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General
The value of an investment in the Trust may fluctuate. There is no guarantee nor can any assurance be given that the Trust will achieve a positive return, that any other strategic objectives of the Fund will be achieved, or that Unitholders will receive a return of all or any part of their investment. An investment in the Trust could result in a loss for an Investor of a part of, or the whole of, their investment.

Redemption: Risk of Significant Delay
As provided for under Redemption Process in section 8, redemptions will be satisfied as to an amount equal to up to 10% of Units in issue immediately prior to the relevant Redemption Dealing Date (or more, in the Trustee’s discretion) with deferred redemption requests being carried forward to be satisfied in priority to later requests. Prospective Investors should therefore be aware that if they make a redemption request, it is possible that prior unsatisfied redemptions will exist and may delay their redemption being satisfied until a number of Redemption Dealing Dates have elapsed. For example, a Unitholder holding 25% of Units who make a request to redeem all its Units could take up the full redemption capacity for the next two Redemption Dealing Dates and a significant amount of the capacity on the third Redemption Dealing Date to occur.

Investment in real estate assets
The Fund will be subject to the general risks incidental to the ownership of real property including changes in local property market, changes in interest rates; changes in property tax rates and landlord/tenant or planning laws; credit risks of tenants and borrowers; environmental factors; the quality and strategy of property and asset management; competition; and the availability and cost of debt financing.

Construction Defects
Investments held by the Fund may be subject to construction defects. Prior to acquisition the risk of construction defects cannot be entirely excluded, even though a careful technical inspection of the real estate asset will be carried out and, where appropriate, an expert assessment obtained.

Defects of legal title
Investments held by the Fund may have defects of legal title which may not, even after stringent due diligence, become evident at the time of acquisition. If an Investment is found subsequent to its acquisition to have a previously undetected defect of legal title, certain uses envisaged for such Investment may no longer be possible and/or the market value of such Investment may be affected.

Possible adverse economic conditions
The financial performance of the Fund may be adversely affected by general national and international economic conditions, by conditions within the real property market or by the particular financial condition of the parties doing business with the Fund. Changes in the rates of inflation and the cost of borrowing and tax changes may affect the income and capital value of an Investment and, further, the performance of the Fund may be adversely affected by the impact of global economic factors and factors such as natural disasters, terrorism, acts of war, and uninsurable losses may adversely affect the financial performance of the Fund.

Leverage
Assets held by the Fund, including the Investments, may have debt facilities (in the form of a loan) attached to them and as such corresponding security. Accordingly, in the event of a default of the loan (including, but not limited to, a breach of covenants), the loan may be accelerated and/or such security may be enforced by the lending bank leading to a material adverse impact on Investor returns. The loan, if a floating rate loan, will expose the relevant Sub-Partnership, and ultimately the Trust, to fluctuations in loan interest rates. Hedging arrangements may however be entered into which will effectively fix the interest rate applicable to the loan. Prospective Investors should note though that in this circumstance, if the loan is prepaid, there will be a requirement to reduce the notional amount of the interest rate swap accordingly and this may result in adverse hedging break costs to the Fund. In addition, there is the possibility that if the values of the Investments fall, the relevant Sub-Partnership’s capital repayment commitments may exceed the capital value of that Sub-Partnership’s assets. The ability to obtain debt financing quickly and on reasonable terms is important to the success of the Fund and such availability is uncertain.

Reliance on the Trustee and the Partnership Manager
The success of the Fund is substantially dependent on the ability of the Partnership Manager to asset manage and oversee the performance of each Investment and oversee any relevant disposal of the Investments. The loss of service of one or more of the key personnel or senior executives of the Partnership Manager could have an adverse impact on the Fund’s ability to realise its target performance, there being no guarantee that suitable replacements will be found.

Illiquid assets
Participation in the Trust will be a relatively illiquid investment for the following reasons:

• While redemptions are permitted pursuant to the terms of the Instrument, certain ‘gates’ may be applied and in certain circumstances the Trustee is empowered to suspend redemptions (please see Section 8 above);

• The generation of redemption proceeds may require Investments to be realised and property investments are relatively illiquid, particularly in times of economic downturn;

• Investors should not rely on there being an established market for the Units.

Difficulty of valuation of assets and interests in the Fund
Investments made by the Fund will consist of real property and real property is inherently difficult to value. The value of the real property concerned will generally be a matter of a valuer’s opinion which may fluctuate up or down and the amount derived on realisation of the real property may be less than the valuation given to the real property by an independent valuer.

Limited recourse and indemnities to Trustee, Trust Adviser etc.
The Instrument, the Partnership Agreement and the Partnership Management Agreement, the Administrator appointment agreement and the other documents constituting or relating to the Fund (for the purposes of this Section 10, “Fund Documents”) will limit the circumstances under which the Trustee, the Trust Adviser, the Partnership Manager, the Administrator, and other relevant service providers can be held liable to the Trust and/or the Master Partnership. As a result, Unitholders may have a more limited right of action in certain cases than they would in the absence of these provisions.

Subject to certain limitations in the Fund Documents, the Trustee, the Trust Adviser, the Partnership Manager, the Administrator, and other relevant service providers will be indemnified against claims, liabilities, costs, damages and expenses in respect of their activities on behalf of the Master Partnership and/or the Trust (as applicable). Accordingly certain actions brought against such parties may be satisfied from assets of the Fund.

Competition
The Investments in which the Fund will invest may compete directly with other properties within a specific local sub-market. Excess supply in these sub-markets may have considerable impact on rental values or capital values and have an adverse impact on the value of the Investments.

Prior performance and figures
Past or projected performance is not necessarily indicative of future results and there can be no assurance that the Fund will achieve comparable results.

Potential environmental and deleterious materials liability
Under UK laws, an owner of real estate may be liable for the costs of removal, remediation or management of certain hazardous, toxic or deleterious materials on, in or under real estate property or within the fabric of buildings on such property.

Insurance related risks
Insurance effected in respect of the Investments and other assets held by the Fund may prove to be insufficient to cover the full loss suffered.

Government regulation
Government authorities and bodies at all levels have considerable influence on the UK real estate market and therefore real estate investments and their value. Changes to existing regulations or the adoption of new regulations may have considerable impact on the expenses of maintaining, the income received, the rate of return from or the value of such real estate investments and so ultimately impact on the returns of the Fund.

Unavailability of FSMA protection
The protections offered by the UK Financial Services Compensation Scheme are not available for claims relating to an investment in the Trust.

Costs of operating real property investments
The cost of operating the Investments, including providing for capital improvements, may exceed the Investments’ rental income and the Fund may have to advance funds to protect an Investment or may be required to dispose of Investments on disadvantageous terms if necessary to raise required funds. Expenditure associated with real property investment such as property taxes, utility costs, debt service, maintenance costs and insurance, tend to increase and do not generally decrease in line with rental values.

Failing to acquire Investments
The purchase of any Investments is subject to finding suitable opportunities and then to the parties agreeing the terms of the sale contract and debt financing and formally exchanging and completing these documents.

The foregoing list of risk factors is not comprehensive and there may be other risks that relate to an Investment.