F&C Property Growth & Income Fund Limited

Transcription

1 F&C Property Growth & Income Fund Limited Condensed Interim Report and Unaudited Financial Statements 30 September 2017

2 Condensed Interim Report and Unaudited Financial Statements F&C ProPerty Growth & InCome Fund LImIted For the six months ended 30 September 2017

3 F&C ProPerty Growth & InCome Fund LImIted table of Contents Management and Administration 2 Investment Manager s Report 3 Investment Portfolio 5 Comparative Investment Portfolio 6 Statement of Financial Position 7 Statement of Comprehensive Income 8 Statement of Changes in Net Assets Attributable to Holders of Redeemable Participating Preference Shares 9 Statement of Cash Flows 10 Notes to the Condensed Financial Statements 11 Significant Portfolio Movements 25 Appendix 1 Condensed Interim Report and Unaudited Financial Statements of the Master Fund 26 General Information and Enquiries Page 1

4 F&C ProPerty Growth & InCome Fund LImIted management and administration registered office Dorey Court Admiral Park St Peter Port Guernsey GY1 6HJ Channel Islands directors Robert Paul King* (Chairman) Hugh Cameron Moir (resigned 20 April 2017) Victor Holmes* Tina Watts (appointed 20 April 2017) Investment manager Thames River Capital LLP Exchange House Primrose Street London EC2A 2NY United Kingdom manager and alternative Investment Fund manager F&C Fund Management Limited Exchange House Primrose Street London EC2A 2NY United Kingdom administrator, secretary and registrar State Street (Guernsey) Limited PO Box 543 First Floor Dorey Court Admiral Park St Peter Port Guernsey GY1 6HJ Channel Islands Independent auditor PricewaterhouseCoopers CI LLP Royal Bank Place 1 Glategny Esplanade St Peter Port Guernsey GY1 4ND Channel Islands Legal advisers As to English, European & U.S. Law Eversheds Sutherland (International) LLP One Wood Street London EC2V 7WS United Kingdom As to Guernsey Law Mourant Ozannes PO Box Le Marchant Street St Peter Port Guernsey GY1 4HP Channel Islands the International stock exchange authority Limited (Formerly named Channel Islands Securities Exchange Authority) Sanne Fiduciary Services Limited 13 Castle Street St Helier Jersey JE4 5UT Channel Islands depositary State Street Custody Services (Guernsey) Limited PO Box 238 First Floor Dorey Court Admiral Park St Peter Port Guernsey GY1 3PF Channel Islands * Independent of the Investment Manager 2

5 F&C ProPerty Growth & InCome Fund LImIted InVestment manager s report For the six months ended 30 September 2017 Introduction The performance set out below is that of the Company s individual share classes. The commentary which follows from the Investment Manager covers the portfolio activity and performance of the underlying Master Fund, which forms this company s sole investment. Performance summary of the Company Share Class Published NAV per share as at Dividend per share in period** Performance in period Company Index* Class A (Income) % 6.95% Class A (Accum) % 6.95% Class B (Income) % 6.50% Class B (Accum) % 6.50% Class C NOK (Income) NOK % 7.26% Class D AUD (Accum) % 7.96% Class E (Income) % 6.95% Class E (Accum) % 6.95% Class F (Income) % 6.50% * Reference Index: 50% Investment Property Databank (IPD) Balanced Monthly Funds Index/50% EPRA Europe ex UK Net Index (Total Return hedged). The different benchmark figures reflect currency re-basing. ** These were the dividends paid as opposed to those declared in the period. master Fund market review Over the 6 months there has been a performance differential between the UK and Continental European property companies which reflects not only the ongoing improvement in the economies of Europe but also the concerns around the UK economy. Given the slow pace of the Brexit negotiations and the political instability within the Conservative Party driven by the loss of majority after the snap general election, it is not a surprise that investors are reluctant to buy companies with almost 100% domestic UK earnings. That said, we have been surprised and encouraged by the performance of underlying UK commercial property values. Whilst the differential between the UK and Continental Europe is the headline message from the period, there were also some notable trends at the sub-regional and sector levels. For example, listed German residential property businesses performed strongly. There have been periods when the share prices of these companies have seen a high correlation with long-dated German government bonds. The dovish tone from the European Central Bank (ECB) has helped to maintain low volatility in bond markets and aided German residential property businesses that continue to demonstrate very secure income streams and earnings growing above the rate of inflation. Both Spanish and Italian property companies enjoyed strong growth in the period with rental growth returning to the office markets in Madrid, Barcelona and Milan. In addition the hotel, industrial/logistics and student accommodation sectors continued to be top performers. Our positions in Hispania (Spanish tourist hotels), Segro, London Metric, Hansteen and Tritax Bigbox (UK Industrials) all performed well. Within our UK physical portfolio we saw rental growth across all our industrial assets, typically the key driver of the property valuation increase. Investment markets across Continental Europe also remained buoyant with both domestic and international capital attracted to all submarkets experiencing rental growth. Even shopping centres, with the most muted growth rates, continue to attract investment. Top of investors shopping lists is prime offices in capital / dominant cities, industrial and logistics in both Western and Southern Europe as well as the Nordics. However, it is important to emphasise that investors are all too aware of the risks to ongoing economic recovery and we see the focus on primary assets reflecting these concerns. 3

6 F&C ProPerty Growth & InCome Fund LImIted InVestment manager s report (continued) For the six months ended 30 September 2017 During the period, the Master Fund purchased two properties in Milton Keynes and Coventry for a combined value of 15.5m and net initial yields of 5.4% and 6.1% respectively. Both purchases are located in the core midlands distribution market where we have seen strong rental growth over the past 12 months a trend we expect to continue. The intensive asset management continued across the Master Fund and we completed one new lease, three lease renewals and three rent reviews in the period. One of the lease renewals in Chichester was at a record rent for the estate of 8 per square foot. This was a 23% increase on the previous passing rent and a 14% increase on the estimated rental value from purchase in July The rent reviews were at an average increase in rent of 10.5% and it is important to highlight that rent review is a much more difficult process from which to secure an uplift than lease renewal. In the Annual Report, we concluded with the expectation that the high income return from property would continue to attract investors, and particularly towards those sub-markets across Europe which were experiencing rental growth. Whilst those expectations have broadly been the case, the relative performance between the most and least preferred sectors has been more dramatic than envisaged. The result has been a polarisation with stock prices of those companies carrying expectations of low or negative growth standing at significant discounts to their assets values and in some cases, decade price lows, whilst almost all stocks with a whiff of growth are at premiums and in many cases all time high prices. outlook Concerns around the political environment across Continental Europe have moved on from the national elections in the Netherlands, France and Germany and are now focused on Spain and to a lesser extent the right wing success in Austria. We have limited see through exposure to commercial property in Barcelona and the greater Catalonian region but the real risk is much broader than that and our experience is that such macro concerns can weigh heavily on market sentiment. Looking forward, the brightest outcome for property is the successful absorption of a steepening and normalising yield curve. If economies are growing then rates must reflect that inflationary movement. The key is to ensure we are exposed at the right price to real estate which is enjoying rising rents and development gains alongside the inevitable rise in the cost of funding. Share prices have responded both positively and negatively, and will continue to do so, and we will need to be vigilant on adjusting exposures to both the over-sold as well as the over-bought. thames river Capital LLP november

7 F&C ProPerty Growth & InCome Fund LImIted InVestment PortFoLIo 30 September 2017 Financial assets at fair value through profit or loss nominal Fair Value Investment in master Fund holding % of nav F&C Property Growth & Income Fund ICVC (the Master Fund ) Class J Income Shares 5,010,768 51,884, Class J Accumulation Shares 1,730,904 20,112, open Forward Foreign Currency transactions 71,997, Currency Currency Currency maturity unrealised sold bought rate date Gain % of nav Class b Income GBP 5,305,195 EUR /10/17 23, Class b accumulation GBP 1,536,413 EUR /10/17 6, Class C Income NOK 8,935 GBP /10/17 2 Class d accumulation AUD 1,237 GBP /10/17 3 Class F Income GBP 13,171,234 EUR /10/17 58, , total financial assets at fair value through profit or loss 72,086, Financial liabilities at fair value through profit or loss Open Forward Foreign Currency Transactions Currency Currency Currency maturity unrealised % of nav sold bought rate date Loss Investment Level GBP 23,189 NOK /10/17 (333) Class b Income EUR 42,860 GBP /10/17 (200) Class b accumulation EUR 12,410 GBP /10/17 (58) Class C Income GBP 156,805 NOK /10/17 (562) Class d accumulation GBP 238,780 AUD /10/17 (806) Class F Income EUR 106,367 GBP /10/17 (496) (2,455) total financial liabilities at fair value through profit or loss (2,455) total net Investments at Fair Value 72,084, Cash and cash equivalents 424, other net Liabilities (377,016) (0.52) total net assets 72,131,

8 F&C ProPerty Growth & InCome Fund LImIted ComParatIVe InVestment PortFoLIo 31 March 2017 Financial assets at fair value through profit or loss nominal Fair Value Investment in master Fund holding % of nav F&C Property Growth & Income Fund ICVC (the Master Fund ) Class J Income Shares 4,682,135 46,445, Class J Accumulation Shares 2,263,141 24,550, open Forward Foreign Currency transactions 70,996, Currency Currency Currency maturity unrealised sold bought rate date Gain % of nav Class b Income EUR 8,477 GBP /04/ Class b accumulation EUR 2,419 GBP /04/ Class C Income NOK 49,875 GBP /04/ Class F Income EUR 21,512 GBP /04/ total financial assets at fair value through profit or loss 70,996, Financial liabilities at fair value through profit or loss open Forward Foreign Currency transactions Currency Currency Currency maturity unrealised sold bought rate date Loss % of nav Class b Income GBP 4,970,209 EUR /04/2017 (64,895) (0.09) Class b accumulation GBP 1,418,049 EUR /04/2017 (18,515) (0.03) Class C Income GBP 309,549 NOK /04/2017 (4,480) (0.01) Class d accumulation GBP 262,171 AUD /04/2017 (2,983) GBP 716 AUD /04/2017 (8) Class F Income GBP 12,375,156 EUR /04/2017 (161,581) (0.23) (252,462) (0.36) Total financial liabilities at fair value through profit or loss (252,462) (0.36) total net Investments at Fair Value 70,743, Cash and cash equivalents 560, other net Liabilities (463,240) (0.65) total net assets 70,841, The accompanying notes form an integral part of these financial statements. 6

9 F&C ProPerty Growth & InCome Fund LImIted statement of FInanCIaL PosItIon As at 30 September 2017 unaudited audited 30 september 31 march note Current assets Cash and cash equivalents , ,926 Debtors 5 2,737,817 13,989 Financial assets at fair value through profit or loss 9 72,086,887 70,996,438 total assets 75,249,245 71,571,353 Current liabilities Creditors amounts falling due within one year 6 (3,114,833) (477,229) Financial liabilities at fair value through profit or loss 9 (2,455) (252,462) total liabilities (excluding net assets attributable to holders of redeemable participating preference shares) (3,117,288) (729,691) net assets attributable to holders of redeemable participating preference shares 72,131,957 70,841,662 shares in Issue Class a (Income) 630, ,888 Class a (accumulation) 178, ,803 Class b (Income) 471, ,651 Class b (accumulation) 80,295 80,810 Class C (Income) 16,993 34,701 Class d (accumulation) 10,373 11,824 Class e (Income) 1,904,501 1,512,919 Class e (accumulation) 781, ,449 Class F (Income) 1,130,738 1,131,824 net asset Value per Participating share based on last traded market prices Class a (Income) Class a (accumulation) Class b (Income) Class b (accumulation) Class C (Income) nok nok Class d (accumulation) aud aud Class e (Income) Class e (accumulation) Class F (Income) The financial statements on pages 7 to 24 were approved by the Board of Directors of F&C Property Growth and Income Fund Limited. The accompanying notes form an integral part of these financial statements. 7

10 F&C ProPerty Growth & InCome Fund LImIted statement of ComPrehensIVe InCome For the six months ended 30 September 2017 unaudited unaudited 30 september 30 september note Income Investment income received from Master Fund* 1,837,852 2,338,234 Deposit interest 222 Net gain on financial assets at fair value through profit or loss 4 3,598,652 1,090,174 5,436,504 3,428,630 expenses Investment management fee 70,635 88,531 General expenses 43,911 29,393 Administration fee 30,018 36,182 Depositary fee 13,063 12,304 Audit fee 10,571 17,046 Directors fees and expenses 20,265 12, , ,124 operating profit 5,248,041 3,232,506 Finance costs Interest expense Income equalisation 231, ,052 Distributions 13 1,156, ,011 1,387,577 1,095,452 Profit after distributions 3,860,464 2,137,054 Increase in net assets attributable to holders of redeemable participating preference shares from operations 3,860,464 2,137,054 * Income from the Master Fund includes a notional income amount of GBP 562,527 (period ended 30 September 2016: GBP 1,480,865) in relation to income from accumulating shares. The accompanying notes form an integral part of these financial statements. 8

11 F&C ProPerty Growth & InCome Fund LImIted statement of ChanGes In net assets attributable to holders of redeemable PartICIPatInG PreFerenCe shares For the six months ended 30 September 2017 unaudited unaudited 30 september 30 september net assets attributable to holders of redeemable participating preference shares at beginning of period 70,841,662 78,479,622 Proceeds from redeemable participating preference shares issued 7,527,210 7,687,063 Redemption of redeemable participating preference shares (10,097,379) (12,508,447) net decrease from share transactions (2,570,169) (4,821,384) Increase in net assets attributable to holders of redeemable participating preference shares from operations 3,860,464 2,137,054 net assets attributable to holders of redeemable participating preference shares at end of period 72,131,957 75,795,292 The accompanying notes form an integral part of these financial statements. 9

12 F&C ProPerty Growth & InCome Fund LImIted statement of Cash FLows For the six months ended 30 September 2017 unaudited unaudited 30 september 30 september Cash flows from operating activities Purchase of financial assets and settlement of financial liabilities (5,798,601) (11,825,075) Proceeds from sales of investments (including realised gains) 9,219,441 15,175,642 Dividends received 1,929 Interest received 222 Income received from Master Fund 1,219,028 2,048,467 Operating expenses paid (222,276) (183,737) net cash inflow from operating activities 4,417,592 5,217,448 Cash flows from financing activities Interest paid (251) (389) Distributions paid to holders of redeemable participating preference shares (1,156,243) (490,614) Proceeds from redeemable participating preference shares issued 4,945,943 7,848,364 Redemption of redeemable participating preference shares (8,343,426) (11,718,927) net cash outflow from financing activities (4,553,977) (4,361,566) net decrease in cash and cash equivalents (136,385) 855,882 Cash and cash equivalents at the beginning of the period 560,926 (123,319) Cash and cash equivalents at the end of the period 424, ,563 Cash and cash equivalents at the end of the period is comprised of: Cash at bank 424, , , ,563 The accompanying notes form an integral part of these financial statements. 10

13 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements 30 September Incorporation and principal activity F&C Property Growth & Income Fund Limited (the Company or the Feeder Fund ) was incorporated on 10 March 2005 in Guernsey. The Company is an open-ended investment company governed by the provisions of The Companies (Guernsey) Law, 2008, as amended. The Company has been authorised by the Guernsey Financial Services Commission as a Class B Scheme under The Protection of Investors (Bailiwick of Guernsey) Law, With effect from 22 July 2014 the Company is registered as an Alternative Investment Fund ( AIF ) pursuant to the Alternative Investment Fund Managers Directive ( AIFMD ) Regulations. The Company is structured as a Feeder Fund. All of the Company s assets (to the extent not retained in cash) are invested in the ordinary shares of the F&C Property Growth & Income Fund ICVC (the Master Fund ). The Master Fund is authorised by the Financial Conduct Authority ( FCA ) with effect from 26 September The Master Fund is a UK domiciled Non-UCITS Regulated Fund. The investment objective of the Master Fund is to deliver capital and income appreciation primarily through investment in and/or exposure to a combination of investments in UK commercial property and securities of property and property related issuers listed or operating in the countries of the EU and/or the EEA. While the securities in which the Master Fund invests are mainly equity securities, investment may also be made in fixed interest securities, securities convertible into equities and derivatives. As at 30 September 2017, the Company had nine classes of shares Class A (Income) Shares and Class A (Accumulation) Shares denominated in Sterling, Class B (Income) Shares and Class B (Accumulation) Shares denominated in Euro, Class C (Income) Shares denominated in Norwegian Krone, Class D (Accumulation) Shares denominated in Australian Dollars, Class E (Income) and Class E (Accumulation) Shares denominated in Sterling and Class F (Income) Shares denominated in Euro. Class F (Accumulation) Shares denominated in Euro and Class G (Income) Shares denominated in Norwegian Krone had not launched as at 30 September At the date the financial statements were issued, all active share classes were listed on the The International Stock Exchange ( TISE ) (formally the Channel Islands Securities Exchange ( CISE )). The Company s financial statements were authorised for issue on 14 December 2017 by the Directors. 11

14 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September basis of Preparation These condensed unaudited financial statements are prepared on a going concern basis in accordance with International Financial Reporting Standards ( IFRS ) and applicable legal and regulatory requirements of the Companies (Guernsey) Law, The financial statements are prepared under the historical cost convention as modified by the valuation of financial assets and financial liabilities held at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of accounting estimates. It also requires the Board of Directors to exercise its judgment in the process of applying the Company s accounting policies. The Company prepares its accounts in conformity with IFRS and has opted to prepare condensed interim financial statements as set out in IAS 34: Interim Financial Reporting. As a result, these financial statements are prepared on the basis of accounting policies set out in 31 March 2017 annual financial statements. These financial statements should therefore be read in conjunction with the 31 March 2017 annual audited financial statements. 3. accounting Policies (a) Standards and amendments to existing standards effective 1 April 2017: The amendments to IAS7 Statement of Cash Flows are effective for annual periods beginning on 1 January The amendments are intended to clarify IAS7 to improve information provided to users of financial statements about an entity s financial activities. There are no other standards, interpretations or amendments to existing standards that were effective for the first time for the financial year beginning 1 April 2017 that would have been expected to have had a material impact on the Company. (b) New standards, amendments and interpretations effective after 1 April 2017 and have not been early adopted A number of new standards, amendments to standards and interpretations (IFRS 9, IFRS 15 and IFRS 16) are effective for annual periods beginning after 1 April 2017, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Company. IFRS 9 Financial Instruments will become effective for the periods beginning on or after 1 January IFRS 9 addresses the clarification, measurement and recognition of financial assets and financial liabilities. The new standard is not expected to have a significant impact on the Company s financial position, performance or disclosures in its financial statements. IFRS 15 Revenue from Contracts with Customers will become effective for periods beginning on or after 1 January The Revenue Standard provides principles that an entity applies to report useful information about the amount, timing and uncertainty of revenue and cash flows arising from its contacts to provide goods and services to its customers. The new standard is not expected to have a significant impact on the Company s financial position, performance or disclosures in its financial statements. IFRS 16 Leases was issued in January 2016 and will become effective for period beginning on or after 1 January The new standard is not expected to have a significant impact on the Company s financial position, performance or disclosures in its financial statements. 12

15 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September net gain on financial assets & liabilities at fair value through profit or loss 30 september 30 september Net realised gain/(loss) on financial assets at fair value through profit or loss 179,305 (950,637) Net unrealised movement on financial assets at fair value through profit or loss 2,910, ,988 Net realised gain on currencies and forward foreign currency transactions 169,016 2,071,360 Net unrealised movement on currencies and forward foreign currency transactions 339,556 (167,537) 3,598,652 1,090, debtors 30 september 31 march Amounts falling due within one year: Subscriptions receivable 2,708,660 13,989 Amounts receivable on unsettled trades 28,262 Sundry debtors 895 2,737,817 13, Creditors 30 september 31 march Amounts falling due within one year: Amounts due on unsettled trades 763, ,104 Sundry creditors 65,585 91,825 Redemptions payable 2,254, ,289 Management fee payable 13,208 14,168 Bank interest payable 3,385 3,385 Administration fee payable 8,874 17,252 Withholding tax payable 520 Depositary fee payable 5,866 2,686 3,114, ,229 13

16 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September related party disclosures By an agreement (the Management Agreement ) between the Manager and the Company, the Manager has agreed to perform portfolio management, risk management and certain other functions and services in respect of the Company and the Company s Portfolio and, in connection therewith, to act as the sole Alternative Investment Fund Manager ( AIFM ) of the Company for the purposes of the Alternative Investment Fund Managers Directive ( AIFMD ) Rules. By an agreement (the Investment Management Agreement ) between the Manager and the Investment Manager, the Investment Manager has agreed to provide certain portfolio management services to the Manager in respect of the Company. The Investment Manager has also agreed to provide marketing services in respect of the Company. The Company invests in the Master Fund, and held Class J Income and Accumulation Shares of the Master Fund at 30 September These holdings amounted to 22.37% (31 March 2017: 31.29%) of the Master Fund at this date. There are a receivable for Master Fund shares sold as at 30 September 2017 of 28,262 (31 March 2017: Nil) and a payable for Master Fund shares purchased as at 30 September 2017 of 763,188 (31 March 2017: 191,104). Victor Holmes is a Director and shareholder of Picton Property Income Limited, one of the investments held by the Master Fund at 30 September All related party transactions were made at arm s length on normal commercial terms and conditions. There have been no other transactions between the Company and its related parties during the reporting peroid. 8. shareholders funds The authorised share capital of the Company is 100 divided into 100 Management Shares of 1.00 each and an unlimited number of redeemable preference shares Shares of no par value each. The Management Shares were taken up by the subscribers to the Memorandum of Association. They are held by the Investment Manager and represent equity of the Company. They carry no rights to participate in the profits or assets of the Company, other than a return of their nominal value on a winding up, and no voting rights whilst any Shares are in issue. The voting redeemable preference shares may be issued in one or more Classes or series as designated by the Directors from time to time. To qualify as redeemable preference shares, the Shares are required under Guernsey law to be repayable in preference to any other class of share capital. 30 september 31 march share Capital number number authorised share Capital 100 Management Shares of 1 each Issued and fully paid Management Shares: Nominal ( ) Value ( )

17 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September shareholders funds (continued) 30 september 31 march Class a (Income) number number Opening balance 752, ,894 Issued during the period/year 33, ,756 Redeemed during the period/year (156,285) (104,762) Closing balance 630, ,888 Class a (accumulation) Opening balance 442, ,445 Issued during the period/year ,171 Redeemed during the period/year (264,595) (148,813) Closing balance 178, ,803 Class b (Income) Opening balance 469, ,985 Issued during the period/year 1,756 2,506 Redeemed during the period/year (12,840) Closing balance 471, ,651 Class b (accumulation) Opening balance 80, ,787 Issued during the period/year Redeemed during the period/year (515) (60,977) Closing balance 80,295 80,810 Class C (Income) Opening balance 34, ,647 Issued during the period/year 93 2,755 Redeemed during the period/year (17,801) (131,701) Closing balance 16,993 34,701 Class d (accumulation) Opening balance 11,824 12,797 Issued during the period/year Redeemed during the period/year (1,451) (973) Closing balance 10,373 11,824 Class e (Income) Opening balance 1,512,919 1,744,955 Issued during the period/year 531, ,321 Redeemed during the period/year (140,354) (797,357) Closing balance 1,904,501 1,512,919 15

18 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September shareholders funds (continued) 30 september 31 march Class e (accumulation) number number Opening balance 780, ,621 Issued during the period/year 5, Redeemed during the period/year (4,652) (8,882) Closing balance 781, ,449 Class F (Income) Opening balance 1,131,824 1,184,397 Issued during the period/year 10, ,763 Redeemed during the period/year (11,906) (327,336) Closing balance 1,130,738 1,131, Fair value estimation IFRS 13 requires the Company to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2). Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. The determination of what constitutes observable requires significant judgement by the Company. The Company considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. Level 2 may contain securities where valuation techniques are used to price securities based on observable inputs. This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data. Valuation techniques are also used for non-standardised financial instruments such as over-the-counter derivatives, and include the use of comparable recent arm s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants making the maximum use of market inputs and relying as little as possible on entity-specific inputs. Assets and liabilities not carried at fair value are carried at amortised cost; their carrying values are a reasonable approximation of fair value. Cash and cash equivalents, include cash in hand, demand deposits and other short-term investments in an active market and they are categorised as Level 1. Debtors include the contractual amounts for settlement of trades and other obligations due to the Company. Creditors represent the contractual amounts and obligations due by the Company for settlement of trades and expenses. All Debtors and Creditors balances are categorised as Level 2. 16

19 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September Fair value estimation (continued) The puttable value of redeemable shares is calculated based on the net difference between total assets and all other liabilities of the Company in accordance with the Fund s Prospectus. A demand feature is attached to these shares, as they are redeemable at the holders option and can be put back to the Company at any dealing date for cash equal to a proportionate share of the Fund s Net Asset Value attributable to the share class. The fair value is based on the amount payable on demand, discounted from the first date that the amount could be required to be paid. The impact of discounting in this instance is not material. As such, Level 1 is deemed to be the most appropriate categorisation for net assets attributable to holders of redeemable participating shares held in the Company. The following table analyses within the fair value hierarchy the Company s financial assets and liabilities measured at fair value at 30 September Level 1 Level 2 Level 3 total assets Financial assets designated at fair value through profit or loss: Investment in Master Fund 71,997,256 71,997,256 Derivatives Forward foreign currency contracts* 89,631 89,631 total assets 71,997,256 89,631 72,086,887 Liabilities Financial liabilities designated at fair value through profit or loss: Derivatives Forward foreign currency contracts* (2,455) (2,455) total liabilities (2,455) (2,455) * In accordance with IFRS 7, forward foreign currency transactions have been classified as Level 2. However, the Company regards these contracts as being highly liquid as they can be traded at fair value at short notice. 17

20 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September Fair value estimation (continued) The following table analyses within the fair value hierarchy the Company s financial assets and liabilities measured at fair value at 31 March Level 1 Level 2 Level 3 total assets Financial assets designated at fair value through profit or loss: Investment in Master Fund 70,996,023 70,996,023 Derivatives Forward foreign currency contracts* total assets 70,996, ,996,438 Liabilities Financial liabilities designated at fair value through profit or loss: Derivatives Forward foreign currency contracts* (252,462) (252,462) total liabilities (252,462) (252,462) * In accordance with IFRS 7, forward foreign currency transactions have been classified as Level 2. However, the Company regards these contracts as being highly liquid as they can be traded at fair value at short notice. Transfers between levels are deemed to have occurred when the pricing source for a particular security has changed which triggers a change in level as defined under IFRS 13 Fair Value Measurement. There were no transfers between levels during the period ended 30 September 2017 and year ended 31 March There were no level 3 holdings as at 30 September 2017 and 31 March Cash and cash equivalents The Company held the following cash and cash equivalents at the period end: Foreign sterling Currencies total 30 september 30 september 30 september State Street Bank & Trust 424, , , ,541 Foreign sterling Currencies total 31 march 31 march 31 march State Street Bank & Trust 560, , , ,926 18

21 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September exchange rates At the period end the exchange rates used were as follows: exchange rate exchange rate to sterling to sterling 30 september 31 march Australian dollar Euro Norwegian Krone US Dollar net forward foreign currency transactions As at 30 September 2017, the Company had entered into and not closed certain forward foreign currency transactions both to achieve its investment objective (Investment Level forwards) and to hedge the value of the following share classes (Share Class Level forwards): Class B (Income) Share class and Class B (Accumulation) Share class both of which are denominated in Euro, the Class C (Income) Share class denominated in Norwegian Krone, the Class D (Accumulation) Share class which is denominated in Australian Dollar and the Class F (Income) Share class which is denominated in Euro. Open forward foreign currency transactions are listed as part of the Investment Portfolio. All these transactions were executed with State Street Bank. All gains and losses arising from hedging are applied to the relevant share class. 19

22 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September distributions & accumulation shares Income The Company declared and paid distributions as follows during the period ended 30 September 2017: Class a (Income) date date rate per no. of declared Paid share* shares amount relevant Period , , , , , Class b (Income) date date rate per no. of declared Paid share* shares amount relevant Period , , , , , Class C (Income) date date rate per no. of declared Paid share* shares amount nok relevant Period , , , , , Class e (Income) date date rate per no. of declared Paid share* shares amount relevant Period ,560, , ,628, , , Class F (Income) date date rate per no. of declared Paid share* shares amount relevant Period ,125, , ,126, , , * Each Rate per Share is rounded to 3 decimal places. 20

23 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September distributions & accumulation shares Income (continued) The Company declared and paid distributions as follows during the year ended 31 March 2017: Class a (Income) date date rate per no. of declared Paid share* shares amount relevant Period , , , , , , , , , Class b (Income) date date rate per no. of declared Paid share* shares amount relevant Period , , , , , , , , , Class C (Income) date date rate per no. of declared Paid share* shares amount nok relevant Period , , , , , , , , , Class e (Income) date date rate per no. of declared Paid share* shares amount relevant Period ,784, , ,630, , ,537, , ,432, , , Class F (Income) date date rate per no. of declared Paid share* shares amount relevant Period ,306, , ,101, , ,142, , ,117, , , In the Statement of Comprehensive Income, distributions are translated into GBP using an average exchange rate, which approximates actual on the date of the transaction. * Each Rate per Share is rounded to 3 decimal places. 21

24 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September distributions & accumulation shares Income (continued) In the case of the accumulation shares the following net income/(expense) was allocated during the period ended 30 September 2017 & 31 March 2017: amount relevant Period Class A Accumulation (131,501) , Class B Accumulation 29, , Class D Accumulation 3, , Class E Accumulation 315, , taxation The Company is exempt from income tax in Guernsey under the provisions of The Income Tax (Exempt Bodies) (Guernsey) Ordinance, Guernsey does not levy taxes upon capital inheritances, capital gains (with the exception of a Dwellings Profits Tax), gifts, sales or turnover, nor are there any estate duties (save that ad valorem fees are payable in respect of the grant of any probate). Taxation law and practice and the levels and bases of and reliefs from taxation relating to the Company and to Shareholders may change from time to time. 15. net asset Value per share Class a Class a Class b Class b Class C Class d Class e Class e Class F (Inc) (acc) (Inc) (acc) (Inc) (acc) (Inc) (acc) (Inc) nok aud 30 September March Subscription and redemption prices per share may differ from the Net Asset Value per Share per the financial statements due to the following adjustments. Dilution Adjustment A dilution adjustment is not applied to the Feeder Fund, however a similar mechanism is in place to adjust the price of the Master Fund. Details are contained in the Master Fund prospectus. 22

25 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September reporting fund status HM Revenue & Customs (HMRC) in the United Kingdom have certified the relevant distributing classes of the Company as distributing classes in respect of the period from incorporation to 31 March The Company has received confirmation from HM Revenue & Customs (HMRC) in the UK that HMRC have granted reporting fund status with effect from 1 April 2011 in respect of the Class A, Class B, Class C and Class D Income Share Classes for UK tax purposes. The Class E and Class G Accumulation Share Classes and the Class F Income Share Class have been approved by HMRC with effect from 1 April The Class E Income Share Class has been approved by HMRC with effect from 1 May The Class D Income Share Class ceased to have reporting fund status from 31 March The approval date for the Class G Income Share Classes and the Class F Accumulation Share Class are still to be confirmed. The Company has not and does not intend to seek reporting fund status in respect of the Accumulation Share Classes of Class A, Class B, Class C and Class D. 17. significant events during the period Hugh Cameron Moir resigned as a Director with effect from 20 April Tina Watts was appointed as a Director with effect from 20 April There were no other significant events during the period. 18. subsequent events The Company declared and paid the following distributions after the period end: Class a (Income) date date rate per no. of declared Paid share shares amount relevant Period , , , Class B (Income) Date Date Rate per No. of Declared Paid Share Shares Amount relevant Period , , ,

26 F&C ProPerty Growth & InCome Fund LImIted notes to the Condensed FInanCIaL statements (continued) 30 September subsequent events (continued) Class C (Income) Date Date Rate per No. of Declared Paid Share Shares Amount NOK relevant Period , , , Class E (Income) Date Date Rate per No. of Declared Paid Share Shares Amount relevant Period ,993, , , Class F (Income) Date Date Rate per No. of Declared Paid Share Shares Amount relevant Period ,125, , , There were no other subsequent events. 19. soft Commissions There were no soft commission agreements during the period ended 30 September 2017 (year ended 31 March 2017: none). 24

27 F&C ProPerty Growth & InCome Fund LImIted significant PortFoLIo movements For the six months ended 30 September 2017 During the period ended 30 September 2017, there have been purchases amounting to 6,370,685 and sales of 9,079,639 in the Master Fund. There are therefore no significant portfolio movements as any movements are the movements on the shares in the Master Fund. 25

28 F&C ProPerty Growth & InCome Fund LImIted appendix 1 Condensed InterIm report and unaudited FInanCIaL statements of the master Fund 30 September

29 F&C Property Growth and Income Fund ICVC Interim Report and Financial Statements For the period ended:

30 F&C Property Growth and Income Fund ICVC Contents Page 1 Directory* 2 Company Information* 4 Certification of Financial Statements by Directors of the Authorised Corporate Director* 5 Authorised Corporate Director's Investment Report* 6 Property Portfolio* 12 Portfolio Statement* 15 Material Portfolio Changes* 16 Comparative Tables* Financial Statements of F&C Property Growth and Income Fund 18 Statement of Total Return 18 Statement of Change in Net Assets Attributable to Shareholders 19 Balance Sheet 20 Cash Flow Statement 21 Notes to the Financial Statements *The Authorised Corporate Director s Report in accordance with the Investment Management Association (IMA) SORP (2014) and the Collective Investment Schemes sourcebook comprises those items denoted above along with the Fund Objective, Market Review, Activity, Outlook, Comparative Table, Portfolio Statement and Material Portfolio Changes of the Fund.

31 F&C Property Growth and Income Fund ICVC Directory Company Information F&C Property Growth and Income Fund Exchange House Primrose Street London EC2A 2NY Authorised Corporate Director F&C Fund Management Limited Exchange House Primrose Street London EC2A 2NY Telephone: , Facsimile: (0207) Regulated by the Financial Conduct Authority. Investment Advisor Thames River Capital LLP Exchange House Primrose Street London EC2A 2NY Independent Auditors PricewaterhouseCoopers LLP Level 4 Atria One 144 Morrison Street Edinburgh EH3 8EX Depositary BNP Paribas Securities Services Registered Office 10 Harewood Avenue London NW1 6AA Head Office and Principal Place of Business 55 Moorgate London EC2R 6PA Fund Accounting and Unit Pricing State Street Bank and Trust Company 525 Ferry Road Edinburgh EH5 2AW Administrator and Registrar DST Financial Services Europe Limited DST House St Nicholas Lane Basildon Essex SS15 5FS Legal Advisors Eversheds LLP One Wood Street London EC2V 7WS Property Advisor and Property Manager Independent Valuer GBR Phoenix Beard Knight Frank LLP 7-10 Chandos Street 55 Baker Street Cavendish Square London London W1U 8AN W1G 9EH 1

32 F&C Property Growth and Income Fund ICVC Company Information Company Information F&C Fund Management Limited, the Authorised Corporate Director (ACD) of the Open-Ended Investment Company (OEIC), is the sole director. The ACD has appointed GBR Phoenix Beard as the Property Advisor and Thames River Capital LLP as the Investment Advisor to the Fund of the OEIC. F&C Property Growth and Income Fund (the 'Company') is an investment company with variable capital under the Open-Ended Investment Company Regulations 2001 (SI2001/1228). The Company comprises a single fund, the F&C Property Growth and Income Fund, which is a non- UCITS scheme. Financial Statements These financial statements are for the period 1 April 2017 to 30 September Shareholders Shares of the Company have no par value and the share capital of the Company will at all times equal the sum of the net asset value of each of the sub-funds. Shareholders are not liable for the debts of the Company. The assets of each sub-fund are treated as separate from those of every other sub-fund and are invested in accordance with the investment objectives and policy of that sub-fund. Each fund is a segregated portfolio of assets and, accordingly, the assets of a fund belong exclusively to that fund and shall not be used to discharge directly or indirectly the liabilities of, or claims against, any other person or body, including the Company or any other fund and shall not be available for any such purpose. The Company adopted segregated liability status for funds on 8 June From that date the assets of one fund may not be used to satisfy the obligations of another fund. While the provisions of the OEIC Regulations provide for segregated liability between funds, the concept of segregated liability is relatively new. Accordingly, where claims are brought by local creditors in foreign courts or under foreign law contracts, it is not yet known how those foreign courts will react to regulations 11A and 11B of the OEIC Regulations. Instrument of Incorporation and Prospectus The Company was incorporated and authorised by the Financial Conduct Authority on 26 September 2014 under registered number IC1020. As at 30 September 2017 the Company comprised a single sub-fund. The accounts of the sub-fund are the accounts of the Company. The Company is an Alternative Investment Fund (AIF) for the purposes of the Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD). On 22 July 2014 the Company s Instrument of Incorporation and Prospectus were updated to reflect the requirements of the AIFMD and the appointment of the ACD as AIF Manager and the Depositary as AIF Depositary. The investment objectives, investment policies and investment activity reports, for the F&C Property Growth and Income Fund are included in the financial statements. Copies of the current prospectus, the latest annual report and any subsequent reports are available from the Administrator. Other Information The Company offers both accumulation and income shares. The Operating charges figure for each share class can be found in the Fund s Comparative Tables. There have been no changes to the Risk Management systems during the period. Sensitivity to the most relevant risks has been assessed through a series of quantitative risk measures, including as appropriate, tracking error and stress tests. There have been no breaches to the relevant risk limits during the period. F&C Fund Management Limited, manager of F&C Property Growth and Income Fund, is authorised by the FCA as an AIFM, and appointed as such, with effect from 22 July Requirements for compliance with the Alternative Investment Fund Managers Directive in the UK are set out in the FCA Investment Funds sourcebook. Rule FUND in this sourcebook requires certain information to be provided to prospective investors. The FCA s general guidance on the AIFM Remuneration Code (SYSC 19B) was published in January Under the Code, the Remuneration Committee of BMO Global Asset Management (EMEA) in its oversight of F&C Fund Management Limited must make relevant remuneration disclosures no later than 6 months following the end of the financial year, splitting remuneration into fixed and variable remuneration and breaking down remuneration for the category of AIFM Code Staff which is defined as all staff whose professional activities have a material impact on the risk profiles of the AIFM or of the AIFs the AIFM manages. Code Staff in F&C Fund Management Limited are defined as the directors, employees performing a significant influence function and other senior managers and heads of control functions. 2

33 F&C Property Growth and Income Fund ICVC Company Information (continued) The Remuneration Committee approves the list of AIFM Code Staff annually. In addition, AIFM Code Staff are notified of their status and the implications of this annually. There were no cross holdings in the F&C Property Growth and Income Fund ICVC as at 30 September As of 14 August 2017, DST Financial Services Europe Ltd is the trading name of International Financial Data Services (UK) Ltd following the acquisition of the remaining 50% ownership interest. Remuneration policy The AIFM Remuneration Code of the UK Financial Conduct Authority requires F&C Fund Management Limited as the designated AIFM for F&C Property Growth and Income Fund ICVC to maintain a remuneration policy for AIFM Remuneration Code Staff ( AIFM Code Staff ). The policy s purpose is to promote sound and effective risk management. The policy must be consistent with the AIF s risk profile, governing terms and investment strategy. AIFM Code Staff are treated as those persons whose professional activities have a material impact on the risk profiles of the AIFMs or the investment funds managed by them. The Board of the AIFM delegates to the BMO Global Asset Management (EMEA) Group Risk and Remuneration Committee (the Committee ) the responsibility of maintaining a compliant remuneration policy. The Committee approves on an annual basis the BMO Global Asset Management (EMEA) Group Remuneration Policy (the Policy ). The Policy defines how the AIFM will achieve the objective of providing total compensation to AIFM Code Staff, taking into account: business unit/function, individual performance and market rates the promotion of sound and effective risk management and the achievement of fair outcomes for all customers. The Policy deals with how the Pay-Out Process Rules in the AIFM Remuneration Code apply to variable remuneration (which may be cash bonus and/or long-term award pools). The Pay-Out Process Rules require certain levels of variable remuneration to be paid in the shares of the relevant investment fund and for certain amounts to be deferred. The Committee determines annually how the Pay-Out Process Rules apply at a firm and at an AIFM Code Staff level. The Policy also includes requirements that an employee s unvested variable remuneration may be reduced at the discretion of the Committee in certain circumstances, for example, reasonable evidence of employee misconduct, or material failure in risk management. 3

34 F&C Property Growth and Income Fund ICVC Certification of Financial Statements by Directors of the Authorised Corporate Director This report contains the information required by the Statement of Recommended Practice (SORP) for Financial Statements of Authorised Funds issued in May 2014, the Open-Ended Investment Companies Regulations 2001 and the Collective Investment Schemes sourcebook, in the case of interim financial statements and was approved for publication on 30 November Director On behalf of F&C Fund Management Limited Authorised Corporate Director 30 November

35 F&C Property Growth and Income Fund Authorised Corporate Director's Investment Report for the period 1 April 2017 to 30 September 2017 (unaudited) Fund Objective The investment objective of the Company is to deliver capital and income appreciation. The Company will seek to achieve this investment objective primarily through investment in and/or exposure to a combination of investments in UK commercial property and securities of property and property related issuers listed or operating in the countries of the EU and/or the EEA. While the securities in which the Company invests will mainly be equity securities, investment may also be made in fixed interest securities, securities convertible into equities and derivatives. The Company may use derivatives for investment purposes as well as for efficient portfolio management. Such derivatives may include, but will not be restricted to, swaps, contracts for difference, forward currency contracts and financial futures and options. The portfolio may invest all or part of its assets in cash or money market instruments (including government securities) if, in the opinion of the ACD, the prevailing market and economic conditions warrant the adoption of such a policy. Up to 10% of the portfolio may be invested in separately managed funds (including collective investment schemes) investing predominantly in securities in which the Company may invest. Non-sterling investments may be hedged back to sterling. Fund manager George Gay, Alban Lhonneur and Marcus Phayre-Mudge Fund size million Launch date 30 January 2015 Market Review Market review in here and rows below Portfolio Distribution The Company's investment portfolio exposure was as follows: Property Equities gross exposure Direct Property gross exposure Corporate Bonds/Convertibles Net Cash As at 31/03/17 As at 30/09/ % 67.07% 29.60% 26.27% 0.20% 0.17% 3.70% 6.49% F&C Fund Management Limited 1 October

36 F&C Property Growth and Income Fund Property Portfolio as at 30 September 2017 Barking, Units 2-4, IO Centre, River Road A modern terrace of three industrial units developed in 2003 by IO Group, comprising a total area of 25,783 sq. ft. The property is located on the established River Road industrial area of Barking and is let to three tenants namely Belron UK Limited, Lancaster Motor Company Limited and Ferraris Piston Service Limited. Bristol, Units A & B, Causeway Central, Pioneer Park Causeway Central is at the heart of Bristol City Centre s industrial and warehouse market. The property is a purpose built detached single storey industrial/trade counter building divided into two units, each with two storey ancillary office space, providing a gross internal area of 29,328 sq. ft. It is let to two tenants, Anti-Friction Components Limited and Guy Salmon Ltd. Chichester, Units 1-3, Rutland Way The property is conveniently situated very close to the A27 (Chichester-By-Pass) on the eastern edge of the city. The 43,000 sq. ft. industrial building which has been subdivided into three units of c.14,000 sq. ft. each, on a large site of 4.9 acres. It is let to three tenants, Kervan Gida, Best Log Ltd and F&G Transport Ltd. Colchester, Charter Court, Severalls Business Park Severalls Park is the established office/industrial location in Colchester situated approximately 2 miles north of the town centre. The property is made up of four office buildings, let to five tenants, totalling 30,000 sq. ft. Tenants include FJG LLP, Bourn Hall Limited and Ford Retail Ltd. 6

37 F&C Property Growth and Income Fund Property Portfolio as at 30 September 2017 (continued) Coventry, Site B, Leofric Business Park, Binley The property is located on the Binley Industrial Estate to the East of Coventry, in the heart of the midlands industrial golden triangle and has good access to the motorway network. The building is a modern detached warehouse unit totalling 47,501 sq. ft. and is let to IQOR Global Services Limited on a lease expiring in February 2027 with a tenants break option in February Daventry, 6 Sopwith Way The property comprises an 18,147 sq. ft. manufacturing and distribution warehouse, including ground floor offices and workshop. It is situated in a principle industrial/warehouse location, easily accessible from junction 16 & 18 of the M1. It is let to Multi-Colour Daventry England Ltd until Exeter, 13 Trusham Road, Marsh Barton Industrial Estate MarshBartonissituated1milesouthof Exeter City Centre and 1.5 miles north of Junction 31 of the M5 motorway. The property was constructed in the 1980 s and comprises a 40,485 sq. ft. warehouse unit, on a site area of 2.31 acres. It is let to Royal Mail Group Ltd until Exeter, Unit C, Silverton Road, Matford Park Matford Park is the southern and newer part of Exeter s largest commercial estate, Marsh Barton; being approximately 1.5 miles south of Exeter City Centre. The property comprises a modern 22,738 sq. ft. detached industrial building constructed in The site area is 1.83 acres (0.74 ha). The unit is let to Tuffnells. 7

38 F&C Property Growth and Income Fund Property Portfolio as at 30 September 2017 (continued) Gravesend, Units C1/C5, Imperial Business Estate Imperial Business Estate is located immediately to the west of Gravesend Town Centre. The property comprises five light industrial units, constructed in the 1980 s, ranging from 5,000 to 9,000 sq. ft. and totalling 32,000 sq. ft. It is let to four tenants under five leases. Hatfield, Hatfield Office Village, Beaconsfield Road The property is located in a small commercial area in Beaconsfield Road (which links between St Albans Road East and French Horn Lane) and immediately adjoins the railway station. Three of the properties five individual buildings are let to Silony Medical Limited and Interserve (Facilities Management) Ltd under three individual leases. The remaining two units are currently undergoing refurbishment. Lichfield, Unit 8, Europa Way, Britannia Enterprise Park The property is a 31,962 sq. ft. purpose built single-storey stand-alone selfcontained industrial/distribution unit constructed in the 1980 s. Located approximately 1.5 miles east of Lichfield city centre and within close proximity to the A38. It is let to Evans Lichfield Limited until Maidenhead, Units 1, 2 & 3, Priors Way Industrial Estate Priors Way comprises small clusters of industrial/warehouse units, conveniently located for access to the town, the local area and the M4 motorway. The property includes one detached and two semi-detached warehouse units with a central service yard, originally constructed in the late 1970s/early 1980s, totalling 2, sq. ft, on a site area of acres (0.563 ha). It is let to two tenants on three leases. 8

39 F&C Property Growth and Income Fund Property Portfolio as at 30 September 2017 (continued) Milton Keynes, Units 2 & 4, IO Centre, Stonebridge The IO Centre is situated in a well-regarded and established industrial location, on the north western fringes of the town, close to Wolverton, comprising an 11 unit estate constructed by the IO Group in The total site area of the property is 1.80 acres (4.45 ha). All bar two of the units have been sold off on long 999 year leases. Unit 2 & 4 total 2,025 sq. ft. and are let on standard occupational short leases to Raytheon Systems and Sysmex UK Ltd. Milton Keynes, Yokohama Tyres, Dawson Road The property comprises a freehold distribution warehouse with two storey ancillary offices, constructed in 1992, and provides a total floor area of 108,018 sq. ft, with the total site extending to 5.74 acres. Located south of the centre in an established M1 corridor location. It is let to Yokahama H.P.T. Ltd on a lease expiring in Northampton, IO Centre, Lodge Farm Industrial Estate The IO Centre forms part of the Lodge Farm Industrial Estate which is one of Northampton s principle industrial locations. Northampton town centre is situated approximately 3.5km (2 miles) to the south east. Constructed in 2001, the property comprises five buildings arranged as two terraces and an end of terrace unit. The total gross internal floor area for the property is 46,562 sq. ft. It is let to three tenants (Timken Limited, Stove Central Limited and Click for Games) under five separate leases. Plymouth, Unit 1, Langage Industrial Estate Langage Industrial Estate, is east of Plymton and approximately 5 miles from the centre of Plymouth. The units occupy prominent positions at the entrance to the Estate at the junction of Holland Road and Eastern Wood Road. The property is a 19,734 sq. ft. detached and self-contained industrial unit constructed in 1989, which is let to Secretary of State. 9

40 F&C Property Growth and Income Fund Property Portfolio as at 30 September 2017 (continued) Plymouth, Unit E, F & G, Eagle Road Langage Business Park is well situated with excellent road communications. The A374 linking with the A38 trunk road, providing direct access to the national motorway network at junction 31 of the M5, just to the south of Exeter. The property comprises three detached industrial units, built in 1988, totalling 49,765 sq. ft. The units are let to two tenants on three leases (Secretary for State and DSG Retail Ltd). Reading, Forbury Court, 12 Forbury Road Forbury Court is situated in an excellent town centre location 150 metres from Reading Station, directly opposite Apex Plaza and close to the new Yell HQ at the recently completed One Reading Central development. The property was constructed in 1989 and comprises 13,237 sq. ft. of office accommodation on ground (reception and parking) and five upper floors. It is let to three tenants, with two vacant floors - refurbishment and rebranding of the entire building will commence in Q Redhill, Warwick House, 67 Station Road Warwick House occupies a prominent position at the Junction of Station Road (A25) and St Matthew s Road. Redhill railway station is located approximately 400m to the East. The property comprises a town centre office building arranged over ground and four upper floors totalling circa 20,434 sq. ft. and is let to Secretary for State. The building was originally constructed in Sheffield, Ruskin Buildings, Tudor Square The property comprises a 13,589 sq. ft. grade 2 listed Victorian structure built around A recent addition, constructed in 2004, added to two of the three elevations fronting onto Tudor Square opposite the Crucible Theatre. One ground floor unit is let to Crucible Theatre Trust, with one currently vacant. While the upper floors are let to Hays Recruitment and a national firm of architects. 10

41 F&C Property Growth and Income Fund Property Portfolio as at 30 September 2017 (continued) Tewkesbury, Unit 4, Ashchurch Parkway The property comprises a detached 42,208 sq.ft. warehouse building with 2 storey office ancillary accommodation constructed in The building is situated in close proximity to junction 9 of the M5 and is located adjacent to the Ashchurch for Tewkesbury railway station car park. The entire building is currently let to Restore Plc until Worcester, Bibby Distribution Limited, Woodbury Lane The property is south west of Worcester town centre on Whittington Road and is 1 mile from Junction 7 of the M5. The building was constructed in 2000 and is a two bay modern distribution warehouse with 12,400 sq. ft. of office accommodation and 80,002 sq. ft. of warehouse. It is let to Bibby Distribution Limited on a term expiring in Worcester, Unit 16a, Blackpole Industrial Estate Blackpole Trading estate is the primary distribution and manufacturing location within the Worcester industrial market. The estate is 2.5 miles from the city centre and 2 miles to the east of Junction 6 of the M5. The property is a single storey 25,230 sq. ft. warehouse/distribution unit built in The site area is 1.62 acres. It is let to Amco international Services Limited on a term expiring in