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Form 8-K Kennedy-Wilson Holdings, For: Aug 15

August 15, 2022 6:37 AM EDT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________

FORM 8-K
_____________
CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
August 15, 2022
_____________
KENNEDY-WILSON HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
_____________

                
Delaware001-3382426-0508760
 (State or other jurisdiction
 of Incorporation)
(Commission File Number)(IRS Employer Identification No.)

151 S El Camino Drive Beverly Hills, California 90212
(Address of principal executive offices)(Zip Code)

(310) 887-6400
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)
_____________


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):

    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




(See definition of “large accelerated filer," "accelerated filer," "smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act). (Check one):
Large accelerated filer  Accelerated filer
Non-accelerated filer  Smaller reporting company
Emerging growth company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $.0001 par valueKWNYSE
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     




ITEM 7.01 REGULATION FD DISCLOSURE

On August 15, 2022, Kennedy Wilson Europe Real Estate Limited (“KWE”), a wholly-owned subsidiary of Kennedy-Wilson Holdings, Inc. (the “Company”), posted its interim IFRS financial statements for the six-month period ended June 30, 2022 on the Company’s website in compliance with certain covenants set forth under its unsecured bonds. A copy of the results is furnished herewith as Exhibit 99.1.

The information in this report (including Exhibit 99.1) is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.


Item 9.01 Financial Statements and Exhibits.


Exhibit No.
Description
99.1
104Cover Page Interactive Data File - The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.








SIGNATURES
    
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
                    
    
KENNEDY-WILSON HOLDINGS, INC.
By:/s/ JUSTIN ENBODY
Justin Enbody
Chief Financial Officer


Date: August 15, 2022



Exhibit 99.1
Kennedy Wilson Europe Real Estate Limited
Condensed Consolidated Financial Statements
For the six month period ended 30 June 2022




        Page | 1


Contents
    Page
Independent review report to Kennedy Wilson Europe Real Estate Limited    3
Condensed consolidated income statement    5
Condensed consolidated statement of comprehensive income    6
Condensed consolidated balance sheet    7
Condensed consolidated statement of changes in equity    8
Condensed consolidated cash flow statement    10
Notes to the condensed consolidated interim financial statements    11


        Page | 2


Independent review report to Kennedy Wilson Europe Real Estate Limited (the “Company”)

Conclusion
We have been engaged by Kennedy Wilson Europe Real Estate Limited (the “Company”) to review the condensed consolidated financial statements (the “interim financial statements”) in the half-yearly financial report for the six months ended 30 June 2022 of the Company and its subsidiaries, which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated cash flow statement, and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements in the half-yearly financial report for the six months ended 30 June 2022 are not prepared, in all material respects, in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the European Union (the “EU”).

Scope of review
We conducted our review having regard to the Financial Reporting Council’s International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated financial statements.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Directors’ responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors.
The annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the EU. The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 ‘Interim Financial Reporting’, as adopted by the EU.

Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of consolidated financial statements in the half-yearly financial report based on our review.


        Page | 3


Independent review report to Kennedy Wilson Europe Real Estate Limited (the ‘Company’) continued

The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the Company in accordance with the terms of our engagement letter. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.


Caroline Flynn
For and on behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St Stephen’s Green
Dublin 2
Ireland
15 August 2022


        Page | 4


Condensed consolidated income statement
For the six month period ended 30 June
Six month period ended
30 June
2022
Six month period ended
30 June
2021
UnauditedUnaudited
Notes£m£m
Revenue
Rental income556.145.9
Hotel revenue515.02.1
71.148.0
Property related expenses(16.0)(14.8)
Hotel cost of sales(12.2)(6.0)
(28.2)(20.8)
Gross profit42.927.2
Gain/(loss) on sale of investment and development property and loan collateral110.8(0.2)
Net change in the fair value of equity-accounted investees89.86.4
Net change in fair value of investment and development property7(24.6)(9.2)
Net change in fair value of loans secured by real estate(0.2)-
28.724.2
Expenses
Administrative expenses(2.0)(3.0)
Investment management fee(4.6)(4.6)
(6.7)(7.6)
Results from operating activities before financing income and costs22.016.6
Interest income0.14.3
Interest expense(18.2)(27.0)
Finance income6.0-
Finance costs(1.5)(2.9)
Net finance expense(13.6)(25.6)
Profit/(loss) before taxation8.4(9.0)
Taxation6(1.9)(1.6)
Profit/(loss) for the period after taxation6.5(10.6)
The accompanying notes form an integral part of these condensed consolidated interim financial statements.


        Page | 5


Condensed consolidated statement of comprehensive income
For the six month period ended 30 June
Six month period ended
30 June
2022
Six month period ended
30 June
2021

UnauditedUnaudited
Notes
£m£m
Profit/(loss) for the period after taxation
 
6.5(10.6)

Other comprehensive income:

Items that may be reclassified subsequently to profit or loss:
 
Foreign operations – foreign currency translation differences

14.2(28.0)
Hedge of net investment in foreign operations

(10.3)24.9

3.9(3.1)
Items that will never be reclassified to profit or loss:

Net change in fair value of property, plant and equipment

12.42.3
Other comprehensive gain for the period, net of taxation

12.42.3
 
Total comprehensive profit/(loss) for the period, net of taxation
 
22.8(11.4)
The accompanying notes form an integral part of these condensed consolidated interim financial statements.


        Page | 6


Condensed consolidated balance sheet


30 June
2022

31 December
2021
UnauditedAudited
Notes £m £m
Non-current assets 
Investment and development property71,608.41,564.6
Loans secured by real estate8.28.2
Property, plant and equipment182.5169.9
Investment in equity-accounted investees8195.7163.2
Right-of-use asset5.35.3
Derivative financial asset12.11.5
Deferred tax asset2.12.7
Intercompany balances65.9-
  2,080.21,915.4
Current assets 
Assets held-for-sale7,1243.639.3
Inventories0.20.2
Rent and other receivables34.627.9
Intercompany balances-8.3
Cash and cash equivalents184.0219.0
262.4294.7
Total assets 2,342.62,210.1
Current liabilities 
Trade and other payables(33.6)(39.2)
Deferred income(18.1)(16.3)
Borrowings9(139.5)(1.9)
(191.2)(57.4)
Non-current liabilities 
Trade and other payables(20.0)(4.5)
Borrowings9(1,169.0)(1,212.9)
Lease liability(5.4)(5.4)
Deferred tax liability(1.4)(1.8)
(1,195.8)(1,224.6)
Total liabilities (1,387.0)(1,282.0)
Net assets 955.6928.1
Equity 
Stated capital1,370.11,370.1
Foreign currency translation reserve39.535.6
Revaluation reserve45.833.4
Share-based payments reserve11.16.4
Retained earnings (510.9)(517.4)
Total equity 955.6928.1
On behalf of the Board of Directors.    




    
Fraser Kennedy    Andrew McNulty
Director    Director
15 August 2022
The accompanying notes form an integral part of these condensed consolidated interim financial statements.


        Page | 7


Condensed consolidated statement of changes in equity
For the six month period ended 30 June 2022

Attributable to owners of the Company
Stated capitalForeign currency translation reserveRevaluation reserveShare- based payments reserveRetained earnings/(deficit)Total equity
Unaudited£m£m£m£m£m£m
Balance as at 1 January 20221,370.135.633.46.4(517.4)928.1
Profit for the period----6.56.5
Other comprehensive income-3.912.4--16.3
Total comprehensive loss for the period-3.912.4-6.522.8
Transactions with owners of the Company recognised directly in equity:
Share-based investment management fee---4.7-4.7
4.74.7
Total equity at 30 June 20221,370.139.545.811.1(510.9)955.6

The accompanying notes form an integral part of these condensed consolidated interim financial statements.


        Page | 8


Condensed consolidated statement of changes in equity (continued)
For the six month period ended 30 June 2021

Attributable to owners of the Company
Stated capitalForeign currency translation reserveRevaluation reserveShare- based payments reserveRetained earnings/ (deficit)Total equity
Unaudited£m£m£m£m£m£m
Balance as at 1 January 20211,370.142.324.315.4(515.1)937.0
Profit for the period----(10.6)(10.6)
Other comprehensive income-(3.1)2.3--(0.8)
Total comprehensive income for the period-(3.1)2.3-(10.6)(11.4)
Transactions with owners of the Company recognised directly in equity:
Contributions and distributions
Share-based settlement of investment management fee---4.6-4.6
4.64.6
Total equity at 30 June 20211,370.139.226.620.0(525.7)930.2

The accompanying notes form an integral part of these condensed consolidated interim financial statements.



        Page | 9


Condensed consolidated cash flow statement
For the six month period ended 30 June 2022
 Six month period ended
30 June
2022
Six month period ended
30 June
2021
UnauditedUnaudited
  Notes£m£m
Cash flows from operating activities 
Gain/ (loss)Loss for the period6.5(10.6)
Adjustments for non-cash items:
(Gain) / Loss on sale of investment property and loan collateral11(0.8)0.2
Net change in fair value of investment and development property24.69.2
Net change in fair value of loans secured by real estate0.2-
Net change in fair value of equity-accounted investees(9.8)(6.4)
Net finance cost12.324.9
Amortisation of loan fees, bond discount and premia1.11.1
Amortisation of lease incentive(0.7)(0.1)
Taxation61.91.6
Depreciation of fixed assets3.23.3
Impairment of accounts receivable(0.7)1.6
Investment management fee4.74.6
Operating cash flows before movements in working capital42.529.4
Increase in rent and other receivables(6.5)(10.6)
Increase / (decrease) in deferred income1.8(4.2)
Increase / (decrease) in trade and other payables0.18.6
Cash generated from operations before interest and taxation37.923.2
Interest paid(9.5)(26.7)
Derivative instruments(3.7)(1.7)
Tax paid(3.2)(1.3)
Cash flows from / (used in) operating activities21.5(6.5)
Investing activities
Acquisition of and improvements to investment and development property(88.7)(192.5)
Disposal of investment and development property1135.6126.6
Capital expenditure on property, plant and equipment(0.2)-
Investment in equity-accounted investees8(22.2)(33.2)
Dividends received from equity-accounted investees82.00.8
Cash flows used in investing activities(73.5)(98.3)
Financing activities
Amounts receivable from / (payable to) related party(58.0)8.5
Proceeds from borrowings976.032.8
Repayments of secured and unsecured borrowings9(0.7)(198.4)
Transaction costs related to loans and borrowings9(1.3)-
Cash flows from / (used in) financing activities16.0(157.1)
Net decrease in cash and cash equivalents(36.0)(261.9)
Cash and cash equivalents at beginning of period219.0458.2
Foreign exchange movements1.0(5.5)
Cash and cash equivalents at the reporting date184.0190.8

The accompanying notes form an integral part of these condensed consolidated interim financial statements.

        Page | 10


Notes to the condensed consolidated interim financial statements
For the six month period ended 30 June 2022
1. General information
Kennedy Wilson Europe Real Estate Limited (the ‘Company’) is a company incorporated in Jersey. These unaudited condensed consolidated interim financial statements (the ‘interim financial statements’) as at and for the six month period ended 30 June 2022 have been prepared and are presented in respect of the Company and its subsidiaries (together referred to as the ‘Group’).
The registered office of the Company is 29 Broad Street, St Helier, Jersey, JE2 3RR, Channel Islands.
2. Basis of preparation
A. Statement of compliance
These interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as promulgated by the International Accounting Standards Board, as adopted by the European Union, and should be read in conjunction with the Group’s last annual consolidated financial statements as at and for the year ended 31 December 2021. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2021 (the ‘Audited Financial Statements’).
The results are unaudited but were reviewed by the auditors of the Company.
B. Basis of measurement
The interim financial statements have been prepared on the going concern basis, applying the historical cost convention except for investment and development property, loans secured by real estate, property, plant and equipment and derivative financial instruments which are stated at their fair value using the accounting policies as set out in Note 3.
After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue its operations for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
The Group has strong liquidity and access to significant financial headroom between cash flows and existing reserves. Cash balances stood at £184.0 million at 30 June 2022.
If the Group wished to further bolster short to medium term liquidity beyond its already considerable reserves, it would be able to defer discretionary capital expenditure.
Having reviewed the forecasts, applying adverse stress tests and taking into account available mitigating actions, including ultimate parent support and liquidity, the Directors consider it a remote possibility that the financial headroom could be depleted.
Accordingly, they do not anticipate any need to significantly curtail the scale of operations or other activity and believe that the Group will continue as a going concern.
C. Use of judgements and estimates
In preparing these interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those described in the Audited Financial Statements.


        Page | 11



3. Significant accounting policies
Accounting policies adopted for the year ended 31 December 2021
The accounting policies and methods of computation and presentation adopted in the preparation of the interim financial statements are consistent with those applied in the Audited Financial Statements and are described therein on pages 16 to 25.
The Audited Financial Statements are available at eu.kennedywilson.com.
As at 30 June 2022, management prepare an internal analysis of the fair values of Investment and development property, Property Plant and Equipment and Investments in Equity-accounted investees. This analysis includes consideration of the independently obtained year-end valuations, changes in discount rates in the period, capitalised costs incurred and any changes to future expected cash flows. Further information about the assumptions made in measuring fair value are included in notes 7 and 8.
4. New standards, interpretations and amendments not yet effective
New/Revised International Financial Reporting Standards
A number of new standards and amendments are effective for annual periods beginning after 1 January 2022 and earlier application is permitted. The Group has not early adopted any of the forthcoming new or amended standards in preparing these condensed consolidated interim financial statements.
5. Operating segments
A. Basis of segmentation
The Group is organised into one business segment, against which the Group reports its segmental information, being the investment portfolio. Following the disposal of hotel assets and loans secured by real estate in recent years, the Group has just one remaining hotel asset and one remaining loan connection. Both have now been subsumed into the investment portfolio segment and are reported in a manner consistent with the internal reporting provided to the chief operating decision makers (the Board of directors).
The following summary describes the operations of the reportable segment:
SegmentDescription
Investment portfolioProperty used primarily for the purpose of generating rental and other income and comprising office, retail, leisure, industrial, residential and hotel real estate assets and one loan secured by real estate assets.

The Group’s key measure of underlying performance of the investment portfolio is net operating income as this measure illustrates and emphasises it’s contribution to the reported profits of the Group and earnings per share. By focusing the prime performance measurement on net operating income, other statistical data such as valuation movements are separately highlighted for analysis and attention.


        Page | 12


B. Geographic information
Consistent with the prior year, the investment portfolio includes assets located in the United Kingdom, the Republic of Ireland, Italy and Spain. Italy and Spain are grouped together and reported as “Rest of Europe”.
The geographic information below analyses the Group’s investment portfolio revenues and asset valuation movements, by location.

I. Revenue and valuation movement
Six month
period ended
30 June
2022
Six month
period ended
30 June
2021
UnauditedUnaudited
£m £m
United Kingdom
Rental income36.827.6
Gain on sale of investment property and loan collateral0.8(0.1)
Fair value gain on equity-accounted investees11.65.9
Net change in fair value of investment and development property(11.3)(8.8)
37.924.6
Ireland
Rental income12.711.9
Hotel revenue15.02.1
Gain on sale of investment property and loan collateral-0.1
Fair value gain on equity-accounted investees(1.8)0.5
Net change in fair value of loans secured by real estate(0.2)-
Net change in fair value of investment and development property(5.8)2.8
19.917.4
Rest of Europe
Rental income6.66.4
Loss on sale of investment property and loan collateral-(0.2)
Net change in fair value of investment and development property(7.5)(3.2)
(0.9)3.0
Total
Rental income56.145.9
Hotel revenue15.02.1
Gain on sale of investment property and loan collateral0.8(0.2)
Fair value gain on equity-accounted investees9.86.4
Net change in fair value of loans secured by real estate(0.2)-
Net change in fair value of investment and development property(24.6)(9.2)
56.945.0


        Page | 13


6. Taxation
A. Company
The Company is tax resident in Jersey. Jersey has a corporate tax rate of zero under schedule D of the Income Tax (Jersey) Law 1961 as amended, so the Company is not subject to tax in Jersey on its income or gains and is not subject to United Kingdom or other jurisdiction corporation tax on any dividend or interest income it receives. No charge to Jersey taxation will arise on capital gains.
B. Group
The Directors conduct the affairs of the Group such that the management and control of the Group is exercised in Jersey. Except for the hotel operations in Ireland, the Group does not carry on a trade in any other jurisdiction.
The Group is liable to foreign tax on activities in its overseas subsidiaries. Outside of Jersey, the Group has subsidiaries and funds in Luxembourg, Ireland, Italy, Spain, the United Kingdom and the United States of America and investment and development property located in the United Kingdom, Ireland, Italy and Spain.
Details of tax rates applicable in the jurisdictions in which the Group operates are set out in Note 10 to the Audited Financial Statements.
C. Amounts recognised in the profit or loss
Six month
period ended
30 June
2022
Six month
period ended
30 June
2021
UnauditedUnaudited
 £m £m
Current tax expense
Current period3.92.5
3.92.5
Deferred tax credit
Tax effect of losses not previously recognised-(0.9)
Origination and reversal of temporary differences(2.0)
(2.0)(0.9)
Tax expense1.91.6



        Page | 14


7. Investment and development property
30 June
2022
31 December
2021
UnauditedAudited
Reconciliation of carrying amounts of investment properties £m £m
Investment property
Opening balance1,456.11,406.9
Acquisition of investment property79.2252.6
Disposal of investment property(15.1)(96.9)
Improvements to investment property5.34.0
Transfer to assets held-for-sale(29.5)(41.4)
Net change in fair value(15.5)(32.3)
Effects of translation to presentation currency11.9(36.8)
Closing balance1,492.41,456.1

30 June
2022

31 December
2021
UnauditedAudited
Reconciliation of carrying amounts of property under development

 £m

 £m
Investment property under development
Opening balance108.5101.5
Disposal-(17.9)
Development expenditure7.619.1
Net change in fair value(2.7)12.2
Effects of translation to presentation currency2.6(6.4)
Closing balance116.0108.5
Disclosed as:
Carrying value of investment and development property1,608.41,564.6
Assets held-for-sale (Note 12)
43.639.3
Adjustment in respect of straight line rent1
16.415.7
1,668.41,619.6
Footnote:
1. Included as a component of the “Rent and other receivables” balance in the condensed consolidated balance sheet.

The cost of investment properties acquired during the period, inclusive of acquisition costs, is £79.2 million (year ended December 2021: £252.6 million). The total expenditure incurred to acquire investment properties under development during the period is £Nil (year ended December 2021: £Nil).
Acquisition costs comprise primarily stamp duty, legal services, and other directly attributable costs and amounted to £1.1 million (year ended 31 December 2021: £10.5 million).
The cost of property carried as held for sale, inclusive of acquisition costs, is £43.6 million (year ended 31 December 2021: £39.3 million). Fair valuation losses of £6.4 million have been recognised on assets held for sale at 30 June 2022.
At 30 June 2022, the Group was contractually committed to £5.0 million (year ended December 2021: £10.4 million) of future expenditure for the purchase, construction, development and enhancement of investment and development property.
The net fair value loss of £24.6 million (year ended 31 December 2021: net fair value loss £17.8 million) has been recognised in the Consolidated income statement, of which £6.4m of this loss (year ended December 2021: £2.3 million) relates to assets held for sale (Note 12). At 30 June 2022, a director valuation has been undertaken using the external valuations at 31 December 2021 as a foundation. The Directors confirm that the valuation techniques and the key unobservable inputs used in the valuation of the Group’s investment property and investment property under development at 31 December 2021 continue to apply for the period ended 30 June 2022. In performing this assessment, the directors worked with the Investment Advisors to develop valuations attributable to each investment property in the Group’s portfolio. These valuations were determined by reference to expected cash flows for each asset, and by applying capitalisation yields determined with reference to relevant industry benchmarks and market indices. 

        Page | 15


A. Valuation process
Third party valuations are performed annually on 31 December. Director valuations are performed on 30 June 2022.

Further information on the valuation methodologies applicable to investment property and investment property under development is provided in Note 11 to the Audited Financial Statements. The Group considers that all of its investment and development property falls within Level 3 of the fair value hierarchy, as defined by IFRS 13 (as discussed in Note 5A of the Audited Financial Statements).
8. Investment in equity-accounted investees
30 June
2022
31 December
2021
UnauditedAudited
 £m £m
Opening balance163.292.1
Additions22.271.2
Capital returned(2.0)(2.2)
Net change in fair value9.87.4
Effects of translation to presentation currency2.5(5.3)
Closing balance195.7163.2
Further information on the valuation methodology is provided in Notes 3, 5 and 30 to the Audited Financial Statements.
There were no changes to valuation techniques during the period. As described in note 7, the directors performed a valuation of each individual asset in the Group’s portfolio. The value of the Group’s investments in joint ventures, which comprise industrial assets, recognised strong valuation movement. The value of the remaining Group’s investments in development assets and residential properties have remained stable since year end.
9. Borrowings
30 June
2022
31 December
2021
UnauditedAudited
 £m £m
Secured843.8760.7
Unsecured473.3462.7
1,317.11,223.4
Unamortised borrowing costs, bond discounts and bond premia(8.6)(8.6)
1,308.51,214.8

Disclosed as:
Current139.51.9
Non-current1,169.01,212.9
1,308.51,214.8



















        Page | 16


A. Reconciliation of carrying value
Movements in the Group’s borrowings are analysed in the following table.
30 June
2022
31 December
2021
UnauditedAudited
 £m £m
Opening balance1,214.81,429.8
Principal repayments on secured debt(0.7)(69.1)
Principal repayments on unsecured debt-(369.8)
Draw down of new secured debt76.0280.3
Borrowing costs incurred(1.3)(4.7)
Amortisation of borrowing costs and bond discounts, net of accretion of premia from bond and note taps1.32.0
Effects of translation to presentation currency18.4(53.7)
Closing balance1,308.51,214.8

The tables above, are presented net of unamortised borrowing costs, which will be released to the income statement over the period of the associated borrowing.
Further information on the maturity profile of borrowings, collateral, interest rate and currency profile as well as financial covenants are provided in Note 21 D to H of the Audited Financial Statements.
Further information on the fair value methodology is provided in Note 23 of the Audited Financial Statements.



        Page | 17


B. Secured borrowings
I. Book value
Draw down date1
Effective interest rateMaturity30 June
2022
31 December 2021
UnauditedAudited
%£m£m
£137.0 million mortgage borrowing30 January 20152.91%30 April 2023137.1137.1
£25.0 million mortgage borrowing9 September 20191.855%9 September 202524.824.7
€37.25 million mortgage borrowing2
22 January 2016Euribor +
1.60%
29 December 203129.329.3
€66.88 million mortgage borrowing4 December 2017Euribor +
2.400%
4 December 202357.456.1
€87.0 million mortgage borrowing2
4 December 2017Euribor +
2.750%
4 December 202464.763.2
€57.52 million mortgage borrowing4 December 2017Euribor +
2.400%
4 December 202449.248.1
€72.0 million mortgage borrowing26 June 20153.875%25 June 202561.660.2
€30.06 million mortgage borrowing2
11 February 2020Euribor +
2.30%
11 February 202423.620.0
€40 million mortgage borrowing20 October 2020Euribor + 3.00%20 October 202334.433.7
£15.4 million mortgage borrowing20 October 2020SONIA + 3.00%20 October 202315.415.4
€35 million mortgage borrowing21 January 2021Euribor + 3.00%21 January 202430.129.4
£97.6 million mortgage borrowing14 September 20211.8000% + SONIA10 September 202696.496.3
£143.6 million mortgage borrowing3 December 20212.000% + SONIA1 December 2024141.5141.1
£31.8 million mortgage borrowing10 March 20222.300% + SONIA8 March 202731.3-
£41.1 million mortgage borrowing24 March 20222.100% + SONIA24 March 202740.6-
837.4
754.6
Unamortised borrowing costs (included above)
6.4
6.1
843.8
760.7

Footnotes:
1.Draw down date or date of acquisition, whichever is later.
2.Amortising loan.
Debt service is payable quarterly on all secured borrowings.


        Page | 18


C. Bonds and notes
I. Book value
Issue dateEffective interest rateMaturity30 June 202231 December 2021
UnauditedAudited
%£m£m
€550.0 million 3.25%, 10 year unsecured note12 November 20153.25%12 November 2025471.1460.2
471.1460.2
Unamortised borrowing costs, discounts and premia2.22.5
473.3
462.7





        Page | 19


10. Financial instruments – Fair values and risk management

A. Accounting classifications and fair values
The following table shows the book values and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
I. 30 June 2022
Carrying amountFair value
Fair value – hedging instruments
Mandatorily at FVTPL – others

FVOCI – debt instruments
FVOCI – equity instrumentsFinancial assets at amortised costOther financial liabilitiesLevel 1Level 2Level 3
Unaudited£m£m£m£m£m£m£m£m£m
Financial assets measured at fair value
Interest rate caps not designated as hedges-11.2-----11.2-
Zero cost foreign currency options designated as net investment hedges0.9------0.9-
Loans secured by real estate-8.2------8.2
0.919.4----
Financial assets not measured at fair value
Rent and other receivables----15.5----
Cash and cash equivalents----184.0----
----199.5-
Financial liabilities not measured at fair value
Secured bank loans-----
(843.8)
--
(836.2)
Unsecured bond issues-----(473.3)-(438.8)-
Trade and other payables-----(29.1)---
-----1.346.2


        Page | 20


II. 31 December 2021
Carrying amountFair value
Fair value – hedging instruments
Mandatorily at FVTPL – others

FVOCI – debt instruments
FVOCI – equity instrumentsFinancial assets at amortised costOther financial liabilitiesLevel 1Level 2Level 3
Audited£m£m£m£m£m£m£m£m£m
Financial assets measured at fair value
Interest rate caps not designated as hedges-1.5-----1.5-
Loans secured by real estate-8.2------8.2
-9.7----
Financial assets not measured at fair value
Rent and other receivables----11.2----
Cash and cash equivalents----219.0----
----230.2-
Financial liabilities measured at fair value
Zero cost foreign currency options designated as net investment hedges---------
Interest rate cross currency swaps designated as net investment hedges---------
------
Financial liabilities not measured at fair value
Secured bank loans-----(760.7)--(757.5)
Unsecured bond issues-----(462.7)-(489.0)-
Trade and other payables and deferred income-----(29.1)---
-----(1,252.5)




        Page | 21


B. Measurement of fair values
The fair value of rent and other receivables, cash and cash equivalents, and trade and other payables approximate their carrying value and they are carried at amortised cost.
C. Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk and foreign currency risk), credit risk and liquidity risk.
The interim financial statements do not include all financial risk management information and disclosures required in the Audited Financial Statements.
Further information on financial risk management is set out in Note 23 to the Audited Financial Statements. There have been no changes in any risk management policies since 31 December 2021.

11. Loss on sale of investment and development property and loan collateral
Six month
period ended
30 June
2022
Six month
period ended
30 June
2021
UnauditedUnaudited
 £m £m
Gross proceeds on disposal36.2126.9
Selling costs(0.6)(0.3)
Net proceeds on disposal35.6126.6
Carrying value(34.8)(126.8)
Gain / (loss) on disposal0.8(0.2)
The carrying value of assets sold includes assets which were held-for-sale at 31 December 2021 (Note 12).
12. Assets held-for-sale
The Group has identified certain of its investment properties as held-for-sale in accordance with IFRS 5. The carrying value of such assets was £43.6 million at the balance sheet date (31 December 2021: £39.3 million).
During the period, with the exception of Bartley Wood which was sold on the 7th July 2022, the full portfolio of assets which were classified as held for sale at 31 December 2021 were sold.
13. Subsequent events
On 7 July 2022, the Group disposed of an investment property for its carrying value of £17.5 million. On 27 July the Group acquired investment property for £6.5 million.
In August 2022 the Group completed two refinancings totalling £55 million both with a 7 year term at fixed interest rates of 3.163% and 3.469%.

On 11 August 2022 the loan secured by real estate was substantially repaid by £8 million following the sale of one of the underlying real estate assets.
14. Approval of the interim financial statements
These interim financial statements were authorised for issue by the Company’s Board of Directors on 15 August 2022.

        Page | 22


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