Investment Objective and Policy
The Company’s Objective is to maximise shareholders’ total returns by investing in the shares and securities of property companies and property related businesses internationally and also in investment property located in the UK.
For the year to 31 March 2016 the net asset value total return was 8.2% against a benchmark total return of 5.4%.The share price total return was -1.6%.
An interim dividend of 3.15p was paid on 5 January 2016.
A final dividend of 5.20p was paid on 2 August 2016 to shareholders on the register on 24th June 2016. The shares were quoted ex-dividend on 23 June 2016.
Income growth: Over the past ten years the annual net dividend per share has grown by 2.7 times, equivalent to 10.5% per annum compounded.
The benchmark is the FTSE EPRA/NAREIT Developed Europe Capped Net Total Return Index in Sterling. The index, calculated by FTSE, is free-float based and currently has 98 constituent companies (as at 31 March 2016). The index limits exposure to any one company to 10% and reweights the other constituents pro-rata. The benchmark website contains further details about the index and performance.
The investment selection process seeks to identify well managed companies of all sizes. The Manager generally regards future growth and capital appreciation potential more highly than immediate yield or discount to asset value. Although the investment objective allows for investment on an international basis, the benchmark is a Pan-European Index and the majority of the investments will be located in that geographical area. Direct property investments are located in the UK only. As a dedicated investor in the property sector the Company cannot offer diversification outside that sector, however, within the portfolio there are limitations, as set out below, on the size of individual investments held to ensure diversification within the portfolio.
Asset allocation guidelines
The maximum holding in the stock of any one issuer or of a single asset is limited to 15% of the portfolio at the point of acquisition. In addition, any holdings in excess of 5% of the portfolio must not in aggregate exceed 40% of the portfolio. The Manager currently applies the following guidelines for asset allocation;
|UK listed equities||25 - 50%|
|Continental European listed equities||45 - 75%|
|Direct Property - UK||5 - 20%|
|Other listed equities||0 - 5%|
|Listed bonds||0 - 5%|
|Unquoted investments||0 - 5%|
The company may employ levels of gearing from time to time with the aim of enhancing returns, subject to an overall maximum of 25% of the portfolio value. In certain market conditions the Manager may consider it prudent not to employ gearing on the balance sheet at all, and to hold part of the portfolio in cash. The current guideline is 10% net cash to 25% net gearing (as a percentage of portfolio value).
Investment properties are valued every 6 months by an external independent valuer. If a material event occurs in the intervening period, then an interim valuation will be instructed on the property in question. Valuations of all the Group’s properties as at 31 March 2016 have been carried out on a “Red Book” basis and these valuations have been adopted in the accounts.