Expected Exit from UK REIT Regime

Notice of expected exit from the UK Real Estate Investment Trust (REIT) Regime

Company announces that it expects to leave the UK Real Estate Investment Trust (REIT) regime, effective 31 December 2026.

To remain a REIT, the Company must meet specific legislative conditions and in particular must not be a "close company" as defined in the relevant legislation. Following recent changes in the Company's share ownership, which is outside of the control of the Company, CLS no longer meets this specific requirement and accordingly expects to exit the REIT regime on 31 December 2026.

Key changes:

Strategy: This change relates strictly to the tax status of the Company and its UK subsidiaries. The property management and investment strategy for the group remain unaffected.

​Company Tax: From 1 January 2027, the Group will no longer be exempt from UK corporation tax on its rental profits or property sales. These profits will now be taxed at the standard UK corporation tax rate.

​Dividends: Future dividends will generally be paid as ordinary dividends other than the final 2026 dividend. The latter is expected to be paid as a "Property Income Distribution" (PID) in whole or part to meet the pre exit REIT conditions.

Shareholders are advised to consult their own professional tax advisers regarding the implications of this change on their individual positions.

Fredrik Widlund, CEO of CLS commented:

"This is an event that is outside of the control of CLS. Nevertheless, we continue to focus on our key strategic objectives to reduce vacancy and improve earnings growth; reduce debt through targeted asset sales; refinance or repay debt maturities; and invest selectively in our portfolio to unlock additional value."