Annual Report. Standard Life Investments UK Real Estate Funds ICVC

Transcription

1 Annual Report Standard Life Investments UK Real Estate Funds ICVC For the year ended 31 December 2017

2

3 Contents 1 Company Information* 3 Statement of Authorised Corporate Director s Responsibilities 4 Authorised Corporate Director s (ACD s) Report* 5 Statement of Depositary s Responsibilities & Depositary s Report to Shareholders 6 Independent Auditor s Report to the Shareholders of the Standard Life Investments UK Real Estate Fund ICVC 8 The Registrar 9 Investment Report* 10 Comparative Tables 21 Portfolio Statement* 24 Financial Statements 27 Notes to the Financial Statements 41 Distribution Tables 50 Alternative Investment Fund Disclosures (unaudited) * These items comprise the Manager s Report for the purposes of the rules contained in the Collective Investment Schemes sourcebook ( the Sourcebook ).

4 Company Information Launch Date 3 May 2014 Standard Life Investments UK Real Estate Funds ICVC (the Company ) is an investment company with variable capital, having its head office in Scotland and with registered number IC989 and authorised by the Financial Conduct Authority with effect from 6 March The Company has one Fund, the Standard Life Investments UK Real Estate Fund (the Fund ). The Company is classed as a non-ucits retail scheme ( NURS ). The Company is also a UK AIF for the purposes of Investment Funds Sourcebook (FUND), and is intended to be a property authorised investment fund ( PAIF ) at all times. The holders of shares in the Company are not liable for the debts of the Company. Reporting dates Interim Annual XD dates Interim Annual Interim payment dates Accumulation Income Annual payment dates Accumulation Income Objective 30 June 31 December First day of each month 31 December Last day of each month Last day of each month 15 February 15 February It is intended that the Fund will be a PAIF at all times, and, as such, its investment objective is to carry on Property Investment Business and to manage cash raised for investment in the Property Investment Business. The objective of the Fund is to invest primarily in UK commercial property to provide a combination of income and capital growth over the long term. The Fund may also invest in other property related assets (including property related transferable securities and property related collective investment schemes), money-market instruments, deposits, money-market related collective investment schemes and government and public securities. The Fund may also invest in derivatives and forward transactions but only for the purposes of hedging (which includes efficient portfolio management), not for the purpose of meeting the investment objective. Risk Profile Investors should be aware of the following risk factors: (a) Investment property is less liquid than other asset classes such as bonds or equities. Selling property can be a lengthy process so investors in the Fund should be aware that they may not be able to sell their investment when they want to; (b) Investment property transaction charges are higher than those which apply in other asset classes. Investors should be aware that a high volume of transactions would have a material impact on Fund returns; and (c) Property valuation is a matter of judgement by an independent valuer and is therefore a matter of the valuer s opinion rather than fact. Fund Changes In the period under review, investor communications have been issued with regard to the following: Merger of Aberdeen Asset Management and Standard Life Prior to 14 August 2017, the manager, Standard Life Investments (Mutual Funds) Limited and the Investment Adviser, Standard Life Investments Limited, were subsidiaries of Standard Life Plc. On 14 August 2017, Standard Life Plc and Aberdeen Asset Management Plc, completed a merger to form Standard Life Aberdeen Plc. Policy The Fund will aim to diversify risk by seeking exposure to three main sectors: Retail (e.g. shopping centres, retail warehouses, standard shops, supermarkets and department stores); Offices (e.g. standard offices and business parks); and (e.g. standard industrial estates and distribution warehousing). In addition, the Fund may also gain exposure to other property sectors (e.g. leisure parks, restaurants, pubs, hotels, student accommodation and residential). The Fund will seek geographic diversification across the UK amongst properties held. 1 Standard Life Investments UK Real Estate Funds ICVC

5 Company Information (Continued) Standard Life Investments UK Real Estate Funds ICVC Head Office Director Authorised Corporate Director (ACD) Directors of the ACD Secretary of the ACD 1 George Street Edinburgh EH2 2LL The Authorised Corporate Director (ACD) is Standard Life Investments (Mutual Funds) Limited which is the sole director and is authorised and regulated by the Financial Conduct Authority for investment business Standard Life Investments (Mutual Funds) Limited Registered Office 1 George Street Edinburgh EH2 2LL A.S. Acheson, BA (Hons), ACA S. Campell, MA ACA S.A. Fitzgerald, BA (Hons), ACA J. Lowe L. Scott BA, CA D.E. Thomas, BA, CA S.R. Wemyss H.S. Kidd, ACIS Independent Auditor Registrar Investment Adviser Standing Independent Valuers KPMG LLP Saltire Court 20 Castle Terrace Edinburgh EH1 2EG *Prior to 1 January 2017 the Independent Auditor was PricewaterhouseCoopers LLP Standard Life Investments (Mutual Funds) Limited 1 George Street Edinburgh EH2 2LL Standard Standard Life Investments Life Investments CBRE UK Real Limited Estate Funds ICVC Limited St Martin s Court 1 George Street 10 Paternoster Row Edinburgh London EH2 2LL EC4M 7HP Jones Lang LaSalle Limited 30 Warwick Street London W1B 5NH Standard Life Investments UK Real Estate Funds ICVC 2

6 Statement of Authorised Corporate Director s Responsibilities The Collective Investment Schemes sourcebook published by the FCA, ( the COLL Rules ) require the Authorised Corporate Director ( ACD ) to prepare financial statements for each annual accounting period which give a true and fair view of the financial position of the Company and of the net income and net gains or losses on the property of the Company for the period. The ACD is responsible for the management of the Company in accordance with its Instrument of Incorporation, the Prospectus and the COLL Rules. In preparing the financial statements the ACD 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; keeping proper accounting records which enable it to demonstrate that the financial statements as prepared comply with the above requirements; assessing the Company 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 Company or its sub-funds 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. 3 Standard Life Investments UK Real Estate Funds ICVC

7

8 Statement of the Depositary s Responsibilities in Respect of the Scheme and Report of the Depositary to the Shareholders of the Standard Life Investments UK Real Estate Funds ICVC ( the Company ) for the year ended 31 December 2017 The Depositary is responsible for the safekeeping of all the property of the Company which is entrusted to it and ensuring proper registration of tangible moveable property, and for the collection of income arising from all such scheme property. It is the duty of the Depositary to take reasonable care to ensure that the Company is managed and operated by the Authorised Corporate Director in accordance with the Financial Conduct Authority Collective Investment Schemes Sourcebook ( the Sourcebook ), the Open-Ended Investment Companies Regulations 2001 (SI 2001/1228) (the OEIC Regulations), the Company s Instrument of Incorporation, and the Prospectus, as appropriate, concerning: the pricing of and dealing in Shares in the Company; the application of income of the Company; and the investment portfolio and borrowing activities of the Company. Having carried out procedures and enquiries considered duly necessary to discharge our responsibilities as Depositary of the Company, based on information and explanations provided to us, we believe that, in all material respects, the Company, acting through the Authorised Corporate Director: (i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Company s shares and the application of the Company s income in accordance with the Sourcebook, and where applicable, the OEIC regulations, the Company s Instrument of Incorporation, and the Prospectus; (ii) has observed the investment and borrowing powers and restrictions applicable to the Company; and (iii) has, otherwise, ensured the proper operation of the Company. Citibank Europe plc UK Branch, London 30 April Standard Life Investments UK Real Estate Funds ICVC

9 Independent Auditor s Report to the Shareholders of Standard Life Investments UK Real Estate Funds ICVC (the Company ) Opinion We have audited the financial statements of the Company for the year ended 31 December 2017 which comprise the Statement of Total Return, the Statement of Changes in Net Assets Attributable to Shareholders, the Balance Sheet, Cash Flow Statement and the Related Notes and Distribution Tables for the Company and the accounting policies set out on pages 24 to 38. In our opinion the financial statements: give a true and fair view, in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, of the financial position of the Company as at 31 December 2017 and of the net revenue and the net capital gains on the property of the Company for the year then ended; and have been properly prepared in accordance with the Instrument of Incorporation, the Statement of Recommended Practice relating to Authorised Funds, and the COLL Rules. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) ( ISAs (UK) ) and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard. We have received all the information and explanations which we consider necessary for the purposes of our audit and we believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Going concern We are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least twelve months from the date of approval of the financial statements. We have nothing to report in these respects. Other information in our opinion the information given in the Authorised Corporate Director s Report is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where under the COLL Rules we are required to report to you if, in our opinion: proper accounting records for the Company have not been kept; or the financial statements are not in agreement with the accounting records. Authorised Corporate Director s (Standard Life Investments (Mutual Funds) Limited) responsibilities As explained more fully in their statement set out on page 3 the Authorised Corporate Director is responsible for: the preparation of financial statements which give a true and fair view; 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; assessing the Company s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Company or its sub-funds or to cease operations, or have no realistic alternative but to do so. Auditor s responsibilities Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor s report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. A fuller description of our responsibilities is provided on the FRC s website at The Authorised Corporate Director is responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work: we have not identified material misstatements in the other information; and Standard Life Investments UK Real Estate Funds ICVC 6

10 Independent Auditor s Report to the Shareholders of the Standard Life Investments UK Real Estate Fund ICVC (Continued) The purpose of our audit work and to whom we owe our responsibilities This report is made solely to the Company s shareholders, as a body, in accordance with Rule of the Collective Investment Schemes sourcebook ( the COLL Rules ) issued by the Financial Conduct Authority under the Open-Ended Investment Companies Regulations Our audit work has been undertaken so that we might state to the Company s shareholders those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company s shareholders as a body, for our audit work, for this report, or for the opinions we have formed. Hugh Harvie (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants Saltire Court 20 Castle Terrace Edinburgh EH1 2EG 30 April Standard Life Investments UK Real Estate Funds ICVC

11 The Registrar of the Company The ACD is the Registrar of the Standard Life Investments UK Real Estate Fund. The ACD has delegated certain aspects of the registrar s operational duties to DST Financial Services International Limited ("DST Limited"). Prior to 14 August 2017, DST Limited were known as International Financial Data Services Limited ( IFDS Limited ). The Registrar is responsible to the Depositary for the maintenance of a register of shareholders in the Fund. The register can be inspected free of charge at the offices of DST Limited at DST House, St Nicholas Lane, Basildon, Essex, SS15 5FS. Standard Life Investments UK Real Estate Funds ICVC 8

12 Investment Report UK Real Estate Fund a. Basis of preparation Market Background The financial statements have been prepared under the historical UK cost commercial basis, as modified real estate by recorded the revaluation positive of returns investments, during and 2017, in which accordance were stronger with the Statement than many of analysts Recommended originally Practice anticipated Financial at the Statements start of the of UK year. Authorised Supported Funds by a relatively issued by robust the Investment domestic economy, Management UK real Association estate recorded ( IMA ) in a May total 2014 return (the of 11.2%* SORP ), for the the year. Financial Reporting Standard 102 ( FRS102 ), the Financial Conduct Authority s Collective Investment Schemes Sourcebook There ( COLL ) was and a positive the Company s backdrop Instrument for real estate of Incorporation. the start of the year, including better-than-expected economic data and improved trading All of the volumes sub-funds in the have commercial been prepared real estate on a going market. concern Overseas basis investors with the exception were particularly of the below active, seven enticed funds. by The a combination below noted of six sub-funds weaker sterling are no and longer relative open pricing to investors, in comparative having redeemed markets. all At an shares all property in level, It is capital the intention growth increased to terminate quarter-on-quarter. the funds at a later date However, once there the residual were significant assets and variations liabilities between are settled. the main As a result the sectors, financial with statements industrial assets for these gaining funds significantly have been prepared more than on the a basis office other and retail than sectors. going concern. Income Prior returns year remained financial robust statements supported for these by healthy funds occupational were also prepared demand. on a basis other than going concern. Standard Performance Life in Investments the industrial Japanese sector was Equity driven Index by Tracker favourable Fund Standard supply/demand Life Investments dynamics and Overseas an improved Bond Index manufacturing Tracker Fund environment, as well as the ongoing structural shift to online Standard Life Investments Pacific Basin Equity Index Tracker Fund retailing increasing the demand for distribution hubs. The retail Standard sector continued Life Investments to experience UK Gilt a period Index Tracker of change Fund and Christmas Standard 2017 trading Life figures Investments further US illustrated Equity Index a polarisation Tracker Fund within the sector. Serviced office providers expanded over the period, partly Standard illustrating Life occupiers Investments desire European for flexible Equity leasing Index solutions. Tracker Fund The below noted sub-fund is no longer open to investors, having Performance redeemed all shares in It is the intention to terminate the fund The UK at Real a later Estate date Fund once returned the residual 7.06% assets over and the liabilities period, compared are settled. with a total As a return result of the 7.71% financial from statements the IA Commercial for these Property funds have Funds peer been group.** prepared on a basis other than going concern. Prior year financial statements were also prepared on a basis other than The going Fund s concern. underlying direct property assets provided a total return of 11.4% over 2017, compared to the Authorised Property Unit Trust Standard ( APUT )/Property Life Investments Authorised Emerging Investment Market Debt Fund Unconstrained ( PAIF ) MSCI APUT Fund Funds Benchmark total return of 10.9%. The Fund remains ahead For all funds of this prepared benchmark on over a basis one, other three than and going five years. concern In line noted with the above, market, no adjustments the Fund s industrial were required assets to provided the financial the strongest statements to performance, adjust assets or with liabilities performance to their in realisable South East values industrials or to provide for particularly liabilities arising robust. from the decision to terminate the funds. No liabilities have been recorded for costs of the terminations as the Investment intention is that Activity the Authorised Corporate Director will bear any such costs which may arise. Given continued economic and political uncertainty we maintained an The enhanced principal liquidity accounting buffer policies, during which the reporting have been period. applied We undertook consistently select throughout acquisitions the year, and are disposals set out aimed below. at enhancing the portfolio composition. Actively managing existing assets remained The financial a key statements focus, as have we sought been prepared to implement under initiatives the historical focused cost basis, on as income modified and by value the enhancement. revaluation of investments, and in accordance with the Financial Conduct Authority s Collective Purchases Investment during Schemes the Sourcebook. year included adding to the Fund s existing holding at the IO Centre, Sutton, by acquiring three adjoining tradecounter units for 4.3 million, which represented a net initial yield of 5.5%. We also bought 10 Cygnet Street, Shoreditch, London, for 12.2 million, which represented a net initial yield of 5.25%. The Cygnet Street asset is located adjacent to the Fund s existing Shoreditch holding and the purchase added a further two units, let to Pure Gym and Tri-Yoga. Over 50% of the long let income benefits from upwards-only rent reviews linked to inflation. In certain circumstances the ACD may apply a dilution adjustment on In terms subscriptions of sales, and in line redemptions with the aforementioned of shares. If applied, strategy, the we dilution sold: adjustment is paid to the fund. See Prospectus for further details. For the a Q year Park ended car park 31 in October Sheffield 2016 for 19.1 and 31 million October 2015 the Dilution adjustments have been shown separately in the Statement of Changes a Tesco in on Net Church Assets Street, Attributable Tiptree, to for Shareholders, 14.3 million previously they were included with Amounts receivable on issue of shares and a BMW dealership in Stockport, Greater Manchester, for 8.8 Amounts payable on cancellation of shares in the Statement of million Change in Net Assets Attributable to Shareholders. This is a change in presentation, Church Way, there Doncaster, have been for 2.2 no changes million to the financial position or financial performance of the fund as a result of the above. Chartist The prior Tower, year Newport, figures for in the 6.45 Financial millionstatements have been restated as a result of these new regulations. Please see Prior year restatement 85 Gray s note Inn Road, within London the notes for to 25.6 the financial million. statements of each sub-fund for further details. The disposal of Gray s Inn Road reduced the Fund s West End/Mid b. Town Revenue office exposure in line with our House View. I. Outlook Dividend and revenue Future is recognised Strategy when the securities are first quoted on an ex-dividend basis. UK real estate continues to provide an elevated yield compared II. with Interest other asset from classes fixed interest and market securities, values interest are now rate ahead swaps of and the level short-term they attained deposits before is the recognised Brexit upheaval on a daily in accruals Furthermore, basis. lending to the asset class remains prudent and liquidity is III. reasonable. Underwriting In the commission current environment, is recognised real as estate s part of steady the income and secure property income of should the Funds be the unless key it driver has been of returns. necessary Sentiment to take is up also all likely or part to drive of the the shares market underwritten in the short in term, which as case the political an and economic appropriate impact proportion associated is with deducted the UK s from withdrawal the cost of from those the European shares. Union evolves. IV. The Where retail sector stocks continues are received to face in lieu a series of cash of dividends headwinds the that value may of hold that back dividend recovery is in recognised weaker locations. in the gross Given revenue the backdrop of the Fund. of ongoing Where heightened enhanced economic scrip dividends uncertainty, are received investors the are value becoming of the more enhancement risk averse and is not better-quality recognised assets as revenue are once within again the broadly Funds but outperforming is recognised poorer-quality in capital. Any assets. ordinary Prime/good element quality of scrip assets dividends with received stronger is tenants treated are as likely revenue to provide and will the form best part opportunities of the in the weaker distribution. economic environment we anticipate further into V. Currently, Revenue around from 80% debt of securities the Fund s is accounted assets by value for on are an within effective the Neutral yield to basis Very in Heavy accordance classification with the on policy our real detailed estate below research (see team s effective three-year yield House below). View. We continue to analyse new investment opportunities that provide an attractive blend of highquality income and asset management initiatives. Finally, we will VI. Special dividends are treated as either revenue or capital depending on the nature of each individual case. continue to implement asset management strategies in order to VII. enhance Bank income interest and is recognised capital growth. on a receipts basis. c. *Source: Treatment MSCI s of IPD management UK Monthly expenses Property Index The **Source: ACD s IA/Morningstar/Standard periodic charges are charged Life to Investments; the revenue based property on UK of the Real Funds Estate (with Fund the (PAIF) exception Platform of 1 the shareclass; UK Equity Peer Income Group Unconstrained comprises of nine Fund comparable and the Global UK commercial REIT Fund which property make funds thein the charge IA Property to the Sector. capital property for distribution purposes). Handling charges are borne by the capital property of the Fund for distribution purposes. 9 Standard Life Investments UK Real Estate Funds ICVC

13 Comparative Table Disclosure 31 December December December 2015 pence per share pence per share pence per share Retail accumulation^ Change in net assets per share Opening net asset value per share Return before operating charges* Operating charges** (1.41) (1.49) (1.55) Property expenses # (0.33) (0.31) (0.22) Return after operating charges* 7.62 (1.00) 8.02 Gross distributions per accumulation share (4.14) (4.22) (3.93) Net retained distribution on accumulation shares Closing net asset value per share * after direct transaction costs Performance+ Return after charges 7.26% -0.94% 8.12% Other information Closing net asset value ( 000) 34,374 55, ,930 Closing number of shares 30,676,277 52,769, ,322,288 Operating charges **** 1.31% 1.41% 1.51% Property expenses ratio# 0.31% 0.29% 0.22% Real Estate Expense Ratio 1.62% 1.70% 1.73% Direct transaction costs *** 0.00% 0.16% 0.00% Prices Highest share price ^ Lowest share 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. ^ Previously Class A Accumulation. Dual priced to 18 March 2016, single swing price thereafter. As the convention for a dual priced fund is to take the highest published offer and lowest bid in a period, this has been used for periods before the 18th of March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. Standard Life Investments UK Real Estate Funds ICVC 10

14 Comparative Table Disclosure (Continued) 31 December December December 2015 pence per share pence per share pence per share Institutional accumulation^ Change in net assets per share Opening net asset value per share Return before operating charges* Operating charges** (0.92) (0.88) (0.78) Property expenses # (0.34) (0.31) (0.22) Return after operating charges * 8.27 (0.35) 8.90 Gross distributions per accumulation share (4.21) (4.25) (3.95) Net retained distribution on accumulation shares Closing net asset value per share * after direct transaction costs Performance+ Return after charges 7.77% -0.33% 8.99% Other information Closing net asset value ( 000) 371, , ,994 Closing number of shares 325,468, ,128, ,116,267 Operating charges **** 0.84% 0.83% 0.76% Property expenses ratio# 0.31% 0.29% 0.22% Real Estate Expense Ratio 1.15% 1.12% 0.98% Direct transaction costs *** 0.00% 0.16% 0.00% Prices Highest share price ^ Lowest share 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. ^ Previously Class I Accumulation. Dual priced to 18 March 2016, single swing price thereafter. As the convention for a dual priced fund is to take the highest published offer and lowest bid in a period, this has been used for periods before the 18th of March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. 11 Standard Life Investments UK Real Estate Funds ICVC

15 Comparative Table Disclosure (Continued) 31 December December December 2015 pence per share pence per share pence per share Retail Income^ Change in net assets per share Opening net asset value per share Return before operating charges* Operating charges** (1.27) (1.37) (1.50) Property expenses # (0.30) (0.29) (0.21) Return after operating charges* 6.77 (0.86) 7.33 Gross distributions per income share (3.65) (3.87) (3.79) Closing net asset value per share * after direct transaction costs Performance+ Return after charges 7.08% -0.85% 7.56% Other information Closing net asset value ( 000) 2,897 2,701 6,910 Closing number of shares 2,930,821 2,821,652 6,878,262 Operating charges **** 1.31% 1.40% 1.51% Property expenses ratio# 0.31% 0.29% 0.22% Real Estate Expense Ratio 1.62% 1.69% 1.73% Direct transaction costs *** 0.00% 0.16% 0.00% Prices Highest share price ^ Lowest share 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. ^ Previously Class A Income. Dual priced to 18 March 2016, single swing price thereafter. As the convention for a dual priced fund is to take the highest published offer and lowest bid in a period, this has been used for periods before the 18th of March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. Standard Life Investments UK Real Estate Funds ICVC 12

16 Comparative Table Disclosure (Continued) 31 December December December 2015 pence per share pence per share pence per share Institutional Income^ Change in net assets per share Opening net asset value per share Return before operating charges* Operating charges** (0.83) (0.82) (0.75) Property expenses # (0.31) (0.29) (0.21) Return after operating charges* 7.44 (0.33) 8.53 Gross distributions per income share (3.80) (3.96) (3.82) Closing net asset value per share * after direct transaction costs Performance+ Return after charges 7.62% -0.32% 8.78% Other information Closing net asset value ( 000) 82,112 87, ,565 Closing number of shares 81,128,646 89,625, ,492,381 Operating charges **** 0.84% 0.82% 1.51% Property expenses ratio# 0.31% 0.29% 0.22% Real Estate Expense Ratio 1.15% 1.11% 1.73% Direct transaction costs *** 0.00% 0.16% 0.00% Prices Highest share price ^ Lowest share 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. ^ Previously Class I Income. Dual priced to 18 March 2016, single swing price thereafter. As the convention for a dual priced fund is to take the highest published offer and lowest bid in a period, this has been used for periods before the 18th of March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. 13 Standard Life Investments UK Real Estate Funds ICVC

17 Comparative Table Disclosure (Continued) 31 December December 2016 pence per share pence per share Standard Life Income^ Change in net assets per share Opening net asset value per share Return before operating charges* Operating charges** (0.01) 0.00 Property expenses # (0.15) (0.14) Return after operating charges* 4.12 (0.04) Gross distributions per income share (1.89) (1.56) Closing net asset value per share * after direct transaction costs Performance+ Return after charges 8.52% -0.08% Other information Closing net asset value ( 000) 26,206 33,113 Closing number of shares 51,761,894 68,418,150 Operating charges **** 0.01% 0.01% Property expenses ratio# 0.31% 0.29% Real Estate Expense Ratio 0.32% 0.30% Direct transaction costs *** 0.00% 0.16% Prices Highest share price ^ Lowest share 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. ^ Launched 18 March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. Standard Life Investments UK Real Estate Funds ICVC 14

18 Comparative Table Disclosure (Continued) 31 December December 2016 pence per share pence per share Standard Life accumulation^ Change in net assets per share Opening net asset value per share Return before operating charges* Operating charges** (0.05) (0.03) Property expenses # (0.16) (0.14) Return after operating charges* 4.26 (0.04) Gross distributions per accumulation share (1.97) (1.58) Net retained distribution on accumulation shares Closing net asset value per share * after direct transaction costs Performance+ Return after charges 8.57% -0.09% Other information Closing net asset value ( 000) Closing number of shares 135,770 51,165 Operating charges **** 0.09% 0.09% Property expenses ratio# 0.31% 0.29% Real Estate Expense Ratio 0.40% 0.38% Direct transaction costs *** 0.00% 0.16% Prices Highest share price ^ Lowest share 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. ^ Launched 18 March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. 15 Standard Life Investments UK Real Estate Funds ICVC

19 Comparative Table Disclosure (Continued) 31 December December 2016 pence per share pence per share Platform 1 accumulation^ Change in net assets per share Opening net asset value per share Return before operating charges * Operating charges** (0.45) (0.34) Property expenses # (0.16) (0.14) Return after operating charges * 3.81 (0.46) Gross distributions per accumulation share (1.95) (1.60) Net retained distribution on accumulation shares Closing net asset value per share * after direct transaction costs of: Performance+ Return after charges 7.72% -0.92% Other information Closing net asset value ( 000) 24,132 37,814 Closing number of shares 45,574,242 76,523,317 Operating charges **** 0.87% 0.89% Property expenses ratio# 0.31% 0.29% Real Estate Expense Ratio 1.20% 1.18% Direct transaction costs *** 0.00% 0.16% Prices Highest share price ^ Lowest share 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. ^ Launched 18 March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. Standard Life Investments UK Real Estate Funds ICVC 16

20 Comparative Table Disclosure (Continued) 31 December December 2016 pence per share pence per share Platform 1 income^ Change in net assets per share Opening net asset value per share Return before operating charges * Operating charges** (0.44) (0.34) Property expenses # (0.15) (0.14) Return after operating charges* 3.66 (0.38) Gross distributions per income share (1.88) (1.56) Closing net asset value per share * after direct transaction costs Performance+ Return after charges 7.61% -0.76% Other information Closing net asset value ( 000) 22,831 16,762 Closing number of shares 45,809,249 34,876,553 Operating charges % 0.89% Property expenses ratio# 0.31% 0.29% Real Estate Expense Ratio 1.20% 1.18% Direct transaction costs **** 0.00% 0.16% Prices Highest share price ^ Lowest share 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. ^ Launched 18 March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. 17 Standard Life Investments UK Real Estate Funds ICVC

21 Comparative Table Disclosure (Continued) 31 December December December 2015 pence per share pence per share pence per share Feeder accumulation^ Change in net assets per share Opening net asset value per share Return before operating charges* Operating charges** (0.02) (0.01) - Property expenses # (0.36) (0.33) (0.28) Return after operating charges* Gross distributions per accumulation share (4.52) (4.54) (4.21) Net retained distribution on accumulation shares Closing net asset value per share * after direct transaction costs Performance+ Return after charges 8.65% 0.42% 10.82% Other information Closing net asset value ( 000) 1,475,816 1,615, ,396 Closing number of shares 1,200,398,164 1,417,777, ,777,450 Operating charges **** 0.01% 0.01% 0.01% Property expenses ratio# 0.31% 0.29% 0.22% Real Estate Expense Ratio 0.32% 0.30% 0.23% Direct transaction costs *** 0.00% 0.16% 0.00% Prices Highest share price ^ Lowest share 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. ^ Previously Class F Accumulation. Dual priced to 18 March 2016, single swing price thereafter. As the convention for a dual priced fund is to take the highest published offer and lowest bid in a period, this has been used for periods before the 18th of March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. Standard Life Investments UK Real Estate Funds ICVC 18

22 Comparative Table Disclosure (Continued) 31 December December December 2015 pence per share pence per share pence per share Feeder Income^ Change in net assets per share Opening net asset value per share Return before operating charges* Operating charges** (0.01) (0.01) 0.00 Property expenses # (0.33) (0.31) (0.22) Return after operating charges * Gross distributions per income share (4.10) (4.23) (4.07) Closing net asset value per share * after direct transaction costs Performance+ Return after charges 8.51% 0.59% 9.49% Other information Closing net asset value ( 000) 404, , ,854 Closing number of shares 368,454, ,528, ,368,126 Operating charges **** 0.01% 0.01% 0.01% Property expenses ratio# 0.31% 0.29% 0.22% Real Estate Expense Ratio 0.32% 0.30% 0.23% Direct transaction costs *** 0.00% 0.16% 0.00% Prices Highest share price ^ Lowest share 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. ^ Previously Class F Income. Dual priced to 18 March 2016, single swing price thereafter. As the convention for a dual priced fund is to take the highest published offer and lowest bid in a period, this has been used for periods before the 18th of March ** 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. Direct transaction costs are stated after the proportion of the amounts collected from dilution adjustments in relation to direct transaction costs. **** The operating charges percentage shows the annualised operating expenses of the share 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 share 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. 19 Standard Life Investments UK Real Estate Funds ICVC