THREADNEEDLEPROPERTY UNIT TRUST
COLUMBIATHREADNEEDLE.COM
ANNUAL REPORT AND FINANCIAL STATEMENTS THREADNEEDLE PROPERTY UNIT TRUST FOR THE YEAR ENDED 31 MARCH 2017
Threadneedle Property Unit TrustManaged by Threadneedle Investments
(Channel Islands) Limited
Threadneedle Investments (Channel Islands) LimitedLiberté House
19-23 La Motte StreetSt Helier JerseyJE2 4SY
Telephone: Company Secretary on 01534 709109Dealing on 01534 709140
Threadneedle Property Unit Trust
Fund Report
Notice of Meeting 1
Statement of the Chairman of the Boardof the Manager 2
Investment Advisor’s Report 3
Transactions and Key Events 8
Property Portfolio
Offices 11
Retail 18
Industrial 27
Retail Warehouses 34
Car Showrooms 37
Leisure 37
Bristol Portfolio 38
Financial Statements
Statement of the Manager’s Responsibilities 41
Statement of the Trustees’ Responsibilities 41
Report of the Trustees 41
Manager’s Report 42
Independent Auditors’ Report 43
Statement of Comprehensive Income 44
Statement of Change in Net Assets Attributableto Unitholders 44
Balance Sheet 45
Statement of Cash Flows 46
Notes to the Financial Statements 47
Additional Information
Additional Information (unaudited) 56
About the Trust (unaudited) 60
Management and Administration 64
Important Information 65
Contents
Notice is hereby given that the Fiftieth Annual General Meeting
of Unitholders of Threadneedle Property Unit Trust will be held
at BNP Paribas Securities Services S.C.A., Jersey Branch,
Liberté House, 19-23 La Motte Street, St Helier, Jersey JE2 4SY at
12.00pm on 27 July 2017 for the following purposes:
n To receive the Report of the Manager and the Auditors and the
Financial Statements for the year ended 31 March 2017;
n To reappoint PricewaterhouseCoopers CI LLP as Auditors; and
n To authorise the Manager to fix the remuneration of the
Auditors.
By order of the Manager:
BNP Paribas Securities Services S.C.A., Jersey Branch
Company Secretary
14 June 2017
A Unitholder entitled to attend and vote at the meeting may
appoint a Proxy to attend and vote in his place and a Unitholder
being a corporation may authorise any person to be its
representative at the meeting. A form of Proxy is enclosed.
To be effective, the form must be deposited at the offices of
Threadneedle Investments (Channel Islands) Limited, Liberté
House, 19-23 La Motte Street, St Helier, Jersey JE2 4SY, marked
for the attention of the Company Secretary, not later than
48 hours before the time appointed for holding the meeting.
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Threadneedle Property Unit Trust
Notice of Meeting
Looking at 2016 from a domestic perspective, I believe the result
of the UK’s referendum on EU membership was, without doubt,
the dominant story and potential force for change during the
year. The UK’s decision to leave the EU was contrary to the
expectations of polls, politicians and commentators alike and
now represents a major unknown and source of uncertainty for
the UK economy generally. The full ramifications of this decision
and the resultant landscape for international trade will take a
considerable period to become clear.
As described in detail in the Investment Advisor’s report that
follows, the UK commercial property market was briefly the
focus of the greatest concern immediately post referendum as
daily dealing, retail property funds were subjected to
unprecedented redemptions. It is important to stress, particularly
in the context of this report, that the more numerous institutional
funds, of which TPUT is of course one, were unaffected,
benefitting from the protection of lengthy periods for the pricing
and payment of redemptions as standard protocol.
The above Brexit impact together with a rather more predictable
cyclical cooling, combined to generate relatively modest
commercial property market total returns in 2016 of 3.8% (MSCI
UK Monthly Index). However, it is encouraging to observe that
2017 has, thus far, been characterised by healthy dynamics in
occupational markets and ongoing investor enthusiasm for
commercial property.The very pessimistic predictions emanating
from many market commentators for the immediate aftermath of
a ‘leave’ scenario have proven incorrect. The very fact of Brexit
has not destabilised the UK commercial property market
although its eventual realities remain unclear.
For you as investors in Threadneedle Property Unit Trust, I am
pleased to report an element of outperformance by the Trust over
its benchmark during both calendar year 2016 and the
twelve months to end March 2017. The Trust’s superior
distribution yield together with some beneficial strategic
portfolio positions, most notably in the industrial sector, have
both contributed to this outperformance. A strong asset
management contribution and some opportunistic sales have
also delivered significant performance enhancement.
In an investment landscape starved of income and with equity
markets hitting new highs over recent months the UK
commercial property market offers strong ongoing appeal to
investors. The commercial property outlook for the coming year,
being more income dominated than over the past six years, does
I believe, play to the strength of the Trusts approach, founded
upon high income generation and active asset management.
Prudent cash management and pronounced portfolio
diversification represent further important controls and
disciplines in terms of ongoing risk mitigation.
Key Performance IndicatorsThe Manager considers the following to be the Trust’s Financial
Key Performance Indicators:
n The growth of the Trust’s NAV price; and
n Investment income.
The Manager believes that no Non-Financial Key Performance
Indicators are applicable to the Trust’s activities.
Material Changes DisclosureThe Manager confirms that there have been no material changes
to the Trust’s Prospectus, including the following terms:
n Liquidity of underlying assets or the Trust’s Liquidity
Management Policy
n Special arrangements in relation to the Investor redemptions
protocol
n The Trust’s Unit Valuation Policy
The full AIFMD remuneration disclosure can be read on page 60.
RJS Prosser BSc FCA
Chairman of the Board of the Manager
14 June 2017
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Threadneedle Property Unit Trust
Statement of the Chairman of the Board of the Manager
Financial Highlights and Performance
31 March 2017 31 March 2016
Net Asset Value of Trust £1,360.7m £1,312.2m
Gearing 0.0% 0.0%
Offer Price* £298.97 £303.13
Pre-Tax Annual Distribution
Accrued Per Unit as per Financial Statements £13.38 £14.30
Yield on Year’s Opening Offer Price 4.4% 5.1%
Yield on Year’s Closing NAV Price 4.7% 5.0%
Year to Year toAnnual Total Returns 31 March 31 December
2017 2016
Trust 3.8% 3.1%
AREF/IPD UK QPPFI** 3.7% 2.8%
* Offer Prices calculated as at 31 March 2017 and 31 March 2016respectively** As measured by AREF/IPD UK Quarterly Property Fund Index (All Balanced Property Fund Index) Based on NAV to NAV (“the AREF/IPDBenchmark”)
During the twelve months to 31 March 2017 (“the period”) the
Trust’s offer price declined marginally from £303.13 to £298.97, a
decrease of 1.4%. During this period, the Trust’s average pre-tax
distributions accrued per unit totalled £13.38 representing a
distribution yield of 4.4% based upon the 31 March 2016 Offer Price.
Total investment returns to unit holders during the twelve months
to 31 December 2016 were 3.1%, ahead of the AREF/IPD
Benchmark total return of 2.8%. Total Returns over the twelve
months to end March 2017 were 3.8% also ahead of the AREF/IPD
Benchmark. As at 31 March 2017 the Trust’s capital cash holdings
stood at £64m equivalent to 4.8% of net asset value compared to
6.4% at the start of the period. As at 31 March 2017 the Trust’s
property portfolio comprising of 228 properties was independently
valued at £1,253.3 million (excluding lease incentives)
(£1,210.6 million as at 31 March 2016).
Property Market Commentary From a UK perspective, the past twelve months has undeniably
been dominated by the result of the EU referendum and the
subsequent triggering of the process by which the UK will exit
the EU. With the benefit afforded by the months that have
elapsed since 23 June 2016, it is fair to observe that the impact
of the referendum result has not, as yet, had the dire economic
consequences that were widely predicted. Indeed the UK
economy generated presentable GDP growth of 1.8% during
2016. This GDP out-turn was actually weighted towards the latter
part of the year, quarter four 2016 growth being revised upwards
to an impressive 0.7%. Encouragingly, the International
Monetary Fund has also recently upgraded its 2017 economic
growth forecast for the UK, up to 2.0% from 1.5% three months
earlier and now ahead of the UK’s main economic rivals. Recent
figures show UK employment at its lowest level for more than a
decade, at 4.7%.
The Investment Advisor observes that the UK commercial
property market has weathered the impact of the referendum
result rather better than anticipated by many within the sector.
However, it should not be forgotten that immediately post the
referendum result it was the commercial property sector that was
briefly the focus of the greatest concern in terms of market impact
and potential contagion. With the perception of heightened
downside risks, retail investors in the few property funds offering
daily liquidity, rushed to withdraw their money ahead of
anticipated valuation falls. These retail property funds offering
daily liquidity were confronted with unprecedented redemption
volumes and were forced to seek rapid asset disposals. Pricing
duly fell with the MSCI UK Monthly Index recording a capital
value decline of -4.0% in the four months immediately following
the referendum result. However, redemption appetite within
these funds could not be satisfied and they were all forced to
suspend trading in order to rebuild liquidity margins in an
orderly fashion.
As the weeks elapsed this selling activity by retail funds acted to
evidence the depth of demand amongst a wide spectrum of other
investors for UK commercial property. Assets were duly sold
under increasingly competitive bidding and by November 2016
most such retail funds were successfully reopened and stable.
This market wobble, very specifically focused on a particular fund
structure, had passed. It should be stressed, particularly in the
context of this report, that this experience was confined to retail
funds sold to private investors and offering daily liquidity. The
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Threadneedle Property Unit Trust
Investment Advisor’s Report
London EC4
8 Lloyds Avenue
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Threadneedle Property Unit Trust
more numerous institutional funds, of which The Trust is
obviously one, were unaffected, benefitting from the protection of
lengthy periods for the pricing and payment of redemptions as
standard protocol.
Coming in to the first quarter of 2017, the UK commercial property
market is generally active and in good health. Investors are being
drawn to the sector’s high relative income return particularly
when compared to the ultra-low yields on UK gilts. International
investors are exploiting what they evidently perceive as a
favourable currency environment. Lending margin remains
appealingly low. Investment pricing has been rising over the
past six months in all the main sectors of the UK commercial
property market.
In keeping with the UK’s overriding economic performance,
commercial occupiers are active and willing to commit to
expansionary strategies. There have been a number of recent
and welcome high profile international commitments to the
UK including those by Nissan, Google, Apple, Tata Steel
and Facebook. Rental values have been rising over the
past six months in all the main sectors.
Taking a more in depth look at the UK commercial property
market over the specific period under review, the table below
provides detailed performance attribution for the market over the
twelve months to end March 2017. During this period the UK
commercial property market generated a positive total return of
3.8% significantly down on the comparable figure of 11.7% over
the preceding year. This decline was partly a logical, cyclical effect
foreseen in this report last year and partly a product of the
immediate, post referendum impact described above. The income
return of 5.6% was the dominant positive component of total
returns, bolstered by meaningful rental value growth of 1.6%.
A softening in investment yields contributed a negative impact
of -2.8% as the market net initial yield moved out from 5.0% to
5.3% (unless stated otherwise all statistics in this section are
taken from the MSCI UK Monthly Index).
UK Property market Performance –12 Months to end March 2017
AllRetail Office Industrial Property
Total Return 2.3% 1.4% 9.4% 3.8%
Income Return 6.1% 4.8% 5.9% 5.6%
Capital Growth -3.6% -3.2% 3.3% -1.7%
Rental Value Growth 0.6% 1.2% 3.9% 1.6%
Yield Impact -3.7% -4.2% 0.3% -2.8%
Source: MSCI UK Monthly Index March 2017.
At the sector level the most striking feature over the period has
been the pronounced outperformance of the industrial sector
with its total return of 9.4%. This impressive performance has
been centred upon strong underlying fundamentals generating
rental value growth of 3.9%, combined with the resultant
enthusiasm amongst investors to acquire industrial assets.
Growing demand for warehousing and logistical accommodation
right across the unit size spectrum is a logical product of the
growth in online retailing. A further contributory factor here has
been rising construction costs in the industrial sector, creating
headroom between prevailing rental values and the economic
rent at which fresh development can be supported.
The office sector has been comprehensively knocked off its
previous position as top performing sector, with a total return of
1.4%, below that of both the industrial and retail sectors. If there
is a single market where sentiment has been most negatively
affected by Brexit it is the central London office market. Central
London office markets had already reached new cyclical highs in
terms of rents and capital values and are the most dependent
upon international players from both an investment and
occupational perspective. These markets appear to have the most
to lose from Brexit, particularly one that restricts access to the
EU’s financial service markets. Office Landlords in central London
are extremely keen to secure tenants and affective rental values
are already under downward pressure with considerable new
development supply coming on stream.
Total returns for the retail sector as a whole were 2.3% over the
period. Conditions in the High Street remain extremely tough. UK
online sales growth continues to outstrip instore growth with the
majority of High Streets gaining little from recent positive
consumer sentiment. Growing inflationary pressures are creating
additional problems and rationalisation on the High Street
remains ongoing with recent examples including BHS, M&S,
Banana Republic, Jones, Arcadia, French Connection, 99p Stores
and Brantano. One potential source of some welcome relief for
provincial High Streets should come in the form of the recent
Rates revaluation, bringing Rate bills down in locations where
rental values have fallen over the past decade.
Occupational demand for out of town retail accommodation
continues to fair rather better. The growth in “click and collect”
formats and the appeal of car borne shopping are both supportive
of schemes with good critical mass in strong catchments. The
expansion of discounters such as Dunelm, B&M, Home Bargains,
The Range, Aldi and Lidl is continuing to maintain a reasonably
heathy leasing environment for schemes of this nature.
At the most aggregated level, the overall vacancy rate across the
whole of the UK commercial property market remained broadly
flat over the period, at 7.7%. Positively, vacancy rates in many
submarkets remain below the threshold at which trend economic
performance generates positive rental value growth.
Portfolio Strategy and ActivityThe twelve months to end March 2017 has been a period of
continued healthy investor demand for the Trust with £50.7m of
fresh equity being admitted through the issuance of new units.
These additional investments have emanated from both new
investors committing to their first exposure to the Trust and
existing investors increasing their holdings. Units in issuance
Investment Advisor’s Report(continued)
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Threadneedle Property Unit Trust
over the period grew 4.8%. The period also saw good liquidity in
the secondary market for units in the Trust helped by the vehicle’s
increased scale over recent years.
The continued popularity of the Trust has meant that the
Manager’s control of inflows protocol has remained in place
throughout the period under review. As communicated to unit
holders, this protocol protects the interests of investors during
periods of growth by applying prudent controls over both cash
holdings and inflows into the Trust.
As at the end of March 2017 the Trust’s property portfolio
comprised a total of 228 properties and 901 individual tenancies.
The portfolio continues to offer exceptional diversification
benefits. By way of illustration, the ten most valuable properties
represent 17% of the total portfolio value, the comparable
industry average figure being 49% (AREF/IPD Property Fund
Vision Handbook December 2016). Similarly, the ten largest
tenants in terms of total rental commitments represent 17% of
the entire portfolio rent roll compared to an industry average of
36%. This diversification is a central component of the Trust’s
investment approach and acts as a powerful risk control.
The Trust also benefits from strong diversification across its
investor base with the number of individual investors totalling
208 as at end March 2017. No single investor holds more than 6%
of the Trust’s units in issuance and the top ten investors hold a
combined total of just 39%.
During the twelve months to end December 2016, the Trust
delivered a total return of 3.1% compared to the benchmark total
return of 2.8%. The Trust’s benchmark is the All Balanced Property
Fund Index from the AREF/IPD UK Quarterly Property Fund Index
(the AREF/IPD Benchmark). Total returns to the Trust’s unit holders
during the twelve months to end March 2017 were 3.8%,
marginally ahead of the 3.7% total return for the AREF/IPD
Benchmark. As at the end of March 2017 the Trust has
outperformed the AREF/IPD Benchmark over one, three, five, ten
and fifteen years.
The Trust’s outperformance over the twelve months to end March
2017 is a product of both its fundamental approach and its
current strategic positioning. The Trust’s high income return to
investors, representing a central component of its distinctive
investment philosophy, was a major contributor to performance.
The Trust’s distribution yield as at the end of March 2017 stands
at 4.9% some 40% higher than the weighted average of 3.5% for
“other Balanced Property Funds” within the AREF/IPD
Benchmark.
At the strategic level, the Trust’s investment performance
benefited from its relatively high exposure to the industrial and
logistic sector which, as described, was the stand out performer
over the period. The Trust’s offices performed well in the context
of the office sector, being more orientated towards suburban
London and the South East, rather than central London.
The Columbia Threadneedle Investments asset management
team have also delivered additional performance gains through
refurbishment projects, receipt of beneficial planning
permissions, tactical lease surrenders with simultaneous re-
lettings as well as the ongoing engagement of all occupiers. Over
the twelve month period to end March 2017 the asset
management team successfully completed a total of 113 new
lettings and lease renewals relating to a total rent roll of £9.6m
per annum. Significant asset management initiatives are
included in the transactions and key events section that follows.
The Trust has been a highly selective buyer throughout the
period under review, acquiring a total of six properties at the
combined purchase price of £85.9m. This buying programme
applying property specific research has been consistent with the
Trust’s investment philosophy in terms of yield, diversification
and active management. The six properties acquired were
located 39% by value in the south east of England and generated
an average net initial yield of 6.4% inclusive of vendors’ rental
top ups, where provided. In terms of sector distribution, 11% by
value was in the industrial sector, 19% in the office sector, 44% in
retail warehouse sector and 26% in the leisure sector.
The Trust acquired two investments in the leisure sector over the
period increasing the portfolio’s exposure to this growing
specialist element of the market. The larger of the two was a
substantial and dominant leisure scheme in the centre of
Aylesbury, Buckinghamshire. The scheme, known as The
Exchange comprises an Odeon Cinema, three restaurants let to
Wagamama, Gourmet Burger Kitchen and Nandos together with
a popular JD Weatherspoon pub and an Anytime Fitness Gym.
The Exchange is the principal leisure offering for Aylesbury and
its affluent surroundings and all the tenants report strong trading
from this destination. The property is well let to strong tenant
covenants with an average unexpired lease term of 11 years. The
property was acquired for the sum of £13.47m reflecting a net
initial yield of 5.5%.
The second leisure investment related to a recently opened
trampoline activity centre in Wolverhampton let to Adventure
Forest Ltd. The property occupies a highly prominent position in
the immediate vicinity of Bentley Bridge Retail and Leisure Park
which represents a major retail and leisure destination. The
property was constructed in 2002, is let for a further 9 years at a
rent of £6 per sq ft and was acquired for £4.0m reflecting a net
initial yield of 7.3%.
Whilst the Trust completed two separate acquisitions in the retail
warehouse sector both actually related to two contiguous retail
parks which collectively provide the dominant out of town retail
offering for Trowbridge and its surroundings. Acquired separately
as Trowbridge Retail Park and Spitfire Retail Park the Trust has
acquired the opportunely to brand, operate and physically improve
the combined holding as a single entity offering excellent critical
mass. Trowbridge Retail Park acquired in December 2016 is let to
B&M, Home Bargains, Dreams, Matalan and KFC providing a
weighted average unexpired lease term of 9 years and an average
passing rent of £14.20 per sq ft. The purchase price of £14.85m
reflected a net initial yield of 6.7%. Spitfire Retail Park acquired in
March 2017 is let to Currys, PC World, Carpetright, Pets at Home,
Investment Advisor’s Report(continued)
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Threadneedle Property Unit Trust
Investment Advisor’s Report(continued)
TK Maxx, Knees and McDonald’s providing a weighted average
unexpired lease term of 5.2 years and an average passing rent of
£18.40 per sq ft. The purchase price here was £14.14m reflecting a
net initial yield of 6.3%. The amalgamated holding generates a
highly attractive net initial yield of 6.5% based upon the combined
purchase price of £29m.
Brighton
Queensbury House, Queensbury Road
The single office acquisition over the period related to
Queensberry House in Brighton. The property comprises an
attractive town centre office and retail development totalling
35,800 sq ft fronting Queen’s Road right in the heart of the City’s
amenities. The property was substantially refurbished in 2009
and is now fully let to a total of 8 tenants including Regus and
Tesco. The Brighton office market is particularly buoyant as the
City becomes an increasing magnet for the telecoms, media and
technology sectors. This growth in demand coupled with supply
side constraints have resulted in Brighton office rental levels
reaching new record highs. Queensberry House was acquired
for £12.6m reflecting a net initial yield of 6.5% and is particularly
well positioned to benefit from the City’s ongoing rental value
growth.
Finally the Trust’s sole acquisition in the industrial sector related
to an Amazon distribution centre just off junction 5 of the M5 in
Droitwich. The property totalling 113,400 sq ft was
comprehensively refurbished by the previous owner and has
been the subject of further significant investment by Amazon.
The property is let for a term of 10 years, subject to tenant’s
break option at the end of the 5th year, at an initial rent equating
to £4.90 per sq ft. The purchase price of £7.0m reflected an
attractive net initial yield of 7.5%.
The Columbia Threadneedle Investments fund management
team has continued to seek out and exploit opportunities to
affect performance enhancing asset disposals, most particularly
where special purchasers are identified. The largest disposal
related to Building 1 at Abbey View in Saint Albans. This property,
comprising 40,470 sq ft of office accommodation on three floors
was subject to a single lease expiring in February in 2017, the
tenant having already vacated. The property therefore
represented a major void, outgoings liability and refurbishment
commitment for the Trust. The sale price of £11.5m was
substantially ahead of the asset’s independent valuation and
reflected a capital value of £284 per sq ft.
The smaller of the two sales related to a solus, B&Q store on
Coypool Road, Plymouth. The lease on the property was due to
expire in four years and the tenant had already indicated there
intention to vacate. Accordingly the property was sold to an
owner occupier for a price reflecting a 9% premium to the
independent valuation, thereby mitigating exposure to a
medium term void.
As illustrated in the graphs above, and reflective of the size of the
Trust’s property portfolio, the transactional activity over the period
did not substantially alter sector exposures. The High Street
exposure fell modestly from 15.5% to 14.2% whilst the two leisure
acquisitions are reflected in the increased miscellaneous
component. The Trust’s property portfolio continues to enjoy a
Portfolio Regional Distribution (by market value)as at 31 March 2017
16%
35%
4%
9%
12%
8%
3%2%
4%3%
4%
West MidlandsSouth WestYorks/HumbersideNorth West
LondonSouth East
WalesScotland
EasternEast Midlands
North East
Source: Columbia Threadneedle Investments March 2017.
Offices Shops Industrial RetailWarehouse
Miscellaneous
Portfolio Sector Distribution (by market value)
31 March 2016
31 March 2017
0%
5%
10%
15%
20%
25%
30%
35%
Source: Columbia Threadneedle Investments March 2017.
good balance in terms of both sector and regional distribution. As
at end of March 2017 the property portfolio generated a net initial
yield of 5.8%, 50 basis points above the comparable market yield.
Outlook
As we predicted at this juncture last year, 2016 saw a pronounced
cyclical cooling in the total returns generated by the UK
commercial property market. Total return over the twelve months
to end March 2017 were 3.8% broadly comparable to the 4.6%
generated by UK gilts but heavily surpassed by the 23.6% total
return from UK equities. The FTSE 100 and the more UK focused
FTSE 250 indices have both registered new all-time highs since
the UK’s decision to leave the EU.
This more modest performance of the UK commercial property
market over the past twelve months has not diminished
institutional appetite for the sector. UK institutional investors
remain highly cognisant of the income and diversification merits
of the sector and the 10% annualised total returns delivered by
the commercial property market over the past 5 years.
Looking ahead over the medium term, the most significant
unknown for the UK, is inevitably Brexit. The medium term
outlook for the UK commercial property market encompasses a
period in which the country’s trading relationships with the EU
and the rest of the world will be redefined. How these new
trading relationships affect the UK expansion plans of
international companies as well as such plans of domestic
companies wishing to access EU markets will have a significant
bearing on overall occupational demand. It appears reasonable
to assume that the new landscape for international trade will take
a considerable period to evolve, well beyond the two year period
prescribed for the UK’s actual exit from the EU.
Looking specifically at the forthcoming year, prospects for the
UK commercial property market appear far more favourable than
were widely predicted under a ‘leave’ scenario before the
referendum. Property markets have not been blown off there
cyclical course since the June referendum result. Investor
sentiment remains very positive and occupiers are continuing to
execute expansionary strategies. Continued ultra-low base rates,
gilt yields and lending margins as well as the depreciation of
sterling will all continue to attract capital into UK commercial real
estate. The property sector’s income return looks all the more
appealing. Development activity is now likely to be far less
pronounced, being the first activity to be curtailed in the face of
heightened uncertainty. This should provide further support to
occupational markets with the possible exception of central
London offices where a major development pipeline is already in
train. In the Investment Advisor’s opinion the property market
was due a period of more modest, income dominated total
returns following the exceptional performance of the preceding
five years and that remains the outlook for 2017.
The Trust’s succeeded in outperforming its benchmark over the
year to end March 2017, aided particularly by its relatively high
distribution yield and its overweight exposure to the industrial
sector. Performance enhancing sales ahead of prevailing
valuations were also positive contributors. With market returns
likely to remain income dominated over the forthcoming year,
the Trust’s relatively high ongoing distribution yield presents a
real competitive advantage. At the sector level, the Trust’s
overweight position in the industrial sector and underweight
exposure to central London offices both appear strategically
beneficial.
Highly proactive asset management across the whole portfolio
delivered an exceptionally high volume of leasing transactions
over the past twelve months. Highlights included the letting as a
whole of the Trust’s office refurbishment on Furnival Street,
London EC4, five lettings at Lloyds Avenue London EC3 and
the conversion of a poorly trading B&Q store into a 20 year let,
Lidl supermarket in Leyton. The dedicated asset management
team have clear objectives aimed at replicating this strong
contribution to the Trust’s investment performance.
Controls and risk management remain central to the overall
management of the Trust. Liquidity will continue to be controlled
by the Manager’s inflow or outflow protocols as circumstances
require, ensuring the appropriate protection of unit holders’
interests. We also expect the Trust’s excellent portfolio
diversification to remain a significant positive in terms of
performance and risk mitigation.
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Threadneedle Property Unit Trust
Investment Advisor’s Report(continued)
8
Threadneedle Property Unit Trust
Transactions and Key Events
Key:AcquisitionDisposalAsset Management
WAULT = Weighted average unexpired lease termNIY = Net Initial Yield
April 2016
Bridges Retail Park, Whitehaven
The property comprises a retail warehouse scheme including four retail units and a ‘drive – thru’ unit with a total floor area of£43,000 sq. ft. Brantano (units 4&5) appointed Administrators inJanuary 2016 and shut the premises shortly thereafter. Inanticipation of this, the Trust had already commenced re-marketing and was able to re-let the premises to Poundworld ata rent above the estimated rental value (“ERV”). (£11.50 per sq. ft.compared to the ERV of £8.25 per sq. ft.). This has improved therental tone across the scheme and assisted lease renewalnegotiations with Carpetright. This transaction eliminated the risksassociated with a void unit and contributed to a 20.7% monthlyincrease in valuation as at March 2017.
May 2016
Dewar Close, Fareham
Columbia Threadneedle Investments negotiated with FedEx UKLtd to commit to a new 10 year lease (Tenant break option on the 5th anniversary), at a rent of £255,000pa, vs an ERV of £228,900pa(£7.61 per sq. ft.). This eliminated a potential void and associatedcapital expenditure. The renewal generated an increase invaluation from £2.29m at the beginning of the year, to £3.465m atthe end of the year, which equates to a 51% increase.
June 2016
B&Q, Coypool Road, March Mills, Plymouth
The property comprises a solus retail warehouse unit totalling36,264 sq. ft. let to B&Q PLC until 22nd December 2020 at a rentreflecting £12 per sq. ft. The tenant had recently confirmed itsintentions to vacate the premises in 2017 in order to consolidatewithin its other store off Tavistock Road to the north of Plymouth.The lease is subject to five yearly RPI-linked rental increases andthe property is over-rented as a consequence. The Fund wasapproached off market by an owner occupier and as aconsequence negotiated a premium price. The property was soldfor £6.25M reflecting a NIY of 6.5% and a reversionary yield of5.7%. The sale price reflected a premium of 8.7% over the finalindependent valuation.
Redcentral, Redhill
A South East multi-let office, totalling 68,632 sq ft with groundfloor retail located in Redhill town centre. At purchase, 66% ofthe income was secured to ING (Lease) UK Ltd until March 2020.In 2013 ING vacated all four floors in advance of expiry, therebyexposing the Fund to significant void risk. Subsequently in 2015the fund surrendered two ING floors and simultaneously re-let toa 5A1 covenant at a rent of £21.50psf. In June 2016, the Fundsurrendered the two remaining ING floors and re-let to another5A1 covenant on a 10 year term (without break option) at the
passing rent (£23.50 per sq. ft). The asset management initiativemitigated a considerable void risk and served to maintain theincome at the rack rented level.
July 2016
34 Queen Street, Cardiff
The property comprises 7,200 sq. ft of retail space located in astrong retail pitch within Cardiff City Centre. The property wasformerly occupied by JD Sports who vacated the premises inSeptember 2015. Once the premises were vacant the Trust carriedout repair and reinstatement works in order to conclude a lettingto Greggs Plc for a term of ten years (tenant’s break afterfive years) at a rent of £150,000 pa. This action minimised the voidrisk and provided an income stream from a strong covenant andcontributed to a 10% enhancement of capital value.
August 2016
Units 1 – 4 Speke Approach, Wheldon Road, Widnes
The property comprises four modern industrial warehouse unitstotalling 75,000 sq ft. The former tenant of unit 4, InternationalAutomotive Components vacated their premises prior to thecontractual expiry date of the lease in August 2016. The Trustnegotiated terms to surrender the lease in June 2016 for apremium of £130,000 (including dilapidations) and immediatelyagreed terms to re-let the premises at an enhanced rentalreflecting £5.25 per sq. ft. compared to the ERV of £4.35 per sq. ft.The new lease was subject to landlord’s refurbishment works inthe sum of £160,000. These transactions contributed to a 15%increase in valuation as at March 2017.
Vale House, Reigate
The property comprises a self-contained 25,000 sq ft officesituated in the centre of Reigate acquired by the fund in March 2010. The property was let in its entirety under four separateleases to Just Retirement Management Services Ltd, expiring in2020 with a tenant’s option to determine in September 2017. InAugust 2016 the Fund consolidated all four leases into one,removing the 2017 break clause and securing a term certain untilSeptember 2022. In addition we secured a rent increase of 7.5%.The lease regear resulted in a 5% uplift in valuation.
October 2016
Building 1, Abbey View, St. Albans
The property comprises a detached office building totalling40,470 sq. ft. forming part of the Fund’s wider ownership on thepark. Building 1 was let to FCE Bank PLC who were not inoccupation and had served notice of their intention to vacateupon lease expiry in February 2017. While the St Albans officemarket remains strong, the refurbishment costs required tomaximise rental income were deemed unpalatable, and the Fundinstead sought to maximise value through a sale. The propertywas selectively marketed and competitive offers were received.The property was sold for £11.5M reflecting a capital value of£284 per sq. ft. The sale price represented a 51% premium to theapportioned independent valuation, and crystallised a grossprofit of £4.64M for the Fund.
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Threadneedle Property Unit Trust
132/144, High Street, Bromley
Further to the departure of Burtons / Dorothy Perkins in January2016, the fund carried out a comprehensive refurbishment to thisunit, comprising some extensive façade changes, and splitting thebuilding into four separate units. The ground and basement floorswere let to Deichmann Shoes UK Ltd on a straight 10 year lease ata rent of £225,000pa. The first floor was subsequently let to SlaterMenswear on a 15 year lease (TBO on the 10th anniversary) at arent of £82,000pa. At the time of writing, the third floor office suiteis under offer at an average annual rent of £34,360pa (£20.20psf)on a 10 year lease (TBO on the 5th anniversary). The lettings havegenerated an increase in the asset value from £9.35m at thebeginning of the year to £9.9m at the end of the year, a 6%increase in asset value. The property offers more upside uponletting of the second and third floor office space.
November 2016
The Exchange, Aylesbury
The property comprises a town centre dominant leisure schemedeveloped in 2000 totalling 64,711 sq. ft. located midwaybetween the Hale Leys Shopping Centres and the WatersideTheatre and adjacent Waitrose/Travelodge. The property is thetown’s principal leisure offering and comprises a six screencinema, a parade of three restuarants, a pub and a gym. Theproperty is fully let to six tenants including Odeon, Wagamama,Gourmet Burger Kitchen and Nandos, providing a WAULT of 13.2 years to lease expiries and 11 years including break options.All tenants report strong trading performance and offer the Fundstrong covenants. Future consented developments, including anew complimentary restaurant block opposite, will add to thislocation’s dominance within the town centre over theshort/medium term. The property was acquired for £13.47Mreflecting a headline NIY of 5.5% and a capital value of £208 persq. ft. overall.
Aylesbury
The Exchange
Trowbridge
Trowbridge Retail Park
December 2016
Trowbridge Retail Park, Trowbridge
The property comprises a purpose built retail park located to thesouth of Trowbridge town centre providing five units totalling75,251 sq. ft. The scheme, together with the adjoining SpitfireRetail Park, dominates a significant catchment which includesMelksham and Warminster. The property is let to B&M, HomeBargains, Dreams, Matalan and KFC providing a WAULT of 10.0 years to lease expiries (9.3 years including break options)at a total contracted rent of £1,065,857 per annum reflecting alow average rent of £14.16 per sq. ft. The units are broadly rackrented and all tenants report strong trading performance. Theproperty was acquired for £14.85M reflecting a headline NIY of6.7% and £197 per sq. ft. overall.
February 2017
Air Space, Well Lane, Wolverhampton
The property comprises a modern warehouse buildingconstructed in 2002 providing a total of 51,934 sq. ft. located in anestablished retail / leisure / commercial location to the north eastof Wolverhampton city centre. The property has been let toAdventure Forest Ltd on a 10 year lease (8.7 years unexpired) ata rent reflecting £6 per sq. ft. subject to an RPI-linked rent reviewat the end of the 5th year. The tenant has received planningconsent to use the property for leisure uses (D2) and operates theproperty as an indoor trampolining activity centre. Should thetenant vacate, the planning consent reverts to standard industrialwarehouse use. The passing rent is in line with the ERV of theproperty in its current use however the ERV for industrial uses ismarginally lower at circa £5.50 per sq. ft. The property wasacquired from a private investor for £4.0M reflecting a NIY of7.3%, rising to a minimum of 7.7% at the August 2020 rent review.
Units 20–23, Monmer Close, Willenhall
This industrial property comprises 35,000 sq. ft. across four unitsand is located in the heart of the industrial region of theMidlands. The former tenant of unit 20, Lonestar Fasteners,vacated their premises prior to the contractual expiry of the leasein June 2016. The Trust negotiated terms for an early surrender ofthe lease for a premium of £85,000 to include dilapidations in
Transactions and Key Events(continued)
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Threadneedle Property Unit Trust
March 2016 and immediately refurbished the premises. The Trustsubsequently re-let the premises to Orwak Easi UK Ltd for a termof ten years (tenant’s break after five) at an enhanced rentalreflecting £4.25 per sq. ft. compared to the previous rental of£3.30 per sq. ft. This action minimised the void risk andcontributed to the enhancement of the capital value of 9 % at theyear end compared to the position immediately prior to theconclusion of the new lease.
2150 Century Way, Thorpe Park, Leeds
The property comprises a total of 31,000 sq. ft. over ground andtwo upper floors. The building is located on a popular businesspark to the east of the city centre. The former tenant of the firstfloor (Sopra Banking) relocated to Sheffield in autumn 2015. TheTrust negotiated a full dilapidation settlement of £257,000 andcompleted a full refurbishment of the premises at a cost of£350,000 in April 2016. The Trust concluded a new letting of thisfloor to Bellway Homes Limited in February 2017 for a term often years (tenant’s break after five years) at a rent of £86,700 pareflecting £17.00 per sq. ft. These actions contributed to a 21%increase in the valuation as at March 2017.
March 2017
Queensbury House, 104-109 Queen’s Road, Brighton
The property comprises an attractive town centre office and retailbuilding totalling 35,851 sq. ft. arranged over basement, groundand six upper floors. The property was built in the mid-1960s andsubstantially refurbished in 2009 (including all mechanicals &electricals and the addition of the 6th floor). The property is verywell located circa 250m from the main line rail station and withineasy walking distance of Brighton’s amenities. The property isfully let to eight tenants including Regus and Tesco, providingthe Fund with a WAULT of 5 years to lease expiries (3.4 yearsincluding break options) at a low average rent of £24.30 per sq. ftwhich compares favourably against an average ERV of £26.12 per sq. ft. Regus plc, the majority office occupier, pay rentrelated to quarterly turnover, subject to various caps and collars.33% of the income generated by the property is subject to someform of indexation (predominantly uncapped RPI increases)which will provide rental uplifts in 2018/2019. The property wasacquired for £12.6M reflecting a NIY of 6.5% and a capital valueof £351 per sq. ft.
Spitfire Retail Park, Trowbridge
The property comprises an out of town retail park locatedadjacent to Trowbridge Retail Park which the Fund acquired inDecember 2016. The scheme provides five units and a drive-thrurestaurant totalling 51,338 sq. ft. let to Currys PC World,Carpetright, Pets at Home, TK Maxx, Knees and McDonald’sproviding a WAULT of 8.4 years to lease expiries (5.2 yearsincluding break options) at a total contracted rent of £945,051 pa.reflecting a low average rent of £18.41 per sq. ft. The units arebroadly rack rented and all tenants report strong tradingperformance. The property was acquired for £14.14M reflecting aheadline NIY of 6.3% and £275 per sq. ft. overall.
On completion of the purchase, the property was amalgamatedwith the contiguous Retail Park to create a combined assetvalued at £29.0M and a blended WAULT of 9.1 years. The
combined purchases facilitate a number of asset managementinitiatives which will maintain and enhance value.
Droitwich
AmazonWarehouse
Droitwich 125, Hampton Lovett Industrial Estate, Droitwich
The property comprises a well located industrial warehousetotalling 113,442 sq. ft. located just off the A442, 3 miles from theM5 junction 5. The property was constructed in the late 1980’sand was comprehensively refurbished by the seller in 2016 at acost of circa £925,000. The property is let to Amazon UK ServicesLimited on a new 10 year lease from 12 September 2016 (subjectto a tenant break at the end of the 5th year and a simultaneousCPI-linked rent review) providing 9.7 years to expiry / 4.7 yearsto break. The property is part of Amazon’s parcel network huband provides the Fund with a high and sustainable day oneincome yield secured against a strong covenant with the benefitof a guaranteed rental increase at rent review. The property was acquired for £7.0M reflecting a headline NIY of 7.5% and£62 per sq. ft. overall.
40 Furnival Street, London, EC4
This self-contained office block in London’s mid-town wascomprehensively refurbished, to a full Cat A standard,incorporating a remodelled façade, reception and VRV airconditioning.
After a short marketing campaign, the building was let in itsentirety to Idox Plc, on a 10 year lease with a break in the 5th year.Idox are paying a rent of £515,000pa (£56 per sq. ft overall), vs anERV of £510,200pa (£55 per sq. ft overall). The letting generatedan increase in value from £6.2m at the beginning of the year, to£9.5m by the end of the year, equating to a 53% increase.
Transactions and Key Events(continued)
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Threadneedle Property Unit Trust
Bristol
10 Queen Square
11
Property PortfolioOffices
Principal Rental Income Next RentBetween £1 million and £2.5 million in Value Tenants per annum Review
NottinghamLoxley House Freehold detached modern office building constructed Various £166,208 03/2020in 1997 over ground and first floors, totalling 12,271 sq. ft. with 43 car parking spaces.
Tunbridge Wells Lonsdale Gate Freehold detached self-contained office building with D.G. White, H.A. Krafft £140,220 03/2019accommodation on ground and three upper floors, totalling 9,600 sq. ft.
Egham
65 High Street
Between £2.5 million and Principal Rental Income Next Rent £5 million in Value Tenants per annum Review
Bristol Royal London BuildingsFreehold property built in the 1930’s, comprising offices Various £250,846 08/2017 over first to sixth floors with retail at ground floor level.The property totals 25,437 sq. ft.
Bristol 10 Queen Square Leasehold period office building extensively refurbished Various £238,248 12/2019over seven floors, totalling 17,838 sq. ft.
Chertsey Rutherwyk House Freehold detached office building constructed in 1998 Portman Travel Ltd £233,500 N/Aover ground and two upper floors together with surface car parking areas. The property totals 11,347 sq. ft.
Dorking Parsonage Square Freehold office accommodation comprising five self-contained Various £322,753 12/2017units on ground to second floors, totalling 22,714 sq. ft.
Egham Heathrow Business Centre Freehold purpose built office building constructed in 1999 Vacant £0 N/Acomprising accommodation on ground, first and second floors, totalling 11,884 sq. ft.
Guildford Carriage House & Barratt House Freehold. Two office buildings on a campus development Various £126,810 11/2018constructed in the late 1980s. Arranged over ground andfirst floors with surface car parking areas. The property totals 15,161 sq. ft.
12
Threadneedle Property Unit Trust
Offices(continued)
Between £2.5 million and Principal Rental Income Next Rent £5 million in Value Tenants per annum Review
HaydockChase House, 16 The Parks Freehold high quality self-contained office building within Speedy Support Services Ltd £248,138 N/A‘The Parks’ business park. Constructed in 1995 and recently refurbished, totalling 16,196 sq. ft.
Maidenhead Belmont Place Freehold detached office building constructed in 1999 Various £200,000 06/2018over ground and first floors with surface and under-croft car parking areas. The property totals 12,733 sq. ft.
Slough Rath House Freehold detached office building constructed in 1990 QA-IQ Group Ltd £205,000 12/2019over ground and two upper floors totalling 13,947 sq. ft.
Twickenham 15/16 Church Street Freehold refurbished office building arranged over ground, Various £336,000 06/2020first and second floors, and a single retail unit fronting Church Street, together totalling 12,741 sq. ft.
Weybridge 58 Church Street Freehold self-contained office building construed in the 1990s. NHS Property Services Ltd £260,796 01/2020The property totals 10,128 sq. ft. over ground and first floors.
Twickenham
15/16 Church Street
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Threadneedle Property Unit Trust
Principal Rental Income Next Rent Over £5 million in value Tenants per annum Review
Brentwood Juniper House & Jupiter House, Warley Hill Business Park Freehold. Two adjoining multi-let, self-contained office Various £729,362 01/2018buildings totalling 37,917 sq. ft.
Brighton Queensbury House, 104-109 Queens Road Freehold town centre office and retail building totalling Various £818,327 03/201835,951 sq. ft. over basement, ground and six upper floors.
Bromley Royal Court, 81 Tweedy Road Freehold self-contained headquarters office building arranged Splash Damage Ltd £447,966 11/2018on ground and three upper floors totalling 25,130 sq. ft.
Chertsey Concourse House, Fox Lane Freehold three storey L-shaped office building constructed Kone Plc £400,000 11/2020in 2000 with undercroft parking totalling 16,879 sq. ft.
Edinburgh The Stamp Office Freehold newly developed office building arranged over Various £794,528 02/2019seven levels with basement car park, totalling 51,201 sq. ft.
Edinburgh 1-6 Atholl Crescent Freehold property comprising six town houses in a Various £685,210 01/2019Georgian crescent totalling 36,840 sq. ft.
Epsom The Wells, 3-13 Church Street Freehold self-contained refurbished office building Atkins Ltd £513,097 N/Aconstructed in 1989 over ground and three upper floors totalling 25,501 sq. ft.
Fareham 4500 Parkway, Solent Business Park Freehold headquarters style office building constructed Various £669,811 11/2019in 1993 and refurbished in 2008. Total floor area of 56,033 sq. ft. with 364 surface car parking spaces.
Farnham Millennium Centre, West Street Freehold office development completed in 2000, comprising Various £356,686 06/2018three buildings over ground, first and second floors, totalling 31,404 sq. ft.
Farnham
Millennium Centre, West Street
Offices(continued)
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Threadneedle Property Unit Trust
Principal Rental Income Next Rent Over £5 million in value Tenants per annum Review
FrimleyArchipelago Business ParkFreehold property comprising a campus of three modern Various £472,264 06/2017office buildings constructed in the early 1990’s, split into six units totalling 54,572 sq. ft.
Godalming Old Mill Business Park Freehold office complex of four buildings, one being a period Various £682,209 09/2017former mill and the most recent constructed in 2003. Each is over ground, first and second floors, apart from the Annex which is over ground and first floors. The property totals 38,646 sq. ft., together with car parking.
Guildford Bramley House Freehold recently constructed high specification office Various £303,713 05/2019building on ground, first and second floors totalling 19,591 sq. ft., together with car parking.
Leeds Elizabeth House, Queen StreetFreehold detached refurbished office building over Various £483,636 12/2020ground and four upper floors with 17 car parking spaces.The property totals 25,576 sq. ft.
Leeds2150 Century Way, Thorpe ParkLeasehold detached office building constructed in 2004 Various £386,964 10/2020over ground and two upper floors totalling 31,000 sq. ft.
London 8-9 Lovat LaneFreehold mid-terrace office building built in 1984, Various £307,972 12/2017now refurbished and re-let, totalling 8,026 sq. ft.
London EC1
Parchment House
Offices(continued)
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Threadneedle Property Unit Trust
floors totalling 15,648 sq. ft. Principal Rental Income Next Rent
Over £5 million in value Tenants per annum Review
London 8 Lloyds AvenueFreehold Grade II Listed mid terraced building originally Various £231,985 10/2019constructed in early 1900 and last refurbished in 1998, arranged over basement, ground and five upper floors, totalling 20,136 sq. ft.
London Avon House Leasehold office building over 6 floors, constructed Various £697,867 07/2017circa 1990 totalling 31,001 sq. ft.
London Parchment House Freehold converted Victorian warehouse over seven Various £487,178 N/Afloors totalling 15,648 sq. ft.
London 5,6 & 7 D’Arblay Street Freehold property consisting of two adjoining refurbished Steam Motion & Sound UK Ltd £333,000 05/2019five storey office buildings totalling 6,984 sq. ft.
London 40/42 Furnival Street Freehold City of London office building totalling 9,142 sq. ft. Vacant £0 N/A
London Warwick House Leasehold office and retail property substantially refurbished Various £735,372 07/2017 behind the façade and arranged over lower ground, ground and five upper floors, totalling 21,863 sq. ft.
London 4/5 Bedford Chambers Freehold period terrace office building arranged over New York University in London £455,000 10/20205 floors, including basement level totalling 9,359 sq. ft.
London 46-48 Foley Street Freehold office building over lower ground, ground and Various £1,098,096 03/2018four upper floors, extensively refurbished in 2008 to grade-A standard totalling 20,062 sq. ft.
London W1
4/5 Bedford Chambers
Offices(continued)
Staines
Magna House
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Threadneedle Property Unit Trust
Principal Rental Income Next Rent Over £5 million in value Tenants per annum Review
Redhill Redcentral, High Street Freehold modern high specification office and retail building Various £1,048,997 02/2019arranged over ground, podium and five upper floors. The property totals 68,113 sq. ft. together with 131 car parking spaces.
Reigate Vale House, Roebuck CloseFreehold modern office building over ground and Various £558,600 09/2022two upper floors, totalling 25,379 sq. ft. together with 72 car parking spaces.
Rickmansworth Cardinal Point, Park Road Freehold three storey office building. Property totals Regus plc £571,545 12/201925,570 sq. ft. and has 65 car parking spaces at the rear.
Sheffield Office 1, The Square Leasehold modern detached office building constructed Carillion Construction Ltd £824,241 N/Ain 2008 over six storeys, totalling 43,590 sq. ft.
Solihull Dominion Court Leasehold, three self-contained terraced office buildings Various £193,445 05/2020over basement, ground and two upper floors together with rear decked car park. The property totals totals 28,073 sq. ft.
St Albans Abbey View Freehold 1980’s office development over six floors Various £1,249,863 08/2019totalling 11,283 sq. ft.
Staines Magna House Freehold refurbished office building over four floors with Tax Computer Systems Ltd £0 06/2018secure onsite parking on two deck levels, totalling 26,873 sq. ft.
Swindon Auckland House Freehold newly developed office building over ground BP International Ltd £653,589 N/Aand two upper floors totalling 36,493 sq. ft.
Offices(continued)
Principal Rental Income Next Rent Over £5 million in value Tenants per annum Review
Thames Ditton Units 1-7 AC Court Freehold office park comprising seven units extending Various £665,823 09/2017over ground and two upper floors with car parking, totalling 30,793 sq. ft.
Uxbridge Allport House Freehold refurbished office building arranged over ground Allport Cargo Services Ltd £394,000 N/Aand first floor with 64 car parking spaces. The property totals 16,337 sq. ft.
Uxbridge Try House Freehold modern office building over ground and Various £528,950 N/Atwo upper floors, totalling 21,398 sq. ft.
Weybridge Idis House, Churchfield Road Freehold detached office building constructed in 2004 Idis Ltd £0 05/2021over ground, first and second floors totalling 15,660 sq. ft. with 48 secure car parking spaces.
Wimbledon KFH House Freehold detached L-shaped office building constructed Kinleigh Ltd £400,000 06/2017in 1986 over five floors totalling 15,796 sq. ft.
Offices(continued)
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Threadneedle Property Unit Trust
Wimbledon
KFH House
18
Threadneedle Property Unit Trust
Principal Rental Income Next Rent Less than £1 million in Value Tenants per annum Review
Eastleigh 42-50 High StreetFreehold two storey building with retail units at ground level Pampurred Pets Ltd £45,000 10/2017and office accommodation above. The property totals 1,573 sq. ft.
Great Yarmouth 8-9 King StreetFreehold end of terrace building comprising a retail unit Shape London £0 N/Aon the ground floor and ancillary storage on basement, first and second floors. The property totals 2,966 sq. ft.
Halifax 12-16 Market Street Freehold retail building on a corner plot with sales area on Heron Foods Ltd £78,000 04/2018ground and first floors and ancillary second floor accommodation, totalling 7,279 sq. ft.
Hinckley18 Castle StreetFreehold mid terrace building comprising a ground floor Specsavers Optical Superstores Ltd £31,500 09/2018retail area with rear staff room and a first floor stock room, totalling 2,745 sq. ft.
HitchinTesco Express, Lyon CourtLeasehold retail supermarket unit forming part of the Tesco Stores Ltd £50,000 05/2022ground floor of a converted former office building. The property totals 25,297 sq. ft.
Hull22 King Edward StreetFreehold terraced building providing retail sales space on Heaven Independent Cafes Ltd £35,000 08/2022ground floor with ancillary accommodation on basement, first and second floors. The property totals 3,242 sq. ft.
Kettering41/43 High StreetFreehold mid terrace retail unit with first floor ancillary Savers Health & Beauty Ltd £32,500 11/2017accommodation, totalling 4,389 sq. ft.
Leamington Spa116 The ParadeFreehold mid terrace property arranged over five floors Various £65,250 01/2018with ground floor retail sales and ancillary upper parts. The property totals 4,920 sq. ft.
Llandudno81-83 Mostyn StreetLong Leasehold, five storey premises with retail accommodation Various £80,000 N/Aover basement, ground and first floors. The two upper floors of the property provide residential accommodation. The property totals 3,640 sq. ft.
Llanelli13 Stepney Street Freehold mid terrace retail unit with ancillary first floor Caversham Trading Ltd £22,500 01/2020accommodation totalling 3,039 sq. ft.
Mansfield14-18 Stockwell Gate Freehold large mid terrace retail store with first floor ancillary Superdrug Stores Plc £107,500 N/Aaccommodation totalling 6,264 sq. ft.
Plymouth52 New George Street Leasehold, single let retail unit over ground to second floors, First Sport Ltd £126,000 N/Atotalling 4,004 sq. ft.
Portsmouth 179 Commercial Road Freehold retail unit on ground, first and second floors, Shoe Zone Ltd £65,000 N/Atotalling 2,943 sq. ft.
Retail
Principal Rental Income Next Rent Less than £1 million in Value Tenants per annum Review
Shrewsbury3-4 Castle StreetFreehold terraced retail property on ground and CEX Ltd £55,000 01/2019two upper floors, totalling 1,859 sq. ft.
Southport 355-357 Lord StreetLong Leasehold terraced retail property on ground and Felldale Retail Ltd £57,500 N/Afirst floors totalling 3,356 sq. ft.
Stockport65-71 Princes StreetFreehold terrace of three retail units. Numbers 65-59 Various £12,000 03/2018are arranged over ground and first floors and Number 71 is arranged over basement, ground and two upper floors. The property totals 8,738 sq. ft.
Stockport84-86 Princes StreetFreehold terraced property constructed in the mid 1920’s Poundworld Retail Ltd £65,000 09/2019as a cinema but now converted to retail use. Arranged as retail sales over basement, ground and first floors, totalling 7,074 sq. ft.
Wrexham10-11 Hope Street Two freehold adjoining retail units arranged on ground and First Choice Ltd £0 N/Afirst floors, totalling 3,571 sq. ft.
Between £1 million and Principal Rental Income Next Rent £2.5 million in Value Tenants per annum Review
Bishop Auckland35-45 Newgate Street & 1-3 Victoria AvenueFreehold terraced block of seven retail units over part three and Various £224,050 09/2020part four storey’s together with part two and part three storey former club premises to the rear. The property totals 32,190 sq. ft.
Blackpool7-15 Church StreetFreehold modern four storey retail unit occupying a corner Various £101,000 06/2018plot. Split and let in two units with retail on ground, basement and part first floors with second floor ancillary accommodation. The property totals 9,301 sq. ft.
Boscombe590-598 Christchurch RoadFreehold property comprising two mid-terrace retail Various £100,000 07/2019units each with ancillary first and second floors. The property totals 10,048 sq. ft.
Cardiff34 Queen StreetFreehold retail unit constructed in the 1960’s over five levels Greggs Plc £150,000 07/2021with retail sales areas over basement, ground and part first floors, totalling 7,200 sq. ft.
Carlisle50-54 Scotch StreetFreehold retail unit constructed over part two and part Various £27,800 03/2022three storeys. Further three storey building to the rear, with frontage to Rosemary Lane. The property totals 10,716 sq. ft.
Retail(continued)
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Between £1 million and Principal Rental Income Next Rent £2.5 million in Value Tenants per annum Review
Chichester34-35 East StreetFreehold period Grade II listed mid terrace three storey The Body Shop International Plc £91,925 N/Abuilding with ground floor retail sales and ancillary upper floors.
Derby20-25 Albert StreetFreehold terraced block of four retail units over ground and Various £65,250 11/2017first floors, totalling 12,684 sq. ft.
Falkirk119-127 High StreetTwo freehold period terraced retail units constructed over Various £111,300 01/2021ground and two upper floors totalling 13,463 sq. ft.
Kingston Upon Thames21-25 London RoadLeasehold, ground floor retail unit built in 2003. Wilko Retail Ltd £109,999 06/2018The property totals 6,542 sq. ft.
Kirriemuir, Dundee29/33 The RoodsFreehold single storey and part two-storey supermarket unit The Co-operative Group Ltd £157,401 N/Aconstructed in the early 1990s. The property totals 12,866 sq. ft.
Lincoln8&9-12 CornhillFreehold mid terrace property comprising two retail units, Various £126,000 N/ANo 8 arranged over two floors with ground floor retail sales and ancillary first floor and No 9/12 arranged over three floors with ground floor retail sales and ancillary first and second floors. The property totals 5,630 sq. ft.
LiskeardCo-op, Barras Street Freehold supermarket unit with first floor and basement The Co-operative Group Ltd £132,290 04/2034ancillary accommodation. The property totals 10,782 sq. ft.
London WC219 New Row, Covent GardenFreehold terraced building comprising a retail unit on the Various £96,650 05/2020ground floor with two flats and a maisonette above.
Retail(continued)
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Chichester
34-35 East Street
Between £1 million and Principal Rental Income Next Rent £2.5 million in Value Tenants per annum Review
LoughboroughImperial BuildingsFreehold block of three retail units on ground floor only, Various £122,750 03/2018with self-contained first floor accommodation.The property totals 6,963 sq. ft.
Nottingham1 St Peters SquareFreehold retail property arranged over basement, ground, Bank of Scotland Plc £113,350 10/2018first and second floors and refurbished in 1993, totalling 4,679 sq. ft.
Southampton179-180 High Street Freehold retail unit over basement and ground floors with Superdrug Stores Plc £125,500 N/Atwo upper floors of residential, totalling 8,366 sq. ft.
Southport485-495 Lord Street Long Leasehold property comprising three shop units Various £131,700 N/Aarranged over ground and two upper floors, totalling 9,105 sq. ft.
Southsea35-37 Palmerston Road Leasehold retail unit on ground, first and second floors, Iceland Foods Ltd £82,500 01/2020totalling 8,436 sq. ft.
Torquay22-28 Union StreetFreehold terrace of five ground floor retail units with ancillary Various £196,000 02/2018first and second floor accommodation, totalling 9,307 sq. ft.
Walsall48-50 & 52 Park Street Two period retail units forming the end of a town-centre retail Various £133,000 02/2020 terrace, over basement, ground and two/three upper floors. The property totals 9,802 sq. ft.
Retail(continued)
21
Threadneedle Property Unit Trust
Nottingham
1 St Peters Square
Between £1 million and Principal Rental Income Next Rent £2.5 million in Value Tenants per annum Review
Weston Super Mare31-35 High StreetFreehold retail unit in corner position arranged over ground, Various £144,500 08/2020first and second floors, totalling 7,290 sq. ft.
Weymouth63-64 St Mary Street & 40 St Thomas street Freehold mid terrace property comprising a large ground 99p Stores Ltd £125,000 N/Afloor retail unit with first and second floor ancillary accommodation to St Mary street and first, second and third floor residential accommodation to St Thomas Street which has been sold on a long leasehold. The property totals 7,547 sq. ft.
WickSomerfield, Macleay Lane Freehold supermarket unit totalling 16,098 sq. ft. The Co-operative Group Ltd £137,190 N/A
Worthing7-11 Montague Street Freehold retail unit on ground floor with office and storage Nationwide Building Society £60,000 N/Aaccommodation on first, second and third floors and small basement. The property was originally constructed as part of the Royal Arcade around the mid 1920’s. The property totals 5,359 sq. ft.
Retail(continued)
22
Threadneedle Property Unit Trust
Between £2.5 million and Principal Rental Income Next Rent£5 million in Value Tenants per annum Review
Andover11-19 High StreetParade of two modern and one period retail units. Arranged Various £288,750 03/2018over ground floor with ancillary accommodation for 11-15 over 1st and 2nd floors. The property totals 32,280 sq. ft.
Chichester79-80 North StreetTwo freehold adjoining retail units comprising ground floor Robert Dyas Holdings Ltd £235,000 N/Asales area with storage on two upper storeys, totalling 7,745 sq. ft.
Glasgow123-133 Sauchiehall StreetThree retail units within a 4 storey Grade II listed building, Various £107,500 03/2019largely of sandstone construction, held freehold. The property totals 23,013 sq. ft.
Guildford1-5 Trinity Gate, High StreetLong Leasehold, five modern lock up retail units constructed Various £255,500 08/2020in 2004, upper floor residential block separately sold off, totalling 4,318 sq. ft.
Leeds32 Lands Lane & 13, 25 & 27 Thornton’s ArcadeFreehold former parade of shops including two units The Clinkard Group Ltd £242,000 N/Afronting Thornton’s arcade combined into one unit over ground, basement and two upper floors. The property totals 8,075 sq. ft.
Middlesbrough51-67 Linthorpe RoadFreehold. Three storey building divided into parade Various £315,500 01/2018of 3 retail units. Constructed in 1958.
Swansea254-255, 256, 257, 259, 260 Oxford StreetLong leasehold, non-contiguous parade of give retail units Various £477,750 09/2017of post war construction over part basement, ground and two upper floors.
Retail(continued)
23
Threadneedle Property Unit Trust
Chichester
79/80 North Street
Between £2.5 million and Principal Rental Income Next Rent£5 million in Value Tenants per annum Review
Weston Super Mare94-102 High StreetFreehold block of nine retail units arranged on ground Various £274,100 08/2017and first floors, totalling 18,180 sq. ft.
Worcester45 High Street Freehold period brick retail building over basement, Fraser Hart Ltd £147,500 10/2019ground and four upper levels, totalling 10,580 sq. ft.
Worthing44-46 Montague StreetTwo freehold adjoining self-contained retail units, Various £325,500 07/2019totalling 14,725 sq. ft.
Retail(continued)
24
Threadneedle Property Unit Trust
Worthing
40-46 Montague Street
Worcester
45 High Street
Principal Rental Income Next RentOver £5 million in Value Tenants per annum Review
Ascot39-51 StreetFreehold. An unbroken parade of 11 ground floor retail Various £741,867 09/2017units with self-contained arranged over two upper floors.The property totals 34,500 sq. ft.
Bromley132-144 High StreetFreehold / part leasehold retail and office building comprising Various £461,000 10/2021three retail units and separately let upper floor offices,totalling 45,476 sq. ft.
Canterbury5-7 The Parade & 10-11 Mercery LaneFreehold retail parade of six units with residential Various £576,200 06/2017accommodation above, totalling 10,764 sq. ft.
CrowboroughSybron WayFreehold supermarket unit totalling 27,411 sq. ft. with Tesco Stores Ltd £395,416 11/202095 car parking spaces.
DerbyUnits 1-6 & 2-6, Albion Street Freehold block of seven retail units over ground Various £897,300 07/2019and first floors, totalling 31,903 sq. ft.
DronfieldDronfield Shopping CentreFreehold shopping centre incorporating two flats, totalling Various £578,740 06/201738,058 sq. ft.
Edinburgh49 George StreetFreehold retail unit on basement, ground, first and second Robinson Webster £284,000 12/2017floors, including a second floor flat, totalling 7,064 sq. ft. (Holdings) Ltd
Harlow37-39 Broadwalk Freehold property comprising two retail units on ground and Various £318,250 01/2019first floor and self-contained offices on first to fourth floors, totalling 64,626 sq. ft.
Retail(continued)
25
Threadneedle Property Unit Trust
Canterbury
5-7 The Parade
Edinburgh
49 George Street
Principal Rental Income Next RentOver £5 million in Value Tenants per annum Review
Kingston upon Thames146-152 Clarence StreetFreehold retail property constructed in 1950s. Ground floor Wilko Retail Ltd £580,000 06/2018sales area with ancillary storage on second and third floors.The property totals 48,388 sq. ft.
Salisbury22-30 High StreetFreehold large retail unit over basement, ground and Various £400,000 03/2021first floors totalling 41,366 sq. ft.
Swindon10-17 & 19a Regent StreetFreehold terrace of five town centre retail units predominantly Various £736,001 N/Aover ground and two upper floors with near car parking area.
Retail(continued)
26
Threadneedle Property Unit Trust
Kingston Upon Thames
146-152 Clarence Street
Principal Rental Income Next RentLess than £1 million in Value Tenants per annum Review
IrlamUnit B Falcon Court, Northbank Industrial EstateFreehold detached warehouse with ancillary offices, WIKA Instruments Ltd £68,649 10/2018totalling 13,125 sq. ft.
Industrial
27
Threadneedle Property Unit Trust
Between £1 million and Principal Rental Income Next Rent £2.5 million in Value Tenants per annum Review
LincolnPlot 12 Sadler RoadFreehold modern detached single storey industrial unit Parcelpoint Ltd £125,000 09/2019with integral offices, totalling 26,480 sq. ft.
RedditchUnit 46, Heming RoadFreehold single storey industrial unit with integral Entaco Ltd £105,010 N/Atwo storey offices constructed in the 1970’s, totalling 20,952 sq. ft.
SheffieldPresident WayFreehold modern single storey industrial unit with integral Liberata UK Ltd £143,000 12/2019three storey offices to the front totalling 31,407 sq. ft.
WakefieldUnit C1 Telford WayFreehold modern detached single storey warehouse Saint-Gobain Building £90,000 N/Aincorporating two storey offices, totalling 19,504 sq. ft. Distribution Ltd
WarringtonUnits 4A-D Barleycastle Trading EstateFreehold terrace of four warehouse units constructed in the Various £180,000 12/2017early 1980’s. Units A, B and C form a single unit with Unit D remaining separate. The property totals 40,525 sq. ft.
WillenhallMonmer CloseFreehold industrial estate of four small terraced units Various £96,500 01/2019constructed in the late 1970’s with integral ground andmezzanine office accommodation totalling 34,734 sq. ft.
Between £2.5 million and Principal Rental Income Next Rent £5 million in Value Tenants per annum Review
BirminghamBooker 2 Cranby StreetLong leasehold cash and carry unit constructed in 2000 with Booker Ltd £255,000 07/2020a total floor area of 43,162 sq. ft. Located within 2.49 securesite with 92 car parking spaces.
CroydonPioneers Industrial EstateFreehold modern industrial estate comprising 5 units, Various £262,815 08/20193 adjoining and 2 detached, totalling 31,200 sq. ft which includes 65 secure car parking spaces.
FarehamUnit 5E Dewar Close, Segensworth WestLong leasehold modern warehouse constructed in 1990, Fed Ex UK Ltd £255,000 02/2023totalling 30,073 sq. ft.
FarnboroughUnit C1, Southwood SummitFreehold detached industrial unit constructed in the 1980s ITW Ltd £287,500 N/Awith a total area of 32,600 sq. ft. The secure yard has 85 secure car parking spaces.
GuildfordBridge Park, Merrow LaneFreehold multi-let industrial estate comprising 7 units Various £274,800 10/2017arranged in 3 terraces with a total floor area of 28,200 sq. ft with 54 external car parking spaces.
HayesSwallowfield CentreFreehold terraced building divided into three Various £241,794 N/Aindustrial/warehouse units of steel portal frame construction, totalling 24,111 sq. ft.
HoddesdonBibby Unit, Belcon Industrial EstateFreehold distribution/warehouse unit with two storey Bibby Distribution Ltd £288,000 06/2017office building attached, constructed in 1991 andtotalling 49,015 sq. ft.
LeedsNetwork House, Middleton GroveLeasehold – held on a 999 year virtual freehold from 30/09/2002 DPD Group UK Ltd £292,978 09/2017at a peppercorn rent. A detached twin-bay warehouseconstructed in 1995 with yard, turning and car parking areas.The property totals 68,427 sq. ft.
LeedsUnit 9 Bruntcliffe AvenueFreehold single storey distribution/warehouse unit Nobia Holdings UK Ltd £322,072 N/Awith two storey ancillary office accommodation. Constructed in 1990s. The property totals 80,629 sq. ft.
LeedsRavens Park Units 2001 & 2002Freehold. Two detached light industrial/warehouse Various £327,908 08/2019units built in 2001 with ancillary office accommodation.Total floor area 57,637 sq. ft.
MotherwellUPS Glasgow CentreAbsolute ownership – Purpose built single storey distribution UPS Ltd £353,682 N/Aunit with ancillary accommodation constructed in 2004.The property totals 47,656 sq. ft. with 70 secure on site car parking spaces.
NormantonUnit A3 Foxbridge WayFreehold distribution warehouse constructed in the late DX Network Services Ltd £194,700 N/A1990’s totalling 43,253 sq. ft.
Industrial(continued)
28
Threadneedle Property Unit Trust
Between £2.5 million and Principal Rental Income Next Rent £5 million in Value Tenants per annum Review
NorthamptonCrow Lane Industrial EstateFreehold industrial estate of seven units arranged in Various £269,730 03/2018two terraces and one stand-alone unit.The estate totals 55,780 sq. ft.
NorwichFrenbury Industrial EstateFreehold. Multi-let industrial/trade counter estate. Comprises Various £333,346 09/20183 units each with a secure yard, with a total floor area of 75,590 sq. ft. The total site area is 4.78 acres with a sitecoverage of 35%.
ReadingHeron Industrial EstateFreehold purpose built, multi let industrial estate totalling Various £290,214 08/2017approximately 46,839 sq. ft, arranged as 7 units. The property has a total site area of approximately 2 acres with a site density of 55%.
SawstonDales Manor Business ParkFreehold multi- let mixed industrial and office business park Various £265,525 08/2017comprising nine industrial units in two blocks and four officeunits. The property totals 42,967 sq. ft.
StevenageAspect One, Gunnels WoodFreehold headquarters production/warehouse building Zeus Packaging (UK) Ltd £275,000 09/2018with fitted offices at first floor totalling 40,852 sq. ft.
StevenageUnits 1-6 Pin Green Industrial EstateFreehold industrial estate of six units each with ancillary Various £208,500 09/2019office accommodation, totalling 42,245 sq. ft.
WandsworthUnit 2, Wandsworth Trading EstateFreehold single storey semi-detached warehouse Colefax Fowler Group Plc £195,520 12/2020constructed circa 1970, totalling 17,422 sq. ft.
WellingboroughFaraday Court, Park Farm Industrial EstateLong leasehold 24 unit industrial estate built in the Wellingborough Borough £239,915 N/Amid-1980’s in four terraces totalling 77,182 sq. ft. Council
WellingboroughBaird Court, Park Farm Industrial EstateLeasehold multi-let industrial estate totalling 61,992 sq. ft. Various £245,929 12/2017
WidnesUnits 1-4 Speke ApproachFreehold estate of four industrial/warehouse units Various £205,790 09/2017totalling 74,510 sq. ft.
WolverhamptonParkside Industrial EstateFreehold estate of five modern industrial units with Various £274,638 07/2017ancillary office space. The property totals 98,276 sq. ft.
Wooburn GreenAvery Distribution UnitFreehold industrial detached distribution Avery Dennison UK Ltd £260,000 12/2017unit totalling 30,682 sq. ft.
Industrial(continued)
29
Threadneedle Property Unit Trust
Principal Rental Income Next Rent Over £5 million in Value Tenants per annum Review
AylesburyPremus, Coldharbour WayFreehold multi-let industrial estate of seven units Various £630,202 01/2018constructed in 2008 totalling 86,794 sq. ft.
ColchesterGilberd Court, Units 1-6 Severalls ParkLong leasehold mutli-let industrial estate comprising Various £521,126 12/20186 units in two terraces with a total floor area of 75,837 sq. ft.A central service road/area provides 230 car parking spaces.
CrayfordBourne Industrial ParkFreehold industrial estate of 28 warehouse and trade Various £554,197 06/2017counter units constructed in the early 1980s, totalling 55,252 sq. ft.
Croydon19 Commerce WayFreehold industrial estate of 12 modern units completed Various £1,159,076 10/2017in 2004, totalling 138,038 sq. ft.
Droitwich125 Hampton LovettFreehold detached industrial warehouse unit totalling Amazon UK Services Ltd £557,301 09/2021113,443 sq. ft.
FarehamUnits 1-7 Solent GateFreehold modern industrial estate comprising seven units Various £346,700 N/Aof steel portal frame construction, totalling 50,094 sq. ft.
Industrial(continued)
30
Threadneedle Property Unit Trust
Fareham
Solent Gate
Principal Rental Income Next Rent Over £5 million in Value Tenants per annum Review
Guildford1-4 Henley Business ParkLong Leasehold. Twelve units arranged in four blocks of Various £496,760 04/2017three terraced units. Constructed in 2006 totalling 92,141 sq. ft.
HamptonKempton GateFreehold multi-let industrial estate of sixteen units Various £625,623 10/2017totalling 86,794 sq. ft.
HayesSpringfield RoadLong Leasehold industrial estate of five units. Various £382,794 11/2018The property totals 76,643 sq. ft.
High WycombeCressex Industrial EstateFreehold distribution/warehouse industrial estate of Various £565,384 03/2022five units, totalling 138,692 sq. ft.
Leeds Unit 3, Benyon Park WayFreehold detached 1980’s twin-bay warehouse with yard, Encon Ltd £449,072 08/2018turning and car parking areas. The property totals 105,751 sq. ft.
LetchworthFourth DimensionLeasehold terrace of three industrial units completed Stapletons (Tyre Services) £417,136 N/Ain 2002, totalling 68,626 sq. ft. Charleswaters Ltd
Maidstone5 Mills RoadFreehold detached industrial/distribution unit and yard, P&H Ltd £237,777 03/2021totalling 102,572 sq. ft.
NewportUnits A & B, Reevesland Industrial EstateFreehold large warehouse facility split into two units together Various £407,175 09/2017 with separate vehicle workshop building, totalling 175,005 sq. ft.
North TynesideUnits A, B & C, Hadrian Industrial ParkFreehold, two modern industrial warehouse units Various £744,432 10/2017totalling 161,015 sq. ft.
Industrial(continued)
31
Threadneedle Property Unit Trust
Letchworth
Fourth Avenue
Guildford
Henley Business Park
Principal Rental Income Next Rent Over £5 million in Value Tenants per annum Review
RedditchArrow Valley 2Freehold detached industrial/distribution unit and Landsdon Ltd £513,000 N/Ayard, totalling 95,352 sq. ft.
RedditchUnits 58-69 & 70-90 Heming Road, Washford Industrial EstateFreehold industrial estate comprising 33 units constructed in Various £487,337 07/2017the mid 1980’s, totalling 145,453 sq. ft.
RedhillIO CentreFreehold. Modern multi-let industrial estate arranged in Various £360,306 09/2017terraces. Some trade counters. The property totals 42,105 sq. ft.
RochesterBooker Cash & Carry UnitFreehold. Single storey warehouse with ancillary Booker Ltd £712,430 N/Aaccommodation used for wholesale retail, includes 170 car parking spaces within yard. The property totals 92,381 sq. ft.
RugbyUnit E Swift ParkFreehold detached industrial unit and yard, totalling 94,017 sq. ft. Volvo Group UK Ltd £445,435 N/A
Rugby IO CentreFreehold multi-let industrial estate of seven units Various £401,558 05/2018constructed in 2003, totalling 91,120 sq. ft.
RugbyUnit C Swift PointFreehold detached industrial/distribution unit and yard, CDK (UK) Ltd £660,000 N/Atotalling 122,020 sq. ft.
SheffieldShepcote Business ParkFreehold, well-specified distribution warehouse completed 2002 DSG Retail Ltd £408,000 N/Acomprising a two bay of steel portal frame warehouse with 10% offices. The property totals 96,000 sq. ft.
Southampton The Whitbread Centre Freehold detached warehouse constructed in 1989 totalling Import Services Ltd £680,000 06/2019113,071 sq. ft.
Industrial(continued)
32
Threadneedle Property Unit Trust
Redditch
Arrow Valley 2
Principal Rental Income Next Rent Over £5 million in Value Tenants per annum Review
South NormantonUnits 1 & 2 Fulwood, 28 Common RoadFreehold. Modern Warehouse with two storey office Various £556,250 N/Aaccommodation, constructed in 2003. The property totals 81,584 sq. ft.
ThetfordBurrell Way Trading Estate, London RoadFreehold industrial estate constructed in the 1980s comprising Various £519,423 09/201715 units totalling 142,732 sq. ft.
WitneyWitney Industrial EstateFreehold mutli-let industrial/trade counter estate constructed Various £327,781 07/2018in early 1980s and refurbished in 2005. Total floor area of 46,806 sq. ft. across 11 units.
Wokingham Ashville Park, Molly Millars Lane Freehold estate of five business units arranged a four detached Various £473,256 N/Abuildings, one divided to create two units. The property totals 80,381 sq. ft.
33
Threadneedle Property Unit Trust
Witney
Witney Industrial Estate
South Normanton
Units 1 & 2 Fulwood 28
Industrial(continued)
34
Threadneedle Property Unit Trust
Retail Warehouses
Between £1 million and Principal Rental Income Next Rent £2.5 million in Value Tenants per annum Review
SwanseaB&Q Gorseinon RoadFreehold retail warehouse and garden centre B&Q Plc £139,000 06/2019totalling 26,262 sq. ft. with 91 car parking spaces.
Between £2.5 million and Principal Rental Income Next Rent£5 million in Value Tenants per annum Review
BridlingtonBessingby RoadFreehold retail warehouse totalling 28,041 sq. ft. B&Q Plc £332,750 06/2017with adjoining garden centre and parking forapproximately 130 cars.
CannockWickes Unit, Litchfield RoadFreehold solus retail warehouse unit totalling 26,040 sq. ft. Wickes Building Supplies Ltd £310,000 12/2025with 124 car parking spaces.
CannockThe Chase CentreFreehold retail warehouse park totalling 27,664 sq. ft. with Various £318,551 05/2018adjoining garden centre.
CarmarthenEx Focus Unit, Stephens WayFreehold retail warehouse totalling 30,693 sq. ft. with Cemex Investments Ltd £312,850 N/Aadjoining garden centre and parking forapproximately 158 cars.
CreweVernon Way Retail Park.Freehold. Two detached retail warehouse units one of which Various £396,626 09/2018has been sold off on a long leasehold together with a cleared site and former cinema building. The site totals 5.4 acres and units totaling 57,413 sq. ft.
LincolnLincoln West Retail ParkFreehold terrace of three retail warehouse units totalling Various £371,950 02/201948,625 sq. ft. with 137 car parking spaces.
March Meadowlands Retail ParkFreehold retail warehouse park comprising a terrace of Various £308,099 03/2018four units and one stand-alone unit totalling 31,208 sq. ft.
PrestonUnits 2-8, Ribbleton LaneFreehold retail warehouses originally constructed as six units Various £101,535 09/2018and converted to provide two retail warehouses and one trade counter unit, totalling 48,245 sq. ft.
StirlingWickes Unit, Springkerse Industrial EstateFreehold standalone retail warehouse constructed in 1996. Wickes Building Supplies Ltd £406,125 N/ATotal floor area is 28,474 sq. ft. with 132 car parking spaces and service yard to the rear.
Stockton-upon-TeesWickes, Portrack LaneLong leasehold retail warehouse totalling 30,191 sq. ft., Wickes Building Supplies Ltd £320,000 12/2017with 169 car spaces.
35
Threadneedle Property Unit Trust
Principal Rental Income Next Rent Over £5 million in Value Tenants per annum Review
Birmingham Heybarnes Retail Park Freehold purpose built terrace of three units together with a Various £777,534 09/2017newly constructed restaurant unit, totalling 35,291 sq. ft. with142 car parking spaces.
BostonWest Street Retail ParkFreehold retail park of two units together with an office Various £376,294 12/2018suite, totalling 30,589 sq. ft. with 92 car parking spaces.
BristolChannons Hill Retail ParkFreehold retail park arranged in three blocks. Various £672,600 08/2017The property totals 61,428 sq. ft. with 254 car parking spaces.
CardiffNewport RoadFreehold terrace of three retail warehouse units Various £1,003,613 07/2018totalling 55,315 sq. ft. together with 206 car parking spaces.
CarmarthenTowy Retail ParkFreehold detached retail warehouse development with Various £476,501 12/2018two units, parking and service yard, totalling 35,000 sq. ft.
ExeterHomebase, Moor Lane, Sowton Industrial EstateFreehold retail warehouse, totalling 35,949 sq. ft., Homebase Ltd £598,250 N/Awith 171 car parking spaces.
GlasgowAnniesland Retail ParkFreehold retail park comprising three adjoining units, Various £674,425 08/2019developed in 1994, totalling 37,368 sq. ft.
GloucesterEastern Avenue Retail ParkFreehold retail park of six units constructed in 2003, Various £1,014,409 06/2018totalling 65,572 sq. ft.
Retail Warehouses(continued)
Carmarthen
Towy Retail Park
36
Threadneedle Property Unit Trust
Retail Warehouses(continued)
Principal Rental Income Next Rent Over £5 million in Value Tenants per annum Review
IpswichOrwell Retail ParkFreehold stand-alone retail warehouse unit Matalan Retail Ltd £456,134 N/Atotalling 29,469 sq. ft. with 102 car parking spaces.
LeytonB&Q Haybridge WayFreehold solus detached retail warehouse unit of steel B&Q Plc £376,700 04/2021portal frame construction built in the late 1980s,totalling 33,842 sq. ft.
Paignton215 Brixham RoadFreehold retail warehouse unit and car parking ASDA Stores Ltd £420,000 N/Aundergoing conversion to a supermarket unit,totalling 23,815 sq. ft.
SelbyThree Lakes Retail ParkFreehold retail warehouse park comprising 10 units, Various £1,402,659 04/2018totalling 104,665 sq. ft.
StockportDidsbury RoadFreehold two unit retail warehouse scheme totalling Various £505,500 07/201730,020 sq.ft with 149 car parking spaces.
TrowbridgeTrowbridge & Spitfire Retail ParksFreehold retail warehouse park of two amalgamated schemes Various £1,065,857 04/2021with nine retail units and two fast food pods totalling 126,752 sq. ft.
TruroNewquay Road Retail ParkFreehold modern purpose built retail park. Various £712,113 08/2023The property totals 72,645 sq. ft.
WhitehavenBridges Retail ParkFreehold retail warehouse park of five terraced units and Various £347,000 07/2019a separate drive through restaurant unit, totalling 43,251 sq. ft.,with 212 car parking spaces.
WorthingPages Corner Retail ParkFreehold two retail warehouses refurbished and Various £589,710 01/2020sub-divided in 1997, totalling 38,132 sq. ft. with161 car parking spaces.
YorkFoss Island Retail Park Freehold retail warehouse park of five units, Various £1,606,254 05/2018totalling 87,409 sq. ft. with 212 car parking spaces.
Trowbridge
Trowbridge & Spitfire Retail Parks
37
Threadneedle Property Unit Trust
York
Foss Island Retail Park (page 36)
Car Showrooms
Leisure
Between £2.5 and Principal Rental Income Next Rent £5 million in Value Tenants per annum Review
SunderlandLow RoadFreehold purpose built 60 bed hotel built circa 2002 Various £257,800 04/2022together with two public houses trading at groundand first floors. The property totals 41,711 sq. ft.
WolverhamptonAir Space, Well LaneFreehold detached trampoline centre with ancillary offices Adventure Forest Ltd £310,000 08/2020totalling 51,934 sq. ft.
Between £2.5 and Principal Rental Income Next Rent £5 million in Value Tenants per annum Review
BedfordAmpthill RoadFreehold car showroom, totalling 23,843 sq. ft. Cruickshank Motors Ltd £271,536 06/2017
Principal Rental Income Next Rent Over £5 million in Value Tenants per annum Review
AylesburyThe ExchangeLong leasehold for a term of 150 years from 7/1998, Various £746,416 11/2018a town centre dominant leisure scheme built in 2000comprising a six screen cinema, a parade of four restaurants and a gym, in all totalling 64,711 sq. ft.
Coventry Skydome, Croft RoadCity centre purpose built leisure scheme completed Various £1,771,838 08/2017in 2000 extending to approximately 161,900 sq. ft.in two buildings with 779 car parking spaces.
38
Threadneedle Property Unit Trust
Bristol Portfolio
Principal Rental Income Next Rent Less than £1 million in Value Tenants per annum Review
Bristol75 Queens RoadFreehold terraced building comprising ground floor retail Various £51,096 N/Aunit with ancillary basement accommodation. Studentaccommodation to first, second and third floors.The property totals 2,619 sq. ft.
Bristol97 Gloucester RoadFreehold three storey property comprising ground floor Various £32,287 N/Acafe with self-contained maisonette on upper floors. Commercial accommodation totalling 1,178 sq. ft.
Bristol11-13 Gloucester RoadFreehold mid terrace property comprising three Various £54,846 12/2018adjoining three-storey period buildings, each with ground floor retail unit and two maisonettes above.The property totals 4,523 sq. ft.
Bristol18 Portland StreetFreehold mid-terrace property comprising ground floor Various £62,322 02/2021retail unit with ancillary storage to basement andfirst floor. Three self-contained flats above.Commercial accommodation totalling 1,925 sq. ft.
Bristol39 Park StreetFreehold mid-terrace property comprising retail unit Various £73,096 01/2020arranged on basement, ground and two upper floors. Self-contained maisonette to upper floors. Commercial accommodation totalling 2,793 sq. ft.
Bristol2 Zetland RoadFreehold two storey property comprising ground floor retail The Carphone Warehouse Ltd £21,000 N/Aunit with residential accommodation to upper floors. Upper floors sold on long leases at peppercorn rent. The property totals 1,156 sq. ft.
Bristol38 Park StreetFreehold four-storey mid-terrace property, comprising retail Various £58,185 N/Aunit on ground and lower ground floors with self-contained flat above. The property totals 2,976 sq. ft.
Bristol1 Park Street AvenueFreehold mid-terrace property arranged as bar and nightclub The Woods Trading Ltd £33,500 05/2022on basement, ground and first floors. The property totals 1,021 sq. ft.
Bristol1-3 Gloucester RoadFreehold three storey property comprising ground floor Maplin Electronics Ltd £71,400 N/Aretail unit. Upper floors comprise residential accommodation sold on long leases at peppercorn rent. Commercial accommodation totalling 5,923 sq. ft.
Bristol55 Park StreetFreehold mid-terrace three-storey property comprising retail Noman Turan £50,000 09/2019unit to ground floor with two flats above. The property totals 2,949 sq. ft.
Bristol73 Queens Road Freehold four-storey mid-terrace property comprising ground Various £64,346 N/Afloor retail unit with basement storage. Maisonette above. The property totals 2,616 sq. ft.
39
Threadneedle Property Unit Trust
Between £1 million and Principal Rental Income Next Rent £2.5 million in Value Tenants per annum Review
Bristol37-39 Baldwin StreetFreehold five-storey property comprising two ground floor Various £109,037 11/2020retail kiosks. Nine residential units on upper floors. The property totals 4,910 sq. ft.
Bristol61-63 Queens RoadFreehold mid-terrace six-storey property comprising ground Various £109,653 07/2017floor retail unit and residential accommodation on upper floors. The property totals 6,965 sq. ft.
Bristol6-10 St Nicholas StreetFreehold terraced building comprising retail space on Various £98,950 08/2019ground floor with basement storage. Part of ground floor and basement also used as nightclub premises. Residential accommodation to first, second and third floors. Upper floor of No.12 held long leasehold. The property totals 9,555 sq. ft.
Bristol76-78 Whiteladies RoadTwo-adjoining five-storey buildings held freehold. Ground Various £127,014 03/2020floor retail unit with two blocks of residential accommodation above. Commercial accommodation totalling 4,629 sq. ft.
Bristol786 Fishponds RoadFreehold leisure property, totalling 4,187 sq. ft. Ground and Stonegate Pub Company Ltd £96,196 03/2019first floors comprise bar and ancillary accommodation. Flats on upper floors sold on long leases at peppercorn rent.
Bristol80-82 Whiteladies RoadFreehold five-storey mid-terrace property comprising Various £105,348 07/2021two-adjoining buildings. Ground floor retail unit with ancillarybasement accommodation. Residential accommodation above. Commercial accommodation totalling 2,966 sq. ft.
Bristol2-4 Gloucester RoadFreehold two-storey property comprising a ground floor Various £102,022 08/2020supermarket unit and a restaurant unit with ancillary first floor accommodation. The property totals 5,976 sq. ft.
Bristol Portfolio(continued)
40
Threadneedle Property Unit Trust
Between £1 million and Principal Rental Income Next Rent £2.5 million in Value Tenants per annum Review
Bristol127 Westbury RoadFreehold retail warehouse showroom units, arranged Majestic Wine Warehouses Ltd £70,000 05/2018over three floors, totalling 2,552 sq. ft.
Bristol14-24a Gloucester RoadFreehold parade of seven ground floor retail units, Various £125,000 07/2018totalling 3,972 sq. ft.
Bristol56-60 Whiteladies RoadTwo adjoining five-storey buildings held freehold. Various £130,176 12/2017Comprises ground floor retail unit with residential accommodation above. Commercial accommodation totalling 2,639 sq. ft.
Bristol35-37 Park StreetFreehold mid-terrace property comprising retail unit to Various £131,692 N/Aground floor and basement. Residential accommodation to first and second floor. The property totals 8,144 sq. ft.
Bristol
127 Westbury Road
Bristol Portfolio(continued)
41
Threadneedle Property Unit Trust
Under the terms of the Trust Deed, Threadneedle Investments
(Channel Islands) Limited (the “Manager”) is required to prepare
financial statements for each annual accounting period, which
give a true and fair view of the financial position of the Trust and
income and expenditure due to Unitholders for the year.
In preparing those financial statements, the Manager is required
to select suitable accounting policies and apply them consistently,
follow United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, comprising FRS 102 "The
Financial Reporting Standard applicable in the UK and Republic
of Ireland", and applicable law) and keep proper accounting
records which enable them to demonstrate that the financial
statements as prepared comply with the aforementioned
requirements.
The Manager is also required to prepare the financial statements
on the going concern basis unless it is inappropriate to presume
that the Trust will continue its business.
The Directors of the Manager confirm that they have complied
with the above requirements throughout the year and when
preparing the financial statements.
The Manager is responsible for the management and
administration of the underlying property of the Trust in
accordance with the Trust Deed. As far as the Manager is aware,
there is no relevant audit information of which the Trust’s auditors
are unaware. The Manager has taken appropriate steps to ensure
it is aware of such relevant information and the Trust’s auditors
are aware of such information.
RJS Prosser BSc FCA
Director
Threadneedle Investments (Channel Islands) Limited
14 June 2017
BNP Paribas Securities Services Trust Company Limited and BNP
Paribas Securities Services Trust Company (Jersey) Limited (the
“Trustees”) have a duty to take in to custody and hold the
underlying assets of the Trust for the Unitholders and to ensure
that in all material respects the Manager has managed the Trust
in accordance with the provisions of the Trust Deed, including
the preparation of the financial statements. The Trustees may
enquire into the conduct of the Manager in the management of
the Trust.
Report of the Trustees to the Unitholders of the Trust
The Trustees have enquired in to the conduct of the Directors of
the Manager of the Trust during the year to 31 March 2017.
In the Trustees’ opinion, the Directors of the Manager have
managed the Trust in accordance with the limitations imposed
on the investment and borrowing powers of the Trust by the Trust
Deed, the current Prospectus of the Trust and all Orders for the
time being in force under Article 10 of the Collective Investment
Funds (Jersey) Law, 1988.
BNP Paribas Securities Services Trust Company Limited &
BNP Paribas Securities Services Trust Company (Jersey) Limited
14 June 2017
Statement of the Manager’s Responsibilities in Respectof the Annual Report and Financial Statements of the Trust
Statement of the Trustees’ Responsibilities in Respect ofthe Trust
42
Threadneedle Property Unit Trust
Note £000s
Total income (including interest income) 71,208Expenditure (recoverable by deduction from Unitholders) Other expenditure (8,919)Tax withheld on distributions (1,461)
Net income 60,828
Appropriated as follows:
Distributed 20 July 2016 16 15,225Distributed 20 October 2016 16 15,550Distributed 20 January 2017 16 14,796Distributed 20 April 2017 17 15,217To be distributed in July 2017 17 40
Total distributions 60,828
By order of the Manager
RJS Prosser BSc FCA
Threadneedle Investments (Channel Islands) Limited
14 June 2017
Manager’s Report
The Manager presents the Financial Statements of the Trust for the year ended 31 March 2017. During the year, 295,309.707 units were
issued and 75,343.022 units were redeemed. There were 4,817,183.236 units in issue at 31 March 2017. The net effect of the above
transactions was an increase in the year in the number of units in issue by 219,966.685 units. The net asset value of the Trust as at
31 March 2017 was £1,360,629,047 (2016: £1,312,112,297). The gross income distributable, after expenses, amounted to £60,828,184
(2016: £62,521,105) equivalent to an average of £13.38 (2016: £14.30) per unit.
Differing levels of management charges are applicable dependent upon the type of Unitholder. The Trust utilises different unit classes to
denominate the appropriate management charge and therefore the distribution rates applicable (see note 9).These unit classes do not
affect the rights of the Unitholder or the capital value of the underlying investment.
A summary income and expenditure and distribution statement for the year ended 31 March 2017 is set out below:
43
Threadneedle Property Unit Trust
Report on the financial statementsOur opinion
In our opinion, Threadneedle Property Unit Trust’s (the "Trust's")financial statements (the “financial statements”):
n give a true and fair view of the state of the Trust’s affairs as at31 March 2017 and of its loss and cash flows for the year then ended;
n have been properly prepared in accordance with UnitedKingdom Accounting Standards comprising FRS 102 “TheFinancial Reporting Standard applicable in the UK andRepublic of Ireland”; and
n have been prepared in accordance with the requirements ofthe Trust Deed.
What we have audited
The financial statements, included within the Annual Report andFinancial Statements (the “Annual Report”) comprise:
n the Balance Sheet as at 31 March 2017;
n the Statement of Comprehensive Income for the year ended 31 March 2017;
n the Statement of Changes in Net Assets Attributable toUnitholders for the year ended 31 March 2017;
n the Statement of Cash Flows for the year ended 31 March 2017; and
n the notes to the financial statements, which include asummary of the significant accounting policies and otherexplanatory information.
The financial reporting framework that has been applied in thepreparation of the financial statements is United KingdomAccounting Standards, comprising FRS 102 “The FinancialReporting Standard applicable in the UK and Republic of Ireland”and applicable law.
In applying the financial reporting framework, the Manager andTrustees have made a number of subjective judgements, forexample in respect of significant accounting estimates. In makingsuch estimates, they have made assumptions and consideredfuture events.
Opinion on other matterIn our opinion, the information given in the Manager’s Report,the Statement of the Manager’s and Trustees’ Responsibilities forthe financial year for which the financial statements are preparedis consistent with the financial statements.
Responsibilities for the financial statementsand the auditOur responsibilities and those of the Manager and the Trustees
As explained more fully in the Statement of Manager’s and Trustees’Responsibilities set out on page 41, the Manager and Trustees areresponsible for the preparation of the financial statements and forbeing satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on thefinancial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland) (“ISAs (UK& Ireland)”). Those standards require us to comply with theAuditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinion, has been prepared for andonly for the Trust’s Unitholders as a body and for no otherpurpose. We do not, in giving this opinion, accept or assumeresponsibility for any other purpose or to any other person towhom this report is shown or into whose hands it may comesave where expressly agreed by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance ISAs (UK & Ireland). Anaudit involves obtaining evidence about the amounts anddisclosures in the financial statements sufficient to givereasonable assurance that the financial statements are free frommaterial misstatement, whether caused by fraud or error. Thisincludes an assessment of:
n whether the accounting policies are appropriate to the Trust’scircumstances and have been consistently applied andadequately disclosed;
n the reasonableness of significant accounting estimates madeby the Manager and Trustees; and
n the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing theManager’s and Trustees’ judgements against available evidence,forming our own judgements, and evaluating the disclosures inthe financial statements.
We test and examine information, using sampling and otherauditing techniques, to the extent we consider necessary toprovide a reasonable basis for us to draw conclusions. We obtainaudit evidence through testing the effectiveness of controls,substantive procedures or a combination of both.
In addition, we read all the financial and non-financialinformation in the Annual Report to identify materialinconsistencies with the audited financial statements and toidentify any information that is apparently materially incorrectbased on, or materially inconsistent with, the knowledgeacquired by us in the course of performing the audit. If webecome aware of any apparent material misstatements orinconsistencies we consider the implications for our report.
PricewaterhouseCoopers CI LLP
Chartered Accountants
37 Esplanade
St Helier
Jersey,
JE1 4XA
Channel Islands
14 June 2017
Independent Auditors’ Report to the Unitholders of Threadneedle Property Unit Trust
44
Threadneedle Property Unit Trust
Statement of Comprehensive Income for the Year Ended 31 March 2017
2017 2016Note £000s £000s
Property Income 6 88,271 86,085Net expense arising from investment in Threadneedle Opportunities Property Unit Trust – (20)Net income arising from investment in Low Carbon Workplace Trust 311 180
Gross income 88,582 86,245Property expenses 7 (17,542) (13,976)
Total income 71,040 72,269
Trust Level expenses:Management fees 9 (7,946) (7,678)Trustees’ fees 9 (276) (271)General expenses (271) (144)Audit fees (41) (35)Valuation fees (383) (405)
Total expenses (8,917) (8,533)
Interest income 11 168 228
Total interest income 168 228
Net (loss)/gain on investment properties 8a (18,214) 69,776
Net result/(loss) on Investment in Threadneedle Opportunities Property Unit Trust 8b – (49)
Net gain on investment in Threadneedle Low Carbon Workplace Trust 8c 728 2,080
Total comprehensive income before finance costs and taxation 44,805 135,771Finance costs – income distributions paid 16 (45,571) (46,021)Finance costs – income distributions payable 17 (15,257) (16,500)Tax withheld on distributions 5 (1,461) (1,443)
(Decrease)/Increase in net assets attributable to Unitholders (17,484) 71,807
Statement of Change in Net Assets Attributable to Unitholdersfor the Year Ended 31 March 2017
2017 2016Note £000s £000s
Opening net assets attributable to Unitholders at 1 April 2016 comprising 4,597,216.551 units (2016: 4,291,687.336 units) 1,312,112 1,150,972Issue of 295,309.707 units (2016: 318,922.294 units) 86,967 93,296Redemption of 75,343.022 units (2016: 13,393.079 units) (20,966) (3,963)
1,378,113 1,240,305(Decrease)/Increase in net assets attributable to Unitholders (17,484) 71,807
Closing net assets attributable to Unitholders at 31 March 2017 comprising 4,817,183.236 units (2016: 4,597,216.551 units) 18 1,360,629 1,312,112All amounts above are in respect of continuing operations.The notes and accounting policies on pages 47 to 55 form part of these financial statements.
45
Threadneedle Property Unit Trust
Balance Sheet as at 31 March 2017
2017 2016Note £000s £000s
Non-current assetsInvestment Properties 12Freehold 1,039,554 1,017,910Leasehold 191,430 173,325Mixed 10,916 10,840
1,241,900 1,202,075
Investment in Threadneedle Low Carbon Workplace Trust 8c 25,815 25,087Lease incentives receivable in more than one year 9,322 6,368
1,277,037 1,233,530
Current assetsDebtors 13 35,869 7,783Lease incentives receivable within one year 2,363 2,167Cash at bank 90,177 111,843
128,409 121,793
Creditors: amounts falling due within one yearIncome tax payable (372) (376)Creditors 14 (29,188) (26,336)Finance costs: amounts due to Unitholders 17 (15,257) (16,499)
(44,817) (43,211)
Net assets attributable to Unitholders 1,360,629 1,312,112The notes and accounting policies on pages 47 to 55 form part of these financial statements.
The financial statements were approved by the Manager on 14 June 2017 and signed on its behalf by:
RJS Prosser BSc FCA
Director
Threadneedle Investments (Channel Islands) Limited
14 June 2017
46
Threadneedle Property Unit Trust
Statement of Cash Flows for the Year Ended 31 March 2017
2017 2016Note £000s £000s £000s £000s
Net cash flow from operating activities 21 63,333 64,441
Net cash generated from operating activities 63,333 64,441
Cash flow from investing activitiesPurchases of investment property 12 (70,101) (88,096)Capital expenditure 12 (5,514) (11,135) Proceeds from sale of properties 8a 17,576 31,370 Capital return from Threadneedle Opportunities Property Trust 8b – 4,314Investment in Threadneedle Low CarbonWorkplace Trust 8c – (14,000) Interest received 11 168 228
Net cash used in investing activities (57,871) (77,319)
Cash flow from financing activitiesIncome distributions paid to Unitholders (62,071) (60,281)Taxation paid (1,464) (1,366)Issue of units 57,367 93,296Redemption of units (20,960) (3,951)
Net cash (used)/raised from financing activities (27,128) 27,698
Net (decrease)/increase in cash and cash equivalents (21,666) 14,820
Cash and cash equivalents at the beginning of the year 111,843 97,023
Cash and cash equivalents at the end of the year 90,177 111,843Cash and cash equivalents consist of:Cash at bank 90,177 111,843
Cash and cash equivalents 90,177 111,843The notes and accounting policies on pages 47 to 55 form part of these financial statements.
47
Threadneedle Property Unit Trust
Notes to the Financial Statements for the Year Ended 31 March 2017
1 General Information
The Trust is an unclassified open-ended Unit Trust originally
established under English law by a Trust Deed dated 15 June 1967
under the name Molins Property Unit Trust. The Trust subsequently
changed its name, first to Sackville Property Unit Trust and then to
Threadneedle Property Unit Trust, and is now governed by a
fourth amended and restated trust instrument under Jersey law
dated 4 December 2014 (as may be amended from time to time)
made between the Manager and the Trustees (the “Trust
Instrument”). The nature of the rights represented by Units in the
Trust is that of a beneficial interest under a trust. The Unitholders
have a right to the income of the Trust as and when it arises.
2 Statement of Compliance
The financial statements of Threadneedle Property Unit Trust
have been prepared in accordance with United Kingdom
Accounting Standards, including Financial Reporting
Standard 102, “The Financial Reporting Standard applicable in
the United Kingdom and the Republic of Ireland” (“FRS 102”) and
in accordance with the Trust Deed.
3 Summary of Significant Accounting Policies
The principle accounting policies applied in the preparation of
the financial statements are set out below. The Trust has adopted
FRS 102 in these financial statements. The principle accounting
policies which have been applied consistently throughout the
year are set out below.
Basis of preparation
These financial statements have been prepared on a going
concern basis in accordance with United Kingdom Accounting
Standards, including FRS 102, and the Trust Deed in accordance
with the historical cost convention as modified by the revaluation
of investment properties at fair value through profit or loss after
the deduction of unamortised lease incentives at the year end,
and by the valuation of financial assets and liabilities at fair value
through profit and loss, and as recommended by the Code of
Practice established by the Association of Real Estate Funds. The
form and content of the Annual Report and Financial Statements
follow, wherever possible, the form and content set out in the
Statement of Recommended Practice for Authorised Funds.
The preparation of financial statements in conformity with
FRS 102 requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the
process of applying the company’s accounting policies. The areas
involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial
statements are disclosed in Note 4.
Revenue recognition
Property income consists principally of rental income receivable
from tenants in the year and is recognised on an accruals basis.
Rental income received in advance is deferred and recognised
in the period to which it relates.
In accordance with the FRS 102, rental income from properties
which have been subject to a rent free period or inducement is
accounted for on a straight line basis over the period of the lease.
The valuation of investment properties is reduced by all
unamortised lease incentives.
The Trust has taken advantage of the exemption in respect of
lease incentives on leases in existence on the date of transition
to FRS 102 (1 April 2014) and continue to recognise such lease
incentives in the Statement of Comprehensive Income over the
shorter of the lease period or the period to when the rental was
set to a fair market rent.
Cost of sales
Expenditure is accounted for on an accruals basis.
Service charge revenue and service charge expenditure
attributable to tenants are accounted for within property income
and property expenses respectively and are recognised on an
accruals basis. Service charge void costs attributable to the Trust
are included in property expenses.
Administrative Expenses
Administrative expenses consist of costs associated with general
administration of the Trust and are recognised on an accruals basis.
Interest income
Interest income is recognised on an accruals basis.
Taxation
The Trustees are not resident in the UK for capital gains tax
purposes. The Trust is outside the scope of the UK capital gains tax
regime. The income of the Trust belongs directly to Unitholders
and is paid gross to Unitholders who are resident in the UK and
other persons who have received authority from HM Revenue &
Customs to receive rent gross. Tax is deducted at source (at the
basic rate, currently 20% (2016: 20%) from rental profit paid to
Unitholders who are not resident in the UK and who have not
received authority to receive rent gross. UK interest is paid net
of UK income tax at the lower rate unless it is received gross of
tax in which case it is paid gross to the Unitholders.
Exempt Unitholders are entitled to reclaim any income tax
deducted at source. Other Unitholders may reclaim income tax
deducted at source if and to the extent that it exceeds their UK tax
liability on income.
The Board of HM Revenue & Customs has certified the Trust as a
distributing fund for the purposes of Chapter V Part XVII of the
Income and Corporation Taxes Act 1988 in respect of all applicable
accounting periods up to 31 March 2010.The Manager does not
intend to seek Reporting Fund status for the Trust in respect of the
accounting period commencing on 1 April 2010 and any
subsequent accounting periods on the basis that the Trust is a
transparent fund within the meaning of Regulation 11 of Part One
of the Offshore Funds (Tax) Regulation 2009, the Trust will not
hold interests in non-reporting funds which amount in total to
more than 5% by value of its assets and the Trust makes sufficient
information available to Unitholders to enable them to meet their
UK tax obligations in respect of their units.
48
Threadneedle Property Unit Trust
Notes to the Financial Statements for the Year Ended 31 March 2017(continued)
Investment Property
Property that is held for long-term rental income or for capital
appreciation or both, and that is not occupied by the Trust, is
classified as investment property and accounted for in
accordance with FRS 102 Section 16.
Investment property is measured initially at cost, including
related transaction costs, on the date of acquisition or the date of
unconditional exchange, if earlier. After initial recognition,
investment property is carried at fair value, after the deduction of
unamortised lease incentives. Revaluation gains and losses are
recognised in the Statement of Comprehensive Income.
Valuations are performed by CBRE Limited and Jones Lang
LaSalle Limited (“JLL Limited”) who are professional, third party,
independent Chartered Surveyors, at the year end in accordance
with RICS Appraisal and Valuation Standards. Both valuers hold
recognised and relevant professional qualifications and have
recent experience in the location and category of the investment
property being valued. Fair value is based on active market
information, adjusted, if necessary, for any difference in the
nature, location or condition of the specific asset. If this
information is not available, alternative valuation methods are
used, such as recent prices of similar properties in less active
markets, with adjustments to reflect any changes in economic
conditions since the date of the transactions that occurred at
those prices, or discounted cash flow projections.
Disposals of investment property are recognised on legal
completion of contracts.
Investments
The interest of the Trust in its investment in Threadneedle Low
Carbon Workplace Trust (“LCWT”) is stated in the balance sheet
at fair value. Initial recognition is measured at cost, based upon
the cost of the original investment in LCWT on the date of
acquisition. Any subsequent investment or divestment is
measured at cost. After initial recognition, the Trust’s investment
in LCWT is carried at fair value with revaluation gains and losses
recognised in the Statement of Comprehensive Income.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held
at call with banks, other short-term highly liquid investments
with original maturities of three months or less. Bank overdrafts
are shown within current liabilities.
Distributions to Unitholders
With respect to distributions, all income is distributed to
Unitholders after expenses and payment of tax, where
applicable. Distributions are classified as finance costs and are
accounted for on an accruals basis.
Related party transactions
The Trust discloses transactions with related parties 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.
4 Critical Accounting Judgements and EstimationUncertainty
Critical accounting estimates and assumptions
Management makes estimates and assumptions concerning the
future based on historical experience and adjusted for current
market conditions and other factors. The estimates, assumptions
and management judgements that have a significant risk of
causing a material adjustment to the carrying amounts of assets
and liabilities are outlined below.
Investment Property
The principal assumptions underlying the estimation of fair value
of Investment Properties are those related to the receipt of
contractual rental, expected future market rentals, void periods
lease incentives, maintenance requirements and appropriate
yields/discount rates. These valuations are regularly compared
to actual market yield data and actual transactions by the Trust
and those reported by the market. The expected future market
rentals are determined on the basis of current market rentals for
similar properties in the same location and condition.
Investments
The principal assumptions underlying the estimation of fair value
of the Trust’s investment in LCWT are those related to the fair
value of investment properties held by LCWT. In LCWT,
valuations are performed by JLL Limited who are professional,
third party, independent Chartered Surveyors, at the year end in
accordance with RICS Appraisal and Valuation Standards.
Assumptions include the receipt of contractual rentals, expected
future market rentals, void periods, lease incentives,
maintenance requirements and appropriate yields/discount rates
and for development properties, an allowance for future
development expenditure and development management fees.
These valuations are regularly compared to actual market yield
data and those reported by the market. The expected future
market rentals are determined on the basis of current market
rentals for similar properties in the same location and condition.
5 Tax withheld on distributions
For the year to 31 March 2017, the Trustees withheld income tax
payments to Unitholders amounting to £1,460,812 (2016:
£1,443,181).
49
Threadneedle Property Unit Trust
6 Property Income
2017 2016£000s £000s
Rents receivable 78,993 77,851Service charge income 9,278 8,234
88,271 86,085
The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:
2017 2016£000s £000s
No later than 1 year 77,541 70,626Later than 1 year and no later than 5 years 322,481 192,126Later than 5 years 21,788 126,091
421,810 388,843
Contingent rents recognised as income were nil in the year (2016: nil).
The Trust leases out its investment property under operating leases to a variety of tenants and over varying periods.
7 Property Expenses
2017 2016£000s £000s
Service charge expense 9,278 8,234Ground rent payable 381 250Other property expenses 7,883 5,492
17,542 13,976
8a Net (Loss)/Gain on Investment Properties
2017 2016£000s £000s
Proceeds from sales of investment properties 17,576 31,859Original cost of investment properties sold (11,728) (14,311)
Historic cost gain on investment properties sold during the year 5,848 17,548Net gain thereon already recognised in prior periods (3,872) (5,947)
Overall gain realised on investment properties during the year 1,976 11,601Net unrealised (loss)/gain (17,041) 59,136Adjustment for value of lease incentives (3,149) (961)
Net (loss)/gain on investment properties (18,214) 69,776
8b Net Result/(Loss) on Investment in Threadneedle Opportunities Property Unit Trust
2017 2016£000s £000s
At valuation 1 April – 4,363Return of capital – (4,314)Movement in valuation – (49)
At 31 March – –
Threadneedle Opportunities Property Unit Trust terminated on 19th January 2016 with the Trust receiving its final distribution inNovember 2015.
8c Net Gain on Investment in Threadneedle Low Carbon Workplace Trust
2017 2016£000s £000s
At valuation 1 April 25,087 9,007Additions at cost – 14,000Movement in valuation 728 2,080
At 31 March 25,815 25,087
Notes to the Financial Statements for the Year Ended 31 March 2017(continued)
50
Threadneedle Property Unit Trust
9 Management and Trustees Fees
Threadneedle Investments (Channel Islands) Limited together
with BNP Paribas Securities Services Trust Company (Jersey)
Limited and BNP Paribas Securities Services Trust Company
Limited are regarded as the controlling parties by virtue of acting
in concert in respect of the operations of the Trust.
Amounts paid to or received from the controlling parties are
disclosed in the financial statements and detailed further within
this note.
Management Fees
For the year ended 31 March 2017, a total management fee of
£7,945,819 (2016: £7,677,968) including irrecoverable VAT of
£19,987 (2016: £29,091) was charged to the Trust. The increase in
the total management fee charged to expenses was the result of
an increase in the value of gross assets under management
during the year.
The Trust utilises differing levels of management charges. For
Unitholders categorised as charities, UK pension funds or other
UK tax exempt holders (Class A units), the fee is 0.68% per
annum on gross assets of the Trust up to £200 million. Upon the
gross assets rising above £200 million, the management charge
(in respect of the increment) reduces to 0.60% per annum. An
additional fee of 0.5% per annum on gross assets of the Trust is
added to UK tax exempt holders where trail commission is
charged (Class D units), i.e. 1.18% on gross assets up to
£200 million and 1.10% thereafter.
For Unitholders in all other categories, the charges will be
notified to applicants as they subscribe (during the year to
31 March 2017 the following fees applied: 0.75% without trail
commission for Unit Class B and 1.25% with trail commission for
Unit Class C).
Unit Classes E, F and G are not currently available to new
investors but they are subject to different management charges.
The Manager is responsible for settling all marketing costs
incurred in promoting the Trust and for any managing agents
fees other than those payable by tenants in respect of service
charges. Insurance commission of £270,142 (2016: £243,324) is
retained by the Trust. The Manager is entitled to retain all
management fees payable by tenants under service charges and
landlords licence fees for alterations, assignments and
sublettings.
For the year to 31 March 2017, the total management fees
including irrecoverable VAT for each unit class are detailed in the
table below:
Unit Class Total Management Fee in the Year £
Class A 6,589,900Class B 929,968Class C 4,109Class D 3,779Class E –Class F 240,473Class G 157,603Irrecoverable VAT 19,987
7,945,819
The amount due to the Manager at 31 March 2017 was
£1,678,212 (2016: £2,020,000).
For the year ended 31 March 2017, the Registrar charged a total
fee of £7,500 (2016: £7,500) payable quarterly. The amount due to
the Registrar at 31 March 2017 was £1,875 (2016: £1,875).
Trustees’ Fees
For the year ended 31 March 2017, the Trustees charged a total
fee of £275,623 (2016: £271,049). The amount due to the Trustees
at 31 March 2017 was £22,690 (2016: £111,736).
The Trustees are entitled to receive remuneration on such basis
as shall, from time to time, be agreed between the Manager and
the Trustees. The fees of the Trustees are calculated at 0.039%
per annum on the Trust’s net assets up to £50 million; 0.03%
per annum between £50 million and £250 million; 0.025% per
annum between £250 million and £750 million; 0.0125% between
£750 million and £1,000 million and 0.011% in excess of
£1,000 million, subject to a minimum annual fee of £50,000.
10 Employees and Directors
Employees
The number of persons working for the Trust during the year was
nil (2016: nil).
Directors
The number of directors working for the Trust during the year
was nil (2016: nil).
11 Interest Income
2017 2016£000s £000s
Bank interest received 168 228
168 228
Notes to the Financial Statements for the Year Ended 31 March 2017(continued)
51
Threadneedle Property Unit Trust
12 Investment PropertiesFreehold Leasehold Mixed Total
Cost £000s £000s £000s £000s
At 1 April 2016 938,407 160,138 14,019 1,112,564Additions 60,274 14,429 912 75,615Disposals (11,728) – – (11,728)
At 31 March 2017 986,953 174,567 14,931 1,176,451
Movement in valuationAt 1 April 2016 79,503 13,187 (3,179) 89,511Unrealised (loss)/gain during the year (20,143) 3,779 (677) (17,041) Adjustment for lease incentives (2,887) (103) (159) (3,149)Amount realised in respect of sold properties (3,872) – – (3,872)
At 31 March 2017 52,601 16,863 (4,015) 65,449
Investment properties at 31 March 2017 1,039,554 191,430 10,916 1,241,900
Valuation by CBRE Limited and JLL Limited, Chartered Surveyors at fair value at 31 March 2017 1,050,350 192,155 11,080 1,253,585
The valuation at 31 March 2017 is calculated after deducting the value of lease incentives receivable amounting to £11,684,508
(2016: £8,535,326). The value of lease incentives receivable is shown in the Balance Sheet and consists of non-current assets of
£9,321,075 (2016: £6,368,336) and current assets of £2,363,433 (2016: £2,166,990).
13 Debtors2017 2016£000s £000s
Tenant deposits received 3,312 3,947Trade debtors 1,893 2,433Other debtors 1,064 1,403Unit subscription money outstanding 29,600 –
35,869 7,783
Trade debtors primarily relate to rent and service charges due as at 31 March 2016.
14 Creditors2017 2016£000s £000s
Deferred income 14,803 14,080VAT payable 1,882 1,154Trade creditors 6,185 4,884Management fee payable 1,678 2,020Other creditors 1,288 216Unit redemptions money owed 40 35Tenant deposits payable 3,312 3,947
29,188 26,336
15 Financial Instruments
In pursuing its investment objectives, the Trust creates its own financial instruments and invests in a number of financial instruments.These comprise:
– Instruments of the Trust:
– Units
– Instruments invested in by the Trust:
– Cash, other liquid resources, derivative financialinstruments and short-term debtors and creditors thatarise from its operations
– Jersey Property Unit Trusts
The Trust has not used derivatives or interest bearinginstruments during the financial year.
The main risks arising from the Trust’s own financial instrumentsand instruments in which it invests are market risk, price risk,cash flow risk, credit risk, interest rate risk and liquidity risk.
Market RiskMarket risk is the risk that the fair value or future cash flows of afinancial instrument will fluctuate because of changes in marketprices. The Trust’s market risks arise from open positions ininterest bearing assets, to the extent that these are exposed togeneral and specific market movements. Management sets limitson the exposure to interest rate risk, that may be accepted, whichare monitored on a monthly basis. However, the use of thisapproach does not prevent losses outside of these limits in theevent of more significant market movements.
Notes to the Financial Statements for the Year Ended 31 March 2017(continued)
52
Threadneedle Property Unit Trust
Sensitivities to market risks included below are based on change
in one factor while holding all other factors constant. In practice,
this is unlikely to occur and changes in some of the factors may
be correlated.
Price RiskPrice risk is the risk that the Trust’s financial position andperformance will be affected by a change of market prices.
The Trust’s performance is determined by:
i) The eventual selling price of the investment properties held.
As a consequence, it participates in the deficit when property
values fall;
ii) The rental income obtainable from the directly held properties
during the period they are held. The risk arises when there are
adverse movements in the property rental market.
In order to mitigate the risk, the Trust had regard to the market
price risk associated with particular industry and geographical
sectors in formulation of its investment strategy.
Cash Flow Risk
Cash flow risk is the risk stemming from the lack of marketability
of an investment.
The Trust’s liquidity can be impacted by the following:
i) The Trust’s assets, comprising mainly of its direct investment
in property, may not be readily saleable;
ii) Decline in the rental market can lead to uncertainty of income
received from the property assets held by the Trust.
The Manager actively monitors its liquidity and cash flow
position to ensure it has sufficient finance in order to fund its
activities.
Credit Risk
Credit risk is the risk that one party to a financial instrument will
cause a financial loss for the other party by failing to discharge
an obligation. Credit risk arises from cash and cash equivalents
held at banks and trade receivables, including rental receivables
from lessees and derivatives.
Such risks are subject to a quarterly or more frequent review. In
order to mitigate this risk, the Manager performs credit checks on
potential customers before lease contracts are undertaken. Any
overdue debts are chased on a regular basis.
Cash balances by the Trust are agreed only with financial
institutions with a Moody’s credit rating of Baa3 or better. The
Trust limits the amount of credit exposure to any financial
institution.
As at 31 March 2017 The Trust held Money Market Deposits with
the following financial institutions:
Entity Balance Moody’s Rating
BNP Paribas S.A. Jersey Branch 24,500,000.00 A1
Lloyds Bank plc, Jersey 31,500,000.00 Baa1
56,000,000.00
Revenues are derived from a large number of tenants and no
single tenant or group under common control contributes more
than 3.1% (2016: 3.1%) of the Trust’s revenues.
As at 31 March 2017, £2,205,725 (2016: £2,660,819) trade
receivable consisted of £326,805 (2016: £266,271) bad debt
provision. All amounts are over 180 days old and impaired.
Interest Rate Risk
Interest rate risk arises due to changes in interest rates. The Trust
holds no interest bearing instruments and no long-term deposits
at the year end and is therefore not subject to significant interest
rate risk.
Fair Value Estimation
At 31 March 2016 and 31 March 2017, the only financial
instrument that required fair value estimation was the Trust’s
investment in LCWT.
Liquidity Risk
The amounts disclosed in the table below are the contractual
undiscounted cash flows. Undiscounted cash flows in respect of
balances due within 12 months generally equal their carrying
amounts in the statement of financial position, as the impact of
discounting is not significant.
Notes to the Financial Statements for the Year Ended 31 March 2017(continued)
53
Threadneedle Property Unit Trust
The maturity analysis of financial instruments as at 31 March 2017 is as follows:
Demand Fromwithin 12 months From 2 to Later than
12 months to 2 years 5 years 5 years Total£000s £000s £000s £000s £000s
AssetsInvestments in Trusts 9,293 – 16,523 – 25,816Cash and cash equivalents 119,776 – – – 119,776Trade debtors 1,893 – – – 1,893Other debtors 4,376 – – – 4,376
LiabilitiesDeferred income 14,803 – – – 14,803Trade creditors 6,185 – – – 6,185Management fee payable 1,678 – – – 1,678Other creditors 6,482 – – – 6,482Amounts due to Unitholders 15,297 – – – 15,297
The maturity analysis of financial instruments as at 31 March 2016 is as follows:
Demand Fromwithin 12 months From 2 to Later than
12 months to 2 years 5 years 5 years Total£000s £000s £000s £000s £000s
AssetsInvestments in Trusts – – 25,087 – 25,087Cash and cash equivalents 111,843 – – – 111,843Trade debtors 2,433 – – – 2,433Other debtors 5,350 – – – 5,350
LiabilitiesDeferred income 14,080 – – – 14,080Trade creditors 4,884 – – – 4,884Management fee payable 2,020 – – – 2,020Other creditors 5,352 – – – 5,352Amounts due to Unitholders 16,536 – – – 16,536
Notes to the Financial Statements for the Year Ended 31 March 2017(continued)
16 Finance Costs – Income Distributions Paid
The Trust’s income belongs to Unitholders and income is allocated
monthly up to, but not including the Pricing Day (usually the last
business day in the month). All Unitholders subscribing to the Trust
on a Pricing Day receive income accruing with effect from that day.
Distributions of income to Unitholders are paid one quarter in
arrears, as soon as is practical following the last days of March,
June, September and December. Under the terms of the Trust Deed,
Unitholders bear certain expenses (including the management
charge) and these are deducted from distributions of income.
The final Pricing Day within the previous year was 31 March 2016.
Income accruing for 31 March 2016 was allocated to all Unitholders
who held units on that day. This income was allocated to
Unitholders as part of the monthly allocation in April 2016.
The distribution of this income was made in July 2016. Accordingly,
this income relating to the previous year has been removed from
the reported quarterly distribution in July 2016.
The final Pricing Day within the year ended 31 March 2017 was
31March 2017. Income accruing for 31 March 2017 was allocated to
Unitholders who held units on 31 March 2017. This income was
allocated to Unitholders as part of the monthly allocation in
April 2017. The distribution of this income will be made in July 2017.
54
Threadneedle Property Unit Trust
During the year ending 31 March 2017, three income distributions, relating to net income generated during the year, were paid to
Unitholders.
Total£000s
Distributed 20 July 2016 15,225Distributed 20 October 2016 15,550Distributed 20 January 2017 14,796
Total distributions 45,571
17 Finance Costs – Income Distributions Payable
As stated in Note 16, the Trust’s income belongs to Unitholders and Distributions of income are made one quarter in arrears, being paid
as soon as is practical following the last days of March, June, September and December.
The following table gives a breakdown of distributions payable as at the end of the two years:
Year end Period to which distributions Pay date Totalrelate £000s
31 March 2017 31 December 2016 to 30 March 2017 20 April 2017 15,21731 March 2017 31 March 2017 to 31 March 2017 (one day) 20 July 2017 40
15,257
31 March 2016 31 December 2015 to 30 March 2016 21 April 2016 16,36531 March 2016 31 March 2016 to 31 March 2016 (one day) 20 July 2016 134
16,499
18 Units in Issue
As at 31 March 2017, there were a total of 4,817,183.236 units in issue. These comprised: 4,020,514.005 Class A units, 417,726.003 Class B
units, 369.624 Class C units, 1,121.694 Class D units, nil Class E units, 284,514.632 Class F units, 92,937.278 Class G units.
Unit Class Number of Units Number of Units Number of Units Number of Units Number of Unitsin issue as at issued during redeemed transferred in issue as at31 March 2016 the year during the year during the year 31 March 2017
Class A 3,723,638.811 273,638.475 (61,153.792) 84,390.511 4,020,514.005Class B 492,426.991 19,734.734 (14,189.231) (80,246.491) 417,726.003Class C 2,269.090 3.534 – (1,903.000) 369.624Class D 1,467.394 30.728 – (376.428) 1,121.694Class E – – – – –Class F 312,641.679 – – (28,127.047) 284,514.632Class G 64,772.586 1,902.237 – 26,262.455 92,937.278
4,597,216.551 295,309.708 (75,343.023) – 4,817,183.236
19 Capital Commitments and Contingent Liabilities
There were contractual capital commitments of £10,523,762 (2016: £5,728,959) at the balance sheet date which had not been accounted
for in the financial statements.There were no contingent liabilities at the year end.
20 Finance Costs: Distributions Per Unit*
Period to Quarter to Quarter to Quarter to Period to Total29 June 2016 29 September 2016 30 December 2016 30 March 2017 31 March 2017 2017
£ £ £ £ £ £
Gross amount 3.83 3.91 3.70 3.78 0.02 15.24Income tax deducted (0.76) (0.78) (0.74) (0.75) (0.00) (3.03)
Net income 3.07 3.13 2.96 3.03 0.02 12.21Expenses (0.46) (0.48) (0.45) (0.46) (0.01) (1.86)
Net amount distributable 2.61 2.65 2.51 2.57 0.01 10.35
Gross return assuming prevailing rate of tax at date of distribution 3.37 3.43 3.25 3.32 0.01 13.38*Income is allocated monthly but paid quarterly. Monthly income accrues up to and including the day prior to the Pricing Day (being the last business day in the month). Thus,distributions paid for the quarter to 29 June 2016 included one day’s income for 31 March 2016. The table details distributions accrued per unit and consequently, this one day’sincome has been deducted from the figures.
Notes to the Financial Statements for the Year Ended 31 March 2017(continued)
55
Threadneedle Property Unit Trust
Different investors are subject to a different management fee (see
note 9). Thus distributions are subject to the deduction of different
levels of expenses. The distribution rates shown are average
distributions taking a weighted average management fee.
Different investors are also paid distributions gross or net of tax
based upon their individual circumstances (see note 3). The table
details those distributions paid net of tax although the gross return
gives an equivalent amount payable to Unitholders who receive
their income gross of tax.
This distribution is not in the form of a dividend.
Notes to the Financial Statements for the Year Ended 31 March 2017(continued)
22 Post Balance Sheet Events
There have been no material post balance sheet events which would provide additional evidence relating to conditions that existed
at the balance sheet date, or events indicating that it is not appropriate to apply the going concern basis of accounting.
21 Notes to the Statement of Cash Flows
2017 2016£000s £000s
Total comprehensive income for the financial year before finance costs and taxation 44,805 135,771Net loss/(gain) on investment properties/investments 17,484 (71,807)Net interest income (168) (228)Lease incentives (3,149) (961)
Operating profit 58,972 62,775
Working capital movements:– (Increase)/Decrease in debtors 1,513 (2,223)– Increase in creditors 2,848 3,889
Net cash flow from operating activities 63,333 64,441
56
Threadneedle Property Unit Trust
The Trust is a member of the Association of Real Estate Funds “AREF”. Further information regarding AREF and Threadneedle PropertyUnit Trust can be found at www.AREF.org.uk
The additional information provided in this section complies, where applicable, with the minimum and best practice guidelines asoutlined in the Code of Practice (version March 2017) as issued by the Association of Real Estate Funds.
Net Asset Value*Over the last five years as at: Net asset value of Net asset value
the Trust (£) per unit (£)
31 March 2017 1,360,629,047 282.4631 March 2016 1,312,112,297 285.4131 March 2015 1,150,971,954 268.1931 March 2014 929,293,513 241.6431 March 2013 798,346,014 230.87
The offer and bid prices quoted below are not affected by the Unit Classes described in note 8.
Offer and Bid** PriceBetween March 2016 and March 2017
March 2017 (£) March 2016 (£) Decrease (£) Decrease (%)
Offer price 298.97 303.13 4.16 1.4Bid** price 278.89 281.46 2.57 0.9
Offer Price RangeOver the last 5 years for the period ending: Highest offer (£) Lowest offer (£) Range (%)
31 March 2017 304.75 294.24 3.331 March 2016 303.13 284.86 6.031 March 2015 282.78 256.79 9.231 March 2014 255.17 242.48 5.031 March 2013 251.97 242.24 3.9
Bid** Price RangeOver the last 5 years for the period ending: Highest bid** (£) Lowest bid** (£) Range (%)
31 March 2017 282.96 274.10 3.131 March 2016 282.79 266.50 5.831 March 2015 264.55 240.24 9.231 March 2014 238.73 226.85 5.031 March 2013 235.73 226.62 3.9* The Net Asset Value of the Trust and the Net Asset Value per unit quoted in this table are based upon balance sheet valuations, rather than unit price valuations.** The “scaled exit cost” basis for redemptions of units allows Unitholders to achieve between 1.3% below net asset value and 6.3% above net asset value per unit upon redemption,dependent upon investor inflows and outflows in that month. The bid prices quoted in the table are based upon Unitholders achieving the minimum price (1.3% below net assetvalue per unit) and do not necessarily reflect the realisation prices that may have been obtained in practice.
Additional Information (Unaudited)
57
Threadneedle Property Unit Trust
Finance Costs: Distributions per Unit*Over the last 5 years Unit Class Opening Closing Distribution Yield on Yield onfor the period ending: Offer Offer Accrued closing closing
price £ price £ £ NAV Offerprice % price %
31 March 2017 A 303.13 298.97 13.35 4.7 4.5B 303.13 298.97 12.96 4.6 4.3C 303.13 298.97 11.55 4.1 3.9D 303.13 298.97 11.94 4.2 4.0E 303.13 298.97 – – –F 303.13 298.97 14.28 5.1 4.8G 303.13 298.97 13.53 4.8 4.5Average 303.13 298.97 13.38 4.7 4.5
31 March 2016 A 282.78 303.13 14.26 5.0 4.7B 282.78 303.13 13.87 4.9 4.6C 282.78 303.13 12.47 4.4 4.1D 282.78 303.13 12.86 4.5 4.2E 282.78 303.13 9.27 3.3 3.1F 282.78 303.13 14.95 5.2 4.9G 282.78 303.13 14.44 5.1 4.8Average 282.78 303.13 14.30 5.0 4.7
31 March 2015 A 255.17 282.78 13.97 5.2 4.9B 255.17 282.78 13.62 5.1 4.8C 255.17 282.78 12.33 4.6 4.4D 255.17 282.78 12.68 4.7 4.5E 255.17 282.78 15.51 5.8 5.5F 255.17 282.78 14.67 5.5 5.2G 255.17 282.78 14.13 5.3 5.0Average 255.17 282.78 14.01 5.2 4.9
31 March 2014 A 242.87 255.17 14.22 5.9 5.6B 242.87 255.17 13.92 5.8 5.5C 242.87 255.17 12.75 5.3 5.0D 242.87 255.17 13.06 5.4 5.1E 242.87 255.17 15.65 6.5 6.1F 242.87 255.17 15.45 6.4 6.1G 242.87 255.17 14.38 5.9 5.6Average 242.87 255.17 14.28 5.9 5.6
31 March 2013 A 252.64 242.87 14.31 6.2 5.9B 252.64 242.87 14.04 6.1 5.8C 252.64 242.87 12.83 5.6 5.3D 252.64 242.87 13.13 5.7 5.4E 252.64 242.87 15.74 6.8 6.5F 252.64 242.87 15.74 6.8 6.5G 252.64 242.87 14.33 6.2 5.9Average 252.64 242.87 14.28 6.2 5.9
*Different management fees were applicable to different investors (see note 8) causing differing levels of distributions to accrue to Unitholders. The table above gives both anaverage distribution accrued; based upon a weighted average management fee, together with a breakdown of the actual distributions paid per Unit Class.
Class G units came into existence 31 December 2010 and Class F units came into existence 28 August 2009.
Additional Information (Unaudited)(continued)
58
Threadneedle Property Unit Trust
Number of Units in IssueOver the last 5 years as at: Unit Class Number of
units in issue
31 March 2017 A 4,020,514.005B 417,726.003C 369.624D 1,121.694E –F 284,514.632G 92,937.278
4,817,183.236
31 March 2016 A 3,723,638.811B 492,426.991C 2,269.090D 1,467.394E –F 312,641.679G 64,772.586
4,597,216.551
31 March 2015 A 3,643,359.242B 319,977.209C 2,265.436D 1,435.749E 72,307.731F 222,556.192G 29,785.777
4,291,687.336
31 March 2014 A 3,281,139.951B 235,609.653C 2,297.981D 2,101.107E 72,307.731F 222,556.192G 29,785.777
3,845,798.392
31 March 2013 A 3,116,914.658B 160,194.160C 2,414.170D 2,129.461E 72,307.731F 75,234.272G 28,804.797
3,457,999.249
Annualised Unit Price Performance – NAV to NAV Basis (adjusted for net income)For the period Trust’s AREF/IPD PPFI All Balanced
Performance % Property Fund Index Weighted Average %
March 2017 3.8 3.73 Years to March 2017 (p.a.) 10.7 10.25 Years to March 2017 (p.a.) 9.2 8.510 Years to March 2017 (p.a.) 3.5 2.11 Year to March 2016 12.0 3.31 Year to March 2015 16.9 16.61 Year to March 2014 11.6 11.91 Year to March 2013 2.2 0.31 Year to March 2012 3.2 5.3
Additional Information (Unaudited)(continued)
59
Threadneedle Property Unit Trust
Unit Turnover (all classes)For the year ending Number of Net asset Percentage of Percentage of31 March 2017 Units value of Units total net asset total net asset
as at year end value of the value of the(£) Trust as at Trust as at
start of year (%) year end (%)
Unit creations 295,309.707 83,413,180 6.4 6.1Unit redemptions 75,343.022 21,281,390 1.6 1.6
Unit AnalysisAs at 31 March 2017 ownership band Number of Unitholders Total % held
Less than 1% of Units in issue 172 22.741% or greater but less than 2% 24 34.582% or greater but less than 4% 8 22.334% or greater but less than 8% 4 20.35Greater than 8% (6.80% being the largest holding) – –
Total 208 100.00
Total number of Units in issue 4,817,183.236
Internal Investors 5.91External Investors 94.09
100.00
%
Largest Investor 5.91Largest 3 Investors 16.30Largest 5 Investors 24.32Largest 10 Investors 38.19
Total Expense Ratios (AREF basis)at 31 March 2017
Average Net Assets (NAV) £1,314,692,817
% of NAVper annum
Fund Management Fees 0.59Fund Operating Expenses 0.08Total Expense Ratio (TER) 0.67Property Expense Ratio (PER) (excludes items in TER) 0.65Real Estate Expense Ratio (REER) (TER + PER) 1.32Performance fees 0.00
Portfolio Turnover Ratioat 31 March 2017
Average Net Assets (NAV) £1,314,692,817
% of NAVper annum
Portfolio Turnover Ratio 0.41Transaction Costs £4,349,866
Additional Information (Unaudited)(continued)
60
Threadneedle Property Unit Trust
Threadneedle Property Unit Trust is an open-ended collectiveinvestment scheme that provides an opportunity for investors tohave an indirect investment exposure to a diversified portfolioof property assets in the United Kingdom.
The Trust is constituted by a Trust Deed dated 15 June 1967 (assubsequently amended and restated). Investment in the Trust isopen to pension funds, insurance companies and othercorporate and institutional investors. Units may also be issued towealthy individuals whom the Manager considers haveappropriate experience to invest.
Management of the TrustBNP Paribas Securities Services Trust Company (Jersey) Limitedand BNP Paribas Securities Services Trust Company Limited asTrustees and Custodian receive subscriptions for units and holdthe underlying investments and other assets of the Trust.Threadneedle Investments (Channel Islands) Limited, asManager, is responsible for the overall management of the Trust,including investment strategy, management of the propertyportfolio, issue of new units and preparation of financialstatements for distribution to investors. The Manager meets notless than once every quarter to monitor investment policy anddiscuss progress of the Trust.
AIFMD Remuneration Disclosures 2016-17 (unaudited)This disclosure is made in respect of the remuneration policy ofThreadneedle Asset Management Sárl (“TAM Sárl” or “theGroup”), as it applies to Threadneedle Investments (ChannelIslands) Limited (“the Manager”) in respect of the AlternativeInvestment Fund Managers’’ Directive (“AIFMD”) and the FCA’sassociated SYSC 19B requirements. The Remuneration Policyapplies to all its subsidiary entities, including those authorised asAIFMs under AIFMD, and was last approved by theRemuneration Committee in December 2016. The remunerationrequirements under AIFMD were applied from 1 January 2015,2015 being the first full performance year commencing after theManager’s authorisation as an AIFM.
1. The Remuneration Committee
The Remuneration Committee of TAM Sárl is a sub-committee
of the TAM Sárl Board with the responsibility to establish the
philosophy and objectives that will govern the Group’s
compensation and benefit programmes; review and approve
compensation and benefit plans, policies, and practices; and
oversee and approve the Group’s remuneration. It has been
determined to be independent of the day-to-day executive
management of the Group, its Members being Directors of
the Group who are nominated by Ameriprise Financial, the
Group’s parent company.
Current Committee Members are Mr Walter Berman,
Mr John Junek and Mr Ted Truscott. Meetings are normally
held in January, March, June, September and December. The
Group’s Global Head, Reward acts as Secretary to the
Committee. The Committee may invite the attendance of any
Group employee or functional expert from the parent
company as deemed appropriate, to allow it to fulfil its
responsibilities including ensuring remuneration is
consistent with effective risk management and does not
encourage excessive risk taking.
2. Determining Incentive Remuneration Pools
The Manager made its annual Total Incentive Award decisions
from separate pools covering the Property business,
Distribution unit, Investments business and Support
functions, aggregated for governance and oversight at the
EMEA regional level. Those pools are determined at the final
discretion of the Remuneration Committee with reference to
four un-weighted factors being a ‘Top-Down’ assessment of
market practice, legal and regulatory requirements and any
other internal or external contextual factors; a ‘Bottom-Up’
calculation based on business performance against Plan and
Target Incentive level for the firm (see ‘Pay for Performance’
below); the overall financial and strategic performance of the
Group; and the financial and strategic performance of
Ameriprise Financial as the Group’s parent company and
shareholder. The Committee also receives ongoing reports
through the year from the Risk function regarding risk
assessments and any themes or areas of note related to risk
control or risk-related behavioural concerns.
The Committee takes all of these factors into account in order
to make a balanced decision on the Total Incentive pool for
the year in question.
3. Determining Individual Total Incentive Awards
Individual reward decisions are wholly discretionary,
although strongly informed by the annual performance
appraisal and by known market remuneration levels for
equivalent jobs as well as by the pool funding available. Risk
and Compliance provide a critical input to final performance
rating setting, ensuring that any risk and relevant behavioural
concerns are reflected in performance appraisals and
subsequently in remuneration recommendations. The Heads
of Risk and Compliance also report directly to the final
Remuneration Committee of the award process to ensure that
the Committee receives a direct report on which to base its
final risk adjustment decisions.
Base salaries are maintained at a market-competitive level in
order to ensure that, if required, it is possible to award zero
incentive.
Pay for Performance
The bottom-up element of the incentive pool determination
process measures team and wider business performance
against key business targets for each area of the Group,
including longer-term investment performance for the
Investments and Property divisions and a mix of gross and
net sales for Distribution. Investment performance is
assessed against each fund’s benchmarks and its risk profile,
over a time period reflecting the nature of the asset class and
fund in question. All such assessments’ impacts on the
bottom-up calculation are capped so as not to incentivise
managers to take excessive risk in order to deliver higher
About the Trust (Unaudited)
61
Threadneedle Property Unit Trust
incentive pools. While the Group and parent company
financial and strategic results are important factors in pool
determination, the model is set up to ensure that delivery of
the business’ core goals, including delivering investment
performance to its customers, is an explicit and significant
driver in pool determination for those divisions.
Individual discretionary awards from the available pool, in
context of market-competitive reward levels for the job in
question, are driven strongly by each individual’s ratings
against Goals (objectives) and the Group’s Values, each of
which is separately rated on a 5-point scale to ensure the
Values assessment is given due prominence. Goals focus on
the key deliverables for the role that year, in particular on the
delivery of investment performance for Investments
employees and for the Property division: all employees are
also managed against a mandatory Risk Management Goal.
Investment performance, where relevant to the role, is
assessed against each fund’s benchmark and its risk profile.
Ratings are consistency-checked across the business with the
input of the Heads of Risk and Compliance to ensure balance
and due reflection of risk management. There is no pre-
determined grid or formula driving awards, which are
discretionary in order to be able to account for and reflect all
relevant factors.
Where additional performance fee-related remuneration
arrangements are in place, payments are made only on
realised performance fees and are subject to oversight in the
same way as annual incentive awards.
Where ‘carried interest’ schemes are in place for specific
funds, all payments are made from a performance fee
calculated as a defined % of the fund’s return to investors
above the absolute return hurdle agreed with investors. No
payments are made to executives through these schemes until
investors have received the return of their invested sum and
the designated hurdle rate of return on that investment: if that
hurdle is not reached, no carried interest payments are made.
Delivery of Total Incentives
While the Group’s current assessment is that, under UK
proportionality guidance, the Manager would not be required
to apply the deferral rules in SYSC 19B, Threadneedle believes
that deferred awards for higher earners are a matter of good
practice and an important part of aligning key staff’s interests
with the long-term interests of customers and shareholders.
To that end, Total Incentive awards for all employees in the
Group may be delivered partly in deferred awards through
the Ameriprise Financial Long-Term Incentive Award (“LTIA”)
programme.
4. Identified Staff
The Manager defines its Identified Staff in line with the
definitions provided by SYSC 19B and associated guidance.
Those Identified Staff are the senior management, risk takers,
control functions and other employees whose total
remuneration takes them in to the same bracket as senior
management and risk takers, whose professional activities
have a material impact on the risk profiles of the Manager or
of the funds it manages. In practice, that includes the named
Fund Managers of the Manager’s funds.
5. Remuneration Payment Disclosure
The AIFM’s performance periods for remuneration operate on
an April to March performance year, making 2015-16 the first
performance year subject to the full AIFM remuneration rules.
The Company operates an individual performance year on a
calendar year, payments and LTIA grants in respect of which
were made in February 2016.
Total Remuneration paid by the Manager to 3 AIFM
Remuneration Code Staff Senior Managers in respect of its
AIFM activities in the 2016-17 performance year was £0.08m,
of which £0.016m was fixed and £0.068 was variable. Total
Remuneration paid to other members of AIFM Remuneration
Code Staff whose actions had a material impact on the risk
profile of the AIFM was £0.18m, of which £0.14m was fixed
and £0.04m was variable.
Because the AIFM does not employ any staff, and those
working on the AIFM’s business also perform services for
other regulated and non-regulated companies, the
remuneration for AIFM Remuneration Code Staff has been
apportioned for most Code Staff according to the AIFM’s total
Assets under Management (“AuM”) in context of the EMEA
Region’s total AuM, and in turn in respect of the AIFM’s total
AIF assets as a proportion of its own total AuM. That
proportional asset-weighted calculation has been applied to
each member of AIFM Remuneration Code Staff’s Total
Remuneration for the year, taking account of dates joining or
leaving AIFM Remuneration Code Staff during the year and
any other broader leadership responsibilities, in order to
represent that proportion of their remuneration attributable
to the AIFM’s management of AIFs. Exceptions to that rule
were made for the senior management team of the Columbia
Threadneedle Property business, who serve as Directors of
the AIFM as well as undertaking Portfolio Management
activity for the AIFs, where a qualitative assessment was
undertaken of the proportion of time and activity aligned to
the AIFM.
Also due to the AIFM not employing any staff, and that those
staff who do work on the AIFM’s business will also support a
number of other entities and activities to various degrees,
Total Remuneration for all employees working on the AIFM’s
business cannot be apportioned out of the wider business to
any degree of meaningful reliability. As such, while disclosure
of AIFM Remuneration Code Staff’s attributable Total
Remuneration is comprehensive, remuneration for this group
is therefore nil under this requirement and this statement
does not include quantitative disclosures for that broader
employee group.
About the Trust (Unaudited)(continued)
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Threadneedle Property Unit Trust
Valuation and SubscriptionsMonthly valuations of the Trust’s properties are carried out byCBRE Limited. The unit price is computed monthly based uponthese valuations and capital expenditure incurred. Thecomputation forms the basis for the determination of the issueand redemption prices of units by the Manager. Net income is notincluded in the calculation, being distributed on a quarterly basisto Unitholders. Subscription for Units may be made monthly withunits issued on a Pricing Day at the Subscription Price. Whenrequired, the Trust operates a waiting list with respect to theissuance of new units in order to control liquidity levels.
The Manager, at its discretion, may accept or reject anysubscription.
TaxationThe Trustees are not resident in the UK for taxation purposes. TheTrust is outside the scope of the UK capital gains tax regime. Theincome of the Trust belongs directly to Unitholders and is paidgross to Unitholders who are resident in the UK and other persons who have received authority from HM Revenue &Customs to receive rent gross. Tax is deducted at source (at thebasic rate applicable in the year of 20%) from rental profit paidto Unitholders who are not resident in the UK and who have notreceived authority to receive rent gross. UK interest is paid netof UK income tax at the lower rate unless it is received gross oftax in which case it is paid gross to the Unitholders.
Exempt Unitholders are entitled to reclaim any income taxdeducted at source. Other Unitholders may reclaim income taxdeducted at source if and to the extent that it exceeds their UKtax liability on income.
The Board of HM Revenue & Customs has certified the Trust as adistributing fund for the purposes of Chapter V Part XVII of theIncome and Corporation Taxes Act 1988 in respect of allapplicable accounting periods up to 31 March 2010.The Managerdoes not intend to seek Reporting Fund status for the Trust inrespect of the accounting period commencing on 1 April 2010and any subsequent accounting periods on the basis that theTrust is a transparent fund within the meaning of Regulation II ofPart One of the Offshore Funds (Tax) Regulation 2009, the Trustwill not hold interests in non-reporting funds which amount intotal to more than 5% by value of its assets and the Trust makessufficient information available to Unitholders to enable them tomeet their UK tax obligations in respect of their units.
CertificationThe Trust is non-certificated. Title to units will be evidenced solelyby reference to entries in the register.
Management of the TrustThe roles and responsibilities of all parties involved in runningthe fund who have obligations, or the ability to set andimplement policies or strategies relating to the management ofthe fund can be found in the current prospectus.
Investment restrictions and the procedure for the managementof conflicts of interest can also be found in the currentprospectus which is available upon request from the Manager.
Transfer and Realisation of UnitsAfter written notification to the Manager, units may betransferred on the first Pricing Day following receipt of theinstrument of transfer.
After written notification to the Manager, units may be realisedat a Realisation Price determined on the fifth Pricing Dayfollowing receipt of the Realisation Notice, subject to the deliveryof appropriate documents to the Manager. Payment willnormally be made to the investor as soon as practical followingthis fifth Pricing Day. The Manager has the right to defer paymentif it considers it necessary for the protection of the interests ofcontinuing Unitholders to do so.
Reporting, Financial Statements and DistributionThe Trust’s year-end is 31 March. The report and financialstatements are distributed to Unitholders at least 21 days beforethe Annual General Meeting (usually held in July).
Distributions of income to Unitholders are made quarterly, beingas soon as is practical following the last days of March, June,September and December (after deductions of income tax whereappropriate). A tax certificate is sent with each distribution toallow investors to make individual claims for repayment of tax.
Borrowing PowersUnder the terms of the Trust Deed, the Trustees are permitted tomake borrowing arrangements for the Trust up to 35% of the netasset value of the Trust.
Derivative ExposureUnder the terms of the Trust Deed, the Trustees are permitted tohold Approved Investments on behalf of the Trust not exceeding10% of the underlying property assets at the time.
Business Continuity StrategyThreadneedle has in place a business continuity and disasterrecovery plan to enable swift recovery and resumption of normaloperations following an incident. Regular exercises of this planare held at dedicated recovery sites attended by critical staff.These exercises are externally audited. Threadneedle was short-listed for the CIR Business Continuity Strategy of the Yearaward in 2007 and was again short listed for the same awardin 2009.
Social ResponsibilityESG factors influence decision making on the Fund when aproperty is purchased, in our evaluation of the assets risk factors,during the holding period, and as we look to create value on theasset. The Fund Manager, takes ultimate responsibility for theFund and the assets held within it.
Before undertaking a purchase, the Property team pays closeattention to all factors affecting the value of the investmentopportunity including those relating to ESG. Planned preventivemaintenance and refurbishment cost forecasts specificallyconsider ESG factors, including measures to increase theproperty’s EPC Rating and to future proof it as part of anyrequired refurbishment programme.
About the Trust (Unaudited)(continued)
63
Threadneedle Property Unit Trust
Furthermore, we undertake Phase I environmental assessmentson all new property acquisitions, and more detailed Phase II andflood risk assessments, when appropriate. We assess andincorporate any cost implications identified by each property’sEnergy Performance Certificate (EPC) into our financial models.
Our Property Governance and Insurance team undertakes a riskmanagement assessment including providing an independentperspective across a range of issues including, but not limited to,deleterious materials, environmental factors, health and safety etc.
We also undertake a number of checks on our tenants includingthose relating to ‘politically exposed persons’ (PEP) andsanctions. While we do not explicitly restrict the type of tenantwe have, the way tenants use the properties is an importantconsideration for our Property team, given the impact this canhave on the holding and its investment value.
ESG issues play a central role in our asset managementdecisions and we comply with all statutory requirements. Weadopt cost effective yet relevant solutions that, through ourrolling refurbishment plan, are improving the EPC rating acrossthe whole portfolio.
Our oversight team sets specific objectives for the propertymanagement teams we work with and not only must theycomply with statutory requirements for EPC, CRC and HeatNetwork regulations, they are also measured against our ESG targets.
Outsourced providers’ progress and success against thesetargets are reviewed semi-annually.
Finally, we adhere to the Carbon Reduction Commitment (CRC),the Energy Saving Opportunity Scheme (ESOS), and HeatNetwork Regulations. Columbia Threadneedle contributes to theGlobal Real Estate Sustainability Benchmark (GRESB).
Additional InformationThe value of investments may fall as well as rise and investorsmay not get back the original investment. It may be difficult orimpossible to realise an investment in the Trust because theunderlying property concerned may not be readily saleable. Thevalue of the property held by the Trust is a matter or the valuer’sopinion and the true value may not be recognised until theproperty is sold.
This document should not be circulated to private investors,other than in those circumstances provided in the relevantregulations to permit the promotion of unregulated collectiveinvestment schemes/unclassified funds.
This document does not constitute or form any part of any offerto issue or sell, or any solicitation of any offer to subscribe orpurchase any units nor shall it or the fact of its distribution formthe basis of, or be relied on in connection with any contracttherefore.
Please note that the use of gearing creates additional risk byraising the Trust's exposure to capital risk and interest costs. Insome circumstances the use of gearing can also affect theeligibility of the Trust for certain investors.
About the Trust (Unaudited)(continued)
Management and Administration
64
Threadneedle Property Unit Trust
Manager(regulated by the Jersey Financial Services Commission)Threadneedle Investments (Channel Islands) LimitedLiberté House19-23 La Motte StreetSt HelierJerseyJE2 4SY
Board of the ManagerChairmanRichard Prosser BSc FCA
Kevin Mundy ACISDavid Litton ACIBChris Morrogh MA MRICSDon Jordison BSc (Hons) MBA MRICSPaul Le Marquand BSc (Hons) MRICS
Investment AdvisorThreadneedle Portfolio Services LimitedCannon Place78 Cannon StreetLondonEC4N 6AG
Fund Manager/DirectorChris Morrogh MA MRICS
Managing DirectorDon Jordison BSc (Hons) MBA MRICS
Managing AgentsWorkman LLPAlliance House12 Caxton StreetLondonSW1H 0QS
Savills33 Margaret StreetLondonW1G 0JD
Standing Independent ValuersCBRE LimitedSt Martin’s Court10 Paternoster RowLondonEC4M 7HP
JLL Ltd30 Warwick StreetLondonW1B 5NH
Trustees(regulated by the Jersey Financial Services Commission)BNP Paribas Securities Services Trust Company (Jersey)LimitedLiberté House19-23 La Motte StreetSt HelierJerseyJE2 4SY
BNP Paribas Securities Services Trust Company LimitedLiberté House19-23 La Motte StreetSt HelierJerseyJE2 4SY
Administrators/Registrars(regulated by the Jersey Financial Services Commission)BNP Paribas Securities Services S.C.A., Jersey BranchLiberté House19-23 La Motte StreetSt HelierJerseyJE2 4SY
Jersey Legal AdvisorsMourant Ozannes22 Grenville StreetSt HelierJerseyJE4 8PX
UK Legal AdvisorsHogan Lovells International LLPAtlantic House50 Holborn ViaductLondonEC1A 2FG
Independent AuditorsPricewaterhouseCoopers CI LLP37 EsplanadeSt HelierJerseyJE1 4XA
Bankers(regulated by the Jersey Financial Services Commission)BNP Paribas Securities Services S.C.A., Jersey BranchLiberté House19-23 La Motte StreetSt HelierJerseyJE2 4SY
Lloyds Bank plcCity OfficeGillinghamKentME8 0LS
Important Information
65
Threadneedle Property Unit Trust
The Trust is not an authorised unit trust scheme for the purposesof the Trustee Investment Act 1961 or the Income and CorporationTaxes Act 1988.
In the UK, the Trust is an unregulated collective investmentscheme for the purposes of Section 238 of the Financial Servicesand Markets Act 2000. Accordingly, this document may only becommunicated in the UK to persons described in the FinancialServices and Markets Act 2000 (Promotion of CollectiveInvestment Schemes) Exemption Order 2001 and to persons towhom Units are permitted to be promoted in accordance withthe FCA’s Conduct of Business rules. In Jersey, the Trust is treatedas an unclassified fund for the purposes of the CollectiveInvestment Funds (Jersey) Law 1988 and is regulated by theJersey Financial Services Commission.
Units in the Trust may only be promoted in accordance with theaforementioned legislation. Past performance is no guide tofuture returns. The value of investments and income from themcan go down as well as up. Any opinions expressed in thisdocument are made as at the date of issue and are subject tochange without notice. Tax concessions are not guaranteed andmay change in the future. It may be difficult or impossible torealise an investment because the underlying propertyconcerned may not be readily saleable. The value of property is
a matter of a valuer’s opinion and the true value may not berecognised until the property is sold. Both the Threadneedlename and logo are trademarks or registered trademarks of theThreadneedle group of companies.
This document does not constitute or form any part of any offerto issue or sell, or solicitation of any offer to subscribe orpurchase any units, nor shall it or the fact of its distribution formthe basis of, or be relied on, in connection with any contracttherefore. Recipients of this document who intend to apply forunits are reminded that any such application may be made solelyon the basis of the information and opinion contained in theprospectus which may be different from the information andopinion contained in this document.
To invest in the Trust or request further details, contact BNPParibas Securities Services S.C.A., Jersey Branch on 01534813827 or write to:
BNP Paribas Securities Services S.C.A., Jersey BranchLiberté House19-23 La Motte StreetSt HelierJerseyJE2 4SY
Issued by Threadneedle Investments (Channel Islands) LimitedRegistered in Jersey, Company number 82489.Registered office: Liberté House, 19-23 La Motte Street, St Helier, Jersey, JE2 4SYRegulated by the Jersey Financial Services Commission
To find out more visit columbiathreadneedle.comColumbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. columbiathreadneedle.com 154214