Our Q4 2021 performance announcements include an AUM fee reduction, the latest dividend changes, updated financial information on all properties and an update on property disposals.

To ensure that all clients have the opportunity to consider this announcement, the Resale Market will be suspended for 3 working days, as usual, re-opening at 10am on Wednesday 22 December 2021.

We remain committed to reducing client fees and improving client returns. Today we are delighted to announce that our AUM fee will reduce from 1.0% to 0.7% p.a., effective 1 January 2022.

As a result, dividends will increase by at least 0.3% for all dividend paying properties, effective 5 January 2022.

Within the property portfolio, the past 3 months of operating performance has delivered strong returns. Dividend changes, due to improved property performance and the AUM fee reduction, will significantly increase the average dividend yield on the portfolio from 2.4% to 3.2% p.a.

Better acquired Property Partner in September 2021 and is investing heavily in our business, resulting in the significant reduction in the AUM fee and laying the foundations for our growth plans in 2022. For the first time in a number of years, this quarter, we have added new members to our team and are in the process of hiring more.

Better recently announced up to $1.5 billion in new funding, in connection with their SPAC merger agreement, that will transform Better into a publicly-listed company (read the announcement here). This leaves Better exceptionally well funded to pursue growth in the US and here in the UK.

Today’s announcements:

1. Property financial performance

2. Dividend changes

3. Property disposals

4. Development loans

5. Properties with fire safety issues

6. Upcoming quarterly announcements

1. Property financial performance

As announced previously, we now update every property’s financial performance every 3 months, as part of our commitment to continually enhancing disclosure.

For each property, we report historical financial performance and the property’s net cash position. These financials can be found in each property’s ‘Financials’ section and the ‘Investment Case’ contains further discussion. The financial results disclosed include rental income, property operating and works costs, mortgage interest costs, fees paid to Property Partner, dividends, etc.

Overall, the net cash position of the portfolio is a surplus of 0.5% of property value (up from 0.2% at 30 September 2021), representing a continued strengthening of the properties’ balance sheets.

2. Dividend changes

In total, 63 of 74 eligible properties (where shareholders vote to sell at the 5-year anniversary process, no dividend is paid) are now paying dividends, with an average yield of 3.7% p.a. Across the entire portfolio, including those properties not paying dividends, the average yield has increased from 2.4% to 3.2% p.a.

From 5 January 2022:

• 17 properties will re-commence paying a monthly dividend
• 7 properties will increase their monthly dividend, over and above the 0.3% p.a. increase attributable to the AUM fee reduction
• 41 additional properties will increase their monthly dividend by 0.3% p.a. due to the AUM fee reduction

You can find the full list of dividend changes from 5 October 2021 to 5 January 2022 here.

3. Property disposals

Through the course of 2021, we have conducted an enormous programme of property disposals, involving 131 properties or units. Our detailed record of all property sales is displayed on our Selling Record, which shows an average total return (dividends plus capital gains) of 4.5% p.a. after all fees and taxes.

The first element of this disposals programme is discretionary sales of individual units within a block, where shareholders in each property have voted for the sale.

Reasons for these sales have varied, including ‘opportunistic’ sales to capture favourable market conditions, reduction in expensive mortgages, reduction of a property’s net cash deficit, reduction of mortgage refinance risk, etc. The programme has been a significant contributor to realising capital gains, increasing dividend yields and recapitalising SPVs where necessary, and we will continue the programme in 2022.

A full list of activity in 2021 can be found here and is summarised below:

• 14 unit sales completed
• 8 units currently under offer
• 4 units on the market
• approximately 8 units are due to go on the market in January 2022 (timed to match tenancy expiries)

The second element of the disposals programme is 5-year anniversaries, where shareholders have determined to sell the entire property.

We will, of course, be continuing with all 5-year anniversary processes in 2022 as scheduled. A full list of activity in 2021 can be found here and is summarised below:

• 15 sales completed
• 11 properties / units under offer
• 9 properties / units on the market
• 62 properties / units to be sold as soon as possible, subject to vacant possession and ensuring we do not harm the market by selling too many units in the same block at once

4. Property development loans

Of the 16 development loans that our clients have funded, to date, 7 have been repaid in full with interest.

You can find the latest updates on the outstanding loans on their respective investment pages here.

5. Properties with fire safety issues

The UK-wide fire safety scandal affecting high rise blocks continues. Whilst the government has taken steps to address the issues, the situation remains far from resolved. For further details on this and our 7 properties impacted, read our latest update here.

6. Upcoming quarterly announcements

31 March 2022 – market closed from 10am that day until 10am, 5 April 2022

30 June 2022 – market closed from 10am that day until 10am, 5 July 2022

Our Resale Market will continue to operate as usual over the festive period. Other operations (e.g. customer service, withdrawals, deposits) will operate with reduced service levels between 23 December and 3 January (inclusive).

If you have questions about these announcements, please email support@propertypartner.co

We thank all of our clients for their continued support in 2021. We wish you a merry Christmas and prosperous New Year in 2022.

Kind regards

The team at Property Partner

Capital at risk. The value of your investment can go down as well as up. The Financial Services Compensation Scheme (FSCS) protects the cash held in your Property Partner account, however, the investments that you make through Property Partner are not protected by the FSCS in the event that you do not receive back the amount that you have invested.

The performance information (including any expression of opinion or forecast) reflects the most up-to-date data at the time of production; publication is made in good faith on the basis of publicly available information or on sources believed by Property Partner to be reliable.

Past performance and / or forecasts (if stated) are not a reliable indicator of future performance. Interest and capital returned may be lower than expected. Gross rent, dividends, and capital growth may be lower than estimated. Exiting your investments (on the resale market, via the 5-year anniversary process or according to targeted strategies) is subject to price and demand. Property Partner does not provide tax or investment advice and any general information is provided to help you make your own informed decisions. Customers are advised to obtain appropriate tax or investment advice where necessary. Financial promotion by London House Exchange Limited (No. 8820870); authorised and regulated by the Financial Conduct Authority (No. 613499). See Key Risks for further information.