Portfolio Overview

Company Performance

The principal financial outcome that the Board seeks to achieve is attractive growth in shareholder returns. Progress towards this objective is specifically measured through Total Accounting Return, which represents growth in EPRA NAV per share plus any distributions paid. EPRA NAV per share is a measure of the fair value of a property company on a long term basis, ignoring the impact of hedging valuations and any deferred tax. Chart 1 indicates the growth of EPRA NAV per share plus distributions since flotation.

Chart 1 – SIR Total Accounting Return

Historic total returns are analysed in the Total Returns section of the Investor Centre

The track record of the Investment Manager, Prestbury is concentrated principally within three listed real estate companies, Max Property Group Plc, Prestbury Group Plc and Burford Holdings Plc, one unlisted fund (Prestbury 1 LP) and several private joint ventures over the last 30 years.

Max Property Group Plc

Max was listed in May 2009 in the midst of the market crash as an opportunistic property investment company.

Listed on AIM, it raised £211 million net of expenses, with a strategy to invest at a time of market distress and to realise returns over a limited life of c.7.5 years.

The company generated average annual NAV total returns of 17.1% over the period from Jun-2009 to Sep-2014. The company was sold to funds managed by Blackstone in August 2014 in a transaction that valued equity of the group, before exit costs at £447.7 million, equivalent to an enterprise value of more than £650 million.

Max Property Group Plc – Average Total Return of 17.1% p.a. (May 2009 – Sep 2014) vs.Peer Group

Data periods and sources are provided below¹
Past performance is not a reliable indicator of future results

Prestbury Group Plc

An AIM listed property investment company established by Nick Leslau and Sandy Gumm in late 1997.

The company’s business strategy was to generate above average growth in Net Asset Value per share through opportunistic investment in, and active management of real estate.

From December 1997 to December 2003, Prestbury Group Plc achieved average annual total cash returns of over 25%. Prestbury was delisted in October 2000 to unlock share price discount at the time of a tech-boom, returning to shareholders 9.6% of value in excess of the NAV per share at the time of de-listing.

Prestbury Group Plc – Average Annual NAV growth plus dividends²

Past performance is not a reliable indicator of future results
De listing and disposal of majority of portfolio

Burford Holdings Plc

A property investment group listed in 1987 and led by Nick Leslau until 1997.

The business focused on growth in Net Asset Value per share and generated average annual total returns of 34% from its listing in March 1987 until December 1997.

Burford was de-geared in 1988 to position it with net cash in anticipation of the real estate crash that materialised in the early 1990’s. The company was able to take advantage of the opportunities presented by a market in turmoil, delivering substantial returns for shareholders.

Burford Holdings Plc – Total Returns of 34% p.a. (1987 – 1997)

Past performance is not a reliable indicator of future results

¹Sources: Data compiled from company announcements and annual reports over the following periods: Max Property Group Plc (May 2009 to September 2014); London & Stamford Property Plc (May 2009 to September 2012); Metric Property Investments Plc (March 2010 to September 2012); LXB Retail Properties Plc (October 2009 to September 2014); LondonMetric Property Plc (January 2013 to September 2014); New River Retail Ltd (September 2009 to September 2014); and Conygar Investment Company Plc (May 2009 – September 2014). LondonMetric Property Plc was not listed as a cash shell but created through the merger of London & Stamford Property Plc and Metric Property Investments Plc which were listed in 2007 and 2010 respectively.