REG-abrdn Property Income Trust Limited: Interim Results for the period ended 30 June 2024
30/09/2024 07:15
Guernsey: 30 September 2024
LEI: 549300HHFBWZRKC7RW84
abrdn Property Income Trust Limited
(“API” or the “Company”)
INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2024
Today the Board of abrdn Property Income Trust (“API” or the
“Company”) confirms the Company’s Interim Results to 30 June 2024. The
results will shortly be available to view on the Company's corporate website
at https://www.abrdnpit.co.uk/en-gb/literature.
PERFORMANCE SUMMARY
Earnings, Dividends & Costs 6 months to 30 June 2024 6 months to 30 June 2023
IFRS (Loss)/gain per share (p) (3.0) 0.8
EPRA earnings per share (p) (excl capital items & derivative movements) * 0.7 1.6
Dividends paid per ordinary share (p) 2.0 2.0
Dividend Cover (%) ** 36.4 80.6
Dividend Cover excluding non-recurring items (%) ** 77.3 80.6
Dividend Yield (%) *** 7.8 8.4
FTSE All-Share Real Estate Investment Trusts Index Yield (%) 5.0 5.1
FTSE All-Share Index Yield (%) 4.0 3.7
Ongoing Charges **
As a % of average net assets including direct property costs 2.3 2.6
As a % of average net assets excluding direct property costs 1.2 1.1
Capital Values & Gearing 30 June 2024 31 December 2023 Change %
Total assets (£million) 416.7 456.1 (8.6)
Net asset value per share (p) 73.3 78.2 (6.2)
Ordinary Share Price (p) 51.6 53.0 (2.6)
(Discount)/Premium to NAV (%) (29.6) (32.2)
Loan-to-value (%) 2 28.7 30.8
Total Return 6 months % return 1 year % return 3 year % return 5 year % return
NAV ^ (4.1) (8.1) (5.4) 0.8
Portfolio 0.4 (0.7) 4.8 12.5
Share Price ^ 1.1 17.2 (10.3) (24.9)
FTSE All-Share Real Estate Investment Trusts Index (2.2) 18.1 (12.8) (3.4)
FTSE All-Share Index 7.4 13.0 23.9 30.9
Property Returns & Statistics (%) 30 June 2024 30 June 2023
Portfolio income return 2.8 2.5
MSCI Benchmark income return 2.4 2.3
Portfolio total return 0.4 1.7
MSCI Benchmark total return 1.8 0.3
Void rate 10.5 8.6
* Calculated as profit for the period before tax (excluding capital items &
derivative movements) divided by weighted average number of shares in issue in
the period. EPRA stands for European Public Real Estate Association.
** As defined and calculated under API’s Alternative Performance Measures
(as detailed in the full Interim Accounts which can be found via the following
link: https://www.abrdnpit.co.uk/en-gb/literature)
*** Based on annual dividend paid of 4.0p and the share price at 30 June 2024
of 51.6p.
^ Assumes re-investment of dividends excluding transaction costs.
Sources: abrdn, MSCI
The above performance summary information excludes the effects of the
transaction with GoldenTree which are explained in the Chairman’s statement.
CHAIR’S STATEMENT
Background
Following the downward trajectory of UK inflation during the second half of
2023, there were expectations at the start of 2024 that we would see a
reasonably swift move towards an interest rate cutting cycle. What
transpired was somewhat different, with inflation lingering doggedly above the
Bank of England target until the end of the second quarter. This uncertainty
impacted investor confidence and manifested itself in a reduced level of
market activity throughout the first six months of the year.
Since then, we have seen a rate cut at the beginning of August and a feeling,
certainly in some sectors of the UK Real Estate market, that investors are
feeling more confident. However, whilst there weren’t any significant
global macroeconomic shocks in the first half of 2024 like those we have
experienced in recent years, the continuing war in Ukraine and the escalation
of tensions in the Middle East could still impact any fragile market recovery.
Corporate Activity
As previously reported in the Company’s 2023 Annual Report & Financial
Statements, the Board undertook a strategic review in the second half of 2023
prompted by concerns about the Company’s size, lack of liquidity in its
shares, the discount to NAV and uncovered dividend. The outcome of this review
was that the Board recommended to shareholders that they vote in favour of a
proposed merger with Custodian REIT for the reasons outlined in various
announcements to shareholders during the first quarter of 2024. However,
this ultimately did not garner enough shareholders of API to vote in favour of
the proposal at the Extraordinary General Meeting.
Following the vote, shareholders of API 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 investment management fees 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.
Since then, alongside the Investment Manager, the Board has explored the most
effective means of disposing of the Company’s assets, with the main aim
being to obtain the best achievable value for the Company’s assets at the
time of their realisation, with a view to repaying borrowings and making
returns of capital to shareholders. As the Board has disclosed before, we have
looked at all potential disposal strategies, including individual property
sales alongside a wider portfolio transaction. Through an independent agent
the whole portfolio was marketed to potential buyers in an extensive and
competitive process. 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 has
agreed a transaction with GoldenTree Asset Management for the sale of the
entire share capital of abrdn property Holdings Limited (APH), the wholly
owned subsidiary of the Company.
The transaction comprises the sale of 39 assets, being the Company’s entire
investment property portfolio, with the exception of its interest in the land
at Far Ralia, which will be retained by the Company for sale at a later date,
subject to certain approvals. The Company’s debt facility with RBSI will be
transferred in full to GoldenTree. The cash consideration for the purchase is
£351m, and the Company will receive net proceeds after adjusting for debt and
other net assets subject to normal adjustments including those arising from
the completion process.
GoldenTree has paid a cash deposit of £35.1m, with the balance of the
consideration being payable in cash on completion which is expected to be 29
November 2024.
The consideration represents a discount of 8.0 per cent. to the Company’s
external valuation of the Portfolio as at 30 June 2024 of £381.6 million,
excluding the assets disposed of between 1 July 2024 and the date of this
announcement, along with the interest in the land at Far Ralia. It also
implies a pro-forma net asset value of the Company as at 30 June 2024 of £244
million, equivalent to 64.0 pence per share, after adjusting for costs of the
transaction
This estimated net asset value per share represents:
* a discount of 12.7 per cent. to the Company's net asset value per share of
73.3 pence as at 30 June 2024;
* a premium of 6.7 per cent. to the Company's share price of 60.0 pence as at
26 September 2024, being the closing share price immediately prior to the date
of the announcement of the disposal; and
* a premium of 20.1 per cent. to the Company's share price of 53.3 pence on 28
May 2024, being the date that shareholders approved the Managed Wind-Down
process.
It is intended that, following completion, returns of capital to shareholders
in cash will be made as swiftly as practically possible by way of a members'
voluntary liquidation. Putting the Company into liquidation will require
shareholder approval.
Such returns will be subject to the net realisation value of Far Ralia, which
the manager is actively marketing, adjustments arising from the completion
process, the operational costs of managing the Company through to liquidation
(including tax effects) and the liquidation costs.
UK Real Estate Market
After four quarters of capital declines through 2023, the MSCI Quarterly Index
reflected an arrest of this trend with a decline of 0.6% in the first quarter
and then 0.0% in quarter two. This resulted in positive Total Returns of
0.6% and 1.2% for the first two quarters of the year respectively.
This recovery masks the persistent polarisation we see between sectors, with
Industrial and Retail providing positive total returns, whilst Offices
continue to lag with further negative capital growth.
In the Industrial sector, the strong dynamics of low supply and reasonable
tenant demand has meant that rental growth is still evident, albeit at more
muted levels than seen previously. Investors continue to be attracted to
this rental growth, and competition amongst buyers is driving a recovery in
capital values.
The positive Retail sector performance has largely been driven by a higher
relative income return and capital growth in the Retail Warehouse
sub-sector. Whilst high street retail continues to struggle with pressures
on household discretionary spend, out-of-town retail continues to benefit from
an increase in demand from discount and food retailers. Vacancy rates have
reduced across the Retail Warehouse sector and this has led to rental growth,
fuelling investor demand.
In contrast, the Office sector continues to grapple with occupier uncertainty
as companies work out a suitable strategy to incorporate hybrid working.
Despite the differing approaches being taken, the result is inevitably going
to be a lower overall demand for office space. Due to this, investors have
been shying away from the sector meaning there has been a dearth of
transactional evidence. Without deal activity for valuers to form their
views, it is believed that the market has fallen further than valuations.
Portfolio and Corporate Performance
The NAV total return for the six months to 30 June 2024 was -4.1%. The real
estate investment portfolio returned 0.4%.
Whilst the share price continued to trade at a significant discount to the NAV
for the first half of 2024, the share price total return at 1.1% has exceeded
both the NAV and the property portfolio performance.
IFRS earnings decreased from 0.8p per share to -3.0p reflecting the
recognition of future transaction costs associated with the Managed Wind-Down
and modest property valuation declines over the first half of 2024. EPRA
earnings per share decreased from 1.6p to 0.7p per share, reflecting higher
debt costs and exceptional items associated with the strategic review and
aborted merger.
Financial Resources and Portfolio Activity
The Company continues to be in a strong financial position with unutilised
financial resources of £44.4m available in the form of its revolving credit
facilities (“RCF”) net of existing cash and financial commitments.
As at the period end the Company had a Loan-to-Value (“LTV”) ratio of
28.7%, which sits within the Board’s target range.
During the first half of the year, the Company completed four property
disposals for a combined £29.75m, reflecting a 0.51% premium to the December
2023 valuations. The proceeds from these sales has been used to reduce the
Company’s exposure to the RCF.
Dividends
The Board has maintained an annualised rate of 4p per share during the first
half of 2024. Dividend cover for the first half of 2024 (excluding
non-recurring costs) was 77.3%, reflecting a decrease from 80.6% in the first
half of 2023 (also excluding non-recurring items). This is largely due to the
increase in finance costs effective from April 2023 which the Company have
been actively looking to mitigate throughout the year.
It is the Boards intention to pay one further 1p dividend before completion of
the sale transaction and the appointment of a liquidator.
Outlook
Having exchanged contracts with GoldenTree and having received a deposit from
them it is highly likely that the sale of the portfolio will take place. It is
hoped that will take place on 29 November 2024.
The land at Far Ralia is the only property asset that is not part of the
portfolio sale. The plan is to transfer this asset up from the subsidiary
company (which is being sold) to abrdn Property Income Trust before the
completion of the disposal of the portfolio. This process depends on getting
certain governmental approvals. The managers and advisers are doing all they
can to obtain this, but it may not be achievable. If it can’t be done before
completion, and to avoid any delay in the sale of the rest of the portolio,
GoldenTree has agreed to hold Far Ralia on behalf of the Company and will
transfer it back once the appropriate permissions have been obtained. In the
meantime, the managers are marketing the land for sale to a third party.
It is likely that a liquidator will be appointed shortly after the completion
of the sale of the portfolio and the proceeds have been received by the
Company. Putting the Company into a members’ voluntary liquidation will
require shareholder approval at an extraordinary general meeting. If the
liquidator is appointed, the Company’s shares will delist from the London
Stock Exchange and the ability to trade in the shares will cease. Shortly
after that the liquidator will distribute the majority of the proceeds of the
portfolio sale to shareholders by way of a capital distribution. The
liquidator will then seek to sell Far Ralia, settle all Company liabilities,
wind-up the Company and distribute the remaining cash balances to
shareholders.
The timing of the final wind-up of the company is highly dependent on when Far
Ralia is sold.
The last two years have been testing for the company and all its stakeholders.
The rapid rise in financing costs, the continued difficulties in the office
market as it adjusted to the post COVID world, the erosion of the yield
advantage property companies had over gilts, the negative sentiment towards
alternative assets and the wide discounts to net asset values in the closed
end fund market all amounted to a very challenging backdrop.
Throughout that period the board have focused solely on what they believed was
in the best interests of shareholders.
The Board, having considered the potential alternatives including the present
value of what could realistically be achieved by an asset-by-asset disposal,
believes that this transaction represents an effective execution of the
Managed Wind-Down process. It provides greater price certainty and a quicker
return of proceeds for shareholders through realising the substantial majority
of the investment portfolio in a single transaction. The Board and the Manager
believe that this is the best achievable outcome for shareholders at this
time.
27 September 2024
James Clifton-Brown
INVESTMENT MANAGER’S REPORT
Market Review
The first half of 2024 was another period of very low transaction volumes in
the real estate market. In the second half of 2023 sentiment improved in the
belief that the rate cutting cycle would start, but over the first half of
2024 this sentiment reversed, with the timing and extent of rate cuts moving
out.
The UK general election did not appear to have a material impact on the UK
market, and it is expected that a combination of greater UK political
stability and the first cut in interest rates since March 2020 will lead to a
pick-up in transaction levels into 2025.
Real Estate Market
We have seen growing signs of stabilisation across most UK real estate sectors
over the first half of 2024 as suggestions of improving economic conditions
take hold. Declines in capital values across the more favoured segments have
slowed, and we expect rental growth to continue to play a central story in
real estate returns. Although we expect further value losses, relative pricing
pressure in favoured segments, such as Industrial and Residential, should
lessen following cuts in interest rates.
UK real estate performance has been largely positive over the first six months
of the year. According to the MSCI Quarterly Index, total returns for all
property were 1.9%, led by the Retail and Industrial sectors at 3.1% and 3.0%,
respectively. Offices were the only negative contributor to the index at
-1.1%, anchored by negative capital value growth. In fact, the only declines
in capital values seen thus far in 2024 were in the Office and Other sectors.
Meanwhile, rental growth remains strong with the Industrial and Residential
sectors especially, seeing 1.5% and 1.4% over the first half of 2024,
respectively.
Transaction volumes over the first half of 2024 remained muted in a historic
context as investors awaited economic and political certainty. Despite this,
volumes were up approximately 8% on the same period last year according to RCA
data. Of these, the living and Industrial sectors saw the largest shares at
21% and 18%, respectively. The hospitality segment was notable in its
strength, seeing over £3bn transact and quickly surpassing the cumulative
total for 2023 of £2.4bn. At the other end of the spectrum, Offices remained
the least popular of the core real estate segments at 16% of total volume as
secondary assets continue to face heightened capex requirements and structural
challenges. Volumes are expected to shape up more favourably in the second
half of the year as the Bank of England settles into a less restrictive
monetary policy path. Additionally, Labour’s success in the general election
has returned a sense of stability to the UK, aiding an improving overseas
investor sentiment.
Industrial
The Industrial and Logistics sector remains in a position of strength for
investors due to its structural drivers. Following the recent trend of
consolidation by occupiers, UK quarterly net absorption has turned negative
for the first time in 12 years over the first half of 2024. According to
CoStar data, seven million square feet of space did not attract interest over
this period, owing to strong deliveries and softening demand. Still, occupiers
generally remain active and robust rental growth looks likely to continue
given an increasing preference for best-in-class warehouses. There is still
some hesitancy between buyers and sellers which has limited transactions over
the start of the year. This gap is due to reduce as stability feeds into the
market and pricing should see some additional support in the near to
medium-term from slowing construction starts.
Retail
Retail fundamentals appear to have held up well considering the prevailing
challenges to the consumer, although rising vacancy levels and shifting retail
sales profiles may cast lingering doubts on certain segments. Discretionary
spending remains subdued, with luxury retailers seeing hits to sales over the
first half of the year. On the other hand, discount retailers and supermarkets
continue their expansion plans, citing consistently strong results. The UK has
experienced unseasonably wet and unpredictable weather, particularly over the
summer months. A combination of the cold, wet weather and continued cost of
living pressures has had a noticeable impact on UK retail sales. However, with
consumer confidence on the rise, this could translate into increased retail
sales given real wage growth and an improving economic outlook.
Office
The Office sector continues to struggle as changing workplace habits have
accelerated secondary assets towards obsolescence. While values for
best-in-class assets are faring better, given strong rental growth prospects
and favourable supply/demand dynamics, regional and sub-prime assets are
expected to see greater value slippage because of environmental, social and
governance issues and amenity-rich buildings remain front-and-centre. This is
reflected across Central London office fundamentals, according to CoStar data;
as the vacancy rate nudges 10%, net take-up for prime London assets has
remained positive over recent quarters, while over 10 million square feet of
secondary space has returned to the market over the past four years. There has
also been a recent uptick in prime office transactions around the £100
million mark, particularly concentrated in more favourable submarkets like
London’s West End, suggesting a level of liquidity is starting to return
despite elevated financing costs. Despite a more polarised outlook between the
best and the rest, we still expect further capital declines to work their way
through the whole sector as it struggles to find its place in investor’s
portfolios.
Investment Outlook
UK real estate seems to be pointing in a more positive direction than this
time last year. More economic and political certainty has filtered into the
market, resulting in marginally improving capital values. We have seen
investors remain cautious in the first half of 2024. This is expected to
become more positive as the rate-cutting cycle progresses and as real estate
returns look more attractive on a risk-adjusted basis.
From a risk perspective, the change in government doesn’t seem to have had
much of an impact on investor intentions. The living sector may be under more
scrutiny given potential policy changes, but the probability of any radical
shifts from Labour is low. A greater level of uncertainty comes from the
BoE’s actions on rates. We expect a reduction in the base rate to 4.50% by
the end of 2024, though worries surrounding services inflation and wage growth
persist.
Still, given our current assumptions, we expect UK real estate to perform well
over the forecast period, although bifurcation within sectors will remain a
factor. We expect the Industrial and Living sectors to outperform all
property, particularly over the next year. In a notable shift over recent
months, Offices are now projected to stay in positive territory, owing to
strong rental growth, but largely focused on best-in-class and flexible office
space. In fact, rental growth will remain a central growth story across real
estate sectors, especially given the low levels of construction projected over
the medium term. Although construction prices have moderated from their peaks,
restrictive financing costs will make development difficult in the near term.
Performance
During the reporting period the Company changed its Investment Strategy, which
was to dispose of all assets and wind up the Company, returning capital to
shareholders. This change affects measures of performance, as the portfolio
was no longer being managed in the same way as it would if focused on medium
term performance as was previously the case.
NAV Return:
NAV total return is a measure of the performance of the property portfolio,
the impact of debt and managing the corporate entity and provides shareholders
with information on how the Company itself has performed. In the first half of
2024 the NAV of the Company was impacted by the costs incurred in the
strategic review and subsequent corporate activity, and a change in accounting
policy.
NAV Total Returns to 30 June 2024
Source AIC, abrdn 1 year % 3 years % 5 years % 10 years %
abrdn Property Income Trust Limited (8.1) (5.4) 0.8 73.0
AIC Property UK Commercial (weighted average) (5.5) (2.0) 5.7 59.7
Investment Association Open Ended Commercial Property Funds sector 1.5 (2.3) (2.3) 18.8
NAV Bridge (p per share)
December 2023 NAV 78.2
Other Reserves 0.1
Net Income before dividend 1.5
Quarterly dividend paid (2.0)
Accrued sales costs (Managed Wind-Down) (1.8)
Exceptional Corporate Activity (0.8)
Gross Valuation Movement (1.1)
Capital Expenditure (0.7)
Loss on Sale (0.1)
June 2024 NAV 73.3
Share Price:
The share price total return (assuming dividends reinvested) is the return
measure most aligned to the experience of the shareholder but is the one that
the Investment Manager has the least influence over. The table below
compares the API share price return to that of the FTSE all share REIT index
and AIC Property UK Commercial (weighted average) segment.
Share Price Total Returns to 30 June 2024
Source AIC, abrdn 1 year % 3 years % 5 years % 10 years %
abrdn Property Income Trust Limited 17.2 (10.3) (24.9) 21.3
FTSE All-Share Index 13.0 23.9 30.9 77.8
FTSE All-Share REIT Index 18.1 (12.8) (3.4) 20.2
AIC Property Direct – UK Sector (weighted Average) 7.1 (10.4) (7.8) 18.2
Dividends
The Company has continued to pay a dividend of 1p per quarter. Excluding the
costs incurred with the various corporate activities (non-recurring costs) the
dividend was 77.3% covered by net income. Including costs associated with the
corporate activity the dividend cover was 36.4%. The Board has confirmed it
will pay one further dividend of 1p before the exchange of contracts for the
sale of the property portfolio. After the sale distributions to shareholders
are likely to be capital in nature.
Portfolio Valuation
The investment portfolio is valued on a quarterly basis by Knight Frank LLP
who are appointed by the Board as Independent Valuers. The valuations are
undertaken under the provisions of the RICS Red Book. As at 30 June 2024 the
Company owned 42 assets with a total value of £405.5m and held £7m cash. (46
assets, £439.2m and £6.7m cash as at 30 December 2023).
Environmental Social and Governance (ESG)
ESG is covered in detail in our annual report and accounts. It is fully
integrated into the Investment Manger’s investment process, however with the
change of Investment Strategy the focus is on ensuring ESG supports sales of
the assets, rather than taking a longer-term outlook on carbon reduction and
asset enhancement. The Company no longer subscribes to GRESB.
No further investment will be made in new ESG projects unless approved by the
Board or already committed.
Land at Far Ralia
Significant progress has been made with the planting regime, and as at 30 June
2024, 4 of the 5 designated planting areas are complete, and the final
planting is expected to take place before year end. The registration of
pending carbon credits and grant funding is well progressed. The Company will
not undertake the Peatland restoration given the change in Investment
Strategy. Marketing of the asset has commenced.
Asset Management
Three new leases were agreed during the first half of the year, securing an
annual rent of £0.25m per annum. While we received good interest in the two
largest voids (logistics units in Swadlingcote and Knowsley) we have not yet
been able to agree terms on these. Three lease renewals were agreed securing
an increase of £0.5m per annum and two rent reviews were settled with an
average uplift of 6.9%
Sales:
Four assets have been sold in the first half of 2024 with a total sales price
of £29.8m.
▸London, 15 Basinghall Street (Office) – sold in the first quarter for
£9.8m.
▸Warrington, Opus 9 (Industrial) – sold in the first quarter for £6.8m.
▸Hebburn, Unit 4 Monkton Business Park (Industrial) – sold in the second
quarter for £5.3m to the tenant.
▸Bristol, Kings Business Park (Industrial) – sold in the second quarter
for £7.9m.
Two further assets have exchanged following 30th June 2024 as follows:
▸Dover, Bastion Point (Industrial) - sold for £9.5m
▸Manchester, 101 Princess Street (Office) – sold for £4.3m
Debt
The Company has two debt facilities from the Royal Bank of Scotland
International (RBSI). The first is a fully drawn term loan of £85m priced at
a margin of 150 bps over Sonia. This is subject to an interest rate cap of
3.96%. The second facility is a Revolving Credit Facility (RCF) of £80m,
which is also priced at a margin of 150 bps over Sonia.
Both facilities mature in April 2026. As at 30 June 2024 the Company had
£38.9m drawn under the RCF and the Loan to Value ratio (LTV) was 28.7%.
There is no prepayment fee associated with the term loan.
Outlook and Future Strategy
As managers we will work with the Board and their advisers to enable the sale
of the property portfolio to GoldenTree as quickly as possible. The sale of
Far Ralia also remains a focus. Once the portfolio sale has taken place and
the liquidator has been appointed it is likely we will continue to assist as
the Company is wound up and the final cash payment is made to shareholders.
PROPERTY INVETMENTS
Top Ten Properties
Property Value (range) Sector % of total portfolio
Halesowen, B&Q £22m - £24m Retail 5.6%
Rotherham, Ickles Way £20m - £22m Industrial 5.2%
Birmingham, 54 Hagley Road £18m - £20m Office 4.7%
Welwyn Garden City, Morrison’s £18m - £20m Retail 4.5%
Shellingford, White Horse Business Park £16m - £18m Industrial 3.8%
Swadlincote, Tetron 141 £14m - £16m Industrial 3.7%
London, Hollywood Green £12m - £14m Other 3.4%
Washington, Rainhill Road £12m - £14m Industrial 3.4%
Corby, 3 Earlstrees Road £12m - £14m Industrial 3.3%
St Helens, Stadium Way £12m - £14m Industrial 3.1%
Top Ten Tenants
Tenant Passing Rent % of total contracted rent
Public Sector £2,022,243 7.6%
B&Q Plc £1,560,000 5.9%
WM Morrisons Supermarkets Ltd £1,252,162 4.7%
The Symphony Group Plc £1,225,000 4.6%
Schlumberger Oilfield UK Plc £1,138,402 4.3%
Timbmet Limited £904,768 3.4%
Atos IT Services Limited £872,466 3.3%
CEVA Logistics Limited £840,000 3.2%
Thyssenkrupp Materials (UK) Ltd £643,565 2.4%
Hermes Parcelnet Ltd £591,500 2.2%
Portfolio Allocation by region
Region Weighting
South East 24.2%
West Midlands 19.9%
North West 15.1%
East Midlands 14.4%
North East 11.8%
Scotland 11.2%
London West End 1.8%
South West 1.6%
PRINCIPAL RISKS AND UNCERTAINTIES
The Company’s assets consist of direct investments in UK commercial
property. Its principal risks are therefore related to the commercial property
market in general, but also the particular circumstances of the properties in
which it is invested, and their tenants. The main risks to the Company
currently are those associated with the future of the Company as detailed
below. The Board and Investment Manager seek to mitigate risks through a
strong initial due diligence process, continual review of the portfolio and
active asset management initiatives. All of the properties in the portfolio
are insured, providing protection against risks to the properties and also
protection in case of injury to third parties in relation to the properties.
The Board has carried out an assessment of the risk profile of the Company
which concluded that the risks as at 30 June 2024, were not materially
different from those detailed in the statutory accounts for the Company for
the year ended 31 December 2023, other than the specific risks associated with
the sale of the property portfolio and Far Ralia and the return of capital to
shareholders.
Having reviewed the principal risks, the Directors believe that the Company
has adequate resources to continue in operational existence throughout the
portfolio sale and liquidation process. Given there existed a clear
indication to place the group into liquidation at a point in the future, the
financial statements to 30th June 2024 have been prepared on a basis other
than going concern (please see Note 1 for further information).
Future of the Company
On the 28 May 2024, API shareholders voted in favour of implementing a Managed
Wind-Down. As detailed more fully in the statutory accounts, the Board were
conscious that there were several risks associated with the size, speed and
method of capital distributions back to shareholders, and the maintenance of
REIT status for tax purposes. Several options were considered to mitigate
these risks. Further explanations are included in the circular sent to
shareholders dated 14 May 2024 in advance of the Shareholders meeting.
The proposed sale of abrdn Property Holdings Limited, the subsidiary that
holds the property portfolio, to GoldenTree is subject to a Sale and Purchase
Agreement signed on 26 September 2024. As part of that agreement GoldenTree
have paid a non-refundable deposit to the company. The purchaser has also
carried out extensive due diligence on the Company and its properties. Despite
that, risks remain that the terms of the Sale and Purchase agreement are not
met.
An additional risk is the transfer of Far Ralia from abrdn Property Holdings
Limited to the Company, as it requires governmental approval. The timing of
when this can be achieved is uncertain. The value obtained from the sale of
Far Ralia when the Company can sell it is a further uncertainty.
Once the sale to GoldenTree has completed, the Board will seek shareholder
approval to appoint a liquidator and put the company into liquidation.
STATEMENT OF DIRECTOR’S RESPONSIBILITIES CONDENSED
The Directors are responsible for preparing the Interim Report in accordance
with the applicable law and regulations. The Directors confirm that to the
best of their knowledge:
▸The Unaudited Condensed Consolidated Financial Statements have been
prepared in accordance with IAS 34; and;
▸ The Interim Report includes a fair review of the information required by
4.2.7R and 4.2.8R of the Financial Conduct Authority’s Disclosure Guidance
and Transparency Rules; and
▸ In accordance with 4.2.9R of the Financial Conduct Authority’s
Disclosure Guidance and Transparency Rules, it is confirmed that this
publication has not been audited or reviewed by the Company’s auditors.
The Interim Report, for the six months ended 30 June 2024, comprises an
Interim Report in the form of the Chair’s Statement, the Investment
Manager’s Report, the Directors’ Responsibility Statement and Unaudited
Consolidated Condensed Financial Statements. The Directors each confirm to the
best of their knowledge that:
▸ the Unaudited Condensed Consolidated Financial Statements are prepared in
accordance with IFRSs as adopted by the European Union, and give a true and
fair view of the assets, liabilities, financial position and profit or loss of
the Group; and
▸ the Interim Report 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 faced.
For and on behalf of the Directors of abrdn Property Income Trust Limited.
Approved by the Board on
27 September 2024
James Clifton-Brown
Chair
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 30 June 2024
01 Jan 24 01 Jan 23 01 Jan 23
to 30 Jun 24 To 30 Jun 23 to 31 Dec 23
Notes £ £ £
Rental income 13,518,687 13,158,202 27,552,279
Service charge income 3 2,867,089 2,634,895 4,884,357
Service charge expenditure 3 (3,372,243) (3,548,933) (6,354,598)
Net Rental Income 13,013,533 12,244,164 26,082,038
Administrative and other expenses
Investment management fee 3 (1,080,365) (1,319,824) (2,632,225)
Other direct property operating expenses 3 (1,030,686) (1,356,485) (2,408,461)
Net Impairment gain/(loss) on trade receivables 3 88,255 (62,325) 213,048
Fees associated with strategic review and aborted merger 3 (3,009,280) - (1,729,925)
Other administration expenses 3 (709,857) (544,932) (1,136,742)
Total administrative and other expenses (5,741,933) (3,283,566) (7,694,305)
Operating profit before changes in fair value of investment properties 7,271,600 8,960,598 18,387,733
Valuation loss from investment properties 4 (8,292,948) (2,796,932) (17,989,531)
Valuation gain/(loss) from land 6 1,334,755 (475,619) (783,683)
Estimated costs arising from future disposal 13 (6,690,173) - -
Loss on disposal of investment properties 4 (453,768) (5,465) (279,090)
Operating (loss)/profit (6,830,534) 5,682,582 (664,571)
Finance income 52,081 51,405 92,178
Finance costs (4,548,455) (2,870,136) (7,695,508)
(Loss)/gain for the period before taxation (11,326,908) 2,863,851 (8,267,901)
Taxation
Tax charge - - -
(Loss)/gain for the period, net of tax (11,326,908) 2,863,851 (8,267,901)
Other comprehensive income/(loss)
Movement in fair value on swap - (902,534) (902,534)
Movement in fair value on interest rate cap 356,278 1,837,334 (789,918)
Total other comprehensive income/(loss) 356,278 934,800 (1,692,452)
Total comprehensive (loss)/gain for the period, net of tax (10,970,630) 3,798,651 (9,960,353)
(Loss)/earnings per share
Basic and diluted (loss)/earnings per share 7 (3.0) 0.8 (2.2)
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.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
30 Jun 24 30 Jun 23 31 Dec 23
Assets Notes £ £ £
Non-current assets
Investment properties 4 - 431,171,992 388,338,754
Lease incentives 4 - 8,162,006 9,306,403
Land 6 - 7,500,000 8,250,000
Interest rate cap 11 - 2,900,969 559,671
Rental deposits held on behalf of tenants - 703,209 895,003
- 450,438,176 407,349,831
Current Assets
Investment properties 4, 5 342,733,133 - -
Investment properties held for sale 4, 5, 13 39,757,987 - 35,100,000
Land 6 9,835,000 - -
Trade and other receivables 15,572,608 5,737,177 6,101,152
Cash and cash equivalents 7,485,037 9,958,675 6,653,838
Interest rate cap 11 1,350,870 1,406,290 849,110
416,734,635 17,102,142 48,704,100
Total assets 416,734,635 467,540,318 456,053,931
Liabilities
Current liabilities
Trade and other payables 11,358,974 11,320,946 14,018,455
Bank borrowings 12 123,410,970 - -
Obligation under finance leases 2,481,258 - -
137,251,202 11,320,946 14,018,455
Non-current liabilities
Bank borrowings 12 - 134,242,626 141,251,910
Obligations under finance leases - 1,811,711 1,810,120
Rental deposits due to tenants - 703,209 895,003
- 136,757,546 143,957,033
Total liabilities 137,251,202 148,078,492 157,975,488
Net assets 279,483,433 319,461,826 298,078,443
Equity
Capital and reserves attributable to Company’s equity holders
Share capital 9 228,383,857 228,383,857 228,383,857
Treasury share reserve 9 (18,400,876) (18,400,876) (18,400,876)
Retained Earnings - 2,899,511 -
Capital reserves (23,406,434) 8,740,962 (9,660,578)
Other distributable reserves 92,906,886 97,838,372 97,756,040
Total equity 279,483,433 319,461,826 298,078,443
2024 (p) 2023 (p) 2023 (p)
NAV per share 73.3 83.8 78.2
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the period
ended 30 June 204
Notes Share Treasury Retained Capital Other Distributable Reserves Total
Capital Shares Earnings Reserves £ Equity
£ £ £ £ £
Opening balance 1 January 2024 228,383,857 (18,400,876) - (9,660,578) 97,756,040 298,078,443
Loss for the period - - (11,326,908) - - (11,326,908)
Other comprehensive income - - - 356,278 - 356,278
Total comprehensive loss for the period - - (11,326,908) 356,278 - (10,970,630)
Dividends paid 10 - - (7,624,380) - - (7,624,380)
Valuation loss from investment properties 4 - - 8,292,948 (8,292,948) - -
Valuation gain from land 6 - - (1,334,755) 1,334,755 - -
Estimated costs arising from future disposal 13 - - 6,690,173 (6,690,173) - -
Loss on disposal of investment properties 4 - - 453,768 (453,768) - -
Transfer from Other distributable reserves - - 4,849,154 - (4,849,154) -
Balance at 30 June 2024 228,383,857 (18,400,876) - (23,406,434) 92,906,886 279,483,433
Opening balance 1 January 2023 228,383,857 (18,400,876) 4,382,024 11,084,178 97,838,372 323,287,555
Profit for the period - - 2,863,851 - - 2,863,851
Other comprehensive income - - - 934,800 - 934,800
Total comprehensive gain for the year - - 2,863,851 934,800 - 3,798,651
Dividends paid 10 - - (7,624,380) - - (7,624,380)
Valuation loss from investment properties 4 - - 2,796,932 (2,796,932) - -
Valuation loss from land 6 - - 475,619 (475,619) - -
Loss on disposal of investment properties 4 - - 5,465 (5,465) - -
Balance at 30 June 2023 228,383,857 (18,400,876) 2,899,511 8,740,962 97,838,372 319,461,826
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 10 - - (15,248,759) - - (15,248,759)
Valuation loss from investment properties 4 - - 17,989,531 (17,989,531) - -
Valuation loss from land 6 - - 783,683 (783,683) - -
Loss on disposal of investment properties 4 - - 279,090 (279,090) - -
Transfer from Other distributable reserves - - 82,332 - (82,332) -
Balance at 31 December 2023 228,383,857 (18,400,876) - (9,660,578) 97,756,040 298,078,443
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
For the period ended 30 June 2024
01 Jan 24 01 Jan 23 01 Jan 23
to 30 Jun 24 to 30 Jun 23 to 31 Dec 23
Cash flows from operating activities Notes £ £ £
Loss for the year before taxation (11,326,908) 2,863,851 (8,267,901)
Movement in lease incentives (53,108) 195,030 (984,446)
Movement in trade and other receivables 353,512 1,768,479 1,212,710
Movement in trade and other payables (3,249,221) (50,187) 2,353,098
Finance costs 4,548,455 2,870,136 7,695,508
Finance income (52,081) (51,405) (92,178)
Valuation loss from investment properties 4 8,292,948 2,796,932 17,989,531
Valuation (gain)/loss from land 6 (1,334,755) 475,619 783,683
Estimated costs arising from future disposal 13 6,690,173 - -
Loss on disposal of investment properties 4 453,768 5,465 279,090
Net cash inflow from operating activities 4,322,783 10,873,920 20,969,095
Cash flows from investing activities
Finance income 52,081 51,405 92,178
Purchase of investment properties 4 - (23,984,360) (23,986,401)
Additions to land 6 (415,245) (475,619) (1,533,683)
Capital expenditure on investment properties 4 (2,369,803) (7,854,889) (21,678,721)
Net proceeds from disposal of investment properties 4 29,146,232 (5,465) 6,120,910
Net cash inflow/(outflow) from investing activities 26,413,265 (32,268,928) (40,985,717)
Cash flows from financing activities
Borrowing on RCF 12 10,300,000 50,000,000 63,000,000
Repayment of RCF 12 (28,274,379) - (6,125,621)
Repayment of expired facility 12 - (110,000,000) (110,000,000)
New term facility 12 - 85,000,000 85,000,000
Interest paid on bank borrowing (4,816,402) (3,098,005) (7,396,815)
Receipts on Interest rate SWAP - 1,254,217 1,254,217
Receipts on Interest rate Cap 544,080 - 365,674
Finance lease interest (33,768) (49,202)) (49,289)
Dividends paid to the Company’s shareholders 10 (7,624,380) (7,624,380) (15,248,759)
Net cash (outflow)/ inflow from financing activities (29,904,849) 15,482,630 10,799,407
Net increase/(decrease) in cash and cash equivalents 831,199 (5,912,378) (9,217,215)
Cash and cash equivalents at beginning of period 6,653,838 15,871,053 15,871,053
Cash and cash equivalents at end of period 7,485,037 9,958,675 6,653,838
Notes TO the consolidated financial statements
1. Accounting policies
Basis of preparation
The Unaudited Consolidated Financial Statements have been prepared in
accordance with International Financial Reporting Standard (“IFRS”) IAS 34
‘Interim Financial Reporting’ and, except as described below, the
accounting policies set out in the statutory accounts of the Group for the
year ended 31 December 2023. The condensed Unaudited Consolidated Financial
Statements do not include all of the information required for a complete set
of IFRS financial statements and should be read in conjunction with the
Consolidated Financial Statements of the Group for the year ended 31 December
2023, which were prepared under full IFRS requirements.
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 have been
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.
The timeline for the disposal of the property portfolio depends on the
completion of the sale and purchase agreement with GoldenTree, and the
authority to transfer Far Ralia from a subsidiary to the top company. The
target completion day for the sale of the subsidiary is 29 November 2024. The
transfer of and subsequent sale of Far Ralia is likely to take longer and
possibly 12-24 months. At an appropriate point in the sale process, API will
seek shareholder approval to appoint a liquidator to wind up the ultimate
parent entity and to cancel the ultimate parent entity’s admission to
trading on the Main Market of the London Stock Exchange. Trading in API Shares
will no longer be possible from that time.
At the date of approval of the 2023 Annual Report & Financial Statements of
API, the outcome of the vote at the wind-down EGM was not known and could not
be ascertained. As such, the consolidated financial statements were prepared
on a going concern basis with material uncertainty.
The Boards of Directors of API have undertaken an assessment and are satisfied
that all entities within the Group will have no difficulty in meeting their
liabilities as they fall due during the forthcoming sale process. In
particular, the relevant Boards are satisfied that the requirements of the
Group’s lender can be met. However, there now exists a clear intention to
enter liquidation at some point after the completion of the sale and purchase
agreement with GoldenTree. 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 going concern.
There is no general dispensation from the measurement, recognition and
disclosure requirements if the entity is not expected to continue as a going
concern. The Company proposes to use the ‘normal’ recognition and
measurement requirements as the starting point for accounting and only apply
different methods where adequate justification exists, for example arising
from events after the reporting date. As the Group and its subsidiaries are
currently not in the process of being liquidated nor will they be liquidated
until shareholders approve the appointment of a liquidator it has not been
deemed appropriate to prepare these accounts on a ‘break-up basis’. As
such, the financial statements have been prepared on a basis other than that
of a going concern.
Adjustments to going concern basis of accounting
In addition to assessing the Company’s significant 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 and Financial Instruments 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 Investment Properties and have decided to reduce fair value
by the estimated cost of disposal. Further details can be found in note 13.
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 30 June 2024 have been classified as current assets. Non-current
assets and liabilities that met the criteria to be classified as held for sale
subsequent to 30 June 2024 as a result of the sale and purchase agreement with
GoldenTree 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 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.
1. Related Party Disclosure
Parties are considered to be related if one party has the ability to control
the other party or exercise significant influence over the other party in
making financial or operational decisions.
Directors’ remuneration
The Directors of the Company are deemed as key management personnel and
received fees for their services. Total fees for the period ended 30 June 2024
were £256,081 (period ended 30 June 2023: £114,057) none of which remained
payable at the end of June.
Investment manager
abrdn Fund Managers Limited (formerly known as Aberdeen Standard Fund Managers
Limited), as the Manager of the Group from 10 December 2018, received fees for
their services as Investment Managers. Further details are provided in note 3.
3. Administrative and Other Expenses
6 months to 6 months to Year to
30 Jun 24 30 Jun 23 31 Dec 23
Notes £ £ £
Investment management fees 3a 1,080,365 1,319,824 2,632,225
Other direct property expenses
Vacant Costs (excluding void service charge) 449,622 693,261 1,217,722
Repairs and maintenance 164,039 255,958 418,360
Letting fees 211,037 200,102 405,684
Other costs 205,988 207,164 366,695
Total Other direct property expenses 1,030,686 1,356,485 2,408,461
Net Impairment gain on trade receivables * (88,255) 62,325 (213,048)
Fees associated with strategic review and aborted merger 3b 3,009,280 - 1,729,925
Other administration expenses
Directors’ fees and subsistence 2 256,081 114,057 239,436
Valuer’s fees 35,248 37,615 75,524
Auditor’s fees 76,450 65,640 192,700
Marketing 76,425 112,402 222,893
Other administration costs 265,653 215,218 406,189
Total Other administration expenses 709,857 544,932 1,136,742
Total Administrative and other expenses 5,741,933 3,283,566 7,694,305
* In the prior period, impairment gains/(losses) on trade receivables (Jun
2023: loss of £52,273) were disclosed separately to amounts written-off in
the period (Jun 2023: £10,052). The disclosure has been simplified in the
current period.
6 months to 6 months to Year to
30 Jun 24 30 Jun 23 31 Dec 23
£ £ £
Total service charge billed to tenants 2,714,494 2,593,408 4,731,793
Service charge due from tenants 152,595 41,487 152,564
Service charge income 2,867,089 2,634,895 4,884,357
Total service charge expenditure incurred 2,867,089 2,634,895 4,884,357
Service charge incurred in respect of void units 505,154 914,038 1,470,241
Service charge expenditure 3,372,243 3,548,933 6,354,598
3a. 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 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 further 0.40% payable based on the Gross
Disposal proceeds of the underlying portfolio – the latter payable near
conclusion of the Managed Wind-Down. The total fees incurred for the period
ended 30 June 2024 amounted to £1,080,365 (period ended 30 June 2023:
£1,319,824). The amount due and payable at the year-end amounted to £462,977
(period ended 30 June 2023: £1,319,824). As detailed in note 13,
£1,621,860 has been recognised as an impairment to the Investment Properties
and Land in relation to the anticipated 0.40% disposal fee based on the
current market valuations.
3b. Fees associated with strategic review and aborted merger
As described in more detail in note 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). These fees did not include any costs associated
with the subsequent approach from Urban Logistics or proposed Managed and
Orderly Wind-Down following the EGM on 27 March 2024 (see note 13). Since
the end of 2023, further fees and costs of £3,009,280 have been recognised in
the first half of 2024.
4. Investment Properties
UK UK UK UK
Industrial Office Retail Other Total
30 Jun 2024 30 Jun 2024 30 Jun 2024 30 Jun 2024 30 Jun 2024
£ £ £ £ £
Market value at 1 January 250,070,037 72,575,000 72,390,000 35,900,000 430,935,037
Purchases - - - - -
Capital expenditure 2,363,118 (247,299) 254,369 (385) 2,369,803
Opening market value of disposals (19,750,000) (9,850,000) - - (29,600,000)
Valuation loss (596,732) (5,008,133) (3,400,395) 712,312 (8,292,948)
Movement in lease incentives 38,577 80,432 (53,974) (11,927) 53,108
Market value at 30 June 232,125,000 57,550,000 69,190,000 36,600,000 395,465,000
Investment property recognised as held for sale (36,025,000) (4,400,000) - - (40,425,000)
Market value net of held for sale at 30 June 196,100,000 53,150,000 69,190,000 36,600,000 355,040,000
Right of use asset recognised on leasehold properties - 2,481,258 - - 2,481,258
Adjustment for lease incentives (5,760,982) (1,829,289) (792,259) (547,435) (8,929,965)
Estimated costs arising from future disposal (3,235,650) (876,975) (1,141,635) (603,900) (5,858,160)
Carrying value at 30 June 187,103,368 52,924,994 67,256,106 35,448,665 342,733,133
The valuations were 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. The market value provided by Knight Frank at the
year-end was £395,465,000 (30 June 2023: £437,522,288) however an adjustment
has been made for lease incentives of £8,929,965 (30 June 2023: £8,162,007)
that are already accounted for as an asset. In addition, as required under
IFRS 16, a right of use asset of £2,481,258 (30 June 2023: £1,811,711) has
been recognised in respect of the present value of future ground rents and an
amount of £2,481,258 (30 June 2023: £1,811,711) has also been recognised as
an obligation under finance leases in the balance sheet.
In the condensed unaudited cash flow statement, loss from disposal of
investment properties arises as follows:
30 Jun 24 30 Jun 23 31 Dec 23
£ £
Opening market value of disposals 29,600,000 - 6,400,000
Loss on disposal (453,768) (5,465) (279,090)
Net proceeds from disposal of investment properties 29,146,232 (5,465) 6,120,910
Valuation Methodology
The fair value of completed investment properties are 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 have reflected the current rent (the gross rent) payable to lease
expiry, at which point the valuer has assumed that each unit will be re-let at
their opinion of ERV. The valuers have made allowances for voids where
appropriate, as well as deducting non recoverable costs where applicable. The
appropriate yield is selected on the basis of the location of the building,
its quality, tenant credit quality and lease terms amongst other factors.
There have been no changes to the valuation techniques applied to any
property. At the Balance Sheet date the income capitalisation method is
considered to be appropriate for valuing all assets.
The Company appoints suitable valuers (such appointment is reviewed on a
periodic basis) to undertake a valuation of all the direct real estate
investments on a quarterly basis. The valuation is undertaken in accordance
with the current RICS guidelines and requirements as mentioned earlier.
The Investment Manager meets with the valuers on a quarterly basis to ensure
the valuers are aware of all relevant information for the valuation and any
change in the investment over the quarter. The Investment Manager then reviews
and discusses the draft valuations with the valuers to ensure correct factual
assumptions are made.
The management group that determines the Company’s valuation policies and
procedures for property valuations is the Property Valuation Committee. The
Committee reviews the quarterly property valuation reports produced by the
valuers (or such other person as may from time to time provide such property
valuation services to the Company) before its submission to the Board,
focusing in particular on:
• significant adjustments from the previous property valuation report;
• reviewing the individual valuations of each property;
• compliance with applicable standards and guidelines including those
issued by RICS and the FCA Listing Rules;
• reviewing the findings and any recommendations or statements made by the
valuer;
• considering any further matters relating to the valuation of the
properties.
The Chair of the Committee makes a brief report of the findings and
recommendations of the Committee to the Board after each Committee meeting.
The minutes of the Committee meetings are circulated to the Board. The Chair
submits an annual report to the Board summarising the Committee’s activities
during the year and the related significant results and findings.
The table over leaf 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 over leaf are
categorised Level 3 and all are valued using the Income Capitalisation method.
Country & Class 30 Jun 2024 UK Industrial Level 3 UK Office Level 3 UK Retail Level 3 UK Other Level 3
Fair Value £ 232,125,000 57,550,000 69,190,000 36,600,000
Key Unobservable Input 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 0.00% to 9.61% (5.11%) 5.68% to 10.98% (8.62%) 6.41% to 9.73% (7.28%) 5.39% to 8.06% (6.38%)
(weighted average)
5.20% to 8.99% (6.76%) 8.12% to 14.29% (11.76%) 5.76% to 7.81% (6.56%) 5.79% to 8.37% (6.41%)
5.56% to 8.50% (6.63%) 7.50% to 11.53% (9.82%) 6.01% to 10.42% (7.36%) 5.59% to 8.71% (6.64%)
£4.85 to £10.50 (£7.11) £15.79 to £40.71 (£24.06) £8.74 to £32.54 (£16.83) £6.50 to £20.00 (£14.37)
Country & Class 31 Dec 2023 UK Industrial Level 3 UK Office Level 3 UK Retail Level 3 UK Other Level 3
Fair Value 250,070,037 72,575,000 72,390,000 35,900,000
Key Unobservable Input 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 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%)
(weighted average)
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.
30 Jun 24 30 Jun 23 31 Dec 23
ERV p.a. 32,550,144 33,858,142 £34,189,042
Area sq.ft. 3,341,499 3,585,128 3,503,840
Average ERV per sq.ft. £9.74 £9.44 £9.76
Initial yield 6.0% 5.7% 5.8%
Reversionary yield 7.5% 7.2% 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.
30 Jun 24 30 Jun 23 31 Dec 23
£ £ £
Increase in equivalent yield of 50 bps (26,544,103) (33,598,162) (31,373,168)
Decrease in rental rates of 5% (ERV) (14,521,858) (16,650,621) (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)
5. Investment Properties Held for Sale
As at 30 June 2024, the Group was actively seeking a buyer for its Office
asset in Manchester, its Industrial asset at Knowsley and one of its
Industrial assets at Swadlincote. Furthermore, the Group had received an
offer for its Industrial asset in Dover. Consistent with the other
investment properties, an impairment loss of £667,013 has been recognised to
write down the Investment Properties Held for Sale to their projected net
realisable value. Further details are provided in note 13. The Group
exchanged contracts on the sale of Dover on 22 August 2024 for a price of
£9.5m, and completed on the sale of Manchester on 20 September 2024 for a
price of £4.3m.
As at 31 December 2023, the Group was actively seeking a buyer for several
assets including its Industrial assets Opus 9 in Warrington, Unit 5 Monkton
Business Park in Hebburn and Kings Business Park in Bristol. In addition, the
Group was actively seeking a buyer of its Office asset 15 Basinghall Street in
London, and 101 Princess Street in Manchester. The Group exchanged contracts
on the sale of Opus 9 on 7 March 2024 for a price of £6.75m, 15 Basinghall
Street on 22 March 2024 for a price of £9.8m, Unit 5 Monkton Business Park on
8 April 2024 for a price of £5.3m and Kings Business Park on 15 April 2024
for a price of £7.9m.
6. Land
6 months 6 months Year
to 30 Jun 24 to 30 Jun 23 to 31 Dec 23
£ £ £
Cost
Balance at the beginning of the year 9,595,555 8,061,872 8,061,872
Additions 1,053,052 475,619 2,154,160
Government Grant Income receivable (637,807) - (620,477)
Balance at the end of the year 10,010,800 8,537,491 9,595,555
Changes in fair value
Balance at the beginning of the year (1,345,555) (561,872) (561,872)
Valuation gain/(loss) from land 1,334,755 (475,619) (783,683)
Balance at the end of the year (1,037,491) (1,345,555)
Land Impairment for projected sales costs (see note 13) (165,000) - -
Carrying amount as at 31 December 9,835,000 7,500,000 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. The valuation is
undertaken in accordance with the current RICS guidelines by Knight Frank LLP
whose credentials are set out in note 4.
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 30 June 2024, no grant income has yet been received
however £637,807 has been recognised in accordance with the Group’s policy
for grant recognition in 2024 (to date, £1,258,284 has been recognised in
total).
As noted in more detail in note 1, the current condensed unaudited Interim
Report & Accounts are not prepared on a going concern basis with the carrying
value reduced by estimated costs of disposal of £165,000 has been recognised
to write down the Land to its projected net realisable value. Further details
are provided in note 13.
7. Earnings per share
Basic earnings per share amounts are calculated by dividing profit 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.
Earnings for the period to 30 June 2024 should not be taken as a guide to the
results for the year to 31 December 2024.
6 months to 6 months to Year to
30 Jun 24 30 Jun 23 31 Dec 23
£ £
Loss for the year net of tax (11,326,908) 2,863,851 (8,267,901)
Weighted average number of ordinary shares outstanding during the year 381,218,977 381,218,977 381,218,977
Loss per ordinary share (pence) (3.0) 0.8 (2.2)
Profit for the year excluding capital items (£) 2,775,226 6,141,867 10,784,403
EPRA earnings per share (pence) 0.7 1.6 2.83
8. Investments in Limited Partnership and Subsidiaries
The Company owns 100 per cent of the issued ordinary share capital of abrdn
Property Holdings Limited (formerly known as Standard Life Investments
Property Holdings Limited), a company with limited liability incorporated and
domiciled in Guernsey, Channel Islands, whose principal business is property
investment. A list of all entities within the group (excluding the Income
Trust itself) are as follows:
* abrdn Property Holdings Limited (formerly known as Standard Life Investments
Property Holdings Limited), a property investment company with limited
liability incorporated in Guernsey, Channel Islands.
* abrdn (APIT) Limited Partnership (formerly known as Standard Life
Investments (SLIPIT) 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.
9. 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 30 June 2024 there were 381,218,977
ordinary shares of 1p each in issue (31 December 2023: 381,218,977). All
ordinary shares rank equally for dividends and distributions and carry one
vote each. 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: 30 Jun 24 31 Dec 23 30 Jun 23
£ £
Opening balance 228,383,857 228,383,857 228,383,857
Shares issued - - -
Closing balance 228,383,857 228,383,857 228,383857
Treasury Shares
30 Jun 24 31 Dec 23 30 Jun 23
£ £ £
Opening balance 18,400,876 18,400,876 18,400,876
Bought back during the year - - -
Closing balance 18,400,876 18,400,876 18,400,876
The number of shares in issue on 30 Jun 2024 and 2023 are as follows
30 Jun 24 31 Dec 23 30 Jun 23
Number of shares Number of shares Number of shares
Opening balance 381,218,977 381,218,977 381,218,977
Bought back during the year and put into Treasury - - -
Closing balance 381,218,977 381,218,977 381,218,977
10. Dividends and Property Income Distributions Gross of Income Tax
Dividends 6 months to Jun 2024 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
Quarter to 31 March (paid in May) 1.0000 - 1.0000 3,812,190 -
Total dividends paid 1.3980 0.6020 2.0000 5,329,442 2,294,938
Quarter to 30 June (paid in August) - - - - -
Quarter to 30 September (paid in November) - - - - -
Total dividends paid 1.3980 0.6020 2.0000 5,329,442 2,294,938
Quarter to 30 June of current period (paid after period end) 0.4500 0.5500 1.0000 1,715,485 2,096,705
Prior year dividends (per above) (0.3980) (0.6020) (1.0000) (1,517,252) (2,294,938)
Total dividends paid 1.4500 0.5500 2.0000 5,527,675 2,096,705
A property income dividend of 1.00p per share was declared on 8 August 2024 in
respect of the quarter to 30 June 2024 – a total payment of £3,812,190.
This was paid on 30 August 2024.
Dividends 12 months to Dec 23 PID pence Non-PID pence Total Pence PID £ Non-PID £
Quarter to 31 December of prior year (paid in February) - 1.0000 1.0000 - 3,812,190
Quarter to 31 March (paid in May) 1.0000 - 1.0000 3,812,190 -
Total dividends paid 1.0000 1.0000 2.0000 3,812,190 3,812,190
Quarter to 30 June (paid in August) 1.0000 - 1.0000 3,812,190 -
Quarter to 30 September (paid in November) - 1.0000 1.0000 - 3,812,190
Total dividends paid 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
Prior period dividends (per above) - (1.0000) (1.0000) - (3,812,190)
Total dividends paid 2.3980 1.6020 4.0000 9,141,632 6,107,128
11. Financial Instruments
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
30 Jun 24 31 Dec 23 30 Jun 24 31 Dec 23
Financial Assets £ £ £ £
Cash and cash equivalents 7,485,037 6,653,838 7,485,037 6,653,838
Trade and other receivables 6,047,438 6,101,152 6,047,438 6,101,152
Financial liabilities
Bank borrowings 123,410,970 141,251,910 125,352,272 144,957,576
Trade and other payables 3,534,544 8,217,588 3,534,544 8,217,588
In addition to the above, the Group's financial instruments also include an
Interest rate cap. This has not been included in the disclosure above as it
is 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 is estimated by discounting future cash
flows using rates currently available for debt on similar terms and remaining
maturities. The fair value approximates their carrying values gross of
unamortised transaction costs. This is considered as being valued at level 2
of the fair value hierarchy and has not changed level since 31 December 2023.
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 30 June 2024 Level 1 Level 2 Level 3 Total fair value
Financial assets
Trade and other receivables - 6,047,438 - 6,047,438
Cash and cash equivalents 7,485,037 - - 7,485,037
Interest rate cap - 1,350,869 - 1,350,869
Rental deposits held on behalf of tenants 595,205 - - 595,205
Right of use asset - 2,481,258 - 2,481,258
8,080,242 9,879,565 - 17,959,807
Financial liabilities
Trade and other payables - 3,534,544 - 3,534,544
Bank borrowings - 125,352,272 - 125,352,272
Obligation under finance leases - 2,481,258 - 2,481,258
Rental deposits held on behalf of tenants 595,205 - - 595,205
595,205 131,368,074 - 131,963,279
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
12. Bank borrowings
30 Jun 24 £ 30 Jun 23 £ 31 Dec 23 £
Loan facility (including Rolling Credit Facility) 165,000,000 165,000,000 165,000,000
Drawn down outstanding balance 123,900,000 135,000,000 141,874,379
On 12 October 2022 the Group entered into an agreement to extend its existing
£165 million debt facility with Royal Bank of Scotland International
(“RBSI”). The previous facility (which expired on 27 April 2023) consisted
of a £110 million term loan payable at 1.375% plus SONIA and two Revolving
Credit Facilities (“RCF”) of £35 million payable at 1.45% plus SONIA and
£20 million payable at 1.60% plus SONIA. The amended and restated agreement
is for a three-year term loan of £85 million and a single RCF of £80
million; both payable at 1.5% plus SONIA. As at 30 June 2024, £38.9m of the
RCF was drawn.
30 Jun 24 £ 30 Jun 23 £ 31 Dec 23 £
Opening carrying value of expired facility as at 1 January - 109,928,234 109,928,234
Borrowings during the period on expired RCF - 25,000,000 25,000,000
Repayment of expired RCF - (25,000,000 (25,000,000
Repayment of expired facility - (110,000,000) (110,000,000)
Amortisation of arrangement costs - 71,766 71,766
Closing carrying value of expired facility - - -
Opening carrying value of new facility as at 1 January 141,251,910 (804,297) (804,297)
Borrowings during the period on new RCF 10,300,000 50,000,000 63,000,000
Repayment of new RCF (28,274,379) - (6,125,621)
New term loan facility - 85,000,000 85,000,000
Amortisation of arrangement costs 133,439 46,923 181,828
Closing carrying value 123,410,970 134,242,626 141,251,910
Opening carrying value of facilities combined as at 1 January 141,251,910 109,123,937 109,123,937
Closing carrying value of facilities combined 123,410,970 134,242,626 141,251,910
Under the terms of the loan facilities there are certain events which would
entitle RBSI to terminate the loan facility and demand repayment of all sums
due. Included in these events of default is the financial undertaking relating
to the LTV percentage. The loan agreement notes that the LTV percentage is
calculated as the loan amount less the amount of any sterling cash deposited
within the security of RBSI divided by the gross secured property value, and
that this percentage should not exceed 60% for the period to and including 27
April 2021 and should not exceed 55% after 27 April 2021 to maturity. There
have been no changes to the covenant requirements as a result of the extension
to the facility noted above.
The Board, with the assistance of the Investment Manager, have undertaken a
review of any potential breaches of borrowing covenants that may occur during
the sale process. While no breaches are expected to occur, the expected
disposal to GoldenTree includes the Group’s borrowing facilities and the
directors therefore consider it appropriate to reclassify borrowings as
current liabilities. There are no penalties for early repayment.
13. Commitments and Contingent Liabilities
As explained in note 1 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 proceeds to shareholders. As the disposal decision had been
made before 30 June 2024, the Board have concluded that it is 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 355,040,000 40,425,000 10,000,000 405,465,000
Assumed average sales costs of 1.25% (4,438,000) (505,313) (125,000) (5,068,313)
abrdn disposal fee (1,420,160) (161,700) (40,000) (1,621,860)
Estimated disposal costs (5,858,160) (667,013) (165,000) (6,690,173)
Carrying Value 349,181,840 39,757,987 9,835,000 398,774,827
The assumed rate of 1.25% in the table above represents the best estimate of a
reasonable average for the sales costs across the portfolio – taking into
consideration that such costs could vary between asset to asset depending on
level of complexity. The abrdn disposal fee has been calculated in
accordance with the terms of the revised IMA as explained in note 3a.
14. Events after the balance sheet date
Portfolio Sale
Following the shareholder vote on the 28 May 2024 to change the Group’s
Investment Policy, the Board alongside the Investment Manager, explored the
most effective means of disposing of the Company’s assets, with the main aim
being to obtain the best achievable value for the Company’s assets at the
time of their realisation, with a view to repaying borrowings and making
returns of capital to shareholders. The Board looked at all potential disposal
strategies, including individual property sales alongside a wider portfolio
transaction. Through an independent agent the whole portfolio was marketed
to potential buyers in an extensive and competitive process. Following
consideration of these proposals, and net present value of what might be
achieved by way of individual property sales over a longer period with the
associated risks, the Board selected a preferred bidder. They agreed terms
with GoldenTree Asset Management for the sale of the entire share capital of
abrdn property Holdings Limited, the wholly owned subsidiary of the Company
which holds the investment properties, excluding the land at Far Ralia.
Completion is expected on 29 November 2024.
As the heads of terms with GoldenTree were signed after 30 June and other
methods of disposal were being considered at that date, the Board considers
that this is a non-adjusting post balance sheet event. The significant terms
of the transaction and the effect on the Net Asset Value are described in the
Chairman’s statement.
Dividends
On 30 August 2024 a dividend in respect of the quarter to 30 June 2024 of 1.0
pence per share was paid split as 0.450p Property Income Distribution, and
0.550p Non-Property Income Distribution.
Sales
On 22 August 2024, the Company completed on the sale of its Industrial asset
Bastion Point, Dover for a headline price of £9.48m.
On 20 September 2024, the Company completed on the sale of its Office asset
Manchester, 101 Princess Street for a headline price of £4.3m.
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.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014. Upon the publication of this announcement via Regulatory
Information Service this inside information is now considered to be in the
public domain.
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, abrdn
Tel: 07801039463 or jason.baggaley@abrdn.com
Mark Blyth – Real Estate Deputy Fund Manager, abrdn
Tel: 07703695490 or mark.blyth@abrdn.com
Craig Gregor - Fund Controller, abrdn
Tel: 07789676852 or craig.gregor@abrdn.com
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