TIDMGPOR
RNS Number : 8871S
Great Portland Estates PLC
19 November 2021
19 November 2021
Strong operational performance driven by leasing success
The Directors of Great Portland Estates plc announce the results
for the Group for the six months ended 30 September 2021 (1) .
Highlights include:
Healthy valuation and rental value growth
-- Portfolio valuation of GBP2.5 billion, up 2.0%(2) (+2.8%
offices and -0.8% retail); developments up 29.7%
-- Rental values up by 1.6%(2) (2.3% offices and -1.0% retail); yield contraction of 1 bp
-- Total property return of 3.7%, with capital return of 2.2% v
MSCI Central London (quarterly index) of 1.3%
-- Upgraded portfolio rental value guidance, now +2.0% to +5.0% for the financial year
Solid NTA growth
-- IFRS NAV and EPRA(3) NTA per share of 796 pence, up 2.2% over six months
-- EPRA(3) earnings of GBP18.7 million, down 9.2% on H1 2020. EPRA(3) EPS of 7.4 pence, down 9.8%
-- IFRS profit after tax of GBP62.2 million (2020: loss of GBP154.8 million)
-- Total accounting return(4) of 3.2% over six months; interim
dividend per share maintained at 4.7 pence
Strong leasing and growing Flex
-- GBP27.0 million p.a. of new annual rent across 358,800 sq ft,
market lettings 9.8% above March 2021 ERV
-- Flex space now c.15% of office portfolio, appraising further
217,000 sq ft. First Flex+ space at 16 Dufour's Place, W1 fully
let, average rent GBP191 per sq ft, 10.5% ahead of ERV
-- GBP2.4 million lettings under offer, 7.1% ahead of March 2021
ERV, further c.GBP16 million in negotiation
-- Vacancy up to 14.0% on Newman Street completion; 5.1% excl.
completed developments (Mar 2021: 6.6%)
-- Rent roll up 6.2% to GBP101.1 million, with total potential growth of 91%
-- Strongest quarterly rent collection since December 2019; 92%
collected (offices 95%), no delinquencies
Continued development progress
-- 1 Newman Street, W1 (122,700 sq ft) completed, 37% let
(15,200 sq ft retail) strong occupier interest
-- Excellent progress at major office refurbishment at 50
Finsbury Square, EC2 (129,200 sq ft); offices now 100% pre-let,
forecast 38.7% profit on cost, targeting Net Zero Carbon, GBP43
million capex to complete
-- Total programme of nine schemes (1.4 million sq ft) all
targeting Net Zero Carbon, with strong m omentum at four-near term
schemes (916,000 sq ft, c.GBP830 million prospective capex)
including:
o likely January 2022 start at consented 2 Aldermanbury Square,
EC2 (319,800 sq ft)
o resolution to grant planning achieved for our proposed 67,700
sq ft redevelopment of Piccadilly
o planning application submitted for major 139,400 sq ft
refurbishment of Minerva House, SE1
Substantial financial capacity
-- 160 Old Street, EC1 sold for GBP181.5 million, 5% premium to March 2021 valuation
-- LTV of 16.7%, weighted average interest rate of 2.0% (fully
drawn basis), cash and undrawn facilities of GBP486 million,
Sustainable Finance Framework published
-- Total prospective capex of GBP924 million (incl.
refurbishments); reviewing GBP0.9 billion of acquisitions and
GBP0.3 billion of sales
Embracing change and innovation supported by strong culture
-- Refreshed corporate brand launched to enhance our customer appeal
-- Social Impact strategy launched (see separate announcement)
-- The Hickman, E1 awarded SmartScore 'Platinum' rating, the first award globally
-- Strong employee engagement: 93% employees recommend GPE as 'great place to work'
Toby Courtauld, Chief Executive, said:
"We are pleased to report on a productive first half, delivering
valuation gains, strong leasing at levels well ahead of rental
values, exceptional development returns and profitable asset
sales.
Whilst activity is not yet back to pre-COVID levels, it is clear
that London's economy and its property markets are recovering with
office workers and shoppers both returning to the main commercial
districts of the capital. Simultaneously, we are seeing healthy
growth in office jobs which is driving renewed occupier demand for
City and West End offices, up by more than 50% since this time last
year.
Encouragingly, we are successfully capturing this market
momentum in our own spaces, leasing more in the first half than in
the previous two years put together and beating rental values by
9.8% overall. With our market-leading, customer-first, approach we
are addressing today's key occupier themes of flexibility, service
delivery and amenity provision, in well designed, tech-enabled and
sustainable spaces. So, whilst market volatility is possible in the
near term, we expect these positive leasing trends to continue. As
a result, and assuming no further COVID restrictions, we have
raised our guidance for our rental values and now forecast that
they will rise for the full year in the range of +2% to +5%.
With our portfolio that is full of opportunity, including a
circa GBP900 million near-term development programme, our strong
balance sheet with plentiful liquidity and our motivated and
engaged team, we have the ability to capitalise on London's
recovery. GPE is in great shape and we look to our future with
confidence."
(1) All values include share of joint ventures unless otherwise
stated (2) On a like-for-like basis (3) In accordance with EPRA
guidance (4) We prepare our financial statements using IFRS,
however we also use a number of adjusted measures in assessing and
managing the performance of the business. These include
like-for-like figures to aid in the comparability of the underlying
business and proportionately consolidated measures, which represent
the Group's gross share of joint ventures rather than the net
equity accounted presentation included in the IFRS financial
statements. These metrics have been disclosed as management review
and monitor performance of the business on this basis. We have also
included a number of measures defined by EPRA, which are designed
to enhance transparency and comparability across the European Real
Estate sector, see note 7 to the financial statements. Our primary
NAV metric is EPRA NTA which we consider to be the most relevant
measure for the Group.
Contacts:
Great Portland Estates plc +44 (0) 20 7647 3000
Toby Courtauld, Chief Executive
Nick Sanderson, Chief Financial & Operating
Officer
Stephen Burrows, Director of Financial Reporting
& IR
Finsbury Group +44 (0) 20 7251 3801
James Murgatroyd
Gordon Simpson
There will be a live webinar session via Zoom at 8.30am today,
which will include a Q&A session with the GPE management team.
Please use the following link to join the webinar:
https://us06web.zoom.us/j/86102304238
Passcode: 191121
A video presentation of the results by Toby Courtauld and Nick
Sanderson is available, along with accompanying presentation
materials and appendices, at:
www.gpe.co.uk/investors/latest-results
For further information see www.gpe.co.uk or follow us on
Twitter at @GPE_plc
Disclaimer
This announcement contains certain forward-looking statements.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Actual outcomes and results may differ materially from any outcomes
or results expressed or implied by such forward-looking
statements.
Any forward-looking statements made by or on behalf of Great
Portland Estates plc (GPE) speak only as of the date they are made
and no representation or warranty is given in relation to them,
including as to their completeness or accuracy or the basis on
which they were prepared. GPE does not undertake to update
forward-looking statements to reflect any changes in GPE's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
Information contained in this announcement relating to the
Company or its share price, or the yield on its shares, should not
be relied upon as an indicator of future performance.
To view the accompanying graphics please paste the below into
your web browser
http://www.rns-pdf.londonstockexchange.com/rns/8871S_1-2021-11-18.pdf
Half Year Results
Our market
Introduction
The last quarter of 2020 marked the low in activity levels in
London's occupational markets, as the UK returned to lock-down on
the resurgence of COVID-19. The subsequent successful rollout of
the vaccination programme has helped turn the tide on the impact of
the pandemic, greatly improving business and consumer confidence
and returned the UK economy to growth. Activity levels have also
recovered from the lows of 2020 in both the central London
occupational and investment markets, particularly in the West End.
In our occupational markets, the quarter to 30 September 2021 saw
the strongest quarterly take up since the start of the COVID-19
pandemic but remained below the long run average. In the investment
market, whilst activity has picked up with the easing of domestic
restrictions, activity levels remain modest given travel
restrictions for many international investors. However, we continue
to see strong demand for high-quality, well located assets and
development opportunities with a rapid route back to market.
Global economic recovery
Economic growth across developed economies has recovered as the
impact of the pandemic has been managed through mass vaccination
programmes, widespread government support and the subsequent
reopening of economies. Global GDP has now surpassed its
pre-pandemic level and the IMF forecasts global GDP to grow by 6.0%
and 4.9% in 2021 and 2022 respectively. However, the recovery
remains uneven with vaccine access the principal differentiating
factor between countries' relative economic performance. As the
impact of the pandemic has abated, the rebound in global demand,
together with depleted inventories and supply chain disruption, has
increased commodity prices and transportation costs around the
world.
In the UK, the economy has responded strongly as domestic
COVID-19 restrictions have ended, with GDP growth of 5.5% in the
quarter to June 2021 and a further 1.3% in the quarter to
September. However, rising oil and gas prices, combined with the
end of Government support schemes, are expected to impact household
spending power and moderate the recovery from here. Accordingly,
whilst many commentators anticipate price rises to be transitory,
Oxford Economics has trimmed its GDP expectations to 6.9% for 2021,
although the near-term forecast for the UK remains at the upper end
of the G7 countries.
Stronger activity in occupational markets
As the economy has strengthened, activity levels in our
occupational markets have continued to recover, with many
businesses committing to new space or resuming a search that had
been paused due to the pandemic. As a result, central London office
take-up was 4.3 million sq ft, considerably higher than the
preceding six months and closer to the ten-year average of 6.0
million sq ft. CBRE estimate that central London active demand at
September has also improved, totalling 9.6 million sq ft, an
increase of 2.0 million sq ft since March and back to levels last
seen in 2019. We have also seen a rebound in the flexible office
sector with Workthere reporting that enquiries are up 30% on
pre-pandemic levels. However, improving levels of take up and
demand have yet to reduce central London availability which remains
elevated at 25.7 million sq ft, consistent with 31 March 2021 and
ahead of the ten-year average of 15.2 million sq ft. The vacancy
rate has also continued to rise reaching 9.1% at September 2021.
Whilst the amount of available space remains high, the proportion
that is either newly completed or under construction remains low at
only 25% of total stock (6.4 million sq ft). This continued
scarcity of high-quality space has provided relative support for
prime rents which is demonstrated by a period of strong leasing for
the Group, including our recent pre-let of all the offices at 50
Finsbury Square, EC2.
Looking forward, the future supply of new space remains limited.
In central London, CBRE estimate that 12.1 million sq ft of new
space is currently under construction, of which a third is already
pre-let. Whilst CBRE estimate that 35.0 million sq ft of new
speculative buildings could be delivered before the end of 2026,
construction has yet to start on more than 75% of that space. This
lack of availability, combined with a rebound in the UK economy,
will in our view support the demand for high-quality spaces,
further encourage pre-letting activity and support prime rents in
the second half of the year.
West End occupational market
Over the six months to 30 September 2021, West End office
take-up was 2.0 million sq ft, up 112% on the preceding six months
and the highest quarter since September 2017. Current availability
of 6.6 million sq ft has started to decline from a peak of 7.1
million at 31 December 2020. Vacancy rates also declined marginally
to 5.5% at 30 September 2021, with Grade A vacancy estimated by
CBRE to be only 3.6%. CBRE reported that prime office rental values
increased over the last six months by GBP10 per sq ft to GBP120 per
sq ft, with rent frees six and a half months lower at 22.5 months
on a ten-year lease.
The UK retail environment continues to be challenged. Whilst
consumer confidence rebounded in the first half of 2021, and
returned to pre-COVID-19 levels, confidence fell in the quarter to
September 2021 for the first time since Q4 2020. City centres have
continued to suffer as consumers have been slower to return to high
density locations, particularly if they are reliant on public
transport. Footfall in the West End has recovered, particularly for
leisure activities, to levels around 60% higher than a year ago,
albeit they remain around 30% below pre-pandemic levels. According
to Savills, vacancy on Oxford Street, Regent Street and New Bond
Street has stabilised at 14.0%, 13.1% and 13.6% respectively, with
CBRE reporting prime Zone A rents on Oxford Street, Regent Street
and Bond Street unchanged at GBP631 per sq ft, GBP593 per sq ft and
GBP1,702 per sq ft respectively.
City, Midtown and Southbank occupational markets
Over the six months to 30 September 2021, City office take up
remained subdued at 1.2 million sq ft an increase of 21% on the
prior six months but materially below the ten-year average of 2.4
million sq ft. Availability has also increased and now stands at
11.7 million sq ft up from 11.5 million sq ft at 31 March 2021.
However, there are some early signs of improvement with the amount
of space under offer up more than 150% since March to 1.6 million
sq ft, 17.5% ahead of the 10-year average. The City vacancy rate
remains greater than that of the West End and has continued to rise
to 12.6% at September 2021, although Grade A vacancy was estimated
by CBRE to be lower at 8.9%, up from 8.4% at March. CBRE also
reported that City prime rental values remain unchanged from March
at GBP70.00 per sq ft, with rent free periods on a ten-year lease
marginally lower at 24-27 months (27 months at 31 March 2021).
Take-up in Midtown and Southbank was 0.9 million sq ft,
significantly up from 0.2 million sq ft for the preceding six
months. Prime office rental values increased by GBP7.50 and GBP2.50
per sq ft to GBP85.00 and GBP67.50 per sq ft for Midtown and
Southbank respectively. Rent frees reduced to 24-27 months on
average on a ten-year lease.
Our investment markets
Activity in our investment markets has followed the trajectory
of the pandemic, with lockdowns and restrictions in international
travel making sellers cautious and hampering the ability of buyers
to inspect potential acquisitions and conduct effective due
diligence. With restrictions easing, office investment deals in the
six months to 30 September 2021 were GBP5.0 billion, down 8.5% on
the prior six months an increase of nearly 200% on the equivalent
period last year.
Today we estimate that there is currently GBP6.7 billion of
stock on the market available to buy, up from GBP6.3 billion in
May, whilst the weight of money seeking to invest remains elevated
at GBP40.1 billion. Demand for London real estate has remained
robust particularly for high quality assets and London offices
remain attractively priced when compared to other major global
cities. This continued demand has placed downward pressure on prime
office yields over the six months, with CBRE reporting prime office
yields of 3.25% for the West End (down 25 basis points) and 3.75%
in the City (down 25 basis points). Given continued challenges in
core retail markets, retail yields continued to soften over the
period, with CBRE reporting that retail yields moved out to 4.0%
for Regent Street and 4.25% for Oxford Street with Bond Street
remaining stable at 2.75%.
Near-term market outlook
Given the cyclical nature of our markets, we actively monitor
numerous lead indicators to help identify key trends in our
marketplace. Over the last six months, given the continued economic
recovery, our property capital value indicators have seen further
improvement from those we reported in May. Today, we expect
investment activity in the central London commercial property
market to trend towards more normalised levels and prime yields to
continue to come under downward pressure given the continued demand
for central London real estate. In the occupational market, given a
strong leasing and rental performance of the portfolio in the first
half of the year, we have upgraded our rental value growth range
for the financial year to 31 March 2022 to between +2% and +5%,
predominantly driven by the positive performance of our office
portfolio.
Our business
Our business is accompanied by graphics (see Appendix 1 and
3)
Our leasing activities
During the six months to 30 September 2021, we have seen growing
momentum in our occupational markets. With a strong demand,
particularly for our prime Grade A and flex office products, we
have continued to let space ahead of ERV. Key highlights
include:
-- 35 new leases were signed during the first half (2020: 9
leases), generating annual rent of GBP27.0 million (our share:
GBP21.8 million; 2020: GBP6.1 million), market lettings 9.8% above
March 2021 ERVs (offices; 9.3%; retail 11.1%);
-- three rent reviews securing GBP2.0 million p.a. (our share:
GBP2.0 million; 2020: GBP3.7 million) of rent were settled during
the half year, in line with the previous passing rent and 1.2%
ahead of ERV;
-- total space covered by new lettings, reviews and renewals
during the first half was 387,200 sq ft (2020: 136,400 sq ft);
-- 83% (by area) of the 33 leases with breaks or expiries in the
twelve months to 30 September 2021 were retained, re-let, or are
under offer, leaving 20,500 sq ft still to transact; and
-- following the successful leasing period, the Group's rent
roll has increased by 6.2% to GBP101.1 million.
Key leasing transactions
The table below summarises our leasing transactions in the
period:
Leasing Transactions Three months Six months Six months
ended 30 September ended 30 September ended 30 September
2021 2021 2020
--------------------------- -------------------- -------------------- --------------------
New leases and renewals
completed
Number 19 35 9
GPE share of rent p.a. GBP12.8 million GBP21.8 million GBP6.1 million
Area (sq ft) 174,200 358,800 77,300
Rent per sq ft (including GBP82 GBP76 GBP78
retail)
Rent reviews settled
Number - 3 5
GPE share of rent p.a. GBPnil GBP2.0 million GBP3.7 million
Area (sq ft) - 28,400 59,100
Rent per sq ft (including GBPnil GBP72 GBP62
retail)
---------------------------- -------------------- -------------------- --------------------
Note: Includes joint ventures at share
Notable transactions during the six months included:
-- Inmarsat Global Limited pre-let all 121,800 sq ft of office
space at 50 Finsbury Square, EC2, on a
20-year lease (15-year break) paying an annual rent of GBP 8.5m, 11.2% above March 2021 ERV;
-- the leasing of the entirety of 103/113 Regent Street, W1 held
in our Great Ropemaker Partnership (GRP) to Uniqlo Europe Limited
(Uniqlo). The property, comprising 56,850 sq ft of mixed-use retail
and office, was previously let to C-Retail Ltd (Superdry). GRP
simultaneously surrendered the Superdry lease for GBP7.9 million
and granted a new lease to Uniqlo;
-- the completion of five new office leases at our completed
development Hanover Square, W1, including at Medici Courtyard
(15,400 sq ft) to KKR and UPL for a combined GBP1.85m p.a. on a
14-year (six-year break) and 15-year (ten-year break) term
respectively. Taken together, 95% of the office space at the scheme
is now let. We have also completed two further retail lettings
totalling 6,400 sq ft; and
-- our fully fitted and fully managed space at 16 Dufour's
Place, W1 (16,300 sq ft) which was fully let within six months of
launch with the two most recent lettings at more than GBP200 per sq
ft. We continue the roll out of our flexible offering to other
buildings, with a further three lettings recently completed.
At 30 September 2021, the Group's vacancy rate (including share
of joint ventures) was 14.0% up from 13.2% at 31 March 2021 with
the increase primarily due to the completion of 1 Newman Street and
70/88 Oxford Street, W1. Excluding recently completed developments,
the vacancy rate was 5.1% down from 6.6% at 31 March 2021. The
average passing rent across our office portfolio was GBP62.50 per
sq ft, up from GBP56.70 per sq ft at 31 March 2021.
Since 30 September 2021, our leasing activity included:
-- the completion of five new leases generating GBP1.7 million
(our share: GBP1.7 million) of annual rent (13,300 sq ft), with
market lettings 12.0% above March 2021 ERVs; and
-- a further 43,500 sq ft of space is under offer which would
deliver approximately GBP2.4 million p.a. in rent (our share:
GBP2.3 million), with market lettings 5.9% ahead of September ERVs
or 7.1% above March 2021 ERVs.
Innovating with our flexible space
Quickly evolving patterns of work are changing what many
occupiers want from their office space and we are meeting this
demand with our innovative flexible spaces. Today our flexible
spaces total 286,000 sq ft, or around 15% of our office portfolio.
We have also expanded our offering with 16 Dufour's Place, W1,
which we completed in the summer . This 16,300 sq ft building will
provide occupiers with fully fitted, fully managed, tech-enabled
office space with flexibility of lease term. During the period, we
leased the entirety of the building at an average all-in rent of
GBP191 per sq ft, some 10.5% ahead of the valuer's March 2021 flex
ERV . Given this success, we have launched a further six spaces
(35,000 sq ft) and these are already 65% let or under offer.
Looking forward, we have further ambitions for growth and are
appraising an additional 217,000 sq ft across our existing
portfolio, which if converted, would take our flex offerings to 27%
of our office portfolio.
Improved rent collection
Our rental collection performance has continued to improve from
the lows of summer 2020. For the six months to 30 September 2021,
of the GBP41.6 million of rents billed (including our share of
joint ventures) we have collected 88% to date and have continued to
collect outstanding balances from the prior year. This performance
has improved further for the September quarter, as we collected 85%
of all rent billed within 7 working days. During the half year,
none of our occupiers went into administration (March 2021: two).
All of our office buildings remain open for business, with levels
of occupier utilisation currently around 57% of full occupancy and
around 94% of our retail units are open. At 30 September 2021, we
held rent deposits and bank guarantees totalling GBP20.0 million
(March 2021: GBP17.2 million).
Our development activities
Within our 1.4 million sq ft development pipeline we have
continued to make excellent progress with both our committed and
four near-term schemes. Since March 2021, we have successfully
completed one development and have pre-let the entirety of the
offices at 50 Finsbury Square, EC2, where we are currently on-site.
Furthermore, during the period, we achieved resolution to grant
planning at two of our four exciting near-term schemes, the
earliest of which has a potential commencement in early 2022.
One development completion; first retail letting achieved
At 1 Newman Street & 70/88 Oxford Street, W1 we completed
the 122,700 sq ft office and retail building in July, which sits
directly opposite the Dean Street entrance to the Tottenham Court
Road Crossrail station. In June, we agreed the letting of all of
the basement space to Boom Battle Bar for a new competitive
socialisation offer. Together with the 39,600 sq ft of space
pre-leased to Exane, the new building is now 37% let, and we have
good interest in the majority of the offices and retail interest
continues to improve.
One committed scheme, office space 100% pre-let
At 50 Finsbury Square, EC2, the refurbishment of the 129,200 sq
ft building, including construction of the new roof pavilion, is
progressing well, and we expect completion in late 2022. Our
extensive repositioning will extend the office floor plates within
the existing frame of the building, create a large reception with a
concierge as well as an improved retail, leisure and amenity offer.
The new building will be a sustainability, wellbeing and technology
exemplar delivering on all four pillars of our Sustainability
Statement of Intent and is expected to be our first building
certified as Net Zero Carbon. We committed to the refurbishment at
the start of the year and, testament to the quality of the
building, in August we pre-let all of the offices to Inmarsat
Global Limited (see above). We currently expect the scheme to
deliver a profit on cost of 38.7%.
At 30 September 2021, our committed development property was
valued at GBP115.9 million and required GBP43.3 million of capital
expenditure to complete. Beyond this, the team continues to prepare
our substantial development pipeline of a further eight schemes
with prospective deliveries from the mid-2020s and beyond.
Four near term schemes; resolution to grant planning achieved at
2 Aldermanbury Square and French Railways House and 50 Jermyn
Street
Following being awarded resolution to grant planning permission
at 2 Aldermanbury Square, EC2 in June, we signed the s106 Agreement
with the City of London, appointed a contractor for the demolition,
enabling and substructure works and are in discussion with a number
of main contractors ahead of our potential January 2022 start date.
Our proposed development will substantially increase the size of
the building to 319,800 sq ft (up from 176,000 sq ft) and will
incorporate our sustainability aspirations from the outset, with
the aim of delivering our second net zero carbon building. The
scheme also includes a number of public realm and amenity
improvements that will have a positive impact on the local area and
improve accessibility to the western entrance of the Liverpool
Street Crossrail station. To date we have been greatly encouraged
by the strong
occupier interest in the scheme.
In July, we obtained resolution to grant planning permission at
French Railways House and 50 Jermyn Street, SW1, part of our
Piccadilly Estate. Our proposed major office-led redevelopment will
provide 67,700 sq ft (up from 54,600 sq ft) of new Grade A space.
The proposed highly sustainable building will be in keeping with
surrounding conservation area and heritage assets, will reuse
substantial elements of the existing building's substructure to
reduce its carbon footprint and will include a significant amount
of new amenity including a number of external spaces including a
communal roof terrace. The development of the building is subject
to Crown consent.
At New City Court, SE1, we have amended our proposals, lowering
the height whilst maintaining area, to materially increase the size
of the existing 98,000 sq ft building to 389,100 sq ft and we
expect a planning determination later this year.
At Minerva House, SE1, we are finalising plans for a 139,400 sq
ft major office refurbishment. We are already in discussions with
Southwark and aim to submit our planning application later this
month. Our proposals will reposition this building taking full
advantage of its river frontage and, by adding additional storeys,
we will be able to create outdoor terraces and amenity space with
commanding views over central London. A planning application for
the scheme was submitted in early November.
In total, with a further four schemes in the medium-term
pipeline, our total development programme totals 1.4 million sq ft
and covers 32% of GPE's existing portfolio and will provide the
foundation of our growth over the coming decade.
Our investment activities
Following the UK moving out of lockdown during the spring,
activity in our investment markets is recovering to more normalised
levels. Despite activity picking up, particularly for long-let,
high quality buildings, opportunities providing attractive value
remain limited. We continue to monitor the market closely and have
more than GBP900 million of potential acquisitions currently under
review. Our focus remains on development and repositioning
opportunities, buildings that would suit our flex products and
assets that are challenged from a sustainability perspective.
However, given the prospective returns presented by our development
pipeline, the hurdle for new acquisitions remains high. As a
result, we retained our discipline and made no acquisitions in the
period.
Crystallising surpluses at 160 Old Street, EC1
In September, the Great Ropemaker Partnership (GRP), our 50:50
joint venture with BP Pension Fund, sold 160 Old Street, EC1 to a
fund advised by J.P. Morgan Global Alternatives. The headline price
of GBP 181.5 million reflected a 5% premium to the March 2021
valuation. The building was comprehensively refurbished by GRP in
2018 to provide 166,300 sq ft of high-quality accommodation
arranged over lower ground, ground and eight upper floors. The
office space is 70% let to Turner Broadcasting to 2034. The balance
of the office and retail space is let to a variety of occupiers
including Robert Bosch Limited, Pusher Limited and Sensat Surveying
Limited together with a small amount of vacant space and some
near-term asset management opportunities. The total contracted
annual rental income was GBP7.9 million, with a weighted average
unexpired lease term of approximately 10.3 years to the earlier of
breaks or expiries.
Social impact, sustainability and technology
Social impact strategy launched
Today, we announced the launch of our Social Impact Strategy,
building on our Sustainability Statement of Intent 'The Time is
Now' launched in May 2020 and our existing community strategy.
Our strategy sets out how we will deliver the third pillar of
our Sustainability Statement of Intent, namely to create a lasting
positive social impact in our communities and GBP10 million of
social value by 2030.
Our strategy is intrinsically linked to Our Roadmap to Net Zero,
recognising the need to support a just transition to a low carbon
economy. We've incorporated our approach to diversity and inclusion
within our social impact strategy. Our approach is underpinned by
four pillars:
-- Enabling healthy and inclusive communities
-- Championing diverse skills and accessible employment opportunities
-- Supporting the growth of local business and social enterprise
-- Connecting people with urban nature
Further details of our strategy can be found on our website.
Sustainable Finance Framework
In July, we published our Sustainable Finance Framework in
respect of potential future debt issuance. This follows the Group's
innovative GBP450 million ESG-linked revolving credit facility (the
first of its kind by a UK REIT) issued in January 2020.
The Framework provides a platform for us to potentially issue
debt instruments to finance or refinance projects that have a
positive environmental and/or social impact, while supporting the
Group's sustainability strategy and wider business strategy. The
Framework is aligned to internationally recognised principles
issued by the International Capital Markets Association (ICMA) and
the Loan Markets Association (LMA).
The Hickman achieves a SmartScore 'Platinum' rating
In July, WiredScore announced that The Hickman, E1 was the first
building globally to achieve the prestigious SmartScore 'Platinum'
rating. The Hickman is a comprehensive redevelopment completed in
September 2020, delivering 75,300 sq ft of highly tech enabled and
sustainable workspace.
SmartScore, the certification for smart buildings, was launched
in April 2021 to provide a global standard to identify
best-in-class smart buildings that deliver an exceptional user
experience, drive cost efficiency, meet high standards of
sustainability and are fully future-proof. The Platinum rating
demonstrates our commitment to continuous technological innovation
to enhance the occupier workplace experience. The combination of
the digital twin to optimise operational energy, together with the
integration of sesame(R) and other building technologies means that
occupiers and their staff enjoy a more sustainable and productive
workplace.
Valuation
Valuation is accompanied by graphics (see Appendix 2)
The valuation of the Group's properties was GBP 2,457.0 million
as at 30 September 2021, reflecting a valuation increase of 2.0% on
a like-for-like basis since 31 March 2021. At 30 September 2021,
the wholly-owned portfolio was valued at GBP1,918.5 million and the
Group had three active joint ventures which owned properties
valued
at GBP538.5 million (our share) by CBRE.
Development gains supporting value increase
The key drivers behind the Group's valuation movement for the
six-month period were:
-- development gains - the valuation of our committed
development properties increased by 29.7% on a like-for-like basis
to GBP115.9 million during the period. Our development returns were
supported by securing a major pre-letting, which was ahead of the
valuer's assumptions;
-- portfolio management - a very strong six months, 38 new
leases, rent reviews and renewals were completed, securing GBP 23.8
million (our share) of annual income, supporting the valuation. At
30 September 2021, the portfolio was 6.5% reversionary;
-- rental value increase - since the start of the financial
year, rental values increased by 1.6% on a like-for-like basis,
with our office portfolio up by 2.3% and our retail portfolio
reducing by 1.0%; and
-- low investment yields - equivalent yields decreased
marginally by 10 basis points over the period.
At 30 September 2021, the portfolio true equivalent yield was 4.5%.
Including rent from pre-lets and leases currently in rent free
periods, the topped up initial yield of the investment portfolio at
30 September 2021 was 3.5%, 30 basis points lower than the start of
the financial year.
Whilst the overall valuation increased by 2.0% during the six
months on a like-for-like basis, elements of the portfolio
continued to show greater variation. We continued to see office
portfolio values outperform retail with our office properties
increasing by 2.8% compared to a 0.8% fall in retail values, as
weaker retailer sentiment reduced ERVs. Furthermore, short
leasehold properties (<100 years), which represent 11% of the
portfolio, reduced in value by 1.7% compared to an increase of 2.5%
in the rest of the portfolio, as investor demand for shorter
leasehold assets continued to lag that of freehold properties. Our
joint venture properties increased in value by 4.0% over the
period, largely attributable to the strong leasing activity at our
recently completed development Hanover Square, W1, while the
wholly-owned portfolio increased by 1.4% on a like-for-like basis,
supported by our committed developments as detailed above.
The Group delivered a total property return (TPR) for the six
months to 30 September 2021 of 3.7% (2020: -5.1%), compared to the
Central London MSCI quarterly benchmark of 2.9%, and a capital
return of 2.2% (versus 1.3% for MSCI). This relative outperformance
resulted from our office development and leasing successes in the
period.
Our financial results
Our financial results are accompanied by graphics (see Appendix
3)
We prepare our financial statements using IFRS. However, we also
use a number of Alternative Performance Measures (APMs) to help
explain the performance of the business. These include quoting a
number of measures on a proportionately consolidated basis to
include joint ventures, as it best describes how we manage the
portfolio, like-for-like measures and using measures prescribed by
European Public Real Estate Association (EPRA). The measures
defined by EPRA are designed to enhance transparency and
comparability across the European real estate sector.
Reconciliations of APMs are included in note 7 to the accounts.
We calculate net assets and earnings per share in accordance
with EPRA's Best Practice Recommendations. The recommendations are
designed to make the financial statements of public real estate
companies clearer and more comparable across Europe enhancing the
transparency and coherence of the sector. EPRA's Best Practice
Recommendations include three NAV metrics: EPRA Net Tangible Assets
(NTA), Net Reinvestment Value (NRV) and Net Disposal Value (NDV).
We consider EPRA NTA to be the most relevant measure for the Group
and the primary measure of net asset value and relevant
reconciliations between IFRS numbers and EPRA metrics are included
in note 7 to the accounts.
Valuation gains drive 2.2% increase in EPRA NTA per share
IFRS NAV per share and EPRA NTA per share at 30 September 2021
were 796 pence per share, an increase of 2.2% over the last six
months, largely due to the 2.0% like-for-like increase in the value
of the property portfolio. The main drivers of the 17 pence per
share increase in NTA from 31 March 2021 were:
-- the increase of 17 pence per share arising from the
revaluation of the property portfolio;
-- EPRA earnings for the period of 7 pence per share increased NTA;
-- the final dividend of 8 pence per share reduced NTA; and
-- other movements increased NTA by 1 pence per share.
The EPRA NTA increase of 2.2%, combined with the payment of last
year's final dividend of 7.9 pence per share, delivered a total
accounting return for the six months to 30 September 2021 of 3.2%
(2020: -6.9%).
At 30 September 2021, the Group's net assets were GBP2,015.3
million, up from GBP1,971.6 million at 31 March 2021, with the
increase largely attributable to the increase in property
valuation. EPRA NDV per share was 791
pence at 30 September 2021 compared to 777 pence at 31 March 2021 (up 1.8%).
Earnings reduced, in line with guidance and our portfolio
activities
Revenue from our wholly-owned properties was largely unchanged
year on year at GBP42.2 million, down GBP0.2 million on the prior
period. Within this, gross rental income reduced by GBP3.4 million
primarily due to achieving vacant possession in June last year from
Bloomberg, ahead of our development start at 50 Finsbury Square,
EC2 and increased portfolio vacancy. The reduction in rental income
was largely offset by an increase in joint venture fees, up GBP3.5
million on last year to GBP4.3 million, including the disposal fee
for 160 Old Street, EC1 as well as an increase in portfolio
management transactions.
Adjusting for acquisitions, disposals and transfers to and from
the development programme, like-for-like rental income (including
from joint venture properties) decreased 6.2% on the prior period
after estimated credit loss provisions.
Cost of sales increased from GBP10.1 million to GBP13.7 million
for the for the period to 30 September 2021, with the increase
primarily due to an increase in vacancy expenses and higher costs
associated with our portfolio initiatives in joint ventures,
including the sale of 160 Old Street, EC1.
As the central London economy continues to reopen, we have seen
a continued improvement in collection rates for both the June and
September 2021 quarters. As a result, of the GBP4.8 million rent
outstanding at 30 September 2021, we provided GBP3.1 million as an
expected credit loss in the period, GBP 0.6 million lower than last
year and representing around 65% of outstanding balances. The
majority of the provision relates to balances with occupiers from
the retail, hospitality and leisure sectors.
Administration costs were GBP16.2 million, an increase of GBP3.3
million, primarily as a result of increased headcount to support
our enhanced operational capabilities and an increase in provisions
for performance related pay.
EPRA earnings from joint ventures (excluding fair value
movements) were GBP9.8 million, an increase of GBP5.2 million from
the prior year, largely driven by the Superdry surrender premium of
GBP7.9 million (our share: GBP3.9 million) at 103/113 Regent
Street, W1, coupled with our letting successes at our recently
completed Hanover Square development. In total, our joint ventures
delivered a profit before tax of GBP26.8 million (2020: GBP56.5
million loss).
Gross interest on our debt facilities was GBP7.2 million, up
GBP1.8 million on the prior period. This increase was primarily due
to drawing on the Group's new GBP150 million 2.77% private
placement notes in November last year. We capitalised interest of
GBP4.0 million (2020: GBP2.8 million) . As a result, the Group had
net finance costs (including interest receivable) of GBP0.1 million
(2020: income of GBP0.4 million).
EPRA earnings were GBP 18.7 million, 9.2% lower than for the
same period last year. Revaluation gains together with EPRA
earnings resulted in an IFRS profit after tax of GBP62.2 million
(2020: GBP 154.8 million loss). The basic and diluted earnings per
share for the period was 24.6 pence, compared to 61.2 pence loss
per share for 2020. Diluted EPRA earnings per share was 7.4 pence
(2020: 8.2 pence), a decrease of 9.8%, and cash earnings per share
was 5.1 pence (2020: 6.4 pence).
Results of joint ventures
The Group's net investment in joint ventures was GBP 563.0
million, a decrease from GBP626.4 million at 31 March 2021, largely
due a partner distribution after the profitable disposal of 160 Old
Street, EC1 partially offset by a 4.0% like-for-like increase in
value of the property portfolio. Our share of joint venture net
rental income was GBP14.8 million, up from GBP7.2 million last year
primarily as a result of receiving a one-off surrender premium of
GBP3.9 million (our share), as well as increased leasing activity
at our recently completed Hanover Square development. The
underlying joint venture pro ts are stated after charging GBP 4.3
million of GPE management fees (2020: GBP0.8 million) with the
increase attributable to an increase in leasing transactions as
well as a disposal fee for the sale of 160 Old Street, EC1.
Overall, our three active joint ventures represent an important
proportion of the Group's business. At 30 September 2021, joint
ventures represented 21.9% of the portfolio valuation, 27.9% of net
assets and 23.1% of rent roll (31 March 2021: 24.6%, 31.8% and
25.2% respectively).
Strong financial position; LTV low at 16.7%
The Group's consolidated net debt decreased to GBP438.6 million
at 30 September 2021, compared to GBP477.5 million at 31 March
2021. The decrease was largely due to the repayment of our
revolving credit facility (RCF) following the disposal of 160 Old
Street, EC1, partly offset by on-going development capital
expenditure across the Group of GBP38.2 million in the six months.
Group gearing decreased to 22.0% at 30 September 2021 (31 March
2021: 24.6%). Including cash balances in the joint ventures, total
net debt was GBP409.5 million (31 March 2021: GBP451.0 million)
equivalent to a loan to property value of 16.7% (31 March 2021:
18.4%). The Group is operating with substantial headroom over its
debt covenants. At 30 September 2021, property values would have to
fall by around 61% before covenant breach. Through the cycle, the
Group aims to maintain a target LTV range between 10% and 35%,
consistent with our low leverage levels over the last 10 years. Due
in part to both our very low levels of low-cost debt, and the
treatment of capitalised interest under our Group covenants, our
interest cover ratio for the period was once again not measurable.
Excluding the benefit of capitalised interest, our interest cover
was 7.0 times.
The Group's weighted average cost of debt, including fees and
joint venture debt, for the period was 2.8 %, 10 basis points
higher than at 31 March 2021 as we reduced amounts drawn on the RCF
towards the end of the period, our lowest rate debt financing. The
weighted average interest rate (excluding fees) at the period end
was 2.7%, up from 2.5% at 31 March 2021 as a result of drawing on
our new GBP 150 million 2.77% US private placement notes at the end
of 2020. At 30 September 2021, 100% of the Group's total debt was
at fixed or hedged rates (31 March 2021: 91%). Our weighted average
drawn debt maturity was 7.9 years at 30 September 2021 (31 March
2021: 8.1 years).
Taxation
The tax charge in the income statement for the half year was
GBP0.1 million (2020: GBPnil million) and the effective tax rate on
EPRA earnings was 0% (2020: 0%). The majority of the Group's income
is tax-free as a result of its REIT status. Other allowances were
available to set against non-REIT profits.
As a REIT, the majority of rental profits and chargeable gains
from our property rental business are exempt from UK corporation
tax, provided we meet a number of conditions including distributing
at least 90% of the rental income profits of this business (known
as Property Income Distributions (PIDs)) on an annual basis. These
PIDs are then typically treated as taxable income in the hands of
shareholders. During the six months ended 30 September 2021, the
Group paid a PID of GBP20.0 million.
The Group's REIT exemption does not extend to either profits
arising from the sale of trading properties or gains arising from
the sale of investment properties in respect of which a major
redevelopment has completed
within the preceding three years.
Dividends
The Board has declared an interim ordinary dividend of 4.7 pence
per share (2020: 4.7 pence) which will be paid on 5 January 2022.
2.4 pence per share of this dividend will be a REIT Property Income
Distribution (PID) in respect of the Group's tax-exempt property
rental business.
Principal risks and uncertainties
The Group recognises that the successful management of risk is
critical to enable delivery of the Group's strategic priorities.
Ultimate responsibility for risk rests with the Board but the
effective day-to-day management of risk is integral to the way the
Group does business and its culture. The Board undertakes a robust
assessment of the principal risks facing the Group on a regular
basis.
The principal risks and uncertainties facing the Group for the
remaining six months of the financial year remain those detailed on
pages 84 to 97 of the 2021 Annual Report with no material
changes:
Structural retail changes Challenging planning environment
Climate change and decarbonisation People
----------------------------------
Pandemic Meeting customer needs
----------------------------------
London attractiveness Poor capital allocation decisions
----------------------------------
Failure to maximise returns from Health and safety
prevailing market conditions
----------------------------------
Failure to profitably develop Cyber security and infrastructure
the development programme failure
----------------------------------
Impact of property market dislocation
on financial leverage and banking
covenants
----------------------------------
The Board and Executive Committee continue to regularly review
the potential risks and impacts presented by the COVID-19 pandemic
and the Group's response, including in relation to both short-term
impacts and potential longer-term structural changes in working and
retail practices and the level and nature of demand for space in
central London. We continue to take steps to mitigate the threat
and disruption caused by the pandemic, working collaboratively with
our stakeholders, and we maintain our belief that London ' s appeal
as a global business capital will persist for the long term.
The Board also continues to closely monitor the UK government's
progress in resolving its international trading relationships after
it's exit from the EU, with the outcomes of many negotiations
remaining uncertain.
As a result of both the COVID-19 pandemic and Brexit, the
Group's forecasts and business plans continue to be prepared under
a variety of market scenarios to reflect a number of potential
outcomes.
Condensed group income statement
For the six months ended 30 September 2021
Six months Six months
Year to to 30 to 30
31 March September September
2021 2021 2020*
Audited Unaudited Unaudited
GBPm Notes GBPm GBPm
--------------- -------------------------------------------- ------- ---------------- --- ------------
88.5 Revenue 2 42.2 42.4
(24.7) Cost of sales 3 (13.7) (10.1)
63.8 28.5 32.3
(25.2) Administrative expenses (16.2) (12.9)
(7.7) Expected credit losses 12 (3.1) (3.7)
(0.1) Development management losses (0.2) (0.1)
--------------- ---------------- ------------
Operating profit before surplus/(deficit)
from investment property and results
30.8 of joint ventures 9.0 15.6
(156.8) Surplus/(deficit) from investment property 8 26.6 (114.3)
(76.2) Share of results of joint ventures 9 26.8 (56.5)
(202.2) Operating profit/(loss) 62.4 (155.2)
8.0 Finance income 4 4.1 4.0
(7.8) Finance costs 5 (4.2) (3.6)
(202.0) Profit/(loss) before tax 62.3 (154.8)
0.1 Tax 6 (0.1) -
--------------- -------------------------------------------- ------- ---------------- --- ------------
(201.9) Profit/(loss) for the period 62.2 (154.8)
--------------- -------------------------------------------- ------- ---------------- --- ------------
(79.8p ) Basic earnings/(loss) per share 7 24.6p (61.2p)
--------------- -------------------------------------------- ------- --- ------------- --- ------------
(79.8p ) Diluted earnings/(loss) per share 7 24.6p (61.2p)
--------------- -------------------------------------------- ------- --- ------------- --- ------------
15.9p Basic EPRA earnings per share 7 7.4p 8.2p
--------------- -------------------------------------------- ------- --- ------------- --- ------------
15.8p Diluted EPRA earnings per share 7 7.4p 8.2p
--------------- --- -------------------------------------------- ------- --- ------------- --- ------------
All results are derived from continuing operations in the United
Kingdom and are attributable to ordinary equity holders.
*As explained further in note 1, the directors have changed the
way in which the Group's performance is presented on the face of
the income statement. The underlying results have not been amended
and this modified presentation has had no effect on operating
profit or profit for the period.
Condensed group statement of comprehensive income
For the six months ended 30 September 2021
Six months
Year ended to 30 Six months
31 March September to 30 September
2021 2021 2020
Audited Unaudited Unaudited
GBPm GBPm GBPm
---------- ------------------------------------------------- ---------- ----------------
( 201.9) Profit/(loss) for the period 62.2 (154.8)
Items that will not be reclassified subsequently
to profit and loss:
0.8 Actuarial (loss)/gain on defined benefit scheme (0.7) (2.5)
(0.1) Deferred tax on actuarial loss on defined benefit 0.1 -
scheme
(201.2) Total comprehensive income/(expense) for the 61.6 (157.3)
period
---------- ------------------------------------------------- ---------- ----------------
Condensed group balance sheet
At 30 September 2021
As at As at As at
31 March 30 September 30 September
2021 2021 2020
Audited Unaudited Unaudited
GBPm Notes GBPm GBPm
--------- ------------------------------------- ----- ------------- ---------------
Non-current assets
1,894.5 Investment property 8 1,959.2 1,904.6
626.4 Investment in joint ventures 9 563.0 595.1
6.3 Property, plant and equipment 10 5.7 7.0
0.7 Pension asset 0.1 -
1.0 Other investments 11 1.5 0.5
2,528.9 2,529.5 2,507.2
--------- ------------------------------------- ----- ------------- ---------------
Current assets
19.5 Trade and other receivables 12 21.8 23.1
0.4 Corporation tax - 0.5
11.1 Cash and cash equivalents 6.8 7.2
--------- ------------------------------------- ----- ------------- ---------------
31.0 28.6 30.8
--------- ------------------------------------- ----- ------------- ---------------
2,559.9 Total assets 2,558.1 2,538.0
--------- ------------------------------------- ----- ------------- ---------------
Current liabilities
(55.1) Trade and other payables 13 (53.3) (54.0)
(55.1) (53.3) (54.0)
--------- ------------------------------------- ----- ------------- ---------------
Non-current liabilities
(488.6) Interest-bearing loans and borrowings 14 (445.4) (409.5)
(40.7) Obligations under head leases 16 (40.7) (40.7)
(3.9) Obligations under occupational leases 17 (3.4) (4.3)
- Pension liability - (2.8)
(533.2) (489.5) (457.3)
--------- ------------------------------------- ----- ------------- ---------------
(588.3) Total liabilities (542.8) (511.3)
--------- ------------------------------------- ----- ------------- ---------------
1,971.6 Net assets 2,015.3 2,026.7
--------- ------------------------------------- ----- ------------- ---------------
Equity
38.7 Share capital 15 38.7 38.7
46.0 Share premium account 46.0 46.0
326.7 Capital redemption reserve 326.7 326.7
1,560.0 Retained earnings 1,602.2 1,615.7
0.2 Investment in own shares 18 1.7 (0.4)
--------- ------------------------------------- ----- ------------- ---------------
1,971.6 Total equity 2,015.3 2,026.7
--------- ------------------------------------- ----- ------------- ---------------
779p Diluted net assets per share 7 796p 800p
--------- ------------------------------------- ----- ------------- -------------
779p Diluted EPRA NTA per share 7 796p 800p
--------- ------------------------------------- ----- ------------- -------------
Condensed group statement of cash flows
For the six months ended 30 September 2021
Six months Six months
Year to to to
31 March 30 September 30 September
2021 2021 2020
Audited Unaudited Unaudited
GBPm Notes GBPm GBPm
--------- --------------------------------------------- ----- ------------- -------------
Operating activities
(202.2) Operating profit/(loss) 62.4 (155.2)
238.5 Adjustments for non-cash items 19 (51.0) 173.3
(3.4) Increase in receivables (0.8) (6.9)
(6.3) Decrease in payables (1.9) (6.2)
--------- --------------------------------------------- ----- ------------- -------------
26.6 Cash generated by operations 8.7 5.0
(10.3) Interest paid (7.1) (5.3)
0.2 Interest received - 0.1
0.1 Tax refunded 0.4 -
16.6 Cash flow from operating activities 2.0 (0.2)
--------- --------------------------------------------- ----- ------------- -------------
Investing activities
8.3 Distributions from joint ventures 4.8 4.3
(45.3) Funds from/(to) joint ventures 89.5 (2.0)
(10.8) Investment in joint ventures - (3.0)
(60.8) Purchase and development of property (34.3) (30.8)
(0.4) Purchase of plant and equipment (0.1) (0.2)
(0.8) Purchase of other investments (0.5) (0.3)
(0.2) Sale of properties (0.4) (0.2)
----- -------------
(110.0) Cash flow from investing activities 59.0 (32.2)
--------- --------------------------------------------- ----- ------------- -------------
Financing activities
(202.0) Revolving credit facility repaid 14 (116.0) (35.0)
97.0 Revolving credit facility drawn 14 71.0 -
(2.8) Payment of lease obligations (1.5) (1.4)
149.1 Issue of private placement notes 14 - -
(31.7) Dividends paid 21 (18.8) (18.9)
--------- --------------------------------------------- ----- ------------- -------------
9.6 Cash flow (used in)/from financing activities (65.3) (55.3)
--------- --------------------------------------------- ----- ------------- -------------
(83.8) Net decrease in cash and cash equivalents (4.3) (87.7)
94.9 Cash and cash equivalents at 1 April 11.1 94.9
--------- --------------------------------------------- ----- ------------- -------------
11.1 Cash and cash equivalents at balance sheet 6.8 7.2
date
--------- --------------------------------------------- ----- ------------- -------------
Condensed group statement of changes in equity
For the six months ended 30 September 2021 (unaudited)
Share Capital Investment
Share premium redemption Retained in own Total
capital account reserve earnings shares equity
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------ --------- --------- ----------- --------- ------------ -------
Total equity at 1 April 2021 38.7 46.0 326.7 1,560.0 0.2 1,971.6
Profit for the period - - - 62.2 - 62.2
Actuarial loss on defined benefit scheme - - - (0.7) - (0.7)
Deferred tax on defined benefit scheme - - - 0.1 - 0.1
Total comprehensive income for the period - - - 61.6 - 61.6
------------------------------------------- --------- --------- ----------- --------- ------------ -------
Employee Long-Term Incentive Plan charge - - - - 2.0 2.0
Transfer to retained earnings - - - 0.5 (0.5) -
Dividends to shareholders - - - (19.9) - (19.9)
Total equity at 30 September 2021 38.7 46.0 326.7 1,602.2 1.7 2,015.3
------------------------------------------- --------- --------- ----------- --------- ------------ -------
Condensed group statement of changes in equity
For the six months ended 30 September 2020 (unaudited)
Share Capital Investment
Share premium redemption Retained in own Total
capital account reserve earnings shares equity
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------ --------- --------- ----------- --------- ------------ -------
Total equity at 1 April 2020 38.7 46.0 326.7 1,792.3 (0.6) 2,203.1
Loss for the period - - - (154.8) - (154.8)
Actuarial loss on defined benefit scheme - - - (2.5) - (2.5)
Total comprehensive income for the period - - - (157.3) - (157.3)
------------------------------------------- --------- --------- ----------- --------- ------------ -------
Employee Long-Term Incentive Plan charge - - - - 0.9 0.9
Transfer to retained earnings - - - 0.7 (0.7) -
Dividends to shareholders - - - (20.0) - (20.0)
Total equity at 30 September 2020 38.7 46.0 326.7 1,615.7 (0.4) 2,026.7
------------------------------------------- --------- --------- ----------- --------- ------------ -------
Condensed group statement of changes in equity
For the year ended 31 March 2021 (audited)
Share Capital Investment
Share premium redemption Retained in own Total
capital account reserve earnings shares equity
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------------------- --------- --------- ----------- --------- ------------ -------
Total equity at 1 April 2020 38.7 46.0 326.7 1,792.3 (0.6) 2,203.1
Loss for the period - - - (201.9) - (201.9)
Actuarial gain on defined benefit scheme - - - 0.8 - 0.8
Deferred tax on defined benefit scheme - - - (0.1) - (0.1)
Total comprehensive expense for the year - - - (201.2) - (201.2)
------------------------------------------ --------- --------- ----------- --------- ------------ -------
Employee Long-Term Incentive Plan charge - - - - 1.5 1.5
Transfer to retained earnings - - - 0.7 (0.7) -
Dividends to shareholders - - - (31.8) - (31.8)
Total equity at 31 March 2021 38.7 46.0 326.7 1,560.0 0.2 1,971.6
------------------------------------------ --------- --------- ----------- --------- ------------ -------
Condensed notes forming part of the half year results
1 Basis of preparation
The information for the year ended 31 March 2021 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditor ' s
report on those accounts was not qualified, did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying the report and did not contain
statements under section 498(2) or (3) of the Companies Act
2006.
The annual financial statements of Great Portland Estates plc
will be prepared in accordance with the requirements of the
Companies Act 2006 and in accordance with United Kingdom adopted
International Financial Reporting Standards (IFRSs). The condensed
set of financial statements included in this half-yearly financial
report has been prepared in accordance with United Kingdom adopted
International Accounting Standard 34 Interim Financial Reporting
and in accordance with the Disclosure, Guidance and Transparency
Rules of the United Kingdom's Financial Conduct Authority. The
accounting policies and methods of computation applied are
consistent with those applied in the Group's latest annual audited
financial statements. The nature of the Critical Judgements and Key
Sources of Estimation Uncertainty applied in the condensed
financial statements have remained consistent with those applied in
the Group's latest annual audited financial statements. The key
sources of estimation uncertainty are the valuation of the property
portfolio and the expected credit loss provision. There were no
critical judgements made in the preparation of the condensed
financial statements.
The income statement has been re-presented and this modified
presentation has had no effect on operating profit or profit for
the period. For further information on this modified presentation
please refer to note 1 of the 2021 annual report. The Group's
performance is not subject to seasonal fluctuations.
New standards, amendments and interpretations are in issue and
effective for the Group's financial year ended 31 March 2022, but
they do not have a material impact on the interim financial report.
There were no new or revised IFRSs, amendments or interpretations
in issue but not yet effective that are potentially material for
the Group and which have not yet been applied.
Going concern
The directors have considered the appropriateness of adopting
the going concern basis in preparing the financial statements for
the period ended 30 September 2021, with particular focus on the
significant impact COVID-19 is having on the macro-economic
conditions in which the Group is operating. This assessment is
based on the next 12 months of the Group's financial forecasts,
including a going concern scenario which included the following key
assumptions:
- a 31 % decline in the valuation of the property portfolio;
and
- a 2.7% fall in rental income; and
- an overall decline of around 35% in EPRA earnings.
The going concern scenario demonstrates that the Group over the
next 12 months:
- has significant liquidity to fund its ongoing operations;
- is operating with significant headroom above its Group debt
financing covenants;
- property values would have to fall by a further 34 % before
breach (or 61% from 30 September 2021 values);
- due to the measurement of its income related bank covenants,
in particular the treatment of capitalised interest, for the period
ended 30 September 2021, the Group did not have a net interest
charge. As a result, its interest cover covenant was not
measurable. Absent the benefit of capitalised interest, as assumed
in the going concern assessment, earnings before interest and tax
would need to fall by a further 72 % before breach (or 81% from 30
September 2021 levels); and
- has no debt maturities.
Based on these considerations, together with extensive stress
testing, available market information and the directors' knowledge
and experience of the Group's property portfolio and markets, the
directors have adopted the going concern basis in preparing the
accounts for the period ended 30 September 2021.
2 Revenue
Year to
31 March Six months Six months
2021 to 30 September to 30 September
GBPm 2021 GBPm 2020 GBPm
--------- ----------------------------- ---------------- ----------------
73.8 Gross rental income 32.7 36.1
(2.7) Spreading of lease incentives 0.2 (1.0)
13.7 Service charge income 5.0 6.5
3.7 Joint venture fee income 4.3 0.8
88.5 42.2 42.4
--------- ----------------------------- ---------------- ----------------
The table below sets out the Group's net rental income, please
see note 7 for the Group's alternative performance measures:
Year to Six months Six months
31 March to 30 September to 30 September
2021 2021 2020
GBPm GBPm GBPm
--------- ----------------------------- ---------------- ----------------
73.8 Gross rental income 32.7 36.1
(7.7) Expected credit losses (3.1) (3.7)
66.1 Rental income 29.6 32.4
(2.7) Spreading of lease incentives 0.2 (1.0)
(1.3) Ground rent (0.9) (0.8)
62.1 28.9 30.6
--------- ----------------------------- ---------------- ----------------
3 Cost of sales
Year to
31 March Six months Six months
2021 to 30 September to 30 September
GBPm 2021 GBPm 2020 GBPm
--------- ----------------------- ---------------- ----------------
15.2 Service charge expenses 6.9 7.6
8.2 Other property expenses 5.9 1.7
1.3 Ground rent 0.9 0.8
24.7 13.7 10.1
--------- ----------------------- ---------------- ----------------
The table below sets out the Group's property costs, please see
note 7 for the Group's alternative performance measures:
Six months
Year to to Six months
31 March 30 September to 30 September
2021 2021 2020
GBPm GBPm GBPm
--------- ----------------------- ------------- ----------------
(13.7) Service charge income (5.0) (6.5)
15.2 Service charge expenses 6.9 7.6
8.2 Other property expenses 5.9 1.7
--------- ----------------------- ------------- ----------------
9.7 7.8 2.8
--------- ----------------------- ------------- ----------------
4 Finance income
Six months
Year to to Six months
31 March 30 September to 30 September
2021 2021 2020
GBPm GBPm GBPm
--------- ----------------------------------------- ------------- ----------------
7.8 Interest income on joint venture balances 4.1 3.9
0.2 Interest on cash deposits - 0.1
8.0 4.1 4.0
--------- ----------------------------------------- ------------- ----------------
5 Finance costs
Six months
Year to to Six months
31 March 30 September to 30 September
2021 2021 2020
GBPm GBPm GBPm
--------- ------------------------------------------------- ------------- ----------------
2.5 Interest on revolving credit facilities 1.1 1.4
8.4 Interest on private placement notes 5.5 3.4
1.2 Interest on debenture stock 0.6 0.6
1.9 Interest on obligations under head leases 0.9 0.9
0.1 Interest on obligations under occupational leases 0.1 0.1
14.1 Gross finance costs 8.2 6.4
(6.3) Less: capitalised interest at an average interest (4.0) (2.8)
cost of 2.8% (2020: 2.4%)
--------- ------------------------------------------------- ------------- ----------------
7.8 4.2 3.6
--------- ------------------------------------------------- ------------- ----------------
6 Tax
Six months
Year to to Six months
31 March 30 September to 30 September
2021 2021 2020
GBPm GBPm GBPm
--------- ----------------------------------- ------------- ----------------
Current tax
- UK corporation tax - current period - -
- UK corporation tax - prior periods - -
--------- ----------------------------------- ------------- ----------------
- Total current tax - -
(0.1) Deferred tax 0.1 -
(0.1) Tax charge/(credit) for the period 0.1 -
--------- ----------------------------------- ------------- ----------------
The difference between the standard rate of tax and the
effective rate of tax arises from the items set out below:
Six months Six months
Year to to to
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
--------- --------------------------------------------------- ------------- -------------
(202.0) Profit/(loss) before tax 62.3 (154.8)
--------- --------------------------------------------------- ------------- -------------
Tax charge/(credit) on profit/(loss) at standard
(38.4) rate of 19% (2020: 19%) 11.8 (29.4)
46 .0 Changes in the fair value of properties not subject (7.7) 33.3
to tax
(8.6) REIT tax-exempt rental profits and gains (4.9) (4.5)
0.9 Other 0.9 0.6
(0.1) Tax charge/(credit) for the period 0.1 -
--------- --------------------------------------------------- ------------- -------------
6 Tax (continued)
During the period, GBP0.1 million (2020: GBPnil) of deferred tax
was credited directly to equity. The Group recognised a net
deferred tax asset at 30 September 2021 of GBPnil (2020: GBPnil).
This consists of deferred tax assets of GBP0.1 million (2020:
GBP0.1 million) and deferred tax liabilities of GBP0.1 million
(2020: GBP0.1 million).
Movement in deferred tax:
Recognised
in the At 30
At 1 April income Recognised September
2021 statement in equity 2021
GBPm GBPm GBPm GBPm
---------------------------------------------- ---------- ---------- ---------- ----------
Net deferred tax asset/(liability) in respect
of other temporary differences - (0.1) 0.1 -
---------------------------------------------- ---------- ---------- ---------- ----------
A deferred tax asset of GBP4.5 million (2020: GBP3.6 million),
mainly relating to revenue losses and contingent share awards, was
not recognised because it is uncertain whether future taxable
profit will arise against which this asset can be utilised.
As a REIT, the majority of rental profits and chargeable gains
from the Group's property rental business are exempt from UK
corporation tax. The Group is otherwise subject to corporation tax.
In particular, the Group's REIT exemption does not extend to either
profits arising from the sale of trading properties or gains
arising from the sale of investment properties in respect of which
a major redevelopment has completed within the preceding three
years.
In order to ensure that the Group is able to both retain its
status as a REIT and to avoid financial charges being imposed, a
number of tests (including a minimum distribution test) must be met
by both Great Portland Estates plc and by the Group as a whole on
an ongoing basis. These conditions are detailed in the Corporation
Tax Act 2010.
7 Alternative performance measures and EPRA metrics
Adjusted earnings and net assets per share are calculated in
accordance with the Best Practice Recommendations issued by the
European Public Real Estate Association (EPRA). The recommendations
are designed to make the financial statements of public real estate
companies clearer and more comparable across Europe enhancing the
transparency and coherence of the sector. The directors consider
these standard metrics to be the most appropriate method of
reporting the value and performance of the business the
reconciliations between these measures and the equivalent IFRS
figures are shown in the tables below.
Earnings per share:
Weighted average number of ordinary shares
Six months Six months
Year to to to
31 March 30 September 30 September
2021 2021 2020
No. of No. of No. of
shares shares shares
----------- ------------------------------------------ ------------- -------------
253,867,911 Issued ordinary share capital at 1 April 253,867,911 253,867,911
(939,617) Investment in own shares (877,335) (1,000,966)
----------- ------------------------------------------ ------------- -------------
Weighted average number of ordinary shares
252,928,294 - basic 252,990,576 252,866,945
----------- ------------------------------------------ ------------- -------------
Basic and diluted earnings per share
Six months Six months
to 30 Six months Six months to 30 Six months Six months
Year to September to 30 to 30 September to 30 to 30
31 March 2021 September September 2020 September September
2021 Profit 2021 2021 Loss 2020 2020
Earnings after No. of Earnings after No. of Loss
per share tax shares per share tax shares per share
pence GBPm million pence GBPm million pence
---------- -------------------- ------------ ------------ ------------ ------------ ------------ ------------
(79.8) Basic 62.2 253.0 24.6 (154.8) 252.9 (61.2)
Dilutive effect of
LTIP
- shares - 0.1 - - - -
(79.8) Diluted 62.2 253.1 24.6 (154.8) 252.9 (61.2)
---------- -------------------- ------------ ------------ ------------ ------------ ------------ ------------
EPRA Earnings per share
Six months Six months Six months Six months
to 30 Six months to 30 to 30 Six months to 30
Year to September to 30 September September to 30 September
31 March 2021 September 2021 2020 September 2020
2021 Profit/(loss) 2021 Earnings/ Profit/(loss) 2020 Earnings/
Earnings after No. of (expense) after No. of (expense)
per share tax shares per share tax shares per share
pence GBPm million pence GBPm million pence
---------- ------------------------ -------------- ---------- ---------- -------------- ---------- ----------
(79.8) Basic 62.2 253.0 24.6 (154.8) 252.9 (61.2)
(Surplus)/deficit from
investment property
(note
62.0 8) (26.6) - (10.5) 114.3 - 45.2
(Surplus)/deficit from
joint venture investment
33.0 property (note 9) (17.0) - (6.7) 61.1 - 24.2
Debt redemption costs
from joint ventures
(note
0.7 9) - - - - - -
- Deferred tax 0.1 - - - - -
15.9 Basic EPRA earnings 18.7 253.0 7.4 20.6 252.9 8.2
---------- ------------------------ -------------- ---------- ---------- -------------- ---------- ----------
Dilutive effect of LTIP
(0.1) shares - 0.1 - - 0.2 -
---------- ------------------------ -------------- ---------- ---------- -------------- ---------- ----------
15.8 Diluted EPRA earnings 18.7 253.1 7.4 20.6 253.1 8.2
---------- ------------------------ -------------- ---------- ---------- -------------- ---------- ----------
7 Alternative performance measures and EPRA metrics
(continued)
Net assets per share:
In October 2019, EPRA issued new Best Practice Recommendations
for Net Asset Value (NAV) metrics, these recommendations are
effective for accounting periods starting on 1 January 2020 and
have been adopted by the Group. The recommendations include three
NAV metrics: EPRA Net Tangible Assets (NTA), Net Reinvestment Value
(NRV) and Net Disposal Value (NDV). We consider EPRA NTA to be the
most relevant measure for the Group and the primary measure of net
asset value.
Number of ordinary shares
31 March 30 September
2021 30 September 2020
No. of 2021 No. of
shares No. of shares shares
----------- ------------------------------ -------------- ------------
253,867,911 Issued ordinary share capital 253,867,911 253,867,911
(877,335) Investment in own shares (877,335) (877,335)
----------- ------------------------------ -------------- ------------
252,990,576 Number of shares - basic 252,990,576 252,990,576
----------- ------------------------------ -------------- ------------
203,596 Dilutive effect of LTIP shares 122,571 322,465
----------- ------------------------------ -------------- ------------
253,194,172 Number of shares - diluted 253,113,147 253,313,041
----------- ------------------------------ -------------- ------------
EPRA net assets per share
31 March 30 September 30 September 30 September 30 September 30 September
2021 2021 2021 2021 2021 2020
EPRA NTA IFRS EPRA EPRA EPRA EPRA
GBPm GBPm NTA GBPm NDV GBPm NRV GBPm NTA GBPm
--------- ------------------------ ------------ ------------ ------------ ------------ ------------
IFRS basic and diluted
1,971.6 net assets 2,015.3 2,015.3 2,015.3 2,015.3 2,026.7
Fair value of financial
- liabilities - - (12.8) - -
- Real estate transfer tax - - - 179.3 -
--------- ------------------------ ------------ ------------ ------------ ------------ ------------
Net assets used in per
1,971.6 share calculations 2,015.3 2,015.3 2,002.5 2,194.6 2,026.7
--------- ------------------------ ------------ ------------ ------------ ------------ ------------
31 March 30 September 30 September 30 September 30 September 30 September
2021 2021 2021 2021 2021 2020
EPRA NTA IFRS EPRA EPRA EPRA EPRA
pence pence NTA pence NDV pence NRV pence NTA pence
--------- ------------------------ ------------ ------------ ------------ ------------ ------------
779 Net assets per share 797 797 792 867 801
--------- ------------------------ ------------ ------------ ------------ ------------ ------------
Diluted net assets per
779 share 796 796 791 867 800
--------- ------------------------ ------------ ------------ ------------ ------------ ------------
Total Accounting return
31 March 30 September 30 September
2021 2021 2020
per share per share per share
pence pence pence
---------- -------------------------------- ------------ ------------
868.0 Opening EPRA NTA (A) 779.0 868.0
779.0 Closing EPRA NTA 796.0 800.0
---------- -------------------------------- ------------ ------------
(89.0) Increase/(decrease) in EPRA NTA 17.0 (68.0)
---------- -------------------------------- ------------ ------------
12.6 Ordinary dividend paid in period 7.9 7.9
---------- -------------------------------- ------------ ------------
(76.4) Total return (B) 24.9 (60.1)
---------- -------------------------------- ------------ ------------
(8.8%) Total accounting return (B/A) 3.2% (6.9%)
---------- -------------------------------- ------------ ------------
7 Alternative performance measures and EPRA metrics
(continued)
Cash earnings per share
Six months Six months
to 30 Six months Six months to 30 Six months Six months
Year to September to 30 to 30 September to 30 to 30
31 March 2021 September September 2020 September September
2021 Profit 2021 2021 Profit 2020 2020
Earnings after No. of Earnings after No. of Earnings
per share tax shares per share tax shares per share
pence GBPm million pence GBPm million pence
---------- -------------------- ------------ ------------ ------------ ------------ ------------ ------------
Diluted EPRA
15.8 earnings 18.7 253.1 7.4 20.6 253.1 8.2
(2.5) Capitalised interest (4.0) - (1.6) (2.8) - (1.1)
Capitalised interest
in
(1.1) joint ventures - - - (2.4) - (1.0)
Spreading of tenant
lease
1.0 incentives (0.2) - (0.1) 1.0 - 0.4
Spreading of tenant
lease
incentives in joint
(1.6) ventures (3.7) - (1.4) (1.1) - (0.4)
Employee Long Term
Incentive
0.6 Plan charge 2.0 - 0.8 0.9 - 0.3
Cash earnings per
12.2 share 12.8 253.1 5.1 16.2 253.1 6.4
---------- -------------------- ------------ ------------ ------------ ------------ ------------ ------------
Net debt and loan-to-property value
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
-------- --------------------------------------------------- ------------ ------------
22.0 GBP142.9 million 5.625% debenture stock 2029 22.0 22.0
43.3 GBP450.0 million revolving credit facility - 113.3
423.3 Private placement notes 423.4 274.2
(11.1) Less: cash and cash equivalents (6.8) (7.2)
-------- --------------------------------------------------- ------------ ------------
477.5 Net debt excluding joint ventures 438.6 402.3
-------- --------------------------------------------------- ------------ ------------
Joint venture interest bearing loans and borrowings
- (at share) - 39.9
(26.5) Joint venture cash and cash equivalents (at (29.1) (14.7)
share)
451.0 Net debt including joint ventures (A) 409.5 427.5
-------- --------------------------------------------------- ------------ ------------
1,853.8 Group properties at market value 1,918.5 1,863.9
603.3 Joint venture properties at market value (at 538.5 626.6
share)
2,457.1 Property portfolio at market value including 2,457.0 2,490.5
joint ventures (B)
-------- --------------------------------------------------- ------------ ------------
18.4% Loan-to-property value (A/B) 16.7% 17.2%
-------- --------------------------------------------------- ------------ ------------
Net gearing
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
-------- ------------------------------------------- ------------ ------------
Nominal value of interest-bearing loans and
492.1 borrowings 446.9 411.9
3.9 Obligations under occupational leases 3.4 4.3
(11.1) Less: cash balances (6.8) (7.2)
-------- ------------------------------------------- ------------ ------------
484.9 Adjusted net debt (A) 443.5 409.0
1,971.6 Net assets 2,015.3 2,026.7
(0.7) Pension scheme (assets)/liabilities (0.1) 2.8
-------- ------------------------------------------- ------------ ------------
1,970.9 Adjusted net equity (B) 2,015.2 2,029.5
-------- ------------------------------------------- ------------ ------------
24.6% Net gearing (A/B) 22.0% 20.2%
-------- ------------------------------------------- ------------ ------------
8 Investment property
Investment property
Freehold Leasehold Total
GBPm GBPm GBPm
---------------------------------------------------- -------- --------- -------
Book value at 1 April 2021 615.9 964.7 1,580.6
Costs capitalised 11.3 4.2 15.5
Transfer from investment property under development 246.8 - 246.8
Net valuation surplus/(deficit) 6.6 (6.2) 0.4
---------------------------------------------------- -------- --------- -------
Book value at 30 September 2021 880.6 962.7 1,843.3
---------------------------------------------------- -------- --------- -------
Investment property under development
Freehold Leasehold Total
GBPm GBPm GBPm
-------------------------------------------------------- -------- --------- -------
Book value at 1 April 2021 313.9 - 313.9
Costs capitalised 18.2 - 18.2
Interest capitalised 4.0 - 4.0
Transfer to investment property (246.8) - (246.8)
Net valuation surplus 26.6 - 26.6
Book value at 30 September 2021 115.9 - 115.9
-------------------------------------------------------- -------- --------- -------
Book value of total investment property at 30 September
2021 996.5 962.7 1,959.2
-------------------------------------------------------- -------- --------- -------
Surplus/(deficit) from investment property
Six months
Year to to Six months
31 March 30 September to 30 September
2021 2021 2020
GBPm GBPm GBPm
---------- ----------------------------------------------- ------------- ----------------
Net valuation surplus/(deficit) on investment
(157.4) property 27.0 (114.1)
0.6 (Loss)/profit on sale of investment properties (0.4) (0.2)
(156.8) Surplus/(deficit) from investment property 26.6 (114.3)
----------- ---------------------------------------------- ------------- ----------------
The Group's investment properties, including those held in joint
ventures (note 9), were valued on the basis of Fair Value by CBRE
Limited (CBRE), external valuers, as at 30 September 2021. The
valuations have been prepared in accordance with the current
version of the RICS Valuation - Global Standards (incorporating the
International Valuation Standards) and the UK national supplement
2020 (the Red Book) and have been primarily derived using
comparable recent market transactions on arm's length terms.
Real estate valuations are complex and derived using comparable
market transactions, which are not publicly available and involve
an element of judgement and estimation. Therefore, in line with
EPRA guidance, we have classified the valuation of the property
portfolio as Level 3 as defined by IFRS 13. There were no transfers
between levels during the period. Inputs to the valuation,
including capitalisation yields (typically the true equivalent
yield) and rental values, are defined as 'unobservable' as defined
by IFRS 13.
Everything else being equal, there is a positive relationship
between rental values and the property valuation, such that an
increase in rental values will increase the valuation of a property
and a decrease in rental values will reduce the valuation of the
property. Any percentage movement in rental values will translate
into approximately the same percentage movement in the property
valuation. However, due to the long-term nature of leases, where
the passing rent is fixed and often subject to upwards only rent
reviews, the impact will not be immediate and will be recognised
over a number of years. The relationship between capitalisation
yields and the property valuation is negative and more immediate;
therefore an increase in capitalisation yields will reduce the
valuation of a property and a reduction will increase its
valuation. A decrease in the capitalisation yield by 25 basis
points would result in an increase in the fair value of the Group's
investment property by GBP144.5 million, whilst a 25 basis point
increase would reduce the fair value by GBP129.3 million. There are
interrelationships between these inputs as they are determined by
market conditions, and the valuation movement in any one period
depends on the balance between them. If these inputs move in
opposite directions (i.e. rental values increase and yields
decrease) valuation movements can be amplified, whereas if they
move in the same direction they may offset, reducing the overall
net valuation movement. Additionally, investment property under
development is sensitive to income, cost and developer's profit
assumptions included in the valuations.
8 Investment property (continued)
Key inputs to the valuation (by building) at 30 September
2021
ERV True equivalent yield
Average Range Average Range
GBP per sq ft GBP per sq ft % %
---------------------------- ------- -------------- -------------- ----------- -------------
North of Oxford Street Office 78 43 - 95 4.4 4.0 - 6.8
Retail 66 33 - 122 4.4 4.3 - 7.0
Rest of West End Office 84 57 - 105 4.8 3.3 - 6.2
Retail 93 15 - 255 4.5 3.4 - 6.2
City, Midtown and Southwark Office 58 46 - 71 4.9 3.9 - 5.6
Retail 28 25 - 67 5.2 4.9 - 5.2
------------------------------------ -------------- -------------- ----------- -------------
Key inputs to the valuation (by building) at 30 September
2020
ERV True equivalent yield
Average Range Average Range
GBP per sq ft GBP per sq ft % %
---------------------------- ------- -------------- -------------- ----------- -------------
North of Oxford Street Office 75 45 - 95 4.5 4.1 - 6.8
Retail 69 30 - 132 4.3 3.9 - 6.7
Rest of West End Office 80 60 - 93 4.8 3.6 - 6.2
Retail 103 14 - 289 4.2 2.8 - 6.2
City, Midtown and Southwark Office 56 46 - 64 5.1 4.4 - 5.6
Retail 60 28 - 100 4.7 4.4 - 4.9
------------------------------------ -------------- -------------- ----------- -------------
The book value of investment properties includes GBP40.7 million
(2020: GBP40.7 million) in respect of the present value of future
ground rents. Net of these amounts, the market value of the
investment properties was GBP1,918.5 million. During the period,
the Group capitalised GBP0.3 million (2020: GBP0.5 million) of
employee costs in respect of its development team into investment
properties under development. At 30 September 2021, the Group had
capital commitments of GBP48.9 million (2020: GBP29.1 million).
9 Investment in joint ventures
Balances
Equity with partners Total
GBPm GBPm GBPm
----------------------------------------------- ------ -------------- ------
At 1 April 2021 326.7 299.7 626.4
Movement on joint venture balances - (85.4) (85.4)
Additions - - -
------ -------------- ------
Share of profit of joint ventures 9.8 - 9.8
Share of revaluation surplus of joint ventures 13.7 - 13.7
Profit on sale of investment property 3.3 - 3.3
------ -------------- ------
Share of results of joint ventures 26.8 - 26.8
Distributions (4.8) - (4.8)
----------------------------------------------- ------ -------------- ------
At 30 September 2021 348.7 214.3 563.0
----------------------------------------------- ------ -------------- ------
The investments in joint ventures comprise the following:
Ownership Country of Incorporation/registration Ownership Ownership
31 March 30 September 30 September
2021 2021 2020
--------- ------------------------------------ ------------------------------------- ------------- -------------
50% The GHS Limited Partnership Jersey 50% 50%
The Great Capital Partnership
50% (dormant) United Kingdom 50% 50%
50% The Great Ropemaker Partnership United Kingdom 50% 50%
50% The Great Victoria Partnerships United Kingdom 50% 50%
--------- ------------------------------------ ------------------------------------- ------------- -------------
9 Investment in joint ventures (continued)
The investment properties include GBP5.2 million (2020: GBP5.2
million) in respect of the present value of future ground rents,
net of these amounts the market value of our share of the total
joint venture properties is GBP538.5 million. At 30 September 2021,
the Group's share of joint venture capital commitments was GBP2.4
million (2020: GBP7.6 million).
Transactions during the period between the Group and its joint
ventures, who are related parties, are set out below:
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
-------- ------------------------------------------------ ------------ --------------
Movement on joint venture balances during the
(53.1) period 85.4 (5.9)
(299.7) Balances receivable at the period end from joint (214.3) (252.5)
ventures
7.8 Interest on balances with partners 4.1 3.9
8.3 Distributions 4.8 4.3
3.7 Joint venture fees paid 4.3 0.8
-------- ------------------------------------------------ ------------ --------------
The joint venture balances bear interest as follows: the GHS
Limited Partnership at 5.3% p.a. on balances at inception and 4.0%
on any subsequent balances and the Great Ropemaker Partnership at
2.0% p.a. After the sale of 160 Old Street, EC1, the Great
Ropemaker Partnership made a repayment of partner loans of GBP89.5
million per partner in the period. The Group earns fee income from
its joint ventures for the provision of management services. All of
the above transactions are made on terms equivalent to those that
prevail in arm's length transactions.
Summarised balance sheets
31
March
2021 The GHS The Great The Great 30 September 30 September 30 September
At Limited Ropemaker Victoria 2021 2021 2020
share Partnership Partnership Partnerships Other Total At share At share
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- -------------- --------------- --------------- --------------------- --------- --------------- ------------- --------------------------
Investment
608.5 property 661.6 329.2 96.6 - 1,087.4 543.7 631.8
4.9 Current assets 0.7 6.5 1.6 - 8.8 4.4 4.6
Cash and cash
26.5 equivalents 29.4 13.6 15.2 - 58.2 29.1 14.7
Balances
(from)/to
(299.7) partners (229.9) (125.5) (73.1) - (428.5) (214.3) (252.5)
Interest
bearing loans
- and borrowings - - - - - - (39.9)
Current
(8.3) liabilities (3.8) (11.2) (3.1) - (18.1) (9.0) (10.9)
Obligations
under
(5.2) head leases - (10.3) - - (10.3) (5.2) (5.2)
------- -------------- --------------- --------------- --------------------- --------- --------------- ------------- --------------------------
326.7 Net assets 458.0 202.3 37.2 - 697.5 348.7 342.6
------- -------------- --------------- --------------- --------------------- --------- --------------- ------------- --------------------------
Summarised income statements
----------------------------- ---------------------------------- ------------------------------ ----------------------------
31
March 30
2021 The GHS The Great The Great 30 September 30 September September
At Limited Ropemaker Victoria 2021 2021 2020
share Partnership Partnership Partnerships Other Total At share At share
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- -------------- ----------------- ----------------- ------------------- --------- --------------- --------------- -----------
Net rental
17.4 income 7.4 12.5 1.9 - 21.8 10.9 7.2
Surrender
- premium - 7.9 - - 7.9 3.9 -
Property and
administration
(2.1) costs (1.6) 0.6 (0.6) - (1.6) (0.8) (0.2)
Net finance
(6.2) costs (5.1) (3.3) - - (8.4) (4.2) (2.4)
Debt
redemption
(1.9) costs - - - - - - -
Share of
profit of
7.2 joint ventures 0.7 17.7 1.3 - 19.7 9.8 4.6
Revaluation of
investment
(84.7) property 41.6 (7.4) (6.8) - 27.4 13.7 (61.1)
Profit on sale
of
investment
1.3 property - 6.5 - - 6.5 3.3 -
------- -------------- ----------------- ----------------- ------------------- --------- --------------- --------------- -----------
Share of
results of
(76.2) joint ventures 42.3 16.8 (5.5) - 53.6 26.8 (56.5)
------- -------------- ----------------- ----------------- ------------------- --------- --------------- --------------- -----------
10 Property, plant and equipment
Right of
use asset Fixtures
for occupational Leasehold and
leases improvements fittings/other Total
GBPm GBPm GBPm GBPm
------------------------------------- ----------------- ------------- --------------- -----
Cost or valuation
At 1 April 2021 4.9 5.6 1.6 12.1
Additions - - 0.1 0.1
------------------------------------- ----------------- ------------- --------------- -----
At 30 September 2021 4.9 5.6 1.7 12.2
------------------------------------- ----------------- ------------- --------------- -----
Depreciation
At 1 April 2021 1.6 2.9 1.3 5.8
Charge for the period 0.4 0.2 0.1 0.7
------------------------------------- ----------------- -------------
At 30 September 2021 2.0 3.1 1.4 6.5
------------------------------------- ----------------- ------------- --------------- -----
Carrying amount at 30 September 2021 2.9 2.5 0.3 5.7
------------------------------------- ----------------- ------------- --------------- -----
Carrying amount at 31 March 2021 3.3 2.7 0.3 6.3
------------------------------------- ----------------- ------------- --------------- -----
11 Other investments
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
-------- ------------ ------------ ------------
0.2 At 1 April 1.0 0.2
0.8 Acquisitions 0.5 0.3
1.0 1.5 0.5
-------- ------------ ------------ ------------
In January 2020, the Group entered into a commitment of up to
GBP5 million to invest in Pi Labs European PropTech venture capital
fund. At 30 September 2021, the Group had made investments of
GBP1.5 million. Launched in 2014, Pi Labs is Europe's longest
standing PropTech VC and this third fund has a primary focus to
invest in early stage PropTech start-ups across Europe and the UK
that use technology solutions to enhance any stage of the real
estate value chain. Key areas of focus for the fund include
sustainability, the future of work, the future of retail,
commercial real estate technologies, construction technology and
smart cities.
12 Trade and other receivables
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
-------- ----------------------------------------------- ------------ ------------
23.4 Trade receivables 19.3 24.7
(7.9) Expected credit loss allowance (6.6) (6.8)
15.5 12.7 17.9
0.8 Prepayments and accrued income 1.2 1.2
0.1 Amounts due on development management contracts - -
3.1 Other trade receivables 7.9 4.0
19.5 21.8 23.1
-------- ----------------------------------------------- ------------ ------------
Trade receivables consist of rent and service charge monies,
which are due on the quarter day with no credit period. Interest is
charged on trade receivables in accordance with the terms of the
occupier ' s lease. Trade receivables are provided for based on the
expected credit loss, which uses a lifetime expected loss allowance
for all trade receivables based on an assessment of each individual
occupier's circumstance. This assessment reviews the outstanding
balances of each individual occupier and makes an assessment of the
likelihood of recovery, based on an evaluation of their financial
situation. Where the expected credit loss relates to revenue
already recognised this has been recognised immediately in the
income statement. For the portion of the expected credit loss that
relates to future revenue which is no longer considered fully
recoverable, the relevant amount of rent received in advance has
been released.
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
-------- ------------------------------------------------ ------------ --------------
Movements in expected credit loss allowance
(2.2) Balance at 1 April (7.9) (2.2)
Expected credit loss allowance during the period
(9.2) (see below) (3.7) (4.5)
0.1 Expected credit loss allowance in respect of 0.3 (0.7)
future periods
3.4 Amounts written-off as uncollectable 4.7 0.6
(7.9) (6.6) (6.8)
-------- ------------------------------------------------ ------------ --------------
The expected credit loss for the period comprises:
Total Including
Reassessment of prior year Total VAT
Expected credit loss for period expected credit loss 2021 2021
GBPm GBPm GBPm GBPm
-------------------------- ------------------------------- --------------------------------- ----- ---------------
Expected credit loss
Group 3.1 - 3.1 3.7
Joint ventures (at share) 0.1 (0.5) (0.4) (0.4)
-------------------------- ------------------------------- --------------------------------- ----- ---------------
Total 3.2 (0.5) 2.7 3.3
-------------------------- ------------------------------- --------------------------------- ----- ---------------
The expected credit loss for the period of GBP3.2 million
(including our share of joint ventures) represents 69% of rental
balances outstanding for the period. If the expected credit loss
increased or decreased by 5% of the outstanding balance it would
change the allowance by GBP0.2 million.
13 Trade and other payables
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
-------- ---------------------------------------------- ------------ ------------
15.1 Rents received in advance 16.0 19.5
- Deposits received on sale of residential units - 0.3
18.8 Accrued capital expenditure 18.0 17.4
14.7 Other accruals 17.7 8.7
6.5 Other payables 1.6 8.1
55.1 53.3 54.0
-------- ---------------------------------------------- ------------ ------------
14 Interest-bearing loans and borrowings
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
-------- ---------------------------------------------- ------------ ------------
Non-current liabilities at amortised cost
Secured
22.0 GBP21.9 million 5.625% debenture stock 2029 22.0 22.0
Unsecured
43.3 GBP450.0 million revolving credit facility - 113.3
174.6 GBP175.0 million 2.15% private placement notes 174.7 174.5
2024
39.9 GBP40.0 million 2.70% private placement notes 39.9 39.9
2028
29.9 GBP30.0 million 2.79% private placement notes 29.9 29.9
2030
29.9 GBP30.0 million 2.93% private placement notes 29.9 29.9
2033
24.8 GBP25.0 million 2.75% private placement notes 24.8 -
2032
124.2 GBP125.0 million 2.77% private placement notes 124.2 -
2035
488.6 445.4 409.5
-------- ---------------------------------------------- ------------ ------------
At 30 September 2021, the Group had a floating rate GBP450.0
million revolving credit facility. The facility is unsecured,
attracts a floating rate based on a headline margin which was
reduced to 90.0 basis points over LIBOR (plus or minus 2.5 basis
points subject to a number of ESG linked targets) and matures in
January 2026 which can potentially be extended further to January
2027, subject to bank consent. At 30 September 2021, the Group had
GBP450.0 million (2020: GBP335.0 million) of undrawn committed
credit facilities.
At 30 September 2021, properties with a carrying value of
GBP115.0 million (2020: GBP111.8 million) were secured under the
Group's debenture stock.
Fair value of financial liabilities
30 September
31 March 31 March 30 September 30 September 30 September 2020
2021 2021 2021 2021 2020 Fair
Book value Fair value Items not carried at fair Book value Fair value Book value value
GBPm GBPm value GBPm GBPm GBPm GBPm
----------- ----------- -------------------------- ------------ ------------ ------------ ------------
GBP21.9 million 5.625%
22.0 27.0 debenture stock 2029 22.0 26.7 22.0 28.3
423.3 421.3 Private placement notes 423.4 431.5 274.2 272.0
GBP450.0 million revolving
43.3 43.3 credit facility - - 113.3 113.3
488.6 491.6 445.4 458.2 409.5 413.6
----------- ----------- -------------------------- ------------ ------------ ------------ ------------
The fair values of the Group's cash and cash equivalents and
trade payables and receivables are not materially different from
those at which they are carried in the financial statements. The
fair values of the Group's private placement notes and debenture
stock were determined by comparing the discounted future cash flows
using the contracted yields with those of the reference gilts plus
the implied margins.
15 Share capital
Six months Six months Six months Six months
Year to Year to to to to to
31 March 31 March 30 September 30 September 30 September 30 September
2021 2021 2021 2021 2020 2020
Number GBPm Number GBPm Number GBPm
----------- --------- ------------------------ ------------- ------------- ------------- -------------
Allotted, called up and
fully paid
At the beginning and end
253,867,911 38.7 of the period 253,867,911 38.7 253,867,911 38.7
----------- --------- ------------------------ ------------- ------------- ------------- -------------
At 30 September 2021, the Company had 253,867,911 ordinary
shares with a nominal value of 15(5) (19) pence each.
16 Head lease obligations
Head lease obligations in respect of the Group's leasehold
properties are payable as follows:
Present Present
Minimum value of Minimum value of
lease Impact minimum lease Impact minimum
payments of discounting lease payments payments of discounting lease payments
30 September 30 September 30 September 30 September 30 September 30 September
2021 2021 2021 2020 2020 2020
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
Less than one year 1.9 (1.9) - 1.9 (1.9) -
Between two and five
years 9.5 (9.4) 0.1 9.5 (9.4) 0.1
More than five years 191.1 (150.5) 40.6 193.0 (152.4) 40.6
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
202.5 (161.8) 40.7 204.4 (163.7) 40.7
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
17 Occupational leases obligations
Obligations in respect of the Group's occupational leases for
its head office are payable as follows:
Present Present
Minimum value of Minimum value of
lease Impact minimum lease Impact minimum
payments of discounting lease payments payments of discounting lease payments
30 September 30 September 30 September 30 September 30 September 30 September
2021 2021 2021 2020 2020 2020
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
Less than one year 1.0 (0.1) 0.9 1.0 (0.1) 0.9
Between two and five
years 2.6 (0.1) 2.5 3.6 (0.2) 3.4
More than five years - - - - - -
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
3.6 (0.2) 3.4 4.6 (0.3) 4.3
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
18 Investment in own shares
Six months Six months
Year to to to
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
--------- ---------------------------------------- ------------- -------------
0.6 At the beginning of the period (0.2) 0.6
(1.5) Employee Long-Term Incentive Plan charge (2.0) (0.9)
0.7 Transfer to retained earnings 0.5 0.7
(0.2) At the end of the period (1.7) 0.4
--------- ---------------------------------------- ------------- -------------
The investment in the Company's own shares is held at cost and
comprises 877,335 shares (31 March 2021: 877,335 shares) held by
the Great Portland Estates plc LTIP Employee Share Trust which will
vest for certain senior employees of the Group if performance
conditions are met.
During the period, no shares (2020: 231,968 shares) were awarded
to directors and senior employees in respect of the 2018 LTIP
award. The fair value of shares awarded and outstanding at 30
September 2021 was GBP12.2 million (2020: GBP7.3 million).
19 Notes to the group statement of cash flow
Adjustment for non-cash items
Six months Six months
Year to to to
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
--------- ------------------------------------------ ------------- -------------
156.8 (Surplus)/deficit from investment property (26.6) 114.3
1.5 Employee Long-Term Incentive charge 2.0 0.9
2.7 Spreading of tenant lease incentives (0.2) 1.0
76.2 Share of results from joint ventures (26.8) 56.5
1.6 Depreciation 0.7 0.7
(0.3) Other (0.1) (0.1)
--------- ------------------------------------------ ------------- -------------
238 .5 Adjustments for non-cash items (51.0) 173 .3
--------- ------------------------------------------ ------------- -------------
20 Rent receivable under non-cancellable leases
Future aggregate minimum rents receivable under non-cancellable
leases are:
31 March 30 September 30 September
2021 2021 2020
GBPm GBPm GBPm
-------- -------------------------- ------------ ------------
The Group as a lessor
62.7 Less than one year 57.3 70.4
121.6 Between one and five years 111.7 134.6
51.7 More than five years 67.3 56.0
-------- -------------------------- ------------ ------------
236.0 236.3 261.0
-------- -------------------------- ------------ ------------
The Group leases its investment properties. The weighted average
length of lease at 30 September 2021 was 3.2 years (2020: 3.3
years). All investment properties, except those under development
or being prepared for development, generated rental income and no
contingent rents were recognised in the period (2020: GBPnil).
21 Dividends
The declared interim dividend of 4.7 pence per share (2020: 4.7
pence per share) was approved by the Board on 19 November 2021 and
is payable on 5 January 2022 to shareholders on the register on 3
December 2021. The dividend is not recognised as a liability in the
Half Year Results.
22 Reserves
The following describes the nature and purpose of each reserve
within equity:
Share capital
The nominal value of the Company's issued share capital,
comprising 15(5) (19) pence ordinary shares.
Share premium
Amount subscribed for share capital in excess of nominal value
less directly attributable issue costs.
Capital redemption reserve
Amount equivalent to the nominal value of the Company's own
shares acquired as a result of share buy-back programmes.
Retained earnings
Cumulative net gains and losses recognised in the Group income
statement together with other items such as dividends.
Investment in own shares
Amount paid to acquire the Company's own shares for its Employee
Long-Term Incentive Plan less accounting charges.
Directors' responsibility statement
The Directors confirm that the condensed interim financial
statements have been prepared in accordance with United Kingdom
adopted International Accounting Standard 34, "Interim Financial
Reporting", and that the Interim Results includes a fair review of
the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the period and their impact on the interim condensed financial
statements, and a description of the principal risks and
uncertainties for the remainder of the financial year; and
-- material related party transactions in the period and any
material changes in the related party transactions described in the
last annual report.
By the order of the Board
Toby Courtauld Nick Sanderson
Chief Executive Chief Financial & Operating Officer
19 November 2021 19 November 2021
Independent review report to Great Portland Estates plc
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2021 which comprises the condensed
group income statement, the condensed group statement of
comprehensive income, the condensed group balance sheet, the
condensed group statement of changes in equity, the condensed group
cash flow statement and related notes 1 to 22. We have read the
other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with the United Kingdom adopted
international accounting standards. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with United Kingdom adopted International
Accounting Standard 34 "Interim Financial Reporting".
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2021 is not prepared, in all material respects, in
accordance with United Kingdom adopted International Accounting
Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company, for our review
work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
19 November 2021
Directors and shareholders' information
Directors
Richard Mully Mark Anderson
Chairman, Non-Executive Non-Executive Director
Toby Courtauld Wendy Becker
Chief Executive Non-Executive Director
Nick Sanderson Nick Hampton
Chief Financial & Operating Officer Non-Executive Director
Dan Nicholson Vicky Jarman
Executive Director Non-Executive Director
Charles Philipps
Non-Executive Director
Alison Rose
Non-Executive Director
Shareholders' information
Financial calendar 2021
Ex-dividend date for interim dividend 2 December
Registration qualifying date for interim
dividend 3 December
2022
Interim dividend payable 5 January
Announcement of full year results 18 May*
Annual General Meeting 7 July*
Final dividend payable 11 July*
*Provisional.
Dividend payments
Shareholder enquiries As a REIT, dividend payments must
All enquiries relating to holdings be split between PIDs and non-PIDs.
of shares, bonds or debentures in Information in respect of the tax
Great Portland Estates, including consequences for shareholders of
notification of change of address, receiving dividends can be found
queries regarding dividend/interest on the Company's website at
payments or the loss of a certificate, www.gpe.co.uk/investors/shareholder-information/reits
should be addressed to the Company's
Registrars: Share dealing service
Link Asset Services An online and telephone dealing
34 Beckenham Road service is available for UK shareholders
Beckenham through Link Share Deal. For further
Kent information on this service, or to
BR3 4TU buy and sell shares, please contact:
Tel: 0871 664 0300 Online dealing - www.linksharedeal.com
E-mail: shareholder.services@linkgroup.co.uk Telephone dealing - 0371 664 0445
(Calls cost 12 pence per minute plus (Calls are charged at the standard
network extras; lines are open 9.00am geographical rate and will vary by
- 5.30pm Monday to Friday). provider; lines are open 8.00am -
If you are calling from overseas, 4.30pm Monday to Friday).
please dial +44 371 664 0300.
Company Secretary
Website: www.gpe.co.uk Darren Lennark
The Company's corporate website holds, Registered office:
amongst other information, a copy 33 Cavendish Square
of our latest annual report and accounts, London W1G 0PW
a list of properties held by the Group Tel: 020 7647 3000
and press announcements released over Fax: 020 7016 5500
the last twelve months. Registered Number: 596137
Glossary
Building Research Establishment Environmental Assessment
Methodology (BREEAM)
Building Research Establishment method of assessing, rating and
certifying the sustainability of buildings.
Cash EPS
EPRA EPS adjusted for non-cash items: tenant incentives,
capitalised interest and charges for share-based payments.
Core West End
Areas of London with W1 and SW1 postcodes.
Development profit on cost
The value of the development at completion, less the value of
the land at the point of development commencement and costs to
construct (including finance charges, letting fees, void costs and
marketing expenses).
Development profit on cost %
The development profit on cost divided by the land value at the
point of development commencement together with the costs to
construct.
Earnings per Share (EPS)
Profit after tax divided by the weighted average number of
ordinary shares in issue.
EPRA metrics
Standard calculation methods for adjusted EPS and NAV as set out
by the European Public Real Estate Association (EPRA) in their Best
Practice and Policy Recommendations.
EPRA net disposal value (NDV)
Represents the shareholders' value under a disposal scenario,
where deferred tax, financial instruments and certain other
adjustments are calculated to the full extent of their liability,
net of any resulting tax. Diluted net assets per share adjusted to
remove the impact of goodwill arising as a result of deferred tax
and fixed interest rate debt.
EPRA Net Reinstatement Value (NRV)
Represents the value of net assets on a long-term basis. Assets
and liabilities that are not expected to crystallise in normal
circumstances such as the fair value movements on financial
derivatives, real estate transfer taxes and deferred taxes on
property valuation surpluses are therefore excluded.
EPRA net tangible assets (NTA)
Assumes that entities buy and sell assets, thereby crystallising
certain levels of unavoidable deferred tax. Diluted net assets per
share adjusted to remove the cumulative fair value movements on
interest-rate swaps and similar instruments, the carrying value of
goodwill arising as a result of deferred tax and other intangible
assets.
Estimated Rental Value (ERV)
The market rental value of lettable space as estimated by the
Company's valuers at each balance sheet date.
Fair value - investment property
The amount as estimated by the Company's valuers for which a
property should exchange on the date of valuation between a willing
buyer and a willing seller in an arm's-length transaction after
proper marketing wherein the parties had each acted knowledgeably,
prudently and without compulsion. In line with market practice,
values are stated net of purchasers' costs.
Flex
Individual fitted out, ready to occupy floors, let on flexible
terms.
Flex+
Flex with added levels of service and shared amenity.
Glossary (continued)
Flexible space partnerships
Revenue share agreements with flexible space operators.
Internal Rate of Return (IRR)
The rate of return that if used as a discount rate and applied
to the projected cash flows that would result in a net present
value of zero.
MSCI
Morgan Stanley Capital International (MSCI) is a company that
produces an independent benchmark of property returns.
MSCI central London
An index, compiled by MSCI, of the central and inner London
properties in their monthly and quarterly valued universes.
Like-for-like portfolio
The element of the portfolio that has been held for the whole of
the period of account.
Loan to Value (LTV)
Total bank loans, private placement notes, convertible bonds at
nominal value and debenture stock, net of cash (including our share
of joint ventures balances), expressed as a percentage of the
market value of the property portfolio (including our share of
joint ventures).
Net assets per share or Net Asset Value (NAV)
Equity shareholders' funds divided by the number of ordinary
shares at the balance sheet date presented on a diluted and
undiluted basis.
Net debt
The book value of the Group's bank and loan facilities, private
placement notes and debenture loans plus the nominal value of the
convertible bond less cash and cash equivalents.
Net gearing
Total Group borrowings (including the convertible bonds at
nominal value) less short-term deposits and cash as a percentage of
equity shareholders' funds, calculated in accordance with our bank
covenants.
Net initial yield
Annual net rents on investment properties as a percentage of the
investment property valuation having added notional purchaser's
costs.
Non-PIDs
Dividends from profits of the Group's taxable residual
business.
PMI
Purchasing Managers Index.
Property Income Distributions (PIDs)
Dividends from profits of the Group's tax-exempt property rental
business.
REIT
UK Real Estate Investment Trust.
Rent roll
The annual contracted rental income.
Return on shareholders' equity
The growth in the EPRA diluted net assets per share plus
dividends per share for the period expressed as a percentage of the
EPRA net assets per share at the beginning of the period.
Reversionary or under-rented
The percentage by which ERV exceeds rent roll on let space.
Reversionary potential
The percentage by which ERV exceeds rent roll on let space.
Glossary (continued)
Topped up initial yield
Annual net rents on investment properties as a percentage of the
investment property valuation having added notional purchaser's
costs and contracted uplifts from tenant incentives.
Total Accounting Return (TAR)
The growth in EPRA NTA per share plus ordinary dividends paid,
expressed as a percentage of EPRA NTA per share at the beginning of
the period.
Total potential future growth
Portfolio rent roll plus the ERV of void space, space under
refurbishment and the committed development schemes, expressed as a
percentage uplift on the rent roll at the end of the period.
Total Property Return (TPR)
Capital growth in the portfolio plus net rental income derived
from holding these properties plus profit on sale of disposals
expressed as a percentage return on the period's opening value as
calculated by MSCI.
Total Shareholder Return (TSR)
The growth in the ordinary share price as quoted on the London
Stock Exchange plus dividends per share received for the period
expressed as a percentage of the share price at the beginning of
the period.
Triple net asset value (NNNAV)
NAV adjusted to include the fair value of the Group's financial
liabilities and deferred tax on a diluted basis.
True equivalent yield
The constant capitalisation rate which, if applied to all cash
flows from an investment property, including current rent,
reversions to current market rent and such items as voids and
expenditures, equates to the market value having taken into account
notional purchaser's costs. Assumes rent is received quarterly in
advance.
Ungeared IRR
The ungeared internal rate of return (IRR) is the interest rate
at which the net present value of all the cash flows (both positive
and negative) from a project or investment equal zero, without the
benefit of financing. The internal rate of return is used to
evaluate the attractiveness of a project or investment.
Vacancy rate
The element of a property which is unoccupied but available for
letting, expressed as the ERV of the vacant space divided by the
ERV of the total portfolio.
Weighted Average Unexpired Lease Term (WAULT)
The Weighted Average Unexpired Lease Term expressed in
years.
Whole life surplus
The value of the development at completion, less the value of
the land at the point of acquisition and costs to construct
(including finance charges, letting fees, void costs and marketing
expenses) plus any income earned over the period.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR GZMMMNRNGMZM
(END) Dow Jones Newswires
November 19, 2021 02:00 ET (07:00 GMT)
Great Portland Estates (LSE:GPOR)
Gráfica de Acción Histórica
De Nov 2024 a Dic 2024
Great Portland Estates (LSE:GPOR)
Gráfica de Acción Histórica
De Dic 2023 a Dic 2024
