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WKN: A0EAWV | ISIN: GB0033875286 | Ticker-Symbol:
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abrdn Property Income Trust Limited - Annual Results - December 2024

Finanznachrichten News

abrdn Property Income Trust Limited - Annual Results - December 2024

PR Newswire

LONDON, United Kingdom, May 01

Guernsey: 30 April 2025

LEI: 549300HHFBWZRKC7RW84

abrdn Property Income Trust Limited

(an authorised closed-ended investment company incorporated in Guernsey with registration number 41352)

("API" or the "Company")

FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024

The Company's Annual Report and Accounts for the year ended 31 December 2024 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

2024

31 December

2023

IFRS Loss per share (p)

(11.25)

(2.17)

Dividends paid per ordinary share (p)

3.0

4.0

Dividends declared per ordinary share but not yet paid (p) *

3.0

0.0

Dividend Cover (%) **

45

71

Dividend Cover excluding non-recurring items (%)

66

82

Ongoing Charges **

As a % of average net assets including direct property costs

2.8

2.5

As a % of average net assets excluding direct property costs

1.2

1.2

Capital Values & Gearing

31 December

2024

31 December

2023

Change

%

Net assets (£million)

30.4

298.1

(89.8)

Net asset value per share (p) (note 22)

8.0

78.2

(89.8)

Capital Distribution (p)

52.0

0.0

N/A

Third Quarter PID

1.0

-

N/A

PID paid post year-end

3.0

-

N/A

Net asset value incl. noted Distributions (p)

64.0

78.2

(18.2)

Ordinary Share Price (p)

6.9

53.0

(87.0)

(Discount)/Premium to NAV (%)

(13.8)

(32.2)

Total Return

1 year

% return

3 year

% return

5 year

% return

10 year

% return

NAV ^

(19.2)

(31.7)

(16.2)

31.9

Share Price ^

25.6

(6.7)

(6.1)

42.9

FTSE All-Share Real Estate Investment Trusts Index

(11.8)

(32.6)

(26.9)

(3.4)

FTSE All-Share Index

9.5

18.5

26.5

81.9

* Represents the special interim property income distribution to shareholders (Ex-Dividend Date: 19 December 2024, Record Time: 20 December 2024) as a result of exiting the REIT regime. This was in addition to the return of capital via the redeemable bonus shares

** As defined and calculated under API's Alternative Performance Measures (as detailed in the full Annual Accounts which can be found via the following link: https://www.abrdnpit.co.uk/en-gb/literature)

^ Assumes re-investment of dividends excluding transaction costs.

Sources: abrdn, MSCI

CHAIR'S STATEMENT

Background

As previously reported in both the Company's 2023 Annual Report & Financial Statements and 2024 Interim Report & Accounts, the Board undertook a strategic review in the second half of 2023. This was prompted by concerns about the Company's size, lack of liquidity in its shares, uncovered dividend and the share price trading at a persistently large discount to the net asset value (NAV). The outcome of this review was for the Board to recommend to shareholders that they vote in favour of a proposed merger with Custodian REIT. However, this ultimately did not garner enough shareholder support at the Extraordinary General Meeting in March 2024.

In advance of the March EGM, the Board had indicated that, should the Custodian merger proposal fail, then a liquidation of the Company would be the recommended alternative. Therefore, in May 2024 API shareholders were given the opportunity to vote on a proposed change to the Group's Investment Objective from "The Company's objective and purpose is to provide Shareholders with an attractive level of income together with the prospect of income and capital growth." to "The Company's investment objective is to realise all existing assets in the Company's portfolio in an orderly manner." Included in this change was a revision of the fees paid to the Investment Manager to reflect the new Investment Objective and align the interest of the Investment Manager with the sale and return of capital to shareholders. On 28 May 2024, approximately 96% of shareholders (who voted) voted in favour of this proposal and the resolution passed.

Managed Wind-Down

Following the May 2024 vote, alongside the Investment Manager, the Board explored the most effective means of disposing of the Company's assets, with the main aims being to obtain the best achievable value for the Company's assets at the time of their realisation and to repay borrowings and return capital to shareholders as swiftly as possible. As previously disclosed, this encompassed various disposal strategies, including individual property sales (of which 6 completed in 2024) alongside a wider portfolio transaction. Through an independent agent the whole residual portfolio (excluding the land at Far Ralia) was marketed to potential buyers in an extensive and competitive process; while it was made known that Far Ralia was also available for purchase, it was felt that its inclusion may deter potential purchasers of the wider portfolio and a more targeted approach for the asset in isolation would result in a more favourable outcome. Following consideration of these proposals, and what might be achieved by way of individual property sales over a longer period with the associated risks, the Board selected a preferred bidder and agreed a transaction with GoldenTree Asset Management (GoldenTree) for the sale of the entire share capital of abrdn Property Holdings Limited (aPH), the wholly owned subsidiary of the Company.

Sale of aPH

After extensive due diligence by the purchaser and detailed negotiations, the transaction completed on 29 November 2024 as expected and comprised the sale of 39 assets (being the Company's entire residual investment property portfolio barring its interest in Far Ralia) in addition to the Group's debt facility with RBSI and various net current assets/liabilities. The cash consideration for the purchase of the investment portfolio was £351m (an 8% discount to the portfolio's valuation as at 30 June 2024), while the net proceeds, after adjusting for debt and other net assets subject to normal adjustments including those arising from the completion process, was £234.3m (resulting in an accounting loss of £48.2m).

GoldenTree paid an initial cash deposit of £35.1m upon exchange of contracts in September 2024, and a subsequent balancing payment on 29 November 2024. As part of the sales agreement, there was then a period of review in which the final completion accounts were prepared to reflect any post balance sheet events which would impact the aforementioned adjustments. This created a degree of uncertainty as to the final amount of the net proceeds. After consultation with the proposed liquidators, Investment Manager and other advisors, the Board decided to keep a prudent retention to allow for future costs and conclusion of the completion accounts process.

The Board's view was that the most efficient way of returning funds to shareholders was by means of a Redeemable Bonus Share Scheme. To that end, a circular was issued to shareholders outlining proposed changes to the Articles of Association which allowed the Board to return 55p per share in aggregate. This was made up of:

?an initial return of capital comprising 52p per share, paid on 23 December 2024.

?an interim Property Income Distribution of 3p per share, paid on 10 January 2025.

At a General Meeting of the Company on 17 December 2024, approximately 99.5% of shareholders (who voted) voted in favour of this proposal and the resolution passed.

REIT Status

The Company had been a member of the REIT regime since 1 January 2015 and while a member was required to distribute at least 90% of the income profits of the Group's UK property rental business ("Property Income"). A consequence of the transaction was that the Company immediately exited the REIT regime and is now required to distribute the accumulated undistributed Property Income. The 3p additional interim Property Income Distribution noted above represented an initial payment under this requirement and the Board intend to announce a further final property income distribution at a date in the future.

Board Composition

Following the disposal of the subsidiaries and initial return of Capital to shareholders, the Board undertook a review of the residual business and requirements for the foreseeable future. Taking account of the responsibilities which were required to be discharged and the need to exercise management of the Company's ongoing operating costs, the Board concluded that two Directors was an appropriate number. On 31st December, three Directors (including the previous Chair) resigned from the Board.

The Company would like to acknowledge and thank them for their huge contributions to the Company - particularly over the last 18 months.

Financial Resources

As noted, the transaction with GoldenTree included the transfer of the Group's debt facility with RBSI and the Company no longer has access to revolving credit facilities ("RCF"). In order to ensure that the retained cash was invested appropriately, the Board invested the residual cash proceeds into a shorter-term money market fund, the abrdn Liquidity Fund - Sterling, which offered a competitive rate of interest. This was deemed to be a low risk investment offering good liquidity, competitive returns and low costs relative to alternative deposit options.

At the year end the Company held £36.7m in cash and had other financial resources of £18.4m net of any prevailing financial commitments; i.e. not including any future costs associated with the running of the company through liquidation or potential balancing payment due on the transaction.

Annual General Meeting ("AGM")

The Annual General Meeting ("AGM") will be held at 10.00am on Monday 11 August 2025 at the offices of Aberdeen PLC, 1 George Street, Edinburgh EH2 2LL. The timing of the sale of Far Ralia is uncertain so the Board have decided to defer the AGM from the usual June date. 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 in advance to property.income@aberdeenplc.com

Final Distributions and Outlook

As detailed further in these 2024 Annual Report & Financial Statements, the current NAV of 8p might imply that the Company could liquidate and distribute that to shareholders. It should be noted however that the current NAV does not reflect ongoing running costs until liquidation and beyond, or final matters relating to the Sales Agreement. Furthermore, there is still considerable uncertainty around the timing and value of the eventual sale of Far Ralia which could impact the size of future distributions. The Investment Manager is actively looking to dispose of Far Ralia and their sole focus, together with the Board, is to maximise the return of capital to shareholders as expeditiously as possible.

Shareholders are reminded that as soon as liquidators are appointed the Company's shares will cease trading on the London Stock Exchange effectively meaning the shares cannot be sold with their value totally dependent on the proceeds distributed by the liquidator after all assets are sold and liabilities paid.

When appropriate the Board will update shareholders regarding the sale of Far Ralia, and any potential impact to the ultimate distribution they will receive.

30 April 2025

Mike Balfour

INVESTMENT MANAGER'S REPORT

Review of 2024

Throughout 2024 the main focus was on managing the property assets optimally despite the corporate activity affecting the future of the Company. We began the year with the merger discussions and resulting due diligence, before the shareholder votes that led to the beginning of the Managed Wind-Down (MWD). During this time, the Company continued to reduce debt with six disposals being completed - two in each of the first three quarters of the year. These are outlined in more detail below.

Following the shareholder decision in May 2024 to begin the MWD, the Board and Investment Manager reviewed the various options available and decided to explore a portfolio sale whilst also preparing the assets for individual disposals. Following an extensive marketing exercise, the Company entered into exclusive discussions with GoldenTree Asset Management in August 2024 to dispose of a portfolio of 39 assets (from the remaining 40 assets) by way of a sale of abrdn Property Holdings Limited (aPH), one of the Company subsidiaries which held all the company's property assets (either directly or via its own investment in the General Partner / Limited Partnership). Whilst at a discount to valuation at the time, it was decided that the benefit of an accelerated return of capital to shareholders was preferable to a more protracted individual sale process.

After an 8-week formal due diligence period, contracts were exchanged on the corporate sale of aPH in September with completion on the 29th of November.

Purchases:

Given the corporate activity in early 2024 and the subsequent vote to change the Group's Investment Objective the Company made no purchases during the year.

Sales:

Prior to the disposal of aPH to GoldenTree, six assets had been sold in the year with a total sales price of £43.5m.

?London, 15 Basinghall Street (Office) - sold in the first quarter for £9.8m, 7.1% below the preceding valuation.

?Warrington, Opus 9 (Industrial) - sold in the first quarter for £6.8m, 5.5% above the preceding valuation.

?Hebburn, Unit 4 Monkton Business Park (Industrial) - sold in the second quarter for £5.3m to the tenant, 6.0% above the preceding valuation.

?Bristol, Kings Business Park (Industrial) - sold in the second quarter for £7.9m, 1.3% below the preceding valuation.

?Dover, Bastion Point (Industrial) - sold for £9.5m in the third quarter, 4.8% below the preceding valuation.

?Manchester, 101 Princess Street (Office) - sold for £4.3m in the third quarter, 2.3% below the preceding valuation..

Overall, the 2024 sales were completed 0.1% above the valuation immediately preceding the relevant sale; the sales resulted in an accounting loss of £2.1m when taking into account the December 2023 valuations and transaction costs.

Outlook for 2025

The sole focus of the Board and Investment Manager in the coming year is to sell the remaining asset and liquidate the company as swiftly as possible. To that end, we continue to market the one remaining property asset that the company owns, Far Ralia. As a natural capital investment (in an emerging market), where a proportion of the value is attributed to the value of potential carbon offsets offered by the tree planting, there isn't a large number of potential investors. That said, we have had interest to date from a variety of potential buyers and anticipate completing a sale during the course of the year.

Valuation

The portfolio was valued quarterly by Knight Frank LLP under the provisions of the RICS Red Book. As at 31 December 2024 the sole property Far Ralia, was valued at £10.0m and the Company held cash of £36.6m.

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. Subsequent to completing the disposal of abrdn Property Holdings Limited (aPH) to GoldenTree the Board reassessed the Company's principal risks as summarised below:

Delays in the eventual liquidation of the Company.

The eventual liquidation of the Company is likely to be dependent on the timing of the sale of the Company's sole remaining asset, Far Ralia; the Board will provide an update to Shareholders if this position changes. The risk therefore is that any delays in the sales process will likely impact not just the timing of the liquidation but also potentially the scale of final distribution to shareholders (see below). The risk is mitigated by an active marketing process and risks include finalising Scottish Forestry consent required as part of the sales process which is progressing. Furthermore, the Board are in regular contact with the potential liquidators regarding the timing of when they could be appointed and the retention they would require.

The ultimate total distribution to shareholders is less than expected.

To mitigate this risk, the Board received regular updates from the Investment Manager during the negotiation period for the subsidiary sale and established a prudent buffer at the point of initial capital distribution to Shareholders during December 2024 (via the Redeemable Bonus Share issue). Estimates of what the ultimate total distribution to shareholders were communicated to shareholders when it was prudent to do so. The ultimate distribution to shareholders is highly dependent on the timing of the sale of Far Ralia and the resultant sales price achieved; the former is likely to impact ongoing running costs prior to liquidation (i.e. longer period to liquidation, higher running costs). This risk is mitigated through the regular review of forecast costs, scrutiny of the selling agent, and proactive discussions with the potential liquidator.

Environmental.

Extreme weather events both in the UK and globally are becoming a more regular occurrence due to climate change, the impact of the environment on property and on the wider UK economy is seen as an increasing risk. Environmental risk was historically considered as part of each purchase and monitored on an ongoing basis by the Investment Manager.

Please see the Sustainability Committee Report for further details on how the Company addresses environmental risk, including climate change.

Other Risks.

Other risks faced by the Company include the following:

  • Tax efficiency - following the change in structure of the Group on 29 November 24, it can no longer qualify for REIT Tax status. As such, there is a clear risk that the Company can no longer be seen as a tax efficient investment vehicle for shareholders. In addition a future delisting may ultimately impact shareholders invested via tax efficient wrappers such as ISAs.
  • 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.
  • Cyber - the risk of large-scale network disruption through various forms such as hacking, malware, phishing, DDOS, data breach or loss. In addition, Artificial Intelligence and it's potential use in cyber attacks.

The Board seeks to mitigate and manage all risks through review, policy setting and enforcement of contractual obligations. It also regularly monitors the investment environment and where the Company's cash is invested.

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.

?Future of the Company

In the Company's 2023 Annual Report & Financial Statements, several risks were noted associated with the size, speed and method of capital distributions back to shareholders, and maintenance of REIT status if shareholders voted in favour of the (then) proposed managed wind-down. Following the vote, the Board took steps to address these ultimately resulting in the disposal of the Group's subsidiaries to GoldenTree Asset Management LP. This helped to ensure that a sizeable proportion of capital was distributed quickly to shareholders. As noted above, there are still some risks regarding the timing and magnitude of the final distributions and these now form part of the key risks of the Company.

There now exists a clear risk around the liquidation process itself. Once in liquidation, the Company's shares will no longer be traded on a stock exchange and shareholders will not be able to realise their investments and will be dependent on the liquidator who will assume responsibilities over the operational management of the Company during the liquidation period. The length of the liquidation itself and timing of ultimate distributions relating to any residual cash due to shareholders would be at their discretion.

?Economic and Geopolitical

The current economic and geopolitical environment is unpredictable, and changing rapidly, and this may affect real estate valuations and/or deter prospective buyers, increasing the risk relating to the quantum and timing of sale of Far Ralia.

?Climate

A "greenlash" against climate policies is emerging following the Republicans win in the US elections in 2024. This could derail progress against global climate targets and dampen the demand for carbon offset assets.

?Technology & Artificial Intelligence

Cyber-attacks are increasing in occurrence and target businesses' data, IT systems and even their physical infrastructure as buildings have become more reliant on smart technology for their daily operation. In addition, the rapid evolution of AI is potentially introducing risks that have not yet been identified or quantified.

Viability Statement

The Company's sole remaining property asset is the land at Far Ralia. Subsequent to the post year end PID of 3p, other assets comprise an investment in a money market fund, cash at bank and other net current assets. The Board has therefore considered whether the Company could still be considered 'viable'. As part of this assessment, the Board reviewed estimations of projected costs (up to and during a liquidation period) relative to cash retained from the initial distribution of 55p.

The Board has also carried out a robust assessment of the principal and emerging risks faced by the Group, as detailed above.

After review, the Board are confident that the Company has sufficient resources to be able to meet its liabilities as they fall due. However, it also acknowledges that the Company can no longer be considered viable given there is a clear intention to liquidate the Company and return surplus cash to shareholders.

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. As detailed further in note 2.1, the Directors have deemed it appropriate to prepare the Group Consolidated Financial Statements on a basis other than that of a going concern.

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

30 April 2025

Mike Balfour

Chair

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2024

12 Months to

12 Months to

31 Dec 2024

31 Dec 2023

Notes

£

£

Rental income

24,070,912

27,552,279

Service charge income

4,899,881

4,884,357

Service charge expenditure

(5,937,817)

(6,354,598)

Net Rental Income

23,032,976

26,082,038

Administrative and other expenses

Investment management fee

4

(1,399,114)

(2,632,225)

Other direct property operating expenses

4

(2,447,020)

(2,408,461)

Net Impairment gain on trade receivables

4

(110,725)

213,048

Fees associated with strategic review and aborted merger

4

(2,800,223)

(1,729,925)

Fees associated with managed wind-down and portfolio disposal

4

(399,197)

-

Other administration expenses

4

(1,505,185)

(1,136,742)

Total administrative and other expenses

(8,661,464)

(7,694,305)

Operating profit before changes in fair value of investment properties

14,371,512

18,387,733

Valuation loss from investment properties

7

-

(17,989,531)

Valuation gain/(loss) from land

8

475,876

(783,683)

Estimated costs arising from future disposal

(165,000)

-

Loss on disposal of subsidiaries

10

(48,152,578)

-

Loss on disposal of investment properties

7

(2,063,652)

(279,090)

Operating loss

(35,533,842)

(664,571)

Finance income

5

649,889

92,178

Finance costs

5

(7,955,137)

(7,695,508)

Loss for the year before taxation

(42,839,090)

(8,267,901)

Taxation

Tax charge

6

(55,110)

-

Loss for the year, net of tax

(42,894,200)

(8,267,901)

Other comprehensive (loss) / income

Movement in fair value on swap

15a

-

(902,534)

Movement in fair value on interest rate cap

15b

98,784

(789,918)

Total other comprehensive (loss)/gain

98,784

(1,692,452)

Total comprehensive loss for the year, net of tax

(42,795,416)

(9,960,353)

Loss per share

2024 (p)

2023 (p)

Basic and diluted loss per share

20

(11.25)

(2.17)

All items in the above Consolidated Statement of Comprehensive Income derive from discontinuing operations.

The notes below are an integral part of these Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2024

31 Dec 24

31 Dec 23

Assets

Notes

£

£

Non-current assets

Investment properties

7

-

388,338,754

Lease incentives

7

-

9,306,403

Land

8

-

8,250,000

Interest rate cap

15b

-

559,671

Rental deposits held on behalf of tenants

-

895,003

-

407,349,831

Current Assets

Investment property held for sale

9

-

35,100,000

Land

8

9,835,000

-

Trade and other receivables

11

2,171,092

6,101,152

Cash and cash equivalents

12

36,655,166

6,653,838

Interest rate cap

15b

-

849,110

48,661,258

48,704,100

Total assets

48,661,258

456,053,931

Liabilities

Current liabilities

Trade and other payables

13

6,860,858

14,018,455

Distributions payable

21

11,436,569

-

18,297,427

14,018,455

Non-current liabilities

Bank borrowings

14

-

141,251,910

Obligations under finance leases

16

-

1,810,120

Rental deposits due to tenants

-

895,003

-

143,957,033

Total liabilities

18,297,427

157,975,488

Net assets

30,363,831

298,078,443

Equity

Capital and reserves attributable to Company's equity holders

Share capital

18

228,383,857

228,383,857

Treasury share reserve

18

(18,400,876)

(18,400,876)

Redeemable Bonus Share issue

18

(198,233,868)

-

Retained Earnings

19

-

-

Capital reserves

19

(49,022,257)

(9,660,578)

Other distributable reserves

19

67,636,975

97,756,040

Total equity

30,363,831

298,078,443

2024 (p)

2023 (p)

NAV per share

22

8.0

78.2

Approved and authorised for issue by the Board of Directors on 30 April 2025 and signed on their behalf by James Clifton-Brown

The accompanying notes below are an integral part of these Consolidated Financial Statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024

Notes
Share Capital £
Treasury Shares £
Redeemable Bonus Shares £
Retained Earnings £
Capital Reserves £
Other Distributable Reserves £
Total Equity £
Opening balance 1 January 2024
228,383,857
(18,400,876)
-
-
(9,660,578)
97,756,040
298,078,443
Loss for the year
-
-
-
(42,894,200)
-
-
(42,894,200)
Other comprehensive gain
-
-
-
-
98,784
-
98,784
Total comprehensive loss for the year
-
-
-
(42,894,200)
98,784
-
(42,795,416)
Redeemable Bonus Shares
-
-
(198,233,868)
-
-
-
(198,233,868)
Dividends paid
21
-
-
-
(15,248,759)
-
-
(15,248,759)
Dividends payable
21
-
-
-
(11,436,569)
-
-
(11,436,569)
Valuation loss from land
8
-
-
-
(475,876)
475,876
-
-
Reclassified from Other distributable reserves
-
-
-
30,119,065
-
(30,119,065)
-
Transfer between reserves
(10,279,891)
10,279,891
-
-
Loss on disposal of subsidiaries
-
-
-
48,152,578
(48,152,578)
-
-
Loss on disposal of investment properties
7
-
-
-
2,063,652
(2,063,652)
-
-
Balance at 31 December 2024
228,383,857
(18,400,876)
(198,233,868)
-
(49,022,257)
67,636,975
30,363,831

For the year ended 31 December 2023

Notes
Share Capital £
Treasury Shares £
Retained Earnings £
Capital Reserves £
Other Distributable Reserves £
Total Equity £
Opening balance 1 January 2023
228,383,857
(18,400,876)
-
4,382,024
11,084,178
97,838,372
323,287,555
Loss for the year
-
-
-
(8,267,901)
-
-
(8,267,901)
Other comprehensive loss
-
-
-
-
(1,692,452)
-
(1,692,452)
Total comprehensive loss for the year
-
-
-
(8,267,901)
(1,692,452)
-
(9,960,353)
Dividends paid
21
-
-
-
(15,248,759)
-
-
(15,248,759)
Valuation loss from investment properties
7
-
-
-
17,989,531
(17,989,531)
-
-
Valuation loss from land
8
-
-
-
783,683
(783,683)
-
-
Reclassified from Other distributable reserves
-
-
-
82,332
-
(82,332)
-
Loss on disposal of investment properties
7
-
-
-
279,090
(279,090)
-
-
Balance at 31 December 2023
228,383,857
(18,400,876)
-
-
(9,660,578)
97,756,040
298,078,443

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December 2024

12 months to

12 months to

31 Dec 2024

2023

Cash flows from operating activities

Notes

£

£

Loss for the year before taxation

(42,839,090)

(8,267,901)

Movement in lease incentives

96,128

(984,446)

Movement in trade and other receivables

3,055,794

1,212,710

Movement in trade and other payables

(2,023,484)

2,353,098

Finance costs

5

7,955,137

7,695,508

Finance income

5

(649,889)

(92,178)

Valuation loss from investment properties

7

-

17,989,531

Valuation loss from land

8

(475,876)

783,683

Estimated costs arising from future disposal

165,000

-

Loss on disposal of subsidiaries

10

48,152,578

-

Loss on disposal of investment properties

7

2,063,652

279,090

Net cash inflow from operating activities

15,499,950

20,969,095

Cash flows from investing activities

Finance income

5

649,889

92,178

Purchase of investment properties

7

-

(23,986,401)

Purchase of land

8

(1,274,124)

(1,533,683)

Capital expenditure on investment properties

7

-

(21,678,721)

Net proceeds from disposal of investment properties

7

42,986,348

6,120,910

Net proceeds from disposal of subsidiaries

10

234,298,743

-

Net cash (outflow)/inflow from investing activities

276,660,856

(40,985,717)

Cash flows from financing activities

Bonus share distribution in period

18

(198,233,868)

-

Borrowing on RCF

14

13,300,000

63,000,000

Repayment of RCF

14

(41,874,379)

(6,125,621)

Repayment of expired facility

14

-

(110,000,000)

New term facility

14

-

85,000,000

Interest paid on bank borrowing

5

(9,755,493)

(7,396,815)

Receipts on Interest rate SWAP

-

1,254,217

Receipts on Interest rate Cap

15b

1,123,358

365,674

Finance lease interest

5

(33,768)

(49,289)

Dividends payable to the Company's shareholders

21

(11,436,569)

-

Dividends paid to the Company's shareholders

21

(15,248,759)

(15,248,759)

Net cash inflow/(outflow) from financing activities

(262,159,478)

10,799,407

Net (decrease)/increase in cash and cash equivalents in the year

30,001,328

(9,217,215)

Cash and cash equivalents at beginning of year

12

6,653,838

15,871,053

Cash and cash equivalents at end of year

12

36,655,166

6,653,838

Notes TO the consolidated financial statements

  1. General information

abrdn Property Income Trust Limited ("the Company") and its former subsidiaries (together "the Group") historically carried on the business of property investment through a portfolio of freehold and leasehold investment properties located in the United Kingdom. During the year, the Company disposed of its entire holding in its subsidiaries and is now in the process of winding-down prior to entering liquidation. 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 30 April 2025.

  1. 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 ("IASB"), 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.

Assessment of Going Concern

During the second half of 2023 the Board undertook a strategic review. This review was prompted by the Board's concerns, as well as those of some shareholders about the Group's size, the lack of liquidity in its shares, the persistent discount to NAV and an uncovered dividend. The outcome of this review, following interest from other listed REITs, was that the Board recommended to shareholders that they vote in favour of a proposed merger with Custodian Property Income REIT plc ("Custodian") for the reasons outlined in various announcements to shareholders during the first quarter of 2024. As detailed more fully in the 2023 Annual Report & Financial Statements, this proposal did not attract sufficient support from shareholders to be passed at the Extraordinary General Meeting. Following the vote, shareholders were given the opportunity to vote on a proposed change to the Group's Investment Policy which if passed would place the Group into a Managed and Orderly Wind-Down ("wind-down EGM"), selling assets and returning funds to shareholders as such funds become available. On the 28 May 2024, approximately 96% of shareholders who voted cast their votes in favour of this proposal and the resolution passed.

Under the Managed Wind-Down process, the Group and its subsidiaries were managed with the intention of realising all the assets in its portfolio in an orderly manner, with a view to repaying borrowings and making timely returns of capital to shareholders whilst aiming to obtain the best achievable value for the assets. As part of this process, the Group successfully disposed of 6 Investment Properties prior to reaching an agreement with GoldenTree Asset Management LP for the sale of its wholly owned subsidiary abrdn Property Holdings Limited (aPH). The transaction, which completed on the 29th November, comprised the sale of 39 assets being the Group's entire investment property portfolio excluding its interest in the land at Far Ralia (which was subsequently transferred to the Company prior to year end following subsequent Scottish Government consent).

Following completion of the transaction, Shareholders were given the opportunity to vote on a proposal for the Company to make an initial return of the proceeds of sale by way of an initial issue and redemption of Redeemable Bonus Shares repurchased for 52 pence per Redeemable Bonus Share. On 17th December 2024, approximately 99.5% of shareholders who voted cast their votes in favour of this proposal and the funds were returned to shareholders prior to year end.

As at 31st December 2024, the Group consists solely of the Company itself which holds the aforementioned interest in the land at Far Ralia and cash retained from the sales proceeds to cover anticipated costs until fully liquidated. The Board is satisfied that the Company will have no material difficulty in meeting its liabilities as they fall due during the period until fully liquidated. However, there now exists a clear intention to enter liquidation once the completion accounts process has been settled with GoldenTree and the directors are satisfied that there is an appropriate process for realising the remaining assets. As such, in accordance with IAS1 para 25 and IAS 10 (Events after the Reporting Period) para 14, these financial statements have been prepared on a basis other than that of a going concern.

As a result of adopting a basis other than that of a going concern, the Board has deemed it appropriate to reduce the fair value of the land by the expected costs of disposal. No other costs of liquidation have been recognised other than those committed or incurred at the balance sheet date.

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 16 - Lease Liability in a Sale and Leaseback; Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements.

The following amendments to existing standards and interpretations were effective for the year and have been adopted by the Company:

? Amendments to IAS 1 Classification of Liabilities as Current or Non-current.

The amendment clarifies a criterion for recognising a liability as non-current if an entity has the right to defer settlement for at least 12 months after the reporting period. Given the current circumstances of the Company, all liabilities have been deemed current albeit the Board acknowledge that the classification is unaffected by the Company's intention or expectation whether it will exercise a right to defer.

New and revised IFRS 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. The Group will consider these amendments in due course to see if they will have any impact on the Group.

? Amendments to IAS 21 Lack of Exchangeability - The Effects of Changes in Foreign Exchange Rates [Effective 1 January 2025]

? Amendments to IFRS 9 Financial Instruments (Classification and Measurement) [Effective 1 January 2026]

? Amendments to IFRS 18 Presentation and Disclosure in Financial Statements [Effective 1 January 2027]

? Amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures [Effective 1 January 2027]

2.2Significant 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 the future periods. The most significant estimates and judgements are set out below. There were no critical accounting judgements.

Fair value (& presentation) of investment properties and land

Investment properties and land have historically been stated at fair value as at the Balance Sheet date. Gains or losses arising from changes in fair values were included in the Consolidated Statement of Comprehensive Income in the year in which they arose. The fair value of investment properties and land was determined by external real estate valuation experts using recognised valuation techniques. The fair values were determined having regard to any recent real estate transactions where available, with similar characteristics and locations to those of the Group's assets. The directors consider that there is a significantly wider range of estimation uncertainty for land than for investment properties because there are few comparable assets or recent transactions, and the estimates involved (namely Carbon pricing). As detailed further in notes 2.4 and 9, the Directors have also assessed the classification of Land as a current asset considering the current marketing of the site and presentation of these financial statements on a basis other than that of a going concern.

2.3Summary of material accounting policies

The Group adopted Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practical Statement 2) from 1 January 2023. The amendments require the disclosure of 'material', rather than 'significant', accounting policies. Accounting policy information is material if, when considered together with other information included in an entity's financial statements, it can reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements.

Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material. The Directors have reviewed the accounting policies and are satisfied that the information previously disclosed as part of their 'significant' accounting policies fulfils the definitions of 'material' under the amended standards - as such there has been no change to the summary of accounting policies below in the current year.

A Basis of consolidation

The audited Consolidated Financial Statements have historically comprised 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.

During the year, the Company completed on the disposal of its wholly owned subsidiaries. As such, the Consolidated Statement of Financial Position represents the Company in isolation (2023: consolidated group), while the Consolidated Statement of Comprehensive Income includes the pro-rated income and expenditure up to the date of disposal as noted above.

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 was 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) Grant Income

Government grants that relate to the Group's assets are accounted for as a reduction in the cost of the asset to which they relate. They are only recognised when there is both reasonable assurance that the Group will comply with all material conditions attached to the grant and that the grant will be received.

v) 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.

As detailed further in note 6, the Group ceased being treated as a UK REIT from 29 November 2024.

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 were 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 required the Group to provide ancillary services to the tenant such as maintenance works etc, therefore these service charge obligations belonged to the Group. However, to meet this obligation the Group appointed a managing agent, Jones Lang Lasalle Inc "JLL" and directed it to fulfil the obligation on its behalf. The contract between the Group and the managing agent created both a right to services and the ability to direct those services. This was a clear indication that the Group operated as a principal and the managing agent operated as an agent. Therefore, it was 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 Her 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 13 as current are those that are due within one year as a result of upcoming tenant expiries.

2.4Adjustments to going concern basis of accounting

In addition to assessing the Company's significant and material accounting judgements, estimates and assumptions, the Board has also considered the following areas where it might be appropriate to apply adjustments to the 'normal' IFRS basis:

1) Measurement of Assets

It is appropriate to consider the need to write down assets to their net realisable value. Investment Properties including Land are stated at fair value, while other assets including trade receivables are recognised at their recoverable amount already. The Board has assessed the basis for and measurement of the residual interest in Land and have decided to reduce fair value by the estimated cost of disposal. Further details can be found in note 25.

2) Liabilities

The Board recognise that it would be appropriate to accrue costs associated with potentially onerous contracts by applying guidance in IAS 37 'Provisions, Contingent Liabilities and Contingent Assets'. However, at the date of approval of the financial statement, no such contracts exist, and accordingly no provisions have been made.

3) Presentation and disclosure

The Board has assessed the classification of assets and liabilities between current and non-current. Assets that met the criteria to be classified as held for sale at 31 December 2024 have been classified as current assets. Non-current assets and liabilities have been reclassified as current as they are expected to be realised in less than 12 months.

After careful consideration, the Board believes that it would not be meaningful to present the results of discontinued operations as a separate financial statement line item of income or loss (in accordance with IFRS 5) because this would not result in meaningful information in a situation where all of an entity's operations will be discontinued.

Finally, the Board has assessed whether adoption of a basis other than that of a going concern would have any material impact on comparatives and have concluded this not to be the case. As at 31 December 2023, 5 assets valued at £35.1m were deemed 'held for sale' which would have been impaired by £579,150 (0.15p per share) if adopting a similar methodology.

3. Financial Risk Management

The Group's principal financial liabilities have historically been loans and borrowings. The main purpose of the Group's loans and borrowings were to finance the acquisition and development of the Group's property portfolio. The Group had rent and other receivables, trade and other payables and cash and short-term deposits that arose 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 were affected by market risk were principally the interest rate swap (which ended 27 April 2023) and the interest rate cap (which commenced 27 April 2023 and ceased to belong to the Group on 29 November 2024).

i) Interest Rate risk

As described below the Group invested cash balances with Citibank, RBS and Barclays; the latter two were only relevant for the Company's subsidiaries. In the current year the Company also made an investment in the abrdn Liquidity Fund managed by Aberdeen PLC with the excess proceeds from the sale of the subsidiaries. These balances expose the Group to cash flow interest rate risk as the Company'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 14 also historically exposed 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 derivatives (see note 15). The Group had floating rate borrowings at the point of sale of the subsidiaries of £113,300,000; £85,000,000 of these borrowings were fixed via an interest rate cap limiting the floating rate exposure to 3.959%.

The fair value of the derivative was exposed to changes in the market interest rate as their fair value was 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 derivatives is described in note 2.3 L.

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.

The tables below set out the carrying amount of the Company's financial instruments excluding the amortisation of borrowing costs as outlined in note 14.

As at 31 December 2024

Fixed rate

Variable rate

Interest rate

£

£

£

Cash and cash equivalents

-

3,807,736

0.000%

Cash held in abrdn Liquidity fund

-

32,847,430

4.870%

Bank borrowings

-

-

0.000%

As at 31 December 2023

Fixed rate

Variable rate

Interest rate

£

£

£

Cash and cash equivalents

-

6,653,838

0.000%

Bank borrowings

85,000,000

56,874,379

5.459%

At 31 December 2024, if market 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 £366,552 higher (2023: £66,538 higher) as a result of the higher interest income on cash and cash equivalents.

At 31 December 2024, if market interest rates had been 100 basis points lower with all other variables held constant, the profit for the year would have been £366,552 lower (2023: £66,538 lower) as a result of the lower interest income on cash and cash equivalents.

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.

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 with a maximum exposure equal to the carrying value of these instruments. As at 31 December 2024 £nil (2023 £316,737) was placed on deposit with The Royal Bank of Scotland plc ("RBS"), £3,807,736 (2023: £242,900) was held with Citibank, £nil (2023: £6,094,201) was held with Barclays, while £32,847,430 was invested in the abrdn Liquidity Fund (Lux) Sterling Fund (2023: £nil).

The abrdn Liquidity Fund (Lux) Sterling Fund is a money market fund which offers same day liquidity and has obtained an Aaa-mf money market fund rating from Moody's. Citibank is rated A-2 Stable by Standard & Poor's and P-2 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 property in which the Company invests is not traded in an organised public market and is illiquid. As a result, the Company may not be able to liquidate its investment in that property quickly at an amount close to its fair value in order to meet the Company's liquidity requirements.

The following table summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments.

The disclosed amounts for interest-bearing loans and interest rate derivatives in the below table are the estimated net undiscounted cash flows.

The Company's liquidity position is regularly monitored by management and is reviewed quarterly by the Board of Directors.

Year ended 31 December 2024

On demand

12 months

1 to 5 years

>5 years

Total

£

£

£

£

£

Trade and other payables

18,297,427

-

-

-

18,297,427

18,297,427

-

-

-

18,297,427

Year ended 31 December 2023

On demand

12 months

1 to 5 years

>5 years

Total

£

£

£

£

£

Interest-bearing loans

-

8,442,998

152,428,127

-

160,871,125

Trade and other payables

7,514,629

52,450

209,800

5,140,100

12,916,979

Rental deposits due to tenants

-

299,124

713,058

181,945

1,194,127

7,514,629

8,794,572

153,350,985

5,322,045

174,982,231

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

2024

2023

2024

2023

Financial Assets

£

£

£

£

Cash and cash equivalents

36,655,166

6,653,838

36,655,166

6,653,838

Trade and other receivables

2,171,092

6,101,152

2,171,092

6,101,152

Financial liabilities

Bank borrowings

-

141,251,910

-

144,957,576

Trade and other payables

18,297,427

8,217,588

18,297,427

8,217,588

In addition to the above, the Group's financial instruments in the past also included an Interest rate swap and Interest rate cap. These have not been included in the disclosure above as these were already held at fair value. 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. Trade and other receivables/payables are measured in reference to contractual amounts due to/from the Group. These contractual amounts are directly observable.
  • The fair value of bank borrowings was estimated by discounting future cash flows using rates currently available for debt on similar terms and remaining maturities. The fair value approximated their carrying values gross of unamortised transaction costs. This was considered as being valued at level 2 of the fair value hierarchy.

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 2024

Level 1

Level 2

Level 3

Total fair value

Financial assets

Trade and other receivables

-

2,171,092

-

2,171,092

Cash and cash equivalents

36,655,166

-

-

36,655,166

36,655,166

2,171,092

-

38,826,258

Financial liabilities

Trade and other payables

-

18,297,427

-

18,297,427

-

18,297,427

-

18,297,427

Year ended 31 December 2023

Level 1

Level 2

Level 3

Total fair value

Financial assets

Trade and other receivables

-

6,101,152

-

6,101,152

Cash and cash equivalents

6,653,838

-

-

6,653,838

Interest rate cap

-

1,408,781

-

1,408,781

Rental deposits held on behalf of tenants

895,003

-

-

895,003

Right of use asset

-

1,810,120

-

1,810,120

7,548,841

9,320,053

-

16,868,894

Financial liabilities

Trade and other payables

-

8,217,588

-

8,217,588

Bank borrowings

-

144,957,576

-

144,957,576

Obligation under finance leases

-

1,810,120

-

1,810,120

Rental deposits held on behalf of tenants

895,003

-

-

895,003

895,003

154,985,284

-

155,880,287

4. Administrative and Other Expenses

2024

2023

Notes

£

£

Investment management fees

4a

1,399,114

2,632,225

Other direct property expenses

Vacant Costs (excluding void service charge) *

1,263,429

1,217,722

Repairs and maintenance

341,480

418,360

Letting fees

377,364

405,684

Other costs

464,747

366,695

Total Other direct property expenses

2,447,020

2,408,461

Net Impairment loss/(gain) on trade receivables

110,725

(213,048)

Fees associated with strategic review and aborted merger

4b

2,800,223

1,729,925

Fees associated with managed wind down and disposal

4b

399,197

-

Other administration expenses

Directors' fees and subsistence

23

389,757

239,436

Valuer's fees

4c

57,835

75,524

Auditor's fees

4d

167,125

192,700

Marketing

4a

118,425

222,893

Other administration costs

4e

772,043

406,189

Total Other administration expenses

1,505,185

1,136,742

Total Administrative and other expenses

8,661,464

7,694,305

* Void Service charge costs for the year amounted to £1,037,936 (2023: £1,470,241). These have been reclassified as Service charge expenditure as noted below.

2024

2023

£

£

Total service charge billed to tenants

4,244,088

4,731,793

Service charge due from/(to) tenants

655,793

152,564

Service charge income

4,899,881

4,884,357

Total service charge expenditure incurred

4,899,881

4,884,357

Service charge incurred in respect of void units

1,037,936

1,470,241

Service charge expenditure

5,937,817

6,354,598

4a. Investment management fees

From 1 January 2023, the Group agreed a 10bps reduction in the fee payable to the Investment Manager under the terms of the IMA; effective from 1 January 2023 this was 0.60% of total assets up to £500m, and 0.50% of total assets in excess of £500 million. Considering the proposed merger (see note 2.1), the Board served notice on the Investment Management Agreement on 12 October 2023. Following the Shareholder vote to place the Group into a Managed Wind-Down, a new agreement was signed effective 31 May 2024. Under the novated agreement, the Investment Manager is entitled to a fee of 0.20% per annum on total assets (with a floor of £50,000 per quarter until there are no properties remaining and £35,000 thereafter). The Investment Manager is also entitled to a further 0.40% payable based on the Gross Disposal proceeds of the underlying portfolio - £1,459,100 has been recognised in accordance with the disposal of the assets to date and is part of the realised loss on disposal.

As detailed further in Note 26, the Investment Manager receives an 'Incentive Fee' based on the cumulative Gross Disposal Proceeds relative to valuation of the portfolio as at 31 May 2024, with the fee only being triggered if this is greater than 90% of said valuation and if all assets are sold prior to November 2025; if Far Ralia is sold at its current valuation, this fee would be £187,388 if sold prior to 28 November 2025 and £374,775 if sold prior to 28 May 2025.

In addition, the Company paid the Investment Manager a sum of £98,688 excluding VAT (2023: £184,750 excluding VAT) to participate in the Managers marketing programme and Investment Trust share plan.

4b. Fees associated with strategic review, aborted merger and wind-down

As described in more detail in note 2.1, the Board undertook a strategic review during the second half of 2023 after concerns over the Company's size, liquidity, persistent discount to NAV and dividend cover. The outcome of this review, following interest from other listed REITs, was that the Board recommended to shareholders that they vote in favour of a proposed merger with Custodian REIT. The costs associated with the initial Rule 2.7 announcement (including advisor, due diligence and valuation fees) were £2,041,248 of which £1,729,925 was accrued and unpaid at 31 December 2023 based on levels of work in progress (WIP). Since the end of 2023, further fees and costs of £3,199,420 have been recognised in 2024 of which £399,197 relates to the Managed Wind-Down and portfolio disposal. These fees exclude transaction costs which are explained in note 10.

4c. Valuers fee

Knight Frank LLP ("the Valuers"), external international real estate consultants, were appointed as valuers in respect of the assets comprising the property portfolio. The total valuation fees charged for the year amounted to £57,835 (2023: £75,524). Until the sale of the subsidiaries, the total valuation fee comprised a base fee for the ongoing quarterly valuation at an annual rate of 0.017 percent of the aggregate value of the property portfolio (paid quarterly), and a one-off fee on acquisition of an asset. Following the conclusion of the sale, the agreement with Knight Frank was novated and fees are now and initial £5,000 (excluding VAT) for the first valuation and £2,500 (excluding VAT) for each subsequent valuation undertaken.

The amount due and payable at the year-end amounted to £5,000 excluding VAT (2023: £18,665 excluding VAT).

4d. Auditor's fee

At the year-end date Deloitte LLP continued as independent auditor of the Company. The audit fees for the year amounted to £167,125 (2023: £192,700) and relate to audit services provided for the 2024 financial year; including £52,445 pertaining to the Group's share of fees relating to the subsidiaries. Deloitte LLP did not provide any non-audit services in the year (2023: nil).

4e. 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. Following increased activity early 2024, a novated agreement with Northern Trust was agreed on 29 July 2024 - prior to this, Northern Trust was entitled to an annual fee, payable quarterly in arrears, of £65,000. From 1 August 2024 to 31 July 2025, Northern Trust are entitled to an annual fee of £95,670 subject to annual fixed RPI increases of 6.3% effective on the anniversary of 1 August. In addition, they were entitled to a fixed fee of £25,000 in addition to fees of £3,000 (subject to RPI uplifts) for assistance with each property disposal - replaced with a fee of £10,000 if multiple properties are sold in tranches. Finally, Northern Trust is also entitled to reimbursement of reasonable out of pocket expenses. Total fees and expenses charged for the year amounted to £136,262 (2023: £70,325). The amount due and payable at the year-end amounted to £116,946 (2023: £32,500).

5. Finance income and costs

2024

2023

£

£

Interest income on cash and cash equivalents

649,889

92,178

Finance income

649,889

92,178

Interest expense on bank borrowings

7,607,108

8,119,398

Non-utilisation charges on facilites

216,940

198,314

Receipt on interest rate swap

-

(911,184)

Receipt on interest rate caps

(910,100)

(578,933)

Amortisation of premium paid for interest rate cap

762,904

565,030

Amortisation of arrangement costs (see note 14)

244,517

253,594

Finance lease interest

33,768

49,289

Finance costs

7,955,137

7,695,508

Of the finance costs above, £1,959,463 of the interest expense on bank borrowings were accruals at 31 December 2023 and included in Trade and other payables. No such accruals existed at 31 December 2024 as the debt and associated accrued interest was settled via the disposal proceeds.

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 were exempt from corporation tax as were any gains it makes from the disposal of its properties, provided they were not held for trading or sold within three years of completion of development. The Group was otherwise subject to UK corporation tax at the prevailing rate.

As the principal company of the REIT, the Company was 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 were also required to be met by the Company and the Group to maintain REIT tax status. These conditions were met in the period up until the Company disposed of its shareholding in the subsidiaries. Accordingly, deferred tax was not recognised on temporary differences relating to the property rental business.

Following the sale of the Group's subsidiaries on 29th November 2024 (including the investment property portfolio), the Group automatically left the UK REIT regime; one of the quantitative requirements for being a member of the UK REIT regime is that the qualifying property rental business must contain at least three separate properties. Prior to the sale, the Group consulted with their appointed tax advisors on implications of leaving the REIT regime.

The Company and its former Guernsey subsidiary had obtained exempt company status in Guernsey so that they were 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 2024 and 2023 is as follows:

2024

2023

£

£

Loss before tax

(42,839,090)

(8,267,901)

Tax calculated at UK statutory corporation tax rate of 25% (2023*: blended rate of 23.5%)

(10,709,772)

(1,942,957)

Valuation loss in respect of Investment properties not subject to tax (pre-29th Nov)

3,425,858

4,477,291

UK REIT exemption on net income

(1,711,456)

(2,534,334)

Valuation loss in respect of Lant at Far Ralia post 29th Nov

164,562

-

Valuation loss in respect of sale of Subsidiaries

8,885,918

-

Current income tax charge

55,110

-

* Calculated as a blended average of 23.5% being 3 months at the prevailing 19%, and 9 months at 25%.

7. Investment Properties

UK

UK

UK

UK

Industrial

Office

Retail

Other

Total

2024

2024

2024

2024

2024

£

£

£

£

£

Market value at 1 January

250,070,037

72,575,000

72,390,000

35,900,000

430,935,037

Purchase of investment properties

-

-

-

-

-

Capital expenditure on investment properties

-

-

-

-

-

Opening market value of disposed investment properties

(29,700,000)

(15,350,000)

-

-

(45,050,000)

Market value prior to sale of subsidiaries

220,370,037

57,225,000

72,390,000

35,900,000

385,885,037

Opening market value of disposed investment properties

(220,370,037)

(57,225,000)

(72,390,000)

(35,900,000)

(385,885,037)

Market value at 31 December

-

-

-

-

-

Carrying value at 31 December

-

-

-

-

-

Valuations have been performed by Knight Frank LLP, acting in the capacity of a valuation adviser to the AIFM, 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 - Global Standards, which incorporate the International Valuation Standards). These valuation models are consistent with the principles in IFRS 13. Historically, an adjustment has also been made for lease incentives (2023: £9,248,902) and right of use assets (£1,810,120) in respect of the present value of future ground rents - however both are no longer relevant following the sale of the subsidiaries. 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.

UK

UK

UK

UK

Industrial

Office

Retail

Other

Total

2023

2023

2023

2023

2023

£

£

£

£

£

Market value at 1 January

227,525,000

88,450,000

53,550,000

39,150,000

408,675,000

Purchase of investment properties

4,367,140

-

19,619,261

-

23,986,401

Capital expenditure on investment properties

17,394,611

3,658,739

624,029

1,342

21,678,721

Opening market value of disposed investment properties

(6,400,000)

-

-

-

(6,400,000)

Valuation loss from investment properties

6,062,225

(19,490,769)

(1,360,741)

(3,200,246)

(17,989,531)

Movement in lease incentives

1,121,061

(42,970)

(42,549)

(51,096)

984,446

Market value at 31 December

250,070,037

72,575,000

72,390,000

35,900,000

430,935,037

Investment property recognised as held for sale

(19,750,000)

(15,350,000)

-

-

(35,100,000)

Market value net of held for sale at 31 December

230,320,037

57,225,000

72,390,000

35,900,000

395,835,037

Right of use asset recognised on leasehold properties

-

1,810,120

-

-

1,810,120

Adjustment for lease incentives

(5,957,199)

(1,943,609)

(846,233)

(559,362)

(9,306,403)

Carrying value at 31 December

224,362,838

57,091,511

71,543,767

35,340,638

388,338,754

In the Cash Flow Statement, proceeds from disposal of investment properties comprise:

2024

2023

£

£

Opening market value of disposed investment properties

45,050,000

6,400,000

Loss on disposal of investment properties

(2,063,652)

(279,090)

Net proceeds from disposal of investment properties

42,986,348

6,120,910

Valuation Methodology

The fair value of completed investment properties were historically 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 reflected the current rent (the gross rent) payable to lease expiry, at which point the valuer assumed that each unit would be re-let at their opinion of ERV. The valuers made allowances for voids where appropriate, as well as deducting non recoverable costs where applicable. The appropriate yield was selected on the basis of the location of the building, its quality, tenant credit quality and lease terms amongst other factors.

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 all are valued using the Income Capitalisation method.

Country & Class 2023

UK Industrial

Level 3

UK Office

Level 3

UK Retail

Level 3

UK Other

Level 3

Fair Value 2023 £

250,070,037

72,575,000

72,390,000

35,900,000

Key Unobservable Input 2023

Initial Yield

Initial Yield

Initial Yield

Initial Yield

Reversionary yield

Reversionary yield

Reversionary yield

Reversionary yield

Equivalent Yield

Equivalent Yield

Equivalent Yield

Equivalent Yield

Estimated rental value per sq ft

Estimated rental value per sq ft

Estimated rental value per sq ft

Estimated rental value per sq ft

Range (weighted average) 2023

0.00% to 8.97% (4.80%)

4.56% to 10.51% (7.57%)

6.03% to 9.12% (6.91%)

5.40% to 9.30% (6.53%)

4.74% to 8.79% (6.55%)

7.34% to 12.20% (10.33%)

5.52% to 7.99% (6.22%)

5.81% to 9.40% (6.52%)

5.28% to 8.30% (6.46%)

7.04% to 9.98% (8.89%)

5.76% to 9.91% (7.02%)

5.58% to 9.21% (6.67%)

£4.75 to £10.25 (£7.04)

£15.79 to £45.94 (£27.08)

£0.00 to £30.61 (£11.35)

£6.50 to £20.00 (£14.49)

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 ERV per annum, area per square foot, average ERV per square foot, initial yield and reversionary yield as at the Balance Sheet date.

2024

2023

ERV p.a.

£nil

£34,189,042

Area sq.ft.

-

3,503,840

Average ERV per sq.ft.

£nil

£9.76

Initial yield

N/A

5.8%

Reversionary yield

N/A

7.1%

The table below presents the sensitivity of the valuation to changes in the most significant assumptions underlying the valuation of completed investment property.

2024

2023

£

£

Increase in equivalent yield of 50 bps

N/A

(31,373,168)

Decrease in rental rates of 5% (ERV)

N/A

(15,910,176)

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

2024

2023

£

£

Cost

Balance at the beginning of the year

9,595,555

8,061,872

Additions

2,300,154

2,154,160

Government Grant Income receivable

(1,026,030)

(620,477)

Balance at the end of the year

10,869,679

9,595,555

Accumulated depreciation and amortisation

Balance at the beginning of the year

(1,345,555)

(561,872)

Valuation gain/(loss) from land

475,876

(783,683)

Balance at the end of the year

(869,679)

(1,345,555)

Projected sales costs (see note 25)

(165,000)

-

Carrying amount as at 31 December

9,835,000

8,250,000

Valuation methodology

The Land is held at fair value and is categorised Level 3. The Group appoints suitable valuers (such appointment is reviewed on a periodic basis) to undertake a valuation of the land on a quarterly basis, but going forward on a half yearly basis. The valuation is undertaken in accordance with the current RICS guidelines by Knight Frank LLP whose credentials are set out in note 7.

Additions represent costs associated with the reforestation and peatland restoration at Far Ralia. Grants are receivable from the Scottish Government for such costs. The conditions of the grant are deemed to be complied with on initial completion of work on the associated Work Areas identified under the Grant agreement. As at 31 December 2024, no grant income has yet been received, however, £1,646,507 (2023: £620,477) has been recognised in accordance with the Group's policy for grant recognition (see Note 2.3 C iv).

As noted in more detail in note 2.1, the current Annual Report & Accounts are not prepared on a going concern basis with the carrying value reduced by estimated costs of disposal and £165,000 has been recognised to write down the Land to its projected net realisable value. Further details are provided in note 25.

The valuation above is sensitive to movements in the underlying inputs - an increase in the growth rate of Carbon Prices per T/CO2 (10% over base assumptions during an initial 26-year period) would result in an increase in valuation of £1.8m. Whereas a decrease in growth rates (10% during the same period) would result in a decrease in valuation of £1.7m.

9. Investment Properties Held for Sale

Following the sale of the subsidiaries on the 29 November 2024, the Group no longer held any investment properties baring its interest in the Land at Far Ralia. The Company is actively seeking a buyer for this site, however, for the purposes of these Financial Statements it has been elected not to classify these as Held for Sale as the Land has already been reclassified to Current Assets because the financial statements have been prepared on a basis other than that of a going concern.

As at 31 December 2023, the Group was actively seeking a buyer for several assets including its industrial assets Opus 9 in Warrington (sold March 2024 for £6.75m), Unit 5 Monkton Business Park in Hebburn (sold April 2024 for £5.3m) and Kings Business Park in Bristol (sold April 2024 for £7.9m). In addition, the Group was actively seeking a buyer of its office asset 15 Basinghall Street in London (sold March 2024 for £9.8m), and 101 Princess Street in Manchester (sold September 2024 for £4.3m).

In addition to the sales noted above, the Group also sold its industrial asset Bastion Point in Dover in August 2024 for a headline price of £9.5m

10. Investments in Limited Partnership and Subsidiaries

The Company historically owned 100 per cent of the issued ordinary share capital of abrdn Property Holdings Limited, a company with limited liability incorporated and domiciled in Guernsey, Channel Islands, whose principal business is property investment. abrdn Property Holdings Limited, in turn, owned the entire issued share capital of a General Partner which held, through a Limited Partnership, a portfolio of UK real estate assets.

  • abrdn Property Holdings Limited, a property investment company with limited liability incorporated in Guernsey, Channel Islands.
  • abrdn (APIT) Limited Partnership, a property investment limited partnership established in England.
  • abrdn APIT (General Partner) Limited, a company with limited liability incorporated in England, whose principal business is property investment.
  • abrdn (APIT Nominee) Limited, a company with limited liability incorporated and domiciled in England, whose principal business is property investment.

On 29th November, the Company completed on the disposal of 100% of the share capital of abrdn Property Holdings Limited. The transaction included the disposal of the entire group of subsidiaries listed above. Following subsequent negotiations over the Completion Accounts, the final price paid by GoldenTree was £234.3m.

2024

£

Disposal of abrdn Property Holdings Limited

234,298,743

Less: transaction costs associated with the sale

(5,237,261)

Net Proceeds

229,061,482

Net Assets of disposal Group at date of sale (post completion account review)

276,614,616

Derecognition of Far Ralia (transferred to Company)

(10,000,000)

Derecognition of Accrued Grant Income for Far Ralia (transferred to Company)

(1,646,507)

Trade and Other Receivables transferred to Company

(505,296)

Adjusted Net Assets of disposal Group

264,462,813

Loss on Disposal of Subsidiaries

35,401,331

Reclassification of unrealised losses in Investment Portfolio to Realised Losses

12,751,247

Realised Loss on Disposal of Subsidiaries

48,152,578

Included within the transaction costs associated with the sale, were £1,459,100 payable to the Investment Manager.

11. Trade and other receivables

2024

2023

£

£

Trade receivables

189,460

4,574,012

Less: provision for impairment of trade receivables

(189,460)

(832,240)

Trade receivables (net)

-

3,741,772

Rental deposits held on behalf of tenants

-

299,124

Accrued Grant Income (see Note 8)

1,646,507

620,477

Other receivables

524,585

1,439,779

Total trade and other receivables

2,171,092

6,101,152

Reconciliation for changes in the provision for impairment of trade receivables:

2024

2023

£

£

Opening balance

(832,240)

(2,137,972)

(Charge)/Credit for the year

(110,725)

213,048

Reversal for amounts written-off

369,386

1,092,684

Derecognition on disposal of subsidiaries

384,119

-

Closing balance

(189,460)

(832,240)

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.

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 have been included in other direct property costs in the Consolidated Statement of Comprehensive Income. As at 31 December 2024, trade receivables of £189,460 (2023: £832,240) were considered impaired and provided for.

The ageing of these receivables is as follows:

2024

2023

£

£

0 to 3 months

(9,485)

(37,274)

3 to 6 months

(18,299)

(81,350)

Over 6 months

(161,676)

(713,616)

(189,460)

(832,240)

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.

As of 31 December 2024, trade receivables of £nil (2023: £500,470) were less than 3 months past due but considered not impaired.

12. Cash and cash equivalents

2024

2023

£

£

Cash held at bank

3,807,736

6,337,101

Cash held in abrdn Liquidity fund

32,847,430

-

Cash held on deposit with RBS

-

316,737

36,655,166

6,653,838

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. The abrdn Liquidity fund was £18.3bn in size at 31st December2024, had a weighted average maturity of 48 days and provided a Gross 30-day annualised yield of 4.87% in December.

13. Trade and other payables

2024

2023

£

£

Trade and other payables

6.860,858

7,023,461

VAT payable

-

656,894

Deferred rental income

-

6,038,976

Rental deposits due to tenants

-

299,124

6,860,858

14,018,455

Trade and other payables are recognised at amortised cost. Trade payables are non-interest bearing and normally settled on 30-day terms.

14. Bank borrowings

2024

£

2023

£

Loan facility (including Rolling Credit Facility)

-

165,000,000

Drawn down outstanding balance

-

141,874,379

The Groups £165m debt facility with Royal Bank of Scotland International ('RBSI') was transferred as part of the sale of the subsidiaries on 29 November 2024. At the time of the disposal, £28.3m of the RCF was drawn (31 December 2023 £56.9m) in addition to the term loan of £85m.

2024

£

2023

£

Opening carrying value of expired facility as at 1 January

-

109,928,234

Borrowings during the period on expired RCF

-

25,000,000

Repayment of expired RCF

-

(25,000,000)

Repayment of expired facility

-

(110,000,000)

Amortisation arrangement costs

-

71,766

Closing carrying value of expired facility

-

-

Opening carrying value of new facility as at 1 January

141,251,910

(804,297)

Borrowings during the period on new RCF

13,300,000

63,000,000

Repayment of new RCF

(41,874,379)

(6,125,621)

New term loan facility

-

85,000,000

Elimination of RCF indebtedness on sale

(28,300,000)

-

Elimination of Term Loan indebtedness on sale

(85,000,000)

-

Eliminate residual unamortised arrangement costs on sale

377,952

-

Amortisation arrangement costs

244,517

181,828

Closing carrying value

-

141,251,910

Opening carrying value of facilities combined as at 1 January

141,251,910

109,123,937

Closing carrying value of facilities combined

-

141,251,910

2024

2023

£

£

Amortisation of arrangement costs (expired facility)

-

71,766

Amortisation of arrangement costs (new facility)

244,517

181,828

See Note 5

244,517

253,594

Analysis of movement in net debt

Cash and cash equivalents

£

Interest-bearing loans

£

2024

Net debt

£

Cash and cash equivalents

£

Interest-bearing loans

£

2023

Net debt

£

Opening balance

6,653,838

(141,251,910)

(134,598,072)

15,871,053

(109,123,937)

(93,252,884)

Cash movement

32,851,922

28,574,379

61,426,301

(9,217,215)

(31,874,379)

(41,091,594)

Elimination on sale

(2,850,594)

112,922,048

110,071,454

-

-

-

Amortisation of arrangement costs

-

(244,517)

(244,517)

-

(253,594)

(253,594)

Closing balance

36,655,166

-

36,655,166

6,653,838

(141,251,910)

(134,598,072)

All loan covenants were met during the year ended December 2024 and prior to the sale of the subsidiaries, further details relating to covenants have not been provided as they were complied with during the year and there were no covenants at the year-end.

2024

2023

£

£

Loan amount

-

141,874,379

Cash

-

(6,653,838)

-

135,220,541

Investment property valuation

10,000,000

439,185,037

LTV percentage

N/A

30.8%

The loan facility was 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.

15. Interest rate Swap and Cap

In order to mitigate any interest rate risk linked to their debt facilities, the Group's policy was to manage its cash flow using hedging instruments. The following hedging instruments were effective during the year:

15a Historic Interest Rate Swap

The Group had 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 was 28 April 2016 and had 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%.

2024

2023

£

£

Opening fair value of interest rate swaps at 1 January

-

1,238,197

Reclassification of interest accrual

-

(335,663)

Valuation (loss)/gain on interest rate swap

-

(902,534)

Reclassified to Profit & Loss

-

-

Closing fair value of interest rate swap at 31 December

-

-

15b 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 which would have expired in April 2026 at the same time as the loan facility.

2024

2023

£

£

Opening fair value of interest rate cap at 1 January

1,408,781

2,550,469

Net Change in fair value

(794,477)

(1,141,688)

Derecognition of Interest Rate Cap on disposal of subsidiary

(614,304)

-

Closing fair value of interest rate cap at 31 December

-

1,408,781

The change in fair value of the interest rate cap comprises fair value changes and interest received, paid and accrued.

2024

Cost of hedging

Cash flow hedge

Total

£

£

£

Opening fair value

625,276

783,505

1,408,781

Valuation (loss)/gain

(625,276)

871,254

245,978

Interest received

-

(1,040,455)

(1,040,455)

Net Change in fair value

(625,276)

(169,201)

(794,477)

Closing fair value of interest rate cap at 31 December

-

614,304

614,304

Less Closing Interest Accrual *

-

(82,903)

(82,903)

Adjusted fair value of interest rate cap at 31 December

-

531,401

531,401

Opening Adjusted fair value of interest rate cap at 1 January

625,276

783,505

1,408,781

Valuation (loss)/gain recognised on Adjusted Valuation

(625,276)

(252,104)

(877,380)

Net Change in fair value (as above)

(625,276)

(169,201)

(794,477)

Less Closing Interest Accrual (as above) *

-

(82,903)

(82,903)

Valuation (loss)/gain recognised on Adjusted Valuation

(625,276)

(252,104)

(877,380)

2024

Interest Rate Cap Reserves Reconciliation

Cost of hedging reserve

Cash flow hedge reserve

Total

£

£

£

Opening Reserve

(1,316,871)

570,245

(746,626)

Valuation (loss)/gain recognised on Adjusted Valuation

(625,276)

(252,104)

(877,380)

Less Prior accrual

-

213,260

213,260

Amortisation of Premium (See Note 5)

762,904

-

762,904

Valuation loss as recognised in Other Comprehensive Income

137,628

(38,844)

98,784

Derecognition of residual premium

1,179,243

-

1,179,243

Derecognition of residual value

-

(531,401)

(531,401)

Closing Reserve

-

-

-

* As the valuation of the interest rate cap includes a valuation attributable to the unsettled interest (due to 21st January) a separate accrual has not been recorded in the balance sheet. Instead, this represents a recycling of the change in Other Comprehensive Income for the Cash flow hedge to Finance Cost.

2023

Cost of hedging

Cash flow hedge

Total

£

£

£

Opening fair value

1,779,151

771,318

2,550,469

Valuation (loss)/gain

(1,153,875)

377,860

(776,015)

Interest received

-

(365,673)

(365,673)

Net Change in fair value

(1,153,875)

12,187

(1,141,688)

Closing fair value of interest rate cap at 31 December

625,276

783,505

1,408,781

Less Closing Interest Accrual *

-

(213,260)

(213,260)

Adjusted fair value of interest rate cap at 31 December

625,276

570,245

1,195,521

Opening Adjusted fair value of interest rate cap at 1 January

1,779,151

771,318

2,550,469

Valuation (loss)/gain recognised on Adjusted Valuation

(1,153,875)

(201,073)

(1,354,948)

Net Change in fair value (as above)

(1,153,875)

12,187

(1,141,688)

Less Closing Interest Accrual (as above) *

-

(213,260)

(213,260)

Valuation (loss)/gain recognised on Adjusted Valuation

(1,153,875)

(201,073)

(1,354,948)

2023

Interest Rate Cap Reserves Reconciliation

Cost of hedging reserve

Cash flow hedge reserve

Total

£

£

£

Opening Reserve

(728,026)

771,318

43,292

Valuation (loss)/gain recognised on Adjusted Valuation

(1,153,875)

(201,073)

(1,354,948)

Amortisation of Premium (See Note 5)

565,030

-

565,030

Valuation gain as recognised in Other Comprehensive Income

(588,945)

(201,073)

(789,918)

Closing Reserve

(1,316,871)

570,245

(746,626)

The Interest associated with the cap recognised as an offset against Finance Cost is summarised below:

2024

2023

£

£

Interest received

1,040,455

365,673

Closing Interest Accrual

82,903

213,260

Less Interest Accrued from prior year

(213,260)

-

Receipt on interest rate caps (see Note 5)

910,098

578,933

The spilt of the interest rate cap is listed below:

2024

2023

£

£

Current assets/(liabilities)

-

849,110

Non-current assets/(liabilities)

-

559,671

Interest rate cap with a start date of 27 April 2023 maturing on 26 April 2026

-

1,408,781

16. Obligations under Finance Leases

Minimum lease

payments

Interest

Present value of

minimum lease

payments

2023

2023

2023

£

£

£

Less than one year

52,450

(49,202)

3,248

Between two and five years

209,800

(195,892)

13,908

More than five years

5,140,100

(3,347,135)

1,792,965

Total

5,402,350

(3,592,229)

1,810,121

The above table shows the historic present value of future lease payments in relation to the ground lease payable at Hagley Road, Birmingham as required under IFRS 16. Following the disposal of the subsidiaries on 29 November, this Group is no longer exposed to ground leases. A corresponding asset was historically recognised and was part of Investment properties as shown in note 7.

17. Lease analysis

The Group had historically granted leases on its property portfolio. As at 31 December 2024, the Company no longer had active leases with tenants.

Future minimum rentals receivable under non-cancellable operating leases as at 31 December are as follows:

2024

2023

£

£

Within one year

-

27,137,392

Between one and two years

-

22,839,051

Between two and three years

-

19,036,836

Between three and four years

-

14,949,198

Between four and five years

-

12,718,074

More than 5 years

-

78,172,826

Total

-

174,853,377

As at the year-end, the Company had no tenants - in the prior year, the largest single tenant at the year-end accounted for 5.7% of the annual passing rent prevailing at the time.

18. 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 2024 there were 381,218,977 ordinary shares of 1p each in issue (2023: 381,218,977). All ordinary shares rank equally for dividends and distributions and carry one vote each (as noted below, these shares no longer carry the right to vote on voluntary winding up of the Company). 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

2023

£

£

Opening balance

228,383,857

228,383,857

Shares issued

-

-

Closing balance

228,383,857

228,383857

Redeemable Bonus Shares

Following the disposal of the Group's subsidiaries on 29 November 2024, the Company issued to Shareholders a recommended proposal for adoption of a Redeemable Bonus Share Scheme to return capital to Shareholders as efficiently as possible. The proposal noted that each API Shareholder would receive 1 Redeemable Bonus Share for each API Share they held, which would then be immediately redeemed for a cash payment equal to the redemption price (noted as 52p). On 17 December 2024, Shareholders voted in favour of this motion and the redemption and cancellation of these shares occurred on 19 December 2024, with proceeds subsequently being returned to Shareholders on 24 December 2024.

2024

2023

£

£

Opening balance

-

-

Shares redeemed during the year

198,233,868

-

Closing balance

198,233,868

-

Winding Up Shares

As previously announced, the Board intends that the Company is placed into voluntary winding up at an appropriate time with the exact timing of being dependent on a number of factors, which may include progress with the sale of Far Ralia. Placing the Company into Voluntary Winding Up would normally require the approval of Shareholders at the General Meeting. However, to prevent the need for a further General Meeting, and because Guernsey law does not allow liquidators to be appointed on a conditional basis, a proposal was put to Shareholders to amend the Company's Articles of Incorporation to allow for the creation and issue of a new class of share. The intention was for one such share to be issued at some point in the future to a director of the Company, with the share given the sole right to vote on the voluntary winding up of the Company; the proposal noted that the change to the articles would also remove the right of API ordinary shares to vote at such a meeting.

On 17 December 2024, Shareholders voted in favour of this motion however as at 31 December 2024 such a share has yet been issued.

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 2024 no shares had been bought back (2023: nil) at a cost of £nil (2023: £nil) and are included in the Treasury share reserve.

2024

2023

£

£

Opening balance

18,400,876

18,400,876

Bought back during the year

-

-

Closing balance

18,400,876

18,400,876

The number of shares in issue as at 31 December 2024/2023 are as follows

2024

2023

Number of shares

Number of shares

Opening balance

381,218,977

381,218,977

Issue of Redeemable Bonus Share

381,218,977

-

Redemption / cancellation of Redeemable Bonus Shares

(381,218,977)

-

Closing balance

381,218,977

381,218,977

19. Reserves

The detailed movement of the below reserves for the years to 31 December 2024 and 31 December 2023 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.

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.

20. Earnings per share

Basic earnings per share amounts are calculated by dividing profit/loss 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.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

2024

2023

£

£

Loss for the year net of tax

(42,894,200)

(8,267,901)

2024

2023

Weighted average number of ordinary shares outstanding during the year

381,218,977

381,218,977

Loss per ordinary share (pence)

(11.25)

(2.17)

Profit for the year excluding capital items (£)

7,011,154

10,824,203


21. Dividends and Property Income Distributions Gross of Income Tax

12 months to Dec 24

12 months to Dec 23

Dividends

PID

pence

Non-PID

pence

Total

Pence

PID

£

Non-PID

£

PID

pence

Non-PID

pence

Total

Pence

PID

£

Non-PID

£

Quarter to 31 December of prior year (paid in February)

0.3980

0.6020

1.0000

1,517,252

2,294,938

-

1.0000

1.0000

-

3,812,190

Quarter to 31 March (paid in May)

1.0000

-

1.0000

3,812,190

-

1.0000

-

1.0000

3,812,190

-

Quarter to 30 June (paid in August)

0.4500

0.5500

1.0000

1,715,485

2,096,705

1.0000

-

1.0000

3,812,190

-

Quarter to 30 September (paid in November)

0.3000

0.7000

1.0000

1,143,657

2,668,533

-

1.0000

1.0000

-

3,812,190

Total dividends paid

2.1480

1.8520

4.0000

8,188,584

7,060,176

2.0000

2.0000

4.0000

7,624,380

7,624,380

Quarter to 31 December of current year (paid after year end)

-

-

-

-

-

0.3980

0.6020

1.0000

1,517,252

2,294,938

Distribution on exiting REIT regime (paid after year end)

3.0000

-

3.0000

11,436,569

-

-

-

-

-

-

Prior year dividends (per above)

(0.3980)

(0.6020)

(1.0000)

(1,517,252)

(2,294,938)

-

(1.0000)

(1.0000)

-

(3,812,190)

Total dividends paid for the year

4.7500

1.2500

6.0000

18,107,901

4,765,238

2.3980

1.6020

4.0000

9,141,632

6,107,128

On 10 January 2025 a dividend of 3.0 pence per share was paid as a Property Income Distribution. This was in respect of the Group leaving the UK REIT regime and represented an initial payment to ensure 100% of all historic Property Income was fully distributed; while a member of the UK REIT regime, the Company was required to distribute at least 90% and this initial payment was representative of the accumulation of retained Property Income where the Company distributed between 90 and 100%.

22. Reconciliation of Audited Consolidated NAV to Unaudited Published NAV

The NAV attributable to ordinary shares is published quarterly and is based on the most recent valuation of the investment properties.

2024

2023

Number of ordinary shares at the reporting date

381,218,977

381,218,977

2024

2023

£

£

Total equity per audited consolidated financial statements

30,363,831

298,078,443

NAV per share (p)

8.0

78.2

Published NAV per share (p)

8.0

78.4

The variance between the unaudited published NAV and audited consolidated NAV recorded in 2023 of 0.2p per share represents the recognition of fees associated with the strategic review and proposed merger, the identification of a backdated rent review post publication but agreed prior to year-end, and the recognition of accrued grant income not yet received.

23. Related Party Disclosures

Directors' remuneration

The Directors of the Company are deemed as key management personnel and received fees for their services. Total fees for the year were £389,757 (2023: £239,436) none of which remained payable at the year-end (2023: nil).

abrdn Fund Managers Limited, as the Manager of the Group from 10 December 2018, (formerly Aberdeen Standard Fund Managers Limited), received fees for their services as investment managers. Further details are provided in note 4.

2024

2023

£

£

Mike Balfour

46,000

41,500

Mike Bane

40,000

37,000

James Clifton-Brown

55,000

50,000

Jill May

42,500

37,000

Sarah Slater

40,000

37,000

One-off fee*

110,000

-

Employers' national insurance contributions

41,746

23,735

375,246

226,235

Directors' expenses

14,511

13,201

389,757

239,436

* As noted in the Directors' Remuneration Report in the full Annual Accounts, each Director received a one-off fee of £20,000 with the Former Chair receiving £30,000 to partially reflect the additional work performed.

Distributions from Subsidiaries

While part of the Group, the Company received £21.1m by way of distributions from its immediate wholly owned subsidiary abrdn Property Holdings Limited (2023: £16.3m).

24. 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.

25. Non-Going Concern adjustment for estimated costs of disposal of property portfolio

As explained in note 2 the Group's financial statements are no longer prepared on a going concern basis. The Board have assessed the consequences of this and the decision made in May 2024 to realise the Group's portfolio of assets and return the proceeds to shareholders. The Board concluded that it was appropriate to accrue for the estimated costs of disposal and reduce the fair market value of investment property and land by this amount.

Investment Properties

Investment Properties

Held for Sale

Land

Total

£

£

£

£

Market Value

-

-

10,000,000

10,000,000

Assumed average sales costs of 1.25%

-

-

(125,000)

(125,000)

Aberdeen disposal fee

-

-

(40,000)

(40,000)

Estimated disposal costs

-

-

(165,000)

(165,000)

Carrying Value

-

-

9,835,000

9,835,000

The assumed rate of 1.25% in the table above represents the best estimate of a reasonable sales cost for Far Ralia. The Aberdeen disposal fee has been calculated in accordance with the terms of the revised IMA as explained in note 4a. As part of their consideration of adopting a basis other than that of a going concern, the Board have also considered the potential impact on comparatives. As noted below, as at 31st December 2023 5 assets valued at £35.1m were deemed 'held for sale' which would have been impaired by £579,150 (0.15p per share) if adopting a similar methodology; at the time, the remaining portfolio and Land were not held for sale.

Investment Properties

Investment Properties

Held for Sale

Land

Total

£

£

£

£

Market Value

395,835,037

35,100,000

8,250,000

439,185,037

Assumed average sales costs of 1.25%

(4,947,938)

(438,750)

(103,125)

(5,489,813)

Aberdeen disposal fee

(1,583,340)

(140,400)

(33,000)

(1,756,740)

Estimated disposal costs

(6,531,278)

(579,150)

(136,125)

(7,246,553)

Carrying Value

389,303,759

34,520,850

8,113,875

431,938,484

As detailed in note 2, the Investment portfolio (which consisted of the remaining portfolio following the disposal of 6 assets during 2024) was sold as a single transaction to GoldenTree Asset Management LP for a gross consideration of £351m. Due to the disposal occurring as a single transaction, cost savings were achieved, and the resultant disposal fees (recognised as part of the realised loss) were £5.2m and were accrued at year end and included within trade and other payables.

26. Commitments and Contingent Liabilities

The Company had no contracted capital commitments as at 31 December 2024 (31 December 2023: £2.4 million).

As discussed in note 4, following the Shareholder vote to place the Group into a Managed Wind-Down, a new agreement with the Investment Manager was signed effective 31 May 2024. As part of this agreement, the Investment Manager is entitled to an Incentive Fee payable following the sale of the final investment. This fee is only payable if the Gross Disposal Proceeds are equivalent to not less than 90% (£366,651,000) of the May 2024 Portfolio Value (£407,390,000) and all assets are disposed of prior to 28 November 2025.

Following the sale of the Group's subsidiaries on 29th November, the cumulative Gross Disposal Proceeds (which excludes Far Ralia) was £364,775,000. As such, if Far Ralia is sold prior to 28 November 2025 the Gross Disposal Price needs to be in excess of £1,876,000 for the Investment Manager to be entitled to a fee of 0.05% of the ultimate Gross Disposal Proceeds - increasing to 0.10% if sold prior to 28 May 2025. However, if there are delays in the sale of Far Ralia and the interest in the land is not sold until after the 28 November 2025 date, the Investment Manager would not receive any additional fee regardless of the value achieved.

Threshold

Valuation

£

£

Cumulative Gross Disposal Proceeds (to date)

364,775,000

364,775,000

Theoretical Gross Disposal Proceeds of Far Ralia

1,876,000

10,000,000

Theoretical Gross Disposal Proceeds of May 2024 Portfolio

366,651,000

374,775,000

Incentive Fee

Incentive Fee

£

£

Sold after 28 November 2025 (0.00%)

-

-

Sold prior to 28 November 2025 (0.05%)

183,326

187,388

Sold prior to 28 May 2025 (0.10%)

366,651

374,775

As detailed further in note 4a, the Investment Manager receives a Disposal fee of 0.4% of the Gross Disposal Price.

Given that the fee is dependent on the timing of the future sale of Far Ralia, neither the Disposal nor Incentive Fees have been accrued in the results as at 31 December 2024.

27. Events after the balance sheet date

Dividends

On 10 January 2025 a dividend of 3.0 pence per share was paid as a Property Income Distribution representing the first payment out of the accumulated undistributed income of the Group's UK property rental business ("Property Income"). This accumulated income has arisen because historic PIDs have been between 90% (as required by REIT rules) and 100% of Property Income. The amount of the remaining undistributed Property Income is dependent on the completion of negotiations with GoldenTree and various recoveries from former tenants.

This Annual Financial Report announcement is not the Company's statutory accounts for the year ended 31 December 2024. The statutory accounts for the year ended 31 December 2024 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: 01481 745001
Fax: 01481 745051

Jason Baggaley - Real Estate Fund Manager, Aberdeen

Tel: 07801039463 or jason.baggaley@aberdeenplc.com

Mark Blyth - Real Estate Deputy Fund Manager, Aberdeen

Tel: 07703695490 or mark.blyth@aberdeenplc.com

Craig Gregor - Fund Controller, Aberdeen

Tel: 07789676852 or craig.gregor@aberdeenplc.com




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