Delaware | 001-33824 | 26-0508760 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
Exhibit No. | Description of Exhibit | |
23.1 | ||
99.1 | ||
99.2 | ||
99.3 |
KENNEDY-WILSON HOLDINGS, INC. | |||
Date: December 28, 2017 | By: | /s/ Justin Enbody | |
Name: | Justin Enbody | ||
Title: | Chief Financial Officer |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | ||
Notes | £m | £m | £m | |
Revenue | ||||
Rental income | 7 | 191.5 | 138.8 | 51.4 |
Hotel revenue | 10 | 19.4 | 20.0 | 8.4 |
Interest income from loans secured by real estate | 13 | 6.3 | 13.4 | 6.6 |
217.2 | 172.2 | 66.4 | ||
Property related expenses | 8 | (35.8) | (22.7) | (8.3) |
Hotel cost of sales | 11 | (16.3) | (14.4) | (4.3) |
(52.1) | (37.1) | (12.6) | ||
Gross profit | 165.1 | 135.1 | 53.8 | |
Gain on sale of investment and development property and loan collateral | 9 | 8.5 | 14.6 | 0.4 |
Net change in fair value of investment and development property | 17 | (10.8) | 208.0 | 49.3 |
Net change in fair value of loans secured by real estate | 18 | 0.3 | 5.1 | 6.0 |
Other gains | - | 0.8 | 1.8 | |
163.1 | 363.6 | 111.3 | ||
Expenses | ||||
Administrative expenses | 12 | (16.4) | (15.9) | (14.6) |
Investment management fee | 31A(i) | (16.3) | (15.2) | (8.4) |
Performance fee | 31A(ii) | - | (29.7) | - |
(32.7) | (60.8) | (23.0) | ||
Results from operating activities before financing income and costs | 130.4 | 302.8 | 88.3 | |
Interest income from cash and cash equivalents | 13 | 0.6 | 0.6 | 1.3 |
Finance costs | 14 | (57.7) | (36.8) | (9.2) |
Net finance expense | (57.1) | (36.2) | (7.9) | |
Profit before taxation | 73.3 | 266.6 | 80.4 | |
Taxation | 15 | (7.3) | (7.6) | (1.9) |
Profit for the year/period after taxation | 66.0 | 259.0 | 78.5 | |
Earnings per share (basic & diluted) | 16A | 49.1p | 191.0p | 88.0p |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | ||
Notes | £m | £m | £m | |
Profit for the year/period after taxation | 66.0 | 259.0 | 78.5 | |
Other comprehensive income: | ||||
Items that may be reclassified subsequently to profit or loss: | ||||
Foreign operations – foreign currency translation differences | 30A | 126.2 | (12.2) | (6.6) |
Hedge of net investment in foreign operations | 30A | (93.0) | 3.9 | 6.2 |
33.2 | (8.3) | (0.4) | ||
Items that will never be reclassified to profit or loss | ||||
Net change in fair value of property, plant and equipment | 19 | 1.9 | (1.3) | 2.6 |
Other comprehensive income for the year | 35.1 | (9.6) | 2.2 | |
Total comprehensive income for the year/period, net of tax | 101.1 | 249.4 | 80.7 | |
Profit attributable to: | ||||
Owners of the Company | 65.9 | 259.0 | 78.5 | |
Non-controlling interests | 3A(iii) | 0.1 | - | - |
66.0 | 259.0 | 78.5 | ||
Total comprehensive income attributable to: | ||||
Owners of the Company | 101.0 | 249.4 | 80.7 | |
Non-controlling interests | 3A(iii) | 0.1 | - | - |
101.1 | 249.4 | 80.7 | ||
31 December 2016 | 31 December 2015 | |||
Notes | £m | £m | ||
Non-current assets | ||||
Investment and development property | 17 | 2,675.3 | 2,500.2 | |
Loans secured by real estate | 18 | 67.6 | 179.2 | |
Property, plant and equipment | 19 | 73.0 | 59.2 | |
Derivative financial assets | 26 | 0.3 | 10.6 | |
Deferred tax asset | 15E | 2.9 | 1.5 | |
2,819.1 | 2,750.7 | |||
Current assets | ||||
Inventories | 20 | 0.3 | 0.3 | |
Rent and other receivables | 21 | 32.5 | 28.4 | |
Assets held-for-sale | 37 | 59.4 | 51.0 | |
Cash and cash equivalents | 22 | 456.5 | 326.5 | |
548.7 | 406.2 | |||
Total assets | 3,367.8 | 3,156.9 | ||
Current liabilities | ||||
Trade and other payables | 23 | (58.2) | (68.6) | |
Deferred income | 24 | (36.7) | (31.4) | |
Borrowings | 25 | (0.6) | (0.3) | |
(95.5) | (100.3) | |||
Non-current liabilities | ||||
Trade and other payables | 23 | (3.1) | (3.3) | |
Deferred tax liability | 15E | (2.4) | - | |
Borrowings | 25 | (1,676.6) | (1,414.0) | |
Derivative financial liabilities | 26 | (54.3) | (10.1) | |
(1,736.4) | (1,427.4) | |||
Total liabilities | (1,831.9) | (1,527.7) | ||
Net assets | 1,535.9 | 1,629.2 | ||
Equity | ||||
Stated capital | 28A | 1,222.1 | 1,322.2 |
Foreign currency translation reserve | 30A | 24.5 | (8.7) | |
Revaluation reserve | 30B | 3.2 | 1.3 | |
Share-based payments reserve | 30C | 1.9 | 31.8 | |
Retained earnings | 283.7 | 282.6 | ||
Equity attributable to owners of the Company | 1,535.4 | 1,629.2 | ||
Non-controlling interests | 3A(iii) | 0.5 | - | |
Total equity | 1,535.9 | 1,629.2 | ||
Net asset value per share – basic and diluted (Pence) | 16B | 1,217.6p | 1,198.5p | |
EPRA net asset value per share – basic and diluted (Pence) | 16B | 1,217.4p | 1,197.8p | |
Adjusted net asset value per share – basic and diluted (Pence) | 16B | 1,215.9p | 1,174.5p |
Attributable to owners of the Company | Non- controlling interests | Total equity | |||||||||
Stated capital | Foreign currency translation reserve | Revaluation reserve | Share- based payments reserve | Retained earnings | Total | ||||||
£m | £m | £m | £m | £m | £m | £m | £m | ||||
Balance as at 1 January 2016 | 1,322.2 | (8.7) | 1.3 | 31.8 | 282.6 | 1,629.2 | - | 1,629.2 | |||
Profit for the year | - | - | - | - | 65.9 | 65.9 | 0.1 | 66.0 | |||
Other comprehensive income | - | 33.2 | 1.9 | - | - | 35.1 | - | 35.1 | |||
Total comprehensive income for the year | - | 33.2 | 1.9 | - | 65.9 | 101.0 | 0.1 | 101.1 | |||
Transactions with owners of the Company recognized directly in equity: | |||||||||||
Contributions and distributions | |||||||||||
Share based settlement of investment management fee (Note 31A(i))1 | - | - | - | (0.2) | - | (0.2) | - | (0.2) | |||
Settlement of performance fee (Note 31A(ii)) | - | - | - | (29.7) | - | (29.7) | - | (29.7) | |||
Share buyback (Note 28A) | (100.1) | - | - | - | - | (100.1) | - | (100.1) | |||
Reclassification of non-controlling interest | - | - | - | - | (0.4) | (0.4) | 0.4 | - | |||
Dividends (Note 29) | - | - | - | - | (64.4) | (64.4) | - | (64.4) | |||
(100.1) | - | - | (29.9) | (64.8) | (194.8) | 0.4 | (194.4) | ||||
Balance as at 31 December 2016 | 1,222.1 | 24.5 | 3.2 | 1.9 | 283.7 | 1,535.4 | 0.5 | 1,535.9 |
1. | Net movement in share-based payment reserve representing payment of investment management fee for the year ended 31 December 2015 in the amount of £2.1 million and recording of the reserve for the investment management fee payable for the year ended 31 December 2016 in the amount of £1.9 million. |
Attributable to owners of the Company | Non- controlling interests1 | Total equity | |||||||||
Stated capital | Foreign currency translation reserve | Revaluation reserve | Share- based payments reserve | Retained earnings | Total | ||||||
£m | £m | £m | £m | £m | £m | £m | £m | ||||
Balance as at 1 January 2015 | 1,314.9 | (0.4) | 2.6 | 1.7 | 71.1 | 1,389.9 | - | 1,389.9 | |||
Profit for the year | - | - | - | - | 259.0 | 259.0 | - | 259.0 | |||
Other comprehensive loss | - | (8.3) | (1.3) | - | - | (9.6) | - | (9.6) | |||
Total comprehensive income for the year | - | (8.3) | (1.3) | - | 259.0 | 249.4 | - | 249.4 | |||
Transactions with owners of the Company recognized directly in equity: | |||||||||||
Contributions and distributions | |||||||||||
Share based settlement of investment management fee (Notes 28 and 31A(i))2 | 7.3 | - | - | 0.4 | - | 7.7 | - | 7.7 | |||
Performance fee expense (Note 31A(ii)) | - | - | - | 29.7 | - | 29.7 | - | 29.7 | |||
Dividends (Note 29) | - | - | - | - | (47.5) | (47.5) | - | (47.5) | |||
7.3 | - | - | 30.1 | (47.5) | (10.1) | - | (10.1) | ||||
Balance as at 31 December 2015 | 1,322.2 | (8.7) | 1.3 | 31.8 | 282.6 | 1,629.2 | - | 1,629.2 |
1. | Non-controlling interests relate to certain development properties in Spain. As at and for the year ended 31 December 2015, such amounts were not material. |
2. | Net movement in share-based payment reserve representing reversal of £1.7 million opening reserve and recording of year end reserve for the investment management fee payable in the amount of £2.1 million. |
Attributable to owners of the Company | Non- controlling interests1 | Total equity | |||||||||
Stated capital | Foreign currency translation reserve | Revaluation reserve | Share- based payments reserve | Retained earnings | Total | ||||||
£m | £m | £m | £m | £m | £m | £m | £m | ||||
Balance as at 23 December 2013 | - | - | - | - | - | - | - | - | |||
Profit for the period | - | - | - | - | 78.5 | 78.5 | - | 78.5 | |||
Other comprehensive (loss)/income | - | (0.4) | 2.6 | - | - | 2.2 | - | 2.2 | |||
Total comprehensive (loss)/income for the year | - | (0.4) | 2.6 | - | 78.5 | 80.7 | - | 80.7 | |||
Transactions with owners of the Company recognized directly in equity: | |||||||||||
Contributions and distributions | |||||||||||
Issue of ordinary shares | 1,352.4 | - | - | - | - | 1,352.4 | - | 1,352.4 | |||
Share issue costs | (40.1) | - | - | - | - | (40.1) | - | (40.1) | |||
Shares issued to partially settle Investment management fee (Notes 28 and 31A (i)) | 2.6 | - | - | 1.7 | - | 4.3 | - | 4.3 | |||
Dividends (Note 29) | - | - | - | - | (7.4) | (7.4) | - | (7.4) | |||
1,314.9 | - | - | 1.7 | (7.4) | 1,309.2 | - | 1,309.2 | ||||
Balance as at 31 December 2014 | 1,314.9 | (0.4) | 2.6 | 1.7 | 71.1 | 1,389.9 | - | 1,389.9 |
1. | Non-controlling interests relate to certain development properties in Spain. As at and for the year ended 31 December 2014, such amounts were not material. |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | ||||
Notes | £m | £m | £m | |||
Cash flows from operating activities | ||||||
Profit for the year/period | 66.0 | 259.0 | 78.5 | |||
Adjustments for: | ||||||
Net change in fair value of investment and development property | 17 | 10.8 | (208.0) | (49.3) | ||
Net change in fair value of loans secured by real estate | 18 | (0.3) | (5.1) | (6.0) | ||
Other gains | - | (0.8) | (1.8) | |||
Gain on sale of loan collateral | 9 | (0.4) | (5.0) | - | ||
Gain on sale of investment property | 9 | (8.1) | (9.6) | (0.4) | ||
Write-off of property, plant and equipment | 19 | (1.3) | 0.2 | - | ||
Net finance cost | 43.3 | 16.6 | 1.3 | |||
Amortization of lease incentive | (3.8) | (1.6) | (1.5) | |||
Amortization of loan fees | 14 | 5.5 | 3.4 | - | ||
Amortization of bond discount, net of amortization of bond premia | 14 | 0.7 | 0.3 | - | ||
Taxation | 7.3 | 7.6 | 1.9 | |||
Depreciation | 19 | 3.2 | 2.2 | 0.7 | ||
Reversal of/(provision for) impairment of accounts receivable | 0.7 | (0.3) | 0.5 | |||
Performance fee | 31A(ii) | - | 29.7 | - | ||
Investment management fee | (0.2) | 5.6 | 4.2 | |||
123.4 | 94.2 | 28.1 | ||||
(Increase) in rent and other receivables | (3.0) | (11.9) | (10.6) | |||
(Increase) in inventories | - | - | (0.1) | |||
Increase in deferred rental income | 5.3 | 13.9 | 16.2 | |||
(Decrease)/increase in trade and other payables | (21.0) | 24.1 | 26.9 | |||
Cash generated from operations before interest and taxation | 104.7 | 120.3 | 60.5 | |||
Interest received | 7.4 | 17.2 | 4.5 | |||
Interest paid | (44.6) | (21.1) | (4.7) | |||
Derivative instruments | (1.0) | 5.6 | (2.9) |
Performance fee paid | 31A(ii) | (29.7) | - | - | ||
Tax paid | (7.1) | (1.4) | - | |||
Cash flows generated from operating activities | 29.7 | 120.6 | 57.4 | |||
Investing activities | ||||||
Acquisition/improvement of investment and development property | (282.2) | (1,065.7) | (905.6) | |||
Deposits paid on investment and development property | - | (1.7) | (30.8) | |||
Disposal of investment and development property | 9 | 256.0 | 95.7 | 0.4 | ||
Capital expenditure on property, plant and equipment | 19 | (10.2) | (4.0) | (0.1) | ||
Acquisition of loans secured by real estate | 18 | - | (130.4) | (241.4) | ||
Disposal of loans secured by real estate | 115.6 | 28.7 | 36.4 | |||
Acquisition of business/subsidiary, net of cash acquired | - | - | (54.8) | |||
Cash flows from/(used in) investing activities | 79.2 | (1,077.4) | (1,195.9) |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | ||||
Notes | £m | £m | £m | |||
Financing activities | ||||||
Proceeds from issue of shares | - | - | 1,282.4 | |||
Share issue costs | - | - | (39.5) | |||
Proceeds from borrowings | 25 | 385.7 | 925.7 | 519.0 | ||
Bond interest received in advance | 3.4 | - | - | |||
Repayments of secured borrowings | 25 | (230.0) | (50.6) | (163.6) | ||
Draw down of revolving credit facility | 75.0 | - | - | |||
Repayment of revolving credit facility | (75.0) | - | - | |||
Transaction costs related to loans and borrowings | (3.5) | (6.2) | (10.2) | |||
Bond premia received | 25 | 5.9 | - | - | ||
Share buyback programme, inclusive of costs | 28A | (100.1) | - | - | ||
Dividends paid | 29 | (64.4) | (47.5) | (7.4) | ||
Cash flows (used in)/from financing activities | (3.0) | 821.4 | 1,580.7 | |||
Net increase/(decrease) in cash and cash equivalents | 105.9 | (135.4) | 442.2 | |||
Cash and cash equivalents at beginning of period | 22 | 326.5 | 441.9 | - | ||
Foreign exchange movements | 24.1 | 20.0 | (0.3) | |||
Cash and cash equivalents at the reporting date | 22 | 456.5 | 326.5 | 441.9 |
1. | General information |
2. | Basis of preparation |
A. | Statement of compliance |
3. | Significant accounting policies |
• | Amendments to IAS 1 Disclosure initiative; |
• | Amendments to IAS 16 and IAS 38 Clarification of acceptable methods of depreciation and amortization; |
• | Amendments to IAS 27 Equity method in Separate Financial Statements; |
• | Amendments to IAS 16 Property, Plant and Equipment and IAS 41 Bearer Plants; |
• | Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations; |
• | Annual improvements to IFRSs 2012 – 2014 Cycle; and |
• | Amendments to IFRS 10, IFRS 12 and IAS 28: Investment entities – exception to consolidation. |
• | temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; and |
• | temporary differences related to investments in subsidiaries, associates and jointly controlled entities to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future. |
• | Buildings 40 years |
• | Fixtures, fittings and equipment 5 – 10 years |
4. | New standards and interpretations not yet adopted |
Effective date | |||
IFRS 9: Financial Instruments | 1 January 2018 | ||
IFRS 15: Revenue from Contracts with Customers | 1 January 2018 | ||
IFRS 16: Leases | 1 January 2019 | ||
Amendments to IFRS 2: Classification and measurement of share-based payment transactions | 1 January 2018 | ||
Amendments to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | Date to be determined | ||
Amendments to IAS 7: Disclosure Initiative | 1 January 2017 | ||
Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses | 1 January 2017 | ||
5. | Determination of fair values |
• | Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities. |
• | Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. |
• | Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. |
6. | Operating segments |
Segment | Description |
Office real estate | Property which is primarily used by commercial tenants |
Retail real estate | Property comprising primarily high street retail or shopping centres, together with leisure assets |
Industrial real estate | Property used by tenants primarily for the purposes of manufacturing and distribution, or mixed use |
Residential real estate | Tenanted residential property, in the private rented sector |
Loans secured by real estate | A loan that is in default or close to being in default, receivership or liquidation, where the borrower is typically not making full payments and the loan to value (‘LTV’) is greater than 100% |
Hotels | Ownership and management of hotels, namely Fairmont St Andrews Hotel (United Kingdom) and Portmarnock Hotel (Ireland) |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Revenue | |||||||||
Rental income | 103.6 | 64.9 | 13.9 | 9.1 | - | - | 191.5 | - | 191.5 |
Hotel revenue | - | - | - | - | - | 19.4 | 19.4 | - | 19.4 |
Interest income from loans secured by real estate | - | - | - | - | 6.3 | - | 6.3 | - | 6.3 |
103.6 | 64.9 | 13.9 | 9.1 | 6.3 | 19.4 | 217.2 | - | 217.2 | |
Property related expenses | (18.9) | (11.5) | (1.0) | (4.1) | (0.3) | - | (35.8) | - | (35.8) |
Hotel cost of sales | - | - | - | - | - | (16.3) | (16.3) | - | (16.3) |
Administrative costs | - | - | - | - | - | (4.8) | (4.8) | - | (4.8) |
Net operating income | 84.7 | 53.4 | 12.9 | 5.0 | 6.0 | (1.7) | 160.3 | - | 160.3 |
Net change in the fair value of investment and development property | (29.6) | 7.4 | (5.0) | 16.4 | - | - | (10.8) | - | (10.8) |
Net change in the fair value of loans secured by real estate | - | - | - | - | 0.3 | - | 0.3 | - | 0.3 |
Gain/(loss) on sale and other gains | 1.8 | 6.6 | (0.3) | - | 0.4 | - | 8.5 | - | 8.5 |
56.9 | 67.4 | 7.6 | 21.4 | 6.7 | (1.7) | 158.3 | - | 158.3 | |
Overhead costs | |||||||||
Administrative expenses | (2.5) | (1.4) | (0.3) | (0.6) | (0.3) | - | (5.1) | (6.5) | (11.6) |
Investment management fee | - | - | - | - | - | - | - | (16.3) | (16.3) |
(2.5) | (1.4) | (0.3) | (0.6) | (0.3) | - | (5.1) | (22.8) | (27.9) | |
Results from operating activities before financing income and costs | 54.4 | 66.0 | 7.3 | 20.8 | 6.4 | (1.7) | 153.2 | (22.8) | 130.4 |
Interest income from cash and cash equivalents | - | - | - | - | - | - | - | 0.6 | 0.6 |
Finance costs | (9.7) | (11.8) | (2.7) | (1.8) | - | - | (26.0) | (31.7) | (57.7) |
(9.7) | (11.8) | (2.7) | (1.8) | - | - | (26.0) | (31.1) | (57.1) |
Segment profit/(loss) before tax | 44.7 | 54.2 | 4.6 | 19.0 | 6.4 | (1.7) | 127.2 | (53.9) | 73.3 |
1. | Investment property under development, as identified in Note 17A(ii) is allocated into a segment based on the current expected future use. |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Revenue | |||||||||
Rental income | 71.8 | 49.7 | 12.2 | 5.1 | - | - | 138.8 | - | 138.8 |
Hotel revenue | - | - | - | - | - | 20.0 | 20.0 | - | 20.0 |
Interest income from loans secured by real estate | - | - | - | - | 13.4 | - | 13.4 | - | 13.4 |
71.8 | 49.7 | 12.2 | 5.1 | 13.4 | 20.0 | 172.2 | - | 172.2 | |
Property related expenses | (15.1) | (5.4) | (0.5) | (1.4) | - | - | (22.4) | (0.3) | (22.7) |
Hotel cost of sales | - | - | - | - | - | (14.4) | (14.4) | - | (14.4) |
Administrative costs | - | - | - | - | - | (5.0) | (5.0) | - | (5.0) |
Net operating income | 56.7 | 44.3 | 11.7 | 3.7 | 13.4 | 0.6 | 130.4 | (0.3) | 130.1 |
Net change in the fair value of investment and development property | 141.5 | 36.7 | 21.3 | 8.5 | - | - | 208.0 | - | 208.0 |
Net change in the fair value of loans secured by real estate | - | - | - | - | 5.1 | - | 5.1 | - | 5.1 |
Gain on sale and other gains | 2.9 | 6.2 | 0.5 | - | 5.0 | - | 14.6 | 0.8 | 15.4 |
201.1 | 87.2 | 33.5 | 12.2 | 23.5 | 0.6 | 358.1 | 0.5 | 358.6 | |
Overhead costs | |||||||||
Administrative expenses | (1.5) | (1.3) | (0.1) | (0.6) | (1.5) | - | (5.0) | (5.9) | (10.9) |
Investment management fee | - | - | - | - | - | - | - | (15.2) | (15.2) |
Performance fee | - | - | - | - | - | - | - | (29.7) | (29.7) |
(1.5) | (1.3) | (0.1) | (0.6) | (1.5) | - | (5.0) | (50.8) | (55.8) | |
Results from operating activities before financing income and costs | 199.6 | 85.9 | 33.4 | 11.6 | 22.0 | 0.6 | 353.1 | (50.3) | 302.8 |
Interest income from cash and cash equivalents | - | - | - | - | - | - | - | 0.6 | 0.6 |
Finance costs | (8.4) | (12.0) | (3.0) | (1.0) | - | - | (24.4) | (12.4) | (36.8) |
(8.4) | (12.0) | (3.0) | (1.0) | - | - | (24.4) | (11.8) | (36.2) | |
Segment profit/(loss) before tax | 191.2 | 73.9 | 30.4 | 10.6 | 22.0 | 0.6 | 328.7 | (62.1) | 266.6 |
1. | Investment property under development, as identified in Note 17A(ii) is allocated into a segment based on the current expected future use. |
Office real estate | Retail real estate | Industrial real estate | Residential real estate | Loans secured by real estate | Hotels | Segment total | Corporate | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Revenue | |||||||||
Rental income | 31.7 | 10.4 | 7.0 | 2.3 | - | - | 51.4 | - | 51.4 |
Hotel revenue | - | - | - | - | - | 8.4 | 8.4 | - | 8.4 |
Interest income from loans secured by real estate | - | - | - | - | 6.6 | - | 6.6 | - | 6.6 |
31.7 | 10.4 | 7.0 | 2.3 | 6.6 | 8.4 | 66.4 | - | 66.4 | |
Property related expenses | (6.0) | (1.7) | (0.3) | (0.3) | - | - | (8.3) | - | (8.3) |
Hotel cost of sales | - | - | - | - | - | (4.3) | (4.3) | - | (4.3) |
Administrative costs | - | - | - | - | - | (3.1) | (3.1) | - | (3.1) |
Net operating income | 25.7 | 8.7 | 6.7 | 2.0 | 6.6 | 1.0 | 50.7 | - | 50.7 |
Net change in the fair value of investment and development property | 27.4 | 8.6 | 12.4 | 0.9 | - | - | 49.3 | - | 49.3 |
Net change in the fair value of loans secured by real estate | - | - | - | - | 6.0 | - | 6.0 | - | 6.0 |
Gain on sale and other gains | - | - | 0.4 | - | - | 1.8 | 2.2 | - | 2.2 |
53.1 | 17.3 | 19.5 | 2.9 | 12.6 | 2.8 | 108.2 | - | 108.2 | |
Overhead costs | |||||||||
Administrative expenses | (1.1) | (0.9) | (0.8) | (0.5) | - | (0.5) | (3.8) | (7.7) | (11.5) |
Investment management fee | - | - | - | - | - | - | - | (8.4) | (8.4) |
(1.1) | (0.9) | (0.8) | (0.5) | - | (0.5) | (3.8) | (16.1) | (19.9) | |
Results from operating activities before financing income and costs | 52.0 | 16.4 | 18.7 | 2.4 | 12.6 | 2.3 | 104.4 | (16.1) | 88.3 |
Interest income from cash and cash equivalents | - | - | - | - | - | - | - | 1.3 | 1.3 |
Finance costs | (6.5) | (0.8) | (0.7) | (1.2) | - | - | (9.2) | - | (9.2) |
(6.5) | (0.8) | (0.7) | (1.2) | - | - | (9.2) | 1.3 | (7.9) | |
Segment profit/(loss) before tax | 45.5 | 15.6 | 18.0 | 1.2 | 12.6 | 2.3 | 95.2 | (14.8) | 80.4 |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate2 | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Assets | |||||||||
Current assets | 107.0 | 38.9 | 35.4 | 12.5 | 15.9 | 3.7 | 213.4 | 335.3 | 548.7 |
Total segment assets | 1,594.7 | 825.7 | 206.2 | 244.9 | 83.5 | 77.2 | 3,032.2 | 335.6 | 3,367.8 |
Liabilities | |||||||||
Total segment liabilities | (323.0) | (428.8) | (49.6) | (4.9) | (0.2) | (4.0) | (810.5) | (1,021.4) | (1,831.9) |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate2 | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Assets | |||||||||
Current assets | 82.9 | 43.8 | 16.4 | 5.0 | 1.8 | 3.1 | 153.0 | 253.2 | 406.2 |
Total segment assets | 1,415.2 | 848.9 | 193.7 | 191.7 | 180.9 | 62.3 | 2,892.7 | 264.2 | 3,156.9 |
Liabilities | |||||||||
Total segment liabilities | (366.1) | (422.1) | (95.1) | (41.0) | (0.6) | (2.9) | (927.8) | (599.9) | (1,527.7) |
1. | Investment property under development, as identified in Note 17A(ii) is allocated into a segment based on the current expected future use. |
2. | Within current assets the ‘Corporate’ category comprises primarily cash and cash equivalents and within total segment assets, the ‘Corporate’ categtory comprises primarily cash and cash equivalents and derivative financial assets. Within total segment liabilities the ‘Corporate’ category comprises primarily the unsecured borrowings and derivative financial liabilities. Intercompany transactions have been removed from the calculation of segment assets and liabilities. |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
United Kingdom | |||
Rental income | 124.0 | 107.9 | 37.7 |
Hotel revenue | 13.0 | 14.2 | 5.3 |
Interest income on loans secured by real estate | 6.0 | 13.0 | 4.5 |
Gain on sale of investment property and loan collateral | 4.1 | 10.5 | 0.4 |
Net change in fair value of investment and development property | (77.5) | 113.8 | 38.0 |
Net change in fair value of loans secured by real estate | - | 3.6 | 4.1 |
69.6 | 263.0 | 90.0 | |
Ireland | |||
Rental income | 42.7 | 29.0 | 13.7 |
Hotel revenue | 6.4 | 5.8 | 3.1 |
Interest income on loans secured by real estate | 0.3 | 0.4 | 2.1 |
Gain on sale of investment property and loan collateral | 2.0 | 4.1 | - |
Net change in fair value of investment and development property | 50.7 | 88.1 | 11.3 |
Net change in fair value of loans secured by real estate | 0.3 | 1.5 | 1.9 |
102.4 | 128.9 | 32.1 | |
Rest of Europe | |||
Rental income | 24.8 | 1.9 | - |
Hotel revenue | - | - | - |
Interest income on loans secured by real estate | - | - | - |
Gain on sale of investment property and loan collateral | 2.4 | 0.8 | - |
Net change in fair value of investment and development property | 16.0 | 6.1 | - |
Net change in fair value of loans secured by real estate | - | - | - |
Other gains | - | - | - |
43.2 | 8.8 | - | |
Total | |||
Rental income | 191.5 | 138.8 | 51.4 |
Hotel revenue | 19.4 | 14.6 | 0.4 |
Interest income from loans secured by real estate | 6.3 | 13.4 | 6.6 |
Gain on sale of investment property and loan collateral | 8.5 | 20.0 | 8.4 |
Net change in fair value of investment and development property | (10.8) | 208.0 | 49.3 |
Net change in fair value of loans secured by real estate | 0.3 | 5.1 | 6.0 |
Other gains | - | 0.8 | - |
215.2 | 400.7 | 122.1 |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
United Kingdom | 142.8 | 126.6 | |
Ireland | 15.2 | 18.2 | |
Rest of Europe | 45.4 | 12.1 | |
203.4 | 156.9 | ||
Corporate1 | 345.3 | 249.3 | |
548.7 | 406.2 |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
United Kingdom | 1,563.4 | 1,767.9 | |
Ireland | 899.8 | 672.9 | |
Rest of Europe | 355.8 | 300.2 | |
2,819.0 | 2,741.0 | ||
Corporate1 | 0.1 | 9.7 | |
2,819.1 | 2,750.7 |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
United Kingdom | 502.0 | 672.6 | |
Ireland | 216.3 | 244.4 | |
Rest of Europe | 85.4 | 8.4 | |
803.7 | 925.4 | ||
Corporate1 | 1,028.2 | 602.3 | |
1,831.9 | 1,527.7 |
1. | Within current and non-current assets, the ‘Corporate’ category comprises primarily cash and cash equivalents and derivative financial assets. Within total liabilities the ‘Corporate’ category comprises primarily the unsecured borrowings and derivative financial liabilities. Intercompany transactions have been removed from the calculation of segment assets and liabilities. |
7. | Rental income |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Rental income | 166.3 | 121.9 | 44.2 |
Service charge income | 20.6 | 14.6 | 5.0 |
Other property related income | 4.6 | 2.3 | 2.2 |
191.5 | 138.8 | 51.4 |
8. | Property related expenses |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Service charge expense | 20.6 | 14.6 | 6.0 |
Other property operating expenses | 6.4 | 2.8 | 1.0 |
Fees payable to managing agents | 2.5 | 1.7 | 0.1 |
Vacant property costs | 2.4 | 1.0 | 0.5 |
Letting, marketing, legal and professional fees | 2.1 | 1.4 | 0.1 |
Property insurance expense | 0.7 | 0.7 | 0.2 |
Impairment charge on receivables | 0.6 | 0.2 | 0.3 |
Ground rent | 0.5 | 0.3 | 0.1 |
35.8 | 22.7 | 8.3 |
9. | Gain on sale of investment and development property and loan collateral |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Investment and development property | |||
Gross proceeds on disposal | 260.4 | 97.9 | 0.5 |
Selling costs | (4.4) | (2.2) | - |
Net proceeds on disposal | 256.0 | 95.7 | 0.5 |
Carrying value | (247.9) | (86.1) | - |
Gain on disposal | 8.1 | 9.6 | 0.5 |
Loan collateral | |||
Gross proceeds on disposal | 117.1 | 96.6 | 36.4 |
Selling costs | (1.5) | - | - |
Net proceeds on disposal | 115.6 | 96.6 | 36.4 |
Carrying value | (115.2) | (91.6) | (36.5) |
Gain/(loss) on disposal | 0.4 | 5.0 | (0.1) |
8.5 | 14.6 | 0.4 |
10. | Hotel revenue |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Room income | 8.6 | 8.9 | 3.6 |
Food and beverage income | 7.2 | 7.6 | 3.4 |
Other hotel income | 3.6 | 3.5 | 1.4 |
19.4 | 20.0 | 8.4 |
11. | Hotel cost of sales |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Wages and salaries | 7.0 | 6.2 | 1.6 |
Consumables (Note 20) | 2.4 | 2.4 | 1.1 |
Depreciation (Note 19) | 3.2 | 2.2 | 0.7 |
Other costs | 3.7 | 3.6 | 0.9 |
16.3 | 14.4 | 4.3 |
12. | Administrative expenses |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Consultancy and other advisory fees | 8.2 | 6.9 | 5.7 |
General expenses | 4.4 | 5.1 | 2.7 |
Employee benefits | 1.6 | 0.6 | 1.7 |
Legal fees | 1.1 | 0.8 | 0.2 |
Audit and related fees (Note 39) | 0.7 | 0.5 | 0.4 |
Directors’ fees (Note 31B(i)(a)) | 0.3 | 0.3 | 0.3 |
Acquisition related expenditure | 0.1 | 1.7 | 3.6 |
16.4 | 15.9 | 14.6 |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Hotel administrative costs | |||
General expenses | 1.7 | 2.6 | 1.1 |
Employee benefit | 1.6 | 0.6 | 1.5 |
Consultancy and other advisory fees | 1.5 | 1.8 | 0.5 |
4.8 | 5.0 | 3.1 |
13. | Finance income |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Interest income from loans secured by real estate | 6.3 | 13.4 | 6.6 |
Interest income from cash and cash equivalents | 0.6 | 0.6 | 1.3 |
6.9 | 14.0 | 7.9 |
14. | Finance costs |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | ||
£m | £m | £m | ||
Interest on secured borrowings | 21.4 | 21.6 | 6.1 | |
Interest on unsecured €550.0 million 3.25% note | 13.6 | 3.0 | - | |
Interest on standalone unsecured £500.0 million 3.95% bond | 13.1 | 3.4 | - | |
Amortization of loan arrangement fees | 5.5 | 3.4 | 0.4 | |
Time value movement of foreign exchange zero premium options | 1.0 | 2.3 | - | |
Commitment fee and interest charge on revolving credit facility | 1.4 | 1.1 | 0.6 | |
Bond discount amortization, net of amortization of bond premia | 0.7 | 0.3 | - | |
Fair value movement on derivative financial instruments | 0.9 | 0.8 | 2.1 | |
Foreign currency (gain)/loss | (0.1) | 0.6 | - | |
Bank fees and other costs | 0.2 | 0.3 | - | |
57.7 | 36.8 | 9.2 |
15. | Taxation |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Current tax expense | |||
Current year/period | 5.8 | 7.6 | 1.9 |
5.8 | 7.6 | 1.9 | |
Deferred taxes | |||
Tax effect of losses not previously recognized | (0.7) | - | - |
Tax effect of previously unrecognized deductible temporary differences | 2.2 | - | - |
1.5 | - | - | |
Tax expense on continuing operations | 7.3 | 7.6 | 1.9 |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Tax expense reconciliation | |||
Profit before tax for the year | 73.3 | 266.6 | 80.4 |
Income tax charge using weighted average applicable tax rate of 21.5% (2015: 20%; 2014: 20%) | 15.8 | 53.3 | 16.1 |
Non-taxable income | (21.4) | (22.9) | (6.5) |
Non-taxable net fair value losses/(gains) | 13.7 | (23.3) | (7.9) |
Current year losses for which no deferred tax is recognized | 0.3 | 0.1 | 0.1 |
Tax effect of losses not previously recognized | (0.7) | - | - |
Tax effect of previously unrecognized deductible temporary differences | 2.2 | - | - |
Expenses disallowed | 0.8 | 0.4 | 0.1 |
Other adjustments | (1.5) | - | - |
Changes in estimates related to prior years/periods | (1.9) | - | - |
Tax charge | 7.3 | 7.6 | 1.9 |
Analysed as arising from: | |||
Investment and development property located in the United Kingdom | 3.3 | 7.4 | 1.9 |
Investment and development property located in Spain | 3.5 | 0.2 | - |
Luxembourg corporate taxes | 0.5 | - | - |
7.3 | 7.6 | 1.9 |
Year ended 31 December 2016 | Year ended 31 December 2015 | ||
£m | £m | ||
Deferred tax asset | 2.9 | 1.5 | |
Deferred tax liability | (2.4) | - | |
0.5 | 1.5 | ||
Analysed as arising from: | |||
Investment property | |||
Opening balance | - | - | |
Origination and reversal of temporary differences | (2.2) | - | |
Closing balance | (2.2) | - | |
Tax losses | |||
Opening balance | 1.5 | - | |
Origination and reversal of temporary differences | 0.7 | 1.5 | |
Effects of translation to presentation currency | 0.5 | - | |
Closing balance | 2.7 | 1.5 | |
0.5 | 1.5 |
Year ended 31 December 2016 | Year ended 31 December 2015 | ||
£m | £m | ||
Tax losses brought forward | 10.5 | 10.0 | |
Deductible temporary differences | 4.7 | 4.6 | |
15.2 | 14.6 |
16. | Earnings, net asset value per share and EPRA metrics |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |||||||
£m | p1 | £m | p1 | £m | p1 | ||||
Profit for the year/period after taxation | 66.0 | 49.1 | 259.0 | 191.0 | 78.5 | 88.0 | |||
Adjusted for: | |||||||||
Net change in fair value of investment and development property (Note 17) | 10.8 | 8.0 | (208.0) | (153.4) | (49.3) | (55.3) | |||
Net change in the fair value of loans secured by real estate (Note 18) | (0.3) | (0.2) | (5.1) | (3.8) | (6.0) | (6.7) | |||
Deferred taxes in respect of EPRA adjustments | 3.0 | 2.2 | - | - | |||||
Gain on sale of investment and development property and loan collateral (Note 9) and other gains | (8.5) | (6.3) | (15.4) | (11.3) | (2.2) | (2.5) | |||
Taxes on gains on disposal | 0.9 | 0.7 | - | - | - | ||||
Fair value loss on interest rate caps (Note 14) | 0.9 | 0.7 | 0.8 | 0.6 | 2.1 | 2.4 | |||
Debt close out costs | 0.2 | 0.2 | - | - | - | - | |||
Time value of foreign exchange zero premium options (Note 14) | 1.0 | 0.8 | 2.3 | 1.6 | - | - | |||
Acquisition related expenditure (Note 12) | 0.1 | - | 1.7 | 1.3 | - | - | |||
EPRA earnings | 74.1 | 55.2 | 35.3 | 26.0 | 23.1 | 25.9 | |||
Group adjustments: | |||||||||
Performance fee | - | - | 29.7 | 21.9 | - | - | |||
Adjusted earnings | 74.1 | 55.2 | 65.0 | 47.9 | 23.1 | 25.9 | |||
Weighted average number of ordinary shares (Note 28B) | 134,364,625 | 135,613,838 | 89,071,782 |
1. | Per share amount. |
31 December 2016 | 31 December 2015 | ||||||||
£m | p1 | £m | p1 | ||||||
Basic NAV | 1,535.9 | 1,217.6 | 1,629.2 | 1,198.5 | |||||
Adjusted for: | |||||||||
Mark-to-market of derivative financial assets (Note 26) | (0.3) | (0.2) | (0.9) | (0.7) | |||||
EPRA NAV | 1,535.6 | 1,217.4 | 1,628.3 | 1,197.8 | |||||
Group adjustments: | |||||||||
Performance fee (Note 31A(ii)) | - | - | (29.7) | (21.8) | |||||
Investment management fee (Note 31A(i)) | (1.9) | (1.5) | (2.1) | (1.5) | |||||
Adjusted NAV | 1,533.7 | 1,215.9 | 1,596.5 | 1,174.5 | |||||
EPRA NNNAV | |||||||||
EPRA NAV | 1,535.6 | 1,217.4 | 1,628.3 | 1,197.8 | |||||
Fair value of derivative financial assets (Note 26) | 0.3 | 0.2 | 0.9 | 0.7 | |||||
Fair value of borrowings2 (Note 25) | (35.1) | (27.8) | (6.0) | (4.2) | |||||
EPRA NNNAV | 1,500.8 | 1,189.8 | 1,623.2 | 1,194.3 | |||||
Number of shares | |||||||||
Ordinary shares in issue (Note 28A) | 126,133,407 | 135,933,938 |
1. | Per share amount. |
2. | Represents the difference between the book value of borrowings and the fair value of borrowings. |
17. | Investment and development property |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Investment property | |||
Opening balance | 2,367.0 | 1,182.5 | |
Acquisition of investment property | 169.1 | 1,011.7 | |
Acquisition of collateral from loans secured by real estate | - | 139.9 | |
Disposal of investment property | (187.7) | (86.1) | |
Improvements to investment property | 47.0 | 22.4 | |
Transfer from/(to) investment property under development | 148.5 | (3.2) | |
Transfer to assets held-for-sale (Note 37) | (48.3) | (51.0) | |
Net change in fair value | (35.0) | 173.0 | |
Effects of translation to presentation currency | 134.3 | (22.2) | |
Closing balance | 2,594.9 | 2,367.0 |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Investment property under development | |||
Opening balance | 133.2 | 35.8 | |
Acquisition of investment property under development | 20.1 | 28.8 | |
Disposal of investment property under development | (9.0) | - | |
Development expenditure | 47.6 | 31.8 | |
Transfer from/(to) investment property | (148.5) | 3.2 | |
Transfer to assets held-for-sale (Note 37) | (11.1) | - | |
Net change in fair value | 24.2 | 35.0 | |
Effects of translation to presentation currency | 23.9 | (1.4) | |
Closing balance | 80.4 | 133.2 | |
Disclosed as: | |||
Carrying value of investment and development property | 2,675.3 | 2,500.2 | |
Assets held-for-sale (Note 37) | 59.4 | 51.0 | |
Adjustment in respect of straight line rent (Note 21)1 | 6.9 | 3.1 | |
Fair value of investment and development property | 2,741.6 | 2,554.3 |
1. | Included as a component of the “Rent and other receivables” balance in the consolidated balance sheet. |
• | Information provided by the Investment Manager Group including rents, lease terms, revenue and capital expenditure. Such information is derived from the Investment Manager Group’s financial and property systems and is subject to the Group’s overall control environment. |
• | Valuation models used by the external valuers, including market related assumptions based on their professional judgement and market observation. |
• | Whether a property’s fair value can be reliably determined; |
• | Which valuation method should be applied for each property; |
• | The assumptions made for unobservable inputs used in the valuation method for investment property (the major unobservable inputs are estimated rent per square foot/square metre/unit, estimated rental value and equivalent yield); and |
• | The assumptions made for unobservable inputs used in the valuation method for investment property under development (the major unobservable inputs are, as appropriate to each development asset, build cost per square foot/square metre, net initial yield, sales value per square foot/square metre and price per acre). |
Asset class | Fair value at 31 December 2016 £m1,2 | Range | ||||||
Valuation technique | Input | Low | High | Weighted average | ||||
United Kingdom | ||||||||
Retail | 435.8 | Yield capitalization | Annual rent per sq ft3 (£) | 4.11 | 154.19 | 14.70 | ||
ERV4 per sq ft (£) | 4.11 | 193.83 | 14.47 | |||||
Equivalent yield % | 3.2 | 11.7 | 6.3 | |||||
Office | 830.1 | Yield capitalization | Annual rent per sq ft (£) | 8.75 | 57.18 | 19.82 | ||
ERV per sq ft (£) | 6.00 | 70.00 | 21.98 | |||||
Equivalent yield % | 4.9 | 8.5 | 6.1 | |||||
Industrial | 171.2 | Yield capitalization | Annual rent per sq ft (£) | 1.25 | 11.08 | 4.32 | ||
ERV per sq ft (£) | 1.25 | 11.96 | 4.55 | |||||
Equivalent yield % | 5.2 | 9.1 | 6.9 | |||||
Aggregate United Kingdom (excluding residential) | 1,437.1 | Annual rent per sq ft (£) | 1.25 | 154.19 | 12.68 | |||
ERV per sq ft (£) | 1.25 | 193.88 | 13.49 | |||||
Equivalent yield % | 3.2 | 11.7 | 6.3 | |||||
Residential | 79.6 | Yield capitalization | Annual rent per unit (£) | n/a | n/a | n/a | ||
ERV per unit (£) | 12,600.00 | 20,700.00 | 16,504.00 | |||||
Equivalent yield % | 3.9 | 3.9 | 3.9 | |||||
Aggregate United Kingdom (including Residential) | 1,516.7 | |||||||
Ireland | ||||||||
Retail | 159.3 | Yield capitalization | Annual rent per sq ft (€) | 6.25 | 302.33 | 30.57 | ||
ERV per sq ft (€) | 6.25 | 232.56 | 27.44 | |||||
Equivalent yield % | 5.0 | 7.4 | 5.7 | |||||
Office | 524.2 | Yield capitalization | Annual rent per sq ft (€) | 13.88 | 52.69 | 25.13 | ||
ERV per sq ft (€) | 17.00 | 51.50 | 40.10 | |||||
Equivalent yield % | 4.6 | 6.7 | 5.1 | |||||
Aggregate Ireland (excluding Residential) | 683.5 | Annual rent per sq ft (€) | 6.25 | 302.33 | 26.80 | |||
ERV per sq ft (€) | 6.25 | 232.56 | 36.21 | |||||
Equivalent yield % | 4.6 | 7.6 | 5.3 |
Residential | 142.7 | Yield capitalization | Annual rent per unit (€) | 18,422.00 | 20,463.00 | 18,031.00 | ||
ERV per unit (€) | 19,837.00 | 23,757.00 | 20,409.00 | |||||
Equivalent yield % | 4.6 | 5.4 | 5.0 | |||||
Aggregate Ireland (including Residential) | 826.2 |
Asset class | Fair value at 31 December 2016 £m1,2 | Range | ||||||
Valuation technique | Input | Low | High | Weighted average | ||||
Rest of Europe | ||||||||
Retail (Spain) | 136.3 | Yield capitalization | Annual rent per sq m5 (€) | 34.68 | 1,237.00 | 139.14 | ||
ERV per sqm (€) | 38.40 | 900.00 | 172.23 | |||||
Equivalent yield % | 5.6 | 9.3 | 6.8 | |||||
Office (Italy) | 170.1 | DCF6 | Annual rent per sq m (€) | 86.40 | 180.80 | 139.40 | ||
ERV per sqm (€) | 70.00 | 210.00 | 142.70 | |||||
Equivalent yield % | 6.2 | 8.6 | 7.8 | |||||
Aggregate Rest of Europe | 306.4 | |||||||
Total | 2,649.3 |
1. | Includes adjustment in respect of straight line leases, which is recognized in the “Rent and other receivables” component of the consolidated balance sheet. |
2. | Includes assets held-for-sale. |
3. | Square feet. |
4. | Estimated rental value. |
5. | Square metres. |
6. | Discounted cash flow. |
Asset class | Fair value at 31 December 2015 £m1,2 | Range | ||||||
Valuation technique | Input | Low | High | Weighted average | ||||
United Kingdom | ||||||||
Retail | 538.4 | Yield capitalization | Annual rent per sq ft3 (£) | 2.78 | 154.19 | 14.27 | ||
ERV4 per sq ft (£) | 3.50 | 171.98 | 14.05 | |||||
Equivalent yield % | 3.3 | 11.8 | 6.3 | |||||
Office | 842.4 | Yield capitalization | Annual rent per sq ft (£) | 5.99 | 52.50 | 20.22 | ||
ERV per sq ft (£) | 6.00 | 70.00 | 22.14 | |||||
Equivalent yield % | 4.0 | 12.0 | 5.9 | |||||
Industrial | 179.4 | Yield capitalization | Annual rent per sq ft (£) | 1.25 | 10.58 | 4.43 | ||
ERV per sq ft (£) | 1.25 | 11.52 | 4.53 | |||||
Equivalent yield % | 4.5 | 10.0 | 6.4 | |||||
Aggregate United Kingdom (excluding residential) | 1,560.2 | Annual rent per sq ft (£) | 1.25 | 154.19 | 12.89 | |||
ERV per sq ft (£) | 1.25 | 171.98 | 13.51 | |||||
Equivalent yield % | 3.3 | 12.0 | 6.1 | |||||
Residential | 66.4 | Yield capitalization | Annual rent per unit (£) | n/a | n/a | n/a | ||
ERV per unit (£) | 12,600.00 | 20,700.00 | 16,504.00 | |||||
Equivalent yield % | 4.0 | 4.0 | 4.0 | |||||
Aggregate United Kingdom (including Residential) | 1,626.6 | |||||||
Ireland | ||||||||
Retail | 153.2 | Yield capitalization | Annual rent per sq ft (€) | 6.25 | 302.33 | 30.21 | ||
ERV per sq ft (€) | 5.00 | 302.33 | 26.77 | |||||
Equivalent yield % | 3.8 | 7.9 | 5.7 | |||||
Office | 306.3 | Yield capitalization | Annual rent per sq ft (€) | 15.43 | 50.85 | 34.90 | ||
ERV per sq ft (€) | 15.50 | 50.00 | 40.07 | |||||
Equivalent yield % | 4.6 | 8.0 | 5.0 | |||||
Aggregate Ireland (excluding Residential) | 459.5 | Annual rent per sq ft (€) | 6.25 | 302.33 | 32.97 | |||
ERV per sq ft (€) | 5.00 | 302.33 | 34.60 | |||||
Equivalent yield % | 3.8 | 8.0 | 5.3 |
Residential | 76.7 | Yield capitalization | Annual rent per unit (€) | 17,837.00 | 24,450.00 | 18,919.00 | ||
ERV per unit (€) | 18,667.00 | 29,250.00 | 19,977.00 | |||||
Equivalent yield % | 4.7 | 5.8 | 4.9 | |||||
Aggregate Ireland (including Residential) | 536.2 |
Asset class | Fair value at 31 December 2015 £m1,2 | Range | ||||||
Valuation technique | Input | Low | High | Weighted average | ||||
Rest of Europe | ||||||||
Retail (Spain) | 116.7 | Yield capitalization | Annual rent per sq m5 (€) | 30.95 | 1,237.00 | 140.32 | ||
ERV per sqm (€) | 39.00 | 660.03 | 166.97 | |||||
Equivalent yield % | 5.4 | 9.5 | 7.0 | |||||
Office (Italy) | 141.6 | DCF6 | Annual rent per sq m (€) | 86.40 | 180.80 | 139.40 | ||
ERV per sqm (€) | 60.00 | 200.00 | 130.60 | |||||
Equivalent yield % | 6.2 | 9.1 | 7.6 | |||||
Aggregate Rest of Europe | 258.3 | |||||||
Total | 2,421.1 |
1. | Includes adjustment in respect of straight line leases, which is recognized in the “Rent and other receivables” component of the consolidated balance sheet. |
2. | Includes assets held-for-sale. |
3. | Square feet. |
4. | Estimated rental value. |
5. | Square metres. |
6. | Discounted cash flow. |
• | A retail property at Puerta del Sol 9 in Madrid, Spain; |
• | Residential real estate at Postigo de San Martín 3 in Madrid, Spain for conversion into a hotel; |
• | An office building at Santisima Trinidad 5 in Madrid, Spain for conversion to residential real estate; |
• | A second generation office building in Dublin, Ireland (‘Schoolhouse Lane’); and |
• | A site in suburban County Dublin, Ireland (the ‘Stillorgan Leisureplex’). |
• | A second generation office building in Dublin, Ireland (‘Baggot Plaza’); and |
• | A partially built development site in the Central Park portfolio in Dublin, Ireland (‘Block K’). |
Asset class | Fair value at 31 December 2016 £m1 | Range | ||||
Valuation technique | Input | Low | High | Weighted average | ||
Ireland | ||||||
Investment property under development | 9.0 | Investment | Build cost per sq ft2 (€) | 187.0 | 187.0 | 187.0 |
ERV per sq ft (€) | 52.0 | 52.0 | 52.0 | |||
Equivalent yield % | 5.5 | 5.5 | 5.5 | |||
Development land | 14.2 | Comparison | Price per acre (€’000) | 1,111 | 7,195 | 5,244 |
Rest of Europe | ||||||
Investment property under development | 69.1 | Residual | Build cost per sq m (€) | 880.00 | 1,015.00 | 945.00 |
Sales value per sq m3 (€) | 3,900.00 | 5,300.00 | 4,887.00 | |||
ERV per sq m (€) | 875.00 | 875.00 | 875.00 | |||
Net initial yield % | 3.8 | 3.8 | 3.8 | |||
Total | 92.3 |
Asset class | Fair value at 31 December 2015 £m1 | Range | ||||
Valuation technique | Input | Low | High | Weighted average | ||
Ireland | ||||||
Investment property under development | 92.7 | Residual | Build cost per sq ft2 (€) | 56.76 | 158.30 | 101.12 |
ERV per sq ft (€) | 15.00 | 50.00 | 31.90 | |||
Equivalent yield % | 4.7 | 7.0 | 5.8 | |||
Rest of Europe | ||||||
Investment property under development | 40.5 | Residual | Build cost per sq m3 (€) | 690.00 | 1,390.00 | 1,293.00 |
Sales value per sq m (€) | 3,660.00 | 5,400.00 | 4,699.00 | |||
ERV per sq m (€) | 770.00 | 1,040.00 | 908.00 | |||
Net initial yield % | 3.5 | 4.0 | 3.7 | |||
Total | 133.2 |
1. | Includes assets held-for-sale. |
2. | Square feet. |
3. | Square metres. |
Fair value at 31 December 20161,2 | Impact on valuations of a 5% change in ERV | Impact on valuations of a 25 bps change in equivalent yield | |||
Increase | Decrease | Increase | Decrease | ||
£m | £m | £m | £m | £m | |
United Kingdom | |||||
Retail | 435.8 | 12.0 | (11.5) | (17.3) | 18.9 |
Office | 830.1 | 34.1 | (34.0) | (37.2) | 40.5 |
Industrial | 171.2 | 5.2 | (5.0) | (6.5) | 7.0 |
Residential | 79.6 | 4.2 | (4.0) | (5.1) | 5.8 |
1,516.7 | 55.5 | (54.5) | (66.1) | 72.2 | |
Ireland | |||||
Retail | 159.3 | 5.7 | (5.1) | (4.9) | 5.5 |
Office | 524.2 | 22.5 | (21.7) | (25.4) | 28.0 |
Residential | 142.7 | 7.3 | (7.3) | (6.5) | 7.0 |
826.2 | 35.5 | (34.1) | (36.8) | 40.5 | |
Rest of Europe | |||||
Retail | 136.3 | 5.2 | (5.2) | (5.5) | 6.0 |
Office | 170.1 | 7.0 | (7.0) | (5.8) | 6.2 |
306.4 | 12.2 | (12.2) | (11.3) | 12.2 | |
2,649.3 | 103.2 | (100.8) | (114.2) | 124.9 |
1. | Includes adjustment in respect of straight line leases, which is recognized in the “Rent and other receivables” component of the consolidated balance sheet. |
2. | Includes assets held-for-sale. |
Fair value at 31 December 20151,2 | Impact on valuations of a 5% change in ERV | Impact on valuations of a 25 bps change in equivalent yield | |||
Increase | Decrease | Increase | Decrease | ||
£m | £m | £m | £m | £m | |
United Kingdom | |||||
Retail | 538.4 | 14.8 | (13.8) | (21.4) | 23.4 |
Office | 842.4 | 34.9 | (34.9) | (39.7) | 43.4 |
Industrial | 179.4 | 5.4 | (5.1) | (6.9) | 7.5 |
Residential | 66.4 | 4.1 | (3.8) | (4.5) | 5.4 |
1,626.6 | 59.2 | (57.6) | (72.5) | 79.7 | |
Ireland | |||||
Retail | 153.2 | 5.2 | (4.6) | (6.0) | 6.6 |
Office | 306.3 | 12.6 | (12.6) | (15.1) | 16.8 |
Residential | 76.7 | 3.5 | (3.5) | (3.8) | 4.2 |
536.2 | 21.3 | (20.7) | (24.9) | 27.6 | |
Rest of Europe | |||||
Retail | 116.7 | 4.5 | (4.5) | (4.5) | 4.9 |
Office | 141.6 | 5.5 | (5.5) | (4.8) | 5.1 |
258.3 | 10.0 | (10.0) | (9.3) | 10.0 | |
2,421.1 | 90.5 | (88.3) | (106.7) | 117.3 |
1. | Includes adjustment in respect of straight line leases, which is recognized in the “Rent and other receivables” component of the consolidated balance sheet. |
2. | Includes assets held-for-sale. |
Fair value at 31 December 20161 | Impact on valuation of a 5% change in build costs | Impact on valuations of a 5% change on ERV/sales value | Impact on valuations of a 25 bps change in net initial yield | ||||||
Increase | Decrease | Increase | Decrease | Increase | Decrease | ||||
£m | £m | £m | £m | £m | £m | £m | |||
Ireland | |||||||||
Investment property under development | 9.0 | (0.1) | 0.1 | 0.6 | (0.6) | (0.5) | 0.6 | ||
Development land | 14.2 | - | - | - | - | - | - | ||
Rest of Europe | |||||||||
Investment property under development | 69.1 | (0.3) | 0.3 | 3.7 | (3.7) | (3.8) | 4.3 | ||
92.3 | (0.4) | 0.4 | 4.3 | (4.3) | (4.3) | 4.9 |
Fair value at 31 December 20151 | Impact on valuation of a 5% change in build costs | Impact on valuations of a 5% change on ERV/sales value | Impact on valuations of a 25 bps change in net initial yield | ||||||
Increase | Decrease | Increase | Decrease | Increase | Decrease | ||||
£m | £m | £m | £m | £m | £m | £m | |||
Ireland | |||||||||
Investment property under development | 92.7 | (1.1) | 1.1 | 5.6 | (5.6) | (6.4) | 7.2 | ||
Rest of Europe | |||||||||
Investment property under development | 40.5 | (0.4) | 0.3 | 2.7 | (2.8) | (2.3) | 2.6 | ||
133.2 | (1.5) | 1.4 | 8.3 | (8.4) | (8.7) | 9.8 |
1. | Includes assets held-for-sale. |
18. | Loans secured by real estate |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Opening balance | 179.2 | 211.0 | |
Acquisition of loans secured by real estate | - | 130.4 | |
Disposal of collateral | (115.2) | (161.9) | |
Net fair value movement | 0.3 | 5.1 | |
Effects of translation to presentation currency | 3.3 | (5.4) | |
Closing balance | 67.6 | 179.2 |
• | Property operating income will be generated from the portfolio of loans secured by real estate; or |
• | Disposal of the collateral assets over time to achieve a redemption of the loan at a value greater than the acquisition cost; or |
• | Acquisition of the collateral asset by the Company for inclusion in the investment and development property portfolio. |
• | Performing an analysis of general market data including economic, governmental, environmental, credit market and local property market trends as they may affect the loans secured by real estate and the collateral properties; |
• | Holding discussions with the Group’s Investment Manager and the Board to understand expectations and intent regarding each loan secured by real estate, and to understand investment strategy and performance; |
• | Reviewing third party appraisal reports of the underlying collateral properties; |
• | Considering observable market inputs for assets similar to each of the loans secured by real estate and to the collateral properties to support the valuation metrics, capitalization rates and/or discount rates; |
• | Selecting appropriate valuation approaches based on the profile of each of the loans secured by real estate; |
• | Placing reliance on the cash flow models prepared by the Investment Manager on behalf of the Group which are based on the contractual terms of each of the loans secured by real estate and the Group’s expectations of proceeds from those collateral properties, together with reviewing the Group’s cash flow models for mathematical accuracy; |
• | Assessing the implied discount rate used to discount to present value of the cash flows to arrive at a fair value conclusion through benchmarking against similar securities and market indices; |
• | Performing a check of the cash flow models prepared by the Investment Manager on behalf of the Group, and confirming such models were consistent with the models used by the Investment Manager on behalf of the Group for investment purposes; and |
• | Analysing other facts and data considered to be pertinent to the loans secured by real estate and the collateral properties. |
Fair value 31 December 2016 | Impact on valuations of 100 bps change in discount rate | |||
Increase | Decrease | |||
£m | £m | £m | ||
United Kingdom | 44.4 | (0.3) | 0.3 | |
Ireland | 23.2 | (1.1) | 1.1 | |
67.6 | (1.4) | 1.4 |
Fair value 31 December 2015 | Impact on valuations of 100 bps change in discount rate | |||
Increase | Decrease | |||
£m | £m | £m | ||
United Kingdom | 157.3 | (0.3) | 0.3 | |
Ireland | 21.9 | (1.0) | 1.1 | |
179.2 | (1.3) | 1.4 |
19. | Property, plant and equipment |
Land and buildings | Plant and equipment | Fixtures and fittings | Other | Total | ||
£m | £m | £m | £m | £m | ||
Cost | ||||||
Balance at 1 January 2015 | 55.2 | 1.6 | 2.9 | 0.2 | 59.9 | |
Additions | 2.8 | 0.1 | 0.9 | 0.2 | 4.0 | |
Disposals | - | (0.1) | - | (0.1) | (0.2) | |
Revaluation of land and buildings | (2.6) | - | - | - | (2.6) | |
Effects of translation to presentation currency | (0.8) | - | - | - | (0.8) | |
Balance at 31 December 2015 | 54.6 | 1.6 | 3.8 | 0.3 | 60.3 | |
Additions | 9.6 | 0.2 | 0.4 | - | 10.2 | |
Transfer on completion of work in progress | 0.3 | - | - | (0.3) | - | |
Revaluation of land and buildings | 0.3 | - | - | - | 0.3 | |
Effects of translation to presentation currency | 3.5 | 0.3 | - | - | 3.8 | |
Balance at 31 December 2016 | 68.3 | 2.1 | 4.2 | - | 74.6 | |
Accumulated depreciation | ||||||
Balance at 1 January 2015 | - | (0.1) | (0.1) | - | (0.2) | |
Charge for the year | (1.3) | (0.2) | (0.7) | - | (2.2) | |
Revaluation of land and buildings | 1.3 | - | - | - | 1.3 | |
Balance at 31 December 2015 | - | (0.3) | (0.8) | - | (1.1) | |
Charge for the year | (1.6) | (0.5) | (1.1) | - | (3.2) | |
Write-offs | - | - | 1.3 | - | 1.3 | |
Revaluation of land and buildings | 1.6 | - | - | - | 1.6 | |
Effects of translation to presentation currency | - | (0.1) | (0.1) | - | (0.2) | |
Balance at 31 December 2016 | - | (0.9) | (0.7) | - | (1.6) | |
Carrying amounts | ||||||
At 31 December 2015 | 54.6 | 1.3 | 3.0 | 0.3 | 59.2 | |
At 31 December 2016 | 68.3 | 1.2 | 3.5 | - | 73.0 | |
• | Whether a property’s fair value can be reliably determined; |
• | Which valuation method should be applied for each asset – at 31 December 2016, the discounted cash flow methodology was applied using the projected net earnings capitalized with a market capitalization rate and discount rate; and |
• | The assumptions made for unobservable inputs used in the valuation method (the major unobservable inputs are estimated hotel net operating income, occupancy rate, discount rate, exit yield and average daily rate (‘ADR’)). |
Asset class | Fair value at 31 December 2016 £m | Inputs1 | United Kingdom | Ireland | ||||
United Kingdom | 41.2 | Net operating income | £4.0m | €2.4m | ||||
Ireland | 31.8 | Occupancy % | 74.0 | 68.0 | ||||
Discount rate % | 8.8 | 9.0 | ||||||
Exit yield % | 6.8 | 7.0 | ||||||
ADR | £162.36 | €115.00 | ||||||
Total | 73.0 | Stabilised year | 2021 | 2018 |
Asset class | Fair value at 31 December 2015 £m | Inputs1 | United Kingdom | Ireland | ||||
United Kingdom | 36.9 | Net operating income | £3.5m | €2.8m | ||||
Ireland | 22.3 | Occupancy % | 72.0 | 72.0 | ||||
Discount rate % | 9.0 | 9.0 | ||||||
Exit yield % | 6.5 | 7.0 | ||||||
ADR | £155.64 | €108.12 | ||||||
59.2 | Stabilised year | 2020 | 2018 |
1. | Inputs are presented in connection with a stabilised year. |
Fair value at 31 December 2016 | Impact on valuations of a 10% change in estimated Hotel NOI | Impact on valuations of 10% change in occupancy | Impact on valuations of 100 bps change in discount rate | Impact on valuations of a 50 bps change in exit yield | Impact of a 5% change in ADR | ||||||
Increase | Decrease | Increase | Decrease | Increase | Decrease | Increase | Decrease | Increase | Decrease | ||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
United Kingdom | 41.2 | 4.1 | (4.1) | 11.5 | (11.5) | (5.6) | 7.6 | (3.0) | 3.5 | 9.9 | (9.8) |
Ireland | 31.8 | 3.3 | (3.3) | 6.2 | (6.2) | (4.2) | 5.6 | (2.2) | 2.6 | 1.4 | (1.4) |
73.0 | 7.4 | (7.4) | 17.7 | (17.7) | (9.8) | 13.2 | (5.2) | 6.1 | 11.3 | (11.2) |
Fair value at 31 December 2015 | Impact on valuations of a 10% change in estimated Hotel NOI | Impact on valuations of 10% change in occupancy | Impact on valuations of 100 bps change in discount rate | Impact on valuations of a 50 bps change in exit yield | Impact of a 5% change in ADR | ||||||
Increase | Decrease | Increase | Decrease | Increase | Decrease | Increase | Decrease | Increase | Decrease | ||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
United Kingdom | 36.9 | 3.6 | (3.6) | 11.7 | (11.7) | (5.9) | 8.1 | (3.2) | 3.7 | 10.0 | (10.0) |
Ireland | 22.3 | 2.7 | (2.7) | 8.6 | (8.6) | (3.3) | 4.4 | (1.8) | 2.0 | 1.8 | (1.8) |
59.2 | 6.3 | (6.3) | 20.3 | (20.3) | (9.2) | 12.5 | (5.0) | 5.7 | 11.8 | (11.8) |
20. | Inventories |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Current | |||
Consumable stores | 0.3 | 0.3 | |
0.3 | 0.3 |
21. | Rent and other receivables |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Current | |||
Rent and trade receivables | 13.8 | 9.0 | |
Prepayments and other receivables | 9.7 | 6.6 | |
Straight line rent | 6.9 | 3.1 | |
VAT receivable | 2.1 | 7.4 | |
Deposits paid | - | 1.7 | |
Prepaid borrowing costs on undrawn facility | - | 0.6 | |
32.5 | 28.4 |
Gross | Allowance for impaired balances | Net | |
£m | £m | £m | |
Current | 11.5 | - | 11.5 |
Due 31 – 60 days | 0.4 | - | 0.4 |
Due 61 – 90 days | 0.1 | - | 0.1 |
Due 91 – 120 days | 1.2 | (0.2) | 1.0 |
Due 121 days and more | 1.3 | (0.5) | 0.8 |
14.5 | (0.7) | 13.8 |
Gross | Allowance for impaired balances | Net | |
£m | £m | £m | |
Current | 6.5 | - | 6.5 |
Due 31 – 60 days | 0.6 | - | 0.6 |
Due 61 – 90 days | 0.8 | - | 0.8 |
Due 91 – 120 days | 0.5 | - | 0.5 |
Due 121 days and more | 0.8 | (0.2) | 0.6 |
9.2 | (0.2) | 9.0 |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Opening balance | 0.2 | 0.5 | |
Additions | 0.7 | 1.2 | |
Written off as a bad debt | (0.1) | (0.2) | |
Released | (0.1) | (1.3) | |
Closing balance | 0.7 | 0.2 |
22. | Cash and cash equivalents |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Current | |||
Cash at bank and on hand | 210.0 | 146.1 | |
Short-term deposits | 246.5 | 180.4 | |
Cash and cash equivalents in the consolidated balance sheet | 456.5 | 326.5 | |
Cash and cash equivalents in the consolidated cash flow statement | 456.5 | 326.5 |
23. | Trade and other payables |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Trade creditors and accruals | 38.1 | 37.7 | |
Corporate and income taxes | 9.2 | 10.3 | |
VAT payable | 7.1 | 18.6 | |
Security deposits | 5.6 | 3.8 | |
Other liabilities | 1.3 | 1.5 | |
61.3 | 71.9 | ||
Current | 58.2 | 68.6 | |
Non-current | 3.1 | 3.3 | |
61.3 | 71.9 |
24. | Deferred income |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Current | |||
Deferred rental income | 31.8 | 29.8 | |
Prepaid rent | 4.9 | 1.6 | |
36.7 | 31.4 |
25. | Borrowings |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Secured | 721.8 | 841.3 | |
Unsecured | 969.5 | 594.8 | |
1,691.3 | 1,436.1 | ||
Unamortized borrowing costs, bonds discounts and bond premia | (14.1) | (21.8) | |
1,677.2 | 1,414.3 | ||
Disclosed as: | |||
Current | 0.6 | 0.3 | |
Non-current | 1,676.6 | 1,414.0 | |
1,677.2 | 1,414.3 |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Opening balance | 1,414.3 | 545.9 | |
Principal repayments on secured debt | (230.0) | (50.6) | |
Draw down of new secured debt | 67.1 | 351.2 | |
Proceeds on issue of £300.0 million 3.95% unsecured 7 year bond | - | 295.2 | |
Proceeds on £200.0 million tap of £300.0 million 3.95% unsecured 7 year bond | 200.0 | - | |
Proceeds on issue of €400.0 million 3.25% unsecured 10 year bond | - | 279.3 | |
Proceeds on €150.0 million tap of €400.0 million 3.25% unsecured 10 year bond | 118.6 | - | |
Premium on bond tap and note tap | 5.9 | - | |
Borrowing costs incurred | (3.3) | (8.6) | |
Amortization of borrowing costs and bond discounts, net of accretion of premia from bond and note taps | 6.2 | 3.7 | |
Effects of translation to presentation currency | 98.4 | (1.8) | |
Closing balance | 1,677.2 | 1,414.3 | |
Draw down date1 | Effective interest rate | Maturity | Fair value2 | Book value2 | ||||||
% | £m | £m | ||||||||
£184.0 million mortgage borrowing | 24 September 2014 | Libor + 1.80% | December 2019 | 164.9 | 167.3 | |||||
€264.0 million mortgage borrowing | 17 December 2014 | Euribor + 2.125% | December 20193 | 205.7 | 205.4 | |||||
£116.6 million mortgage borrowing | 31 January 2015 | Libor + 2.50% | 30 January 2018 | 45.7 | 45.6 | |||||
£70.7 million mortgage borrowing | 31 January 2015 | 2.90 | % | 30 January 2020 | 72.4 | 70.4 | ||||
£165.0 million mortgage borrowing | 31 January 2015 | 2.91 | % | 30 January 2023 | 167.4 | 161.0 | ||||
€37.25 million mortgage borrowing4 | 22 January 2016 | Euribor + 1.60% | 29 December 2030 | 31.6 | 30.6 | |||||
€50.0 million mortgage borrowing4 | 1 March 2016 | Euribor + 1.60% | 1 March 2031 | 37.0 | 36.0 | |||||
724.7 | 716.3 | |||||||||
Unamortized borrowing costs (included above) | 5.5 | |||||||||
721.8 |
1. | Draw down date or date of acquisition, whichever is later. |
2. | The fair value of floating rate borrowings have been established using an equivalent market value established by the Investment Manager determining the equivalent credit spread for this debt at the balance sheet date. The fair value of fixed rate borrowings have been calculated using a discounted cash flow approach. |
3. | This facility contains two options to extend the maturity date by one year each upon satisfaction of the conditions per the facility agreement and payment of a 0.2% extension fee. |
4. | Amortising loan. |
Draw down date1 | Effective interest rate | Maturity | Fair value2 | Book value2 | ||||||
% | £m | £m | ||||||||
As at 31 December 2015 | ||||||||||
€58.2 million mortgage borrowing | 24 June 2014 | Euribor + 2.75% | March 2019 | 35.5 | 34.6 | |||||
£127.0 million mortgage borrowing | 7 August 2014 | Libor + 1.90% | October 20193 | 101.7 | 100.0 | |||||
£184.0 million mortgage borrowing | 24 September 2014 | Libor + 1.80% | December 2019 | 171.1 | 174.2 | |||||
€264.0 million mortgage borrowing | 17 December 2014 | Euribor + 2.125% | December 20194 | 194.6 | 193.3 | |||||
£116.6 million mortgage borrowing | 31 January 2015 | Libor + 2.50% | 30 January 2018 | 98.2 | 98.5 | |||||
£70.7 million mortgage borrowing | 31 January 2015 | 2.90 | % | 30 January 2020 | 70.3 | 70.3 | ||||
£165.0 million mortgage borrowing | 31 January 2015 | 2.91 | % | 30 January 2023 | 158.3 | 160.8 | ||||
€3.1 million mortgage borrowing5 | 19 May 2015 | 2.92 | % | 1 September 2037 | 2.3 | 2.3 | ||||
832.0 | 834.0 | |||||||||
Unamortized borrowing costs (included above) | 7.3 | |||||||||
841.3 |
1. | Draw down date or date of acquisition, whichever is later. |
2. | The fair value of floating rate borrowings have been established using an equivalent market value established by the Investment Manager determining the equivalent credit spread for this debt at the balance sheet date. The fair value of fixed rate borrowings have been calculated using a discounted cash flow approach. |
3. | This facility contains two options to extend the maturity date by one year each upon 90 to 120 days prior notice, satisfaction of the conditions per the facility agreement and payment of a 0.125% extension fee. |
4. | This facility contains two options to extend the maturity date by one year each upon satisfaction of the conditions per the facility agreement and payment of a 0.2% extension fee. |
5. | Amortising loan. |
Issue date | Effective interest rate | Maturity | Fair value1 | Book value1 | |||||||
% | £m | £m | |||||||||
£500.0 million 3.95%, 7 year unsecured bond | 30 June 2015 | 3.95 | % | 30 June 2022 | 509.4 | 497.3 | |||||
€550.0 million 3.25%, 10 year unsecured note | 12 November 2015 | 3.25 | % | 12 November 2025 | 478.7 | 464.1 | |||||
988.1 | 961.4 | ||||||||||
Unamortized borrowing costs, discounts and premia | 8.1 | ||||||||||
969.5 |
Issue date | Effective interest rate | Maturity | Fair value1 | Book value1 | |||||||
% | £m | £m | |||||||||
£300.0 million 3.95%, 7 year unsecured bond | 30 June 2015 | 3.95 | % | 30 June 2022 | 295.1 | 293.5 | |||||
€400.0 million 3.25%, 10 year unsecured note | 12 November 2015 | 3.25 | % | 12 November 2025 | 294.3 | 287.9 | |||||
589.4 | 581.4 | ||||||||||
Unamortized borrowing costs and discounts | 13.4 | ||||||||||
594.8 |
1. | The fair value of each of the unsecured bonds and notes has been calculated using the quoted market price as at 31 December 2015. |
Draw down date | Effective interest rate | Maturity | Fair value | Book value | |||||
% | £m | £m | |||||||
£225.0 million revolving credit facility | 29 August 2014 | n/a | 29 August 2017 | (0.5) | (0.5) | ||||
(0.5) | (0.5) |
Draw down date | Effective interest rate | Maturity | Fair value | Book value | |||||
% | £m | £m | |||||||
£225.0 million revolving credit facility | 29 August 2014 | n/a | 29 August 2017 | (1.2) | (1.2) | ||||
(1.2) | (1.2) |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Due within one year | 0.6 | 0.3 | |
Due between two and five years | 498.2 | 677.3 | |
Due between six and ten years | 1,158.8 | 757.1 | |
Due greater than ten years | 33.7 | 1.4 | |
Closing balance | 1,691.3 | 1,436.1 |
Total | Floating rate | Fixed rate | Weighted average interest rate | Weighted average period for which rate is fixed | Weighted average period to maturity | |
£m | £m | £m | % | Years | Years | |
Gross borrowings in: Pound Sterling | 946.8 | 214.4 | 732.4 | 3.23 | 7.0 | 4.8 |
Euro | 744.5 | 275.1 | 469.4 | 2.79 | 10.0 | 7.7 |
1,691.3 | 489.5 | 1,201.8 | 3.03 | 8.2 | 6.1 |
Total | Floating rate | Fixed rate | Weighted average interest rate | Weighted average period for which rate is fixed | Weighted average period to maturity | |
£m | £m | £m | % | Years | Years | |
Gross borrowings in: Pound Sterling | 909.3 | 376.9 | 532.4 | 2.92 | 7.0 | 5.1 |
Euro | 526.8 | 229.7 | 297.1 | 2.80 | 10.0 | 7.2 |
1,436.1 | 606.6 | 829.5 | 2.88 | 8.0 | 5.9 |
• | consolidated net indebtedness (as defined in the applicable bond prospectus) does not exceed 60% of the total asset value; |
• | consolidated secured indebtedness (less cash and cash equivalents) does not exceed 50% of total asset value; |
• | interest coverage ratio to be at least 1.5 to 1.0; and |
• | unencumbered assets are not less than 125% of the unsecured indebtedness (less cash and cash equivalents). |
• | consolidated net indebtedness (as defined in the revolving loan agreement) does not exceed 60% of the total asset value; |
• | a minimum fixed charge coverage ratio where consolidated earnings before interest, tax, depreciation and amortization to consolidated fixed charges is not less than 1.9 to 1.0 for the last four quarters; |
• | a maximum secured recourse indebtedness for consolidated secured recourse debt does not exceed 2.5% of total asset value at any time; and |
• | unencumbered assets are not less than 125% of the unsecured indebtedness (less cash and cash equivalents). |
26. | Derivative financial instruments |
31 December 2016 | 31 December 2015 | ||
£m | £m | ||
Non-current assets | |||
Interest rate caps not designated as hedges | 0.3 | 0.9 | |
Foreign currency forward contracts designated as net investment hedges | - | 9.7 | |
0.3 | 10.6 | ||
Non-current liabilities | |||
Zero cost foreign currency options designated as net investment hedges | (17.3) | (2.3) | |
Interest rate cross currency swaps designated as net investment hedges | (32.4) | (7.8) | |
Foreign currency forward contracts designated as net investment hedges | (4.6) | - | |
(54.3) | (10.1) | ||
(54.0) | 0.5 |
27. | Financial instruments - fair value and risk management |
Carrying value | Fair value | Fair value through the profit and loss | Fair value hedging instruments | Other financial liabilities | Level 1 | Level 2 | Level 3 | |
£m | £m | £m | £m | £m | £m | £m | £m | |
Loans secured by real estate | 67.6 | 67.6 | 67.6 | - | - | - | - | 67.6 |
Derivative financial assets | 0.3 | 0.3 | 0.3 | - | - | - | 0.3 | - |
Total financial assets disclosed at fair value | 67.9 | 67.9 | 67.9 | - | - | - | 0.3 | 67.6 |
Borrowings | 1,677.2 | 1,712.8 | - | - | 1,712.8 | - | 988.1 | 724.7 |
Derivative financial liabilities | 54.3 | 54.3 | - | 54.3 | - | - | 54.3 | - |
Total financial liabilities disclosed at fair value | 1,731.5 | 1,767.1 | - | 54.3 | 1,712.8 | - | 1,042.4 | 724.7 |
Carrying value | Fair value | Fair value through the profit and loss | Fair value hedging instruments | Other financial liabilities | Level 1 | Level 2 | Level 3 | |
£m | £m | £m | £m | £m | £m | £m | £m | |
Loans secured by real estate | 179.2 | 179.2 | 179.2 | - | - | - | - | 179.2 |
Derivative financial assets | 10.6 | 10.6 | 0.9 | 9.7 | - | - | 10.6 | - |
Total financial assets disclosed at fair value | 189.8 | 189.8 | 180.1 | 9.7 | - | - | 10.6 | 179.2 |
Borrowings | 1,414.3 | 1421.4 | - | - | 1,421.4 | - | 589.4 | 832.0 |
Derivative financial liabilities | 10.1 | 10.1 | - | 10.1 | - | - | 10.1 | - |
Total financial liabilities disclosed at fair value | 1,424.4 | 1,431.5 | - | 10.1 | 1,421.4 | - | 599.5 | 832.0 |
• | market risk (including interest rate risk and foreign currency risk); |
• | credit risk; and |
• | liquidity risk. |
Impact on profit | Impact on net asset value | |||
31 December 2016 | 31 December 2015 | 31 December 2016 | 31 December 2015 | |
£m | £m | £m | £m | |
Increase of 100 bps | (1.5) | (3.7) | (1.5) | (3.7) |
Decrease of 100 bps | 0.3 | 1.9 | 0.3 | 1.9 |
Increase of 200 bps | (3.8) | (7.1) | (3.8) | (7.1) |
Decrease of 200 bps | 0.3 | 1.9 | 0.3 | 1.9 |
31 December 2016 | 31 December 2015 | |||
£m | £m | |||
Gross foreign currency assets | 1,407.3 | 1,129.7 | ||
Gross foreign currency liabilities | (1,165.0) | (944.0) | ||
Net exposure | 242.3 | 185.7 |
Impact on profit | Impact on net asset value | |||
31 December 2016 | 31 December 2015 | 31 December 2016 | 31 December 2015 | |
£m | £m | £m | £m | |
250 bps strengthening in exchange spot rate | (0.8) | (0.5) | (4.4) | (4.8) |
250 bps weakening in exchange spot rate | 0.8 | 0.5 | 4.4 | 4.8 |
500 bps strengthening in exchange spot rate | (1.5) | (0.9) | (8.6) | (9.7) |
500 bps weakening in exchange spot rate | 1.5 | 0.9 | 8.6 | 9.7 |
31 December 2016 | 31 December 2015 | |||
£m | £m | |||
United Kingdom | 5.2 | 7.7 | ||
Ireland | 1.6 | 1.3 | ||
Rest of Europe | 7.7 | 0.2 | ||
14.5 | 9.2 |
• | Euro, the interest rate is calculated by reference to Euribor plus a margin, and/or |
• | Pound Sterling, the interest rate is calculated by reference to Libor plus a margin. |
Less than 3 months | 3 to 12 months | 1 to 2 years | 2 to 5 years | Over 5 years | Total | |||
£m | £m | £m | £m | £m | £m | |||
Secured borrowings | 5.5 | 14.4 | 64.3 | 480.8 | 238.1 | 803.1 | ||
£500.0 million 3.95% 7 year unsecured bond1 | - | 18.8 | 18.8 | 56.4 | 539.4 | 633.4 | ||
€550.0 million 3.25% 10 year unsecured note2 | - | 15.3 | 15.3 | 45.8 | 530.5 | 606.9 | ||
Derivative financial instruments | - | - | 3.9 | 18.0 | 32.4 | 54.3 | ||
Trade and other payables | 25.9 | 2.7 | 0.2 | 1.3 | 1.6 | 31.7 | ||
31.4 | 51.2 | 102.5 | 602.3 | 1,342.0 | 2,129.4 |
1. | On 19 September 2016 the Company issued a further £200.0 million 3.95% senior unsecured bond as a tap to the original £300.0 million 3.95% senior unsecured bond issued on 30 June 2015. See Note 25C(i)(a). |
2. | On 19 April 2016 the Company issued a further €150.0 million 3.25% senior unsecured note as a tap to the original €400.0 million 3.25% senior unsecured note issued on 12 November 2015. See Note 25C(ii)(a). |
Less than 3 months | 3 to 12 months | 1 to 2 years | 2 to 5 years | Over 5 years | Total | |||
£m | £m | £m | £m | £m | £m | |||
Secured borrowings | 5.6 | 17.4 | 23.3 | 716.6 | 174.6 | 937.5 | ||
£300.0 million 3.95% 7 year unsecured bond | - | 10.2 | 10.2 | 30.6 | 320.7 | 371.7 | ||
€400.0 million 3.25% 10 year unsecured note | - | 9.6 | 9.6 | 28.7 | 342.7 | 390.6 | ||
Derivative financial instruments | - | - | - | 2.3 | 7.8 | 10.1 | ||
Trade and other payables | 30.0 | 1.6 | 1.7 | 1.1 | 0.7 | 35.1 | ||
35.6 | 38.8 | 44.8 | 779.3 | 846.5 | 1,745.0 |
31 December 2016 | 31 December 2015 | |||
£m | £m | |||
Borrowings (Note 25) | 1,677.2 | 1,414.3 | ||
Add: Unamortized borrowing costs (Note 25) | 14.1 | 21.8 | ||
1,691.3 | 1,436.1 | |||
Cash and cash equivalents (Note 22) | (456.5) | (326.5) | ||
Net debt (excluding unamortized borrowing costs) | 1,234.8 | 1,109.6 | ||
31 December 2016 | 31 December 2015 | |||
£m | £m | |||
Investment and development property (Note 17) | 2,741.6 | 2,554.3 | ||
Loans secured by real estate (Note 18) | 67.6 | 179.2 | ||
Property, plant and equipment (Note 19) | 73.0 | 59.2 | ||
2,882.2 | 2,792.7 | |||
31 December 2016 | 31 December 2015 | |
£m | £m | |
Portfolio value | 2,882.2 | 2,792.7 |
Net debt (excluding unamortized borrowing costs) | 1,234.8 | 1,109.6 |
Loan to value % | 42.8 | 39.7 |
28. | Stated capital |
Ordinary shares Number | |||
Authorised | |||
Ordinary shares | Unlimited | ||
Ordinary shares issued and fully paid | |||
Shares in issue at 1 January 2016 | 135,933,938 | ||
Ordinary shares bought back and cancelled as part of the Company’s share buyback programme | (9,800,531) | ||
At 31 December 2016 | 126,133,407 | ||
£m | |||
As at 1 January 2016 | 1,322.2 | ||
Ordinary shares bought back as part of the Company’s share buyback programme | (100.1) | ||
At 31 December 2016 | 1,222.1 | ||
Number of shares | Weighted average number of shares | ||
Year ended 31 December 2015 | |||
Number of shares in issue at 1 January 2015 | 135,283,293 | 135,283,293 | |
Ordinary shares issued on 26 February 2015 to partially settle the investment management fee for the period ending 31 December 2014 | 163,478 | 137,949 | |
Ordinary shares issued on 7 May 2015 to partially settle the investment management fee for the period ending 31 March 2015 | 155,201 | 101,200 | |
Ordinary shares issued on 6 August 2015 to partially settle the investment management fee for the period ending 30 June 2015 | 165,947 | 66,379 | |
Ordinary shares issued on 5 November 2015 to partially settle the investment management fee for the period ending 30 September 2015 | 166,019 | 25,017 | |
Number of ordinary shares in issue at 31 December 2015 | 135,933,938 | ||
Weighted average number of ordinary shares in issue for the year ending 31 December 2015 | n/a | 135,613,838 |
Year ended 31 December 2016 | |||
Number of shares in issue at 1 January 2016 | 135,933,938 | 135,933,938 | |
Ordinary shares bought back and cancelled as part of the Company’s share buyback programme | (9,800,531) | (1,569,313) | |
Number of ordinary shares in issue at 31 December 2016 | 126,133,407 | n/a | |
Weighted average number of ordinary shares in issue for the year ending 31 December 2016 | n/a | 134,364,625 |
29. | Dividends |
Per share dividend amount | Date of payment of dividend | Year ending 31 December 2016 | Year ending 31 December 2015 | ||
£m | £m | ||||
Interim dividend | 7 pence | 20 March 2015 | - | 9.5 | |
Interim dividend | 8 pence | 29 May 2015 | - | 10.8 | |
Interim dividend | 10 pence | 28 August 2015 | - | 13.6 | |
Interim dividend | 10 pence | 27 November 2015 | - | 13.6 | |
Interim dividend | 12 pence | 31 March 2016 | 16.3 | - | |
Interim dividend | 12 pence | 23 May 2016 | 16.3 | - | |
Interim dividend | 12 pence | 31 August 2016 | 16.3 | - | |
Interim dividend | 12 pence | 30 November 2016 | 15.5 | - | |
64.4 | 47.5 |
30. | Reserves |
31. | Related party transactions |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Investment management fee settled in cash | 16.3 | 9.6 | 4.2 |
Investment management fee settled through the issuance of new ordinary shares | - | 5.6 | 4.2 |
16.3 | 15.2 | 8.4 | |
Number of new ordinary shares issued to settle investment management fee | - | 650,645 | 244,781 |
• | to the extent restricted by law or regulation (in which case it is payable in cash); or |
• | the average closing price of the Company’s ordinary shares over the 20 days prior to the invoice date for the relevant fee is lower than the last reported NAV per ordinary share in which case the investment management fee is to be settled insofar as possible by the purchase of ordinary shares in the market at a price per ordinary share no greater than the last reported NAV per ordinary share and otherwise by the issuance of new ordinary shares at a price per share equal to the last reported NAV per ordinary share, up to an aggregate amount equal to the cash equivalent of that 50% fee portion. |
• | for the quarter ended 31 December 2015, the investment management fee payable to the Investment Manager totalled £4.1 million. Of this amount £1.9 million cash was paid on 31 December 2015. The remaining £2.2 million was satisfied by the Company through a cash payment of circa £0.1 million, and the share-based element of £2.1 million was satisfied by the purchase of ordinary shares for cash in the market for delivery to the Investment Manager. On 1 March 2016, 184,165 shares were acquired to settle the share-based element of the investment management fee. |
• | for the quarter ended 31 March 2016, the investment management fee payable to the Investment Manager totalled £4.0 million. Of this amount £2.0 million cash was paid on 31 March 2016. The remaining £2.0 million share-based element was satisfied by the purchase of ordinary shares for cash in the market for delivery to the Investment Manager. On 6 May 2016, 185,627 shares were acquired to settle the share-based element of the investment management fee. |
• | for the quarter ended 30 June 2016, the investment management fee payable to the Investment Manager totalled £4.2 million. Of this amount £2.1 million cash was paid on 29 June 2016. The remaining £2.1 million share-based element was satisfied through the purchase of ordinary shares for cash in the market for delivery to the Investment Manager. On 5 August 2016, 215,534 shares were acquired to settle the share-based element of the investment management fee. |
• | for the quarter ended 30 September 2016, the investment management fee payable to the Investment Manager totalled £4.2 million. Of this amount £2.1 million cash was paid on 30 September 2016. The remaining £2.1 million share-based element was satisfied by the purchase of ordinary shares for cash in the market for delivery to the Investment Manager. On 4 November 2016, 206,460 shares were acquired to settle the share-based element of the investment management fee. |
• | for the quarter ended 31 December 2016, the investment management fee payable to the Investment Manager totals £3.9 million. Of this amount £2.0 million was paid on 30 December 2016. The remaining £1.9 million share-based element will be satisfied insofar as possible by the purchase of ordinary shares for cash in the market for delivery to the Investment Manager at a price per ordinary share no greater than the last reported NAV per ordinary share and otherwise by the issuance of new ordinary shares at a price per share equal to the last reported NAV per ordinary share. |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Performance fee | - | 29.7 | - |
• | The excess of Shareholder Return over a 10% annual hurdle rate. The annual return hurdle resets annually to 10% of the sum of the previous accounting period’s EPRA NAV per ordinary share; and |
• | The excess of the year end EPRA NAV per ordinary share (which is adjusted to include total dividends declared or other distributions in the accounting period and adjusted to exclude the effects of any issuance of ordinary shares during that accounting period) over the relevant high water mark. The relevant high water mark in each accounting period is the greater of |
• | the closing EPRA NAV per ordinary share achieved in the reference period (which is the most recent accounting period in which a performance fee was payable) adjusted for total dividends or other distributions paid per ordinary share and adjusted to exclude the effects of any issue of ordinary shares during the reference period, and |
• | the gross opening NAV (being the gross cash and non-cash proceeds of the initial issue) plus further cash and non-cash issues of ordinary shares (excluding any issues of ordinary shares in part settlement of the investment management fee or the performance fee), calculated on a per ordinary share basis as at the end of the accounting period in respect of which the performance fee is calculated. |
• | One-third will be subject to a lock-up period of 12 months from the date of receipt of the ordinary shares; |
• | One-third will be subject to a lock-up period of 24 months from the date of receipt of the ordinary shares; and |
• | One-third will be subject to a lock-up period of 36 months from the date of receipt of the ordinary shares. |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£ | £ | £ | |
Charlotte Valeur | 145,000 | 145,000 | 147,682 |
William McMorrow | - | - | - |
Mark McNicholas | 100,000 | 100,000 | 101,849 |
Simon Radford | 100,000 | 100,000 | 93,082 |
Mary Ricks | - | - | - |
345,000 | 345,000 | 342,613 |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Investment management fee | 16.3 | 15.2 | 8.4 |
Directors’ fees | 0.3 | 0.3 | 0.3 |
Dividends earned by directors on shareholdings in the Company | 0.2 | 0.1 | - |
Costs reimbursed | 2.0 | 0.7 | - |
Performance fee | - | 29.7 | - |
18.8 | 46.0 | 8.7 |
31 December 2016 | 31 December 2015 | 31 December 2014 | ||
Number of shares | Number of shares | Number of shares | ||
Charlotte Valeur | - | - | - | |
William McMorrow | 200,149 | 80,916 | 80,916 | |
Mark McNicholas | - | - | - | |
Simon Radford | 12,500 | - | - | |
Mary Ricks | 280,149 | 120,916 | 80,916 | |
492,798 | 201,832 | 161,832 |
32. | Share-based payments |
33. | Group entities |
Incorporated and registered in Jersey Bizet Limited Jupiter Argyle Ltd Jupiter Friars Ltd Jupiter Holdco Ltd Jupiter Hull Limited Jupiter Marathon Ltd Jupiter Pennine Ltd Jupiter Rubislaw Ltd Jupiter Seafield Ltd Jupiter Showroom Ltd Jupiter Tradeco Ltd Jupiter Trident Ltd KW Artemis UK Properties HoldCo Ltd KW BPR Ltd KW Dukes Park Limited KW Gatsby Limited KW High Street Retail B Ltd KW Industrial B Ltd KW Industrial SPV 1 Ltd KW Industrial SPV 2 Ltd KW Ipswich Limited KW Italy Investments Holdco Limited* KW Office Limited KW Office SPV 1 Ltd (formerly KW Dionysus Ltd) KW Office SPV 2 Ltd (formerly KW Agamemnon Ltd) KW Office SPV 3 Ltd KW Olimpia Holdco Limited KW MH Limited KW Niobe Ltd KW Pioneer Point Limited KW Pioneer Point GP Limited (formerly KW Ringway Limited) KW Pioneer Point Limited Partnership KW Regional Office B Ltd KW Retail SPV 1 Ltd KW Retail SPV 2 Ltd (formerly Crumbie Ltd) KW Retail Warehouse SPV 1 Ltd KW Trade Co Ltd (formerly Bengal Ltd) KW UK Assets Holdco Ltd * KWVF Tiger Ltd KW Towers Limited | Gatsby Aberdeen Limited Gatsby Capital 1 Limited Gatsby Capital 2 Limited Gatsby Capital 3 Limited Gatsby Chatham Limited Gatsby Croydon Limited Gatsby GIR Limited Gatsby GR Limited Gatsby Grocery Limited Gatsby Industrial Limited Gatsby INV 1 Limited Gatsby Middlewich Limited Gatsby PFS Limited Gatsby PH Limited Gatsby Retail Limited Gatsby Saltash Limited Nessun Limited Scarlatti Limited SEO Bartley Wood Limited SEO Bracknell Limited SEO Farnborough Limited SEO Finance Limited SEO Harlow Limited SEO Langley Limited SEO Maidenhead Limited SEO Reading Limited SEO Stockley Limited SEO Watford Limited Triviata Limited Incorporated and registered in Republic of Ireland Cavalli Investments ICAV KW Investment Funds ICAV KW Portmarnock Ops Ltd | Incorporated and registered in Luxembourg KW Lux FinanceCo S.à.r.l. * KW Real Estate Lux S.à.r.l. * KW Investment Lux S.à.r.l. * KW Investment One Lux S.à.r.l. KW Investment Two Lux S.à.r.l. KW Investment Three Lux S.à.r.l. KW Investment Four Lux S.à.r.l. KW Investment Five Lux S.à.r.l. KW Investment Six Lux S.à.r.l. KW Investment Eight Lux S.à.r.l. KW Investment Nine Lux S.à.r.l. KW Investment Ten Lux S.à.r.l. KW Investment Eleven Lux S.à.r.l. KW Investment Twelve Lux S.à.r.l. Incorporated and registered in England or Scotland St Andrews Bay Development Ltd KW Pioneer Point UK OpCo Limited Incorporated and registered in Spain Alemina Investments, S.L. ** KW Spanish Holdco, SL KW LMG Propco 1, SL KW New Propco 1, SL KW Sol Propco, SL KW Sol Propco 2, SL KW Velazquez Propco1, SL KW Velazquez Propco 2, SL Leterana Servicios Y Gestiones, SL ** Parque Comercial Guadalhorce, SL Incorporated and registered in the Isle of Man Kish One Limited |
34. | Subsequent events |
35. | Capital commitments and contingencies |
36. | Operating lease arrangements |
31 December 2016 | 31 December 2015 | 31 December 2014 | |
£m | £m | £m | |
Not later than one year | 137.6 | 135.2 | 70.0 |
Later than one year but not more than five years | 423.5 | 413.4 | 216.8 |
Later than five years but not more than ten years | 242.4 | 257.1 | 150.9 |
More than ten years | - | - | 175.2 |
803.5 | 805.7 | 612.9 |
37. | Assets held-for-sale |
38. | Employee benefit expense |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 20141 | |
£m | £m | £m | |
Aggregate remuneration of employees comprises: | |||
Wages and salaries | 7.6 | 6.1 | 3.0 |
Social security costs | 0.7 | 0.5 | 0.3 |
Other pension costs | 0.1 | 0.1 | - |
Other employment cost | 0.2 | 0.1 | - |
8.6 | 6.8 | 3.3 | |
Average number of employees | 386 | 377 | 357 |
39. | Auditor’s remuneration |
Year ended 31 December 2016 | Year ended 31 December 2015 | Period from incorporation and ended 31 December 2014 | |
£m | £m | £m | |
Audit services1 | |||
Audit of the consolidated financial statements | 0.3 | 0.3 | 0.2 |
Audit of subsidiary undertakings | 0.2 | 0.1 | 0.1 |
0.5 | 0.4 | 0.3 | |
Audit related services | |||
Review of interim financial statements1 | 0.1 | 0.1 | 0.1 |
Capital markets transactions2,3 | - | 0.1 | 0.8 |
0.1 | 0.2 | 0.9 | |
Fees for other services | |||
Tax advisory services4 | 0.1 | 0.4 | 0.8 |
Transaction advisory services4 | - | 0.2 | 0.1 |
Tax compliance services1 | - | 0.1 | - |
0.1 | 0.7 | 0.9 | |
0.7 | 1.3 | 2.1 |
1. | Costs associated with these items are typically expensed through the income statement in the period in which the expense is incurred. |
2. | Costs associated with equity fundraisings are typically applied against the Stated Capital balance in the consolidated balance sheet. For further information, refer to Note 28. |
3. | Costs associated with debt transactions are typically capitalized into borrowing costs and amortized over the period of the associated debt. For further information, refer to Note 25. |
4. | Costs associated with these items may, depending on the nature of the transaction for which services are being provided, either be expensed during the period that a cost is incurred, or capitalized into the underlying cost base of the associated asset. |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | ||
Notes | £m | £m | £m | |
Revenue | ||||
Rental income | 96.5 | 93.6 | 191.5 | |
Hotel revenue | 10.2 | 8.7 | 19.4 | |
Interest income from loans secured by real estate | 4.7 | 3.5 | 6.3 | |
111.4 | 105.8 | 217.2 | ||
Property related expenses | (20.4) | (17.1) | (35.8) | |
Hotel cost of sales | (8.8) | (7.7) | (16.3) | |
(29.2) | (24.8) | (52.1) | ||
Gross profit | 82.2 | 81.0 | 165.1 | |
Gain on sale of investment and development property and loan collateral | 17 | 2.2 | 0.2 | 8.5 |
Net change in fair value of investment and development property | 9, 20 | 12.9 | 45.1 | (10.8) |
Net change in fair value of loans secured by real estate | 10 | 4.0 | 0.6 | 0.3 |
101.3 | 126.9 | 163.1 | ||
Expenses | ||||
Administrative expenses | (11.0) | (8.3) | (16.4) | |
Investment management fee | 18A(i) | (7.7) | (8.1) | (16.3) |
(18.7) | (16.4) | (32.7) | ||
Results from operating activities before financing income and costs | 82.6 | 110.5 | 130.4 | |
Interest income from cash and cash equivalents | 0.4 | 0.4 | 0.6 | |
Finance costs | (25.2) | (29.3) | (57.7) | |
Net finance expense | (24.8) | (28.9) | (57.1) | |
Profit before taxation | 57.8 | 81.6 | 73.3 | |
Taxation | 7 | (2.9) | (2.9) | (7.3) |
Profit for the period after taxation | 54.9 | 78.7 | 66.0 | |
Earnings per share (basic & diluted) | 8A | 43.5p | 57.9p | 49.1p |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | ||
Notes | £m | £m | £m | |
Profit for the period after taxation | 54.9 | 78.7 | 66.0 | |
Other comprehensive income: | ||||
Items that may be reclassified subsequently to profit or loss: | ||||
Foreign operations – foreign currency translation differences | 28.9 | 104.8 | 126.2 | |
Hedge of net investment in foreign operations | (21.4) | (72.5) | (93.0) | |
7.5 | 32.3 | 33.2 | ||
Items that will never be reclassified to profit or loss: | ||||
Net change in fair value of property, plant and equipment | 11 | (0.3) | 1.6 | 1.9 |
Other comprehensive income for the period | 7.2 | 33.9 | 35.1 | |
Total comprehensive income for the period, net of tax | 62.1 | 112.6 | 101.1 | |
Profit attributable to: | ||||
Owners of the Company | 54.8 | 78.7 | 65.9 | |
Non-controlling interests | 0.1 | - | 0.1 | |
54.9 | 78.7 | 66.0 | ||
Total comprehensive income attributable to: | ||||
Owners of the Company | 62.0 | 112.6 | 101.0 | |
Non-controlling interests | 0.1 | - | 0.1 | |
62.1 | 112.6 | 101.1 | ||
30 June 2017 | 30 June 2016 | 31 December 2016 | |||
Notes | £m | £m | £m | ||
Non-current assets | |||||
Investment and development property | 9 | 2,662.7 | 2,761.0 | 2,675.3 | |
Loans secured by real estate | 10 | 72.2 | 81.9 | 67.6 | |
Property, plant and equipment | 11 | 75.6 | 69.0 | 73.0 | |
Derivative financial assets | 13 | 0.1 | 0.5 | 0.3 | |
Deferred tax asset | 7 | 6.2 | 1.9 | 2.9 | |
2,816.8 | 2,914.3 | 2,819.1 | |||
Current assets | |||||
Inventories | 0.4 | 0.3 | 0.3 | ||
Rent and other receivables | 44.1 | 33.3 | 32.5 | ||
Assets held-for-sale | 9, 20 | 88.9 | 147.0 | 59.4 | |
Cash and cash equivalents | 454.8 | 459.0 | 456.5 | ||
588.2 | 639.6 | 548.7 | |||
Total assets | 3,405.0 | 3,553.9 | 3,367.8 | ||
Current liabilities | |||||
Trade and other payables | (56.9) | (66.2) | (58.2) | ||
Deferred income | (34.0) | (40.5) | (36.7) | ||
Borrowings | 12 | (35.3) | (76.2) | (0.6) | |
(126.2) | (182.9) | (95.5) | |||
Non-current liabilities | |||||
Trade and other payables | (3.4) | (3.3) | (3.1) | ||
Deferred tax liability | 7 | (5.5) | (1.1 | ) | (2.4) |
Borrowings | 12 | (1,640.7) | (1,642.8) | (1,676.6) | |
Derivative financial liabilities | 13 | (61.3) | (44.2) | (54.3) | |
(1,710.9) | (1,691.4) | (1,736.4) | |||
Total liabilities | (1,837.1) | (1,874.3) | (1,831.9) |
Net assets | 1,567.9 | 1,679.6 | 1,535.9 | ||
Equity | |||||
Stated capital | 15 | 1,222.1 | 1,322.2 | 1,222.1 | |
Foreign currency translation reserve | 32.0 | 23.6 | 24.5 | ||
Revaluation reserve | 2.9 | 2.9 | 3.2 | ||
Share-based payments reserve | 2.0 | 2.2 | 1.9 | ||
Retained earnings | 308.3 | 328.7 | 283.7 | ||
Equity attributable to owners of the Company | 1,567.3 | 1,679.6 | 1,535.4 | ||
Non-controlling interests | 0.6 | - | 0.5 | ||
Total equity | 1,567.9 | 1,679.6 | 1,535.9 |
Attributable to owners of the Company | Non- controlling interests | Total equity | ||||||
Stated capital | Foreign currency translation reserve | Revaluation reserve | Share- based payments reserve | Retained earnings | Total | |||
£m | £m | £m | £m | £m | £m | £m | £m | |
Balance as at 1 January 2017 | 1,222.1 | 24.5 | 3.2 | 1.9 | 283.7 | 1,535.4 | 0.5 | 1,535.9 |
Profit for the period | - | - | - | - | 54.8 | 54.8 | 0.1 | 54.9 |
Other comprehensive income | - | 7.5 | (0.3) | - | - | 7.2 | - | 7.2 |
Total comprehensive income for the period | - | 7.5 | (0.3) | - | 54.8 | 62.0 | 0.1 | 62.1 |
Transactions with owners of the Company recognized directly in equity: | ||||||||
Contributions and distributions | ||||||||
Share-based settlement of investment management fee (see Note 18A(i))1 | - | - | - | 0.1 | - | 0.1 | - | 0.1 |
Dividends (see Note 16) | - | - | - | - | (30.2) | (30.2) | - | (30.2) |
- | - | - | 0.1 | (30.2) | (30.1) | - | (30.1) | |
Total equity at 30 June 2017 | 1,222.1 | 32.0 | 2.9 | 2.0 | 308.3 | 1,567.3 | 0.6 | 1,567.9 |
1. | Net movement in share-based payment reserve representing reversal of £1.9 million opening reserve and recording of period end reserve for the investment management fee in the amount of £2.0 million. |
Attributable to owners of the Company | Non- controlling interests1 | Total equity | ||||||
Stated capital | Foreign currency translation reserve | Revaluation reserve | Share- based payments reserve | Retained earnings | Total | |||
£m | £m | £m | £m | £m | £m | £m | £m | |
Balance as at 1 January 2016 | 1,322.2 | (8.7) | 1.3 | 31.8 | 282.6 | 1,629.2 | - | 1,629.2 |
Profit for the period | - | - | - | - | 78.7 | 78.7 | - | 78.7 |
Other comprehensive income | - | 32.3 | 1.6 | - | - | 33.9 | - | 33.9 |
Total comprehensive income for the period | - | 32.3 | 1.6 | - | 78.7 | 112.6 | - | 112.6 |
Transactions with owners of the Company recognized directly in equity: | ||||||||
Contributions and distributions | ||||||||
Share-based settlement of investment management fee (see Note 18A(i))2 | - | - | - | 0.1 | - | 0.1 | - | 0.1 |
Performance fee expense (see Note 18A(ii)) | - | - | - | (29.7) | - | (29.7) | - | (29.7) |
Dividends (see Note 16) | - | - | - | - | (32.6) | (32.6) | - | (32.6) |
- | - | - | (29.6) | (32.6) | (62.2) | - | (62.2) | |
Total equity at 30 June 2016 | 1,322.2 | 23.6 | 2.9 | 2.2 | 328.7 | 1,679.6 | - | 1,679.6 |
1. | Non-controlling interests relate to certain development properties in Spain. During the period presented, such amounts are not material. |
2. | Net movement in share-based payment reserve representing reversal of £2.1 million opening reserve and recording of period end reserve for the investment management fee in the amount of £2.2 million. |
Attributable to owners of the Company | Non- controlling interests | Total equity | |||||||
Stated capital | Foreign currency translation reserve | Revaluation reserve | Share- based payments reserve | Retained earnings | Total | ||||
£m | £m | £m | £m | £m | £m | £m | £m | ||
Balance as at 1 January 2016 | 1,322.2 | (8.7) | 1.3 | 31.8 | 282.6 | 1,629.2 | - | 1,629.2 | |
Profit for the year | - | - | - | - | 65.9 | 65.9 | 0.1 | 66.0 | |
Other comprehensive income | - | 33.2 | 1.9 | - | - | 35.1 | - | 35.1 | |
Total comprehensive income for the year | - | 33.2 | 1.9 | - | 65.9 | 101.0 | 0.1 | 101.1 | |
Transactions with owners of the Company recognized directly in equity: | |||||||||
Contributions and distributions | |||||||||
Share-based settlement of investment management fee1 | - | - | - | (0.2) | - | (0.2) | - | (0.2) | |
Settlement of performance fee | - | - | - | (29.7) | - | (29.7) | - | (29.7) | |
Share buyback | (100.1) | - | - | - | - | (100.1) | - | (100.1) | |
Reclassification of non-controlling interest | - | - | - | - | (0.4) | (0.4) | 0.4 | - | |
Dividends | - | - | - | - | (64.4) | (64.4) | - | (64.4) | |
(100.1) | - | - | (29.9) | (64.8) | (194.8) | 0.4 | (194.4) | ||
Total equity at 31 December 2016 | 1,222.1 | 24.5 | 3.2 | 1.9 | 283.7 | 1,535.4 | 0.5 | 1,535.9 |
1. | Net movement in share-based payment reserve representing payment of investment management fee for the year ended 31 December 2015 in the amount of £2.1 million and recording of the reserve for the investment management fee payable for the year ended 31 December 2016 in the amount of £1.9 million. |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | |||
Notes | £m | £m | £m | ||
Cash flows from operating activities | |||||
Profit for the period | 54.9 | 78.7 | 66.0 | ||
Adjustments for: | |||||
Net change in fair value of investment and development property | (12.9) | (45.1) | 10.8 | ||
Net change in fair value of loans secured by real estate | 10 | (4.0) | (0.6) | (0.3) | |
Gain on sale of loan collateral | 17 | - | (0.4) | (0.4) | |
(Gain)/loss on sale of investment property and loan collateral | 17 | (2.2) | 0.2 | (8.1) | |
Write-off of property, plant and equipment | - | 0.2 | (1.3) | ||
Net finance cost | 21.0 | 19.9 | 43.3 | ||
Amortisation of loan fees | 12 | 1.2 | 1.8 | 5.5 | |
Amortisation of bond discount, net of amortisation of bond premia | 12 | 0.1 | 0.4 | 0.7 | |
Amortisation of lease incentive | (4.2) | (1.2) | (3.8) | ||
Taxation | 7 | 2.9 | 2.9 | 7.3 | |
Depreciation | 11 | 2.0 | 1.3 | 3.2 | |
Reversal of impairment of accounts receivable | 0.1 | 0.7 | 0.7 | ||
Investment management fee | 0.1 | - | (0.2) | ||
59.0 | 58.8 | 123.4 | |||
Decrease/(increase) in rent and other receivables | 1.4 | (6.1) | (3.0) | ||
Increase in inventories | (0.1) | - | - | ||
(Decrease)/increase in deferred rental income | (2.7) | 9.1 | 5.3 | ||
(Increase) in trade and other payables | (2.0) | (3.8) | (21.0) | ||
Cash generated from operations before interest and taxation | 55.6 | 58.0 | 104.7 | ||
Interest received | 4.3 | 3.9 | 7.4 | ||
Interest paid | (27.7) | (21.0) | (44.6) | ||
Derivative instruments | (1.7) | (0.2) | (1.0) | ||
Performance fee paid | 18A(ii) | - | (29.7) | (29.7) |
Tax paid | (6.8) | (5.4) | (7.1) | ||
Cash flows (used by)/generated from operating activities | 23.7 | 5.6 | 29.7 | ||
Investing activities | |||||
Acquisition/improvement of investment and development property | (20.6) | (241.9) | (282.2) | ||
Disposal of investment and development property | 17 | 48.4 | 62.0 | 256.0 | |
Capital expenditure on property, plant and equipment | 11 | (3.9) | (6.4) | (10.2) | |
Disposal of loans secured by real estate | - | 101.1 | 115.6 | ||
Cash flows from/(used in) investing activities | 23.9 | (85.2) | 79.2 |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | ||
Notes | £m | £m | £m | |
Financing activities | ||||
Proceeds from borrowings | - | 260.7 | 385.7 | |
Bond interest received in advance | - | 1.7 | 3.4 | |
Repayments of secured borrowings | 12 | (23.0) | (38.0) | (230.0) |
Draw down of revolving credit facility | - | - | 75.0 | |
Repayment of revolving credit facility | - | - | (75.0) | |
Transaction costs related to loans and borrowings | - | (1.6) | (3.5) | |
Bond premia received | - | 2.0 | 5.9 | |
Share buyback programme, inclusive of costs | - | - | (100.1) | |
Dividends paid | 16 | (30.2) | (32.6) | (64.4) |
Cash flows (used in)/from financing activities | (53.2) | 192.2 | (3.0) | |
Net (decrease)/increase in cash and cash equivalents | (5.6) | 112.6 | 105.9 | |
Cash and cash equivalents at beginning of period | 456.5 | 326.5 | 326.5 | |
Foreign exchange movements | 3.9 | 19.9 | 24.1 | |
Cash and cash equivalents at the reporting date | 454.8 | 459.0 | 456.5 |
Effective date1 | |||
IFRS 14: Regulatory Deferral Accounts2 | 1 January 2016 | ||
Amendments to IAS 7: Disclosure Initiative2 | 1 January 2017 | ||
Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealized Losses2 | 1 January 2017 | ||
IFRS 15: Revenue from Contracts with Customers (and certain subsequent amendments and clarifications) | 1 January 2018 | ||
IFRS 9: Financial Instruments (2009, and subsequent amendments in 2010, 2013 and 2014) | 1 January 2018 | ||
IFRS 16: Leases2 | 1 January 2019 | ||
Amendments to IFRS 2: Classification and measurement of share-based payment transactions2 | 1 January 2018 | ||
Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts2 | 1 January 2018 | ||
Annual improvements to IFRS 2014-2016 Cycle2 | 1 January 2017/1 January 2018 | ||
IFRIC Interpretation 22: Foreign Currency Transactions and Advance Consideration2 | 1 January 2018 | ||
Amendment to IAS 40: Transfers of Investment Property2 | 1 January 2018 | ||
IFRIC 23: Uncertainty over Income Tax Treatments2 | 1 January 2019 | ||
Amendments to IFRS 10 and IAS 28: Sale or contribution of assets between an investor and its associate or joint venture2 | Deferred indefinitely | ||
IFRS 17: Insurance Contracts2 | 1 January 2021 | ||
1. | The effective dates are those applying to European Union endorsed IFRS if endorsement has been received and if later than the IASB effective dates and relate to periods beginning on or after those dates detailed above. |
2. | Not European Union endorsed at the time of approval of the interim financial statements. |
• | Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities. |
• | Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. |
• | Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. |
Segment | Description |
Office real estate | Property which is primarily used by commercial tenants |
Retail real estate | Property comprising primarily high street retail or shopping centres, together with leisure assets |
Industrial real estate | Property used by tenants primarily for the purposes of manufacturing and distribution, or mixed use |
Residential real estate | Tenanted residential property, in the private rented sector |
Loans secured by real estate | A loan that is in default or close to being in default, receivership or liquidation, where the borrower is typically not making full payments and the loan to value (‘LTV’) is greater than 100% |
Hotels | Ownership and management of hotels, namely Fairmont St Andrews Hotel (United Kingdom) and Portmarnock Hotel (Ireland) |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Revenue | |||||||||
Rental income | 55.3 | 28.9 | 6.2 | 6.1 | - | - | 96.5 | - | 96.5 |
Hotel revenue | - | - | - | - | - | 10.2 | 10.2 | - | 10.2 |
Interest income from loans secured by real estate | - | - | - | - | 4.7 | - | 4.7 | - | 4.7 |
55.3 | 28.9 | 6.2 | 6.1 | 4.7 | 10.2 | 111.4 | - | 111.4 | |
Property related expenses | (11.1) | (6.5) | (0.4) | (2.3) | (0.1) | - | (20.4) | - | (20.4) |
Hotel cost of sales | - | - | - | - | - | (8.8) | (8.8) | - | (8.8) |
Administrative costs | - | - | - | - | - | (2.5) | (2.5) | - | (2.5) |
Net operating income | 44.2 | 22.4 | 5.8 | 3.8 | 4.6 | (1.1) | 79.7 | - | 79.7 |
Net change in fair value of investment and development property | (8.7) | 10.0 | 5.2 | 6.4 | - | - | 12.9 | - | 12.9 |
Net change in fair value of loans secured by real estate | - | - | - | - | 4.0 | - | 4.0 | - | 4.0 |
Gain/(loss) on sale | 2.2 | (0.1) | 0.1 | - | - | - | 2.2 | - | 2.2 |
37.7 | 32.3 | 11.1 | 10.2 | 8.6 | (1.1) | 98.8 | - | 98.8 | |
Overhead costs | |||||||||
Administrative expenses | (1.0) | (0.5) | (0.1) | (0.2) | (0.1) | - | (1.9) | (6.6) | (8.5) |
Investment management fee | - | - | - | - | - | - | - | (7.7) | (7.7) |
(1.0) | (0.5) | (0.1) | (0.2) | (0.1) | - | (1.9) | (14.3) | (16.2) | |
Results from operating activities before financing income and costs | 36.7 | 31.8 | 11.0 | 10.0 | 8.5 | (1.1) | 96.9 | (14.3) | 82.6 |
Interest income from cash and cash equivalents | - | - | - | - | - | - | - | 0.4 | 0.4 |
Finance costs | (6.4) | (7.0) | (1.2) | - | - | - | (14.6) | (10.6) | (25.2) |
(6.4) | (7.0) | (1.2) | - | - | - | (14.6) | (10.2) | (24.8) | |
Segment profit/(loss) before tax | 30.3 | 24.8 | 9.8 | 10.0 | 8.5 | (1.1) | 82.3 | (24.5) | 57.8 |
1. | Investment property under development, as identified in Note 9B(ii) is allocated into a segment based on the current expected future use. |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Revenue | |||||||||
Rental income | 48.6 | 33.0 | 7.2 | 4.8 | - | - | 93.6 | - | 93.6 |
Hotel revenue | - | - | - | - | - | 8.7 | 8.7 | - | 8.7 |
Interest income from loans secured by real estate | - | - | - | - | 3.5 | - | 3.5 | - | 3.5 |
48.6 | 33.0 | 7.2 | 4.8 | 3.5 | 8.7 | 105.8 | - | 105.8 | |
Property related expenses | (9.0) | (5.5) | (0.6) | (2.0) | - | - | (17.1) | - | (17.1) |
Hotel cost of sales | - | - | - | - | - | (7.7) | (7.7) | - | (7.7) |
Administrative costs | - | - | - | - | - | (2.3) | (2.3) | - | (2.3) |
Net operating income | 39.6 | 27.5 | 6.6 | 2.8 | 3.5 | (1.3) | 78.7 | - | 78.7 |
Net change in fair value of investment and development property | 20.8 | 13.4 | (1.3) | 12.2 | - | - | 45.1 | - | 45.1 |
Net change in fair value of loans secured by real estate | - | - | - | - | 0.6 | - | 0.6 | - | 0.6 |
(Loss)/gain on sale and other gains | (0.5) | 0.3 | - | - | 0.4 | - | 0.2 | - | 0.2 |
59.9 | 41.2 | 5.3 | 15.0 | 4.5 | (1.3) | 124.6 | - | 124.6 | |
Overhead costs | |||||||||
Administrative expenses | (1.1) | (1.0) | (0.2) | (0.3) | (0.2) | - | (2.8) | (3.2) | (6.0) |
Performance fee | - | - | - | - | - | - | - | - | - |
Investment management fee | - | - | - | - | - | - | - | (8.1) | (8.1) |
(1.1) | (1.0) | (0.2) | (0.3) | (0.2) | - | (2.8) | (11.3) | (14.1) | |
Results from operating activities before financing income and costs | 58.8 | 40.2 | 5.1 | 14.7 | 4.3 | (1.3) | 121.8 | (11.3) | 110.5 |
Interest income from cash and cash equivalents | - | - | - | - | - | - | - | 0.4 | 0.4 |
Finance costs | (7.2) | (9.7) | (1.6) | (0.8) | - | - | (19.3) | (10.0) | (29.3) |
(7.2) | (9.7) | (1.6) | (0.8) | - | - | (19.3) | (9.6) | (28.9) | |
Segment profit/(loss) before tax | 51.6 | 30.5 | 3.5 | 13.9 | 4.3 | (1.3) | 102.5 | (20.9) | 81.6 |
1. | Investment property under development, as identified in Note 9B(ii) is allocated into a segment based on the current expected future use. |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Revenue | |||||||||
Rental income | 103.6 | 64.9 | 13.9 | 9.1 | - | - | 191.5 | - | 191.5 |
Hotel revenue | - | - | - | - | - | 19.4 | 19.4 | - | 19.4 |
Interest income from loans secured by real estate | - | - | - | - | 6.3 | - | 6.3 | - | 6.3 |
103.6 | 64.9 | 13.9 | 9.1 | 6.3 | 19.4 | 217.2 | - | 217.2 | |
Property related expenses | (18.9) | (11.5) | (1.0) | (4.1) | (0.3) | - | (35.8) | - | (35.8) |
Hotel cost of sales | - | - | - | - | - | (16.3) | (16.3) | - | (16.3) |
Administrative costs | - | - | - | - | - | (4.8) | (4.8) | - | (4.8) |
Net operating income | 84.7 | 53.4 | 12.9 | 5.0 | 6.0 | (1.7) | 160.3 | - | 160.3 |
Net change in fair value of investment and development property | (29.6) | 7.4 | (5.0) | 16.4 | - | - | (10.8) | - | (10.8) |
Net change in fair value of loans secured by real estate | - | - | - | - | 0.3 | - | 0.3 | - | 0.3 |
Gain/(loss) on sale and other gains | 1.8 | 6.6 | (0.3) | - | 0.4 | - | 8.5 | - | 8.5 |
56.9 | 67.4 | 7.6 | 21.4 | 6.7 | (1.7) | 158.3 | - | 158.3 | |
Overhead costs | |||||||||
Administrative expenses | (2.5) | (1.4) | (0.3) | (0.6) | (0.3) | - | (5.1) | (6.5) | (11.6) |
Investment management fee | - | - | - | - | - | - | - | (16.3) | (16.3) |
(2.5) | (1.4) | (0.3) | (0.6) | (0.3) | - | (5.1) | (22.8) | (27.9) | |
Results from operating activities before financing income and costs | 54.4 | 66.0 | 7.3 | 20.8 | 6.4 | (1.7) | 153.2 | (22.8) | 130.4 |
Interest income from cash and cash equivalents | - | - | - | - | - | - | - | 0.6 | 0.6 |
Finance costs | (9.7) | (11.8) | (2.7) | (1.8) | - | - | (26.0) | (31.7) | (57.7) |
(9.7) | (11.8) | (2.7) | (1.8) | - | - | (26.0) | (31.1) | (57.1) | |
Segment profit/(loss) before tax | 44.7 | 54.2 | 4.6 | 19.0 | 6.4 | (1.7) | 127.2 | (53.9) | 73.3 |
1. | Investment property under development, as identified in Note 9B(ii) is allocated into a segment based on the current expected future use. |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate2 | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Assets | |||||||||
Current assets | 145.1 | 48.3 | 8.1 | 17.4 | 4.0 | 6.3 | 229.2 | 359.0 | 588.2 |
Segment assets | 1,592.0 | 837.9 | 189.7 | 267.9 | 76.2 | 82.3 | 3,046.0 | 359.0 | 3,405.0 |
Liabilities | |||||||||
Segment liabilities | (409.9) | (326.8) | (48.6) | (6.3) | (0.2) | (7.1) | (798.9) | (1,038.2) | (1,837.1) |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate2 | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Assets | |||||||||
Current assets | 79.0 | 103.8 | 12.8 | 61.4 | 4.9 | 4.8 | 266.7 | 372.9 | 639.6 |
Segment assets | 1,656.1 | 1,002.7 | 202.4 | 157.8 | 86.8 | 73.7 | 3,179.5 | 374.4 | 3,553.9 |
Liabilities | |||||||||
Segment liabilities | (358.9) | (500.0) | (92.5) | (45.5) | (0.1) | (5.5) | (1,002.5) | (871.8) | (1,874.3) |
Office real estate1 | Retail real estate1 | Industrial real estate1 | Residential real estate1 | Loans secured by real estate | Hotels | Segment total | Corporate2 | Total | |
£m | £m | £m | £m | £m | £m | £m | £m | £m | |
Assets | |||||||||
Current assets | 107.0 | 38.9 | 35.4 | 12.5 | 15.9 | 3.7 | 213.4 | 335.3 | 548.7 |
Total segment assets | 1,594.7 | 825.7 | 206.2 | 244.9 | 83.5 | 77.2 | 3,032.2 | 335.6 | 3,367.8 |
Liabilities | |||||||||
Total segment liabilities | (323.0) | (428.8) | (49.6) | (4.9) | (0.2) | (4.0) | (810.5) | (1,021.4) | (1,831.9) |
1. | Investment property under development, as identified in Note 9B(ii) is allocated into a segment based on the current expected future use. |
2. | Within current assets the ‘Corporate’ category comprises primarily cash and cash equivalents and within total segment assets, the ‘Corporate’ category comprises primarily cash and cash equivalents and derivative financial assets. Within total segment liabilities the ‘Corporate’ category comprises primarily the unsecured borrowings and derivative financial liabilities. Intercompany transactions have been removed from the calculation of segment assets and liabilities. |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | |
£m | £m | £m | |
United Kingdom | |||
Rental income | 60.9 | 62.4 | 124.0 |
Hotel revenue | 6.6 | 5.9 | 13.0 |
Interest income on loans secured by real estate | 2.6 | 3.2 | 6.0 |
Gain/(loss) on sale of investment property and loan collateral | 2.2 | (0.1) | 4.1 |
Net change in fair value of investment and development property | (5.7) | (15.8) | (77.5) |
Net change in fair value of loans secured by real estate | 4.8 | (0.1) | - |
71.4 | 55.5 | 69.6 | |
Ireland | |||
Rental income | 23.5 | 19.0 | 42.7 |
Hotel revenue | 3.6 | 2.8 | 6.4 |
Interest income on loans secured by real estate | 2.1 | 0.3 | 0.3 |
Gain on sale of investment property and loan collateral | - | 0.3 | 2.0 |
Net change in fair value of investment and development property | 16.5 | 45.9 | 50.7 |
Net change in fair value of loans secured by real estate | (0.8) | 0.7 | 0.3 |
44.9 | 69.0 | 102.4 | |
Rest of Europe | |||
Rental income | 12.1 | 12.2 | 24.8 |
Hotel revenue | - | - | - |
Interest income on loans secured by real estate | - | - | - |
Gain on sale of investment property and loan collateral | - | - | 2.4 |
Net change in fair value of investment and development property | 2.1 | 15.0 | 16.0 |
Net change in fair value of loans secured by real estate | - | - | - |
14.2 | 27.2 | 43.2 | |
Total | |||
Rental income | 96.5 | 93.6 | 191.5 |
Hotel revenue | 10.2 | 8.7 | 19.4 |
Interest income on loans secured by real estate | 4.7 | 3.5 | 6.3 |
Gain on sale of investment property and loan collateral | 2.2 | 0.2 | 8.5 |
Net change in fair value of investment and development property | 12.9 | 45.1 | (10.8) |
Net change in fair value of loans secured by real estate | 4.0 | 0.6 | 0.3 |
130.5 | 151.7 | 215.2 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
United Kingdom | 100.5 | 118.6 | 142.8 |
Ireland | 82.5 | 18.0 | 15.2 |
Rest of Europe | 34.1 | 137.6 | 45.4 |
217.1 | 274.2 | 203.4 | |
Corporate1 | 371.1 | 365.4 | 345.3 |
588.2 | 639.6 | 548.7 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
United Kingdom | 1,541.4 | 1,661.6 | 1,563.4 |
Ireland | 892.3 | 892.5 | 899.8 |
Rest of Europe | 383.0 | 359.9 | 355.8 |
2,816.7 | 2,914.0 | 2,819.0 | |
Corporate1 | 0.1 | 0.3 | 0.1 |
2,816.8 | 2,914.3 | 2,819.1 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
United Kingdom | 474.4 | 642.3 | 502.0 |
Ireland | 223.3 | 260.1 | 216.3 |
Rest of Europe | 89.1 | 91.8 | 85.4 |
786.8 | 994.2 | 803.7 | |
Corporate1 | 1,050.3 | 880.1 | 1,028.2 |
1,837.1 | 1,874.3 | 1,831.9 |
1. | Within current and non-current assets, the ‘Corporate’ category comprises primarily cash and cash equivalents and derivative financial assets. Within total liabilities the ‘Corporate’ category comprises primarily the unsecured borrowings and derivative financial liabilities. Intercompany transactions have been eliminated from the calculation of segment assets and liabilities. |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | |
£m | £m | £m | |
Current tax expense | |||
Current period | 3.1 | 1.8 | 5.8 |
3.1 | 1.8 | 5.8 | |
Deferred tax credit | |||
Tax effect of losses not previously recognized | (0.4) | - | (0.7) |
Tax effect of previously unrecognized deductible temporary differences | 0.2 | 1.1 | 2.2 |
(0.2) | 1.1 | 1.5 | |
Tax expense on continuing operations | 2.9 | 2.9 | 7.3 |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | ||||
£m | £m | £m | ||||
Tax expense reconciliation | ||||||
Profit before tax for the period | 57.8 | 81.6 | 73.3 | |||
Income tax charge using weighted average applicable tax rates | 11.9 | 16.3 | 15.8 | |||
Non-taxable income | (9.8) | (14.1) | (21.4) | |||
Non-taxable net fair value losses | 1.1 | 0.9 | 13.7 | |||
Current year losses for which no deferred tax is recognized | 0.1 | 0.8 | 0.3 | |||
Tax effect of losses not previously recognized | (0.4) | - | (0.7) | |||
Tax effect of previously unrecognized deductible temporary differences | 0.2 | 1.1 | 2.2 | |||
Expenses disallowed | 0.5 | 0.3 | 0.8 | |||
Changes in estimates related to prior years | (0.1) | (1.6) | (1.9) | |||
Other adjustments | (0.6) | (0.8) | (1.5) | |||
Tax charge | 2.9 | 2.9 | 7.3 | |||
Analysed as arising from: | ||||||
Investment and development property located in the United Kingdom | 2.4 | 1.4 | 3.3 | |||
Investment and development property located in Spain | 0.5 | 0.1 | 3.5 | |||
Luxembourg corporate taxes | - | 1.4 | 0.5 | |||
2.9 | 2.9 | 7.3 | ||||
Weighted average applicable tax rate | 20.5 | % | 20.0 | % | 21.5 | % |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | |
£m | £m | £m | |
Deferred tax asset | 6.2 | 1.9 | 2.9 |
Deferred tax liability | (5.5) | (1.1) | (2.4) |
0.7 | 0.8 | 0.5 | |
Analysed as arising from: | |||
Investment property | |||
Opening balance | (2.2) | - | - |
Origination and reversal of temporary differences | (0.2) | (1.1) | (2.2) |
Closing balance | (2.4) | (1.1) | (2.2) |
Tax losses | |||
Opening balance | 2.7 | 1.5 | 1.5 |
Origination and reversal of temporary differences | 0.4 | - | 0.7 |
Effects of translation to presentation currency | - | 0.4 | 0.5 |
Closing balance | 3.1 | 1.9 | 2.7 |
0.7 | 0.8 | 0.5 |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | |
£m | £m | £m | |
Tax losses brought forward | 10.8 | 11.5 | 10.5 |
Deductible temporary differences | 4.7 | 4.6 | 4.7 |
15.5 | 16.1 | 15.2 |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | |||||||
£m | p1 | £m | p1 | £m | p1 | ||||
Profit for the period after taxation | 54.9 | 43.5 | 78.7 | 57.9 | 66.0 | 49.1 | |||
Weighted average number of ordinary shares | 126,133,407 | 135,933,938 | 134,364,625 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
Investment property | |||
Opening balance | 2,594.9 | 2,367.0 | 2,367.0 |
Acquisition of investment property | - | 156.7 | 169.1 |
Disposal of investment property | (15.7) | (10.8) | (187.7) |
Improvements to investment property | 23.1 | 22.4 | 47.0 |
Transfer (to)/from investment property under development | (4.9) | - | 148.5 |
Transfer to assets held-for-sale (Note 20) | (77.7) | (90.5) | (48.3) |
Transfer from assets held-for-sale (Note 20) | 11.2 | - | - |
Net change in fair value | 11.7 | 20.7 | (35.0) |
Effects of translation to presentation currency | 30.7 | 108.5 | 134.3 |
Closing balance | 2,573.3 | 2,574.0 | 2,594.9 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
Investment property under development | |||
Opening balance | 80.4 | 133.2 | 133.2 |
Acquisition of investment property under development | - | 20.1 | 20.1 |
Disposal of investment property under development | - | - | (9.0) |
Development expenditure | 1.7 | 44.4 | 47.6 |
Transfer from/(to) investment property | 4.9 | - | (148.5) |
Transfer to assets held-for-sale | - | (56.5) | (11.1) |
Net change in fair value | (0.1) | 24.4 | 24.2 |
Effects of translation to presentation currency | 2.5 | 21.4 | 23.9 |
Closing balance | 89.4 | 187.0 | 80.4 |
Disclosed as: | |||
Carrying value of investment and development property | 2,662.7 | 2,761.0 | 2,675.3 |
Assets held-for-sale (Note 20) | 88.9 | 147.0 | 59.4 |
Adjustment in respect of straight line rent1 | 11.0 | 4.3 | 6.9 |
2,762.6 | 2,912.3 | 2,741.6 |
Asset class | Fair value at 30 June 2017 £m1,2 | Range | |||||||
Valuation technique | Input | Low | High | Weighted average | |||||
United Kingdom | |||||||||
Retail | 414.5 | Yield capitalisation | Annual rent per sq ft4 (£) | 4.11 | 154.19 | 13.85 | |||
ERV3 per sq ft (£) | 4.11 | 193.83 | 14.23 | ||||||
Equivalent yield % | 3.2 | 11.7 | 6.3 | ||||||
Office | 790.9 | Yield capitalisation | Annual rent per sq ft (£) | 8.85 | 58.00 | 18.61 | |||
ERV per sq ft (£) | 6.00 | 67.50 | 22.26 | ||||||
Equivalent yield % | 4.9 | 8.5 | 6.0 | ||||||
Industrial | 182.0 | Yield capitalisation | Annual rent per sq ft (£) | 1.25 | 11.50 | 4.23 | |||
ERV per sq ft (£) | 1.25 | 12.97 | 4.80 | ||||||
Equivalent yield % | 4.8 | 9.0 | 6.7 | ||||||
Aggregate United Kingdom (excluding residential) | 1,387.4 | Annual rent per sq ft (£) | 1.25 | 154.19 | 11.84 | ||||
ERV per sq ft (£) | 1.25 | 193.88 | 13.51 | ||||||
Equivalent yield % | 3.2 | 11.7 | 6.2 | ||||||
Residential | 88.7 | Yield capitalisation | ERV per unit (£) | 12,600.00 | 20,700.00 | 16,504.00 | |||
Equivalent yield % | 3.9 | 3.9 | 3.9 | ||||||
Aggregate United Kingdom (including Residential) | 1,476.1 | ||||||||
Ireland | |||||||||
Retail | 168.0 | Yield capitalisation | Annual rent per sq ft (€) | 6.25 | 255.83 | 30.26 | |||
ERV per sq ft (€) | 6.25 | 255.83 | 28.50 | ||||||
Equivalent yield % | 5.0 | 7.1 | 5.7 | ||||||
Office | 547.1 | Yield capitalisation | Annual rent per sq ft (€) | 15.19 | 52.69 | 32.33 | |||
ERV per sq ft (€) | 17.50 | 51.50 | 40.64 |
Equivalent yield % | 4.6 | 7.9 | 5.1 | ||||||
Aggregate Ireland (excluding Residential) | 715.1 | Annual rent per sq ft (€) | 6.25 | 255.83 | 31.69 | ||||
ERV per sq ft (€) | 6.25 | 255.83 | 36.86 | ||||||
Equivalent yield % | 4.6 | 7.1 | 5.3 | ||||||
Residential | 151.8 | Yield capitalisation | Annual rent per unit (€) | 18,422.00 | 20,463.00 | 20,586.00 | |||
ERV per unit (€) | 19,837.00 | 23,757.00 | 23,007.00 | ||||||
Equivalent yield % | 4.6 | 5.4 | 5.0 | ||||||
Aggregate Ireland (including Residential) | 866.9 |
Asset class | Fair value at 30 June 2017 £m1,2 | Range | |||||||
Valuation technique | Input | Low | High | Weighted average | |||||
Rest of Europe | |||||||||
Retail (Spain) | 143.4 | Yield capitalisation | Annual rent per sq m5 (€) | 29.67 | 1,256.33 | 138.67 | |||
ERV per sq m (€) | 38.88 | 900.00 | 176.91 | ||||||
Equivalent yield % | 5.3 | 9.0 | 6.7 | ||||||
Office (Italy) | 174.7 | Discounted cash flow | Annual rent per sq m (€) | 87.00 | 182.10 | 140.30 | |||
ERV per sq m (€) | 70.00 | 210.00 | 142.70 | ||||||
Equivalent yield % | 6.2 | 8.6 | 7.6 | ||||||
Aggregate Rest of Europe | 318.1 | ||||||||
Total | 2,661.1 |
1. | Includes adjustment in respect of straight line leases, which is recognized in the “Rent and other receivables” component of the condensed consolidated balance sheet. |
2. | Includes assets classified as held-for-sale. |
3. | Estimated rental value. |
4. | Square feet. |
5. | Square metres. |
Asset class | Fair value at 31 December 2016 £m1,2 | Range | ||||
Valuation technique | Input | Low | High | Weighted average | ||
United Kingdom | ||||||
Retail | 435.8 | Yield capitalisation | Annual rent per sq ft3 (£) | 4.11 | 154.19 | 14.70 |
ERV4 per sq ft (£) | 4.11 | 193.83 | 14.47 | |||
Equivalent yield % | 3.2 | 11.7 | 6.3 | |||
Office | 830.1 | Yield capitalisation | Annual rent per sq ft (£) | 8.75 | 57.18 | 19.82 |
ERV per sq ft (£) | 6.00 | 70.00 | 21.98 | |||
Equivalent yield % | 4.9 | 8.5 | 6.1 | |||
Industrial | 171.2 | Yield capitalisation | Annual rent per sq ft (£) | 1.25 | 11.08 | 4.32 |
ERV per sq ft (£) | 1.25 | 11.96 | 4.55 | |||
Equivalent yield % | 5.2 | 9.1 | 6.9 | |||
Aggregate United Kingdom (excluding residential) | 1,437.1 | Annual rent per sq ft (£) | 1.25 | 154.19 | 12.68 | |
ERV per sq ft (£) | 1.25 | 193.88 | 13.49 | |||
Equivalent yield % | 3.2 | 11.7 | 6.3 | |||
Residential | 79.6 | Yield capitalisation | ERV per unit (£) | 12,600.00 | 20,700.00 | 16,504.00 |
Equivalent yield % | 3.9 | 3.9 | 3.9 | |||
Aggregate United Kingdom (including Residential) | 1,516.7 | |||||
Ireland | ||||||
Retail | 159.3 | Yield capitalisation | Annual rent per sq ft (€) | 6.25 | 302.33 | 30.57 |
ERV per sq ft (€) | 6.25 | 232.56 | 27.44 | |||
Equivalent yield % | 5.0 | 7.4 | 5.7 | |||
Office | 524.2 | Yield capitalisation | Annual rent per sq ft (€) | 13.88 | 52.69 | 25.13 |
ERV per sq ft (€) | 17.00 | 51.50 | 40.10 | |||
Equivalent yield % | 4.6 | 6.7 | 5.1 |
Aggregate Ireland (excluding Residential) | 683.5 | Annual rent per sq ft (€) | 6.25 | 302.33 | 26.80 | |
ERV per sq ft (€) | 6.25 | 232.56 | 36.21 | |||
Equivalent yield % | 4.6 | 7.6 | 5.3 | |||
Residential | 142.7 | Yield capitalisation | Annual rent per unit (€) | 18,422.00 | 20,463.00 | 18,031.00 |
ERV per unit (€) | 19,837.00 | 23,757.00 | 20,409.00 | |||
Equivalent yield % | 4.6 | 5.4 | 5.0 | |||
Aggregate Ireland (including Residential) | 826.2 |
Asset class | Fair value at 31 December 2016 £m1,2 | Range | |||||
Valuation technique | Input | Low | High | Weighted average | |||
Rest of Europe | |||||||
Retail (Spain) | 136.3 | Yield capitalisation | Annual rent per sq m5 (€) | 34.68 | 1,237.00 | 139.14 | |
ERV per sq m (€) | 38.40 | 900.00 | 172.23 | ||||
Equivalent yield % | 5.6 | 9.3 | 6.8 | ||||
Office (Italy) | 170.1 | Discounted cash flow | Annual rent per sq m (€) | 86.40 | 180.80 | 139.40 | |
ERV per sq m (€) | 70.00 | 210.00 | 142.70 | ||||
Equivalent yield % | 6.2 | 8.6 | 7.8 | ||||
Aggregate Rest of Europe | 306.4 | ||||||
Total | 2,649.3 |
1. | Includes adjustment in respect of straight line leases, which is recognized in the “Rent and other receivables” component of the condensed consolidated balance sheet. |
2. | Includes assets classified as held-for-sale. |
3. | Square feet. |
4. | Estimated rental value. |
5. | Square metres. |
• | A second generation office building in Dublin, Ireland (‘Schoolhouse Lane’); |
• | A site in suburban County Dublin (the ‘Stillorgan Leisureplex’); |
• | A retail property at Puerta del Sol 9 in Madrid, Spain; and |
• | Residential real estate at Postigo de San Martín 3 in Madrid, Spain. |
Asset class | Fair value at 30 June 2017 £m1 | Range | |||||
Valuation technique | Input | Low | High | Weighted average | |||
Ireland | |||||||
Investment property under development | 16.0 | Investment | Build cost per sq ft (€) | 94.24 | 94.24 | 94.24 | |
ERV per sq ft (€) | 30.00 | 52.00 | 49.19 | ||||
Equivalent yield % | 5.3 | 5.5 | 5.4 | ||||
Development land | 14.6 | Comparison | Price per acre (€’000) | 1,111 | 7,195 | 5,244 | |
Rest of Europe | |||||||
Investment property under development | 70.9 | Residual | Build per sq m (€) | 880.00 | 1,015.00 | 945.00 | |
Sales value per sq m (€) | 4,000.00 | 6,000.00 | 5,460.00 | ||||
ERV per sq m (€) | 875.00 | 875.00 | 875.00 | ||||
Net initial yield % | 3.8 | 3.8 | 3.8 | ||||
Total | 101.5 |
1. | Includes assets held-for-sale. |
Asset class | Fair value at 31 December 2016 £m1 | Range | ||||
Valuation technique | Input | Low | High | Weighted average | ||
Ireland | ||||||
Investment property under development | 9.0 | Residual | Build per sq ft (€) | 187.0 | 187.0 | 187.0 |
ERV per sq ft (€) | 52.0 | 52.0 | 52.0 | |||
Net initial yield % | 5.5 | 5.5 | 5.5 | |||
Development land | 14.2 | Comparison | Price per acre (€’000) | 1,111 | 7,195 | 5,244 |
Rest of Europe | ||||||
Investment property under development | 69.1 | Residual | Build per sq m (€) | 880.00 | 1,015.00 | 945.00 |
Sales value per sq m (€) | 3,900.00 | 5,300.00 | 4,887.00 | |||
ERV per sq m (€) | 875.00 | 875.00 | 875.00 | |||
Net initial yield % | 3.8 | 3.8 | 3.8 | |||
Total | 92.3 |
1. | Includes assets held-for-sale. |
Fair value at 30 June 2017 | Impact on valuations of a 5% change in ERV | Impact on valuations of a 25 bps change in equivalent yield | |||
Increase | Decrease | Increase | Decrease | ||
£m1,2 | £m | £m | £m | £m | |
United Kingdom | |||||
Retail | 414.5 | 11.3 | (10.8) | (16.6) | 18.1 |
Office | 790.9 | 33.7 | (33.3) | (37.4) | 40.9 |
Industrial | 182.0 | 5.0 | (4.9) | (7.1) | 7.6 |
Residential | 88.7 | 4.4 | (3.8) | (4.8) | 6.1 |
1,476.1 | 54.4 | (52.8) | (65.9) | 72.7 | |
Ireland | |||||
Retail | 168.0 | 6.4 | (5.9) | (6.8) | 7.4 |
Office | 547.1 | 23.3 | (22.5) | (26.0) | 28.7 |
Residential | 151.8 | 6.9 | (6.9) | (7.6) | 8.4 |
866.9 | 36.6 | (35.3) | (40.4) | 44.5 | |
Rest of Europe | |||||
Retail | 143.4 | 5.6 | (5.6) | (5.8) | 6.3 |
Office | 174.7 | 7.4 | (7.4) | (5.9) | 6.3 |
318.1 | 13.0 | (13.0) | (11.7) | 12.6 | |
2,661.1 | 104.0 | (101.1) | (118.0) | 129.8 |
1. | Includes adjustment in respect of straight line leases, which is recognized in the “Rent and other receivables” component of the consolidated balance sheet. |
2. | Includes assets held-for-sale. |
Fair value at 31 December 20161,2 | Impact on valuations of a 5% change in ERV | Impact on valuations of a 25 bps change in equivalent yield | |||||
Increase | Decrease | Increase | Decrease | ||||
£m | £m | £m | £m | £m | |||
United Kingdom | |||||||
Retail | 435.8 | 12.0 | (11.5) | (17.3) | 18.9 | ||
Office | 830.1 | 34.1 | (34.0) | (37.2) | 40.5 | ||
Industrial | 171.2 | 5.2 | (5.0) | (6.5) | 7.0 | ||
Residential | 79.6 | 4.2 | (4.0) | (5.1) | 5.8 | ||
1,516.7 | 55.5 | (54.5) | (66.1) | 72.2 | |||
Ireland | |||||||
Retail | 159.3 | 5.7 | (5.1) | (4.9) | 5.5 | ||
Office | 524.2 | 22.5 | (21.7) | (25.4) | 28.0 | ||
Residential | 142.7 | 7.3 | (7.3) | (6.5) | 7.0 | ||
826.2 | 35.5 | (34.1) | (36.8) | 40.5 | |||
Rest of Europe | |||||||
Retail | 136.3 | 5.2 | (5.2) | (5.5) | 6.0 | ||
Office | 170.1 | 7.0 | (7.0) | (5.8) | 6.2 | ||
306.4 | 12.2 | (12.2) | (11.3) | 12.2 | |||
2,649.3 | 103.2 | (100.8) | (114.2) | 124.9 |
1. | Includes adjustment in respect of straight line leases, which is recognized in the “Rent and other receivables” component of the consolidated balance sheet. |
2. | Includes assets held-for-sale. |
Fair value at 30 June 2017 | Impact on valuation of a 5% change in build costs | Impact on valuation of a 5% change in ERV/sales value | Impact on valuation of a 25 bps change in net initial yield | |||||||
Increase | Decrease | Increase | Decrease | Increase | Decrease | |||||
£m1 | £m | £m | £m | £m | £m | £m | ||||
Ireland | ||||||||||
Investment property under development | 16.0 | (0.2) | 0.2 | 0.9 | (0.9) | (0.8) | 0.9 | |||
Development land | 14.6 | - | - | - | - | - | - | |||
Rest of Europe | ||||||||||
Investment property under development | 70.9 | (0.3) | 0.3 | 3.9 | (3.9) | (3.9) | 4.4 | |||
101.5 | (0.5) | 0.5 | 4.8 | (4.8) | (4.7) | 5.3 |
Fair value at 31 December 2016 | Impact on valuation of a 5% change in build costs | Impact on valuation of a 5% change in ERV/sales value | Impact on valuation of a 25 bps change in net initial yield | ||||
Increase | Decrease | Increase | Decrease | Increase | Decrease | ||
£m1 | £m | £m | £m | £m | £m | £m | |
Ireland | |||||||
Investment property under development | 9.0 | (0.1) | 0.1 | 0.6 | (0.6) | (0.5) | 0.6 |
Development land | 14.2 | - | - | - | - | - | - |
Rest of Europe | |||||||
Investment property under development | 69.1 | (0.3) | 0.3 | 3.7 | (3.7) | (3.8) | 4.3 |
92.3 | (0.4) | 0.4 | 4.3 | (4.3) | (4.3) | 4.9 |
1. | Includes assets held-for-sale. |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
Opening balance | 67.6 | 179.2 | 179.2 |
Disposal of collateral | - | (100.7) | (115.2) |
Net change in fair value | 4.0 | 0.6 | 0.3 |
Effects of translation to presentation currency | 0.6 | 2.8 | 3.3 |
Closing balance | 72.2 | 81.9 | 67.6 |
Fair value at 30 June 2017 | Impact on valuations of 100 bps change in discount rate | ||||
Increase | Decrease | ||||
£m | £m | £m | |||
United Kingdom | 49.2 | - | - | ||
Ireland | 23.0 | (1.0) | 1.0 | ||
72.2 | (1.0) | 1.0 |
Fair value at 31 December 2016 | Impact on valuations of 100 bps change in discount rate | |||
Increase | Decrease | |||
£m | £m | £m | ||
United Kingdom | 44.4 | (0.3) | 0.3 | |
Ireland | 23.2 | (1.1) | 1.1 | |
67.6 | (1.4) | 1.4 |
Asset class | Fair value at 30 June 2017 £m | Inputs1 | United Kingdom | Ireland | ||||
United Kingdom | 41.7 | Net operating income | £ | €2.2m | ||||
Ireland | 33.9 | Occupancy % | 74.0 | 66.0 | ||||
Discount rate % | 8.8 | 9.0 | ||||||
Exit yield % | 6.8 | 7.0 | ||||||
Average daily rate | £162.36 | €116.00 | ||||||
Total | 75.6 | Stabilized year | 2021 | 2018 |
Asset class | Fair value at 31 December 2016 £m | Inputs1 | United Kingdom | Ireland | ||||
United Kingdom | 41.2 | Net operating income | £4.0m | €2.4m | ||||
Ireland | 31.8 | Occupancy % | 74.0 | 68.0 | ||||
Discount rate % | 8.8 | 9.0 | ||||||
Exit yield % | 6.8 | 7.0 | ||||||
Average daily rate | £162.36 | €115.00 | ||||||
Total | 73.0 | Stabilized year | 2021 | 2018 |
1. | Inputs are presented in connection with a stabilized year. |
Fair value at 30 June 2017 | Impact on valuation of 10% change in estimated Hotel NOI | Impact on valuation of 10% change in occupancy % | Impact on valuation of 100 bps change in discount rate | Impact on valuation of 50 bps change in exit yield | Impact on valuation of 5% change in ADR | ||||||
Increase | Decrease | Increase | Decrease | Increase | Decrease | Increase | Decrease | Increase | Decrease | ||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
United Kingdom | 41.7 | 4.1 | (4.1) | 11.6 | (11.7) | (5.6) | 7.4 | (3.0) | 3.4 | 9.8 | (9.9) |
Ireland | 33.9 | 3.4 | (3.4) | 5.7 | (5.7) | (4.4) | 6.0 | (2.4) | 2.7 | 2.5 | (2.4) |
75.6 | 7.5 | (7.5) | 17.3 | (17.4) | (10.0) | 13.4 | (5.4) | 6.1 | 12.3 | (12.3) |
Fair value at 31 December 2016 | Impact on valuation of 10% change in estimated Hotel NOI | Impact on valuation of 10% change in occupancy % | Impact on valuation of 100 bps change in discount rate | Impact on valuation of 50 bps change in exit yield | Impact on valuation of 5% change in ADR | ||||||
Increase | Decrease | Increase | Decrease | Increase | Decrease | Increase | Decrease | Increase | Decrease | ||
£m | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m | |
United Kingdom | 41.2 | 4.1 | (4.1) | 11.5 | (11.5) | (5.6) | 7.6 | (3.0) | 3.5 | 9.9 | (9.8) |
Ireland | 31.8 | 3.3 | (3.3) | 6.2 | (6.2) | (4.2) | 5.6 | (2.2) | 2.6 | 1.4 | (1.4) |
73.0 | 7.4 | (7.4) | 17.7 | (17.7) | (9.8) | 13.2 | (5.2) | 6.1 | 11.3 | (11.2) |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
Secured | 706.4 | 980.8 | 721.8 |
Unsecured | 982.4 | 759.0 | 969.5 |
1,688.8 | 1,739.8 | 1,691.3 | |
Unamortized borrowing costs, bond discounts and bond premia | (12.8) | (20.8) | (14.1) |
1,676.0 | 1,719.0 | 1,677.2 |
Disclosed as: | |||
Current | 35.3 | 76.2 | 0.6 |
Non-current | 1,640.7 | 1,642.8 | 1,676.6 |
1,676.0 | 1,719.0 | 1,677.2 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
Opening balance | 1,677.2 | 1,414.3 | 1,414.3 |
Principal repayments on secured debt | (23.0) | (38.0) | (230.0) |
Draw down of new secured debt | - | 67.1 | 67.1 |
Draw down of revolving credit facility | - | 75.0 | - |
Proceeds on €150.0 million tap of €400.0 million 3.25% unsecured 10 year bond | - | 118.6 | 118.6 |
Proceeds on £200.0 million tap of £300.0 million 3.95% unsecured 7 year bond | - | - | 200.0 |
Premium on bond tap and note tap | - | - | 5.9 |
Borrowing costs incurred | - | (2.3) | (3.3) |
Premium paid on issue of €550.0 million 3.25% unsecured 10 year bond | - | 2.0 | - |
Amortisation of borrowing costs and bond discounts, net of accretion of premia from bond and note taps | 1.3 | 2.2 | 6.2 |
Effects of translation to presentation currency | 20.5 | 80.1 | 98.4 |
Closing balance | 1,676.0 | 1,719.0 | 1,677.2 |
Drawdown date1 | Effective interest rate | Maturity | Fair value2 | Book value | ||
% | £m | £m | ||||
£184.0 million mortgage borrowing | 24 September 2014 | Libor + 1.80% | December 2019 | 154.2 | 155.9 | |
€264.0 million mortgage borrowing | 17 December 2014 | Euribor + 2.125% | December 20193 | 212.8 | 211.2 | |
£116.6 million mortgage borrowing | 31 January 2015 | Libor + 2.50% | 30 January 2018 | 34.4 | 34.4 | |
£70.7 million mortgage borrowing | 31 January 2015 | 2.90 | % | 30 January 2020 | 71.5 | 70.4 |
£165.0 million mortgage borrowing | 31 January 2015 | 2.91 | % | 30 January 2023 | 166.9 | 161.1 |
€37.25 million mortgage borrowing4 | 22 January 2016 | Euribor + 1.60% | 29 December 2030 | 31.4 | 31.4 | |
€50.0 million mortgage borrowing4 | 1 March 2016 | Euribor + 1.60% | 1 March 2031 | 36.9 | 36.9 | |
708.1 | 701.3 | |||||
Unamortized borrowing costs (included above) | 5.1 | |||||
706.4 |
1. | Drawdown date or date of acquisition, whichever is later. |
2. | The fair value of floating rate borrowings has been established using an equivalent market value established by the Investment Manager determining the equivalent credit spread for this debt at the balance sheet date. The fair value of fixed rate borrowings has been calculated using a discounted cash flow approach. |
3. | This facility contains two options to extend the maturity date by one year each upon satisfaction of the conditions per the facility agreement and payment of a 0.2% extension fee. |
4. | Amortising loan. |
Drawdown date1 | Effective interest rate | Maturity | Fair value2 | Book value | ||
% | £m | £m | ||||
£184.0 million mortgage borrowing | 24 September 2014 | Libor + 1.80% | December 2019 | 164.9 | 167.3 | |
€264.0 million mortgage borrowing | 17 December 2014 | Euribor + 2.125% | December 20193 | 205.7 | 205.4 | |
£116.6 million mortgage borrowing | 31 January 2015 | Libor + 2.50% | 30 January 2018 | 45.7 | 45.6 | |
£70.7 million mortgage borrowing | 31 January 2015 | 2.90 | % | 30 January 2020 | 72.4 | 70.4 |
£165.0 million mortgage borrowing | 31 January 2015 | 2.91 | % | 30 January 2023 | 167.4 | 161.0 |
€37.25 million4 mortgage borrowing | 22 January 2016 | Euribor + 1.60% | 29 December 2030 | 31.6 | 30.6 | |
€50.0 million mortgage borrowing4 | 1 March 2016 | Euribor + 1.60% | 1 March 2031 | 37.0 | 36.0 | |
724.7 | 716.3 | |||||
Unamortized borrowing costs (included above) | 5.5 | |||||
721.8 |
1. | Drawdown date or date of acquisition, whichever is later. |
2. | The fair value of floating rate borrowings has been established using an equivalent market value established by the Investment Manager determining the equivalent credit spread for this debt at the balance sheet date. The fair value of fixed rate borrowings has been calculated using a discounted cash flow approach. |
3. | This facility contains two options to extend the maturity date by one year each upon satisfaction of the conditions per the facility agreement and payment of a 0.2% extension fee. |
4. | Amortising loan. |
Issue date | Effective interest rate | Maturity | Fair value | Book value | |||
% | £m1 | £m | |||||
£500.0 million 3.95%, 7 year unsecured bond | 30 June 2015 | 3.95 | % | 30 June 2022 | 513.4 | 497.6 | |
€550.0 million 3.25%, 10 year unsecured note | 12 November 2015 | 3.25 | % | 12 November 2025 | 482.7 | 477.1 | |
996.1 | 974.7 | ||||||
Unamortized borrowing costs, discounts and premia | 7.7 | ||||||
982.4 |
Issue date | Effective interest rate | Maturity | Fair value | Book value | ||||||
% | £m1 | £m | ||||||||
£500.0 million 3.95%, 7 year unsecured bond | 30 June 2015 | 3.95 | % | 30 June 2022 | 509.4 | 497.3 | ||||
€550.0 million 3.25%, 10 year unsecured bond | 12 November 2015 | 3.25 | % | 12 November 2025 | 478.7 | 464.1 | ||||
988.1 | 961.4 | |||||||||
Unamortized borrowing costs, discounts and premia | 8.1 | |||||||||
969.5 |
1. | The fair value of each of the unsecured bonds and notes has been calculated using the quoted market price as at the balance sheet date. |
30 June 2017 | 31 December 2016 | ||
£m | £m | ||
Due within one year | 35.3 | 0.6 | |
Due between two and five years | 948.7 | 498.2 | |
Due between six and ten years | 673.3 | 1,158.8 | |
Due greater than ten years | 31.5 | 33.7 | |
Closing balance | 1,688.8 | 1,691.3 |
Total | Floating rate | Fixed rate | Weighted average interest rate | Weighted average period for which rate is fixed | Weighted average period to maturity | |
£m | £m | £m | % | Years | Years | |
Gross borrowings in: Pound Sterling | 924.1 | 191.7 | 732.4 | 3.23 | 7.0 | 4.3 |
Euro | 764.7 | 282.3 | 482.4 | 2.79 | 10.0 | 7.2 |
1,688.8 | 474.0 | 1,214.8 | 3.03 | 8.2 | 5.6 |
Total | Floating rate | Fixed rate | Weighted average interest rate | Weighted average period for which rate is fixed | Weighted average period to maturity | |
£m | £m | £m | % | Years | Years | |
Gross borrowings in: Pound Sterling | 946.8 | 214.4 | 732.4 | 3.23 | 7.0 | 4.8 |
Euro | 744.5 | 275.1 | 469.4 | 2.79 | 10.0 | 7.7 |
1,691.3 | 489.5 | 1,201.8 | 3.03 | 8.2 | 6.1 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
Non-current assets | £m | £m | £m |
Interest rate caps not designated as hedges | 0.1 | 0.3 | 0.3 |
Foreign currency forward contracts designated as net investment hedges | - | 0.2 | - |
0.1 | 0.5 | 0.3 | |
Non-current liabilities | |||
Zero cost foreign currency options designated as net investment hedges | (17.6) | (14.8) | (17.3) |
Interest rate cross currency swaps designated as net investment hedges | (36.5) | (27.1) | (32.4) |
Foreign currency forward contracts designated as net investment hedges | (7.2) | (2.3) | (4.6) |
(61.3) | (44.2) | (54.3) | |
(61.2) | (43.7) | (54.0) |
Carrying value | Fair value | Fair value through the profit and loss | Fair value hedging instruments | Other financial liabilities | Level 1 | Level 2 | Level 3 | |
£m | £m | £m | £m | £m | £m | £m | £m | |
Loans secured by real estate | 72.2 | 72.2 | 72.2 | - | - | - | - | 72.2 |
Derivative financial assets | 0.1 | 0.1 | 0.1 | - | - | - | 0.1 | - |
Total financial assets disclosed at fair value | 72.3 | 72.3 | 72.3 | - | - | - | 0.1 | 72.2 |
Borrowings | 1,676.0 | 1,704.2 | - | - | 1,704.2 | - | 996.1 | 708.1 |
Derivative financial liabilities | 61.3 | 61.3 | - | 61.3 | - | - | 61.3 | - |
Total financial liabilities disclosed at fair value | 1,737.3 | 1,765.5 | - | 61.3 | 1,704.2 | - | 1,057.4 | 708.1 |
Carrying value | Fair value | Fair value through the profit and loss | Fair value hedging instruments | Other financial liabilities | Level 1 | Level 2 | Level 3 | |
£m | £m | £m | £m | £m | £m | £m | £m | |
Loans secured by real estate | 67.6 | 67.6 | 67.6 | - | - | - | - | 67.6 |
Derivative financial assets | 0.3 | 0.3 | 0.3 | - | - | - | 0.3 | - |
Total financial assets disclosed at fair value | 67.9 | 67.9 | 67.9 | - | - | - | 0.3 | 67.6 |
Borrowings | 1,677.2 | 1,712.8 | - | - | 1,712.8 | - | 988.1 | 724.7 |
Derivative financial liabilities | 54.3 | 54.3 | - | 54.3 | - | - | 54.3 | - |
Total financial liabilities disclosed at fair value | 1,731.5 | 1,767.1 | - | 54.3 | 1,712.8 | - | 1,042.4 | 724.7 |
30 June 2017 | 30 June 2016 | 31 December 2016 | ||
£m | £m | £m | ||
Gross foreign currency assets | 1,440.1 | 1,417.0 | 1,407.3 | |
Gross foreign currency liabilities | (1,180.4) | (1,266.3) | (1,165.0) | |
259.7 | 150.7 | 242.3 |
Impact on profit | Impact on net asset value | ||||
30 June 2017 | 31 December 2016 | 30 June 2017 | 31 December 2016 | ||
£m | £m | £m | £m | ||
250 bps strengthening in exchange spot rate | (0.2) | (0.8) | (4.8) | (4.4) | |
250 bps weakening in exchange spot rate | 0.2 | 0.8 | 4.8 | 4.4 | |
500 bps strengthening in exchange spot rate | (0.4) | (1.5) | (9.6) | (8.6) | |
500 bps weakening in exchange spot rate | 0.4 | 1.5 | 9.6 | 8.6 |
Less than 3 months | 3 to 12 months | 1 to 2 years | 2 to 5 years | Over 5 years | Total | |||
£m | £m | £m | £m | £m | £m | |||
Secured borrowings | 4.4 | 48.3 | 18.3 | 471.6 | 234.5 | 777.1 | ||
£500.0 million 3.95%, 7 year unsecured bond | - | 18.9 | 18.9 | 591.7 | - | 629.5 | ||
€550.0 million 3.25%, 10 year unsecured note | - | 15.7 | 15.7 | 47.0 | 545.1 | 623.5 | ||
Derivative financial instruments | - | 3.2 | 14.6 | 43.5 | - | 61.3 | ||
Trade and other payables | 26.2 | 2.6 | 0.2 | 2.0 | 1.2 | 32.2 | ||
30.6 | 88.7 | 67.7 | 1,155.8 | 780.8 | 2,123.6 |
Less than 3 months | 3 to 12 months | 1 to 2 years | 2 to 5 years | Over 5 years | Total | |||
£m | £m | £m | £m | £m | £m | |||
Secured borrowings | 5.5 | 14.4 | 64.3 | 480.8 | 238.1 | 803.1 | ||
£500.0 million 3.95%, 7 year unsecured bond | - | 18.8 | 18.8 | 56.4 | 539.4 | 633.4 | ||
€550.0 million 3.25%, 10 year unsecured note | - | 15.3 | 15.3 | 45.8 | 530.5 | 606.9 | ||
Derivative financial instruments | - | - | 3.9 | 18.0 | 32.4 | 54.3 | ||
Trade and other payables | 25.9 | 2.7 | 0.2 | 1.3 | 1.6 | 31.7 | ||
31.4 | 51.2 | 102.5 | 602.3 | 1,342.0 | 2,129.4 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
Borrowings (see Note 12) | 1,676.0 | 1,719.0 | 1,677.2 |
Add: Unamortized borrowing costs (see Note 12) | 12.8 | 20.8 | 14.1 |
1,688.8 | 1,739.8 | 1,691.3 | |
Cash and cash equivalents | (454.8) | (459.0) | (456.5) |
Net debt | 1,234.0 | 1,280.8 | 1,234.8 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
Investment and development property (see Note 9) | 2,762.6 | 2,912.3 | 2,741.6 |
Loans secured by real estate (see Note 10) | 72.2 | 81.9 | 67.6 |
Property, plant and equipment (see Note 11) | 75.6 | 69.0 | 73.0 |
2,910.4 | 3,063.2 | 2,882.2 | |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
£m | £m | £m | |
Total property portfolio | 2,910.4 | 3,063.2 | 2,882.2 |
Net debt | 1,234.0 | 1,280.8 | 1,234.8 |
Loan to value % | 42.4 | 41.8 | 42.8 |
Authorized | ||||
Ordinary shares (number) | Unlimited | |||
Ordinary shares issued and fully paid | ||||
Shares in issue at 1 January 2017 (number) | 126,133,407 | |||
At 30 June 2017 (number) | 126,133,407 | |||
Shares in issue at 1 January 2016 (number) | 135,933,938 | |||
At 30 June 2016 (number) | 135,933,938 | |||
£m | ||||
As at 1 January 2017 | 1,222.1 | |||
As at 30 June 2017 | 1,222.1 | |||
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | |||
Per share amount | Date of payment | £m | £m | |
Interim dividend | 12 pence | 31 March 2016 | - | 16.3 |
Interim dividend | 12 pence | 23 May 2016 | - | 16.3 |
Interim dividend | 12 pence | 31 March 2017 | 15.1 | - |
Interim dividend | 12 pence | 31 May 2017 | 15.1 | - |
30.2 | 32.6 |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | |
£m | £m | £m | |
Investment and development property | |||
Gross proceeds on disposal | 49.4 | 62.9 | 260.4 |
Surrender premium receivable on disposal | 8.2 | - | - |
Selling costs | (1.0) | (0.9) | (4.4) |
Net proceeds on disposal | 56.6 | 62.0 | 256.0 |
Carrying value | (54.4) | (62.2) | (247.9) |
Gain/(loss) on disposal | 2.2 | (0.2) | 8.1 |
Loan collateral | |||
Gross proceeds on disposal | - | 102.6 | 117.1 |
Selling costs | - | (1.5) | (1.5) |
Net proceeds on disposal | - | 101.1 | 115.6 |
Carrying value | - | (100.7) | (115.2) |
Gain on disposal | - | 0.4 | 0.4 |
2.2 | 0.2 | 8.5 |
• | For the quarter ended 31 December 2016, the investment management fee payable to the Investment Manager totalled £3.9 million. Of this amount £2.0 million cash was paid on 30 December 2016. The remaining £1.9 million share-based element was satisfied through the purchase of ordinary shares for cash in the market for delivery to the Investment Manager. On 23 February 2017, 194,937 shares were acquired to settle the share-based element of the investment management fee. |
• | For the quarter ended 31 March 2017, the investment management fee payable to the Investment Manager totalled £3.9 million. Of this amount £1.9 million cash was paid on 30 March 2017. The remaining £2.0 million share-based element was satisfied through the purchase of ordinary shares for cash in the market for delivery to the Investment Manager. On 5 May 2017, 186,194 shares were acquired to settle the share-based element of the investment management fee. |
• | For the quarter ended 30 June 2017, the investment management fee payable to the Investment Manager totals £3.9 million. Of this amount £1.9 million was paid on 29 June 2017. The remaining £2.0 million share-based element is expected to be satisfied in cash. |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | |
£ | £ | £ | |
Investment management fee | 7.7 | 8.1 | 16.3 |
Directors’ fees | 0.2 | 0.2 | 0.3 |
Directors’ fees related to the proposed merger | 0.6 | - | - |
Dividends earned by directors on shareholdings in the Company | 0.1 | 0.1 | 0.2 |
Costs reimbursed | 0.9 | 0.8 | 2.0 |
9.5 | 9.2 | 18.8 |
Six month period ended 30 June 2017 | Six month period ended 30 June 2016 | Year ended 31 December 2016 | |
£ | £ | £ | |
Charlotte Valeur | 72,500 | 72,500 | 145,000 |
William McMorrow | - | - | - |
Mark McNicholas | 50,000 | 50,000 | 100,000 |
Simon Radford | 50,000 | 50,000 | 100,000 |
Mary Ricks | - | - | - |
172,500 | 172,500 | 345,000 |
Six month period ended 30 June 2017 | |||
£ | |||
Charlotte Valeur | 315,219 | ||
William McMorrow | - | ||
Mark McNicholas | 135,311 | ||
Simon Radford | 127,500 | ||
Mary Ricks | - | ||
578,030 |
30 June 2017 | 30 June 2016 | 31 December 2016 | |
Number of shares | |||
Charlotte Valeur | - | - | - |
William McMorrow | 200,149 | 200,149 | 200,149 |
Mark McNicholas | - | - | - |
Simon Radford | 12,500 | 9,200 | 12,500 |
Mary Ricks | 280,149 | 280,149 | 280,149 |
492,798 | 489,498 | 492,798 |
• | A special distribution of 250 pence per Scheme Share (as defined in the Scheme circular) became payable to those Scheme Shareholders who were entitled to such a distribution under the terms of the Scheme, for a total amount of £240.3 million. This amount was paid on 20 October 2017. |
• | A closing dividend of £16.7 million is expected to be paid no later than 10 January 2018. |
As June 30, 2017 | |||||||||||||||||||||||||||||
KWE GBP IFRS | Note | US GAAP ADJ | KWE GBP US GAAP | KWE USD US GAAP | KWH (ex KWE) | Elimination | KWH as Reported | Pro Forma Adjustments | Note | Pro Forma Total | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Cash | £ | 454.8 | £ | — | £ | 454.8 | $ | 592.4 | $ | 672.4 | $ | — | $ | 1,264.8 | $ | (752.8 | ) | (a) | $ | 512.0 | |||||||||
Accounts receivable | 44.1 | (a) | (16.7 | ) | 27.4 | 35.7 | 57.7 | — | 93.4 | — | 93.4 | ||||||||||||||||||
Loan purchases and originations | 72.2 | (a) | (9.9 | ) | 62.3 | 81.1 | 6.1 | — | 87.2 | — | 87.2 | ||||||||||||||||||
Real estate and acquired in place lease values, net of accumulated depreciation and amortization | 2,738.3 | (b) | (370.9 | ) | 2,367.4 | 3,083.4 | 2,978.7 | — | 6,062.1 | — | 6,062.1 | ||||||||||||||||||
Investment in marketable securities | — | — | — | — | 409.7 | (409.7 | ) | — | — | — | |||||||||||||||||||
Unconsolidated investments | — | — | — | — | 499.0 | — | 499.0 | — | 499.0 | ||||||||||||||||||||
Other assets | 95.6 | (b) | (7.8 | ) | 87.8 | 190.6 | 87.2 | — | 277.8 | (0.5 | ) | (b) | 277.3 | ||||||||||||||||
Total assets | £ | 3,405.0 | £ | (405.3 | ) | £ | 2,999.7 | $ | 3,983.2 | $ | 4,710.8 | $ | (409.7 | ) | $ | 8,284.3 | $ | (753.3 | ) | $ | 7,531.0 | ||||||||
Accounts payable | £ | 60.3 | £ | (52.4 | ) | £ | 7.9 | $ | 10.2 | $ | 10.6 | $ | — | $ | 20.8 | $ | — | $ | 20.8 | ||||||||||
Accrued expenses and other liabilities | 100.8 | (b) | 90.8 | 191.6 | 247.0 | 184.4 | — | 431.4 | 6.5 | (c) | 437.9 | ||||||||||||||||||
Investment debt | 1,676.0 | — | 1,676.0 | 2,182.9 | 2,009.9 | — | 4,192.8 | — | 4,192.8 | ||||||||||||||||||||
Senior notes payable | — | — | — | — | 937.6 | — | 937.6 | — | 937.6 | ||||||||||||||||||||
Line of credit | — | — | — | 350.0 | — | 350.0 | — | (c) | 350.0 | ||||||||||||||||||||
Total liabilities | £ | 1,837.1 | £ | 38.4 | £ | 1,875.5 | $ | 2,440.1 | $ | 3,492.5 | $ | — | $ | 5,932.6 | $ | 6.5 | $ | 5,939.1 | |||||||||||
Kennedy-Wilson Holdings Inc. shareholders’ equity | 1,222.1 | (945.1 | ) | 277.0 | 442.7 | 1,215.9 | (442.7 | ) | 1,215.9 | 709.1 | (d) | 1,925.0 | |||||||||||||||||
Retained earnings (deficit) | 308.3 | (b) | (254.3 | ) | 54.0 | 14.0 | (132.0 | ) | (14.0 | ) | (132.0 | ) | (7.2 | ) | (d) | (139.2 | ) | ||||||||||||
Accumulated other comprehensive income | 36.9 | (c) | (39.2 | ) | (2.3 | ) | (47.0 | ) | (56.4 | ) | 47.0 | (56.4 | ) | (328.3 | ) | (d) | (384.7 | ) | |||||||||||
Non-controlling interests | 0.6 | 794.9 | 795.5 | 1,133.4 | 190.8 | — | 1,324.2 | (1,133.4 | ) | (d) | 190.8 | ||||||||||||||||||
Total equity | £ | 1,567.9 | £ | (443.7 | ) | £ | 1,124.2 | $ | 1,543.1 | $ | 1,218.3 | $ | (409.7 | ) | $ | 2,351.7 | $ | (759.8 | ) | $ | 1,591.9 | ||||||||
Total liabilities and equity | £ | 3,405.0 | £ | (405.3 | ) | £ | 2,999.7 | $ | 3,983.2 | $ | 4,710.8 | $ | (409.7 | ) | $ | 8,284.3 | $ | (753.3 | ) | $ | 7,531.0 |
Six Months Ended June 30, 2017 | ||||||||||||||||||||||||||||
KWE GBP IFRS | US GAAP ADJ | KWE GBP US GAAP | KWE | Non-KWE | Elimination | KWH as Reported | Pro Forma Adjustments | Note | Pro Forma Consolidated | |||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Rental | £ | 96.5 | £ | — | £ | 96.5 | $ | 121.3 | $ | 126.8 | $ | — | $ | 248.1 | $ | — | $ | 248.1 | ||||||||||
Hotel | 10.2 | — | 10.2 | 12.9 | 45.6 | — | 58.5 | — | 58.5 | |||||||||||||||||||
Sale of real estate | — | 1.4 | 1.4 | 1.8 | 11.8 | — | 13.6 | — | 13.6 | |||||||||||||||||||
Investment management, property services and research fees | — | — | — | — | 34.9 | (9.7 | ) | 25.2 | — | 25.2 | ||||||||||||||||||
Loan purchases, loan originations and other | 4.7 | 0.2 | 4.9 | 6.2 | 0.3 | — | 6.5 | — | 6.5 | |||||||||||||||||||
Total revenue | 111.4 | 1.6 | 113.0 | 142.2 | 219.4 | (9.7 | ) | 351.9 | — | 351.9 | ||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||
Commission and marketing | — | — | — | — | 3.7 | — | 3.7 | — | 3.7 | |||||||||||||||||||
Rental operating | 20.4 | 2.9 | 23.3 | 27.6 | 45.0 | — | 72.6 | — | 72.6 | |||||||||||||||||||
Hotel operating | 8.8 | (0.6 | ) | 8.2 | 11.6 | 35.6 | — | 47.2 | — | 47.2 | ||||||||||||||||||
Cost of real estate sold | — | 1.1 | 1.1 | 1.4 | 8.9 | — | 10.3 | — | 10.3 | |||||||||||||||||||
Compensation and related | — | 0.5 | 0.5 | 0.6 | 77.6 | — | 78.2 | — | 78.2 | |||||||||||||||||||
General and administrative | 9.0 | (5.3 | ) | 3.7 | 4.6 | 15.3 | — | 19.9 | — | 19.9 | ||||||||||||||||||
Depreciation and amortization | 2.0 | 40.7 | 42.7 | 54.1 | 47.7 | — | 101.8 | — | 101.8 | |||||||||||||||||||
Total operating expenses | 40.2 | 39.3 | 79.5 | 99.9 | 233.8 | — | 333.7 | — | 333.7 | |||||||||||||||||||
Income from unconsolidated investments | — | — | — | — | 35.9 | — | 35.9 | — | 35.9 | |||||||||||||||||||
Operating income | 71.2 | (37.7 | ) | 33.5 | 42.3 | 21.5 | (9.7 | ) | 54.1 | — | 54.1 | |||||||||||||||||
Non-operating income (expense) | ||||||||||||||||||||||||||||
Gain on sale of real estate | 2.2 | 7.7 | 9.9 | 12.5 | 59.2 | — | 71.7 | — | 71.7 | |||||||||||||||||||
Net change in fair value of investment property and loans | 16.9 | (16.9 | ) | — | — | — | — | — | — | — | ||||||||||||||||||
Acquisition-related gains | — | — | — | — | — | — | — | — | — | |||||||||||||||||||
Acquisition-related expenses | — | (3.3 | ) | (3.3 | ) | (4.3 | ) | 3.1 | — | (1.2 | ) | — | (1.2 | ) | ||||||||||||||
Interest expense - investment | (25.2 | ) | (2.4 | ) | (27.6 | ) | (34.8 | ) | (35.1 | ) | — | (69.9 | ) | — | (69.9 | ) | ||||||||||||
Interest expense - corporate | — | — | — | — | (32.2 | ) | — | (32.2 | ) | (6.5 | ) | (a) | (38.7 | ) | ||||||||||||||
Management fee | (7.7 | ) | — | (7.7 | ) | (9.7 | ) | — | 9.7 | — | — | |||||||||||||||||
Other income | 0.4 | 1.0 | 1.4 | 1.7 | 3.2 | — | 4.9 | (0.2 | ) | 4.7 | ||||||||||||||||||
Income (loss) before provision for income taxes | 57.8 | (51.6 | ) | 6.2 | 7.7 | 19.7 | — | 27.4 | (6.7 | ) | 20.7 | |||||||||||||||||
Provision for income taxes | (2.9 | ) | 0.4 | (2.5 | ) | (3.1 | ) | (1.5 | ) | — | (4.6 | ) | (0.5 | ) | (b) | (5.1 | ) | |||||||||||
Net income (loss) | 54.9 | (51.2 | ) | 3.7 | 4.6 | 18.2 | — | 22.8 | (7.2 | ) | 15.6 | |||||||||||||||||
Net (income) loss attributable to non-controlling interests | (0.1 | ) | (2.7 | ) | (2.8 | ) | (3.6 | ) | (9.0 | ) | — | (12.6 | ) | 3.6 | (c) | (9.0 | ) | |||||||||||
Net income (loss) attributable to Kennedy-Wilson Holdings, Inc | £ | 54.8 | £ | (53.9 | ) | £ | 0.9 | $ | 1.0 | $ | 9.2 | $ | — | $ | 10.2 | $ | (3.6 | ) | $ | 6.6 | ||||||||
Earnings per Share - Basic | $0.09 | $0.04 | ||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding - Basic | 111,945,354 | 37,226,695 | (d) | 149,172,049 | ||||||||||||||||||||||||
Earnings per Share - Diluted | $0.09 | $0.04 | ||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 111,945,354 | 37,226,695 | 149,172,049 |
Year Ended December 31, 2016 | |||||||||||||||||||||||||||||
KWE £ IFRS | US GAAP Adj £ | Note | KWE US GAAP £ | KWE US GAAP $ | KWH (ex KWE) | Elim | KWH as Reported | Pro Forma Adj | Note | Pro Forma Consolidated | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||
Rental | £ | 191.5 | £ | (3.3 | ) | (d) | £ | 188.2 | $ | 257.1 | $ | 228.8 | $ | — | $ | 485.9 | $ | — | $ | 485.9 | |||||||||
Hotel | 19.4 | — | 19.4 | 26.2 | 90.0 | — | 116.2 | — | 116.2 | ||||||||||||||||||||
Sale of real estate | — | 10.2 | (e) | 10.2 | 12.6 | 16.7 | — | 29.3 | — | 29.3 | |||||||||||||||||||
Investment management, property services and research fees | — | — | — | — | 81.6 | (22.2 | ) | 59.4 | — | 59.4 | |||||||||||||||||||
Loan purchases, loan originations and other | 6.3 | 2.2 | (a) | 8.5 | 11.4 | 1.2 | — | 12.6 | — | 12.6 | |||||||||||||||||||
Total revenue | 217.2 | 9.1 | 226.3 | 307.3 | 418.3 | (22.2 | ) | 703.4 | — | 703.4 | |||||||||||||||||||
Operating expenses | — | ||||||||||||||||||||||||||||
Commission and marketing | — | — | — | — | 8.0 | — | 8.0 | — | 8.0 | ||||||||||||||||||||
Rental operating | 35.8 | — | 35.8 | 53.3 | 82.1 | — | 135.4 | — | 135.4 | ||||||||||||||||||||
Hotel operating | 16.3 | — | 16.3 | 24.3 | 72.0 | — | 96.3 | — | 96.3 | ||||||||||||||||||||
Cost of real estate sold | — | 7.3 | (e) | 7.3 | 9.0 | 13.1 | — | 22.1 | — | 22.1 | |||||||||||||||||||
Compensation and related | — | 0.6 | 0.6 | 0.9 | 185.6 | — | 186.5 | — | 186.5 | ||||||||||||||||||||
General and administrative | 13.2 | (1.2 | ) | 12.0 | 11.0 | 34.4 | — | 45.4 | — | 45.4 | |||||||||||||||||||
Depreciation and amortization | 3.2 | 77.6 | (b) | 80.8 | 109.3 | 88.9 | — | 198.2 | — | 198.2 | |||||||||||||||||||
Total operating expenses | 68.5 | 84.3 | 152.8 | 207.8 | 484.1 | — | 691.9 | — | 691.9 | ||||||||||||||||||||
Income from unconsolidated investments | — | — | — | — | 126.6 | — | 126.6 | — | 126.6 | ||||||||||||||||||||
Operating income | 148.7 | (75.2 | ) | 73.5 | 99.5 | 60.8 | (22.2 | ) | 138.1 | — | 138.1 | ||||||||||||||||||
Non-operating income (expense) | — | ||||||||||||||||||||||||||||
Gain on sale of real estate | 8.5 | 57.0 | (f) | 65.5 | 86.5 | 44.2 | — | 130.7 | — | 130.7 | |||||||||||||||||||
Net change in fair value | (10.5 | ) | 10.5 | — | — | — | — | ||||||||||||||||||||||
Acquisition-related gains | — | — | — | — | 16.2 | — | 16.2 | — | 16.2 | ||||||||||||||||||||
Acquisition-related expenses | — | (4.5 | ) | (b) | (4.5 | ) | (6.6 | ) | (2.9 | ) | — | (9.5 | ) | — | (9.5 | ) | |||||||||||||
Interest expense - investment | (57.7 | ) | — | (57.7 | ) | (77.2 | ) | (60.2 | ) | — | (137.4 | ) | — | (137.4 | ) | ||||||||||||||
Interest expense - corporate | — | — | — | — | (54.2 | ) | — | (54.2 | ) | (11.1 | ) | (c) | (65.3 | ) | |||||||||||||||
Management fee | (16.3 | ) | — | (16.3 | ) | (22.2 | ) | — | 22.2 | — | — | — | |||||||||||||||||
Other income | 0.6 | 1.0 | (c) | 1.6 | 1.1 | 5.5 | — | 6.6 | — | 6.6 | |||||||||||||||||||
Income (loss) before provision for income taxes | 73.3 | (11.2 | ) | 62.1 | 81.1 | 9.4 | — | 90.5 | (11.1 | ) | 79.4 | ||||||||||||||||||
Provision for income taxes | (7.3 | ) | 3.8 | (g) | (3.5 | ) | (5.0 | ) | (9.0 | ) | — | (14.0 | ) | (17.7 | ) | (d) | (31.7 | ) | |||||||||||
Net income (loss) | 66.0 | (7.4 | ) | 58.6 | 76.1 | 0.4 | — | 76.5 | (28.8 | ) | 47.7 | ||||||||||||||||||
Net (income) loss attributable to noncontrolling interests | — | (46.2 | ) | (46.2 | ) | (59.8 | ) | (11.1 | ) | — | (70.9 | ) | 59.8 | (e) | (11.1 | ) | |||||||||||||
Preferred stock dividends and accretion of issuance costs | — | — | — | — | (2.8 | ) | — | (2.8 | ) | — | (2.8 | ) | |||||||||||||||||
Net income (loss) attributable to KWH | £ | 66.0 | £ | (53.6 | ) | £ | 12.4 | $ | 16.3 | $ | (13.5 | ) | $ | — | $ | 2.8 | $ | 31.0 | $ | 33.8 | |||||||||
Earnings per Share - Basic | $0.01 | $0.18 | |||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding - Basic | 109,094,530 | 37,226,695 | (f) | 146,321,225 | |||||||||||||||||||||||||
Earnings per Share - Diluted | $0.01 | $0.18 | |||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding - Diluted | 109,094,530 | 37,226,695 | 146,321,225 |
(a) | KWE has two types of loans secured by real estate, loan pools and loans with deteriorated credit quality where the intention is for KWE to obtain the underlying real estate. Under IFRS loans secured by real estate are recognized on an effective interest method. For US GAAP loan pools are recognized on a level yield basis under the provisions of Loans and Debt Securities Acquired with Deteriorated Credit Quality ASC Subtopic 310-30, where a level yield model is utilized to determine a yield rate which, based upon projected future cash flows, accretes interest income over the estimated holding period. When a loan or loans are acquired with deteriorated credit quality primarily for the rewards of collateral ownership, such loans are accounted for as loans until KWH Group is in possession of the collateral. However, accrual of income is not recorded during the conversion period under ASC Subtopic 310-30-25. Income is recognized to the extent that cash is received from the loan. |
(b) | Under IFRS property held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Group, is classified as investment property and recorded at fair value. Investment property also includes property that is being constructed or developed for future use as investment property. Investment property is recognized when it has been acquired and future economic benefits are expected to be derived from its ownership. Investment property is measured initially at its cost, including related transaction costs and subsequently measured at fair value with any change recognized in profit or loss. |
• | Capitalized acquisition-related costs are expensed. |
• | Above and below market lease values at date of acquisition are reclassified from real estate to other assets and accrued expenses, respectively. |
• | Fair value movements under IFRS are reversed. |
• | Depreciation of buildings and amortization of intangible lease values are added. |
(c) | KWE holds currency options on some of its euro denominated assets. The options have two components to their fair value calculations the intrinsic value of the option contract and the time value of money associated with the time until the options expiration. Under IFRS the intrinsic value is recorded to other comprehensive income while the option is |
(d) | Under US GAAP above and below market leases are amortized to rental income over the weighted average lease term at acquisition. |
(e) | Under US GAAP condominium projects are not treated as business combinations and therefore the sale of condo units is treated as a sale of an asset. In IFRS condos are treated as investment property and marked to fair value. |
(f) | Under IFRS real estate is marked to fair value and since KWE’s inception it has recognized a net fair value gain on real estate. In US GAAP real estate is held at historical cost plus capital expenditures and depreciated over the life of the building which leads to a net decrease in real estate balance over time. Do to the lower carrying value at the time of sale under US GAAP KWE has additional gains on sale. |
(g) | Under US GAAP KWE has lower tax expense due to the fact it has recognized less pretax income |
(in millions) | Cash | ||
KWH Cash Component | $ | (373.1 | ) |
KWE Special Distribution | (316.9 | ) | |
Transaction costs | (55.3 | ) | |
Interest income lost on KWH Cash Component | (0.2 | ) | |
Total | $ | (745.5 | ) |
(in millions) | KWH Shareholders’ Equity | ||
Issuance of shares to acquire noncontrolling interests in KWE | $ | 720.3 | |
Premium paid for noncontrolling interests in KWE | (276.9 | ) | |
Other comprehensive income relating to noncontrolling interest in KWE | 328.3 | ||
Transaction costs | (55.3 | ) | |
Total | $ | 716.4 |
Six Months Ended June 30, 2017 | |||||
KWH As Reported | Pro Forma Adjustments | Note | Pro Forma Consolidated | ||
(Dollars in millions) | |||||
Net income attributable to KWH common shareholders | $10.2 | $(3.6) | $6.6 | ||
Non-GAAP adjustments: | |||||
Interest expense - investment | 51.4 | 26.6 | (e) | 78.0 | |
Interest expense - corporate | 32.2 | 6.5 | 38.7 | ||
Depreciation and amortization | 63.4 | 41.3 | (e) | 104.7 | |
Provision for income taxes | 2.2 | 2.9 | (e) | 5.1 | |
Share-based compensation | 20.1 | — | 20.1 | ||
Adjusted EBITDA | $179.5 | $73.7 | $253.2 |
Six Months Ended June 30, 2017 | |||||||
KWH As Reported | Pro Forma Adjustments | Note | Pro Forma Consolidated | ||||
(Dollars in millions) | |||||||
Net income attributable to KWH common shareholders | $10.2 | $(3.6) | $6.6 | ||||
Non-GAAP adjustments: | |||||||
Depreciation and amortization | 63.4 | 41.3 | (e) | 104.7 | |||
Share-based compensation | 20.1 | — | 20.1 | ||||
Adjusted Net Income | $93.7 | $37.7 | $131.4 | ||||
Adjusted Net Income per Share - Diluted | $0.84 | — | $0.88 | ||||
Weighted Average Common Shares Outstanding - Diluted | 111,945,354 | 37,226,695 | (f) | 149,172,049 |