TIDMTRY
RNS Number : 3781U
TR Property Investment Trust PLC
23 November 2023
TR Property Investment Trust plc
London Stock Exchange Announcement
Unaudited results for the six months ended 30 September 2023
Legal Entity Identifier: 549300BPGCCN3ETPQD32
Information disclosed in accordance with Disclosure Guidance and
Transparency Rule 4.2.2
Kate Bolsover, Chairman:
"Generalist investors have avoided real estate over the last 18
months. This has given our managers the opportunity to select
carefully not only companies with the best underlying exposures but
also those with the most robust balance sheets. The sector M&A
activity we have benefited from is a testament to this strategy -
and may well be a portent of better times ahead."
Marcus Phayre-Mudge, Fund Manager:
"As we release this statement, cooling inflation is providing a
psychologically important boost for markets. Expectations that we
have reached 'peak rate' seem to be solidifying, following several
false dawns in the first half of 2023. Market cycles over the last
30 years have shown that when interest rates do peak, property
equities recover more sharply than the wider stock market."
Financial Highlights and Performance
30 September 31 March
2023 2023 Change
Balance Sheet
Net asset value per share 304.74p 305.13p -0.1%
Shareholders' funds (GBP'000) 967,098 968,346 -0.1%
Shares in issue at the end
of the period (m) 317.4 317.4 0.0%
Net debt (1,5) 12.5% 12.3%
Share Price
Share price 281.00p 279.00p +0.7%
Market capitalisation GBP892m GBP885m +0.8%
Revenue
Revenue earnings per share 7.31p 12.05p -39.3%
Interim dividend per share 5.65p 5.65p 0.0%
30 September 31 March
2023 2023
Performance Assets and Benchmark
Net asset value total return
(2,5) +3.3% -35.5%
Benchmark total return -0.8% -34.0%
Share price total return +4.5% -36.2%
Ongoing charges (4,5)
Including performance fee +1.36% +0.73%
Excluding performance fee +0.84% +0.73%
Excluding performance fee
and direct property costs +0.80% +0.67%
1. Net debt is the total value of loan notes, loans (including
notional exposure to contracts for differences ('CFDs') less cash
as a proportion of Net asset value ('NAV').
2. The net asset value total return is calculated by reinvesting
the dividends in the assets of the Company from the relevant
ex-dividend date. Dividends are deemed to be reinvested on the
ex-dividend date as this is the protocol used by the Company's
benchmark and other indices.
3. The share price total return is calculated by reinvesting the
dividends in the shares of the Company from the relevant
ex-dividend date.
4. Ongoing Charges are calculated in accordance with the AIC
methodology. The ratio for 30 September 2023 is based on forecast
expenses and charges for the year ending 31 March 2024.
5. Considered to be an Alternative Performance Measure as defined in the Half Year Report.
Chairman's Statement
This is my first Chairman's statement since I took on the role
from David Watson. His wisdom and insights have been valuable to us
all over the past years and I wanted to express my thanks as well
as those of the Board and management team for his leadership and
support. I am excited to be taking on the role of Chairman and look
forward to working with the Board and management team as we move
into the next few years of economic and social change.
Market backdrop
Macro-economic forces continue to dominate investor behaviour.
The trajectory of inflation and bond yields remains foremost in
investors' minds. The response of the US and European central banks
has clearly been dramatic over the last two years with a
record-breaking number of consecutive base rate increases in all
jurisdictions. The current interest rates are beginning to achieve
their objective of slowing consumption and economic activity. The
impact on asset prices, including real estate, has been marked.
Over the six months under review, the Company's net asset value
('NAV') total return was +3.3%, ahead of the benchmark's total
return of -0.8%. As the Manager's Report will expand on, the period
has been one of oscillating performance as sentiment waxed and
waned over the path of the interest rate cycle. Whilst property
market fundamentals have been so often drowned out by the
macro-economic overlay, your management team continue to focus on
well-run companies exposed to asset classes enjoying tenant demand.
These businesses must also have balance sheets which can withstand
interest rates remaining at current levels. In other words, they
are considering whether the debt held by these companies is of a
suitable duration and cost. The good news is that the vast majority
of our companies have made great strides to improve their debt
books over the last 18 months. Valuable lessons were learned in the
Global Financial Crisis ('GFC') and excessive leverage has (in the
main) been avoided in the listed sector in this cycle. Many
companies have been forced to take corrective action with dividend
reductions or suspensions, but we have not seen the wave of
defensive capital issuance to rebuild balance sheets that we saw in
2008.
Much more real estate is owned privately than publicly. Public
markets offer real time pricing and the opportunity to allow
sentiment to override substance. If public markets undervalue real
assets, then privatisations and consolidation will - quite
correctly - occur. The last six months has seen four important
examples of merger and acquisition ('M&A') activity in our
investment universe. The Company was heavily exposed to three of
them and the NAV received a significant uplift from all three. More
detail will be provided later in the Manager's report but suffice
to say these are important valuation underpins. We may well look
back and view them as portents of better times ahead.
Revenue Results, Dividend and Outlook
The interim earnings at 7.31p are some 39% lower than the prior
year interim earnings.
A fall in earnings was flagged in the last annual report.
Earnings in the year to March 2023 were flattered by some one-off
changes and also a significant number of shifts in companies'
dividend timetables. At the year-end we were also highlighting that
a number of German residential companies and Swedish companies had
announced dividend suspensions or cuts and the consequence for our
earnings in the following financial year. Increases in interest
rates have had a negative impact on our own revenue account and the
increase in the UK corporation tax charge has also increased the
revenue tax charge, although, our overall taxation charge (when
taking into account the capital account credit) remains low.
A number of companies were quick to suspend or reduce dividends
in the face of rising interest rates. It is still difficult to
predict whether interest rates have reached a peak and how high
they will stay and for how long. The property sector is highly
sensitive to interest rates at both income and capital levels. The
German residential sector is 14.6% of our benchmark, many of these
companies have suspended or substantially cut their dividends while
they reorganise their balance sheets, make sales to deleverage and
reposition their portfolios for a higher interest rate environment.
We expect them to resume distributions in due course but the
timetable is uncertain. In the meantime, our own income account
will reflect this reduced source of income.
Our Managers are mandated by the Board to meet the Company's
investment objective, which is to maximise Shareholders' total
return relative to the benchmark. They are asked to have an eye for
the income account, but the positioning of the portfolio is driven
primarily by the total return objective. There are times when it is
not possible to deliver progressive income whilst meeting that
total return objective. In light of the potential for leaner
periods of income, the Board has strategically built healthy
revenue reserves. Providing we are comfortable of achieving a
covered dividend in the longer term, we will be happy to supplement
dividend distributions from reserves.
The interim dividend has been maintained at 5.65p per share.
Net Debt and Currencies
Gearing appeared broadly unchanged over the period, moving from
12.3% to 12.5%. As usual, the starting and end points do not give
any insight into range over the period, increasing from the year
through to June to around 16.0% and reducing thereafter as
sentiment changed. At the time of writing the gearing remains
around 12.0%.
The cost of our own balance sheet debt continued to rise over
the period as the reference base rates increased. Margins are also
widening. It was decided not to renew one of our three revolving
credit facilities in November as we have sufficient gearing
capacity (in our loan notes, remaining facilities and contracts for
difference ('CFD') capability) without it.
Currencies were not especially volatile; sterling showed some
strengthening over the summer which had a detrimental impact on the
non-sterling income received over that period, however this petered
out to a large extent over September.
Discount and Share Repurchases
The Company's shares have traded at an average discount of just
over 8% over the period, moving from 8.6% at the end of March to
7.8% at the end of September. This is slightly wider than the
five-year average of 5.4%. There were no share repurchases during
the period.
Board changes
Following David Watson's retirement, we appointed Tim Gillbanks
as Senior Independent Director. Having been appointed to the Board
in January this year, and as part of our Board succession
planning,
Busola Sodeinde was appointed Chairman of the Audit Committee
with effect from 1 October 2023. We have now returned to a Board of
directors of five and do not anticipate any further changes in
the
near future.
Outlook
The current interest rate rising cycle has been underway since
mid-2022. Hindsight is a wonderful thing, and all market
participants can agree that central banks should have started
earlier with various forms of money supply tightening. However,
looking ahead and given the record-breaking speed and intensity of
the rate increases, the same commentators are confident that we are
closing in on 'peak rate'. The narrative now is very much about
whether rates remain here for the foreseeable future (our view) or
whether central banks will seek to bring them back down.
Given our Manager's central case, it is no surprise that we will
continue to focus on those market segments still experiencing
rental growth driven by supply/demand disequilibrium. The Manager's
report highlights the very wide range of forecasted returns across
the different property types and jurisdictions. However, generalist
investors have sought actively to avoid the asset class and much
has been discarded in the self-fulfilling price rout. This has
given us the opportunity to select carefully not only those
companies with the best underlying exposures but also those with
the most robust balance sheets.
This positioning has been taking place since the interest rate
cycle started 18 months ago. The M&A activity that has taken
place is testament to this strategy. Other investors are happy to
pay for assets (and debt structures) which we have identified as
attractive in the current economic environment. We suspect there
may well be more to come.
Kate Bolsover
Chairman
22 November 2023
Manager's report
Performance
The net asset value ('NAV') total return for the six months was
+3.3% and the share price total return as slightly better at +4.5%
whilst the benchmark, FTSE EPRA NAREIT Developed Europe TR (in
GBP), fell by -0.8%. Pan European real estate equities have
travelled in a tight (12%) trading range over the six months under
review with the chart resembling the path of a ping pong ball in a
horizontal tube. We remain in a market dominated by
macroeconomic
considerations. Quite simply, real estate pricing continues to
be determined by the shape of the interest rate curve and bond
market yields. Underlying real estate fundamentals are still being
drowned out by the change in expectations of interest costs. This
blanket approach by market participants will of course lead to
opportunities for patient investors who are focused on the slightly
longer term alongside the underlying demand/supply dynamics in each
asset class.
The previous six month period (September 2022 to March 2023) had
been a rollercoaster, with a +20% market rally followed by total
eradication of those gains. Market sentiment had got right behind
the 'peak rate' narrative which proved to be a false dawn. In
contrast, the last six months has been a calmer period as sentiment
oscillated around the core question of how well the central banks
were managing to get inflation under control. Importantly, equity
investors had, by the end of March, already driven most property
companies' share prices to record breaking discounts to net asset
values. As the chart shows, we effectively started the new
financial year close to the bottom of the six-month trading range
and the index ended the period less than 1% from where it
started.
The two clear periods of price recovery were April and July.
April's gain (the Company's NAV rose 7.8%) was in part driven by
the first (of three) crucial pieces of M&A activity which not
only assisted our returns but contributed to a wider improvement in
sentiment towards the asset class. Industrial REIT announced on 3rd
April that it had received a cash offer from Blackstone at a 40%
premium to the previous closing price. Importantly, this was also a
17% premium to the last published NAV. The Company was the largest
shareholder (11.2% of issued capital) and we have been long-term
supporters of the management team and their strategy. They had been
at the forefront of bringing multilet industrial property
management into the digital era. It is a textbook example of where
the value-adding skills are not priced correctly by the public
markets. The sale was bitter sweet, whilst the impact on the
Company's valuation was welcome, the loss of a well-run business
and with it the exposure to multi let industrial property will be
keenly felt.
No sooner had we seen the April improvement in sentiment, May
and June reversed the gains with the bear narrative building around
the stubbornness of inflation and all central banks committed to
further interest rate increases. The bifurcation of share price
performance between those companies most sensitive to short term
interest rate movements and the better placed grew even starker.
The most heavily leveraged names, those with multiple refinancings
in the near term were - correctly - abandoned by investors. SBB (in
Sweden) fell -75% over April and May, whilst Adler, a German
business with an equally indebted balance sheet fell over 48% in
the same period.
As if we needed any more proof that performance of our asset
class was dominated by macro considerations and the outlook for
interest rates, July saw better than expected inflation data, i.e.
evidence of slowing inflation. Our sector responded with a +9%
return in the month, giving the sector bears quite a headache. To
highlight the whipsawing in our space, mid-August saw a 9% fall in
10 days, followed by an 8% recovery into the end of the month. The
overused expression 'rollercoaster' did feel quite apt as sentiment
towards the likelihood of 'peak rate' being reached by each
respective central bank ebbed and flowed.
However, real estate fundamentals remain remarkably robust in
many of our sub-sectors and this theme is expanded on later in the
report. As highlighted, M&A activity was also a crucial feature
of the period. Alongside the sale of Industrial REIT to Blackstone,
we saw Realty Income, a $36bn market cap US REIT, acquire all of
Ediston Property's assets for cash. Ediston had switched from being
a diversified investor to one focused entirely on retail
warehousing. Alongside multi-let industrial and wider logistics
property we are very positive about value growth in this sector,
hence our exposure. We had steadily built the position and owned
over 16% of the company at the date of the announcement. This is a
classic example of European public market under valuation, with a
more highly rated US REIT able to take advantage. The case of CT
Property Trust ('CTPT', GBP200m market cap) was a little different
with LondonMetric using its more highly rated paper to acquire
CTPT. We owned 10% of CTPT and have been a longstanding investor in
LondonMetric so we were happy to support the deal which also saw a
25% gain in the CTPT share price on the announcement.
Reviewing our performance attribution, it is no surprise that
our exposure to these cases of M&A were all key contributors to
performance. Outside of these areas our overweight to European
shopping centres and our underweights to European healthcare and
Sweden were also important. I would also highlight our largest pair
trade which was to own Landsec but not British Land. The gulf in
performance between the two names has never been starker with the
difference over six months (in total return terms) of -13.8% (-1.6%
versus -15.4%). The major differentiation between these two large
diversified UK only businesses was their attitude to debt with
Landsec working hard to reduce leverage through selling long
income, mature, low yielding assets particularly London
offices.
The poorest decision was to remain overweight German residential
through our large holding in Phoenix Spree Deutschland. Fully let,
Berlin apartments are clearly an attractive long-term store of
value given the fundamental demand/supply disequilibrium. However,
the capitalisation multiples grew too large in the era of zero
interest rates and the correction in values has been dramatic. I
continue to believe that the stock market is now overly discounting
this value correction with the share price considerably less than
half of the last published asset value. Crucially, the Board has
announced that it is seeking to dispose of assets (and will accept
current market pricing) and return cash to shareholders following
required debt repayments.
Offices
The bifurcation between the 'best and the rest' has widened as
more evidence emerges of tenants prepared to pay up for the highest
quality space in the right locations. Working patterns have changed
with five days per week in the office a minority sport in large
cities with long commutes. The trade-off is straightforward, where
productivity and employee satisfaction is enhanced with an element
of remote working it will persist and become a permanent feature.
However, it is equally apparent that connectivity, collaboration
and engagement with customers is much easier/more effective when
carried out in person. The office is not dead.
The mantra is the quality of working environment (both the
building amenity and its environs) coupled with energy efficiency
and transport connectivity. The reality for landlords is the
difficult decision of where to focus the capital expenditure. For
many assets, the cost of the required refurbishment and energy
efficiency improvements will result in mediocre returns as current
asset values are not properly
factoring in this compulsory spend.
The immediate consequence of this structural hiatus has been a
dramatic adjustment in yields, which is ongoing. Prime yields
across Continental Europe (according to Cushman & Wakefield)
have moved out 100bps (3.9% to 4.9%) since March 2022 and that
widening is actually accelerating. Simultaneously, rental growth
has continued to be positive with best-in-class buildings setting
record
rents. London remains the market under the most pressure with
the lowest return to office statistics and the highest rents in
Europe. Savills estimate that City Office yields have moved from
4.5% to 5.25% since March, whilst West End yields have remained
broadly flat in the period reflecting the gulf in vacancy figures.
West End vacancy (as measured by CBRE) as at June was 3.8%, whilst
the City was 11.7%.
Derwent London have a neat way of exhibiting this gulf between
best and rest with a breakdown of the valuation movement in the six
months to June 2023. For their most valuable assets (valued at more
than GBP1,500 per ft) the capital movement was -1.3% and for their
least valuable (less than GBP1,000 per ft) it was -6.3%.
The outlook for this sector is tough. However, it is crucial
that investors appreciate that the listed office owners
collectively have much better quality portfolios than the wider
universe. Their assets are heavily concentrated in central business
district locations in the dominant cities as opposed to regional
markets. They are also much less geared and therefore able to
withstand the ongoing valuation correction. The property news is
dominated by stories of keys being returned to banks as highly
leveraged investors see the top slice of the capital stack (the
equity portion) being eradicated as values fall. Quite simply, if
you own office assets you must have low levels of gearing to
withstand the valuation corrections. The market concerns have
manifested themselves in the turnover data. According to CBRE's Q3
European Real Estate report, office investment was EUR8.1bn, down
63% year-on-year.
Retail
The difference in investor sentiment between office and retail
property can be summed up in the six months MSCI/IPD data. Capital
value falls ranged from Retail Warehouses -1.5% and Shopping
Centres -1.7% to Offices (Central London) -7.2% through to Regional
(outside SE) Offices of -10%. It really does feel that retail
property has reached a point of valuation stability with an
equilibrium of tenant affordability and demand. It has been a long
road, with the sector requiring at least 30% less retail space than
in 2010, coupled with a dramatic change in the size/number of
stores which each national or international retailer required.
Retail warehousing continues to be a relative winner with its
large car parks and edge of town locations coupled with minimal
service charge costs offering a cost-effective component of the
omni-channel sales process which all large retailers (except
Primark) now operate. We built our position in Ediston based on our
strong conviction towards this asset class. It is always
disappointing to see assets
leave the European listed sector through M&A but the exit
price vindicates our views.
Outlet malls help retailers to offload lines without damaging
full price offerings. Premium outlets such
as Bicester Village (partly owned by Hammerson) and Gunwharf
Quay (Landsec) have proved very resilient, offering shoppers a high
quality leisure and retail experience. Sales data has remained
robust and we have continued to have exposure.
Dominant Continental European shopping centres collectively
continue to sustain high levels of occupancy and modest positive
rental growth. We have maintained exposure primarily through
Klepierre and Eurocommercial.
Industrial and Logistics
Only the residential (PRS) and industrial sectors recorded
capital growth in the MSCI/IPD data for the period under review.
Rental growth remains positive, particularly in the South East.
Interestingly the stellar growth rate we have seen in the Greater
London area over the last few years has started to moderate.
General rental growth has continued despite weaker take-up and
rising vacancy levels in certain regional markets. The concept of
rising vacancy in the market leading sub-sector will of course make
the bulls nervous. Our view was that the supply/demand imbalance
which drove the extraordinary rates of rental growth would lead to
more speculative construction as developers were incentivised to
build out their landbanks. This supply response is underway but
demand appears persistent. Of the 33.7m sq ft available at the end
of Q3, 22.2m sq ft is immediately available and 11.5m sq ft is
under construction. We remain confident that vacancy levels will
peak well below levels seen in the GFC and that supply will be
absorbed without the market experiencing prolonged negative rental
growth such are the structural tailwinds in this asset class.
Looking across all of Europe, rents grew 10.9% over the last
year, slightly ahead of the 10.4% for the 12 months to Q1 2023. The
investment market has not been immune to the change in investor
appetite, yields for prime logistics assets had got too low (c.4%)
and the expansion back to closer to 5% has been painful. Investment
volumes totalled EUR6.3bn (Savills data),a decline of 54%
year-on-year and a third below the five year average. Even with
average prime yields at 5%, this is still lower than the European
pre-COVID average (5.4%, 2017-2019) and reflects the broad
consensus that this asset class will continue to deliver growth.
Whilst investment volumes were down hugely year-on-year, the 2023
quarter-on-quarter figures have been steadily improving as adjusted
clearing prices help investors feel more confident about market
pricing.
Residential
The shortage of private sector rental accommodation (PRS)
remains acute. In markets such as Germany, Sweden and Ireland where
rents are regulated and rental growth is restricted to
sub-inflation, there is limited incentive for private developers to
build. The result is a complex system of restricted and
unrestricted (open market) units where protected residents enjoy a
huge economic benefit over those queuing for months or years for a
flat because of the acute development shortage. In markets such as
the UK, where rents are unrestricted, there is a different issue.
The reduction in the availability of rental property owned by
'buy-to-let' landlords has been driven by the removal of tax
advantages and the increase in bureaucracy around tenant
protection. With house prices falling and mortgage costs rising,
there has been a further shift towards renting over buying as
potential owners defer purchases. Where this shortage is most
acute, such as London, rents have risen by as much as 20% in some
locations.
The poor share price performance of the large German residential
landlords has been a consequence of their over indebtedness rather
than their underlying portfolio performance where occupancy levels
have remained consistently high (94-95%) given the regulated (below
market) rent levels.
Alternatives
Once again PBSA (purpose built student accommodation) delivers
solid rental growth. There continues to be a growing appetite for
students to live in PBSA with an institutional landlord as opposed
to (generally) poorer quality private accommodation. Student
numbers continue to grow - both domestic and foreign - and this has
fuelled 7% rental growth guidance for this year from Unite (the
largest listed provider in Europe). As mentioned earlier, we
happily participated in their offensive capital raise in July.
Healthcare continues to be a poor performer. Senior living and
nursing accommodation operators continue to suffer margin pressure
as their biggest overhead (by far) is wages. Across all of Europe
we have seen the recapitalisation of operators and an increasing
number of failures. These operators need to be replaced and
landlords often need to be part of the incentive programme for a
new operator to take on an existing facility.
Debt and Equity Markets
Both debt and equity markets have remained very subdued in the
period. In the nine months to 30 September, just EUR3.3bn of debt
has been raised compared to EUR10.7bn in 2022 and EUR20.9bn in 2021
(EPRA data). The weighted-average coupon has risen from 2.1% (2022)
to 4.7% (2023). Whilst there has been little issuance of new debt,
there has been significant interest cost management with many
examples of companies buying swaps, caps and negotiating
extensions. Equity raisings have also remained subdued with just
EUR2.1bn raised up to the end of September. Post the half year, Big
Yellow Self Storage has added to the scoreboard with GBP109m raised
in October to fund its development pipeline.
Whilst these self-help exercises have been limited in scope,
M&A activity has been more fruitful for investment bankers and
each of those situations have been covered earlier in this report.
Given the very wide discounts of share prices to last published
asset values we expect further activity in the months to come.
Investment Activity - property shares
Turnover (purchases and sales divided by two) totalled GBP183m
in the period, slightly less than the GBP203m for the same period
last year which was a decade high. With the average net assets over
the period of GBP983m, turnover was 18.6%. versus 15% last year.
The increased percentage is partly explained by the impact of
M&A where whole positions were liquidated on a cash bid.
As highlighted in my opening comments, our investment universe
has moved in a tight (12%) trading range throughout the period as
sentiment rallied on hopes of 'peak rate' and then waned before
repeating the process. A classic case of a macro dominated market,
where we had already positioned the portfolio defensively and where
large scale portfolio repositioning was not warranted given the
market uncertainty coupled with volatility in such a tight trading
range.
When I compare our 10 largest overweights and underweights
(versus their respective positions in the
benchmark), i.e. our greatest convictions, I find that 15 out of
20 are the same names at each end of the reporting period. Amongst
the largest overweights, the only changes were due to Industrial
REIT and Ediston being taken private. However, beyond the largest
conviction calls there was considerably repositioning at the
sub-sector level where I adjusted a number of smaller positions
often within one market area. One area of particular focus was
Sweden where we had been heavily underweight given
the elevated debt levels amongst all those companies. By the end
of May the Swedish property companies had corrected -32% from their
early February peak. Initially, I bought back into Castellum
following its SEK10bn deeply discounted rights issue. This equity
raise stabilised the balance sheet and gave the company the
breathing space it needed. Alongside that name I also added to
Sagax (diversified with a focus on light industrial), Pandox
(hotels) and Catena (logistics).
I maintained our position in European shopping centre names
through Eurocommercial and Klepierre but also began to add to
Unibail which has made good progress in selling its poorer US
assets. Our UK retail exposure remained focused on retail
warehousing (through Ediston) but we do have some exposure through
Landsec where its premium outlets business continues to perform
well.
Industrial exposure dropped with the sale of Industrial REIT but
I continued to add to Argan, our preferred French logistics name.
It is an illiquid stock as the founding family own half the equity.
In March the stock enjoyed a liquidity event, gaining entry to the
FTSE EPRA NAREIT Europe Index and I sold 50% of the position. Since
then I have been slowly reacquiring the stock at 10-15% lower
prices.
Within the office sector, I continued to sell down in the
developer names (GPE, Derwent London and Helical). These are all
well run businesses with experienced management teams but their
ability to generate significant returns at this point in the
business cycle is heavily constrained. I have favoured portfolios
with higher earnings, lower levels of development exposure
(relative to the size of their portfolio) and those focused away
from the financial services dominated sub-markets such as the City,
Docklands and La Defense. Hence our rotation into Workspace
(flexible space) and additional investment in Gecina (prime Paris)
and maintaining our positions in Arima (Madrid). Elsewhere I have
sought exposure to smaller cities with high levels of 'return to
office' hence Sirius (German business space) and Wihlborgs
(Malmo).
In the alternative space, I reduced exposure to selfstorage
given the likely short term impact of the economic slowdown. Our
exposure to the sector continues to be solely through Safestore.
Student accommodation and Unite's figures continue to impress. The
stock has been a true stalwart through these difficult times and
one of the few to complete an offensive capital raise in July
(GBP296m), 8% of their market capitalisation. We have continued to
remain very underweight to healthcare where the subindexation
rental growth and lack of gains on development continue to hamper
returns.
Physical Property Portfolio
The physical property portfolio produced a total return over the
6 months of -2.1% made up of a capital fall of -4.1% and an income
return of 2.0%. This was a marginal underperformance of the MSCI
monthly index which produced a +1.1% total return made up of an
income return of 2.4% and a capital fall of -1.3%. Our industrial
asset values were flat on the period, whilst our food-dominated
retail parade at the Colonnades in Bayswater suffered from further
yield expansion in the supermarket sector.
Occupationally it was a quiet period however a great deal of
preparation has been going into the proposed refurbishment of our
industrial asset in Wandsworth. The aim is to carry out a phased
refurbishment of the estate and create best in class space,
attractive to a wide range of uses while providing the highest
standards of sustainability and tenant wellbeing available in the
market. Work will start in January 2024 and will be ready for
occupation in the spring.
Immediately post the half year end we completed a new lease at
our industrial estate in Gloucester. The tenant, who was due to
vacate the unit following a lease break, has won a new contract
significantly expanding their business. As a result we have
captured the reversionary potential of the unit, increasing the
passing rent by 21% and securing a new 8 year lease. This is
further evidence of the continuing resilience of small/medium sized
industrial units. They are a factor of production and we have only
seen marginal increases in supply over the past 10 years. This has
resulted in increases in demand driving a significant upward
pressure on rents. This is persisting in a number of locations,
like Gloucester, despite the macro-economic headwinds highlighted
previously.
Revenue and Revenue Outlook
The reduction in the current year earnings was fully anticipated
and flagged in the Annual Report. A small element of this fall can
be put down to timing differences with some dividends being paid in
March, just before the last year end, whereas they had previously
been paid in April and would have fallen into the current financial
year as they had done previously.
More importantly, as we went into the results season for the
German residential sector (15% of our benchmark), all those
companies were announcing dividend suspensions or material
reductions. With very secure earnings, low vacancy and structurally
undersupplied markets, the underlying assets in these companies saw
tremendous capital growth over the last decade resulting in lower
and lower yields. The impact of higher interest rates had a
dramatic impact on cashflow given the low yields and these
companies have acted quickly and judiciously, taking action to
reduce leverage through disposals and cash retention. Whilst they
are not distributing this has had a significant impact on our
income. Swedish companies also tend to be highly leveraged and we
have seen a similar pattern, albeit the cuts were not as
widespread. Sweden is just over 13% of our benchmark and although
we were underweight (relative to the benchmark exposure) it still
had an impact.
As the Chairman has highlighted, although we do aim for a
progressive income profile, the primary objective is to exceed the
performance of the benchmark on a total return basis. With dividend
cuts in such a significant part of our portfolio, our income
statement will be temporarily impacted. These companies will return
to the dividend list in due course but the timing is still hard to
predict and will vary from next year onwards.
Gearing and Debt
Our revolving loan facilities have interest rates linked to
SONIA (Sterling Overnight Index Average, the replacement for LIBOR
(London InterBank Offered Rate) published by the Bank of England on
a daily basis), so we have seen a marked increase in our interest
expense. The cost of our gearing through CFDs is also linked to
short term GBP and Euro rates. Our fixed term debt carries rates
below current market rates which helps our overall cost of debt.
Although the gearing is largely unchanged at the beginning and end
of the period, it has varied in between. The flexibility of our
revolving credit facilities means that we are able to repay and
redraw debt over short timescales. With material proceeds being
received over the period from corporate actions, we have been able
to reduce gearing rather than hold cash for significant periods and
redraw on the loans when investment opportunities have
occurred.
In addition to the base rate increases, we have seen widening
margins and in some cases commitment
fees. One of the revolving credit facilities was due for renewal
in November and we chose not to renew. We have sufficient gearing
ability elsewhere and this has reduced the overall non-utilisation
costs.
Even with the increased cost of debt, we feel that current
equity pricing offers us an investment opportunity and it is
therefore an appropriate time to utilise a larger proportion of our
gearing capacity.
Outlook
The volatility in share prices highlights the ongoing battle
between underlying property market fundamentals in our preferred
sectors (stable to improving) and the relentless debate about yield
curve trajectory and central bank behaviour. This 'whipsawing' has
continued post the half year, in fact volatility has increased with
the benchmark falling 9% through most of October only to then rally
by 13% by the end of the first week of November.
Such volatility encourages us to focus on the core qualities of
our companies safe in the belief that the
vast majority have protected themselves from the impact of
further short term increases in rates. We are also emboldened by
the firm belief that we are seeing an increasing range of data
points suggesting that the heightened rate environment is having
the (central banks') desired effects, i.e. slowing their respective
economies. We are clearly much nearer this cycle's 'peak rate' and
the repositioning by investors is beginning to be reflected in
share prices given where discounts have reached.
Public property companies are cautiously leveraged when compared
to many private equity-backed vehicles. The eradication of equity
in highly leveraged vehicles will provide investment opportunities
for conservatively run listed companies. The investment community
must learn to support opportunistic (and earnings accretive)
capital raises rather than wait for share prices to trade at
premiums before raising. The inherent issue with that traditional
approach is that listed vehicles are flush with capital far too
late in the cycle. Simultaneously we must all encourage
consolidation amongst the plethora of smaller companies. The
closure of many of the remaining open-ended, daily dealing PAIFs
(property authorised investment funds) reduces the alternatives for
private investors and the listed sector must grasp the opportunity.
There is clear demand for exposure to real estate in a liquid
structure through a closed-ended listed structure. However
liquidity comes with scale and we welcome further consolidation in
the sector.
Marcus Phayre-Mudge
Fund Manager
22 November 2023
Directors' Responsibility Statement in Respect of the Half Year
Report
Principal and emerging risks and uncertainties
The principal risks and uncertainties facing the Company have
not changed since the date of the Annual Report 2023 and continue
to be as set out in that report.
The principal risks and uncertainties facing the Company
include, but are not limited to, poor share price performance in
comparison to the underlying NAV; poor investment performance of
the portfolio relative to the benchmark; market risk; the Company
is unable to maintain dividend growth; accounting and operational
risks; financial risks; loss of Investment Trust Status; legal,
regulatory and reporting risks; inappropriate use of gearing and
personnel changes at Investment Manager. An explanation of these
risks and how they are managed are set out on pages 37 to 40 of the
Annual Report for the year ended 31 March 2023 (which can be found
on the Company's website www.trproperty.com).
Going concern
As stated in note 5 to the financial statements, the directors
are satisfied that the Group has sufficient resources to continue
in operation for a period of at least 12 months from the date of
this report. Accordingly, the going concern basis is adopted in
preparing the condensed financial statements.
Directors' responsibility statement
In accordance with Chapter 4 of the Disclosure Guidance and
Transparency Rules, the Directors confirm that to the best of their
knowledge:
-- the condensed set of financial statements has been prepared
in accordance with applicable UK Accounting Standards on a going
concern basis and gives a true and fair view of the assets,
liabilities, financial position and net return of the Company;
-- the half year report includes a fair review of the important
events that have occurred during the first six months of the
financial year and their impact on the financial statements;
-- the statement of Principal and Emerging Risks and
Uncertainties is a fair review of the principal and emerging risks
and uncertainties for the remainder of the financial year; and
-- the half year report includes a fair review of the related
party transactions that have taken place in the first six months of
the financial year.
On behalf of the Board
Kate Bolsover
Chairman
22 November 2023
Distribution of Investments
30 Sep 30 Sep 30 Sep 30 Sep
2023 2023 2022 2022
GBP'000 % GBP'000 %
UK Securities(1)
---------- -------- ---------- --------
* quoted 327,804 34.1 385,876 40.5
---------- -------- ---------- --------
UK investment Properties 71,560 7.5 73,957 7.7
---------- -------- ---------- --------
UK Total 399,364 41.6 459,833 48.2
---------- -------- ---------- --------
Continental Europe Securities
---------- -------- ---------- --------
* quoted 565,520 58.8 488,839 51.3
---------- -------- ---------- --------
Investments held at fair value 964,884 100.4 948,672 99.5
---------- -------- ---------- --------
* CFD (creditor)/debtor(2) (3,509) (0.4) 4,662 0.5
---------- -------- ---------- --------
Total Investment Positions 961,375 100.0 953,334 100.0
---------- -------- ---------- --------
Investment Exposure
30 Sep 30 Sep 30 Sep 30 Sep
2023 2023 2022 2022
GBP'000 % GBP'000 %
UK Securities
----------- -------- ---------- --------
* quoted 327,804 30.2 385,876 35.7
----------- -------- ---------- --------
* CFD exposure(3) 52,339 4.8 75,963 7.0
----------- -------- ---------- --------
UK investment Properties 71,560 6.6 73,957 7.0
----------- -------- ---------- --------
UK Total 451,703 41.6 535,796 49.7
----------- -------- ---------- --------
Continental Europe Securities
----------- -------- ---------- --------
* quoted 565,520 52.1 488,839 45.2
----------- -------- ---------- --------
* CFD exposure(3) 68,586 6.3 54,943 5.1
----------- -------- ---------- --------
Total Investment Exposure(4) 1,0885,809 100.0 1,079,578 100.0
----------- -------- ---------- --------
Portfolio Summary
30 Sep 31 Mar 31 Mar 31 Mar 31 Mar
2023 2023 2022 2021 2020
Total investments GBP965m GBP949m GBP1,555m GBP1,401m GBP1,155m
-------- -------- ---------- ---------- ----------
Net assets GBP967m GBP968m GBP1,563m GBP1,326m GBP1,136m
-------- -------- ---------- ---------- ----------
UK quoted property shares 34% 41% 33% 28% 31%
-------- -------- ---------- ---------- ----------
Overseas quoted property
shares 59% 51% 60% 66% 61%
-------- -------- ---------- ---------- ----------
Direct property (externally
valued) 7% 8% 6% 6% 8%
-------- -------- ---------- ---------- ----------
Net Currency Exposures
30 Sep 30 Sep 31 Mar 31 Mar
2023 2023 2023 2023
Company Benchmark Company Benchmark
% % % %
GBP 33.0 33.1 33.6 35.1
--------- ----------- --------- -----------
EUR 44.0 43.0 42.3 41.3
--------- ----------- --------- -----------
CHF 10.0 10.2 9.9 9.5
--------- ----------- --------- -----------
SEK 12.7 13.3 13.8 13.8
--------- ----------- --------- -----------
NOK 0.3 0.4 0.4 0.3
--------- ----------- --------- -----------
1. UK securities includes one unlisted holding 0.03% (31 March 2023 0.03%).
2. Net unrealised (loss)/gain on CFD contracts held as balance sheet (creditor)/debtor.
3. Gross value of CFD positions.
4. Total investments illustrating market exposure including the
gross value of CFD positions.
Investment portfolio by country ( Companies shown by country of
listing )
Financial statements
Group statement of comprehensive income
The Total column of this statement represents the Group's
Statement of Comprehensive Income, prepared in accordance with
UK-adopted international accounting standards. The Revenue Return
and Capital Return columns are supplementary to this and are
prepared under guidance published by the Association of Investment
Companies. All items in the above statement derive from continuing
operations.
The Group does not have any other income or expense that is not
included in the above statement therefore "Total comprehensive
income" is also the profit for the period.
All income is attributable to the shareholders of the parent
company.
The final dividend of 9.85p (2022: 9.20p) in respect of the year
ended 31 March 2023 was declared on 2 June 2023 and was paid on 1
August 2023. This can be found in the Group Statement of changes in
Equity for the half year ended 30 September 2023.
The interim dividend of 5.65p (2022: 5.65p) in respect of the
year ending 31 March 2024 was declared on 23 November 2023 and will
be paid on 11 January 2024 to Shareholders on the register on 15
December 2023. The
shares will be quoted ex-dividend on 14 December 2023.
Group statement of changes in equity
Group balance sheet
Group cash flow statement
Notes to the financial statements
1 Basis of accounting
The accounting policies applied in these interim financial
statements are consistent with those applied in the Company's most
recent annual financial statements. The financial statements have
been prepared on a going concern basis and in accordance with
International Accounting Standard (IAS) 34 'Interim Financial
Reporting'.
The financial statements have also been prepared in accordance
with the Statement of Recommended Practice (SORP), "Financial
Statements of Investment Trust Companies and Venture Capital
Trusts", to the extent that it is consistent with UK-adopted
International Accounting Standards.
In assessing Going Concern the Board has made a detailed
assessment of the ability of the Company and the Group to meet its
liabilities as they fall due, including stress and liquidity tests
which considered the effects of substantial falls in investment
valuations, revenues received and market liquidity as the global
economy continues to suffer disruption due to inflationary
pressures, the war in Ukraine and the outbreak of conflict in
Israel and Gaza.
The financial statements are presented in sterling and all
values are rounded to the nearest thousand pounds (GBP'000) except
where otherwise indicated.
In accordance with IFRS 10 the Company has been designated as an
investment entity on the basis that:
-- It obtains funds from investors and provides those investors
with investment management services;
-- It commits to its investors that its business purpose is to
invest solely for returns from capital appreciation and investment
income; and
-- It measures and evaluates performance of substantially all of
its investments on a fair value basis.
Each of the subsidiaries of the Company was established for the
sole purpose of operating or supporting the investment operations
of the Company (including raising additional financing) and is not
itself an investment entity. UK-adopted IAS, IFRS 10 sets out that
in the case of controlled entities that support the investment
activity of the investment entity, those entities should be
consolidated rather than presented as investments at fair value.
Accordingly, the Company has consolidated the results and financial
positions of those subsidiaries.
Subsidiaries are consolidated from the date of their
acquisition, being the date on which the Company obtains control,
and continue to be consolidated until the date that such control
ceases. The financial statements of subsidiaries used in the
preparation of the consolidated financial statements are based on
consistent accounting policies. All intra-group balances and
transactions, including unrealised profits arising therefrom, are
eliminated. This is consistent with the presentation in previous
periods.
All the subsidiaries of the Company have been consolidated in
these financial statements.
The accounting policies adopted are consistent with those of the
previous consolidated annual financial statements.
The standards issued before the reporting date that become
effective after 30 September 2023 are not expected to have a
material effect on equity or profit for the subsequent period. The
Group has not early adopted any new UK-adopted International
Accounting Standards or Interpretation. Standards, amendments and
interpretations issued but not yet effective up to the date of
issuance of the Group's financial statements are listed below:
-- IAS 1 Amendments - Classification of Liabilities as Current
or Non-Current (effective date 1 January 2024). The amendments
specify the requirements for classifying liabilities as current or
non-current. The amendments are not expected to have a material
impact on the Group's financial statements.
-- IAS 1 Amendments - Non-current Liabilities with Covenants
(effective date 1 January 2024). The amendments improved the
information an entity provides when its right to defer settlement
of a liability for at least twelve months is subject to compliance
with covenants. The amendments also responded to stakeholders'
concerns about the classification of such a liability as current or
non-current.
2 Management fees
Half year ended Half year ended Year ended
30 September 2023 30 September 2022 31 March 2023
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
Management
fee 745 2,233 2,978 824 2,473 3,297 1,560 4,680 6,240
Performance
fee - 5,101 5,101 - - - - - -
------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
745 7,334 8,079 824 2,473 3,297 1,560 4,680 6,240
------------- --------- --------- --------- --------- --------- --------- --------- --------- ---------
A provision has been made for a performance fee based on the net
assets at 30 September 2023 (30 September 2022 - nil, 31 March 2023
- nil). Any payment is not due until the full year performance fee
is calculated at 31 March 2024.
The management fee is a fixed fee of GBP4,090,000 plus an ad
valorem fee of 0.20% per annum based on the net asset value (30
September 2022 GBP3,895,000, 31 March 2023 GBP3,895,000).
3 Earnings per ordinary share
The earnings per Ordinary share can be analysed between revenue
and capital, as below.
Half year Half year Year ended
ended ended 31 March
30 September 30 September 2023
2023 2022
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
----------------------------- -------------- -------------- --------------
Net revenue profit 23,215 38,226 54,637
Net capital profit/(loss) 6,796 (558,242) (601,903)
----------------------------- -------------- -------------- --------------
Net total profit/(loss) 30,011 (520,016) (547,266)
----------------------------- -------------- -------------- --------------
Weighted average number or
shares in issue during the
period 317,350,980 317,350,980 317,350,980
----------------------------- -------------- -------------- --------------
pence pence Pence
------------------------------ ------ --------- ---------
Revenue earnings per share 7.31 12.05 17.22
Capital earnings per share 2.14 (175.91) (189.67)
------------------------------ ------ --------- ---------
Earnings/(loss) per Ordinary
share 9.45 (163.86) (172.45)
------------------------------ ------ --------- ---------
The Group has no securities in issue that could dilute the
return per Ordinary share. Therefore, the basic and diluted return
per Ordinary share are the same.
4 Changes in share capital
During the half year and since 30 September 2023 no Ordinary
shares have been purchased and cancelled.
As at 30 September 2023 there were 317,350,980 Ordinary shares
(30 September 2022: 317,350,980; 31 March 2023: 317,350,980
Ordinary shares) of 25p in issue.
5 Going concern
The Directors believe that it is appropriate to continue to
adopt the going concern basis in preparing the financial
statements. The assets of the Company consist mainly of securities
that are readily realisable and, accordingly, they believe that the
Company has adequate financial resources to meet its liabilities as
and when they fall due and continue in operational existence for a
period of at least 12 months from the date of approval of this Half
Year Report.
6 Fair value of financial assets and financial liabilities
Financial assets and financial liabilities are carried in the
Balance Sheet either at their fair value (investments) or the
balance sheet amount is a reasonable approximation of fair value
(due from brokers, dividends and interest receivable, due to
brokers, accruals and cash at bank).
Fair value hierarchy disclosures
The table below sets out fair value measurements using
UK-adopted IAS (IFRS 13) fair value hierarchy.
Financial assets/(liabilities) at fair value through profit or
loss
Level Level Level Total
At 30 September 2023 1 2 3 GBP'000
GBP'000 GBP'000 GBP'000
------------------------------------ --------- --------- --------- ---------
Equity investments 890,751 - 2,573 893,324
Investment properties - - 71,560 71,560
Contracts for difference - (3,509) - (3,509)
Foreign exchange forward contracts - 38 - 38
------------------------------------ --------- --------- --------- ---------
890,751 (3,471) 74,133 961,413
------------------------------------ --------- --------- --------- ---------
Level Level Level Total
At 30 September 2022 1 2 3 GBP'000
GBP'000 GBP'000 GBP'000
------------------------------------ --------- --------- --------- ---------
Equity investments 899,514 - 2,573 902,087
Investment properties - - 83,653 83,653
Contracts for difference - (13,658) - (13,658)
Foreign exchange forward contracts - 442 - 442
------------------------------------ --------- --------- --------- ---------
899,514 (13,216) 86,226 972,524
------------------------------------ --------- --------- --------- ---------
Level Level Level Total
At 31 March 2023 1 2 3 GBP'000
GBP'000 GBP'000 GBP'000
------------------------------------ --------- --------- --------- ---------
Equity investments 861,611 10,531 2,573 874,715
Investment properties - - 73,957 73,957
Contracts for difference - 4,662 - 4,662
Foreign exchange forward contracts - (386) - (386)
------------------------------------ --------- --------- --------- ---------
861,611 (13,216) 76,530 952,948
------------------------------------ --------- --------- --------- ---------
Categorisation within the hierarchy has been determined on the
basis of the lowest level input that is significant to the fair
value measurement of the relevant asset as follows:
Level 1 - valued using quoted prices in an active market for
identical assets.
Level 2 - valued by reference to valuation techniques using
observable inputs other than quoted prices within level 1.
Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market data.
Contracts for Difference are synthetic equities and are valued
by reference to the investments' underlying market values.
Valuations of Investment Properties - Level 3
The Group carries its investment properties at fair value in
accordance with IFRS 13, revalued twice a year, with changes in
fair values being recognised in the Group Statement of
Comprehensive Income. The Group engaged Knight Frank LLP as
independent valuation specialists to determine fair value as at 30
September 2023. Determination of the fair value of investment
properties has been prepared on the basis define by the RICS
Valuation - Global Standards (The Red Book Global Standards) as
follows:
"The estimated amount for which a property should exchange on
the date of valuation between a willing buyer and a willing seller
in an arm's length transaction after proper marketing wherein the
parties had each acted knowledgeably, prudently and without
compulsion."
The valuation takes into account future cash flow from assets
(such as lettings, tenants' profile, future revenue streams,
capital values of fixtures and fittings plant and machinery, any
environmental matters and the overall repair and condition of the
property) and discount rates applicable to those assets. These
assumptions are based on local market conditions existing at the
balance sheet date.
In arriving at their estimates of fair values as at 30 September
2023, the valuers have used their market knowledge and professional
judgement and have not only relied solely on historical
transactional comparables.
Reconciliation of movements in financial assets categorised as
level 3
31 March Appreciation/ 30 September
2023 Purchases Sales (Depreciation) 2023
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ --------- ------------ ---------- ---------------- -------------
Unlisted equity investments 2,573 - - - 2,573
------------------------------ --------- ------------ ---------- ---------------- -------------
Investment properties
* Mixed use 36,625 533 - (2,945) 34,213
* Office & Industrial 37,332 42 - (27) 37,347
------------------------------ --------- ------------ ---------- ---------------- -------------
73,957 575 - (2,972) 71,560
------------------------------ --------- ------------ ---------- ---------------- -------------
76,530 575 - (2,972) 74,133
------------------------------ --------- ------------ ---------- ---------------- -------------
Transfers between hierarchy levels
There were no transfers during the year between any of the
levels.
Sensitivity information
The significant unobservable inputs used in the fair value
measurement categorised within Level 3 of the fair value hierarchy
of investment properties are:
-- Estimated rental value: GBP7.5 - GBP65 per sq ft
-- Capitalisation rates: 2.0% - 6.0%
Significant increases (decreases) in estimated rental value and
rent growth in isolation would result in a significantly higher
(lower) fair value measurement. A significant increase (decrease)
in capitalisation rates in isolation would result in a
significantly lower (higher) fair value measurement.
Loan Notes
On the 10 February 2016, the Company issued 1.92% Unsecured Euro
50,000,000 Loan Notes and 3.59% Unsecured GBP 15,000,000 Loan Notes
which are due to be redeemed at par on the 10 February 2026 and 10
February 2031 respectively.
The fair value of the 1.92% Euro Loan Notes as at 30 September
2023 was GBP43,419,000 (30 September 2022: GBP43,930,000; 31 March
2023: GBP43,979,000)
The fair value of the 3.59% GBP Loan Notes as at 30 September
2023 was GBP14,116,000 (30 September 2022: GBP14,084,000; 31 March
2023: GBP14,338,000).
Using the UK-adopted IAS (IFRS 13) fair value hierarchy the Loan
Notes are deemed to be categorised within Level 2.
The loan notes agreement requires compliance with a set of
financial covenants, including:
-- total borrowings shall not exceed 33% of Adjusted Net Asset Value;
-- the Adjusted Total Assets shall at all times be equivalent to
a minimum of 300% of Total Borrowings; and
-- the Adjusted NAV shall not be less than GBP260,000,000.
The Company and Group complied with the terms of the loan notes
agreement throughout the year.
Multi-currency revolving loan facilities
The Group also has unsecured, multi-currency, revolving
short-term loan facilities totalling GBP130,000,000 (30 September
2022: GBP130,000,000; 31 March 2023: GBP130,000,000). At 30
September 2023, GBP10,000,000 was drawn on these facilities (30
September 2022: GBP25,000,000; 31 March 2023: GBP10,000,000). The
fair value is considered to approximate the carrying value and the
interest is paid at a margin over SONIA.
7 Retained earnings
30 September 30 September 31 March
2023 2022 2023
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
--------------------------- ------------- ------------- ----------
Investment holding gains (87,314) (121,128) (99,771)
Realised capital reserves 823,198 893,877 828,859
--------------------------- ------------- ------------- ----------
735,884 772,749 729,088
Revenue reserve 64,743 74,307 72,787
--------------------------- ------------- ------------- ----------
800,627 847,056 801,875
--------------------------- ------------- ------------- ----------
8 Related party transactions
There have been no material related party transactions during
the period and no changes to related parties.
During the period Thames River Capital charged management fees
as detailed in Note 2.
The remuneration of the Directors has been determined in
accordance with rates outlined in the Directors' Remuneration
Report in the Annual Financial Statements.
9 Comparative information
The financial information contained in this Half-Year Report
does not constitute statutory accounts as defined in section 435(1)
of the Companies Act 2006. The financial information for the half
year periods ended 30 September 2023 and 30 September 2022 has not
been audited or reviewed by the Group auditors. The figures and
financial information for the year ended 31 March 2023 are an
extract from the latest published financial statements and do not
constitute statutory financial statements for that year. Those
financial statements have been delivered to the Registrar of
Companies and include the report of the auditors, which was
unqualified and did not contain a statement under either section
498(2) or 498(3) of the Companies Act 2006.
By order of the Board
Columbia Threadneedle Investment Business Limited
Company Secretary,
22 November 2023
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
ENDS
A copy of the Half Year Report will be submitted to the National
Storage Mechanism and will shortly be available for inspection at
data.fca.org.uk/#/nsm/nationalstoragemechanism.
The Half Year Report will also be available shortly on the
Company's website at www.trproperty.com where up to date
information on the Company, including daily NAV and share prices,
factsheets and portfolio information can also be found.
For further information please contact:
Marcus Phayre-Mudge
Fund Manager, TR Property Investment Trust plc
020 7011 4711
Mark Young
Stifel
020 7710 7633
Tom Scrivens
Panmure Gordon (UK) Limited
020 7886 2648
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IR NKBBDOBDDQDB
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