The Directors present their annual report and audited financial statements for CIM Manchester Holdings Limited (the "Company") for the year ended 31 December 2024.
In preparing this report, the Company has taken advantage of the exemption provided by section 414B of the Companies Act 2006 in not preparing a Strategic Report under the small companies exemption.
The results for the year are set out on page 7. The Company made a profit before taxation of £1,114,344 (2023: £43,500 loss), of which £1,149,603 (2023: £nil) arose from a fair value gain on the revaluation of investment property under development.
No ordinary dividends were paid. The Directors do not recommend payment of a final dividend.
Business performance
The Company has made significant progress in the development of the purpose-built student housing investment asset in Manchester. The project remains on track for completion by August 2026.
The project is fully funded through a combination of equity combined with third party debt.
The Directors who held office during the year and up to the date of approval of the financial statements were as follows:
The Directors are confident the Company will achieve stable revenue once the accommodation achieves practical completion. Focus is now on completing the development by August 2026, in order to open in time for the next academic year.
Going concern
The financial statements have been prepared on a going concern basis, which assumes the Company will be able to meet its liabilities as and when they fall due for the period to 30 June 2026. As at 31 December 2024, the Company has net current liabilities of £4,134,875 (2023: £1,544,906 net current assets) and net assets of £19,804,605 (2023: £1,544,906).
To conclude on the ability of the Company to continue as a going concern the Directors have prepared a robust forecast of the anticipated operational outgoings of the Company from the date of approval of the financial statements through to 30 June 2026 (the 'going concern period') which considers severe but plausible downside risks. In preparing the cash flow forecast for the Company over the going concern period, the Directors have considered all known operational expenses and capital commitments. The Company has financing facilities which with associated commitments from Cl Student Strat 1 LP provides the Company with sufficient callable commitments to meet the financial obligations of the Company through the going concern period. As there is no formal commitment to the Company in terms of equity, a letter of support has been received from CIM Zenith UK Holdings Limited which in turn has received a letter of support from CIM Zenith Master Holdings Limited and which in turn is supported by Cl Student Strat 1 LP. The Directors believe that the letters of support provided to the Company are sufficient to cover all working capital requirements including in the event of severe but plausible circumstances. The letters of support are not a guarantee or formal financial commitment however the Directors believe that the risks that the shareholders will not provide support is remote. The Directors therefore consider it appropriate to prepare the Company's accounts on a going concern basis for the going concern review period to 30 June 2026.
Auditor
Ernst & Young LLP were re-appointed as auditor to the Company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Details of any events after the reporting date are set out in note 18.
We have audited the financial statements of CIM Manchester Holdings Limited (the ‘Company’) for the year ended 31 December 2024 which comprise the Income Statement, the Statement of Financial Position, the Statement of Changes in Equity and the related notes 1 to 18, including material accounting policy information. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 101 “Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for 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 12 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. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern.
Other information
The other information comprises the information included in the annual report, 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 extent otherwise explicitly stated in this 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 the 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 our audit:
the information given in the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Directors' report has been prepared in accordance with applicable legal requirements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
Our approach was as follows:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are the Companies Act 2006, those relating to its reporting framework being the United Kingdom Generally Accepted Accounting Practice and any relevant direct and indirect tax compliance regulation in the United Kingdom.
We understood how the Company is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of minutes of board meetings of the Company as well as validating how policies and procedures in these areas are communicated and monitored. We also reviewed any correspondence with relevant authorities.
We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by making enquiries of management and those charged with governance. Where the risk was considered to be higher, we performed audit procedures in response to the identified fraud risks. These procedures included testing of specific accounting journal entries and focused testing on valuation of investment properties (including the involvement of specialists). These procedures were designed to provide reasonable assurance that the financial statements were free from fraud and error. We also considered management’s incentives around improving the performance of the Company, the opportunities available to execute any such actions through management override as well as the controls that the Company has established to address any such risks identified, including to prevent, deter and detect fraud and the monitoring of such controls by management.
Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved supplementing our enquiries of management and those charged with governance as well as review of board meeting minutes of the Company.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s member, 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 member 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 member, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
The Company has no other comprehensive income for the current financial year other than the results above and, therefore, no statement of other comprehensive income is presented.
The financial statements include the notes presented in pages 10-19.
CIM Manchester Holdings Limited is a private company limited by shares registered in England and Wales and incorporated in the United Kingdom under the Companies Act 2006. The principal activity of the Company is the development and operation of student accommodation. The immediate parent company is CIM Zenith UK Holdings Limited, the ultimate parent undertaking is CI Student Strat 1 LP, an entity registered in Jersey.
The registered office of the Company was changed to 72 Welbeck Street, London, England, W1G 0AY on 23 April 2024 (previously 116 Upper Street, London, N1 1QP). The date of incorporation was 23 June 2023.
The comparatives are presented for the period 23 June 2023, being the date of incorporation, to 31 December 2023.
The financial statements are prepared in sterling, which is the functional currency of the Company. The financial statements have been prepared under the historical cost convention with the exception of investment property under development, which is measured at fair value through profit or loss. Monetary amounts in these financial statements are rounded to the nearest £.
Summary of disclosure exemptions
The preparation of financial statements in conformity with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.
The following exemptions from the requirements of UK Adopted International Accounting Standards have been applied in the preparation of these financial statements, in accordance with FRS 101:
• IFRS 7, ‘Financial instruments: Disclosures’.
• Paragraph 38 of IAS 1, ‘Presentation of financial statements’ – comparative information requirements in respect of paragraph 79(a)(iv):
• The following paragraphs of IAS 1, ‘Presentation of financial statements’:
- 10(d) (statement of cash flows)
- 16 (statement of compliance with all IFRS)
- 38A (requirement for minimum of two primary statements, including cash flow statements)
- 38B-D (additional comparative information)
- 111 (cash flow statement information); and
- 134-136 (capital management disclosures)
• IAS 7, ‘Statement of cash flow’.
• Paragraph 17 of IAS 24, ‘Related party disclosures’ (key management compensation).
• The requirements in IAS 24, ‘Related party disclosures’, to disclose related party transactions entered into between two or more members of a group.
• Paragraphs 30 and 31 of IAS 8, ‘Accounting Policies, Changes in Accounting estimates and Errors’.
• IFRS 13 'Fair Value Measurement: Disclosures'.
• IAS 40, 'Investment property: comparative disclosures'.
Where relevant, these disclosures have been made in the financial statements of CIM Zenith UK Holdings Limited, in which the Company is consolidated, which are publicly available and can be obtained as set out in note 16. Details of the parent entity are given in note 16 to the financial statements.
New and amended accounting standards that have been issued but are not yet effective
At the date of authorisation of these financial statements, the Company has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective:
- Amendments to IAS 21 Lack of Exchangeability
- Amendments to IFRS 9 and IFRS 7 Financial Instruments
- IFRS 18 Presentation and Disclosures in Financial Statements
- IFRS 19 Subsidiaries without Public Accountability: Disclosures
With the exception of IFRS 18, effective 1 January 2027, the effect of which the Directors are currently assessing, it is not expected that the adoption of the standards listed above will have a material impact on the financial statements of the Company in future periods.
The financial statements have been prepared on a going concern basis, which assumes the Company will be able to meet its liabilities as and when they fall due for the period to 30 June 2026. As at 31 December 2024, the Company has net current liabilities of £4,134,875 (2023: £1,544,906 net current assets) and net assets of £19,804,605 (2023: £1,544,906).
To conclude on the ability of the Company to continue as a going concern the Directors have prepared a robust forecast of the anticipated operational outgoings of the Company from the date of approval of the financial statements through to 30 June 2026 (the 'going concern period') which considers severe but plausible downside risks. In preparing the cash flow forecast for the Company over the going concern period, the Directors have considered all known operational expenses and capital commitments. The Company has financing facilities which with associated commitments from Cl Student Strat 1 LP provides the Company with sufficient callable commitments to meet the financial obligations of the Company through the going concern period. As there is no formal commitment to the Company in terms of equity, a letter of support has been received from CIM Zenith UK Holdings Limited which in turn has received a letter of support from CIM Zenith Master Holdings Limited and which in turn is supported by Cl Student Strat 1 LP. The Directors believe that the letters of support provided to the Company are sufficient to cover all working capital requirements including in the event of severe but plausible circumstances. The letters of support are not a guarantee or formal financial commitment however the Directors believe that the risks that the shareholders will not provide support is remote. The Directors therefore consider it appropriate to prepare the Company's accounts on a going concern basis for the going concern review period to 30 June 2026.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The Company recognises financial liabilities when the Company becomes a party to the contractual provisions of the instruments Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding
Financial liabilities are derecognised when, and only when, the Company’s obligations are discharged, cancelled, or they expire.
The tax expense represents the sum of the tax currently payable and deferred tax.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Company.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting period end that may have a significant risk of causing a material misstatement to the carrying amounts of assets and liabilities within the next financial year, are discussed below:
In the application of the Company's accounting policies that are set out in note 1, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The Directors have also made judgements about the going concern of the Company as described in note 1.3. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period and future periods if the revision affects both current and future periods.
The following are the Company's key sources of estimation uncertainty:
The Company's investment property held is initially measured at cost and subsequently at fair value through profit or loss at the end of the reporting period. Any unrealised gains or losses on this investment are recognised immediately in the income statement.
Fair value is the amount for which an asset could be exchanged, a liability settled, or an equity instrument granted could be exchanged, between knowledgeable, willing parties in an arm's length transaction.
The fair valuation of the property was carried out by an external third-party valuation expert for inclusion in the audited financial statements as part of quantifying the investment property under development held by the Company. Investment property under development is measured based on estimates except where such values cannot be reliably determined. The significant methods and assumptions used by valuers in estimating fair value of investment property under development are set out in note 8. Investment property under development is measured based on estimates prepared by independent real estate valuation experts.
The Company had no employees and incurred no staff costs. There were £nil Directors' emoluments in 2024 (2023: £nil).
£3,604,864 (2023: £Nil) of borrowing costs are included in the cost of qualifying assets during the year as disclosed in note 8. No charge has been expensed to the income statement.
The charge for the year can be reconciled to the profit/(loss) per the income statement as follows:
The Company has unutilised carried forward tax losses and temporary differences of £638,136 as at 31 December 2024 (2023: £43,500). No deferred tax asset has been recognised on this amount as the Company cannot be certain that there will be taxable profits arising within its residual business from which the future reversal of the deferred tax asset could be deducted.
In the March 2021 Budget it was announced that legislation would be introduced in the Finance Bill 2021 to increase the main rate of UK corporation tax from 19% to 25%, effective April 2023. This was substantively enacted in May 2021 therefore, any closing deferred tax balance is calculated at 25%.
The total cost incurred on the investment property under development as at 31 December 2024, based on the historical cost basis is £54,650,397.
The addition of other capitalised costs includes professional fees and stamp duty.
The illustrative calculations of a valuation considered to be compliant with the principles of RICS Valuation - Professional Standards 2022, were carried out by CBRE Limited. The valuers have prepared the calculations using the basis of fair value as at the valuation date pursuant to IFRS 13 - Fair Value Measurement. Key accounting estimates used in arriving at the value include, weekly rental income of between £249 - £515 per bedspace and a student net initial yield of 4.90%, adjusting for purchaser's costs of 6.48%.
VAT receivable was recovered in full post year end.
Other receivables in 2023 relate to the deposit paid and fees incurred to date on the development site purchased in Q1 2024.
All trade and other receivable amounts are interest-free and unsecured.
Amounts owed to the parent undertaking in 2023, are unsecured, interest-free and repayable on demand.
The Loan interest accrual include amounts accrued from 26 October to 31 December for both years in relation to the bank loans.
The deferred consideration amount in 2024 relates to the deferred land payment due upon completion, contingent on achievement of specified key milestones. This cost is included in Additions through acquisition, as disclosed in note 8.
The Company has a finance facility provided by Apollo Global Management Inc. for an initial period to 21 July 2027 with an option to extend for an additional 7 months from that date. The facility is secured against the asset under development. The finance is subject to a 62.5% loan to cost (LTC) until completion at which point it transfers to a 70% loan to value. The Company was compliant with this covenant as at the year end.
As at the year end, there is £624,612 (2023: £318,735) of accrued interest shown as a current liability. Interest is payable quarterly and principal repayable at the end of the term. CIM Zenith UK Holdings Limited, the parent entity, purchased an interest rate cap for the term of the loan, to hedge the interest rate risk, capping the underlying SONIA rate at 6%. As at 31 December 2024 there was £40.51m undrawn on this facility.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
On 26 September 2024, the Company issued 1 Ordinary Share of £1 at a price of £14,838,750, creating share premium of £14,838,749.
On 23 December 2024, the Company issued 1 Ordinary Share of £1 at a price of £3,066,530, creating share premium of £3,066,529.
The accumulated profit reserve represents cumulative profits and losses net of dividends paid and other adjustments. These are shown in the statement of changes in equity (page 9).
In accordance with FRS 101, the Company has taken advantage of the exemption from disclosing related party transactions with entities owned wholly by the group.
On 28 March 2025, the Company issued 1 Ordinary Share of £1 at a price of £2,735,440, creating a share premium of £2,735,439.