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2020-12-31-accounts

COIF CHARITIES PROPERTY FUND ANNUAL REPORT AND FINANCIAL STATEMENTS

Year ended 31 December 2020

COIF CHARITIES PROPERTY FUND

CONTENTS

Report of the Board 03
Report of the Investment Manager* 05
Independent Auditors’ Report 12
Report of the Valuers 16
Summary risk indicator 18
Comparative table 19
Portfolio analysis 20
Portfolio statement* 21
Property portfolio 22
Statement of total return** 37
Statement of change in net assets attributable to Unitholders** 37
Balance sheet** 38
Cash flow statement** 39
Notes to the financial statements** 40
Distribution table** 53
Statement of Board, Trustee and Manager responsibilities 54
Statement of Depositary responsibilities and Report of the Depositary 58
AIFMD disclosures 59
Directory* 60
*Collectively, these comprise the Investment Manager’s Report.

**Audited.

References to “CCLA” refer to The CCLA Group, comprising CCLA Investment Management Limited and CCLA Fund Managers Limited.

Disability Discrimination Act 1995

Extracts from the Annual Report and Financial Statements are available in large print and audio formats.

Annual Report and Financial Statements

31 December 2020

02

COIF CHARITIES PROPERTY FUND

REPORT OF THE BOARD for the year ended 31 December 2020

On behalf of the Board, I have pleasure in presenting the Annual Report and Financial Statements of the COIF Charities Property Fund (the Fund), which includes a separate report from CCLA Fund Managers Limited (the Manager) as Manager of the Fund.

Structure and management of the Fund

The Fund is a Common Investment Fund and was established in 2002. The Fund is governed by a scheme of the Charity Commission dated 12 July 2002 and as modified by a scheme dated 13 May 2009 and a scheme effective on 21 July 2014 and as amended by resolutions of the trustees of the Fund passed under Section 280 of the Charities Act 2011 on 21 July 2014, 22 July 2014 and 29 July 2014 and by an order dated 9 October 2014 and an order dated 19 October 2016 (the Scheme).

The day to day management of the Fund is delegated to the Manager by the Board which is also responsible for appointing the Manager, setting the investment policy and determining the criteria and methods of evaluating the performance. The Board also appoints the Auditors and the Trustee.

The Trustee and Depositary is HSBC Bank plc who is responsible for the supervision and oversight of the Manager’s compliance with the Scheme and for the custody and safekeeping of the assets. The division between management and trustee functions provides an additional layer of protection for Unitholders.

The Manager is responsible for management and the administration of the Fund, including marketing the Fund.

Investment objective

The Fund aims to provide investors with a high level of income and long-term capital appreciation.

Investment policy

The Fund is holding an actively managed, diversified portfolio of UK commercial property. It is managed in accordance with the policies of the Church of England’s Ethical Investment Advisory Group (EIAG).

The Fund invests principally in direct commercial property assets in the UK. It may also invest in other property assets and indirectly, including listed securities and unlisted property funds. Whilst maintaining a full exposure to the UK property sector, indirect investments can assist in managing portfolio diversification and fund liquidity. The Manager operates indirect exposure limits of no more than 5% in any single property collective investment scheme, with a maximum aggregate exposure of 15%. Similar thresholds apply to securities in property companies and joint ventures.

Benchmark

The Fund’s benchmark is the MSCI/AREF UK Other Balanced Quarterly Property Fund Index.

03 Annual Report and Financial Statements

31 December 2020

COIF CHAIiITIES PKOPEIiTY FUND CCLA REPORT OF THE BOAIiD for the year ended 31 December 2020 Target investors The Fund is suitsblc for the long-term funds of any charity seeking exposure to UK commercial properry. Investors should note that the management of direct propcrty 15 outsidc the scope of the Financial Services and Markets Act 2000 las amended or ttplaced from time to time). Borrowing powerg Under the Scheme, the Manager may borrow a maximum of 25% of the ner asset Value of the Fund with the prior written consent of the Board. Responsible investment Achieving sustainable long-term return5 is a key objective of the Fund and an important consideration for ¢he Fund's unitholders.we link the financial assessnients of the investincnts made on beh￿[ of thc Unitholdcrs with bmader environnienral. social and governancc (ESG) issues.ThJ'$ recogni$cs the importance of ESG risks for pn)perry and is reflccted iii our investmen¢ processes and the day to day management of the Fund's property portfolio. CCLA'S Ethical & Responsible Investinent and Properry ieams work closely together with the BNP Paribas Real Estate sustainability function, to integrate ESG and performance monitoring. Further dctails on the Fund's Rcsponsible investment Policy and m2n28ement Information is available on reques¢ from the Manager. Review of inve$¢tnent activities and policie$ of the Fund The Board held quarterly meeting5 during the year to carry out its responsibiliry for the #pproval of investment strategy, for setting distribution policy. to review invL%tment diversification. suitability and risk 2nd to review the performance of the Fund. In addition, the Board monirored the 2dministration, expenses and pricing of the Fund. During the year, the Boird also met quarteAy with the Manager to review investincnts. transactions and policies of the Fund.The Manager's repoT¢. which appears later, provides further details. The Manager informed the Board of the need to suspend Ehe Fund and thc Board w2S agreeable.Thereaftcr. the Board made re￿Lar representations to the Managcr for the Fund to be ¥e-opencd at the earlicst opportunity subjcct to the intrrcsts of exisung investors bein8 safeguarded. Control$ and risk management During the year. the B02rd. a5515tcd by the M2nagcr, reviewed thc Fund's systems of internal control and risk report.The Board receives from the Mank￿r and reviews a formal risk m3n2gr￿¢nt report setting out the main risk5 facing the Fund, the contro]s in place to mitigate the risks and the asscssment of each risk aftcr applicition ofmitigating controLs. N Morecroft Ch￿rrnan 19 July 2021 04 Annual Report and Finlnciil Sratements 31 Decembcr 2020

COIF CHARITIES PROPERTY FUND

REPORT OF THE INVESTMENT MANAGER for the year ended 31 December 2020

Performance

Over the year the Fund achieved a total return after expenses of -0.54%. This compares with a return of -1.04% on the comparator benchmark.

Initially capital values fell broadly across the sector as valuers struggled to understand the likely impact of the pandemic. As the uneven nature of the crisis became evident, sub-sector performances diverged, resulting in a substantial dispersion of returns by the end of the year. Well known challenges facing the retail sector meant that it was the weakest performer, in contrast distribution assets remained in strong demand and outperformed. Transaction volumes fell to historically low levels and one outcome of this was an early increase in valuer caution. Valuation weakness was greatest in the second quarter but even though the rate of decline later moderated, the decline was too substantial to be offset by the positive contribution from income, resulting

in the negative total return for the period. Income payments to Unitholders totalled 5.2p, below that achieved during 2019 reflecting more provision for bad debts in the accounts due to rising rent arrears, and higher income expenses given rising vacancy levels and longer void periods in challenging occupier market conditions. Despite this, the Fund’s annual distribution yield of +4.70% was the highest recorded in the MSCI Balanced Property Funds Indices for 2020. The MSCI benchmark yield was +3.4%, whilst the MSCI UK All Property Fund Index yielded just +2.2%. The Unit price declined from 116.52p in December 2019 to 110.64p at the end of 2020, a capital return of -5.05%.

The Fund’s performance record compared to the benchmark over longer term periods to the 31 December 2020 is shown in the table below.

Annualised total capital and income return

1 year 3 years 5 years 10 years To 31 December 2020 % % % p.a. % p.a. Performance against benchmark (after expenses) COIF Charities Property Fund -0.54 +3.45 +4.45 +7.03 MSCI/AREF UK Other Balanced Quarterly Property Fund Index -1.04 +2.66 +4.40 +6.75

Source: CCLA.

Past performance is not a reliable indicator of future results.

Annual Report and Financial Statements

31 December 2020

05

COIF CHARITIES PROPERTY FUND

REPORT OF THE INVESTMENT MANAGER for the year ended 31 December 2020

The underweight allocation to the Retail sector relative to the benchmark, with no shopping centres holdings, has supported performance this year. Another important contribution has resulted from the overweight exposure to the fundamentally stronger industrial and warehouse sub-sector. Offices have demonstrated a degree of resilience, but the performance of the alternative Other Property assets was disappointing, reflecting the impact of lock-down and social distancing on the hospitality and leisure sectors. Active management positions made a mixed contribution. Those where progress was secure were recognised in valuations but early-stage projects and less secure income streams, were treated with caution to reflect a perceived reduction in investor risk appetite and the drag on returns from high property income expenses and future capital expenditure. One positive of this, is that a good deal of potential value has yet to be reflected in the Fund’s valuation.

Dealing in the Fund’s Units was suspended at the end of March due to material valuation uncertainty and for the protection of Unitholders. As a result, during that period no new investor capital was accepted. Net new money flow to the Fund prior to suspension was positive, amounting to £24.6m, however, this was largely reversed when dealings commenced in September, leaving a net gain of £3.6m. This modest improvement was more than offset by weaker valuations and capital expenditure on asset projects. The overall result was a decline in the Fund’s NAV to £584.5m compared to

£615.6m twelve months ago. Investor outflows reduced portfolio liquidity to 4.1% from 7.1% at the half year.

Strategy

The strategy adopted in managing the COIF Charities Property Fund is asset focused. This investment approach is appropriate given the imperfect nature of property as an investment asset class and also reflects its long-term performance characteristics, which are driven by income. In turn, this is consistent with the Fund’s performance objectives and the income needs of Unitholders. A bottom-up investment process supports holding higher yielding investments and assets with shorter unexpired term leases, despite the risk of rising income expenses, helping to deliver attractive total performance and an above average income, whilst maintaining asset quality and avoiding the need to use gearing to boost returns. Although the strategy can be challenged in periods of uncertainty and lower appetite for risk, when additional income and capital expenditure can lag the recognition of income and valuation gains, a pro-active approach protects value and income, helping to manage risk whilst a dynamic portfolio structure means the Fund is well placed to navigate short term sector and asset challenges and reflect lasting change in the sector outlook. The portfolio has above index weightings in office and industrial assets and has a low exposure to a difficult retail sector. Reflecting the maturity of the investment cycle and the persistent uncertain backdrop, in particular for traditional sub-sectors, weightings

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COIF CHARITIES PROPERTY FUND

REPORT OF THE INVESTMENT MANAGER for the year ended 31 December 2020

have been growing in the alternative Other group of assets, with the objective of enhancing portfolio diversification, lengthening the lease expiry profile and building greater income resilience and growth prospects.

Market review

The year began with some optimism that reduced political uncertainty following a decisive General Election and a revival in economic activity fed through to the sector and bring an end to a run of valuation declines. However, these hopes were soon lessened by the Coronavirus global pandemic and the measures taken by governments to contain it. In particular, the effect of lock-down proved to be especially damaging for the retail, hospitality and leisure sectors. The prospects for rents, indeed for the continued viability of many tenants, became increasingly uncertain as business revenues and cash-flow dried up. Working from home helped to minimise the short-term impact on offices, but also raised concerns for future space requirements. In contrast, sectors that remained operational during the lock-down such as industrials, have displayed resilience, whilst others have benefited, such as supermarkets and logistics.

In this environment, markets were initially unable to operate effectively. Uncertainty caused capital values to fall whilst investor inertia resulted in a collapse in transaction volumes. A reduced risk appetite encouraged a flight to prime quality assets and those with long and secure income streams. The result was a wide

dispersion of returns between sectors, investment grades and even regions.

An unusual feature of this crisis was the scale of rent payment delinquency, reflecting the impact of the crisis on business revenues but also the UK Government’s policy of protecting tenants from landlord enforcement action. As a result, normally reliable income flows became a challenge to collect. Many tenants did not pay their March and the June quarterly rents and some have continued to ignore their lease obligations and have not paid rent for a whole year. Securing income streams required a pro-active approach from managers, engaging tenants to understand the scale of their financial difficulties and if needed, agreeing relief packages. Valuations too were less reliable and valuers became increasingly cautious, increasing yields and applying reduced rental values in the period of greatest uncertainty. That these responses may have been overly cautious is reflected in improved capital performance at the end of the year, with growth in November and December reversing a trend to lower values which had been in place for two years. Reduced economic activity and weakened tenant finances resulted in increased void rates. The MSCI Monthly Index investment vacancy rate increased to 9.0% compared to 7.5% twelve months ago, but total reversionary potential from voids has risen sharply to 16.7%, indicating significant development vacancy. The highest void rate is in offices at almost 30%. This reflects the trend to shorter leases, greater tenant instability and asset obsolescence.

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31 December 2020

COIF CHARITIES PROPERTY FUND

REPORT OF THE INVESTMENT MANAGER for the year ended 31 December 2020

MSCI Monthly Capital Indices recovered in the second half of the year but still ended 2020 -6.3% lower. Despite the contribution from income, the total return from the sector was negative, the first negative 12-month total return since the global financial crisis in 2009. Retail values dropped by -16.9% but industrial asset values increased by 3.6%. Sentiment was a factor but so too was income, retail rental values declined by -8.7% whilst industrial rents increased by +2.3%.

Activity

The Fund’s cash holding declined over the year from £35m to £24m or 4.1% of NAV. This change reflects the cost of one new acquisition, capital expenditure on active management projects, a small net inflow of new investor capital and two asset disposals.

The property purchased was an industrial warehouse at Magna Park in Lutterworth, a key Midlands distribution and logistics location. The total invested, including acquisition expenses, was £16.2m. The property is let to DHL Supply Chain Limited with three years unexpired on the lease and an attractive rental income yield of 6.1%. Disposal activity was asset led as opposed to strategic. A multi-storey town centre car park in Crawley, let to NCP, was sold with the purchaser paying £7.1m, a premium price reflecting a yield of just 4.2%. The acquisition cost was £5.0m and the most recent valuation £5.3m. The lease had 7 years

unexpired and it was considered that the tenant was unlikely to renew. Also sold was a recently refurbished and multi-let period office building in Edinburgh, on George Street. The sale price achieved, at £4.0m, was substantially above the £2.9m book cost and the £3.3m valuation prior to sale.

A key focus for the Fund was on maintaining rental income and improving and upgrading key assets. Despite the challenges of remote working the Fund’s property management and investment activities have continued to function well, and a range of assets in the portfolio have recorded valuable progress during the period. At 80 Cannon Street, in the City of London, the largest of the Fund’s investments, the vacant second floor accommodation was let following a successful refurbishment project. Further management activity has commenced involving the refurbishment of the 4th and 9th floors. In the case of the 9th floor, a pre-letting to an existing tenant is already achieved, producing a new record rent for the property. Elsewhere, an important lease extension has been completed on the retail warehouse property in Southampton, let to The Range. Despite the challenging environment a new lease has been completed, helping to secure the long-term income and boosting the capital valuation. New leases were also achieved at the Chorley Retail Park and on the industrial warehouses at Wednesbury in the West Midlands, the IPSL Industrial site at Northampton and at Finlan Road Manchester.

Annual Report and Financial Statements

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COIF CHARITIES PROPERTY FUND

REPORT OF THE INVESTMENT MANAGER for the year ended 31 December 2020

In addition, the long term vacancy at the warehouse at Meir Point, Stoke and the retail warehouse at Cribbs Causeway Bristol also found tenants. Each of these helped to maintain income and contributed to the Fund’s capital performance. A rent review was settled on part of the office accommodation at 1-3 College Hill in London and the uplift in rent achieved, helps to support the overall rental levels in the building and produce an increase in income for the Fund. Plans to redevelop the existing office buildings at Anchorage Gateway, Salford Quays in Manchester and Braywick House in Maidenhead continue to make progress. Here, valuable residential planning consents have been developed, and in the case of Salford Quays, a sale early in 2021 will realise added value from this project.

Although development properties add 3.1%, to the portfolio void total, which is well below MSCI data recorded for December 2020, rising longer term vacancy does expose the Fund to higher property income expenses which have increased significantly in recent years and again during 2020. This is in part due to the

accounting treatment of growing provision for bad debts given the unprecedented levels of rental delinquency reflecting the impact of the pandemic on business and the economy. More positively, all outstanding rent arrears currently recorded as bad debts (Other property expenses) remain due. It is expected that some of this will be recovered during the course of 2021 and reversing the large provisions made in this year’s accounts.

The focus on rent collection and protecting the income streams has required significant effort, engaging and supporting tenants and working to maintain good landlord and tenant relationships. A firm approach has also been appropriate in some instances to protect the interests of the Fund’s Unitholders. A minority of tenants have not paid rent during this period, some have only paid after being pressed and others have agreed monthly payment plans. A few longer-term rent deferments have been agreed, but as yet no rents have been conceded, and aside from where the tenant has been subject to an insolvency procedure, all outstanding rents remain due as arrears. Much consideration has also been given to ensuring multi-let buildings are safe to occupy and to help tenants with their

re-occupation plans as lockdown conditions are eased. Administration and Company Voluntary Arrangements (CVAs) activity has increased. The most significant of these is the Travelodge Hotels CVA which resulted in a 75% reduction in that income stream for 2020, although, for the hotel in Cockermouth, Cumbria, a valuable lease extension of seven years was negotiated. Other casualties include Fox Print, which leased industrial units at Tunbridge Wells and Oak Furnitureland at the Salmon Retail Park, Hereford. During the year, quarterly rent collection rates have consistently improved at around 89%, and the more recent 25 December 2020 quarterly rent run is on track to match those levels. The most challenging sub-sector is retail where 16% of retail warehouse rents and 48% of shop rents remain uncollected.

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COIF CHARITIES PROPERTY FUND

REPORT OF THE INVESTMENT MANAGER for the year ended 31 December 2020

In contrast, the collection rates for the industrial and office holdings have been 95% and 91% respectively. This is a complicated and challenging picture with some non-payers genuinely financially distressed. However, of the 11% of rents that currently remain uncollected, most is due from those tenants that have so far refused to pay whilst the UK Governments moratorium against landlord enforcement action continues.

Outlook

It has been a tumultuous year for the real estate sector in the UK, one which is likely to leave a long-term legacy. Existing trends have been amplified and accelerated and new ones have emerged, the result has been severe difficulties for the retail sector and yet sustained support for industrial assets. Questions have been raised about the prospects for the office sector. From an economic perspective there is hope that, as social mobility returns, so activity should rebound quickly. Other non-trivial challenges exist of course, including Brexit and the impact of the lockdown on the important services sector. As a result, even with rising output in 2021 and 2022, it will not be until the end of that year before the output levels achieved at the end of 2019 are regained.

Within the sector we expect some recovery in transaction levels but no early return to past volumes. An environment of recovery will underpin returns, which are expected to be positive, but to a modest extent; valuer caution is likely to persist and rent collection will remain a

challenge given the pressure on some tenants. The divergence of returns at the sub fund level is expected to continue, with questions remaining about the true quality of some retail assets. As a result of this, asset specific risks will remain elevated and void rates could move higher, certainly in the months ahead.

The reality is, that even with recovery, the sector continues to face a number of fundamental challenges each of which could have an important influence on returns. The positive side is that UK real estate continues to offer an accessible and transparent market for investors with a high income yield which stands out in a low income environment.

Suspension of COIF Charities Property Fund

Dealings in the Fund were suspended between 24 March 2020 and 24 September 2020. This followed a notice form the Independent Valuer that in the uncertain environment prevailing at that time it was not possible to provide a valuation with the required level of accuracy and from March 2020 valuations were reported on the basis of ‘material valuation uncertainty’. Under these circumstances we were unable to produce a price which we could say with confidence accurately reflected of fair value of the assets and so in order to protect the interests of investors dealing was suspended.

Conditions in the sector improved in the months which followed and in September the material uncertainty notice was lifted, allowing transactions to start again.

10 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

REPORT OF THE INVESTMENT MANAGER for the year ended 31 December 2020

Association of Real Estate Funds

The Fund complies with the minimum requirements of the Association of Real Estate Funds (AREF) Code of Practice, which is a voluntary Code which aims to encourage members of AREF to adopt best practice whenever possible. The Code is publicly available and published on the Association’s website: www.aref.org.uk

P Hannam

Head of Property

CCLA Investment Management Limited 19 July 2021

Risk warning

Investors should consider the risk factors identified in the Scheme Particulars. Past performance is not a reliable indicator of future results. The value of investments and the income derived from them may fall as well as rise. Investors may not get back the amount originally invested and may lose money.

Property and property related assets are inherently difficult to value because of the individual nature of each property. As a result, valuations are open to substantial subjectivity. There is no assurance that the valuations of the properties will reflect the sale price achieved, even where such sale occurs shortly after the valuation point.

The performance of the Fund could be affected adversely by a downturn in the property market in terms of capital value or a weakening of rental yields. The revenue received by the Fund is dependent to a large extent upon the occupancy levels of any property owned by the Fund and the rents paid by these tenants.

Rental revenues and property values are affected by changes in general economic climate and local conditions.

Property values are dependent in particular on current rental values, prospective rental growth, lease lengths, tenant credit worthiness and the valuation yield (which is itself related to interest rates, the market appetite for property investment in general and with reference to the specific property in question) together with the nature, location and physical condition of the property concerned.

The Fund’s Units are intended only for long term investment and are not suitable for money liable to be spent in the near future. The Units are realisable only on each monthly dealing day and whilst investors can request a redemption at any time, all such requests are subject to a minimum notice period of 90 calendar days.

Annual Report and Financial Statements

31 December 2020

11

COIF CHARITIES PROPERTY FUND

INDEPENDENT AUDITORS’ REPORT to the Trustees of COIF Charities Property Fund

Report on the audit of the financial statements

Opinion

In our opinion, the financial statements of COIF Charities Property Fund (the “Fund”):

We have audited the financial statements, included within the Annual Report and Financial Statements (the “Annual Report”), which comprise: the balance sheet as at 31 December 2020; the statement of total return, the statement of change in net assets attributable to unitholders for the year then ended; the distribution tables; and the notes to the financial statements.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the Fund in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Conclusions relating to going concern

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Fund’s ability to continue as a going concern for a period of at least twelve months from the date on which the financial statements are authorised for issue.

Annual Report and Financial Statements

31 December 2020

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COIF CHARITIES PROPERTY FUND

INDEPENDENT AUDITORS’ REPORT to the Trustees of COIF Charities Property Fund

In auditing the financial statements, we have concluded that the Manager’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Fund’s ability to continue as a going concern.

Our responsibilities and the responsibilities of the Manager with respect to going concern are described in the relevant sections of this report.

Reporting on other information

The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The Manager is responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to

conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

Base on our work undertaken in the course of the audit, The Charities Act 2011 requires us to also report certain opinions and matters as described below.

Manager’s Report

In our opinion, the information given in the Report of the Investment Manager for the financial year for which the financial statements are prepared is consistent with the financial statements.

Responsibilities for the financial statements and the audit

Responsibilities of the Manager for the financial statements As explained more fully in the Statement of Board, Depositary and Manager Responsibilities, the manager is responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The Manager is also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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31 December 2020

COIF CHARITIES PROPERTY FUND

INDEPENDENT AUDITORS’ REPORT to the Trustees of COIF Charities Property Fund

In preparing the financial statements, the Manager is responsible for assessing the Fund’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager either intends to wind up or terminate the Fund, or has no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

We are eligible to act and have been appointed as auditors under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the Fund/industry, we identified that the principal risks of noncompliance with laws and regulations related to the Charities Act 2011 and we considered the extent to which non-compliance might have a material effect on the financial statements, we also considered those laws and regulations that have a direct impact on the financial statement. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or to increase the net asset value of the Fund and assumptions and judgements made by management in their significant accounting estimates. Audit procedures performed included:

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COIF CHARITIES PROPERTY FUND

INDEPENDENT AUDITORS’ REPORT to the Trustees of COIF Charities Property Fund

Charities (Accounts and Reports) Regulations 2008) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Charities Act 2011 exception reporting

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Under the Charities Act 2011 we are required to report to you if, in our opinion:

  1. we have not received all the information and explanations we require for our audit; or

  2. sufficient accounting records have not been kept; or

  3. the financial statements are not in agreement with the accounting records and returns.

We have no exceptions to report arising from this responsibility.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.

Use of this report

This report, including the opinion, has been prepared for and only for the Fund’s Managers as a body in accordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act (Regulation 24 of The

PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors London

19 July 2021

Annual Report and Financial Statements

31 December 2020

15

COIF CHARITIES PROPERTY FUND

REPORT OF THE VALUERS

Dear Sirs,

The COIF Charities Property Fund Property Valuation as at 31 December 2020

In accordance with your instructions received from The COIF Charities Property Fund (“the Fund”) to value all the property investments owned by the Fund (“the Properties”) on a monthly basis, we have valued the Properties as at 31 December 2020. The valuation has been prepared on the basis of Fair Value, in accordance with the current edition of the RICS valuation – Professional Standards published by the Royal Institution of Chartered Surveyors (RICS). We understand that our valuation is required for Unit pricing and financial statements purposes. Our report is addressed to the Fund.

We are of the opinion that the aggregate Fair Values of all the properties held by the Fund as at 31 December 2020 is £569,880,000 (Five Hundred and Sixty Nine Million Eight Hundred and Eighty Thousand Pounds).

Details of the basis of our valuation and the individual properties are set out in our valuation report, dated 8 January 2021.

Market conditions explanatory note: Novel Coronavirus (COVID-19)

The outbreak of COVID-19, declared by the World Health Organisation as a “Global Pandemic” on the 11th March 2020, has and continues to impact many aspects of daily life and the global economy – with some real estate markets having experienced lower levels of transactional activity and liquidity. Travel, movement and operational restrictions have been implemented by many countries. In some cases, “lockdowns” have been applied to varying degrees and to reflect further “waves” of COVID-19; although these may imply a new stage of the crisis, they are not unprecedented in the same way as the initial impact.

The pandemic and the measures taken to tackle COVID-19 continue to affect economies and real estate markets globally. Nevertheless, as at the valuation date property markets are mostly functioning again, with transaction volumes and other relevant evidence at levels where an adequate quantum of market evidence exists upon which to base opinions of value. Accordingly, and for the avoidance of doubt, our valuation is not reported as being subject to ‘material valuation uncertainty’ as defined by VPS 3 and VPGA 10 of the RICS Valuation – Global Standards.

Annual Report and Financial Statements

31 December 2020

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COIF CHARITIES PROPERTY FUND

REPORT OF THE VALUERS

For the avoidance of doubt this explanatory note has been included to ensure transparency and to provide further insight as to the market context under which the valuation opinion was prepared. In recognition of the potential for market conditions to move rapidly in response to changes in the control or future spread of COVID-19 we highlight the importance of the valuation date.

Yours faithfully,

Knight Frank LLP 19 July 2021

17 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

SUMMARY RISK INDICATOR

The European Union imposed legislation which sets out detailed guidelines for the calculation of the risk ratings of products to be portrayed through a summary risk indicator. It is intended to be a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because the Manager is not able to pay you. The risk of the product may be significantly higher than the one represented in the summary risk indicator where the product is not held for the recommended holding period (RHP).

1
2
3
4
5
6
7
Lower risk
Higher risk

The Manager has classified the COIF Charities Property Fund as 2 out of 7, which is a low risk class. This rates the potential losses from future performance at a low level and poor market conditions are very unlikely to impact the Manager’s capacity to pay you. This classification is not guaranteed and may change over time and may not be a reliable indication of the future risk profile of the Fund. The lowest category does not mean risk free.

The summary risk indicator assumes investment in the Fund for the RHP of five years. The actual risk can vary significantly if you cash in at an early stage and you may get back less.

The Fund should be considered illiquid as it is not admitted to trading on a secondary market and no alternative liquidity facility is promoted by the Manager or a third party. Property is recognised as an illiquid asset and is thus most suited to long-term investment. Whilst investors can request redemption at any time, all such requests are subject to a minimum notice period of 90 calendar days. The Fund normally deals on the last Tuesday and Thursday of each month. The Fund does not include any protection from future market performance, so you could lose some or all your investment.

Commercial property can be an illiquid asset class and the Manager has the discretion to defer redemptions beyond the minimum notice period, up to six months in total (subject to a period of notice of not less than 30 days to investors), if it believes doing so is in the interest of investors and the good management of the Fund. Where an investor makes an application to sell or cancel Units the Manager may, with the agreement of the Trustee, arrange to transfer scheme property out of the Fund in place of payment in cash for the Units, but only if it is judged by the Manager not to disadvantage the remaining investors.

A more detailed description of risk factors that apply to this product is set out in the latest Scheme Particulars, which is available on the Manager’s website or by request.

18 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

COMPARATIVE TABLE

Change in net assets per Unit

Income Units Year to Year to Year to Year to Year to 31.12.2020 31.12.2019 31.12.2018 31.12.2017 31.12.2016 pence pence pence pence pence per Unit per Unit per Unit per Unit per Unit Opening net asset value per Unit 115.45 119.05 116.05 111.73 115.45 Return before operating charges 0.97 4.51 10.90 11.92 3.88 Operating charges (1.81) (1.71) (1.50) (1.20) (1.20) Return after operating charges (0.84) 2.80 9.40 10.72 2.68 Distributions on income Units (5.20) (6.40) (6.40) (6.40) (6.40) Closing net asset value per Unit 109.41 115.45 119.05 116.05 111.73 Performance Return after charges -0.73% 2.35% 8.10% 9.59% 2.32% Gross yield* 4.62% 5.40% 5.33% 5.39% 5.62% Other information Closing net asset value (£’000) 584,485 615,605 597,632 520,120 522,735 Closing number of Units (in thousands) 534,234,121 533,227,472 502,012,088 448,183,047 467,870,131 Prices (pence per Unit) Highest Unit price (offer) 119.63 122.09 123.51 120.28 120.13 Lowest Unit price (bid) 107.50 114.71 115.25 111.33 109.74 Annual management charge 0.65% 0.65% 0.64% 0.65% 0.65% Other costs 0.04% 0.06% 0.08% 0.08% 0.07% Operating charges 0.69% 0.71% 0.72% 0.73% 0.72% Other property costs 0.88% 0.73% 0.57% 0.34% 0.32% Total charges figure 1.57%* 1.44% 1.29% 1.07% 1.04%

All of the above figures are ratios set against the Fund’s average net assets calculated over the year.

Annual Report and Financial Statements

31 December 2020

19

COIF CHARITIES PROPERTY FUND

PORTFOLIO ANALYSIS at 31 December 2020

Top Ten Property Holdings

Property % of Fund
London, 80 Cannon Street Offices/Shops 10.42%
Brighton, Lewes Road Retail Warehouses 5.37%
Mendlesham, Norwich Road Industrial 5.15%
Bracknell, 5 Arlington Square Office 4.56%
Bath, Rossiter Road Other 3.44%
London, 1-3 College Hill Office 3.27%
Lutterworth, Hunter Boulevard Industrial 3.26%
Lutterworth, Hunter Boulevard Industrial 2.91%
Bristol, 1400-1600 Aztec West Industrial 2.90%
Crawley, Manor Gate Manor Royal Industrial 2.74%

Asset by type

Regional and sector analysis

----- Start of picture text -----
Industrial & Warehouses – 38.26%
Offices – 30.89%
Retail Warehouses – 15.56%
Other – 8.01%
Shops – 3.69%
Cash – 3.59%
----- End of picture text -----

----- Start of picture text -----
Industrial excl. SE – 25.48%
Retail Warehouse – 15.56%
Offices rest of SE – 13.03%
Industrial South East – 12.78%
Offices City – 12.04%
Other – 8.00%
Offices excl. SE – 5.83%
Cash – 3.59%
Shops excl. SE – 1.87%
Shops South East – 1.82%
----- End of picture text -----

Portfolio turnover

Portfolio turnover
Year to Year to
31.12.2020 31.12.2019
Portfolio turnover rate 1.80% 6.06%

The portfolio turnover rates are calculated by the total sales or purchases (excluding cash), whichever is less, divided by average monthly assets during the year.

20 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PORTFOLIO STATEMENT

at 31 December 2020

Properties

Total in valuation ranges £’000 % of Fund
Valued between £0 and £5m 81,830 14.00
29 properties
Valued between £5 and £10m 150,400 25.73
21 properties
Valued between £10 and £25m 192,300 32.90
13 properties
Valued at over £25m 145,350 24.87
4 properties
Net other assets 14,605 2.50
Net assets 584,485 100.00

Ownership of the Fund at 31 December 2020

at 31 December 2020
Number of %
Number Units in issue of Units
of investors ‘000 in issue
Less than 1% 706 141,845,110 26.55
1% or greater but less than 2% 4 32,840,148 6.15
2% or greater but less than 4% 2 31,602,650 5.92
4% or greater but less than 8% 2 63,469,900 11.88
Greater than 8% 2 264,476,313 49.50
716 534,234,121 100.00
Held by the largest investor 1 158,730,980 29.71
Held by top 5 investors 5 344,463,373 64.48

The COIF Charities Investment Fund has a holding of 105,745,333 Units – 19.79% (2019: 105,559,890 – 19.80%), the COIF Charities Ethical Investment Fund has a holding of 39,091,751 Units – 7.32% (2019: 39,091,751 – 7.33%) and the CBF Church of England Property Fund has a holding of 158,730,980 Units – 29.71% (2019: 159,711,353 – 29.95%).

21 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO at 31 December 2020

Standard Retail

Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Monsoon Accessorize
10 yrs
5 yrs
2021
108,000
0-5
Ltd
18.02.16
C & J Clark
10 yrs
5 yrs
2021
210,000
0-5
International Ltd
20.04.16
Alexander Mullan
1 yr
0 yrs
2020
10,740
and Charles Williams
22.03.19
Your
10 yrs
5 yrs
2021
30,000
0-5
Conveyancer Ltd
01.08.16
Barrie Dear Ltd
15 yrs
5 yrs
2025
30,000
11.06.20
Yaich Import Export
10 yrs
5 yrs
2025
17,000
Ltd
11.06.20
Clydesdale Bank Plc
5 yrs
5 yrs
2024
117,500
0-5
25.06.19
Starbucks Coffee
18 yrs
0 yrs
2024
109,500
Company (UK) Ltd
02.10.06
Waterstones
10 yrs
5 yrs
2024
112,500
0-5
Booksellers Ltd
29.03.19
Queensway Coffee
10 yrs
5 yrs
2022
80,000
House Ltd
14.06.17
Schuh Ltd
10 yrs
5 yrs
2022
120,000
0-5
15.10.12
Your Phone Care Ltd
15 yrs
5 yrs
2025
34,750
0-5
30.06.15
Wilco Retail Ltd
15 yrs
5 yrs
2022
420,000
0-5
06.01.17
71-72 East Street
CHICHESTER
76/77 East Street
CHICHESTER
85-89 High Street
DUNFERMLINE
131-135
Northumberland St
NEWCASTLE
UPON TYNE
8-9 High Street
STRATFORD
UPON AVON
17 King Street
TRURO
18 King Street
TRURO
18-20 Boscawen Street
TRURO

22 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO at 31 December 2020

Offices

Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Technip UK Ltd
12 yrs
5 yrs
2023
575,235
5-10
07.02.11
Technip UK Ltd
15 yrs
5 yrs
2023
573,975
16.05.08
Scottish Enterprise
5 yrs
0 yrs
2022
167,518
0-5
18.12.17
SSE
30 yrs
1 yr
2021
21,380
Telecomunications
08.12.17
Virgin Media Ltd
10 yrs
3 yrs
–
2,645
>25
06.02.12
Verizon UK Ltd
3 yrs
0 yrs
–
2,637
30.01.08
Paratus AMC Ltd
6 yrs
0 yrs
2023
562,708
17.10.17
Lloyds Register
10 yrs
5 yrs
2023
574,560
EMEA
02.03.18
Skillsoft UK Ltd
10 yrs
5 yrs
2024
215,604
15.03.19
Centrilogic Ltd
24 yrs
5 yrs
2023
88,592
26.04.18
Centrilogic Ltd
25 yrs
5 yrs
2022
289,124
01.12.17
Hoare Lea LLP
15 yrs
5 yrs
2021
400,634
5-10
04.11.16
Aspect 32
ABERDEEN
New Lanarkshire
House
BELSHILL
5 Arlington Square
BRACKNELL
155 Aztec West
BRISTOL

23 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Offices (continued)

Offices(continued)
Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Streets Whitmarsh
10 yrs
5 yrs
2021
71,850
10-25
Sterland LLP
08.08.16
Chase De Vere
10 yrs
0 yrs
2023
43,000
IFA Group Plc
10.05.13
Tescan-UK Ltd
5 yrs
0 yrs
2023
52,480
20.12.13
Henry Riley LLP
10 yrs
5 yrs
2023
40,986
03.06.13
Anatune Ltd
6 yrs
0 yrs
2022
87,068
24.06.16
Atkins Ltd
5 yrs
0 yrs
2021
129,675
24.06.16
Aecom Ltd
10 yrs
5 yrs
2022
111,764
24.07.17
MM Wealth Ltd
10 yrs
5 yrs
2023
91,500
22.03.18
Automatic Data
17 yrs
1 yr
2022
1403,696
10-25
Processing Ltd
24.03.05
Hayes & Jarvis
3 yrs
0 yrs
2022
485,000
0-5
(Travel) Ltd
11.02.19
Wellbrook Court
CAMBRIDGE
Syward Place
CHERTSEY
The Atrium
CRAWLEY
  • Date in the past indicates that the review has not been settled yet.

24 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Offices (continued)

Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
DAC Beachcroft
5 yrs
0 yrs
2023
97,260
0-5
Scotland LLP
01.02.18
DAC Beachcroft
5 yrs
0 yrs
2023
48,629
Scotland LLP
01.02.18
Blue Arrow Ltd
3 yrs
0 yrs
2022
46,300
22.03.19
DAC Beachcroft
8 yrs
0 yrs
2021
2,000
Scotland LLP
14.06.13
Thus Group
25 yrs
5 yrs
2020
64,660
0-5
Holdings Plc
30.03.00
Save & Invest
20 yrs
5 yrs
2022
75,000
(Financial Planning)
18.06.07
MLM CPS Ltd
5 yrs
0 yrs
2024
26,042
01.03.19
Yellowcom Ltd
2 yrs
0 yrs
2019
2,500
20.03.17
Vodafone Ltd
15 yrs
3 yrs
2019
12,417
07.12.04
Selfridges Retail Ltd
15 yrs
5 yrs
2025
340,992
5-10
28.10.15
Sytner Group Ltd
22 yrs
22 yrs
2024
280,000
0-5
08.04.19
Baker Tilly
15 yrs
5 yrs
2022
241,439
0-5
Management Ltd
29.09.07
125/139 West
Regent Street
GLASGOW
100 West
Regent Street
GLASGOW
4 Smith Way
LEICESTER
3 Penman Way
LEICESTER
7 Lewis Court
LEICESTER

25 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Offices (continued)

Offices(continued)
Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Hedley Foundation
10 yrs
5 yrs
2023
62,820
10-25
Ltd
25.03.18
G O Woodcock
9 yrs
0 yrs
2023
122,640
M Woodcock
12.08.14
J Woodcock
Interfax Europe Ltd
5 yrs
0 yrs
2024
90,000
08.03.19
MRA Search Ltd
4 yrs
0 yrs
2024
69,120
22.12.20
G O Woodcock
7 yrs
0 yrs
2023
59,995
M Woodcock
08.03.16
J Woodcock
Keycraft Ltd
5 yrs
0 yrs
2023
58,435
02.11.18
S & H Consulting
5 yrs
0 yrs
2021
3,000
Ltd
04.07.16
Warren Lefton
3 yrs
0 yrs
2022
3,250
28.10.19
Interior Motives
10 yrs
0 yrs
2024
60,000
International Ltd
01.07.14
Capital Asset
10 yrs
0 yrs
2024
116,000
Management
04.07.14
(Financial Services)
MRA Search Ltd
5 yrs
0 yrs
2024
132,720
18.01.19
Kinney Green LLP
5 yrs
0 yrs
2024
61,468
11.02.19
1- 3 College Hill
LONDON

26 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Offices (continued)

Offices(continued)
Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Schneider Electric
10 yrs
5 yrs
2021
378,500
5-10
Ltd
12.09.11
UK Drainage Claims
3 yrs
0 yrs
2021
31,500
Ltd
09.01.18
Windsor Accountancy
2 yrs
0 yrs
2022
50,000
Ltd
04.09.20
Via Resource Ltd
5 yrs
0 yrs
2020
30,000
01.01.15
The Therapy Rooms
5 yrs
0 yrs
2021
7,000
South Ltd
31.05.16
Kalra Business
2 yrs
0 yrs
2020
17,500
Services Ltd
07.06.18
Semarchy Ltd
3 yrs
0 yrs
2025
33,000
04.03.20
Zagg International
2 yrs
0 yrs
2021
140,300
Ltd
01.04.19
Vacant
–
–
–
–
0-5
Aecom Ltd
14 yrs
5 yrs
2022
545,127
5-10
20.06.08
Windsor Road
MAIDENHEAD
Gateway House
The Anchorage
MANCHESTER
AECOM House
ST ALBANS
  • Date in the past indicates that the review has not been settled yet.

27 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Offices (continued)

Offices(continued)
Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Kuehne & Nagel
15 yrs
5 yrs
2025
285,110
5-10
Ltd
20.01.19
World Vision
10 yrs
5 yrs
2022
227,887
International
20.01.12
K2M UK Ltd
5 yrs
0 yrs
2021
261,434
16.11.16
Kuehne & Nagel
4 yrs
0 yrs
2019
3,000
Ltd
16.07.15
1 Roundwood
Avenue
WEST LONDON

28 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Offices/Shops

Offices/Shops
Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Boots UK Ltd
10 yrs
5 yrs
2024
350,000
>25
16.10.19
Cabot Credit
10 yrs
5 yrs
2024
255,024
Management Ltd
01.03.19
International
10 yrs
5 yrs
2025
306,393
Registries (UK) Ltd
25.03.20
Freight Investor
1 yr
0 yrs
2021
240,000
Services Ltd
09.08.20
Advantage Professional
11 yrs
0 yrs
2020
257,600
UK Ltd
19.01.10
Silver Development
10 yrs
5 yrs
2023
238,619
and Constuction
11.11.13
Freight Investor
5 yrs
0 yrs
2025
384,000
Services Ltd
10.11.20
Sonovate Ltd
5 yrs
0 yrs
2021
218,477
10.05.16
SW6 Associates Ltd
5 yrs
0 yrs
2021
92,100
10.05.16
Nexthink Ltd
5 yrs
0 yrs
2023
242,450
15.06.18
ISR Research Ltd
5 yrs
0 yrs
2023
128,467
21.09.18
Netroadshow Inc
5 yrs
0 yrs
2023
150,309
27.09.18
80 Cannon Street
LONDON

29 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Industrial

Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Vacant
–
–
–
–
0-5
Rettig (UK) Ltd
99 yrs
14 yrs
2025
669,814
10-25
17.10.69
Aardman Holdings
6 yrs
6 yrs
2022
95,272
10-25
Ltd
25.03.19
Aardman Holdings
6 yrs
6 yrs
2022
269,130
Ltd
25.03.19
Aardman Holdings
6 yrs
6 yrs
2022
63,820
Ltd
25.03.19
Aardman Holdings
6 yrs
6 yrs
2022
62,820
Ltd
25.03.19
PJH Group Ltd
10 yrs
5 yrs
2022
78,000
03.12.18
Aardman Holdings
6 yrs
3 yrs
2022
68,958
Ltd
25.03.19
Spandex Ltd
5 yrs
0 yrs
2021
540,350
22.01.16
Giant Booker Ltd
25 yrs
5 yrs
2020
652,923
5-10
28.02.05
Rossetts (UK) Ltd
10 yrs
5 yrs
2023
132,000
10-25
26.11.18
Creative Technology
10 yrs
5 yrs
2021
443,000
Ltd
07.06.11
Wallace Facility
Badentoy
ABERDEEN
Drum Industrial
Estate
BIRTLEY
1400-1600 Aztec
West Business Park
BRISTOL
Batchelor Road
CARDIFF
Manor Gate
Manor Royal
CRAWLEY

30 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Industrial (continued)

Industrial(continued)
Lease Mkt value
Term/ review Next* Rent range
Property Tenant **from ** period **review ** £ £m
Unit 61 Finlan Road Romac Logistics Ltd 16 yrs 5 yrs 2026 319,992 5-10
GREATER 03.12.20
MANCHESTER
28-32 Fountain Drive Elis UK Ltd 25 yrs 5 yrs 2022 275,000 0-5
INCHINNAN 23.06.17
Unit B Telford Point Knights of Old Ltd 13 yrs 5 yrs 2021 357,832 5-10
KETTERING 01.07.13
7 St Andrews Way Vacant – – – – 10-25
LONDON
3320 Hunter VWR International 35 yrs 5 yrs 2024 1,044,223 10-25
Boulevard Ltd 10.10.94
LUTTERWORTH
Unit 3220 DHL Supply Chain 10 yrs 0 yrs 2024 980,699 10-25
Wellington Park Ltd 25.12.14
LUTTERWORTH
Unit G1 Touchet Disaster Recovery 15 yrs 5 yrs 2023 362,000 5-10
Hall Road Services Ltd 07.01.13
MANCHESTER
Norwich Road CEVA Logistics Ltd 20 yrs 1 yr 2021 2,200,889 >25
MENDLESHAM 20.05.10
Brackmills C Butt Ltd 10 yrs 5 yrs 2024 635,000 10-25
Industrial Estate 24.06.14
NORTHAMPTON
Dimensions House Harvey Nichols and 10 yrs 5 yrs 2020 479,543 5-10
NORTHAMPTON Company Ltd 11.03.15
100 Pavilion Drive Intelligent Processing 15 yrs 0 yrs 2025 1,275,000 10-25
NORTHAMPTON Solutions Ltd 25.12.10

31 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Industrial (continued)

Industrial(continued)
Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Sunseeker International
20 yrs
5 yrs
2022
320,000
0-5
Ltd
26.04.20
Emma Bridgewater Ltd
15 yrs
5 yrs
2025
346,480
5-10
04.11.20
SH Muffet Ltd
10 yrs
5 yrs
2025
118,600
5-10
24.03.10

Smiths News
15 yrs
5 yrs
2025
285,000
0-5
Trading Ltd
03.07.20
Royal Mail Group Ltd
11 yrs
5 yrs
2025
246,000
5-10
31.12.19
Cosentino UK Ltd
10 yrs
5 yrs
2022
179,616
06.11.12
35 Willis Way
Industrial
POOLE
Mier Point
STOKE-ON-TRENT
Units 1& 2
Longfield Road
TUNBRIDGE WELLS
Javelin Park
WEDNESBURY
6 Weston Avenue
WEST THURROCK

32 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Retail Warehouses

Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
What Stores Ltd
3 yrs
0 yrs
2023
40,000
0-5
23.10.20
Aldi Stores Ltd
20 yrs
5 yrs
2023
400,000
>25
18.06.18
Hobbycraft Trading
15 yrs
5 yrs
2023
236,828
Ltd
25.05.18
Halfords Ltd
10 yrs
5 yrs
2022
240,000
04.09.17
B&Q Plc
15 yrs
5 yrs
2021
945,765
04.08.16
Costa Ltd
10 yrs
5 yrs
2023
67,500
04.06.18
B&M Retail
31 yrs
5 yrs
2023
309,100
0-5
Ltd
30.04.03
Wickes Building
25 yrs
5 yrs
2025
330,000
5-10
Supplies Ltd
24.10.00
DP Realty Ltd
25 yrs
5 yrs
2020
17,500
t/a Domino’s Pizza
24.10.00
Subway Realty Ltd
10 yrs
5 yrs
2020
20,000
26.01.15
BJR Foods Ltd
10 yrs
5 yrs
2025
67,575
t/a KFC
24.10.20
Diets 2 Go Ltd
10 yrs
5 yrs
2024
9,000
10.10.19
Sunseeker Beds
10 yrs
5 yrs
2024
25,000
Ltd
23.09.19
Unit 5
Highwood Lane
BRISTOL
Lewes Road
BRIGHTON
Silver Street
BROWNHILLS
Chorley Retail Park
CHORLEY

33 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Retail Warehouses (continued)

Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Boots UK Ltd
20 yrs
5 yrs
2019
227,988
0-5
24.06.04
B&M Retail Ltd
10 yrs
0 yrs
2026
210,000
0-5
11.02.16
Dreams PLC
6 yrs
0 yrs
2024
75,000
12.12.18
Oak Furnitureland
10 yrs
5 yrs
2024
168,000
Group Ltd
03.07.19
Jacmar Developments
125 yrs
0 yrs
–
–
Ltd
25.12.93
Vacant
–
–
–
–
0-5
Wickes Building
25 yrs
5 yrs
2023
638,750
5-10
Supplies Ltd
03.10.03
B&M Retail Ltd
15 yrs
5 yrs
2022
374,638
0-5
11.10.12
TJX UK
19 yrs
5 yrs
2022
347,500
0-5
24.06.03
Matalan Retail Ltd
25 yrs
5 yrs
2020
253,600
0-5
17.11.95
Wren Kitchens Ltd
10 yrs
0 yrs
2023
296,221
10-25
10.04.13
Sofology Ltd
10 yrs
0 yrs
2023
445,804
08.04.13
Unit 8
DERBY
Holmer Road
HEREFORD
100 Regent Road
MANCHESTER
Snowden Drive
MILTON KEYNES
Wellingborough Road
NORTHAMPTON
St Peter’s Way
NORTHAMPTON
Portway Road
OLDBURY
Solihull Gate
Retail Park
SOLIHULL

34 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Retail Warehouses (continued)

Retail Warehouses(co ntinued)
Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Tapi Carpets & Floors
10 yrs
5 yrs
2022
330,693
Ltd
24.07.17
Furniture Village
20 yrs
15 yrs
2022
325,000
Ltd
04.05.07
CDS (Superstores
32 yrs
5 yrs
2023
431,037
5-10
International) Ltd
28.11.03
TJX UK Ltd
20 yrs
5 yrs
2022
379,300
5-10
25.12.02
Argos Ltd
10 yrs
5 yrs
2024
247,894
20.12.19
Solihull Gate
Retail Park
SOLIHULL_(continued)_
230-234
Winchester Road
SOUTHAMPTON
Units 1 & 2
TAMWORTH

35 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

PROPERTY PORTFOLIO

at 31 December 2020

Other

Other
Property Lease
Mkt value
Term/
review
Next
Rent
range
Tenant from period review £
£m*
Travelodge Hotels
40 yrs
1 yr
2021
320,130
10-25
Ltd
02.06.08
Broughtons of
15 yrs
5 yrs
2021
261,500
5-10
Cheltenham Ltd
11.01.11
Inchcape Estates
10 yrs
0 yrs
2021
143,500
Ltd
08.09.11
Travelodge Hotels
32 yrs
5 yrs
2022
43,022
0-5
Ltd
14.12.07
Motorlines Holdings
25 yrs
5 yrs
2023
400,000
5-10
Ltd
23.11.18
Eastern Western Motor
25 yrs
5 yrs
2021
286,254
0-5
Group Ltd
27.07.01
Ideal Shopping
20 yrs
5 yrs
2024
509,134
5-10
Direct Ltd
31.01.14
Ideal Shopping
18 yrs
5 yrs
2024
12,808
Direct Ltd
13.06.16
Rossiter Road
BATH
Rutherford Way
CHELTENHAM
Europe Way
COCKERMOUTH
Rennie Drive
DARTFORD
100 West Street
GLASGOW
Newark Road
PETERBOROUGH
  • Date in the past indicates that the review has not been settled yet.

36 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

STATEMENT OF TOTAL RETURN for the year ended 31 December 2020

Year ended Year ended
31.12.2020 31.12.2019
Note £’000 £’000 £’000 £’000
Income
Net capital losses 2 (33,128) (14,997)
Revenue 3 42,890 39,700
Expenses 4 (15,946) (12,138)
Finance costs: interest 6 (33) (9)
Net revenue before taxation 26,911 27,553
Taxation 5 – –
Net revenue after taxation 26,911 27,553
Total return before distributions (6,217) 12,556
Finance costs: distributions 6 (28,475) (34,011)
Change in net assets attributable to
Unitholders from investment activities (34,692) (21,455)

STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS for the year ended 31 December 2020

Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000 £’000 £’000
Opening net assets attributable to Unitholders 615,605 597,632
Amounts receivable on issue of Units 30,154 85,510
Amountspayable on cancellation of Units (26,582) (46,082)
3,572 39,428
Change in net assets attributable to
Unitholders from investment activities (34,692) (21,455)
Closing net assets attributable to Unitholders 584,485 615,605

The notes on pages 40 to 52 and distribution table on page 53 form part of these financial statements.

Annual Report and Financial Statements

31 December 2020

37

COIF CHAIiITIES PILOPERTY FUND CCLA BALANCE SHEEr at 31 December 2020 31.12.2020 £000 £'ooo 31.12.2019 £'(K)O £'o Notr ASSETS Investment property Dcbtors Cash and bank b212nces Cash equiv21ents Total other assets Total assets 563.279 586,646 13.260 6,730 17.288 9.517 8,809 26,162 44.488 631.134 600,557 LlABILrrtES Creditor$ Distribution payable on incom¢ Units Total liabiltties Ne¢ a8$e¢s attributable to Unitholder$ io 9.341 6.731 6,624 8,905 16,072 584.485 615,605 The financial sca¢ements on page5 37 10 52 have been approved by the Board. Approved on behalf of the Board 19 July 2021 N Morecroft, Chairman The notes on pages 40 to 52 and distribution table on page 53 form part of ¢hese financial statements. 38 Annual Report and Financi21 Stitements 31 December 2020

COIF CHARITIES PROPERTY FUND

CASH FLOW STATEMENT

for the year ended 31 December 2020

Year ended Year ended
31.12.2020 31.12.2019
Note £’000 £’000 £’000 £’000
Net cash infow from operating activities 18 25,884 27,036
Servicing of finance
Distributions paid (30,479) (33,774)
Net cash outflow from investment activities
Capital expenses (4,622) (2,518)
Payments to acquire investments (16,188) (84,053)
Proceeds on disposal of investments 11,050 38,148
(9,760) (48,423)
Net cash inflow from financing activities
Issue of Units 30,154 85,510
Cancellation of Units (26,582) (46,082)
Net revenue received from issue of Units (170) 284
3,402 39,712
Decrease in cash and cash equivalent (10,953) (15,449)
Opening balance 34,971 50,420
Closing balance 24,018 34,971

The notes on pages 40 to 52 and distribution table on page 53 form part of these financial statements.

39 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2020

1. Accounting policies

(a) Basis of preparation

The financial statements have been prepared on a going concern basis, in compliance with FRS 102 and in accordance with the the Statement of Recommended Practice for UK Authorised Funds (SORP) issued by the Investment Association in May 2014 (and amended in June 2017) and the Scheme of Charity Commission made under the Charities Act 1993 (amended Charities Act 2011), dated 12 July 2002, as modified by a scheme dated 13 May 2009 and a scheme effective on 21 July 2014, as amended by resolutions of the trustees of the Fund passed under Section 280 of the Charities Act 2011 on 21 July 2014, 22 July 2014 and 29 July 2014 and by an Order dated 9 October 2014 and an Order dated 19 October 2016.

The financial statements have been prepared under the historical cost basis, as modified by revaluation of investment porperty.

(b) Revenue recognition

Rental revenue, interest on bank deposits and the COIF Charities Deposit Fund balances are accrued on a daily basis. In accordance with FRS 102, the rent free period is recognised over the entire term of the lease.

(c) Expenses

During the year the annual management charge (AMC) paid to the Manager, was taken to the capital of the Fund. The fee is based on a fixed percentage of the value of the Fund, which is currently 0.65% p.a. plus VAT. Each month, the value at the end of the previous month is taken to calculate the fee due. This fee covers the provision of investment services and other expenses incurred by the Manager. The Fund receives an annual management charge rebate credited to the revenue of the Fund for its deposits in the COIF Charities Deposit Fund, where management fees are charged to revenue. The Trustee fee, audit, legal, insurance, property valuation fees and direct property fees are charged separately to the revenue of the Fund before distribution.

(d) Distributions

Distributions are paid quarterly. The Fund utilises an income reserve to even out the fluctuations in revenue which arise over the years (see note 11).

Annual Report and Financial Statements

31 December 2020

40

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2020

1. Accounting policies (continued)

All costs associated with buying, selling and development of properties are charged to capital. Other expenses, including the property valuation fees payable to Knight Frank LLP are deducted from revenue.

(f) Basis of valuation

Freehold and leasehold properties are valued at each monthly dealing date and at quarter end dates on the basis of Fair Value in accordance with the current RICS Appraisal and Valuation Standards (The Red Book) as advised by Knight Frank LLP, Chartered Surveyors. In addition, the Manager reviews these values at each intervening month end and makes adjustments where necessary. Additions to the portfolio are valued externally after acquisition. Please refer to note 21 for more details.

(g) Unit pricing policy

The Fund follows AREF’s fund pricing recommendations and is priced at the Standard NAV. Any adjustments around the Mid Price (Bid/Offer) would follow AREF’s fund pricing recommendations as required.

(h) Cash equivalents

The Manager has treated some assets as Cash equivalents for the purposes of the Balance Sheet disclosure. Investments are regarded as Cash equivalents if they meet all of the following criteria:

41 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2020

2. Net capital losses

Net capital losses
Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000
The net capital gains during the year comprise:
Unrealised lossess on investment properties* (36,086) (18,899)
Realisedgains on investmentproperties* 2,958 3,902
Losses on investment properties (33,128) (14,997)

3. Revenue

Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000
Rental revenue 35,829 35,386
Service charge income 6,272 3,050
Other revenue 654 897
Interest on the COIF Charities Deposit Fund 125 318
Bank interest 10 49
42,890 39,700
Expenses
Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000
i) Property expenses:
Service charge expenses 6,951 4398
Other property outgoings 3,115 876
Property legal and professional fees 968 945
Property ground rent and empty rates 608 1,331
Propertyrepairs and maintenance 42 99
11,684 7,649

4. Expenses

42 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2020

4. Expenses (continued)

Expenses(continued)
Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000
ii) Management expenses:
Manager’s annual management charge – see note 1(c) 3,998 4,087
Property valuation fees 147 144
Legal fees 46 35
Investment Property Database fee 40 52
Trustee fee 36 36
Miscellaneous expenses 25 172
Audit fee 20 19
Insurance fee 7 6
Bank charges 2 2
Manager’s annual management charge rebate – see note 1(c) (59) (64)
4,262 4,489
Total expenses 15,946 12,138

The above expenses include irrecoverable VAT where applicable.

5. Taxation

The Fund has charitable status and is not liable to UK tax on gains arising on disposal of investments or on income from investments. Distributions are paid and reinvested revenue credited gross to Unitholders on the basis that all appropriate UK taxation has been both reclaimed and recovered.

Annual Report and Financial Statements

31 December 2020

43

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2020

6. Finance Costs: interest and distributions Distributions

Distributions take account of revenue received on the issue of Units and revenue deducted on the cancellation of Units, and comprise:

Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000
31 March – interim distribution 8,474 8,061
30 June – interim distribution 6,591 8,455
30 September – interim distribution 6,509 8,874
31 December – final distribution 6,731 8,905
28,305 34,295
Add: revenue deducted on cancellation of Units 313 370
Deduct: revenue received on issue of Units (143) (654)
Net distribution for the year 28,475 34,011
Net revenue for the year 26,911 27,553
Transfer (to)/from the income reserve – see note 11 (2,434) 2,371
Manager’speriodic chargepaid bycapital 3,998 4,087
Net distribution for the year 28,475 34,011
Interest for theyear 33 9
Total finance costs 28,508 34,020

Details of the distribution per Unit are set out in the distribution table on page 58.

Annual Report and Financial Statements

31 December 2020

44

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2020

7.
8.
9.		 Investment property
Year ended
Year ended
31.12.2020
31.12.2019
£’000
£’000
Market value at the start of the year
586,646
553,220
Acquisitions at cost
16,188
84,053
Capitalised expenses
4,577
2,397
Disposals at cost
(8,047)
(34,125)
Unrealised losses on revaluation
(36,085)
(18,899)
Market value at the end of the year
563,279
586,646
Historical cost at the end of the year
558,141
545,423
Debtors
Year ended
Year ended
31.12.2020
31.12.2019
£’000
£’000
Property incentives
6,601
5,692
Rents receivable
4,950
3,056
Prepayments
1,260
470
Other debtors
237
237
Property payments recoverable
212
62
13,260
9,517
Cash and bank balances and Cash equivalents
Year ended
Year ended
31.12.2020
31.12.2019
£’000
£’000
Cash in the COIF Charities Deposit Fund
17,288
26,162
Cash at bank
6,730
8,809
Total cash
24,018
34,971

45 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2020

10. Creditors

Creditors
Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000
Rent received in advance 4,900 5,356
Accrued expenses 3,454 674
VATpayable 987 594
9,341 6,624

11. Income reserve

The income reserve, accumulated out of revenue, is used to smooth fluctuations in the revenue received in the Fund. The income reserve is included in the total capital value of the Fund attributable to Unitholders

Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000
Income reserve at the start of the year 2,335 4,420
Transfer to/(from) the income reserve 2,434 (2,371)
Equalisation of the income reserve (63) 286
Income reserve at the end of the year 4,706 2,335

12. Financial instruments

The main risks arising from the Fund’s financial instruments and Manager’s policies for managing these risks are summarised below. These policies have been applied throughout the year and the comparative year.

Market price risk

Whilst the value of direct property is independently valued on a monthly basis, such valuations are a matter of the valuer’s opinion and such values may or may not be achieved on disposal. The Fund seeks to minimise the impact of these risks by maintaining a well diversified property portfolio, both geographically and by sector.

Annual Report and Financial Statements

31 December 2020

46

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2020

12. Financial instruments (continued)

Market price risk (continued)

Following the collapse of economic and property market activity as a result of the ongoing COVID19 health crisis and the UK Government containment policies, from the end of March 2020 Until September 2020 property valuers have provided their valuations with a material valuation uncertainty clause. In order to protect the interests of investors, we have suspended dealing in the fund from 24 March 2020 until 24 September 2020. This action reflected the exceptional circumstances in the UK property market and the need to protect investor interests when there was material uncertainty regarding how the assets should be valued. We lifted the suspension as soon as confidence returned to the market and there was more certainty regarding asset valuations.

At 31 December 2020, if the price of investment property held by the Fund increased or decreased by 5%, with all other variables remaining constant, then net assets attributable to Unitholders would increase or decrease by approximately £28.16m (2019: £29.33m).

Financial assets

All cash and bank balances earn interest at a floating rate based on either LIBOR or base rate. Debtors and creditors of the Fund do not pay or receive interest.

Financial liabilities

Under the Scheme of the Fund, the Manager may borrow a maximum of 25% of the value of the property of the Fund to assist with investing in, improvements to, or the managing of property and the short-term financing of, or meeting payments to be made out of the Fund.

Liquidity risk

By their very nature, direct properties are less liquid and therefore the investments may not be readily realisable. The Fund’s liquidity may be affected by unexpected or high levels of redemptions. The Units are realisable only on each monthly dealing day but redemptions are subject to a 90 day period of notice, which may be increased to up to six months in accordance with the provisions in the Scheme Particulars.

In certain circumstances, the rights for Unitholders to redeem Units may be suspended.

Unitholders should note that where a suspension is implemented, they may not be able to redeem their Units as quickly as they would like to, and that this may have an impact on the price they receive on redemption and may consequently impact the Unitholder’s own liquidity.

47 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2020

12. Financial instruments (continued)

Currency risk

There is no exposure to foreign currency fluctuations as all investments, revenue and short term debtors and creditors are denominated in sterling.

Interest rate risk

The majority of the Fund’s assets are direct property investments and therefore do not pay interest or have maturity dates. As a consequence any changes in interest rates will not significantly affect the Fund, except in so far as they affect rental levels generally.

The total exposure at 31 December 2020 was:

Financial assets
Floating rate Fixed rate not carrying
financial assets* financial assets interest Total
Currency
£’000		 £’000 £’000 £’000
Sterling
24,018		 – 576,539 600,557
Financial
Floating rate Fixed rate liabilities
financial financial not carrying
liabilities* liabilities interest Total
Currency
£’000		 £’000 £’000 £’000
Sterling
–		 – 16,072 16,072
The total exposure at 31 December 2019 was:
Financial assets
Floating rate Fixed rate not carrying
financial assets* financial assets interest Total
Currency
£’000		 £’000 £’000 £’000
Sterling
34,971		 – 596,163 631,134
Financial
Floating rate Fixed rate liabilities
financial financial not carrying
liabilities* liabilities interest Total
Currency
£’000		 £’000 £’000 £’000
Sterling
–		 – 15,529 15,529

48 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2020

12. Financial instruments (continued)

Currency risk (continued)

All financial liabilities are due to be settled within one year or on demand. There were no derivatives held by the Fund during the year or prior year.

13. Commitments and contingent liabilities

There were no commitments or contingent liabilities as at 31 December 2020 (31.12.2019 £nil).

14. Board remuneration

The Board members receive no remuneration from the COIF Charity Funds. Mr G Newson was a Director of the Manager’s parent company, CCLA Investment Management Limited (CCLA IM) throught the year. Mr Newson received remuneration from CCLA IM, which is disclosed in CCLA IM’s financial statements.

15. Related party transactions

The Manager’s periodic charge is paid to the Manager and the Trustee fee is paid to HSBC Bank plc, both related parties to the Fund. The amounts paid in respect of these charges are disclosed in note 4.

At 31 December 2020 the balance due to HSBC Bank plc was as set out below:

31.12.2020 31.12.2019
£’000 £’000
Custody and transaction fees 9 3

At 31 December 2020, a cash balance of £17,287,765 (31.12.2019, £26,161,876) was held in the COIF Charities Deposit Fund. During the year the Fund received rebates of management fees for its deposits in the COIF Charities Deposit Fund where the management fees were charged to revenue as disclosed in note 4.

The COIF Charities Investment Fund has a holding of 105,745,333 Units – 19.79% (2019: 105,559,890 – 19.80%), the COIF Charities Ethical Investment Fund has a holding of 39,091,751 Units – 7.32% (2019: 39,091,751 – 7.33%) and The CBF Church of England Property Fund has a holding of 158,730,980 Units – 29.95% (2019: 159,711,353 – 29.95%).

The CBF Church of England Property Fund is also managed by CCLA IM.

49 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2020

16. Turnover of Units

The number and net asset value of Units in the Fund issued, cancelled and transferred in the year ended 31 December 2020 and 31 December 2019 are as follows:

Number Value
31 December 2020 of Units £’000 % of NAV
Units issued 25,617,000 30,154 5.16%
Units cancelled 24,610,351 26,582 4.55%
Number Value
31 December 2019 of Units £’000 % of NAV
Units issued 71,044,401 85,510 13.89%
Units cancelled 39,829,017 46,082 7.49%

At 31 December 2020 there were no redemption notices outstanding (31 December 2019, nil).

17. Reconciliation of net cash inflow from operating activities

Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000
Net revenue for the year 26,911 27,553
Increase in creditors 2,716 1,218
Increase in accrued revenue (1,894) (638)
Increase in debtors (1,849) (1,097)
Net cash inflow from operating activities 25,884 27,036

18. Reconciliation of net cash flow to movement in cash balances

Year ended Year ended
31.12.2020 31.12.2019
£’000 £’000
Net cash at beginning of the year 34,971 50,420
Movement in cash duringtheyear (10,953) (15,449)
Net cash at the end of the year 24,018 34,971

50 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 December 2020

19 Unitholders’ funds – reconciliation of Units

Unitholders’ funds – reconciliation of Units
Year ended Year ended
31.12.20 31.12.19
Opening number of Units at beginning of year 533,227,472 502,012,088
Units issued in year 25,617,000 71,044,401
Units cancelled inyear (24,610,351) (39,829,017)
Closing number of Units at end of year 534,234,121 533,227,472

20. Fair value of financial assets and financial liabilities

In respect of financial assets and liabilities other than investments, there is no material difference between their value, as shown on the balance sheet, and fair value.

Investment property is held at fair value. The fair value of all investments are derived from valuation techniques using non-observable data.

The Fund’s freehold and leasehold investment properties were independently valued by Knight Frank LLP, Chartered Surveyors, acting in the capacity of external valuers. As described in note 1(f), the valuation was to fair value in accordance with the Professional Standards of The Royal Institution of Chartered Surveyors (the ‘Red Book’). Knight Frank LLP’s opinions were primarily derived from comparable recent market transactions on arm’s length terms. The Manager discusses these valuations with Knight Frank LLP at least once every quarter to assess them.

The fair value of investment property has been determined using the following hierarchy:

Level 1 The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date.

51 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 31 December 2020

20. Fair value of financial assets and financial liabilities (continued)

For the year ended 31 December 2020:

Level 1 Level 2 Level 3 Total
Category £’000 £’000 £’000 £’000
Investmentproperty – – 563,279 563,279
– – 563,279 563,279

For the year ended 31 December 2019:

Level 1 Level 2 Level 3 Total
Category £’000 £’000 £’000 £’000
Investmentproperty – – 586,647 586,647
– – 586,647 586,647

52 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

DISTRIBUTION TABLE

for the year ended 31 December 2020

Dividends paid/payable Dividends paid/payable
Period ended Date paid/payable pence per Unit
2020 2019
Income Units
31 March 29 May 1.53 1.53
30 June 30 August 1.19 1.57
30 September 30 November 1.22 1.63
31 December 26 February 1.26 1.67
5.20 6.40

The distributions for Units were paid in the same year, apart from the distributions declared on 31 December which is payable on 26 February in the subsequent year.

Annual Report and Financial Statements

31 December 2020

53

COIF CHARITIES PROPERTY FUND

STATEMENT OF BOARD, TRUSTEE AND MANAGER RESPONSIBILITIES for the year ended 31 December 2020

Responsibilities of the Board

The Board shall comply with the duty of care when exercising its powers and discharging its duties under the Scheme, as follows:

Under the Alternative Investment Fund Managers Directive (“AIFMD”), the Board has certain additional responsibilities including:

54 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

STATEMENT OF BOARD, TRUSTEE AND MANAGER RESPONSIBILITIES for the year ended 31 December 2020

Responsibilities of the Trustee

The Trustee shall be responsible for those aspects of the administration and management of the Fund and its property which are specified in the Scheme. The Trustee shall comply with the duty of care when exercising its powers and discharging its duties. The following are the duties and powers of the Trustee:

The Trustee shall take all steps and execute all documents as are necessary to ensure that instructions given to it by the Manager are carried out as to the exercise of rights (including voting rights) attaching to the ownership of property of the Fund and that the purchases and sales of investments for or of the Fund are properly completed.

The Trustee shall maintain such records as are necessary to enable it to comply with the Scheme and with section 130 of the Charities Act 2011 and to demonstrate that such compliance has been achieved.

Annual Report and Financial Statements

31 December 2020

55

COIF CHARITIES PROPERTY FUND

STATEMENT OF BOARD, TRUSTEE AND MANAGER RESPONSIBILITIES for the year ended 31 December 2020

Responsibilities of the Manager

The Manager shall be responsible for those aspects of the administration and management of the Fund and its property which are specified in the Scheme. The Manager shall comply with the duty of care when exercising its powers and discharging its duties under the Scheme. The following are the duties and powers of the Manager:

The Manager of the Fund is required by the Scheme to:

The Manager is required to:

56 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

STATEMENT OF BOARD, TRUSTEE AND MANAGER RESPONSIBILITIES for the year ended 31 December 2020

The Trustee has appointed the Investment Manager to act as Registrar to the Fund.

Under AIFMD, the Manager has certain additional responsibilities including, ensuring compliance with the applicable provisions of AIFMD and that any delegation by the Manager is in accordance with AIFMD.

Should the Manager wish to retire, the Manager can only be discharged from its duties under the Scheme following the appointment of a replacement manager who is eligible under AIFMD to act as manager of the Fund.

Annual Report and Financial Statements

31 December 2020

57

COIF CHARITIES PROPERTY FUND

STATEMENT OF DEPOSITARY RESPONSIBILITIES AND REPORT OF THE DEPOSITARY for the year ended 31 December 2020

Responsibilities of the Depositary

The Depositary must ensure that the Fund is managed in accordance with the Financial Conduct Authority’s Investment Funds Sourcebook (“the Sourcebook”), the Alternative Investment Fund Managers Directive (“AIFMD”) (together “the Regulations”) and the Fund’s Scheme Particulars.

The Depositary must in the context of its role act honestly, fairly, professionally, independently and in the interests of the Fund and its investors.

The Depositary is responsible for the safekeeping of the assets of the Fund in accordance with the Regulations.

The Depositary must ensure that:

The Depositary also has a duty to take reasonable care to ensure that the Fund is managed in accordance with the Scheme Particulars in relation to the investment and borrowing powers applicable to the Fund.

Report of the Depositary

Having carried out such procedures as we consider necessary to discharge our

responsibilities as Depositary of the Fund, it is our opinion, based on the information available to us and the explanations provided, that in all material respects the Fund, acting through the AIFM has been managed in accordance with the rules in the Sourcebook, the Scheme Particulars of the Company and as required by the AIFMD.

HSBC Bank plc Trustee and Depositary Services 8 Canada Square London E14 5HQ

HSBC Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority 19 July 2021

58 Annual Report and Financial Statements

31 December 2020

COIF CHARITIES PROPERTY FUND

AIFMD DISCLOSURES (UNAUDITED)

Manager remuneration

The Manager has no employees, but carries out its services through employees of its parent company, CCLA Investment Management Limited.

Recharges for these services are levied in respect of CCLA Investment Management Limited’s year ending on 31 March each year. The recharge for the year to 31 March 2020 was £28,700,000. A recharge of £24,000,000 was levied in the year to 31 March 2019.

The average number of full time equivalent staff of CCLA Investment Management Limited, including temporary staff, for the year ended 31 March 2020 was 137 (year ended 31 March 2019: 124).

During the year ended 31 March 2020 and the prior year , remuneration was paid to CCLA Investment Management Limited staff as shown below. Totals for staff whose actions have material impact on the risk profile of the Fund (“identified staff”) are shown separately.

Year to 31 December 2020
Fixed Variable
remuneration remuneration Total
£’000 £’000 £’000
Identified staff 1,355 1,870 3,225
Other staff 11,605 4,422 16,027
Total 12,960 6,292 19,252
Year to 31 December 2019
Fixed Variable
remuneration remuneration Total
£’000 £’000 £’000
Identified staff 1,212 3,394 4,606
Other staff 9,824 3,412 13,236
Total 11,036 6,806 17,842

Remuneration above is the total remuneration for CCLA Investment Management Limited: it is not possible to separate the element of that relating only to the Fund. The components of remuneration are appropriately balanced and do not create a conflict of interest for the Fund.

Annual Report and Financial Statements

31 December 2020

59

COIF CHARITIES PROPERTY FUND

(Charity Registration No. 1093084)

DIRECTORY

Board

N Morecroft, ASIP (Chairman) K Corrigan, FCCA J Hobart, MA G Newson, MRICS S Niven, CFA C Ong, MBA A Watson, CBE

Secretary

J Fox

Manager/Alternative Investment Fund Manager (AIFM)

CCLA Fund Managers Limited Authorised and regulated by the Financial Conduct Authority Senator House, 85 Queen Victoria Street London EC4V 4ET Telephone: 0207 489 6000 Client Service: Freephone: 0800 022 3505 Email: clientservices@ccla.co.uk www.ccla.co.uk

Investment Manager, Administrator and Registrar

CCLA Investment Management Limited Authorised and regulated by the Financial Conduct Authority Senator House, 85 Queen Victoria Street London EC4V 4ET Telephone: 0207 489 6000 Client Service: Freephone: 0800 022 3505 Email: clientservices@ccla.co.uk www.ccla.co.uk

Executive Directors of the Manager

P Hugh Smith (Chief Executive Officer) J Bevan (Chief Investment Officer) E Sheldon (Chief Operating Officer) A Robinson, MBE (Director Market Development)

Non-Executive Directors of the Manager

R Horlick (Chair) J Jesty – appointed 24 April 2020 C Johnson G Newson A Roughead – appointed 24 April 2020 J Tattersall – retired 8 July 2020

Fund Manager P Hannam

Head of Risk R Plumridge – resigned 31 January 2020 JP Lim – appointed 1 May 2020

Head of Ethical and Responsible Investment J Corah

Head of Risk R Plumridge – resigned 31 January 2020 JP Lim – appointed 1 May 2020

Third Party Advisors External Property Valuer Knight Frank 55 Baker Street London W1U 8AN

Managing Agent BNP Paribas Real Estate 5 Aldermanbury Square London EC2V 7BP

Custodian, Trustee and Depositary HSBC Bank plc 8 Canada Square Canary Wharf London E14 5HQ

Banker

HSBC Bank plc 60 Queen Victoria Street London EC4N 4TR

Solicitors

Farrer & Co LLP 66 Lincoln’s Inn Fields London WC2A 3LH

Hogan Lovells International LLP Atlantic House, Holborn Viaduct London EC1A 2FG

DLA Piper Scotland LLP Collins House Rutland Square Edinburgh EH1 2AA

Independent Auditor PricewaterhouseCoopers LLP 7 More London Riverside London SE1 2RT

Company Secretary J Fox

60 Annual Report and Financial Statements

31 December 2020

ABOUT CCLA

Founded in 1958, CCLA is one of the UK’s largest charity fund managers. Managing investments for charities, religious organisations

and the public sector is all that we do.

Our purpose is to help our clients maximise their impact on society by harnessing the power of investment markets. This requires us to provide a supportive and stable environment for our staff and deliver trusted, responsibly managed and strongly performing products and services to all organisations, irrespective of their size.

CCLA Fund Managers Limited

Senator House, 85 Queen Victoria Street, London EC4V 4ET T: 0800 022 3505 E: clientservices@ccla.co.uk

www.ccla.co.uk

Both companies are authorised and regulated by the Financial Conduct Authority.Registered address: Senator House, 85 Queen Victoria Street, London EC4V 4ET.

CCLA is the trading name for CCLA Investment Management Limited (Registered in England No. 2183088) and CCLA Fund Managers Limited (Registered in England No. 8735639)

Printed on 100% post consumer waste and is certified by the Forest Stewardship Council (FSC).