being unable to use its IT systems and/or losing                    ? Fire protection and access/security 
    data                                                                  procedures are in place at all of the 
  ? Terrorism or pandemics interrupt the Company's                        Company's managed properties 
    operations through impact on either the Investment                  ? Comprehensive property damage and business 
    Manager or the Company's assets or tenants                            interruption insurance is held, including 
                                                       Overall change     three years' lost rent and terrorism 
                                                       in risk from     ? At least annually, a fire risk assessment and 
                                                       last year:         health and safety inspection is performed for 
                                                       Decreased          each property in the Company's managed 
                                                                          portfolio 
 
 
 
 
 
                                                       Likelihood:      ? The Company engaged specialist environmental 
                                                       Moderate           consultants in 2019 to advise the Board on 
ESG                                                                       compliance with requirements and adopting 
                                                                          best practice where possible 
  ? Failure to appropriately manage the environmental                   ? The Company published its ESG policy in 2020 
    performance of the property portfolio, resulting                      which seeks to improve energy efficiency and 
    in it not meeting the required standards of                           reduce emissions 
    environmental legislation and making properties    Impact:          ? In April 2021 the Company constituted an ESG 
    unlettable or unsellable                           Moderate           Committee to ensure compliance with 
  ? ESG policies and targets being insufficient to                        environmental requirements, the ESG policy 
    meet the required standards of stakeholders                           and environmental KPIs, detailed in the ESG 
  ? Non-compliance with environmental reporting                           Committee report 
    requirements                                                        ? At a property level an environmental 
                                                                          assessment is undertaken which influences 
                                                       Overall change     decisions regarding acquisitions, 
                                                       in risk from       refurbishments and asset management 
                                                       last year:         initiatives 
                                                       Increased 
 
 
 
                                                       Likelihood: 
                                                       Low 
 
Acquisitions 
  ? Unidentified liabilities associated with the       Impact: High     ? Comprehensive due diligence is undertaken in 
    acquisition of new properties (whether acquired                       conjunction with professional advisers and 
    directly or via a corporate structure)                                the provision of insured warranties and 
                                                                          indemnities are sought from vendors where 
                                                                          appropriate 
                                                       Overall change 
                                                       in risk from 
                                                       last year: No 
                                                       change 
 Emerging risks

The COVID-19 pandemic represents a principal risk and has significantly impacted the Company in the current financial year, but its medium and long-term impacts on the global economy are yet to be fully understood.

The Board is continuing to monitor the potential longer-term risks associated with Brexit. The main potential negative impact of Brexit is a deterioration of the macro-economic environment, potentially leading to further political uncertainty and the investment and occupier markets. The Board believes the Company is well placed to weather any longer-term impact of Brexit because the Company has a diverse portfolio by sector and location with an institutional grade tenant base and low gearing.

No emerging risks have been added to the Company's Risk Register during the year. Going concern and longer-term viability

In accordance with Provision 31 of the UK Corporate Governance Code 2018 issued by the Financial Reporting Council ("the Code"), the Directors have assessed the prospects of the Company over a period longer than 12 months. The Board resolved to conduct this review for a period of three years, because: ? The Company's forecasts cover a three-year period; and ? The Board believes a three-year horizon maintains a reasonable level of accuracy regarding projected rental income

and costs, allowing robust sensitivity analysis to be conducted.

The Directors have assessed the following factors, in particular relating to the impact of the COVID-19 pandemic, in assessing the Company's status as a going concern and its longer-term viability, including events up to the date of authorisation of the financial statements: ? The extent of any operational disruption; ? Potential curtailment of rental receipts; ? Diminished demand for leasing the Company's assets going forwards; ? Contractual obligations due or anticipated within one year; ? Potential liquidity and working capital shortfalls; ? Access to funding and compliance with banking covenants; and ? Ongoing compliance with regulatory requirements including the REIT regime.

The Directors note that the Company has performed better than expected over the course of the COVID-19 pandemic disruption, with rent collection rates ahead of forecast and industrial asset valuations and rents in particular improving over the last 12 months.

Results of the assessment

Based on prudent assumptions within the Company's forecasts regarding the recovery of deferred rent, tenant default, void rates and property valuation movements, the Directors expect that over the three-year period of their assessment: ? The Company has surplus cash to continue in operation and meet its liabilities as they fall due; ? Interest cover covenants on borrowings are complied with; ? LTV covenants aren't breached; and ? REIT tests are complied with.

Sensitivities

These assessments are subject to sensitivity analysis, which involves flexing a number of key assumptions and judgements included in the financial projections: ? The anticipated level of recovery of rents deferred due to the impact of the COVID-19 pandemic; ? Tenant default; ? Length of potential void period following lease break or expiry; ? Acquisition NIY, disposals, anticipated capital expenditure and the timing of deployment of cash; ? Interest rate changes; and ? Property portfolio valuation movements.

This sensitivity analysis also evaluates the potential impact of the principal risks and uncertainties should they occur which, together with the steps taken to mitigate them, are highlighted above and in the Audit and Risk Committee report. The Board seeks to ensure that risks are mitigated appropriately and managed within its risk appetite all times.

Sensitivity analysis considered the following areas:

Covenant compliance

The Company operates four loan facilities which are summarised in Note 15. At 31 March 2021 the Company had significant headroom on lender covenants at a portfolio level with: ? Company net gearing of 24.9% compared to a maximum LTV covenant of 35% and GBP165.0m (30% of the property portfolio)

unencumbered by the Company's borrowings; and ? Covenant waivers in place on its fixed-rate debt facilities for the quarter ended 31 March 2021 to mitigate risk on

each individual security pool.

Reverse stress testing has been undertaken to understand what circumstances would result in potential breaches of financial covenants. While the assumptions applied in these scenarios are possible, they do not represent the Board's view of the likely outturn, but the results help inform the Directors' assessment of the viability of the Company. The testing indicated that: ? The rate of loss or deferral of contractual rent on the borrowing facility with least headroom would need to

deteriorate by a further 38% from the levels included in the Company's prudent forecasts to breach interest cover

covenants; and ? At a portfolio level property valuations would have to decrease by 28% from the 31 March 2021 position to risk

breaching the overall 35% LTV covenant.

The Board notes that the May 2021 IPF Forecasts for UK Commercial Property Investment survey suggests an average 0.4% increase in rents during 2021 with capital value increases of 1.8%. The Board believes that the valuation of the Company's property portfolio will prove resilient due to its higher weighting to industrial assets and overall diverse and high-quality asset and tenant base comprising 159 assets and over 201 typically 'institutional grade' tenants across all commercial sectors.

Liquidity

At 31 March 2021 the Company has: ? GBP3.9m of cash-in-hand and GBP10m undrawn RCF, with gross borrowings of GBP140m resulting in low net gearing, with no

short-term refinancing risk and a weighted average debt facility maturity of seven years; ? An annual contractual rent roll of GBP38.7m, with interest costs on drawn loan facilities of only c. GBP4.7m per annum;

and ? Received 90% of rents due relating to the April - June 2021 quarter.

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June 16, 2021 02:16 ET (06:16 GMT)