Interim Results

22nd Aug 2008 07:00

Standard Life Investments Property income Trust Limited

Interim Report and Condensed Financial Statements

1 January 2008 to 30 June 2008

Objective 

To provide shareholders with an attractive level of income together with the prospect of income and capital growth. 

Investment Policy 

The Directors intend to achieve the investment objective by investing in a diversified portfolio consisting of UK commercial properties. The majority of the portfolio will be invested in direct holdings within the three main sectors of Retail, Office, and Industrial, although it may also invest in "other" commercial property such as hotels, nursing homes and student housing. Limited development and investment in co-investment vehicles is permitted (maximum 10% of the portfolio). 

In order to manage risk in the Company, without compromising flexibility, the following restrictions apply to the portfolio in normal market conditions: 

• No property will be greater by value than 15% of total assets. 

• No tenant (excluding Government) shall be responsible for more that 20% of the Company's rent roll. 

• The Loan to Value ratio (borrowings less cash divided by property portfolio value) will not exceed 65%. 

Financial Highlights 

• Dividends per share maintained at 6.76p 

• Dividend yield of 10.1% based on period end share price 

• Net Asset Value per share decreased by 9.0% to 101.6p 

• Value of property portfolio £156.7m 

• One property disposed over the period for £17.7m, one property purchased during the period for £7.9m.

30 June 2008

31 December 2007

%Change

IFRS Net Asset Value per share *	103.3p	113.3p	-8.8%
Published adjusted IFRS Net Asset
Value per share **	101.6p	111.6p	-9.0%
Price per share	66.8p	77.8p	-14.1%
Value of total assets	£205.2m	£219.4m	-6.5%
Loan to Value ***	25.5%	27.9%
Cash position	£44.4m	£34.5m	28.7%
Dividends per share ****	3.38p	6.76p

* Calculated under International Financial Reporting Standards. 

** Calculated under International Financial Reporting Standards, adjusted to include the last quarter's dividend. 

*** Including cash offset.

**** Six months ended 30 June 2008 (year ended 31 December 2007)

  Chairman's Statement

Since writing my last Chairman's Statement the economic environment for the UK economy continued to deteriorate and the impact of the credit crunch is still affecting the banking sector's ability to lend as these financial institutions rebuild their capital positions. Against this challenging background it is no surprise that the level of UK commercial property transactions has slowed and values have fallen in the six months ended 30 June 2008. Given the investment policy, the Company continues to focus on properties that will generate rental income to finance dividends to shareholders. 

Income and Total Return 

The Company's property portfolio held up relatively well in a very difficult market producing a total return of -3.7% for the six months ended 30 June 2008 (IPD monthly index -6.0%). Over the reporting period the income return was in line with the IPD monthly index at 2.8%. One of the main objectives of the Company is to provide an attractive level of income. The Company's income return on its property portfolio was calculated after the impact of paying a £900,000 premium to DSG to secure a ten year extension of two leases at Clough Road, Hull. 

The Company announced a second interim dividend of 1.69p per share payable on 29 August 2008, making dividends of 3.38p for the six months ended 30 June 2008. Annualised dividends of 6.76p per share represent a dividend yield at 30 June 2008 of 10.1%, based upon the year end share price.

The Company's unaudited net asset value per share was 101.6p at 30 June 2008 and represented a fall of 9.0% over the six months ended 30 June 2008. 

Activity 

The Company sold its largest property Wellington House, London, for £17.7m in the first quarter and bought an industrial unit in Rainham, Thames Gateway, for £7.9m. 

Outlook 

The cash position at 30 June 2008 was £44.4m and the loan to value ratio was 25.5% after taking the Company's cash position into account. The Company is therefore well placed to take advantage of attractive buying opportunities that present themselves. Although the market sentiment is negative towards UK commercial property as an asset class at the present time the investment manager expects the UK commercial property sector to provide high single digit returns over the next few years mainly resulting from the asset class's stable income return and assuming economic recovery comes through in 2009. 

David Moore 

Chairman 

21 August 2008

  Directors' Responsibility Statement

The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge: 

the condensed set of Financial Statements have been prepared in accordance with IAS 34 as adopted by the European Union; and 

the Interim Management Report includes a fair review of the general conditions required by 4.2.7R and 4.2.8R of the Financial Services Authority's Disclosure and Transparency Rules. 

The Half-Yearly Financial Report, for the six months ended 30 June 2008, comprises an Interim Management Report in the form of the Chairman's Statement, the Investment Manager's Report, the Directors' Responsibility Statement and a condensed set of Unaudited Consolidated Financial Statements. 

For and on behalf of the Directors of Standard Life Investments Property Income Trust Limited 

David Moore 

Chairman 

21 August 2008

  

Investment Manager's Report 

UK Property Market 

The first six months of 2008 have seen a repeat of the second half of 2007 with capital falls in UK commercial property of 8.6% outweighing the +2.8% income return to give a total return of -6.0%. Although the year started in a more positive fashion with the rate of capital falls declining, they accelerated again in Q2 2008, due in part to the deteriorating economic environment. 

Over the first half of the year it was the industrial sector that proved most resilient with a total return of -5.4%, against -5.8% and -6.4% for offices and retail sectors respectively. Both the retail and office sectors in particular suffered from weaker expectations of occupier demand and increased tenant failures feeding through to lower rental growth expectations, and increased provisions for bad debt. 

The listed sector faired no better. Although it had a relatively strong first three months of 2008 with a minor recovery, this was reversed in Q2, as the attached chart shows, giving a total return for the period (assuming dividends reinvested) of -21.16% on the FTSE All share real estate index. The FTSE All Share index returned -11.16% over the same period.

Portfolio Valuation 

From December 2007 the properties in the Investment Portfolio have been valued by Jones Lang LaSalle. Prior to that time the valuer was DTZ Debenham Tie Leung, but they were replaced at the end of the term of their initial contract following a retendering exercise. 

The portfolio valuation at the end of the period was £156.7m. A further £44.4m was held in cash at the period end. This compares to £178.2m and £34.5m respectively as at end December 2007 and reflects that during the period the Company sold its largest asset, Wellington House London, and purchased an industrial asset in the Thames Gateway.

 

The primary aim of the Company is to provide an attractive level of income, and the property portfolio supports this with a running yield of 6.7% (IPD monthly index 5.7% 30 June 2008). 

  

Investment Activity 

Following the sale of a portfolio of six properties in Quarter 4 2007 for £44m the Company continued its strategy of selling properties that had a specific risk to the income stream or capital value by selling Wellington House London for £17.7m in Quarter 1 2008. It also bought an industrial unit in Rainham, Thames Gateway, for £7.9m in Quarter 1. Both transactions met the strategy of improving the duration and certainty of the portfolio cashflow. 

As the market continued to decline into Quarter 2 and the outlook weakened further, the Company decided to hold cash rather than invest into the market, and also not to undertake further sales as the market pricing is not attractive. 

Asset Management 

The priority of the period has been to maintain and improve the income security to the Company. The Company negotiated the removal of two break clauses in leases to DSG in Hull, securing the income until 2021. The Company has also had some successful lettings and lease renewals at its industrial estate in Aberdeen, where the high oil prices have led to continued strong demand. 

Loan to Value 

The loan to value level at 30 June 2008 stood at 25.5% of the market value of investment properties.

Investment outlook

By the end of Quarter 1 2008 the outlook for the UK commercial property market looked to have improved with pricing close to fair value, however over the second quarter market sentiment and our outlook  deteriorated. This change in outlook reflects the outward shift in bond yields, and increase in 5 year swap rates over the period making commercial property look relatively expensive. At the same time the worsening economic environment has hit the occupier market, which up until now has remained relatively robust. 

The listed sector normally proves a lead indicator to the direct market, and we expect to see a recovery here first. In line with the Standard Life Investments "Focus on Change" philosophy, we are looking at the triggers of a market recovery for where the turning point in this cycle will be. Although at a market level we do not believe the time is right to re-enter the direct property market, we are beginning to see attractive property specific opportunities appear as some sellers are forced to accept below market value. The Company is well placed to take advantage of opportunities given its high cash levels, but remains cautious in appraising opportunities.

Jason Baggaley

For Standard Life Investments

Investment Managers

  

Investment Manager's Report 

Property Investments as at 30 June 2008

Hollywood Green	London	Leisure	16-18m
Clough Road Retail	Hull	Retail Warehouse	14-16m
Park White Bear Yard	London	Standard Office	8-10m
Drakes Way 2-4	Swindon	Standard Industrial	8-10m
Bucknall Street	London	Standard Office	8-10m
Ocean Trade Centre	Aberdeen	Industrial Park	8-10m
Bathgate Retail Park	Bathgate	Retail Warehouse	6-8m
Century Plaza	Edgware	High Street Retail	6-8m
Chancellors Place	Chelmsford	Standard Office	6-8m
Marsh Way	Rainham	Standard Industrial	6-8m
Foxhills Industrial Park	Scunthorpe	Distribution Warehouse	4-6m
Interfleet House	Derby	Office Park	4-6m
Pit Hey Place	Skelmersdale	Distribution Warehouse	4-6m
Farah Unit, Crittal Road	Witham	Standard Industrial	4-6m
Turin Court	Manchester	Standard Office	4-6m
Windsor Court & Crown Farm	Mansfield	Standard Industrial	4-6m
Phase II, Telelink	Swansea	Office Park	4-6m
Esporta	Chislehurst	Leisure	4-6m
Coal Road	Leeds	Standard Industrial	2-4m
De Ville Court 31 / 32	Weybridge	Standard Office	2-4m
Queen Square	Bristol	Standard Office	2-4m
Halfords	Paisley	Retail Warehouse	2-4m
Wardley Industrial Estate	Manchester	Industrial Park	2-4m
Eurolink Normanton	Leeds	Industrial Park	2-4m
Easter Park	Bolton	Distribution Warehouse	2-4m
Lister House	Leeds	Standard Office	2-4m
Unit 14, Interlink Park	Bardon	Distribution Warehouse	1-2m
Portrack Lane	Stockton on Tees	Distribution Warehouse	1-2m

  Standard Life Investments Property Income Trust Limited

Unaudited Consolidated Income Statement

for the period ended 30 June 2008

		01 Jan 08 to	01 Jan 07 to
		30-Jun-08	30-Jun-07
	Note	£	£
Rental income		5,855,992	7,635,900
Unrealised (loss) / gain arising on adjustment to fair value of investment properties		(12,219,122)	1,772,856
Realised loss on disposal of investment properties		(533,888)	-
Investment management fees	3	(848,152)	(1,023,772)
Head lease payments		(33,037)	(142,484)
Other direct property costs		(344,702)	(188,889)
Directors' fees and subsistence		(52,262)	(41,992)
Valuation fees		(18,917)	(42,500)
Audit fees		(18,000)	(22,000)
Other administration expenses		(200,380)	(127,870)
Operating (loss) / profit		(8,412,468)	7,819,249
Finance costs - net
Interest payable		(2,696,994)	(2,964,522)
Interest receivable		1,219,280	80,933
(Loss) / profit for the period		(9,890,182)	4,935,660
(Loss) / earnings per share for the period
attributable to the equity holders of the Company
Basic and diluted		(9.51)	4.75
		pence	pence

All items in the above Consolidated Income Statement derive from continuing operations.

  Standard Life Investments Property Income Trust Limited

Unaudited Consolidated Balance Sheet

as at 30 June 2008

		30-Jun-08	31-Dec-07
	Note	£	£
ASSETS
Non-current assets
Freehold investment properties	5	139,421,931	142,151,538
Leasehold investment properties	5	15,707,562	39,800,604
Interest rate swap		2,717,874	----------------
		157,847,367	181,952,142
Current assets
Trade and other receivables		2,325,912	2,230,660
Cash and cash equivalents		45,044,609	35,171,457
		47,370,521	37,402,117
Total assets		205,217,888	219,354,259
EQUITY
Capital and reserves attributable
to Company's equity holders
Share capital		1,040,000	1,040,000
Share premium		5,217,022	5,217,022
Retained earnings	6	2,152,135	2,576,775
Capital reserves		4,863,266	14,635,767
Other distributable reserves		94,143,845	94,371,577
Total equity		107,416,268	117,841,141
LIABILITIES
Non-current liabilities
Bank borrowings		84,432,692	84,432,692
Interest rate swap		-	262,635
Redeemable preference shares		7,818,779	7,591,047
Leasehold obligations		7,062	4,029,314
		92,258,533	96,315,688
Current liabilities
Trade and other payables		5,542,587	4,912,163
Leasehold obligations		500	285,267
		5,543,087	5,197,430
Total liabilities		97,801,620	101,513,118
Total equity and liabilities		205,217,888	219,354,259

Approved by the Board of Directors on 21 August 2008

  Standard Life Investments Property Income Trust Limited

Unaudited Consolidated Statement of Changes in Equity

for the period ended 30 June 2007

					Other
	Share	Share	Retained	Capital	distributable
	capital	premium	earnings	reserves	reserves	Total equity
	£	£	£	£	£	£
Opening balance 1 January 2007 as previously reported	1,040,000	5,217,022	(4,146,647)	35,961,779	94,801,259	132,873,413
Prior period adjustment:
Taxation	-	-	6,895,522	-	-	6,895,522
Opening balance 1 January 2007 as restated	1,040,000	5,217,022	2,748,875	35,961,779	94,801,259	139,768,935
Profit for the period	-	-	4,935,660	-	-	4,935,660
Unrealised gain arising on adjustment to fair value of investment properties	-	-	(1,772,856)	1,772,856	-	-
Transfer between reserves*	-	-	214,841	-	(214,841)	-
Movement on revaluation  of interest rate swap	-	-	-	3,213,947	-	3,213,947
Dividends	-	-	(3,515,200)	-	-	(3,515,200)
Balance at 30 June 2007	1,040,000	5,217,022	2,611,320	40,948,582	94,586,418	144,403,342

*this is a transfer to move redeemable preference share finance costs from the retained earnings reserve to the other distributable reserves

  Standard Life Investments Property Income Trust Limited

Unaudited Consolidated Statement of Changes in Equity

for the period ended 30 June 2008

						Other
		Share	Share	Retained	Capital	distributable
		capital	premium	earnings	reserves	reserves	Total equity
	Note	£	£	£	£	£	£
Opening balance 1 January 2008		1,040,000	5,217,022	2,576,775	14,635,767	94,371,577	117,841,141
Loss for the period		-	-		(9,890,182)	-	(9,890,182)
Unrealised loss arising on adjustment to fair value of investment properties	5	-	-	12,219,122	(12,219,122)	-	-
Realised loss on disposal of  investment properties		-	-	533,888	(533,888)	-	-
Transfer between reserves*		-	-	227,732		(227,732)	-
Movement on revaluation  of interest rate swap		-	-		(2,980,509)	-	2,980,509
Dividends	7	-	-	(3,515,200)		-	(3,515,200)
Balance at 30 June 2008		1,040,000	5,217,022	2,152,135	4,863,266	94,143,845	107,416,268

*this is a transfer to move redeemable preference share finance costs from the retained earnings reserve to the other distributable reserves

  Standard Life Investments Property Income Trust Limited

Unaudited Consolidated Cash Flow Statement

for the period ended 30 June 2008

		01 Jan 08 to	01 Jan 07 to
		30 Jun 08	30 Jun 08
	Note	£	£
Cash flows from operating activities
Cash generated from operations	8	3,633,930	6,222,353
Interest paid		(1,077,478)	(2,749,681)
Net cash generated from operating activities		2,556,452	3,472,672
Cash flows from investing activities
Purchase of investment property		(7,800,750)	-
Capital expenditure on investment properties		(52,742)	(170,472)
Proceeds from disposal of investment properties	8	17,466,112	-
Interest received		1,219,280	80,932
Net cash generated / (used) in investing activities		10,831,900	(89,540)
Cash flows from financing activities
Dividends paid to the Company's shareholders	7	(3,515,200)	(3,515,200)
Net increase / (decrease) in cash and cash equivalents in the period		9,873,152	(132,068)
Cash and cash equivalents at beginning of period		35,171,457	5,214,503
Cash and cash equivalents at end of period		45,044,609	5,082,435

  Standard Life Investments Property Income Trust Limited

Notes to the Unaudited Consolidated Financial Statements

for the year ended 30 June 2008

1. GENERAL INFORMATION 

Standard Life Investments Property Income Trust Limited ("the Company") and its subsidiary (together the "Group") carries on the business of property investment through a portfolio of freehold and leasehold investment properties located in the United Kingdom. The Company is a limited liability company incorporated and domiciled in Guernsey, Channel Islands. The Company has its primary listing on the London Stock Exchange with a secondary listing on the Channel Islands Stock Exchange. The address of the registered office is Trafalgar Court, Les Banques, St Peter Port, Guernsey. These Unaudited Condensed Consolidated Financial Statements have been approved for issue by the Board of Directors on 21 August 2008. The Audited Consolidated Financial Statements of the Company for the year ended 31 December 2007 are available upon request from the registered office.

2. ACCOUNTING POLICIES

Basis of preparation 

The Unaudited Condensed Consolidated Financial Statements of the Group have been prepared in accordance with and comply with IAS 34, and all applicable requirements of Guernsey Company Law. They do not contain all of the information required for full annual statements and should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended 31 December 2007. Except as noted below, the same accounting policies and methods of computation are followed in these interim financial statements as compared with the Audited Consolidated Financial Statements prepared for the year ended 31 December 2007.

3. RELATED PARTY DISCLOSURES

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

Redeemable preference shares 

On 19 December 2003 the Company issued 6,000,000 25p redeemable zero dividend preference shares for £6,000,000 to The Standard Life Assurance Company. On 10 July 2006 these shares were transferred to Standard Life Assurance Limited. These shares have a nominal value of £1,500,000 and are redeemable by the Company at a price of £1.7908 . These shares do not carry any voting rights. 

Ordinary share capital

Standard Life Investment Funds Limited held 21,769,609 of the issued ordinary shares

throughout the period on behalf of its Unit Linked Property Funds (31 December 2007:

21,769,609). This equates to 20.9% (31December 2007: 20.9%) of the ordinary share capital, however, Standard Life Investments Funds Limited is not considered to exercise control of the Group. Those parties related to the Investment Manager waived their rights to commission on the initial purchase of these shares in order to maintain the fairness of the transaction to all parties.

Cash held on deposit with related parties 

As at 30 June 2008, £41,120,949 (31 December 2007: £30,971,442) was invested in Standard Life Investments (Global Liquidity Funds) plc, a liquidity fund that is rated Aaa by Moody's. The interest earned on this investment during the period was £1,149,507 (period ended 30 June 2007: £16,465) representing an average rate of 5.7% (period

ended 30 June 2007: 5.3%). 

Standard Life plc is the ultimate controlling party of the Investment Manager, Standard Life Investments (Corporate Funds) Limited. Standard Life Investments Global Liquidity Funds) plc is an entity that is also managed within the Standard Life plc group.

  

Directors 

The Directors hold the following number of Ordinary Shares in the Company:

	30 Jun 08	31 Dec 07
David Moore	15,000	15,000
Richard Barfield	30,000	30,000
John Hallam	15,000	15,000
Shelagh Mason	15,000	15,000
Paul Orchard-Lisle	25,000	25,000

No Director has any interest in any transactions which are or were unusual in their nature or condition or significant to the business of the Group and which were effected by any member of the Group since its date of incorporation. Total fees relating to the Directors in the period under review were £52,262 (period ended 30 June 2007: £41,992), being £50,000 (period ended 30 June 2007: £40,000) in respect of emoluments and £2,262 (period ended 30 June 2007: £1,992) in respect of travel and subsistence. 

Investment Manager 

On 19 December 2003 Standard Life Investments (Corporate Funds) Limited ("the Investment Manager") was appointed as Investment Manager to manage the property assets of the Group.

Under the terms of the Investment Management Agreement the Investment Manager is entitled to receive a fee at the annual rate of 0.85% of the total assets except where cash balances exceed 10% of total assets the fee on cash is 0.20%. Total fees charged for the period ended 30 June 2008 amounted to £848,152 (period ended 30 June 2007: £1,023,772). 

The amount due and payable at 30 June 2008 amounted to £418,805 (31 December 2007: £523,515).

  

4. TAXATION		30-Jun-08	30-Jun-07
		£	£
Unrealised (loss) / gain to be recovered through use of asset		(511,433)	2,122,156
Accumulated Schedule A loss		(7,710,112)	(5,555,011)
Taxable unrealised gain after utilised Schedule A losses		-	-
At the balance sheet date provision has been made for deferred tax on all temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
5. FREEHOLD AND LEASEHOLD INVESTMENT PROPERTIES	30-Jun-08	30-Jun-08	30-Jun-08
	Freehold	Leasehold	Total
	£	£	£
Market value as at 31 December 2007	142,650,000	35,550,000	178,200,000
Capital expenditure	7,703,492	-	7,703,492
Carrying value of disposed investment property	-	(18,000,000)	(18,000,000)
Unrealised loss arising on adjustment to fair value of
investment properties	(10,369,122)	(1,850,000)	(12,219,122)
Movement in lease incentive debtor	1,030,630	_________-	1,030,630
Market value at 30 June 2008	141,015,000	15,700,000	156,715,000
Adjustment for lease incentives	(1,593,069)	-	(1,593,069)
	-	7,562	7,562
Discounted present value of minimum lease payments Fair value at 30 June 2008	139,421,931	15,707,562	155,129,493
	31-Dec-07	31-Dec-07	31-Dec-07
	Freehold	Leasehold	Total
	£	£	£
Market value as at 31 December 2006	196,165,000	43,190,000	239,355,000
Capital expenditure	176,339	3,650	179,989
Carrying value of disposed investment properties	(38,755,000)	(3,710,000)	(42,465,000)
Unrealised loss arising on adjustment to fair value of
investment properties	(15,185,665)	(3,964,097)	(19,149,762)
Movement in lease incentive debtor	249,326	30,447	279,773
Market value at 31 December 2007	142,650,000	35,550,000	178,200,000
Adjustment for lease incentives	(498,462)	(63,977)	(562,439)
Discounted present value of minimum lease payments Fair value at 31 December 2007	_________-	4,314,581	4,314,581
	142,151,538	39,800,604	181,952,142

Investment properties were revalued at the period end by Jones Lang LaSalle, Chartered Surveyors on the basis of the market value for existing use. 

The market values of leasehold investment properties have been adjusted to reflect the discounted present value of minimum lease payments to reflect their fair value in accordance with IFRS. The market value for existing use provided by Jones Lang LaSalle at the period end was £156,715,000 (31 December 2007: £178,200,000), however an adjustment has been made for lease incentives of £1,593,069 (31 December 2007: £562,439) that are already accounted for.

  

6. RETAINED EARNINGS	30-Jun-08	31-Dec-07
	£	£
Opening balance as at 1 January	2,576,775	2,748,875
Loss for the period/year	(9,890,182)	(14,132,897)
Transfer from other distributable reserves	227,732	429,682
Unrealised loss arising on adjustment to fair value of
investment properties transferred to capital reserve	12,219,122	19,149,762
Realised loss on disposal of investment properties transferred to capital reserve	533,888	1,411,753
Dividends paid	(3,515,200)	(7,030,400)
Closing balance	2,152,135	2,576,775

This is a distributable reserve.

7. DIVIDENDS

The interim dividends paid to date in 2008 are as follows (2007: £3,515,200) :

£1,757,600 (1.69p per ordinary share) paid in February relating to the quarter ending 31 December 2007

£1,757,600 (1.69p per ordinary share) paid in May relating to the quarter ending 31 March 2008

£3,515,200

A further dividend of £1,757,600 (2007: £1,757,600) in respect of the quarter to 30 June 2008 was approved in August 2008. 

These Unaudited Consolidated Financial Statements do not reflect this dividend, however, the published net asset value as at 30

June 2008 does.

8. CASH GENERATED FROM OPERATIONS	01 Jan 08 to	01 Jan 07 to
	30-Jun-08	30-Jun-07
	£	£
(Loss) / profit for the period	(9,890,182)	4,935,660
Movement in trade and other receivables	(95,252)	799,476
Movement in trade and other payables	(611,360)	(623,517)
Interest payable	2,696,994	2,964,522
Interest receivable	(1,219,280)	(80,932)
Unrealised loss / (gain) arising on adjustment to fair value of investment properties	12,219,122	(1,772,856)
Realised loss on disposal of investment properties Cash generated from operations	533,888	_______
	3,633,930	6,222,353

In the Unaudited Consolidated Cash Flow Statement, proceeds from sale of investment property:

Carrying value of disposed investment property (note 5)	18,000,000	-
Realised loss on disposal of investment property	(533,888)	__________-
Proceeds from disposal of investment property	17,466,112	__________-

  

9 SEGMENTAL REPORTING

The Group is organised into four main business segments determined in accordance with the type of investment property:

Retail - mainly shops and retail warehouse parks

Office - mainly in large cities

Industrial - distribution warehouses and industrial units

Other - leisure centres and cinema complexes

Segmental analysis by business segment

01 Jan 08 to 30 Jun 08	Retail	Office	Industrial	Other	Total
	£	£	£	£	£
Rental income	1,269,477	1,900,429	1,988,506	697,580	5,855,992
Unrealised loss arising on adjustment
to fair value of investment properties	(3,522,451)	(3,483,713)	(4,190,645)	(1,022,313)	(12,219,122)
Realised loss on disposal of investment properties	-	(533,888)	-	-	(533,888)
Property related expenditure	3,795	(48,025)	(250,771)	(101,655)	(396,656)
Segment result	(2,249,179)	(2,165,197)	(2,452,910)	(426,388)	(7,293,674)
Non-property related expenditure					(1,118,794)
Operating loss					(8,412,468)
Finance costs - net					(1,477,714)
Loss for the period					(9,890,182)

There were no transactions between the business segments.

Property related expenditure relates to head lease payments, valuation fees and other direct property costs.

01 Jan 07 to 30 Jun 07	Retail	Office	Industrial	Other	Total
	£	£	£	£	£
Rental income	1,190,855	3,796,710	1,956,511	691,824	7,635,900
Unrealised loss arising on adjustment
to fair value of investment properties	1,050,000	1,186,080	(483,224)	20,000	1,772,856
Property related expenditure	(53,906)	(283,330)	(34,137)	(2,500)	(373,873)
Segment result	2,186,949	4,699,460	1,439,150	709,324	9,034,883
Non-property related expenditure					(1,215,634)
Operating profit					7,819,249
Finance costs - net					(2,883,589)
Profit for the period					4,935,660

There were no transactions between the business segments.

Property related expenditure relates to head lease payments, valuation fees and other direct property costs.

ENDIR QFLFLVVBEBBD

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