KPMG - IERE

Future Share issues could dilute the interests of existing investors and lower the price of the Shares
Following the Offer, the Company is expected to have approximately 730 million Shares authorised
but unissued. In order to raise equity financing to fund future investments and acquisitions, the
Company anticipates issuing additional Shares in subsequent public offerings or private placements.
In the case of further issues of Shares by the Board up to the total authorised capital, any such
Shares will not be issued on a pre-emptive basis pro rata to the number of Shares they already hold
unless the Shares are issued for cash at a price of less than their prevailing Net Asset Value.
Therefore, it may not be possible for existing investors to participate in such future share issues,
which may dilute the existing investors’ interests in the Company. In addition, the issue of additional
Shares by the Company, or the possibility of such issue, may cause the market price of Shares to
decline.
Exchange rate fluctuations between Euros and Sterling may reduce the value of the Shares and dividends
declared on the Shares, and any hedging or derivative transactions may not limit risk exposure fully or at all
Although the Share price will be quoted in Sterling following Admission, the Group will transact and
report its financial results in Euros. In addition, the amount of any dividends declared on the Shares
will be determined based on Euro-denominated results of operations. The Company will declare its
dividends in Euros and the amount received by Shareholders will be an amount in Sterling, converted
from the Euro dividend amount at the current spot exchange rate at or before the time of payment.
As a consequence, Shareholders will experience fluctuations in the market price of their Shares as a
result of, inter alia, movements in the exchange rate between Sterling and Euro. Any movements in
the exchange rate between Sterling and Euro prior to Admission will impact on the amount of funds
available for investment. Movements in the exchange rate may be influenced by factors such as trade
imbalances, levels of short-term interest rates, differences in relative values of similar assets in
different currencies, long-term opportunities for investment and capital appreciation and political
developments.
Although the Group’s current borrowings are denominated in Euros, in the future the Group may
borrow in currencies other than the Euro, for example in order to purchase assets in countries such
as Switzerland and may therefore hedge the relevant currency risk. The effectiveness of any derivative
instruments that the Group may use for hedging purposes, including forward contracts, options,
swaps or other forms of derivative instruments, will depend generally on the Group’s ability to
predict market changes correctly. As a result, unanticipated market changes may result in poorer
overall investment performance than if the hedging or derivative transaction had not been executed.
In addition, the degree of correlation between price movements of the instruments used in hedging
activities and price movements in a position being hedged may vary. An imperfect correlation could
prevent the Group from limiting its risk exposure and create new risks of loss.
Exposure to currency fluctuations
Foreign exchange risk arises from the possibility that fluctuations in foreign exchange rates will affect
the value of the Company’s assets and the market price of the Shares. Historically, all of the Group’s
investments have been made in Euro and the Company’s financial results are reported in Euro. If the
Group completes the acquisition of Committed to be Acquired logistics properties in Warsaw and
Prague, the Group may be exposed to foreign exchange risk to the extent that taxes will be payable
in the zloty and koruna respectively and rental income from Warsaw will be received in the zloty.
Neither Poland nor the Czech Republic are members of the Exchange Rate Mechanism II of the
European Central Bank and their currencies are therefore not linked to the Euro. Similarly the Group
may be subject to other foreign exchange risk if it acquires properties in other countries that do not
have the Euro as their currency such as Switzerland.
The Company is therefore subject to and may in the future become more subject to currency
fluctuations on translating revenues and costs from non Euro currencies such as the zloty and koruna
into Euros which, given the anticipated growth of this business, could have a material adverse effect
on the Company’s business, prospects, financial results and/or financial condition.
The Company does not intend to create a public market in the United States which will impair US
Shareholders’ ability to transfer the Shares.
The Shares have not been registered in the United States under the Securities Act or under other
applicable securities laws and are subject to restrictions on transfer contained in such laws. They may
not be resold in the United States except pursuant to an exemption from or in a transaction not
subject to the registration requirements of the Securities Act and applicable state securities laws.
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