REG - Great Portland Ests. - Annual Results 2025
21/05/2025 07:00
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RNS Number : 4933J Great Portland Estates PLC 21 May 2025
21 May 2025
Executing our growth strategy
Great Portland Estates plc is pleased to announce results for the Group for
the year ended 31 March 2025(1), with highlights including:
· Successful deployment of rights proceeds; £325 million allocated
· Strong operational performance, record investment leasing at 10.6%
premium to March 2024 ERV
· Valuation +3.6%(2) (inc. Fully Managed +12.8%); EPRA NTA +4.4%(3) ;
TAR +6.0%(3)
· Rental values up by 5.0%(2), portfolio ERV growth guidance upgraded
to 4.0% to 7.0% for FY26
· Developments delivering premium space into supply drought; c.£220m
to c.£580m surplus to come
· Balance sheet strength maintained, EPRA LTV 30.8%, cash and undrawn
facilities £376 million
· Significant income & value growth to come; prospective 10%+
annualised ROE with EPRA EPS up 3x
Toby Courtauld, Chief Executive, said:
" We are pleased to report on a productive and successful year during which we
achieved or exceeded most of the challenging operational targets we set
ourselves, in spite of the often extreme and unpredictable macro-political
backdrop; we successfully raised and then deployed, ahead of schedule,
significant fresh equity capital into exciting new opportunities at a sizeable
average discount of more than 50% to those assets' replacement cost; we
delivered a record quantity of investment leasing at a healthy 11% premium to
ERV, growing rent roll by 15% and validating our focus on creating premium
spaces, with our prime office rental values rising by 7.6% and Fully Managed
capital values by 12.8% over the year. Pleasingly, our commitment to customer
service has been rewarded with an exceptional 87% customer retention rate and
an industry-leading Net Promoter Score.
Looking forward, despite ongoing macro-economic uncertainty, we believe that
many of the conditions necessary for a period of attractive growth in central
London's commercial property values are increasingly evident and we are well
placed to prosper; with healthy demand, rents at our well-located, premium
spaces will continue rising and we have upgraded our forecasts for the year;
we have amassed an enviable pipeline of prime development and refurbishment
opportunities covering almost 40% of our portfolio from which we expect to
generate material surpluses, given the extreme shortage of such space;
London's growing relative attractions are generating early signs of a
reinvigorated investment market which will allow us to crystalise surpluses
through asset sales; and our deeply experienced teams and strong financial
position will enable us to take full advantage of these supportive conditions
and generate attractive returns for shareholders, with a prospective 10%+
annualised return on equity and a threefold increase in EPRA EPS over the
medium term."
Successful deployment of rights issue proceeds
· £325 million of rights issue proceeds allocated (including capex)
- Four acquisitions (£162 million, all West End) at a 53% discount to
replacement cost, including:
- HQ development opportunity at One Chapel Place, W1 for £56.0 million
· Rotating towards sales as investment market strengthens
- £350 million of near-term disposals planned (>50% already
under offer)
Strong leasing year, beating ERV by 10.6%; rent roll up 15% with high customer
satisfaction scores
· £37.7 million signed (our share: £32.6 million), with market
lettings on average 10.6% ahead of March 2024 ERV
· Our Flex offer now 582,000 sq ft with Fully Managed NOI now £19.3
million; up 93% since Interim Results
· Total rent roll up 15% to £123 million, with organic growth
potential of 131%
· Vacancy marginally increased to 5.9% as we deliver well-timed
refurbishments
· Additional £17.6 million signed since year end at 5.5% premium to
March 2025 ERV inc. 30 Duke Street pre-let
· Further £3.0 million of lettings under offer 14.4% above March
2025 ERV
· Leading Net Promoter Score +26.1 (+48.3 Fully Managed); high
customer retention 87% (91% Fully Managed)
Valuation up 3.6%(2) (inc. Fully Managed +12.8%) driven by rental value
growth +5.0%(2)
· Portfolio valuation of £2.9 billion, up 3.6%(2); offices +4.3%(2)
· Rental values up by 5.0%(2) (+5.3% offices (+7.6% Prime) &
+3.5% retail); yield expansion of 12 bp
· Portfolio ERV growth guidance upgraded to 4.0% to 7.0% for FY26
(prime offices 6.0% to 10.0%)
· IFRS NAV and EPRA(4) NTA per share of 494 pence, up 4.4% since
March 2024(3) ahead of consensus(5)
· EPRA(4) earnings £20.2 million, EPRA(4) EPS 5.2 pence, at cyclical
trough as expected and in line with consensus(5)
· IFRS profit after tax of £116.0 million; dividend maintained at
£31.9 million or 7.9 pence per share
· ROE +6.0%(3) for FY 2025 with prospective >10% ROE CAGR into
medium term
Significant development and refurbishment programme set to deliver £217+
million in surpluses
· Good progress at seven on-site development and refurbishment
schemes, £357 million capex to come
- Entirety of offices at 30 Duke Street, SW1 pre-let, 15-year term
substantially ahead of ERV and underwrite
§ Expected to deliver 35.1% profit on cost and 7.1% development yield
· Two Fully Managed refurbishments completed with strong leasing
successes (62% let at 31 March)
· Further four near-term schemes; three HQ, one Flex, starts from Q1
2025; total capex £343 million
· Combined expected surplus of £217 million at current rents and
yields; £342 million with 10% rental growth
· Pioneering Circularity Score implemented to reduce use of virgin
materials in development
Strong liquidity; £376 million of cash & undrawn facilities; LTV 30.8%
· New £250 million sustainable sterling bond issued in September;
new £150 million RCF in October
· EPRA LTV 30.8%, cash and undrawn facilities £376 million; weighted
average debt maturity of 5.2 years
( )
(1) All values include share of joint ventures unless otherwise stated
(2) On a like-for-like basis (3) Pro forma for rights issue (4 )
In accordance with EPRA guidance. 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 9 to the financial statements. Our primary NAV metric is EPRA NTA which
we consider to be the most relevant investor measure for the Group. (5
)Company compiled analyst consensus (EPS: 5.3p NTA: 484p)
Contacts:
Great Portland Estates plc +44 (0) 20 7647 3000
Toby Courtauld, Chief Executive
Nick Sanderson, Chief Financial & Operating Officer
Stephen Burrows, Director of Investor Relations and Joint Director of Finance
FGS Global +44 (0) 20 7251 3801
James Murgatroyd & Gordon Simpson
The results presentation will be broadcast live at 9.00 am today with the link
available at:
www.gpe.co.uk/investors/latest-results
(http://www.gpe.co.uk/investors/latest-results)
A conference call facility is also available to listen to the presentation at
9.00am today on the following numbers:
UK wide: +44 (0) 33 0551 0200: Quote: GPE FY25
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
(http://www.gpe.co.uk/investors/latest-results)
For further information see www.gpe.co.uk (http://www.gpe.co.uk) or follow us
on X at @GPE_London
LEI Number: 213800JMEDD2Q4N1MC42
A dividend reinvestment plan (DRIP) is available to shareholders who would
prefer to invest their dividends in the shares of the Company. For those
shareholders electing to receive the DRIP, the last date for receipt of a new
election is 13 June 2025. More information can be found on our website at
www.gpe.co.uk/investors (http://www.gpe.co.uk/investors) .
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
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(http://www.rns-pdf.londonstockexchange.com/rns/4933J_1-2025-5-20.pdf)
Statement from the Chief Executive
Please see accompanied graphics (see appendix 1)
Strong operational performance
Despite recent macro-economic volatility and persistent geo-political
tensions, we have had a strong year. We have delivered new premium spaces for
customers to enjoy, validated by some excellent leasing results. We have
accretively deployed the proceeds from last year's rights issue, well ahead of
programme and at the trough of the market whilst delivering valuation growth
for the first time since 2022. With strong occupational markets and sustained
demand for premium spaces, our well-timed programme delivering best-in-class
HQ buildings and Flex spaces for our customers is positioning GPE for growth.
Delivering our strategy
In June last year, given the opportunities we saw in our investment markets,
we raised £335.6 million (net) in a rights issue to invest alongside a £250
million sustainable bond issue in September. These capital raises look to
have been well timed. Since then, we have acquired four properties, all in
the West End, for £162.1 million (or £325 million including anticipated
capex). These acquisitions - two HQ developments and two Fully Managed schemes
- add to the deepening pipeline of premium space GPE will be creating over the
coming years. Whilst our pipeline of future acquisitions remains healthy, we
expect investment markets to improve, our activity will become more balanced
between acquisitions and sales as we look to crystallise surpluses where our
business plans are complete.
Platform for growth
This time last year we believed that central London's investment markets were
at or around their trough. We were right. Since then, our occupational markets
have demonstrated continued strength, with prime rents growing as increasingly
scarce premium spaces remain in high demand. Furthermore, this year saw a
stabilisation in our investment markets, with property yields broadly flat.
When combined with our activities, this has lifted property values, with our
portfolio up 3.6% year on year.
From here, we think the cycle will continue to improve and we are
increasingly optimistic that the significant investment we are making in our
portfolio will be well timed to capitalise on these supportive market
conditions growing returns for shareholders.
Target-beating leasing year - 10.6% ahead of ERV
At the outset of the year, we set ambitious leasing targets alongside
significant planned deliveries of new space. In a very busy year, our Leasing
team signed 74 new leases, delivering £37.7 million of new rent, with market
lettings 10.6% ahead of the March 2024 ERV. Our leasing was in part driven by
the growth of our Fully Managed spaces, where we signed 41 new deals,
securing £23.4 million in rent at a 10.1% beat to the March 2024 ERV.
Encouragingly, we achieved average Fully Managed rents of £206 per sq ft,
supporting our ambitions for further growth across our identified
central London Flex clusters and confidence for the next round of
deliveries this summer.
High levels of customer satisfaction
Keeping customers happy, and willing to renew their leases on expiry at
higher rates, was a key objective for the GPE team this year, minimising
vacancy and the associated costs of seeking new customers. We measure our
customer satisfaction annually, and once again, delivered a leading portfolio
Net Promoter Score of +26.1, significantly ahead of the industry average of
+13.6. Impressively, in our Fully Managed spaces we scored +48.3 which
supported strong levels of customer retention, with 91% of our Fully Managed
customers staying at break or expiry. We also maintained our exceptionally
high rent collection rates across the portfolio, securing in excess of 99%
of all rents within seven working days.
Rental value growth driving portfolio gains
As customers increasingly seek the highest quality, sustainable spaces, they
are facing competition in a market that is experiencing an increased shortage
of new Grade A supply. This is driving rental value growth, particularly for
the best space. Across our portfolio, we saw a like-for-like increase
in rental values of 5.0% over the year, with offices up by 5.3%, and our
prime and Fully Managed spaces once again outperforming with growth of 7.6%
and 7.5% respectively.
Whilst the investment market has remained relatively quiet, turnover is
recovering and yields have stabilised. As a result, bolstered by rental
growth, our property values grew by 3.6% on a like-for-like basis. The
property valuation growth increased IFRS NAV and EPRA NTA per share by 4.4%,
on a pro forma basis, over the year. When combined with an ordinary dividend
maintained at £31.8 million, our Total Accounting Return was 6.0%. Including
the revaluation of the portfolio, we delivered an IFRS profit after tax for
the year of £116.0 million. EPRA earnings were £20.2 million, up 12.8% with
diluted EPRA EPS of 5.2 pence, a decline of 11.9%, driven by the greater
number of shares in issue post the rights issue.
Favourable outlook for rents
Despite ongoing macro-economic volatility, our confidence and belief in London
remain strong. As one of the world's most attractive and diverse mixed-use
destinations, London stands unrivalled as a true global city. Its unique
ability to attract people and businesses from around the world continues to
drive strong demand for commercial space. However, occupiers are increasingly
targeting only the highest-quality spaces, and the supply of such premium
space in London will substantially lag this demand.
As a result, we anticipate that these market conditions will continue
to drive rents upwards and we expect further rental growth of 4% to 7% over
the next financial year. For prime office space, our guidance is stronger
still at 6% to 10%.
HQ repositioning; delivering the best
Given attractive rental growth prospects over the next few years, we set out
to deliver new, best-in-class buildings to take advantage of these conditions
and we are currently on-site at three major HQ schemes.
At 30 Duke Street, SW1, our prime office-led scheme on Piccadilly
will provide 70,900 sq ft of new Grade A space whilst embracing the
principles of the circular economy. Reused steel from the former building at 2
Aldermanbury Square, EC2 is now being installed. The scheme is on track
for completion in mid-2026 and is expected to deliver a profit on cost of
35.1%. All of the offices are already pre-let, well ahead of
the valuers' ERV, providing significant upside to come.
At Minerva House, SE1, works are progressing well to deliver a new building
that will take full advantage of its impressive River Thames frontage,
creating an enviable South Bank HQ destination with new public realm and
gardens, whilst delivering outstanding sustainability and reuse credentials.
It is expected to complete in Q3 2026 and deliver a profit on cost of
19.0%, and we have strong leasing interest in the space.
We also continue to make significant progress at 2 Aldermanbury Square, EC2,
where Clifford Chance LLP have pre-leased the entirety of office space
(322,600 sq ft). The building is on track for delivery in Q1 2026.
This year, we also took the opportunity to further deepen our pipeline with
the acquisition of Whittington House, WC1 and One Chapel Place, W1. In total,
we now have four near-term schemes in the pipeline, which together with our
seven committed schemes, will deliver 1.1 million sq ft of prime,
predominantly office space with exemplary sustainability credentials,
along with around £120 million of ERV following our proposed £700 million
of capex investment.
Flex spaces; two completions, more to come
This year, we successfully delivered two dedicated Fully Managed buildings at
SIX St Andrew Street, EC4 and 31/34 Alfred Place, W1. Leasing at both
buildings has been very strong and well ahead of underwrite in both for
speed and rents achieved.
Building on this success, we are increasingly confident about our two on-site
refurbishments at 141 Wardour Street, W1, and 170 Piccadilly, SW1, which are
on track for completion this summer. Together, they will deliver a further
55,500 sq ft of high-quality Fully Managed space. Beyond these projects, we
have also committed to refurbishing the recently acquired Courtyard, WC1, and
19/23 Wells Street, W1. With 582,000 sq ft now committed, the strong
performance of our Flex portfolio reinforces our ambition to achieve our one
million sq ft target.
Taken all together, our refurbishment and development programme is one of the
largest in our industry as a proportion of owned assets, timed to deliver
into a supply drought.
Set to deliver long-term income and value growth
Given our ambitious growth strategy, we anticipate substantial increases in
both income and valuations in the years ahead. Our development and
refurbishment programme is expected to generate surpluses of £217 million
based on current rents and yields, with considerable upside potential driven
by anticipated rental growth. In addition, the delivery of new space will
generate meaningful new rent roll, supporting organic growth of around 130%
from current levels. Altogether, including our targeted dividend, we are
aiming to deliver a medium-term return on equity of over 10%. All of this will
be delivered from a position of financial strength, keeping LTV within our
target range of 10%-35% through the cycle.
Our portfolio
Please see accompanied graphics (see appendix 2 and 4)
Prime spaces driving valuation uplift
The valuation of our portfolio, including our share of joint ventures,
increased over the 12 months by 3.6% on a like-for-like basis, to £2,869.3
million at 31 March 2025.
The key drivers behind the Group's valuation increase for the year,
including joint ventures at share, were:
· our Fully Managed portfolio increased by 12.8% in the 12 months on
a like-for-like basis with our four Flex refurbishment projects, including two
that completed in the year, up 16.4% largely due to rental value increases
across our prime spaces;
· rental value growth - the continued demand for our best-in-class
spaces has helped increase our rental values. Since the start of the financial
year, our rental values increased by 5.0% on a like-for-like basis, with our
office portfolio up by 5.3% and our prime offices up even higher
by 7.6%. ERVs in our retail portfolio increased by 3.5%;
· higher investment yields - given the backdrop of higher interest
rates, equivalent yields increased marginally by 12 basis points (2024: 56
basis points) during the year (office: +14 basis points; retail: +5 basis
points). At 31 March 2025, the portfolio true equivalent yield was 5.5%;
· HQ developments values stabilising - the valuation of our
three committed HQ development properties increased by 1.2% on a
like-for-like basis to £372.9 million during the period; and
· portfolio management - we delivered a strong leasing year, signing
new leases, rent reviews and renewals, with new lettings 10.6% ahead of the
March 2024 ERV. This secured £40.0 million (our share) of annual income,
supporting the valuation over the year. At 31 March 2025, the portfolio
was 11.0% reversionary.
Including rent from leases currently in rent-free periods, the adjusted
initial yield of the investment portfolio at 31 March 2025 was 3.8%, 10 basis
points lower than the start of the financial year.
Whilst the overall valuation increased by 3.6% during the year on a
like-for-like basis, elements of the portfolio continued to show greater
variation:
· overall our office portfolio increased by 4.3% (supported
by the strong performance of our Fully Managed office space +12.8%),
outperforming the Group's retail space which was up 1.0% as the retail
recovery continues on the back of further rental growth (+3.5%);
· including developments, our West End portfolio (+4.5%) performed
better than our rest of London portfolio (+1.5%), given a greater yield
expansion in the City (+23 basis points) as well as rent value growth in our
West End portfolio of +5.9% outperforming the City +3.9%;
· newer, higher quality buildings outperformed older assets, with
those assets with a capital value per sq ft in excess of £1,000 per sq ft,
increasing in value by 5.8% compared to those with a capital value per sq ft
of less than £1,000 per sq ft which reduced by 0.9%; and
· buildings with better sustainability credentials continued
to outperform. Buildings with an EPC rating of A or B increased in value by
4.8%, outperforming properties with an EPC of C or D which increased by
2.1% in the year.
Our joint venture properties increased in value by 2.7% over the year, driven
by our prime mixed-use Hanover Square site, whilst our wholly-owned portfolio
increased by 3.8% on a like-for-like basis.
Our development activities and capex programme
With supportive occupational markets, our development activities are
extensive. Our forecasts indicate that the supply of new commercial space in
London is severely limited. We estimate the delivery of only 2.7 million sq ft
of new space annually over the next four years, while average demand will be
significantly higher at 4.7 million sq ft per annum. Our development programme
is designed to create new premium spaces with exceptional sustainability
credentials into these favourable markets through the development of new HQ
spaces and the expansion of our Fully Managed office offer. Overall, we
anticipate that our planned capex of £700 million will deliver development
surpluses to come of £217 million, with the potential for this to increase
as rents are forecast to grow.
Three committed HQ development schemes
At 2 Aldermanbury Square, EC2, which is fully pre-let to Clifford Chance LLP,
construction works are progressing well as we substantially increase the size
of the building to 322,600 sq ft (up from 176,000 sq ft). Installation of the
steel frame is complete and the building 'topped out' in February this year.
On completion, the scheme will provide a number of public realm and amenity
improvements that will have a positive impact on the local area. The new
building will have best-in-class sustainability metrics and we are targeting
BREEAM 'Outstanding'.
Whilst the development is currently anticipated to deliver a loss on cost
from the commitment date of 12.6%, given market yield expansion driven
valuation declines to date, from the 31 March 2025 valuation the scheme is
expected to deliver around £21 million of future profit.
At 30 Duke Street, SW1 (formerly French Railways House & 50 Jermyn
Street), the deconstruction of the existing buildings on the site is now
complete and the new steel from the dismantling of City Place House (now 2
Aldermanbury Square, EC2) is being installed. Our major office-led
redevelopment will provide 70,900 sq ft (up from 54,700 sq ft) of new Grade
A space. Once complete, the building will provide best-in-class, column free
space together with high-specification amenities including a wellness suite,
private terraces on the upper floors, a communal roof terrace with panoramic
views, as well as the highest sustainability credentials. The building is
expected to complete in Q3 2026 and we have pre-let all of the office space
at rents significantly above our underwrite. We have £70 million of costs to
come and the scheme is anticipated to deliver a profit on cost of 35.1%, an
ungeared IRR of 18.9% and a 7.1% development yield.
At Minerva House, SE1, our extensive refurbishment will take the overall
commercial space to 143,000 sq ft, an increase of approximately 56% on the
existing area. We are maintaining over 70% of the existing fabric and
introducing innovative ways of working that will further reduce the overall
embodied carbon impact of the development. As part of our activities,
20 tonnes of glass have been salvaged from the site and used in the
production of new glass; this is one of the first schemes in the country to
participate in this truly circular and innovative process. We have good
leasing interest in all the spaces and anticipate the scheme will deliver a
profit on cost of 19.0%, an ungeared IRR of 11.6% and a development yield of
7.0%.
In total, across the three on-site HQ schemes we have committed expenditure to
come of £277 million and an anticipated development surplus to come of £111
million.
Three near-term development schemes
Beyond our three committed schemes, we have a further three schemes in our
near-term pipeline.
At our Soho Square Estate, W1, located in the heart of the West End at
the eastern end of Oxford Street, we are progressing our plans to commence
the redevelopment in the second half of 2025. We have reworked the designs,
are progressing neighbourly matters and, with a new planning permission from
Westminster to improve the quality of office and retail space, we are further
increasing its attractiveness to prospective customers in a materially
undersupplied market. Our designs will provide a best-in-class HQ office
building on Soho Square with flagship retail fronting Oxford Street, arranged
over basement, lower ground, ground and eight upper floors, with multiple
private terraces and a communal roof terrace.
At St Thomas Yard, SE1 (formerly New City Court), we have submitted a planning
application to the London Borough of Southwark to extensively refurbish the
existing space utilising a reuse and extend approach (similar to Minerva
House). The building will serve as another exemplar of our circular economy
approach and is expected to perform favourably in terms of our Circularity
Score. Our plan will increase the building to 188,800 sq ft of high quality,
HQ offices, up from 98,000 sq ft today. We anticipate that the planning
application will be approved by the end of the year.
At the recently acquired Whittington House, WC1, we have now achieved vacant
possession and are planning to refurbish the building to deliver 74,800 sq ft
of new Grade A offices, in close proximity to both The Courtyard and the
recently completed 31/34 Alfred Place, both WC1. The building will
be arranged over basement, ground and seven upper floors with a new terrace
on the first floor, together with a communal roof terrace with pavilion
amenity space. We will shortly be submitting a planning application
to Camden for our proposals. The building is delivered with a high degree of
retention of existing materials, including the structure and facade,
highlighting our commitment to the principles of the circular economy.
In total, our three committed and three near-term schemes are expected to
deliver 893,300 sq ft of best-in-class, highly sustainable space, perfectly
placed to benefit from a market where forward-look supply is severely
constrained. In total the schemes will require around £583 million of
anticipated capital expenditure to complete.
New scheme added to the pipeline
Following our acquisition of One Chapel Place, W1, we have added the building
to our pipeline. The building was acquired with plans to materially increase
the scale of the building on this prime site. We intend to improve
the designs with the aim of achieving planning permission ahead of vacant
possession of the building in 2028.
Commitment to further Flex expansion
In order to expand our Flex office offers and meet our ambitious targets for
growth, we have a significant refurbishment programme to provide new dedicated
Fully Managed spaces, as well as converting a significant
number of individual floors across our portfolio.
Two Fully Managed buildings completed
During the year, we completed the refurbishment and conversion of two
buildings, creating 89,500 sq ft of premium Fully Managed space.
At SIX St Andrew Street, EC4, we delivered 47,800 sq ft of new Grade A
Fully Managed offices in November 2024. We added two new storeys, together
with extensive terracing and significant amenity throughout the building. The
building has been well-received, with strong leasing momentum. To date, 23,000
sq ft has been let, 8.9% above ERV, exceeding our expectations.
At 31/34 Alfred Place, WC1, in the heart of Fitzrovia, we completed the
extensive refurbishment of the entirety of the 41,700 sq ft building to
provide outstanding Fully Managed office space. We have been extremely pleased
with the leasing activity to date, and the building is now 74% let, 6.3%
ahead of ERV, including our largest ever Fully Managed lease to Next.
Further deliveries to come from summer 2025
Construction progress has been good at both 141 Wardour Street, W1 and 170
Piccadilly, SW1 (formerly Egyptian and Dudley House), which are being
comprehensively refurbished to provide 29,900 sq ft and 25,600 sq ft of new
Fully Managed led space respectively. Both schemes are set to complete
in summer 2025 and, given our recent Fully Managed leasing success, we are
optimistic about their prospects.
At The Courtyard, WC1, opposite 31/34 Alfred Place, we have recently received
a planning approval for a significant refurbishment of the building to deliver
63,600 sq ft of new space, including 47,000 sq ft of Fully Managed offices.
Our plans will add additional amenity on the roof, together with substantially
reconfiguring the retail space on Tottenham Court Road. We commenced the strip
out of the space and anticipate completion in spring 2027.
Together with a number of other conversions, we anticipate growing our Flex
offerings from 582,000 sq ft today to 672,000 sq ft organically. Moreover, we
are aiming to add to this programme through acquisition and are targeting
enlarging our Flex offerings to one million sq ft over the next few years.
How we are positioned
In total, our HQ development and Flex capex programme provides a strong
platform for organic growth. Together, our on-site and near-term schemes will
deliver 1.1 million sq ft of well-designed, tech-enabled and sustainable
space into a market where prospective supply is increasingly limited.
Moreover, with around £217 million of anticipated profit to come based on
today's rents and yields, which could grow to £342 million with 10% rental
growth, they will be a significant contributor to the Group's growth in the
coming years.
Our leasing and Flex activities
With the business primed for growth, and significant deliveries of new space
in the year, we have tapped into strong demand for premium space, driving
significant rental growth through standout leasing and exceptional customer
delivery. Supported by our Fully Managed spaces, we signed £37.7 million of
new leases, beating March 2024 rental values by 10.6%. This included our
largest ever Fully Managed lease to date at 31/34 Alfred Place, WC1,
with FTSE 100 retailer Next.
During the year, our rental values increased by 5.0% across the portfolio, at
the upper end of last year's rental growth guidance of between 4.0% and 7.0%.
With a market starved of new, Grade A supply, offices outperformed retail with
like-for-like office rental values increasing by 5.3% compared with a 3.5%
increase in retail rental values. Within our office portfolio, our Fully
Managed rental values outperformed, increasing by 7.5% on a like-for-like
basis.
The key leasing highlights for the year included:
· 74 new leases and renewals completed (2024: 66 leases), generating
annual rent of £37.7 million (our share: £32.6 million; 2024: £19.8
million), with market lettings 10.6% ahead of the valuers' 31 March 2024 ERV;
· 45 Flex leases signed, four Fitted and 37 Fully Managed, achieving
on average £206 per sq ft on the Fully Managed space, 10.1% ahead of
March 2024 ERV;
· 16 new retail leases signed, securing £5.5 million of rent
with market lettings 4.6% ahead of March 2024 ERV;
· ten rent reviews securing £10.0 million of annual rent
(our share: £7.4 million; 2024: £8.4 million) were settled at an increase
of 6.2% over the previous rent and 11.8% ahead of ERV at review date;
· total space covered by new lettings, reviews and renewals was
359,800 sq ft (2024: 401,500 sq ft);
· the Group's vacancy rate increased to 5.9% (31 March 2024: 1.3%),
owing to recent completions of Fully Managed refurbishments, including SIX St
Andrew Street and 31/34 Alfred Place;
· the Group's rent roll increased by 14.6% to £123.2 million
following our recent acquisitions and successful leasing period (not including
the pre-let at 2 Aldermanbury Square, EC2 or 30 Duke Street, SW1); and
· of the 74 leases with breaks or expiries in the 12 months to 31
March 2025, 93% were retained (87%), re-let, or placed under offer (by
area), leaving only 17,300 sq ft still to transact.
Customer demand is growing and broadening for premium, sustainable workspaces,
including those that offer increased levels of service and flexibility. This
supportive structural backdrop, combined with increasing shortage of such
supply, means we are well positioned. Accordingly, our rental growth guidance
for the next year continues to remain positive, at 4.0% to 7.0%, with the
best spaces even higher at 6.0% to 10.0%.
Fully Managed: outsized growth and returns
Our unique Flex offer is delivering growing and outsized returns with £24.5
million of new leases in the year at 10.1% ahead of March 2024 ERV. Total
Flex leasing across the GPE portfolio covered 123,300 sq ft.
Following extensive refurbishment, we completed 31/34 Alfred Place, WC1,
our 41,700 sq ft Fully Managed building, in January 2025. Since completion,
we have let more than 27,600 sq ft of space at an average rent of £220 per sq
ft. This included our largest ever Fully Managed deal to date, letting over
11,500 sq ft to FTSE 100 retailer Next, ahead of underwrite and on a five-year
term. 31/34 Alfred Place, WC1 forms part of a growing Fitzrovia cluster, with
The Courtyard and Whittington House in close proximity.
At SIX St Andrew Street, EC4, the refurbishment completed in early November
2024. To date, around 23,000 sq ft of the 47,800 sq ft has been let to six
new customers at an average rent of £198 per sq ft.
With strong demand for GPE's Fully Managed product across the portfolio,
confidence remains high for leasing the remainder of 31/34 Alfred Place, WC1,
and SIX St Andrew Street, EC4, together with the prospects of our next
building launches at 170 Piccadilly, SW1 and 141 Wardour Street, W1, this
summer.
Our Flex space; targeting one million sq ft
Our ambition to reach one million sq ft of Flex space is undiminished, and
during the year we increased our committed Flex offering across the portfolio
to a total of 582,000 sq ft (c.25% of our offices or c.20% of the total
portfolio).
Looking forward, we will further drive our Flex growth through converting our
existing spaces as they become available and through acquisition. Our recent
investment in our Flex platform means we have both the team and infrastructure
in place to accommodate this growth and to drive efficiencies and economies of
scale. Looking forward, the pipeline of new spaces remains strong. We will
deliver two new premium Fully Managed buildings this summer and we have
recently added to the pipeline with the acquisition of The Courtyard, WC1
and 19/23 Wells Street, W1. Our strategy is to create targeted Flex clusters,
in amenity-rich locations, with excellent transport links, with the aim of
growing our Flex portfolio, both organically and through acquisition, to one
million sq ft.
Ready to Fit: £7.0 million of deals completed
We completed six Ready to Fit deals across various buildings during the year,
beating the March 2024 ERV by 17.1%.
Our largest leasing deal during the year was at 200 & 214 Gray's Inn Road,
WC1, where Independent Television News (ITN) renewed both of its leases for
117,000 sq ft of workspace at a 284,500 sq ft media hub building owned by
a 50:50 joint venture between GPE and Ropemaker Properties (BP Pension Fund).
With a £4.1 million annual rent, the new ten-year lease demonstrates ITN's
confidence in GPE to upgrade the building whilst continuing to meet their
customer needs.
In May 2025, we pre-let the entirety of the office space (62,500 sq ft) at 30
Duke Street, SW1 to leading global investment firm CD&R, on a 15-year term
without break and with rents ahead of March 2025 ERV. The lease will commence
shortly after practical completion in summer 2026.
Retail: £5.5 million of deals completed, strengthening our retail offer
We have continued to lease successfully across our prime retail portfolio
into resurgent retailer demand. We secured £5.5 million of new retail leases
in the year, with 11 new customers to complement our diverse range of retail
brands.
Following the 22,500 sq ft letting to TK Maxx announced last year at Mount
Royal, 508/540 Oxford Street, W1, and the associated regear of the Superdrug
lease, a further three retail deals were completed this year, totalling 20,000
sq ft. Almost 60% of the retail space available at Mount Royal, W1, is now
recently let, with a diverse offer of retail brands in place who share a
long-term vision for the retail revolution we are seeing on Oxford Street.
Swarovski, the luxury crystal and fine jewellery brand, signed a new ten-year
lease in June 2024 for its latest London store at 122 Regent Street, W1,
comprising of 1,500 sq ft across three floors. With its broad reach
worldwide, Swarovski complements the wider retail offering at the iconic Grade
II listed Kingsland and Carrington House.
In October 2024, we let 6,900 sq ft at 6/7 Portman Square, Orchard Court, W1
to Gaggenau for their new global flagship store. As a luxury brand for
professional-grade home appliances, Gaggenau will anchor GPE's newly marketed
'Portman & Wigmore' which includes 1/9 Portman Square and 132/142 Wigmore
Street, W1, creating a striking new location for high-end retail and showroom
use.
Customer First delivering customer retention
With our 'Customer First' approach embedded in the year, our customer
retention numbers remain high at 87% across the whole portfolio and 91% across
our Fully Managed spaces for the last 12 months. Our retention rates
demonstrate that, as well as providing great spaces, our team is also
delivering market-leading customer experience. Our success was underpinned by
our leading portfolio NPS score of +26.1, or +48.3 across our Fully Managed
spaces, materially ahead of the industry average of +13.6.
High retention helps reduce vacancy costs and lowers refresh capital
expenditure in our Flex spaces. Furthermore, should a customer need to move,
we aim to utilise our broad portfolio to allow them to grow or contract with
us. This includes transitioning some of our Ready to Fit customers into our
Flex space, as well as providing opportunities for some of our smaller Flex
customers to graduate into larger and longer-term spaces as they grow.
How we are positioned
Despite the volatile macro-economic backdrop, the current occupational trends
play to our strengths. The deep customer demand for premium spaces continues
to dramatically outstrip supply and the trend for smaller spaces to be
provided on a flexible basis is increasingly becoming the norm. With the gap
between the best and the rest likely to widen further.
Against this backdrop, we are strongly positioned: we have excellent leasing
momentum with GPE's premium HQ and Fully Managed spaces in high demand and we
are confident for the next round of deliveries. With the team and
infrastructure in place to support significant income and value growth, there
is more to come with an exceptional pipeline of committed developments.
Our investment activities
Activity levels in central London investment markets have remain muted given
the volatile macro-economic backdrop and interest rate environment. After
completing our fully underwritten £350 million rights issue in June
last year, we have continued to exploit this extended window of opportunity
and attractive pricing. In addition to the organic capital expenditure
investment we have made during the year, we have completed four acquisitions,
totalling £162.1 million.
Acquisitions for the year ended 31 March 2025
Price NIY Area Cost per
£m
%
sq ft
sq ft
The Courtyard, WC1 28.6 n/a 62,700 462
19/23 Wells Street, W1 19.0 4.0% 19,200 991
Whittington House, WC1 58.5 8.6% 74,500 785
One Chapel Place, W1 56.0 4.4% 34,200 1,636
Total 162.1 190,600 850
In May 2024, we exchanged on a property swap to acquire The Courtyard, WC1 in
exchange for 95/96 New Bond Street, W1 at £18.2 million plus £10.4 million
of cash consideration equating to, £462 per sq ft, c.69% below replacement
cost. The Courtyard comprises 62,700 sq ft of vacant office and partially let
retail space and is well suited to be repositioned into the Group's Fully
Managed offering. The Courtyard is located in a prime West End location,
around 400 metres from Tottenham Court Road Elizabeth line station, and
is opposite 31/34 Alfred Place, WC1 one of the Group's other Fully Managed
buildings. The acquisition completed in January 2025.
In October 2024, we acquired 19/23 Wells Street, W1, for £19.0 million (£991
per sq ft, c.45% below replacement cost). Simultaneously, GPE secured a new
125-year headlease with Berners-Allsopp Estate for £1.25 million, effective
October 2024 to October 2149. The 19,200 sq ft Fitzrovia building spans six
floors plus a basement and we plan to convert it to our Fully Managed offer
and enhance the ground floor for best-in-class amenity, targeting a 6.5% yield
on cost.
In November 2024, we acquired the long leasehold interest of Whittington
House, WC1 for a headline price of £58.5 million (£785 per sq ft on current
NIA, c.60% discount to replacement cost). Located a short walk from the
Tottenham Court Road Elizabeth line station, the 74,500 sq ft HQ building
provides GPE with an exciting opportunity to create outstanding office spaces
that draw upon its iconic Richard Seifert & Partners design, delivering
eight floors of sustainable offices with market-leading amenity, fronting on
to the newly pedestrianised Alfred Place.
Whittington House sits adjacent to GPE's existing holdings at 31/34 Alfred
Place and opposite The Courtyard, thereby adding to a growing cluster of
buildings that will provide GPE customers with a choice of spaces and amenity
in this vibrant location.
In March 2025, we acquired the freehold of One Chapel Place, W1 for a headline
price of £56.0 million. The 34,200 sq ft building is fully let at an annual
rent of c.£2.5 million per annum, with the office leases due to expire in
mid-2028. The building is located in the heart of the West End, just a short
walk from Bond Street tube station and the Elizabeth line. The acquisition
provides GPE with an exciting opportunity to increase the scale of the
building and deliver a highly sustainable, best-in-class HQ redevelopment in
this prime location.
Sales for the year ended 31 March 2025
Price Premium/ Price per NIY
£m
(discount)
sq ft
%
to book
£
value %
95/96 New Bond St, W1 18.2 (0.8%) 2,035 1.4%
Total 18.2 (0.8%) 2,035
How we are positioned
We are actively seeking new buildings for our Flex offerings, as well as
opportunities for HQ repositioning or development and we increasingly expect
the sustainability challenge to provide us with opportunities to acquire
stranded assets needing a sustainability solution.
Encouragingly, we anticipate that market conditions will continue to provide
opportunities to buy as we see more assets trading closer to our view of fair
value. Furthermore, we currently have £1.0 billion of assets actively under
review. They are predominantly off market, with the majority being HQ
repositioning opportunities, and over half are in the West End. However, we
remain disciplined. Any potential purchase needs to outperform the assets we
already own, and with our existing portfolio stacked with opportunity, the
hurdle is high.
With capital values rising and investment market activity improving, albeit
from a low base, we anticipate shifting our focus towards sales, as we look to
crystallise surpluses where our business plans are complete, including some of
our long-dated assets. Accordingly, we have around £350 million of near-term
sales under consideration.
Our financial results
Please see accompanied graphics (see appendix 3)
As is usual practice in our sector, we use 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 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 9 of the financial statements.
£350 million rights issue completed
In June 2024, we completed a fully underwritten three for five rights issue to
raise gross proceeds of approximately £350.3 million (£335.6 million net of
expenses) through the issue of 152,320,747 new ordinary shares at a price of
230 pence each. The rights issue was designed to allow GPE to seize the
significant opportunity we saw emerging in the central London commercial real
estate space. We have now allocated the majority of the funds into new
opportunities. Comparative per share metrics for prior years have been
adjusted accordingly (see note 9 to the financial statements).
Valuation uplifts increase IFRS NAV and EPRA NTA
IFRS NAV and EPRA NTA per share at 31 March 2025 were 494 pence per share
compared to the pro forma net assets per share of 473 pence at 31 March 2024
(see below), an increase of 4.4% over the year, largely due to the 3.6%
like-for-like valuation uplift in the property portfolio. When combined with
ordinary dividends paid of £31.8 million, this delivered
a Total Accounting Return of 6.0%.
The main drivers of the 21 pence per share increase in EPRA NTA from 31
March 2024 included:
· the increase of 24 pence per share arising from the revaluation of
the property portfolio, with values troughing as anticipated last year;
virtually all of the increase in value was driven by rental growth and our
leasing activities;
· EPRA earnings for the year of 5 pence per share enhanced NTA; and
· ordinary dividends paid of 8 pence per share (based on the closing
number of shares) reduced NTA.
At 31 March 2025, the Group's net assets were £2,000.7 million, up from
£1,583.0 million at 31 March 2024, with the increase largely attributable to
the receipt of the £335.6 million net proceeds from the rights issue and the
3.6% increase in the property valuation. EPRA NDV and EPRA NRV were 506 pence
and 546 pence at 31 March 2025 respectively, compared with 537 pence and
576 pence at 31 March 2024, on an EPRA basis.
Revenue stable; rental income down given high level of refurbishment activity
Revenue for the year was £94.2 million, marginally down from £95.4 million
on the prior year, driven by a reduction in rental income including lease
incentives (down £4.9 million), reduced service charge income (down £1.6
million) and greater Fully Managed services income (up £4.5 million) given
its expansion. The Group's revenue was supported by our successful leasing as
we continued to deliver new space across the portfolio. We signed 74 leases,
generating new annual income of £37.7 million p.a. (our share: £32.6
million), with the majority of activity across our Fully Managed properties.
Net rental income, after taking account of expected credit losses, lease
incentives and ground rents, was £67.3 million, down from £72.1 million in
the prior year, as we continued to take space back from customers to enable
us to create new HQ and Fully Managed spaces.
Adjusting for acquisitions, disposals and transfers to and from
the development programme, like-for-like rental income (including share of
joint ventures) decreased by 0.7% excluding expected credit losses.
Joint venture fee income for the year was £2.5 million, an increase of £0.8
million, as a result of increased leasing activity in the joint ventures
during the year, including the lease renewal with ITN at 200 Gray's Inn
Road, WC1.
Strong rent collection
We secured in excess of 99% of all rents, including in our joint ventures,
within seven days of the due date. Since 1 April 2024, one of our customers
went into administration, representing less than 0.1% of our rent roll. At 31
March 2025, we held rent deposits and bank guarantees totalling £22.9
million, including our share of joint ventures.
Cost of sales increased
Cost of sales increased from £33.3 million to £35.1 million for the year
ended 31 March 2025. This increase was primarily driven by increased Fully
Managed service expenses which rose to £10.8 million, from £8.1 million in
the prior year, as we increased the delivery of this space across the
portfolio. At 31 March 2024, we had 82 Fully Managed units; at 31 March 2025
this rose to 118 units. Service charge expenses reduced by £1.2 million, in
line with the greater weighting to Fully Managed spaces, which do not have
service charge arrangements. Other property expenses and ground rents were
largely unchanged year on year.
Taken together, net service charge income, net Fully Managed services income
and expenses, other property costs and expected credit loss provisions for
service charges reduced to £10.9 million from £11.8 million in the prior
year.
Joint venture earnings
EPRA earnings from joint ventures was £7.3 million, down from £9.8 million
in the prior year, with the reduction primarily due to the departure of ITV
from 200 Gray's Inn Road, WC1. ITV's lease expired on 31 March 2024, providing
an opportunity to refurbish the space, together with dramatically improving
the amenity in the building. The refurbishment works are anticipated to
complete in summer 2026.
Administration costs down
Administration costs were £40.0 million, £2.3 million lower than the
previous year. Employment costs reduced marginally over the period, as
increases from additional headcount and inflationary adjustments were more
than outweighed by the one-off restructuring costs incurred in the prior year.
The reduction in the Group's overhead was driven, in part, by lower IT, HR and
marketing spend together with lower occupational costs following the
renegotiation of the lease for the Group's head office.
Increased gross interest costs
Gross finance costs on our debt facilities were £39.6 million, £10.6 million
higher than the prior year. This increase was primarily due to a combination
of higher levels of average drawn debt (including greater utilisation of the
Group's £250 million term loan and the issue of our £250 million inaugural
sustainable sterling bond), which was used to fund both our recent
acquisitions as well as capital expenditure on the Group's development and
Flex refurbishments, together with higher underlying interest rates.
Capitalised interest was £26.5 million, up £15.2 million on the prior year
given heightened development activity, including greater cumulative spend
across our committed developments together with a number of refurbishment
schemes to deliver on our Flex ambitions, including 141 Wardour Street, W1,
170 Piccadilly, SW1, SIX St Andrew Street, EC4 and 31/34 Alfred Place, WC1. As
a result, the Group had net finance costs (including interest receivable)
of £13.1 million (2024: £17.7 million).
EPRA earnings
EPRA earnings were £20.2 million, 12.8% higher than last year as expected,
predominantly due to lower net finance and administration costs more than
offsetting lower net rental income and the Group's tax charge.
Revaluation uplifts in the Group's investment properties, together with
improved EPRA earnings, led to the Group's
reported IFRS profit after tax of £116.0 million (2024: loss of £307.8
million). Basic and diluted earnings per share for the year were 30.2 pence
and 30.1 pence respectively, compared with a 101.4 pence loss for 2024
(restated for the impact of the rights issue). Diluted EPRA EPS was 5.2 pence
(2024: 5.9 pence restated), a decrease of 11.9%, and cash EPS was 0.3 pence
(2024: 1.2 pence).
Results of joint ventures
The Group's net investment in joint ventures increased to £507.2 million at
31 March 2025, up from £491.3 million in the previous year. The increase is
largely due to the 2.7% like-for-like increase in value of the joint venture
property portfolio. Our share of joint venture net rental income was £15.9
million, down from £19.4 million last year, with the reduction primarily due
to the expiry of ITV's lease at 200 Gray's Inn Road, WC1, in the Great
Ropemaker Partnership.
Our capital strength
While our primary objective is to deliver returns consistently ahead of our
cost of capital, we also seek to minimise the cost of our capital through the
appropriate mix of equity and debt finance, and to ensure that we have access
to sufficient financial resources to implement our business plans. Optimising
and flexing the allocation of capital across our portfolio, including between
our investment and development activities, is key to our business and ensuring
that we maximise returns on a risk-adjusted basis through the property cycle.
Accordingly, we operate with four key 'givens':
· conservative leverage to enhance, not drive, returns;
· sustainable ordinary dividends;
· disciplined capital allocation; and
· balance sheet efficiency - track record of accretively raising and
returning capital.
Our preference for low financial leverage helps to provide downside protection
when operating in the cyclical central London property market and to maintain
the financial flexibility to allow us to act quickly on new investment
opportunities as they arise.
Our capital strength; EPRA LTV of 30.8%
The Group's consolidated net debt increased to £817.0 million, or £835.7
million excluding customer deposits at 31 March 2025, compared with £738.0
million at 31 March 2024. The movement in the year was largely driven by the
acquisition of four buildings for £162.1 million (excluding costs), together
with £288.1 million of development and refurbishment capital expenditure
across the Group. This investment more than outweighed the net proceeds from
the rights issue last summer. Overall, given the new equity capital raised
from the rights issue, the Group's gearing decreased to 41.9% at 31 March 2025
from 46.8% at 31 March 2024.
Including cash balances in joint ventures, total net debt, excluding net
liabilities, was £801.1 million (2024: £695.3 million) or £820.9 million
excluding customer deposits, equivalent to an EPRA LTV of 30.8% (2024: 32.6%).
At 31 March 2025, we had no external debt in any of our joint ventures. At 31
March 2025, the Group, including its joint ventures, had unrestricted cash
(£33.0 million) and undrawn committed credit facilities (£343.0 million)
totalling £376.0 million.
During the year, to support the delivery of our strategic priorities,
including funding the Group's near-term development programme, the Group
concluded a number of debt transactions:
· In May 2024, we repaid the Group's £175 million private placement
notes on maturity;
· In November 2024, we repaid £175 million of the £250 million term
loan;
· In September 2024, we issued a £250 million seven-year sterling
sustainable bond; and
· -In November 2024, we signed a new £150 million ESG-linked
Revolving Credit Facility.
Including this activity, the Group's weighted average cost of debt for the
year, including fees, was 5.2% and its weighted average interest rate
(excluding fees) was 4.7%, up from 4.3% and 4.1% respectively. At 31 March
2025, our weighted average drawn debt maturity was 5.2 years (31 March 2024:
3.4 years).
At 31 March 2025, 85% of the Group's total drawn debt was at fixed or hedged
rates (2024: 87%). The Group is operating with substantial headroom over its
debt covenants. At 31 March 2025, given our low levels of leverage, property
values would have to fall a further 41% before covenant breach.
Balance sheet discipline
When considering the appropriate level of financial leverage in the business,
we apply the same capital discipline that we use when making asset-level
decisions. Typically, we aim for an EPRA LTV ratio of between 10% and 35%
through the cycle. Additionally, we have a track record of accretively raising
and returning equity capital to shareholders at the appropriate time and in
the appropriate circumstances, including returning £616 million to
shareholders between 2017 and 2020, following profitable recycling activity.
Taxation
The current tax charge for the year was £1.6 million (2024: £nil) and the
deferred tax charge for the year was £0.2 million (2024: £nil). The
effective tax rate on EPRA earnings was 7.4% (2024: 0%). The majority of the
Group's income is tax-free as a result of its REIT status, and other
allowances were available to set against non-REIT profits. The Group complied
with all the requirements necessary to maintain its REIT status throughout the
year.
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 year, the Group paid £10.1
million of PIDs. If our REIT interest cover is below 1.25x each year, we are
subject to corporation tax on the shortfall. During the year, our REIT
interest cover was below 1.25x and as a result we incurred a current tax
charge of £1.6 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. The Group is otherwise subject to corporation tax.
Despite being a REIT, we are subject to a number of other taxes and certain
sector-specific charges in the same way as non-REIT companies. During the
year, we incurred £15.3 million in respect of stamp taxes, section 106
contributions, community infrastructure levies, empty rates in respect of
vacant space, head office rates, employer's National Insurance and
irrecoverable VAT.
All entities within the Group are UK tax resident; as our business is located
wholly in the UK, we consider this to be appropriate. The Group maintains an
open working relationship with HMRC and seeks pre-clearance in respect of
complex transactions. HMRC regards the Group as 'low risk' and maintaining
this status is a key objective of the Group.
Financial outlook
As we deliver on our business plans and crystallise surpluses, we expect
property values and net assets to grow from here, supported by our positive
market outlook. Furthermore, as we deliver new spaces we expect to increase
income and EPRA EPS, supporting our progressive dividend policy. As a result,
we expect our Total Accounting Return to strengthen further and are targeting
an annual return on equity above 10%, excluding potential yield compression.
Ordinary dividends
Given the low yielding nature of London real estate, the Group operates a low
and progressive ordinary dividend policy, with the aim of maintaining average
dividend cover of 1.0x through the cycle. The Board recommended that,
following the rights issue, the total dividend for the year would be stable on
a cash basis with the prior year. As such, in the period the Group paid a
final dividend of 7.9 pence per share (on the pre-rights number of shares) and
an interim dividend of 2.9 pence per share (on the post rights number of
shares). The Board has recommended a final dividend for the year ended 31
March 2025 of 5.0 pence per share, which will be paid, subject to shareholder
approval, on 7 July 2025 to shareholders on the register on 30 May 2025. None
of the final dividend will be a REIT PID in respect of the Group's tax-exempt
property rental business.
Group income statement
For the year ended 31 March 2025
Notes 2025 2024
£m
£m
Revenue 3 94.2 95.4
Cost of sales 4 (35.1) (33.3)
59.1 62.1
Administration expenses 5 (40.0) (42.3)
Other income 0.6 -
Expected credit losses (0.2) (0.1)
Operating profit before surplus/(deficit) from investment property, 19.5 19.7
revaluation movements and results of joint ventures
Surplus/(deficit) from investment property 10 83.2 (267.3)
Deficit on revaluation of other investments 13 (0.4) (0.2)
Share of results of joint ventures 11 21.8 (46.7)
Operating profit/(loss) 124.1 (294.5)
Finance income 6 7.2 6.1
Finance costs 7 (13.1) (17.7)
Fair value loss on derivatives 17 (0.4) (1.7)
Profit/(loss) before tax 117.8 (307.8)
Tax 8 (1.8) -
Profit/(loss) for the year 116.0 (307.8)
Basic earnings/(loss) per share1 9 30.2p (101.4p)
Diluted earnings/(loss) per share1 9 30.1p (101.4p)
Basic EPRA earnings per share1 9 5.3p 5.9p
Diluted EPRA earnings per share1 9 5.2p 5.9p
1. Previous year per share metrics adjusted for the June 2024 rights
issue.
All results are derived from continuing operations in the UK and are
attributable to ordinary equity holders.
Group statement of comprehensive income
For the year ended 31 March 2025
Notes 2025 2024
£m
£m
Profit/(loss) for the year 116.0 (307.8)
Items that will not be reclassified subsequently to profit and loss
Actuarial (loss)/gain on defined benefit scheme 26 (0.8) 0.1
Deferred tax on actuarial (loss)/gain on defined benefit scheme 8 0.2 -
Total comprehensive income/(expense) for the year 115.4 (307.7)
Group balance sheet
At 31 March 2025
Notes 2025 2024
£m
£m
Non-current assets
Investment property 10 2,455.5 1,911.0
Investment in joint ventures 11 507.2 491.3
Property, plant and equipment 12 0.9 2.0
Pension asset 26 4.8 4.9
Derivative financial instruments 17 - 0.4
Other investments 13 2.8 2.4
2,971.2 2,412.0
Current assets
Trade and other receivables 14 20.7 24.9
Cash and cash equivalents 22 36.9 22.9
57.6 47.8
Current assets held for sale
Investment property held for sale 10 - 18.2
- 18.2
Total assets 3,028.8 2,478.0
Current liabilities
Interest-bearing loans and borrowings 16 - (175.0)
Trade and other payables 15 (85.5) (76.2)
Corporation tax 8 (2.6) (0.3)
(88.1) (251.5)
Non-current liabilities
Interest-bearing loans and borrowings 16 (848.0) (565.4)
Head lease obligations 18 (87.0) (74.1)
Occupational lease obligations 19 - (1.0)
Deferred consideration (2.0) -
Provisions in respect of warranties on sold buildings (3.0) (3.0)
(940.0) (643.5)
Total liabilities (1,028.1) (895.0)
Net assets 2,000.7 1,583.0
Equity
Share capital 20 62.0 38.7
Share premium account 358.3 46.0
Capital redemption reserve 326.7 326.7
Retained earnings 1,251.9 1,166.0
Investment in own shares 21 1.8 5.6
Total equity 2,000.7 1,583.0
Basic net assets per share (diluted)1 9 494p 520p
EPRA NTA (diluted)1 9 494p 520p
Pro forma net assets per share1 n/a 473p
1. Previous year per share metrics adjusted for the June 2024 rights
issue.
Approved by the Board on 20 May 2025 and signed on its behalf by:
Toby Courtauld Nick Sanderson
Chief Executive Chief Financial
& Operating Officer
Group statement of cash flows
For the year ended 31 March 2025
Notes 2025 2024
£m
£m
Operating activities
Operating profit/(loss) 124.1 (294.5)
Adjustments for non-cash items 23 (98.4) 313.4
Decrease/(Increase) in receivables 3.8 (8.6)
Increase in payables 6.2 4.1
Cash generated from operations 35.7 14.4
Interest paid (40.9) (22.3)
Interest received 1.5 0.3
Tax paid (0.3) -
Cash flows used in operating activities (4.0) (7.6)
Investing activities
Repayment of loans by joint ventures 11.6 6.7
Investment in joint ventures - (0.1)
Purchase of other investments (0.8) (0.8)
Development of investment property (247.5) (121.7)
Purchase of investment property (147.3) (128.3)
Purchase of plant and equipment (0.6) (0.1)
Sale of properties - 12.6
Cash flows used in investing activities (384.6) (231.7)
Financing activities
£450 million revolving credit facility repaid 16 (339.0) (275.4)
£450 million revolving credit facility drawn 16 442.0 308.4
£150 million revolving credit facility repaid 16 (2.0) -
£150 million revolving credit facility drawn 16 108.3 -
Term loan (repaid)/drawn 16 (175.0) 248.0
Purchase of derivative 17 - (2.1)
Private placement notes repaid (175.0) -
Issue of sustainable sterling bond 246.2 -
Proceeds from rights issue 350.3 -
Transaction costs of rights issue (14.7) -
Purchase of own shares (5.7) -
Payment of lease obligations (1.0) (3.4)
Dividends paid 24 (31.8) (32.7)
Cash flows generated from financing activities 402.6 242.8
Net increase in cash and cash equivalents 14.0 3.5
Cash and cash equivalents at 1 April 22.9 19.4
Cash and cash equivalents at 31 March 22 36.9 22.9
Group statement of changes in equity
For the year ended 31 March 2025
Notes Share Share Capital Retained Investment Total
capital
premium
redemption
earnings
in own
equity
£m
account
reserve
£m
shares
£m
£m
£m
£m
Total equity at 1 April 2024 38.7 46.0 326.7 1,166.0 5.6 1,583.0
Profit for the year - - - 116.0 - 116.0
Actuarial loss on defined benefit scheme 26 - - - (0.8) - (0.8)
Deferred tax on defined benefit scheme - - - 0.2 - 0.2
Total comprehensive income for the year - - - 115.4 - 115.4
Proceeds from three for five rights issue 23.3 327.0 - - - 350.3
Costs of issue - (14.7) - - - (14.7)
Employee share-based incentive charge 21 - - - - 4.2 4.2
Purchase of own shares 21 - - - - (5.7) (5.7)
Dividends to shareholders 24 - - - (31.8) - (31.8)
Transfer to retained earnings 21 - - - 2.3 (2.3) -
Total equity at 31 March 2025 62.0 358.3 326.7 1,251.9 1.8 2,000.7
Group statement of changes in equity
For the year ended 31 March 2024
Notes Share Share Capital Retained Investment Total
capital
premium
redemption
earnings
in own
equity
£m
account
reserve
£m
shares
£m
£m
£m
£m
Total equity at 1 April 2023 38.7 46.0 326.7 1,504.4 2.8 1,918.6
Loss for the year - - - (307.8) - (307.8)
Actuarial gain on defined benefit scheme 26 - - - 0.1 - 0.1
Deferred tax on defined benefit scheme - - - - - -
Total comprehensive expense for the year - - - (307.7) - (307.7)
Employee incentive plan charges 21 - - - - 4.0 4.0
Dividends to shareholders 24 - - - (31.9) - (31.9)
Transfer to retained earnings 21 - - - 1.2 (1.2) -
Total equity at 31 March 2024 38.7 46.0 326.7 1,166.0 5.6 1,583.0
Notes forming part of the Group financial statements
1 Material accounting policies
Basis of preparation
The financial information contained in this announcement has been prepared on
the basis of the accounting policies set out in the financial statements for
the year ended 31 March 2025. Whilst the financial information included in
this announcement has been prepared in accordance with United Kingdom adopted
international accounting standards in conformity with the requirements of the
Companies Act 2006, this announcement does not itself contain sufficient
information to comply with IFRS. The financial information does not constitute
the Company's financial statements for the years ended 31 March 2025 or 2024,
but is derived from those financial statements. The auditors' reports on both
the 2025 and 2024 financial statements were not qualified or modified.
The financial information set out in this announcement does not constitute the
consolidated statutory accounts for the years ended 31 March 2025 or 2024, but
is derived from those accounts. Statutory accounts for 2024 have been
delivered to the Registrar of Companies and those for 2025 (approved by the
Board on 20 May 2025) will be delivered following the Company's annual general
meeting.
The Directors are also responsible for keeping adequate accounting records
that are sufficient to show and explain the Group's and Company's transactions
and disclose with reasonable accuracy at any time the financial position of
the Group and Company and enable them to ensure that the financial statements
and the Directors' remuneration report comply with the Companies Act 2006.
The financial statements have been prepared on the historical cost basis,
except for the revaluation of properties and certain financial instruments
which are held at fair value. The consolidated financial statements, including
the results and financial position, are expressed in sterling (£), which is
the presentation currency of the Group.
The Directors have considered the appropriateness of adopting the going
concern basis in preparing the financial statements for the year ended 31
March 2025, with particular focus on the impact of the macro-economic
conditions in which the Group is operating. The Directors also considered the
Group's net current liability position as at 31 March 2025. The Directors'
assessment is based on the next 12 months of the Group's financial forecasts
from the date of approval of the Annual Report, including a severe but
plausible downside scenario which included the following key assumptions:
- a 13% decline in the valuation of the property portfolio; and
- a 10% decline in estimated rental values.
The severe but plausible downside scenario demonstrates that the
Group over the next 12 months:
- has sufficient liquidity to fund its ongoing operations;
- is operating with significant headroom above its Group debt financing
covenants;
- property values would have to fall by 20% before breach (or 41% from 31
March 2025 values); and
- earnings before interest and tax would need to fall by 68% before
breach (or 87% from 31 March 2025 levels).
The Directors conducted extensive stress testing, sensitising the potential
impact of climate change, as detailed further in the viability statement as
well as the impact of removing non-committed capital expenditure and
sensitising potential disposal proceeds. The Directors also considered the
significance of events beyond the 12-month going concern period, including the
maturity of the Group's term loan in September 2026, and are confident
of the Group's ability to refinance the loan or repay the loan in full at
maturity after taking mitigating actions. Based on these considerations,
together with 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 year ended
31 March 2025.
The Group has adopted a number of alternative performance measures, see note
9 for further detail.
Critical accounting judgements and key sources of estimation uncertainty
In the process of preparing the financial statements, the Directors are
required to make certain judgements, assumptions and estimates. Not all of the
Group's accounting policies require the Directors to make difficult,
subjective or complex judgements or estimates. Any estimates and judgements
made are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be
reasonable under the circumstances. Although these estimates are based on the
Directors' best knowledge of the amount, event or actions, actual results
may differ from those estimates.
No critical judgements have been made.
The following is intended to provide an understanding of the estimates that
management consider critical because of the level of complexity, judgement or
estimation involved in their application and their material impact on the
financial statements.
Key source of estimation uncertainty: investment property portfolio valuation
The valuation to determine the fair value of the Group's investment properties
is prepared by its external valuer. The valuation is based upon a number of
assumptions and estimations, including future rental income, anticipated
capital expenditure, including future development costs and an appropriate
discount rate. The valuer also makes reference to market evidence of
transaction prices for similar properties. Information about the valuation
techniques, significant assumptions and associated key unobservable inputs
sensitivity disclosures are disclosed in note 10. An adjustment to any of
these assumptions could lead to a material change in the property valuation.
For the current year and prior year, the Directors adopted the valuation
without adjustment - further information is provided in the accounting policy
for investment property and note 10.
New accounting standards
In the current year, the Group has applied a number of amendments to IFRSs
that are mandatorily effective for an accounting period that begins on or
after 1 January 2024. Their adoption has not had any material impact on the
disclosures or on the amounts reported in these financial statements. These
new standards and amendments are listed below:
- Amendments to IAS 1 - Presentation of financial statements -
classification of liabilities as current or
non-current and non-current liabilities with covenants;
- Amendments to IFRS 8, specifically Operating Segments disclosure following
IFRIC agenda decision;
- Amendments to IFRS 16 - Leases - lease liability in a sale and leaseback;
and
- Amendments to IAS 7 and IFRS 7 - supplier finance arrangements.
At the date of authorisation of these financial statements, the Group has not
applied the following new and revised IFRSs that have been issued but are not
yet effective:
- IFRS 18 - Presentation and Disclosure in Financial Statements:
- Amendments to IFRS 9 and IFRS 7 - Amendments to the Classification and
Measurement of Financial Instruments;
- IFRS 19 - Subsidiaries without Public Accountability: Disclosures;
- Amendments to IAS 21 - Lack of Exchangeability; and
- Amendments to IFRS 10 and IAS 28 - sale or contribution of assets between
an investor and its associate or joint venture.
The Directors do not expect that the adoption of the standards listed above
will have a material impact on the financial statements of the Group in
future periods, with the exception of IFRS 18, where the Directors are still
assessing its potential impact.
Basis of consolidation
The Group's financial statements consolidate the financial statements of the
Company and all its subsidiary undertakings for the year ended 31 March 2025.
Subsidiary undertakings are those entities controlled by the Group. Control
exists when the Company is exposed, or has rights, to variable returns from
its involvement with the entity and has the ability to affect those returns
through its power over the investee.
Revenue
Gross rental income comprises rental income and premiums on lease surrenders
on investment properties for the year, exclusive of service charges
receivable, on a straight-line basis. Initial direct costs incurred in
arranging a lease are added to the carrying value of investment properties
and are subsequently recognised as an expense over the lease term on the
same basis as the lease income.
Lease incentives, including rent-free periods and payments to customers, are
allocated to the income statement on a straight-line basis over the lease
term or on another systematic basis, if applicable. The value of resulting
accrued rental income is included within the respective property, with the
aggregate cost of the incentive recognised as a reduction in rental income
on a straight-line basis over the term of the lease.
Revenue from Fully Managed spaces is split between an amount attributable to
the rent on a fitted basis and services income as set out in the lease
agreement, which is based on stand-alone selling prices. Where the lease
agreement does not provide an attribution, the Group splits the revenue based
on the ERV of the fitted rent, which represents the stand-alone selling price.
The rent is recognised in gross rental income (see above) and the services
income is recorded over the period when the services are provided and benefit
the customer.
The Group's Flex Partnerships represent leases with third-party operators
where the rent payable is calculated by reference to the profitability of the
space under management. The rent is recognised in gross rental income (see
above).
Service charge income is recorded over the period when the services are
provided and benefit the customer.
Cost of sales
Service charge expenses represent the costs of operating the Group's
portfolio and are expensed as incurred.
Fully Managed service costs represent the costs of operating the Group's
Fully Managed spaces and are expensed as incurred.
Other property expenses represent irrecoverable running costs directly
attributable to specific properties within the Group's portfolio. Costs
incurred in the improvement of the portfolio which, in the opinion of the
Directors, are not of a capital nature are written-off to the income
statement as incurred.
Administration expenses
Costs not directly attributable to individual properties are treated as
administration expenses.
Share-based payments
The cost of granting share-based payments to employees and Directors is
recognised within administration expenses in the income statement. The Group
has used the stochastic model to fair value LTIP grants, which is dependent
upon factors including the share price, expected volatility and vesting
period. The fair value of the RSP is based on the share price at grant date.
The resulting fair value is amortised through the income statement over the
vesting period. The charge is recognised over the vesting period and reversed
if it is likely that any non-market-based performance or service criteria
will not be met. Any cost in respect of share-based payments relating to the
employees of a subsidiary company is recharged accordingly.
Investment property
Both leasehold and freehold investment properties and investment properties
under development are professionally valued on a fair value basis by qualified
external valuers, and the Directors must ensure that they are satisfied that
the valuation of the Group's properties is appropriate for inclusion in the
accounts without adjustment. 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.
The valuations have been prepared in accordance with the current versions of
the RICS Valuation - Global Standards (incorporating the International
Valuation Standards (IVS)) and the UK national supplement (the Red Book)
and have been primarily derived using comparable recent market transactions
on arm's length terms.
For investment property, this approach involves applying market-derived
capitalisation yields to current and market-derived future income streams with
appropriate adjustments for income voids arising from vacancies or rent-free
periods.
These capitalisation yields and future income streams are derived from
comparable property and leasing transactions and are considered to be the key
inputs in the valuation. Other factors that are taken into account in the
valuations include the tenure of the property, tenancy details, non-payment of
rent, planning, building and environmental factors that might affect the
property.
An investment property will be classified as held for sale where it is
available for immediate sale in its present condition and the sale is highly
probable.
In the case of investment property under development, the approach applied is
the 'residual method' of valuation, which is the investment method of
valuation as described above with a deduction for the costs necessary to
complete the development, together with an allowance for the remaining risk.
The Group recognises sales and purchases of property when control passes on
completion of the contract. Gains or losses on the sale of properties are
calculated by reference to the carrying value at the end of the previous year,
adjusted for subsequent capital expenditure.
Lease obligations
Where the Group is a lessee, a right of use asset and lease liability are
recognised at the outset of the lease. The lease liability is initially
measured at the present value of the lease payments based on the Group's
expectations of the likelihood of the lease term. The lease liability is
subsequently adjusted to reflect an imputed finance charge, payments made to
the lessor and any lease modifications.
The right of use asset is initially measured at cost, which comprises the
amount of the lease liability and direct costs incurred, less any lease
incentives received by the Group. The Group has two categories of right of use
assets: those in respect of head leases related to its leasehold properties;
and an occupational lease for its head office. The right of use asset in
respect of head leases is classified as investment property and is added to
the carrying value of the leasehold investment property. The right of use
asset in respect of its occupational leases is classified as property, plant
and equipment and is subsequently depreciated over the length of the lease.
Depreciation
No depreciation is provided in respect of freehold investment properties and
leasehold investment properties. Plant and equipment is held at cost less
accumulated depreciation. Depreciation is provided on plant and equipment, at
rates calculated to write off the cost, less residual value prevailing at the
balance sheet date of each asset evenly over its expected useful life, as
follows:
Fixtures and fittings - over three to five years.
Leasehold improvements - over the term of the lease.
Joint ventures
Joint ventures are accounted for under the equity method where, in the
Directors' judgement, the Group has joint control of the entity. The Group's
level of control in its joint ventures is driven both by the individual
agreements which set out how control is shared by the partners and how that
control is exercised in practice. The Group balance sheet contains the Group's
share of the net assets of its joint ventures. Balances with partners owed to
or from the Group by joint ventures are included within investments. The
Group's share of joint venture profits and losses are included in the Group
income statement in a single line. All of the Group's joint ventures adopt
the accounting policies of the Group for inclusion in the Group financial
statements. There have been no new joint ventures during the year and no
changes to any of the agreements in place.
Income tax
Current tax is the amount payable on the taxable income for the year and any
adjustment in respect of previous years. Deferred tax is provided in full on
temporary differences between the tax base of an asset or liability and its
carrying amount in the balance sheet. Deferred tax is determined using tax
rates that have been enacted or substantively enacted by the balance sheet
date and are expected to apply when the asset is realised or the liability is
settled. Deferred tax assets are recognised when it is probable that taxable
profits will be available against which the deferred tax assets can be
utilised. No provision is made for temporary differences arising on the
initial recognition of assets or liabilities that affect neither accounting
nor taxable profit, with the exception of leases. Tax is included in the
income statement except when it relates to items recognised directly in other
comprehensive income or equity, in which case the related tax is also
recognised directly in other comprehensive income or equity.
Pension benefits
The Group contributes to a defined benefit pension plan which is funded with
assets held separately from those of the Group. The full value of the net
assets or liabilities of the pension fund is brought onto the balance sheet at
each balance sheet date. Actuarial gains and losses are taken to other
comprehensive income; all other movements are taken to the income statement.
Capitalisation of interest
Interest associated with direct expenditure on investment and trading
properties under development and refurbishment is capitalised. Direct
expenditure includes the purchase cost of a site if it has been purchased
with the specific intention to redevelop, but does not include the original
book cost of a site where no intention existed. Interest is capitalised from
the start of the development work until the date of practical completion. The
rate used is the Group's weighted average cost of borrowings
or, if appropriate, the rate on specific associated borrowings.
Other investments
Other investments comprise investments in Pi Labs European PropTech venture
capital fund, which is measured at fair value, based on the net assets of the
fund; this is a Level 3 valuation as defined by IFRS 13. Changes in fair value
are recognised in profit or loss.
Financial instruments
i Borrowings The Group's borrowings in the form of its debentures, private
placement notes and bank loans are recognised initially at fair value, after
taking account of any discount or premium on issue and attributable
transaction costs. Subsequently, borrowings are held at amortised cost, with
any discounts, premiums and attributable costs charged to the income statement
using the effective interest rate method.
ii Cash and cash equivalents Cash and cash equivalents comprise cash in hand,
demand deposits and other short-term highly liquid investments that are
readily convertible into a known amount of cash and are subject to
insignificant risk
of changes in value.
iii Trade receivables and payables Trade receivables are initially measured at
the transaction price, and are subsequently measured at amortised cost using
the effective interest rate method. See note 14 for further information
on trade receivables and associated expected credit losses. Trade payables
are initially measured at fair value and subsequently measured at amortised
cost.
iv Derivative financial instruments The Group uses derivatives (principally
interest rate caps) in managing interest rate risk, and does not use them for
trading. They are recorded, and subsequently revalued, at fair value,
with revaluation gains or losses being immediately taken to the income
statement. Derivatives with a maturity of less than 12 months or that expect
to be settled within 12 months of the balance sheet date are presented as
current assets or liabilities. Other derivatives are presented as non-current
assets or liabilities.
2 Segmental analysis
IFRS 8 Operating Segments requires the identification of operating segments
based on internal financial reports detailing components of the Group
regularly reviewed by the chief operating decision makers (the Group's
Executive Committee) in order to allocate resources to the segments and to
assess their performance.
The Directors have concluded that, based on the level of information provided
to the Executive Committee, that its Fully Managed operations is an operating
segment as defined by IFRS 8. Furthermore, given the revenue is in excess of
10% of wider Group revenue, the segment should be separately reported from the
remainder of the Group's activities.
The remainder of the Group's components are managed together, with their
operating results reviewed on an aggregated basis. All of the Group's revenue
is generated from investment properties located in a small radius within
central London. The properties are managed as a single portfolio by a
Portfolio Management team whose responsibilities are not segregated by
location or type but are managed on an asset-by-asset basis. The majority of
the Group's assets are mixed-use, therefore the office, retail and any
residential space are managed together. The Directors have considered the
nature of the business, how the business is managed and how they review
performance, and in their judgement, the Group has only two reportable
segments.
The Executive Committee reviews the performance of its Fully Managed offer
based on gross revenue (including Fully Managed services income) net of cost
of sales on a proportionally consolidated basis (including the Group's joint
ventures at share). Total assets and liabilities are not monitored by segment.
Segmental analysis for the year ended 31 March 2025
Fully Managed offices including joint ventures Joint Group Fully Managed offices Remainder Total
£m
ventures
£m
of portfolio
2025
£m
£m
£m
Revenue 20.6 (1.8) 18.8 75.4 94.2
Cost of sales (11.3) 0.5 (10.8) (24.3) (35.1)
Net result 9.3 (1.3) 8.0 51.1 59.1
Group Fully Managed office revenue includes £0.3 million (2024: £nil) in
respect of spreading of lease incentives.
Segmental analysis for the year ended 31 March 2024
Fully Managed offices including joint ventures Joint Group Fully Managed offices Remainder Total
£m
ventures
£m
of portfolio
2024
£m
£m
£m
Revenue 13.6 (1.4) 12.2 83.2 95.4
Cost of sales (8.6) 0.5 (8.1) (25.2) (33.3)
Net result 5.0 (0.9) 4.1 58.0 62.1
3 Revenue
2025 2024
£m
£m
Gross rental income 69.4 67.2
Spreading of lease incentives (1.4) 5.7
Service charge income 12.8 14.4
Fully Managed services income 10.9 6.4
Joint venture fee income 2.5 1.7
94.2 95.4
The table below sets out the Group's gross rental income split between types
of space provided:
2025 2024
£m
£m
Ready to Fit 36.4 37.9
Retail 11.8 10.5
Fitted 7.9 6.8
Fully Managed 7.6 5.8
Flex Partnerships 3.0 3.8
Hotel 2.7 2.4
69.4 67.2
The table below sets out the Group's net rental income, which is an
alternative performance measure (see note 9):
2025 2024
£m
£m
Gross rental income 69.4 67.2
Expected credit loss (0.1) (0.2)
Rental income 69.3 67.0
Spreading of lease incentives (1.4) 5.7
Ground rent (0.6) (0.6)
Net rental income 67.3 72.1
4 Cost of sales
2025 2024
£m
£m
Service charge expenses 16.5 17.7
Fully Managed service expenses 10.8 8.1
Other property expenses 7.2 6.9
Ground rent 0.6 0.6
35.1 33.3
The table below sets out the Group's property costs, which is an alternative
performance measure (see note 9):
2025 2024
£m
£m
Service charge income (12.8) (14.4)
Service charge expenses 16.5 17.7
Fully Managed services income (10.9) (6.4)
Fully Managed services expenses 10.8 8.1
Other property expenses 7.2 6.9
Expected credit loss/(recovery) 0.1 (0.1)
Property costs 10.9 11.8
5 Administration expenses
2025 2024
£m
£m
Employee costs 29.7 30.9
Depreciation (see note 12) 1.7 1.6
Other head office costs 8.6 9.8
40.0 42.3
Included within employee costs is an accounting charge for the Employee Long
Term Incentive Plan and deferred bonus shares of £4.2 million (2024: £4.0
million). Employee costs, including those of Directors, comprise the
following:
2025 2024
£m
£m
Wages and salaries (including annual bonuses) 24.2 24.4
Share-based payments 4.0 4.1
Social security costs 4.0 3.7
Other pension costs 2.1 2.4
34.3 34.6
Less: recovered through service charges (2.0) (1.9)
Less: capitalised into development projects (2.1) (1.8)
Less: Fully Managed staff costs (0.5) -
29.7 30.9
Key management compensation
The Directors and the Executive Committee are considered to be key management
for the purposes of IAS 24 - Related Party Transactions with their aggregate
compensation set out below:
2025 2024
£m
£m
Wages and salaries (including annual bonuses) 6.4 6.8
Share-based payments 1.9 1.9
Social security costs 1.1 1.1
Other pension costs 0.4 0.5
9.8 10.3
The number of people considered key management totalled 15 (2024: 17). The
Group had loans to key management of £nil (2024: £2,880) outstanding at 31
March 2025. The Group's key management, its pension plan and joint ventures
are the Group's only related parties.
Employee information
The monthly average number of employees of the Group, including Directors,
was:
2025 2024
Number
Number
Head office and property management 158 150
Auditor's remuneration
2025 2024
£000
£000
Audit of the Group and Company's annual accounts 345 394
Audit of subsidiaries 111 107
456 501
Audit-related assurance services, including the interim review 63 61
Reporting accountant fees - rights issue and issue of £250.0 million 308 -
sustainable sterling bond
Sustainability assurance 73 68
Auditor's remuneration 900 630
6 Finance income
2025 2024
£m
£m
Interest income on joint venture balances 5.7 5.8
Interest on cash deposits 1.5 0.3
7.2 6.1
7 Finance costs
2025 2024
£m
£m
Interest on revolving credit facilities 7.3 5.8
Interest on term loan 12.8 8.5
Interest on private placement notes 7.6 11.0
Interest on sustainable sterling bond 7.2 -
Interest on debenture stock 1.2 1.2
Interest on obligations under head leases 3.1 2.4
Other 0.4 0.1
Gross finance costs 39.6 29.0
Less: capitalised interest (26.5) (11.3)
13.1 17.7
The Group capitalised interest on certain developments with specific
associated borrowings at 6.9% (2024: 6.8%), with the remainder at the
Group's weighted average cost of non-specific borrowings of 4.6% (2024: 3.5%).
8 Tax
2025 2024
£m
£m
Current tax
UK corporation tax - current period 1.6 -
UK corporation tax - prior periods - -
Total current tax 1.6 -
Deferred tax 0.2 -
Tax charge for the year 1.8 -
The effective rate of tax is lower (2024: lower) than the standard rate of
tax. The difference arises from the items set out below:
2025 2024
£m
£m
Profit/(loss) before tax 117.8 (307.8)
Tax charge/(credit) on profit/(loss) at standard rate of 25% (2024: 25%) 29.5 (77.0)
REIT tax exempt rental profits and gains (7.9) (7.4)
Changes in fair value of properties not subject to tax (24.5) 80.5
Other 4.7 3.9
Tax charge for the year 1.8 -
The Group complied with all the requirements necessary to maintain its REIT
status throughout the year. If our REIT interest cover is below 1.25x each
year, we are subject to corporation tax on the shortfall. During the year, our
REIT interest cover was below 1.25x and as a result we incurred a current tax
charge of £1.6 million (2024: £nil).
During the year, £0.2 million (2024: £nil) of deferred tax was credited
directly to equity. The Group recognised a net deferred tax asset at 31 March
2025 of £nil (2024: £nil). This consists of deferred tax assets of £1.4
million (2024: £1.6 million) and deferred tax liabilities of £1.4 million
(2024: £1.6 million).
Deferred tax is calculated using tax rates that have been enacted or
substantively enacted at the balance sheet date.
Movement in deferred tax
At 1 April Recognised Recognised At 31 March
2024
in the income
in equity
2025
£m
statement
£m
£m
£m
Net deferred tax (liability)/asset in respect of other temporary differences - (0.2) 0.2 -
The Group has not recognised further deferred tax assets in respect of gross
temporary differences arising from the following items, because it is
uncertain whether future taxable profits will arise against which these assets
can be utilised:
2025 2024
£m
£m
Revenue losses 32.4 24.6
Share-based payments 7.8 8.4
Other 1.5 1.3
41.7 34.3
As a REIT, the majority of rental profits and chargeable gains from the
Group's property rental business are exempt from UK corporation tax. The Group
is otherwise subject to corporation tax. In particular, the Group's REIT
exemption does not extend to either profits arising from the sale of trading
properties or gains arising from the sale of investment properties in respect
of which a major redevelopment has completed within the preceding three
years.
In order to ensure that the Group is able to both retain its status as a REIT
and 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.
The Group has assessed the impact of the Pillar Two tax legislation, which
came into effect on 1 January 2024. The Group does not meet the minimum
thresholds for the legislation to apply for the year ended 31 March 2025 and
expects this to remain the case for the foreseeable future. All entities
within the Group are UK tax resident.
9 Earnings per share, alternative performance measures and EPRA metrics
As is usual practice in our sector, we use alternative performance measures
(APMs) to help explain the performance of the business. These include quoting
a number of measures on a proportionally consolidated basis to include joint
ventures, as it best describes how we manage the portfolio, and using measures
prescribed by the European Public Real Estate Association (EPRA). The measures
defined by EPRA are designed to enhance transparency and comparability across
the European real estate sector in accordance with its Best Practice
Recommendations (BPR). The Directors consider these EPRA metrics, and the
other metrics provided, to be the most appropriate method of reporting the
value and performance of the business. During the year, EPRA updated its BPR
guidelines to incorporate changes to EPRA earnings effective for reporting
periods starting after 1 October 2024. The Directors have adopted the revised
guidelines early in the current financial year.
In June 2024, the Company issued 152,320,747 new shares through a rights issue
(see note 20). To reflect the rights issue, the comparative number of shares
previously used to calculate the basic and diluted per share data has been
restated in the below earnings and net asset value per share calculations. In
accordance with IAS 33 - Earnings per share, an adjustment factor of 1.20 has
been applied to the comparative number of shares based on the ratio of the
Company's closing share price of 414.6 pence per share on 22 May 2024, being
the day prior to the announcement of the rights issue (adjusted for the
recommended final dividend for the year ended 31 March 2024) and the
theoretical ex-rights price at that date of 345.4 pence per share.
Earnings per share
Weighted average number of ordinary shares
2025 2024
Number of
Restated
shares
Number of
shares
Issued ordinary share capital at 1 April 253,867,911 253,867,911
Rights issue 132,033,365 50,883,840
Investment in own shares (1,816,870) (1,064,976)
Weighted average number of ordinary shares at 31 March - basic 384,084,406 303,686,775
Basic and diluted earnings per share
Profit Number Profit Loss Restated Restated
after tax
of shares
per share
after tax
number
loss
2025
2025
2025
2024
of shares
per share
£m
million
pence
£m
2024
2024
million
pence
Basic 116.0 384.1 30.2 (307.8) 303.7 (101.4)
Dilutive effect of LTIP shares - 0.9 (0.1) - - -
Diluted 116.0 385.0 30.1 (307.8) 303.7 (101.4)
Basic and diluted EPRA earnings per share (EPS)
Earnings/(loss) Number Earnings/(loss) (Loss)/ Restated Restated (loss)/
after tax
of shares
per share
Earnings
number
earnings
2025
2025
2025
after tax
of shares
per share
£m
million
pence
2024
2024
2024
£m
million
pence
Basic 116.0 384.1 30.2 (307.8) 303.7 (101.4)
(Surplus)/deficit from investment property net of tax (note 10) (83.2) - (21.6) 267.3 - 88.0
(Surplus)/deficit from joint venture investment property (note 11) (14.5) - (3.7) 56.5 - 18.6
Debt cancellation costs (note 16) 0.7 - 0.2 - - -
Deficit on revaluation of derivatives (note 17) 0.4 - 0.1 1.7 - 0.6
Deficit on revaluation of other investments (note 13) 0.4 - 0.1 0.2 - 0.1
Deferred tax in respect of adjustments (note 8) 0.2 - - - - -
Exceptional item: IT transformation costs 0.2 - - - - -
Basic EPRA earnings 20.2 384.1 5.3 17.9 303.7 5.9
Dilutive effect of LTIP shares (note 21) - 0.9 (0.1) - 0.1 -
Diluted EPRA earnings 20.2 385.0 5.2 17.9 303.8 5.9
During the year, the Group commenced an IT transformation project to replace
the Group's finance and property management system. The cost of this project
has been excluded from EPRA EPS in accordance with the EPRA Best Practices
Recommendations September 2024.
Cash earnings per share
Profit Number Earnings Profit Restated Restated
after tax
of shares
per share
after tax
number
earnings
2025
2025
2025
2024
of shares
per share
£m
million
pence
£m
2024
2024
million
pence
Diluted EPRA earnings 20.2 385.0 5.2 17.9 303.8 5.9
Capitalised interest (26.5) - (6.9) (11.3) - (3.7)
Spreading of lease incentives 1.0 - 0.3 (5.7) - (1.9)
Spreading of lease incentives in joint ventures 2.4 - 0.7 (1.4) - (0.4)
Capitalised interest in joint ventures (0.2) - (0.1) - - -
Employee incentive plan charges 4.2 - 1.1 4.0 - 1.3
Cash earnings per share 1.1 385.0 0.3 3.5 303.8 1.2
Net assets per share
The Group has adopted EPRA's Best Practice Recommendations for Net Asset Value
(NAV) metrics. The recommendations include three NAV metrics: EPRA Net
Tangible Assets (NTA), Net Reinvestment Value (NRV) and Net Disposal Value
(NDV). We consider EPRA NTA to be the most relevant measure for the Group and
the primary measure of IFRS net asset value; definitions are included in the
glossary.
In addition, we have presented a pro forma net assets per share, which
restates the 31 March 2024 balance sheet, to include the net proceeds and new
shares issued as a result from the rights issue. We consider the pro forma net
assets per share to be a more appropriate metric to benchmark performance
over the year, given it is based on balance sheet values rather than
share price derived metrics.
Number of ordinary shares
2025 2024
Number of
Restated
shares
number of
shares
Issued ordinary share capital 253,867,911 253,867,911
Rights issue 152,320,747 50,883,840
Investment in own shares (2,893,542) (1,064,976)
Number of shares - basic 403,295,116 303,686,775
Dilutive effect of LTIP shares 1,472,577 676,992
Number of shares - diluted 404,767,693 304,363,767
EPRA net assets per share at 31 March 2025
IFRS EPRA EPRA EPRA
£m
NTA
NDV
NRV
£m
£m
£m
IFRS basic and diluted net assets 2,000.7 2,000.7 2,000.7 2,000.7
Fair value of derivative financial instruments - - - -
Fair value of financial liabilities (note 17) - - 46.5 -
Real estate transfer tax - - - 209.3
Net assets used in per share calculations 2,000.7 2,000.7 2,047.2 2,210.0
IFRS EPRA NTA EPRA NDV EPRA NRV
pence
pence
pence
pence
Net assets per share (pence) 496 496 508 548
Diluted net assets per share (pence) 494 494 506 546
EPRA net assets per share at 31 March 2024
IFRS EPRA EPRA EPRA
£m
NTA
NDV
NRV
£m
£m
£m
IFRS basic and diluted net assets 1,583.0 1,583.0 1,583.0 1,583.0
Fair value of derivative financial instruments - (0.4) - (0.4)
Fair value of financial liabilities (note 17) - - 50.7 -
Real estate transfer tax - - - 170.1
Net assets used in per share calculations 1,583.0 1,582.6 1,633.7 1,752.7
Restated Restated Restated Restated
IFRS
EPRA NTA
EPRA NDV
EPRA NRV
pence
pence
pence
pence
Net assets per share (pence) 521 521 538 577
Diluted net assets per share (pence) 520 520 537 576
Pro forma net assets per share
The prior year's NTA, adjusted for the impact of the new equity raised as a
result of the rights issue is as follows:
31 March Share 31 March Net 31 March
2024
adjustment
2024
proceeds
2024
Restated as
per IAS 33
as
from rights
Pro forma
above
disclosed
issue
EPRA net assets (£m) 1,582.6 - 1,582.6 335.6 1,918.2
Number of shares (million) - diluted 304.4 (50.9) 253.5 152.3 405.8
Diluted net assets per share (pence) 520 624 473
Total Accounting Return (TAR)
2025 2024
£m
£m
Opening EPRA net assets 1,582.6 1,918.6
Adjusted for rights issue 335.6 -
Restated opening EPRA net assets (A) 1,918.2 1,918.6
Closing net assets 2,000.7 1,582.6
Increase/(decrease) in net assets 82.5 (336.0)
Ordinary dividends paid in the year 31.8 31.9
Total return (B) 114.3 (304.1)
Total Accounting Return (B/A) 6.0% (15.9%)
EPRA loan-to-property value and net debt
We consider loan-to-property value, including our share of joint ventures, to
be the best measure of the Group's risk from financial leverage. We also
present net gearing as it is a key covenant on our loan facilities (see note
16).
2025 2024
£m
£m
£21.9 million 55⁄8% debenture stock 2029 21.9 21.9
£450.0 million revolving credit facility 150.0 47.0
£150.0 million revolving credit facility 107.0 -
£75.0 million term loan 2026 (2024: £250.0 million) 75.0 250.0
£250.0 million 5.375% sustainable sterling bond 2031 250.0 -
Private placement notes 250.0 425.0
Less: cash and cash equivalents (36.9) (22.9)
Group net debt 817.0 721.0
Net payables (including customer rent deposits) 72.4 54.6
Group net debt including net payables 889.4 775.6
Joint venture net payables (at share) 9.5 10.5
Less: joint venture cash and cash equivalents (at share) (15.9) (25.7)
Net debt including joint ventures (A) 883.0 760.4
Group properties at market value 2,368.5 1,855.1
Joint venture properties at market value (at share) 500.8 476.1
Property portfolio at market value including joint ventures (B) 2,869.3 2,331.2
EPRA loan-to-property value (A/B) 30.8% 32.6%
Group cash and cash equivalents includes customer rent deposits held in
separate designated bank accounts of £18.7 million (2024: £17.0 million),
the use of the deposits is subject to restrictions as set out in the
customer's lease agreement and therefore not available for general use by the
Group.
EPRA cost ratio (including share of joint ventures)
2025 2024
£m
£m
Administration expenses 40.0 42.3
Net property costs (excluding Fully Managed services income and costs) 11.0 10.1
Joint venture management fee income (excluding Fully Managed services income (2.5) (1.7)
and costs, note 3)
Joint venture property and administration costs (note 11) 3.1 3.6
EPRA costs (including direct vacancy costs) (A) 51.6 54.3
Direct vacancy costs (6.9) (5.1)
Joint venture direct vacancy cost (1.3) (2.2)
EPRA costs (excluding direct vacancy costs) (B) 43.4 47.0
Net rental income (note 3) 67.3 72.1
Joint venture net rental income (note 11) 15.9 19.4
Gross rental income (C) 83.2 91.5
Portfolio at fair value including joint ventures (D) 2,869.3 2,331.2
Cost ratio (including direct vacancy costs) (A/C) 62.0% 59.3%
Cost ratio (excluding direct vacancy costs) (B/C) 52.1% 51.4%
Cost ratio (by portfolio value) (A/D) 1.8% 2.3%
Net gearing
2025 2024
£m
£m
Nominal value of interest-bearing loans and borrowings (see note 16) 853.9 743.9
Obligations under occupational leases (note 19) - 1.0
Less: cash and cash equivalents (unrestricted) (note 22) (18.2) (5.9)
Adjusted net debt (A) 835.7 739.0
Net assets 2,000.7 1,583.0
Pension scheme asset (note 26) (4.8) (4.9)
Adjusted net equity (B) 1,995.9 1,578.1
Net gearing (A/B) 41.9% 46.8%
10 Investment property
Investment property
Freehold Leasehold Total
£m
£m
£m
Book value at 1 April 2023 883.5 925.0 1,808.5
Costs capitalised 28.0 57.3 85.3
Movement in lease incentives 7.8 (0.4) 7.4
Interest capitalised 2.2 2.6 4.8
Acquisitions 128.3 - 128.3
Disposals (5.8) (8.4) (14.2)
Transfer to investment property under development (50.1) (59.6) (109.7)
Transfer to investment property held for sale - (18.2) (18.2)
Net valuation deficit on investment property (108.8) (106.0) (214.8)
Book value at 31 March 2024 885.1 792.3 1,677.4
Costs capitalised 55.3 53.5 108.8
Movement in lease incentives 0.3 (0.9) (0.6)
Interest capitalised 2.4 3.5 5.9
Acquisitions 57.3 122.9 180.2
Disposals - (0.5) (0.5)
Net valuation surplus on investment property 36.7 42.5 79.2
Book value at 31 March 2025 (A) 1,037.1 1,013.3 2,050.4
Investment property under development
Freehold Leasehold Total
£m
£m
£m
Book value at 1 April 2023 - 113.7 113.7
Costs capitalised - 54.6 54.6
Interest capitalised - 6.5 6.5
Transfer from investment property 50.1 59.6 109.7
Net valuation deficit on investment property under development - (50.9) (50.9)
Book value at 31 March 2024 50.1 183.5 233.6
Costs capitalised 23.6 123.0 146.6
Interest capitalised 4.7 15.9 20.6
Net valuation (deficit)/surplus on investment property under development (8.3) 12.6 4.3
Book value at 31 March 2025 (B) 70.1 335.0 405.1
Book value of investment property & investment property under development 1,107.2 1,348.3 2,455.5
(A+B)
Investment property held for sale
Freehold Leasehold Total
£m
£m
£m
Book value at 1 April 2023 and 31 March 2024 - 18.2 18.2
Disposals - (18.2) (18.2)
Book value of investment property held for sale at 31 March 2025 (C) - - -
Book value of total investment property at 31 March 2025 (A+B+C) 1,107.2 1,348.3 2,455.5
The book value of investment property includes £87.0 million (2024: £74.1
million) in respect of the present value of future ground rents. The market
value of the portfolio (excluding these amounts) is £2,368.5 million. The
total portfolio value including joint venture properties of £500.8 million
(see note 11) was £2,869.3 million. At 31 March 2025, property with a
carrying value of £114.8 million (2024: £107.0 million) was secured under
the first mortgage debenture stock (see note 16).
Surplus from investment property
2025 2024
£m
£m
Net valuation surplus/(deficit) on investment property 83.5 (265.7)
Loss on sale of investment properties (0.3) (1.6)
83.2 (267.3)
The Group's investment properties, including those held in joint ventures
(note 11), were valued on the basis of fair value by CBRE Limited (CBRE),
external valuers, as at 31 March 2025. The valuations have been prepared in
accordance with the current versions of the RICS Valuation - Global Standards
(incorporating the International Valuation Standards (IVS)) and the UK
national supplement (the Red Book) and have been primarily derived using
comparable recent market transactions on arm's length terms. In accordance
with the updated RICS UK supplement of its 'Red Book', which introduces a
mandatory rotation cycle for its valuers, CBRE will rotate off following their
final valuation of the portfolio at 31 March 2026. A process is underway to
select their successor.
The total fees, including the fixed fee for this assignment, earned by CBRE
(or other companies forming part of the same group of companies within the UK)
from the Group are less than 5.0% of its total UK revenues. CBRE has carried
out valuation instructions, agency and professional services on behalf of
the Group for in excess of 20 years.
Real estate valuations are complex and derived using comparable market
transactions which are not publicly available and involve an element of
judgement. Therefore, we have classified the valuation of the property
portfolio as Level 3 as defined by IFRS 13; this is in line with EPRA
guidance. There were no transfers between levels during the year. 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. There is a negative relationship between development costs and the
property valuation, such that an increase in estimated development costs will
decrease the valuation of a property under development and a decrease in
estimated development costs will increase the valuation of a property
under development. 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.
An increase of 10% on the capital expenditure on the Group's three HQ
development schemes and four Fully Managed conversion schemes, which the
Directors believe is a reasonable variance to budgeted costs based on industry
experience, would reduce the valuation by £35.7 million (31 March 2024:
£49.8 million), with a decrease of 10% increasing the valuation by £35.7
million (31 March 2024: £49.8 million).
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 £112.1
million (£137.4 million including a share of joint ventures) compared to a
£203.2 million based on a 50 basis point movement at 31 March 2024. A 25
basis point increase would reduce the fair value by £102.4 million (£125.4
million including a share of joint ventures) compared to a £166.7 million
based on a 50 basis point movement at 31 March 2024. A movement of 12 basis
points was shown across the portfolio over the last 12 months and a 25 basis
point movement is therefore considered to be a reasonably possible change.
Given there is only a marginal difference in the overall yields for office and
retail and the movement in year, we feel this sensitivity to be appropriate.
The valuation of the property portfolio reflects its fair value taking into
account 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 less than £10 million (£10 million including share of
joint ventures (2024: £10 million and £10 million respectively)), over and
above specific refurbishment and development assumptions included in the
valuation.
During the year, the Group capitalised £2.1 million (2024: £1.8 million) of
employee costs in respect of its development team into investment properties
under development. At 31 March 2025, the Group had capital commitments of
£359.7 million (2024: £502.3 million).
Key inputs to the valuation (by building and location) at 31 March 2025
ERV True equivalent yield
Average Range Average Range
£ per sq ft
£ per sq ft
%
%
North of Oxford Street Office 117 56 - 221 5.6 4.9 - 7.7
Retail 67 34 - 150 5.3 4.6 - 10.6
Rest of West End Office 162 70 - 267 5.2 4.5 - 7.6
Retail 109 15 - 323 4.9 4.5- 6.8
City, Midtown and Southwark Office 89 35 - 197 5.8 5.0 - 7.3
Retail 30 26 - 36 5.6 5.0 - 6.5
Key inputs to the valuation (by building and location) at 31 March 2024
ERV True equivalent yield
Average Range Average Range
£ per sq ft
£ per sq ft
%
%
North of Oxford Street Office 102 74 - 174 5.3 4.8 - 7.3
Retail 67 34 - 110 5.3 4.5 - 10.0
Rest of West End Office 143 70 - 249 5.8 5.0 - 7.3
Retail 115 15 - 295 5.0 3.2 - 6.8
City, Midtown and Southwark Office 83 47 - 173 5.7 5.4 - 7.3
Retail 36 25 - 36 5.9 5.5 - 6.7
EPRA capital expenditure (alternative performance measure)
2025 2024
£m
£m
Group
Acquisitions (note 10) 180.2 128.3
Developments (note 10) 146.6 54.6
Interest capitalised (note 7) 26.5 11.3
Investment properties: incremental lettable space - -
Investment properties: no incremental lettable space (note 10) 108.8 85.3
Movement in lease incentives (note 10) (0.6) 7.4
Group total 461.5 286.9
Joint ventures (at share, note 10)
Developments - -
Interest capitalised (note 9) 0.2 -
Investment properties: incremental lettable space - -
Investment properties: no incremental lettable space 11.5 5.7
Movement in lease incentives (1.5) 2.4
Total capital expenditure 471.7 295.0
Conversion from accrual to cash basis (7.7) (12.0)
Total capital expenditure on a cash basis 464.0 283.0
EPRA net initial yield (NIY) and topped-up NIY (alternative performance
measure)
2025 2024
£m
£m
Properties at fair value including joint ventures 2,869.3 2,331.2
Less: properties under development including joint ventures (372.9) (201.5)
Less: residential properties (6.8) (4.7)
Like-for-like investment property portfolio, proposed and completed 2,489.6 2,125.0
developments
Plus: estimated purchasers' costs 181.6 155.0
Grossed-up completed property portfolio valuation (B) 2,671.2 2,280.0
Annualised cash passing rental income1 84.7 85.9
Net service charge expense including joint ventures (4.9) (5.1)
Other irrecoverable property costs including joint ventures (8.9) (7.9)
Annualised net rents (A) 70.9 72.9
Plus: rent-free periods and other lease incentives including joint ventures 16.0 3.9
Topped-up annualised net rents (C) 86.9 76.8
EPRA net initial yield (A/B) 2.7% 3.2%
EPRA topped-up initial yield (C/B) 3.3% 3.4%
1. Annualised passing rental income as calculated by the Group's external
valuers including joint ventures at share.
See note 9 for further detail on EPRA measures which are Alternative
Performance Metrics.
11 Investment in joint ventures
The Group has the following investments in joint ventures:
Equity Balances 2025 2024
£m
with
Total
Total
partners
£m
£m
£m
At 1 April 277.8 213.5 491.3 538.8
Movement on joint venture balances - (5.9) (5.9) (0.9)
Additions - - - 0.1
Share of profit of joint ventures 7.3 - 7.3 9.8
Share of revaluation surplus/(deficit) of joint ventures 14.5 - 14.5 (56.5)
Share of results of joint ventures 21.8 - 21.8 (46.7)
Distributions - - - -
At 31 March 299.6 207.6 507.2 491.3
All of the Group's joint ventures operate solely in the United Kingdom and
comprise the following:
Country of registration 2025 2024
ownership
ownership
The GHS Limited Partnership Jersey 50% 50%
The Great Ropemaker Partnership United Kingdom 50% 50%
The Great Victoria Partnerships United Kingdom 50% 50%
The Group's share in the assets and liabilities, revenues and expenses for the
joint ventures is set out below:
The GHS The Great The Great 2025 2025 2024
Limited
Ropemaker
Victoria
Total
At share
At share
Partnership
Partnership
Partnerships
£m
£m
£m
£m
£m
£m
Balance sheets
Investment property 670.6 259.3 82.0 1,011.9 505.9 481.2
Current assets 0.3 3.8 0.2 4.3 2.1 2.7
Cash and cash equivalents 14.6 3.7 13.4 31.7 15.9 25.7
Balances from partners (207.7) (134.5) (73.1) (415.3) (207.6) (213.5)
Current liabilities (11.7) (11.4) (0.1) (23.2) (11.6) (13.2)
Obligations under head leases - (10.2) - (10.2) (5.1) (5.1)
Net assets 466.1 110.7 22.4 599.2 299.6 277.8
The GHS The Great The Great 2025 2025 2024
Limited
Ropemaker
Victoria
Total
At share
At share
Partnership
Partnership
Partnerships
£m
£m
£m
£m
£m
£m
Income statements
Revenue 24.5 17.6 4.6 46.7 23.4 26.5
Net rental income 19.6 10.2 1.9 31.7 15.9 19.4
Property and administration costs (0.5) (4.5) (1.8) (6.8) (3.4) (3.6)
Net finance costs (8.2) (2.4) 0.3 (10.3) (5.2) (6.0)
Share of profit from joint ventures 10.9 3.3 0.4 14.6 7.3 9.8
Revaluation of investment property 32.0 (6.3) 3.3 29.0 14.5 (56.5)
Results of joint ventures 42.9 (3.0) 3.7 43.6 21.8 (46.7)
At 31 March 2025 and 31 March 2024, the joint ventures had no external debt
facilities.
Transactions during the year between the Group and its joint ventures, which
are related parties, are disclosed below:
2025 2024
£m
£m
Movement on joint venture balances during the year 5.9 0.9
Balances receivable at the year end from joint ventures (207.6) (213.5)
Interest on balances with partners (see note 6) 5.7 5.8
Distributions - -
Joint venture fees paid (see note 3) 2.5 1.7
The joint venture balances are repayable on demand and bear interest as
follows: the GHS Limited Partnership at 4.0% and the Great Ropemaker
Partnership at 2.0%. In measuring expected credit losses of the balances
receivable at the year end from joint ventures under IFRS 9, the ability of
each joint venture to repay the loan at the reporting date if demanded by the
Group is assumed to be through the sale of the investment properties held by
the joint venture. Investment properties are held at fair value at each
reporting date as described in note 10. Therefore, the net asset value of the
joint venture is considered to be a reasonable approximation of the available
assets that could be realised to recover the loan balance and the requirement
to recognise expected credit losses.
The investment properties include £5.1 million (2024: £5.1 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 £500.8
million. 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. See notes 10,
14 and 17 for more information on the valuation of investment properties and
expected credit losses in joint ventures.
At 31 March 2025, the Group had £nil contingent liabilities arising in its
joint ventures (2024: £nil). At 31 March 2025, the Group had capital
commitments in respect of its joint ventures of £nil (2024: £nil).
12 Property, plant and equipment
Right of use Leasehold Fixtures and Total
asset for
improvements
fittings/other
£m
occupational
£m
£m
leases
£m
Cost
At 1 April 2023 4.9 5.6 2.1 12.6
Costs capitalised - - 0.1 0.1
At 31 March 2024 4.9 5.6 2.2 12.7
Costs capitalised - 0.2 0.4 0.6
At 31 March 2025 4.9 5.8 2.6 13.3
Depreciation
At 1 April 2024 4.1 4.5 2.1 10.7
Charge for the year 0.8 0.7 0.2 1.7
At 31 March 2025 4.9 5.2 2.3 12.4
Carrying amount at 31 March 2024 0.8 1.1 0.1 2.0
Carrying amount at 31 March 2025 - 0.6 0.3 0.9
13 Other investments
2025 2024
£m
£m
At 1 April 2.4 1.8
Acquisitions 0.8 0.8
Deficit on revaluation (0.4) (0.2)
At 31 March 2.8 2.4
In January 2020, the Group entered into a commitment of up to £5.0 million to
invest in the Pi Labs European PropTech venture capital fund. At 31 March
2025, the Group had made net investments of £3.3 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. The valuation of the fund is based on the net assets of its
investments, therefore, given these are not readily traded, we have classified
the valuation of the investments as Level 3 as defined by IFRS 13. Key areas
of focus for the fund include sustainability, future of work, future of
retail, commercial real estate technologies, construction technology and
smart cities.
14 Trade and other receivables
2025 2024
£m
£m
Trade receivables 3.8 6.7
Expected credit loss allowance (0.1) (0.3)
3.7 6.4
Prepayments 0.1 0.2
Other taxes 8.4 5.9
Other receivables 8.5 12.4
20.7 24.9
Trade receivables consist of rent and service charge monies, which are
typically due on the quarter day with no credit period. Interest is charged
on trade receivables in accordance with the terms of the customer'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 customer's circumstances. This assessment
reviews the outstanding balances of each individual customer 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.
Of the gross trade receivables of £3.8 million, £1.6 million (2024: £4.4
million) was past due, of which £1.2 million was over 30 days (2024: £1.2
million).
2025 2024
£m
£m
Movements in expected credit loss allowance
Balance at the beginning of the year (0.3) (1.7)
Expected credit loss allowance during the year (0.2) (0.3)
Amounts written-off as uncollectable 0.4 1.7
(0.1) (0.3)
The expected credit loss for the year represents 3% (2024: 5%) of the net
trade receivables balance at the balance sheet date.
15 Trade and other payables
2025 2024
£m
£m
Rents received in advance 15.9 16.4
Accrued capital expenditure 26.0 18.1
Payables in respect of customer rent deposits 18.7 17.0
Other accruals 20.7 23.3
Other payables 4.2 1.4
85.5 76.2
The Directors consider that the carrying amount of trade payables approximates
their fair value.
16 Interest-bearing loans and borrowings
2025 2024
£m
£m
Current liabilities at amortised cost
Unsecured
£175.0 million 2.15% private placement notes 2024 - 175.0
Non-current liabilities at amortised cost
Secured
£21.9 million 5(5)⁄(8)% debenture stock 2029 21.9 22.0
Unsecured
£450.0 million revolving credit facility 149.4 46.1
£150.0 million revolving credit facility 106.4 -
£75.0 million term loan 2026 (2024: £250.0 million) 74.7 248.3
£250.0 million 5.375% sustainable sterling bond 2031 246.5 -
£40.0 million 2.70% private placement notes 2028 40.0 39.9
£30.0 million 2.79% private placement notes 2030 29.9 29.9
£30.0 million 2.93% private placement notes 2033 29.9 29.9
£25.0 million 2.75% private placement notes 2032 24.9 24.9
£125.0 million 2.77% private placement notes 2035 124.4 124.4
Non-current interest-bearing loans and borrowings 848.0 565.4
Total interest-bearing loans and borrowings 848.0 740.4
The Group's £450 million unsecured revolving credit facility (RCF) is
unsecured, attracts a floating rate based on a headline margin of 90.0 basis
points over SONIA (plus or minus 2.5 basis points subject to a number of
ESG-linked targets) and matures in January 2027. In October 2024, the Group
signed a new £150 million ESG-linked RCF at a headline margin of 90 basis
points over SONIA. The facility has an initial three-year term which may be
extended to a maximum of five years at GPE's request, subject to bank consent.
At 31 March 2025, the Group had £343.0 million (2024: £603.0 million) of
undrawn committed credit facilities.
The Group's £250 million unsecured term loan has a headline margin of 175
basis points over SONIA. The loan has an initial three-year term which may be
extended to a maximum of five years at GPE's request, subject to bank consent.
The Group also has a £200 million interest rate cap to protect against any
further increases in rates whilst preserving the benefit of any reductions.
The interest rate cap expires in October 2025. In November 2024, £175 million
of the Group's £250 million term loan was repaid.
In September 2024, the Group issued a sterling denominated senior unsecured
sustainable £250 million bond. The bond has a term of seven years, bears
interest at a rate of 5.375% and is rated Baa2 by Moody's Investor Services
Ltd.
The Group's £175 million 2.15% private placement notes 2024 were repaid on 22
May 2024.
The Group had a £200 million loan facility at a headline margin of 75 basis
points over SONIA, with the margin stepping up by 0.25% after six months, a
further 0.25% after 12 months and a final step-up of 0.50% at 18 months. The
loan was undrawn and cancelled on 30 May 2024.
At 31 March 2025, the Group has committed cash and undrawn credit facilities
of £361.2 million (31 March 2024: £633.4 million). At 31 March 2025,
properties with a carrying value of £114.8 million (31 March 2024: £107.0
million) were secured under the Group's debenture stock.
At 31 March 2025, the nominal value of the Group's interest-bearing loans and
borrowing was £853.9 million (2024: £743.9 million) and the Group had
£343.0 million (2024: £603.0 million) of undrawn credit facilities.
17 Financial instruments
Categories of financial instrument Carrying Amounts Gain/(loss) Carrying Amounts Gain/(loss)
amount
recognised in income
to equity
amount
recognised in income
to equity
2025
statement
2025
2024
statement
2024
£m
2025
£m
£m
2024
£m
£m
£m
Other investments 2.8 (0.4) - 2.4 (0.2) -
Interest rate cap - (0.4) - 0.4 (1.7) -
Assets at fair value 2.8 (0.8) - 2.8 (1.9) -
Balances with joint ventures 207.6 5.7 - 213.5 5.8 -
Trade receivables 20.6 (0.2) - 24.7 (0.1) -
Cash and cash equivalents 36.9 1.5 - 22.9 0.3 -
Assets at amortised cost 265.1 7.0 - 261.1 6.0 -
Trade and other payables (4.2) - - (1.4) - -
Payables in respect of customer rent deposits (18.7) - - (17.0) - -
Interest-bearing loans and borrowings (848.0) (9.6) - (740.4) (15.2) -
Obligations under occupational leases - - - (1.0) - -
Obligations under finance leases (87.0) (3.1) - (74.1) (2.4) -
Liabilities at amortised cost (957.9) (12.7) - (833.9) (17.6) -
Total financial instruments (690.0) (6.5) - (570.0) (13.5) -
Financial risk management objectives
Capital risk
The Group manages its capital to ensure that entities in the Group will be
able to operate on a going concern basis, and as such it aims to maintain an
appropriate mix of debt and equity financing. The current capital structure of
the Group consists of a mix of equity and debt. Equity comprises issued share
capital, reserves and retained earnings as disclosed in the Group statement of
changes in equity. Debt comprises long-term debenture stock, private placement
notes and drawings against committed revolving credit facilities from banks.
The Group aims to maintain a loan-to-property value of between 10-35% (see
note 9). The Group operates solely in the United Kingdom, and its operating
profits and net assets are sterling denominated. As a result, the Group's
policy is to have no unhedged assets or liabilities denominated in foreign
currencies.
Credit risk
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Group. The Group
has a policy of reviewing the financial information of prospective customers
and only dealing with those that are creditworthy and obtaining sufficient
rental cash deposits or third-party guarantees to mitigate financial loss
from defaults. The concentration of credit risk is limited due to the large
and diverse customer base, with no one customer providing more than 10% of the
Group's rental income. Details of the Group's receivables, and the associated
expected credit loss, are summarised in notes 11 and 14 of the financial
statements. The Directors believe that there is no further expected credit
loss required in excess of that provided. The carrying amount of financial
assets recorded in the financial statements, which is net of impairment
losses, represents the Group's maximum exposure to credit risk. The Group's
cash deposits are placed with a diversified range of investment grade banks,
and strict counterparty limits ensure the Group's exposure to bank failure
is minimised.
Liquidity risk
The Group operates a framework for the management of its short-, medium- and
long-term funding requirements. Cash flow and funding needs are regularly
monitored to ensure sufficient undrawn facilities are in place. The Group's
funding sources are diversified across a range of bank and bond markets and
strict counterparty limits are operated on deposits.
The Group meets its day-to-day working capital requirements through the
utilisation of its two revolving credit facilities. The availability of these
facilities depends on the Group complying with a number of key financial
covenants; these covenants and the Group's compliance with them are set out
in the table below:
Key covenants Covenant March 2025
actuals
Group
Net gearing (see note 9) <125% 41.9%
Inner borrowing (unencumbered asset value/unsecured borrowings) >1.66x 2.71x
Interest cover >1.35x 10.9x
The interest rate payable on the Group's revolving credit facilities can vary
dependent on its performance against a number of ESG covenants.
The Group has undrawn credit facilities of £343.0 million and has substantial
headroom above all of its key covenants. As a result, the Directors consider
the Group to have adequate liquidity to be able to fund the ongoing
operations of the business. Under the requirements of IAS 1, given this
substantial headroom on all its key covenants, the Directors consider none of
the non-current liabilities are at risk of being repayable in the next 12
months from the result of a covenant breach.
The following tables detail the Group's remaining contractual maturity on its
financial instruments and have been drawn up based on the undiscounted cash
flows of financial liabilities, including associated interest payments, based
on the earliest date on which the Group is required to pay, and conditions
existing at the balance sheet date:
At 31 March 2025 Carrying Contractual Less than One to Two to More than
amount
cash flows
one year
two years
five years
five years
£m
£m
£m
£m
£m
£m
Non-derivative financial liabilities
£21.9 million 55⁄8% debenture stock 2029 21.9 26.6 1.2 1.2 24.2 -
£450.0 million revolving credit facility 149.4 166.5 9.0 157.5 - -
£150.0 million revolving credit facility 106.4 122.2 5.9 5.9 110.4 -
£75.0 million term loan 2026 74.7 82.0 4.7 77.3 - -
£250.0 million 5.375% sterling bond 2031 246.5 323.7 13.4 13.4 40.3 256.6
Private placement notes 249.1 307.2 7.0 7.0 58.9 234.3
Derivative financial instruments
Interest rate cap - - - - - -
848.0 1,028.2 41.2 262.3 233.8 490.9
At 31 March 2024 Carrying Contractual Less than One to two Two to five More than
amount
cash flows
one year
years
years
five years
£m
£m
£m
£m
£m
£m
Non-derivative financial liabilities
£21.9 million 55⁄8% debenture stock 2029 22.0 27.8 1.2 1.2 25.4 -
£450.0 million revolving credit facility 46.1 58.9 4.2 4.2 50.5 -
£250.0 million term loan 2026 248.3 291.3 17.2 17.2 256.9 -
Private placement notes 424.0 489.6 182.5 7.0 60.0 240.1
Derivative financial instruments
Interest rate cap (0.4) (0.3) (0.2) (0.1) - -
740.0 867.3 204.9 29.5 392.8 240.1
The maturity of lease obligations is set out in notes 18 and 19.
Interest rate risk
Interest rate risk arises from the Group's use of interest-bearing financial
instruments. It is the risk that future cash flows arising from a financial
instrument will fluctuate due to changes in interest rates. It is the Group's
policy to reduce interest rate risk in respect of the cash flows arising from
its debt finance, either through the use of fixed-rate debt or through the use
of interest rate derivatives such as swaps, caps and floors. It is the
Group's usual policy to maintain the proportion of floating interest rate
exposure to between 20-40% of forecast total debt. However, this target is
flexible, and may not be adhered to at all times depending on, for example,
the Group's view of future interest rate movements.
Interest rate caps
Interest rate caps protect the Group from rises in short-term interest rates
by making a payment to the Group when the underlying interest rate exceeds a
specified rate (the 'cap rate') on a notional value. If the underlying rate
exceeds the cap rate, the payment is based upon the difference between the two
rates, ensuring the Group only pays the maximum of the cap rate. At 31 March
2025, the Group's only interest rate derivative was a £200 million interest
rate cap.
Interest rate sensitivity
The sensitivity analysis below has been determined based on the exposure to
interest rates for financial instruments at the balance sheet date, and
represents management's assessment of possible changes in interest rates based
on historical trends. For the floating rate liabilities, the analysis is
prepared assuming the amount of the liability at 31 March 2025 was outstanding
for the whole year:
Impact on profit/(loss) Impact on equity
2025 2024 2025 2024
£m
£m
£m
£m
Increase of 50 basis points (1.7) (0.5) (1.7) (0.5)
Increase of 25 basis points (0.8) (0.2) (0.8) (0.2)
Decrease of 25 basis points 0.8 0.7 0.8 0.7
Decrease of 50 basis points 1.7 1.5 1.7 1.5
Fair value of interest-bearing loans and borrowings
Book value Fair value Book value Fair value
2025
2025
2024
2024
£m
£m
£m
£m
Items carried at fair value
Interest rate cap (asset) - - (0.4) (0.4)
Items not carried at fair value
£21.9 million 55⁄8% debenture stock 2029 21.9 21.8 22.0 22.0
£450.0 million revolving credit facility 149.4 149.4 46.1 46.1
£150.0 million revolving credit facility 106.4 106.4 - -
£75.0 million term loan 2026 (2024: £250.0 million) 74.7 74.7 248.3 248.3
£250.0 million 5.375% sustainable sterling bond 2031 246.5 244.5 - -
Private placement notes 249.1 204.7 424.0 373.3
848.0 801.5 740.0 689.3
The fair values of the Group's private placement notes were determined by
comparing the discounted future cash flows using the contracted yields with
those of the reference gilts plus the implied margins, representing Level 2
fair value measurements as defined by IFRS 13 - Fair Value Measurement. The
fair values of the Group's outstanding interest rate cap has been estimated by
calculating the present value of future cash flows, using appropriate market
discount rates, representing Level 2 fair value measurements as defined by
IFRS 13. 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 following table details the principal amounts and remaining terms of
interest rate derivatives outstanding:
Average contracted Notional Fair value asset
fixed interest rate
principal amount
2025 2024 2025 2024 2025 2024
%
%
£m
£m
£m
£m
Cash flow hedges
Interest rate cap 5.094% 5.094% 200.0 200.0 - 0.4
The Group entered a £200 million interest rate cap (at a cost of £2.1
million) effective from 9 October 2023 and expires in September 2025.
18 Head lease obligations
Head lease obligations in respect of the Group's leasehold properties are
payable as follows:
Minimum Interest Principal Minimum Interest Principal
lease
2025
payments
lease
2024
payments
payments
£m
2025
payments
£m
2024
2025
£m
2024
£m
£m
£m
Less than one year 3.5 (3.5) - 2.9 (2.9) -
Between one and five years 14.2 (14.0) 0.2 11.5 (11.3) 0.2
More than five years 427.4 (340.6) 86.8 358.0 (284.1) 73.9
445.1 (358.1) 87.0 372.4 (298.3) 74.1
19 Occupational lease obligations
Obligations in respect of the Group's occupational leases for its head office
are payable as follows:
Minimum Interest Principal Minimum Interest Principal
lease
2025
payments
lease
2024
payments
payments
£m
2025
payments
£m
2024
2025
£m
2024
£m
£m
£m
Less than one year - - - 1.0 - 1.0
Between one and five years - - - - - -
- - - 1.0 - 1.0
20 Share capital
2025 2025 2024 2024
Number
£m
Number
£m
Allotted, called up and fully paid ordinary shares of 155⁄19 pence
At 1 April 253,867,911 38.7 253,867,911 38.7
Issue of ordinary shares - rights issue 152,320,747 23.3 - -
31 March 406,188,658 62.0 253,867,911 38.7
In June 2024, the Company raised gross proceeds of £350.3 million (£335.6
million net proceeds) by issuing 152,320,747 new ordinary shares through a
three for five rights issue.
At 31 March 2025, the Company had 406,188,658 ordinary shares with a nominal
value of 155⁄19 pence each.
21 Investment in own shares
2025 2024
£m
£m
At 1 April (5.6) (2.8)
Employee share-based incentive charges (4.2) (4.0)
Shares purchased in year 5.7 -
Transfer to retained earnings 2.3 1.2
At 31 March (1.8) (5.6)
The investment in the Company's own shares is held at cost and comprises
2,893,542 shares (2024: 887,159 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 year, 25,912 shares (2024:
no shares) vested to the Directors in respect of the 2021 annual bonus share
plan and 2,032,295 additional shares were acquired by the Trust (2024: no
shares). The fair value of shares awarded and outstanding at 31 March 2025
was £12.0 million (2024: £9.8 million).
Details of the outstanding Long Term Incentive Plan and Restricted Share Plans
are set out below:
Date of Grant/Fair value (pence) At 1 April 2024 Granted Rights issue Vested Lapsed/ At 31 March 2025 Vesting dates
No. of shares
No. of shares
No. of shares
No. of shares
forfeit
No. of shares
No. of shares
Long Term Incentive Plan
7 June 2021/733p 1,339,435 - - - (1,339,435) - 6 June 2024
27 May 2022/645p 1,799,690 - 370,832 - (11,769) 2,158,753 26 May 2025
Restricted Share Plan
7 July 2023/422p 1,101,310 - 226,924 - (14,290) 1,313,944 6 July 2026
24 November 2023/408p 10,283 - 2,118 - - 12,401 23 Nov 2026
20 June 2024/341p - 1,403,461 - - (19,786) 1,383,675 19 June 2027
4,250,718 1,403,461 599,874 - (1,385,280) 4,868,773
22 Cash and cash equivalents
2025 2024
£m
£m
Cash held at bank (unrestricted) 18.2 5.9
Amounts held in respect of customer rent deposits (restricted) 18.7 17.0
36.9 22.9
Amounts held in respect of customer rent deposits are subject to restrictions
as set out in the customers' lease agreement and therefore not available for
general use by the Group.
23 Notes to the Group statement of cash flows
Reconciliation of financing liabilities
1 April New Inflows/ Other 31 March
2024
obligations
(outflows)
non-cash movements
2025
£m
£m
£m
£m
£m
Long-term interest-bearing loans and borrowings 565.4 455.5 (175.0) 2.1 848.0
Short-term interest-bearing loans and borrowings 175.0 - (175.0) - -
Obligations under leases 75.1 12.9 (3.1) 2.1 87.0
815.5 468.4 (353.1) 4.2 935.0
1 April New obligations Inflows/ Other 31 March
2023
£m
(outflows)
non-cash
2024
£m
£m
movements
£m
£m
Long-term interest-bearing loans and borrowings 458.5 248.0 33.5 (174.6) 565.4
Short-term interest-bearing loans and borrowings - - - 175.0 175.0
Obligations under leases 68.7 7.4 (3.3) 2.3 75.1
527.2 255.4 30.2 2.7 815.5
Adjustment for non-cash items
Adjustments for non-cash items used in the reconciliation of cash generated
from/(used in) operations in the Group statement of cash flows' is disclosed
below:
2025 2024
£m
£m
(Surplus)/deficit from investment property (83.2) 267.3
Deficit on revaluation of other investments 0.4 0.2
Employee share-based incentive charge 4.2 4.0
Spreading of lease incentives 1.0 (5.7)
Share of results of joint ventures (21.8) 46.7
Depreciation 1.7 1.6
Other (0.7) (0.7)
Adjustments for non-cash items (98.4) 313.4
24 Dividends
2025 2024
£m
£m
Dividends paid
Interim dividend for the year ended 31 March 2025 of 2.9 pence per share 11.8 -
Final dividend for the year ended 31 March 2024 of 7.9 pence per share 20.0 -
Interim dividend for the year ended 31 March 2024 of 4.7 pence per share - 11.9
Final dividend for the year ended 31 March 2023 of 7.9 pence per share - 20.0
31.8 31.9
A final dividend of 5.0 pence per share was approved by the Board on 20 May
2025 and, subject to shareholder approval, will be paid on 7 July 2025 to
shareholders on the register on 30 May 2025. The dividend is not recognised as
a liability at 31 March 2025. The 2024 final dividend and the 2024 interim
dividend are included within the Group statement of changes in equity.
25 Lease receivables
Future aggregate minimum rentals receivable under non-cancellable leases are:
2025 2024
£m
£m
The Group as a lessor
Less than one year 76.6 66.0
Between two and five years 147.1 141.0
More than five years 65.8 62.9
289.5 269.9
The Group leases its investment properties under operating leases. The
weighted average length of lease at 31 March 2025 was 3.0 years (2024: 3.4
years). All investment properties, except those under development, generated
rental income, and £nil contingent rents were recognised in the year (2024:
£nil).
26 Employee benefits
The Group operates a UK-funded approved defined contribution plan. The Group's
contribution for the year was £2.0 million (2024: £1.8 million). The Group
also contributes to a defined benefit final salary pension plan (the Plan),
the assets of which are held and managed by trustees separately from the
assets of the Group. The Plan has been closed to new entrants since
April 2002, and will close to further accrual from 1 April 2025. The duration
of the Plan is 14 years. The most recent actuarial valuation of the Plan was
conducted at 1 April 2023 by a qualified independent actuary using the
projected unit method. The Plan was valued using the following key actuarial
assumptions:
2025 2024
%
%
Discount rate 5.80 4.90
Expected rate of salary increases 4.10 4.10
RPI inflation 3.10 3.10
Rate of future pension increases 2.90 2.90
Life expectancy assumptions at age 65:
2025 2024
Years
Years
Retiring today age 65 - male: female 23:25 23:25
Retiring in 25 years (age 40 today) - male:female 25:27 25:27
Changes in the present value of the pension obligation are as follows:
2025 2024
£m
£m
Defined benefit obligation at 1 April 25.9 26.9
Service cost 0.2 0.2
Past service cost (0.4) -
Interest cost 1.2 1.2
Effect of changes in demographic assumptions 0.5 (1.9)
Effect of changes in financial assumptions (2.7) (0.5)
Effect of experience adjustments - 1.3
Benefits paid (1.1) (1.3)
Present value of defined benefit obligation at 31 March 23.6 25.9
Changes to the fair value of the Plan assets are as follows:
2025 2024
£m
£m
Fair value of the Plan assets at 1 April 30.8 31.0
Interest income 1.5 1.5
Actuarial loss (3.1) (1.0)
Employer contributions 0.3 0.6
Benefits paid (1.1) (1.3)
Fair value of the Plan assets at 31 March 28.4 30.8
Net pension asset 4.8 4.9
The loss recognised immediately in the Group statement of comprehensive income
was £0.8 million (2024: £0.1 million gain).
The amount recognised in the balance sheet in respect of the Plan is as
follows:
2025 2024
£m
£m
Present value of unfunded obligations (23.6) (25.9)
Fair value of the Plan assets 28.4 30.8
Pension asset 4.8 4.9
Amounts recognised as administration expenses in the income statement are as
follows:
2025 2024
£m
£m
Service cost (0.2) (0.2)
Past service cost 0.4 -
Net interest income 0.3 0.3
0.5 0.1
All equity and debt instruments have quoted prices in active markets. The fair
value of the Plan assets at the balance sheet date is analysed as follows:
2025 2024
£m
£m
Cash 0.1 0.1
Equities 1.2 1.6
Bonds 25.8 27.6
Derivatives 1.3 1.5
28.4 30.8
Other than market and demographic risks, which are common to all retirement
benefit schemes, there are no specific risks in the relevant benefit schemes
which the Group considers to be significant or unusual. Details on two of the
more specific risks are below:
Changes in bond yields
Falling bond yields tend to increase the funding and accounting liabilities.
However, the investment in corporate and government bonds offers a degree of
matching, i.e. the movement in assets arising from changes in bond yields
partially matches the movement in the funding or accounting liabilities. In
this way, the exposure to movements in bond yields is reduced.
Life expectancy
The majority of the obligations are to provide a pension for the life of the
member on retirement, so increases in life expectancy will result in an
increase in the liabilities. The inflation-linked nature of the majority of
benefit payments increases the sensitivity of the liabilities to changes in
life expectancy.
The effect on the defined benefit obligation of changing the key assumptions,
calculated using approximate methods based on historical trends, is set out
below:
2025 2024
£m
£m
Discount rate -0.50% 25.2 26.9
Discount rate +0.50% 22.3 25.1
RPI inflation -0.25% 23.4 25.6
RPI inflation +0.25% 24.0 26.3
Post-retirement mortality assumption - one year age rating 24.6 26.9
Given the Plan surplus, the Group has agreed to pause contributions to the
Plan. Accordingly, the Group expects to contribute £nil (2024: £nil) to the
Plan in the year ending 31 March 2026. The expected total benefit payments for
the year ending 31 March 2026 is £1.0 million, rising to around £1.2 million
per annum over the next five years. A total of around £6.9 million is
expected to be paid over the subsequent five-year period.
27 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 155⁄19 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 buyback 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.
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 certain non-cash items (including our share of joint
ventures): lease 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 and other operating
metrics 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 Group's
valuers at each balance sheet date.
Fair value - investment property
The amount as estimated by the Group'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.
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 services and running of the
workplace in one monthly bill.
Flex space partnerships
Revenue share agreements with flexible space operators; these are typically
structured via lease arrangements with the revenue share recognised within
rental income.
Full repairing and Insuring (FRI) lease
In an FRI lease, the customer is responsible for managing the space they
occupy, including all costs associated with repairing and maintaining the
property, as well as obtaining insurance coverage.
IFRS
United Kingdom adopted international accounting standards.
Internal rate of return (IRR)
The rate of return that, if used as a discount rate and applied to the
projected cash flows, would result in a net present value of zero.
Like-for-like (Lfl)
The element of the portfolio that has been held for the whole of the period
of account.
MSCI
Morgan Stanley Capital International (MSCI) is a company that produces an
independent benchmark of property returns.
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).
MSCI central London
An index, compiled by MSCI, of the central and inner London properties in
their March annual valued universes.
Net assets per share or net asset value (NAV)
Equity shareholders' funds divided by the number of ordinary shares at the
balance sheet date.
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 at nominal value plus obligations under occupational
leases less short-term deposits and cash as a percentage of equity
shareholders' funds adjusted for value of the Group's pension scheme,
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 purchasers' costs.
Net rental income
Gross rental income adjusted for the spreading of lease incentives less
expected credit losses for rental income and ground rents.
Non-PIDs
Dividends from profits of the Group's taxable residual business.
Property costs
Service charge and Fully Managed services income less service charge expenses,
Fully Managed services cost, other property expenses and expected credit
losses for service charges.
Property Income Distributions (PIDs)
Dividends from profits of the Group's tax-exempt property rental business.
PMI
Purchasing Managers Index.
REIT
UK Real Estate Investment Trust.
Rent roll
The annual contracted rental income.
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 purchasers' costs and contracted
uplifts from tenant incentives.
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 Accounting Return (TAR)
The growth in EPRA NTA per share, on pro forma basis, plus ordinary dividends
paid, expressed as a percentage of EPRA NTA per share at the beginning 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.
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.
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 purchasers' 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.
EPRA vacancy rate
The element of a property which is unoccupied, expressed as the ERV of the
vacant space divided by the ERV of the total portfolio, excluding
committed developments.
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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