Responsible Property Investment (RPI) Summary Policy

DTZ Investors is a full

service vertically

integrated real estate

manager. We have been

operating in the UK since

1968 and in Continental

Europe since 1999. We recognise that we have a fiduciary

duty to our clients to achieve the best

returns possible from the assets we

manage on their behalf. However

achieving those returns should not be at

an undue cost to wider society. DTZ

Investors therefore understands its

responsibility to manage those assets in a

manner that is sensitive to the

environment, provides social benefit and

does not put the reputation of either DTZ

Investors or our clients at risk through

poor corporate practices.

In 2013 we became a signatory to the

United Nations Principles for Responsible

Investment (UNPRI), a voluntary

framework for incorporating

environmental, social and governance

(ESG) issues into investment decision-

making and ownership practices. In

the same year, we developed our

Responsible Property Investment (RPI)

Strategy applicable to all of our UK

portfolios.

This document is DTZ Investors’ RPI policy,

communicating our strategy, approach

and governance procedures for the

implementation and monitoring of RPI

principles within our investment strategy.

2 Summary policy

Our approach

Summary policy 3

With climate change, increasing legislation and changing occupier demands we believe

that a sustainable portfolio will have the effect of reducing environmental impact and

risk of obsolescence, lowering operating costs, and enhancing tenant retention,

therefore improving investment performance of our portfolios. Consequently, our

strategy focuses on understanding the impact of these issues on future value and

minimising the risk to our portfolios. Therefore integrating environmental, social and

corporate governance (ESG) considerations into our investment process and timeline

from pre-acquisition to disposal (see diagram on left) is critical to our approach to

Responsible Property Investment, while operating within the context of our clients’

financial objectives.

Through our RPI strategy we will be compliant with UK statutory requirements and EU

directives, including: the Carbon Reduction Commitment Energy Efficiency Scheme

(CRC), the Energy Savings Opportunity Scheme (ESOS), the Minimum Energy Efficiency

Standards (MEES) and the Heat Network Metering and Billing Regulations 2014 (see

Annex A for a brief description of the schemes and our compliance procedures). In

addition through our RPI strategy we will seek to go beyond compliance, establishing

best in class RPI practices to ensure our assets make a positive impact to the

environment and stakeholders in which they interact.

Our strategy follows a proportional cost-benefit led approach where this does not

mean that all initiatives must be self-financing or indeed that there must be a proven

economic reward, but means that we will consider the relationship between the

financial cost of any investment or activity and our evaluation of ESG rewards.

Importantly we will also consider our portfolios in the context of market practice and

‘peer group’ properties to guard against depreciation risk and obsolescence (‘future

proofing of investments’).

For us to meet the objectives above and ensure we are reacting to climate related

risks, and changing occupier demands we established an RPI committee,

representative of our fund management, energy & sustainability and property

management teams. It is this committee that has been responsible for the

development of our strategy, core areas of focus (page 4) and targets (Appendix B),

and is responsible for overseeing the implementation of this policy, reporting on

results and future modifications.

Furthermore, we are committed to fostering the right culture and appropriate training

to enable all employees to understand the objectives of our responsible investment

policy as well as relevant legislation and best practices.

• Sustainability risk assessments are carried out at pre-acquisition to identify potential ESG issues and mitigation measures. Issues with direct financial relevance are integrated into our valuation process.

• Our property managers (and third party suppliers) must adopt our RPI policy to ensure asset performance is monitored, benchmarked and maintained

• Our assets are covered by an Environmental Management System (EMS) to minimise their impact on the environment.

• We have developed fit out and refurbishment guides to ensure our contractors take into account sustainability at the earliest possible stage

• Sustainability improvement plans are carried out across assets

Improvements / renovations

Operation and Maintenance

Acquisition / disposal and design stages

• We benchmark at the asset level to the Real Estate Environmental Benchmark (REEB) and at a portfolio level to the Global Real Estate Sustainability Benchmark (GRESB) and use the results to identify opportunities for performance and ESG policies.

Benchmarking and review

The RPI policy is applicable to all of our

discretionary managed property portfolios

and to our advisory mandates in so far as

concerns the scope of our contractual services

and ability to influence the management of

portfolios.

The core areas of focus (excluding legislative

demands and benchmarking) are shown left.

These are a combination of both

environmental and social indicators that are

applied across our portfolio and are practically

assessed at the property level for

implementation. Our objectives and short-

long term targets align to these core areas.

The implementation of our RPI policy aims to

be specific and measurable so that we may

evaluate and report upon the success of this

policy and its implementation in future years.

Our strategy is not static but is constantly

evolving responding to innovation within the

market and the needs of our stakeholders. As

a result our RPI committee will review the

strategy annually, with progress reviewed on

a monthly basis.

The following represents the core areas

of focus covered by the RPI Policy:

CO2

Energy Efficiency

Water Efficiency

Waste Management

Tenant & Community Engagement

Carbon Emissions

Health & Wellbeing

Biodiversity

Refurbishment & Development

Procurement and supplier management

Flood Risk

Transport

Renewables and sustainable technology

Summary policy 4

Our approach

Summary policy 5

Stakeholder Engagement

We have in a place a stakeholder engagement programme that

ensures our clients, Investment Committees, DTZ Investors staff

and third party suppliers are aware of our policy, procedures and

targets. As such quarterly meetings are held to communicate on

progress and strategy development on a quarterly basis.

For our assets we have put in place a Tenant & Community

engagement programme which allows us to communicate

effectively the aims of the RPI strategy to internal and external

stakeholders.

Our wider stakeholder engagement includes dialogue and

participation in thought leadership with groups such as the UK

Green Building Council.

In 2019 we will publish our first annual ESG report to highlight the

journey that DTZ Investors has gone through in integrating ESG into

our property and asset management practices over the past five

years.

Asset Improvement & Performance Management

We undertake audits across the portfolio to create a baseline from

which all future performance can be measured. The audit process

creates the opportunity to examine in detail the asset and put in

place a “property improvement plan”.

The property improvement planning process examines the

opportunities available for the asset and qualifies them against

economic, commercial and operational criteria to create a short list

for implementation. This process of continuous improvement is

monitored and reported internally on a quarterly and annual basis.

Summary policy 6

Benefits

The implementation of DTZ Investors RPI

strategy and the overall approach to ESG

has a number of benefits for our clients,

our tenants and our stakeholders. These

can be summarised as follows:

Effective management of risk

Driving greater portfolio performance through efficiency

Active management across our portfolio leading to reduced environmental impact

Reduced utility consumption across our assets and portfolio leading to reduced costs of occupation

Future proofing of buildings and assets

Enhanced levels of stakeholder engagement with occupiers, staff, communities and relevant industry bodies

Robust and effective approach towards property improvement planning

Annex ALegislation that is changing the way we must operate:

CRC The CRC Energy Efficiency Scheme is a mandatory reporting and pricing scheme to improve energy efficiency in large public and private organisations. CRC operates in phases. Phase 1 ran from April 2010 until the end of March 2014. We are now in phase 2 that runs from 1 April 2014 to 31 March 2019. Qualification for the scheme is based on electricity usage. Organisations which participate within the CRC are required to monitor their energy use, and report their energy supplies annually. Participants must purchase and surrender allowances for their emissions. The allowance price for 2015/16 is £16.10/tonne of CO2 and can be expected to rise over time. Qualifying organisations have to comply legally with the scheme or face financial and other penalties. More information is available on the Environment Agency CRC web pages. https://www.gov.uk/crc-energy-efficiency-scheme-qualification-and-registration

ESOS The ESOS Regulations 2014 were introduced to give effect to a European directive. The Energy Saving Opportunity Scheme (ESOS) is a mandatory energy assessment scheme that applies to large UK undertakings and their corporate groups. Organisations that qualify for ESOS must carry out ESOS assessments every 4 years with the first deadline for compliance on 5 December 2015. These assessments are audits of the energy used by their buildings, industrial processes and transport to identify cost-effective energy saving measures. There is no regulatory requirement for participants to implement the energy saving opportunities identified. This is for each organisation to determine themselves. The regulator may issue civil sanctions including financial penalties if an organisation does not meet the scheme’s obligations. More information is available on the Environment Agency’s web pages at https://www.gov.uk/government/publications/comply-with-the-energy-savings-opportunity-scheme-esos

MEES The regulations that introduce Minimum Energy Efficiency Standards (MEES) on the non domestic property sector in England & Wales satisfy the government’s obligation under the Energy Act 2011 that aims to reduce emissions of greenhouse gases and the demand for energy. The equivalent Scottish legislation, currently in production, will follow the same principles. Here’s a summary of the key dates and implications:

• Minimum energy efficiency standard for buildings will be set at an E EPC rating

• From 1st April 2018 it will apply to all new leases & also lease renewals

• From 1st April 2023 it will apply to all leases including where one is already present

• Exemptions are possible on certain criteria including diminution of value

• All exempted properties will require to be registered on a central DECC database

• Local authorities will be responsible for enforcement. There will be fixed penalties for non compliance ranging from £5,000 - £150,000.

The Heat Network (Metering and Billing) Regulations 2014

These regulations implement the requirements in the Energy Efficiency Directive (EED) with respect to the supply of distributed heat, cooling, and hot water. Article 9 of the legislation requires that final consumers of district heating, district cooling, and communal heating and hot water systems are provided with competitively priced individual meters where it is cost effective and technically feasible. Where individual meters are installed, final consumers should be provided with billing information that is accurate and based on actual consumption where it is cost effective and technically feasible to do so.

Those supplying and charging final customers for heating or cooling through a network must make a notification under regulation 3 to the regulator on or before 31 December 2015. The notification and assessment process will need to be completed at least once every 4 years.

7Summary policy

Key RPI policy procedures that help us remain compliant

CRCEnergy Efficiency Sceme

ESOSEnergy Saving

Oportunity Scheme

MEESMinimum Energy

Efficiency Standards

Heat Network Regulations

Quarterly environmental reporting covering supplies and use of energy across all our assets which provide the basis for calculating our portfolio’s carbon footprint

Property improvement plans and EPC+ programmes identify opprtunities for energy efficiency in existing assests. Detailed ESOS audits are carried out on key assets

CRC evidence retained as part of EMS procedures

Technical feasibility assessment carried out for qualifying properties

Programe of identification of relevant heat networks

EPC assessments for fit-outs and refurbishments at pre-aquisition stage

8 Summary policy

ESG targets and objectives have been established to encourage property improvement, asset performance and occupier & community engagement.

*The same portfolio since the baseline year.

Occupier and Community Engagement Objectives:

As we progress through our programme, we will review progress against targets on a quarterly & annual basis with the aim of achieving continual improvement in the environmental performance of our buildings and our approach to sustainability, occupier engagement and corporate governance.

Indicator Target/Objective

• Reduce landlord-controlled carbon emission intensity (by floor area) of the directly managed

portfolio by 40% by 2030 from a 2016 baseline

• Reduce electricity & gas usage of the directly managed standing portfolio* portfolio by 10% by 2021 from a 2016 baseline

• Reduce water consumption of the directly managed standing portfolio* by 10% by 2021 from a 2017

baseline

• Achieve a recycling rate of 70% by weight by 2020 across the directly managed portfolio where there is a landlord waste contract in place

• Achieve 100% diversion from landfill through primary disposal route by 2020 across the directly managed portfolio

• Identify opportunities to install on-site renewable and energy efficient technologies to support occupier demands

Annex B

Targets & Objectives

• Distribute DTZ Investors’ Fit-Out guides to occupiers and third party contractors to encourage

adoption of sustainable practices during fit-out, in-use operation and refurbishment

• Conduct annual occupier surveys with the aim of improving occupiers’ awareness of energy efficiency and occupational behaviour including health & wellbeing

• Roll-out programme of occupier and community engagement activities to raise awareness of ESG issues and encourage sharing of best practice

Summary policy 9

Environmental Performance Targets & Objectives

CO2

1: Scope 1 & 2 Emissions: Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2

emissions are indirect emissions from the generation of purchased energy.

2: Standing Portfolio: The same portfolio since the baseline year. If properties are sold, they will be removed from

tracking.

3: Like-for-Like: The same portfolio as the previous year and where data is available for the same period for both

years.

Please note: DTZ Investors 2018 performance may change due to the addition of updated consumption

figures due to billing in March – May -however impact is expected to be immaterial.

Annex C

Carbon Emission and Energy

Interim Performance Update

Updated March 2019

Summary policy 10

33% emissions decrease against

2016 baseline

Change in carbon emission intensity (scope 1 and 2)1 for the

landlord-controlled portfolio between 2016 and 2018 (kg/

CO2e/annum) against the target performance line of reducing

carbon emission intensity by 40% by 2030 from a 2016

baseline.

Changes in electricity and gas usage for landlord controlled

standing portfolio2 between 2016 and 2018 (kWh/year) against

the target performance line of reducing electricity and gas by

10% by 2021 from a 2016 baseline.

-9.3% consumption decrease against

2016 baseline

Annual change (%) in electricity and gas usage comparing like-for-

like3 portfolios for eight rolling quarters with gas adjusted for

season variation using heating degree days (HHD).

100 Properties 96 Properties Reduction in electricity usage 2 years running in the

like-for-like portfolios

We continue to monitor our environmental performance on a quarterly and annual basis. Where the following provides an update on our

carbon emissions and energy performance up to the end of December 2018.

CO2

Chris Cooper

Chief Executive, DTZ Investors

Direct Phone: +44 (0) 20 3349 0300

www.dtzinvestors.com

©Cushman & Wakefield D341 02/2018