TIDMGPE
RNS Number : 6917G
Great Portland Estates PLC
17 November 2022
17 November 2022
Strong operating results supported by record leasing and
financial strength
The Directors of Great Portland Estates plc announce the results
for the Group for the six months ended 30 September 2022 (1) , with
highlights including:
-- New leasing record including largest ever letting at 2
Aldermanbury Square, EC2; 4.4% ahead of ERV(2)
-- Significant capex programme of GBP1.1 billion; 1.5 million sq
ft delivering into supply drought
-- Yield driven valuation decline of 3.4% (ERVs up 0.7%); EPRA NTA per share of 794 pence
-- Significant financial strength; low pro forma LTV of 17.8% and GBP494m of liquidity
-- GPE well positioned to capitalise on opportunities emerging in London
Toby Courtauld, Chief Executive, said: " Over the past six
months, property values in our markets have come under pressure,
given the challenging macro-economic and geopolitical environment.
However, demand for best in class spaces remains robust, driving
strong leasing activity, best illustrated by our own record leasing
since March, growing prime office rents and enabling us to continue
recycling capital out of mature assets at near cycle-low
yields.
Whilst economic challenges may persist in the near term, our
experience is that many customers are looking through the downturn
in assessing their real estate needs, seeking to trade up to great
spaces that are fit for future working patterns. In that context,
GPE is well placed; the central London office market is
prospectively starved of new, Grade A supply and we plan to deliver
our GBP1.1 billion capex programme into this shortage and a
recovering economy; our flex office offer is growing well,
delivering our highest rental growth through providing great
service to customers; and our strong balance sheet, low leverage
and plentiful liquidity combined with our long track record of
creating opportunities in volatile market conditions means that we
are well positioned to capitalise. GPE is in good health and,
against this backdrop, we look to our future with confidence."
Record leasing inc. pre-let of all offices at 2 Aldermanbury
Square, EC2; 4.4% ahead of ERV(2)
-- GBP16.7 million p.a. of new annual rent across 205,300 sq ft
(inc. GBP4.6 million in retail), market lettings 4.4% above March
2022 ERV (Fully Managed lettings: 10.3%>ERV); further GBP6.6
million of lettings under offer
-- Our Flex offer now c.15% of office portfolio, targeting
650,000 sq ft (c.26%) of office portfolio by 2027
-- Rent roll up 5.4%, vacancy down to 7.4% (Mar 2022: 10.8%);
3.3% excl. developments; 100% rent collection
-- Since 1 October, further GBP27.5 million p.a. of new annual
rent signed across 346,300 sq ft, market lettings 2.5% above March
2022 ERV, including:
o Our largest ever pre-let at 2 Aldermanbury Square, EC2;
GBP24.7 million, 20 year term
Total prospective capex of GBP1.1 billion; commitment to 2
Aldermanbury Square, EC2
-- Good progress across 13 schemes, well timed to deliver into
supply constrained market; 1.5 million sq ft; c.50% of
portfolio
-- Net Zero Carbon refurbishment at 50 Finsbury Square, EC2 on
track for hand over to Inmarsat in December
-- Following pre-let, commitment to develop 2 Aldermanbury
Square, EC2, anticipated completion Q4 2025
-- Three further near-term development schemes, starts from
2023; with significant refurbishment programme to enhance our Fully
Managed offer
Valuation down 3.4% driven by yield expansion; EPRA(4) NTA per
share of 794 pence
-- Portfolio valuation of GBP2.6 billion, down 3.4%(3) ; -3.9%
offices (inc. Flex -1.4%) and -1.5% retail
-- Rental values up by 0.7%(3) (+1.0% offices (inc. Flex +3.3%)
and -0.5% retail); yield expansion of 15 bp
-- Portfolio rental value growth guidance of 0% to +2.5% for the financial year
-- IFRS NAV and EPRA(4) NTA per share of 794 pence, down 4.9% over six months
-- EPRA(4) earnings of GBP11.4 million, down 39.0% on H1 2021.
EPRA(4) EPS of 4.5 pence, down 39.2%
-- IFRS loss after tax of GBP86.6 million (2021: profit of
GBP62.2 million) ; interim dividend maintained at 4.7 pence per
share
Significant strength; profitable capital recycling, pro forma
LTV of 17.8%
-- Two sales (GBP217.8 million) inc. exchange of 50 Finsbury
Square, EC2 for GBP190 million in October, reflecting a topped up
net initial yield of 3.85% and capital value of GBP1,471 per sq ft,
completion Q1 2023
-- Two acquisitions (GBP37.1 million) inc. 6/10 St Andrew
Street, EC4 for GBP30.0 million (GBP650 per sq ft), growing our
Fully Managed offer
-- Pro forma (5) EPRA LTV of 17.8%, weighted average interest
rate of 2.7%, cash and undrawn facilities of GBP494 million(5) ;
weighted average debt maturity of 6.8 (5) years; no maturities in
next 18 months
-- Reviewing GBP0.9 billion of acquisitions and GBP100 million of sales
-- Team reorganisation and promoting from within to deliver
Customer First approach and position business to take advantage of
changing market conditions
(1) All values include share of joint ventures unless otherwise
stated (2) Leasing in period to 30 September 2022 3. 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. (5) Pro forma for the expected proceeds from
the sale of 50 Finsbury Square, EC2 (GBP190 million), after
deducting expected capex to complete (GBP11.3 million).
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
FGS Global +44 (0) 20 7251 3801
James Murgatroyd
Gordon Simpson
The results presentation will be broadcast live at 10.00am today
with the link available at:
www.gpe.co.uk/investors/latest-results
A conference call facility will also be available to listen to
the presentation at 10.00am today on the following numbers:
UK: 0808 109 0701 (freephone) International: +44 (0) 33 0551
0202
Conference PIN: 8414019#
A video interview with 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/6917G_1-2022-11-16.pdf
Half Year Results
Our business
Our business is accompanied by graphics (see Appendix 1 and
3)
Our leasing and Flex activities
During the six months to 30 September 2022, momentum in our
occupational markets remained good. Our Customer First approach has
continued to attract demand for our brand of high quality,
well-located space, resulting in a strong first half leasing
performance.
Key highlights include:
-- 63 new leases were signed during the first half (2021: 35
leases), generating annual rent of GBP16.7 million (our share:
GBP15.1 million; 2021: GBP21.8 million), market lettings 4.4% above
March 2022 ERVs (offices; 5.1%; retail -2.8%), including;
o six Fitted and eleven Fully Managed leases, achieving on
average GBP183 per sq ft on the Fully Managed space, 10.3% ahead of
March 2022 ERV; and
o 20 new retail leases securing GBP4.6 million of rent with
market lettings 2.8% below March 2022 ERV, including two units at
50 Finsbury Square, EC2, where the retail space is now all let or
under offer.
-- nine rent reviews securing GBP10.1 million p.a. (our share:
GBP5.2 million; 2021: GBP2.0 million) of rent were settled during
the half year, 2.0% ahead of previous passing rent and 5.0% ahead
of ERV;
-- total space covered by new lettings, reviews and renewals
during the first half was 358,000 sq ft (2021: 387,200 sq ft);
-- 78% (by area) of the 87 leases with breaks or expiries in the
twelve months to 30 September 2022 were retained, re-let, or are
under offer, leaving 66,000 sq ft still to transact; and
-- following the successful leasing period, the Group's rent
roll has increased by 5.4% to GBP109.7 million and the Group's
vacancy has reduced to 7.4% (31 March 2022: 10.8%).
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
2022 2022 2021
--------------------------- -------------------- -------------------- --------------------
New leases and renewals
completed
Number 43 63 35
GPE share of rent p.a. GBP9.7 million GBP15.1 million GBP21.8 million
Area (sq ft) 146,200 205,300 358,800
Rent per sq ft (including GBP99 GBP104 GBP76
retail)
Rent reviews settled
Number 7 9 3
GPE share of rent p.a. GBP4.8 million GBP5.2 million GBP2.0 million
Area (sq ft) 148,300 152,700 28,400
Rent per sq ft (including GBP64 GBP66 GBP72
retail)
---------------------------- -------------------- -------------------- --------------------
Note: Includes joint ventures at share
Notable transactions during the six months included:
-- At 1 Newman Street, W1, we signed a further two office leases
(27,700 sq ft) in the period for a combined rent of GBP2.6 million
p.a. These two lettings completed the 80,700 sq ft office leasing
at an average 3.2% ahead of ERV and an average void of only five
months;
-- At Kent House, W1, following the recent conversion of a 4,000
sq ft unit to Fully Managed space, we secured a new customer on a
two year term at a record GBP240 per sq ft average over the term;
and
-- In early July, we leased a further retail unit at Hanover
Square, W1 to the Opera Gallery, who will be relocating further
north on New Bond Street to create a new larger flagship premises
across basement, ground and first floor levels totalling over 6,100
sq ft of space. Opera Gallery will join other luxury retailers at
our Hanover Square scheme, including Canali, Pronovias, Seiko,
Moyses Stevens and WatchHouse. With a further letting to Bang &
Olufsen completed post 30 September, there are now only two retail
stores remaining, both of which are under offer.
At 30 September 2022, the Group's vacancy rate (including share
of joint ventures) was 7.4%, down from 10.8% at 31 March 2022, due
to the strong leasing in the period. Excluding recently completed
developments, the vacancy rate was 3.3%, down from 4.4% at 31 March
2022. The average passing rent across our office portfolio was
GBP71.50 per sq ft, up from GBP67.50 per sq ft at 31 March
2022.
Since 30 September 2022, our leasing activity included:
-- The pre-let of all 321,100 sq ft of office space at our 2
Aldermanbury Square, EC2 development to a leading international law
firm. Clifford Chance entered an agreement to lease for the lower
ground to twelfth floors, on separate 20 year leases, with options
to break at year 15 together with additional options to break at
year eight on the fourth floor; and year twelve on the fifth floor.
Clifford Chance also has an option to hand back the first to fourth
floors of the building (up to 89,000 sq ft) which expires on 1
March 2024. The agreement to lease is conditional on the discharge
of two planning conditions (by May 2023) and approval from the City
of London as required by GPE's headlease ahead of practical
completion. Clifford Chance will pay an initial average rent of
GBP77.00 per sq ft (assuming no space is handed back) and will
benefit from 38 months' rent free over the fifteen year terms, with
a further three months' rent free in the event those leases are not
broken.
-- In total, we completed ten new leases generating GBP27.5
million (our share: GBP27.1 million) of annual rent (346,300 sq
ft), with market lettings 2.5% above March 2022 ERVs; and
-- A further 79,300 sq ft of space is under offer which would
deliver approximately GBP6.6 million p.a. in rent (our share:
GBP5.9 million), with market lettings 2.5% below March 2022
ERVs.
On track to create 650,000 sq ft of Fitted and Fully Managed
spaces by 2027
Evolving patterns of work are changing what many customers want
from their office space and we are meeting this demand with our
innovative Fitted and Fully Managed spaces. During the period,
including our Flex partnerships, we increased our flex offerings
across the portfolio and they now total 284,000 sq ft (or c.15% of
our offices). This included rolling out our offering to two new
buildings in the period at Kent House, W1 and Alfred Place,
WC1.
Looking forward, our portfolio is well suited to further growing
this flexible office exposure. Our average building size is small
at around 65,000 sq ft and more than 80% of our floors are
sub-10,000 sq ft. We have further ambitions for growth and are
targeting to grow our offer organically to more than 650,000 sq ft.
This growth would take these offerings to around 26% of our office
portfolio by 2027 and we are excited about the opportunity for
future growth in this space. We will supplement this growth through
targeting investment opportunities that lend themselves to our
flexible space products, as demonstrated by our acquisitions of
7/15 Gresse Street, W1 and 6/10 St Andrew Street, EC4 earlier in
2022.
Team reorganisation and promoting from within
As we focus on delivering our Customer First approach and
positioning GPE to take advantage of changing market conditions, we
have undertaken a team reorganisation whilst also continuing to
promote from within. We are rebalancing the responsibilities of our
Executive Directors. Nick Sanderson is assuming reporting line
responsibility for Marketing, Flex and Customer Experience, whilst
Dan Nicholson is taking on New Business, Health & Safety and
the newly created Workplace Services function (headed by David
O'Sullivan). We are also promoting Rebecca Bradley to Director of
Customer Experience and Relationships who will be responsible for
operational delivery of customer experience across all our spaces.
She will report to Steven Mew who sits on the Executive Committee.
Robin Matthews (Investment Director) will be leaving the business.
We thank Robin for his six years of service as a valued colleague
and Executive Committee member and wish him continued success in
the future. There are no changes to the existing composition of the
Board, their other responsibilities or any other changes to the
Executive Committee resulting from these appointments.
Our development activities and capex programme
Within our GBP1.1 billion prospective capex programme we have
continued to make excellent progress with both our two committed
and three near-term schemes, and have advanced our plans to further
invest in the expansion of our Fully Managed spaces. Since March
2022, we have committed to the 322,700 sq ft development of 2
Aldermanbury Square, EC2 and continued to make good progress at 50
Finsbury Square, EC2, scheduled to complete next month and now 100%
pre-let or under offer.
Two committed schemes, offices 100% pre-let
At 50 Finsbury Square EC2, construction is advancing well with
the scaffolding removed ahead of expected completion next month.
The Net Zero Carbon scheme will deliver 129,200 sq ft of
refurbished space, including 121,800 sq ft of offices all of which
is pre-let to Inmarsat. All of the 7,300 sq ft of retail space has
now been let or is under offer. In October 2022, we exchanged
contracts to sell the scheme on completion for GBP190.0 million,
see below. Based on the sales price, we expect the scheme to
deliver a profit on cost of 37%. At 30 September 2022, 50 Finsbury
Square, EC2 was valued at GBP176.0 million and required an
estimated GBP11.3 million of capital expenditure to complete.
Following the pre-let to Clifford Chance, we have committed to
the redevelopment of 2 Aldermanbury Square, EC2. Our scheme will
substantially increase the size of the building to 322,700 sq ft
(up from 176,000 sq ft) and will deliver our second Net Zero Carbon
building, after 50 Finsbury Square, EC2. We are currently on-site
demolishing the old building and, as part of this process, are
extracting the structural steel and reconditioning it for reuse in
one of our future development schemes. This pioneering approach
will reduce the embodied carbon of the steel when reused by more
than 90%. 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 Elizabeth Line station. The cost to complete the
scheme is GBP276 million and it is expected to deliver a profit on
cost of 11%.
Beyond this, the team continues to prepare our substantial
development pipeline of a further six development schemes with
prospective deliveries from the mid-2020s and beyond.
Three near term schemes; planning permission granted at French
Railways House & 50 Jermyn Street, SW1
In May 2022, we obtained 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 54,700 sq ft) of new Grade A space. Whilst aspects of the
circular economy have been integrated in other development schemes,
this scheme is designed to fully embrace the principles of the
circular economy. As well as reusing the existing basement and
foundations, we are aiming to reuse the structural steel from the
demolition of 2 Aldermanbury Square, EC2, in its construction. If
successful, this will save around 1,000 tons of carbon and reduce
the embodied carbon in the steelwork by more than 90%. The
development of the building is subject to The Crown Estate
consent.
At New City Court, SE1, we submitted a second planning
application for an amended scheme of 389,100 sq ft in April 2021.
Having explored all avenues to have both the 2018 and 2021 schemes
approved by Southwark Council without success, we therefore
regretfully appealed for non-determination with the public inquiry
taking place in July 2022. With the inquiry now concluded we expect
a decision from the Secretary of State in May 2023.
At Minerva House, SE1, we are finalising plans for a 140,300 sq
ft major office refurbishment. 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 November 2021 and we
expect a decision later this financial year.
In total, our five on-site and near-term schemes will deliver
1.1 million sq ft of best-in-class, highly sustainable space,
perfectly placed to benefit from a market where forward look supply
is severely constrained. With a further three schemes in the
medium-term pipeline, our total development programme totals 1.3
million sq ft and will provide strong growth potential over the
coming years.
Significant refurbishment programme to enhance our Fully Managed
offer
In order to grow our flexible office offer, we are planning to
refurbish four buildings to provide new dedicated Fully Managed
spaces as well as converting a significant number of floors across
our portfolio. These buildings include our recent purchases at 7/15
Gresse Street, W1 and 6/10 St Andrew Street, EC4, and Alfred Place,
WC1 and Egyptian House, SW1 (Piccadilly) where we have secured
vacant possession to enable our works to commence mid next
year.
In total, these four schemes will deliver an additional 155,000
sq ft of well designed, tech-enabled and sustainable space which
will also benefit from high levels of service delivery and amenity
provision. Together with other flex and refurbishment capex across
the portfolio, this programme will total around GBP145 million.
Our investment activities
Activity in our investment markets was robust in the first half
of the financial year. However, more recent economic uncertainty,
together with an increased cost of financing, has weighed on
pricing and valuations. We anticipate that given this change in the
economic backdrop, further opportunities to buy will emerge.
Accordingly, we continue to monitor the market closely and have
more than GBP0.9 billion 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 currently challenged from a sustainability
perspective.
Recycling capital, two disposals totalling GBP217.8 million
broadly in line with book value
In June, we sold the freehold of 6, 7/8 and 9/10 Market Place,
W1 to a UK private property company. The property comprises three
adjoining mixed use assets totalling 18,000 sq ft including
multi-let offices and restaurant/café space. The headline sale
price of GBP28.2 million reflects a net initial yield of 4.1% on a
topped up basis and capital value of GBP1,480 per sq ft. After
deduction of outstanding occupier incentives and rental guarantees,
the net price was GBP27.8 million, 3.0% ahead of the March 2022
book value.
In October, we exchanged contracts on the sale of the freehold
of 50 Finsbury Square, EC2 to a wholly owned subsidiary of Wirtgen
Invest Holding GmbH, a private German family office. The headline
price of GBP190.0 million (subject to adjustment for final building
area and retail leasing) reflects a topped up net initial yield of
3.85% and capital value of GBP1,471 per sq ft (or GBP1,690 per sq
ft on expiry of rent frees) and is broadly in line with the March
2022 book value after adjusting for estimated capex to complete. We
will retain responsibility for delivering the development with
completion of the sale expected in Q1 2023 following practical
completion and commencement of the leases of the office and retail
space.
Two attractive acquisitions
In May we completed the off-market acquisition of the long
leasehold interest at 6/10 St Andrew Street, EC4 for GBP30.0
million (GBP650 per sq ft). The 46,200 sq ft building is currently
vacant and benefits from planning permission for a two-storey
extension. The building is located within five minutes walking
distance of Chancery Lane and Farringdon stations and is only 450
metres from the new Farringdon Elizabeth Line. It has excellent
fundamentals and requires substantial refurbishment to bring it in
line with GPE's net zero carbon commitment. It will provide
approximately 48,000 sq ft over lower ground and eight upper
floors, with two private terraces as well as a communal roof
terrace and winter garden. St Andrew Street will deliver
best-in-class Fully Managed office space in a core target location,
with outstanding amenity space at ground floor and roof top
levels.
Also in May, we acquired 2 Cathedral Street, SE1 for GBP7.1
million reflecting a 4.4% net initial yield and GBP1,100 per sq ft.
The 6,400 sq ft freehold building is currently let until 2029 at a
rent of GBP332,000 per annum. The property is located in the heart
of Borough market and will complement GPE's Minerva House holding
in this exciting submarket.
Valuation
Valuation is accompanied by graphics (see Appendix 2)
The valuation of the Group's properties was GBP 2,614.0 million
as at 30 September 2022, reflecting a valuation decrease of 3.4% on
a like-for-like basis since 31 March 2022. At 30 September 2022,
the wholly-owned portfolio was valued at GBP 2,069.0 million and
the Group had three active joint ventures which owned properties
valued at GBP545.0 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:
-- portfolio management - a strong six months, 72 new leases,
rent reviews and renewals were completed, securing GBP 20.3 million
(our share) of annual income, supporting the valuation. At 30
September 2022, the portfolio was 6.7% reversionary;
-- rental value increase - since the start of the financial
year, rental values increased by 0.7% on a like-for-like basis,
with our flex offices increasing by 3.3% and our overall office
portfolio up by 1.0%, whilst our retail portfolio reduced by 0.5%;
and
-- increased investment yields - equivalent yields increased by
15 basis points over the period. At 30 September 2022, the
portfolio true equivalent yield was 4.6% and reversionary yield was
5.3%.
Including rent from pre-lets and leases currently in rent free
periods, the topped up initial yield of the investment portfolio at
30 September 2022 was 3.9%, 10 basis points higher than the start
of the financial year.
Whilst the overall valuation decreased by 3.4% during the six
months on a like-for-like basis, elements of the portfolio
continued to show greater variation. Although our office portfolio
values fell in value by 3.9%, as a result of yield expansion of 18
basis points, our Flex offices were only down 1.4% as a result of
rental value increases of 3.3% across the Flex portfolio in the
period. Our retail performed slightly better falling in value by
only 1.5%. Furthermore, properties with an EPC rating of A or B
reduced in value by 2.5%, out-performing properties with an EPC of
C or D which fell by 4.2% in the six months. Our joint venture
properties fell in value by 2.6% over the period, helped by the
strong retail leasing activity at our recently completed
development Hanover Square, W1, while the wholly-owned portfolio
fell by 3.6% on a like-for-like basis, supported by our committed
developments at 50 Finsbury Square.
The Group delivered a total property return (TPR) for the six
months to 30 September 2022 of -2.1% (2021: -3.7%), compared to the
Central London MSCI quarterly benchmark of -1.0%, and a capital
return of -3.3% (versus -2.5% for MSCI). This relative
underperformance resulted from our above benchmark exposure to
short leasehold and short income properties.
Near-term market outlook
Our markets are cyclical, as a result, we actively monitor
numerous lead indicators to help identify key trends in our
marketplace. Over the last six months, given the increased economic
uncertainty, our property capital value indicators have
deteriorated from those we reported in May. In the short term, we
expect investment activity in the central London commercial
property market to remain muted, as higher interest rates reduce
prospective returns, and prime yields to come under further upward
pressure. In the occupational market, given a strong leasing and
rental performance of the portfolio in the first half of the year,
we have marginally moderated our rental value growth range for the
financial year to 31 March 2023 to between 0% and +2.5%,
predominantly driven by the positive performance of our office
portfolio.
Our financial results
Our financial results are accompanied by graphics (see Appendix
4)
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 fall drives 4.9% decrease in EPRA NTA per share
IFRS NAV per share and EPRA NTA per share at 30 September 2022
were 794 pence per share, a decrease of 4.9% over the last six
months, largely due to the 3.4% like-for-like decrease in the value
of the property portfolio. The main drivers of the 41 pence per
share decrease in NTA from 31 March 2022 were:
-- the decrease of 39 pence per share arising from the
revaluation of the property portfolio;
-- EPRA earnings for the period of 5 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 decrease of 4.9%, 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 2022 of minus
4.0% (2021: +3.2%).
At 30 September 2022, the Group's net assets were GBP2,008.1
million, down from GBP2,112.9 million at 31 March 2022, with the
decrease largely attributable to the fall in property valuation.
EPRA NDV per share reduced marginally to 830 pence at 30 September
2022 compared to 838 pence at 31 March 2022 (down 1.0%), supported
by the impact of rising interest rates on the fair values of our
fixed rate low coupon debt.
Earnings reduced, in line with guidance and our portfolio
activities
Revenue from our wholly-owned properties rose by GBP1.3 million,
largely driven by higher rental income (together with the spreading
of lease incentives) including the commencement of new leases at 1
Newman Street, W1. The increase in rental income was largely offset
by a decrease in joint venture fees, down GBP2.8 million on last
year to GBP1.5 million, as the result of no disposal fees in the
current year (2021: sale of 160 Old Street, EC1).
Adjusting for acquisitions, disposals and transfers to and from
the development programme, like-for-like rental income (including
from joint venture properties) increased 7.3% on the prior period
after estimated credit loss provisions.
Cost of sales increased from GBP13.7 million to GBP14.2 million
for the period to 30 September 2022, with the increase primarily
due to higher service charge expenses, including costs associated
with the delivery of our Fully Managed spaces.
As the central London economy continues to recover from the
pandemic, we have seen a continued improvement in collection rates
for both the June and September 2022 quarters (96% and 100% after 7
days respectively). Of the GBP8.7 million rent and service charge
outstanding at 30 September 2022, we provided GBP3.8 million as an
expected credit loss (an additional GBP1.4 million in the
period).
Administration costs were GBP17.6 million, an increase of GBP1.4
million, primarily as a result of the investment associated with
digitising elements of our business, the delivery of our Customer
First programme and the creation of our new website, together with
inflationary salary uplifts and increased headcount to support our
enhanced operational capabilities.
EPRA earnings from joint ventures (excluding fair value
movements) were GBP2.9 million, a decrease of GBP6.9 million from
the prior year, largely driven by the disposal of 160 Old Street,
EC1 and the Superdry surrender premium of GBP7.9 million (our
share: GBP3.9 million) at 103/113 Regent Street, W1 received in the
prior year. In total, our joint ventures delivered a loss before
tax of GBP14.8 million (2021: GBP26.8 million profit).
Gross interest on our debt facilities was GBP8.3 million, up
GBP1.1 million on the prior period. This increase was primarily due
to higher underlying interest rates on our GBP450 million revolving
credit facility and additional drawings to fund both the recent
acquisitions as well as the Group's development capital
expenditure. We capitalised interest of GBP4.6 million (2021:
GBP4.0 million) . As a result, the Group had net finance costs
(including interest receivable) of GBP1.9 million (2021: GBP0.1
million).
EPRA earnings were GBP 11.4 million, 39.0% lower than for the
same period last year. Revaluation losses together with EPRA
earnings resulted in an IFRS loss after tax of GBP86.6 million
(2021: profit of GBP62.2 million). The basic and diluted loss per
share for the period was 34.3 pence, compared to earnings of 24.6
pence per share for 2021. Diluted EPRA earnings per share was 4.5
pence (2021: 7.4 pence).
Results of joint ventures
The Group's net investment in joint ventures was GBP 561.5
million, a decrease from GBP582.8 million at 31 March 2022, largely
due to a 2.6% like-for-like decrease in value of the property
portfolio. Our share of joint venture net rental income was GBP8.4
million, significantly down from GBP14.8 million last year
primarily as a result of the profitable sale of 160 Old Street, EC1
and a one-off surrender premium of GBP3.9 million (our share)
received in the prior year, offset by increased leasing activity at
Hanover Square, W1. The underlying joint venture profits are stated
after charging GBP1.5 million of GPE management fees (2021: GBP4.3
million) with the decrease attributable to the disposal fee
received in the prior year 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 2022, joint
ventures represented 20.8% of the portfolio valuation, 28.0% of net
assets and 22.7% of rent roll (31 March 2022: 21.1%, 27.6% and
22.8% respectively).
Strong financial position; pro forma EPRA LTV low at 17.8%
The Group's consolidated net debt increased to GBP603.3 million
at 30 September 2022, compared to GBP531.2 million at 31 March
2022. The increase was largely due to two acquisitions in the
period as well as the on-going development capital expenditure
across the Group of GBP46 million in the six months, partly off-set
by the sale proceeds. Group gearing increased to 30.4% at 30
September 2022 (31 March 2022: 25.4%). Including cash balances in
the joint ventures, total net debt was GBP579.3 million (31 March
2022: GBP502.3 million) equivalent to an EPRA loan to value of
23.6% (31 March 2022: 20.5%). Taking into account the sale proceeds
of 50 Finsbury Square, EC2, net of costs to complete the building,
pro forma EPRA LTV will fall to 17.8%.
The Group is operating with substantial headroom over its debt
covenants. At 30 September 2022, pro forma for the sale of 50
Finsbury Square, property values would have to fall by around 62%
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 was high at 15.8 times (covenant: 1.35 times).
The Group's weighted average cost of debt, including fees and
joint venture debt, for the period was 2.9 %, the same as it was at
31 March 2022. The weighted average interest rate (excluding fees)
at the period end was 2.8%, up from 2.5% at 31 March 2022, as we
increased amounts drawn on the RCF towards the end of the period.
At 30 September 2022, 73% of the Group's total debt was at fixed or
hedged rates (31 March 2022: 84%). Our weighted average drawn debt
maturity was 6.1 years at 30 September 2022 (31 March 2022: 6.9
years), or 6.8 years pro forma for the sale of 50 Finsbury Square,
EC2, with no debt maturities until 2024.
Taxation
The tax credit in the income statement for the half year was
GBP0.1 million (2021: GBP0.1 million charge) and the effective tax
rate on EPRA earnings was 0% (2021: 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 2022, 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
(including the sale of 50 Finsbury Square, EC2, which is expected
to complete in Q1 2023).
Dividends
The Board has declared an interim ordinary dividend of 4.7 pence
per share (2021: 4.7 pence) which will be paid on 4 January 2023.
2.3 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 in line with
those detailed on pages 64 to 77 of the 2022 Annual Report with no
material changes:
Failure to profitably deliver Failure to profitably develop
the Flex strategy the development programme (including
challenging planning environment)
Climate change and decarbonisation People
--------------------------------------
Pandemic Failure to meet customer needs
--------------------------------------
London attractiveness Cyber security and infrastructure
failure
--------------------------------------
Poor capital allocation decisions Health and safety
and/or misreading market conditions
--------------------------------------
Adverse macro environment (incorporating
retail market uncertainties)
--------------------------------------
The Board and Executive Committee continue to regularly review
the potential risks and impacts presented by the volatile economic
backdrop, including in relation to elevated levels of inflation and
higher underlying interest rates. As we emerge from the pandemic,
the Board also continues to monitor 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.
As a result of heightened economic uncertainty, 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 2022
Six Six
Year months months
to 31 to 30 to 30
March September September
2022 2022 2021
Audited Unaudited Unaudited
GBPm Notes GBPm GBPm
--------- ------------------------------------------- ------ ----------- -----------
84.2 Revenue 2 43.5 42.2
(30.1) Cost of sales 3 (14.2) (13.7)
--------- ------------------------------------------- ------ ----------- -----------
54.1 29.3 28.5
(35.0) Administrative expenses (17.6) (16.2)
(4.1) Expected credit losses 12 (1.2) (3.1)
(0.4) Development management profit/(losses) 0.1 (0.2)
--------- ------------------------------------------- ------ ----------- -----------
Operating profit before (deficit)/surplus
from investment property and results of
14.6 joint ventures 10.6 9.0
107.9 (Deficit)/surplus from investment property 8 (80.6) 26.6
45.9 Share of results of joint ventures 9 (14.8) 26.8
--------- ------------------------------------------- ------ ----------- -----------
168.4 Operating (loss)/profit (84.8) 62.4
7.4 Finance income 4 3.1 4.1
(9.1) Finance costs 5 (5.0) (4.2)
--------- ------------------------------------------- ------ ----------- -----------
166.7 (Loss)/profit before tax (86.7) 62.3
0.5 Tax 6 0.1 (0.1)
--------- ------------------------------------------- ------ ----------- -----------
167.2 (Loss)/profit for the period (86.6) 62.2
--------- ------------------------------------------- ------ ----------- -----------
66.1p Basic (loss)/earnings per share 7 (34.3p) 24.6p
--------- ------------------------------------------- ------ ----------- -----------
66.0p Diluted (loss)/earnings per share 7 (34.3p) 24.6p
--------- ------------------------------------------- ------ ----------- -----------
10.8p Basic EPRA earnings per share 7 4.5p 7.4p
--------- ------------------------------------------- ------ ----------- -----------
10.8p Diluted EPRA earnings per share 7 4.5p 7.4p
--------- ------------------------------------------- ------ ----------- -----------
All results are derived from continuing operations in the United
Kingdom and are attributable to ordinary equity holders.
Condensed group statement of comprehensive income
For the six months ended 30 September 2022
Six months Six months
Year ended to 30 to
31 March September 30 September
2022 2022 2021
Audited Unaudited Unaudited
GBPm GBPm GBPm
---------- ------------------------------------------------ ---------- -------------
167.2 (Loss)/profit for the period (86.6) 62.2
Items that will not be reclassified subsequently
to profit and loss:
2.6 Actuarial gain/(loss) on defined benefit scheme 0.6 (0.7)
(0.5) Deferred tax on actuarial (loss)/gain on defined (0.1) 0.1
benefit scheme
169.3 Total comprehensive (expense)/income for the (86.1) 61.6
period
---------- ------------------------------------------------ ---------- -------------
Condensed group balance sheet
At 30 September 2022
As at As at As at
31 March 30 September 30 September
2022 2022 2021
Audited Unaudited Unaudited
GBPm Notes GBPm GBPm
--------- ------------------------------------- ----- ------------- ---------------
Non-current assets
2,144.4 Investment property 8 2,135.7 1,959.2
582.8 Investment in joint ventures 9 561.5 563.0
5.0 Property, plant and equipment 10 4.2 5.7
3.5 Pension asset 4.3 0.1
1.0 Other investments 11 1.5 1.5
2,736.7 2,707.2 2,529.5
--------- ------------------------------------- ----- ------------- ---------------
Current assets
21.1 Trade and other receivables 12 14.0 21.8
- Corporation tax - -
- Cash and cash equivalents 7.0 6.8
--------- ------------------------------------- ----- ------------- ---------------
21.1 21.0 28.6
--------- ------------------------------------- ----- ------------- ---------------
2,757.8 Total assets 2,728.2 2,558.1
--------- ------------------------------------- ----- ------------- ---------------
Current liabilities
(0.2) Interest-bearing loans and borrowings - -
(55.2) Trade and other payables 13 (40.7) (53.3)
(55.4) (40.7) (53.3)
--------- ------------------------------------- ----- ------------- ---------------
Non-current liabilities
(531.0) Interest-bearing loans and borrowings 14 (610.3) (445.4)
(55.6) Obligations under head leases 16 (66.7) (40.7)
(2.9) Obligations under occupational leases 17 (2.4) (3.4)
(589.5) (679.4) (489.5)
--------- ------------------------------------- ----- ------------- ---------------
(644.9) Total liabilities (720.1) (542.8)
--------- ------------------------------------- ----- ------------- ---------------
2,112.9 Net assets 2,008.1 2,015.3
--------- ------------------------------------- ----- ------------- ---------------
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
1,697.9 Retained earnings 1,593.9 1,602.2
3.6 Investment in own shares 18 2.8 1.7
--------- ------------------------------------- ----- ------------- ---------------
2,112.9 Total equity 2,008.1 2,015.3
--------- ------------------------------------- ----- ------------- ---------------
835p Diluted net assets per share 7 794p 796p
--------- ------------------------------------- ----- ------------- -------------
835p Diluted EPRA NTA per share 7 794p 796p
--------- ------------------------------------- ----- ------------- -------------
Condensed group statement of cash flows
For the six months ended 30 September 2022
Six months Six months
Year to to to
31 March 30 September 30 September
2022 2022 2021
Audited Unaudited Unaudited
GBPm Notes GBPm GBPm
--------- --------------------------------------------- ----- ------------- -------------
Operating activities
168.4 Operating (loss)/profit (84.8) 62.4
(149.7) Adjustments for non-cash items 19 95.0 (51.0)
(1.6) Decrease/(increase) in receivables 7.1 (0.8)
3.0 (Decrease)/increase in payables (7.4) (1.9)
--------- --------------------------------------------- ----- ------------- -------------
20.1 Cash generated by operations 9.9 8.7
(13.9) Interest paid (8.1) (7.1)
0.1 Interest received - -
0.4 Tax refunded - 0.4
6.7 Cash flow from operating activities 1.8 2.0
--------- --------------------------------------------- ----- ------------- -------------
Investing activities
7.3 Distributions from joint ventures 3.5 4.8
- Funds to joint ventures - -
89.5 Funds from joint ventures 6.0 89.5
- Investment in joint ventures - -
(120.6) Purchase and development of property (90.1) (34.3)
(0.3) Purchase of plant and equipment (0.1) (0.1)
- Purchase of other investments (0.5) (0.5)
- Sale of properties 27.4 (0.4)
----- -------------
(24.1) Cash flow (used in)/from investing activities (53.8) 59.0
--------- --------------------------------------------- ----- ------------- -------------
Financing activities
(202.5) Revolving credit facility repaid 14 (160.0) (116.0)
244.5 Revolving credit facility drawn 14 239.0 71.0
Repayment of short-term interest-bearing
- loans and borrowings (0.2) -
(3.0) Payment of lease obligations (1.7) (1.5)
(32.7) Dividends paid 21 (18.1) (18.8)
--------- --------------------------------------------- ----- ------------- -------------
6.3 Cash flow from/(used in) financing activities 59.0 (65.3)
--------- --------------------------------------------- ----- ------------- -------------
Net increase/(decrease) in cash and cash
(11.1) equivalents 7.0 (4.3)
11.1 Cash and cash equivalents at 1 April - 11.1
--------- --------------------------------------------- ----- ------------- -------------
Cash and cash equivalents at balance sheet
- date 7.0 6.8
--------- --------------------------------------------- ----- ------------- -------------
Condensed group statement of changes in equity
For the six months ended 30 September 2022 (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 2022 38.7 46.0 326.7 1,697.9 3.6 2,112.9
Loss for the period - - - (86.6) - (86.6)
Actuarial gain on defined benefit
scheme - - - 0.6 - 0.6
Deferred tax on defined benefit
scheme - - - (0.1) - (0.1)
Total comprehensive expense for
the period - - - (86.1) - (86.1)
---------------------------------- --------- --------- ----------- --------- ------------ -------
Employee Long-Term Incentive Plan
charge and other items - - - - 1.3 1.3
Transfer to retained earnings - - - 2.1 (2.1) -
Dividends to shareholders - - - (20.0) - (20.0)
Total equity at 30 September 2022 38.7 46.0 326.7 1,593.9 2.8 2,008.1
---------------------------------- --------- --------- ----------- --------- ------------ -------
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 year ended 31 March 2022 (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 2021 38.7 46.0 326.7 1,560.0 0.2 1,971.6
Profit for the period - - - 167.2 - 167.2
Actuarial gain on defined benefit
scheme - - - 2.6 - 2.6
Deferred tax on defined benefit
scheme - - - (0.5) - (0.5)
Total comprehensive income for
the year - - - 169.3 - 169.3
---------------------------------- --------- --------- ----------- --------- ------------ -------
Employee Long-Term Incentive Plan
charge - - - - 3.9 3.9
Transfer to retained earnings - - - 0.5 (0.5) -
Dividends to shareholders - - - (31.9) - (31.9)
Total equity at 31 March 2022 38.7 46.0 326.7 1,697.9 3.6 2,112.9
---------------------------------- --------- --------- ----------- --------- ------------ -------
Condensed notes forming part of the half year results
1 Basis of preparation
The information for the year ended 31 March 2022 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
source of estimation uncertainty is the valuation of the property
portfolio. There were no critical judgements made in the
preparation of the condensed financial statements. 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 2023, 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 2022, with particular focus on the
impact of geopolitical tensions and high inflation 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 33 % decline in the valuation of the property portfolio;
- an 8% increase in rental income; and
- an overall decrease of around 28% 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 50% before
breach (or 62% from 30 September 2022 values);
- earnings before interest and tax would need to fall by a
further 70 % before breach of our ICR; 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 2022.
2 Revenue
Six months Six months
Year to to to
31 March 30 September 30 September
2022 2022 2021
GBPm GBPm GBPm
--------- ----------------------------- ------------- -------------
66.1 Gross rental income 32.8 32.7
1.2 Spreading of lease incentives 2.5 0.2
11.2 Service charge income 5.1 4.9
5.1 Joint venture fee income 1.5 4.3
0.6 Fully Managed services income 1.4 0.1
- Trading property revenue 0.2 -
84.2 43.5 42.2
--------- ----------------------------- ------------- -------------
The table below sets out the Group's gross rental income split
between types of space provided:
Six months
Year to to Six months
31 March 30 September to 30 September
2022 2022 2021
GBPm GBPm GBPm
--------- ----------------- ------------- ----------------
45.5 Ready to fit 21.1 23.0
13.1 Retail 5.9 7.2
3.4 Fitted 1.6 0.9
1.6 Fully Managed 1.9 0.2
2.5 Flex Partnerships 2.3 1.4
--------- ----------------- ------------- ----------------
66.1 32.8 32.7
--------- ----------------- ------------- ----------------
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
2022 2022 2021
GBPm GBPm GBPm
--------- ----------------------------- ---------------- ----------------
66.1 Gross rental income 32.8 32.7
(3.6) Expected credit losses (1.1) (3.1)
62.5 Rental income 31.7 29.6
1.2 Spreading of lease incentives 2.5 0.2
(1.1) Ground rent (0.5) (0.9)
62.6 33.7 28.9
--------- ----------------------------- ---------------- ----------------
3 Cost of sales
Six months Six months
Year to to to
31 March 30 September 30 September
2022 2022 2021
GBPm GBPm GBPm
--------- ------------------------------------------------ ------------- -------------
Service charge expenses (including Fully Managed
15.8 service costs) 7.8 6.9
13.2 Other property expenses 5.9 5.9
1.1 Ground rent 0.5 0.9
30.1 14.2 13.7
--------- ------------------------------------------------ ------------- -------------
3 Cost of sales (continued)
The table below sets out the Group's property costs, please see
note 7 for the Group's alternative performance measures:
Six months Six months
Year to to to
31 March 30 September 30 September
2022 2022 2021
GBPm GBPm GBPm
--------- ------------------------------------------------ ------------- -------------
(11.2) Service charge income (5.1) (4.9)
(0.6) Fully Managed services income (1.4) (0.1)
Service charge expenses (including Fully Managed
15.8 service costs) 7.8 6.9
13.2 Other property expenses 5.9 5.9
0.5 Expected credit losses 0.1 -
--------- ------------------------------------------------ ------------- -------------
17.7 7.3 7.8
--------- ------------------------------------------------ ------------- -------------
4 Finance income
Six months
Year to to Six months
31 March 30 September to 30 September
2022 2022 2021
GBPm GBPm GBPm
--------- ----------------------------------------- ------------- ----------------
7.3 Interest income on joint venture balances 3.1 4.1
0.1 Interest on cash deposits - -
7.4 3.1 4.1
--------- ----------------------------------------- ------------- ----------------
5 Finance costs
Six months
Year to to Six months
31 March 30 September to 30 September
2022 2022 2021
GBPm GBPm GBPm
--------- ------------------------------------------------- ------------- ----------------
2.1 Interest on revolving credit facilities 2.2 1.1
11.0 Interest on private placement notes 5.5 5.5
1.2 Interest on debenture stock 0.6 0.6
1.9 Interest on obligations under head leases 1.2 0.9
0.1 Interest on obligations under occupational leases 0.1 0.1
16.3 Gross finance costs 9.6 8.2
(7.2) Less: capitalised interest at an average interest (4.6) (4.0)
cost of 2.9% (2021: 2.8%)
--------- ------------------------------------------------- ------------- ----------------
9.1 5.0 4.2
--------- ------------------------------------------------- ------------- ----------------
6 Tax
Six months
Year to to Six months
31 March 30 September to 30 September
2022 2022 2021
GBPm GBPm GBPm
--------- ----------------------------------- ------------- ----------------
Current tax
- UK corporation tax - current period - -
- UK corporation tax - prior periods - -
--------- ----------------------------------- ------------- ----------------
- Total current tax - -
(0.5) Deferred tax (0.1) 0.1
(0.5) Tax (credit)/charge for the period (0.1) 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
2022 2022 2021
GBPm GBPm GBPm
--------- --------------------------------------------------- ------------- -------------
166.7 (Loss)/profit before tax (86.7) 62.3
--------- --------------------------------------------------- ------------- -------------
Tax (credit)/charge on (loss)/profit at standard
31.7 rate of 19% (2021: 19%) (16.5) 11.8
(25.8) Changes in the fair value of properties not subject 18.8 (7.7)
to tax
(8.0) REIT tax-exempt rental profits and gains (3.1) (4.9)
1.6 Other 0.7 0.9
(0.5) Tax (credit)/charge for the period (0.1) 0.1
--------- --------------------------------------------------- ------------- -------------
During the period, deferred tax of GBP0.1 million was debited
directly to equity (2021: GBP0.1 million credited). The Group
recognised a net deferred tax asset at 30 September 2022 of GBPnil
(2021: GBPnil). This consists of deferred tax assets of GBP0.9
million (2021: GBP0.1 million) and deferred tax liabilities of
GBP0.9 million (2021: GBP0.1 million).
Movement in deferred tax:
Recognised
At in the At 30
1 April income Recognised September
2022 statement in equity 2022
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 (2021: GBP4.5 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 (including the sale of 50 Finsbury Square, EC2, which is
expected to complete in Q1 2023).
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
2022 2022 2021
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
(877,335) Investment in own shares (964,408) (877,335)
----------- ------------------------------------------ ------------- -------------
Weighted average number of ordinary shares
252,990,576 - basic 252,903,503 252,990,576
----------- ------------------------------------------ ------------- -------------
Basic and diluted earnings per share
Six months
Six months to
to 30 Six months Six months 30 Six months Six months
Year to September to 30 to 30 September to 30 to 30
31 March 2022 September September 2021 September September
2022 Loss 2022 2022 Profit 2021 2021
Earnings after No. of Loss after No. of Earnings
per share tax shares per share tax shares per share
pence GBPm million pence GBPm million pence
--------- ---------------------- ----------- ------------ ------------ ----------- ------------ ------------
66.1 Basic (86.6) 252.9 (34.3) 62.2 253.0 24.6
Dilutive effect of
LTIP
(0.1) shares - - - - 0.1 -
66.0 Diluted (86.6) 252.9 (34.3) 62.2 253.1 24.6
--------- ---------------------- ----------- ------------ ------------ ----------- ------------ ------------
EPRA Earnings per share
Year to Six months Six months Six months Six months Six months Six months
31 March to 30 to 30 to 30 to 30 to 30 to 30
2022 September September September September September September
Earnings 2022 2022 2022 2021 2021 2021
per share Profit/(loss) No. of Earnings/ Profit/(loss) No. of Earnings/
pence after shares (expense) after shares (expense)
tax million per share tax million per share
GBPm pence GBPm pence
---------- ------------------------ -------------- ---------- ---------- -------------- ---------- ----------
66.1 Basic (86.6) 252.9 (34.3) 62.2 253.0 24.6
Deficit/(surplus) from
investment property
(note
(42.7) 8) 80.6 - 31.9 (26.6) - (10.5)
Deficit/(surplus) from
joint venture investment
(12.4) property (note 9) 17.7 - 7.0 (17.0) - (6.7)
- Trading property revenue (0.2) - (0.1) - - -
(0.2) Deferred tax (0.1) - - 0.1 - -
10.8 Basic EPRA earnings 11.4 252.9 4.5 18.7 253.0 7.4
---------- ------------------------ -------------- ---------- ---------- -------------- ---------- ----------
Dilutive effect of LTIP
- shares - - - - 0.1 -
---------- ------------------------ -------------- ---------- ---------- -------------- ---------- ----------
10.8 Diluted EPRA earnings 11.4 252.9 4.5 18.7 253.1 7.4
---------- ------------------------ -------------- ---------- ---------- -------------- ---------- ----------
7 Alternative performance measures and EPRA metrics
(continued)
Net assets per share:
In accordance with EPRA, we report 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
2022 30 September 2021
No. of 2022 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 (1,025,440) (877,335)
----------- ------------------------------ -------------- ------------
252,990,576 Number of shares - basic 252,842,471 252,990,576
----------- ------------------------------ -------------- ------------
145,862 Dilutive effect of LTIP shares - 122,571
----------- ------------------------------ -------------- ------------
253,136,438 Number of shares - diluted 252,842,471 253,113,147
----------- ------------------------------ -------------- ------------
EPRA net assets per share
30 September 30 September 30 September 30 September
31 March 30 September 2022 2022 2022 2021
2022 2022 EPRA EPRA EPRA EPRA
EPRA NTA IFRS NTA NDV NRV NTA
GBPm GBPm GBPm GBPm GBPm GBPm
--------- ---------------------------- ------------ ------------ ------------ ------------ ------------
IFRS basic and diluted net
2,112.9 assets 2,008.1 2,008.1 2,008.1 2,008.1 2,015.3
Fair value of financial
- liabilities - - 91.5 - -
- Real estate transfer tax - - - 190.7 -
--------- ---------------------------- ------------ ------------ ------------ ------------ ------------
Net assets used in per share
2,112.9 calculations 2,008.1 2,008.1 2,099.6 2,198.8 2,015.3
--------- ---------------------------- ------------ ------------ ------------ ------------ ------------
31 March 30 September 30 September 30 September 30 September 30 September
2022 2022 2022 2022 2022 2021
EPRA NTA IFRS EPRA EPRA EPRA EPRA
pence pence NTA pence NDV pence NRV pence NTA pence
--------- ---------------------------- ------------ ------------ ------------ ------------ ------------
835 Net assets per share 794 794 830 870 797
--------- ---------------------------- ------------ ------------ ------------ ------------ ------------
835 Diluted net assets per share 794 794 830 870 796
--------- ---------------------------- ------------ ------------ ------------ ------------ ------------
Total Accounting return
31 March 30 September 30 September
2022 2022 2021
per share per share per share
pence pence pence
---------- -------------------------------- ------------ ------------
779.0 Opening EPRA NTA (A) 835.0 779.0
835.0 Closing EPRA NTA 794.0 796.0
---------- -------------------------------- ------------ ------------
56.0 (Decrease)/increase in EPRA NTA (41.0) 17.0
---------- -------------------------------- ------------ ------------
12.6 Ordinary dividend paid in period 7.9 7.9
---------- -------------------------------- ------------ ------------
68.6 Total return (B) (33.1) 24.9
---------- -------------------------------- ------------ ------------
8.8% Total accounting return (B/A) (4.0%) 3.2%
---------- -------------------------------- ------------ ------------
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 2022 September September 2021 September September
2022 Profit 2022 2022 Profit 2021 2021
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
--------- ---------------------- ----------- ----------- ------------ ------------ ------------ ------------
10.8 Diluted EPRA earnings 11.4 252.9 4.5 18.7 253.1 7.4
(2.8) Capitalised interest (4.6) - (1.8) (4.0) - (1.6)
Spreading of tenant
lease
(0.5) incentives (2.5) - (1.0) (0.2) - (0.1)
Spreading of tenant
lease
incentives in joint
(3.3) ventures (3.3) - (1.3) (3.7) - (1.4)
Employee Long Term
Incentive
1.5 Plan charge 1.3 - 0.5 2.0 - 0.8
Cash earnings per
5.7 share 2.3 252.9 0.9 12.8 253.1 5.1
--------- ---------------------- ----------- ----------- ------------ ------------ ------------ ------------
EPRA loan-to-property value and net debt
31 March 30 September 30 September
2022 2022 2021
GBPm GBPm GBPm
-------- --------------------------------------------- ------------ ------------
21.9 GBP21.9 million 5.625% debenture stock 2029 21.9 22.0
87.0 GBP450.0 million revolving credit facility 166.0 -
425.0 Private placement notes 425.0 425.0
0.2 Current interest bearing loans and borrowings - -
34.1 Net payables 26.7 31.5
- Less: cash balances (7.0) (6.8)
-------- --------------------------------------------- ------------ ------------
568.2 Net debt excluding joint ventures 632.6 471.7
-------- --------------------------------------------- ------------ ------------
- Joint venture bank loans (at share) - -
4.7 Joint venture net payables (at share) 7.5 4.6
(28.9) Joint venture cash balances (at share) (24.0) (29.1)
544.0 Net debt including joint ventures (A) 616.1 447.2
-------- --------------------------------------------- ------------ ------------
2,088.8 Group properties at market value 2,069.0 1,918.5
558.6 Joint venture properties at market value (at 545.0 538.5
share)
2,647.4 Property portfolio at market value including 2,614.0 2,457.0
joint ventures (B)
-------- --------------------------------------------- ------------ ------------
20.5% EPRA Loan-to-property value (A/B) 23.6% 18.2%
-------- --------------------------------------------- ------------ ------------
Net gearing
31 March 30 September 30 September
2022 2022 2021
GBPm GBPm GBPm
-------- ------------------------------------------- ------------ ------------
Nominal value of interest-bearing loans and
533.9 borrowings 612.9 446.9
2.9 Obligations under occupational leases 2.4 3.4
- Less: cash balances (7.0) (6.8)
-------- ------------------------------------------- ------------ ------------
536.8 Adjusted net debt (A) 608.3 443.5
2,112.9 Net assets 2,008.1 2,015.3
(3.5) Pension scheme asset (4.3) (0.1)
-------- ------------------------------------------- ------------ ------------
2,109.4 Adjusted net equity (B) 2,003.8 2,015.2
-------- ------------------------------------------- ------------ ------------
25.4% Net gearing (A/B) 30.4% 22.0%
-------- ------------------------------------------- ------------ ------------
8 Investment property
Investment property
Freehold Leasehold Total
GBPm GBPm GBPm
-------------------------------- -------- --------- -------
Book value at 1 April 2022 929.6 1,047.2 1,976.8
Costs capitalised 12.8 21.3 34.1
Acquisitions 7.5 43.5 51.0
Disposals (27.0) - (27.0)
Net valuation deficit (33.2) (42.0) (75.2)
-------------------------------- -------- --------- -------
Book value at 30 September 2022 889.7 1,070.0 1,959.7
-------------------------------- -------- --------- -------
Investment property under development
Freehold Leasehold Total
GBPm GBPm GBPm
-------------------------------------------------------- -------- --------- -------
Book value at 1 April 2022 167.6 - 167.6
Costs capitalised 11.5 - 11.5
Interest capitalised 2.7 - 2.7
Net valuation deficit (5.8) - (5.8)
Book value at 30 September 2022 176.0 - 176.0
-------------------------------------------------------- -------- --------- -------
Book value of total investment property at 30 September
2022 1,065.7 1,070.0 2,135.7
-------------------------------------------------------- -------- --------- -------
(Deficit)/surplus from investment property
Six months
Year to to Six months
31 March 30 September to 30 September
2022 2022 2021
GBPm GBPm GBPm
---------- ----------------------------------------------- ------------- ----------------
Net valuation (deficit)/surplus on investment
107.9 property (81.0) 27.0
- Profit/(loss) on sale of investment properties 0.4 (0.4)
107.9 (Deficit)/surplus from investment property (80.6) 26.6
----------- ---------------------------------------------- ------------- ----------------
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 2022. 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
(the Red Book) and have been primarily derived using comparable
recent market transactions on arm's length terms. The investment
property under development at 30 September 2022 was exchanged for
sale post period end.
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.
8 Investment property (continued)
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 GBP149.6 million, whilst a 25 basis point increase
would reduce the fair value by GBP134.2 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.
The valuation of the property portfolio reflects its fair value
taking into account the market view of all relevant factors
including the climate related risks associated with the properties.
This includes the impact of expected regulatory changes, and we
estimate that the investment required to upgrade our existing
buildings to the new minimum EPC B rating by 2030 is around GBP20
million (including share of joint ventures).
Key inputs to the valuation (by building) at 30 September
2022
ERV True equivalent yield
Average Range Average Range
GBP per sq ft GBP per sq ft % %
---------------------------- --------- ---------------- -------------- --------------- --------------
North of Oxford Street Office 83 54 - 223 4.6 4.1 - 6.2
Retail 64 33 - 110 4.5 4.3 - 7.0
Rest of West End Office 100 46 - 215 5.0 3.3 - 6.8
Retail 96 15 - 266 4.7 3.7 - 6.8
City, Midtown and Southwark Office 65 35 - 163 5.2 4.1 - 5.6
Retail 29 25 - 73 5.3 4.1 - 5.6
-------------------------------------- ---------------- -------------- --------------- --------------
Key inputs to the valuation (by building) at 31 March 2022
ERV True equivalent yield
Average Range Average Range
GBP per sq ft GBP per sq ft % %
---------------------------- --------- ---------------- -------------- -------------- ---------------
North of Oxford Street Office 79 43 - 96 4.3 3.9 - 5.7
Retail 65 33 - 111 4.4 4.1 - 7.0
Rest of West End Office 87 57 - 111 4.8 3.3 - 6.2
Retail 97 15 - 226 4.5 3.4 - 6.2
City, Midtown and Southwark Office 57 46 - 67 4.5 3.8 - 5.5
Retail 29 25 - 71 5.2 4.9 - 5.2
-------------------------------------- ---------------- -------------- -------------- ---------------
The book value of investment properties includes GBP66.7 million
(2021: 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 GBP2,069.0 million. During the period,
the Group capitalised GBP0.7 million (2021: GBP0.3 million) of
employee costs in respect of its development team into investment
properties under development. At 30 September 2022 the Group had
capital commitments of GBP16.0 million (2021: GBP48.9 million).
9 Investment in joint ventures
Balances
Equity with partners Total
GBPm GBPm GBPm
----------------------------------------------- ------ -------------- ------
At 1 April 2022 365.3 217.5 582.8
Movement on joint venture balances - (3.0) (3.0)
Additions - - -
------ -------------- ------
Share of profit of joint ventures 2.9 - 2.9
Share of revaluation deficit of joint ventures (17.7) - (17.7)
Profit on sale of investment property - - -
------ -------------- ------
Share of results of joint ventures (14.8) - (14.8)
Distributions (3.5) - (3.5)
----------------------------------------------- ------ -------------- ------
At 30 September 2022 347.0 214.5 561.5
----------------------------------------------- ------ -------------- ------
The investments in joint ventures comprise the following:
Ownership Country of Incorporation/registration Ownership Ownership
31 March 30 September 30 September
2022 2022 2021
--------- ------------------------------- ------------------------------------- ------------- -------------
50% The GHS Limited Partnership Jersey 50% 50%
50% The Great Ropemaker Partnership United Kingdom 50% 50%
50% The Great Victoria Partnerships United Kingdom 50% 50%
--------- ------------------------------- ------------------------------------- ------------- -------------
The investment properties include GBP5.1 million (2021: 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 GBP545.0 million. At 30 September 2022,
the Group's share of joint venture capital commitments was GBP1.4
million (2021: GBP2.4 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
2022 2022 2021
GBPm GBPm GBPm
-------- ---------------------------------- -------------- ------------ --------------
Movement on joint venture balances during the
82.2 period 3.0 85.4
(217.5) Balances receivable at the period end from joint (214.5) (214.3)
ventures
7.3 Interest on balances with partners 3.1 4.1
7.3 Distributions 3.5 4.8
5.1 Joint venture fees paid 1.5 4.3
-------- ---------------------------------- -------------- ------------ --------------
The joint venture balances bear interest as follows: the GHS
Limited Partnership at 4.0% p.a. and the Great Ropemaker
Partnership at 2.0% p.a. 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 The GHS The Great The Great 30 September 30 September 30 September
2022 Limited Ropemaker Victoria 2022 2022 2021
At share Partnership Partnership Partnerships Total At share At share
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------- -------------------- ------------ ------------ ------------- ------------ ------------ ------------
563.8 Investment property 682.7 331.5 86.1 1,100.3 550.1 543.7
2.7 Current assets 2.1 1.9 0.3 4.3 2.2 4.4
Cash and cash
28.9 equivalents 13.7 14.0 20.3 48.0 24.0 29.1
Balances from
(217.5) partners (228.0) (128.0) (73.1) (429.1) (214.5) (214.3)
(7.4) Current liabilities (6.1) (8.7) (4.6) (19.4) (9.7) (9.0)
Obligations under
head
(5.2) leases - (10.2) - (10.2) (5.1) (5.2)
--------- -------------------- ------------ ------------ ------------- ------------ ------------ ------------
365.3 Net assets 464.4 200.5 29.0 693.9 347.0 348.7
--------- -------------------- ------------ ------------ ------------- ------------ ------------ ------------
9 Investment in joint ventures
Summarised income statements
------------------------
31
March 30 30
2022 The GHS The Great The Great 30 September September September
At Limited Ropemaker Victoria 2022 2022 2021
share Partnership Partnership Partnerships Total At share At share
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- -------------------- ---------------- --------------- ---------------- ------------- ----------- ---------
20.1 Net rental income 7.2 7.5 2.0 16.7 8.4 10.9
3.9 Surrender premium - - - - - 3.9
Property and
administration
(1.9) costs (1.2) (2.5) (0.8) (4.5) (2.3) (0.8)
(7.6) Net finance costs (4.9) (1.5) - (6.4) (3.2) (4.2)
Share of profit of
joint
14.5 ventures 1.1 3.5 1.2 5.8 2.9 9.8
Revaluation of
investment
28.1 property (25.2) (8.5) (1.8) (35.5) (17.7) 13.7
Profit on sale of
investment
3.3 property - - - - - 3.3
------- -------------------- ---------------- --------------- ---------------- ------------- ----------- ---------
Share of results of
45.9 joint ventures (24.1) (5.0) (0.6) (29.7) (14.8) 26.8
------- -------------------- ---------------- --------------- ---------------- ------------- ----------- ---------
10 Property, plant and equipment
Right
of use
asset for Fixtures
occupational Leasehold and
leases improvements fittings/other Total
GBPm GBPm GBPm GBPm
------------------------------------- ------------- ------------- --------------- -----
Cost or valuation
At 1 April 2022 4.9 5.6 1.9 12.4
Additions - - 0.1 0.1
------------------------------------- ------------- ------------- --------------- -----
At 30 September 2022 4.9 5.6 2.0 12.5
------------------------------------- ------------- ------------- --------------- -----
Depreciation
At 1 April 2022 2.4 3.4 1.6 7.4
Charge for the period 0.5 0.3 0.1 0.9
------------------------------------- ------------- -------------
At 30 September 2022 2.9 3.7 1.7 8.3
------------------------------------- ------------- ------------- --------------- -----
Carrying amount at 30 September 2022 2.0 1.9 0.3 4.2
------------------------------------- ------------- ------------- --------------- -----
Carrying amount at 31 March 2022 2.5 2.2 0.3 5.0
------------------------------------- ------------- ------------- --------------- -----
11 Other investments
31 March 30 September 30 September
2022 2022 2021
GBPm GBPm GBPm
-------- ----------------- ------------ ------------
1.0 At 1 April 1.0 1.0
0.7 Acquisitions 0.5 -
(0.7) Return of capital - 0.5
1.0 1.5 1.5
-------- ----------------- ------------ ------------
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 2022, the Group had made net 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
2022 2022 2021
GBPm GBPm GBPm
-------- ------------------------------ ------------ ------------
14.4 Trade receivables 8.7 19.3
(6.0) Expected credit loss allowance (3.8) (6.6)
8.4 4.9 12.7
0.5 Prepayments and accrued income 2.2 1.2
4.0 Other taxes 0.1 -
8.2 Other trade receivables 6.8 7.9
21.1 14.0 21.8
-------- ------------------------------ ------------ ------------
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
2022 2022 2021
GBPm GBPm GBPm
-------- ------------------------------------------------ ------------ ------------
Movements in expected credit loss allowance
(7.9) Balance at 1 April (6.0) (7.9)
Expected credit loss allowance during the period
(4.9) (see below) (1.4) (3.7)
1.1 Expected credit loss allowance in respect of 0.8 0.3
future periods
5.7 Amounts written-off as uncollectable 2.8 4.7
(6.0) (3.8) (6.6)
-------- ------------------------------------------------ ------------ ------------
The expected credit loss for the period comprises:
Gross Net of VAT Gross Net of VAT
30 September 30 September 30 September 30 September
2022 2022 2021 2021
GBPm GBPm GBPm GBPm
---------------------------------------------- ------------- ------------- ------------- -------------
Expected credit loss allowance for the period
Group 1.4 1.2 3.7 3.1
Joint ventures (at share) (0.1) (0.1) (0.4) (0.4)
---------------------------------------------- ------------- ------------- ------------- -------------
Total 1.3 1.1 3.3 2.7
---------------------------------------------- ------------- ------------- ------------- -------------
13 Trade and other payables
31 March 30 September 30 September
2022 2022 2021
GBPm GBPm GBPm
-------- --------------------------- ------------ ------------
16.0 Rents received in advance 14.2 16.0
16.9 Accrued capital expenditure 7.9 18.0
19.2 Other accruals 16.7 17.7
3.1 Other payables 1.9 1.6
55.2 40.7 53.3
-------- --------------------------- ------------ ------------
14 Interest-bearing loans and borrowings
31 March 30 September 30 September
2022 2022 2021
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
85.4 GBP450.0 million revolving credit facility 164.6 -
174.7 GBP175.0 million 2.15% private placement notes 174.8 174.7
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
24.9 GBP25.0 million 2.75% private placement notes 24.9 24.8
2032
124.3 GBP125.0 million 2.77% private placement notes 124.3 124.2
2035
531.0 610.3 445.4
-------- ---------------------------------------------- ------------ ------------
At 30 September 2022, 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 SONIA (plus or minus 2.5 basis
points subject to a number of ESG linked targets). GBP400 million
of the facility matures in January 2027, with the remainder
maturing in January 2025. At 30 September 2022, the Group had
GBP284 million (2021: GBP450.0 million) of undrawn committed credit
facilities.
At 30 September 2022, properties with a carrying value of
GBP116.3 million (2021: GBP115.0 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 2021
2022 2022 2022 2022 2021 Fair
Book value Fair value Items not carried at fair Book value Fair value Book value value
GBPm GBPm value GBPm GBPm GBPm GBPm
----------- ----------- --------------------------- ------------ ------------ ------------ ------------
Short-term interest-bearing
0.2 0.2 loans and borrowings - - - -
GBP21.9 million 5.625%
22.0 25.7 debenture stock 2029 22.0 21.4 22.0 26.7
423.6 412.0 Private placement notes 423.7 332.8 423.4 431.5
GBP450.0 million revolving
85.4 85.4 credit facility 164.6 164.6 - -
531.2 523.3 610.3 518.8 445.4 458.2
----------- ----------- --------------------------- ------------ ------------ ------------ ------------
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
2022 2022 2022 2022 2021 2021
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 2022, 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
2022 2022 2022 2021 2021 2021
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
Less than one year 2.4 (2.4) - 1.9 (1.9) -
Between two and five
years 9.7 (9.5) 0.2 9.5 (9.4) 0.1
More than five years 302.8 (236.3) 66.5 191.1 (150.5) 40.6
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
314.9 (248.2) 66.7 202.5 (161.8) 40.7
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
During the period, the Group regeared the head lease at 2
Aldermanbury Square, EC2 and purchased the leasehold interest of
6/10 St Andrew Street, EC4 .
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
2022 2022 2022 2021 2021 2021
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
Less than one year 1.0 - 1.0 1.0 (0.1) 0.9
Between two and five
years 1.5 (0.1) 1.4 2.6 (0.1) 2.5
More than five years - - - - - -
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
2.5 (0.1) 2.4 3.6 (0.2) 3.4
-------------------- ------------- --------------- --------------- ------------- --------------- ---------------
18 Investment in own shares
Six months Six months
Year to to to
31 March 30 September 30 September
2022 2022 2021
GBPm GBPm GBPm
--------- ---------------------------------------- ------------- -------------
(0.2) At the beginning of the period (3.6) (0.2)
(3.9) Employee Long-Term Incentive Plan charge (1.2) (2.0)
0.5 Transfer to retained earnings 2.1 0.5
- Other (0.1) -
(3.6) At the end of the period (2.8) (1.7)
--------- ---------------------------------------- ------------- -------------
The investment in the Company's own shares is held at cost and
comprises 1,025,440 shares (31 March 2022: 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, 53,831 shares (2021: no shares) were awarded
to directors and senior employees in respect of the 2019 LTIP
award. The fair value of shares awarded and outstanding at 30
September 2022 was GBP12.9 million (2021: GBP12.2 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
2022 2022 2021
GBPm GBPm GBPm
--------- --------------------------------------------- ------------- -------------
(107.9) Deficit/(surplus) from investment property 80.6 (26.6)
3.9 Employee Long-Term Incentive charge and other 1.3 2.0
items
(1.2) Spreading of tenant lease incentives (2.5) (0.2)
(45.9) Share of results from joint ventures 14.8 (26.8)
1.6 Depreciation 0.9 0.7
(0.2) Other (0.1) (0.1)
--------- --------------------------------------------- ------------- -------------
(149.7) Adjustments for non-cash items 95.0 (51.0)
--------- --------------------------------------------- ------------- -------------
20 Rent receivable under non-cancellable leases
Future aggregate minimum rents receivable under non-cancellable
leases are:
31 March 30 September 30 September
2022 2022 2021
GBPm GBPm GBPm
-------- -------------------------- ------------ ------------
The Group as a lessor
56.4 Less than one year 60.1 57.3
122.1 Between one and five years 145.6 111.7
78.9 More than five years 75.3 67.3
-------- -------------------------- ------------ ------------
257.4 281.0 236.3
-------- -------------------------- ------------ ------------
The Group leases its investment properties. The weighted average
length of lease at 30 September 2022 was 3.4 years (2021: 3.2
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 (2021: GBPnil).
21 Dividends
The declared interim dividend of 4.7 pence per share (2021: 4.7
pence per share) was approved by the Board on 17 November 2022 and
is payable on 4 January 2023 to shareholders on the register on 25
November 2022. 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
17 November 2022 17 November 2022
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 2022 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.
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 2022 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.
Basis for Conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 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 (ISRE (UK) 2410). 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.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with 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".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
Conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410; however future events or conditions
may cause the entity to cease to continue as a going concern.
Responsibilities of 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.
In preparing the half-yearly financial report, the directors are
responsible for assessing the group's ability to continue as a
going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly financial report, we are
responsible for expressing to the company a conclusion on the
condensed set of financial statements in the half-yearly financial
report. Our Conclusion, including our Conclusion Relating to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
This report is made solely to the company in accordance with
ISRE (UK) 2410. 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
17 November 2022
Directors and shareholders' information
Directors
Richard Mully Mark Anderson
Chairman, Non-Executive Non-Executive Director
Toby Courtauld Nick Hampton
Chief Executive Non-Executive Director
Nick Sanderson Emma Woods
Chief Financial & Operating Officer Non-Executive Director
Dan Nicholson Charles Philipps
Executive Director Non-Executive Director
Alison Rose
Non-Executive Director
Champa Magesh
Non-Executive Director
Shareholders' information
Financial calendar 2022
Ex-dividend date for interim dividend 24 November
Registration qualifying date for interim
dividend 25 November
2023
Interim dividend payable 4 January
Announcement of full year results 24 May*
Annual General Meeting 6 July*
Final dividend payable 10 July*
*Provisional.
Shareholder enquiries Dividend payments
All enquiries relating to holdings As a REIT, dividend payments must
of shares, bonds or debentures in be split between PIDs and non-PIDs.
GPE, including notification of change Information in respect of the tax
of address, queries regarding dividend/interest consequences for shareholders of
payments or the loss of a certificate, receiving dividends can be found
should be addressed to the Company's on the Company's website at
registrars: www.gpe.co.uk/investors/shareholder-information/reits
Equiniti Limited Company Secretary
Aspect House Darren Lennark
Spencer Road Registered office:
Lancing 33 Cavendish Square
West Sussex London W1G 0PW
BN99 6DA Tel: 020 7647 3000
Fax: 020 7016 5500
Tel: +44 (0) 371 384 2030 (Lines are Registered Number: 596137
open 8.30am-5.30pm Monday to Friday)
E-mail: customer@equiniti.com
See www.shareview.co.uk for further
information
Website: www.gpe.co.uk
The Company's corporate website holds,
amongst other information, a copy
of our latest annual report and accounts,
a list of properties held by the Group
and press announcements.
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.
Glossary (continued)
Ready-to-fit
For businesses typically taking larger spaces on longer leases
who want to fit out the space themselves.
Fitted spaces
Where businesses can move into fully furnished, well designed
workspaces, with their own front door, furniture, meeting rooms,
kitchen and branding.
Fully Managed
Fitted space where GPE handles all day-to-day running of the
workplace in one monthly bill.
Flex partnerships
Revenue share agreements with flexible space operators, these
are typically structured via lease arrangements with the revenue
share recognised within rental income.
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.
EPRA Loan-to-Value (LTV)
The nominal value of total bank loans, private placement notes,
debenture stock and any net liabilities/assets, 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.
Glossary (continued)
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.
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.
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END
IR GPGGGGUPPPUQ
(END) Dow Jones Newswires
November 17, 2022 02:00 ET (07:00 GMT)
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