Schroders Investment Trust Conference 2019

1. Schroders Investment Trust Conference 2019

2. Schroder Real Estate Investment Trust Nick Montgomery, Head of UK Real Estate

3. Schroder Real Estate Investment Trust Targeting an attractive income return with income and capital growth Source: Schroders, April 2019. 1Follows 5% dividend increase payable for the quarter ending 31 December 2018. Diversified portfolio focussed on higher growth assets benefiting from structural change Latest published unaudited NAV at 31 December 2018 of £358.6 million or 69.2 pps Current dividend of 2.6 pps1 p.a., paid quarterly Current share price of 58 pps Five contracted disposals during Q1 19 totalling £50 million LTV of 21% on completion of unconditionally contracted disposals Strategic objectives focussed on: • Winning Cities and strong asset fundamentals • Increase net income through transactions and asset management • Managing portfolio risk and enhancing defensive qualities • Cost reduction Key ongoing activity to achieve the strategic objectives: • Reduced cost of debt and extended capacity of revolving credit facility • Selective further disposals, manage cash drag paying down the revolving credit facility • Reinvest sales proceeds to increase dividend cover and drive earnings • Increase investor awareness of strategy and potential returns

4. Strategy and market context

5. Six ‘mega’ themes Long term structural changes with an emerging sixth mega theme Source: IDC (2017), International Energy Agency (2017), Oxford Economics (2018), United Nations (2016), World Bank (2017). Forecast risk warning: Please refer to the important information slide at the end of this presentation.

6. Identifying mispriced assets in Winning Cities Investment characteristics of prime, secondary and tertiary assets Focus on real estate fundamentals Source: MSCI/AREF UK Quarterly Funds Index, Schroders. March 2019. Diverse economy A mix of different sectors, large companies and start-ups Quality of Life Cultural attractions, good retail and leisure facilities, a mix of new and historical buildings Prime Secondary Grade A Re-positioning Bristol Cambridge Leeds London Manchester Milton Keynes Oxford Reading – Building quality + Bond proxy income Skilled labour force Strong universities and schools, an open-source culture Infrastructure Good transport, energysupplyand broadband, pro-active local government Secondary Grade B Tertiary – Income quality +

7. 93% of the portfolio located in higher growth locations Source: Oxford Economics, Schroders March 2019. Note: Size of the bubbles represents capital values as at 31 March 2019. The labels are where the cities and towns are within the top 10 GDP growth between 2019 and 2024. For illustrative purposes only and should not be viewed as a recommendation to buy or sell. Forecast risk warning: Please refer to the important information slide at the end of this presentation. % of SREIT Capital Value % of UK GDP Q1 Q1 Q1 Q2 Q1 Q2 Q1 Q1 Q2 Q1

8. SREIT vs. MSCI IPD Benchmark to December 2018 Outperformance from an above average income return and asset management Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Source: MSCI property level returns gross of fees on a like-for-like basis including direct and indirect property investments. 1IPO in July 2004. SREIT performance net of fees. 12 months total return 2.3% relative outperformance p.a. % Three year total return 2.4% relative outperformance p.a. % Since IPO total return1 1.4% relative outperformance p.a. %

9. UK market overview CBRE all property index – capital value Polarisation across the sectors Source: CBRE as at 31 March 2019; 1Range shows highest and lowest change across 10 segments: standard shops SE and rest UK; shopping centres; retail warehouses; Central London offices; rest of London/M25 west offices; rest UK offices; Industrial SE and RUK; other. % age change – month-on-month (average – bars; range1 – drop-down lines) and cumulative calendar year (line) EU referendum SDLT increase Industrial sector Retail sector

10. Regional markets Regional markets not suffering from over-supply Source: Centre for Cities, PMA, Schroders, VOA. July 2018. Note the Big 6 includes Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester. 1Four quarters to 2018 Q3. The forecasts should be regarded as illustrative of trends. Actual figures will differ from forecasts. Please see important information regarding forecasts. Office building starts ex. London Stock of industrial floorspace Rolling annual starts, million sq. ft.

11. Is UK commercial real estate at the top of the cycle? UK capital values, 2000=100 Cycles can de-couple due to variations in growth, building and structural forces Source: IPD, Schroders. January 2019. The forecast assumes that the EU and UK agree a transition period after March 2019. Note the forecasts should be regarded as illustrative of trends. Actual figures will differ from forecasts. Please see Important Information regarding forecasts. Forecast

12. Portfolio overview

13. Asset management initiatives Opportunities to add value through the cycle Working closely with occupiers to drive asset management gains Source: Schroders, March 2019. Short-term Medium-term Long-term • Lettings of vacant units • Capex and refurbishments • Lease extensions regearsand surrenders to improve the income profile of the fund • Change of use • Low-risk development • Managed exits of underperforming retailers • Strategic land and adjoining ownerships • Repositioning assets • Redevelopments Manchester, City Tower Milton Keynes, Stacey Bushes London, Bloomsbury

14. Portfolio statistics As at 31 December 2018 1On a like-for-like basis with MSCI i.e. ignoring acquisition costs. 2Assuming earlier of lease break and expiry. 3% of ERV. Structure as a % of value as at 31 December 2018

15. London, Bloomsbury, University of Law (50% share) Bloomsbury and King’s Cross submarkets One of London’s strongest submarkets Source: Schroders. Valuation information as at 31 December 2018. 85,000 sq. ft. site over 0.8 acres with a low site density of 68% Valued at £36.5 million reflecting a net initial income yield of 3.7% and a reversionary income yield of 4.9% Let to University of Law lease until 2026 at a rent of £34 per sq. ft. Schroder asset Cycle improvements Rental values King’s Cross and St Pancras Alfred Place Pocket Park Francis Crick Institute Euston Alan Turing Institute Euston Square £30–40per sq ft Initial planning, rights of light and massing studies have been undertaken with the potential to increase massing on site up to c.140,000 sq. ft. Further appointments being considered to establish the feasibility of the part redevelopment with a pre-let to the University of Law Warren Street University College London University of Law Campus Regent’s Park Russell Square Great Portland Street £60–65 per sq ft Goodge Street Ongoing discussion with the University of Law to establish the viability for a part surrender, redevelopment and pre-letting of the Ridgmount Street part of the site Upcoming rent review in December 2019 £60–65 per sq ft The British Museum Holborn Oxford Street Tottenham Court Road

16. Milton Keynes, Stacey Bushes Industrial Estate Crystallising strong rental growth Source: Schroders. Valuation information as at 31 December 2018. 317,000 sq. ft. multi-let industrial estate comprising 42 units west of Milton Keynes Valued at £37.1 million reflecting a net initial income yield of 4.9% and a reversionary income yield of 5.4% During the year to 31 December 2018 the property delivered a 37.1% total return Rolling refurbishment programme ongoing to drive rent increases as current leases expires. Targeting £10 per sq. ft. on Heathfield Planning granted and commencement of works imminent for £2.3 million, six-unit Heathfield development. ERV of £155,000 p.a. upon completion 19 Hollin Lane letting complete to Granemore Group at £80,000 p.a. Business plan at acquisition in October based on £67,500 p.a. Scheme fully let. Rent review ongoing at Unit 4 Heathfield with 58% rental uplift agreed. Firstlight leases totalling £180,500 p.a. renewed for a further five years

17. Leeds, Millshaw Industrial Estate Strategically located estate with development potential 463,400 sq. ft. multi-let estate comprising 27 units close to the M62 and M621 motorways Valued at £31.5 million reflecting a net initial income yield of 4.4% and a reversionary income yield of 6.7% During the year to 31 December 2018 the property delivered a 15.9% total return Source: Schroders. Valuation information as at 31 December 2018. Works commenced on 26/27 for JD Sports Gyms, PC in July 2019 Conversations ongoing with adjoining White Rose Office Park for future site redevelopment. New train station discussions progressing Renewal discussions progressing with Alliance Healthcare and Galaxy Insulation Unit 6B under offer at £7.25 per sq. ft., reflecting record scheme rent per sq. ft. Agreement for lease exchanged on unit 1&2, landlord works progressing

18. Summary

19. Summary Source: Schroders, April 2019. Real estate cycle in extra time Growing polarisation across the market Diversification and lower net debt level important SREIT’s portfolio relatively well positioned due to: • Higher income return • Exposure to higher growth locations • Low retail weighting vs. Benchmark • Asset management opportunities • Stable balance sheet Increasing exposure to assets and sectors with strong fundamentals Exposure to Winning Cities experiencing higher levels of GDP, employment and population growth Managing portfolio risk in order to enhance the portfolio’s defensive qualities Increasing net income through transactions and asset management Strategic priorities

20. Appendix

21. Key Information Document (KID) Source: Schroders, May 2018. Background SREIT – cost composition As required under the regulations for Packaged Retail and Insurance based Investment Products (PRIIPs), a KID is required to be issued for all investment products which are available to the retail investor from 1 January 2018 The calculation of figures and performance scenarios contained in the KID are prescribed by PRIIPS and have neither been set nor endorsed by the Board PRIIPS is inconsistently applied by market participants and hence creates confusion amongst investors Challenges Lack of consistency of calculation Misleading for investors Creates uneven playing field

22. Compliance disclosure requirement Schroder Real Estate Investment Trust – discrete yearly performance Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Source: MSCI December 2018. Performance net of fees. Schroder Real Estate Investment Trust – Risk factors: Investments in real estate are relatively illiquid and more difficult to realise than equities or bonds. Yields may vary and are not guaranteed. The use of gearing is likely to lead to volatility in the Net Asset Value (‘NAV’) meaning that a relatively small movement either down or up in the value of the Company’s total assets will result in a magnified movement in the same direction of that NAV. There is no guarantee that the market price of shares in Investment Companies such as SREIT will fully reflect their underlying NAV. The value of real estate is a matter of a valuer’s opinion rather than fact. The trust may be concentrated in a limited number of geographic regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the funds. The Company may borrow money to invest in further investments, this is known as gearing. Gearing will increase returns if the value of the assets purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so

23. Schroder Investment Management Limited, 1 London Wall Place, London EC2Y 5AU. schroders.com