Annual Report and Consolidated
Financial Statements
For the year ended:
30 June 2022
Formerly BMO Real Estate
Investments Limited
CT Property Trust Limited
Contents
Overview
Company Summary 1
Financial Headlines 2
Performance Summary 3
Strategic Report
Chairman’s Statement 5
Business Model and Strategy 10
Promoting the Success of the Company
12
Key Performance Indicators 14
Principal Risks and Future Prospects 15
Manager’s Review 18
Environmental, Social and Governance (ESG) 26
Property Portfolio 31
Governance Report
Directors 34
Directors’ Report 35
Corporate Governance Statement 39
Report of the Audit and Risk Committee 42
Directors’ Remuneration Report 45
Statement of Directors’ Responsibilities 47
Independent Auditor’s Report
49
Financial Report
Consolidated Statement of Comprehensive Income 55
Consolidated Balance Sheet 56
Consolidated Statement of Changes in Equity 57
Consolidated Statement of Cash Flows 58
Notes to the Consolidated Financial Statements 59
AIFM Disclosures 76
Notice of AGM
Notice of Annual General Meeting 77
Other Information
Shareholder Information 79
Historic Record 80
Alternative Performance Measures 81
EPRA Performance Measures 83
Glossary of Terms 86
How to Invest 88
Corporate Information 89
This document is important and requires your immediate attention. If you are in any doubt as to the action you should take, you are
CT Property Trust Limited, please
forward this document together with the accompanying documents immediately to the purchaser or transferee, or to the stockbroker, bank or
agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. If you have sold or otherwise
transferred only part of your holding of shares, you should retain these documents.
Front Cover Photo: Southampton International Park, Eastleigh
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Overview
Company Summary
The Company
Exchange. Stock code: CTPT
The Annual Report and Consolidated Financial Statements of the Company consolidate the results of its
subsidiary undertakings, which collectively are referred to throughout this document as ‘the Group’, details
of which are contained in notes 1(b) and 10 to the Consolidated Financial Statements.
2 total assets less current liabilities were £410.7 million and shareholders’ funds were
£319.6
million.
Objective
Investment Policy
The Company’s investment policy is set out on page 10.
Management
The Board has appointed Columbia Threadneedle Investment Business Limited
Investment Business Limited) as the Company’s investment manager and Columbia Threadneedle REP PM
Limited (form REP Property Management Limited) as the Company’s property manager. Both of
these companies are part of the Columbia Threadneedle Investments Group and, collectively, are referred to
in this document as ‘the Manager’. Further details of the management arrangements are provided in note 3
to the Consolidated Financial Statements.
Capital Structure
dividends declared by the Company and to all of the Company’s assets greater than the value of the liabilities.
Alternative Performance Measures (‘APM’)
The Company uses a number of alternative performance measures in the discussion of its business
pages 81 and 82.
How to Invest
The Manager operates a number of investment plans which facilitate investment in the shares of the
Company. Details are contained on page 88. You may also invest through your usual stockbroker.
Visit our website at
ctpropertytrust.co.uk
Registered in Guernsey with company registration number 41870
Governance Report Auditor's Report Notice of AGM Other InformationStrategic ReportOverview Financial Report
The As
sociation of
Investment Companies
2 | CT Property Trust Limited
Overview
27.4%
*
34.3%
*
4.8%
*
106.5%
*
Portfolio ungeared
total return of 27.4%
for the year
NAV total return of
34.3% for the year
Dividend of 4.0
per share for the
year, giving a yield
of 4.8% on the
year-end share price
Dividend cover of
106.5% for the year
Delivering long-term income and capital returns
Since launch in 2004 CT Property Trust Limited has turned a £1,000 investment, with dividends
reinvested, into £4,029*.
Net asset value per share at 30 June (pence) Share price per share at 30 June (pence)
2013 2014 2015 2016 2018 2019 20202017
140p
120p
100p
80p
60p
40p
20p
0p
2021 2022
2013 2014 2015 2016 2018 2019 20202017
120p
100p
80p
60p
40p
20p
0p
2021 2022
Source: Columbia Threadneedle Investment Business Source: Columbia Threadneedle Investment Business
Share price premium/(discount)* to Ongoing charges* at 30 June (%)
net asset value at 30 June (%)
10%
0%
-10%
-20%
-30%
-40%
-50%
2013 2014 2015 2016 2018 2019 20202017 2021 2022
2.5%
2.0%
1.5%
1.0%
0.5%
0%
2013 2014 2015 2016 2018 2019 20202017 2021 2022
Source: Columbia Threadneedle Investment Business Source: Columbia Threadneedle Investment Business
Potential investors are reminded that the value of investments and the income from them may go down as well as up and investors
individual circumstances.
* See Alternative Performance Measures on pages 81 and 82.
Financial Headlines
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Overview
Total Return*
Year ended
30 June
2022
Year ended
30 June
2021
Cumulative
since launch
on 1 June
2004
Net asset value per share 34.3% 9.1% 302.9%
Ordinary share price 24.0% 32.9% 189.1%
Portfolio ungeared return 27.4% 9.0% 317.6%
MSCI UK Quarterly Property Index 19.1% 6.5% 234.5%
FTSE All-Share Index 1.6% 21.5% 239.4%
Capital Values
Year ended
30 June
2022
Year ended
30 June
2021 % Change
Total assets less current liabilities (£000’s) 410,721 336,422 +22.1%
Net asset value per share 132.8p 102.1p +30.1%
EPRA Net Tangible Assets per share** 132.8p 102.1p +30.1%
Ordinary share price 84.0p 71.0p +18.3%
MSCI UK Quarterly Property Universe 135.1 118.0 +14.5%
FTSE All-Share Index 3,940.9 4,014.7 -1.8%
Ordinary share price discount to net asset value per share* (36.7)% (30.5)%
Net gearing* 22.1% 24.4%
Earnings and Dividends
Year ended
30 June
2022
Year ended
30 June
2021
Earnings per ordinary share 34.6p 8.7p
Adjusted EPRA Earnings per ordinary share** 4.5p 3.8p
Dividends paid per ordinary share 4.0p 3.175p
Dividend yield* 4.8% 4.5%
Ongoing Charges
Year ended
30 June
2022
Year ended
30 June
2021
As a percentage of average net assets* 1.5% 1.6%
As a percentage of average net assets (excluding direct property expenses)* 1.2% 1.2%
* See Alternative Performance Measures on pages 81 and 82.
** See EPRA Performance Measures on pages 83 to 85.
Sources: Columbia Threadneedle Investment Business, MSCI Inc and Refinitiv Eikon.
Performance Summary
Overview
4 | CT Property Trust Limited
Overview
Year’s Highs/Lows
Highs
2022
Lows
2022
Net asset value per share
132.8p 102.1p
Ordinary share price
97.0p 71.4p
Ordinary share price discount to net asset value per share
-19.5% -36.7%
Enterprise Way, Luton
Overview
County House, County Square, Chelmsford
“The Company’s portfolio delivered a
total return of 27.4 per cent
over the
12 months, which was well ahead
Index, aided by accretive capital
investment and the completion
of numerous successful asset
management initiatives.”
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Strategic Report
The 12
real estate capital and occupational markets responding
well as the worst of the pandemic seemed to be behind us.
However, as 2022 has progressed we have seen a marked
shift in sentiment owing to the growing economic concerns
the cost-of-living crisis, increasing interest rates and a decline in
, the Company has delivered a strong
net asset value (‘NAV’) total return of 34.3 per cent and a
102.1
pence per share a year previously. The Company’s
portfolio delivered a total return
of 27.4 per cent over the
12 months, which was
Property Index (‘MSCI’ or ‘Index’), aided by accretive capital
investment and the completion of numerous successful asset
management
initiatives.
NAV performance during the year. The share price total return
for the year was 24.0 per cent with the shares trading at
84.0
36.7 per cent to the NAV at the year end.
Property Market
The MSCI Index shows an all-property total return of 19.1 per
cent in the 12
period continues to be driven by the industrial, logistics and
distribution (‘industrial’) sector, which delivered an exceptional
underpinned primarily by strong investor demand, supported by
robust rental growth within an occupational market buoyed by
the growth of e-commerce and demand from companies shoring
up their supply chains.
economic context that has characterised the majority of
the
12
Russia at the end of February 2022 dampened the obvious
positivity, and the good start to 2022 deteriorated as consumer
squeeze on real incomes and interest rate increases. As a
result, capital growth, whilst positive, notably slowed towards the
Portfolio Performance
over the MSCI Index return of 19.1
of 21.8 per cent was the driver of the Company’s total return
performance, the portfolio also maintained an income advantage
over the Index, delivering an income return of 4.7 per cent.
The sector allocations within the Company portfolio proved
within the industrial and retail warehousing sectors generated
These two sectors account for
73.5
per cent of portfolio by capital value and the allocation
of further capital to both over the course of year
proved a highly productive use of Company’s resources.
The Company’s industrial assets were once again the bedrock
of performance, delivering an exceptional total return of 41.0 per
cent. The retail warehousing assets lent further support with
a total return contribution of 30.1 per cent. In both cases, the
sectors have seen strong investor demand on account of their
robust fundamentals. As a result, the Company’s high relative
weighting has served to generate substantial capital growth
over
the year.
Chairman’s Statement
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Vikram Lall, Chairman
Strategic Report
6 | CT Property Trust Limited
Strategic Report
The period has seen the continuation of a strategy to reduce
the Company’s exposure to the high street retail sector, which
continues to face structural challenge despite signs of gradual
recovery. The sale during the year of the retail asset at High
Street, Guildford at a 14 per cent premium to valuation illustrates
the liquidity of the Company’s holdings, which continue to
maintain a near-zero vacancy rate while delivering an attractive
yield pick-up.
continued to evolve, a clear polarisation has emerged in
portfolio is well-positioned in this regard, with over 50 per cent
of the exposure being in two prime south east assets (at year
quality’, with the asset becoming fully occupied ahead of a post-
period disposal, concluded in August 2022 for £32.4 million.
This asset was the third largest holding in the portfolio and was
sold for a premium of 5 per cent above the year end valuation.
The disposal was timed to take full advantage of both the asset
and market cycles, which has enabled the Company to secure a
strong net initial yield of 3.1 per cent for this quality asset and
Borrowings and Cash
The Group had approximately £13.6 million of available cash at
13.0
million.
The Group’s £90 million long-term debt with Canada Life and
2022, the Group’s net gearing was 22.1 per cent. The weighted
average interest rate on the Group’s total current borrowings
was 3.1 per cent. The Company continues to maintain a prudent
attitude to gearing. Since the year end, the Company’s cash
resources have increased considerably following the Berkeley
Street disposal referred to above.
Share Buybacks
The Board and Manager believe that the current share price
year end, the Company has started to use some of the cash
generated from the sale of Berkeley Street to buy the Company’s
shares at a discount rather than investment in new properties.
This offers attractive value for shareholders and will be both
NAV and earnings enhancing.
will only be made through the market for cash at prices below
Directors believe such purchases will enhance shareholder long-
term value. At the time of writing, the Company has bought back
6,325,000 since the year end at an average
discount to the NAV of 36.1 per cent.
Dividends
Three interim dividends of 1.0 pence per share were paid for the
year and a fourth interim dividend was paid on 30 September
2022 at the same rate. The Board will continue to keep the
future level of dividends under review.
Manager Update
As previously announced Matthew Howard has succeeded
Peter Lowe as the Company’s Lead Manager with effect from
to the Company’s strong performance and wish him well in his
new role.
Matthew joins us with an excellent track record in fund
and performance of the Company.
2017, having spent the previous six years at Hermes Investment
Management (Now Federated Hermes). He is a member of CT
REP’s Investment Committee and also acts as Fund Manager of
the RSA Shareholders Real Estate Fund.
Board Composition
As previously announced, Rebecca Gates retired as a Director of
the Company on 31 August 2022. I would like to thank Rebecca
for the contribution she has made during her time on the Board.
I will also step down from the Board later this year having
served on the Board for nine years. The process to identify two
new non-executive Directors, including a successor to me as
Chairman has commenced and we hope to be able to provide a
further update on Board appointments in the near future.
Management Fee Arrangements
The Board has been in discussion with the Manager with regards
to the level of management fee being charged. The current fee
is 0.6 per cent per annum of the total assets, including cash
held provided that no fee is payable on any cash held in excess
of 5 per cent of the net assets of the Group. Following these
negotiations, it has been agreed that the rate of 0.6 per cent will
Environmental, Social and Governance (‘ESG’)
As a Board, we continue to give considerable attention to our
ESG commitments and will work closely with our Property
Manager to meet and exceed ever-evolving regulatory standards.
As a measure of our efforts in continuing to build our ESG
agenda, we are targeting further incremental improvements in
our GRESB rating, which to this point has seen year-on-year
2018. GRESB provides validated ESG performance data and
peer benchmarks for investors and managers to improve
business intelligence and industry engagement.
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Strategic Report
The Company’s pathway to Net Zero Carbon (NZC) emissions is
a clear strategic priority, and we have made excellent progress in
developing our strategy over the course of the year. Asset-level
NZC audits have been completed across the portfolio, itemising
the interventions needed to achieve net zero emissions from
our real estate portfolio. Armed with this information, we can
establish a deliverable and tangible pathway to NZC based on
and pathway later this year.
An ESG Report, detailing the current status and progress made
on the portfolio is available on the Group’s website.
Outlook
economy rebounded strongly in 2021, but growth has
supply chain disruption and elevated geopolitical risks.
Policymakers are also taking steps that will further constrain
growth, with the Bank of England raising interest rates. It seems
increasingly likely that this will
and a period of negative growth lies ahead.
was 9.9 per cent, just
and the
Bank of England have revised
to 11.0
a year, as households face an acute cost of living crisis driven
to edge down with the unveiling of the government’s energy
price guarantee package designed to shield households and
businesses from soaring energy prices over the next 6 months,
followed by a review. The Bank of England has raised interest
rates to 2.25 per cent, with further increases anticipated as
will undoubtedly slow real estate activity, while the ability of
differentiator. There have been falls in property valuations across
largest declines and the Company’s portfolio will not be immune.
in recent months and the current discount in our shares
that.
In uncertain markets, the quality of the underlying portfolio
core locations, with long term value in the residual and a quality
tenant base, which has delivered consistent long-term capital
and income performance. As we move to the next stage in the
property market cycle, income will drive returns, while asset
resilience should protect long-term capital values. Consequently,
the portfolio’s income advantage, sector exposures,
geographical focus and low vacancy rate stand us in good stead
as we enter a period of economic uncertainty.
Vikram Lall
Chairman
17 2022
Forward-looking statements
involve risk and uncertainty because they relate to future events and circumstances that could cause actual results to differ materially from those expressed or
implied by forward-looking statements. The forward-looking statements are based on the Directors’ current views and on information known to them at the date of
Strategic Report
8 | CT Property Trust Limited
Xxxx
Xxxx Xxxx
Xxxx
“
assets in core locations, with long
term value in the residual and a
quality tenant base, which has
delivered consistent long-term
capital and income performance.”
Report and Accounts 2022 | 9
Xxxx
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Glory Park, High Wycombe
Strategic Report
10 | CT Property Trust Limited
Strategic Report
Business Model and Strategy
Board
The Board of Directors is responsible for the overall
stewardship of the Group, including investment and dividend
policies, gearing, corporate strategy, corporate governance
procedures and risk management. As set out in the Directors’
Responsibilities on page 47 the Board is also responsible for
the preparation of the Annual Report and Consolidated Financial
year. Biographical details of the
Directors, all of whom are independent non-executive Directors,
can be found on page 34. The Company has no executive
Directors or employees.
The Board has contractually delegated the management of
the investment portfolio and other services to the Manager.
A summary of the terms of the management agreement is
contained in note 3
Investment Strategy
Purpose
The Company’s purpose is to provide investors with market
relevant and cost-effective investment choice in meeting their
longer-term investment needs.
Objective
The Group’s investment objective is to provide ordinary
shareholders with an attractive level of income together with
the potential for income and capital growth from investing in a
Investment Policy
and one long
leasehold (over 60 years remaining at the time of acquisition)
commercial property sectors: Retail (including retail
warehouses) and Industrial, Logistics and Distribution although
the Group may also invest in other commercial property sectors
including (but not limited to) Healthcare, Leisure, Hotels and
serviced apartments, Education, Car parks and petrol stations,
Residential, Supported living, Student accommodation, Storage,
and Supermarkets.
The Group invests in income producing investments. Investment
decisions are based on analysis of, amongst other things,
prospects for future income and capital growth, sector and
geographic prospects, tenant covenant strength, lease length,
initial and equivalent yields and the potential for development or
redevelopment of the property. The Group will not invest in other
investment companies or funds.
Investment risks are spread through investing in a range of
geographical areas and sectors, and through letting properties,
where possible, to low risk tenants. The Group has not set
any maximum geographic exposures, but no single property
properties may not exceed 45 per cent of total assets. Income
receivable from any one tenant, or tenants within the same
least 90 per cent by value of properties held shall be in the form
of freehold, feuhold or long leasehold (over 60 years remaining
at the time of acquisition) properties or the equivalent.
The Group uses gearing to enhance returns over the long
term. Gearing, represented by borrowings as a percentage of
investment properties, may not exceed 60 per cent. However,
it is the Board’s present intention that borrowings will be
limited to a maximum of 40 per cent of total assets at the time
calculated in accordance with the requirements under the AIFM
Directive as being inclusive of exposure to derivatives (such as
is 400 per cent on both a gross and commitment basis. The
Board receives recommendations on gearing levels from the
Manager and is responsible for setting the gearing range within
which the Manager may operate. The Group’s borrowings are
represented by two loans with £97
million drawn down as at
2 and are described in more detail in note 13 to
. The level of borrowings
has been reduced since the year end with the £7 million loan
drawn down from Barclays being repaid in September 2022. The
2 was 22.1 per cent
of investment properties and has fallen further since the sale of
Berkeley Street in August 2022.
Investment of Assets
At each quarterly Board meeting, the Board receives a detailed
presentation from the Manager together with a comprehensive
analysis of the performance of the Group and compliance with
The Company carries on business as a closed-ended property investment company. Its shares are
traded on the Main Market of the London Stock Exchange.
* applicable only on acquisition or disposal of a property. Does not apply to lettings to the Government of the United Kingdom.
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Strategic Report
investment restrictions during the reporting period. An analysis
2 is
contained within the Manager’s Review on pages 18 to 25 and a
full portfolio listing is provided on page 31.
Environmental, Social and Governance (ESG)
The importance of environmental and social factors, together
with the management of those factors through corporate
governance and property management, continues to strengthen
supported by its Property Manager, has continued to make
into strategy, as has been evidenced in our annual ESG Report.
Attention to ESG matters continues to be an important
shareholders place in the Company as an attractive and
of feedback shareholders provide on our approach to ESG
matters and we continue to engage with them regularly.
terms of optimising net operating income today and supporting
therefore focuses particularly on:
and productive occupancy, and contribute positively to the
health and wellbeing of the people that work, shop or live
in them. This is an increasingly important attribute which
ability to retain occupiers and support rental growth.
climate change, a dynamic regulatory environment, and the
rapid advancement of technology, helps mitigate their rate of
depreciation and reduces their exposure to various forms of risk.
• ensuring that properties make a positive contribution to the
local communities in which they are situated, can help to
improve patronage, support wider economic performance
and enhance the skills and employment prospects of local
people, in turn making the local market a more attractive
investment location.
Shareholder Value
The Board and the Manager recognise the importance of
both marketing and share buy backs in increasing demand
for the Company’s shares. Share buy backs can help reduce
the volatility of any discount of the share price to the net
asset value per share and enhance the net asset value per
share for continuing shareholders. Any buy backs will be at
Shares will only be made through the market for cash at
Shares (as last calculated) where the Directors believe such
factors to be considered include alternative property investment
opportunities, which may be standing at greater levels of
discount to underlying value than the Company’s own shares;
the impact on net asset value accretion and improvement in
dividend cover from share buy backs; and the levels of liquidity,
gearing and loan to value ratio within the Company.
In terms of marketing, the Manager offers a range of private
investor savings schemes, details of which can be found on
page 88. In addition, meetings are held regularly with current and
prospective shareholders and stockbroking analysts covering the
investment company sector. Communication of quarterly portfolio
information is made through the Company’s website.
Unit K60, Bunzl, Basingstoke
Strategic Report
12 | CT Property Trust Limited
Strategic Report
The Board’s continued focus on promoting the long-term
success of the Company in response to stakeholders’ needs
and aspirations is now formalised in the Company’s reporting in
accordance with section 172(1) of the Companies Act 2006 (the
“Act”). Although S172 only appliesincorporated
is that matters set out in this section are reported on by all
listed companies.
duty to act in the way they consider, in good faith, would be most
its members as a whole and, in doing so, have regard (amongst
other matters) to the likely consequences of the Board’s
decisions in the longer term and how they have taken wider
stakeholders’ needs into account.
As an investment company, with no employees, the Company’s
principal working relationships are with the Manager, other
professional service providers (corporate broker, registrar,
working relationship is with the Manager who we hold to account
sustainability as a fundamental element in achieving longer term
success, we continued to work very closely with the Manager
throughout the year in further developing the investment strategy
and underlying ESG policies. This is not simply for the purpose
of achieving the Company’s investment objective but to do so
in an effective, responsible and sustainable way in the interests
of shareholders, future investors, tenants and society at large.
The Company has borrowings and is in regular communication
with its two lenders to ensure that they have a strong working
relationship. Compliance with the borrowing restrictions are
looked at on a timely basis.
The Manager works closely with our tenants, ensuring that
strong relationships are in place and communication lines are
as open as possible. This has been demonstrated more than
ever in recent times as the best solutions have been sought
between the Company and those tenants who have suffered
can be found in the Manager’s Review on pages 18 to 25.
The Board places great importance on communication with
shareholders. The Annual General Meeting provides a key
forum for the Board and Manager to present to shareholders
on performance, along with future plans and prospects for the
Company. The Chairman continues to be available to meet
with shareholders as appropriate and the Manager meets
regularly with shareholders and their respective representatives;
reporting back their views to the Board. Shareholders may also
communicate with the Board at any time by writing to them at
Company’s broker.
These communication opportunities help inform the Board when
considering how best to promote the success of the Company
26 to 30 additional information on
our approach towards Environmental, Social and Governance
(‘ESG’). Directors have engaged on this with the Manager and
the Company’s specialist ESG adviser, Hillbreak to establish
an approach that is bespoke to the Company, business model
focuses on integrating ESG factors into the investment and
property management process. This has evolved in recent years
and has involved the determination of a suite of ESG pillars,
commitments and targets that are bespoke to the Company
and its portfolio of property assets. The Company has made
As long-term investors we always look to the future and to the
the Company provides a clear investment choice with access to a
work towards the optimal delivery of the Company’s investment
proposition and to promote the success of the Company for the
interests of stakeholders and the community at large.
The Company’s stakeholders are always considered when the
Board makes decisions and examples include:
• Investment policy
The Board, together with the Company’s investment manager,
undertook a review of the Company’s investment policy in the
property market, the growth in value that had been experienced
in the Company’s industrial portfolio and the strategy of selling
some of the assets in the retail portfolio to reduce exposure to
this sector.
As a result of such growth, the Company was at risk of exceeding
the maximum weighting limit of 50 per cent to industrial property
set out in the Company’s previous investment policy. The Board
was therefore of the view that these maximum weighting limits
had become unduly restrictive and proposed that they were
removed from the Company’s investment policy in order to
appropriate decision making in the future. Shareholders were
consulted on this change to the investment policy via a circular
and it was approved at a general meeting on 9 September 2021.
Promoting the Success of the Company
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• Dividends
The Board recognises that providing an attractive level of income
with the potential for growth is important to the Company’s
shareholders. Following the payment of the fourth interim dividend
12.7 per cent compared to the dividend declared for the prior
year
continue to keep the future level of dividends under review.
• Share issuance and buy-backs
The Board believes that the ability to issue and buy back shares
is in the interests of all shareholders as it helps to reduce the
volatility in the premium or discount of the Company’s share
price relative to the NAV. There was no issuance or buying back
of share during the year, however, the Company has bought
back 6,325,000 ordinary shares since the year end an average
discount to the NAV of 36.1 per cent. This has helped to enhance
the NAV for ongoing shareholders by 1.3 pence per share to date
and has provided liquidity in the Company’s shares.
• Costs
The Board monitors costs closely and strives to keep these as
current management fee is 0.6 per cent per annum of the total
assets, including cash held, provided that no fee is payable on
any cash held in excess of 5 per cent of the net assets of the
Group. As
set out in the Chairman’s Statement, and following
negotiations with the Manager, it has been agreed that with
0.55 per cent which will help our ongoing charges.
• Investor communications
The Manager has a team dedicated to fostering good
relations with institutional shareholders, wealth managers and
informed, with the aim of promoting the Company’s investment
proposition and improving the rating of the Company’s share
prices. This team organises meetings with these parties as well
as preparing webinars, interviews and videos which are shared
through various media channels. The team gathers feedback
and answers any queries in relation to the Company and its
investment strategy. Feedback from these activities is reported
regularly to the Board.
In addition, the Chairman and other Directors have been in
regular contact with many shareholders in recent months.
• Tenants
It has been an extremely challenging two years following the
of our tenants, particularly in the retail space. The Manager
has worked closely with tenants over this period and has
agreed to some concessions where it has been evident that
helped to assist with the ongoing viability of these tenants
and has ensured that the Company has not suffered the costs
associated with properties being vacant.
Enterprise Way, Luton
14 | CT Property Trust Limited
Strategic Report
Performance total return*
1 Year
%
3 Years
%
5 Years
%
10 years
%
Ordinary share price 24.0 23.7 2.9 130.5 This measures the Company’s share price and
NAV total return, which assumes dividends paid
by the Company have been reinvested, relative to
the market benchmark.
Net asset value (NAV) 34.3 41.1 62.3 192.7
Portfolio return 27.4 38.1 58.7 153.1
MSCI UK Quarterly Property Index 19.1 23.4 39.4 127.6
FTSE All-Share Index 1.6 7.4 17.8 94.6
Income return
1 Year
%
3 Years
%
5 Years
%
10 years
%
Portfolio income return* 4.7 15.7 28.3 73.5
The income derived from a property during the
period as a percentage of the property value,
taking account of direct property expenditure.
MSCI UK Quarterly Property Index 4.1 13.6 23.9 59.2
Share price discount to NAV per share
As at:
30 June
2022
%
30 June
2021
%
30 June
2020
%
30 June
2019
%
30 June
2018
%
Discount* (36.7) (30.5) (42.0) (23.7) (8.0)
This is the difference between the share price and the NAV per
share. It can be an indicator of the need for shares to be bought
back or, in the event of a premium to NAV per share, issued.
Expenses
Year to:
30 June
2022
%
30 June
2021
%
30 June
2020
%
30 June
2019
%
30 June
2018
%
Ongoing charges as a percentage of
average net assets*
1.5 1.6 1.6 1.6 1.5
It measures the running costs as a percentage of the average
net assets.
Ongoing charges as a percentage of
average net assets (excluding direct
property expenses)*
1.2 1.2 1.3 1.2 1.2
It measures the running costs (excluding direct property
expenses) as a percentage of the average net assets.
Environmental performance
2022 2021 2020 2019 2018
Carbon emissions (Scope 1 & 2)
(tonnex CO
2
e)
226.7 363.3 332.4 326.1 387.7
This indicates the absolute amount of greenhouse gas emissions
associated with the landlord’s operational activities across the
portolio. The 2020 emissions were
restrictions.
Proportion of demises with EPC ratings
of A or B (%)
24.3 16.8 13.7 12.8 15.1
This provides an indication of the level of exposure to higher
Social performance
2022 2021 2020 2019 2018
Health & Safety 0 0 0 0 0
breaches in the managed portfolio.
* See Alternative Performance Measures on pages 81 and 82.
Sources: Columbia Threadneedle Investment Business, MSCI Inc and Refinitiv Eikon.
The Board assesses its performance in meeting the Company’s objective against the following
key measures. Commentary can be found in the Chairman’s Statement, Manager’s Review and
Environmental, Social and Governance Report.
Key Performance Indicators
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As stated within the Report of the Audit and Risk Committee
on pages 42 to 44, the Board applies the principles detailed in
the internal control guidance issued by the Financial Reporting
Council, and has established an ongoing process designed to
meet the particular needs of the Group in managing the risks
and uncertainties to which it is exposed.
Risks faced by the Company include market, geopolitical,
investment and strategic, regulatory, tax structuring and
environmental. The principal risks and uncertainties faced by
the Company are set out on the table on pages 16 and 17 and
in note 18, which provides detailed explanations of the risks
The Board seeks to mitigate and manage these risks through
continual review, policy-setting and enforcement of contractual
obligations. It also regularly monitors the investment environment
and the management of the Group’s property portfolio.
To mitigate investment and strategic risks the Board regularly
monitors the investment environment and the management
of the Company’s property portfolio. The Manager seeks to
mitigate the portfolio risks through active asset management
initiatives and carrying out due diligence work on potential
tenants before entering into any new lease agreements. All of
the properties in the portfolio are insured.
As well as considering current risks quarterly, the Board and
the Investment Manager carry out a separate assessment
of emerging risks when reviewing strategy and evaluate how
these could be managed or mitigated. However, the Board
considers that the line between current and emerging risks
already being managed to some degree where their effects are
beginning to impact.
•
and interest rate increases. This has been compounded by
a humanitarian tragedy and is already starting to have
widespread economic consequences. The Manager expects
global markets to remain volatile. From a macro-economic
perspective, higher medium-term oil, gas and food prices
Russia are likely to lead to an increase in already elevated
for economic growth. There is also the risk of further interest
rate increases. A period of prolonged instability, with impacts
for Europe in particular, is now clearly a potential outcome.
The situation is uncertain, and changing rapidly, and this may
affect real estate valuations across the Group.
• The ESG agenda is a very prominent one and will continue to
grow in its importance to shareholders, future investors and
our customers. As discussed in our ESG report on pages 26
to 30
area and we will continue to do so. The increasing market
attention being paid to climate risk, to net zero carbon
ambition and to social impact have been notable features of
the evolving agenda, and those need to be considered more
explicitly in property investment and management activity
than has been the case previously. Failure to respond to the
evolving regulatory requirements and public expectations
could have a negative effect on property valuations and
would be reputationally damaging.
its equilibrium with a clear focus on higher quality space in
central locations, as companies look to provide employees
with more structured hybrid model of operation where strong
ESG and wellbeing credentials will be essential. This will be
at the expense of lower quality stock and the emergence
of a two-tier market is likely, rebasing both capital values
and rents. There is uncertainty how this will play out and it
continues to be monitored.
• The impact of technology increasingly means that working
practices and the needs of society change very quickly which
is an opportunity as well as a risk, and it is important that we
continue to keep abreast of what is happening in this space.
This has been compounded over the last two years as the
reliance on technology, particularly with regards to home
working has increased.
Each year the Board carries out a comprehensive, robust assessment of the principal risks and
uncertainties that could threaten the Group’s success. The consequences for its business model,
liquidity, future prospects and viability form an integral part of this assessment.
Principal Risks and Future Prospects
Strategic Report
16 | CT Property Trust Limited
Strategic Report
The highest residual risks encountered during the year, how they are mitigated, and actions taken to address these are set out in the
table below.
Highest Residual Risks Mitigation Actions taken in the year
Portfolio Performance
selection, inappropriate asset allocation
and underperformance against the Index
and/or peer group. This risk may be
exacerbated by gearing levels.
pressures and increasing interest rates
Unchanged in the year
under review
The underlying investment strategy,
performance, gearing and income
forecasts are reviewed with the
Investment Manager at each Board
Meeting. The Company’s portfolio is
kept at modest levels and is monitored by
the Board.
The Manager provides regular information
on the expected level of rental income
that will be generated from underlying
properties. The exposure to individual
tenants is monitored and managed to
ensure there is no over exposure.
The Board reviewed the Manager’s
performance at quarterly Board meetings
against key performance indicators as set
out on page 14 and the ongoing strategy
is reviewed and agreed.
Performance has been strong during the
last year. Following the strategic sale of
a number of properties in recent years,
particularly smaller High Street retail, and
reinvestment into Industrial and Retail
Company has combined
exposure to the outperforming Industrial
to 73.5 per cent of the portfolio. The
Manager has also ensured that the tenant
base is of a high quality. Despite the
strong performance, Russia’s invasion
market uncertainty indicates that this risk
is unchanged.
Discount to NAV
The share price is trading at a discount
to NAV, in common with the rest of the
sector. This widened towards the year end
with growing economic uncertainty both
combined with the recent share price
volatility can diminish the attractiveness
of the Company to investors.
Unchanged in the year
under review
The discount is reported to and reviewed
by the Board regularly. Share buybacks as
a means of narrowing the discount or as
an attractive investment for the Company
are considered and weighed up against
the risks. The position is monitored by
the Manager and Broker on a daily basis
and any material changes are investigated
and communicated to the Board more
regularly.
Investors have access to the Board, the
Manager and the underlying team who will
respond to any queries they have on the
discount. The Manager and Broker meet
regularly with prospective and existing
investors to try and improve demand
for the Company’s shares. The level of
discount is kept under constant review
the
sale of a large property post year end, the
Company introduced share buybacks in
August 2022 to try and help manage this.
This continues to be closely monitored
given the volatile share price since the
has been wide since 2020 and the risk is
therefore categorised as unchanged.
Service providers and systems security
Covid-19 and the implementation of
working from home and increased
sophistication of cyber threats have
heightened risks of loss through errors,
fraud or control failures at service
providers or loss of data through
business continuity failure.
Unchanged in the year
under review
The ancillary functions of administration,
accounting and marketing services
are all carried out by the Manager. The
performance of the Manager is kept under
continual review. Any security issues
would be reported to the Board on a
timely basis.
The Management Engagement Committee
reviews the performance of third-party
service providers on an annual basis and
the Manager keeps service levels under
constant review.
The Audit and Risk Committee and
the Board have regularly reviewed the
Company’s risk management framework
with the assistance of the Manager.
Each key service provider provides
a Report on Internal Controls where
available (AAF 01/20 or similar). This will
include the controls relevant to cyber risk
where appropriate. This report is reviewed
by the relevant parties and submitted to
the Board on an annual basis.
The Manager has maintained regular
contact with its key outsourced service
providers throughout the Covid-19
pandemic and received assurances
regarding the continuity of their operations.
Vigilance remains heightened with this
risk categorised as unchanged.
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Highest Residual Risks Mitigation Actions taken in the year
ESG
Not recognising and acting upon any future
environmental, social and governance risks
which exist within the portfolio.
Failure to do so creates the risk that the
portfolio no longer remains attractive to
tenants and will not maintain its value.
There is increasing regulation and public
interest relating to ESG issues and failure
to be proactive could cause serious
reputational damage.
Unchanged in the year
under review
The Manager has a dedicated team that
works on this area and has allocated
resources over recent years into building
a comprehensive ESG plan and gathering
accurate data. The Manager also works
specialise in this area to scrutinise and
validate these plans. The Manager liaises
with tenants wherever possible to obtain
data and to carry out any necessary
enhancements.
The Company continues to make progress
and an overview of this approach is set
out in the ESG section of this report on
pages 26 to 30.
Regular reporting to the Board on
progress with implementing initiatives.
A policy on the Company’s net zero
carbon pathway is being formulated
and will be published on the Company
website.
The Manager regularly looks to engage
with tenants on ESG issues.
Strategic Report
Viability Assessment and Statement
The Board conducted this review over a 5 year time horizon, a period thought to be appropriate for a commercial property
investment company with a long term investment outlook, borrowings secured over an extended period and a portfolio with a
weighted average unexpired lease length of 6.1 years. The assessment has been undertaken taking into account the principal
risks and uncertainties faced by the Group which could threaten its objective, strategy, future performance, liquidity and solvency.
market and its resultant effect on the valuation of the investment portfolio, the level of rental income being received and the
and income receipts on the ability to repay and re-negotiate borrowings, maintain dividend payments and retain investors. These
matters were assessed over an initial period to September 2027, and the Directors will continue to assess viability over 5 year
rolling periods, taking account of foreseeable severe but plausible scenarios.
consensus forecast returns, projected out for 5 years. Based on conversations that have been held with existing lenders to
. This model uses prudent
assumptions and factors in any potential capital commitments. For the purpose of assessing the viability of the Group, the model
historically. The model projects a worst case scenario of an equivalent fall in capital and income values over the next two years,
followed by three years of zero growth.
The viability assessment modelling used the following assumptions:-
recent history) followed by zero growth for the next three years;
• tenant lease breaks to be taken at the earliest opportunity, followed by a substantial void period.
Even under this extreme model the Group remains viable with loan covenant tests passed and the current dividend rate maintained.
Based on their assessment, and in the context of the Group’s business model, strategy and operational arrangements set out
above, the Directors have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities
as they fall due over the 5 year period to September 2027. For this reason, the Board also considers it appropriate to continue
adopting the going concern basis in preparing the Annual Report and Consolidated Financial Statements, as disclosed in the
Directors’ Report on page 37.
18 | CT Property Trust Limited
Strategic Report
Manager’s Review
Matthew Howard, Fund Manager is a Director of Columbia Threadneedle Real Estate Partners (‘CT REP’) and is
the Fund Manager for CT Property Trust Limited. Matthew joined CT REP
also Deputy Fund Manager of the Balanced Commercial Property Trust until taking on the Lead Manager role
CT REP in 2017 he was a Deputy Fund Manager at Hermes
Investment Management, where he spent six years as part of the BT Pension Scheme fund management
team and launched the company’s PRS Fund. Before Hermes, Matthew worked for a substantial AIM listed
Institution of Chartered Surveyors, has an MSc in Real Estate, and holds the IMC.
Managers
on commercial real estate investment management. The team behind Columbia Threadneedle Real Estate Partners has been
offering specialist capabilities across the market, establishing strong peer to peer and occupier relationships and sourcing of a range
of transactional opportunities. The fund management team and sector heads have on average over 18 years of industry experience
each. Columbia Threadneedle Real Estate Partners undertakes fund and asset management services as well as, where appropriate,
the day to day property management, complemented by a project management team and full accounting and service charge teams.
Portfolio headlines
l
The Company’s portfolio produced a total return of 27.4 per cent over the 12 months to June
2022, versus the MSCI UK Quarterly Property Index (‘the Index’) return of 19.1 per cent.
l
The portfolio has outperformed the Index on income, capital and total return over one, three,
ten and eighteen years since inception to June 2022.
l
Two property disposals totalling £11.0m executed at a combined 9 per cent premium to NAV,
with subsequent redeployment into two accretive acquisitions totalling £19.4m.
l
Successful practical completion of major retail warehousing redevelopment project at Enterprise
Way, Luton generating exceptional returns.
l
The transactional activity and capital deployment continues the Company’s focus on growth
sectors and enhancing fund income return, demonstrated by the purchases in Banbury (Retail
Warehousing) and Heathrow (Industrial).
l
Low vacancy rate of 2.6 per cent by Estimated Rental Value, down from 4.1 per cent over the
year and considerably below the MSCI Index average of 7.8 per cent.
l
Robust rent collection for the year of 99.1 per cent and 97.7 per cent since the onset of the pandemic.
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Property Market Review
The last 12 months have seen impressive performance from
Property Index, ‘MSCI’ or ‘the Index’) with capital growth of
14.5 per cent the driving force of performance. £35
.1 billion
months of 2022, representing a 17 per cent increase on the
equivalent period in 2021.
“ The Company’s portfolio
delivered an ungeared total
return of 27.4 per cent over
the twelve months, against the
Index return of 19.1 per cent.”
As the calendar year progressed, mounting economic headwinds
in the form of geopolitical uncertainty, supply chain disruption,
begun to weigh on wider market sentiment. Investment volumes
will slow over the second half of the year with uncertainty cooling
capital markets and leading to some repricing in the latter part of
2022. As with all market cycles, there will be increased resilience
from quality assets in sustainable locations but we expect
real estate markets.
improved relative to recent periods, although working patterns
have yet to settle as companies continue to assess their real
esta
te strategies.
The industrial sector has been supported over the past decade by
the growth of e-commerce across big-box and mid-box logistics,
as well as urban sites dedicated to last-mile delivery. E-commence
now accounts for approximately 25 per cent of all retail sales
during 2020 but demonstrates an overall upward trend compared
to
19 per cent in 2019 prior to the pandemic. Consequently,
the sector has produced stellar total returns over the period
of 3
6.9 per cent. In recent years, occupier supply chains have
become increasingly sophisticated and agile and, given the
economic backdrop, ensuring supply chain resilience has been
of particular focus for operators. Indeed, H1 2022 has seen
industrial occupational take up at near-record levels with vacancy
an all time low. Economic headwinds
will inevitably present challenges to occupiers but the supply and
demand fundamentals are particularly well placed going into this
period, with tangible rental growth remaining a key feature of the
market at the time of writing.
Enterprise Way, Luton
period, with the sector generating a total return of 16.6 per cent.
The traditional High Street sector has seen some tentative signs
of recovery in the form of rental growth and yield compression,
however performance from the wider Retail sector was driven
has demonstrated its resilience and relevance as part of the
consumer supply chain, particularly ‘essential retail’ such as DIY,
attractive occupational fundamentals has seen a weight of capital
chasing the sector leading to value growth and contributing to
the sub-sector’s excellent total return of 31.8 per cent over the
will continue to underpin the sector. However, although pockets of
rental growth have been evident, rental levels are likely to come
under pressure as consumer incomes and operator margins
a
re squeezed.
20 | CT Property Trust Limited
Strategic Report
Southam Road, Banbury
Portfolio performance
The Company’s portfolio delivered an ungeared total return of
27.4 per cent over the twelve months, against the Index return
of 19.1 per cent. Capital growth from the portfolio of 21.8 per
cent was the key driver of total returns, supported by a robust
income return of 4.7 per cent, with both metrics showing material
outperformance against the Index. Indeed, the Company portfolio
has outperformed the Index on income, capital and total return
over since inception.
Portfolio
Total Portfolio Performance
June 2022 June 2021
No of properties 35 35
Valuation (£’000) 410,225 325,575
Average Lot Size (£’m) 11.7 9.3
Net Initial Yield 4.0% 4.7%
Portfolio
(%)
Index
(%)
Portfolio Capital Return 21.8 14.5
Portfolio Income Return 4.7 4.1
Portfolio Total Return 27.4 19.1
Source: Columbia Threadneedle REP PM Limited, MSCI Inc
The Company’s high exposure to the Industrial and Retail
from a weight of capital driving material yield compression, as
investors have sought exposure to the strong occupational
fundamentals and favourable performance outlook.
Limited exposure to the more muted capital returns of the High
advantage, while transactional activity has further supported
returns as we continue to position the portfolio towards growth
assets. The strategic disposals of two assets from the retail and
cent over the preceding valuations, demonstrating the liquidity of
the underlying portfolio.
Despite capital outperformance, the portfolio has also sustained
course of the year, the portfolio vacancy rate fell from 4.1 per
cent to 2.6 per cent by Estimated Rental Value (ERV), comparing
favourably to the Index average of 7.8 per cent. The sustained
low vacancy rate is testament to the quality and sectoral
constitution of the Company’s portfolio.
Geographical Analysis
as at 30 June 2022
South East 56.3%
Eastern 15.8%
London - West End 9.1%
Yorkshire and Humberside 4.6%
East Midlands 3.9%
North West 3.0%
Scotland 3.0%
Rest of London 2.3%
West Midlands 2.0%
Source: Columbia Threadneedle REP PM Limited
Sector Analysis
as at 30 June 2022
Industrial, Logistics
and Distribution 54.7%
Offices 21.6%
Out of Town Retail 18.8%
Standard Retail 4.9%
Source: Columbia Threadneedle REP PM Limited
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“ Rental payment patterns have
now normalised to pre-pandemic
levels and collection across
the Company portfolio stands
at 99.1 per cent for the twelve
”
a lower weighted credit risk than the MSCI Index, with high
portfolio. The resilience of the Company’s tenant base is borne
over the 27 months since the onset of the pandemic. Indeed,
rental payment patterns have now normalised to pre-pandemic
levels and collection across the Company portfolio stands at
“
performing assets coming from
the Industrial sector, combined
with a 54.8 per cent exposure to
the sector, it is no surprise that
this has again proven the key
driver of Company performance.
Company’s assets outperformed
their Index peers, posting a total
return of 41.0 per cent against
the Index return of 36.9 per cent.”
lease term stood at 6.1 years assuming all tenant breaks are
account of the successful conclusion of a number of proactive
asset management initiatives enhancing the portfolio’s leasing
Industrial
from the industrial sector, combined with a 54.8 per cent
exposure to the sector, it is no surprise that this has again
of the year, the Company’s assets outperformed their Index
peers, posting a total return of 41.0 per cent against the Index
return of 36.9 per cent.
Industrial, Logistics and Distribution Portfolio Performance
June 2022 June 2021
No of properties 10 9
Valuation (£’000) 224,625 153,000
Average Lot Size (£’m) 22.5 17.0
Net Initial Yield 3.0% 4.0%
Portfolio
(%)
Index
(%)
Industrials Capital Return 36.0 32.5
Industrials Income Return 3.8 3.4
Industrials Total Return 41.0 36.9
Source: Columbia Threadneedle REP PM Limited, MSCI Inc
The wider market generated capital growth of 32.5 per cent
sector’s growth potential. However, as industrial returns become
primarily focussed on income, the ability to crystallise market
rental growth into income through asset management will be key
in delivering outperformance.
“ The Company’s high exposure
to the Industrial and Retail
sectors (73.5
per cent combined) has
proven the key determinant of
outperformance.”
22 | CT Property Trust Limited
Strategic Report
During the year we completed a number of value-accretive
asset management initiatives, which supported portfolio
outperformance of 4.1 per cent over the Index. Some of the
most notable initiatives include:
• PCS Wireless, 1-2 Network, Bracknell – as Proctor &
2 approached expiry, we agreed
premium. This allowed the unit to be near-simultaneously
showing a 33 per cent uplift to previous passing rent.
Completion of this initiative generated a 16 per cent increase
in the asset valuation.
• Booker Logistics, Echo Park, Banbury – the outstanding
December 2020 rent review of this 195,000 sq ft unit was
settled at a 10 per cent uplift to the passing rent and an
11
per cent premium to the ERV. The successful conclusion
of the rent review resulted in a 19 per cent uplift to valuation,
which was highly accretive to company performance given
the asset’s relative scale as the second largest portfolio
holding.
Retail and Retail Warehouses
The portfolio’s Retail assets generated a total return of 23.8 per
cent against the Index return of 16.6 per cent, proving highly
accretive to overall Company performance. The driver of relative
sector outperformance has been the Company’s high exposure
focussed on convenience/discount-led assets let off affordable
rents, also known as ‘essential retail’. These sub-markets have
and sustainable income streams offering a yield advantage and
supported by long term residual value. As a result, portfolio Retail
course of the year.
Retail and Retail Warehouse Portfolio Performance
June 2022 June 2021
No of properties 16 16
Valuation (£’000) 97,125 77,575
Average Lot Size (£’m) 6.1 4.8
Net Initial Yield 5.8% 6.5%
Portfolio
(%)
Index
(%)
Retails Capital Return 16.2 10.6
Retails Income Return 6.6 5.5
Retails Total Return 23.8 16.6
Source: Columbia Threadneedle REP PM Limited, MSCI Inc
holdings
are focussed on convenience/
discount-led assets let off
affordable rents, also known as
‘essential retail’. These sub-
strong investor appetite due to
quality tenants and sustainable
income streams offering a yield
advantage and supported by
long term residual value. ”
(the latter accounting for 4.9 per cent of portfolio value), the
long-term rationale for holding retail assets is the yield advantage
offered by the sector as well as the resilient positioning of the
year, a number of successful initiatives have maintained a near-
zero void rate and contributed to the Retail portfolio’s income
outperformance of 1.1 per cent relative to the Index:
• B&Q, Churchill Way, Nelson
two years of their lease, close tenant engagement resulted
in an accretive lease extension. The negotiations yielded a
10-year term certain at a rental level ahead of expectation,
and appearance of the unit. The initiative contributed to an
increased property valuation of 42 per cent.
• Chobham Road, Sunningdale – 12
renewed, maintaining the passing rent, improving the unexpired
lease term and enhancing the capital value of the asset.
• Bramingham Retail Park, Enterprise Way, Luton – in August
2021, the redevelopment of the former Homebase reached
practical completion, delivering an Aldi food store and
development was delivered comfortably within budget and
was de-risked through a pre-letting. The initiative has more
than doubled the rental income and delivered an annual IRR
in
excess of 16 per cent over the development period.
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over the 12 months, lagging the Index return of 6.8 per cent.
June 2022 June 2021
No of properties 9 10
Valuation (£’000) 88,475 95,000
Average Lot Size (£’m) 9.8 9.5
Net Initial Yield 4.6% 4.3%
Portfolio
(%)
Index
(%)
1.0 3.1
4.8 3.6
5.8 6.8
Source: Columbia Threadneedle REP PM Limited, MSCI Inc
South
East, with the prime assets at Berkeley Street, London and County
House, Chelmsford accounting for more than 50
per cent by
and investor demand for prime assets in core locations showed
steady improvement throughout the period. In contrast, secondary
and tertiary assets have seen more subdued market conditions
as occupiers and investors alike grapple with structural changes
alongside concerns surrounding ESG-led obsolescence.
14
Berkeley Street proved the key driver of sector returns.
A series of successful asset management initiatives on the
multi-let holding saw the asset become fully occupied on leases
car showroom was settled at a meaningful 19 per cent uplift to
the passing rent. The culmination of the asset business plan
sale of the asset concluded post-period on 5 August 2022 at
a 5 per cent premium to the preceding valuation. Please see
‘Investment Activity’ for further information.
Following the sale of Berkeley Street, the Company’s exposure
more subdued capital growth on some of the portfolio’s regional
assets held back overall returns, close tenant engagement has
also yielded positive asset management outcomes across the
longer-term, higher-value alternative uses on account of their
attractive residual values.
Investment activity
The Company completed a number of transactions during the
period, continuing the strategy of increasing exposure to growth
sectors. The strategic down-weighting from the High Street sector
continued with the sale of High Street, Guildford which had been
void risk. The sale was completed in April 2022 at a price of
£3.1
million
most recent valuation.
required wholesale redevelopment at a scale and risk exposure
incompatible with the Company’s strategy. The asset was sold for
£7.9 million, an 8 per cent premium to the subsequent valuation.
Heathrow Truck Centre, Colnbrook
24 | CT Property Trust Limited
Strategic Report
Two strategic acquisitions were concluded in September 2021 for
a combined £19.4 million. The Company acquired a trade-led retail
warehousing scheme in Banbury for £7.325 million, occupied
rationale for the sector, offering a robust occupational underwrite
and strong residual value. Shortly thereafter, the Company
acquired a South East industrial asset for £12.1 million, adjacent
to the existing holding in Colnbrook, Heathrow. The asset offered
excellent prospects for both capital and income growth, alongside
potential for value generation through active asset management.
The two assets were accretive to both capital and income return
at portfolio level and have represented a highly effective use of
Company cash reserves with the combined assets delivering a
weighted total return of in excess of 30 per cent since acquisition
to .
0
10
20
30
40
50
60
70
25+ years15-25 years10-15 years5-10 years0-5 years
- 2022
- 2021
Lease Length
As at 30 June 2022 the weighted average lease length for the portfolio, assuming
all break options are exercised, was 6.1 years (2021: 5.9 years).
Percentage of Leases Expiring (weighted by rental value)
Source: Columbia Threadneedle REP PM Limited
holding at 14 Berkeley Street was completed post-year end in
August 2022 for £32.4 million
for sale primarily on account of its very low-yielding nature, and
into more accretive initiatives. The sale was executed following
the successful culmination of the asset business plan and was
timed to take full advantage of both asset and market cycles,
allowing us to generate a highly competitive net initial yield
of 3.1 per cent and a 5 per cent premium to valuation. The
proceeds from the sale have served to strengthen the Company
further shareholder value.
“ The portfolio’s sustained
low vacancy rate, yield
advantage and high-
quality covenants in strong
locations will serve the
Company well.”
Outlook
6 months of 2022.
However, given the weakening economic backdrop, geopolitical
no surprise that there is more caution amongst the investor
community going into the second half of the calendar year.
The expectation is that the principal impact will be on real estate
pricing rather than a wholesale slowdown in the occupational
markets, a dynamic which we have begun to witness post
year end. Through periods of uncertainty investors will look to
protect income, which will be the primary driver of returns. The
rising cost of capital and increasing gilt yields mean that yields
across the market are under pressure. Industrial, where yields
have reached historic lows over the period, has already seen
downward pricing pressure in the capital markets, particularly for
secondary or tertiary assets and where the Industrial markets
became overbought.
In this economic context, the key differentiators for the Company
will be twofold. Firstly, as returns become income-led, relative
performance will be predicated on the ability of the tenant base
sustained low vacancy rate, yield advantage and high-quality
covenants in strong locations will serve the Company well, as was
demonstrated through robust rent collection during the depths of
the pandemic. Secondly, in a lower-returning environment, portfolio
resilience will be critical in the generation of relative returns. The
Company relatively well, as the two sectors are characterised by
strong underlying occupational markets and perform an essential
function in the business and consumer supply chain.
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The portfolio has a strong pipeline of asset management
opportunities to protect and create value for the Company. In
addition, a strategic priority will be to explore some asset rotation
to enhance the portfolio’s income return and increase diversity.
The current dislocation in real estate capital markets should
present opportunities to seek value and in accordance with the
portfolio’s long term characteristics we will continue to target
strong assets in resilient locations to position the portfolio for
further growth.
There is no doubt that we are entering a period of mounting
economic headwinds and the Company will not be immune
to these pressures. Nevertheless, the portfolio has been
positioned to navigate challenging periods, as demonstrated by
the strong track record of outperformance, and I look forward
to working closely with the Board to build upon the Company’s
excellent foundations.
Matthew Howard
Columbia Threadneedle REP PM Limited
17 2022
26 | CT Property Trust Limited
Strategic Report
A summary of the Company’s approach and progress against its
ESG commitments is set out below, whilst our 2022 ESG Report
will provide more granular detail on our activities, performance
Strategic direction
The four pillars of the Company’s ESG Strategy remain
consistent with previous years:
1.
Leadership & effectiveness – measures through which
we will demonstrate effective governance in relation to
ESG criteria, a theme that is particularly pertinent to our
shareholders in the context of our outsourced investment
and property management arrangements.
2.
Investment process – Procedures through which we
integrate ESG into the investment process, ensuring that
material factors are central to investment decision-making
and property management so that relevant risks to income
and long-term performance are addressed in a timely and
3. Portfolio – attendance to and optimisation of material ESG
performance and risk factors across the portfolio, with a
energy, occupier wellbeing and satisfaction, managing
the implications of new regulations concerning minimum
energy standards for leased properties, and ensuring that
our properties are not used by organisations connected to
controversial weapons activities.
4. Transparency – approach to investor reporting and public
disclosure on relevant ESG factors, including participation
in recognised industry reporting initiatives and through
alignment to applicable standards of best practice.
Further information on the Company’s ESG approach can be
found at https://www.columbiathreadneedle.co.uk/property-
trust-limited/ri/
How the Property Manager implements ESG
VISION
DIRECTION
DELIVERY
MONITORING
METRICS
ESG Policy Statement
ESG strategic priorities
Operational tools and processes
ESG data capture and third party platforms
ESG performance and disclosure
The importance of environmental and social factors, together with the management of those factors
through corporate governance, continues to strengthen within the UK commercial property market.
The Board and its Managers remain fully committed to ensuring that material environmental,
social and governance issues are appropriately and effectively addressed, recognising that proper
integration of such matters into regular business practice is fundamental to preserving asset worth
and enhancing shareholder value.
Environmental, Social and Governance (ESG)
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Leadership and effectiveness
Global Real Estate Sustainability Benchmarking (“GRESB”)
GRESB is the dominant
global system for assessing
Environmental, Social and
Governance performance for real
estate funds. The Company’s
ambition is to realise year-on-year
improvements in score and peer
group ranking. Representing its
fourth consecutive year of participation, the Company submitted
to the 2022
70 was achieved, this outcome
allowing the Company to maintain its two green star status.
Investment process
Responsible Property Investment Framework
The Manager’s Responsible Property Investment Framework
provides the structure around which various property teams
operate, reinforcing the concept that every individual has a
contribution to make towards the successful integration of
environmental, social and governance (ESG) matters into
property investment activities. An Appraisal Tool supports
this integration. It captures a range of ESG related metrics
to produce a detailed assessment of risk and opportunity in
relation to factors considered material to future investment
as well as opportunities to improve ESG performance. These
outputs are regularly reviewed and are fully integrated into
individual annual asset business plans. The process is
similarly applied to all potential acquisitions so that thoughtful
consideration can be given to risks and opportunities prior to
executing transactions.
The Framework also provides a basis for classifying assets
according to the key ESG characteristics, principally for the
purpose of establishing materiality and allocating resources
and implementing routine actions accordingly. The Company
according to energy performance rating and/or degree of
has been minimal over the reporting period.
(distribution by number of properties)
Level 3 – where EPC rating is A+ to D
and there is no landlord energy spe
nd
Level 1 – where EPC rating is F or G
and/or annual landlord energy
spend is >£50,000
Level 2 – where EPC rating is E
and/or annual landlord energ
y spend
is between £0 and £50,000
Level
3
Asset classifications
Leve
l 2
Level
1
16
14
5
Portfolio
Active management of the environmental impacts associated
with each property asset within the portfolio is a key activity
undertaken by the Company’s property managers. Aggregated
data taken from asset-level appraisals allows for close
monitoring of overall performance and the setting of resource
reduction strategies, objectives and targets.
Environmental impacts
The Company sets year-on-year intensity-based energy, carbon,
water, and waste reduction targets for landlord procured services
which it seeks to realise though active engagement with its
local facilities managers and occupier cohort. The Company has
previously set out longer- term targets for energy and carbon
reduction in line with science-based methodologies and has
Since the last reporting year, the Company’s absolute carbon
emissions decreased by just over 37% principally on account
building services were operated at a much reduced capacity,
and from more modest reductions across the remainder of
the relevant property assets. The Company is now actively
developing its strategy for achieving net zero carbon in line with
accomplishment. The Company expects to publish its pathway in
the latter half of 2022.
Renewable energy sources
In support of the transition towards renewable energy and
has, for landlord-procured supplies, procured renewable
electricity under a and renewable
2021
28 | CT Property Trust Limited
Strategic Report
Controversial activities
certain controversial activities, the Company has adopted a
policy which prohibits the execution of new lease contracts with
organisations connected to the production, storage, distribution
or use of controversial weapons. Throughout 2021-2022, the
Company had no exposure to such organisations. Moreover, the
Company monitors tenant mix on a regular basis and exercises
discretion when considering leasing to organisations involved
in other controversial activities such as those associated with
gambling, pornography and alcohol. The Company welcomes
regular engagement with investors to understand their
expectations in this regard.
Occupier satisfaction and wellbeing
The commercial real estate industry is beginning to gain new
perspectives on the importance of the built environment
on human health and wellbeing and its link to productivity.
Acknowledging this shift in perspective, a mechanism for
undertaking occupier satisfaction surveys has been established
based on a three-yearly programme. In 2021, the Company
undertook an exercise which built on 2019 pilots which
established a baseline position and score against which to
measure improvement and compare against a benchmark index.
The 2021 results demonstrated improved performance. Further
details are included in the Company’s 2022 ESG report.
Transparency
CDP (formerly Climate Disclosure Project)
In line with its commitment, the Company submitted to the full
1 and
achieved a rating of B, indicating the taking of coordinated action
on climate issues.
activity peer group and the Company’s results is comparable to
the average performance established for Europe. The Company
result at the end of 2022.
EPRA Sustainability Best Practice Recommendations
the Company’s annual ESG Reports include disclosures which
are aligned to the 3rd Edition of the EPRA Sustainability Best
Practice Recommendations and which are
available on the Company’s website. Absolute
energy and emissions data have been
2021 report
achieved a Gold EPRA award for quality
and transparency.
GRESB Public Disclosure
GRESB undertake an annual assessment of the level of
disclosure and transparency of public listed real estate
companies. In 2021, the Company improved its rating to an
A grade, representing the highest level of transparency on
environmental, social and governance issues.
Taskforce for Climate-related Financial Disclosures (TCFD)
The Company acknowledges the recommendations of the
Financial Stability Board Task Force on Climate-Related Financial
Disclosures (TCFD) and the Company has included disclosures
in the main body of the 2022 ESG report. The Company has
expertise on the assessment and evaluation of physical climate
risks and opportunities through detailed scenario modelling and
analysis. The output from these exercises will help to support
further TCFD and CDP disclosures.
• 30% exposure to A&B rated energy
• GRESB Public Disclosure Rating of A
• Continued year-on-year improvement
in GRESB score
• 100 per cent renewable electricity
and gas supplies
Eastern Road, Bracknell
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Spotlight on
15 London Road,
Redhill
Located in Surrey and on the fringe of London’s orbital
motorway, this 14,000 sq ft mid 1970’s constructed
three-storey building, designed initially with retail space
following engagement with the occupational tenant.
In order to avoid the potential for extended litigation over historic responsibilities for the maintenance and repair of the building’s
central plant and equipment under two long but distinct occupational leases, the landlord took a proactive approach and agreed
with the tenant, as part of lease regear negotiations, that they accept a more conventional arrangement for future maintenance and
management of the refurbished building and associated services.
This fundamental agreement unlocked the opportunity to implement upgrade works to satisfy both landlord and tenant requirements.
The upgrade works included:
• repairs to the building fabric including roof coverings and windows
• replacement of central and localised heating, cooling and air
•
• Installation of two electric vehicle charging points
30 | CT Property Trust Limited
Strategic Report
Spotlight on
Enterprise Way,
Luton
Situated in close proximity to the major A6 trunk road in
the Bramingham Business District on the northern fringe
of Luton, this asset now extends to some 45,000 sq ft
across three separate lettings.
The Company’s holding is a former Homebase, where the tenant
had expressed a desire to reduce their footprint whilst retaining
representation given the strength of the trading location.
designed to accommodate their continuing presence within a
wider scheme, and phased in order to allow for continuing trading
throughout. This comprehensive redevelopment achieved practical
completion in August 2021, delivering an optimum sized Homebase
alongside an Aldi food store and Costa coffee drive-thru.
proofed environmental credentials, predicated on strong Energy
also worked closely with Costa to deliver a drive-thru development
of electric vehicle charging points across the site provide
enhanced public amenity.
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Property Sector
Properties valued in excess of £20.0 million
Colnbrook, Units 1-8 Lakeside Road Industrial, logistics and distribution
Banbury, 3663 Unit, Echo Park Industrial, logistics and distribution
London W1, 14 Berkeley Street**
Hemel Hempstead, Hemel Gateway Industrial, logistics and distribution
Eastleigh, Southampton International Park Industrial, logistics and distribution
Properties valued between £10.0 million and £20.0 million
Bracknell, 1-2 Network Bracknell, Eastern Road Industrial, logistics and distribution
Colnbrook, Heathrow Truck Centre Industrial, logistics and distribution
Luton, Enterprise Way Retail Warehouse
Basingstoke, Unit K60, Bunzl Industrial, logistics and distribution
Theale, Maxi Centre, Brunel Road Industrial, logistics and distribution
Eastleigh, Wide Lane Industrial, logistics and distribution
Milton Keynes,Site E Chippenham Drive Industrial, logistics and distribution
Chelmsford, County House, County Square
York,Clifton Moor Gate* Retail Warehouse
Andover, Keens House, Anton Mill Road
Properties valued between £5.0 million and £10.0 million
Edinburgh, 1-2 Lochside Way, Edinburgh Park
Nottingham, Standard Hill
Bromsgrove, Brook Retail Park, Sherwood Road Retail Warehouse
Banbury, Southam Road Retail Warehouse
New Malden, 7 Beverley Way Retail Warehouse
Northallerton, Willowbeck Road Retail Warehouse
Bury, Halls Mill Retail Park, Foundry Street Retail Warehouse
London, 24 Haymarket & 1-2 Panton Street Retail
Nelson, Churchill Way Retail Warehouse
Properties valued under £5.0 million
High Wycombe, Glory Park
Newbury, The Triangle, Pinchington Lane Retail Warehouse
Sunningdale, 53/79 Chobham Road, Berkshire Retail
Rayleigh, 41/47 High Street Retail
Nottingham, Park View House
Redhill, 15 London Road
Nottingham, 21/22 Long Row East and 2/6 King Street Retail
Bellshill, Mercury House, Strathclyde Business Park
Rayleigh, 81/87 High Street Retail
Kingston upon Thames, 11 Church Street Retail
Nottingham, 25-27 Bridlesmith Gate Retail
* Leasehold Property
** Disposed of in August 2022
Property Portfolio
As at 30 June 2022
32 | CT Property Trust Limited
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Southampton International Park, Eastleigh
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34 | CT Property Trust Limited
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Directors
Vikram Lall
Chairman and independent
non-executive Director
Appointed in April 2013.
and was, until 2003, an executive director of
Brewin Dolphin Holdings plc with responsibility
for many years.
Alexa Henderson*
Independent non-executive Director
and Chairman of the Audit and
Risk Committee
Appointed in December 2015.
Alexa is a member of the Institute of
Chartered Accountants of Scotland and was
is a non-executive director and Chairman of
PLC, and a non-executive director of
Smaller Companies Growth Trust PLC. She
is also a non-executive director of Bravura
Solutions Limited.
Mark Carpenter*
Independent non-executive Director
Appointed in May 2015.
Mark is a chartered surveyor and was a
Director of Investment at Nuveen Real Estate, a
global real estate asset management company,
where he was also a director of several property
funds and sat on the Investment Committee.
He retired from these roles in December 2020.
David Ross*
Independent non-executive Director
and Chairman of the Management
Engagement Committee
Appointed in March 2015.
David was a founding partner of Aberforth
Partners LLP, an investment management
companies, from which he retired in 2014.
He is a non-executive director and Chairman of
Trust plc and a non-executive director of Global
.
Rebecca Gates*
Independent non-executive Director
Appointed in March 2021 and resigned from
the Board on 31 August 2022.
Rebecca is an experienced property
professional who has spent the last 23 years
of her career in a variety of roles within the real
estate investment management business.
* Member of the Audit and Risk Committee
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Governance Report
Statement Regarding Annual Report and Consolidated
Financial Statements
Following a detailed review of the Annual Report and
Consolidated Financial Statements by the Audit and Risk
Committee, the Directors consider that taken as a whole, the
Annual Report and Consolidated Financial Statements are fair,
balanced and understandable and provide the information
necessary for shareholders to assess the Company’s
performance, business model and strategy. In reaching this
conclusion, the Directors have assumed that the reader of the
Annual Report and Consolidated Financial Statements would
have a reasonable level of knowledge of the investment industry
in general and the investment company and real estate sector
in particular.
Guernsey registration number: 41870
Results and Dividends
The results for the year are set out in the attached consolidated
The Company has paid interim dividends in the year ended
2022 as follows:
Interim Dividends 2022
Payment date
Rate
per share
Fourth interim for prior year 30 September 2021 1.0p
First interim 31 December 2021 1.0p
Second interim 31 March 2022 1.0p
Third interim 30 June 2022 1.0p
A fourth interim dividend of 1.0p was paid on 30 September
2022 to shareholders on the register on 9 September 2022.
Dividend policy
As a result of the timing of the payment of the Company’s
quarterly dividends in September, December,
dividend each year. As an alternative the Board therefore
proposes to put the Company’s dividend policy to shareholders
for approval on an annual basis. Resolution 3, which is an
ordinary resolution, relates to the approval of the Company’s
Shares are payable quarterly as interim dividends.
Principal Activity and Status
The Company is an authorised closed ended Guernsey
registered company and during the year carried on business
as a property investment company. The Company’s shares are
traded on the Main Market of the London Stock Exchange.
The principal activities of the Company’s subsidiaries are
included in note 10
Remuneration Report
The Directors’ Remuneration Report, which can be found
on pages 45 and 46, provides detailed information on the
remuneration arrangements for Directors of the Company,
including the Directors Remuneration Policy. Remuneration is
set at a level commensurate with the skills and experience
necessary for the effective stewardship of the Company and
the expected contribution of the Board as a whole in continuing
to achieve the investment objective. It is intended that this
policy will continue for the three-year period ending at the
AGM in 2023. Shareholders will also be asked to approve the
Remuneration Report (Resolution 2).
Directors
Biographical details of the Directors, all of whom are non-
executive can be found on page 34.
The Directors believe that the Board has an appropriate balance
of skills, experience, independence and knowledge of the
Company to enable it to provide effective strategic leadership
and proper guidance in relation to the Company.
Rebecca Gates resigned from the Board on 31 August 2022.
The Chairman, Vikram Lall has also advised of his intention to
retire from the Board by the AGM, having served for nine years.
An external recruitment consultant has been appointed to
assist the Board in the process of appointment of two new non-
executive Directors to the Board.
The Directors submit the Annual Report and Consolidated Financial Statements of the Company
for the year ended 30 June 2022. The Directors’ biographies; Corporate Governance Statement;
Report of the Audit and Risk Committee; and the Directors’ Remuneration Report form part of this
Directors’ Report.
Directors’ Report
Governance Report
36 | CT Property Trust Limited
Governance Report
in the Corporate Governance Statement on pages 39 to 41, the
performance of each of the remaining Directors continues to be
effective and demonstrates commitment to the role. The Board
therefore believes that it is in the interests of shareholders that
these Directors are re-elected (Resolutions 4 to 6).
Resolution 4 relates to the re-election of David Ross who has
served on the Board for over seven
experience of working in the investment management industry
and the investment company sector in particular. He is a non-
executive Director of two other investment companies.
Resolution 5 relates to the re-election of Mark Carpenter who
has served on the Board for over seven years. He has worked
in the property asset management industry for many years at a
senior level.
Resolution 6 relates to the re-election of Alexa Henderson who
has served on the Board for just under seven years. She is a
in the investment industry. She is a non-executive Director on
two other investment company Boards, one of which she serves
as Chairman.
There are no service contracts in existence between the
Company and any Director. Each of the Directors was appointed
by a letter of appointment which sets out the main terms of
their appointment. Amongst other things, the letter includes
time available to discharge their duties effectively taking into
account their other commitments. Those letters are available for
Management
The Board has appointed Columbia Threadneedle Investment
Business Limited (CTIB) (formerly
Limited) as the Company’s investment managers and Columbia
Threadneedle REP PM Limited (CT REP) (formerly
Property Management Limited) as the Company’s property
managers. CTIB and CT REP are both part of the Coumbia
Threadneedle group and, collectively, are referred to in this
document as ‘the Manager’. CTIB was appointed as the
Chairman’s Statement on page 6.
CTIB provides investment management services to the Group.
Details of the agreement between the Group and the Manager in
respect of management services provided is given in note 3 to
The Board has a Management Engagement Committee which
keeps under review the appropriateness of the Manager’s
appointment. In doing so the Committee considers the
investment performance of the Group and the capability and
resources of the Manager to deliver satisfactory investment
performance. It also considers the length of the notice period
of the investment management contract and the fees payable
to the Manager, together with the standard of the other services
provided.
The Directors are comfortable with the Manager’s ability to
deliver satisfactory investment performance, and the quality
of other services provided. It is therefore their opinion that the
continuing appointment of the Manager on the terms agreed is
in the interests of shareholders as a whole.
Depositary
in accordance with the AIFM Directive. The depositary’s
responsibilities which are set out in an Investor Disclosure
Document on the Company’s website include cash monitoring,
instruments where appropriate and monitoring the Company’s
compliance with investment limits and leverage requirements.
Share Capital
2022
1 pence each in issue. Subject to the Articles of Incorporation,
all shares rank equally for dividends and distributions and carry
one vote each and there are no restrictions concerning the
is known to the Company and there is no agreement which
the Company is party to that affects its control following a
takeover bid.
Substantial Interests in Share Capital
2022
following holdings of voting rights (under the Financial Conduct
Authority’s Disclosure Guidance and Transparency Rules):
Substantial Shareholdings
Number of
Ordinary
Shares Held
Percentage
Held
†
Aviva 19,744,695 8.2
Value and Indexed Property Income
Trus
t PLC
14,500,000 6.0
BlackRock 13,880,117 5.7
Schroders 11,335,586 4.7
2022.
Since the year-end, Value and Indexed Property Income Trust PLC
announced that they had reduced the number of voting rights
held to 6,738,972 shares (2.8%). Ameriprise Financial Inc. have
increased their voting rights to 12,201,840 (5.184%). There
have been no other
of the above holdings and no other new
the end of the year.
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Accounting and Going Concern
Shareholders will be asked to approve the adoption of the
Annual Report and Consolidated Financial Statements at the
AGM (Resolution 1). The Consolidated Financial Statements,
starting on page 55, comply with current International Financial
auditor’s opinion on the Annual Report and Consolidated
Accounts appears on pages 49 to 54.
In assessing the going concern basis of accounting the
Directors have had regard to the guidance issued by the
Financial Reporting Council. They have reviewed detailed cash
Group’s ability to pay its operational expenses, bank interest
and the debt covenants, in particular those relating to loan
Group’s ability to continue as a going concern for a period of
not less than 12 months from the date of the approval of the
appropriate to adopt the going concern basis in preparing the
viability is considered in the Viability Assessment and Statement
on page 17.
Modern Slavery Act 2015
As an investment vehicle the Company does not provide goods
or services in the normal course of business and does not have
customers or employees. Accordingly, the Directors consider
that the Company is not required to make any slavery or human
The investment manager, however, does provide goods and
services and is required to make a statement under the Modern
Slavery Act 2015 which is available at the Manager’s website at
columbiathreadneedle.com.
Future Developments of the Company
The future success of the Company is dependent primarily
on the performance of its investments. The outlook for the
Company is set out in the Chairman’s Statement on page 7
and the Manager’s Report on pages
24 and 25.
Annual General Meeting
The Notice of the Annual General Meeting, to be held on
29
November 2022 is set out on pages 77 and 78.
Directors’ Authority to Allot Shares
In accordance with the provisions of the Listing Rules, the
directors of an overseas premium listed company are not
permitted to allot new shares (or grant rights over shares) for
proportion to their existing holdings.
The Board therefore proposes a resolution at this year’s Annual
General Meeting which, if passed, will continue to disapply pre-
emption rights.
Resolution 9 therefore, gives the Directors, for the period until the
conclusion of the Annual General Meeting in 2023 or, if earlier,
on the expiry of 15 months from the passing of Resolution 10,
the necessary authority to either allot securities for cash or sell
shares held in treasury, otherwise than to existing shareholders
on a pro-rata basis, up to an aggregate nominal amount of
£234,380
Share capital of the Company (excluding treasury shares) as at
close of business on 14 2022. It is expected that the
Company will seek this authority on an annual basis.
The Directors will only allot new shares pursuant to this
authority if they believe it to be advantageous to the Company’s
shareholders to do so. Shares will be issued at above net asset
value per share and under no circumstances should this result
in a dilution to net asset value.
Directors’ Authority to Buy Back Shares
The Group did not buy back any shares during the year. Since
the year-end, the Group bought back
at an average discount to NAV of 36.1 per cent.
Resolution 10, as set out in the notice of the Annual General
Meeting, seeks renewed authority for the Company to make
market purchases of up to 14.99 per cent of the issued
31 December 2023 and the Annual General Meeting in 2023. Any
law and within any guidelines established from time to time by
the Board and the making and timing of any buy backs will be
Shares will only be made through the market for cash at prices
last calculated) where the Directors believe such purchases will
enhance shareholder value. The price paid will not be less than
the nominal value of 1p per share. Such purchases will also only
be made in accordance with the rules of the Financial Conduct
Authority which provide that the price to be paid must not be
more than 5 per cent above the average of the middle market
before the shares are purchased. Any shares purchased under
this authority will be cancelled or held in treasury. Shares will only
be re-issued out of treasury at a premium to the net asset value.
Disclosure of Information to the Auditor
• so far as each of the Directors is aware, there is no relevant
information of which the Company’s auditor is unaware; and
• each Director has taken all the steps that they ought to
have taken as a Director to make themselves aware of
any relevant audit information and to establish that the
Company’s auditor is aware of that information.
Governance Report
38 | CT Property Trust Limited
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Reappointment of Auditor and Auditor’s Remuneration
PricewaterhouseCoopers CI LLP have expressed their willingness
proposing their re-appointment will be submitted at the
Annual General Meeting and for Directors to determine their
Remuneration (Resolutions 7
and 8).
Individual Savings Accounts (‘ISAs’)
HM Revenue & Customs’ regulations for ISAs. It is the current
intention of the Directors that the Company will continue to
conduct its affairs to satisfy this requirement.
Recommendation
The Directors consider that the passing of each of the
resolutions to be proposed at the Annual General Meeting is
in the best interests of the Company and its shareholders as a
whole and they unanimously recommend that all shareholders
vote in favour of these resolutions.
V Lall
Chairman
17 2022
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Introduction
Governance Code (‘the Code’) issued by the Financial Reporting
always been the Company’s policy to comply with best practice
on corporate governance and it has in place a framework
for corporate governance which it believes is suitable for an
investment company.
The Board has also considered the principles and provisions
of the Association of Investment Companies Code of Corporate
Governance (the ‘AIC Code’) issued in February 2019 which
a framework of best practice for investment companies.
The AIC Code is available on the AIC’s website, www.theaic.co.uk.
Reporting Council’s website, www.frc.org.uk.
The Board considers that it is appropriate to report against
the principles and provisions of the AIC Code and by reference
Governance Code).
The Board has reviewed the need for an internal audit function
and deemed this function unnecessary as discussed in the
Report of the Audit and Risk Committee.
Except for the matters disclosed below, the Group has complied
2022. It is the intention of the Board that, except for the matters
disclosed below, the Group will comply fully with the AIC Code
3.
Since all the Directors are non-executive, in accordance with the
the role of the chief executive and, except in so far as they apply
to non-executive Directors, on Directors’ remuneration, are not
relevant to the Company, and are not reported on further.
The Guernsey Financial Services Commission issued a Finance
Sector Code of Corporate Governance (‘the GFSC Code’) which
Code it is deemed that it has met the requirements of the GFSC
Code and has therefore not reported further on its compliance
with that code. The GFSC Code is available on the Guernsey
Financial Services Commission’s website, www.gfsc.gg.
The Board
The Company’s Articles of Incorporation require all Directors
to retire by rotation at least every three years. However, in
accordance with the recommendations of the AIC Code, the
Board has agreed that all Directors will retire annually and, if
appropriate, seek re-election. The Board’s policy on tenure is
to the strength of the Board and, as such, no limit on the overall
length of service of any of the Company’s Directors, including
the Chairman has been imposed. The Board does not consider
that length of service affects the ability of each Director to
act independently and also considers that each Director is
independent in character and judgement and there are no
relationships or circumstances relating to the Company or the
Manager which are likely to affect their judgement.
Due to the size of the Board and the fact that all Directors are
non-executive, the Directors do not consider it appropriate for a
Senior Independent Director to be appointed as recommended
by provision 14 of the AIC Code.
The Board consists solely of non-executive Directors of which Mr
Lall is Chairman. All Directors are considered by the Board to be
2. New Directors will receive an induction from the
Manager and Secretary on joining the Board, and all Directors
receive other relevant training as necessary.
The basis on which the Group aims to generate value over the
longer term is set out in its objective and investment policy
as contained on page 10. A management agreement between
the Group and its Manager sets out the matters over which
the Manager has authority and the limits beyond which Board
approval must be sought. All other matters, including strategy,
investment and dividend policies, gearing and corporate
governance procedures and risk management, are reserved
for the approval of the Board of Directors. The Board currently
meets at least quarterly and receives full information on the
Group’s investment performance, assets, liabilities and other
relevant information in advance of Board meetings.
AIFMD
under the AIFMD issued by the European Parliament, and which
must appoint a Depositary and an Alternative Investment Fund
Manager (“AIFM”). The Board remains fully responsible for all
aspects of the Company’s strategy, operations and compliance
with regulations. The Manager is the Company’s AIFM.
Corporate Governance Statement
Governance Report
40 | CT Property Trust Limited
Governance Report
A company director has a statutory obligation to avoid a situation
in which he or she has, or potentially could have, a direct or
relating to the Company’s Directors.
directorships and appointments, no authorisations have been
sought. They are reviewed throughout the year at each Board
also comply with the statutory rules requiring company directors
to declare any interest in an actual or proposed transaction or
arrangement with the Company. In the year under review there
have been no instances of a Director being required to be
excluded from a discussion or abstain from voting because of a
Committees
Throughout the year a number of committees have been in
operation. The committees are the Property Valuation Committee,
the Audit and Risk Committee, the Management Engagement
Committee and the Nomination Committee. The Committees
As stated in the Directors’ Remuneration Report on pages 45
and 46, the full Board determines the level of Directors’ fees and
accordingly there is no separate Remuneration Committee.
The table below sets out the number of scheduled Board and
Committee meetings attended by each Director during the year.
Directors’ attendance for the year ended 30 June 2022
Board
Property
Valuation
Committee
Audit
and Risk
Committee
Management
Engagement
Committee
Nomination
Committee
No of meetings 4 3 3 1 1
V Lall
(1)
4 3 n/a 1 1
D Ross 4 3 3 1 1
M Carpenter 4 3 3 1 1
A Henderson 4 3 3 1 1
R Gates 4 3 3 1 1
In additonal to the scheduled meetings detailed above, there
were a further 11 Board Meetings and 1 Board Committee
Meeting held during the year.
(1)
V Lall is not a member of the Audit and Risk Committee.
Property Valuation Committee
The Property Valuation Committee comprised all of the Directors
and was chaired by Mr Mark Carpenter. During the year, the
Committee reviewed the quarterly property valuation report
produced by the valuer and at least one Director attended
each of the valuation meetings.
A decision was taken during
the year to cover the business of this committee in the full
Board meeting. There will not be a separate Property Valuation
Committee moving forward.
Audit and Risk Committee
The Report of the Audit and Risk Committee is contained on
pages 42 to 44.
Management Engagement Committee
The Management Engagement Committee is chaired by Mr David
Ross and comprises the full Board.
The Board keeps the appropriateness of the Manager’s
appointment under review. In doing so the Board reviews
performance quarterly and considers the past investment
performance of the Company and the capability and resources
of the Manager to deliver satisfactory investment performance
in the future. It also reviews the fees payable to the Managers
together with the standard of the other services provided.
Nomination Committee
The Nomination Committee comprises all of the Directors and
is chaired by Mr Vikram Lall. The Board considers that, given
its size, it would be unnecessarily burdensome to establish a
separate nomination committee which did not include the entire
Board and believes that this enables all Directors to be kept fully
informed of any issues that arise.
The Committee is convened for the purpose of ensuring that
plans are in place for orderly succession of appointments to the
Board. Appointments to the Board are based on merit, but in
considering appointments the Nomination Committee also takes
into account the ongoing requirements of the Company and the
need to have a balance of skills, experience, independence,
diversity (including gender, race, ethnicity, socio-economic
background, religion, sexual orientation, age or physical ability),
and knowledge of the Company within the Board. The Committee
is mindful of the recommendations of the Hampton Alexander
Review “improving gender balance in FTSE Leadership”, in
particular the recommendation that a Board should have at least
33 per cent female representation and the Board comprised
Directors, three male and two female during the year. The Board
is conscious of the diversity targets set out in the FCA Listing
Rules and the Board complies with the AIC Code of Corporate
Governance in appointing appropriately diverse, independent
Report and Accounts 2022 | 41
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Governance Report
non-executive Directors who set the operational and moral
standards of the Company. The Board will always appoint the
best person for the role and will not discriminate on the grounds
of gender, race, ethnicity, socio-economic background, religion,
sexual orientation, age or physical ability.
new appointments, these Directors receive an induction from
the Manager and Company Secretary on joining the Board.
All Directors receive other relevant training, collectively or
individually, as necessary.
The Committee is using an independent recruitment consultant,
Cornforth Consulting, for the latest Board appointments. The
Committee is currently looking to recruit two Directors and will
interview a number of potential candidates after producing a
short list from an extensive long list, provided by Cornforth.
Each year, the performance of the Board, committees and
individual Directors are evaluated through an assessment
process, led by the Chairman. The performance of the Chairman
is evaluated by the other Directors.
It had been the intention of the Board to use an external
consultant this year to evaluate the Board, however, the Board
is currently being refreshed and this will be a more worthwhile
exercise when the two new Directors have been appointed and
had time to establish themselves. It is therefore intended that
this exercise will commence in the latter half of 2023.
Individual Directors may, at the expense of the Group, seek
independent professional advice on any matter that concerns
them in the furtherance of their duties. The Group maintains
Relations with Shareholders
The Company proactively seeks the views of its shareholders
and places great importance on communication with them. The
Board receives regular reports from the Manager and brokers on
the views of shareholders, and the Chairman and other Directors
make themselves available to meet shareholders when required
shareholder concerns and queries. The Notice of Annual
General Meeting to be held on 29 November 2022 is set out
on pages
77 and 78. It is hoped that this will provide a forum,
both formal and informal, for shareholders to meet and discuss
issues with the Directors and Manager of the Company. The
Annual Report and Notice of Annual General Meeting are posted
to shareholders at least 20 working days before the Annual
General Meeting.
V Lall
Chairman
17 2022
Governance Report
42 | CT Property Trust Limited
Governance Report
Role of the Committee
During the year, the Audit and Risk Committee comprised all
of the Directors except the Chairman of the Board, Mr V Lall.
The Audit and Risk Committee is chaired by Ms A Henderson, a
Chartered Accountant and member of ICAS, who has recent and
The duties of the Audit and Risk Committee in discharging
its responsibilities include reviewing the Annual Report and
Consolidated Financial Statements and Interim Consolidated
Financial Statements, the system of internal controls and
the terms of appointment of the auditor together with its
remuneration. It is also the forum through which the external
auditor reports to the Board of Directors. The Committee reviews
the scope and results of the audit, its cost-effectiveness and
the independence and objectivity of the external auditor, with
particular regard to non-audit fees. The committee meets at
least three times a year including at least two meetings with the
auditor, PricewaterhouseCoopers CI LLP (“PwC”).
The Audit and Risk Committee met on three occasions during
the year and the attendance of each of the members is set
out on page 40. In the course of its duties, the Committee had
direct access to PwC and senior members of the Manager’s
investment company team. Amongst other things, the Audit and
Risk Committee considered and reviewed the following matters
and reported thereon to the Board:
statements and results announcements;
• the accounting policies of the Group;
• the principal risks faced by the Group and the effectiveness
of the Group’s internal control and risk environment including
consideration of the assumptions underlying the Board’s
Statement on Viability;
• the effectiveness of the external audit process and related
non-audit services and the independence and objectivity of
PwC, their remuneration and terms of engagement;
• the policy on the engagement of PwC to supply non-audit
services and approval of any such services;
• the implications of proposed new accounting standards and
regulatory changes;
• the receipt of Report on Internal Controls in accordance with
AAF (01/20) for the period 1 November 2020
2021 from the Manager; and
• whether the Annual Report is fair, balanced and
understandable.
Letter from the Financial Reporting Council (‘FRC’)
The FRC reviewed the Company’s Annual Report and Accounts
review, there were no questions or queries that they wished to
raise. They did, however, note a number of minor matters, where
improvements to our existing disclosures and these have been
incorporated this year.
External audit process
As part of its review of the scope and results of the audit, during
the year the Audit and Risk Committee considered and approved
2022. At the conclusion of the audit, PwC did
not highlight any issues to the Audit and Risk Committee which
would cause it to qualify its audit report, nor did it highlight
any fundamental internal control weaknesses. PwC issued an
49 to 54.
Non-audit services
In relation to the provision of non-audit services by the auditor,
it has been agreed that all non-audit work to be carried out by
the auditor must be approved in advance by the Audit and Risk
Committee and any special projects must also be approved in
advance. PwC did not receive any non-audit fees for the year
2022 (2021: nil).
Auditor assessment, independence and appointment
The Audit and Risk Committee reviews the re-appointment
of the auditor every year. As part of the review of auditor
are independent of the Group and have complied with relevant
auditing standards. In evaluating PwC, the Audit and Risk
Committee has taken into consideration the standing, skills
assesses the effectiveness of the audit process through the
reporting it receives from PwC in respect of the year-end Annual
Report and Consolidated Financial Statements. The Committee
carrying out its responsibilities.
PwC have been auditor to the Group since the year ended 30
Lisa McClure has been
appointed as audit engagement partner and the 2022 audit
ear of involvement. The Audit and Risk Committee
recomends PwC for reappointment at the next Annual General
Meeting. PwC’s performance will continue to be reviewed
annually taking into account all relevant guidance and best
practice.
Report of the Audit and Risk Committee
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Governance Report
Internal Controls and Risk Management
The Board is responsible for the Group’s system of internal
control and for reviewing its effectiveness. It has therefore
established an ongoing process designed to meet the particular
needs of the Group in managing the risks to which it is exposed,
consistent with internal control guidance issued by the Financial
Reporting Council.
The process is based principally on the Manager’s existing
risk-based approach to internal control whereby a risk matrix
Manager and other service providers, and the individual activities
undertaken within those functions. From this, the Board
manage those risks. The Audit and Risk Committee reviews
the risk matrix on a regular basis and reports any issues to
the Board.
The Board also monitors the investment performance of the
Group against its stated objective and comparable companies.
The Board also reviews the Group’s activities since the last
Board meeting to ensure that the Manager adheres to the
agreed investment policy and approved investment guidelines
and, if necessary, approves changes to the guidelines.
In addition, the Board receives quarterly reports from the
Company Secretary in respect of compliance matters and duties
performed on behalf of the Group.
A formal annual review of these procedures is carried out by the
Audit and Risk Committee. The Committee has also reviewed the
Manager’s Report on Internal Controls in accordance with AAF
(01/20) (‘AAF’) for the year 1 November 2020
2021
that has been prepared for their investment company clients.
Containing a report from independent external accountants, the
report sets out the Manager’s control policies and procedures
Governance Report
Matter Action
Valuation of the Investment Property Portfolio
The Group’s property portfolio accounted for
95.1
2022
of the investment property portfolio is inherently
the valuers. Errors in the valuation could have a
material impact on the Group’s net asset value.
Further information about the property portfolio
and inputs to the valuations are set out in note 9
deeds are held by the Group’s property lawyers.
The Board and Audit and Risk Committee reviewed the outcomes of the
valuation process throughout the year and discussed the detail of each of
the quarterly valuations with the Manager at Board Meetings. The Manager
liaises with the valuers on a regular basis and meets with them prior to the
production of each quarterly valuation. The Board was represented at all of
including the meeting in advance of the production of the year end valuation.
In addition, this is the main area of audit focus and, accordingly, the Audit and
Risk Committee receives detailed verbal and written reports from PwC on this
matter. PwC also met with the valuers as part of the year-end process.
Loan Arrangements
The Group has £110 million of loan facilities:
£90 million term loan with Canada Life and a £20
million revolving credit facility with Barclays Bank.
£7 million of the revolving credit facility was drawn
2022 and has subsequently been
repaid in September 2022. The loan facilities are
subject to various covenants, a breach of which
could result in early repayment or penalties.
The Board and Audit and Risk Committee review the bank covenants which
they have complied with throughout the year to ensure the risk of any breach
Income Recognition
Incomplete or inaccurate recognition could have
an adverse effect on the Group’s net asset value,
earnings per share and dividend cover.
The Board review the revenue forecast on a quarterly basis to ensure that the
level of income is able to sustain the dividend. They also review the level and
speed of income collection
those tenants that are greater than 90 days
in arrears with rent.
44 | CT Property Trust Limited
Governance Report
with respect to the management of clients’ investments and
maintenanl records. The effectiveness of these
controls is monitored by the Manager’s group audit and risk
committee which receives regular internal audit reports from its
Risk and Control Services function. Procedures are in place to
capture and evaluate and weaknesses and ensure
or weaknesses in respect of the
this report. The depositary reports to the Board and carries out
daily independent checks on cash and investment transactions
and is liable for any loss of assets.
These review procedures have been in place throughout the year
and up to the date of approval of the Annual Report, and the
These procedures are designed to manage rather than eliminate
risk and, by their nature can only provide reasonable, but not
absolute, assurance against material misstatement or loss.
The Audit and Risk Committee has reviewed the need for an
internal audit function. It has decided that the systems and
procedures employed by the Manager and the Company Secretary,
including their internal audit functions and the work carried out by
sound system of internal control, which safeguards the Group’s
Group is therefore considered unnecessary.
Committee evaluation
The activities of the Audit and Risk Committee were considered
as part of the Board appraisal process completed in accordance
with standard governance arrangements. A full evaluation was
undertaken on effectiveness, roles and responsibilities of the
Committee in accordance with the Financial Reporting Council’s
current guidance. The evaluation found that the Committee
functioned well with the right balance of membership and skills.
A Henderson
Chairman of the Audit and Risk Committee
17 2022
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Governance Report
The Board comprises only non-executive Directors. The
Company has no executive Directors or employees. For these
reasons, it is not considered appropriate to have a separate
Remuneration Committee. The full Board determines the level of
Directors’ fees.
Full details of the Company’s policy with regards to Directors’
2022,
are shown below. No major decisions or substantial changes
relating to Directors’ remuneration were made during the year.
Directors’ Remuneration Policy
The Board considers the level of Directors’ fees at least
annually. Its policy is that the remuneration of the Directors
Directors’ responsibilities and skills, the time commitment
required, and be fair and comparable with that of other similar
companies. Furthermore, the level of remuneration should be
the Group
There were no changes to the policy during the year.
The fees for the Directors are determined within the limit set out
in the Company’s Articles of Incorporation. The present limit is
an aggregate of £200,000 per annum and may not be changed
without seeking shareholder approval at a general meeting.
It is the Board’s policy that Directors do not have service
contracts, but each new Director is provided with a letter of
appointment. The Directors’ letters of appointment are available
hours and will be available for 15 minutes prior to and during the
forthcoming Annual General Meeting.
The terms of Directors’ appointments provide that Directors
should retire by rotation at least every three years and be
subject to re-election. However, in accordance with the
recommendations of the AIC Code, the Board has agreed that
all Directors will retire annually and be subject to re-election
at the Annual General Meeting. There is no notice period
and no provision for compensation upon early termination
of appointment.
The Board has not received any direct communications
from the Company’s shareholders in respect of the levels of
Directors’ remuneration.
Future Policy Report
The Board reviewed the Directors fees levels taking into account
comparable fees in the sector. After detailed discussion, it
was concluded that Directors fees should be increased by
approximately 7.5 per cent for 2022/23.
Based on this, Directors’ remuneration for the forthcoming
Annual fees for Board Responsibilities
2023
£
2022
£
Chairman 40,500 37,500
Chairman of Audit and Risk Committee 35,000 32,500
Director 34,000 31,500
Annual Report on Directors’ Remuneration
Directors’ Emoluments for the Year
The Directors who served during the year received the following
emoluments in the form of fees:
Fees
2022
£
2021
£
A Gulliford (retired 10 March 2021) – 21,016
V Lall 37,500 36,250
D Ross 31,500 30,500
M Carpenter 31,500 30,500
A Henderson 32,500 31,500
R Gates (appointed 10 March 2021) 31,500 9,463
Total 164,500 159,229
Directors’ Remuneration Report
Governance Report
46 | CT Property Trust Limited
Governance Report
Directors’ Shareholdings
as follows:
Directors’ share interests
2022
Ordinary
Shares
2021
Ordinary
Shares
V Lall 143,765 143,765
D Ross 120,000 120,000
M Carpenter 20,000 20,000
A Henderson 37,575 37,575
R Gates (resigned 31 August 2022) Nil Nil
There have been no changes to Directors’ shareholdings since
Company Performance
The Board is responsible for the Group’s investment strategy
and performance, although the management of the Group’s
investment portfolio is delegated to the Manager through the
investment management agreement, as referred to on page 64.
An explanation of the performance of the Company for the year
2022 is given in the Chairman’s Statement and
Manager’s Review.
Voting at Annual General Meeting
At the Company’s last Annual General Meeting, held on
17 November 2021, shareholders approved the Directors’
2021. 99.4 per cent of votes were in favour of the resolution and
0.6 per cent were against.
An ordinary resolution for the approval of this Directors’
Remuneration Report will be put to shareholders at the
forthcoming Annual General Meeting (Resolution 2).
V Lall
Chairman
17 2022
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The Directors are responsible for preparing the Annual Report
and Consolidated Financial Statements in accordance with
applicable law and regulations. They are also responsible for
ensuring that the Annual Report includes information required
by the Listing Rules and Disclosure Guidance and Transparency
Rules of the Financial Conduct
Authority.
Guernsey company law requires the Directors to prepare
consolidated
accordance with International Financial Reporting Standards as
The consolidated
a true and fair view of the state of affairs of the Group and of the
In preparing these consolidated
Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
unless it is inappropriate to presume that the Group will
continue in business.
requirements in preparing the consolidated
The Directors are responsible for keeping adequate accounting
transactions and disclose with reasonable accuracy at any
(Guernsey) Law, 2008. They have a general responsibility for
taking such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud and
other irregularities.
The Directors are also responsible for ensuring that the Group
complies with the provisions of the Listing Rules and the
Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority which, with regard to corporate governance,
require the Group to disclose how it has applied the principles,
Governance Code applicable to the Group.
The Directors are responsible for the maintenance and integrity
Company’s website, which is maintained by the Manager.
Legislation in Guernsey governing the preparation and
dissemination
in other jurisdictions.
Statement under Disclosures Guidance and Transparency
Rule 4.1.12
Each of the Directors listed on page 34
of their knowledge:
• the consolidated
included in the consolidation taken as a whole and comply
with the Companies (Guernsey) Law, 2008; and
• the Strategic Report (comprising the Chairman’s Statement,
Business Model and Strategy, Promoting the Success of the
Company, Key Performance Indicators, Principal Risks and
Future Prospects, Manager’s Review, Environmental, Social
and Governance and Property Portfolio) and the Report of
the Directors’ includes a fair review of the development and
performance of the business and the position of the Group
and the undertakings included in the consolidation taken as
a whole together with a description of the principal risks and
uncertainties that it faces; and
details of related party transactions; and
• the Annual Report and consolidated
taken as a whole, are fair, balanced and understandable
and provide the information necessary for shareholders to
assess the Group’s position and performance, business
model and strategy.
V Lall
Chairman
17 2022
Statement of Directors’ Responsibilities
Governance Report
48 | CT Property Trust Limited
Xxxx
3663 Unit, Echo Park, Banbury
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Independent Auditor’s Report
Report on the audit of the
Our opinion
(the “company”) and its subsidiaries (together “the group”) as at
accordance with International Financial Reporting Standards
prepared in accordance with the requirements of The Companies
(Guernsey) Law, 2008.
What we have audited
• the consolidated statement of comprehensive income for the
year then ended;
• the consolidated statement of changes in equity for the year
then ended;
ended; and
information.
Basis for opinion
standards are further described in the
Auditor’s responsibilities
section of
our report.
and appropriate to provide a basis for our opinion.
Independence
requirements that are relevant to our audit of the consolidated
our other ethical responsibilities in accordance with these
Independence Rules.
Our audit approach
Overview
Audit scope
• Group audit scoping was performed based on total assets
held within each of the three components all of which are
statements based on information provided by the appointed
service providers to the group to whom the board of
directors has delegated the provision of certain functions,
including Columbia Threadneedle Investment Business
“Investment Manager”), Columbia Threadneedle REP PM
Limited
“Property Valuer”).
Key audit matters
• Revenue recognition
Materiality
3.4 million) based on 1% of total assets.
• Performance materiality: GBP 3.2 million.
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the consolidated
directors made subjective judgements; for example, in respect
assumptions and considering future events that are inherently
uncertain, and we considered the risk of climate change and the
potential impact thereof on our audit approach. As in all of our
audits, we also addressed the risk of management override of
internal controls, including among other matters, consideration
of whether there was evidence of bias that represented a risk of
material misstatement due to fraud.
Independent Auditor’s Report to the members
Real Estate Investments Limited)
Auditor's Report
50 | CT Property Trust Limited
Independent Auditor’s Report
Key audit matters
resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
Valuation of Investment Properties as at 30 June 2022
Please refer to note 1(f) and 9
statements.
The group’s Investment Properties represent the majority of the
The valuation of the group’s investment property portfolio is
inherently subjective due to, among other factors, the individual
nature of each property, its location and the expected future
rental income for that particular property.
the fact that only a small percentage difference in individual
property valuation assumptions, when aggregated, could result
focus and attention to this area.
The valuations of the group’s investment property portfolio
were carried out by the Property Valuer. The Property Valuer was
engaged by the Investment Manager on behalf of the group and
performed its work in accordance with the latest version of the
RICS Valuation – Global Professional Standards (known as the
“Red Book”) current as at the valuation date.
In determining a property’s valuation, the Property Valuer takes
the current tenancy agreements and rental income earned by
the property. The Property Valuer then applies assumptions
in relation to capitalisation rates and current market rent and
growth, based on available market data and transactions, to
arrive at a range of valuation outcomes, from which they derive
a point estimate. Due to the unique nature of each property,
the assumptions applied take into consideration the individual
property characteristics at a tenant level, as well as the qualities
information is also used in the assessment of the valuation of
the group’s investment properties.
Understanding
controls relating to the valuation of investment properties.
Objectivity and experience of the Property Valuer
and expertise and read their terms of engagement with the group
to determine whether there were any matters that might have
affected their objectivity or may have imposed scope limitations
upon their work.
External valuation report
the Property Valuer and understood that the valuation approach
for each property was in accordance with professional valuation
standards and suitable for use in determining the fair value of
Investment Properties as
critical accounting
judgements and estimates and investment properties). These
relation to the valuation of investment properties included in the
Property Valuer by the group, and on a sample basis, agreed the
factual inputs to underlying property records held by the group.
Assumptions
critique and challenge the work performed and assumptions used
by the Property Valuer. In particular, we compared the valuation
also challenged both management and the Property Valuer on
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Key audit matter How our audit addressed the key audit matter
The group has adopted the assessed values determined by the
Property Valuer, adjusted for lease incentives.
audit matter.
Due to the subjectivity involved in determining valuations
for individual properties and the existence of alternative
assumptions and valuation methods, we determined a range
of values that were considered reasonable to evaluate the
independent property valuations used by management and also
the assumptions used in the valuations were supportable in
light of available and comparable market evidence.
with governance.
Revenue Recognition
Revenue for the group consists primarily of rental income.
The revenue recognition policy is stated in note 1(c) to the
Rental income is based on tenancy agreements where there
is a standard process in place for recording revenue. The
majority of the group’s revenue is collected and managed by the
Property Manager.
In addition to the standard process for recording rental income,
the group manually calculates the spreading of lease incentives
to ensure revenue is recorded on a straight-line basis over the
course of the lease.
Due to the importance of rental income to the group’s ability to
statements, we have deemed this area to be a key audit matter.
To address the completeness of rental income, we have
reconciled the rental tenancy schedule to the schedule of
investment properties owned by the group and the rent
performed digitally enabled procedures to match the journals
posted to the cash ledger directly to the amounts in the bank
statements.
To address the accuracy, cut off and occurrence of rental
income, we have tested a sample of rental income per the
accounting records to signed lease agreements and rent review
and that the lease incentive has been appropriately recognised
on a straight-line basis over the appropriate lease term.
with governance.
Auditor's Report
52 | CT Property Trust Limited
Independent Auditor’s Report
How we tailored the audit scope
enough work to be able to give an opinion on the consolidated
structure of the group, the accounting processes and controls,
and the industry in which the group operates.
Materiality
These, together with qualitative considerations, helped us
to determine the scope of our audit and the nature, timing
statement line items and disclosures and in evaluating the effect
of misstatements, both individually and in aggregate on the
Based on our professional judgement, we determined materiality
Overall group
materiality
GBP 4.3 million (2021: GBP 3.4 million).
How we determined it
1% of total assets
Rationale for
benchmark applied
We believe that total assets is the primary
measure used by the shareholders in assessing
the performance of the group. We did not apply a
statement of comprehensive income. We believe
to address the risk of material misstatement in
the consolidated statement of comprehensive
income.
low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality.
scope of our audit and the nature and extent of our testing of
account balances, classes of transactions and disclosures,
materiality was 75% (2021:75%) of overall materiality, amounting
to GBP 3.2 million (2021: GBP 2.6 million) for the group
statements.
In determining the performance materiality, we considered
a number of factors – the history of misstatements, risk
assessment and aggregation risk and the effectiveness of
controls - and concluded that an amount at the upper end of our
normal range was appropriate.
above GBP 213k (2021: GBP 173k) as well as misstatements
below that amount that, in our view, warranted reporting for
qualitative
reasons.
Reporting on other information
The other information comprises all the information included in
the Annual Report and Consolidated Financial Statements (the
statements and our auditor’s report thereon. The directors are
responsible for the other information.
cover the other information and we do not express any form of
assurance conclusion thereon.
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information
statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required to
responsibilities.
Responsibilities for the consolidated
Responsibilities of the directors and those charged with
As explained more fully in the Statement of Directors’
Responsibilities the directors are responsible for the
a true and fair view in accordance with International Financial
requirements of Guernsey law and for such internal control as
the directors determine is necessary to enable the preparation
misstatement, whether due to fraud or error.
are responsible for assessing the group’s ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated
free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be
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Independent Auditor’s Report
of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a
limited number of items for testing, rather than testing complete
testing based on their size or risk characteristics. In other cases,
we will use audit sampling to enable us to draw a conclusion
about the population from which the sample is selected.
As part of an audit in accordance with ISAs, we exercise
professional judgement and maintain professional scepticism
• Identify and assess the risks of material misstatement of
or error, design and perform audit procedures responsive to
appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
•
audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the group’s internal control.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
doubt on the group’s ability to continue as a going concern
over a period of at least twelve months from the date of
conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related
conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or
conditions may cause the group to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content
statements represent the underlying transactions and events
in a manner that achieves fair presentation.
within the group to express an opinion on the consolidated
solely responsible for our audit opinion.
among other matters, the planned scope and timing of the
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
of the current period and are therefore the key audit matters.
regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to
Use of this report
This report, including the opinions, has been prepared for and
only for the members as a body in accordance with Section
262 of The Companies (Guernsey) Law, 2008 and for no other
responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Report on other legal and regulatory requirements
Company Law exception reporting
report to you if, in our opinion:
• we have not received all the information and explanations we
require for our audit;
• proper accounting records have not been kept; or
with the accounting records.
Auditor's Report
54 | CT Property Trust Limited
Independent Auditor’s Report
Corporate governance statement
The Listing Rules require us to review the directors’ statements
in relation to going concern, longer-term viability and that part of
the corporate governance statement relating to the company’s
with respect to the corporate governance statement as other
information are described in the Reporting on other information
section of this report.
The company has reported compliance against the 2019
AIC Code of Corporate Governance (the “Code”) which has
the purposes of meeting the company’s obligations, as an
investment company, under the Listing Rules of the FCA.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the corporate
governance statement included within the Strategic Report is
and our knowledge obtained during the audit, and we have
nothing material to add or draw attention to in relation to:
robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those
principal risks, what procedures are in place to identify
emerging risks and an explanation of how these are being
managed or mitigated;
statements about whether they considered it appropriate to
adopt the going concern basis of accounting in preparing
to the group’s ability to continue to do so over a period
of at least twelve months from the date of approval of the
• The directors’ explanation as to their assessment of the
group’s prospects, the period this assessment covers and
why the period is appropriate; and
• The directors’ statement as to whether they have a
reasonable expectation that the company will be able to
continue in operation and meet its liabilities as they fall due
over the period of its assessment, including any related
or assumptions.
viability of the group was substantially less in scope than an
audit and only consisted of making inquiries and considering the
directors’ process supporting their statements; checking that
the statements are in alignment with the relevant provisions of
the Code; and considering whether the statement is consistent
and understanding of the group and its environment obtained in
the course of the audit.
In addition, based on the work undertaken as part of our audit,
we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the
during the audit:
• The directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary for
the members to assess the group’s position, performance,
business model and strategy;
• The section of the Annual Report that describes the review
of effectiveness of risk management and internal control
systems; and
• The section describing the work of the Audit and Risk
Committee.
report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a
the Listing Rules for review by the auditors.
Other matter
In due course, as required by the Financial Conduct Authority
Disclosure Guidance and Transparency Rule 4.1.14R, these
Mechanism of the Financial Conduct Authority in accordance
with the ESEF Regulatory Technical Standard (“ESEF RTS”). This
auditor’s report provides no assurance over whether the annual
Lisa McClure
For and on behalf of PricewaterhouseCoopers CI LLP
Chartered Accountants and Recognised Auditor
Guernsey Channel Islands
18 2022
Report and Accounts 2022 | 55
Financial Report
Governance Report Auditor's Report Notice of AGM Other InformationStrategic ReportOverview Financial Report
Notes
2022
£’000
2021
£’000
Revenue
Rental income 17,869 16,836
2 Other income 607 –
Total revenue 18,476 16,836
Gains/(losses) on investment properties
9 Gains/(losses) on sale of investment properties realised 772 (1,304 )
9 Unrealised gains on revaluation of investment properties 71,767 12,926
Total income 91,015 28,458
Expenditure
3 Investment management fee (2,380 ) (1,932 )
4 Other expenses (1,568 ) (2,154 )
Total expenditure (3,948 ) (4,086 )
87,067 24,372
Interest receivable 5 2
5 Finance costs (3,434 ) (3,341 )
(3,429 ) (3,339 )
83,638 21,033
6 Taxation (235 ) (187 )
83,403 20,846
8 Basic and diluted earnings per share 34.6 8.7
All items in the above statement derive from continuing operations.
The accompanying notes 1 to 23
Consolidated Statement of
Comprehensive Income
For the year ended 30 June
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56 | CT Property Trust Limited
Financial Report
Notes
2022
£’000
2021
£’000
Non-current assets
9 Investment properties 405,875 321,886
11 Trade and other receivables 4,734 3,292
Current assets
11 Trade and other receivables 2,418 3,431
12 Cash and cash equivalents 13,563 16,631
Total assets 426,590 345,240
Non-current liabilities
13 Interest-bearing bank loan (89,999 ) (89,722 )
14 Trade and other payables (1,137 ) (890 )
(91,136 ) (90,612 )
Current liabilities
14 Trade and other payables (8,768 ) (8,631 )
13 Interest-bearing bank loan (6,915 ) –
Tax payable (186 ) (187 )
(15,869 ) (8,818 )
Total liabilities (107,005 ) (99,430 )
Net assets 319,585 245,810
Represented by:
15 Share capital 2,407 2,407
Special distributable reserve 177,161 177,161
Capital reserve 136,283 63,744
Revenue reserve 3,734 2,498
Equity shareholders’ funds 319,585 245,810
16 Net asset value per share 132.8 p 102.1 p
17 2022 and
signed on its behalf by:
V Lall, Director A Henderson, Director
The accompanying notes 1 to 23
Consolidated
Balance Sheet
As at 30 June
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Financial Report
For the year ended 30 June 2022
Notes
Share
Capital
£’000
Special
Distributable
Reserve
£’000
Capital
Reserve
£’000
Revenue
Reserve
£’000
Total
£’000
At 1 July 2021 2,407 177,161 63,744 2,498 245,810
– – – 83,403 83,403
Total comprehensive income for the year – – – 83,403 83,403
7 Dividends paid – – – (9,628 ) (9,628 )
Transfer in respect of gains on investment properties – – 72,539 (72,539 ) –
At 30 June 2022 2,407 177,161 136,283 3,734 319,585
For the year ended 30 June 2021
Notes
Share
Capital
£’000
Special
Distributable
Reserve
£’000
Capital
Reserve
£’000
Revenue
Reserve
£’000
Total
£’000
At 1 July 2020 2,407 177,161 52,122 916 232,606
– – – 20,846 20,846
Total comprehensive income for the year – – – 20,846 20,846
7 Dividends paid – – – (7,642 ) (7,642 )
Transfer in respect of gains on investment properties – – 11,622 (11,622 ) –
At 30 June 2021 2,407 177,161 63,744 2,498 245,810
The accompanying notes 1 to 23
Consolidated Statement of
Changes in Equity
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58 | CT Property Trust Limited
Financial Report
Notes
2022
£’000
2021
£’000
83,638 21,033
Adjustments for:
9 (Gains)/losses on sale of investment properties realised (772 ) 1,304
9 Unrealised gains on revaluation of investment properties (71,767 ) (12,926 )
(Increase)/decrease in operating trade and other receivables (429 ) 502
Increase in operating trade and other payables 384 2,241
Interest received (5 ) (2 )
5 Finance costs 3,434 3,341
Taxation paid (236 ) (258 )
14,247 15,235
9 Purchase of investment properties (20,737 ) –
9 Capital expenditure (1,547 ) (5,816 )
9 Sale of investment properties 10,834 4,287
Interest received 5 2
(11,445 ) (1,527 )
7 Dividends paid (9,628 ) (7,642 )
Bank loan interest paid (3,242 ) (3,161 )
13 Bank loan drawn, net of costs – Barclays Loan 7,000 –
(5,870 ) (10,803 )
Net (decrease)/increase in cash and cash equivalents (3,068 ) 2,905
Opening cash and cash equivalents 16,631 13,726
Closing cash and cash equivalents 13,563 16,631
The accompanying notes 1 to 23
Consolidated Statement of
Cash Flows
For the year ended 30 June
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Financial Report
1. Accounting policies
A summary of the principal accounting policies, all of which have been applied consistently throughout the year, is set out below.
(a) Basis of accounting
(i) Statement of compliance
requirements of the Companies (Guernsey) Law, 2008 and the Listing Rules of the Financial Conduct Authority. The consolidated
year for the Group. Therefore, there is no requirement to present individual accounts for the Company
(ii) Basis of preparation
investment properties which have been measured at fair value.
where otherwise indicated.
(iii) Going concer n
After making enquiries, and bearing in mind the nature of the Group’s business and assets, the Directors consider that the Group
has adequate resources to continue in operational existence for the next twelve months from approval of the consolidated
statements. In assessing the going concern basis of accounting the Directors have had regard to the guidance issued by the
Financial Reporting Council. They have considered the current cash position of the Group, forecast rental income and other forecast
future, which is considered to be for a period of at least twelve months from the date of approval of the
statements. For this reason, they continue to adopt the going concern basis in preparing the .
(iv) Critical accounting estimates and judgements
Estimates and judgments are continually evaluated and are based on historical experience as adjusted for current market conditions
and other factors.
• The fair value of investment properties is determined by using valuation techniques. For further details of the estimates and
assumptions made, see note 1(f) and 9. The Group uses external professional valuers to determine the fair value amounts.
Notes to the Consolidated
Financial Statements
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60 | CT Property Trust Limited
Financial Report
1. Accounting policies (continued)
(v) Changes in accounting policies
New standards and interpretations
The following
2022, and have not been adopted early:
4) and
• Annual improvements to IFRS’s 2018-2020 Cycle
The Board do not consider that the future adoption of any new standards, in the form currently available, will have any material impact
(b) Basis of consolidation
an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect
statements from the date that control commences until the date that control ceases.
(c) Revenue recognition
Rental income, excluding VAT, arising on investment properties is accounted for in the Consolidated Statement of Comprehensive
Income on a straight-line basis over the lease term of ongoing leases. Incentives for lessees to enter into lease agreements are
spread evenly over the lease term, even if payments are not made on such a basis. The lease term is the non-cancellable period
of the lease together with any further term for which the tenant has the option to continue the lease, where, at the inception of the
lease, the Directors are reasonably certain that the tenant will exercise that option.
Surrender premiums received by the Group following the break of a lease are recognised immediately wiin the
Consolidated Statement of Comprehensive Income to the extent that there are no obligations directly related to that surrender.
The Directors have not presented a separate column for revenue and capital on the Consolidated Statement of Comprehensive
Directors do not deem this information to be
material to the reader.
Interest income is accounted for on an accruals basis.
(d) Expenses
all other expenses are charged through the Consolidated Statement of Comprehensive Income.
(e) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other periods
and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the consolidated balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in
for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged
or credited in the Consolidated Statement of Comprehensive Income, except when it relates to items charged or credited directly to
equity, in which case the deferred tax is also dealt with in equity.
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1. Accounting policies (continued)
Entry to UK-REIT Regime
and prior to 1 April 2022, corporation tax was incurred by the Company if it made a distribution to a
Substantial Shareholder unless the Company had taken reasonable steps to avoid such a distribution being paid. A Substantial
Shareholder was
a company’s share capital; or (iii) controls 10 per cent or more of the voting rights in a company. The background to the charge
recognised that in certain circumstances such shareholders resident in jurisdictions with particular double tax agreements with the
could
From 1 April 2022, the ‘holder of excessive rights’ charge was removed. Prior to this a tax charge would be imposed paid in relation
to the dividends which were paid to a Substantial Shareholder. The amount of the tax charge was calculated by reference to the total
dividend that was paid to the Substantial Shareholder and was not restricted to the excess over 10 per cent.
Givenhad deemed the Aviva Group to be a Substantial Shareholder, the Company agreed to make
distributions to such Shareholder provided that it held no more than 21 per cent of the issued share capital of the Company at the
(f) Investment properties
occupied for use by, or in the operations of, the Group, nor for sale in the ordinary course of business, but are held to earn rental
income together with the potential for capital and income growth.
Investment properties are initially recognised at cost, being the fair value of consideration given, including transaction costs
associated with the investment property. Any subsequent capital expenditure incurred in improving investment properties is
capitalised in the period incurred and included within the book cost of the properties.
After initial recognition, investment properties are measured at fair value, with unrealised gains and losses recognised in the
Consolidated Statement of Comprehensive Income and transferred to the Capital Reserve. Fair value is based on the open market
consolidated balance sheet date using recognised valuation
techniques. These techniques comprise both the Traditional Method and the Discounted Cash Flow Method. In some cases, the
fair values are determined based on recent real estate transactions with similar characteristics and location to those of the Group’s
assets.
property valuers is reduced by the carrying amount of any accrued income resulting from the spreading of capital and rental lease
incentives and/or minimum lease payments.
environmental matters and the overall repair and condition of the property) and discount rates applicable to those assets. These
estimates are based on local market conditions existing at the consolidated balance sheet date.
Techniques used for valuing investment property
to value the property on this basis is to capitalise net rental income on the basis of an Initial Yield, generally referred to as the
‘All Risks Yield’ approach or ‘Net Initial Yield’ approach.
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62 | CT Property Trust Limited
Financial Report
1. Accounting policies (continued)
less vacancy and collection losses and less operating expenses/outgoings. A series of periodic net operating incomes, along
with an estimate of the reversion/terminal/exit value (which uses the traditional valuation approach) anticipated at the end of
the projection period, are discounted to present value. The aggregate of the net present values equals the market value of the
property and deductions for purchase costs.
• The Comparison Method uses data from recent market transactions and is mainly used for the fair value calculation of residential
properties.
The fair value of investment properties is measured based on each property’s highest and best use from a market perspective and
stated at fair value.
Comprehensive Income and transferred to the Capital Reserve.
Recognition and derecognition generally occurs on the exchange of signed contracts between a willing buyer and a willing seller.
Any investment properties on which contracts for sale have been exchanged but which had not completed at the year end are
disclosed as properties held for sale and stated at fair value less selling costs.
(g) Fair value measurement
at fair value. Accounting standards recognise a hierarchy of fair value measurements for assets and liabilities within the hierarchy
which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the
lowest priority to unobservable inputs (Level 3).
Level 1
instruments would be investments listed or quoted on any recognised stock exchange.
Level 2
the period of investment. Examples of such instruments would be those for which the quoted price has been suspended, forward
exchange contracts and certain other derivative instruments.
Level 3 – External inputs are unobservable. Value is the Directors’ best estimate, based on advice from relevant knowledgeable
experts, use of recognised valuation techniques and on assumptions as to what inputs other market participants would apply in
pricing the same or similar instrument. All investments in direct property are included in Level 3.
13. Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
(h
) Cash and cash equivalents
Cash and cash equivalents consist of cash in hand at bank and short-term deposits in banks with an original maturity of three
months or less.
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1. Accounting policies (continued)
(i) Trade and other receivables
Trade receivables, which are generally due for settlement at the relevant quarter end, are recognised and carried at the original
invoice amount less an allowance for any uncollectable amounts. Trade and other receivables are written off when there is no
reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among others, the
as non collectable. The Group considers that a default on a trade and other receivables is when the counterparty fails to make
contractual payments within 90 days of when they fall due. Incentives paid to tenants are recognised as current and non-current
assets and amortised over the period from the date of lease commencement to the earliest termination date.
(j) Trade and other payables
Rental income received in advance represents the pro-rated rental income invoiced before the year-end that relates to the period
an accruals basis and include amounts which are due for settlement by the Group as at the year-end and are generally carried at the
original invoice amount. An estimate is made for any services incurred at the year-end but for which no invoice has been received.
(k) Interest-bearing loans
All loans are initially recognised at cost, being the fair value of the consideration received, net of arrangement costs associated with
the borrowings. After initial recognition, all interest-bearing loans are subsequently measured at amortised cost using the effective
interest method. Amortised cost is calculated by taking into account any loan arrangement costs and any discount or premium on
settlement.
recognised at amortised cost with any charges associated with early redemption being taken to the Consolidated Statement of
Comprehensive Income.
(l) Operating lease contracts
The Group leases out its investment property portfolio. The Group has determined, based on an evaluation of the terms and
for the leases of its investment properties to lessees as operating leases which recognise rental income over the life of the lease
and property.
(m) Reserves
Share capital
Special distributable reserve
The special reserve is a distributable reserve to be used for all purposes permitted under Guernsey law, including the buy back of
shares and the payment of dividends.
this account subsequent to its initial recognition in the share capital account.
Capital reserve
The following are accounted for in this reserve:
– gains and losses on the disposal of investment properties
– increases and decreases in the fair value of investment properties held at the year-end.
Revenue reserve
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64 | CT Property Trust Limited
Financial Report
2. Other income
2022
£’000
2021
£’000
Dilapidation income 607 –
3. Investment management
2022
£’000
2021
£’000
Investment management fee 2,380 1,932
The fees of any managing agents appointed by the Manager are payable out of the investment management fee. The Group’s
Manager receives a fee of 0.6 per cent per annum of the Total Assets including cash held provided that no fee is payable on any
cash held in excess of 5 per cent of the net assets of the Group. Following discussions with the Manager, it has been agreed that
the
The notice period in relation to the termination of the investment management agreement is six months by either party. The
investment management agreement may be terminated earlier provided that a payment in lieu of notice, equivalent to the amount
the Investment Manager would otherwise have received during the notice period, is made.
4. Other expenses
2022
£’000
2021
£’000
Direct operating expenses of let rental property 641 680
Direct operating expenses of vacant property 371 166
Credit loss provision* (425) 380
Valuation and other professional fees 266 245
Directors’ fees 165 159
Administration fee 113 110
Auditor’s remuneration for:
– statutory audit 90 83
Other 347 331
1,568 2,154
* The credit loss provision is rent and service charge receivable that was greater than 90 days overdue. The credit loss provision for 2022 has reversed provisions
accrued in 2021 as lessees have paid rents (see note 11).
Valuers fees
cent of the aggregate value of the property portfolio paid quarterly.
Administration fee
The Manager also receives an administration fee, which from 11 April 2013 was rebased to £100,000 per annum. This fee is
5. Finance costs
2022
£’000
2021
£’000
Interest on interest-bearing bank loans 3,244 3,160
Amortisation of loan set up costs 184 181
Commitment commission 6 –
3,434 3,341
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6. Taxation
2022
£’000
2021
£’000
Corporation tax charge in respect of distributions to holders of excessive rights 235 187
Total tax charge 235 187
A reconciliation of the tax charge applicable to the results from ordinary activities at the statutory
tax rate to the charge for the year is as follows:
83,638 21,033
UK tax at an effective rate of 19.0 per cent (2021: 19.0 per cent) 15,891 3,996
Effects of:
UK REIT exemption on net income (2,109) (1,788)
Capital gains on investment properties not taxable (13,782) (2,208)
Corporation tax charge in respect of distributions to holders of excessive rights 235 187
Total tax charge 235 187
REIT tax status. These conditions were met in the year and the Board intends to conduct the Group’s affairs such that these
conditions continue to be met.
a category B collective investment vehicle, as are its subsidiaries.
7. Dividends and property income distributions gross of income tax
2022
£’000
2021
£’000
Property Income Distributions:
Fourth interim for the prior year of 1.00 pence per share paid on 30 September 2021 (2020: 0.625 pence) 2,407 1,504
First interim of 1.00 pence per share paid on 31 December 2021 (2020: 0.85 pence) 2,407 2,046
Second interim of 1.00 pence per share paid on 31 March 2022 (2021: 0.85 pence) 2,407 2,046
Third interim of 1.00 pence per share paid on 30 June 2022 (2021: 0.85 pence) 2,407 2,046
9,628 7,642
A fourth interim dividend totalling 1.0 pence per share was paid on 30 September 2022 to shareholders on the register on
9
September 2022. Although this payment of £2.42022, under IFRS it will be accounted
2023
8. Earnings per share
2022 2021
83,403 20,846
Return per share – pence 34.6 8.7
Weighted average number of ordinary shares in issue during year 240,705,539 240,705,539
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66 | CT Property Trust Limited
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9. Investment properties
2022
£’000
2021
£’000
Freehold and leasehold properties
Opening market value 325,575 312,285
Purchase of investment properties 20,737 –
Capital expenditure 1,547 5,816
Sales – net proceeds (10,834) (4,287)
– gains/(losses) on sale 2,111 (4,786)
Unrealised (gains)/losses realised during the year (1,339) 3,482
Unrealised gains on investment properties 77,353 22,407
Unrealised losses on investment properties (5,586) (9,481)
Movement in lease incentive receivable 661 139
Closing market value 410,225 325,575
Adjustment for lease incentives (4,350) (3,689)
Balance sheet fair value 405,875 321,886
2022
£’000
2021
£’000
Gains/(losses) on sale 2,111 (4,786)
Unrealised (gains)/losses realised during the year (1,339) 3,482
Gains/(losses) on sale of investment properties realised 772 (1,304)
2022
£’000
2021
£’000
Unrealised gains on investment properties 77,353 22,407
Unrealised losses on investment properties (5,586) (9,481)
Unrealised gains on revaluation of investment properties 71,767 12,926
2022 by RICS Registered Valuers engaged by,
Chartered Surveyors. All such valuers are chartered surveyors, being members of the Royal Institution of Chartered Surveyors
2 on an open market basis in
accordance with the requirements of the Appraisal and Valuation Manual published by the RICS. Fair value is determined on a market
value basis in accordance with International Valuation Standards, as set out by the International Valuation Standards Committee. The
valuation is prepared on an aggregated ungeared basis. It is also determined using market based evidence, which is the amount for
which the assets could be exchanged between a knowledgeable, willing buyer and a knowledgeable, willing seller in an arm’s length
transaction as at the valuation date. The critical estimates and techniques made in valuing the properties are detailed in Note 1(f).
The market value of these investment properties amounted to £410,225,000 (2021: £325,575,000), however an adjustment has
been made for lease incentives of £4,350,000 (2021: £3,689,000) that are already accounted for as an asset.
The property valuer is independent and external to the Group and the Manager.
The property valuer takes account of deleterious materials included in the construction of the investment properties in arriving at its
estimate of open market valuation, when the Manager advises the presence of such materials. In arriving at their estimates of market
values, the valuers have used their market knowledge and professional judgement and not only relied on historical transactional
comparables.
The Group has entered into leases on its property portfolio as lessor (See note 20 for further information). All leasehold investment
properties have more than 60 years remaining on the lease term. All of the properties per fair value band are shown on page 31.
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9. Investment properties (continued)
There are no restrictions on the realisability of the Group’s investment properties or on the remittance of income or proceeds of
liquidity risk, note 18. There is also uncertainty in respect of valuations as detailed in market risk, note 18.
19, the Group is under no contractual obligations to purchase, construct or
develop any investment property. The majority of leases are on a full repairing basis and as such the Group is not liable for costs in
respect of repairs, maintenance or enhancements to such properties.
transfers between Levels during the year. Investment properties have been classed according to their real estate sector. Information
Sector
Valuation
£’000
Assumption Range*
2022
Weighted
Average Range*
2021
Weighted
Average
Retail 20,150
(2021: 23,475)
Current Net Rental Income per square foot
(‘psf’) per annum
Estimated Net Rental Value psf per annum
Net Initial Yield
Equivalent Yield
£10-£122
£11-£74
4.5%-12.0%
4.5%-8.2%
£40
£37
7.1%
6.9%
£10-£122
£11-£76
3.0%-10.8%
4.3%-8.4%
£35
£38
6.7%
6.4%
Retail Warehouse
76,975
(2021: 54,100)
Current Net Rental Income psf per annum
Estimated Net Rental Value psf per annum
Net Initial Yield
Equivalent Yield
£10-£31
£10-£30
4.1%-7.1%
4.5%-6.3%
£17
£17
5.4%
5.2%
£9-£40
£10-£29
2.4%-10.0%
5.4%-8.2%
£16
£16
6.3%
6.3%
88,475
(2021: 95,000)
Current Net Rental Income psf per annum
Estimated Net Rental Value psf per annum
Net Initial Yield
Equivalent Yield
£6-£67
£4-£79
2.4%-19.1%
3.2%-10.5%
£33
£40
4.6%
5.0%
£5-£63
£4-£79
(1.2%)-17.7%
3.3%-10.5%
£27
£37
4.3%
5.4%
Industrial,
Logistics and
Distribution
224,625
(2021: 153,000)
Current Net Rental Income psf per annum
Estimated Net Rental Value psf per annum
Net Initial Yield
Equivalent Yield
£3-£20
£8-£32
0.9%-3.8%
3.3%-4.1%
£9
£13
3.0%
3.8%
£6-£11
£6-£13
2.8%-4.8%
4.0%-4.8%
£8
£10
4.0%
4.5%
* The ranges are based on averages per property and include properties which were vacant at the date of valuation. Individual tenancies within properties may fall outside
these ranges.
For the majority of properties the fair value was determined by using the industry accepted methods. This means that valuations
into consideration. In determining the net initial yield, or capital value per square foot, the valuers may have regard to the terms of
any existing lease including current rental values, lease length and covenant strength, along with assumptions regarding estimated
rental values, rental growth rates, vacancy rates and void or rent free periods expected after the end of each lease.
Sensitivity analysis
There are interrelationships between the yields and passing rental values as they are partially determined by market rate conditions.
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9. Investment properties (continued)
Estimated movement in fair value
of investment properties at
30 June 2022 arising from:
Retail
£’000
Retail
Warehouse
£’000
£’000
Industrial,
Logistics and
Distribution
£’000
Total
£’000
Increase in passing rental value by 5% 934 3,849 4,424 11,231 20,438
Decrease in passing rental value by 5% (934) (3,849) (4,424) (11,231) (20,438)
Increase in net initial yield by 0.5% (1,222) (6,502) (8,642) (32,005) (48,371)
Decrease in net initial yield by 0.5% 1,407 7,824 10,741 44,760 64,732
Estimated movement in fair value
of investment properties at
30 June 2021 arising from:
Retail
£’000
Retail
Warehouse
£’000
£’000
Industrial,
Logistics and
Distribution
£’000
Total
£’000
Increase in passing rental value by 5% 1,174 2,705 4,750 7,650 16,279
Decrease in passing rental value by 5% (1,174) (2,705) (4,750) (7,650) (16,279)
Increase in net initial yield by 0.5% (1,632) (3,950) (9,841) (17,119) (32,542)
Decrease in net initial yield by 0.5% 1,895 4,625 12,412 22,054 40,986
This represents the Group’s best estimate of a reasonable possible shift in passing rental values and net initial yield, having regard
to historical volatility of the value and yield.
10. Investment in subsidiary undertakings
The Company owns 100 per cent of the issued ordinary share capital and voting rights of the following companies: IRP Holdings
Limited (‘IRPH’) and IPT Property Holdings Limited (‘IPTH’). IRPH and IPTH are companies incorporated in Guernsey whose principal
business is that of an investment and property company.
11. Trade and other receivables
Non-current
2022
£’000
2021
£’000
Capital and rental lease incentive 3,597 2,402
Cash deposits held for tenants 1,137 890
4,734 3,292
Current
2022
£’000
2021
£’000
Capital and rental lease incentive 754 1,287
Cash deposits held for tenants 214 158
Rents receivable 980 1,422
Credit loss provision (164) (583)
Other debtors and prepayments 634 1,147
2,418 3,431
Capital and rental lease incentives consist of £3,658,000 (2021: £2,782,000) being the prepayments for rent-free periods
recognised over the life of the lease and £693,000 (2021: £907,000) relating to capital incentives paid to tenants.
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11. Trade and other receivables (continued)
Rents receivable, which are generally due for settlement at the relevant quarter end, are recognised and carried at the original invoice
amount less an allowance for any uncollectable amounts. The credit loss provision is rent and service charge receivable that was
greater than 90 days overdue (see note 18 – Credit Risk). The movement in provision is shown in the table below.
Credit loss provision
2022
£’000
2021
£’000
Accumulated credit loss provision as at 1 July 583 421
Credit loss provision (reversed)/recognised during the year, net (425) 380
Amounts reversed/(written off) during the year as uncollectable 6 (218)
Accumulated credit loss provision as at 30 June 164 583
12. Cash and cash equivalents
All cash balances were held in cash, current accounts or in banks on short term deposits with an original maturity of three months or
less at the year-end.
13. Interest-bearing loans
2022
£’000
2021
£’000
Canada Life loan
Principal amount outstanding 90,000 90,000
Set up costs (1,497) (1,497)
Accumulated amortisation of set up costs 908 771
Accrued interest on bank loan 588 588
Total Canada Life loan due 89,999 89,862
2022
£’000
2021
£’000
Barclays loan
Principal amount outstanding 7,000 –
Set up costs (232) (221)
Accumulated amortisation of set up costs 102 55
Accrued variable rate interest on bank loan 45 26
Total Barclays loan due 6,915 (140)
Total interest-bearing bank loans 96,914 89,722
£90 million Canada Life Loan 2026
non-amortising term loan facility agreement with Canada Life.
Canada Life provided committed funds on 9 November 2015 and IRPH drew down the loan in full on 13 November 2015. Interest is
• the loan to value percentage does not exceed 55 per cent;
• the projected interest cover is greater than 2.0 times on any calculation date; and
• the actual interest cover is greater than 2.3 times on any calculation date.
All the applicable Canada Life loan covenants have been complied with during the year.
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13. Interest-bearing loans (continued)
2022, based on the yield on the Treasury 2% 2025 which would
be used as the basis for calculating the early repayment of such loan plus the appropriate margin would be £93,443,000. The
the hierarchy of fair value measurement.
£20 million Barclays Loan 2025
agreement with Barclays. This loan facility expires on 27 March 2025 and can be drawn down or repaid at anytime. il
28
November 2021, interest accrued
lending costs.
From 29 November 2021, the 3 monthompounded Rate. The margin is
1.7 per cent per annum for the duration of the loan and is payable quarterly2022 £7 million of the RCF was drawn
2021: £nil drawn down). The RCF drawn of £7 million was repaid in September 2022.
This Barclays
to this loan, IPTH is to ensure that at all times:
• the loan to value percentage does not exceed 60 per cent;
• the historic and projected interest cover is greater than 2.0 times; and
• the qualifying net rental income for the preceding 12 month period is greater than £2,500,000.
All the applicable Barclays loan covenants have been complied with during the year.
2022.
Analysis of movement in interest-bearing loans is shown below:
2022
Interest-bearing
loans
£’000
2021
Interest-bearing
loans
£’000
Opening balance 89,722 89,542
Cash movement 7,000 –
Loan set-up costs (11) –
Amortisation of loan set-up costs 184 180
Movement in accrued loan interest 19 –
Closing balance 96,914 89,722
14. Trade and other payables
Non-current
2022
£’000
2021
£’000
Rental deposits 1,137 890
Current
2022
£’000
2021
£’000
Rental income received in advance 3,067 2,895
Rental deposits 214 158
VAT payable 745 281
Manager’s fees payable 1,282 2,441
Other payables 3,460 2,856
8,768 8,631
The Company’s payment policy is to ensure settlement of supplier invoices in accordance with stated terms.
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15. Share capital and capital risk management
2022
£’000
2021
£’000
Allotted, called-up and fully paid
240,705,539 (2021: 240,705,539) Ordinary Shares of 1 pence each in issue 2,407 2,407
2021: nil).
Capital Risk Management
The objective of the Company is to provide ordinary shareholders with an attractive level of income together with the potential for
has responsibility for ensuring the Company’s ability to continue as a going concern. This involves the ability to issue and buy back
share capital within limits set by shareholders in a general meeting; borrow monies in the short and long term; and pay dividends
out of reserves all of which are considered and approved by the Board on a regular basis. Dividends are set out in note 7 to the
3.
The capital of the Group is managed in accordance with its investment policy, in pursuit of its investment objective, both of which are
detailed in the Business Model and Strategy on page 10 and in note 1(m). An EGM was held on the 9 September 2021 at which an
amendment to the Company’s investment policy was proposed, the principal purpose of which was to remove weighting limits applied
to the commercial property sectors in which the Company invests. The resolution was passed with 99.97 per cent approval. No other
changes were made to the objectives, policies or processes during the years end
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, issue new shares, manage
the Group’s discount to net asset value and monitor the Group’s gearing level. The Group’s gearing, represented by borrowings as
a percentage of investment properties, may not exceed 60 per cent however, it is the Board’s present intention that borrowings will
be limited to a maximum of 40 per cent of total assets at the time of borrowing. The gearing level, net of cash, at the year-end is
shown
below:
2022
£’000
2021
£’000
Loans 96,914 89,722
Less net current assets excluding current Barclays loan (7,027) (11,244)
Total (a) 89,887 78,478
Investment properties (b) 405,875 321,886
Net Gearing (c = a/b) (c) 22.1% 24.4%
16. Net asset value per share
2022 2021
Net asset value per ordinary share – pence 132.8p 102.1p
Net assets attributable at the year end 319,585,000 245,810,000
Number of ordinary shares in issue at the year end 240,705,539 240,705,539
17. Related Parties and Transactions with the Manager
The Directors are considered to be the Group’s key management personnel. No Director has an interest in any transactions which are,
from their shareholdings in the Company and these fees are disclosed in note 4. No fees remained payable at the year end.
Transactions between the Company and the Manager are detailed in note 3 on management fees and note 14 on fees payable to
the Manager at the consolidated balance sheet date. The existence of an independent Board of Directors demonstrates that the
to be a related party.
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18. Financial Risk Management
its operations.
(including currency risk, price risk and 2
1 as assets and liabilities are maintained in Sterling.
The Board reviews and agrees policies for managing the Group’s risk exposure and these policies are summarised below and
have remained unchanged for the year under review. These disclosures include, where appropriate, consideration of the Group’s
integral to the Group’s overall risk exposure.
stays within these limits.
Market Risk
Sensitivities to market risks included below are based on a 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 – for example, changes in interest rate and changes in
foreign currency rates.
The Group’s strategy for the management of Market Risk is driven by the investment policy as outlined within the Business
Model and Strategy on page 10. The management of Market Risk is part of the investment management process and is typical of
commercial property investment. The portfolio is managed with an awareness of the effects of adverse valuation movements through
detailed and continuing analysis, with an objective of maximising overall returns to shareholders.
Price Risk
valuations are subject to substantial uncertainty. There is no assurance that the estimates resulting from the valuation process
appointment of external property valuers. The basis of valuation of the property portfolio is set out in detail in the accounting policies
and note 9.
Interest rate risk
The Group’s exposure to interest rate risk relates primarily to the Group’s borrowings. Interest rate risk on the £90 million Canada
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18. Financial Risk Management (continued)
Total
£’000
Fixed
rate
£’000
Variable
rate
£’000
Weighted
average
interest rate
%
Weighted
average
period for
which rate
(years)
2022
Financial assets
Cash 13,563 – 13,563 0.05 –
Financial liabilities
Canada Life loan (89,999) (89,999) – 3.36 4.4
Barclays loan (6,915) – (6,915) 3.00 –
2021
Financial assets
Cash 16,631 – 16,631 0.00 –
Financial liabilities
Canada Life loan (89,862) (89,862) – 3.36 5.4
Credit risk
Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with
the Group.
The Group had no ations of credit risk as the Group has a diverse tenant portfolio. The largest single tenant at the
year end accounted for 7.8 per cent (2021: 7.4 per cent) of the current annual rental income.
The Manager has a credit department which has set out policies and procedures for managing exposure to credit. Some of the
processes and policies include:
• an assessment of the lessee’s credit worthiness and its ability to pay is performed before the lease is granted;
• where appropriate, guarantees and collateral is held against such receivables;
• after granting the credit, the credit department assess the age analysis on a monthly basis and follow up on all outstanding
payments; and
• management of the credit department determine the appropriate provision, receivables which should be handed over for
collection and which amounts should be written off. The default provision is when the receivables are greater than 90 days. The
Board will approve the procedures and amounts.
In the event of default by an occupational tenant, the Group will suffer a rental shortfall and incur additional costs, including
legal expenses in maintaining, insuring and re-letting the property. The Board receives regular reports on concentrations of risk
and any tenants in arrears. The Manager monitors such reports in order to anticipate, and minimise the impact of, defaults by
occupational tenants.
2022 was
£816,000 (2021: £839,000). The maximum credit risk is stated after deducting an impairment provision of £164,000 (2021:
£583,000nil was subsequently written off and £6,500 has been recovered.
Deposits refundable to tenants may be withheld by the Group in part or in whole if receivables due from the tenant are not settled or
in case of other breaches of contract.
institutions may cause the Group’s ability to access cash placed on deposit to be delayed or limited. Should the credit quality or the
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74 | CT Property Trust Limited
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18. Financial Risk Management (continued)
consider the residual credit risk to be minimal.
Liquidity risk
Property in which the Group invests is not traded in an organised public market and may be illiquid. As a result, the Group may not
be able to quickly liquidate its investments in these properties at an amount close to their fair value in order to meet its liquidity
requirements.
The Group’s liquidity risk is managed on an ongoing basis by the Manager and monitored on a quarterly basis by the Board. In order
meet its obligations for a period of at least twelve months from the date of approval of the Consolidated Financial Statements.
In certain circumstances, the terms of the Group’s bank loans (detailed in note 13) entitle the lender to require early repayment, for
example if covenants are breached, and in such circumstances the Group’s ability to maintain dividend levels and the net asset value
At the reporting date, the Group’s assets and liabilities were (on a contractual maturity basis):
Financial Assets
Three
months
or less
£’000
Between
three months
and one year
£’000
Between
one year
£’000
More than
£’000
Total
£’000
2022
Cash and cash equivalents 13,563 – – – 13,563
Rent receivable and credit loss provision 816 – – – 816
Cash deposits held for tenants 32 182 499 638 1,351
2021
Cash and cash equivalents 16,631 – – – 16,631
Rent receivable and credit loss provision 839 – – – 839
Cash deposits held for tenants 5 153 401 489 1,048
Financial liabilities
Three
months
or less
£’000
Between
three months
and one year
£’000
Between
one year
£’000
More than
£’000
Total
£’000
2022
Canada Life bank loan 1,310 2,165 96,677 – 100,152
Barclays loan 7,034 – – – 7,034
Trade and other payables 3,493 1,463 499 638 6,093
2021
Canada Life bank loan 1,310 2,165 11,591 90,997 106,063
Trade and other payables 2,861 2,594 401 489 6,345
19. Capital commitments
2022 (2021: £nil).
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20. Lease length
The Group leases out its investment properties under operating leases.
The total future income based on the lessor lease length (all break options being exercised) at the year-end was as follows (based on
annual rentals):
2022
£’000
2021
£’000
Less than one year 17,753 15,530
Later than one year and no later than two years 17,227 13,430
Later than two years and no later than three years 14,384 11,943
Later than three years and no later than four years 12,193 9,488
10,562 7,542
45,027 38,632
Total 117,146 96,565
The largest single tenant at the year end accounted for 7.8 per cent (2021: 7.4 per cent) of the current annual rental income.
noccupied property expressed as a percentage of estimated total rental value was 2.6 per cent at the year-end (2021: 4.1 per
cent).
The Group has entered into commercial property leases on its investment property portfolio as a lessor. These properties, held under
operating leases, are measured under the fair value model as the properties are held to earn rentals.
21. Operating segments
operating decision maker of the Group. The key measure of performance used by the Board to assess the Group’s performance is
the total return of the Group’s net asset value, as calculated under IFRS, and therefore no reconciliation is required between the
22
2022 (2021: same), participated in any: repurchase transactions; securities lending
or borrowing; buy-sell back transactions; margin lending transactions; or total return swap transactions (collectively called SFT). As
23. Subsequent events
Disposal of 14 Berkeley Street
London’s Mayfair. The freehold asset represents the third largest holding in the Company’s portfolio by capital value. The disposal
timed to take full advantage of both the asset and market cycles. This has enabled the Company to secure a strong net initial yield of
Share buybacks
Since the year-end the Company announced its intention to commence share buybacks following the disposal of Berkeley Street.
6,325,000 have been purchased since the year end and this is ongoing. As at close of business on 14
2022, the Company had in issue (excluding treasury shares).
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76 | CT Property Trust Limited
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Alternative Investment Fund Managers (‘AIFM’) Directive
In accordance with the AIFM Directive, information in relation to the Company’s leverage and the remuneration of the Company’s
AIFM, Columbia Threadneedle
Investment Business Limited, is required to be made available to investors.
2022 are shown below:
Leverage exposure
Gross
method
Commitment
method
Maximum limit 400% 400%
Actual 127% 131%
For the purposes of the AIFM Directive, leverage is any method which increases the Company’s exposure, including the borrowing of
cash and the use of derivatives. It is expressed as a percentage of the Company’s exposure to its net asset value and is calculated
on both a gross and commitment method.
cash balances and after certain hedging and netting positions are offset against each other.
The leverage limits are set by the AIFM and approved by the Board and are in line with the maximum leverage levels permitted in the
Company’s Articles of Incorporation. The AIFM is also required to comply with the gearing parameters set by the Board in relation
to borrowings.
Detailed regulatory disclosures including those on the AIFM’s remuneration policy and costs are available on the Company’s website
or from Columbia Threadneedle
on request.
An Investor Disclosure Document for the Company is available on the Company’s website: ctpropertytrust.co.uk.
AIFM Disclosures
Report and Accounts 2022 | 77
Notice of Annual General Meeting
Notice is hereby given that the eighteenth Annual General
Meeting of CT Property Trust
of Columbia Threadneedle Investments,
on 29 November 2022
at 1pm. The meeting will address the following:
Ordinary Resolutions:
1. That the Annual Report and Consolidated Financial
2 be received
and adopted.
2. That the Directors’ Annual Report on Remuneration be
approved.
3. That the dividend policy as set out in the Annual Report
be approved.
4. That Mr D Ross, who retires annually, be re-elected as
a Director.
5. That Mr M Carpenter, who retires annually, be re-elected as
a Director.
6. That Ms A Henderson, who retires annually, be re-elected as
a Director.
7
. That PricewaterhouseCoopers CI LLP, be re-appointed as
Auditor until the conclusion of the next Annual General
Meeting.
8
. That the Directors be authorised to determine the Auditor’s
Remuneration.
Special Resolutions:
9. That the Directors of the Company be and are hereby
generally empowered to allot ordinary shares in the Company
or grant rights to subscribe for, or to convert securities into,
ordinary shares in the Company (‘‘equity securities’’) for
cash, including by way of a sale of ordinary shares held by
the Company as treasury shares, as if any pre-emption rights
in relation to the issue of shares set out in the Listing Rules
made by the Financial Conduct Authority under part VI of the
Financial Services and Markets Act 2000 (as amended) did
not apply to any such allotment of equity securities, provided
that this power:
(a) expires at the conclusion of the next Annual General
Meeting of the Company after the passing of this
resolution or on the expiry of 15 months from the
passing of this resolution, whichever is the earlier, save
that the Company may, before such expiry, make an
offer or agreement which would or might require equity
securities to be allotted after such expiry and the
Directors may allot equity securities in pursuance of
any such offer or agreement as if the power conferred
hereby had not expired; and
(b) shall be limited to the allotment of equity securities
up to an aggregate nominal value of £234,380 being
10 per cent of the issued share capital of the Company,
2022.
10
. That the Company be authorised, in accordance with
section 315 of the Companies (Guernsey) Law, 2008 (the
‘Law’), to make market purchases (within the meaning of
cancellation) provided that:
authorised to be purchased shall be 14.99 per cent of
resolution is passed;
Share shall be 1p;
(c) the maximum price (exclusive of expenses) which may
(i) 105 per cent of the average of the middle market
immediately preceding the date of purchase and (ii) the
higher of the last independent trade and the highest
current independent bid on the trading venue which the
purchase is carried out; and
Notice of Annual General Meeting
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78 | CT Property Trust Limited
Notice of Annual General Meeting
(d) unless previously varied, revoked or renewed, the
authority hereby conferred shall expire on 31 December
2023 or, if earlier, at the conclusion of the Annual
General Meeting of the Company to be held in 2023,
save that the Company may, prior to such expiry, enter
pursuant to any such contract.
By order of the Board
Northern Trust International Fund Administration
Services (Guernsey) Limited
Secretary
17 2022
Notes:
1. A member who is entitled to attend, speak and vote at the
Meeting is entitled to appoint one or more proxies to attend,
speak and vote instead of him or her. More than one proxy
may be appointed provided each proxy is appointed to
exercise the rights attached to different shares. A proxy need
not be a member of the Company.
2. A form of proxy is enclosed for use at the Meeting. The form of
proxy should be completed and sent, together with the power
of attorney or other authority (if any) under which it is signed,
to reach Computershare Investor Services (Guernsey) Limited,
c/o The Pavilions, Bridgwater Road, Bristol, BS99 6ZY not later
than 1pm on 25
November 2022.
3. The completion and return of the form of proxy will not
preclude you from attending the Meeting. If you have
appointed a proxy and attend the Meeting in person your
proxy appointment will remain valid and you may not vote
at the Meeting in person unless you have provided a hard
copy notice clearly stating your intention to revoke your proxy
appointment to Computershare Investor Services (Guernsey)
Limited, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY
not later than 1pm on 25
November 2022. In the case of a
member which is an individual, the revocation notice must
be under the hand of the appointer or of his attorney duly
authorised in writing or in the case of a member which is a
company, the revocation notice must be executed under its
or an attorney duly authorised. Any power of attorney or any
other authority under which the revocation notice is signed
which the revocation notice is signed) must be included with
the revocation notice.
4. To have the right to attend and vote at the Meeting (and
also for the purposes of calculating how many votes a
or her name entered on the register of members not later
than close of business on 25
November 2022. Changes to
entries in the register after that time shall be disregarded in
determining the rights of any member to attend and vote at
such Meeting.
5. The current Articles of Incorporation and the Directors’
letters of appointment will also be available for inspection
during the meeting itself.
6. As at 2022, the latest practicable date
prior to publication of this document, the Company had
240,705,539
234,380,539 voting rights.
7. Any person holding three per cent of the total voting
rights in the Company who appoints a person other than
the Chairman as his proxy will need to ensure that both
he and such third party complies with their respective
disclosure obligations under the Disclosure Guidance and
Transparency Rules.
8. All shareholders are strongly encouraged to exercise
your votes in respect of the AGM in advance if possible.
This should ensure that your votes are registered and
count at the AGM. Furthermore, the Board always welcomes
questions from our shareholders at the AGM and this
year shareholders are invited to submit their questions
to the Board in advance and the answers to these
questions will be posted on the website after the AGM.
Shareholders should submit any questions they may
have to CTPTCoSec@columbiathreadneedle.com before
25
November 2022.
Report and Accounts 2022 | 79
Other Information
Dividends
September and December each year. Shareholders who wish
to have dividends paid directly into a bank account rather
than by cheque to their registered address can complete a
mandate form for the purpose. Mandates may be obtained
from Computershare Investor Services (Guernsey) Limited,
bank accounts, dividend tax vouchers are sent directly to
shareholders’ registered addresses.
Share Price
The Company’s ordinary shares are listed on the London Stock
Exchange. Prices are given daily in the Financial Times under
‘‘Investment Companies’’ and in other newspapers.
Data Protection
The Company is committed to ensuring the privacy and security
of any personal data provided to it. Further details of the
Company’s privacy policy can be found on its website, which is
ctpropertytrust.co.uk.
Change of Address
Communications with shareholders are mailed to the address
held on the share register. In the event of a change of address
Investor Services (Guernsey) Limited, 13 Castle Street, St. Helier,
registered holder.
Shareholder Enquiries
Contact Northern Trust International Fund Administration
Services (Guernsey) Limited, Trafalgar Court, Les Banques, St.
the Company may also be found at its website address which is
ctpropertytrust.co.uk.
Common reporting standards
Tax legislation requires investment fund companies to
provide information annually to the local tax authority on the
Shareholders and corporate entities who have purchased shares
in investment companies. All new Shareholders, excluding those
whose shares are held in CREST, who are entered onto the
collecting this information.
Key Information Document
The Key Information Document relating to the Company’s shares
can be found on its website at ctpropertytrust.co.uk. This
document has been produced in accordance
of the
Warning to Shareholders – Beware of Share Fraud
Fraudsters use persuasive and high-pressure tactics to lure investors into scams. They may offer to sell shares that turn out to be
If you receive unsolicited investment advice or requests:
• Check the Financial Services Register at fca.org.uk
• Call the Financial Conduct Authority (“FCA”) on 0800 111 6768
are told they are out of date
fca.org.uk/scams
Financial Services Compensation Scheme
If you are approached by fraudsters please tell the FCA by using the share fraud reporting form at fca.org.uk/scams where you can
0800 111 6768. If you have already paid
money to share fraudsters you should contact Action Fraud on 0300 123 2040.
Shareholder Information
Governance Report Auditor's Report Notice of AGM Other InformationStrategic ReportOverview Financial Report Other Information
80 | CT Property Trust Limited
Other Information
Total
assets less
current
liabilities
£’000
Shareholders’
funds
£’000
Net asset
value per
ordinary
share
p
Ordinary
share
price
p
Premium/
(discount)
%
Earnings/
(loss)
per
ordinary
share
p
Dividends
paid per
ordinary
share
p
Ongoing
charges*
%
1 June 2004 (launch) 176,814 106,152 96.0 100.0 4.2 – – –
30 June 2005 202,007 124,478 112.6 124.5 10.6 26.2 5.615 1.8
30 June 2006 231,118 157,136 142.2 142.5 0.2 33.1 6.750 1.7
30 June 2007 236,703 176,377 159.6 125.5 (21.4) 18.8 6.876 1.5
30 June 2008 191,773 133,657 121.0 75.0 (38.0) (30.4) 7.210 1.5
30 June 2009 146,844 80,535 72.9 57.5 (21.1) (33.4) 7.20 1.9
30 June 2010 162,095 94,328 85.4 84.3 (1.3) 23.6 7.20 1.8
30 June 2011 158,217 91,485 82.8 90.0 8.7 3.3 7.20 1.7
30 June 2012 158,433 84,185 76.2 66.0 (13.4) 2.9 7.20 2.0
30 June 2013
†
272,001 149,115 71.7 72.5 1.1 1.2 7.20 2.0
30 June 2014 307,275 192,569 83.4 84.0 0.7 14.4 5.00 1.4
30 June 2015 331,744 226,829 97.0 99.5 2.6 17.5 5.00 1.4
30 June 2016 346,419 236,742 99.2 88.5 (10.8) 7.2 5.00 1.3
30 June 2017 346,255 240,842 100.1 106.8 6.7 5.9 5.00 1.2
30 June 2018 363,706 261,116 108.5 99.8 (8.0) 13.4 5.00 1.2
30 June 2019 349,573 252,286 104.8 80.0 (23.7) 1.3 5.00 1.2
30 June 2020 323,108 232,606 96.6 56.0 (42.0) (3.8) 4.375 1.3
30 June 2021 336,422 245,810 102.1 71.0 (30.5) 8.7 3.175 1.2
30 June 2022 410,721 319,585 132.8 84.0 (36.7) 34.6 4.00 1.2
* as a percentage of average net assets (excluding direct property expenses).
†
post the merger with ISIS Property Trust.
Financial Calendar
Annual General Meeting 29 November 2022
December 2022
Announcement of interim results March 2023
Posting of Interim Report March 2023
Payment of second interim dividend March 2023
Payment of third interim dividend June 2023
Announcement of annual results September 2023
Posting of Annual Report September 2023
Payment of fourth interim dividend September 2023
Historic Record
Report and Accounts 2022 | 81
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Other Information
Other Information
The Company uses the following Alternative Performance Measures (‘APMs’). APMs do not have a standard meaning prescribed by
GAAP and therefore may not be comparable to similar measures presented by other entities.
Discount or Premium – The share price of an Investment Company is derived from buyers and sellers trading their shares on the
stock market. If the share price is lower than the NAV per share, the shares are trading at a discount. This usually indicates that
there are more sellers than buyers. Shares trading at a price above the NAV per share, are said to be at a premium.
2022
pence
2021
pence
Net Asset Value per share (a) 132.8 102.1
Share price per share (b) 84.0 71.0
Discount (c = (b-a)/a) (c) -36.7% -30.5%
Dividend Cover
income) cover the dividend paid.
A reconciliation of dividend cover is shown below:
2022
£’000
2021
£’000
/total comprehensive income for the year 83,403 20,846
Add: (Gains)/losses on sale of investment properties realised (772) 1,304
Unrealised gains on revaluation of investment properties (71,767) (12,926)
Other income (607) –
(a) 10,257 9,224
Dividends (b) 9,628 7,642
Dividend Cover (c = a/b) (c) 106.5% 120.7%
Dividend Yield – The annualised dividend per share divided by the share price at the year end. An analysis of dividends is contained
in note 7
Net Gearing – Borrowings less net current assets (excluding current Barclays loan) divided by the value of investment properties.
2022
£’000
2021
£’000
Interest-bearing bank loans 96,914 89,722
Less net current assets excluding current Barclays loan (7,027) (11,244)
Total (a) 89,887 78,478
Investment properties (b) 405,875 321,886
Net Gearing (c = a/b) (c) 22.1% 24.4%
Alternative Performance Measures
82 | CT Property Trust Limited
Other Information
Ongoing Charges – All operating costs incurred by the Company, expressed as a proportion of its average Net Assets over the
reporting year. The costs of buying and selling investments and derivatives are excluded, as are interest costs, taxation, non-recurring
2022
£’000
2021
£’000
Investment management fee 2,380 1,932
Other expenses 1,568 2,154
Less credit loss provision (note 4) 425 (380)
Less other non-recurring costs (25) –
Total (a) 4,348 3,706
Average net assets (b) 286,154 236,243
Ongoing Charges (c = a/b) (c) 1.5% 1.6%
2022
£’000
2021
£’000
Investment management fee 2,380 1,932
Other expenses 1,568 2,154
Less direct operating property costs (note 4) (1,012) (846)
Less credit loss provision (note 4) 425 (380)
Less other non-recurring costs (25) –
Total (a) 3,336 2,860
Average net assets (b) 286,154 236,243
Ongoing Charges excluding direct operating property costs (c = a/b) (c) 1.2% 1.2%
Portfolio (Property) Capital Return – The change in property value during the period after taking account of property purchase and
sales and capital expenditure, calculated on a quarterly time-weighted basis. This calculation is carried out by MSCI Inc.
Portfolio (Property) Income Return – The income derived from a property during the period as a percentage of the property value,
taking account of direct property expenditure, calculated on a quarterly time-weighted basis. This calculation is carried out by
MSCI Inc.
Portfolio (Property) Total Return – Combining the Portfolio Capital Return and Portfolio Income Return over the period, calculated on a
quarterly time-weighted basis. This calculation is carried out by MSCI Inc.
Total Return – The return to shareholders calculated on a per share basis by adding dividends paid in the period to the increase
Assets, respectively, on the date on which they were quoted ex-dividend.
2022 2021
NAV per share at start of year – pence 102.1 96.6
NAV per share at end of year – pence 132.8 102.1
Change in the year +30.1% +5.7%
Impact of dividend reinvestments +4.2% +3.4%
NAV total return for the year +34.3% +9.1%
2022 2021
Share price per share at start of year – pence 71.0 56.0
Share price per share at end of year – pence 84.0 71.0
Change in the year +18.3% +26.8%
Impact of dividend reinvestments +5.7% +6.1%
Share price total return for the year +24.0% +32.9%
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Other Information
Other Information
The European Public Real Estate Association (EPRA) is the industry body representing listed companies in the real estate sector.
EPRA publishes Best Practice Recommendations (BPR) to establish consistent reporting by European property companies. Further
information on the EPRA BPR can be found at epra.com
Note 2022 2021
EPRA NRV (£’000) 1 347,152 267,689
EPRA NRV (pence per share) 1 144.2 111.2
EPRA NTA (£’000) 1 319,585 245,810
EPRA NTA (pence per share) 1 132.8 102.1
EPRA NDV (£’000) 1 316,141 241,381
EPRA NDV (pence per share) 1 131.3 100.3
EPRA earnings (£’000) 2 10,864 9,224
EPRA earnings per share (pence per share) 2 4.5 3.8
EPRA Net Initial Yield 3 3.8% 4.5%
EPRA topped-up Net Initial Yield 3 4.1% 4.7%
EPRA Vacancy Rate 4 2.6% 4.1%
EPRA Cost Ratios - including direct vacancy costs 5 22.1% 24.3%
EPRA Cost Ratios - excluding direct vacancy costs 5 20.0% 23.3%
Capital expenditure (£’000) 6 22,284 5,816
(1) EPRA Net Reinstatement Value (‘NRV’): Assumes that entities never sell assets and aims to represent the value assets required
to rebuild the entity.
EPRA Net Tangible Assets (‘NTA’): Assumes that entities buy and sell assets, thereby crystallising certain levels of unavoidable
deferred tax.
EPRA Net Disposal Value (‘NDV’):
instruments and certain other adjustments are calculated to the full extent of their liability, net of any resulting tax.
2022
EPRA
NRV
£’000
2022
EPRA
NTA
£’000
2022
EPRA
NDV
£’000
IFRS NAV 319,585 319,585 319,585
Fair value of debt – – (3,444)
Purchasers’ costs 27,567 – –
Net assets used in per share calculation 347,152 319,585 316,141
Shares in issue (000’s) 240,705 240,705 240,705
EPRA assets per share (pence per share) 144.2 132.8 131.3
EPRA Performance Measures
84 | CT Property Trust Limited
Other Information
2021
EPRA
NRV
£’000
2021
EPRA
NTA
£’000
2021
EPRA
NDV
£’000
IFRS NAV 245,810 245,810 245,810
Fair value of interest rate swaps
Fair value of debt – – (4,429)
Purchasers’ costs 21,879 – –
Net assets used in per share calculation 267,689 245,810 241,381
Shares in issue (000’s) 240,705 240,705 240,705
EPRA assets per share (pence per share) 111.2 102.1 100.3
(2) EPRA earnings – EPRA earnings represents the earnings from core operational activities, excluding investment property
revaluations and gains/losses on asset disposals. It demonstrates the extent to which dividend payments are underpinned by
recurring operational activities.
2022
£’000
2021
£’000
Earnings per IFRS income statement 83,403 20,846
Exclude:
Unrealised gains on revaluation of investment properties (71,767) (12,926)
(Gains)/losses on sale of investment properties realised (772) 1,304
EPRA earnings 10,864 9,224
Weighted average number of shares in issue (000’s) 240,705 240,705
EPRA earnings per share (pence per share) 4.5 3.8
(3) EPRA Net Initial Yield – EPRA NIY is calculated as the annualised rental income based on the cash rents passing at the
consolidated balance sheet date, less non-recoverable property operating expenses, divided by the gross market valuation of the
properties, increased with estimated purchasers’ costs.
2022
£’000
2021
£’000
Investment property valuation 410,225 325,575
Allowance for estimated purchasers’ costs 27,567 21,879
Grossed up property portfolio valuation 437,792 347,454
Annualised cash passing rental income 17,774 16,562
Property outgoings (1,012) (846)
Annualised net rents 16,762 15,716
Add: notional rent expiration of rent free periods or other lease incentives 1,102 647
Topped-up net annualised rent 17,864 16,363
EPRA NIY 3.8% 4.5%
EPRA topped-up NIY 4.1% 4.7%
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Other Information
Other Information
(4) EPRA Vacancy rate – EPRA vacancy rate is the estimated rental value (ERV) of vacant space excluding development properties
divided by the ERV of the whole property, expressed as a percentage.
2022
£’000
2021
£’000
Annualised potential rental value of vacant premises 545 773
Annualised potential rental value for the complete property portfolio 20,658 19,020
EPRA Vacancy rate 2.6% 4.1%
(5) EPRA cost ratio
2022
£’000
2021
£’000
Total expenditure from IFRS income statement 3,948 4,086
EPRA costs (including direct vacancy costs) 3,948 4,086
Direct vacancy costs 371 166
EPRA costs (excluding direct vacancy costs) 3,577 3,920
Rental Income less ground rent costs per IFRS 17,868 16,836
EPRA cost ratio (including direct vacancy costs) 22.1% 24.3%
EPRA cost ratio (excluding direct vacancy costs) 20.0% 23.3%
No operating costs or overheads were capitalised in 2022 (2021: nil).
(6)
Capital expenditure
2022
£’000
2021
£’000
Acquisitions 20,737 –
No incremental lettable space 464 3,434
Incremental lettable space 1,083 2,382
Total capital expenditure 22,284 5,816
The Company has no interests in joint ventures.
86 | CT Property Trust Limited
Other Information
Corporate Terms
AAF – Audit and Assurance Faculty guidance issued by the
AIC – Association of Investment Companies. This is the trade
body for Closed-end Investment Companies (www.theaic.co.uk).
AIFMD – Alternative Investment Fund
Managers Directive
. Issued
by the European Parliament in 2012 and 2013, the Directive
including Closed-end Investment Companies, must have
appointed a Depositary and an Alternative Investment Fund
Closed-end Investment Company, nevertheless, remains fully
responsible for all aspects of the company’s strategy, operations
and compliance with regulations.
Benchmark – This is a measure against which an Investment
Company’s performance is compared. The Company does not
have a formal Benchmark but does report its performance
Closed-end Investment Company
issued ordinary share capital which is traded on an exchange
at a price not necessarily related to the Net Asset Value of the
company and where shares can only be issued or bought back
by the company in certain circumstances. This contrasts with an
open-ended investment company, which has units not traded on
an exchange but issued or bought back from investors at a price
directly related to the Net Asset Value.
Depositary
Company must appoint a Depositary, whose duties in respect
of investments, cash and similar assets include: safekeeping;
it has safekeeping duties. The Depositary’s oversight duties
include, but are not limited to, oversight of share buy backs,
dividend payments and adherence to investment limits. The
Dividend – The income from an investment. The Company
currently pays dividends to shareholders quarterly.
GAAP – Generally Accepted Accounting Practice. This includes
Gearing
end Investment Companies have the ability to borrow to invest.
This term is used to describe the level of borrowings that an
Investment Company has undertaken. The higher the level of
borrowings, the higher the gearing ratio.
Leverage
by which the exposure of an AIF is increased through borrowing of
cash or securities or leverage embedded in derivative positions.
Leverage is broadly equivalent to Gearing, but is expressed as
a ratio between the assets (excluding borrowings) and the net
method, exposure represents the sum of the Company’s positions
after deduction of cash balances, without taking account of any
exposure is calculated without the deduction of cash balances
and after certain hedging and netting positions are offset against
each other.
Manager – The Company’s investment manager is Columbia
Threadneedle Investment Business Limited, and its property
manager is Columbia Threadneedle REP PM Limited. Further
details are set out on page 1 and in note 3 to the accounts.
Market Capitalisation – The stock market value of a company
as determined by multiplying the number of shares in issue,
excluding those shares held in treasury, by the market price of
the shares.
Net Assets (or Shareholders’ Funds) – This is calculated as the
value of the investments and other assets of an Investment
Company, plus cash and debtors, less borrowings and any other
creditors. It represents the underlying value of an Investment
Company at a point in time.
Net Asset Value (‘NAV’) per Ordinary Share – This is calculated
as the net assets of an Investment Company divided by the
number of shares in issue, excluding those shares held in
treasury.
Ordinary Shares – The main type of equity capital issued by
conventional Investment Companies. Shareholders are entitled
to their share of both income, in the form of dividends paid by
2022
Share Price – The value of a share at a point in time as quoted
quoted on the Main Market of the London Stock Exchange.
Glossary of Terms
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Other Information
Other Information
SORP – Statement of Recommended Practice “Financial
Statements of Investment Trust Companies and Venture Capital
Trusts” issued by the AIC.
Total Assets – This is calculated as the value of the investments
and other assets of an Investment Company, plus cash and
debtors.
Property Terms
Break Option – A clause in a Lease which provides the landlord
or tenant with an ability to terminate the Lease before its
contractual expiry date.
Covenant Strength – This refers to the quality of a tenant’s
the Lease.
Equivalent Yield
from the property, assuming a rise to ERV at the next review, but
with no further rental growth.
Estimated Rental Value (‘ERV’) – The estimated annual market
rental value of a property as determined by the Company’s
External Valuer. This will normally be different from the actual
rent being paid.
External Valuer – An independent external valuer of a property.
detailed information regarding the valuation of the Company’s
properties is included in note 9 to the accounts.
Fixed and Minimum Uplift Rents
at an agreed level on agreed dates stipulated within the Lease,
review dates.
Lease – A legally binding contract between a landlord and a
tenant which sets out the basis on which the tenant is permitted
to occupy a property, including the Lease length.
Lease Incentive – A payment used to encourage a tenant to take
on a new Lease, for example by a landlord paying a tenant a
property or by allowing a rent free period.
Lease Re-gear – This term is used to describe the renegotiation
of a Lease during the term and is often linked to another Lease
Lease Renewal – The renegotiation of a Lease with the existing
Tenant at its contractual expiry.
Lease Surrender – An agreement whereby the landlord and
tenant bring a Lease to an end other than by contractual expiry
negotiation of a surrender premium by one party to the other.
Net Income – The net income from a property after deducting
ground rent and non-recoverable expenditure.
Net Initial Yield – The initial Net Income from a property at
the date of purchase, expressed as a percentage of the gross
purchase price including the costs of purchase.
Non-property Income Distribution – An ordinary dividend paid to
a shareholder of the Company.
Passing Rent – The annual rental income currently receivable on
a property as at the balance sheet date.
Property Income Distribution (PID) – A dividend paid to a
resident member of the Group insofar as they derive from its
Rent Review – A periodic review of rent during the term of a
Lease, as provided for within a Lease agreement.
Reversion – Increase in rent estimated by the Company’s
External Valuer, where the passing rent is below the ERV. The
increases to rent arise on rent reviews and lettings.
Tenant’s Improvements – This term is used to describe a wide
range of works that are usually carried out by a tenant, at its own
cost, and usually require the landlord’s prior approval.
Voids – The amount of rent relating to properties which are
unoccupied and generating no rental income. Stated as a
percentage of ERV.
88 | CT Property Trust Limited
Other Information
CT Individual Savings Account (ISA)
You can use your ISA allowance to make an annual tax
with a lump sum from £100 or regular savings from £25 a
month. You can also transfer any existing ISAs to us whilst
CT Junior Individual Savings Account (JISA)*
a child. Contributions start from £100 lump sum or £25 a
to Columbia Threadneedle Investments.
CT Lifetime Individual Savings Account (LISA)
For those aged 18-39, a LISA could help towards purchasing
for the current tax year and receive a 25% Government bonus
up to £1,000 per year. Invest with a lump sum from £100 or
regular savings from £25 a month.
CT Child Trust Fund (CTF)*
If your child already has a CTF, you can invest up to £9,000
per birthday year, from £100 lump sum or £25 a month.
CTFs with other providers can be transferred to Columbia
Threadneedle Investments.
CT General Investment Account (GIA)
Trusts. There are no maximum contributions, and investments
can be made from £100 lump sum or £25 a month.
CT Junior Investment Account (JIA)
Investment Trusts. There are no maximum contributions, and
the plan can easily be set up under bare trust (where the child
wish to retain control over the investment. Investments can
be made from a £100 lump sum or £25 a month per account.
You can also make additional lump sum top-ups at any time
from £100 per account.
have access to the money at age 18. **Calls may be recorded or monitored for
training and quality purposes.
Charges
Annual management charges and other charges apply according
to the type of plan.
Annual account charge
ISA/LISA: £60+VAT
GIA: £40+VAT
JISA/JIA/CTF: £25+VAT
You can pay the annual charge from your account, or by direct
debit (in addition to any annual subscription limits).
Dealing charges
£12 per fund (reduced to £0 for deals placed through the
online Columbia Threadneedle Investor Portal) for ISA/GIA/
Dealing charges apply when shares are bought or sold but not
on the reinvestment of dividends or the investment of monthly
direct debits. Government stamp duty of 0.5% also applies on
the purchase of shares (where applicable).
The value of investments can go down as well as up and you may
individual circumstances and tax allowances and rules may change.
Please ensure you have read the full Terms and Conditions, Privacy
Policy and relevant Key Features documents before investing. For
regulatory purposes, please ensure you have read the Pre-sales Cost
& Charges disclosure related to the product you are applying for, and
the relevant Key Information Documents (KIDs) for the investment
trusts you want to, these can be found at ctinvest.co.uk/documents.
How to Invest
To open a new Columbia Threadneedle Investments plan, apply
online at ctinvest.co.uk
you are transferring an existing plan with another provider to
Columbia Threadneedle Investments, or if you are applying for
a new plan in more than one name but paper applications are
available at ctinvest.co.uk/documents or by contacting Columbia
Threadneedle Investments.
New Customers
Call
: 0800 136 420** (8.30am – 5.30pm, weekdays)
Email:
invest@columbiathreadneedle.com
Existing Plan Holders
Call: 0345 600 3030** (9.00am – 5.00pm, weekdays)
Email: investor.enquiries@columbiathreadneedle.com
By post: Columbia Threadneedle Management Limited,
You can also invest in the trust through online dealing platforms
for private investors that offer share dealing and ISAs. Companies
include: Barclays Stockbrokers, EQi, Halifax, Hargreaves Lansdown,
HSBC, Interactive Investor, Lloyds Bank, The Share Centre
Threadneedle Investments.
How to Invest
© 2022 Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. Financial promotions are issued
ctinvest.co.uk
0345 600 3030
Report and Accounts 2022 | 89
Other Information
Directors (all non-executive)
Vikram Lall (Chairman)
‡
Rebecca Gates (resigned 31 August 2022)
Mark Carpenter
David Ross
†
Alexa Henderson*
Trafalgar Court
Les Banques
St. Peter Port
Secretary
Northern Trust International Fund Administration Services
(Guernsey) Limited
Trafalgar Court
Les Banques
St. Peter Port
01481 745001
Alternative Investment Fund Manager (‘AIFM’) and
Investment Manager
Columbia Threadneedle Investment Business Limited
Edinburgh EH3 9EG
0207 628 8000
Property Manager
Columbia Threadneedle REP PM Limited
7 Seymour Street
Property Valuers
43-45 Portman Square
Auditor
PricewaterhouseCoopers CI LLP
Royal Bank Place
1 Glategny Esplanade
St. Peter Port
Guernsey GY1 4ND
Guernsey Legal Advisers
Royal Chambers
St. Peter Port
Guernsey GY1 4HP
UK Corporate Legal Advisers
Dickson Minto
Broadgate Tower
20 Primrose Street
Bankers
Barclays Bank plc
1 Churchill Place
London E14 5HP
Corporate Brokers
Panmure Gordon & Co
London E14 5HP
Depositary
25 Bank Street
Website:
ctpropertytrust.co.uk
Corporate Information
‡
Chairman of the Nomination Committee
†
Chairman of the Management Engagement Committee
* Chairman of the Audit and Risk Committee
CT Property Trust Limited
2022 Annual Report and Consolidated Financial Statements
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columbiathreadneedle.com
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