AEW UK Real Estate Feeder Unit Trust

AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements for the year ended 2017

Contents Statement of Authorised Status of the Scheme Investment Objective Investment Policies Basis of Reporting Statement of the Manager s Responsibilities Manager s Statement Statement of Trustee s Responsibilities Report of the Trustee Report of the Auditor AEW UK Real Estate Feeder Unit Trust Summary of Material Portfolio Changes Fund Information Statement of Total Return Statement of Changes in Net Assets Attributable to Unitholders Balance Sheet Statement of Cash Flows Notes to the Financial Statements Distribution Tables Trustee, Manager & Advisers 1 1 1 1 2 2 3 3 4-5 7 7-11 12 12 13 14 15-24 25 26 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

AEW UK Real Estate Feeder Unit Trust Statement of Authorised Status of the Scheme AEW UK Real Estate Feeder Unit Trust (the Trust ) is a unit trust authorised by the Financial Conduct Authority ( FCA ) with effect from 5 July 2013. The Trust is a Qualified Investor Scheme ( QIS ). The Trust is constituted as an umbrella unit trust which at the date of this report, has two sub funds, the AEW UK Core Property Feeder Fund and the AEW UK Real Return Feeder Fund. The AEW UK Real Estate Fund (the Company ) is an investment company with variable capital ( ICVC ) that is a Property Authorised Investment Fund ( PAIF ). The Company is a Qualified Investor Scheme ( QIS ) that is open to Eligible Investors as defined in the COLL Sourcebook issued by the FCA. The Company is incorporated in England and Wales and is authorised by the FCA. The Company currently consists of two sub-funds, the AEW UK Core Property Fund and the AEW UK Real Return Fund. AEW UK Investment Management LLP is the Manager of the Trust and is the Authorised Corporate Director ( ACD ) of the Company. Investment Objective The investment objective of the AEW UK Core Property Feeder Fund and the AEW UK Real Return Feeder Fund is to provide a return from capital appreciation and income over the longer term. Investment Policies The AEW UK Core Property Feeder Fund will invest all or substantially all of its assets in the shares of the AEW UK Core Property Fund. To the extent the AEW UK Core Property Feeder Fund is not fully invested in the AEW UK Core Property Fund, the AEW UK Core Property Feeder Fund will hold its remaining assets in cash. The AEW UK Real Return Feeder Fund will invest all or substantially all of its assets in the shares of the AEW UK Real Return Fund. To the extent the AEW UK Real Return Feeder Fund is not fully invested in the AEW UK Real Return Fund, the AEW UK Real Return Feeder Fund will hold its remaining assets in cash. Basis of Reporting The Trust is constituted as an umbrella unit trust which at the date of this report, has two sub funds, the AEW UK Core Property Feeder Fund and the AEW UK Real Return Feeder Fund. The AEW UK Real Return Feeder Fund remains inactive since inception and therefore this report for the year ended 2017 relates solely to the AEW UK Core Property Feeder Fund (hereafter referred to as the Fund ). AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 1

AEW UK Real Estate Feeder Unit Trust Statement of the Manager s Responsibilities The Collective Investment Schemes sourcebook published by the FCA, ( the COLL Rules ) require the Manager to prepare financial statements for each annual accounting period which give a true and fair view of the financial position of the Trust and of the net income and net gains or losses on the property of the Trust for the period. In preparing the financial statements the Manager is responsible for: selecting suitable accounting policies and then applying 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 Trust s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; using the going concern basis of accounting unless they either intend to liquidate the Trust or to cease operations, or have no realistic alternative but to do so; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; and taking reasonable steps for the prevention and detection of fraud and irregularities. The Manager is responsible for the management of the Trust in accordance with its Trust Deed, the Prospectus and the COLL Rules. Manager s Statement This report has been prepared under FRS 102 The Financial Reporting Standard and in accordance with the requirements of the Statement of Recommended Practice as issued and amended by the Investment Association in May 2014. AEW UK Investment Management LLP 2 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

AEW UK Real Estate Feeder Unit Trust Statement of Trustee s Responsibilities The Trustee is responsible for the safekeeping of all custodial assets of the Trust, for verifying ownership and maintaining a record of all other assets of the Trust and for the collection of income that arises from those assets. It is the duty of the Trustee to take reasonable care to ensure that the Trust is managed in accordance with the Financial Conduct Authority s Collective Investment Company s Sourcebook ( COLL ), from 22 July 2014 the Financial Conduct Authority s Investment Funds Sourcebook ( FUND ), the Trust s Trust Deed and Prospectus, in relation to the pricing of, and dealings in, units in the Trust; the application of revenue of the Trust; and the investment and borrowing powers and restrictions of the Trust. The Trustee must ensure that: the Trust s cash flows are properly monitored and that cash of the Trust is booked in cash accounts in accordance with the Sourcebooks; the issue, sale, redemption and cancellation of units are carried in accordance with the Regulations; the value of units of the Trust are calculated in accordance with the Regulations; the instructions of the Alternative Investment Fund Manager (AIFM) are carried out (unless they conflict with the Regulations); any consideration relating to transactions in the Trust s assets is remitted within the usual time limits; and that the Trust s income is applied in accordance with the Regulations. Report of the Trustee for the year ended 2017 Having carried out such procedures as we consider necessary to discharge our responsibilities as Trustee of the Trust, it is our opinion, based on the information available to us and the explanations provided, that in all material respects the Trust, acting through the AIFM: (i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Trust s shares and the application of the Trust s income in accordance with the Sourcebooks, the Trust Deed and Prospectus; and (ii) has observed the investment and borrowing powers and restrictions applicable to the Trust. For and on behalf of: BNY Mellon Trust & Depositary (UK) Limited 160 Queen Victoria Street London EC4V 4LA AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 3

AEW UK Real Estate Feeder Unit Trust Report of the Auditor Independent auditor s report to the unitholders of AEW UK Real Estate Feeder Unit Trust ( the Trust ) Opinion We have audited the financial statements of the Trust for the year ended 2017 which comprise the Statement of Total Return, the Statement of Changes in Net Assets Attributable to Unitholders, the Balance Sheet, the Statement of Cash Flows, the Related Notes and Distribution Tables for the Trust listed on page 1 and the accounting policies set out on pages 15 to 17. 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 Trust as at 2017 and of the net revenue/deficit of revenue and the net capital gains/net capital losses on the property of the Trust for the year then ended; and have been properly prepared in accordance with the Trust Deed, 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 Trust 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 The Manager (AEW UK Investment Management LLP) is responsible for the other information, which comprises the Managers report. 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 in our opinion the information given in the Manager s Report for the financial year is consistent with the financial statements. 4 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

AEW UK Real Estate Feeder Unit Trust Report of the Auditor (continued) 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 Trust have not been kept; or the financial statements are not in agreement with the accounting records. Manager s responsibilities As explained more fully in their statement set out on page 2, the Manager is responsible for: the preparation of financial statements that 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 Trust 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 Trust 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 www.frc.org.uk/auditorsresponsibilities. The purpose of our audit work and to whom we owe our responsibilities This report is made solely to the Trust s unitholders, as a body, in accordance with Rule 4.5.12 of the Collective Investment Schemes sourcebook ( the COLL Rules ) issued by the Financial Conduct Authority under section 247 of the Financial Services and Markets Act 2000. Our audit work has been undertaken so that we might state to the Trust s unitholders 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 Trust and the Trust s unitholders as a body, for our audit work, for this report, or for the opinions we have formed. Bill Holland for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 15 Canada Square London E14 5GL 20 April 2018 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 5

AEW UK Core Property Feeder Fund Annual Report and Financial Statements for the year ended 2017

Summary of Material Portfolio Changes for the year ended 2017 During the year, the Fund redeemed its remaining unitholding of 572,870.240 units in the AEW UK Core Property Fund. There were no acquisitions during the year. As at 2017, there were no investments to report. Purchases and sales for the year Cost of units purchased during the year Cost Total Proceeds Proceeds from sale of units during the year AEW UK Core Property Fund 777 Total 777 Fund Information Accounting and Distribution dates XD date First interim distribution 31 March 2017 Second interim distribution and half year end 30 June 2017 Third interim distribution 30 September 2017 Final distribution and year end 2017 Payment of distributions of income will normally be made within two months of the above XD dates, although the ACD reserves the right to pay at a later date but not later than four months as permitted by the Regulations. Income will be automatically reinvested unless instructions are given for payment. Income will be reinvested on the next dealing date following payment of distribution. Distributions in the year First Interim 31 March 2017 Second Interim 30 June 2017 Group 1 Group 2 Group 1 Group 2 Gross revenue 0.85 0.45 Equalisation Distribution rate per unit 0.85 0.45 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 7

Fund Information (continued) Distributions in the year (continued) Third Interim 30 September 2017 Final* 2017 Group 1 Group 2 Group 1 Group 2 Gross revenue 0.77 N/A N/A Equalisation N/A N/A Distribution rate per unit 0.77 N/A N/A * All units in the Fund were redeemed at 1 December 2017. Equalisation applies only to units purchased during the distribution period (Group 2 units). It represents the accrued revenue included in the purchase price of the units. After averaging it is returned with the distribution as a capital repayment. It is not liable to Income Tax but must be deducted from the cost of the units for Capital Gains Tax purposes. Performance Record (per calendar year) Year Unit Class Highest Unit price Lowest Unit price 2017* Income Units 135.63 125.14 2016 Income Units 126.93 108.13 2015 Income Units 124.43 118.81 2014 Income Units 117.74 97.90 * From 1 January 2017 to 30 November 2017. Net asset value (as calculated in accordance with the prospectus) Year Unit Class Net Asset Value Units in issue Net Asset Value per unit 2017* Income Units 2016 Income Units 726 583,577.10 124.34 2015 Income Units 1,081 871,390.14 124.34 2014 Income Units 1,228 1,042,989.08 117.74 * All units in the Fund were redeemed as at 1 December 2017. Unit dealing Turnover of units During the year ended 2017, there were no units created or transferred and 583,577.10 units were redeemed from the Fund for 791,492. 8 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

Fund Information (continued) Subscriptions Eligible Investors may purchase units in the Fund on a monthly basis on the dealing day, being the first business day in each calendar month, provided the subscription request has been made before the cut-off point for the Fund and the Manager is in receipt of cleared funds on the dealing date. The cut-off point for the Fund is the close of business on the business day fourteen days before the dealing date. Valid applications to purchase units in the Fund will be processed at the unit price calculated at the next valuation point following receipt of the application, except in the case where dealing in the Fund has been deferred or suspended. The valuation point for the Fund is 11pm on the last calendar day of each month. If there are more applications to subscribe for units than it has capacity to invest, then the Manager will operate a contractual waiting list. Each prospective application to subscribe will be satisfied in full or partially at the first dealing day for subscription at which the Fund has capacity. The subscription will remain at the top of the contractual waiting list until the application is fully satisfied. Each application will be retained and satisfied in strictly chronological order. The Manager will give twelve business days notice for the drawdown of funds before the dealing day for subscription, so that prospective subscribers can ensure that the Manager receives cleared funds in time. As at 2017, there were no subscriptions in the queue. Redemptions Every unitholder is entitled on any dealing day for redemption to redeem its units subject to the limitations on redemption. Valid redemption requests may be made to the Manager on any business day but must be received by the redemption cut-off point, being the close of business on the business day one month before the dealing date. Valid instructions to the Manager to redeem units in the Fund will be processed at the unit price calculated at the next valuation point following receipt of the instruction, except in the case where dealing in the Fund has been deferred or suspended. The valuation point for the Fund is 11pm on the last calendar day of each month. As at 2017, there were no redemptions in the queue. Deferrals Where the Manager considers it to be in the best interests of the unitholders, the Manager may defer redemptions on a dealing day to any one of the subsequent six dealing days for redemption. A redemption will be deferred to the dealing day for redemption when the Fund has sufficient liquidity to enable it to meet the redemption, providing it is in the best interests of the unitholders to do so. The Manager will review the position every month. The Manager must give unitholders notice of the deferral no later than seven business days before the relevant dealing day for redemption. The price at which the units will be redeemed will be the price for redemptions on the dealing day for redemption on which the units are actually redeemed. Secondary market In addition to purchasing and selling units through the Manager, units are able to be traded between parties using third party brokerage facilitates available in the market with the Manager able to assist with contacts if required. Investor analysis There were no Investors remaining in the Fund as at 2017. AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 9

Fund Information (continued) Treatment of certain investors The Manager has and will continue to enter into agreements with certain investors who may receive preferential treatment. These investors include (i) those investors that are investing sufficiently large amounts either initially or are anticipated to do so over time and (ii) Cornerstone investors that provide seed capital and take the initial risk in the early stage of the Fund. As a result, the terms and conditions of certain investors investment in the Fund may differ to those of other investors. Remuneration The AIFM has adopted a Remuneration Policy which accords with the principles established by AIFMD. AIFMD Remuneration Code Staff includes the members of the AIFM s Management Committee, those performing Control Functions, Department Heads, Risk Takers and other members of staff that exert material influence on the AIFM s risk profile or the AIFs it manages. Staff are remunerated in accordance with the key principles of the firm s remuneration policy, which include (1) promoting sound risk management; (2) supporting sustainable business plans; (3) remuneration being linked to non-financial criteria for Control Function staff; (4) incentivise staff performance over longer periods of time; (5) award guaranteed variable remuneration only in exceptional circumstances; and (6) having an appropriate balance between fixed and variable remuneration. As required under section Fund 3.3.5.R(5) of the Investment Fund Sourcebook, the following information is provided in respect of remuneration paid by the AIFM to its staff for the year ended 2017: Total remuneration paid to employees during the year end 2017 2017 a) remuneration, including, where relevant, any carried interest paid by the AIFM; 2,342,894 b) the number of beneficiaries 26 The aggregate amount of remuneration of the AIFM Remuneration Code staff, broken down by a) senior management 604,939 b) members of staff 1,737,955 Fixed remuneration Variable remuneration Total remuneration Senior management 604,939 604,939 Staff 1,458,955 279,000 1,737,955 Total 2,063,894 279,000 2,342,894 Fixed remuneration comprises basic salaries and variable remuneration comprises bonuses. 10 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

Fund Information (continued) Performance to 2017 Total return for the year ended 2017 (%) AEW UK Core Property Fund 15.2 AREF/IPD All Balanced Property Fund Index weighted average 10.2 Total Expense Ratio (%) Total Expense Ratio for the accounting period Income Units 1.63 The Total Expense Ratio ( TER ) represents the total annualised expenses of the Fund, excluding transaction costs, interest payable and expenses of a capital nature, expressed as a percentage of the average net assets during the accounting period. Risk warning Investors should be aware that there are risks inherent in the holding of investments. Past performance is no guide to the future. The value of units, and any income from them, can go down as well as up, particularly in the short term, meaning that an investment may not be returned in full. The tax treatment of the Fund may change and such changes cannot be foreseen. Where regular investments are made with the intention of achieving a specific capital sum in the future, this will normally be subject to maintaining a specified level of investment. AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 11

Statement of Total Return for the year ended 2017 2017 2016 Notes Income Net capital gains/(losses) 3 66 (41) Revenue 4 25 52 Expenses 5 (11) (10) Net revenue before taxation 14 42 Taxation 6 (2) (8) Net revenue after taxation 12 34 Total return before distributions 78 (7) Distributions 7 (12) (34) Change in net assets attributable to unitholders from investment activities 66 (41) Statement of Changes in Net Assets Attributable to Unitholders 2017 2016 Net assets at the start of the year 726 1,081 Amounts payable on cancellation of units (792) (314) (792) (314) Change in net assets attributable to unitholders from investment activities 66 (41) Closing net assets attributable to unitholders 726 The notes on pages 15 to 24 form an integral part of these financial statements. 12 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

Balance Sheet as at 2017 As at 2017 As at 2016 Note Assets Fixed assets: Investments 8 710 Current assets: Debtors 9 8 Cash and bank balances 10 13 26 Total current assets 13 34 Total assets 13 744 Liabilities Creditors: amounts falling due within one year 11 (13) (18) Total liabilities (13) (18) Net assets attributable to unitholders 726 The financial statements on pages 12 to 24 were approved by the Manager on 20 April 2018 and signed on their behalf by: On behalf of the Manager The notes on pages 15 to 24 form an integral part of these financial statements. AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 13

Statement of Cash Flows for the year ended 2017 2017 2016 Total return before distributions for the year 78 (7) Add back: Taxation 2 8 Net return before finance costs and taxation 80 1 Adjustments for: Capital (gains)/losses (66) 41 Decrease in income debtors 8 10 Increase/(decrease) in income creditors 2 (2) Net cash inflow from operating activities 24 50 Taxation paid (8) (14) Servicing of finance Distribution paid on income units (14) (45) Net cash outflow from investing and servicing of finance (14) (45) Cash flows from financial investment Received for the sale of investments 777 314 Net cash flows from financial investment 777 314 Cash flows from financing Net payments for cancellation of units (792) (314) Net cash flows from financing (792) (314) Net decrease in cash for the year (13) (9) Cash and cash equivalents at then start of the year 26 35 Cash and cash equivalents at then end of the year 13 26 The notes on pages 15 to 24 form an integral part of these financial statements. 14 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

Notes to the Financial Statements for the year ended 2017 1. Accounting policies 1.1 Basis of accounting The financial statements for the year ended 2017 have been prepared on the historical cost basis, as modified by the revaluation of investments, and in accordance with the applicable United Kingdom Accounting Standards including FRS 102 The Financial Reporting Standard and the Trust Instrument. The financial statements are also prepared in accordance with the Statement of Recommended Practice ( SORP ) issued by the Investment Association in May 2014. There is no investment or investors in the Fund at the Balance Sheet date, however the Fund remains open to prospective investors, and therefore the Financial Statements have been prepared on a going concern basis. 1.2 Revenue Distributions from collective investment schemes are recognised when the schemes are quoted ex-distribution. Equalisation returned within the distribution is deducted from the cost of the scheme and does not form part of distributable revenue. 1.3 Expenses All expenses, except for those relating to the purchase and sale of investments are charged against revenue. Irrecoverable running costs directly attributable to specific properties within the AEW UK Core Property Fund s portfolio are charged to the Statement of Total Return as other property expenses. 1.4 Taxation Corporation tax is provided at 20% on taxable revenue, after the deduction of allowable expenses. As an exempt authorised unit trust, the Fund qualifies for exemption from tax on capital gains. 1.5 Distribution policy Net revenue after taxation, as disclosed in the financial statements, after adjustment for items of a capital nature and deduction of income tax, is distributable to unitholders. The Manager can make adjustments to distributions at his own discretion. Distributions which have remained unclaimed by unitholders for more than six years are credited to the assets of the Fund. 1.6 Equalisation Equalisation only applies to units purchased during the distribution period (group 2 units). It is the average amount of revenue included in the purchase price of all group 2 units that is refunded to holders of these units as a return of capital. Being capital, it is not liable to income tax but must be deducted from the cost of units for capital gains tax purposes. 1.7 Investments Investments are recognised when a legally binding and unconditional right to obtain the investment asset arises. Investments are measured initially at the total amount of consideration payable including transaction costs. Investments are subsequently held at fair value as at the close of business on the last calendar day of the accounting period. The fair value is the single price of the units in the AEW UK Core Property Fund. Gains or losses on the disposal of investments are determined as the difference between net disposal proceeds and the carrying value of the asset. AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 15

Notes to the Financial Statements (continued) for the year ended 2017 1. Accounting policies (continued) 1.8 Investment properties held by the AEW UK Core Property Fund Investment property comprises completed property and property under construction or re-development held to earn rentals or for capital appreciation or both. Investment property transactions are considered to have taken place where, by the end of accounting year, there is a legally binding, unconditional and irrevocable contract. Investment property is measured initially at cost including transaction costs. Transaction costs include transfer taxes, professional fees for legal services, agent s fee and initial leasing commissions to bring the property to the condition necessary for it to be capable of operating. The carrying amount also includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met. Subsequent to initial recognition, investment property is stated at fair value. Gains or losses arising from changes in the fair values are included in the Statement of Total Return in the period when they arise. Investment properties are valued by the Valuation Agent on the basis of a full valuation with physical inspection at least once a year. Any valuation of an Immovable by the Valuation Agent must be undertaken in accordance with the current issue of RICS Valuation Professional Standards (the Red Book ), or in the case of overseas immovables, on an appropriate basis, but guided by the FCA Rules. For the purposes of these financial statements, in order to avoid double accounting, the assessed fair value is: reduced by the carrying amount of any accrued income resulting from the spreading of lease incentives; and increased by the carrying amount of leasehold obligations. Investment property is derecognised when it has been disposed of or permanently withdrawn from use and no future economic benefit is expected after its disposal or withdrawal. Any gains or losses on the retirement or disposal of investment property are recognised in the Statement of Total Return in the period of retirement or disposal. Gains or losses on the disposal of investment property are determined as the difference between net disposal proceeds and the carrying value of the asset. 1.9 Cash and cash equivalents Cash and cash equivalents include cash in hand and deposits held at banks. Cash is stated at face value. 1.10 Debtors Amounts due but not received are included within debtors. Debtors are initially recognised at transaction value and subsequently at amortised cost less impairment. Provision is made where there is objective evidence that the Fund will not be able to recover balances in full. Balances are written off when the probability of recovery is assessed as being remote. 1.11 Creditors Creditors are stated at their face value. Amounts received in respect of future years are included within creditors as deferred income. 16 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

Notes to the Financial Statements (continued) for the year ended 2017 1. Accounting policies (continued) 1.12 Significant estimation techniques The preparation of the Fund s financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future years. The fair value of investment property, within the AEW UK Core Property Fund, is determined by independent real estate valuation experts using recognised valuation techniques. These techniques comprise both the Yield Method and the Discounted Cash Flow Method. In some cases, the fair values are determined based on recent real estate transactions with similar characteristics and location to those of the Fund assets. Any valuation of a property by the Valuation Agent must be undertaken in accordance with the current issue of RICS Valuation Professional Standards (the Red Book ). The fair value of the Fund s holding in the AEW UK Core Property Fund is shown in these accounts. 2. Risk management policies The Fund s activities expose to a variety of financial risks: market risk, credit risk, liquidity risk and further risks inherent to investing in investment property. The AEW UK Core Property Fund s objective in managing risk is the creation and protection of unitholder value. Risk is inherent in the AEW UK Core Property Fund s activities, but it is managed through a process of ongoing identification, measurement and monitoring, subject to risks limits and other controls. The ACD has appointed a Governance Committee with an independent chair, to oversee the aspects of risk control. The principal risks facing the AEW UK Core Property Fund in the management of its portfolio are as follows: 2.1 Market price risk Market price risk is the risk that future values of investments in direct property and related property investments will fluctuate due to changes in market prices. To manage market price risk, the AEW UK Core Property Fund diversifies its portfolio geographically in the United Kingdom and across property sectors. The disciplined approach to the purchase, sale and assets management ensures that the value is maintained to its maximum potential. Prior to any property acquisition or sale, detailed research is undertaken to assess expected future cash flow. Investment Management Committee ( IMC ) meets fortnightly and reserves the ultimate decision with regards to investments purchases or sales. In order to monitor property valuation fluctuations, the ACD meet with independent external valuer on a quarterly basis. The valuer provides a property portfolio valuation monthly, so any movements in the value can be accounted for in a timely manner and reflected in the net assets value every month. AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 17

Notes to the Financial Statements (continued) for the year ended 2017 2. Risk management policies (continued) 2.1 Market price risk (continued) Property funds Investments into property funds may be difficult to value, and the AEW UK Core Property Fund may rely on estimates of the value of such investments in calculating the Net Asset Value of Shares. In the exceptional circumstances and with the approval from the Depositary, the Fund Manager may suspend calculation of the Net Asset Value up to twelve months. In addition, many property funds have limitations on the ability to withdraw or redeem assets and may charge fees in respect of withdrawals or redemptions and suspend redemptions from time to time. Although the Manager would generally seek to offer the opportunity to redeem units within a reasonable timeframe, there can be no assurance that the liquidity of the investments will always be sufficient to meet redemption requests as, and when, made. Any lack of liquidity may affect the liquidity of the Shares and the value of the investments. Such investments are not yet undertaken by the AEW UK Core Property Fund. The risk management provision states that the AEW UK Core Property Fund may utilise such investments in limited circumstances, where direct investments in the underlying property is not possible or impractical, for instance because a property would otherwise be too large for the portfolio, or not available in any other form. In such instances, the Manager shall consult with and take into consideration the recommendations of the Governance Committee. In accordance with the investment policy not more than 10% of the AEW UK Core Property Fund s Net Assets Value can be invested in Collective Investment Schemes. 2.2 Real Estate risk The AEW UK Core Property Fund is exposed to the following risks specific to its investments in investment property: Property investments are illiquid assets and valuing is difficult. Real estate can be difficult to sell, especially if local market conditions are poor. Illiquidity may also result from the absence of an established market for investments, as well as legal or contractual restrictions on resale of such investments. In addition, property valuation is inherently subjective due to the individual characteristics of each property, and thus, coupled with illiquidity in the markets, makes the valuation in the Scheme Property difficult and inexact. No assurances can be given that the valuations of properties will be reflected in the actual sale prices even where such sales occur shortly after the relevant valuation date. There is no guarantee that the AEW UK Core Property Fund will be able to acquire a sufficient number of suitable properties which will enable the Fund to achieve its investment objective through its investment policy. Having excess uninvested cash and a larger number of Units in issue may affect the AEW UK Core Property Fund s ability to achieve its investment objective. In order to avoid holding excess cash the Manager exercises control over subscriptions into the AEW UK Core Property Fund by sending capital call to investors only when there are suitable investments opportunities. In the event where direct investments in the underlying property is not possible or impractical, the AEW UK Core Property Fund may invest up to 10% of its Net Assets Value into Collective Investment Schemes. There can be no assurance that the AEW UK Core Property Fund will undertake to acquire any particular site or that it will be able to complete such acquisition if it is undertaken. 18 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

Notes to the Financial Statements (continued) for the year ended 2017 2. Risk management policies (continued) 2.2 Real Estate risk (continued) There can be no certainty regarding the future performance of any of the properties acquired for the AEW UK Core Property Fund. The value of any property can go down as well as up. Property and property-related assets are inherently subjective as regards value due to the individual nature of each property. As a result, valuations are subject to uncertainty. Real property investments are subject to varying degrees of risk. The yields available from investments in real estate depend on the amount of income generated and expenses incurred from such investments. There are additional risks in vacant, part vacant, redevelopment and refurbishment situations although these are not prospective investments for the AEW UK Core Property Fund. 2.3 Credit risk The Fund and AEW UK Core Property Fund are subject to Credit risk. It is the risk that the counterparty (to a financial instrument) or tenant (of a property) will cause a financial loss to the Fund or AEW UK Core Property Fund by failing to meet a commitment it has entered into with the Fund or AEW UK Core Property Fund. It is the Fund s and the AEW UK Core Property Fund s policy to enter into financial instruments with reputable counterparties. The Manager closely monitors the creditworthiness of the Fund s and AEW UK Core Property Fund s counterparties (e.g. Depositary, banks and tenants) by reviewing their credit ratings, financial statements and press releases on a regular basis. All cash deposits are placed with an approved counterparty, Bank of New York Mellon, London Branch. In respect of property investments, in the event of a default by a tenant, the AEW UK Core Property Fund will suffer a rental shortfall and additional costs concerning re-letting the property. The Manager monitors tenant arrears in order to anticipate and minimise the impact of defaults by occupational tenants. The table below shows the Fund s exposure to credit risk As at 2017 As at 2016 Debtors 8 Bank and cash 13 26 Total 13 34 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 19

Notes to the Financial Statements (continued) for the year ended 2017 2. Risk management policies (continued) 2.4 Liquidity risk Liquidity risk is the risk that the Fund will encounter difficulty in realising assets to meet its financial commitments. The Fund is exposed to liquidity risk from the requirement to meet cash redemptions on its redeemable units. Where the Manager considers it to be in the best interests of the Unitholders, the Manager may defer redemptions on a Dealing Day for Redemption in the relevant Fund and/or Class in respect of which a validly submitted Redemption Form was received and accepted to any one of the subsequent six Dealing Days for Redemption i.e. the deferral period is a maximum of six months from the original Dealing Day for Redemption. A redemption will be deferred within this timeline to the Dealing Day for Redemption when the Fund has sufficient liquidity to enable it to meet the redemption, providing it is in the best interests of the Unitholders to do so. The Manager will review the position every month. 3. Net capital gains/(losses) 2017 2016 Proceeds from sale of investments during the year 777 314 Carrying amount of investments sold during the year (711) (300) Gain realised on sale of investments during the year 66 14 Unrealised valuation loss for the year (55) Net capital gains/(losses) 66 (41) 20 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

Notes to the Financial Statements (continued) for the year ended 2017 4. Revenue 2017 2016 Dividend received: Property income distribution 23 50 Dividend distribution 2 2 Total revenue 25 52 5. Expenses 2017 2016 Operating expenses: Auditor s fee 4 4 Printing fee 4 6 Tax agent fee 2 Legal fee 1 Total expenses 11 10 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 21

Notes to the Financial Statements (continued) for the year ended 2017 6. Taxation The Fund is subject to income tax. Currently corporation tax is charged at 20%. The Fund s income, net of income tax, is distributed to unitholders quarterly. Holders receive distributions of income, which are deemed to carry an income tax credit. Holders who are exempt from tax on income may reclaim their tax credits from HM Revenue & Customs. The tax charge for the year ended 2017 was 2,000 ( 2016: 8,000). The Fund is exempt from tax on capital gains realised on the disposal of its investments. 2017 2016 (a) Analysis of tax charge for the year Corporation tax on profits in the year 2 8 2 8 (b) Factors affecting the tax charge for the year Net revenue before taxation 13 42 UK dividends not taxable (2) (2) Taxable income 11 40 Corporation tax at 20% (2) (8) Total tax charge (2) (8) 22 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

Notes to the Financial Statements (continued) for the year ended 2017 7. Distributions 2017 2016 (a) Analysis of distributions First interim 5 13 Second interim 3 12 Third interim 4 7 Final 2 Total distributions 12 34 8. Investments 2017 2016 At valuation: At beginning of year at valuation 710 1,065 Carrying value of investments sold during the year (710) (300) Net unrealised loss on revaluation (55) Carrying value at the end of the year 710 There are no investments to report as at 2017. The Fund s remaining investment in the AEW UK Core Property Fund was redeemed on 1 December for 777,000. As at 2016 this investment was valued at 710,000 and categorised as Class 3 Valuation techniques using non-observable data, within the investments fair value hierarchy. AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 23

Notes to the Financial Statements (continued) for the year ended 2017 9. Debtors 2017 2016 Property income dividends 8 Total income debtors 8 Total debtors 8 10. Cash and bank balances 2017 2016 Amounts held at bank 13 26 Total cash and bank balances 13 26 11. Creditors: amounts falling due within one year 2017 2016 Accruals and other creditors Distributions 2 Corporation tax 2 8 Income accruals 11 8 Total creditors 13 18 12. Loans The Fund does not have any loans as at 2017 ( 2016: nil). 13. Derivatives The Fund has no derivative exposure as at 2017 ( 2016: nil). 24 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

Distribution Tables for the year ended 2017 First Interim Group 1 units purchased prior to 2016 Group 2 units purchased on or after 1 January 2017 and on or before 31 March 2017 Income Units Net revenue Equalisation Distribution paid Group 1 0.85 0.85 Group 2 Second Interim Group 1 units purchased prior to 31 March 2017 Group 2 units purchased on or after 1 April 2017 and on or before 30 June 2017 Income Units Net revenue Equalisation Distribution paid Group 1 0.45 0.45 Group 2 Third Interim Group 1 units purchased prior to 30 June 2017 Group 2 units purchased on or after 1 July 2017 and on or before 30 September 2017 Income Units Net revenue Equalisation Distribution paid Group 1 0.77 0.77 Group 2 Final Investors fully redeemed as at 1 December 2017. Equalisation Equalisation applies only to units purchased during the distribution period (Group 2 units). It represents the accrued revenue included in the purchase price of the units. After averaging it is returned with the distribution as a capital repayment. It is not liable to Income Tax but must be deducted from the cost of the units for Capital Gains Tax purposes. AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017 25

Trustee, Manager & Advisers Trustee BNY Mellon Trust & Depositary (UK) Limited 160 Queen Victoria Street London EC4V 4LA Registrar and Transfer Agent Link Fund Administrators Limited 17 Rochester Row Westminster London SW1P 1QT Auditor KPMG LLP 15 Canada Square London E14 5GL Fund Administrator Link Alternative Fund Administrators Limited The Registry 34 Beckenham Road Beckenham Kent BR3 4TU Custodian The Bank of New York Mellon (London branch) 160 Queen Victoria Street London EC4V 4LA Legal Advisers Eversheds LLP One Wood Street London EC2V 7WS Manager AEW UK Investment Management LLP 33 Jermyn Street London SW1Y 6DN 26 AEW UK Real Estate Feeder Unit Trust Annual Report and Financial Statements 2017

United Kingdom 33 Jermyn Street London SW1Y 6DN +44 20 7016 4845 www.aewuk.co.uk France 8-12 rue des Pirogues de Bercy 75012 Paris France +33 1 78 40 92 00 www.aeweurope.com United States of America Two Seaport Lane Boston MA 02210 United States +1 617 261 9334 www.aew.com