<PAGE>
SECURITY CAPITAL
[PICTURE]
EUROPEAN REAL ESTATE SHARES
2000 SEMIANNUAL REPORT
[LOGO]
SECURITY CAPITAL
<PAGE>
SECURITY CAPITAL
EUROPEAN REAL ESTATE SHARES
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Security Capital European Real Estate Shares is a highly focused, no-load
mutual fund that seeks to provide shareholders with above-average total
returns, including current income and capital appreciation, primarily
through investments in equity securities of publicly traded real estate
companies organized principally in European countries. The long-term
objective of the Fund is to achieve top-quartile total returns, as compared
with other mutual funds that invest in publicly traded real estate
companies organized principally in European countries, by integrating in-
depth proprietary real estate market research with sophisticated capital
markets research and modeling techniques.
<PAGE>
TO OUR SHAREHOLDERS
--------------------------------------------------------------------------------
Security Capital European Real Estate Shares ("SC-European Real Estate
Shares") generated a total return of -0.6% for the first half of 2000, as
compared to 1.3% for its benchmark, the Salomon Smith Barney-European
Property Index.
A consistent drag on European stock returns denominated in U.S. Dollar
terms was the persistent strength of the U.S. Dollar versus the European
currencies. In the first half of 2000, the Euro lost over 500 basis points.
The British Pound lost over 600 basis points and the Swedish Krona was down
over 300 basis points. The overall impact during the first half of 2000
from currency effects on the stated returns for SC-European Real Estate
Shares was approximately -550 basis points.
The gross domestic product ("GDP") growth forecasts for Europe continue to
be revised upwards. The Eurozone GDP forecast for 2000 and 2001 is 3.5%
compared to 2.3% in 1999. The United Kingdom is expected to grow at 3.1%
and 2.7% in 2000 and 2001 respectively, compared to growth of 2.1% in 1999.
This acceleration in growth together with limited supply should provide
good support for continuously increasing rental and capital values for most
property markets. Current pricing of most European real estate companies
still suggests a recession or overbuilding scenario in the near future. We
believe that investors will become more comfortable with higher valuation
levels as companies continue to report strong cash flow and growth in net
asset values ("NAV"). We believe European real estate stocks will follow
the recent trend in the United States, where stronger internal growth and
increasing investor interest led the Wilshire Real Estate Securities Index
up over 25% year-to-date through July 31, 2000.
We are continuing to emphasize companies with large, well-conceived
development pipelines that may lead to significantly faster NAV growth over
the next three years. The Euro is trading now almost 20% lower than at its
inception 18 months ago. The interest rate and economic growth differential
between the United States and the Eurozone explain some of the Euro
weakness. We believe that with accelerating growth in Europe and a possible
soft landing in the United States, there is a good chance for a
strengthening European currency.
We appreciate your continued support.
Sincerely,
/s/ Anthony R. Manno Jr. /s/ Kenneth D. Statz
Anthony R. Manno Jr. Kenneth D. Statz
President Managing Director
1
<PAGE>
FUND PERFORMANCE
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The Fund's performance compared to a frequently used performance benchmark
is shown below.
COMPARATIVE RETURNS
Average Annual Total Returns
Period Ended June 30, 2000
<TABLE>
<CAPTION>
Since Inception
Year-to-Date One-Year (6/30/98-6/30/00)
--------------------------------------------------------
<S> <C> <C> <C>
SC-European Real Estate Shares -0.6% -4.3% 3.4%
------------------------------------------------------------------------------------------------
Salomon Smith Barney-
European Property Index/1/ 1.3% -2.0% -2.4%
</TABLE>
Past performance is not indicative of future results. The performance of
the above-referenced index does not include any fees or expenses, and the
underlying portfolio of SC-European Real Estate Shares may differ from
those of the index. (1) The Salomon Smith Barney European Property Index is
a float-weighted index that includes 15 countries in Europe and the listed
shares of all real estate companies with an available market capitalization
(float) of at least $100 million.
GROWTH OF A $10,000 INVESTMENT
Period from June 30, 1998 to June 30, 2000
[GRAPH]
<TABLE>
<CAPTION>
SSB-
SC- European
European Index/1/
<S> <C> <C>
30-Jun-98 $10,000 $10,000
July $10,020 $ 9,356
August $10,050 $ 8,933
September $10,210 $ 9,364
October $10,390 $ 9,102
November $10,340 $ 9,078
December $10,325 $ 9,160
January 1999 $10,084 $ 8,933
February $10,175 $ 9,156
March $10,712 $ 9,278
April $10,954 $ 9,511
May $11,156 $ 9,656
June $11,165 $ 9,718
July $11,774 $10,198
August $11,825 $10,195
September $11,662 $10,026
October $11,235 $ 9,676
November $10,879 $ 9,528
December $10,750 $ 9,401
January 2000 $10,185 $ 8,976
February $ 9,545 $ 8,447
March $10,236 $ 8,957
April $10,038 $ 8,868
May $10,122 $ 8,943
June $10,688 $ 9,522
</TABLE>
1 - SSB-European Index is an abbreviation for the Salomon Smith Barney European
Property Index.
Past performance is not indicative of future results.
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2
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SECURITY CAPITAL EUROPEAN REAL ESTATE SHARES
SCHEDULE OF INVESTMENTS-JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
Shares Market Value
---------------------------------------------------------------
COMMON STOCKS - 96.9%
UNITED KINGDOM - 42.4%
70,000 Land Securities, PLC $ 836,744
500,000 Burford Holdings, PLC 735,745
133,799 Chelsfield, PLC 651,893
100,000 Slough Estates, PLC 552,675
80,000 Hammerson, PLC 535,032
60,000 Frogmore Estates, PLC 451,660
95,000 Development Securities, PLC 403,203
50,000 Pillar Property, PLC 253,444
------------
4,420,396
SPAIN - 13.8%
42,915 Prima Inmobilaria, SA 438,389
60,000 Vallerhermoso, SA 358,013
20,000 Metrovacesa, SA 336,055
218,500 Filo, SA/1/ 308,731
------------
1,441,188
SWEDEN - 9.3%
50,000 Castellum, AB 538,549
25,000 Tornet Fastighets, AB 327,381
29,000 Hufvudstaden, AB 104,886
------------
970,816
FRANCE - 8.8%
4,000 Kleipierre 366,605
8,000 Accor, SA 327,882
1,579 Societe Immobiliere de Location pour
l'Industrie et le Commerce (Silic) 226,121
------------
920,608
IRELAND - 6.2%
110,000 Green Property, PLC 645,855
GERMANY -4.8%
39,363 IVG Holding, AG 503,570
NETHERLANDS -3.8%
10,000 Rodamco North America, NV 394,291
See notes to the financial statements. 3
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
Shares Market Value
---------------------------------------------------------------------
FINLAND - 3.2%
88,600 Sponda Oyj 334,116
PORTUGAL - 2.5%
20,022 Sonae Imobiliaria, SA 255,377
SWITZERLAND - 2.1%
1,450 MAAG Holding, AG 213,327
Total common stocks
(cost $10,292,633)/2/ $10,099,544
-----------
Total investments - 96.9%
(cost $10,292,633) 10,099,544
Other assets in excess of liabilities - 3.1% 318,846
-----------
Net assets - 100.0% $10,418,390
===========
/1/ Non income producing security.
/2/ Percentages of long-term investments are presented in this schedule
by country. Percentages of long-term investments by industry are as
follows: Diversified Real Estate 63.4%, Real Estate Development
28.2% and Industrial 5.3%.
See notes to the financial statements. 4
<PAGE>
SECURITY CAPITAL EUROPEAN REAL ESTATE SHARES
STATEMENT OF ASSETS AND LIABILITIES-JUNE 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at market value
(cost $10,292,633) $10,099,544
Cash 444,243
Receivable for fund shares sold 1,000
Receivable for investment securities sold 1,127
Dividend receivable 70,540
Deferred organization costs 37,222
Receivable from investment adviser 18,035
Other assets 20,467
-----------
Total assets 10,692,178
-----------
LIABILITIES:
Payable to distributor 2,131
Payable for investment securities purchased 222,748
Accrued expenses and other liabilities 48,909
-----------
Total liabilities 273,788
-----------
Net assets $10,418,390
===========
NET ASSETS CONSIST OF:
Capital stock $11,005,440
Undistributed net investment income 74,500
Accumulated undistributed net realized loss on investments
and foreign currency transactions (474,981)
Net unrealized depreciation on investments and foreign currency (186,569)
-----------
Total net assets $10,418,390
===========
Shares outstanding (50,000,000 shares of $0.01 par value authorized) 1,026,446
Net asset value and redemption price per share $ 10.15
===========
</TABLE>
See notes to the financial statements. 5
<PAGE>
SECURITY CAPITAL EUROPEAN REAL ESTATE SHARES
STATEMENT OF OPERATIONS-PERIOD ENDED JUNE 30, 2000
(UNAUDITED)
-------------------------------------------------------------------------------
INVESTMENT INCOME: $ 197,549
Dividend income/1/ 18,735
Interest income ---------
216,284
Total investment income ---------
EXPENSES: 42,343
Investment advisory fee 12,454
Distribution expense 996
Administration fee 39,782
Sub-administration fee 59,888
Transfer agent, custody and accounting costs 1,854
Federal and state registration 31,824
Professional fees 3,482
Shareholders reports and notices 11,934
Directors' fees and expenses 6,193
Amortization of organization costs 168
Other ---------
210,918
Total expenses before reimbursement ---------
(138,687)
Less: Reimbursement from adviser ---------
72,231
Net expenses ---------
144,053
Net investment income =========
REALIZED AND UNREALIZED loss ON INVESTMENTS:
Net realized loss on investments (130,379)
Net realized loss foreign currency transactions (35,800)
Change in unrealized appreciation on investments (44,701)
and foreign currency ---------
Net realized and unrealized loss on investments (210,880)
---------
Net decrease in net assets resulting from operations $ (66,827)
=========
/1/ Net of foreign withholding taxes of $49,653.
See notes to the financial statements. 6
<PAGE>
SECURITY CAPITAL EUROPEAN REAL ESTATE SHARES
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six months ended
June 30, 2000 Year ended
(Unaudited) Dec. 31, 1999
-------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 144,053 $ 216,695
Net realized loss on investments (130,379) (22,621)
Net realized loss on foreign currency transactions (35,800) (52,858)
Change in unrealized depreciation on investments (44,701) (223,809)
------------------------------
Net decrease in net assets resulting from operations (66,827) (82,593)
CAPITAL SHARE TRANSACTIONS:
Proceed from shares sold 15,059 10,056,961
Shares issued to holders in reinvestment of dividends -- 1,923
Cost of shares redeemed (59,919) (5,000,963)
------------------------------
Net increase (decrease) in net assets from capital
share transactions (44,860) 5,057,921
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (51,501) (180,976)
From net realized gains -- (284,089)
------------------------------
Total distributions (51,501) (465,065)
Total increase (decrease) in net assets (163,188) 4,510,263
NET ASSETS:
Beginning of period/1/ 10,581,578 6,071,315
------------------------------
End of period/2/ $10,418,390 $10,581,578
==============================
</TABLE>
/1/ Including distributions in excess of investment income of $18,052 for
the year ended December 31, 1999.
/2/ Including undistributed net investment income of $74,500 for the six
months ended June 30, 2000.
See notes to the financial statements. 7
<PAGE>
SECURITY CAPITAL EUROPEAN REAL ESTATE SHARES
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period ended
June 30, 2000 Year ended Period ended
(Unaudited) Dec. 31, 1999 Dec. 31, 1998/1/
------------------------------------------------
<S> <C> <C> <C>
For a share outstanding for each period:
Net asset value, beginning of period $ 10.26 $ 10.28 $10.00
------------------------------------------
Income from investment operations:
Net investment income 0.14 0.20 0.04
Net realized and unrealized gain (loss)
on investments and foreign
currency transactions (0.20) 0.23 0.28
------------------------------------------
Total from investment operations (0.06) 0.43 0.32
------------------------------------------
Less distributions:
Dividends from net investment income (0.05) (0.17) (0.02)
Dividends in excess of net investment income -- -- (0.02)
Dividends from net realized gains -- (0.28) --
------------------------------------------
Total distributions (0.05) (0.45) (0.04)
------------------------------------------
Net asset value, end of period $ 10.15 $ 10.26 $10.28
==========================================
Total return/2/ (0.6)% 4.1% 3.3%
Supplemental data and ratios:
Net assets, end of period ($000) $10,418 $10,582 $6,071
Ratio of expenses to average net assets/3/,/4/ 1.45% 1.45% 1.45%
Ratio of net investment income to
average net assets/3/,/4/ 2.89% 1.84% 1.32%
Portfolio turnover rate 64.40% 61.37% --%
</TABLE>
/1/ Fund commenced operations June 30, 1998.
/2/ Not annualized for the periods ended June 30, 2000 and December 31,
1998.
/3/ Annualized
/4/ Without voluntary expense reimbursements of $138,687, $337,352 and
$155,345 for the period ended June 30, 2000, the year ended December
31, 1999 and the period ended December 31, 1998, respectively, the
ratio of expenses to average net assets would have been 4.23%, 4,32%
and 9.66%, respectively. Without voluntary expense reimbursements of
$138,687, $337,352 and $155,345 for the period ended June 30, 2000,
the year ended December 31, 1999 and the period ended December 31,
1998, respectively, the ratio of net investment income to average net
assets would have been 0.11%, (1.03)% and (6.89)%, respectively.
See notes to the financial statements. 8
<PAGE>
SECURITY CAPITAL EUROPEAN REAL ESTATE SHARES
NOTES TO THE FINANCIAL STATEMENTS-JUNE 30, 2000
--------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Security Capital European Real Estate Shares (the "Fund") is a non-
diversified investment portfolio of Security Capital Real Estate
Mutual Funds Incorporated ("SC-REMFs"), which is an open-end
management investment company under the Investment Company Act of 1940
(the "1940 Act"), and is a Maryland corporation. The Fund commenced
operations on June 30, 1998. SC-REMFs is comprised of two investment
portfolios, the Fund and Security Capital U.S. Real Estate Shares.
Effective February 1, 2000, the Class R shares of the Fund were
combined with the Class I shares of the Fund with the surviving class
being known as Security Capital European Real Estate Shares.
The following is a summary of significant accounting policies
consistently followed by the Fund.
a) Investment Valuation - Each day securities are valued at the last
sales price from the principal exchange on which they are traded.
Securities that have not traded on the valuation date, or securities
for which sales prices are not generally reported, are valued at the
mean between the last bid and asked prices. Securities for which
market quotations are not readily available are valued at their fair
values determined by, or under the direction of, the Board of
Directors' Valuation Committee. Temporary cash investments (those with
remaining maturities of 60 days or less) are valued at amortized cost,
which approximates market value.
b) Federal Income Taxes - No provision for federal income taxes has
been made since the Fund has complied to date with the provisions of
the Internal Revenue Code available to regulated investment companies
and intends to continue to so comply in future years and to distribute
investment company net taxable income and net capital gains to
shareholders. As of December 31, 1999, the Fund has elected for
Federal income tax purposes to defer a $298,087 current year post
October capital loss and an $18,113 current year post October currency
loss as though the losses were incurred on the first day of the next
fiscal year.
c) Distributions to Shareholders - Dividends from net investment
income are declared and paid quarterly. The Fund intends to distribute
net realized capital gains, if any, at least annually, although the
Fund's Board of Directors may in the future decide to retain realized
capital gains and not distribute them to shareholders.
Distributions will automatically be paid in full and fractional shares
of the Fund based on the net asset value per share at the close of
business on the payable date unless the shareholder has elected to
have distributions paid in cash.
The characterization of shareholder distributions for financial
reporting purposes is determined in accordance with income tax rules.
Therefore, the source of the Fund's distributions may be shown in the
accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or
from paid-in-capital, depending on the type of book/tax differences
that may exist. Generally accepted accounting principles require that
permanent financial reporting and tax differences be reclassified to
capital stock.
d) Foreign Currency - The books and records of the Fund are maintained
in U.S. dollars. Foreign currencies, investments and other assets and
liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period. Purchases and sales of
investments securities and items of income and expense are translated
on the respective dates of such transactions. Unrealized gains and
losses, not relating to securities, which result from changes in
foreign currency exchange rates have been included in the unrealized
appreciation (depreciation) of foreign currency. Net realized foreign
currency gains and losses resulting
9
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
--------------------------------------------------------------------------------
from changes in exchange rates include foreign currency gains and
losses between trade date and settlement date on investment security
transactions and foreign currency transactions, and the difference
between the amounts of interest and dividends recorded on the books of
a Fund and the amount actually received. The portion of foreign
currency gains and losses related to fluctuation in exchange rates
between the initial purchase trade date and subsequent sale trade date
is included in realized gains and losses on investment securities
sold.
e) Repurchase Agreements - The Fund may enter into repurchase
agreements with brokers, dealers or banks that meet the credit
guidelines approved by the Board of Directors. In a repurchase
agreement, a fund buys a security from a seller that has agreed to
repurchase the same security at a mutually agreed upon date and price.
If the seller is unable to make timely repurchase, the Fund's expected
proceeds could be delayed, or the Fund could suffer a loss in
principal or current interest, or incur costs in liquidating the
collateral.
f) Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
g) Other - Investment and shareholder transactions are recorded on
trade date. The Fund determines the gain or loss realized from
investment transactions, using the specific identification method for
both financial reporting and federal income tax purposes, by comparing
the original cost of the security lot sold with the net sales
proceeds. It is the Fund's practice to first select for sale those
securities that have the highest cost and also qualify for long-term
capital gain or loss treatment for tax purposes. Dividend income is
recognized on the ex-dividend date or as soon as information is
available to the Fund, and interest income is recognized on an accrual
basis.
2. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 2000:
------------------------------------------------------------------------------------
Amount Shares
-------------------------
<S> <C> <C>
Shares sold $ 15,059 1,603
Shares issued to holders in reinvestment of dividends -- --
Shares redeemed (59,919) (6,474)
------------------------
Net decrease $ (44,860) (4,871)
========================
<CAPTION>
Year Ended December 31, 1999:
------------------------------------------------------------------------------------
Amount Shares
-------------------------
<S> <C> <C>
Shares sold $ 10,056,961 915,364
Shares issued to holders in reinvestment of dividends 1,923 187
Shares redeemed (5,000,963) (474,932)
------------------------
Net increase $ 5,057,921 440,619
========================
</TABLE>
10
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
--------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of long-term investments by the Fund
for the period ended June 30, 2000, were $6,368,667 and $5,687,468
respectively.
At June 30, 2000, gross unrealized appreciation and depreciation of
investments for tax purposes were as follows:
Appreciation $ 583,038
(Depreciation) (776,127)
---------
Net depreciation on investments $(193,089)
=========
At June 30, 2000, the cost of investments for federal income tax
purposes was $10,292,633.
4. INVESTMENT ADVISORY AND OTHER AGREEMENTS
SC-REMFs has entered into an Investment Advisory Agreement with
Security Capital Global Capital Management Group Incorporated
("GCMG"), an indirect, wholly-owned subsidiary of Security Capital
Group Incorporated ("Security Capital"). Pursuant to the Advisory
Agreement, GCMG is entitled to receive a management fee, calculated
daily and payable monthly, at the annual rate of 0.85% as applied to
the Fund's average daily net assets.
GCMG voluntarily agrees to reimburse its management fee and other
expenses to the extent that total operating expenses (exclusive of
interest, taxes, brokerage commissions and other costs incurred in
connection with the purchase or sale of portfolio securities, and
extraordinary items) exceed the annual rate of 1.45% of the average
net assets, computed on a daily basis, for the year ended December 31,
2000.
GCMG also serves as the Fund's administrator. GCMG charges the Fund an
administrative fee calculated daily and payable monthly, at the annual
rate of 0.02% of the Fund's average daily net assets.
State Street Bank and Trust Company ("State Street"), a publicly held
bank holding company, serves as sub-administrator, custodian, and
accounting services agent for the Fund. Sub-administration, custodian,
and accounting services will be charged by State Street according to
contractual fee schedules agreed to by the Fund.
Boston Financial Data Services, Inc. ("BFDS"), a privately held
company and an affiliate of State Street, serves as transfer agent for
the Fund. Transfer agent services will be charged by BFDS according to
contractual fee schedules agreed to by the Fund.
5. CONCENTRATION OF RISKS
The Fund will invest a substantial portion of its assets in publicly-
traded real estate companies organized principally in European
nations. The Fund may be subject to risks similar to those associated
with the direct ownership of real estate (in addition to securities
market risks) because of its policy of concentration in the securities
of companies in the real estate industry. Such risks include declines
in the value of real estate, risks related to general and local
economic conditions, possible lack of availability of mortgage funds,
overbuilding, extended vacancies of properties, increased competition,
increases in real estate taxes and operating expenses, changes in
zoning laws, losses due to costs resulting from the clean-up of
environmental problems, liability to third parties for damages
resulting from environmental problems, casualty or condemnation
losses, limitations on rents, changes in neighborhood values, the
appeal of properties to customers and changes in interest rates.
11
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
--------------------------------------------------------------------------------
The Fund will invest primarily in foreign securities. Substantial risks
are involved when investing in securities issued by companies and
governments of foreign nations, which are in addition to the usual risks
inherent in domestic investments. There is the possibility of
expropriation, nationalization, or confiscatory taxation, taxation of
income earned in foreign nations or other taxes imposed with respect to
investments in foreign nations, foreign exchange controls (which may
include suspension of the ability to transfer currency from a given
country), foreign investment controls on daily stock market movements,
default in foreign government securities, political or social
instability, or diplomatic developments which could affect investments
in securities of issuers in foreign nations. In addition, in many
countries there is less publicly available information about issuers
than is available in reports about companies in the U.S. Foreign
companies are generally not subject to the same accounting and auditing
and financial reporting standards as those for U.S. Companies, and
auditing practices and requirements may not be comparable to those
applicable to U.S. companies. The Fund may encounter difficulties or be
unable to vote proxies, exercise shareholder rights, pursue legal
remedies, and obtain judgments in foreign courts.
Also most foreign countries withhold portions of income and dividends at
the source requiring investors to reclaim taxes withheld.
The securities of some foreign companies and foreign securities markets
are less liquid and at times more volatile than securities of comparable
U.S. companies and U.S. securities markets.
The foregoing discussion is general in nature and is subject to the risk
considerations described in the Fund's Prospectus and Statement of
Additional Information.
6. DISTRIBUTION AND SERVICING PLANS
The Fund has adopted a distribution plan pursuant to Rule 12b-1 under
the 1940 Act ("Distribution Plan"). Under the Plan, the Fund pays to
Security Capital Markets Group Incorporated, an affiliate of GCMG, in
its capacity as principal distributor of the Fund's shares (the
"Distributor"), a monthly distribution fee equal to, on an annual basis,
0.25% of the value of the Fund's average daily net assets.
The Distributor may use the fee for services performed and expenses
incurred by the Distributor in connection with the distribution of the
Fund's respective shares and for providing certain services to
shareholders. The Distributor may pay third parties in the respect of
these services such amounts as it may determine. For the year ended June
30, 2000, the Fund has made payments totaling $13,289 as required by the
adopted Plans.
7. PRINCIPAL SHAREHOLDERS
As of June 30, 2000, SC Realty Incorporated, a wholly-owned subsidiary
of Security Capital, owned 99.9% of the Fund's total outstanding shares.
12
<PAGE>
<TABLE>
<CAPTION>
DIRECTORS INVESTMENT MANAGEMENT TEAM
<S> <C>
Anthony R. Manno Jr. Anthony R. Manno Jr.
Chairman and President Director, Chairman and President
Security Capital Real Estate Mutual Funds
Incorporated Kenneth D. Statz
Managing Director
Robert H. Abrams
Founding Director Program in Real Estate Kevin W. Bedell
Cornell University Senior Vice President
Trustee Emeritus and Presidential Counselor
Cornell University Matthew D. Hansen
Securities Trader
Stephen F. Kasbeer
Former Senior Vice President for Bernhard Krieg
Administration and Treasurer Analyst
Loyola University
John H. Woo
Director Analyst
Endowment Realty, Inc.
INVESTMENT ADVISER
George F. Keane
President Emeritus Security Capital Global Capital
The Commonfund Group Management Group Incorporated
Director 11 South LaSalle Street
Universal Stainless and Alloy Products Chicago, Illinois 60603
1-888-SECURITY
OFFICERS
TRANSFER AGENT
Anthony R. Manno Jr.
Director, Chairman and President Boston Financial Data Services, Inc.
P.O. Box 8121
Kenneth D. Statz Boston, Massachusetts 02266-8121
Managing Director 1-800-409-4189
Kevin W. Bedell
Senior Vice President AUDITORS
Alexander K. Daggett Arthur Andersen LLP
Vice President - Client Services 33 West Monroe Street
Chicago, Illinois 60603
Jeffrey C. Nellessen
Vice President, Treasurer and Assistant Secretary LEGAL COUNSEL
David T. Novick Mayer, Brown & Platt
Vice President and Secretary 1909 K Street, N.W.
Washington, D.C. 20006
Michael J. Heller
Assistant Treasurer
</TABLE>
13
<PAGE>
[LOGO]
SECURITY CAPITAL
11 South LaSalle Street, Chicago, Illinois 60603
1-888-SECURITY
