REG - AEW UK REIT PLC - Half Yearly Report <Origin Href="QuoteRef">AEWU.L</Origin> - Part 2
09/12/2016 07:05
- Part 2: For the preceding part double click ID:nRSI3536Ra
statements.
Although not required by IAS 34, the comparative figures for the preceding
period end and related notes have been included on a voluntary basis.
Notes to the Condensed Consolidated Financial Statements
for the six months ended 31 October 2016
1. Corporate information
AEW UK REIT plc (the 'Company') is a closed ended Real Estate Investment Trust
('REIT') incorporated on 1 April 2015 and domiciled in the UK. AEW UK REIT
2015 Limited is a subsidiary of the Company incorporated in the UK on 2 April
2015. At 31 October 2016, the Company continued holding one share being 100%
of the issued share capital. AEW UK REIT 2015 Limited is wholly owned by the
Company (together known as the 'Group') and is currently dormant.
The comparative information for the period from 1 April 2015 to 30 April 2016
does not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. The auditors reported on these accounts; their report was
unqualified, and did not contain a statement under section 498(25) or (23) or
the Companies Act 2006. However, it did draw attention to an emphasis of
matter due to the need to issue revised accounts for the period 1 April 2015
to 30 April 2016.
2. Accounting policies
2.1 Basis of preparation
These half-yearly condensed consolidated unaudited financial statements have
been prepared in accordance with IAS 34 Interim Financial Reporting, and
should be read in conjunction with the Group's last consolidated financial
statements for the period ended 30 April 2016. These condensed consolidated
unaudited financial statements do not include all information required for a
complete set of IFRS financial statements, however, selected explanatory notes
have been included to explain events and transactions that are significant in
understanding changes in the Group's financial position and performance since
the last financial statements. A review of the interim financial information
has been performed by the Independent Auditor of the Group and was approved
for an issue on 8 December 2016.
The comparative figures disclosed in the condensed consolidated unaudited
financial statements and related notes have been presented for the six month
period to 31 October 2015 as required by IAS 34.However, as the Group did not
trade prior to 1 May 2015, the amounts now presented for the period 1 May 2015
to 31 October 2015 are the same as previously reported for that period except
for earnings per share due to a recalculation of weighted average number of
shares for the period 1 May 2015 to 31 October 2015.
The interim report and financial statements for the period 1 April 2015 to 31
October 2015 represents a seven month period, therefore has not been adopted
as a comparative.
Although not required by IAS 34, the comparative figures as at 31 October 2015
for the Condensed Consolidated Statement of Financial Position and 30 April
2016 for the Condensed Consolidated Statement of Comprehensive Income,
Condensed Consolidated Statement of Changes in Equity and Condensed
Consolidated Statement of Cash Flows and related notes have included on a
voluntary basis.
These consolidated condensed unaudited financial statements have been prepared
under the historical cost convention, except for investment property,
investments and interest rate derivatives that have been measured at fair
value.
The consolidated condensed unaudited financial statements are presented in
Sterling and all values are rounded to the nearest thousand pound (£'000),
except when otherwise indicated.
As the subsidiary AEW UK REIT 2015 Limited is dormant and has no balances
material for consolidation, these consolidated condensed unaudited financial
statements are representative of the accounts of the Group and Company.
New standards, amendments and interpretations
There are a number of new standards and amendments to existing standards which
have been published and are mandatory for the Group's accounting periods
beginning after 1 November 2016 or later periods, but the Group has decided
not to early adopt them. The following are the most relevant to the Group:
· Disclosure Initiative (Amendments to IAS 7) (effective for annual
periods beginning on or after 1 January 2017);
· Recognition of deferred tax assets for unrealised losses (amendments to
IAS 12) (effective for annual periods beginning on or after 1 January 2017);
· IFRS 15 Revenue from Contracts with Customers (effective for annual
periods beginning on or after 1 January 2018);
· IFRS 9 Financial Instruments (effective for annual periods beginning on
or after 1 January 2018);
· Classification and Measurement of Share-based Payment Transactions
(Amendments to IFRS 2) (effective for annual periods beginning on or after 1
January 2018);
· IFRS 16 Leases (effective for annual periods beginning on or after 1
January 2019);
There are no new IFRS or IFRIC interpretations that are not yet effective that
would have a material impact on the Group's financial statements.
2.2 Significant accounting judgements and estimates
The preparation of financial statements in accordance with EU IFRS requires
the Directors of the Group to make judgements, estimates and assumptions that
affect the reported amounts recognised in the financial statements. However,
uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of the asset or
liability in the future.
i) Valuation of investment property
The valuations of the Group's investment property will be at fair value as
determined by the independent valuer on the basis of market value in
accordance with the internationally accepted Royal Institution of Chartered
Surveyors ('RICS') Appraisal and Valuation Standards.
ii) Valuation of investments
Investments in collective investment schemes are stated at fair value with any
resulting gain or loss recognised in profit or loss. Fair value is assessed by
the Directors based on the best available information.
The value of the Company's interest in the AEW Core Fund as at 31 October 2016
has been amended to value the holding in the Core Fund at its 31 October 2016
NAV. The Directors, in consultation with the Company's professional advisers,
have adopted the amended valuation methodology as at 31 October 2016 in order
to provide a better reflection of fair value of the Company's holding in the
Core Fund.
iii) Valuation of interest rate derivatives
In accordance with IAS 39, the Group carries its interest rate derivatives at
fair value. The fair values are estimated by the loan counterparty with
revaluation occurring on a quarterly basis. The counterparties will use a
number of assumptions in determining the fair values including estimations
over future interest rates and therefore future cash flows. The fair value
represents the net present value of the difference between the cash flows
produced by the contracted rate and the valuation rate.
iv) Segmental information
In accordance with IFRS 8, the Group is organised into one main operating
segment. All of the Group's activities are interrelated, and each activity is
dependent on the others. Accordingly, all significant operating decisions are
based upon analysis of the Group as one segment. The financial results from
this segment are equivalent to the financial statements of the Group as a
whole.
2.3 Going concern
The Directors have made an assessment of the Group's ability to continue as a
going concern and are satisfied that the Group has the resources to continue
in business for at least 12 months. Furthermore, the Directors are not aware
of any material uncertainties that may cast significant doubt upon the Group's
ability to continue as a going concern. Therefore, the financial statements
have been prepared on the going concern basis.
2.4 Summary of significant accounting policies
The principle accounting policies applied in the preparation of these
financial statements are consistent with those applied within the Group's
Annual Report and Accounts as at 30 April 2016.
3. Revenue
Period from Period from Period from
1 May 2016 to 1 May 2015 to 1 April 2015 to
31 October 31 October 30 April
2016 2015 2016
(unaudited) (audited) (audited)
£'000 £'000 £'000
Gross rental income received 5,847 1,513 6,153
Surrender premium received - - 1,000
Dilapidation income received 204 19 19
Other property income 3 - 13
Total rental and other income 6,054 1,532 7,185
Dividend income:
Property income distribution* 313 264 629
Dividend distribution 13 10 24
326 274 653
Total Revenue 6,380 1,806 7,838
* Property income distribution ('PID') is received from the investment in the
AEW UK Core Property Fund which holds property directly.
Rent available under the terms of the leases, is adjusted, for the effect of
any incentives agreed.
4. Other operating expenses
Period from Period from Period from
1 May 2016 to 1 April 2015 to 1 April 2015 to
31 October 30 April 30 April
2016 2015 2016
(audited) (audited) (audited)
£'000 £'000 £'000
Investment management fee 526 204 653
Auditor remuneration 48 28 95
Operation costs 266 144 403
Directors' remuneration 34 37 72
Total 874 413 1,223
5. Finance expense
Period from Period from Period from
1 May 2016 to 1 April 2015 to 1 April 2015 to
31 October 30 April 30 April
2016 2016 2016
(audited) (audited) (audited)
£'000 £'000 £'000
Interest payable on loan borrowings 244 - 110
Amortisation of loan arrangement fee 39 9 40
Agency fee payable on loan borrowings 10 - 11
Commitment fee payable on loan borrowings 38 - 51
331 9 212
Change in fair value of interest rate derivatives 70 - 14
Total 401 9 226
6. Taxation
Period from Period from Period from
1 May 2016 to 1 May 2015 to 1 April 2015 to
31 October 31 October 30 April
2016 2016 2016
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Analysis of charge in the period
Profit/(loss) before tax 493 (991) 4,636
Theoretical tax at UK corporation tax standard rate of 20% 98 (198) 927
Adjusted for:
Exempt REIT income (868) (273) (1,119)
UK dividend not taxable (45) - (99)
Non taxable investment losses 815 471 291
Total - - -
7. Earnings per share and NAV per share
Period from Period from Period from
1 May 2016 to 1 May 2015 to 1 April 2015 to
31 October 31 October 30 April
2016 2016 2016
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Net attributable to Ordinary Shareholders
Total comprehensive income/(loss)(£'000) 493 (991) 4,636
Weighted average number of shares* 118,563,367 94,491,848 96,022,424
Basic earnings/(loss) per share (pence) 0.42 (1.05) 4.83
Adjustment to revenue:
Unrealised loss from change in fair value of investment property ('£000) 3,726 2,666 1,935
Realised gain on disposal of investment properties ('£000) (410) - -
Loss/(gain) from change in fair value of investments ('£000) 779 (312) (482)
Change in fair value of interest rate derivatives (70) - (14)
('£000)
EPRA earnings per share (basic and diluted)(pence) 3.81 1.44 6.33
Net assets ('£000) 118,047 97,579 116,375
Ordinary shares in issue 123,647,250 100,500,000 117,510,000
NAV per share (pence) 95.47 97.09 99.03
Other financial assets held at fair value ('£000) (78) - (77)
EPRA NAV per share (pence) 95.41 97.09 98.97
*Based on the weighted average number of Ordinary Shares in issue throughout
the period.
8. Dividends paid
Period from Period from Period from
1 May 2016 to 1 May 2015 to 1 April 2015 to
31 October 31 October 30 April
2016 2016 2016
(audited) (audited) (audited)
£'000 £'000 £'000
Fourth dividend paid in respect of the periodended 30 April 2016 at 2p per Ordinary Share 2,350 - -
First dividend paid in respect of the periodended 31 July 2016 at 2p per Ordinary Share 2,350 - -
First dividend paid in respect of the periodended 31 October 2015 at 1.5p per Ordinary Share - - 1,507
Second dividend paid in respect of the period1 November 2015 to 14 December 2015 at0.75p per Ordinary Share - - 754
Third dividend paid in respect of the period15 December 2015 to 31 January 2016 at1.25p per Ordinary Share - - 1,469
Total dividends paid during the period 4,700 - 3,730
Fourth dividend paid in respect of the periodended 30 April 2016 at 2p per Ordinary Share - - 2,350
Second interim dividend declared for the period1 August 2016 to 31 October 2016 at2p per Ordinary Share 2,473 - -
Total dividends declared during the period 7,173 - 6,080
9. Non-current assets
Period from 1 May 2016 to Period from Period from
31 October 2016 (unaudited) 1 May 2015 1 April 2015
to 31 October to 30 April
Investment Investment 2015 2016
properties properties (unaudited) (audited)
Freehold leasehold Total Total Total
£'000 £'000 £'000 £'000 £'000
UK Investment property
As at beginning of period 89,045 25,295 114,340 - -
Purchases in the period 15,587 - 15,587 72,844 114,408
Disposals in the period (300) - (300) - -
Revaluation of investment property (1,182) (2,560) (3,742) (1,479) (68)
Valuation provided by Knight Frank 103,150 22,735 125,885 71,365 114,340
Adjustment to fair value for rent free debtor (1,716) (88) (1,082)
Adjustment to fair value for rent guarantee debtor (135) (1,099) (785)
Adjustment for finance lease obligations* 1,700 - 1,914
Total Investment property 125,734 70,178 114,387
Change in fair value of investment property
Loss from change in fair value (3,742) (1,479) (68)
Adjustment for movement in the period:
In fair value for rent free debtor (634) (88) (1,082)
In fair value for rent guarantee debtor 650 (1,099) (785)
(3,726) (2,666) (1,935)
* Adjustment in respect of minimum payment under head leases separately
included as a liability within the Statement of Financial Position.
Valuation of investment property
Valuation of investment property is performed by Knight Frank LLP, an
accredited external valuer with recognised and relevant professional
qualifications and recent experience of the location and category of the
investment property being valued.
The valuation of the Group's investment property at fair value is determined
by the external valuer on the basis of market value in accordance with the
internationally accepted RICS Valuation - Professional Standards
(incorporating the International Valuation Standards).
The determination of the fair value of investment property requires the use of
estimates such as future cash flows from assets (such as lettings, tenants'
profiles, future revenue streams, capital values of fixtures and fittings,
plant and machinery, any environmental matters and the overall repair and
condition of the property) and discount rates applicable to those flows.
Period from Period from Period from
1 May 2016 1 May 2015 1 April 2015
to 31 October to 31 October to 30 April
2016 2015 2016
(unaudited) (unaudited) (audited)
Total Total Total
£'000 £'000 £'000
Investment in AEW UK Core Property Fund
As at beginning of period 10,109 - -
Purchases in period - 9,628 9,627
(Loss)/gain from change in fair value (779) 312 482
Total investment in AEW UK Core Property Fund 9,330 9,940 10,109
Valuation of investments
Investments in collective investment schemes are stated at fair value with any
resulting gain or loss recognised in profit or loss. Fair value is assessed by
the Directors based on the best available information.
The value of investments in the AEW Core Fund is based on the latest NAV of
the AEW Core Fund as the Directors consider this to be the best approximation
of fair value.
The following table provides the fair value measurement hierarchy for
non-current assets:
31 October 2016
Significant Significant
Quoted prices in observable unobservable
active markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
£'000 £'000 £'000 £'000
Assets measured at fair value
Investment properties - - 125,734 125,734
Investment in AEW UK Core Property Fund - - 9,330 9,330
- - 135,064 135,064
31 October 2015
Significant Significant
Quoted prices in observable unobservable
active markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
£'000 £'000 £'000 £'000
Assets measured at fair value
Investment properties - - 70,178 70,178
Investment in AEW UK Core Property Fund - - 9,940 9,940
- - 80,118 80,118
30 April 2016
Significant Significant
Quoted prices in observable unobservable
active markets inputs inputs
(Level 1) (Level 2) (Level 3) Total
£'000 £'000 £'000 £'000
Assets measured at fair value
Investment properties - - 114,387 114,387
Investment in AEW UK Core Property Fund - - 10,109 10,109
- - 124,496 124,496
Explanation of the fair value hierarchy:
Level 1 - Quoted prices for an identical instrument in active markets;
Level 2 - Prices of recent transactions for identical instruments and
valuation techniques using observable market data; and
Level 3 - Valuation techniques using non-observable data.
Sensitivity analysis to significant changes in unobservable inputs within
Level 3 of the hierarchy
The Group has considered sensitivity analysis for assets measured at fair
value and recognises the significant unobservable inputs relating to
investment property and investments.
The significant unobservable inputs used in the fair value measurement
categorised within Level 3 of the fair value hierarchy of the entity's
portfolios of investment property are:
1) Estimated Rental Value ('ERV')
2) Equivalent yield
Increases (decreases) in the ERV (per sq ft p.a.) in isolation would result in
a higher (lower) fair value
measurement. Increases (decreases) in the discount rate/yield (and exit or
yield) in isolation would result in a lower (higher) fair value measurement.
The significant unobservable inputs used in the fair value measurement
categorised within Level 3 of the fair value hierarchy of the entity's
investment is:
1) NAV
The Group has updated its accounting policy with regard to the value of
investments in the AEW Core Fund to now be based on NAV which is considered to
be the best approximation of fair value by the Directors.
Increases (decreases) in the NAV would result in a higher (lower) fair value
measurement.
The significant unobservable inputs used in the fair value measurement
categorised within Level 3 of the fair value hierarchy of the portfolio of
investment property and investments are:
Significant
Fair Value Valuation Unobservable
Class £'000 Technique Inputs Range
31 October 2016
Investment Property 125,885 Income capitalisation ERV £2.00 - £160.0
Equivalent / yield 6.99% - 11.03%
Investments 9,330 Market capitalisation NAV £1.1612
31 October 2015
Investment Property 71,365 Income capitalisation ERV £2.50 - £150.0
Equivalent / yield 6.5% - 11.0%
Investments 9,940 Market capitalisation Single swinging price £1.2370
30 April 2016
Investment Property 114,340 Income capitalisation ERV £21.81-£426.24
Equivalent / yield
NAV 6.70%-11.90%
Investments 10,109 Market capitalisation Single swinging price £1.2581
Where possible, sensitivity of the fair values of Level 3 assets are tested to
changes in unobservable inputs to reasonable alternatives.
Gains and losses recorded in profit or loss for recurring fair value
measurements categorised within Level 3 of the fair value hierarchy are
attributable to changes in realised and unrealised gains or losses relating to
investment property and investments held at the end of the reporting period.
With regards to both investment property and investments, gains and losses for
recurring fair value measurements categorised within Level 3 of the fair value
hierarchy, prior to adjustment for rent free debtor and rent guarantee debtor,
are recorded in profit and loss.
The carrying amount of the assets and liabilities, detailed within the
Condensed Consolidated Statement of Financial Position, is considered to be
the same as their fair value.
10. Receivables and prepayments
31 October 31 October 30 April
2016 2015 2016
£'000 £'000 £'000
Receivables
Rent debtor 2,155 314 622
Rent free debtor 1,716 88 1,082
Rent guarantee debtor 135 1,099 785
Dividend receivable 146 215 193
Capital VAT recoverable - 113 -
Rent agent float account 51 - 92
Other receivables 309 - 29
4,512 1,829 2,803
Prepayments
Property related prepayments 57 2 149
Depositary services 7 7 8
Listing fees 3 1 2
Other prepayments 21 - -
88 10 159
Total 4,600 1,839 2,962
11. Interest rate derivatives
31 October 31 October 30 April
2016 2015 2016
£'000 £'000 £'000
At the beginning of the period 77 - -
Interest rate cap premium paid 71 - 91
Changes in fair value of interest rate derivatives (70) - (14)
Total 78 - 77
To mitigate the interest rate risk that arises as a result of entering into
variable rate linked loans, the Group entered into an interest rate CAP during
the period with the combined notional value of £26.51 million and a strike
rate of 2.5% for the relevant period in line with the life of the loan.
The total premium payable in the period towards securing the interest rate
caps was £71,000.
Fair Value hierarchy
The following table provides the fair value measurement hierarchy for interest
rate derivatives:
Assets measured at fair value
Quoted prices Significant Significant
in active observable unobservable
markets input inputs
(Level 1) (Level 2) (Level 3) Total
Valuation date £'000 £'000 £'000 £'000
31 October 2016 - 78 - 78
31 October 2015 - - - -
30 April 2016 - 77 - 77
The fair value of these contracts are recorded in the Consolidated Statement
of Financial Position as at the period end.
There have been no transfers between Level 1 and Level 2 during the period,
nor have there been any transfers between Level 2 and Level 3 during the
period.
The carrying amount of the assets and liabilities, detailed within the
Consolidated Statement of Financial Position, is considered to be the same as
their fair value.
12. Interest bearing loans and borrowings
Bank borrowings drawn
31 October 31 October 30 April
2016 2015 2016
£'000 £'000 £'000
At the beginning of the period 14,250 - -
Bank borrowings drawn in the period 12,260 - 14,250
Interest bearing loans and borrowings 26,510 - 14,250
Less: loan issue costs incurred (388) - (40)
Plus: amortised loan issue costs 79 - 40
At the end of the period 26,201 - 14,250
Repayable between 1 and 2 years - - -
Repayable between 2 and 5 years 26,510 - 14,250
Repayable in over 5 years - - -
Total 26,510 - 14,250
The Group entered into a £40 million credit facility with the RBSI on 20
October 2015, of which £13.49 million remained undrawn as at the period end.
Borrowing costs associated with the credit facility are shown as finance costs
in note 5 to these financial statements.
The term to maturity as at the period end is 4 years.
13. Payables and accrued expenses
31 October 31 October 30 April
2016 2015 2016
£'000 £'000 £'000
Deferred income 3,122 548 1,675
Accruals 526 78 1,008
Other creditors 301 739 276
Total 3,949 1,365 2,959
14. Issued Share Capital
For the period 1 May 2016 to 31 October 2016
Number of
£'000 Ordinary Shares
Ordinary Shares issued and fully paid
At the beginning of the period 1,175 117,510,000
Issued on admission to trading on the London Stock Exchange on 16 September 2016 24 2,450,000
Issued on admission to trading on the London Stock Exchange on 10 October 2016 37 3,687,250
At the end of the period 1,236 123,647,250
For the period 1 May 2015 to 31 October 2015
Number of
£'000 Ordinary Shares
Ordinary Shares issued and fully paid
At the beginning of the period - 1
Issued on admission to trading on the London Stock Exchange on 12 May 2015 1,005 100,499,999
At the end of the period 1,005 100,500,000
For the period 1 April 2015 to 30 April 2016
Number of
£'000 Ordinary Shares
Ordinary Shares issued and fully paid
At the beginning of the period - 1
Issued on admission to trading on the London Stock Exchange on 12 May 2015 1,005 100,499,999
Issued on admission to trading on the London Stock Exchange on 15 December 2015 170 17,010,000
At the end of the period 1,175 117,510,000
On 16 September 2016, the Company issued 2,450,000 Ordinary Shares at a price
of 97 pence per share in the form of a tap issue under authority granted on 7
September at the Annual General Meeting.
On 10 October 2016 the Company issued 3,687,250 Ordinary Shares at a price of
98.25 pence per share in the form of tap issue under authority granted on 7
September at the Annual General Meeting.
15. Share premium account
Period from Period from Period from
1 May 2016 to 1 May 2015 to 1 April 2015 to
31 October 31 October 30 April
2016 2015 2016
£'000 £'000 £'000
The share premium relates to amounts subscribed for share capital in excess of nominal value:
Balance at the beginning of the period 16,729 - -
Issued on admission to trading on the London Stock Exchange on 12 May 2015 - 99,495 99,495
Share issue costs (paid and accrued) - (1,930) (1,930)
Transfer to capital reduction account - (97,565) (97,565)
Issued on admission to trading on the London Stock Exchange on 15 December 2015 - - 17,010
Share issue costs (paid and accrued) (23) - (281)
Issued on admission to trading on the London Stock Exchange on 16 September 2016 2,352 - -
Share issue cost (paid and accrued) (42) - -
Issued on admission to trading on the London Stock Exchange on 10 October 2016 3,586 - -
Share issue cost (paid and accrued) (55) - -
Balance at the end of the period 22,547 - 16,729
16. Transaction with related parties
As defined by IAS 24 Related Party Disclosures, 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.
For the six months ended 31 October 2016, the Directors of the Company are
considered to be the key management personnel.
The Group is party to an Investment Management Agreement with the Investment
Manager, pursuant to which the Company has appointed the Investment Manager to
provide investment management services relating to the respective assets on a
day-to-day basis in accordance with their respective investment objectives and
policies, subject to the overall supervision and direction of the Boards of
Directors.
During the period 1 May 2016 to 31 October 2016, the Company incurred £525,776
(31 October 2015: £203,829; 30 April 2016: £652,706) in respect of investment
management fees and expenses of which £253,769 was outstanding at 31 October
2016 (31 October 2015: £139,724; 30 April 2016: £230,631).
17. Events after reporting date
Dividend
On 15 November 2016, the Board declared its second interim dividend of 2.00
pence per share, in respect of the period from 1 August 2016 to 31 October
2016 as reflected in note 8. This is to be paid on 31 December 2016, to
shareholders on the register as at 25 November 2016. The ex-dividend date was
24 November 2016.
On 15 November 2016, the Board declared that the Company will look to sell
down its holding in the AEW Core Fund and reinvest the proceeds from sale into
direct property holdings.
Property Acquisition
On 25 November 2016 Euroway Trading Estate was purchased for £4.95 million
(net of acquisition costs). This property is a 144,000 sq ft logistics
warehouse in Bradford. This acquisition provides a net initial yield of 8.1%,
a reversionary yield of 8.9% and a capital value per sq ft of £34.
EPRA Unaudited Performance Measures
Detailed below is a summary table showing the EPRA performance measures
MEASURE AND DEFINITION PURPOSE PERFORMANCE
1. EPRA EarningsEarnings from operational activities. A key measure of a company's underlying operating results and an indication of the extent to which current dividend payments are supported by earnings. £4.52 million/3.81 ppsEPRA earnings for the period to31 October 2016 (£6.08 million/6.33 pps for the period to 30 April 2016)
2. EPRA NAVNet asset value adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystallise in a long Makes adjustments to IFRS NAV to provide stakeholders with the most relevant information on the fair value of the assets and liabilities within a true real estate investment company with a long-term investment £117.97 million/95.41 ppsEPRA NAV as at 31 October 2016 (£116.30 million/98.97 pps as at 30 April 2016)
-term investment property business. strategy.
3. EPRA NNNAVEPRA NAV adjusted to include the fair values of:(i) financial instruments;(ii) debt and;(iii) deferred taxes. Makes adjustments to EPRA NAV to provide stakeholders with the most relevant information on the current fair value of all the assets and liabilities within a real estate company. £118.05 million/95.47 pps EPRA NNNAV as at 31 October 2016 (£116.38 million/99.03 pps as at 30 April 2016)
4.1 EPRA Net Initial Yield (NIY)Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, A comparable measure for portfolio valuations. This measure should make it easier for investors to judge themselves, how the valuation of portfolio X compares with portfolio Y. 7.85% EPRA NIY as at 31 October 2016 (8.01% as at 30 April 2016)
divided by the market value of the property, increased with (estimated) purchasers' costs.
4.2 EPRA 'Topped-Up' NIYThis measure incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives A comparable measure for portfolio valuations. This measure should make it easier for investors to judge themselves, how the valuation of portfolio X compares with portfolio Y. 7.85%EPRA 'Topped-Up' NIY as at 31 October 2016 (8.56% as at 30 April 2016)
such as discounted rent periods and step rents).
5. EPRA VacancyEstimated Market Rental Value (ERV) of vacant space divided by ERV of the whole portfolio. A "pure" (%) measure of investment property space that is vacant, based on ERV. 8.7%EPRA ERVas at 31 October 2016 (3.16% as at 30 April 2016)
6. EPRA Cost RatioAdministrative and operating costs (including and excluding costs of direct vacancy) divided by gross rental income. A key measure to enable meaningful measurement of the changes in a company's operating costs. Including direct vacancy costsEPRA Cost Ratio 11.49%as at 31 October 2016 (12.23% as at 30 April 2016) 9.31% EPRA Cost ratio excluding direct vacancy costs as at 31 October 2016 (10.90% as at 30 April 2016)
Calculation of EPRA Net Initial Yield and 'topped-up' Net Initial Yield
31 October
2016
£'000
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