Long, strong, indexed property income

VALUE AND INDEXED PROPERTY INCOME TRUST PLC

2

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

100

%

Rent collection

Leases

Debt

Total property return

EPCs

Real growth over 38 years above RPI

100

%

30

32

6.3

%

net initial property yield

6.9

96

39

100

%

3

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Over the year, VIP’s share price increased by 6.9% to give a share price total return of 15.0%.

The net asset value (NAV) total return was 7.1%. The dividend yield at 31 March 2025 was

7.5% (2024: 7.7%).

During the year to 31 March 2025, Value and Indexed Property Income Trust PLC (VIP or the

Company) was an investment trust company listed on the London Stock Exchange. On 1 April

2025, the Company became a UK Real Estate Investment Trust (REIT). The Company invests

directly in UK commercial property to deliver long, strong, indexed income. Its performance

benchmark is the MSCI UK Quarterly Property Index, the main benchmark for commercial

property performance. OLIM Property Limited is the Investment Manager.

Borrowings

31 March 2025

31 March 2024

31 March 2023

31 March 2022

Average interest rate

4.5%

3.9%

3.9%

5.6%

Total loans (loan to value)

£59 million (39%)

£50 million (35%)

£50 million (32%)

£57 million (30%)

Loan maturity

6.9 years

6.9 years

7.9 years

6.2 years

0

2

4

6

8

10

12

1 year

5 years

10 years

20 years

38 years

Over the past three years, as the table below shows, the average interest rate on VIP’s borrowings

was cut from 5.6% to 4.5% (of which 96% is fixed), the loan to value ratio rose from 30% to 39%

and the average loan length rose from 6.2 years to 6.9 years. The fixed rate loan expiring in March

2033 was increased by £15 million and used mainly to repay £10 million of the loan expiring in

March 2026 (£6 million in January 2025 and £4 million in April 2025, post VIP’s year end).

4

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Key dates

25 October 2024

First quarterly dividend of 3.4p per share for the year to 31 March 2025

25 November 2024

Announcement of Half-Yearly Financial Results for the six months to 30 September 2024

31 January 2025

Second quarterly dividend of 3.4p per share for the year to 31 March 2025

20 March 2025

General Meeting - Resolution passed to allow conversion to a Real Estate Investment

Trust (REIT)

1 April 2025

Conversion to a REIT

25 April 2025

Third quarterly dividend of 3.4p per share for the year to 31 March 2025

10 June 2025

Announcement of Annual Financial Results for the year to 31 March 2025

10 July 2025

Annual General Meeting, Shepherd & Wedderburn LLP, 4th floor, 1-6 Lombard Street,

London EC3V 9AA (12.30pm)

25 July 2025

Final dividend of 3.6p per share payable for the year to 31 March 2025, to be paid as a Property

Income Distribution (PID)

31 October 2025

First quarterly PID payable for the year to 31 March 2026

November 2025

Announcement of Half-Yearly Financial Results for the six months to 30 September 2025

27 January 2026

Second quarterly PID payable for the year to 31 March 2026

Over the year to 31 March 2025, VIP’s portfolio was improved by the sale of six properties at sale

prices totalling £12.4 million (£12.3 million net), 5.0% above their valuation total at a net initial

yield of 7.4%. These sales comprised four shorter let industrial investments, a short let library

and convenience store in Wales and an over-rented London pub. One acquisition was made

during the year, the Bridgemere Garden Centre investment near Nantwich, at a price of £16.5

million (£17.5 million including costs) at a net initial yield of 6.6%, rising to 7.8% in December

2025 with 24 years unexpired to Blue Diamond UK Ltd on an RPI-linked lease.

The intended investor in the Company is a retail investor who is seeking long-term (at least five

years) real growth in dividends and capital value from investing in directly held UK commercial

property, plus cash or near cash securities, pending re-investment. The Company changed its

investment policy and its name from Value and Income Trust PLC in January 2021. The Company

entered the UK REIT regime on 1 April 2025 following Shareholders’ approval of amendments to

the Articles of Association at the General Meeting held on 20 March 2025.

For full details of the REIT conversion, please click on

the following link to view Value and Indexed Property

Income Trust Literature.

https://olimproperty.co.uk/

value-and-indexed-property-income-trust.html

5

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

CONTENTS

Strategic Report

Chairman’s Statement

8

Manager’s Report

11

Business Review

36

Governance Report

Directors’ Details

48

Directors’ Report

49

Directors’ Remuneration Report

58

Statement of Corporate Governance

62

Statement of Directors’ Responsibilities

70

Report of the Audit and Management Engagement Committee

71

Independent Auditor’s Report

75

Financial Statements

Group Statement of Comprehensive Income

86

Company Statement of Comprehensive Income

87

Group Statement of Financial Position

88

Company Statement of Financial Position

89

Group Statement of Cashflows

90

Company Statement of Cashflows

91

Group and Company Statement of Changes in Equity

92

Notes to the Financial Statements

93

Additional Information

Property record over 38 years

120

List of properties

122

Alternative Investment Fund Managers Directive

124

How to Invest in Value and Indexed Property Income Trust PLC

126

Glossary

127

Notice of Annual General Meeting

128

Conversion to UK REIT

133

Contact Information

135

Brentwood

Strategic

Report

7

8

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

CHAIRMAN’S STATEMENT

0

1

2

3

4

5

CPI 0%

CPI 1%

CPI 2%

CPI 3%

CPI 4%

CPI 5%

9

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

10

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

CHAIRMAN’S STATEMENT

CONTINUED

Sector

Mar

2025

Mar

2024

Mar

2023

Mar

2022

Mar

2021

Mar

2020

Mar

2014

Supermarkets

29%

29%

31%

30%

16%

2%

5%

Industrial / Warehouse

23%

28%

29%

33%

35%

32%

8%

Bowling and Health Club

18%

19%

9%

5%

8%

12%

0%

Garden Centre

12%

0%

0%

0%

0%

0%

0%

Hotels

8%

9%

9%

6%

0%

0%

0%

Caravan Park / Other

7%

9%

9%

9%

14%

16%

15%

Pubs / Restaurants

3%

6%

9%

13%

24%

32%

17%

Offices

0%

0%

0%

0%

0%

0%

0%

Shops

0%

0%

0%

0%

0%

0%

39%

Roadside

0%

0%

4%

4%

3%

6%

16%

Total

100%

100%

100%

100%

100%

100%

100%

Number of Properties

30

35

39

43

31

26

29

VIP property portfolio - sector weightings since 2014

11

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

The property market

UK commercial property capital values, as measured by the MSCI UK

Quarterly Property Index, the main benchmark for institutional property

performance, were just ahead by 0.4% on average over 2024 as a whole,

after two years of steep declines. Including rental income, the total

return was +5.5%. But capital values still fell by 5% on average for the

office sector, with 0% - 2% declines in the alternatives sector, offset by

capital gains averaging 2% for retail property and 4% for industrials.

Growth %

Calendar 2024

Total Return %

Capital

Rental Value

Rent Passing

Retail

8.3

2.1

2.0

0.7

Office

0.0

-4.6

3.0

0.6

Industrial

8.3

3.6

5.7

5.4

Alternatives

3.9

-1.1

3.4

3.5

All property

5.5

0.4

3.7

2.9

MSCI UK

Property Index

Retail and industrial property outperformed the market, but for different

reasons: retail had the highest income yield, while industrials showed

better capital growth. Capital values in the alternatives sector generally

stabilised over the year, while office capital values kept falling, with rising

vacancies eroding total rents received on office property portfolios.

12

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

The property market has continued to edge higher overall from its post-

downturn low point last June, but President Trump’s first quarter in the

White House is now making buyers nervous in property, as in other markets.

Turnover has, therefore, been low, with occasional keen yields achieved

for flavour of the month investments which tick every box for the few

active institutional investors. Some private equity houses are targeting big

corporate deals at a discount, mainly in the industrial sector. But most of the

market is thin and cautious at present.

Sector

June 2022

to June 2024

June 2024 to

March 2025

Retail

-18.7

+3.0

Office

-28.7

-1.3

Industrial

-25.5

+3.9

Alternatives

-14.1

-0.8

All property

-22.7

+1.5

6

months

1

year

3

years

5

years

10

years

Capital values

All property

1.2

1.5

-7.2

-2.4

-0.7

Rental values

All property

2.0

3.9

3.7

2.2

1.8

Total returns

All property

3.7

6.5

-2.7

2.2

4.0

2025

2024

2023

2022

2021

2020

2011

2008

2006

Property

(equivalent yield)

6.6

6.6

6.5

6.1

5.1

5.8

6.9

8.3

5.4

Long

Gilts

Conventional

4.7

3.9

3.5

3.8

1.0

0.2

2.5

3.7

4.6

Index linked

1.4

0.4

0.2

0.3

-2.6

-2.6

-0.2

0.8

1.1

UK Equities

3.5

3.8

3.8

3.6

3.1

3.4

3.5

4.5

2.9

RPI (annual rate)

3.2

4.3

5.2

13.4

7.5

1.2

4.8

0.9

4.4

Yield

gaps:

1.9

2.7

3.0

2.3

4.1

5.6

4.4

4.6

0.8

Property less

Index Linked

Gilts

5.2

6.2

6.3

5.8

7.7

8.4

7.1

7.5

4.4

Property less

Equities

3.1

2.8

2.7

2.5

2.0

2.4

3.4

3.8

2.5

Underlying rental values are still generally improving, led by industrials, with

all sectors showing some growth.

13

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MSCI UK Monthly Property Index vacancy rates %

All Property Types

Retail

Office

Industrial

0

5

10

15

20

25

30

2009

2011

2013

2015

2017

2019

2021

Jan

2025

Feb

2025

Mar

2025

2023

Source: MSCI UK Monthly Property Index March 2025

Property portfolios with strong

tenants, paying affordable rents on

long, preferably indexed leases for

sustainable buildings in prosperous

locations should continue to

outperform. Weaker or ex-growth

properties need to be weeded out

and portfolio quality upgraded

by new, stronger purchases and

improvements to existing properties.

Secure and sustainable growing

income will be the key to delivering

attractive real total returns and

outperforming the competition for

UK commercial property portfolios

in the years ahead. Safety first must

be the property investor’s motto, with

UK inflation far from dead and US

economic and foreign policy in flux.

As the chart above shows, the All

Property vacancy rate has seen a

significant increase over the past

year to an all time high of 12.4% in

February 2025. The previous high

was 10.7% in November 2009 in the

wake of the Global Financial Crisis.

This is mainly due to office vacancies

more than doubling to 26.0% from

12.0% in December 2019 pre-Covid,

but industrial vacancies have also

risen over the year from 6.7% to 9.6%

to near record levels.

UK commercial property, with its

high running yield and growing

rental income, offers fair value

against UK equities and conventional

fixed-coupon gilts, and excellent

value against index-linked gilts,

which still only offer low real returns

at considerable capital risk, as shown

by their performance since 2021.

14

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Property prospects by sector

Industrial: Pressures

building amid a “cautiously

optimistic” environment

Investor enthusiasm failed to

translate to significant transaction

volumes in Q1 2025; only a few

larger core assets traded. 2024

transaction volumes totalled £11.1bn,

slightly up on 2023’s levels but still

way below the sector’s glory years

of 2021 and 2022 and marginally

below the 10-year average. Capital

values increased by 1.0% for the

three months to March 2025 for

all industrials in the MSCI UK

Monthly Property Index and by

5.0% for the 12 month period.

The occupational market is

weakening. Large, big box

distribution units recorded take up

in 2024 of 21.2m sq ft, 33% below the

five-year average, and the industrial

vacancy rate increased again to

9.0% in the MSCI UK Monthly

Property Index at end March 2025.

This was up again, 2.1% over the 12

months from March 2024 (6.9%)

and almost double the record low

of 5.2% in October 2021. Industrial

vacancy rates were last recorded

above 9% in the first half of 2013.

Occupiers are reacting to rising

labour and increasing occupational

costs. Given the rental growth of

recent years, industrial will be the

hardest hit sector after the rates rise

in April 2025 and occupiers are now

consolidating their property holdings

and exiting any surplus or out of date

space, which no longer works for

them physically or environmentally.

The sector’s estimated future

rental growth has decelerated

and market forecasts are now 3%

p.a. and 4% p.a. for the next five

years. These forecasts are too high

and will only reduce further with

occupiers’ affordability concerns.

Rental value growth in the MSCI UK

Annual Index has run at an average

of 2.8% per annum over the last 20

years, and 5.6% over the past 10.

These records are skewed by the

post Covid boom in industrial and

warehouse rents in 2021 and 2022,

which both saw growth over 10%.

Incentives, offered as an inducement

to take a new lease, are also

increasing – another sign of a

weakening occupational market. A

tenant taking a new 10 year lease

in 2023 would have received an

average of eight months’ rent free

(10 months’ today). In addition,

capital contributions are increasing.

Industrial units are usually offered

in a shell state for an occupier to

fit out at their cost with a landlord

providing a small financial incentive

if demanded. Average fit out costs for

industrial are c.£60 per sq ft, which

is now a prohibitive cost for many

occupiers. Prologis, the industrial

investor, for example, has had to

“retrofit”, at its cost, several of its

industrial units to attract occupiers.

In summary, the industrial property

market is now fighting headwinds

as occupiers grapple with increasing

costs and investors face up to tenant

insolvency risk, rising void rates and

uninspiring future rental growth.

Those investors who have been

buying into the sector on the back of

aggressive rental growth and limited

vacancy assumptions should be

concerned. We remain cautious for

2025 - investment volumes will stay

flat, yields for the more secondary

stock could well expand a little,

and income growth, the traditional

driver of performance under this

stagnant backdrop, will be dull.

15

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Despite these short-term indicators,

to be expected during a downturn

in a property cycle, there is still a

solid argument for UK industrial

property for the medium to long

term. The sector’s fundamentals are

strong: rents are still growing, land

values in the South in particular

will be underpinned by residential

demand and global supply pressures

could signal more onshoring and

increased occupational take up.

There is still strong pent-up demand

from UK and overseas investors for

the sector, which will drive values

up again when confidence returns.

Offices: The outlier – values

still falling with market activity

at an all-time low

Office transaction volumes remained

well below the long run averages

for the sector with the UK office

market achieving a record annual

low in 2024 at £9.7bn, 52% below

the 10-year average. Within that,

the City of London market, usually

held up during down cycles by

larger lot sizes trading, had the

lowest annual transaction volume

since 1989 at £2.3bn, significantly

down on 2023 and 65% below the

five-year average of c.£6bn. The few

properties trading are either super

prime or much smaller lot sizes for

conversions to leisure / residential

uses. Office capital values are still

falling. The MSCI UK Monthly

Property Index recorded no growth

over the month to end March 2025,

-3.1% over the 12-month period and

-12.5% per annum over three years.

Aylesford

16

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Vacancy rates have hit an all-time

high at 26%. Annual take-up for the

sector for 2024 was 10.8 million

sq ft, below the sector’s 10-year

average. Occupiers who require more

than 100,000 sq ft of space would

normally commit to space at least 24

months prior to need, yet pre letting

activity was at a three-year low last

year. These occupiers are either

downsizing or deferring their costly

move and negotiating lower rates

on their current space with their

desperate landlord.

Some landlords are hoping

occupancy rates will improve as

the “return to the office” gathers

momentum throughout 2025 but

occupier costs have increased again

with the business rates increase in

April 2025. It is estimated that the

office sector will have almost £700

million added to its annual business

rates bill and larger premises may

see at least a 20% increase. Occupiers

will either delay any property

decisions and take-up will fall further

or they will be prompted to vacate

space sooner and the vacancy rate

will rise more.

One of the UK’s largest office

landlords, Land Securities, have

announced the sale of c. £2bn

worth of key office investments to

rebalance their portfolio with more

retail and residential. Other major

office investors such as British Land

are expected to follow suit. The

traditional investors are no longer

interested in the sector.

We just cannot envisage the

office sector again becoming the

mainstream player it once was for

the foreseeable future. The economic

backdrop only makes the sector look

even more unattractive and not the

“safe haven” investors seek out. The

only way the sector could gain any

traction is if capital and rental values

fall further to stimulate demand.

Gloucester

17

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Retail: An under the

radar resurgence

18

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Newport

19

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Alternatives: Defensive assets let

on long leases to strong tenants at

realistic rents are outperforming

Assets outside the traditional office,

retail, and industrial sectors now

account for 25% of the MSCI UK

Quarterly Property Index, compared

to 22% for offices, 18% for retail, and

35% for industrial. Properties in the

‘Alternatives’ sector are often seen

as defensive, featuring long, index-

linked leases and a diverse range

of tenants, making them attractive

in uncertain market conditions.

The alternatives sector accounted

for the largest share of Q4 2024

investment volumes at 39%, but

the ‘cautious optimism’ felt at the

beginning of that quarter has been

tempered by the higher National

Insurance contributions, increases in

the National Living Wage and rising

business rates. The Government’s

decision to freeze the standard rates

multiplier to increase with inflation

and to cut hospitality and leisure

rates relief from 75% to 40% will

see many business rates bills rise

by 140% in April, or even higher.

Businesses are looking at ways to

mitigate these costs, some will fail

in the short term, while others will

likely reduce staff and increase

costs to the consumer as they try to

keep their heads above the water.

Investment appetite has slowed in

Q1 2025, and transaction volumes

across all sectors are down. (-37% in

February 2025 v’s February 2024).

High-quality, well-let assets,

particularly those in the £1m–£3m

lot size range, are still attracting

interest, particularly from private

investors and property companies,

but buyers are increasingly

selective and demanding higher

risk premiums. The focus is more

than ever on covenant strength,

affordability of rents, income growth

and future alternative use value.

Pubs and Restaurants

: In December

2024, UK pubs and restaurants saw

a welcome sales boost, marking

a strong finish to the year. This

growth was driven by festive

celebrations and the resulting

uptick in consumer spending,

especially in London. However,

the hospitality sector continues

to face considerable challenges,

with many closures, mainly of

smaller pubs, attributed to rising

operational costs and more cautious

consumer spending. In April, when

rate bills rise, restaurants will see

their annual bills increase from an

average of £5,563 to £13,351, with

pubs similarly affected. Independent

and privately-backed pubs and

restaurants are struggling the most.

Well-managed operators with

strong cash flows, such as Greene

King, Wetherspoons, Fullers,

Youngs, and Shepherd Neame, are

better positioned to weather these

cost pressures. However, even

these industry leaders will face

increasingly narrow margins post-

April. In its recent interim results,

Wetherspoons projected that rising

labour costs and National Insurance

contributions would add around

£60m to its annual costs. Shepherd

Neame, despite reporting a strong

second half-year performance with

operating profits up by 7.4%, warned

of a ‘challenging market’ and rising

‘unwelcome’ costs, which it plans

to address through a combination

of price hikes and cost efficiencies.

Pubs let on long leases to strong

tenants remain attractive to

investors, though yields have moved

out and are under pressure for assets

where covenants look uncertain, and

rents have grown too high too fast.

20

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Bowling

: As one of the most

affordable family-friendly outings,

bowling continues to attract diverse

income groups. The dominant

market leaders, Hollywood Bowl and

Ten Entertainment (Tenpin) are still

performing strongly. These operators

are focusing on value-for-money,

multiple-concept experiences and

site refurbishments. The bowling

sector presents an opportunity

for specialist investors to acquire

long-let, index-linked leases at

high yields, with rents often below

neighbouring retail warehouses or

industrial properties, but future

alternative use value does now need

to underpin investment value to

access the widest possible market.

Budget Hotels and Caravan Parks

:

Budget hotels, particularly Premier

Inn (Whitbread), have benefited from

a cost-conscious consumer. Despite

operational challenges affecting

profits, investor interest in long-

let, index-linked hotel investments

rose significantly in 2024 with

transaction volumes in this sector

double those of 2023, marking the

highest level since 2019. While

volumes slowed in Q4 2024, total

returns for the 12 months to March

2025 stood at +9.7%. Transactions

in Q1 2025 have been limited and

yields have moved out slightly,

particularly where unexpired terms

have shortened. Caravan Parks are

also facing higher overheads, most

notably in staffing and employment

costs. 2024 had lower than typical

transaction volumes with fewer

active buyers and a lack of supply,

with more operators choosing to

sit on their hands. The proposed

change to Business and Agricultural

Property Relief has already focussed

the minds of some operators looking

towards succession, which may

affect supply over the next few years.

Garden Centres

: Some garden

centre operators, such as Dobbies,

have struggled with over-expansion,

unseasonal weather, and excess

stock. However, well-financed

operators like Blue Diamond, the

UK’s leading garden centre group, are

thriving and expanding through their

own sale and leaseback programmes.

The sector is undergoing

consolidation, with smaller or less

profitable centres being acquired by

strong operators. Larger, profitable

garden centres with valuable sites

and future alternative use potential

continue to attract investor interest.

Student Accommodation

:

Investment in student

accommodation reached over

£3.8bn in 2024, an increase of 14%

on the previous year, but Q4 2024

volumes were down as yields rose

and capital values came under

pressure from rising bond yields -

there has been very little trade so

far in 2025. Growth over the past

few years has been fuelled by the

substantial deployment of capital

into a sector underpinned by robust

student demand, long term income

streams, strong annual rental

growth and limited supply, but there

are occupancy challenges. Some

operators have increased rents above

what students can afford, increasing

voids. There has also been a notable

decrease in international student

numbers (applications for study visas

were down 17% in 2024 v’s 2023).

Strategic partnerships between

universities and developers are a

viable solution to address financial

pressures and housing shortages,

so long as the planners play ball and

university finances permit. When

properties let to notable universities

on long index-linked leases do come

to market, there is stiff competition.

21

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

The economy

The British economy has suffered four severe shocks over the past ten

years – Brexit, COVID, the war in Ukraine and now Trump, so economic

forecasting is even more “art” than “science”. Unquantifiable uncertainty

abounds, and our basic economic statistics, from average earnings to

employment to wholesale prices, have broken down as they have failed

to cope with post-COVID changes in working patterns and falling survey

response rates. So the Treasury and the Office of Budget Responsibility,

like all forecasters, are flying almost blind through thick fog.

Unlike most other Western economies, the UK is still trying to adjust to

major changes in our pattern of exports and imports with the European

Union (with half our overseas trade against less than 20% for the USA).

And the UK’s legacy of high public debt post-COVID, with financially

stretched public services and a fast-growing interest bill on our short-dated

Government borrowings, meant that in her Spring Statement on 26 March,

the Chancellor looked to be walking a tightrope while wearing a straitjacket.

0

30

60

90

120

150

2012

2016

2020

2024

2028

2024/25 onwards forecast

Source: OBR

UK 10 year gilt yields have been highly volatile but shown little net change

over the past two years, rising from 4.5% to 4.6% over 2024 and to 4.7% at end

March 2025. International yield movements were the key driver. UK gilts

traded generally around 4% for much of 2024, but then rose to 4.6% after the

UK Autumn Budget and President Trump’s re-election in November. They are

now getting some support from international investors’ aversion to America.

22

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Consumer price inflation is not going

to fall back sustainably to the Bank of

England’s official 2% target any time

soon. The annual rate of increase

of the CPI dipped below 3% early in

2025 but may be back to 4% over the

summer. Water, energy and council

tax bills rose sharply on 1 April, and

employers will pass on in prices what

they can of the continuing increases

in the National Minimum Wage (9.8%

in April 2024 and 6.7% in April 2025

for adults and up to 21.2% and 16.3%

for young workers) and the increases

in employers’ national insurance

contributions. The Chancellor had no

real alternative to raising employers’

national insurance, being boxed in

by commitments not to raise other

taxes; but lowering the starting

point from £9,100 to £5,000 meant

the cost burden fell most heavily

on employers of large numbers of

low paid and part-time workers. As

well as the likely loss of part-time

job opportunities for people on the

edge of unemployment, the extra

cost has fallen heavily on consumer-

facing retail, leisure and hospitality

businesses whose increased prices

will show up quickly and clearly

in the consumer price indices.

0

1

2

3

4

5

2020

2021

2022

2022

2024

2025

Unemployment may rise slightly

this year; after that it will depend

on whether the Spring Statement’s

benefit and welfare changes bring

more people into work as hoped.

More generally, consumer price

inflation will stay above the official

2% target if productivity and GDP

per head grow around 1% a year

over the next four years, while

average earnings and service sector

inflation stay near their present

5% annual growth rates. Even with

the Government’s oft-repeated

commitment to growth, 3% still looks

a more realistic central forecast

for annual UK CPI growth than 2%

over the next few years. And it may

be even higher in a world of tariffs

and trade shocks. So the Monetary

Policy Committee of the Bank of

England needs to tread carefully

in cutting short term interest

rates from the current 4.25%.

The Chancellor’s redefinition of

public sector debt in the Autumn

Budget has enabled public sector

net investment to rise to average

2.6% of GDP over the next five years.

Part of the increase in defence

spending to 2.5% of GDP in 2027, and

then to 3% when resources allow,

will be achieved through capital

projects. But the severe cut to 0.3%

of GDP in the overseas aid budget

comes from current spending.

23

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Housing, after many years of policy neglect under all Governments,

provided the main bright spot in the OBR analysis of Britain’s public

finances and growth prospects. The new Government’s commitment to

build 1.5 million homes over the next 5 years is unrealistic, starting from a

base of only 200,000 a year. But the OBR, and many experts, do now believe

the Government’s policy changes make 300,000 homes a year achievable

by 2029-30. These include the National Policy Planning Framework and

a strengthened presumption in favour of development, increased social

housebuilding and improved productivity. Mortgage rates are still adjusting

to higher levels (from an average of 3.7% to 4.7% in 2028 as lower fixed rates

run off). High land prices are still the main difference between housing costs

in the UK and comparable countries, so compulsory purchase of land for

affordable housebuilding at existing use values could make a real difference

here.

Since 2021, house prices in England and Wales have increased by 1%, while

average earnings have risen 20 per cent. But typical mortgage rates have

risen from 2% to 4%-5%. House prices are particularly unaffordable in

London and south east England, where real house prices, especially at the

higher end of the market are overvalued and have further to fall. But lower

priced homes in other regions are now more realistically valued, especially

by comparison with renting.

Ratio of House Prices to Average Earnings

London

England

Wales

3

6

9

12

15

2000

2010

2020

Source: ONS

24

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Raising Britain’s poor relative rates

of investment and particularly

growth will be a long, hard but

not impossible slog. Most British

businesses are in reasonable

financial health, household savings

rates at 10% are relatively high and

the economy is still growing through

all the headwinds. But confidence

is low. British pension funds and

private investors have run their

holdings in productive UK assets

– ranging from quoted shares to

unlisted direct property and wider

infrastructure - right down over the

past 25 years so foreign buyers are

snapping them up from the bargain

basement. Boosting British business

and the London Stock Exchange by

focussing ISA tax relief just on UK

investments could shake off the

gloom and save British taxpayers’

cash by stopping subsidising our

competitors’ shares around the

world. Tesla needs no British tax

breaks.

The outlook for the world economy

had been improving at the end of

2024. But the International Monetary

Fund have now cut their forecasts

for GDP growth in the USA to 1.8%, in

2025 and 1.7% in 2026, with growth

in the Euro area and UK around 1%

in both years with China at 4% and

India at 6%. These could still be too

high, especially if the USA tariff

confrontation with China drags on.

Frequent, unexpected and erratic

changes in public policy by the new

US Administration, from cuts in

public spending and employment

at home, to stopping the US Aid

programme across the world, are

undermining investor, business and

consumer confidence in America.

The almost complete reversal of

US support for Ukraine, its half-

hearted (at best) commitment to

NATO and open hostility to the

European Union, have already led

the new German government to raise

the roof on defence spending and

investment. Seen from London, the

Atlantic looks wider and the English

Channel much narrower than at

any time since 2016 and the Euro

will grow as a reserve currency.

President Trump may modify or draw

back from some of his more extreme

demands, but investors in all markets

would be wise to assume that the

world is now a more dangerous place

for the next few years and stick to

safe, income-producing investments,

avoiding over concentration on the

USA. The White House will also be

actively hostile to action on climate

change, both directly at the inter-

governmental level and indirectly

by its hostility to investors’ growing

efforts in recent years to make

business prioritise the environment.

Economic policymakers and

investors alike have to manage as

best they can in these turbulent times

with a consistent concentration

on sustainable growth and

security. But upheavals always

bring opportunities. Over the past

50 years in Britain, the best long

term investments have usually

been made under dark skies

before the gloom starts to lift.

25

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Annual portfolio summary

VIP specialises in direct investment in UK commercial properties with long,

strong, index-related income streams to deliver above average long term

real returns.

The portfolio comprises 30 properties across seven well diversified sub-

sectors, fully let on 32 full repairing and insuring leases (WAULT 13.3

years to the tenants’ option to break) to 18 different tenant covenants

across England and Scotland, with 79% of rents coming from the top

ten tenants. Following the sale of the long leasehold Doncaster property

on 24 April 2025, post the year end, all properties are freehold.

Index-related rent reviews

The current rental income on the whole portfolio stands at £9.8 million per

annum. 100% has either index-linked or fixed increases.

Over the financial year, 9 rent reviews completed representing 29.3% of the

rent roll, with an average annual increase of 3.0% on their rents passing.

This added £0.1 million (1.2%) to all held properties. Six were RPI-linked

annual reviews, two had five yearly RPI-linked reviews and one had an

annual fixed increase of 2.0%. The two rent concessions at Brentwood and

York also ended in the year, increasing the rent passing from these two

properties by 29.8%, which added a further £0.2 million to the portfolio’s

rental income.

There are 32 leases, which are reviewed with either RPI-linked (88%), CPI-

linked (9%) or fixed increases (3%). There are no longer any properties with

open market rent reviews.

Eight tenancies representing 29% (year ended 31 March 2025) of the rental

income have annual rent reviews and 24 (71%) have five yearly reviews.

Over the next five years, the following percentage of rental income will be

reviewed in each financial year, based on the portfolio as at 31 March 2025.

Year ending 31 March

Annual

5 yearly

Total

2026

29%

40%

69%

2027

29%

6%

35%

2028

29%

11%

40%

2029

29%

10%

39%

2030

29%

3%

32%

Over the next 12 months, 18 tenancies, representing 69% of the total rent, will

undergo a rent review.

Of the index-related rents within the portfolio; 68% of the RPI-linked and

CPI-linked rents are subject to collared uplifts, which average 1.6% per

annum and 89% are subject to capped uplifts, which average 3.8% per

annum. 9% of the total indexed income has uncapped RPI increases. Fixed

rent review uplifts average 2.3% per annum.

26

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Purchases and sales

One purchase for £16.5 million and six sales for £12.4 million completed over

the year.

Indexed income review pattern by current income

88%

9%

3%

Sales exchanged / completed since

31 March 2025

Contracts were exchanged in March

2025 for the sale of the leasehold

bowling alley in Doncaster at

valuation and at a net sale yield of

8.4%, and the sale completed on 24

April 2025.

The purchases and sales increased

the portfolio’s weighted average

unexpired lease term to break to 13.3

years from 11.6 years (March 2024).

The sales proceeds were used

towards the purchase of the

Bridgemere Garden Centre and for

partial repayment of a £15 million

loan expiring in March 2026. £6

million of this loan was repaid on 31

January 2025 and £4 million post the

year end on 30 April 2025.

Purchases completed

Garden Centre

– Bridgemere Garden

Centre, near Nantwich (Cheshire).

The purchase of a long-let Garden

Centre investment on a 36.5 acre

site with indexed income completed

in August 2024 at a purchase price

of £16.5 million at a net initial yield

of 6.6%, rising to an estimated 7.8%

in December 2025. It is let to Blue

Diamond Limited on a full repairing

and insuring lease without break to

yearly rental increases in line with

the Retail Prices Index (RPI), capped

at 4% p.a. and collared at 1% p.a.

Sales completed

The sale of six properties completed

during the year for £12.4 million,

5.0% above valuation at an average

net yield of 7.4%. These were four

shorter let industrial properties at

Thurrock (let to Halfords) and the

unindexed, leasehold Fareham (let

to the Local Authority), the shorter

let library and convenience store at

Risca (let to Caerphilly Council and

Tesco), and an overrented long let

London pub, which was sold to the

tenant, Shepherd Neame.

Retail Prices Index -

88%

(26 tenancies)

Consumer Prices Index -

9%

(4 tenancies)

Fixed increases -

3%

(2 tenancies)

27

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Rent collection

100% of all rents were collected during the year to 31 March 2025. The top ten

tenants have 22 leases: Marks & Spencer, Blue Diamond, Ten Entertainment

Group, Premier Inn, Sainsbury’s, Park Resorts, HM Government, Virgin

Active, Co-operative Group and Hollywood Bowl.

One of the smaller tenants in part of the Bowling complex in Coventry,

Pizza Hut, entered into administration in January 2025. The company was

bought out of administration by DC London Pie Ltd, to whom the lease was

assigned. The unit is still trading as a Pizza Hut restaurant and all rents due

have been collected.

Income by tenant %

Marks & Spencer

Blue Diamond

Ten Entertainment Group

Premier Inn

Sainsbury’s

Park Resorts

HM Government

and Local Authorities

Virgin Active

Co-operative Group

Hollywood Bowl

Kier Group

MKM Building Supplies

Winterbotham Darby

Shepherd Neame

Arla Foods

Brake Brothers

Starbucks

Pizza Hut

14%

12%

10%

7%

7%

6%

6%

6%

6%

5%

5%

5%

3%

2%

2%

2%

1%

1%

Fully let

The portfolio is fully let, with no voids (MSCI UK Monthly Property Index void

rate: 12.1%).

28

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Responsible impact based

ESG management

OLIM Property has always taken a

cautious and responsible approach

to managing VIP’s property portfolio,

with environmental impact, social

responsibility and governance

(ESG) taken fully into account in

selecting high quality properties

and suitable tenants for acquisition,

long term management and

disposal. Occupier relationships

are crucial. We engage with our

tenants to understand and establish

sustainable rental levels and grow

future income streams, working

closely with them to address value

add energy performance targets.

Property

Tenant

Sector

% of portfolio

by capital value

Nantwich

Blue Diamond

Garden Centre

12%

Dover

Park Resorts

Caravan Park

7%

Newport,

Isle of Wight

Marks and Spencer

Supermarket

7%

Rayleigh

Marks and Spencer

Supermarket

6%

Garstang

Sainsbury's

Supermarket

6%

Coventry

Tenpin, Pizza Hut

and Starbucks

Bowling

5%

Brentwood

Virgin Active

Health Club

5%

Aylesford

Kier

Industrial/

Warehouse

4%

Alnwick

Premier Inn

Hotel

4%

Catterick

Premier Inn

Hotel

4%

Total

60%

Top 10 properties by capital value

All VIP’s properties are regularly

reviewed, ESG improvements

implemented at appropriate asset

management stages and properties,

such as Fareham, sold where

performance may be negatively

impacted by ESG factors.

Energy Performance

100% of the properties now have

an EPC rating A-C (up from 64% in

2022). We continue to work with

our tenants to upgrade properties

and improve EPC ratings.

29

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Capital value % by sector weighting

29%

8%

12%

23%

13%

12%

Capital value % by region

34%

10%

2%

7%

26%

15%

6%

3%

Sector weighting % by income

27%

12%

3%

12%

23%

16%

7%

Supermarkets -

29%

(9 properties)

Industrial / Warehouse -

23%

(9 properties)

Bowling -

13%

(5 properties)

Health Club

and Caravan Park -

12%

(2 properties)

Garden Centre -

12%

(1 property)

Hotels -

8%

(2 properties)

Pubs -

3%

(2 properties)

North -

34%

(9 properties)

South East -

26%

(6 properties)

East Anglia -

15%

(4 properties)

Midlands -

10%

(3 properties)

South West -

7%

(3 properties)

Scotland -

6%

(4 properties)

London -

2%

(1 property)

Supermarkets -

27%

Industrial / Warehouse -

23%

Bowling -

16%

Health Club

and Caravan Park -

12%

Garden Centre -

12%

Hotels -

7%

Pubs -

3%

30

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Income by lease expiry % (if all break options exercised)

25-30 years

20-25 years

15-20 years

10-15 years

5-10 years

5%

14%

12%

46%

20%

3%

WAULT* 13.3 years if all tenants

exercise their break options

* Weighted Average Unexpired Lease Term

Westbury

31

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Performance and

independent revaluation

Savills’ independent valuation at

31 March 2025 on all 30 properties

totalled £146,000,000, as detailed in

Note 9 to the Financial Statements

on pages 102 to 104 of this Annual

Report, reflecting a net initial

yield of 6.3% after deducting

notional purchase costs (31 March

2024: 6.6%, 30 September 2024:

6.4%). The valuation totals at 31

March 2024 were £138,100,000

and at 30 September 2024

(half-year) £146,150,000.

On a like for like basis, excluding

purchases and sales, the portfolio’s

capital value increased by

1.1% in the first half of the year

and by 1.0% in the second.

All sectors in the portfolio gained

in value, over the year except the

pubs, the health club and caravan

park which were unchanged. The

properties held within the industrial

/ warehouse sector gained in

value by 2.5% over the 12 months

to March 2025, the supermarket

sector also increased by 4.1% over

the year. Each of the bowling and

hotel sectors increased by 0.8%.

Spot annualised rental income at the

year end rose to £9.8 million against

£9.7 million a year before, despite

sales, due mainly to rent increases

over the year delivering rental

growth of 3.2% on all held properties.

There are no empty properties.

The property portfolio has been

further upgraded and its weighted

average unexpired lease term

improved with the sale of six shorter

let properties, which completed for

£12.4 million (four industrials, a

library and convenience store and

an over-rented London pub) with the

net sale proceeds partly reinvested

into the purchase of the long-let

Garden Centre in Nantwich for £16.5

million with an RPI-linked lease.

The property portfolio produced a

total return of 4.8% over the past six

months and 9.0% over the past year

to March, against 3.5% and 6.3% for

the MSCI UK Quarterly Property

Index, the main benchmark for

commercial property performance.

The portfolio’s main drivers of out

performance were an above average

income yield and on the capital front,

no offices or high street shops.

The returns on VIP’s property

portfolio have been above the MSCI

averages by between 1.8% and

3.0% a year over 1, 5, 10, 20 and 38

years. The real returns were behind

the Retail Prices Index over last

year and three and five years but

well above it over longer periods,

with a real total return of over

7.0% a year over 38 years since the

inception of OLIM’s management.

Sarah Martin, Matthew Oakeshott

and Louise Cleary

OLIM Property Limited

10 June 2025

32

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

Property portfolio at 31 March 2025

1. Supermarkets

9

properties

27

%

of rent

9.6

years WAULT

2. Industrial / Warehouse

9

properties

23

%

of rent

9.0

years WAULT

33

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

3. Bowling

5

properties

16

%

of rent

17.8

years WAULT

4. Health Club and Caravan Park

2

properties

12

%

of rent

10.2

years WAULT

Brentwood

Ashford

34

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

MANAGER’S REPORT

CONTINUED

5. Garden Centre

1

property

12

%

of rent

24.4

years WAULT

Nantwich

35

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

6. Hotels

2

properties

7

%

of rent

13.9

years WAULT

Alnwick

7. Pubs

2

properties

3

%

of rent

23.8

years WAULT

London

36

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

BUSINESS REVIEW

This Business Review is intended to

provide an overview of the strategy

and business model of the Company,

as well as the key measures used

by the Directors in overseeing its

management. During the year to 31

March 2025, the Company operated

as an investment trust company

that invested in accordance with the

investment objective and investment

policy outlined on page 38 of this

Business Review. The Company

entered the UK REIT regime on 1

April 2025 following Shareholders’

approval of amendments to the

Articles of Association at the General

Meeting of the Company held on 20

March 2025.

Value and Indexed Property Income

Trust PLC’s (VIP or the Company)

Ordinary Shares are listed on

the Official List and traded on

the Main Market of the London

Stock Exchange. The Company

is registered as a public limited

company in Scotland under

company number SC050366 and

is an investment company within

the meaning of Section 833 of

the Companies Act 2006. The

Company has one class of share.

VIP is a member of the Association

of Investment Companies (AIC).

The Group

During the year under review,

Value and Indexed Property Income

Services Limited (VIS), a wholly

owned subsidiary of the Company,

was authorised by the Financial

Conduct Authority (FCA) to act as the

Company’s Alternative Investment

Fund Manager (AIFM).

VIS delegated its portfolio

management responsibilities to

OLIM Property Limited (OLIM

Property), the Investment Manager

responsible for managing the

property portfolio. With effect

from 8 September 2024, the

Company appointed OLIM Property

as its AIFM, in place of VIS,

with no change to the portfolio

management or fee arrangements.

Capital structure

As at 31 March 2025, and as at the

date of this Annual Report, VIP’s

issued share capital comprised

45,549,975 Ordinary Shares of 10p

each of which 3,536,939 Ordinary

Shares of 10p were held in Treasury.

Each Ordinary Share in issue entitles

the holder to one vote on a show

of hands and, on a poll, to one vote

for every share held and, therefore,

the total number of voting rights in

the Company as at the date of this

Annual Report is 42,013,036.

Share dealing

Shares in VIP can be purchased

and sold in the market through a

stockbroker or regulated investment

platform, or indirectly through

a lawyer, accountant or other

professional adviser. Further

information on how to invest in VIP

is detailed on page 126.

Recommendation of

non-mainstream

investment products

VIP currently conducts its affairs

so that the shares issued by it can

be recommended by independent

financial advisers to ordinary

retail investors in accordance with

the rules of the FCA in relation

to non-mainstream investment

products and intends to do so for the

foreseeable future. VIP’s shares are

excluded from the FCA’s restrictions,

which apply to non-mainstream

investment products, because they

are shares in an investment trust

company. The returns to investors

are based on investments in directly

held property.

37

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

30

Sep

1986

31

Mar

1987

31

Mar

2016

31

Mar

2017

31

Mar

2018

31

Mar

2019

31

Mar

2020

31

Mar

2021

31 Mar

2022

Restated

**

31 Mar

2023

Restated

**

31

Mar

2024

31

Mar

2025

NAV (p)

44.0

55.1

319.0

345.5

330.5

332.5

253.1

271.1

310.9

244.4

213.5

214.7

Share price

(p)

42.0

52.0

221.8

255.0

262.0

251.0

165.0

218.0

239.0

204.5

171.3

183.0

Discount of

share price

to NAV* (%)

4.6

5.6

30.5

26.2

20.7

24.5

34.8

19.6

23.1

16.3

19.8

14.8

Dividend

per share (p)

N/A

1.25

10.5

11.0

11.4

11.8

12.1

12.3

12.6

12.9

13.2

13.8

Total assets

less current

liabilities

(£m)

17.4

24.8

185.5

207.3

200.4

205.6

176.2

177.6

195.0

157.0

143.1

139.2

Financial record

Summary of the year

•

Net Asset Value total return* of 7.1% (2024: -9.7%) over one year and -16.8% (2024: -10.2%) over

three years.

•

Share Price total return* of 15.0% (2024: -10.3%) over one year and -6.3% (2024: -3.2%) over

three years.

•

MSCI UK Quarterly Property Index total return of 6.3% over one year (2024: -1.1%) and -2.9%

(2024: 1.2%) over three years.

•

Dividends for the year up 4.5% - the 38th consecutive year of dividend increases.

•

Dividend yield at 31 March 2025 of 7.5% (2024: 7.7%).

* This is an Alternative Performance Measure (APM) which has been explained in the Glossary on page 127.

** The 2022 and 2023 Financial Statements were restated to correct an error in the calculation of the operating lease asset

brought forward.

38

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

BUSINESS REVIEW

CONTINUED

Investment objective and investment policy

Investment objective

The Company invests directly in UK commercial property to deliver long,

strong, index-related income. The Company aims to achieve long-term, real

growth in dividends and capital value without undue risk.

Investment policy

The Company’s policy is to invest in directly held UK commercial property

and cash or near cash securities. UK directly held commercial property will

usually account for at least 80% of the total portfolio but it may fall below that

level if relative market levels and investment value, or a desired increase in

cash or near cash securities, make it appropriate. The Company will not use

derivatives.

The Company is permitted to invest cash held for working capital purposes

pending re-investment in cash deposits, gilts and money market funds.

The UK commercial property portfolio

The Company will target secure income and capital returns linked to

inflation, mainly through its diversified portfolio of UK property assets,

let or pre-let to a broad range of strong tenants on long leases with rental

growth subject to index-related or fixed increases. The Company has not set

any geographical limits, except that it may invest in all four nations of the

United Kingdom. It has also set no structural limits and expects the portfolio

to be focused on (but not limited to), the industrial/warehouse, supermarket,

roadside and leisure sectors (including for example, caravan parks, pubs,

hotels, garden and bowling centres) income strips and ground rents. Offices

and high street retail properties would not be priority sectors for investment.

In order to manage risk in the portfolio, at the time of purchase, no single

property asset will exceed in value 25% of the Company’s gross asset value

and no single tenant (except UK Government and public sector) will account

for more than 30% of the Company’s total rental income.

Borrowing policy

The Company has a longstanding policy of funding most of the increases

in its property portfolio through the judicious use of borrowings. Gearing

will normally be within a range of 25% and 50% of the total portfolio. The

Company will not raise new borrowings if total net borrowings would then

represent more than 50% of the total assets.

Detail of the Company’s current borrowings, comprising two fixed term

secured loan facilities can be found in Notes 11 and 12 to the Financial

Statements on pages 105 to 107 of this Annual Report.

39

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Performance, results

and dividend

As at 31 March 2025, the Net Asset

Value (NAV) total return over one

year was 7.1% and the Share Price

total return over one year was

15.0%. This compares to the MSCI

UK Quarterly Property Index total

return of 6.3%. Total assets less

current liabilities were £139.2

million. A review of the performance

of the property portfolio is detailed

in the Chairman’s Statement on

pages 8 to 10 and in the Manager’s

Report on pages 11 to 35.

For the year to 31 March 2025,

quarterly dividends of 3.4p per share

were paid as Ordinary Dividends on

25 October 2024, 31 January 2025

and 25 April 2025, respectively.

The Directors have declared a final

dividend of 3.6p per Ordinary Share

(2024: 3.6p) which, if approved by

Shareholders at the 2025 AGM, will

be paid on, or around, 25 July 2025

to Shareholders on the register on

27 June 2025. The ex-dividend date

is 26 June 2025. This final dividend

will be paid as a Property Income

Distribution (PID). This represents an

annual increase in dividends of 4.5%

as compared with the 3.2% and 3.4%

annual increases in the Retail Prices

and Consumer Prices (including

Housing) Indices, respectively,

as at the end of March 2025.

Principal and emerging

risks and uncertainties

The Board has an ongoing process

for identifying, evaluating and

monitoring the principal and

emerging risks and uncertainties

facing the Group and the Parent

Company. The risk register forms

a key part of the Group and the

Parent Company’s risk management

framework used to carry out a robust

assessment of the risks, including a

significant focus on the controls in

place to mitigate them. The principal

and emerging risks and uncertainties

which affect the Group’s and the

Company’s business are:

Property risk

The Group’s commercial property

portfolio is subject to both market

and specific property risk. Since

the UK commercial property

market has been markedly cyclical

for many years, it is prudent

to expect that to continue.

The price and availability of

credit, real economic growth,

and the constraints on the

development of new property, are

the main influences on the property

investment market.

Against that background, the

specific risks to the income from

the portfolio are tenants being

unable to pay their rents and other

charges or leaving their properties

at the end of their leases.

All investment properties held by

the Group are commercial properties

located in the UK, mainly with long-

term, index-related income streams.

All leases are on full repairing and

insuring terms, with upward only

rent reviews, and the weighted

average unexpired lease length to

the break option is 13.3 years. Details

of the tenant and geographical

spread of the portfolio are set out

on pages 27 and 29. The long-term

performance record through the

varying property cycles since 1987

is set out on pages 120 and 121. OLIM

Property is responsible for property

investment management, with

surveyors, solicitors and managing

agents acting on the portfolio under

OLIM Property’s supervision.

40

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

BUSINESS REVIEW

CONTINUED

Market risk

The fair value of, or future cash flows

from, a financial instrument held

by the Group may fluctuate because

of changes in market prices. This

market risk comprises two elements

- price risk and interest rate risk.

Price risk

Changes in market prices (other than

those arising from interest rate or

currency risk) may affect the value of

the Group’s investments.

Interest rate risk

Interest rate movements may affect:

•

the fair value of the investments

in property;

•

the level of income receivable on

cash deposits; and

•

the fair value of borrowings.

The possible effects on fair value

and cash flows that could arise as

a result of changes in interest rates

are taken into account when making

investment and borrowing decisions.

The Board imposes borrowing limits

to ensure that gearing levels are

appropriate to market conditions

and reviews these limits on a regular

basis. Current borrowings comprise

two secured term loans, with one

and eight year terms remaining,

providing secure long-term funding.

It is the Board’s policy to maintain

a gearing level, measured on the

most stringent basis of calculation

after netting off cash equivalents,

of between 25% and 50%.

Liquidity risk

This is the risk that the Group will

encounter difficulty in meeting

obligations associated with its

financial liabilities.

The Group’s assets comprise

investment properties which, by their

nature, are not readily realisable.

The long maturity of the Company’s

mainly fixed rate borrowings helps

mitigate this risk and is detailed

on page 3 of this Annual Report

and in the interest rate risk profile

section of Note 21 to the Financial

Statements on pages 111 to 116.

Political risk

Political changes that result in

parties with extreme political

or social agendas having power

or influence over policies

could lead to instability and

uncertainty in the markets,

legislation and the economy.

The Board reviews regularly

the political situation, together

with any associated changes to

the economic, regulatory and

legislative environment, to ensure

that any risks arising are mitigated

as effectively as possible.

An explanation of certain economic

and financial risks and how

they are managed is contained

in Note 21 to the Financial

Statements on pages 111 to 116.

Climate change and social

responsibility risk

The Board recognises that climate

change is an important risk that

all companies should take into

consideration within their strategic

planning. As referred to elsewhere

in this Strategic Report on pages

28 and 40 and in the Governance

Report on pages 51 and 68 in this

Annual Report, the Company has

little direct impact on environmental

issues. All of the Company’s

properties are let on full repairing

and insuring leases, with the tenants

responsible for complying with

statutory obligations. The Board is

aware that the Manager continues

to take into account environmental,

social and governance (ESG)

matters, and, in particular, Energy

Performance Certificates and flood

risks, in managing the portfolio.

In accordance with the RICS

Professional Standard ‘Sustainability

and ESG in commercial property

valuation and strategic advice’, the

Savills’ valuation of the Company’s

properties takes into consideration

sustainability and ESG factors.

41

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

Economic risk

The valuation of the Company’s

investments may be affected by

underlying economic conditions,

such as fluctuating interest rates,

rising inflation, increased fuel and

energy costs, and the availability of

bank finance. These factors can be

impacted during times of geopolitical

uncertainty and volatile markets,

including pandemics and the ongoing

wars in Ukraine and the Middle East.

The Board monitors the economic

and market environment closely,

and believes that the diverse, well-

spread, long let indexed portfolio

should prove resilient.

Other key risks

Additional risks and uncertainties

include:

•

Discount volatility

: The

Company’s shares may trade at a

price which represents a discount

to its underlying net asset value.

•

Regulatory risk

: The Directors

strive to maintain a good

understanding of the changing

regulatory agenda and consider

emerging issues so that

appropriate changes can be

implemented and developed in

good time. The Group operates

in a complex regulatory

environment and, therefore, faces

a number of regulatory risks. As

an investment trust, a breach of

Section 1158 of the Corporation

Tax Act 2010 would result in

the Company being subject to

capital gains tax on portfolio

investments. Breaches of other

regulations, including but not

limited to, the Companies Act

2006, the FCA Listing Rules,

the FCA Disclosure, Guidance

and Transparency Rules, the

Market Abuse Regulation, the

Packaged Retail and Insurance-

based Investment Products

(PRIIPs) Regulation, the

Second Markets in Financial

Instruments Directive (MiFID II)

and the General Data Protection

Regulation (GDPR), could lead to a

number of detrimental outcomes

and reputational damage. From 1

April 2025, in order to operate as

a UK REIT, the Company requires

to comply with the legislation

contained in Part 12 of the

Corporation Tax Act 2010.

The Company is also required

to comply with tax legislation

under the Foreign Account

Tax Compliance Act and the

Common Reporting Standard.

The Company has appointed its

registrar, Computershare, to act

on its behalf to report annually to

HM Revenue & Customs (HMRC).

The Company’s privacy policy is

available to view on the Company’s

web pages hosted by the Investment

Manager at

www.olimproperty.

co.uk/value-and-indexed-

property-income-trust.html

.

Breaches of controls by service

providers to the Company could

also lead to reputational damage or

loss. The Audit and Management

Engagement Committee monitors

compliance with regulations by

reviewing internal control reports

from the Administrator and from the

Investment Manager.

Alternative investment

fund managers directive

The Alternative Investment Fund

Managers Directive (AIFMD)

introduced an authorisation and

supervisory regime for all managers

of authorised investment funds in

the EU.

In accordance with the requirements

of the AIFMD, the Company

appointed VIS as its Alternative

Investment Fund Manager

(AIFM) and BNP Paribas London

Branch as its Depositary. With

effect from 8 September 2024,

the Company appointed OLIM

Property as its AIFM, in place of

VIS, with no change to the portfolio

management or fee arrangements.

The Board has controls in place,

in the form of regular reporting

from the AIFM and the Depositary,

to ensure that both are meeting

their regulatory responsibilities

in relation to the Company.

42

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

BUSINESS REVIEW

CONTINUED

Key performance

indicators

At each Board Meeting, the Directors

consider a number of performance

measures to assess the Company’s

success in achieving its objectives,

which also enable Shareholders and

prospective investors to gain an

understanding of its business.

A historical record of these

performance measures, with

comparatives, together with the

Alternative Performance Measures

(APMs) are shown in the Summary of

the year and Financial record section

on page 37 of this Business Review.

Definitions of the APMs can be found

in the Glossary on page 127.

The Directors have identified the

following as key performance

indicators:

•

Net Asset Value (NAV) and Share

Price total returns relative to

the MSCI UK Quarterly Property

Index (total returns); and

•

Dividend growth relative to

consumer price inflation.

The NAV total return is considered

to be an appropriate measure of

Shareholder value as it includes

the current NAV per share and the

sum of dividends paid to date.

The medium term dividend policy

is for increases at least in line with

inflation.

The Board reviews the Company’s

rental income and operational

expenses on a quarterly basis, as

the Directors consider that both

of these elements are important

components in the generation

of Shareholder returns. Further

information can be found in

Notes 2 and 4 to the Financial

Statements on pages 97 and 98.

In addition, the Directors will

consider economic, regulatory, and

political trends and factors that may

impact on the Company’s future

development and performance.

Share buy-backs

651,514 Ordinary Shares were bought

back in the year to 31 March 2025

(2024: 347,914 Ordinary Shares

bought back). As at 31 March 2025,

3,536,939 Ordinary Shares of 10p

each were held in Treasury. As at the

date of this Annual Report, no further

shares had been purchased since

the year end. Further information

can be found in Note 14 to the

Financial Statements on page 107.

At the forthcoming AGM, the Board

will seek the necessary Shareholder

authority to continue to conduct

share buy-backs.

Statement of compliance

with investment policy

The Company is adhering to its

stated investment policy and

managing the risks arising from it.

This can be seen in various tables

and charts throughout this Annual

Report, and from the information

provided in the Chairman’s

Statement (pages 8 to 10) and in the

Manager’s Report (pages 11 to 35).

43

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

The Board’s section 172 duty and stakeholder engagement

The Directors recognise the importance of an effective Board and its ability to discuss, review

and make decisions to promote the long-term success of the Company and protect the interests

of its key stakeholders. As required by Provision 5 of The AIC Code of Corporate Governance

(the AIC Code) and, in line with The UK Corporate Governance Code (the Code), the Board has

discussed the Directors’ duty under Section 172 of the Companies Act and how the interests of key

stakeholders have been considered in the Board discussions and decision making during the year.

This has been summarised in the table below:

Form of Engagement

Influence on Board decision making

Stakeholder: Shareholders

AGM – Shareholders are encouraged

to attend the AGM and are provided

with the opportunity to ask questions

and engage with the Directors and the

Manager. Shareholders are also encouraged

to exercise their right to vote on the

resolutions proposed at the AGM (please

refer to the further information on the AGM

in the Directors’ Report on pages 56 and 57).

Shareholder documents – The Company

reports formally to Shareholders by

publishing Annual and Interim Reports,

normally in June and November each year.

Significant matters or reporting

obligations are disseminated to

Shareholders by way of announcement

to the London Stock Exchange.

The Company Secretary acts as a key

point of contact for the Board, and

all communications received from

Shareholders are circulated to the Board.

Other Shareholder events may include

investor and wealth manager lunches

and roadshows organised by the

Company’s Corporate Broker at which

the Manager is invited to present.

Dividend declarations – The Board recognises

the importance of dividends to Shareholders

and takes this into consideration when making

decisions to pay quarterly and propose final

dividends for each year. Further details regarding

dividends for the year under review can be found

in the Chairman’s Statement on pages 8 and 9.

During the year, the Board recognised that the

Company’s deferred tax reserves were being

depleted, without which the Company would need

to pay corporation tax on the income and capital

gains on its property portfolio. As the Board is

conscious of the importance that Shareholders

place on the Company’s dividend policy and,

in line with that policy of reliably growing the

dividend for Shareholders, on 25 February

2025 the Company published a Circular to

Shareholders proposing that from 1 April 2025 the

Company enter the UK REIT regime. At a General

Meeting of the Company held on 20 March 2025,

Shareholders approved a change to the Company’s

Articles of Association, which enabled the

Company to proceed to enter the UK REIT regime.

As referred to in the Chairman’s Statement on

pages 8 and 9 the final dividend in respect of the

year to 31 March 2025, and future dividends, will

be paid as a Property Income Distribution (PID).

Share buy-back policy – the Directors

recognise the importance to Shareholders of

the Company maintaining a share buy-back

policy and considered this when establishing

the current programme. Further details can

be found in this Business Review on page 42

and in the Directors’ Report on page 57.

44

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

BUSINESS REVIEW

CONTINUED

Form of Engagement

Influence on Board decision making

Stakeholder: Manager

Quarterly Board Meetings – The Manager

attends every Board Meeting and

presents a detailed portfolio analysis

and reports on key issues, including the

performance of the property portfolio.

The Directors challenge the Manager where

they feel it is appropriate.

The Directors and the Manager are cognisant of

the Company’s investment policy and the strategy

agreed by the Board, which the Manager has been

tasked with implementing.

The Board engages constructively with the

Manager to ensure investments are consistent

with the agreed strategy and investment policy and

supported the decision during the year to improve

the portfolio by the sale of six properties, including

four shorter let industrial units, a short let library/

convenience store in Wales and an over-rented

London pub, together with the acquisition of the

Bridgemere Garden Centre. Further details can be

found in the Manager’s Report on page 26.

The Board also supported the Manager’s

proposal to repay during the year under review

£6 million of borrowings, with a further £4

million of borrowings repaid post the year end,

in respect of the loan due to expire in 2026.

Further details can be found in the Highlights

of the Year and REIT Conversion on page 3 of

this Annual Report and in Notes 11 and 24 to the

Financial Statements on pages 105, 106 and 117.

The Manager works closely with all tenants and, as

a result, 100% of all rents due were collected in the

year to 31 March 2025.

Stakeholder: Corporate Broker

The Corporate Broker attends Board

Meetings regularly to present an update on

the market and the Company’s performance,

in comparison with the performance of the

Company’s peers.

Shareholder communication and feedback from

the Broker directly influences the Board’s review

of strategy, the asset allocation considerations, and

the Manager’s guidance on desirable investment

characteristics.

Since the REIT regime was introduced in

2007, almost all listed UK property investment

companies have adopted REIT status and feedback

from the Broker also influenced the Board’s

decision to propose to Shareholders that the

Company convert to a REIT.

Stakeholder: Depositary and Custodian

Regular statements and control

reports received, with all holdings

and balances reconciled.

The Directors review the performance of all third

party service providers, including oversight of

securing the Company’s assets.

Stakeholder: Advisers & Registrar

The Company relies on the expert audit,

accounting and legal advice received

from its Auditor, Administrator and

Legal Advisers. The Directors ensure

that all advisers and the registrar are

a market leaders in the services they

provide to the Company’s Shareholders.

The Directors review the performance of all

third party service providers and recommend

that Shareholders vote in favour of the re-

appointment of RSM UK Audit LLP as Auditors

to the Company at the 2025 AGM.

45

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

There were no other key decisions made in the year to 31 March 2025 that

require to be disclosed.

Future strategy

The Board and the Investment

Manager intend to maintain the

strategic policies set out above for

the year to 31 March 2026 as it is

believed that these are in the best

interests of Shareholders.

The Company’s Viability Statement

is included in the Directors’ Report

on page 50.

Approval

This Business Review, and the

Strategic Report as a whole, was

approved by the Board of Directors

and signed on its behalf by:

John Kay

Chairman

10 June 2025

Employee, environmental

and human rights policy

As an investment trust company, the

Company has no direct employee

or environmental responsibilities,

nor is it responsible for the emission

of greenhouse gases. Its principal

responsibility to Shareholders

is to ensure that the investment

portfolio is properly managed and

invested. The Company has no

employees and, accordingly, has no

requirement to report separately

on employment matters.

Management of the investment

portfolio is undertaken by the

Investment Manager through

members of its portfolio

management team. In light of the

nature of the Company’s business,

there are no relevant human rights

issues and, therefore, the Company

does not have a human rights policy.

Independent auditor

The Company’s Independent Auditor

is required to report if there are any

material inconsistencies between

the content of the Strategic Report

and the Financial Statements. The

Independent Auditor’s Report can be

found on pages 75 to 83.

York

Governance

Report

47

48

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

DIRECTORS’ DETAILS

John Kay

Sir John Kay is an economist

specialising in the application

of economics to business issues.

He has been chairman of London

Economics, has held chairs at the

London Business School and Oxford

University and was a director of

Scottish Mortgage Investment

Trust. John was knighted in the

Queen’s 2021 Birthday Honours List

for services to economics, finance

and business. He was appointed

as a Director on 4 February 1994

and as Chairman on 8 July 2022

and is a member of the Audit and

Management Engagement and

Nomination Committees. As referred

to in the Chairman’s Statement, John

will retire at the conclusion of the

2025 AGM.

Matthew Oakeshott

Matthew Oakeshott, after studying

economics at Oxford University and

a period as special adviser to Mr Roy

Jenkins as Home Secretary, joined

S.G.Warburg & Co in 1976 and became

a director of Warburg Investment

Management in 1978. He was

Investment Manager of Courtaulds

Pension Fund from 1981 to 1985. He is

chairman of OLIM Property Limited,

which manages the Company’s

property portfolio. Matthew is one of

the original founders of VIP having

served previously on the Board from

1 April 2007 to 1 April 2019. He was

re-appointed as a Director on 10

September 2020.

Lorraine Reader

Lorraine Reader was appointed

as a Director on 1 August 2024.

She is a Partner and head of the

London real estate team at legal

firm DLA Piper UK LLP. After

graduating from Cardiff University,

Lorraine joined Freeths in 1997

as a trainee, qualifying as an

associate solicitor in the real estate

team in May 2000. Lorraine is a

member of the Company’s Audit

and Management Engagement

and Nomination Committees.

David Smith

David Smith retired from the legal

firm Shepherd and Wedderburn

LLP in 2008 where he was a

partner for 34 years, specialising

in commercial property. He was

appointed as a Director on 10 July

2009 and currently chairs the Audit

and Management Engagement and

Nomination Committees. Following

the retirement of John Kay at the

conclusion of the 2025 AGM, David

will assume the role of Chairman.

Jo Valentine

Baroness Josephine Valentine

was appointed as a Director on 13

November 2020. She is a crossbench

member of the House of Lords and

other current roles include chair

of Heathrow Southern Railway

and an executive at Business in the

Community. Previous roles have

included chief executive of London

First; investment banker at Barings

Bank; head of corporate finance and

planning at The BOC Group; National

Lottery commissioner; member

of the Board of Governors for The

Peabody Trust, a London housing

association; a non-executive director

of HS2 and Crossrail; and board

member of a Triple Point VCT. Jo is

the Company’s Senior Independent

Director and a member of the Audit

and Management Engagement

and Nomination Committees.

Lucy Winterburn

Lucy Winterburn was appointed

as a Director on 1 August 2022. She

was formerly a Director at Savills

Investment Management where she

was the discretionary Fund Manager

for a FTSE 100 Corporate Pension

Fund for over 15 years. Lucy took the

decision to leave Savills Investment

Management towards the end of

2024 and has since launched an

Asset and Development Management

business trading as Mortimer

RE Limited alongside two other

founding partners. She is a Chartered

Surveyor and a graduate of Aberdeen

University. Lucy is a member of the

Company’s Audit and Management

Engagement and Nomination

Committees, and at the conclusion

of the 2025 AGM will be appointed

as Chair of these Committees.

49

Value and Indexed Property Income Trust PLC

• Annual Report and Financial Statements 2025

DIRECTORS’ REPORT

The Directors submit their report together with the Financial Statements

of the Group and the Company for the year to 31 March 2025. A summary of

the financial results for the year can be found in the Summary of the year

and Financial record in the Business Review on page 37. Details of the final

dividend for the year are set out in the Chairman’s Statement and in the

Business Review within the Strategic Report. The Statement of Corporate

Governance, which forms part