2016
Capitalise on Market Opportunities
6.7%

Antelope Park, Southampton. Acquired December 2016 at net initial yield of 6.7% (£23 million). We immediately sold adjacent unit which lay just
outside the park (let to Jewsons) for a net initial yield of 5.25% – illustrating bifurcation in market following Brexit vote.

Event:

  • Bifurcation of commercial property market following Brexit vote of June 2016 – institutional investors became less active, resulting in reduced investment competition for larger lot sizes.

Opportunity:

  • To invest in institutional property.

Fprop Response:

  • To recommend to Shipbuilding Industries Pension Scheme (SIPS), for which we were investing at the time, that it increase its investment commitment to take advantage
    of reduced commercial property prices.

Result:

  • SIPS increased its commitment by £45 million, increasing its total commitment to £170 million.
2013
Capitalise on Market Opportunities
£18.3m

Union Park, West Drayton. Acquired August 2014 for £7.8 million, sold March 2015 for £18.3 million.

Event:

  • Amendment to Permitted Development Rights (PDR).

Opportunity:

  • To convert offices to residential use without the requirement to obtain formal planning consent.

Fprop Response:

  • To establish a £42 million fund to invest in offices eligible for conversion to residential use utilising PDR.

Result:

  • The fund earned a net return on equity to its investors of 53% and an IRR of 98% – all without the use of leverage. In the process it enabled the conversion of 360,000 ft2 of office space into 665 flats across the UK, worth a total of some £100 million; around a third of these properties were sold to Housing Associations.
2009
Delivering Sustainable Income
Capitalise on market Opportunities

Event:

  • Nadir of credit crunch: UK commercial property values had fallen c50%.

Opportunity:

  • Return to investment in UK.

Fprop Response:

  • To establish a new UK fund (£106 million).

Result:

  • Earned recession-resilient high income returns for our fund
  • Investors have extended life of fund.
2008
2005
Remain consistently flexible

Event:

  • Dramatic increase in property values from 2001. “As many Shareholders will be aware, the commercial property investment market in the UK has risen sharply over the last few years and a large proportion of properties for sale are, in our view, overvalued. (extract from our 2005 Annual Report and Accounts).

Opportunity:

  • Sell!

Fprop Response:

  • Largely exited the UK commercial property market; commenced investment in Poland.

Result:

  • Capital preservation.
Active Approach to Asset Management

Event:

  • Credit crunch had not yet reached CEE.

Opportunity:

  • Prepare for its arrival.

Fprop Response:

  • Reversed our asset management policy of waiting until lease expiry to renew leases.

Result:

  • >70% (by value) of leases extended beyond 2012 with rents increased by some 3% pa across our portfolio.