REG-abrdn Property Income Trust Limited: Annual Results - December 2024
Today 07:02
Guernsey: 30 April 2025
LEI: 549300HHFBWZRKC7RW84
abrdn Property Income Trust Limited
(an authorised closed-ended investment company incorporated in Guernsey with
registration number 41352)
(“API” or the “Company”)
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024
The Company's Annual Report and Accounts for the year ended 31 December 2024
and the Notice of the Annual General Meeting will shortly be available to view
on the Company's corporate website at
https://www.abrdnpit.co.uk/en-gb/literature. The Documents have also been
submitted to the National Storage Mechanism and are available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Hard copies will
be posted to shareholders shortly.
PERFORMANCE SUMMARY
Earnings, Dividends & Costs 31 December 2024 31 December 2023
IFRS Loss per share (p) (11.25) (2.17)
Dividends paid per ordinary share (p) 3.0 4.0
Dividends declared per ordinary share but not yet paid (p) * 3.0 0.0
Dividend Cover (%) ** 45 71
Dividend Cover excluding non-recurring items (%) 66 82
Ongoing Charges **
As a % of average net assets including direct property costs 2.8 2.5
As a % of average net assets excluding direct property costs 1.2 1.2
Capital Values & Gearing 31 December 2024 31 December 2023 Change %
Net assets (£million) 30.4 298.1 (89.8)
Net asset value per share (p) (note 22) 8.0 78.2 (89.8)
Capital Distribution (p) 52.0 0.0 N/A
Third Quarter PID 1.0 - N/A
PID paid post year-end 3.0 - N/A
Net asset value incl. noted Distributions (p) 64.0 78.2 (18.2)
Ordinary Share Price (p) 6.9 53.0 (87.0)
(Discount)/Premium to NAV (%) (13.8) (32.2)
Total Return 1 year % return 3 year % return 5 year % return 10 year % return
NAV ^ (19.2) (31.7) (16.2) 31.9
Share Price ^ 25.6 (6.7) (6.1) 42.9
FTSE All-Share Real Estate Investment Trusts Index (11.8) (32.6) (26.9) (3.4)
FTSE All-Share Index 9.5 18.5 26.5 81.9
* Represents the special interim property income distribution to shareholders
(Ex-Dividend Date: 19 December 2024, Record Time: 20 December 2024) as a
result of exiting the REIT regime. This was in addition to the return of
capital via the redeemable bonus shares
** As defined and calculated under API’s Alternative Performance Measures
(as detailed in the full Annual Accounts which can be found via the following
link: https://www.abrdnpit.co.uk/en-gb/literature)
^ Assumes re-investment of dividends excluding transaction costs.
Sources: abrdn, MSCI
CHAIR’S STATEMENT
Background
As previously reported in both the Company’s 2023 Annual Report & Financial
Statements and 2024 Interim Report & Accounts, the Board undertook a strategic
review in the second half of 2023. This was prompted by concerns about the
Company’s size, lack of liquidity in its shares, uncovered dividend and the
share price trading at a persistently large discount to the net asset value
(NAV). The outcome of this review was for the Board to recommend to
shareholders that they vote in favour of a proposed merger with Custodian
REIT. However, this ultimately did not garner enough shareholder support at
the Extraordinary General Meeting in March 2024.
In advance of the March EGM, the Board had indicated that, should the
Custodian merger proposal fail, then a liquidation of the Company would be the
recommended alternative. Therefore, in May 2024 API shareholders were given
the opportunity to vote on a proposed change to the Group’s Investment
Objective from “The Company’s objective and purpose is to provide
Shareholders with an attractive level of income together with the prospect of
income and capital growth.” to “The Company’s investment objective is to
realise all existing assets in the Company’s portfolio in an orderly
manner.” Included in this change was a revision of the fees paid to the
Investment Manager to reflect the new Investment Objective and align the
interest of the Investment Manager with the sale and return of capital to
shareholders. On 28 May 2024, approximately 96% of shareholders (who voted)
voted in favour of this proposal and the resolution passed.
Managed Wind-Down
Following the May 2024 vote, alongside the Investment Manager, the Board
explored the most effective means of disposing of the Company’s assets, with
the main aims being to obtain the best achievable value for the Company’s
assets at the time of their realisation and to repay borrowings and return
capital to shareholders as swiftly as possible. As previously disclosed, this
encompassed various disposal strategies, including individual property sales
(of which 6 completed in 2024) alongside a wider portfolio transaction.
Through an independent agent the whole residual portfolio (excluding the land
at Far Ralia) was marketed to potential buyers in an extensive and competitive
process; while it was made known that Far Ralia was also available for
purchase, it was felt that its inclusion may deter potential purchasers of the
wider portfolio and a more targeted approach for the asset in isolation would
result in a more favourable outcome. Following consideration of these
proposals, and what might be achieved by way of individual property sales over
a longer period with the associated risks, the Board selected a preferred
bidder and agreed a transaction with GoldenTree Asset Management (GoldenTree)
for the sale of the entire share capital of abrdn Property Holdings Limited
(aPH), the wholly owned subsidiary of the Company.
Sale of aPH
After extensive due diligence by the purchaser and detailed negotiations, the
transaction completed on 29 November 2024 as expected and comprised the sale
of 39 assets (being the Company’s entire residual investment property
portfolio barring its interest in Far Ralia) in addition to the Group’s debt
facility with RBSI and various net current assets/liabilities. The cash
consideration for the purchase of the investment portfolio was £351m (an 8%
discount to the portfolio’s valuation as at 30 June 2024), while the net
proceeds, after adjusting for debt and other net assets subject to normal
adjustments including those arising from the completion process, was £234.3m
(resulting in an accounting loss of £48.2m).
GoldenTree paid an initial cash deposit of £35.1m upon exchange of contracts
in September 2024, and a subsequent balancing payment on 29 November 2024.
As part of the sales agreement, there was then a period of review in which the
final completion accounts were prepared to reflect any post balance sheet
events which would impact the aforementioned adjustments. This created a
degree of uncertainty as to the final amount of the net proceeds. After
consultation with the proposed liquidators, Investment Manager and other
advisors, the Board decided to keep a prudent retention to allow for future
costs and conclusion of the completion accounts process.
The Board’s view was that the most efficient way of returning funds to
shareholders was by means of a Redeemable Bonus Share Scheme. To that end, a
circular was issued to shareholders outlining proposed changes to the Articles
of Association which allowed the Board to return 55p per share in aggregate.
This was made up of:
▸an initial return of capital comprising 52p per share, paid on 23 December
2024.
▸an interim Property Income Distribution of 3p per share, paid on 10 January
2025.
At a General Meeting of the Company on 17 December 2024, approximately 99.5%
of shareholders (who voted) voted in favour of this proposal and the
resolution passed.
REIT Status
The Company had been a member of the REIT regime since 1 January 2015 and
while a member was required to distribute at least 90% of the income profits
of the Group’s UK property rental business (“Property Income”). A
consequence of the transaction was that the Company immediately exited the
REIT regime and is now required to distribute the accumulated undistributed
Property Income. The 3p additional interim Property Income Distribution noted
above represented an initial payment under this requirement and the Board
intend to announce a further final property income distribution at a date in
the future.
Board Composition
Following the disposal of the subsidiaries and initial return of Capital to
shareholders, the Board undertook a review of the residual business and
requirements for the foreseeable future. Taking account of the
responsibilities which were required to be discharged and the need to exercise
management of the Company’s ongoing operating costs, the Board concluded
that two Directors was an appropriate number. On 31st December, three
Directors (including the previous Chair) resigned from the Board.
The Company would like to acknowledge and thank them for their huge
contributions to the Company - particularly over the last 18 months.
Financial Resources
As noted, the transaction with GoldenTree included the transfer of the
Group’s debt facility with RBSI and the Company no longer has access to
revolving credit facilities (“RCF”). In order to ensure that the
retained cash was invested appropriately, the Board invested the residual cash
proceeds into a shorter-term money market fund, the abrdn Liquidity Fund –
Sterling, which offered a competitive rate of interest. This was deemed to be
a low risk investment offering good liquidity, competitive returns and low
costs relative to alternative deposit options.
At the year end the Company held £36.7m in cash and had other financial
resources of £18.4m net of any prevailing financial commitments; i.e. not
including any future costs associated with the running of the company through
liquidation or potential balancing payment due on the transaction.
Annual General Meeting (“AGM”)
The Annual General Meeting (“AGM”) will be held at 10.00am on Monday 11
August 2025 at the offices of Aberdeen PLC, 1 George Street, Edinburgh EH2
2LL. The timing of the sale of Far Ralia is uncertain so the Board have
decided to defer the AGM from the usual June date. The Board looks forward to
welcoming shareholders in person where they will have the opportunity to put
questions to the Board and/or the Manager. Shareholders are also invited to
submit questions by email in advance to property.income@aberdeenplc.com
Final Distributions and Outlook
As detailed further in these 2024 Annual Report & Financial Statements, the
current NAV of 8p might imply that the Company could liquidate and distribute
that to shareholders. It should be noted however that the current NAV does not
reflect ongoing running costs until liquidation and beyond, or final matters
relating to the Sales Agreement. Furthermore, there is still considerable
uncertainty around the timing and value of the eventual sale of Far Ralia
which could impact the size of future distributions. The Investment Manager is
actively looking to dispose of Far Ralia and their sole focus, together with
the Board, is to maximise the return of capital to shareholders as
expeditiously as possible.
Shareholders are reminded that as soon as liquidators are appointed the
Company’s shares will cease trading on the London Stock Exchange effectively
meaning the shares cannot be sold with their value totally dependent on the
proceeds distributed by the liquidator after all assets are sold and
liabilities paid.
When appropriate the Board will update shareholders regarding the sale of Far
Ralia, and any potential impact to the ultimate distribution they will
receive.
30 April 2025
Mike Balfour
INVESTMENT MANAGER’S REPORT
Review of 2024
Throughout 2024 the main focus was on managing the property assets optimally
despite the corporate activity affecting the future of the Company. We began
the year with the merger discussions and resulting due diligence, before the
shareholder votes that led to the beginning of the Managed Wind-Down (MWD).
During this time, the Company continued to reduce debt with six disposals
being completed – two in each of the first three quarters of the year.
These are outlined in more detail below.
Following the shareholder decision in May 2024 to begin the MWD, the Board and
Investment Manager reviewed the various options available and decided to
explore a portfolio sale whilst also preparing the assets for individual
disposals. Following an extensive marketing exercise, the Company entered
into exclusive discussions with GoldenTree Asset Management in August 2024 to
dispose of a portfolio of 39 assets (from the remaining 40 assets) by way of a
sale of abrdn Property Holdings Limited (aPH), one of the Company subsidiaries
which held all the company’s property assets (either directly or via its own
investment in the General Partner / Limited Partnership). Whilst at a
discount to valuation at the time, it was decided that the benefit of an
accelerated return of capital to shareholders was preferable to a more
protracted individual sale process.
After an 8-week formal due diligence period, contracts were exchanged on the
corporate sale of aPH in September with completion on the 29th of November.
Purchases:
Given the corporate activity in early 2024 and the subsequent vote to change
the Group’s Investment Objective the Company made no purchases during the
year.
Sales:
Prior to the disposal of aPH to GoldenTree, six assets had been sold in the
year with a total sales price of £43.5m.
▸London, 15 Basinghall Street (Office) – sold in the first quarter for
£9.8m, 7.1% below the preceding valuation.
▸Warrington, Opus 9 (Industrial) – sold in the first quarter for £6.8m,
5.5% above the preceding valuation.
▸Hebburn, Unit 4 Monkton Business Park (Industrial) – sold in the second
quarter for £5.3m to the tenant, 6.0% above the preceding valuation.
▸Bristol, Kings Business Park (Industrial) – sold in the second quarter
for £7.9m, 1.3% below the preceding valuation.
▸Dover, Bastion Point (Industrial) - sold for £9.5m in the third quarter,
4.8% below the preceding valuation.
▸Manchester, 101 Princess Street (Office) – sold for £4.3m in the third
quarter, 2.3% below the preceding valuation..
Overall, the 2024 sales were completed 0.1% above the valuation immediately
preceding the relevant sale; the sales resulted in an accounting loss of
£2.1m when taking into account the December 2023 valuations and transaction
costs.
Outlook for 2025
The sole focus of the Board and Investment Manager in the coming year is to
sell the remaining asset and liquidate the company as swiftly as possible.
To that end, we continue to market the one remaining property asset that the
company owns, Far Ralia. As a natural capital investment (in an emerging
market), where a proportion of the value is attributed to the value of
potential carbon offsets offered by the tree planting, there isn’t a large
number of potential investors. That said, we have had interest to date from
a variety of potential buyers and anticipate completing a sale during the
course of the year.
Valuation
The portfolio was valued quarterly by Knight Frank LLP under the provisions of
the RICS Red Book. As at 31 December 2024 the sole property Far Ralia, was
valued at £10.0m and the Company held cash of £36.6m.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board ensures that proper consideration of risk is undertaken in all
aspects of the Company’s business on a regular basis. Subsequent to
completing the disposal of abrdn Property Holdings Limited (aPH) to GoldenTree
the Board reassessed the Company’s principal risks as summarised below:
Delays in the eventual liquidation of the Company.
The eventual liquidation of the Company is likely to be dependent on the
timing of the sale of the Company’s sole remaining asset, Far Ralia; the
Board will provide an update to Shareholders if this position changes. The
risk therefore is that any delays in the sales process will likely impact not
just the timing of the liquidation but also potentially the scale of final
distribution to shareholders (see below). The risk is mitigated by an active
marketing process and risks include finalising Scottish Forestry consent
required as part of the sales process which is progressing. Furthermore, the
Board are in regular contact with the potential liquidators regarding the
timing of when they could be appointed and the retention they would require.
The ultimate total distribution to shareholders is less than expected.
To mitigate this risk, the Board received regular updates from the Investment
Manager during the negotiation period for the subsidiary sale and established
a prudent buffer at the point of initial capital distribution to Shareholders
during December 2024 (via the Redeemable Bonus Share issue). Estimates of what
the ultimate total distribution to shareholders were communicated to
shareholders when it was prudent to do so. The ultimate distribution to
shareholders is highly dependent on the timing of the sale of Far Ralia and
the resultant sales price achieved; the former is likely to impact ongoing
running costs prior to liquidation (i.e. longer period to liquidation, higher
running costs). This risk is mitigated through the regular review of forecast
costs, scrutiny of the selling agent, and proactive discussions with the
potential liquidator.
Environmental.
Extreme weather events both in the UK and globally are becoming a more regular
occurrence due to climate change, the impact of the environment on property
and on the wider UK economy is seen as an increasing risk. Environmental
risk was historically considered as part of each purchase and monitored on an
ongoing basis by the Investment Manager.
Please see the Sustainability Committee Report for further details on how the
Company addresses environmental risk, including climate change.
Other Risks.
Other risks faced by the Company include the following:
* Tax efficiency – following the change in structure of the Group on 29
November 24, it can no longer qualify for REIT Tax status. As such, there is a
clear risk that the Company can no longer be seen as a tax efficient
investment vehicle for shareholders. In addition a future delisting may
ultimately impact shareholders invested via tax efficient wrappers such as
ISAs.
* Regulatory – breach of regulatory rules could lead to the suspension of
the Group’s Stock Exchange Listing, financial penalties or a qualified audit
report.
* Financial – inadequate controls by the Investment Manager or third-party
service providers could lead to misappropriation of assets. Inappropriate
accounting policies or failure to comply with accounting standards could lead
to misreporting or breaches of regulations.
* Operational – failure of the Investment Manager’s accounting systems or
disruption to the Investment Manager’s business, or that of third-party
service providers, could lead to an inability to provide accurate reporting
and monitoring, leading to loss of shareholder confidence.
* Business continuity – risks to any of the Company’s service providers or
properties, following a catastrophic event e.g. terrorist attack,
cyber-attack, power disruptions or civil unrest, leading to disruption of
service, loss of data etc.
* Cyber – the risk of large-scale network disruption through various forms
such as hacking, malware, phishing, DDOS, data breach or loss. In addition,
Artificial Intelligence and it's potential use in cyber attacks.
The Board seeks to mitigate and manage all risks through review, policy
setting and enforcement of contractual obligations. It also regularly monitors
the investment environment and where the Company’s cash is invested.
Details of the Group’s internal controls are described in more detail in the
Corporate Governance Report in the full Annual Accounts which can be found via
the following link: https://www.abrdnpit.co.uk/en-gb/literature.
Emerging Risks
Emerging risks have been identified by the Board through a process of
evaluating relatively new risks that have emerged and increased materially in
the year, and subsequently, or through market intelligence are expected to
grow significantly and impact the Company. Any such emerging risks are likely
to cause disruption to the business model. If ignored, they could impact the
Company’s financial performance and prospects. Alternatively, if recognised,
they could provide opportunities for transformation and improved performance.
▸Future of the Company
In the Company’s 2023 Annual Report & Financial Statements, several risks
were noted associated with the size, speed and method of capital distributions
back to shareholders, and maintenance of REIT status if shareholders voted in
favour of the (then) proposed managed wind-down. Following the vote, the Board
took steps to address these ultimately resulting in the disposal of the
Group’s subsidiaries to GoldenTree Asset Management LP. This helped to
ensure that a sizeable proportion of capital was distributed quickly to
shareholders. As noted above, there are still some risks regarding the timing
and magnitude of the final distributions and these now form part of the key
risks of the Company.
There now exists a clear risk around the liquidation process itself. Once in
liquidation, the Company’s shares will no longer be traded on a stock
exchange and shareholders will not be able to realise their investments and
will be dependent on the liquidator who will assume responsibilities over the
operational management of the Company during the liquidation period. The
length of the liquidation itself and timing of ultimate distributions relating
to any residual cash due to shareholders would be at their discretion.
▸Economic and Geopolitical
The current economic and geopolitical environment is unpredictable, and
changing rapidly, and this may affect real estate valuations and/or deter
prospective buyers, increasing the risk relating to the quantum and timing of
sale of Far Ralia.
▸Climate
A "greenlash" against climate policies is emerging following the Republicans
win in the US elections in 2024. This could derail progress against global
climate targets and dampen the demand for carbon offset assets.
▸Technology & Artificial Intelligence
Cyber-attacks are increasing in occurrence and target businesses’ data, IT
systems and even their physical infrastructure as buildings have become more
reliant on smart technology for their daily operation. In addition, the rapid
evolution of AI is potentially introducing risks that have not yet been
identified or quantified.
Viability Statement
The Company’s sole remaining property asset is the land at Far Ralia.
Subsequent to the post year end PID of 3p, other assets comprise an investment
in a money market fund, cash at bank and other net current assets. The Board
has therefore considered whether the Company could still be considered
‘viable’. As part of this assessment, the Board reviewed estimations of
projected costs (up to and during a liquidation period) relative to cash
retained from the initial distribution of 55p.
The Board has also carried out a robust assessment of the principal and
emerging risks faced by the Group, as detailed above.
After review, the Board are confident that the Company has sufficient
resources to be able to meet its liabilities as they fall due. However, it
also acknowledges that the Company can no longer be considered viable given
there is a clear intention to liquidate the Company and return surplus cash to
shareholders.
STATEMENT OF DIRECTOR’S RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and the Group
Consolidated Financial Statements for each year which give a true and fair
view, in accordance with the applicable Guernsey law and those International
Financial Reporting Standards (“IFRSs”) as adopted by the European Union.
In preparing those Consolidated Financial Statements, the Directors are
required to:
* Select suitable accounting policies in accordance with IAS 8: Accounting
Policies, Changes in Accounting Estimates and Errors and then apply them
consistently;
* Make judgement and estimates that are reasonable and prudent;
* Present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
* Provide additional disclosures when compliance with the specific
requirements in IFRSs as adopted by the European Union is insufficient to
enable users to understand the impact of particular transactions, other events
and conditions on the Group’s financial position and financial performance;
* State that the Group has complied with IFRSs as adopted by the European
Union, subject to any material departures disclosed and explained in the Group
Consolidated Financial Statements; and
* Prepare the Group Consolidated Financial Statements on a going concern basis
unless it is inappropriate to presume that the Group will continue in
business.
The Directors confirm that they have complied with the above requirements in
preparing the Group Consolidated Financial Statements. As detailed further
in note 2.1, the Directors have deemed it appropriate to prepare the Group
Consolidated Financial Statements on a basis other than that of a going
concern.
The Directors are responsible for keeping adequate accounting records, that
are sufficient to show and explain the Group’s transactions and disclose
with reasonable accuracy at any time, the financial position of the Group and
to enable them to ensure that the Financial Statements comply with The
Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the
assets of the Group and hence for taking reasonable steps for the prevention
and detection of fraud, error and non-compliance with law and regulations.
The maintenance and integrity of the Company’s website is the responsibility
of the Directors through its Investment Manager; the work carried out by the
auditors does not involve considerations of these matters and, accordingly,
the auditors accept no responsibility for any change that may have occurred to
the Consolidated Financial Statements since they were initially presented on
the website. Legislation in Guernsey governing the preparation and
dissemination of the consolidated financial statements may differ from
legislation in other jurisdictions.
Responsibility Statement of the Directors in respect of the Consolidated
Annual Report under the Disclosure and Transparency Rules
The Directors each confirm to the best of their knowledge that:
* The Consolidated Financial Statements, prepared in accordance with IFRSs as
adopted by the European Union, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group; and
* The management report, which is incorporated into the Strategic Report,
Directors’ Report and Investment Manager’s Review, includes a fair review
of the development and performance of the business and the position of the
Group, together with a description of the principal risks and uncertainties
that they face.
Statement under the UK Corporate Governance Code
The Directors each confirm to the best of their knowledge and belief that the
Annual Report and Consolidated Financial Statements taken as a whole are fair,
balanced and understandable and provide the information necessary to assess
the Group’s position and performance, business model and strategy.
Approved by the Board on
30 April 2025
Mike Balfour
Chair
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2024
12 Months to 12 Months to
31 Dec 2024 31 Dec 2023
Notes £ £
Rental income 24,070,912 27,552,279
Service charge income 4,899,881 4,884,357
Service charge expenditure (5,937,817) (6,354,598)
Net Rental Income 23,032,976 26,082,038
Administrative and other expenses
Investment management fee 4 (1,399,114) (2,632,225)
Other direct property operating expenses 4 (2,447,020) (2,408,461)
Net Impairment gain on trade receivables 4 (110,725) 213,048
Fees associated with strategic review and aborted merger 4 (2,800,223) (1,729,925)
Fees associated with managed wind-down and portfolio disposal 4 (399,197) -
Other administration expenses 4 (1,505,185) (1,136,742)
Total administrative and other expenses (8,661,464) (7,694,305)
Operating profit before changes in fair value of investment properties 14,371,512 18,387,733
Valuation loss from investment properties 7 - (17,989,531)
Valuation gain/(loss) from land 8 475,876 (783,683)
Estimated costs arising from future disposal (165,000) -
Loss on disposal of subsidiaries 10 (48,152,578) -
Loss on disposal of investment properties 7 (2,063,652) (279,090)
Operating loss (35,533,842) (664,571)
Finance income 5 649,889 92,178
Finance costs 5 (7,955,137) (7,695,508)
Loss for the year before taxation (42,839,090) (8,267,901)
Taxation
Tax charge 6 (55,110) -
Loss for the year, net of tax (42,894,200) (8,267,901)
Other comprehensive (loss) / income
Movement in fair value on swap 15a - (902,534)
Movement in fair value on interest rate cap 15b 98,784 (789,918)
Total other comprehensive (loss)/gain 98,784 (1,692,452)
Total comprehensive loss for the year, net of tax (42,795,416) (9,960,353)
Loss per share 2024 (p) 2023 (p)
Basic and diluted loss per share 20 (11.25) (2.17)
All items in the above Consolidated Statement of Comprehensive Income derive
from discontinuing operations.
The notes below are an integral part of these Consolidated Financial
Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
31 Dec 24 31 Dec 23
Assets Notes £ £
Non-current assets
Investment properties 7 - 388,338,754
Lease incentives 7 - 9,306,403
Land 8 - 8,250,000
Interest rate cap 15b - 559,671
Rental deposits held on behalf of tenants - 895,003
- 407,349,831
Current Assets
Investment property held for sale 9 - 35,100,000
Land 8 9,835,000 -
Trade and other receivables 11 2,171,092 6,101,152
Cash and cash equivalents 12 36,655,166 6,653,838
Interest rate cap 15b - 849,110
48,661,258 48,704,100
Total assets 48,661,258 456,053,931
Liabilities
Current liabilities
Trade and other payables 13 6,860,858 14,018,455
Distributions payable 21 11,436,569 -
18,297,427 14,018,455
Non-current liabilities
Bank borrowings 14 - 141,251,910
Obligations under finance leases 16 - 1,810,120
Rental deposits due to tenants - 895,003
- 143,957,033
Total liabilities 18,297,427 157,975,488
Net assets 30,363,831 298,078,443
Equity
Capital and reserves attributable to Company’s equity holders
Share capital 18 228,383,857 228,383,857
Treasury share reserve 18 (18,400,876) (18,400,876)
Redeemable Bonus Share issue 18 (198,233,868) -
Retained Earnings 19 - -
Capital reserves 19 (49,022,257) (9,660,578)
Other distributable reserves 19 67,636,975 97,756,040
Total equity 30,363,831 298,078,443
2024 (p) 2023 (p)
NAV per share 22 8.0 78.2
Approved and authorised for issue by the Board of Directors on 30 April 2025
and signed on their behalf by James Clifton-Brown
The accompanying notes below are an integral part of these Consolidated
Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the year ended 31 December 2024
Notes Share Capital £ Treasury Shares £ Redeemable Bonus Shares £ Retained Earnings £ Capital Reserves £ Other Distributable Reserves £ Total Equity £
Opening balance 1 January 2024 228,383,857 (18,400,876) - - (9,660,578) 97,756,040 298,078,443
Loss for the year - - - (42,894,200) - - (42,894,200)
Other comprehensive gain - - - - 98,784 - 98,784
Total comprehensive loss for the year - - - (42,894,200) 98,784 - (42,795,416)
Redeemable Bonus Shares - - (198,233,868) - - - (198,233,868)
Dividends paid 21 - - - (15,248,759) - - (15,248,759)
Dividends payable 21 - - - (11,436,569) - - (11,436,569)
Valuation loss from land 8 - - - (475,876) 475,876 - -
Reclassified from Other distributable reserves - - - 30,119,065 - (30,119,065) -
Transfer between reserves (10,279,891) 10,279,891 - -
Loss on disposal of subsidiaries - - - 48,152,578 (48,152,578) - -
Loss on disposal of investment properties 7 - - - 2,063,652 (2,063,652) - -
Balance at 31 December 2024 228,383,857 (18,400,876) (198,233,868) - (49,022,257) 67,636,975 30,363,831
For the year ended 31 December 2023
Notes Share Capital £ Treasury Shares £ Retained Earnings £ Capital Reserves £ Other Distributable Reserves £ Total Equity £
Opening balance 1 January 2023 228,383,857 (18,400,876) - 4,382,024 11,084,178 97,838,372 323,287,555
Loss for the year - - - (8,267,901) - - (8,267,901)
Other comprehensive loss - - - - (1,692,452) - (1,692,452)
Total comprehensive loss for the year - - - (8,267,901) (1,692,452) - (9,960,353)
Dividends paid 21 - - - (15,248,759) - - (15,248,759)
Valuation loss from investment properties 7 - - - 17,989,531 (17,989,531) - -
Valuation loss from land 8 - - - 783,683 (783,683) - -
Reclassified from Other distributable reserves - - - 82,332 - (82,332) -
Loss on disposal of investment properties 7 - - - 279,090 (279,090) - -
Balance at 31 December 2023 228,383,857 (18,400,876) - - (9,660,578) 97,756,040 298,078,443
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2024
12 months to 12 months to
31 Dec 2024 2023
Cash flows from operating activities Notes £ £
Loss for the year before taxation (42,839,090) (8,267,901)
Movement in lease incentives 96,128 (984,446)
Movement in trade and other receivables 3,055,794 1,212,710
Movement in trade and other payables (2,023,484) 2,353,098
Finance costs 5 7,955,137 7,695,508
Finance income 5 (649,889) (92,178)
Valuation loss from investment properties 7 - 17,989,531
Valuation loss from land 8 (475,876) 783,683
Estimated costs arising from future disposal 165,000 -
Loss on disposal of subsidiaries 10 48,152,578 -
Loss on disposal of investment properties 7 2,063,652 279,090
Net cash inflow from operating activities 15,499,950 20,969,095
Cash flows from investing activities
Finance income 5 649,889 92,178
Purchase of investment properties 7 - (23,986,401)
Purchase of land 8 (1,274,124) (1,533,683)
Capital expenditure on investment properties 7 - (21,678,721)
Net proceeds from disposal of investment properties 7 42,986,348 6,120,910
Net proceeds from disposal of subsidiaries 10 234,298,743 -
Net cash (outflow)/inflow from investing activities 276,660,856 (40,985,717)
Cash flows from financing activities
Bonus share distribution in period 18 (198,233,868) -
Borrowing on RCF 14 13,300,000 63,000,000
Repayment of RCF 14 (41,874,379) (6,125,621)
Repayment of expired facility 14 - (110,000,000)
New term facility 14 - 85,000,000
Interest paid on bank borrowing 5 (9,755,493) (7,396,815)
Receipts on Interest rate SWAP - 1,254,217
Receipts on Interest rate Cap 15b 1,123,358 365,674
Finance lease interest 5 (33,768) (49,289)
Dividends payable to the Company’s shareholders 21 (11,436,569) -
Dividends paid to the Company’s shareholders 21 (15,248,759) (15,248,759)
Net cash inflow/(outflow) from financing activities (262,159,478) 10,799,407
Net (decrease)/increase in cash and cash equivalents in the year 30,001,328 (9,217,215)
Cash and cash equivalents at beginning of year 12 6,653,838 15,871,053
Cash and cash equivalents at end of year 12 36,655,166 6,653,838
Notes TO the consolidated financial statements
1. General information
abrdn Property Income Trust Limited (“the Company”) and its former
subsidiaries (together “the Group”) historically carried on the business
of property investment through a portfolio of freehold and leasehold
investment properties located in the United Kingdom. During the year, the
Company disposed of its entire holding in its subsidiaries and is now in the
process of winding-down prior to entering liquidation. The Company is a
limited liability company incorporated in Guernsey, Channel Islands. The
Company has its listing on the London Stock Exchange.
The address of the registered office is
PO Box 255,
Trafalgar Court,
Les Banques,
St Peter Port,
Guernsey.
These audited Consolidated Financial Statements were approved for issue by the
Board of Directors on 30 April 2025.
1. Accounting policies
2.1 Basis of preparation
The audited Consolidated Financial Statements of the Group have been prepared
in accordance with International Financial Reporting Standards (“IFRS”) as
adopted by the European Union and as issued by the International Accounting
Standards Board (“IASB”), and all applicable requirements of The Companies
(Guernsey) Law, 2008. The audited Consolidated Financial Statements of the
Group have been prepared under the historical cost convention as modified by
the measurement of investment property, land and derivative financial
instruments at fair value. The Consolidated Financial Statements are presented
in pounds sterling and all values are not rounded except when otherwise
indicated.
Assessment of Going Concern
During the second half of 2023 the Board undertook a strategic review. This
review was prompted by the Board’s concerns, as well as those of some
shareholders about the Group’s size, the lack of liquidity in its shares,
the persistent discount to NAV and an uncovered dividend. The outcome of this
review, following interest from other listed REITs, was that the Board
recommended to shareholders that they vote in favour of a proposed merger with
Custodian Property Income REIT plc (“Custodian”) for the reasons outlined
in various announcements to shareholders during the first quarter of 2024.
As detailed more fully in the 2023 Annual Report & Financial Statements, this
proposal did not attract sufficient support from shareholders to be passed at
the Extraordinary General Meeting. Following the vote, shareholders were
given the opportunity to vote on a proposed change to the Group’s Investment
Policy which if passed would place the Group into a Managed and Orderly
Wind-Down (“wind-down EGM”), selling assets and returning funds to
shareholders as such funds become available. On the 28 May 2024,
approximately 96% of shareholders who voted cast their votes in favour of this
proposal and the resolution passed.
Under the Managed Wind-Down process, the Group and its subsidiaries were
managed with the intention of realising all the assets in its portfolio in an
orderly manner, with a view to repaying borrowings and making timely returns
of capital to shareholders whilst aiming to obtain the best achievable value
for the assets. As part of this process, the Group successfully disposed of
6 Investment Properties prior to reaching an agreement with GoldenTree Asset
Management LP for the sale of its wholly owned subsidiary abrdn Property
Holdings Limited (aPH). The transaction, which completed on the 29th
November, comprised the sale of 39 assets being the Group’s entire
investment property portfolio excluding its interest in the land at Far Ralia
(which was subsequently transferred to the Company prior to year end following
subsequent Scottish Government consent).
Following completion of the transaction, Shareholders were given the
opportunity to vote on a proposal for the Company to make an initial return of
the proceeds of sale by way of an initial issue and redemption of Redeemable
Bonus Shares repurchased for 52 pence per Redeemable Bonus Share. On 17th
December 2024, approximately 99.5% of shareholders who voted cast their votes
in favour of this proposal and the funds were returned to shareholders prior
to year end.
As at 31st December 2024, the Group consists solely of the Company itself
which holds the aforementioned interest in the land at Far Ralia and cash
retained from the sales proceeds to cover anticipated costs until fully
liquidated. The Board is satisfied that the Company will have no material
difficulty in meeting its liabilities as they fall due during the period until
fully liquidated. However, there now exists a clear intention to enter
liquidation once the completion accounts process has been settled with
GoldenTree and the directors are satisfied that there is an appropriate
process for realising the remaining assets. As such, in accordance with IAS1
para 25 and IAS 10 (Events after the Reporting Period) para 14, these
financial statements have been prepared on a basis other than that of a going
concern.
As a result of adopting a basis other than that of a going concern, the Board
has deemed it appropriate to reduce the fair value of the land by the expected
costs of disposal. No other costs of liquidation have been recognised other
than those committed or incurred at the balance sheet date.
Changes in accounting policy and disclosure.
The following amendments to existing standards and interpretations were
effective for the year, but were deemed not applicable to the Group:
▸ Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback;
Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements.
The following amendments to existing standards and interpretations were
effective for the year and have been adopted by the Company:
▸ Amendments to IAS 1 Classification of Liabilities as Current or
Non-current.
The amendment clarifies a criterion for recognising a liability as non-current
if an entity has the right to defer settlement for at least 12 months after
the reporting period. Given the current circumstances of the Company, all
liabilities have been deemed current albeit the Board acknowledge that the
classification is unaffected by the Company’s intention or expectation
whether it will exercise a right to defer.
New and revised IFRS Standards in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not
applied the following new and revised IFRS Accounting Standards that have been
issued but are not yet effective. The Group will consider these amendments
in due course to see if they will have any impact on the Group.
▸ Amendments to IAS 21 Lack of Exchangeability - The Effects of Changes in
Foreign Exchange Rates [Effective 1 January 2025]
▸ Amendments to IFRS 9 Financial Instruments (Classification and
Measurement) [Effective 1 January 2026]
▸ Amendments to IFRS 18 Presentation and Disclosure in Financial Statements
[Effective 1 January 2027]
▸ Amendments to IFRS 19 Subsidiaries without Public Accountability:
Disclosures [Effective 1 January 2027]
2.2 Significant accounting judgements, estimates and assumptions
The preparation of the Group’s Financial Statements requires management to
make judgements, estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities, and the disclosure of contingent
liabilities, at the reporting date. However, uncertainties about these
assumptions and estimates, could result in outcomes that could require a
material adjustment to the carrying amount of the asset or liability affected
in the future periods. The most significant estimates and judgements are set
out below. There were no critical accounting judgements.
Fair value (& presentation) of investment properties and land
Investment properties and land have historically been stated at fair value as
at the Balance Sheet date. Gains or losses arising from changes in fair values
were included in the Consolidated Statement of Comprehensive Income in the
year in which they arose. The fair value of investment properties and land was
determined by external real estate valuation experts using recognised
valuation techniques. The fair values were determined having regard to any
recent real estate transactions where available, with similar characteristics
and locations to those of the Group’s assets. The directors consider that
there is a significantly wider range of estimation uncertainty for land than
for investment properties because there are few comparable assets or recent
transactions, and the estimates involved (namely Carbon pricing). As detailed
further in notes 2.4 and 9, the Directors have also assessed the
classification of Land as a current asset considering the current marketing of
the site and presentation of these financial statements on a basis other than
that of a going concern.
2.3 Summary of material accounting policies
The Group adopted Disclosure of Accounting Policies (Amendments to IAS 1 and
IFRS Practical Statement 2) from 1 January 2023. The amendments require the
disclosure of ‘material’, rather than ‘significant’, accounting
policies. Accounting policy information is material if, when considered
together with other information included in an entity’s financial
statements, it can reasonably be expected to influence decisions that the
primary users of general-purpose financial statements make on the basis of
those financial statements.
Accounting policy information may be material because of the nature of the
related transactions, other events or conditions, even if the amounts are
immaterial. However, not all accounting policy information relating to
material transactions, other events or conditions is itself material. The
Directors have reviewed the accounting policies and are satisfied that the
information previously disclosed as part of their ‘significant’ accounting
policies fulfils the definitions of ‘material’ under the amended standards
– as such there has been no change to the summary of accounting policies
below in the current year.
A Basis of consolidation
The audited Consolidated Financial Statements have historically comprised the
financial statements of abrdn Property Income Trust Limited, and its material
wholly owned subsidiary undertakings.
Control is achieved when the Group is exposed, or has rights, to variable
returns from its involvement with subsidiaries and has the ability to affect
those returns through its power over the subsidiary. Specifically, the Group
controls a subsidiary if, and only if, it has:
* Power over the subsidiary (i.e. existing rights that give it the current
ability to direct the relevant activities of the subsidiary)
* Exposure, or rights, to variable returns from its involvement with the
subsidiary
* The ability to use its power over the subsidiary to affect its returns
The Group assesses whether or not it controls a subsidiary if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of
the subsidiary.
Assets, liabilities, income and expenses of a subsidiary acquired or disposed
of during the year are included in the consolidated statement of other
comprehensive income from the date the Group gains control until the date when
the Group ceases to control the subsidiary.
During the year, the Company completed on the disposal of its wholly owned
subsidiaries. As such, the Consolidated Statement of Financial Position
represents the Company in isolation (2023: consolidated group), while the
Consolidated Statement of Comprehensive Income includes the pro-rated income
and expenditure up to the date of disposal as noted above.
B Functional and presentation currency
Items included in the financial statements of each of the Group’s entities
are measured using the currency of the primary economic environment in which
the entity operates (“the functional currency”). The Consolidated
Financial Statements are presented in pound sterling, which is also the
Company’s functional currency.
C Revenue recognition
Revenue is recognised as follows;
i) Bank interest
Bank interest income is recognised on an accruals basis.
ii) Rental income
Rental income from operating leases is net of sales taxes and value added tax
(“VAT”) recognised on a straight-line basis over the lease term including
lease agreements with stepped rent increases. The initial direct costs
incurred in negotiating and arranging an operating lease are recognised as an
expense over the lease term on the same basis as the lease income. The cost of
any lease incentives provided are recognised over the lease term, on a
straight-line basis as a reduction of rental income. The resulting asset is
reflected as a receivable in the Consolidated Balance Sheet.
Contingent rents, being those payments that are not fixed at the inception of
the lease, for example increases arising on rent reviews, are recorded as
income in periods when they are earned. Rent reviews which remain outstanding
at the year-end are recognised as income, based on estimates, when it is
reasonable to assume that they will be received.
iii) Other income
The Group was classified as the principal in its contract with the managing
agent. Service charges billed to tenants by the managing agent are therefore
recognised gross.
iv) Grant Income
Government grants that relate to the Group’s assets are accounted for as a
reduction in the cost of the asset to which they relate. They are only
recognised when there is both reasonable assurance that the Group will comply
with all material conditions attached to the grant and that the grant will be
received.
v) Property disposals
Where revenue is obtained by the sale of properties, it is recognised once the
sale transaction has been completed, regardless of when contracts have been
exchanged.
D Expenditure
All expenses are accounted for on an accruals basis. The investment management
and administration fees, finance and all other revenue expenses are charged
through the Consolidated Statement of Comprehensive Income as and when
incurred. The Group also incurs capital expenditure which can result in
movements in the capital value of the investment properties.
E Taxation
Current income tax assets and liabilities are measured at the amount expected
to be recovered from or paid to taxation authorities. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively
enacted by the reporting date. Current income tax relating to items recognised
directly in other comprehensive income or in equity is recognised in other
comprehensive income and in equity respectively, and not in the income
statement. Positions taken in tax returns with respect to situations in which
applicable tax regulations are subject to interpretation, if any, are reviewed
periodically and provisions are established where appropriate. The Group
recognises liabilities for current taxes based on estimates of whether
additional taxes will be due. When the final tax outcome of these matters is
different from the amounts that were initially recorded, such differences will
impact the income and deferred tax provisions in the period in which the
determination is made.
Deferred income tax is provided using the liability method on all temporary
differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax assets are recognised only to the extent that it is
probable that taxable profit will be available against which deductible
temporary differences, carried forward tax credits or tax losses can be
utilised. The amount of deferred tax provided is based on the expected manner
of realisation or settlement of the carrying amount of assets and liabilities.
In determining the expected manner of realisation of an asset the Directors
consider that the Group will recover the value of investment property through
sale. Deferred income tax relating to items recognised directly in equity is
recognised in equity and not in profit or loss.
As detailed further in note 6, the Group ceased being treated as a UK REIT
from 29 November 2024.
F Investment property
Investment properties comprise completed property and property under
construction or re-development that is held to earn rentals or for capital
appreciation or both. Property held under a lease is classified as investment
property when the definition of an investment property is met.
Investment properties are measured initially at cost including transaction
costs. Transaction costs include transfer taxes, professional fees for legal
services and initial leasing commissions to bring the property to the
condition necessary for it to be capable of operating. The carrying amount
also includes the cost of replacing part of an existing investment property at
the time that cost is incurred if the recognition criteria are met.
Subsequent to initial recognition, investment properties are stated at fair
value. Fair value is based upon the market valuation of the properties as
provided by the external valuers as described in note 2.2. Gains or losses
arising from changes in the fair values are included in the Consolidated
Statement of Comprehensive Income in the year in which they arise.
For the purposes of these financial statements, in order to avoid double
counting, the assessed fair value is:
i) Reduced by the carrying amount of any
accrued income resulting from the spreading of lease incentives and/or minimum
lease payments.
ii) Increased by the carrying amount of any liability to the superior
leaseholder or freeholder (for properties held by the Group under operating
leases) that has been recognised in the Balance Sheet as a finance lease
obligation.
Acquisitions of investment properties are considered to have taken place on
exchange of contracts unless there are significant conditions attached. For
conditional exchanges acquisitions are recognised when these conditions are
satisfied. Investment properties are derecognised when they have been disposed
of and no future economic benefit is expected from their disposal. Any gains
or losses on the disposal of investment properties are recognised in the
Consolidated Statement of Comprehensive Income in the year of retirement or
disposal.
Gains or losses on the disposal of investment properties are determined as the
difference between net disposal proceeds and the carrying value of the asset
in the previous full period financial statements.
G Investment properties held for sale
Non-current assets (and disposal groups) classified as held for sale are
measured at the lower of carrying amount and fair value (except for investment
property measured using fair value model).
Non-current assets and disposal groups are classified as held for sale if
their carrying amount will be recovered through a sale transaction rather than
through continuing use. This condition is regarded as met only when the sale
is highly probable and the asset (or disposal group) is available for
immediate sale in its present condition. Management must be committed to the
sale which should be expected to qualify for recognition as a completed sale
within one year from the date of classification.
H Land
The Group’s land is capable of woodland creation and peatland restoration
projects which would materially assist the Group’s transition to Net Zero.
Land is initially measured at cost including transaction costs. Transaction
costs include transfer taxes and professional fees for legal services.
Subsequent expenditure is capitalised only if it is probable that the future
economic benefits associated with the expenditure will flow to the Group. Land
is not depreciated but instead, subsequent to initial recognition, recognised
at fair value based upon periodic valuations provided by the external valuers.
Gains or losses arising from changes in the fair values are included in the
Consolidated Statement of Comprehensive Income in the year in which they
arise.
I Trade and other receivables
Trade receivables are recognised and carried at the lower of their original
invoiced value and recoverable amount. Where the time value of money is
material, receivables are carried at amortised cost. A provision for
impairment of trade receivables is established when there is objective
evidence that the Group will not be able to collect all amounts due according
to the original terms of the receivables. Significant financial difficulties
of the debtor, probability that the debtor will enter bankruptcy or financial
reorganisation, and default or delinquency in payments (more than 30 days
overdue) are considered indicators that the trade receivable is impaired. The
amount of the provision is the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted at the
original effective interest rate. The carrying amount of the asset is reduced
through use of an allowance account, and the amount of the expected credit
loss is recognised in the Consolidated Statement of Comprehensive Income. When
a trade receivable is uncollectible, it is written off against the allowance
account for trade receivables. Subsequent recoveries of amounts previously
written off are credited in the Consolidated Statement of Comprehensive
Income.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowance for all trade receivables
and contract assets.
A provision for impairment of trade receivables is established where the
Property Manager has indicated concerns over the recoverability of arrears
based upon their individual assessment of all outstanding balances which
incorporates forward looking information. Given this detailed approach, a
collective assessment methodology applying a provision matrix to determine
expected credit losses is not used.
The amount of the provision is recognised in the Consolidated Balance Sheet
and any changes in provision recognised in the Statement of Comprehensive
Income.
J Cash and cash equivalents
Cash and cash equivalents are defined as cash in hand, demand deposits, and
other short-term highly liquid investments readily convertible within three
months or less to known amounts of cash and subject to insignificant risk of
changes in value.
K Borrowings and interest expense
All loans and borrowings were initially recognised at the fair value of the
consideration received, less issue costs where applicable. After initial
recognition, all interest-bearing loans and borrowings are subsequently
measured at amortised cost. Amortised cost is calculated by taking into
account any discount or premium on settlement. Borrowing costs are recognised
within finance costs in the Consolidated Statement of Comprehensive Income as
incurred.
L Accounting for derivative financial instruments and hedging activities
Interest rate hedges are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently remeasured at their
fair value. The method of recognising the resulting gain or loss depends on
whether the derivative is designated as a hedging instrument, and if so, the
nature of the item being hedged. The Group documents at the inception of the
transaction the relationship between hedging instruments and hedged items, as
well as its risk management objective and strategy for undertaking various
hedging transactions. The Group also documents its assessment both at hedge
inception and on an ongoing basis of whether the derivatives that are used in
hedging transactions are highly effective in offsetting changes in fair values
or cash flows of hedged items.
The effective portion of changes in the fair value of derivatives that are
designated and qualify as cash flow hedges are recognised in other
comprehensive income in the Consolidated Statement of Comprehensive Income.
The gains or losses relating to the ineffective portion are recognised in
operating profit in the Consolidated Statement of Comprehensive Income.
Amounts taken to equity are transferred to profit or loss when the hedged
transaction affects profit or loss, such as when the hedged financial income
or financial expenses are recognised.
When a derivative is held as an economic hedge for a period beyond 12 months
after the end of the reporting period, the derivative is classified as
non-current consistent with the classification of the underlying item. A
derivative instrument that is a designated and effective hedging instrument is
classified consistent with the classification of the underlying hedged item.
M Service charge
IFRS15 requires the Group to determine whether it is a principal or an agent
when goods or services are transferred to a customer. An entity is a principal
if the entity controls the promised good or service before the entity
transfers the goods or services to a customer. An entity is an agent if the
entity’s performance obligation is to arrange for the provision of goods and
services by another party.
Any leases entered into between the Group and a tenant required the Group to
provide ancillary services to the tenant such as maintenance works etc,
therefore these service charge obligations belonged to the Group. However, to
meet this obligation the Group appointed a managing agent, Jones Lang Lasalle
Inc “JLL” and directed it to fulfil the obligation on its behalf. The
contract between the Group and the managing agent created both a right to
services and the ability to direct those services. This was a clear indication
that the Group operated as a principal and the managing agent operated as an
agent. Therefore, it was necessary to recognise the gross service charge
revenue and expenditure billed to tenants as opposed to recognising the net
amount.
N Other financial liabilities
Trade and other payables are recognised and carried at invoiced value as they
are considered to have payment terms of 30 days or less and are not interest
bearing. The balance of trade and other payables are considered to meet the
definition of an accrual and have been expensed through the Income Statement
or Balance Sheet depending on classification. VAT payable at the Balance Sheet
date will be settled within 31 days of the Balance Sheet date with Her
Majesty’s Revenue and Customs (“HMRC”) and deferred rental income is
rent that has been billed to tenants but relates to the period after the
Balance Sheet date. Rent deposits recognised in note 13 as current are those
that are due within one year as a result of upcoming tenant expiries.
2.4 Adjustments to going concern basis of accounting
In addition to assessing the Company’s significant and material accounting
judgements, estimates and assumptions, the Board has also considered the
following areas where it might be appropriate to apply adjustments to the
‘normal’ IFRS basis:
1) Measurement of Assets
It is appropriate to consider the need to write down assets to their net
realisable value. Investment Properties including Land are stated at fair
value, while other assets including trade receivables are recognised at their
recoverable amount already. The Board has assessed the basis for and
measurement of the residual interest in Land and have decided to reduce fair
value by the estimated cost of disposal. Further details can be found in
note 25.
2) Liabilities
The Board recognise that it would be appropriate to accrue costs associated
with potentially onerous contracts by applying guidance in IAS 37
‘Provisions, Contingent Liabilities and Contingent Assets’. However, at
the date of approval of the financial statement, no such contracts exist, and
accordingly no provisions have been made.
3) Presentation and disclosure
The Board has assessed the classification of assets and liabilities between
current and non-current. Assets that met the criteria to be classified as held
for sale at 31 December 2024 have been classified as current assets.
Non-current assets and liabilities have been reclassified as current as they
are expected to be realised in less than 12 months.
After careful consideration, the Board believes that it would not be
meaningful to present the results of discontinued operations as a separate
financial statement line item of income or loss (in accordance with IFRS 5)
because this would not result in meaningful information in a situation where
all of an entity’s operations will be discontinued.
Finally, the Board has assessed whether adoption of a basis other than that of
a going concern would have any material impact on comparatives and have
concluded this not to be the case. As at 31 December 2023, 5 assets valued
at £35.1m were deemed ‘held for sale’ which would have been impaired by
£579,150 (0.15p per share) if adopting a similar
methodology.
3. Financial Risk Management
The Group’s principal financial liabilities have historically been loans and
borrowings. The main purpose of the Group’s loans and borrowings were to
finance the acquisition and development of the Group’s property portfolio.
The Group had rent and other receivables, trade and other payables and cash
and short-term deposits that arose directly from its operations.
The Group is exposed to market risk (including interest rate risk and real
estate risk), credit risk, liquidity risk and capital risk. The Group is not
exposed to currency risk or price risk. The Group is engaged in a single
segment of business, being property investment in one geographical area, the
United Kingdom. Therefore, the Group only engages in one form of currency
being pound sterling.
The Board of Directors reviews and agrees policies for managing each of these
risks which are summarised below.
Market risk
Market risk is the risk that the fair values of financial instruments will
fluctuate because of changes in market prices. The financial instruments held
by the Group that were affected by market risk were principally the interest
rate swap (which ended 27 April 2023) and the interest rate cap (which
commenced 27 April 2023 and ceased to belong to the Group on 29 November
2024).
i) Interest Rate risk
As described below the Group invested cash balances with Citibank, RBS and
Barclays; the latter two were only relevant for the Company’s subsidiaries.
In the current year the Company also made an investment in the abrdn Liquidity
Fund managed by Aberdeen PLC with the excess proceeds from the sale of the
subsidiaries. These balances expose the Group to cash flow interest rate risk
as the Company’s income and operating cash flows will be affected by
movements in the market rate of interest. There is considered to be no fair
value interest rate risk in regard to these balances.
The bank borrowings as described in note 14 also historically exposed the
Group to cash flow interest rate risk. The Group’s policy has historically
been to manage its cash flow interest rate risk using interest rate
derivatives (see note 15). The Group had floating rate borrowings at the point
of sale of the subsidiaries of £113,300,000; £85,000,000 of these borrowings
were fixed via an interest rate cap limiting the floating rate exposure to
3.959%.
The fair value of the derivative was exposed to changes in the market interest
rate as their fair value was calculated as the present value of the estimated
future cash flows under the agreements. The accounting policy for recognising
the fair value movements in the interest rate derivatives is described in note
2.3 L.
Trade and other receivables and trade and other payables are interest free and
have settlement dates within one year and therefore are not considered to
present a fair value interest rate risk.
The tables below set out the carrying amount of the Company’s financial
instruments excluding the amortisation of borrowing costs as outlined in note
14.
As at 31 December 2024 Fixed rate Variable rate Interest rate
£ £ £
Cash and cash equivalents - 3,807,736 0.000%
Cash held in abrdn Liquidity fund - 32,847,430 4.870%
Bank borrowings - - 0.000%
As at 31 December 2023 Fixed rate Variable rate Interest rate
£ £ £
Cash and cash equivalents - 6,653,838 0.000%
Bank borrowings 85,000,000 56,874,379 5.459%
At 31 December 2024, if market interest rates had been 100 basis points
higher, which is deemed appropriate given historical movements in interest
rates, with all other variables held constant, the profit for the year would
have been £366,552 higher (2023: £66,538 higher) as a result of the higher
interest income on cash and cash equivalents.
At 31 December 2024, if market interest rates had been 100 basis points lower
with all other variables held constant, the profit for the year would have
been £366,552 lower (2023: £66,538 lower) as a result of the lower interest
income on cash and cash equivalents.
Credit risk
Credit risk is the risk that a counterparty will be unable to meet a
commitment that it has entered into with the Group.
With respect to credit risk arising from other financial assets of the Group,
which comprise cash and cash equivalents, the Group’s exposure to credit
risk arises from default of the counterparty with a maximum exposure equal to
the carrying value of these instruments. As at 31 December 2024 £nil (2023
£316,737) was placed on deposit with The Royal Bank of Scotland plc
(“RBS”), £3,807,736 (2023: £242,900) was held with Citibank, £nil
(2023: £6,094,201) was held with Barclays, while £32,847,430 was invested in
the abrdn Liquidity Fund (Lux) Sterling Fund (2023: £nil).
The abrdn Liquidity Fund (Lux) Sterling Fund is a money market fund which
offers same day liquidity and has obtained an Aaa-mf money market fund rating
from Moody’s. Citibank is rated A-2 Stable by Standard & Poor’s and P-2
Stable by Moody’s.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulties in
realising assets or otherwise raising funds to meet financial commitments. The
investment property in which the Company invests is not traded in an organised
public market and is illiquid. As a result, the Company may not be able to
liquidate its investment in that property quickly at an amount close to its
fair value in order to meet the Company’s liquidity requirements.
The following table summarises the maturity profile of the Group’s financial
liabilities based on contractual undiscounted payments.
The disclosed amounts for interest-bearing loans and interest rate derivatives
in the below table are the estimated net undiscounted cash flows.
The Company’s liquidity position is regularly monitored by management and is
reviewed quarterly by the Board of Directors.
Year ended 31 December 2024 On demand 12 months 1 to 5 years >5 years Total
£ £ £ £ £
Trade and other payables 18,297,427 - - - 18,297,427
18,297,427 - - - 18,297,427
Year ended 31 December 2023 On demand 12 months 1 to 5 years >5 years Total
£ £ £ £ £
Interest-bearing loans - 8,442,998 152,428,127 - 160,871,125
Trade and other payables 7,514,629 52,450 209,800 5,140,100 12,916,979
Rental deposits due to tenants - 299,124 713,058 181,945 1,194,127
7,514,629 8,794,572 153,350,985 5,322,045 174,982,231
Fair values
Set out below is a comparison by class of the carrying amounts and fair value
of the Group’s financial instruments that are carried in the financial
statements at amortised cost.
Carrying amount Fair Value
2024 2023 2024 2023
Financial Assets £ £ £ £
Cash and cash equivalents 36,655,166 6,653,838 36,655,166 6,653,838
Trade and other receivables 2,171,092 6,101,152 2,171,092 6,101,152
Financial liabilities
Bank borrowings - 141,251,910 - 144,957,576
Trade and other payables 18,297,427 8,217,588 18,297,427 8,217,588
In addition to the above, the Group's financial instruments in the past also
included an Interest rate swap and Interest rate cap. These have not been
included in the disclosure above as these were already held at fair value.
The fair value of trade receivables and payables are materially equivalent to
their amortised cost.
The fair value of the financial assets and liabilities are included at an
estimate of the price that would be received to sell a financial asset or paid
to transfer a financial liability in an orderly transaction between market
participants at the measurement date. The following methods and assumptions
were used to estimate the fair value:
* Cash and cash equivalents, trade and other receivables and trade and other
payables are the same as fair value due to the short-term maturities of these
instruments. Trade and other receivables/payables are measured in reference
to contractual amounts due to/from the Group. These contractual amounts are
directly observable.
* The fair value of bank borrowings was estimated by discounting future cash
flows using rates currently available for debt on similar terms and remaining
maturities. The fair value approximated their carrying values gross of
unamortised transaction costs. This was considered as being valued at level 2
of the fair value hierarchy.
The table below shows an analysis of the fair values of financial assets and
liabilities recognised in the Balance Sheet by the level of the fair value
hierarchy:
Level 1 – Quoted (unadjusted) market prices in active markets for identical
assets or liabilities.
Level 2 – Valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly
observable.
Level 3 – Valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable.
Year ended 31 December 2024 Level 1 Level 2 Level 3 Total fair value
Financial assets
Trade and other receivables - 2,171,092 - 2,171,092
Cash and cash equivalents 36,655,166 - - 36,655,166
36,655,166 2,171,092 - 38,826,258
Financial liabilities
Trade and other payables - 18,297,427 - 18,297,427
- 18,297,427 - 18,297,427
Year ended 31 December 2023 Level 1 Level 2 Level 3 Total fair value
Financial assets
Trade and other receivables - 6,101,152 - 6,101,152
Cash and cash equivalents 6,653,838 - - 6,653,838
Interest rate cap - 1,408,781 - 1,408,781
Rental deposits held on behalf of tenants 895,003 - - 895,003
Right of use asset - 1,810,120 - 1,810,120
7,548,841 9,320,053 - 16,868,894
Financial liabilities
Trade and other payables - 8,217,588 - 8,217,588
Bank borrowings - 144,957,576 - 144,957,576
Obligation under finance leases - 1,810,120 - 1,810,120
Rental deposits held on behalf of tenants 895,003 - - 895,003
895,003 154,985,284 - 155,880,287
4. Administrative and Other Expenses
2024 2023
Notes £ £
Investment management fees 4a 1,399,114 2,632,225
Other direct property expenses
Vacant Costs (excluding void service charge) * 1,263,429 1,217,722
Repairs and maintenance 341,480 418,360
Letting fees 377,364 405,684
Other costs 464,747 366,695
Total Other direct property expenses 2,447,020 2,408,461
Net Impairment loss/(gain) on trade receivables 110,725 (213,048)
Fees associated with strategic review and aborted merger 4b 2,800,223 1,729,925
Fees associated with managed wind down and disposal 4b 399,197 -
Other administration expenses
Directors’ fees and subsistence 23 389,757 239,436
Valuer’s fees 4c 57,835 75,524
Auditor’s fees 4d 167,125 192,700
Marketing 4a 118,425 222,893
Other administration costs 4e 772,043 406,189
Total Other administration expenses 1,505,185 1,136,742
Total Administrative and other expenses 8,661,464 7,694,305
* Void Service charge costs for the year amounted to £1,037,936 (2023:
£1,470,241). These have been reclassified as Service charge expenditure as
noted below.
2024 2023
£ £
Total service charge billed to tenants 4,244,088 4,731,793
Service charge due from/(to) tenants 655,793 152,564
Service charge income 4,899,881 4,884,357
Total service charge expenditure incurred 4,899,881 4,884,357
Service charge incurred in respect of void units 1,037,936 1,470,241
Service charge expenditure 5,937,817 6,354,598
4a. Investment management fees
From 1 January 2023, the Group agreed a 10bps reduction in the fee payable to
the Investment Manager under the terms of the IMA; effective from 1 January
2023 this was 0.60% of total assets up to £500m, and 0.50% of total assets in
excess of £500 million. Considering the proposed merger (see note 2.1), the
Board served notice on the Investment Management Agreement on 12 October
2023. Following the Shareholder vote to place the Group into a Managed
Wind-Down, a new agreement was signed effective 31 May 2024. Under the
novated agreement, the Investment Manager is entitled to a fee of 0.20% per
annum on total assets (with a floor of £50,000 per quarter until there are no
properties remaining and £35,000 thereafter). The Investment Manager is also
entitled to a further 0.40% payable based on the Gross Disposal proceeds of
the underlying portfolio – £1,459,100 has been recognised in accordance
with the disposal of the assets to date and is part of the realised loss on
disposal.
As detailed further in Note 26, the Investment Manager receives an
‘Incentive Fee’ based on the cumulative Gross Disposal Proceeds relative
to valuation of the portfolio as at 31 May 2024, with the fee only being
triggered if this is greater than 90% of said valuation and if all assets are
sold prior to November 2025; if Far Ralia is sold at its current valuation,
this fee would be £187,388 if sold prior to 28 November 2025 and £374,775 if
sold prior to 28 May 2025.
In addition, the Company paid the Investment Manager a sum of £98,688
excluding VAT (2023: £184,750 excluding VAT) to participate in the Managers
marketing programme and Investment Trust share plan.
4b. Fees associated with strategic review, aborted merger and wind-down
As described in more detail in note 2.1, the Board undertook a strategic
review during the second half of 2023 after concerns over the Company’s
size, liquidity, persistent discount to NAV and dividend cover. The outcome
of this review, following interest from other listed REITs, was that the Board
recommended to shareholders that they vote in favour of a proposed merger with
Custodian REIT. The costs associated with the initial Rule 2.7 announcement
(including advisor, due diligence and valuation fees) were £2,041,248 of
which £1,729,925 was accrued and unpaid at 31 December 2023 based on levels
of work in progress (WIP). Since the end of 2023, further fees and costs of
£3,199,420 have been recognised in 2024 of which £399,197 relates to the
Managed Wind-Down and portfolio disposal. These fees exclude transaction costs
which are explained in note 10.
4c. Valuers fee
Knight Frank LLP (“the Valuers”), external international real estate
consultants, were appointed as valuers in respect of the assets comprising the
property portfolio. The total valuation fees charged for the year amounted to
£57,835 (2023: £75,524). Until the sale of the subsidiaries, the total
valuation fee comprised a base fee for the ongoing quarterly valuation at an
annual rate of 0.017 percent of the aggregate value of the property portfolio
(paid quarterly), and a one-off fee on acquisition of an asset. Following
the conclusion of the sale, the agreement with Knight Frank was novated and
fees are now and initial £5,000 (excluding VAT) for the first valuation and
£2,500 (excluding VAT) for each subsequent valuation undertaken.
The amount due and payable at the year-end amounted to £5,000 excluding VAT
(2023: £18,665 excluding VAT).
4d. Auditor’s fee
At the year-end date Deloitte LLP continued as independent auditor of the
Company. The audit fees for the year amounted to £167,125 (2023: £192,700)
and relate to audit services provided for the 2024 financial year; including
£52,445 pertaining to the Group’s share of fees relating to the
subsidiaries. Deloitte LLP did not provide any non-audit services in the year
(2023: nil).
4e. Administration, secretarial and registrar fees
On 19 December 2003 Northern Trust International Fund Administration Services
(Guernsey) Limited (“Northern Trust”) was appointed administrator,
secretary and registrar to the Group. Following increased activity early 2024,
a novated agreement with Northern Trust was agreed on 29 July 2024 – prior
to this, Northern Trust was entitled to an annual fee, payable quarterly in
arrears, of £65,000. From 1 August 2024 to 31 July 2025, Northern Trust are
entitled to an annual fee of £95,670 subject to annual fixed RPI increases of
6.3% effective on the anniversary of 1 August. In addition, they were entitled
to a fixed fee of £25,000 in addition to fees of £3,000 (subject to RPI
uplifts) for assistance with each property disposal – replaced with a fee of
£10,000 if multiple properties are sold in tranches. Finally, Northern Trust
is also entitled to reimbursement of reasonable out of pocket expenses. Total
fees and expenses charged for the year amounted to £136,262 (2023: £70,325).
The amount due and payable at the year-end amounted to £116,946 (2023:
£32,500).
5. Finance income and costs
2024 2023
£ £
Interest income on cash and cash equivalents 649,889 92,178
Finance income 649,889 92,178
Interest expense on bank borrowings 7,607,108 8,119,398
Non-utilisation charges on facilites 216,940 198,314
Receipt on interest rate swap - (911,184)
Receipt on interest rate caps (910,100) (578,933)
Amortisation of premium paid for interest rate cap 762,904 565,030
Amortisation of arrangement costs (see note 14) 244,517 253,594
Finance lease interest 33,768 49,289
Finance costs 7,955,137 7,695,508
Of the finance costs above, £1,959,463 of the interest expense on bank
borrowings were accruals at 31 December 2023 and included in Trade and other
payables. No such accruals existed at 31 December 2024 as the debt and
associated accrued interest was settled via the disposal proceeds.
6. Taxation
UK REIT Status
The Group migrated tax residence to the UK and elected to be treated as a UK
REIT with effect from 1 January 2015. As a UK REIT, the income profits of the
Group’s UK property rental business were exempt from corporation tax as were
any gains it makes from the disposal of its properties, provided they were not
held for trading or sold within three years of completion of development. The
Group was otherwise subject to UK corporation tax at the prevailing rate.
As the principal company of the REIT, the Company was required to distribute
at least 90% of the income profits of the Group’s UK property rental
business. There are a number of other conditions that were also required to be
met by the Company and the Group to maintain REIT tax status. These conditions
were met in the period up until the Company disposed of its shareholding in
the subsidiaries. Accordingly, deferred tax was not recognised on temporary
differences relating to the property rental business.
Following the sale of the Group’s subsidiaries on 29th November 2024
(including the investment property portfolio), the Group automatically left
the UK REIT regime; one of the quantitative requirements for being a member of
the UK REIT regime is that the qualifying property rental business must
contain at least three separate properties. Prior to the sale, the Group
consulted with their appointed tax advisors on implications of leaving the
REIT regime.
The Company and its former Guernsey subsidiary had obtained exempt company
status in Guernsey so that they were exempt from Guernsey taxation on income
arising outside Guernsey and bank interest receivable in Guernsey. A
reconciliation between the tax charge and the product of accounting profit
multiplied by the applicable tax rate for the year ended 31 December 2024 and
2023 is as follows:
2024 2023
£ £
Loss before tax (42,839,090) (8,267,901)
Tax calculated at UK statutory corporation tax rate of 25% (2023*: blended rate of 23.5%) (10,709,772) (1,942,957)
Valuation loss in respect of Investment properties not subject to tax (pre-29th Nov) 3,425,858 4,477,291
UK REIT exemption on net income (1,711,456) (2,534,334)
Valuation loss in respect of Lant at Far Ralia post 29th Nov 164,562 -
Valuation loss in respect of sale of Subsidiaries 8,885,918 -
Current income tax charge 55,110 -
* Calculated as a blended average of 23.5% being 3 months at the prevailing
19%, and 9 months at 25%.
7. Investment Properties
UK UK UK UK
Industrial Office Retail Other Total
2024 2024 2024 2024 2024
£ £ £ £ £
Market value at 1 January 250,070,037 72,575,000 72,390,000 35,900,000 430,935,037
Purchase of investment properties - - - - -
Capital expenditure on investment properties - - - - -
Opening market value of disposed investment properties (29,700,000) (15,350,000) - - (45,050,000)
Market value prior to sale of subsidiaries 220,370,037 57,225,000 72,390,000 35,900,000 385,885,037
Opening market value of disposed investment properties (220,370,037) (57,225,000) (72,390,000) (35,900,000) (385,885,037)
Market value at 31 December - - - - -
Carrying value at 31 December - - - - -
Valuations have been performed by Knight Frank LLP, acting in the capacity of
a valuation adviser to the AIFM, accredited external valuers with recognised
and relevant professional qualifications and recent experience of the location
and category of the investment properties being valued. The valuation model in
accordance with Royal Institute of Chartered Surveyors (‘RICS’)
requirements on disclosure for Regulated Purpose Valuations has been applied
(RICS Valuation - Global Standards, which incorporate the International
Valuation Standards). These valuation models are consistent with the
principles in IFRS 13. Historically, an adjustment has also been made for
lease incentives (2023: £9,248,902) and right of use assets (£1,810,120) in
respect of the present value of future ground rents – however both are no
longer relevant following the sale of the subsidiaries. Valuation gains and
losses from investment properties are recognised in the Consolidated Statement
of Comprehensive Income for the period and are attributable to changes in
unrealised gains or losses relating to investment properties held at the end
of the reporting period.
UK UK UK UK
Industrial Office Retail Other Total
2023 2023 2023 2023 2023
£ £ £ £ £
Market value at 1 January 227,525,000 88,450,000 53,550,000 39,150,000 408,675,000
Purchase of investment properties 4,367,140 - 19,619,261 - 23,986,401
Capital expenditure on investment properties 17,394,611 3,658,739 624,029 1,342 21,678,721
Opening market value of disposed investment properties (6,400,000) - - - (6,400,000)
Valuation loss from investment properties 6,062,225 (19,490,769) (1,360,741) (3,200,246) (17,989,531)
Movement in lease incentives 1,121,061 (42,970) (42,549) (51,096) 984,446
Market value at 31 December 250,070,037 72,575,000 72,390,000 35,900,000 430,935,037
Investment property recognised as held for sale (19,750,000) (15,350,000) - - (35,100,000)
Market value net of held for sale at 31 December 230,320,037 57,225,000 72,390,000 35,900,000 395,835,037
Right of use asset recognised on leasehold properties - 1,810,120 - - 1,810,120
Adjustment for lease incentives (5,957,199) (1,943,609) (846,233) (559,362) (9,306,403)
Carrying value at 31 December 224,362,838 57,091,511 71,543,767 35,340,638 388,338,754
In the Cash Flow Statement, proceeds from disposal of investment properties
comprise:
2024 2023
£ £
Opening market value of disposed investment properties 45,050,000 6,400,000
Loss on disposal of investment properties (2,063,652) (279,090)
Net proceeds from disposal of investment properties 42,986,348 6,120,910
Valuation Methodology
The fair value of completed investment properties were historically determined
using the income capitalisation method.
The income capitalisation method is based on capitalising the net income
stream at an appropriate yield. In establishing the net income stream the
valuers reflected the current rent (the gross rent) payable to lease expiry,
at which point the valuer assumed that each unit would be re-let at their
opinion of ERV. The valuers made allowances for voids where appropriate, as
well as deducting non recoverable costs where applicable. The appropriate
yield was selected on the basis of the location of the building, its quality,
tenant credit quality and lease terms amongst other factors.
The table below outlines the valuation techniques and inputs used to derive
Level 3 fair values for each class of investment properties. The table
includes:
* The fair value measurements at the end of the reporting period.
* The level of the fair value hierarchy (e.g. Level 3) within which the fair
value measurements are categorised in their entirety.
* A description of the valuation techniques applied.
* Fair value measurements, quantitative information about the significant
unobservable inputs used in the fair value measurement.
* The inputs used in the fair value measurement, including the ranges of rent
charged to different units within the same building.
As noted above, all investment properties listed in the table below are
categorised Level 3 and all are valued using the Income Capitalisation method.
Country & Class 2023 UK Industrial Level 3 UK Office Level 3 UK Retail Level 3 UK Other Level 3
Fair Value 2023 £ 250,070,037 72,575,000 72,390,000 35,900,000
Key Unobservable Input 2023 Initial Yield Initial Yield Initial Yield Initial Yield
Reversionary yield Reversionary yield Reversionary yield Reversionary yield
Equivalent Yield Equivalent Yield Equivalent Yield Equivalent Yield
Estimated rental value per sq ft Estimated rental value per sq ft Estimated rental value per sq ft Estimated rental value per sq ft
Range (weighted average) 2023 0.00% to 8.97% (4.80%) 4.56% to 10.51% (7.57%) 6.03% to 9.12% (6.91%) 5.40% to 9.30% (6.53%)
4.74% to 8.79% (6.55%) 7.34% to 12.20% (10.33%) 5.52% to 7.99% (6.22%) 5.81% to 9.40% (6.52%)
5.28% to 8.30% (6.46%) 7.04% to 9.98% (8.89%) 5.76% to 9.91% (7.02%) 5.58% to 9.21% (6.67%)
£4.75 to £10.25 (£7.04) £15.79 to £45.94 (£27.08) £0.00 to £30.61 (£11.35) £6.50 to £20.00 (£14.49)
Descriptions and definitions
The table above includes the following descriptions and definitions relating
to valuation techniques and key observable inputs made in determining the fair
values.
Estimated rental value (ERV)
The rent at which space could be let in the market conditions prevailing at
the date of valuation.
Equivalent yield
The equivalent yield is defined as the internal rate of return of the cash
flow from the property, assuming a rise or fall to ERV at the next review or
lease termination, but with no further rental change.
Initial yield
Initial yield is the annualised rents of a property expressed as a percentage
of the property value.
Reversionary yield
Reversionary yield is the anticipated yield to which the initial yield will
rise (or fall) once the rent reaches the ERV.
The table below shows the ERV per annum, area per square foot, average ERV per
square foot, initial yield and reversionary yield as at the Balance Sheet
date.
2024 2023
ERV p.a. £nil £34,189,042
Area sq.ft. - 3,503,840
Average ERV per sq.ft. £nil £9.76
Initial yield N/A 5.8%
Reversionary yield N/A 7.1%
The table below presents the sensitivity of the valuation to changes in the
most significant assumptions underlying the valuation of completed investment
property.
2024 2023
£ £
Increase in equivalent yield of 50 bps N/A (31,373,168)
Decrease in rental rates of 5% (ERV) N/A (15,910,176)
Below is a list of how the interrelationships in the sensitivity analysis
above can be explained.
In both cases outlined in the sensitivity table the estimated Fair Value would
increase (decrease) if:
* The ERV is higher (lower)
* Void periods were shorter (longer)
* The occupancy rate was higher (lower)
* Rent free periods were shorter (longer)
* The capitalisation rates were lower (higher)
8. Land
2024 2023
£ £
Cost
Balance at the beginning of the year 9,595,555 8,061,872
Additions 2,300,154 2,154,160
Government Grant Income receivable (1,026,030) (620,477)
Balance at the end of the year 10,869,679 9,595,555
Accumulated depreciation and amortisation
Balance at the beginning of the year (1,345,555) (561,872)
Valuation gain/(loss) from land 475,876 (783,683)
Balance at the end of the year (869,679) (1,345,555)
Projected sales costs (see note 25) (165,000) -
Carrying amount as at 31 December 9,835,000 8,250,000
Valuation methodology
The Land is held at fair value and is categorised Level 3. The Group
appoints suitable valuers (such appointment is reviewed on a periodic basis)
to undertake a valuation of the land on a quarterly basis, but going forward
on a half yearly basis. The valuation is undertaken in accordance with the
current RICS guidelines by Knight Frank LLP whose credentials are set out in
note 7.
Additions represent costs associated with the reforestation and peatland
restoration at Far Ralia. Grants are receivable from the Scottish Government
for such costs. The conditions of the grant are deemed to be complied with on
initial completion of work on the associated Work Areas identified under the
Grant agreement. As at 31 December 2024, no grant income has yet been
received, however, £1,646,507 (2023: £620,477) has been recognised in
accordance with the Group’s policy for grant recognition (see Note 2.3 C
iv).
As noted in more detail in note 2.1, the current Annual Report & Accounts are
not prepared on a going concern basis with the carrying value reduced by
estimated costs of disposal and £165,000 has been recognised to write down
the Land to its projected net realisable value. Further details are provided
in note 25.
The valuation above is sensitive to movements in the underlying inputs – an
increase in the growth rate of Carbon Prices per T/CO2 (10% over base
assumptions during an initial 26-year period) would result in an increase in
valuation of £1.8m. Whereas a decrease in growth rates (10% during the same
period) would result in a decrease in valuation of £1.7m.
9. Investment Properties Held for Sale
Following the sale of the subsidiaries on the 29 November 2024, the Group no
longer held any investment properties baring its interest in the Land at Far
Ralia. The Company is actively seeking a buyer for this site, however, for
the purposes of these Financial Statements it has been elected not to classify
these as Held for Sale as the Land has already been reclassified to Current
Assets because the financial statements have been prepared on a basis other
than that of a going concern.
As at 31 December 2023, the Group was actively seeking a buyer for several
assets including its industrial assets Opus 9 in Warrington (sold March 2024
for £6.75m), Unit 5 Monkton Business Park in Hebburn (sold April 2024 for
£5.3m) and Kings Business Park in Bristol (sold April 2024 for £7.9m). In
addition, the Group was actively seeking a buyer of its office asset 15
Basinghall Street in London (sold March 2024 for £9.8m), and 101 Princess
Street in Manchester (sold September 2024 for £4.3m).
In addition to the sales noted above, the Group also sold its industrial asset
Bastion Point in Dover in August 2024 for a headline price of £9.5m
10. Investments in Limited Partnership and Subsidiaries
The Company historically owned 100 per cent of the issued ordinary share
capital of abrdn Property Holdings Limited, a company with limited liability
incorporated and domiciled in Guernsey, Channel Islands, whose principal
business is property investment. abrdn Property Holdings Limited, in turn,
owned the entire issued share capital of a General Partner which held, through
a Limited Partnership, a portfolio of UK real estate assets.
* abrdn Property Holdings Limited, a property investment company with limited
liability incorporated in Guernsey, Channel Islands.
* abrdn (APIT) Limited Partnership, a property investment limited partnership
established in England.
* abrdn APIT (General Partner) Limited, a company with limited liability
incorporated in England, whose principal business is property investment.
* abrdn (APIT Nominee) Limited, a company with limited liability incorporated
and domiciled in England, whose principal business is property investment.
On 29th November, the Company completed on the disposal of 100% of the share
capital of abrdn Property Holdings Limited. The transaction included the
disposal of the entire group of subsidiaries listed above. Following
subsequent negotiations over the Completion Accounts, the final price paid by
GoldenTree was £234.3m.
2024
£
Disposal of abrdn Property Holdings Limited 234,298,743
Less: transaction costs associated with the sale (5,237,261)
Net Proceeds 229,061,482
Net Assets of disposal Group at date of sale (post completion account review) 276,614,616
Derecognition of Far Ralia (transferred to Company) (10,000,000)
Derecognition of Accrued Grant Income for Far Ralia (transferred to Company) (1,646,507)
Trade and Other Receivables transferred to Company (505,296)
Adjusted Net Assets of disposal Group 264,462,813
Loss on Disposal of Subsidiaries 35,401,331
Reclassification of unrealised losses in Investment Portfolio to Realised Losses 12,751,247
Realised Loss on Disposal of Subsidiaries 48,152,578
Included within the transaction costs associated with the sale, were
£1,459,100 payable to the Investment Manager.
11. Trade and other receivables
2024 2023
£ £
Trade receivables 189,460 4,574,012
Less: provision for impairment of trade receivables (189,460) (832,240)
Trade receivables (net) - 3,741,772
Rental deposits held on behalf of tenants - 299,124
Accrued Grant Income (see Note 8) 1,646,507 620,477
Other receivables 524,585 1,439,779
Total trade and other receivables 2,171,092 6,101,152
Reconciliation for changes in the provision for impairment of trade
receivables:
2024 2023
£ £
Opening balance (832,240) (2,137,972)
(Charge)/Credit for the year (110,725) 213,048
Reversal for amounts written-off 369,386 1,092,684
Derecognition on disposal of subsidiaries 384,119 -
Closing balance (189,460) (832,240)
The estimated fair values of receivables are the discounted amount of the
estimated future cash flows expected to be received and approximate their
carrying amounts.
Amounts are considered impaired when it becomes unlikely that the full value
of a receivable will be recovered. Movement in the balance considered to be
impaired have been included in other direct property costs in the Consolidated
Statement of Comprehensive Income. As at 31 December 2024, trade receivables
of £189,460 (2023: £832,240) were considered impaired and provided for.
The ageing of these receivables is as follows:
2024 2023
£ £
0 to 3 months (9,485) (37,274)
3 to 6 months (18,299) (81,350)
Over 6 months (161,676) (713,616)
(189,460) (832,240)
If the provision for impairment of trade receivables increased by £1 million
then the Company’s earnings and net asset value would decrease by £1
million. If it decreased by £1 million then the Company’s earnings and net
asset value would increase by £1 million.
As of 31 December 2024, trade receivables of £nil (2023: £500,470) were less
than 3 months past due but considered not impaired.
12. Cash and cash equivalents
2024 2023
£ £
Cash held at bank 3,807,736 6,337,101
Cash held in abrdn Liquidity fund 32,847,430 -
Cash held on deposit with RBS - 316,737
36,655,166 6,653,838
Cash held at banks earns interest at floating rates based on daily bank
deposit rates. Deposits are made for varying periods of between one day and
three months, depending on the immediate cash requirements of the Group, and
earn interest at the applicable short-term deposit rates. The abrdn Liquidity
fund was £18.3bn in size at 31st December2024, had a weighted average
maturity of 48 days and provided a Gross 30-day annualised yield of 4.87% in
December.
13. Trade and other payables
2024 2023
£ £
Trade and other payables 6.860,858 7,023,461
VAT payable - 656,894
Deferred rental income - 6,038,976
Rental deposits due to tenants - 299,124
6,860,858 14,018,455
Trade and other payables are recognised at amortised cost. Trade payables are
non-interest bearing and normally settled on 30-day terms.
14. Bank borrowings
2024 £ 2023 £
Loan facility (including Rolling Credit Facility) - 165,000,000
Drawn down outstanding balance - 141,874,379
The Groups £165m debt facility with Royal Bank of Scotland International
(‘RBSI’) was transferred as part of the sale of the subsidiaries on 29
November 2024. At the time of the disposal, £28.3m of the RCF was drawn (31
December 2023 £56.9m) in addition to the term loan of £85m.
2024 £ 2023 £
Opening carrying value of expired facility as at 1 January - 109,928,234
Borrowings during the period on expired RCF - 25,000,000
Repayment of expired RCF - (25,000,000)
Repayment of expired facility - (110,000,000)
Amortisation arrangement costs - 71,766
Closing carrying value of expired facility - -
Opening carrying value of new facility as at 1 January 141,251,910 (804,297)
Borrowings during the period on new RCF 13,300,000 63,000,000
Repayment of new RCF (41,874,379) (6,125,621)
New term loan facility - 85,000,000
Elimination of RCF indebtedness on sale (28,300,000) -
Elimination of Term Loan indebtedness on sale (85,000,000) -
Eliminate residual unamortised arrangement costs on sale 377,952 -
Amortisation arrangement costs 244,517 181,828
Closing carrying value - 141,251,910
Opening carrying value of facilities combined as at 1 January 141,251,910 109,123,937
Closing carrying value of facilities combined - 141,251,910
2024 2023
£ £
Amortisation of arrangement costs (expired facility) - 71,766
Amortisation of arrangement costs (new facility) 244,517 181,828
See Note 5 244,517 253,594
Analysis of movement in net debt Cash and cash equivalents £ Interest-bearing loans £ 2024 Net debt £ Cash and cash equivalents £ Interest-bearing loans £ 2023 Net debt £
Opening balance 6,653,838 (141,251,910) (134,598,072) 15,871,053 (109,123,937) (93,252,884)
Cash movement 32,851,922 28,574,379 61,426,301 (9,217,215) (31,874,379) (41,091,594)
Elimination on sale (2,850,594) 112,922,048 110,071,454 - - -
Amortisation of arrangement costs - (244,517) (244,517) - (253,594) (253,594)
Closing balance 36,655,166 - 36,655,166 6,653,838 (141,251,910) (134,598,072)
All loan covenants were met during the year ended December 2024 and prior to
the sale of the subsidiaries, further details relating to covenants have not
been provided as they were complied with during the year and there were no
covenants at the year-end.
2024 2023
£ £
Loan amount - 141,874,379
Cash - (6,653,838)
- 135,220,541
Investment property valuation 10,000,000 439,185,037
LTV percentage N/A 30.8%
The loan facility was secured by fixed and floating charges over the assets of
the Company and its wholly owned subsidiaries, abrdn Property Holdings Limited
and abrdn (APIT) Limited Partnership.
15. Interest rate Swap and Cap
In order to mitigate any interest rate risk linked to their debt facilities,
the Group's policy was to manage its cash flow using hedging instruments.
The following hedging instruments were effective during the year:
15a Historic Interest Rate Swap
The Group had previously taken out an interest rate swap of a notional amount
of £110,000,000 with RBS as part of a refinancing exercise in April 2016.
The interest rate swap effective date was 28 April 2016 and had a maturity
date of 27 April 2023. Under the swap the Company agreed to receive a floating
interest rate linked to SONIA and pay a fixed interest rate of 1.35%.
2024 2023
£ £
Opening fair value of interest rate swaps at 1 January - 1,238,197
Reclassification of interest accrual - (335,663)
Valuation (loss)/gain on interest rate swap - (902,534)
Reclassified to Profit & Loss - -
Closing fair value of interest rate swap at 31 December - -
15b Interest Rate Cap
Simultaneously to the breaking of the £85,000,000 swap, the Group agreed an
interest rate cap against a notional amount of £85,000,000 (due to commence
27 April 2023) with a cap level (SONIA) set at 3.959%. The cost of
purchasing this cap was £2,507,177 which would have expired in April 2026 at
the same time as the loan facility.
2024 2023
£ £
Opening fair value of interest rate cap at 1 January 1,408,781 2,550,469
Net Change in fair value (794,477) (1,141,688)
Derecognition of Interest Rate Cap on disposal of subsidiary (614,304) -
Closing fair value of interest rate cap at 31 December - 1,408,781
The change in fair value of the interest rate cap comprises fair value changes
and interest received, paid and accrued.
2024
Cost of hedging Cash flow hedge Total
£ £ £
Opening fair value 625,276 783,505 1,408,781
Valuation (loss)/gain (625,276) 871,254 245,978
Interest received - (1,040,455) (1,040,455)
Net Change in fair value (625,276) (169,201) (794,477)
Closing fair value of interest rate cap at 31 December - 614,304 614,304
Less Closing Interest Accrual * - (82,903) (82,903)
Adjusted fair value of interest rate cap at 31 December - 531,401 531,401
Opening Adjusted fair value of interest rate cap at 1 January 625,276 783,505 1,408,781
Valuation (loss)/gain recognised on Adjusted Valuation (625,276) (252,104) (877,380)
Net Change in fair value (as above) (625,276) (169,201) (794,477)
Less Closing Interest Accrual (as above) * - (82,903) (82,903)
Valuation (loss)/gain recognised on Adjusted Valuation (625,276) (252,104) (877,380)
2024
Interest Rate Cap Reserves Reconciliation Cost of hedging reserve Cash flow hedge reserve Total
£ £ £
Opening Reserve (1,316,871) 570,245 (746,626)
Valuation (loss)/gain recognised on Adjusted Valuation (625,276) (252,104) (877,380)
Less Prior accrual - 213,260 213,260
Amortisation of Premium (See Note 5) 762,904 - 762,904
Valuation loss as recognised in Other Comprehensive Income 137,628 (38,844) 98,784
Derecognition of residual premium 1,179,243 - 1,179,243
Derecognition of residual value - (531,401) (531,401)
Closing Reserve - - -
* As the valuation of the interest rate cap includes a valuation attributable
to the unsettled interest (due to 21st January) a separate accrual has not
been recorded in the balance sheet. Instead, this represents a recycling of
the change in Other Comprehensive Income for the Cash flow hedge to Finance
Cost.
2023
Cost of hedging Cash flow hedge Total
£ £ £
Opening fair value 1,779,151 771,318 2,550,469
Valuation (loss)/gain (1,153,875) 377,860 (776,015)
Interest received - (365,673) (365,673)
Net Change in fair value (1,153,875) 12,187 (1,141,688)
Closing fair value of interest rate cap at 31 December 625,276 783,505 1,408,781
Less Closing Interest Accrual * - (213,260) (213,260)
Adjusted fair value of interest rate cap at 31 December 625,276 570,245 1,195,521
Opening Adjusted fair value of interest rate cap at 1 January 1,779,151 771,318 2,550,469
Valuation (loss)/gain recognised on Adjusted Valuation (1,153,875) (201,073) (1,354,948)
Net Change in fair value (as above) (1,153,875) 12,187 (1,141,688)
Less Closing Interest Accrual (as above) * - (213,260) (213,260)
Valuation (loss)/gain recognised on Adjusted Valuation (1,153,875) (201,073) (1,354,948)
2023
Interest Rate Cap Reserves Reconciliation Cost of hedging reserve Cash flow hedge reserve Total
£ £ £
Opening Reserve (728,026) 771,318 43,292
Valuation (loss)/gain recognised on Adjusted Valuation (1,153,875) (201,073) (1,354,948)
Amortisation of Premium (See Note 5) 565,030 - 565,030
Valuation gain as recognised in Other Comprehensive Income (588,945) (201,073) (789,918)
Closing Reserve (1,316,871) 570,245 (746,626)
The Interest associated with the cap recognised as an offset against Finance
Cost is summarised below:
2024 2023
£ £
Interest received 1,040,455 365,673
Closing Interest Accrual 82,903 213,260
Less Interest Accrued from prior year (213,260) -
Receipt on interest rate caps (see Note 5) 910,098 578,933
The spilt of the interest rate cap is listed below:
2024 2023
£ £
Current assets/(liabilities) - 849,110
Non-current assets/(liabilities) - 559,671
Interest rate cap with a start date of 27 April 2023 maturing on 26 April 2026 - 1,408,781
16. Obligations under Finance Leases
Minimum lease payments Interest Present value of minimum lease payments
2023 2023 2023
£ £ £
Less than one year 52,450 (49,202) 3,248
Between two and five years 209,800 (195,892) 13,908
More than five years 5,140,100 (3,347,135) 1,792,965
Total 5,402,350 (3,592,229) 1,810,121
The above table shows the historic present value of future lease payments in
relation to the ground lease payable at Hagley Road, Birmingham as required
under IFRS 16. Following the disposal of the subsidiaries on 29 November, this
Group is no longer exposed to ground leases. A corresponding asset was
historically recognised and was part of Investment properties as shown in note
7.
17. Lease analysis
The Group had historically granted leases on its property portfolio. As at 31
December 2024, the Company no longer had active leases with tenants.
Future minimum rentals receivable under non-cancellable operating leases as at
31 December are as follows:
2024 2023
£ £
Within one year - 27,137,392
Between one and two years - 22,839,051
Between two and three years - 19,036,836
Between three and four years - 14,949,198
Between four and five years - 12,718,074
More than 5 years - 78,172,826
Total - 174,853,377
As at the year-end, the Company had no tenants – in the prior year, the
largest single tenant at the year-end accounted for 5.7% of the annual passing
rent prevailing at the time.
18. Share capital
Under the Company’s Articles of Incorporation, the Company may issue an
unlimited number of ordinary shares of 1 pence each, subject to issuance
limits set at the AGM each year. As at 31 December 2024 there were 381,218,977
ordinary shares of 1p each in issue (2023: 381,218,977). All ordinary shares
rank equally for dividends and distributions and carry one vote each (as noted
below, these shares no longer carry the right to vote on voluntary winding up
of the Company). There are no restrictions concerning the transfer of ordinary
shares in the Company, no special rights with regard to control attached to
the ordinary shares, no agreements between holders of ordinary shares
regarding their transfer known to the Company and no agreement which the
Company is party to that affects its control following a takeover bid.
Allotted, called up and fully paid: 2022 2023
£ £
Opening balance 228,383,857 228,383,857
Shares issued - -
Closing balance 228,383,857 228,383857
Redeemable Bonus Shares
Following the disposal of the Group's subsidiaries on 29 November 2024, the
Company issued to Shareholders a recommended proposal for adoption of a
Redeemable Bonus Share Scheme to return capital to Shareholders as efficiently
as possible. The proposal noted that each API Shareholder would receive 1
Redeemable Bonus Share for each API Share they held, which would then be
immediately redeemed for a cash payment equal to the redemption price (noted
as 52p). On 17 December 2024, Shareholders voted in favour of this motion
and the redemption and cancellation of these shares occurred on 19 December
2024, with proceeds subsequently being returned to Shareholders on 24 December
2024.
2024 2023
£ £
Opening balance - -
Shares redeemed during the year 198,233,868 -
Closing balance 198,233,868 -
Winding Up Shares
As previously announced, the Board intends that the Company is placed into
voluntary winding up at an appropriate time with the exact timing of being
dependent on a number of factors, which may include progress with the sale of
Far Ralia. Placing the Company into Voluntary Winding Up would normally
require the approval of Shareholders at the General Meeting. However, to
prevent the need for a further General Meeting, and because Guernsey law does
not allow liquidators to be appointed on a conditional basis, a proposal was
put to Shareholders to amend the Company's Articles of Incorporation to allow
for the creation and issue of a new class of share. The intention was for
one such share to be issued at some point in the future to a director of the
Company, with the share given the sole right to vote on the voluntary winding
up of the Company; the proposal noted that the change to the articles would
also remove the right of API ordinary shares to vote at such a meeting.
On 17 December 2024, Shareholders voted in favour of this motion however as at
31 December 2024 such a share has yet been issued.
Treasury Shares
In 2022, the Company undertook a share buyback programme at various levels of
discount to the prevailing NAV. In the period to 31 December 2024 no shares
had been bought back (2023: nil) at a cost of £nil (2023: £nil) and are
included in the Treasury share reserve.
2024 2023
£ £
Opening balance 18,400,876 18,400,876
Bought back during the year - -
Closing balance 18,400,876 18,400,876
The number of shares in issue as at 31 December 2024/2023 are as follows
2024 2023
Number of shares Number of shares
Opening balance 381,218,977 381,218,977
Issue of Redeemable Bonus Share 381,218,977 -
Redemption / cancellation of Redeemable Bonus Shares (381,218,977) -
Closing balance 381,218,977 381,218,977
19. Reserves
The detailed movement of the below reserves for the years to 31 December 2024
and 31 December 2023 can be found in the Consolidated Statement of Changes in
Equity above.
Retained earnings
This is a distributable reserve and represents the cumulative revenue earnings
of the Group less dividends paid to the Company’s
shareholders.
Capital reserves
This reserve represents realised gains and losses on disposed investment
properties and unrealised valuation gains and losses on investment properties
and cash flow hedges since the Company’s launch.
Other distributable reserves
This reserve represents the share premium raised on launch of the Company
which was subsequently converted to a distributable reserve by special
resolution dated 4 December 2003.
20. Earnings per share
Basic earnings per share amounts are calculated by dividing profit/loss for
the year net of tax attributable to ordinary equity holders by the weighted
average number of ordinary shares outstanding during the year. As there are no
dilutive instruments outstanding, basic and diluted earnings per share are
identical.
The earnings per share for the year is set out in the table below.
The following reflects the income and share data used in the basic and diluted
earnings per share computations:
2024 2023
£ £
Loss for the year net of tax (42,894,200) (8,267,901)
2024 2023
Weighted average number of ordinary shares outstanding during the year 381,218,977 381,218,977
Loss per ordinary share (pence) (11.25) (2.17)
Profit for the year excluding capital items (£) 7,011,154 10,824,203
21. Dividends and Property Income Distributions Gross of Income Tax
12 months to Dec 24 12 months to Dec 23
Dividends PID pence Non-PID pence Total Pence PID £ Non-PID £ PID pence Non-PID pence Total Pence PID £ Non-PID £
Quarter to 31 December of prior year (paid in February) 0.3980 0.6020 1.0000 1,517,252 2,294,938 - 1.0000 1.0000 - 3,812,190
Quarter to 31 March (paid in May) 1.0000 - 1.0000 3,812,190 - 1.0000 - 1.0000 3,812,190 -
Quarter to 30 June (paid in August) 0.4500 0.5500 1.0000 1,715,485 2,096,705 1.0000 - 1.0000 3,812,190 -
Quarter to 30 September (paid in November) 0.3000 0.7000 1.0000 1,143,657 2,668,533 - 1.0000 1.0000 - 3,812,190
Total dividends paid 2.1480 1.8520 4.0000 8,188,584 7,060,176 2.0000 2.0000 4.0000 7,624,380 7,624,380
Quarter to 31 December of current year (paid after year end) - - - - - 0.3980 0.6020 1.0000 1,517,252 2,294,938
Distribution on exiting REIT regime (paid after year end) 3.0000 - 3.0000 11,436,569 - - - - - -
Prior year dividends (per above) (0.3980) (0.6020) (1.0000) (1,517,252) (2,294,938) - (1.0000) (1.0000) - (3,812,190)
Total dividends paid for the year 4.7500 1.2500 6.0000 18,107,901 4,765,238 2.3980 1.6020 4.0000 9,141,632 6,107,128
On 10 January 2025 a dividend of 3.0 pence per share was paid as a Property
Income Distribution. This was in respect of the Group leaving the UK REIT
regime and represented an initial payment to ensure 100% of all historic
Property Income was fully distributed; while a member of the UK REIT regime,
the Company was required to distribute at least 90% and this initial payment
was representative of the accumulation of retained Property Income where the
Company distributed between 90 and 100%.
22. Reconciliation of Audited Consolidated NAV to Unaudited Published NAV
The NAV attributable to ordinary shares is published quarterly and is based on
the most recent valuation of the investment
properties.
2024 2023
Number of ordinary shares at the reporting date 381,218,977 381,218,977
2024 2023
£ £
Total equity per audited consolidated financial statements 30,363,831 298,078,443
NAV per share (p) 8.0 78.2
Published NAV per share (p) 8.0 78.4
The variance between the unaudited published NAV and audited consolidated NAV
recorded in 2023 of 0.2p per share represents the recognition of fees
associated with the strategic review and proposed merger, the identification
of a backdated rent review post publication but agreed prior to year-end, and
the recognition of accrued grant income not yet received.
23. Related Party Disclosures
Directors’ remuneration
The Directors of the Company are deemed as key management personnel and
received fees for their services. Total fees for the year were £389,757
(2023: £239,436) none of which remained payable at the year-end (2023: nil).
abrdn Fund Managers Limited, as the Manager of the Group from 10 December
2018, (formerly Aberdeen Standard Fund Managers Limited), received fees for
their services as investment managers. Further details are provided in note 4.
2024 2023
£ £
Mike Balfour 46,000 41,500
Mike Bane 40,000 37,000
James Clifton-Brown 55,000 50,000
Jill May 42,500 37,000
Sarah Slater 40,000 37,000
One-off fee* 110,000 -
Employers’ national insurance contributions 41,746 23,735
375,246 226,235
Directors’ expenses 14,511 13,201
389,757 239,436
* As noted in the Directors’ Remuneration Report in the full Annual
Accounts, each Director received a one-off fee of £20,000 with the Former
Chair receiving £30,000 to partially reflect the additional work performed.
Distributions from Subsidiaries
While part of the Group, the Company received £21.1m by way of distributions
from its immediate wholly owned subsidiary abrdn Property Holdings Limited
(2023: £16.3m).
24. Segmental Information
The Board has considered the requirements of IFRS 8 ‘operating segments’.
The Board is of the view that the Group is engaged in a single segment of
business, being property investment and in one geographical area, the United
Kingdom.
25. Non-Going Concern adjustment for estimated costs of disposal of property
portfolio
As explained in note 2 the Group’s financial statements are no longer
prepared on a going concern basis. The Board have assessed the consequences of
this and the decision made in May 2024 to realise the Group’s portfolio of
assets and return the proceeds to shareholders. The Board concluded that it
was appropriate to accrue for the estimated costs of disposal and reduce the
fair market value of investment property and land by this amount.
Investment Properties Investment Properties Held for Sale Land Total
£ £ £ £
Market Value - - 10,000,000 10,000,000
Assumed average sales costs of 1.25% - - (125,000) (125,000)
Aberdeen disposal fee - - (40,000) (40,000)
Estimated disposal costs - - (165,000) (165,000)
Carrying Value - - 9,835,000 9,835,000
The assumed rate of 1.25% in the table above represents the best estimate of a
reasonable sales cost for Far Ralia. The Aberdeen disposal fee has been
calculated in accordance with the terms of the revised IMA as explained in
note 4a. As part of their consideration of adopting a basis other than that of
a going concern, the Board have also considered the potential impact on
comparatives. As noted below, as at 31st December 2023 5 assets valued at
£35.1m were deemed 'held for sale' which would have been impaired by
£579,150 (0.15p per share) if adopting a similar methodology; at the time,
the remaining portfolio and Land were not held for sale.
Investment Properties Investment Properties Held for Sale Land Total
£ £ £ £
Market Value 395,835,037 35,100,000 8,250,000 439,185,037
Assumed average sales costs of 1.25% (4,947,938) (438,750) (103,125) (5,489,813)
Aberdeen disposal fee (1,583,340) (140,400) (33,000) (1,756,740)
Estimated disposal costs (6,531,278) (579,150) (136,125) (7,246,553)
Carrying Value 389,303,759 34,520,850 8,113,875 431,938,484
As detailed in note 2, the Investment portfolio (which consisted of the
remaining portfolio following the disposal of 6 assets during 2024) was sold
as a single transaction to GoldenTree Asset Management LP for a gross
consideration of £351m. Due to the disposal occurring as a single
transaction, cost savings were achieved, and the resultant disposal fees
(recognised as part of the realised loss) were £5.2m and were accrued at year
end and included within trade and other payables.
26. Commitments and Contingent Liabilities
The Company had no contracted capital commitments as at 31 December 2024 (31
December 2023: £2.4 million).
As discussed in note 4, following the Shareholder vote to place the Group into
a Managed Wind-Down, a new agreement with the Investment Manager was signed
effective 31 May 2024. As part of this agreement, the Investment Manager is
entitled to an Incentive Fee payable following the sale of the final
investment. This fee is only payable if the Gross Disposal Proceeds are
equivalent to not less than 90% (£366,651,000) of the May 2024 Portfolio
Value (£407,390,000) and all assets are disposed of prior to 28 November
2025.
Following the sale of the Group’s subsidiaries on 29th November, the
cumulative Gross Disposal Proceeds (which excludes Far Ralia) was
£364,775,000. As such, if Far Ralia is sold prior to 28 November 2025 the
Gross Disposal Price needs to be in excess of £1,876,000 for the Investment
Manager to be entitled to a fee of 0.05% of the ultimate Gross Disposal
Proceeds – increasing to 0.10% if sold prior to 28 May 2025. However, if
there are delays in the sale of Far Ralia and the interest in the land is not
sold until after the 28 November 2025 date, the Investment Manager would not
receive any additional fee regardless of the value achieved.
Threshold Valuation
£ £
Cumulative Gross Disposal Proceeds (to date) 364,775,000 364,775,000
Theoretical Gross Disposal Proceeds of Far Ralia 1,876,000 10,000,000
Theoretical Gross Disposal Proceeds of May 2024 Portfolio 366,651,000 374,775,000
Incentive Fee Incentive Fee
£ £
Sold after 28 November 2025 (0.00%) - -
Sold prior to 28 November 2025 (0.05%) 183,326 187,388
Sold prior to 28 May 2025 (0.10%) 366,651 374,775
As detailed further in note 4a, the Investment Manager receives a Disposal fee
of 0.4% of the Gross Disposal Price.
Given that the fee is dependent on the timing of the future sale of Far Ralia,
neither the Disposal nor Incentive Fees have been accrued in the results as at
31 December 2024.
27. Events after the balance sheet date
Dividends
On 10 January 2025 a dividend of 3.0 pence per share was paid as a Property
Income Distribution representing the first payment out of the accumulated
undistributed income of the Group’s UK property rental business (“Property
Income”). This accumulated income has arisen because historic PIDs have been
between 90% (as required by REIT rules) and 100% of Property Income. The
amount of the remaining undistributed Property Income is dependent on the
completion of negotiations with GoldenTree and various recoveries from former
tenants.
This Annual Financial Report announcement is not the Company's statutory
accounts for the year ended 31 December 2024. The statutory accounts for the
year ended 31 December 2024 received an audit report which was unqualified.
Please note that past performance is not necessarily a guide to the future and
that the value of investments and the income from them may fall as well as
rise. Investors may not get back the amount they originally invested.
All enquiries to:
The Company Secretary
Northern Trust International Fund Administration Services (Guernsey) Limited
Trafalgar Court
Les Banques
St Peter Port
Guernsey
GY1 3QL
Tel: 01481 745001
Fax: 01481 745051
Jason Baggaley – Real Estate Fund Manager, Aberdeen
Tel: 07801039463 or jason.baggaley@aberdeenplc.com
Mark Blyth – Real Estate Deputy Fund Manager, Aberdeen
Tel: 07703695490 or mark.blyth@aberdeenplc.com
Craig Gregor - Fund Controller, Aberdeen
Tel: 07789676852 or craig.gregor@aberdeenplc.com
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