Half Yearly Report

9 November 2012

METRIC PROPERTY INVESTMENTS PLC

("Metric" or the "Group" or the "Company")

HALF YEAR RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012

METRIC CONTINUES TO BUILD STRONG UNDERLYING EARNINGS GROWTH

Metric, the UK specialist retail real estate investment trust, today announces its half yearly results for the six months ended 30 September 2012.

HIGHLIGHTS:1

Financial:

·; EPRA profit before tax £3.5 million (September 2011: £3.9 million); recurring income has increased by 35% excluding one-off surrender premiums received in H1 2011 of £1.3 million

·; EPRA EPS of 1.8p (September 2011: 2.1p); increase of 35% excluding one off surrender premiums received in H1 2011 of £1.3 million or 0.7p

·; Interim dividend of 1.8p to be paid on 7 December 2012, an increase of 80% (September 2011: 1.0p)

·; EPRA net asset value per share remained stable at 107p compared with March 2012, a 3% increase since September 2011

·; £75 million loan facility with Deutsche Pfandbriefbank AG signed for the MIPP joint venture, bringing total debt facilities to £189.7 million (£139.7 million at share)

·; Low loan to value ratio of 22% with a weighted average cost of debt 3.7%3

Operational1:

·; Portfolio valued at £266.2 million across 25 retail assets, following four new acquisitions for £35.9 million (£18.8 million at share) and two further acquisitions completed post period end for £14.9 million (£5.0 million at share)

·; Total property returns of 3.1%, compared to the IPD All Retail Quarterly Universe of 0.5%, delivering outperformance of 2.6%

·; Valuation surplus of £0.7 million, or 0.3%; contributing to a capital return of 0.5% compared to IPD All Retail Quarterly Universe of -2.3% driven by asset management activities offset by 15bps outward yield movement

·; Strong rental growth driven by acquisitions and new lettings:

o 13.1% increase in annualised rent roll to £17.3 million (March 2012: £15.3 million)

o 2.8% increase in like-for-like rental growth of £0.4 million

·; Investment portfolio continues to exhibit income longevity and security, supported by active management initiatives:

o Six new lettings across 53,000 sq ft, securing £0.9 million of rental income

o Occupancy level improved to over 99% (March 2012: 97.5%)

o Long unexpired leases averaging 11.5 years (10.8 years to first break)

o Average passing rents remain low at £14.75 psf

o Only 6% of leases expire in the next three years

·; Planning gains of almost 65,000 sq ft during the period with a further 27,000 sq ft received post period end at Bishop Auckland Phase 2; planning for a new 103,000 sq ft Open A1 Shopping Park at St Austell recently submitted

·; Developments at Bishop Auckland and Cannock nearing completion - 100% and 87% pre-let, respectively, including agreements under offer

·; Major refurbishment commenced at Longwell Green, Bristol and Channons Hill Retail Park, Bristol - 100% and 80% pre-let, respectively, including agreements in solicitors' hands.

·; Ongoing progress with MIPP joint venture:

o MIPP portfolio now at 50% of target investment with AUM of £75 million following two acquisitions post period end (£60.3 million at September 2012)

o MIPP management fees now at £0.3 million on an annualised basis and expected to rise to £0.6 million when fund is fully invested

1. Unless otherwise stated, all figures in this half year report include Metric's one-third share of its MIPP joint venture with USS.

2. Calculated in accordance with European Public Real Estate Association (EPRA) guidelines (after adjusting for £1.1 million loss on mark-to-market on derivatives see note 7 and 16).

3. Weighted average cost of debt once fully drawn.

4. Total debt facilities including 100% of the MIPP £75 million facility at £189.7 million (at share £139.7 million)

Andrew Jones, Chief Executive of Metric, commented:

"Metric has delivered a robust performance across our key metrics despite a backdrop of a difficult property market and challenging wider macroeconomic conditions. We have delivered a strong increase in our level of recurring income, both through acquisition activity and active asset management, with increasing like-for-like rental growth. Furthermore, our occupier centric model has significantly contributed in our aim to be the real estate provider of choice to our retailers and we now enjoy a portfolio occupancy level of over 99%.

"In light of the increasing underlying earnings growth, the board has decided to increase the interim dividend paid by 80% compared to the pervious interim dividend, demonstrating its confidence in the future growth and success of the Company.

"I am also delighted to report that we have been able to conclude negotiations for a merger with London & Stamford Property Plc. I do not cover this fully here as details will be announced immediately following the release of this Report."

For further information, please contact:

Metric Property Investments plc +44 (0)20 7129 7000

Andrew Jones (Chief Executive)

Sue Ford (Finance Director)

Juliana Weiss Dalton (Investor Relations)

FTI Consulting +44 (0)20 7831 3113

Stephanie Highett

Dido Laurimore

Daniel O'Donnell

About Metric Property Investments

Metric Property is a UK retail focused Real Estate Investment Trust (REIT) established in early 2010 to invest in retail assets located across the UK. It aims to deliver attractive returns for shareholders through a strategy of increasing income and improving capital values. The occupier sits at the heart of Metric's investment strategy, where retailer demand and occupier contentment are key to driving rents through our asset management programme of leasing, rent reviews, lease renewals, extensions and redevelopments.

This Half Year Report and presentation are available on Metric's websitewww.metricproperty.co.uk

Neither the content of Metric's website nor any other website accessible by hyperlinks from Metric's website are incorporated in, or form, part of this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not acquire, continue to hold, or dispose of, shares in Metric.

Forward looking statements: This announcement may contain certain forward-looking statements with respect to Metric's expectations and plans, strategy, management objectives, future developments and performance, costs, revenues and other trend information. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Certain statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Any forward-looking statements made by or on behalf of Metric speak only as of the date they are made. Metric does not undertake to update forward-looking statements to reflect any changes in Metric's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Nothing in this announcement should be construed as a profit forecast. Past share price performance cannot be relied on as a guide to future performance.

Business review

Overview of results

Despite the current challenges presented by the economic environment we have continued to focus on delivering strong underlying earnings growth.

Our profit before tax for the six month period was £3.1 million, which includes a revaluation surplus of £0.7 million. The EPRA profit before tax was £3.5 million or 1.8 pence per share, a like for like increase of 35% over the same period last year (£2.6 million or 1.4p). Including the one-off surrender premiums of £1.3 million received in the first half of last year the EPRA earnings decreased by 11%.

The benefits of our focus on earnings growth is clear with a further six new lettings achieved in the six month period which has increased the investment portfolios' occupancy rate to over 99%. These asset management initiatives, together with the short cycle development programme, will continue to deliver earnings growth in the second half of the year and more significantly in 2013/14. Reflecting the current and expected future growth in earnings, the Board has declared an increased interim dividend of 1.8 pence per share to be paid on 7 December 2012, representing an 80% increase over last year's interim dividend.

The portfolio was valued at £266.2 million across 25 retail properties delivering a revaluation surplus in the six month period of £0.7 million or a 0.3% increase in the value since March 2012. This surplus along with our retained profits and offset by dividends paid has contributed to a stable adjusted net asset value at 107 pence per share compared to the year-end. We have delivered a total ungeared property return of 3.1% outperforming the IPD All Retail Quarterly Universe, which delivered a return of 0.5%.

Post period end two acquisitions have taken the assets under management in the MIPP joint venture to £75 million, across eight assets. The joint venture has now committed 50% of the fund's target investment value of £150 million. The fund's running yield is 7% and an additional 0.4% management fee will continue to contribute to earnings growth.

Our development programme now totals 371,000 sq ft at six schemes. Developments at Bishop Auckland Phase 1 and Cannock have progressed well and both are nearing completion and are 100% and 87% pre-let respectively. We have also continued to build on the planning successes achieved last year, receiving a further four consents in the six month period totalling 65,000 sq ft, including consent for a new 22,500 sq ft M&S store at Berkhamsted. Post period end we received an Open A1 planning consent for our 27,000 sq ft Bishop Auckland Phase 2 development. Planning applications for a further 113,000 sq ft have been submitted, most notably an application for a 103,000 sq ft Open A1 shopping park at St Austell.

The portfolio is now well positioned to weather the challenges presented in the current economic environment. A deep and proven knowledge of the occupier market and careful and considered stock selection has allowed us to avoid many of the retailer administrations over the last six months, which is evidenced by the investment portfolio's occupancy rate of over 99%.

Investment and occupier outlook

The market continues to witness ongoing outward yield movement, caused by reduced appetite for risk across all investments with the majority of investors targeting prime and liquid assets. Consequently the divergence between prime and secondary assets has widened. Accordingly, we have deliberately slowed down the pace of our investment acquisitions in the last six months, acquiring just four properties in the period to September; two of which were for our MIPP joint venture. However assets owned by distressed vendors have presented some opportunistic acquisitions, with vendors of all four of our acquisitions in the period having been receivers or bank motivated vendors. We envisage this trend to continue as domestic banks continue to focus on improving their core tier one ratios and return to domestic consumer lending.

Income security and longevity, as well as occupier contentment, continue to be the key valuation metrics. These continue to drive our approach to new retail opportunities, as we focus our capital on higher yielding, sustainable income opportunities and new short cycle redevelopments.

We continue to believe that assets with long and strong income offer good value relative to the low cost of borrowing; especially where there is limited asset obsolescence and inherent value in the planning consents on the underlying land. This contrasts sharply to many retail opportunities available today where the initial yield at first sight may look attractive, however chronic over-renting, short security of income, weakening covenants, increasing obsolescence, high irrecoverable costs and low occupier contentment offer a very different perspective on likely returns. We will only invest in assets that we are happy to own, even if the market were to shut down for many years. 

Retailer conditions continue to remain challenging although we are starting to see a number of more encouraging economic indicators.

Retailers' real estate portfolios continue to come under ever increasing focus as the retail market continues to evolve with polarisation of shopping habits and the increasing adoption of a multi channel strategy. This evolution will continue over the next few years as many occupational leases expire, allowing retailers to relocate their existing offers into the fewer locations both in and out of town, as well as renegotiating rentals in some more marginal locations.

We expect retail vacancies to continue to increase with a corresponding downward pressure on rental values, particularly in-town, as impending lease expiries allow retailers to vacate poorly performing units and further retailer insolvencies occur. A number of the weaker retailers have already failed, so we anticipate the rate of failures will start to decline and the retailers who have survived will continue to benefit from the reduced capacity and grow their market share.

Understanding these occupier trends continues to be critical to invest successfully in the retail real estate sector today. The dynamic nature of the retail market is such that increased occupier mobility will undoubtedly create opportunities. We continue to try to position ourselves as the preferred real estate providers to the retail industry and will continue to stay close to our customers, building and delivering modern retail space that is fit for purpose in today's market.

Investments

Six acquisitions focused on higher yielding assets

We have concentrated on our MIPP joint venture, securing higher yielding, smaller retail parks with long unexpired lease terms enabling us to take advantage of the c.300 bps differential between the cost of debt and property yields to deliver, post leverage, double digit returns on equity. Consequently, in the last six months, we have deliberately slowed the pace of our larger multi let retail warehouse acquisitions as we continue to see less value in this market.

During the period we made four new acquisitions totalling £35.9 million net of acquisition costs (£18.8 million at share). The four properties acquired have an average yield on cost of 7.4% and a weighted unexpired lease length of nearly 15 years. Post period end MIPP acquired two further properties for £14.9 million (£5.0 million at share) with an average yield on cost of 6.8% and average unexpired lease term of 15.6 years.

In June 2012 we completed the acquisition of a high street investment in Bedford let to Next and Iceland for £5.7 million based on a yield of 7%, on lease terms of 10 and 15 years, respectively. We also completed the acquisition, in August 2012, of an out of town retail unit in St Albans let to Dunelm plc for £4.6 million off a yield of 7.8%.

We acquired two properties during the period for our MIPP joint venture. In May, MIPP acquired Faustina Retail Park, Londonderry for £17.4 million reflecting a yield of 7.5% and in June MIPP acquired Camborne Retail Park, Cornwall for £8.2 million off a yield of 7.3%. Both properties are let to B&Q and have weighted average unexpired lease terms of 18 and 15 years, respectively.

Post period end MIPP has acquired two properties; Lichfield Retail Park, a well let five unit scheme anchored by Wickes (c. 18 years unexpired) in Lichfield for £11.0 million reflecting a yield of 6.6% rising to 7.2% based on fixed uplifts in 2015. In addition, a standalone Wickes unit in Nottingham was acquired for £3.9 million reflecting a yield of 7.3% and with 18 years remaining on the lease. 

At 30 September, assets under management in MIPP totalled £60.3 million rising to £75 million including post period end acquisitions and reaching 50% of the fund's target investment of £150 million when launched in November last year. The fund now has eight properties in total which produce a running yield of 7.0% with 36% of the portfolio benefiting from RPI linked income. 

Post period end Metric and USS committed their remaining balance of equity to MIPP and future acquisitions will now be financed by the new £75 million loan facility signed with Deutsche Pfandbriefbank AG.

Conditionally exchanged 90 acre site in St Austell, Cornwall for development

During the period we conditionally exchanged contracts to acquire 90 acres for £5.5 million to the south west of St Austell, where we have been working up proposals to develop a new 103,000 sq ft Open A1 shopping park. We have already exchanged contracts with Sainsbury's on a freehold land sale for a new 68,000 sq ft supermarket. The additional space beyond the shopping park scheme will be promoted for mixed use commercial and residential development.

The purchase is conditional on obtaining an implementable planning consent and pre-lets on the park of 60% based on rental income. The purchase will only be recognised on balance sheet once these conditions are satisfied and the risks of ownership pass to Metric. Since the conditional acquisition we have been working up design of the shopping park and post period end we have submitted a detailed planning application. Our discussions to date with the local planning authority and key stakeholders have on the whole been generally supportive and we anticipate the application being determined and an implementable consent obtained during 2013.

Asset management

Occupier transactions

During the period, we concluded six new lettings across 53,000 sq ft, on average lease terms of 14 years (12 years to first break). These lettings have further improved our occupancy rate across the investment portfolio which is now over 99%. We have only three vacant units, totalling 7,000 sq ft, in the wholly owned investment portfolio with the MIPP portfolio fully occupied.

We have concluded five rent reviews in the period with a resulting increase over the previous passing rent of nearly £30,000 per annum.

Rental growth on the existing investment portfolio has been delivered by growing passing rents through rent reviews and lease re-gears, as well as by creating new sources of rental income through additional onsite development and ancillary tenants. Average rents on the investment portfolio are now £14.75 psf, which is about £1 psf or 7.2% higher than at the time of acquisition, based on an average hold period of 19 months.

Our ability to execute new lettings on long leases in a challenging occupational market across our investment and redevelopment portfolios highlights our strong retailer relationships, the appeal of our assets and the attractiveness of our low rents.

During the period we let the unit previously occupied by Peacocks at Launceston, who went in administration last year. In the first six months of the current year we have not suffered from any tenant insolvencies, however, post period end Comet went into administration impacting one unit at Kings Lynn and representing 0.6% of our rental income. Over the period we have been working up a planning application to extend the unit which will be submitted shortly, and negotiations have been under way for some time with a specific retailer to reoccupy the unit.

Letting Summary

Development

Building out our short cycle redevelopment pipeline

We are continuing to build an attractive pipeline of short cycle redevelopments in locations where there is strong retailer demand and a favourable planning outlook.

We have successfully completed our redevelopments at Sheffield (28,600 sq ft) and Inverness (10,000 sq ft). These are now both income producing and 100% let. Inverness was also forward sold to the MIPP joint venture with the sale completing in May 2012. Sheffield now sits within our investment portfolio.

Our current redevelopment programme includes six schemes totalling over 371,000 sq ft at Bishop Auckland, Cannock, Bristol, Leeds, St Austell and at Berkhamsted, our first in-town high street development.

The redevelopment at Bishop Auckland Phase 1 (49,000 sq ft) and Cannock (24,500 sq ft) are both progressing well and are due to complete in the coming weeks. At Bishop Auckland, we are 100% pre-let, including agreements under offer, with leases agreed with Next, Boots, Costa, Brantano, M&S Simply Food and Pets at Home. Cannock is 87% pre-let, to DFS and Sleepright, with only one remaining unit of 3,600 sq ft to let.

At Leeds (105,000 sq ft), we are now 43% pre-let, including agreements in solicitors' hands and under offer. In the period we completed the pre-letting of 10,100 sq ft to M&S. We anticipate commencing on site in late spring of 2013 once we have secured sufficient additional pre-lets.

Planning has now been received for the reconfiguration at Channons Hill Retail Park, Bristol and we are now onsite. 23,000 sq ft has been let to B&M with a further 8,000 sq ft pre-let to Iceland. Work is due to complete early in 2013 and occupancy is now 80%.

Following the recent planning consent for the redevelopment of the former Post Office at Berkhamsted we will start work in the late spring 2013. We have agreed a new 20 year lease with M&S Simply Food to occupy 18,000 sq ft with the remaining 4,500 sq ft being marketed to high quality restaurant occupiers.

At Bishop Auckland we have successfully received Open A1 planning consent for an additional 27,000 sq ft Phase 2 development. The proposed scheme is to be built on land adjacent to the current Phase 1 development that we had under option and recently acquired for £0.5 million.

At St Austell we have been working up proposals to develop a new 103,000 sq ft Open A1 shopping park and post period end we submitted a planning application. Our discussions to date with local planning authority have been positive and we remain cautiously optimistic the application will be approved.

Development summary:

Continued planning gains on existing investments

In the six months to September 2012 we have continued our strong momentum of planning wins receiving a further four planning consents on 65,000 sq ft.

At Channons Hill Retail Park, Bristol we obtained two consents totalling 40,000 sq ft. Firstly, to subdivide the former 30,000 sq ft Focus DIY store into two units of which nearly 23,000 sq ft has been let to B&M. Secondly, to subdivide another 10,000 sq ft unit of which 8,000 sq ft has been let to Iceland. The unit is currently occupied by What! Stores, who are relocating to a vacant unit at the same property.

At Berkhamsted, we received planning consent to develop 22,500 sq ft of which 18,000 sq ft has been pre-let to M&S Simply Food. Tenants are being actively sought for two smaller restaurant units at the development.

At Longwell Green, Bristol (MIPP JV) we have received permission to build a new 2,500 sq ft pod and both units are currently in solicitors' hands to Costa Coffee and Subway.

Post period end, we received Open A1 planning consent at Bishop Auckland for our 27,000 sq ft (Phase 2) development on land recently acquired which is adjacent to the existing retail park development. We will progress lettings with interested parties prior to commencing construction.

Planning Summary

Planning applications have also been submitted for a further 113,000 sq ft. Most notably at St Austell where an application to develop a new 103,000 sq ft Open A1 shopping park has been submitted post period end. At Damolly Retail Park, Newry, permission is being sought to relax the existing use over a 9,700 sq ft unit to enable the surrender from the current occupier and a re-letting to Home Bargains to proceed.

Property portfolio

Valuation uplift of £0.7 million

The portfolio valuation as at 30 September 2012 was £266.2 million, reflecting a valuation uplift of 0.3% (£0.7 million) or 0.6% (£1.7 million) underlying (excluding acquisition costs) over the six month period. The average period of ownership for the portfolio now stands at 19 months.

The development portfolio generated a revaluation surplus of £3.3 million driven mainly by planning and pre-letting progress at Bishop Auckland, Kirkstall and Berkhamsted. Despite continued asset management progress the investment portfolio suffered from 15 bps of outward market yield movement. The impact of this yield shift would have been greater but was partly mitigated by income growth. The resulting revaluation deficit was £2.6 million.

Valuation contributors

Robust portfolio metrics

Our investment portfolio is over 99% occupied and generates secure and dependable cash flows on long-term leases delivering a contracted yield on cost of 6.8%. The longevity of our income adds further security with average unexpired lease terms of 11.5 years (10.8 years to first break). Our lease expiry profile is well staggered with only 6% of our income due to expire in the next three years. This compares favourably with the broader market where 15% of out-of-town leases and 51% of shopping centre and high street leases are due to expire by the end of 2015.

Lease expiry profile on investment portfolio

Includes pre-lets on committed developments

The average passing rent on the investment portfolio is £14.75 psf, which on a like-for-like basis is £1 psf higher than at acquisition, with further reversionary potential as we look to move towards sustainable rental levels over time.

16% of the investment portfolio's income is subject to fixed rental uplifts (Metric: 13%, MIPP: 36%).

Tenant diversity and covenant strength

The diversity of income within the portfolio is spread across the key retail subsectors with 18% of income derived from food operators, one of the few retail subsectors demonstrating organic rental growth. This represents our largest sector exposure.

Sector Exposure

Our top ten customers account for 61% of the total contracted rent. The granularity and diversity of income has improved as we have grown the portfolio and we expect this to continue as we undertake further asset management initiatives and acquire more assets. Our largest tenant exposure is to Currys/PC World at 12.0%, declining from 13.9% at September 2011 and 24.6% at September 2010.

Tenant exposure (weighted by income)

1. Including £0.4 million of rental income from post period end acquisitions, deals in solicitors' hands and outstanding rent reviews.

Financial review

The results for the six months ended 30 September 2012 continue to benefit from the investments made in 2011/12 together with the asset management initiatives which are now starting to flow through to the income statement.

Income statement and earnings per share

The Group made a profit after tax of £3.1 million in the six months to 30 September 2012 which equates to earnings per share of 1.6p. The profit arose mainly from the EPRA earnings of £3.5 million (see note 7) and a gain on revaluation and profit arising on the sale of investment properties of £0.7 million. These profits were offset by a loss of £1.1 million arising on the valuation of the derivative financial instruments arising in the period. Excluding the revaluation surplus, profit on sale of investment properties and loss on the derivative financial instruments the Group made an EPRA profit after tax of £3.5 million or EPRA earnings per share of 1.8p - a decrease of 11% over the prior period. However, if the one-off surrender premiums of £1.3 million received in the first half 2011/12 are excluded the underlying adjusted earnings increased by 35%. 

Net rental income in the six months to 30 September 2012 was £6.2 million an increase of £1.0 million compared to £5.2 million in the prior period excluding one-off surrender premiums received of £1.3 million. The effect of acquisitions made in the current period and prior year contributed £1.0 million to net rental income. New lettings arising from asset management initiatives contributed a further £0.5 million although this was offset by the loss of income which arose as a result of insolvencies in 2011/12 of £0.5 million, primarily Focus DIY and Peacocks.

The MIPP joint venture contributed £0.5 million to the operating profit reflecting the continued investment build up in the period. MIPP also contributed a further £0.1 million in management fees. The revaluation of the MIPP portfolio resulted in a deficit of £0.6 million which arose as a result of the outward yield movement on the portfolio together with the absorption of acquisition costs arising in the period.

Administration expenses continue to be tightly controlled with no change over the prior period at £2.1 million, despite the current period reflecting a full six months of cost for staff hired partway through the previous period.

Net interest payable was £1.1 million, reflecting the interest on debt drawn to finance acquisitions and capital expenditure along with the amortisation of loan arrangement fees and commitment fees incurred on the facilities. During the period, the average interest cost increased to 3.5% reflecting fixed rate swaps entered into in the previous year, this rate will continue to increase in the future to about 3.7% when fully drawn based on current LIBOR and swap rates. A loss of £1.2 million was incurred on the mark to market valuation of the derivative portfolio reflecting the continued decline in anticipated libor rates. The five fixed rate interest rate swaps completed to date have been set at a weighted average rate of 1.7% (excluding loan margins and costs).

Dividend and dividend policy

The Board of Directors has declared an interim dividend of 1.8p per share or £3.4 million, an increase of 80% over the 1.0p declared for the first half of 2011/12. The dividend will be paid on 7 December 2012 to shareholders on the register at the close of business on 23 November 2012. The dividend will be paid entirely as a Property Income Distribution (PID). The 2011/12 final PID dividend of 2.3p per share or £4.4 million was paid during the period and has been recognised in these financial statements.

Balance sheet and net asset value

As at 30 September 2012 the Group's portfolio was valued at £246.1 million (£266.2 million including Metric's share of MIPP). Expenditure in the period on property acquisitions was £10.8 million and a further £8.0 million was spent on tenant incentives and capital expenditure relating to the redevelopment and refurbishment of the portfolio. After acquisition costs and capital expenditure the wholly owned property portfolio generated a revaluation surplus of £1.3 million.

The Group's investment in MIPP was valued at £20.4 million as at 30 September 2012 and generated a revaluation deficit of £0.6 million after acquisition costs.

Including MIPP, total acquisitions (net of acquisition costs) in the period were £35.9 million (£18.8 million at share).

The net asset value per share at the period end was 105p and the EPRA net asset value was 107p. The table below sets out the reasons for the movement in the EPRA net asset value since 31 March 2012:

Financing

As at 30 September 2012, the Group had net debt of £57.9 million with an LTV of 24% or 22% on a 'look through' basis including the Group's net share of MIPP.

Including our share of MIPP, the Group is committed to spend a further £21.0 million of which £2.8 million relates to acquisition costs; £15.7 million of expenditure is committed relating to redevelopments currently on site or about to commence; and a further £2.5 million is conditionally committed dependant on obtaining planning and/or pre-lets.

The Group is also committed to investing a further £4.8 million in the MIPP joint venture being the balance of the £25 million initial investment. This commitment was invested post period end following the acquisition of Lichfield Retail Park and Wickes, Nottingham by MIPP.

A further £30.1 million has been earmarked for developments at Leeds, Bishop Auckland (Phase 2), Congleton, and St Austell but is not yet committed.

The Group has two committed loan facilities totalling £114.7 million (£80.0 million expiring in four years; £34.7 million expiring in three and a half years). Post period end the MIPP joint venture signed a £75 million loan facility with Deutsche Pfandbriefbank AG. The Group also continues its ongoing discussions with a number of other lenders with a view to entering into additional loan facilities in the future.

The Deutsche Pfandbriefbank AG facility provides MIPP with a £75 million facility to acquire further retail investments. The anticipated all in cost of debt for the facility is expected to be 4.0% once fully drawn and the required amount of hedging has been put in place. The principal financial covenants of the facility are:

·; Interest cover ratio - projected net rental income to be not less than 2.0 times projected net interest payable, calculated on a 12 month forward looking basis;

·; Loan to value - total drawings not to exceed 60% of the total value of the properties secured

The Group has hedged 68% of its available facilities. The derivatives were valued at fair value with a net liability to the Group of £2.3 million or 1.2p per share which has been included on the balance sheet.

As at 30 September 2012 and including anticipated future debt facilities and capital expenditure committed and earmarked, the Group has firepower totalling about £67 million in Metric and £87 million in MIPP, calculated as follows:

1. Based on leveraging existing and anticipated properties at a 50% LTV and the availability of funds.

2. The availability of these facilities is dependent upon the timing of completion of anticipated developments.

Post period end, MIPP has acquired a property in Lichfield for £11.6 million and Nottingham for £4.1 million (including acquisition costs) which reduced the available firepower in MIPP to £71 million.

Key risks and uncertainties

Whilst the ultimate responsibility for risk management rests with the board, the management of risks is engrained across our organisation and in how we approach all aspects of our business. The close involvement of senior management in all significant decisions, combined with our cautious analytical approach and open communication with the board provide the framework to manage risks effectively.

Strategic risks

Group income statement

Six months ended 30 September 2012

All amounts relate to continuing activities.

There were no items of other comprehensive income or expense and therefore the profit for the current and prior period also reflects the Group's total comprehensive income.

Group balance sheet

As at 30 September 2012

Group statement of changes in equity

Six months ended 30 September 2012 (Unaudited)

Year ended 31 March 2012 (Audited)

Six months ended 30 September 2011 (Unaudited)

Group cash flow statement

Six months ended 30 September 2012

Notes to the financial statements

1. Basis of preparation and general information

Basis of preparation

The condensed consolidated financial information included in this half yearly report has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 "Interim Financial Reporting", as adopted by the European Union. The same accounting policies, estimates, presentation and methods of computation are followed in this half year report as applied in the Group's latest annual audited financial statements. The current period information presented in this document is reviewed but unaudited and does not constitute statutory accounts within the meaning of S435 of the Companies Act 2006.

The financial information for the year to 31 March 2012 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that period has been delivered to the Registrar of Companies. The auditor's report on those accounts was not qualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and did not contain statements under section 498(2) or (3) of the Companies Act 2006.

These condensed financial statements were approved by the Board of Directors on 8 November 2012.

Going concern

The Directors are satisfied that the Group has the resources to continue in operational existence for the foreseeable future. For this reason, the financial statements are prepared on a going concern basis.

The Group's business activities, together with the factors affecting its performance, position and future development are set out in the Business Review. The finances of the Group, its liquidity position and borrowing facilities are set out in the Financial Review and in notes 12 and 14 of the condensed consolidated financial information.

The Directors have reviewed the current and projected financial position of the Group, making reasonable assumptions about future trading performance. As part of the review the Directors have considered the Group's cash balances, debt maturity profile of its undrawn facilities, and the long-term nature of tenant leases. On the basis of this review, and after making due enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Half Year Report.

2. Segmental information

During the period and comparative periods, the Group operated in and was managed as one business segment, being retail property investment, with all properties located in the United Kingdom.

3. Gross and net rental income

4. Administrative expenses

5. Finance costs

6. Tax

Factors affecting the tax charge for the period:

7. Earnings per share

Adjusted earnings per share have been calculated in accordance with European Public Real Estate Association (EPRA) guidelines. The change in the fair value of financial instruments reflects the fair value movement from inception of the derivative financial instrument until the balance sheet date of £1,190,000 as well as the amortisation, on a straight line basis, of the premium paid on entering into the interest rate cap of £62,000 (six months ended 30 September 2011: £57,000; year ended 31 March 2012: £118,000).

8. Dividends

The Board of Directors has proposed an interim dividend of 1.8p per share which was approved by the Board of Directors on 8 November 2012 and will result in a distribution of £3,420,000. The dividend will be paid on 7 December 2012 to shareholders on the register at the close of business on 23 November 2012. The dividend will be paid entirely as a PID (Property Income Distribution). This dividend has not been recognised in the condensed consolidated financial statements.

The Group Statement of Changes in Equity shows total dividends in the six months to 30 September 2012 of £4,370,000 (2.3p per share) being the final dividend for the year to 31 March 2012 which was approved at the Annual General Meeting in July 2012. The dividend was paid entirely as a PID.

PID dividends are paid, as required by REIT legislation, after deduction of withholding tax at the basic rate of income tax (currently 20%).

9. Investment properties

9. Investment properties (continued)

The Company's freehold and leasehold investment properties were valued as at 30 September 2012 by Glyn Harper MRICS on behalf of the external valuer, CBRE Limited, in accordance with the requirements of the RICS Valuation - Professional Standards 2012 ("the Red Book"), on the basis of Fair Value assuming that the properties would be sold subject to any existing leases. The valuations were prepared by an RICS Registered Valuer, whose opinion of Fair Value was primarily derived using comparable recent market transactions on arm's length terms. We confirm that 'Fair Value' for the purposes of financial reporting under International Financial Reporting Standards is effectively the same as 'Market Value'. The total fees earned by CBRE for this assignment represent less than 5% of their total UK revenues. The valuer has continuously been the signatory of valuations for the Company since September 2010. CBRE has carried out Valuation and professional services on behalf of the Company for less than five years.

The historic cost of investment properties and investment properties under development amounts to £230,165,000 (31 March 2012: £211,304,000; 30 September 2011: £217,871,000) and the cumulative valuation surplus amounted to £15,935,000 (31 March 2012: £14,603,000; 30 September 2011: £11,061,000).

Long leasehold properties, which are treated as finance leases and included in investment properties above, amounted to £35,925,000, (31 March 2012: £35,550,000; 30 September 2011: £34,400,000).

Properties with a value of £91,170,000 (31 March 2012: £91,965,000; 30 September 2011: £56,250,000) had been secured under the bank loan facility with The Royal Bank of Scotland plc and properties with a value of £69,180,000 (31 March 2012: £72,385,000; 30 September 2011: £73,300,000) had been secured under the bank loan facility with Eurohypo AG.

Investment properties under development only include those currently under construction or refurbishment. The factors affecting the valuation of investment properties are included in the Business Review on pages 4 to 13.

Capital commitments

Capital commitments have been entered into amounting to £16,336,000 (31 March 2012: £20,622,000; 30 September 2011: £5,830,000) which have not been provided for in the condensed consolidated financial statements.

10. Investment in joint venture

As at 30 September 2012 the Group owns a one-third stake in Metric Income Plus Limited Partnership ("MIPP"). MIPP's freehold and leasehold investment properties were valued as at 30 September 2012 by Glyn Harper MRICS on behalf of the external valuer, CBRE Limited, in accordance with the requirements of the RICS Valuation - Professional Standards 2012 ("the Red Book"), sixth edition, on the basis of Fair Value assuming that the properties would be sold subject to any existing leases. The valuations were prepared by an RICS Registered Valuer, whose opinion of Fair Value was primarily derived using comparable recent market transactions on arm's length terms.

11. Trade and other receivables

The Directors consider that the carrying amount of trade and other receivables approximates their fair values. The Group's credit risk is primarily attributable to amounts due from tenants, which consist of rent and service charge monies. A provision for doubtful debts is provided for based on estimated irrecoverable amounts determined by past experience and knowledge of the individual tenant's circumstances. The amount charged to the income statement in respect of doubtful debts was £46,000 (six months to 30 September 2011: £83,000; year to 31 March 2011: £105,000). Trade and other receivables are initially measured at invoiced value and have settlement dates within one year.

12. Cash and short-term deposits

As at 30 September 2012 £3,310,000 (31 March 2012: £2,719,000; 30 September 2011: £2,249,000) was held in rent and restricted accounts which are not readily available to the Group for day-to-day commercial purposes.

The credit risk on cash and short-term deposits is limited because the counterparties are banks and money market funds with credit ratings of at least AA- or government backed, and strict counterparty limits ensure the Group's exposure to bank failure is minimised and consequently there is an insignificant risk of changes in value.

13. Trade and other payables

Trade payables are interest free and have settlement dates within one year. The Directors consider that the carrying amount of trade and other payables approximates their fair value.

14. Bank loans

The bank loans are secured by fixed charges over certain of the Group's investment properties with a carrying value of £160,350,000 (31 March 2012; £164,350,000; 30 September 2011: £129,550,000) and are repayable within two to five years of the balance sheet date.

Maturity of undrawn committed borrowing facilities:

15. Derivative financial instruments

The Group is exposed to market risk through interest rate fluctuations. It is the Group's policy that a significant portion of external bank borrowings are at either fixed or capped rates of interest. The Group will use interest rate derivatives including swaps and caps to manage its interest rate exposure and hedge future interest rate risk for the term of the respective bank loan. This policy does not entirely eliminate the risk although the Directors believe it provides an appropriate balance of exposure.

All derivative financial instruments are carried at fair value and would be classified as level 2 fair value measurements, as defined by IFRS 7, being those derived from inputs other than quoted prices (included within level 1) that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Details of the Group's derivative financial instruments that were in place at 30 September 2012 are provided below.

* commences January 2013

# commences April 2013

All derivative financial instruments are non-current and are interest rate derivatives.

16. Net asset value

The basic net asset value per share has been calculated based on 190,000,000 shares in issue at 30 September 2012, 31 March 2012 and 30 September 2011.

EPRA net asset value per share has been calculated based on 190,303,828 shares in issue at 30 September 2012, 31 March 2012 and 30 September 2011. This net asset value has been calculated in accordance with European Public Real Estate Association (EPRA) guidelines.

The change in the fair value of financial instruments reflects the fair value movement from inception of the derivative financial instrument until the balance sheet date of £2,892,000 as well as the amortisation, on a straight line basis, of the premium paid on entering into the interest rate cap of £180,000 (31 March 2012: £118,000; 30 September 2011: £57,000).

17. Post balance sheet events

On 30 October 2012 the Group has made a further loan of £3,854,000 to the MIPP joint venture to enable it to complete the acquisition of Lichfield Retail Park, Lichfield which completed on 31 October 2012.

On 7 November 2012 the Group committed to make a further loan of £927,000 to the MIPP joint venture to enable it to complete the acquisition of Wickes, Mansfield Road, Nottingham, on 13 November 2012. This loan completes the £25 million of partner loans committed by Metric.

On 7 November 2012 the MIPP joint venture entered into a £75,000,000 credit facility with Deutsche Pfandbriefbank AG.

Directors' responsibility statement

The Directors are responsible for preparing the condensed set of financial statements, in accordance with applicable law and regulations. The Directors confirm that, to the best of their knowledge:

·; This condensed set of financial statements has been prepared in accordance with IAS 34 "Interim Financial Reporting", as adopted by the European Union, and

·; This condensed set of financial statements includes a fair review of the information required by Sections DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

By order of the Board

Andrew Jones

Chief Executive

Sue Ford

Finance Director

8 November 2012

Independent review report to Metric Property Investments plc

We have been engaged by the company to review the condensed set of financial statements in the half yearly financial report for the six months ended 30 September 2012 which comprises the income statement, the balance sheet, the statement of changes in equity, the cash flow statement and related notes 1 to 17. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilitiesThe half yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the company are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union.

Our responsibilityOur responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half yearly financial report based on our review.

Scope of reviewWe conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

ConclusionBased on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half yearly financial report for the six months ended 30 September 2012 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditors

London, United Kingdom

8 November 2012