REGISTERED NUMBER: |
| Report of the Directors and |
| Financial Statements for the Year Ended 30 September 2024 |
for |
| The Association of Real Estate Funds |
REGISTERED NUMBER: |
| Report of the Directors and |
| Financial Statements for the Year Ended 30 September 2024 |
for |
| The Association of Real Estate Funds |
The Association of Real Estate Funds (Registered number: 04601584) |
Contents of the Financial Statements |
for the Year Ended 30 September 2024 |
Page |
Company Information | 1 |
Report of the Directors | 2 |
Report of the Independent Auditors | 5 |
Income Statement | 9 |
Balance Sheet | 10 |
Notes to the Financial Statements | 11 |
The Association of Real Estate Funds |
Company Information |
for the Year Ended 30 September 2024 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
30 Old Bailey |
London |
EC4M 7AU |
The Association of Real Estate Funds (Registered number: 04601584) |
Report of the Directors |
for the Year Ended 30 September 2024 |
The directors present their report with the financial statements of the company for the year ended 30 September 2024. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 October 2023 to the date of this report. |
Other changes in directors holding office are as follows: |
The Association of Real Estate Funds (Registered number: 04601584) |
Report of the Directors- continued |
for the Year Ended 30 September 2024 |
BUSINESS REVIEW AND FUTURE DEVELOPMENTS |
During the year, AREF continued to issue membership subscriptions to full, affiliate and associate members. At 30 September 2024, there were 50 full members (2023: 51), 45 affiliate members (2023: 45) and 5 associate members (2023: 5). |
We did see a small number of member resignations last year, the majority of which came from long-anticipated fund closures or ownership changes. We also gained a number of members, particularly affiliates. There have been some membership changes since the year- end which have led to a sight loss of membership overall but have not had a material impact on AREF's finances. |
Last year we signaled that we would be looking at a range of solutions that would allow us to secure operational efficiencies. Accordingly, in August 2024 we completed our move away from the Investment Association as a provider of business services and accommodation. We have procured our own service providers and moved to a serviced office, making significant cost savings. This has also greatly increased team cohesion and morale. |
With the pandemic long behind us, we remain settled in a hybrid online/in-person pattern for events and committees, although we notice a continuing increase in people attending in-person. Recordings are now available for most of our panel events and these are proving a popular way of accessing our content for those unable to attend at the time. A full report on all our many activities during the year and the work of the committees is available on the website. As ever the board is very grateful for all the time given by the membership in helping make AREF the voice of the UK fund management industry. |
Post-election there is a new energy in the UK policy-making world and AREF's level of engagement with policy makers has grown significantly. There is a focus on removing the obstacles to achieving the government's homebuilding target, and we have been involved, along with other bodies, in a number of discussions with Homes England and MHCLG on the topic. The problem is multifaceted and systemic, but we believe that Government at least now has a strong understanding of what needs to be addressed. |
The challenge of enabling UK DC pension funds to gain access to real estate and other illiquid assets remains. Members are active in developing solutions and we can see progress being made over the past year. Our engagement with policymakers has continued to receive strong support from members and is an important member benefit. |
Challenges in the UK real estate funds market remain. The decline in the daily traded retail sector has effectively stopped, if only because most of the remaining funds have converted to a hybrid structure. They remain as AREF members. The decline in property holdings by defined benefit schemes has slowed but continues. We expect to see a reduction in the number of balanced open-ended funds in the coming years, alongside a growth in the number of small specialist funds, particularly in the residential sector. The balance of AREF's membership can be expected to change accordingly in the coming years as these structural changes play out. We continue to work on growing our membership among new funds in the residential sector. |
The factors outlined above have resulted in a broadly net neutral effect on AREF's finances. We expect to make a small loss in the 2024-2025 financial year but our reserves remain at an adequate level. |
Lastly, AREF's Board is at the early stage of discussions with the Boards of two fellow UK property trade associations, the British Property Federation and the Investment Property Forum, about the possible creation of a new body to represent the UK real estate industry. All three organisations have worked closely together for many years and the discussion will continue throughout the year. In the meantime all three organisations are conducting business as usual for 2025. |
DIRECTORS' INDEMNITY |
The directors have been covered by third party liability insurance throughout the year end and the policy of insurance remains in force. |
The Association of Real Estate Funds (Registered number: 04601584) |
Report of the Directors- continued |
for the Year Ended 30 September 2024 |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
|
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
| So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Forvis Mazars LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
The company has taken an exemption from preparing the Strategic Report in accordance with S414B of the Companies Act 2006. |
This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies. |
ON BEHALF OF THE BOARD: |
Independent Auditor's Report |
The Association of Real Estate Funds |
Opinion |
We have audited the financial statements of The Association of Real Estate Funds (the 'company') for the year ended 30 September 2024 which comprise the Income Statement, Balance Sheet and notes to the Financial Statements, including a summary of significant accounting policies. |
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In ou opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 30 September 2024 and of its deficit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The other information comprises the information included in the Report of the Directors, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extend otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. |
We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Report of the Directors has been prepared in accordance with applicable legal requirements. |
Independent Auditor's Report |
The Association of Real Estate Funds |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from |
branches not visited by us; or |
- the financial statements are not in agreement with the accounting records and returns; or |
- certain disclosures of directors' remuneration specified by law are not made; or |
- we have not received all the information and explanations we require for our audit; or |
- the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the Report of the Directors and from the requirement to prepare a Strategic Report, |
Responsibilities of directors |
As explained more fully in the statement of directors' responsibilities set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Independent Auditor's Report |
The Association of Real Estate Funds |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. |
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. |
Based on our understanding of the company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: UK tax legislation, anti- bribery and anti- money laundering regulation. |
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non- compliance, our procedures included, but were not limited to: |
- Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations; |
- Inspecting correspondence, if any, with relevant licensing or regulatory authorities; |
- Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non- compliane throught our audit; and |
- Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud. |
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, the Companies Act 2006. |
In addition, we evaluated the directors' and management's incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to revenue recognition, and significant one-off or unusual transactions. |
Our audit procedures in relation to fraud included but were not limited to: |
- Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud; |
- Gaining an understanding of the internal controls established to mitigate risks related to fraud; |
- Discussing amongst the engagement team the risks of fraud; and |
- Addressing the risks of fraud through management override of controls by performing journal entry testing. |
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non- detection of irregularities, as there may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Independent Auditor's Report |
The Association of Real Estate Funds |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
30 Old Bailey |
London |
EC4M 7AU |
The Association of Real Estate Funds (Registered number: 04601584) |
Income Statement |
for the Year Ended 30 September 2024 |
30.9.24 | 30.9.23 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales | ( | ) | ( | ) |
GROSS SURPLUS |
Administrative expenses | ( | ) | ( | ) |
OPERATING DEFICIT | 5 | ( | ) | ( | ) |
Interest receivable and similar income |
DEFICIT BEFORE TAXATION | ( | ) | ( | ) |
Tax on deficit | 6 | ( | ) | ( | ) |
DEFICIT FOR THE FINANCIAL YEAR | ( | ) | ( | ) |
The Association of Real Estate Funds (Registered number: 04601584) |
Balance Sheet |
30 September 2024 |
30.9.24 | 30.9.23 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 7 |
Tangible assets | 8 |
CURRENT ASSETS |
Debtors | 9 |
Cash at bank | 10 |
CREDITORS |
Amounts falling due within one year | 11 | ( | ) | ( | ) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
RESERVES |
Income and expenditure account | 12 |
The financial statements were approved by the Board of Directors and authorised for issue on |
The Association of Real Estate Funds (Registered number: 04601584) |
Notes to the Financial Statements |
for the Year Ended 30 September 2024 |
1. | STATUTORY INFORMATION |
The Association of Real Estate Funds is a |
From 1st October 2024 to 2nd September 2024 the company's registered office address was Camomile Court, 23 Camomile Street, London EC3A 7LL. |
The principal activity of the company is to be a representative body for managers and sponsors of real estate funds. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The company is in discussions with two other associations to form a new organisation, which in the directors' |
opinion will not negatively affect the company's financial situation. The directors believe that the use of the going concern basis of accounting is appropriate because there are no material uncertainties related to events or conditions that may cast significant doubt over the ability of the company to continue as a going concern. |
Turnover |
| Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
| Turnover comprises revenue recognised by the company in respect of services supplied, exclusive of Value Added Tax and trade discounts. |
| Deferred Income |
| Revenue is generally invoiced in advance of the period it relates to. It is apportioned evenly over the period in which it relates to, mainly over twelve months; the portion of income relating to future periods is deferred. |
| Rendering of services |
| Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when both of the following conditions are satisfied: |
| - the amount of revenue that can be measured reliably; |
| - it is probable that the company will receive the consideration due under the contract. |
Intangible assets |
| Intangible fixed assets are stated at historical cost less amortisation and any accumulated impairment losses. |
| Amortisation is charges to allocate the cost of assets less their residual value over their estimated useful lives, under the straight line method. Amortisation is provided under the following basis: |
| Software development: Straight line over 3 years |
| The assets' residual values, useful lives and depreciation and amortisation methods are reviewed, and adjusted if appropriate, if there is an indication of a significant change since the last reporting date. |
The Association of Real Estate Funds (Registered number: 04601584) |
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2024 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
| Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
| Depreciation is charged to allocate the cost of assets less their residual value over their estimated useful lives, under the straight line method. Depreciation is provided under the following basis: |
| Computer equipment - Straight line over 3 years |
Financial instruments |
| The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors. |
| Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account. |
| Derecognition of financial assets and liabilities |
| Financial assets are derecognised when and only when (a) the contractual rights to the cash flows from the financial asset expire or are settled, (b) the company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or (c) the company despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party. Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires. |
| Interest Income |
| Interest Income is recognised in the profit and loss account using the effective interest method. |
Taxation |
| Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
| Current or deferred taxation assets and liabilities are not discounted. |
| Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
| Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
| Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
| Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Pension costs and other post-retirement benefits |
| The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
The Association of Real Estate Funds (Registered number: 04601584) |
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2024 |
2. | ACCOUNTING POLICIES - continued |
Critical accounting judgements and key sources of estimation uncertainty |
The preparation of the company's financial statements requires the directors to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the reporting date. The estimates and associated assumptions are based on historical experience, expectations of future events and other factors that are considered to be relevant. |
However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asses or liabilities affected. |
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
There were no key sources of estimation uncertainty and no critical accounting judgements were made during the year. |
3. | TURNOVER |
| Total revenue is made up of the following: |
| 2024 | 2023 |
| Membership | £ | £ |
| Full membership | 615,825 | 609,817 |
| Affiliate membership | 254,666 | 234,508 |
| Associate membership | 27,867 | 24,583 |
| 898,358 | 868,908 |
| Events |
| Annual Dinner | 95,363 | 97,950 |
| Miscellaneous | 107,983 | 44,800 |
| 203,346 | 142,750 |
| 1,101,704 | 1,011,658 |
4. | EMPLOYEES AND DIRECTORS |
| The Average number of employees during the year was 0 (2023:0). |
| In September 2024 the company directly employed 7 individuals, 3 of whom are directors. Prior to September 2024, these 7 individuals were employed by The Investment Association, with 5 of those being seconded to the company and their salaries were recharged by The Investment Association. (2023: 3). |
| During the one month of direct employment, the remuneration paid to the 3 directors by the company directly was £20,800. (2023: £0) |
5. | OPERATING DEFICIT |
The operating deficit is stated after charging: |
30.9.24 | 30.9.23 |
£ | £ |
Depreciation - owned assets |
Software development amortisation |
Auditors' remuneration |
Other fees paid to auditors |
The Association of Real Estate Funds (Registered number: 04601584) |
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2024 |
6. | TAXATION |
Analysis of the tax charge |
The tax charge on the deficit for the year was as follows: |
30.9.24 | 30.9.23 |
£ | £ |
Current tax: |
UK corporation tax |
Tax on deficit |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
30.9.24 | 30.9.23 |
£ | £ |
Deficit before tax | ( | ) | ( | ) |
Deficit multiplied by the standard rate of corporation tax in the UK of (2023 - | ( | ) | ( | ) |
Effects of: |
Expenses not deductible for tax purposes |
Income not taxable for tax purposes | ( | ) | ( | ) |
Adjustments to tax charge in respect of previous periods |
Fixed asset differences | - | 430 |
Total tax charge | 2,542 | 651 |
7. | INTANGIBLE FIXED ASSETS |
Software |
development |
£ |
COST |
At 1 October 2023 |
and 30 September 2024 |
AMORTISATION |
At 1 October 2023 |
Amortisation for year |
At 30 September 2024 |
NET BOOK VALUE |
At 30 September 2024 |
At 30 September 2023 |
The Association of Real Estate Funds (Registered number: 04601584) |
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2024 |
8. | TANGIBLE FIXED ASSETS |
Computer |
equipment |
£ |
COST |
At 1 October 2023 |
Additions |
At 30 September 2024 |
DEPRECIATION |
At 1 October 2023 |
Charge for year |
At 30 September 2024 |
NET BOOK VALUE |
At 30 September 2024 |
At 30 September 2023 |
9. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
30.9.24 | 30.9.23 |
£ | £ |
Trade debtors |
VAT receivable | 72,410 | 80,638 |
Prepayments |
| Short term debtors are measured at transaction price, less any impairment. |
10. | CASH AT BANK |
30.9.24 | 30.9.23 |
£ | £ |
Cash at bank | 604,532 | 679,845 |
Cash is represented by deposits with financial institutions repayable without penalty on notice of not more than 24 hours. |
11. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
30.9.24 | 30.9.23 |
£ | £ |
Trade creditors |
Tax |
Social security and other taxes |
Other creditors |
Pension | 6,291 | - |
Deferred income |
Accruals |
The Association of Real Estate Funds (Registered number: 04601584) |
Notes to the Financial Statements - continued |
for the Year Ended 30 September 2024 |
12. | RESERVES |
Income |
and |
expenditure |
account |
£ |
At 1 October 2023 |
Deficit for the year | ( | ) |
At 30 September 2024 |
13. | POST BALANCE SHEET EVENTS |
| There are no post balance sheet events after the reporting date requiring disclosure. |
14. | COMPANY STATUS- LIMITED BY GUARANTEE |
The company is a private company limited by guarantee and consequentially does not have any share capital. Each of the full members are liable to contribute an amount not exceeding £1 towards the assets of the company in the event of liquidation. |
15. | RELATED PARTY TRANSACTIONS |
There were no related party transactions other than the following: |
2024 | 2023 |
£ | £ |
Edmund Crasto | 0 | 17,365 |
Paolo Alonzi Consulting Ltd | 950 | 8,550 |
William Hill Consulting Ltd | 0 | 16.683 |
Edmund Craston invoiced for services as an Independent Non- Executive Director. Paolo Alonzi Consulting Ltd invoiced for services of Paolo Alonzi as a consultant. |
William Hill Consulting invoiced for services of William Hill as an Independent Non- Executive Director. As at 30 September 2024 nil was due to Paolo Alonzi Consulting Ltd (2023: £2,123) and nil was due to William Hill Consulting Limited (2023: £4,800). No balances due to the other related party (2023:nil). |