TR Property Investment TrustAGM Presentation

Marcus Phayre-Mudge

Fund Manager

24 July 2018

Classification: Public

Contents

2

• Results review – what drove performance in the year to March 2018

• Key features and positioning

• What has happened since the year end (a lot!)

• Outlook

Investment risks

3

The value of investments and any income derived from them can go down as well as up as a result of

market or currency movements and investors may not get back the original amount invested.

The market value of the shares of TR Property may not reflect the underlying net asset value of the

investments held by TR Property.

TR Property is able to borrow to raise further funds for investment purposes if the fund manager and the

board of directors consider that it may be commercially advantageous to do so. This is generally

described as "gearing". An investment trust which has made investments as a result of gearing may

have a more volatile share price as a result; gearing can increase shareholder returns in rising markets

but conversely can increase the extent to which the value of the funds attributable to shareholders

decreases in falling markets.

The value of property-related securities and directly held property reflect the opinion of valuers and are

reviewed periodically. These assets can also be illiquid and significant or persistent redemptions may

require the manager to sell properties at a lower market value adversely affecting the value of your

investment.

TR Property Investment Trust

4

• Largest Pan-European property equity closed-ended fund

• Market cap: £1.21bn (£988m – March ‘17)

• Net assets: £1.25bn (£1.12bn – March ‘17)

• Equities 93% of assets (92% - March ‘17)

• Physical property 7% of assets (8% - March ‘17)

• Gearing: 14.6% (13.3% - March ‘17)

Source: BMO Global Asset Management as at 30.03.2018

Highlights for the year to March 2018

5

• Total shareholder return of 25.5%

• Share price close to asset value

• Relative outperformance of the benchmark (after fees) 530bps

• Dividend growth (year on year) of 16.2%

• Pan European exposure proved resilient

• Retail remains our greatest concern

Standardised performance

6

Percentage Growth (%)

TR Property Investment Trust (Capital Only

NAV)

FTSE EPRA/NAREIT Developed Europe

Capped Index (Net, GBP, Capital Only)

TR Property Investment Trust (NAV with

Income)

FTSE EPRA/NAREIT Developed Europe

Capped Index (Net, GBP, Total Return)

Share Price

Source : BMO Global Asset Management. Data as at 30.03.2018

Past performance should not be seen as an indication of future performance. All fund performance is presented net of fees.

Mar 13 -

Mar 14

Mar 14 –

Mar 15

Mar 16 -

Mar 17

Mar 17 -

Mar 18

Mar 15 -

Mar 16

18.2% 24.8% 5.9% 4.5% 12.1%

11.2% 19.7% 2.9% 3.6% 7.2%

22.4% 28.3% 8.2% 8.0% 15.5%

14.9% 23.3% 5.4% 6.5% 10.2%

37.7% 29.5% -1.6% 9.1% 25.5%

Last 2 years performance

7

Source: BNP Paribas, Bloomberg as at 31.03.2017 and 30.03.2018. NAV - Net Asset Value.

Benchmark: FTSE EPRA/NAREIT Developed Europe Capped TR Net GBP

Past performance is not a guarantee to future performance

6.5%

10.2%

8.0%

15.5%

9.1%

25.5%

0%

5%

10%

15%

20%

25%

30%

Year to March 2017 Year to March 2018

Benchmark NAV total return NAV total return Share price total return

Dividend history

Source : BMO Global Asset Management. Data as at 04.07.2018

8

0

2

4

6

8

10

12

14

00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18

Pence P

er

Share

Interim Final

10 year average compound annual growth rate: 8.1%

Share price and discount

Source: BNP Paribas, Bloomberg as at 29.06.2018

9

100

150

200

250

300

350

400

450

Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18

Share Price (P)

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Sep 17 Mar 18

Discount to NAV (with income)

Past performance is not a guarantee to future performance.

Discount

tightens driving

share price

Track record

10

Source : BMO Global Asset Management. Data as at 29.06.2018

Past performance is not a guarantee to future performance.Benchmark: Prior to 01.04.2013 FTSE EPRA/NAREIT Developed Europe Index (Net, GBP). Prior to 01.04.2012 FTSE EPRA/NAREIT Developed Europe Index (GBP). Prior to

01.04.2007 S&P Citigroup European Property Index. Prior to 01.09.2001 FTSE Real Estate index.

0%

200%

400%

600%

800%

1,000%

1,200%

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

TR Property Investment Trust (Capital Only NAV)

FTSE EPRA/NAREIT Developed Europe Capped Index (Net, GBP, Capital Only)

Pan-European real estate equities have outperformed broader European equities

Source: Bloomberg as at 29.06.2018

11

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

2014 2015 2016 2017 2018 H1

Pan-European Real Estate Equities (FTSE EPRA/NAREIT Developed Europe Capped Index Net GBP)

STOXX Europe 600 Net EUR

FTSE All-Share Index Total Return GBP

Past performance is not a guarantee to future performance.

See-through geographic exposure – didn’t change much

12

Source: BMO Global Asset Management see-through exposure calculation model. Data as at 30.03.2018.

March 2017 March 2018

UK, 36%

Germany, 20%

France,15%

Sweden, 8%

Spain, 5%

Switzerland,3%

Italy, 2%

Rest of Europe,

11%

UK,38%

Germany, 22%

France, 15%

Sweden,9%

Spain6%

Switzerland, 1%

Italy, 2%

Rest of Europe,

7%

UK vs. Continental Europe – Brexit still weighs heavily

13

Source: BMO Global Asset Management as at 29.06.2018

in £

in €

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

Dec 15 Mar 16 Jun 16 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18

FTSE EPRA/NAREIT Developed Europe ex UK Index TR GBP

FTSE EPRA/NAREIT Developed Europe ex UK Index TR EUR

FTSE EPRA/NAREIT UK Index TR GBP

Past performance is not a guarantee to future performance.

Intra European total return performance (in local currency) -FY 2017 & 2018

14

Source: BMO Global Asset Management as at 31.03.2017 and 30.03.2018

Past performance is not a guarantee to future performance.

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

SW NL BL & LUX FR GR SP SW IT

2017 2018

Key positioning and where it worked (or not)

15

UK physical portfolio (7% of assets)

Returned 14.6% broadly in line with the equity portfolio

Underweight Belgium

Underperformed

Overweight Spain – particularly hotels

Hispania (our largest overweight) returned 28.3%

But…overweight Landsec not British

Land (BL outperformed LAND strongly)

But…underweight Southern Europe overall

Lack of Italian exposure

Underweight Switzerland

Underperformed

Overweight Stockholm

Faberge (a large overweight) returned 26.8%

Overweight UK

London reduced, industrial / logistics increased,

‘alternatives’ increased

But…overall neutral Scandinavia

Region was a stronger performer, we should

have been longer

Top contributors to relative performance FY 17/18

16

Source: Bloomberg as at 30.03.2018

-0.8% -0.6% -0.4% -0.2% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2%

UK MAJORS

SPANISH DIVERSIFIED

GERMAN OFFICES

BENELUX DIVERSIFIED

UK STUDENT HOUSING

LONDON OFFICE

UK DIVERSIFIED

HOTELS

INDUSTRIALS

Portfolio profile – largest 10 holdings

• Top 10 is c.56% of portfolio

Source: BMO Global Asset Management as at 04.07.2018

17

-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

VONOVIA

UNIBAIL-RODAMCO

DEUTSCHE WOHNEN

LEG IMMOBILIEN

LANDSEC

HISPANIA ACTIVOS

SEGRO

GECINA

UNITE GROUP

MCKAY SECURITIES

Fund Weight Relative

Portfolio profile – largest active positions vs. benchmark

18

• Active positioning of equity portfolio (all overweights and underweights / 2): c.42%

Source: BMO Global Asset Management as at 04.07.2018. FTSE EPRA/NAREIT Developed Europe Capped Net Total Return Index (GBP).

-4.0% -2.0% 0.0% 2.0% 4.0% 6.0%

BRITISH LAND CO

KLEPIERRE

SWISS PRIME SITE

ICADE

GRAND CITY PROPERTIES

UNITE GROUP

CLS HOLDINGS

MCKAY SECURITIES

LEG IMMOBILIEN

HISPANIA ACTIVOS

Physical property portfolio

1. Bayswater

2. Wandsworth

3. Harlow

4. Bristol

5. Gloucester

3

1

2

5

4

19

Asset management

20

Source: BMO Global Asset Management. *March 2018

Unit H1

Parkway Industrial Estate

Plymouth

Beacon House

Worple Road

Wimbledon SW19

Ferrier Street

Industrial Estate

Wandsworth SW18

• 2016 Rent Review - rent

increased by 14.4%

• 6.3% ahead of valuers ERV*

• Sold for £4.3m in December

2017

• 11% premium to the March

2017 valuation

• 12,000 sq ft office

• Permitted development

achieved for 17 flats

• Sold for £5.8m in November

2017

• 35% premium to March

2017 valuation

• 16 units fully let with leases

extended to September

2019

• Planning policy designation

changed from ‘employment’

to ‘mixed use’

• Progressing planning

application for submission in

Q4 2018

Property portfolio performance – kept up with the equity portfolio and outperformed IPD

21

TRPIT - TR Property Investment Trust. IPD - Investment Property Databank.

Source: BMO Global Asset Management. Investment Property Databank (MSCI, IPD) as at 30.03.2018.

0%

5%

10%

15%

20%

25%

30%

35%

40%

FY13 FY14 FY15 FY16 FY17 FY18

Total Return

TRPIT IPD

Past performance is not a guarantee to future performance.

Outlook

22

• Don’t fight the Central Banks – rates staying low across Europe (but rising in the US)

• Pockets of strong rental growth – industrial / logistics, German residential, Paris

CBD offices, Stockholm offices, Madrid offices

• Capital markets – doing brisk business. Record low funding cost for property companies

• UK – surprisingly strong Central London investment markets. Global capital looks beyond Brexit

BUT…macro risks remain elevated

Discord over migrant issues, Macron failing to win support for greater EU financial

integration, Italian banking sector concerns

Brexit negotiations overshadowing investment and creating instability. Ongoing GBP

weakness

FED interest tightening cycle continues, USD continues to strengthen

$80 per barrel…inflationary pressures building

CBD - Central Business District

Disclaimer

23

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