
Ordinary Shares

Price (p)	149.40
Published NAV	171.60
Yield	3.89
Discount	-13.84

Prices correct as of close 2010-09-09. Last Published NAV is as at the previous business day. Source: Trustnet

Sigma Shares

Price (p)	66.90
Published NAV	88.60
Yield	2.99
Discount	-25.20

Prices correct as of close 2010-09-09. Last Published NAV is as at the previous business day. Source: Trustnet

For Ordinary Shares

May 2009
Pan European property stocks started the month strongly, rising 8% in the first week in a continuation of April’s rally, with UK stocks again in the lead. The romp came to an abrupt halt in the second week when a combination of the BOE inflation forecasts and Land Securities final results took the UK sector down 10% in a day, from which it only partially recovered during the rest of the month. On the Continent pricing was less volatile, but rights issues from Great Portland, Shaftesbury, Sponda and Befimmo were a reminder that, at current price levels, managements will continue to be opportunist in their search to bolster balance sheets. During the month the Ordinary share benchmark in Sterling fell 1.2%. The Ordinary class NAV rose 0.73% and the share price increased by 1.15%.

Though the final results from Land Securities and British Land were not far from expectations, share prices are well up with events given managements’ continued emphasis on caution and an absence of fresh strategy. As a result investor enthusiasm switched to well financed medium and small companies and Max Property successfully floated at a premium to NAV (we took stock here). Brixton rallied on an approach from Segro which hopefully will not involve ego overcoming reality.

The Trust’s final results for the year to end March 2009 were reported on 27 May and the announcement is available on the Trust’s website. Over the month gross cash declined from £52m to £46m chiefly as a result of further rights issue take-up. Net cash (adjusting for debt and the final dividend) declined from £31m to £25m. Over the month I continued to be worried that stock pricing is paying too little attention to future cash flow problems caused by declining rental values and that the problem of the banks debt is being ignored in the outlook for asset pricing.