SANDSTONE RESIDENTIAL REIT PLC

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to any matter referred to in this document or as to the action you should take, you are recommended to seek your own independent financial advice from your stockbroker, solicitor, accountant, bank manager or other independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) if you are in the United Kingdom or, if not, from another appropriately authorised financial adviser. If you have sold or otherwise transferred all of your ordinary shares of 1 penny each in Sandstone Residential REIT plc (the "Company") (the "Ordinary Shares") please send this document, together with the Form of Proxy, as soon as possible, to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for onward transmission to the purchaser or transferee. However, the distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe those restrictions. Any failure to comply with any of those restrictions may constitute a violation of the securities laws of any such jurisdiction.

SANDSTONE RESIDENTIAL REIT PLC

(Incorporated in Scotland with registered number SC701230 and registered as an investment company under section 833 of the Companies Act 2006) Notice of a General Meeting to authorise the Board to issue further Ordinary Shares on a non pre-emptive basis

Notice of the general meeting of the Company to be held on 28 April 2022 at 9.00 a.m. at the offices of the Company, 14 Coates Crescent, Edinburgh, Scotland EH3 7AF (the "General Meeting") is set out at the end of this document (the "Notice"). The action to be taken by Shareholders in respect of the General Meeting is set out on page 4 of this document. Whether or not you intend to be present at the General Meeting, you are requested to complete, sign and return the Form of Proxy for use in conjunction with the General Meeting which accompanies this document. To be valid for use at the General Meeting, the accompanying Form of Proxy must be completed and returned in accordance with the instructions printed thereon to the Registrars, Computershare Investor Services PLC at The Pavilions, Bridgwater Road, Bristol BS99 6ZY as soon as possible, but in any event so as to be received no later than 48 hours (excluding non-working days) before the time of the General Meeting.

LETTER FROM THE CHAIRMAN SANDSTONE RESIDENTIAL REIT PLC (Incorporated and registered in Scotland with registered number SC701230 and registered as an investment company under section 833 of the Companies Act 2006)

Notice of General Meeting

Introduction and background

The Company intends to launch the Offer for Subscription on or around the date of this document. Your Board is therefore requesting that Shareholders grant the Company authority to allow it to issue, on a non pre-emptive basis: (i) up to 60 million new Ordinary Shares (being approximately 3,350 per cent. of the issued share capital of the Company as at 20 April 2022) in connection with the Offer for Subscription, such authority to expire on 31 March 2023 (the "Proposed Authority"); and (ii) Ordinary Shares representing up to an aggregate nominal amount equal to 20 per cent. of the nominal value of the Company's issued Ordinary Shares immediately following Initial Admission, such authority to expire on the conclusion of the annual general meeting of the Company to be held in 2023 (the "Additional Authority"). The purpose of this document is therefore to convene a General Meeting at which the Proposed Authority and Additional Authority will be sought. The General Meeting will be held at 9.00 a.m. on 28 April 2022 at the offices of the Company, 14 Coates Crescent, Edinburgh, Scotland EH3 7AF.

Reasons for the request for the Proposed Authority

Your Board is seeking the Proposed Authority in order to allow the Company to raise further capital under the Offer for Subscription. In September 2021, your Board was granted, among other things, authority to allot up to 25 million Ordinary Shares at the Original Subscription Price in connection with the Original Offer for Subscription (the "Original Allotment Authority"). The Original Allotment Authority cannot be relied upon in connection with the Offer for Subscription and the additional allotment authority of up to 20 per cent. of the nominal value of the Company's issued share capital taken at the time of the Original Offer for Subscription is insufficient to enable the Company to allot the 60 million new Ordinary Shares it intends to allot under the Offer for Subscription. Your Board is therefore requesting that Shareholders grant the Proposed Authority in order to allow the Company to raise the desired amount of capital under the Offer for Subscription. Your Board is confident that the Investment Manager will be able to invest the proceeds of the Offer for Subscription in accordance with the Company’s investment policy as and when suitable opportunities arise. The resulting increase in the Company's assets under management will naturally reduce the Company's ongoing charges ratio and will provide the Investment Manager with the opportunity to invest in a wider range of assets. Furthermore, your Board considers this to be a key step towards its stated aim of achieving a listing of the Company on either the London Stock Exchange's Alternative Investment Market or the premium segment of the London Stock Exchanges' main market for listed securities in the foreseeable future. Your Board therefore believes that granting the Company the Proposed Authority so that it can allot up to 60 million new Ordinary Shares under the Offer for Subscription will benefit Shareholders as a whole.

Reasons for the request for the Additional Authority

Your Board is seeking the Additional Authority in order to provide the Company with the flexibility to issue further Ordinary Shares on a non pre-emptive basis following the Offer for Subscription. The Additional Authority also will ensure that the Company has the flexibility to take advantage of any additional investor interest in the event that the Offer for Subscription becomes fully subscribed. Ordinary Shares will only be allotted under the Additional Authority in the event that the Investment Manager has identified suitable investment opportunities and the allotment of such Ordinary Shares will enable the Company to increase its assets under management and facilitate the growth of the Company. Your Board therefore believes that granting the Company the Additional Authority will benefit Shareholders as a whole.

The General Meeting

You will find set out at the end of this document the Notice convening the General Meeting at which Shareholders will be asked to consider and, if thought fit, approve the resolutions required to permit the further issue of new Ordinary Shares on a non pre-emptive basis. The General Meeting is to be held at 9.00 a.m. on 28 April 2022 at the offices of the Company, 14 Coates Crescent, Edinburgh, Scotland EH3 7AF. The resolutions will, if passed, enable the Directors to issue further new Ordinary Shares: (i) up to an aggregate nominal amount of £600,000 (being 60 million Ordinary Shares) pursuant to the Offer for Subscription, which represents approximately 3,350 per cent. of the total Ordinary Share capital of the Company in issue as at 20 April 2022 (the latest practicable date prior to the publication of this document); and (ii) up to an aggregate nominal amount equal to 20 per cent. Of the nominal value of the issued Ordinary Shares immediately following Initial Admission, without first offering such Ordinary Shares to existing Shareholders pro rata to their existing shareholdings. Resolutions 1 and 2, which will be proposed as ordinary resolutions, seek authority to issue the new Ordinary Shares. Resolutions 3 and 4, which will be proposed as special resolutions, seek authority to disapply pre-emption rights in respect of such issues. All Shareholders are entitled to vote at the General Meeting. In accordance with the Articles, all Shareholders entitled to vote and present in person or by proxy at the General Meeting shall upon a show of hands have one vote and upon a poll shall have one vote in respect of every Ordinary Share held. We always welcome questions from our Shareholders and we would encourage Shareholders to submit any questions they have concerning the General Meeting or the proposed resolutions to the Board by email to REIT@sandstoneuk.com by 5.00 p.m. on 26 April 2022. Please put "Sandstone – General Meeting" in the subject heading of any email.

Action to be taken

Whether or not you propose to attend the General Meeting in person, you are requested to complete and return proxy appointments to the Registrar by completing and signing the Form of Proxy for use in relation to the General Meeting in accordance with the instructions printed thereon and returning by post, by courier or by hand. Proxy appointments must be received by the Company as soon as possible and, in any event, so as to arrive by no later than 48 hours (excluding non-working days) before the time of the General Meeting. To be valid, the proxy appointment should be completed in accordance with the instructions accompanying it and lodged with the Registrar by the relevant time. Appointment of a proxy will not prevent you from attending and voting in person at the General Meeting should you wish to do so.

Recommendation

The Board considers the passing of the resolutions to be proposed at the General Meeting to be in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of all resolutions. Mr Peter Grant, being the only Director who has a beneficial holding of Ordinary Shares, intends to vote in favour of the resolutions in respect of his beneficial holding (amounting to 1,000,001 Ordinary Shares, representing approximately 55.9 per cent. of the issued share capital of the Company as at 20 April 2022).

Yours faithfully,

Peter Grant Chairman

DEFINITIONS

Unless the context otherwise requires, the following words and expressions have the following meanings in this document: Admission

in respect of the Ordinary Shares, the admission of such Ordinary Shares to listing and trading on the Official List of The International Stock Exchange becoming effective in accordance with The International Stock Exchange Listing Rules Articles the articles of association of the Company, as amended from time to time

Board

the board of Directors or any duly constituted committee thereof

Companies Act Company

the Companies Act 2006, as amended from time to time Sandstone Residential REIT plc, a company incorporated in Scotland (registered number SC701230) whose registered office is at 14 Coates Crescent, Edinburgh, Scotland EH3 7AF

Directors Form of Proxy

the directors of the Company the form of proxy for use by Shareholders in respect of the General Meeting

General Meeting

the general meeting of the Company to be held at the offices of the Company, 14 Coates Crescent, Edinburgh, Scotland EH3 7AF on 28 April 2022 at 9.00 a.m.

Initial Admission

the first Admission of new Ordinary Shares issued pursuant to the Offer for Subscription to the Official List of The International Stock Exchange

Investment Manager

Sandstone Capital Ltd, a company incorporated in Scotland (registered number SC702871) whose registered office is at 14 Coates Crescent, Edinburgh, Scotland EH3 7AF

Listing Document

means the listing document in connection with the Offer for Subscription and Admission, to be executed on or around the date of this document

London Stock Exchange

London Stock Exchange plc

Notice or Notice of Meeting

the notice of the General Meeting as set out at the end of this document

Offer for Subscription

the offer for subscription of up to 60 million new Ordinary Shares in accordance with the Listing Document

Ordinary Shares

ordinary shares of shares of 1 penny each in the capital of the Company

Original Allotment Authority

the authority to allot up to 25 million Ordinary Shares at the Original Subscription Price in connection with the Original Offer for Subscription

Original Offer for Subscription

the offer for subscription of up to 25 million new Ordinary Shares in accordance with the listing document published by the Company on 23 September 2021, as amended on 10 November 2021

Original Subscription Price Registrar

£1.00 per Ordinary Share Computershare Investor Services PLC, a company incorporated in England & Wales (registered number 03498808) whose registered office is at The Pavilions, Bridgwater Road, Bristol BS13 8AE

REIT

a real estate investment trust, as defined in Part 12 of the Corporation Tax Act 2010

Shareholders

holders of Ordinary Shares in the Company

NOTICE OF GENERAL MEETING SANDSTONE RESIDENTIAL REIT PLC(Incorporated in England and Wales with registered number SC701230 and registered as an investment company under section 833 of the Companies Act 2006)

NOTICE IS HEREBY GIVEN that a general meeting of Sandstone Residential REIT plc (the"Company") will be held at 9.00 a.m. on 28 April 2022 at the offices of the Company, 14 Coates Crescent, Edinburgh, Scotland EH3 7AF to consider and, if thought fit, pass the following resolutions:

ORDINARY RESOLUTION

  1. THAT, in addition to all existing authority, the directors of the Company (the "Directors") be and are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the "Act") to exercise all powers of the Company to allot ordinary shares of 1 penny each in the capital of the Company (the "Ordinary Shares") and to grant rights to subscribe for or to convert any security into Ordinary Shares in the Company ("Rights") up to an aggregate nominal amount of £600,000 (being approximately 3,350 per cent. of the issued share capital of the Company as at 20 April 2022) in connection with the offer for subscription of up to 60 million Ordinary Shares and admission of such Ordinary Shares to the Official List of The International Stock Exchange, such authority to expire on 31 March 2023 (unlesspreviously renewed, varied or revoked) but so that this authority shall allow the Company to make, before the expiry of this authority, offers or agreements which would or might require shares to be allotted, or Rights to be granted, after such expiry and the Directors may allot Ordinary Shares, or grant Rights, in pursuance of such an offer or agreement as if the power conferred hereby had not expired.
  2. THAT, effective immediately after Initial Admission (being the first admission of ordinary shares of 1 penny each in the capital of the Company (the "Ordinary Shares") issued pursuant to the listing of 60 million Ordinary Shares on the Official List of The International Stock Exchange by means of an offer for subscription becoming effective) and in addition to the authority referred to in Resolution 1 above, the Directors be and are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the "Act") to exercise all the powers of the Company to allot Ordinary Shares and to grant rights to subscribe for or to convert any security into Ordinary Shares in the Company ("Rights") up to an aggregate nominal amount equal to 20 per cent. of the nominal value of the issued Ordinary Shares immediately following Initial Admission, such authority to expire on the conclusion of the annual general meeting of the Company to be held in 2023 (unless previously renewed, varied or revoked) but so that this authority shall allow the Company to make, before the expiry of this authority, offers or agreements which would or might require shares to be allotted, or Rights to be granted, after such expiry and the Directors may allot Ordinary Shares, or grant Rights, in pursuance of such an offer or agreement as if the power conferred hereby had not expired.
  3. THAT, in addition to all existing authority and subject to the passing of Resolution 1 above, the directors of the Company (the "Directors") be and are hereby empowered, pursuant to sections 570 and 573 of the Companies Act 2006 (the "Act"), to allot or make offers or agreements to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant to the authority given pursuant to Resolution 1 above as if section 561(1) of the Act did not apply to such allotment, provided that this power shall be limited to the allotment of equity securities for cash up to an aggregate nominal value equal to £600,000 (being approximately 3,350 per cent. of the issued share capital of the Company as at 20 April 2022) and provided further that this power shall (unless previously renewed, varied or revoked) expire on 31 March 2023 but so that this authority shall allow the Company to make, before the expiry of this authority, offers or agreements which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired.
  4. THAT, effective immediately after Initial Admission (being the first admission of ordinary shares of 1 penny each in the capital of the Company (the "Ordinary Shares") issued pursuant to the listing of 60 million Ordinary Shares on the Official List of The International Stock Exchange by means of an offer for subscription becoming effective)and in addition to the authority referred to in Resolution 3 above, the Directors be and are hereby generally empowered, pursuant to sections 570 and 573 of the Companies Act 2006 (the "Act") to allot or make offers or agreements to allot Ordinary Shares pursuant to the authority in Resolution 2 above and to sell Ordinary Shares from treasury for cash as if section 561(1) of the Act did not apply to any such allotment or sale, provided that this power shall be limited to the allotment of Ordinary Shares for cash up to an aggregate nominal value equal to 20 per cent. of the nominal value of the issued Ordinary Shares immediately following Initial Admission and provided further that this power shall (unless previously renewed, varied or revoked) expire on the conclusion of the annual general meeting of the Company to be held in 2023 but so that this authority shall allow the Company to make, before the expiry of this authority, offers or agreements which would or might require Ordinary Shares to be allotted or sold from treasury after such expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired.

Notes:

  1. A member is entitled to appoint a proxy or proxies to exercise all or any of their rights to attend, speak and vote on their behalf at the General Meeting. A proxy need not be a member of the Company. Completion and return of a proxy appointment will not preclude members from attending and voting at the General Meeting, if they wish
  2. To be valid, members must complete and return proxy appointments to the Registrar by completing and signing the Form of Proxy for use in relation to the General Meeting, in accordance with the instructions printed thereon and returning by post, by courier or by hand to be received by the Company no later than 48 hours (excluding non-working days) before the time of the General Meeting or any adjournment thereof.
  3. A member may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different Ordinary Shares. Members may not appoint more than one proxy to exercise rights attached to any one Ordinary Share. To appoint more than one proxy, please contact the Company's Registrars, Computershare Investor Services PLC on 0370 703 0 226 (from within the UK) or + 44 370 703 0 226 (from outside the UK).
  4. Only those members having their names entered on the Company’s share register not later than 6.00 p.m. on 26 April 2022 or, if the meeting is adjourned, 6.00 p.m. on the day which is two days (excluding non-working days) prior to the date of the adjourned meeting, shall be entitled to attend and vote at the meeting in respect of the number of Ordinary Shares registered in their name at that time. Changes to the entries on the Company’s share register after that time shall be disregarded in determining the rights of any member to attend, speak and vote at the General Meeting, notwithstanding any provision in any enactment, the articles of association of the Company or other instrument to the contrary.
  5. As at 20 April 2022 (being the last practicable date prior to the publication of the Notice) the Company’s issued share capital consists of 1,789,001 Ordinary Shares of 1 penny each (none of which is held in treasury) carrying one vote each at a general meeting of the Company and 50,000 redeemable preference shares of £1.00 which do not entitle their holders to vote at a general meeting of the Company. Therefore, the total voting rights in the Company as at 20 April 2022 are 1,789,001.
  6. The right to appoint a proxy does not apply to persons whose shares are held on their behalf by another person and who have been nominated to receive communications from the Company in accordance with Section 146 of the Companies Act 2006 (“Nominated Persons”). Nominated Persons may have a right under an agreement with the member who holds the Ordinary Shares on their behalf to be appointed (or to have someone else appointed) as a proxy. Alternatively, if nominated persons do not have such a right, or do not wish to exercise it, they may have a right under such an agreement to give instructions to the person holding the Ordinary Shares as to the exercise of voting rights. The statement of the rights of members in relation to the appointment of proxies in notes 1, 2 and 3 above does not apply to Nominated Persons. The rights described in these notes can only be exercised by members of the Company.
  7. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting.
  8. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.
  9. A copy of the Notice of the General Meeting and the information required by Section 311A of the Companies Act 2006 is included on the Company's website sandstoneuk

loading