12. Investments in subsidiaries The Company had the following principal subsidiaries as at 31 March 2021 and 31 March 2020:
Ownership proportion
Name
Place of incorporation
Picton UK Real Estate Trust (Property) Limited
Guernsey Guernsey Guernsey Guernsey Guernsey Guernsey Guernsey
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Picton (UK) REIT (SPV) Limited Picton (UK) Listed Real Estate
Picton UK Real Estate (Property) No 2 Limited Picton (UK) REIT (SPV No 2) Limited
Picton Capital Limited
England & Wales
Picton (General Partner) No 2 Limited Picton (General Partner) No 3 Limited Picton No 2 Limited Partnership Picton No 3 Limited Partnership Picton Financing UK Limited Picton Property No 3 Limited
England & Wales England & Wales England & Wales
Guernsey
The results of the above entities are consolidated within the Group financial statements. Picton UK Real Estate Trust (Property) Limited and Picton (UK) REIT (SPV) Limited own 100% of the units in Picton (UK) Listed Real Estate, a Guernsey Unit Trust (the ‘GPUT’). The GPUT holds a 99.9% interest in both Picton No 2 Limited Partnership and Picton No 3 Limited Partnership, the remaining balances are held by Picton (General Partner) No 2 Limited and Picton (General Partner) No 3 Limited respectively. 13. Investment properties The following table provides a reconciliation of the opening and closing amounts of investment properties classified as Level 3 recorded at fair value. 2021 £000
2020 £000
654,486 676,102
Fair value at start of year
4,961
Capital expenditure on investment properties
8,861
(3,928) (33,073)
Disposals
(3,830)
Transfer to owner-occupied property Realised gains on disposal Unrealised movement on investment properties
–
868
3,478
12,861
(882)
Fair value at the end of the year Historic cost at the end of the year
665,418 654,486 625,359 629,932
The fair value of investment properties reconciles to the appraised value as follows:
2021 £000
2020 £000
682,410 664,615
Appraised value
1,313 (3,830)
Valuation of assets held under head leases
1,489
Owner-occupied property Lease incentives held as debtors Fair value at the end of the year
–
(14,475) (11,618)
665,418 654,486 The investment properties were valued by independent valuers, CBRE Limited, Chartered Surveyors, as at 31 March 2021 and 31 March 2020 on the basis of fair value in accordance with the version of the RICS Valuation – Global Standards (incorporating the International Valuation Standards) and the UK national supplement (the Red Book) current as at the valuation date. The total fees earned by CBRE Limited from the Group are less than 5% of their total UK revenue. The fair value of the Group’s investment properties has been determined using an income capitalisation technique, whereby contracted and market rental values are capitalised with a market capitalisation rate. The resulting valuations are cross-checked against the equivalent yields and the fair market values per square foot derived from comparable market transactions on an arm’s length basis. In addition, the Group’s investment properties are valued quarterly by CBRE Limited. The valuations are based on: ӱ Information provided by the Group including rents, lease terms, revenue and capital expenditure. Such information is derived from the Group’s financial and property systems and is subject to the Group’s overall control environment. ӱ Valuation models used by the valuers, including market-related assumptions are based on their professional judgement and market observation.
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