TR Property – Annual Financial Report

TR PROPERTY INVESTMENT TRUST PLC

LONDON STOCK EXCHANGE ANNOUNCEMENT

Results for the year ended 31 March 2026

LEI: 549300BPGCCN3ETPQD32

Information disclosed in accordance with Disclosure Guidance and Transparency Rule 4.1.3

TR Property Investment Trust plc, announces its full year results for the year ended 31 March 2026.

Chairman Kate Bolsover commented
“The Company continued to deliver a strong recovery in revenue earnings, supported by improving real estate fundamentals and rising dividend distributions across the portfolio. While geopolitical events have again tested investor confidence, the underlying picture remains encouraging, with open debt markets and listed property companies trading on historically wide discounts to net asset values. As earnings continue to recover, we believe the portfolio remains well placed to capture value over the long term. The Board remains committed to maintaining progressive dividend growth.”

Manager Marcus Phayre-Mudge commented
“Macro events once again dictated short-term sentiment but they did not change what we are seeing on the ground. Occupier demand remains resilient and rental growth is coming through, helped by the lack of new supply across many of our markets. The sharp market dislocation at the year end was disappointing, particularly given the progress made through most of the year, but it underlined why balance sheet strength matters so much in this sector. Markets can re-price the sector in a matter of days; they cannot create new supply or erase rental growth quite so quickly.”

	Year ended 31 March 2026	Year ended 31 March 2025	Change
Balance Sheet
Net asset value (NAV) per share	333.48p	327.16p	+1.9%
Shareholders’ funds (£’000)	1,058,306	1,038,237	+1.9%
Shares in issue at the end of the year (m)	317.4m	317.4m	0.0%
Net debt1,6	15.3%	18.5%
Share Price
Share price	303.50p	294.00p	+3.2%
Market capitalisation	£963m	£933m	+3.2%

	Year ended 31 March 2026	Year ended 31 March 2025	Change
Revenue
Revenue earnings per share	15.81p	12.98p	+21.8%
Dividends²
Interim dividend per share	5.75p	5.65p	+1.8%
Final dividend per share	10.35p	10.25p	+1.0%
Total dividend per share	16.10p	15.90p	+1.3%
Performance: Assets and Benchmark
Net Asset Value total return3,6	+6.7%	-2.5%
Benchmark total return6	+6.7%	-3.8%
Share price total return4,6	+8.4%	-4.9%
Ongoing Charges5,6
Including performance fee	0.79%	0.84%
Excluding performance fee	0.79%	0.78%
Excluding performance fee and direct property costs	0.76%	0.76%

1.   Net debt is the total value of loan notes, loans (including notional exposure to contracts for difference (CFDs)) less cash as a proportion of net asset value.

2.   Dividends per share are the dividends in respect of the financial year ended 31 March 2026. An interim dividend of 5.75p (2025: 5.65p) was paid on 8 January 2026. Subject to shareholder approval at the forthcoming AGM, a final dividend of 10.35p (2025:10.25p) will be paid on 30 July 2026 to shareholders on the register on 26 June 2026. The shares will be quoted ex-dividend on 25 June 2026.

3.   The NAV Total Return for the year is the theoretical return calculated by assuming that dividends are reinvested in the assets of the Company from the relevant ex-dividend date. Dividends are deemed to be reinvested on the ex-dividend date as this is the protocol used by the Company’s benchmark and other indices.

4.   The Share Price Total Return is the theoretical return calculated by assuming that dividends are reinvested in the shares of the Company from the relevant ex-dividend date.

5.   Ongoing Charges are calculated in accordance with the AIC methodology.

6.   Considered to be an Non-GAAP Performance Measure as defined in the Annual Report and Accounts.

Chairman’s statement

Performance

The Company’s net asset value (‘NAV’) total return for the 12 months to 31 March 2026 was +6.7% in line with the benchmark total return. The share price total return was slightly better at +8.4% as the discount between the asset value and the share price narrowed a little over the year.

Market backdrop

Geopolitical events are at the forefront of investors’ minds, affecting the pricing of all risk assets. Long duration, leveraged real estate is no exception and pan European property companies’ share prices certainly felt the full impact of events in March, the last month of our financial year. Prior to the start of the war in Iran, the Company’s performance had been steadily building on the healthy performance of the first six months (+10.6% NAV total return at the half year stage last September). Our Manager’s optimism was buoyed by broad, steady improvement in the underlying real estate fundamentals with limited new supply across many of our sectors. This backdrop was supporting rental and earnings growth, which in turn was translating into rising dividend payouts and into our own earnings growth.

Once again, it is important to emphasise that we invest in a sector which can support significant leverage. It is encouraging to report that the tightening in spreads which I referenced at the half year has continued – even post the global events of March. Debt markets are very much open and are maintaining lending to those businesses with conservative balance sheets and highly visible cashflows. Listed property companies fit the bill with an average ‘loan-to-value’ of just 34%.

As property investors we are at the ‘value’ end of the equity landscape which has resulted in under ownership and the conservative valuation of listed real estate businesses. Our sector is, in many instances, back trading at historically wide discounts to net asset values. This remains an important underpin for the sector. However, it is important to remember that it is earnings that will determine future capital attraction.

Notwithstanding events in the Middle East, our Manager has continued to maintain low physical property exposure and, for most of the period, record high equity exposure. This allocation decision was costly in March but beneficial for the rest of the financial year. Even with the low allocation to physical property, the direct property team has driven value-adding initiatives at both Wandsworth and Bicester. Our experience at these sites reinforces the belief that the right real estate, in the right place, will attract quality tenants who can afford the rent. There are always periods when a little more patience is required and we have all seen business environments where potential tenants have deferred decision making.

Our Manager continues to be engaged with small cap consolidation (or failing that, privatisation), a process which has been running for several years. His report contains details of the outcomes of several examples of consolidation, which of course reduces the pool of remaining potential candidates. This is a positive. It has always been our view that sub-scale listed real estate businesses simply cannot deliver sufficient efficiencies.

Revenue results, outlook and dividend

Revenue earnings for the full year increased by almost 22% over the prior year to 15.81p per share. We continue to see a recovery in earnings, with the vast majority of companies in the portfolio having increased their dividends year on year. Property companies grow their topline through both organic (increasing market rents, capturing indexation) and inorganic (development, acquisitions) growth. The bottom line is impacted by rising costs: primarily overheads, expenses associated with vacancy and the critical line item – debt servicing. We had, until very recently, a positive outlook on all these elements (i.e. falling costs). However, the war in Iran and the renewed risk of inflation may well lead central banks to consider increasing short term interest rates. The market has already adjusted upwards at the longer end of the yield curve. For our underlying companies this will reduce earnings growth expectations where they have imminent refinancing. However, it is possible that the impact is muted if, as is the case at the moment, margins remain tight amidst a competitive lending environment.

The Board is aware of the importance to shareholders of a growing annual dividend. Even during the correction in earnings across 2024 and 2025 the dividend was modestly increased each year, using revenue reserves to top up the distribution. The improvement in earnings over the last year is encouraging and it remains the Board’s intention to continue paying an increasing dividend.

The Board is therefore recommending a final dividend of 10.35p per share, which will bring the full year dividend to 16.10p per share, a 1.3% increase on the prior year.

Gearing and currencies

Gearing remained fairly constant in the first half, moving from 18.5% at the start of the year to 18.0% at the half year stage, then, in the last month of the financial year, against the backdrop of macroeconomic turbulence, the gearing level was reduced to end the year at 15.3%.

Our EUR 50m loan notes matured in February. We explored the option of refinancing with a further private placing but the longer-term interest rates were not compelling. BBVA offered attractive terms through a more traditional multicurrency revolving credit facility and the loan notes were refinanced through two loans, one of a one year duration and the second a three year term to give us a high degree of flexibility with some longer-term certainty.

Details of all of our gearing and debt are set out in the notes to the accounts within the annual report.

In line with our longstanding policy, the portfolio currency exposure is hedged in line with the benchmark.

Discount and share repurchases

The average discount over the year was 8.5%, with the Company’s shares trading in a range of between 6.0% and (very briefly) 10.8% through the year. Even given the events in March it is pleasing to observe that the discount began the period at 10.1% and finished the year at 9.0%. Our Manager continues to market the Company through an extensive programme of PR, sales meetings with investors, webinars and monthly commentaries, all of which are available on our website, www.trproperty.com. The Company did not repurchase any shares during the year.

Awards

I am pleased to report that the Company won ‘Best PR Campaign’ at the AIC Shareholder Communication Awards 2025. This is further vindication of the Manager’s and our PR consultants, Aspectus’ efforts to raise and maintain the Company’s profile and engagement with private, direct investors as well as our long standing institutional and wealth manager shareholders. The Company was also named Investment Company of the Year in the Property sector at the 2025 Investment Week awards. We are also very pleased to have received a Gold rating from Morningstar.

Management team

Joanne Elliott, who has been the finance manager of the Company since 1996, will retire from her role this year. I would like to take this opportunity to thank her for three decades of management of all aspects of the Company’s finances and corporate activity. She has seen the Company’s share price increase more than ten-fold and a dividend which has increased every year (bar one) during her tenure.

Gavin Parks has been supporting Joanne as Fund Accountant since Columbia Threadneedle Investments was appointed as Company Secretary to the Company in January 2022. Gavin is a qualified Chartered Management Accountant and has been with Columbia Threadneedle Investments for eight years as a fund accountant in its Investment Trust team. He will now assume all of Joanne’s accounting and financial reporting responsibilities for the Company. Gavin has been working closely alongside Joanne for the last two years and has incrementally taken on more responsibility, so this is a well-planned and seamless transition.

Daniel Winterbottom has been appointed Chief Operating Officer for Thames River Capital and has now assumed Joanne’s wider operational responsibilities. Daniel is a CFA and has been with the Thames River Capital team for 16 years working alongside Joanne throughout this time. The longstanding tenure of the Thames River team facilitates effective succession planning.

Outlook

Global geopolitics affects us all, all of the time. There are periods when it feels like fluctuations in global sentiment overwhelm all local investment considerations. We are in one such period. Crucially, the impact of the war in the Middle East is on supply side cost inflation. There is no credit crisis and debt remains readily available. This is important for leveraged assets such as real estate. The central issue for the global economy will be how far shortages and disruption to supply chains, alongside the spike in fossil fuel prices, leads to cost inflation. Our Manager remains optimistic because the underlying supply/demand equilibrium for operational real estate continues to look positive despite the uncertainty; hence the continued use of some gearing. The compensation factor is a relentless focus on recurring earnings and balance sheet quality as we continue to acknowledge the reduced visibility in the economic outlook.

My closing remarks must touch on what is widely expected to make the largest impact on the global economy in the coming years: the growth and application of artificial intelligence (‘AI’). The extent of the impact on business models, employment and productivity is still unquantifiable. Fear mongering on potential disruption from technological advancements is nothing new and history has shown that as yet unidentified new industries are spawned from such evolutions. Physical assets with durable cashflows fall squarely into what has been coined HALO (heavy assets, low obsolescence) and should be viewed as candidates for safe haven status. The right assets in the right locations will, over time, be occupied by many different business users and will adapt to technological changes.