Annual Results 2012

1

Contents •  Overview

•  Financials

•  Portfolio

•  Markets

•  Summary

2

Richard Tice Chief Executive Officer

John Whiteley Chief Financial Officer

London 46%

France 25%

Germany 20%

Direct 6%

Indirect 3%

Property investments by value

Sweden

About CLS

•  Top TSR performance since 2008 in UK listed property sector - 18.7% pa compound

•  Specialist in high-yielding offices and opportunistically adding value

•  Cash generative: high yield (7%) vs low cost of debt (3.67%)

•  Rental income £68.3m; Property portfolio £934.5m

•  Management strong alignment of interest via shares

3

31 December 2012

Highlights of 2012 •  Substantially increased EPRA NAV

–  Increased occupancy levels

–  Increased rents like-for-like in local currency

–  Planning secured at Spring Mews, Vauxhall Square, Catena and Clifford’s Inn

–  Lowered cost of debt

–  Issued retail bond

•  Delivered Total Shareholder Return of 29.7%

4

•  Overview

•  Financials

•  Portfolio

•  Markets

•  Summary

5

Contents

Financial Highlights

•  EPRA NAV up 17.4% to 1,154.4p (2011: 983.1p)

•  Profit after tax up 20.4% to £46.7m (2011: £38.8m)

•  Interest cover 3.9x (2011: 2.6x)

•  Low cost of debt 3.67% (2011: 4.06%)

•  Issue of 5.5% £65m retail bond 2019

•  Distributions increased by 6.7% to £13.1m (2011: £12.3m)

•  TSR 29.7% in 2012; 135.4% in 5 years

6

983.1

89.4 8.5

37.1

45.0

-8.7

800

840

880

920

960

1,000

1,040

1,080

1,120

1,160

1,200

1 Jan 2012 Underlying profit after tax

Share buy-backs

Revaluation of properties

FV movements on bonds

FX 31 Dec 2012

Strong NAV Growth Movement in EPRA NAV

Pence

7

1,154.4

Strong Cash Generation Profit after Tax

36.2

-7.4

16.2

-1.5

3.2

46.7

28.1

1.6

18.0

-18.5

9.6

38.8

-20

0

20

40

60

2012 2011

£m

8

EPRA PBT Tax Property valuation surplus

FV movement on derivatives

Other Profit after tax

85.1

127.3

55.3

65.0

31.9 3.7

-12.6

-26.6

23.1

97.6

0

50

100

150

200

250

300

1 Jan 2012 Retail Bond From operations

Other Tender buy-back

Capital expenditure

Corporate Bonds

revaluation

31 Dec 2012

Very High Liquidity Movement in Liquid Resources

£m

9

Cash Corporate Bonds

224.9

140.4

New Sources of Finance Movement in Gross Debt

625.1

690.2 65.0

35.1

-6.0

-21.3 -7.7

500.0

550.0

600.0

650.0

700.0

750.0

1 Jan 2012 Retail bond issue New loans Net refinancing Repaid FX 31 Dec 2012

£m

10

Debt Profile As at 31 December 2012

0

20

40

60

80

100

120

140

160

180

200

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Amortisation Bullet Repayments

£m

11

Diverse Financing Strategy to lower risk

•  Spread risk

–  21 banks

–  2 unsecured bonds

–  1 debenture

–  Ring fencing model

•  67% fixed or hedged

•  73% floating rate

•  Weighted avg. cost of debt 3.67% (2011: 4.06%)

•  Property LTV 58.8% (2011: 62.5%)

Sources of Finance

12

Hedged

Floating

27% 40% 33%

-100

-50

0

50

100

150

Total Shareholder Return TSR of listed property companies 2008 – 2012

13 Source: Bloomberg Property investment and development companies listed on LSE with Market Cap over £50m

CLS

%

Contents

•  Overview

•  Financials

•  Portfolio

•  Markets

•  Summary

14

Govt. 40%

Corporates 29%

Other 31%

Occupiers by sector

Property Portfolio Overview

•  Diversified portfolio in major European cities:

–  418 customers in 71 properties

–  424,000 sq m

–  Cost effective rents

•  65% of rents indexed

•  Secure income; 69% from governments & major corporations

•  WAULT 7.2 years (6.1 years to first break)

15

0

4

8

12

2007 2008 2009 2010 2011 2012

CLS Major European Cities

Actively Managed Portfolio

•  In-house property management •  Low vacancy rate of 3.8% vs

European office average of over 9%(1)

•  Rented in line with market rates

Historical long-term low vacancy rate Rented in line with market rates(2) (£m pa)

Source: 1. BNP Paribas Real Estate Research Q1'12. Average of 9 office markets:

London, Paris, Munich, Berlin, Hamburg, Brussels, Madrid, and Milan. 2. CLS Holdings plc

(1)

16

Impact of Indexation on rental income

1.0% increase +£423,000 pa

3.0% increase +£956,000 pa

5.0% increase +£1,646,000 pa

0

10

20

30

40

50

2013 2014 2015 2016 2017 Later

Rent expiring ERV of rent expiring

Property Portfolio Schedule

At 31 December 2012

Contracted Rent

£m Valuation

£m

Revaluation in local

currency

Net Initial Yield

%

Vacancy by rent

% WAULT (Years)

Rent £ psm

Capital Value* £ psm

London 29.1 437.5 4.7% 6.6 2.3 8.4 218 3,066

France 18.7 239.6 1.4% 7.7 3.8 5.0 202 2,490

Germany 14.1 197.4 0.1% 7.0 7.4 9.0 106 1,361

Sweden 6.4 60.0 0.3% 7.5 1.7 3.5 144 1,323

Total portfolio

68.3 934.5 1.7% 7.0 3.8 7.2 169 2,164

17 *Excludes Spring Mews

Movement in Rental Income

66.2 66.1

1.0

1.3

-0.1

-2.3

60

61

62

63

64

65

66

67

68

69

70

Rental Income 2011

Acquisitions Indexation Lettings & Expiries FX Rental Income 2012

£m

18

Movement in Investment Properties

902.1

934.5

13.1

9.2

5.0

16.2

-11.1

880

890

900

910

920

930

940

950

1 Jan 2012 Additions Developments Refurbishments Valuation Uplift FX 31 Dec 2012

£m

19

Property Portfolio Acquisitions in year

20

Property Crosspoint House,

Wallington SM6 Gateway House, Kennington SE11

Sentinel House, Coulsdon CR5 Total

Area 1,963 sq m 1,844 sq m 3,411 sq m 7,218 sq m

Rent £320,885 £281,960 £526,641 £1,129,486

Purchase price £2.19 m £3.33 m £5.89m £11.41m

NIY 14.10% 8.46% 8.94% 9.89%

Capital value £1,115 / sq m £1,807 / sq m £1,726 / sq m £1,580 / sq m

Weighted avg period to first

break 2.4 years 4.2 years 10.1 years

Vauxhall Regeneration

New US Embassy

Vauxhall Bridge

Vauxhall Transport Interchange Vauxhall Square

Spring Mews

21

Adding Value On site - Spring Mews, SE11

Gross internal area 20,800 sq m

•  400 student rooms

•  93 bedroom suite hotel

•  245 sq m retail space

•  468 sq m offices

•  561 sq m community centre

•  Planning gained May 2012

•  Started on site Q4 2012

•  Completion late 2014

•  Development cost c.£55m ex. land

•  Estimated rental value >£5.5m

•  Heads of terms agreed with hotel operator and with student manager

22

Adding Value Planning Gained – Vauxhall Square, SW8

Gross internal area 143,000 sq m •  520 apartments – 410 private in 2 x 50 storey

towers, 110 affordable homes •  22,732 sq m offices •  3,119 sq m of retail •  278 bedroom hotel, 123 bedroom suite hotel •  359 student bedrooms •  3,777 sq m multi-screen cinema, community

facilities, 50 bedroom hostel •  Substantial new public square and public

realm improvements •  Commence 2015 onwards, exploring options •  Reviewing approaches received from

operators and funding partners •  Development cost c£500 m

23

Adding Value Planning Gained

Clifford’s Inn, Fetter Lane, EC4 •  3,423 sq m office refurbishment and 8 residential

apartments •  Consent received Q1 2013, complete mid-2014 •  £10.1m refurbishment cost, income £1.4m pa

Catena, Stockholm •  Associate, 29.9% stake •  150,000 sq m: 800 apartments,

73,000 sq m commercial •  Consent secured end 2012,

exploring phasing and funding options

CGI of Clifford’s Inn

24

Sustainability

In London portfolio

•  Lowered gas usage by 25%

•  Lowered energy intensity per sq m by 15%

•  Installed >500 LED lights, 250 remaining

•  Installed 296 sq m photovoltaic panels at Buspace Studios

–  44kWp capacity

–  Zero net emissions from landlord areas

25

Other Investments

Cash management via corporate bonds

•  48 bonds from 38 issuers valued at £127.3 million

•  ROCE since late 2008: 74.9%

•  Running yield 8.2%

•  Income £9.1m year •  Return in 2012: 31.4%

Other associates (1.1% gross assets)

•  Cood Investments, Bulgarian Land Development, Nyheter24

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•  Overview

•  Financials

•  Portfolio

•  Markets

•  Summary

27

Contents

Future Direction in our Markets •  Increasing appetite for security of

income of real estate

•  Positive arbitrage to continue

between high net yields and low

interest rates

•  New funding sources and capital

replacing traditional debt sources;

margins levelling out

•  Genuine tenant demand continues

•  Across the board reduction in lettable

available space

28

London Continuing Vibrancy

•  Global investment destination of choice

•  Distressed sales continuing outside prime areas

•  Occupier demand firm, availability reducing outside CBD

•  Vauxhall Nine Elms regeneration zone – significant successes

29

London Population London Inward Migration

Continental Europe Wide variations

FRANCE •  Eurozone crisis impacted on confidence •  GDP growth negligible in 2012 & 2013

•  2012 lettings down 4% and 29% in Paris and Lyon respectively •  Investment transaction volume down 8% in 2012

GERMANY •  Employment at all time high >41 million •  2012 lettings (lower than 2011) above 10 year average at 3m sq m

•  Vacancy levels at 10 year low of 9% •  New construction at 5 year low

•  Competitive availability of bank debt

SWEDEN •  GDP growth strong at 1.2% in 2013, 2.6% 2014

•  3.8% vacancy in Stockholm CBD; 9.6% in Greater Stockholm •  Low new supply leading to near prime rental growth +20% in 2012

•  Catena can benefit from Stockholm population growth and office shortage 30 Source: DTZ, CLS

•  Overview

•  Financials

•  Portfolio

•  Markets

•  Summary

31

Contents

Summary

•  Strong TSR performance

•  Year of achievement at operating level

•  Innovative funding

•  Investing in new acquisitions

•  £60m development programme

•  Retaining high levels of liquidity

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www.clsholdings.com CLS Holdings plc 86 Bondway Tel: +44 (0) 20 7582 7766 London Fax: +44 (0) 20 7820 7728 SW8 1SF Email: enquiries@clsholdings.com

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Appendices

Corporate Bond Portfolio At 31 December 2012

Banking Insurance Building

Societies Financials Other Total

Value £29.3m £42.8m £8.7m £7.3m £39.2m £127.3m

Coupon yield 8.5% 7.5% 8.7% 7.0% 8.9% 8.2%

Issuers KBC

RBS

HBOS

Lloyds

Investec

Dresdner

SNS Bank*

Rothschild

Danske Bank*

Brit

AXA

Aviva

Generali

Irish Life

Swiss Re

Swiss Life

Direct Line

RL Finance

Phoenix Life

Legal & General

Friends Provident

Yorkshire

Nationwide

Man Group

Aberdeen AM

TUI

Fiat

SAS

Boparan

Europcar

Telefonica

Swissport

Alliance Oil

Lottomatica

Norske Skog

Corral Finans

Thomas Cook

British Airways

Renewable Energy Corp

34 * Less than £0.3m market value

London

35

•  28 properties •  137,800 sq m

France

•  26 properties •  17 in Paris •  96,200 sq m

36

LUXEMBOURG

Germany

•  16 properties •  145,000 sq m

37

Sweden

1 property •  45,400 sq m office park

2 associates •  Catena AB - 150,000 sq m

mixed-use development in Stockholm

•  Cood Investments

38

Vacancy Rate History

2.0%

4.0%

6.0%

8.0%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

39

KPI

Average Unexpired Lease Term

0

2

4

6

8

10

London France Germany Sweden Group

To first break To end of lease

40

EPRA Profit Before Tax Driven by lower net interest costs 12 months to 31 December 2012 2011 Difference

£m £m £m

Net rental Income 62.9’ 63.0’ (0.1)

Administration expenses (10.5) (10.9) 0.4’

Other expenses (2.9) (2.2) (0.7)

49.5’ 49.9’ (0.4)

Finance income 10.0 9.3’ 0.7‘

Finance expense (24.1) (29.2) 5.1’

FX translations 0.6’ 0.7’ (0.1)

Share of associates, excluding revaluations 0.2’ (0.8) 1.0‘

Wyatt -’ (0.5) 0.5’

Other -’ (1.3) 1.3’

EPRA profit before tax 36.2’ 28.1’ 8.1’

41