41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 214
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THE UNITE GROUP PLC | Annual Report and Financial Statements 2022
NOTES TO THE FINANCIAL STATEMENTS continued
Section 3: Asset management continued
3.4 Investments in joint ventures (Group) continued
The Group’s share of the cost to the joint ventures is £4.0 million (2021: £3.2 million), which results in management fees
from joint ventures of £17.4 million being shown in the Operating segment result in note 2.2a (2021: £15.9 million).
During 2022, the Group did not sell any properties to LSAV or USAF (2021: two properties sold to LSAV for gross proceeds
of £341.9 million). The proceeds and carrying value of the property are therefore recognised in profit on disposal of
property and the cash flows in investing activities. The loss relating to the sales, associated disposal costs and related
cash flows are set out below:
Profit and loss
2022
£m
2021
£m
Included in loss on disposal of property (net of joint venture trading adjustment)
–
6.6
Loss on disposal of property
–
6.6
Cash flow
Gross proceeds
2022
£m
2021
£m
–
341.9
Less amounts settled by transfer of property
–
(99.4)
Net cash flows included in cash flows from investing activities
–
242.5
As part of the disposal of properties to LSAV in 2021, the Group received an additional investment in the joint venture as
non-cash consideration totalling £104.0 million (before costs of £4.6 million), and the settlement of the LSAV performance
fee also resulted in a non-cash increase in its investment value of £53.6 million. The Group’s relative interest in the joint
venture remained unchanged.
3.5 Investments in subsidiaries (Company)
Accounting policies
In the financial statements of the Company, investments in subsidiaries are held at fair value. Changes in fair value are
recognised in profit or loss and presented in retained earnings in equity.
Carrying value of investment in subsidiaries
The movements in the Company’s interest in unlisted subsidiaries and joint ventures during the year are as follows:
Investment in subsidiaries
At 1 January
Additions
Revaluation
At 31 December
2022
£m
2021
£m
2,143.5
1,826.7
–
–
253.5
316.8
2,397.0
2,143.5
The carrying value of investment in subsidiaries has been calculated using the equity attributable to the owners of
the parent company from the consolidated balance sheet adjusted for the fair value of fixed rate loans. This includes
investment property, investment property under development and swaps at a fair value calculated by a third party expert.
All investment properties and investment properties under development are classified as Level 3 in the IFRS 13 fair value
hierarchy and have been discussed on page 214. The fixed rate loans range between Level 1 and Level 2 in the IFRS 13 fair
value hierarchy and have been discussed further on page 214.
Significant assumptions underlying the valuation of investment in subsidiaries are valuation of investment property and
investment property under development, together with the value of borrowings and inter-company debt. A full list of the
Company’s subsidiaries and joint ventures can be found in note 9.
