The directors present their annual report and financial statements for the year ended 31 December 2025.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
We have audited the financial statements of CREF3 UKI Holdings I Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group profit and loss account, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
Other information
Opinions on other matters prescribed by the Companies Act 2006
As explained more fully in the directors' responsibilities statement, 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 is 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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.
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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the group's sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation and data protection, anti bribery, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non compliance throughout the audit.
We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators including the group’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non compliance. Auditing standards also limit the audit procedures required to identify non compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available 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 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.
There are no items of other comprehensive income for either the year or the prior year other than the profit/(loss) for the year. Accordingly, no statement of other comprehensive income has been presented.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £8,808 (2024: £2,563,281).
CREF3 UKI Holdings I Ltd (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 5th Floor, 25 Baker Street, London, United Kingdom, W1U 8EQ.
The group consists of CREF3 UKI Holdings I Ltd and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company and group have taken advantage of the exemption under section 1A of FRS 102 not to prepare a statement of cash flows.
The consolidated group financial statements consist of the financial statements of the parent company CREF3 UKI Holdings I Ltd together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
These financial statements have been prepared on a going concern basis. At the balance sheet date, current liabilities exceeded current assets by £43,370,595 and the group had net liabilities of £18,393,474.
At the year end, CREF3 UKI Holdings I Ltd owed its immediate parent, CREF3 Euro Industrial Holdings II L.P, £45,367,080. CREF3 Euro Industrial Holdings II L.P has provided written confirmation that it will not call in the intercompany loans made to its subsidiary, or require payment of interest on that intercompany loan beyond the available cash flow of the group for a period of at least twelve months from the date of signing of these financial statements.
The directors have assessed the group's ability to meet its debts as they fall due and have a reasonable expectation that the group has adequate resources to continue in operational existence for a period of not less than 12 months from the date of these financial statements. On this basis, the directors continue to adopt the going concern basis of accounting in preparing these financial statements.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding value added tax and other sales taxes.
Revenue comprises rental income from tenants of the group's investment property. Rental income is recognised on an accruals basis in the period in which it is earned, in accordance with the terms of the lease.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors, loans to fellow group companies and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability, to the extent that a future liability exists.
Derivatives comprise a rate cap instrument and is valued at year end by way of a reference to an external valuation.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
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 profit and loss account, 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 if, and only if, there is 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.
Rental income from operating leases, including any lease incentives provided, is recognised on a straight line basis over the term of the relevant lease.
Interest is recognised in profit or loss in the period in which it is incurred.
Other finance costs are recognised in profit or loss as finance costs over the term of the associated borrowings.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The goodwill arising on acquisition of HEVF Cribbs Causeway Sarl relates to the investment property and the associated trade and is amortised over an estimated useful economic life of 4 years, in line with the business plan holding period. During the year ended 31 December 2023, the trade and assets of HEVF Cribbs Causeway Sarl were hived across to fellow group subsidiary CREF3 UKI Cribbs Causeway Ltd. Goodwill is tested for impairment at least annually, or more frequently when there is an indication that it may be impaired.
Details of the amortisation charged and impairment recognised are set out in note 9.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The directors exercise judgement in the valuation of the group's investment properties which are recognised at their fair value at the balance sheet date. The fair values have been assessed by the directors following a review of market data and are all supported by external valuations. The external valuations are made on an open market value for existing use basis by reference to market evidence of rental yields and transaction prices for similar properties, in accordance with the guidance notes of the Royal Institute of Chartered Surveyors.
The total carrying amount of the group's investment property at the balance sheet date and fair value movement in the period is detailed in note 10.
The directors exercise judgement in the valuation of lease incentives at the balance sheet date, in respect of recognising rental income, including any lease incentives provided, on a straight line basis over the relevant term. The lease incentive asset is included within the value of the group's investment properties.
The total carrying amount of the group's lease incentive asset included within the value of the group's investment properties at the balance sheet date is detailed in note 10.
The directors exercise judgement in the valuation of the group's derivatives which are recognised at their fair value at the balance sheet date. Derivatives comprise a rate cap instrument and is valued at year end by way of a reference to an external valuation. The external valuation reflect the present value of expected future cash flows to which the group is entitled to under the terms of the instrument, which are calculated with reference to forward interest rates.
The total carrying amount of the group's derivatives at the balance sheet date is detailed in note 13.
The average monthly number of persons (including directors) employed by the group and company during the year was:
The fair values of the group's freehold investment property at the balance sheet date have been assessed by the directors following a review of market data and are all supported by external valuations conducted shortly after the end of the financial year. The external valuations were made on an open market value for existing use basis by reference to market evidence of rental yields and transaction prices for similar properties, in accordance with the guidance notes of the Royal Institute of Chartered Surveyors.
The fair values of the group's freehold investment property at the balance sheet date are inclusive of balances in respect of lease incentives totalling £898,893 (2024: £1,111,706).
The property is subject to a first legal charge to secure the bank borrowings of the group.
Details of the company's subsidiaries at 31 December 2025 are as follows:
The registered office address of all the above entities is 5th Floor, 25 Baker Street, London, United Kingdom, W1U 8EQ.
Financial instruments comprise of rate cap instruments. The fair value of each rate cap instrument at the balance sheet date is based on an external valuation. The external valuation was prepared by discounting expected future cash flows arising from the rate cap instrument, with the expected future cash flows derived from forward curves, correlation and volatility levels based upon observable market inputs and/or good faith estimates and a discount rate determined with reference to SONIA.
The company's subsidiaries receive a return on the cap if SONIA exceeds the strike rate of 4.80%. The term of the rate cap instrument is conterminous with that of the company’s bank loan.
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
The bank loan was originally due for repayment in full on 18 February 2025. In February 2025, the bank loan was refinanced, with the new 3 year facility due for repayment in full on 23 February 2028. The bank loan is secured by a first legal charge over the property of the group companies party to the agreement. The charge extends to all assets of the company, both present and future. Interest is charged at 3.4% over SONIA.
Under the terms of the bank loan, the company's subsidiaries who are party to the agreement are jointly and severally liable for the bank loan obligations, totalling £110,451,017 (2024: £108,399,128) at the year end date.
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
The following wholly owned subsidiaries have taken advantage of the available exemption from audit under section 479A of the Companies Act 2006:
CREF3 UKI Holdings II Ltd (registered number: 13775950, England & Wales)
CREF3 UKI Peterwood Way F Ltd (registered number: 13815321, England & Wales)
CREF3 UKI 730 LR Ltd (registered number: 14010683, England & Wales)
CREF3 UKI Cribbs Causeway Ltd (registered number: 14418290, England & Wales)
CREF3 UKI Holdings I Ltd has provided a guarantee under section 479C in respect of these companies.
The company has taken advantage of the exemption contained in FRS 102 Section 33 'Related Party Disclosures' from disclosing transactions with entities which are a wholly owned part of the group.