Less than 1 year £000 23,358 5,109
1 to 5 years £000
More than 5 years £000
Total £000
31 March 2021
– –
– –
23,358 5,109
Cash and cash equivalents
Debtors
370 1,355 828 2,553
Capitalised finance costs Obligations under head leases Fixed interest rate loans Floating interest rate loans Creditors and accruals
(116) (300) (9,429)
(466) (346)
(7,150)
(7,732)
(8,332) (33,329) (184,927) (226,588) (9,429) 10,660 (32,786) (191,249) (213,375) – – (646) –
Less than 1 year £000 23,567 5,983
1 to 5 years £000
More than 5 years £000
Total £000
31 March 2020
Cash and cash equivalents
– –
– –
23,567 5,983
Debtors
Capitalised finance costs Obligations under head leases Fixed interest rate loans Creditors and accruals
370 912 1,047 2,329
(117)
(466)
(7,266)
(7,849)
(8,332) (33,329) (193,259) (234,920) (9,936) 11,535 (32,883) (199,478) (220,826) (9,936) – –
Market risk The Group’s activities are primarily within the real estate market, exposing it to very specific industry risks. The yields available from investments in real estate depend primarily on the amount of revenue earned and capital appreciation generated by the relevant properties as well as expenses incurred. If properties do not generate sufficient revenues to meet operating expenses, including debt service and capital expenditure, the Group’s operating performance will be adversely affected. Revenue from properties may be adversely affected by the general economic climate, local conditions such as oversupply of properties or a reduction in demand for properties in the market in which the Group operates, the attractiveness of the properties to occupiers, the quality of the management, competition from other available properties and increased operating costs (including real estate taxes). In addition, the Group’s revenue would be adversely affected if a significant number of occupiers were unable to pay rent or its properties could not be rented on favourable terms. This risk has increased given the Covid-19 pandemic and the resultant effect on occupiers’ ability to pay rent. Certain significant expenditure associated with each equity investment in real estate (such as external financing costs, real estate taxes and maintenance costs) is generally not reduced when circumstances cause a reduction in revenue from properties. By diversifying in regions, sectors, risk categories and occupiers, senior management expects to mitigate the risk profile of the portfolio effectively. The Board continues to oversee the profile of the portfolio to ensure risks are managed. The valuation of the Group’s property assets is subject to changes in market conditions. Such changes are taken to the Consolidated Statement of Comprehensive Income and thus impact on the Group’s net result. A 5% increase or decrease in property values would increase or decrease the Group’s net result by £34.1 million (2020: £33.2 million). Interest rate riskmanagement Interest rate risk arises on interest payable on the revolving credit facility only. The Group’s senior debt facilities have fixed interest rates over the terms of the loans and the revolving credit facility is currently undrawn, thus the Group has limited exposure to interest rate risk on the majority of its borrowings and no sensitivity is presented.
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