Invista Foundation Property Trust Limited

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1 Invista Foundation Property Trust Limited Interim Results Presentation Duncan Owen Nick Montgomery November 2010

2 Invista corporate overview Interim results executive summary Market overview Financials Property portfolio Summary 2

Overview post LBG Specialist real estate investment manager

Luxembourg and Paris A proactive asset manager Strong

valued clients In-house research and specialist asset managers

3 Overview post LBG Specialist real estate investment manager Focussed in UK and Western Europe Offices in London, Guernsey, Luxembourg and Paris A proactive asset manager Strong performance track-record Stable platform focussed on core highly valued clients In-house research and specialist asset managers Corporate situation progressing well Factsheets for illustrative purposes only 3

Invista Foundation Property Trust ( IFPT ) Team structure

Andrew MacDonald* Chris Ludlam* Finance and Accounting Fund and

Retail Team Specialist Industrial Team Specialist Office Team

4 Invista Foundation Property Trust ( IFPT ) Team structure Duncan Owen* Lead Fund Manager Mel Knatchbull* Nick Montgomery* Andrew MacDonald* Chris Ludlam* Finance and Accounting Fund and Asset Manager Debt and joint ventures Corporate Specialist Retail Team Specialist Industrial Team Specialist Office Team Research Team * Denotes member / attendee of IFPT Investment Committee 4

5 Invista track record and performance Strong track record of delivering outperformance across all sectors Over 70% of AUM meeting or outperforming benchmarks in 2009 All funds have client approved benchmarks Majority are Investment Property Databank ( IPD ) Benchmarks calculated independently by IPD 100% 90% 80% 70% 60% 50% 40% 30% Investment Performance - AUM outperforming benchmarks 20% 10% 0% Source: Source: Invista, IPD, MSS Real Estate, FTSE EPRA/NAREIT Figures represent 3 years ended 31 December Note: The publication deadline for this report typically precedes the release of benchmark returns for the most recently completed calendar year for two of the Invista funds. As a result, the published Invista fund performance figures for 2009 may yet be revised upwards or downwards; similarly, the performance figures for 2008 are now complete, given the subsequent receipt of benchmark returns since the publication of the previous Annual Report. * Not all funds under management are listed, only those where benchmarks are available Sustained outperformance 5

6 Snapshot as at 30 June 2010 HBOS Funds Core Funds 8 funds; AUM 2.4bn No debt Low risk Funds managed for HBOS Clerical Medical, Halifax etc. Separate Accounts Core Plus 4 funds; AUM 1.3bn Some modest debt Separate accounts managed for institutional clients St. James s Place ( SJP ) etc. Collective Investor Funds Value Add and Opportunistic 11 funds; AUM 1.7bn Specialist investment vehicles Significant growth Invista branded funds IFPT, IERET, etc. AUM and Revenue Breakdown six months to 30 June bn HBOS Funds Separate Accounts Collective Investor Funds six months to 30 June m HBOS Funds Separate Accounts Collective Investor Funds 28% 30% 45% 57% 13% 27% 6

7 Assets under management Country Assets Value UK 335* 4.4bn France m Germany 6 175m Belgium 5 36m Spain 4 54m Netherlands 2 17m Czech Republic 1 9m Poland 1 6m Other 2 24m Woodlands Singapore 3 18m Hong Kong 2 38m Total bn Europe Assets Bukit Batok Invista offices Source: Invista, portfolio valuation as at 31 December 2009 * Excludes c.1,700 residential units in the UK 7

8 Invista corporate overview Interim results executive summary Market overview Financials Property portfolio Summary 8

9 Summary results to 30 September 2010 NAV of 48.6 pence per share ( pps ) vs. NAV as at 31 March 2010 of 52.4 pps 12.3m of capital raised via a tap issuance of 32.3m new shares in August Adjusting for capital raised, NAV declined 2.5 pps or 4.9% pps over the period Shareholders received dividends of 3.52 pps over the period NAV total return of -1.5% over the period Total assets of 398.2m (31/03/2010: 387.6m) Net assets of 172.9m (31/03/2010: 169.5m) Profit before tax of 4.1m EPS (basic and diluted) of 1.0pps Marked to market swap value of m or 9.1 pps (31/03/2010: m or 8.2 pps) 9

10 Update post tap issuance Strong balance sheet with an overall net loan to value ( LTV ) of 37.8% Main strategic focus on growing income and dividend cover We are now identifying more investment opportunities at attractive prices: Acquired office in Edinburgh for 8.05m reflecting a yield of 14% Further high yielding opportunities being considered Progress made with identified value enhancing asset management initiatives and new lettings, but long lead-in time in current economic climate Progress made on joint venture investments with further potential value enhancement over the short to medium term Long term income improving in line with strategy 10

11 Underlying direct portfolio performance One, three and five years to 30 September 2010 IPD Sector IFPT Total Return (%) IPD Total Return (%) Relative (%) Period One Year Three Years Five Years* One Year Three Years Five Years * One Year Three Years Five Years * All Retail (+ Others) All Offices All Industrials All Sectors +19.1* * Increases to 20.1% including joint ventures IPD Sector IFPT Rental Value Growth (%) IPD Rental Value Growth (%) Relative (%) Period One Year Three Years Five Years * One Year Three Years Five Years * One Year Three Years Five Years * All Retail All Offices All Industrials All Sectors Source: Investment Property Databank ( IPD ) direct property portfolio analysis Underperformance over the last six months due to low exposure to prime trophy assets 11

12 Invista corporate overview Interim results executive summary Market overview Financials Property portfolio Summary 12

13 Market Overview Market now 16% above the trough in July 2007 but rate of IPD Monthly Index capital increases slowed sharply with significant divergences across the market Recovery notable for disconnection between: Falling rents and rising capital values Prime vs. secondary South East vs. Rest of UK Recent slowdown in the rate of growth due to: Weakening institutional and retail fund demand Potential consequences of Comprehensive Spending Review Increasing bank disposals High yield premium compared to other asset classes likely to provide support to prime values, particularly with long term, defensive qualities Prime significantly outperformed secondary but yields now too low in fashionable sectors Average IPD rental values -12.3% from peak in April rate of decline slowing but focus of growth in Central London Central London the best performing sector but negative net absorption Bank and other forced sales now providing evidence of real trading price for secondary this will create more opportunities 13

14 UK commercial property market yields 10% 9% 8% 7% 6% 5% 4% 3% Oct % 6.04% Oct % 5.35% Oct % 4.66% Oct % 4.73% Oct % 6.29% Oct % 7.47% 2% 1% 0% Oct % 6.41% Apr-10 Jul-10 Oct-10 Equivalent yield Initial yield 5-yr swap rate 14 Swap rate, yield Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Source: Invista, IPD, Thomson Datastream

15 UK annual total returns by yield type 12 months to end September 2010 Std Retail High yield, 14.7% Low yield, 23.1% Shopping Centre Retail Warehouse Central London Office Rest SE Office Rest UK Office Industrial High yield, 1.6% High yield, 4.7% High yield, 10.2% High yield, 18.9% Low yield, 23.1% High yield, 30.7% Low yield, 28.8% High yield, 30.1% Low yield, 30.3% Low yield, 18.0% Low yield, 19.6% Low yield, 21.7% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 34% Source: IPD Continued decoupling of prime and secondary performance 15

16 UK commercial property in nominal terms Yield impact Rental value growth Total return Long-term total return Long-term income return 40% 30% 20% 8.9% 10% 7.2% 0% -10% -20% -30% -40% -50% Source: IPD Monthly Index (Full history) 16 Quarterly annualised % Mar-87 Mar-88 Mar-89 Mar-90 Mar-91 Mar-92 Mar-93 Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10

17 Invista corporate overview Interim results executive summary Market overview Financials Property portfolio Summary 17

18 Net rental income 30 September September 2009 Six months to 30 September 2010 million million Rental Income Other Income Property operating expenses (1.3) (0.9) Net rental and related income million of disposals over the year reduced income 18

19 Profit and loss account 30 September September 2009 Six months to 30 September 2010 million million Net rental and related income Profit on disposal of investment property Expenses (3.0) (3.0) Net valuation profit/(loss) on investment property 1.8 (3.7) Net finance costs (5.5) (7.1) Joint venture gains Profit/(loss) before tax 4.1 (1.0) Taxation (0.7) (0.3) Profit/(loss) after tax 3.4 (1.3) Earnings per share (p) 1.0p (0.4p) 19

20 Balance sheet 30 September March 2010 million million Investment Properties Investments in joint ventures Total non current assets Trade and other receivables Cash Total Assets Current liabilities & other payables (10.5) (9.7) Debt (182.3) (182.0) Hedge reserve (32.5) (26.5) Net Asset Value NAV (pence per share) 48.6p 52.4p Adjusted NAV (pence per share) 48.6p 51.1p Shares in issue (number in millions)

21 Annualised income statement Annualised income based on September 2010 results Adjustments for contracted transactions Adjusted Annualised Income million million million Rental income Other income Property expenses (2.0) (0.2) (2.2) Net rental income Other expenses (5.5) (5.5) Finance costs (11.0) (11.0) Profit (pre tax) Dividend (12.5) (12.5) Dividend cover (pre-tax) 31% 49% Including the West Bromwich acquisition, due to completion August 2011, dividend cover increases to over 60% 21

22 Financing as at 30 September 2010 Amount ( m) Fixed rate (%) Margin (%) Total interest rate (%) Swap expiry M2M 30/09/2010 ( m) M2M 31/03/2010 ( m) Loan /07/2014 (8.80) (7.50) Loan /07/2016 (23.70) (18.85) Loan total (32.50) (26.35) Liquidity facility* 11.2 LIBOR 0.66 LIBOR N/A N/A N/A * Liquidity facility has a neutral impact on NAV and is a standard feature in securitised loans Securitised loan matures in July 2014 Following transactions since the quarter end the net loan to value ( LTV ) is 37.8% Assumes cash of 49.2 m after transactions since the period end: 27.6 m in the security pool for property acquisitions and qualifying capital expenditure 21.6 m outside the security pool Following transactions since the quarter end the Interest Cover Ratio of 2X vs. covenant of 1.5X 22

23 Invista corporate overview Interim results executive summary Market overview Financials Property portfolio Summary 23

24 Property portfolio as at 30 September 2010 Including post period end activity Portfolio of 57 direct property assets totalling 328.6m Total annual rent 22.45m, reflecting a net initial yield of 6.46% Rent free periods expiring over calendar 2010 generates a further 0.24m p.a. Contracted asset management transactions add an additional 2.3m p.a. by 2012 Annual rental value 26.7m, reflecting a reversionary yield of 7.67% Average unexpired lease term of 8.5 years Portfolio void rate of 10.9%, falling to 8.4% when including letting under offer Delays implementing key asset management initiatives at Gate Centre, Brentford and Hinckley Committed to acquire an office building in West Bromwich pre-let to BT plc at 1.2m p.a. for 15 years with 3% annual uplifts, which should complete in August

25 Weightings as at 30 September 2010 Including post period end activity Sector Region Retail Office Other Retail Warehouse Industrial Central London Rest of South North & Scotland South East Excl. CL Midlands & Wales 5% 15% 15% 8% 24% 10% 16% 47% 14% 46% Source: Invista REIM Ltd as at 30 September 2010, post period end activity 25

26 Top ten properties and tenants Including post period end activity Top 10 Assets by Market Value* m Top 10 Tenants by Gross Annual Rent ** m Minerva House, London 8.20% Wickes Building Supplies Limited 4.50% Trafalgar Place, Brighton 7.20% Norwich Union Life and Pensions Ltd 4.20% Chuchway West, Salisbury 4.60% BUPA Insurance Services Limited 4.00% The Galaxy, Luton 4.30% Synovate Limited 3.90% Oxford Road, Uxbridge 4.30% Buckinghamshire New University 3.70% Olympic Office Centre, Wembley 3.70% Mott MacDonald Ltd 3.20% Reynard Business Park, Brentford 3.60% Recticel SA 3.00% Churchill Way, Basingstoke 3.30% The British Broadcasting Corporation 2.90% The Gate Centre, Brentford The Portergate, Sheffield 3.20% 3.10% Offices Retail Industrial Winkworth Sherwood LLP Irwin Mitchell LLP 2.70% 2.30% Source: Invista, Knight Frank valuation figures as at 30 September 2010 Recent acquisitions and disposals arguably enhance overall credit quality 26

27 Five Year rental profile 30 September 2010 Including post period end activity and Knight Frank valuation assumptions 29m 28m Reversionary rent (Knight Frank valuation) 29m 28m 27m Balance of reversion 27m Passing Rent 26m 25m 24m 23m 22m Other Alfreton Uxbridge Brighton West Brom London Allied Wembley and Norwich Edinburgh 26m 25m 24m 23m 22m 21m 21m 20m Passing rent (Sept 2010) 20m 19m Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 19m Source: Invista REIM, Knight Frank 27

Contracted acquisitions and asset management Edinburgh, South Gyle 173,000 sq ft secondary industrial estate on a six acre site valued at 11.85m as at 30 September 2010.

1% BBC pay 82% of the income and have exercised their break option effective April 2011 Strategy to pursue change of use from employment to residential.

significant value uplift if successful Exchanged contracts to acquire 84,750 sq ft multi-let office for 8.05m reflecting a net initial yield of 14%.

28 Contracted acquisitions and asset management Edinburgh, South Gyle 173,000 sq ft secondary industrial estate on a six acre site valued at 11.85m as at 30 September Property currently produces 0.86m p.a. reflecting a yield of 7.1% BBC pay 82% of the income and have exercised their break option effective April 2011 Strategy to pursue change of use from employment to residential. Pre-application submission made ahead of a full planning application during early 2011 Proposed development scheme comprises 240,000 sq ft in 215 units including flats and house Potentially significant value uplift if successful Exchanged contracts to acquire 84,750 sq ft multi-let office for 8.05m reflecting a net initial yield of 14%. Excellent car parking ratio of 1:380 per sq ft 80% let producing 1.19m p.a. to tenants including Lloyds (31% of income), Computacenter (21%), the Scottish Ministers (19.5%), and Zurich Assurance (17%) Average office rent of 17.1 per sq ft compared to a current market rent of 10 to 12 per sq ft Average unexpired lease term of five years with potential to add value by letting vacant space and extending leases Brentford, Reynards Business Park 28

29 Off-balance sheet Joint Ventures as at 30 September 2010 Merchant Property Unit Trust (19.5%) Portfolio of Travis Perkins properties let for 20 years with 3% p.a. rental uplifts received every five years NAV increased to 2.48m over the period, an increase of 0.2m or 9%. NAV depressed by 0.5m due to negative interest rate swap marked to market Portfolio valuation of 39.8m reflects an initial yield of 5.9%, increasing to a guaranteed 6.8% by 2013 Loan of 25.6m matures in September 2013 with swap matched to loan. Compliant with LTV and ICR Crendon Industrial Partnership (50%) Secondary 370,000 sq ft multi-let industrial estate with development land NAV increased to 0.96 m over the period, an increase of 0.43m or 81% Property valued at 24.6m reflecting an initial yield of 8% and a reversionary yield of 9% Loan of 26m matures in 2013 with a fixed rate. No LTV covenant and the ICR is 1.8X vs. covenant of 1.35X all surpluses going to amortisation Plantation Place, London EC3 (28.2%) Held at nil due to loan to value breach and total liabilities exceeding assets Current property valuation of 456m following an increase over the period of 31m or 7.3% Underlying property income well secured and compliant with ICR Outstanding net securitised debt of 432.1m with a negative interest rate swap market of m Loan matures in August 2013 with swap matched to loan term 29

30 Invista corporate overview Interim results executive summary Market overview Financials Property portfolio Summary 30

31 Summary NAV total return diluted by dividend shortfall and negative swap marked to market Tap issuance successfully completed with strong investor support Progress being made but some delays with key initiatives Outlook We are now identifying more investment opportunities at attractive prices We can buy assets with strong fundamentals offering high levels at income The income return from UK commercial property is beginning to look increasingly attractive 31

32 Important notice We would also like to point out that: Invista Real Estate Investment Management Limited ("Invista") confirms that reasonable skill and care has been used in the preparation of this presentation and any forecasts expressed within it. Notwithstanding this warranty, Invista shall not be liable for any loss of profit, business, revenues or any special indirect or consequential damage of any nature whatsoever or loss of anticipated saving or for any increased costs sustained by the attendee or his servants or agents in any way, whether arising in any way directly or indirectly as a result of reliance on this model or of any error or defect in this presentation. This presentation and associated information is the property of Invista which reserves all intellectual property rights in it. This document is not intended for, nor is it directed at any person resident in a jurisdiction in which the sale of the Fund s interests would be restricted by law or regulation. Nothing in this document is intended to constitute an offer of the Fund s interests. It is the responsibility of the recipients of this document to ensure that it is possible for them to acquire interests in the Fund without local laws or regulations being infringed. This document is exempt from the general restriction (contained in section 21 of the Financial Services and Markets Act 2000) on the communication of invitations or inducements to engage in investment activity on the grounds that, to the extent that it is communicated in the UK, the communication is made by Invista Real Estate Investment Management Limited to persons falling within one of the categories set out below: (a) a person having professional experience in matters relating to investments, within the meaning of article 14 of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001, including a person whose ordinary activities involve him in investing in shares for the purposes of a business carried on by him; or (b) a high net worth body within the meaning of article 22 of the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001, including a corporation, unincorporated association or partnership with net assets of at least 5 million and the trustee of a trust comprising cash and investment assets of at least 10 million. Communication of this document to any person in the United Kingdom, other than a person falling within one of the categories described above, is unauthorised and may constitute a criminal offence. All features in this pack are current at the time of publication but may be subject to change in the future. Unless otherwise stated, the source of information is Invista's. Any forecast, opinion, projection or target where provided is indicative only, is not guaranteed in any way and may change in the future. No modifications or amendments to this presentation may be made without the prior permission of Invista and this document or copies of it may not be distributed to recipients. Depending on the investor s currency of reference, currency fluctuations may adversely affect the value of investments and the income there from. Past performance is not a guide to future performance and the past performance of property funds is not always represented by the performance of the property market as a whole. The value of an investment as well any related income may go down as well as up, particularly in the short term. The value of an investment and any related income may fluctuate and cannot be guaranteed. Property funds will not contribute diversification where investors already have a substantial proportion of their investments in property. The value of property is a matter of a valuer s opinion rather than one of fact. Movements in the value of property funds will be amplified by any gearing within the fund and its underlying investments. There is no guarantee that the price of the fund will fully reflect its underlying net asset value. Invista Real Estate Investment Management Limited, authorised and regulated by the Financial Services Authority. Registered in England and Wales. Registered Number Registered office Exchequer Court, 33 St.Mary Axe, London, EC3A 8AA, United Kingdom. 32

Invista Foundation Property Trust Limited

Invista Foundation Property Trust Limited Interim Results Presentation Duncan Owen Nick Montgomery Clare Sutcliffe 27 November 2009 Agenda Executive summary UK property market Finance Property portfolio