SELP Finance S.à r.l. SELP Finance

SELP Finance Société à responsabilité limitée Subscribed Share Capital: EUR 19,296 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF THE RÉVISEUR D ENTREPRISES AGRÉÉ AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2017 Page 1

CONTENTS Shareholders, advisers and other information 3 Managers report 4 Corporate governance statement 9 Managers responsibilities statement 13 Report of the reviseur d entreprises agrée 14 Consolidated income statement Consolidated statement of comprehensive income 21 22 Consolidated statement of financial position 23 Consolidated statement of changes in equity 24 Consolidated statement of cash flows 25 Notes to the consolidated financial statements 26 Page 2

SHAREHOLDERS, ADVISORS AND OTHER INFORMATION Shareholders SEGRO Luxembourg S.à r.l. 35-37 avenue de la Liberté L-1931 Luxembourg LUXEMBOURG PSP Britannia Limited 10 Bressenden Place 8 th Floor London SW1E 5DH United Kingdom SELP Investments S. à r.l. 35-37 avenue de la Liberté L-1931 Luxembourg LUXEMBOURG Venture Adviser SELP Management Limited Cunard House 15 Regent Street London SW1Y 4LR United Kingdom Registered place of business 35-37 avenue de la Liberté L-1931 Luxembourg LUXEMBOURG Registered under number B177308 Managers Mr. Desmond Mitchell Mr. Neil Ross Mr. Philip Anthony Redding Mr. Stéphane Jalbert Audit Committee Mr. Neil Ross (Chairman) Mr. Desmond Mitchell Auditor PwC Société coopérative 2, rue Gerhard Mercator B.P. 1443 L-1014 Luxembourg LUXEMBOURG Page 3

MANAGERS REPORT The Managers have pleasure in presenting their report on the operations of the Group for the year ended 31 December 2017 ( the period ) together with the consolidated financial statements. CONSTITUTION SELP Finance S.à r.l. ( the Company ) was incorporated on 8 May 2013. It owns directly or indirectly the companies shown within Note 22, the whole being the The Group : The Group is owned by SEGRO plc Group ( the SEGRO Group ) and PSP Investment Group through its subsidiaries SELP Investments S.à r.l., PSP Britannia Limited and SEGRO Luxembourg S.à r.l. which are wholly owned by SEGRO plc Group and PSP Investment. PRINCIPAL ACTIVITIES The principal activity of the Group is to invest in prime Logistics investment properties and development sites located in Continental Europe. The investment portfolio comprises Logistics properties together with undeveloped sites held for development. MARKET OUTLOOK European commercial property markets have continued to perform well throughout 2017 with prime yields continuing to tighten in the Group s key markets. Competition for well-located assets in core markets continues despite historically low investment yields. Capital allocations towards commercial real estate remains strong with reports of record levels of capital allocated to but not yet invested in real estate. The year has seen a number of platform deals completed, where operational platforms as well as logistics investment portfolios have been traded and this reflects the desire of some investors to acquire both operational skills and logistics portfolios in a market where scale is becoming increasingly important. Occupier demand remains strong across Europe, although rental value growth remains muted where supply is keeping pace, and is expected to remain so into 2018. The Group s key markets have enjoyed continued low vacancy rates throughout 2017. Development of new stock is becoming an increasingly important element of many logistics investors portfolios, with strong demand for pre-let and build-to-suit warehouses, and a number of speculative development schemes letting up during construction. In this context the outlook for European logistics assets remains stable. Page 4

KEY PERFORMANCE INDICATORS PORTFOLIO BY VALUE Germany 956m Poland 732m France 634m Benelux 215m Italy 138m Czech Republic 128m Spain 86m Total 2,889m PORTFOLIO VALUATION GROUP HEADLINE RENT 2,889m 173m 2016: 2,472m 2016: 160m PORTFOLIO VALUATION CHANGE IFRS PROFIT BEFORE TAX +6.6% 262.1m 2016: +1.9% 2016: 94.1m CAPITAL ALLOCATION At 31 December 2017, the Group held investment properties valued at 2,889 million (2016: 2,472 million). The Group continued to grow assets under management via acquisitions of development land, standing stock and through the construction of prime logistics buildings on the Group s existing land bank. The portfolio remains anchored by the core markets of France, Germany and Poland although the Group continued to expand its operations in Italy and Spain. The Group completed its first development in Spain which was let to Amazon upon completion while in Italy the Group added to its prime portfolio with the acquisition of two modern logistics buildings in Bologna and Piacenza. The Group s portfolio generated a capital value increase of 6.6 per cent in 2017 (2016: 1.9 per cent), reflecting generally stable rental values and market yields, enhanced by a 14.4 per cent uplift (2016: 14.8 per cent) in the value of buildings under construction. The average building age of the portfolio is 8.9 years (2016: 8.9 years) with 69 per cent of the Group s portfolio being under ten years old (2016: 70 per cent). 2 per cent of the portfolio is over 25 years old, down from 11 per cent at 31 December 2016. The Group will seek to actively manage the portfolio to maintain a modern portfolio. Page 5

RETENTION RATE VACANCY 76% 2.5% 2016: 81% 2016: 2.8% RE-LETTING RATE LOAN TO VALUE 97% 35% 2016: 92% 2016: 31% ACTIVE ASSET MANAGEMENT At 31 December 2017, the portfolio generated 173 million of headline rent. This increase from 31 December 2016 ( 160 million) was due in part to acquisitions during the period and additional income being generated from the development of the Group s land bank where several properties have been completed, mainly on a pre-let basis. The customer base continues to be well diversified with the Group s top 20 customers accounting for 38 per cent of total headline rent. The largest customer, DSV, accounts for 3.0 per cent. 10.4 million additional headline rent was contracted through completed developments. In addition to the increased rents from the Group s existing assets, the Group contracted 10.4 million of headline rent from pre-let agreements and lettings of speculative developments prior to completion (2016: 6.0 million). IFRS profit before tax in 2017 was 262.1 million (2016: 94.1 million) principally reflecting higher realised and unrealised gains in the portfolio. Realised and unrealised gains on investment properties of 175.9 million (2016: 35.5 million) have been recognised in the consolidated income statement as the value of our portfolio has increased during the year. Vacancy remains low at 2.5 per cent (2016: 2.8 per cent). The Group continues to pursue active asset management strategies that have kept the vacancy rate of the portfolio at a low level. Approximately 0.2 percentage points relates to recently completed speculative developments. The average vacancy rate during the period was 2.5 per cent, which was in line with 2016 (2.5 per cent). If short-term lettings were to be treated as vacant space, the vacancy rate would increase to 3.3 per cent (31 December 2016: 3.7 per cent). High retention rate of 76 per cent and re-letting rate of 97 per cent. Approximately 18.7 million of headline rent was at risk from break or lease expiries during the period with 76 per cent being retained in existing space. Of the 24 per cent that was not retained, 21 per cent was re-let during the year. The weighted average lease length of the portfolio at 31 December 2017 was 5.3 years to break (31 December 2016: 5.2 years) and 6.5 years to expiry (31 December 2016: 6.8 years). This was supported by the active management of the portfolio and acquisitions of modern, long leased properties as well as re-gearing existing leases and attracting new occupiers to fill existing vacant properties. Page 6

ACQUISITIONS OF LAND & ASSETS DISPOSALS OF LAND & ASSETS DEVELOPMENT COMPLETIONS 183m 57m 209,000 sp m 13.9m 2016: 257m 2016: nil 2016: 133,000 sq m 2016: 9.4m CURRENT PIPELINE POTENTIAL RENT FUNDING THE PORTFOLIO The loan to value ratio at 31 December 2017 was 35 per cent. This is an increase from 2016 (31 per cent) in part due to the increased level of debt in the Group associated with the recent refinancing of the portfolio and issuance of the Group s second Eurobond. As at 31 December 2017 the Group s loan to value ratio was at a level that is comfortably within the financial covenants contained within the Group s financing facilities (see Note 12). During the year the Group announced the launch and pricing of an eight year 500 million unsecured bond issued and traded on the Irish Stock Exchange. The bond was priced at 95 basis points above the euro mid-swap rate and has an annual coupon of 1.5 per cent. The additional funds raised via the second bond issuance were partly applied to the repayment of 201 million of the Group s existing secured debt. The portfolio now has 95 per cent of unencumbered assets. The Managers believe the key risks of the Group s activity include exposure to interest rate risk, credit risk and cash flow risk. See accounting policies Note 1 and Note 12 for detail of the Group s financial risk management objectives and policies. ACQUISITIONS The Group acquired 183 million of assets during 2017, continuing the momentum of 2016 ( 257 million). Germany: The Group acquired two land plots in Munich and Oberhausen in the period. The 21 hectare site in Oberhausen will allow for 128,000 sq m of logistics space and will be built over five phases, providing approximately 6.4m of additional annual income. The 2.3 hectare site in Munich will support 12,000 sq m of logistics development with development commencing in 2018. France: The Group acquired a single 59,300 sq m logistics asset in close proximity to Lyon St. Exupery airport. The newly built property supports the strategy of reducing the average building age within the French portfolio. Poland: The Group acquired a newly built 30,395 sq m warehouse pre-let to Arvato, along with the adjacent land plot of 18.8 hectares. The acquisition complements the Strykow Park, an existing Group asset, and unites ownership of the land and buildings. Page 7

Mitry Mory, France, development provides 57,000 sq m of space 30,395 sq m asset acquired in Poland pre-let to Arvato ACQUISITIONS (CONTINUED) Czech Republic: Two small buildings along with an adjacent 29.5 hectares of development land were acquired in Hostiwice. The acquisition unites ownership of the Hostiwice Park and the acquired land will support 99,000 sq m of future logistics buildings. Netherlands: The Group acquired a 1.7 hectare land plot adjacent to the LC1 development site during the period. The site benefits from the pre-performed infrastructure works, and will support construction of an 11,296 sq m logistics terrace building. Spain: The Group acquired four plots of land in Gavilanes, Sant Esteve, San Fernando de Henares and Martorelles. These locations strengthen the Group s positions in Barcelona. Two of the sites are already under construction and are expected to complete in 2018, with all four sites expected to add 147,000 sq m of modern logistics buildings. Italy: In April 2017 the Group acquired two buildings in Bologna and Piacenza. Both buildings are newly completed logistics warehouses let on long leases and provide a total of 32,400 sq m of logistics space. DISPOSALS Four older, short-let assets were sold in France during 2017. The proceeds will be used to support the Group s investment activities in both acquisitions and development. The Group has agreed terms to dispose a further three assets in Germany in 2018. DEVELOPMENT ACTIVITY: COMPLETED, CURRENT & FUTURE The Group completed 209,000 sq m of new space during 2017, 57 per cent more than in 2016 (133,000 sq m). These projects were 75 per cent pre-let prior to the start of construction and 96 per cent let as at the end of December 2017, generating 10.4 million of headline rent, with a potential further 0.4 million once the remaining space is let. As at 31 December 2017, the Group had a current development pipeline of 250,000 sq m that will generate 13.9 million of headline rent. These projects were 44 per cent pre-let as at 31 December 2017. The portfolio holds a land bank of 240 hectares identified for future development as at 31 December 2017, equating to 166 million, or around 6 per cent of the Group s portfolio. The Group invested 98 million in acquiring new land during the year associated with developments expected to start in the near term. The Group plans to grow the portfolio size in the next years, both through acquisition of standing assets and through development of existing and newly acquired development land Page 8

CORPORATE GOVERNANCE STATEMENT Governance is an important element of the Group s culture and affects its decisions and actions, being central to all areas of the business and designed to create an environment where matters can be considered and decisions made at the appropriate level in the organisation. The Luxembourg Corporate Governance Code 2009 (the Code ) is the framework against which the Company measures its compliance with governance and a link to it can be found at: https://www.luxembourgforfinance.com/sites/luxembourgforfinance/files/code-bourse-eng.pdf The Company is governed by its articles of association and the private Shareholders Agreement made between (1) PSP Britannia Limited, (2) SEGRO Luxembourg S.à r.l., (3) SEGRO European Logistics Partnership S.à r.l., (4) SELP Investments S.à r.l., and (5) the Company. THE BOARD The Board is responsible for creating and delivering sustainable shareholder value. Each Manager acts in a way he believes, best promotes the long-term success of the Group for the benefit of Shareholders and stakeholders. Composition The Company has four Managers who have the power to represent the Company, details of which are set out on page 3. Each Shareholder is responsible for the appointment of two Managers in accordance with the Shareholders Agreement, and each Manager has agreed contractual terms with the appropriate Shareholder appointing him. The Managers were appointed at a general meeting of the Shareholders for an unlimited period of time, although the Shareholder appointing them can remove the relevant manager at any time in accordance with the provisions of the Shareholders Agreement. The Managers are remunerated by the appointing Shareholder. Although the Company does not have a Diversity Policy, the Shareholders did not discriminate on the grounds of gender or age (or any other factor) when selecting the Managers. Each Manager was appointed because of his qualification, experience and suitability as a Manager and because he was the best person for the role. There have been no changes in the Management Board during the year and the respective members of the Board have experience in the real estate industry as well as experience as Managers within similar enterprises. Board Committees The Managers meet regularly at the Group s registered address in order to consider matters that are of significance to the Company, to allow it to achieve the objectives of the Company and the Group. The objectives of the Company and Group are detailed on page 26. Audit Committee In accordance with the Code, the Company annually assesses whether it is required to create an Audit Committee and recently decided to constitute one. The Audit Committee is made up of Desmond Mitchell and Neil Ross, both of whom are independent non-executive Managers. The Audit Committee members collectively have financial and real estate competence relevant to the sector in which the Company operates. The Audit Committee s role is to assist the Board in monitoring the reliability and integrity of the Consolidated Financial Statements, in particular reviewing the relevance and consistency of the accounting standards applied by the Company. The Committee is also responsible for overseeing the relationship between the Company and the auditor. With regards to the preparation of the 2017 Consolidated Financial Statements, the auditor attended both the Audit Committee meeting and the Board meeting when the Consolidated Financial Statements were being considered and was available outside of the meeting to discuss any matter with any of the Managers if they so wished. The Audit Page 9

Committee is satisfied with the soundness of the process for preparing the Consolidated Financial Statements and has recommended to the Board that they be approved. The Committee has responsibility for considering the remuneration and independence of the auditor at least annually and subject to shareholders giving the Committee authority to determine the auditor s remuneration, agreeing and approving the auditor s annual remuneration. It also has an obligation to keep under close review the ratio of audit to non-audit fees to ensure that both the independence and objectivity of the auditor are safeguarded. Other Committees Save for the creation of an Audit Committee, the Board of Managers has decided not to delegate any of its responsibilities to Board committees and therefore does not have an investment or risk management committee. Instead, the Board meets most months, to attend to all relevant affairs of the Company, including those related to investment (acting on the advice of the Group s appointed investment adviser), risk management and ensuring the robustness of internal controls. The Board is satisfied that it has the relevant knowledge, experience and time to retain control over all of these matters and makes use of the available resource and experience of SELP Management Limited to allow it to effectively discharge its duties. PROVISION OF SERVICES AND EMPLOYEES The Group employs a number of external service providers in relation to the management of the Group s assets. Principally, the Group contracts, SELP Management Limited, a related party, to provide services in relation to investment decisions, development project management, property and asset management as well as administrative services. The Group has also contracted three members of staff within its head office in Luxembourg. The recruitment of the Group s employees was carried out by SELP Management Limited as part of its role of providing administration services to the Group. As part of this role, SELP Management also provides HR services to the employees applying its policies on equal opportunities and human rights to ensure that the best people are attracted and retained. INVESTMENT ADVISER TO THE GROUP As set out on page 3, SELP Management Limited, is appointed to act as investment adviser to the Group. AUDITOR OF THE GROUP PricewaterhouseCoopers Société cooperative was the auditor of the Group for the year ended 31 December 2017. POLICIES AND CODES The purpose of the Group s key policies and procedures is to protect the integrity of the Company and the Group and its decision making process. The Group operates policies that are ethical and the key policies are listed below: Health and Safety Standards of health and safety are important to the Group. As a result of SEGRO s role as development project manager, property manager and asset manager, the Board decided to adopt SEGRO s health and safety policy in 2013. This can be found at www.segro.com. The policy is designed to ensure that health and safety is embedded into the Group s culture with risks being managed through controls, training and raising awareness. Sustainability In 2015, the Group, on the recommendation of SELP Management Limited, adopted SEGRO s sustainability strategy, SEGRO 2020, for itself and its subsidiaries. SEGRO 2020 focuses on ensuring that building design, new buildings and refurbishments use resources efficiently, most notably energy and water, and obtain recognised building certifications such as BREEAM and LEED. Page 10

Related Parties The Group enacts contracts and arrangements with related parties in line with best market practice on an arms-length basis and discloses such arrangements in the notes to the Consolidated Financial Statements. Conflicts of Interest Managers and officers strive to avoid any conflict of interest between the interests of the Company and the Group on the one hand, and personal, professional, and business interests on the other. This includes avoiding actual conflicts of interest as well as the perception of conflicts of interest. Conflicts of interest are monitored and recorded. Managers, employees, officers of the Group and the adviser to the Group are required to declare Conflicts of Interest. Code of Ethics including the Policy on Anti Bribery and Corruption The Company seeks to maintain high ethical standards in its business activities. The Group is committed to conducting business in accordance with applicable laws and regulations that are designed to maintain and enhance the Group s reputation. The Group strives to behave in a professional, honest and responsible manner and avoids any conduct which may be considered to be corrupt or contrary to good corporate ethics. Any activity that seeks to bribe, corrupt or otherwise improperly influence a public official or third party in any country, is strictly prohibited by the Group. CAPITAL MANAGEMENT The Group s capital management policies are included within the notes to the Consolidated Financial Statements. Set out below is a table showing the Shareholders of the Company, and the amount of the share capital that they each hold: Name Amount of Share Capital SELP Investments S.à r.l. 75% SEGRO Luxembourg S.à r.l. 12.5% PSP Britannia Limited 12.5% As at 31 December 2017 the Company s issued share capital was 19,296 shares of 1 each. There are no special rights which attach to the shares and they all rank pari passu. The Managers do not hold any shares in the Company and there is no intention that they will do so in the future. Set out below is a table which shows the number of shares held by each Shareholder as at 31 December 2017: Name Amount of Share Capital SELP Investments S.à r.l. 14,472 SEGRO Luxembourg S.à r.l. 2,412 PSP Britannia Limited 2,412 TOTAL 19,296 Page 11

RESULTS AND DISTRIBUTIONS The profit for the period amounted to 225,606k ( 78,315k in 2016) which include realised and unrealised profits of 175,907k ( 35,460k in 2016) from investment properties. After deduction of the profit attributable to non-controlling interests, the profit attributable to the Group is 224,254k ( 77,382k in 2016). EMPLOYEES The Group had an average of two employees in 2017, based in the Group s Luxembourg head office. DISCLOSURE OF INFORMATION TO THE AUDITORS Each of the Managers of the Company at the date of approval of this annual report confirms that: So far as the Manager is aware, there is no relevant audit information of which the Company s auditor is unaware; and The Manager has taken all the steps he/she ought to have taken as a Manager in order to make himself/herself aware of any relevant audit information and to establish that the Company s auditor is aware of that information. On behalf of the Board of Managers, Neil Ross Page 12

MANAGERS RESPONSIBILITIES STATEMENT The Managers are responsible for preparing the Consolidated Financial Statements in accordance with applicable law and regulations. Company law requires the Managers to prepare Consolidated Financial Statements for each financial year. Under that law the Managers have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. Under company law the Managers must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these Consolidated Financial Statements, the Managers are required to : properly select and apply accounting policies ; present information, including accounting policies, in the manner that provides relevant, reliable, comparable and understandable information ; provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity s financial position and financial performance ; and make an assessment of the company s ability to continue as a going concern. The Managers are responsible for keeping adequate accounting records that are sufficient to show and explain the company s transactions and disclose with reasonable accuracy at any time the financial position of the company. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Page 13

CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2017 Income Notes 2017 2016 Total revenue 3 203,765 183,560 Property operating expenses 4 (68,385) (59,891) Net income 135,380 123,669 Administrative expenses 5 (2,005) (1,752) Realised and unrealized gains/(losses) from change in fair value of investment properties 6 175,907 35,460 Operating Profit 309,282 157,377 Finance costs 7 (47,210) (63,250) Net Profit before Tax 262,072 94,127 Corporate current tax 8(a) (7,800) (1,315) Deferred tax 8(b) (28,666) (14,497) Net Profit after Tax 225,606 78,315 Attributable to: Equity Shareholders 224,254 77,382 Non-Controlling Interests 1,352 933 225,606 78,315 All income and expenses in the above statement derive from continuing activities. The accompanying notes form an integral part of these consolidated financial statements. Page 21

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2017 2017 2016 Profit/(loss) for the year 225,606 78,315 Items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Total comprehensive profit/(loss) for the year 225,606 78,315 Attributable to Equity Shareholders 224,254 77,382 Attributable to Non-Controlling Interests 1,352 933 Total comprehensive profit/(loss) for the year 225,606 78,315 The accompanying notes form an integral part of these consolidated financial statements. Page 22

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31 December 2017 Assets Non-current Assets Notes 2017 Investment properties 9 2,834,448 2,472,499 Plant and equipment 42 56 Current assets 2016 2,834,490 2,472,555 Trade and other receivables 10 87,355 67,140 Non-current assets classified as held for sale 9 54,757 Cash and cash equivalents 11 44,965 111,422 187,077 178,562 Total assets 3,021,567 2,651,117 Liabilities Non-current liabilities External borrowings 12(a) (1,047,368) (872,709) Related party borrowings 12(b) (385,728) (557,203) Deferred tax liabilities 8(b) (117,684) (88,922) (1,550,780) (1,518,834) Current liabilities Trade and other payables 12(c) (92,663) (90,345) (92,663) (90,345) Total liabilities (1,643,443) (1,609,179) Net assets 1,378,124 1,041,938 Equity Share capital 13(a) (19) (19) Share premium 13(b) (796,855) (679,085) Retained earnings (570,306) (353,242) Total equity attributable to owners of the parent (1,367,180) (1,032,346) Non-Controlling Interests (10,944) (9,592) Total equity (1,378,124) (1,041,938) Approved by the Managers on 15 February 2018 The accompanying notes form an integral part of these consolidated financial statements. Page 23

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2017 Total Equity Share Share Retained Attributable To Owners Of The Non- Controlling Total Equity Capital Premium Earnings Parent Interest '000s '000s '000s '000s '000s '000s Balance as at 1 January 2017 19 679,085 353,242 1,032,346 9,592 1,041,938 Profit/(Loss) for the year 224,254 224,254 1,352 225,606 Capital injected 117,770 117,770 117,770 Dividends paid to ordinary shareholders (7,190) (7,190) (7,190) Balance as at 31 December 2017 19 796,855 570,306 1,367,180 10,944 1,378,124 for the year ended 31 December 2016 Total Equity Share Share Retained Attributable To Owners Of The Non- Controlling Total Equity Capital Premium Earnings Parent Interest '000s '000s '000s '000s '000s '000s Balance as at 1 January 2016 19 577,275 275,860 853,154 9,409 862,563 Profit/(Loss) for the year 77,382 77,382 933 78,315 Capital injected 101,810 101,810 (750) 101,060 Dividends paid to ordinary shareholders- Balance as at 31 December 2016 19 679,085 353,242 1,032,346 9,592 1,041,938 The accompanying notes form an integral part of these consolidated financial statements. Page 24

CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 31 December 2017 Notes 2017 2016 Cash flows from operating activities 17 114,154 87,269 Interest paid (45,505) (45,950) Tax received/(paid) (5,235) (1,315) Net cash received from operating activities 63,414 40,004 Cash flows from investing activities Purchase and development of investment properties (183,255) (257,119) Sale of investment properties 57,820 115 Capital expenditure on investment properties (110,392) (53,565) Net cash used in investing activities (235,827) (310,569) Cash flows from financing activities Net drawdown/(repayment) of shareholder loans (170,494) 12,385 Net drawdown/(repayment) of related party loans (980) 926 Net drawdown/(repayment) of bank borrowings (201,205) (406,400) Net drawdown on Bonds 493,909 494,484 Net drawdown/(repayment) of Revolving Credit Facilities (120,000) 120,000 Exceptional costs of refinancing (4,199) (13,291) Financing costs (1,655) (942) Proceeds from issue of share capital 117,770 101,060 Dividends paid to ordinary shareholders (7,190) Net cash from financing activities 105,956 308,222 Net increase/(decrease) in cash and cash equivalents (66,457) 37,657 Cash at beginning of the year 111,422 73,765 Cash at end of the year 44,965 111,422 Investing and financing transactions that did not require the use of cash and cash equivalents are excluded from the cash flow statement. The Group did not enter into such transactions during 2017. The accompanying notes form an integral part of these consolidated financial statements. Page 25

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 st December 2017 1. General information SELP Finance S.à r.l ( the Company ) was incorporated on 8 May 2013 under the law of 10 August 1915 (as amended) as a société à responsabilité limitée for an unlimited duration. The registered office of the Company is established in Luxembourg City at 35-37 av. de la Liberté, L-1931, Luxembourg and is registered at the Trade and Companies register in Luxembourg under the number B 177 308. The Company s financial year begins on 1 January and ends on the 31 December of each year. The Company and its subsidiaries ( the Group ), had an average of two employees based in the registered office of the Company. These Consolidated Financial Statements have been approved for issue by the Board of Managers on 15 February 2018. The shareholders have the power to amend the Consolidated Financial Statements after issue. The purpose of the Group is: To act as an investment holding company and to co-ordinate the business of any corporate bodies in which the Group is for the time being directly or indirectly interested, and to acquire (whether by original subscription, tender, purchase, exchange or otherwise) the whole of or any part of the stock, shares, debentures, debenture stocks, bonds and other securities issued or guaranteed by any person and any other asset of any kind and to hold the same as investments, and to sell, exchange and dispose of the same ; To carry on any trade or business whatsoever and to acquire, undertake and carry on the whole or any part of the business, property and/or liabilities of any person carrying on any business; To invest and deal with the Group's money and funds in any way the Board of Managers thinks fit and to lend money and give credit in each case to any person with or without security; To borrow, raise and secure the payment of money in any way the Board of Managers thinks fit, including by the issue (to the extent permitted by Luxembourg Law) of debentures and other securities or instruments, perpetual or otherwise, convertible or not, whether or not charged on all or any of the Group's property (present and future) or its uncalled capital, and to purchase, redeem, convert and pay off those securities; To acquire an interest in, amalgamate, merge, consolidate with and enter into partnership or any arrangement for the sharing of profits, union of interests, co-operation, joint venture, reciprocal concession or otherwise with any person, including any employees of the Group; To enter into any guarantee or contract of indemnity or suretyship, and to provide security for the performance of the obligations of and/or the payment of any money by any person (including any corporate body in which the Group has a direct or indirect interest or any person (a "Holding Entity") which is for the time being a member of or otherwise has a direct or indirect interest in the Group or anybody corporate in which a Holding Entity has a direct or indirect interest and any person who is associated with the Group in any business or venture, with or without the Group receiving any consideration or advantage (whether direct or indirect), and whether by personal covenant or mortgage, charge or lien over all or part of the Group's undertaking, property or assets (present and future) or by other means; for the purposes of this Article 3.6 "guarantee" includes any obligation, however described, to pay, satisfy, provide funds for the payment or satisfaction of, indemnify and keep indemnified against the consequences of default in the payment of, or otherwise be responsible for, any indebtedness or financial obligations of any other person; To purchase, take on lease, exchange, hire and otherwise acquire any real or personal property and any right or privilege over or in respect of it; To sell, lease, exchange, let on hire and dispose of any real or personal property and/or the whole or any part of the undertaking of the Group, for such consideration as the Board of Managers thinks fit, including for shares, debentures or other securities, whether fully or partly paid up, of any person, whether or not Page 26

having objects (altogether or in part) similar to those of the Group ; to hold any shares, debentures and other securities so acquired; to improve, manage, develop, sell, exchange, lease, mortgage, dispose of, grant options over, turn to account and otherwise deal with all or any part of the property and rights of the Company; To do all or any of the activities provided above (a) in any part of the world; (b) as principal, agent, contractor, trustee or otherwise; (c) by or through trustees, agents, sub-contractors or otherwise; and (d) alone or with another person or persons; and to do all activities (including entering into, performing and delivering contracts, deeds, agreements and arrangements with or in favour of any person) that are in the opinion of the Board of Managers incidental or conducive to the attainment of all or any of the Group's objects, or the exercise of all or any of its powers. These Consolidated Financial Statements are presented in Euros because that is the currency of the primary economic environment in which the Group operates. 2. Significant accounting policies Basis of preparation The Consolidated Financial Statements have also been prepared in accordance with IFRS adopted by the European Union. The Group s Consolidated Financial Statements also comply with Article 4 of the EU IAS Regulations. The Consolidated Financial Statements have been prepared on a going concern basis, applying a historical cost convention, except for the measurement of investment property, financial assets classified as availablefor-sale and derivative financial instruments that have been measured at fair value. In the current year, the Group has applied a number of amendments to IFRSs and a new Interpretation issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2017. Recognition of deferred tax assets for unrealised losses Amendments to IAS 12, and Disclosure initiative amendments to IAS 7. The adoption of these amendments did not have any impact on the Consolidated Financial Statements of the Group or the Company for the current period or any prior period and is not likely to affect future periods. The amendments to IAS 7 require disclosure of changes in liabilities arising from financing activities, see Note 17. A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2017, and have not been applied in preparing these consolidated financial statements: IFRS 9 Financial instruments IFRS 15 Revenue from contracts with customers IFRS 16 Leases Amendment to IAS 40, Investment property relating to transfers of investment property Annual improvements 2014 2016 IFRIC 22 Foreign currency transactions and advance consideration None of these standards not yet effective are expected to have a significant effect on the Consolidated Financial Statements of the Group. Certain Standards which might have an impact are discussed below. Title of standard Nature of change IFRS 9 Financial Instruments IFRS 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. Page 27

Impact The group has reviewed its financial assets and liabilities and is expecting the following impact from the adoption of the new standard on 1 January 2018: i. Classification Financial assets and liabilities IFRS 9 contains three principal classification categories for financial assets: measured at amortised cost, FVOCI and FVTPL. The standard eliminates the existing IAS 39 categories of held to maturity, loans and receivables and available for sale. Based on its assessment, the Group does not believe that the new classification requirements will have a material impact on its accounting for investments in equity securities that are managed on a fair value basis. At 31 December 2017, the Group had no equity investments classified as available-for-sale. There will be no impact on the Group s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through the Consolidated Statement of Comprehensive Income and the group does not have any such liabilities. The derecognition rules have been transferred from IAS 39 Financial Instruments: Recognition and Measurement and have not been changed. ii. Impairment Financial assets and contract assets The new impairment model requires the recognition of impairment provisions based on expected credit losses (ECL) rather than only incurred credit losses as is the case under IAS 39. It applies to financial assets classified at amortised cost, debt instruments measured at FVOCI, contract assets under IFRS 15 Revenue from Contracts with Customers, lease receivables, loan commitments and certain financial guarantee contracts. The significant financial assets held by the Group that will be impacted by the impairment losses recognised under IFRS 9 are trade receivables. Gross trade receivables held at 31 December 2017 were 29,139k with an impairment provision, recognised under IAS 39, of an immaterial amount as shown in Note 10. Based on the reasons set out in the Financial risk factors section (Note 1), the credit risk associated with unpaid rent is deemed to be low. Management have performed an assessment of the impact of impairment losses recognised for trade receivables under IFRS 9 at 31 December 2017 through estimating the ECLs based on actual credit loss experienced over the past three years. Based on this assessment the impact and volatility on impairment losses recognised under IFRS 9 is immaterial. iii. Hedge accounting As a general rule, more hedge relationships might be eligible for hedge accounting, as the standard introduces a more principles-based approach. The Group has no current hedge relationships for foreign exchange contracts or cross currency swap contracts designated as net investment hedges which would qualify as continuing hedges upon the adoption of IFRS 9. The Group does not intend to designate other derivative instruments which may be used as part of its risk management strategy as hedging relationships under IFRS 9. iv. Disclosures Date of adoption by group The new standard also introduces expanded disclosure requirements and changes in presentation. These are not expected to change the nature and extent of the Group s disclosures. Must be applied for financial years commencing on or after 1 January 2018. The Group will apply the new rules retrospectively from 1 January 2018, with the Page 28

practical expedients permitted under the standard. Comparatives for 2017 do not require restatement. Title of standard Nature of change Impact Date of adoption by group Title of standard Nature of change Impact Date of adoption by group IFRS 15 Revenue from Contracts with Customers The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers contracts for goods and services. The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer. The standard permits either a full retrospective or a modified retrospective approach for the adoption. Management has assessed the effects of applying the new standard on the Group s financial statements. Revenue recognition IFRS 15 does not apply to rental income which makes up over 76% of total revenue of the Group, but does apply to other non-core revenue streams; service charge income, management and performance fees and trading property disposals. At present the Group does not expect IFRS 15 to have a significance difference in the timing of the recognition of revenue for the non-core income streams that falls under the scope and an immaterial impact on the Group s Consolidated Statement of Comprehensive Income. Disclosures The new standard also introduces expanded disclosure requirements. These will change the nature and extent of the Group s revenue disclosures. Mandatory for financial years commencing on or after 1 st January 2018. The Group intends to adopt the standard using the modified retrospective approach which means that the cumulative impact of the adoption will be recognised in retained earnings as of 1 January 2018 and that comparatives will not be restated. IFRS 16 Leases IFRS 16 was issued in January 2016. It will result in almost all leases being recognised on the balance sheet for a lessee, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term and low-value leases. The accounting for lessors will not significantly change. At present, as a lessee the Group holds one operating lease, with the noncancellable future lease payments at 31 December 2017 of 96k. Management have performed an assessment of the impact of bringing operating leases on balance sheet and IFRS 16 is expected to be immaterial to the Group. Mandatory for financial years commencing on or after 1 January 2019. At this stage, the Group does not intend to adopt the standard before its effective date. The Group intends to apply the simplified transition approach and will not restate comparative amounts for the year prior to first adoption. There are no other IFRSs or IFRS IC interpretations that are not yet effective that would be expected to have a material impact on the Group. Basis of consolidation The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries the Group. The controlling share in the Group is held by SEGRO European Logistics Partnership S.à r.l. via its holding in SELP Investments which, in turn holds a majority of shares in SELP Finance S.à r.l. The Group s subsidiaries are held by SELP Finance S.à r.l. The share of shareholder interests and profit or loss attributable to non-group shareholders is attributed to Non-Controlling Interests. Non-Controlling Interests are held directly or indirectly by SEGRO Luxembourg S.à r.l. and PSP Britannia Ltd. Inter-company transactions, balances and unrealised gains or losses on transactions between Group companies are eliminated, except where there are indications for impairment. Page 29

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. Business combinations The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition related costs are recognised in the Income Statement as incurred. The acquiree s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell. Goodwill arising on acquisition is recognised as an asset measured at cost, being the excess of the cost of the business combination over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group s interest in the net fair value of the acquiree s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the Income Statement. The interest of non-controlling interest shareholders in the acquiree is initially measured at their proportion of the net fair value of the assets, liabilities and contingent liabilities recognised. When the consideration transferred by the Group in a business combination includes a contingent consideration arrangement, the contingent consideration is measured as its acquisition-date fair value. Changes in fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. Contingent consideration that is classified as an asset or a liability is re-measured at subsequent reporting dates in accordance with IAS 39, as appropriate, with the corresponding gain or loss being recognised in the Group Income Statement. Accounting for asset acquisitions For acquisitions of a subsidiary not meeting the definition of a business, the Group allocates the cost between the individual identifiable assets and liabilities in the Group based on their relative fair values at the date of acquisition. Such transactions or events do not give rise to goodwill. Going concern Note 1 to the Consolidated Financial Statements includes the Group s risk factors, along with its policies and processes for managing such risks. The Group considers that positive net operating cash flows at 114,154k (2016: 87,269k) together with its short term net assets and access to and the Revolving Credit Facility funding via the Group s Revolving Credit Facility will allow the Group to meet its short-term commitments. As a consequence, Management believes that the Group has adequate resources to continue in operation for the foreseeable future and, accordingly, continues to adopt the going concern basis of accounting in preparing the annual Consolidated Financial Statements. Page 30

Cash Flow Statement The Group reports cash flows from operating activities using the indirect method. Interest received is presented within investing cash flows; interest paid is presented within operating cash flows. The acquisitions of investment properties are disclosed as cash flows from investing activities because this most appropriately reflects the Group's business activities. Foreign currency transactions Foreign currency transactions are translated into the functional currency at the exchange rates ruling on the transaction date. Foreign exchange gains and losses resulting from settling these, or from retranslating monetary assets and liabilities held in foreign currencies, are booked in the Consolidated Income Statement. Consolidation of foreign entities The Consolidated Financial Statements are presented in Euro which is the Company s functional currency and the Group s presentational currency. The Group is domiciled within the Euro-zone and its operations are predominately located within the Euro-zone, hence, the Group s functional currency is the Euro. Entities located outside the Euro-zone are mainly using Euro as the main operating currency, as a majority of transactions and balances held in Euro and therefore the Group considers that the functional currency of these entities is the Euro. Thus no currency translation adjustment (CTA) is recognised in the consolidated statement of other comprehensive income. The main exchange rates used to translate foreign currency denominated amounts in 2017 are: Consolidated Statement of Financial Position: 1 = PLN4.159 (2016: 4.402) and 1 = CZK25.58 (2016: 27.09) Consolidated Statement of Comprehensive Income: 1 = PLN4.31 (2016: 4.36) and 1 = CZK26.59 (2016: 27.03) Investment properties are valued by the Group s independent valuers in Euro. Investment properties These properties include completed properties that are generating rent or are available for rent, and development properties that are under development or land this is available for development. Investment properties comprise freehold and leasehold properties and are first measured at cost (including transaction costs), then revalued to market value at each reporting date by independent professional valuers. Leasehold properties are shown gross of the leasehold payables (which are accounted for as finance lease obligations). Valuation gains and losses in a period are recognised in the Consolidated Income Statement. As the Group uses the fair value model, as per IAS 40 Investment Properties, no depreciation is provided. An asset will be classified as held for sale in line with IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations, where there is Board approval at the year-end date and the asset is expected to be disposed of within 12 months after the date of the Consolidated Statement of Financial Position. Property acquisitions and disposals Properties are treated as acquired at the point when the Group assumes the significant risks and rewards of ownership and as disposed of when these risks or rewards are transferred to the buyer. Generally, this would occur on completion of contract. Any gains or losses arising on de-recognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is de-recognised. Leases Leases where substantially all of the risks and rewards of ownership are transferred to the lessee are classified as finance leases. All others are deemed operating leases. Under operating leases, properties Page 31