henderson uk property oeic - … · henderson uk property oeic is governed by the ... retail scheme...

76
ANNUAL REPORT & ACCOUNTS Henderson UK Property OEIC For the period from 29 August 2014 to 31 May 2015

Upload: phungthuy

Post on 01-Sep-2018

235 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

AN

NUA

L RE

PORT

&

AC

CO

UN

TS

Henderson UK Property OEIC

For the period from29 August 2014 to 31 May 2015

Page 2: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the
Page 3: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson is an independent global asset manager, specialising in active investment. Named after its first client and founded in 1934, Henderson is a client-focused global business with over 900 employees worldwide and assets under management of £89.4bn† (31 March 2015). Its core areas of investment expertise are European equities, global equities, global fixed income, multi-asset and alternatives.

Whilst the global headquarters are based in London, Henderson offers clients access to all major markets around the globe. Henderson has offices located in Chicago, Hartford, Milwaukee, Philadelphia, Edinburgh, Paris, Madrid, Zurich, Luxembourg, Amsterdam, Frankfurt, Milan, Vienna, Singapore, Beijing, Hong Kong, Tokyo and Sydney. The main Asia/Pacific operations are conducted out of Singapore and the US operations out of Chicago and Milwaukee. Equity investment professionals are also located in Edinburgh and Singapore and additional fixed income investment professionals are located in Philadelphia and Milwaukee. Distribution is conducted out of the majority of offices world-wide.

Clients are at the heart of everything Henderson does – named after the company’s first client, it reminds each employee every day to put the client first. With investment expertise across a broad range of asset classes, Henderson’s investment managers have unique perspectives and operate unconstrained by a house view. Underpinning the fund management process is a comprehensive risk-control framework ensuring that investment views are translated into portfolios managed in line with investors risk and return requirements.

Corporate strategyHenderson’s strategy focuses on growth and globalisation. The company aims to deliver a sustained period of organic growth, attracting net new client money ahead of industry growth, and supplementing this organic growth with value accretive acquisitions. By 2018, Henderson will have established a truly global footprint, infrastructure and mind-set.

AcquisitionsHenderson has a strong history of acquiring businesses which add value to the company over time. Henderson has seen financial benefits from New Star and Gartmore (acquired in 2009 and 2011 respectively) in cost synergies and improved profitability. During 2014, client confidence in the newly integrated businesses manifested itself in increased flows, with over half of flows in the period coming from products or managers who joined Henderson as a result of these acquisitions.

In 2014, Henderson acquired Geneva Capital Management, the US growth equity manager. This marked an important strategic milestone in the development of the North American business, adding mid- and small-cap US high quality growth equities to Henderson’s international capabilities and extending the US institutional client base to an existing strong US retail presence.

In April 2015, Henderson decided to sell its 40% holding in TIAA Henderson Real Estate (“TH Real Estate”) – a joint venture formed in 2014 with the merger of Henderson and Teachers Insurance and Annuity Association – College Retirement Equities Fund’s (“TIAA-CREF”) European and Asian real estate businesses. The decision to sell the stake gives TH Real Estate the best opportunity to grow their business and rewarded Henderson and its shareholders for the significant contribution made before and after the creation of TH Real Estate.

In June 2015, Henderson announced the acquisition of two Australian-based fund management boutiques, Perennial Fixed Interest and Perennial Growth Management. In a separate transaction, Henderson increased its ownership of 90 West Asset Management to 100%. The acquisitions accelerate Henderson’s strategy to grow and globalise its business, extending Henderson’s offering to Australian clients, adding domestic investment management capabilities to Henderson’s globally focused offerings, and providing a broader platform for better growth in the Australian market.

Please remember that past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested.

What do we do?At Henderson Global Investors we do one thing and we do it really well – investment management. As a company, we are totally focused on this core activity and it underpins everything we do.

We do this by providing a range of investment products and services including:• Open ended funds – offshore funds, unit trusts, OEICs• Investment trusts• Individual Savings Accounts• Pension fund management• Management of portfolios for UK and international institutional clients

† Source: Henderson Global Investors

Who are Henderson Global Investors?

Page 4: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Contents

Authorised Corporate Director’s (ACD) Report* Page 1

Authorised status* Page 1

Table of property investments* Page 7

Comparative tables Page 40

Real estate expense ratio and ongoing charge figure Page 42

Risk & reward profile* Page 43

Portfolio statement* Page 44

Statement of Authorised Corporate Director’s (ACD) responsibilities Page 48

Report of the Depositary to the shareholders Page 48

Independent Auditor’s report to the shareholders Page 49

Certification of financial statements by Directors of the ACD Page 52

Financial Statements

Statement of total return Page 51

Statement of change in net assets attributable to shareholders Page 51

Balance sheet Page 52

Statement of cash flows Page 53

Notes to the financial statements Page 54

Distribution tables Page 64

Appendix - Additional information

Risk profile Page 67

Risk Management systems Page 69

Leverage Page 69

Liquidity management Page 70

Remuneration Page 70

* These collectively comprise the Authorised Corporate Director’s Report

Page 5: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 1

We are pleased to present the annual report and accounts for the Henderson UK Property OEIC (the ‘fund’) for the period from 29 August 2014 to 31 May 2015.

Authorised statusThe Investment Manager of the company is Henderson Investment Funds Limited and it is the sole director of the company. The Henderson UK Property OEIC is governed by the OEIC Regulations under which the Company is a stand alone open-ended investment Company. It was authorised by the Financial Conduct Authority on 10 April 2014, under registered number IC000995. It is a non UCITS retail scheme complying with the investment and borrowing powers rules in chapter 5 of the Collective Investment Schemes sourcebook (COLL) issued by the Financial Conduct Authority.

Other informationThe Fund qualifies as an alternative investment fund (“AIF”) in accordance with the directive 2011/61/EU (“AIFMD”) of the European parliament.

On 22 July 2014 Henderson Investment Fund Managers Limited became an authorised Alternative Investment Fund Manager (AIFM) and were appointed to be the AIFM for the Fund.

The Manager has delegated the actual portfolio management of the Fund to Henderson Global Investors Limited (the ‘Investment Manager’). The Investment Manager is authorised and regulated by the Financial Conduct Authority and has been appointed by the AIFM to provide investment management services to the Fund.

On 29 August 2014 the Henderson UK Property Unit Trust converted to the Henderson UK Property OEIC.

On 15 January 2015 the Old Mutual Property Funds assets valued at £452m and containing 24 properties merged into the Henderson UK Property OEIC. Shareholders will benefit from access to a larger and more diversified portfolio, including a broader tenant mix and the investment process will remain unchanged.

Authorised Corporate Director’s (ACD) report

Advisers

Name Address Regulator

Authorised Corporate Director (ACD) and Alternative Investment Fund Manager (AIFM)

Henderson Investment Funds Limited

Member of The Investment Association (formerly Investment Management Association)The ultimate holding company is Henderson Group Plc.

Registered Office: 201 Bishopsgate, London EC2M 3AE. Registered in England No 2678531. Telephone - 020 7818 1818 Dealing - 0845 608 8703 Enquiries - 0800 832 832

Authorised and regulated by the Financial Conduct Authority

Investment Manager Henderson Global Investors LimitedThe ultimate holding company is Henderson Group Plc.

201 Bishopsgate, London EC2M 3AE

Authorised and regulated by the Financial Conduct Authority

Shareholder Administrator International Financial Data Services (UK) Limited

IFDS House St Nicholas Lane Basildon Essex SS15 5FS

Authorised and regulated by the Financial Conduct Authority

Depositary National Westminster Bank Plc

135 Bishopsgate London EC2M 3UR

Authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and Financial Conduct Authority

Independent Auditor PricewaterhouseCoopers LLP

141 Bothwell Street Glasgow G2 7EQ

Institute of Chartered Accountants in England and Wales

Legal Adviser Eversheds LLP One Wood StreetLondon EC2V 7WS

The Law Society

Independent Valuer CB Richard Ellis Limited Kingsley HouseWimpole StreetLondon W1G 0RE

RICS

Page 6: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

2 Henderson UK Property OEIC

Authorised Corporate Director’s (ACD) report for the period 29 August 2014 to 31 May 2015

Fund ManagersMarcus Langlands Pearse and Ainslie McLennan

Investment objective and policyThe objective of the fund is to achieve a high income together with some growth of both income and capital.

The fund will invest primarily in commercial property and property related securities. The fund may also invest in residential property and in non-property related securities, units/shares in collective investment schemes, money market instruments, deposits, derivatives and forward foreign exchange contracts.

Investments in these assets may include exchange traded funds, real estate investment trusts, unregulated collective investment schemes (which may include unauthorised property unit trusts and limited partnerships).

Whilst the fund aims to invest primarily in the UK, it may also invest overseas.

Derivative instruments and forward foreign exchange contracts may be used for the purposes of efficient portfolio management and currency hedging. As the market in property derivatives develops, derivatives may be used outside of efficient portfolio management to meet the fund’s investment objective.

As a result of the fund’s investment policy it may mean at times that it is not appropriate to be fully invested but instead to hold cash or near cash. This will only occur when it is necessary to enable redemption of units, efficient management in accordance with the investment objective of the fund or for a purpose ancillary to the investment objective of the Fund.

A detailed description of the types of assets the fund may invest in and the limitations on the extent to which the fund may invest is set out in Section 6 of the Prospectus.

If the ACD decides to use derivatives for purposes outside of efficient portfolio management, the ACD will give notice to shareholders in the next Short Report.

Performance summary29 Aug 14* - 31 May 13^ - 31 May 12^ - 31 May 11^ - 31 May 10^ -

31 May 15 31 May 14 31 May 13 31 May 12 31 May 11

% % % % %

Henderson UK Property OEIC 7.9 9.7 6.7 1.5 2.2

IA OE Property Sector average 8.1 4.6 14.5 (3.7) 11.8

Source: Morningstar - bid to bid, net revenue reinvested, net of fees, GBP, based on Share Class A accumulation.Benchmark values are at close of business.Figures in brackets are negative.

Please remember that past performance is not a guide to future performance. The value of an investment and the revenue from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested.

*The fund converted from a unit trust to an OEIC on 29 August 2014.^Comparatives shown are for the UK Property Unit Trust.

Page 7: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 3

Special Purpose Vehicles (SPV) StatusDuring the period to 31 May 2015, the fund invested in a number of Special Purpose Vehicles (SPV), these SPVs are corporatestructures which each own properties. These have been purchased with the intention of transferring the properties out of the corporate structures into the UK Property OEIC and liquidating the remaining SPVs.

With regard to the SPV’s currently held by Henderson UK Property OEIC below is the position on their current status.

HEREF Leopard Luton LimitedThe SPV was acquired in June 2014 and the properties were extracted and transferred to the OEIC on 6 March 2015. Steps are now progressing to deregister the company for VAT and submit the final return. The administrator will then move to liquidate the company.

VH Cambridge LimitedThe SPV was acquired in April 2014 and the properties extracted and transferred to the OEIC on 23 December 2014. The company has deregistered for VAT (effective date 18/06/2015). On this date Kinston Smith LLP will be appointed as liquidator.

Capital Business Park s.a.r.l.The SPV was acquired in April 2014 and awaiting transfer of the assets with liquidation anticipated quarter 3 2015.

Stax (Monkton) LimitedThe SPV was acquired in November 2014 and the properties extracted and transferred to the OEIC on 25 March 2015. Final corporation tax returns are currently being reviewed by the administrator. Once filed the company will be deregistered for VAT and the formal liquidation will commence.

The Square Bermondsey LimitedThe SPV was acquired in February 2015 and is directly held by the OEIC. The SPV is held in its capacity as a ‘blocker lease’ and has no intrinsic value. Bermondsey Square was an asset purchase the ‘blocker lease’ was granted to the SPV as part of the acquisition of the property. In order to protect its position the SPV will not be liquidated.

Silver Sea Care Properties s.a.r.l (Colinton, Orpington and Hailsham)The SPV was acquired in January 2015. Anticipated asset transfer is for the end of June 2015. Accounts for distribution currently being finalised with the administrator.

The fund doesn’t accrue daily income for properties held within an SPV structure as this rental income should be treated as capital in nature. When the SPV is dissolved all the net assets of that company are treated as capital in the NAV.

When the property is transferred out of the SPV then the rental income will accrue on a daily basis, impacting Income, as with all other properties.

Authorised Corporate Director’s (ACD) report (continued)

Page 8: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

4 Henderson UK Property OEIC

Authorised Corporate Director’s (ACD) report (continued)

PerformanceThe UK Property OEIC returned 7.9% (10.8% prorated to 12 months) over the period to 31 May 2015. We typically compare our fund against a peer group, as the IA property sector includes a broad range of funds, including those that buy the shares of property companies, and those that invest directly in commercial property. The average return was 10.4% for this peer group of 11 selected UK property units trusts and open-ended investment companies over the same period. Straight performance comparisons can be misleading because direct property funds seek to offer less volatile returns by investing principally in ‘bricks and mortar’ direct property, as opposed to being subject to the fluctuations of property equities.

Property overviewThe robustness of investment into the UK commercial property market is a reflection of the attractiveness of the sector in a world starved of income. The total transaction volume in 2014 rose to nearly £70bn, and although activity slowed to around £6bn in the first quarter of 2015, performance continues to benefit from some capital growth alongside evidence of an improvement in occupier demand. The global economy has some notable headwinds, but solid UK economic growth projections and high employment, contrasting with a lower-for-longer mantra for inflation and interest rates, should enable commercial real estate to remain a sought-after asset class. Pockets of the market do look keen from a historic pricing perspective, especially in central London and in the prime retail space, where evidence of rental growth has been recorded. Domestic and international capital has also turned to markets outwith the south east, as economic confidence has spread along with yield-driven capital growth in anticipation of rental appreciation. However, with strong equity and debt demand for the commercial real estate market, for many the ability to access stock and deploy capital is a more pressing issue than are valuations.

Investment during 2013 was more about the consumer-led recovery, while business investment took longer to manifest itself. However, 2014 showed that business optimism is high; outlook surveys suggested businesses were more likely to invest in 2014 than at any other time since the global financial crisis. This willingness was evident in London and the south east, where the London office market and some retail locations demonstrated real rental growth. Growth was less obvious in other regions; however, some specific locations with strong economic drivers also fared well.

OutlookAfter last year’s very strong performance, 2015 looks set to be ‘2014 light’ while still delivering a healthy double-digit return. As positive valuation gains slow, the occupational market should continue to improve, particularly in the south east, where much of the fund is positioned. Near term, central London offices are set to outperform, although south east offices and industrials look primed to deliver strong performance over a three and five-year horizon as well. The medium term outlook is less variable across the subsectors, with a relatively benign yield and rental curve delivering a more muted, albeit relatively attractive, return against comparable asset classes. The return of rental growth and the delivery of asset management initiatives will protect performance from the gradual outward yield movement that has been projected across most sectors from 2017 as tighter monetary policy filters down into slightly higher bond yields.

Portfolio reviewAs at 31 May 2015 the fund was valued at £3.5 billion with 77.6% of its assets in direct property. Offices made up 24.3% of direct property; retail comprised 28.4%; industrial buildings 15.8%; and the remaining 9.1% consisted of alternative commercial property. The number of properties held was 131 and the average value was £21.7m. The average unexpired lease term was 10.6 years (including student accommodation) and 64.0% of the portfolio was in London and the south east. The fund also held 4.0% in property securities, which have returned 21.2% (annualised) since inception (May 2010). The fund also holds SPVs, over the period the direct properties held within some were transferred into the fund with the remaining corporate structure being liquidated. SPVs made up 2.97% of the portfolio.

The top 10 tenants include well-known corporate names such as the Royal Bank of Scotland, B&Q, and Sainsbury’s. The IPD Rental Information Service judged the fund to have a strong tenant base. The fund’s percentile rank was 26.7 against a benchmark of 49.1 as at 30 March 2015. The fund has maintained an extremely low void rate of 3.1% compared with the IPD average void rate of 9.3% as at March 2015.

During January 2015, the Old Mutual Property Funds assets valued at £452m and containing 24 properties merged into Henderson UK Property OEIC.

Page 9: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 5

Authorised Corporate Director’s (ACD) report (continued)

The fund has made the following property acquisitions and disposals during the period:

SalesEdinburgh (retail): sale of multi-let retail parade

Cricklewood (leisure): sale of a cinema

Crawley (office): sale

Redhill (office): sale

PurchasesFarnham (leisure): long-let, well-positioned property to David Lloyd

Stoke-on-Trent (industrial): let to JCB for distribution purposes

Salisbury (retail): multi-let retail investment with good growth potential

Milton Keynes (retail warehousing): well-located and well-let retail warehouse park

Crendon Industrial Park

London (leisure): portfolio of eight London public houses on long leases

RD Park, Hoddesdon

Stockley Park (office): purchase of a well let office

Crayford (retail warehousing): a multi-let park

Care UK portfolio: three new care homes in Edinburgh, Orpington and Hailsham

Bermondsey Square (offices): a development predominantly let to an office occupier with some further mixed-use encompassed

Bath (leisure): mix of restaurants and boutique shopping

Crewe (retail warehousing): single-let B&Q

London, E1 (office): let to University of Law

Hythe (retail): a supermarket let to Tesco

Wycombe Sands (industrial): added to an existing holding

Balham (leisure): a public house

Fulham (leisure): a public house

Bedford Riverside, leisure development

Durham (shopping centre): a new outlet mall scheme (categorised as shopping centres for IPD purposes)

Total value of purchases and sales are included within note 5 portfolio transaction costs on page 58.

Page 10: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

6 Henderson UK Property OEIC

Authorised Corporate Director’s (ACD) report (continued)

Strategic asset managementOver the period, the fund managers continued to focus on enhancing quality and driving value.

Welwyn Garden City (retail warehousing): rent review completed

Cambridge (office): a new letting completed

Bournemouth (retail warehousing): a new letting completed

Muswell Hill, London (retail): a lease extension completed

Southampton (office): a lease renewal completed

Long Crendon (industrial): a new letting completed

Brushfield Street, London (retail): a new letting completed

Cardiff (leisure): two new lettings completed

Keighley (retail warehousing): a rent review completed

London (office/retail): new retail letting completed and lease renewed to existing tenant

London (office): surrender and re-grant to new tenant (27% increase on passing rent)

Hinkley (industrial): rent review settled with uplift

Ealing (office): rent review settled with uplift

Bournemouth (retail warehouse): surrender and re-grant to new tenant and Agreement for Lease completed following planning for new retail pod

Bristol (industrial): break removal and rent review settled

Croydon (retail): rent review settlement with substantial uplift

Salisbury (retail): new letting completed

Hayes (retail warehouse): agreement for lease to new tenant upon receipt of planning

London (retail): settlement of two rent reviews with uplifts

Milton Keynes (retail): new letting completed

London (office): early lease re-gear to existing restaurant operator (10% increase on previous passing rent)

St Albans (office): assignment and ten-year reversionary lease completed to new occupier at increased rent

Luton (industrial): numerous lease renewals and lettings completed. Estate now fully let.

Muswell Hill (retail): agreement for lease completed to Bills (20-year lease) and surrender and re-grant on larger area to existing tenant (Planet Organic)

Manchester (office): new letting completed

Thame (industrial): lease renewal completed and re-gear to existing tenant

Milton Keynes (industrial): six re-gears completed and a new letting

Manchester (industrial): one re-gear completed and a new letting

Ipswich (retail): surrender and re-grant to new tenant at increased rent

There are further asset management initiatives ongoing, which should all assist in creating further value for the fund.

Page 11: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 7

Table of property investments

Address Tenant

Trimbridge House, Trim Street, Bath

Purchased June 1999

Investment Funds Direct

Location & descriptionAn office building located in the centre of Bath. The building was completely refurbished in 2011 and is let to a single tenant.

Staples, Unit 11, The Forum, Stevenage

Purchased December 1999

Staples UK Ltd and Staples International Inc

Location & descriptionA retail warehouse unit which forms part of phase two of the Forum Retail Park. The town centre is immediately adjacent and nearby occupiers include Tesco.

Brighton Road, Shoreham-by-Sea

Purchased December 1999

Dunelm (soft furnishings) Ltd

Location & descriptionA 24,780 square feet retail warehouse constructed in the mid 80s with excellent parking. Within the Brighton conurbation this

property is part of a cluster including B&Q and Halfords.

The purchase dates are all pre launch, the properties were held in the unit trust and were all transferred on 29 August 2014 into the OEIC.

Page 12: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

8 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

B&Q, Bridge Road, Welwyn Garden City

Purchased August 2002

B&Q plc

Location & descriptionWell located, this is the only retail warehousing development in the centre of Welwyn and comprises 39,538 square feet with parking.

Speedfields Retail Park,Fareham

Purchased July 2003

B&M Retail Ltd

Location & descriptionPart of the Speedfields Retail Park, this unit is well located to serve Fareham and the surrounding area. The premises were built in 1987 and have a good parking provision. Possible further development on the site being investigated. The unit has recently been relet to B&M Retail Ltd on a 15 year lease.

1-3 Silver Street, Bedford

Purchased August 2003

JD SportsTomislav Govorusa

Location & descriptionLocated in a prime position within the centre of Bedford, this is a retail unit on ground, 1st and 2nd floors with rear servicing.

Page 13: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 9

Investment property overview (continued)

Address Tenant

Empire Cinema, Birmingham Great Park, Rednal,Birmingham

Purchased October 2003

Empire Cinemas Ltd(Birmingham Great Park Cinema 2 Ltd)

Location & descriptionA large multiplex cinema with parking on a mixed leisure complex, well located to the west of Birmingham and with easy access by road.

Marloes Buildings,Kensington Village, London

Purchased January 2004

CACI Ltd

Location & descriptionOriginally a Victorian warehouse, refurbished in the 1990s, forming part of a commercial development adjacent to the A4 in West Kensington.

Barton Street, Gloucester

Purchased April 2004

Go Outdoors Group

Location & descriptionA solus retail warehouse unit let to Go Outdoors Ltd until 2025.

Page 14: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

10 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

22-24 Worple Road, London

Purchased September 2004

The Trustees of GMB

Location & descriptionThe property is well located on Worple Road in the heart of Wimbledon close to the railway and underground station. The attractive 1990’s office building provides over 32,600 square feet of office space on basement, ground and three upper floors. The basement provides 50 car parking spaces.

Parkview, Great West Road, Brentford

Purchased December 2004

Worley Parsons Ltd

Location & descriptionLandmark office building of 113,574 square feet on 2.3 acres constructed in 2002. Located fronting on to the Great West Road close to Junction 1 of the M4 accessed from the A4 east.

Units A&B, Connect 33, Boulton Road, Reading

Purchased December 2004

Kee Klamp LtdPharmaterials Ltd

Location & descriptionTwo industrial/warehouse units within a fenced estate comprising of 11,350 and 29,029 square feet. The property is well located just off the A33, two miles from Junction 11 of the M4 and one mile from the town centre.

Page 15: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 11

Table of property investments (continued)

Address Tenant

Wycombe Sands Industrial EstateHigh Wycombe

Purchased December 2004

United Biscuits (UK) LtdKelerbay LtdBuckinghamshire New University

Location & descriptionThree detached industrial/warehouse units comprising 69,313 square feet. The estate is located on the Western edge of High Wycombe two miles from junction 4 of the M40.

Ealing Gateway, 26, 28 & 30 Uxbridge Road, Ealing

Purchased April 2005

Kantar Media UK LtdCatalyst Communities Housing Association Ltd

Location & descriptionA landmark office building on ground and six upper floors with 66 car parking spaces. Well located on the Uxbridge Road in central Ealing, a popular West London office location.

Chalfont Grove, Narcot Lane Chalfont St Peter

Purchased May 2005

Arqiva Communications Ltd

Location & descriptionThe developed core of the property (12.4 acres) consists of a mix of warehouse, office, studio space and a field of satellite dishes. The remainder of the property is farmland and woodland. The property is well located on the north side of Chalfont St Peter. It is bisected by the M25 and the M40.

Page 16: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

12 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

The Rivers Office Park,Denham Way, Maple CrossRickmansworth

Purchased June 2005

Nissan Motor (GB) Ltd

Location & descriptionThe Rivers Office Park is strategically placed approximately 0.5 miles from junction 17 of the M25. The office accommodation is arranged over ground and two upper floors. The property is divided into three buildings providing net internal floor area of 98,910 square feet with 465 car parking spaces.

Homebase, 300 London Road,High Wycombe

Purchased December 2005

Homebase Ltd

Location & descriptionThe property was completed in 1994 and comprises a purpose built retail warehouse, with an external garden centre, a service yard and extensive car parking. The customer car park provides 180 car parking spaces, providing an excellent ratio of 1 space for every 150 square feet.

Arcadia, 15/16 The Parade & 2–4 Rose Lane, Canterbury

Purchased March 2006

Burton/Dorothy Perkins Properties Ltd

Location & descriptionThe property is a prime corner frontaged multi-level shop unit, providing retail sales at the ground floor, first and basement levels, with storage space provided at each level. The second floor provides extensive storage accommodation and staff facilities.

Page 17: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 13

Table of property investments (continued)

Address Tenant

B&Q Warehouse2 Solartron Road,Farnborough,Hampshire

Purchased March 2006

B&Q plc

Location & descriptionThe property comprises a purpose built B&Q Warehouse unit developed in 2002. It provides a total accommodation of 132,628 square feet and is well configured on the site. Customer parking for 462 cars is well laid out to the front of the unit, showing a ratio of 1:287 square feet. A secure garden centre is located to the west of the unit which includes a 2,586 square feet conservatory and a covered area of 3,428 square feet. Servicing is to the rear with some additional staff car parking spaces.

Hayes Bridge Retail Park,Hillingdon, London

Purchased March 2006

Halfords LtdHarveys Furnishing GroupDreams plcStaples UK Retail LtdMaplin Electronics LtdPaul SimonArgosNext HomesDSG Retail

Location & descriptionThe scheme which was completed in 1997, comprises a modern retail park totalling 102,936 square feet of retail accommodation. There are 489 car parking spaces providing a generous ratio to gross internal floor space of 1:211 square feet.

Odeon Cinema, Kilmarnock

Purchased August 2006

Odeon Cinemas LtdCity Centre Restaurants

Location & descriptionThe property comprises a detached eight-screen multiplex cinema with substantial car parking to the front and sides. The cinema has a total capacity of approximately 2,000 people. It provides a gross internal floor area of approximately 36,675 square feet. The leisure offering has been improved by building a Frankie & Benny’s restaurant on site.

Page 18: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

14 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Swan House, Abingdon Business Park,Abingdon

Purchased August 2006

Swets Information Services Ltd

Location & descriptionSwan House is a three storey purpose-built, detached office building that was completed in January 2002. The property provides Grade A accommodation and 118 car parking spaces.

3/7 Town Quay, Buildings 38, 40 and 43,Southampton

Purchased August 2006

Halifax plcPricewaterhouseCoopers LLPThe First Secretary of State

Location & descriptionThe property comprises three self-contained office buildings, known as Buildings 38, 40 and 43 arranged around a central courtyard. The buildings were constructed in 1989 and are of similar style with concrete frame construction, brick clad elevations and pitched slate roofs. The site is approximately 1.69 acres with 116 car parking spaces (1:410 square feet ratio).

Windsor Office Park, Berkshire

Purchased August 2006

GB Gas Holdings Ltd (surety from Centrica plc)

Location & descriptionThe property is an office development providing 121,323 square feet of high quality office accommodation in two buildings, together with 514 onsite car parking spaces (a ratio of 1:236 square feet). Both buildings have a large open plan office floorplate, with raised floors, suspended ceilings and air conditioning. An additional piece of land to the rear of the property has been acquired to facilitate further development.

Page 19: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 15

Table of property investments (continued)

Address Tenant

Chaucer House, The Office Park, Leatherhead,Surrey

Purchased October 2006

Logica UK Ltd

Location & descriptionThe property has been developed to a very high standard and comprises a Grade A office building developed in 2001, extending to approximately 34,674 square feet. There are 154 car parking spaces providing a ratio of 1:225 square feet.

Aymer House,Chertsey, Surrey

Purchased December 2006

Compass Group plc

Location & descriptionThe property is built to a high specification and comprises a two and three storey office building. The net internal area is 47,461 square feet with 158 car parking spaces; 39 at ground level and 119 at basement level. This equates to a car-parking ratio of 1:300 square feet.

Olympus House,Tachbrook Park,Leamington Spa, Warwickshire

Purchased December 2006

Wright Hassall LLP

Location & descriptionThe property is a landmark Grade A headquarters office accommodation situated between Leamington town centre and the M40. The building offers 44,096 square feet of offices over three floors ranging from 11,953 square feet up to 16,579 square feet and 1,413 square feet of storage complete with a modern specification and excellent on site car parking ratio.

Page 20: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

16 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Co-op Warehouse,Hardcase,Oliver Road, West Thurrock

Purchased December 2006

The Co-operative Group (CWS) Ltd

Location & descriptionThe warehouse is a high specification distribution building in a self contained secure site of 14.73 acres. The base building has ample parking for both cars and lorries. The building incorporates office accommodation of approximately 13,285 square feet arranged over ground and first floors.

B&Q UnitRiverside Retail Park,Taunton, Somerset

Purchased April 2007

B&Q plc

Location & descriptionThe property is a high quality bulky goods retail warehouse which extends to 47,366 square feet with approximately 265 car spaces giving a ratio of 1:179 square feet.

Dundas HouseEdinburgh

Purchased July 2007

Standard Life Employee Services Ltd

Location & descriptionThe property was comprehensively redeveloped in 2003 to provide Grade A office accommodation throughout. There are 72 surface car parking spaces providing a ratio of 1:1,932 square feet.

Page 21: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 17

Table of property investments (continued)

Address Tenant

House of Fraser, 12-18 West Street,Chichester

Purchased November 2009

House of Fraser plc

Location & descriptionA period building dating back to the early 20th Century with an attractive brick work façade, opposite Chichester Cathedral in the heart of the city. The property comprises three retail units combined to create a large excellently configured department store. The property benefits from a rear servicing yard accessed off The Woolstaplers car park.

Dodwells Road, Hinckley, Leicestershire

Purchased March 2010

Tesco Distribution Ltd

Location & descriptionWell located distribution warehouse in East Midlands. Long let to Tesco Distribution Ltd.

54-58 High StreetMaidenhead

Purchased July 2010

Boots the Chemist Ltd

Location & descriptionA modern well configured four storey building with retail sales on ground and first floor. The brick clad building is located in prime position on the high street opposite the entrance to the Nicholson Shopping Centre and adjacent to Marks and Spencer.

Page 22: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

18 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Heathcote Industrial Estate10/10a Heathcote WayWarwick

Purchased September 2010

Dennis Eagle

Location & descriptionThis industrial unit manufactures Dennis Eagle refuse lorries which are the dominant company in the UK providing this service. It is a well located and well specified unit.

Keighley Retail ParkHardings RoadKeighley

Purchased January 2011

Dreams PlcHalfords LtdComet Group PlcJJB Sports PlcCurrysBrantano (UK) LtdSleepmastersJollye’s PetsKFC

Location & descriptionThis retail warehouse park has the benefit of an excellent tenure line up and is well located near the town centre.

Europa WayHeathcote RoadLeamington Spa Warwick

Purchased May 2011

Sytner Group Ltd

Location & descriptionA well located car showroom selling predominantly BMW and Volvo cars to an affluent catchment area.

Page 23: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 19

Table of property investments (continued)

Address Tenant

The Zenith BuildingSpring GardensManchester

Purchased July 2011

Royal Mail Group PlcCushman and WakefieldOctapharma LtdZolfo Cooper LtdAce Ina Services UK LtdRobert Half InternationalOverbury Plc

Location & descriptionWell located office building in the heart of the Manchester central business district. Refurbished in 2007, the office space is of a high specification and divided into attractive 5,300 floor plates.

BMI Harbour HospitalSt. Mary’s RoadPoole

Purchased July 2011

BMI Healthcare Ltd

Location & descriptionPrivate hospital located in an affluent retirement hub of the UK. The building is let to a leading private healthcare operator, BMI Healthcare, for 27 years with annual fixed rental increases.

107 - 143 Muswell Hill RoadLondon

Purchased December 2011

Pop Hair LtdA C Foreman LtdPlanet Organic LtdRoyal NewsBarnardosLaline LtdOdeon Muswell Hill Ltd

Location & descriptionA mixed use asset with retail, residential and leisure components. Well located in the affluent London suburbs of Muswell Hill.

Page 24: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

20 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Technology DriveBroughton RoadRugby

Purchased March 2013

GE Energy Power Conversion

Location & descriptionSingle let industrial facility located in central Rugby. Tenant is GE Energy Power Conversion, who are a subsidiary of the GE Group.

Mary Ann StreetCardiff

Purchased April 2013

Cineworld Megaplex LtdSports BarGala Casinos LtdFlaming Dragon

Location & descriptionMulti-let leisure complex located in the centre of Cardiff. The income is derived from Cineworld. Gala Casino and there are two restaurant operators in place.

31 Clerkenwell Close& 8 Bowling Green LaneLondon

Purchased April 2013

Brothers and Sisters Ltd

Location & descriptionSingle let office building, located in Central London. The building was developed in 2007 and is currently let to an advertising agency. Brothers and Sisters have a ten year lease.

Page 25: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 21

Table of property investments (continued)

Address Tenant

Watery LaneCrittals CornerSidcupKent

Purchased May 2013

DFS Furniture Company Ltd

Location & descriptionWell located retail warehouse unit in south east region. Let to DFS for 16 years.

RD Park Hoddesdon

Purchased May 2013

Wincanton Group LtdRecall LtdNorbert DentressangleCortland Fibron BX LtdCulina Ambient LtdMichael’s Pitta Bakery

Location & descriptionFully let industrial distribution park, strategically located close to the M25 motorway and within an hour drive from central London. Tenants are made up of principally third party logistics operators, including Wincanton, Norbert Dentressangle, Recall and Culina.

Merlin 310Barton Dock RoadTrafford ParkManchester

Purchased June 2013

Kelloggs

Location & descriptionDistribution warehouse let to one of the world’s largest 3 party distribution companies TDG Ltd. The unexpired lease term is c. 6 years remaining. The warehouse is used for the distribution of all Kellogg’s branded goods, which are produced at their nearby manufacturing facility.

Page 26: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

22 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Inverurie Retail Park5 Oldmeldrum RoadInverurieScotland

Purchased June 2013

LidlHomebaseArgosBrantanoHalfordsPets at HomeIcelandHomebargainsDSG Retail t/a Currys

Location & descriptionAn out of town retail scheme with Open A1 Planning consent.

Albert StreetNottingham

Purchased June 2013

Marks and Spencer Plc

Location & descriptionLocated in a retail core of Nottingham. Contains a M &S Simply Food offering at ground floor level, with clothes departments located on the two floors above. Marks and Spencer have vacated their other in town store and extended their lease on the subject property to 15 year term certain.

Riverside WestSmugglers WayWandsworthLondon

Purchased July 2013

Virgin Active

Location & descriptionWell located gym in London suburb, let to Virgin Active for c.22 years. The subject site is a top trader for Virgin Active who are the UK largest gym operator.

Page 27: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 23

Table of property investments (continued)

Address Tenant

100 Kings Cross RoadLondon

Purchased July 2013

Travelodge Hotels

Location & descriptionThe property is located in a central London location, which is well placed to serve the transport hubs of Kings Cross / St. Pancras Stations. Travelodge have a 27 year lease.

Ryder Court 12-16 Ryder StreetSt JamesLondon

Purchased October 2013

Whitehead Mann LtdMaple SecuritiesOMV (UK) LtdJO Hambro Capital ManagementJRK (UK) Ltd

Location & descriptionPrime West End office, located in the heart of St. James’. The property is let to 5 tenants which combined have a weighted average lease term of 22 years. The property is highly reversionary with rental values expected to grow even further in the immediate area.

142-146 High RoadKilburnLondon

Purchased November 2013

Aldi StoresVodafoneSports DirectTJX UK Residential

Location & descriptionWell configured parade of shops located in London suburb of Kilburn. Units are well let to a host of national retailers including Sports Direct, TK Maxx, Aldi and Vodaphone.

Page 28: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

24 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Mallard Retail ParkMallard RoadBournemouth

Purchased November 2013

HomebaseJYSK LimitedSteinhoff UK Group Properties Ltd t/a SleepmastersPaul SimonBHSCarpetrightDSG Retail t/a PC WorldDSG Retail t/a Currys

Location & descriptionDominant bulky goods retail park, located adjacent to Castlepoint, the dominant fashion park for the area. Let for an average term of 12 years and let to a number of national retailers including Homebase, BHS, DSG, and Pets At Home.

ButterleyRipleyDerbyshire

Purchased November 2013

Sainsburys

Location & descriptionDominant supermarket for the affluent market town of Ripley and the surrounding East Midlands area. The property is considered to be highly reversionary with open market rent review in 2014. There are 21 years remaining on the lease to Sainsburys.

Kidwells ParkKidwells Park DriveMaidenhead

Purchased November 2013

Premier Inn

Location & descriptionThe asset is a development site that has planning permission for approximately 40,000 sq. ft. of Grade A office space and a budget hotel (which has been pre-let to Premier Inn). An in-house development team are managing the project, with practical completion expect in early 2016. Maidenhead’s town centre has a restricted amount of Grade A office space and is set to further benefit on the demand site from Cross Rail’s completion in 2017.

Page 29: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 25

Table of property investments (continued)

Address Tenant

10 The HayesCardiff

Purchased December 2013

TK Maxx

Location & descriptionPrime high street shop located in the heart of the shopping district in Cardiff. The asset is single let to a strong covenant in TK Maxx, and has a further 7 years until expiry.

86-88 Market StreetManchester

Purchased January 2014

BarclaysAST

Location & descriptionPrime high street shop, located on the main shopping pitch in Manchester facing the dominant shopping scheme, The Arndale Centre. The property is let to Barclays Plc for a further 8 years.

7-9 PiccadillyManchester

Purchased January 2014

Superdrug Stores Plc

Location & descriptionA well configured unit, located in the improving Piccadilly area of Manchester. The asset is let to Superdrug for a further 8 years.

Page 30: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

26 Henderson UK Property OEIC

Address Tenant

Gallery ApartmentsStudent AccommodationGlasgow

Purchased February 2014

Sainsbury’s SupermarketASK Restaurants

Location & descriptionThe asset is a former hotel that has been converted into high end student accommodation. The asset provides over 130 beds. The property benefits from being close to the town centre, with the Buchanan Galleries being located within a 5 minute walk.

Long CrendonThameLondon

Purchased February 2014

Crendon Industrial Estate

Location & descriptionThis is a large dominant multi-let industrial estate that is let to more than 40 tenants providing a highly diversified income base.

Waterside Retail ParkAshbourneDerbyshire

Purchased February 2014

Homebase Limited99p Stores LimitedHalfordsMarks and Spencer Simply FoodsMountain Warehouse LimitedMajestic Wine Warehouses

Location & descriptionThe is a well let retail asset that dominates its local catchment. The average weighted lease length of over 10 years.

Table of property investments (continued)

Page 31: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 27

Address Tenant

10 West StreetChichester

Purchased February 2014

Travelodge HotelsPost OfficeThe Belle Isle BistrosBritannia Parking ServicesHallway Properties Ltd

Location & descriptionThe asset offers the Fund exposure to both retail and leisure sectors in an affluent south east location.

99-101 London RoadCroydonLondon

Purchased February 2014

LidlSecretary of State for the EnvironmentSouth Eastern Power Networks Plc

Location & descriptionThe asset is majority let to a supermarket retailer, Lidl, but also provides exposure to the public sector, who occupy the offices on the upper floors.

99-115 Lordship Lane,East DulwichLondon

Purchased February 2014

Camec LtdKingleigh LtdSogim LtdLongmint LtdFuneral Services Ltd

Location & descriptionThe asset is located in a London suburb. The retail pitch here is set to strengthen with new entrants such as Marks & Spencer set to open in the short term. The asset is let to five separate tenants.

Table of property investments (continued)

Page 32: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

28 Henderson UK Property OEIC

Address Tenant

19-20 Upper StreetIslingtonLondon

Purchased February 2014

Lloyds Bank Plc

Location & descriptionPrime retail shop, let to the strong banking covenant of Lloyds Bank Plc for a further 8 years. This asset gives the Fund exposure to a very strong retailing location in Islington.

Kingsteignton Retail ParkNewton AbbotKingsteignton

Purchased February 2014

Next Group PlcBootsHobbycraft Trading LtdPets and Home LtdCosta LtdTJ Morris LtdWestern Power Distribution

Location & descriptionA well configured retail warehouse scheme that is let to a number of strong retailers including Next, Boots and Pets at Home.

Witney Unit AThorney Leys ParkDucklington LaneWitney

Purchased February 2014

B&Q Plc

Location & descriptionLocated in a south east town, this asset provides the Fund with both a secure income stream and asset management potential.

Table of property investments (continued)

Page 33: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 29

Address Tenant

60-84 Parsons Green LaneLondon

Purchased February 2014

Co-operative Bank GroupVillage du Pain LtdLondon & Quadrant Housing Trust

Location & descriptionLocated in London suburb of Fulham. The asset is well let to the Co-Operative (supermarket) and Le Pain Quotidian. This asset is highly liquid and is well positioned for future rental growth.

38 Brushfield Street5-6 Steward Street and50 Gun Street

Purchased March 2014

789 Services LimitedByron Hamburgers LimitedJoseph Cohen & Uri DinayPoncho No.8 Limited

Location & descriptionThe asset provides the Fund with further exposure to the central London leisure market. The block is located opposite Spitalfields Market. The asset is let to five well known operators.

Derby Commercial ParkRayneswayDerby

Purchased April 2014

Kuehne & Nagel Drinkflow Logistics Limited

Location & descriptionThis asset was purchased soon after its development was completed in April 2014. This provides the Fund with exposure to one of the most modern distribution warehouses in the UK. The unit is the central hub in Heineken’s upgraded distribution network.

Table of property investments (continued)

Page 34: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

30 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Capital ParkVictoria HouseCambridge

Purchased April 2014

Secretary of State

Location & descriptionThe asset is a business park, located 5 miles from Cambridge city centre. The asset is let to a number of multi-national companies such as IBM and ARM Ltd. The purchase included further development land which should allow the Fund to add further value to this site over the medium term.

Iron Bridge StudiosLower North StreetExeterDevon

Purchased May 2014

Student Accommodation

Location & descriptionA well located student accommodation block, located near the town centre amenities. Exeter’s student population in the UK should help drive rental growth on this asset over the medium term.

1-3 Sidcup High StreetSidcupDA14 6EN

Purchased June 2014

WaitroseTravelodge

Location & descriptionA mixed use scheme let to Waitrose and Travelodge.

Page 35: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 31

Table of property investments (continued)

Address Tenant

Tesco SuperstoreFerndown District CentreFerndownBH22 9TH

Purchased June 2014

Tesco

Location & descriptionDominant town centre supermarket located in an affluent south east town. Let to Tesco for 15 years.

D2 Business ParkDyce DriveAberdeen

Purchased June 2014

BP

Location & descriptionA forward commitment to acquire a brand new industrial unit let to BP Exploration. The property benefits from a 15 year lease.

Dallow RoadLutonLU1 1UU

Purchased July 2014

Bilton Way Industrial Estate40 active tenants

Location & descriptionA multi-let industrial estate with 40 active tenants.

Page 36: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

32 Henderson UK Property OEIC

Address Tenant

Wigmore LaneLutonLU2 9TA

Purchased July 2014

Asda

Location & descriptionDominant town centre supermarket let to Asda for 23 years.

Loire DriveWiganWN5 0UU

Purchased July 2014

Robin Retail ParkMulti-let with 20 active tenants

Location & descriptionDominant multi-let retail warehouse park with a number of asset management angles.

440 StrandLondonWC2

Purchased July 2014

RBSRetail parade with mix of tenants

Location & descriptionAn office, long let to RBS for 22 years and ground floor surrounding retail parade with a mix of tenants.

Table of property investments (continued)

Page 37: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 33

Table of property investments (continued)

Address Tenant

Sainsbury’s SuperstoreLower Trinity WalkMarsh WayWakefieldWF1 1QQ

Purchased August 2014

Sainsbury’s

Location & descriptionDominant town centre supermarket. Located in the city’s main shopping centre.

1-3 Waterson StreetLondonE2 8HE

Purchased August 2014

Private rental sector in London

Location & descriptionPrivate rental block of appartments, well located in Shoreditch.

Heartwood PortfolioLondon

Purchased October 2014

A portfolio of eight London public houses

Location & descriptionA portfolio of eight London public houses on long leases, the majority of which are located in prime central London locations.

Page 38: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

34 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Blue PlanetLowlands RoadChatterley ValleyStoke on TrentST6 4PY

Purchased November 2014

JCB

Location & descriptionNewly developed distribution let to JCB for 10 years. Unit is JCB’s global distribution hub.

David Lloyd Racquets Club & SpaMonkton LaneFarnham

Purchased November 2014

David Lloyd

Location & descriptionA long let well-positioned property to David Lloyd. The asset benefits from annual fixed rental uplifts.

The MaltingsSalisburyWiltshireSP2 7TL

Purchased November 2014

Multi-let shopping centre

Location & descriptionA multi-let retail site located in Salisbury town centre, comprising of both a Sainsbury’s supermarket and a number of smaller independent shops. The site will offer a number of long term asset management initiatives to add value.

Page 39: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 35

Table of property investments (continued)

Address Tenant

Beacon Retail ParkMilton KeynesMK1 1BN

Purchased November 2014

Multi-let retail warehouse

Location & descriptionA well-located bulky retail warehouse park at Bletchley, let to a number of national operators.

2 Roundwood AveStockley Park

Purchased December 2014

Gilead Sciences Europe

Location & descriptionThis asset provides the fund with a core office building, located in one of the strongest locations in the South East market. Stockley Park has a very low vacancy rate and is therefore well placed for rental growth as occupier demand increases in the coming years.

Tower Retail ParkCrayford ParkCrayford

Purchased January 2015

Multi-let retail park

Location & descriptionThe fund acquired this 15-unit retail park in an off-market transaction. It is let to national retailers including Next, Boots, Petsat Home and Sports Direct. The acquisition fits with the strategy of acquiring core, defensive, liquid assets in strong trading locations.

Page 40: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

36 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Silver Sea Care Homes

Purchased January 2015

3 Care Homes Bowes House Cairdean House Foxbridge House

Location & descriptionThe fund acquired a portfolio of three purpose built care homes, all located in affluent locations with a high demand for elderly care. The tenant Care UK are one of the country’s leading care home providers and provide good covenant strength. The assets were located in Orpington, Hailsham and Edinburgh. The leases were let on attractive 25 year leases with annual RPI fixed uplifts.

Bermondsey SquareBermondseyLondonSE1 3UN

Purchased February 2015

Office and residential accommodation

Location & descriptionThis asset gives the fund further exposure to one of London’s biggest growth markets, Southwark. The area has benefited significantly from infrastructure and ammenity improvements which has made the area increasingly attractive to work, live and socialise. We believe the asset is considerably under-rented at present and will benefit from strong growth in the short to medium term.

Milsom PlaceMilson StreetBath

Purchased February 2015

Multi-let restaurants, Retail and offices

Location & descriptionThe acquisition fits with the fund’s strategy of buying core, defensive, high street assets in economically-strong towns. Milsom Place is located in the fashionable Milsom area, regarded an appealing retail and dining location in Bath city centre. The investment contains a mix of listed buildings comprising 25 retail units and 2,300 sq. ft. of offices with a strong tenant line up, which offers rental growth prospects. Average lease length is approximately 15 years.

Page 41: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 37

Table of property investments (continued)

Address Tenant

B&QWeston RoadCreweCW1 6BA

Purchased March 2015

B&Q

Location & descriptionThe fund acquired a retail warehouse of approximately 104,400 sq. ft. let to B&Q with c. 14.5 years left on the lease, which is subject to open market rent reviews. The asset is considered defensive given the long income duration and the ability for the unit to be split in to multiple units in the future.

2-14 Bunhill RowLondonEC1

Purchased March 2015

University of Law Ltd

Location & descriptionThe asset provides the fund with further exposure to the City. The asset is located in the core, nearby Moorgate station which is set to benefit from the arrival of Crossrail in 2018. The subject property is let to the Law Society for 20 years on a lease with 5 yearly fixed uplift rent reviews. The asset will provide the fund with a strong income return and a high degree of liquidity.

Hillbottom RoadHigh WycombeHP12 4HJ

Purchased March 2015

Sands 10 Industrial Estate10 active tenants

Location & descriptionThe fund added to its holding at Sands End Industrial Estate, High Wycombe. The 10 units are long let to a number of tenants that will offer the fund a robust income stream. The fund is also of the view that High Wycombe is well positioned to benefit from rental growth in the medium to long term.

Page 42: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

38 Henderson UK Property OEIC

Table of property investments (continued)

Address Tenant

Sizer WayHytheSouthamptonSQ45 5JA

Purchased March 2015

Tesco Superstore

Location & descriptionThe asset comprises a dominant 48,000 sq. ft Tesco Superstore with filling station. The unexpired lease term is 15.5 years subject to annual rental uplifts.

The Bedford77 Bedford HillBalhamLondon

Purchased March 2015

Enterprise Inns Plc

Location & descriptionThe fund added to its exposure to central London pubs. This asset is let to one of the UK’s main pub companies, Enterprise Inns. The assets trade extremely well and therefore will provide the fund with a high degree of liquidity. The assets were acquired at a price that was considerably lower than their underlying residential value which makes them a very defensive asset.

474-476 Fulham RoadLondonSW6 1BY

Purchased April 2015

Broadway Bar and Grill

Location & descriptionThis asset is let to one of the UK’s main pub companies, Broadway Bar and Grill. The assets trade extremely well and therefore will provide the fund with a high degree of liquidity. It was acquired at a price that was considerably lower than their underlying residential value which makes them very defensive asset.

Page 43: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 39

Table of property investments (continued)

Address Tenant

Bedford RiversideBedford

Purchased April 2015

Leisure Development

Location & descriptionThe fund acquired the subject property by way of a forward funding agreement. The site has full planning permission from Bedford Council and will be complete in Q3 2016. The asset is long let to a number of national restaurateurs and leisure operators including Vue Cinema, Premier Inns, Mitchell and Butler and Wagamamas. This asset wil become the dominant leisure scheme in the town and will provide the fund with a high degree of liquidity.

Dalton ParkMurtonCounty Durham

Purchased April 2015

Dalton Park Outlet

Location & descriptionThe fund acquired this regionally dominant outlet mall which is anchored by M&S and Next. The fund will utilise specialist asset management resource to improve the tenant mix and drive rental growth. The fund has also secured rights to acquire the Phase II development adjacent the outlet mall which is pre-let to a foodstore, cinema and restaurants. Phase II is scheduled to open in 2016.

Page 44: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

40 Henderson UK Property OEIC

Comparative tables as at 31 May 2015

Net asset value per share

Net asset Net asset Number of Net asset

value value of shares in value per

of fund shares issue shares

(£) (£) (pence)

Class A income

31/05/2015 3,523,398,022 170,680,377 172,289,951 99.07

Class A accumulation

31/05/2015 3,523,398,022 821,266,895 409,313,454 200.64

Class Z income*

31/05/2015 3,523,398,022 49,314,832 48,208,293 102.30

Class Z accumulation*

31/05/2015 3,523,398,022 19,344,252 18,589,761 104.06

Class I income

31/05/2015 3,523,398,022 943,603,273 866,282,127 108.93

Class I accumulation

31/05/2015 3,523,398,022 1,212,982,448 1,006,076,557 120.57

Class G income

31/05/2015 3,523,398,022 138,114,314 256,352,181 53.88

Class G accumulation

31/05/2015 3,523,398,022 1,253,156 2,216,072 56.55

Class U2 income

31/05/2015 3,523,398,022 76,770 143,819 53.38

Class U2 accumulation

31/05/2015 3,523,398,022 166,761,705 301,382,773 55.33

* Z share class launched on 1 September 2014

Page 45: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 41

Comparative tables as at 31 May 2015

Performance record

Calendar year Net revenue Highest price Lowest price

(pence per share) (pence per share) (pence per share)

Class A income2014^ - 105.70 98.08 2015 2.35 * 108.31 + 100.35 +Class A accumulation2014^ - 212.37 195.40 2015 4.71 * 219.37 + 201.62 +Class Z income2014** - 103.82 100.95 2015 2.49 * 106.90 + 103.51 +Class Z accumulation2014** - 104.71 100.95 2015 2.51 * 108.74 + 104.40 +Class I income2014^ - 110.60 107.70 2015 2.64 * 113.60 + 110.27 +Class I accumulation2014^ - 121.39 117.15 2015 2.90 * 125.74 + 121.02 +Class G income2014^ - 54.90 53.46 2015 1.32 * 56.40 + 54.74 +Class G accumulation2014^ - 57.13 55.13 2015 1.37 * 59.20 + 56.96 +Class U2 income2014^ - 54.00 52.58 2015 1.30 * 55.50 + 53.84 +Class U2 accumulation2014^ - 55.50 53.56 2015 1.34 * 57.53 + 55.34 +

* to 31 July 2015+ to 31 May 2015

** Z share class launched on 1 September 2014

^ from 29 August 2014 to 31 December 2014

Page 46: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

42 Henderson UK Property OEIC

Real estate expense ratio and ongoing charge figure

The real estate expense ratio (REER) is comprised of the Ongoing charge figure (OCF) and the Property expense ratio (PER) of the fund. The OCF is based on the total expenses excluding any property related expenses included within the financial statements for the period and the PER is based on the daily property expenses included within the financial statements. The Expenses ratios are as indicated below:

31/05/2015

%

Class A

Non-property expense ratio - OCF 1.69

Property expense ratio 0.29

Real Estate expense ratio 1.98

Class Z*

Non-property expense ratio - OCF 0.04

Property expense ratio 0.29

Real Estate expense ratio 0.33

Class I

Non-property expense ratio - OCF 0.85

Property expense ratio 0.29

Real Estate expense ratio 1.14

Class G

Non-property expense ratio - OCF 0.74

Property expense ratio 0.29

Real Estate expense ratio 1.03

Class U2

Non-property expense ratio - OCF 0.67

Property expense ratio 0.29

Real Estate expense ratio 0.96

The OCF and PER represent the total fund expenses and the total property expenses paid by the fund in the period respectively against its average net asset value.

This fund is a non-UCITS retail fund and we have adopted this disclosure to enable comparison across our fund range.

* Z share class launched on 1 September 2014

Page 47: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 43

Risk and reward profile

The fund currently has 10 types of share class in issue, Class A (income and accumulation), Class Z (income and accumulation), Class I (income and accumulation), Class G (income and accumulation) and Class U2 (income and accumulation).

The value of an investment in the fund can go up or down. When you sell your shares they may be worth less than you paid for them.

Please note that:

• The fund focuses on a particular asset class

• The fund focuses on a particular country

• As a category, shares are volatile

The following risks apply to investments in the fund. These could be triggered or made worse by unusual market conditions or unpredictable market events.

Counterparty risk The fund could lose money if an entity with which it interacts becomes unwilling or unable to meet its obligations to the fund.

Focus risk The fund’s value may fall where it has concentrated exposure to an issuer or type of security that is heavily affected by an adverse event.

Liquidity risk Certain assets could become hard to value or sell at a desired time and price.

Management risk Investment management techniques that have worked well in normal market conditions could prove ineffective or detrimental at other times.

Property risk Property values can go up and down and in extreme market conditions property values may move more significantly than bonds or shares.

Valuations are determined by independent property experts.

The full list of the fund’s risks are contained in the “Risk Warnings” section of the fund’s prospectus.

Page 48: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

44 Henderson UK Property OEIC

Portfolio statement as at 31 May 2015

Sector Investment Market Percentagevalue of total£000 net assets

%Direct Properties 77.62%Market values over £105m440 The Strand, London 186,400 5.29

Market values between £95m, and £105mRD Park, Hoddesdon 104,000 2.95

Market values between £70m and £95m12-16 Ryder Street, Ryder Court, LondonRobin Retail Park, Loire Drive, Wigan

163,900 4.65

Market values between £55m and £70mTower Retail Park, Crayford Road, CrayfordWindsor Office Park, BerkshireTravelodge, 100 Kings Cross Road, LondonKuehne and Nagel, Commercial Park, Derby

252,973 7.18

Market values between £45m and £55mCo-op Warehouse, Hardcase, Olive Road, West Thurrock, EssexDalton Park Outlet, Murton, County DurhamParkview, Great West Road, BrentfordSainsbury's, Lower Trinity Way, Wakefield

193,199 5.48

Market values between £40m and £45m2 Roundabout Avenue, Stockley Park2-14 Bunhill Row, LondonHayes Bridge Retail Park, Hillingdon, LondonMallard Retail Park, Bournemouth

168,703 4.79

Market values between £35m and £40mAsda, Wigmore Lane, LutonAsda, Argos and Poundstretcher, ManchesterEaling Gateway, 26, 28 & 30 Uxbridge Road, EalingBilton Way, Dallow Road, Luton

154,075 4.37

Market values between £30m to £35mB&Q Warehouse, 2 Solartron Road, FarnboroughTesco, Dodwells Road, HinckleySainsbury's, Butterley, Ripley62-64 Cornhill, LondonCrendon Industrial Estate, Thame, London

156,300 4.44

Market values between £25m and £30mMaidenhead Retail Park, Stafferton, MaidenheadBMI Harbour Hospital, St Mary's Road, PooleBlue Planet, Lowlands Road, Chatterley ValleyFerndown District Centre, Penny's Walk, FerndownBeacon Retail Park, Milton Keynes

Page 49: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 45

Portfolio statement (continued)

Sector Investment Market Percentagevalue of total£000 net assets

%Market values between £25m and £30m (continued)David Lloyd, Monkton Lane, FarnhamMilsom Place, Milsom Street, Bath

196,873 5.59

Market values between £23m and £25mDundas House, EdinburghThe Maltings, SalisburyMarks and Spencer, Albert Street, NottinghamAymer House, Chertsey, SurreyB&Q, Weston Road, CreweThe Zenith Building, Spring Gardens, ManchesterUnits 310-395, Centennial Park, Elstree

171,225 4.86

Market values between £20m and £23mTesco Superstore, Sizer Way, Hythe, Southampton142-146 High Road, Kilburn, LondonChalfont Grove, Narcot Lane, Chalfont St PeterMerlin 310, Barton Dock Road, ManchesterCineworld, Mary Ann Street, CardiffThe Interchange, Wested Lane, SwanleyCurrys, 12 Trojan Way, CroydonB&Q, Mucklow Hill, Halesowen, Birmingham

179,140 5.08

Market values between £16m and £20m1 Carey Lane, LondonThe Rivers Office Park, Denham Way, RickmansworthGallery Apartments, GlasgowBermondsey Square, LondonUnits A and B, Clay Lane West, DoncasterKidwells Park, Kidswell Park Drive, Maidenhead107-143 Muswell Hill Road, London22-24 Worple Road, LondonKeighley Retail Park, Hardings Road, KeighleyShakespeare's Head, 29 Great Marlborough, Soho

174,650 4.96

Market values between £13m and £16mForbury Park, Kenavon Way, ReadingBP, D2 Business Park, Dyce Drive, AberdeenLaura Ashley, BardonTK Maxx, 10 The Hayes, CardiffSecretary of State, Victoria House, CambridgePremier Foods, Centrium, St.AlbansTechnology Drive, Broughton Road, RugbyOakhill Trading Estate, Worsley, Salford99-101, London Road, CroydonIron Bridge Studios, Exeter, DevonWaterside Retail Park, Ashbourne, DerbyshireHanover Buildings, 56/84 Rose Street, EdinburghHouse of Fraser, 12-18 West Street, Chichester

189,850 5.39

Page 50: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

46 Henderson UK Property OEIC

Portfolio statement (continued)

Sector Investment Market Percentagevalue of total£000 net assets

%Market values between £10m and £13mInverurie Retail Park, 5 Oldmeldrum Road, InverurieKingsteignton Retail Park, Newton Abbot, Kingsteignton1/2 Hardwick Street, LondonSands 10 Industrial Estate, Hillbottom Road, High WycombeCribbs Causeway Centre, The Laurels, BristolB&Q Unit, Riverside Retail Park, TauntonChaucer House, The Office Park, Leatherhead, SurreyHomebase, 300 London Road, High WycombeHeathcote Industrial Estate, 10/10a Heathcote Way, WarwickVirgin Active, Riverside West, Smugglers Way, WandsworthDFS, Crittalls Corner, SidcupMarloes Buildings, Kensington Village, LondonOlympus House, Tachbrook Park, Leamington Spa, WarwickshireLakeside 5000, Cheadle Road, Cheadle180 West George Street, Glasgow

171,046 4.85

Market values between £6m and £10m1 & 3, High Street, Sidcup, KentSytner Car Dealership, Europa Way, Leamington SpaWycombe Sands Industrial Estate, High Wycombe7-9 Picadilly, Manchester18-22 Tavern Street & 13-19, Buttermark, Ipswich86-88 Market Street, Manchester1/3 Waterson Street, LondonEmpire Cinema, Birmingham Great Park, Rednal, BirminghamTravelodge, 10 West Street, ChichesterEccleshall Retail Park, EccleshallB&Q, Bridge Road, Welwyn Garden City31 Clerkenwell Close and 8 Bowling Green Lane, LondonMuseum Tavern, 49 Great Russell Street, HolbornTimet, 120 Holford Drive, BirminghamOdeon Cinema, KilmarnockThe Broadway Bar and Grill, Fulham Road, London38 Brushfield Street, LondonWickes, Unit 2, Radford Road, Wickes, CoventryFriend at Hand, Bloomsbury, 4 Herbrand Street, LondonUnit A, Thorneys Leys Park, Duckington Lane, WitneyArcadia, 15/16 The Parade and 2-4 Rose Lane, Canterbury

169,686 4.82Market values under £6mMoney Debt and Credit, 45 Clarendon Road, WatfordGoat Tavern, 3a Kensington High Street, London122 High Road, Roebuck, ChiswickRutland Arms, 15, Lower Mall, HammersmithThe Bedford, 77 Bedford Hill, London60-84 Parsons Green Lane, London3/7 Town Quay, Buildings 38, 40 and 43, SouthamptonUnits 34-76, Kiln Farm 3 Burners Lane, Milton KeynesBrighton Road, Shoreham-by-SeaUnits A&B, Connect 33, Boulton Road, ReadingBoots, 54-58 High Street, MaidenheadTwo Chairman, St.James's Park, 39 Dartmouth Street, LondonTrimbridge House, Trim Street, Bath

Page 51: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 47

Portfolio statement (continued)

Sector Investment Market Percentagevalue of total£000 net assets

%Market values under £6m (continued)

19-20 Upper Street, Islington, London99-115 Lordship Lane, East Dulwich, LondonGo Outdoors, Barton Street, GloucesterB&M, Speedfields Retail Park, Fareham10 Ship, Thames Bank, MortlakeSwan House, Abingdon Business Park, AbingdonStaples, Unit 11, The Forum, Stevenage1-3 Silver Street, BedfordBedford Riverside, Bedford

102,969 2.92

Special Purpose Vehicles 2.97%*Capital Business Park, Cambridge 53,258 1.51Silver Sea, Cairdean House, Edinburgh 17,808 0.51Silver Sea, Foxbridge House, Orpington 17,385 0.49Silver Sea, Bowes House, Halisham 16,022 0.46

104,473 2.97

Holding Certificates of Deposit 2.70%5,000,000 Australia & New Zealand Banking Group 0.5% 28/09/15 4,999 0.14

15,000,000 Bank Of Montreal 0.45% 15/06/15 15,000 0.445,000,000 Bank Of Montreal 0.50% 27/08/15 5,000 0.145,000,000 Bank Of Nova Scotia 0.5% 27/07/15 5,000 0.145,000,000 Citibank 0.56% 05/08/15 5,001 0.147,000,000 Ing Bank 0.6% 01/09/15 7,002 0.205,000,000 Nordea Bank 0.54% 07/09/15 5,000 0.145,000,000 Nationwide Building Society 0.83% 21/09/15 5,004 0.145,000,000 Oversea-Chinese Banking Corp 0.53% 28/08/15 5,000 0.14

25,000,000 Rabobank Nederland 0.48% 22/06/15 25,001 0.718,000,000 Svenska Handelsbanken 0.5% 22/07/15 8,000 0.235,000,000 United Overseas Bank 0.51% 29/06/15 5,000 0.14

95,007 2.70Holding Property Shares 4.12%

5,525,000 British Land 47,625 1.351,900,000 Hammerson 12,702 0.363,200,000 Land Securities 42,016 1.192,200,000 Great Portland Estates 18,227 0.52

30,300 Derwent 1,079 0.03108,783 Grainger 231 0.01

5,000,000 Londonmetric Property 8,525 0.24550,000 Shaftesbury 4,818 0.14215,924 Unite 1,344 0.04

1,600,000 Segro 4,900 0.14653,974 Safestore 1,784 0.05

3 Victoria House, Cambridge Ltd** 458 0.013 HEREF Leopard Luton Ltd** 1,159 0.031 Stax Monkton Ltd** 406 0.01

145,274 4.12

Investment assets 3,079,743 87.41Net other assets 443,655 12.59Net assets 3,523,398 100.00

* SPVs with properties due to be transferred** SPVs with properties already transferred to the OEIC and the shell is due to be liquidated in line with the accounting policy.

Page 52: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

48 Henderson UK Property OEIC

Statement of Authorised Corporate Director’s (ACD) responsibilities

The Financial Conduct Authority’s Collective Investment Schemes Sourcebook (COLL) requires the ACD to prepare financial statements for each annual accounting period which give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the financial affairs of the fund and of its revenue for the year. In preparing the financial statements the ACD is required to:

• select suitable accounting policies and then apply them consistently;

• comply with the requirements of the Statement of Recommended Practice for Authorised Funds issued by the Investment Management Association (IMA) in October 2010;

• follow generally accepted accounting principles and applicable accounting standards;

• keep proper accounting records which enable it to demonstrate that the financial statements, as prepared, comply with the above requirements;

• make judgements and estimates that are reasonable and prudent; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the fund will continue in operation for the foreseeable future.

The ACD is responsible for the management of the Fund in accordance with its Instrument of Incorporation, Prospectus and the Regulations. The ACD is also responsible for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Report of the Depositary to the shareholders of Henderson UK Property OEIC (the ‘Company’) for the year ended 31 May 2015

The Depositary is responsible for the safekeeping of all the custodial assets of the Company which is entrusted to it, for verifying ownership and maintaining a record of all other assets of the Company, and for the collection of revenue that arises from those assets.

It is the duty of the Depositary to take reasonable care to ensure that the Company is managed is accordance with the Financial Conduct Authority’s (‘FCA’) Collective Investment Schemes sourcebook (‘COLL’), the Open-Ended Investment Companies Regulations 2001 (SI 2001/1228) (‘the OEIC Regulations’), the Company’s Instrument of Incorporation and Prospectus, and from 22 July 2014, where applicable, the FCA’s Investment Funds sourcebook (‘FUND’), in relation to the pricing of, and dealings in, shares in the Company; the application of revenue of the Company; and the investment and borrowing powers of the Company.

Having carried out such procedures as we consider necessary to discharge our responsibilities as Depositary of the Company, it is our opinion, based on the information available to us and the explanations provided, that in all material aspects the Company, acting through the Authorised Corporate Director:

(i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the Company’s shares and the application of the Company’s revenue in accordance with COLL, the OEIC regulations, the Instrument of Incorporation and Prospectus of the Company and, where applicable, FUND.

(ii) has observed the investment and borrowing powers and restrictions applicable to the Company.

National Westminster BankLondon18 August 2015

Page 53: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 49

Independent Auditors’ Report to the Shareholders of Henderson UK Property OEIC (the ‘Company’)

Our opinionIn our opinion Henderson UK Property OEIC’s financial statements (the “financial statements”):• give a true and fair view of the financial position of the Company as at 31 May 2015 and of the net revenue and the net capital gains of

its scheme property and its cashflows for the period then ended; and

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, the Statement of Recommended Practice for UK Authorised Funds, the Collective Investment Schemes sourcebook and the Instrument of Incorporation.

What we have auditedThe financial statements of the Henderson UK Property OEIC which are prepared by Henderson Investment Funds Limited (the “Authorised Corporate Director”), comprise of:

• the balance sheet of the Company as at 31 May 2015;

• the statement of total return of the Company for the period then ended;

• the statement of change in net assets of the Company attributable to shareholders for the period then ended;

• the cashflow statement of the Company for the period then ended;

• the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information; and

• the distribution tables

The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), the Statement of Recommended Practice ‘Financial Statements of UK Authorised Funds’ issued by the Investment Management Association (the “Statement of Recommended Practice for Authorised Funds”), the Collective Investment Schemes sourcebook and the Instrument of Incorporation.

In applying the financial reporting framework, the Authorised Corporate Director has made a number of subjective judgements, for example in respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.

Opinions on matters prescribed by the Collective Investment Schemes sourcebookIn our opinion:• we have obtained all the information and explanations we consider necessary for the purposes of the audit; and

• the information given in the Authorised Corporate Director’s Report for the financial period for which the financial statements are prepared is consistent with the financial statements.

Other matters on which we are required to report by exceptionPropriety of accounting records and information and explanations received Under the Collective Investment Schemes sourcebook we are required to report to you if, in our opinion:

• proper accounting records have not been kept; or

• the financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

Responsibilities for the financial statements and the auditOur responsibilities and those of the Authorised Corporate DirectorAs explained more fully in the Authorised Corporate Director’s Responsibilities Statement set out on page 48, the Authorised Corporate Director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared for and only for the Company’s shareholders as a body in accordance with paragraph 4.5.12 of the Collective Investment Schemes sourcebook as required by paragraph 67(2) of the Open-Ended Investment Companies Regulations 2001 and for no other purpose.

We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Page 54: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

50 Henderson UK Property OEIC

What an audit of financial statements involves We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:

• whether the accounting policies are appropriate to the Company’s circumstances and have been consistently applied and adequately disclosed;

• the reasonableness of significant accounting estimates made by the Authorised Corporate Director; and

• the overall presentation of the financial statements.

In addition, we read all the financial and non-financial information in the Annual Report or Report and Accounts (the “Annual Report”) to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

PricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsGlasgow

18 August 2015

Notes:a) The maintenance and integrity of the Henderson Global Investor’s website is the responsibility of the Authorised Corporate Director; the

work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Independent Auditors’ Report to the Shareholders of Henderson UK Property OEIC (continued)

Page 55: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 51

Statement of total return for the period from 29 August 2014 to 31 May 2015

29/08/14 - 31/05/15

Notes £000 £000

Income

Net capital gains 4 133,491

Revenue 6 101,692

Expenses 7 (36,150)

Finance costs: Interest 9 -

Net revenue before taxation 65,542

Taxation 8 (13,107)

Net revenue after taxation 52,435

Total return before distributions 185,926

Finance costs: Distributions 9 (69,008)

Change in net assets attributable to

shareholders from investment activities 116,918

Statement of change in net assets attributable to shareholders for the period from 29 August 2014 to 31 May 2015

29/08/14 - 31/05/15

£000 £000

Opening net assets attributable to shareholders -

Transfer in from UK Property Unit Trust * 2,167,800

Transfer in from Old Mutual Property Fund** 452,134

Amounts receivable on issue of shares 832,233

Amounts payable on cancellation of shares (91,298)

3,360,869

Change in net assets attributable to shareholders from

investment activities (see above) 116,918

Retained distribution on accumulation shares 45,609

Unclaimed distributions 2

Closing net assets attributable to shareholders 3,523,398

* Relating to the conversion of the UK Property Unit Trust on 29 August 2014** Relating to the merger of the Old Mutual Property Fund on 15 January 2015, see other information section on page 1.

Page 56: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

52 Henderson UK Property OEIC

Balance sheet as at 31 May 2015

2015Notes £000 £000

Assets

Investment assets 3,079,743

Debtors 10 40,165

Cash and bank balances 11 440,939

Cash equivalents -

Total other assets 481,104

Total assets 3,560,847

Liabilities

Investment liabilities -

Creditors 12 28,384

Distribution payable on income shares 9,065

Total other liabilities 37,449

Total liabilities 37,449

Net assets attributable to shareholders 3,523,398

Certification of financial statements by Directors of the ACD

In accordance with the requirements of the Financial Conduct Authority’s Collective Investment Schemes Sourcebook, we hereby certify the investment report and financial statements on behalf of the Directors of Henderson Investment Funds Limited.

Lesley Cairney(Director)

18 August 2015

Page 57: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 53

Statement of cash flows for the period from 29 August 2014 to 31 May 2015

29/08/14 - 31/05/15

Notes £000 £000

Net cash inflow from operating activities 13 58,322

Servicing of finance

Distribution paid on income shares (19,744)

Net cash outflow from investing and servicing of finance (19,744)

Tax paid 672

Financial investment

Purchases of investments (828,045)

Transfer in from UK Property Unit Trust* (1,877,792)

Transfer in from Old Mutual Property Fund** (401,580)

Sales of investments 161,175

Net cash outflow from financial investment (2,946,242)

Net cash outflow before financing (2,906,992)

Creation of shares 820,364

Transfer in from UK Property Unit Trust* 2,167,800

Transfer in from Old Mutual Property Fund** 452,134

Cancellation of shares (92,366)

Net cash inflow from financing 3,347,932

Increase in cash 14 440,940

The accompanying notes are an integral part of the accounts.

*Relating to the conversion of the UK Property Unit Trust on 29 August 2014.

**Relating to the merger of the Old Mutual Property Fund on 15 January 2015, see other information section on page 1.

Page 58: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

54 Henderson UK Property OEIC

Notes to the financial statements as at 31 May 2015

1 Accounting policies(a) Basis of accountingThe financial statements have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the Statement of Recommended Practice for Authorised Funds (SORP) issued by the Investment Management Association (IMA) in October 2010, United Kingdom Generally Accepted Accounting Practice (UK GAAP), the COLL and the Instrument of Incorporation.

(b) Basis of valuation of investmentsProperty sharesThe valuation point is close of business on the last business day of the accounting period. Listed investments are valued at fair value as at 12 noon which is generally deemed to be the bid market price.

Unlisted or suspended securities are valued by the manager taking into account, where appropriate, latest dealing prices, valuation from reliable sources, financial performance and other relevant factors.

Certificates of depositsCertificates of deposit are valued by the ACD using a yield curve approach. The yield curve provides a graphic illustration of the relationship between redemption yields and instrument’s maturity dates, and from this an appropriate market yield can be derived for the instrument which can in turn be used to calculate its fair value.

Direct propertiesThe direct property investments of the fund are valued monthly on an open market basis, as defined in the appraisal and valuation manual prepared by the Royal Institution of Chartered Surveyors, and in accordance with the Instrument of Incorporation. The interests in property were last valued by CB Richard Ellis Limited on 29 May 2015.

The properties held by the fund are classified as investment properties. In accordance with accounting standard SSAP19, no depreciation is provided for on investment properties that are held as freeholds or on leases having more than 20 years unexpired, except for properties held on lease which are depreciated over the period when the unexpired lease term is 20 years on less.

In certain instances properties are purchased through intermediary holding vehicles or special purpose vehicles (SPVs). This is a direct property acquisition mechanism, with the intention to transfer the property to become a direct holding by the fund and liquidate the residual SPV entity as soon as is practicable. To appropriately reflect the economic substance of these transactions consolidated financial statements are not prepared. Any such SPVs held are included within investment assets in the balance sheet. The SPVs are fair valued by the manager and consist primarily of direct properties which are valued in line with the direct property valuation policy above. SPVs are separately presented in the portfolio statement and those where the properties have been transferred into the OEIC and liquidation process is due to commence or in progress are separately disclosed within the portfolio statement under property shares.

Residual assets on liquidation of the SPVs are transferred into the fund and treated as a capital distribution. If dividend distributions are made from the SPVs these are accounted for in line with accounting policy (2) below.

Accounting for investment propertiesIn accordance with UTIF abstract ‘operating lease incentives’ the value at which the properties are stated in the Balance Sheet is reduced by the total of unamortised lease incentives included as a separate asset within debtors.

(c) Revenue recognitionRevenue is included in the statement of total return on the following basis:• Rental revenue is accounted for on an accruals basis. Rental revenue received in advance is deferred and recognised as revenue over the period to which it relates. Rental revenue from properties which have been let subject to an initial rent free period, or lease incentive, is accounted for on a straight line basis over the terms of the lease, or until the next review date in accordance with UITF Abstract 28.Additional revenue arising from rent reviews will be recognised by accruing rent at the lower of a counter offer received from the tenant and the expected rental value at the time of review.• Lease surrender premiums are recognised as revenue on the date the lease is terminated.• Dividends on equities and preference stocks are recognised when the securities are quoted ex-dividend.• Income from unquoted equity investments is recognised when the entitlement to the dividend is established.• Interest on bank deposits, Certificates of deposits and fixed interest bearing securities is recognised on an accruals basis.• Revenue distributions from (Real Estate Investment Trusts) UK REIT’s will be split into two parts, a Property Income Distribution (PID)

made up of rental revenue and a non-PID element, consisting of non-rental revenue. The PID element is subject to Corporation Tax, while the UK dividend will be treated as franked revenue.

Page 59: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 55

Notes to the financial statements (continued)

1 Accounting policies (continued)

(c) Revenue recognition (continued)

• Lease incentive debtor, the value of a lease incentive is spread over the entire lease term.• Rent free period debtor is the value of a lease incentive spread over the period to the first rent review, being the point at which the rent

is reset to market rates.

(d) Service chargesService charges are covered by the tenant while the property is occupied unless specified in the lease agreement.In accordance with FRS5 ‘Reporting the Substance of Transactions’ (Application note G), service charges are included within income and expenses in the Statement of Total Return.

(e) Treatment of expensesAll expenses (other than those relating to the purchase and sale of investments and stamp duty land tax arising on sales and repurchases of shares in the fund) are charged against income (see distribution policy).

Expenditure on properties which is not deemed to be of a capital nature is charged against the income of the fund.

Direct acquisition costs are capitalised at time of purchase. Significant capital enhancements and refurbishment expenditure will also be capitalised.

The ACD periodic charge is accrued on a daily basis by reference to the value of the property of each share on the previous dealing day and the amount due for each month is payable on the last working day of the month.

General Administration ChargeAll fees with the exception of the ACD periodic charge, Depositary fees, Safe custody fees, Service charges, property membership fees, certain legal and professional fees and valuation fees have been replaced by a single ad valorem charge, the General Administration Charge (GAC). The ACD believes that the GAC creates more efficiency around the charging process than more traditional methods.

The ACD is taking upon itself the risk that the market value of the funds will fall to the extent that the GAC will not fully recompense it for charges and expenses that the ACD would otherwise be entitled to charge to those funds, and the ACD is therefore affording a degree of protection in relation to costs to investors.

Allocation of revenue and expenses to share classesWith the exception of the ACD’s periodic charge and the GAC, which are directly attributable to individual share classes, all revenue and expenses are allocated to share classes pro rata to the value of the net assets of the relevant share class on the day that the revenue or expense incurred.

For further details please refer to prospectus.

(f) TaxationProvision is made for tax at the current rates on the excess of taxable revenue over allowable expenses, with relief for overseas taxation taken where appropriate.

UK dividend revenue is disclosed net of any related tax credit.

Corporation tax is charged at 20% of the revenue liable to corporation tax less expenses.

Deferred tax is provided on all timing differences that have originated but not reversed at the balance sheet date other than those recorded as permanent differences. Deferred tax is provided at the average rate of tax expected to apply. Deferred tax assets and liabilities are not discounted to reflect the time value of money.

Deferred tax assets are only recognised to the extent it is regarded as more likely than not that there will be taxable profits against which the future reversal of underlying timing differences can be offset.

(g) Exchange ratesForeign currency transactions are translated into sterling at the exchange rate ruling at the date of the transaction. Assets and liabilities expressed in foreign currencies at the end of the accounting period are translated into sterling at the exchange rates ruling at 12 noon on the last valuation day of the accounting period.

Page 60: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

56 Henderson UK Property OEIC

Notes to the financial statements (continued)

2 Distribution policyWhen income from investments exceeds expenses, a distribution will be made. Should expenses exceed income there will be no distribution and the shortfall will be transferred from the capital account at year end.

For the purpose of determining the distribution, all of the ACD periodic charge is borne by capital. The ACD’s periodic charge has been added back for the purpose of determining the amount available for distribution.

Income attributed to accumulation shareholders is retained at the end of each distribution period and represents a reinvestment of revenue.

The policy of the fund is to make dividend distributions to shareholders on 31 July, 31 October, 31 January and 30 April each year.

The fund applies a policy of income equalisation.

Income equalisation ensures that part of the price on purchase of a share reflects the relevant share of accrued income received or to be received by the fund. This capital sum is returned to a shareholder (or where accumulation shares are held, it will be accumulated) with the first allocation of income in respect of a share issued during an accounting period. The amount representing the income equalisation in the share price is a return of capital, and is not itself taxable in the hands of shareholders but must be deducted by them from the price of the shares for the purpose of calculating any liability to capital gains tax.

All distributions unclaimed for a period of six years after having become due for payment shall be forfeited and shall revert to the funds.

3 RiskIn pursuing its investment objective, a significant proportion of the fund’s assets are in commercial properties. The fund also holds other financial instruments which may comprise:• Property related securities, non property related securities and shares in collective investment schemes; and• Cash, liquid resources and short-term debtors and creditors that arise directly from its operations; and• Short-term borrowings used to finance investment activity.

The fund may also enter into derivatives and forward exchange contracts. The purpose of such financial instruments is efficient portfolio management, and may also be used for hedging or meeting fund’s investment objectives.

The fund manager has responsibility for monitoring the portfolio in accordance with the investment objective and seeks to ensure that investments in direct properties and individual securities also meet a risk reward profile that is acceptable.

The main risks arising from financial instruments are direct property, credit, liquidity and market price risks.

(a) Direct property riskA significant portion of the fund’s assets are invested in tangible properties. These are exposed to specific risks including:• Reduced liquidity; and• Sector exposure risk.

Reduced liquidityBy their very nature direct properties are less liquid and the investments are not readily realisable compared to bonds and equities. Sales may take a number of months, as property is slow to transact in normal market conditions and hence is illiquid.

Sector exposure riskThe fund’s assets are invested mainly in direct properties and property securities. As such the fund is exposed to the sector specific risk as a result of its concentration in this market sector. The fund is also exposed to specific sector risk through the tenants of the direct properties invested in. In addition the rental income is dependent on the creditworthiness of the tenants.

Page 61: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 57

Notes to the financial statements (continued)

3 Risk (continued)

(b) Market riskMarket risk is the risk that the value of the fund’s investments or the benefits arising thereon will fluctuate because of changes in market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk, and other price risk.

Foreign currency riskForeign currency risk is the risk that the value of each fund’s investments will fluctuate as a result of changes in foreign currency exchange rates. The revenue and capital value of the fund’s assets are mainly denominated in sterling, the fund’s functional currency.Therefore, the financial statements are not subject to any significant risk of currency movements. This is consistent with the exposure during the prior year.

Interest rate riskInterest rate risk is the risk that the value of the fund’s fixed rate investments and revenue may fluctuate as a result of interest rate changes. The revenue of the fund may be affected by changes to interest rates relevant to particular securities or as a result of the Investment Manager being unable to secure similar returns on the expiry of contracts or sale of securities. The value of debt securities may be affected by interest rate movements or the expectation of such movements in the future. The majority of the fund’s financial assets are investments which neither pay interest nor have a maturity date. Therefore the fund’s exposure to interest rate risk is considered insignificant. This is consistent with the exposure during the prior year.

Other market price riskOther market price risk arises mainly from the uncertainty about future prices of direct property investments and property related securities held. It represents the potential loss the fund might suffer through holding market positions in the face of price movements. The Investment Manager has the responsibility for monitoring the existing portfolio selection in accordance with the fund’s investment objectives and seeks to ensure that individual stocks meet an acceptable risk reward profile.

Whilst the value of direct property is independently valued on a month by month basis, such valuations are a matter of the valuer’s opinion and such values may or may not be achieved on a sale.

(c) Liquidity riskThe fund’s assets, with the exception of direct properties, and SPVs also comprise of readily realisable securities, which can be sold to meet liquidity requirements. The liquidity risk of the fund is the redemption of any shares investors wish to sell. Assets from the fund may need to be sold if insufficient cash is available to finance such redemptions.

The purchase of a property investment or the funding of a new development can involve significant sums of money. The fund plans for business activity and operates a detailed cash forecasting model that is reviewed regularly. The fund has access to loans and borrowing facilities in the event of significantly increased liquidity risk. Where investments cannot be realised in time to meet any potential liability, the fund may borrow up to 10% of the value of the fund property to ensure settlement.

(d) Credit riskCredit risk is the risk that an issuer, counterparty or tenant in respect of an investment will be unable or unwilling to meet a commitment that it has entered into with the fund. In respect of property investments, the event of default by a tenant, the fund will suffer a rental shortfall and additional costs including legal expenses in maintaining, insuring and reletting the property.

(e) Sensitivity analysisA sensitivity analysis has not been provided as no derivative activity has been undertaken during the period.

Page 62: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

58 Henderson UK Property OEIC

Notes to the financial statements (continued)

4 Net capital gainsNet capital gains on investments during the period comprise:

2015

£000

Investment in direct properties 117,174

Non-derivative securities 16,325

Transaction costs (8)

Net capital gains 133,491

The above includes: Realised gains 10,797

Unrealised gains 122,702

133,499

5 Portfolio transaction costs2015

£000

Purchases in period before transaction costs 3,061,800

Stamp Duty 34,015

Legal fees 2,240

Agents Fees 8,081

Other Fees 911

Commissions 325

Taxes 45

Total purchase transaction costs* 45,617

Purchases including transaction costs 3,107,417

Sales in period before transaction costs 161,470

Stamp Duty -

Legal fees (70)

Agents Fees (186)

Other Fees (8)

Commissions (31)

Taxes -

Total sale transaction costs* (295)

Sales net of transaction costs 161,175

Transaction handling charges* 8

* Theses amounts have been deducted in determining net capital gains.

Inspecie from UK Property Unit Trust has been excluded from the above transaction costs of £1,877,791,410.

Inspecie from Old Mutual Property Fund has been excluded from the above transaction costs £401,581,762.

Page 63: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 59

Notes to the financial statements (continued)

6 Revenue

2015

£000

Bank interest 1,888

Certificates of deposit revenue 80

Rental Income 91,430

Service Charge income 6,432

Stock dividends 762

UK dividends 276

UK PID income 824

Total revenue 101,692

7 Expenses

2015

£000

Payable to the ACD, associates of the ACD

and agents of either of them:

ACD's periodic charge 20,835

General administration charge* 2,358

23,193

Payable to the Depositary, associates of the Depositary

and agents of either of them:

Depositary fees 389

Safe custody fees 3

392

Other expenses:

Valuation fees 380

Legal and professional fees 1,126

Service charges 11,059

12,565

Total expenses 36,150

Irrecoverable VAT is included in the above expenses where relevant.

*The current audit fee, which is levied through GAC, is £40,200, however, the GAC charge does not fully recompense the ACD for

expenses charged to the fund.

Page 64: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

60 Henderson UK Property OEIC

8 Taxation

a) Analysis of charge in the period

The tax charge comprises:

2015

£000

UK corporation tax 12,782

Adjustment in respect of amounts transfered from the Unit Trust vehicle (343)

Total current tax (note 8b) 12,439

Deferred tax (note 8c) 668

Total taxation 13,107

b) Factors affecting current tax charge for the periodThe tax assessed for the period is different to the standard rate of corporation tax in the UK for authorised open ended investment

companies (OEICs) of 20%. The differences are explained below.

2015

£000

Net revenue before taxation 65,542

Corporation tax at 20% 13,108

Effects of:

Adjustment in respect of amounts transferred from the Unit Trust vehicle (343)

Expenses not deductible for tax purposes 397

Effect of deferred tax on capital allowances (668)

UK dividends* (55)

Current tax charge for the period (note 8a) 12,439

* As an OEIC this item is not subject to corporation tax. OEICS are exempt from tax on capital gains made in the UK. Therefore, any capital return is not included within the reconciliation as

above.

c) Deferred tax

Provision in respect of accrued income transferred from the Unit Trust vehicle 63

Deferred tax charge for period (note 8a) 668

Provision at end of period 731

d) Factors that may affect future tax charges

There were no factors that may affect future tax charges at the current period end.

Notes to the financial statements (continued)

Page 65: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 61

9 Finance costs

Distributions and interestThe distributions take account of revenue received on the creation of shares and revenue deducted on the cancellation of shares, and

comprise:

2015

£000

Interim income 19,746

Interim accumulation 29,942

Final income 9,065

Final accumulation 15,667

74,420

Amounts deducted on cancellation of shares 2,173

Amounts received on issue of shares (7,585)

Finance costs: Distributions 69,008

Total finance cost 69,008

Net revenue after taxation 52,435

Corporation tax in the capital account (94)

ACD periodic charge paid from capital 20,835

Tax relief on ACD periodic charge (4,168)

Finance cost: Distributions 69,008

Details of the distribution per share are set out in the distribution table on pages 64 to 66.

10 Debtors

2015

£000

Accrued revenue 4,766

Amounts receivable for issue of shares 19,454

Lease incentive debtor 4,686

Rent free periods debtor 9,215

Merger debtor 313

Other debtors 1,731

Total debtors 40,165

11 Cash and bank balances

2015

£000

Cash and bank balances 64,226

Short term deposits 376,713

Total cash and bank balances 440,939

Notes to the financial statements (continued)

Page 66: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

62 Henderson UK Property OEIC

12 Creditors

2015

£000

Accrued ACD's periodic charge 2,810

Accrued Depositary's fees 42

Accrued other expenses 542

Amounts payable for cancellation of shares 1,105

Corporation tax payable 8,878

Deferred tax payable 731

Accrued fees on property purchases 2,294

Prepaid rental income 7,812

VAT payable 4,170

Total creditors 28,384

13 Reconciliation of net return before finance costs and taxation to net cash inflow from operating activities

2015

£000

Total return before distributions for the year 185,926

Taxation 13,107

Net return before finance costs and taxation 199,033

Adjustments for:

Decrease in accrued revenue (12,900)

Increase in accruals 5,688

Transaction charges paid from capital 8

Gain/(loss) on investment (133,507)

58,322

14 Analysis of changes in net debt

29 August 2014

Currency differences

Cash flows At 31 May 2015

£000 £000 £000 £000

Net cash:

Cash and short term deposits - - 440,940 440,940

- - 440,940 440,940

Notes to the financial statements (continued)

Page 67: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 63

Notes to the financial statements (continued)

15 Contingent liabilities and commitments At the balance sheet date the Fund had entered into forward funding and capital expenditure commitments on various assets in the property portfolio. These undertakings are variable, dependent on a number of outcomes and independent valuations. The following is a commitment of £79.2m on the properties.

Property Total

£’000

Bedford, Bedford Riverside 24,513

Cambridge, Capital Park 3,991

London, Cornhill 239

London, Hackney 12,108

Dalton Park 30,108

Maidenhead 2,853

Muswell Hill Road 35

Rickmansworth 5,386

Total capital expenditure 79,233

16 Related party transactions The Financial Reporting Standard number 8 (FRS 8) on ‘Related Party Disclosures’ requires the disclosure of details of material transactions between the Fund and any related parties. Under the FRS the ACD are deemed to be a related party. All transactions and balances associated with the ACD are disclosed within the ‘Statement of total return’, ‘Statement of change in net assets attributable to Shareholders’ and the ‘Balance sheet’ on pages 51 and 52 and notes 7, 10 and 12 on pages 59 to 62 including all creations and cancellations where the ACD acted as principal. Cofunds Nominees Limited, as a material shareholder, is a related party holding shares comprising 17.12% of the total net assets attributable to shareholders. Material transactions throughout the year such as creations and cancellations for these shareholders are included in the Statement of change in net assets attributable to shareholders.

17 Shareholder’s funds The Fund currently has 5 share classes available; Class A, Class I (Institutional), Class G, Class U2 and Class Z. The annual management charge on each share class is as follows: Class A Income & Accumulation shares 1.50% Class Z Income & Accumulation shares 0.00% *Class I Income & Accumulation shares 0.75% Class G Income & Accumulation shares 0.675% Class U2 Income & Accumulation shares 0.60%

* Charges for managing Z class shares are levied outside the Fund and are agreed between the ACD and investors.

The net asset value of each share class, the net asset value per share and the number of shares in each class are given in the comparative table on page 40. The distribution per share class is given in the distribution table on pages 64 to 66. All share classes have the same rights on winding up.

18 Subsequent event The UK Property OEIC completed on 5 June 2015 a property purchase of offices valued at £90m in Union Street, London and is an SPV.

Page 68: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

64 Henderson UK Property OEIC

Distribution tables for the period ended 31 May 2015 (in pence per share)

Interim dividend distribution (accounting date 30 November 2014, paid on 30 January 2015) Group 1: shares transferred on conversion on 29 August 2014 Group 2: shares purchased on or after 29 August 2014

Net Equalisation Distribution revenue paid

30/01/2015Class A incomeGroup 1 0.8385 - 0.8385 Group 2 0.5581 0.2804 0.8385

Class A accumulationGroup 1 1.6705 - 1.6705 Group 2 0.8526 0.8179 1.6705

Class Z incomeGroup 1 0.8731 - 0.8731 Group 2 0.5182 0.3549 0.8731

Class Z accumulationGroup 1 0.8731 - 0.8731 Group 2 0.6818 0.1913 0.8731

Class I incomeGroup 1 0.9411 - 0.9411 Group 2 0.4430 0.4981 0.9411

Class I accumulationGroup 1 1.0236 - 1.0236 Group 2 0.4687 0.5549 1.0236

Class G incomeGroup 1 0.4709 - 0.4709 Group 2 0.1892 0.2817 0.4709

Class G accumulationGroup 1 0.4856 - 0.4856 Group 2 0.1556 0.3300 0.4856

Class U2 incomeGroup 1 0.4647 - 0.4647 Group 2 0.2658 0.1989 0.4647

Class U2 accumulationGroup 1 0.4733 - 0.4733 Group 2 0.2108 0.2625 0.4733

Page 69: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 65

Distribution tables (continued)

Interim dividend distribution (accounting date 28 February 2015, paid on 30 April 2015) Group 1: shares purchased prior to 1 December 2014 Group 2: shares purchased on or after 1 December 2014

Net Equalisation Distribution revenue paid

30/04/2015Class A incomeGroup 1 0.7844 - 0.7844 Group 2 0.6442 0.1402 0.7844

Class A accumulationGroup 1 1.5762 - 1.5762 Group 2 1.5191 0.0571 1.5762

Class Z incomeGroup 1 0.8795 - 0.8795 Group 2 0.6688 0.2107 0.8795

Class Z accumulationGroup 1 0.8871 - 0.8871 Group 2 0.8871 - 0.8871

Class I incomeGroup 1 0.9488 - 0.9488 Group 2 0.4666 0.4822 0.9488

Class I accumulationGroup 1 1.0411 - 1.0411 Group 2 0.4060 0.6351 1.0411

Class G incomeGroup 1 0.4718 - 0.4718 Group 2 0.2260 0.2458 0.4718

Class G accumulationGroup 1 0.4909 - 0.4909 Group 2 0.4376 0.0533 0.4909

Class U2 incomeGroup 1 0.4627 - 0.4627 Group 2 0.2632 0.1995 0.4627

Class U2 accumulationGroup 1 0.4754 - 0.4754 Group 2 0.2320 0.2434 0.4754

Page 70: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

66 Henderson UK Property OEIC

Distribution tables (continued)

Final dividend distribution (accounting date 31 May 2015, paid on 31 July 2015) Group 1: shares purchased prior to 1 March 2015 Group 2: shares purchased on or after 1 March 2015

Net Equalisation Distribution revenue payable

31/07/2015Class A incomeGroup 1 0.7224 - 0.7224 Group 2 0.3278 0.3946 0.7224

Class A accumulationGroup 1 1.4631 - 1.4631 Group 2 0.4947 0.9684 1.4631

Class Z incomeGroup 1 0.7360 - 0.7360 Group 2 0.1042 0.6318 0.7360

Class Z accumulationGroup 1 0.7486 - 0.7486 Group 2 0.3106 0.4380 0.7486

Class I incomeGroup 1 0.7502 - 0.7502 Group 2 0.2369 0.5133 0.7502

Class I accumulationGroup 1 0.8303 - 0.8303 Group 2 0.2855 0.5448 0.8303

Class G incomeGroup 1 0.3768 - 0.3768 Group 2 0.1071 0.2697 0.3768

Class G accumulationGroup 1 0.3954 - 0.3954 Group 2 0.1359 0.2595 0.3954

Class U2 incomeGroup 1 0.3771 - 0.3771 Group 2 0.1376 0.2395 0.3771

Class U2 accumulationGroup 1 0.3908 - 0.3908 Group 2 0.1425 0.2483 0.3908

Page 71: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 67

Additional information – unaudited

This unaudited additional information section has been prepared by and is the responsibility of HIFL, as AIFM to the Fund, to meet the periodic disclosure requirements of AIFMD. This information does not form part of the audited financial statements of the Fund, but does reference some sections therein and should be read in conjunction with the audited financial statements and Fund Prospectus. Please note the reporting period for this section covers the period from 29 August 2014 to 31 May 2015.

1. RISK PROFILEInvestment Objective and Policy

The Investment objective and policy which outlines the investment approach for the fund is stated above within the ACD’s report and in more detail in the Prospectus within the section headed ‘INVESTMENT OBJECTIVE AND POLICY AND PROFILE OF INVESTOR’.

The fund invests primarily in commercial property and property related securities to achieve its objective ofa high income together with some growth of both income and capital.

From time to time and in particular during periods of uncertain or volatile markets, the Investment Manager may choose to hold a substantial proportion of the property of the Company in money-market instruments and/or cash deposits.

There is no certainty that the investment objective of the fund will actually be achieved and no warranty or representation is given to this effect.

Investment Powers and Limits which applied to the fund are outlined in the fund Prospectus which details the following matters: Investment in Immovable Property; General Restrictions; Limits with the exception of Government and Public Securities; Government and Public Securities; Collective investment schemes; Investment in other group funds; Investment in warrants and nil and partly paid securities; Cash, money market instruments and deposits; Derivatives; Borrowing and Leverage; Stock lending; Eligible Markets; and Dealing Arrangements.

Permitted Asset Types The fund is permitted to hold the following types of assets:

• Immovables • Transferable securities• Units in collective investment schemes • Money market instruments• Derivatives and forward foreign exchange contracts• Deposits• Cash and near cash

Derivative instruments and forward foreign exchange contracts may be used for the purposes of efficient portfolio management and currency hedging. As the market in property derivatives develops, derivatives may be used outside of efficient portfolio management to meet the fund’s investment objective. If the Manager decides to use derivatives for purposes outside of efficient portfolio management, the ACD will give notice to shareholders in the next Short Report.

Risk Types

The investments of the fund are subject to normal market fluctuations and other risks inherent in investing in securities. There can be no assurance that any appreciation in the value of shares will occur. The prices of the shares are calculated daily and are influenced by the value of the assets held by the fund.

The value of investments and the income derived from them may fall as well as rise and investors may not recoup the original amount they invest in the fund.

The main categories of risk to which the fund is or might reasonably be expected to have been exposed include:

a) direct property risk: being reduced liquidity; and sector exposure risk;b) market risk: being foreign currency risk; interest rate risk; and other market price risk; c) liquidity risk; andd) credit risk

whose impact on the fund is detailed in Note 3 to the Financial Statements covering Risk.

Page 72: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

68 Henderson UK Property OEIC

The fund is also subject to operational risk, being the risk of loss resulting from inadequate internal processes and failures in relation to people and systems or from external events; this includes risk resulting from the trading, settlement, safe-keeping and valuation procedures operated on behalf of the fund. The basis of valuation and accounting treatment are detailed in Note 1 to the Financial Statements covering Accounting Policies.

LeverageThe fund may achieve leverage through borrowing, the use of derivatives, forward foreign exchange contracts and/or other non-fully funded instruments or techniques such as stock-lending. The use of leverage may significantly increase the investment/market and counterparty risk of the fund through non-fully funded exposure to underlying markets or securities. The fund also has the power to invest directly or indirectly in vehicles, for example unregulated collective investment schemes, which may be highly leveraged.

The fund’s borrowing (financial leverage) must not, on any business day, exceed 10% of the value of the fund Property.

Additional RisksIn addition to the above, the Prospectus includes the following risks for the fund within the section headed ‘Risk Warnings’:

Effect of initial charge; Effect of market timing charge; Suspension of dealings in shares; Currency exchange rates; Derivatives; Exchange Traded Funds; Income and annual management charge; Cancellation rights; Unregulated Collective Investment Schemes; Past performance; Equity investments; Leverage; Inflation risk;Charges to capital;Currency exchange rates;Hedged share classes; andStock lending agents’ fees.

Real Estate Specific RisksGeneral Real Property Risks;Property valuation;Liquidity of property investment;Insurance;Changes in laws and regulation;SDLT savings schemes;Economic and political;Development risks;Environmental risks – contamination;Environmental risks – flooding; and Residential property.

For a detailed explanation of the above and further risks involved in investing in the fund, reference should be made to the Prospectus; investors and prospective investors are recommended to discuss all potential conflicts of interest and risks with their own legal, tax and financial advisors.

Additional information – unaudited (continued)

Page 73: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 69

Additional information – unaudited (continued)

2. RISK CONTROLS AND LIMITSThe risk management policy and process for the fund is designed to satisfy the requirements of the AIFM Directive; associated ESMA regulatory technical standards and guidelines; and local regulations. The framework for risk controls and limits for the fund is documented within HIFL’s Risk Management Policy and Process document, which outlines for each main risk category above the controls and risk measures in place, including stress tests for assessing sensitivity to the most relevant risks. This risk framework includes setting of limits and monitoring against those limits.

There have been no breaches of risk limits set for the fund in the period under review and there are no such breaches anticipated.

Risk Management SystemsStraight-through processing via a deal Order and Management System (“OMS”) is utilised for listed securities, exchange-traded derivatives and OTC derivatives contracts with connectivity to third-party affirmation and trade repository services.

Portfolio modelling and investment management functions (including order-raising, dealing and trade execution) are performed using third-party software applications including Charles River Development OMS. Fund pricing and accounting services are outsourced to a third-party administrator (BNP Paribas Securities Services) which utilises Hiportfolio software.

The IT tools to which the Henderson Risk, Compliance and Operations teams have access for independent monitoring and risk measurement purposes include:

• Charles River system’s Compliance module for investment restrictions monitoring;• ArcLogics operational risk database;• RiskMetrics, UBS Delta, Style Research, Finanalytica and Barra Aegis for market risk measurement; and• Bloomberg for market data and price-checking

These are supplemented by in-house developments: Derivatives Risk and Compliance database (“DRAC”) and Counterparty Exposure (“CER”) reports. There have been no changes in the main features of the risk management systems for the fund in the period under review.

3. LEVERAGELeverage is measured in terms of the fund’s overall exposure and includes any method by which the exposure of the fund is increased whether through borrowing of cash or securities, or leverage embedded in derivative positions or by any other means. HIFL as the AIFM is required to calculate and monitor the level of leverage of the fund, expressed as the ratio between the total exposure of the fund and its net asset value with exposure values being calculated by both the gross method and commitment method as defined by the AIFM Directive and associated ESMA regulatory technical standards and guidelines.

Exposure values under the Gross Method basis are calculated as the absolute value of all positions of the fund; this includes all eligible assets and liabilities, relevant borrowings, derivatives (converted into their equivalent underlying positions) and all other positions even those held purely for risk reduction purposes, such as forward foreign exchange contracts held for currency hedging.

The gross method of exposure of the fund requires the calculation to: • include the sum of all non-derivative assets held at market value, plus the absolute value of all such liabilities; • exclude cash and cash equivalents which are highly liquid investments held in the base currency of the fund, that are readily

convertible to a known amount of cash, are subject to an insignificant risk of change in value and provide a return no greater than the rate of a three month high quality bond;

• convert derivative instruments into the equivalent position in their underlying assets; • exclude cash borrowings that remain in cash or cash equivalents and where the amounts payable are known; • include exposures resulting from the reinvestment of cash borrowings, expressed as the higher of the market value of the investment

realised or the total amount of cash borrowed; and • include positions within repurchase or reverse repurchase agreements and securities lending or borrowing or other similar

arrangements.

Exposure values under the Commitment Method basis are calculated on a similar basis to the above, but may take into account the effect of netting off instruments to reflect eligible netting and hedging arrangements on eligible assets and different treatment of certain cash and cash equivalent items in line with regulatory requirements.

Page 74: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

70 Henderson UK Property OEIC

Additional information – unaudited (continued)

The table below sets out the current maximum limit and actual level of leverage for the fund for the period ended 31 May 2015:

Leverage as a percentage of net asset value

Gross Method Commitment Method

Maximum level 200% 150%

Actual level as at 31 May 2015 100% 100%

There have been no breaches of the maximum level during the period, no changes to the maximum level of leverage employed by the fund or to its right of reuse of collateral or any guarantee granted under the leveraging arrangements.

4. LIQUIDITY MANAGEMENTThere have been no changes to the arrangements for managing the liquidity of the fund during the period and none of the fund’s assets are subject to special arrangements arising from their illiquid nature.

5. REMUNERATIONFollowing the implementation of AIFMD in the UK, all authorised AIFMs are required to comply with the AIFMD Remuneration Code. On 22 July 2014, HIFL became an AIFM. The AIFMs financial year end is 31 December, it is therefore anticipated that the AIFMs Remuneration policy and associated financial disclosures will be made within these Annual Reports from 31 December 2015, following its first full performance year. Prior to this date the AIFM would be part way through its first performance year and the information available would not be relevant or provide a proper basis for comparison.

Page 75: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson UK Property OEIC 71

If you have any queries about your Fund holding, either contact your professional adviser or telephone us on one of the numbers below:

For dealing enquiries including buying and selling shares please telephone at local rate: 0845 608 8703

The following lines are also available:

Client Services: 0800 832 832

or you can contact us via e-mail at [email protected]

We may record telephone calls for our mutual protection and to improve customer service.

Shareholder enquiries

Page 76: Henderson UK Property OEIC - … · Henderson UK Property OEIC is governed by the ... retail scheme complying with the investment and borrowing powers rules in chapter 5 of the

Henderson Global Investors is the name under which Henderson Global Investors Limited (reg. no. 906355), Henderson Fund Management

Limited (reg. no. 2607112), Henderson Investment Funds Limited (reg. no. 2678531), Henderson Investment Management Limited

(reg. no. 1795354), Henderson Alternative Investment Advisor Limited (reg. no. 962757), Henderson Equity Partners Limited (reg. no.

2606646), Gartmore Investment Limited (reg. no. 1508030), (each incorporated and registered in England and Wales with registered

office at 201 Bishopsgate, London EC2M 3AE) are authorised and regulated by the Financial Conduct Authority to provide investment

products and services. Telephone calls may be recorded and monitored. Ref 34V.

Unless otherwise stated, all data is sourced by Henderson Global Investors.

H016953/0615