Financial Statements
Notes to the Accounts
11 Property
| Investment £m |
Development £m |
Owner occupied £m |
Total £m |
|
|---|---|---|---|---|
| Carrying value at 1 April 2007 | 12,891 | 1,106 | 50 | 14,047 |
Additions - property purchases |
115 | 115 | ||
| - other capital expenditure |
253 | 292 | 545 | |
| 368 | 292 | 660 | ||
| Disposals | (2,694) | (24) | (2,718) | |
| Reclassifications | 360 | (360) | ||
| Revaluations: | ||||
| in income statement |
(1,569) | (19) | (1,588) | |
| in statement of recognised income and expense |
57 | 3 | 60 | |
| Increase in tenant incentives and guaranteed rent uplift balances | 33 | 10 | 43 | |
| Carrying value at 31 March 2008 | 9,389 | 1,062 | 53 | 10,504 |
| Head lease liabilities (note 16) | (35) | |||
| Total Group property portfolio valuation 31 March 2008 | 10,469 |
At 31 March 2008, the Group book value of properties of £10,469m (2007: £14,047m) comprises freeholds of £9,357m (2007: £13,118m); virtual freeholds of £303m (2007: £106m); long leaseholds of £802m (2007: £820m) and short leaseholds of £7m (2007: £3m). The historical cost of properties was £7,315m (2007: £8,879m).
At 31 March 2008, the book value of owner-occupied property is £53m (2007: £50m) after charging £nil (2007: £nil) depreciation to the income statement for the year.
The property valuation does not include any investment properties held under operating leases (2007: nil).
Properties valued at £7,162m (2007: £9,194m) were subject to a security interest and other properties of non-recourse companies amounted to £2m (2007: £128m).
Cumulative interest capitalised in investment and development properties amounts to £33m and £84m (2007: £28m and £46m) respectively.
The prior year movement is shown below:
| Investment £m |
Development £m |
Owner occupied £m |
Trading £m |
Total £m |
|
|---|---|---|---|---|---|
| Prior year | |||||
| Carrying value at 1 April 2006 | 11,081 | 597 | 36 | 11,714 | |
| Additions:- corporate acquisitions |
912 | 25 | 13 | 950 | |
| - property purchases |
267 | 58 | 325 | ||
| - other capital expenditure |
145 | 230 | 375 | ||
| 1,324 | 313 | 13 | 1,650 | ||
| Disposals | (666) | (1) | (667) | ||
| Reclassifications | 58 | 8 | 50 | (48) | 68 |
| Revaluations: | |||||
| in income statement |
1,049 | 4 | 1,053 | ||
| in statement of recognised income and expense |
184 | 184 | |||
| Increase in tenant incentives and guaranteed rent uplift balances | 45 | 45 | |||
| Carrying value at 31 March 2007 | 12,891 | 1,106 | 50 | 14,047 | |
| Head lease liabilities (note 16) | (30) | ||||
| Total Group property portfolio valuation 31 March 2007 | 14,017 |
The Group's total property portfolio was valued by external valuers on the basis of Market Value, by reference to recent market evidence of transactions for similar properties, in accordance with the Royal Institution of Chartered Surveyors Valuation Standards, sixth edition. A breakdown of valuations split between the Group and its share of joint ventures and funds is shown below:
| 2008 | 2007 | |||||
|---|---|---|---|---|---|---|
| Group £m |
JV/Funds £m |
Total £m |
Group £m |
JV/Funds £m |
Total £m |
|
| Knight Frank LLP | 10,466 | 1,067 | 11,533 | 14,015 | 723 | 14,738 |
| CBRE | 3 | 1,935 | 1,938 | 1 | 2,085 | 2,086 |
| Savills | 1 | 1 | ||||
| Directors' valuations | 77 | 77 | ||||
| 10,469 | 3,002 | 13,471 | 14,017 | 2,885 | 16,902 | |
