The Local Authorities Property Fund

Transcription

1 The Local Authorities Property Fund Fund Fact Sheet 31 December 214 Overview High quality, well-diversified commercial and industrial property portfolio Focus on delivering attractive income Actively managed to add value Fund objective The objective for this Fund is to generate long term growth in capital and a high and rising income over time. Suitable for The Fund is suitable for any Local Authority seeking the benefits of exposure to property. Governance The trustee is the Local Authorities' Mutual Investment Trust (LAMIT) a body controlled by representatives of the Local Government Association, the Convention of Scottish Local Authorities, the Northern Ireland Local Government Officers' Superannuation Committee and investors in the Fund. Who can invest? Any local authority in England, Wales, Scotland and Northern Ireland. Income Gross dividend yield 4.72%* IPD Other Balanced PUTs 4.% Base Rate.% * Based upon the net asset value and historic gross annual dividend of 12.74p. Unique accounting advantages Unlike other property fund investments or even direct property purchases, investment in the Fund does not count as capital expenditure for English or Scottish local authorities. Dividends are treated as revenue but the General Fund is protected from fluctuations in the unit price. The investment is treated as an available for sale financial asset. Fund update Investment conditions have remained buoyant with investor demand broadening away from London towards good quality assets in regional centres. Top quality assets have remained popular but the strongest momentum is now with offices in the south east and in the industrial sector. Occupier markets are improving, but only slowly. Void rates remain high but rent incentives are starting to fall and there is increased evidence of rental growth in most areas - although issues remain in parts of retail. The difficulties in the supermarket sector are likely to result in a reevaluation of values in this currently high valued subsector. We expect the downward pressure on yields to continue to support valuations in the months ahead, with the strongest returns coming from office and industrial sector assets located away from the capital. We expect the revival in occupier markets to strengthen so that rising rents will increasingly influence valuations. Income on the portfolio is increasing and this should result in higher payments to investors. Asset allocation Past distributions 2 Pence per Unit Shops.3% 33.3% Industrial & W'houses 28.1% Retail Warehouses 2.% Indirect 1.6% Cash 6.7% The Fund has a credit facilty which currently has a balance of - m

2 Discrete year total return performance (net) 12 months to 31 December The Local Authorities Property Fund +19.4% +9.2% +3.9% +6.3% +17.2% Annualised total return performance (net) Performance to 31 December year 3 years years The Local Authorities Property Fund +19.4% +.6% +11.% Gross performance shown before management fees and expenses with gross income reinvested: net returns will differ after the deduction of fees and charges. Past performance is no guarantee of future returns. Source: CCLA Top ten property holdings total 6.% London, Beckton Retail Park Coventry, Torrington Avenue Cambridge, Science Park London, Stockley Park London, Fenchurch Street Bracknell, The Arena Lutterworth, Magna Park Wakefield, Albion Mills Retail Park Nottingham, Castle Boulevard Chichester, East Street Key facts Total fund size 292 m Borrowing facility m Number of holdings 31 Income units Offer (buying) price 28.6p (xd) Net asset value 27.3p (xd) Bid (selling) price 26.84p (xd) Bid/offer spread 7.3% Launch date 18 April 1972 Unit types Income Minimum initial investment 2, Minimum subsequent investment, Dealing day Month end valuation day* Sedol & ISIN numbers 21664, GB Dividend payment dates End January, April, July & October Annual management charge (taken % from income).6% * Instructions for the issue or redemption of units must be received by CCLA no later than pm on the business day prior to the Valuation Date. If the valuation day is a bank holiday, the dealing day will be the previous working day. Units are only realisable on each monthly dealing date and redemptions may not be readily realisable; a period of notice not exceeding six months may be imposed for the redemption of units. Income payments are now made gross of tax. Any outstanding historic tax reclaims should be addressed to: Glynis Free Specialist Repayment Team 7 South Ty - Glas Cardiff CF14 8HR Telephone am - 1pm Senator House 8 Queen Victoria Street London EC4V 4ET Client Service Freephone: clientservices@ccla.co.uk D/JAN Important Information Investors are not certain to make profits; losses may be made. Any forward looking statements are based upon our current opinions, expectations and projections. We undertake no obligations to update or revise these. Actual results could differ materially from those anticipated. The Fund is an Alternative Investment Fund and an unregulated collective investment scheme established under a Scheme approved by H M Treasury under Section 11 of the Trustee Investments Act 1961 and is subject to provisions of a Trust Deed dated 6 April 1972 and a supplemental Trust Deed dated 13 September The Fund operates as an open-ended Fund under Part IV of the schedule to the Financial Services and Markets Act 2 (Exemption) Order 21. CCLA Fund Managers Limited (registered in England no at the office above) is authorised and regulated by the Financial Conduct Authority (FCA) and is the manager of the Local Authorities Property Fund.

3 The Local Authorities' Property Fund Fund Profile 31 December 214 A unique, specialist Property Fund available only to Local Authority Investors Price at Net asset value Income units 27.3p (xd) Gross dividend yield 4.72%* * Based upon the net asset value and gross historic annual dividend of 12.74p. Strong governance The trustee is the Local Authorities' Mutual Investment Trust (LAMIT). LAMIT is controlled by representatives of the Local Government Association, the Convention of Scottish Local Authorities, the Northern Ireland Local Government Officers' Superannuation Committee and investors in the Fund. As trustee, LAMIT approves the investment strategy and the risk profile of the portfolio and reviews performance. Unique accounting advantages Unlike other property funds or direct property purchases, the Fund does not count as capital expenditure for English and Scottish Local Authorities. Dividends are treated as revenue income, but the General Fund is protected from fluctuations in the unit price. The investment is treated as an available for sale financial asset. Meeting your needs Suitable for Local Authorities with long term funds to invest to achieve an attractive income and capital growth over time. The Property Fund is designed to achieve long term capital growth and a rising income from investments in the commercial property sector. The portfolio is actively managed with a focus on asset selection. The intention is to boost returns by lease and tenant management and property improvement. The Fund has a broad sector spread, with prudent diversification to keep risks under control. Asset allocation by investment category 31 December 214 Shops.3% 33.3% Industrial & W'houses 28.1% Retail Warehouses 2.% Indirect 1.6% Cash 6.7% The Fund has a credit facilty which currently has a balance of - m. Property portfolio details Top properties = 38.4% of the portfolio Top tenants = 33.8% of rental income Weighted unexpired lease term.9 years Vacancy rate.4% Total fund size 292 million Borrowing facility million

4 Asset allocation by region and category 31 December Fund IPD 2 2 Shops Shops rest Shopping South East of UK Centres Retail Whse City West End rest of South East Fund Data and IPD Other Balanced Property Funds Index data as at 31 December 214 rest of UK South Industrial East rest Industrial of UK Other Cash Top ten property holdings total 6.% London, Beckton Retail Park Coventry, Torrington Avenue Cambridge, Science Park London, Stockley Park London, Fenchurch Street Bracknell, The Arena Lutterworth, Magna Park Wakefield, Albion Mills Retail Park Nottingham, Castle Boulevard Chichester, East Street Market update Investment conditions have remained buoyant with investor demand broadening away from London towards good quality assets in regional centres. Top quality assets have remained popular but the strongest momentum is now with offices in the south east and in the industrial sector. Occupier markets are improving, but only slowly. Void rates remain high but rent incentives are starting to fall and there is increased evidence of rental growth in most areas - although issues remain in parts of retail. The difficulties in the supermarket sector are likely to result in a re-evaluation of values in this currently high valued sub-sector. Fund activity Cash flows into the Fund have remained strongly positive. We have continued to add to the portfolio attractive assets which we believe have the potential to contribute significantly to return. There were three principal purchases; the first is a large distribution facility in Coventry on an attractive immediate yield and with a guaranteed rising income. The second is a shopping centre in East London where there is substantial scope for management action to boost values. The third acquisition was a high quality office in Bracknell, bought at a price of 16.3m and on a yield of 7%. Cash holdings rose a little by the end of the period but we have a number of potential purchases under review which will reduce cash again to low target levels.

5 Outlook We expect the downward pressure on yields to continue to support valuations in the months ahead, with the strongest returns coming from office and industrial sector assets located away from the capital. We expect the revival in occupier markets to strengthen so that rising rents will increasingly influence valuations. Income on the portfolio is increasing and this should result in higher payments to investors. Dividend history of The Local Authorities' Property Fund Years to 31 March 2 Pence per Share Calendar performance versus the benchmark * The benchmark is the IPD Other Balanced Property Funds Index. Source: CCLA Please note that past performance is no guarantee of future returns. Fund Benchmark*

6 Long term performance Total return performance (net) 12 months to end of December The Local Authorities' Property Fund +19.4% +9.2% +3.9% +6.3% +17.2% Benchmark* +17.3% +9.2% +.3% +6.7% +12.2% * The benchmark is the IPD Other Balanced Property Funds Index. Source: CCLA Please note that past performance is no guarantee of future returns. Costs and charges Our policy is always to keep costs and charges low - we believe that high costs and charges have a very damaging cumulative effect on investor returns. We negotiate to keep expenses low and monitor dealing costs closely. We have no entry or exit fees, the only income taken by the investment manager is the annual charge of.6%. Key facts Bid/offer spread 7.3% Dealing day Month end valuation day* Minimum initial investment 2, Minimum subsequent investment, Dividend payment dates End January, April, July & October Annual management charge.6% (deducted from income) Unit types available Income Sedol number ISIN number GB Income payments are now made gross of tax. Any outstanding historic tax reclaims should be addressed to: Glynis Free Specialist Repayment Team 7 South Ty - Glas Cardiff CF14 8HR Telephone am - 1pm * Instructions for the issue or redemption of units must be received by CCLA no later than pm on the business day prior to the Valuation Date. If the valuation day is a Bank Holiday the dealing day will be the previous working day. Units are only realisable on each monthly dealing date and redemptions may not be readily realisable; a period of notice not exceeding six months may be imposed for the redemption of units. Senator House 8 Queen Victoria Street London EC4V 4ET Client Service Freephone: Fax: clientservices@ccla.co.uk D/JAN Important Information Investors are not certain to make profits; losses may be made. Any forward looking statements are based upon our current opinions, expectations and projections. We undertake no obligations to update or revise these. Actual results could differ materially from those anticipated. The Fund is an Alternative Investment Fund and an unregulated collective investment scheme established under a Scheme approved by H M Treasury under Section 11 of the Trustee Investments Act 1961 and is subject to provisions of a Trust Deed dated 6 April 1972 and a supplemental Trust Deed dated 13 September The Fund operates as an open-ended Fund under Part IV of the schedule to the Financial Services and Markets Act 2 (Exemption) Order 21. CCLA Fund Managers Limited (registered in England No at the office below) is authorised and regulated by the Financial Conduct Authority and is the manager of the Local Authorities Property Fund.