30 June 2011
For professional investors only. Not suitable for retail clients.
Schroder Exempt Property Unit Trust
Quarter 2 2011 Report
www.schroders.com/seput
Schroder Property Investment Management Limited
31 Gresham Street, London EC2V 7QA. Registered No. 1188240 England
Authorised and regulated by the Financial Services Authority
30 June 2011
Schroder Exempt Property Unit Trust Quarter 2 2011 Report
Page
2
Investment Objective and Performance
3
UK Property Market Commentary
4
Strategy
5
Key Activities Over the Quarter
6
Performance
8
Databank
9
Unitholder Information
12
Important Information
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30 June 2011
Schroder Exempt Property Unit Trust Quarter 2 2011 Report
Trust Objective
The investment objective of Schroder Exempt Property Unit Trust (SEPUT or the Trust) is to achieve
a blend of income and capital growth for investors through investment in UK property. The Trust
seeks to provide a return of 0.5% per annum (net of fees) above its benchmark (Investment Property
Databank UK Pooled Property Fund Indices – All Balanced Property Funds Median) over rolling
three year periods.
UK Property Market Commentary
While at the aggregate level rental values were flat through the first half of 2011, this stability masks
wide variations across individual markets. At one extreme, West End office rental values rose by
5%, while at the other end shop and shopping centre rental values fell by 1-3%, depressed by a
new wave of retailer insolvencies and store closures (source: IPD).
The total value of deals in the first half of 2011 was close to its long term average (source: Property
Data) and the IPD All Property initial yield edged down by 0.1% to 6.3%, adding 1% to capital
values and total returns.
Strategy
The fund manager‟s strategy of repositioning the portfolio is substantially complete, with exposure
to indirect assets and gearing levels significantly reduced.
Non-income producing assets have also been sold. Cash and proceeds from sales have been
used to invest in assets with the objective of improving both the quality and duration of Trust
income. Further sales of sites are planned to complete the rebalancing of the portfolio.
We remain underweight to high street retail and overweight central London offices.
Key Activities Over the Quarter
The remaining 0.2% of units in Schroder Emerging Retail Property Unit Trust (SERPUT) were
secured. The 100% ownership of SERPUT effectively brings a total of ten direct retail properties
into SEPUT.
A 50% share in the Motor Retail Partnership Limited was acquired. This comprises 12 car show
rooms across the UK.
Practical completion of the QVC Building in Chiswick Park occurred during Q2 2011.
Resolution for outline planning consent at the 19 acre industrial site in Hackbridge for a mixed use
development was granted by the Planning Committee of London Borough of Sutton.
SEPUT performed in line with the benchmark over the three month period. While it is behind the
benchmark over the three years, we are pleased to report that it outperformed its benchmark over
one and two years. A detailed performance commentary is provided on page 9 of this document.
Q2 2011
(%)
12m to 30
Jun 2011
(%)
3 yrs to 30
Jun 2011
(% pa)
5 yrs to 30
Jun 2011
(% pa)
SEPUT
1.8
8.6
-2.6
-3.9
IPD UK PPFI – All Balanced Property Funds Median*
1.8
7.6
-1.4
-1.5
IPD UK PPFI – All Balanced Property Funds
Weighted Average**
1.8
7.7
-2.3
-2.3
Source: Investment Property Databank (IPD) UK Pooled Property Fund Indices (UK PPFI).
Performance is calculated on a net asset value (NAV) to NAV price basis plus income distributed, compounded monthly,
net of fees and based on an unrounded NAV per unit.
*SEPUT‟s benchmark. The Trust‟s benchmark has changed over time and a composite for 10 years is available upon
request.
**This measure is widely adopted across the property industry.
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Schroder Exempt Property Unit Trust Quarter 2 2011 Report
Occupational Market
While at the aggregate level rental values were flat through the first half of 2011, this stability masks
wide variations across individual markets. At one extreme, West End office rental values rose by
5% in the first half, reflecting strong demand from international IT, legal and media companies. In
addition, a number of empty offices have been taken off the market to be redeveloped and in the
short term, at least, this decrease in supply has put further upward pressure on West End rents.
Office rental values also rose in the City of London in the first half of 2011, although the market
appears to have lost some momentum, following a spate of large lettings to banks in 2010 (source:
IPD, all rental value data).
At the other extreme, shop and shopping centre rental values fell by 1-3% in the first half of 2011,
depressed by a new wave of retailer insolvencies and store closures (source: IPD). In part this
turmoil reflects the current squeeze on household incomes from tax increases and rising energy
prices – the deepest in real terms since 1977 (source: ONS). However, a number of other forces
are also at work. First, structural change, in particular the growth of on-line sales and the expansion
of supermarkets into non-food items, is adding to the pressure on many existing retailers. Second,
poor sales means that some retailers who were taken private before the financial crisis are now
struggling to service their debts.
Tenant demand for office and industrial space outside London remains patchy and in most regions
rental values fell by 1% in the first half of 2011 (source: IPD). One bright spot was the Thames
Valley office market which saw a flurry of smaller lettings to IT and pharmaceutical companies, but it
is unclear whether this “tech“ recovery will be sustained.
Investment Market
In many respects the property investment market is now back to normal. The first half of this year
saw a healthy mix of domestic institutions, property companies and foreign investors active in the
market and there is particularly strong demand for good quality properties priced between £20-50
million. UK institutions appear to have been attracted back into the market by the large gap
between property and long gilts yields of 2.5-3.0% and, perhaps, by the belief that the income on
property should be a reasonable hedge against inflation if it becomes entrenched at 3-5%. The
total value of deals in the first half of 2011 was close to its long-term average (source: Property
Data) and the IPD all property initial yield edged down by 0.1% to 6.3%, adding 1% to capital
values and total returns.
In one crucial respect, however – the supply of property debt – the investment market is still
distinctly abnormal. This shortcoming was highlighted by the latest UK Commercial Property
Lending Survey undertaken by De Montfort University which found that just six banks accounted for
two-thirds of new property loans in 2010. A large number of other banks remain paralysed by
problem loans granted at the peak of the market and we believe that the workout process will take
several more years.
Outlook
Our central view is that all property total returns in 2011 and 2012 will be close to the rate of income
return at between 6-8%. The main risks to this outlook are either that economic growth is weaker
than anticipated, leading to a double dip in rental values at the all property level, or that long gilt
yields increased to 4.5-5.0%, putting upward pressure on property yields and cutting capital values.
Given the uncertainty over the medium term outlook for inflation we believe that there may be
interesting opportunities in certain niche property sectors and we are actively pursuing strategies to
protect returns against this outcome.
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30 June 2011
Schroder Exempt Property Unit Trust Quarter 2 2011 Report
The strategy of repositioning the portfolio is substantially complete. Over the last 24 months the Manager
has successfully:
Reduced exposure to indirect assets from around 26% to just 10%
Reduced portfolio gearing from around 21% to just 6.9% as a percentage of NAV
Improved the quality and duration of income
Managed out existing land holdings and development opportunities, with further sales planned over
time
The majority of the portfolio is now invested in stable income producing direct property. Cash and
proceeds from sales have been used to invest in income producing direct property with the objective of
improving both the quality and duration of Trust income to meet the Trust's performance objective. This
includes the acquisitions of Fujitsu Office Complex in Manchester, QVC Building at Chiswick Park and the
Motor Retail Partnership Limited with 14, 21 and 19 years unexpired lease terms, respectively, all with fixed
income uplifts over the term of the lease.
Our strategy is to:
Ensure SEPUT has a diversified, secure and good quality income stream. With income expected to
be the main driver of property returns over the coming years, this will be important for providing
consistent returns from quarter to quarter.
Source, select and analyse new opportunities carefully. We will use our property research
capabilities and extensive market contacts to identify the most appropriate properties in the context
of SEPUT's property portfolio.
Execute business plans for all assets in the portfolio. Each asset has a business plan, reviewed
monthly by the manager, which determines how and when we expect to generate value from each
asset. Combined at a portfolio level, we are building a profile of incremental increases in income
and capital returns.
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30 June 2011
Schroder Exempt Property Unit Trust Quarter 2 2011 Report
The remaining 0.2% of units in Schroder Emerging Retail Property Unit Trust (SERPUT) were secured.
This reduces SEPUT‟s exposure to indirectly owned assets to just 10%.
Cash and proceeds from sales have been used to invest in assets with the objective of improving both the
quality and duration of Trust income.
Motor Retail Investment Limited Partnership
A 50% share in the Motor Retail Investment
Limited Partnership was acquired which
comprises 12 car showrooms across the UK.
SEPUT has committed £25 million to the
Partnership of which £17.5 million was used for
this acquisition. The portfolio has a net initial
yield of over 7% and benefits from 19 years
unexpired lease term let to Pendragon. The
majority of leases are linked to capped annual
RPI uplifts.
The acquisition increases the Trust‟s allocation to
retail which is currently underweight. Whilst a
non-traditional retail asset, it has a high initial
yield with a long income stream, in line with the
Trust‟s strategy. In analysing the opportunity a
specialist advisor was appointed and
considerable due diligence was undertaken on
Pendragon, the tenant, with Schroders in-house
equities team to help us assess the business.
We note that Pendragon has recently had a
discounted rights issue to help pay down
debt. The proceeds will be used to refinance the
company‟s debt facility on improved terms, resulting
in an improved balance sheet and better tenant covenant.
Schroder Emerging Retail Property Unit Trust (SERPUT¹)
The 100% ownership of SERPUT effectively brings a high yielding (7% initial yield), diversified property
portfolio of 10 retail assets with high levels of occupancy (97.5%) valued at around £68 million into SEPUT.
The properties include:
1) Southsea, 2-24 Pamerston Road (£11.6 million)
A freehold parade of 17 shops with long leasehold residential units above
located in an affluent suburb of Portsmouth with an established local
catchment. The property is let to tenants such as Specsavers, Lloyds,
Costa and Laura Ashley.
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30 June 2011
Schroder Exempt Property Unit Trust Quarter 2 2011 Report
2) Loughton, 202-226 High Road (£10.5 million)
A freehold parade of 12 shops with offices and residential units above in a
suburb of London. The retail space is 100% let with tenants such as Body
Shop, New Look, Clinton Cards and Greggs. Asset management
initiatives include refurbishing the vacant residential units in order to
secure additional income.
3) Maggs House, Clifton, Bristol, (£9.0 million)
A freehold parade of 5 shops with offices above with an established
catchment benefiting from a Waitrose supermarket in the vicinity. The
retail is 100% let with a new letting to Butlers Homeware for 2,660 sq ft to
replace a temporary tenant.
4) The Broadway, Buckingham Parade, Stanmore (£7.2 million)
A freehold parade of 12 shops with offices above in an outer London
suburb. The retail space is 100% let, but the office space has a small
element of vacancy. Negotiations to acquire the car park and hostel
located to the rear of the property owned by the Council have
commenced with plans for a new supermarket (20,000 sq ft) and part
residential development.
5) 81-107 Crockhamwell Road, Woodley, Reading (£6.7 million)
A freehold parade of 8 shops with offices and residential above. The retail
space is 100% let to tenants such as Iceland, Boots and Clinton Cards but
rents continue to be under pressure due to lease renewals in the area at
lower levels. Options to refurbish or redevelop the office and residential
space are being considered.
6) Shipley, 20-40 Market Square (£6.7 million)
A long leasehold parade of 21 shops with ancillary accommodation
above, in a strong Yorkshire market town. A new 5 year lease has been
agreed with Boots and other tenants include Superdrug, Clinton Cards,
Greggs and William Hill. The retail space is fully let.
7) Duloch Park District Centre, Dunfermline (£5.3 million)
A district centre comprising of 10 shops located in a suburb of
Dunfermline adjacent to a 140,000 sq ft supermarket. Two units are
vacant, one of which is currently under negotiation to be let.
8) East Sheen, 270-282 Upper Richmond Road (£4.5 million)
A freehold parade of 5 shops located in an affluent suburb of London. The
retail space is fully let to tenants including Robert Dyas and Headmasters.
We are currently evaluating the redevelopment of two ground floor retail
units with new residential accommodation above for which planning
permission has been obtained.
9) 42-60 High Street, Harborne, Birmingham (£3.4 million)
A freehold parade of 5 shops with office space above located in a suburb
of Birmingham. It is fully let with tenants including Café Rouge, Dreams
and Halifax.
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Schroder Exempt Property Unit Trust Quarter 2 2011 Report
10) Enfield, 30/38 London Road (£3.2 million)
A freehold parade of 5 shops with offices above located in a suburb of
London. Two of the tenants continue to pay rent but are not in occupation.
Asset management initiatives are currently being reviewed to attract new
tenants.
Sales
There were no sales during this quarter.
Asset Management
Felnex Trading Estate, Hackbridge
At the 19 acre industrial site in Hackbridge, resolution for outline planning consent for a mixed use
development was granted by the Planning Committee of London Borough of Sutton. The development
plans include a 40,000 sq ft supermarket and 725 new homes plus a community centre, doctors‟ surgery,
care home, offices, retail space and a bus exchange. Existing leases in the industrial space expire between
2012 – 2013.
QVC, Chiswick Park
Practical completion of the QVC Building in Chiswick Park occurred during Q2 2011 and the office building
is being fitted out by the tenant. As this is now a standing investment, SEPUT‟s exposure to non-income
producing assets has reduced during Q2 2011.
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Schroder Exempt Property Unit Trust Quarter 2 2011 Report
Q2 2011
(%)
12m to 30
Jun 2011
(%)
2 yrs to
30 Jun
2011
(% pa)
3 yrs to
30 Jun
2011
(% pa)
5 yrs to
30 Jun
2011
(% pa)
SEPUT
1.8
8.6
14.6
-2.6
-3.9
IPD UK PPFI – All Balanced Property Funds Median*
1.8
7.6
13.8
-1.4
-1.5
IPD UK PPFI – All Balanced Property Funds
Weighted Average**
1.8
7.7
13.2
-2.3
-2.3
Source: Investment Property Databank (IPD) UK Pooled Property Fund Indices (UK PPFI).
Performance is calculated on a net asset value (NAV) to NAV price basis plus income distributed, compounded monthly,
net of fees and based on an unrounded NAV per unit.
*SEPUT‟s benchmark. The Trust‟s benchmark has changed over time and a composite for 10 years is available upon
request.
**This measure is widely adopted across the property industry.
SEPUT performed in line with the benchmark over the three month period. While it is behind the
benchmark over the three years, we are pleased to report that it outperformed its benchmark over one and
two years demonstrating the impact of the new fund strategy.
Indirectly owned assets have driven performance over the last 12 months from both valuation increases
and profitable sales. Looking ahead, following the manager's strategy of repositioning the portfolio, the
quality of direct assets combined with sector and stock selection will become the key drivers of
performance. Analysis of the Trust‟s performance indicates the following factors contributed to relative
performance:
Asset allocation has contributed positively to returns over the years. In the last year, the overweight
to central London offices at the expense of other sectors has been an important driver. Indirect
assets in these sectors have also performed well, and West End of London Property Unit Trust
(WELPUT¹) produced above benchmark returns.
Practical completion of the QVC building at Chiswick Park helped enhance returns. Construction of
the 124,000 sq ft office building began in the third quarter last year and is now being fitted out by
the tenant.
Active asset management initiatives such as the refurbishment and lettings to good covenants in
Kensington Village, London W14, have enhanced valuations.
Large properties such as Mermaid Quay (Cardiff) and West India Quay (London) performed well
over the past year where we have had success in new lettings and rent reviews. Multi-let
properties of the right specification in the right location can generate competition for space, and
therefore rental growth.
Profitable sales have boosted returns. The sale of Chiswick Park Unit Trust (ChisPUT¹) completed
in the first quarter 2011, providing significant valuation uplift over the past year. Value has also
been realised through the profitable sales of a number of non-income producing assets (for
example, Charlton, Uxbridge).
Not surprisingly land and potential regeneration sites such as Bracknell town centre, Croydon and
in the City sites have underperformed the market. The lack of income generated by land detracted
from short term total returns. For these types of assets, performance should be driven by the
recovery of the occupier markets, asset management initiatives and potential disposals of the City
sites.
We are still pursuing a strategy of further selective sales to reduce the quantum of non-income
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30 June 2011
Schroder Exempt Property Unit Trust Quarter 2 2011 Report
producing land in order that the Trust can then benefit from the remaining „development‟
opportunities.
¹ Schroder in-house funds
Past Performance is not a guide to future performance and may not be repeated. Please refer to the
Important Information at the back of this document regarding past performance.
Source: Schroders, 30 June 2011
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Schroder Exempt Property Unit Trust Quarter 2 2011 Report
Offer price per unit
£33.76
Mid price per unit
£32.70
Bid price per unit
£31.65
NAV per unit
£32.22
Distribution yield¹
4.3%
Bid-offer spread (% offer price)
6.25%
¹ Please note that the distribution yield is calculated on the gross distribution paid (gross of tax, net of expenses and fees)
for the last twelve months as a percentage of the latest NAV per unit.
Net asset value (NAV)
£1,233,567,540
Gross asset value (GAV)
£1,304,665,075
Property value
£1,155,297,795
Cash at bank
£79,117,336
Uncommitted cash
£69,819,909
Net initial yield (look through analysis)
5.8%
Equivalent yield (look through analysis)
6.6%
Net reversionary yield
6.8%
1
Void rate (look through analysis)
Number of holdings
2
Number of tenants (look through analysis)
Debt
6.8%
66
728
6.9% (% debt / NAV)
0.4% (% net debt / NAV)
1
Voids include the direct portfolio, all joint ventures plus the quoted void rate on the indirect holdings but exclude land and
developments. Data for Henderson and UNITE at Q1 2011. IPD methodology used which treats tenancies in
administration as not being voids until formally disclaimed.
2
Assets held within Schroder Exempt Property Unit Trust (SERPUT) are treated as being directly owned since SERPUT is
now 100% owned by SEPUT
Number of units in issue
38,288,703
Number of units redeemed over the quarter
329,960
Number of units issued over the quarter
-
Number of units matched over the quarter
319,914
Value of units matched over the quarter
£9,768,743
Unit availability
Please phone Alice Wilcox on +44 (0)20 7658 3552 or +44
(0)20 7658 6000
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Schroder Exempt Property Unit Trust Quarter 2 2011 Report
Standard Retail 10.20%
Shopping Centres 1.9%
Retail Warehouses 19.8%
Central London Offices 16.7%
Rest of UK Offices 18.1%
Industrial 19.3%
Other 7.9%
Cash 6.1%
Source: Schroders, subject to rounding.
GAV: gross asset value
Regional Exposure excluding cash, % GAV
Central London 18.2%
Rest of London 20.5%
Rest of South East 29.0%
South West 2.2%
Eastern 0.2%
Midlands 3.3%
North West 6.2%
North East 7.4%
Wales 9%
Scotland 3.9%
Source: Schroders
GAV: gross asset value
Fujitsu Services Limited 3.7%
Lloyds TSB Bank Plc 3.4%
QVC Ltd 3.3%
British Telecommunications PLC 3.1%
Exel Ltd 2.6%
Pendragon PLC 1.9%
B&Q Plc 1.9%
Sportsdirect.com Retail Ltd 1.8%
Homebase 1.5%
Cable and Wireless UK 1.3%
All other tenants 75.5%
Source: Schroders
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30 June 2011
Schroder Exempt Property Unit Trust Quarter 2 2011 Report
Relative Segment Positions, %*
Underweight
Absolute Segment Positions, %
Overweight
-1.0%
-3.8%
-4.2%
7%
9%
7.9
Offices - Central London
16.7
13.8
Offices - South East
12.1
8.1
Offices - Rest of UK
6.0
5.5
9.5% Industrial - South East
18.0
8.5
Industrial - Rest of UK
1.3
7.2
Other
7.9
8.5
Cash
6.1
7.4
-1.3%
5%
4.1
6.1
-0.6%
3%
Standard Retail - Rest of UK
19.9
-5.9%
1%
7.1
1.9
0.5%
-1%
6.1
19.8
4.0%
-3%
Standard Retail - South East
Retail Warehouses
2.9%
-5%
Benchmark*
Shopping Centres
-0.1%
-7%
SEPUT
11%
Source: Schroders, 30 June 2011, figures may vary marginally from those reported by IPD.
*Positions relative to IPD UK Pooled Property Fund Indices – All Balanced Funds Weighted Average. The weighted
average has been used as this level of information is not available in the median.
Data subject to rounding
Top Ten Holdings
Top ten holdings
Sector
% of NAV
Bracknell
Retail and Office
5.2
Monks Cross Shopping Park, York
Retail Warehouse
4.1
Acorn Industrial Estate, Crayford
Industrial
3.9
Matrix, Park Royal, London NW10
1
Hercules Unit Trust
Industrial
Retail Warehouse
3.7
3.5
Fujitsu Office Complex, Central Park, Manchester
Office
3.3
Parker Tower, London, WC2
Office
3.3
Mermaid Quay, Cardiff
Leisure
3.3
St William House, Cardiff
Office
3.0
QVC Building, Chiswick, London
Standard Retail
3.0
¹ Schroder in-house funds
Source: Schroders, 30 June 2011
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30 June 2011
Schroder Exempt Property Unit Trust Quarter 2 2011 Report
The following is a brief summary of certain provisions relating to the Trust. For full details, reference
should be made to the Trust Deed which is available from the Manager on request.
Management and Administration
Trustees:
The Royal Bank of Scotland plc
Manager:
Schroder Property Investment Management Limited
Property Manager:
Schroder Property Investment Management Limited
Valuer:
BNP Paribas Real Estate
Auditors:
PricewaterhouseCoopers LLP
The Supervisory Board
Members of the Supervisory Board and their details are shown in the Report and Accounts. The
principal role of the Supervisory Board is to set out strategic investment and borrowing guidelines for
the Trust. It also monitors risk control and ensures that principles of sound corporate governance
are observed in the management of the Trust‟s assets. It approves the key appointments made in
relation to the Trust and the remuneration of the Manager and Property Manager.
Issue of Units
New units are issued monthly on the Valuation Date and payment must be received by the Trustee
within the first five working days of the following month. Title to units will be evidenced by an entry in
the register of unitholders. The dealing cut off time is noon on the Valuation Date.
Redemption of Units
To redeem units, a written notice must be received by the Manager prior to a quarterly redemption
notice date, being 31 March, 30 June, 30 September and 31 December. Unitholders will then be
advised of the fair value of each unit (usually bid price) within six weeks and the proceeds will be
paid on the next quarterly redemption notice date. In common with other property unit trusts, the
Manager has the power, subject to prior written approval from the Supervisory Board, to direct that
the date of payment of redemption proceeds to unitholders may be postponed until a subsequent
Redemption Payment Date, not later than two years after the first Redemption Payment Date. This
power must be exercised, and unitholders duly notified, within six weeks of the relevant Redemption
Notice Date.
Valuation
The property portfolio is independently valued on the last working day of each month. The offer and
bid prices are set on the basis of this valuation.
Bid/Offer Spread
The bid/offer spread is 6.25%. Bid and offer prices are reviewed regularly by the Manager to ensure
new and existing investors are treated fairly. These may be varied without notice, although in
practice we intend to inform investors in advance of any change.
Costs and Fees
The following fees and charges will be payable:
Trustee‟s fee:
0.0224% per annum on the first £500 million of the Trust‟s Net Asset Value
0.0125% per annum on any excess over £500 million of the Trust‟s Net
Asset Value
Manager‟s fee:
0.3% per annum of the Trust‟s Net Asset Value
Property Manager‟s fee: 0.4% per annum on the Gross Value of direct holdings and capital cash
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30 June 2011
Schroder Exempt Property Unit Trust Quarter 2 2011 Report
Where the Trust invests in property related investments which are managed by an associate of the
Manager or the Property Manager, fees earned by the associate on the Trust‟s net investment, are
not rebated to the Trust, with the exception of SERPUT, where the Trust receives a rebate of 0.3%
on SERPUT‟s gross property value (based on the Trust‟s holding). These indirect managers levy
their own fees which may include performance fees.
The Manager‟s and the Property Manager‟s fees are charged in full to the Income and Expenditure
Account, 50% of such fees are allocated to capital and not deducted from distributions for the
purpose of determining the value of such distributions.
The remuneration of the Manager and the Property Manager is set by the Supervisory Board.
Total expense ratio (TER): estimated TER is 0.87% of NAV at 30 June 2011.
Income Distributions
Income of the Trust is distributed monthly on the fifteenth working day of the month.
Investor Reports
Unitholders receive a quarterly report. The annual report and audited financial statements are
published at the Trust‟s year end date of 31 March. An interim report and unaudited financial
statements are published at 30 September.
Responsible Property Investment Policy
The Manager has a policy on responsible property investment which is available on request.
Investment and Borrowing Powers
The Trust Deed requires that the underlying property of the Trust is managed in accordance with the
investment and borrowing powers set out in the Trust Deed. Within these investment and borrowing
powers, the Supervisory Board may set additional investment and borrowing powers to which the
Property Manager must adhere in conducting its property investment management activities.
Investment Restrictions
The holdings and operations of the Trust will be subject to investment restrictions monitored by the
Supervisory Board. These are available upon request.
Fund Codes
Code
Bloomberg
SCEXPUT LN
ISIN
0007866121
Lipper Reuters
60011163
Sedol
0786612
Manager Contacts
Alice Wilcox
Product Executive
alice.wilcox@schroders.com
Switchboard
+44 (0)207 658 6000
Direct Line
+44 (0)207 658 3552
15
Hanne Hooton/Katie Nicholson
Client Executive
propertyqueries@schroders.com
Switchboard
+44 (0)207 658 6000
Direct Line
+44 (0)207 658 6787/6562
Sam Wightman
Fund Services
sam.wightman@schroders.com
Switchboard
+44 (0)207 658 6000
Direct Line
+44 (0)207 658 3694
31 March 2011
Schroder Exempt Property Unit Trust Quarter 1 2011 Report
Important Information
Schroder Exempt Property Unit Trust (the Trust) is a collective investment scheme within the meaning of Section 235 of the
Financial Services and Markets Act 2000 (“FSMA”). The Trust is not an authorised unit trust scheme, OEIC or recognised
scheme within the meaning of the FSMA and therefore constitutes an unregulated collective investment scheme. As an
unregulated collective investment scheme, the distribution and promotion of units are restricted, for the purposes of Sections 21
and 238 of the FSMA, to persons who are themselves authorised under the FSMA or who otherwise fall within the categories or
exceptions made under Sections 21 and 238.
Accordingly, this material is directed at market counterparties and authorised persons; intermediate customers; existing investors
in this or a substantially similar fund; and existing clients and newly accepted clients of the Schroder Group where reasonable
steps have been taken to ensure that investment in the Trust is suitable. This material should not be relied upon by persons of
any other description.
Investment in the Trust is only available to Exempt Funds. In general terms an Exempt Fund is a person wholly exempt from
capital gains tax or corporation tax on capital gains. Investment will only be accepted following the completion of a Form of
Authority for the Trust which contains certain warranties and indemnities provided by the potential investor, particularly regarding
the exempt status of the investor and confirmation from HM Revenue & Customs that the potential investor is an Exempt Fund.
Investors and potential investors should be aware that past performance is not a guide to future returns. No warranty is given, in
whole or in part, regarding the performance of the Trust and there is no guarantee that the investment objectives of the Trust will
be achieved. The price of units and the income from them may fluctuate upwards or downwards and cannot be guaranteed.
Property-based pooled vehicles, such as the Trust, invest in real property, the value of which is generally a matter of a valuer's
opinion. It may be difficult to deal in the units of the Trust or to sell them at a reasonable price because the underlying property
may not be readily saleable, thus creating liquidity risk. There is no recognised market for units in the Trust and, as a result,
reliable information about the value of units in the Trust or the extent of the risks to which they are exposed may not be readily
available.
Neither this document/presentation nor any other statement (oral or otherwise) made at any time in connection herewith
constitutes an offer to sell or exchange units in the Trust or any other fund or product and is not soliciting an offer to buy or
exchange and does not constitute an invitation to subscribe for, buy or exchange any units in the Trust or any other fund or
product in any jurisdiction where the offer, sale or exchange is not permitted. Potential investors are advised to obtain and review
independent professional advice and draw their own conclusions regarding the economic benefits and risks of investment in the
Trust as well as the legal, regulatory, tax and accounting aspects in relation to their particular circumstances.
Any investment in the Trust must be based solely on the prospectus, or any other document issued from time to time by the
Manager of the Trust in accordance with applicable laws.
The opinions, beliefs expectations or intentions, unless otherwise stated, are those of Schroder Property Investment Management
Limited (SPrIM). All information and opinions contained in this document/presentation have been obtained from sources we
consider to be reliable. No responsibility can be accepted for errors of fact or opinion. Reliance should not be placed on the
views and information in this document/presentation when taking individual investment and/or strategic decisions.
A potential conflict with the Manager‟s duty to the unitholder may arise where a transaction is effected for the Trust in the units of
another fund(s) managed by the same Manager or an Associate of the Manager. However, the Manager will ensure that such
transactions are effected on terms which are not materially less favourable than if the potential conflict had not existed.
The forecasts included in this document/presentation should not be relied upon, are not guaranteed and are provided only as at
the date of issue. Our forecasts are based on our own assumptions which may change. We accept no responsibility for any
errors of fact or opinion and assume no obligation to provide you with any changes to our assumptions or forecasts. Forecasts
and assumptions may be affected by external economic or other factors.
Use of IPD data and indices : © and database right Investment Property Databank Limited and its Licensors 2011. All rights
reserved. IPD has no liability to any person for any losses, damages, costs or expenses suffered as a result of any use of or
reliance on any of the information which may be attributed to it.
This document/presentation is intended for the use of the addressee or recipient only and may not be reproduced, redistributed,
passed on or published, in whole or in part, for any purpose, without the prior written consent of SPrIM.
For the purposes of the Data Protection Act 1998, the data controller in respect of any personal data you supply is SPrIM.
Personal information you supply may be processed for the purposes of investment administration by any company within the
Schroder Group and by third parties who provide services and such processing and which may include the transfer of data outside
of the European Economic Area. SPrIM may also use such information for marketing activities unless you notify it otherwise in
writing.
Schroder Property Investment Management Limited
31 Gresham Street
London
EC2V 7QA
Registered No. 1188240 England.
Schroder Property Investment Management Limited is authorised and regulated by the Financial Services Authority.
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