TR PROPERTY INVESTMENT TRUST PLC ANNUAL REPORT 31-03-2024
Annual Report
31-03-2024
That there will be limitations on what can be achieved but wanting to see a positive direction of travel.
Overview
1 Company Summary
2 Financial Highlights and Performance
3 Historical Performance
Strategic Report
4 Chairman’s Statement
7 Manager’s Report
16 Responsible Investment
23 Portfolio
24 Investment Portfolio by Country
25 Twelve Largest Equity Investments
29 Investment Properties
30 Investment Objective and Benchmark
30 Business Model
31 Strategy and Investment Policies
32 Key Performance Indicators
34 Principal and Emerging Risks
38 Long-term Viability
Governance
41 Directors
43 Managers
44 Report of the Directors
47 Corporate Governance Report
53 Report of the Nomination &
Remuneration Committee
54 Report of the Management
Engagement Committee
56 Report of the Audit Committee
59 Directors’ Remuneration Report
62 Statement of Directors’
Responsibilities in Relation to the
Group Financial Statements
63 Independent Auditor’s Report to
the Members of TR Property
Investment Trust plc
Financial Statements
72 Group Statement of Comprehensive
Income
73 Group and Company Statement of
Changes in Equity
74 Group and Company Balance Sheets
75 Group and Company Cash Flow
Statements
76 Notes to the Financial Statements
Glossary and AIFMD Disclosure
102 Glossary and AIFM Disclosure
Notice of AGM
106 Notice of Annual General Meeting
111 Explanation of Notice of Annual
General Meeting
Shareholder information
114 Directors and Other Information
115 General Shareholder Information
117 Investing in TR Property Investment
Trust plc
The photograph on the front cover is of Isbjerget, known as
“The Iceberg”, a residential building in the Aarhus Docklands
neighbourhood, Denmark.
Annual Report & Accounts 2024 1
Introduction
TR Property Investment Trust plc (the ‘Company’) was
formed in 1905 and has been a dedicated property
investor since 1982. The Company is an Investment
Stock Exchange.
Benchmark
The benchmark is the FTSE EPRA/NAREIT Developed
Europe Capped Net Total Return Index in sterling.
Investment policy
The Company seeks to achieve its objective by
investing in shares and securities of property
companies and property related businesses on an
international basis, although, with a pan-European
benchmark, the majority of the investments will be
located in that geographical area. The Company also
invests in investment property located in the UK only.
Further details of the Investment Policies, the Asset
Allocation Guidelines and policies regarding the use of
gearing are set out in the Strategic Report on page 31
and the entire portfolio is shown on page 24.
Investment manager
Columbia Threadneedle Investment Business Limited
acts as the Company’s alternative investment fund
manager (‘AIFM’) with portfolio management delegated
to Thames River Capital LLP (the ‘Portfolio Manager’ or
the ‘Manager’). Marcus Phayre-Mudge has managed
the portfolio since 1 April 2011 and been part of the
Fund Management team since 1997.
Independent board
The Directors are all independent of the Manager
and meet regularly to consider investment strategy,
to monitor adherence to the stated objective and
investment policies and to review investment
performance. Details of how the Board operates and
fulfils its responsibilities are set out in the Report of the
Directors on page 44.
Performance
The Financial Highlights for the current year are set out
on page 2 and Historical Performance can be found on
page 3. Key Performance Indicators are set out in the
Strategic Report on pages 32 and 33.
Retail investors advised by IFAs
The Company currently conducts its affairs so that
its shares can be recommended by Independent
Financial Advisers (‘IFAs’) in the UK to retail investors
in accordance with the Financial Conduct Authority
(‘FCA’) rules in relation to non-mainstream investment
products and intends to continue to do so. The shares
are excluded from the FCA’s restrictions, which apply
to non-mainstream investment products, because they
are shares in an authorised investment trust company.
Further information
General shareholder information and details of
how to invest in the Company, including investment
through an ISA or savings scheme, can be found on
pages 114 onwards. This information can also be
found on the Company’s website www.trproperty.com
TR Property Investment Trust plc
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
2 TR Property Investment Trust plc
Year ended
31 March
2024
Year ended
31 March
2023 Change
Balance Sheet
Net asset value per share 351.50p 305.13p +15.2%
Shareholders’ funds (£’000) 1,115,503 968,346 +15.2%
Shares in issue at the end of the year (m) 317.4 317.4 0.0%
Net debt
1,6
10.8% 12.3%
Share Price
Share price 325.00p 279.00p +16.5%
Market capitalisation £1,031m £885m +16.5%
Year ended
31 March
2024
Year ended
31 March
2023 Change
Revenue
Revenue earnings per share 12.04p 17.22p -30.1%
Dividends²
Interim dividend per share 5.65p 5.65p 0.0%
Final dividend per share 10.05p 9.85p 2.0%
Total dividend per share 15.70p 15.50p 1.3%
Performance: Assets and Benchmark
Net Asset Value total return
3,6
+21.1% -35.5%
Benchmark total return
6
+15.4% -34.0%
Share price total return
4,6
+22.9% -36.2%
Ongoing Charges
5,6
Including performance fee 1.81% 0.73%
Excluding performance fee 0.82% 0.73%
Excluding performance fee and direct property costs 0.78% 0.67%
1. Net debt is the total value of loan notes, loans (including notional exposure to contracts for difference ('CFDs')) 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 2024. An interim dividend of 5.65p was paid on 11 January 2024 (2023: 5.65p).
Afinal dividend of 10.05p (2023: 9.85p) will be paid on 1 August 2024 to shareholders on the register on 28 June 2024. The shares will be quoted ex-dividend on
27June2024.
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 on page 102.
Financial highlights and performance
Annual Report & Accounts 2024 3
Historical performance
for the year ended 31 March 2024
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Performance for the year:
Total Return (%)
NAV
(A)
22.4 28.3 8.2 8.0 15.5 9.1 -11.5 20.7 21.4 -35.5 21.1
Benchmark
(B)
14.9 23.3 5.4 6.5 10.2 5.6 -14.0 15.9 12.2 -34.0 15.4
Share Price
(C)
37.7 29.5 -1.6 9.1 25.5 6.2 -16.8 28.3 19.9 -36.2 22.9
Shareholdersʼ funds (£ʼm)
Ordinary shares 809 1,010 1,065 1,118 1,256 1,328 1,136 1,326 1,563 968 1,116
Ordinary shares
Net revenue (pence per
share)
Earnings 8.09 8.89 8.36 11.38 13.22 14.58 14.62 12.25 13.69 17.22 12.04
Dividends
(D)
7.45 7.70 8.35 10.50 12.20 13.50 14.00 14.20 14.50 15.50 15.70
NAV per share (pence) 254.94 318.12 335.96 352.42 395.64 418.54 358.11 417.97 492.43 305.13 351.50
Share price (pence) 247.50 310.50 297.50 314.50 382.50 394.00 317.50 392.50 456.50 279.00 325.00
Indices of growth
(rebased at 31 March 2014)
Share price
(E)
100 125 120 127 155 159 128 159 184 113 131
Net Asset Value
(F)
100 125 132 138 155 164 140 164 193 120 138
Benchmark
(G)
100 120 123 128 137 140 117 132 145 93 104
Net dividend
(D)
100 103 112 141 164 181 188 191 195 208 211
RPI
100 101 102 106 109 112 115 117 127 144 150
Figures have been prepared in accordance with UK-adopted international accounting standards.
(A) The NAV Total Return for each 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 at the ex-dividend date as this is the standard methodology used by the Company’s benchmark and other indices. This is considered to be
an Alternative Performance Measure as defined on page 102.
(B) Benchmark Index: the FTSE EPRA/NAREIT Developed Europe Capped Index. Source: Thames River Capital.
(C) The Share Price Total Return is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date. This is considered to be an
Alternative Performance Measure as defined on page 102.
(D) Dividends per share in the year to which their declaration relates and not the year they were paid.
(E) Share prices only. These do not reflect dividends paid.
(F) Capital only values. These do not reflect dividends paid.
(G) Price only value of the index set out in (B) above.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
4 TR Property Investment Trust plc
Chairman’s statement
Market backdrop
Investor behaviour continues to be governed by the
trajectory of bond yields and inflation. This is particularly
acute in leveraged asset classes such as real estate.
Compared to the two previous years, when we witnessed
seemingly relentless incremental increases in base
rates, this period was marked by a more positive shift
in sentiment, as investors began to sense a peak in the
interest rate cycle. Nevertheless, our manager had to
navigate a series of false dawns as markets rallied on
expectations of more dovish central bank behaviour
– before this more buoyant mood was proved to be
premature. Whilst the second half of the year under
review saw much greater volatility in share prices, we
also sense increasing engagement from investors in
our corner of the equity market, as the weakening of
inflationary pressures becomes increasingly evident –
particularly across Europe.
Given all that has happened in the last year, I am pleased
to report the Company’s net asset value (‘NAV’) total
return was +21.1%, ahead of the benchmark total return
of +15.4%. Of greater importance to shareholders is the
share price total return. This, at +22.9%, exceeded the
NAV total return given that the discount at which the
shares traded was tighter at the end of the year than
at the beginning. These encouraging results reflect a
strong second half of the financial year, with the first
half recording an NAV total return of just +3.3%. In the
half year report I highlighted that the vast majority of
our companies had made great strides to improve
their balance sheets and debt books over the last
two years. This was always going to be a key building
block in the sector’s recovery. We have subsequently
seen a strong reporting season (February and March
2024) as improving market fundamentals overlaid on
strengthened balance sheets resulted in healthy earnings
growth. Those companies which suspended dividends
to protect their cashflows have nearly all returned (or
announced the return) to paying dividends. There remain
a handful of businesses in financial intensive care, but
our manager continues to avoid these, even where
sentiment and rumour can lead to dramatic (but often
temporary) share price performance.
Our sector continues to see heightened levels of merger
and acquisition ('M&A') activity. Our involvement in three
successful transactions (two privatisations and one
merger) took place in the first half and were reviewed
in the half year report. They were important valuation
underpins. The second half of the year saw a lot of
activity around more potential mergers. In the case of
the all paper offer by Tritax Big Box for UK Commercial
Property REIT ('UKCM'), our manager voted against the
transaction on governance issues.
We are pleased to announce a
modest increase in our dividend.
There is no denying that
commercial real estate became
unfashionable when interest rates
began to rise. But as TR Property’s
renewed outperformance
shows, investors are beginning
to differentiate between the
less desirable elements of the
sector and the companies that
our Manager seeks out — that is,
companies that own quality assets
and have strong balance sheets.
Kate Bolsover
CHAIRMAN
Annual Report & Accounts 2024 5
Mar-23Mar-22Mar-21Mar-20Mar-19Mar-18Mar-17Mar-16Mar-15Mar-14
Benchmark Total Return
TR Property Share Price Total Return TR Property Net Asset Value Total Return
Mar-24
0
50
100
150
200
250
300
350
400
Ordinary Share Class Performance: Total Return over 10 years (rebased)
Revenue Results Outlook and Dividend
For the full year, earnings at 12.04p were just over
30% lower than the earnings recorded for the previous
financial year. A fall in earnings for the year to March
2024 was flagged in the 2023 Annual Report. Interim
earnings were 39% behind the prior year and whilst our
expectations for the second half were slightly exceeded,
the pattern did not change.
Whilst the prior year had been inflated by a number of
one-off items (all highlighted in the previous annual
report), the mix of dividend suspensions and reductions
across our German residential, and to a lesser extent,
Scandinavian holdings, has hit the income account
hard. In addition, rising interest rates increased our
own debt costs, despite the reduction in the absolute
amount of debt. Added to these income headwinds, we
also experienced an increase in the headline rate of UK
corporation tax.
Over the year, significant progress has been made by
those companies which had suspended or reduced
dividends. Their balance sheets have strengthened
through cash retention, asset sales and debt
restructuring, with many announcing that they will
resume distributions at some stage in the forthcoming
year. Although their actions have been detrimental to
our revenue account in the short term, their decisive
and conservative action has been reflected positively in
capital returns. Some will be a little slower than others
to resume distributions, a handful still have to announce
when their distributions will recommence.
We anticipate that underlying income will take some
time to recover but with strong revenue reserves built
up, the Board is able to support the Company’s dividend.
In determining our dividend, we always aim to balance
investor appetite for income against the Company’s
cashflow in a given period. This approach entails the
building up of reserves during fruitful years, allowing us
to cover the dividend during dips in income. Against this
background, we are pleased to announce a very modest
increase in the final dividend to 10.05p, bringing the full
year dividend to 15.70p, an increase of 1.3%.
Net Debt and Currencies
Gearing reduced in the second half and ended the year at
10.8%. The cost of our debt remains higher than for some
time and the reduction seen at the year-end is more a
reflection of this, than on the manager’s outlook.
Sterling staged a couple of rallies through the year, over
the summer period and then again in the first quarter
of 2024. This had a small negative impact on our non-
sterling earnings.
Discount and Share Repurchases
The discount improved by more than 1% over the year,
closing at 7.5% (opening at 8.6%) enhancing the share
price return over the NAV return for the year. The average
discount for the year was 7.7%. A discount of over 10%
was seen very briefly in July and again in October, when
market sentiment was at its worst. It narrowed to 2.6% in
late February as investors began to feel optimistic about
an early interest rate cut. However, this proved premature
and the Company’s discount widened again into the year
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
6 TR Property Investment Trust plc
Chairman’s statement
continued
end. The average discount for the year remained wider
than the five year average (5.8%) which is not particularly
surprising as for the most part, the sector remained
unloved.
Environmental, Social and Governance
Our Responsible Investment Report is set out on
pages16 to 22. With the impending changes in
disclosure regarding sustainability (SDR), we have
worked with our manager to consider how best to set out
our credentials and priorities in this area.
The Company has not set out to be an investment fund
with any ESG or sustainability characteristics, however,
as a long-term investor, governance and sustainability
considerations are embedded in our Manager’s
investment process. Accordingly, we will continue to put
strong corporate governance at the heart of our decision-
making process. Many of the environmental targets
which our investee companies follow are being driven by
their regulatory framework and we expect our companies
wholeheartedly to embrace these improvements through
refurbishment and development. We also endeavour to
"practice what we preach" in our direct property holdings,
where we exercise direct control over these issues.
Property is of course a socially important investment
area. People live, work, and play in the properties which
we or our investee companies manage and own. This
means that we are adding value and engaging with all of
society in all that we do.
Our Managers actively engage with management and
regulators on matters of corporate governance and
there is one recent situation highlighted below which
demonstrates this. We consider this one of our key
responsibilities in managing the assets which you have
invested with us.
Our manager closely followed the all paper takeover of
UKCM by Tritax Big Box. The Company owns shares in
both companies. Throughout the process, he remained
concerned about poor governance and the lack of
transparency on certain commercial aspects of the
transaction. He was not alone. The chairman of UKCM
also dissented from recommending the transaction.
A most unusual and noteworthy situation. Whilst the
dominance of one shareholder (Phoenix Life owned 43%
Kate Bolsover
Chairman
7 June 2024
of UKCM) ultimately drove the transaction, we engaged
extensively with all parties including the Takeover Panel
before voting against. The Company has large positions
in many smaller property companies and our manager
engages extensively with boards. Holding boards to
account, as guardians of the interests of all shareholders,
is an important part of our governance regime.
Outlook
Our manager’s central case is that we are now closer
(than in previous reports) to the peak of this interest rate
cycle in Europe. The multiple ‘false dawns’ (where shares
prices rallied in anticipation of interest rate cuts, only to
fall back) have weighed on sentiment and many investors
remain on the sidelines awaiting hard evidence of base
rates falling. Also importantly, the manager’s positive
viewpoint is not predicated on substantial reductions
in interest rates. What is being looked for is stability in
the monetary environment with lenders returning and
margins normalising.
You will read in the manager’s report of sound
fundamentals in many real estate sub sectors particularly
for high quality assets. I reiterate, the companies we
are invested in have those two key ingredients – quality
of assets and depth of balance sheet. The sector
continues to trade at attractive discounts to asset value
and the year in question brought more examples of
good portfolios being taken private as public markets
continued to undervalue them – again, covered in more
detail in the following pages.
We expect the reduction in our physical property
exposure to be temporary. The timing of the rotation of
the capital released by the March sale of the Colonnades
into equities has proved beneficial. Equity markets are a
forward looking discounting mechanism and property
share prices have responded to the expectation of a
lowering in the cost of capital.
The team continues to hunt for the next property
purchase. In the meantime, the outlook for well financed
property equities remains encouraging.
Annual Report & Accounts 2024 7
Manager’s report
Performance
The Company’s net asset value (‘NAV’) total return for
the 12 months to 31 March 2024 was +21.1%, whilst the
benchmark, the FTSE EPRA/NAREIT Developed Europe
TR (in GBP) returned +15.4%. These are pleasing results
– both in absolute terms and relative to the benchmark.
The chart overleaf illustrates three clear phases of
market performance over the year under review. The
first phase (April to October) saw pan European real
estate equities travelling in a tight (12%) trading range;
the market behaviour analogy is that of a ping pong ball
in a horizontal tube. Equity pricing remains dominated
by macroeconomic considerations and more expressly,
the outlook for base rates, the shape of the interest rate
curve and bond market yields. Over this first phase, we
saw bulls and bears evenly matched. In late October, the
outlook changed in response to central bankers’ more
positive comments about the success of monetary policy
tightening and the deceleration of inflation. Markets
began to price in an expectation of a large number
of base rate cuts and this supercharged our sector.
Between 27 October and the end of the calendar year,
our benchmark gained 31%. This illustrated not only how
far investors view our sector as a play on interest rates
but also how ‘under-owned’ the sector was. As investors
returned from the Christmas break, expectations about
the speed of base rate cuts began to weaken. The
number of anticipated cuts reduced and the expected
commencement date drifted out of the short term. This
led to a correction of over 12% between the beginning of
January and the end of February. As we headed into the
last month of the financial year, the dovish commentary
from the central banks was reiterated. We saw the first
interest rate cut from the Swiss National Bank whilst
the Bank of England laid the groundwork for potential
cuts, given the inflation data. Meanwhile, the ECB also
highlighted the month-on-month slowing of inflation,
helped by lower energy costs.
Though the financial year ended positively, it is
abundantly clear that the performance of real estate
equities remains – at least in the short term – heavily
dependent on interest rate expectations. The renewed
bout of nervousness (around the path of interest rate
reductions) in January and February reminds us of the
sector’s sensitivity. However, and quite crucially, the
underlying market fundamentals in so many of our sub-
sectors are positive and the rest of this report will focus
on why we look to the future with confidence.
Our central case is that more
benign European inflation is
drawing closer. But crucially, our
optimism is not dependent on
near-term cuts to interest rates.
The companies we own are
positioned to prosper even if rates
remain at current levels and the
spike in M&A activity this past year
is recognition of this. Acquirers
have rushed in to take advantage
where public markets have left
quality assets languishing at
significant discounts.
Marcus Phayre-Mudge
FUND MANAGER
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
8 TR Property Investment Trust plc
If investors focus solely on the macro then they will
undoubtably miss out on the micro. Where market
fundamentals are sound (i.e. rental growth is in evidence)
we have seen value appearing in a large number of well-
financed companies, particularly where share prices
trade at deep discounts to asset values. We were not
alone in seeing such opportunities and the year under
review saw a large amount of M&A activity, particularly
in the UK. The new financial year was only just underway
when on 3 April 2023, Industrials REIT announced that
it had received a cash offer from Blackstone at a 40%
premium to the previous closing price. Importantly, this
was also a 17% premium to the last published NAV. The
Company was the largest shareholder (11.2% of the
issued capital) and we had been long term supporters of
the management team and their strategy. They had been
at the forefront of bringing property management into the
digital era. It is a textbook example of where the value-
adding skills are not priced correctly by public markets.
The sale was bittersweet: whilst the positive impact on
the Company’s valuation was welcome, it meant the
loss of a well-run business, exposed to one of our most
favoured sub-sectors -multi let industrial.
Alongside the sale of Industrials REIT to Blackstone, we
saw another US behemoth, this time a $36bn market
cap REIT, Realty Income, acquire all of Ediston Property’s
assets for cash. Ediston had switched from being a
diversified investor to one focused entirely on retail
warehousing. Alongside multi-let industrial and wider
logistics property we are positive about value growth in
this sector, hence our exposure. We had steadily built
the position and owned over 16% of the company at
the date of the announcement. This is another example
of undervaluation by European public markets, with
a more highly rated US REIT able to take advantage.
Realty Income is valued on an earnings basis rather
than a discount/premium to asset value – and it has
successfully raised equity on multiple occasions to take
advantage of depressed asset prices.
The next deal of note was a little different, with
LondonMetric Property (market cap £4bn) using its
more highly rated paper to acquire CT Property Trust
('CTPT'). We owned 10% of CTPT and have been a
longstanding investor in LondonMetric so we were happy
to support the deal which also saw a 25% gain in the
CTPT share price on the announcement. Given this was
an all-paper acquisition, this gain reflected the difference
in the valuation of the respective companies. As we
have seen on so many occasions, small companies
continue to suffer wider discounting. I have written many
times on the need for amalgamation and it remains a
pressing requirement amongst our smaller companies.
Ironically the latest tie-up to complete was not between
two small caps but between two of the larger names,
LondonMetric and LXI REIT. LXI was an externally
managed REIT specialising in long income assets and
itself was the product of the merger with Secure Income
REIT in 2022. Like LondonMetric’s deal for CTPT, this
was also an all paper ‘NAV for NAV’ deal but with some
adjustments to reflect the cancellation of an egregiously
long management contract term for LXI (five years
which resulted in a break payment of £30m to AlTi, the
departing manager). LondonMetric, our 5th largest
holding, has performed well through both these mergers
and with a market cap close to £4bn is now larger than
British Land (where the former’s CEO cut his teeth
20years earlier).
Manager’s report
continued
Dec-23 Jan-24 Feb-24 Mar-24Nov-23Oct-23Sep-23Aug-23Jul-23Jun-23May-23Apr-23Mar-23
-10%
-5%
0%
5%
10%
15%
20%
25%
FTSE EPRA/NAREIT Developed Europe Capped Total Return Net GBP
Benchmark Performance
Annual Report & Accounts 2024 9
Not all the year’s corporate activity followed the expected
path. An agreed merger between two small companies
we did not own, Custodian REIT (market cap £330m)
and Aberdeen Property Income (£185m), failed to get
the necessary shareholder support. We think this is a
shame as the alternative – a managed sale of the assets
– rarely produces a satisfactory outcome, due to the time
taken and the price achieved for a given portfolio’s ‘tail’ of
weakest assets.
Meanwhile, the recently completed takeover of UKCM
by Tritax Big Box has been flagged in the Chairman’s
Statement and is further reviewed under the Responsible
Investment section of this report. The all-paper offer
valued UKCM at a 12% discount to its last published
NAV based on the respective share prices at the
date of conversion. Given the quality of the assets
and the very attractive debt book (LTV of 25%, 3.2%
fixed price debt) we remain disappointed that a more
comprehensive strategic review and marketing exercise
was not undertaken, given the last published NAV of
78.7p. However, our average UKCM entry price of 57.5p
(purchases between August 2023 and January 2024) and
the share price of 72.0p on 2 May (the EGM date) offers
some comfort, in that it shows our prediction of M&A
activity involving this company was correct.
Performance Attribution
Reviewing our performance attribution, it is no surprise
that our exposure to much of this M&A activity was a
key contributor to performance. Whilst the Industrials
REIT transaction was the largest driver of relative
performance, our general overweight to this sector was
also key. Our exposure to a number of logistics focused
names, particularly the more fleet of foot smaller
Continental European names such as Argan (total return
+26.4%) and Catena (total return +39.2%) which have
significant, value-adding development pipelines relative
to their size. Our overweight's towards European retail,
such as Klepierre, were also important contributors. We
remain positive about businesses with high earnings if
we feel confident about the sustainability of that revenue.
In the UK the performance of the diversified group (which
includes LondonMetric and LXI) saw returns driven by
these two names (now amalgamated). This group also
included Regional REIT, not a stock which the Company
has ever held, which was the poorest performer (total
return -54.5%) across our universe. A poster child for
too much leverage in a sector facing huge challenges
(regional offices) and an imminent debt maturity which
will result in some form of comprehensive refinancing.
Given the general negativity towards offices, it may come
as a surprise that amongst our top 10 performers was
Sirius (total return 35.3%) which owns business space in
Germany and the UK. It is a good example of investors
staying loyal to a stock if management can show robust
earnings and a path to growth. In this case strong
capital recycling and generative acquisitions continue
to drive returns. Similar to Industrials REIT, we think
this is another case of asset management skills being
undervalued by the market.
In the residential space, it was very much a case of one
step forward and one step back from a relative valuation
perspective. This highly interest rate sensitive sector
had a terrible 2022 and first half of 2023 but enjoyed
periods of strong returns thereafter, particularly the
last quarter of the calendar year. In Scandinavia, our
positioning was correct, owning Balder in Sweden (total
return +85.1%) and not owning Kojamo in Finland (total
return +1.2%). The bulk of the listed residential focused
companies are still German. Whilst our largest absolute
position, Vonovia, produced a total return of +65.7% we
were generally at benchmark weight or slightly under.
Large caps, such as Vonovia, are very much viewed as
bund proxies and the much anticipated, potential rate
cuts drove share prices upwards, particularly in the
last quarter of the calendar year. However, our largest
relative position was Phoenix Spree Deutschland, a
micro-cap (market cap £133m) which produced a very
disappointing -18.6% total return and entirely missed
the rate driven rally. Berlin apartments are an attractive
long-term store of value given the supply/demand
disequilibrium. Ironically where these apartments have
the right to be sold on a long leasehold basis (as opposed
to short letting on a regulated rent basis) they are more
valuable empty than let; 75% of Phoenix’s portfolio has
this valuable permit. This offers a crucial long-term
valuation underpin. Phoenix’s board have highlighted a
reinvigorated sales process and we expect the company
to continue to reduce its leverage through sales. It is
externally managed and the contract has a continuation
vote in July 2025. Management is therefore fully
incentivised todeliver.
Healthcare was the largest sector underweight, both in
Europe and the UK. The former is dominated by elderly
care where a number of operators have experienced
financial difficulties. In the UK, the largest names are in
the primary care sector and here the issue is not one of
covenant risk (the tenant is directly or indirectly the NHS)
but the lack of rental growth. Assura delivered a total
return of -6.8% and PHP slightly better at -0.5%.
Offices remain the most challenging sector and there is
more detail later in the report. We had no exposure to the
London developers (Derwent London, GPE and Helical)
which all produced negative returns in the year. We
preferred Workspace (total return 23.7%) which provides
serviced offices and workspace across the capital and,
following the 2021 acquisition of McKay Securities,
further into the South East. The majority of our office
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
10 TR Property Investment Trust plc
Manager’s report
continued
exposure is to European cities particularly Paris (through
Gecina), Madrid (through Arima) and Malmo/Gothenburg
(through Wihlborgs). Paris CBD continues to benefit from
a shortage of prime office space with lower levels of
remote working than London. As I have commented on
previously, smaller cities with shorter average commute
times, have experienced much higher levels of office
occupancy and this is reflected in rent stability. Arima
(market cap €176m) develops and refurbishes prime
offices in the Madrid CBD and has had a successful
year in both selling (8% of the portfolio) and leasing (the
largest refurbishment). However, the size of the company
means that it is too small for institutional ownership. The
total return of -21.4% made it our worst performer over
the period. Arima has a modest buyback programme
which it will need to accelerate or face shareholder
activism. The shares trade at a 40% discount to the last
published NAV.
Offices
Sentiment towards the office sector remains extremely
negative. The subsector is caught in a perfect storm
of weakening occupancy fundamentals (with the true
impact of ‘working from home’ still filtering through many
markets) and growing capital expenditure requirements
(to meet the needs of an increasingly demanding
occupier base and green agenda). Low transaction
volumes had hampered pricing visibility which
compounds the issue, as investors struggled to envisage
the valuation inflection point.
Dramatically increased construction costs alongside an
unstable rate outlook have resulted in both development
and standing assets in the sector being viewed as simply
uninvestable by large parts of the international investor
base. The largest cohort of global real estate investors
originate in the US and their home market has been
particularly badly hit. Cushman & Wakefield reported that
the vacancy rate in Manhattan hit an extraordinarily high
23% in March 2024.
Our view on European offices is more sanguine, though
a level of pessimism is certainly warranted. Savills
estimates that average vacancy across Europe is
c.8.4% (+60bp year-on-year). Whilst all London office
markets collectively report c.9% vacancy, averages are
a dangerous metric, with large variations across the
capital. The listed players are much more exposed to
the West End where vacancies are c.4% than the City at
c.12% and have little or no exposure to Docklands where
vacancy has hit 17%.
Rental growth, which might be assumed to be weakening
dramatically given softening occupier demand, has also
in fact remained remarkably robust, as demonstrated
by Great Portland Estate’s (GPE’s) upgrade of its prime
office ERV guidance at its September 2023 interim
results from a range of +3-6% to an increased top end
of +3-8%. We put this unusual phenomenon down to
the ongoing bifurcation in the sector – the growing
separation between “the best and the rest”. We are
therefore selectively overweight certain office names,
such as Gecina, where we believe the company has best
in class assets and is exposed to strong submarkets.
Given the wider risks to the sector this is not, however,
enough to make a compelling equity case on its own;
Gecina’s balance sheet is also solid, while the outlook
for its earnings is strong given indexation and reversion
capture to come. Without these elements, and absent
other catalysts, we struggle to see how some office
players will close their discounts, which explains
our underweights in Stockholm offices (at its fourth
quarter 2023 results Fabege demonstrated negative
lease renegotiations of -3%) and London offices. GPE’s
earnings are set to drop dramatically in the coming years
as debt refinanced at market rates wipes out underlying
rental growth.
In certain places we believe overly-bearish views of
offices has led to mis-pricing and created opportunities,
however these are rare. In each instance they require the
wider equity case to have other attractive features. Once
such stock is Picton where we believe the market’s focus
on its offices (29% of the portfolio) has led to the shares
being materially oversold (c.30% discount to net tangible
assets). Given our comfort with the very high quality of
the remainder of the portfolio (59% industrial), the strong
balance sheet (28% LTV with no near term refinancing
needs) and management actions to extract maximum
value from its offices (such as the sale of Angel Gate for
£30m after securing residential planning consents on
the asset) we believe it is only a matter of time before the
market realises the attractions of the stock.
Retail
The difference in investor sentiment between offices and
retail continues to feed through the IPD/MSCI data. For
the 12 months to March 2024, London offices fell 13.5%
and Inner South East fell 20.7%. UK wide retail was down
just 6.8% with shopping centres just 4.7% similar to retail
warehousing at 4.9%. Essentially, rental values in retail
property have broadly completed their rebasing. Tenants
have right-sized their portfolios for an omni-channel
engagement with customers; and fewer (generally
larger) stores but also an understanding that the physical
presence is very much part of the customer experience.
Convenience remains critical for the consumer (‘time
is money’) and the easy-to-access edge of town retail
parks and shopping centres are seeing improving footfall
data. They are beginning to show rental resilience and
yield stabilisation. UK shopping centres collectively saw
Annual Report & Accounts 2024 11
a positive total return of +4.2%. The last time we saw a
positive capital return from this sub-sector was 2015.
Whilst we have modest exposure to retail in the UK
(following the sale of Ediston to Realty Income), we do
have considerable exposure in Europe through Klepierre
and Eurocommercial. These businesses offer not only
high levels of occupancy but crucially stable occupancy
cost ratios which combines all the tenant’s overheads
(rent, rates and service charge). Controlling an inflating
service charge has been particularly difficult in the last
year or so and these companies have done a good job at
maintaining affordability for their tenants.
In the half year report I referenced outlet malls as a
sub-sector seeing strong recovery and this has been
illustrated by Hammerson’s receipts from Bicester Village
and its European malls where it owns minority positions
in a complex ownership structure. The company has
identified these assets as non-core but with only
partial ownership its hard to see who the buyer will be.
Elsewhere, owners such as Landsec at Gunwharf Quays
(Portsmouth) have enjoyed robust sales growth. Despite
the recent increases in the cost of living, UK retail sales
(year on year to February 2024) have shown modest
growth with grocery the top performer (4.4% annualised).
Wage inflation has helped underpin consumer
confidence, alongside job growth and stubbornly high
numbers of job vacancies providing security to workers.
Industrial/Logistics
UK take up in 2023 was 21m sq ft, 36% lower than the
record year of 2022. Whilst this looks worrying, it is still
above the pre-pandemic trendline (2013-2019). Grade
A availability in big box logistics is 30% higher than a
year ago at 36m sq ft, pushing vacancy up to 7.1%.
Encouragingly the fourth quarter of 2023 was the busiest
quarter of the year. As always, the devil is in the detail
with some markets in a better position than others: East
Midlands, for example, has only 12 months’ supply. This
increase in vacancy has slowed rental growth. It remains
healthy at 7.8% but is less than half the pandemic (2021)
spike of 17.8%. Large regional variations persist with
London recorded just 3% rental growth as the very high
absolute rents point to an affordability ceiling.
According to JLL, Continental European take-up in 2023
was 24.5m sq metres, 26% down on the previous year
and below the records of 2021/2. However, it is still
the fourth highest volume on record and greater than
the average across 2016-2019. The conclusion we
have drawn is that the structural tailwinds (highlighted
in many previous reports) are still supportive, but the
supercharged pandemic induced period has reverted
to more normal growth. Manufacturing driven take-up
remains very robust as businesses continue to de-risk
their global supply chains through diversification of
sources and near-shoring. Vacancy has crept up to 4%
from the 2.9% record low recorded in Q2 2022 but this
figure remains a healthy one ensuring rental growth
continues. Weighted European average prime rental
softened to 7.8% in 2023, well below the record in 2022
but still above the 5.9% average (2018-2022). In addition,
70% of the existing stock is more than 10 years old and
unlikely to comply with energy performance and ESG
standards. This offers more opportunity for developers.
The sector continues to be the top of investors’ buy lists
but given the rental growth outlook, yields remain below
the cost of borrowing. The rapid rise in interest rates
has cooled demand and whilst turnover was a healthy
€26.3bn it was down 40% on the previous year. The
Nordics and Spain saw volumes decline significantly
whilst Germany, somewhat surprisingly was a bright spot
equalling the 2018-2022 average.
We remain confident that the adjustment to sellers’
expectation is well underway as transaction volumes fall.
Given the positive underlying market outlook we expect
buyers to view those price adjustments as entry points
rather than expecting the knife to drop further. At 4.9%
the average European prime logistics yield has returned
to late 2017 yield, an attractive entry point in our view.
Residential
Unlike the rest of Europe, the UK (ex Scotland) and
Finland have no residential rent controls. This has led to
dramatic rental increases particularly in locations with
acute supply shortages. Both the ‘build to rent’ UK listed
companies, Grainger (multi family housing) and PRS
REIT (single family housing) have seen like-for-like rental
growth of 8% and 11% respectively. Private landlords
are discouraged through the loss of tax breaks, high
regulation and stiffer eviction criteria. In addition, tenants
prefer the certainty of an institutional/corporate landlord.
Interesting analysis from Savills and Experian highlights
that tenants will relocate further from their previous
accommodation if moving into new ‘build-to-rent’ ('BTR')
as opposed to another privately owned home.
Between 2011 and 2019, BTR investment averaged
£2.5bn per annum. Since 2019 this has steadily
increased and reached £4.5bn in 2022 and 2023. The
total UK BTR stock is now over 100,000 units built with
another 165,000 in construction or planning. This total of
265,000 has been growing at 4% per quarter for several
years. However, that rate of growth is rapidly diminishing
with a dramatic reduction (31%) in the detailed planning
application stage versus a year ago.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
12 TR Property Investment Trust plc
Manager’s report
continued
Helsinki has been a textbook case of over development
in one market. Lessons for investors can be observed,
particularly for smaller regional cities (on a par with
Helsinki) where BTR is focused on flats rather than
suburban family housing. Temporary market saturation
will occur.
In the remainder of Europe, we continue to see various
forms of rent restrictions (Germany being the most
draconian) which leads to disequilibrium driven by
under development. With build costs mounting and
rental increases based on historic inflation, returns
from development remain less than appetising. Whilst
regulated rents are an intended social good, they
inexorably lead to their own inequality with long waiting
lists and inefficient use of accommodation, with many
under occupied units. Our own assessment of the value
of Phoenix Spree’s portfolio highlights the value-add
opportunity of selling vacant apartments. Our investment
thesis is also supported by the 6% increase in regulated
rents.
Alternatives
The largest constituents of this group in our listed
universe are purpose built student accommodation
('PBSA'), self storage and healthcare (generally split
into primary and elderly/nursing). Over the last year,
the clear winner was PBSA, followed by self storage
and then healthcare. PBSA continues to benefit from
growth, both domestic and foreign. The demographic dip
(fewer students turning 18 years old) has now passed.
Unite (the largest listed provider in Europe) reaffirmed
their guidance of 7% rental growth for this year. We
participated in their offensive capital raise in July. A large
amount of PBSA is owned by private equity firms such as
Blackstone and Brookfield. We would expect these types
of investors to consider public markets as a potential exit
route for their PBSA portfolios.
Self storage has had a poorer period of performance.
Essentially the post pandemic slowdown on both
occupancy and rate growth has materialised. Whilst
this was foreseen (the pandemic rates of growth were
unsustainable) and we reduced exposure (we owned
Safestore but not Big Yellow or Shurgard in the year) the
negative share price response has been greater than
expected as the cost of living and inflationary pressures
added to reduction in (discretionary) spend in this sector.
The more positive point was that we were underweight
the group relative to the benchmark. Last month, the
UK’s Self Storage Association (together with Cushman &
Wakefield) reported a sector revenue milestone of +£1bn,
however occupancy was at 77%, the lowest since 2019.
The poorest performer was healthcare. I have
commented on this area earlier in the report, but the
figures are quite stark particularly for the Continental
European companies which have suffered from concerns
around operator affordability and oversupply of beds in
some submarkets. Ironically, whilst the listed companies
have suffered poor returns given these operational
headwinds coupled with balance sheet issues, the
asset class has enjoyed high levels of investor interest
as prices have corrected. Investors with longer time
horizons see the demographic opportunity (e.g. the
Netherlands will see the retired population increase by
25% by 2032). It is an important sector. The European
care home market was worth €115bn in 2022 with
40% in the private sector. Highly fragmented, it offers
higher yields than traditional residential or PBSA due to
regulation and operator risk through thinner margins.
Private equity backed operators dominate (half of the ten
largest providers are private equity owned) and this has
led to affordability issues where operators have taken on
more debt whilst margins have been squeezed through
higher wage bills.
Debt and Equity Markets
Unsurprisingly, debt and equity markets remained
subdued throughout the year as margins continued to
widen. EPRA analysis highlights the dramatic change
in volume and pricing. In 2021, total debt issuance by
pan European listed property companies was €20.9bn
at a weighted coupon of 1.1%. In 2023, the volume had
dropped to €6.7bn and the average rate was 5.1%. The
better news is that across all real estate listed bonds only
10% require renewing in the next 12 months.
It is important to note that these figures relate to new
debt issuance. There has of course been a large amount
of restructuring, extending and renegotiation, often
leading to borrower protection through caps and swaps.
Equity raisings have also been few and far between: just
€3.3bn in the first nine months of the financial year. This
was followed by an encouraging acceleration in Q1 2024
with €1.4bn. All the accelerated book builds ('ABB') were
in businesses trading close (or at a premium) to NAV
and were focused on just three sectors. In the logistics/
industrial space it was Catena and Sagax in Sweden,
Montea and WDP in Belgium, and Segro in the UK. At
£900m (upscaled from the original £800m) the Segro
raise was the largest ABB in listed property company
history and the market took the raise very positively.
Self storage, with raises from Shurgard and Big Yellow,
totalled £400m and post the year end brought news
that Shurgard had made an unexpected cash bid for Lok
n’Store (market cap £370m). The final sector trading
at a premium is PBSA and Unite raised £300m at a 2%
discount to build out its development pipeline.
In addition, there were a number of discounted rights
issues which were in most cases driven by a need to
restructure the balance sheet. Much of this work took
Annual Report & Accounts 2024 13
place in 2022 and the first quarter of 2023, so in the
prior financial year. Sweden, as previously reported, has
suffered greatly from too much leverage, particularly
short duration debt. Most of these companies have had
to suspend dividends and in some instances also raise
capital to shore up their balance sheets. Castellum is
one such culprit and had to carry out a SEK10 bn, deeply
discounted, raise. I have already mentioned the problems
that European healthcare is facing and it was the largest
player Aedifica – whose share price had fallen from
€100per share in August 2022 to €60 per share by June
2023 – that also carried out a deeply discounted capital
raise at an ex-rights price of €52 per share.
Investment Activity – property shares
Portfolio turnover (purchases and sales divided by two)
totalled £460m in the year, in line with the previous year
in absolute terms (£477m). With average net assets over
the year of £1.0bn, turnover was 45% of net assets, higher
than the previous year’s figure of 40%. This was a function
volatility in the year, the high level of M&A activity (where
whole positions were liquidated) and the significant
amount of capital raised by companies weown.
I commented at the half year that when comparing
our 10 largest overweight and underweight positions
(versus their respective positions in the benchmark)
15 out of 20 stocks were the same at the end of each
reporting period. In addition, two of the others were
Industrials REIT and Ediston which were taken private
for cash. Given that our sector traded in a tight (12%
peak to trough and back again) range between April and
October it is little surprise that I did not reposition the
portfolio aggressively. Stocks were not being rewarded
for their fundamental positioning for rental growth or
development opportunities. Instead, it was all about the
direction of macro economics and more particularly
interest rates. The one area, in the first half of the year,
where we did make significant changes was Sweden.
With stressed balance sheets this group of stocks had
suffered badly in both the first and second quarter 2023
correction. From the February peak to June low point,
the Swedish component of the benchmark had fallen
33%. We participated in the Castellum deeply discounted
capital raise as well as adding to Sagax (diversified but
with a focus on industrial), Pandox (hotels) and Catena
(logistics). In the last quarter of 2023, as the market got
behind the expectation of more interest rate cuts than
previously forecast, we doubled our holding to the most
interest sensitive name, Balder. We continue to avoid
others that have impaired financial structures, such as
SBB andCorem.
Alongside buying back into the more interest rate
sensitive names in Sweden, we also added to some of
our German residential names. Again, this sub group
has a very high correlation to bond yields. Whilst we
have a large position in Phoenix Spree Deutschland,
this tiny company (market cap £134m) is too small to
attract investors who are playing the change in the shape
of the bund curve. As a result, we need to own larger
names such as Vonovia to capture that sensitivity, hence
maintaining the name as our largest absolute position.
I also highlighted in the half year report our continued
increase in exposure to European shopping centres
where our longstanding positions in Klepierre and
Eurocommercial were augmented by buying Unibail.
This subsector offers high earnings yields and diversified
income streams operating in multiple European markets
and in dominant locations.
Whilst our industrial exposure dropped with the sale
of Industrials REIT, I continued to add to Argan, our
preferred French logistics names. It is an illiquid name
given that the founding family owns half the equity.
Back in March 2023 the stock entered the FTSE EPRA
Nareit Europe Index and we sold 50% of our position
into that liquidity event. In the first half of the year, we
slowly reacquired the stock at 10-15% lower prices.
This process continued in the second half and the
position has doubled over the year. Elsewhere we added
substantially to three other small industrial / logistics
names: Catena in Sweden (tripled exposure), Montea
(75% increase) and Tritax Eurobox (doubled exposure).
In the latter case, the investment thesis is different to
the others. Eurobox is an externally managed portfolio
of disparate logistics assets across Europe. The balance
sheet is stretched but there are buyers for the individual
assets. This should be a portfolio break up and is a very
different proposition to our other positions which are
much stronger entities with articulated growth paths.
We aim to support the growth of all our companies but
occasionally there are sound reasons to drive share price
returns through M&A activity.
Within the office sector, as highlighted earlier we remain
very nervous, particularly with the London developer
names. We sold down most of the GPE position in the
first half and in the fourth quarter rally, we completed the
sale of the remainder alongside our holdings in Derwent
London and Helical. Workspace remains the only pure
office play and other prime London office exposure is
through Landsec. The evolution of serviced and managed
office space, where tenants outsource all (or most) of
their occupational requirements, is certainly the market
direction. Workspace is essentially a service provider and
we are pleased with the announcement of a new CEO.
In Europe, we have focused on the best quality assets
through Gecina (Paris) and Arima (Madrid) alongside
smaller cities such as Wihlborgs (Malmo). Alongside
Workspace, the flexible office provider we maintained our
holding in is Sirius, which owns regional business space
in Germany and the UK.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
14 TR Property Investment Trust plc
Manager’s report
continued
The reduction in self storage exposure has already been
covered. The reduction in European healthcare exposure
was driven by perceived operator risk. In the UK, our
concerns were not covenant focused as Assura and PHP
are directly or indirectly funded by the NHS. The concern
was the low level of topline growth with the Valuation
Office (essentially the Government’s rent negotiator)
digging in its heels and holding rental growth below
inflation, hence the reduction in our Assura position.
Physical Property Portfolio
The physical property portfolio produced a total return
of -0.7% made up of an income return of +4.9% and a
capital return of -5.6%. This compares to the total return
from the MSCI Monthly physical property index of +0.8%
and a capital return of -5.5%.
It was a busy year in the physical property portfolio
with the sale of the commercial part of the Colonnades
for £33.5m, reflecting a net initial yield of 6.6% and a
capital value of £550psf. Shareholders will remember
the residential element was sold in 2022 for £5m.
The Company owned the Colonnades for 25 years,
transforming it from an unloved, poorly configured
parade of shops into an important local centre with a
44,000 sq ft Waitrose and 16,000 sq ft of ancillary retail
including a restaurant, gym and soft furnishings store.
The proceeds will be reinvested into direct property and
we are actively sourcing new opportunities.
At our industrial estate in Wandsworth, southwest
London, we have commenced a comprehensive
refurbishment of the units on a phased basis. The aim is
to produce best in class, light industrial units which will
be net zero carbon ‘in-use’. The units will be completely
flexible and will provide a wide range of users with high
quality, functional space with excellent sustainability
credentials. The proximity to central London, alongside
excellent road and rail communications, will hopefully
enable us to achieve new market rental levels for this
type of space in the capital London.
In Gloucester we have let two more units to Infusion
who occupy the other three units on the estate. The
tenant, a successful tea packaging business, won a new
contract which required an extra 25,000 sq ft. Through
good tenant communications we were able to surrender
surplus space on the estate, relet to Infusion and secure
a 15% increase in the rents, setting a new record level for
the estate.
Revenue and Revenue Outlook
The fall in revenue for the year was anticipated when we
reported last year and flagged in last years’ annual report
and commented upon further at the interim stage.
Progress has been made by companies reducing their
debt and strengthening their balance sheets, as a result
we are seeing the German and Scandinavian companies,
which suspended their dividends, return to making
distributions. Some of these are not commencing
immediately and quantum’s are still not certain. In many
cases, initially at least, they will be at a lower level than
pre-suspension.
The tax rate for our revenue account increased for a
number of reasons. First and foremost, the headline
rate of corporation tax increased from 19% to 25%.
Secondly, our income mix changed, weighting more to
income which is taxable in our revenue account. Finally,
our average withholding tax rate also increased as some
of the jurisdictions where we saw reduced income were
ones where historically we had incurred lower rates of
withholding tax.
It is prudent to assume this higher tax charge going
forward and together with lower distribution rates from
some of our companies, we expect it to take time for
earnings to return to previous levels. We expect the
recovery in earnings to accelerate when interest rates
are lowered but obviously the timing of this is difficult to
predict.
The Company has recorded excellent long-term growth
in distributions to shareholders of almost 8% per annum
over 10 years. The Company has significant revenue
reserves. The Board is happy to supplement the dividend
from revenue reserves although growth will be at a more
subdued rate for a while.
Annual Report & Accounts 2024 15
Marcus Phayre-Mudge
Fund Manager
7 June 2024
Gearing and Debt
The gearing over the year reduced, although due to
interest rate increases the overall cost of debt increased.
We are seeing increased margins being quoted on
some credit facility renewals and this has resulted in us
reducing the number of debt providers for the moment.
However, we have a number of ways to access gearing
in addition to the traditional revolving credit facilities.
Fixed rate loan notes were taken out in 2016, Eur 50m (at
1.92%) maturing in 2026 and £15m (at 3.59%) maturing
in 2031 and the use of Contracts for Difference also
introduces gearing. We are confident that we have access
to adequate levels of gearing to service any portfolio
management requirements whilst maintaining a high
degree of flexibility.
Outlook
In the Half Year Report in November, I highlighted both
the closure of many of the remaining open-ended, daily
dealing, direct property PAIFs (property authorised
investment funds) and the ongoing attraction of liquid
exposure to real estate through equities. In January,
the manager of the largest remaining PAIF announced
conversion to a hybrid model, a mix of physical property
and property equities. Further vindication that real estate
equities are the solution to those seeking liquid exposure
to the sector. However, liquidity comes with market size
and we welcome further consolidation in the sector,
creating fewer but larger companies which will hopefully
lead to more investor appetite. This has begun to happen
but there remains more opportunity in the sector.
The ebb and flow of investor sentiment towards our
corner of the equity market remains a frustrating feature.
The focus must now turn to the underlying demand and
supply of good quality real estate which remains, in most
sectors, in a state of positive disequilibrium. Our portfolio
positioning reflects our strong belief in this rental growth.
The number of sub-markets and geographies where we
see this organic growth is broadening. Those businesses
with the right capital structure are in a good place to take
advantage of these opportunities.
Post the year end, there has been yet another piece of M&A
activity. Arima (market cap €236m) is a specialist Madrid
office investor /developer who has bucked the trend with
a string of letting transactions on new and refurbished
CBD buildings. The share price had failed to respond
given the small market cap and its focus on an unloved
sub-sector, regardless of how well the management
team had performed. On May 16th the board announced
a cash bid (from a local property fund backed by a large
Brazilian bank) at a 39% premium to the previous closing
price. We were the second largest shareholder (8.1% of
issued equity). Yet another example of the equity market
undervaluing a well managed, listed property company – a
topic we have written about many times. We will continue
try and identify these opportunities given the Company’s
ability to hold illiquid positions.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
16 TR Property Investment Trust plc
Responsible investment
Introduction
The Board recognises the importance of considering
Environmental, Social and Governance ('ESG') factors
when making investments and in acting as a responsible
steward of capital. This covers the Company's own
responsibilities on governance and reporting and through
responsible ownership of the investments that are made
on its behalf by its Portfolio Manager (the 'Manager').
1. The Company's own approach to Corporate
Governance and Reporting
Maintaining a high level of governance and disclosure
in the Company’s own operations and reporting is
extremely important. Our Manager is encouraging and
supporting this from the companies in which we invest
and we cannot fall short of these standards ourselves.
The Company’s compliance with the AIC Code of
Corporate Governance is detailed in the Corporate
Governance Report on page 47.
Under Section 414 of the Companies Act 2006 there is
a requirement to detail information about employee and
human rights, including information about any policies
in relation to these matters and the effectiveness of
these policies. As the Company has no employees,
this requirement does not apply. The Company is not
within the scope of the UK Modern Slavery Act 2015
because it has not exceeded the turnover threshold and
is therefore not obliged to make a slavery and human
trafficking statement. The Directors are satisfied that,
to the best of their knowledge, the Company’s principal
suppliers, which are listed on page 114, comply with the
provisions of the UK Modern Slavery Act 2015. These are
principally professional advisers and service providers in
the financial services industry, consequently the Board
considers the Company to be low risk in relation to
thismatter.
The Board meets the FCA Listing Rules targets on diversity
and inclusion. The Board’s diversity policy is outlined in
more detail in the Corporate Governance Report.
The activities of the Nomination & Remuneration
Committee in relation to Board changes are referred to
in the Nomination & Remuneration Committee Report on
page 53.
The Company has no greenhouse gas emissions to
report from its operations, nor does it have responsibility
for any other emissions producing sources under the
Companies Act 2006 (Strategic Report and Directors’
Reports Regulations 2013). Investment trust companies
are currently exempt from reporting against the Task
Force on Climate-Related Financial Disclosures ('TCFD'),
however, the Financial Conduct Authority ('FCA') has
published regulations that require the Company’s
Manager, as its Alternative Investment Fund Manager
(‘AIFM’), to report against TCFD at both the AIFM and
product level by June 2024. Therefore there will be a
TCFD disclosure specific to the Company’s portfolio
available after 30 June 2024, which will be published
on either the Company's or the Manager’s website. The
Manager has produced a report on its overall climate
change approach, which is structured using the TCFD
categories and is available on its website.
2. Our Portfolio Manager’s Approach to ESG
Our Portfolio Manager’s primary duty is to pursue the
objective set out at the beginning of this annual report,
which is to invest in property and property related
companies with the objective of exceeding the returns of
our benchmark.
The Company has not set out to be an investment
fund with any ESG or sustainability characteristics,
however, as a long-term investor, governance and
sustainability considerations are embedded in our
Manager’s investment process. ESG risk assessments
and considerations are factors which can feed into the
investment decisions taken by the Manager. This reflects
the belief of our Manager that investee companies that
have strong governance combined with a responsible
approach to social obligations and the commitment to
protect the environment can help enhance shareholder
returns in the long term.
In the part of the portfolio that is invested directly into
commercial real estate we endeavour to "practice what
we preach".
LISTED EQUITY PORTFOLIO
As a dedicated investor in the property sector our Manager
does not have to consider some of the more controversial
areas of what is ethical investment. However we are
investing in buildings where construction and ongoing
management have a direct impact on the environment.
All property is in some way delivering a social purpose.
Modern building practices are very much more focused
on reducing energy consumption and efficiency than in
the past. Properties have varying lifespans but are built
for the long term. Older buildings which are less energy
efficient than their modern counterparts are a fact of
life, their replacement has wider environmental and
social repercussions as well as huge cost implications.
They are going to form part of the investible universe for
the foreseeable future and their efficient improvement
and management is just as important as ensuring new
developments follow the highest possible environmental
standards. Although older buildings will most likely show
Annual Report & Accounts 2024 17
inferior "scores" to their more modern counterparts on
a number of environmental measures, we are looking
for demonstration of best efforts by issuers to improve
these measures, recognising that there will be limitations
on what can be achieved but wanting to see a positive
direction of travel.
There are two fundamental considerations to investment
in property companies: the assets themselves and their
management. The Manager seeks to invest in long-term
assets which are managed by quality teams in a well
governed corporate structure. As a result, there has been
a long-standing and strong culture of stewardship in the
Manager’s investment approach. The Manager believes
that engaging with companies is best in the first instance,
rather than simply divesting or excluding investment
opportunities. However, there are instances where
governance matters have driven a decision not to invest in
a company. As one of the largest teams investing in pan-
European real estate equities, our Manager meets with
a significant number of management teams of investee
and potential investee companies each year and has a
robust record of engagement, with an agenda of reducing
risk, improving performance and encouraging best
practice. This is augmented by the strength of Columbia
Threadneedle's Responsible Investment team and its
broader engagement. Over the course of the year, our
management team participated in 250 individual or group
meetings with companies and their management teams.
The Manager continues to incorporate new procedures and
ways in which information is gathered and used to support
their engagement with companies on ESG matters.
Corporate Governance disclosure requirements have
increased transparency enormously in recent years and
enabled closer scrutiny and engagement on Governance
issues for some years. Environmental measures are
widely reported, with formal disclosure requirements being
placed upon our investee companies, the Manager is more
readily able to scrutinise other measures such as climate
change and sustainability policies and outcomes.
However, the Board and Manager are still of the view that
the ESG rating industry and its approach and processes
has significant limitations, making it difficult to draw
true comparisons and make fully informed decisions.
The assessments from the various data providers reach
different conclusions as they do not all score in a consistent
way. Some of the assessments are subjective and different
data providers have different definitions and criteria.
This may eventually converge into some form of
consensus or standardisation but it still has a way to
go. Conceptually, making ESG comparisons between
companies and portfolios appears simple, but it is actually
rather complex and it is important to ensure that valid
comparisons are being made. As the shortcomings are
being uncovered and the different approaches highlighted
we hope that this will put pressure on the data providers to
improve the quality and clarify the basis of their analysis.
The data services are subscribed to so have to be fit for
purpose.
Our manager's own company database covers financial
and operational information together with extensive
modelling. ESG data is being collated alongside this,
having noted the shortfalls above allowing comparisons
to be made between the various data sources for a single
company and interrogated rather than relying on high level
“scores”. Interactions with companies on ESG matters are
noted and progress, or otherwise, can be tracked more
efficiently.
The Manager is dedicating direct resource to the analysis
of the information available and also has the benefit of
input from its Responsible Investment Team. This aims
to improve the Manager’s ability to engage with investee
companies on environmental matters and assist in the
consideration of ESG factors as part of overall investment
analysis.
Governance
Governance covers matters such as board structure;
effectiveness, diversity and independence, executive
pay and criteria, shareholder rights and financial and
governance reporting and standards.
Exercise of Voting Power and engagement
The Manager has a corporate governance voting policy
which, in its opinion, accords with current best practice
whilst maintaining a primary focus on financial returns.
The exercise of voting rights attached to the portfolio
has been delegated to the Manager. Where practicable,
all shareholdings were voted at all company meetings
in the financial year in accordance with Columbia
Threadneedle’s own corporate governance policies. This
ensures that a strong, consistent approach is taken to
proxy voting which backs up and reinforces engagement,
takes a robust line on key governance issues such
as executive pay and integrates consideration of
environmental, social & diversity issues and sustainability
practices into the voting process.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
18 TR Property Investment Trust plc
Columbia Threadneedle’s Stewardship Report 2023
provides more information on its firm-level stewardship
policies, as well as how these comply with the
expectations of the UK Stewardship Code 2020 to which
the Manager is a signatory. Its statement of compliance
can be found on the website at
https://www.columbiathreadneedle.com/en/.
During the financial year, the Manager voted against at
least one management proposal at 55% of shareholder
meetings. This represents 12% of total items voted. Of
the items voted against, the proposals can be broadly
categorised as follows:
53%
23%
8%
Compensation
Capitalization
Director Election
Other
Audit Related
15%
1%
For the year, the Manager engaged with 10 companies
directly on a range of ESG related matters. These
engagements were conducted at both the board and
senior executive level as well as directly with investor
relations. Topics of engagement were split as follows:
Corporate Governance
Climate Change
Labour Standard
s
Environmental Standards
26%
44%
26%
4%
As highlighted in the Manager’s Report we actively engaged
not only with the boards of both Tritax Big Box and UK
Commercial over their corporate transaction but also with
the Takeover Panel. We explained in detail, our governance
concerns centred on the commercial arrangement between
the third party manager of both these vehicles and the
largest shareholder of UK Commercial. We felt strongly
that the board of UK Commercial had failed to complete
a comprehensive strategic review. The Chairman of UK
Commercial clearly also had reservations about the process
and abstained from voting in favour of the transaction.
Social
All buildings have a social function, providing places
to live, work, eat, shop, store etc. Management of
buildings needs to ensure any social obligations to
the occupants are met in terms of health & safety,
employee management and wellbeing and commitment
to communities. Most of these obligations are the
responsibility of the tenant but our investee companies
are obliged to report on matters affecting their own
employees and such statements are considered.
Environmental
Environmental policies in the property sector focus
largely on sustainability and climate change. Climate
change is one of the defining challenges of modern
times.
The management team have sourced data and
research from several providers, including the Columbia
Threadneedle Responsible Investment team, MSCI and
Global ESG Benchmark for Real Assets ('GRESB').
The quantity and depth of data available in our sector
varies greatly; the larger companies now have teams
dedicated to providing environmental impact data and
reporting. However many of our companies are small
and do not currently have the resources to contribute
data to the organisations providing analysis to the
investor community. As a consequence, we see strong
correlations between company size, maturity and overall
scores. Since our investment strategy leads us to own
focused mid-sized companies in preference to some of
the larger diversified companies, the portfolio's overall
ESG score might tend to be lower compared to the wider
benchmark. We look at data from both GRESB and MSCI
and provide data to GRESB on our own direct property
portfolio. The rigour of our process ensures that these
companies receive scrutiny by the team.
Responsible investment
continued
Annual Report & Accounts 2024 19
DIRECT PROPERTY PORTFOLIO
In the last Annual Report we set out our approach to ESG
and our priority to improve our net zero carbon pathway,
bringing it forward from 2050. Consequently, Net Zero
Carbon has been fundamental to our ESG activity over
the last year.
The key challenge has been ensuring that all net zero
led initiatives strike a balance between being genuinely
deliverable and also commercially viable. A lot of work
has gone into identifying and exploring how this can be
achieved and this report sets out the progress made.
Previous reports to date have been structured around
three key pillars, namely Asset Energy Performance
(Environment), Occupier Engagement (Social) and
Operational Performance (Governance). These pillars
are embedded into our Asset Management strategy and
form our Core ESG Priorities. These core priorities are
standard practice within both the asset and property
management of the direct portfolio and will continue to
evolve as we strengthen the ESG credentials of the direct
property portfolio.
These priorities are captured through the integration of
our assets into the wider community within which they
are located and the maintenance of strong relationships
with our local community stakeholders. We recognise
that the built environment can only succeed with the
support of a vibrant local community. By engaging
with the local community both through our existing
relationships, such as the Wandsworth Foodbank at
Ferrier Street, and through new relationships we can
continue to make a positive impact.
Governance continues to be structured through the
Company's direct property portfolio's Sustainability
and Social Responsibility Committee. By working
in partnership with our property manager, energy
consultant and other key partners we can define our
overarching strategy and map out our approach to
delivery. Quarterly meetings allow us to monitor our
progress closely and identify any gaps whilst also
ensuring full transparency on our proactive hands-on
approach.
The progress over the last year has enabled us to declare
with confidence that we can bring forward the current
direct portfolio’s Net Zero Carbon priority from 2050
to2040.
Core ESG Priorities
Core ESG Priorities have been fully embedded into the
day-to-day management of the direct property portfolio.
These feed into the business plans for each asset,
shaping its strategy.
These core ESG Priorities detailed below will continue to
evolve as progress is made.
Consumption Data Management
Having the ability to measure and monitor the utility
consumption of each asset accurately is fundamental to
gaining an understanding of the carbon intensity of the
direct portfolio. It also means that we can work with our
occupiers to set out how both Scope 1 and 2 emissions
can be reduced.
Automatic meter readers ('AMRs') were installed on
the landlord utility supplies at the Colonnades in June
2023. This means that 100% AMR coverage has been
achieved on all landlord procured meters within the
portfolio to monitor and mitigate excess energy usage.
This has given visibility into consumption patterns
and enabled informed adjustments to be made to cut
carbon emissions and save on cost. Following the AMR
installation at the Colonnades we were able to analyse
the electricity usage. The installation of LED lights
and timers within the common areas generated a 33%
reduction in consumption over the year. This in turn has
meant that prior to the sale, the asset was on track to
be net zero and below the science-based priority (SBTI)
by2050.
At the IO Centre, Gloucester, analysis of the data
collected from the AMRs flagged that there was
unusual daytime electricity consumption. The energy
management system on site flagged that the cause
of this irregular consumption was the car park lighting
which was on during the day. As a result of this timer
sensors were adjusted, resulting in energy savings being
achieved.
Whilst these interventions are small in scale they all
make a positive impact on our carbon reduction priority
and the cumulative effect of these interventions will
strengthen our journey to net zero.
In addition to electricity data, over the last year the
Company has started to collect water consumption
data and now has coverage of 60% across the portfolio
through water meters. This will help us get clarity
on scope 3 emissions and, as a result of this data,
opportunities to reduce water consumption and waste
water have already been identified and implemented. At
Gloucester water butts have been installed to harvest
rainwater for the landscapers to utilise on the estate.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
20 TR Property Investment Trust plc
Site waste audits have also been completed across each
asset enabling us to measure the amount of general
waste and recycling being generated by each site across
the portfolio. We are now working with our property
management team to work in partnership with our
occupiers to minimise waste generated from each asset,
increase recycling and in turn reduce associated costs.
By evolving and improving the data across the portfolio
we are strengthening the Company's ability to monitor
andidentify carbon saving opportunities and we will
continue share the detail of our progress over the
forthcoming year.
GRESB
At the time of writing the last report we were in the
process of submitting the Company's inaugural GRESB
submission. The results of this submission were
published in October 2023 and we are pleased to share
that the Company achieved a 1 Star rating. This was
a strong start to our GRESB journey given the direct
portfolio is predominantly characterised by industrial
properties.
Since then, an extensive gap analysis has been
undertaken to identify exactly how this rating can be
improved. Consumption data management through the
AMR’s is critical to this submission and given we have
a far wider dataset for the next submission we should
be in a better position to improve our score. To further
enhance data collection, our property management team
have collaborated with EVORA and adopted the PERSE
System which facilitates the consolidation of energy,
carbon, and cost-related information for assets linked
to the grid. This has streamlined the process by working
closely with our occupiers to obtain energy consumption
data directly from the grid through a simplified, one-time
authorisation procedure and we look forward to reporting
on the second submission in the forthcoming year.
Renewable Energy Sources
It is very much standard practice that all energy across
landlord areas for the whole portfolio is only procured
from renewable sources. We are pleased to confirm
that 100% of landlord electricity and gas supplies are
contracted on certified green tariffs, backed by the
Ofgem regulated Renewable Energy Guarantees of Origin
(REGO) scheme.
Energy Performance Certificate ('EPC') and Minimum
Energy Efficient Standards ('MEES')
The EPC profile for the direct property portfolio as at
31st March 2024 is detailed below. It continues to meet
the current MEES and the drive now is to improve these
ratings so that the majority fall above a B rating. This
priority is reinforced by the fact that any refurbishment
undertaken by the Company has to achieve a minimum
of a B rating.
EPC Ratings 2024 (ERV)
B: 13%
(2023: 58%)
C: 6%
(2023: 6%)
D: 63%
(2023: 28%)
E: 18%
(2023: 8%)
Overall, the EPC profile has not improved over the last
year with EPC B ratings within the direct portfolio falling
from 58% to 13%. This is primarily due to the sale of the
Colonnades where over 90% of the property was rated
EPC B. Projects are underway on the current standing
portfolio to improve this EPC profile significantly over the
next 12 months.
The majority of the E and D ratings in the portfolio
are at Wandsworth where a phased sustainability-led
refurbishment of the estate is current underway. The
refurbishment will include:
• PV solar panels installed on new insulated roofs
• high-efficiency lighting, heating and cooling
• EV charging points
We are committed to transforming the estate to deliver
high quality, best in class, net zero in-use units with a
minimum EPC A rating. In order to achieve this, we have
been working closely with Carbon Plan Engineering who
have carefully modelled and analysed every detail and
specification within the project to ensure we can meet
our objectives.
Responsible investment
continued
Annual Report & Accounts 2024 21
“The Ferrier Street refurbishment is the first project of its
scale where we have been asked to pursue the UKGBC Net
Zero process. TR Property Investment Trust were focused
on minimising embodied carbon impacts and challenged
Carbon Plan Engineering to achieve net zero operational
emissions for the project. This project proves that Low
Impact/Net Zero refurbishments can be delivered on
this type of building and that these ESG credentials are
becoming ever more critical to occupiers.”
Alan Calcott, Director, Carbon Plan Engineering
Once this project is complete the EPC profile for the
Company will improve significantly, with over 70% of the
portfolio achieving an EPC A rating, further strengthening
our ability to meet the forthcoming MEES requirements.
Looking to the rest of the portfolio, work is also underway
to improve the EPC profile at Gloucester. Following
the success of our collaboration with Infusion GB to
install PV on two of their units we are now exploring
this opportunity led approach and planning to install PV
on the remaining 3 units on the estate. This will raise
the EPC profile for the estate up to at least a B rating,
meaning any ratings below a C will be eliminated from
the portfolio, further strengthening and future-proofing
the portfolio against forthcoming statutory requirements.
Green Lease Clauses
The inclusion of these clauses in all new leases
continues to be standard practice. 40% of the leases at
Gloucester include green lease clauses and following
the refurbishment all new leases at Wandsworth will
also include this mutual agreement between landlord
and occupier to collaborate on reducing the carbon
emissions generated through their occupation.
Green lease clauses also assist the Company in streamlining
the management of Scope 1 and 2 emissions by
strengthening our ability to ensure the utility consumption of
our occupiers meets our carbon intensity priorities.
Community and Social Engagement
Occupier engagement is fundamental, their inclusion
and participation is pivotal to ensuring a shared journey
and priorities. The close partnership of both our asset
and property management teams aims to form strong
relationships with our occupiers. Various communication
channels have been utilised to maximise engagement,
including a quarterly ESG newsletter, occupier events,
ESG focused in-person meetings and an annual occupier
satisfaction questionnaire.
The outcome of this collaborative approach must be
mutually beneficial so all parties can meet their ESG
priorities. For example, by working in partnership with
our occupiers on data management, through the AMR
infrastructure we have installed we can provide insight
into how they can reduce their consumption and in turn
their carbon emissions and energy bills.
We also know that the community and social impact
of our direct property extends far beyond the physical
boundaries of our ownership. Therefore, our approach to
social responsibility and the impact of our assets on their
surrounding communities is always carefully considered.
At Wandsworth we continue to support the Foodbank
and were pleased to extend their occupation on the
estate by relocating them to another unit when the
refurbishment works commenced. From this unit they
have continued to provide over 11,000 emergency food
supplies to local people and families.
In addition to this we have established a relationship with
the Wandsworth Town Business Improvement District
to further enhance our stakeholder engagement with the
local community in Wandsworth. By doing this we hope
to further expand the community
At the Colonnades we worked with Clean Air Bayswater,
a local community group, and London Hearts, the leading
heart defibrillator charity in the UK, to supply and install
a defibrillator. The provision of this life saving equipment
was strongly supported by the local ward councillor Max
Sullivan and means that more lives can be saved.
Governance
The Company's direct property portfolio's Sustainability
and Social Responsibility Committee continues to meet
on a quarterly basis to set our priorities, map out how and
when they will be achieved and ensure we are on track.
The Committee comprises of senior decision makers
within the Company, the asset managers and the property
management team. This ensures we maintain a robust
and hand-on approach to tackling the environmental
challenges faced by the portfolio.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
22 TR Property Investment Trust plc
Net Zero Carbon Pathway
Various workstreams have been undertaken over the last
12 months to help drive the priority of significantly and
ambitiously improving our net zero pathway from 2050.
The first key step in achieving this priority was to carry out
Net Zero Audits across the direct portfolio. These were
commissioned for Gloucester and the Colonnades. Given
the planned refurbishment for Wandsworth an audit was
not commissioned for this site as the analysis carried out
by Carbon Plan outlines exactly what is needed to meet
net zero targets.
The objective of the Net Zero Audits commissioned were
to identify how each asset can minimise energy demand
and increase energy efficiency through low carbon
technology. The key recommendations for Gloucester
were to remove the dependency of natural gas as a
primary heat source, upgrade the lighting to LED and
expand the installation of solar PV across the estate.
Following the successful solar PV install by Infusion GB on
two of their units, a feasibility study was commissioned
to undertake a solar PV installation across the final
three units. This project is happening in collaboration
with Infusion GB who have expanded their production in
Gloucester and are fully engaged in optimising their utility
consumption from solar PV across the estate.
For the Colonnades, the key recommendations were to
remove the gas boilers, upgrade the heating to a VRF
system and install solar PV. This report was shared with
the buyer of the Colonnades so they can continue the
asset’s net zero journey.
The extensive refurbishment of Wandsworth will mean
that the Company will have its first net zero in use asset.
This will be a huge achievement and we are looking
forward to showcasing this project over the next year.
The strong upside in adopting strong ESG practices is
apparent. The environmental and social impact of the
direct property portfolio is visible and everything we do
influences this. The significant progress over the last
12 months has enabled us to bring forward our net zero
carbon pathway to 2040 and we believe we are in a much
stronger position to improve on our GRESB score. This
gives a tangible gauge on how significantly our ESG
priority is progressing.
At the time of writing the proportion of direct property in
the portfolio is at a long term low following the sale of the
Colonnades. New assets will be brought into the portfolio,
these may be assets with significant work to do from an
ESG perspective and this may reduce our GRESB score, at
least in the short term. We are happy to face the challenge
of improving ESG credentials in older assets and believe
that it is just as important to improve the credentials of the
existing built environment as to create new buildings with
leading environmental credentials.
Responsible investment
continued
Annual Report & Accounts 2024 23
Portfolio
Distribution of Investments
as at 31 March
2024
£’000
2024
%
2023
£’000
2023
%
UK Securities¹
- quoted & unlisted 376,567 33.7 385,876 40.5
UK Investment Properties 38,388 3.4 73,957 7.7
UK Total 414,955 37.1 459,833 48.2
Continental Europe Securities
- quoted 697,152 62.3 488,839 51.3
Investments held at fair value 1,112,107 99.4 948,672 99.5
- CFD net debtor/(creditor)² 6,098 0.6 4,662 0.5
Total Investment Positions 1,118,205 100.0 953,334 100.0
Investment Exposure
as at 31 March
2024
£’000
2024
%
2023
£’000
2023
%
UK Securities
- quoted & unlisted 376,567 30.5 385,876 35.7
- CFD exposure³ 38,874 3.2 75,963 7.0
UK Investment Properties 38,388 3.2 73,957 7.0
UK Total 453,829 36.9 535,796 49.7
Continental Europe Securities
- quoted 697,152 56.5 488,839 45.2
- CFD exposure³ 81,675 6.6 54,943 5.1
Total investment exposure
4
1,232,656 100.0 1,079,578 100.0
Portfolio Summary
as at 31 March
2024 2023 2022 2021 2020
Total investments £1,112m £949m £1,555m £1,401m £1,155m
Net assets £1,116m £968m £1,563m £1,326m £1,136m
UK quoted property shares 34% 41% 33% 28% 31%
Overseas quoted property shares 63% 51% 60% 66% 61%
Direct property (externally valued) 3% 8% 6% 6% 8%
Net Currency Exposure
as at 31 March
2024
Company
%
2024
Benchmark
%
2023
Company
%
2023
Benchmark
%
GBP 32.6 32.8 33.6 35.1
EUR 42.0 41.9 42.3 41.3
CHF 9.1 8.9 9.9 9.5
SEK 16.2 16.1 13.8 13.8
NOK 0.1 0.3 0.4 0.3
¹ UK securities includes 2 unlisted holdings (0.2%).
²
Net unrealised gain/(loss) on CFD contracts held as balance sheet debtor/(creditor).
³
Gross value of CFD positions.
4
Total investments illustrating market exposure including the gross value of CFD positions.
UK Securities
UK Property
Continental Europe
Securities
CFD Debtors/Creditors
Securities
UK Property
6.8
33.7%
0.6%
3.4%
62.3%
96.8%
3.2%
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
24 TR Property Investment Trust plc
Investment portfolio by country
as at 31 March 2024
Market
value
£’000
% of total
investments
Belgium
Warehouses De Pau 19,387 1.8
Montea 19,379 1.7
Aedifica 11,418 1.0
Xior Student Housing 7,874 0.7
Shugard Self Storage 5,498 0.5
Care Property Invest 4,611 0.4
Icade 3,075 0.3
VGP 2,063 0.2
73,305 6.6
Finland
Kojamo 5,224 0.5
5,224 0.5
France
Argan 39,183 3.5
Klepierre 38,776 3.5
Gecina 35,173 3.1
Covivio 8,907 0.8
Carmila 6,516 0.6
128,555 11.5
Germany
Vonovia 83,606 7.5
TAG Immobilien 28,285 2.5
LEG Immobilien 25,581 2.3
Aroundtown 4,986 0.4
Grand City Properties 4,377 0.4
146,835 13.1
Netherlands
Eurocommercial Properties 19,485 1.7
Unibail Rodamco Westfield 3,097 0.3
NSI 1,745 0.2
24,327 2.2
Norway
Entra 164 -
164 -
Spain
Merlin Properties 22,910 2.0
Arima Real Estate 12,285 1.1
35,195 3.1
Market
value
£’000
% of total
investments
Sweden
Fastighets Balder B 52,887 4.7
Castellum 44,219 4.0
Catena 34,678 3.1
Sagax 28,246 2.5
Wihlborgs 20,257 1.8
Pandox 8,180 0.7
Samhallsbyggnadsbolaget 2,122 0.2
Cibus Nordic Real Estate 2,058 0.2
192,647 17.2
Switzerland
Psp Swiss Property 47,323 4.2
Swiss Prime Site 43,577 3.9
90,900 8.1
United Kingdom
LondonMetric Property 67,403 6.0
Segro 58,760 5.3
UK Commercial Property 31,227 2.8
Picton Property Income 31,087 2.8
LandSec 29,878 2.7
Phoenix Spree Deutschland 24,065 2.1
Sirius Real Estate 22,224 2.0
Unite Group 18,815 1.7
Hammerson 17,772 1.6
Workspace 15,653 1.4
Tritax Big Box REIT 11,837 1.1
Safestore 11,097 1.0
Primary Healthcare 8,360 0.7
Tritax Eurobox 7,816 0.7
Assura 6,795 0.6
Supermarket Income REIT 6,410 0.6
Atrato
(1)
2,573 0.2
PRS REIT 1,373 0.1
Cap & Regional 1,320 0.1
Empiric 871 0.1
Target Healthcare 821 0.1
Ediston Property
(1)
319 -
abrdn European Logistics 91 -
376,567 33.7
Direct Property 38,388 3.4
CFD Positions (included in
current assets and liabilities) 6,098 0.6
Total Investment Positions 1,118,205 100.0
Notes
> Companies shown by country of listing.
> The above positions are the physical holdings included in the investments held at fair value in the Balance Sheet. The CFD positions is the net of the profit or loss on the
CFD contracts (i.e. not the investment exposure) included in the Balance Sheet current assets and liabilities.
(1)
Unlisted equities.
Annual Report & Accounts 2024 25
Twelve largest equity investments
as at 31 March 2024
† Notes:
> The percentage of investment portfolio positions set out above include exposures through CFD for both the individual positions and the portfolio.
> The five-year total shareholder returns are the returns in the local currency of the holding.
In 2024 LondonMetric merged with LXI to
transform itself from a REIT with a portfolio
value of c.£3.2bn, into the 4th largest REIT in
the UK with a portfolio value of £6.2bn. Post
merger the company still has a large weighting
to logistics assets (41% of new portfolio),
however the bulk of portfolio exposure is now
to diversified “triple net” subsectors including
hotels, healthcare assets and bespoke leisure
assets (such as Alton Towers, Thorpe Park
etc.). These sectors generally carry both triple
net leases (where in addition to paying the rent
the tenant is responsible for all property costs)
and long WAULTs, making them a stable and
dependable source of income, and future
income growth, for LondonMetric.
We were supportive of the deal which not
only transforms the scale and opportunity
set for LondonMetric, but was also strongly
accretive to earnings without overstretching
the balance sheet. Management has shown
an astute ability to rotate its assets and
crystallise value for shareholders, and we
expect this to continue in the enlarged
LondonMetric. LondonMetric is therefore
set up, in our view, to deliver strong income
growth over an extended period, and we
believe the shares are likely to continue to
command a rating premium vs. the peer group
given these inherent qualities. The five-year
total shareholder return has been +26.3%.
2
31 March 2024 2023
Shareholding
value £83.6m £72.5m
% of investment
portfolio
†
6.8% 6.7%
% of equity
owned 0.4% 0.6%
Share price €27.40 €17.34
31 March 2024 2023
Shareholding
value £67.4m £17.1m
% of investment
portfolio
†
5.5% 1.6%
% of equity
owned 1.6% 1.0%
Share price 203p 176p
1
Vonovia is a German listed residential
company and the largest real estate
company in Continental Europe by market
capitalisation. At the end of 2023, the
company owned a portfolio of c.€85bn,
primarily split between Germany (c.88% of
value), Sweden (c.8%) and Austria (c.4%).
The portfolio has increased dramatically
stands at 546,000 units, following a string of
acquisitions, mostly of listed peers, such as
Deutsche Wohnen, Hembla, Victoria Park,
and BUWOG.
Vonovia is involved in the whole value chain
of the residential sector, via its rental business
(c.93% of Adj. EBITDA), its value-add segment
(energy, multimedia, and other services
segment, c.4%), recurring sales segment
(c.2%), and its third-party development
segment (c.1%). The German residential
sector remains heavily regulated, yet Vonovia
has continually been able to generate solid
and accelerating rental growth year-over-
year (+3.3% in 2023), whilst also complying
with regulations and assuming a social role,
which permits them to benefit from critical
political goodwill and partnerships (as
observed by the 20,000-unit portfolio sale
to the State of Berlin in 2021 and a string of
other deals with public housing companies).
Even though asset values have come under
pressure, as seen with all real estate asset
classes, the business continues to perform
strong operationally as seen by a record
low vacancy level and healthy rent growth.
Moreover, market evidence points to further
upward revisions to rent growth estimates,
as the supply demand imbalance in Germany
persists. The five-year total shareholder
return has been -24.2%.
Klépierre is a French REIT, which owns,
operates, and manages a portfolio of
European shopping, spanning twelve
countries. At the end of 2023, the company
owned a portfolio of c.€19.3bn, with major
exposures in France (c.40% of value),
Italy (c.22%), the Nordics (c.13%), Iberia
(c.12%), Germany/Netherlands (c.8%), and
CEE markets (c.5%). The company, like
all shopping centre owners, has reaped
the benefits of a return to normality as
social gatherings are permitted and travel
restrictions have been lifted demonstrated in
its strong rebound in footfall and tenant sales.
While the ongoing shift towards e-commerce
as a retail channel has continued, it has
at a slower rate, even retreating in certain
markets, with digitally native retailers pivoting
to physical by opening stores. On a relative
basis, the company continues to benefit
from its 100% focus on Continental Europe,
without any exposure to weaker UK and
US markets. Lastly, the company benefits
from the experience of the Chairman, David
Simon, also Chairman and CEO of Simon
Property Group, which owns a c.22.3% stake
in Klépierre.
In 2023, it observed rental growth of
+8.8% year-over-year, benefitting from high
indexation, positive reversion on releasing/
relettings and occupancy improvements.
Meanwhile, it’s financial metrics remain
conservative with a net debt to EBITDA of
7.4x and an EPRA LTV of c.44.1%. Its average
cost of debt is low at just c.1.50%, and is
expected to remain low, as evidenced by its
high hedging ratio of c.86%, and weighted
average loan maturity of 6.3 years. The
five-year total shareholder return has been
+13.6%.
3
31 March 2024 2023
Shareholding
value £61.1m £59.6m
% of investment
portfolio
†
5.0% 5.5%
% of equity
owned 1.0% 1.1%
Share price €24.00 €20.85
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
26 TR Property Investment Trust plc
Twelve largest equity investments
continued
31 March 2024 2023
Shareholding
value £58.8m £79.2m
% of investment
portfolio
†
4.8% 7.3%
% of equity
owned 0.5% 0.9%
Share price 904p 768p
Balder is a large Swedish property company,
owning c.SEK 209bn of primarily residential
assets (52% as at December 2023), along
with a variety of commercial property
(17% offices, 10% retail, 6% industrial, 12%
other uses). The company has pan-Nordic
exposure, including Finnish residential
through its subsidiary Sato, Norwegian
offices through its stake in listed property
company ENTRA, as well as Copenhagen
residential and Swedish commercial and
residential. The company does not pay a
dividend, preferring to reinvest into its own
portfolio, a strategy which has been very
rewarding historically, allowing the company
to develop assets into under-supplied
markets.
Like many Swedish property companies the
shares were punished following the sharp
rise in interest rates (given the company’s
high leverage and dependence on the bond
market), however our view is that this sell-off
was overdone and that the company would
be able to take steps to protect its balance
sheet (for example reducing development
capex) and maintain it’s investment
grade rating. This, combined with the low
operational risk of the underlying assets
encouraged us to increase our holding in the
name. The five-year total shareholder return
has been +58.4%.
6
† Notes:
> The percentage of investment portfolio positions set out above include exposures through CFD for both the individual positions and the portfolio.
> The five-year total shareholder returns are the returns in the local currency of the holding.
Segro is the largest UK REIT by market cap
and is the largest operator of logistics and
industrial property listed in the UK, with a
total portfolio of c.£18bn as at December
2023. This is split c.61.0% in the UK, c.39.0%
in Continental Europe, with c.66.0% urban
warehouses, c.32.0% big boxes and c.2%
other uses. In the UK, the group is mainly
exposed to Greater London industrial and
logistics. Rental growth in these markets has
been extremely strong as there remains an
acute supply-demand imbalance, fuelled by
tenants’ requirements to deal with the growth
in e-commerce.
In Europe, Germany and France are the
group’s largest markets with Italy third; these
markets have a lower, but still positive, rental
growth outlook (and are geographically less
space-constrained). As interest rates have
continued to rise yield expansion has put
property values under pressure, and Segro
was not immune (the like-for-like portfolio
valuation fell -4% through FY23); however
values now appear to be stabilising. Segro
has extensive development exposure that
it manages largely to pre-let and develop at
yields significantly in excess of investment
values (c.6-7% yield on cost vs. an EPRA net
initial yield of 4.0% at FY23). This has been
a successful formula to drive both earnings
and NAV growth, as well as high shareholder
returns. The company also recently raised
c.£900m of fresh equity to help fund the
development pipeline and provide a war
chest for future acquisitions, leaving the
balance sheet in strong shape. The five-year
total shareholder return has been +54.0%.
4
31 March 2024 2023
Shareholding
value £54.4m £59.3m
% of investment
portfolio
†
4.4% 5.5%
% of equity
owned 1.1% 1.3%
Share price 658p 621p
Landsec is one of the UK’s largest REITs, with
a portfolio valued at c.£10bn as at September
2023. The company’s assets are a mix of
offices (c.51.0%), retail assets (c.37.0% split
between shopping centres, London retail
and outlets) and other uses (c.12.0% such
as leisure assets, retail parks and hotels).
Since joining the business in 2020 new CEO
Mark Allen has sought to alter the company’s
strategy, selling down a number of ‘dry’
office assets and pledging to sell out of its
non-core assets (i.e. hotels, leisure assets
and retail parks), while increasing the size of
the development pipeline to focus on large
mixed-use schemes that others do not have
the capabilities to deliver. As an example of
this, the company recently confirmed the sale
of its entire Hotel portfolio at book value for
c.£400m.
In addition to the established office
development pipeline the company now
plans to spend an additional c.£2bn over
ten years on mixed use developments,
with a c.20% profit on cost target. Balance
sheet management has been relatively
conservative with a very long debt maturity
of 9.3 years as at September 2023, net
debt to EBITDA of 7.2x and LTV of 34%. The
company intends to recycle capital to fund
the development pipeline, avoiding gearing
up despite capex spend, and has a medium-
term target of LTV remaining in the mid-30s.
The five-year total shareholder return has
been -8.8%.
5
31 March 2024 2023
Shareholding
value £52.9m £19.8m
% of investment
portfolio
†
4.3% 1.8%
% of equity
owned 0.8% 0.5%
Share price SEK78.68 SEK42.51
Annual Report & Accounts 2024 27
Castellum is a large diversified Swedish
property company. The company owns
c.SEK 138bn of assets across offices
(77% as at December 2023, including 15%
publicly funded tenants) light industrial (14%)
and retail (6%), with 3% in land and other
uses. The company has primarily Swedish
exposure, but also owns assets in Finland
and Copenhagen as well as gaining exposure
to Norway through its stake in listed property
company ENTRA.
In the face of a sharply rising interest rate
environment Castellum chose to act ahead
of a number of peers and raised SEK 10bn
in an equity raise to shore up its balance
sheet. This allowed the company to tackle
an increasingly challenging environment
from a position of strength rather than one
of weakness, as the company paid down
increasingly expensive debt and continued
investment in its large development pipeline.
The vast majority of the company’s leases
are inflation-linked, which meant that top
line rental growth has been strong for the
company (Swedish CPI in leases was +10.9%
in 2023), helping to offset the increase in debt
costs driven by higher rates. The five-year
total shareholder return has been +6.7%.
9
† Notes:
> The percentage of investment portfolio positions set out above include exposures through CFD for both the individual positions and the portfolio.
> The five-year total shareholder returns are the returns in the local currency of the holding.
Gecina is the largest French REIT and is
one of the largest real estate companies in
Continental Europe by market capitalisation.
At the end of 2023, its portfolio was valued
at c.€17.1bn, comprising of offices (c.79%
of value), residential (c.18%), and student
accommodation (c.3%).
Gecina develops, manages, and owns the
diversified portfolio, which is heavily skewed
toward the Paris region (c.97.0%), and has
been selling low-yielding, dry assets reducing
debt and fundings its attractive development
pipeline, which has been earnings accretive in
recent years. In 2023, Gecina was a primary
beneficiary of the much-debated, polarisation
trend, helped by its centrally located and
high-quality portfolio. As a result, Gecina
saw solid rent increased driven by indexed-
linked rents, positive reversion and a material
increase in occupancy levels year-over-year,
which all helped to drive 8.1% EPS growth
year-over-year. The company remains one of
a handful of European real estate companies
with an A rating from Moody’s & S&P, given its
conservative financial profile, operating with
an EPRA LTV of c.37.9%. The average cost of
debt is low at just c.1.40%, alongside a high
hedging ratio of 100%, and a long weighted
average loan maturity at 7.4 years permitting
it to benefit from relatively more attractive
funding costs than peers. The five-year total
shareholder return has been -8.7%.
7
31 March 2024 2023
Shareholding
value £47.3m £40.6m
% of investment
portfolio
†
3.8% 3.7%
% of equity
owned 1.0% 1.0%
Share price
CHF118.20 CHF104.00
PSP Swiss Property is one of Switzerland’s
leading real estate companies, owning
a diversified portfolio of high-quality real
estate assets in Switzerland. At the end of
2023, its portfolio was valued at CHF9.6bn,
comprising of offices (c.64%), retail (c.15%),
food (c.6%), parking (c.4%), and other
(c.11%). The portfolio is skewed towards
Switzerland’s key economic centres,
including Zurich (c.59%, Geneva (c.15%),
Basel (c.7%), and other major cities (c.19%).
Underlying property markets in Switzerland
appear to be holding up well. Transactional
evidence is remains light, but from the
handful transactions taking place it seems
that property values for prime assets are
broadly stable. Similarly, demand for office
space in economic centres such as Geneva
and Zurich are expected to remain strong. In
2023, it observed rental growth of +5.1% year-
over-year, benefitting from high indexation,
positive reversion on releasing/relettings and
contribution from its development pipeline.
All of this led helped it grow its dividend
by +1.3% and was supported by its robust
balance sheet noting that it’s LTV remained
low at just 35.7%; amongst the lowest levels
for European property companies while its
current cost of debt is fixed for 4.7 years. The
five-year total shareholder return has been
+28.6%.
8
31 March 2024 2023
Shareholding
value £52.6m £52.4m
% of investment
portfolio
†
4.3% 4.8%
% of equity
owned 0.8% 0.8%
Share price €94.65 €95.55
31 March 2024 2023
Shareholding
value £44.2m –
% of investment
portfolio
†
3.6% –
% of equity
owned 0.9% –
Share price
SEK140.90 SEK101.14
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
28 TR Property Investment Trust plc
31 March 2024 2023
Shareholding
value £39.4m £37.3m
% of investment
portfolio
†
3.2% 3.4%
% of equity
owned 11.0% 9.9%
Share price 65p 69p
† Notes:
> The percentage of investment portfolio positions set out above include exposures through CFD for both the individual positions and the portfolio.
> The five-year total shareholder returns are the returns in the local currency of the holding.
Picton is a diversified UK REIT with a
weighting towards UK industrial. The c.£760m
portfolio, as at September 2023, was c.59.0%
industrial, c.31.0% offices (with c.17.0%
London and the South East) and c.10.0% retail
(of which c.7.0% retail parks). Along with a
high-quality portfolio (which we believe is
under-appreciated by the stock market) where
rental growth and capital value performance
have repeatedly beaten relevant benchmarks,
the company is run conservatively, taking
very limited development risk as well as
maintaining an impressively strong balance
sheet. For example, the company’s LTV as at
September 2023 was c.28.0%, with long-dated
debt maturity (c.8 years) and very limited near
term refinancing requirements.
Management has repeatedly shown an ability
to create value through both well executed
asset management and skilful disposals, as
in the case of Angel Gate (£30m sale at a 5%
premium to December 2023 valuation), and
our view is that there is more to come, for
example through vacancy reduction in under-
rented space. The five-year total shareholder
return has been -9.7%.
11
Swiss Prime Site is one largest real estate
companies in Switzerland, with a diversified
portfolio of real estate assets, coupled with
a leading real estate investment (indirect)
business. It owns a diversified real estate
portfolio, which was valued at CHF13.1bn,
comprising of offices (c.44% of value), retail
(c.25%), logistics (9%), hotels (c.7%), with the
residual c.15% of assets in land and other
uses.
Despite a slowdown in transactions,
underlying property markets in Switzerland
appear to be holding up well, as the handful
of transactions that did take place appeared
broadly supportive of existing asset values.
While tenant demand remains healthy with
polarisation observed benefiting the high-
quality portfolios, which tend to be owned by
the listed companies. During 2023 and the
early start of 2024 SPS has made significant
strategic inroads (with the sale of Wincasa
Group, a real estate services company),
the exit the retail business (Jelmoli), and
the acquisition of an asset manager
(Fundamenta). Meanwhile, the underlying
business continues to perform well, with
like-for-like rent growth of +4.3%, helped by
strong indexation prints and further vacancy
reduction (-10bps to 3.5%). The reported LTV
reduced by 100bps over the year to c.38.8%
helped by some non-core disposals and a
low cost of debt of just c.1.20%. The five-year
total shareholder return has been +24.1%.
10
Argan is a French company, created in 2000
by Jean-Claude Le Lan, which has been listed
since 2007. The objective of the company
has been to build a portfolio of premium
logistic assets which guarantee a stable
and high occupancy rate at around 100%.
The company is vertically integrated and
has full control of the entire value chain by
identifying future needs of prospective and
current tenants and developing assets on
their behalf. Therefore, Argan can capture the
developer margin utilising its asset managers
local knowledge, while having little to no risk
on the letting side, given the strong underlying
demand for high-quality space in the mark.
In 2023, the portfolio value amounted to
c.€3.7bn and is uniquely placed, with a
100% exposure to France (with a c.31%
exposure to the Greater Paris region). The
company delivered strong 2023 results
with EPS per share growth of +5.2% year-
over-year supporting dividend per share
growth of +5.0% year-over-year. This was
supported by accelerating rental growth of
+4.8% year-over-year, benefitting from the
positive evolution of indexation, positive
reversion on relettings and some occupancy
improvements over the course of the year.
The relatively low dividend payout at c.50%
of distributable profit allows the company to
retain cash and reinvest in new development
projects while repay debt. The management
of the company has been assumed by its
founder Jean Claude Le Lan who owns
alongside family members c.36% of the
share capital, which is a strong guarantee of
alignment. The five-year total shareholder
return has been +69.0%.
12
31 March 2024 2023
Shareholding
value £43.6m £25.6m
% of investment
portfolio
†
3.5% 2.4%
% of equity
owned 0.8% 0.5%
Share price CHF85.05 CHF76.05
31 March 2024 2023
Shareholding
value £39.2m £22.4m
% of investment
portfolio
†
3.2% 2.1%
% of equity
owned 2.4% 1.6%
Share price €83.90 €68.90
Twelve largest equity investments
continued
Annual Report & Accounts 2024 29
Sector: Industrial*
Tenure: Freehold
Size (sq ft): 36,000
Principal tenants: Sweaty Betty,
Lockdown Bakers
Sector: Industrial
Tenure: Freehold
Size (sq ft): 63,000
Principal tenants: Infusion GB
Site of just over an acre, 50 metres from
Wandsworth Town railway station in an
area that is predominantly residential.
The estate comprises 16 small industrial
units generally let to a mix of small to
medium-sized private companies. A
phased refurbishment of the estate is
ongoing.
* The site contains one small vacant ancillary
retailunit.
The IO Centre comprises six industrial
units occupied by three tenants and
sits on a 4.5-acre site. Gloucester
Business Park is located to the east of
Junction 11A of the M5 and one mile to
the east of Gloucester City Centre. The
property also has easy access to the
A417 providing good links to the M4 via
junction 15.
Investment properties
Inner London* South West Total
Investment Property 78.6% 21.4% 100.0%
* Inner London is defined as inside the North and South Circular.
Spread of direct portfolio by location (%)
as at 31 March 2024
Lease lengths within the direct property portfolio
as at 31 March 2024
Contracted rent
as at 31 March 2024
Value in excess of £10 million Value less than £10 million
£1.1m
£1.9m
£0.7m
Year 1
Year 2-5
Year 5+
0 to 5 years
5 to 10 years
10+ years
Gross rental
income
75.8%
24.2%
10 Centre, Gloucester Business Park,
Gloucester, GL3
Ferrier Street Industrial Estate,
Wandsworth, London, SW18
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
Investment objective and benchmark
The Company’s investment objective is to maximise
shareholders’ total returns 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 2024 had 104 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 company.
The Company has no employees. Its wholly non-
executive Board of Directors retains responsibility
for corporate strategy; corporate governance;
risk management and internal control; the overall
investment and dividend policies; setting limits
on gearing and asset allocation and monitoring
investment performance.
The Board has appointed Columbia Threadneedle
Investment Business Limited as the Company’s
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
on pages 47 and 48.
In accordance with the Alternative Investment
Fund Managers Directive (‘AIFMD’), BNP Paribas
has been appointed as Depositary to the Company.
BNP Paribas also provides custodial and
administrative services to the Company.
Company Secretarial services are provided
by Columbia Threadneedle Investment Business
Limited.
A summary of the terms of the Investment
Management Agreement are set out on
pages54and55.
30 TR Property Investment Trust plc
Annual Report & Accounts 2024 31
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 Company’s
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 that there is 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:
The asset allocation guideline for Direct Property
is 5-15%. This reflects the Board's view that the
exposure should be greater than 5% of the total
portfolio to be meaningful and that the optimal level is
approximately 10%. Following the sale of the largest
property asset, the Colonnades shortly before the
year end, the allocation to direct property has fallen
below the guideline level, however we do not expect
this lower level to persist in the medium term.
Gearing
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 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 2024 have been
carried out on a ‘RICS Red Book’ basis and these
valuations have been adopted in the accounts.
Allocation of costs between
revenue & capital
The Group charges 75% of annual base management
fees and finance costs to capital, in line with the
Board’s expected long-term split of returns in the form
of capital gains and income. All performance fees are
charged to capital.
Holdings in 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 those companies grow and
become a larger part of our investment universe and/
or new companies come to the market in this format
the Fund Manager may wish to increase exposure
to those vehicles. If the Manager wishes to increase
investment to over 15%, the Company will make an
announcement accordingly.
Strategy and investment policies
UK listed equities 25 – 60%
Continental European
listed equities 45 – 75%
Direct Property – UK 5 – 15%
Other listed equities 0 – 5%
Listed bonds 0 – 5%
Unquoted investments 0 – 5%
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
32 TR Property Investment Trust plc
Key Performance Indicators
The Board assesses the performance of the Manager in meeting the Company’s
objective against the following Key Performance Indicators ('KPIs'):
KPI
The Directors regard the out-performance of the
Company’s net asset value total return relative to
the benchmark as being an overall measure of value
delivered to the shareholders’ over the longer term.
KPI
The principal objective of the Company is a total
return objective, however, the Fund Manager also
aims to deliver a reliable dividend with growth over
the longer term.
KPI
Whilst expectation of investment performance is a key
driver of the share price discount or premium to the Net
Asset Value of an investment trust company over the longer
term, there are periods when the discount can widen. The
Board is aware of the vulnerability of a sector- specialist to
a change of investor sentiment towards that sector, or to
periods of wider market uncertainty and the impact that can
have on the discount.
Board monitoring
The Board reviews the performance in detail at each meeting
and discusses the results and outlook with the Manager.
Board monitoring
The Board reviews statements on income received to
date and income forecasts at each meeting.
The exceptional inflation levels through 2023 and 2024
led to the Dividend Annual Growth Rate falling behind RPI
on both a one and a five year basis. However, a growing
dividend has been delivered in the current and previous
13 years. Over the longer term, the dividend growth rate
has comfortably exceeded RPI on an annualised basis
(10years: 7.8% vs 4.2% and 20 years: 9.6% vs 4.0%).
Board monitoring
The Board takes powers at each AGM to buy-back and
issue shares. When considering the merits of share
buy backs or issuance the Board looks at a number of
factors, in addition to the short and longer-term discount
or premium to NAV, to assess whether action would be
beneficial to shareholders overall. Particular attention
is paid to the current market sentiment, the potential
impact of any share buy-back activity on the liquidity of
the shares and on Ongoing Charges over the longer term.
Taking these factors into account, the Board did not buy
back any shares in the financial year.
Net Asset Value Total Return relative to the benchmark
Delivering a reliable dividend which is growing over the longer term
The discount or premium to Net Asset Value at which the Company’s shares trade
1 year 5 years
NAV Total Return* 21.1% 1.2%
Benchmark Total Return 15.4% -14.8%
* The NAV Total Return is calculated by assuming dividends paid by the
Company are reinvested in the assets of the Company on the relevant ex-
dividend date. The benchmark total return assumes dividends are re-invested
on the relevant ex-dividend dates.
1 year 5 years
Compound Annual Dividend Growth* 1.3% 3.1%
Compound Annual RPI 4.3% 6.1%
* 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.
1 year 5 years
Average discount* -7.7% -5.8%
Total number of shares repurchased – –
* Average daily discount throughout the period of share price to NAV with
income. Source: Bloomberg.
Outcome
Outcome
Outcome
The NAV Total Return has exceeded the benchmark over
both a one and five year period.
Over the financial year market sentiment towards the
sector fluctuated in tandem with changing interest rate
expectations. The discount has moved in line with that
sentiment and has ranged between 11.5%, very briefly at its
worst and narrowed to 2.6% in February on the expectation
of falling interest rates. The average of 7.7% has been wider
than the long-term average but this is not surprising given
the market background.
Annual Report & Accounts 2024 33
KPI
The Board is conscious of expenses and aims to
deliver a balance between excellent service and costs.
The AIC definition of Ongoing Charges includes any
direct property costs in addition to the management
fees and all other expenses incurred in running a
publicly listed company. As no other investment trust
companies hold part of their portfolio in direct property
(they either hold 100% of their portfolio as property
securities or as direct property), in addition to Ongoing
Charges as defined by the AIC, this statistic is shown
without direct property costs in order to allow a clearer
comparison of overall administration costs with those
of other funds investing in securities.
KPI
The Company must continue to meet the requirements of
Section 1158 of the Corporation Tax Act 2010 ('Section 1158').
Board monitoring
The Board monitors the Company’s Ongoing
Charges, in comparison to a range of other
investment trust companies of similar size, both
property sector specialists and other sector
specialists. The broker provides a list of companies
it believes is a reasonable comparison. Note there
is no other Investment Trust specialising in property
related equities.
Expenses are budgeted for each financial year and
the Board reviews reports on actual and forecast
expenses during the year.
Board monitoring
The Board reviews financial information and forecasts at
each meeting which set out the requirements outlined in
Section 1158.
Level of Ongoing Charges
Investment Trust Status
The Company’s Ongoing Charges are competitive when
compared to the peer group.
Outcome
The KPIs are considered to be Alternative Performance Measures as defined on pages 102 and 103.
Outcome
The Directors believe that the conditions and ongoing
requirements have been met in respect of the year to
31March 2024 and that the Company will continue to
meet the requirements.
1 year 5 years
Ongoing charges excluding
performance fees 0.82% 0.68%
Ongoing charges excluding
performance fees and direct
property costs 0.78% 0.65%
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
34 TR Property Investment Trust plc
Principal and emerging risks
In delivering long-term returns to shareholders, the Board must also identify and monitor the
risks that have been taken in order to achieve those returns. It has included below details of
the principal and emerging risks facing the Company and the appropriate measures taken in
order to mitigate those risks as far as practicable.
In 2023 interest rates rose suddenly in response to inflationary pressures created by the
impact of increasing energy and commodity prices. Inflation has been slow to reduce
and therefore central banks have not yet been able to cut interest rates. This has been
challenging for the property sector which is particularly sensitive to interest rates.
Risk identified Board monitoring and mitigation
Share price performs poorly in comparison
to the underlying NAV
The shares of the Company are listed on the London Stock
Exchange and the share price is determined by supply and
demand. The shares may trade at a discount or premium
to the Company’s underlying NAV and this discount or
premium may fluctuate over time.
The Board monitors the level of discount or premium at
which the shares are trading over the short and longer term.
The Board encourages engagement with the shareholders.
The Board receives reports at each meeting on the activity
of the Company’s brokers, PR agent and meetings and
events attended by the Fund Manager.
The Company’s shares are available through the Columbia
Threadneedle savings schemes and the Company
participates in the active marketing of those schemes.
The shares are also widely available on open architecture
platforms and can be held directly through the Company’s
registrar.
The Board takes the powers to issue and to buy back
shares at each AGM.
Poor investment performance of the portfolio
relative to the benchmark
The Company’s portfolio is actively managed. In addition
to investment securities, the Company also invests in
commercial property and accordingly, the portfolio may not
follow or outperform the return of the benchmark.
The Manager’s objective is to outperform the benchmark.
The Board regularly reviews the Company’s long-term
strategy and investment guidelines and the Manager’s
relative positions against those.
The Management Engagement Committee reviews the
Manager’s performance annually. The Board has the
powers to change the Manager if deemed appropriate.
Annual Report & Accounts 2024 35
Risk identified Board monitoring and mitigation
Market risk
Both share prices and exchange rates may move rapidly and
can adversely impact the value of the Company’s portfolio.
Although the portfolio is diversified across a number of
geographical regions, the investment mandate is focused
on a single sector and therefore the portfolio will be sensitive
towards the property sector, as well as global equity markets
more generally.
Property companies are subject to many factors which can
adversely affect their investment performance. They 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.
Rising interest rates have an impact on both capital values
and distributions of property companies. Higher interest rates
depress capital values as investors demand a margin over an
increased risk-free rate of return.
Conflict in the Ukraine and Middle East together with political
uncertainty more widely could impact economic growth,
commodity prices, inflation and interest rate stability.
An element of working from home has become part of working
life following the COVID-19 pandemic. However, this is more
pronounced in cities with longer commuting times and there
has been, for the majority of workers a return to the office
for a substantial part of the working week so the impact on
occupation rates is reducing.
Any strengthening or weakening of sterling will have a
direct impact as a proportion of our balance sheet is held in
non
-sterling denominated currencies. The currency exposure
is maintained in line with the benchmark and will change over
time. As at 31 March 2024, 67% of the Company’s exposure
was to currencies other than sterling.
The Board receives and considers a regular report from the
Manager detailing asset allocation, investment decisions,
currency exposures, gearing levels and rationale in relation
to the prevailing market conditions.
The report considers the impact of a range of current
issues and sets out the Manager’s response in positioning
the portfolio and the ongoing implications for the property
market, valuations overall and by each sector.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
36 TR Property Investment Trust plc
Principal and emerging risks
continued
Risk identified Board monitoring and mitigation
The Company is unable to maintain dividend growth
Lower earnings in the underlying portfolio putting pressure
on the Company’s ability to grow the dividend could result
from a number of factors:
• Following interest rate increases through the year to 31
March 2023 some companies announced a reduction or
suspension of dividends, in particular in Germany and
Scandinavia. Although in many cases dividends have
recommenced for some companies the timing and level is
uncertain;
• prolonged vacancies in the direct property portfolio and
lease or rental renegotiations;
• strengthening of sterling reducing the value of overseas
dividend receipts in sterling terms. The Company saw
a material increase in the level of earnings in the years
leading up to the COVID-19 pandemic. A significant factor
in this was the weakening of sterling following Brexit.
Although this has now passed, the value of sterling may
continue to fluctuate in the near or medium term due to a
number of geopolitical and economic uncertainties. This
could lead to currency volatility. Strengthening of sterling
would lead to a fall in earnings;
• adverse changes in the tax treatment of dividends or other
income received by the Company;
• changes in the timing of dividend receipts from investee
companies;
• legacy impact of COVID-19 on working practices and
resulting changes in workspace demand; and
• negative outlook leading to a reduction in gearing levels in
order to protect capital has an adverse effect on earnings.
The Board receives and considers regular income
forecasts.
Income forecast sensitivity to changes in FX rates is also
monitored.
The Company has substantial revenue reserves which are
drawn upon when required.
The Board continues to monitor the impact of interest rates,
and a wide range of economic and geopolitical factors and
the long-term implications for income generation.
Accounting and operational risks
Disruption or failure of systems and processes
underpinning the services provided by third parties and the
risk that those suppliers provide a sub- standard service.
Third-party service providers produce periodic reports
to the Board on their control environments and business
continuation provisions on a regular basis.
The Management Engagement Committee considers the
performance of each of the service providers on a regular
basis and considers their ongoing appointment and terms
and conditions.
The Custodian and Depositary are responsible for the
safeguarding of assets. In the event of a loss of assets
the Depositary must return assets of an identical type or
corresponding value unless it is able to demonstrate that
the loss was the result of an event beyond its reasonable
control.
Annual Report & Accounts 2024 37
Risk identified Board monitoring and mitigation
Loss of Investment Trust status
The Company has been accepted by HM Revenue &
Customs as an investment trust company, subject to
continuing to meet the relevant eligibility conditions.
Assuch the Company is exempt from capital gains tax on
the profits realised from the sale of investments.
Any breach of the relevant eligibility conditions could lead
to the Company losing investment trust status and being
subject to corporation tax on capital gains realised within
the Company’s portfolio.
The Investment Manager monitors the investment portfolio,
income and proposed dividend levels to ensure that the
provisions of CTA 2010 are not breached. The results are
reported to the Board at each meeting.
Income forecasts are reviewed by the Company’s tax
advisor through the year who also reports to the Board on
the year-end tax position and on CTA 2010 compliance.
Legal, regulatory and reporting risks
Failure to comply with the London Stock Exchange
Listing Rules and Disclosure Guidance and Transparency
Rules; failure to meet the requirements of the Alternative
Investment Fund Managers Regulations, the provisions
of the Companies Act 2006 and other UK, European and
overseas legislation affecting UK companies.
Failure to meet the required accounting standards or
make appropriate disclosures in the Half Year and Annual
Reports.
The Board receives regular regulatory updates from
the Manager, Company Secretary, legal advisers and
the Auditor. The Board considers those reports and
recommendations and takes action accordingly.
The Board receives an annual report and update from the
Depositary.
Internal checklists and review procedures are in place at
service providers.
Inappropriate use of gearing
Gearing, either through the use of bank debt or derivatives,
may be utilised from time to time. Whilst the use of
gearing is intended to enhance the NAV total return, it will
have the opposite effect 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.
The Board receives regular reports from the Manager on
the levels of gearing in the portfolio. These are considered
against the gearing limits set out in the Board’s Investment
Guidelines and also in the context of current market
conditions and sentiment. The cost of debt is monitored
and a balance sought between term, cost and flexibility.
Other Financial risks
The Company’s investment activities expose it to a variety
of financial risks which include counterparty credit risk,
liquidity risk and the valuation of financial instruments.
Details of these risks together with the policies for
managing them are found in the Notes to the Financial
Statements.
Personnel changes at Investment Manager
Loss of portfolio manager or other key staff. The Chairman conducts regular meetings with the Fund
Management team.
The fee basis protects the core infrastructure and depth
and quality of resources. The fee structure incentivises
outperformance and is fundamental in the ability to retain
key staff.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
38 TR Property Investment Trust plc
Long-term viability
In accordance with provision 31 of the UK Corporate
Governance Code, which requires the Company to
assess the prospects of the Company over the longer
term, the Directors have assessed the prospects
of the Company over the coming three years. This
period is used by the Board during the strategic
planning process as it considers this period of time
to be appropriate for a business of the Company’s
nature and size.
This assessment takes account of the Company’s
current position and the policies and processes for
managing the principal and emerging risks set out on
pages 34 to 37 and the Company’s ability to continue
in operation and to meet its liabilities as they fall due
over the period of assessment.
In making this statement the Board carried out a
robust assessment of the principal and emerging
risks facing the Company, including those that might
threaten its business model, future performance,
solvency and liquidity.
In reaching their conclusions the Directors have
reviewed three year forecasts for the Company with
sensitivity analysis to a number of assumptions:
investee company dividend growth, interest rates,
foreign exchange rates, tax rates and asset value
growth.
In assessing of the viability of the Company the
Directors have noted that:
• The Company has a long-term investment strategy
under which it invests mainly in readily realisable,
publicly listed securities and which restricts the
level of borrowings.
• Of the current equity portfolio, 57% could be
liquidated within five trading days and 78% within
10trading days.
• On a Group basis, current assets exceed current
liabilities at the Balance Sheet Date.
• The Company invests in real estate related
companies which hold real estate assets and
invests in commercial real estate directly. These
investments provide cash receipts in the form of
dividends, property income distributions and rental
income.
• The Company is able to take advantage of its
closed-end investment trust company structure
to hold a proportion of its portfolio in less liquid,
direct property and the less liquid securities of
smaller companies with a view to long-term
outperformance.
• At the Balance Sheet date the Company had
£90million undrawn on its revolving loan facilities.
• The structure has also enabled the Company to
secure long-term financing. EUR 50 million loan
notes issued in 2016 are due to mature at par in
2026 and GBP 15 million loan notes issued on the
same date are due to mature at par in 2031.
• The result of this is that of our own debt, 39% has
fixed interest rates (assuming all loans are fully
drawn). The flexible structure allows debt levels to
be rapidly increased and reduced as needed.
• The impact of increasing interest rates through
2023 led to a number of companies suspending
or reducing their dividends. The majority of
companies have now returned to paying dividends,
although some at lower levels than previously. Our
earnings in the year under review were lower than
the prior year but the Company's capital reserve
can be utilised to support the dividend.
• The direct property portfolio is focused on the
industrial sector where the supply and demand
dynamics remain positive from an occupational
standpoint.
• The expenses of the Company are largely
predictable and modest in comparison with
the assets. Regular and robust monitoring of
revenue and expenditure forecasts are undertaken
throughout the year. Analysis has shown that the
Company could suffer a reduction in earnings of
80% and still be able to meet its liabilities from
revenue cashflow as they fell due. Expenses could
be met entirely from capital if required due to the
liquid nature of the portfolio.
Annual Report & Accounts 2024 39
• Index linked income will benefit from the higher
interest rates.
• Global interest rate increases have adversely
affected the property sector and the resulting
increase in the cost of debt has had an impact on
earnings.
• Some companies' fixed debt for the medium term
so, for these companies, the impact of current
rates will not be felt for a while.
• The Company has no employees and consequently
does not have redundancy or other employment
related liabilities or responsibilities.
• The Company retains title to its assets held by the
Custodian which are subject to further safeguards
imposed on the Depositary.
• The impact of a range of factors have been
considered in terms of the potential effect on
sterling. 67% of the portfolio is exposed to
currencies other than sterling.
The following assumptions have been made in
assessing the longer-term viability:
• Real Estate will continue to be an investible sector
of international stock markets and investors will
continue to wish to have exposure to that sector.
• Closed-end investment trust companies will
continue to be in demand by investors and
regulation or tax legislation will not change to
an extent to make the structure unattractive in
comparison to other investment products.
• The performance of the Company will continue
to be satisfactory. Should the Board deem that
performance is less than satisfactory, it has the
appropriate powers to replace the Investment
Manager.
The Company’s business model, capital structure
and strategy have enabled it to operate over many
decades and the Board expects this to continue into
the future. The Directors confirm therefore that they
have a reasonable expectation that the Company
will continue in operation and meet its liabilities in
full over the coming three years to 31March 2027.
By order of the Board
Kate Bolsover
Chairman
7 June 2024
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
40 TR Property Investment Trust plc
Governance
Annual Report & Accounts 2024 41
Directors
Kate Bolsover
Chairman
Experience:
Kate previously worked for Cazenove
Group and J.P. Morgan Cazenove
between 1995 and 2005 where she
was Managing Director of the mutual
fund business and latterly director of
Corporate Communications. Prior to
that, she worked extensively in the
investment fund industry and was
Managing Director of Baring’s mutual
funds group. Kate was previously a
non-executive director and chairman
of a number of other investment
trust companies and Chairman and
Trustee of Tomorrow’s People.
Skills and contribution to the Board:
From her executive experience, Kate
contributes significant and relevant
skills of the investment industry.
Her role on various boards also
gives her the relevant experience
in shareholder and investor
engagement.
Other appointments:
Kate is currently a non-executive
Director of Baillie Gifford & Co Ltd
and of Bellevue Healthcare Trust.
Appointed:
October 2019
Tim Gillbanks
Senior Independent Director
Experience:
Tim is a Chartered Accountant, with
30years’ experience in the financial
services and investment industry.
Most recently he spent 13 years at
Columbia Threadneedle Investments,
initially as Chief Financial Officer, then
Chief Operating Officer and finally as
interim Chief Executive Officer.
Skills and contribution to the Board:
Tim brings a wide experience,
particularly in financial services and
investment management.
Other appointments:
Tim is currently a Non-Executive
Director of Brown Shipley & Co
Limited, Janus Henderson (UK)
Investors Limited and Janus
Henderson Group Holdings Limited.
He is also Vice-Chair of the Board of
Trustees of Blood Cancer UK.
Appointed:
January 2018
Busola Sodeinde
Chairman of the Audit Committee
Experience:
Busola is a Chartered Management
Accountant who has spent most
of her executive career in Financial
Services. Until 2019 she was a
Managing Director/Chief Financial
Officer at State Street Global Markets
EMEA, prior to which she was
Finance Director to the Corporate
Finance team of Deutsche Bank
Capital Markets. Busola is the
founder of a digital publishing firm
focused on literacy and is also a
supporter of women-led ventures.
Skills and contribution to the Board:
Busola has considerable experience
in the financial services sector and
from her non-executive career has
gained expertise in audit and risk.
She also has experience in digital
(social) media and consumer
engagement.
Other appointments:
Busola is a non-executive director of
Hargreave Hale AIM VCT PLC and a
trustee of the Church Commissioners
for England, where she sits on the
Audit & Risk Committee.
Appointed:
January 2023
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
42 TR Property Investment Trust plc
Sarah-Jane Curtis
Non-Executive Director
Andrew Vaughan
Non-Executive Director
Experience:
Sarah-Jane is a Member of the Royal
Institution of Chartered Surveyors.
She was previously Business Director
at Bicester Village for Value Retail.
Prior to that, Sarah-Jane was a
director of Covent Garden for Capital
and Counties PLC. She has also
worked for Grosvenor for 24 years,
including as London Estate Director
(retail/residential) and Fund Manager
forLiverpoolONE.
Skills and contribution to the Board:
Sarah-Jane has gained extensive
experience during her varied
career, particularly in the retail and
experience sectors and in fund and
investment management activities.
Other appointments:
Sarah-Jane is currently Property
Director of Bicester Motion as well as
a consultant to Value Retail PLC.
Experience:
Andrew joined Redevco UK in 2000
as Managing Director and was
appointed CEO in 2011. He began his
career at Friends Provident where he
was a fund manager. Andrew spent
three years at Moorfield Group as an
Investment Specialist before joining
Redevco. He has a BSc in Urban
Estate Surveying.
Skills and contribution to the Board:
Andrew brings deep experience as a
pan-European direct property investor.
Other appointments:
Andrew retired as Chief Executive
Officer of Redevco B.V. in 2023.
Appointed:
January 2020
Appointed:
August 2022
Directors
continued
Annual Report & Accounts 2024 43
Managers
Marcus Phayre-Mudge
Fund Manager
Marcus Phayre-Mudge joined the management team for
the Company at Henderson Global Investors in January
1997, initially managing the Company’s direct property
portfolio and latterly focusing on real estate equities,
managing a number of UK and pan-European real estate
equity funds in addition to activities in the Trust. Marcus
moved to Thames River Capital in October 2004 where he
is also fund manager of Thames River Property Growth &
Income Fund Limited. Prior to joining Henderson, Marcus
was an investment surveyor at Knight Frank (1990) and
was made an Associate Partner in the fund management
division (1995). He qualified as a Chartered Surveyor in
1992 and has a BSc (Hons) in Land Management from
Reading University.
George Gay
Direct Property Fund Manager
George Gay has been the Direct Property Fund Manager
since 2008. He joined Thames River Capital in 2005 as
assistant direct property manager and qualified as a
Chartered Surveyor in 2006. George was previously at
niche City investment agent, Morgan Pepper where as
an investment graduate he gained considerable industry
experience. He has an MA in Property Valuation and Law
from City University.
Jo Elliott
Finance Manager
Jo Elliott has been Finance Manager since 1995, first at
Henderson Global Investors then, since January 2005,
at Thames River Capital, when she joined as CFO for the
property team. She joined Henderson Global Investors
in 1995, where she most recently held the position of
Director of Property, Finance & Operations, Europe.
Previously she was Corporate Finance Manager with
London and Edinburgh Trust plc and prior to that was
an investment/treasury analyst with Heron Corporation
plc. Jo has a BSc (Hons) in Zoology from the University
of Nottingham and qualified as a Chartered Accountant
with Ernst & Young in 1988.
Alban Lhonneur
Deputy Fund Manager
Alban Lhonneur, Deputy Fund Manager, joined Thames
River Capital in August 2008. He was previously at
Citigroup Global Markets as an Equity Research analyst
focusing on Continental European Real Estate. Prior
to that he was at Societe Generale Securities, where
he focused on transport equity research. He has a BSc
in Business and Management from the ESC Toulouse
including one year at Brunel University, London.
He also attended CERAM Nice High Business School.
In 2005 he obtained a post-graduate Specialised Master
in Finance in 2005 from ESCP-EAP.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
44 TR Property Investment Trust plc
Report of the Directors
The Directors present the audited financial statements
of the Group and the Company and their Strategic Report
and Report of Directors for the year ended 31 March
2024. The Group comprises TR Property Investment Trust
plc and its wholly owned subsidiaries. As permitted by
legislation, some matters normally included in the Report
of the Directors have been included in the Strategic Report
because the Board considers them to be of strategic
importance. Therefore, the review of the business of the
Company, recent events and outlook can be found on
pages 4 to 39.
Status
The Company is an investment company, as defined in
Section 833 of the Companies Act 2006 and operates as
an investment trust in accordance with Section 1158 of
the Corporation Tax Act 2010.
The Company has a single share class, Ordinary shares,
with a nominal value of 25p each which are premium
listed on the London Stock Exchange.
The Company has received confirmation from HM
Revenue & Customs that it has been accepted as an
approved investment trust for accounting periods
commencing on or after 1 April 2012 subject to the
Company continuing to meet the eligibility conditions of
Section 1158 Corporation Tax Act 2010 and the ongoing
requirements for approved companies in Chapter 3 of
Part 2 Investment Trust (Approved Company) (Tax)
Regulations 2011 (Statutory Instrument 2011/2999).
The Directors are of the opinion that the Company has
conducted and will continue to conduct its affairs so as
to maintain investment trust status. The Company has
also conducted its affairs, and will continue to conduct
its affairs, in such a way as to comply with the Individual
Savings Accounts Regulations. The Ordinary shares can
be held in Individual Savings Accounts ('ISAs').
Results and dividends
At 31 March 2024 the net assets of the Company amounted
to £1,116 million (2023: £968 million), equivalent on a per
share basis to 351.50p (2023: 305.13p).
Revenue earnings per share for the year amounted to
12.04p (2023: 17.22p) and the Directors recommend the
payment of a final dividend of 10.05p (2023: 9.85p) per
share bringing the total dividend for the year to 15.70p
(2023: 15.50p). In arriving at their dividend proposal, the
Board also reviewed the income forecast for the year to
March2025.
Performance details are set out in the Financial Highlights
on page 2 and the outcome of what the Directors consider
to be the Key Performance Indicators on pages 32 and 33.
The Chairman’s Statement and the Manager’s Report give full
details and analysis of the results for the year.
Share capital and buy-back activity
At 31 March 2024 the Company had 317,350,980 (2023:
317,350,980) ordinary shares in issue.
At the AGM in 2023 the Directors were given power to buy
back up to 47,570,911 ordinary shares. Since that AGM the
Directors have not bought back any ordinary shares under
that authority, which will expire at the 2024 AGM. The Board
will seek to renew the authority to make market purchases
of the Company’s ordinary shares at this year’s AGM.
Since 1 April 2024 to the date of this report, the Company
has made no market purchases of its ordinary shares
for cancellation or to be held in treasury. The Board
has not set a specific discount at which shares will be
repurchased.
Management arrangements and fees
Details of the management arrangements and fees are
set out in the Report of the Management Engagement
Committee beginning on page 54. Total fees paid to the
Manager in any one year (Management and Performance
Fees) may not exceed 4.99% of Group Equity Shareholders’
Funds. Total fees payable for the year to 31 March 2024
amount to 1.4% (2023: 0.6%) of Group Equity Shareholders’
Funds. A performance fee of £10,082,000 was earned in
the year ended 31 March 2024 (2023: £nil).
Basis of accounting and IFRS
The Group and Company financial statements for the
year ended 31 March 2024 have been prepared on a
going concern basis in accordance with UK-adopted
international accounting standards and in conformity with
the requirement of the Companies Act 2006. The financial
statements have also been prepared in accordance with
the Statement of Recommended Practice 'Financial
Statements of Investment Trust Companies and Venture
Capital Trusts' ('SORP') published by the Association of
Investment Companies to the extent that it is consistent
with UK adopted International accounting standards.
The accounting policies are set out in note 1 to the
Financial Statements on pages 76 to 79.
Annual Report & Accounts 2024 45
Financial instruments
The Company’s Financial Instruments comprise its
investment portfolio, cash balances, borrowings and
debtors and creditors that arise directly from its operations
such as sales and purchases awaiting settlement, profit
or loss balances on derivative instruments and accrued
income and expenses. The financial risk management
objectives and policies arising from its financial
instruments and exposure of the Company to risk are
disclosed in note 11 to the financial statements.
Risk management and internal control
The Board has overall responsibility for the Group’s system
of risk management and internal control and for reviewing
its effectiveness. The Portfolio Manager is responsible
for the day to day investment management decisions on
behalf of the Group. Accounting and Company Secretarial
services have both been outsourced.
The system of risk management and internal control aims
to ensure that the assets of the Group are safeguarded,
proper accounting records are maintained, and the
financial information used within the business and for
publication is reliable. Control of the risks identified,
covering financial, operational, compliance and risk
management, is embedded in the controls of the Group by
a series of regular investment performance and attribution
statements, financial and risk analyses, AIFM and Portfolio
Manager reports and quarterly control reports.
Key risks have been identified and controls put in
place to mitigate them, including those not directly the
responsibility of the AIFM or Portfolio Manager. The key
risks are explained in more detail in the Strategic Report
on pages 34 to 37.
The effectiveness of each third-party provider’s internal
controls is assessed on an ongoing basis by the
Compliance and Risk departments of the AIFM and
Portfolio Manager, the Administrator and the Company
Secretary. Each maintains its own system of risk
management and internal control and the Board and
Audit Committee receive regular reports from them.
The risk management and internal control system
is designed to provide reasonable, but not absolute,
assurance against material misstatement or loss and to
manage, rather than eliminate, risk of failure to achieve
objectives. As the Company has no employees and its
operational functions are undertaken by third parties,
the Audit Committee does not consider it necessary for
the Company to establish its own internal audit function.
Instead, the Audit Committee relies on internal control
reports received from its principal service providers to
satisfy itself as to the controls in place.
The Board has established a process for identifying,
evaluating and managing any major risks faced by the
Group. It undertakes an annual review of the Group’s
system of risk management and internal control in line
with relevant guidance. Business risks have also been
analysed by the Board and recorded in a risk map that
is reviewed regularly. Each quarter the Board receives a
formal report from each of the AIFM, Portfolio Manager,
the Administrator and the Company Secretary detailing
any identified internal control failures or errors.
The Board also considers the flow of information and
the interaction between the third-party service providers
and the controls in place to ensure accuracy and
completeness of the recording of assets and income.
The Board receives a report from the Portfolio Manager
setting out the key controls in operation.
The Board also has direct access to Company Secretarial
advice and services provided by Columbia Threadneedle
Investment Business Limited which, through its
nominated representative, is responsible for ensuring
that the Board and Committee procedures are followed
and that applicable regulations are complied with.
These controls have been in place throughout the year
under review and up to the date of signing the accounts.
Key risks identified by the Auditor are considered by the
Audit Committee to ensure robust internal controls and
monitoring procedures are in place in respect of these
risks on an ongoing basis.
Annual General Meeting (the ‘AGM’)
The Company’s AGM will be held at the Royal Automobile
Club, 89/91 Pall Mall, London SW1Y 5HS on Thursday
18 July 2024 at 2.30pm. The Notice of AGM is set out on
pages 106 to 110 and explanatory notes follow on pages
111 and112.
Material interests
There were no contracts subsisting during or at the end
of the year in which a Director of the Company is or was
materially interested and which is or was significant in
relation to the Company’s business. No Director has a
contract of service with the Company. Further details
regarding the Directors' appointment letters can be found
on page 53.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
46 TR Property Investment Trust plc
Listing Rule 9.8.4R
The Company confirms that there are no items which
require disclosure under Listing Rule 9.8.4R in respect of
the year ended 31 March 2024.
Voting interests
Rights and Obligations Attaching to Shares
Subject to applicable statutes and other shareholders’ rights,
shares may be issued with such rights and restrictions as
the Company may by ordinary resolution decide, or (if there
is no such resolution or so far as it does not make specific
provision) as the Board may decide. Subject to the Articles
of Association (the 'Articles'), the Companies Act 2006
and other shareholders’ rights, unissued shares are at the
disposal of the Board.
Voting
At a general meeting of the Company, when voting
is undertaken by way of a poll, each share affords its
ownerone vote.
Restrictions on Voting
No member shall be entitled to vote if he has been served
with a restriction notice (as defined in the Articles) after
failure to provide the Company with information concerning
interests in those shares required to be provided under the
Companies Act 2006.
Deadlines for Voting Rights
Votes are exercisable at a general meeting of the Company
in respect of which the business being voted upon is being
heard. Votes may be exercised in person, by proxy, or in
relation to corporate members, by corporate representatives.
The Articles provide a deadline for submission of proxy
forms of not less than 48 hours (or such shorter time as the
Board may determine) before the meeting (not excluding
non-working days).
Transfer of Shares
Any shares in the Company may be held in uncertificated
form and, subject to the Articles, title to uncertificated shares
may be transferred by means of a relevant system. Subject
to the Articles, any member may transfer all or any of his
certificated shares by an instrument of transfer in any usual
form or in any other form which the Board may approve.
Significant Voting Rights
As at 31 March 2024, the following shareholders had notified
that they held over 3% of the voting rights in the Company on
a non- discretionary basis:
Shareholder % of voting rights*
Brewin Dolphin Ltd 9.8%
Interactive Investor Share Dealing Services 8.4%
Hargreaves Lansdown Asset Management Ltd
5.5%
Rathbone Investment Management Ltd 4.9%
Integrafin Holdings plc
4.0%
Quilter Cheviot Investment Management Ltd 3.7%
Investec Wealth & Investment Ltd 3.6%
Charles Stanley Group plc 3.2%
Smith & Williamson Investment Managers 3.0%
* See above for further information on the voting rights of Ordinary shares.
Since 31 March 2024 the Company has not received any
further notifications.
Articles of Association
The Company’s Articles of Association may only be
amended by a special resolution at a General Meeting of
the shareholders. They were amended at the 2021 AGM
and are available to view on the Company’s website.
Report of the Directors
continued
Annual Report & Accounts 2024 47
Corporate Governance report
The Board of Directors is accountable to shareholders for
the governance of the Company’s affairs. This statement
describes how the principles of the 2018 UK Corporate
Governance Code (the 'Code') issued by the Financial
Reporting Council (the ‘FRC’) have been applied to the
affairs of the Company. The Code can be viewed at www.
frc.org.uk.
Application of the AIC Code’s Principles
In applying the principles of the Code, the Directors
have also taken account of the 2019 Code of Corporate
Governance published by the AIC (the ‘AIC Code’), of which
the Company is a member. The AIC Code establishes the
framework of best practice specifically for the Boards of
investment trust companies. Furthermore, the AIC Code
has full endorsement of the FRC, which means that AIC
members who report against the AIC Code meet their
obligations under the Code and the related disclosure
requirements contained in the Listing Rules. The AIC Code
can be viewed at www.theaic.co.uk.
The Directors believe that during the year under review the
Company has complied with the main principles and relevant
provisions of the Code, insofar as they apply to the Company’s
business, and with the provisions of the AIC Code.
Compliance Statement
The Directors note that the Company did not comply with
the following provisions of the Code in the year ended 31
March 2024:
Provision 9. Due to the nature and structure of the
Company the Board of non-executive directors does not
feel it is appropriate to appoint a chief executive officer.
Provision 24. The Board believes that all Directors, including
the Chairman, should sit on all of the Board’s Committees.
Provision 26. As the Company has no employees and its
operational functions are undertaken by third parties, the
Audit Committee does not consider it appropriate for the
Company to establish its own internal audit function. The
Company’s service providers provide assurance of their
effective system of risk management and internal and
control.
Provision 32. The Board does not have a separate
Remuneration Committee. The functions of a
Remuneration Committee are carried out by the
Nomination & Remuneration Committee.
Composition and Independence of the Board
The Board currently consists of five Directors, all of
whom are non-executive. The Board’s independence,
including that of the Chairman, has been considered
and all of the Directors are deemed to be
independent in character and have no relationships
or circumstances which are likely to affect their
judgement.
The Board subscribes to the view expressed in the AIC
Code that long-serving Directors should not be prevented
from forming part of an independent majority. It does
not consider that the length of a Director’s tenure, in
isolation, reduces their ability to act independently. The
Board’s policy on tenure is that continuity and experience
add significantly to the strength of the Board, although
it believes in the merits of an ongoing and progressive
refreshment of its composition.
Diversity
The Board recognises the benefit of diversity and as at
the date of this report it comprises two men and three
women. Diversity is taken into account as part of the
recruitment, appointment and succession planning
process. The Board is committed to appointing the
most appropriate candidate, regardless of gender or
other forms of diversity and therefore no targets have
been set against which to report.
In accordance with Listing Rule 9.8.6R (9), (10)
and (11) the Board has provided the following
information in relation to its diversity:
Board Gender as at 31 March 2024
(1)
Number
of Board
members
Percentage
of the
Board
Number
of senior
positions
on the
Board
(2)
Men 2 40% 1
Women 3 60%
(3)
2
(4)
(1)
The Company does not disclose the number of Directors in executive
management as this is not applicable for an investment trust company.
(2)
The three senior positions are: Chairman of the Board, Senior
Independent Director and Chairman of the Audit Committee. Note: the
position of the Chairman of the Audit Committee is not currently defined
as a senior position under the Listing Rules, however the Board believes
that, for an investment trust company, it should be regarded as such as it
is broadly equivalent to the Chief Financial Officer of a trading company.
(3)
This exceeds the Listing Rules target of 40%.
(4)
This exceeds the Listing Rules target of 1.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
48 TR Property Investment Trust plc
Board Ethnic Background as at 31 March 2024
(1)
Number
of Board
members
Percentage
of the
Board
Number
of senior
positions
on the
Board
(2)
White British
or other White
(including minority-
white groups) 4 80% 2
Mixed/Multiple
Ethnic Groups 1 20% 1
(1)
The Company does not disclose the number of Directors in executive
management as this is not applicable for an investment trust company.
(2)
The three senior positions are: Chairman of the Board, Senior
Independent Director and Chairman of the Audit Committee.
The information included in the above tables has
been obtained through questionnaires completed by
the individual Directors.
Powers of the Directors
Subject to the Company’s Articles of Association,
the Companies Act 2006 and any directions given
by special resolution, the business of the Company
is managed by the Board who may exercise all the
powers of the Company, whether relating to the
management of the business of the Company or not.
In particular, the Board may exercise all the powers of
the Company to borrow money and to mortgage or
charge any of its undertakings, property, assets and
uncalled capital and to issue debentures and other
securities and to give security for any debt, liability or
obligation of the Company to any third party. There
are no contracts or arrangements with third parties
which affect, alter or terminate upon a change of
control of the Company.
Directors
David Watson retired from the Board at the
conclusion of the 2023 AGM. The Directors’
biographies are set out on pages 41 and 42. All
Directors will stand for re-election by shareholders at
the forthcoming AGMin accordance with the Code.
Board committees
The Board has established an Audit Committee,
a Nomination & Remuneration Committee and
a Management Engagement Committee. All the
Directors of the Company are non-executive
and serve on each Committee of the Board, as
it is the Board’s policy to include all Directors
on all Committees. This encourages unity, clear
communication and avoids duplication of discussion
between the Board and its Committees.
The roles and responsibilities of each Committee
are set out in the individual Committee reports
which follow. Each Committee has written terms
of reference which clearly define its responsibilities
and duties. These can be found on the Company’s
website, are available on request and will also be
available for inspection at the AGM.
Board meetings
The number of meetings of the Board and Committees held during the year under review, and the attendance of
individual Directors, are shown below:
Board Audit MEC
Nomination &
Remuneration
Attended Eligible Attended Eligible Attended Eligible Attended Eligible
David Watson
1
2 2 1 1 0 0 0 0
Tim Gillbanks 6 6 2 2 1 1 1 1
Kate Bolsover 6 6 2 2 1 1 1 1
Sarah-Jane Curtis 6 6 2 2 1 1 1 1
Andrew Vaughan
2
5 6 2 2 1 1 1 1
Busola Sodeinde 6 6 2 2 1 1 1 1
1
Retired from the Board on 20 July 2023.
2
Absent from one Board meeting due to illness.
In addition to formal Board and Committee meetings, the Directors attended a separate meeting devoted to the
Company's strategy and also attend a number of ad hoc meetings which are convened as and when necessary.
Corporate Governance report
continued
Annual Report & Accounts 2024 49
The Board
The Board is responsible for the effective stewardship
of the Company’s affairs. Certain strategic issues
are monitored by the Board at meetings against a
framework which has been agreed with the Manager.
Additional meetings may be arranged as required. The
Board has a formal schedule of matters specifically
reserved for its decision, which are categorised under
various headings, including strategy, management,
structure, capital, financial reporting, internal controls,
gearing, asset allocation, share price discount, contracts,
investment policy, finance, risk, investment restrictions,
performance, corporate governance and Board
membership and appointments.
In order to enable them to discharge their responsibilities,
all Directors have full and timely access to relevant
information. At each meeting, the Board reviews the
Company’s investment performance and considers
financial analyses and other reports of an operational
nature. The Board monitors compliance with the
Company’s objectives and is responsible for setting asset
allocation and investment and gearing limits within which
the Portfolio Manager has discretion to act and thus
supervises the management of the investment portfolio,
which is contractually delegated to the Portfolio Manager.
The Board has responsibility for the approval of
investments in unquoted investments and any
investments in funds managed or advised by the
Portfolio Manager. It has also adopted a procedure
for Directors, in the furtherance of their duties, to take
independent professional advice at the expense of the
Company.
Conflicts of interest
In line with the Companies Act 2006, the Board has the
power to authorise any potential conflicts of interest
that may arise and impose such limits or conditions
as it thinks fit. A register of potential conflicts is
maintained and is reviewed at every Board meeting
to ensure all details are kept up-to-date. Appropriate
authorisation will be sought prior to the appointment of
any new Director or if any new conflicts arise.
Relations with shareholders
Shareholder relations are given high priority by the
Board, the AIFM and the Portfolio Manager. The prime
medium by which the Company communicates with
shareholders is through the Half Year and Annual
Reports which aim to provide shareholders with a clear
understanding of the Company’s activities and their
results. This information is supplemented by the daily
calculation of the Net Asset Value of the Company’s
ordinary shares which is published on the London
Stock Exchange.
This information is also available on the Company’s
website, www.trproperty.com, together with a
monthly factsheet and Manager commentary.
The Annual Report and Accounts and Notice of the
AGM are issued to shareholders so as to provide at least
twenty working days’ notice of the AGM, in accordance
with corporate governance best practice. Shareholders
wishing to lodge questions in advance of the AGM, or to
contact the Board at any other time, are invited to do so
by writing to the Company Secretary at the registered
address given on page114.
General presentations are given to both shareholders
and analysts following the publication of the
annual results. All meetings between the Manager
and shareholders are reported to the Board. The
Chairman is available to meet with shareholders
and has had a number of such meetings since her
appointment in July 2023.
Section 172 Companies Act 2006
Section 172 of the Companies Act 2006 requires
directors to act in good faith and in a way that is the
most likely to promote the success of the Company.
In accordance with the requirements of the
Companies (Miscellaneous Reporting) Regulations
2018, below, the Company explains how the
Directors have discharged their duty under section
172 during the year. Fulfilling this duty naturally
supports the Company in achieving its Investment
Objective and helps to ensure that all decisions are
made in a responsible and sustainable way.
On appointment, Directors’ are provided with a
detailed induction outlining their duties, legally
and regulatory, as a Director of a UK public limited
company and continue to receive regular relevant
technical updates and training. The Directors also
have access to the advice and services of the
Company Secretary and, when deemed necessary,
they have the opportunity to seek independent
professional advice in the furtherance of their duties
as a Director, at the Company’s expense.
Decision making
The Board considers the impact that any material
decision will have on all relevant stakeholders to ensure
that it is making a decision that promotes the long-term
success of the Company, whether this be, for example,
in relation to dividends, new investment opportunities
or the Company’s future strategy. In addition, the Board,
together with the Manager, holds a meeting focused on
strategy on an annual basis to look ahead in the market
and anticipate potential scenarios and how this may
impact the Company’s stakeholders.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
50 TR Property Investment Trust plc
Stakeholder Group and why
they are important
Board engagement
Shareholders
Shareholder support is
essential to the existence
of the Company and
delivery of the long-term
strategy of the business.
The Company has over 3,000 shareholders, including institutional and retail investors.
TheBoard is committed to maintaining open channels of communication and to engage with
shareholders in a manner they find most meaningful in order to gain an understanding of
their views. These include the channels below:
• Annual General Meeting – the Company welcomes and encourages attendance and
participation from shareholders at its AGM. The Manager gives a presentation at the
AGMon the Company’s performance and the future outlook. Shareholders have the
opportunity to meet the Directors and Manager and to address questions to them directly.
The Company values any feedback and questions it receives from shareholders ahead of
and during the AGM and takes action or makes changes if and when appropriate.
• Publications – the annual and half year reports are made available on the website and sent
to shareholders. These publications provide information on the Company and its portfolio
of investments and a better understanding of the Company’s financial position. This is
supplemented by daily publication of the NAV on the London Stock Exchange and monthly
factsheets on the Company’s website. The Company is open to feedback from shareholders
to improve its publications.
• Shareholder meetings – the Manager meets with shareholders regularly and their feedback
is shared with the Board.
• Working with the Brokers – the Manager and Brokers work together to maintain dialogue
with shareholders and prospective investors at scheduled meetings. The Board is provided
with regular updates at meetings and outside meetings if required.
• Shareholder concerns – in the event that shareholders wish to raise issues or concerns
with the Board, they are welcome to do so at any time by writing to the Chairman at the
registered office. The Senior Independent Director is also available to shareholders if they
have concerns that contact through the normal channel of the Chairman has failed to
resolve or for which such contact is inappropriate.
• Social media – the Company uses social media – specifically LinkedIn – to engage with
shareholders by providing timely updates on investment activity and Company news;
sharing factsheets and financial reports; and highlighting key market developments.
Through LinkedIn, the Company aims to ensure transparent and engaging communication
with shareholders, while raising the profile of the TR Property brand.
The Manager
Holding the Company’s
shares offers investors a
liquid investment vehicle
through which they can
obtain exposure to the
Company’s diversified
portfolio. The Investment
Manager’s performance is
critical for the Company
to successfully deliver its
investment strategy and
meet its objective.
Maintaining a close and constructive working relationship with the Manager is crucial, as the
Board and the Manager both aim to continue to achieve consistent, long-term returns in line
with the Company’s investment objective. Important components in the collaboration with
the Manager, representative of the Company’s culture include those listed below.
• Encouraging open, honest and collaborative discussions at all levels, allowing time and
space for original and innovative thinking.
• Ensuring that the impact on the Manager is considered fully and understood before any
business decision is made.
• Ensuring that any potential conflicts of interest are avoided or managed effectively.
The Board holds detailed discussions with the Manager on all key strategic and operational
topics on an ongoing basis. In addition, the Chairman regularly meets with the Manager to
ensure ongoing dialogue is maintained.
Stakeholders
The Board recognises the needs and importance of
the Company’s stakeholders and ensures that they are
considered during all its discussions and as part of its
decision making. Since the Company is an investment
trust company that is externally managed, the Company
does not have any employees (the Directors have a
Letter of Appointment and are not employees of the
Company), nor does it have a direct impact on the
community or environment in the conventional sense.
The Board recognises its key stakeholders and explains
below why these stakeholders are considered important
to the Company and the actions taken to ensure that
their interests are taken into account.
Corporate Governance report
continued
Annual Report & Accounts 2024 51
Stakeholder Group and why
they are important
Board engagement
External Service Providers, particularly the Company Secretary, the Administrator, the Registrar, the Depository and the
Broker
A range of advisers
enables the Company
to function and ensure
that it meets its relevant
obligations as an
investment trust company
and a constituent of the
FTSE 250.
The Board maintains regular contact with its key external providers and receives regular
reporting from them through Board and committee meetings, as well as outside of the
regular meeting cycle. Their advice, as well as their needs and views, are routinely taken into
account. The Management Engagement Committee formally assesses their performance,
fees and continuing appointment at least annually to ensure that the key service providers
continue to function at the required level and are appropriately remunerated to deliver
the expected level of service. The Audit Committee reviews and evaluates the control
environment in place at each service provider as appropriate.
Lenders
Availability of funding and
liquidity are crucial to the
Company’s ability to take
advantage of investment
opportunities as they arise.
The Board needs to demonstrate to lenders that it is a well-managed business, capable of
delivering long-term returns consistently.
Regulators
The Company can only
operate with the approval
of its regulators who have
a legitimate interest in how
the Company operates in
the market and treats its
shareholders.
The Board regularly considers how it and the Company meet the various regulatory and
statutory obligations and follows voluntary and best-practice guidance, including how any
governance decisions it makes can have an impact on its stakeholders, both in the shorter
and in the longer term.
Investee Companies
Portfolio companies are
ultimately shareholders’
assets and the Board
recognises the importance
of good stewardship and
communication with investee
companies in meeting the
Company’s investment
objective and strategy.
The Manager communicates regularly with portfolio companies and is an engaged
shareholder (on behalf of the Company). The Board monitors the Manager’s stewardship
arrangements and receives regular feedback on meetings with the management of portfolio
companies and voting at their general meetings.
The Board is always mindful of the requirement to act in
the best interests of shareholders as a whole and to have
regard to the other requirements of section 172 which form
part of Board’s decision-making process. The following key
decisions taken by the Board during the year ended 31 March
2024 are examples of this:
Gearing
During the financial year, the Company continued to
utilise its existing revolving loan facilities and undertook
a review of the available options as renewals fell due
throughout the year. The Board is keen to maintain a
wide range of banking relationships to ensure that it has
access to a diverse range of terms and is not reliant on
any one provider, however it was decided not to renew
the ICBC loan facility on the terms offered when it fell
due for renewal in November 2023. The facilities provide
flexibility and complement the longer-term private
placement fixed term debt that is in place. In addition, the
use of CFDs introduces gearing.
Dividends
Subject to shareholder approval of the proposed final
dividend, the Company will pay a total dividend of 15.70p
for the financial year, representing an increase of 1.3% on
the previous year. Income fell in the year under review and,
as a result, this year’s dividend is not covered by earnings.
Therefore the Company's revenue reserve has been utilised
to support the dividend payment. Initial forecasts for the
financial year to 31March 2025 indicate that revenue may
not be sufficient to cover fully the dividend in the forthcoming
financial year and the revenue reserve may be utilised
further. The Board recognises the importance of dividends to
shareholders and, subject to careful review of the Company’s
revenue forecasts and reserves together with the investment
outlook, it remains prepared to continue to use revenue
reserves to support the dividends paid to shareholders over
periods of income shortfall or volatility for identified reasons.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
52 TR Property Investment Trust plc
Portfolio management
During the year the Board continued to focus on the
performance of the Manager in achieving the Company’s
investment objective within an appropriate risk
framework. The Board continued to consider the impact
on the Company (including portfolio activity, risks and
opportunities, gearing, revenue forecasts and the operations
of other third party providers) of a number of events through
the financial year to ensure that the portfolio had sufficient
resilience together with the Company’s operational structure
to meet the unprecedented circumstances.
Culture and business conduct
The Board believes that having a good corporate
culture, particularly in its engagement with the Manager,
shareholders and other key stakeholders, aids delivery of
its long-term strategy. In line with this purpose, the Board
promotes a culture of openness, debate and integrity through
ongoing engagement with the Manager and with its other
service providers. The Directors agree that establishing and
maintaining a healthy corporate culture within the Board and
in its interaction with the Manager, shareholders and other
stakeholders will support the delivery of its purpose, values
and strategy. The Board strives to ensure that its culture is in
line with the Company’s purpose, values and strategy.
The Company has a number of policies and procedures in
place to assist with maintaining a culture of good governance
including those relating to diversity, Directors’ conflicts of
interest and Directors’ dealings in the Company’s shares. The
Board assesses and monitors compliance with these policies
as well as the general culture of the Board regularly through
Board meetings and in particular during the annual evaluation
process (for more information see the Board evaluation
section on page 53).
The Board seeks to appoint the best possible service
providers and evaluates their service on a regular basis as
described on page 54. The Board considers the culture of the
Manager and other service providers, including their policies,
practices and behaviour, through regular reporting from
those stakeholders and in particular during the annual review
of the performance and continuing appointment of all service
providers.
Employee, social impact and wider community
The Board recognises the requirement under the Companies
Act 2006 to detail information about human rights,
employees and community issues, including information
about any policies it has in relation to those matters and
the effectiveness of those policies. These requirements,
practically, are not applicable to the Company as it has no
employees, all the Directors are non-executive and it has
outsourced all operational functions to third-party service
providers. Therefore, the Company has not reported further in
respect of these provisions.
Directors’ indemnity
Directors’ and Officers’ liability insurance cover is in place in
respect of the Directors.
The Company’s Articles of Association allow it, to the extent
permitted by the Companies Acts, to indemnify the Directors
against any liability. The Company has entered into deeds of
indemnity for the benefit of each Director of the Company
in respect of liabilities which may attach to them in their
capacity as Directors of the Company. These provisions,
which are qualifying third party indemnity provisions as
defined by section 234 of the Companies Act 2006, were
introduced in January 2007 and currently remain in force.
Directors’ statement as to disclosure of
information to the Auditor
The Directors who were members of the Board at the time
of approving the Directors’ Report are listed on pages 41
and 42. Having made enquiries of fellow Directors and of the
Company’s Auditor, each of the Directors confirms that:
• so far as they are aware, there is no information of which
the Company’s Auditor is unaware; and
• each Director has taken all the steps that they ought to
have taken as a Director to make themselves aware of
any relevant audit information and to establish that the
Company’s Auditor is aware of that information.
This information is given and should be interpreted in
accordance with the provisions of Section 418 of the
Companies Act 2006.
By order of the Board,
Columbia Threadneedle Investment
Business Limited,
Company Secretary
7 June 2024
Corporate Governance report
continued
Annual Report & Accounts 2024 53
Report of the Nomination & Remuneration Committee
Key responsibilities
• Review the Board and its Committees and make
recommendations to the Board in relation to structure,
size and composition, the balance of knowledge,
experience and skill ranges;
• Consider succession planning and tenure policy and
oversee the development of a diverse pipeline;
• Consider the re-election of Directors; and
• Review the outcome of the Board evaluation process.
The Nomination & Remuneration Committee meets at
least annually, and more frequently as and when required.
It last met in March 2024.
Activity during the year
The Committee discussed succession planning of the
Board, its tenure and diversity policies. It reviews annually
the size and structure of the Board and will continue to
review succession planning and further recruitment,
taking into account the recommendations of Board
evaluations.
Board evaluation
Following the engagement of Tim Stephenson of
Stephenson & Co, to facilitate an independent, external
evaluation of the effectiveness of the Board, its
committees and the performance of each Director for
the previous financial year, the annual evaluation for the
year ended 31 March 2024 was carried out internally.
This took the form of questionnaires followed by
discussions to identify the effectiveness of the Board’s
activities, including its Committees. The Chairman also
reviewed with each Director their individual performance,
contribution and commitment. The appraisal of the
Chairman followed the same format and was led by
TimGillbanks.
The evaluation was considered by the Committee to be
constructive in terms of analysing Board composition and
providing recommendations on Board succession planning.
There were no significant actions arising from the
evaluation process and it was agreed that the current
composition of the Board and its Committees reflected a
suitable mix of skills and experience, and that the Board
as a whole, the individual Directors and its Committees
were functioning effectively.
In light of the performance evaluation, the Board confirms
that the performance of each Director continues to
be effective and that each Director demonstrates
commitment to their role. Therefore all Directors will
offer themselves for re-election at the forthcoming AGM.
Further information on each Director’s skills, experience
and their contribution to the Board are outlined in the
biographies on pages 41 and 42.
In accordance with the provisions of the Code, it is the
intention of the Board to engage an external facilitator to
assist with the performance evaluation every three years
and the next external evaluation will be carried out during
the year ending 31 March 2026. The Board will continue
to complete an internal board evaluation annually in the
intervening years.
Board’s policy on tenure
Provision 24 of the AIC Code of Corporate Governance
allows a different approach to tenure in relation to investment
companies, reflecting how they differ to operating
companies in not having a chief executive. The Board took
into consideration the approach when it adopted its ‘Policy
Governing Board Members’ Tenure and Reappointment’.
This policy outlines the Board’s approach to tenure and
reappointment of non-executive directors. It states its belief
that the value brought through continuity and experience of
Directors with longer periods of service is not only desirable,
but essential in an investment company. The Board did
not feel that it would be appropriate to set a specific tenure
limit for individual Directors or the Chairman of the Board
or its committees. Instead, the Board will seek to recruit
a new Director, on average, every two to three years so as
regularly to bring the stimulus of fresh thinking into the
Board’s discussions, ensuring that on each occasion that
the Board enters into new investment commitments, at least
half the Board members have direct personal experience of
negotiating previous commitments with the Manager.
Directors’ training
On appointment, new Directors are offered training to
suit their needs. Directors are also provided with key
information on the Company’s activities on a regular
basis, including regulatory and statutory requirements
and internal controls. Changes affecting Directors’
responsibilities are advised to the Board as they arise.
Directors ensure that they are updated on regulatory,
statutory and industry matters.
Letters of appointment
No Director has a contract of employment with
the Company. Directors’ terms and conditions for
appointment are set out in letters of appointment which
are available for inspection at the registered office of the
Company and at the AGM.
Kate Bolsover
Chairman of the Nomination & Remuneration Committee
7 June 2024
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
54 TR Property Investment Trust plc
Report of the Management Engagement Committee
(the 'MEC')
Key responsibilities
• Monitor and review the performance of the AIFM and
Portfolio Manager;
• Review the terms of the Investment Management
Agreement;
• Annually review the contracts and performance of
each external third-party service provider; and
• Review, on an annual basis, the remuneration of the
Directors.
In addition to investment management, the Board
has delegated to external third parties the depositary
and custodial services functions (which include the
safeguarding of assets), the day to day accounting,
company secretarial, administration and share
registration services. Each of these contracts was
entered into after full and proper consideration of the
quality of the services offered, including the control
systems in operation insofar as they relate to the
affairs of the Company. The MEC determines and
approves Directors’ fees, having regard to the level of
fees payable to non- executive Directors in the industry
generally, the role that individual Directors fulfil in
respect of Board and Committee responsibilities and
the time committed to the Company’s affairs. For
further details please see the Directors’ Remuneration
Report on pages 59 to 61.
The MEC meets at least annually, towards the end of
the financial year and last met in March 2024.
Activity during the year
At the meeting held in March 2024, the MEC
reviewed the performance of the AIFM and Portfolio
Manager and considered both the appropriateness
of the Manager’s appointment and the contractual
arrangements (including the structure and level of
remuneration) with the Manager.
In addition to the reviews by the MEC, the Board
reviewed and considered performance reports from the
Portfolio Manager at each Board meeting. The Board
also received regular reports from the Administrator
and Company Secretary.
The Board believes that the Manager’s track record and
performance remains outstanding. As a result, the MEC
confirmed that the AIFM and Portfolio Manager should
be retained for the financial year ending 31 March
2025, being in the best interests of all shareholders.
Asummary of the significant terms of the Investment
Management Agreement and the third-party service
providers who support the Company are set out below.
During the year, the MEC also reviewed the performance
of all the Company's third party service providers,
including BNP Paribas, Computershare, Columbia
Threadneedle Investments acting as Company
Secretary, both firms of corporate brokers (Panmure
Gordon and Stifel) and PwC (as tax advisors). The
Portfolio Manager provides regular updates on the
performance of all third-party providers during the year
and attended this part of the MEC Meeting. The MEC
confirmed that it was satisfied with the level of services
delivered by each third party provider.
Management arrangements and fees
Columbia Threadneedle Investment Business Limited
acts as the Company’s Alternative Investment Fund
Manager in accordance with the Alternative Investment
Fund Managers Directive, with portfolio management
delegated to the Investment Manager, Thames River
Capital LLP. The significant terms of the Investment
Management Agreement with the Manager are as
follows:
Notice period
The Investment Management Agreement (‘IMA’)
provides for termination of the agreement by either
party without compensation on the provision of not
less than 12 months’ written notice.
Management fees
The fee for the period under review was a fixed fee of
£4,090,000 plus an ad valorem fee of 0.20% pa based
on the net asset value (determined in accordance with
the AIC method of valuation) on the last day of March,
June, September and December, payable quarterly in
advance. The fee arrangements have been reviewed by
the Board for the year to 31 March 2025 and the fixed
element of the fee will increase to £4,180,000, whilst
the ad valorem rate will remain unchanged.
The Board continues to consider that the fee structure
aligns the interests of the shareholder and the Manager
as well as being highly competitive.
The fee arrangements will continue to be reviewed on
an annual basis.
Performance fees
In addition to the management fees, the Board has
agreed to pay the Manager performance related fees in
respect of an accounting period if certain performance
objectives are achieved.
Annual Report & Accounts 2024 55
A performance fee is payable if the total return of
adjusted net assets (after deduction of all Base
Management Fees and other expenses), as defined
in the IMA, at 31 March each year outperforms the
total return of the Company’s benchmark plus 1%
(the ‘hurdle rate’); this outperformance (expressed
as a percentage) is known as the ‘percentage
outperformance’. Any fee payable will be the
amount equivalent to the adjusted net assets at
31 March each year multiplied by the percentage
outperformance, then multiplied by 15%. The
maximum performance fee payable for a period is
capped at 1.5% of the adjusted net assets. However,
if the adjusted net assets at the end of any period
are less than at the beginning of the period, the
maximum performance fee payable will be limited to
1% of the adjusted net assets.
‘Adjusted Net Assets’ means the Net Asset Value
after (i) excluding any increases or decreases in Net
Asset Value attributable to the issue or repurchase of
any Ordinary Shares; (ii) adding back the aggregate
amount of any dividends paid or distributions made
in respect of any Ordinary Shares; and (iii) excluding
the amount of any Performance Fee accrued for
theperiod.
If the total return of shareholders’ funds for any
performance period is less than the benchmark
for the relevant performance period, such
underperformance (expressed as a percentage) will
be carried forward to future performance periods.
If any fee exceeds the cap, such excess performance
(expressed as a percentage) will be carried
forward and applied to offset any percentage
underperformance in future performance periods.
In the event that the benchmark is exceeded but
the hurdle is not, that outperformance of the
benchmark can be used to offset past or future
underperformance. These amounts can be used for
offset purposes only and therefore cannot have the
effect of creating a fee in a year where a fee would
not otherwise be payable or increasing the fee in
that year. The carry forward of outperformance at
31March 2024 is 0.4% (2023:0.4%).
Depositary arrangements and fees
BNP Paribas acts as the Company's Depositary,
in accordance with the AIFMD. The Depositary’s
responsibilities include: cash monitoring; segregation
and safe keeping of the Company’s financial
instruments; and monitoring the Company’s
compliance with investment and leverage
requirements. The Depositary receives for its services
a fee of 2.0 basis points per annum on the first
£150million of the Company’s assets, 1.4 basis points
per annum on assets above £150 million and below
£500 million and 0.75 basis points on assets above
£500 million.
Review of third party service
providers fees
Custody and Administration Services are provided by
BNP Paribas and Company Secretarial Services by
Columbia Threadneedle Investment Business Limited.
The fees for these services are charged directly to the
Company and are disclosed within other administrative
expenses disclosed in notes to the accounts.
Kate Bolsover
Chairman of the Management
Engagement Committee
7 June 2024
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
56 TR Property Investment Trust plc
Report of the Audit Committee
Key responsibilities
• Review accounting policies and significant financial
reporting judgements;
• Consider and recommend to the Board for approval the
contents of the draft Half year and Annual Reports;
• Review the findings of the audit with the external
auditor;
• Monitor, together with the Manager, the Company’s
compliance with financial reporting, maintenance of
Investment Trust status and regulatory requirements;
• Review the adequacy and effectiveness of the
Company’s system of risk management and internal
control;
• Review reports from key third party service providers;
and
• Consider the impact of providing non-audit services on
the external Auditor’s independence and objectivity.
Representatives of the Manager’s Internal Audit and
Compliance departments may attend Committee
meetings at the Committee Chairman’s request.
Representatives of the Company’s Auditor attend the
Committee meetings at which the draft Half Year and
Annual Report and Accounts are reviewed and are given
the opportunity to speak to the Committee members
without the presence of the representatives of the
Manager.
The Board recognises the requirement for at least one
Committee member to have recent and relevant financial
experience and for the Audit Committee as a whole to
have competence relevant to the sector. The Committee
Chairman, Ms Sodeinde and Mr Gillbanks are qualified
accountants with extensive and recent experience in the
Financial Services Industry. The other members of the
Committee have a combination of property, financial,
investment and business experience through senior
positions held throughout their careers.
Activity during the year
During the year the Committee met twice with all
members at each meeting and considered the following:
• Consideration of the Risk Map: any changes to the
likelihood or impact of risks and consequential
changes required to Board Monitoring and mitigation
procedures. Consideration of any new or emerging
risks and inclusion in the Risk Map if appropriate.
This has included consideration of the impact of
inflationary and interest rate increases, and political
unrest and military activity in various parts of the world
across a range of risk categories,
• The Group’s Internal Controls and consideration of the
Reports thereon;
• The ISAE/AAF reports or their equivalent from
Columbia Threadneedle and BNP Paribas;
• Whether the Company should have its own internal
audit function;
• The external Auditor’s planning memorandum setting
out the scope of the annual audit and proposed key
areas of focus;
• The reports from the Auditor concerning its audit
of the Financial Statements of the Company and
Consideration of Significant issues in relation to the
Financial Statements;
• The appropriateness of, and any changes to, the
accounting policies of the Company, including the
reasonableness of any judgements required by such
policies;
• The Long-Term Viability statement and consideration
of the preparation of the Financial Statements on
a Going Concern basis, taking account of forward
looking income forecasts, the liquidity of the
investment portfolio and debt profile;
• The financial and other disclosures in the Financial
Statements;
• The information presented in the Half Year and Annual
Reports to assess whether, taken as a whole, they are
fair, balanced and understandable and the information
presented will enable shareholders to assess the
Company’s position, performance, business model and
strategy;
• The performance of the external auditor, to approve
their audit fees and consider the assessment of
independence;
• The review and subsequent proposal to the Board of
the interim and final dividends; and
• The reviewal of the Committee’s terms of reference,
ensuring they remain appropriate and compliant with
the UK Corporate Governance Code.
Annual Report & Accounts 2024 57
Going concern
In assessing whether it continues to be appropriate to
prepare the Accounts on a Going Concern basis, the
Committee has made a detailed assessment of the
ability of the Company and 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 revenue received
and reductions in market liquidity.
In light of the testing carried out, the overall levels of
the investment liquidity held by the Company and the
significant net asset position, the Parent Company and
Group, the Directors confirm that they are satisfied that
the Company and the Group have adequate financial
resources to continue in operation for at least the
next 12months following the signing of the financial
statements and therefore it is appropriate to continue to
adopt the Going Concern basis of accounting.
The long-term viability of the Company was also
assessed as set out on pages 38 and 39.
Risk management and internal control
The Board has overall responsibility for the Group’s
system of Risk Management and Internal Control and for
reviewing their effectiveness. Key risks identified by the
Auditor are considered by the Audit Committee to ensure
that robust internal controls and monitoring procedures
in respect of these are in place on an ongoing basis.
Further details can be found on page 45.
The Audit Committee received and considered reports on
Internal Controls from the key service providers. No areas
of concern were highlighted.
The Company’s Risk Map was considered to identify
any emerging risks and whether any adjustments were
required to existing risks, and the controls and mitigation
measures in place in respect of those risks.
Elevated levels of inflation and interest rates and the
associated risks were reflected in the risk map.
Political uncertainty and change, and military action in
the Ukraine and Middle East, were considered with any
potential impact reflected in the risk map.
Based on the processes and controls in place within
Columbia Threadneedle Investments and other
significant service providers, the Board has concurred
that there is no current need for the Company to have its
own internal audit function.
The audit Chairman and Mr Gillbanks met with the
head of Internal Audit of Columbia Threadneedle to
obtain feedback after a recent internal audit programme
covering Thames River Capital. This was positive and no
points of concern we raised.
Significant issues in relation to the financial
statements
The Committee has considered this report and financial
statements and the Long-Term Viability statement
on pages 38 and 39. The Committee considered the
Auditor’s assessment of risk of material misstatement
and reviewed the internal controls in place in respect
of the key areas identified and the process by which
the Board monitors each of the procedures to give the
Committee comfort on those risks on an ongoing basis.
Those risks are also highlighted in the Committee’s Risk
Map.
• Carrying amount of listed investments (Group and
Parent Company) – the Group’s investments are priced
for the daily NAV by BNP Paribas.
The quoted assets are priced by the Administrator’s
Global Pricing Platform which uses independent external
pricing sources. The control process surrounding this is
set out in the BNP Paribas AAF 01/06 Internal Controls
Report and testing by the reporting accountant for the
period reported to 30 September 2023 which did not
reveal any significant exceptions. The quarterly control
report to the Board from BNP Paribas covering the period
up to 31 March 2024 disclosed no significant issues to
report. In addition, on each business day, the Manager
estimates the NAV using an alternative pricing source as
an independent check.
The Auditor agreed 100% of the listed investments of the
portfolio to externally quoted prices and independently
received third-party confirmations from investment
custodians and found the carrying value of listed
investments to be acceptable.
• Valuation of Direct Property Investments (Group and
Parent Company) – the physical property portfolio is
valued every six months by professional independent
valuers.
Knight Frank LLP value the portfolio on the basis of
Fair Value in accordance with the RICS Valuation –
Professional Standards VPS4 (1.5) Fair Value and VPGA
1 Valuations for Inclusion in Financial Statements,
which apply the definition of Fair Value adopted by the
International Financial Reporting Standards. IFRS 13
defines Fair Value as:
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
58 TR Property Investment Trust plc
‘The amount for which an asset could be exchanged,
a liability settled, or an equity instrument granted
could be exchanged, between knowledgeable, willing
parties in an arm’s length transaction.’
In undertaking their valuation of each property,
Knight Frank make their assessment on the basis of
a collation and analysis of appropriate comparable
investments, rental and sale transactions, together
with evidence of demand within the vicinity of each
property. This information is then applied to the
properties, taking into account size, location, terms,
covenant and other material factors.
The Board has reviewed reports from the Manager
and the external valuer and determined the valuation
to be reasonable.
The Auditor has set out their detailed testing and
procedures in respect of the direct property valuation
and concluded that they found the Company’s
valuation of investment properties to be acceptable.
There has been nothing brought to the Committee’s
attention in respect of the financial statements for
the year ended 31 March 2024 that was material
or significant or that the Committee felt should be
brought to shareholders’ attention.
Auditor assessment and independence
The Company’s external auditor, KPMG LLP ('KPMG')
was appointed as the Company’s auditor at the 2016
AGM. The Committee undertook a review during
2021 to ensure that shareholders were receiving
the best services and value for money. A number of
firms were invited to express interest and respond
on a small number of key points. The decision was
made for the audit to remain with KPMG. Their first
Audit Partner rotated off the Company's account
in 2021 and this is Mr Merchant’s third year as the
Company’s Audit Partner.
The Committee expects to repeat a tender process
no later than 2026 in respect of the audit for the
following 31 March year end, in line with the current
audit regulations.
At the half year meeting of the Committee, KPMG
presented their audit plan for the year end and the
Committee considered the audit process and fee
proposal. The Committee also reviewed KPMG’s
independence policies and procedures, including
quality assurance procedures. It was considered that
those policies are fit for purpose and the Directors
are satisfied that KPMG is independent.
Total fees payable to the Auditor in respect of the
audit for the year to 31 March 2024 were
£114,000 (2023: £97,000), which were approved by
the Audit Committee.
The Committee has approved and implemented
a policy on the engagement of the Auditor to
supply non-audit services, taking into account the
recommendations of the Accounting Practices Board
with a view to ensuring that the external Auditor does
not provide non-audit services that have the potential
to impair or appear to impair the independence of
their audit role. In addition, the Committee reviewed
the actions put in place by the Auditor to ensure there
was a clear separation between audit and advisory
services. The Committee does not believe there to
be any impediment to the Auditor’s objectivity and
independence.
Full details of the Auditor’s fees are provided in note
6 to the accounts on page 81. The fees for non-audit
services for the year to 31 March 2024 were nil
(2023: nil).
Following each audit, the Committee reviews the
audit process and considers its effectiveness and
the quality of the services provided to the Company.
Within this process, the Committee takes into
consideration their own assessment, the self-
evaluation of the auditor and the Audit Quality Review
Report produced by the FRC in order to monitor the
progress of the Auditor’s performance comparable
with its peers and the targets set by the FRC. The
review following the completion of the 2024 audit
concluded that the Committee was satisfied with
the Auditor’s effectiveness and performance. The
Committee felt that KPMG had run an effective and
efficient audit process with appropriate challenge.
A resolution to re-appoint KPMG LLP as the
Company’s Auditor will be put to shareholders at the
forthcomingAGM.
Busola Sodeinde
Chairman of the Audit Committee
7 June 2024
Report of the Audit Committee
continued
Annual Report & Accounts 2024 59
Directors’ Remuneration Report
Introduction
The Board has prepared this report and the Directors’
Remuneration Policy, in accordance with the
requirements of Schedule 8 of the Large and Medium
Sized Companies and Groups (Accounts and Reports)
Regulations 2013. An ordinary resolution for the
approval of this report will be put to the members at the
forthcoming Annual General Meeting.
The law requires the Company’s Auditor, KPMG LLP,
to audit certain of the disclosures provided. Where
disclosures have been audited, they are indicated
as such. The Auditor’s opinion is included in the
‘Independent Auditor’s Report’.
Annual statement from the chairman
ofthecommittee
The Nomination & Remuneration Committee met in
March 2024 and considered the results and feedback
from the Board evaluation. It was agreed that the
Directors’ fees would be increased, with effect from
1April 2024, to the following levels: Chairman £76,000;
Audit Committee Chairman £45,500; Senior Independent
Director £45,500; and other Directors £39,000.
Directors’ remuneration policy
The Company’s policy is that the fees payable to the
Directors should reflect the time spent by the Board on the
Company’s affairs and the responsibilities borne by the
Directors and should be sufficient to enable candidates of
high calibre to be recruited. The policy is for the Chairman
of the Board, the chairman of the Audit Committee and
the Senior Independent Director to be paid higher fees
than the other Directors in recognition of their more
onerous roles. This policy was approved by the members
at the 2023 AGM, and the Directors’ intention is that
this will continue for the year ending 31 March 2025. In
accordance with the regulations, an ordinary resolution to
approve the Directors’ remuneration policy will next be put
to shareholders at the AGM on to be held in 2026.
The Directors are paid in the form of fees, payable monthly
in arrears, to the Director personally or to a third party
specified by that Director. There are no long-term incentive
schemes, share option schemes or pension arrangements
and the fees are not specifically related to the Directors’
performance, either individually or collectively.
The Board comprises entirely of non-executive Directors,
whose appointments are reviewed formally every year.
None of the Directors have a contract of service and a
Director may resign by notice in writing to the Board at
any time; there are no notice periods and no payments
made for loss of office. The terms of their appointment
are detailed in an appointment letter when they join the
Board. As the Directors do not have service contracts,
the Company does not have a policy on termination
payments. The Company’s Articles of Association
currently limit the total aggregate fees payable to the
Board to £300,000 per annum.
Any shareholders’ views in respect of Directors’
remuneration are communicated at the Company’s
AGM and are taken into account in formulating the
Directors remuneration policy. At the 2023 AGM,
99.6% ofshareholders’ votes cast were in favour of the
resolution approving the Directors’ Remuneration Report,
with 0.4%against, showing very significant shareholder
support.
The components of the remuneration package for
Non-executive Directors, which are comprised in the
Directors’ remuneration policy of the Company are set out
below, with a description and approach to determination.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
60 TR Property Investment Trust plc
Directors’ Remuneration report
continued
Remuneration Type
Fixed Fees Additional Fees Expenses Other
The aggregate limit for
the fees for the Board
as a whole is £300,000
per annum which, in
accordance with the
Articles of Association,
is divided between the
Directors as they deem
appropriate.
Fees are set to reflect
the role of each Board
member and the time
commitment required
to carry out their duties
and are reviewed with
reference to the fees paid
to Directors of similar
investment companies.
Additional fees may be paid
to any Director who fulfils the
role of the Chairman, who
chairs any committee of the
Board or who is appointed
as the Senior Independent
Director.
These fees are set at a
competitive level to reflect
experience and time
commitment.
The Directors are entitled
to be paid all reasonable
expenses properly incurred
by them attending meetings
with shareholders or other
Directors or otherwise in
connection with the discharge
of their duties as Directors.
Board members are not
eligible for bonuses, pension
benefits, share options,
long-term incentive schemed
or other non-cash benefits or
taxable expenses.
Annual remuneration report
For the year ended 31 March 2024, Directors’ fees were paid at the annual rates of Chairman: £73,000 (2023:
£72,000) and all other Directors: £37,000 (2023: £36,000). An additional £6,000 was paid per annum for each
of the roles of Audit Committee Chairman and Senior Independent Director. The actual amounts paid to the
Directors during the financial year under review are as shown below.
Single total figure table (audited)
The fees payable in respect of each of the Directors who served during the financial year were as follows:
31 March 2024
£
31 March 2023
£
David Watson
(1)
22,000 72,000
Tim Gillbanks
(2)
43,000 42,000
Kate Bolsover
(3)
64,000 40,069
Sarah-Jane Curtis 37,000 36,000
Andrew Vaughan
(4)
37,000 24,000
Busola Sodeinde
(5)
40,000 6,831
Simon Marrison
(6)
n/a 14,000
Total 243,000 234,900
All fees are at a fixed rate and there is no variable remuneration. Fees are pro-rated where a change takes place
during a financial year There were no payments to third parties included in the fees referred to in the table above
There are no further fees to disclose as the Company has no employees, chief executive or executive directors.
(1)
resigned from the Board on 20 July 2023
(2)
appointed Senior Independent Director on 1 October 2023
(3)
appointed Chairman on 20 July 2023
(4)
appointed to the Board on 1 August 2022
(5)
appointed to the Board on 24 January 2023 and as Audit Committee Chairman on 1 October 2023
(6)
resigned from the Board on 26 July 2022
Annual Report & Accounts 2024 61
Directors’ shareholdings (audited)
The interests of the Directors who held office at the year
end in the shares of the Company were as follows:
Ordinary shares of 25 pence
31 March 2024
or as at date of
appointment
31 March 2023
or as at date of
appointment
Kate Bolsover 16,063 2,360
Sarah-Jane Curtis 16,787 10,009
Tim Gillbanks 5,000 -
Busola Sodeinde - -
Andrew Vaughan 52,819 11,071
Since 31 March 2024 to the date of this report, there
have been no changes to the Directors’ interests in the
shares of the Company.
Annual percentage change in Directors' Fees
The table below sets out the annual percentage change in
fees for each Director who served in the year under review.
Director
% change
from
2023
to 2024
(audited)
%
% change
from
2022
to 2023
(audited)
%
% change
from
2021
to 2022
(audited)
%
% change
from 2020
to 2021
(audited)
%
David Watson
(1)
n/a +2.9 +15.8 +51.2
Tim Gillbanks +2.4 +5.0 0.0 0.0
Kate Bolsover
(2)
+59.7 +14.5 0.0 +100.0
Sarah-Jane
Curtis
(3)
+2.8 +2.9 0.0 +449.3
Andrew
Vaughan
(4)
+54.2 n/a n/a n/a
Busola
Sodeinde
(5)
+485.6 n/a n/a n/a
(1)
Appointed as Chairman with effect from 28 July 2020, the increases
reflect the initial part year and subsequent full year in the role. Retired on
20 July 2023.
(2)
Appointed as a non-executive Director on 1 October 2019, as Senior
Independent Director on 26 July 2022 and as Chairman on 20 July 2023,
the increases reflect the first full year with the Company and subsequent
changes in role.
(3)
Appointed as a non-executive Director on 28 January 2020, the increase
in 2021 reflects the first full year with the Company.
(4)
Appointed as a non-executive Director on 1 August 2022, the increase in
2024 reflects the first full year with the Company.
(5)
Appointed as a non-executive Director on 24 January 2023 and as Audit
Committee Chairman on 1 October 2023, the increase in 2024 reflects the
first full year with the Company.
The following table shows the total remuneration for the
Chairman over the fiveyears ended 31 December 2024:
Year ended 31 December
Fees
£'000s
2024 73.0
2023 72.0
2022 70.0
2021 70.0
2020 70.0
The table below is shown to enable shareholders to
assess the relative importance of spend on remuneration.
It compares the remuneration, excluding taxable benefits,
against the shareholder distribution of dividends.
Actual expenditure
2024
£’000
2023
£’000 Change
Dividends paid 49,190 47,127 +4.38%
Directors’ fees 243 228 +6.6%
500
1000
1500
2000
2500
3000
Mar-21 Mar-22Mar-20Mar-19Mar-18Mar-17Mar-16Mar-15Mar-14
Mar-23
Benchmark Total Return TR Property Share Price Total Return
Mar-24
Company performance
The graph below compares, for the ten years ended
31 March 2024, the percentage change over each period
in the share price total return to shareholders compared
to the share price total return of benchmark, which the
Board considers to be the most appropriate benchmark
for investment performance measurement purposes. An
explanation of the performance of the Company is given
in the Chairman’s Statement and Manager’s Report.
Share Price Total Return assuming investment of £1,000 on 31 March
2014 and reinvestment of all dividends (excluding dealing expenses).
(Source: Thames River Capital)
Benchmark Total Return assuming notional investment into the index of
£1,000 on 31 March 2014. (Source: Thames River Capital)
Ordinary Share Class Performance: Total Return
over 10 years (rebased)
For and on behalf of the Board
Kate Bolsover
Chairman
7 June 2024
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
62 TR Property Investment Trust plc
Statement of Directors’ responsibilities in relation
to the Group financial statements
The Directors are responsible for preparing the Annual
Report and the Group and Parent Company 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. Directors are required to prepare the Group
financial statements in accordance with UK-adopted
international accounting standards and applicable
law and have elected to prepare the Parent Company
financial statements on the same basis.
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 apply them
consistently;
• make judgements and estimates that are reasonable,
relevant and reliable;
• state whether they have been prepared in accordance
with UK-adopted international accounting standards.
• 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.
In accordance with Disclosure Guidance and
Transparency Rule ('DTR') 4.1.16R, the financial
statements will form part of the annual financial
report prepared under DTR 4.1.17R and 4.1.18R.
The auditor’s report on these financial statements
provides no assurance over whether the annual
financial report has been prepared in accordance
with those requirements.
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 that 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
Kate Bolsover
Chairman
7 June 2024
Annual Report & Accounts 2024 63
Independent auditor’s report
to the members of TR Property Investment Trust Plc
1. Our opinion is unmodified
We have audited the financial statements of TR
Property Investment Trust plc (the 'Company') for the
year ended 31 March 2024 which comprise the Group
Statement of Comprehensive Income, Group and
Company Statements of Changes in Equity, Group and
Company Balance Sheets, Group and Company Cash
Flow Statements and the related notes, including the
accounting policies in note 1.
In our opinion:
• the financial statements give a true and fair view of
the state of the Group’s and of the Parent Company’s
affairs as at 31 March 2024 and of the Group’s profit
for the year then ended;
• the Group financial statements have been properly
prepared in accordance with UK-adopted international
accounting standards;
• the Parent Company financial statements have been
properly prepared in accordance with UK-adopted
international accounting standards and as applied in
accordance with the provisions of the Companies Act
2006; and
• the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
Overview
Materiality:
group financial
statements as a
whole
£11.9m (2023: £10.5m)
1% (2023: 1%) of Total Assets
Key audit matters vs 2023
Recurring risks
Valuation of direct property
investments
Carrying amount of listed
investments
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ('ISAs (UK)') and applicable
law. Our responsibilities are described below. We believe
that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
We were first appointed as auditor by the directors on
2 November 2016. The period of total uninterrupted
engagement is for the eight financial years ended
31 March 2024. We have fulfilled our ethical
responsibilities under, and we remain independent of
the Group in accordance with, UK ethical requirements
including the FRC Ethical Standard as applied to listed
public interest entities. No non-audit services prohibited
by that standard were provided.
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the
financial statements and include the most significant assessed risks of material misstatement (whether or not due
to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matters
(unchanged from 2023), in decreasing order of audit significance, in arriving at our audit opinion above, together with
our key audit procedures to address those matters and our findings from those procedures in order that the Company’s
members, as a body, may better understand the process by which we arrived at our audit opinion. These matters were
addressed, and our findings are based on procedures undertaken, in the context of, and solely for the purpose of, our
audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to
that opinion, and we do not provide a separate opinion on these matters.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
64 TR Property Investment Trust plc
Independent auditor’s report
continued
2. Key audit matters: our assessment of risks of material misstatement continued
The risk Our response
Valuation of direct property
investments
(Group and Parent)
(£38.4 million;
2023: £74.0 million)
Refer to pages 56 to
58 (Audit Committee
Report), pages 77 and 78
(accounting policy),and
note 10 on pages 84 to 88
(financial disclosures).
Subjective valuation:
3.2% (2023: 7%) of the Group’s, and
3.1% (2023: 6.8%) of the Parent
Company’s, total assets (by value) are
held in investment properties.
The fair value of each property requires
significant estimation using subjective
assumptions such as the estimated
rental value and yield assumptions.
These assumptions are impacted by a
number of factors including the quality
and condition of the properties and
tenant financial strength.
The effect of these matters is that,
as part of our risk assessment, we
determined that the valuation of
investment properties has a high
degree of estimation uncertainty, with a
potential range of reasonable outcomes
greater than our materiality for the
financial statements as a whole. The
financial statements (note 10) disclose
the sensitivity estimated by the Group.
We considered the impact of direct
property investment disposals during
the year, which decreased the portfolio
by 48.1% from £74.0 to £38.4m, on
our assessment of the valuation
of direct property investments as
a key audit matter. We determined
that, although the reduction in direct
property investment portfolio value
did reduce the inherent risk of material
misstatement of valuation, there
remained a high degree of estimation
uncertainty and should remain as a key
audit matter for the current year.
We performed the detailed tests below rather
than seeking to rely on any of the Group’s
controls, because the nature of the balance
is such that we would expect to obtain audit
evidence primarily through the detailed
procedures described.
Our procedures included:
•
Assessing valuer’s credentials: Using our own
property valuation specialist, we evaluated the
competence, experience and independence of
the Group’s external valuer;
•
Tests of detail: We compared the information
provided by the Group to its external property
valuer for a sample of properties, such as rental
income and tenancy data against supporting
documents including lease agreements;
•
Methodology choice: Using our own property
valuation specialist, we critically assessed
whether the valuation methodology adopted by
the Group's external valuer was in accordance
with the RICS Valuation Professional Standards
‘the Red Book’ and IFRS;
•
Benchmarking assumptions: Using our own
property valuation specialist, we compared the
key assumptions used by the Group's external
valuer including the estimated rental value
and yield for a sample of properties, against
industry benchmarks;
•
Assessing transparency: We considered the
adequacy of the Group’s disclosures about
the degree of estimation and sensitivity to key
assumptions made when valuing the direct
property investments.
Our Findings
• We found the Group’s valuation of investment
properties to be balanced (2023: balanced). We
have considered the associated disclosures to
be proportionate.
Annual Report & Accounts 2024 65
The risk Our response
Carrying amount of listed
investments
(Group and Parent)
(£1,070.8 million;
2023: £872.1 million)
Refer to pages 56 to 58
(Audit Committee Report),
page 78 (accounting policy)
and note 10 on pages 84 to
88 (financial disclosures).
Low risk, high value:
The portfolio of listed level 1
investments makes up 90.0% (2023:
83.0%) of the Group’s, and 87.3%
(2023: 80.2%) of the Parent Company’s,
total assets (by value) and is one of
the key drivers of results. We do not
consider these investments to be at
a high risk of material misstatement,
or to be subject to a significant level
of judgement because they comprise
liquid, quoted investments. However,
due to their materiality in the context
of the financial statements as a whole,
they are considered to be one of the
areas which had the greatest effect on
our overall audit strategy and allocation
of resources in planning and completing
our audit.
We performed the detailed tests below rather
than seeking to rely on any of the Group’s
controls, because the nature of the balance
is such that we would expect to obtain audit
evidence primarily through the detailed
procedures described.
Our procedures included:
• Test of detail: Agreeing the valuation of 100%
of level 1 listed investments in the portfolio to
externally quoted prices; and
• Enquiry of custodians: Agreeing 100% of
level 1 listed investment holdings in the
portfolio to independently received third party
confirmations from investment custodians.
Our findings
• We found no differences from third party
holdings confirmations nor from the externally
quoted prices of a size to require reporting to
the Audit Committee (2023: no differences).
3. Our application of materiality and an
overview of the scope of our audit
Materiality for the Group financial statements as a whole
was set at £11.9m (2023: £10.5m), determined with
reference to a benchmark of total assets, of which it
represents 1.0% (2023: 1.0%).
Materiality for the Parent Company financial statements
as a whole was set at £11.3m (2023: £9.97m), which
is the component materiality for the Parent Company
determined by the Group audit engagement team. This
is lower than the materiality we would otherwise have
determined with reference to Parent Company total
assets, of which it represents 0.92% (2023: 0.92%).
In line with our audit methodology, our procedures
on individual account balances and disclosures were
performed to a lower threshold, performance materiality,
so as to reduce to an acceptable level the risk that
individually immaterial misstatements in individual
account balances add up to a material amount across
the financial statements as a whole. Performance
materiality was set at 75% (2023: 75%) of materiality
for the financial statements as a whole, which equates
to £8.93m (2023: £7.85m) for the Group and £8.48m
(2023: £7.45m) for the Parent Company. We applied
this percentage in our determination of performance
materiality because we did not identify any factors
indicating an elevated level of risk.
We agreed to report to the Audit Committee any
corrected or uncorrected identified misstatements
exceeding £0.60m (2023: £0.53m ) for the Group
and exceeding £0.57m (2023: £0.50m) for the Parent
Company, in addition to other identified misstatements
that warranted reporting on qualitative grounds.
The audit team performed the audit of the Group as a
single aggregated set of financial information rather
than scoping in individual components. This approach
is unchanged from the prior year. The audit of the
Group and Parent Company was performed using the
materiality levels set out above and was performed by a
single audit team.
The scope of the audit work performed was fully
substantive as we did not rely upon the Group’s internal
controls over financial reporting.
Group materiality
£11.9m (2023: £10.5m)
£11.9m
Whole financial statements
materiality (2023: £10.5m)
£11.3m
Parent Company Materiality
(2023: £9.97m)
£8.93m
Whole financial statements
performance materiality
(2023: £7.85m)
£0.60m
Misstatements reported to
the audit committee (2023:
£0.53m)
Total Assets
£1,190m (2023: £1,051m)
Total Assets
Group Materiality
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
66 TR Property Investment Trust plc
4. The impact of climate change on our audit
We have performed a risk assessment of how the
impact of climate change may affect the financial
statements and our audit. Level 1 listed investments
make up 90.0% of the Group’s total assets, for which
fair value is determined as the quoted market price.
Therefore, we assessed that the financial statement
estimate that is primarily exposed to climate risk is the
investment property portfolio, for which the valuation
assumptions and estimates may be impacted by
physical and policy or legal climate risks, such as
flooding or an increase in climate related compliance
expenditure. We assessed that, whilst climate change
posed a risk to the determination of investment property
valuations in the current year, this risk was not significant
when considering both the nature and domicile of the
properties and the tenure of unexpired leases, along
with the reduction in the Group’s exposure to direct
investment property from £74.0m to £38.4m in the
current year. Therefore there was no significant impact of
climate change on our key audit matters.
We have read the disclosure of climate related
information in the front half of the financial statements
and considered consistency with the financial
statements and our audit knowledge.
5. Going concern
The Directors have prepared the financial statements on
the going concern basis as they do not intend to liquidate
the Group or the Company or to cease their operations,
and as they have concluded that the Group’s and the
Company’s financial position means that this is realistic.
They have also concluded that there are no material
uncertainties that could have cast significant doubt over
their ability to continue as a going concern for at least a
year from the date of approval of the financial statements
(the 'going concern period').
We used our knowledge of the Group, its industry, and the
general economic environment to identify the inherent
risks to its business model and analysed how those
risks might affect the Group or Company’s financial
resources or ability to continue operations over the going
concern period. The risks that we considered most likely
to adversely affect the Group or Company’s available
financial resources and its ability to operate over this
period were:
• The impact of a significant reduction in the valuation
of investments and the implications for the Group or
Company’s debt covenants;
• The liquidity of the investment portfolio and its ability
to meet the liabilities of the Group as and when they
fall due; and
• The operational resilience of key service organisations.
We considered whether these risks could plausibly affect
the liquidity or covenant compliance in the going concern
period by assessing the degree of downside assumption
that, individually and collectively, could result in a liquidity
issue, taking into account the Group or Company’s
current and projected cash and liquid investment position
(and the results of their reverse stress testing).
We considered whether the going concern disclosure
in note 1 to the financial statements gives a full and
accurate description of the Directors’ assessment of
going concern, including the identified risks and related
sensitivities.
Our conclusions based on this work:
• we consider that the Directors’ use of the going
concern basis of accounting in the preparation of the
financial statements is appropriate;
• we have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
collectively, may cast significant doubt on the Group’s
or Company's ability to continue as a going concern for
the going concern period;
• we have nothing material to add or draw attention to
in relation to the directors’ statement in note 1 to the
financial statements on the use of the going concern
basis of accounting with no material uncertainties
that may cast significant doubt over the Group and
Company’s use of that basis for the going concern
period, and we found the going concern disclosure in
note 1 to be acceptable; and
• the related statement under the Listing Rules set out
on page 57 is materially consistent with the financial
statements and our audit knowledge.
However, as we cannot predict all future events or
conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that
were reasonable at the time they were made, the above
conclusions are not a guarantee that the Group or the
Company will continue in operation.
Independent auditor’s report
continued
Annual Report & Accounts 2024 67
6. Fraud and breaches of laws and
regulations – ability to detect
Identifying and responding to risks of material
misstatement due to fraud
To identify risks of material misstatement due to fraud
('fraud risks') we assessed events or conditions that
could indicate an incentive or pressure to commit fraud
or provide an opportunity to commit fraud. Our risk
assessment procedures included:
• Enquiring of Directors as to the Group’s high-level
policies and procedures to prevent and detect fraud,
as well as whether they have knowledge of any actual,
suspected or alleged fraud;
• Assessing the segregation of duties in place between
the Directors, the Administrator and the Group’s
Investment Manager; and
• Reading Board and Audit Committee minutes.
We communicated identified fraud risk throughout the
audit team and remained alert to any indications of fraud
throughout the audit.
As required by auditing standards, we perform
procedures to address the risk of management override
of controls, in particular to the risk that management
may be in a position to make inappropriate accounting
entries. On this audit we have rebutted the fraud risk
related to revenue recognition because the revenue
is non-judgemental and straightforward, with limited
opportunity for manipulation. We did not identify any
significant unusual transactions or additional fraud risks.
We evaluated the design and implementation of the
controls over journal entries and other adjustments and
made inquiries of the Administrator about inappropriate
or unusual activity relating to the processing of journal
entries and other adjustments.
We substantively tested all material post-closing entries
and, based on the results of our risk assessment
procedures and understanding of the process, including
the segregation of duties between the Directors and
the Administrator, no further high- risk journal entries or
other adjustments were identified. We selected journal
entries for testing, examining appropriate supporting
documentation for the selected entries which included a
haphazard selection of entries incorporating an element
of unpredictability.
Identifying and responding to risks of material
misstatement due to non-compliance with laws and
regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on
the financial statements from our general commercial
and sector experience and through discussion with the
Directors, the Investment Manager and the Administrator
(as required by auditing standards) and discussed with
the Directors the policies and procedures regarding
compliance with laws and regulations. As the Parent
Company is regulated, our assessment of risks involved
gaining an understanding of the control environment
including the entity’s procedures for complying with
regulatory requirements We communicated identified
laws and regulations throughout our team and remained
alert to any indications of non- compliance throughout
the audit.
The potential effect of these laws and regulations on the
financial statements varies considerably.
Firstly, the Group is subject to laws and regulations
that directly affect the financial statements including
financial reporting legislation (including related
companies legislation), distributable profits legislation,
and its qualification as an Investment Trust under UK
taxation legislation, any breach of which could lead to
the Group losing various deductions and exemptions
from UK corporation tax, and we assessed the extent of
compliance with these laws and regulations as part of
our procedures on the related financial statement items.
We assessed the legality of the distributions made by
the Company in the period based on comparing the
dividends paid to the distributable reserves prior to each
distribution.
Secondly, the Group is subject to many other laws and
regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures
in the financial statements, for instance through the
imposition of fines or litigation. We identified the following
areas as those most likely to have such an effect: money
laundering, data protection, bribery and corruption
legislation and certain aspects of company legislation
recognising the financial nature of the Group’s activities and
its legal form. Auditing standards limit the required audit
procedures to identify non-compliance with these laws and
regulations to enquiry of the Directors and the Administrator
and inspection of regulatory and legal correspondence, if
any. Therefore, if a breach of operational regulations is not
disclosed to us or evident from relevant correspondence, an
audit will not detect that breach.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
68 TR Property Investment Trust plc
6. Fraud and breaches of laws and regulations –
ability to detect continued
Context of the ability of the audit to detect fraud or
breaches of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our
audit in accordance with auditing standards. For example,
the further removed non- compliance with laws and
regulations is from the events and transactions reflected
in the financial statements, the less likely the inherently
limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remained a higher risk
of non-detection of fraud, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal controls. Our audit procedures are
designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and
cannot be expected to detect non- compliance with all
laws and regulations.
7. We have nothing to report on the other
information in the Annual Report
The Directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does
not cover the other information and, accordingly, we do
not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether, based on our financial
statements audit work, the information therein is
materially misstated or inconsistent with the financial
statements or our audit knowledge. Based solely on that
work we have not identified material misstatements in
the other information.
Strategic report and Directors’ Report
Based solely on our work on the other information:
• we have not identified material misstatements in the
strategic report and the Directors’ Report;
• in our opinion the information given in those reports
for the financial year is consistent with the financial
statements; and
• in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
Directors’ Remuneration Report
In our opinion the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Disclosures of emerging and principal risks and
longer-term viability
We are required to perform procedures to identify
whether there is a material inconsistency between
the Directors’ disclosures in respect of emerging and
principal risks and the viability statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing material to
add or draw attention to in relation to:
• the Directors’ confirmation within the Long-Term
Viability Statement on page 38 that they have carried
out a robust assessment of the emerging and principal
risks facing the Group, including those that would
threaten its business model, future performance,
solvency and liquidity;
• the principal and emerging risks disclosures describing
these risks and how emerging risks are identified, and
explaining how they are being managed and mitigated;
and
• the Directors’ explanation in the Long-Term Viability
Statement of how they have assessed the prospects
of the Group, over what period they have done so and
why they considered that period to be appropriate, and
their statement as to whether they have a reasonable
expectation that the Group will be able to continue
in operation and meet its liabilities as they fall due
over the period of their assessment, including any
related disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the Long-Term Viability
Statement, set out on pages 38 and 39 under the
Listing Rules. Based on the above procedures, we have
concluded that the above disclosures are materially
consistent with the financial statements and our audit
knowledge.
Our work is limited to assessing these matters in the
context of only the knowledge acquired during our
financial statements audit. As we cannot predict all
future events or conditions and as subsequent events
may result in outcomes that are inconsistent with
judgements that were reasonable at the time they
were made, the absence of anything to report on these
statements is not a guarantee as to the Group’s and
Company’s longer-term viability.
Independent auditor’s report
continued
Annual Report & Accounts 2024 69
Corporate governance disclosures
We are required to perform procedures to identify
whether there is a material inconsistency between the
Directors’ corporate governance disclosures and the
financial statements and our audit knowledge.
Based on those procedures, we have concluded that
each of the following is materially consistent with the
financial statements and our audit knowledge:
• the Directors’ statement that they consider that the
annual report and financial statements 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;
• the section of the annual report describing the work of
the Audit Committee, including the significant issues
that the audit committee considered in relation to
the financial statements, and how these issues were
addressed; and
• the section of the annual report that describes
the review of the effectiveness of the Group’s risk
management and internal control systems.
We are required to review the part of the Corporate
Governance Report relating to the Group’s compliance
with the provisions of the UK Corporate Governance
Code specified by the Listing Rules for our review. We
have nothing to report in this respect.
8. We have nothing to report on the other
matters on which we are required to report by
exception
Under the Companies Act 2006, we are required to report
to you if, in our opinion:
• adequate accounting records have not been kept by
the parent Company, or returns adequate for our audit
have not been received from branches not visited by
us; or
• the parent Company financial statements and the part
of the Directors’ Remuneration Report to be audited
are not in agreement with the accounting records and
returns; or
• certain disclosures of Directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on
page 62, the Directors are responsible for: the preparation
of the financial statements including being satisfied that
they give a true and fair view; 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; assessing
the Group and parent Company’s ability to continue as a
going concern, disclosing, as applicable, matters related
to going concern; and using 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.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole are
free from material misstatement, whether due to fraud
or error, and to issue our opinion in an auditor’s report.
Reasonable assurance is a high level of assurance,
but does not guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users
taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial
statements in an annual financial report prepared under
Disclosure Guidance and Transparency Rule 4.1.17R and
4.1.18R. This auditor’s report provides no assurance over
whether the annual financial report has been prepared in
accordance with those requirements.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
70 TR Property Investment Trust plc
10. The purpose of our audit work and to
whom we owe our responsibilities
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and the terms of our engagement
by the Company. Our audit work has been undertaken so
that we might state to the Company’s members those
matters we are required to state to them in an auditor’s
report, and the further matters we are required to state
to them in accordance with the terms agreed with
the company, and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the
Company’s members, as a body, for our audit work, for
this report, or for the opinions we have formed.
Philip Merchant (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
7 June 2024
Independent auditor’s report
continued
Annual Report & Accounts 2024 71
Financial
statements
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc72
Group statement of comprehensive income
for the year ended 31 March 2024
Year ended 31 March 2024 | Year ended 31 March 2023 | ||||||
| Revenue | Capital | Revenue | Capital | ||||
| Return | Return | Total | Return | Return | Total | ||
| Notes | £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
| Income | |||||||
Investment income | 2 | ||||||
Rental income | 3 | ||||||
Other operating income | 4 | ||||||
| Gains/(losses) on Investments | |||||||
held at Fair Value | 10 | ( | ( | ||||
| Net movement on foreign | |||||||
| exchange; investments and loan | |||||||
notes | ( | ( | ( | ( | |||
| Net movement on foreign | |||||||
| exchange; cash and cash | |||||||
equivalents | ( | ( | |||||
Net returns on contracts for difference | 2,10 | ( | ( | ||||
Total Income | ( | ( | |||||
| Expenses | |||||||
| Management and performance | |||||||
fees | 5 | ( | ( | ( | ( | ( | ( |
| Direct property expenses, rent | |||||||
payable and service charge costs | 3 | ( | ( | ( | ( | ||
Other administrative expenses | 6 | ( | ( | ( | ( | ( | ( |
Total operating expenses | ( | ( | ( | ( | ( | ( | |
Operating profit/(loss) | ( | ( | |||||
Finance costs | 7 | ( | ( | ( | ( | ( | ( |
| Profit/(loss) from operations | |||||||
before tax | ( | ( | |||||
Taxation | 8 | ( | ( | ( | ( | ||
Total comprehensive income | ( | ( | |||||
| Earnings/(loss) per Ordinary | |||||||
share | 9 | ( | ( |
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.
The notes from pages 76 to 100 form part of these Financial Statements.
Annual Report & Accounts 2024 73
Group
| Share | Capital | |||||
| Share | Premium | Redemption | Retained | |||
| Capital | Account | Reserve | Earnings | Total | ||
For the year ended 31 March 2024 | Notes | £'000 | £'000 | £'000 | £'000 | £'000 |
At 31 March 2023 | ||||||
Total comprehensive income | ||||||
Dividends paid | 17 | ( | ( | |||
At 31 March 2024 |
Company
For the year ended 31 March 2024 Notes
Share
Capital
£'000
Share
Premium
Account
£'000
Capital
Redemption
Reserve
£'000
Retained
Earnings
£'000
Total
£'000
At 31 March 2023 79,338 43,162 43,971 801,875 968,346
Total comprehensive income - - - 196,347 196,347
Dividends paid 17 - - - (49,190) (49,190)
At 31 March 2024 79,338 43,162 43,971 949,032 1,115,503
Group
| Share | Capital | |||||
| Share | Premium | Redemption | Retained | |||
| Capital | Account | Reserve | Earnings | Total | ||
For the year ended 31 March 2023 | Notes | £’000 | £’000 | £’000 | £’000 | £’000 |
At 31 March 2022 | ||||||
Total comprehensive income | ( | ( | ||||
Dividends paid | 17 | ( | ( | |||
At 31 March 2023 |
Company
For the year ended 31 March 2023 Notes
Share
Capital
£’000
Share
Premium
Account
£’000
Capital
Redemption
Reserve
£’000
Retained
Earnings
£’000
Total
£’000
At 31 March 2022 79,338 43,162 43,971 1,396,268 1,562,739
Total comprehensive income - - - (547,266) (547,266)
Dividends paid 17 - - - (47,127) (47,127)
At 31 March 2023 79,338 43,162 43,971 801,875 968,346
The notes from pages 76 to 100 form part of these Financial Statements.
Group and Company statement of changes in equity
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TR Property Investment Trust plc74
| Group | Company | Group | Company | ||
| 2024 | 2024 | 2023 | 2023 | ||
| Notes | £'000 | £'000 | £’000 | £’000 | |
| Non-current assets | |||||
Investments held at fair value | 10 | 1,112,107 | 948,672 | ||
Investments in subsidiaries | 10 | 36,276 | 36,292 | ||
1,148,383 | 984,964 | ||||
Deferred taxation asset | 12 | 903 | 903 | ||
1,149,286 | 985,867 | ||||
| Current assets | |||||
Debtors | 12 | 58,217 | 65,293 | ||
Cash and cash equivalents | 19,143 | 36,069 | |||
77,360 | 101,362 | ||||
Current liabilities | 13 | ( | (53,395) | ( | (59,950) |
Net current assets | 23,965 | 41,412 | |||
| Total assets less current | |||||
liabilities | 1,173,251 | 1,027,279 | |||
Non-current liabilities | 13 | ( | (57,748) | ( | (58,933) |
Net assets | 1,115,503 | 968,346 | |||
| Capital and reserves | |||||
Called up share capital | 14 | 79,338 | 79,338 | ||
Share premium account | 15 | 43,162 | 43,162 | ||
Capital redemption reserve | 15 | 43,971 | 43,971 | ||
Retained earnings | 16 | 949,032 | 801,875 | ||
Equity shareholders’ funds | 1,115,503 | 968,346 | |||
| Net Asset Value per: | |||||
Ordinary share | 19 | 351.50p | 305.13p |
Group and company balance sheets
as at 31 March 2024
The notes from pages 76 to 100 form part of these Financial Statements.
Annual Report & Accounts 2024 75
Group and Company cash flow statements
for the year ended 31 March 2024
| Group | Company | Group | Company | |
| 2024 | 2024 | 2023 | 2023 | |
| £'000 | £'000 | £’000 | £’000 | |
| Reconciliation of profit from operations | ||||
before tax to net cash outflow from operating activities | ||||
Profit/(loss) from operations before tax | 198,581 | ( | (543,674) | |
Finance costs | 7,086 | 4,584 | ||
(Gains)/losses on investments and derivatives held at fair value through profit | ||||
or loss | ( | (177,494) | 594,990 | |
| Net movement on foreign exchange; cash | ||||
and cash equivalents and loan notes | 1,570 | ( | (336) | |
| Scrip dividends included in investment | ||||
income and net returns on contracts for difference | ( | (5,928) | ( | (6,325) |
| Accrued income in the prior year received | ||||
as a scrip dividend | ( | (1,557) | – | |
Sales of investments | 455,539 | 448,587 | ||
Purchase of investments | ( | (435,415) | ( | (427,509) |
| Increase in prepayments and accrued | ||||
income | 888 | ( | (978) | |
| (Increase)/decrease in sales settlement | ||||
debtor | ( | (152) | 30,399 | |
| (Decrease)/increase in purchase settlement | ||||
creditor | ( | (2,975) | 3,172 | |
Decrease in other debtors | 7,380 | 1,413 | ||
Increase/(decrease) in other creditors | 7,598 | ( | (21,797) | |
| Net cash inflow from operating activities | ||||
before interest and taxation | 55,1 21 | 82,526 | ||
Interest paid | ( | (7,086) | ( | (4,584) |
Taxation paid | ( | (3,016) | ( | (3,869) |
Net cash inflow from operating activities | 45,019 | 74,073 | ||
| Financing activities | ||||
Equity dividends paid | ( | (49,190) | ( | (47,127) |
Repayment of loans | ( | (10,000) | ( | (25,000) |
Net cash outflow from financing activities | ( | (59,190) | ( | (72,127) |
(Decrease)/increase in cash | ( | (14,171) | 1,946 | |
Cash and cash equivalents at start of year | 36,069 | 32,107 | ||
| Net movement on foreign exchange; cash | ||||
and cash equivalents | ( | (2,755) | 2,016 | |
Cash and cash equivalents at end of year | 19,143 | 36,069 |
The notes from pages 76 to 100 form part of these Financial Statements.
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TR Property Investment Trust plc76
Notes to the financial statements
Annual Report & Accounts 2024 77
01 Accounting policies continued
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc78
Notes to the financial statements
continued
01 Accounting policies continued
Annual Report & Accounts 2024 79
01 Accounting policies continued
Derivatives continued
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc80
Notes to the financial statements
continued
| 2024 | 2023 | |
| £'000 | £’000 | |
Dividends from UK listed investments | 2,029 | 2,457 |
Dividends from UK unlisted investments | 577 | 627 |
Scrip dividends from UK listed investments | 914 | 1,474 |
Property income distributions from UK listed investments | 13,031 | 9,988 |
Dividends from overseas listed investments | 17,897 | 30,891 |
Scrip dividends from overseas listed investments | 5,014 | 4,851 |
Property income distributions from overseas listed investments | 494 | 1,789 |
Total equity investment income | 39,956 | 52,077 |
| 2024 | 2023 | |
| £'000 | £’000 | |
| Dividends from UK contracts for difference | 3,980 | 3,425 |
| Dividends from overseas contracts for difference | 2,542 | 6,037 |
Total contracts for difference income | 6,522 | 9,462 |
03 Rental income
| 2024 | 2023 | |
| £'000 | £’000 | |
Gross rental income from UK property | 3,155 | 3,513 |
Service charge income from UK property | 316 | 946 |
Total rental income | 3,471 | 4,459 |
Direct property expenses, rent payable and service charge costs | (673) | (1,660) |
Total net rental income | 2,798 | 2,799 |
Operating leases
The Group has entered into commercial leases on its property portfolio. Commercial property leases typically have lease
terms between five and 15 years and include clauses to enable periodic upward revision of the rental charge according to
prevailing market conditions. Some leases contain options to break before the end of the lease term.
| 2024 | 2023 | |
| £'000 | £’000 | |
Within 1 year | 1,100 | 2,900 |
After 1 year but not more than 5 years | 1,900 | 9,900 |
More than 5 years | 700 | 14,150 |
3,700 | 26,950 |
Annual Report & Accounts 2024 81
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
| Interest on cash and cash | ||||||
equivalents | 877 | - | 877 | 255 | - | 255 |
| Interest on Subsidiary withholding | ||||||
tax reclaims | - | - | - | - | 12 | 12 |
877 | - | 877 | 255 | 12 | 267 |
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
Management fee | 1,513 | 4,540 | 6,053 | 1,560 | 4,680 | 6,240 |
Performance fee | - | 10,082 | 10,082 | - | - | - |
1,513 | 14,622 | 16,135 | 1,560 | 4,680 | 6,240 |
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
| Directors' fees (Directors' | ||||||
| Remuneration Report on pages 59 | ||||||
and 61) | 243 | - | 243 | 228 | - | 228 |
| Auditor's remuneration | ||||||
| – for audit of the consolidated | ||||||
| and parent company financial | ||||||
statements | 114 | - | 114 | 97 | - | 97 |
Legal fees | 19 | - | 19 | 1 | - | 1 |
Taxation fees | 98 | - | 98 | 90 | - | 90 |
Other administrative expenses | 192 | 575 | 767 | 187 | 542 | 729 |
Other expenses | 701 | - | 701 | 532 | - | 532 |
Irrecoverable VAT | (31) | - | (31) | 28 | - | 28 |
1,336 | 575 | 1,911 | 1,163 | 542 | 1,705 |
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc82
Notes to the financial statements
continued
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
Loan notes, bank loans and overdrafts repayable within 1 year | 1,423 | 4,271 | 5,694 | 797 | 2,392 | 3,189 |
Loan notes repayable between 1-5 years | 211 | 635 | 846 | 209 | 628 | 837 |
Loan notes repayable after 5 years | 137 | 409 | 546 | 140 | 418 | 558 |
1,771 | 5,315 | 7,086 | 1,146 | 3,438 | 4,584 |
08 Taxation
a) Analysis of charge in the year
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
| UK corporation tax at 25% | ||||||
(2023: 19%) | 5,268 | (5,268) | - | 4,221 | (3,521) | 700 |
Overseas taxation | 2,006 | 180 | 2,186 | 2,148 | 1,026 | 3,174 |
7,274 | (5,088) | 2,186 | 6,369 | (2,495) | 3,874 | |
| Under/(over) provision in respect | ||||||
of prior years | 48 | - | 48 | (282) | - | (282) |
Current tax charge for the year | 7,322 | (5,088) | 2,234 | 6,087 | (2,495) | 3,592 |
b) Factors affecting total tax charge for the year
The tax assessed for the year is lower (2023: lower) than the standard rate of corporation tax in the UK for a large
company of 25% (2023: 19%).
The difference is explained below:
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
| Net profit/(loss) on ordinary | ||||||
activities before taxation | 45,533 | 153,048 | 198,581 | 60,724 | (604,398) | (543,674) |
| Corporation tax charge at 25% | ||||||
(2023:19%) | 11,383 | 38,262 | 49,645 | 11,538 | (114,836) | (103,298) |
| Effects of: | ||||||
Non taxable (gains)/losses on investments | - | (40,198) | (40,198) | - | 104,392 | 104,392 |
Currency movements not taxable | - | 988 | 988 | - | 145 | 145 |
Tax relief on expenses charged to capital | - | (140) | (140) | - | (1,878) | (1,878) |
Non-taxable contracts for difference | - | (4,180) | (4,180) | - | 8,656 | 8,656 |
Non-taxable UK dividends | (652) | - | (652) | (586) | - | (586) |
Non-taxable overseas dividends | (5,728) | - | (5,728) | (6,791) | - | (6,791) |
Overseas withholding taxes | 2,006 | 180 | 2,186 | 2,148 | 1,026 | 3,174 |
| Under/(over) provision in respect | ||||||
of prior years | 48 | - | 48 | (282) | - | (282) |
Disallowable expenses | - | - | - | 131 | - | 131 |
Deferred tax not provided | 265 | - | 265 | (71) | - | (71) |
7,322 | (5,088) | 2,234 | 6,087 | (2,495) | 3,592 |
Annual Report & Accounts 2024 83
08 Taxation continued
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
Unutilised losses carried forward | - | (903) | (903) | - | (903) | (903) |
| Shown as: | ||||||
Deferred tax asset | - | (903) | (903) | - | (903) | (903) |
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
Unutilised losses carried forward | - | (903) | (903) | - | (903) | (903) |
| Shown as: | ||||||
Deferred tax asset | - | (903) | (903) | - | (903) | (903) |
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
Provision at the start of the year | - | (903) | (903) | - | (903) | (903) |
Unutilised losses carried forward | - | - | - | - | - | - |
Provision at the end of the year | - | (903) | (903) | - | (903) | (903) |
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £’000 | £’000 | £’000 | |
Provision at the start of the year | - | (903) | (903) | - | (903) | (903) |
Unutilised losses carried forward | - | - | - | - | - | - |
Provision at the end of the year | - | (903) | (903) | - | (903) | (903) |
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TR Property Investment Trust plc84
Notes to the financial statements
continued
09 Earnings/(loss) per share
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| Revenue | Capital | Total | Revenue | Capital | Total | |
Total comprehensive income (£'000) | 38,211 | 158,136 | 196,347 | 54,637 | (601,903) | (547,266) |
Earnings per share - pence | 12.04 | 49.83 | 61.87 | 17.22 | (189.67) | (172.45) |
Both revenue and capital earnings per share are based on a weighted average of 317,350,980 Ordinary shares in issue during
the year (2023: 317,350,980).
The Group has no securities in issue that could dilute the earnings per Ordinary share, therefore the basic and diluted
earnings per Ordinary share are the same.
| Group | Company | Group | Company | |
| 2024 | 2024 | 2023 | 2023 | |
| £’000 | £’000 | £’000 | £’000 | |
Listed in the United Kingdom | 373,675 | 373,675 | 383,303 | 383,303 |
Unlisted in the United Kingdom | 2,892 | 2,892 | 2,573 | 2,573 |
Listed Overseas | 697,152 | 697,152 | 488,839 | 488,839 |
Investment properties | 38,388 | 38,388 | 73,957 | 73,957 |
Investments in subsidiaries held at fair value | - | 36,276 | - | 36,292 |
Investments held at fair value | 1,112,107 | 1,148,383 | 948,672 | 984,964 |
| Contracts for difference | 6,098 | 6,098 | 4,662 | 4,662 |
1,118,205 | 1,154,481 | 953,334 | 989,626 |
Annual Report & Accounts 2024 85
10 Investments held at fair value continued
| Movement | |||||||
| Realised | in unrealised | ||||||
| Valuation | Transfer | (losses)/ | appreciation/ | Valuation | |||
| 31 March | to unlisted | gains | (depreciation) | 31 March | |||
| 2023 | Additions | Disposals | equities | in the year | at year end | 2024 | |
| £’000 | £’000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Listed investments | 872,142 | 442,233 | (408,316) | (985) | (4,416) | 170,169 | 1,070,827 |
Unlisted investments | 2,573 | - | - | 985 | - | (666) | 2,892 |
| Contracts for difference | 4,662 | - | (15,283) | - | 15,283 | 1,436 | 6,098 |
| Total investments | |||||||
segment | 879,377 | 442,233 | (423,599) | - | 10,867 | 170,939 | 1,079,817 |
Direct property segment | 73,957 | 667 | (31,940) | - | 9,910 | (14,206) | 38,388 |
953,334 | 442,900 | (455,539) | - | 20,777 | 156,733 | 1,118,205 |
Gains on investments and direct property | £'000 |
Realised gains on listed and unlisted investments and direct property sold in the year | 5,494 |
Movement in unrealised gains on listed and unlisted investments and direct property held at the year end | 155,297 |
Gains/(losses) on investments held at fair value | 160,791 |
Realised gains on contracts for difference sold in the year | 15,283 |
Movement in unrealised gains on contracts for difference held at the year end | 1,436 |
Net returns on contracts for difference | 16,719 |
Total gains on investments and direct property in the year | 177,510 |
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc86
Notes to the financial statements
continued
10 Investments held at fair value continued
| Movement in | |||||||
| Realised | unrealised | ||||||
| Valuation | Transfer | gains/ | appreciation/ | Valuation | |||
| 31 March | to unlisted | (losses) | (depreciation) | 31 March | |||
| 2023 | Additions | Disposals | equities | in the year | at year end | 2024 | |
| £’000 | £’000 | £’000 | £'000 | £'000 | £'000 | £’000 | |
UK listed equities | 383,303 | 201,025 | (254,330) | (985) | 26,757 | 17,905 | 373,675 |
UK unlisted equities | 2,573 | - | - | 985 | - | (666) | 2,892 |
UK direct property | 73,957 | 667 | (31,940) | - | 9,910 | (14,206) | 38,388 |
UK contracts for difference | (936) | - | (5,293) | - | 5,293 | 3,297 | 2,361 |
458,897 | 201,692 | (291,563) | - | 41,960 | 6,330 | 417,316 | |
| Continental European | |||||||
listed equities | 488,839 | 241,208 | (153,986) | - | (31,173) | 152,264 | 697,152 |
European contracts for difference | 5,598 | - | (9,990) | - | 9,990 | (1,861) | 3,737 |
953,334 | 442,900 | (455,539) | - | 20,777 | 156,733 | 1,118,205 |
Annual Report & Accounts 2024 87
10 Investments held at fair value continued
e) Fair value of financial assets and liabilities continued
| Level 1 | Level 2 | Level 3 | Total | |
| At 31 March 2024 | £'000 | £'000 | £'000 | £'000 |
Equity investments | 1,070,827 | - | 2,892 | 1,073,719 |
Investment properties | - | - | 38,388 | 38,388 |
1,070,827 | - | 41,280 | 1,112,107 | |
Contracts for difference | - | 6,098 | - | 6,098 |
1,070,827 | 6,098 | 41,280 | 1,118,205 | |
Foreign exchange forward contracts | - | 14 | - | 14 |
1,070,827 | 6,112 | 41,280 | 1,118,219 |
| Level 1 | Level 2 | Level 3 | Total | |
| At 31 March 2023 | £’000 | £’000 | £’000 | £’000 |
Equity investments | 861,611 | 10,531 | 2,573 | 874,715 |
Investment properties | - | - | 73,957 | 73,957 |
861,611 | 10,531 | 76,530 | 948,672 | |
Contracts for difference | - | 4,662 | - | 4,662 |
861,611 | 15,193 | 76,530 | 953,334 | |
Foreign exchange forward contracts | - | (386) | - | (386) |
861,611 | 14,807 | 76,530 | 952,948 |
| Movement in | |||||||
| Realised | unrealised | ||||||
| gains/ | appreciation/ | ||||||
| 31 March | Transfer | (losses) | (depreciation) | 31 March | |||
| 2023 | Additions | Disposals | to level 3 | in the year | at year end | 2024 | |
| £’000 | £’000 | £’000 | £'000 | £'000 | £'000 | £'000 | |
Unlisted investments | 2,573 | - | - | 985 | - | (666) | 2,892 |
| Investment properties | |||||||
– Retail | 36,625 | 556 | (31,940) | - | 9,910 | (15,151) | - |
– Industrial | 37,332 | 111 | - | - | – | 945 | 38,388 |
73,957 | 667 | (31,940) | - | 9,910 | (14,206) | 38,388 | |
76,530 | 667 | (31,940) | 985 | 9,910 | (14,872) | 41,280 |
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc88
Notes to the financial statements
continued
10 Investments held at fair value continued
| Weighted average estimated | ||||
| rental value | Weighted average | |||
| (per square foot) | capitalisation rates | |||
2024 | 2023 | 2024 | 2023 | |
Investment property | £25.60 | £25.50 | 5.4% | 5.1% |
| 2024 | 2023 | |
| Estimated movement in fair value of investment properties arising from | £’000 | £’000 |
Increase in rental value by 5% | 1,888 | 2,001 |
Decrease in rental value by 5% | (1,920) | (2,001) |
Increase in yield by 0.5% | (3,534) | (7,004) |
Decrease in yield by 0.5% | 4,231 | 8,604 |
Annual Report & Accounts 2024 89
11 Financial instruments continued
| 2024 | 2023 | |
| £'000 | £’000 | |
Investments held at fair value | 1,112,107 | 948,672 |
CFD long gross exposure | 120,549 | 130,906 |
Total Investment Exposure | 1,232,656 | 1,079,578 |
| 2024 | 2024 | 2023 | 2023 | |
| Increase | Decrease | Increase | Decrease | |
| in fair value | in fair value | in fair value | in fair value | |
| £'000 | £'000 | £’000 | £’000 | |
Revenue return | (71) | 71 | (71) | 71 |
Capital return | 167,542 | (167,542) | 142,826 | (142,826) |
Change to the profit after tax for the year/shareholders’ funds | 167,471 | (167,471) | 142,755 | (142,755) |
| Change to total earnings per Ordinary | ||||
share | 52.77p | (52.77)p | 44.99p | (44.99)p |
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc90
Notes to the financial statements
continued
11 Financial instruments continued
| Swedish | |||||
| Sterling | Euro | Krona | Other | Total | |
| 2024 | £'000 | £'000 | £'000 | £'000 | £'000 |
Receivables (due from brokers, dividends and other income receivable) | 1,060 | 52,930 | 2,893 | 1,315 | 58,198 |
Cash at bank and on deposit | 13,473 | 2,913 | 221 | 2,538 | 19,145 |
Payables (due to brokers, accruals and other creditors) | (11,442) | (4,430) | (1,244) | - | (17,116) |
FX forwards | (40,154) | 46,707 | (14,358) | 7,819 | 14 |
| Total foreign currency exposure on net | |||||
monetary items | (37,063) | 98,120 | (12,488) | 11,672 | 60,241 |
Investments held at fair value | 414,955 | 413,441 | 192,647 | 91,064 | 1,112,107 |
Non-current assets | 903 | - | - | - | 903 |
Non-current liabilities | (15,000) | (42,748) | - | - | (57,748) |
Total currency exposure | 363,795 | 468,813 | 180,159 | 102,736 | 1,115,503 |
Currency exposure (% terms) | 32.6% | 42.0% | 16.2% | 9.2% | 100.0% |
| Swedish | |||||
| Sterling | Euro | Krona | Other | Total | |
| 2023 | £’000 | £’000 | £’000 | £’000 | £'000 |
Receivables (due from brokers, dividends and other income receivable) | 10,534 | 51,105 | 2,811 | 837 | 65,287 |
Cash at bank and on deposit | 8,226 | 20,620 | 4,299 | 2,926 | 36,071 |
Bank loans, loan notes and overdrafts | (10,000) | - | - | - | (10,000) |
Payables (due to brokers, accruals and other creditors) | (10,573) | (1,221) | (1,474) | - | (13,268) |
FX forwards | (118,592) | 52,283 | 39,628 | 26,295 | (386) |
| Total foreign currency exposure on net | |||||
monetary items | (120,405) | 122,787 | 45,264 | 30,058 | 77,704 |
Investments held at fair value | 459,832 | 330,586 | 88,592 | 69,662 | 948,672 |
Non-current assets | 903 | - | - | - | 903 |
Non-current liabilities | (15,000) | (43,933) | - | - | (58,933) |
Total currency exposure | 325,330 | 409,440 | 133,856 | 99,720 | 968,346 |
Currency exposure (% terms) | 33.6% | 42.3% | 13.8% | 10.3% | 100.0% |
Annual Report & Accounts 2024 91
11 Financial instruments continued
Year ended March 2024 | Year ended March 2023 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| Return | Return | Return | Return | Return | Return | |
| Strengthening of sterling | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
Euro | (3,459) | (61,550) | (65,009) | (4,080) | (53,496) | (57,576) |
Swedish Krona | (325) | (23,461) | (23,786) | (354) | (17,442) | (17,796) |
Other currencies | (346) | (13,382) | (13,728) | (370) | (12,993) | (13,363) |
| Net earnings attributable to | ||||||
Shareholders | (4,130) | (98,393) | (102,523) | (4,804) | (83,931) | (88,735) |
| Change to earnings per Ordinary | ||||||
share | (1.30)p | (31.01)p | (32.31)p | (1.51)p | (26.45)p | (27.96)p |
Year ended March 2024 | Year ended March 2023 | |||||
| Revenue | Capital | Total | Revenue | Capital | Total | |
| Return | Return | Return | Return | Return | Return | |
| Weakening of sterling | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
Euro | 4,523 | 83,307 | 87,830 | 5,392 | 72,392 | 77,784 |
Swedish Krona | 371 | 31,767 | 32,138 | 446 | 23,608 | 24,054 |
Other currencies | 435 | 18,115 | 18,550 | 475 | 17,586 | 18,061 |
| Net earnings attributable to | ||||||
Shareholders | 5,329 | 133,189 | 138,518 | 6,313 | 113,586 | 119,899 |
| Change to earnings per Ordinary | ||||||
share | 1.68p | 41.97p | 43.65p | 1.99p | 35.79p | 37.78p |
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc92
Notes to the financial statements
continued
11 Financial instruments continued
Management of the risk continued
| Interest | 2024 | 2023 | ||
| Financial assets/(liabilities) | Rate Type | Interest Rate Basis | £'000 | £'000 |
| Assets: | ||||
Collateral exposure | Floating | Margin plus SONIA or currency equivalent | 57,468 | 81,170 |
| Liabilities: | ||||
Loan notes exposure | Fixed | €50m and £15m at 1.92% and 3.59% | (57,748) | (58,933) |
| respectively | ||||
Multi-currency loan exposure | Floating | Margin plus SONIA or currency equivalent | - | (10,000) |
| 2024 | 2024 | 2023 | 2023 | |
| 2% | 2% | 2% | 2% | |
| Increase | Decrease | Increase | Decrease | |
| in fair value | in fair value | in fair value | in fair value | |
| £'000 | £'000 | £'000 | £'000 | |
Revenue return | 645 | (645) | 1,036 | (1,036) |
Capital return | (650) | 650 | (838) | 838 |
Change to the earnings after tax for the year/shareholders’ funds | (5) | 5 | 198 | (198) |
| Change to total earnings per Ordinary | ||||
share | (0.00)p | 0.00p | 0.06p | (0.06)p |
Annual Report & Accounts 2024 93
11 Financial instruments continued
| Less than | Within | Within | More than | ||
| 1 year | 1-3 years | 3-5 years | 5 years | Total | |
| At 31 March 2024 | £'000 | £'000 | £'000 | £'000 | £’000 |
Bank loans* | - | - | - | - | - |
Loan notes | - | 42,748 | - | 15,000 | 57,748 |
Projected interest cash flows on bank and loan notes | 1,359 | 1,898 | 1,077 | 1,077 | 5,411 |
Securities and properties purchased for future settlement | 5,561 | - | - | - | 5,561 |
Accruals and deferred income | 11,085 | - | - | - | 11,085 |
Other creditors | 10 | - | - | - | 10 |
18,015 | 44,646 | 1,077 | 16,077 | 79,815 |
| Less than | Within | Within | More than | ||
| 1 year | 1-3 years | 3-5 years | 5 years | Total | |
| At 31 March 2023 | £'000 | £'000 | £'000 | £'000 | £’000 |
Bank loans* | 10,000 | - | - | - | 10,000 |
Loan notes | - | 43,933 | - | 15,000 | 58,933 |
Projected interest cash flows on bank and loan notes | 1,382 | 2,623 | 1,078 | 1,585 | 6,668 |
Securities and properties purchased for future settlement | 8,536 | - | - | - | 8,536 |
Accruals and deferred income | 2,953 | - | - | - | 2,953 |
Other creditors | 141 | - | - | - | 141 |
23,012 | 46,556 | 1,078 | 16,585 | 87,231 |
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc94
Notes to the financial statements
continued
11 Financial instruments continued
| 2024 | 2024 | 2023 | 2023 | |
| Balance | Maximum | Balance | Maximum | |
| Sheet | exposure | Sheet | exposure | |
| £'000 | £'000 | £’000 | £’000 | |
Debtors | 58,212 | 58,212 | 65,287 | 65,287 |
Cash and cash equivalents | 19,145 | 19,145 | 36,071 | 36,071 |
77,357 | 77,357 | 101,358 | 101,358 |
2024 | 2023 | ||||
| Net amounts | Net amounts | ||||
of | financial | of financial | |||
| assets/ | assets/ | ||||
| (liabilities) | (liabilities) | ||||
| presented in the | Cash collateral | presented in the | Cash collateral | ||
| balance sheet | pledged | balance sheet | pledged | ||
| £'000 | £'000 | £’000 | £’000 | ||
| CFD positions: | |||||
Goldman Sachs | 6,098 | 38,323 | 4,662 | 45,099 | |
| FX forward contracts: | |||||
HSBC | 14 | - | (386) | - |
Annual Report & Accounts 2024 95
11 Financial instruments continued
| Group | Company | Group | Company | |
| 2024 | 2024 | 2023 | 2023 | |
| Amounts falling due within one year: | ||||
Securities and properties sold for future settlement | 2,891 | 2,891 | 2,739 | 2,739 |
| Foreign exchange forward contracts | ||||
for settlement | 14 | 14 | - | - |
Tax recoverable | 4,396 | 4,396 | 3,857 | 3,857 |
| Prepayments and accrued income | 5,258 | 5,258 | 6,146 | 6,146 |
Amounts receivable in respect of Contracts for Difference | 6,099 | 6,099 | 5,598 | 5,598 |
CFD margin cash | 38,323 | 38,323 | 45,099 | 45,099 |
Other debtors | 1,231 | 1,236 | 1,848 | 1,854 |
58,212 | 58,217 | 65,287 | 65,293 | |
| Non-current assets: | ||||
Deferred taxation asset | 903 | 903 | 903 | 903 |
903 | 903 | 903 | 903 |
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc96
Notes to the financial statements
continued
| Group | Company | Group | Company | |
| 2024 | 2024 | 2023 | 2023 | |
| £'000 | £'000 | £’000 | £’000 | |
| Amounts falling due within one year: | ||||
Bank loans and overdrafts | - | - | 10,000 | 10,000 |
| Securities and properties purchased | ||||
for future settlement | 5,561 | 5,561 | 8,536 | 8,536 |
Amounts due to subsidiaries | - | 36,320 | - | 36,336 |
Amounts payable in respect of Contracts for Difference | 1 | 1 | 936 | 936 |
Tax payable | 459 | 457 | 702 | 700 |
Accruals and deferred income | 11,085 | 11,056 | 2,953 | 2,925 |
| Foreign exchange forward contracts | ||||
for settlement | - | - | 386 | 386 |
Other creditors | 10 | - | 141 | 131 |
17,116 | 53,395 | 23,654 | 59,950 | |
| Non-current liabilities: | ||||
1.92% Euro Loan Notes 2026 | 42,748 | 42,748 | 43,933 | 43,933 |
3.59% GBP Loan Notes 2031 | 15,000 | 15,000 | 15,000 | 15,000 |
57,748 | 57,748 | 58,933 | 58,933 |
| Loan notes | Bank loans | Total | |
| Group and Company | £'000 | £'000 | £'000 |
Opening liabilities from financing activities at 31 March 2023 | 58,933 | 10,000 | 68,933 |
| Cash flows: | |||
Repayment of bank loans | - | (10,000) | (10,000) |
| Non cash flows: | |||
Movement on foreign exchange | (1,185) | - | (1,185) |
Closing liabilities from financing activities at 31 March 2024 | 57,748 | - | 57,748 |
Annual Report & Accounts 2024 97
| Issued, allotted | ||
| Number | and fully paid £'000 | |
| Ordinary shares of 25p | ||
At 1 April 2023 | 317,350,980 | 79,338 |
At 31 March 2024 | 317,350,980 | 79,338 |
Capital Reserve | Revenue reserve | Total retained earnings | ||||
| Group | Company | Group | Company | Group | Company | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Brought forward | 729,088 | 721,148 | 72,787 | 80,727 | 801,875 | 801,875 |
| Movements in the year: | ||||||
| Realised gains on investments and direct | ||||||
property sold in the year (note 10) | 20,777 | 20,777 | - | - | 20,777 | 20,777 |
Movement in unrealised gains / (losses) on investments and direct property held at the year end (note 10) | 156,733 | 156,717 | - | - | 156,733 | 156,717 |
| Net returns on contracts for difference | ||||||
(notes 2 and 10) | - | - | 6,522 | 6,522 | 6,522 | 6,522 |
Gains / (losses) on subsidiary | - | - | - | - | - | - |
| Net movement in foreign exchange gains / | ||||||
(losses) | (3,950) | (3,950) | - | - | (3,950) | (3,950) |
Total Income (notes 2, 3 and 4) | - | - | 43,631 | 43,631 | 43,631 | 43,631 |
Total operating expenses (notes 5 and 6) | (15,197) | (15,197) | (2,849) | (2,833) | (18,046) | (18,030) |
Finance costs (note 7) | (5,315) | (5,315) | (1,771) | (1,771) | (7,086) | (7,086) |
Taxation (note 8) | 5,088 | 5,088 | (7,322) | (7,322) | (2,234) | (2,234) |
Dividends paid during the year (note 17) | - | - | (49,190) | (49,190) | (49,190) | (49,190) |
Total retained earnings | 887,224 | 879,268 | 61,808 | 69,764 | 949,032 | 949,032 |
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc98
17 Dividends
| 2024 | 2023 | |||
Dividends paid in the year on Ordinary shares | Record date | Payment date | £'000 | £'000 |
Final dividend for the year ended 31 March 2022 of | 24-Jun-22 | 02-Aug-22 | - | 29,196 |
Interim dividend for the year ended 31 March 2023 of 5.65p | 16-Dec-22 | 12-Jan-23 | - | 17,931 |
Final dividend for the year ended 31 March 2023 of | 30-Jun-23 | 01-Aug-23 | 31,259 | – |
Interim dividend for the year ended 31 March 2024 of 5.65p | 15-Dec-23 | 11-Jan-24 | 17,931 | – |
49,190 | 47,127 |
| 2024 | 2023 | |||
Dividends paid/payable in the year on Ordinary shares | Record date | Payment date | £'000 | £'000 |
Interim dividend for the year ended 31 March 2023 of 5.65p | 16-Dec-22 | 12-Jan-23 | - | 17,931 |
Final dividend for the year ended 31 March 2023 of 9.85p | 30-Jun-23 | 01-Aug-23 | - | 31,259 |
Interim dividend for the year ended 31 March 2024 of 5.65p | 15-Dec-23 | 11-Jan-24 | 17,931 | - |
Final dividend for the year ended 31 March 2024 of | 28-Jun-24 | 01-Aug-24 | 31,894 | - |
49,825 | 49,190 |
The Directors have proposed a final dividend in respect of the year ended 31 March 2024 of 10.05p payable on 1 August
2024 to all shareholders on the register at close of business on 28 June 2024.
The final dividend has not been included as a liability in these financial statements in accordance with IAS 10 "Events after
the reporting period".
The total dividends paid and payable in respect of the financial year for the purposes of the income retention test for
Section 1159 of the Corporation Tax Act 2010 are shown in the table above.
18 Company statement of comprehensive income
As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own Statement of
Comprehensive Income. The net profit after taxation of the Company dealt with in the accounts of the Group was
£196,347,000 (2023: £547,266,000 loss).
19 Net asset value per ordinary share
Net asset value per Ordinary share is based on the net assets attributable to Ordinary shares of £1,115,503,000 (2023:
£968,346,000) and on 317,350,980 (2023: 317,350,980) Ordinary shares in issue at the year end.
Notes to the financial statements
continued
Annual Report & Accounts 2024 99
Name | Reg. Number | Principal Activities |
New England Properties Limited | 788895 | Non-trading company |
The Colonnades Limited | 2826672 | Non-trading company |
Showart Limited | 2500726 | Non-trading company |
Trust Union Properties Residential Developments Limited | 2365875 | Non-trading company |
The Property Investment Trust Ltd | 2415846 | Non-trading company |
The Real Estate Investment Trust Limited | 2416015 | Non-trading company |
The Terra Property Investment Trust Limited | 2415843 | Non-trading company |
Trust Union Property Investment Trust Limited | 2416017 | Non-trading company |
Trust Union Properties (Number Five) Limited | 2415839 | Non-trading company |
Trust Union Properties (Number Six) Limited | 2416018 | Non-trading company |
Trust Union Properties (Number Seven) Limited | 2415836 | Non-trading company |
Trust Union Properties (Number Eight) Limited | 2416019 | Non-trading company |
Trust Union Properties (Number Nine) Limited | 2415833 | Non-trading company |
Trust Union Properties (Number Ten) Limited | 2416021 | Non-trading company |
Trust Union Properties (Number Eleven) Limited | 2415830 | Non-trading company |
Trust Union Properties (Number Twelve) Limited | 2416022 | Non-trading company |
Trust Union Properties (Number Thirteen) Limited | 2415818 | Non-trading company |
Trust Union Properties (Number Fourteen) Limited | 2416024 | Non-trading company |
Trust Union Properties (Number Fifteen) Limited | 2416026 | Non-trading company |
Trust Union Properties (Number Seventeen) Limited | 2416027 | Non-trading company |
Trust Union Properties (Number Eighteen) Limited | 2415768 | Non-trading company |
Trust Union Properties (Bayswater) Limited | 2416030 | Property investment |
Trust Union Properties (Cardiff) Limited | 2415772 | Non-trading company |
Trust Union Properties (Theale) Limited | 2416031 | Non-trading company |
Trust Union Properties (Number Twenty-Two) Limited | 2415765 | Non-trading company |
Trust Union Properties (Number Twenty-Three) Limited | 2416036 | Non-trading company |
Skillion Finance Limited | 2420758 | Non-trading company |
Trust Union Finance (1991) Plc | 2663561 | Investment financing |
FGH Developments Limited | 1481476 | Non-trading company |
FGH Developments (Aberdeen) Limited | SC68799 | Non-trading company |
FGH (Newcastle) Limited | 1466619 | Non-trading company |
NEP (1994) Limited | 977481 | Non-trading company |
New England Developments Limited | 1385909 | Non-trading company |
New England Investments Limited | 2613905 | Non-trading company |
New England Retail Properties Limited | 1447221 | Non-trading company |
New England (Southern) Limited | 1787371 | Non-trading company |
Sapco One Limited | 803940 | Non-trading company |
Trust Union Properties Limited | 2134624 | Non-trading company |
Trust Union Finance Limited | 1233998 | Investment holding and finance company |
TR Property Finance Limited | 2415941 | Investment holding and finance company |
Trust Union Properties (South Bank) Limited | 2420097 | Non-trading company |
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
TR Property Investment Trust plc100
21 Subsidiaries continued
| 2024 | 2023 | |
| £’000 | £’000 | |
The Colonnades Limited | 23,101 | 23,101 |
TR Property Finance Limited | 13,239 | 13,255 |
New England Properties Limited | (20) | (20) |
36,320 | 36,336 |
23 Subsequent events
There are no events to report that have occurred subsequent to the financial year end.
Notes to the financial statements
continued
Annual Report & Accounts 2024 101
Glossary
and AIFMD
disclosure
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
102 TR Property Investment Trust plc
1.0 Alternative Performance Measures
Alternative Performance Measures are numerical
measures of the Company’s current or historical
performance, financial position or cash flows, other
than the financial measures defined or specified in the
Financial Statements.
The measures defined below are considered to be
Alternative Performance Measures. They are viewed as
particularly relevant and are frequently quoted for closed
ended investment companies.
Key Performance Indicators
The Board assesses the performance of the Manager
in meeting the Company’s objective against a number
of Key Performance Indicators, which are considered to
be Alternative Performance Measures. Details of these
calculations are set out below.
Total Return
The NAV Total Return is calculated by reinvesting the
dividends in the assets of the Company from the relevant
ex-dividend date. Dividends are deemed to be reinvested
on the ex-dividend date as this is the protocol used
by the Company’s benchmark and other indices. The
Share Price Total Return is calculated by reinvesting the
dividends in the shares of the Company from the relevant
ex-dividend date.
Ongoing Charges
The Ongoing Charges ratio has been calculated in
accordance with the guidance issued by the AIC as the
total of investment management fees and administrative
expenses expressed as a percentage of the average
Net Asset Values throughout the year. The definition of
administrative expenses does include property related
expenses, the Ongoing Charges calculation is shown
inclusive and exclusive of these expenses to allow
comparison of the direct administrative and management
charges with the majority of Investment Trusts which do
not hold any direct property investments.
Glossary and AIFMD disclosure
Year to
31 March
2024 NAV
Share
Price
NAV/share price per share at
31 March 2023 (pence) 305.1 279.0
NAV/share price per share at
31 March 2024 (pence) 351.5 325.0
Change in year 15.2% 16.5%
Impact of dividends reinvested 5.9% 6.4%
Total Return for the year 21.1% 22.9%
Year to
31 March
2023 NAV
Share
Price
NAV/share price per share at
31 March 2022 (pence) 492.43 456.5
NAV/share price per share at
31 March 2023 (pence) 305.13 279.0
Change in year (38.0%) (38.9%)
Impact of dividends reinvested 2.5% 2.7%
Total Return for the year (35.5%) (36.2%)
Year to
31 March
2024
Including
Performance
Fees
£’000
Excluding
Performance
Fees
£’000
Excluding
Performance
Fees & Direct
Property Costs
£'000
Managers
Fees (note 5) 16,135
6,053
6,053
Other
Administrative
expenses
(note 6) 1,911
1,911
1,911
Property
Costs 357
357
–
Less: Non
recurring
expenses – – –
18,403 8,321 7,964
Average Net
Assets 1,016,888 1,016,888 1,016,888
Ongoing
Charge 2024 1.81% 0.82% 0.78%
Year to
31 March
2023
Including
Performance
Fees
£’000
Excluding
Performance
Fees
£’000
Excluding
Performance
Fees & Direct
Property Costs
£'000
Management
Fee (note 5) 6,240
6,240
6,240
Other
Administrative
expenses
(note 6) 1,705 1,705 1,705
Property
Costs 714 714 –
Less: Non
recurring
expenses – – –
8,659 8,659 7,945
Average Net
Assets 1,184,462 1,184,462 1,184,462
Ongoing
Charge 2023 0.73% 0.73% 0.67%
Annual Report & Accounts 2024 103
Net Debt
Net debt is the total value of loan notes, loans (including
notional exposure to CFDs) less cash as a proportion of
net asset value.
The net gearing has been calculated as follows:
The Ongoing Charges ratio provided in the Company’s
Key Information Document is calculated in line with
the PRIIPs regulations which is different to the AIC
methodology above.
Group
2024
£’000
Group
2023
£’000
Loan notes 57,748 58,933
Loans – 10,000
CFD positions (notional exposure) 120,549 130,906
Less: Cash and cash equivalent (19,145) (36,071)
Less: Cash collateral (included within
‘Other debtors’ in Note 12) (38,323) (45,099)
120,829 118,669
Equity shareholders’ funds 1,115,503 968,346
Net gearing 10.8% 12.3%
2.0 Glossary of terms and
definitions AIFMD
The Alternative Fund Managers Directive is European
legislation which created a European wide framework
for regulating the managers of “alternative investment
funds” (AIFs). It is designed to regulate any fund which
is not a UCITS (Undertakings for Collective Investment
in Transferable Securities) fund and which is managed
or marketed in the EU.
AIC
The Association of Investment Companies, the
representative body for closed-ended investment
companies.
Alternative Performance Measure
A financial measure of financial performance or financial
position other than a financial measure defined or
specified in the accounting statements.
Key Information Document
Under the PRIIPs Regulations a short, consumer friendly
Key Information Document is required setting out the
key features, risks, rewards and costs of the PRIIP and
is intended to assist investors to better understand the
Trust and make comparisons between Trusts.
The document includes estimates of investment
performance under a number of scenarios. These
calculations are prescribed by the regulation and are
based purely on recent historical data. It is important
for investors to note that there is no judgement applied
and these do not in any way reflect the Board or
Manager’s views.
Key Performance Indicator ('KPI')
A KPI is a quantifiable measure that evaluates how
successful the trust is in meeting its objectives. The
Company’s KPIs are discussed on pages 32 and 33.
MiFID
The Markets in Financial Instruments Directive is the EU
legislation that regulates firms who provide services to
clients linked to “financial instruments” (shares, bonds,
units in collective investment schemes and derivatives)
and the venues where those instruments are traded.
Net Asset Value (NAV) per share
The value of total assets less liabilities (including
borrowings) divided by the number of shares in issue.
Compound Annual Dividend Growth
This is calculated by taking the final dividend
(a)
in the time
series, divided by the initial dividend
(b)
in the period, raised
to the power of 1 divided by the number of years
(c)
in the
series.
5 year period:
a
b
c
]
]
]
]
15.70
13.50
5
= 3.1%
Premium/(Discount)
The amount by which the market price of a share of an
investment trust company is higher or lower than the Net
Asset Value per share expressed as a percentage of the
NAV per share. If the share price is lower than the NAV per
share, the shares are trading at a discount and if the share
price is higher than the NAV per share the shares are
trading at a premium.
2024
pence
2023
pence
Net Asset Value per share (a) 351.50 305.13
Share price per share (b) 325.00 279.00
Premium or (Discount) c= (b-a)/a (c) (7.5%) (8.6%)
An average premium or discount is calculated by taking
the sum of each daily premium and discount for the
period under review, divided by the number of days in the
given period.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
104 TR Property Investment Trust plc
The leverage limits are set by the AIFM and approved
by the Board and are in line with the limits set out in the
Company’s Articles of Association.
This should not be confused with the gearing set out
in the Financial Highlights which is calculated under
the traditional method set out by the Association of
Investment Companies. The AIFM is also required to
comply with the gearing parameters set by the Board in
relation to borrowings.
Leverage exposure
Gross
method
Commitment
method
Maximum permitted limit 200% 200%
Actual 127% 126%
3.0 Alternative investment fund managers
directive ('AIFMD')
In accordance with the AIFMD, information in relation
to the Company’s leverage and remuneration of the
Company’s AIFM, Columbia Threadneedle Investment
Business Limited, is required to be made available to
investors. Detailed regulatory disclosures including
those on the AIFM’s remuneration policy are available on
the Columbia Threadneedle website or from Columbia
Threadneedle on request. The numerical remuneration
disclosures in relation to the AIFM’s first relevant
accounting period will be made available in due course.
Leverage
Under the AIFM Directive, it is necessary for AIFs
to disclose their leverage in accordance with
prescribed calculations.
Although leverage is often used as another term for
gearing, under the AIFMD leverage is specifically defined.
Two types of leverage calculations are defined; the gross
and commitment methods. These methods summarily
express leverage as a ratio of the exposure of the AIF
against its net asset value. ‘Exposure’ typically includes
debt, the value of any physical properties subject to
mortgage, non-sterling currency, equity or currency
hedging at absolute notional values (even those held
purely for risk reduction purposes, such as forward
foreign exchange contracts held for currency hedging)
and derivative exposure (converted into the equivalent
underlying positions). The commitment method nets
off derivative instruments, while the gross method
aggregates them.
The table below sets out the current maximum permitted
limit and the actual level of leverage for the Company as
at 31 March 2024:
Glossary and AIFMD disclosure
continued
Annual Report & Accounts 2024 105
Notice of AGM
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
106 TR Property Investment Trust plc
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting
of TR Property Investment Trust plc (the ‘Company’) will
be held at the Royal Automobile Club, 89/91 Pall Mall,
London SW1Y 5HS on Thursday 18 July 2024 at 2.30 pm
for the purpose of transacting the following business:
To consider and, if thought fit, pass the following
Resolutions, of which Resolutions 1 to 11 will be
proposed as Ordinary Resolutions and Resolutions 12
and 13 shall be proposed as Special Resolutions:
1 To receive the Report of the Directors and the
Audited Accounts for the year ended 31 March 2024.
2
To approve the Directors’ Remuneration Report
(excluding the Directors’ Remuneration Policy) for the
year ended 31 March 2024.
3 To declare a final dividend of 10.05p per Ordinary
share.
4 To re-elect Kate Bolsover as a Director.
5 To re-elect Sarah-Jane Curtis as a Director.
6 To re-elect Tim Gillbanks as a Director.
7 To re-elect Busola Sodeinde as a Director.
8 To re-elect Andrew Vaughan as a Director.
9 To re-appoint KPMG LLP (the ‘Auditor’) as Auditor of
the Company to hold office until the conclusion of
the next Annual General Meeting of the Company.
10 To authorise the Directors to determine the
remuneration of the Auditor.
Special business
Ordinary resolution
11 THAT, in substitution for all such existing authorities,
the Directors be generally and unconditionally
authorised pursuant to and in accordance with
Section 551 of the Companies Act 2006 (the ‘Act’)
to exercise all the powers of the Company to allot
shares in the Company and to grant rights to
subscribe for, or to convert any security into, shares
in the Company up to a nominal value of £26,181,455
(being approximately 33% of the total issued share
capital of the Company as at the latest practicable
date prior to publication of this Notice) provided that
this authority shall expire at the conclusion of the
Annual General Meeting of the Company in 2025
(or, if earlier, at the close of business on 17 October
2025), save that the Company shall be entitled to
make offers or agreements before the expiry of this
authority which would or might require shares to
be allotted or rights to be granted after such expiry
and the Directors shall be entitled to allot shares
and grant rights pursuant to any such offers or
agreements as if this authority had not expired.
Special resolutions
12 THAT, in substitution for all such existing authorities
and subject to the passing of Resolution 11 set
out above, the Directors be empowered pursuant
to Section 570 and Section 573 of the Act to allot
equity securities (as defined in Section 560 of the
Act) for cash pursuant to the authority conferred by
Resolution 11 above and/or to sell shares held by the
Company as treasury shares for cash as if Section
561 of the Act did not apply to any such allotment or
sale, provided that this power shall be limited:
(a) to the allotment of equity securities and sale
of treasury shares for cash in connection with
an offer of, or invitation to apply for, equity
securities:
(i) to shareholders in proportion (as nearly
as may be practicable) to their existing
holdings; and
(ii) to holders of other equity securities, as
required by the rights of those securities, or
as the Board otherwise considers necessary;
and so that the Board may impose any limits or
restrictions and make any arrangements which it
considers necessary or appropriate to deal with
treasury shares, fractional entitlements, record
dates, legal, regulatory or practical problems in,
or under the laws of, any territory or any other
matter; and
(b) in the case of the authority granted under
Resolution 11 and/or in the case of any sale
of treasury shares for cash, to the allotment
(otherwise than under paragraph (i) above)
of equity securities or sale of treasury shares
up to a nominal amount of £3,966,887 (being
approximately 5% of the total issued share capital
of the Company as at the latest practicable date
prior to publication of the notice of meeting),
the power given by this resolution shall expire upon
the expiry of the authority conferred by Resolution11
above, save that the Company shall be entitled to
make offers or agreements before expiry of such
power which would or might require equity securities
to be allotted after such expiry and the Directors shall
be entitled to allot equity securities pursuant to any
such offer or agreement as if the power conferred
hereby had not expired.
Annual Report & Accounts 2024 107
13 THAT the Company be and is hereby generally and
unconditionally authorised in accordance with
Section 701 of the Act to make one or more market
purchases (within the meaning of Section 693(4) of
the Act) of Ordinary shares of 25p each in the capital
of the Company on such terms and in such manner
as the Directors may from time to time determine
provided that:
(a) the maximum number of Ordinary shares in the
Company hereby authorised to be purchased shall
be 14.99% of the Company’s Ordinary shares in
issue at the date of the Annual General Meeting
(equivalent to 47,570,911 Ordinary shares of 25p
each at 4June 2024, the latest practicable date
prior to publication of this Notice);
(b) the maximum price (exclusive of expenses)
which may be paid for any such share shall not
be more than the higher of:
(i) 105% of the average of the middle market
quotations for an Ordinary share in the
Company as taken from the London Stock
Exchange Daily Official List for the five
business days immediately preceding the
date on which the Company agrees to buy
the shares concerned; and
(ii) the higher of the price of the last independent
trade and the highest current independent bid
for an Ordinary share in the Company on the
trading venue where the purchase is carried
out at the relevant time; and
(c) the minimum price (exclusive of expenses)
which may be paid for an Ordinary share in the
Company shall be 25p, being the nominal value
per Ordinary share in the Company,
the authority hereby conferred shall expire at
the conclusion of the Annual General Meeting of
the Company in 2025 (or, if earlier, at the close
of business on 17 October 2025), save that the
Company shall be entitled to enter into a contract
to purchase Ordinary shares in the Company which
will, or may, be completed or executed wholly or
partly after the power expires and the Company may
purchase Ordinary shares pursuant to such contract
as if the power conferred hereby had not expired.
By Order of the Board
For and on behalf of
Columbia Threadneedle
Investment Business Limited
Company Secretary
14 June 2024
Registered Office:
Company registered in England and Wales.
Company number: 84492
13 Woodstock Street
London W1C 2AG
We will also be streaming the meeting live on the internet
so that those shareholders who cannot attend in person
will be able to view the proceedings. You are welcome to
view the meeting online by following the broadcast link
on our website at: https://www.trproperty.com/
This document is important and requires your
immediate attention. If you are in any doubt as to the
action you should take you should seek your own
advice from a stockbroker, solicitor, accountant or other
independent professional adviser who is authorised
under the Financial Services and Markets Act 2000 if
you are resident in the UnitedKingdom or, if not, from
another appropriately authorised independent financial
adviser. If you have sold or otherwise transferred all
of your shares, please pass this document, together
with the accompanying documents, to the purchaser
or transferee, or to the person who arranged the sale
or transfer so they can pass these documents to the
person who now holds theshares.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
108 TR Property Investment Trust plc
Notice of Annual General Meeting
continued
Notes
Shareholders intending to attend the AGM are asked to
register their intention as soon as practicable by email
to the following dedicated address:
trpitagm@columbiathreadneedle.com.
Shareholders who are not able or do not wish to attend the
meeting in person will be able to watch a live webcast of the
meeting by following the broadcast link on our website at:
https://www.trproperty.com/. This will include the formal
business of the meeting, the Manager’s presentation
and questions and answers. The webcast will not enable
shareholders to participate in the meeting or to vote.
However, shareholders will be invited to submit questions
through our website, by 12.00 noon on Tuesday 16 July
2024. Questions may be sent to the following email address:
trpitagm@columbiathreadneedle.com. Questions of a very
similar nature may be grouped together to ensure the orderly
running of the AGM.
1 A member entitled to attend and vote at the meeting
convened by the above Notice is entitled to appoint one
or more proxies to exercise all or any of the rights of the
member to attend, speak and vote in his or her place.
Shareholders are strongly encouraged to submit their
proxy vote in advance of the meeting and to appoint
the Chairman of the meeting as their proxy, rather than
any other named person who may not be permitted to
attend the AGM in the event of restrictions or limits on
attendance. A proxy need not be a shareholder of the
Company. To appoint more than one proxy, the proxy
form should be photocopied and the name of the proxy
to be appointed indicated on each proxy form together
with the number of shares that such proxy is appointed
in respect of. Completion and submission of a proxy
instruction will not preclude a member from attending
and voting in person at the AGM (subject to any
restrictions on physical attendance).
To be valid any proxy form or other instrument
appointing a proxy must be returned by post, by
courier or by hand to the Company’s Registrars,
Computershare Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS99 6ZY, or alternatively,
by going to www.eproxyappointment.com and
following the instructions provided. All proxies
must be appointed by no later than 48 hours before
the time of the AGM. In the case of joint holders,
where more than one of the joint holders purports
to appoint a proxy, only the appointment submitted
by the most senior holder will be accepted. Seniority
is determined by the order in which the names of
the joint holders appear in the Company's Register
of Members in respect of the joint holding (the first
named being deemed the most senior).
2 In order to be able to attend and vote at the AGM or
any adjourned meeting (and also for the purpose
of calculating how many votes a person may cast),
a person must have his or her name entered on
the Company’s Register of Members by 2.30 pm
on 16July 2024 (or 6.00 pm on the date two days
before any adjourned meeting). Changes to entries
on the Register of Members after this time shall be
disregarded in determining the rights of any person to
attend or vote at the meeting.
Voting will be conducted on a poll at the meeting.
On a poll vote every shareholder will through their
proxy have one vote for every Ordinary share in the
Company of which he or she is the holder.
3 Shareholders should note that it is possible that,
pursuant to requests made by shareholders of the
Company under Section 527 of the Act, the Company
may be required to publish on a website a statement
setting out any matter relating to: (i) the audit of the
Company’s accounts (including the Auditor's Report
and the conduct of the audit) that are to be laid before
the AGM; or (ii) any circumstance connected with an
auditor of the Company ceasing to hold office since
the previous meeting at which annual accounts and
reports were laid in accordance with Section 437 of the
Act. The Company may not require the shareholders
requesting any such website publication to pay its
expenses in complying with Sections 527 or 528 of the
of the Act. Where the Company is required to place a
statement on a website under Section 527 of the Act, it
must forward the statement to the Company’s auditor
not later than the time when it makes the statement
available on the website. The business which may be
dealt with at the AGM includes any statement that the
Company has been required under Section 527 of the
Act to publish on a website.
4 Any corporation which is a member of the Company
can appoint one or more corporate representatives
who may exercise on its behalf all of its powers as a
member provided that they do not do so in relation to
the same shares.
5 The right to appoint a proxy does not apply to persons
whose shares are held on their behalf by another
person and who have been nominated to receive
communication from the Company in accordance
with Section 146 of the Act ('Nominated Persons').
Nominated Persons may have a right under an
agreement with the registered shareholder who holds
shares on their behalf to be appointed (or to have
someone else appointed) as a proxy. Alternatively,
ifnominated persons do not have such a right, or do
not wish to exercise it, they may have a right under
such an agreement to give instructions to the person
holding the shares as to the exercise of voting rights.
Annual Report & Accounts 2024 109
6 CREST members who wish to appoint a proxy
or proxies through the CREST electronic proxy
appointment service may do so for the AGM to
be held on 18 July 2024 and any adjournment(s)
thereof by using the procedures described in the
CREST Manual. CREST personal members or other
CREST sponsored members, and those CREST
members who have appointed a voting service
provider should refer to their CREST sponsors or
voting service provider(s), who will be able to take
the appropriate action on their behalf. In order for a
proxy appointment or instruction made by means of
CREST to be valid, the appropriate CREST message
(a ‘CREST Proxy Instruction’) must be properly
authenticated in accordance with Euroclear UK &
Ireland Limited’s specifications and must contain
the information required for such instructions, as
described in the CREST Manual. The message must
be transmitted so as to be received by the Company’s
agent, Computershare Investor Services PLC (CREST
Participant ID: 3RA50), no later than 48 hours before
the time appointed for the meeting. For this purpose,
the time of receipt will be taken to be the time (as
determined by the time stamp applied to the message
by the CREST Application Host) from which the
Company’s agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST.
CREST members and, where applicable, their
CREST sponsor or voting service provider should
note that Euroclear UK & Ireland Limited does not
make available special procedures in CREST for any
particular messages.
Normal system timings and limitations will therefore
apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST
member concerned to take (or, if the CREST member
is a CREST personal member or sponsored member
or has appointed a voting service provider, to procure
that his or her CREST sponsor or voting service
provider takes) such action as shall be necessary
to ensure that a message is transmitted by means
of the CREST system by any particular time. In this
connection, CREST members and, where applicable,
their CREST sponsor or voting service provider
are referred in particular to those sections of the
CREST Manual concerning practical limitations of
the CREST system and timings. The Company may
treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
7 Any member attending the meeting (subject to any
restrictions in place at the time of the meeting) has the
right to ask questions. The Company must cause to be
answered any such question relating to the business
being dealt with at the meeting but no such answer
need be given if: (a) to do so would interfere unduly with
the preparation for the meeting or involve the disclosure
of confidential information; (b) the answer has already
been given on a website in the form of an answer to
a question; or (c) it is undesirable in the interests of
the Company or the good order of the meeting that
the question be answered. Questions of a very similar
nature may be grouped together to ensure the orderly
running of the AGM.
8 Unacceptable behaviour on the part of any shareholder
attending the AGM will not be tolerated and the
Chairman has the right to deal with such behaviour as
appropriate.
9 Under section 338 and section 338A of the Act,
members meeting the threshold requirements in
those sections have the right to require the Company
(i)togive, to members of the Company entitled to
receive notice of the meeting, notice of a resolution
which may properly be moved and is intended to be
moved at the meeting and/or (ii) to include in the
business to be dealt with at the meeting any matter
(other than a proposed resolution) which may be
properly included in the business. A resolution may
properly be moved or a matter may properly be
included in the business unless (a) (in the case of
a resolution only) it would, if passed, be ineffective
(whether by reason of inconsistency with any
enactment or the company’s constitution or otherwise),
(b) it is defamatory of any person, or (c)it is frivolous or
vexatious. Such a request may be in hard copy form or
in electronic form, must identify the resolution of which
notice is to be given or the matter to be included in the
business, must be authorised by the person or persons
making it, must be received by the company not later
than six clear weeks before the meeting, and (in the
case of a matter to be included in the business only)
must be accompanied by a statement setting out the
grounds for the request.
10 As at 4 June 2024 (being the latest practicable day prior
to publication of this Notice), the issued share capital
of the Company was 317,350,980 Ordinary shares of
25p each and no Ordinary shares were held in treasury.
Therefore, the total number of voting rights in the
Company at 4 June 2024 was 317,350,980.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
110 TR Property Investment Trust plc
11 The terms of reference of the Audit Committee, the
Management Engagement Committee, the Nomination
& Remuneration Committee and the Directors’ Letters of
Appointment will be available for inspection for at least
15 minutes prior to and during the Company’s AGM.
12 You may not use any electronic address provided either
in this Notice or any related documents to communicate
for any purposes other than those expressly stated.
13 The Company may process personal data of
attendees at the Annual General Meeting. This may
include webcasts, photos, recording and audio and
video links, as well as other forms of personal data.
The Company shall process such personal data in
accordance with its privacy policy, which can found at
www.trproperty.com/legal.
14 A copy of this Notice, and other information required
by Section 311A of the Act, can be found on the
Company’s website at: www.trproperty.com
Notice of Annual General Meeting
continued
Annual Report & Accounts 2024 111
Explanation of Notice of Annual General Meeting
Resolutions 1, 2 and 3: Accounts,
Directors’ Remuneration Report and
dividend
These are the resolutions which deal with the
presentation of the audited accounts, the approval
of the Directors’ Remuneration Report and the
declaration of the final dividend.
The vote to approve the Remuneration Report is
advisory only and will not require the Company to
alter any arrangements detailed in the report should
the resolution not be passed.
The Board is proposing a final dividend for the year
ended 31 March 2024 of 10.05p per Ordinary share in
the Company. If approved at the AGM, the Company
will pay the dividend on 1 August 2024 to those
shareholders on the Company’s Register of Members
at the close of business on 28 June 2024.
Resolutions 4 to 8: Re-election of
Directors
These resolutions deal with the re-election of Kate
Bolsover, Sarah-Jane Curtis, Tim Gillbanks, Busola
Sodeinde and Andrew Vaughan. In accordance with
the UK Corporate Governance Code, all Directors
retire on an annual basis and have confirmed that
they will offer themselves for re-election.
A performance evaluation has been completed and
the Board has determined that each of the Directors
continues to be effective and demonstrates their
commitment to their role.
Their biographical details, which are set out on
pages41 and 42, demonstrate that the Board has the
appropriate balance of skills, experience,
independence and knowledge to lead the Company.
Accordingly, the Board unanimously recommends
their re-election.
Resolutions 9 and 10: Auditor
These deal with the reappointment of the Auditor,
KPMG LLP, and the authorisation for the Directors to
determine their remuneration.
Resolution 11: Allotment of share capital
The Board considers it appropriate that an authority
be granted to allot shares in the capital of the
Company up to a maximum nominal amount of
£26,181,455 is stated in the resolution (representing
approximately one third of the Company’s issued
share capital as at 4 June 2024, being the latest
practical date prior to publication of this Notice of the
meeting). As at 4 June 2024 the Company does not
hold any shares in treasury.
The Directors have no present intention of exercising
this authority and would only expect to use the
authority if shares could be issued at, or at a
premium to, the Net Asset Value per share.
This authority will expire at the earlier of the
conclusion of the Annual General Meeting of the
Company to be held in 2025 and close of business
on 17 October 2025.
Resolution 12: Disapplication of statutory
pre-emption rights
This Resolution would give the Directors the
authority to allot shares (or sell any shares which
the Company elects to hold in treasury) for cash
without first offering them to existing shareholders in
proportion to their existing shareholdings.
This authority would be limited to allotments or
sales in connection with pre-emptive offers and
offers to holders of other equity securities if required
by the rights of those shares or as the Board
otherwise considers necessary, or otherwise up to
an aggregate nominal amount of £3,966,887. This
aggregate nominal amount represents 5% of the total
issued share capital of the Company as at 4 June
2024, the latest practicable date prior to publication
of this Notice. If the powers sought by Resolution12
are used in relation to a non-pre-emptive offer,
the Directors confirm their intention to follow the
shareholder protections in paragraph 1 of Part 2B
of the Pre-emption Group’s Statement of Principles
published in November 2022.
This authority will expire at the earlier of the
conclusion of the Annual General Meeting of the
Company to be held in 2025 and close of business
on 17 October 2025.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
112 TR Property Investment Trust plc
Resolution 13: Authority to make market
purchases of the Company’s Ordinary
shares
At the AGM held in 2023, a special resolution was
passed which gave the Directors authority, until the
conclusion of the AGM in 2024, to make market
purchases of the Company’s own issued shares up to a
maximum of 14.99% of the issued share capital.
The Board is proposing that they should be given
renewed authority to purchase the Company’s Ordinary
shares in the market. It believes that to make such
purchases in the market at appropriate times and
prices is a suitable method of enhancing shareholder
value. The Company would, within guidelines set
from time to time by the Board, make either a single
purchase or a series of purchases, when market
conditions are suitable, with the aim of maximising the
benefits to shareholders.
Where purchases are made at prices below the
prevailing Net Asset Value per share, this will enhance
the Net Asset Value for the remaining shareholders.
Therefore purchases would only be made at prices
below Net Asset Value. The Board considers that it
will be most advantageous to shareholders for the
Company to be able to make such purchases as and
when it considers the timing to be favourable and
therefore does not propose to set a timetable for
making any such purchases.
The Companies (Acquisition of Own Shares) (Treasury
Shares) Regulations 2003 enable companies in the
United Kingdom to hold in treasury any of their own
shares they have purchased with a view to possible
resale at a future date, rather than cancelling them.
Ifthe Company does re-purchase any of its shares,
the Directors do not currently intend to hold any of
the shares re-purchased in treasury. The shares so
re-purchased will be cancelled.
The Listing Rules of the Financial Conduct Authority
limit the maximum price (exclusive of expenses) which
may be paid for any such share. It shall not be more
than the higher of:
(i) 105% of the average of the middle market
quotations for an Ordinary share in the Company
as taken from the London Stock Exchange Daily
Official List for the five business days immediately
preceding the date on which the Company agrees
to buy the shares concerned; and
(ii) the higher of the price of the last independent
trade and the highest current independent bid for
an Ordinary share in the Company on the trading
venue where the purchase is carried out.
The minimum price to be paid will be 25p per
Ordinary share in the Company (being the nominal
value). The Listing Rules also limit a listed company
to purchases of shares representing up to 15% of
its issued share capital in the market pursuant to
a general authority such as this. For this reason,
the Company is limiting its authority to make such
purchases to 14.99% of the Company’s Ordinary
shares in issue at the date of the AGM; this is
equivalent to 47,570,911 Ordinary shares of 25p each
(nominal value £11,892,727) as at 4 June 2024, the
latest practicable date prior to publication of this
Notice. The authority will last until the conclusion of
the Annual General Meeting of the Company to be
held in 2025 or, if earlier, the close of business on 17
October 2025.
Recommendation
The Board believes that the resolutions contained
in this Notice of Annual General Meeting are in the
best interests of the Company and shareholders as
a whole and recommends that you vote in favour of
them as your Directors intend to do in respect of their
own beneficial shareholdings.
Explanation of Notice of Annual General Meeting
continued
Annual Report & Accounts 2024 113
Shareholder
information
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
114 TR Property Investment Trust plc
Directors and other information
Directors
K Bolsover (Chairman)
S-J Curtis
T Gillbanks
B Sodeinde
A Vaughan
Registered office
Registered number
Registered as an investment company in
England and Wales No. 84492
AIFM and Company Secretary
Columbia Threadneedle Investment
Business Limited
Cannon Place
78 Cannon Street
London EC4N 6AG
Please contact Jonathan Latter for
Company Secretarial and administrative
matters
Portfolio Manager
Thames River Capital LLP, authorised
and regulated by the Financial Conduct
Authority
13 Woodstock Street
London W1C 2AG
Telephone: 020 3530 6375
Fund Manager
M A Phayre-Mudge MRICS
Finance Manager and
Investor Relations
J L Elliott ACA
Deputy Fund Manager
A Lhonneur
Direct Property Manager
G P Gay MRICS
Registrar
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 707 1355
Shareholders who hold their shares in
certificated form can check their holdings
with the Registrar, Computershare Investor
Services PLC, via www.investorcentre.co.uk.
Please note that to gain access to your details
on the Computershare site you will need the
holder reference number stated on the top left
hand corner of your share certificate.
Auditor
KPMG LLP
15 Canada Square
London E14 SGL
Stockbrokers
Panmure Gordon (UK) Limited,
One New Change
London EC4M 9AF
Stifel Nicolaus Europe Limited
150 Cheapside
London EC2V 6ET
Solicitors
Slaughter and May
One Bunhill Row
London EC1Y 8YY
Depositary, custodian and fund
administrator
BNP Paribas Securities Services
10 Harewood Avenue
London NW1 6AA
Website
www.trproperty.com
Tax advisers
PricewaterhouseCoopers LLP
Central Square, South Orchard Street
Newcastle upon Tyne NE1 3AZ
Annual Report & Accounts 2024 115
General Shareholder information
Announcement of results
The half year results are announced in late November.
The full year results are announced in early June.
Annual general meeting
The AGM is held in London in July.
Dividend payment dates
Dividends are usually paid on the Ordinary shares
as follows:
Interim: January
Final: August
Dividend payments
Dividends can be paid to shareholders by means of
BACS (Bankers’ Automated Clearing Services); mandate
forms for this purpose are available from the Registrar.
Alternatively, shareholders can write to the Registrar
(the address is given on page 114 of this report) to give
their instructions; these must include the bank account
number, the bank account title and the sort code of the
bank to which payments are to be made.
Dividend re-investment plan (‘DRIP’)
TR Property Investment Trust plc offers shareholders the
opportunity to purchase further shares in the Company
through the DRIP. Please note that following Brexit
shareholders in the European Economic Area (‘EEA’) are
no longer able to participate in the DRIP. DRIP forms may
be obtained from Computershare Investor Services PLC
through their secure website www.investorcentre.co.uk,
or on 0370 707 1694. Charges apply; dealing commission
of 0.75% (subject to a minimum of £2.50). Government
stamp duty of 0.5% also applies. With effect from the
Company’s next interim dividend payment in January
2025, the commission rate will increase to 1.25%, subject
to a minimum of £2.50.
Share price listings
The estimated Net Asset Value and market price of the
Company’s Ordinary shares, as well as the discount/
premium, are published daily in The Financial Times.
They can also be found on the Company’s website at
www.trproperty.com
Share price information
ISIN GB0009064097
SEDOL 0906409
Bloomberg
TRY.LN Reuters
TRY.L
Datastream TRY
Benchmark
Details of the benchmark are given in the Strategic
Report on page 30 of this Annual Report and Accounts.
The benchmark index is published daily and can
be found on Bloomberg;
FTSE EPRA/NAREIT Developed Europe Capped Net Total
Return Index in sterling
Bloomberg: TR0RAG Index
Disability Act
Copies of this Annual Report and Accounts and other
documents issued by the Company are available from
the Company Secretary. If needed, copies can be made
available in a variety of formats, including Braille, audio
tape or larger type as appropriate.
You can contact the Registrar, Computershare Investor
Services PLC, which has installed textphones to allow
speech and hearing impaired people who have their own
textphone to contact them directly, without the need
for an intermediate operator, by dialling 0870 702 0005.
Specially trained operators are available during normal
business hours to answer queries via this service.
Alternatively, if you prefer to go through a ‘typetalk’
operator (provided by the Royal National Institute for
Deaf People) you should dial 18001 followed by the
number you wish to dial.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
116 TR Property Investment Trust plc
Nominee share code
Where notification has been provided in advance,
the Company will arrange for copies of shareholder
communications to be provided to the operators of
nominee accounts. Nominee investors may attend
general meetings and speak at meetings when
invited to do so by the Chairman.
CGT base cost
Taxation of capital gains for shareholders who
formerly held Sigma shares
Upon a disposal of all or part of a shareholder’s
holding of Ordinary shares, the impact on the
shareholder’s capital gains tax base cost of the
conversion to Sig-ma shares in 2007 and the
redesignation to Ordinary shares in 2012 should
be considered.
In respect of the conversion to Sigma in 2007,
agreement was reached with HM Revenue &
Customs (‘HMRC’) to base the apportionment of
the capital gains tax base cost on the proportion
of Ordinary shares that were converted by a
shareholder into Sigma shares on 25 July 2007.
Therefore, if an Ordinary shareholder converted 20%
of their existing Ordinary shares into Sigma shares
on 25 July 2007, the capital gains tax base cost of
the new Sigma shares acquired would be equal to
20% of the original capital gains tax base cost of
the Ordinary shares that they held pre-conversion.
The base cost of their remaining holding of Ordinary
shares would then be 80% of the original capital
gains tax base cost of their Ordinary shares held
pre-conversion.
As part of the re-designation of the Sigma shares
into Ordinary shares in December 2012, a further
shareholder’s agreement was reached with HMRC
that a shareholders capital gains tax base cost in
their new Ordinary shares should be equivalent to
their capital gains base cost in the pre-existing Sigma
shares (i.e. their capital gains base cost under the
existing agreement if applicable).
If in doubt as to the consequences of this agreement
with HMRC, shareholders should consult with their
own professional advisors.
General Shareholder Information
continued
Annual Report & Accounts 2024 117
Investing in TR Property Investment Trust plc
Market purchases
The Company’s shares are listed and traded on the
London Stock Exchange. Investors may purchase
shares through their stockbroker, bank or other financial
intermediary.
Holding shares in certificated form
Investors may hold their investment in certificated form.
Our registrars, Computershare operate a dealing service
which enables investors to buy and sell shares quickly
and easily online without a broker or the need to open a
trading account. Alternatively the Investor Centre allows
investors to manage portfolios quickly and securely,
update details and view balances without annual
charges. Further details are available by contacting
Computershare on 0370 707 1355 or visit
www.investorcentre.co.uk.
The Company offers shareholders the opportunity
to purchase further shares in the company through
the Dividend Re-investment Plan (‘DRIP’) through the
registrar, Computershare. Shareholders can obtain
further information on the DRIP through their secure
website www.investorcentre.co.uk, or by phoning
0370707 1694. Charges do apply. Please note that to
gain access to your details or register for the DRIP on the
Computershare site you will need the holder reference
number stated on the top left hand corner of your share
certificate.
Saving schemes, ISAs and other plans
A number of banks and wealth management
organisations provide Savings Schemes and ISAs
through which UK clients can invest in the Company.
ISA and savings scheme providers do charge dealing
and other fees for operating the accounts, and investors
should read the Terms and Conditions provided by these
companies and ensure that the charges best suit their
planned investment profile. Most schemes carry annual
charges but these vary between provider and product.
Where dealing charges apply, in some cases these are
applied as a percentage of funds invested and others as
a flat charge. The optimum way to hold the shares will be
different for each investor depending upon the frequency
and size of investments to be made.
Details are given below of two providers offering
shares in the Company, but there are many other options.
Interactive investor (‘ii')
Interactive investor provide and administer a range of
self-select investment plans, including tax-advantaged
ISAs and SIPPs (Self-Invested Personal Pension), and
Trading Accounts. For more information, interactive
investor can be contacted on 0345 607 6001, or by
visiting www.ii.co.uk/
Interactive investor offer investors in the Company and
other investment trusts a free online shareholder voting
and information service that enables investors to receive
shareholder communications and, if they wish, to vote on
the shareholdings held in their account.
The Company is also on the interactive super 60 rated list.
Columbia Threadneedle Management Limited (‘CT’)
Columbia Threadneedle offer a number of savings
plans for adults and children, from general investment
accounts to a range of investment ISAs and a Child
Trust Fund. Each product gives you the ability to
invest in a range of investment trust companies. For
more information see inside the back cover. Columbia
Threadneedle can be contacted on 0800 136 420, or visit
ctinvest.co.uk.
Please remember that the value of your investments and
any income from them may go down as well as up. Past
performance is not a guide to future performance. You
may not get back the amount that you invest. If you are in
any doubt as to the suitability of a plan or any investment
available within a plan, please take professional advice.
Saving Schemes and ISAs transferred from Alliance
Trust Savings ('ATS') BNP Paribas
Following the acquisition of Alliance Trust Savings by
interactive investor, ATS self-directed accounts were
transferred to the interactive investor platform on
14thOctober 2019.
In 2012 BNP Paribas closed down the part of their
business that operated Savings Schemes and ISAs.
Investors were given the choice of transferring their
schemes to Alliance Trust Savings (‘ATS’) or to a
provider of their own choice, or to close their accounts
and sell the holdings.
If investors did not respond to the letters from BNP
Paribas, their accounts were transferred to ATS.
Following the acquisition of Alliance Trust Savings by
interactive investor, ATS self-directed accounts were
transferred to the interactive investor platform on
14October 2019.
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
118 TR Property Investment Trust plc
Share fraud and boiler room scams
Shareholders in a number of Investment Trusts have
been approached as part of a share fraud where they
are informed of an opportunity to sell their shares as the
company is subject to a takeover bid. This is not true and
is an attempt to defraud shareholders. The share fraud
also seeks payment of a ‘commission’ by shareholders to
the parties carrying out the fraud.
Shareholders should remain alert to this type of scam
and treat with suspicion any contact by telephone
offering an attractive investment opportunity, such
as a premium price for your shares, or an attempt to
convince you that payment is required in order to release
a settlement for your shares. These frauds may also offer
to sell your shares in companies which have little or no
value or may offer you bonus shares. These so called
‘boiler room’ scams can also involve an attempt to obtain
your personal and/or banking information with which to
commit identity fraud.
The caller may be friendly and reassuring or they may
take a more urgent tone, encouraging you to act quickly
otherwise you could lose money or miss out on a deal.
If you have been contacted by an unauthorised firm
regarding your shares the FCA would like to hear
from you. You can report an unauthorised firm using
the FCA helpline on 0800 111 6768 or by visiting their
website, which also has other useful information,
at www.fca.org.uk.
If you receive any unsolicited investment advice
make sure you get the correct name of the person
and organisation. If the calls persist, hang up. If you
deal with an unauthorised firm, you will not be eligible
to receive payment under the Financial Services
Compensation Scheme.
Please be advised that the Board or the Manager would
never make unsolicited telephone calls of such a nature
to shareholders.
Investing in TR Property Investment Trust plc
continued
Annual Report & Accounts 2024 119
How to invest
One of the most convenient ways to invest in TR Property Investment Trust plc is through
one of the savings plans run by Columbia Threadneedle Investments.
CT Individual Savings Account (ISA)
You can use your ISA allowance to make an annual
tax‑efficient investment of up to £20,000 for the current tax
year with a lump sum from £100 or regular savings from £25
a month. You can also transfer any existing ISAs to us whilst
maintaining the tax benefits.
CT Child Trust Fund (CTF)*
If your child already has a CTF, you can invest up to £9,000
per birthday year, from £100 lump sum or £25 a month.
CTFs with other providers can be transferred to Columbia
Threadneedle.
CT Junior Individual Savings Account (JISA)*
A tax efficient way to invest up to £9,000 per tax year for
a child. Contributions start from £100 lump sum or £25 a
month. JISAs with other providers can be transferred to
Columbia Threadneedle Investments.
CT General Investment Account (GIA)
This is a flexible way to invest in our range of Investment
Trusts. There are no maximum contributions and
investments can be made from £100 lump sum or
£25 a month.
CT Lifetime Individual Savings Account (LISA)
For those aged 18‑39, a LISA could help towards purchasing
your first home or retirement in later life. Invest up to £4,000
for the current tax year and receive a 25% Government
bonus up to £1,000 per year. Invest with a lump sum from
£100 or regular savings from £25 a month.
CT Junior Investment Account (JIA)
This is a flexible way to save for a child in our range of Investment
Trusts. There are no maximum contributions and the plan can
easily be set up under bare trust (where the child is noted as the
beneficial owner) or kept in your name if you wish to retain control
over the investment. Investments can be made from a £100 lump
sum or £25 a month per account. You can also make additional
lump sum top‑ups at any time from £100 per account.
* The CTF and JISA accounts are opened in the child’s name and they have access to the account at age 18.
** Calls may be recorded or monitored for training and quality purposes.
Charges
Annual management charges and other charges apply according to
the type of Savings Plan, these can be found on the relevant product
Pre‑sales Cost & Charges disclosure on our website www.ctinvest.co.uk .
Annual account charge
ISA/LISA: £60+VAT
GIA: £40+VAT
JISA/JIA/CTF: £25+VAT
You can pay the annual charge from your account, or by direct debit
(in addition to any annual subscription limits).
Dealing charges
£12 per fund (reduced to £0 for deals placed through the online
Columbia Threadneedle Investor Portal) for ISA/GIA/LISA/JIA
and JISA. There are no dealing charges on a CTF.
Dealing charges apply when shares are bought or sold but not
on the reinvestment of dividends or the investment of monthly
direct debits. Government stamp duty of 0.5% also applies on
the purchase of shares (where applicable).
The value of investments can go down as well as up and you
may not get back your original investment. Tax benefits depend
on your individual circumstances and tax allowances and rules
may change. Please ensure you have read the full Terms and
Conditions, Privacy Policy and relevant Key Features documents
before investing. For regulatory purposes, please ensure you have
read the Pre‑sales Cost & Charges disclosure related to the product
you are applying for, and the relevant Key Information Documents
(KIDs) for the investment trusts you want to invest in. These can be
found at ctinvest.co.uk/documents.
How to invest
To open a new Columbia Threadneedle Investments savings
plan, apply online at ctinvest.co.uk. Online applications are not
available if you are transferring an existing Savings Plan with
another provider to Columbia Threadneedle Investments, or if you
are applying for a new Savings Plan in more than one name but
paper applications are available at ctinvest.co.uk/documents or by
contacting Columbia Threadneedle Investments.
New customers
Call: 0345 600 3030** (9.00am – 5.30pm, weekdays)
Email: invest@columbiathreadneedle.com
Existing plan holders
Call: 0345 600 3030** (9.00am – 5.00pm, weekdays)
Email: investor.enquiries@columbiathreadneedle.com
By post: Columbia Threadneedle Management Limited, PO Box
11114, Chelmsford CM99 2DG
investor.enquiries@columbiathreadneedle.com
You can also invest in the Company through online dealing platforms for private investors that offer share dealing and ISAs. Companies include: Barclays
Stockbrokers, EQi, Halifax, Hargreaves Lansdown, HSBC, Interactive Investor, Lloyds Bank, The Share Centre
To find out more, visit ctinvest.co.uk
0345 600 3030, 9.00am – 5.00pm, weekdays, calls may be recorded or monitored for training and quality purposes.
Capital at risk.
This material relates to an investment trust and its Ordinary Shares that are traded on the main market of the London Stock Exchange.
The Investor Disclosure Document, Key Information Document (KID), latest annual or interim reports and the applicable terms & conditions are
available from Columbia Threadneedle Investments Cannon Place, 78 Cannon Street, London EC4N 6AG, your financial advisor and/or on our
website www.columbiathreadneedle.com. Please read the Investor Disclosure Document before taking any investment decision. This material
should not be considered as an offer, solicitation, advice or an investment recommendation. This communication is valid at the date of publication
and may be subject to change without notice. Information from external sources is considered reliable but there is no accuracy or completeness.
In the UK: Issued by Columbia Threadneedle Management Limited, No. 517895, registered in England and Wales and authorised and regulated in
the UK by the Financial Conduct Authority. © 2024 Columbia Threadneedle Investments. WF560250 (01/24) UK. Expiration Date: 3/01/2025
Overview Strategic report Governance Financial statements Glossary and AIFMD disclosure Notice of AGM Shareholder information
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CBP025338
That there will be limitations on what can be achieved but wanting to see a positive direction of travel.
TR Property investment
Trust PLC is managed by
TR PROPERTY INVESTMENT TRUST PLC ANNUAL REPORT 31-03-2024