Interim Results - 6 Months to 30 September 1999

TR Property Investment Trust PLC 26 November 1999 Unaudited interim results for the half year ended 30 September 1999 Group Financial Highlights Half year Half year ended ended 30 30 September September 1999 1998 (Unaudited) (Unaudited) £'000 £'000 Gross revenue 7,112 7,269 Revenue pre-tax 4,687 4,934 Pence Pence per share per share Revenue return 0.79 0.77 Capital return 5.77 (8.72) Total return 6.56 (7.95) Dividend (net) 0.52 0.50 Net asset value - basic 58.96 47.25 - fully diluted 57.05 n/a Share price at 30 September 46.00 37.00 FTSE Real Estate Index at 30 1977 1867 September Performance over half year % % NAV total return 9.8 (13.8) Share price total return * 8.3 (22.0) Total return from quoted 12.0 (17.1) securities * FTSE Real Estate Index total 3.9 (20.4) return * Total return from direct 9.1 4.2 property * IPD Monthly Index total 7.5 7.1 return * * Source : WM Company/Datastream TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 1999 Chairman's Statement Performance Summary I am pleased to report the results of the half year to 30 September 1999. During the period diluted net assets per share rose by 9.8% from 51.98p per share to 57.05p per share. This compares with a rise of 3.9% shown by our benchmark, the FTSE Real Estate Index and with a fall of 2.4% shown by the FTSE All Share Index. The UK commercial property market remains buoyant. Property shares outperformed general equities over the summer, but their performance was somewhat lacklustre when set against the strong industry background. In fact average discounts to debt-adjusted asset values rose quite sharply from some 5% to 12% between March and September. Over the six month period there were no radical changes to the spread of the Trust's gross assets with UK property shares continuing to form a little over 70% of the total portfolio and directly held property between 20% and 25%. Equally the list of our largest investments has shown only minor changes. The equity element of the portfolio remains underweight in the largest companies in the sector and correspondingly overweight in the medium sized companies. Our direct property portfolio was externally revalued at the end of September and showed a value uplift of 3.3% and a total return over the six months of 9.1%. We sold industrial properties at Oxted and Greenwich for an aggregate £4.6m (and a surplus over book value of 10%) and bought two storage buildings in Croydon and Richmond also for an aggregate £4.6m. These purchases are both leased to The Big Yellow Self Storage Company Ltd. - an unquoted company in which we hold a 26% equity interest. The Big Yellow's business continues to thrive and our equity investment has been revalued at September to show a useful gain. Since the end of September we have sold properties in Cambridge and in Dover Street, London W1 for an aggregate of £4.55m to show a surplus of 21% over the external valuation in September. Earnings and Dividends The Group financial highlights table shows the current and comparative half year figures. The board has declared an interim dividend of 0.52p per share, an increase of 0.2p or 4.0% over last year's interim payment. Share Repurchases and Discount The board welcomes the recent initiatives by the investment trust industry to address the problem of discounts to asset value. We have given financial support to the 'its' advertising campaign and we took the opportunity in September to buy back 1.75m shares at a cost of £0.8m. We will continue to use our buy-back powers judiciously subject to market conditions. TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 1999 Outlook The UK direct property market remains lively with strong investor interest and buoyant tenant demand notably in the South East of England. We expect physical real estate to show an ungeared double digit total return again next year. Meanwhile property share prices have corrected since the end of September pushing average debt adjusted discounts out to 15% - at which level property shares are clearly undervalued relative to their underlying assets. If this discount level persists then the year 2000 promises to be a fascinating one with further corporate activity likely in the sector and an increase in the moves by companies to enhance value for their shareholders. W G Cochrane Chairman 25 November 1999 TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 1999 Group Statement of Total Return (Incorporating the Revenue Account) for the half year ended 30 September 1999 (Unaudited) (Unaudited) Half year ended Half year ended 30 September 1999 30 September 1998 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital gains/(losses) from - 28,377 28,377 - (40,006)(40,006) investments Income from investments Franked and unfranked 4,183 - 4,183 3,597 - 3,597 investment income Net rental income 2,610 - 2,610 3,214 - 3,214 ------ ------ ------ ------ ------ ------ 6,793 28,377 35,170 6,811 (40,006)(33,195) Interest receivable and 319 - 319 458 - 458 similar income ------ ------ ------ ------ ------ ------ Gross revenue and capital 7,112 28,377 35,489 7,269 (40,006)(32,737) gains/(losses) Management fee (826) (405) (1,231) (742) (365) (1,107) Other administrative (382) - (382) (426) - (426) expenses ------ ------ ------ ------ ------ ------ Net return on ordinary activities before interest 5,904 27,972 33,876 6,101 (40,371)(34,270) payable and taxation Interest payable and (1,217) (1,217) (2,434) (1,167) (1,167) (2,334) similar charges ------ ------ ------ ------ ------ ------ Net return on ordinary activities 4,687 26,755 31,442 4,934 (41,538)(36,604) before taxation Taxation on net return on ordinary activities (897) 487 (410) (1,299) 475 (824) ------ ------ ------ ----- ----- ----- Net return on ordinary activities after 3,790 27,242 31,302 3,635 (41,063)(37,428) taxation Equity minority interests (48) (88) (136) (21) - (21) ------ ------ ------ ------ ------ ------ Net return attributable 3,742 27,154 30,896 3,614 (41,063) (37,449) to ordinary shares Ordinary dividends paid and proposed Interim ordinary of 0.52p (2,440) - (2,440) (2,354) - (2,354) (1998: 0.50p) ------ ------ ------ ------ ------ ------ Transfer to reserves 1,302 27,154 28,456 1,260 (41,063)(39,803) ====== ====== ====== ====== ====== ====== Return per ordinary share - basic 0.79p 5.77p 6.56p 0.77p (8.72)p (7.95)p - fully diluted n/a n/a n/a n/a n/a n/a The revenue columns of this statement represent the revenue accounts of the Group. TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 1999 Summary of Group Net Assets at 30 September 1999 Half year Half year Year ended ended ended 30 30 31 September September March 1999 1998 1999 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Valuation of investments : Shares and securities 269,017 178,612 224,953 Investment properties 74,168 87,810 71,220 Net current (22,904) 592 (3,673) (liabilities)/assets ---------- ----------- ----------- Total assets less current 320,281 267,014 292,500 liabilities Long term creditors and (43,659) (44,548) (43,561) minority interests ---------- ----------- ----------- Equity shareholders' funds 276,622 222,466 248,939 ======= ======= ======= Net asset value per share: basic 58.96p 47.25p 52.87p fully diluted 57.05p n/a 51.98p Number of ordinary shares 469,173,222 470,865,074 470,865,074 in issue Number of warrants in 93,783,392 93,841,540 93,841,540 issue Notes 1. Non Statutory Accounts The above financial information does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the year ended 31 March 1999 is an extract from the latest published statutory accounts of the Group. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 237(2) or 237(3) of the Companies Act 1985. 2. Basis of Preparation The financial information for the period to 30 September 1999 has been prepared on the basis of the accounting policies set out in the latest published statutory accounts. 3. Interim Report The interim report was approved by the Board on 25 November 1999 and copies are available from the Secretary at the Registered Office, 3 Finsbury Avenue, London EC2M 2PA. 4. Net Asset Value per Ordinary Share Dilution is assumed to occur when the diluted net asset value is greater than the warrant conversion price of 47.50 pence per share. 5. Shares in Issue The number of ordinary shares in issue at 30 September 1999 has decreased due to the repurchases of 750,000 shares at 45.50p per share on 24 September 1999 and 1,000,000 shares at 45.75p per share on 28 September 1999. There was an issue of 58,148 shares upon the exercise of warrants in July 1999. TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 1999 6. Year 2000 Henderson plc and its subsidiaries ('Henderson'), which provide investment management, UK custodial, accounting, administrative and company secretarial services to TR Property Investment Trust plc, has instigated a corporate action programme, under Henderson board supervision, to establish the precise scope of the risks posed to TR Property Investment Trust plc by the consequences of the Year 2000 date change and to address those risks. Henderson's strategy is to validate that its computer systems achieve Year 2000 conformity (as defined by the British Standards Institute in its paper DISC PD2000- 1), and to require both its suppliers and the suppliers to TR Property Investment Trust plc to ensure that their computer systems achieve the same or an equivalent standard. Costs relating to the Year 2000 project are to be borne by Henderson. Henderson have also undertaken a programme to establish the extent of the risks posed to the Group by the Year 2000 date change in respect of its directly owned property investments. An ongoing audit and risk assessment programme is being carried out by specialist external consultants. This will be subject to a Quality Assurance review on some of the multi let properties. By the end of the third quarter 1999, the managing agents had in place Year 2000 contingency plans with respect to the Group's directly owned property investments. The testing of the safety systems was also completed by the end of this period and was carried out in accordance with the Health and Safety Executive guidance on testing of safety systems. Costs of this work are generally recoverable through the tenant's service charge. TR PROPERTY INVESTMENT TRUST PLC Unaudited interim results for the half year ended 30 September 1999 Largest Quoted Investments at 30 September 1999 Market value Market value £'000 £'000 Slough Estates 18,568 Grantchester 3,760 British Land 17,149 Asda Properties 3,737 Helical Bar 14,400 Quintain Estates 3,444 Land Securities 12,702 Burford 3,278 Chelsfield 12,029 London Merchant 3,261 Liberty International 9,226 Rugby Estates 2,960 Hammerson 8,640 Brixton Estate 2,631 Compco 8,108 Unibail (French) 2,599 MEPC 8,059 Jermyn Investments 2,590 Pillar Properties 8,016 Minerva 2,574 Freeport Leisure 7,958 Safestore (AIM) 2,502 Derwent Valley 7,952 Green Property 2,413 St Modwen 7,720 BPT 2,325 Benchmark 6,812 Great Portland 2,272 Frogmore 6,736 Milner Estates 2,222 Dencora 5,872 NHP 2,063 Capital and Regional 5,442 Grainger Trust 1,987 Capital Shopping 4,818 Wates City of London 1,914 Ashtenne 4,457 Smith (James) Estates 1,690 Development Securities 4,439 Safeland 1,675 Listed in the UK except as shown in brackets. The above 40 largest quoted investments amount to £231m or 67.3% of total investments (convertibles and all classes of equities in any one company are treated as one investment). The Group's only unquoted investment with a value in excess of £2m is its holding in The Big Yellow Self Storage Ltd., which was valued by the directors at £5,036,000 as at 30 September 1999, equivalent to 1.5% of total investments. Principal Investment Properties at 30 September 1999 Location Type Tenure Size sq/ft Valued in excess of £5m 198/202 Piccadilly, London Retail & Leasehold 62,944 W1 Office 29/30 St. James's Street, Retail & Leasehold 29,200 London SW1 Office West Reading Retail Park, Retail Freehold 56,400 Theale Warehouses Elizabeth House, Duke Office Freehold 54,100 Street, Woking Valued between £2m and £5m HQ3, Hook Rise, Tolworth Warehousing Freehold 56,100 The Colonnades, Bishops Retail, Office Leasehold 43,500* Bridge Road, & Residential London W2 The Quay, Ocean Village, Office Virtual 23,100 Southampton Freehold Southbank Commercial Office Freehold 49,000 Centre, London SW11 202/216 Thornton Road, Self Storage Freehold 55,000 Croydon 8/9 Dover Street, London Retail Freehold 5,000 W1 The above principal direct property investments amount to £61.8m or 18.0% of total investments. Valued at under £2m At 30 September 1999 the Group owned 8 further commercial properties with individual values of under £2m. * Commercial element only For further information, please contact: Chris Turner, Vicki Staveacre TR Property Investment Trust PLC The Press Office, Henderson Investors Tel: 020 7410 4348 Tel: 020 7410 4222 Stephen Westwood, Henderson Investors Gareth David, College Hill Associates Tel: 020 7477 5517 Tel: 020 7457 2020

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