Aberdeen Property Investors - Aberdeen Asset Management

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Aberdeen Property Investors - Aberdeen Asset Management

Aberdeen Property Investors

Annual Review 2007


Aberdeen Property Investors in brief

Aberdeen Property Investors is the specialist property division of Aberdeen Asset

Management PLC, an independent, global investment management group managing

some €140 billion of assets in equities, fixed income and property from offices around

the world at the end of 2007.

We are one of Europe’s leading investment managers specialising in property, with

some €20 billion of property investments through funds and management mandates

in January 2008.

Collective property funds

Aberdeen has a broad and expanding range of collective funds

for clients seeking to invest in actively managed portfolios

with national or regional scope or specific property sector

focus. These funds are the strategic focus of Aberdeen’s

business and represent a rapidly growing share of our assets

under management (AuM).

Funds are of two types according to the assets they hold:

• Direct property funds: collective funds that invest in

direct property.

• Indirect property funds: collective funds that invest in

third-party property funds – our funds of funds products.

Contents

Operations

3 Highlights of the year

4 CEO’s statement

6 Property – A uniquely valuable asset

8 The value chain

10 Products and services

12 Case study:

Customised pooling structure

14 Case study:

Active asset management

Fund overview

16 Our investment funds

19 Direct property funds

21 Funds of funds

22 DEGI funds

23 Summary of Aberdeen funds

open for investment

Financial Report

24 Financial highlights

25 Income statement

26 Balance sheet

Corporate information

28 Group management

30 Aberdeen Asset Management

32 Main offices


Our mission is to facilitate international investment exposure to property with

superior performance by offering a comprehensive range of investment products

and services.

Our clients are primarily institutional investors such as life insurers and pension

funds, served by some 650 professionals at offices in eleven European countries and

in Singapore.

Direct property portfolios

Aberdeen manages discretionary investment mandates for

separate account clients, primarily pension funds and other

financial institutions. Portfolios are customised to meet the

investment objectives of each client in terms of geography,

sector, risk and return.

Active asset management

Our approach to asset management means we are active at

every stage of the value chain from strategic allocation

through property selection to individual property asset

management, where a skilful manager can unlock the

potential for added value and outperformance.

Aberdeen Property Investors on the ground

Our 650 professionals based in 12 countries combine

local market knowledge with world-class research

and shared cross-border expertise. Their objective is to

secure consistent outperformance in all the markets

where we operate.

Oslo Helsinki

Stockholm

Copenhagen

St Petersburg

London

Brussels

Paris

Amsterdam

Luxembourg

Frankfurt

Singapore >>

Annual Review 2007 1


A year of solid

growth

2 Aberdeen Property Investors 2007


Highlights of the year

Sustained organic growth. In the financial year to

30 September 2007:

Assets under management (AuM) increased by 39%

to €13.1 billion.

• Revenues increased by 12% to €102.5 million.

• We completed €4.3 billion of property transactions,

predominantly new acquisitions for our funds.

The acquisition of leading German fund manager DEGI at the

end of December 2007* meant that we started 2008 with:

• A greatly increased presence and client base in the

strategically important German market.

• AuM of some €20 billion with added expertise and

economies of scale in fund management.

Assets in property funds increased from 27% to 48% of total

AuM in the financial year and to some 65% including the

DEGI property funds.

Final closing of two funds of funds when they achieved their

target sizes: AIPP Asia and AIPP.

Launches of new funds:

• A single-country fund: Russia.

• Two new funds of funds: AIPP Asia Select and AIPP II.

Scandinavian Property Development ASA made a strong start

in 2007 towards its goal of becoming Scandinavia’s leading

property development player.

• Set up in January with its first investment of €600 million.

Assets under management (AuM), in € billion

20

15

10

5

0

04*

05*

06*

* By end Q3 in each year

**By January 2008

Transactions, in € billion

5

4

3

2

1

07*

08**

Management

Mandates

■ Funds

■ Acquisitions

■ Divestments

• Private placement in February raised €370 million from

over 230 investors in ten countries.

• Listed on the Oslo stock exchange in November.

Expanded European presence with a new office and team in

St Petersburg, a new team in London and the DEGI team

in Frankfurt.

0

2004* 2005* 2006*

* Rolling 12 months end Q3

2007*

* Scheduled for completion in April 2008 subject to the approval of BaFin

(Germany’s federal financial supervisory authority)

Annual Review 2007 3


CEO’s statement

A remarkable year for Aberdeen

Financially, 2007 saw strong growth in

revenues and profits which fully met

our high expectations. Total revenue

increased by 12% to €102.5 million

(€92m in 2006) while profits rose by

38% to €23.5 million (€17m in 2006)

with an overall margin of 23%. These

results reflect the confidence in Aberdeen

among new clients and the continued

trust of clients with whom we have

established long-term relationships.

I am pleased to report that the

financial year to 30 September

2007 was another highly successful

one for Aberdeen Property

Investors, with strong inflows of

investments into both established

and new property funds.

Rickard Backlund, CEO

Growth in assets under management

2007 was a year of strong organic growth in our property funds

and the extension of our product range. During the year, we

successfully continued our strategic transition towards

property funds while maintaining our strength in management

mandates. Fund management generated 59% of total income

compared to 18% in the previous year.

During the financial year to 30 September 2007, total AuM

increased to €13.1 billion: up 39% on the previous year,

primarily thanks to strong inflows of capital into our funds.

Property fund AuM rose to 48% of total AuM, against 27%

last year. Separate account asset and property management

mandates remained stable with AuM at €6.8 billion at 30

September 2007.

Increased AuM volumes benefit both Aberdeen and our

clients. They enable us to negotiate the best terms for

acquisitions and disposals, to strengthen and extend our

local presence and gain rapid access to the best properties,

including off-market deals. They also provide economies of

scale in areas ranging from research to asset management,

supporting our constant drive to manage our cost base.

A healthy level of transactions

We completed transactions of approximately €4.3 billion

in the financial year, including our fund of funds products.

This transaction rate reflects the growth of our funds and our

philosophy of active management.

4 Aberdeen Property Investors 2007


New markets and new products through organic

growth

We continued to strengthen our geographical presence over

the last year. In the UK we recruited a highly experienced

team. We opened our first office in Russia, in St Petersburg,

and recruited a well-established asset management team

there, complemented by a dedicated Eastern European fund

management team in Copenhagen. We plan to continue to

increase our presence in continental Europe in order to

extend our range of funds for institutional investors.

During the year, we expanded our range of property funds

with new funds for the Nordic region and Russia.

We also continued to pioneer and lead the development

of property funds of funds, successfully launching a second

Asian and two more European funds of funds in 2007.

A new venture, Scandinavian Property Development ASA,

was set up, raised private placement capital from over

230 investors from ten countries, made its first three

substantial acquisitions, and was listed on the Oslo stock

exchange – all within the calendar year.

Strategic acquisition

In addition to this strong organic growth, the final days of

December 2007 marked the strategic acquisition – scheduled

for completion in April 2008, subject to the approval of BaFin

– of the German fund manager DEGI (Deutsche Gesellschaft

für Immobilienfonds mbH). This well-established business

with strong management and a skilled work force is very

complementary to our own. We now have a broader German

client base and increased resources to advance our global

property investments. DEGI has €6.4 billion of AuM invested

in properties on a global scale, raising our total AuM at the

start of 2008 to some €20 billion, a landmark in our growth.

Looking ahead

2007 was a rewarding year for Aberdeen. Our priority is now

to consolidate our achievements and build on them in a way

that continues to respond to clients’ needs.

that carefully assess and manage risk will continue to deserve

and reward client confidence in our performance.

Despite – or perhaps because of – this more challenging

investment climate we are confident of continuing growth

in institutional investors’ demand for international property

vehicles that offer good risk-adjusted returns and the benefits

of portfolio diversification. We see investors requiring more

information to guide their choice of suitable funds and

greater support in their decision making. We welcome this

because it plays to Aberdeen’s strengths, including our

long-held belief in cooperating closely with clients.

In 2008, we aim to continue to grow our existing funds

and build on their success in attracting investments from

established and new clients. We shall also research and

evaluate additional opportunities for funds in selected

markets and sectors, carefully and in response to client

demand. We plan to create one or more new funds in the

UK where we now have the experienced resources on the

ground to source and acquire assets at attractive prices and

actively manage the assets acquired. The infrastructure sector

is also an interesting niche market that we are evaluating.

Consistent with our policy of placing the management of our

funds in those offices closest to them and with the resources

required, we plan to leave operational management of DEGI’s

funds with the existing DEGI team in Frankfurt. This is now

Aberdeen’s main office in Germany and we shall integrate our

Cologne-based team into it. A priority in the current year is to

approach DEGI’s considerable client base in order to offer our

full range of collective funds.

Finally, I would like to welcome our new employees to

Aberdeen, including of course those from DEGI, and to thank

all our people for their hard work and dedication to delivering

superior performance on behalf of our clients and thereby

contributing to what has been a remarkable year.

Rickard Backlund

CEO, Aberdeen Property Investors

We are cautious about the outlook for property investment

returns in 2008 and the short term future. The period when

investors could count on a benign climate of strong capital

appreciation and low interest rates appears to be over.

Achieving good risk-adjusted returns from property in a more

challenging investment climate will depend more than ever

on a rigorous investment process and top quality active asset

management. We believe that Aberdeen’s solid track record in

these fundamentals and our long-held commitment to funds

Annual Review 2007 5


Operations

Property – A uniquely valuable asset class for

long-term investors

In recent years, interest in property as

an asset class has increased significantly.

One of the main reasons for this is

institutional investors’ desire for risk

diversification

Why property

Property is a unique asset, as it is a real asset with financial

characteristics. One component of the return to property

stems from its contracted rental income, which is directly

linked to the development of the real economy. This

contracted income gives property its bond-like characteristic.

The value of the income at the end of the lease, however, is

subject to market conditions. This component gives property

its stock-like characteristic. The unique feature of property is

that its performance is different from that of other financial

assets, and it is this different return pattern that provides the

fundamental diversification case for property.

If one measures the annual historical correlation between

property versus stocks and bonds, property stands out as a

crucial diversifier for risk-alert investors. Property correlates

negatively with bonds, which means that by combining

property, stocks and bonds in a multi-asset portfolio, risk is

reduced without harming returns. On this basis it becomes

evident that property should play a more important role in

portfolio composition than it has done over the past twenty

years. There are powerful arguments to support an allocation

to property of between 10% and 20% in a well diversified

portfolio, depending on the investor’s domicile and appetite

for risk.

Property has become an established asset class

As institutions’ understanding of the benefits of property

has increased, so has their allocation to the asset class.

Property today is no longer viewed as simply an alternative

asset class but has established itself as an asset class in its

own right and as such it forms an essential part of many

institutional investors’ multi-asset portfolios. As the chart

shows, direct investment into commercial property more

than tripled over the period 2000 to 2007 to reach

US$ 537 billion globally.

Direct real estate investment volumes ($ bn)

350

300

250

200

150

100

50

0

00

01

02

03

Sources: DTZ and Aberdeen Property Investors, Investment Strategy

04

The effects of property’s increased attraction

As a result of this increased allocation, property is becoming

more integrated into the broader financial markets. And as this

integration process progresses, the correlation between property

and the financial markets can also be expected to increase.

The main reason for the low correlation between property

and financial assets is property’s dual return factors: the

financial effect over the cost of capital and the real effect

over the income to the asset. These will change in relative

importance as property becomes more integrated with the

wider capital market and becomes more transparent. In order

for property investments to offer their full diversification

benefits, the real effect needs to be stronger than the

financial effect. This has in fact been historically the case;

but keeping it so will necessitate a deeper analysis of property

assets and their specific characteristics versus those of

financial assets if investors want to maximize property’s full

potential as a diversifier.

The impact on future property investment strategies

An obvious implication of this reasoning is that it is important

for investors to invest in property with a higher income

component and that this income component is tied to the

local economy. On the operational side, the impact of the

increased integration of property investment with the

05

06

07

■ USA

■ Europe

■ Asia/

Pacific

6 Aberdeen Property Investors 2007


oader capital market has predictable impacts. In order to

gain the full diversification benefits of property it will in

future be more important than ever to have a local manager

with an understanding of the needs of local tenants and the

local micro-level market dynamics. This has also the benefit

of improving performance.

In practice this has implications for where and how

investments in property should be made. For example, the

diversification stemming from an office investment in a core

financial market will generally be less than that of investing

in a retail asset. This will become even more important in an

international portfolio strategy. What is the diversification

effect of investing in assets leased to a large financial

institution, even if the assets are located in London,

New York, Tokyo and Frankfurt The true benefits of

diversification will stem from local tenants and the ability

to access local expertise.

Expanding definition of ‘international property’

As investment markets become more integrated, in particular

in the core segments of the property market, as a result of

increased cross-border investment amongst institutional

investors, the definition of ‘international’ is changing and

expanding. For most European investors, the definition of

international investment just five years ago was Europe.

Today the international investment universe spans the three

main investment regions of North America, Europe and Asia.

The potential for diversification of property market risks

therefore spans a wide range of time zones and the

operational complexity of property investment increases.

On the other hand, the development of new investment

vehicles open to institutional investors allows for managing

much of this complexity. The growing standardisation of

structured, non-listed funds increases transparency and

facilitates the understanding of these products. The growth

of REITs, the advent of an emerging derivatives market and

the increased availability of market information all increase

accessibility, transparency and the understanding of property

investments, as well as opening the door to more active and

effective portfolio management.

Optimal allocation to real estate, domestic and international

Unhedged returns, 10% risk strategy

% of Total Portfolio

25

20

15

10

5

0

Australia

US

France

Netherlands

Sweden

Switzerland

UK

■ Domestic

■ International

Source: “International Evidence on Real Estate as a Portfolio Diversifier”,

Journal of Real Estate Research, Vol. 26, No. 2, 2004

to investing into property, both in exploiting mispricing

between markets and investment opportunities and in

creating the potential to increase the tactical allocation to

property in the portfolio.

As the investment market integrates and property

investment becomes ever more sophisticated, the ultimate

drivers of property performance must never be forgotten.

Understanding each property, and therefore being local, will

become even more important to gaining property’s full

investment potential.

What does the future hold

As real estate becomes more integrated with the broader

financial markets, the potential for diversification must be

achieved on the basis of a well thought through strategy for

the property portfolio. Such a strategy needs to take account

of the general financial environment as well as the conditions

in individual local real estate markets.

The opening up of new investment avenues – especially well

structured funds – will make possible a more active approach

Annual Review 2007 7


Operations

The value chain – how value is created

In today’s more demanding investment

climate the difference between skilled

and less skilled investment managers

will become increasingly apparent, and

investors will need to be even more

careful in choosing managers they

can trust.

A changing market environment

Over recent years, more and more investors have come to

realise the benefits of property. When credit was readily and

cheaply available, investment in property benefited from a

positive yield gap. As a consequence the yields on property

gradually moved towards the financing cost. At the same

time, with few exceptions occupier markets were generating

sluggish to moderate rental growth. Despite modest rental

growth, property returns were very good as a result of

compressing yields. Yield compression affected property

markets widely and explains why it has been relatively easy

to earn good returns from property.

As the availability of credit has decreased and the pricing

of risk has moved out, this equation is changing. The market

effect stemming from a broad re-pricing of the asset class is

at an end. From now on, returns to property will not be driven

by yield compression but will have to be generated from the

income side.

Moving from beta to alpha

The re-pricing of property is a fact – as it is for other asset

classes – and is a function of the increased transparency and

accessibility of property as well as a greater understanding

of its potential and limitations. This re-pricing is also a

consequence of property’s integration with the wider financial

markets and its development as an accessible asset class at

an international level. Thus, the strong performance of

property in the recent past has been driven by underlying

structural market factors: i.e. strong beta. The difference

between skilled and not so skilled managers (alpha) has been

relatively small.

As the effect of integration – both within the property

investment markets and with the wider financial markets –

loses momentum, the investment manager’s skill in adding

value will grow in importance. The ability to improve cash

flows from property will be crucial, and this will increase the

differential between managers and their performance.

How to create value

We strongly believe that property will continue to offer value

to investors, but that this value will have to be earned through

intelligent and hard work. Creating investor value begins with

a robust, proven investment and asset management process:

one that Aberdeen has developed and refined over many years.

It is supported by our top-class research capability and can be

applied consistently to all property sectors and extended to

new countries, regions and cities.

The three disciplines

Allocation Selection Management

Investment

strategy

Forecasts

and relative

pricing

Investment

plan

Portfolio

analysis

Asset

selection

Transactions

Holding

strategy

Investment

management

Cost

optimisation

Follow up

Source: Aberdeen Property Investors, Investment strategy

8 Aberdeen Property Investors 2007


The three disciplines

We apply our knowledge and skills by linking three essential

disciplines: Allocation, Selection and Management. Every

stage of the investment process is integrated with the

adjacent stages, and all relate to our clients’ investment

objectives.

Allocation – Our market analyses quantify the potential of

relevant markets, first at macro level then at geographical

and sector level, by assessing the factors that will drive

performance. Research-based forecasts of performance and

risk use data from external sources and from Aberdeen’s

extensive internal databases. These analyses identify the

sectors and markets where new investments will meet

investment objectives. Allocation also uses asset-level

information from the stock selection process.

presence gives us rapid access to these properties, including

off-market transactions. Our hold/sell model helps identify

which properties will generate superior returns. In portfolios,

properties are ranked individually by risk and return.

Management – The aim of active management is to add

value and maximise income returns. At property level, this

involves optimising lease contracts and operating costs and

identifying opportunities to add value through refurbishment,

development and repositioning. Good tenant relations

and strong local presence are crucial. So are efficient

administration, financial control, managing SPVs and local

tax structures, and giving investors high quality reports.

Selection – Our professionals have developed systems to

determine where the best properties are to be found in

Allocation-defined markets and sectors: properties that fit

the fund’s risk profile and time horizon and have the potential

for added value by active management. Our local market

Annual Review 2007 9


Operations

Products and services designed to meet

investors’ needs

Aberdeen Property Investors’ products

and services are dedicated to our

central objective: to secure consistent

outperformance in all markets where we

operate.

In line with our objective to help clients gain international

diversification with strong performance, we offer a wide range

of products and services for investing in property. These include

collective funds of direct property and of property funds,

separate account portfolios, and the strategies, processes and

management needed to produce superior returns.

Building on a strong historical track record based originally on

separate account investment management mandates,

Aberdeen has progressively extended its products and

services to meet the needs of a wide range of investors by

creating an expanding selection of actively managed fund

products. These products enable new groups of investors,

especially institutional investors, to achieve diversification

and performance in their property exposure.

Collective funds

At the end of September 2007, 48% of our AuM was invested

in property funds against 27% a year earlier, clearly

demonstrating the success of our funds in meeting investors’

needs. We plan to continue to develop this area of our

business and shall do so by being highly responsive to client

demand. This responsiveness will always govern the

expansion of our product range and our geographical

presence, because we believe in managing our funds locally.

Aberdeen now has 17 well diversified collective funds for

institutional investors, with national or regional scope or

specific property sector focus and with a range of risk/return

profiles. These are covered on pages 16 – 23.

Our collective funds are of two types according to whether

they hold direct or indirect property assets:

• Direct property funds: collective funds that invest in

direct property. We now have twelve of these funds.

• Indirect property funds: collective funds that invest in

third-party property funds – our funds of funds products.

We now have five of these funds.

Separate account mandates

In addition to our funds business, Aberdeen holds a range of

discretionary investment management mandates for separate

account clients, primarily pension funds and other financial

institutions. Each portfolio is customised to meet the

investment objectives of the client in terms of geography,

sector, risk and return. Our separate account mandates take

the form of:

• Portfolios of direct property

• Portfolios of indirect property assets, i.e. of third-party

property funds

• Indirect property held in a pooled structure

While most of our separate account clients hold direct

property portfolios there is growing interest in indirect

property vehicles, which we expect to continue. Through

our specialised team, Aberdeen Property Investors Indirect

Investment (API IIM), we hold some of Europe’s largest

mandates for indirect third-party real estate investments,

totalling more than €3 billion.

Active asset management

Our approach to asset management, which applies to

collective funds and separate accounts, means we are active

at every stage of the value chain from strategic allocation

through property selection to individual property asset

management, where a skilful manager can unlock the

potential for added value and outperformance.

We carry out property management ourselves in most

locations. Elsewhere we select the best third-party

professionals to work under our close supervision. Strategic

outsourcing of day-to-day property management to external

specialists enables our asset managers to focus on

opportunities for adding value.

10 Aberdeen Property Investors 2007


Annual Review 2007 11


12 Aberdeen Property Investors 2007

An innovative

solution to a

widespread need


Case study – Customised pooling structure

An innovative solution to a pension fund’s needs

Even large multinational groups can

find it difficult to include the benefits

of indirect property investments in the

individual national pension funds of their

subsidiaries. A well diversified fund of

property funds requires a critical mass

of capital allocated to property and not

all modest-sized local pension funds can

achieve that critical mass.

”I really value working with Aberdeen, which has succeeded

in developing and implementing a structure based on an

idea that I have had for a long time. Folksam has been an

investor in Aberdeen’s funds of funds over a number of

years. Their broad experience, professionalism and business

acumen make them an excellent partner for Folksam now

that we have opted to increase our allocation to

international indirect property investments”.

Esbjörn Wincent, Head of real estate investments, Folksam

Is there a solution to this problem One that pools the

resources of the many separate pension funds and gives the

group its own well balanced indirect property fund tailored

to its specific needs

Folksam, a major Swedish insurance company, worked with

Aberdeen to find the answer. The result of close cooperation

between Folksam and API IIM – Aberdeen Property Investors

team for indirect investments – is AIPP Folksam Global:

a property fund of funds open solely to companies within

the Folksam Group and based on a unique pooling structure.

This innovative fund was created in October 2007. By using

AIPP Folksam Global, companies within the Folksam group

can invest via a joint Luxembourg-based structure. This offers

the Folksam group the ability to pool and coordinate its

indirect property investments, maximising cost efficiency

and offering greater diversification for the group’s pension

funds, both individually and as a whole.

AIPP Folksam Global is an umbrella fund with two sub-funds:

one for Asia and one for Europe. The initial investment capital

was more than €100 million distributed equally between the

sub-funds. The structure is open for additional annual capital

injections and there is flexibility to add more sub-funds

targeting other regions or specific sectors. AIPP Folksam

Global plans to make an average of one investment in Europe

and one in Asia each quarter so that the pool after the first

three-year period will contain ten to twelve funds in each

region. Folksam and Aberdeen are both represented on the

board of the fund’s management company, which decides on

investments.

Annual Review 2007 13


Case study – Active asset management

Retail portfolio achieves IRR of 100%

In May 2004, Doughty Hanson & Co

Real Estate entered the Finnish property

market by acquiring eight shopping

centres from Ilmarinen Mutual Pension

Insurance Company in Finland. The

portfolio of over 135,000 sq m had

a total transaction value of more than

€350 million and was at the time

Finland’s largest ever cross-border real

estate investment deal.

Doughty Hanson, one of the largest and most successful

European real estate fund managers, retained Aberdeen

Property Investors Finland to manage the assets. The two

companies worked together to implement an active

management and value enhancement programme for

the properties. The results were outstanding.

A phased disposal programme began in 2006 and ended

when the last asset was sold in September 2007. Total returns

from the portfolio represented a multiple of 7.6 times on

the equity investment and generated a gross IRR of 100%.

”We greatly value the contribution

that Aberdeen made to our success”.

Nils Styf, responsible for the Nordic activities of

Doughty Hanson & Co Real Estate

Aberdeen also contributed to the planning of the new future

underground station in the adjoining city-owned parking space

and its possible integration into the centre, and took a leading

role in co-operation with the city and state road authorities

in producing a new traffic scheme around the shopping centre.

These value-adding activities helped to achieve a disposal price

for the shopping centre of €329 million.

Nils Styf, responsible for the Nordic activities of Doughty

Hanson & Co Real Estate, said: “Our acquisition of the Finnish

retail portfolio has been a great success and we continue

to view Finland as an attractive market. We greatly value

the contribution that Aberdeen made to our success”.

Aberdeen’s role included asset management, property

management, financial planning, leasing and project

management.

Taking as an example the largest single asset, the 61,000 sq m

Iso Omena shopping centre in western Helsinki, Aberdeen

contributed to enhancing value by obtaining building rights

for an additional 7,000 sq m to extend and redevelop the

centre, creating a development plan to update the tenant

mix and improve the centre’s profile, implementing a lease

renewal program including some 60 new and renewed retail

and office leases, and increasing office occupancy from 70%

to 100%.

14 Aberdeen Property Investors 2007


Annual Review 2007 15


Fund overview

Our investment funds

Meeting institutional clients’ demand

for well-structured property investment

vehicles that provide strong risk-adjusted

returns and effective diversification remains

the strategic focus of our business.

All our funds build on the expertise and track record we have

built over many years’ experience in investment management.

Our local presence, proven investment process and active

management provide solid foundations for delivering superior

performance from our property funds.

Why invest in funds rather than in direct property

Funds offer a number of important advantages over direct

property investment:

• Lower minimum investment levels

• Greater portfolio diversification for any level of

investment

• Professional management and specialist expertise

• Allocation by geographic and sector preference

• Possible use of leverage to enhance returns

This section reviews our funds, their objectives and strategies

Aberdeen’s fund management philosophy

In today’s more demanding investment climate the

differences in performance between investment managers

will become increasingly evident.

We at Aberdeen judge it more important than ever to keep to

the core values and standards that have earned us clients’

loyalty over many years.

Property investment management is all we do – and only

for third parties.

• Our strategic goal is to create a broad range of funds

that meet clients’ needs by providing a clear choice of

investment universe, property sector and risk, and are

often created through client consultation.

• We invest in markets we understand.

• We have a long established commitment to funds that

combine good returns with moderate and well managed

risk – a strategy that looks sounder than ever in today’s

challenging investment climate.

• Our tried and tested investment process spans the whole

value chain and we apply it consistently to all property

sectors and geographies.

• Top quality research is essential to making sound

investment management decisions, and we are therefore

committed to continue to develop our research

capability as one of the most highly respected in the

industry.

• We believe in local decision making because we trust our

professionals on the ground.

Current property funds

Aberdeen has developed a range of property vehicles aimed

at meeting the demands of institutional investors. We now

have 17 well differentiated funds. The diagram provides an

overview of these funds in a matrix defined by risk/return and

geographic exposure.

We presently manage twelve unlisted collective property funds

that hold direct property with clear national or regional

exposure. They are all actively managed by local staff in line

with our investment philosophy. Eight of these funds are

currently open to new investment and profiled on pages 19–20.

The five Aberdeen Indirect Property Partners (AIPP) funds are

collective funds of funds that invest in underlying property

funds across Europe or Asia. They are managed by our

dedicated team Aberdeen Property Investors Indirect

Investment Management (API IIM). Two funds of funds have

closed successfully. Three are currently open to new investors

and are detailed on page 21.

Scandinavian Property Development is a development

company with an opportunistic risk/return profile and is listed

on the Oslo stock exchange. This is presently the group’s only

listed property fund, www.spde.no.

A profile of DEGI and its funds is on page 22.

Aberdeen funds open to new investment are outlined on

pages 19–21 and summarised in the table on page 23.

16 Aberdeen Property Investors 2007


Fund overview

A wide range of funds

Fund of funds

AIPP Active

AIPP*

AIPP II

AIPP Asia*

AIPP Asia Select

European

Balanced

Regional

European

Shopping

Nordic I

Pan-Nordic

Scan. Prop

Dev.**

Local

Shopping

(Finland)*

Sweden

Denmark

Finland

AREFF*

(Finland)

Russia

Norway I*

Norway II

Core Core-plus Value-added Opportunistic

* Closed for additional investors ** Quoted on the Oslo stock exchange

Among the most satisfying evidence of success are the funds

that have reached their target in terms of equity investment

or AuM, and they are detailed first.

Funds now closed to new investment

These funds continue to be actively managed, with dedicated

teams responsible for the performance of each fund and

reporting regularly to its investors.

Aberdeen Real Estate Fund Finland

Closed-ended with value-added strategy, the fund had its

final closing in December 2007 when targeted GAV was

raised to €630m with equal commitments from its three

main investors, ABP, ATP and Ilmarinen. The fund closed two

sale and leaseback transactions in December 2007 and has

a strong acquisitions pipeline. Full year IRR by end of

December 2007 was 39.0%.

Finland Shopping

Open-ended fund with core-plus strategy that invests in

Finnish retail property. The fund has a target AuM of €300m,

which is expected to be reached by 2010 after finalising

several development projects. ROE by end of December 2007

was reported at 12.6% p.a.

Aberdeen Property Fund Norway I

Open-ended with core risk/return strategy, the fund was

launched in 2004 and now manages 36 properties in Norway.

It grew its GAV from €753m to €900m in 2007, exceeding its

target.

Aberdeen Indirect Property Partners (AIPP)

Closed-ended with value-added strategy, Europe’s first pan-

European fund of funds, launched in February 2005 secured

its target €623m of investor commitments in 2006. Net IRR

in September 2007 was reported at 15.2% since inception,

above the target of 10–14%.

Aberdeen Indirect Property Partners Asia (AIPP Asia)

Closed-ended with value-added strategy, this was our first

Asian fund of funds, launched in 2006. It had its final closing

in the third quarter of 2007, reaching its equity target of

US$600m, of which US$397m has been committed to eight

target funds in countries including Japan, Singapore and India.

Annual Review 2007 17


Fund overview

Review of 2007

With strong inflows of capital into both established and new

funds, 2007 showed the continuing confidence that investors

have in our funds.

We extended our fund range in 2007 with the successful

launch of four new funds tailored to the needs of

international institutional investors.

Aberdeen Indirect Property Partners (AIPP) II, the follow up

fund to the successful AIPP, is a closed-ended, value-added

fund of funds vehicle holding funds that invest in European

property.

AIPP Asia Select, the follow up fund to the successful

AIPP Asia, is a closed-ended, value-added fund of funds

vehicle designed to provide diversified exposure to the

Asia-Pacific region.

The Russian fund is a closed-ended, value-added to

opportunistic vehicle aimed at identifying investment

opportunities in the fast developing Russian property

market, and diversified by property sector and geography.

We also launched Scandinavian Property Development, which

made three substantial investments, raised capital from over

230 investors in ten countries and was listed on the Oslo

stock exchange – all within the calendar year. The company’s

goal is to become Scandinavia’s leading property

development player.

Two funds – AIPP Asia and Norway I – successfully completed

their final closings during the year and are now closed to new

investment.

Looking forward to 2008

In 2008 our priorities are to maximise the performance of

all our existing funds, deliver to clients the benefits of our

acquisition of DEGI, and introduce new funds that clients

will value.

We expect the trend for international diversification in

property to continue. It might even increase given the turmoil

in financial markets globally. Property investments are often

seen as a safe haven for long term investors, providing very

attractive risk-adjusted returns.

European institutional investors are, and will continue to be,

our core investors, entrusting us to create and manage

professional property funds. We will also increase our efforts

to offer our products to smaller investors in feeder funds or

via distribution partners. Here the acquisition of DEGI plays

a key role.

We will increase our focus on managed risk in our property

funds, with moderate leverage, on the ground resources

managing the investments, and structured investment

processes.

In terms of new funds we plan to leverage our strengthened

capacity in Germany and, in close consultation with investors,

to build new funds with European exposure for international

investors.

We will review how best to capitalise on the new opportunities

offered by the UK property market and plan to establish one

or more UK funds in 2008.

We believe that the pooled fund created in close collaboration

with Folksam and featured as a case study in this Annual

Review has the potential to be adapted to the needs of other

large multinational corporations with pension funds in

multiple countries, and we are actively exploring this

potential.

We will also expand our investment horizon and look into

the areas of infrastructure and sustainability and how best

to structure attractive investment funds for these sectors.

Finally, we will build on our increased international scope and

intensify our efforts to assist investors around the world to

obtain attractive international investment opportunities.

We will therefore take a more global approach to both

investing and attracting capital, fully in line with Aberdeen’s

overall strategy.

18 Aberdeen Property Investors 2007


Fund overview

Direct property funds

The nine funds summarised here offer a

wide range of European geographic and

sector exposure and risk/return profiles.

All are available to new investment.

Aberdeen European Balanced Property Fund

A core to core-plus fund that actively manages a balanced

real estate portfolio across Europe.

The fund offers good diversification across European countries

and property sectors. It is still in its build-up phase, with a

portfolio asset value of €167m (31 Dec 07). The aim is a

return on equity of 10% p.a. (net of fees and after leverage)

including a cash return of 5.5–6% p.a.

The fund has a total of €242m of commitments, of which

€78m has been draw down from investors (31 Dec 07).

It executed three acquisitions in the last quarter of 2007.

Aberdeen Property Funds SICAV Pan-Nordic

A value-added fund with a diversified portfolio of

commercial property in the Nordic region.

The fund actively manages a diversified portfolio of

commercial property in Sweden, Norway, Denmark and

Finland. As a leading fund manager in the region our

competitive edge provides unrivalled local active

management and access to deal-flow in the Nordic countries.

The fund also allows for investment in the Baltic region. This

open-ended fund has a long-term total return on equity

target of at least 10% p.a.

During 2007, the fund grew rapidly through selected property

acquisitions to build a property portfolio of €904m (€175m in

December 06) and has attracted €485m of investor equity.

Aberdeen Property Nordic Fund I

Aberdeen European Shopping Property Fund

A core to core-plus fund focused on Nordic commercial

property and optimised for German institutional investors.

A core to value-added fund that offers a diversified

continental European retail portfolio.

The fund’s strategy is to acquire retail properties across

Europe (non-UK) where Aberdeen can add value with its

specialist retail expertise. The fund’s current portfolio has

a value of about €159m (31 Dec 07). The aim is a return on

equity above 9% p.a. (net of fees and after leverage)

including a cash return of 5% p.a.

This is a closed-ended fund (10 years) designed exclusively

for institutional investors .

This is an open-ended fund optimised for, but not limited to,

German institutional investors seeking a well diversified

portfolio of Nordic commercial property. The fund has a core

to core-plus strategy and uses Aberdeen’s portfolio analysis

methodologies to optimise risk diversification by country and

sector. The main investment focus is on office and retail

property in major economic centres. The target return (IRR) is

above 7% p.a. with a dividend target of 4.5% p.a. minimum

before individual tax. Committed investor equity at the end

of December 2007 was €130 m and the fund has a strong

acquisition pipeline.

Annual Review 2007 19


Fund overview

Aberdeen Property Fund Denmark

A value-added property fund for diversified exposure to

Danish property.

This open-ended fund actively manages a well diversified

property portfolio in Denmark with a value-added investment

strategy. It continued its strong transactions activity in 2007

and GAV grew from €400m to €600m during the year. It now

holds more than 30 properties.

In 2006 total return on equity was 31.9% and at property

level was 18.7%. For 2007, the full year’s performance at

property level is estimated at 10.3% and ROE 14.3%.

Aberdeen Property Fund Norway II

A core to value-added fund designed to invest in a diversified

portfolio of commercial property in Norway.

This closed-ended fund has a core-plus to value-added

strategy and is diversified geographically and by property

segments, risk characteristics and tenants. It is available

to institutional investors and invests primarily in office,

shopping, hotel and warehouse sectors. Target gearing is 75%

and target long-term return on equity is 12–14% p.a. after

management fees and fund taxes, with an annual distributed

cash return in excess of 3–5%. The fund manages 21 properties

in Norway. During 2007 GAV grew from €702m to €963m.

Aberdeen Property Fund Finland I

A core to value-added fund with a diversified portfolio in

Finland.

This is an open-ended, core to value-added fund with a

diversified property portfolio located mainly outside the

Helsinki metropolitan area.

The gross asset value of the portfolio at the end of 2007 was

some €154m, up strongly from €71m a year earlier. In line

with its active management philosophy the fund completed a

number of property transactions and lettings during the year.

Investors have committed €119m of equity of which around

70% has been invested. Target gearing is 50%. The ROE was

29.9% over the calendar year 2007 net of management and

performance fees. Target return on equity is 10% p.a.

Aberdeen Property Fund Sweden

A value-added fund with a balanced and well diversified

portfolio in Sweden.

This open-ended fund is actively building and managing a

well diversified property portfolio in Sweden. By applying a

balanced portfolio strategy, careful stock selection and active

management, the fund aims to create value for its investors

based on a combination of income and capital appreciation.

During 2007, the fund doubled in size from GAV €107m to

€214m and now holds 36 properties within all main property

sectors in expanding regions in Sweden. In 2007, total ROE

was 9.8%

Aberdeen Property Fund Russia

A value-added and partly opportunistic fund for participating

in Russia’s property market potential.

The fund plans to invest up to €1.5 billion in Russian

commercial real estate and is in the process of raising up

to €500 million of institutional investor equity. It aims to

identify investment opportunities in the large and fast

developing Russian property market. The fund will be

diversified across property sectors and geography, covering

Moscow, St. Petersburg and selected large regional cities.

The fund is tailor-made for international institutional

investors. It is a 10-year closed-ended Luxembourg SICAV-FIS

fund and has a value-added to opportunistic profile. Target

net IRR is a minimum of 14% over the fund’s defined life.

20 Aberdeen Property Investors 2007


Fund overview

Funds of funds

API IIM is our specialised team dedicated

to advising on and managing investments

in third party property funds. It holds

some of the world’s largest mandates for

indirect real estate investments and is an

acknowledged pioneer in its field.

Aberdeen Property Investors Indirect Investment

Management (API IIM) manages investments on behalf

of separate account clients and structures and manages

collective funds of funds. It invests in third party funds,

not in direct property. Its clients are exclusively institutional

investors.

API IIM consists of more than twenty specialists in Stockholm,

London and Singapore with investment mandates totalling

some €3 billion. Investment philosophy focuses on creating

alpha not on general market exposure, and the team’s track

record demonstrates this. Outperformance is achieved by

skilled management and a proven investment process. Due

diligence assesses the fund managers of target funds through

an extensive underwriting process.

API IIM currently has five funds of funds, one pooled product

(featured on page 13) and four separate account mandates.

The three collective funds of funds currently open to new

investment and a new fund planned for 2008 are summarised

as follows.

Aberdeen Indirect Property Partners – Active

Aberdeen Indirect Property Partners II

A value-added fund designed for an attractive risk-adjusted

return by investing in European property funds with assets

that combine strong income and active management

potential. AIPP II is diversified by exposure to multiple

sectors, locations, managers, investment styles and time.

It aims for alpha through manager selection and is

opportunity driven but not opportunistic.

AIPP II benefits from experience with Europe’s first pan-

European property fund of funds, our successful AIPP fund,

which was launched in 2005 and gained total investor

commitments of €623.5 million.

Aberdeen Indirect Property Partners – Asia Select

A value-added fund with diversified exposure to selected

property funds investing in the Asia-Pacific region, and able

to enter co-investments and joint ventures that fit overall

strategy. It leverages our local sourcing capacity and

knowledge of how Asian funds are structured and run. With

some US$1 billion of investment mandates in the region, we

are one of the largest fund investors and can negotiate good

terms for the fund.

AIPP Active is a hybrid fund of funds that seeks to take

advantage of mispricing within and between non-listed and

listed markets. The fund is designed to provide investors with

core to core-plus exposure to the property asset class

throughout Europe. It suits investors seeking immediate

exposure to the property market, liquidity and an attractive

running yield.

Aberdeen Indirect Property Partners – Infrastructure,

a new fund of funds planned for 2008

Infrastructure investment appeals to many long-term

institutional investors. It offers a fast growing range of

opportunities including durable assets underpinned by strong

cash flows. This fund plans diversified global exposure to

funds invested in infrastructure real estate, with a focus on

established assets in mature economies.

Annual Review 2007 21


Fund overview

DEGI

As one of Europe’s leading asset

managers for open-ended property funds,

DEGI brings experience, complementary

skills and a broad client base in a country

of strategic importance to Aberdeen.

DEGI was established in 1972 and has become one of Europe’s

leading property fund managers. It specialises in German

open-ended property funds for retail and institutional clients

and has invested in nearly 20 countries worldwide.

Aberdeen’s acquisition of DEGI at the end of 2007* brings to

both Aberdeen and DEGI a range of complementary skills and

synergies that will strengthen our expanding funds business,

starting in 2008.

DEGI has practical experience and market knowledge of

European property markets, and its broad German client base

provides valuable access to institutional and high net-worth

private clients in a country of strategic importance to

Aberdeen. Aberdeen’s proven ability to structure funds that

meet the needs of institutional investors across the globe will

be increasingly available to German investors. By raising

Aberdeen’s AuM by nearly 50% to some €20 billion, the

acquisition brings added economies of scale to our fund

business. We plan to start bringing these benefits to clients

in 2008.

The range of DEGI funds is summarised in the table.

DEGI also offers separate account portfolios and pooled

funds for German institutional investors.

* Scheduled for completion in April 2008, subject to approval by BaFin (Germany’s federal financial supervisory authority).

Name of fund Target exposure Type Risk profile Performance (BVI)* Size

Retail: for private individuals

DEGI Europa

DEGI International

Mainly institutional

DEGI Global Business

30% Germany

70% Europe

60% Europe

40% Global mainly

N America and Asia

60% Europe

10% Germany

30% Global mainly

N America and Asia

Current AuM

Open-ended Core to Core+ 4.4% €2.0bn

Open-ended Core to Core+ 5.0% €2.2bn

Target size

Open-ended Core to Core+ 5.5% €1.8bn

DEGI German Business Germany Open-ended Core to Core+ 4.7% €500m

Purely institutional Target return Target size

DEGI Europe Retail Europe Special property

fund

Core to Core+ 8.0–8.5% €1.5bn

* Using the standard method of comparison developed by BVI, the federal association of German investment companies, which includes virtually all the country’s

investment companies. Figures are from 31 December 2007

22 Aberdeen Property Investors 2007


Fund overview

Summary of Aberdeen funds open for investment

Exposure Name of fund Type

Risk

profile

Structure

Target

return

Current

AuM*

Target

AuM

Gearing

Min

inv.

Direct property funds

Europe

Aberdeen European

Balanced Property Fund

Semi openended

Core to

Core+

SICAV-FIS >10% €167m €500m

(end 2008)

50% €3m

Europe

Aberdeen European

Shopping Property Fund

Closedended

10 +1+1

Core+

to V.A.

SICAV-FIS > 9% €159m €1 500m 65% €5m

Nordic

Aberdeen Property

Funds SICAV Pan-Nordic

Openended

Valueadded

SICAV 10 –15% €904m €1 500m 60% €10m

Nordic

Aberdeen Property

Nordic Fund I

Openended

Core to

Core+

SICAV-FIS

German

investors

> 7% €62m €400m 50% €25m

Denmark API Property Fund

Denmark

Norway

Finland

Sweden

Russia

Funds of funds

Aberdeen Property Fund

Norway II

Aberdeen Property

Fund Finland I

Aberdeen Property

Fund Sweden

Aberdeen Property

Fund Russia

Openended

Closedended

Openended

Openended

Closedended

Europe AIPP Active Openended

Valueadded

Core+

to V.A.

Core

to V.A

Valueadded

V.A. to

Opport.

Core

to V.A.

Danish Ltd >10% €597m €800m 60% €1m

Norwegian

Ltd

12–14% €963m €1 500m 75% €10m

Finnish LP >10% €154m €300m 50% €0.5m

Swedish

Ltd

> 10 % €214 €500m 60% €1m

SICAV-FIS > 14% n.a. €1 500m ≤ 70% €5m

Lux FCP-FIS 8 –11% €138m €500m ≤ 65%**

target

€5m

Europe AIPP II Closedended

Valueadded

Lux FCP-FIS 10 –14% €90m €600m < 70%**

target

€10m

Asia AIPP Asia Select Closedended

V.A. to

Opport.

Lux FCP-FIS 13 –17% $50m $600m ≤ 75%**

target

$10m

*31 December 2007 ** % of underlying funds GAV

This table summarises the funds now open to investors but arguably the best evidence of our success are the funds that have

reached their target in terms of equity or AuM. These funds are described on page 17.

Annual Review 2007 23


Financial highlights

• Revenues increased by 12% to €102.5 million.

• Earnings before interest, taxes and amortisation (EBITA) totalled €23.5 million, an increase of 38%.

• EBITA margin increased to 23%.

Assets under management rose to €13.1 billion, an increase during the year of 39%.

2007 2006 2005 2004 2003

Revenues, €m 102.5 91.6 67.2 53.4 50.8

Earnings before interest, taxes and

amortisation (EBITA), €m

23.5 17.1 9.6 7.7 6.5

EBITA margin 23% 19% 14% 15% 13%

Earnings before taxes (EBT), €m 17.2 14.6 7.9 7.4 5.6

EBT margin 17% 16% 12% 14% 11%

Balance sheet total, €m 138.9 68.3 38.5 31.2 25.8

Total equity, €m 25.8 19.1 20.2 15.4 10.4

Return on shareholders’ equity 1 44% 40% 26% 40% 40%

Equity ratio 2 19% 28% 53% 49% 41%

Current ratio 3 1.0 1.1 1.6 1.7 1.6

Average number of employees 484 532 503 465 486

Assets under management, €bn 13.1 9.5 7.9 5.7 4.9

Financial years are 1 October – 30 September

1 Profit after financial income – tax/average equity

2 Equity / balance sheet total

3 Total current assets / current liabilities

24 Aberdeen Property Investors 2007


Income statement

€ ’ 000

Revenues

1 Oct 2006 –

30 Sep 2007

Group

1 Oct 2005 –

30 Sep 2006

Net sales 97 911 91 605

Other operating income 4 628 –

Total revenues 102 539 91 605

Operating expenses

Other external expenses -23 259 -23 535

Personnel expenses - 54 832 - 49 972

Depreciation and amortisation of tangible and

intangible fixed assets

-1 758 - 2 002

Result from participation in associated companies -153 –

Operating profit (EBIT) 22 537 16 095

Profit and loss from financial items

Result from other securities and receivables held

as fixed assets

-5 –

Interest income and other similar items 2 923 1 097

Interest expenses and other similar items -8 288 - 2 640

Profit after financial items (EBT) 17 166 14 552

Tax on profit for the year -7 357 - 6 634

Minority share in the profit of the year 0 3

Net profit for the year 9 809 7 920

Annual Review 2007 25


Balance sheet

Group

€ ’ 000

30 September

2007

30 September

2006

ASSETS

Fixed assets

Intangible fixed assets

Goodwill 5 223 6 059

Intellectual property rights 278 531

Tangible fixed assets

Equipment 1 447 1 358

Financial fixed assets

Participations in associated companies 4 018 –

Other long-term securities holdings 17 752 5 646

Deferred tax assets 297 –

Other long-term receivables 4 352 1 530

Total fixed assets 33 366 15 124

Current assets

Current receivables

Accounts receivable 13 311 6 170

Other receivables 59 220 25 021

Prepaid expenses and accrued income 10 425 11 947

Cash and bank 22 594 10 040

Total current assets 105 550 53 178

TOTAL ASSETS 138 916 68 302

26 Aberdeen Property Investors 2007


Group

€ ’ 000

SHAREHOLDERS’ EQUITY AND LIABILITIES

30 September

2007

30 September

2006

Shareholders’ equity

Share capital 228 225

Restricted reserves 865 3 231

Retained profits 14 946 7 749

Net profit for the year 9 809 7 920

Total shareholders’ equity 25 849 19 126

Minority shareholding 14 0

Provisions

Provisions for deferred taxes 885 935

Other provisions – 20

Total provisions 885 955

Long-term liabilities 878 259

Current liabilities

Accounts payable 2 819 2 769

Liabilities to group companies 68 942 17 965

Income tax liabilities 9 932 6 019

Other liabilities 13 180 7 361

Accrued expenses and prepaid income 16 416 13 849

Total current liabilities 111 289 47 962

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 138 916 68 302

Pledged assets and contingent liabilities

Pledged assets None None

Contingent liabilities 26 216 6 839

Annual Review 2007 27


Group management

Rickard Backlund Malin af Petersens Jon Lekander

Ubbe Strihagen Espen Klevmark Nico Tates

Ole Dall-Hansen

Jacques-Yves Nicol

Rickard Backlund, CEO

Employed since 1992

Ubbe Strihagen, International Director

Employed since 2004

Ole Dall-Hansen

Managing Director – Eastern Europe

Employed since 2007

Malin af Petersens, CFO

Employed since 1995

Espen Klevmark, Head of Product

Development Group,

Managing Director – Norway

Employed since 2001

Jacques-Yves Nicol, International Director

Head of Aberdeen Property Investors

Southern Europe

Employed since 2006

Jon Lekander, CIO

Employed since 1998

Nico Tates, International Director

Head of Aberdeen Property Investors

North-western Continental Europe

Employed since 1994

28 Aberdeen Property Investors 2007


Anders Åström Frank Heeneman Glenn Newson

Tonny Nielsen Jan Sööder Bart Van den Berg

Pertti Vanhanen

Anders Åström

Managing Director – API IIM

Employed since 1994

Tonny Nielsen

Managing Director – Denmark

Employed since 2002

Pertti Vanhanen

Managing Director – Finland

Employed since 2003

Frank Heeneman

Managing Director – the Netherlands

Employed since 2005

Jan Sööder

Managing Director – Sweden

Employed since 2006

Glenn Newson

Managing Director – UK

Employed since 2007

Bart Van den Berg

Managing Director – Belgium

Employed since 2004

Annual Review 2007 29


The Aberdeen Asset Management group

Aberdeen Asset Management PLC, the parent company of

Aberdeen Property Investors, has been listed on the London

Stock Exchange since 1991. The company was founded in

1983 and has expanded through organic growth and selective

acquisitions.

Today the company is a member of the FTSE 250 index and

at year-end 2007 the group had 22 offices in 19 countries

around the world.

Aberdeen invests worldwide on behalf of clients across the

globe. In addition to property, Aberdeen manages fixed

income and equities in segregated, closed and open ended

pooled structures for third parties. Clients include leading

national and corporate pension funds, central banks and

other financial institutions.

During its financial year to September 2007, Aberdeen

attracted record inflows across a range of asset classes

and clients, achieving €12.9 billion (£8.7 billion) of net

new business. As at 31 December 2007 total assets under

management were €140.1 billion (£102.9 billion). The

company’s experienced investment teams, which employ

disciplined processes delivering strong performance, are key

to its success.

Aberdeen operates as an independent company and has

no ties to other financial institutions. The company’s sole

business is asset management and its fortunes depend on

how well it manages clients’ funds.

www.aberdeen-asset.com

British Isles

Aberdeen (Head office)

Edinburgh

London

As Aberdeen our home has market, several we offices have around several the offices UK, its around

home the UK. market. By AuM, By 38% AuM, of 38% our of clients Aberdeen’s are domiciled clients in

are the domiciled UK, accounting the for UK, £36.5bn. accounting The for city £36.5bn. of Aberdeen The

city is our of headquarters, Aberdeen is the and group’s where headquarters, we situate many where Group

its functions legal, group including information legal, group and information human resources and

functions human resources; are located. London London is the is investment the group’s centre largest for

office UK & European by number equity of staff, and and fixed where income most teams, UK client our

largest servicing office and by business number relationship of staff, and staff where are based. we locate

Edinburgh most is the group’s investment centre for global

UK equity, client multi-asset servicing and business structured relationship product teams. staff.

Edinburgh is the investment centre for global equity,

multi-asset and structured product teams, as well

as the company secretarial teams for the UK

investment trust range. Other offices reflect

longstanding

businesses such as private equity and, in the case

of Jersey, private client operations.

North America

Fort Lauderdale

Philadelphia

Our The Philadelphia office is Aberdeen’s our hub for hub North for America, North

America, and includes and fixed includes income, fixed US income, equity US and equity specialist and

specialist US equity US teams equity that teams manage that over manage £19.5bn over of £19.5bn

of domestic investments. It is It also is also the the base base for for US US

client servicing staff. Aberdeen We have a has second a second presence presence

through the recently acquired US mutual fund range

from Nationwide. North American assets currently

account for 20% of AuM. Fort Lauderdale, services by contrast,

Aberdeen’s services our institutional insititutional clients in in South America.

Key

Main investment centres

Sales and distribution offices only

only Key property centres only

Key property centres only

30 Aberdeen Property Investors 2007


Continental Europe

Amsterdam

Brussels

Cologne

Copenhagen

Frankfurt

Helsinki

Luxembourg

Oslo

Paris

Stockholm

St Petersburg

Aberdeen has been developing its presence across

continental Europe, an expansion led by Aberdeen

Property Investors. Continental Europe now

accounts for 25% of Group AuM or £23.9bn.

Luxembourg is the domicile for the Aberdeen

Global fund range, a range of pooled funds

that is distributed cross-border to 24 countries

worldwide.

Middle East

The Middle East is an important source of institutional

funds, and Aberdeen has a strong client base there

– serviced from London. Aberdeen currently manages

over £5.9bn of assets for institutional and sovereign

wealth entities in the region.

Asia-Pacific

Bangkok

Singapore

Hong Kong

Tokyo

Kuala Lumpur

The Asian headquarters of the Aberdeen group is in

Singapore, with some 130 staff. Other full service

offices are in Hong Kong, Kuala Lumpur and Bangkok.

In addition the group has research and client servicing

in North Asia. Asian clients account for £4.0bn of AuM,

yet Asia remains the significant equities competence

for the group. Regional equities account for 19% of

AuM, or £18.3bn.

Australia

Sydney

With 50 employees and £5.5bn of assets, the Group’s

Sydney operation has a sizeable presence in this

relatively sophisticated retirement savings market.

The acquisition of the majority of DeAM’s Australian

fund operations in 2007 greatly boosted Aberdeen’s

resources here.

Annual Review 2007 31


Main offices

Belgium

Avenue Louise 326 B14

BE - 1050 Brussels, Belgium

Tel: +32 (0)2 237 99 99

Fax: +32 (0)2 237 99 88

Denmark

Gammel Kongevej 60, 7

DK - 1850 Frederiksberg C

Denmark

Tel: +45 33 444 000

Fax: +45 33 444 001

Eastern Europe

Gammel Kongevej 60, 7

DK - 1850 Frederiksberg C

Denmark

Tel: +45 33 889 000

Fax: +45 33 889 001

Finland

Mikonkatu 9

FI - 00100 Helsinki, Finland

Tel: +358 (0)10 3040 100

Fax: +358 (0)10 3040 900

France

105, rue du Faubourg St Honoré

FR - 75008 Paris, France

Tel: +33 (0)1 53 53 93 94

Fax: +33 (0)1 53 53 93 95

Germany

Weserstrasse 54

DE - 60329 Frankfurt am Main, Germany

Tel: +49 (0)69 263 12011

Fax: +49 (0)69 263 51775

Zeughausstr. 28 – 38

DE - 50667 Cologne, Germany

Tel: +49 (0)221 650 314 0

Fax: +49 (0)221 650 314 11

Luxembourg

46a, Avenue J.F. Kennedy

LU-1855 Luxembourg

Grand-Duchy of Luxembourg

Tel: +352 (0)26 005 730

Fax: +352 (0)26 005 816

The Netherlands

WTC A-Tower, 3rd floor,

Strawinskylaan 303,

NL - 1077 XX Amsterdam

PO Box 79074

NL - 1070 NC Amsterdam

The Netherlands

Tel: +31 (0)20 6870500

Fax: +31 (0)20 6844291

Norway

Parkveien 53 A

PO Box 1228 Vika,

NO - 0110 Oslo, Norway

Tel: +47 2201 2700

Fax: +47 2201 2701

Russia

Senator Business Center,

15 Ulitsa Chapaeva,

St. Petersburg

RU - 197101, Russia

Tel: +7 (0)812 332 6769

Fax: +7 (0)812 332 6784

Sweden

Luntmakargatan 34,

Box 3039

SE - 103 63 Stockholm, Sweden

Tel: +46 (0)8 412 8000

Fax: +46 (0)8 412 8600

United Kingdom

One Bow Churchyard,

Cheapside, London,

EC4M 9HH, United Kingdom

Tel: +44 (0)20 7463 6000

Fax: +44 (0)20 7463 6001

Aberdeen Property Investors Holding

Luntmakargatan 34, Box 3039

SE - 103 63 Stockholm, Sweden

Tel: +46 (0)8 412 8000

Fax: +46 (0)8 412 8600

32 Aberdeen Property Investors 2007


This document is under no circumstances to be considered as an offer, or solicitation, to deal in the property market. Any research or analysis used in the preparation of this document

has been procured by the company for its own use and may have been acted on for its own purpose. The information contained herein, including any expressions of opinion or forecast

have been obtained from or based upon sources believed by us to be reliable, but is not guaranteed as to accuracy or completeness. The information provided does not constitute advice

or a personal recommendation for which the duty of suitability would be owed by us, and you should seek your own advice as to the suitability of any investment matter mentioned

herein. Readers should remember that the value of investments and any income from them may go down as well as up; they can be affected by exchange rate movements between

currencies and it is possible that investors may not get back the full amount invested. Past performance is no guarantee of future performance.


www.aberdeenpropertyinvestors.com

Aberdeen Property Investors is the specialist property division of

Aberdeen Asset Management PLC. www.aberdeen-asset.com

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