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==Appendix== === Absolute valuation approach === ==== DCF ==== Stockhub estimates that the expected return of an investment in the company over the next five years is negative xxx%. In other words, an £1,000 investment in the company is expected to return £xxx in five years time. The assumptions used to estimate the return figure can be found in the table below. {| class="wikitable" |+ !Description !Value !Commentary |- |Which valuation model do you want to use? |Discounted cash flow |Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more/most accurate is the absolute valuation approach, so that's the approach that we suggest using to determine the estimated value of the company. |- |Which type of discounted cash flow model do you want to use? |Dividend discount model |Given Sirius' UK REIT status, the company must pay at least 90% of its UK tax-exempt profits (being rental income after deducting finance costs, overheads and tax depreciation) to shareholders as dividends. Also as a German REIT (or G-REITs, for short), the company is required to distribute at least 90% of all income (i.e. rental income and non rental income, such as the income from the sale of properties). Furthermore, the company has stated that one of its policies is to pay out 65% or more of funds from operations (FFO) as dividends. Accordingly, we suggest using the dividend discount model (DDM), which is one of the most common discounted cash flow models. |- |How many distinct stage of growth do you want to use? |One stage |For simplicity, we have used one stage here. |- |What is the expected lifespan of the business? |Perpetual |Again, for simplicity, we have assumed that the business continues forever. |- |What is the expected constant growth rate in dividends? |8% |Research shows that there's a correlation between GDP growth and the dividend growth of Real Estate Investment Trusts (REITs), such as Sirius. We note that the gross domestic product (GDP) growth rate in the last 20 years (2001 to 2022) is around 3% per year for the global economy, and around 2.25% for the United Kingdom and 1.95% for Germany. Given that Sirius is leveraged and the size of the leverage, we expect the dividend growth of the business to be much more than the GDP growth of the two countries in which the company operates (i.e. the United Kingdom and Germany). |- |Which financial forecasts to use? |Proactive Investors |Here, we have used our own forecast. To calculate the company's two year ahead dividend forecast figure (i.e. the relevant forecast figure for our model), we multiplied the current dividend figure (i.e. historic forecasts) by our estimated constant free cash flow growth rate. |- |What is the required return on equity? |12.24% |For estimating the required return on equity, we used the Capital Asset Pricing Model (CAPM), which provides an economically grounded and relatively objective procedure for required return estimation, and, therefore, it has been widely used in valuation. The calculation of the required return on equity (and the reasons behind the calculation) can be found in the table below. |- |What is the euros to pounds foreign exchange conversion rate? |0.89 |For simplicity, we have used the rate as of today (1:0.89). |- |What's the current value of the company? |88.10 pence per share |As at 16th February 2023, the current value of Sirius is 88.10p per share. |- |Which time period do you want to use to estimate the expected return? |Between now and five years time |Research suggests that following a market crash, the average amount of time it takes for the price of a stock market to return to its pre-crash level (i.e. the recovery period) is at least three years. Accordingly, we suggest that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. |} ==== Sensitivity analysis ==== The main inputs that result in the greatest change in the expected return of the Sirius Real Estate Limited investment are, in order of importance (from highest to lowest): #The size of the total addressable market (the default size is $xxx trillion); #Sirius Real Estate Limited peak market share (the default share is xxx%); and #The discount rate (the default time-weighted average rate is xxx%). The impact of a 10% change in those main inputs to the expected return of the Sirius Real Estate Limited investment is shown in the table below. {| class="wikitable sortable" |+Sirius investment expected return sensitive analysis !Main input !10% worse !Unchanged !10% better |- |The size of the total addressable market | | | |- |Sirius Real Estate Limited peak market share | | | |- |The discount rate | | | |} ==== Other ==== A key, and common, way to value real estate is by dividing the estate's net operating income<ref>Net operating income is the rental and other income from investment properties generated by a property less directly attributable costs.</ref> by the estate's capitalization rate (or cap rate, for short)<ref>Capitalization rate is a financial metric used to estimate the potential return on a real estate investment. It is expressed as a percentage and is calculated by dividing the net operating income (NOI) of a property by its market value or purchase price. The formula for cap rate is: Cap Rate = Net Operating Income / Property Value For example, if a property generates $100,000 in NOI and is valued at $1 million, the cap rate would be 10% ($100,000 / $1,000,000). Cap rate is a useful tool for comparing different real estate investment opportunities and evaluating their potential returns. Generally, the higher the cap rate, the better the potential return on investment. However, it's important to consider other factors such as market conditions, location, and the condition of the property before making an investment decision.</ref>. The average cap rate for commercial properties can vary widely depending on the location, property type, and market conditions. In the United Kingdom and Germany, the average cap rate for commercial properties is typically in the range of 5-7%, according to ChatGPT. In the United Kingdom, the average cap rate for commercial properties in prime locations, such as central London, is typically lower, in the range of 3-5%, due to the high demand for real estate in these areas. In secondary markets, the average cap rate may be higher, in the range of 7-9%. In Germany, the average cap rate for commercial properties, with prime locations such as central Berlin or Munich having lower cap rates, in the range of 4-6%. In other regions, the average cap rate may be higher, in the range of 6-8%. We note that the current cap rate of Sirius is 6.8%, which is on the high-end of the for commercial properties in the United Kingdom and Germany (5-7%). In the company's most recent full-year results (i.e. the 12-month period ended 31st March 2022), net operating income (NOI) is €122.5 million. In the company's most half-year results (i.e. the 6-month period ended 30th September 2022), net operating income is €73.2 million, which, based on the most recent cap rate (i.e. 6.8%) and portfolio value (i.e. €2,032 million), equates to an annual income of €137.9 million. We note that a €5 million improvement in NOI (from €137.9 million to €142.9 million) equates to a €74 million improvement in the valuation of the portfolio, all other things being equal. Similarly, a half a percentage point reduction in the cap rate (from 6.8% to 6.3%) equates to a €162 million improvement in the valuation of the portfolio, again, ceteris paribus. We anticipate that any improvements (in the valuation of the portfolio) will translate to an almost identical increase in the valuation of the company. So, for example, if the improvement in the property valuation is €74 million, then the company valuation will also increase by €74 million. {| class="wikitable" |+Net yield against net operating income ! !5.50% !6.00% !6.50% !7.00% !7.50% !8.00% |- |'''125.0''' |2,273 |2,083 |1,923 |1,786 |1,667 |1,563 |- |'''130.0''' |2,364 |2,167 |2,000 |1,857 |1,733 |1,625 |- |'''135.0''' |2,455 |2,250 |'''2,077''' |'''1,929''' |1,800 |1,688 |- |'''140.0''' |2,545 |2,333 |'''2,154''' |'''2,000''' |1,867 |1,750 |- |'''145.0''' |2,636 |2,417 |2,231 |2,071 |1,933 |1,813 |- |'''150.0''' |2,727 |2,500 |2,308 |2,143 |2,000 |1,875 |} === Relative valuation approach === As noted earlier in this report, research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach, so that's the approach that Stockhub suggests using to determine the estimated value of the company (the valuation based on the discounted cash flow approach can be found in the valuation section of this report); nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the relative valuation approach. ====What's the expected return of an investment in Sirius using the relative valuation approach?==== Accordingly, Stockhub estimates that the expected return of an investment in Sirius Real Estate Limited over the next five years is xxx. In other words, an £1,000 investment in the company is expected to return £xxx in five years time. The assumptions used to estimate the return figure can be found in the table below. ====What are the assumptions used to estimate the return figure?==== {| class="wikitable" |+Key inputs !Description !Value !Commentary |- |Which type of multiple do you want to use? |P/AFFO |The value of real estate typically appreciates, rather than depreciates; furthermore, REIT property sales and capital expenditure tends to result in material differences in the profitable of the REIT across its lifespan. Accordingly, Stockhub suggests valuing the company using the Price to Adjusted Funds From Operations (P/AFFO) ratio, which is calculated by adding amortization and depreciation to the net income and then deducting the gains on the sale of properties and capital expenditure. |- |Which financial forecasts to use? |Stockhub |The only available medium-term forecasts (i.e. five years from now) are the ones that are supplied by the Stockhub company (the forecasts can be found in the financials section of this report), so Stockhub suggests using those. |- |In regards to the P/AFFO multiple, for the AFFO figure, which year to you want to use? |Year 5 |Stockhub suggests that to account for general market cyclicity, it's best to use five years from now (i.e. Year 5). |- |In regards to the P/AFFO multiple, what multiple figure do you want to use? |15x |In Stockhub's view, Sirius Real Estate Limited closest peer is xxx. xxx trades on a multiple of xxx. |- |Which financial forecasts to use? |Stockhub |The only available forecasts are the ones that are supplied by the Stockhub company (the forecasts can be found in the financials section of this report), so Stockhub suggests using those. |- |What's the current value of the Stockhub company? |£981.20 million |As at 22nd November 2022, the current value of its company at £981.20 million. |- |Which time period do you want to use to estimate the expected return? |Between now and five years time |Research suggests that following a market crash, the average amount of time it takes for the price of a stock market to return to its pre-crash level (i.e. the recovery period) is at least three years.<ref name=":1">https://www.newyorkfed.org/mediabrary/media/medialibrary/media/research/staff_reports/research_papers/9809.pdf</ref> Accordingly, Stockhub suggests that to account for general market cyclicity, it's best to estimate the expected return of the company between now and five years time. |} === Sensitive analysis === The two main inputs that result in the greatest change in the expected return of the Sirius Real Estate Limited investment are, in order of importance (from highest to lowest): #The P/AFFO multiple (the default multiple is 15x); and #The Year-five AFFO forecast (the default forecast is $xxx million); and The impact of a 10% change in those main inputs to the expected return of the Sirius Real Estate Limited investment is shown in the table below. {| class="wikitable sortable" |+Sirius investment expected return sensitive analysis !Main input !10% worse !Unchanged !10% better |- |The P/AFFO multiple | | | |- |The Year-five AFFO forecast | | | |} === WACC and Cost of Equity === As at 30th September, the company's cost of debt is 1.3% (and average debt maturity is 3.8 years). With total debt of €992.86 million and total equity of €1,213.57 million, the company's debt-to-equity ratio is 81.8%. In other words, 55% of the company's finance comes from equity financing and 45% from debt financing. Accordingly, the company's weighted average cost of capital (WACC) is 7.31%. We note that when the company's new debt finance agreement comes into place on 1st November 2023, the company's cost of debt will increase to 1.9% (from 1.3%) and average debt maturity will increase to 5.0 years (from 3.8 years). Consequently, the cost of capital will increase by 28 basis points to 7.59% (from 7.31%). The company's debt has been rated by Fitch Ratings, one of the three nationally recognized statistical rating organizations (NRSRO) in the United States, as 'BBB', which is considered as investment grade. {| class="wikitable" |+Cost of equity (%) !Input !Input value !Additional information |- |Risk-free rate (%) |3.779 |Here, the risk free rate is the US 30 year treasury bond, and is calculated as at GMT 12:25 on 10th February 2023. Research suggests that for the risk-free rate, it's best to use one that has the same or similar maturity to the estimated remaining lifespan of the company. Here, we have assumed that the estimated lifespan of the company is 50 years, so we have used the longest maturity, which is 30 years. |- |Beta |1.06 |Here, to estimate the adjusted beta, we used the iShares MSCI World ETF to represent the market portfolio; and in terms of the time period and frequency of observations, we used five years of monthly data (i.e. 60 observations in total), which is supported by a study and is the most common choice. The beta value in a future period has been found to be on average closer to the mean value of 1.0, and because valuation is forward-looking, it is logical to adjust the raw beta so it more/most accurately predicts a future beta. |- |Equity risk premium (%) |7.98 |Research suggests that for the region of equity risk premium, it's best to use one that is the same or similar to the region of the beta market portfolio. Here, the region of the beta market portfolio is the world/global, so we have used the world/global region for the equity risk premium, and is calculated as at 5th January 2023. |- |Cost of equity (%) |12.24 |Cost of equity = Risk-free rate + Beta x Equity risk premium. |} {| class="wikitable" |+Weighted average cost of capital calculation !Type of capital !Cost (%) !Proportion !Weight |- |Equity |12.24% |55.00% |0.58% |- |Debt |1.30% |45.00% |6.73% |- |Total |N/A |100.00% |7.31% |} {| class="wikitable" |+Adjusted Funds From Operations calculation !Item !2021 !2022 !2023E !2024E !2025E !2026E !2027E |- |Funds From Operations (€'million) |60.9 |74.6 |97.0 |102.0 |108.8 | | |- |Capital expenditure (€'million) |31.1 |23.8 |24.0 |24.0 |24.0 | | |- |Adjusted Funds From Operations (€'million) |29.8 |50.8 |76.0 | | | | |} ===Sirius Real Estate Limited peer(s)=== {| class="wikitable sortable" |+Valuation table |- !Investments !Primary exchange !Classification!!Industry !Market capitalisation (£) !P/FFO!!P/AFFO !Yield (%) |- |Sirius Real Estate Limited |United Kingdom |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£996 million |11.6x | |4.39% |- |FastPartner AB |Sweden |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£1,150 million | | |2.99% |- |Cibus Nordic Real Estate |Sweden |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£577 million | | |6.84% |- |Intershop Holding AG |Switzerland |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£1,020 million | | |4.08% |- |Metrovacesa SA |Spain |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£928 million |26.9x | |14.02% |- |WCM Beteiligungs- und G |Germany |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£493 million | | |2.89% |- |Brack Capital Properties |Italy |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£658 million | | | |- |TLG Immobilien AG |Germany |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£1,830 million | | |5.00% |- |GAG Immobilien AG |Germany |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£1,130 million | | |0.63% |- |Gateway Real Estate AG |Germany |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£535 million | | | |- |VGP |Belgium |Multi Asset Class Own & Develop |Real Estate Owners & Developers |£1,350 million | | |9.08% |} {| class="wikitable" |+Sirius Real Estate Limited peers !Peer !Three-year average COGS margin (%) !Three-year average SG&A margin (%) !Three-year average tax margin (%) !Three-year average depreciation rate (%) !Three-year average fixed capital margin (%) !Three-year average change in working capital ($000) !Three-year average growth stage !Discount rate (WACC, %) |- |FastPartner AB | | |20.56% |20% | | |Stage two |5.38% |- |Cibus Nordic Real Estate | | |13.47% |1% | | |Stage two |5.01% |- |Intershop Holding AG | | |22.99% |14% | | |Stage two/three |3.79% |- |Metrovacesa SA | | |22.19% |NA | | |Stage two/three |8.72% |- |WCM Beteiligungs- und G | | |32.64% |20% | | |Stage two/three |5.66% |- |Brack Capital Properties | | |25.13% |11% | | |Stage two/three |2.15% |- |TLG Immobilien AG | | |24.44% |202% | | | |5.84% |- |GAG Immobilien AG | | |16.91% |73.74% | | | |4.89% |- |VGP | | |14.90% | | | |Stage one |7.43% |- |Gateway Real Estate AG | | |22.03% | | | |Stage two/three |3.61% |- |Sirius Real Estate Limited |43% |15% |1% |11% |20% | |Stage two/three |4.39% |} {| class="wikitable" |+Growth stage !Growth stage !Three-year average COGS margin (%) !Three-year average SG&A margin (%) !Three-year average tax margin (%) !Three-year average depreciation rate (%) !Three-year average fixed capital margin (%) !Three-year average change in working capital ($000) !Discount rate |- |One | | | | | | | |- |Two | | | | | | | |- |Three | | | | | | | |- |Four | | | | | | | |} === Dividend === Since the company started issuing dividends (i.e. around seven years ago), the median dividend growth rate is 8%, and the mean is 46%. The constant/fixed rate dividend rate is 36%; in other words, if the company had grown its dividend during that period at a rate that is constant (rather than variable), then the rate would be 36%. {| class="wikitable" |+Dividend !Financial year !Interim (cents) !Full-year (cents) !Total (cents) !Growth |- |2023 |2.70 |N/A |2.70 |N/A |- |2022 |2.04 |2.37 |4.41 |16.05% |- |2021 |1.82 |1.98 |3.80 |6.44% |- |2020 |1.77 |1.80 |3.57 |6.25% |- |2019 |1.63 |1.73 |3.36 |6.33% |- |2018 |1.56 |1.60 |3.16 |127.34% |- |2017 |1.39 |0.00 |1.39 | -37.39% |- |2016 |0.92 |1.30 |2.22 |188.31% |- |2015 |0.77 |0.00 |0.77 |NA |} === Notes === ==== Calculation(s) ==== Currently, global real estate rental income accounts for an estimated 2.5% of the world's gross domestic product. Global GDP is estimated at $96.1 trillion. Accordingly, the size of the global real estate rental income market as of today (23rd November 2022), in terms of revenue, is $2.4 trillion. Global commercial real estate rental income accounts around 1.25% of the world's gross domestic product. Global GDP is estimated at $96.1 trillion. Accordingly, the size of the global commercial real estate rental income market as of today (23rd November 2022), in terms of revenue, is $1.2 trillion. Germany commercial real estate rental income accounts for around 1.25% of Germany gross domestic product. Germany GDP is estimated at $4.1 trillion. Accordingly, the size of the Germany commercial real estate rental income market as of today (23rd November 2022), in terms of revenue, is $51 billion. United Kingdom rental income accounts for around 2.5% of the country's gross domestic product. UK GDP is estimated at $3.2 trillion. Accordingly, the size of the United Kingdom commercial real estate rental income market as of today (23rd November 2022), in terms of revenue, is $40 billion. ==== '''Investment risk''' ==== Research shows that an investment has two main types of risks: 1) non-systematic and 2) systematic. Systematic risk is the risk related to the overall market, and non-systematic risk is the risk that's specific to an individual investment. Evidence shows that taking on non-systematic risk is inefficient, and it's, therefore, best to eliminate it; and in most cases, elimination is fairy easy to do [by holding a diversified portfolio of investments (i.e. around 15 investments)]. Accordingly, when assessing the riskiness of an investment, it’s best to look at the systematic risk only (i.e. ignore the non-systematic risk). A key measure of systematic risk is beta, and a main way to determine the riskiness of an investment is to compare the beta of the investment with the beta of the market, which is 1. Sirius' beta is 1.06, and is, accordingly, 6% above the market beta (of 1); assuming that a 'low' level of riskiness is less than 10% below the market beta, then the riskiness of investing in Sirius considered to be 'low' (6%>10%). {| class="wikitable" |+Top 10 Shareholders !Shareholders !Shares (m) !Holding (%) |- |BlackRock |122.3 |10.4% |- |abrdn |103.7 |8.8% |- |Cohen & Steers |58.8 |5.0% |- |Vanguard Group |55.2 |4.7% |- |Columbia Threadneedle Investments |48.7 |4.1% |- |Public Investment Corporation (PIC) |47.8 |4.1% |- |Louis Norval |29.9 |2.5% |- |SSGA |29.9 |2.5% |- |Lazard Asset Management |25.9 |2.2% |- |Truffle Asset Management |25.3 |2.2% |- |Total Top 10 Shareholders |546.4 |46.5% |- |Total Shares in Circulation |1,175.1 |100.0% |} Sirius staff and directors hold 26.4m (2.25%) shares. === Risk rating === {| class="wikitable" |+Risk rating |- !Rating !Beta |- | style="background: green; color: white;" |Low|| style="background: green; color: white;" |Equal to or below 0.5 |- | style="background: orange; color: white;" |Medium|| style="background: orange; color: white;" |Between 0.5 and 1.5 |- | style="background: red; color: white;" |High|| style="background: red; color: white;" |Equal to or above 1.5 |} ===Economic links to cash flow patterns === {| class="wikitable" |+Economic links to cash flow patterns |- !Cash flow type!!Introduction!!Growth!!Shake out!!Mature!!Decline |- |Operating|| style="background: red; color: white;" |-|| style="background: green; color: white;" |+ | style="background: orange; color: white;" | +/-|| style="background: green; color: white;" |+|| style="background: red; color: white;" |- |- |Investing|| style="background: red; color: white;" |-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |- | style="background: green; color: white;" | + |- |Financing|| style="background: green; color: white;" |+|| style="background: green; color: white;" |+|| style="background: orange; color: white;" |+/-|| style="background: red; color: white;" |-|| style="background: orange; color: white;" |+/- |} === Glossary === An alphabetical list of terms and their definitions commonly used by Sirius. '''Adjusted earnings:''' is the earnings attributable to the owners of the Company, excluding the effect of adjusting items net of related tax, gains/losses on sale of properties net of related tax, the revaluation deficits/surpluses on the investment properties (also to associates) net of related tax, profits and losses on disposals of properties net of related tax, changes in fair value of derivative financial instruments net of related tax, gain on loss of control of subsidiaries net of related tax, finance restructuring costs net of related tax and adjustment on revaluation expense relating to leased investment properties. '''Adjusted net asset value:''' is the assets attributable to the equity owners of the Company adjusted for derivative financial instruments and deferred tax arising on revaluation gain, financial derivative instruments and LTIP valuation. '''Adjusted profit before tax:''' is the reported profit before tax adjusted for gain on revaluation of investment properties, gains/ losses on sale of properties, changes in fair value of derivative financial instruments, other adjusting items, gain on loss of control of subsidiaries, revaluation gain on investment property relating to associates and adjustment on revaluation in respect to IFRS 16. '''Annualised acquisition net operating income:''' is the income generated by a property less directly attributable costs at the date of acquisition expressed in annual terms. Please see “annualised rent roll” definition below for further explanatory information. '''Annualised acquisition rent roll:''' is the contracted rental income of a property at the date of acquisition expressed in annual terms. Please see “annualised rent roll” definition below for further explanatory information. '''Annualised rent roll:''' is the contracted rental income of a property at a specific reporting date expressed in annual terms. Unless stated otherwise the reporting date is 31 March 2020. Annualised rent roll should not be interpreted nor used as a forecast or estimate. Annualised rent roll differs from rental income described in note 5 of the Annual Report and reported within revenue in the consolidated statement of comprehensive income for reasons including: * annualised rent roll represents contracted rental income at a specific point in time expressed in annual terms; * rental income as reported within revenue represents rental income recognised in the period under review; and * rental income as reported within revenue includes accounting adjustments including those relating to lease incentives. Capital value: is the market value of a property divided by the total sqm of a property. '''Cumulative total return:''' is the return calculated by combining the movement in investment property value net of capex with the total net operating income less bank interest over a specified period of time. '''EPRA earnings:''' is earnings after adjusting for property revaluation, changes in fair value of derivative financial instruments, profits and losses on disposals (collectively the “EPRA earnings adjustments”), the gain on loss of control of subsidiaries, finance restructuring costs, revaluation gain on investment property relating to associates, the resulting tax adjustments and deferred tax in respect of these EPRA earnings adjustments. '''EPRA net asset value:''' is the net asset value after adjusting for derivative financial instruments and deferred tax relating to valuation movements and derivatives. '''EPRA net reinstatement value:''' is the net asset value after adjusting for derivative financial instruments, deferred tax relating to valuation movements and derivatives and real estate transfer tax presented in the Valuation Certificate, including the amounts of the above related to the investment in associates. '''EPRA net tangible assets:''' is the net asset value after adjusting for derivative financial instruments, deferred tax relating to valuation movements (just for the part of the portfolio that the Company intend to hold should be excluded) and derivatives, goodwill and intangible assets as per the statement of financial position, including the amounts of the above related to the investment in associates. '''EPRA net disposal value:''' is the net asset value after adjusting for goodwill as per the statement of financial position and the fair value of fixed interest rate debt. '''EPRA net initial yield:''' is the annualised rent roll based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers’ costs. '''EPRA net yield:''' is the net operating income generated by a property expressed as a percentage of its value plus purchase costs. '''Funds from operations:''' is adjusted profit before tax adjusted for depreciation and amortisation (excluding depreciation relating to IFRS 16), amortisation of financing fees, adjustment in respect to IFRS 16 and current tax excluding prior year adjustments and tax on disposals. '''Geared IRR:''' is an estimate of the rate of return taking into consideration debt. '''Gross loan to value ratio:''' is the ratio of principal value of total debt to the aggregated value of investment property. '''Like for like:''' refers to the manner in which metrics are subject to adjustment in order to make them directly comparable. Like-for-like adjustments are made in relation to annualised rent roll, rate and occupancy and eliminate the effect of asset acquisitions and disposals that occur in the reporting period. '''Net loan to value ratio:''' is the ratio of principal value of total debt less cash, excluding that which is restricted, to the aggregate value of investment property. '''Net operating income:''' is the rental and other income from investment properties generated by a property less directly attributable costs. '''Net yield:''' is the net operating income generated by a property expressed as a percentage of its value. '''Occupancy:''' is the percentage of total lettable space occupied as at reporting date. '''Operating cash flow on investment (geared):''' is an estimate of the rate of return based on operating cash flows and taking into consideration debt. '''Operating cash flow on investment (ungeared):''' is an estimate of the rate of return based on operating cash flows. '''Rate:''' is rental income per sqm expressed on a monthly basis as at a specific reporting date. '''Total debt:''' is the aggregate amount of the Company’s interest-bearing loans and borrowings. '''Total shareholder accounting return:''' is the return obtained by a shareholder calculated by combining both movements in adjusted NAV per share plus dividends paid. '''Total return:''' is the return for a set period of time combining valuation movement and income generated. '''Ungeared IRR:''' is an estimate of the rate of return. '''Weighted average cost of debt:''' is the weighted effective rate of interest of loan facilities expressed as a percentage. '''Weighted average debt expiry:''' is the weighted average time to repayment of loan facilities expressed in years. === What's the median GDP growth rate of Germany over the last 20 years? === To answer this question, I need to consult a reliable data source. According to the World Bank, the GDP growth rate of Germany for the last 20 years (2003-2022) is as follows: * 2003: 0.2% * 2004: 1.2% * 2005: 0.9% * 2006: 3.7% * 2007: 2.8% * 2008: 0.0% * 2009: -5.6% * 2010: 4.2% * 2011: 3.0% * 2012: 0.5% * 2013: 0.4% * 2014: 1.6% * 2015: 1.7% * 2016: 2.2% * 2017: 2.5% * 2018: 1.5% * 2019: 0.6% * 2020: -4.9% * 2021: 3.1% (estimated) * 2022: 2.5% (estimated) To calculate the median GDP growth rate over the last 20 years, we need to arrange the growth rates in order from lowest to highest and then find the middle value. In this case, we have an even number of growth rates, so we need to find the average of the two middle values. The ordered list of growth rates is: * -5.6%, 0.0%, 0.2%, 0.4%, 0.5%, 0.6%, 1.2%, 1.5%, 1.6%, 1.7%, 2.2%, 2.5%, 2.8%, 3.0%, 3.1%, 4.2% The two middle values are 1.7% and 2.2%, so the median GDP growth rate of Germany over the last 20 years is (1.7% + 2.2%) / 2 = 1.95%. === What's the median GDP growth rate of UK over the last 20 years? === To answer this question, I need to consult a reliable data source. According to the World Bank, the GDP growth rate of the UK for the last 20 years (2003-2022) is as follows: * 2003: 2.3% * 2004: 3.1% * 2005: 2.4% * 2006: 2.7% * 2007: 3.4% * 2008: -1.6% * 2009: -4.2% * 2010: 1.7% * 2011: 1.0% * 2012: 0.2% * 2013: 1.8% * 2014: 2.9% * 2015: 2.3% * 2016: 1.9% * 2017: 1.8% * 2018: 1.4% * 2019: 1.4% * 2020: -9.8% * 2021: 6.9% (estimated) * 2022: 5.0% (estimated) To calculate the median GDP growth rate over the last 20 years, we need to arrange the growth rates in order from lowest to highest and then find the middle value. In this case, we have an even number of growth rates, so we need to find the average of the two middle values. The ordered list of growth rates is: * -9.8%, -4.2%, -1.6%, 0.2%, 1.0%, 1.4%, 1.4%, 1.7%, 1.8%, 1.8%, 2.3%, 2.4%, 2.7%, 2.9%, 3.1%, 3.4%, 5.0%, 6.9% The two middle values are 2.3% and 2.4%, so the median GDP growth rate of the UK over the last 20 years is (2.3% + 2.4%) / 2 = 2.35%. === What's the median GDP growth rate of the world over the last 20 years? === To answer this question, I need to consult a reliable data source. According to the World Bank, the GDP growth rate of the world for the last 20 years (2003-2022) is as follows: * 2003: 3.9% * 2004: 5.3% * 2005: 4.5% * 2006: 5.5% * 2007: 5.4% * 2008: 1.8% * 2009: -2.1% * 2010: 4.3% * 2011: 3.8% * 2012: 3.5% * 2013: 3.4% * 2014: 3.9% * 2015: 3.4% * 2016: 3.2% * 2017: 3.7% * 2018: 3.6% * 2019: 2.9% * 2020: -3.3% * 2021: 4.4% (estimated) * 2022: 3.3% (estimated) To calculate the median GDP growth rate over the last 20 years, we need to arrange the growth rates in order from lowest to highest and then find the middle value. In this case, we have an even number of growth rates, so we need to find the average of the two middle values. The ordered list of growth rates is: * -3.3%, -2.1%, 1.8%, 2.9%, 3.2%, 3.4%, 3.4%, 3.5%, 3.6%, 3.7%, 3.8%, 3.9%, 3.9%, 4.3%, 4.4%, 5.3%, 5.4%, 5.5% The two middle values are 3.5% and 3.6%, so the median GDP growth rate of the world over the last 20 years is (3.5% + 3.6%) / 2 = 3.55%.
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