annual report 2004 heading.
Tenanted residential division Print this page View as a PDF Email someone a link to this page Send feedback

Divisional key characteristics:
long-term business, highly cash generative, high margins.

Within this division, contributions come from two areas of operation:


Regulated (Investment value: £939m)

Key features:
  • Tenant has security of tenure
  • Rents set by rent officer and increases capped at retail price index +5% over two years
  • Purchased at discount to vacant possession value and sold on vacancy
  • Approximately 8% of the portfolio becomes vacant every year
  • No new regulated tenancies being created

Characteristics: Low rental yield, high margin on sales.

Life tenancy (Investment value: £167m)

Key features:
  • Tenant has security of tenure
  • No rental income
  • Whole or partial ownership purchased at discount to vacant possession
  • Property sold on vacancy
  • No maintenance obligation

Characteristics: No rental yield, high sales margin.

Assured, vacant and others (Investment value: £223m)

Key features:
  • Market rented tenancies (£136m)
  • Vacants to be sold (£49m)
  • Other (including ground rents and serviced apartments £38m)

Characteristics: Market yield, some margin on sale.

Rental and management

Net rental income

Key features:
  • Net rental income derived from regulated and assured tenancies after maintenance and management expenditure

Asset and management fees

Key features:
  • Fee based activities remunerated by asset and property management fees

Characteristics: Management skills adapted to provide additional fee income with no capital investment.

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