Schroder Exempt Property Unit Trust Quarter Report

Transcription

1 30 September 2010 For professional investors only. Not suitable for retail clients. Schroder Exempt Property Unit Trust Quarter Report Schroder Property Investment Management Limited 31 Gresham Street, London EC2V 7QA. Registered No England Authorised and regulated by the Financial Services Authority

2 Contents Page Investment Objective and Performance 3 UK Property Market Commentary 4 Strategy 5 Key Activities Over the Quarter 6 Performance 8 Databank 9 Unitholder Information 12 Important Information 14 2

3 Investment Objective and Performance Trust Objective The investment objective of Schroder Exempt Property Unit Trust (SEPUT or the Trust) is to achieve a blend of income and capital growth for investors through investment in UK property. The Trust seeks to provide a return of 0.5% per annum (net of fees) above its benchmark (Investment Property Databank UK Pooled Property Fund Indices All Balanced Property Funds Median) over rolling three year periods. UK Property Market Commentary Broadly we expect that property yields will hold steady or drift slightly upwards over the next six to twelve months (currently the all property initial yield is around 6.4%, according to IPD). Schroders assumption is that there is no double-dip recession which could trigger a further fall in rental values. Given the likely inertia of both rental values and property yields over the next twelve months, we expect that capital values will be broadly stable or drift slightly lower, leaving total returns close to the rate of income return. The risk of any deviation from this is likely to be to the downside. In this environment, we continue to favour sectors where space is relatively affordable and which either provide a high rate of income return (e.g. industrials, South East offices), or where there is already evidence of a recovery in rental values (e.g. central London offices). Strategy Reduce exposure to indirectly owned investments, particularly those with gearing. Improve the quality and duration of portfolio income. Sell or manage out existing development opportunities. Key Activities Over the Quarter The purchase of Building 8, Chiswick Park was completed for an initial 6.5 million. 7 million of units in West End of London Property Unit Trust and 17 million of units in Hercules Unit Trust were sold. The entire holding in AH Medical plc was sold for 6 million. Performance Detailed performance commentary is provided on page 8 of this document. Q (%) 12m to 30 Sept 2010 (%) 3 yrs to 30 Sept 2010 (% pa) 5 yrs to 30 Sept 2010 (% pa) SEPUT IPD UK PPFI All Balanced Property Funds Median* IPD UK PPFI All Balanced Property Funds Weighted Average** Source: Investment Property Databank (IPD) UK Pooled Property Fund Indices (UK PPFI). Performance is calculated on a net asset value (NAV) to NAV price basis plus income distributed, compounded monthly, net of fees and based on an unrounded NAV per unit. *SEPUT s benchmark. The Trust s benchmark has changed over time and a composite for 10 years is available upon request. **This measure is widely adopted across the property industry. 3

4 UK Property Market Commentary Occupational Market The UK economy grew surprisingly quickly in the second quarter of 2010, expanding by 1.2% compared with the first quarter. However, although encouraging, we expect that the economy will lose some momentum through the second half of the year as the boost from re-stocking inventories fades and as cuts in government spending start to bite. While all property rental values now appear to have reached a trough 10-12% below their peak in 2008 (source: IPD Monthly Index), the sluggish outlook for the UK economy and the significant amount of vacant second-hand space in many markets suggests that rental values are unlikely to recover immediately. The principal exception is central London offices which have already seen a modest increase in rental values of 3% since the start of the year (source: IPD). To date, rents in the City have rebounded faster than the West End. In part, this reflects the continuing attractions of London as a global financial centre to foreign banks (e.g. China Construction Bank, Nomura, Standard Bank) and in part it reflects the fact that office rents are now relatively affordable by historical standards, following a 25% fall in estimated rental values in Investment Market Broadly we expect that property yields will hold steady or drift slightly upwards over the next six to twelve months (currently the all property initial yield is around 6.4%, according to IPD). Schroders assumption is that there is no double-dip recession which could trigger a further fall in rental values. As noted last quarter, while valuations of secondary property may come under pressure, there is still solid demand from institutions and other investors for good quality properties with secure incomes. Furthermore, the current gap of 3.5% between the all property initial yield and 10 year gilts offers some comfort. The attitude of property lenders will continue to affect the UK market for some years to come. The evidence to date is that those with the biggest loan books (RBS, Lloyds and Ireland s NAMA) have acted responsibly in working out or disposing of assets to shrink their balance sheets. Any change to their working practices could have a destabilising effect, particularly to secondary property where their exposure is concentrated. However, we do not expect any large sell off of these assets. Outlook The decline in property yields which lifted capital values and total returns through the second half of 2009 and first half of 2010 has broadly fizzled out, as investors wait for more definite signs of a sustained recovery in the economy and tenant demand. The exception is central London offices and retail where capital values continue to edge up. 4 Given the likely inertia of both rental values and property yields over the next twelve months, we expect that capital values will be broadly stable or drift slightly lower, leaving total returns close to the rate of income return. The risk of any deviation from this is likely to be to the downside. In this environment, we continue to favour sectors where space is relatively affordable and which either provide a high rate of income return (e.g. industrials, South East offices), or where there is already evidence of a recovery in rental values (e.g. central London offices). The October spending review will shed more light on public sector spending cuts. While Schroders anticipates slow but steady GDP growth through 2011 and 2012, there is a possibility that growth could stall in those regions such as the North East of England, Northern Ireland and Wales. This is where the public sector accounts for more than a quarter of direct total employment and impacts a large number of associated private sector suppliers.

5 Strategy With evidence that a two tier investment market is emerging, we continue to review potential opportunities selectively. In the short term this may lead to a relatively high cash weighting and a lower than average distribution yield. However, more than half of the current cash balance is earmarked for specific projects. Further, in the medium term we hope our selectivity will enable us to benefit from the more attractive opportunities that may become available. Our strategy of repositioning the portfolio continued in the third quarter with the purchase of a development prelet to QVC at Chiswick Park and further sales of indirectly owned investments and non-income producing assets. Taken together these continue to improve the income profile and reduce portfolio risk. This is in line with our strategy of: Reducing exposure to indirectly owned investments, particularly those with gearing. At the quarter end indirects totalled 18% of the portfolio, down from over 25% eighteen months ago. The sale of another 10 million of Hercules Unit Trust since the quarter end reduces this further. Unitholders should be aware that a number of the remaining holdings while owned indirectly have no gearing. Recent sales have been concentrated on those with gearing. Improving the quality and duration of income. The purchase of the building in Chiswick Park, once occupied next year, builds upon purchases of 'bond type' investments in the first quarter this year. The average unexpired lease term at the end of September increased to 8.4 years, from 7.6 years eighteen months ago. Selling or managing out existing land holdings and development opportunities. The sale of further development sites are expected to complete in the fourth quarter of The proceeds of sales will be recycled into income producing assets. We are working hard to generate value from our existing portfolio through focused asset management initiatives. While the occupational market remains challenging, we are working closely with existing and potential occupiers to retain a low level of voids. A number of new lettings during the quarter contributed to a reduction in the Trust s void rate. At 31 March 2009 At 30 September % 18.4% [17.6%*] 16.3% 57.6% 14.6% [67.8%*] 67.0% Direct and cash Joint ventures Indirect holdings Gearing (% NAV) 20.6% 10.5% [9.8%*] Average lease length 7.6 years 8.4 years *Estimated position following completed sales in October

6 Key Activities Over the Quarter Transactional Activity Activity during the quarter was focused on the continued implementation of portfolio strategy: improving the Trust s income profile and reducing risk. By the end of the quarter, indirectly owned assets had reduced by 2% compared with 30 June Perhaps more importantly the level of gearing reduced by 4%. At the quarter end, gearing stood at 10.5% of net asset value (NAV), around half of its level at the start of the year. Further sales early in the fourth quarter has reduced this to below 10% of NAV. Please refer to the Databank section for further details. Purchases QVC Building, Chiswick Park, London Building 8 was bought from Chiswick Park Unit Trust (ChisPUT) as an office development for an initial 6.5 million and an expected valuation on completion of around 50 million. The 124,000 sq ft office building was bought with a prelet signed with QVC for a term of 21 years and a construction contract in place. The agreed rent is 30 psf, with fixed rental uplifts of 2.5% per annum at the first two rent reviews. The QVC Building (as Building 8 will be known) is located in Chiswick Park in West London, and is one of the most prestigious business parks in the UK. In all, it provides a total of 1.2 million sq ft of office space and the property is the first building on the Park to be owned outside of the trust. As a closed ended trust, ChisPUT may soon be liquidated through the sale of the Park in whole or in part. As a result, a term of the purchase agreement allows ChisPUT to buy back the QVC Building before July 2013 at a price which would crystallise a further profit to SEPUT. Sales Hercules Unit Trust (HUT) West End of London Property Unit Trust (WELPUT) 7 million of units in WELPUT and 17 million of units in HUT were sold during the quarter. Since the market trough fifteen months ago, both funds have produced returns well in excess of the market through a combination of good quality underlying property and gearing. Having benefited from valuation uplifts, gains have been realised and will be recycled into direct property assets. The distribution yield on both funds is relatively low, so we expect this switch to be accretive to SEPUT s distribution yield in time. AH Medical Properties plc The entire holding in AH Medical plc, a listed company investing in primary care premises, was sold for 6 million. The shares are traded on PLUS markets, a junior UK stock exchange, and the sale crystallised gains over the past eighteen months. Although a small holding, the sale significantly reduces SEPUT s off balance sheet gearing exposure. 6

7 Purchases Sector Purchase price m Net initial yield QVC Building, Chiswick Park, London Office 6.5¹ n/a ¹ Total commitment including initial purchase price is 37.7million Sales Sector Sale price m Net initial yield West End of London Property Unit Trust² Office ³ Hercules Unit Trust² Retail Warehouse ³ AH Medical Properties plc Other ³ ² Schroder in-house funds ³ Distribution yield Asset Management Number of new lettings Total income ( ) ,237 Number of rent reviews Total income ( ) 12 2,104,958 Number of lease renewals Total income ( ) ,111 Ten new lettings were completed during the quarter providing additional income of over 800,000 per annum. Key lettings included: Part of the fourth floor, Beaumont House, Kensington Village. Following the lease expiry to Chello Media earlier this year, a new 10 year lease was signed with ADM Promotions UK Limited. Kensington Village has established itself as a favoured location for media companies and the unit was vacant for only a short period prior to the letting. Rent was agreed at 167,000 per annum, in line with estimated rental value (ERV). Unit 7, Electra, London E14. Following the administration of the previous tenant, a food distributor, Unit 7 has been relet to a specialist print firm at 174,000 per annum, around 6% above ERV. Electra is one of several prime South East industrial estates owned by SEPUT where tenant demand remains active. Palace House, London SE1. A lease expiry on the first floor allowed us to relet the space to Kaplan Financial, a financial training company and existing tenant in the building. The agreed rent is 94,000 per annum, 14% above ERV. 7

8 Performance Total Trust Returns Q (%) 12m to 30 Sept 2010 (%) 3 yrs to 30 Sept 2010 (% pa) 5 yrs to 30 Sept 2010 (% pa) SEPUT IPD UK PPFI All Balanced Property Funds Median* IPD UK PPFI All Balanced Property Funds Weighted Average** Source: Investment Property Databank (IPD) UK Pooled Property Fund Indices (UK PPFI). Performance is calculated on a net asset value (NAV) to NAV price basis plus income distributed, compounded monthly, net of fees and based on an unrounded NAV per unit. *SEPUT s benchmark. The Trust s benchmark has changed over time and a composite for 10 years is available upon request. **This measure is widely adopted across the property industry. Over the past twelve months SEPUT has outperformed its benchmark. Since the market reached a trough in June 2009, the Trust s relative performance has improved substantially and we hope this will continue as the portfolio is repositioned. An early analysis of the Trust s performance indicates the following factors contributed to relative performance over the period: Positive Drivers Several of the sector specialist indirect funds performed above benchmark, including West End of London Property Unit Trust and Henderson UK Retail Warehouse Fund. Good quality properties such as Monks Cross Retail Park and Palace House, London SE1 performed well over the past year. Multi-let properties of the right specification in the right location can generate competition for space, and therefore rental growth. In a challenging economic environment this underpins valuations and generates strong performance. The profitable sale of assets (WELPUT, Charlton and Uxbridge (post quarter end)) at above valuation boosted total returns. Negative Drivers Land and potential regeneration sites such as Bracknell town centre, Croydon and in the City have underperformed the market. Although Bracknell has a running yield of over 6%, the lack of income generated by land detracted from short term total returns. For these type of assets, performance should be driven by the recovery of the occupier markets and asset management initiatives. In some instances, we are looking to realise gains through their profitable sale to developers. It is also important to note that the recent outperformance has been achieved despite the short term drag of these more value add strategies where the potential to drive performance into the recovery still remains an exciting prospect. The sale of units in Hercules Unit Trust at a discount to NAV detracted from total returns. From a trust perspective, however, we believe this is in the best interests of unitholders. We also note that this needs to be set against gains on the sale of other direct and indirect assets. 8

9 Databank Trust information At 30 September 2010 Offer price per unit Mid price per unit Bid price per unit NAV per unit Distribution yield¹ 4.3% Bid-offer spread (% offer price) 6.25% ¹ Please note that the distribution yield is calculated on the gross distribution paid (gross of tax, net of expenses and fees) for the last twelve months as a percentage of the latest NAV per unit. Investment portfolio At 30 September 2010 Net asset value (NAV) 1,207,219,513 Gross asset value (GAV) 1,320,912,640 Property value 1,089,947,237 Cash at bank 116,685,634 Uncommitted cash 89,120,245 Net initial yield (look through analysis) 5.8% Equivalent yield (look through analysis) 6.6% Net reversionary yield 6.9% Void rate (look through analysis) ² 6.6% Number of holdings 58 Number of tenants (look through analysis) 756 Debt 10.5% (% debt / NAV) 0.9% (% net debt / NAV) ² Voids include the direct portfolio, all joint ventures plus the quoted void rate on the indirect holdings but exclude land and developments. Data for Henderson, AH Medical and UNITE at Q IPD methodology used which treats tenancies in administration as not being voids until formally disclaimed. Unitholder information At 30 September 2010 Number of units in issue 38,631,076 Number of units redeemed over the quarter - Number of units issued over the quarter 6,537 Number of units matched over the quarter 328,110 Value of units matched over the quarter 10,180,665 Unit availability Please phone Tom Dorey on +44 (0) or +44 (0)

10 Portfolio Analysis at 30 September 2010 Sector Exposure including Cash, % GAV 8.8% 6.6% 1.9% 7.0% 19.4% 19.2% 15.4% 21.7% Standard Retail Shopping Centres Retail Warehouses Central London Offices Rest of UK Offices Industrial Other Cash Source: Schroders, subject to rounding. GAV: gross asset value Portfolio Structure, % NAV 14.5% 18.4% Directly owned assets and cash Joint ventures 67.1% Indirect assets Source: Schroders NAV: net asset value Tenant Profile, % Contracted Rent Fujitsu Services Limited 4.0% QVC 3.6% British Telecommunications PLC 3.4% Lloyds TSB Bank Plc 2.9% Exel Ltd 2.7% TBWA UK Group Limited 2.0% Sportsdirect.com Retail Ltd 2.0% B&Q Plc 2.0% Tullow Oil Plc 1.6% DSG Retail 1.5% All other tenants 74.3% Source: Schroders 10

11 Relative Segment Positions, %* Absolute Segment Positions, % Underweight Overweight SEPUT Benchmark* -2.0% Standard Retail - South East % Standard Retail - Rest of UK % Shopping Centres % Retail Warehouses % Offices - Central London % Offices - South East % Offices - Rest of UK % Industrial - South East % Industrial - Rest of UK % Other % Cash % -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% Source: Schroders, 30 September 2010 *Positions relative to IPD UK Pooled Property Fund Indices All Balanced Funds Weighted Average. The weighted average has been used as this level of information is not available in the median. Data subject to rounding Top Ten Holdings Top ten holdings Sector % of NAV Monks Cross Shopping Park, York Retail Warehouse 5.4 Bracknell Retail and Office 4.9 Hercules Unit Trust 1 Retail Warehouse 4.5 (3.7*) Schroder Emerging Retail Property Unit Trust 1 Standard Retail 4.1 Acorn Industrial Estate, Crayford Industrial 3.9 Matrix, Park Royal, London NW10 Industrial 3.7 Chiswick Park Unit Trust 1 Office 3.6 Fujitsu Office Complex, Central Park, Manchester Office 3.4 Parker Tower, London, WC2 Office 3.3 Mermaid Quay, Cardiff Leisure 3.2 Source: Schroders, 30 September Schroder in-house funds * A further 10 million was sold at the beginning of October

12 Unitholder Information The following is a brief summary of certain provisions relating to the Trust. For full details, reference should be made to the Trust Deed which is available from the Manager on request. Management and Administration Trustees: The Royal Bank of Scotland plc Manager: Schroder Property Investment Management Limited Property Manager: Schroder Property Investment Management Limited Valuer: BNP Paribas Real Estate Auditors: PricewaterhouseCoopers LLP The Supervisory Board Members of the Supervisory Board and their details are shown in the Report and Accounts. The principal role of the Supervisory Board is to set out strategic investment and borrowing guidelines for the Trust. It also monitors risk control and ensures that principles of sound corporate governance are observed in the management of the Trust s assets. It approves the key appointments made in relation to the Trust and the remuneration of the Manager and Property Manager. Issue of Units New units are issued monthly on the Valuation Date and payment must be received by the Trustee within the first five working days of the following month. Title to units will be evidenced by an entry in the register of unitholders. The dealing cut off time is noon on the Valuation Date. Redemption of Units To redeem units, a written notice must be received by the Manager prior to a quarterly redemption notice date, being 31 March, 30 June, 30 September and 31 December. Unitholders will then be advised of the fair value of each unit (usually bid price) within six weeks and the proceeds will be paid on the next quarterly redemption notice date. In common with other property unit trusts, the Manager has the power, subject to prior written approval from the Supervisory Board, to direct that the date of payment of redemption proceeds to unitholders may be postponed until a subsequent Redemption Payment Date, not later than two years after the first Redemption Payment Date. This power must be exercised, and unitholders duly notified, within six weeks of the relevant Redemption Notice Date. Valuation The property portfolio is independently valued on the last working day of each month. The offer and bid prices are set on the basis of this valuation. Bid/Offer Spread The bid/offer spread is 6.25%. Bid and offer prices are reviewed regularly by the Manager to ensure new and existing investors are treated fairly. These may be varied without notice, although in practice we intend to inform investors in advance of any change. Costs and Fees The following fees and charges will be payable: Trustee s fee: Manager s fee: % per annum on the first 500 million of the Trust s Net Asset Value % per annum on any excess over 500 million of the Trust s Net Asset Value 0.3% per annum of the Trust s Net Asset Value Property Manager s fee: 0.4% per annum on the Gross Value of direct holdings and capital cash 12

13 Where the Trust invests in property related investments which are managed by an associate of the Manager or the Property Manager, fees earned by the associate on the Trust s net investment, are not rebated to the Trust, with the exception of SERPUT, where the Trust receives a rebate of 0.3% on SERPUT s gross property value (based on the Trust s holding). These indirect managers levy their own fees which may include performance fees. The Manager s and the Property Manager s fees are charged in full to the Income and Expenditure Account, 50% of such fees are allocated to capital and not deducted from distributions for the purpose of determining the value of such distributions. The remuneration of the Manager and the Property Manager is set by the Supervisory Board. Total expense ratio (TER): estimated TER is 0.85% of NAV at 30 September Income Distributions Income of the Trust is distributed monthly on the fifteenth working day of the month. Investor Reports Unitholders receive a quarterly report. The annual report and audited financial statements are published at the Trust s year end date of 31 March. An interim report and unaudited financial statements are published at 30 September. Responsible Property Investment Policy The Manager has a policy on responsible property investment which is available on request. Investment and Borrowing Powers The Trust Deed requires that the underlying property of the Trust is managed in accordance with the investment and borrowing powers set out in the Trust Deed. Within these investment and borrowing powers, the Supervisory Board may set additional investment and borrowing powers to which the Property Manager must adhere in conducting its property investment management activities. Investment Restrictions The holdings and operations of the Trust will be subject to investment restrictions monitored by the Supervisory Board. These are available upon request. Fund Codes Code Bloomberg SCEXPUT LN ISIN Lipper Reuters Sedol Manager Contacts Andrew Straughair Product Manager andrew.straughair@schroders.com Switchboard +44 (0) Direct Line +44 (0) Hanne Hooton Client Executive hanne.hooton@schroders.com Switchboard +44 (0) Direct Line +44 (0) Lisa Emmerson Fund Services lisa.emmerson@schroders.com Switchboard +44 (0) Direct Line +44 (0)

14 30 September 2010 Schroder Exempt Property Unit Trust Quarter Report Important Information Schroder Exempt Property Unit Trust (the Trust) is a collective investment scheme within the meaning of Section 235 of the Financial Services and Markets Act 2000 ( FSMA ). The Trust is not an authorised unit trust scheme, OEIC or recognised scheme within the meaning of the FSMA and therefore constitutes an unregulated collective investment scheme. As an unregulated collective investment scheme, the distribution and promotion of units are restricted, for the purposes of Sections 21 and 238 of the FSMA, to persons who are themselves authorised under the FSMA or who otherwise fall within the categories or exceptions made under Sections 21 and 238. Accordingly, this material is directed at market counterparties and authorised persons; intermediate customers; existing investors in this or a substantially similar fund; and existing clients and newly accepted clients of the Schroder Group where reasonable steps have been taken to ensure that investment in the Trust is suitable. This material should not be relied upon by persons of any other description. Investment in the Trust is only available to Exempt Funds. In general terms an Exempt Fund is a person wholly exempt from capital gains tax or corporation tax on capital gains. Investment will only be accepted following the completion of a Form of Authority for the Trust which contains certain warranties and indemnities provided by the potential investor, particularly regarding the exempt status of the investor and confirmation from HM Revenue & Customs that the potential investor is an Exempt Fund. Investors and potential investors should be aware that past performance is not a guide to future returns. No warranty is given, in whole or in part, regarding the performance of the Trust and there is no guarantee that the investment objectives of the Trust will be achieved. The price of units and the income from them may fluctuate upwards or downwards and cannot be guaranteed. Property-based pooled vehicles, such as the Trust, invest in real property, the value of which is generally a matter of a valuer's opinion. It may be difficult to deal in the units of the Trust or to sell them at a reasonable price because the underlying property may not be readily saleable, thus creating liquidity risk. There is no recognised market for units in the Trust and, as a result, reliable information about the value of units in the Trust or the extent of the risks to which they are exposed may not be readily available. Neither this document/presentation nor any other statement (oral or otherwise) made at any time in connection herewith constitutes an offer to sell or exchange units in the Trust or any other fund or product and is not soliciting an offer to buy or exchange and does not constitute an invitation to subscribe for, buy or exchange any units in the Trust or any other fund or product in any jurisdiction where the offer, sale or exchange is not permitted. Potential investors are advised to obtain and review independent professional advice and draw their own conclusions regarding the economic benefits and risks of investment in the Trust as well as the legal, regulatory, tax and accounting aspects in relation to their particular circumstances. Any investment in the Trust must be based solely on the prospectus, or any other document issued from time to time by the Manager of the Trust in accordance with applicable laws. The opinions, beliefs expectations or intentions, unless otherwise stated, are those of Schroder Property Investment Management Limited (SPrIM). All information and opinions contained in this document/presentation have been obtained from sources we consider to be reliable. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the views and information in this document/presentation when taking individual investment and/or strategic decisions. A potential conflict with the Manager s duty to the unitholder may arise where a transaction is effected for the Trust in the units of another fund(s) managed by the same Manager or an Associate of the Manager. However, the Manager will ensure that such transactions are effected on terms which are not materially less favourable than if the potential conflict had not existed. The forecasts included in this document/presentation should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change. We accept no responsibility for any errors of fact or opinion and assume no obligation to provide you with any changes to our assumptions or forecasts. Forecasts and assumptions may be affected by external economic or other factors. This document/presentation is intended for the use of the addressee or recipient only and may not be reproduced, redistributed, passed on or published, in whole or in part, for any purpose, without the prior written consent of SPrIM. For the purposes of the Data Protection Act 1998, the data controller in respect of any personal data you supply is SPrIM. Personal information you supply may be processed for the purposes of investment administration by any company within the Schroder Group and by third parties who provide services and such processing and which may include the transfer of data outside of the European Economic Area. SPrIM may also use such information for marketing activities unless you notify it otherwise in writing. Schroder Property Investment Management Limited 31 Gresham Street London EC2V 7QA Registered No England. Schroder Property Investment Management Limited is authorised and regulated by the Financial Services Authority. 14