RNS Number : 9609Z

TR Property Investment Trust PLC

27 May 2021

This announcement and the information contained herein is not for publication, distribution or release in, or into, directly or indirectly, the United States, Canada, Australia or Japan.


Unaudited preliminary results for the year ended 31 March 2021

26 May 2021

TR Property Investment Trust plc, announces its full year results for the year ended 31 March 2021 (unaudited).

Financial Highlights and Performance        Year ended 
                                              31 March      Year ended 
                                                  2021        31 March         % 
                                           (unaudited)            2020    Change 
---------------------------------------  -------------  --------------  -------- 
Balance Sheet 
Net asset value per share                      417.97p         358.11p    +16.7% 
Shareholders' funds (GBP'000)                1,326,433       1,136,453    +16.7% 
Shares in issue at the end of the year 
 (m)                                             317.4           317.4     +0.0% 
Net debt(1,6)                                    16.5%            7.6% 
Share Price 
Share price                                    392.50p         317.50p    +23.6% 
Market capitalisation                        GBP1,246m       GBP1,008m    +23.6% 
                                              Year ended  Year ended        % 
                                                31 March    31 March   Change 
                                        2021 (unaudited)        2020 
-------------------------------------  -----------------  ----------  ------- 
Revenue earnings per share                        12.25p      14.62p   -16.2% 
Interim dividend per share                         5.20p       5.20p    +0.0% 
Final dividend per share                           9.00p       8.80p    +2.3% 
Total dividend per share                          14.20p      14.00p    +1.4% 
Performance: Assets and Benchmark 
Net Asset Value total return (3,6)                +20.7%      -11.5% 
Benchmark total return(6)                         +15.9%      -14.0% 
Share price total return(4,6)                     +28.3%      -16.8% 
Ongoing Charges(5,6) 
Including performance fee                         +1,40%      +0.80% 
Excluding performance fee                         +0.65%      +0.61% 
Excluding performance fee and direct 
 property costs                                   +0.63%      +0.59% 

1. Net debt is the total value of loan notes, loans (including notional exposure to CFDs and Total Return Swap) less cash as a proportion of net asset value.

2. Dividends per share are the dividends in respect of the financial year ended 31 March 2021. An interim dividend of 5.20p was paid in January 2021. A final dividend of 9.00p (2020: 8.80p) will be paid on 4 August 2021 to shareholders on the register on 18 June 2021.

The shares will be quoted ex-dividend on 17 June 2021.

3. The NAV Total Return for the year 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.

4. The Share Price Total Return is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date.

5. Ongoing Charges are calculated in accordance with the AIC methodology. The Ongoing Charges ratios provided in the Company's Key Information Document are calculated in line with the PRIIPs regulation which is different to the AIC methodology.

6. Considered to be an Alternative Performance Measure as defined in the full report and accounts.

Chairman's Statement


The start of this reporting period was very close to the recent COVID-19 influenced nadir of global equity markets in March 2020. Since then equity markets have been determinedly focused on the future rather than reflecting on the more immediate economic data and human tragedy of the pandemic. As a result, I'm able to report healthy returns for the year with our net asset value ("NAV") total return of 20.7%, well ahead of the benchmark total return of 15.9%. The share price total return was even stronger at 28.3% as the discount narrowed over the year.

Stock markets have taken great comfort from the huge amount of central bank stimulus and state aid for both

corporates and individuals. Since November 2020, this sense of support has been augmented by optimism following the announcements and subsequent rollout of a range of vaccine programmes.

The crisis has forced a dramatic change in the way we work, consume and relax. Over the last year our management team has pondered not only the pace of these changes across a wide range of property sectors but also their sustainability once the world reverts to "the new normal".

Over the last quarter of the financial year under review and into the start of the new one, we have seen very dramatic share price movements as investors rotated from companies offering the safety of secure income towards those offering greater risk, particularly where the companies were trading at large discounts to their asset value. Your manager's report will examine in more detail how the portfolio structure has evolved through these thematic rotations.

Revenue Results and Dividend

Earnings for the year were 12.25p per share, 16% lower than the prior year earnings of 14.62p.

The headline earnings per share figure is slightly deceptive, earnings before tax were 24% lower than the previous year, but a significant tax refund and some further prior period withholding tax recoveries reduced the revenue tax charge from an effective rate of 11.3% in 2020 to just 1.9% for the financial year to March 2021. Further details of this are set out in the Manager's Report.

The Board has announced a final dividend of 9.00p per share, bringing the full year dividend to 14.20p per share (2020: 14.00p) an overall increase of 1.4% on the prior year dividend. The Board is conscious of the income aspirations of some of our investor base and, although this dividend is not fully covered, the Company has significant revenue reserves available. As long as the Board has a reasonable expectation of income returning to previous levels in the medium term, the Board is happy to maintain a modest level of dividend progression.

Revenue Outlook

Within our portfolio, the manager anticipates income for the year to March 2022 to be split into three broadly equal parts with one third suffering a reduction and in some cases significant cuts or even suspensions, a third with income returning to pre-pandemic levels, and the balance offering some level of increase. We do not expect total income levels to return to pre-COVID-19 levels within the current financial year although we do expect an improvement relative to 2020/21.

After allowing for the proposed dividend, revenue reserves will still amount to 12.18p per share giving plenty of capacity for the board to supplement the dividend again in 2021/22, providing a return to pre-Covid levels can reasonably be anticipated in the medium term.

Net Debt and Currencies

Gearing at the end of the year stood at 16.5% having started the year at 7.6%. Gearing fluctuated considerably throughout the year, ranging between around 7.6% and 17.8%, as market sentiment ebbed and flowed. This demonstrates the benefit of the flexibility of our borrowing structure, with a base level supported by our fixed longer-term debt and the majority achieved through the revolving credit facilities and exposure through contracts for difference ("CFDs").

Sterling reached a low against the Euro in September 2020 driven by fears of a no deal Brexit and remained relatively weak until January 2021. As the new year arrived and despite issues with bureaucracy for goods flowing between the UK and Europe, Brexit issues took a back seat in investors' minds as they focused on the route to normalisation across the UK and Europe as the vaccine programmes rolled out. The UK is clearly ahead of the curve in this respect and Sterling strengthened steadily towards our year end in March 2021.

Our policy is to maintain a hedged currency exposure in line with the benchmark. Sterling represents around 27% of the benchmark, therefore strengthening Sterling is a headwind to the NAV.

Income is unhedged and around 66% of our income is received in currencies other than Sterling, therefore stronger Sterling reduces our income. Slightly more income is received in the first half of the year than the second, so for the current year more was received in a period when Sterling was weaker.

Discount and Share Repurchases

The prior year end fell only two weeks after the market lows following the announcement of the global COVID-19 pandemic and the shares started the new financial year at a discount of 11.3%. The discount then moved around between 5% and 15% as market sentiment changed through the roller coaster ride of lockdowns, easings and vaccine news. The average over the year was 10.2% but closed at 6.1%. This closing of the discount over the year meant that the share price return of 28.3% was well ahead of the NAV return.

No share buy-backs were made in the period, although the discount was wide at various points during the year. Many of our underlying stocks were also trading on wide discounts and our manager focused our capital on those opportunities.

The Board

I am grateful to my Board colleagues and to the team at TR for their support and commitment this year. We have met in person whenever the law and common sense allowed and "virtually" when necessary. Though small, I believe the Board has an excellent balance and spread of skills and experience appropriate for the Trust's objectives. With two relatively new members, and a change in Chair, I have been keen to allow us all time to settle into our roles. Even so, I am conscious of the term of our SID, Simon Marrison whose independence, skills and commitment are exemplary. He brings a unique contribution with his continental property investment expertise that is highly valued by us all and that will be hard to replace. Equally we always enjoy and benefit from the introduction of a fresh and enquiring mind so we will start the process of looking for his replacement later this year to allow an orderly succession.

Environmental, Social and Governance Factors ('ESG')

This year we have added more information on our responsible investment approach. For many years we have maintained a strong position in terms of voting and engagement supported by our significant stakes in a number of property companies. Our size in this specialist area of the equity market has helped ensure that our views are heard. This engagement has been augmented by the strength of BMO's Corporate Governance team and their broader engagement record. We fully intend to keep up and heighten pressure on our investee companies to enhance their standards of governance and we will be increasing our expectations on both the provision of data and on the Social and Environmental outcomes that they deliver. Any long term support for management will require companies to exhibit positive momentum across relevant measures.


The Trust was the winner in the Specialist Equities category of the Citywire Investment Trust Awards. This is particularly pleasing as we were in competition with Trusts specialising in a broad range of equities and alternatives.


The pandemic has had a dramatic impact on the world and on all aspects of real estate. In some instances this was an acceleration of trends that were well underway such as the structural shift to omnichannel retailing. For others, such as increased remote working, it has been a very fast gestation period of an embryonic trend. Airport hotel occupancy and business travel will likely suffer a long-term negative shift as companies embrace not only a new generation of communication tools but also their environmental credentials. The main common feature across these examples is the difficulty in predicting the scale and permanency of this evolution. What will be 'the new normal' for these asset classes is the challenge for our management team as we look forward to the post pandemic world. What we can be sure about is that the economic backdrop is a world with hugely elevated levels of government debt, ongoing central bank / governmental stimulus packages and higher levels of domestic savings. All at a time when fixed income yields are at historically low levels and much long duration sovereign debt offers negative yields to redemption.

Real estate offers a substantial margin over fixed income with the opportunity to reflect any economic recovery through rental growth. As a real asset it also has some inflation proofing credentials. However, as the last fifteen months has reminded us, sentiment can often override fundamentals in liquid equity markets and our managers will continue to focus on the assessment of earnings sustainability and medium term growth potential.

David Watson


26 May 2021

Manager's Report


The Net Asset Value total return for the year to 31 March 2021 was 20.7%, ahead of the benchmark total return of 15.9%. At the interim stage, I reported that Continental European property companies had significantly outperformed their UK counterparts (returns of 11.3% v 2.1%). The second half saw the complete reverse. The UK's performance in the second half was so strong that the 12 month performance of 19.1% (in GBP) outperformed Continental Europe at 18.7% (in EUR).

The initial impact of the pandemic on European real estate equities saw the benchmark fall 36% from the pre-Covid peak of 19th February to the trough on 18 March 2020. Our financial year therefore started close to these depressed levels and the steady recovery since then is reflected in the healthy figures for the year under review. However it is worth noting that collectively the sector remains nearly 15% below the pre-Covid peak.

This extraordinary year has clearly been like no other and the gulf in performance of the different real estate sectors (and their respective listed companies) requires the same adjective. The year can be neatly divided into pre and post the vaccine announcement.

From March to October investors focused on owning sustainable, pandemic proof income such as residential, supermarkets and healthcare alongside logistics, warehousing and industrial where the underlying tenants' businesses had remained open and in many cases were thriving. Consumer facing sectors such as retail, restaurants, hotel and leisure were shunned. We divide our universe of pan European real estate companies into 26 bespoke groups and over the 7 months from the trough on 18th March 2020 our logistics / industrial group returned +54% , German residential +60%, healthcare +36% whilst UK retail fell 45% and European retail returned just 1%. London retail also suffered falling 26% as tourism levels (both domestic and international) collapsed.

However, from November onwards we saw a complete volte face as investors focused on the possibility of a normalising economic outlook post the vaccine breakthrough. In our world that meant buying back into the consumer facing sectors. Stocks exposed to these sectors had been standing at large discounts given the market's expectation of further asset value declines and they enjoyed significant price recovery. Stocks such as Hammerson and Shaftesbury, who had both carried out emergency capital raises (more on this later), enjoyed 100% and 85% price appreciation from their respective (pre-vaccine announcement) capital raise prices.

The Trust was defensively positioned as we entered the pandemic with overweights to European PRS (private rented sector) particularly in Germany, supermarkets (UK and Nordics), healthcare (mainly UK) and logistics / industrial across both the UK and Europe. These exposures drove much of the relative outperformance from March to November.

London exposed stocks suffered particularly as office workers have not returned (we estimate office utilisation rates at c25% versus a Continental average of over 50%) and this combined with the collapse in tourism (both domestic and international) has temporarily hollowed out our global city. Our UK office exposure was concentrated in decentralised offices through CLS and McKay whilst we avoided London retail focused names such as Capco and Shaftesbury as well as those businesses with short occupational leases such as Workspace.

As the 'relief / reopening / reflation' trade gathered momentum, I closed our underweight exposure to European shopping centres, bought back into some Central London retail and renewed our exposure to office markets particularly those cities with the shorter commute times. Essentially I was still shying away from the largest two conurbations (London and Paris) whilst adding to smaller ones such as Madrid and Dublin and maintaining exposure to decentralised office sectors in the UK, Sweden and Germany.

The pandemic has turned much 'on its head' and in our corner of the equity market it was the performance of Swiss property companies which was much weaker than history would have predicted. Traditionally a safe haven, these stocks did not initially recover from the March lows with investors focused on the problematic retail exposure of the largest listed companies. We continue to be underweight the group.

Another positive surprise has been in self-storage which reported very steady numbers through the worst of the year. Whilst our stock selection in the UK was correct (Safestore total return +27% versus Big Yellow +14%), the runaway success was Shurguard, the Continental player r eturning +48%, which we didn't own. In our defence, the stock enjoyed strong demand from index trackers as it entered various benchmarks midyear.

Most of 2020 was an understandably subdued period for M&A corporate activity with one particular exception, Norwegian offices. Entra (where we were a top 20 shareholder) was the subject of a bidding war between two Swedish listed players, Castellum and Samhallsbyggnadsbolaget (also known as SBB). Whilst neither successfully gained control, the share price total return was 57%, our most successful investment in the period.

The portfolio has some gearing. This was reduced in February and March 2020 but has subsequently returned to pre-pandemic levels. Why have gearing in volatile times? The Trust continues to take advantage of its closed ended structure and holds a number of illiquid small cap stocks. These well-run companies (even when exposed to outperforming subsectors) often suffer from limited investor attention, being deemed too small. As a consequence, in rising markets they often underperform their larger brethren (in market parlance their 'beta' is less than one). Adding some gearing helps compensate for these lower beta names. Our experience is that over time the underlying property fundamentals will be recognised and, if not, then the market will take them private or merge them together. Our physical property exposure also sits outside our benchmark and additional gearing ensures that we are not underexposed to equities versus our benchmark given that a proportion of capital is invested in physical property.


Of all the segments of the commercial real estate landscape, the future demand for offices remains the hardest to forecast. The two undeniable consequences of the pandemic, for this asset class, has been the realisation that employees of corporates of all sizes can work remotely (for long periods) if required and secondly that the next generation of 'best in class' office accommodation will be utilised very differently with tenants having new priorities. Built into these demands will be the overarching need for energy efficiency, carbon neutrality and sustainability through the life cycle of the building.

The take up figures for the last year (across the 15 major cities we monitor) offers little comparative value given the inability for businesses to physically relocate in many of these markets from March 2020. Taking London as a case in point, Savills reported that West End take up fell from 4.4m sq ft in 2019 to 1.7m in 2020. Office utilisation rates through 2020 and into 2021 have varied hugely. A broad rule of thumb was that the larger the city (and the longer the average commute time) the lower the office utilisation rate. Generally the smaller cities also had higher levels of commuting by private transport or where workers were using overground public transport. Scandinavian and Swiss cities have seen almost normalised utilisation rates whilst London and Paris remain sub 30%. Looking forward, what is important to us is the amount of new space which was scheduled to complete (construction was halted for very short periods in most markets) and whether there are signs of demand as we move into the post vaccine period.

Looking across Europe as a whole, the combined effect of reduced leasing activity and construction completions led to 100bps increase in vacancy to an average of 6.9% (BNP data). This single statistic clearly hides a wide range of levels. Unsurprisingly, London and Paris have experienced the greatest increases from 5% to nearly 8% but Dublin collects the wooden spoon with vacancy increasing to over 9%. This is a good example of a small market where a (temporary) demand strike meets a number of large completions and refurbishments. However the historically low levels of vacancy in many cities prior to the pandemic have insulated most markets, with modest downward movements in prime rents recorded across the German Big 6, Milan, Madrid, Oslo, Amsterdam and Stockholm.

The delivery of new office buildings has also been deferred, particularly for tall buildings. The New London Architecture's Annual Tall Buildings Survey recorded a 27% decline in planning applications for buildings over 20 storeys in 2020 when compared with 2019. We were surprised that the fall wasn't larger but 73% of all applications were in the latter part of the year and hints at developer confidence regarding demand for new build.

Investment demand has remained very resilient almost regardless of short-term weakness in occupational markets. The weight of capital seeking real assets is a theme which will recur through this report. The rise in the long end of the curve as the reflation theme gathers momentum is proving very damaging for fixed income structures. High quality offices - offering large lot sizes - with secure income delivering 3.5-4% net yield is attractive versus negative yielding sovereign bonds. Further up the risk curve, opportunistic capital also remains very active and listed development specialists such as Great Portland Estates and Derwent London have found it hard to deploy capital amidst fierce competition.

The 2021 CBRE EMEA Investor Intentions Survey highlights London as still the most attractive city for investment in Europe with an estimated EUR40-45bn of global equity looking to be deployed into the market across all types of buildings. This is the highest figure since the survey starting tracking demand in 2012. Whilst transaction volumes slowed last year, the first two months of 2021 (traditionally a quiet time) have seen volumes reach GBP875m greater than the same period in 2019. Part of the London attraction is that yields didn't compress during the Brexit uncertainty making the city look much cheaper than other big European cities. Post the EU-UK Trade and Cooperation Agreement we expect this gap to narrow.


The MSCI / IPD data for the 12 months to March 2021 saw all retail property capital values fall 12.8% with a serious acceleration in the decline of shopping centre values which fell 25.5% over the last 12 months. In the interims, I commented that we felt the valuation community were behind the times due to their requirement to look at deal evidence. Essentially, in fast moving markets the published figures will already be out of date. Stock markets know this and retail landlords across the globe have been trading at very large discounts to their (no longer valid) last published figures.

The woes of retail are well understood. The pandemic has accelerated trends which were well established. Reopening of economies will see footfall return to shopping centres but the levels of sustainable rents remain the subject of market forces. In the UK the loss of a huge number of well known brands either through bankruptcy or retreat has resulted in average vacancy levels in shopping centres reaching over 15% (MSCI data).

This means the negotiation boot remains firmly on the tenants' foot and we predict a further 15% falls in rental values. The one area where there are clear signs of price stabilisation is in retail warehousing. Open air with plenty of free parking, this type of retail asset sits well in an omni-channel environment where retailer margins are maximised through click and collect. Affordability is the eternal watchword and whilst there are some parks with very high rents (often fashion retailer led) the majority will see modest declines in rental values. Occupancy cost ratios are also not burdened by escalating service charges.

Across Europe, the picture is more nuanced. Valuers are even more conservative than their UK counterparts and capitalisation rates are yet to move materially. In some countries, retailers have been given huge amounts of government support and as a result rental delinquency is generally lower than in the UK. In addition, many shopping centres are anchored by hypermarkets (which have remained open) and not department stores (a UK/ US concept no longer fit for purpose beyond a handful of tourist destinations such as Selfridges and Galeries Lafayette). There have been lower levels of retailer bankruptcy across Continental Europe and we put this down to two factors: less overrenting and the UK insolvency legislation. On this latter point, a huge number of UK retailers have taken advantage of the CVA (company voluntary administration) to force landlords (generally a large creditor) to accept corporate reconstructions which unduly damage their interests. A recent High Court ruling involving the overly indebted retailer New Look, reinforced this tenant friendly legislation.

Investors remain very circumspect towards this asset class. Income insecurity has resulted in investors requiring much higher initial yields. CBRE estimate that UK prime shopping centre yields have moved from 4.5% to 7% in the last 5 years with poorer secondary schemes in the high teens or literally unsaleable. Retail warehousing has bucked the depressing trend at least from an investor perspective. Investors are increasingly confident that they are able to measure tenant affordability and this is the key to determining pricing. In the last couple of months we have seen competitive bidding for a number of retail warehouse schemes, something not seen since 2018.


UK industrial and logistics take up hit a record 59.7m sq ft in 2020. Whilst the pandemic suppressed demand in many other parts of the property market, it clearly stimulated logistics and business activity which utilised industrial property. Amazon again accounted for a sizeable (20%) portion of the activity and it was this XL segment (250,000 + sq ft) which was the major beneficiary of the surging online demand. The online share of retail sales rose from 19.2% in 2019 to 27.9% in 2020 hitting a new high of 36.3% in January 2021 as we returned to lockdown. This will scale back as we reopen but the boost to online scale and efficiency is here to stay. Supply has responded but has been more than matched by this demand. As a consequence, supply has fallen to 73.4m sq ft, down 6% on the year, and this tightening has occurred in every size bracket.

Rental growth continues to march on but there has been a broadening of growth rates across the regions. Greater London and the East Midlands recorded growth of over 7% whilst average rates across the country at 3.9%. Such strong rental growth, the secure income and the positive outlook has driven both domestic and international buyers to pay record prices for this sector whether it is last mile urban units, XL big boxes or terraces of well located industrial units. Prime yields are 3.5 to 4% and even short income is not deterring investors as evidenced by the sale of our Bristol distribution unit at 4.5% initial yield with 3.5 years unexpired.

The same picture of rude health is evident across Continental Europe. According to BNP, take up increased 14% across the 6 largest European economies and vacancy rates dropped to 5.5%, their lowest and all against a backdrop of a sharp contraction in GDP. Again it was a surge in e-commerce and home delivery which drove demand. Prime yields across Europe tightened 25bps in 2020, matching the UK with no signs of decompression even as the long end of the curve rises. Investment demand is truly global with US and Asian institutional capital competing with more domestic long term capital all determined to participate in this structural shift.


As expected the sector has remained highly resilient during the pandemic. The majority of our investments are in German and Swedish housing where rents are subject to state control. The remaining exposure is Finland and the UK where rents are open-market. The former offer greater security with rents tied to indexation whilst the latter offers more opportunity to capture market growth but with the commensurate risk if vacancy rises and market rents fall. During the crisis, the security of income and very high occupancy levels resulted in the sector retaining its popularity. German housing has experienced price rises in virtually all its sub-markets.

As explained earlier, Berlin remained the outlier as the State of Berlin imposed a 5-year rent freeze (Mietendeckel). The subsequent Constitutional Court ruling, which confirmed that rent controls are determined at the Federal, not State level, came just after the year end in mid-April. We are pleased with this outcome and the share prices of both Deutsche Wohnen (4.4% of net assets) and Phoenix Spree (2.5% of net assets) responded positively. New construction of apartments in Berlin had all but dried up as developers awaited the outcome of the appeal. Berlin remains the cheapest capital city in Western Europe in which to rent an apartment (if you can find one). The desire of a left-wing local authority to keep it that way regardless of the side effect of shutting out new migrants through the consequential collapse in the supply of new homes has been suitably rebuffed.


This group encompasses sectors that have thrived (supermarkets, healthcare, self-storage) in the crisis and those which have not (student accommodation, hotels).

Share price performance was an amplified reflection of not only the underlying property performance but also the dramatic shift in investor sentiment. Self storage share prices have traditionally performed poorly in slowing economic conditions as the income is considered short term and volatile. However the pandemic has focused investors' minds on the emerging strength of this sector where a small group of operators (mostly listed companies) have the financial muscle to dominate the price comparison websites. Another emerging trend has been the increasing business usage of a product traditionally seen as the domain of private customers. Businesses have seen the merits of immediate, hassle free access to short or longer term storage. The supply chain disruption during the pandemic heightened the need for space as the mantra became 'a little more just in case and a little less just in time'. Our self storage group returned +46% from the low point (18th March 2020) to the end of October. However, from November 2020 to the end of March 2021 they have collectively returned just +4.1%. A classic example of a switch in sentiment as investors rotated away from the 'Covid relative winners' group into the value names which had underperformed and looked very cheap on historic metrics.

In another 'alternatives' sub-sector we experienced the complete reverse. Student accommodation businesses suffered a collapse in income and Unite (our only exposure) led the field in refunding rents which was the correct PR strategy but depleted their top line. The well documented difficulties for students through the last two academic years and the complete inability for many overseas students to enroll physically impacted investor sentiment with the sub-sector falling 46% between 19th February and 18th March 2020 and then staging a weak recovery of just +17% from then to the end of October. Whilst this performance compares poorly with self storage, since the beginning of November the sub-sector has rallied 30% as the likelihood of the reopening of tertiary education improved.

Supermarkets have continued to attract investor attention. Our exposure is through Supermarket Income REIT (UK) and Cibus (Sweden and Finland). Supermarket Income REIT raised a total of GBP490m in three separate transactions through the year and now has a market cap of over GBP900m. Cibus also raised capital (SEK 900m) in two tranches to make further acquisitions. The larger supermarket operators have been able to attract customers through their online network which the hard discounters (Lidl, Aldi) are not able to offer. Volumes and margins will normalise post the pandemic but these operators have had the opportunity to prove the resilience of their omni-channel model which utilises last mile distribution from their network of stores. It is one of the few parts of the retail landscape where physical stores are truly integral to the online journey.


Property companies remained busy on debt refinancings throughout the pandemic and the huge amount of central bank support and government stimulus ensured a healthy, liquid market where pricing did not weaken. According to EPRA, EUR15.2bn was raised in 2019 at an average coupon of 1.8% and 2020 saw EUR15.6bn at a cost of 1.6%. These figures are not directly comparable as the mix of debt offerings in each period was different but they are a clear indicator as to the health and price stability in the debt markets. German residential companies were again busy with Vonovia raising EUR2.5bn in four transactions borrowing 10-year money at 1%. Later in October, Gecina, Europe's largest office REIT raised EUR200m in a 2034 term bond at 0.86%.

Early in the crisis, we saw a number of strong businesses trading at premiums raise equity capital for opportunistic expansion. This was in sectors with clear underlying demand, namely healthcare (Assura, Aedifica, Primary Health Properties), self-storage (Big Yellow), logistics/ industrial (LondonMetric, Segro, VGP ), supermarkets (Supermarket Income REIT, Cibus) and German residential (Vonovia, ADO Properties, LEG). The Autumn saw opportunistic raises in Sweden and Norway (Balder, Klovern and Norwegian Properties) a region which had experienced low levels of lockdown restrictions. More recently in February and March this year we saw renewed activity in the UK, as the vaccine rollout improved sentiment, with raises from Target Healthcare, LXI, Tritax Eurobox and Supermarket Income REIT again. Continental European raises in 2021 have so far been confined to healthcare (Cofinimmo) and student accommodation (Xior).

Post the summer we saw the beginning of an expected surge of more defensive raises as companies finally came under cashflow and valuation pressure. In the end it was just a handful of retail focused names who had been mismanaging their balance sheets long before the pandemic. Hammerson's GBP600m raise effectively recapitalised the balance sheet with a 24 for 1 rights issue accompanied by the (previously announced) departure of the CEO completing the overdue C-suite shuffle of Chair, CEO and CFO. In late October, Shaftesbury announced a GBP300m placing and open offer. Looking back their timing was spectacularly unfortunate as the announcement of the first vaccines came less than a fortnight later.

These game changing announcements immediately altered expectations and there is nowhere better to illustrate the point than the corporate saga at Unibail-Rodamco-Westfield (URW). URW had announced a EUR9bn 'Reset' plan comprising EUR3.5bn capital raise, dividend cancellation and a planned EUR4bn of disposals. A group of activist shareholders lead by Leon Bressler (the CEO of Unibail from 1992 to 2006) launched a campaign to oppose these AGM proposals and launch an alternative strategy which did not include a deeply discounted capital raise. They proposed the sale of the US (ex Westfield) portfolio and a return to their roots as an owner of prime European shopping centres. Their timing was fortunate, with the 10th November AGM coming just after the vaccine announcement and the improvement in investor sentiment even for deeply indebted businesses. Essentially convincing investors that they didn't need to put 'good money after bad' and that the self help strategy would succeed. They were successful in their campaign and shareholders voted against the 'Reset' plan. This led to the departure of the Chairman, CEO and CFO and the promotion of existing senior managers to the Board. The share price, which had troughed at EUR35 per share, subsequently doubled amidst the closing of short positions. This corporate tale neatly encapsulates the dramatic change in investor sentiment (and pricing of previously unloved businesses) which we saw from November onwards.


Turnover (purchases and sales divided by two) totalled GBP468m equating to 36% of the average net assets over the period. This was broadly in line with last year's equivalent figure (32%) which itself was well ahead of the year to March 2019 (20%). It has therefore been two years of elevated portfolio rotation due to market volatility.

The rapid reduction in leverage in February and March 2020 was followed by a swift reinvestment in the portfolio which occurred in April and May as share prices recovered from their March lows and this reinvestment was boosted by our participation in the majority of the large number of offensive capital raises as described earlier.

Whilst a number of sought after businesses were standing at premiums to asset value and therefore were able to raise capital accretively, the 'Covid' world meant that another smaller cohort of companies required emergency (defensive) capital raises. After Hammerson's raise in September came Shaftesbury's GBP300m raise at 400p per share, a 20% discount to the undisturbed share price and 55% below where it had started 2020. We didn't own Shaftesbury prior to the capital raise but took the opportunity to participate. Given that part of the company's rationale for the raise was to give comfort to their banks and secure waivers over potential covenant breaches, one wonders if the Board would have felt so pressurised just a few days later. The share price finished our financial year at 641p which reflects the enormous change in sentiment around the reopening of the economy.

Private equity continues to stalk listed property companies and I reiterate the statement made many times in these reports over the last decade - if the listed market persistently undervalues its companies, private capital won't be shy about buying it. This year we have seen various firms build positions in listed companies: Brookfield (British Land), KKR (Great Portland Estates) and Starwood (RDI, CA Immo). It is the latter which has been most active with its stakes. Having acquired 30% of RDI from its South African based parent company, it launched an agreed bid for the remainder in February. The interesting point is that the offer (recommended by the Board at 121p) was 20% below the last published asset value but 30% ahead of the undisturbed share price. The board were acknowledging two things - firstly that the asset valuation was historic and likely to fall further and secondly that the mixed portfolio, whilst on the road to improvement under refreshed management, was set to trade perpetually at a discount to its asset value. The exit price therefore looked a fair one.

The precedent has been set and other small, deeply discounted companies should look to merge and generate improved operational metrics for their shareholders.

The corporate activity around Entra in Norway (covered earlier) was an important contributor to performance given our holding (2.5% of net assets).

The interest in listed real estate continues to strengthen as we move into the Spring with a range of existing companies taking the opportunity to raise capital whilst their shares trade at premiums to their asset value. This was capped in March by the first major IPO for over 3 years. CTP, a Central European logistics owner/developer raised EUR1bn with the founder diluting from 100% ownership to 83%. The company has a market cap of EUR5.6bn.


The physical property portfolio returned 2.8% with a capital return of -0.7% and an income return of 3.4% for the 12 months to March 2021. In what was a difficult year for real estate the portfolio remained resilient with rent collection in excess of 90% for all four quarters and with only limited concessions given to two retail tenants.

During the period the Trust sold its freehold interest in the Yodel Distribution Centre in North Bristol for GBP10m which reflected a net initial yield of 4.5% and a capital value of GBP200 per sq ft. This followed the successful regearing of the lease at the beginning of 2020. The sale was concluded at a 25% premium to the September 2020 valuation and is 118% above the July 2014 purchase price.

The Trust also had a successful period of asset management completing a number of leases including the letting of the vacant restaurant unit at The Colonnades. The 3,500 sq ft unit has been let to Happy Lamb Hot Pot on a 20 year lease. Happy Lamb is the latest edition of a hugely successful Asian and US chain which produces authentic Mongolian hot pot cuisine. This is their third restaurant opening after Holborn and Birmingham. This letting concludes a 10 year transformation of this Bayswater asset where we have added 16,000 sq ft of new retail space (bringing exciting brands like Graham & Green and 1 Rebel to the area) as well as doubling the Waitrose footprint from 20,000 to 40,000 sq ft.

At Wandsworth, following the successful granting of planning in November 2019, we have continued to work with Wandsworth Borough Council and the Greater London Authority to deliver the complex and detailed s.106 agreement. As anticipated this will take time. Meanwhile, we continue to let any of units on the estate which come vacant on short term leases. The demand for industrial space has continued to grow over the past 12 months and central London is no exception. New rents across the estate are in the high GBP20s per sq ft and post the year end we have let the only vacancy to Sweaty Betty, the highly successful UK leisure and fashion retailer.


Revenue earnings for the current year of 12.25p were 16% lower than the prior year.

Earnings were enhanced by a tax refund and some further prior period withholding tax recoveries which reduced the revenue tax charge rate to only 1.9%. The most significant contribution by far was a tax refund and interest thereon resulting from the final settlement of our long running FII GLO claim with HMRC. The tax refund and interest amounted to GBP1.7m, and that, together with the ability to release some associated provisions meant an overall contribution of 0.71p to the revenue account.

Long standing investors may recall that this claim was first mentioned in our reports for the year ended March 2010 following a change in UK tax law that all overseas dividend receipts were non-taxable in the UK from 1 July 2009. There were various challenges running through the European courts that this treatment of overseas dividends should be applied to earlier periods. These have ultimately had some degree of success and last year HMRC announced that they would settle on the open computations. We reached agreement with HMRC on our own open computations just before the financial year end and the tax repayment has been received.

In addition to the tax refund received we were able to reinstate losses which had been utilised for the relevant periods. These will now be available going forward, although use will be subject to current restrictions.

Our underlying income over the year fell by around 24%. Some companies cancelled dividends payable early in the financial year in reaction to the COVID-19 pandemic, or reduced distributions and this was documented in the Interim Report. The second half saw a similar level of income reduction as that seen in the first half. In addition, in the final quarter of the year some of our overseas income was impacted by sterling strength.

The longer-term outlook is still not clear. The UK has rolled out a successful vaccination programme and at the time of writing the easing of restrictions is progressing along the government roadmap timetable. This has enabled us to be a little more confident about our UK earnings with all companies (excluding some small cap retail focused businesses) recommencing dividends for FY22.

There have been clear real estate winners and losers and the portfolio remains well positioned towards those sectors which have maintained robust earnings through the pandemic. Our exposure to index-linked income remains high and we will see dividend increases here alongside those names exposed to buoyant conditions such as industrial and logistics. Other areas will remain under pressure.

On balance we expect the income from our portfolio to increase over the current financial year as both the UK and Continental Europe experience strong post vaccine recoveries. However, it should be noted that stronger sterling would reduce the income from our overseas holdings and any reductions in gearing would also lead to lower income.


The Chairman has already commented on gearing levels and also highlighted the benefits of our flexible borrowing structure.

This flexibility has been crucial in such a volatile year. Our gearing oscillated in a 10% range as we responded to the dramatic changes in market sentiment through the year. Over the period we utilised both our revolving loan facilities and our CFD capability in order to achieve this.

We increased the capacity on our ICBC loan facility during the year and the remaining loans were renewed at existing levels. We did see small increases on margins on some renewals. We also looked at the potential to take out new or extend our longer-term debt. Our Euro denominated loan note is due for repayment in 2026 and the Sterling note in 2031, however the flexibility of the short- term facilities is valuable in more volatile markets and has certainly worked well for us in the current year.

We continue to explore new options in all markets.


As economies emerge from the grip of the pandemic, investors have focused on assessing whether the damage (or growth) was temporary, longer lasting or permanent. Real estate investors are no exception and the range of premiums / discounts to net asset values of listed companies highlights the breadth of expectations across the property spectrum. The difficulty is that there is no precedent for the profile of recovery in tenant demand across so much of this asset class. Clearly existing structural shifts have been accelerated and new ones have emerged which may prove more permanent than the markets currently expect. All of this uncertainty leads us to focus on income sustainability and those markets where - if demand does return - supply is constrained.

Whilst tenant demand is hard to gauge we do benefit from a benign financing environment. Debt markets are as accommodating as they have ever been, even if the long end of the curve is rising. We see no reason for margins to widen in the near term. Inflationary pressures are building and fixed income asset values reflect these expectations. Property offers income which is tied either directly (index-linked) or indirectly (rental growth) to economic expansion. Our intention is to remain focused on areas where that income is both sustainable and where it offers growth.

In the near term, we aim to maintain the exposure to the private rented residential sector (particularly in Germany and Sweden) as the market continues to undervalue not only the quality of those earnings but also the steady growth profile. There is risk - in Germany - that a left wing coalition government would amend the current federal law resulting in local cities getting more control over rents. However the rent freeze in Berlin (over the last 18 months) resulted in a reduction in the number of available apartments as well as a slowing in the pace of new apartment delivery. We trust that common sense will prevail over political dogma. Elsewhere, undervalued income streams are evident in supermarkets and in parts of the healthcare market. Alongside index-linked sustainability we will also maintain exposure to the greatest growth opportunities. The structural shifts in retail behaviour are still ongoing. Evolution in the speed of delivery and post pandemic supply chain dynamics will drive growth across the logistics landscape from 'big box' to 'last mile'. We will continue to own the developers where we see increases in the value of landbanks as well as growing development margins. Investor demand for the end product shows no sign of abating.

Office markets will remain volatile. Businesses will spend time working out their requirements in a post pandemic world. Interaction and collaboration will drive office usage. Tasks that can be fulfilled without physical interaction will be timetabled for remote working. A new balance will develop with one sure fire certainty, the premium being attached to best in class newly built space with complete environmental credentials. Developers will respond to this demand and we expect an acceleration in buildings being identified for refurbishment earlier than previously envisaged. Obsolescence of the existing office stock will accelerate.

Post the year end in early May, St Modwen Properties announced that an offer of 542p per share from Blackstone, a 24% premium to the last published NAV had the support of the board. This company has a large strategic landbank, a high quality logistics portfolio and a growing housebuilding unit and whilst it was trading close to its asset value, private equity clearly feels it is undervalued. This is a reminder, as stated in a number of previous reports, that the depth of both equity and debt availability underpins listed company valuations.

Marcus Phayre-Mudge

Fund Manager

26 May 2021

Investment Objective and Benchmark

The Company's Objective is to maximise shareholders' total return by investing in the shares and securities of property companies and property related businesses internationally and also in investment property located in the UK.

The benchmark is the FTSE EPRA/NAREIT Developed Europe Capped Net Total Return Index in Sterling. The index, calculated by FTSE, is free-float based and as at 31 March 2021 had 105 constituent companies. The index limits exposure to any one company to 10% and reweights the other constituents pro-rata. The benchmark website www.epra.com contains further details about the index and performance.

Business Model

The Company's business model follows that of an externally managed investment trust.

The Company has no employees. Its wholly non-executive Board of Directors retains responsibility for corporate strategy; corporate governance; risk and control assessment; the overall investment and dividend policies; setting limits on gearing and asset allocation and monitoring investment performance.

The Board has appointed BMO Investment Business Limited as the Alternative Investment Fund Manager ("AIFM") with portfolio management delegated to Thames River Capital LLP. Marcus Phayre-Mudge acts as Fund Manager to the Company on behalf of Thames River Capital LLP and Alban Lhonneur is Deputy Fund Manager. George Gay is the Direct Property Manager and Joanne Elliott the Finance Manager. They are supported by a team of equity and portfolio analysts.

Further information in relation to the Board and the arrangements under the Investment Management Agreement can be found in the Report of the Directors in the full Annual Report and Accounts.

In accordance with the Alternative Investment Fund Managers Directive ("AIFMD"), BNP Paribas has been appointed as Depositary to the Company. BNP Paribas also provide custodial and administration services to the Company. Company secretarial services are provided by Link Company Matters.

The specific terms of the Investment Management Agreement are set out in the full Annual Report and Accounts.

Strategy and Investment Policies

The investment selection process seeks to identify well managed companies of all sizes. The Manager generally regards future growth and capital appreciation potential more highly than immediate yield or discount to asset value.

Although the investment objective allows for investment on an international basis, the benchmark is a Pan-European Index and the majority of the investments will be located in that geographical area. Direct property investments are located in the UK only.

As a dedicated investor in the property sector the Company cannot offer diversification outside that sector, however, within the portfolio there are limitations, as set out below, on the size of individual investments held to ensure diversification within the portfolio.

Asset allocation guidelines

The maximum holding in the stock of any one issuer or of a single asset is limited to 15% of the portfolio at the point of acquisition. In addition, any holdings in excess of 5% of the portfolio must not in aggregate exceed 40% of the portfolio.

The Manager currently applies the following guidelines for asset allocation:

 UK listed equities             25 - 50% 
 Continental European listed 
  equities                      45 - 75% 
 Direct Property - UK           0 - 20% 
 Other listed equities          0 - 5% 
 Listed bonds                   0 - 5% 
 Unquoted investments           0 - 5% 


The Company may employ levels of gearing from time to time with the aim of enhancing returns, subject to an overall maximum of 25% of the portfolio value.

In certain market conditions the Manager may consider it prudent not to employ gearing on the balance sheet at all, and to hold part of the portfolio in cash.

The current asset allocation guideline is 10% net cash to 25% net gearing (as a percentage of portfolio value).

Property Valuation

Investment properties are valued every six months by an external independent valuer. Valuations of all the Group's properties as at 31 March 2021 have been carried out on a "RCIS Red Book" basis and these valuations have been adopted in the accounts.

Allocation of costs between Revenue & Capital

On the basis of the Board's expected long-term split of returns in the form of capital gains and income, the Group charges 75% of annual base management fees and finance costs to capital. All performance fees are charged to capital.

Holdings in the Investment Companies

It is the Board's current intention to hold no more than 15% of the portfolio in listed closed-ended investment companies.

Some companies investing in commercial or residential property are structured as listed externally managed closed-ended investment companies and therefore form part of our investment universe. Although this is not a model usually favoured by our Fund Manager, some investments are made in these structures in order to access a particular sector of the market or where the management team is regarded as especially strong. If these companies grow and become a larger part of our investment universe and/or new companies come to the market in this format the Manager may wish to increase exposure to these vehicles. If the Manager wishes to increase investment to over 15%, the Company will make an announcement accordingly.

Key Performance Indicators

The Board assesses the performance of the Manager in meeting the Trust's objective against the following Key Performance Indicators ("KPIs"):

 KPI                                         Board monitoring and outcome 
 Net Asset Value Total Return 
  relative to the benchmark                         *    The Board reviews the performance in detail at each 
  The Directors regard the out-performance               meeting and discusses the results and outlook with 
  of the Company's net asset                             the Manager. 
  value total return in performance 
  in comparison with the benchmark 
  as being an overall measure                                                             Outcome 
  of value delivered to the                                                           1 year   5 years 
  shareholders' over the longer-term.                                                -------  -------- 
                                                    NAV Total Return* (Annualised)     20.7%      7.7% 
                                                                                     -------  -------- 
                                                    Benchmark Total Return 
                                                     (Annualised)                      15.9%      4.3% 
                                                                                     -------  -------- 
                                                   * NAV Total Return is calculated by 
                                                   re-investing the dividends in the assets 
                                                   and the Company from the relevant ex-dividend 
                                                   date. Dividends are deemed to be re-invested 
                                                   on the ex-dividends date for the benchmark. 
 Delivering a reliable dividend 
  which is growing over the                         *    The Board reviews statements on income received to 
  longer term                                            date and income forecasts at each meeting. 
  The principal objective of 
  the Company is a total return                                                     Outcome 
  objective, however, the Fund                                                  1 year   5 years 
  Manager also aims to deliver                                                 -------  -------- 
  a reliable dividend with growth                   Compound Annual Dividend 
  over the longer term.                              Growth*                      1.4%     11.2% 
                                                                               -------  -------- 
                                                    Compound Annual RPI           1.5%      2.6% 
                                                                               -------  -------- 
                                                   * The final dividend in the time series 
                                                   divided by the initial dividend in the 
                                                   period raised to the power of 1 divided 
                                                   by the number of years in the series. 
 The Discount or Premium at 
  which the Company's shares                        *    The Board takes powers at each AGM to buy-back and 
  trade compared with Net Asset                          issue shares. When considering the merits of share 
  Value                                                  buy-back or issuance, the Board looks at a number of 
  Whilst expectation of investment                       factors in addition to the short and longer-term 
  performance is a key driver                            discount or premium to NAV to assess whether action 
  of the share price discount                            would be beneficial to shareholders overall. 
  or premium to the Net Asset                            Particular attention is paid to the current market 
  Value of an investment trust                           sentiment, the potential impact of any share buy-back 
  over the longer-term, there                            activity on the liquidity of the shares and on 
  are periods when the discount                          Ongoing Charges over the longer term. 
  can widen. The Board is aware 
  of the vulnerability of a                                                       Outcome 
  sector-specialist trust to                                                  1 year   5 years 
  a change of investor sentiment                                             -------  -------- 
  towards that sector, or to                        Average discount*          10.2%      6.3% 
  periods of wider market uncertainty,                                       -------  -------- 
  and the impact that can have                      Total number of shares       Nil       Nil 
  on the discount.                                   repurchased 
                                                                             -------  -------- 
                                                   * Average daily discount throughout the 
                                                   period of share price to NAV with income. 
                                                   Source: Bloomberg. 
 Level of Ongoing Charges 
  The Board is conscious of                    *    Expenses are budgeted for each financial year and the 
  expenses and aims to deliver                      Board reviews regular reports on actual and forecast 
  a balance between excellent                       expenses throughout the year. 
  service and costs. 
  The AIC definition of Ongoing                                             1 year   5 years 
  Charges includes any direct                                              -------  -------- 
  property costs in addition                   Ongoing charges excluding 
  to the management fees and                    performance fees             0.65%     0.65% 
  all other expenses incurred                                              -------  -------- 
  in running a publicly listed                 Ongoing charges excluding 
  company. As no other investment               performance fees and 
  trusts hold part of their                     Direct Property Costs        0.63%     0.62% 
  portfolio in direct property                                             -------  -------- 
  (they either hold 100% of 
  their portfolio as property 
  securities or as direct property),           *    The ongoing charges are competitive when compared to 
  in addition to Ongoing Charges                    the peer group. 
  as defined by the AIC, this 
  statistic is shown without 
  direct property costs to allow 
  a clearer comparison of overall 
  administration costs with 
  other funds investing in securities. 
  The Board monitors the Ongoing 
  Charges, in comparison to 
  a range of other Investment 
  Trusts of similar size, both 
  property sector specialists 
  and other sector specialists. 
 Investment Trust Status 
  The Company must continue                    *    The Board reviews financial information and forecasts 
  to operate in order to meet                       at each meeting which set out the requirements 
  the requirements for Section                      outlined in Section 1158. 
  1158 of the Corporation Tax 
  Act 2010. 
                                               *    The Directors believe that the conditions and ongoing 
                                                    requirements have been met in respect of the year to 
                                                    31 March 2021 and that the Company will continue to 
                                                    meet the requirements. 

The KPIs are considered to be Alternative Performance Measures as defined in the full annual report and accounts.

Principal and Emerging Risks and Uncertainties

In delivering long-term returns to shareholders, the Board must also identify and monitor the risks that have been taken in order to achieve that return. The Board has included below details of the principal and emerging risks and uncertainties facing the Company and the appropriate measures taken in order to mitigate these risks as far as practicable.

The Board also considers new and emerging risks adding appropriate monitoring and mitigation measures accordingly.

The impact of the COVID-19 pandemic, the response of financial markets, the unknown duration of the pandemic and ongoing impact on economies around the world together with operational changes in response to government guidelines continues to increase some of the risks listed below in comparison with prior years.

 Risk Identified                             Board monitoring and mitigation 
 Share price performs poorly in 
  comparison to the underlying NAV             *    The Board monitors the level of discount or premium 
  The shares of the Company are                     at which the shares are trading over the short and 
  listed on the London Stock Exchange               longer-term. 
  and the share price is determined 
  by supply and demand. The shares 
  may trade at a discount or premium           *    The Board encourages engagement with the 
  to the Company's underlying NAV                   shareholders. The Board receives reports at each 
  and this discount or premium may                  meeting on the activity of the Company's brokers, PR 
  fluctuate over time.                              agent and meetings and events attended by the Fund 
                                               *    The Company's shares are available through the BMO 
                                                    share schemes and the Company participates in the 
                                                    active marketing of these schemes. The shares are 
                                                    also widely available on open architecture platforms 
                                                    and can be held directly through the Company's 
                                               *    The Board takes the powers to buy-back and to issue 
                                                    shares at each AGM. 
 Poor investment performance of 
  the portfolio relative to the                *    The Manager's objective is to outperform the 
  benchmark                                         benchmark. The Board regularly reviews the Company's 
  The Company's portfolio is actively               long-term strategy and investment guidelines and the 
  managed. In addition to investment                Manager's relative positions against these. 
  securities the Company also invests 
  in commercial property and accordingly, 
  the portfolio may not follow or              *    The Management Engagement Committee reviews the 
  outperform the return of the benchmark            Manager's performance annually. The Board has the 
                                                    powers to change the Manager if deemed appropriate. 
 Market risk 
                                               *    The Board receives and considers a regular report 
  Both share prices and exchange                    from the Manager detailing asset allocation, 
  rates may move rapidly and adversely              investment decisions, currency exposures, gearing 
  impact the value of the Company's                 levels and rationale in relation to the prevailing 
  portfolio.                                        market conditions. 
  Although the portfolio is diversified 
  across a number of geographical              *    The report considers the potential impact of Brexit 
  regions, the investment mandate                   and the Manager's response in positioning the 
  is focused on a single sector                     portfolio. 
  and therefore the portfolio will 
  be sensitive towards the property 
  sector, as well as global equity             *    The report considers the current and potential future 
  markets more generally.                           impact of the COVID-19 pandemic and the ongoing 
                                                    implication for the property market and valuations 
  Property companies are subject                    overall and by each sector. 
  to many factors which can adversely 
  affect their investment performance, 
  these include the general economic 
  and financial environment in which 
  their tenants operate, interest 
  rates, availability of investment 
  and development finance and regulations 
  issued by governments and authorities. 
  Although we have now exited the 
  European Union the structure of 
  our future relationship with Continental 
  Europe is still evolving and there 
  could be an impact on occupation 
  across each sector. 
  The COVID-19 global pandemic dominated 
  the financial year. This has changed 
  the way we live and work, creating 
  unprecedented uncertainty regarding 
  the impact on economies and property 
  markets around the world both 
  in the short and longer term. 
  Any strengthening or weakening 
  of Sterling will have a direct 
  impact as a proportion of our 
  Balance Sheet is held in non-GBP 
  denominated currencies. The currency 
  exposure is maintained in line 
  with the benchmark and will change 
  over time. As at 31 March 2021, 
  72.1% of the Trust's exposure 
  lies to currencies other than 
 The Company is unable to maintain 
  dividend growth                              *    The Board receives and considers regular income 
  Lower earnings in the underlying                  forecasts. 
  portfolio putting pressure on 
  the Company's ability to grow 
  the dividend could result from               *    Income forecast sensitivity to changes in FX rates is 
  a number of factors:                              also monitored. 
  -- lower earnings and distributions 
  in investee companies. Companies             *    The Company has substantial revenue reserves which 
  in some property sectors continue                 can be drawn upon when required. 
  to be negatively impacted by the 
  COVID-pandemic. Companies in some 
  sectors cancelled reduced dividends          *    The Board will continue to monitor the impact of 
  during the last financial year                    COVID-19 and the long term implications for income 
  precautionary measure to protect                  generation. 
  their balance in the short term. 
  Although most have returned paying 
  dividends, some are at a lower 
  level than previously and others 
  are continuing to withhold dividends; 
  -- prolonged vacancies in the 
  direct property portfolio and 
  lease or rental renegotiations 
  as a result of COVID-19; 
  -- strengthening Sterling reducing 
  the value of overseas dividend 
  receipts in Sterling terms. The 
  Company has seen a material increase 
  in the level of earnings in recent 
  years. A significant factor in 
  this was the weakening of Sterling 
  following the Brexit decision. 
  Sterling strengthened in the last 
  quarter of the financial year. 
  This may continue or reverse again 
  in the near or medium term as 
  the longer term implications of 
  Brexit and the COVID-19 pandemic 
  the impact on the UK and European 
  economies understood. Strengthening 
  of Sterling would lead fall in 
  -- adverse changes in the tax 
  treatment of dividends other income 
  received by the Company; and 
  -- changes in the timing of dividend 
  receipts from 
  investee companies. 
 Accounting and operational risks 
  Disruption or failure of systems             *    Third party service providers produce periodic 
  and processes underpinning the                    reports to the Board on their control environments 
  services provided by third parties                and business continuation provisions on a regular 
  and the risk that these suppliers                 basis. 
  provide a sub-standard service. 
  The impact of the COVID-19 pandemic          *    The Management Engagement Committee considers the 
  and the operational response from                 performance of each of the service providers on a 
  the manager and service providers                 regular basis and considers their ongoing appointment 
  has been closely monitored.                       and terms and conditions. 
                                               *    The Custodian and Depository are responsible for the 
                                                    safeguarding of assets. In the event of a loss of 
                                                    assets the Depository must return assets of an 
                                                    identical type or corresponding amount unless able to 
                                                    demonstrate that the loss was the result of an event 
                                                    beyond their reasonable control. 
                                               *    Monitoring the quality and timeliness of service as 
                                                    service providers respond to COVID-19 regulations and 
                                                    guidelines, in particular with widespread home 
                                                    working and consideration of the durability of the 
                                                    arrangements. Many organisations are now planning to 
                                                    incorporate home working into their operational 
                                                    structure as a permanent feature. 
 Financial risks 
  The Company's investment activities          *    Details of these risks together with the policies for 
  expose it to a variety of financial               managing these risks are found in the Notes to the 
  risks which include counterparty                  Financial Statements in the full Annual Reports and 
  credit risk, liquidity risk and                   Accounts. 
  the valuation of financial instruments. 
  Any impact of the COVID-19 pandemic 
  has been considered. 
 Loss of Investment Trust Status 
  The Company has been accepted                *    The Investment Manager monitors the investment 
  by HM Revenue & Customs as an                     portfolio, income and proposed dividend levels to 
  investment trust, subject to continuing           ensure that the provisions of CTA 2010 are not 
  to meet the relevant eligibility                  breached. The results are reported to the Board at 
  conditions. As such the Company                   each meeting. 
  is exempt from capital gains tax 
  on the profits realised from the 
  sale of investments.                         *    The income forecasts are reviewed by the Company's 
                                                    tax advisor through the year who also reports to the 
  Any breach of the relevant eligibility            Board on the year-end tax position and reports on CTA 
  conditions could lead to the Company              2010 compliance. 
  losing investment trust status 
  and being subject to corporation 
  tax on capital gains realised 
  within the Company's portfolio. 
 Legal, regulatory and reporting 
  risks                                        *    The Board receives regular regulatory updates from 
  Failure to comply with the London                 the Manager, Company Secretary, legal advisors and 
  Stock Exchange Listing Rules and                  the Auditors. The Board considers these reports and 
  Disclosure Guidance and Transparency              recommendations and takes action accordingly. 
  rules; failure to meet the requirements 
  under the Alternative Investment 
  Funds Directive, the provisions              *    The Board receives an annual report and update from 
  of the Companies Act 2006 and                     the Depository. 
  other UK, European and overseas 
  legislation affecting UK companies. 
  Failure to meet the required accounting      *    Internal checklists and review procedures are in 
  standards or make appropriate                     place at service providers. 
  disclosures in the Interim and 
  Annual Reports. 
 Inappropriate use of gearing 
  Gearing, either through the use              *    The Board receives regular reports from the Manager 
  of bank debt or through the use                   on the levels of gearing in the portfolio. These are 
  of derivatives may be utilised                    considered against the gearing limits set in the 
  from time to time. Whilst the                     Investment Guidelines and also in the context of 
  use of gearing is intended to                     current market conditions and sentiment. The cost of 
  enhance the NAV total return,                     debt is monitored and a balance sought between term, 
  it will have the opposite effect                  cost and flexibility. 
  when the return of the Company's 
  investment portfolio is negative 
  or where the cost of debt is higher 
  than the return from the portfolio. 
 Personnel changes at Investment 
  Manager                                      *    The Chairman conducts regular meetings with the Fund 
  Loss of portfolio manager or other                Management team. 
  key staff. 
                                               *    The fee basis protects the core infrastructure and 
                                                    depth and quality resources. The fee structure 
                                                    incentivises good outperformance and is fundamental 
                                                    in the ability to retain key staff. 

Statement of Directors' responsibilities in relation to the Group financial statements

The Directors are responsible for preparing the Annual Report, the Strategic Report, the Directors Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and Parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and applicable law and have elected to prepare the Parent Company financial statements on the same basis. In addition the Group financial statements are required under the UK Disclosure Guidance and Transparency Rules to be prepared in accordance with International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of the Group's profit or loss for that period. In preparing each of the Group and Parent Company financial statements, the Directors are required to:

   --    select suitable accounting policies and then apply them consistently; 
   --    make judgements and estimates that are reasonable, relevant and reliable; 

-- state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and, as regards the group financial statements, International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union;

-- assess the Group and Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

-- use the going concern basis of accounting unless they either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement of the Directors in respect of the annual financial report

Each of the Directors confirms that to the best of their knowledge:

-- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group and Parent Company and the undertakings included in the consolidation taken as a whole; and

-- the strategic report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

The Directors consider the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the group's position and performance, business model and strategy.

By order of the Board

David Watson


26 May 2021

Group Statement of Comprehensive Income

For the year ended 31 March 2021 (unaudited)

                                 Year ended 31 March 2021               Year ended 31 March 2020 
                              Revenue      Capital        Total     Revenue       Capital         Total 
                               Return       Return                   Return        Return 
                              GBP'000      GBP'000      GBP'000     GBP'000       GBP'000       GBP'000 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 
  income                       36,557            -       36,557      47,112             -        47,112 
 Other operating 
  income                           67            -           67          35             -            35 
 Gross rental 
  income                        3,185            -        3,185       3,415             -         3,415 
 Service charge 
  income                        1,051            -        1,051       1,786             -         1,786 
  on investment 
  held at fair 
  value                             -      196,582      196,582           -     (153,614)     (153,614) 
 Net movement 
  on foreign 
  exchange; investment 
  and loan notes                    -      (3,144)      (3,144)           -        11,296        11,296 
 Net movement 
  on foreign 
  exchange; cash 
  and cash equivalents              -      (1,474)      (1,474)           -           302           302 
 Net returns 
  on contacts 
  for difference                3,320       17,978       21,298       5,724      (41,276)      (35,552) 
 Net return 
  on total return 
  swap                              -        (188)        (188)           -       (3,808)       (3,808) 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 
 Total Income                  44,180      209,754      253,934      58,072     (187,100)     (129,028) 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 
  and performance 
  fees                        (1,556)     (14,328)     (15,884)     (1,570)       (7,392)       (8,962) 
 Direct property 
  expenses, rent 
  payable and 
  service charge 
  costs                       (1,321)            -      (1,321)     (1,984)             -       (1,984) 
 Other administrative 
  expenses                    (1,231)        (604)      (1,835)     (1,398)         (615)       (2,013) 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 
 Total operating 
  expenses                    (4,108)     (14,932)     (19,040)     (4,952)       (8,007)      (12,959) 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 
 Operating profit/(loss)       40,072      194,822      234,894      53,120     (197,550)     (145,244) 
 Finance costs                  (416)      (1,969)      (2,385)       (814)       (2,443)       (3,257) 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 
  from operations 
  before tax                   39,656      192,853      232,509      52,306     (197,550)     (145,244) 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 
 Taxation                       (767)        2,667        1,900     (5,912)         3,149       (2,763) 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 
 Total comprehensive 
  income                       38,889      195,520      234,209      46,394     (194,401)     (148,007) 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 
  per Ordinary 
  share                        12.25p       61.61p       73.86p      14.62p      (61.26)p      (46.64)p 
-------------------------  ----------  -----------  -----------  ----------  ------------  ------------ 

The Total column of this statement represents the Group's Statement of Comprehensive Income, prepared in accordance with IFRS. 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 year.

All income is attributable to the shareholders of the parent company.

Group and Company Statement of Changes in Equity


                                                                 Capital   Retained 
                               Share Capital  Share Premium   Redemption   Earnings 
  For the year ended                Ordinary        Account      Reserve   Ordinary      Total 
   31 March 2021 (unaudited)         GBP'000        GBP'000      GBP'000    GBP'000    GBP'000 
-----------------------------  -------------  -------------  -----------  ---------  --------- 
  At 31 March 2020                    79,338         43,162       43,971    969,982  1,136,453 
  Total comprehensive 
   income                                  -              -            -    234,409    234,409 
  Dividends paid                           -              -            -   (44,429)   (44,429) 
-----------------------------  -------------  -------------  -----------  ---------  --------- 
  At 31 March 2021                    79,338         43,162       43,971  1,159,962  1,326,433 
-----------------------------  -------------  -------------  -----------  ---------  --------- 


                                                                 Capital   Retained 
                               Share Capital  Share Premium   Redemption   Earnings 
    For the year ended              Ordinary        Account      Reserve   Ordinary       Total 
    31 March 2021(unaudited)         GBP'000        GBP'000      GBP'000    GBP'000     GBP'000 
-----------------------------  -------------  -------------  -----------  ---------  ---------- 
  At 31 March 2020                    79,338         43,162       43,971    969,982   1,136,453 
  Total comprehensive 
   income                                  -              -            -    234,409     234,409 
  Dividends paid                           -              -            -   (44,429)    (44,429) 
-----------------------------  -------------  -------------  -----------  ---------  ---------- 
  At 31 March 2021                    79,338         43,162       43,971  1,159,962   1,326,433 
-----------------------------  -------------  -------------  -----------  ---------  ---------- 


                                                         Capital   Retained 
                       Share Capital  Share Premium   Redemption   Earnings 
  For the year ended        Ordinary        Account      Reserve   Ordinary      Total 
  31 March 2020              GBP'000        GBP'000      GBP'000    GBP'000    GBP'000 
At 31 March 2019              79,338         43,162       43,971  1,161,783  1,328,254 
Total comprehensive 
 income                            -              -            -  (148,007)  (148,007) 
Dividends paid                     -              -            -   (43,794)   (43,794) 
  At 31 March 2020            79,338         43,162       43,971    969,982  1,136,453 
---------------------  -------------  -------------  -----------  ---------  --------- 


                                                         Capital   Retained 
                       Share Capital  Share Premium   Redemption   Earnings 
  For the year ended        Ordinary        Account      Reserve   Ordinary      Total 
  31 March 2020              GBP'000        GBP'000      GBP'000    GBP'000    GBP'000 
At 31 March 2019              79,338         43,162       43,971  1,161,783  1,328,254 
Total comprehensive 
 income                            -              -            -  (148,007)  (148,007) 
Dividends paid                     -              -            -   (43,794)   (43,794) 
  At 31 March 2020            79,338         43,162       43,971    969,982  1,136,453 
---------------------  -------------  -------------  -----------  ---------  --------- 

Group and Company Balance Sheets

as at 31 March 2021 (unaudited)

                                           Group    Company        Group      Company 
                                            2021       2021         2020         2020 
                                         GBP'000    GBP'000      GBP'000      GBP'000 
-------------------------------------  ---------  ---------  -----------  ----------- 
  Non-current assets 
  Investments held 
   at fair value                       1,400,516  1,400,516    1,155,295    1,155,295 
  Investments in subsidiaries                  -     43,312            -       50,429 
-------------------------------------  ---------  ---------  -----------  ----------- 
                                       1,400,516  1,443,828    1,155,295    1,205,724 
  Deferred taxation 
   asset                                     686        686            -            - 
-------------------------------------  ---------  ---------  -----------  ----------- 
                                       1,401,202  1,444,514    1,155,295    1,205,724 
  Current assets 
  Debtors                                 60,990     60,520       60,094       59,972 
  Cash and cash equivalents               29,114     29,112       40,129       40,127 
-------------------------------------  ---------  ---------  -----------  ----------- 
                                          90,104     89,632      100,223      100,099 
    Current liabilities                (107,280)  (150,120)     (59,711)    (110,016) 
-------------------------------------  ---------  ---------  -----------  ----------- 
    Net current (liabilities)/assets    (17,176)   (60,488)       40,512      (9,917) 
  Total assets less 
   current liabilities                 1,384,026  1,384,026    1,195,807    1,195,807 
  Non-current liabilities               (57,593)   (57,593)     (59,354)     (59,354) 
-------------------------------------  ---------  ---------  -----------  ----------- 
  Net assets                           1,326,433  1,326,433    1,136,453    1,136,453 
-------------------------------------  ---------  ---------  -----------  ----------- 
    Capital and reserves 
  Called up share capital                 79,338     79,338       79,338       79,338 
  Share premium account                   43,162     43,162       43,162       43,162 
  Capital redemption 
   reserve                                43,971     43,971       43,971       43,971 
  Retained earnings                    1,159,962  1,159,962      969,982      969,982 
-------------------------------------  ---------  ---------  -----------  ----------- 
  Equity shareholders' 
   funds                               1,326,433  1,326,433    1,136,453    1,136,453 
-------------------------------------  ---------  ---------  -----------  ----------- 
  Net Asset Value per: 
  Ordinary share                         417.97p    417.97p      358.11p      358.11p 
-------------------------------------  ---------  ---------  -----------  ----------- 

Group and Company Cash Flow Statements

for the year ended 31 March 2021 (unaudited)

                                               Group      Company       Group      Company 
                                                2021         2021        2020         2020 
                                             GBP'000      GBP'000     GBP'000      GBP'000 
----------------------------------------  ----------  -----------  ----------  ----------- 
 Reconciliation of profit/(loss) 
  from operations before tax to 
  net cash outflow from operating 
 Profit/(loss) from operations 
  before tax                                 232,509      231,844   (145,244)    (145,244) 
 Finance costs                                 2,385        2,385       3,257        3,257 
 (Gains)/losses on investments 
  and derivatives held at fair 
  value through profit or loss             (214,372)    (207,255)     198,698      198,711 
 Net movement on foreign exchange; 
  cash and cash equivalents and 
  loan notes                                   (179)        (179)         859          859 
 (Increase)/decrease in accrued 
  income                                       (102)        (102)         584          584 
 Sales of investments                        353,167      353,167     316,841      316,841 
 Purchases of investments                  (370,496)    (370,496)   (383,674)    (383,674) 
 Decrease/(increase) in sales 
  settlement debtor                            4,753        4,753     (1,417)      (1,417) 
 (Decrease)/increase in purchase 
  settlement creditor                        (5,781)      (5,781)       4,501        4,501 
 (Increase)/decrease in other 
  debtors                                   (11,436)     (11,436)       4,447        4,447 
 Increase/(decrease) in other 
  creditors                                    2,451      (4,001)       2,047        2,034 
 Scrip dividends included in investment 
  income and net returns on contracts 
  for difference                             (8,489)      (8,489)     (3,818)      (3,818) 
----------------------------------------  ----------  -----------  ----------  ----------- 
 Net cash outflow from operating 
  activities before interest and 
  taxation                                  (15,590)     (15,590)     (2,919)      (2,919) 
 Interest paid                               (2,607)      (2,607)     (3,421)      (3,421) 
 Taxation paid                               (1,915)      (1,915)     (2,321)      (2,321) 
----------------------------------------  ----------  -----------  ----------  ----------- 
 Net cash outflow from operating 
  activities                                (20,112)     (20,112)     (8,661)      (8,661) 
 Financing activities 
 Equity dividends paid                      (44,429)     (44,429)    (43,794)     (43,794) 
 Drawdown of loans                            55,000       55,000      40,000       40,000 
 Net cash from/(used in) financing 
  activities                                  10,571       10,571     (3,794)      (3,794) 
----------------------------------------  ----------  -----------  ----------  ----------- 
 Decrease in cash                            (9,541)      (9,541)    (12,455)     (12,455) 
 Cash and cash equivalents at 
  start of year                               40,129       40,127      52,282       52,280 
 Net movement in foreign exchange; 
  cash and cash equivalents                  (1,474)      (1,474)         302          302 
----------------------------------------  ----------  -----------  ----------  ----------- 
   Cash and cash equivalents at 
   end of year                                29,114       29,112      40,129       40,127 
----------------------------------------  ----------  -----------  ----------  ----------- 
 Dividends received                           38,224       38,224      52,003       53,003 
 Interest received                                45           45          37           37 

Notes to the Preliminary Announcement

   1   Accounting policies 
       The financial statements for the year ended 31 March 2021 have 
        been prepared on a going concern basis, in accordance with International 
        Financial Reporting Standards (IFRSs) adopted pursuant to Regulation 
        (EC) No 1606/2002 as it applies in the European Union and in conformity 
        with the requirements of the Companies Act 2006. 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 IFRS. 
        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, substantial 
        reductions in revenues received and reductions in market liquidity 
        including the effects and potential effects of the current and 
        likely ongoing economic impact caused by the Coronavirus pandemic. 
        The Board is satisfied with the operational resilience of service 
        providers despite COVID-19 and continues to monitor their performance 
        throughout the pandemic. 
        In light of the testing carried out, the liquidity of the level 
        1 assets held by the Company and the significant net asset value 
        position, and despite the net current liability position of the 
        Group and Parent Company (which could be mitigated by the sale 
        of liquid level 1 investments), the Directors are satisfied that 
        the Company and Group have adequate financial resources to continue 
        in operation for at least the next 12 months following the signing 
        of the financial statements and therefore it is appropriate to 
        adopt the going concern basis of accounting. 
        The Group and Company financial statements are expressed in Sterling, 
        which is their functional and presentational currency. Sterling 
        is the functional currency because it is the currency of the primary 
        economic environment in which the Group operates. Values are rounded 
        to the nearest thousand pounds (GBP'000) except where otherwise 
 2     Investment income 
                                                                                              Year ended 
                                                                                                31 March       Year ended 
                                                                                                    2021         31 March 
                                                                                             (unaudited)             2020 
                                                                                                 GBP'000          GBP'000 
      --------------------------------------------------------------------------------  ----------------  --------------- 
  Dividends from UK listed investments                                                             3,753            4,911 
  Dividends from overseas listed investments                                                      18,656           26,631 
  Scrip dividends from listed investments                                                          7,482            3,370 
  Property income distributions                                                                    6,666           12,200 
 -------------------------------------------------------------------------------------  ----------------  --------------- 
                                                                                                  36,557           47,112 
 -------------------------------------------------------------------------------------  ----------------  --------------- 
 3.    Earnings/(loss) Per Share 
       Earnings/(loss) per Ordinary share 
        The earnings/(loss) per Ordinary share can be analysed between 
        revenue and capital, as below: 
                                                                                              Year ended 
                                                                                                31 March       Year ended 
                                                                                                    2021         31 March 
                                                                                             (unaudited)             2020 
                                                                                                 GBP'000          GBP'000 
      --------------------------------------------------------------------------------  ----------------  --------------- 
  Net revenue profit                                                                              38,889           46,394 
  Net capital profit/(loss)                                                                      195,520        (194,401) 
 -------------------------------------------------------------------------------------  ----------------  --------------- 
  Net total profit/(loss)                                                                        234,409        (148,007) 
 -------------------------------------------------------------------------------------  ----------------  --------------- 
  Weighted average number of 
   shares in issue during the 
   year                                                                                      317,350,980      317,350,980 
 -------------------------------------------------------------------------------------  ----------------  --------------- 
                                                                                                   pence            pence 
      --------------------------------------------------------------------------------  ----------------  --------------- 
  Revenue earnings per share                                                                       12.25            14.62 
  Capital earnings/(loss) per 
   share                                                                                           61.61          (61.26) 
 -------------------------------------------------------------------------------------  ----------------  --------------- 
  Earnings/(loss) per Ordinary 
   share                                                                                           73.86          (46.64) 
 -------------------------------------------------------------------------------------  ----------------  --------------- 
    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     Net Asset Value Per Ordinary Share 
        Net asset value per Ordinary share is based on the net assets attributable 
        to Ordinary shares of GBP1,326,433,000 (2020: 
        GBP1,136,453,000) and on 317,350,980 (2020: 317,350,980) Ordinary 
        shares in issue at the year end. 
 5     Share capital changes 
        During the year, the Company made no market purchases for cancellation 
        of Ordinary shares of 25p each (2020: none). 
        Since 1 April 2021 no Ordinary shares have been purchased and cancelled. 
 6     Status of preliminary announcement 
  The financial information set out above does not constitute the 
   Company's statutory accounts for the years ended 31 March 2021 
   or 2020. The financial information for 2020 is derived from the 
   statutory accounts for 2020 which have been delivered to the registrar 
   of companies. 
   The auditor has reported on the 2020 accounts; their report was 
   (i) unqualified, (ii) contained an emphasis of matter paragraph 
   in respect of the valuation of direct property investments, as 
   the independent external valuations for the property investments 
   were reported on the basis of 'material valuation uncertainty' 
   due to the potential economic effect of the Coronavirus pandemic. 
   (iii) did not contain a statement under section 498 (2) or (3) 
   of the Companies Act 2006. 
   The auditor's report for the statutory accounts for 2021 is not 
   expected to contain an emphasis of matter paragraph. The statutory 
   accounts for 2021 will be finalised on the basis of the financial 
   information presented by the Directors in this preliminary announcement 
   and will be delivered to the registrar of companies in due course. 
 7     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 
   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 
   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. 
   The valuation techniques used by the Group are explained in the 
   accounting policies in notes 1 (f) and 1 (g) in the full Annual 
   Report and Accounts. 
   The table below sets out fair value measurements using IFRS 13 
   fair value hierarchy. 
   Financial assets/(liabilities) at fair value through profit or 
                                      Level 1    Level 2    Level 3       Total 
    At 31 March 2021 (unaudited)      GBP'000    GBP'000    GBP'000     GBP'000 
   ------------------------------  ----------  ---------  ---------  ---------- 
    Equity investments              1,315,977          -      1,468   1,317,445 
    Investment properties                   -          -     83,071      83,071 
    Contracts for difference                -      (141)          -       (141) 
    Foreign exchange forward 
     contracts                              -    (1,107)          -     (1,107) 
   ------------------------------  ----------  ---------  ---------  ---------- 
                                    1,315,977    (1,248)     84,539   1,399,268 
   ------------------------------  ----------  ---------  ---------  ---------- 
                                      Level 1    Level 2    Level 3       Total 
    At 31 March 2020                  GBP'000    GBP'000    GBP'000     GBP'000 
   ------------------------------  ----------  ---------  ---------  ---------- 
    Equity investments              1,060,103          -        682   1,060,785 
    Investment properties                   -          -     94,510      94,510 
    Contracts for difference                -      8,698          -       8,698 
    Total return swap                       -    (3,808)          -     (3,808) 
    Foreign exchange forward 
     contracts                              -    (5,609)          -     (5,609) 
   ------------------------------  ----------  ---------  ---------  ---------- 
                                    1,060,103      (719)     95,192   1,154,576 
   ------------------------------  ----------  ---------  ---------  ---------- 
   The table above represents the Group's fair value hierarchy. The 
   Company's fair value hierarchy is identical except for the inclusion 
   of the fair value of the investment in Subsidiaries which at 31 
   March 2021 was GBP43,312,000 (2020: GBP50,429,000). These have 
   been categorised as level 3 in both years. The movement in the 
   year of GBP7,117,000 (2020: GBP13,000) is the change in fair value 
   in the year, which includes a distribution from a subsidiary company 
   of GBP6,435,000 and the release of a corporation tax provision 
   of GBP348,000 in a subsidiary company. The total financial assets 
   at fair value for the Company at 31 March 2021 was GBP1,443,828,000 
   (2020: GBP1,214,422,000). 
   Reconciliation of movements in financial assets categorised as 
   level 3 
   As at 31 March 2021 (unaudited) 
                              31 March                             Appreciation/   31 March 
                                  2020   Purchases       Sales    (Depreciation)       2021 
                               GBP'000     GBP'000     GBP'000           GBP'000    GBP'000 
    Unlisted equity 
     investments                   682           -           -               786      1,468 
   ------------------------  ---------  ----------  ----------  ----------------  --------- 
    Investments properties 
    -Mixed use                  52,623         315       (303)           (4,658)     47,977 
    -Office & Industrial        41,887         150    (10,000)             3,057     35,094 
   ------------------------  ---------  ----------  ----------  ----------------  --------- 
                                94,510         465    (10,303)           (1,601)     83,071 
   ------------------------  ---------  ----------  ----------  ----------------  --------- 
                                95,192         465    (10,303)             (815)     84,539 
   ------------------------  ---------  ----------  ----------  ----------------  --------- 
   All appreciation/(depreciation) as stated above relates to movements 
   in fair value of unlisted equity investments and investment properties 
   held at 31 March 2021. 
   The Group held one unquoted investment at the year end. 
   Transfers between hierarchy levels 
   There were no transfers during the year between any of the levels. 
   Key assumptions used in value in use calculations are explained 
   in the accounting policies in the full Annual Report and Accounts. 
 8     Business segment reporting 
                                                                                           revenue        Gross 
                                                                                          31 March      revenue 
                                                                          31 March 
                    Valuation                    Net appreciation/            2021            2021     31 March 
                     31 March   Net additions/ 
                         2020      (disposals)      (depreciation)     (unaudited)     (unaudited)         2020 
                      GBP'000          GBP'000             GBP'000         GBP'000         GBP'000      GBP'000 
    -------------  ----------  ---------------  ------------------  --------------  --------------  ----------- 
      investments   1,060,103           58,477             197,397       1,315,977          36,403       46,964 
      investments         682                -                 786           1,468             154          148 
      difference        8,698         (26,817)              17,978           (141)           3,320        5,724 
     Total return 
      swap            (3,808)            3,996               (188)               -               -            - 
    -------------  ----------  ---------------  ------------------  --------------  --------------  ----------- 
      segment       1,065,675           35,656             215,973       1,317,304          39,877       52,836 
      segment          94,510          (9,838)             (1,601)          83,071           4,236        5,201 
    -------------  ----------  ---------------  ------------------  --------------  --------------  ----------- 
                    1,160,185           25,818             214,372       1,400,375          44,113       58,037 
    -------------  ----------  ---------------  ------------------  --------------  --------------  ----------- 
    In seeking to achieve its investment objective, the Company invests 
    in the shares and securities of property companies and property 
    related businesses internationally and also in investment property 
    located in the UK. The Company therefore considers that there are 
    two distinct reporting segments, investments and direct property, 
    which are used for evaluating performance and allocation of resources. 
    The Board, which is the principal decision maker, receives information 
    on the two segments on a regular basis. Whilst revenue streams 
    and direct property costs can be attributed to the reporting segments, 
    general administrative expenses cannot be split to allow a profit 
    for each segment to be determined. The assets and gross revenues 
    for each segment are shown above. 
    The property costs included within the Group Statement of Comprehensive 
    Income are GBP1,321,000 (2020: GBP1,984,000) and deducting these 
    costs from the direct property gross revenue above would result 
    in net income of GBP2,915,000 (2020: GBP3,217,000) for the direct 
    property reporting segment. 
 9     Dividends 
        An interim dividend of 5.20p was paid in January 2021. A nal dividend 
        of 9.00p (2020: 8.80p) will be paid on 4 August 2021 to shareholders 
        on the register on 18 June 2021. The shares will be quoted ex-dividend 
        on the 17 June 2021. 
 10    Annual Report and AGM 
        The Annual Report will be posted to shareholders in June 2021 and 
        will be available thereafter from the Company Secretary at the 
        Registered Office, 11 Hanover Street, London, W1S 1QY. 
        The Annual General Meeting of the Company will be held in July 

This announcement and the information contained herein is not for publication, distribution or release in, or into, directly or indirectly, the United States, Canada, Australia or Japan and does not constitute, or form part of, an offer of securities for sale in or into the United States, Canada, Australia or Japan.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless they are registered under the Securities Act or pursuant to an available exemption therefrom. The Company does not intend to register any portion of securities in the United States or to conduct a public offering of the securities in the United States. The Company will not be registered under the U.S. Investment Company Act of 1940, as amended, and investors will not be entitled to the benefits of that Act.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities law of any such jurisdiction.

The contents of this announcement include statements that are, or may be deemed to be "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should". They include the statements regarding the target aggregate dividend. By their nature, forward-looking statements involve risks and uncertainties and readers are cautioned that any such forward-looking statements are not guarantees of future performance. The Company's actual results and performance may differ materially from the impression created by the forward-looking statements. The Company undertakes no obligation to publicly update or revise forward-looking statements, except as may be required by applicable law and regulation (including the Listing Rules). No statement in this announcement is intended to be a profit forecast.

For further information please contact:

Marcus Phayre-Mudge

Fund Manager

TR Property Investment Trust plc

Telephone: 020 7011 4711

Reg Hoare and Florence Mayo


Telephone: 020 3128 8572

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(END) Dow Jones Newswires

May 27, 2021 02:00 ET (06:00 GMT)

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