made from time to time to amend the United States Internal Revenue Code. One recent proposal, if enacted, would, among other things, repeal the present law rules that impose an interest charge when a U.S. person who owns stock of a PFIC receives an excess distribution in respect of that stock. Instead, rules similar to the mark-to-market election described in paragraph 3.3, above, effectively would become mandatory. (A different rule would apply to stock that is nonpublicly traded stock.) The proposal is proposed to be effective for taxable years beginning after December 31, 2014. In addition, the proposal, if enacted, would require any U.S. person who holds certain PFIC stock ("covered stock") on the last day of the person's taxable year beginning in 2014 to treat the PFIC stock as sold for its fair market value on that day. (The proposal provides for the adjustment of the amount of any gain or loss subsequently realized from covered stock to reflect the amount of any gain or loss on the stock from the deemed sale.) For this purpose, covered stock is any stock of a PFIC unless there was a QEF election or mark-to-market election in effect for the taxable year in which the deemed sale would take place. The deemed sale provision is proposed to be effective for a U.S. person's last taxable year beginning in 2014. No representation is made that this or any other change in law will be enacted, or, if enacted, what effect it will have on the Ordinary Shares. THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISER ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE ORDINARY SHARES IN LIGHT OF THE INVESTOR'S OWN CIRCUMSTANCES. 119
  • PART XIII: CERTAIN ERISA CONSIDERATIONS ERISA imposes certain requirements on ''employee benefit plans" that are subject to Title I of ERISA, including, for this purpose, certain entities in which such plans invest whose underlying assets are deemed to be plan assets of such employee benefit plan investors (collectively, "ERISA Plan Investors"). A fiduciary of an ERISA Plan Investor should consider the fiduciary standards of ERISA before authorizing an investment of plan assets for the purchase of Ordinary Shares, including whether the investment satisfies the applicable prudence and diversification requirements, is consistent with applicable plan liquidity needs and is being made in accordance with the documents governing the plan. Section 406 of ERISA and section 4975 of the Code prohibit certain transactions involving the assets of a Benefit Plan Investor (which includes an ERISA Plan Investor, as well as certain plans that are not subject to ERISA but which are subject to section 4975 of the Code, such as individual retirement accounts, certain Keogh plans and certain entities whose underlying assets are deemed to include the assets of such plans) and certain persons having certain relationships to such Benefit Plan Investors (referred to as "parties in interest" under ERISA or "disqualified persons" under the Code (collectively, "Parties in Interest")), unless a statutory or administrative exception or exemption is applicable to the transaction. A Party in Interest who engages in a prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code and the prohibited transaction may have to be rescinded at significant cost to the Company. The Company, Credit Suisse, Goodbody, the Investment Manager or any other party to the transactions referred to herein may be Parties in Interest with respect to many Benefit Plan Investors. Prohibited transactions within the meaning of section 406 of ERISA or section 4975 of the Code may arise if any of the Ordinary Shares are acquired or held by a Benefit Plan Investor, including but not limited to where the Company, Credit Suisse, Goodbody, the Investment Manager or any other party to such transactions is a Party in Interest. Certain exemptions from the prohibited transaction provisions of section 406 of ERISA and section 4975 of the Code may be applicable, however, depending in part on the type of fiduciary making the decision to acquire any Ordinary Shares and the circumstances under which such decision is made. Included among these exemptions are section 408(b){l7) of ERISA and section 4975(d)(20) of the Code (relating to transactions between a person that is a Party in Interest (other than a fiduciary or an affiliate that has or exercises discretionary authority or control or renders investment advice with respect to assets involved in the transaction) solely by reason of providing services to the plan, provided that there is adequate consideration for the transaction), Prohibited Transaction Class Exemption ("PTCE") 91-38 (relating to investments by bank collective investment funds), PTCE 84-14 (relating to transactions effected by a qualified professional asset manager), PTCE 95-60 (relating to transactions involving insurance company general accounts), PTCE 90-1 (relating to investments by insurance company pooled separate accounts) and PTCE 96-23 (relating to transactions determined by in-house asset managers). Prospective investors should consult with their advisers regarding the prohibited transaction rules and these exceptions. There can be no assurance that any of these exemptions or any other exemption will be available with respect to any particular transaction involving any Ordinary Shares. Governmental plans (as defined in section 3(32) of ERISA), certain church plans (as defined in section 3(33) of ERISA) and certain non-US plans (as defined in section 4{b){4) of ERISA), while not subject to the fiduciary responsibility and prohibited transaction provisions of ERISA or the provisions of section 4975 of the Code, may nevertheless be subject to substantially similar rules under Federal, state, local or non-US laws, and may be subject to the prohibited transaction rules of section 503 of the Code. Fiduciaries of any such plans should consult with their counsel before authorizing an investment of plan assets for the purchase of Shares. Under ERISA and a regulation issued by the US Department of Labor (29 C.F.R. section 2510.3 101, the "Plan Asset Regulations"), as modified by section 3(42) of ERISA, if a Benefit Plan Investor invests in an "equity interest" of an entity that is neither a "publicly offered security" (which requires registration with the SEC) nor a security issued by an investment company registered under the Investment Company Act of 1940, the Benefit Plan Investor's assets are generally deemed to include both the equity interest and an undivided interest in each of the entity's underlying assets, unless it is established (a) that the entity is an "operating company" as that term is defined in the Plan Asset Regulations, or (b) that less than 25 % of the total value of each class of equity interest in the entity, disregarding the value of any equity interests held by persons (other than Benefit Plan Investors) with discretionary authority or control with respect to the assets of the entity or who provide investment advice for a fee with respect to such assets (such as the Investment Manager), and their respective affiliates (each a "Controlling Person"), is held by Benefit Plan Investors (the "25% Limitation"). A "Benefit Plan Investor" means {I) an employee benefit plan (as defined in section 3(3) of ERISA), subject 120
  • to the provisions of part 4 of Subtitle B of Title I of ERISA, (2) a plan to which section 4975 of the Code applies or (3) any entity whose underlying assets include plan assets by reason of such plan's investment in such entity. If the underlying assets of the Company are deemed to be plan assets under the Plan Asset Regulations, the obligations and other responsibilities of the plan sponsors, plan fiduciaries and plan administrators, and of Parties in Interest, under Parts 1 and 4 of Subtitle B of Title I ofERISA and section 4975 ofthe Code, as applicable, may be expanded, and there may be an increase in their liability under these and other provisions of ERISA and the Code. In addition, various providers of fiduciary or other services to the Company, and any other parties with authority or control with respect to the Company, could be deemed to be plan fiduciaries or otherwise parties in interest or disqualified persons by virtue of their provision of such services (and there could be an improper delegation of authority to such providers). The Plan Asset Regulations defines an "equity interest" as any interest in an entity other than an instrument that is treated as indebtedness under applicable local law and that has no substantial equity features. The Ordinary Shares may be considered "equity interests" for purposes of the Plan Asset Regulations. In order to avoid having the Company's asset treated as plan assets under the Plan Asset Regulations, the Company intends to prohibit investments by Benefit Plan Investors and Controlling Persons in Ordinary Shares other than, in the case of Benefit Plan Investors, Shareholders that acquire the Ordinary Shares on or prior to Admission with the written consent of the Company, and, in the case of Controlling Persons, Shareholders that acquire the Ordinary Shares with the written consent of the Company. Each purchaser at the Issue and each subsequent transferee of a Share will be deemed to make certain representations, warranties and agreements regarding its status as a Benefit Plan Investor, a Controlling Person and other ERISA matters as described below. No Ordinary Shares will be sold or transferred to purchasers that have represented that they are Benefit Plan Investors or Controlling Persons other than, in the case of Benefit Plan Investors, Shareholders that acquire the Ordinary Shares on or Prior to Admission with the written consent of the Company, and, in the case of Controlling Persons, Shareholders that acquire the Ordinary Shares with the written consent of the Company. However, after the Issue, the Company will be unable to monitor whether Benefit Plan Investors acquire Ordinary Shares and therefore, there can be no assurance that Benefit Plan Investors will never acquire Ordinary Shares other than during the Issue or that, if they do, the ownership of all Benefit Plan Investors will be below the 25% threshold. If the Company's assets were deemed to constitute "plan assets" within the meaning of the Plan Asset Regulations, certain transactions that the Company might enter into in the ordinary course of business and operation might constitute non-exempt prohibited transactions under ERISA or the Code, resulting in the imposition of excise taxes and penalties. In addition, any fiduciary of a Benefit Plan Investor or a governmental, church, non-US or other plan which is subject to any federal, state, local or non-US law that is similar to the prohibited transaction provisions of section 406 of ERISA and/or section 4975 of the Code ("Similar Law") that is responsible for such plans investment in the Ordinary Shares could be liable for any ERISA fiduciary violations or violations of Similar Law relating to the Company. Each of the Company, Credit Suisse, Goodbody, the Investment Manager, or their respective affiliates may be the sponsor of, or investment adviser with respect to one, or more Plans. Because such parties may receive certain benefits in connection with the sale of the Ordinary Shares to such Plans, whether or not the Ordinary Shares are treated as equity interests in the Company, the purchase of such Ordinary Shares using the assets of a Plan over which any of such parties has investment authority might be deemed to be a violation of the prohibited transaction rules of ERISA and/or section 4975 of the Code for which no exemption may be available. Accordingly, the Ordinary Shares may not be acquired using the assets of any Plan if any of the Company, Credit Suisse, Goodbody, the Investment Manager or their respective affiliates has investment authority with respect to such assets (except to the extent (if any) that a favourable statutory or administrative exemption or exception applies). If you are a purchaser at the Issue or a subsequent transferee of an Ordinary Share, you will be deemed to represent, warrant and agree that (i) you are not, and are not acting on behalf of, a Benefit Plan Investor or a Controlling Person unless, in the case of Benefit Plan Investors, you acquire the Ordinary Shares on or prior to Admission with the written consent of the Company, and, in the case of Controlling Persons, you acquire the Ordinary Shares with the written consent of the Company, and (ii) (A) if you are, or are acting on behalf of, a Benefit Plan Investor, your acquisition, holding and disposition of such Share does not and will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code and (B) if you are a governmental, church, non-US or other plan which is subject to Similar Law, (I) you are not, and for so long as you hold such Ordinary Shares or interest therein will not be, subject to any federal, state, local, non-US or other laws or regulations that could cause the underlying assets of the Company to be treated as assets of a shareholder by virtue of your interest in the Ordinary Shares and thereby subject the Company (or any persons responsible for the investment and operation of the Company's assets) to laws or regulations that are substantially similar 121
  • to the prohibited transaction provisions of section 406 of ERISA or section 4975 of the Code and (2) your acquisition, holding and disposition of such Ordinary Shares will not constitute or result in a non-exempt violation of any Similar Law and (iii) you are not otherwise a Non-Qualified Holder. No transfer of an interest in Ordinary Shares will be permitted or recognised if it would cause the Ordinary Shares to be held by Benefit Plan Investors or Controlling Persons other than, in the case of Benefit Plan Investors, Shareholders that acquire the Ordinary Shares on or prior to Admission with the written consent of the Company, and, in the case of Controlling Persons, Shareholders that acquire the Ordinary Shares with the written consent of the Company. The fiduciary of any Benefit Plan Investor or of an employee benefit plan not subject to ERISA or section 4975 of the Code considering whether to acquire a Share should consult with its counsel regarding the potential consequences of such investment, the applicability and potential effects of the fiduciary responsibility and prohibited transaction provisions of ERISA and the Code and/or corresponding provisions of Similar Law, and the scope of any available exemption relating to such investment. The sale of Ordinary Shares to a Benefit Plan Investor or an employee benefit plan not subject to ERISA or section 4975 of the Code is in no respect a representation or warranty by the Company, or any other person that this investment meets or, in the future, will meet all relevant legal requirements with respect to investments by Benefit Plan Investors or such other plans generally or with respect to any particular Benefit Plan Investor or other plan, that any prohibited transaction exemption would apply to the acquisition, holding, or disposition of this investment by such plans in general or any particular plan, or that this investment is appropriate for such plans generally or any particular plan. Although it is contemplated that the assets of the Company will not be deemed to be plan assets under the Plan Asset Regulations, no assurance can be given that the such treatment can be avoided after the Shares become publicly traded and that the fiduciary and prohibited transaction provisions of ERISA and the Code would not become applicable to investments made and transactions entered into by the Company. 122
  • PART XIV: ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE 1. BACKGROUND Ireland implemented AIFMD into Jaw by way of the AIFMD Regulations. The purpose of AIFMD is to provide an internal market for AIFMs and a harmonised and stringent regulatory and supervisory framework for the activities within the EU of AIFMs. In addition to the AIFMD Regulations, the Central Bank has published its AIF Rulebook which applies to Irish AIFMs, retail investor, or qualifying investor, AIFs and certain parties providing services to them. Based on the provisions of AIFMD it is considered by the Directors that the Company may be an AIF within the scope of AIFMD and the Company has considered it prudent to proceed on the basis that it is an AIF. Under the AIFMD regime, each AIF must appoint an AIFM. Accordingly, the Investment Manager has obtained authorisation from the Central Bank as an authorised AIFM under the AIFMD Regulations. 2. AIFMD- IMPACT ON THE COMPANY AND THE INVESTMENT MANAGER As a consequence of being authorised as an AIFM under the AIFMD Regulations, the Investment Manager is obliged to adopt and implement and comply on an ongoing basis with a programme of activity, the form of which has been agreed with the Central Bank. In addition the Investment Manager is obliged to put in place a variety of policies and procedures dealing with matters such as risk management, liquidity management, conflicts of interest, supervision of delegates, complaints handling, internal audit, record keeping and remuneration among other matters. The Investment Manager is also obliged to comply with ongoing requirements regarding minimum levels of capital as well as reporting obligations to the Central Bank and to Shareholders. As a consequence of being an AIF which has an authorised AIFM, the Company is obliged to engage the Depositary to act as depositary for the Company. The Depositary has a number of roles relating to oversight of certain of the activities of the Company, safekeeping and asset ownership verification duties regarding the assets of the Company and the depositing of cash not yet invested by the Company with a bank. In addition, the Depositary also has custody duties in respect of any assets acquired by the Company and monitoring duties regarding the Company's cash flows. 3. IRISH REGULATORY STATUS OF THE COMPANY At present, the Company is not itself subject to a regulation by the Central Bank as it is not a variable capital company that requires authorisation pursuant to Part XIII of the Companies Act 1990 (as amended). In addition it is not a unit trust or other form of regulated fund. However, a subsequent change in Jaw may render a REIT, such as the Company, a form of collective investment scheme that is subject to authorisation and regulation by the Central Bank (or other regulator). In that regard, in July 2013, the Central Bank issued a consultation paper entitled "Consultation on types of Alternative Investment Funds under AIFMD and units trust schemes under the Unit Trust Act 1990 (including EUTs, REITs etc.)". While this paper dealt almost entirely with exempt unit trusts ("EUTs"), the inclusion of a reference to REITs suggests that the possibility that a REIT, such as the Company, may be subject to direct regulation in the future, cannot be discounted entirely. Were the Company to become subject to the current regulatory requirements for a collective investment scheme that invests in real estate, the Company would be subject to additional restrictions regarding the investments it could make. Such restrictions would, depending on whether the Company was authorised as a retail investor, or qualifying investor, AIF, include additional restrictions including in relation to the nature of investments (including as to type, level of diversification and acquisition price), level of borrowings it could incur, the type of service providers it can utilise and additional disclosures required to be made to investors. In those circumstances, the Company would become subject to the Central Bank's AIF Rulebook and the requirements therein applicable to retail investor, or qualifying investor, AIFs as the case may be, depending on whether the Company was a retail investor, or a qualifying investor, AIF. In addition, in the 123
  • event that the Company was authorised as a retail investor AIF, the requirements of the Central Bank's AIF Rulebook applicable to retail investor AIFs are prescriptive in a number of respects, including in terms of the eligible investments and diversification limits applicable to a retail investor AIF's investments, such as not being able to invest more than 30% of its net assets in a single property interest or not being able to invest more than 25% of its net assets in property interests which are vacant in the process of development or requiring development. There would also be additional requirements relating to the price at which property interests may be acquired. In addition, there is a risk that although the Company may be required to be authorised by the Central Bank as a retail investor, or qualifying investor, AIF, the Central Bank may refuse to do so, in which case the Company could not continue its business and would have to be liquidated. Any such liquidation could result in the Company selling its assets prematurely or on unfavourable terms which could adversely affect the Net Asset Value of the Company and could result in a loss in some or all of an investor's investment in the Company. 124
  • PART XV: ADDITIONAL INFORMATION 1. RESPONSIBILITY 1.1. The Company and the Directors (whose names appear on page 48 of this Prospectus) accept responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. 1.2. The Management Team accepts responsibility for the Management Team Statements. To the best of the knowledge and belief of the Management Team (who has taken all reasonable care to ensure that such is the case), such Management Team Statements are in accordance with the facts and do not omit anything likely to affect the import of such information. 1.3. Jones Lang LaSalle is a financial and professional services firm specialising in real estate services and investment management. It is responsible for the data and information comprising the Jones Lang LaSalle Materials which have been prepared in connection with this Prospectus. Jones Lang LaSalle declares that it has taken all reasonable care to ensure that the information contained in the Jones Lang LaSalle Materials is, to the best of its knowledge and belief, in accordance with the facts and does not omit anything likely to affect the import of such information. This declaration is included in the Prospectus in compliance with paragraph 1.2 of Annex I to the Prospectus Directive Regulation. Jones Lang LaSalle has given and not withdrawn its written consent to the issue of this Prospectus with the inclusion herein of the Jones Lang LaSalle Materials and references to its name in the form and context in which they appear. The Jones Lang LaSalle Materials have been produced by Jones Lang LaSalle at the request of the Company. Jones Lang LaSalle has no material interest in the Company. 2. INFORMATION ON THE COMPANY The Company was incorporated on 13 August 2013 as a private limited company and is registered in Ireland with registered number 531267. It re-registered as a public limited company on 8 November 2013. The registered office of the Company is at Marine House, Clanwilliam Place, Dublin 2, Ireland. The Company is domiciled in Ireland and resident in Ireland for tax purposes. The principal legislation under which the Company operates, and under which the Ordinary Shares were created, is the Irish Companies Acts and the regulations made thereunder. The liability ofthe Shareholders is limited to amounts, if any, unpaid on the shares issued to them. The financial year end of the Company is 31 March. The Company is not currently subject to regulation by the Central Bank as a variable capital investment company pursuant to Part XIII of the Companies Act 1990, a unit trust pursuant to the Unit Trusts Act 1990 or as another form of regulated fund pursuant to any other collective investment scheme legislation in force in Ireland. Based on the provisions of AIFMD it is considered by the Directors that the Company may be an AIF within the scope of AIFMD and the Company has considered it prudent to proceed on the basis it is an AIF, which requires the appointment of an Alternative Investment Fund Manager ("AIFM") authorised or registered under the AIFMD Regulations. However, the Directors do not believe that the Company is required under current law to be authorised itself by the Central Bank as a retail investor, or qualifying investor, AIF. For further information on AIFMD, see Part XIV (Alternative Investment Fund Managers Directive). The Investment Manager is authorised as an AIFM, and was therefore required to ensure that the Company appoint a depositary. The Company has appointed Credit Suisse International, Dublin Branch as a depositary. For further information on AIFMD, see Part XIV (Alternative Investment Fund Managers Directive). The Company has not traded since its incorporation and has had limited operations. Deloitte & Touche, Chartered Accountants, whose address is Hardwicke House, Upper Hatch Street, Dublin 2, have been appointed as the auditors of the 125
  • Company and will have been the only auditors of the Company since its incorporation. The Company prepared audited accounts up to 30 September 2013 in connection with its re-registration as a public limited company, and those audited accounts (together with other required information and documents) have been filed with the Companies Registration Office in Dublin. Save for matters connected with the Issue and the entry into of the contracts discussed in paragraph II of Part XV (Additional Information) the Company has not engaged in operations since its incorporation and has not incurred borrowings. 3. SHARE CAPITAL On incorporation as a private limited company the issued share capital was €I 00 divided into 100 ordinary shares of €I.OO each all of which was owned by William Nowlan, a member of the Board and Founder Group. Under the Irish Companies Acts, a private limited company may not re-register as a public limited company unless its issued share capital is at least €38,092.I4. On 31 October 20 I3 the Company sub-divided each of its existing ordinary shares at € I.OO each into I 0 Ordinary Shares of €0.1 0 each and increased its authorised capital to € 100,000,000 divided into I ,000,000,000 Ordinary Shares of €0.I 0 each. On that day William Nowlan subscribed for and was issued an additional 398,994 Ordinary Shares of €0.I 0 each at par for cash and the Company also passed various resolutions to enable it re-register as a public limited company. On that day I Ordinary Share was transferred to each of Kevin Nowlan, Frank O'Neill, Christina Brady, John McNally, Eoin McDermott and John Vaudin to meet the statutory minimum of seven members. William Nowlan is the beneficial owner of those 6 shares. On 8 November 2013 the Company became re-registered as a public limited company. As at 5 December 2013 (being the latest practicable date prior to the issue of the Prospectus), the issued share capital is €40,000 made up of 400,000 Ordinary Shares of€0.10 each, which are fully paid up and which are owned beneficially by William Nowlan. See paragraph 6.2 of this Part XV (Additional Information) in respect of the Directors' authority to issue Ordinary Shares. Pursuant to special resolutions passed by the Shareholders on 5 December 20I3: (a) The Directors are empowered to allot, as if Section 23(1) of the I983 Act did not apply to any such allotment, Ordinary Shares (provided that the aggregate nominal value of any shares which may be allotted under this authority may not exceed €50,000,000). Such authority expires on 30 June 20I4, unless previously varied, revoked or renewed. (This authority will enable Ordinary Shares to be issued in respect of the Issue including to the Board and Founder Group. to the WKN Staff and to the Cornerstone Investors, on the date ofAdmission). (b) The Directors are empowered to allot, as if the said Section 23(1) of the 1983 Act did not apply to any such allotment, Ordinary Shares to the Investment Manager pursuant to the REIT Investment Management Agreement (provided that the aggregate nominal value of any shares which may be allotted may not exceed €3,000,000) provided that such authority expires at the earlier of the close of business on (i) the date of the next annual general meeting ofthe Company after the passing ofthe resolution or (ii) 31 May 2015, provided that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if the power hereby conferred had not expired. (This authority will enable the Directors to allot Ordinary Shares to the Investment Manager pursuant to and for the duration of the REIT Investment Management Agreement in respect of the Performance Fee payable to the Investment Manager. The reasons for the passing of this special resolution are that: 126
  • (i) (ii) the amount to be paid to the Company in respect of the allotment and issue to the Investment Manager of Ordinary Shares will be calculated in accordance with the terms of the REIT Investment Management Agreement and that this sum (the Performance Fee) would be applied to allot and issue a number of Ordinary Shares to the Investment Manager that is equal to "X", where "X" is determined by dividing the Performance Fee by the average of the closing prices of the Ordinary Shares on the main market of the Irish Stock Exchange over the period of twenty days prior to the business day immediately preceding the date on which such Performance Fee is first determined; and (iii) (c) (a) as the Company proposes to elect to become a real estate investment trust, the Company would require expertise in investment, development and management of property and the Directors believed that the Investment Manager satisfies those requirements and (b) the application of the Performance Fee to the allotment and issue of Ordinary Shares should incentivise and reward the Investment Manager and align its interests with those of Shareholders generally; the payment by the Investment Manager of such amount in return for the relevant number of Ordinary Shares will be determined by the terms of the REIT Investment Management Agreement and that this agreement has been negotiated on an arm's length basis with a view to incentivising and rewarding the Investment Manager and to aligning its interests with those of Shareholders generally). The Directors are empowered to allot, as if Section 23(1) of the 1983 Act did not apply to any such allotment, Ordinary Shares (provided that the aggregate nominal value of any shares which may be allotted under this authority may not exceed the lower of €2,000,000 and five percent (5%) of the aggregate nominal value of the issued ordinary share capital of the Company immediately following Admission) provided that such authority expires at the close of business on the date of the next annual general meeting of the Company after the passing of this resolution or 30 April2015, whichever is the earlier, unless previously varied, revoked or renewed. (This authority will enable the Directors to allot a limited amount of Ordinary Shares generally at their discretion without the application ofpre-emption rights for other Shareholders). (d) The Company is authorised to make market purchases and overseas market purchases (in each case as defined by Section 212 of the 1990 Act) of Ordinary Shares on such terms and conditions and in such manner as the Directors may determine from time to time but subject, however, to the provisions of the 1990 Act and to the following restrictions and provisions: (iv) the maximum number of Ordinary Shares authorised to be acquired shall not exceed the lower of €4,000,000 in nominal value and I 0% of the issued share capital of the Company immediately following Admission; (v) the minimum price (excluding expenses), which may be paid for any Ordinary Share shall be an amount equal to the nominal value thereof; (vi) the maximum price (excluding expenses) which may be paid for any Ordinary Share shall be the higher of: A. 5% above the lower of the average of the closing prices of an Ordinary Share taken from the Irish Stock Exchange Daily Official List and the average of the mid-market quotations of an Ordinary Share taken from the London Stock Exchange Daily Official List in each case for the five business days prior to the day the purchase is made; and B. the amount stipulated by Article 5(1) of the Market Abuse (Buyback and Stabilisation) Regulation (being the value of an Ordinary Share calculated on the basis of the higher of the price quoted for: (i) the last independent trade of; and (ii) the highest current independent bid or offer for, any number of Ordinary Shares on the trading venue(s) where the purchase pursuant to the authority conferred by this resolution will be carried out); provided that such authority shall expire at the close of business on the date of the next annual general meeting of the Company after the passing of such resolution or the day which is 18 calendar months after the date of passing such 127
  • resolution, whichever is the earlier, unless previously varied, revoked or renewed by special resolution in accordance with the provisions of Section 215 of the 1990 Act. The Company may, before such expiry, enter into a contract for the purchase of Ordinary Shares which would or might be executed wholly or partly after such expiry and may complete any such contract as if such authority had not expired. (e) For the purposes of Section 209 of the 1990 Act the re-issue price range at which any treasury shares (as defined by the said Section 209) for the time being held by the Company may be re-issued off-market shall be as follows: (i) the maximum price at which a treasury share may be re-issued off-market shall be an amount equal to 120% of the "Appropriate Price"; (ii) the minimum price at which a treasury share may be re-issued off-market shall be an amount equal to 95% of the "Appropriate Price" (provided always that no treasury share shall be issued at a price lower than its nominal value); and (iii) for the purposes of sub-paragraphs (i) and (ii), the expression "Appropriate Price" shall mean the lower of the average ofthe closing prices of the Ordinary Shares taken from the Irish Stock Exchange Daily Official List and the average of the mid-market quotations of an Ordinary Share taken from the London Stock Exchange Daily Official List in each case for the five business days prior to the day the re-issue is made; provided that such authority shall expire at the close of business on the date of the next annual general meeting of the Company after the passing of such resolution or the day which is 18 calendar months after the date of passing such resolution, whichever is the earlier, unless previously varied, revoked or renewed by special resolution. The Company may before such expiry make a contract for the re-issue of treasury shares which would or might be wholly or partly executed after such expiry and may make a re-issue of treasury shares pursuant to any such contract as if such authority had not expired. (f) The articles of association summarised in paragraph 6 of this Part XV (Additional Information) were adopted as the articles of association of the Company in substitution for, and to the exclusion of, the then existing Articles. The Company has no convertible debt securities, exchangeable debt securities or debt securities with warrants in issue. 128
  • 4. INTERESTS OF MAJOR SHAREHOLDERS Subject to the arrangements set out in paragraph II of this Part XV (Additional Information), insofar as the Directors are aware, immediately prior to, and following, Admission, the name of each person who, directly or indirectly, is interested in 3% or more of the Company's capital, and the amount of such person's interest, will be as follows Immediately prior to Admission Immediately following Admission Number of Ordinary Shares Percentage of issued Ordinary Share Capital 19 500,000 0.14% Putnam Investments 21 30,000,000 8.22% Quantum 30,000,000 8.22% Moore Capitae2 25,000,000 6.85% Marshall Wace LLP23 25,000,000 6.85% CREF 23,570,000 6.46% MainStay Marketfield Fund 23,000,000 6.30% Wellington Managemenf4 15,962,100 4.37% Goodbody Stockbrokers Nominees Limited 13,125,436 3.60% FMRLLC 12,000,000 3.29% Cohen & Steers UK Limited 11,000,000 3.01% Zurich Life Assurance p.l.c. 11,000,000 3.01% Name William Nowlan 19 20 Number of Ordinary Shares Percentage of issued Ordinary Share Capital 400,000 Assuming no exercise of the Over-allotment Option. 399,994 of these Ordinary Shares are held by William Nowlan directly. The other 6 Ordinary Shares are held by him beneficially. 21 Funds managed by Putnam Investments shall directly hold Ordinary Shares. One of these funds, Putnam Voyager Fund, has subscribed for 12,035,000 Ordinary Shares representing 3.30% of the issued share capital on Admission (assuming no exercise of the Over-allotment Option). 22 Funds managed by Moore Capital shall hold Ordinary Shares. One of these funds, PL Credit Fund (Master) LP, has subscribed for 15,000,000 Ordinary Shares representing 4.11% of the issued share capital on Admission (assuming no exercise of the Over-allotment Option). 23 24 Marshall Wace LLP for and on behalf of the funds it manages in its capacity as discretionary investment manager of investment advisor. Ordinary Shares to be acquired by various investment advisory clients of Wellington Management. 129
  • Notes: (I) As at 5 December 2013 (being the latest practicable date prior to the issue of this Prospectus), William Nowlan holds 399,994 Ordinary Shares representing over 99.99% of the issued share capital of the Company. He is also the beneficial owner of the remaining six Ordinary Shares representing less than 0.01% of the issued share capital of the Company (with Kevin Nowlan. Frank O'Neill. Christina Brady, John McNally. Eoin McDennott and John Vaudin being the registered holders thereof). The above listed Shareholders do not have different voting rights. The Company is not aware of any persons who, directly or indirectly, jointly or severally, exercise or could exercise control over the Company as at, or immediately following, Admission. Under the Irish REIT Regime the Company will become subject to an additional tax charge if it pays a dividend to, or in respect of, a Substantial Shareholder unless it has taken "reasonable steps" to avoid paying dividends to such a shareholder. The Articles contain provisions designed to avoid the situation where dividends may become payable to Substantial Shareholders. These provisions are summarised at paragraph 6.2 of this Part XV (Additional Information). 5. MANDATORY BIDS AND COMPULSORY ACQUISITION RULES 5.1. Mandatory Bids As the Company is an Irish company with shares admitted to listing on the Official List of the Irish Stock Exchange and the Official List of the UK Listing Authority from Admission, the Irish Takeover Panel would monitor and supervise a takeover bid for the Company. The Irish Takeover Rules regulate acquisitions of the Company's securities. Rule 5 ofthe Irish Takeover Rules prohibits the acquisition of securities or rights over securities in a company, such as the Company, which the Irish Takeover Panel has jurisdiction to supervise, if the aggregate voting rights carried by the resulting holding of securities and by the securities that are the subject of such rights, if any, would amount to 30% or more ofthe voting rights ofthat company. If a person holds securities or rights over securities which in the aggregate carry 30% or more of the voting rights, that person is also prohibited from acquiring additional securities carrying 0.05% or more of the voting rights, or rights over such securities, in a 12 month period. Acquisitions by and holdings of concert parties must be aggregated. The prohibition does not apply to purchases of securities or rights over securities by a single holder of securities (including persons regarded as such under the Irish Takeover Rules) who already holds securities, or rights over securities, which represent in excess of 50% of the voting rights. Rule 9 of the Irish Takeover Rules provides that where a person acquires transferable securities which, when taken together with transferable securities held by concert parties, amount to 30% or more of the voting rights of a company, that person is required under Rule 9 to make a general offer-a "mandatory offer"--to the holders of each class of transferable, voting securities of the company to acquire their securities. The obligation to make a Rule 9 mandatory offer is also imposed on a person (or persons acting in concert) who holds securities conferring 30% or more of the voting rights in a company and who increases that stake by 0.05% or more of the voting rights in any 12 month period. Again, a single holder of securities (including persons regarded as such under the Irish Takeover Rules) who holds securities conferring in excess of 50% of the voting rights in a company may purchase additional securities without incurring an obligation to make a Rule 9 mandatory offer. There have been no mandatory takeover bids or any public takeover bids by third parties in respect of the share capital of the Company in the last financial year or in the current financial year to date. 5.2. Squeeze Out The European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006 set out a procedure enabling a bidder for an Irish company which has securities admitted to trading on an EU regulated market to acquire compulsorily the securities of those holders who have not accepted a general offer--the "squeeze-out" right on the terms of the general offer. The main condition which needs to be satisfied before the "squeeze-out" right can be exercised is that the bidder, pursuant to acceptance of a bid for the beneficial ownership of all the transferable voting securities (other than securities already in 130
  • the beneficial ownership of the bidder) in the capital of the company, has acquired, or unconditionally contracted to acquire, securities which amount to not less than nine-tenths of the nominal value of the securities affected and carry not less than nine tenths of the voting rights attaching to the securities affected. 5.3. Buy-Out The 2006 Regulations also provide for rights of "sell-out" for Shareholders in Irish companies which have securities admitted to trading on an EU regulated market. Holders of securities carrying voting rights in the company who have not accepted a bid by way of a general offer for the beneficial ownership of all of the voting securities in the company (other than securities already in the beneficial ownership of the bidder) have a corresponding right to oblige the bidder to buy their securities on the terms of the general offer under which the beneficial ownership of the securities of the assenting security holders was acquired by the bidder. The main condition to be satisfied to enable the exercise of"sell-out" rights is that the bidder has acquired, or unconditionally contracted to acquire, securities which amount to not less than nine-tenths in nominal value of the securities affected and which carry not less than nine-tenths of the voting rights attaching to the securities affected. 5.4. Substantial Acquisition Rules The Substantial Acquisition Rules are designed to restrict the speed at which a person may increase a holding of voting securities (or rights over such securities) of a company which is subject to the Irish Takeover Rules, including the Company. The Substantial Acquisition Rules prohibit the acquisition by any person (or persons acting in concert with that person) of shares or rights in shares carrying 10% or more of the voting rights in the Company within a period of 7 calendar days if that acquisition would take that person's holding of voting rights to 15% or more but less than 30% of the voting rights in the Company. 5.5. Disclosure and Transparency Rules Under the Transparency Regulations, shareholders of a company are required to notify a listed company (and. at the same time the Central Bank of Ireland) within two trading days when their voting rights in the Company reach, exceed or fall below 3% of the voting rights attached to the company's share capital and also each time they increase or decrease by a whole integer above 3%. The Company is obliged, under the Transparency Rules, to publish any such notification received no later than the trading day following receipt. The Transparency Regulations oblige a company to publish the total number of voting rights and capital at the end of each calendar month during which an increase or decrease of such total number occurs. Further disclosure is required where a company acquires or disposes of its own shares, either itself or through another person acting on its behalf, when the percentage of voting rights attributable to those shares exceeds or falls below the thresholds of 5% or 10%. The Transparency Regulations also oblige a company to notify a RIS as soon as possible after any decision to pay or withhold any dividend or interest payment on listed securities and of the results of any new issue of equity securities or preference shares or of a public offering of existing shares or other equity shares. 5.6. Irish Merger Control Legislation Under Irish merger control legislation, any person or entity proposing to acquire direct or indirect control of the Company through the acquisition of Ordinary Shares or otherwise must, subject to various exceptions and if certain financial thresholds are met or exceeded, provide advance notice of such acquisitions to the Irish Competition Authority which notification would be available on the Irish Competition Authority's website. The financial thresholds to trigger mandatory notification are, subject to certain exceptions, (a} the world-wide turnover of each of two or more of the undertakings involved in the merger or acquisition is not less than €40,000,000, and (b) each of two or more of the undertakings involved in the merger or acquisition carries on business in any part of the island of Ireland, and (c) the turnover in the State of any one of the undertakings involved in the merger or acquisition is not less than €40,000,000. Failure to notify properly is an offence under Irish law. The Competition Act 2002, as amended, defines "control" as existing if, by reason of securities, contracts or any other means, decisive influence is capable of being exercised with regard to the activities of a company. Under Irish law, any transaction subject to the mandatory notification obligation set out in the legislation (or any transaction which has been voluntarily notified to the Irish Competition Authority) will be void, if put into effect before the 131
  • approval of the Irish Competition Authority is obtained or before the prescribed statutory period following notification of such transaction lapses without the Irish Competition Authority having made an order. 6. MEMORANDUM AND ARTICLES OF ASSOCIATION The following is a summary of the Memorandum and Articles of Association of the Company to be effective on Admission. Any shareholder requiring further detail than that provided in the summary is advised to consult the Memorandum and Articles of Association which are available at the address specified in paragraph 2 of this Part XV (Additional Information). 6.1. Memorandum of Association The Memorandum of Association provides that the Company's objects are, among other things, to carry on the business of a property investment company and to do all such things deemed incidental or conducive to the attainment of this object. The objects of the Company are set out in full in clause 3 of the Memorandum of Association. 6.2. Articles Issuing Shares Subject to the provisions of the Irish Companies Acts, and without prejudice to any rights attached to any existing shares or class of shares, any share may be issued with such rights or restrictions as the Company may by ordinary resolution determine or as the Directors may determine pursuant to any power conferred on them by the Articles provided that for so long as the Company is an Irish REIT its issued share capital shall consist only of such classes (and number of classes) as is permitted for an Irish REIT by the Irish REIT Regime (and the rights attached to any preference share issued by the Company shall be limited in the manner required for an Irish REIT by the Irish REIT Regime). Subject to the Articles and to the provisions of the Irish Companies Acts, the unissued shares of the Company (whether forming part of the original or any increased capital) are at the disposal of the Board. On the allotment and issue of any shares, the Directors may impose restrictions on the transfer or disposal of such shares as may be considered by the Directors to be in the best interests of the Company. The Directors are authorised to allot Ordinary Shares up to an aggregate nominal value of €50,000,000 provided that such authority shall expire at the earlier of the close of business on the date of the next annual general meeting of the Company after the date of adoption ofthe relevant articles of association granting such authorisation or 30 April2015, provided that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired. This authority will enable Ordinary Shares to be issued by the Directors in respect of (i) the Issue, including to the Board and Founder Group, to the Cornerstone Investors and the WKN Staff, and (ii) 5% of the issued share capital of the Company after the Issue. The Directors are also authorised to allot Ordinary Shares where such shares are being issued in consideration of any amounts due by the Company for investment management fees pursuant to any REIT Investment Management Agreement to which the Company is a party from time to time with the Investment Manager provided that the maximum amount of relevant securities which may be allotted under the authority hereby conferred shall be up to an aggregate nominal value of €3,000,000 and provided that such authority shall expire at the earlier of the close of business on the date of the next annual general meeting of the Company after the date of adoption of the relevant articles of association granting such authorisation or 30 April 2015, provided that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if the power conferred and hereby had not expired. This authority will enable Ordinary Shares to be issued by the Directors in respect of the subscription by the Investment Manager for Ordinary Shares from the Performance Fee, if any, payable by Company to the Investment Manager under the REIT Investment Management Agreement. 132
  • Pre-emption rights in respect of equity offerings for cash under the Irish Companies Acts may be disapplied by shareholder resolution. See paragraph 3 of this Part XV (Additional Information) in respect of certain shareholder resolutions that have disapplied pre-emption rights for Shareholders in certain circumstances. Lien and Forfeiture The Company has a first and paramount lien on every share (not being a fully paid share) for all monies payable to the Company (whether presently payable or not) in respect of that share. Subject to the terms of allotment, the Board of the Company may make calls on the Shareholders in respect of any monies unpaid on their shares. The Board may give not less than 14 clear days' notice requiring payment of the amount due. If a payment is not made when due and payable, the person from whom such amount is due shall be liable to pay interest on the amount unpaid from the day it became due until it is paid (at the rate fixed by the terms of the allotment or in the notice of the call, or at an appropriate rate (as defined by the Acts) if no such rate is fixed). If that notice is not complied with, a further notice (giving a further 14 clear days' notice) may be sent by the Board. If this further notice is not complied with, any share in respect of which it was sent may, at any time before the payment required by the notice has been made, be forfeited by a resolution of the Board. The forfeiture shall include all dividends or other monies payable in respect of the forfeited share which are outstanding in respect of the forfeited share. Variation of Share Capital and Variation of Rights (a) Increase of capital: The Company from time to time by ordinary resolution may increase the share capital by such sum, to be divided into shares of such amount, as the resolution shall prescribe. (b) Consolidation, sub-division and cancellation of capital: The Company, by ordinary resolution, may consolidate and divide all or any of its share capital into shares of larger amount; subject to the provisions of the Acts, subdivide its shares, or any of them, into shares of smaller amount, so however that in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived (and so that the resolution whereby any share is sub-divided may determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may have, as compared with the others, any such preferred, deferred or other rights or be subject to any such restrictions as the Company has power to attach to unissued or new shares); or cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and reduce the amount of its authorised share capital by the amount ofthe shares so cancelled. (c) Reduction of capital: The Company, by special resolution, may reduce its share capital, any capital redemption reserve fund or any share premium account in any manner subject to certain procedures and restrictions set out in legislation. Unless otherwise provided by the terms of issue and without prejudice to the rights attached to any preference share to participate in any return of capital, the rights, privileges, limitations and restrictions attached to any preference share shall be deemed not to be varied, altered or abrogated by a reduction in any share capital ranking as regards participation in the profits and assets of the Company pari passu with or after that preference share. (d) Variation of Rights: Whenever the share capital is divided into different classes of shares, the rights attached to any class may be varied or abrogated with the consent in writing of the holders of three-fourths in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of the class and may be so varied or abrogated either whilst the Company is a going concern or during or in contemplation of a winding-up. Ordinary Shares Ordinary Shares carry a right to attend and vote at any general meeting of the Company, a right to participate in a winding up and a right to receive a dividend. Preference Shares Preference shares may be issued with such rights and privileges (save as for voting rights), and subject to such restrictions and limitations, as the Directors of the Company shall determine in the resolution approving the issue of such Preference 133
  • Shares save that the rights attached to any preference share issued by the Company shall be limited in the manner required for an Irish REIT by the Irish REIT Regime. Transfer of Shares (a) Form of instrument of transfer: Subject to such of the restrictions of the Articles and to such of the conditions of issue of transfer as may be applicable, the shares of any Member may be transferred by instrument in writing in any usual or common form or any other form which the Directors may approve. Title to any shares in the Company may be evidenced without a share certificate or certificates, and title to any shares in the Company may be transferred by means of a computer-based system and procedure (or any other appropriate system and procedures) which, inter alia, enable title to shares to be transferred without a written instrument, in each case in accordance with regulations made from time to time under Section 239 of the 1990 Act or in accordance with any other statutory provisions or regulations having similar effect. The instrument of transfer of any share shall be executed by or on behalf of the transferor. The transferor shall be deemed to remain the Holder of the share until the name of the transferee is entered in the register in respect thereof. (b) The Directors in their absolute discretion and without assigning any reason therefor may decline to register:(i) any transfer of a share which is not fully paid; (ii) any transfer to or by a minor or person with a mental disorder (as defined by the Mental Health Act 2001); (iii) any transfer by any person to whom a Transfer Notice (as defined in Article S(f)(i) of the Articles) has been given under Article S(f)(i) of the Articles; (iv) any share which is a Restricted Share (as defined in Article 66 of the Articles) under Article 66 of the Articles; or (v) any transfer of all or any part of a Substantial Shareholding, or any transfer by a Relevant Registered Shareholder or by a Substantial Shareholder (in each case as those terms are defined in Article 9; provided that the refusal to register the transfer does not prevent dealings in the shares from taking place on an open and proper basis. (c) The Directors may decline to recognise any instrument of transfer unless:(i) (ii) the instrument of transfer is in respect of one class of share only; (iii) the instrument of transfer is in favour of not more than four transferees; (iv) the instrument of transfer is lodged at the Office or at such other place as the Directors may appoint; (v) the Directors are satisfied that all applicable consents, authorisations, permissions or other approvals or any governmental body or agency in Ireland or any other applicable jurisdiction required to be obtained under relevant law prior to such transfer have been obtained; and (vi) (d) the instrument of transfer is accompanied by the certificate of the shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer (save where the transferor is a Stock Exchange Nominee (as defined in Article I of the Articles)); the Directors are satisfied that the transfer would not violate the terms of any agreement to which the Company (or any of its subsidiaries) and the transferor are part or subject. The Directors may decline to register any transfer of shares in uncertificated form only in such circumstances as may be permitted or required by the CREST Regulations. The Board may refuse to register a transfer of shares in the capital of the Company if the transfer is in favour of any person, as determined by the Directors, to whom a sale or transfer of shares, or whose direct, indirect or beneficial 134
  • ownership of shares, would or might (i) cause the Company to become an "investment company" under the US Investment Company Act (including because the holder of the shares is not a "qualified purchaser" as defined in the US Investment Company Act) or to lose an exemption or status thereunder to which it might otherwise be entitled; (ii) cause the Company to be required to register under the US Exchange Act or any similar legislation; (iii) cause the Company not to be considered a "foreign private issuer" as such term is defined in Rule 3b-4(c) under the US Exchange Act; (iv) result in a person holding shares in violation of the transfer restrictions set forth in any offering memorandum published by the Company, from time to time; (v) result in any shares being owned, directly or indirectly, by Benefit Plan Investors or Controlling Persons other than, in the case of Benefit Plan Investors, Shareholders that acquire the shares on or prior to Admission with the written consent of the Company, and, in the case of Controlling Persons, Shareholders that acquire the shares with the written consent of the Company; (vi) cause the assets of the Company to be considered "plan assets" under the Plan Asset Regulations; (vii) cause the Company to be a "controlled foreign corporation" for the purposes of the Code; (viii) result in shares being owned by a person whose giving, or deemed giving, of the representations as to ERISA and the Code set forth in the Articles is or is subsequently shown to be false or misleading; or (ix) otherwise result in the Company incurring a liability to taxation or suffering any pecuniary, fiscal, administrative or regulatory or similar disadvantage (any such person a "Non-Qualified Holder"). In addition, if it comes to the notice of the Company that any shares are owned directly, indirectly or beneficially by any Non-Qualified Holder, the Board may, under the Articles, serve a notice upon such Non-Qualified Holder requiring such Non-Qualified Holder to transfer the Ordinary Shares to an eligible transferee within 14 days of such notice; and, if the obligation to transfer is not met, the Company may compulsorily transfer the Ordinary Shares in a manner consistent with the restrictions set forth in the Articles. Dividends and other Distributions (a) Declaration of dividends: Subject to the provisions of the Irish Companies Acts, the Company by ordinary resolution may declare dividends in accordance with the respective rights of the Shareholders, but no dividend shall exceed the amount recommended by the Directors. (b) Scrip dividends: The Directors may, if authorised by an ordinary resolution ofthe Company, offer any holders of ordinary shares the right to elect to receive ordinary shares, credited as fully paid, instead of cash in respect of the whole (or some part, to be determined by the Directors) of any dividend specified by the ordinary resolution. The additional ordinary shares when allotted shall rank pari passu in all respects with the fully-paid ordinary shares then in issue except that they will not be entitled to participation in the relevant dividend. (c) Interim and fixed dividends: Subject to the provisions of the Irish Companies Acts, the Directors may declare and pay interim dividends if it appears to them that they are justified by the profits of the Company available for distribution. If the share capital is divided into different classes, the Directors may declare and pay interim dividends on shares which confer deferred or non-preferred rights with regard to dividends as well as on shares which confer preferential rights with regard to dividends, but subject always to any restrictions for the time being in force (whether under the Articles of Association, under the terms of issue of any shares, or under any agreement to which the Company is a party or otherwise) relating to the application, or the priority of application, of the Company's profits available for distribution or to the declaration or as the case may be the payment of dividends by the Company. Subject as aforesaid, the Directors may also pay at intervals settled by them any dividend payable at a fixed rate if it appears to them that the profits available for distribution justify the payment. Provided the Directors act in good faith they shall not incur any liability to the holders of shares conferring preferred rights for any loss they may suffer by the lawful payment of an interim dividend on any shares having deferred or non-preferred rights. (d) Payment of dividends: Except as otherwise provided by the rights attached to shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is paid. Subject as aforesaid, all dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid; but, if any share is issued on terms providing that it shall rank in priority for dividend as from a particular date, such share shall rank in priority for dividend accordingly. For the purposes of this Article, no amount paid on a share in advance of calls shall be treated as paid on a share. 135
  • (e) If several persons are registered as joint holders of any share, any one ofthem may give effectual receipts for any dividend or other moneys payable on or in respect of the share. (f) Any dividend may at the discretion of the Directors and at the sole risk of the person or persons entitled thereto be paid in any currency and in such manner as may be approved by the Directors from time to time. (g) Deductions from dividends: The Directors may deduct from any dividend or other moneys payable to any member in respect of a share any moneys presently payable by him to the Company in respect of that share. (h) Dividends in specie: A general meeting declaring a dividend may direct, upon the recommendation of the Directors, that it shall be satisfied wholly or partly by the distribution of assets (and, in particular, of paid up shares, debentures or debenture stock of any other company or in any one or more of such ways) and the Directors shall give effect to such resolution. (i) Payment of dividends by post or electronic funds transfer system: Any dividend or other moneys payable in respect of any share may be paid (whether in euro or any other currency) by cheque or warrant sent by post, or by electronic payment method which the Board may from time to time decide, in each case at the risk of the person or persons entitled thereto, to the registered address of the Holder or, where there are joint holders, to the registered address of that one ofthe joint holders who is first named on the Register or to such person and to such address as the holder or joint holders may in writing direct. (j) Dividends not to bear interest: No dividend or other moneys payable by the Company on or in respect of any shares shall bear interest against the Company unless otherwise provided by the rights attached to the shares. (k) The Shareholders at a general meeting may vote to direct, upon the recommendation of the Directors, that dividends be paid wholly or partly by the distribution of assets (and, in particular, of paid up shares, debentures or debenture stock of any other company or in any one or more of such ways). General Meetings The Company shall hold in each year a general meeting as its annual general meeting in addition to any other meeting in that year and shall specify the meeting as such in the notices calling it. Not more than 15 months shall elapse between the date of one annual general meeting and that of the next. The Directors may convene general meetings. Extraordinary general meetings may also be convened on such requisition, or in default may be convened by such requisitionists, and in such manner as may be provided by the Acts. All general meetings of the Company shall be held in Ireland unless otherwise determined by ordinary resolution of the members. Quorum No business other than the appointment of a chairman shall be transacted at any general meeting unless a quorum is present at the time when the meeting proceeds to business. Two members present in person or by proxy shall be a quorum. Voting Rights (a) Votes of Members: Votes may be given either personally or by proxy. Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a show of hands every member present in person and every proxy shall have one vote, so, however, that no individual shall have more than one vote, and on a poll every Member shall have one vote for every share carrying voting rights of which he is the Holder. The Chairman shall be entitled to a casting vote where there is an equality of votes. (b) Resolutions: Resolutions are categorised as either ordinary or special resolutions. The essential difference between an ordinary resolution and a special resolution is that a bare majority of more than 50% of the votes cast by members voting on the relevant resolution is required for the passing of an ordinary resolution, whereas a qualified majority of more than 75% of the votes cast by members voting on the relevant resolution is required in order to pass a special resolution. Matters requiring a special resolution include for example: • altering the objects of the Company; 136
  • • altering the articles of association of the Company; and • approving a change of the Company's name. Distribution of Assets on Winding Up In the event that the Company is wound up and the assets available for distribution among the members as such are insufficient to repay the whole of the paid up, or credited as paid up, share capital, the assets shall be distributed so that, as nearly as may be, the losses will be borne by the members in proportion to the capital paid up or credited as paid up at the commencement of the winding up on the shares held by them respectively. If, however, the assets available for distribution among the members are more than sufficient to repay the whole of the share capital as paid up or credited as paid up at the commencement of the winding up, the excess shall be distributed among the members in proportion to the capital at the commencement of the winding up paid up or credited as paid up on the said share held by them respectively. Unclaimed Dividends If the Directors so resolve, any dividend which has remained unclaimed for 12 years from the date of its declaration shall be forfeited and cease to remain owing by the Company. The payment by the Directors of any unclaimed dividend or other moneys payable in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof. Any dividend, interest or other sum payable which remains unclaimed for one year after having been declared may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. Untraced Shareholders The Company may sell any shares in the Company on behalf of a holder of such shares, or person entitled by transmission to such shares, if, during the previous 12 years: (a) at least three cash dividends have become payable on the shares; (b) no cash dividend payable on the shares has been claimed; (c) the Company has not received at any time during the relevant period any communication, so far as the Company at the end of the relevant period is then aware, from the holder of, or person entitled by transmission to, the shares; (d) the Company has caused advertisements giving notice of its intention to sell the shares to be published in a leading daily Irish newspaper and another in a newspaper circulating in the area of the address shown in the register of the holder of, or person entitled by transmission to, the untraced shares, and (in either such case) a period of three months has elapsed from the date of publication ofthe advertisement; and (e) the relevant stock exchange has been notified of the proposed sale. Purchase of Own Shares Subject to and in accordance with the provisions of the Irish Companies Acts and without prejudice to any relevant special rights attached to any class of shares the Company may purchase all or any of its shares of any class so that any shares so purchased may be selected in any manner whatsoever and cancelled or held by the Company as treasury shares. The Company shall not make a purchase of shares in the company unless the purchase has first been authorised by a special resolution of the Company and by a special resolution passed at a separate general meeting of the holders of each class of shares or a resolution passed by a majority representing three-fourths in nominal value of the issued shares of any class or classes at a separate general meeting of the holders of Company's loan stock (if any), which, at the date on which the purchase is authorised by the Company in general meeting entitle them, either immediately or at any time subsequently, to convert all or any of the shares or loan stock of that class held by them into equity share capital of the Company. 137
  • Directors Unless otherwise determined by the Company in a general meeting, the number of Directors shall not be more than ten nor less than two. A Director is not required to hold shares in the Company. Two Directors present at a Directors' meeting shall be a quorum. As at the date of the Prospectus, the Directors are as set out in Part IX (Directors and C01porate Governance). Any further Directors will be appointed pursuant to the Articles. Under the Articles, at each annual general meeting of the Company one-third of the Directors are required to retire from office, and those required to retire are determined by reference to those longest in office since last re-appointment. Retiring Directors may be re-appointed. However, in accordance with best corporate practice, all Directors intend to put themselves forward for re-election at each annual general meeting. No person other than a retiring Director may be appointed as a Director at any general meeting unless (i) such person has been recommended by the Directors or (ii) a draft resolution for the appointment of such person, proposed by a member or members holding not less than 3% of the issued share capital representing not less than 3% of the voting rights of all the members who have a right to vote at the meeting, shall have been received by the Company (accompanied by appropriate details), in the case of an AGM, at least 42 days before the proposed date of the meeting, and, in the case of a general meeting other than an AGM, not less than 30 days before the proposed date of the meeting. Any Director of the Company who holds any executive office or who serves on any committee, or who otherwise performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, may be paid such extra remuneration by way of salary, commission or otherwise as the Directors may determine. The ordinary remuneration of the Directors shall be determined from time to time by the Board. The Directors of the Company may provide benefits, whether by way of pensions, gratuities, or otherwise, for any Director, former Director or other officer or former officer of the Company, or to any person who holds or has held any employment with the Company or with any body corporate which is or has been a subsidiary or associated company of the Company or a predecessor in business of the Company or of any such subsidiary or associated company, and to any member of his family or any person who is or was dependent on him and may set up, establish, support, alter, maintain and continue any scheme for providing all or any of such benefits and for such purposes any Director accordingly may be, become or remain a member of, or rejoin, any scheme and receive and retain for his own benefit all benefits to which he may be or become entitled thereunder. The Directors of the Company may pay out of the funds of the Company any premiums, contributions or sums payable by the Company under the provisions of any such scheme in respect of any of the persons or class of persons above referred to who are or may be or become members thereof. Subject to the provisions of the Acts, and provided that he has disclosed to the Directors the nature and extent of any material interest of his, a Director notwithstanding his office: (a) may be a party to, or otherwise interested in, any transaction or arrangement with the Company or any subsidiary or associated company thereof or in which the Company or any subsidiary or associated company thereof is otherwise interested; (b) may be a Director or other officer of, or employed by or provide services to or have an interest in any investment manager to the Company from time to time; (c) may be a Director or other officer of, or employed by, or a party to any transaction or arrangement with, or otherwise interested in, any body corporate promoted by the Company or in which the Company or any subsidiary or associated company thereof is otherwise interested; and (d) shall not be accountable, by reason of his office, to the Company for any benefit which he derives from any such office or employment or from any such transaction or arrangement or from any interest in any such body corporate and no such transaction or arrangement shall be liable to be avoided on the ground of any such interest or benefit. 138
  • Save as otherwise provided by these Articles, a Director shall not vote at a meeting of the Directors or a committee of Directors on any resolution concerning a matter in which he has, directly or indirectly, an interest which is material or a duty which conflicts or may conflict with the interests of the Company. A Director shall not be counted in the quorum present at a meeting in relation to any such resolution on which he is not entitled to vote. A Director shall be entitled (in the absence of some other material interest than is indicated below) to vote (and be counted in the quomm) in respect of any resolutions concerning any of the following matters, namely: (a) the giving of any security, guarantee or indemnity to him in respect of money lent by him to the Company or any of its subsidiary or associated companies or obligations incurred by him or by any other person at the request of or for the benefit of the Company or any of its subsidiary or associated companies; (b) the giving of any security, guarantee or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiary or associated companies for which he himself has assumed responsibility in whole or in part and whether alone or jointly with others under a guarantee or indemnity or by the giving of security; (c) any proposal concerning any offer of shares or debentures or other securities of or by the Company or any of its subsidiary or associated companies for subscription, purchase or exchange in which offer he is or is to be interested as a participant in the underwriting or sub-underwriting thereof; (d) any proposal concerning any other company in which he is interested, directly or indirectly and whether as an officer or shareholder or otherwise howsoever, provided that he is not the Holder of or beneficially interested in 1% or more of the issued shares of any class of such company or of the voting rights available to members of such company (or of a third company through which his interest is derived) any such interest being deemed to be a material interest in all circumstances; (e) any proposal concerning the adoption, modification or operation of a superannuation fund or retirement benefits scheme under which he may benefit and which has been approved by or is subject to and conditional upon approval for taxation purposes by the appropriate Revenue authorities; (f) any proposal concerning the adoption, modification or operation of any scheme for enabling employees (including full time executive Directors if any) of the Company and/or any subsidiary thereof to acquire shares in the Company or any arrangement for the benefit of employees of the Company or any of its subsidiaries under which the Director benefits or may benefit; or (g) any proposal concerning the giving of any indemnity of the type referred to under the heading "Indemnity of Officers" in this paragraph 6.2 of this Part XV (Additional Information) or the discharge of the cost of any insurance cover which the Directors propose to purchase or maintain for the benefit of persons (including Directors) pursuant to the Articles. In the event of any question arising as to the entitlement of any Director to vote at a Board Meeting, the matter shall be decided by the chairman of the meeting. The Company, by ordinary resolution of which extended notice of at least 28 days has been given in accordance with the provisions of the Irish Companies Acts, may remove any Director before the expiry of his period of office notwithstanding anything in the Articles or in any agreement between the Company and such Director. This does not prevent such a person from claiming compensation or damages in respect of the termination. Borrowing Powers The Directors may exercise all the powers of the Company to borrow or raise money and to mortgage or charge its undertaking, property, assets and uncalled capital or any part thereof and, subject to Part III of the Companies (Amendment) Act 1983, to issue debentures, debenture stock and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party, without any limitation as to amount. 139
  • Indemnity of Officers Subject to the provisions of, and so far as may be permitted by, the Irish Companies Acts, every Director, auditor, secretary or other officer of the Company shall be entitled to be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred by him in the execution and discharge of his duties or in relation thereto including any liability incurred by him in defending any proceedings, civil or criminal, which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of the Company and in which judgment is given in his favour (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his part) or in which he is acquitted or in connection with any application under any statute for relief from liability in respect of any such act or omission in which relief is granted to him by the Court. Certain US and US-related Tax Matters The Company is authorised to take any action it determines is desirable to comply with FA TCA and may enter into an agreement with the US Internal Revenue Service or the taxing and revenue services of any other country. The Company shall not pay any additional amounts to any person in respect of any withholding of taxes, including those relating to FA TCA. The Company is not required to make available the information necessary for any person to make a so-called "qualified electing fund" election under US tax law. Disclosure of Shareholder Interests In addition to any other right or power of the Company under the Irish Companies Acts, the Directors of the Company may at any time and from time to time by notice in writing require any member, or other person, appearing to the directors to be interested or to have been interested in shares in the Company to disclose to the Company in writing, within a prescribed period, such information relating to the ownership of or interests in those shares as the Directors shall require. If at any time the Directors are satisfied that any member has been served with such a notice and is in default for the prescribed period in supplying to the Company the information thereby required, then the Directors may in their absolute discretion at any time thereafter by notice to such member direct that in respect of the shares in relation to which the default occurred (which expression shall include any further shares which are issued in respect of such shares) the member shall not be entitled to attend or to vote either personally or by proxy at a general meeting of the Company. In addition, where the shares in question represent at least 0.25% of the issued shares of that class, the Directors shall be entitled (to the extent permitted from time to time by the Listing Rules): (a) except in a liquidation ofthe Company, to withhold payment of any sums due from the Company on the shares in question, whether in respect of capital or dividend or otherwise, and the Company shall not have any liability to pay interest on any such payment when it is finally paid to the member; and/or (b) to refuse to register any transfer of the relevant shares (other than a transfer made as part of a sale to a bona fide third party unconnected with the member, including any such sale made through the Irish Stock Exchange or the London Stock Exchange, on receipt by the Directors of evidence satisfactory to them that such is the case). Property Income Distributions to Substantial Shareholders The Articles include provisions similar to those adopted by UK REITs in order to enable the Company to demonstrate to the Irish Revenue that it has taken reasonable steps to avoid paying a Property Income Distribution to a Substantial Shareholder (the "REIT provisions"). If a Property Income Distribution is paid to a Substantial Shareholder and the Company has not taken reasonable steps to avoid doing so, the Company would become subject to an additional tax charge. Unless otherwise authorised by a special resolution of the Company, the Board shall use all reasonable endeavours to manage the business of the Company in accordance with the Irish REIT Regime and otherwise in a manner so that the Company shall remain an Irish REIT at all times upon becoming an Irish REIT. 140
  • The relevant provisions of the Articles: (a) provide Directors of the Company with powers to identify Substantial Shareholders and Relevant Registered Shareholders, including the power to require a Shareholder to deliver to the Company such information as is required to determine whether they are a Substantial Shareholder; (b) oblige Shareholders to disclose the fact of their becoming a Substantial Shareholder or a Relevant Registered Shareholder; (c) prohibit the payment of Property Income Distribution on or in respect of shares that form part of a Substantial Shareholding, unless certain conditions are met; (d) allow Property Income Distributions to be paid on shares that form part of a Substantial Shareholding where the Shareholder has disposed of sufficient of its interests in all or some of the shares concerned so that such transferred shares no longer form part of the Substantial Shareholding (provided that following such transfer such shares concerns do not form part of a Substantial Shareholding); and (e) provide that where Property Income Distribution is paid on or in respect of a Substantial Shareholding, such Property Income Distribution and any income arising from it shall be held on trust for those persons to be nominated by the relevant Substantial Shareholder. Failing valid nomination being made within 12 years of the Property Income Distribution being made, for the Company or such other persons as may be nominated by the Directors from time to time. Where any Property Income Distribution is paid on a Substantial Shareholding the Substantial Shareholder shall pay on demand all tax and other amounts which the Directors consider may become payable by the Company under the Irish REIT Regime, any interest, penalties, fines or surcharge attribute to such tax and all costs and expenses incurred by the Company in connection with the recovery of such amount to the Company. Without prejudice to the right of the Company to claim such amount from the Substantial Shareholder, recovery may be made out of the proceeds of a disposal of the relevant shares or out of any subsequent Property Income Distribution in respect of the shares. The Articles also allow the Directors to require the disposal of shares in the Company by giving notice in writing to the persons they believe are Relevant Registered Shareholders in respect of the relevant shares if: (a) the Director believes such shares comprise all or part of a Substantial Shareholding of a Substantial Shareholder; (b) there has been a failure to comply with a notice given by the Directors to the satisfaction of the Directors within the period specified in such notice; or (c) any information, certificate or declaration provided by any person in relation to shares in the Company for the purpose of the REIT provisions was materially inaccurate or misleading. If a disposal of shares in the Company required by the Directors is not completed to the satisfaction ofthe Directors within the timeframe specified in the relevant notice (or the notice is not withdrawn) or the Company incurs costs as a result of a Property Income Distribution having been paid on a Substantial Shareholding, the Directors may arrange for the sale of the relevant shares. The REIT provisions may be amended by special resolution of the Company from time to time, including to give powers to the Directors as they may require in order to ensure the Company satisfies the requirements of the Irish REIT legislation which relates to close company status, which powers may include the ability to arrange for the sale of shares on behalf of Shareholders. See paragraph 1.2 of Part XII (Irish REIT Regime and Taxation Information) for information on the conditions a company must satisfy in order to qualify as an Irish REIT. 7. EMPLOYEES The Company does not have any employees. 141
  • 8. WORKING CAPITAL In the opinion of the Company, taking into consideration the Net Proceeds to be received by the Company from the Issue, the working capital available to the Company is sufficient for the Company's present requirements and, in particular, is sufficient for at least the next 12 months from the date of this Prospectus. 9. SIGNIFICANT CHANGE Since its incorporation on 13 August 2013, the Company has not carried on business or incurred borrowings and there has been no significant change in the financial or trading position of the Company since 31 October 2013 (the date to which the financial information reported on in the accountant's report in respect of the Company in Part X (Historical Financial Information) was prepared). The Issue will represent a significant gross change for the Company. At the date of this Prospectus and until Admission, the assets of the Company are and will be €40,000. Under the Issue, on the basis that 364,600,000 Ordinary Shares are to 25 be issued, the net assets of the Company would increase by approximately €352,360,000 immediately after Admission. 10. RELATED PARTY TRANSACTIONS 10.1. The REIT Investment Management Agreement has been entered into between the Company and the Investment Manager. The Investment Manager is wholly-owned and controlled by WKN and by Frank J. Kenny and each member of the Management Team is also a Director of the Investment Manager. See paragraph 11.1 of this Part XV (Additional Information) of this Prospectus for a summary of the REIT Investment Management Agreement. 10.2. Directors' shareholdings Paragraph 3 of Part IX (Directors and Corporate Governance) of this Prospectus sets out the interests of the Directors in the share capital of the Company as at S December 2013 (the latest practicable date prior to the issue of this Prospectus). 11. MATERIAL CONTRACTS The following is a summary of the material contracts (other than contracts entered into in the ordinary course of business) which have been entered into by the Company since incorporation and any other contracts which have been entered into by the Company which contain any provision under which the Company has any obligation or entitlement which is or may be material to the Company at the date of this Prospectus. 11.1. REIT Investment Management Agreement REIT Investment Management Agreement The REIT Investment Management Agreement entered into by the Company and the Investment Manager shall govern the investment management services to be provided to the Company by the Investment Manager. The services to be provided by the Investment Manager include property acquisition (for example, to advise on and actively seek to identify and thereafter, (subject to Board approval, as appropriate,) negotiate the acquisition of appropriate properties having regard to the Company's investment policy), property management (for example, to select, appoint and manage specialist property management service providers), portfolio management services (for example, to advise on all aspects of the property portfolio including disposals, redevelopment and refurbishment) and the provision or procurement of accounting and other administration services. 25 Assuming no exercise of the Over-allotment Option and deducting estimated transaction fees and expenses of €12,600,000 from the estimated gross proceeds of €364,960,000. 142
  • The Company will invest in assets identified by the Investment Manager in accordance with the Company's investment policy as set out in paragraph 3 of Part VII (/'!formation on the Company). No assets can be acquired by the Company other than in accordance with the investment policy unless Shareholder approval is given. Authority The Investment Manager has discretionary authority to enter into transactions for and on behalf of the Company subject to certain reserved matters which require the consent of the Board. Such reserved matters include the (i) acquisition of a property investment; (ii) disposal of a property investment or the entry into any option to dispose of a property investment where the aggregate consideration payable in respect of such disposals is in excess of €1 0 million; (iii) surrender of leases where the rent referable to the relevant lease is greater than 25% of the aggregate rental income of the relevant property or 5% of the aggregate rental income of the Company; (iv) acquisition or entering into any agreement to acquire any property investment where the acquisition is proposed to be made through a joint venture or co-investment structure; (v) arrangement of any financing or refinancing, or related matters including hedging or use of derivatives; (vi) capital expenditure on a property investment in excess of €5 million; (vii) entering into any pre-funding agreement and (viii) engagement or instruction on any valuations on a basis other than the rues Red Book or other guidance published by the rues. A Company corporate governance structure is in place to ensure that any reserved matters which require the consent of the Board are approved at a board meeting attended by an appropriate number of Directors. Term and Termination The REIT Investment Management Agreement has an initial term of five years and thereafter shall continue for consecutive three year periods. Unless terminated on twelve months' prior notice with effect from the expiry of the five year period it shall continue thereafter for consecutive three year renewal periods until terminated by either party giving not less than 12 months' prior notice in writing to the other party terminating the REIT Investment Management Agreement with effect from the end of a renewal period. A 12 month notice period shall be applicable in respect of both the Company and the Investment Manager with the earliest termination (without cause) being at the end of the initial five year period (and at the end of every subsequent three year period, as applicable. Matters relating to insolvency, breach and key persons shall also provide termination entitlements. In addition, the Directors and the Investment Manager currently intend that, at the expiry of the initial five year term of the REIT Investment Management Agreement and subject to the EPRA NAV of the Company then being not less than €650,000,000, the Company and the Investment Manager would seek that individuals comprising the Management Team of the Investment Manager would become an internal resource within the Company and in lieu of a continued engagement of the Investment Manager by the Company. The terms under which such engagement may occur will be a matter to be agreed at the relevant time; and the Directors and the Investment Manager would not anticipate such terms including any material increased costs for the Company as a result, or involving the payment of any consideration or other amounts in connection with such engagement other than salaries and benefits and/or fees on market commercial terms in connection with the services provided by the relevant individuals and any regulatory costs and minimum capital requirements that may be required as a result of such direct engagement. However, there is no certainty that such an arrangement will occur. If any of the Key Personnel cease to be significantly involved in the delivery of the services pursuant to the REIT Investment Management Agreement by the Investment Manager, the Investment Manager shall take all reasonable steps to ensure that he is replaced by a person of materially similar experience, which replacement will be subject to the prior written approval (acting reasonably) of the Company, provided that where the Investment Manager has not replaced any of the Key Personnel within six months of him ceasing to be involved in the delivery of the services pursuant to the REIT Investment Management Agreement (or such longer period as the parties may agree in writing from time to time), the Company may terminate the REIT Investment Management Agreement by giving at least thirty days' notice in writing to the Investment Manager. Either party may terminate the REIT Investment Management Agreement immediately by notice in writing to the other party if: (i) the Directors have resolved to cease trading and completion of the sale of the Company's final Property has occurred; (ii) the other party commits any material breach of its obligations under the REIT Investment Management Agreement and (if such breach shall be capable of remedy) fails within 30 days' of receipt of notice served by the terminating party requiring it so to do to make good such breach; (iii) the other party is unable to perform its duties under 143
  • the agreement due to any change in law or regulatory practice and/or because it ceases to held all necessary regulatory consents, licences, authorisations, approvals or equivalent; (iv) an encumbrancer takes possession of, or a receiver, examiner or other similar officer is appointed in respect of, all or any material part of the business or assets of the other party, or any mortgage or charge, howsoever created or arising, over any of its assets is enforced; (v) the other party is unable or deemed to be unable to pay its debts as they fall due pursuant to Section 214(c) of the 1963 Act or any scheme of arrangement of the affairs of the other party, or compromise or arrangement between it and its creditors (or any class thereof), has been proposed, sanctioned or approved; (vi) a petition is presented or any corporate action, legal proceedings or other step is taken for the purpose of winding up, or appointing a liquidator to, the other party which is not withdrawn within thirty (30) business days or which cannot reasonably be shown to be frivolous, vexatious or an abuse ofthe process of the court or to relate to a claim to which the other party has a good defence and which is being contested in good faith by the other party; (vii) an order is made or resolution passed for the winding up of the other party or a notice is issued convening a meeting for the purpose of passing any such resolution; (viii) any petition is presented for the purpose of the appointment of a receiver, examiner or similar officer in respect of the other party; (ix) the other party suffers or undergoes any procedure analogous to any of those specified in paragraphs (iv) to (viii) above or any other procedure available in the country in which the other party is constituted, established or domiciled, against or to an insolvent debtor or available to the creditors of such a debtor, other than, in each case set out in (iv) to (ix) of this paragraph, an event happening for the purpose of a bona fide and solvent amalgamation, reorganisation or reconstruction; or (x) the Company's shares are not admitted to trading on the Stock Exchanges on or prior to 31 December 2013. The Company may terminate the REIT Investment Management Agreement on the giving of at least 30 days' prior written notice to the Investment Manager, in the event that (i) the Investment Manager has not replaced any of the Key Personnel with a person of materially similar experience within six months of him ceasing to be significantly involved in the delivery of the services to be provided by the Investment Manager pursuant to the REIT Investment Management Agreement; or (ii) there is a change of control of the Investment Manager (such that it was no longer controlled by the Key Personnel or any of them). The REIT Investment Management Agreement may be terminated at any time by the Investment Manager, on the giving of at least 30 days' notice to the Company, in circumstances where it has notified the Company in writing that it cannot ensure compliance by the Company with the requirements of the AIFMD or Irish implementing regulations applicable to the Company due to the Company's acts or omissions and the Company has failed to rectify such matter within 60 days' of receipt of such notification The REIT Investment Management Agreement may also terminate on such other date as may be agreed in writing between the parties. During the transition period between any termination of the REIT Investment Management Agreement and the appointment of a replacement investment manager, the Investment Manager is required to co-operate with the Company to ensure the orderly transition to the new investment manager subject to the Investment Manager being paid the Base Fee during such period. Base Fee The Base Fee in respect of each Quarter will be calculated by reference to the sum of: (i) 0.25% of that portion of EPRA NAV (excluding any uninvested Net Proceeds) at the end of that Quarter that is less than or equal to €450,000,000, (ii) 0.2% of that portion ofEPRA NAV (excluding any uninvested Net Proceeds) at the end of that Quarter that is greater than €450,000,000 but less than or equal to €600,000,000, (iii) 0.15% of that portion ofEPRA NAV (excluding any uninvested Net Proceeds) at the end of that Quarter that is greater than €600,000,000, and (iv) 0.125% of any uninvested Net Proceeds at the end of that Quarter. The Base Fee will be paid to the Investment Manager quarterly in arrears, with the exception of the fee for the periods ending on 31 March 2014 and 30 June 2014, which shall be paid in advance to cover initial diligence and deal costs incurred by the Investment Manager. The base fees paid in advance will be calculated based on 0.125% of Net Proceeds raised per period and for the period ended 31 March 2014 will be increased pro-rata to reflect the period from Admission to 31 December 2013. Should any of the Net Proceeds be invested in the period to 31 March 2014 or 30 June 2014, any incremental fees due from the fee arrangements set out above in addition to those monies already advanced to the Investment Manager will be paid quarterly in arrears. 144
  • Performance Fee The Performance Fee has been designed to incentivise and reward the Investment Manager for generating returns to Shareholders and to outperform the Reference Index annual return. The return to Shareholders in an Accounting Period is the sum of the change in the EPRA NAV per Ordinary Share and the total dividends per Ordinary Share that are declared in the Accounting Period (adjusted to exclude the effects of any issuance of Ordinary Shares during that Accounting Period) ("REIT IMA Shareholder Return"). The Performance Fee is calculated annually on a per Ordinary Share basis as to 50% by reference to REIT IMA Shareholder Return and as to 50% by reference to outperformance of the Reference Index. REIT IMA Shareholder Return Performance Fee Following the end of each Accounting Period, the Investment Manager shall be entitled to be paid by the Company a fee equal to 50% of the lesser of: (I) (i) I5% of the excess of REIT lMA Shareholder Return over a I 0% annual return hurdle up to a IS% annual return hurdle~ (ii) 20% ofthe excess ofREIT IMA Shareholder Return over a 15% annual return hurdle: and (2) 20% of the excess of the year-end EPRA NA V per Ordinary Share (which is adjusted to include total dividends declared in the Accounting Period and adjusted to exclude the effects of any issuance of Ordinary Shares during that Accounting Period) over the relevant high watermark per Ordinary Share, provided always that the numerical results of both (I) and (2) above are each greater than zero for the Accounting Period in question (the "REIT IMA Shareholder Return Performance Fee"). The annual return hurdles reset annually to IO% and IS% (as applicable) of the previous Accounting Period's closing EPRA NA V per Ordinary Share. The relevant high watermark in each Accounting Period is the highest EPRA NAV per Ordinary Share (adjusted to include total dividends declared during the most recent Accounting Period in which a Performance Fee was payable (the "reference Accounting Period") and adjusted to exclude the effects of any issuance of Ordinary Shares during the reference Accounting Period) achieved in the reference Accounting Period or, if greater, the gross proceeds of the Issue plus further cash and non-cash issues of Ordinary Shares (excluding any issues of Performance Fee Shares) calculated on a per Ordinary Share basis, as at the end of the Accounting Period in respect of which the Performance Fee is calculated. Relative Performance Fee In addition to the REIT IMA Shareholder Return Performance Fee, the Investment Manager is entitled to a Relative Performance Fee to incentivise and reward the Investment Manager for generating a total property return in excess of the Reference Index. The published methodology employed by IPD for calculating total property return excludes properties that are purchased, sold or in the course of development during the measurement period. IPD publishes the Reference Index on an annual basis in accordance with its published methodologies and formulae. IPD has agreed with the Company to calculate the total property return of the Company's Property Portfolio for each Accounting Period on the same basis and applying the same methodologies and formulae as are used by IPD to determine the Reference Index. The published methodology employed by IPD for calculating total property return excludes properties that are purchased, sold or in the course of development during the measurement period. IPD wiii notify the Company and the Investment Manager of the total return of the Company's Property Portfolio and the total return of the Reference Index during each Accounting Period. The total return of the Company's Property Portfolio in each Accounting Period as calculated by IPD wiii be expressed as both a monetary amount (the "Portfolio Return") and as a percentage return (the "Portfolio Percentage Return"). The difference between the total percentage return of the Reference Index and the Portfolio Percentage Return for an Accounting Period (the "Relative Performance Percentage"), if positive, wiii be used to determine the outperformance of the Portfolio Return. I45
  • A monetary amount (''the Relative Outperformance Figure") will be calculated by multiplying the Portfolio Return by the percentage that the Relative Performance Percentage represents of the Portfolio Percentage Return for that Reference Period. The following hurdle must also be overcome before a Relative Performance Fee becomes payable in respect of any Accounting Period (each a "Reference Period"): The Relative Performance Percentage relating to the First Accounting Period must be carried forward and aggregated with the Relative Performance Percentage in the immediately following Accounting Period. The resulting percentage figure must, in tum, be carried forward and aggregated with the Relative Performance Percentage in each successive Accounting Period preceding a Reference Period. A Relative Performance Fee will only be payable in respect of a Reference Period if and only to the extent that the Relative Performance Percentage in the Reference Period as reduced by the amount of any negative Relative Performance Percentage so carried forward itself results in a positive figure. Subject to overcoming this hurdle, the Relative Performance Fee is calculated at a rate of 50% of 30% of the Relative Outperformance Figure in each Reference Period. The derived Performance Fee payable on a per Ordinary Share basis under REIT IMA Shareholder Return Performance Fee above is then multiplied by the number of Ordinary Shares in issue at the year-end (but excluding, for that Accounting Period only, any Ordinary Shares issued during that Accounting Period), thereby increasing the multiplier for future years if any new Ordinary Shares are issued. EPRA-NAV will be a NAY calculated on the basis specified for calculations of "EPRA NAY" in guidelines issued by EPRA (August 2011 version only, unless otherwise agreed between the Company and the Investment Manager). In any calculation of such NA V as at a Valuation Point the value of the Property Portfolio taken into account in such calculation shall be the Open Market Value of the Properties at that Valuation Point and "NAV" as at the date of Admission shall be the amount of the Investment Equity (net of costs and expenses incurred by the Company in respect of the Admission and Placing). There is no maximum fee under the REIT Investment Management Agreement. The REIT Investment Management Agreement contains provisions to adjust the Performance Fee in certain circumstances. These circumstances are limited to amendments to take account of corporate actions which entail changes to the Company's share capital, such as consolidations, sub-divisions or bonus issues or other restructurings or reorganisations affecting its share capital. There are no such adjustment provisions in respect of the Base Fee. The Performance Fee will be payable in Ordinary Shares, rounded down to the nearest whole number, at a price per Ordinary Shares equal to the Average Closing Price (unless restricted by law or other regulation or if the Company otherwise determines that it is unable to issue or reissue Ordinary Shares in exchange for the Performance Fee, in which case it will be paid in cash) and will be subject to the following lock-in provisions (during which time there will be no disposal of the relevant portion of the Performance Fee Shares by the Investment Manager): -one third of the Performance Fee Shares (or cash) will be released from lock-in after 12 months; -one third of the Performance Fee Shares (or cash) will be released from lock-in after 24 months; and -one third ofthe Performance Fee Shares (or cash) will be released from lock-in after 36 months, unless a Lock-In Termination Event occurs, in which case they may be released earlier. The provisions permitting releases from the lock-in arrangements will be suspended if EPRA NA V falls below the gross proceeds of the Issue and any other subsequent equity issues excluding issues of Performance Fee Shares. After delivery of an invoice from the Investment Manager setting out the Investment Manager's statement of the Performance Fee the Company may agree it, in which case the Performance Fee shall become due and payable twenty business days after the date of the invoice. Alternatively, the Company may dispute the invoice by giving notice in writing to the Investment Manager within ten business days of receiving it. If the Company does dispute an invoice, the parties 146
  • shall negotiate in good faith to resolve the dispute, provided that if the parties do not reach agreement on the items in dispute within five business days of the Company having disputed it (or such longer period as they may agree in writing), the Performance Fee payable shall be determined by an independent expert by reference to the audited accounts of the Company in respect of the relevant Accounting Period, following the approval by the Directors of such audited accounts and the giving by the auditors of an unqualified audit opinion in respect of such accounts. The aforesaid invoice, as amended to reflect the agreement between the parties or the determination of the independent expert (as the case may be), shall constitute a statement of the Performance Fee payable to the Investment Manager in respect of the relevant Accounting Period and it shall become due and payable by the Company to the Investment Manager on the fifth business day following such agreement or determination. If, following the approval by the Board of the audited accounts ofthe Company and receipt of an unqualified audit opinion in respect of such accounts, the Company or the Investment Manager is reasonably of the opinion that the Base Fee and/or the Performance Fee (if any) already payable to the Investment Manager in respect of the relevant Accounting Period are greater than, or less than, the amount that should have been paid having regard to the audited accounts of the Company, the parties shall try to resolve the difference by agreement, provided that if the parties do not reach agreement, any adjustment shall be determined by an independent expert by reference to the audited accounts of the Company in respect of the relevant Accounting Period. Following the agreement or determination of any adjustment amount, the Investment Manager shall: (a) where the adjustment relates to an overpayment of fees, pay or otherwise refund that sum to the Company within 20 business days; or (b) where the adjustment relates to an underpayment of fees, deliver to the Company an invoice setting out the adjustment amount payable by the Company to the Investment Manager and such amount shall be deemed and be treated as a Performance Fee which fell due as of the date it should have been paid at originally (and the Average Closing Price in these circumstances for calculating the number of Performance Fee Shares to be allotted and issued shall be determined by reference to the date of the original invoice in respect of that Performance Fee). The Investment Manager shall use the Performance Fee due to it to subscribe for Ordinary Shares, subject to certain limited exceptions described further below. The Company's liability to pay the Performance Fee in respect of any Accounting Period shall be satisfied by the release by the Investment Manager of the sum due to it as that Performance Fee in consideration for the allotment and issue by the Company to the Investment Manager of such number of Performance Fee Shares, rounded down to the nearest whole number, as is determined by dividing the relevant Performance Fee by the Average Closing Price for the applicable period relating to that issue of Performance Fee Shares (such Average Closing Price being determined by reference to the period of twenty days prior to the business day immediately preceding the date of the invoice from the Investment Manager in respect of such Performance Fee). If the EPRA NAV as at the end of the Accounting Period immediately prior to any date on which a lock-in period expires is less than the Minimum EPRA NAV, no Performance Fee Shares shall vest in the Investment Manager free from lock-in on that day and such Performance Fee Shares shall instead vest in the Investment Manager free from lock-in on the day on which the next lock-in period expires following the end of the next Accounting Period when the EPRA NAVis equal to or greater than the Minimum EPRA NAV. If the Company determines (acting reasonably and having due regard to any reasonable representations made by the Investment Manager) that any or all of the Performance Fee Shares cannot be issued or re-issued by the Company to the Investment Manager on any relevant date for any reason, (including as a result of the application of any applicable law which prevents the issue or re-issue of Ordinary Shares on that date or if the issue of Ordinary Shares to the Investment Manager would result in (i) the Investment Manager being required to make a mandatory offer to Shareholders pursuant to the Irish Takeover Rules or other applicable law or (ii) the Company or the Investment Manager breaching the Irish "Takeover Rules or (iii) the Investment Manager becoming a Substantial Shareholder (despite the Investment Manager having used reasonable endeavours to dispose of sufficient Performance Fee Shares, where permitted by law, to avoid this occurring), or (iv) the Company breaching any Listing Rules, including, where applicable, any breach of UK Listing Rule 15.4.11, as a result of the price per Ordinary Share at which such Performance Fee Shares are to be issued or re-issued being less than the Net Asset Value per Ordinary Share last published by the Company via a Regulatory Information Service, then the Company shall instead pay the Performance Fee in cash into an escrow account that is to be established and opened in the joint names and under the joint control of the Company and the Investment Manager. Any cash Performance Fee paid into the escrow account shall be subject to the same lock-in periods as those described above in respect of the Performance Fee Shares and the Investment Manager shall be entitled to receive payment of that cash Performance Fee from the escrow account, plus any interest that is attributable thereto, in three equal tranches 12 months, 24 months and 36 months respectively after the relevant Performance Fee Due Date, unless a Lock-In Termination Event 147
  • occurs in which case any unpaid portion of the cash Performance Fee shall be immediately payable to the Investment Manager. Under the REIT Investment Management Agreement the Investment Manager is entitled to recover certain 'excluded costs' incurred by the Investment Manager that are paid to third parties. These excluded costs include advisory costs relating to valuations, rent review, disposals agency, legal fees, debt collection, specialist property management services of complex multi-united developments and administrative costs. Policies and Procedures Manual A Policies and Procedures Manual has been adopted by the Directors to document those procedures which will govern the day-to-day operations of the Company. The Policies and Procedures Manual sets out financial reporting and other procedures and policies of the Company and addresses the respective authority levels and responsibilities of the Company and the Investment Manager, the transactions which are the responsibility of either the Company or the Investment Manager, the authorisations required in order to effect those transactions and the necessary controls to ensure that appropriately authorised individuals in either the Investment Manager or the Company can approve a transaction. In particular, the Policies and Procedures Manual establishes the necessary controls and authority levels of the Investment Manager to manage the Company's property portfolio. Other controls and authorities details in the Policies and Procedures Manual include in relation the management of risk, property valuations, and the maintenance of registers other administrative matters. The Investment Manager is obliged to comply with the terms of the Policies and Procedures Manual in the performance of its obligations under the REIT Investment Management Agreement. In the event of conflict between any of the terms of the REIT Investment Management Agreement and those of the Policies and Procedures Manual, the terms of the REIT Investment Management Agreement prevail. Delegation In order to ensure that the REIT's strategy is delivered effectively and efficiently, the Investment Manager must seek the Board's approval of any acquisition of property. Conflicts of Interest The Investment Manager has agreed that, during the term of the REIT Investment Management Agreement, it will not, and will procure that none of its group companies or affiliates or Investment Manager employees or owners will, (i) be involved in any capacity in the launch or operation of another REIT or other property investment vehicle or fund involved in a similar area of business as the Company, or in any other area of business, in each case without approval of the Board, (ii) acquire or act for another party to acquire a property investment that is within the parameters of the investment policy of the Company to include all non-income producing property assets of any value and all income producing property assets with a market value or purchase price of at least €10 million in each case other than where the Company has had the opportunity to invest in a particular property, and has declined to do so and has consented to the party or employee pursuing the opportunity or (iii) advise any investor in competition with the Company for the acquisition of an investment property. All possible or actual conflicts of interest will be disclosed in writing by the Investment Manager to the Board. These provisions shall not apply to any dealings or interest in property held as of the date of the REIT Investment Management Agreement. William Nowlan and Frank J. Kenny have each provided an undertaking to the Company, in each case, that they will not: (i) be involved in any capacity in the launch or operation of another REIT or other property investment vehicle or fund involved in a similar area of business as the Company, or in the launch or operation of a REIT or other property investment vehicle or fund in a different area of business, without approval of the Board (such approval not to be unreasonably withheld), (ii) acquire or act for another party to acquire a property investment that is within the parameters of the investment policy of the Company, to include all income producing property assets of any value and non-income producing property asset with a market value or purchase price of at least € I 0 million, other than where the Company has had the opportunity to invest in a particular property, and has declined to do so and has consented to William Nowlan or Frank J. Kenny as the case may be pursuing the opportunity or (iii) advise any investor in competition with the Company for the acquisition of an investment property. All possible or actual conflicts of interest will be disclosed in writing by 148
  • Wiiliam Nowlan or Frank J. Kenny, as the case may be, to the Board. These provisions shall not apply to any dealings or interest in property held as of the date of the REIT Investment Management Agreement. The REIT Investment Management Agreement also provides that the Investment Manager shall disclose in writing to the Company any significant conflicts of interests between its duties and obligations pursuant to the REIT Investment Management Agreement and any other commitments or business relationships in which it is involved. Services The services to be provided by the Investment Manager include the following: (i) Property Services- the property services will include services relating to property acquisition (including, to advise on and actively seek to identify and thereafter (subject to Board approval, as appropriate), negotiate the acquisition of appropriate properties having regard to the Company's investment policy, property management (for example, to select, appoint and manage specialist property management service providers) and portfolio management services (for example, to advise on all aspects of the property portfolio including disposals, redevelopment and refurbishment); (ii) Accounting- the accounting services will include such roles as providing to the auditors the annual accounts for the purposes of the annual audit. The Investment Manager will procure and provide that certain administrations services be carried out relating to investor relations, listing rule compliance, corporate governance compliance, etc.; (iii) Regulatory- to provide the Company with services required under AIFMD; and (iv) Any other services as may arise that may be required by the Company and agreed by the Company to be provided by the Investment Manager. The Company has agreed to the delegation by the Investment Manager of certain investment management functions. Reporting The Investment Manager will procure the provision of reports for the Company: (i) to comply with its obligations under the ISE and UKLA Listing Rules; (ii) to comply with accounting standards adopted by the Company; (iii) to produce the Company's financial statements (including relevant EPRA NA V updates) for the purposes of the completion of its annual audit; and (iv) any other reporting requirements of the Company as may be determined from time to time. Limits of liability The Investment Manager is required to maintain at its own cost appropriate professional indemnity insurance in an amount not less than €25 million for each and every claim under the REIT Investment Management Agreement until three years after the date of termination of the REIT Investment Management Agreement. Standard of care The Investment Manager is to exercise the level of professional skill, care and diligence in relation to the performance of its duties under the REIT Investment Management Agreement which would reasonably be expected from a manager experienced in the management of properties similar to the properties acting in accordance with the Good Estate Management Criteria. In any event the manager is to be liable for its breach of contract, its fraud, negligence, wilful default, recklessness and bad faith and that of its employees, delegates and agents. 149
  • Confidentiality The REIT Investment Management Agreement provides that, subject to specified exceptions, neither party shall, without the consent of the other party, use or disclose to any person confidential information of the other party that it has or acquires. Governing law The REIT Investment Management Agreement is governed by the laws of Ireland. Save in respect of certain matters relating to fees and certain expenses (which are to be determined by expert determination), any dispute which may arise out of or in connection with the REIT Investment Management Agreement shall be resolved before the Irish courts. Indemnities The Company shall indemnify the Investment Manager and its directors, officers and employees against any and all liabilities and properly incurred costs or expenses (excluding consequential or indirect loss or damage) incurred by such person in the performance of its obligations under the REIT Investment Management Agreement or arising from any claim which is made against the Investment Manager in its capacity as the investment manager of the Company provided that such liabilities, costs or expenses do not relate to a matter in respect of which the Investment Manager has not acted in good faith and provided that the Investment Manager shall not be indemnified to the extent that such liabilities, costs or expenses have arisen as a result of the Investment Manager acting outside the scope of its authority (other than with the written consent of the Company) under the REIT Investment Management Agreement, or as a result of its negligence, fraud, wilful default, bad faith or recklessness or breach in the performance of its obligations under the REIT Investment Management Agreement or the Policies and Procedures Manual. The Investment Manager shall indemnify the Company, its Directors, officers and (if any) employees against any liabilities and properly incurred costs or expenses (excluding consequential or indirect loss or damage) arising as a result of the Investment Manager's negligence, fraud, bad faith, recklessness, breach, wilful default or breach of agreement by the Investment Manager in the performance of its obligations, under the REIT Investment Management Agreement. The Investment Manager shall indemnify the Company against any liabilities and properly incurred costs or expenses (excluding consequential or indirect loss or damage) arising as a result of the termination by the Company of the employment of any employee of the Investment Manager whose employment transfers to the Company on termination of the REIT Investment Management Agreement pursuant to the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003, provided such termination is effected within 30 days of the date on which the Company becomes aware of such transfer. The Company is required to notify the Investment Manager of any claim in respect of which the Investment Manager will be required to indemnify the Company and to keep the Investment Manager advised of all developments concerning such claim. Where the claim relates to the termination of employment of an employee whose employment transfers to the Company on termination of the REIT Investment Management Agreement pursuant to the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003, the Investment Manager is entitled to participate in and be consulted with on the conduct of any negotiations and/or discussions with such employee or employees in relation to the termination. The Company is required to comply with all reasonable instructions given to it by the Investment Manager in relation to the handling of any such employee-related claim. The Company must not admit or settle any such employee claim which the Investment Manager may be required to indemnify without the Investment Manager's consent in writing. The Investment Manager may require the Company to take reasonable steps in the defence of any claim or, if it is reasonable for it to do so, assign any rights which it may have against a third party, where such rights may be contractually subrogated or assigned. The Company is also required, to the extent reasonably practicable to do so, consult in good faith with the Investment Manager prior to admitting, selling or compromising any claim for which the Investment Manager is required to indemnify the Company and also to consult in good faith with the Investment Manager as to the conduct of any proceedings relating to any claim. 150
  • If the Company has made a bona fide claim against the Investment Manager in respect of a breach of the REIT Investment Management Agreement and such claim has been settled or resolved in writing or determined in favour of the Company by a court prior to the settlement of the Investment Manager's liability (if any) to the Company in respect of such claim, then in respect any Performance Fee Shares which are issued to the Investment Manager and which remain, at the date on which the claim is settled or resolved, subject to a lock-in period, that lock-in period shall expire at the end of the relevant lock-in period or, iflater, the date on which the Investment Manager pays to the Company the full amount of the claim. Pursuant to the Board and Founder Group Subscription Agreement, the Management Team will, conditional upon Admission, invest €1 ,560,000 in the Company through the subscription of 1,200,000 Ordinary Shares in the Company pursuant to the Board and Founder Group Subscription Agreement and together with the 400,000 Ordinary Shares already beneficially held by William Nowlan at the date hereof. Details of the subscription are set out in paragraph 11.3 of this Part XV (Additional Information). The Management Team believes its significant cash investment in the Company provides alignment of their interests with those of the Company's other Shareholders. 11.2. Placing and Sponsor Agreement The Placing and Sponsor Agreement has been entered into between the Company, the Directors, the Investment Manager, the Management Team, Credit Suisse and Goodbody. The Joint Bookrunners have severally agreed, subject to certain conditions that are typical for an agreement of this nature (the last condition being Admission) to use their respective reasonable endeavours to procure subscribers for the Ordinary Shares under the Placing at the Issue Price. The Placing and Sponsor Agreement also sets out the terms on which the Company has appointed Credit Suisse and Goodbody as joint sponsors in connection with Admission. For their services in connection with the Issue and provided the Placing and Sponsor Agreement becomes wholly unconditional and is not terminated in accordance with its terms, the following commission and fee arrangements shall apply if the Placing is: (i) less than or equal to €200 million, the Company will pay to each of Credit Suisse and Goodbody aggregate commission equal to 2.25% of the gross proceeds of the Issue (excluding the subscriptions of the Board and Founder Group); and (ii) greater than €200 million, the Company will pay to each of Credit Suisse and Goodbody aggregate commission equal to 2.25% of the value of the first €200 million of the Issue and 3.25% of the value of the excess of the gross proceeds of the Issue over and above €200 million (excluding in each case the subscriptions of the Board and Founder Group); less (iii) an amount equal to the aggregate fee that the Company is proposing to pay to Oppenheimer & Co. Inc. and Investec Bank p.l.c. in connection with the Issue, provided that such deduction shall not exceed €200,000. The Company and the Investment Manager has also agreed to pay the properly incurred out-of-pocket costs, charges, fees and expenses of Credit Suisse and Good body in connection with the Issue including costs incurred in connection with the roadshow and the costs of legal counsel to Credit Suisse and Goodbody and, if Admission does not occur, all such expenses will be borne by the Investment Manager. Under the Placing and Sponsor Agreement, the Company, the Directors, the Investment Manager and the Management Team have given certain market standard warranties and the Company has given an indemnity to Credit Suisse and Good body concerning, amongst other things, the accuracy of the information contained in this Prospectus. The Investment Manager has given an indemnity in respect of a breach of their respective obligations under the Placing and Sponsor Agreement (including for a breach of its warranties). The Company's liability under the Placing and Sponsor Agreement is unlimited as to time and amount. The liability of the Directors and the Management Team is limited as to time and amount. The rights of the Joint Bookrunners against the Investment Manager are also subject to certain agreed restrictions and limitations. The Company has undertaken that (subject to certain exceptions) it will not, for a period of six months beginning on the date of Admission, without the prior written consent of the Joint Bookrunners, offer, issue, lend, sell or contract to sell, grant options in respect of or otherwise dispose of, directly or indirectly any Ordinary Shares or any securities convertible 151
  • into, or exchangeable for, or enter into any swap or other agreement or any other transaction with the same economic effect as (or agree to do) any of the foregoing. Each of the Joint Bookrunners has severally agreed (a) to make payment in equal proportions on behalf of subscribers procured by the Joint Bookrunners to the Company on Admission of an amount representing the aggregate value of the Ordinary Shares subscribed for by the subscribers procured by the Joint Bookrunners pursuant to the Issue (excluding the Ordinary Shares issued to the Board and Founder Group); and (b) that they shall be in compliance with the relevant provisions ofFSMA and the US Exchange Act when carrying out their duties under the Placing and Sponsor Agreement. The Placing and Sponsor Agreement can be terminated at any time before Admission by the Joint Bookrunners giving notice to the Company in certain circumstances, including where (a) any of the conditions in the Placing and Sponsor Agreement are not satisfied at the required times and continue not to be satisfied on Admission (unless waived); (b) any matter has arisen which would require the publication of a supplementary prospectus; (c) either the Company or the Investment Manager fails to comply with any of its or his obligations under the Placing and Sponsor Agreement or under the terms of the Placing where such failure is considered to be material in the good faith opinion of the Joint Bookrunners. The Company has granted Credit Suisse Securities (Europe) Limited (as "Stabilising Manager") the Over-allotment Option, pursuant to which the Stabilising Manager may require the Company to issue up to a total of 20,000,000 Ordinary Shares (representing up to 5.49% of the Ordinary Shares comprised in the Issue before any utilisation of the Overallotment Option) at the Issue Price to cover over-allotments, if any, made in connection with the Issue. The Overallotment Option may be exercised in whole or in part upon notice by the Stabilising Manager at any time on or before the 30th calendar day after the commencement of conditional dealings of the Ordinary Shares on the Stock Exchanges. Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Issue. 11.3. Board and Founder Group Subscription Agreement Each member of the Board and Founder Group has executed a subscription agreement dated 27 November 2013 in favour of the Company pursuant to which, conditional on Admission occurring, each member irrevocably agrees to subscribe for Ordinary Shares, which collective subscription aggregates to 3,200,000 Ordinary Shares for €3,560,000 (severally, but not jointly, as between them as to their respective amounts) which, together with the 400,000 Ordinary Shares of€0.10 each which William Nowlan previously subscribed for as part of the re-registration of the Company as a public limited company, will bring the combined investment of the members of the Board and Founder Group in the Company to €3,600,000 for 3,600,000 Ordinary Shares. Pursuant to the Board and Founder Group Subscription Agreement, the Board and Founder Group has paid the subscription amount of€3,560,000 into an escrow account in the name of A&L Goodbody which is authorised and instructed to pay the funds held in the escrow account to the Company upon receipt of a written confirmation that Admission has occurred. Frank J. Kenny has advanced funds to the Company (via the Investment Manager) to enable it meet certain Admission related costs to be discharged by the Company before Admission. These amounts are to be repaid (via the Investment Manager) to Frank J. Kenny (or as he may direct) on Admission. Subject to Admission occurring, Frank J. Kenny has directed and the Company has agreed that these amounts shall be credited and deemed paid against the subscription amount due by Willken Holdings LLC, the nominated subscription entity of Frank J. Kenny under the Board and Founder Group Subscription Agreement. 11.4. Cornerstone Subscription Agreements Each of the Cornerstone Investors has entered into a subscription agreement with the Company dated 27 November 2013 (the "Cornerstone Subscription Agreements") pursuant to which each subscriber under the Cornerstone Subscription Agreements agrees, conditional upon Admission occurring and the Placing and Sponsor Agreement becoming unconditional in all respects and not having being terminated on or before Admission, to subscribe for Ordinary Shares at the Issue Price as follows: 152
  • Cornerstone Investor Putnam lnvestments Number of Ordinary Shares 26 30,000,000 Quantum Moore Capital 30,000,000 27 25,000,000 CREF Wellington Management 23,570,000 28 15,962,100 The Cornerstone Subscription Agreements contain customary representations and warranties from the Cornerstone Investors in favour of the Company. 11.5. Lock-In Deed The Company is a party to a Lock-In Deed dated 27 November 2013 with all members of the Board and Founder Group other than James Kenny, Credit Suisse and Goodbody. Pursuant to the terms of the Lock-In Deed, the members of the Board and Founder Group party to the Lock-In Deed, undertake, subject to certain customary exceptions, not to dispose of its shareholding in the Company for a period of one year after Admission. In addition, for a period of six months after the expiration of such one year lock-in period and/or in certain other circumstances shares in the Company must be sold by the members of the Board and Founder Group party to the Lock-In Deed in accordance with the requirements and terms and conditions of the Company's broker so as to maintain an orderly market in the Company's publicly traded securities. There are a number of exceptions to this orderly market restriction which apply during the lock-in period and the orderly market period, including where any restriction would cause the members of the Board and Founder Group party to the Lock-In Deed to become, or continue to be, a Holder of Excessive Rights. There are a number of circumstances in which members of the Board and Founder Group party to the Lock-In Deed may sell their shares in the Company including (i) in the event of the whole or partial takeover of the issued share capital of the Company which has been recommended by the Board, (ii) the implementation of a scheme of arrangement in respect of the sale of the shares of the Company that has been recommended by the Board, (iii) a scheme of reconstmction of the Company, (iv) any buy back by the Company of shares on identical terms to the terms offered to all shareholders, (v) any sale in respect of which Credit Suisse and Goodbody have granted their prior consent and (vi) any sale to prevent any member of the Board and Founder Group party to the Lock-In Deed or the Investment Manager from becoming or continuing to be a Holder of Excessive Rights. 11.6. Registrar Agreement Pursuant to the Registrar Agreement dated 4 November 2013, the Registrar has been appointed to act as the Company's registrar. Under the Registrar Agreement the Registrar shall be entitled to a fee of €2.00 per shareholder account subject to a minimum annual fee of €4,000 and to additional fees for processing transfers, allotments and dividends and attending at shareholder meetings. There is no maximum amount payable under the Registrar Agreement. 26 27 28 Funds managed by Putnam Investments shall directly hold Ordinary Shares. Funds managed by Moore Capital shall hold Ordinary Shares. Ordinary Shares to be acquired by various investment advisory clients of Wellington Management. 153
  • The Registrar will also be entitled to recover reasonable disbursement costs, and storage costs (if any) would be charged at €300 per annum. Forged transfer insurance will be charged at €400 per annum. The Registrar Agreement is for a fixed term of two years, and thereafter will automatically renew for successive periods of 12 months unless terminated by either party may be terminated by either party giving six months' notice. The Registrar Agreement may also be terminated by either party (i) by giving three months' written notice should the parties fail to reach an agreement regarding an increase of the fees payable to the Registrar or (ii) at any time if (a) the other party commits a material breach of its obligations under the Registrar Agreement and does not remedy such breach within forty-five days, or (b) the other party becomes insolvent or is subject to an insolvency related event. Under the terms of the Registrar Agreement, the Company has agreed to indemnify the Registrar from and against any and all losses, damages, liabilities, professional fees (including legal fees), court costs and expenses resulting or arising from the Company's breach of the Registrar Agreement, except to the extent that such losses are determined to have resulted solely from the fraud or wilful default of the Registrar or its agents, officers, sub-contractors and employees. The Registrar Agreement also contains provisions limiting the Registrar's liability in relation to forged transfers. The aggregate liability of the Registrar (other than for the Registrar's negligence for death or personal injury caused by the Registrar or any other liability which cannot be excluded by law) and its affiliates, or its or their directors, officers, employees, or agents under the Registrar Agreement (including, but not limited to, contractual or tortious liability, including negligence, breach of statutory duty, restitution or otherwise) for any damage or other loss arising out of or in connection with the Registrar Agreement, or the provision of the services by the Registrar is limited to the lesser of €500,000 or an amount equal to 5 times the annual fee payable under the Registrar Agreement. The liability of the Registrar, its affiliates, and any of their directors, officers, employees, or agents is excluded for any special, incidental, indirect or consequential loss or damages, direct or indirect loss of profits or opportunity, loss of goodwill, loss of reputation or customers, or any other pure economic loss in connection with or arising out of the Registrar Agreement or the services provided thereunder. 11.7. Depositary Agreement The Company has appointed Credit Suisse International, Dublin Branch to act as its depositary pursuant to the terms of a depositary agreement between the Company, the Investment Manager and the Depositary (the "Depositary Agreement"). The Depositary is a branch of Credit Suisse International which is a private unlimited company incorporated in the UK on 9 May 1990 under registration number 02500199 and which has its registered office at One Cabot Square, London E 14 4QJ, UK. The Depositary is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority in the UK and has been authorised by the Central Bank of Ireland to provide global custody and depositary services to collective investment schemes. The Depositary's main activity is the provision of depositary and custodial services to collective investment schemes. Under the terms of the Depositary Agreement, the Company has agreed to indemnify and keep indemnified the Depositary (and each of its directors, officers, employees and agents), on a full indemnity basis, and hold harmless from and against all liabilities, costs, losses, claims, demands, damages and expenses (including legal and professional expenses), actions or proceedings of any nature which may be brought against, suffered, incurred or sustained by the Depositary and which are in any way connected with or arising from the performance by the Depositary of its obligations under this Agreement, or other agreements the Depositary enters into or executes because of its role as Depositary of the Company, otherwise than where the Depositary is responsible for loss of custody assets by the Depositary or a sub-custodian or as a result of the Depositary's negligent or intentional failure to properly fulfil its obligations pursuant to the AIFMD Regulations or as a result of the Depositary's material breach of the Depositary Agreement. The Depositary may, in the performance of its duties appoint a sub-custodian or sub-custodians to which it may delegate its duties, obligations and powers under the Depositary Agreement (a "Sub-Depositary"). In order for the Depositary to discharge its responsibility under the AIFMD and the AIFMD Regulations, the Depositary shall exercise all due skill, care and diligence in its appointment of a Sub-Depositary and shall keep exercising all due skill, care and diligence in the periodic review and ongoing monitoring of the Sub-Depositary in respect of the matters delegated to it. The liability of the Depositary will not be affected by the fact that it has entrusted to a Sub-Depositary some or all of the assets for safekeeping and it shall remain liable to the Company and Shareholders for the loss of any such assets by a Sub-Depositary. 154
  • The Depositary Agreement may be terminated by either party on 90 days prior written notice to the other party or such shorter time as the parties may agree provided that such termination shall not take effect until a successor Depositary has been appointed with the approval ofthe Company provided such a replacement has been appointed within 180 days ofthe intended termination date if no such replacement is appointed within that period the Depositary may cease providing services and the Depositary Agreement shall terminate. Any party may, at any time, immediately terminate the Depositary Agreement in the event that a petition is presented or an order is made for the appointment of an examiner or receiver; or any other party commits a breach of its obligations hereunder which, if capable of remedy, it fails to remedy within thirty (30) days of the receipt of a written notice to do so; or the Depositary is otherwise no longer permitted to perform its obligations under applicable law. The Depositary may terminate the Depositary Agreement immediately by notice in writing to the other parties in the event that the Company is required by any applicable law to become authorised by the Central Bank but authorisation is refused or does not occur for any reason, or the AIFM does not become authorised by its home regulator or its authorisation is revoked for any reason The Depositary is not involved directly or indirectly with the business affairs, organisation, sponsorship or management of the Company and is responsible and liable only for the depositary services that it provides to the Company pursuant to the Depositary Agreement. The Depositary is a service provider to the Company and is not responsible for the preparation of this document or the activities of the Company and therefore accepts no responsibility for any information contained in this document other than the relevant descriptions. The Depositary will not participate in any Company's investment decision-making process. The Company reserves the right to change the depositary arrangements described above by agreement with the relevant Depositary. Such agreement shall be in accordance with the requirements of the Central Bank (where applicable). · The Depositary will also manage the Company's cash not yet invested by the Company or the AIFM acting on behalf of the Company, under instruction from the Investment Manager and in accordance with the Cash Management Policy approved by the Board. In the event that cash is deposited with the Depositary it shall be held by the Depositary acting as a banker. Credit Suisse, Dublin, will use Credit Suisse AG, Zurich, as its global sub-custodian to hold Bonds and T-bills. In consideration for acting as Depositary and undertaking various actions, investments and transfers, the Depositary shall receive an annual fee of 0.04% of Net Asset Value where assets are under €300 million and 0.03% of Net Asset Value where assets are over €300 million. These fees are subject to a minimum fee of €4,500 per month. The Depositary shall also be entitled to receive a transaction fee per property acquisition of €2,500 per transaction and a transaction fee per property disposal of €2,500 per transaction as well as a once off onboarding fee of €1 0,000. 11.8. Audit Services Deloitte will provide audit services to the Company. The annual report and accounts will be prepared in accordance with IFRS as adopted by the EU. The fees charged by Deloitte will depend on the services provided, computed, among other things, on the time spent by the auditor on the affairs of the Company. There is therefore no maximum amount payable under Deloitte's engagement letter. 11.9. Company Secretarial Services Castlewood Corporate Services Limited t/a Chartered Corporate Services is the Company Secretary of the Company. The Company Secretary will be responsible for matters such as the filing of the Company's annual return and the maintenance of statutory registers. The fee payable to Chartered Corporate Services for their services will be €19,000 per annum in addition to reasonable out-of-pocket expenses. Any work which is carried out and which does not form part of the agreed service package will be invoiced as an additional charge, to be agreed in advance but which will usually be at normal hourly commercial rates. 12. GOVERNMENTAL, LEGAL OR ARBITRAL PROCEEDINGS There have been no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware), during the previous 12 months from the date of this Prospectus which may 155
  • have, or have had in the recent past (covering the 12 months preceding the date of this Prospectus) significant effects on Company's financial position or profitability. 13. INFORMATION ON HOLDINGS The Company does not hold a proportion of capital in any undertakings likely to have a significant effect on the assessment of its own assets and liabilities, financial position or profits and losses. 14. INVESTMENTS The Company has made no principal investments since 13 August 2013 (being the date of incorporation) and up to the date of this Prospectus, there are no principal investments in progress or principal future investments on which the Company has made firm commitments. 15. PROPERTY, PLANT AND EQUIPMENT The Company does not own or occupy any premises or other property as at the date of this Prospectus and does not own any plant or equipment. 16. CONSENTS 16.1. Deloitte, a firm authorised and regulated by, and whose partners include members of, the Institute of Chartered Accountants in Ireland, has given and not withdrawn its written consent to the inclusion of its report on the historical financial information of the Company set out in Part X (Historical Financial Information) and the inclusion in this Prospectus of the references to its name in the form and context in which they appear. This consent is included for the purposes of section 45 of the 2005 Act. 16.2. Jones Lang LaSalle has given and not withdrawn its written consent to the inclusion of the Jones Lang LaSalle Materials and the inclusion in this Prospectus of the references to its name in the form and context in which they appear. This consent is included for the purposes of section 45 of the 2005 Act. 16.3. The Management Team has given and not withdrawn its written consent to the inclusion of the Management Team's Statements in this Prospectus in the form and context in which they appear. This consent is included for the purposes of section 45 ofthe 2005 Act. 17. EXPENSES The total costs and expenses (exclusive of VAT) of, or incidental to, the Issue and Admission payable by the Company are estimated to be approximately €12,600,000 29 • 18. GENERAL Where information has been sourced from a third party this information has been accurately reproduced. So far as the Company and the Directors are aware and are able to ascertain from information provided by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. There are no patents, intellectual property rights, licences, industrial, commercial or financial contracts or new manufacturing processes which are or may be material to the Company's business or profitability. 29 Assuming no exercise of the Over-allotment Option. 156
  • There have been no interruptions in the business of the Company, which may have or have had in the period since incorporation to the date of the publication of this Prospectus a significant effect on the financial position of the Company or which are likely to have a material effect on the prospects of the Company for the next 12 months. Save as disclosed in paragraph 7 of Part VII (Information on the Company) the Directors are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on the prospects of the Company for at least the current financial year. The financial information of the Company set out in Part X (Historical Financial Information) does not constitute full accounts within the meaning of section 19 of the 1986 Act. The Company has only recently been incorporated and has not yet been required to prepare statutory accounts for any financial year. Therefore, no statutory accounts have been delivered to the Registrar of Companies in Ireland and the Company's auditors have not made a report under the Irish Companies Acts for any financial year. The Issue will represent a significant gross change for the Company. At the date of this Prospectus and until Admission, the assets of the Company are and will be €40,000. Under the Issue, on the basis that 364,600,000 Ordinary Shares are to 30 be issued, the net assets of the Company would increase by approximately €352,360,000 immediately after Admission. 19. DOCUMENTS ON DISPLAY Copies of the documents referred to below will be available in electronic form on the Company's website and for inspection in physical form between the hours of9:30 a.m. and 5:30p.m. on any weekday (Saturday, Sundays and public holidays excepted) at the Company's registered office up to and including Admission: (a) (b) (c) (d) (e) (f) (g) (h) (i) G) (k) (I) the Memorandum and Articles of the Company; the written consents referred to in paragraph 16 of this Part XV (Additional Information); the EPRA Reporting-Best Practice Recommendations (August 2011 ); the Jones Lang LaSalle Materials; Ulster Bank Investor Round Table- 2 July 2013; CSO Quarterly National Accounts Q2 2013; CSO, National Income and Expenditure 1995-2012, Historical National Income & Expenditure Tables 19701995; CSO, National Income and Expenditure Annual Results for 2012; Economic and Social Research Institute Quarterly Economic Commentary Spring; CSO, Quarterly National Household Survey, Q3 2013; Consultation on types of Alternative Investment Funds and unit trust schemes under the Unit Trust Act 1990 (including EUTs, REITs, etc.); and this Prospectus. This Prospectus is dated 6 December 2013. 30 Assuming no exercise of the Over-allotment Option and deducting estimated transaction fees and expenses of €12,600,000 from the estimated gross proceeds of €364,960,000. 157
  • PART XVI: TERMS AND CONDITIONS OF THE PLACING 1. INTRODUCTION 1.1. Each person who is invited to and who chooses to participate in the Placing (including individuals, funds or others) (a Placee) confirms its agreement (whether orally or in writing) to the Joint Bookrunners to subscribe for Ordinary Shares under the Placing and that it will be bound by these terms and conditions and will be deemed to have accepted them. 1.2. The Joint Bookrunners may require any Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as it (in its absolute discretion) sees fit and/or may require any such Placee to execute a separate placing letter (Placing Letter). 1.3. It is a term ofthe Placing that the minimum subscription amount payable by a Placee shall be €IOO,OOO. 2. AGREEMENT TO SUBSCRIBE FOR ORDINARY SHARES Conditional on: (i) Admission occurring and becoming effective by 8.00 a.m. (Dublin time) on or prior to II December 2013; (ii) the Placing and Sponsor Agreement becoming otherwise unconditional in all respects and not having been terminated on or before 11 December 2013; and (iii) the Joint Bookrunners confirming to the Placees their allocation of Ordinary Shares, a Placee agrees to become a member of the Company and agrees to subscribe for those Ordinary Shares allocated to it by the Joint Bookrunners at the Issue Price. To the fullest extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights the Placee may have. 3. PAYMENT FOR ORDINARY SHARES Each Placee must pay the Issue Price for the Ordinary Shares issued to the Placee in the manner and by the time directed by the Joint Bookrunners. If any Placee fails to pay as so directed and/or by the time required, the relevant Placee's application for Ordinary Shares shall be rejected. 4. REPRESENTATIONS AND WARRANTIES 4.1. By agreeing to subscribe for Ordinary Shares under the Placing, each Placee which enters into a commitment to subscribe for Ordinary Shares will (for itself and any person(s) procured by it to subscribe for Ordinary Shares and any nominee(s) for any such person(s}) be deemed to agree, represent and warrant to each of the Company and the Joint Bookrunners that: (a) in agreeing to subscribe for the Ordinary Shares under the Placing, it is relying solely on this Prospectus and any supplementary prospectus issued by the Company and not on any other information given, or representation or statement made at any time, by any person concerning the Company or the Placing. It agrees that none of the Company, the Investment Manager, the Joint Bookrunners, or any of their respective officers, agents or employees, will have any liability for any other information or representation. It irrevocably and unconditionally waives any rights it may have in respect of any other information or representation; (b) the content of this Prospectus is exclusively the responsibility of the Company and its Board and apart from the liabilities and responsibilities, if any, which may be imposed on any of the Joint Bookrunners under any regulatory regime, none of the Joint Bookrunners or any person acting on their behalf nor any of their affiliates makes any representation, express or implied, nor accepts any responsibility whatsoever for the contents of this document nor for any other statement made or purported to be made by them or on its or their behalf in connection with the Company or the Ordinary Shares under the Placing; 158
  • (c) if the laws of any territory or jurisdiction outside the United Kingdom and Ireland are applicable to its agreement to subscribe for Ordinary Shares under the Placing, it warrants that it has complied with all such laws, obtained all governmental and other consents which may be required, complied with all requisite formalities and paid any issue, transfer or other taxes due in connection with its application in any territory and that it has not taken any action or omitted to take any action which will result in the Company or the Joint Bookrunners or any of their respective officers, agents or employees acting in breach of the regulatory or legal requirements, directly or indirectly, of any territory or jurisdiction outside the United Kingdom or Ireland in connection with the Placing; (d) it does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Ordinary Shares and it is not acting on a nondiscretionary basis for any such person; (e) it agrees that, having had the opportunity to read this Prospectus, it shall be deemed to have had notice of all information and representations contained in this Prospectus, that it is acquiring Ordinary Shares solely on the basis of this Prospectus and no other information and that in accepting a participation in the Placing it has had access to all information it believes necessary or appropriate in connection with its decision to subscribe for Ordinary Shares; (f) no person is authorised in connection with the Placing to give any information or make any representation other than as contained in this Prospectus and, if given or made, any information or representation must not be relied upon as having been authorised by the Joint Bookrunners; (g) it is not applying as, nor is it applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 67, 70, 93 or 96 (depository receipts and clearance services) of the Finance Act 1986; (h) if it is receiving the offer in circumstances under which the laws or regulations of a jurisdiction other than the United Kingdom or Ireland would apply, that it is a person to whom the Ordinary Shares may be lawfully offered under that other jurisdiction's laws and regulations; (i) if it is in the United Kingdom (i} it has professional experience in matters relating to investments and meets the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or meets Article 49 of the Order, and (ii) is a "qualified investor" as defined in section 86 of the Financial Services and Markets Act 2000, as amended; (j) if it is a resident in the EEA (other than the United Kingdom or Ireland), it is a Qualified Investor and a "professional investor" (as that term is used in AIFMD) and is domiciled or incorporated in Norway, Sweden or the Netherlands; (k) if it is outside the United Kingdom and Ireland, neither this Prospectus nor any other offering, marketing or other material in connection with the Placing constitutes an invitation, offer or promotion to, or arrangement with, it or any person whom it is procuring to subscribe for Ordinary Shares pursuant to the Placing unless, in the relevant territory, such offer, invitation or other course of conduct could lawfully be made to it or such person and such documents or materials could lawfully be provided to it or such person and Ordinary Shares could lawfully be distributed to and subscribed and held by it or such person without compliance with any unfulfilled approval, registration or other regulatory or legal requirements; (I) it and the prospective beneficial owner of the Ordinary Shares is, and at the time the Ordinary Shares are acquired (i) either will not be a US Person and acquiring the Ordinary Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the US Securities Act and not acquiring the Ordinary Shares for the account or benefit of a US Person, or (ii) if it is inside the United States or a US Person, will be a QIB and a QP which has duly executed a US Investor's Letter in the form provided in 159
  • Annex A (US Investor's Letter) in this Prospectus and delivered the same to the Joint Bookrunners and the Company; (m) it acknowledges that the Company has not registered under the US Investment Company Act and that the Company has put in place restrictions for transactions not involving any public offering in the United States, and to ensure that the Company will not become an "investment company" under the US Investment Company Act; (n) the Ordinary Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Ordinary Shares under the securities laws of the United States, Australia, Canada, South Africa, Switzerland or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, South Africa, Switzerland or Japan or in any country or jurisdiction where any action for that purpose is required; (o} if it is a pension fund or investment company, its acquisition ofthe Ordinary Shares is in full compliance with applicable laws and regulations; (p) it has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this Prospectus or any other offering materials concerning the Issue or the Ordinary Shares to any persons within the United States or to any US Persons, nor will it do any of the foregoing; (q) none of the Joint Bo~krunners nor any of their respective affiliates nor any person acting on their behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Issue or providing any advice in relation to the Issue and participation in the Placing is on the basis that it is not and will not be a client of the Joint Booknmners or any of their affiliates and that the Joint Bookrunners and their affiliates do not have any duties or responsibilities to it for providing protection afforded to their respective clients or for providing advice in relation to the Issue or in respect of any representations, warranties, undertaking or indemnities contained in these terms or any Placing Letter; (r) where it is subscribing for Ordinary Shares for one or more managed, discretionary or advisory accounts, it is authorised in writing for each such account: (i) to subscribe for the Ordinary Shares for each such account; (ii) to make on each such account's behalf the representations, warranties and agreements set out in this Prospectus; and (iii) to receive on behalf of each such account any documentation relating to the Placing in the form provided by the Company and/or any of the Joint Bookrunners. It agrees that the provision of this paragraph shall survive any resale of the Ordinary Shares by or on behalf of any such account; (s) it irrevocably appoints any Director and any Director of the Joint Bookrunners to be its agent and on its behalf (without any obligation or duty to do so) to sign, execute and deliver any documents and do all acts, matters and things as may be necessary for, or incidental to, its subscription for all or any of the Ordinary Shares for which it has given a commitment under the Placing, in the event of its own failure to do so; (t) it accepts that if the Placing does not proceed or the conditions to the Placing and Sponsor Agreement are not satisfied or the Ordinary Shares for which valid applications are received and accepted are not admitted to listing and trading on the Official Lists and the Irish Stock Exchange's main securities market or the London Stock Exchange's main market for listed securities (respectively) for any reason whatsoever then none of the Company, the Joint Bookrunners or any of their affiliates, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person; (u) _in connection with its participation in the Placing it has observed all relevant legislation and regulations, in particular (but without limitation) those relating to money laundering and countering terrorist 160
  • financing and its application is only made on the basis that it accepts full responsibility for any requirement to identify and verify the identity of its clients and other persons in respect of whom it has applied. In addition, it warrants that it is a person: (i) subject to the Money Laundering Regulations 2007 in force in the United Kingdom or subject to the Criminal Justice (Money Laundering and Terrorist Financing) Act 20 I 0; or (ii) subject to the Money Laundering Directive (2005/60/EC of the European Parliament and of the EC Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing); or (iii) acting in the course of a business in relation to which an overseas regulatory authority exercises regulatory functions and is based or incorporated in, or formed under the law of, a county in which there are in force provisions at least equivalent to those required by the Money Laundering Directive; (v) due to anti-money laundering and the countering of terrorist financing requirements, the Joint Bookrunners and/or the Company may require proof of identity of a Placee and related parties and verification of the source of the payment before the application can be processed and that, in the event of delay or failure by the Placee to produce any information required for verification purposes the Joint Bookrunners and/or the Company may refuse to accept the application and the subscription moneys relating thereto. It holds harmless and will indemnify the Joint Bookrunners and/or the Company against any liability, loss or cost ensuing due to the failure to process this application, if such information as has been required has not been provided by it or has not been provided on a timely basis; (w) the Joint Bookrunners and the Company (and any agent on their behalf) are entitled to exercise any of their rights under the Placing and Sponsor Agreement or any other right in their absolute discretion without any liability whatsoever to them (or any agent acting on their behalf); (x) if it is resident in Ireland, it is a "qualified investor" (within the meaning ofthe Prospectus Regulations) or is an existing client ofGoodbody who has agreed to subscribe a minimum of€100,000; and (y) it has not offered or sold and will not offer or sell any Ordinary Shares subscribed in the Placing to, and is not applying for Ordinary Shares on behalf of, persons in the EEA except (i) "qualified investors" (within the meaning of the Prospectus Regulations) or® otherwise in circumstances which have not resulted in or which will not result in an offer to the public within the meaning of the Prospectus Regulations in any member state of the EEA. 4.2. The representations, undertakings and warranties contained in this Prospectus are irrevocable. Each Placee acknowledges that Joint Bookrunners, the Company and their respective affiliates will rely upon the truth and accuracy of the foregoing representations and warranties and it agrees that if any of the representations or warranties made or deemed to have been made by its subscription of the Ordinary Shares are no longer accurate, it shall promptly notify the Joint Bookrunners and the Company. 4.3. Where a Placee or any person acting on behalf of it is dealing with any of the Joint Bookrunners, any money held in an account with either of the Joint Bookrunners on behalf of it and/or any person acting on behalf of it will not be treated as client money within the meaning of the relevant rules and regulations of the FCA or the Central Bank which therefore will not require the Joint Bookrunners to segregate such money, as that money will be held by the Joint Bookrunners under a banking relationship and not as trustee. 4.4. Any of the Joint Bookrunners' clients, whether or not identified to the other Joint Bookrunners or any of their affiliates or agents, will remain that Joint Bookrunners' sole responsibility and will not become clients of any of the other Joint Bookrunners or any of their affiliates or agents for the purposes of the rules of the FCA or the Central Bank or for the purposes of any other statutory or regulatory provision. 4.5. Each Placee accepts that the allocation of Ordinary Shares shall be determined by the Joint Bookrunners (following consultation with the Company) in their absolute discretion. 4.6. Time shall be of the essence as regards its obligations to settle payment for the Ordinary Shares and to comply with its other obligations under the Placing. 161
  • 5. SUPPLY AND DISCLOSURE OF INFORMATION If the Joint Bookrunners, the Company or any of their agents request any information in connection with a Placee's agreement to subscribe for Ordinary Shares under the Placing or to comply with any relevant legislation, such Placee must promptly disclose it to them. 6. MISCELLANEOUS 6.1. The rights and remedies of the Joint Bookrunners and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others. 6.2. On application, if a Placee is a discretionary fund manager, that Placee may be asked to disclose in writing or orally the jurisdiction in which its funds are managed or owned. All documents provided in connection with the Placing will be sent at the Placee's risk. They may be returned by post to such Placee at the address notified by such Placee. 6.3. Each Placee agrees to be bound by the Articles (as amended from time to time) once the Ordinary Shares, which the Placee has agreed to subscribe for pursuant to the Placing, have been acquired by the Placee. The contract to subscribe for Ordinary Shares under the Placing and the appointments and authorities mentioned in this Prospectus will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of the Joint Bookrunners, each Placee irrevocably submits to the jurisdiction of the courts of England and Wales and waives any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum. This does not prevent an action being taken against a Placee in any other jurisdiction. 6.4. In the case of a joint agreement to subscribe for Ordinary Shares under the Placing, references to a "Piacee" in these terms and conditions are to each of the Placees who are a party to that joint agreement and their liability is joint and several. 6.5. The Joint Bookrunners expressly reserve the right to modify the Placing (including, without limitation, their timetable and settlement) at any time before allocations are determined. 6.6. The Placing is subject to the satisfaction of the conditions contained in the Placing and Sponsor Agreement (which include but are not limited to those set out in paragraph 2 of this Part XVI (Terms and Conditions of the Placing) above), and such agreement not having been terminated. Each Bank has the right to not waive any such condition or terms and shall exercise that right without recourse or reference to Placees. Further details of the terms of the Placing and Sponsor Agreement are contained in paragraphs 11.2 of Part XV (Additional Information). 6.7. It is expected that delivery of the Ordinary Shares under the Placing will be made against payment therefor on or about II December 2013, which will be the 3'd business day following the date of allocation of the Ordinary Shares under the Placing (this settlement cycle being referred to as "T+3"). Dealings in the Ordinary Shares are expected to commence on a conditional basis on the Irish Stock Exchange and the London Stock Exchange on 6 December 2013 and the earliest date for settlement of such dealings will be 11 December 2013. All dealings in the Ordinary Shares before the commencement of unconditional dealings will be of no effect if Admission does not take place and such dealings will be at the sole risk of the parties concerned. Placees should be aware that if they were to trade the Ordinary Shares subscribed in the Placing on the initial allocation date of the Placing, they would be required, by virtue of the fact that the Ordinary Shares initially will settle in T+3 business days, to specify alternative settlement arrangements at the time of any such trade to prevent a failed settlement and should consult their own adviser. 162
  • PART XVII: DEFINITIONS AND TECHNICAL TERMINOLOGY The following definitions shall apply throughout this Prospectus unless the context requires otherwise: "€'' or "EUR" or "euro" the currency introduced at the start of the third stage of the European economic and monetary union pursuant to the Treaty establishing the European Community as amended; "£" or "Sterling" or "pounds" or "pence" the lawful currency of the United Kingdom; "$" or "US$" or "US dollars" or "cents" the lawful currency of the United States; "1963 Act" the Irish Companies Act 1963; "1983 Act" the Irish Companies (Amendment) Act 1983; "1986 Act" the Irish Companies (Amendment) Act 1986; ''1990 Act" the Irish Companies Act 1990; "2005Act" the Irish Investment Funds, Companies and Miscellaneous Provisions Act 2005; "2006 Regulations" European Communities (Takeover Bids (Directive 2004/25/EC)) Regulations 2006; "Accounting Period" the period commencing on the date of the REIT Investment Management Agreement and expiring on 31 March 2014 and thereafter each successive period of twelve (12) calendar months each of which starts on the expiry of the preceding Accounting Period and ends at midnight on 31 March in each year throughout the term of the REIT Investment Management Agreement and, in the last year of the term of the REIT Investment Management Agreement, the period which starts on the expiry of the immediately preceding Accounting Period and which ends at midnight on the date of termination of the REIT Investment Management Agreement; "Admission" admission of the Ordinary Shares to the Official Lists and to trading on the main markets for listed securities of the London Stock Exchange and Irish Stock Exchange becoming effective in accordance with the Irish and United Kingdom Listing Rules; "Aggregate Income" in relation to a company or group, means the Aggregate Profits of the company or group, as the case may be, as: (a) reduced by the Aggregate Net Gains of the company or group, as the case may be, where Aggregate Net Gains arise, or (b) increased by the Aggregate Net Losses of the company or group, as the case may be, where Aggregate Net Losses arise; "Aggregate Net Gains" in relation to a company or group, means the amount by which the sum of the gains recognised in arriving at the Aggregate Profits of the company or group, as the case may be, being gains which arise on the revaluation or disposal of investment property or other non-current assets, exceeds the sum of the losses so recognised, being losses which arise on such revaluation or disposal; "Aggregate Net Losses" in relation to a company or group, means the amount by which the sum of the losses recognised in arriving at the Aggregate Profits of the company or group, as the case 163
  • may be, being losses which arise on the revaluation or disposal of investment property or other non-current assets, exceeds the sum of the gains so recognised, being gains which arise on such revaluation or disposal; "Aggregate Profits" in relation to a company or group, means the profit that is stated in accounts of the company or consolidated accounts of the group, as the case may be, being accounts made up in accordance with relevant accounting standards, or, where such accounts or consolidated accounts, as the case may be, have not been made up, the profits which would be so stated if such accounts or consolidated accounts, as the case may be, were made up in accordance with those standards; "AGM" annual general meeting of the Company; "AIC" the Association of Investment Companies; "AIC Code" the AIC Code of Corporate Governance, as amended from time to time; "AIF" an alternative investment fund within the meaning of AIFMD; "AIFM" an alternative investment fund manager within the meaning of AIFMD; "AIFMD" Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers; "AIFMD Regulations" European Union (Alternative Investment Fund Managers) Regulations 2013, of Ireland; "AIF Rulebook" the rulebook in relation to AIFs published by the Central Bank in May 2013; "Articles" the articles of association ofthe Company, as amended from time to time; "Audit Committee" the audit committee of the Company as described in paragraph 8.3 of Part IX (Directors and Corporate Governance); "Australian Corporations Act" the Corporations Act 2001 ofthe Commonwealth of Australia; "Average Closing Price" the average closing prices on the main market of the Irish Stock Exchange in respect of Ordinary Shares listed on that exchange over the period of twenty days prior to the business day immediately preceding the date of a relevant invoice from the Investment Manager setting out its statement of the Performance Fee that is payable in respect of a relevant period; "Banks" Credit Suisse and Goodbody; "Base Fee" the Base Fee payable by the Company to the Investment Manager pursuant to the REIT Investment Management Agreement; "Benefit Plan Investor" (a) an employee benefit plan (as defined in section 3(3) of ERISA) subject to Title I of ERISA, (b) a plan described in section 4975(e )(1) of the Code to which section 4975 of the Code applies or (c) any other entity whose underlying assets could be deemed to include plan assets by reason of an employee benefit plan's or a plan's investment in the entity within the meaning of the Plan Asset Regulations or otherwise; "Board and Founder Group" means, severally and not jointly, Frank J. Kenny, James Kenny, Kevin Nowlan, and Frank O'Neill and each of the Directors (as of the date of this Prospectus) and "member of the Board and Founder Group" shall be construed accordingly; 164
  • "Board and Founder Group Subscription Agreement" the subscription agreement between the Company and the members of the Board and Founder Group, a summary of which is set out in paragraph 11.4 of Part XV (Additional Information); "Business Day" a day (excluding Saturday, Sunday and public holidays) on which banks generally are open for business in the City of London and Ireland for the transaction of normal banking business; "Cash Management Policy" the policy approved by the Board for the management of any cash not yet invested by the Company in property assets or otherwise with the aim of preserving the capital value of such assets; "Chartered Corporate Services" Castlewood Corporate Services Limited t/a Chartered Corporate Services of Taney Hall, Eglington Terrace, Dundrum, Dublin 14; "Central Bank" the Central Bank of Ireland; "Class A" most prestigious buildings competing for premier office users with rents above average for the area. Buildings have high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence (Source: Building Owners and Management Association International Website); "Class B" buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area. Building finishes are fair to good for the area and systems are adequate, but the building does not compete with Class A at the same price (Source: Building Owners and Management Association International Website); "Code" the US Internal Revenue Code of 1986; "Company" Hibernia REIT p.l.c., a company incorporated under the laws of Ireland (registered under the number 531267) with its registered office at Marine House, Clanwilliam Place, Dublin 2, Ireland; "Connected Person" in relation to a person means any person who is connected with that person within the meaning of Section I 0 TCA and "Connected" shall be construed accordingly; "Control" in relation to a person, means: (a) the direct or indirect ownership of more than 50% of the equity share capital or voting capital or similar right of ownership of that person; or (b) the power to direct or cause the direction of the general management and policies of that person, whether directly or indirectly and whether through the ownership of voting capital, by contract or otherwise and the term "Controlled" shall be construed accordingly; "Controlling Person" any person (other than a Benefit Plan Investor) that has discretionary authority or control with respect to the assets of the Company or that provides investment advice for a fee (direct or indirect) with respect to such assets or an "affiliate" (within the meaning ofthe Plan Asset Regulations) of such a person; "Cornerstone Investors" those prospective investors who, as at the date of this document, have agreed to acquire Ordinary Shares pursuant to the Cornerstone Subscription Agreements, being College Retirement Equities Fund, funds managed by Moore Capital Management, LP, funds managed by Putnam Investment Management, LLC, Quantum Strategic Partners Ltd. and certain investment advisory clients of Wellington Management Company, LLP; 165
  • "Cornerstone Subscription Agreements" the subscription agreements between the Company and the Cornerstone Investors; "Credit Suisse" Credit Suisse Securities (Europe) Limited of One Cabot Square, London E14 4QJ, United Kingdom; "CREF" College Retirement Equities Fund; "CREST' the system of paperless settlement of trades in secunttes and the holding of uncertificated securities operated by Euroclear UK in accordance with the Uncertificated Securities Regulations; "CREST Regulations" the Companies Act 1990 (Uncertificated Securities) Regulations 1996 (S.l.68 of 1996); "Depositary" Credit Suisse International, Dublin Branch, a company incorporated in England with its registered address at One Cabot Square, London E14 4QJ, acting through its branch in Ireland, the address of which is Kilmore House, Park Lane, Spencer Dock, Dublin 1; "Directors" or "Board" the directors of the Company, whose names as at the date of this Prospectus are set out in Part V (Directors. Company Secretary, Registered Office and Advisers); "Disclosure and Transparency Rules" the disclosure and transparency mles made by the UK Listing Authority of the United Kingdom made under Part VI of the FSMA and as set out in the FCA Handbook, as amended from time to time; "Dublin Central Business District" International Financial Services Centre, Dublin 1, Dublin 2 and Dublin 4 (Source: Jones Lang LaSalle Materials); "economic cycle" the upward and downward movements of levels of GDP and refers to the period of expansions and contractions in the level of economic activities around a long-term trend; "EEA" European Economic Area; "EPRA" European Public Real Estate Association; "EPRANAV" the Net Asset Value adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long-term investment property business model in accordance with guidelines issued by EPRA (August 2011 version only, unless otherwise agreed between the Company and the Investment Manager); "EPRA NAV Total Return" the sum of the change in EPRA NA V and total dividends that are declared in the Accounting Period (adjusted to exclude the effects of any issue of Ordinary Shares during that Accounting Period; "ERISA" the US Employee Retirement Income Security Act of 1974; "equivalent yield" the internal rate of return from an investment property reflecting reversions to current market rent and such items as voids and non-recoverable expenditure but ignoring future changes in capital value; "EU" the European Union; 166
  • "ERV" estimated rental values; "ESMA" the European Securities and Markets Authority; "ESRI" the Economic and Social Research Institute, a company limited by guarantee and registered in Ireland under registration number 18269; "EUIIMF Programme" Programme of Financial Support for Ireland as announced by the EU and IMF on I December 2010; "EU Prospectus Regulations" Commission Regulation (EC) No. 809/2004; "Euro Area" the seventeen European Union member states that have adopted the euro as their common currency and sole legal tender; "Euroclear UK" Euroclear UK & Ireland Limited (formerly named CRESTCo Limited), the operator of CREST; "FATCA" certain provisions referred to as the Foreign Tax Compliance Act; "FCA" the Financial Conduct Authority of the United Kingdom (or its successor bodies); "FDI" Foreign Direct Investment; "FCA Handbook" a publication by the FCA that sets out the rules and guidance made by the FCA under the FSMA, as amended from time to time; "Finance Act" the Finance Act 20 13; "Financing Costs" means costs, being costs of debt finance or finance leases for the purposes of the Property Rental Business, which are taken into account in arriving at Aggregate Profits, including amounts in respect of (a) interest, discounts, premiums, or net swap or hedging costs, and (b) fees or other expenses associated with raising debt finance or arranging finance leases; "First Accounting Period" the period commencing on the date of Admission and expiring on 31 March 20 14; "FSMA" the UK Financial Services and Markets Act 2000, as amended from time to time; "GDP" or "Gross Domestic Product" the market value of all officially recognised final goods and services produced within a country in a given period of time; "gearing" calculated as the borrowings secured on an individual asset as a percentage of the market value of that asset, or the aggregate borrowings of a company as a percentage of the market value of the total assets of the company (also referred to as loan to value or LTV ratio). In an investment strategy context, gearing refers to the use of various financial instruments or borrowed capital to increase the potential return of an investment; "GNP" or "Gross National Profit" is the sum of GDP and net factor income from the rest of the world ("NFI"). NFI is the difference between investment income and labour income earned abroad by Irish resident persons and companies (inflows) and similar incomes earned in Ireland by non-residents (outflows); "Good body" Goodbody Corporate Finance and Goodbody Stockbrokers of Ballsbridge Park, Ballsbridge, Dublin 4 or, as the context so requires, any affiliate of either Goodbody 167
  • Corporate Finance or Goodbody Stockbrokers or company within either of their groups; "Good Estate Management Criteria" means the following criteria: a. current good market practice and the principles of good estate management; b. in respect of any proposed lease or the assignment of any lease, what a reasonable and prudent institutional investor would determine to be in its interests, taking into account sound investment practice criteria, including but not limited to tenant mix, prevailing market conditions, the nature, size, type and location of the properties, the financial standing of the proposed tenant (or the proposed assignee) and any proposed surety and the obligations of the tenant under the proposed lease; and c. the best commercial interests of the Company; "good secondary assets" a property asset that would be considered secondary to a prime asset due to, amongst other things, its location or quality of construction. An example of a good secondary property asset would be a retail unit close to but not located on a high street; "Grade A Building" modern building with high quality specification and finishes in a prime location; "Group REIT" means the principal company and its subsidiaries who have elected to become REITs; "HMRC" HM Revenue and Customs of the United Kingdom; "Holder of Excessive Rights" has the meaning given to that term in section 705K of the Taxes Consolidation Act 1997; "IASB" International Accounting Standards Board; "IBRC" Irish Bank Resolution Corporation; "IDA" Industrial Development Authority; "IFACode" Irish Funds Industry Associations Corporate Governance Code for collective investment schemes and management companies; "IFRS" International Financial Reporting Standards as adopted in the EU; "Investment Equity" the aggregate of all monies raised by the Company by the issue of Ordinary Shares pursuant to the Issue, together with the subscription monies paid for shares in the capital ofthe Company issued upon the incorporation of the Company; "industrial and logistics" an industrial type property asset which may, for example, be used for manufacturing and distribution operations; "Investment Manager" Nowlan Property REIT Management Limited; "Investment Manager Affiliate" with respect to the Investment Manager, means the Investment Manager and (i) any other body corporate or entity that is Controlled by any one or more persons who individually, or collectively with one or more of each other, Control the Investment 168
  • Manager (ii) any company which is, from time to time (a) a subsidiary or a subsidiary undertaking (whether direct or indirect) of the Investment Manager; (b) the holding company or parent undertaking (whether direct or indirect) of the Investment Manager; or (c) another subsidiary or subsidiary undertaking of the holding company or parent undertaking of the Investment Manager; "IPD" Investment Property Databank Limited; "IPUT" Irish Property Unit Trust; "Ireland" the island of Ireland excluding Northern Ireland, and the word "Irish" shall be construed accordingly; "Irish Code" the Irish Corporate Governance Annex to the UK Code issued by the Irish Stock Exchange; "Irish Companies Acts" the Companies Acts, 1963 to 2012 (as amended) of Ireland; "Irish Official List" the Official List of the Irish Stock Exchange; "Irish REIT' a REIT or the Principal Company in a Group REIT; "Irish REIT Regime" Part 25A TCA 1997 (as inserted by section 41 ofthe Finance Act 2013); "Irish Revenue" the Revenue Commissioners of Ireland; "Irish Sponsor" Good body; "Irish Stock Exchange" the Irish Stock Exchange Limited, a company incorporated and registered in Ireland (register no. 233947) and whose registered office is at 28 Anglesea Street, Dublin 2; "Irish Takeover Panel" the Irish Takeover Panel, established under the Irish Takeover Panel Act 1997; "Irish Takeover Rules" the Irish Takeover Panel Act 1997, Takeover Rules 2007, as amended; "ISIN" International Security Identification Number; "Issue" the issue of Ordinary Shares pursuant to the Placing and the subscription for Ordinary Shares by the members of the Board and Founder Group pursuant to the Board and Founder Group Subscription Agreement, by the Cornerstone Investors pursuant to the Cornerstone Subscription Agreements, and by WKN Staff; "Issue Price" €1.00 per Ordinary Share (save in respect of issue of Ordinary Shares to William Nowlan pursuant to the Board and Founder Group Subscription Agreement which shall be at an issue price of€4.60 31 per Ordinary Share); "Joint Bookrunners" Credit Suisse and Goodbody; "Jones Lang LaSalle Materials" the data and information prepared by Jones Lang LaSalle in relation to this Prospectus consisting of: 31 William Nowlan issue price adjusted to have regard to the €40,000 already subscribed for 400,000 Shares. 169
  • - statements (or parts thereof) contained in this Prospectus and identified with the words "(Source: Jones Lang LaSalle Materials)"; - graphs and statistics (listed in Annex B of this Prospectus and copies of which are available for display as set out at paragraph 19 ofPart XV (Additional Information)) relating to the property sector in Ireland which were produced at the request of the Company, and to the issue of which in this Prospectus Jones Lang LaSalle has given its written consent as set out in paragraph 1.3 of Part XV (Additional Information)); "Jones Lang LaSalle" Jones Lang LaSalle of 10/11 Molesworth Street, Dublin 2; "Key Personnel" and each a "Key Person" Kevin Nowlan, William Nowlan, Frank J. Kenny and Frank O'Neill; "Listing Rules" listing rules of the Irish Stock Exchange and/or where appropriate the listing rules made by the UK Listing Authority under section 73A of the FSMA; "Local Property Tax" a tax in respect of the chargeable value of a relevant residential property pursuant to the Finance (Local Property Tax) Act 2012; "Lock-In Deed" the lock in deed entered into between the members of the Board and Founder Group other than James Kenny, the Investment Manager, Credit Suisse and Goodbody; "Lock-In Termination Event" (i) a disposal of Performance Fee Shares effected to fund the payment or discharge by the Investment Manager of any liability to tax arising in connection with its receipt or acquisition of such Performance Fee Shares and/or other Performance Fee Shares issued to the Investment Manager as part of the discharge of the same Performance Fee; (ii) where an event occurs that results in, or the Investment Manager becomes aware of the proposed occurrence of an event that would result in, the Investment Manager becoming a Holder of Excessive Rights (excluding, for the avoidance of doubt, an event which comprises a purchase by the Investment Manager of Ordinary Shares on the market), to the disposal at any time during a lock-in period (to the extent permitted by law) of such number of Performance Fee Shares as are required to be disposed of by the Investment Manager so as to ensure that the Investment Manager ceases to be, or does not become, a Holder of Excessive Rights (iii) a disposal of Performance Fee Shares pursuant to a takeover or sale of the Company that is recommended by the Directors or where the Investment Manager is required by law to dispose of such Performance Fee Shares; or (iv) the termination of the REIT Investment Management Agreement in certain prescribed circumstances more particularly described therein; "London Stock Exchange" London Stock Exchange p.l.c., a company incorporated and registered in England and Wales (registered number 02075721) and whose registered office is at 10 Paternoster Square, London EC4M 7LS, United Kingdom; "Management Team" Kevin Nowlan, William Nowlan, Frank J. Kenny and Frank O'Neill, who will manage the Company through the Investment Manager; ''Management Team Statements" the statements contained on pages in of this Prospectus which begin with, or contain, the words "The Management Team believe", "The Management Team anticipate", "The Management Team expect", "The Management Team's belief' "The Management Team intends", "belief of the Management Team" or "The intention of the Management Team"; "Market Abuse (Buyback and Commission Regulation (EC) No. 2273/2003; 170
  • Stabilisation) Regulation" "Market Abuse Directive" European Parliament and Council Directive 2003/6/EC; "Market Abuse Rules" the rules issued by the Central Bank under section 34 of the Investment Funds, Companies and Miscellaneous Provisions Acts 2005; "Memorandum of Association" the memorandum of association ofthe Company, as amended from time to time; "Minimum EPRA NA V" at any date, the gross proceeds of the Issue plus further cash and non-cash issues of Ordinary Shares (but, for the avoidance of doubt, excluding any Performance Fee Shares issued from time to time) at such time; "mixed use" a building or complex of buildings that blends a combination of residential, commercial, cultural, institutional, or industrial uses, where those functions are physically and functionally integrated; "Model Code" the model code as contained in the Listing Rules; "Moore Capital" Moore Capital Management, LP; "NAMA" National Asset Management Agency; "Net Asset Value" or "NAV" the measure shown in a company's balance sheet of all assets less all liabilities and is equal to the equity attributable to Shareholders in any company or group. The net asset value of the Company will be measured consistently with IFRS as adopted in the EU and in particular will include the Company's property assets at their most recent independently assessed market values and also the Company's debt and hedging instruments at their most recent independent valuations; "Net Proceeds" the aggregate value of all of the Ordinary Shares issued pursuant to the Issue less expenses relating to the Issue; "New Ordinary Shares" Ordinary Shares issued pursuant to the Placing, the Board and Founder Group Subscription Agreement and the Cornerstone Subscription Agreements; "Nominations Committee" the nominations committee of the Company as described in paragraph 8.3 of Part IX (Directors and Corporate Governance); "Non-Qualified Holder" has the meaning given thereto in paragraph c.5 of Part I (Summary); "occupier market" the office, industrial and retail market; "Official List(s)" the official list maintained by the Irish Stock Exchange and/or the official list of the UKLA, as the context may require; "Order" the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; "Ordinary Shares" the ordinary shares of €0 .1 0 each in the capital of the Company; "Over-allotment Option" the over-allotment granted by the Company to the Stabilising Manager in the Placing and Sponsor Agreement; "Over-allotment Shares" Ordinary Shares to be offered pursuant to the Over-allotment Option; "Panel" the panel established by Section 3 of the Irish Takeover Panel Act 1997 ; 171
  • "Performance Fee" the performance fee payable by the Company to the Investment Manager pursuant to the REIT Investment Management Agreement; "Performance Fee Due Date" the reference date for payment of the Performance Fee pursuant to the REIT Investment Management Agreement; "Performance Fee Shares" the Ordinary Shares that may be issued to the Investment Manager pursuant to the REIT Investment Management Agreement; "PFIC" a passive foreign investment company; "Placing" the conditional placing of Ordinary Shares by Credit Suisse and Goodbody (excluding for the avoidance of doubt the Ordinary Shares subscribed for by WKN Staff), at the Issue Price pursuant to the Placing and Sponsor Agreement; "Placing and Sponsor Agreement" the placing and sponsor agreement between the Company, the Directors, the Investment Manager, the Management Team and the Joint Bookrunners dated 6 December 2013, a summary of which is set out in paragraph 11.2 of Part XV (Additional Information); "Plan Asset Regulations" US Department of Labor regulation 29 C.F .R. Section 2510.3-1 0 I (as modified by Section 3(42) of ERISA); "Policies and Procedures Manual" the policies and procedures manual of the Company in terms agreed between the Company and Investment Manager setting out inter alia financial reporting procedures and internal control and authority policies relating to the powers of the Investment Manager in respect of the affairs of the Company, as amended from time to time by agreement between the Company and the Investment Manager; "Portfolio Percentage Return" the total return of the Company's Property Portfolio expressed as a percentage return in accordance with the terms of the REIT Investment Management Agreement; "Portfolio Return" the total return of the Company's Property Portfolio expressed as a monetary amount in accordance with the terms of the REIT Investment Management Agreement; "PRA" Prudential Regulation Authority of the United Kingdom; "prime assets" a highly regarded property asset due to, amongst other things, its location or quality of construction. An example of prime property asset would be a modern office building in the central business district of a major city; "Principal Company" means the company within a group that gives a notice to the Irish Revenue under the REIT regime; "Property Income" in relation to a company or group, means the Property Profits of the company or group, as the case may be, calculated using accounting principles, as: (a) reduced by the Property Net Gains of the company or group, as the case may be, where Property Net Gains arise, or (b) increased by the property Net Losses of the company or group, as the case may be, where property net losses arise; "Property Income Distribution" or a dividend paid by an Irish REIT or the principal company of a Group REIT, as the ''PID" case may be, from its Property Rental Business; "Property Net Gains" in relation to a company or group, means the amount by which the sum of the gains recognised in arriving at the aggregate profits of the company or group, as the case 172
  • may be, being gains which arise on the revaluation or disposal of investment property or other non-current assets which are assets of the Property Rental Business, exceeds the sum of the losses so recognised, being losses which arise on such revaluation or disposal; "Property Net Losses" in relation to a company or group, means the amount by which the sum of the losses recognised in arriving at the aggregate profits of the company or group, as the case may be, being losses which arise on the revaluation or disposal of investment property or other non-current assets which are assets of the Property Rental Business, exceeds the sum of the gains so recognised, being gains which arise on such revaluation or disposal; "Property Portfolio" means the real estate properties acquired and/or owned (wholly or partly) from time to time by (i) the Company or (ii) any entity in which the Company acquires or owns an interest, including without limitation pursuant to any joint venture, for the purposes of acquiring or holding an interest in any real estate property or properties; "Property Profits" in relation to a company or group, means an amount which is the lesser of: (a) the amount which would be the Aggregate Profits of the company or group, as the case may be, ifthe Residual Business, if any, ofthe company or group, as the case may be, were disregarded, and (b) the Aggregate Profits of that company or group, as the case may be; "Property Rental Business" a business which is carried on by a REIT or a Group REIT, as the case may be, for the sole purpose of generating rental income from properties and/or land in Ireland or outside Ireland, and, for the purpose of this definition, such business of a group is to be treated as a single business; "Prospectus" this document issued by the Company in relation to Admission of the Ordinary Shares to trading on the regulated markets of the Irish Stock Exchange and the London Stock Exchange and approved under the Prospectus Directive; "Prospectus Directive" European Parliament and Council Directive 2003/71/EC of 4 November 2003 (and amendments thereto, including Directive 20 I 0/73/EU); "Prospectus Directive Regulations" Commission Regulations (EC) No. 809/2004 of29 Apri12004; "Prospectus Regulations" the Prospectus (Directive 2003/71 EC) Regulations 2005 oflreland; "Prospectus Rules" rules issued by the Central Bank from time to time under section 51 of the Investment Funds, Companies and Miscellaneous Provisions Act, 2005; "Putnam Investments" Putnam Investment Management, LLC and Putnam Fiduciary Trust Company; "qualified institutional buyer" or "QIB" a qualified institutional buyer within the meaning of Rule 144A under the US Securities Act; "Qualified Investors" persons in certain member states of the European Economic Area ("member states") who are "qualified investors" within the meaning of article 2(1 )(e) of the Prospectus Directive; "qualified purchaser" or "QP" a qualified purchaser within the meaning of section 2(a)(51) of the US Investment Company Act and the related rules thereunder; "Quantum" Quantum Strategic Partners Ltd.; 173
  • "Quarter" each three month period ending on 31 March, 30 June, 30 September or 31 December; "Reference Period" for the purposes of the REIT Investment Management Agreement, the relevant Accounting Period; "Registrar" Capita Registrars (Ireland) Limited, trading as Capita Asset Services, or such other registrar as the Company may appoint from time to time; "Reference Index" the SCSIIIPD Ireland Quarterly Property Index- All Property; "Registrar Agreement" the registrar agreement dated 4 November 2013 between the Company and the Registrar, a summary of which is set out in paragraph 11.8 of Part XV (Additional Information); "Regulation S" Regulation S under the US Securities Act; "Regulatory Information Service" or "RIS" one of the regulatory information services authorised by the Irish Stock Exchange and/or the FCA to receive, process and disseminate regulated information from listed companies; "REIT' a real estate investment trust, as defined in section 705A TCA (as inserted by section 41(c) of the Finance Act); "REIT IMA Shareholder Return" the return to Shareholders in an Accounting Period being the sum of the change of the EPRA NA V per Ordinary Share and the total dividends per Ordinary Share that are declared in the Accounting Period (adjusted to exclude the effects of any issuance of Ordinary Share during that Accounting Period) in accordance with the REIT Investment Management Agreement; "REIT IMA Shareholder Return Performance Fee" the performance fee payable to the Investment Manager in relation to the REIT IMA Shareholder Return achieved in accordance with the REIT Investment Management Agreement; "REIT Investment Management Agreement the REIT Investment Management Agreement between the Company and the Investment Manager dated 27 November 2013, a summary of which is set out in paragraph 11.1 of Part XV (Additional Information); "REIT LTV ratio" the ratio of the aggregate of any debt incurred by a REIT or Group REIT in respect of any monies borrowed by, or advanced to, the REIT or Group REIT, to the aggregate market value of the assets of the business or businesses (including the Property Rental Business and Residual Business) of the REIT or Group REIT, as the case may be; "REIT provisions" provisions in the Articles to enable the Company to demonstrate to the Irish Revenue that it has taken reasonable steps to avoid paying a Property Income Distribution to a Substantial Shareholder; "Relative Performance Fee" the performance fee linked to the generation of a return in excess of the Reference Index as set out in the REIT Investment Management Agreement and which together with the REIT IMA Shareholder Return Performance Fee, comprises the Performance Fee entitlement of the Investment Manager; "Relative Performance Percentage" the difference between the total percentage return of the Reference Index and the Portfolio Percentage Return for an Accounting Period in accordance with the terms of the REIT Investment Management Agreement; 174
  • "Relative Outperformance Figure" the monetary amount calculated by multiplying the Portfolio Return by the percentage that Relative Performance Percentage represents of the Portfolio Percentage Return in accordance with the terms of the REIT Investment Management Agreement; "Relevant Determination Date" the day on which the Average Closing Price for any particular period is determined pursuant to the REIT Investment Management Agreement; "Relevant Opportunity" a property investment opportunity in Ireland, the acquisition of which would be within the parameters of the investment policy of the Company as set out in this Prospectus (as such investment policy may be amended from time to time); "Relevant Registered Shareholder" a shareholder of the Company who holds all or some of the shares in the Company that comprise a Substantial Shareholding (whether or not such member is a Substantial Shareholder); "Reporting Accountants" Deloitte & Touche ofHardwicke House, Upper Hatch Street, Dublin 2; "Residual Business" in relation to a REIT or a Group REIT, means any business carried on by the REIT or Group REIT, as the case may be, which is not Property Rental Business; "RICS" Royal Institute of Chartered Surveyors; "RICS Red Book" the Appraisal and Valuation Manual (or if it has been replaced, its equivalent) published by the Royal Institution of Chartered Surveyors; "RSA" The New Hampshire Revised Statutes Annotated, 1955; "Rule 144A" Rule 144A under the US Securities Act; "Shareholder" a holder of Ordinary Shares in the Company; "Similar Law" any federal, state, local or non-US law that is similar to the prohibited transaction provisions of section 406 of ERISA and/or section 4975 of the Code; "Sole Irish Sponsor" Goodbody; "Sole UK Sponsor" Credit Suisse; "Stock Exchanges" the Irish Stock Exchange and the London Stock Exchange; "subsidiary" shall be construed in accordance with the Irish Companies Acts; "subsidiary undertaking" shall have the meaning given by the European Communities (Companies: Group Accounts) Regulations 1992; "Substantial Acquisition Rules" the Substantial Acquisition Rules 2007, issued by the Panel pursuant to the Takeover Panel Act 1997; "Substantial Shareholder" a person that is beneficially entitled, directly or indirectly, to at least 10% of a Property Income Distribution or is beneficially entitled to or controls, directly or indirectly, at least 10% of the share capital or voting rights in the Company; "Substantial Shareholding" the shares in the Company in relation to which or by virtue of which (in whole or in part) a person is a Substantial Shareholder; 175
  • "Summary" the summary of this Prospectus set out in Part I of this Prospectus; "syndicated property investments" property investments held by a group of investors who jointly invest in one or more property assets normally arranged by a financial institution; "TCA" the Irish Taxes Consolidation Act 1997 as amended; "Total Shareholder Return" the pre-taxation internal rate of return to an investor in the Company during the holding period of an investment (including capital gain and dividends and other distributions); "Transparency Regulations" the Transparency (Directive 2004/109/EC) Regulations 2007 (SINo. 277 of2007); "Transparency Rules" the transparency rules issued by the Central Bank under section 22 of the Investment Funds, Companies and Miscellaneous Provisions Act, 2006 as amended from time to time; "UK Bribery Act" the UK Bribery Act 2010, as amended from time to time; "UK Code" the UK Corporate Governance Code 2012 issued by the UK Financial Reporting Council, as amended from time to time; "UK Listing Authority" or "UKLA" the FCA; "UK Official List" the Official List of the UK Listing Authority; "uncertificated" or in "uncertificated form" the Ordinary Shares recorded on the register of members of the Company as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of an instruction issued in accordance with the rules of CREST; "Uncertificated Securities Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755); "United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland; "United States" or "US" the United States of America, its territories and possessions, any state of the United States and the District of Columbia; "US Exchange Act" the US Securities Exchange Act of 1934; "US Investment Company Act" the US Investment Company Act of 1940; "US Person" a US person within the meaning of RegulationS; "US Securities Act" the US Securities Act of 1933; "Valuation Point" as the context requires, in each Accounting Period, 30 September (the financial half-year of the of the Company), 31 March (the financial year-end of the Company), the date of termination of the REIT Investment Management Agreement and/or any other date as at which the Directors requests a valuation under the REIT Investment Management Agreement; "VAT' value added tax; 176
  • "Wellington Management" Wellington Management Company, LLP; "Willett" Willett Companies, LLC of 411 Theodore Fremd Avenue, Rye, New York, 10580, USA; "WKN" Nowlan Property Limited of Marine House, Clanwilliam Place, Dublin 2, trading as W.K. Nowlan Property; and "WKNStaff' employees and consultants ofWKN as at 29 November 2013; and ''yield" a measure of return on an asset calculated as the income arising on an asset expressed as a percentage of the total cost of the asset, including costs. For the purpose of this Prospectus, references to one gender include the other gender. Any references to any provision of any legislation or regulation shall include any amendment, modification, re-enactment or extension thereof as of the date of this Prospectus time being and, unless the context otherwise requires or specifies, shall be deemed to be references to legislation or regulations oflreland. 177
  • ANNEX A: US INVESTOR'S LETTER To: Hibernia REIT p.l.c. Marine House Clanwilliam Place Dublin 2 Ireland Credit Suisse Securities (Europe) Limited One Cabot Square London El4 4QJ United Kingdom Goodbody Stockbrokers Goodbody Corporate Finance (collectively, "Goodbody") Ballsbridge Park Ballsbridge Dublin 4 Ireland (Credit Suisse and Goodbody, together, the "Joint Bookrunners") Ladies and Gentlemen: This letter (a "US Investor's Letter") relates to the proposed acquisition of Ordinary Shares (the "Securities") of Hibernia REIT p.l.c. (the "Company"). This letter is delivered on behalf of the person acquiring beneficial ownership of the Securities by the investor named below (the "Investor") and/or the accounts listed on the attachment hereto. Unless otherwise stated, or the context otherwise requires, capitalised terms in this letter shall have the same meanings as are given to them in the pathfinder prospectus relating to the offering of the Securities described therein published by the Company on 28 November 2013 (the "Pathfinder Prospectus'~) and the pricing information dated 6 December 2013 published in electronic form and made available on the Company's website and will be made available for viewing at http://www.morningstar.co.uk!uk!NSM (the "Pricing Information" and together with the Pathfinder Prospectus the ''Disclosure Package"). The Investor agrees, acknowledges, represents and warrants, on its own behalf or on behalf of each account for which it is acting, that: I. the Investor has received a copy of the Pathfinder Prospectus and has accessed the Pricing Information and understands and agrees that each of the Pathfinder Prospectus and the Pricing Information speak only as of their respective dates and that the information contained therein may not be correct or complete as of any time subsequent to that date; 2. the Investor is a qualified institutional buyer ("Qualified Institutional Buyer") as defined in Rule 144A ("Rule l44A") under the US Securities Act of 1933, as amended (the "US Securities Act"}, and a qualified purchaser ("Qualified Purchaser") as defined in section 2(a){5l} of the US Investment Company Act of 1940, as amended (the "US Investment Company Act"), and the related rules thereunder; 3. the Investor was not formed for the purpose of investing in the Company; 4. the Investor is not purchasing or otherwise acquiring the Securities with a view to, or for offer or sale in connection with, any distribution thereof(within the meaning of the US Securities Act) that would be in violation of the securities laws of the United States or any state thereof; 5. the party signing this US Investor's Letter is acquiring the Securities for its own account or for the account of one or more investors (each of which is both a Qualified Institutional Buyer and a Qualified Purchaser) on whose 178
  • behalf the party signing this US Investor's Letter is authorised to make, and does make, the acknowledgments, representations and warranties, and enter into the agreements, contained in this US Investor's Letter; 6. the Securities are being offered in a transaction not involving any public offering within the United States within the meaning of the US Securities Act, and the Securities have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States; 7. the Investor is aware, and any person on whose behalf the Investor is acquiring Securities has been advised, that the sale of Securities to it is being made in reliance on Rule 144A or another exemption from the registration requirements of the US Securities Act; 8. the Securities (whether in physical, certificated form or in uncertificated form held in CREST) are "restricted securities" within the meaning of Rule 144(a)(3) under the US Securities Act, and no resale in the United States is permitted under Rule 144, Rule 144A or otherwise; 9. if in the future the Investor decides to offer, resell, pledge or otherwise transfer any Securities, it will offer, resell, transfer, assign, pledge or otherwise dispose of the Securities only (i) outside the United States in an offshore transaction complying with the provisions of Regulation S under the US Securities Act ("Regulation S") to a person not known by the transferor to be a US Person, by prearrangement or otherwise, and under circumstances that will not cause the Company to become an "investment company" under the US Investment Company Act, in each case in accordance with all applicable securities laws, upon surrender of the Securities and delivery to the Company of an Offshore Transaction Letter in the form of the Appendix hereto (or in a form otherwise acceptable to the Company); or (ii) to the Company or a subsidiary thereof; 10. the Securities may not be deposited into any unrestricted depositary receipt facility in respect of the Company's securities, established or maintained by a depositary bank; 11. the Investor is knowledgeable, sophisticated and experienced in business and financial matters and it fully understands the limitations on ownership and transfer and the restrictions on sales of the Securities; 12. the Investor is able to bear the economic risk of its investment in the Securities and is currently able to afford the complete loss of such investment and the Investor is aware that there are substantial risks incidental to the purchase of the Securities, including those summarised under "Risk Factors" in the Disclosure Package; 13. The Investor has made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Securities; 14. the Company has not been and will not be registered as an investment company under the US Investment Company Act and as such the Investor will not be afforded the protections provided to investors in registered investment companies under the US Investment Company Act; 15. the Investor is not, and is not acting on behalf of (i) (a) an employee benefit plan (as defined in Section 3(3) of the US Employee Retirement Income Security Act of 1974, as amended ("ERISA")) subject to Title I ofERISA, (b) a plan described in section 4975(e)(1) of the US Internal Revenue Code of 1986, as amended (the "Code") to which section 4975 of the Code applies or (c) any other entity whose underlying assets could be deemed to include plan assets by reason of an employee benefit plan or a plan's investment in the entity within the meaning of the US Department ofLabor regulation 29 C.F.R. Section 2510.3-101 (as modified by section 3(42) ofERISA) (the "Plan Asset Regulations") or otherwise (a "Benefit Plan Investor") or (ii) any person (other than a Benefit Plan Investor) that has discretionary authority or control with respect to the assets of the Company or that provides investment advice for a fee (direct or indirect) with respect to such assets or an "affiliate" (within the meaning of the Plan Asset Regulations) of such a person (a "Controlling Person") unless, in the case of a Benefit Plan Investor, it acquires the Ordinary Shares on or prior to Admission with the written consent of the Company, and, in the case of a Controlling Person, it acquires the Ordinary Shares with the written consent of the Company; 16. (i) ifthe Investor is, or is acting on behalf of, a Benefit Plan Investor, its acquisition, holding and disposition of such Ordinary Shares does not and will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 ofthe Code and (ii) if the Investor is a governmental, church, non-US or other plan which 179
  • is subject to any federal, state, local or non-US law that is similar to the prohibited transaction provisions of section 406 of ERISA and/or section 4975 of the Code ("Similar Law"), (a) it is not, and for so long as it holds such Ordinary Shares or interest therein will not be, subject to any federal, state, local, non-US or other laws or regulations that could cause the underlying assets of the Company to be treated as assets of a shareholder by virtue of the Investor's interest in the Ordinary Shares and thereby subject the Company (or any persons responsible for the investment and operation of the Company's assets) to laws or regulations that are substantially similar to the prohibited transaction provisions of section 406 of ERISA or section 4975 of the Code and (b) its acquisition, holding and disposition of such Ordinary Shares will not constitute or result in a non-exempt violation of any Similar Law; 17. the Investor understands and acknowledges (a) the Company will not be required to accept for registration of transfer any Ordinary Shares in favour of any person to whom a sale or transfer, or whose direct, indirect or beneficial ownership of Ordinary Shares, would or might (i) cause the Company to become an "investment company" under the US Investment Company Act (including because the holder of the shares is not a "qualified purchaser" as defined in the US Investment Company Act) or to lose an exemption or status thereunder to which it might otherwise be entitled; (ii) cause the Company to be required to register under the US Exchange Act or any similar legislation; (iii) cause the Company not to be considered a "foreign private issuer" as such term is defined in Rule 3b-4(c) under the US Exchange Act; (iv) result in a person holding Ordinary Shares in violation of the transfer restrictions set forth in any offering memorandum published by the Company, from time to time; (v) result in any Ordinary Shares being owned, directly or indirectly, by Benefit Plan Investors (as defined below) or Controlling Persons (as defined below) other than, in the case of Benefit Plan Investors, Shareholders that acquire the Ordinary Shares on or prior to Admission with the written consent of the Company, and, in the case of Controlling Persons, Shareholders that acquire the Ordinary Shares with the written consent of the Company; (vi) cause the assets of the Company to be considered "plan assets" under the Plan Asset Regulations; (vii) cause the Company to be a "controlled foreign corporation" for the purposes of the Code; (viii) result in Ordinary Shares being owned by a person whose giving, or deemed giving, of the representations as to ERISA and the Code set forth in the Company's articles of association (the "Articles") is or is subsequently shown to be false or misleading; or (ix) otherwise result in the Company incurring a liability to taxation or suffering any pecuniary, fiscal, administrative or regulatory or similar disadvantage (any such person a "Non-Qualified Holder"); 18. the Investor understands and acknowledges that if it comes to the notice of the Company that any Ordinary Shares are owned directly, indirectly or beneficially by any Non-Qualified Holder, the Board may, under the Company's Articles, serve a notice upon such Non-Qualified Holder requiring such Non-Qualified Holder to transfer the Ordinary Shares to an eligible transferee within 14 days of such notice; and, ifthe obligation to transfer is not met, the Company may compulsorily transfer the Ordinary Shares, in a manner consistent with the restrictions set forth in the Articles; 19. the Investor became aware of the offering of the Securities by the Company and the Securities were offered to the Investor (i) solely by means of the Disclosure Package, (ii) by direct contact between the Investor and the Company or (iii) by direct contact between the Investor and one or both of the Joint Bookrunners. The Investor did not become aware of, nor were the Securities offered to the Investor by, any other means, including, in each case, by any form of general solicitation or general advertising, and in making the decision to purchase or otherwise acquire the Securities, the Investor relied solely on the information set forth in the Disclosure Package; 20. (i) none of the Joint Bookrunners or their affiliates have made or will make any representation or warranty as to the accuracy or completeness of the information in the Disclosure Package; (ii) the Investor has not relied upon and will not rely upon any investigation by either Joint Bookrunner, its affiliates or any person acting on its or their behalf with respect to the Company, or the Securities; and (iii) none of the Joint Bookrunners or the Company makes any representation as to the availability of an exemption from the US Securities Act for the transfer of the Securities; 21. upon a proposed transfer of the Securities, the Investor will notify any purchaser of such Securities or the executing broker, as applicable, of any transfer restrictions that are applicable to the Securities being sold; 22. any Securities delivered to the Investor in certificated form, unless otherwise determined by the Company in accordance with applicable law, will bear a legend to the following effect: 180
  • THE SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT'), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED BY THIS LEGEND. THE HOLDER HEREOF, BY ITS ACCEPTANCE OF THIS SECURITY, REPRESENTS, ACKNOWLEDGES AND AGREES THAT IT WILL NOT REOFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (I) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE US SECURITIES ACT (INCLUDING, FOR THE A VOIDANCE OF DOUBT, A BONA FIDE SALE ON THE IRISH STOCK EXCHANGE'S MAIN SECURITIES MARKET OR THE LONDON STOCK EXCHANGE'S MAIN MARKET FOR LISTED SECURITIES), UPON DELIVERY OF AN OFFSHORE INVESTOR LETTER AND ALL OTHER CERTIFICATIONS, OPINIONS AND OTHER DOCUMENTS THAT THE COMPANY MAY REQUIRE, AND IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES, OR (2) TO THE COMPANY OR A SUBSIDIARY THEREOF. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THIS SECURITY MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF SECURITIES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK .. 23. each of the Joint Bookrunners, the Company and their respective affiliates are irrevocably authorised to produce this US Investor's Letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby. The Investor hereby consents to the actions of each of the Joint Bookrunners, and hereby waives any and all claims, actions, liabilities, damages or demands it may have against either Joint Bookrunner in connection with any alleged conflict of interest arising from the engagement of each of the Joint Bookmnners with respect to the sale by the applicable Joint Bookrunner of the Securities to the Investor. The Investor acknowledges that each of the Joint Bookrunners, the Company and their respective affiliates and others will rely on the acknowledgments, representations and warranties contained in this US Investor's Letter as a basis for exemption of the sale of the Securities under the US Securities Act, the US Investment Company Act, under the securities laws of all applicable states and for other purposes. The party signing this US Investor's Letter agrees to promptly notify the Company and the Joint Bookrunners if any of the acknowledgments, representations or warranties set forth herein are no longer accurate. This US Investor's Letter shall be governed by and construed in accordance with the laws of the State ofNew York. Where there are joint applicants, each must sign this US Investor's Letter. Applications from a corporation must be signed by an authorised officer or be completed otherwise in accordance with such corporation's constitution (evidence of such authority may be required). Very truly yours NAME OF PURCHASER: By: Name: Title: Address: Date: 181
  • APPENDIX TO ANNEX A To: Hibernia REIT p.l.c. Marine House Clanwilliam Place Dublin 2 Ireland Ladies and Gentlemen: This letter (an "Offshore Transaction Letter") relates to the sale or other transfer by us of Ordinary Shares (the "Securities") of Hibernia REIT p.I.c. (the "Company") in an offshore transaction pursuant to Regulation S ("Regulation S") under the US Securities Act of 1933, as amended (the "US Securities Act"). Terms used in this Offshore Transaction Letter are used as defined in Regulation S, except as otherwise stated herein. The undersigned acknowledges (or if the undersigned is acting for the account of another person, such person has confirmed that it acknowledges) that the Securities have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and that the Company has not registered and will not register as an investment company under the US Investment Company Act of 1940, as amended (the "US Investment Company Act"). The undersigned hereby certifies that: 1. The offer and sale of the Securities was not and will not be made to a person in the United States or to a person known by us to be a US Person. 2. Either (a) at the time the buy order for the Securities was originated, the buyer was outside the United States or the undersigned and any person acting on the undersigned's behalf reasonably believed that the buyer was outside the United States, or (b) the transaction in the Securities was executed in, on or through the facilities of a designated offshore securities market as defined in Regulation S (including, for the avoidance of doubt, a bona fide sale on the Irish Stock Exchange's main securities market or the London Stock Exchange's main market for listed securities), and neither the undersigned nor any person acting on the undersigned's behalf knows that the transaction was pre-arranged with a buyer in the United States. 3. Neither the undersigned, nor any of the undersigned's affiliates, nor any person acting on the undersigned's or their behalf has made any directed selling efforts in the United States with respect to the Securities. 4. The proposed transfer of the Securities is not part of a plan or scheme to evade the registration requirements of the US Securities Act or the US Investment Company Act. 5. Neither the Company nor any of its agents participated in the sale of the Securities. 6. The undersigned confirms that, prior to the sale of the Securities, the undersigned notified the purchaser of such Securities or the executing broker, as applicable, of any transfer restrictions that are applicable to the Securities being sold. This letter is governed by and shall be construed in accordance with the laws of the State ofNew York. Where there are joint transferors, each must sign this Offshore Transaction Letter. An Offshore Transaction Letter of a corporation must be signed by an authorised officer or be completed otherwise in accordance with such corporation's constitution (evidence of such authority may be required). The undersigned agrees that the Company and its agents and their respective affiliates may rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements. 182
  • ANNEX B: JONES LANG LASALLE MATERIALS I. Jones Lang LaSalle Ireland Investment Market Report Q3 2013 2. Jones Lang LaSalle Graph entitled "Commercial Property Values in Ireland at Long-time Lows" (internal WKN document) 3. Jones Lang LaSalle Property Index September 2013 4. Jones Lang LaSalle Irish Property Index Report September 2013 5. Jones Lang LaSalle graph entitled "Average Transaction Volume in Irish Commercial Real Estate" (internal WKN document) 6. Jones Lang LaSalle graph entitled "Irish commercial property ERVs turning positive" (internal WKN document) 7. Jones Lang LaSalle graph entitled "Total Investment Volumes" (internal WKN document) 8. Jones Lang LaSalle graph entitled ''Number of Grade A vacant buildings in Dublin IFSC, 2 and 4" (internal WKN document) 9. Jones Lang LaSalle EMEA Forecasting Research graph entitled "Prime Office Rents" (internal WKN document) 10. Jones Lang LaSalle EMEA Forecasting Research graph entitled "Prime office capital values ((€) psf)" (internal WKN document) 11. Jones Lang LaSalle Dublin Industrial Take up Report Q2 2013 12. Jones Lang LaSalle EMEA Forecast Research graph entitled "Prime Industrial Rents" (internal WKN document) 13. Jones Lang LaSalle EMEA Forecast Research graph entitled "Prime Industrial Capital Values ((€) psf)" (internal WKN document) 14. Jones Lang LaSalle EMEA Forecast Research graph entitled "Prime Retail Rents" (internal WKN document) 15. Jones Lang LaSalle EMEA Forecast Research graph entitled "Prime Retail Capital Values ((€) psf)" (internal WKN document) 16. Jones Lang LaSalle graph entitled "Dublin prime office yields are close to trough levels" (internal WKN document) 17. Jones Lang LaSalle graph entitled "Dublin office take-up expected to be circa 1.5m sq. ft. in 2013" (internal WKN document) 18. Jones Lang LaSalle graph entitled "Dublin vacancy reducing and no new supply" (internal WKN document) 184