Interim Results Announcement

INVESTORS IN GLOBAL REAL ESTATE LIMITED INTERIM RESULTS ANNOUNCEMENT The financial information set out in this announcement does not constitute theCompany's statutory financial statements. All figures are based on theunaudited financial statements for the period from 1 January 2014 to 30 June2014. The announcement is prepared on the same basis as will be set out in theinterim accounts. Company Information and Financial Highlights Company Information GBP Funds raised on 31 May 2006 100,000,000 NAV performance since launch, 31 May 2006* 5.87% Financial Highlights and Performance Summary for the six monthsended 30 June 2014 30/06/2014 GBP Net asset value 56,798,138 Number of shares held (excluding 48,785,327treasury shares) Net asset value per share 1.1642 Profit for the period including movement in realised and unrealised 5,339,702gains/losses on investment Basic and diluted earnings per share 0.1030 Dividends paid during the period** 1,095,873 * Net Asset Value ("NAV") performance since launch is based on compounded totalreturn including dividends and assuming re-investment and is calculated usingthe published NAV as at 30 June 2014. ** For additional information refer to note 13 to the Financial Statements. 30/06/2014 30/06/2013 Ongoing charges 1.97% 1.56% Ongoing charges for the period ended 30 June 2014 and 30 June 2013 have beenprepared in accordance with the Association of Investment Companies ("AIC")recommended methodology. Executive Summary Investors in Global Real Estate Limited ("IGRE" or the "Company"), is aGuernsey incorporated, authorised closed-ended fund. The Company is listed onthe London Stock Exchange and has approximately 311 investors. The Companyissued 100 million shares on 31 May 2006 at a price of £1 per share. During the half-year to 30 June 2014, the Company purchased 7,158,221 (2013:13,397,774) and cancelled 8,245,000 (2013: 14,750,000) of its own shares underthe Share Buyback Programme. At 30 June 2014, the Company had 53,909,322 (2013:70,974,322) shares in issue, of which 5,123,995 (2013: 6,721,774) shares wereheld in Treasury. Further to the Company's announcement on 12 March 2014 and following itsExtraordinary General Meeting ("EGM") on 3 April 2014 and shareholder approvalfor the Company to continue trading in its current form, the Directorsterminated the Investment Management Agreement with CBRE Clarion Securities LLCwith effect from 28 July 2014. Further details are provided in note 21. The Company appointed Schroder Property Investment Management Limited("Schroder Property") as its new Investment Manager and Alternative InvestmentFund Manager with effect from 2 July 2014. Further details are provided in note19. The Company also entered into an agreement with Northern Trust (Guernsey)Limited for the provision of depository services with effect from 2 July 2014.Further details are also provided in note 21. The Company's discount management programme was suspended on 29 April 2014pending the appointment of Schroder Property and continues to be reviewed bythe Board. At the Annual General Meeting ("AGM") held on 26 June 2014, the resolutionproposed to authorise the issue of shares on a non pre-emptive basis was notapproved by Shareholders. On 14 July 2014, the Board announced the closure ofthe placing programme established in the Company's prospectus with immediateeffect. The Board has reviewed the Company's current investment objective with SchroderProperty, and as announced on 8 August 2014 the Company will seek Shareholderapproval to amend the investment objective. Details regarding the date of therequired EGM and additional information in respect of the proposed changes areexpected to be announced during September 2014. Subject to Shareholder approval, the Company will change its name to "SchroderGlobal Real Estate Securities Limited". Chairman's Statement IGRE's portfolio of global, listed real estate investments has provided an NAVreturn, including dividends of 10% in the six months to 30 June 2014. Thisperformance was despite the continued strengthening of Sterling, which deducted2.2% overall from the value of the portfolio. The total return of the IGRE share price plus dividends was +4.9% in theperiod. This lagged the NAV performance as the discount to NAV widened to 8.1%.Prior to the suspension of the buy back in April, the Company repurchased 7.2million shares at an average price of 109p and a discount of 2%, leaving 48.8million shares in issue and a market capitalisation of £52.2 million as at 30June 2014. The universe of listed property equities continued to grow earnings per shareand dividend distributions, and the market rewarded the sector with a highermultiple rating as focus returned to the underlying growth profile of listedproperty companies. Listed property continues to enjoy a competitive cost ofcapital, exposure to high quality portfolios and strong balance sheets. Themacroeconomic environment of continued low long term interest rates and lowinflation, with moderate, positive economic growth, is a benign backdrop forlisted property companies. The universe of Real Estate Investment Trusts(REITs) is also growing, with an active IPO schedule, and it is clear that theREIT structure can be part of the solution for attracting new equity todistressed, but recovering, property markets, such as in Spain and Ireland, andallow the listed market to gain market share. The performance of the Company's investment portfolio was positive in all threemajor regions of The Americas, Asia and Europe. The USA was particularly strongat +17% in USD, rebounding from a weak second half in 2013 when fears ofquantitative easing tapering caused a sell off, and a subsequent reduction inten year interest rates this year helped support the sector. Europe alsoperformed strongly, returning +13% in local currency, with the rate of UKeconomic growth surprising most commentators and the Continental Europeaninvestments enjoying macro support from the ECB. Asia lagged, returning +5% inlocal currencies, and while positive overall it was dragged down by investmentslisted in Singapore and Hong Kong where the governments are attempting to coolthe housing markets, and sentiment regarding China's ability to engineer aneconomic soft landing waivered. Further to the announcement released by the Company on 2 July 2014 in respectof the appointment of Schroder Property as the new Investment Manager, theBoard has been reviewing the Company's investment objective with SchroderProperty. Subject to shareholder approval, the Company will now aim to provideinvestors with an attractive total return offering a sustainable income withpotential for future progressive dividend growth by investing in global realestate securities with strong fundamentals. This will incorporate a totalreturn philosophy constructed with a focus on strong fundamentals, expressinggreater conviction for the individual stocks across a diversified portfolio. In light of the results and the proposed new investment objective, the Companyis giving detailed consideration to the future level of dividend, details ofwhich are expected to be announced during September 2014. The Board is alsoreviewing with its new manager whether the discount management programme shouldbe closed permanently and will advise Shareholders when a decision is made. Finally, and again subject to shareholder approval, the Company will change itsname to "Schroder Global Real Estate Securities Limited". Crispian CollinsChairman29 August 2014 Directors Crispian Collins, aged 66 Mr. Collins is Chairman of the Company. He was formerly Vice Chairman, UBSGlobal Asset Management and a member of the Group Managing Board of UBS AG. Onleaving Oxford University in 1969, Mr Collins joined Phillips & Drew, London,which culminated in his appointment as Chief Executive in 1998 and ExecutiveChairman in 1999. He was a founding sponsor of the Phillips & Drew propertyteam. Trevor Ash, aged 68 Mr. Ash has over 30 years of investment experience. He is a Fellow of TheSecurities Institute for Securities & Investment. He was formerly ManagingDirector of Rothschild Asset Management (C.I.) Limited. He is a Director of anumber of hedge funds, fund of hedge funds, derivative and other offshore fundsincluding several managed or advised by J P Morgan, Merrill Lynch and InsightGroup. Mr Ash was a Director of N M Rothschild & Sons (CI) Limited, the bankingarm of the Rothschild Group in the Channel Islands. He was a founding Directorof Valetta Fund Management Limited, the first fund management company to beestablished in Malta following the introduction of financial servicesregulations in 1995. Mr Ash is a resident of Guernsey. Richard Saunders, aged 60 Mr. Saunders is Member of Core Plus Properties LLC, a private real estateinvestment company which currently owns and manages property in the North Eastand Mid-Atlantic regions of the United States. Mr. Saunders focuses on thecompany's capital markets activities with responsibility for acquisitions andfinance. From 1980 to 1995 Mr. Saunders was with Baring, Houston & Saunders,now ING Real Estate Investment Management. He moved to the United States ofAmerica in 1993 and his subsequent roles have included working for ING RealtyPartners LLC and as Chief Investment Officer of Healey & Baker InvestmentAdvisors. Mr. Saunders has significant international experience having advisedinvestors and companies across Europe, North America, South America and Asia. Richard Sutton aged 79 Mr. Sutton is formerly a partner of the Delaware law firm Morris, Nichols,Arsht & Tunnell. He is a member of the bar of the US Supreme Court and of theAmerican Law Institute. He is an independent trustee of the CBRE Clarion GlobalReal Estate Income Fund and the Unidel Foundation. He is a graduate of theUniversity of Delaware and of Yale Law School. Responsibility statement We confirm to the best of our knowledge that: * the Condensed set of Financial Statements has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union; * the Executive Summary, Chairman's Statement and the Investment Manager's Report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and a description of principal risks and uncertainties for the remaining six months of the year); and * the Chairman's Statement and the Investment Manager's Report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and charges therein). Signed on behalf of the Board by: Trevor AshDirector29 August 2014 Investment Manager's Report IGRE PERFORMANCE Global listed real estate companies generated positive total returns in the sixmonths to 30 June 2014 against a backdrop of a gradually improvingmacro-economic situation, subdued inflation and continued low interest rates.Support from central banks continued, and ten year interest rates fellslightly, adding support to the underlying property markets. The divergent paths of economic recovery across the major regions became moreevident in the period under review. The UK's economic outlook improved markedlyresulting in fast-paced upgrades to GDP growth projections for 2014 and beyond,while in Continental Europe the European Central Bank ("ECB") moved decisivelyto counter the threat of deflation in an interest rate cut, negative bankdeposits rates and a new Long Term Refinancing Operation ("LTRO") scheme. TheUS suffered a slow first quarter due to the cold weather but the data for thesecond quarter appeared more buoyant and back to trend although housing datahas been mixed. More recent employment data supports a monthly non-farm payrollrun rate exceeding 200,000 with consumer confidence inching higher, both ofwhich directly underpin improving demand for commercial property includingoffice space, apartments and retail spending. The major Asian economies movedforward, albeit well below the long term average rates of growth, with China'sslowdown requiring elements of stimulus to help rebalance the economy towardsdomestic consumption. Japan's economy continued to respond to Abe's first twoarrows of monetary and fiscal reforms, with inflation moving sharply upwardsbut doubts over the deliverability of the third arrow of structural reformlinger. Real estate stocks have generated favourable returns as a result of lower bondyields, accommodative capital markets, and improving demand for real estatespace with limited new supply. Vacancy rates continue to reduce in major assetclasses, ranging from U.S. apartments, global industrial and office markets inLondon, Tokyo, New York, San Francisco and Los Angeles, as well as in lodgingin global gateway cities. Landlords therefore are increasingly exercisingpricing power by pushing rental growth and limiting tenant concessions such asfree-rent periods or tenant improvements, with the results that net effectiverents are increasing. Real Estate companies are also growing cash flow pershare through "external" growth of acquisitions and value-added recycling ofcapital. Property values continue to rise as rents grow and property yieldshold firm and even decrease further, as the spread to fixed income investmentsremains wide. Active balance sheet management is also adding value as the costof debt for many companies remains low with conservative levels of financialleverage. In local currency terms, the investments in normal listed global propertyequities returned +12.4% but sterling strengthened against the basket ofcurrencies by 2.2%, tempering the returns in sterling. In particular, sterlingrose 3.3% against the USD and 3.7% against the Euro as the relativeexpectations of economic growth in the three diverged. The FTSE All Sharereturn of +1.7% and the EPRA Europe Index of pan European property equitiestotal return of +10.5% in sterling terms. IGRE's NAV return (NAV per share growth plus dividends) was +10.0% in the sixmonths to 30 June 2014 while the total return (share price appreciation plusdividends) +4.9% following the suspension of the discount control mechanism. All three of the major regions (Americas, Asia and Europe) posted positivereturns. Particularly strong total returns were generated in geographies andproperty types offering attractive current yield and/or prospects for continuedgrowth, including the U.S., Continental Europe and Australia, all of whichgenerated mid-teens total return in local currency. The greatest contributor to performance was the exposure to US Real EstateInvestment Trusts (REITS) which returned +13.4% in sterling due to a positiveUS REIT earnings outlook, staging a recovery after a poor six months'performance in the latter half of 2013 when quantitative easing ("QE") taperingconcerns depressed equity prices. Europe was also important to overall returns,with a strong performance from the holdings in UK big capitalisation companies(+11.1%) which enjoyed a beneficial combination of rising UK economic growthand falling long term interest rates. Continental Europe also performedstrongly (+9.5%) in sterling as the market anticipated greater ECB macrosupport, and on the sentiment that the trough in market rental values in manysub markets had arrived. The company's modest holdings in Hong Kong fell by15.6% in sterling as the market fretted over the pace and depth of the Chineseeconomic slowdown and the potential impact that could have on developers in theregion. RELATED PARTY TRANSACTIONS Related party transactions are provided in note 19 to the condensed set offinancial statements. There have been no material changes in the related partytransactions described in the last annual report. RISKS AND UNCERTAINTIES There are a number of risks and uncertainties, which have not changed fromthose described in the 2013 Annual Report, which could have a material impacton the Company's performance over the remaining six months of the financialyear and could cause actual results to differ materially from expected andhistorical results. A detailed explanation can be found in the annual reportwhich can be found on the Company's website. GOING CONCERN As provided note 2 to the Condensed Financial Statements, the Directors believeit is appropriate to continue to adopt the going concern basis in preparing theHalf-Yearly Financial Statements as they are satisfied the Company has adequatefinancial resources to continue in operation for the foreseeable future, aperiod not less than 12 months from the date of this report. GENERAL MARKET COMMENTARY Outlook Despite strong performance year-to-date, real estate shares continue to recoverfrom more subdued returns in 2013. Listed property company shares continue tomove higher on a well-supported dividend yield of nearly 4%, cash flow pershare growth in the 6% range, and multiples which are not stretched sincelisted real estate trades at a modest discount to estimated underlying privatemarket real estate value. In a world of gradual economic improvement, listedreal estate trading at discounted valuations should offer investors attractivetotal return potential over time anchored by current income via the dividend.Bond market volatility over shorter time periods poses the greatest risk tothis outlook. Real estate shares are benefitting from a scenario of improving growth butsubdued inflation. The current position and gradient of the yield curve isbeneficial for property companies and reflects a low inflationary environment.While forward markets indicate a bond yield on the U.S. 10-year Treasury ofcirca 3.0% by year end, the spot yield settled to a more benign level, closingat 2.5% at the end of June 2014. This indicates a potentially powerfulcombination of gradually improving economic growth but scant evidence ofinflation, providing the framework for potentially sustained outperformance forreal estate companies, which provide attractive current yield and steadyearnings growth. Outside the U.S., the stage of economic recovery varies with disparitiesranging from the U.K. and Japan, both of which are showing signs ofaccelerating, albeit off a low base in the case of Japan, to the euro zone,which is tenuously accelerating, to China, which is more clearly decelerating.Our macro-economic view continues to be one that sees global economicconditions improving over time and bond yields commensurately moving higher,although gradual in pace and change in trajectory. Real estate shares shouldbenefit from the current environment which has historically proven favourablefor performance. We underwrite property companies to generate earnings growth in 2014 in the +6%range as the economic recovery begins to gain further traction, and positivelyaffect real estate cash flows. Given that the majority of the cash flows arelargely contractual in nature, there is a fairly high degree of visibility tothese projections, with "risk to the upside" meaning that any potentialrevisions are likely to be positive ones not negative. Growing earnings leads to expanding dividend payouts, which will again bestrong in 2014. Current income generated by listed property's dividend yieldremains a defining investment characteristic of the sector. Listed propertycompanies' dividend yield currently averages 3-4% globally and is growingstrongly. We project average dividend growth to modestly exceed earnings growthin 2014 at approximately 7% (which is the same level as in 2013), driven by acombination of improving Company cash flows as well as an expansion of dividendpay-out policies which remain conservative. The spread between dividend yields and bonds also continues to beabove-average, suggesting good relative value versus fixed income investmentalternatives. The global weighted average dividend yield as at June 2014 was3.6%: Listed real estate values are discounted. We estimate that listed propertycompanies are trading at an average discount of 4% to NAV. Equity issuance may continue to fuel growth. In keeping with last year's trend,equity issuance has been active this year. Capital markets year-to-date haveseen a steady flow of new equity issuance from all parts of the globe,including Japanese property companies, German residential companies, Spanishand Irish blind investment pool IPOs, U.S. REITs and Mexican FIBRAs. Equity issuance follows a banner year in 2013 when property companies raisedover $50 billion of equity ($30 billion from U.S. alone), handily exceeding theapproximate $36 billion raised in 2012 and $31 billion in 2011. The increasedvolume of equity issuance means many things, most of them healthy, including arobust transactions market, higher management confidence, consolidatingproperty sectors, opportunistic investing, greater recycling of capital and apositive impact on share prices. In the U.S., fundamentals are stable to improving in the industrial, apartmentand lodging sectors as well as Gateway City Central Business Direct ("CBD")office and high-end mall companies. U.S. REITs offer an attractive combinationof yield and growth in an improving macro-economic environment. Property typeswhich may improve most quickly are those with short lease term lengths and/orproperty types whose shares outperform in anticipation of this improvement,such as the lodging apartment and office companies focused on central businessdistricts. Office investments are concentrated in Gateway CBD markets with abias toward the west coast plus mid-town Manhattan, as new supply continues tobe muted. West coast markets including San Francisco, Seattle, San Diego andwest Los Angeles are notably firming, although value can be found in bottomingsuburban markets as well, which tend to have higher current yield and lowermultiples. Dominant, high-quality regional mall companies also offer value asthey continue to generate strong internal growth, despite decelerating retailsales which have weighed on the shares. Our European positioning is predicated on an improving economic framework and asense of diminished risk in the euro zone. Investments are focused on thosewith higher growth characteristics, such as London office companies, as well asthose with more value via current yield, including many companies in the eurozone, some of which potentially may benefit from increased corporate activity.There is potential opportunity in bottoming markets in the periphery markets,including Spain where opportunity funds have been increasingly the "flavour ofthe month," so disciplined underwriting remains critical. In Asia, we see opportunities in Japanese real estate companies and remaincautious about China's slowing growth and policy driven headwinds. Positioningin the Asia-Pacific region continues to tread carefully around deceleratingeconomic growth in mainland China and policy driven headwinds in theresidential sector, where restrictions remain tight in markets including HongKong, Singapore and mainland China. We are more positive on Japan within theregion, where we remain positive on Tokyo office companies, which are showingimproved occupancies and accelerating rental growth after years of stagnation.Land values in Tokyo have recently improved and office vacancy has tightened,with vacancy in the five central wards now in the mid 6% range versus the mid8% range just a year ago. Australian property companies continue to offer anattractive combination of yield and growth, where we are attracted to theresidential and industrial sectors but remain somewhat cautious on the sluggishoffice market. PORTFOLIO POSITIONING UPDATE We aim to maintain diversification through a wide exposure to various regions,currencies and property types. In the Americas, we increased the exposure to the US from 44% to 54% to takegreater advantage of the above-market rates of dividend income and recurringcash flow per share growth. Within that, the exposure to US Preferred equitieswas reduced to inject more beta into the portfolio. We sold out of the Canadianholdings (from 3% to nil). Canadian REITs were excellent performers over theturbulent recent years but currently the outlook for the Canadian economy isconsiderably weaker than the US. In Asia we reduced the exposure to Australia from 6% to 5%, as the previouslystrong, resource-driven economic outlook has deteriorated and we sold out ofSingapore where the government is looking to cool the housing marketsignificantly. The exposure to Japan remained constant at 15% where"Abenomics", consisting of a combination of monetary, fiscal and structuralstimulus is feeding into the real economy and where we are witnessing asignificant improvement in rental values and lower property yields. Also relatively static was the exposure to Europe, at circa 26% of theportfolio. This material holding reflected the prospect of increased centralbank support from the ECB and stronger economic growth in the UK. PORTFOLIO STATISTICS Top Ten Holdings as at 30 June 2014 Investments Region Sector Holding Land Securities Group Plc United Diversified Property 5.40% Kingdom Holdings British Land Co Plc United Diversified Property 4.76% Kingdom Holdings Host Hotels & Resorts Inc United Hotels 4.29% States UDR Inc United Residential 4.22% States United Urban Investment Corp Japan Diversified Property 4.06% Holdings Eurocommercial Properties N.V. Netherlands Retail: Community 3.96% Shopping Centres Brandywine Realty Trust United Office Buildings 3.93% States Klepierre SA France Retail: Community 3.89% Shopping Centres Spirit Realty Capital Inc United Diversified Property 3.70% States Holdings Japan Real Estate Investment Japan Office Buildings 3.70% In common with certain other funds, the Company has disclosed its ten largestholdings, which is in compliance with current UK Listing Authority rules. Shareholders can obtain the full portfolio of the Company from theadministrator, Northern Trust International Fund Administration Services(Guernsey) Limited. CBRE CLARION SECURITIES, LLC 29 August 2014 Independent Review Report To The Members Of Investors In Global Real Estate Limited We have been engaged by the Company to review the Condensed Set of FinancialStatements in the Half-Yearly Financial Report for the six months ended 30 June2014 which comprises the Condensed Statement of Comprehensive Income, theCondensed Statement of Financial Position, the Condensed Statement of Changesin Equity, the Condensed Statement of Cash Flows and related notes 1 to 21. Wehave read the other information contained in the Half-Yearly Financial Reportand considered whether it contains any apparent misstatements or materialinconsistencies with the information in the Condensed Set of FinancialStatements. This report is made solely to the Company in accordance with InternationalStandard on Review Engagements (UK and Ireland) 2410 "Review of InterimFinancial Information Performed by the Independent Auditor of the Entity"issued by the Auditing Practices Board. Our work has been undertaken so that wemight state to the Company those matters we are required to state to them in anindependent review report and for no other purpose. To the fullest extentpermitted by law, we do not accept or assume responsibility to anyone otherthan the Company, for our review work, for this report, or for the conclusionswe have formed. Directors' responsibilities The Half-Yearly Financial Report is the responsibility of, and has beenapproved by, the Directors. The Directors are responsible for preparing theHalf-Yearly Financial Report in accordance with the Disclosure and TransparencyRules of the United Kingdom's Financial Conduct Authority. As provided in note 2, the Annual Report and Audited Financial Statements ofthe Company are prepared in accordance with International Financial ReportingStandards ("IFRS") as adopted by the European Union. The Condensed Set ofFinancial Statements included in this Half-Yearly Financial Report has beenprepared in accordance with International Accounting Standard 34 "InterimFinancial Reporting" as adopted by the European Union. Our responsibility Our responsibility is to express to the Company a conclusion on the CondensedSet of Financial Statements in the Half-Yearly Financial Report based on ourreview. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410 "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity", issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us tobelieve that the Condensed Set of Financial Statements in the Half-YearlyFinancial Report for the six months ended 30 June 2014 is not prepared, in allmaterial respects, in accordance with International Accounting Standard 34 asadopted by the European Union and the Disclosure and Transparency Rules of theUnited Kingdom's Financial Conduct Authority. Deloitte LLPChartered AccountantsSt Peter Port, Guernsey, Channel Islands 29 August 2014 Note: A review does not provide assurance on the maintenance and integrity ofthe website, including controls used to achieve this, and in particular onwhether any changes have occurred to the financial information since firstpublished. These matters are the responsibility of the directors but no controlprocedures can provide absolute assurance in this area. Legislation in Guernsey governing the preparation and dissemination offinancial information differs from legislation in other jurisdictions. CONDENSED STATEMENT OF COMPREHENSIVE INCOME Six months ended 30 June 2014 Total Total 01/01/2014 01/01/2013 to to 30/06/2014 3 0/06/2013 Notes £ £ Net gains on investments designatedat fair value through profit or loss 4 5,064,879 4,628,206 5,064,879 4,628,206 Other income 5 1,411,329 2,332,829 Operating expenses 6 (748,755) (810,811) Net income for the period 662,574 1,522,018 Profit before finance costs 5,727,453 6,150,224and tax Bank overdraft interest 6 (35,981) (31,988) (35,981) (31,988) Profit for the period before 5,691,472 6,118,236taxation Withholding tax 7 (351,770) (377,668) Profit for the 5,339,702 5,740,568period Basic and diluted earnings per share 14 0.1030 0.0803 The 'Total' column of this statement represents the Condensed Statement ofComprehensive Income, prepared in accordance with International FinancialReporting Standards as adopted by the European Union. The supplementary incomereturn and capital return columns are both prepared for information purposesonly. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of the Company. There are nominority interests. The notes form part of these Condensed Financial Statements. CONDENSED STATEMENT OF COMPREHENSIVE INCOME Six months ended 30 June 2014 01/01/2014 01/01/2014 01/01/2013 01/01/2013 to to to to 30/06/2014 30/06/2014 30/06/2013 30/06/2013 Notes Income £ Capital £ Income £ Capital £ Net gains on investmentsdesignated at fair valuethrough profit or loss 4 - 5,064,879 - 4,628,206 - 5,064,879 - 4,628,206 Other income 5 1,411,329 - 2,332,829 - Operating 6 (546,702) (202,053) (508,293) (302,518)expenses Net income/(expense) for the 864,627 (202,053) 1,824,536 (302,518) period Profit before finance costs and 864,627 4,862,826 1,824,536 4,325,688 tax Bank overdraft interest 6 (10,794) (25,187) (9,596) (22,392) (10,794) (25,187) (9,596) (22,392) Profit for the period before 853,833 4,837,639 1,814,940 4,303,296 taxation Withholding tax 7 (351,770) - (377,668) - Profit for the period 502,063 4,837,639 1,437,272 4,303,296 The 'Total' column of the statement represents the Condensed Statement ofComprehensive Income, prepared in accordance with International FinancialReporting Standards adopted by the European Union. The supplementary incomereturn and capital return columns above are both prepared for informationpurposes only. The notes form part of these Condensed Financial Statements. CONDENSED STATEMENT OF CHANGES IN EQUITY Six months ended 30 June 2014 30/06/2014 30/06/2013 Reserves Total Reserves Total Notes £ £ £ £ Balances at the start of 60,373,082 60,373,082 86,503,834 86,503,834the period Net profit for the 5,339,702 5,339,702 5,740,568 5,740,568period Dividends paid 13 (1,095,873) (1,095,873) (1,506,279) (1,506,279) Repurchase of ordinary 12 (7,818,773) (7,818,773) (15,220,320) (15,220,320)shares Balances at the end of 56,798,138 56,798,138 75,517,803 75,517,803the period Under the Companies (Guernsey) Law, 2008, the Company can distribute dividendsfrom capital and revenue reserves, subject to a net asset and solvency test. The notes form part of these Condensed Financial Statements. CONDENSED STATEMENT OF FINANCIAL POSITION As at 30 June 2014 30/06/2014 31/12/2013 Notes £ £ Non-current assets Financial investments designatedat fair value through profit or loss 8 56,681,452 66,274,088 Current assets Cash and cash 9 436,519 105,829equivalents Derivative financial 382 -asset Receivables 10 454,240 2,180,469 891,141 2,286,298 Total Assets 57,572,593 68,560,386 Current liabilities Bank overdraft 9 - 6,259,455 Payables 11 774,295 1,927,480 Derivative financial 160 369liability Total 774,455 8,187,304Liabilities NET ASSETS ATTRIBUTABLE TO EQUITY SHAREHOLDERS 56,798,138 60,373,082 Equity Share capital 12 - - Reserves 12 56,798,138 60,373,082 56,798,138 60,373,082 Net Asset Value per 15 1.1642 1.0792Share The Condensed Financial Statements were approved and signed at a Board Meetingof Investors in Global Real Estate Limited on 29 August 2014 by: Trevor AshDirector The notes form part of these Condensed Financial Statements. CONDENSED STATEMENT OF CASH FLOWS Six months ended 30 June 2014 01/01/2014 to 01/01/2013 to 30/06/2014 30/06/2013 Notes £ £ Operating Activities Profit for the period 5,339,702 5,740,568 Adjustments for: Net gains on investments 4 (5,064,879) (4,628,206) Interest expense 6 35,981 32,183 Dividend income 5 (1,411,325) (2,332,807) Foreign exchange losses on income 6 6,201 3,164 Operating cash flows before movements in (1,094,320) (1,185,098)working capital Decrease/(increase) in receivables 6,028 (26) (Decrease)/increase in payables (129,169) 332,301 Net cash used in operating activities (1,217,461) (852,823) Investing Activities Dividends received from investments 1,598,604 2,304,534 Proceeds on disposal of investments 31,197,762 22,342,865 Purchase of investments (16,039,649) (12,735,112) Net cash generated from investing 16,756,717 11,912,287activities Financing Activities Dividends paid 13 (1,095,873) (1,530,429) Financing expenses (34,465) (32,183) Repurchase of shares into treasury 12 (7,818,773) (14,174,881) Net cash used in financing activities (8,949,111) (15,737,493) Net increase/(decrease) in cash and cash 6,590,145 (4,678,029)equivalents Cash and cash equivalents at the (6,153,626) (911,333)beginning of the period Cash and cash equivalents as at end of 9 436,519 (5,589,362)the period The notes form part of these Condensed Financial Statements. Notes to the Condensed Financial Statements Six months ended 30 June 2014 1. The Company The Company was incorporated on 25 April 2006 and is registered in Guernsey asan Authorised Closed-Ended Investment Company. It is listed on the London StockExchange. The Company carries on the business of an investment company andinvests in global real estate securities. The Half-Yearly Financial Report of the Company for the six months to 30 June2014 comprise the Condensed Financial Statements of the Company. Unauditedcomparatives have been provided for the Company from 1 January 2013 to 30 June2013. Comparatives for the Company are also provided from the audited FinancialStatements for the year ended 31 December 2013. The information for the year ended 31 December 2013 is derived from theFinancial Statements delivered to the UK Listing Authority, and does notconstitute Statutory Accounts as defined by Guernsey Law. A copy of theStatutory Accounts for that year has been delivered to the Shareholders. TheAuditor's Report on those Financial Statements was not qualified and did notinclude a reference to any matter to which the auditors drew attention by wayof emphasis without qualifying their report and did not contain a statementunder section 263 (2) and (3) of The Companies (Guernsey) Law, 2008. 2. Principal Accounting Policies Statement of Compliance The Annual Report and Audited Financial Statements of the Company are preparedin accordance with IFRS as adopted by the European Union. The Condensed Set ofFinancial Statements included in this Half-Yearly Financial Report have beenprepared in accordance with International Accounting Standard 34 - InterimFinancial Reporting as adopted in the European Union. The accounting policies adopted are consistent with those of the previousfinancial year. During the Company's financial year the Company adopted: * IAS 32 - Financial Instruments: Presentation (effective date - 1 January 2014) The amendments had no material impact on the financial position or thereporting performance of the Company. Other changes to accounting standards in the current year also had no materialimpact on the financial position or the reporting performance of the Company. This condensed set of Financial Statements does not include all the informationand disclosures required in the Annual Financial Statements and should be readin conjunction with the Company's Annual Report and Financial Statements forthe year ended 31 December 2013. Going Concern After making all reasonable enquiries and having respect to the nature of theCompany and its investments, the directors are satisfied, based on theinformation available to them at present time, that it is appropriate tocontinue to adopt the going concern basis in preparing the financialstatements. The Directors have taken into consideration the following factors when makingthe assessment of the going concern basis: * the assets of the Company consist of listed securities which are readily realisable, there is low gearing and there are minimal creditors; * the Company has sufficient liquidity to meet all on-going expenses; * the Board regularly reviews the cash flows of the Company and is confident that the Company will have sufficient resources to meet future developments; and * as at 30 June 2014, the Company had an overdraft facility of the lower of £ 15,000,000 and 15% of Net Asset Value of which it had not drawn down an overdraft facility at the period end. Accordingly, the Company has adequate financial resources to continue inoperational existence for the foreseeable future. At the EGM held on 3 April 2014, the Shareholders approved for the continuationof the Company in its current form. Segmental Reporting The Directors are of the opinion that the Company is engaged in a singlesegment of business, being investment in real estate securities. The overallgovernance of the Company and investment strategy are approved and controlledfrom Guernsey. 3. Directors' Fees and Interests The Directors of the Company are remunerated for their services at such a rateas the Directors determine provided that the aggregate amount of such fees doesnot exceed £150,000 (31 December 2013: £150,000) per annum (excluding anyreimbursement for out of pocket expenses). Directors' fees for the period ended 30 June 2014 were £17,500 (30 June 2013:£17,500) for the Chairman, Chairman of the Audit Committee £15,000 (30 June2013: £15,000) and £13,750 (30 June 2013: £13,750) for the other Directors,Directors' fees paid for the period and accrued at period end are provided innotes 6 and 11. Crispian Collins has a beneficial interest of 200,000 Shares and Richard Suttonholds 80,000 Shares in the Company (31 December 2013: 200,000 and 80,000respectively). No other Director holds any shares in the Company. 4. Net gains on investments designated at fair value through profit or loss 30/06/2014 30/06/2013 £ £ Proceeds from sale of investments 29,684,946 22,336,769during the period Original cost of investments sold (27,672,298) (17,431,293)during the period Net profits realised on investments during 2,012,648 4,905,476the period Realised gains from foreign currencyon derivatives and investments during the period 17,732 27,692 Net losses on other foreign currency (26,288) (42,777) Net movement in unrealised losses fromforeign currency onderivatives during the period 591 - Movement in unrealised gains/(losses) on investments 3,060,196 (262,185)during the period Net gains on investments during the 5,064,879 4,628,206period 5. Other income 30/06/2014 30/06/2013 £ £ Deposit interest income from financialassets that are not atfair value through profit or loss 4 22 Dividend income from equity securities held at fair 1,411,325 2,332,807value through profit or loss 1,411,329 2,332,829 6. Expenses 30/06/2014 Income Capital Total £ £ £ Operating Expenses Payable to the Investment Manager and itsassociates: Investment Management fee (note 16, 19) 86,594 202,053 288,647 86,594 202,053 288,647 Payable to theCustodian: Custodian fees (note 17, 5,951 - 5,95119) 5,951 - 5,951 Other expenses: Administration fees (note 17, 19) 49,590 - 49,590 Audit fees 14,750 - 14,750 Auditors' remuneration for non-audit 16,500 - 16,500services* Broker fees (note 19) 21,970 - 21,970 Directors' fees (note 3) 60,000 - 60,000 Foreign exchange loss on income 6,201 - 6,201 Professional fees ** 101,298 - 101,298 Transaction costs on fair value through 62,412 - 62,412profit or loss assets Sundry expenses 121,436 - 121,436 546,702 202,053 748,755 Financing Expenses Bank overdraft interest 10,794 25,187 35,981 10,794 25,187 35,981 30/06/2013 Income Capital Total £ £ £ Operating Expenses Investment Management fee (note 16, 19) 129,651 302,518 432,169 129,651 302,518 432,169 Payable to the Custodian: Custodian fees (note 17, 19) 18,864 - 18,864 18,864 - 18,864 30/06/2013 Income Capital Total £ £ £ Other expenses: Audit fees 16,793 - 16,793 Auditors' remuneration for non-audit 73,500 - 73,500services* Administration fees (note 17, 19) 51,861 - 51,861 Directors' fees (note 3) 60,000 - 60,000 Transaction costs on fair value through 49,608 - 49,608profit or loss assets Foreign exchange loss on income 3,164 - 3,164 Broker fees (note 18, 19) (9,167) - (9,167) Sundry expenses 114,019 - 114,019 508,293 302,518 810,811 Financing Expenses Bank overdraft interest 9,596 22,392 31,988 9,596 22,392 31,988 * Fees of £3,000 and £13,500 were paid to the auditors, Deloitte LLP, inrespect of non-audit services in relation to Foreign Account Tax Compliance Act("FATCA") advice and the interim review respectively as at 30 June 2014 (30June 2013: £60,000 and £13,500 in respect of non-audit services in relation towithholding tax reclaims and the interim review). ** Professional fees relate to one-off costs in relation to the InitialPlacing, Open offer, and Offer for Subscriptions of C Shares and PlacingProgramme. For additional information refer to note 12 of the FinancialStatements. The Company has no employees other than the Directors. 7. Taxation 30/06/2014 30/06/2013 £ £ Withholding tax 351,770 377,668 351,770 377,668 The Company has been granted Exempt Status under the terms of The Income Tax(Exempt Bodies) (Guernsey) (Amendment) Ordinance, 1989 to income tax inGuernsey. Its liability is an annual fee of £600. 8. Financial investments designated at fair valuethrough profit or loss 30/06/2014 31/12/2013 £ £ Investment Portfolio 56,681,452 66,274,088 Investment Portfolio Cost at start of the period 61,096,133 73,417,673 Acquisitions at cost 15,019,466 32,761,587 Disposals at cost (27,672,298) (45,083,127) Cost at end of the period 48,443,301 61,096,133 Unrealised appreciation on investments 8,238,151 5,177,955 Fair Value 56,681,452 66,274,088 Investments are valued at the bid-market prices ruling as at the close ofbusiness at the statement of financial position date, net of any accruedinterest which is included in the Statement of Financial Position as an incomerelated item. The Directors are of the opinion that the bid-market prices arethe best estimate on fair value in accordance with the requirements of IFRS 13.Movements in fair value are included in the Statement of Comprehensive Income. For financial instruments that are recognised at fair value on a recurringbasis, the Company determines whether transfers have occurred between Levels inthe hierarchy by re-assessing categorisation, based on the lowest level inputthat is significant to the fair value measurement as a whole, at the end ofeach reporting period. The Company held the following financial instruments at fair value at 30 June2014. The Company has no financial instruments with fair values that aredetermined by reference to significant unobservable inputs i.e. those thatwould be classified as level 3 in the fair value hierarchy at 30 June 2014, norhave there been any transfers of assets or liabilities between levels of thefair value hierarchy. There are no non-recurring fair value measurements. Fair value Fair value measurements measurements at the at the end of the end of the reporting reporting period using: period using: Quoted prices in Quoted prices in active active markets for markets for identical identical assets/liabilities assets/liabilities (level 1) (level 1) Recurring fair value 30/06/2014 31/12/2013measurements: £ £ Financial assets Investments 56,681,452 66,274,088 56,681,452 66,274,088 The Directors consider that the carrying value amounts of financial assets andfinancial liabilities recorded at amortised cost in the financial statementsare approximately equal to their fair values. 9. Cash and cashequivalents 30/06/2014 31/12/2013 £ £ Cash at bank 436,519 105,829 Bank overdraft - 6,259,455 Cash at bank earns interest at floating rates based on daily bank depositrates. Short-term deposits are made for varying periods of between one day andone month depending on the immediate cash requirements of the Company and earninterest at the respective short-term deposit rates. The carrying amounts of these assets approximate their fair value. The Company has an uncommitted multicurrency overdraft facility currently madeavailable to it by Northern Trust (Guernsey) Limited to a maximum amount of £15,000,000 or 15% of the value of listed securities, whichever is lower. Thisfacility is secured by a charge in respect of the assets of the companies and aguarantee executed in the favour of the bank in the sum of £15,000,000.Interest is calculated at 1% plus the cost of funding from time to time inforce as applicable for relevant currency in which the facility is drawn. The Company had not drawn down on its overdraft facility as at 30 June 2014 (31December 2013: £6,259,455). 10. Receivables 30/06/2014 31/12/2013 £ £ Dividends receivable 206,873 394,152 Other receivables and 6,595 13,005prepayments Securities sold receivable 240,772 1,773,312 454,240 2,180,469 The Directors consider that the carrying amount of receivables approximatetheir fair value. 11. Payables 30/06/2014 31/12/2013 £ £ Administration fee payable (note 17, 24,932 25,20619) Audit fees payable 14,750 22,500 Directors' fees payable (note 3) 30,000 30,000 Investment management fees payable 139,798 160,667(note 16, 19) Other payables 1,516 (3,386) Professional fees payable - 109,011 Securities purchases payable 563,299 1,583,482 774,295 1,927,480 The Directors consider that the carrying amount of payables approximate theirfair value. 12. Share Capital £ a) Authorised Unlimited Unclassified Shares of No Par Value as at30 June 2014 and 31 December 2013 - b) Issued Shares: Unclassified Shares of No Par Value 53,909,322 at 30 June 2014 (31 December 2013: 62,154,322) of which5,123,995 (31 December 2013: 6,210,774) were held in Treasury. - Participating shares The Company has a single class of Shares which were issued by means of aninitial public offering on 31 May 2006, at 100p per Share. These Shares carryno right to fixed income. Ordinary Shares carry the right to vote at generalmeetings of the Company and to receive dividends and, in a winding-up willparticipate in any surplus assets remaining after settlement of any outstandingliabilities of the Company. Discount control mechanism In April 2013, the Board introduced a tighter discount control mechanism, withthe objective that the Company's shares should trade as close to NAV aspossible. The new policy has been effected through a programme of share buybacks, whenever the shares trade at a discount of greater than 2% to NAV. The Company's discount control programme was suspended on 29 April 2014 pendingthe appointment of Schroder Property as the new Investment Manager. The Boardis reviewing whether to continue the discount control policy with SchroderProperty and will notify shareholders in respect of its decision. The Company also has new shareholder authority to issue new shares at a premiumof circa 1% to NAV where demand exceeds supply. The Board will only issue newshares when they believe that it is advantageous to the Company's shareholdersand may decide not to apply the discount control policy in circumstances whichthe Board considers would not be in the best interests of shareholders. Share buyback facility The Directors have authority to buy back up to 14.99 per cent of the Company'sShares in issue immediately following Admission and will seek annual renewal ofthis authority from shareholders. Any buy back of Shares is made subject toGuernsey Law and within guidelines established from time to time by the Board(which will take into account the income and cash flow requirements of theCompany) and the making and timing of any buy backs is at the absolutediscretion of the Board. The Board may elect, subject to compliance with the applicable laws inGuernsey, to hold Shares purchased under the Company's buy back facility inTreasury, if it considers it to be in the best interests of shareholders. TheArticles permit the Company to hold up to 10 per cent of its total number ofShares in issue in Treasury in accordance with Guernsey Law. The Company willbe able to sell shares held in Treasury, subject to compliance with allapplicable laws and regulations, and such sale will not be subject to anypre-emption rights in favour of existing shareholders. Where the Company purchases its own shares, the consideration paid, whichincludes any directly attributable costs, is recognised as a deduction fromequity shareholders' funds through the share capital account. When such sharesare subsequently sold or reissued to the market, any consideration received,net of any directly attributable incremental transaction costs, is recognisedas an increase in equity shareholders' funds. Where the Company cancels treasury shares, no further adjustment is required tothe share capital at the time of cancellation. Shares held in treasury areexcluded from calculations when determining NAV per share and earnings pershare. At an EGM of the Company held on 29 January, 2014, Shareholders approved therenewal of the Company's Share Buyback Facility. During the period to 30 June 2014, the Company purchased 7,158,221 (31 December2013: 21,706,774) and cancelled 8,245,000 (31 December 2013: 23,570,000) of itsown shares under the Share Buyback Facility at an average price of £1.09 pershare and a total cost of £7,818,773 (2013: £24,593,242). Placing programme On 19 November 2013, the Company announced its intention to raise up to £50million by way of an Initial Placing, Open Offer and Offer for Subscription ofC Shares and Placing Programme in respect of up to 500 million New OrdinaryShares or existing Ordinary Shares for sale out of treasury. On 5 December2013, the Company announced that despite demand from new and current investorsthe Board determined that the Initial Offers would not have reached theirminimum size and accordingly decided that the Company would not proceed withthe initial offers. As the targeted increase in the Company's marketcapitalisation of £100 million has not been achieved the Directors consultedwith shareholders and believed it was in the best interests of the Company tocontinue in its present form and to grow through the Placing Programme. At anEGM of the Company held on 3 April 2014, Shareholders approved the continuationof the Company in it is current form. At the AGM held on 26 June 2014, theresolution proposed to authorise the issue of shares on a non pre-emptive basiswas not approved by Shareholders and the Board closed the placing programmeestablished in the Company's prospectus with immediate effect. Reserves Gains and losses recorded on the realisation of investments and realisedexchange differences of a capital nature are transferred to the RealisedInvestment Reserve. Unrealised gains and losses recorded on the revaluation ofinvestments held at the year end and unrealised exchange differences of acapital nature are transferred to the Unrealised Investment Reserve. 13. Dividends Dividends are expected to be paid on a quarterly basis in February, May,September and December. The Company declared the following dividends for theperiod from 1 January 2013 to 30 June 2014. Note 21 provides details of thedividend proposed after the period end. Quarter ending Dividend Net Record date Ex-dividend Pay date rate per dividend date share payable 31 March 2014 £0.010500 £ * 09/05/2014 07/05/2014 23/05/2014 512,246.00 31 December £0.010500 £ ** 31/01/2014 29/01/2014 14/02/20142013 583,627.25 30 September £0.010500 £ *** 29/11/2013 27/11/2013 11/12/20132013 606,968.75 30 June 2013 £0.010500 £ *** 16/08/2013 14/08/2013 30/08/2013 623,411.75 31 March 2013 £0.010500 £ *** 03/05/2013 01/05/2013 17/05/2013 745,736.75 * paid and accounted for in the condensed financial statements for the sixmonths ended 30 June 2014. ** paid after the year ended 31 December 2013 and accounted for in thefinancial statements for the period ended 30 June 2014. *** paid and accounted for in the financial statements for the year ended 31December 2013. Under Guernsey Law, companies can pay dividends in excess of accounting profitprovided they satisfy the solvency test prescribed under the Companies(Guernsey) Law, 2008. The solvency test considers whether a company is able topay its debts when they fall due; and whether the value of a company's assetsare greater than its liabilities. The Company passed the solvency test for eachdividend payment in the six month period ended 30 June 2014. 14. Basic and Diluted Earnings per Share The calculation for the basic and diluted earnings per share attributable tothe ordinary equity holders of the Company are based on the following data: 01/01/2014 to 01/01/2013 to 30/06/2014 30/06/2013 Earnings for the purposes of earnings £5,339,702 £5,740,568per share Weighted average number of 51,863,253 71,525,153shares Basic and diluted earnings per £0.1030 £0.0803share 15. Net Asset Value perShare As at As at 30/06/2014 31/12/2013 Total Net Asset Value £56,798,138 £60,373,082 Number of shares held (excluding 48,785,327 55,943,548treasury shares) Net Asset Value per £1.1642 £1.0792share 16. Investment Management Fee and Performance Fee CBRE Clarion Securities LLC, the Investment Manager during the period up to 28July 2014, was entitled to an investment management fee of 1% of the Company'sNet Asset Value per annum payable quarterly in arrears. Further details areprovided in note 19. In addition the CBRE Clarion Securities LLC was entitled to receive aperformance fee payable annually. This was based on 10% of the Company's totalreturns in excess of a hurdle rate of 8% per annum. Further details areprovided in note 19. Schroder Property was appointed as Investment Manager and AlternativeInvestment Fund Manager on 2 July 2014. Further details are provided in note21. 17. Administration Custodian and Depositary Fees The Company pays a quarterly annualised administration fee of 0.12% on thefirst £100,000,000 in gross market value of the Company's assets, 0.10% on theexcess over £100,000,000 calculated as at the last Valuation Day in each monthduring the relevant quarter, provided that the minimum annual administrationfee payable by the Company will be £100,000. Further details are provided innote 19. The Custodian is entitled to a fee payable by the Company on a transaction bytransaction and asset by asset basis. In addition, the Company will reimbursethe Custodian for any out of pocket expenses. Further details are provided innote 19. The Company also entered into an agreement with Northern Trust (Guernsey)Limited for the provision of depository services with effect from 2 July 2014.Further details are provided in note 21. 18. Broker Fees The Company appointed Numis Securities as the Broker and Financial Adviser tothe Company. Further details are provided in note 19. 19. Related Party Transactions and Significant Agreements All transactions between related parties were conducted on terms equivalent tothose prevailing in an arm's length transaction. (a) Administration fees for the Company amounting to £49,590 (30 June 2013: £51,861) were payable to Northern Trust International Fund AdministrationServices (Guernsey) Limited, calculated in accordance with the AdministrationAgreement, dated 16 May 2006, of which £24,932 remained outstanding as at 30June 2014 (31 December 2013: £25,206). (b) The Company entered into an agreement on 2 July 2010 with CBRE ClarionSecurities LLC for the provision of investment management services. Theagreement with CBRE Clarion Securities LLC was terminated on 28 July 2014.Schroder Property was appointed as the new Investment Manager and AlternativeInvestment Fund Manager on 2 July 2014. Further details of the appointment areprovided in note 21. Investment management fees for the Company of £288,647 (30 June 2013: £432,169), were payable to CBRE Clarion Securities LLC, of which £139,798remained outstanding as at 30 June 2014 (31 December 2013: £160,667). The hurdle rate was not met hence no performance fees are due from the Companyto CBRE Clarion Securities LLC for the period to 30 June 2014 (30 June 2013: £nil). (c) Custody fees for the Company amounting to £5,951 (30 June 2013: £18,864)were payable to Northern Trust (Guernsey) Limited, calculated in accordancewith the Master Custody Agreement, dated 16 May 2006, out of which no feeremained outstanding as at 30 June 2014 (31 December 2013: £nil). (d) The Company entered into an agreement with Numis Securities on 18 December2008, appointing Numis Securities as Broker and Financial Adviser for theCompany. Broker fees for the period to 30 June 2014 were £21,970 (30 June 2013:(£9,167)) of which £nil were prepaid or outstanding as at 30 June 2014 (31December 2013: £nil prepaid or outstanding). (e) The Company entered into an agreement with Northern Trust (Guernsey)Limited following the period end for the provision of depository services.Further details of the appointment are provided in note 21. (f) Investors in Global Real Estate Limited has no controlling parties. (g) The following related parties had a beneficial interest in the shares ofthe Company: % of issued Unclassified Shares share capital Crispian 200,000 0.41%Collins Trevor Ash - - Richard - -Saunders Richard Sutton 80,000 0.16% There have been no changes in the interest of the above directors in theperiod. 20. Reconciliation of Net Assets Attributable to Unitholders NAV per NAV Participating Share £ £ Net Asset Value reported to London 56,813,090 1.1646Stock Exchange Adjustment to accruals and (14,952) (0.0004)receivables Net Assets Attributable to Shareholders per 56,798,138 1.1642Financial Statements The published NAV per share of £1.1646 is different to the accounting NAV pershare of £1.1642 due to the adjustments noted above. 21. Material events after the statement of financial position date Schroder Property was appointed as the new Investment Manager and AlternativeInvestment Fund Manager on 2 July 2014, following the Shareholders approval forthe continuation of the Company in its current form at the EGM held on 3 April2014. Schroder Property is entitled to receive an investment management fee of0.85% of the Company's Net Asset Value per annum payable quarterly in arrears,subject to a minimum investment management fee of £550,000 for the 12 monthperiod from 2 July 2014. The Company also entered into an agreement with Northern Trust (Guernsey)Limited for the provision of depository services with effect from 2 July 2014.Depositary's fees are payable to Northern Trust (Guernsey) Limited monthly inarrears at a rate of 0.03% of the Net Asset Value of the Company below £100million and 0.0150% on Net Assets in excess of £100 million as at the lastbusiness day of the month subject to a minimum fee of £30,000 per annum. On 14 July 2014, the Board announced the closure of the placing programmeestablished in the Company's prospectus as the resolution proposed to authorisethe issue of shares on a non pre-emptive basis was not approved by Shareholdersat the AGM held on 26 June 2014. Further to the Company's announcement on 12 March 2014 and following its EGM on3 April 2014 and shareholder approval for the Company to continue trading inits current form, the Directors terminated the Investment Management Agreementwith CBRE Clarion Securities LLC with effect from 28 July 2014. On 7 August 2014 the Company declared a dividend payment of £512,246representing £0.0105 per share for the quarter ending 30 June 2014. Thisdividend will be paid on 5 September 2014. Further to the announcement released by the Company on 2 July 2014 in respectof the appointment of Schroder Property as the new Investment Manager, theBoard has been reviewing the Company's investment objective with the SchroderProperty. Subject to shareholder approval, the Company will now aim to provideinvestors with an attractive total return offering a sustainable income withpotential for future progressive dividend growth by investing in global realestate securities with strong fundamentals. This will incorporate a totalreturn philosophy constructed with a focus on strong fundamentals, expressinggreater conviction for the individual stocks across a diversified portfolio. Subject to shareholder approval, the Company will change its name to "SchroderGlobal Real Estate Securities Limited". RISK MANAGEMENT Six months ended 30 June 2014 Further to the Investment Manager's Report, the main risks arising from theCompany's financial instruments are market risk, credit risk, liquidity risk,interest rate risk and foreign currency risk. Market risk The Company's investments are subject to market fluctuations and the riskinherent in the purchase, holding or selling of securities and there can be noassurance that appreciation or maintenance in the value of those investmentswill occur. The Board continues to monitor and oversee the profile of the portfolio on aregular basis to ensure risks are managed. See the Portfolio Statistics and thecountry and sector allocations. Market price risk Market price risk arises mainly from the uncertainty about future prices of thefinancial instruments held by the Company. It represents the potential loss theCompany may suffer through holding market positions in the face of pricemovements. The Company's investment portfolio is exposed to market price fluctuationswhich are monitored by the Manager in pursuance of the investment objectivesand policies. Adherence to investment guidelines and to investment andborrowing powers set out in the Placing and Offer for Subscription Documentmitigates the risk of excessive exposure to any particular type of security orissuer. Market Price Sensitivity Analysis If equity prices had been 25% higher/lower, the increase/decrease in Net Profitand Net Assets figures would be £14,170,363. This sensitivity analysis has beendetermined based on the exposure to equity price risks at the reporting date. The 25% (2013: 25%) for the Company price movement estimate has been arrived atby taking the average of the total price movement changes during the year. The Company's sensitivity to equity prices has not changed significantly fromthe prior year. Concentration Risk The Company's investments are spread over various countries as detailed in theCountry Analysis details and therefore the Company is exposed to macroeconomicchanges in the economies of those countries. CBRE Clarion LLC seeks to reduce portfolio risk by limiting investmentconcentration in any individual security, having exposure to many differentproperty sectors, and also many different geographic regions. In addition, theCBRE Clarion LLC undertakes a listed securities portfolio liquidity screen bymonitoring average weekly and monthly trading volumes to ensure relativelyliquid positions in the Company's portfolio. Credit Risk Credit risk is the risk that an issuer or counterparty will be unable orunwilling to meet a commitment that it has entered into with the Company. The Company's credit risk is attributable to its trade receivables and cash andcash equivalents. An allowance for impairment is made where there is anidentified loss event which, based on previous experience, is evidence of areduction in the recoverability of the cash flows. The Board continues to monitor the Company's exposure to credit risk. The Company is exposed to material credit risk in respect of cash and cashequivalents and debtors. The credit risk from cash and cash equivalents ismitigated as all cash is placed with Northern Trust (Guernsey) Limited("NTGL"). NTGL is a wholly owned subsidiary of The Northern Trust Corporation ("TNTC").TNTC is publicly traded and a constituent of the S&P Developed Property Index(GBP) 500. TNTC has a credit rating of A+ from Standard & Poor's and A2 fromMoody's. The credit risk associated with debtors is limited to other receivables. Creditrisk is mitigated by the Company's policy to transact only with leadingcommercial and investment banks. It is the opinion of the Board of Directorsthat the carrying amounts of these financial assets represent the maximumcredit risk exposure as at the reporting date. The Company has no significant concentration of credit risk. There were no loan defaults or breaches during the current or prior years. Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulties inrealising assets or otherwise raising funds to meet financial commitments. TheCompany mitigates this risk by investing in listed real estate securities whichare readily redeemable and liquid. Furthermore in order to minimise the liquidity risk the Company can raiseoverdraft facilities to meet any liquidity requirements that may arise.Ultimate responsibility for liquidity risk management rests with the Board,which has built an appropriate liquidity risk management framework for themanagement of the Company's short, medium and long-term funding and liquiditymanagement requirements. Interest Rate Risk Floating rate financial assets comprise the cash balances which bear interestat rates based on bank base rates. The Company may be exposed to the risk ofinterest rate fluctuations as borrowings may be obtained either based onfloating rate or fixed term interest rate terms. Increases in interest rates may increase the costs of the Company's borrowings(in particular, floating interest rate loans) and may have an adverse effect onthe Company and, consequently, the ability of the Company to pay dividends. In the event interest rates rise this makes leveraging the portfolio lessattractive because the return on investment needs to be higher than the cost ofborrowing for the Company to gear the portfolio. The inverse is also true ifcost of borrowing is low relative to the return on investment, leveraging theportfolio becomes more attractive. The investment manager will assess the appropriate rate of leverage based onhis assessment of interest rates relative to the projected investment returns.Leverage is monitored regularly and on an ongoing basis by the Board. Foreign Currency Risk The Company invests in securities using currencies other than Sterling, theCompany's functional currency, and the Consolidated Statement of FinancialPosition may be significantly affected by movements in the exchange rates ofsuch currencies against Sterling, the functional currency. Capital Management The Company has the power under its Articles to borrow up to an amount equal to50 per cent. of the Total Assets. The Company's policy will be to limit suchborrowings to 25 per cent. of the NAV. The Company's objectives when managing its capital is to safeguard its abilityto continue as a going concern while maximising the return to stakeholdersthrough the optimisation of the debt and equity balance. The capital structure of the Company consists of cash and cash equivalents andequity attributable to equity holders of the Company, comprising issuedcapital, reserves and retained earnings as provided in note 12. The Boardcontinue to monitor the balance of the overall capital structure through thepayment of dividends, new share issues, share buybacks as well as the issue ofnew debt or the redemption of existing debt. The Company is not subject to anyexternal capital requirements. The use of borrowings by the Company may increase the volatility of the returnsto shareholders and the NAV per share. If any of the covenants under any bank facility are breached, the Company maybe required to suspend payment of its dividends.

The Company's overall strategy remains unchanged since the end of 2013.