This Appendix sets out the additional disclosure requirements relating to companies which own property, carry out property related transactions or are primarily engaged in property activities.

A property company which is listed or seeking a listing must also comply with the rules laid out in this Appendix in addition to all other relevant listing rules.

Definitions

The following definitions apply :

(1) "Property Company" is a company primarily engaged in property activities and includes Closed-Ended Schemes as defined in Bye-law 9.45. Property activities include :

(a) the holding of properties and the development of properties for letting and retention as investments; or

(b) the purchase or development of properties for subsequent sale; or

(c) both of the above.

(2) "Property" means freehold, heritable or leasehold property.

(3) "Net Annual Rent" is the current income or income estimated by the valuer :

(a) ignoring any special receipts or deductions arising from the property;

(b) excluding Value Added Tax (where applicable) and before taxation (including tax on profits and any allowances for interest on capital or loans); and

(c) after making deductions for superior rents (but not for amortisation) and any disbursements including, if appropriate, expenses of managing the property and allowances to maintain it in a condition to command its rent.

(4) "Published valuation" is the valuation whether produced independently or by the directors, referred in the company's latest Annual Report and Accounts or the most recent Listing Particulars published since the latest published Annual Report and Accounts.

(5) "Book value of properties" is the value of the company's properties, excluding any property classified as current assets of the company and before deduction of mortgages or borrowings as shown in the latest Annual Report and Accounts.

General

(1) A Valuation must be obtained by :

(a) a new applicant if it is a property company;

(b) an issuer of securities if it makes an acquisition or disposal of property;

(c) an issuer issuing debt securities which are to be listed and which are secured on property; and

(d) an issuer which makes significant reference to the valuation of property in Listing Particulars.

(2) Where a valuation is required under (1) above, the Listing Particulars must include a Valuation Report.

(a) The Report, which must be carried out by an external and independent valuer unless otherwise approved by the Exchange, must contain the following details in respect of each property :

(i) address;

(ii) nature of valuer's inspection;

(iii) a brief description (e.g. land or buildings, approximate site and floor area);

(iv) existing use (e.g. shops, officers, factories, residential);

(v) relevant planning permissions;

(vi) any material contravention of statutory requirements;

(vii) tenure (i.e. freehold or leasehold, providing unexpired term);

(viii) main terms of tenant's leases or underleases (including repairing obligations);

(ix) approximate age of buildings;

(x) present capital value in existing state;

(xi) terms of any intra-group lease on property occupied by the group (identifying the properties) to the extent that such leases are taken into account;

(xii) any other matters which materially affect the value; and

(xiii) sources of information and verification.

Furthermore, the valuation must

(xiv) state the name, address and qualifications of the valuer;

(xv) be dated and state the effective date of valuation of each property which unless otherwise agreed to by the Exchange must not be more than sixty (60) days prior to the date of publication of the Listing Particulars;

(xvi) state that the valuation is based on open market value or open market value for existing use or if necessary, depreciated replacement cost subject to profitability;

(xvii) state any assumption on which the valuation is based and where open market value is the basis of the valuation, identify any qualifying words to be applied to the definition of open market value and state reasons for the adoption of such qualification;

(xviii) divide the valuation between freehold, long leasehold (over fifty (50) years) and short leasehold properties;

(xix) in those cases where directors or promoters have had an interest in any acquisitions or disposals of any of the properties during the two (2) years preceding the valuation, then details of the nature and extent of such interest as well as the date and the prices paid or received or other terms on which the transactions were effected, must also be included. In such cases, the information required must be provided by the directors to the valuer for this purpose; and

(xix) identify any other matter which the valuer considers relevant for the purposes of the valuation.

Property in the course of development

(1) Where the valuation is in respect of property currently being developed the following additional information must also be supplied in the Valuation Report :

(a) whether planning permits have been obtained and if so the date of the permits and whether there are any material or onerous conditions attached to the issue of such permits;

(b) the date when the development is expected to be completed and any estimate of letting or occupation dates;

(c) the estimated total cost by date of completion including without limitation the cost of financial carrying charges, letting commissions and other ancillary costs;

(d) the open market value of the property in its existing state at the date of valuation; and

(e) the estimated capital valued at current prices and the basis of current market conditions :

(i) after development has been completed; and

(ii) after development has been completed and the property has been let.

Property held for Development

(1) Where property is held for future development, the valuation certificate must contain the following additional information so far as it is known and to the extent that it is relevant at the valuation date:

(a) whether or not the relevant planning permits have been applied for, whether such application has been granted or refused and the date of such grant or refusal;

(b) the nature of the proposed development;

(c) an indication of the time frame within which it would be reasonable to expect development to commence; and

(d) the estimated total cost of the development including without limitation the cost of financial carrying charges, letting commissions and other ancillary costs.

Valuation of property for business use

(1) A property which is occupied for the purpose of a business should be valued at existing use value. Where open market value for an alternative use significantly exceeds this basis, the alternative use valuation must be stated in the valuation certificate together with the directors' estimate of the costs of cessation and removal of the business. On the other hand, where the alternative use value is significantly lower than the existing use value and the existing use value is no longer appropriate, then the alternative use valuation must be stated in the Valuation Report.

Overseas Premises

(1) If the company owns any overseas property, then this property must be shown separately in the Valuation Report and the basis of valuation clearly identified.

Rentals used in Valuations

(1) In respect of each property rented out by the company, the net annual rent and the estimated annual rent (based on the current open market rental value) at a specified future date must be included in the Valuation Report.

Summary of Valuations

(1) The Valuation Report must include a summary of the number of properties and the aggregate of their valuations must be split to show the separate total for the freehold and the leasehold properties. Negative values must be shown separately and nor aggregated with the other valuations. Separate totals must be given for :

(a) properties valued on an open market basis;

(b) properties valued on an existing use value basis;

(c) properties valued on a depreciated replacement cost basis; and

(d) for any overseas property.

Continuing Obligations

(1) In addition to their continuing obligations as listed Schemes, property companies must also provide for regular independent valuations of their property portfolio after listing as agreed to with the Exchange.