REG - Great Portland Ests. - Executing our growth strategy
21/05/2026 07:00
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RNS Number : 1738F Great Portland Estates PLC 21 May 2026
21 May 2026
Executing our growth strategy
The Directors of Great Portland Estates plc announce the results for the Group
for the year ended 31 March 2026(1), with highlights including:
Toby Courtauld, Chief Executive, said: "I am pleased to report on a year of
numerous operational successes. Despite the multiple macro-economic and
geopolitical uncertainties overshadowing London's economy, we delivered many
of the core components of our contra-cyclical strategy, beating expectations;
record levels of leasing significantly ahead of rental values, opportunistic
acquisitions at a discount, £0.5bn of asset sales at a premium and the
completion of some of the highest quality spaces in our capital city, into a
severely undersupplied market. Consequently, EPS was up by 63% and net assets
grew by 6.1%, with development values up 22%.
Whilst the external environment remains volatile, we are well positioned to
build on this momentum; demand for our premium HQ and Flex spaces is strong
and our pipeline is long, concentrated in the most sought-after, core
locations. As a result, we remain confident we can deliver a cost of capital
beating outcome for the forthcoming financial year and substantial income and
value growth over the medium term."
Record leasing year
· 88 new leases and renewals generating annual rent of £70.9 million
p.a.; 10.3% above March 2025 ERV(2)
· Rent roll up 46%(3); further organic growth potential of 95%
· FY'27 rental growth guidance of 4.0% to 7.0%; prime offices 4.0%
to 8.0%
Valuation up 4.3%(3); EPRA(4) NTA per share of 524 pence up 6.1%; EPRA EPS up
63.5%
· Portfolio valuation of £3.0 billion, up 4.3%(3); +5.4% offices;
developments +22.2%
· Rental values up by 5.8%(3) (6.3% offices (7.2% prime) & 1.6%
retail); yield expansion of 11 bp
· IFRS NAV and EPRA(4) NTA per share of 524 pence(5), up 6.1% since
March 2025
· IFRS profit after tax of £154.5 million
· EPRA(4) earnings £34.5 million, EPRA(4) EPS 8.5 pence(5), up
63.5%; total dividend increased to 8.2p per share
· ROE of 7.9% over last 12 months; good progress to 10%+ ROE target
for FY27
Successful capital recycling; £490 million of sales ahead of book value
· Four disposals for £490 million, 2.3% ahead of March 25 book
value; £1,251 per sq ft capital value
· Two accretive acquisitions; £69 million, adding to our Fitzrovia
cluster, only £592 capital value psf
· £200 million of sales under consideration; potential for further
£1.0+ billion over the medium term
Significant progress across development and refurbishment programme
· 2 Aldermanbury Square, EC2 completed, on time and budget, 100%
pre-let
· Good progress at five on-site development and refurbishment
schemes, £223 million capex to come
- Three on-site HQ schemes now c.50% pre-let including CD&R
& Quantexa lettings in year
- Two Fully Managed refurbishments, including commitment to The
Howlett, Gresse Street, W1
· Three Fully Managed deliveries in year (c.77,000 sq ft); strong
leasing progress
· Further three pipeline HQ schemes, planning secured at St Thomas
Yard, SE1; total capex £367 million
· Combined expected surplus of £131 million, assuming current rents
and yields, and allowances for construction cost inflation; £260 million with
10% rental growth
Significant liquidity and optionality; new £525 million RCF and LTV 28.6%
· New five year £525 million RCF signed in October, headline margin
105 bps over SONIA
· GPE's Baa2 long-term issuer rating confirmed by Moody's Ratings
· EPRA LTV 28.6%, cash & undrawn facilities £412 million ;
weighted avg. debt maturity of 5.4 years
Delivering exceptional customer experience and sustainable spaces
· Industry leading NPS of +29.7 (+49.1 Fully Managed); award-winning
Customer Experience team
· Customer retention 76%; AI-led businesses now c.11% of the
portfolio (27% of Fully Managed spaces)
· Two internal promotions to Executive Committee to elevate strategic
focus on Flex and customer experience
(1) All values include share of joint ventures unless otherwise stated (2)
Leasing in period to 31 March 2026 (3) On a like-for-like basis (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
consensus NTA: 523p, EPS 7.9p. Visible Alpha: NTA 522p, EPS 7.9p.
Great Portland Estates plc +44 (0) 20 7647 3000
Toby Courtauld, Chief Executive
Jayne Cottam, Chief Financial 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 10.00am today with the link
available at:
https://brrmedia.news/GPE_FY26 (https://brrmedia.news/GPE_FY26)
A conference call facility will also be available to listen to the
presentation at 10.00am today on the following numbers:
UK-Wide: +44 (0) 33 0551 0200
Quote: GPE FY2026 (if prompted)
A video interview with Toby Courtauld and Jayne Cottam 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) provided by Equiniti Financial Services
Limited 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 19 June 2026.
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.
Statement from the Chief Executive
Please see accompanying graphics
(http://www.rns-pdf.londonstockexchange.com/rns/1738F_1-2026-5-20.pdf) (see
appendix 1)
We have delivered an excellent year, underpinned by record leasing across our
premium HQ and Flex spaces. Despite ongoing macro-economic and geopolitical
volatility, demand for the highest-quality space in London continues
to deepen while supply remains constrained, and our well-timed pipeline of
best-in-class buildings positions GPE for continued growth. With customers
increasingly targeting premium space, we expect these conditions to keep
driving rents higher, with rental growth of 4% to 7% anticipated next year
and 4% to 8% for prime offices.
Our strategy is based on a clear investment case built on six fundamental
pillars supported by our strong track record:
Prime central London
As the largest city economy in Europe, London continues to outperform the
wider UK, with office-based jobs expected to reach 2.7 million by 2030, up by
around 30% compared with pre-pandemic levels. It remains a leading global
financial centre, supported by Europe's largest tech ecosystem and world
leading sustainable finance expertise. London is also the top European
destination for financial services foreign direct investment. With deep pools
of talent, unmatched connectivity, a transparent legal system, and a
concentration of global corporates, it offers a resilient and compelling
centre for global capital. Our commitment to prime central London therefore
remains absolute.
Premium spaces
We only invest in and create, premium, luxury workspace because it benefits
from the deepest and most resilient customer demand. Across both our HQ and
Flex products, high quality space consistently outperforms, as proven by our
record leasing year, in which we completed £70.9 million in annual rent
consistently beating the valuers' ERV. Furthermore, premium office rents in
London continue to exhibit price inelasticity, suggesting that, even as we
anticipate further rental growth, these spaces remain both attractive and
affordable for our customers and a compelling and durable driver of value.
Our focus on prime has supported our continued growth in Flex. We delivered
three Fully Managed buildings at 141 Wardour Street, W1, 170 Piccadilly, W1
and 19 Wells Street, W1, providing 76,900 sq ft of high quality space.
Leasing has been exceptional, particularly at 141 Wardour Street, which let
within two months of launch and well ahead of underwriting assumptions. We
have also commenced the refurbishment of The Courtyard, WC1 and The Howlett,
W1. With 654,000 sq ft now committed, the performance of our Flex portfolio
underpins our ambition to reach one million sq ft of Fully Managed
space.
Our HQ development programme also progressed well. We completed
2 Aldermanbury Square, EC2 for Clifford Chance and committed to the
refurbishment of Whittington House, W1, due to complete in spring 2027. We now
have three schemes on-site and they are leasing well. At 30 Duke Street, SW1,
we pre-let all of the offices to CD&R, and remain on track to deliver the
building in Q3 this year, supporting a projected 37% profit on cost. At The
Delft, SE1, our successful pre-letting of 52,300 sq ft to Quantexa secured
well ahead of the valuers' ERV, maintained a healthy development margin,
despite an increase in development costs.
Taken together, our refurbishment and development programme is one of the
largest in the sector relative to owned assets and is well timed to deliver
premium space into a period of constrained supply.
Contra-cyclical approach
Our approach to capital allocation remains deliberately contra-cyclical. We
raise capital and buy when markets are dislocated, as we did through 2009 and
2012 and most recently with our rights issue in 2024, positioning ourselves
ahead of what we anticipate will be rising rents and values. Since that rights
issue, we have deployed around £0.5 billion including capex into high quality
acquisitions, deepening our pipeline of premium HQ and Fully Managed spaces.
As planned, we have recently taken advantage of strengthening prices for
prime, stabilised assets selling £490 million at an average 2% premium to
book value, including the largest West End transaction in 2025 at 1 Newman
Street, W1. This disciplined buy, build, sell approach enables us to
crystallise value through the cycle and, should it generate capital that is
excess to our needs, return it to shareholders.
Driving innovation
We are recognised as leaders in both sustainable development and customer
experience. Sustainability sits at the centre of how we design, build and
operate, reflected in our long-standing focus on low embodied carbon
development, adaptive reuse and rigorous energy performance standards.
We have embedded circular economy principles across recent projects, including
a world first where reused steel from City Place House, EC2 was incorporated
into the new development at 2 Aldermanbury Square and formed the majority of
the new structure at 30 Duke Street, SW1.
Our award-winning customer experience offer also continues to strengthen. With
a high Net Promoter Score of +29.7 across our offices, rising to +49.1 for
Fully Managed spaces, our Customer Experience team plays a central role in
shaping this differentiated offer and maintaining our market-leading
proposition.
Low leverage; strong balance sheet
We have a long-standing record of maintaining low leverage through the cycle,
reflecting our disciplined approach to financial risk. Today, leverage remains
low with LTV at 28.6%, well within our through the cycle target range of 10%
to 35%, an appropriate level given our current operational risk profile. This
disciplined capital management underpins our financial strength, enabling us
to invest through the cycle, preserve resilience and move quickly on
opportunities as they arise.
Strong EPS and NTA growth
Our occupational markets have remained strong, with prime rents continuing to
rise as premium space becomes increasingly scarce. This, together with our
leasing successes helped lift our rent roll to £153.6 million, up 46% on a
like-for-like basis. Investment markets have recovered from their lows, with
yields broadly flat. Together with our activities, this supported
a year-on-year uplift in property values, with the portfolio up 4.3%. This
valuation growth increased IFRS net asset value and EPRA net tangible assets
per share by 6.1%. Including the ordinary dividend of £31.9 million, our
Return on Equity (ROE) was 7.9%. IFRS profit after tax for the year was
£154.5 million, reflecting portfolio revaluation gains. EPRA earnings
increased significantly to £34.5 million, delivering diluted EPRA earnings
of 8.5 pence per share, up 63.5%.
Given our ambitious strategy, we expect increases in both income and
valuations from here. Our programme is forecast to generate surpluses of £131
million based on current rents and yields, with upside from rental growth. The
new space we create will generate meaningful new rent roll, supporting organic
income growth of 95% over the medium term. Including our progressive dividend,
we remain confident we can deliver a medium-term return on equity of more than
10%, and close the share price discount to the underlying value of the
business.
Our portfolio
Please see accompanying graphics (see appendix 2 and 4)
Prime spaces outperforming
The valuation of our portfolio, including our share of joint ventures,
increased over the 12 months by 4.3% on a like-for-like basis, to £2,955.8
million at 31 March 2026.
The key drivers behind the Group's valuation increase for the year, including
joint ventures at share, were as follows:
· Our Fully Managed portfolio valuation increased by 4.4% in the 12
months on a like-for-like basis with our five Flex refurbishment projects,
including three that completed in the year, up 7.8% on a like-for-like basis,
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 5.8% on a like-for-like basis, with our
office portfolio up by 6.3% and our prime offices up even higher by 7.2%. ERVs
in our retail portfolio increased by 1.6%;
· Higher investment yields - given the backdrop of higher interest
rates, equivalent yields increased marginally by 11 basis points (2025: 12
basis points) during the year (office: +9 basis points; retail: +18 basis
points). At 31 March 2026, the portfolio true equivalent yield was 5.6%;
· HQ development values up - the valuation of our three committed HQ
development properties increased by 22.2% on a like-for-like basis to £402.3
million during the year, supported by our successful pre-leasing activity; and
· Portfolio management - we delivered a record leasing year, with
103 new leases, rent reviews and renewals completed, and new lettings 10.3%
ahead of the March 2025 ERV. This secured £88.0 million (our share) of annual
income, supporting the valuation over the year. At 31 March 2026, the
portfolio was 7.6% reversionary.
Including rent from leases currently in rent-free periods, the adjusted
initial yield of the investment portfolio at 31 March 2026 was 4.8%, 100 basis
points higher than the start of the financial year, given the completion of 2
Aldermanbury Square, EC2 which was 100% pre-let.
Whilst the overall valuation increased by 4.3% during the year on a
like-for-like basis, elements of the portfolio continued to show greater
variation:
· Overall our office portfolio valuation increased by 5.4% (supported
by the strong performance of our Fully Managed office space +4.4%),
outperforming the Group's retail space which was down 2.1% due in part to
yield expansion on shorter leasehold properties;
· Short leasehold properties (<100 years), which represent around
4% of the portfolio, reduced in value by 7.2% compared to an increase of 4.8%
in the rest of the portfolio, as investor demand for shorter leasehold assets
remained low;
· 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 5.9% compared to those with a capital value per sq ft
of less than £1,000 per sq ft which only increased by 0.2%; and
· Buildings with better sustainability credentials continued to
outperform. Buildings with an EPC rating of A or B increased in value by 6.4%,
outperforming properties with an EPC of C or D which decreased by 0.9% in the
year.
Our joint venture properties increased in value by 4.5%, on a like-for-like
basis over the year, driven by the strong performance of our prime mixed-use
Hanover Square site, marginally offset by cost increases on the office
refurbishment of 200 Gray's Inn Road, WC1. Our wholly-owned portfolio
increased by 4.3% on a like-for-like basis.
Our development activities and capex programme
With occupational markets remaining supportive and new supply severely
constrained, we anticipate a significant supply shortage with only 2.9 million
sq ft of new speculative space expected to be delivered annually over the next
four years, against annual take-up of around 4.5 million sq ft. Our £590
million development programme is perfectly positioned to meet this imbalance,
creating premium, highly sustainable HQ and Fully Managed spaces. In total, we
expect these schemes to deliver development surpluses of £131 million, with
further upside should rental growth strengthen.
Major HQ completion
2 Aldermanbury Square, EC2, our fully pre-let 321,650 sq ft HQ development,
completed in March 2026. The 13-storey building provides premium City
workspace with a double-height reception, flexible floorplates, generous
public realm and a panoramic roof terrace, all within a short walk of
Moorgate, Liverpool Street and Bank stations.
Working closely with our supply chain partners, GPE has delivered
market-leading sustainability performance, achieving embodied carbon of 561
kgCO₂e/m² (RICS v1 inc. Cat A target), embracing the circular economy and
delivering our first BREEAM 'Outstanding' building. With the building now
complete, Clifford Chance, which has pre-let all the office space, has taken
occupation to begin its fit-out.
Three HQ schemes on site
At 30 Duke Street St James's, SW1, the building has now topped out, with both
the stone cladding and mansard roof complete. Our office-led redevelopment
will deliver 70,500 sq ft of new Grade A space (up from 54,700 sq ft), all of
which we pre-let to CD&R in May 2025, at rents well above underwriting,
making it one of our stand-out performers of the year. The completed building
will offer column-free floorplates, high-spec amenities including a wellness
suite, private upper-floor terraces and a communal roof terrace with panoramic
views, alongside innovative material reuse to deliver top-tier sustainability
credentials.
We have £16 million of costs to come, and expect the scheme to deliver a
profit on cost of 37.1%, an ungeared IRR of 30.5%, and a development yield of
7.2%, with completion due in Q3 2026.
At The Delft, SE1 (formerly Minerva House), our transformative refurbishment
of this prominent island site will deliver 143,000 sq ft of premium Ready to
Fit office space. Structural works are complete, the building topped out in
October 2025, and façade installation is progressing. Our sustainability and
circular economy initiatives to date include using river barges to remove
materials and waste, eliminating more than 640 HGV journeys, retaining over
70% of the existing structure to reduce the need for new ground works, and
recovering 30 tonnes of glass for reuse.
The redesigned building will offer extensive River Thames frontage and a 6,000
sq ft communal roof terrace with panoramic views. During the year, we pre-let
52,300 sq ft to Quantexa, a global data, analytics and AI software company,
materially ahead of the valuers' ERV. Completion is expected in Q2 2027.
During the year, due to complexities discovered on site and insolvencies in
the supply chain, the forecast cost of the scheme increased by £14 million.
Following this increase, and taking into account the positive impact of the
pre-let to Quantexa, we anticipate the scheme will deliver a profit on cost of
20.7%, an ungeared IRR of 12.0% and a development yield of 7.6%.
At Whittington House, WC1, Camden Council granted planning permission in
November 2025 for the 74,800 sq ft refurbishment to deliver new Grade A
offices. GPE committed to the scheme in March 2026, and works have now
commenced.
Once complete, the development will provide eight floors of sustainable HQ
workspace with market-leading amenities, including a new rooftop terrace and
pavilion overlooking the newly pedestrianised Alfred Place. The scheme
prioritises circular economy principles, retaining a high proportion of the
existing structure and façade. Completion is expected in Q2 2027.
In total, across our three on-site HQ schemes, we have £116 million of
committed expenditure still to invest and an anticipated development surplus
of £34 million to come, based on today's rents and yields, or £58 million
assuming a further 10% rental growth.
Three schemes in next phase
Beyond our three committed schemes, we have a further three HQ schemes in
the pipeline.
In October 2025, Southwark Council resolved to grant planning permission
for the high quality redevelopment of St Thomas Yard, SE1. Our
retrofit-first proposals, will retain and reuse the existing structure of this
1980s building, significantly reducing embodied carbon and waste, and add five
storeys to create an 11-storey office building with balconies and extensive
landscaped roof terraces. Across the site, the total net area will increase
from approximately 100,000 sq ft to 186,800 sq ft. The redevelopment will
insert a new modern entrance between the retained elements of the façade on
St Thomas Street, and will restore the listed Georgian terrace. The earliest
the development could commence is summer 2026, with a 30-month construction
programme.
At One Chapel Place, W1, which we acquired last year, we continue to work on
improvements to the design with plans to materially increase the scale of the
building on this prime West End site and aim to achieve planning permission
ahead of vacant possession of the building in 2028. Given the building's
proximity to Oxford Street, we have commenced early discussions with the newly
established Oxford Street Development Corporation on our proposals.
At our Soho Square Estate, W1, located at the eastern end of Oxford Street
and backing onto Soho Square, we have secured an amended planning permission
to deliver a best-in-class HQ office building fronting onto Soho Square with
flagship retail on Oxford Street, arranged over basement, lower ground, ground
and eight upper floors, with multiple private terraces and a communal roof
terrace. Securing neighbourly agreements is taking longer than expected and to
preserve optionality we are drawing up proposals for an exciting refurbishment
option to deliver Fully Managed space. We will shortly be applying for
planning, which will be within the consented envelope, in order that we are
ready to start on either option later this year.
In total, our three committed and three pipeline schemes are expected to
deliver 601,300 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 £484 million of
anticipated capital expenditure to complete.
Three Fully Managed buildings completed in year
In July 2025, we completed 141 Wardour Street, W1, a beautifully restored Art
Deco building providing 33,700 sq ft of newly refurbished office and retail
space. Workspaces range from 2,300 to 4,600 sq ft across six floors,
complemented by a roof terrace with panoramic views over Soho, an on-site gym,
secure cycle storage and distinctive communal areas. Leasing momentum has been
exceptional, with the entire building let within two months of launch at an
average rent of £279 per sq ft.
In September 2025, we completed the comprehensive refurbishment of 170
Piccadilly, W1, a Grade II-listed building offering 27,800 sq ft of Fully
Managed space across seven floors. With workspaces from 800 sq ft to 4,500 sq
ft, the building features a generous communal lounge, boardroom and club
space, a landscaped terrace, cycle storage and showers. To date, the building
is 73% let or under offer.
Given the premium nature of the space, together with its prestigious location,
we achieved average rents of £294 per sq ft, the highest achieved across our
portfolio.
At 19 Wells Street, W1, we completed the refurbishment of the basement and
ground-floor, transforming the arrival experience and creating premium amenity
space. Since completion, we have leased 15,200 sq ft at an average rent of
£244 per sq ft, representing a 14% uplift on pre-refurbishment levels.
Two further Fully Managed schemes on-site
During the year, construction works commenced at The Courtyard, WC1 on Alfred
Place, just a short walk from the Tottenham Court Road Elizabeth line station.
The Courtyard comprises 63,800 sq ft of office and partially let retail space,
with the office space being refurbished to deliver our Fully Managed offer.
The scheme will provide best-in-class workspaces, high quality amenities, a
generous roof terrace and reconfigured, modern retail space. Refurbishment is
expected to complete in Q3 2027, with £51 million of capex remaining.
At The Howlett, W1 (previously 7/15 Gresse Street), planning consent for the
high quality Fully Managed refurbishment was granted by Westminster Council in
September 2025. Following this, we secured a new long-term head lease,
extending the term to 2148 and enabling the comprehensive redevelopment of the
building. Located in the heart of Fitzrovia and within easy walking distance
of Tottenham Court Road and the Elizabeth line, the scheme will deliver
beautifully designed, sustainable offices with high quality amenities and
attractive communal spaces. Works are expected to complete in Q1 2027.
How we are positioned
In total, our HQ development and Flex capex programme provides a compelling
platform for organic growth. Across our on-site and pipeline schemes, we
expect to deliver 0.7 million sq ft of well-designed, tech-enabled and highly
sustainable space into a market where the supply of new, high quality
buildings remains increasingly scarce. Despite upwards pressure on costs,
based on current rents and yields, these schemes are anticipated to generate
around £131 million of profit to come, with the potential to rise to
approximately £260 million assuming 10% rental growth. Together, they
represent a significant driver of the Group's future income and value
creation.
Our leasing and Flex activities
We have delivered a record-breaking leasing year, underlining the premium
quality of the space we are delivering, the consistently high standards of
service we provide and the underlying strength of our leasing markets. We
signed £70.9 million of new leases, beating March 2025 rental values by
10.3%. This also included landmark pre-lets at The Delft, SE1 and 30 Duke
Street, SW1 to Quantexa and CD&R respectively, reinforcing strong demand
from global occupiers for our high quality, sustainable workspaces.
During the year, our rental values increased by 5.8% across the portfolio,
delivering growth in line with last year's rental growth guidance of between
4.0% and 7.0%. Against a market constrained by a lack of new, Grade A supply,
offices continued to outperform retail with like-for-like office rental values
increasing by 6.3% compared with a 1.6% increase for retail space. Within our
office portfolio, our Fully Managed rental values increased by 4.9% on a
like-for-like basis, reflecting sustained demand for high quality, flexible
workspace.
The key leasing highlights for the year included:
· 88 new leases and renewals completed (2025: 74 leases), generating
annual rent of £70.9 million (our share: £69.6 million; 2025: £32.6
million), with market lettings 10.3% ahead of the valuers' 31 March 2025 ERV;
· 65 Flex leases signed, 11 Fitted and 54 Fully Managed, achieving an
average rent of £237 per sq ft and 7.7% ahead of March 2025 ERV on the Fully
Managed space;
· 17 new retail leases signed, securing £5.8 million of rent with
market lettings 4.8% ahead of March 2025 ERV;
· 15 rent reviews securing £30.5 million of annual rent (our share:
£18.4 million; 2025: £7.4 million) were settled at an increase of 30.1% over
the previous rent and 9.0% ahead of ERV at review date. This included settling
the rent reviews for KKR and Glencore at Hanover Square, W1;
· total space covered by new lettings, reviews and renewals was
712,900 sq ft (2025: 359,800 sq ft);
· the Group's vacancy rate held at 6.0% (2025: 5.9%) reflecting the
strong leasing momentum and customer retention in an undersupplied market;
· the Group's rent roll increased by 46% on a like-for-like basis to
£153.6 million following our successful leasing (not including the pre-lets
at The Delft, SE1 and 30 Duke Street, SW1) and commencement of the Clifford
Chance lease at 2 Aldermanbury Square, EC2; and
· of the 83 leases with breaks or expiries in the 12 months to 31
March 2026, 88% were retained (76%), re-let, or placed under offer (by area),
leaving only 24,025 sq ft still to transact.
Our leasing performance this year confirms that customers are increasingly
targeting only premium, sustainable space, particularly where higher service
levels and flexibility are offered. This structural tailwind, combined with a
growing shortage of such space, leaves us well positioned. Reflecting the
strength of leasing and rental performance across the portfolio, we maintain
positive rental growth guidance for the year to 31 March 2027 of 4.0% to 7.0%,
rising to 4.0% to 8.0% for the very best space.
Fully Managed: significant activity and returns
Our differentiated Flex offer underpinned our record leasing year. Total Flex
leasing across the GPE portfolio covered 206,800 sq ft, with £43.7 million of
new leases in the year at 7.5% ahead of March 2025 ERV.
At 141 Wardour Street, W1, we achieved full occupancy, including the retail
unit, just two months after the 33,700 sq ft building launched in July 2025,
underscoring the strong demand for our premium, service-led workspaces. As a
result, the building will deliver £4.4 million in annual rent, at an average
of £279 per sq ft, some 13.3% above the March 2025 ERV.
In September 2025, we launched the completed refurbishment at 170 Piccadilly,
W1 and, given the premium nature of the space and its prestigious location,
leasing activity has been strong. 73% of the building is already let or under
offer, generating £5.4 million in annual rent at an average rent of £294 per
sq ft, 9.0% above the March 2025 ERV.
At City Tower, EC2, all 28,700 sq ft of Fully Managed space in phase one of
the building's repositioning is now fully let or under offer. Once complete,
these lettings are expected to deliver £5.3 million in annual rent at an
average of £186 per sq ft, representing a 6.6% beat to the March 2025 ERV.
Demand for GPE's Fully Managed spaces in prime locations has never been
stronger. Confidence remains high for leasing the remainder of 170 Piccadilly,
W1, and the second phase of leasing to come at City Tower, EC2, comprising of
19,900 sq ft of high quality, well-connected workspace.
Our Flex space: targeting one million sq ft
The exceptional leasing momentum across our Flex portfolio reinforces our
ambition to reach one million sq ft of Flex space. During the year, we
increased our committed Flex offering across the portfolio to a total of
654,000 sq ft, representing c.31% of our offices and c.24% of the total
portfolio.
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. Looking forward, we have two Fully
Managed schemes on-site at The Courtyard, WC1, and The Howlett, W1 (previously
7/15 Gresse Street), both due to complete in the first half of 2027, which
together will deliver 106,600 sq ft of Flex space.
Ready to Fit: £21.5 million of deals driven by pre-lets
We completed six Ready to Fit deals during the year, securing £21.5 million
of rent, beating the March 2025 ERV by 17.4%. This included two significant
pre-lets at our on-site developments.
In May 2025, we announced the pre-let of the entirety of the office space
(62,300 sq ft) at 30 Duke Street, SW1 to leading global investment firm
CD&R. The lease is for a 15-year term without break and at rents some 6.5%
ahead of March 2025 ERV.
In February 2026, we announced the pre-let of 52,300 sq ft at The Delft, SE1
(formerly Minerva House) to Quantexa, a global data, analytics, and AI
software company pioneering Decision Intelligence technology, further
strengthening our customer base in this sector. The lease is for a ten-year
term, at rents significantly ahead of the valuers' ERV. Quantexa will occupy
the ground floor East, first floor East, and the fifth, sixth and seventh
floors.
Given our success at leasing space well ahead of building completion, we
remain positive for the leasing prospects of our remaining development
programme.
Retail: £5.8 million of deals, strengthening our retail offer
With prime retail vacancy rates remaining low across London's key retail
streets, we have delivered strong leasing across our prime retail portfolio,
which now represents approximately 13% of GPE's total portfolio (by value).
During the year, we secured £5.8 million of new retail lettings, welcoming 17
new customers that further enhance the quality of our retail brand mix.
At Mount Royal, 508/540 Oxford Street, W1, which is now fully let, a further
three retail deals were completed this year, totalling 10,000 sq ft. These
included new lettings to brands such as Clarks and Reef Perfumes, both of whom
join the strong and diverse retail line-up already in place and share our
long-term conviction in the sustained retail strength of Oxford Street.
At 30 Duke Street, SW1, we achieved our largest retail letting of the year, by
value, with the pre-let of 2,760 sq ft to L'Eto, the restaurant group. The
prime Piccadilly location is driving strong interest in the remaining retail
unit, which is under offer.
At Kent House, W1, we agreed a lease renewal with the premium fashion retailer
Reiss, who occupy approximately 15,000 sq ft across the basement and ground
floor, for a further ten-year term with a break at year five.
Customer retention supporting returns
Our customer-centric approach continues to deliver strong outcomes, with our
customer retention numbers remaining high at 76% across the portfolio. Our
retention rates demonstrate that, as well as providing great spaces, our
award-winning Customer Experience team is also delivering a market-leading
customer experience. Our success was reflected in our portfolio NPS score of
+29.7, or +49.1 across our Fully Managed spaces, materially ahead of the
industry average of +13.6.
NPS scores also improved for customers located in or around our development
and refurbishment sites, demonstrating measurable progress in customer
experience despite the inherent challenges of undertaking works within live
buildings.
High retention supports returns by reducing vacancy, limiting leasing costs
and lowering refresh capital spend within our Flex portfolio. Where customers'
requirements change, we aim to retain relationships by leveraging our Fully
Managed clusters across the wider portfolio, enabling customers to grow or
contract with us seamlessly. This includes transitioning Ready to Fit
customers into Flex space, as well as supporting smaller Flex customers as
they scale into larger, longer-term space within our portfolio.
How we are positioned
Despite ongoing macro-economic and geopolitical volatility, occupational
trends continue to play to our strengths. Demand for office space remains
above long-run averages, with customers increasingly focused on premium space
in core locations. Demand for the very best space continues to materially
exceed supply, while fitted or fully managed space has become the default for
an increasing part of the market. With supply tightening and the gap between
the best and the rest widening, these conditions are expected to persist.
Against this backdrop, we are strongly positioned. A record year of leasing
activity underlines the depth of demand for GPE's premium HQ and Fully Managed
spaces, and we enter the next phase of deliveries with confidence. With the
team, infrastructure and a well-timed pipeline of committed developments
already in place, the opportunity for further income and value growth is
clear.
Our investment activities
Activity levels in central London investment markets have strengthened, with
turnover up 51% year on year and improved liquidity supporting a rise in
larger lot-size transactions. Against this more constructive backdrop, we took
advantage of supportive market conditions to complete £490 million of
disposals during the period, achieving prices ahead of book value. These sales
allow efficient capital recycling into the next phase of our development
pipeline. At the same time, we remained alert to selective acquisition
opportunities, securing two new assets in the West End to enhance our growing
Fitzrovia cluster.
Two West End acquisitions
In September 2025, we acquired a new long-leasehold interest in The Gable, WC1
from the City of London Corporation for £18.0 million (£409 per sq ft on
current NIA). Subject to vacant possession, we intend to undertake a
substantial refurbishment of the 44,000 sq ft building to deliver our Fully
Managed offer.
Acquisitions for the year ended 31 March 2026
Price NIY Area Cost per
£m
%
sq ft
sq ft
The Gable, WC1 18.0 6.4% 44,000 409
10 South Crescent, WC1 51.0 6.8% 72,600 708
Total 69.0 116,600 592
The Gable is adjacent to our Courtyard building, which is currently under
refurbishment. As such, we intend to integrate the buildings to provide high
quality customer amenities, enhanced private terraces and reconfigured, modern
retail space. At acquisition, the building was let on short leases at an
annual rent of £1.5 million, reflecting a 6.4% net initial yield (NIY).
In December 2025, we acquired a new long-leasehold interest in 10 South
Crescent, WC1 from the City of London Corporation for £51 million (£708 per
sq ft on current NIA). The price reflects a 6.8% NIY, rising to 7.1% on a
fully let basis following the leasing of the vacant retail unit.
Subject to vacant possession, the 72,600 sq ft building will be repositioned
into a best-in-class, decarbonised HQ office and retail asset, offering
premium amenities and enlarged roof terraces. The offices are currently
single-let for a further three years at a highly reversionary rent of £67 per
sq ft, with recent nearby lettings achieving in excess of £125 per sq ft.
Located only minutes from Tottenham Court Road's Elizabeth line station, both
The Gable and 10 South Crescent enhance GPE's expanding Alfred Place cluster.
The cluster offers a high quality mix of Grade A HQ and Fully Managed space in
an amenity-rich West End location while supporting our strategy to provide
exceptional customer spaces, while delivering operational efficiencies for
GPE.
£490 million of sales
In May 2025, we sold Challenger House, E1 (also known as The Corner Hotel),
together with a plot of undeveloped land for £42.0 million, marginally ahead
of March 2025 book value. Challenger House is a 74,000 sq ft (GIA) hotel
featuring around 180 fully en-suite guest rooms alongside a ground-floor
restaurant and bar. The building adjoins The Hickman, our 74,900 sq ft, high
quality, repositioned office building, with customers including New Look,
Runway East and Four Communications. Challenger House and The Hickman were
jointly acquired in 2017 for £49.6 million.
In October 2025, we completed the sale of 1 Newman Street, W1 to Royal London
Asset Management for a headline price of £250 million, reflecting a NIY of
4.48%, marginally ahead of the March 2025 book value. The freehold property
sits on the northern side of Oxford Street, immediately opposite the Elizabeth
line entrance on Dean Street. Redeveloped by GPE in 2021, 1 Newman Street is a
BREEAM 'Excellent', best-in-class HQ building comprising 121,300 sq ft of
Grade A office and flagship retail space across basement, lower ground,
ground, and seven upper floors. The building features private roof terraces on
floors two and seven, along with a 3,100 sq ft communal terrace on level
eight, and is multi-let generating annual rent of around £11.9 million.
Sales for the year ended 31 March 2026
Price Premium/ Price per NIY
£m
(discount)
sq ft
%
to book
£
value %
Challenger House, E1 42.0 1.0% 562 5.9%
1 Newman Street, W1 250.0 1.8% 2,024 4.5%
wells&more, 45 Mortimer St, W1 172.0 3.2% 1,483 5.0%
103/113 Regent St, W1 (JV at share) 26.0 (1.1%) 912 7.2%
Total 490.0 2.3% 1,251
In March 2026, we completed the sale of wells&more, W1 to Feldberg Capital
on behalf of Fastighets AB Balder for a headline price of £172 million. At a
5.0% NIY and £1,483 per sq ft, the price was marginally ahead of the
September 2025, and around 5% ahead of March 2025, book values. The freehold
property occupies a prominent corner position on Wells Street and Mortimer
Street in the heart of Fitzrovia.
Also in March 2026, The Great Ropemaker Partnership (GRP), completed the sale
of the short leasehold interest in 103/113 Regent Street, W1 to a private
client of JLL. The headline price of £52 million was around 4% behind the
March 2025 book value and reflected a 7.2% NIY and a capital value of £912
per sq ft.
103/113 Regent Street is a prominent 56,850 sq ft Grade II Listed building
located on one of London's premier retail destinations. The property provides
a large retail unit with full frontage onto Regent Street and offices above
and is fully let to UNIQLO until 2036.
How we are positioned
While our investment activity has recently tilted towards crystallising value
through sales, we will remain an active and highly selective buyers of assets
that either support our Fully Managed strategy in established cluster
locations or offer meaningful HQ development potential. At the same time, we
expect disposals to continue as we unlock value from assets where business
plans have matured. We currently have approximately £200 million of sales
under consideration and see potential for a further £1.0 billion over
the medium term, market conditions permitting. Proceeds are expected to
be reinvested into higher-returning opportunities, improving portfolio
quality and supporting long-term performance.
Our financial results
Please see accompanying graphics (see appendix 3)
Since joining GPE, I have been struck by the strength of the business, not
only in the quality of its portfolio, but in the depth of expertise and
commitment across the organisation. My first months have reinforced my initial
impression of a company that combines financial discipline with a genuinely
forward-looking mindset. The clarity of our strategy, the resilience of our
balance sheet, and the entrepreneurial energy of our teams give me great
confidence in our ability to navigate the current market and capitalise on
the opportunities ahead.
Jayne Cottam, Chief Financial Officer
Valuation uplifts increase IFRS NAV and EPRA NTA
IFRS NAV and EPRA NTA per share at 31 March 2026 were 524 pence per share
compared with 494 pence at 31 March 2025 (see below), an increase of 6.1% over
the year, largely due to the 4.3% like-for-like valuation uplift in the
property portfolio. When combined with ordinary dividends paid of £31.9
million, this delivered a Total Accounting Return of 7.9%.
The main drivers of the 30 pence per share increase in EPRA NTA from 31 March
2025 included:
· the increase of 29 pence per share arising from the revaluation of
the property portfolio, with virtually all of the increase in value driven by
rental growth and our leasing activities;
· profit on disposal of properties increased NTA by one pence per
share;
· EPRA earnings for the year of eight pence per share enhanced NTA;
and
· ordinary dividends paid of eight pence per share reduced NTA.
At 31 March 2026, the Group's net assets were £2,126.7 million, up from
£2,000.7 million at 31 March 2025, with the increase largely attributable to
the 4.3% like-for-like increase in the property valuation. EPRA NDV and EPRA
NRV were 535 pence and 577 pence at 31 March 2026 respectively, compared with
506 pence and 546 pence at 31 March 2025.
Revenue up; driven by Fully Managed income
Group revenue for the year rose by £23.7 million to £117.9 million.
The growth was driven primarily by Fully Managed revenue, which rose by
£24.0 million or 128%. This growth was underpinned by successful leasing
activity as we continued to bring new space to market. During the year, we
signed 88 leases, generating new annual income of £70.9 million p.a. (our
share: £69.6 million), with the majority of activity arising from the
delivery and leasing of new Fully Managed space.
Revenue was also supported by increased service charge income (up £2.6
million) and higher joint venture fee income (see below) offset by a reduction
in Ready to Fit rental income of £5.0 million, which was primarily due to our
sales activities.
Net rental income, after allowing for expected credit losses, lease incentives
and ground rents, was £71.3 million, up from £67.3 million in the prior
year, reflecting the full-year impact of last year's Fully Managed deliveries
together with the additional space brought into income during the year.
Adjusting for acquisitions, disposals and transfers to and from the
development programme, like-for-like rental income (including share of joint
ventures) increased by 5.1% excluding expected credit losses.
Joint venture fee income for the year was £4.2 million, an increase of £1.7
million, as a result of fees earned on the sale of 103/113 Regent Street, W1
in the Great Ropemaker Partnership and increased leasing activity across the
joint ventures during the year.
Strong rent collection
We secured in excess of 99.3% of all rents, including in our joint ventures,
within seven days of the due date. Since 1 April 2025, three of our customers
went into administration, representing 1.1% of our rent roll. At 31 March
2026, we held rent deposits and bank guarantees totalling £22.1 million,
including our share of joint ventures.
Cost of sales increased
Cost of sales increased from £35.1 million to £49.3 million for the year
ended 31 March 2026. This increase was primarily driven by increased Fully
Managed service expenses which rose to £24.8 million, up from £10.8 million
in the prior year, as we increased the delivery of this space across the
portfolio. At 31 March 2025, we had 118 Fully Managed units; at 31 March 2026
this rose to 143 units. Service charge expenses increased by £2.0 million, as
a result of higher budgeted, and recovered, spend.
Other property expenses fell from £7.2 million to £4.8 million, reflecting
lower levels of vacant Ready to Fit space. This reduction in vacancy lowered
letting fees and business rates on empty units.
Taken together, the Group's property costs which include net service charge
income, net Fully Managed services income and expenses, other property costs
and expected credit loss provisions for service charges reduced to £7.0
million from £10.9 million in the prior year.
Fully Managed NOI growth
As the roll-out of our new Fully Managed spaces progresses, the positive
impact on the income statement is becoming more evident. For the year ended 31
March 2026, our wholly-owned Fully Managed space delivered total revenue of
£42.8 million (£17.1 million rent plus £25.7 million in Fully Managed
services income), up from £18.8 million last year. After the deduction of
£24.8 million of Fully Managed service expenses, the Group delivered Fully
Managed net operating income (NOI) of £18.0 million, up 125% on the prior
year. Across the Group, including our joint ventures, our Fully Managed NOI
totalled £19.2 million.
Joint venture earnings
EPRA earnings from joint ventures was £10.8 million, up from £7.3 million in
the prior year. This increase was primarily driven by an insurance claim in
the GHS Partnership, to compensate for rent loss and delays to works caused by
the pandemic and the settlement of the KKR and Glencore rent reviews at
Hanover Square, W1. Additionally, a further insolvency settlement at Mount
Royal, W1 relating to the Arcadia administration contributed to the uplift.
Administration costs
Administration costs were £44.2 million, an increase of £4.2 million year on
year. £1.6 million of this uplift related to the implementation of a new
finance and property management system, which is due to go live in late 2026
and is expected to deliver operational efficiencies across the Group.
Employment costs increased by around £2.0 million, reflecting higher
performance-related pay following strong operational performance, a modest
increase in headcount, and increased pay awards in line with inflation. Other
head office costs, including depreciation, increased by £0.6 million, in part
due to the costs associated with the external investigation of the
whistleblower allegations during the year.
Increased gross interest costs
Gross finance costs on our debt facilities were £48.6 million, £9.0 million
higher than the prior year. This increase was primarily due to higher levels
of average drawn debt, which was used to fund both our capital expenditure on
the Group's development and Flex refurbishments.
Capitalised interest was £37.7 million, up £11.2 million on the prior year
given our continued high levels of development activity, including greater
cumulative spend across our committed developments together with a number of
refurbishment schemes to deliver on our Flex ambitions. This included the
commencement of Whittington House, WC1, The Howlett, W1 and The Courtyard,
WC1. As a result, the Group had finance costs of £10.9 million (2025: £13.1
million).
Significant EPRA earnings growth
EPRA earnings were £34.5 million, 70.8% higher than last year as expected,
predominantly due to higher net rental income including Fully Managed NOI and
the reversal of a prior-year 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
£154.5 million (2025: £116.0 million). Basic and diluted earnings per share
for the year were 38.3 pence and 38.1 pence respectively, compared with 30.2
pence and 30.1 pence respectively for 2025. Diluted EPRA EPS was 8.5 pence
(2025: 5.2 pence), an increase of 63.5%, and cash EPS was minus 0.2 pence
(2025: 0.3 pence).
Results of joint ventures
The Group's net investment in joint ventures increased to £537.5 million at
31 March 2026, up from £507.2 million in the previous year. The increase was
largely due to the 4.5% like-for-like increase in portfolio valuation over the
year. This was driven by the strong performance of our prime mixed-use Hanover
Square site, marginally offset by cost increases on the office refurbishment
of 200 Gray's Inn Road, WC1. Our share of joint venture net rental income was
£18.0 million, up from £15.9 million last year, given strong leasing and
settlement of the KKR and Glencore rent reviews at Hanover Square, W1.
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 28.6%
The Group's consolidated net debt reduced to £779.2 million, or £799.7
million excluding customer deposits at 31 March 2026, compared with £835.7
million at 31 March 2025. The reduction in the year was largely driven by our
net disposals of £421.0 million (excluding costs), more than offsetting
£375.6 million of development and refurbishment capital expenditure across
the Group. As a result, the Group's gearing reduced to 37.7% at 31 March 2026
from 41.9% at 31 March 2025.
In October 2025, we signed a new £525 million ESG-linked unsecured revolving
credit facility (RCF) with a group of four existing relationship banks. The
facility has a headline margin of 105 basis points over SONIA, with an initial
five-year term, which may be extended to a maximum of seven years at GPE's
request, subject to bank consent. The facility incorporates our ESG KPI-linked
margin adjustments and standard unsecured financial covenants, consistent with
our existing bank arrangements. The new RCF replaced the Group's existing
£450 million facility and allowed for the prepayment of the £75 million term
loan in October 2025, which had a headline margin of 175 basis points over
SONIA.
Including cash balances in joint ventures, total net debt, excluding customer
deposits, was £785.0 million (2025: £820.9 million) or £846.5 million
(2025: £883.0 million) on an EPRA basis, equivalent to an EPRA LTV of 28.6%
(2025: 30.8%). At 31 March 2026, we had no external debt in any of our joint
ventures. At 31 March 2026, the Group, including its joint ventures, had
unrestricted cash (£16.9 million) and undrawn committed credit facilities
(£395.0 million) totalling £411.9 million. The Group's weighted average cost
of debt for the year, including fees, was 5.0% and its weighted average
interest rate (excluding fees) was 4.3%, down from 5.2% and 4.7% respectively.
At 31 March 2026, our weighted average drawn debt maturity was 5.4 years (31
March 2025: 5.2 years).
At 31 March 2026, 65% of the Group's total drawn debt was at fixed or hedged
rates (2025: 85%). The Group is operating with substantial headroom over its
debt covenants. At 31 March 2026, given our low levels of leverage, property
values would have to fall by 45% 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 credit for the year was £2.0 million (2025: £1.6 million
charge) and the deferred tax charge for the year was £nil (2025: £0.2
million). The effective tax rate on EPRA earnings was -6.0% (2025: 7.4%).
The current tax credit of £2.0 million comprises prior period adjustments,
including a credit of £1.6 million relating to the operation of the REIT
interest cover test. If our REIT interest cover is below 1.25x in any year, we
are subject to corporation tax on the shortfall. We originally calculated our
REIT interest cover for the year ended 31 March 2025 to be below 1.25x and
accrued a resulting tax charge of £1.6 million. During the year, HMRC issued
updated guidance on the REIT interest cover calculation methodology and we
recalculated our cover in accordance with this guidance. This gave rise to
cover above 1.25x and the reversal of the £1.6 million accrual. 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 £6.1 million of PIDs.
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 £13.1 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 our business plans and crystallise surpluses, we expect property
values and net assets to grow, supported by our positive market outlook.
Delivery of new space and the expansion of our Fully Managed offer should also
drive higher income and EPRA EPS, underpinning our progressive dividend
policy. As a result, we expect Total Accounting Return to build on the 7.9%
achieved this year as we progress towards our target of delivering an annual
return on equity above 10%, excluding any benefit from 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. During the period, the Group paid an
interim dividend of 2.9 pence per share and has recommended a final dividend
for the year ended 31 March 2026 of 5.3 pence per share, which will be paid,
subject to shareholder approval, on 10 July 2026 to shareholders on the
register on 5 June 2026. 2.7 pence of the final dividend will be a REIT PID in
respect of the Group's tax-exempt property rental business.
Alternative performance measures
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.
Group income statement
For the year ended 31 March 2026
Notes 2026 2025
£m £m
Revenue 3 117.9 94.2
Cost of sales 4 (49.3) (35.1)
68.6 59.1
Administration expenses 5 (44.2) (40.0)
Other income - 0.6
Expected credit losses (0.1) (0.2)
Operating profit before surplus from investment property, 24.3 19.5
revaluation movements and results of joint ventures
Surplus from investment property 10 99.4 83.2
Surplus/(deficit) on revaluation of other investments 12 0.4 (0.4)
Share of results of joint ventures 11 33.3 21.8
Operating profit 157.4 124.1
Finance income 6 6.0 7.2
Finance costs 7 (10.9) (13.1)
Fair value loss on derivatives 16 - (0.4)
Profit before tax 152.5 117.8
Tax 8 2.0 (1.8)
Profit for the year 154.5 116.0
Basic earnings per share 9 38.3p 30.2p
Diluted earnings per share 9 38.1p 30.1p
Basic EPRA earnings per share 9 8.6p 5.3p
Diluted EPRA earnings per share 9 8.5p 5.2p
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 2026
Notes 2026 2025
£m
£m
Profit for the year 154.5 116.0
Items that will not be reclassified subsequently to profit and loss
Actuarial gain/(loss) on defined benefit scheme 24 0.1 (0.8)
Deferred tax on actuarial gain/(loss) on defined benefit scheme 8 - 0.2
Total comprehensive income for the year 154.6 115.4
Group balance sheet
At 31 March 2026
Notes 2026 2025
£m
£m
Non-current assets
Investment property 10 2,512.2 2,455.5
Investment in joint ventures 11 537.5 507.2
Property, plant and equipment 0.3 0.9
Pension asset 24 5.0 4.8
Other investments 12 3.6 2.8
3,058.6 2,971.2
Current assets
Trade and other receivables 13 36.0 20.7
Cash and cash equivalents 20 22.7 36.9
58.7 57.6
Total assets 3,117.3 3,028.8
Current liabilities
Trade and other payables 14 (107.6) (85.5)
Corporation tax 8 - (2.6)
(107.6) (88.1)
Non-current liabilities
Interest-bearing loans and borrowings 15 (793.4) (848.0)
Head lease obligations 17 (84.6) (87.0)
Deferred consideration (2.0) (2.0)
Provisions in respect of warranties on sold buildings (3.0) (3.0)
(883.0) (940.0)
Total liabilities (990.6) (1,028.1)
Net assets 2,126.7 2,000.7
Equity
Share capital 18 62.0 62.0
Share premium account 358.3 358.3
Capital redemption reserve 326.7 326.7
Retained earnings 1,380.0 1,251.9
Investment in own shares 19 (0.3) 1.8
Total equity 2,126.7 2,000.7
Basic net assets per share (diluted) 9 524p 494p
EPRA NTA (diluted) 9 524p 494p
Approved by the Board on 20 May 2026 and signed on its behalf by:
Toby Courtauld Jayne Cottam
Chief Executive Chief Financial
Officer
Group statement of cash flows
For the year ended 31 March 2026
Notes 2026 2025
£m
£m
Operating activities
Operating profit 157.4 124.1
Adjustments for non-cash items 21 (129.6) (98.4)
(Increase)/decrease in receivables (15.3) 3.8
Increase in payables 5.0 6.2
Cash generated from operations 17.5 35.7
Interest paid (48.4) (40.9)
Interest received 0.4 1.5
Tax paid (0.6) (0.3)
Cash flows used in operating activities (31.1) (4.0)
Investing activities
Repayment of loans by joint ventures 37.6 11.6
Provision of loans to joint ventures (29.0) -
Purchase of other investments (0.4) (0.8)
Development of investment property (288.3) (247.5)
Purchase of investment property (75.2) (147.3)
Purchase of plant and equipment (0.2) (0.6)
Sale of properties 460.4 -
Cash flows generated from/(used in) investing activities 104.9 (384.6)
Financing activities
£450 million revolving credit facility repaid 15 (361.0) (339.0)
£450 million revolving credit facility drawn 15 211.0 442.0
£150 million revolving credit facility repaid 15 (30.0) (2.0)
£150 million revolving credit facility drawn 15 23.0 108.3
£525 million revolving credit facility repaid 15 (445.0) -
£525 million revolving credit facility drawn(1) 15 620.2 -
Term loan repaid 15 (75.0) (175.0)
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)
Dividends paid 22 (31.2) (31.8)
Cash flows (used in)/generated from financing activities (88.0) 402.6
Net (decrease)/increase in cash and cash equivalents (14.2) 14.0
Cash and cash equivalents at 1 April 36.9 22.9
Cash and cash equivalents at 31 March 20 22.7 36.9
1. Cumulative total of amounts drawn from the revolving credit facility
throughout the year.
Group statement of changes in equity
For the year ended 31 March 2026
Notes Share Share premium account Capital redemption reserve Retained earnings Investment Total
capital
£m
£m
£m
in own
equity
£m
shares
£m
£m
Total equity at 1 April 2025 62.0 358.3 326.7 1,251.9 1.8 2,000.7
Profit for the year - - - 154.5 - 154.5
Actuarial gain on defined benefit scheme 24 - - - 0.1 - 0.1
Deferred tax on defined benefit scheme - - - - - -
Total comprehensive income for the year - - - 154.6 - 154.6
Employee share-based incentive charge 19 - - - - 3.3 3.3
Dividends to shareholders 22 - - - (31.9) - (31.9)
Transfer to retained earnings 19 - - - 5.4 (5.4) -
Total equity at 31 March 2026 62.0 358.3 326.7 1,380.0 (0.3) 2,126.7
Group statement of changes in equity
For the year ended 31 March 2025
Notes Share Share Capital redemption reserve Retained earnings Investment Total
capital
premium account
£m
£m
in own
equity
£m
£m
shares
£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 24 - - - (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 19 - - - - 4.2 4.2
Purchase of own shares 19 - - - - (5.7) (5.7)
Dividends to shareholders 22 - - - (31.8) - (31.8)
Transfer to retained earnings 19 - - - 2.3 (2.3) -
Total equity at 31 March 2025 62.0 358.3 326.7 1,251.9 1.8 2,000.7
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 2026 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 2026 or 2025,
but is derived from those financial statements. The auditors' reports on both
the 2026 and 2025 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 2026 or 2025, but
is derived from those accounts. Statutory accounts for 2025 have been
delivered to the Registrar of Companies and those for 2026 (approved by the
Board on 20 May 2026) 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 period ended 31
March 2026, with particular focus on the impact of the macroeconomic
conditions in which the Group is operating. The Directors' assessment is based
on the next 12 months of the Group's financial forecasts, including a severe
but plausible downside scenario which included the following key assumptions:
· a 13.1% decline in the valuation of the property portfolio; and
· an increase in EPRA earnings due to the delivery and letting of the
30 Duke Street development and recent Fully Managed refurbishments.
The severe but plausible downside scenario demonstrates that over the next 12
months:
· the Group has sufficient liquidity to fund its ongoing operations;
· the Group is operating with significant headroom above its Group
debt financing covenants;
· property values would have to fall by 18.5% before breach
(or 45.2% from 31 March 2026 values);
· the Group does not project any breaches of its interest cover
ratio, with minimum coverage of 3.18x (vs 1.35x covenant) throughout the going
concern period; and
· the Group has no debt maturities other than set out above.
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. 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 2026.
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 2025. 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 21 - Lack of Exchangeability.
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 - Contracts Referencing
Nature-dependent Electricity;
· Annual improvements to IFRS - Volume 11;
· 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 - Translation to a Hyperinflationary
Presentation Currency; and
· Amendments to IFRS 10 and IAS 28 - Sale or contribution of assets
between an investor and its associate or joint venture.
With the exception of IFRS 18, 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.
IFRS 18 will introduce new requirements to improve comparability of the
financial performance of similar entities. IFRS 18 will not impact the
recognition or measurement of items in the financial statements but it will
impact presentation and disclosure.
Management is currently assessing the detailed implications of applying the
new standard to the financial statements. From the high-level preliminary
assessment performed, the following potential impacts have been identified:
· the line items presented on the primary financial statements may
change as a result of the application of the concept of 'useful structured
summary' and the enhanced principles on aggregation and disaggregation.
However, the Group does not expect there to be a significant change in the
information that is currently disclosed in the notes;
· new disclosures will be required for certain management-defined
performance measures;
· a breakdown of the nature of certain expenses will be required for
line items presented by function in the operating category of the statement of
profit or loss, and share of results of joint ventures will be classified in
the investing category, outside of operating profit;
· for the first annual period of application, a reconciliation
between the restated amounts presented under IFRS 18 and the amounts
previously presented applying IAS 1;
· in the statement of cash flows, interest paid will be presented
as financing cash flows and interest received as investing cash flows, rather
than both being included within operating cash flows as they are currently;
and
· retrospective application is required, and so the comparative
information for the financial year ending 31 March 2027 will be restated in
accordance with IFRS 18.
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 2026.
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 standalone 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 standalone 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 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.
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.
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.
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 13 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, 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 2026
Fully Managed offices including joint ventures Joint Group Fully Managed Remainder Total
£m
ventures
offices
of portfolio
2026
£m
£m
£m
£m
Revenue 44.5 (1.7) 42.8 75.1 117.9
Cost of sales (25.3) 0.5 (24.8) (24.5) (49.3)
Net result 19.2 (1.2) 18.0 50.6 68.6
Group Fully Managed revenue includes £0.8 million (2025: £0.3 million) in
respect of spreading of rental income lease incentives.
Segmental analysis for the year ended 31 March 2025
Fully Managed Joint Group Fully Remainder Total
offices including
ventures
Managed
of portfolio
2025
joint ventures
£m
offices
£m
£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
3 Revenue
2026 2025
£m
£m
Gross rental income 72.4 69.4
Spreading of lease incentives - rental income 0.2 (1.4)
Service charge income 15.4 12.8
Fully Managed services income 24.5 10.5
Spreading of lease incentives - Fully Managed services income 1.2 0.4
Joint venture fee income 4.2 2.5
117.9 94.2
The table below sets out the Group's gross rental income split between types
of space provided:
2026 2025
£m
£m
Ready to Fit 31.4 36.4
Retail 15.1 11.8
Fitted 6.1 7.9
Fully Managed 16.3 7.6
Flex Partnerships 2.7 3.0
Hotel 0.8 2.7
72.4 69.4
The table below sets out the Group's net rental income, which is an
alternative performance measure (see note 9):
2026 2025
£m
£m
Gross rental income 72.4 69.4
Expected credit loss (0.1) (0.1)
Rental income 72.3 69.3
Spreading of lease incentives 0.2 (1.4)
Ground rent (1.2) (0.6)
Net rental income 71.3 67.3
4 Cost of sales
2026 2025
£m
£m
Service charge expenses 18.5 16.5
Fully Managed service expenses 24.8 10.8
Other property expenses 4.8 7.2
Ground rent 1.2 0.6
49.3 35.1
The table below sets out the Group's property costs, which is an alternative
performance measure (see note 9):
2026 2025
£m
£m
Service charge income (15.4) (12.8)
Service charge expenses 18.5 16.5
Fully Managed services income (including spreading of services incentives) (25.7) (10.9)
Fully Managed services expenses 24.8 10.8
Other property expenses 4.8 7.2
Expected credit loss - 0.1
Property costs 7.0 10.9
5 Administration expenses
2026 2025
£m
£m
Employee costs 31.7 29.7
IT transformation costs 1.8 0.2
Depreciation 0.8 1.7
Other head office costs 9.9 8.4
44.2 40.0
Included within employee costs is an accounting charge for the Restricted
Share Plan and deferred bonus shares of £3.3 million (2025: £4.2 million).
Employee costs, including those of Directors, comprise the following:
2026 2025
£m
£m
Wages and salaries (including annual bonuses) 26.7 24.2
Share-based payments 3.4 4.0
Social security costs 4.2 4.0
Other pension costs 2.4 2.1
36.7 34.3
Less: recovered through service charges (2.0) (2.0)
Less: capitalised into development projects (2.4) (2.1)
Less: Fully Managed staff costs (0.6) (0.5)
31.7 29.7
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:
2026 2025
£m
£m
Wages and salaries (including annual bonuses) 7.2 6.4
Share-based payments 1.7 1.9
Social security costs 1.2 1.1
Other pension costs 0.5 0.4
10.6 9.8
The number of people considered key management totalled 17 (2025: 15). The
Group had loans to key management of £5,039 (2025: £nil) outstanding at 31
March 2026. 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:
2026 2025
Number
Number
Head office and property management 170 158
Auditor's remuneration
2026 2025
£000
£000
Audit of the Group and Company's annual accounts 378 345
Audit of subsidiaries 146 111
524 456
Audit-related assurance services, including the interim review 65 63
Reporting accountant fees - rights issue and issue of £250.0 million - 308
sustainable sterling bond
Sustainability assurance 75 73
Auditor's remuneration 664 900
6 Finance income
2026 2025
£m
£m
Interest income on joint venture balances 5.6 5.7
Interest on cash deposits 0.4 1.5
6.0 7.2
7 Finance costs
2026 2025
£m
£m
Interest on revolving credit facilities 20.3 7.3
Interest on term loan 2.9 12.8
Interest on private placement notes 7.1 7.6
Interest on sustainable sterling bond 13.9 7.2
Interest on debenture stock 1.2 1.2
Interest on obligations under head leases 3.2 3.1
Other - 0.4
Gross finance costs 48.6 39.6
Less: capitalised interest (37.7) (26.5)
10.9 13.1
The Group capitalised interest on certain developments with specific
associated borrowings at 6.6% (2025: 6.9%), with the remainder at the Group's
weighted average cost of non-specific borrowings of 4.9% (2025: 4.6%).
8 Tax
2026 2025
£m
£m
Current tax
UK corporation tax - current period - 1.6
UK corporation tax - prior periods (2.0) -
Total current tax (2.0) 1.6
Deferred tax - 0.2
Tax (credit)/charge for the year (2.0) 1.8
The effective rate of tax is lower (2025: lower) than the standard rate of
tax. The difference arises from the items set out below:
2026 2025
£m
£m
Profit before tax 152.5 117.8
Tax charge on profit at standard rate of 25% (2025: 25%) 38.1 29.5
REIT tax exempt rental profits and gains (12.6) (7.9)
Changes in fair value of properties not subject to tax (28.9) (24.5)
Other 3.4 4.7
Prior periods' adjustments (2.0) -
Tax (credit)/charge for the year (2.0) 1.8
The Group complied with all the requirements necessary to maintain its REIT
status throughout the year. The current tax credit of £2.0 million comprises
prior period adjustments, including a credit of £1.6 million relating to the
operation of the REIT interest cover test.
During the year, £nil (2025: £0.2 million) of deferred tax was credited
directly to equity. The Group recognised a net deferred tax asset at 31 March
2026 of £nil (2025: £nil). This consists of deferred tax assets of £1.5
million (2025: £1.4 million) and deferred tax liabilities of £1.5 million
(2025: £1.4 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
2025
in the income statement
in equity
2026
£m
£m
£m
£m
Net deferred tax (liability)/asset in respect of other temporary differences - - - -
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:
2026 2025
£m
£m
Revenue losses 42.3 32.4
Share-based payments 5.5 7.8
Other 0.9 1.5
48.7 41.7
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.
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. EPRA capital expenditure
and EPRA NIY are included in note 10.
Earnings per share
Weighted average number of ordinary shares
2026 2025
Number of
Number of
shares
shares
Issued ordinary share capital at 1 April 406,188,658 253,867,911
Rights issue - 132,033,365
Investment in own shares (2,790,705) (1,816,870)
Weighted average number of ordinary shares at 31 March - basic 403,397,953 384,084,406
Basic and diluted earnings per share (EPS)
Profit Number Earnings Profit Number Earnings
after tax
of shares
per share
after tax
of shares
per share
2026
2026
2025
2025
£m
million 2026
£m
million 2025
pence
pence
Basic 154.5 403.4 38.3 116.0 384.1 30.2
Dilutive effect of RSP shares - 1.8 (0.2) - 0.9 (0.1)
Diluted 154.5 405.2 38.1 116.0 385.0 30.1
Basic and diluted EPRA EPS
Profit Number Earnings Profit Number Earnings
after tax
of shares
per share
after tax
of shares
per share
2026
2026
2025
2025
2025
£m
million 2026
£m
million
pence
pence
Basic 154.5 403.4 38.3 116.0 384.1 30.2
Surplus from investment property (note 10) (99.4) - (24.6) (83.2) - (21.6)
Surplus from joint venture investment property (note 11) (22.5) - (5.6) (14.5) - (3.7)
Debt cancellation costs (note 15) 0.5 - 0.1 0.7 - 0.2
Deficit on revaluation of derivatives (note 16) - - - 0.4 - 0.1
(Surplus)/deficit on revaluation of other investments (note 12) (0.4) - (0.1) 0.4 - 0.1
Deferred tax in respect of adjustments (note 8) - - - 0.2 - -
Exceptional item: IT transformation costs 1.8 - 0.5 0.2 - -
Basic EPRA earnings 34.5 403.4 8.6 20.2 384.1 5.3
Dilutive effect of RSP shares (note 19) - 1.8 (0.1) - 0.9 (0.1)
Diluted EPRA earnings 34.5 405.2 8.5 20.2 385.0 5.2
In the prior 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 Number Earnings
after tax
of shares
per share
after tax
of shares
per share
2026
2026
2026
2025
2025
2025
£m
million
pence
£m
million
pence
Diluted EPRA earnings 34.5 405.2 8.5 20.2 385.0 5.2
Capitalised interest (37.7) - (9.3) (26.5) - (6.9)
Spreading of lease incentives (1.4) - (0.4) 1.0 - 0.3
Spreading of lease incentives in joint ventures 1.3 - 0.3 2.4 - 0.7
Capitalised interest in joint ventures (0.7) - (0.1) (0.2) - (0.1)
Employee incentive plan charges 3.3 - 0.8 4.2 - 1.1
Cash earnings per share (0.7) 405.2 (0.2) 1.1 385.0 0.3
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.
Number of ordinary shares
2026 2025
Number of
Number of
shares
shares
Issued ordinary share capital 406,188,658 253,867,911
Rights issue - 152,320,747
Investment in own shares (2,778,924) (2,893,542)
Number of shares - basic 403,409,734 403,295,116
Dilutive effect of RSP shares 2,306,747 1,472,577
Number of shares - diluted 405,716,481 404,767,693
EPRA net assets per share at 31 March 2026
IFRS EPRA NTA EPRA NDV EPRA NRV
£m
£m
£m
£m
IFRS basic and diluted net assets 2,126.7 2,126.7 2,126.7 2,126.7
Fair value of financial liabilities (note 16) - - 45.8 -
Real estate transfer tax - - - 215.7
Net assets used in per share calculations 2,126.7 2,126.7 2,172.5 2,342.4
IFRS EPRA NTA EPRA NDV EPRA NRV
pence
pence
pence
pence
Net assets per share (pence) 527 527 539 581
Diluted net assets per share (pence) 524 524 535 577
EPRA net assets per share at 31 March 2025
IFRS EPRA NTA EPRA NDV EPRA NRV
£m
£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 16) - - 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
Total Accounting Return (TAR)
2026 2025
£m
£m
Opening EPRA net assets 2.000.7 1,582.6
Adjusted for rights issue - 335.6
Restated opening EPRA net assets (A) 2,000.7 1,918.2
Closing net assets 2,126.7 2,000.7
Increase in net assets 126.0 82.5
Ordinary dividends paid in the year 31.9 31.8
Total return (B) 157.9 114.3
Total Accounting Return (B/A) 7.9% 6.0%
Net gearing
2026 2025
£m
£m
Nominal value of interest-bearing loans and borrowings (see note 15) 801.9 853.9
Less: cash and cash equivalents (unrestricted) (note 20) (2.2) (18.2)
Adjusted net debt (A) 799.7 835.7
Net assets 2,126.7 2,000.7
Pension scheme asset (note 24) (5.0) (4.8)
Adjusted net equity (B) 2,121.7 1,995.9
Net gearing (A/B) 37.7% 41.9%
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).
2026 2025
£m £m
£21.9 million 55⁄8% debenture stock 2029 21.9 21.9
£525.0 million revolving credit facility 180.0 -
£450.0 million revolving credit facility - 150.0
£150.0 million revolving credit facility 100.0 107.0
£75.0 million term loan 2027 (2025: £75.0 million) - 75.0
£250.0 million 5.375% sustainable sterling bond 2031 250.0 250.0
Private placement notes 250.0 250.0
Less: cash and cash equivalents (22.7) (36.9)
Group net debt 779.2 817.0
Net payables (including customer rent deposits) 76.6 72.4
Group net debt including net payables 855.8 889.4
Joint venture net payables (at share) 7.0 9.5
Less: joint venture cash and cash equivalents (at share) (16.3) (15.9)
Net debt including joint ventures (A) 846.5 883.0
Group properties at market value 2,427.6 2,368.5
Joint venture properties at market value (at share) 528.2 500.8
Property portfolio at market value including joint ventures (B) 2,955.8 2,869.3
EPRA loan-to-property value (A/B) 28.6% 30.8%
Group cash and cash equivalents includes customer rent deposits held in
separate designated bank accounts of £20.5 million (2025: £18.7 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)
2026 2025
£m
£m
Administration expenses 44.2 40.0
Net property costs (excluding Fully Managed services income and costs) 7.9 11.0
Joint venture management fee income (note 3) (4.2) (2.5)
Joint venture property and administration costs (excluding Fully Managed 2.0 3.1
services income and costs, note 11)
EPRA costs (including direct vacancy costs) (A) 49.9 51.6
Direct vacancy costs (4.3) (6.9)
Joint venture direct vacancy costs (2.1) (1.3)
EPRA costs (excluding direct vacancy costs) (B) 43.5 43.4
Net rental income (note 3) 71.3 67.3
Joint venture net rental income (note 11) 18.0 15.9
Gross rental income (C) 89.3 83.2
Portfolio at fair value including joint ventures (D) 2,955.8 2,869.3
Cost ratio (including direct vacancy costs) (A/C) 55.9% 62.0%
Cost ratio (excluding direct vacancy costs) (B/C) 48.7% 52.1%
Cost ratio (by portfolio value) (A/D) 1.7% 1.8%
10 Investment property
Investment property
Freehold Leasehold Total
£m
£m
£m
Book value at 1 April 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 (restated) 31.5 148.7 180.2
Disposals - (0.5) (0.5)
Net valuation surplus on investment property 36.7 42.5 79.2
Book value at 31 March 2025 (restated) 1,011.3 1,039.1 2,050.4
Costs capitalised 26.7 44.6 71.3
Movement in lease incentives 1.6 0.6 2.2
Interest capitalised 1.1 4.8 5.9
Acquisitions - 81.1 81.1
Disposals (452.6) - (452.6)
Transfers to investment property under development - (67.1) (67.1)
Transfers from investment property under development - 383.8 383.8
Net valuation surplus on investment property 7.0 12.4 19.4
Book value at 31 March 2026 (A) 595.1 1,499.3 2,094.4
Investment property under development
Freehold Leasehold Total
£m
£m
£m
Book value at 1 April 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 70.1 335.0 405.1
Costs capitalised 44.9 179.6 224.5
Interest capitalised 7.0 24.8 31.8
Transfers to investment property - (383.8) (383.8)
Transfers from investment property - 67.1 67.1
Net valuation surplus on investment property under development 22.5 50.6 73.1
Book value at 31 March 2026 (B) 144.5 273.3 417.8
Book value of investment property and investment property under development 739.6 1,772.6 2,512.2
(A+B)
The book value of investment property includes £84.6 million (2025: £87.0
million) in respect of the present value of future ground rents. The market
value of the portfolio (excluding these amounts) is £2,427.6 million. The
total portfolio value including joint venture properties of £528.2 million
(see note 11) was £2,955.8 million. The prior year acquisition has been
restated by £25.8 million to correct the classification of an acquisition
from freehold to leasehold. At 31 March 2026, property with a carrying value
of £132.0 million (2025: £114.8 million) was secured under the first
mortgage debenture stock (see note 15).
Surplus from investment property
2026 2025
£m
£m
Net valuation surplus on investment property 92.5 83.5
Profit/(loss) on sale of investment properties 6.9 (0.3)
99.4 83.2
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 2026. 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 has rotated off following their
final valuation of the portfolio at 31 March 2026. Knight Frank has been
selected as CBRE's successor, with the first valuation for the Group to be
carried out at 30 September 2026.
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 two Fully Managed conversion schemes, which the
Directors believe is a reasonable variance to budgeted costs based on industry
experience, would reduce the valuation by £19.8 million (31 March 2025:
£35.7 million), with a decrease of 10% increasing the valuation by £19.8
million (31 March 2025: £35.7 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 £111.4
million (£137.6 million including a share of joint ventures) compared with a
£112.1 million increase based on a 25 basis point movement at 31 March 2025.
A 25 basis point increase would reduce the fair value by £102.0 million
(£125.9 million including a share of joint ventures) compared with a £102.4
million decrease based on a 25 basis point movement at 31 March 2025. A
movement of 11 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 for the portfolio as a whole.
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 (2025: less than £10 million and £10 million respectively)),
over and above specific refurbishment and development assumptions included in
the valuation.
During the year, the Group capitalised £2.3 million (2025: £2.1 million) of
employee costs in respect of its development team into investment properties
under development. The Group and its joint ventures have contingent
liabilities in respect of legal claims, guarantees and warranties arising in
the ordinary course of business. It is not anticipated that any material
liabilities will arise from these contingent liabilities. At 31 March 2026,
the Group had capital commitments of £212.0 million (2025: £359.7 million).
Key inputs to the valuation (by building and location) at 31 March 2026
ERV True equivalent yield
Average Range Average Range
£ per sq ft
£ per sq ft
%
%
North of Oxford Street Office 141 56 - 240 5.9 5.0 - 7.9
Retail 46 20 - 100 6.0 4.6 - 10.8
Rest of West End Office 162 72 - 285 5.2 4.5 - 7.6
Retail 89 15 - 332 5.0 4.5 - 6.8
City, Midtown and Southwark Office 100 49 - 200 6.0 5.6 - 7.2
Retail 34 28 - 75 5.9 5.7 - 6.3
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
EPRA capital expenditure (alternative performance measure)
2026 2025
£m
£m
Group
Acquisitions (note 10) 81.1 180.2
Developments (note 10) 224.5 146.6
Interest capitalised (note 7) 37.7 26.5
Investment properties: incremental lettable space - -
Investment properties: no incremental lettable space (note 10) 71.3 108.8
Movement in lease incentives (note 10) 2.2 (0.6)
Group total 416.8 461.5
Joint ventures (at share, note 11)
Developments - -
Interest capitalised (note 9) 0.7 0.2
Investment properties: incremental lettable space - -
Investment properties: no incremental lettable space 31.0 11.5
Movement in lease incentives (1.0) (1.5)
Total capital expenditure 447.5 471.7
Conversion from accrual to cash basis (17.0) (7.7)
Total capital expenditure on a cash basis 430.5 464.0
EPRA net initial yield (NIY) and topped-up NIY (alternative performance
measure)
2026 2025
£m
£m
Properties at fair value including joint ventures 2,955.8 2,869.3
Less: properties under development including joint ventures (402.3) (372.9)
Less: residential properties (6.6) (6.8)
Like-for-like investment property portfolio, proposed and completed 2,546.9 2,489.6
developments
Plus: estimated purchasers' costs 185.8 181.6
Grossed-up completed property portfolio valuation (B) 2,732.7 2,671.2
Annualised cash passing rental income(1) 89.9 84.7
Net service charge expense including joint ventures (5.0) (4.9)
Other irrecoverable property costs including joint ventures (4.4) (8.9)
Annualised net rents (A) 80.5 70.9
Plus: rent-free periods and other lease incentives including joint ventures 40.0 16.0
Topped-up annualised net rents (C) 120.5 86.9
EPRA net initial yield (A/B) 2.9% 2.7%
EPRA topped-up initial yield (C/B) 4.4% 3.3%
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 metrics which are Alternative
Performance Metrics.
11 Investment in joint ventures
The Group has the following investments in joint ventures:
Equity Balances 2026 2025
£m
with
Total
Total
partners
£m
£m
£m
At 1 April 299.6 207.6 507.2 491.3
Movement on joint venture balances - (3.0) (3.0) (5.9)
Additions - - - -
Share of profit of joint ventures 10.8 - 10.8 7.3
Loss on sale of investment properties (0.6) - (0.6) -
Share of revaluation surplus of joint ventures 23.1 - 23.1 14.5
Share of results of joint ventures 33.3 - 33.3 21.8
Distributions - - - -
At 31 March 332.9 204.6 537.5 507.2
All of the Group's joint ventures operate solely in the United Kingdom and
comprise the following:
Country of registration 2026 2025
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 Limited Partnership £m The Great Ropemaker Partnership £m The Great Victoria Partnerships £m 2026 2026 2025
Total
At share
At share
£m
£m
£m
Balance sheets
Investment property 725.0 251.8 79.7 1,056.5 528.2 505.9
Current assets 0.8 4.3 0.3 5.4 2.7 2.1
Cash and cash equivalents 13.8 4.1 14.6 32.5 16.3 15.9
Balances from partners (188.1) (148.1) (73.1) (409.3) (204.6) (207.6)
Current liabilities (9.4) (8.9) (1.1) (19.4) (9.7) (11.6)
Obligations under head leases - - - - - (5.1)
Net assets 542.1 103.2 20.4 665.7 332.9 299.6
The GHS Limited Partnership £m The Great Ropemaker Partnership £m The Great Victoria Partnerships £m 2026 2026 2025
Total
At share
At share
£m
£m
£m
Income statements
Revenue 30.0 15.3 8.0 53.3 26.6 23.4
Net rental income 22.6 9.6 3.9 36.1 18.0 15.9
Other income 2.0 - 1.1 3.1 1.6 -
Property and administration costs (1.3) (5.2) (1.2) (7.7) (3.9) (3.4)
Net finance costs (7.7) (2.5) 0.3 (9.9) (4.9) (5.2)
Share of profit from joint ventures 15.6 1.9 4.1 21.6 10.8 7.3
Loss on sale of investment properties - (1.2) - (1.2) (0.6) -
Revaluation of investment property 60.5 (8.1) (6.2) 46.2 23.1 14.5
Results of joint ventures 76.1 (7.4) (2.1) 66.6 33.3 21.8
At 31 March 2026 and 31 March 2025, 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:
2026 2025
£m
£m
Movement on joint venture balances during the year 3.0 5.9
Balances receivable at the year end from joint ventures (204.6) (207.6)
Interest on balances with partners (see note 6) 5.6 5.7
Distributions - -
Joint venture fees paid (see note 3) 4.2 2.5
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 £nil (2025: £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 £528.2 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,
13 and 16 for more information on the valuation of investment properties and
expected credit losses in joint ventures.
At 31 March 2026, the Group had £nil contingent liabilities arising in its
joint ventures (2025: £nil). At 31 March 2026, the Group had capital
commitments in respect of its joint ventures of £12.3 million (2025: £nil).
12 Other investments
2026 2025
£m
£m
At 1 April 2.8 2.4
Acquisitions 0.4 0.8
Surplus/(deficit) on revaluation 0.4 (0.4)
At 31 March 3.6 2.8
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
2026, the Group had made net investments of £3.7 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.
13 Trade and other receivables
2026 2025
£m
£m
Trade receivables 5.4 3.8
Expected credit loss allowance - (0.1)
5.4 3.7
Prepayments 1.1 0.1
Other taxes 23.2 8.4
Other receivables 6.3 8.5
36.0 20.7
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 £5.4 million, £1.7 million (2025: £1.6
million) was past due, of which £1.6 million was over 30 days (2025: £1.2
million).
2026 2025
£m
£m
Movements in expected credit loss allowance
Balance at the beginning of the year (0.1) (0.3)
Expected credit loss allowance during the year (0.1) (0.2)
Amounts written-off as uncollectable 0.2 0.4
- (0.1)
The expected credit loss for the year represents 4% (2025: 3%) of the net
trade receivables balance at the balance sheet date.
14 Trade and other payables
2026 2025
£m
£m
Rents received in advance 16.8 15.9
Accrued capital expenditure 42.5 26.0
Payables in respect of customer rent deposits 20.5 18.7
Other accruals 22.1 20.7
Other payables 5.7 4.2
107.6 85.5
The Directors consider that the carrying amount of trade payables approximates
their fair value.
15 Interest-bearing loans and borrowings
2026 2025
£m
£m
Non-current liabilities at amortised cost
Secured
£21.9 million 55⁄8% debenture stock 2029 21.9 21.9
Unsecured
£525.0 million revolving credit facility 2030 175.6 -
£450.0 million revolving credit facility 2025 - 149.4
£150.0 million revolving credit facility 2028 99.6 106.4
£75.0 million term loan 2027 - 74.7
£250.0 million 5.375% sustainable sterling bond 2031 247.0 246.5
£40.0 million 2.70% private placement notes 2028 40.0 40.0
£30.0 million 2.79% private placement notes 2030 30.0 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 124.5 124.4
Total interest-bearing loans and borrowings 793.4 848.0
The Group's £450 million unsecured revolving credit facility (RCF), which
would have matured in January 2027, carried a floating rate of SONIA plus a
headline margin of 90 basis points, adjustable by ±2.5 basis points subject
to ESG-linked targets. This facility was replaced in October 2025 by a new
£525 million ESG-linked unsecured RCF with a headline margin of 105 basis
points over SONIA, also subject to ESG performance adjustments. The new
facility has an initial five-year term, extendable to seven years at the
Group's request and subject to lender consent. In addition, the Group has a
separate £150 million ESG-linked RCF with a headline margin of 90 basis
points over SONIA. This facility was extended by one year in October 2025, now
maturing in October 2028, and may be extended by a further year, subject to
bank lender consent.
The Group's £75 million unsecured term loan, which had a margin of 175 basis
points over SONIA and was due to mature in September 2026, was repaid in full
in October 2025. The £200 million interest rate cap, designed to mitigate
rising rates while retaining the benefit of any reductions, also expired in
October 2025.
At 31 March 2026, the Group has committed cash and undrawn credit facilities
of £397.2 million (31 March 2025: £361.2 million). At 31 March 2026,
properties with a carrying value of £132.0 million (31 March 2025: £114.8
million) were secured under the Group's debenture stock.
At 31 March 2026, the nominal value of the Group's interest-bearing loans and
borrowing was £801.9 million (2025: £853.9 million), and the Group had
£395.0 million (2025: £343.0 million) of undrawn credit facilities.
16 Financial instruments
Categories of financial instrument Carrying Amounts recognised in income Gain/(loss) Carrying Amounts recognised in income Gain/(loss)
amount
statement
to equity
amount
statement
to equity
2026
2026
2026
2025
2025
2025
£m
£m
£m
£m
£m
£m
Other investments 3.6 0.4 - 2.8 (0.4) -
Interest rate cap - - - - (0.4) -
Assets at fair value 3.6 0.4 - 2.8 (0.8) -
Balances with joint ventures 204.6 5.6 - 207.6 5.7 -
Trade receivables 34.9 (0.1) - 20.6 (0.2) -
Cash and cash equivalents 22.7 0.4 - 36.9 1.5 -
Assets at amortised cost 262.2 5.9 - 265.1 7.0 -
Trade and other payables (5.7) - - (4.2) - -
Payables in respect of customer rent deposits (20.5) - - (18.7) - -
Interest-bearing loans and borrowings (793.4) (7.7) - (848.0) (9.6) -
Obligations under finance leases (84.6) (3.2) - (87.0) (3.1) -
Liabilities at amortised cost (904.2) (10.9) - (957.9) (12.7) -
Total financial instruments (638.4) (4.6) - (690.0) (6.5) -
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% and 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 20% of the Group's rental income. Details of the Group's receivables, and
the associated expected credit loss, are summarised in notes 11 and 13 of
these 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 these 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 2026 actuals
Group
Net gearing (see note 9) <125% 37.7%
Inner borrowing (unencumbered asset value/unsecured borrowings) >1.66x 2.93x
Interest cover >1.35x 22.82x
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 £395.0 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 2026 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 25.3 1.2 1.2 22.9 -
£525.0 million revolving credit facility 175.6 224.2 9.7 9.7 204.8 -
£150.0 million revolving credit facility 99.6 112.4 4.8 4.8 102.8 -
£250.0 million 5.375% sterling bond 2031 247.0 323.6 13.4 13.4 40.2 256.6
Private placement notes 249.3 300.5 7.0 7.0 87.3 199.2
793.4 986.0 36.1 36.1 458.0 455.8
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
The maturity of lease obligations is set out in note 17.
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% and 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.
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 2026 was outstanding
for the whole year:
Impact on profit/(loss) Impact on equity
2026 2025 2026 2025
£m
£m
£m
£m
Increase of 50 basis points (1.4) (1.7) (1.4) (1.7)
Increase of 25 basis points (0.7) (0.8) (0.7) (0.8)
Decrease of 25 basis points 0.7 0.8 0.7 0.8
Decrease of 50 basis points 1.4 1.7 1.4 1.7
Fair value of interest-bearing loans and borrowings
Book value Fair value Book value Fair value
2026
2026
2025
2025
£m
£m
£m
£m
Items not carried at fair value
£21.9 million 55⁄8% debenture stock 2029 21.9 21.8 21.9 21.8
£450.0 million revolving credit facility - - 149.4 149.4
£525.0 million revolving credit facility 175.6 175.6 - -
£150.0 million revolving credit facility 99.6 99.6 106.4 106.4
£75.0 million term loan 2027 - - 74.7 74.7
£250.0 million 5.375% sustainable sterling bond 2031 247.0 248.3 246.5 244.5
Private placement notes 249.3 202.3 249.1 204.7
793.4 747.6 848.0 801.5
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 value 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 fixed interest rate Notional principal amount Fair value asset
2026 2025 2026 2025 2026 2025
%
%
£m
£m
£m
£m
Cash flow hedges
Interest rate cap - 5.094% - 200.0 - -
The Group's £200 million interest rate cap expired in October 2025.
17 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
2026
payments
lease
2025
payments
payments
£m
2026
payments
£m
2025
2026
£m
2025
£m
£m
£m
Less than one year 3.7 (3.7) - 3.5 (3.5) -
Between one and five years 14.7 (14.6) 0.1 14.2 (14.0) 0.2
More than five years 457.6 (373.1) 84.5 427.4 (340.6) 86.8
476.0 (391.4) 84.6 445.1 (358.1) 87.0
18 Share capital
2026 2026 2025 2025
Number
£m
Number
£m
Allotted, called up and fully paid ordinary shares of 155⁄19 pence
At 1 April 406,188,658 62.0 253,867,911 38.7
Issue of ordinary shares - rights issue - - 152,320,747 23.3
31 March 406,188,658 62.0 406,188,658 62.0
At 31 March 2026, the Company had 406,188,658 ordinary shares with a nominal
value of 155⁄19 pence each.
19 Investment in own shares
2026 2025
£m
£m
At 1 April (1.8) (5.6)
Employee share-based incentive charges (3.3) (4.2)
Shares purchased in year - 5.7
Transfer to retained earnings 5.4 2.3
At 31 March 0.3 (1.8)
The investment in the Company's own shares is held at cost and comprises
2,778,924 shares (2025: 2,893,542 shares) held by the Great Portland Estates
plc Employee Share Trust, which will vest for certain senior employees of the
Group if performance conditions are met. During the year, 76,577 shares (2025:
25,912 shares) vested to the Directors in respect of the 2022 Annual Bonus
Plan and no additional shares were acquired by the Trust (2025: 2,032,295
shares). The fair value of shares awarded and outstanding at 31 March 2026 was
£11.0 million (2025: £12.0 million).
Details of the outstanding Restricted Share Plans are set out below:
Date of Grant/Fair value (pence) At 1 April Granted Vested Lapsed/forfeit At 31 March Vesting dates
2025
No. of shares
No. of shares
No. of shares
2026
No. of shares
No. of shares
Long Term Incentive Plan
27 May 2022/645p 2,158,753 - - (2,158,753) - 26 May 2025
Restricted Share Plan
7 July 2023/422p 1,313,944 - - (231,021) 1,082,923 6 July 2026
24 November 2023/408p 12,401 - - (12,401) - 23 Nov 2026
20 June 2024/341p 1,383,675 - - (331,720) 1,051,955 19 June 2027
30 May 2025/331p - 1,475,011 - (324,467) 1,150,544 29 May 2028
4,868,773 1,475,011 - (3,058,362) 3,285,422
20 Cash and cash equivalents
2026 2025
£m
£m
Cash held at bank (unrestricted) 2.2 18.2
Amounts held in respect of customer rent deposits (restricted) 20.5 18.7
22.7 36.9
Amounts held in respect of customer rent deposits are subject to restrictions
as set out in the customer's lease agreement and therefore not available for
general use by the Group.
21 Notes to the Group statement of cash flows
Reconciliation of financing liabilities
1 April Cash Other 31 March
2025
movements
non-cash movements
2026
£m
£m
£m
£m
Long-term interest-bearing loans and borrowings 848.0 (56.8) 2.2 793.4
Obligations under leases 87.0 5.9 (8.3) 84.6
935.0 (50.9) (6.1) 878.0
1 April Cash Other 31 March
2024
movements
non-cash movements
2025
£m
£m
£m
£m
Long-term interest-bearing loans and borrowings 565.4 280.5 2.1 848.0
Short-term interest-bearing loans and borrowings 175.0 (175.0) - -
Obligations under leases 75.1 9.8 2.1 87.0
815.5 115.3 4.2 935.0
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:
2026 2025
£m
£m
Surplus from investment property (99.4) (83.2)
(Surplus)/deficit on revaluation of other investments (0.4) 0.4
Employee share-based incentive charge 3.3 4.2
Spreading of lease incentives (0.8) 1.0
Share of results of joint ventures (33.3) (21.8)
Depreciation 0.8 1.7
Other 0.2 (0.7)
Adjustments for non-cash items (129.6) (98.4)
22 Dividends
2026 2025
£m
£m
Dividends paid
Interim dividend for the year ended 31 March 2026 of 2.9 pence per share 11.7 -
Final dividend for the year ended 31 March 2025 of 5.0 pence per share 20.2 -
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
31.9 31.8
A final dividend of 5.3 pence per share was approved by the Board on 20 May
2026 and, subject to shareholder approval, will be paid on 10 July 2026 to
shareholders on the register on 5 June 2026. The dividend is not recognised as
a liability at 31 March 2026. The 2025 final dividend and the 2025 interim
dividend are included within the Group statement of changes in equity.
23 Lease receivables
Future aggregate minimum rentals receivable under non-cancellable leases are:
2026 2025
£m
£m
The Group as a lessor
Less than one year 79.8 76.6
Between one and two years 42.3 55.7
Between two and three years 27.9 40.7
Between three and four years 37.5 29.5
Between four and five years 31.6 21.2
More than five years 390.9 65.8
610.0 289.5
The Group leases its investment properties under operating leases. The
weighted average length of lease at 31 March 2026 was 5.9 years (2025: 3.0
years). All investment properties, except those under development, generated
rental income, and £nil contingent rents were recognised in the year (2025:
£nil).
24 Employee benefits
The Group operates a UK-funded approved defined contribution plan. The Group's
contribution for the year was £2.5 million (2025: £2.0 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 assets held in trusts are governed by local
regulation and practice. The Plan has been closed to new entrants since April
2002, and closed to further accrual from 1 April 2025. The duration of the
Plan is 13 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:
2026 2025
%
%
Discount rate 6.20 5.80
Expected rate of salary increases 4.30 4.10
RPI inflation 3.30 3.10
Rate of future pension increases 3.00 2.90
Life expectancy assumptions:
2026 2025
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:
2026 2025
£m
£m
Defined benefit obligation at 1 April 23.6 25.9
Service cost - 0.2
Past service cost - (0.4)
Interest cost 1.3 1.2
Effect of changes in demographic assumptions - 0.5
Effect of changes in financial assumptions (0.9) (2.7)
Effect of experience adjustments 0.2 -
Benefits paid (1.8) (1.1)
Present value of defined benefit obligation at 31 March 22.4 23.6
Changes to the fair value of the Plan assets are as follows:
2026 2025
£m
£m
Fair value of the Plan assets at 1 April 28.4 30.8
Interest income 1.5 1.5
Actuarial loss (0.6) (3.1)
Expenses paid from plan assets (0.1) -
Employer contributions - 0.3
Benefits paid (1.8) (1.1)
Fair value of the Plan assets at 31 March 27.4 28.4
Net pension asset 5.0 4.8
The gain recognised immediately in the Group statement of comprehensive income
was £0.1 million (2025: £0.8 million loss).
The amount recognised in the balance sheet in respect of the Plan is as
follows:
2026 2025
£m
£m
Present value of unfunded obligations (22.4) (23.6)
Fair value of the Plan assets 27.4 28.4
Pension asset 5.0 4.8
Amounts recognised as administration expenses in the income statement are as
follows:
2026 2025
£m
£m
Service cost - (0.2)
Past service cost - 0.4
Net interest income 0.3 0.3
0.3 0.5
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:
2026 2025
£m
£m
Cash 0.2 0.1
Equities 1.5 1.2
Bonds 24.2 25.8
Other 1.5 1.3
27.4 28.4
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:
2026 2025
£m
£m
Discount rate -0.25% 23.8 25.2
Discount rate +0.25% 21.1 22.3
RPI inflation -0.25% 22.1 23.4
RPI inflation +0.25% 22.7 24.0
Post-retirement mortality assumption - one year age rating 23.2 24.6
Given the Plan surplus, the Group has agreed to pause contributions to the
Plan. Accordingly, the Group expects to contribute £nil (2025: £nil) to the
Plan in the year ending 31 March 2027. The expected total benefit payments for
the year ending 31 March 2027 is £2.0 million, rising to around £2.2 million
per annum over the next five years. A total of around £13.1 million is
expected to be paid over the subsequent five-year period.
25 Reserves
The following describes the nature and purpose of each reserve within equity:
Share capital: The nominal value of the Company's issued share capital,
comprising 15 5⁄19 pence ordinary shares.
Share premium: Amount subscribed for share capital in excess of nominal value,
less directly attributable issue costs.
Capital redemption reserve: Amount equivalent to the nominal value of the
Company's own shares acquired as a result of share 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 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 venture balances), expressed as a percentage of the market value of the
property portfolio (including our share of joint ventures).
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.
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.
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
The element of the portfolio that has been held for the whole of the period of
account.
MSCI
Morgan Stanley Capital International is a company that produces an independent
benchmark of property returns.
MSCI central London
An index, compiled by MSCI, of the central and inner London properties in
their 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 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)
A measure of return based upon share price movement over the period and
assuming the reinvestment of dividends.
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.
Weighted Average Unexpired Lease Term (WAULT)
The Weighted Average Unexpired Lease Term expressed in years.
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