abrdn Property Income Trust Limited Annual Results - December 2022

 
TIDMAPI 
 
Guernsey: 24 April 2023 
 
LEI: 549300HHFBWZRKC7RW84 
 
                      abrdn Property Income Trust Limited 
                           ("API" or the "Company") 
 
               FINAL RESULTS FOR THE YEARED 31 DECEMBER 2022 
 
FINANCIAL REVIEW AS AT 31 DECEMBER 2022 
 
  * NAV TOTAL RETURN of -12.8% (2021: 28.6%) for the year, 7.0% over 3 years, 
    21.9% over 5 years and 159.5% over 10 years. 
  * SHARE PRICE TOTAL RETURN of -19.0% (2021: 43.4%) for the year, -18.5% over 
    3 years, -11.8% over 5 years and 90.4% over 10 years. 
  * SHARE BUYBACKS totalling £12.4m in 2022 at significant discounts to NAV 
    which are accretive to both NAV performance and earnings (NAV per share 
    0.2p higher). 
  * FINANCIAL RESOURCES of £57.8m as at 31 December 2022 (2021: £50m) available 
    for investment to enhance earnings. 
  * LOAN-TO-VALUE of 22.6% (2021: 19.2%) at the year end with scope to increase 
    gearing through available revolving credit facility. 
  * DIVIDS PAID of 4.0p in the year (2021: 3.7725p) equating to a yield of 
    6.4% based on the share price as at 31 December 2022. 
  * DIVID YIELD of 6.4% compared to the Dividend yield of the FTSE All-Share 
    Index (3.6%) and FTSE All-Share REIT Index (4.6%) 
 
PORTFOLIO REVIEW AS AT 31 DECEMBER 2022 
 
  * PORTFOLIO TOTAL RETURN of -8.8% (2021: 22.6%) is marginally ahead of the 
    MSCI benchmark return of -8.9% and the Company has outperformed its 
    benchmark over all time periods. 
  * RENT COLLECTION for 2022 of 98.9% of rent due (2021: 96.0%). 
  * OCCUPANCY RATE of 90.2% (2021: 90.3%) compared to the MSCI rate of 90.0% 
    (2021: 90.0%) 
  * POSITIVE ASSET MANAGEMENT: A total of 6 lease renewals and restructurings 
    were undertaken, securing £567,954 p.a. in rent, and a total of 16 lettings 
    including agreements for lease securing £1,980,737 p.a. 
  * POSITIVE ASSET MANAGEMENT: 6 rent reviews were settled with uplifts in 
    rent, securing an additional £237,560 p.a. (an average increase of 11% on 
    previous rent) 
  * PORTFOLIO WELL POSITIONED - with a 55.7% weighting in Industrial, 21.6% 
    weighting in Office, 13.1% weighting in Retail and 9.6% weighting in 
    Other.  Figures Excluding the Company's investment in 1,471 hectares of 
    open moorland at Far Ralia. 
  * PV SCHEMES - The company has 7 operational PV schemes totalling 1.5 MWp and 
    is actively engaged in 24 additional schemes that would add a further 16.0 
    MWp 
 
The Company's Annual Report and Accounts for the year ended 31 December 2022 
and the Notice of the Annual General Meeting will shortly be available to view 
on the Company's corporate website at https://www.abrdnpit.co.uk/en-gb/ 
literature.  The Documents have also been submitted to the National Storage 
Mechanism and are available for inspection at https://data.fca.org.uk/#/nsm/ 
nationalstoragemechanism.  Hard copies will be posted to shareholders shortly. 
 
PERFORMANCE SUMMARY 
 
Earnings, Dividends & Costs                                31 December   31 December 
                                                                  2022          2021 
 
IFRS Earnings per share (p)                                    (13.11)         21.54 
 
EPRA earnings per share (p)                                       2.94          3.69 
(excl capital items & swap 
movements) * 
 
Dividends paid per ordinary                                        4.0        3.7725 
share (p) 
 
Dividend Cover (%)                                                  73            98 
 
Dividend Cover excluding                                            97            98 
non-recurring items (%) 
 
Dividend Yield (%) **                                              6.4           4.6 
 
FTSE All-Share Real Estate                                         4.6           2.6 
Investment Trusts Index Yield 
(%) 
 
FTSE All-Share Index Yield                                         3.6           3.1 
(%) 
 
Ongoing Charges *** 
 
As a % of average net assets                                       2.2           2.2 
including direct property 
costs 
 
As a % of average net assets                                       1.1           1.2 
excluding direct property 
costs 
 
Capital Values & Gearing                     31 December   31 December        Change 
                                                    2022          2021             % 
 
Total assets (£million)                            444.9         526.6        (15.5) 
 
Net asset value per share (p)                       84.8           101        (16.0) 
(note 21) 
 
Ordinary Share Price (p)                            62.4          81.5        (23.4) 
 
(Discount)/Premium to NAV (%)                     (26.4)        (19.3) 
 
Loan-to-value (%) ^                                 22.6          19.2 
 
Total Return                        1 year        3 year        5 year       10 year 
                                  % return      % return      % return      % return 
 
NAV #                               (12.8)           7.0          21.9         159.5 
 
AIC Property Direct - UK             (0.4)          20.9          39.6          32.1 
Commercial (weighted average) 
NAV Total Return 
 
Share Price #                       (19.0)        (18.5)        (11.8)          90.4 
 
AIC Property Direct - UK            (15.8)         (6.9)          12.5          17.8 
Commercial (weighted average) 
Share Price Total Return 
 
FTSE All-Share Real Estate          (31.6)        (25.8)        (15.0)          45.1 
Investment Trusts Index 
 
FTSE All-Share Index                   0.3           7.1          15.5          88.2 
 
Property Returns & Statistics                              31 December   31 December 
(%)                                                               2022          2021 
 
Portfolio income return                                            4.4           4.7 
 
MSCI Benchmark income return                                       4.1           4.4 
 
Portfolio total return                                           (8.8)          22.6 
 
MSCI Benchmark total return                                      (8.9)          16.3 
 
Void rate                                                          9.8           9.7 
 
* Calculated as profit for the period before tax (excluding capital items & 
swaps costs) divided by weighted average number of shares in issue in the 
period. EPRA stands for European Public Real Estate Association. 
 
** Based on dividend paid of 4.0p and the share price at 31 December 2022 of 
62.4p. 
 
*** Calculated as investment manager fees, auditor's fees, directors' fees and 
other administrative expenses divided by the average NAV for the year. 
 
^ Calculated as bank borrowings less all cash as a percentage of the open 
market value of the property portfolio as at the end of each year. 
 
# Assumes re-investment of dividends excluding transaction costs. 
 
Sources: abrdn, MSCI 
 
CHAIR'S STATEMENT 
 
Background 
 
With the threat and disruption from COVID-19 abating, it would have been 
reasonable to hope that 2022 would be a year of stability and recovery. 
However, it turned out to be quite the contrary. The impact of Russia's 
invasion of Ukraine was the prevalent issue in the early part of the year. 
 
This led, in part, to a sustained surge in inflation and a corresponding 
reaction by the Bank of England, and other Central Banks, to raise interest 
rates. Gilt yields rose through the year until late September, but volatility 
in the UK Government bond market reached unprecedented levels in late September 
/early October when it reacted negatively to Liz Truss's "Growth Plan" which 
triggered a slump in the UK commercial property market. 
 
UK Real Estate Market 
 
2022 was very much a year of two halves, with the first six months continuing 
the positive capital growth recorded throughout 2021. The third quarter was the 
tipping point at which the increase in inflation and interest rates, along with 
unexpected government economic policy announcements, led to a spike in gilt 
yields. With a rapid repricing of the "risk-free" rate, real estate values 
reversed, resulting in the largest monthly capital declines ever recorded by 
MSCI in October and November. 
 
Perhaps surprisingly, the industrial sector was largely responsible for not 
only the positive capital growth in the first half of the year, but also the 
rapid decline in the second half. Historically low yields had been paid in the 
expectation of high rental growth, by increasingly debt-backed buyers. The 
increase in debt costs, coupled with fears of recession reducing confidence in 
future rental growth, led to a sharp upward yield adjustment and a 
corresponding decline in values. 
 
Despite this, the dynamics of the industrial market remain reasonably robust 
with continued low vacancy levels, limited new supply and good occupier demand. 
There is still likely to be rental growth, albeit at more muted levels than 
previous years, meaning the company's exposure to this sector should be 
positive going forward. 
 
The structural change in the office market was accelerated by the impact of 
COVID-19. Whilst we are hopeful that the pandemic is firmly behind us, there 
are few signs of confidence returning to the sector. The wide range of 
approaches being taken by companies to get staff back into offices and to 
manage hybrid working is fuelling this uncertainty. The Board and Investment 
Manager remain convinced that overall office demand will reduce, with well 
specified offices which provide good staff amenities faring best. Given this 
uncertainty, and the likelihood of further capital declines, the Company 
disposed of three office assets during the year. 
 
We continue to expect the retail sector to experience challenges and headwinds, 
particularly with the cost-of-living crisis and the spectre of recession 
hanging over the UK. In such circumstances, the "discretionary" areas of the 
market, such as fashion and non-essential retailers, will suffer most with 

shopping centres and the high street bearing the brunt of this. The Company's 
retail portfolio is focused in the retail warehouse sector, predominantly 
occupied by discount or budget retailers, for whom we see a more positive 
outlook. 
 
Whilst there have been many changes in the property market over the year, one 
constant has been the increasing importance of Environmental, Social and 
Governance (ESG) factors. Both occupiers and investors have an increasing focus 
on this aspect of assets, meaning that it is having a direct impact on value. 
Fortunately, the Company's early and continuing work in this area has meant we 
are well positioned, with the Board's Sustainability Committee overseeing 
progress in this regard. 
 
Portfolio and Corporate Performance 
 
The NAV total return for the year was a loss of -12.8%. The real estate 
investment portfolio returned -8.8%, which approximately matched the MSCI 
Quarterly Property Index benchmark return of -8.9% over the same period. The 
Company's portfolio has strongly outperformed the Index over 3, 5 and 10 years. 
 
The share price total return for the year of -19.0% was disappointing, with the 
Company's shares consistently trading on a discount which peaked with risk free 
rates at the end of the third quarter. The Board pursued its share buyback 
programme throughout most of the year buying a total of 15.7m shares at an 
average discount of 26.8%. This contributed 0.2p to NAV per share. The Board 
continues to monitor the discount of the share price against NAV. 
 
IFRS earnings have decreased from 21.54p per share to -13.11p for 2022. This 
reflects the drop in valuations recorded in the second half of the year. EPRA 
earnings per share decreased from 3.69p to 2.94p per share as a result of the 
one-off break costs associated with terminating the interest rate swap entered 
into in October. Without the break costs the EPRA earnings per share would have 
been 3.86p, an increase of 4.6% reflecting improved rental collection. 
 
Rent Collection 
 
Collection rates largely returned to more normal levels in 2022, with the 
fourth quarter sitting at 99% and the year as a whole at 98.9%. This 
improvement led to a reversal in bad debt provisions which made a contribution 
to performance. Going forward, we believe that the portfolio is well 
diversified in tenant risk. In addition, the positive tenant engagement 
undertaken over the last couple of years should be beneficial particularly if 
economic conditions deteriorate further. 
 
Financial Resources & Renewal of the Debt Facility 
 
The Company continues to be in a strong financial position with significant 
unutilised financial resources of £55m available for investment in the form of 
its revolving credit facilities ("RCF") net of existing cash and financial 
commitments. 
 
The low Loan-to-value ("LTV") ratio of 22.6% at the year end means the Company 
is well placed to deploy capital into accretive assets which fit the portfolio 
strategy. 
 
The existing debt facility (which includes the RCF) of £165 million will come 
to an end in April 2023. This was renewed at the end of the summer with our 
existing lender at a three year tenor comprising an £85 million term loan and 
an £80 million RCF. A swap contract to fix rates on the £85 million term loan 
was also negotiated. At that time the politically induced gilt market 
volatility was at its height. 
 
We took the view that it was in the Company's best interests to secure the 
re-financing for April 2023 as some lenders were beginning to withdraw from the 
market. Furthermore, even if facilities had still been available, it was 
possible that the Company could have been forced to renew at even higher rates 
if markets had continued to deteriorate. 
 
UK fixed interest markets began to improve shortly after new terms had been 
agreed and, therefore with hindsight, our loan renewal timing proved to be 
poor. Recognising this, and the income-orientated nature of the Company the 
Board and Managers pro-actively reconsidered matters with the help of external 
advice. As a result, the new swap contract was terminated in December and 
replaced with an interest rate cap arrangement. This limits the interest cost 
on the term loan to 5.46%, but if SONIA declines the Company's interest cost 
will decline too. 
 
These new arrangements have resulted in a one-off charge of £3.56 million to 
terminate the swap, along with the payment of a premium of £2.5 million for the 
cap arrangement. This premium will be amortised over the three years from April 
2023. Although complex and costly, the Board believes these actions have placed 
the Company on a better footing for the future. 
 
Benchmark Change 
 
Following a review undertaken by the Investment Manager's Investment Strategy 
Team, the Board has decided to amend the benchmark against which the property 
portfolio is measured. Going forward the MSCI UK Quarterly Property Index will 
be referenced, as it has grown to become the largest and most relevant 
benchmark covering the UK market. The Company previously used the MSCI UK 
Monthly Index Funds Quarterly Property Index which has, in recent times, not 
only reduced in size but is also now less reflective of the investment universe 
in which the Company could acquire assets. 
 
Dividends 
 
The Board remains conscious that many of the Company's shareholders have 
invested in the Company because of the attractive level of income it generates. 
The Board aims to invest in good quality assets that have the potential to 
provide an above market level of total return as well as an attractive level of 
income that has scope to grow. 
 
The Board has maintained the annual dividend of 4p per share, which was reached 
at the end of 2021, for 2022. Dividend cover has decreased to 73%, down from 
98% in 2021. Excluding one-off swap break costs, dividend cover was 97%. 
 
The Board reaffirms its stated intention to maintain the current dividend 
level, of 4p per share despite the increased financing costs for the next two 
years. 
 
Management Fee 
 
A thorough review of costs was undertaken late in the year, which resulted in a 
renegotiation of and 10bps reduction in the management fee. From 1st January 
2023 abrdn will be paid 0.6% of Gross Asset Value (GAV) below £500m, and 0.5% 
above £500m. 
 
Annual General Meeting ("AGM") 
 
The Annual General Meeting ("AGM") will be held at 2.30pm on Wednesday 14 June 
2023 at Wallacespace, 15 Artillery Lane, London E1 7HA. The Board looks forward 
to welcoming shareholders in person where they will have the opportunity to put 
questions to the Board and/or the Manager. Shareholders are also invited to 
submit questions by email to [e-mail] 
 
The Board has decided to hold an interactive Online Shareholder Presentation at 
2.30pm on Tuesday 13 June 2023. As part of the presentation, shareholders will 
receive updates from the Chair and Manager as well as the opportunity to 
participate in an interactive question and answer session. Further information 
on how to register for the event can be found on www.workcast.com/register?cpak 
=9811658259471291. 
 
Outlook 
 
2022 was a particularly challenging year for many companies including this one. 
The high industrial weighting had a negative impact during the past year but we 
believe the sector allocation and assets held will be beneficial in the near 
future. The new debt facility provides the Company with certainty, albeit at a 
higher interest rate than before. This increased cost will impact short-term 
dividend cover, but the Board and Investment Manager are confident that the 
portfolio offers a wide range of initiatives and opportunities to grow income. 
In addition, the Company's strong financial footing provides the means to take 
advantage of market conditions to acquire well-specified, attractively priced 
assets which will enhance dividend cover. 
 
We are anticipating a continued easing of inflation, with forecasts of a return 
to lower levels later this year. Whether the slowing of the UK economy results 
in a recession is still to be seen, but the diversification of the API tenant 
base, the portfolio weighting to more favoured areas of the market, the quality 
of the assets and our focus on ESG should leave us well-placed for the year 
ahead. 
 
21 April 2023 
James Clifton-Brown 
 
INVESTMENT MANAGER'S REPORT 
 
Market Review 
 
2022 was another year of unexpected challenges. The year started with optimism 
of ongoing recovery in a post COVID-19 world, before the shock of the Russian 
invasion of Ukraine changed the economic outlook globally with inflation and 
rising interest rates becoming the main narrative. The UK had further 
challenges with a very volatile political situation. This reached a climax in 
September with a mini budget that led to a spike in inflationary and interest 
rate expectations, with a sharp decline in Sterling. 
 
During the first six months of the year, performance for UK real estate was 
positive, with investment activity remaining robust. However, the narrative 
changed in the second half of the year as government bond yields and inflation 
rose and economic sentiment declined. The tightening monetary cycle increased 
financing costs 
 
for real estate, which acted as the catalyst for a broad decline in UK property 
values. In addition, the spread between real estate and UK government bond 
yields narrowed over the year as bond yields rose, making the asset class 
relatively less attractive. 
 
The UK real estate market recorded a total return of -8.9% in 2022, according 
to the MSCI quarterly Index. The 7.8% positive total return recorded in the 
first six months of the year was more than unwound during the second half of 
the year with a -4.2% fall in capital values through the third quarter which 
accelerated to a -12.0% decline in fourth quarter. The overall return of -8.9% 
in 2022 masks significant divergence in returns at the sector level. 
 
The UK industrial sector was the weakest performing sector, posting a total 

return of -14.6% over the course of 2022, whilst the office and retail sectors 
recorded returns of -9.8% and -4.8% respectively over the same period. 
Transaction volumes reached £62.8 billion over the course of the year, 16% down 
on 2021 but 26% ahead of 2020 levels. 
 
Following a very strong year of performance in 2021, the listed property sector 
had a difficult 2022 with widening discounts to net asset values (NAV). The 
FTSE UK REIT index registered a total return of -31.9% in 2022, underperforming 
the FTSE All-Share index, which recorded a total return of 0.3%. Sector 
specialists that had been trading on the biggest premiums saw rapid moves to 
large discounts especially in the logistics sector, reflecting the change in 
pricing of the underlying assets which had reached low levels of yield. 
 
Specialist funds have been increasingly popular over the last few years, 
however with logistics funds being hardest hit in terms of NAV falls in 2022 
and several social housing funds having significant challenges, there is 
potential for diversified funds to return more into favour. NAV declines in Q4 
led to a narrowing of discounts for a while, but concerns over a new banking 
crisis at the end of Q1 2023 mean discounts are back to similar levels as at 
end 2022 despite the lower NAVs. 
 
Offices 
 
The office sector delivered a total return of -9.8% in the year to December 
2022 according to the MSCI Quarterly Index, a deterioration on the +5.3% 
recorded in 2021. Performance for the sector was impacted by declining capital 
values as yields rose in response to increasing interest rates and a narrowing 
spread over the UK 10-year gilt yield. Capital values rose by a modest 0.9% 
during the first half of 2022, but they declined by -13.9% in the second half, 
resulting in values declining by -13.2% for the year. 
 
There was a polarisation in performance at the market level within the office 
sector, with West End offices posting the strongest total return of -4.5% 
during 2022. With total returns of -12.1% and -11.6% respectively during 2022, 
the Rest of UK and the Rest of South East posted the weakest regional returns 
within the office sector. 
 
Despite structural headwinds facing the sector more generally, vacancy rates in 
the West End office market declined to 3.7% in 2022, having hit 5.4% during 
2020 according to CBRE data. The West End office market has benefitted from 
more attractive fundamentals, including much higher office occupancy and a 
lower vacancy level than the rest of the office sector. The COVID-19 pandemic 
has created a longer-term structural headwind for the office sector in the UK, 
largely as a result of the increased prominence of hybrid working. The 
subsequent change to office occupation is reflected in higher vacancy rates 
across most UK office markets. In the regional markets, a lack of availability 
for best-in-class space is evident which should provide support for Grade A 
rental growth. 
 
In central London, the vacancy rate at the end of 2022 stood at 8.2%, 
substantially higher than the ten-year 
 
average of 5.1%. However, it is clear that occupier demand remains highly 
polarised. Despite take-up of central London office space reaching 12.3 million 
sq ft in 2022, in-line with the 10-year average, 80% of take-up was focused on 
Grade A space. Indeed, we believe that occupier preference for the best quality 
space will create an increasing wedge in rents between Grade A/best in class 
space and the rest for the office sector. In central London for example, prime 
rents grew by 4.6% in 2022 whilst market average rents grew by only 2.1%. 
 
Retail 
 
The retail sector delivered a total return of -4.8% in 2022 according to the 
MSCI Quarterly Index. In a similar vein to other UK real estate sectors, total 
returns turned negative due to weakening capital value growth. Capital values 
rose by 4.9% during the first half of the year, but this was unwound in the 
second half of the year when values declined by -13.9%. Most of the capital 
value decline was recorded in the fourth quarter at -10.5%. 
 
Polarisation across retail sub-sectors was acutely evident, with retail 
warehousing posting the best performance in the retail sector, with a total 
return of -0.8% and capital growth of -6.2% in 2022. Well positioned retail 
warehouses with essential and discount retailers as anchor tenants continued to 
attract investor interest at the expense of discretionary and non-essential 
retail. Shopping centres delivered a total return of -5.3%, whereas 
supermarkets delivered the lowest total return of -13.4%, heavily impacted by 
the -17.5% capital value decline in the final quarter. The supermarket sector 
was more sensitive to the rising interest rate environment given the generally 
low yielding nature of the sector. 
 
Industrial 
 
The fortunes of the industrial and logistics sector turned during the course of 
2022, with the sector leading the repricing of UK real estate in response to 
rising debt costs and a weaker macro-economic environment. Yields within the 
sector had reached historic lows in the first half of 2022 as investors 
continued to favour the sector but, as investor demand weakened in response to 
rising debt costs, yields moved out by between 150 - 200 bps between June and 
December 2022. As a consequence, capital values fell -17.4% during 2022 
according to the MSCI Quarterly Index, leading to it recording the weakest 
performance across the UK real estate market, with a total return of -14.6%, a 
stark contrast to the return of 36.4% for the sector in 2021. 
 
Lower yielding areas of the market, such as within London and the wider South 
East, were the most adversely impacted, with London industrial seeing its 
largest quarterly capital value decline in the history of the MSCI Index of 
-22.2% in the final quarter. 
 
That being said, rental growth remained positive throughout the year, with UK 
industrial market rental growth significantly outperforming the market at 10.4% 
in 2022 - compared to 3.8% for all property - as occupational demand remained 
healthy. 
 
Demand was principally driven by the third party logistics ('3PL') sector, 
while demand from the manufacturing sector saw continued growth, helping to 
offset the fall in take-up from online retailers. While the level of take-up 
fell in the second half of 2022, it remained well above the long term average. 
'Big Box' take-up for the year reached 47.99m sq ft, the third highest level on 
record according to Savills. Despite robust take-up, supply levels increased 
during 2022, with the UK vacancy rate rising to 3.9%. This, however, remains 
near historic lows and the existing development pipeline is unlikely to 
materially alter the strong supply/demand dynamic which the sector currently 
enjoys. 
 
Alternatives 
 
The UK real estate alternative sector, or "Other Property" as it is categorised 
by MSCI, represents real estate which falls outside the traditional 'Retail', 
'Office' or 'Industrial' definitions. The alternative sector recorded a total 
return of -2.6% in 2022, outperforming the other sectors. The healthcare 
sector, which represents approximately 10% of the "Other Property" sector 
within the MSCI sample, was the standout performer, generating a total return 
of 3.5%. 
 
Despite the cost-of-living crisis placing pressure on UK Household disposable 
incomes, the leisure and hotel sectors still outperformed the wider market, 
returning -3.8% and -5.3% respectively over the course of 2022. Hotel trading 
improved significantly over the course of the year and whilst room rates were 
the primary driving force behind the recovery in performance, occupancy also 
improved, supported by growing weekend leisure stays and a recovery in weekday 
business demand. With a weaker pound, it is likely the return of international 
visitors aided the recovery. 
 
Investor appetite for the living sector continued its strong trajectory. A 
total of £12.7 billion was invested in the living sector in 2022 according to 
Real Capital Analytics data, equating to 20% of all UK real estate 
transactions. However, of the £12.7 billion invested, the Purpose Built Student 
Accommodation (PBSA) sector accounted for £8.5 billion, or 67% of all activity. 
The largest deal in the PBSA sector last year was GIC and Greystar's purchase 
of the Student Roost portfolio from Brookfield for £3.3 billion. The continued 
investor interest in the sector helped provide support for pricing, with direct 
let PBSA asset yields rising by only 25bps over the second half of 2022, much 
less than other areas of the commercial real estate market. 
 
Market Outlook 2023 
 
Given the magnitude and speed of correction we have seen in sectors including 
supermarkets, industrial and logistics, and long duration income more 
generally, we believe that the market pricing for these areas of UK real estate 
will find a floor much quicker than we have seen in previous cycles. As such, 
our outlook, and forecasts for these areas of the market have improved 
materially, given the size of the corrections experienced. 
 
Following the poor reception to the mini budget in September 2022 longer term 
yields may have peaked in early 2023 and could reduce by year end if inflation 
falls as predicted. Lower yields, and in particular forward swap rates, will 
make utilising debt more accretive again and will likely increase investment 
volumes as debt backed buyers re-enter the market. 
 
It is never easy to call the bottom of a market cycle, however it appears that 
the industrial sector may be bottoming out about now, with offices and retail 
values having further to fall. The rapid repricing of the UK market means that 
the prospective returns from today's levels look more attractive, along with 
the likely improvement of the yield premium of growth assets over gilts as the 
year develops. abrdn forecasts a market return of 4.3% over the 3 years from 
April 2023. 
 
The outlook is positive for the industrial sector and particularly for better 
quality assets in strong locations, as both occupiers and investors narrow 

their focus on best-in-class assets. The size and speed of value correction in 
2022 means the sector now looks better value relative to other real estate 
sectors and indeed, other asset classes. The sector continues to benefit from 
structural tailwinds and a positive supply/demand dynamic, with the UK wide 
vacancy rate remaining near historic lows and new supply levels likely to 
remain muted due to higher development costs. Whilst we anticipate the 
industrial vacancy rate to move higher this year, largely as a result of a 
weaker economic backdrop, we expect occupational demand to remain robust as the 
advent of 'onshoring' and continued demand for e-commerce supports demand for 
good quality accommodation. As a result, further rental value growth is 
expected and is likely to drive performance in the medium term. There is the 
prospect for capital value growth for best-in-class assets, as investors once 
again compete for good quality industrial accommodation with strong 
occupational fundamentals. 
 
The office sector continues to face real structural headwinds as working habits 
remain altered following the COVID-19 pandemic. Indeed, the bifurcation between 
best-in-class and secondary office space is acutely evident, becoming even more 
entrenched during 2022. Secondary office accommodation is at risk of 
obsolescence and asset stranding, while the capital requirements to ensure 
assets meet minimum ESG standards is unlikely to lead to positive returns. 
 
The office sector did not reprice as much as many other UK property sectors in 
2022, predominantly due to limited transactional evidence. However, we expect 
further pricing discovery to emerge over the course of 2023 and for secondary 
accommodation, this is likely to result in large downward revisions to 
valuations. Supply of truly best-in-class office space remains extremely 
limited across the UK which will provide more support for pricing and tenant 
demand. 
 
Performance within the retail sector is expected to remain polarised in 2023. 
Consumer spending habits will be driven by consumer cost considerations and as 
such, non-discretionary led retailing is expected to be best placed. 
 
Following a period of repricing in 2022, the retail warehouse sector is 
garnering more interest from investors, particularly for food anchored schemes 
with a discount orientated line-up which will be more insulated from any 
slowdown in consumer spending. Equally, the supermarket sector now looks 
attractive following a broad re-pricing last year, but the sector will not be 
immune to increasingly price sensitive consumers, with supermarket operators 
adapting to changes in consumer behaviour. A divergence in performance between 
the supermarket operators is already evident and as such, a focus on the 
quality of the underlying real estate will remain crucial. 
 
The outlook for 2023 feels a lot more positive than it did at the end of 2022. 
Tenant demand remains resilient for good quality accommodation, and the impact 
of high interest rates and gilt yields seems to be easing, although recent 
turmoil in the banking sector is a timely reminder that risks still remain. If 
the UK can experience some political stability and a soft landing, then it 
feels as though real estate is well placed to benefit following the short sharp 
correction of 2022. 
 
Purchases: 
 
As previously reported in our results to December 2021, we completed a purchase 
in April 2022 for £5.0m. The asset was a car showroom in Stockton on Tees let 
to Motorpoint for 25 years (with a tenant break in years 15 and 20), with the 5 
yearly rent reviews linked to CPI. After the reporting period (in March 2023) 
the Company acquired a food store in Welwyn Garden City let to Morrisons for £ 
18.3m, which reflected a yield of 6.35%. The store is a strong trader for 
Morrisons and was acquired off market by way of a sale and leaseback with a new 
25 year lease subject to indexation of rent. 
 
Development: 
 
During 2022 substantial progress was made on the pre-let development at St 
Helens. Completion of the development occurred in April 2023 with a new 15 year 
lease to the local Council commencing at a passing rent of £0.7m pa. The rent 
is subject to 5 yearly rent reviews linked to CPI +1%. The property is sublet 
to a not for profit research body investigating ways to manufacture low carbon 
glass (the project is known as Glass Futures). 
 
After the reporting period the Company completed the purchase of a development 
site in Knowsley (Liverpool) for £4m following grant of planning permission. We 
expect to start on site in the second quarter to construct a 110,000 sq ft 
grade A logistics unit. 
 
Sales: 
 
A total of four assets were sold in 2022 for a total of £41.8m at a combined 
realised loss of £0.2m based on the valuation as at 31 December 2021 and the 
net proceeds as disclosed in note 7. Three of the assets were offices and the 
decision to sell was taken as part of our general concern over the future of 
offices. We also disposed of an industrial asset (the lowest yielding asset in 
the company) just before the major correction in pricing. 
 
Asset Management: 
 
During the COVID-19 pandemic rent collection was a major focus for the asset 
management team. In 2022 attention was able to return to more normal tenant 
engagement, with rental collection back at 100% in the fourth quarter and the 
rate for the year just over 99% with some rent still being collected. 
 
Rent Collection                        Quarter        % Received 
 
2021                                         1              100% 
 
                                             2               98% 
 
                                             3               97% 
 
                                             4               99% 
 
                                       2021 FY               98% 
 
2022                                         1               99% 
 
                                             2               99% 
 
                                             3               97% 
 
                                             4              100% 
 
                                       2022 FY               99% 
 
The vacancy rate at the year-end was 9.8% (prior year 9.7%) which is above our 
target level of 5%. As noted below, we have several units that are subject to 
an agreement for lease, and when those leases complete along with some other 
lettings under offer, the vacancy rate is expected to be close to around that 
target level. 
 
Ten lettings were completed during the year securing a total of £1.2m pa. In 
addition, an agreement for lease (a contractual agreement to enter into a lease 
once the landlord completes a refurbishment) securing a rent of £0.6m pa was 
signed and we expect to complete the works mid 2023. Since the year end two 
more lettings have completed securing £0.3m pa. 
 
In addition to the asset lettings, four leases were completed with an operator 
of EV charge points in some of our asset car parks. The combined base rent is 
only £8,000pa (with a top up potential share of turnover) however we will be 
undertaking more of these lettings where an operator has the cost of 
installation and running the charge points, but our tenants benefit from the 
service. 
 
Six lease renewals or regears were completed over the year securing £0.6m pa, 
along with six rent reviews, resulting in an additional £0.2m pa being secured 
and since year end two more rent reviews with a total increase in rent of £0.1m 
pa were agreed. The majority of the increase is from the industrial / logistics 
sector although we are also seeing some increases in our office portfolio. 
 
Portfolio Rent Reviews 
 
     Basis         % of Current   Weighted Average Weighted Average Weighted Average 
                    Rent Roll     Floor (value if   Cap / Range of  Unexpired Lease 
                                       fixed)            Caps         Term (years) 
 
RPI Inflation         17.1%             1.0%       3.9 (ex-uncapped       8.4 
linked %                                               income) 
 
CPI Inflation          4.0%             1.7%             3.7%             14.7 
linked % 
 
Fixed / Stepped       10.3%             2.6%             n/a              10.6 
 
Open Market           68.6%             n/a              n/a              2.6 
Value 
 
Total                  100%             n/a              n/a        5.7 (FUND WAULT) 
 
Income Growth Potential 
 
The Company has a diversified portfolio of commercial real estate assets let to 
occupiers under a variety of leases. The rent that tenants pay will vary over 
time, and in the case of the current portfolio the rent received is below 
market rates giving scope for increase over the next five years. This increase 
will come from rent reviews and lease renewals on existing leases (£2.1m of 
reversion present), completing development projects (£1.2m of rent) and 
hopefully letting void units (£2.3m). 
 
Rent reviews are a mixture of open market (negotiated), fixed or indexed. The 
table below shows the Company mix. 
 
Passing Rent (OMV)                         £17.4m 
 
RPI Linked Income                           £4.3m 
 
CPI Linked Income                           £1.0m 
 
Fixed/Stepped Income                        £2.6m 
 
Reversion in Let Portfolio                  £2.1m 
 
Development Properties                      £1.2m 
 
Void Properties                             £2.4m 
 
Estimated Rental Value                     £31.1m 
 
Debt 
 
The Company's £110m term loan and £50m revolving credit facility (RCF) was to 
mature in April 2023, and 
 
given volatility in the lending market the company sought to secure an 
extension in 2022, which it did in October. At year end the term loan was fully 
drawn and subject to an interest rate swap giving an all in cost of 2.725%. The 
RCF was undrawn following the sales undertaken in the year (also undrawn year 

end 2021 although there was some utilisation in the intervening period). 
 
The new facility is with the existing lender (RBSI), commences in April 2023 
for three years and consists of a £85m term loan and an £80m RCF. The margin on 
both is 150bps which is considered very competitive. At the time of agreeing 
the new facility swap rates were very unattractive however there was 
significant concern that rates would go even higher as a result of the then 
Government policy. The Company decided to enter into a swap given the risks of 
a worsening situation, which would have fixed the cost of debt at 7.0%. 
 
With the rapid repricing of interest rate futures following the change of Prime 
Minister and Chancellor the Company decided to break that swap in December 2022 
and enter into an interest rate cap instead. This limits the upper rate the 
Company could pay to 5.5% and allows the Company to benefit from lower rates if 
they occur. 
 
The costs associated with the debt restructure were, as detailed in the 2022 
NAV and disclosed further in the accounts, £3.6m to break the swap and £2.5m to 
replace this with an interest rate cap; the latter of which will be amortised 
over the three-year tenor of the loan. The LTV as at year end was 22.6% (19.2% 
prior year) which is a level the Investment Manager and Board are comfortable 
with at this stage of the market cycle. 
 
Outlook and Future Strategy 
 
Although the economic outlook remains uncertain the portfolio consists of good 
quality assets that are appealing to occupiers. The Investment Manager will 
continue to focus on growing income through active asset management of the 
assets, and ensuring the assets in the portfolio meet occupier needs. In the 
first few months of 2023 new occupier interest is encouraging, and we expect 
that to continue given the quality of accommodation the Company offers. 
 
In order to have a reliable income stream with potential for growth we will 
continue to focus on ESG and offering cost effective solutions for occupiers. 
To reflect the importance of ESG, the Annual Report now includes a dedicated 
section and we have also early adopted the Taskforce for Climate-related 
Financial Disclosures. 
 
Performance 
 
There are a number of different measures of performance used by the Board, from 
individual assets to shareholder return. These are detailed below: 
 
             Portfolio total  MSCI UK Quarterly  MSCI UK Monthly  NAV total return 
               return (per     Property Index      Index Funds       (per annum) 
                 annum)          return (per        Quarterly 
                                   annum)        Property Index 
                                                   return (per 
                                                     annum) 
 
1 Year           (8.8%)            (8.9%)            (10.8%)           (12.8%) 
 
3 Year            9.8%              3.9%              4.7%              7.0% 
 
5 Year            24.9%             11.7%             13.7%             21.9% 
 
10 Year           12.1%             89.0%             88.5%            159.5% 
 
Portfolio Return: 
 
The Company uses a MSCI Benchmark to measure performance of the underlying 
assets against the general market. The portfolio is not constructed with 
reference to the MSCI index, but it can be useful to measure the performance of 
the Investment Manager. At the end of 2022 the Board and Manager changed the 
benchmark index it uses for this comparison from the MSCI quarterly version of 
monthly valued funds to the MSCI Quarterly index. The reason for this change 
was that the quarterly index represents a much broader measure of the market 
return, and is the main index used by commentators. For the purpose of this 
year end report and accounts performance review the table above shows the 
portfolio and NAV against both indices for clarity. 
 
At a portfolio level the Company has continued to demonstrate performance above 
that of the overall market over 1, 3, 5 and 10 years (see above). The improved 
performance relative to the benchmark is a result from a combination of 
structure (having a greater exposure to strongly performing sectors and low 
exposure to poorly performing sectors), and the active approach to managing the 
portfolio. Turnover in the portfolio has been higher than the market over most 
time periods, indicating a willingness to take profits and reinvest in new 
productive assets. 
 
NAV Return: 
 
The NAV total return is perhaps the best indication of the Company's 
performance, rather than just the property portfolio, as it takes all costs and 
manager controlled factors (such as borrowing) into account. The table above 
shows NAV total returns alongside the portfolio and market returns. The table 
below compares the NAV total return of the company against the AIC peer group, 
and as a further source of comparison against the IA open ended fund sector 
average. 
 
NAV Total Returns to 31 December 2022 
 
Source AIC, abrdn                            1 year    3 years    5 years   10 years 
                                                  %          %          %          % 
 
abrdn Property Income Trust Limited          (12.8)        7.0       21.9      159.5 
 
AIC Property UK Commercial (weighted          (0.4)       20.9       39.6       32.1 
average) 
 
Investment Association Open Ended             (7.7)      (1.8)        1.1       35.5 
Commercial Property Funds sector 
 
Share Price: 
 
For the investor, share price total return is the real measure of their 
experience, measuring the share price performance along with the dividends they 
received. The Company's market capitalisation at 31 December 2022 was £237.9m 
against £323.5m a year earlier. The reduction in market capitalisation reflects 
the wider discount and the share buy backs undertaken by the Company - 
totalling £12.4m in 2022. 
 
Share Price Total Returns to 31 December 2022 
 
Source AIC, abrdn                            1 year    3 years    5 years   10 years 
                                                  %          %          %          % 
 
abrdn Property Income Trust Limited          (19.0)     (18.5)     (11.8)       90.4 
 
FTSE All-Share Index                            0.3        7.1       15.5       88.2 
 
FTSE All-Share REIT Index                    (31.6)     (25.8)     (15.0)       45.1 
 
AIC Property Direct - UK Sector              (15.8)      (6.9)       12.5       17.8 
(weighted Average) 
 
Valuation 
 
The portfolio is valued quarterly by Knight Frank LLP under the provisions of 
the RICS Red Book. As at 31 December 2022 the portfolio, including the Ralia 
Estate, was valued at £416.2m (£499.9m at 31 December 2021) and the Company 
held cash of £15.9m (£13.8m at 31 December 2021). The portfolio consisted of 45 
assets at year-end (48 assets at 31 December 2021). 
 
Investment Strategy 
 
The Company has a clearly stated investment strategy: "To provide investors 
with an attractive income return, with the prospect of income and capital 
growth, through investing in a diversified portfolio of commercial real estate 
assets in the UK". The word "Income" features in both the Company's name, and 
prominently in the investment strategy. 
 
Our investment activities are centred around providing an attractive level of 
income. However, you will read throughout the report about the importance of 
ESG to future returns. The Investment Manager and Board want to provide a level 
of income that is attractive to investors today, that is sustainable and has 
scope to grow in the future. We also want to provide a reasonable total return 
(i.e. not sacrifice capital value to deliver an unsustainable level of income). 
 
Environmental Social and Governance (ESG) 
 
ESG is central to API's investment philosophy and is fully incorporated into 
our decision making and actions. We believe that ESG should form a central part 
of decision making, and that in order to make the best decisions, we must build 
our own expertise and knowledge through working with best in class consultants 
to optimise the timing and impact of our investments in ESG improvements. We do 
not aim to solve every problem overnight, rather we seek to find the optimum 
point of intervention for each asset to maximise return for shareholders and 
avoid waste (and with it embedded carbon). 
 
To reflect the importance of ESG, the Annual Report now includes a dedicated 
section and we have also early adopted the Taskforce for Climate-related 
Financial Disclosures. 
 
PROPERTY INVETMENTS 
 
Top Ten Properties 
 
Property                                 Value (range) Sector      % of total 
                                                                   portfolio 
 
B&Q, Halesowen                           £22m - £24m   Retail            5.7% 
 
54 Hagley Road, Birmingham               £22m - £24m   Office            5.6% 
 
Symphony, Rotherham                      £20m - £22m   Industrial        5.0% 
 
Atos Data Centre, Birmingham             £16m - £18m   Other             3.8% 
 
Timbmet, Shellingford                    £14m - £16m   Industrial        3.7% 
 
Hollywood Green, London                  £14m - £16m   Other             3.4% 
 
Tetron 141, Swadlincote                  £12m - £14m   Industrial        3.2% 
 
CEVA Logistics, Corby                    £12m - £14m   Industrial        3.2% 
 
Walton Summit Industrial Estate, Preston £12m - £14m   Industrial        2.9% 
 
Badentoy North, Aberdeen                 £12m - £14m   Industrial        2.9% 
 
Top Ten Tenants 
 
Tenant                         Passing Rent   % of total contracted 
                                              rent 
 
B&Q Plc                        £1,560,000     6.2% 
 
Public Sector                  £1,346,186     5.3% 
 
The Symphony Group Plc         £1,225,000     4.8% 
 
Schlumberger Oilfield UK Plc   £1,138,402     4.5% 
 
CEVA Logistics Limited         £840,000       3.3% 
 

Atos IT Services Limited       £838,910       3.3% 
 
Jenkins Shipping Co Ltd        £819,390       3.2% 
 
Timbmet Limited                £799,683       3.2% 
 
Thyssenkrupp Materials (UK)    £643,565       2.5% 
Ltd 
 
Adexa Direct Limited           £560,997       2.2% 
 
Portfolio Allocation by region 
 
Region               Weighting 
 
South East           21.2% 
 
West Midlands        20.9% 
 
North West           13.5% 
 
East Midlands        13.4% 
 
Scotland             12.0% 
 
North East           10.5% 
 
South West           3.4% 
 
London City          2.7% 
 
London West End      2.3% 
 
Portfolio Allocation by Sector 
 
Region                 Weighting 
 
Rest of UK Industrial  45.5% 
 
Retail Warehouses      11.0% 
 
Rest of UK Offices     9.4% 
 
Other Commercial       9.4% 
 
South East industrial  9.1% 
 
South East Offices     6.8% 
 
London City Offices    2.7% 
 
London West End        2.3% 
Offices 
 
South East Retail      1.9% 
 
Land                   1.8% 
 
ENVIRONMENTAL, SOCIAL and GOVERNANCE (ESG) 
 
ESG 
 
It is now commonplace for investment managers to say that ESG is embedded in 
their processes. It is not always clear what that really means. As a Company 
investing in real assets we can have a direct impact on ESG outputs - and the 
reason we have fully integrated ESG into our investment process and behaviour 
is that we believe it is fundamental to achieving the Company's investment 
objective. We do not consider ESG in isolation or as just a cost. We see it as 
an opportunity for driving performance. It is for that reason it forms an 
integral part of our decision making processes. We seek to implement ESG 
initiatives in a planned, sensible, and measured way so as to maximise the 
return on investment. 
 
ESG Policy 
 
ESG Strategy. 
 
The Board has a separate Sustainability Committee that sets Key Performance 
Indicators (KPIs) in order to measure the ESG performance of the real estate 
portfolio and Investment Manager in delivering ESG improvements. The Committee 
is relatively new, and demonstrates the increased importance of ESG in managing 
risk and return for the Company. 
 
The Investment Manager has an advanced and comprehensive framework of process, 
oversight, and knowledge to incorporate and enhance ESG into the business and 
to ensure practical implementation, which is evolving to keep pace with current 
ESG trends and legislation. 
 
Priorities. 
 
The Company has identified two main areas of focus that have the most relevance 
for the activities it undertakes - People and Planet. 
 
People involves our tenants, the users of our properties and the local 
community. It is a wide-ranging theme, covering supplier management, community 
engagement, social values, tenant engagement and wellness. 
 
Under Planet, the Company has a primary focus on (1) carbon and energy; (2) 
climate resilience; and (3) biodiversity. 
 
Hardly a week goes by without an extreme weather event occurring somewhere in 
the world, bringing the need for climate action into focus. The Company has a 
clear strategy for managing carbon emissions across the portfolio and has been 
implementing energy efficiency improvements and renewable energy projects for 
several years. 
 
In 2021, we undertook work to establish the operational carbon footprint 
baseline of the portfolio and model our pathway to net-zero. 
 
This involved benchmarking the performance of each asset, modelling our future 
footprint including embodied and operational carbon and identifying the types 
of measures necessary to fully decarbonise the portfolio by 2050. From that 
baseline we can measure progress annually - although it won't be a straight 
line to net-zero. In 2022, we have been actioning our net-zero strategy to 
improve on the baseline performance, with an initial focus on offices and also 
a refurbishment to have our first operational net neutral carbon logistics 
unit. 
 
Transparency and Reporting 
 
EPRA Sustainability Best Practice Recommendations Guidelines. 
 
We have adopted the 2017 EPRA Sustainability Best Practice Recommendations 
Guidelines (sBPR) to inform the scope of indicators we report against. We have 
reported against all EPRA sBPR indicators that are material to the Company. We 
also report additional data not required by the EPRA sBPR where we believe it 
to be relevant (e.g. like-for-like greenhouse gas emissions). 
 
A full outline of the scope of reporting and materiality review in relation to 
EPRA sBPR indicators as explained above, is included in the full Annual 
Accounts which can be found at the following link  https://www.abrdnpit.co.uk/ 
en-gb/literature.  These also provides disclosures required under Streamlined 
Energy and Carbon Reporting (SECR). 
 
2022 GRESB Assessment. 
 
The GRESB Assessment is regarded as the leading global sustainability benchmark 
for real estate vehicles. The Company has submitted data to GRESB since 2012. 
Whilst GRESB is a useful tool for benchmarking ESG 
 
performance, there are significant limitations with the default peer group 
selection which the company does not believe represents its peers. Despite 
providing this feedback, GRESB still does not benchmark the Company against 
similar UK funds, however we continue to engage on this matter. 
 
Our ESG Priorities 
Climate Change. 
 
The Company considers the risks and opportunities of climate change on the 
portfolio. This is one of the most material ESG components to investment 
performance. The Taskforce for Climate-related Financial Disclosures (TCFD) was 
established to provide a standardised way to disclose and assess 
climate-related risks and opportunities and defines two types of climate risks: 
 
·    Transition risks: those that relate to an asset, portfolio or company's 
ability to decarbonise. An entity can be exposed to risks as a result of carbon 
pricing, regulation, technological change and shifts in demand related to the 
transition. 
 
·    Physical risks: those that relate to an asset's vulnerability to factors 
such as increasing temperatures and extreme weather events as a result of 
climate change. Exposure to physical risks may result in, for example, direct 
damage to assets, rising insurance costs, health and safety or supply chain 
disruption. 
 
The Taskforce for Climate-related Financial Disclosures (TCFD) recommendations 
are structured around four key topics: Governance, Strategy, Risk Management 
and Metrics & Targets. The Company is committed to implementing the 
recommendations of the TCFD to provide investors with information on climate 
risks and opportunities that are relevant to the Company. We highlight our 
commitments and progress against both transition and physical risks below with 
formal TCFD disclosure in the full Annual Accounts which can be found via the 
following link https://www.abrdnpit.co.uk/en-gb/literature. 
 
Transition Risks: Targeting Net-Zero 
 
Net-Zero Strategy. 
 
The Company has set a target to be net-zero for emissions associated with 
landlord-procured energy by 2030 and has determined that it will work with 
tenants to establish a reasonable and realistic target for total carbon 
emissions over the medium term. 
 
The net-zero target was informed from the findings of a carbon modelling 
exercise undertaken in 2021 to understand its current carbon footprint, and 
what would be required to be net-zero by 2050. The key finding was that 
landlord-controlled energy (i.e. responsible for scope 1 and 2 carbon 
emissions) accounts for less than 6% of the Company's carbon footprint and we 
have limited control over 94% of the output determined by tenants. 
 
Our Net-Zero Principles. 
 
Although the goal of net-zero may seem clear, definitions and standards and the 
policy mix to support it remains immature. Accordingly, the Company has 
established several key principles to ensure its strategy, is robust and 
delivers value: 
 
Practical: 
 
·    Asset-level action - focusing on energy efficiency and renewables is our 
priority to ensure compliance with energy performance regulations. Our analysis 
shows that meeting proposed future Energy Performance Certificate standards is 
a sensible stepping stone towards net-zero. This improves the quality of assets 
for occupiers and reduces the exposure to regulatory and market risk. Our 
investment in nature-based carbon removal at Far Ralia is in addition to 
asset-level decarbonisation. 
 
·    Timing - we aim to align improvements at our properties with existing 
plant replacement cycles and planned refurbishment activities wherever 
possible. This ensures we are not unnecessarily replacing functional plant 
ahead of its useful life unless necessary, which in turn reduces cost and 
embodied carbon. 
 
Realistic: 
 
·    Target - long-term objectives must be stretching but deliverable and 
complemented by near-term targets and actions. 
 
·    Policy support - to fully decarbonise before 2050 the real estate sector 
requires a supportive policy mix to incentivise action and level the playing 
field. 
 
Measurable: 
 
·    Clear key performance indicators at the asset and portfolio level. 
 
Collaborative: 
 
·    Occupiers - we cannot achieve net-zero for the portfolio in isolation. We 
will work closely with occupiers, many of whom have their own decarbonisation 
strategies covering their leased space. 
 
·    Suppliers - we will work collaboratively with our suppliers including 
property managers and consultants in order to achieve net-zero. 
 
Performance to Date 
 
Baseline versus current performance: 
 
Our operational carbon intensity for 2019 is shown below. We have used 2019 as 
a baseline as it was unaffected by changes in occupancy due to COVID-19. The 
2019 baseline was updated from that reported in the 2021 annual report due to 
improved data coverage and the inclusion of F-gases. 
 
Normalised Portfolio Carbon Intensity: 
 
2019                        63.4 kgCO2e /m2 
 
2021                        53.1 kgCO2e /m2 
 
% Change                    (16%) 
 

This shows a total operational footprint of 25,128 tonnes of carbon dioxide 
equivalent (CO2e). Of this, 6% is associated with Scope 1 and 2 emissions that 
are directly controlled by the Company, with 94% coming from Scope 3 emissions 
from tenant procured energy. For 2019 we gathered energy consumption data for 
31% of the portfolio by floor area with representative industry standard 
benchmarks used to estimate the rest. 
 
Based on these assumptions for 2019 the energy intensity at the portfolio level 
was 286 kWh/m2 which has reduced by 7% to 266 kWh/m2 and the operational 
emissions intensity was 63.4 kgCO2e /m2 across Scopes 1, 2 and 3 which has 
improved by 16% to 53.1 kgCO2e /m2. 
 
For more information around our commitment and approach to ESG, please see our 
full Annual Accounts https://www.abrdnpit.co.uk/en-gb/literature. 
 
PRINCIPAL RISKS AND UNCERTAINTIES 
 
The Board ensures that proper consideration of risk is undertaken in all 
aspects of the Company's business on a regular basis. During the year, the 
Board carried out an assessment of the risk profile of the Company, including 
consideration of risk appetite, risk tolerance and risk strategy. The Board 
regularly reviews the principal and emerging risks of the Company, seeking 
assurance that these risks are appropriately rated and ensuring that 
appropriate risk mitigation is in place. 
 
The group and its objectives become unattractive to investors, leading to 
widening of the discount. 
 
This risk is mitigated through regular contact with shareholders, a regular 
review of share price performance and the level of the discount or premium at 
which the shares trade to net asset value and regular meetings with the 
Company's broker to discuss these points and address any issues that arise. 
Geopolitical risk increased the volatility of the Company's share price and, 
reflecting wider market sentiment, has resulted in the Company's shares trading 
at a discount to prevailing NAV of 26.4% as at 31 December 2022, in-line with 
other diversified peers in the Company's AIC peer group. 
 
Net revenue falls such that the Company cannot sustain its level of dividend, 
for example due to tenant failure, voids or increased costs. 
 
This risk is mitigated through regular review of forecast dividend cover and of 
tenant mix, risk and profile. Due diligence work on potential tenants is 
undertaken before entering into new lease arrangements and tenants are kept 
under review through regular contact and various reports both from the managing 
agents and the Investment Manager's own reporting process. 
 
Contingency plans are put in place at units that have tenants that are believed 
to be in financial trouble. The Company subscribes to the MSCI Iris Report 
which updates the credit and risk ranking of the tenants and income stream, and 
compares it to the rest of the UK real estate market. 
 
During 2022 the significantly heightened geopolitical uncertainty and cost of 
living crisis have resulted in inflationary pressures and vulnerabilities in 
supply chains being exposed. Government initiatives have eased some of these 
pressures and we are yet to see the full impact which could impact upon our 
tenants' ability to trade profitably. 
 
Uncertainty or change in the macroeconomic environment results in property 
becoming an undesirable asset class, causing a decline in property values. 
 
This risk is managed through regular reporting from, and discussion with, the 
Investment Manager and other advisers. Macroeconomic conditions form part of 
the decision making process for purchases and sales of properties and for 
sector allocation decisions. 
 
The impact of geopolitical uncertainty and the cost of living crisis have 
resulted in inflationary pressures which have impacted both property values and 
the ability of tenants to pay rent. 
 
Real estate holdings of good quality and rental growth prospects can appear 
more attractive at such times to offer a partial hedge against inflationary 
pressures. 
 
Environmental. 
 
Environmental risk is considered as part of each purchase and monitored on an 
ongoing basis by the Investment Manager. However, with extreme weather events 
both in the UK and globally becoming a more regular occurrence due to climate 
change, the impact of the environment on the property portfolio and on the 
wider UK economy is seen as an increasing risk. 
 
Please see the Environmental, Social and Governance Policy section, our 
Taskforce for Climate-related Financial Disclosures of our full Annual Accounts 
and the Investment Manager's Review for further details on how the Company 
addresses environmental risk, including climate change. 
 
Other risks faced by the Group include the following: 
 
·    Tax efficiency - the structure of the Group or changes to legislation 
could result in the Group no longer being a tax efficient investment vehicle 
for shareholders. 
 
·    Regulatory - breach of regulatory rules could lead to the suspension of 
the Group's Stock Exchange Listing, financial penalties or a qualified audit 
report. 
 
·    Financial - inadequate controls by the Investment Manager or third party 
service providers could lead to misappropriation of assets. Inappropriate 
accounting policies or failure to comply with accounting standards could lead 
to misreporting or breaches of regulations. 
 
·    Operational - failure of the Investment Manager's accounting systems or 
disruption to the Investment Manager's business, or that of third party service 
providers, could lead to an inability to provide accurate reporting and 
monitoring, leading to loss of shareholder confidence. 
 
·    Business continuity - risks to any of the Company's service providers or 
properties, following a catastrophic event e.g. terrorist attack, cyber-attack, 
power disruptions or civil unrest, leading to disruption of service, loss of 
data etc. 
 
·    Refinancing - risk that the Company is unable to renew its existing 
facilities, or does so on significantly adverse terms, which does not support 
the current business strategy. 
 
The Board seeks to mitigate and manage all risks through continual review, 
policy setting and enforcement of contractual obligations. It also regularly 
monitors the investment environment and the management of the Group's property 
portfolio, levels of gearing and the overall structure of the Group. 
 
Details of the Group's internal controls are described in more detail in the 
Corporate Governance Report in the full Annual Accounts which can be found via 
the following link: https://www.abrdnpit.co.uk/en-gb/literature. 
 
Emerging Risks 
 
Emerging risks have been identified by the Board through a process of 
evaluating relatively new risks that have emerged and increased materially in 
the year, and subsequently, or through market intelligence are expected to grow 
significantly and impact the Company. Any such emerging risks are likely to 
cause disruption to the business model. If ignored, they could impact the 
Company's financial performance and prospects. Alternatively, if recognised, 
they could provide opportunities for transformation and improved performance. 
 
Economic and Geopolitical. 
 
Russia's invasion of Ukraine is the largest, most dangerous military conflict 
in Europe since WWII. Russian President Vladimir Putin failed in his initial 
aim to destroy Ukrainian sovereignty and has since increased attacks on 
Ukraine's energy and civilian infrastructure. A settlement or even a ceasefire 
looks unlikely for now. Instead, an extended conflict is anticipated, alongside 
a long term political, economic and military standoff between the West and 
Russia. Intentional or accidental escalation between NATO and Russia remains a 
risk. 
 
The Investment Manager expects global markets to remain volatile. From a 
macro-economic perspective, higher medium-term oil, gas and food prices 
alongside financial market disruption and sanctions on Russia could lead to a 
continuation of the already elevated inflationary environment, which will in 
turn weaken the outlook for economic growth. There is also the risk of further 
interest rate increases. A period of prolonged instability, with impacts for 
Europe in particular, is now clearly a potential outcome. 
 
Tensions are also increasing in the relationship between the United States and 
China which could lead to greater protectionism and a decline in global trade. 
In particular, the future of Taiwan is uncertain and as one of the largest 
producers and exporters of microchips in the world could cause considerable 
disruption if its independence was threatened. 
 
The current economic and geopolitical environment is unpredictable, and 
changing rapidly, and this may affect the real estate valuations in the 
Company's portfolio. 
 
Climate. 
 
Climate change is happening now and its rate of change and impact on the 
environment will depend on the planet's success in controlling global 
emissions. The average surface temperature in the UK has risen by 1.2oC since 
pre-industrial times, and further warming is predicted. More extreme weather 
events are also expected in future which could cause serious damage to 
infrastructure and property. The extent of climate change and the necessary 
regulation to control it are uncertain and will continue to be monitored. 
 
The Legacy of COVID-19. 
 
Although the direct impact of COVID-19 on our lives has receded, it has 
introduced or accelerated some structural changes to the ways that we live, 
work and consume and reformed our expectations of our environment and society. 
In particular, the trend towards flexible and home working is affecting the use 
of offices, with sustainability, health, wellbeing and the social impact of 
office use increasing in importance. 
 
COVID-19 has also impacted the way that we that we shop: social distancing 
measures in response to the pandemic have accelerated the increase in on-line 
shopping and decline in physical retailing. This has created challenging 
conditions for traditional retailers and their landlords. It is still uncertain 

how the role of offices and retail will develop and they both continue to be 
assessed in order to protect the portfolio but also to identify new investment 
opportunities. 
 
Technology. 
 
Technology is also rapidly changing the habits of businesses and consumers 
which in turn is impacting occupiers' future requirements for property and 
leading to greater disparity in the performance of different property sectors 
and also within each sector itself. Advances in technology have enabled many of 
the behavioural changes in the use of real estate: for example, the increased 
use of video conferencing by businesses has facilitated a more permanent shift 
to home working and could also redefine the need for office space in the 
future. 
 
Robotics and automation are also altering the specifications for industrial 
buildings and greater use of data and advanced analytics is driving the need 
the data storage and data centres. Technology is also increasingly contributing 
to improvements in the sustainability of properties. If landlords fail to 
embrace technology, they may face the risk of "stranded" assets in the future. 
 
Viability Statement 
 
The Board considers viability as part of its programme of financial reporting 
and monitoring risk. The Board regularly reviews the prospects for the Company 
over the longer term taking into account the Company's current financial 
position, its operating model, and the diversified constituents of its 
portfolio. In addition the Board considers strong initial due diligence 
processes, the continued review of the portfolio and the active asset 
management initiatives. Given the above, the Board believes that the Company 
has a sound basis upon which to continue to deliver returns over the long term. 
 
In terms of viability, the Board has considered the nature of the Group's 
assets and liabilities and associated cash flows and has determined that three 
years is the maximum timescale over which the performance of the Group can be 
forecast with a material degree of accuracy and so is an appropriate period 
over which to consider the Group's viability. This timescale was assessed as 
being more accurate than the previous five year period used by the Board and 
also brings the Group more in line with its peer group and reflecting the term 
of the long-term debt. 
 
The Board has also carried out a robust assessment of the principal and 
emerging risks faced by the Group, as detailed above. The main risks which the 
Board considers will affect the business model are: future performance, 
solvency, liquidity, tenant failure leading to a fall in dividend cover and 
macroeconomic uncertainty. 
 
These risks have all been considered in light of the financial and economic 
impact that arose from COVID-19 and considering the emerging geopolitical 
risks. 
 
The Board takes any potential risks to the ongoing success of the Group, and 
its ability to perform, very seriously and works hard to ensure that risks are 
consistent with the Group's risk appetite at all times. In assessing the 
Group's viability, the Board has carried out thorough reviews of the following: 
 
·    Detailed NAV, cash resources and income forecasts, prepared by the 
Company's Investment Manager, for a three year period under both normal and 
stressed conditions; 
 
·    The Group's ability to pay its operational expenses, bank interest, tax 
and dividends over a three year period; 
 
·    Future debt repayment dates and debt covenants, in particular those in 
relation to LTV and interest cover; 
 
·    The ability of the Company to refinance its debt facilities in April 2023; 
 
·    Demand for the Company's shares and levels of premium or discount at which 
the shares trade to NAV; 
 
·    Views of shareholders; and 
 
·    The valuation and liquidity of the Group's property portfolio, the 
Investment Manager's portfolio strategy for the future and the market outlook. 
 
The assessment for stressed conditions used a foreseeable severe but plausible 
scenario which was modelled using the following assumptions: 
 
  * 25 per cent capital fall in the next 3 years 
  * Tenant defaults of 15 per cent for the next 3 years 
  * Sterling Overnight Index Average (SONIA) tracks 1.0 per cent above the 
    anticipated forward curve 
 
Even under those scenarios the Group remains viable. 
 
Despite the uncertainty in the UK regarding the impact of international 
conflict, the Board has a reasonable expectation, based on the information at 
the time of writing, that the Group will be able to continue in operation and 
meet its liabilities as they fall due over the next three years. This 
assessment is based on the current financial position of the Company, its 
performance track record and feedback it receives from shareholders. 
 
GOING CONCERN 
 
The Group's strategy and business model, together with the factors likely to 
affect its future development, performance and position, including principal 
risks and uncertainties, are set out in the Strategic Report. 
 
The Directors have reviewed detailed cash flow, income and expense projections 
in order to assess the Group's ability to pay its operational expenses, bank 
interest and dividends over the going concern period. The Directors have 
examined significant areas of possible financial risk including cash and cash 
requirements and the debt covenants, in particular those relating to LTV and 
interest cover. 
 
The Directors have not identified any material uncertainties, including risks 
related to significantly heightened geopolitical uncertainty and cost of living 
crisis, which might cast significant doubt on the ability of the Group to 
continue as a going concern for a period of not less than 12 months from the 
date of the approval of this Annual Report. 
 
The Directors have satisfied themselves that the Group has adequate resources 
to continue in operational existence and the Board believes it is appropriate 
to adopt the going concern basis in preparing the consolidated financial 
statements. 
 
STATEMENT OF DIRECTOR'S RESPONSIBILITIES 
 
The Directors are responsible for preparing the Annual Report and the Group 
Consolidated Financial Statements for each year which give a true and fair 
view, in accordance with the applicable Guernsey law and those International 
Financial Reporting Standards ("IFRSs") as adopted by the European Union. 
 
In preparing those Consolidated Financial Statements, the Directors are 
required to: 
 
·    Select suitable accounting policies in accordance with IAS 8: Accounting 
Policies, Changes in Accounting Estimates and Errors and then apply them 
consistently; 
 
·    Make judgement and estimates that are reasonable and prudent; 
 
·    Present information, including accounting policies, in a manner that 
provides relevant, reliable, comparable and understandable information; 
 
·    Provide additional disclosures when compliance with the specific 
requirements in IFRSs as adopted by the European Union is insufficient to 
enable users to understand the impact of particular transactions, other events 
and conditions on the Group's financial position and financial performance; 
 
·    State that the Group has complied with IFRSs as adopted by the European 
Union, subject to any material departures disclosed and explained in the Group 
Consolidated Financial Statements; and 
 
·    Prepare the Group Consolidated Financial Statements on a going concern 
basis unless it is inappropriate to presume that the Group will continue in 
business. 
 
The Directors confirm that they have complied with the above requirements in 
preparing the Group Consolidated Financial Statements. 
 
The Directors are responsible for keeping adequate accounting records, that are 
sufficient to show and explain the Group's transactions and disclose with 
reasonable accuracy at any time, the financial position of the Group and to 
enable them to ensure that the Financial Statements comply with The Companies 
(Guernsey) Law, 2008. They are also responsible for safeguarding the assets of 
the Group and hence for taking reasonable steps for the prevention and 
detection of fraud, error and non-compliance with law and regulations. 
 
The maintenance and integrity of the Company's website is the responsibility of 
the Directors through its Investment Manager; the work carried out by the 
auditors does not involve considerations of these matters and, accordingly, the 
auditors accept no responsibility for any change that may have occurred to the 
Consolidated Financial Statements since they were initially presented on the 
website. Legislation in Guernsey governing the preparation and dissemination of 
the consolidated financial statements may differ from legislation in other 
jurisdictions. 
 
Responsibility Statement of the Directors in respect of the Consolidated Annual 
Report under the Disclosure and Transparency Rules 
 
The Directors each confirm to the best of their knowledge that: 
 
·    The Consolidated Financial Statements, prepared in accordance with IFRSs 
as adopted by the European Union, give a true and fair view of the assets, 
liabilities, financial position and profit or loss of the Group; and 
 
·    The management report, which is incorporated into the Strategic Report, 
Directors' Report and Investment Manager's Review, includes a fair review of 
the development and performance of the business and the position of the Group, 
together with a description of the principal risks and uncertainties that they 
face. 
 
Statement under the UK Corporate Governance Code 
 
The Directors each confirm to the best of their knowledge and belief that the 
Annual Report and Consolidated Financial Statements taken as a whole are fair, 
balanced and understandable and provide the information necessary to assess the 
Group's position and performance, business model and strategy. 
 
Approved by the Board on 
 
21 April 2023 
 
James Clifton-Brown 
 
Chair 
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
 
For the year ended 31 December 2022 
 

                                                              12 months to    12 months to 
                                                 Notes         31 Dec 2022     31 Dec 2021 
                                                                         £               £ 
 
Rental income                                                   26,697,931      26,485,585 
 
Service charge income                              4             4,411,821       4,097,344 
 
Service charge expenditure                         4           (5,576,812)     (4,938,920) 
 
Net Rental Income                                               25,532,940      25,644,009 
 
Administrative and other expenses 
 
Investment management fees                         4           (3,480,963)     (3,301,074) 
 
Other direct property expenses                     4           (3,089,960)     (2,564,156) 
 
Impairment gain/(loss) on trade receivables        4               852,062       (406,475) 
 
Other administration expenses                      4           (1,134,919)     (1,162,009) 
 
Total Administrative and other expenses                        (6,853,780)     (7,433,714) 
 
Operating profit before changes in fair value                   18,679,160      18,210,295 
of investment properties 
 
Valuation (loss)/gain from investment              7          (62,257,782)      72,188,550 
properties 
 
Valuation loss from land                           8              (60,322)       (501,550) 
 
Loss on disposal of investment properties          7             (207,153)       (634,368) 
 
Operating (loss)/profit                                       (43,846,097)      89,262,928 
 
Finance income                                     5                27,543             763 
 
Finance costs                                      5           (3,672,685)     (3,530,870) 
 
Loss on termination of interest rate swaps        14b          (3,562,248)               - 
 
(Loss)/profit for the period before taxation                  (51,053,487)      85,732,821 
 
Taxation 
 
Tax charge                                                               -               - 
 
(Loss)/profit for the period, net of tax                      (51,053,487)      85,732,821 
 
Other comprehensive income 
 
Movement in fair value on existing swap           14a            1,470,570       3,167,218 
 
Movement in fair value on interest rate cap       14c               43,292               - 
 
Total other comprehensive gain                                   1,513,862       3,167,218 
 
Total comprehensive (loss)/gain for the period,               (49,539,625)      88,900,039 
net of tax 
 
Earnings per share                                                2022 (p)        2021 (p) 
 
Basic and diluted earnings per share              19               (13.11)           21.54 
 
All items in the above Consolidated Statement of Comprehensive Income derive 
from continuing operations. 
 
The notes below are an integral part of these Consolidated Financial 
Statements. 
 
 
CONSOLIDATED BALANCE SHEET 
 
As at 31 December 2022 
 
Assets                                                   31 Dec 2022      31 Dec 2021 
                                           Notes                   £                £ 
 
Non-current assets 
 
Investment properties                        7           401,217,536      484,514,085 
 
Lease incentives                             7             8,357,036        8,802,294 
 
Land                                         8             7,500,000        7,500,000 
 
Interest rate cap                           14c            2,211,007                - 
 
Rental deposits held on behalf of                            751,782          904,189 
tenants 
 
                                                         420,037,361      501,720,568 
 
Current assets 
 
Trade and other receivables                 10             7,457,083       11,024,100 
 
Cash and cash equivalents                   11            15,871,053       13,818,008 
 
Interest rate swap                          14a            1,238,197                - 
 
Interest rate cap                           14c              339,462                - 
 
                                                          24,905,795       24,842,108 
 
Total assets                                             444,943,156      526,562,676 
 
Liabilities 
 
Current liabilities 
 
Trade and other payables                    12            10,880,310       13,618,457 
 
Interest rate swap                          14a                    -          546,526 
 
                                                          10,880,310       14,164,983 
 
Non-current liabilities 
 
Bank borrowings                             13           109,123,937      109,723,399 
 
Interest rate swap                          14a                    -           31,510 
 
Obligations under finance leases            15               899,572          901,129 
 
Rent deposits due to tenants                                 751,782          904,189 
 
                                                         110,775,291      111,550,227 
 
Total liabilities                                        121,655,601      125,715,210 
 
Net assets                                               323,287,555      400,847,466 
 
Equity 
 
Capital and reserves attributable to 
Company's equity holders 
 
Share capital                               17           228,383,857      228,383,857 
 
Treasury share reserve                      17          (18,400,876)      (5,991,417) 
 
Retained earnings                           18             4,362,024        8,521,081 
 
Capital reserves                            18            11,084,178       72,095,573 
 
Other distributable reserves                18            97,838,372       97,838,372 
 
Total equity                                             323,287,555      400,847,466 
 
Approved and authorised for issue by the Board of Directors on 21 April 2023 
and signed on their behalf by James Clifton-Brown 
 
The accompanying notes below are an integral part of these Consolidated 
Financial Statements. Company Number: 41352 (Guernsey). 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
For the year ended 31 December 2022 
 
                                            Notes    Share Capital £ Treasury Shares £ Retained Earnings  Capital Reserves             Other    Total Equity £ 
                                                                                                       £                 £     Distributable 
                                                                                                                                  Reserves £ 
 
Opening balance 1 January 2022                           228,383,857       (5,991,417)         8,521,081        72,095,573        97,838,372       300,847,466 
 
Loss for the year                                                  -                 -      (51,053,487)                 -                 -      (51,053,487) 
 
Other comprehensive income                                         -                 -                 -         1,513,862                 -         1,513,862 
 
Total comprehensive income for the period                          -                 -      (51,053,487)         1,513,862                 -      (49,539,625) 
 
Ordinary shares paced into treasury net of    17                   -      (12,409,459)                 -                 -                 -      (12,409,459) 
issue costs 
 
Dividends paid                                20                   -                 -      (15,610,827)                 -                 -      (15,610,827) 
 
Valuation loss from investment properties     7                    -                 -        62,257,782      (62,257,782)                 -                 - 
 
Valuation loss from land                      8                    -                 -            60,322          (60,322)                 -                 - 
 
Loss on disposal of investment properties     7                    -                 -           207,153         (207,153)                 -                 - 
 
Balance at 31 December 2022                              228,383,857      (18,400,876)         4,382,024        11,084,178        97,838,372       323,287,555 
 
 
 
                                             Notes   Share Capital £ Treasury Shares £ Retained Earnings  Capital Reserves             Other    Total Equity £ 
                                                                                                       £                 £     Distributable 
                                                                                                                                  Reserves £ 
 
Opening balance 1 January 2021                           228,383,857       (1,450,787)         7,339,209         (604,214)        97,838,372       331,506,437 
 
Profit for the year                                                -                 -        85,732,820                 -                 -        85,732,820 
 
Other comprehensive income                                         -                 -                 -         3,167,218                 -         3,167,218 
 
Total comprehensive income for the period                          -                 -        85,732,820                 -                 -       88,900,038) 
 
Ordinary shares paced into treasury net of   17                    -       (4,540,630)                 -                 -                 -       (4,540,630) 
issue costs 
 
Dividends paid                               20                    -                 -      (15,018,379)                 -                 -      (15,018,379) 
 
Other transfer between reserves              18                    -                 -         1,520,063       (1,520,063)                 -                 - 
 

Valuation gain from investment properties     7                    -                 -      (72,188,550)        72,188,550                 -                 - 
 
Valuation loss from land                      8                    -                 -           501,550         (501,550)                 -                 - 
 
Loss on disposal of investment properties     7                    -                 -           634,368         (634,368)                 -                 - 
 
Balance at 31 December 2021                              228,383,857       (5,991,417)         8,521,081        72,095,573        97,838,372       400,847,466 
 
 
 
CONSOLIDATED CASH FLOW STATEMENT 
 
For the year ended 31 December 2022 
 
                                                      12 months to     12 months to 
 
Cash flows from operating activities                   31 Dec 2022      31 Dec 2021 
                                          Notes                  £                £ 
 
(Loss)/profit for the year before                     (51,053,487)       85,732,820 
taxation 
 
Movement in lease incentives                             (841,398)      (2,966,033) 
 
Movement in trade and other receivables                  3,719,424        (270,226) 
 
Movement in trade and other payables                   (3,237,151)          536,404 
 
Finance costs                                5           3,562,248          (5,877) 
 
Finance income                               5           3,672,685        3,530,870 
 
Other transfer between reserves                           (27,543)            (763) 
 
Valuation loss/(gain) from investment        7                   -        1,520,064 
properties 
 
Valuation loss from land                     8          62,257,782     (72,188,550) 
 
Loss on disposal of investment properties    7              60,322          501,550 
 
Net cash inflow from operating activities               18,320,035       17,030,504 
 
Cash flows from investing activities 
 
Interest received                            5              27,543              763 
 
Purchase of investment properties            7         (5,501,321)     (11,741,501) 
 
Purchase of land                             8            (60,322)      (8,001,550) 
 
Capital expenditure on investment            7        (13,524,813)      (1,819,229) 
properties 
 
Net proceeds from disposal of investment     7          41,142,847       31,840,632 
properties 
 
Net cash inflow from investing activities               22,083,934       10,279,113 
 
Cash flows from financing activities 
 
Shares bought back during the year          17        (12,409,459)      (4,540,630) 
 
Drawn-down on RCF                           13          17,000,000                - 
 
Repayment of RCF                            13        (17,000,000)                - 
 
Bank borrowing arrangement                  13           (804,297)                - 
 
Interest paid on bank borrowings                       (2,959,023)      (1,872,545) 
 
Payments on interest rate swaps                          (473,425)      (1,418,916) 
 
Swap breakage costs                         14b        (3,562,248)                - 
 
Cap arrangement fees                        14c        (2,507,177)                - 
 
Finance lease interest                       5            (24,468)         (24,511) 
 
Dividends paid to the Company's             20        (15,610,827)     (15,018,379) 
shareholders 
 
Net cash outflow from financing                       (38,350,924)      (22,874,981 
activities 
 
Net increase in cash and cash equivalents                2,053,045        4,434,637 
 
Cash and cash equivalents at beginning of   11          13,818,008        9,383,371 
year 
 
Cash and cash equivalents at end of year    11          15,871,053       13,818,008 
 
Notes TO the consolidated financial statements 
 
1. General Information 
 
abrdn Property Income Trust Limited ("the Company") and its subsidiaries 
(together "the Group") carries on the business of property investment through a 
portfolio of freehold and leasehold investment properties located in the United 
Kingdom. The Company is a limited liability company incorporated in Guernsey, 
Channel Islands. The Company has its listing on the London Stock Exchange. 
 
The address of the registered office is 
 
PO Box 255, 
 
Trafalgar Court, 
 
Les Banques, 
 
St Peter Port, 
 
Guernsey 
 
These audited Consolidated Financial Statements were approved for issue by the 
Board of Directors on 21 April 2023. 
 
2. Accounting Policies 
 
2.1. Basis of preparation 
 
The audited Consolidated Financial Statements of the Group have been prepared 
in accordance with International Financial Reporting Standards ("IFRS") as 
adopted by the European Union and as issued by the International Accounting 
Standards Board, and all applicable requirements of The Companies (Guernsey) 
Law, 2008. The audited Consolidated Financial Statements of the Group have been 
prepared under the historical cost convention as modified by the measurement of 
investment property, land and derivative 
 
financial instruments at fair value. The Consolidated Financial Statements are 
presented in pounds sterling and all values are not rounded except when 
otherwise indicated. 
 
The Directors have considered the basis of preparation of the accounts given 
the significantly heightened geopolitical uncertainty and cost of living crisis 
and believe that it is still appropriate for the accounts to be prepared on the 
going concern basis as further described in the Directors Report. 
 
Changes in accounting policy and disclosure. 
 
The following amendments to existing standards and interpretations were 
effective for the year, but were deemed not applicable to the Group: 
 
·    Amendments to IFRS 3 Reference to the Conceptual Framework, Amendments to 
IAS 37 Onerous Contracts Cost of Fulfilling a Contract, and IAS 16 Property, 
Plant and Equipment - Proceeds before Intended Use 
 
The IFRS Interpretations Committee issued the following Agenda Decision in 
October 2022. 
 
·    IFRIC: Lessor forgiveness of lease payments (IFRS 9 'Financial 
Instruments' and IFRS 16 'Leases') 
 
The amendment is effective immediately, the directors of the Group are 
determining the impact but don't expect it to be material. 
 
Annual improvements to IFRS. 
 
Annual Improvements to IFRS Accounting Standards 2018-2020 Cycle includes 
amendments to four standards for the current year. 
 
·    IFRS 1 First-time Adoption of International Financial Reporting Standards 
 
·    IFRS 9 Financial Instruments 
 
·    IFRS 16 Leases 
 
·    IAS 41 Agriculture 
 
The Directors have considered the amendments noted above and have deemed these 
not applicable to the Group. 
 
New and revised IFRS Accounting Standards in issue but not yet effective. 
 
At the date of authorisation of these financial statements, the Group has not 
applied the following new and revised IFRS Accounting Standards that have been 
issued but are not yet effective. 
 
·    Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 
Investments in Associates and Joint Ventures - Sale or Contribution of Assets 
between an Investor and its Associate or Joint Venture 
 
·    Amendments to IAS 1 Presentation of Financial Statements-Classification of 
Liabilities as Current or Non-current 
 
·    Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice 
Statement 2 Making Materiality Judgements - Disclosure of Accounting Policies 
 
The amendments change the requirements in IAS 1. 
 
·    Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates 
and Errors - Definition of Accounting Estimates 
 
The amendments replace the definition of a change. 
 
2.2 Significant accounting judgements, estimates and assumptions. 
 
The preparation of the Group's Financial Statements requires management to make 
judgements, estimates and assumptions that affect the reported amounts of 
revenues, expenses, assets and liabilities, and the disclosure of contingent 
liabilities, at the reporting date. However, uncertainties about these 
assumptions and estimates could result in outcomes that could require a 
material adjustment to the carrying amount of the asset or liability affected 
in future periods. The most significant estimates and judgements are set out 
below. There were no critical accounting judgements. 
 
Fair value of investment properties. 
 
Investment properties are stated at fair value as at the Balance Sheet date. 
Gains or losses arising from changes in fair values are included in the 
Consolidated Statement of Comprehensive Income in the year in which they arise. 
The fair value of investment properties is determined by external real estate 
valuation experts using recognised valuation techniques. The fair values are 
determined having regard to any recent real estate transactions where 
available, with similar characteristics and locations to those of the Group's 
assets. 
 
In most cases however, the determination of the fair value of investment 
properties requires the use of valuation models which use a number of 
judgements and assumptions. The only model used was the income capitalisation 
method. Under the income capitalisation method, a property's fair value is 
judged based on the normalised net operating income generated by the property, 
which is divided by the capitalisation rate (discounted by the investor's rate 
of return). 
 
Under the income capitalisation method, over (above market rent) and under-rent 
situations are separately capitalised (discounted). 
 
The sensitivity analysis in note 7 details the decrease in the valuation of 
investment properties if equivalent yield increases by 50 basis points or 
rental rates (ERV) decreases by 5% which the Board believes are reasonable 
sensitivities to apply given historical movements in valuations. 
 
Fair value of financial instruments. 
 
When the fair value of financial assets and financial liabilities recorded in 

the Consolidated Balance Sheet cannot be derived from active markets, they are 
determined using a variety of valuation techniques that include the use of 
mathematical models. The input to these models are taken from observable 
markets where possible, but where this is not feasible, a degree of judgement 
is required in establishing 
 
fair value. 
 
The judgements include considerations of liquidity and model inputs such as 
credit risk (both own and counterparty's), correlation and volatility. 
 
Changes in assumptions about these factors could affect the reported fair value 
of financial instruments. The models are calibrated regularly and tested for 
validity using prices from any observable current market transactions in the 
same instrument (without modification or repackaging) or based on any available 
observable market data. 
 
The valuation of interest rate swaps used in the Balance Sheet is provided by 
The Royal Bank of Scotland. These values are validated by comparison to 
internally generated valuations prepared using the fair value principles 
outlined above. 
 
The sensitivity analysis in note 3 details the increase and decrease in the 
valuation of interest rate swaps if market rate interest rates had been 100 
basis points higher and 100 basis points lower. 
 
Provision for impairment of receivables. 
 
Provision for impairment of receivables are also a key estimation uncertainty. 
These are measured with reference to amounts included as income at the year end 
but not yet collected. In assessing whether the credit risk of an asset has 
significantly increased the Group takes into account qualitative and 
quantitative reasonable and supportable forward-looking information. 
 
Due to the impact of the significantly heightened geopolitical uncertainty and 
cost of living crisis on collection rates, there remains an elevated assessed 
credit risk. Each individual rental income debtor is reviewed to assess whether 
it is believed there is a probability of default and expected credit loss given 
the knowledge of and intelligence about the individual tenant and an 
appropriate provision made. 
 
2.3 Summary of significant accounting policies. 
 
A Basis of consolidation. 
 
The audited Consolidated Financial Statements comprise the financial statements 
of abrdn Property Income Trust Limited and its material wholly owned subsidiary 
undertakings. 
 
Control is achieved when the Group is exposed, or has rights, to variable 
returns from its involvement with 
 
subsidiaries and has the ability to affect those returns through its power over 
the subsidiary. Specifically, the Group controls a subsidiary if, and only if, 
it has: 
 
·    Power over the subsidiary (i.e. existing rights that give it the current 
ability to direct the relevant activities of the subsidiary) 
 
·    Exposure, or rights, to variable returns from its involvement with the 
subsidiary 
 
·    The ability to use its power over the subsidiary to affect its returns 
 
The Group assesses whether or not it controls a subsidiary if facts and 
circumstances indicate that there are changes to one or more of the three 
elements of control. Consolidation of a subsidiary begins when the Group 
obtains control over the subsidiary and ceases when the Group loses control of 
the subsidiary. 
 
Assets, liabilities, income and expenses of a subsidiary acquired or disposed 
of during the year are included in the consolidated statement of other 
comprehensive income from the date the Group gains control until the date when 
the Group ceases to control the subsidiary. 
 
The financial statements of the subsidiaries are prepared for the same 
reporting period as the parent company, using consistent accounting policies. 
All intra-group balances, transactions and unrealised gains and losses 
resulting from intra-group transactions are eliminated in full. 
 
B Functional and presentation currency. 
 
Items included in the financial statements of each of the Group's entities are 
measured using the currency of the primary economic environment in which the 
entity operates ("the functional currency"). The Consolidated Financial 
Statements are presented in pound sterling, which is also the Company's 
functional currency. 
 
C Revenue Recognition. 
 
Revenue is recognised as follows; 
 
i) Bank interest. 
 
Bank interest income is recognised on an accruals basis. 
 
ii) Rental income. 
 
Rental income from operating leases is net of sales taxes and value added tax 
("VAT") recognised on a straight line basis over the lease term including lease 
agreements with stepped rent increases. The initial direct costs incurred in 
negotiating and arranging an operating lease are recognised as an expense over 
the lease term on the same basis as the lease income. The cost of any lease 
incentives provided are recognised over the lease term, on a straight line 
basis as a reduction of rental income. The resulting asset is reflected as 
 
a receivable in the Consolidated Balance Sheet. 
 
Contingent rents, being those payments that are not fixed at the inception of 
the lease, for example increases arising on rent reviews, are recorded as 
income in periods when they are earned. Rent reviews which remain outstanding 
at the year end are recognised as income, based on estimates, when it is 
reasonable to assume that they will be received. 
 
iii) Other income. 
 
The Group is classified as the principal in its contract with the managing 
agent. Service charges billed to tenants by the managing agent are therefore 
recognised gross. 
 
iv) Property disposals. 
 
Where revenue is obtained by the sale of properties, it is recognised once the 
sale transaction has been completed, regardless of when contracts have been 
exchanged. 
 
D Expenditure. 
 
All expenses are accounted for on an accruals basis. The investment management 
and administration fees, finance and all other revenue expenses are charged 
through the Consolidated Statement of Comprehensive Income as and when 
incurred. The Group also incurs capital expenditure which can result in 
movements in the capital value of the investment properties. 
 
E Taxation. 
 
Current income tax assets and liabilities are measured at the amount expected 
to be recovered from or paid to taxation authorities. The tax rates and tax 
laws used to compute the amount are those that are enacted or substantively 
enacted by the reporting date. Current income tax relating to items recognised 
directly in other comprehensive income or in equity is recognised in other 
comprehensive income and in equity respectively, and not in the income 
statement. Positions taken in tax returns with respect to situations in which 
applicable tax regulations are subject to interpretation, if any, are reviewed 
periodically and provisions are established where appropriate. 
 
The Group recognises liabilities for current taxes based on estimates of 
whether additional taxes will be due. When the final tax outcome of these 
matters is different from the amounts that were initially recorded, such 
differences will impact the income and deferred tax provisions in the period in 
which the determination is made. 
 
Deferred income tax is provided using the liability method on all temporary 
differences at the reporting date between the tax bases of assets and 
liabilities and their carrying amounts for financial reporting purposes. 
 
Deferred income tax assets are recognised only to the extent that it is 
probable that taxable profit will be available against which deductible 
temporary differences, carried forward tax credits or tax losses can be 
utilised. 
 
The amount of deferred tax provided is based on the expected manner of 
realisation or settlement of the 
 
carrying amount of assets and liabilities. In determining the expected manner 
of realisation of an asset the Directors consider that the Group will recover 
the value of investment property through sale. Deferred income tax relating to 
items recognised directly in equity is recognised in equity and not in profit 
or loss. 
 
F Investment property. 
 
Investment properties comprise completed property and property under 
construction or re-development that is held to earn rentals or for capital 
appreciation or both. Property held under a lease is classified as investment 
property when the definition of an investment property is met. 
 
Investment properties are measured initially at cost including transaction 
costs. Transaction costs include transfer taxes, professional fees for legal 
services and initial leasing commissions to bring the property to the condition 
necessary for it to be capable of operating. The carrying amount also includes 
the cost of replacing part of an existing investment property at the time that 
cost is incurred if the recognition criteria are met. 
 
Subsequent to initial recognition, investment properties are stated at fair 
value. Fair value is based upon the market valuation of the properties as 
provided by the external valuers as described in note 2.2. Gains or losses 
arising from changes in the fair values are included in the Consolidated 
Statement of Comprehensive Income in the year in which they arise. For the 
purposes of these financial statements, in order to avoid double counting, the 
assessed fair value is: 
 
i) Reduced by the carrying amount of any accrued income resulting from the 
spreading of lease incentives and/or minimum lease payments. 
 
ii) Increased by the carrying amount of any liability to the superior 
leaseholder or freeholder (for properties held by the Group under operating 
leases) that has been recognised in the Balance Sheet as a finance lease 
obligation. 
 
Acquisitions of investment properties are considered to have taken place on 
exchange of contracts unless there are significant conditions attached. For 
conditional exchanges acquisitions are recognised when these conditions are 
satisfied. Investment properties are derecognised when they have been disposed 
of and no future economic benefit is expected from their disposal. Any gains or 

losses on the disposal of investment properties are recognised in the 
Consolidated Statement of Comprehensive Income in the year of retirement or 
disposal. 
 
Gains or losses on the disposal of investment properties are determined as the 
difference between net disposal proceeds and the carrying value of the asset in 
the previous full period financial statements. 
 
G Investment properties held for sale. 
 
Non-current assets (and disposal groups) classified as held for sale are 
measured at the lower of carrying amount and fair value (except for investment 
property measured using fair value model). 
 
Non-current assets and disposal groups are classified as held for sale if their 
carrying amount will be recovered through a sale transaction rather than 
through continuing use. This condition is regarded as met only when the sale is 
highly probable and the asset (or disposal group) is available for immediate 
sale in its present condition. Management must be committed to the sale which 
should be expected to qualify for recognition as a completed sale within one 
year from the date of classification. 
 
H Land. 
 
The Group's land is capable of woodland creation and peatland restoration 
projects which would materially assist the Group's transition to Net-Zero. 
 
Land is initially measured at cost including transaction costs. Transaction 
costs include transfer taxes and professional fees for legal services. 
Subsequent expenditure is capitalised only if it is probable that the future 
economic benefits associated with the expenditure will flow to the Group. Land 
is not depreciated but instead, subsequent to initial recognition, recognised 
at fair value based upon periodic valuations provided by the external valuers. 
Gains or losses arising from changes in the fair values are included in the 
Consolidated Statement of Comprehensive Income in the year in which they arise. 
 
I Trade and other receivables. 
 
Trade receivables are recognised and carried at the lower of their original 
invoiced value and recoverable amount. Where the time value of money is 
material, receivables are carried at amortised cost. A provision for impairment 
of trade receivables is established when there is objective evidence that the 
Group will not be able to collect all amounts due according to the original 
terms of the receivables. Significant financial difficulties of the debtor, 
probability that the debtor will enter bankruptcy or financial reorganisation, 
and default or delinquency in payments (more than 30 days overdue) are 
considered indicators that the trade receivable is impaired. 
 
The amount of the provision is the difference between the asset's carrying 
amount and the present value of estimated future cash flows, discounted at the 
original effective interest rate. The carrying amount of the asset is reduced 
through use of an allowance account, and the amount of the expected credit loss 
is recognised in the Consolidated Statement of Comprehensive Income. 
 
When a trade receivable is uncollectible, it is written off against the 
allowance account for trade receivables. Subsequent recoveries of amounts 
previously written off are credited in the Consolidated Statement of 
Comprehensive Income. 
 
The Group applies the IFRS 9 simplified approach to measuring expected credit 
losses which uses a lifetime expected loss allowance for all trade receivables 
and contract assets. 
 
A provision for impairment of trade receivables is established where the 
Property Manager has indicated concerns over the recoverability of arrears 
based upon their individual assessment of all outstanding balances which 
incorporates forward looking information. Given this detailed approach, a 
collective assessment methodology applying a provision matrix to determine 
expected credit losses is not used. 
 
The amount of the provision is recognised in the Consolidated Balance Sheet and 
any changes in provision recognised in the Statement of Comprehensive Income. 
 
J Cash and cash equivalents. 
 
Cash and cash equivalents are defined as cash in hand, demand deposits, and 
other short-term highly liquid investments readily convertible within three 
months or less to known amounts of cash and subject to insignificant risk of 
changes in value. 
 
K Borrowings and interest expense. 
 
All loans and borrowings are initially recognised at the fair value of the 
consideration received, less issue costs where applicable. After initial 
recognition, all interest-bearing loans and borrowings are subsequently 
measured at amortised cost. Amortised cost is calculated by taking into account 
any discount or premium on settlement. Borrowing costs are recognised within 
finance costs in the Consolidated Statement of Comprehensive Income as 
incurred. 
 
L Accounting for derivative financial instruments and hedging activities. 
 
Interest rate hedges are initially recognised at fair value on the date a 
derivative contract is entered into and are subsequently remeasured at their 
fair value. The method of recognising the resulting gain or loss depends on 
whether the derivative is designated as a hedging instrument, and if so, the 
nature of the item being hedged. The Group documents at the inception of the 
transaction the relationship between hedging instruments and hedged items, as 
well as its risk management objective and strategy for undertaking various 
hedging transactions. The Group also documents its assessment both at hedge 
inception and on an ongoing basis of whether the derivatives that are used in 
hedging transactions are highly effective in offsetting changes in fair values 
or cash flows of hedged items. 
 
The effective portion of changes in the fair value of derivatives that are 
designated and qualify as cash flow hedges are recognised in other 
comprehensive income in the Consolidated Statement of Comprehensive Income. The 
gains or losses relating to the ineffective portion are recognised in operating 
profit in the Consolidated Statement of Comprehensive Income. 
 
Amounts taken to equity are transferred to profit or loss when the hedged 
transaction affects profit or loss, such as when the hedged financial income or 
financial expenses are recognised. 
 
When a derivative is held as an economic hedge for a period beyond 12 months 
after the end of the reporting period, the derivative is classified as 
non-current consistent with the classification of the underlying item. A 
derivative instrument that is a designated and effective hedging instrument is 
classified consistent with the classification of the underlying hedged item. 
 
M Service charge. 
 
IFRS15 requires the Group to determine whether it is a principal or an agent 
when goods or services are transferred to a customer. An entity is a principal 
if the entity controls the promised good or service before the entity transfers 
the goods or services to a customer. An entity is an agent if the entity's 
performance obligation is to arrange for the provision of goods and services by 
another party. 
 
Any leases entered into between the Group and a tenant require the Group to 
provide ancillary services to the tenant such as maintenance works etc, 
therefore these service charge obligations belong to the Group. However, to 
meet this obligation the Group appoints a managing agent, Jones Lang Lasalle 
Inc "JLL" and directs it to fulfil the obligation on its behalf. The contract 
between the Group and the managing agent creates both a right to services and 
the ability to direct those services. 
 
This is a clear indication that the Group operates as a principal and the 
managing agent operates as an agent. Therefore it is necessary to recognise the 
gross service charge revenue and expenditure billed to tenants as 
 
opposed to recognising the net amount. 
 
N Other financial liabilities. 
 
Trade and other payables are recognised and carried at invoiced value as they 
are considered to have payment terms of 30 days or less and are not interest 
bearing. The balance of trade and other payables are considered to meet the 
definition of an accrual and have been expensed through the Income Statement or 
Balance Sheet depending on classification. VAT payable at the Balance Sheet 
date will be settled within 31 days of the Balance Sheet date with His 
Majesty's Revenue and Customs ("HMRC") and deferred rental income is rent that 
has been billed to tenants but relates to the period after the Balance Sheet 
date. Rent deposits recognised in note 12 as current are those that are due 
within one year as a result of upcoming tenant expiries. 
 
3. Financial Risk Management. 
 
The Group's principal financial liabilities are loans and borrowings. The main 
purpose of the Group's loans and borrowings is to finance the acquisition and 
development of the Group's property portfolio. The Group has rent and other 
receivables, trade and other payables and cash and short-term deposits that 
arise directly from its operations. 
 
The Group is exposed to market risk (including interest rate risk and real 
estate risk), credit risk, liquidity risk and capital risk. The Group is not 
exposed to currency risk or price risk. The Group is engaged in a single 
segment of business, being property investment in one geographical area, the 
United Kingdom. Therefore the Group only engages in one form of currency being 
pound sterling. 
 
The Board of Directors reviews and agrees policies for managing each of these 
risks which are summarised below. 
 
Market risk. 
 
Market risk is the risk that the fair values of financial instruments will 
fluctuate because of changes in market prices. The financial instruments held 
by the Group that are affected by market risk are principally the interest rate 
swap and the new interest rate cap due to commence 27 April 2023. 
 
i) Interest Rate risk. 
 
As described on below the Group invests cash balances with RBS, Citibank and 
Barclays. These balances expose the Group to cash flow interest rate risk as 
the Group's income and operating cash flows will be affected by movements in 

the market rate of interest. There is considered to be no fair value interest 
rate risk in regard to these balances. 
 
The bank borrowings as described in note 13 also expose the Group to cash flow 
interest rate risk. The Group's policy has historically been to manage its cash 
flow interest rate risk using interest rate swaps, in which the Group agreed to 
exchange the difference between fixed and floating interest amounts based on a 
notional principal amount (see note 14). The Group has floating rate borrowings 
of £110,000,000. The full £110,000,000 of these borrowings has been fixed via 
an interest rate swap. 
 
The fair value of the interest rate swap is exposed to changes in the market 
interest rate as their fair value is calculated as the present value of the 
estimated future cash flows under the agreements. The accounting policy for 
recognising the fair value movements in the interest rate swaps is described in 
note 2.3 L. 
 
The Group has completed an extension of its debt facilities that were due to 
expire in April 2023 with new floating rate borrowings of £85,000,000 
commencing on the same day as the existing facility ends. As discussed further 
in note 14, the Group initially sought to manage its cash flow interest rate 
risk using an interest rate swap. Due to subsequent changes in the interest 
rate environment, the Group took the decision to break the swap and replace 
this with an interest rate cap limiting the floating rate exposure (SONIA) to 
3.959%. 
 
Trade and other receivables and trade and other payables are interest free and 
have settlement dates within one year and therefore are not considered to 
present a fair value interest rate risk. 
 
At 31 December 2022, if market rate interest rates had been 100 basis points 
higher, which is deemed appropriate given historical movements in interest 
rates, with all other variables held constant, the profit for the year would 
have been £158,711 higher (2021: £138,180 higher) as a result of the higher 
interest income on cash and cash equivalents. Other Comprehensive Income and 
the Capital Reserve would have been £1,753,510 higher (2021: £1,657,653 higher) 
as a result of an increase in the fair value of the derivative designated as a 
cash flow hedge of floating rate borrowings. 
 
At 31 December 2022, if market rate interest rates had been 100 basis points 
lower with all other variables held constant, the profit for the year would 
have been £158,711 lower (2021: £138,180 lower) as a result of the lower 
interest income on cash and cash equivalents. Other Comprehensive Income and 
the Capital Reserve would have been £1,404,933 lower (2021: £1,657,731 lower) 
as a result of a decrease in the fair value of the derivative designated as a 
cash flow hedge of floating rate borrowings. 
 
The tables below set out the carrying amount of the Group's financial 
instruments excluding the amortisation of borrowing costs as outlined in note 
13 Bank borrowings have been fixed up to 27 April 2023 due to an interest rate 
swap and as detailed further in note 14: 
 
At 31 December 2022                  Fixed Rate       Variable Rate   Interest Rate 
                                              £                   £               £ 
 
Cash and cash equivalents                     -          15,871,053          0.000% 
 
Bank borrowings                     110,000,000                   -          2.725% 
 
 
 
At 31 December 2021                  Fixed Rate       Variable Rate   Interest Rate 
                                              £                   £               £ 
 
Cash and cash equivalents                     -          13,818,008          0.000% 
 
Bank borrowings                     110,000,000                   -          2.725% 
 
ii) Real estate risk. 
 
The Group has identified the following risk associated with the real estate 
portfolio. The risks following, in particular b and c and also credit risk have 
remained high given the ongoing cost of living crisis and the resultant effect 
on tenants' ability to pay rent: 
 
a) The cost of any development schemes may increase if there are delays in the 
planning process given the 
 
inflationary environment. The Group uses advisers who are experts in the 
specific planning requirements in the scheme's location in order to reduce the 
risks that may arise in the planning process. 
 
b) Tenants may become insolvent causing a significant loss of rental income and 
a reduction in the value of the associated property (see also credit risk 
below). To reduce this risk, the Group reviews the financial status of all 
prospective tenants and decides on the appropriate level of security required 
via rental deposits or guarantees. 
 
c) The exposure of the fair values of the portfolio to market and occupier 
fundamentals. The Group aims to 
 
manage such risks by taking an active approach to asset management (working 
with tenants to extend leases and minimise voids), capturing profit (selling 
when the property has delivered a return to the Group that the Group believes 
has been maximised and the proceeds can be reinvested into more attractive 
opportunities) and identifying new investments (generally at yields that are 
accretive to the revenue account and where the Group believes there will be 
greater investment demand in the medium term). 
 
Credit risk. 
 
Credit risk is the risk that a counterparty will be unable to meet a commitment 
that it has entered into with the Group. In the event of default by an 
occupational tenant, the Group will suffer a rental income shortfall and incur 
additional related costs. The Investment Manager regularly reviews reports 
produced by Dun and Bradstreet and other sources, including the MSCI IRIS 
report, to be able to assess the credit worthiness of the Group's tenants and 
aims to ensure that there are no excessive concentrations of credit risk and 
that the impact of default by a tenant is minimised. In addition to this, the 
terms of the Group's bank borrowings require that the largest tenant accounts 
for less than 20% of the Group's total rental income, that the five largest 
tenants account for less than 50% of the Group's total rental income and that 
the ten largest tenants account for less than 75% of the Group's total rental 
income. The maximum credit risk from the tenant arrears of the Group at the 
financial year end was £4,713,145 (2021: £5,418,733) as detailed in note 10. 
The Investment Manager also has a detailed process to identify the expected 
credit loss from tenants who are behind with rental payments. 
 
This involves a review of every tenant who owes money with the Investment 
Manager using their own knowledge and communications with the tenant to assess 
whether a provision should be made. This resulted in the provision for bad 
debts decreasing to £2,137,972 at the year end (2021: £2,990,034). 
 
With respect to credit risk arising from other financial assets of the Group, 
which comprise cash and cash equivalents, the Group's exposure to credit risk 
arises from default of the counterparty bank with a maximum exposure equal to 
the carrying value of these instruments. As at 31 December 2022 £6,481,061 
(2021: £1,392,240) was placed on deposit with The Royal Bank of Scotland plc 
("RBS"), £786,166 (2021: £1,145,830) was held with Citibank and £8,603,826 
(2021: £11,279,938) was held with Barclays. 
 
The credit risk associated with the cash deposits placed with RBS is mitigated 
by virtue of the Group having a right to off-set the balance deposited against 
the amount borrowed from RBS should RBS be unable to return the deposits for 
any reason. Citibank is rated A-2 Stable by Standard & Poor's and P-2 Stable by 
Moody's. RBS is rated A-1 Stable by Standard & Poor's and P-1 Stable by 
Moody's. Barclays Bank UK is rated A-1 Positive by Standard & Poor's and P-1 
Stable by Moody's. 
 
Liquidity risk. 
 
Liquidity risk is the risk that the Group will encounter difficulties in 
realising assets or otherwise raising funds to meet financial commitments. The 
investment properties in which the Group invests are not traded in an organised 
public market and may be illiquid. 
 
As a result, the Group may not be able to liquidate its investments in these 
properties quickly at an amount close to their fair value in order to meet its 
liquidity requirements. 
 
The following table summarises the maturity profile of the Group's financial 
liabilities based on contractual undiscounted payments. 
 
Year ended 31           On demand    12 months 1 to 5 years    > 5 years        Total 
December 2022                   £            £            £            £            £ 
 
Interest-bearing                -   29,462,608   94,425,183            -  123,887,791 
loans 
 
Trade and other         5,284,559       26,068      104,271    2,580,717    7,995,615 
payables 
 
Rent deposits due to            -      257,899      508,736      243,046    1,009,681 
tenants 
 
                        5,284,559   29,746,575   95,038,190    2,823,763  132,893,087 
 
 
 
Year ended 31           On demand    12 months 1 to 5 years    > 5 years        Total 
December 2021                   £            £            £            £            £ 
 
Interest-bearing                -    1,744,875  110,436,219            -  112,181,094 
loans 
 
Interest rate swaps             -    1,252,625      313,156            -    1,565,781 
(payable) 
 
Trade and other         8,187,362       26,068      104,271    2,606,785   10,924,486 
payables 
 
Rent deposits due to            -       65,720      550,084      354,105      969,909 
tenants 
 
                        8,187,362    3,089,288  111,403,730    2,960,890  125,641,270 
 
The disclosed amounts for interest-bearing loans and interest rate swaps in the 
below table are the estimated net undiscounted cash flows. As disclosed further 
in note 14, on 12 October 2022 the Group announced that it had completed an 

extension of its debt facilities and the disclosure below reflects the 
repayment of the existing facility on 27 April 2023, offset against the new 
facility being granted. 
 
The Group's liquidity position is regularly monitored by management and is 
reviewed quarterly by the Board 
 
of Directors. 
 
Capital risk. 
 
The Group's objectives when managing capital are to safeguard the Group's 
ability to continue as a going concern in order to provide returns for 
shareholders and benefits for other stakeholders and to maintain an optimal 
capital structure to reduce the cost of capital. 
 
In order to maintain or adjust the capital structure, the Group may adjust the 
amount of dividends paid to shareholders, return capital to shareholders, issue 
new shares, increase or decrease borrowings or sell assets to reduce debt. 
 
The Group monitors capital on the basis of the gearing ratio. This ratio is 
calculated as total borrowings divided by gross assets and has a limit of 65% 
set by the Articles of Association of the Company. Gross assets are calculated 
as non-current and current assets, as shown in the Consolidated Balance Sheet. 
 
The gearing ratios at 31 December 2022 and at 31 December 2021 were as follows: 
 
                                                             2022              2021 
                                                                £                 £ 
 
Total borrowings (excluding unamortised               110,000,000       110,000,000 
arrangement fees) 
 
Gross assets                                           444,93,156       526,562,676 
 
Gearing ratio (must not exceed 65%)                        24.72%            20.89% 
 
The Group also monitors the Loan-to-value ratio which is calculated as gross 
borrowings less cash divided by portfolio valuation. As at 31 December 2022 
this was 22.6% (2021: 19.2%). 
 
Fair values. 
 
Set out below is a comparison by class of the carrying amounts and fair value 
of the Group's financial instruments that are carried in the financial 
statements at amortised cost. 
 
                                   Carrying Amount               Fair Value 
 
Financial Assets                      2022          2021          2022          2021 
                                         £             £             £             £ 
 
Cash and cash equivalents       15,871,053    13,818,008    15,871,053    13,818,008 
 
Trade and other receivables      7,457,083    11,024,100     7,457,083    11,024,100 
 
Financial Liabilities 
 
Bank borrowings                109,123,937   109,723,399   109,580,566   110,119,830 
 
Trade and other payables         6,564,852     8,359,405     6,564,852     8,359,405 
 
The fair value of trade receivables and payables are materially equivalent to 
their amortised cost. 
 
The fair value of the financial assets and liabilities are included at an 
estimate of the price that would be received to sell a financial asset or paid 
to transfer a financial liability in an orderly transaction between market 
participants at the measurement date. The following methods and assumptions 
were used to estimate the fair value: 
 
·    Cash and cash equivalents, trade and other receivables and trade and other 
payables are the same as fair value due to the short-term maturities of these 
instruments. 
 
·    The fair value of bank borrowings is estimated by discounting future cash 
flows using rates currently available for debt on similar terms and remaining 
maturities. The fair value approximates their carrying values gross of 
unamortised transaction costs. This is considered as being valued at level 2 of 
the fair value hierarchy and has not changed level since 31 December 2021. 
 
·    The fair value of the interest rate swap contract is estimated by 
discounting expected future cash flows using current market interest rates and 
yield curve over the remaining term of the instrument. This is considered as 
being valued at level 2 of the fair value hierarchy and has not changed level 
since 31 December 2021. The definition of the valuation techniques are 
explained in the significant accounting judgements, estimates and assumptions 
on above. 
 
The table below shows an analysis of the fair values of financial assets and 
liabilities recognised in the Balance Sheet by the level of the fair value 
hierarchy: 
 
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. 
 
Year ended 31 December 2022         Level 1      Level 2      Level 3   Total fair 
                                                                             value 
 
Financial assets 
 
Trade and other receivables               -    7,457,083            -    7,457,083 
 
Cash and cash equivalents        15,871,053            -            -   15,871,053 
 
Interest rate swap                        -    1,238,197            -    1,238,197 
 
Interest rate cap                         -    2,550,469            -    2,550,469 
 
Rental deposits held on behalf      751,782            -            -      751,782 
of tenants 
 
Right of use asset                        -      899,572            -      899,572 
 
                                 16,622,835   12,145,321            -   28,768,156 
 
Financial liabilities 
 
Trade and other payables                  -    6,564,852            -    6,564,852 
 
Bank borrowings                           -  109,580,566            -  109,580,566 
 
Obligations under finance                 -      899,572            -      899,572 
leases 
 
Rental deposits due to tenants      751,782            -            -      751,782 
 
                                    751,782  117,044,990            -  117,796,772 
 
Year ended 31 December 2021         Level 1      Level 2      Level 3   Total fair 
                                                                             value 
 
Financial assets 
 
Trade and other receivables               -   11,024,100            -   11,024,100 
 
Cash and cash equivalents        13,818,008            -            -   13,818,008 
 
Rental deposits held on behalf      904,189            -            -      904,189 
of tenants 
 
Right of use asset                        -      901,129            -      901,129 
 
                                 14,722,197   11,925,229            -   26,647,426 
 
Financial liabilities 
 
Trade and other payables                  -    6,554,087            -    6,554,087 
 
Bank borrowings                           -      568,036            -      568,036 
 
Bank borrowings                           -  110,119,830            -  110,119,830 
 
Obligations under finance                 -      901,129            -      901,129 
leases 
 
Rental deposits due to tenants      904,189            -            -      904,189 
 
                                    904,189  118,143,082            -  119,047,271 
 
Please see note 7 for details on the valuation of Investment properties. 
 
4. Administrative and Other Expenses 
 
                                           Notes              2022             2021 
                                                                 £                £ 
 
Investment management fees                               3,480,963        3,301,074 
 
Other direct property expenses 
 
Vacant Costs (excluding void service                       600,561          987,406 
charge)* 
 
Repairs and maintenance                                  1,740,937          763,579 
 
Letting fees                                               431,534          408,984 
 
Amounts written off in the period            10             79,115          150,313 
 
Other costs                                                237,813          253,874 
 
Total Other direct property expenses                     3,089,960        2,564,156 
 
Impairment (gain)/loss on trade                          (852,062)          406,475 
receivables 
 
Other administration expenses 
 
Directors' fees and subsistence              22            247,603          221,742 
 
Valuers fees                                                94,256           77,457 
 
Auditor's fees                                             131,280          111,540 
 
Marketing                                                  226,782          197,714 
 
Other administration costs                                 434,998          553,556 
 
Total Other administration expenses                      1,134,919        1,162,009 
 
Total Administrative and other expenses                  6,853,780        7,433,714 
 
Void Service charge costs for the year amounted to £1,164,991 (2021: £841,576). 
These have been reclassified as Service charge expenditure in the current year. 
 
                                                             2022             2021 
                                                                £                £ 
 
Total service charge billed to tenants                  4,492,780        3,984,327 
 
Service charge due (to)/from tenants                     (80,959)          113,017 
 
Service charge income                                   4,411,821        4,097,344 
 
Total service charge expenditure incurred               4,411,821        4,097,344 
 
Service charge billed to the Group in respect of        1,164,991          841,576 
void units 
 
Service charge expenditure                              5,576,812        4,938,920 
 
Investment management fees. 
 
On 19 December 2003 Standard Life Investments (Corporate Funds) Limited ("the 
Investment Manager") was appointed as Investment Manager to manage the property 
assets of the Group. A new Investment Management Agreement ("IMA") was entered 
into on 7 July 2014, appointing the Investment Manager as the AIFM 

("Alternative Investment Fund Manager"). On 10 December 2018, the Investment 
Manager's contract was novated on the same commercial terms to Aberdeen 
Standard Fund Managers Limited (subsequently renamed abrdn Fund Managers 
Limited in August 2022). 
 
From 1 July 2019, under the terms of the IMA the Investment Manager is entitled 
to investment management fees 0.70% of total assets up to £500 million; and 
0.60% of total assets in excess of £500 million. The total fees charged for the 
year amounted to £3,480,963 (2021: £3,301,074). 
 
The amount due and payable at the year end amounted to £742,952 excluding VAT 
(2021: £893,048 excluding VAT). In addition the Company paid the Investment 
Manager a sum of £184,750 excluding VAT (2021: £160,250 excluding VAT) to 
participate in the Managers marketing programme and Investment Trust share 
plan. 
 
The Group has agreed a 10bps reduction in the fee payable to the Investment 
Manager, effective from 1 January 2023. The fee will reduce to 0.60% of total 
assets up to £500m, and 0.50% of total assets in excess of £500 million. 
 
Administration, secretarial and registrar fees. 
 
On 19 December 2003 Northern Trust International Fund Administration Services 
(Guernsey) Limited ("Northern Trust") was appointed administrator, secretary 
and registrar to the Group. Northern Trust is entitled to an annual fee, 
payable quarterly in arrears, of £65,000. Northern Trust is also entitled to 
reimbursement of reasonable out of pocket expenses. Total fees and expenses 
charged for the year amounted to £65,000 (2021: £65,000). The amount due and 
payable at the year end amounted to £32,500 (2021: £16,250). 
 
Valuer's fee. 
 
Knight Frank LLP ("the Valuers"), external international real estate 
consultants, was appointed as valuers in respect of the assets comprising the 
property portfolio. The total valuation fees charged for the year amounted to £ 
94,256 (2021: £77,457). The total valuation fee comprises a base fee for the 
ongoing quarterly valuation, and a one off fee on acquisition of an asset. The 
amount due and payable at the year end amounted to £17,687 excluding VAT (2020: 
£21,246 excluding VAT). 
 
The annual fee is equal to 0.017 percent of the aggregate value of property 
portfolio paid quarterly. 
 
Auditor's fee. 
 
At the year end date Deloitte LLP continued as independent auditor of the 
Group. The audit fees for the year amounted to £131,280 (2021: £111,540) and 
relate to audit services provided for the 2022 financial year. Deloitte LLP did 
not provide any non-audit services in the year (2021: nil). 
 
5. Finance Income and Costs 
 
Of the finance costs shown below, £1,010,547 of the interest expense on bank 
borrowings (offset against a net receivable £343,033 of payments on interest 
rate swaps) were accruals at 31 December 2022 and included in Trade and other 
payables. 
 
                                                             2022             2021 
                                                                £                £ 
 
Interest income on cash and cash equivalents               27,543              763 
 
Finance income                                             27,543              763 
 
Interest expense on bank borrowings                     3,251,500        1,613,050 
 
Non-utilisation charges on facilities                     308,582          329,186 
 
(Receipts)/payments on interest rate swaps              (116,700)        1,383,547 
 
Amortisation of arrangement costs (see note 13)           204,835          180,576 
 
Finance lease interest                                     24,468           24,511 
 
Finance costs                                           3,672,685        3,530,870 
 
6. Taxation 
 
UK REIT Status 
 
The Group migrated tax residence to the UK and elected to be treated as a UK 
REIT with effect from 1 January 2015. As a UK REIT, the income profits of the 
Group's UK property rental business are exempt from corporation tax as are any 
gains it makes from the disposal of its properties, provided they are not held 
for trading or sold within three years of completion of development. The Group 
is otherwise subject to UK corporation tax at the prevailing rate. 
 
As the principal company of the REIT, the Company is required to distribute at 
least 90% of the income profits of the Group's UK property rental business. 
There are a number of other conditions that also require to be met by the 
Company and the Group to maintain REIT tax status. These conditions were met in 
the period and the Board intends to conduct the Group's affairs such that these 
conditions continue to be met for the foreseeable future. 
 
Accordingly, deferred tax is not recognised on temporary differences relating 
to the property rental business. 
 
The Company and its Guernsey subsidiary have obtained exempt company status in 
Guernsey so that they are exempt from Guernsey taxation on income arising 
outside Guernsey and bank interest receivable in Guernsey. 
 
A reconciliation between the tax charge and the product of accounting profit 
multiplied by the applicable tax rate for the year ended 31 December 2022 and 
2021 is as follows: 
 
                                                       2022                    2021 
                                                          £                       £ 
 
Profit/(loss) before tax                       (51,053,487)              85,732,820 
 
Tax calculated at UK statutory                  (9,700,163)              16,289,236 
corporation tax rate of 19% (2021: 
19%) 
 
UK REIT exemption on net income                 (2,179,636)             (2,789,236) 
 
Valuation loss in respect of                     11,889,779            (13,500,000) 
investment properties not subject 
to tax 
 
Current income tax charge                                 -                       - 
 
7. Investment Properties 
 
                                                       UK            UK Office            UK Retail             UK Other                Total 
                                               Industrial                 2022                 2022                 2022                 2022 
                                                     2022                    £                    £                    £                    £ 
                                                        £ 
 
Market value at 1 January                     273,565,250          126,275,000           56,525,000           36,050,000          492,415,250 
 
Purchase of investment property                    91,859                    -                    -            5,409,462            5,501,321 
 
Capital expenditure on investment properties    9,375,227            4,117,846               31,740                    -           13,524,813 
 
Opening market value of disposed investment  (20,450,000)         (20,900,000)                    -                    -         (41,350,000) 
properties 
 
Valuation loss from investment properties    (35,924,164)         (20,993,533)          (3,087,334)          (2,252,751)         (62,257,782) 
 
Movement in lease incentives receivable           866,828             (49,313)               80,594             (56,711)              841,398 
 
Market value at 31 December                   227,525,000           88,450,000           53,550,000           39,150,000          408,675,000 
 
Investment property recognised as held for              -                    -                    -                    -                    - 
sale 
 
Market value net of held for sale at 31       227,525,000           88,450,000           53,550,000           39,150,000          408,675,000 
December 
 
Right of use asset recognised on leasehold              -              899,572                    -                    -              899,572 
properties 
 
Adjustment for lease incentives               (4,871,218)          (1,986,578)            (888,782)            (610,458)          (8,357,036) 
 
Carrying value at 31 December                 222,653,782           87,362,994           52,661,218           38,539,542          401,217,536 
 
The valuations were performed by Knight Frank LLP, accredited external valuers 
with recognised and relevant professional qualifications and recent experience 
of the location and category of the investment properties being valued. The 
valuation model in accordance with Royal Institute of Chartered Surveyors 
('RICS') requirements on disclosure for Regulated Purpose Valuations has been 
applied (RICS Valuation - Professional Standards January 2014 published by the 
Royal Institution of Chartered Surveyors). These valuation models are 
consistent with the principles in IFRS 13. 
 
                                                         UK            UK Office            UK Retail             UK Other                Total 
                                                 Industrial                 2021                 2021                 2021                 2021 
                                                       2021                    £                    £                    £                    £ 
                                                          £ 
 
Market value at 1 January                       211,200,000          142,695,000           51,150,000           32,650,000          437,695,000 
 
Purchase of investment property                  11,690,631                    -               50,870                    -           11,741,501 
 
Capital expenditure on investment properties        125,634            1,712,322             (35,227)               16,500            1,819,229 
 
Opening market value of disposed investment     (9,400,000)         (20,425,000)          (2,650,000)                    -         (32,475,000) 
properties 
 

Valuation loss from investment properties        58,043,007            1,580,786            7,762,099            3,282,595           70,668,487 
 
Movement in lease incentives receivable           1,905,978              711,892              247,258              100,905            2,966,033 
 
Market value at 31 December                     273,565,250          126,275,000           56,525,000           36,050,000          492,415,250 
 
Investment property recognised as held for sale           -                    -                    -                    -                    - 
 
Market value net of held for sale at 31         273,565,250          126,275,000           56,525,000           36,050,000          492,415,250 
December 
 
Right of use asset recognised on leasehold                -              901,129                    -                    -              901,129 
properties 
 
Adjustment for lease incentives                 (4,405,288)          (2,921,649)            (808,188)            (667,169)          (8,802,294) 
 
Carrying value at 31 December                   269,159,962          124,254,480           55,716,812           35,382,831          484,514,085 
 
The market value provided by Knight Frank at the year end was £408,675,000 
(2021: £492,415,250) however an adjustment has been made for lease incentives 
of £8,357,036 (2021: £8,802,294) that are already accounted for as an asset. In 
addition, as required under IFRS 16, a right of use asset of £899,572 has been 
recognised in respect of the present value of future ground rents. As required 
under IFRS 16 an amount of £899,572 has also been recognised as an obligation 
under finance leases in the balance sheet. 
 
Valuation methodology. 
 
The fair values of completed investment properties are determined using the 
income capitalisation method. 
 
The income capitalisation method is based on capitalising the net income stream 
at an appropriate yield. In establishing the net income stream the valuers have 
reflected the current rent (the gross rent) payable to lease expiry, at which 
point the valuer has assumed that each unit will be re-let at their opinion of 
ERV. The valuers have made allowances for voids where appropriate, as well as 
deducting non recoverable costs where applicable. 
 
Valuation gains and losses from investment properties are recognised in the 
Consolidated Statement of Comprehensive Income for the period and are 
attributable to changes in unrealised gains or losses relating to investment 
properties held at the end of the reporting period. 
 
In the Consolidated Cash Flow Statement, proceeds from disposal of investment 
properties comprise: 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Opening market value of disposed investment properties     41,350,000    32,475,000 
 
Loss on disposal of investment properties                   (207,153)     (634,368) 
 
Net proceeds from disposal of investment properties        41,142,847    31,840,632 
 
The appropriate yield is selected on the basis of the location of the building, 
its quality, tenant credit quality and lease terms amongst other factors. 
 
No properties have changed valuation technique during the year. At the Balance 
Sheet date the income capitalisation method is appropriate for valuing all 
investment properties. 
 
The Investment Manager meets with the valuers on a quarterly basis to ensure 
the valuers are aware of all relevant information for the valuation and any 
change in the investment over the quarter. The Investment Manager then reviews 
and discusses the draft valuations with the valuers to ensure correct factual 
assumptions are made. 
 
The management group that determines the Company's valuation policies and 
procedures for property valuations is the Property Valuation Committee as 
detailed in the full Annual Accounts. The Committee reviews the quarterly 
property valuation reports produced by the valuers before they are submitted to 
the Board, focusing in particular on: 
 
·    Significant adjustments from the previous property valuation report; 
 
·    Reviewing the individual valuations of each property; 
 
·    Compliance with applicable standards and guidelines including those issued 
by RICS and the UKLA Listing Rules; 
 
·    Reviewing the findings and any recommendations or statements made by the 
valuer; 
 
·    Considering any further matters relating to the valuation of the 
properties. 
 
The Chair of the Committee makes a brief report of the findings and 
recommendations of the Committee to the Board after each Committee meeting. The 
minutes of the Committee meetings are circulated to the Board. 
 
The Chair submits an annual report to the Board summarising the Committee's 
activities during the year and the related significant results and findings. 
 
The table below outlines the valuation techniques and inputs used to derive 
Level 3 fair values for each class of investment properties. The table 
includes: 
 
·    The fair value measurements at the end of the reporting period. 
 
·    The level of the fair value hierarchy (e.g. Level 3) within which the fair 
value measurements are categorised in their entirety. 
 
·    A description of the valuation techniques applied. 
 
·    Fair value measurements, quantitative information about the significant 
unobservable inputs used in the fair value measurement. 
 
·    The inputs used in the fair value measurement, including the ranges of 
rent charged to different units within the same building. 
 
As noted above, all investment properties listed in the table below are 
categorised Level 3 and are all valued using the Income Capitalisation method. 
 
Country & Class 2022          UK Industrial Level 3 UK Office Level 3     UK Retail Level 3     UK Other Level 3      Total 
 
Fair Value 2022 £             227,525,000           88,450,000            53,550,000            39,150,000            408,675,000 
 
Key Unobservable Input 2022   . Initial Yield       . Initial Yield       . Initial Yield       . Initial Yield       . Initial Yield 
 
                              . Reversionary Yield  . Reversionary Yield  . Reversionary Yield  . Reversionary Yield  . Reversionary Yield 
 
                              . Equivalent Yield    . Equivalent Yield    . Equivalent Yield    . Equivalent Yield    . Equivalent Yield 
 
                              . Estimated rental    . Estimated rental    . Estimated rental    . Estimated rental    . Estimated rental 
                              value per sq ft       value per sq ft       value per sq ft       value per sq ft       value per sq ft 
 
Range (weighted average) 2022 0.00% to 8.78%        5.10% to 7.90%        4.39% to 8.33%        5.01% to 9.13% 
                              (5.20%)               (6.11%)               (6.75%)               (5.98%) 
 
                              5.00% to 8.68%        6.25% to 10.45%       5.49% to 7.99%        4.79% to 9.40% 
                              (6.35%)               (8.76%)               (6.16%)               (5.85%) 
 
                              5.00% to 8.23%        6.15% to 9.25%        5.76% to 9.67%        5.01% to 9.07% 
                              (6.26%)               (8.02%)               (6.79%)               (5.87%) 
 
                              £4.50 to £9.00 (£     £17.01 to £45.47 (£   £8.74 to £30.61 (£    £6.00 to £20.00 (£ 
                              6.38)                 26.78)                15.37)                14.71) 
 
 
 
Country & Class 2021          UK Industrial Level 3 UK Office Level 3     UK Retail Level 3     UK Other Level 3      Total 
 
Fair Value 2021 £             273,565,250           126,275,000           56,525,000            36,050,000            492,415,250 
 
Key Unobservable Input 2021   . Initial Yield       . Initial Yield       . Initial Yield       . Initial Yield       . Initial Yield 
 
                              . Reversionary Yield  . Reversionary Yield  . Reversionary Yield  . Reversionary Yield  . Reversionary Yield 
 
                              . Equivalent Yield    . Equivalent Yield    . Equivalent Yield    . Equivalent Yield    . Equivalent Yield 
 
                              . Estimated rental    . Estimated rental    . Estimated rental    . Estimated rental    . Estimated rental 
                              value per sq ft       value per sq ft       value per sq ft       value per sq ft       value per sq ft 
 
Range (weighted average) 2021 0.00% to 7.49%        2.71% to 6.28%        4.56% to 8.43%        4.57% to 8.10% 
                              (4.48%)               (4.77%)               (6.18%)               (5.40%) 
 
                              0.00% to 7.72%        5.25% to 9.23%        5.25% to 7.48%        4.39% to 7.90% 
                              (5.11%)               (7.28%)               (5.83%)               (5.22%) 
 
                              0.00% to 7.00%        5.16% to 8.17%        5.52% to 8.12%        4.62% to 7.90% 
                              (5.07%)               (6.84%)               (6.40%)               (5.35%) 
 
                              £4.00 to £9.50 (£     £17.00 to £46.09 (£   £8.74 to £29.32 (£    £9.24 to £18.68 (£ 
                              6.19)                 26.19)                15.31)                15.09) 
 
Descriptions and definitions. 
 
The table above includes the following descriptions and definitions relating to 
valuation techniques and key observable inputs made in determining the fair 
values. 
 
Estimated rental value (ERV). 
 
The rent at which space could be let in the market conditions prevailing at the 
date of valuation. 
 
Equivalent yield. 
 
The equivalent yield is defined as the internal rate of return of the cash flow 

from the property, assuming a rise or fall to ERV at the next review or lease 
termination, but with no further rental change. 
 
Initial yield. 
 
Initial yield is the annualised rents of a property expressed as a percentage 
of the property value. 
 
Reversionary yield. 
 
Reversionary yield is the anticipated yield to which the initial yield will 
rise (or fall) once the rent reaches the ERV. 
 
The table below shows the overall ERV per annum, area per square foot, average 
ERV per square foot, initial yield and reversionary yield as at the Balance 
Sheet date. 
 
                                                                 2022          2021 
 
ERV p.a.                                                  £31,048,945   £31,542,350 
 
Area sq ft                                                  3,416,291     3,517,993 
 
Average ERV per sq ft                                           £9.09         £8.97 
 
Initial Yield                                                    5.7%          4.8% 
 
Reversionary Yield                                               7.1%          5.8% 
 
The table below presents the sensitivity of the valuation to changes in the 
most significant assumptions underlying the valuation of completed investment 
property. The Board believes these are reasonable sensitivities given historic 
movements in valuations. 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Increase in equivalent yield of 50 bps                   (31,086,535)  (41,659,430) 
 
Decrease of 5% in ERV                                    (15,879,151)  (19,561,811) 
 
Below is a list of how the interrelationships in the sensitivity analysis above 
can be explained. 
 
In both cases outlined in the sensitivity table the estimated fair value would 
increase (decrease) if: 
 
  * The ERV is higher (lower) 
  * Void periods were shorter (longer) 
  * The occupancy rate was higher (lower) 
  * Rent free periods were shorter (longer) 
  * The capitalisation rates were lower (higher) 
 
8. Land 
 
Valuation methodology. 
 
The Land is held at fair value. 
 
The Group appoints suitable valuers (such appointment is reviewed on a periodic 
basis) to undertake a valuation of the land on a quarterly basis. The valuation 
is undertaken in accordance with the then current RICS guidelines by Knight 
Frank LLP whose credentials are set out in note 7. 
 
Reconciliation of carrying amount                                2022          2021 
 
Cost 
 
Balance at the beginning of the year                        8,001,550             - 
 
Additions                                                      60,322     8,001,550 
 
Balance at the end of the year                              8,061,872     8,001,550 
 
Accumulated depreciation and amortisation 
 
Balance at the beginning of the year                        (501,550)             - 
 
Valuation loss from land                                     (60,322)     (501,550) 
 
Balance at the end of the year                              (561,872)     (501,550) 
 
Carrying amount as at 31 December                           7,500,000     7,500,000 
 
9. Investments in Subsidiary Undertakings 
 
The Company owns 100 per cent of the issued ordinary share capital of abrdn 
Property Holdings Limited (formerly known as Standard Life Investments Property 
Holdings Limited), a company with limited liability incorporated and domiciled 
in Guernsey, Channel Islands, whose principal business is property investment. 
 
In 2015 the Group acquired 100% of the units in Standard Life Investments 
SLIPIT Unit Trust, (formerly Aviva Investors UK Real Estate Recovery II Unit 
Trust) a Jersey Property Unit Trust. The acquisition included the entire issued 
share capital of a General Partner which held, through a Limited Partnership, a 
portfolio of 22 UK real estate assets. The transaction completed on 23 December 
2015 and the Group has treated the acquisition as a Business Combination in 
accordance with IFRS 3. 
 
The Group undertakings consist of the following 100% owned subsidiaries at the 
Balance Sheet date: 
 
·    abrdn Property Holdings Limited (formerly known as Standard Life 
Investments Property Holdings Limited), a property investment company with 
limited liability incorporated in Guernsey, Channel Islands. 
 
·    abrdn (APIT) Limited Partnership (formerly known as Standard Life 
Investments (SLIPIT) Limited Partnership), a property investment limited 
partnership established in England. 
 
·    abrdn APIT (General Partner) Limited (formerly known as Standard Life 
Investments SLIPIT (General Partner) Limited), a company with limited liability 
incorporated in England. This Company is the GP for the Limited Partnership. 
 
·    abrdn (APIT Nominee) Limited (formerly known as Standard Life Investments 
SLIPIT (Nominee) Limited), a company with limited liability incorporated and 
domiciled in England. 
 
On 20th May 2022, Hagley Road Limited, a subsidiary of the Group, was 
liquidated. 
 
10. Trade and Other Receivables 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Trade receivables                                           6,851,117     8,408,767 
 
Finance incomeless provision for impairment of trade      (2,137,972)   (2,990,034) 
receivables 
 
Trade receivables (net)                                     4,713,145     5,418,733 
 
Rental deposits held on behalf of tenants                     257,899        65,720 
 
Other receivables                                           2,486,039     5,539,647 
 
Total trade and other receivables                           7,457,083    11,024,100 
 
Reconciliation for changes in the provision for impairment of trade 
receivables: 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Opening balance                                           (2,990,034)   (2,583,559) 
 
Credit/(charge) for the year                                  772,947     (556,788) 
 
Reversal for amounts written-off                               79,115       150,313 
 
Closing balance                                           (2,137,972)   (2,990,034) 
 
The estimated fair values of receivables are the discounted amount of the 
estimated future cash flows expected to be received and approximate their 
carrying amounts. 
 
The trade receivables above relate to rental income receivable from tenants of 
the investment properties. When a new lease is agreed with a tenant the 
Investment Manager performs various money laundering checks and makes a 
financial assessment to determine the tenant's ability to fulfil its 
obligations under the lease agreement for the foreseeable future. The majority 
of tenants are invoiced for rental income quarterly in advance and are issued 
with invoices at least 21 days before the relevant quarter starts. Invoices 
become due on the first day of the quarter and are considered past due if 
payment is not received by this date. Other receivables are considered past due 
when the given terms of credit expire. 
 
Amounts are considered impaired when it becomes unlikely that the full value of 
a receivable will be 
 
recovered. Movement in the balance considered to be impaired has been included 
in other direct property costs in the Consolidated Statement of Comprehensive 
Income. As at 31 December 2022, trade receivables of £2,137,972 (2021: £ 
2,990,034) were considered impaired and provided for. 
 
If the provision for impairment of trade receivables increased by £1 million 
then the Company's earnings 
 
and net asset value would decrease by £1 million. If it decreased by £1 million 
then the Company's earnings and net asset value would increase by £1 million. 
 
The ageing of the receivables provided for is as follows: 
 
                                                             2022             2021 
                                                                £                £ 
 
0 to 3 months                                             (8,203)        (162,132) 
 
3 to 6 months                                           (251,682)        (451,417) 
 
Over 6 months                                         (1,878,087)      (2,376,485) 
 
                                                      (2,137,972)      (2,990,034) 
 
As of 31 December 2022, trade receivables of £3,099,355 (2021: £5,418,733) were 
less than 3 months past due but considered not impaired. 
 
11. Cash and Cash Equivalents 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Cash held at bank                                           9,389,992    12,425,768 
 
Cash held on deposit with RBS                               6,481,061     1,392,240 
 
                                                           15,871,053    13,818,008 
 
Cash held at banks earns interest at floating rates based on daily bank deposit 
rates. Deposits are made for varying periods of between one day and three 
months, depending on the immediate cash requirements of the Group, and earn 
interest at the applicable short-term deposit rates. 
 
12. Trade and Other Payables 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Trade and other payables                                    4,655,599     6,488,367 
 
VAT payable                                                   628,960     1,698,995 
 
Deferred rental income                                      5,337,852     5,365,375 
 
Rental deposits due to tenants                                257,899        65,720 
 

Closing balance                                            10,880,310    13,618,457 
 
Trade payables are non-interest bearing and are normally settled on 30-day 
terms. 
 
13. Bank Borrowings 
 
During the year, the Group drew down £17m on the Revolving Credit Facility. 
This was fully repaid by the end of the year. 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Loan facility and drawn down outstanding balance          110,000,000   110,000,000 
 
Opening carrying value                                    109,723,399   109,542,823 
 
Arrangement costs of additional facility                    (804,297)             - 
 
Amortisation arrangement costs                                204,835       180,576 
 
Closing carrying value                                    109,123,937   109,723,399 
 
The London Interbank Offer Rate (LIBOR) was one of the main interest rate 
benchmarks used in financial 
 
markets to determine interest rates for financial contracts globally. In line 
with announcements from the 
 
Financial Conduct Authority (FCA), 24 of the 35 LIBOR settings ceased from 1 
January 2022. The Group took steps, before the date of transition, to ensure 
that any exposure to LIBOR was identified with actions taken to rebase and 
redocument any financial contracts where LIBOR was previously used. 
 
This led to minor amendments to operational processes to cater for this change 
but there was not expected to be a material impact on the assets and 
liabilities of the Group as a result of the phase out of LIBOR. The switch to 
the Sterling Overnight Index Average (SONIA) benchmark took effect from the 
first interest payment date following cessation of LIBOR (20th January 2022). 
 
On 12 October 22 the Group entered into an agreement to extend its existing £ 
165 million debt facility with Royal Bank of Scotland International ("RBSI"). 
The facility (due to expire on 27 April 2023) consisted of a £110 million term 
loan payable at 1.375% plus SONIA and two Revolving Credit Facilities ("RCF") 
of £35 million payable at 1.45% plus SONIA and £20 million payable at 1.60% 
plus SONIA. The amended and restated agreement was for a three year term loan 
of £85 million and a single RCF of £80 million; both payable at 1.5% plus 
SONIA. The new facility is due to commence on 27 April 2023. As at 31 December 
2022 none of the RCF was drawn (2021: £nil); £17m was drawn down during the 
year however this was fully repaid prior to 31 December 2022. 
 
Analysis of movements              Interest-bearing         2022 Cash & cash Interest-bearing          2021 
in net debt            Cash & cash            loans     net debt equivalents            loans      net debt 
                       equivalents 
 
                                 £                £            £           £                £             £ 
 
Opening balance         13,818,008    (109,723,399) (95,905,391)   9,383,371    (109,542,823) (100,159,452) 
 
Cash movement            2,053,045          804,297    2,857,342   4,434,637                -     4,434,637 
 
Amortisation of                  -        (204,835)    (204,835)           -        (180,576)     (180,576) 
arrangement costs 
 
Closing balance         15,871,053    (109,123,937) (93,252,884)  13,818,008    (109,723,399)  (95,905,391) 
 
Under the terms of the loan facilities there are certain events which would 
entitle RBSI to terminate the loan facility and demand repayment of all sums 
due. Included in these events of default is the financial undertaking relating 
to the LTV percentage. The loan agreement notes that the LTV percentage is 
calculated as the loan amount less the amount of any sterling cash deposited 
within the security of RBSI divided by the gross secured property value, and 
that this percentage should not exceed 60% for the period to and including 27 
April 2021 and should not exceed 55% after 27 April 2021 to maturity. There 
have been no changes to the covenant requirements as a result of the extension 
to the facility noted above. 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Loan amount                                               110,000,000   110,000,000 
 
Cash                                                     (15,871,053)  (13,818,008) 
 
                                                           94,128,947    96,181,992 
 
Portfolio valuation                                       416,175,000   499,915,250 
 
LTV percentage                                                  22.6%         19.2% 
 
Other loan covenants that the Group is obliged to meet include the following: 
 
·    that the net rental income is not less than 150% of the finance costs for 
any three month period; 
 
·    that the largest single asset accounts for less than 15% of the Gross 
Secured Asset Value; 
 
·    that the largest ten assets accounts for less than 75% of the Gross 
Secured Asset Value; 
 
·    that sector weightings are restricted to 55%, 45% and 55% for the Office, 
Retail and Industrial sectors respectively; 
 
·    that the largest tenant accounts for less than 20% of the Group's annual 
net rental income; 
 
·    that the five largest tenants account for less than 50% of the Group's 
annual net rental income; 
 
·    that the ten largest tenants account for less than 75% of the Group's 
annual net rental income. 
 
During the year, the Group complied with its obligations and loan covenants 
under its loan agreement. 
 
The loan facility is secured by fixed and floating charges over the assets of 
the Company and its wholly owned subsidiaries, abrdn Property Holdings Limited 
and abrdn (APIT) Limited Partnership. 
 
During the year, the Group complied with its obligations and loan covenants 
under its loan agreement. 
 
The loan facility is secured by fixed and floating charges over the assets of 
the Company and its wholly 
 
owned subsidiaries, abrdn Property Holdings Limited and abrdn (APIT) Limited 
Partnership. 
 
14. Interest Rate Swap and Cap 
 
In order to mitigate any interest rate risk linked to their debt facilities, 
the Group's policy has been to manage its cash flow using hedging instruments. 
The following hedging instruments were effective during the year: 
 
14a Existing Interest Rate Swap. 
 
The Group has previously taken out an interest rate swap of a notional amount 
of £110,000,000 with RBS as part of a refinancing exercise in April 2016. The 
interest rate swap effective date is 28 April 2016 and has a maturity date of 
27 April 2023. Under the swap the Company agreed to receive a floating interest 
rate linked to SONIA and pay a fixed interest rate of 1.35%. 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Opening fair value of interest rate swap at 1 January       (568,036)   (3,735,254) 
 
Reclassification of interest accrual                        (247,093)             - 
 
Valuation gain on interest rate swaps                       1,470,570     3,167,218 
 
Reclassified to Profit & Loss                                 582,756             - 
 
Closing fair value of interest rate swap at 31 December     1,238,197     (568,036) 
 
 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Current assets/(liabilities)                                1,238,197     (546,526) 
 
Non-current assets/(liabilities)                                    -      (21,510) 
 
Interest rate swap with a start date of 28 April 2016       1,238,197     (568,036) 
maturing on 27 April 2023 
 
14b Terminated Interest Rate Swap. 
 
As disclosed in note 13, on 12 October 2022 the Group announced that it had 
completed an extension of its debt facilities which included an interest rate 
swap of a notional amount of £85,000,000 (due to commence 27 April 2023). At 
the time, there was heightened volatility and swap rates were high, exacerbated 
by political uncertainty, and the all-in cost of the term loan amounted to 
6.97%. In light of the change in interest rate environment since completion, 
the Group took the decision to break the swap at a cost of £3,562,248 on 12 
December 2022. 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Opening fair value of interest rate swap at 1 January               -             - 
 
Valuation loss on interest rate swaps                     (3,562,248)             - 
 
Swaps breakage costs                                        3,562,248             - 
 
Closing fair value of interest rate swap at 31 December             -             - 
 
14c Interest Rate Cap. 
 
Simultaneously to the breaking of the £85,000,000 swap, the Group agreed an 
interest rate cap against a notional amount of £85,000,000 (due to commence 27 
April 2023) with a cap level (SONIA) set at 3.959%. The cost of purchasing this 
cap was £2,507,177. 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Opening fair value of interest rate cap at 1 January                -             - 
 
Cost of interest rate cap                                   2,507,177             - 
 
Valuation gain on interest rate cap                            43,292             - 
 
Closing fair value of interest rate cap at 31 December      2,550,469             - 
 
 
 
                                                                 2022          2021 

                                                                    £             £ 
 
Current assets/(liabilities)                                  339,462             - 
 
Non-current assets/(liabilities)                            2,211,007             - 
 
                                                            2,550,469             - 
 
15. Obligations Under Finance Leases 
 
The table below shows the present value of future lease payments in relation to 
the ground lease payable at Hagley Road, Birmingham as required under IFRS 16. 
A corresponding asset has been recognised and is part of Investment properties 
as shown in note 7. 
 
                                Minimum lease      Interest Present value of 
                                     payments                  minimum lease 
                                                                    payments 
 
                                         2022          2022             2022 
 
                                            £             £                £ 
 
Less than one year                     26,068      (24,468)            1,600 
 
Between two and five years            104,271      (97,426)            6,845 
 
More than five years                2,580,717   (1,689,590)          891,127 
 
Total                               2,711,056   (1,811,484)          899,572 
 
 
 
                                Minimum lease      Interest Present value of 
                                     payments                  minimum lease 
                                                                    payments 
 
                                         2021          2021             2021 
 
                                            £             £                £ 
 
Less than one year                     26,068      (24,511)            1,557 
 
Between two and five years            104,271      (97,607)            6,664 
 
More than five years                2,606,785   (1,713,877)          892,908 
 
Total                               2,737,124   (1,835,995)          901,129 
 
16. Lease Analysis 
 
The Group has granted leases on its property portfolio. This property portfolio 
as at 31 December 2022 had an average lease expiry of 5 years and 8 months. 
 
Leases include clauses to enable periodic upward revision of the rental charge 
according to prevailing market conditions. Some leases contain options to break 
before the end of the lease term. 
 
Future minimum rentals receivable under non-cancellable operating leases as at 
31 December are as follows: 
 
                                                               2022           2021 
                                                                  £              £ 
 
Within one year                                          24,457,032     24,857,300 
 
Between one and two years                                21,677,762     22,613,540 
 
Between two and three years                              16,236,484     19,869,754 
 
Between three and four years                             12,375,936     14,371,388 
 
Between four and five years                               8,695,218     10,352,802 
 
More than five years                                     45,075,463     44,233,215 
 
Total                                                   128,517,895    136,297,999 
 
The largest single tenant at the year end accounts for 6.0% (2021: 6.1%) of the 
current annual passing rent. 
 
17. Share Capital 
 
Under the Company's Articles of Incorporation, the Company may issue an 
unlimited number of ordinary shares of 1 pence each, subject to issuance limits 
set at the AGM each year. As at 31 December 2022 there were 381,218,977 
ordinary shares of 1p each in issue (2021: 396,922,386). All ordinary shares 
rank equally for dividends and distributions and carry one vote each. There are 
no restrictions concerning the transfer of ordinary shares in the Company, no 
special rights with regard to control attached to the ordinary shares, no 
agreements between holders of ordinary shares regarding their transfer known to 
the Company and no agreement which the Company is party to that affects its 
control following a takeover bid. 
 
Allotted, called up and fully paid: 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Opening balance                                           228,383,857   228,383,857 
 
Shares issued                                                       -             - 
 
Issue costs associated with new ordinary shares                     -             - 
 
Closing balance                                           228,383,857   228,383,857 
 
Treasury Shares. 
 
In 2022, the Company undertook a share buyback programme at various levels of 
discount to the prevailing NAV. In the period to 31 December 2022 15,703,409 
shares had been bought back (2021: 7,394,036) at a cost of £12,409,459 after 
costs (2021: £4,540,630) and are included in the Treasury share reserve. 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Opening balance                                             5,991,417     1,450,787 
 
Bought back during the year                                12,409,459     4,540,630 
 
Closing balance                                            18,400,876     5,991,417 
 
The number of shares in issue as at 31 December 2022/2021 are as follows: 
 
                                                                 2022          2021 
                                                            Number of     Number of 
                                                               shares        shares 
 
Opening balance                                           396,922,386   404,316,422 
 
Issued during the year                                              -             - 
 
Bought back during the year and put into Treasury        (15,703,409)   (7,394,036) 
 
Closing balance                                           381,218,977   396,922,386 
 
18. Reserves 
 
The detailed movement of the below reserves for the years to 31 December 2022 
and 31 December 2021 can be found in the Consolidated Statement of Changes in 
Equity above. 
 
Retained earnings. 
 
This is a distributable reserve and represents the cumulative revenue earnings 
of the Group less dividends paid to the Company's shareholders. 
 
During 2021, it was identified that there were historic leases dating back to 
2016 where required rent smoothing adjustments had not been applied. The total 
of these adjustments up to the end of the year ending 31 December 2020 amounted 
to £1,520,063. Having considered the key financial measures of the Group, and 
the accumulated profile of this balance, the Directors were satisfied that the 
appropriate correction was a transfer of the identified adjustment from Capital 
Reserves to Retained Earnings in the year ended 31 December 2021. 
 
This adjustment had no effect on the previously reported NAVs of the Group. 
 
Capital reserves. 
 
This reserve represents realised gains and losses on disposed investment 
properties and unrealised valuation gains and losses on investment properties 
and cash flow hedges since the Company's launch. 
 
Other distributable reserves. 
 
This reserve represents the share premium raised on launch of the Company which 
was subsequently converted to a distributable reserve by special resolution 
dated 4 December 2003. 
 
19. Earnings per Share 
 
Basic earnings per share amounts are calculated by dividing profit for the year 
net of tax attributable to ordinary equity holders by the weighted average 
number of ordinary shares outstanding during the year. As there are no dilutive 
instruments outstanding, basic and diluted earnings per share are identical. 
 
The earnings per share for the year is set out in the table below. In addition 
one of the key metrics the Board considers is dividend cover. 
 
This is calculated by dividing the net revenue earnings in the year (surplus 
for the year net of tax excluding all capital items and the swaps breakage 
costs) divided by the dividends payable in relation to the financial year. For 
2022 this equated to a figure of 97% (2021: 98%). 
 
The following reflects the income and share data used in the basic and diluted 
earnings per share computations: 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Surplus for the year net of tax                          (51,053,487)    85,732,820 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Weighted average number of ordinary shares outstanding    389,565,276   398,041,380 
during the year 
 
Loss/earnings per ordinary share (pence)                      (13.11)         21.54 
 
Profit for the year excluding capital items                11,471,770    14,680,188 
 
EPRA earnings per share (p)                                      2.94          3.69 
 
20. Dividends and Property Income Distributions Gross of Income Tax 
 
                                                                                    12 months to Dec 22                                             12 months to Dec 21 
 
Dividends                                           PID         Non-PID           Total              PID         Non-PID             PID         Non-PID           Total             PID         Non-PID 
                                                  pence           pence           Pence                £               £           pence           pence           Pence               £               £ 
 

Quarter to 31 December of prior year             0.7910          0.2090          1.0000        3,139,656         829,568          0.7140               -          0.7140       2,878,508               - 
(paid in February) 
 
Top-up for prior year (paid in May)                   -               -               -                -               -          0.3810               -          0.3810       1,512,274               - 
 
Quarter to 31 March (paid in May)                1.0000               -          1.0000        3,969,224               -          0.8925               -          0.8925       3,542,532               - 
 
Quarter to 30 June (paid in August)              1.0000               -          1.0000        3,860,190               -          0.8925               -          0.8925       3,542,532               - 
 
Quarter to 30 September (paid in                 0.1806          0.8194          1.0000          688,481       3,123,708          0.2519          0.6406          0.8925         999,848       2,542,685 
November) 
 
Total dividends paid                             2.9716          1.0284          4.0000       11,657,551       3,953,276          3.1319          0.6406          3.7725      12,475,694       2,542,685 
 
Quarter to 31 December of current year                -          1.0000          1.0000                -       3,812,190          0.7910          0.2090          1.0000       3,139,656         829,568 
(paid after year end) 
 
Prior year dividends (per above)               (0.7910)        (0.2090)        (1.0000)      (3,139,656)       (829,568)        (0.7140)               -        (0.7140)     (2,878,508)               - 
 
Total dividends paid for the year                2.1806          1.8194          4.0000        8,517,895       6,935,898          3.2089          0.8496          4.0585      12,736,842       3,372,253 
 
 
On 24 February 2023 a dividend in respect of the quarter to 31 December 2022 of 
1.0 pence per share was paid purely as Non Property Income Distribution. 
 
21. Reconciliation of Consolidated NAV to Published NAV 
 
The NAV attributable to ordinary shares is published quarterly and is based on 
the most recent valuation of the investment properties. 
 
                                                                 2022          2021 
 
Number of ordinary shares at the reporting date           381,218,977   396,922,386 
 
                                                                 2022          2021 
                                                                    £             £ 
 
Total equity per audited consolidated financial           323,287,555   400,847,466 
statements 
 
NAV per share (p)                                                84.8         101.0 
 
22. Related Party Disclosure 
 
Directors' remuneration 
 
The Directors of the Company are deemed as key management personnel and 
received fees for their services. Further details are provided in the 
Directors' Remuneration Report (unaudited) in the full Annual Accounts. Total 
fees for the year were £247,603 (2021: £221,742) none of which remained payable 
at the year end (2021: nil). 
 
abrdn Fund Managers Limited (formerly known as Aberdeen Standard Fund Managers 
Limited), as the Manager of the Group from 10 December 2018, received fees for 
their services as investment managers. Further details are provided in note 4. 
 
                                                  2022          2021 
 
Huw Evans                                       17,124        36,000 
 
Mike Balfour                                    41,500        40,000 
 
Mike Bane                                       34,059             - 
 
James Clifton-Brown                             50,000        47,000 
 
Jill May                                        37,000        36,000 
 
Sarah Slater                                    37,000        36,000 
 
Employers national insurance                    22,885        17,338 
contribution 
 
                                               239,568       212,338 
 
Directors expenses                               8,035         9,404 
 
                                               247,603       221,742 
 
23. Segmental Information 
 
The Board has considered the requirements of IFRS 8 'operating segments'. The 
Board is of the view that the Group is engaged in a single segment of business, 
being property investment and in one geographical area, the United Kingdom. 
 
24. Capital Commitments 
 
The Group had contracted capital commitments at 31 December 2022 of £17.3m (31 
December 2021: £11.9m). This comprises the remaining capital expenditure 
required to complete the pre-let development funding in St Helens (achieved 
Practical Completion in April 2023), and the committed expenditure for the 
speculative industrial development in Knowsley. The Knowsley development will 
commence in April 2023 and is anticipated to complete in December 2023. 
 
25. Events After the Balance Sheet Date 
 
On 23 February 2023, the Company completed the purchase of a piece of land at 
Knowlsey for £4m with 
 
the aim of developing an industrial site throughout 2023. 
 
On 24 March 2023, the Company completed the purchase of a Morrison's foodstore 
in Welwyn Garden City by way of a sale and leaseback for £18.3m. 
 
On 24 February 2023 a dividend in respect of the quarter to 31 December 2022 of 
1.0 pence per share was paid purely as Non Property Income Distribution. 
 
This Annual Financial Report announcement is not the Company's statutory 
accounts for the year ended 31 December 2022. The statutory accounts for the 
year ended 31 December 2022 received an audit report which was unqualified. 
 
Please note that past performance is not necessarily a guide to the future and 
that the value of investments and the income from them may fall as well as 
rise. Investors may not get back the amount they originally invested. 
 
All enquiries to: 
 
The Company Secretary 
Northern Trust International Fund Administration Services (Guernsey) Limited 
Trafalgar Court 
Les Banques 
St Peter Port 
Guernsey 
GY1 3QL 
 
Tel: [phone] 
Fax: [phone] 
 
Jason Baggaley - Real Estate Fund Manager, abrdn 
 
Tel:  [phone] or [e-mail] 
 
Mark Blyth - Real Estate Deputy Fund Manager, abrdn 
 
Tel: [phone] or [e-mail] 
 
Craig Gregor - Fund Controller, abrdn 
 
Tel: [phone] or [e-mail] 
 
 
 
END 
 
 

(END) Dow Jones Newswires

April 24, 2023 02:30 ET (06:30 GMT)