Standard Life Investments UK Real Estate Trust

Transcription

1 Interim Report Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements for the six months ended 30 June 2018 (unaudited)

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3 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements Contents 1 Trust Information* 3 Statement of Manager s Responsibilities 3 Manager s Statement* 4 Standard Life Investments UK Real Estate Accumulation Feeder Fund 22 Standard Life Investments UK Real Estate Income Feeder Fund 36 Alternative Investment Fund Disclosures * These items comprise the Manager s Report for the purposes of the rules contained in the Collective Investment Schemes sourcebook ( the Sourcebook ).

4 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements Trust Information General Standard Life Investments UK Real Estate Feeder Trust (the Trust ) is an authorised unit trust in umbrella form and is authorised by the Financial Conduct Authority with effect from 6 March Funds There are currently two sub-funds (Funds) in the Trust, the Standard Life Investments UK Real Estate Accumulation Feeder Fund ( the Accumulation Feeder ) and the Standard Life Investments UK Real Estate Income Feeder Fund ( the income Feeder ), both of which are wholly invested in the relevant Share Class of the Standard Life UK Real Estate Fund ( the PAIF ). All sub-funds are classified as non-ucits retail schemes ( NURS ). The sub-funds are also alternative investment funds ( AIF ) for the purposes of the Investment funds Sourcebook (FUND), and are intended to be Feeder Funds at all times. The investment objectives, the policy and strategy used can be found in each sub-funds report. There are no sub-funds holding investments in other sub-funds of the umbrella. The sub-funds substantially invest in the PAIF, the ACD charges no fee in the PAIF classes used and the Manager meets the current audit fees of the Trust. These measures mean investors in the Trust are treated comparably to investors in the PAIF. The long report of the umbrella as a whole is available on request. Reporting dates Interim Annual Record dates Interim Annual Payment dates Interim Annual 30 June 31 December Last day of each month 31 December Last day of each month 15 February 1 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

5 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements Trust Information (Continued) Standard Life Investments UK Real Estate Accumulation Feeder Fund Manager Directors of the Manager Secretary of the ACD Trustee Standard Life Investments (Mutual Funds) Limited 1 George Street Edinburgh EH2 2LL A.S. Acheson S.A. Fitzgerald J. Lowe S. Campbell L. Scott D.E. Thomas S.R. Wemyss H.S. Kidd Citibank Europe plc UK Branch 1 North Wall Quay Dublin 1 Independent Auditors Registrar Investment Adviser KPMG 15 Canada Square Canary Wharf London E14 5GL Standard Life Investments (Mutual Funds) Limited 1 George Street Edinburgh EH2 2LL Standard Life Investments Limited 1 George Street Edinburgh EH2 2LL Standing Independent Valuers* C B Richard Ellis Limited St Martin s Court 10 Paternoster Row London EC4M 7HP JLL Limited 30 Warwick Street London W1B 5NH * for the property investment held within the Master Fund Standard Life Investments UK Real Estate Fund, the PAIF. Keeping you informed You can keep up to date with the performance of your investments by visiting our website aberdeenstandard.com. Alternatively, if you would rather speak to us, please call (+44 (0) if outwith the UK) between 8:30am and 5:30pm Monday to Friday. Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 2

6 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements Statement of Manager s Responsibilities Manager s Statement The Collective Investment Schemes sourcebook published by the FCA, ( the COLL Rules ) require the Manager to prepare financial statements for each annual accounting period which give a true and fair view of the financial position of the Trust and of the net income and net gains or losses on the property of the Trust for the period. In preparing the financial statements the Manager is responsible for: selecting suitable accounting policies and then apply them consistently; making judgements and estimates that are reasonable and prudent; following UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; complying with the disclosure requirements of the Statement of Recommended Practice for UK Authorised Funds issued by the Investment Management Association in May 2014; The Manager is Standard Life Investments (Mutual Funds) Limited which is authorised and regulated by the Financial Conduct Authority for investment business. The Standard Life Investments UK Real Estate Trust and its sub-funds are Authorised Unit Trust Schemes under section 243 of the Financial Services and Markets Act 2000, and fall into the category of a non-ucits retail schemes. Copies of the most recent Prospectus are available online at standardlifeinvestments.com. Distributions are made from positive net revenue where gross revenue exceeds expenses and tax. The total return consists of investment and currency gains and losses in addition to net revenue. In situations where the sub-fund has a negative total return but a positive net income position, there will be a distribution. We hereby certify the Interim Report and Financial Statements on behalf of the Directors of Standard Life Investments (Mutual Funds) Limited. keeping proper accounting records which enable it to demonstrate that the financial statements as prepared comply with the above requirements; assessing the Trust s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; using the going concern basis of accounting unless they either intend to liquidate the Trust or to cease operations, or have no realistic alternative but to do so; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; and taking reasonable steps for the prevention and detection of fraud and irregularities. Director Director Edinburgh Edinburgh 31 August August 2018 The Manager is responsible for the management of the Trust in accordance with its Trust Deed, the Prospectus and the COLL Rules. 3 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

7 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Fund Profile and Information Fund Manager: George Shaw Launch date 18 March 2016 Objective The investment objective of the Fund is to achieve income and capital growth through investment in shares of the PAIF. Policy The Fund will invest all or substantially all of its assets in the feeder accumulation shares of the PAIF. To the extent that the Fund is not fully invested in the PAIF, the Fund will hold its remaining assets in cash. Standard Life Investments UK Real Estate Accumulation Feeder Fund is a Feeder as defined by COLL 11.1 and holds shares in the PAIF. The Investment report of the PAIF ( the Master fund ) has been provided. Copies of the Report and Accounts are available online at standardlifeinvestments.com. Risk Profile Investors should be aware of the following risk factors: (a) The sole investment of the Fund is shares in the relevant share class of the PAIF. If the value of the investment in the PAIF declines, or is otherwise adversely affected, this will have an adverse effect on the value of the Fund. Past performance is no guide to the future; (b) Where an initial charge or redemption charge is imposed, an investor who realises his units after a short period may not (even in the absence of a fall in the value of the relevant investments) realise the amount originally invested. In particular, where a redemption charge is payable, investors should note that the percentage rate at which the redemption charge is calculated is based on the market value rather than the initial value of the units. If the market value of the units has increased the redemption charge will show a corresponding increase. The units therefore should be viewed as medium to long term investments; (c) Investors are reminded that in certain circumstances their right to redeem shares (including a redemption by way of switching) may be suspended. In exceptional circumstances, the Manager may (following consultation with the Trustee) suspend the issue, cancellation, sale and redemption of shares in the Fund (or classes). In particular, if the issue, cancellation, sale and redemption of shares in the relevant class of the PAIF should be suspended, then the Manager will suspend the issue, cancellation, sale or redemption of units to reflect the position in the relevant class of the PAIF. (d) Inflation will, over time, reduce the value of investments in real terms. (e) The Fund may employ leverage that will magnify gains and losses and result in greater volatility in the value of the Fund as a result of market movements. Synthetic Risk and Reward Indicator For UCITS or NURS funds under the regime the figure for the synthetic risk and reward indicator would be disclosed and any changes to that figure that have taken place during the period. As the PAIF invests in property this figure does not adequately disclose the risk related to this investment. The indicator is derived from market price information making it suited to liquid assets. Cautionary note It should be remembered that past performance is not a guide to future performance. The value of investments may go down as well as up and, therefore, investors may not get back the amount originally invested. Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 4

8 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Investment Report The investment report below is from the PAIF the only investment of the Accumulation Feeder. Market Background In the UK, investors face ongoing indecision from the UK government regarding the Brexit end state. Our base case is for a free-trade agreement (FTA) with an all-uk customs union and some regulatory devolution to Northern Ireland. Real income growth should start to provide a modest tailwind to GDP growth. Business investment continues to be held back by elevated uncertainty over the UK s future trading relationship with the EU. Within UK real estate, difficulties in the retail sector dominated the headlines over the last few months. This is now reflected in retail rents, which are falling across the board according to MSCI s monthly index. News that half-year profits at John Lewis would be close to zero was further evidence of the mounting challenges in the industry. At the opposite end of the spectrum, industrial demand remains buoyant and in the supply-starved South East this has pushed rents 6.8% higher over the year to May, according to MSCI. Demand is broad-based, with the continued expansion of trade counters and urban logistics uses a feature. Early data on investment volumes in Q2 suggest a lower total than Q1 and the smallest number of quarterly deals for five years. There was a dramatic fall in the number of industrial deals, reflecting the dearth of stock as investors hold what they have and continue to compete very strongly for assets that do come to market. UK institutions were the major net investor in Q2, selling less real estate than any quarter since Overseas investors were only marginal net investors but a number of large deals are expected to complete early in the third quarter. The result of that competitive demand has been continued strong capital growth in the industrial sector 16.1% for the year to May, according to MSCI which we expect to continue through the rest of 2018 given prices achieved are far outstripping valuations. Performance The UK Real Estate Fund returned 2.69% over the period, compared with a total return of 2.65% from the IA Commercial Property Funds peer group* The Authorised Property Unit Trust ( APUT )/Property Authorised Investment Fund ( PAIF ) MSCI Benchmark for Q illustrating the relative performance of the underlying direct property assets is not currently available. Initial estimates indicate that the Fund s underlying direct property assets provided a total return of 1.8% over Q and 4.2% for H In line with the market, the Fund s industrial assets were the best performers, with performance in South East industrials particularly strong. Investment Activity During the reporting period, the Fund disposed of Maiden House, Maidenhead, for 4.0 million. We also completed the leasehold disposal of a further residential unit located above the commercial holding at Hampstead High Street, London, realising an additional 0.77 million. Asset management activity remained a key focus. For example, we completed a new 10 year lease with CEVA Logistics at Trilogy, Fareham, at an initial rent of 363,000 per annum ( 8.50 per square foot (psf)). A lease renewal with Howard Hunt at Masthead, Dartford, also completed, providing an additional 10-year term at an initial rent of 355,000 per annum ( 8.50 psf), an uplift of 18.4%. At io Centre, Sutton, Screwfix renewed its lease for an additional 10-year term at an initial rent of 81,435 per annum ( psf) and we completed a rent review with Kuehne & Nahel at unit 17, securing a rent of 96,405 per annum (an uplift of 33%). Letting activity continued at Bligh s Meadow, Sevenoaks, which included: restructuring with an existing tenant, Kit for Kids, which has taken a new 10-year lease on additional premises alongside a re-gear of its existing lease, securing a combined initial rent of 70,000 per annum; a new 10-year lease with Manak Lawyers at an initial rent of 23,400 per annum; a new letting to Card Factory, providing a 10-year term at an initial rent of 61,000 per annum; 4AG, securing a five-year term at an initial rent of 12,300 per annum. The Fund also restructured existing leases with: Fifth Avenue, securing an additional 15 years at an initial rent of 27,600 per annum; Between The Lines, providing an additional 10 years at an initial rent of 51,800 per annum; Leaders, removing a break option and securing an additional seven-year term. A final highlight in the retail sector was the rent review with VF Northern (trading as The North Face ) at Stock Exchange, Glasgow, providing a revised rent of 423,000 per annum (an uplift of 18.5%). In the office sector, we completed a new lease with AHR Architects at 55 Princess Street, Manchester, which provides a new 10-year term at an initial rent of 198,792 per annum ( psf). At Central Square South, Newcastle, DWF took a 10-year lease over the second floor at a rent of 175,216 ( psf) and GVA took a five-year lease over the third floor at a rent of 75, ( psf). At One Eton Street, Richmond, British American Tobacco signed up to a five-year reversionary lease at a rent of 474,462 ( psf). 5 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

9 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Investment Report (Continued) Outlook and Future Strategy Investor sentiment and activity continues to illustrate that the hierarchy of sector preference remains largely unchanged. The industrial sector is likely to remain the favoured sector as investors seek to take advantage of the structural shift towards online retailing. We continue to believe that UK real estate dynamics remain supportive although returns are expected to be moderate. UK real estate continues to provide an elevated yield compared to other assets in a low growth environment. Given the backdrop of continuing heightened macro uncertainty, however, we expect to see more polarised performance between prime and secondary assets. Currently, around 80%+ of the Fund s assets by value are categorised within the Neutral to Very Heavy classification in our three-year House View. Finally, we will continue to implement asset management initiatives across the portfolio aimed towards maintaining income and capital preservation, alongside appraising select favourable investment opportunities. *Source: IA/Morningstar/Standard Life Investments; Performance based on PAIF Platform 1 Acc; Peer group comprises eight comparable property funds. Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 6

10 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Comparative Tables 30 June December December 2016 pence per unit pence per unit pence per unit Retail accumulation Change in net assets per unit Opening net asset value per unit ## Return before operating charges* (0.31) Operating charges** (1.00) (1.97) (1.46)^ Property charges~ (0.24) (0.41) (0.32)^ Return after operating charges* (2.09) Distributions (2.65) (4.99) (4.06) Retained distributions on accumulation units Closing net asset value per unit * after direct transaction costs of:***# Performance + Return after charges 2.57% 6.78% (1.44)% Other information Closing net asset value ( 000) 90, , ,380 Closing number of units 57,720,445 67,880,855 91,038,565 Operating charges**** 1.31% 1.31% 1.31% Property expense ratio~ 0.31% 0.31% 0.29% Real estate expense ratio 1.62% 1.62% 1.60% Direct transaction costs***# 0.00% 0.00% 0.16% Prices Highest unit price Lowest unit price ~ Property expenses are separate from fund operating charges. They represent the costs associated with property assets. The figure for property expenses should be combined with the operating charges to create a Real Estate Expense Ratio (REER) when comparing property funds. ** The operating charges include all costs borne by the Fund, except for direct transaction costs. *** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. Direct transaction costs, where expressed as a percentage of average NAV, reflect an equivalent annual period. **** The operating charges percentage shows the annualised operating expenses of the unit class as a percentage of the average net asset value of the class over the same period. # Transaction costs in the Feeder Fund relate to the PAIF. ## Launched at an inspecie value equivalent to the mid value of the underlying investment in order to retain continuity with the equivalent class in the donor Fund on the 18 March ^ The pence per unit values relate to the period from 18 March to 31 December 2016 reflecting a partial year. + The performance figures are calculated by taking the value of the unit class per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report. 7 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

11 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Comparative Tables (Continued) 30 June December December 2016 pence per unit pence per unit pence per unit Institutional accumulation Change in net assets per unit Opening net asset value per unit ## Return before operating charges* (0.34) Operating charges** (0.56) (1.11) (0.81)^ Property charges~ (0.21) (0.35) (0.28)^ Return after operating charges* (1.43) Distributions (2.24) (4.20) (3.41) Retained distributions on accumulation unit Closing net asset value per unit * after direct transaction costs of:***# Performance + Return after charges 2.77% 7.19% (1.14)% Other information Closing net asset value ( 000) 823, , ,815 Closing number of units 603,886, ,754, ,511,514 Operating charges**** 0.84% 0.84% 0.84% Property expense ratio ~ 0.31% 0.31% 0.29% Real estate expense ratio 1.15% 1.15% 1.13% Direct transaction costs***# 0.00% 0.00% 0.16% Prices Highest unit price Lowest unit price ~ Property expenses are separate from fund operating charges. They represent the costs associated with property assets. The figure for property expenses should be combined with the operating charges to create a Real Estate Expense Ratio (REER) when comparing property funds. ** The operating charges include all costs borne by the Fund, except for direct transaction costs. *** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. Direct transaction costs, where expressed as a percentage of average NAV, reflect an equivalent annual period. **** The operating charges percentage shows the annualised operating expenses of the unit class as a percentage of the average net asset value of the class over the same period. + The performance figures are calculated by taking the value of the unit class per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report. # Transaction costs in the Feeder Fund relate to the underlying class in the PAIF. ## Launched at an inspecie value equivalent to the mid value of the underlying investment in order to retain continuity with the equivalent class in the donor fund on the 18 March ^ The pence per unit values relate to the period from 18 March to 31 December 2016 reflecting a partial year. Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 8

12 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Comparative Tables (Continued) 30 June December December 2016 pence per unit pence per unit pence per unit Standard Life accumulation Change in net assets per unit Opening net asset value per unit ## Return before operating charges* (0.21) Operating charges** (0.02) (0.06) (0.03)^ Property charges~ (0.09) (0.14) (0.11)^ Return after operating charges* (0.35) Distributions (0.86) (1.61) (1.30) Retained distributions on accumulation unit Closing net asset value per unit * after direct transaction costs of:***# Performance + Return after charges 3.08% 7.83% (0.70)% Other information Closing net asset value ( 000) 21,916 22,300 22,893 Closing number of units 39,712,100 41,648,862 46,105,044 Operating charges**** 0.09% 0.09% 0.09% Property expense ratio~ 0.31% 0.31% 0.29% Real estate expense ratio 0.40% 0.40% 0.38% Direct transaction costs***# 0.00% 0.00% 0.16% Prices Highest unit price Lowest unit price ~ Property expenses are separate from fund operating charges. They represent the costs associated with property assets. The figure for property expenses should be combined with the operating charges to create a Real Estate Expense Ratio (REER) when comparing property funds. ** The operating charges include all costs borne by the Fund, except for direct transaction costs. *** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. Direct transaction costs, where expressed as a percentage of average NAV, reflect an equivalent annual period. **** The operating charges percentage shows the annualised operating expenses of the unit class as a percentage of the average net asset value of the class over the same period. + The performance figures are calculated by taking the value of the unit class per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report. # Transaction costs in the Feeder Fund relate to the underlying class in the PAIF. ## Launched on the 18 March ^ The pence per unit values relate to the period from 18 March to 31 December 2016 reflecting a partial year. 9 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

13 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Comparative Tables (Continued) 30 June December December 2016 pence per unit pence per unit pence per unit Standard Life B accumulation Change in net assets per unit Opening net asset value per unit ## Return before operating charges* (0.21) Operating charges** (0.00) (0.02) (0.00)^ Property charges~ (0.09) (0.14) (0.11)^ Return after operating charges* (0.32) Distributions (0.86) (1.60) (1.29) Retained distributions on accumulation unit Closing net asset value per unit * after direct transaction costs of:*** Performance + Return after charges 3.10% 7.87% (0.64)% Other information Closing net asset value ( 000) 394, , ,769 Closing number of units 714,441, ,895, ,979,081 Operating charges**** 0.01% 0.01% 0.01% Property expense ratio~ 0.31% 0.31% 0.29% Real estate expense ratio 0.32% 0.32% 0.30% Direct transaction costs***# 0.00% 0.00% 0.16% Prices Highest unit price Lowest unit price ~ Property expenses are separate from fund operating charges. They represent the costs associated with property assets. The figure for property expenses should be combined with the operating charges to create a Real Estate Expense Ratio (REER) when comparing property funds. ** The operating charges include all costs borne by the Fund, except for direct transaction costs. *** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. Direct transaction costs, where expressed as a percentage of average NAV, reflect an equivalent annual period. **** The operating charges percentage shows the annualised operating expenses of the unit class as a percentage of the average net asset value of the class over the same period. + The performance figures are calculated by taking the value of the unit class per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report. # Transaction costs in the Feeder Fund relate to the underlying class in the PAIF. ## Launched at an inspecie value equivalent to the mid value of the underlying investment in order to retain continuity with the equivalent class in the donor Fund on the 18 March ^ The pence per unit values relate to the period from 18 March to 31 December 2016 reflecting a partial year. Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 10

14 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Comparative Tables (Continued) 30 June December December 2016 pence per unit pence per unit pence per unit Standard Life A accumulation++ Change in net assets per unit Opening net asset value per unit ## Return before operating charges* (0.21) Operating charges** (0.00) (0.02) (0.00)^ Property charges~ (0.09) (0.14) (0.11)^ Return after operating charges* (0.32) Distributions (0.68) (1.57) (1.30) Retained distributions on accumulation unit Redemption value of unit on accumulation units (55.01) Closing net asset value per unit * after direct transaction costs of:***# Performance + Return after charges 2.69% 7.83% (0.64)% Other information Closing net asset value ( 000) 1 1 Closing number of units 2,200 2,200 Operating charges**** 0.01% 0.01% 0.01% Property expense ratio~ 0.31% 0.31% 0.29% Real estate expense ratio 0.32% 0.32% 0.30% Direct transaction costs***# 0.00% 0.00% 0.16% Prices Highest unit price Lowest unit price ~ Property expenses are separate from fund operating charges. They represent the costs associated with property assets. The figure for property expenses should be combined with the operating charges to create a Real Estate Expense Ratio (REER) when comparing property funds. ** The operating charges include all costs borne by the Fund, except for direct transaction costs. *** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. Direct transaction costs, where expressed as a percentage of average NAV, reflect an equivalent annual period. **** The operating charges percentage shows the annualised operating expenses of the unit class as a percentage of the average net asset value of the class over the same period. + The performance figures are calculated by taking the value of the unit class per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report. # Transaction costs in the Feeder Fund relate to the underlying class in the PAIF. ^ The pence per unit values relate to the period from 18 March to 31 December 2016 reflecting a partial year. ++Unit class closed on 07 June Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

15 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Comparative Tables (Continued) 30 June December December 2016 pence per unit pence per unit pence per unit Platform 1 accumulation Change in net assets per unit Opening net asset value per unit ## Return before operating charges* (0.12) Operating charges** (0.24) (0.47) (0.35)^ Property charges~ (0.08) (0.14) (0.11)^ Return after operating charges* (0.58) Distributions (0.89) (1.68) (1.36) Retained distributions on accumulation unit Closing net asset value per unit * after direct transaction costs of:***# Performance + Return after charges 2.76% 7.10% (1.16)% Other information Closing net asset value ( 000) 150, , ,193 Closing number of units 277,431, ,715, ,605,071 Operating charges**** 0.89% 0.89% 0.89% Property expense ratio~ 0.31% 0.31% 0.29% Real estate expense ratio % 1.18% Direct transaction costs***# 0.00% 0.00% 0.16% Prices Highest unit price Lowest unit price ~ Property expenses are separate from fund operating charges. They represent the costs associated with property assets. The figure for property expenses should be combined with the operating charges to create a Real Estate Expense Ratio (REER) when comparing property funds. ** The operating charges include all costs borne by the Fund, except for direct transaction costs. *** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. Direct transaction costs, where expressed as a percentage of average NAV, reflect an equivalent annual period. **** The operating charges percentage shows the annualised operating expenses of the unit class as a percentage of the average net asset value of the class over the same period. + The performance figures are calculated by taking the value of the unit class per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report. # Transaction costs in the Feeder Fund relate to the underlying class in the PAIF. ## Launched on the 18 March ^ The pence per unit values relate to the period from 18 March to 31 December 2016 reflecting a partial year. Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 12

16 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Comparative Tables (Continued) 30 June December December 2016 pence per unit pence per unit pence per unit Institutional S accumulation Change in net assets per unit Opening net asset value per unit ^^ Return before operating charges* Operating charges** (0.20) (0.39) (0.02)^^^ Property charges~ (0.08) (0.15) (0.01)^^^ Return after operating charges* Distributions (0.90) (1.68) (0.06) Retained distributions on accumulation unit Closing net asset value per unit * after direct transaction costs of:***# Performance + Return after charges 2.86% 7.28% 0.56% Other information Closing net asset value ( 000) 2, Closing number of units 4,029, ,045 2,200 Operating charges**** 0.72% 0.72% 0.72% Property expense ratio~ 0.31% 0.31% 0.29% Real estate expense ratio 1.03% 1.03% 1.01% Direct transaction costs***# 0.00% 0.00% 0.16% Prices Highest unit price Lowest unit price ~ Property expenses are separate from fund operating charges. They represent the costs associated with property assets. The figure for property expenses should be combined with the operating charges to create a Real Estate Expense Ratio (REER) when comparing property funds. ** The operating charges include all costs borne by the Fund, except for direct transaction costs. *** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. Direct transaction costs, where expressed as a percentage of average NAV, reflect an equivalent annual period. **** The operating charges percentage shows the annualised operating expenses of the unit class as a percentage of the average net asset value of the class over the same period. + The performance figures are calculated by taking the value of the unit class per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report. # Transaction costs in the Feeder Fund relate to the underlying class in the PAIF. ^^ Launched on 15 December ^^^ The pence per unit values relate to the period from the 15 December to 31 December reflecting a partial year. 13 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

17 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Comparative Tables (Continued) 30 June December December 2016 pence per unit pence per unit pence per unit Institutional A accumulation++ Change in net assets per unit Opening net asset value per unit ## Return before operating charges* Operating charges** (0.41) (0.80) (0.61)^ Property charges~ (0.08) (0.14) (0.11)^ Return after operating charges* (0.68) Distributions (0.73) (1.70) (1.41) Retained distributions on accumulation unit Redemption value at 7 June 2018 (53.51) Closing net asset value per unit * after direct transaction costs of:***# Performance + Return after charges 2.16% 6.20% (1.36)% Other information Closing net asset value ( 000) 1 1 Closing number of units 2,398 2,398 Operating charges**** 1.59% 1.59% 1.59% Property expense ratio~ 0.31% 0.31% 0.29% Real estate expense ratio 1.90% 1.90% 1.88% Direct transaction costs***# 0.00% 0.00% 0.16% Prices Highest unit price Lowest unit price ~ Property expenses are separate from fund operating charges. They represent the costs associated with property assets. The figure for property expenses should be combined with the operating charges to create a Real Estate Expense Ratio (REER) when comparing property funds. ** The operating charges include all costs borne by the Fund, except for direct transaction costs. *** The direct transaction costs are made up of; fees and commissions paid to agents, advisers, brokers and dealers, levies by regulatory agencies and securities exchanges as well as transfer taxes and duties. In line with the requirements of the 2014 SORP for authorised funds, direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. Direct transaction costs, where expressed as a percentage of average NAV, reflect an equivalent annual period. **** The operating charges percentage shows the annualised operating expenses of the unit class as a percentage of the average net asset value of the class over the same period. + The performance figures are calculated by taking the value of the unit class per the financial statements compared to the value per the financial statements in the prior year. This figure may differ from the performance figure quoted in the Investment Report.. # Transaction costs in the Feeder Fund relate to the underlying class in the PAIF. ## Launched on the 18 March ^ The pence per unit values relate to the period from 18 March to 31 December 2016 reflecting a partial year. ++ Unit class closed on 07 June Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 14

18 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Portfolio Statement As at 30 June 2018 (Unaudited) Market Percentage value of total Holding Investment '000 net assets Collective Investment Schemes (99.84%) 1,480, ,168,011,498 Standard Life Investments UK Real Estate Fund (Feeder Accumulation Shares) 1,480, Total Investment assets 1,480, Net other assets 3, Total Net Assets 1,484, All investments are regulated collective investment schemes within the meaning of the FCA rules unless otherwise stated. The percentage figures in brackets show the comparative holding as at previous year end. 15 Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

19 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Financial Statements Statement of Total Return for the period of six months to 30 June 2018 (unaudited) 30 June June Income: Net capital gains 21,415 22,399 Revenue 28,500 28,701 Expenses (4,611) (4,902) Interest payable and similar charges (1) (2) Net revenue before taxation 23,888 23,797 Taxation (4,205) (4,645) Net revenue after taxation 19,683 19,152 Total return before distributions 41,098 41,551 Distributions (24,293) (24,054) Change in net assets attributable to unitholders from investment activities 16,805 17,497 Statement of Change in Net Assets Attributable to Unitholders for the period of six months to 30 June 2018 (unaudited) 30 June June Opening net assets attributable to unitholders 1,478,197 1,618,054 Amounts receivable on the issue of units 50,638 42,044 Amounts payable on the cancellation of units (86,327) (207,538) (35,689) (165,494) Dilution adjustment 417 1,818 Change in net assets attributable to unitholders from investment activities (see above) 16,805 17,497 Retained distribution on accumulation units 24,281 23,870 Closing net assets attributable to unitholders 1,484,011 1,495,745 Comparative information is provided for the statement of change in net assets attributable to Unitholders. Since this information is for the prior interim period, the net assets at the end of that period do not correspond to the net assets at the start of the current period. Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 16

20 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Financial Statements (Continued) Balance Sheet as at 30 June 2018 (unaudited) 30 June June Assets: Fixed assets: Investment assets 1,480,838 1,475,816 Current assets: Debtors 16,158 4,718 Cash and bank balances 1, ,888 4,718 Total assets 1,498,726 1,480,534 Liabilities: Creditors (14,715) (1,747) Bank overdrafts 0 (590) Total liabilities (14,715) (2,337) Net assets attributable to unitholders 1,484,011 1,478, Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

21 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Accumulation Feeder Fund Distribution Tables (Continued) Retail accumulation Ex date Classification Franked Unfranked Net income Equalisation Distribution Prior year Pay date of holding % % pence per unit pence per unit pence per unit pence per unit January 01/02/18 Group /02/18 Group February 01/03/18 Group /03/18 Group March 01/04/18 Group /04/18 Group April 01/05/18 Group /05/18 Group May 01/06/18 Group /06/18 Group June 01/07/18 Group /07/18 Group Institutional accumulation Ex date Classification Franked Unfranked Net income Equalisation Distribution Prior year Pay date of holding % % pence per unit pence per unit pence per unit pence per unit January 01/02/18 Group /02/18 Group February 01/03/18 Group /03/18 Group March 01/04/18 Group /04/18 Group April 01/05/18 Group /05/18 Group May 01/06/18 Group /06/18 Group June 01/07/18 Group /07/18 Group Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 18

22 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Accumulation Feeder Fund Distribution Tables (Continued) Standard Life accumulation Ex date Classification Franked Unfranked Net income Equalisation Distribution Prior year Pay date of holding % % pence per unit pence per unit pence per unit pence per unit January 01/02/18 Group /02/18 Group February 01/03/18 Group /03/18 Group March 01/04/18 Group /04/18 Group April 01/05/18 Group /05/18 Group May 01/06/18 Group /06/18 Group June 01/07/18 Group /07/18 Group Standard Life B accumulation Ex date Classification Franked Unfranked Net income Equalisation Distribution Prior year Pay date of holding % % pence per unit pence per unit pence per unit pence per unit January 01/02/18 Group /02/18 Group February 01/03/18 Group /03/18 Group March 01/04/18 Group /04/18 Group April 01/05/18 Group /05/18 Group May 01/06/18 Group /06/18 Group June 01/07/18 Group /07/18 Group Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements

23 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Accumulation Feeder Fund Distribution Tables (Continued) Standard Life A accumulation Ex date Classification Franked Unfranked Net income Equalisation Distribution Prior year Pay date of holding % % pence per unit pence per unit pence per unit pence per unit January 01/02/18 Group /02/18 Group February 01/03/18 Group /03/18 Group March 01/04/18 Group /04/18 Group April 01/05/18 Group /05/18 Group May 01/06/18 Group /06/18 Group June* 01/07/18 Group /07/18 Group * Unit class closed 07 June Platform 1 accumulation Ex date Classification Franked Unfranked Net income Equalisation Distribution Prior year Pay date of holding % % pence per unit pence per unit pence per unit pence per unit January 01/02/18 Group /02/18 Group February 01/03/18 Group /03/18 Group March 01/04/18 Group /04/18 Group April 01/05/18 Group /05/18 Group May 01/06/18 Group /06/18 Group June 01/07/18 Group /07/18 Group Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements 20

24 Standard Life Investments UK Real Estate Accumulation Feeder Fund Interim Report & Financial Statements Accumulation Feeder Fund Distribution Tables (Continued) Institutional S accumulation Ex date Classification Franked Unfranked Net income Equalisation Distribution Prior year Pay date of holding % % pence per unit pence per unit pence per unit pence per unit January 01/02/18 Group /02/18 Group February 01/03/18 Group /03/18 Group March 01/04/18 Group /04/18 Group April 01/05/18 Group /05/18 Group May 01/06/18 Group /06/18 Group June 01/07/18 Group /07/18 Group Institutional A accumulation Ex date Classification Franked Unfranked Net income Equalisation Distribution Prior year Pay date of holding % % pence per unit pence per unit pence per unit pence per unit January 01/02/18 Group /02/18 Group February 01/03/18 Group /03/18 Group March 01/04/18 Group /04/18 Group April 01/05/18 Group /05/18 Group May 01/06/18 Group /06/18 Group June* 01/07/18 Group /07/18 Group * Uni class closed on 07 June Standard Life Investments UK Real Estate Trust Interim Report & Financial Statements