REG - Life Science REIT - Results for the 12 months ended 31 December 2024
16/04/2025 07:00
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RNS Number : 1859F Life Science REIT PLC 16 April 2025
16 April 2025
LEI: 213800RG7JNX7K8F7525
Life Science REIT plc
("Life Science REIT", the "Company" or, together with its subsidiaries, the
"Group")
Results for the 12 months ended 31 December 2024
Claire Boyle, Chair of Life Science REIT plc, commented: "As announced on 14
March 2025, the Board is currently undertaking a strategic review to consider
the future of the Company and to explore all options available to maximise
value for shareholders (the "Strategic Review").
The background to this decision was set out in that announcement and reflects
the significant headwinds the Company has faced since IPO, including higher
inflation and elevated interest rates, which have driven a fundamental
slowdown in leasing activity and negatively impacted investor sentiment.
Coupled with the Company's size and low levels of liquidity, these factors
have resulted in the Company's share price trading at a significant discount
to net asset value for a prolonged period of time.
The Board is confident that the Company's assets, which are focused on the
"Golden Triangle" research and development hubs of Oxford, Cambridge and
London's Knowledge Quarter, will prove attractive to a number of parties.
Given the uncertainty inherent in the possible outcomes of the Strategic
Review, these results have been prepared on a going concern basis with
material uncertainty.
In addition, in recent weeks, the Board has successfully reached an agreement
with Ironstone Asset Management ("Ironstone"), the Company's Investment
Adviser on a revision of the Investment Advisory Agreement, which will deliver
cost savings of c. £1.0 million per annum based on the December 2024 net
asset value.
In the meantime, the team remains sharply focused on capturing upside from the
portfolio; £1.5 million of contracted rent has been captured since the
interim results in September 2024, a further £1.1 million is in solicitors'
hands, and occupier engagement is encouraging."
STRATEGIC REVIEW
Strategic Review underway
· Commenced 14 March 2025 to explore all strategic options available
to maximise value for shareholders, including a possible sale or managed wind
down of the Company
FINANCIAL HIGHLIGHTS
Development and leasing progress supporting rental growth, but slower than
expected
· Contracted rent for the investment portfolio increased to £15.3
million (31 December 2023: £14.0 million), with a further £0.6 million from
developments, taking total contracted rent to £15.9 million
· Adjusted earnings of £5.9 million (31 December 2023: £6.7
million), impacted by higher financing costs
· Adjusted EPS of 1.7 pence per share (31 December 2023: 1.9 pence
per share)
· Future dividends suspended pending the outcome of the Strategic
Review
Valuations stabilising in the second half with yield expansion reducing
· Portfolio value £385.2 million (31 December 2023: £382.3
million), a £2.9 million increase on an absolute basis
o H224 like-for-like decline of 0.3% compared to a 3.8% decline in H124
· Like-for-like valuation down 4.0% driven by 30bps outward movement
in the net equivalent yield ("NEY") to 5.6%, more pronounced in H1, partially
offset by like-for-like ERV growth of 13.7%
o Laboratory space down 3.7%, with ERV growth strong at 8.6%;
o Space defined as offices down 5.3%
· EPRA net tangible asset per share of 74.4 pence (31 December 2023:
79.9 pence per share); reflecting the portfolio revaluation loss (£17.4
million) and dividend payments (£7.0 million), partially offset by positive
adjusted earnings
Balance sheet:
· Loan to value at 30.4% (31 December 2023: 24.7%), with the increase
driven by development progress in the year and corresponding debt drawn
· Debt fully hedged at 4.5% interest payable to March 2025 and 5.5%
until September 2025
OPERATIONAL HIGHLIGHTS
Leasing activity improved, but transactions taking longer to conclude than
expected:
· Five new leases commenced in 2024, adding £1.9 million to total
contracted rent
· Occupancy increased to 84.4% (31 December 2023: 79.0%); like-for-like
occupancy increased to 83.6% (31 December 2023: 79.0%)
· Since the interim results in September 2024, £1.5 million of new
rent has been captured, compared to the target set of £3.2 million, with a
further £1.1 million in solicitors' hands
· Current contracted rent increased to £16.5 million, including breaks
exercised at Rolling Stock Yard of £0.7 million
· Cambourne repurposing project completed, delivering 8,800 sq ft of
fully fitted space
· 57,000 sq ft completed at Oxford Technology Park (fully let to
Fortescue Zero Ltd); formal practical completion of Buildings 6 - 9 comprising
183,000 sq ft delayed to Q2 2025, but unit 6A is effectively complete and
fully let
Embedded opportunities to drive future rents through development, repurposing
and capturing reversion
· Target portfolio ERV of £27.9 million, representing an uplift on
the December 2024 total portfolio contracted rent of £12.0 million,
comprising:
o Embedded reversion of 23.2% on let space, equating to £3.6 million
additional rent;
o £3.5 million to come from completed developments and repurposing
activities;
o £3.1 million ERV from development assets, completing Q2 2025;
o £1.8 million ERV from development land
Commitment to developing sustainable buildings:
· 100% of properties EPC A-C rated (31 December 2023: 87%)
· Received EPRA sBPR gold for 2023 sustainability reporting and rated
A by MSCI
FINANCIAL HIGHLIGHTS(1) Year ended Year ended
31 December 2024 31 December 2023
Gross property income £16.3m £15.5m
IFRS profit/(loss) before tax £(14.0)m £(21.9)m
IFRS earnings/(loss) per share (4.0)p (6.2)p
EPRA earnings per share 1.7p 1.7p
Adjusted earnings per share 1.7p 1.9p
Dividends per share(2) 1.0p 2.0p
As at As at
31 December 31 December 2023
2024
Portfolio valuation £385.2m £382.3m
IFRS net asset value £262.8m £283.7m
IFRS net asset value per share 75.1p 81.1p
EPRA net tangible assets £260.4m £279.7m
EPRA net tangible assets per share 74.4p 79.9p
Loan to value ratio 30.4% 24.7%
Total accounting return (4.4)% (6.8)%
OPERATIONAL HIGHLIGHTS - INVESTMENT ASSETS As at As at
31 December 31 December 2023
2024
Contracted rent roll £15.3m £14.0m
Estimated rental value £22.4m £19.6m
Occupancy 84.4% 79.0%
WAULT to expiry 5.3 years 5.8 years
WAULT to first break 3.1 years 3.8 years
Net equivalent yield 5.6% 5.3%
1. The Group presents EPRA Best Practices Recommendations as Alternative
Performance Measures ("APMs") to assist stakeholders in assessing performance
alongside the Group's statutory results reported under IFRS. APMs are among
the key performance indicators used by the Board to assess the Group's
performance and are used by research analysts covering the Group. EPRA Best
Practices Recommendations have been disclosed to facilitate comparison with
the Group's peers through consistent reporting of key real estate specific
performance measures. However, these are not intended as a substitute for IFRS
measures. Please see the unaudited supplementary notes for further details on
APMs.
2. This is the total of dividends paid and declared in respect of the
year to 31 December 2024. Dividends paid during 2024 totalled 2.0 pence per
share, comprising the 1.0 pence per share second interim dividend for 2023 and
the 1.0 pence per share interim dividend for 2024. Dividends paid in 2023
totalled 2.0 pence per share.
Enquiries:
Ironstone Asset Management - Investment Adviser +44 20 3011 2160
Simon Farnsworth, Managing Director
Simon.farnsworth@ironstoneam.com
Joanna Waddingham, Head of Investor Relations and Corporate Affairs
Joanna.Waddingham@ironstoneam.com
MUFG Corporate Governance Limited - Company Secretary
labs_cosec@cm.mpms.mufg.com
Panmure Liberum - Financial Adviser & Corporate Broker +44 20 7886 2500
Alex Collins / Tom Scrivens
G10 Capital Limited - AIFM +44 20 7397 5450
Maria Baldwin
FTI Consulting - Financial PR +44 20 3727 1000
Dido Laurimore / Richard Gotla / Oliver Parsons
LifeScienceReit@fticonsulting.com
Notes to editors
Life Science REIT plc is a specialist property business focused on the UK's
growing life science sector. The Company's portfolio of assets is located
across the "Golden Triangle" of research and development hubs in Oxford,
Cambridge and London's Knowledge Quarter.
Life Science REIT trades on the Main Market of the London Stock Exchange under
the ticker LABS.
Chair's Statement
A Strategic Review of the Company is underway
On 14 March 2025, the Company announced that it was undertaking a Strategic
Review to consider the future of the Company and to explore all options
available to maximise value for shareholders.
The background to that decision includes the significant headwinds the Company
has faced since IPO, including higher inflation and elevated interest rates,
as well as the Company's size and low levels of liquidity, which have resulted
in the share price trading at a significant discount to net asset value for a
prolonged period of time.
The outcome of the Strategic Review may include a potential sale of the whole
business or a managed wind down of the Company. This has led to a material
uncertainty casting significant doubt over the Group's ability to continue as
a going concern for the next 12 months, which is explained in detail in the
going concern and viability statement below.
Introduction and market context
As announced on 14 March 2025, the Board is currently undertaking a strategic
review to consider the future of the Company and to explore all options
available to maximise value for shareholders (the "Strategic Review").
The background to this decision was set out in that announcement and reflects
the significant headwinds the Company has faced since IPO, including higher
inflation and elevated interest rates, which have driven a fundamental
slowdown in leasing and negatively impacted investor sentiment. Coupled with
the Company's size and low levels of liquidity, these factors resulted in the
Company's share price trading at a significant discount to net asset value for
a prolonged period of time.
The Board has confidence that the Company's assets, which are focused on the
"Golden Triangle" research and development hubs of Oxford, Cambridge and
London's Knowledge Quarter, will prove attractive to a number of parties.
In addition, in recent weeks, the Board has successfully reached agreement
with Ironstone, the Company's Investment Adviser on a revision of the
Investment Advisory Agreement, which will deliver cost savings of c. £1.0
million per annum, based on December 2024 NAV.
Life sciences leasing market
2024 was a challenging year for leasing across the Golden Triangle, with life
sciences take up of 460,000 sq ft, just over half the amount of 2023. The
uptick in confidence which followed the general election proved short-lived
and sentiment weakened post the budget. However, the Government has
demonstrated its support for the sector, with planned investment into the
Oxford and Cambridge region, including a new rail link, and the funding
environment has strengthened.
In 2024, £3.7 billion was raised for UK biotech funding, making it the
strongest year since the 2021 peak. £2.2 billion was raised through VC
funding and a further £1.5 billion was raised through follow on financings,
suggesting a preference for well established, lower risk ventures. Inevitably
it takes time for the impact of a successful fund raise to filter through to
real estate decision making, but by the end of 2024, 300,000 sq ft of space
was under offer to life sciences companies.
Strategy and operations
Our priorities over the year were to progress our leasing programme, deliver
life science space and maintain a sound financial position.
After a challenging first half, our markets were more stable in the second
half of the year and occupier interest has remained at encouraging levels
since the year end. However, leasing transactions typically take longer to
conclude in the life sciences space, where fit outs can be more complicated,
and occupiers tend to be emerging businesses with less property and legal
expertise. Coupled with heightened macro uncertainty towards the end of the
year, our leasing activity has therefore fallen short of our target of £3.2
million of contracted rent to be added between September 2024 and March 2025.
We have however delivered a further £1.5 million of contracted rent in that
time period, and we have a further £1.1 million in solicitors' hands.
Over the course of the financial year, £1.9 million of new leases commenced
across the portfolio, bringing total contracted rent for all assets to £15.9
million compared to £15.1 million at the end of 2023. Post year end activity
has further increased contracted rent to £16.5 million, including breaks
exercised at Rolling Stock Yard, one lease expiry and reversion captured. This
compares to a target estimated rental value for the portfolio of £27.9
million when fully developed and let, underpinning our conviction in the value
our portfolio can deliver over time.
Our strategy of creating dedicated life science space has made progress with
the repurposing project at Cambourne Park, covering 8,800 sq ft, reaching
practical completion in the year. However, delays to the delivery of the next
phase of power at Oxford Technology Park ("OTP") meant we were unable to
formally complete Unit 6B at Building 6 and Buildings 7, 8 and 9 by the year
end, although power has now been connected to site and practical completion of
all Buildings is expected in Q225.
We have maintained a flexible approach with respect to Buildings 10 and 11 and
are working with the developer to agree a final design and programme.
Financial performance
The total value of the portfolio stood at £385.2 million as at 31 December
2024, up marginally on an absolute basis, but with the investment portfolio
down 4.0% on a like-for-like basis, driven by 30 basis points of yield
expansion, partially offset by like-for-like ERV growth of 8.6%. However, we
are encouraged that the rate of decline has continued to slow, to just 0.3% in
the second half, from 3.8% in the first half.
The group reported a 4.3% increase in net rental income to £14.4 million
during the period, driven by new leases commencing in the year, with some rent
lost through an asset sold last year. Total costs were lower, driven by a
reduction in the Investment Adviser's fee, however, net finance costs were
higher in the year resulting in adjusted earnings of £5.9 million, below the
prior year (2023: £6.7 million).
As a result of the delays to leasing activity, and the expectation that
further lease incentives, including rent free periods, will be required to
secure further leases, and the associated impact on cash flow, the Company has
decided to suspend any future dividends until the Strategic Review has been
completed. Total dividends declared for the 2024 year are therefore 1.0 pence
per share.
Environmental, social and governance
Last year we set out our commitment to be net zero in scope 1 and 2 carbon
emissions by 2040 and in scope 3 emissions by 2045. This year, we have made
good progress on initiatives which will support that. These include our
renewable energy project at OTP, where we are working with a supplier to own
and operate photovoltaic panels across the park. All our space is now EPC A to
C rated and our developments are all tracking BREEAM Excellent certifications.
Our progress has been reflected in our MSCI ESG ratings performance, which has
improved from a B to an A, an increase of three ratings, as well as achieving
a gold award in the EPRA Sustainability Best Practice Ratings, up from a
Silver in the prior year.
Conclusion
We have assembled a highly attractive portfolio, with excellent locations in
the Golden Triangle and embedded opportunities to develop and repurpose our
space over time. Our assets are focused on a market which is structurally well
supported in terms of long-term demand drivers and constrained supply.
However, an unfavourable macro environment, combined with the Company's size
and low levels of liquidity have proved challenging to our business model.
Through the Strategic Review process, the Board will be evaluating a range of
options to maximise value for shareholders. These may include a potential sale
or managed wind down of the Company. The Strategic Review is ongoing and the
Board will provide further updates to the market as appropriate.
Claire Boyle | Chair
15 April 2025
Objectives and strategy
Our activities over the year have been focused on our broader purpose of
creating space for science. We have three key strategic priorities we have
progressed, but more broadly, our activities cover four areas:
• Investment,
• Asset Management,
• Financing
• and Sustainability
Our strategic priorities
1. Creating life science space
We create space for life sciences businesses through development of new space
or repurposing of existing office space.
• 57,000 sq ft of new developments completed at OTP in 2024
• Further 183,000 sq ft of development space due to complete at OTP in
Q2 2025
• 8,800 sq ft repurposed at Cambourne Park into four fully fitted
laboratories
• Further potential repurposing options at Cambourne Park
2. Further leasing progress
Despite a challenging leasing market, particularly in the first half of 2024,
our leasing activity has increased occupancy to 84.4% from 79.0%.
Many of the transactions underway in 2024 completed early in 2025:
• 94,700 sq ft let at OTP in 2024 with a further 5,600 sq ft post year
end
• 17,200 sq ft let at Cambourne Park, post year end
• 5,100 sq ft let at Rolling Stock Yard, post year end
3. Financing
Maintaining a sound financial position supports our ability to deliver on our
strategy.
• At 30.4%, our LTV is at the lower end of the range we consider
acceptable, of 30.0%-40.0%
• All debt fully hedged against SONIA
• Dividend rebased to provide the financial flexibility to progress
strategy
• Post year end, dividends have been suspended pending the outcome of
the Strategic Review
Key performance indicators
Operational KPIs
Occupancy (%) Like-for-like rental income movement (%) Like-for-like valuation movement (%) Like-for-like energy intensity (%)
2024: 84.4% 2024: 5.7% 2024: (4.0)% 2024: (15)%
2023: 79.0% 2023: 2.4% 2023: (7.1)% 2023: 15.0%
2022: 82.0% 2022: 1.2% 2022: (1.8)% 2022: N/A
Description Description Description Description
Total open market rental value of the units leased divided by total open The change in contracted rent of properties owned throughout the period under The change in the valuation of properties owned throughout the period under The like-for-like change in landlord procured and generated energy intensity,
market rental value, excluding development property and land, and equivalent review, as a percentage of the contracted rent at the start of the period, review, expressed as a percentage of the valuation at the start of the period, measured in MWh/m(2).
to one minus the EPRA vacancy rate. excluding acquisitions, disposals, development property and land. and net of capital expenditure.
Relevance to our strategy Relevance to our strategy Relevance to our strategy Relevance to our strategy
Shows our ability to retain occupiers at renewal and to let vacant space, Shows our ability to identify and acquire attractive properties and grow rents A high-quality portfolio and an active asset management programme will help Our decarbonisation targets were set in 2023 with the Group committing to
balanced with the need for vacancy to carry out asset management initiatives. over time. improve asset values and provide future resilience. being net zero in scope 1 & 2 by 2040 and in scope 3 by 2045. This measure
helps monitor progress.
Performance Performance Performance Performance
The change in occupancy reflects the net impact of new leases in the year and At 31 December 2024, like-for-like rental income had increased by 5.7% The portfolio valuation decreased by 4.0% on a like‑for‑like basis, driven The significant improvement in energy intensity was driven by an improvement
the practical completion of new space at OTP. On a like-for-like basis, compared to the prior year. The letting to Infleqtion at OTP slightly offset primarily by an outward yield shift of 30 basis points during 2024, with in the operational efficiency at Herbrand Street, which accounted for 87% of
occupancy has increased 4.6 percentage points to 83.6% at the year end. by ProCam downsizing at Cambourne drove this increase. laboratory space proving more resilient at a 3.7% decline. The second half of the total LFL reduction. This follows close engagement with the occupier.
2024 stabilised, with only a 0.3% like-for-like decline.
Financial KPIs
Total cost ratio (%) EPRA NTA Loan to value Total accounting
per share (p)
ratio (%)
return (%)
2024: 40.8% 2024: 74.4p 2024: 30.4% 2024: (4.4)%
2023: 44.2% 2023: 79.9p 2023: 24.7% 2023: (6.8)%
2022: 58.9% 2022: 90.p 2022: 16.8% 2022: (9.1)%
Description Description Description Description
EPRA cost ratio including direct vacancy costs but excluding one-off costs. This net asset value measure includes adjustments for the fair values of Gross debt less cash, short‑term deposits, divided by the aggregate value of The movement in EPRA NTA over a period plus dividends paid in the period,
The EPRA cost ratio is the sum of property expenses and administration certain financial derivatives and assumes entities buy and sell assets, properties and investments. expressed as a percentage of the EPRA NTA at the start of the period.
expenses, as a percentage of gross rental income. thereby crystallising certain levels of deferred tax liability.
Relevance to our strategy Relevance to our strategy Relevance to our strategy Relevance to our strategy
Shows our ability to effectively manage our cost base, which in turn supports Reflects our ability to add value by acquiring well and through asset Shows our ability to balance the additional portfolio diversification and Shows our ability to construct a portfolio that delivers a secure and growing
dividend payments and shareholder returns. management, which in turn increases our resilience during market downturns. returns that come from using debt, with the need to manage risk through return to shareholders. Our target is in excess of 10.0% per annum, through a
prudent financing. combination of dividends and growth in NAV.
Performance Performance Performance Performance
The increase in net rental income was the key driver for the reduction in the The decline was primarily the result of dividends paid and the loss on The LTV remains at a prudent level of 30.4%, at the lower of our 30%‑40% We paid dividends of 2.0 pence per share and delivered adjusted earnings of
total cost ratio of 3.4%. This will continue to reduce as we complete and let revaluation of the portfolio, partially offset by positive earnings in the target range. The increase in the year was driven by the ongoing development £5.9 million (2023: £6.7 million). Despite this, a decline in NAV driven by
new space at OTP and repurpose space at our other assets to labs. year. at OTP and other asset management initiatives including repurposing space to revaluation losses in both the current year and prior year has resulted in
labs at Cambourne. negative total accounting returns. There is however a 2.4% improvement year on
year.
Investment Adviser's report
Implementing the investment strategy
Leasing performance
In line with the wider market, leasing activity was slower in the first half
of the year, with uncertainty ahead of the general election causing occupiers
to postpone decisions where possible. Activity began to pick up in the second
half and whilst confidence has been impacted by the budget, demand has been
stable for the remainder of the period, albeit deals are taking longer to
conclude.
During the year to 31 December 2024, four new leases commenced, comprising:
• Two leases covering 57,016 sq ft to Fortescue Zero Limited
("Fortescue") at Building 5 at Oxford Technology Park ("OTP"), which will
generate £1.1 million of contracted rent
• A 7,497 sq ft lease to Infleqtion in the IQ at OTP for £0.3 million
• A 30,156 sq ft lease to Oxford Ionics Limited in unit 6A of Building
6 at OTP for £0.6 million; this unit has completed but the building is
categorised as a development until full completion
In addition, a new lease was agreed with Pro Cam UK Limited ("Pro Cam"), who
downsized from its 7,400 sq ft unit in Cambourne Building 2020 to a 4,300 sq
ft unit in Building 2030 at an increased rent of £25.0 per sq ft (up 8.2%
from their previous rent of £23.1 per sq ft). The new lease has a five year
term with an increase in rent to £30.0 per sq ft in year four.
The contracted rent roll for the investment assets at the year end therefore
increased by £1.3 million or 9.3% to £15.3 million (31 December 2023: £14.0
million) with a further £0.6 million let on development assets.
Since the year end, the following leases have completed:
• CFDX Limited ("CFDX") have taken 5,100 sq ft of fully fitted space at
Rolling Stock Yard ("RSY") for £110.0 per sq ft on an eight year lease with a
four year break. This lease completed in February 2025.
• 42 Technology Limited ("42T") signed a 10 year lease, also in
February 2025, for 17,200 sq ft at Building 1020 in Cambourne paying a rent of
£25.5 per sq ft.
In addition, an agreement for lease with Oxford Expression Technologies
Limited ("OET") for 5,600 sq ft of fully fitted space, was signed at the IQ at
OTP. The ten year lease, at £46.5 per sq ft sets a new record for the park.
Post year end one regear and one lease extension have also completed,
extending the Group average lease length:
• Carl Zeiss at Cambourne agreed a new lease on expiry of their current
lease in 2028, adding a further five years to the term with the rent subject
to review in 2028.
Post year end leasing activity, including breaks exercised at Rolling Stock
Yard, one lease expiry and reversion captured brings total current rent to
£16.5 million.
Investment property or development property and land Total portfolio
31 December 2024
£m
Contracted rent Investment 15.3
Contracted rent Development 0.6
Contracted rent - total portfolio 15.9
Inbuilt reversion in current leases Investment 3.6
Letting vacant space at Oxford Technology Park, Cambourne and Rolling Stock Investment 3.5
Yard
Letting developments currently on-site Development 3.1
(Unit 6B and Buildings 7 to 9 at OTP)
Letting future developments Development 1.8
(Buildings 10 and 11 at OTP)
Target estimated rental value 27.9
Potential for strong income growth
The target total portfolio ERV was £27.9 million at 31 December 2024 (31
December 2023: £26.2 million), split £22.4 million investment assets ERV (31
December 2023: £19.6 million) and £5.5 million development assets (31
December 2023: £6.6 million). The investment assets ERV is £7.1 million
above the contracted rent of £15.3 million, with £3.5 million of the
difference resulting from vacant space at the year end and £3.6 million
reflecting the reversionary potential of the portfolio. The let area in the
investment assets portfolio has a reversionary percentage of 23.2% and
like-for-like ERV growth during 2024 was 8.6%.
At the time of the interim results in September 2024, the Investment Adviser
estimated that a further £3.2 million of contracted rent would be secured
over the six months to March 2025 and a total of £8.1 million to September
2025. As at the date of this report, an additional £1.5 million of contracted
rent has been added to the rent roll, £1.1 million is currently in
solicitors' hands offset by a £0.7 million reduction due to an occupier
exercising their break and one lease expiry post year end.
The Group's occupiers
As we successfully implement the asset management strategy, the proportion of
the Group's assets leased to life science occupiers continues to grow, with
54.3% of the Group's contracted rent attributed to life science occupiers as
at 31 December 2024 (31 December 2023: 53.5%).
During the year, two new life science occupiers took occupation at our assets
amounting to 37,700 sq ft, and £0.9 million of additional contracted rent.
These new occupiers included:
• Oxford Ionics, which is a high-performance quantum computing company,
which has taken space in Building 6 at OTP.
• Infleqtion, another quantum technology company that uses atomic
physics to build quantum computers and integrate them across networks.
Infleqtion has taken space in the IQ at OTP.
In addition to the above, the three largest life science occupiers by
contracted rent at the year end were:
• Beacon Therapeutics, a clinical-stage company owned by Novartis,
developing gene therapies to treat diseases of the eye that cause vision loss
and blindness who occupy three floors in Rolling Stock Yard;
• Fortescue, a technology and engineering services provider delivering
innovative solutions to a range of sectors including green energy, medical
engineering and automotive, based at OTP; and
• Carl Zeiss, a leading technology enterprise, operating in the optics
and optoelectronics industries; the UK headquarters for its life science
businesses of microscopy, medical technology and consumer optics are in
Building 1030 at Cambourne.
Under the Group's investment policy, no occupier should account for more than
30.0% of the higher of gross contracted rents or the valuer's ERV of the
portfolio, including developments under forward-funding agreements. We remain
within this limit, with the largest occupier accounting for 26.2% of gross
contracted rents and 22.9% of the ERV at the year end. As we continue to
develop and lease OTP, the rent roll will further diversify and reduce the
proportion of total rents coming from individual occupiers.
Occupier Asset(1) Occupier Annual % of total
type(2)
contracted
rent
(£m)
Thought Machine Group Ltd HS Other 4.0 26.2%
Gyroscope Therapeutics Ltd RSY LS 1.5 10.0%
Fortescue Zero Ltd OTP LS 1.1 6.9%
Carl Zeiss Ltd CP LS 1.0 6.2%
Beacon Therapeutics Ltd RSY LS 0.8 5.3%
Xero (UK) Ltd RSY Other 0.7 4.7%
Cambridge Cambourne Centre Ltd (Regus) CP Other 0.7 4.5%
MTK Wireless Ltd CP LS 0.7 4.4%
Premier Inn Ltd OTP Other 0.7 4.3%
Native Antigen Company Ltd (LGC) OTP LS 0.5 3.5%
Subtotal - top ten 11.7 76.0%
Remaining 3.6 24.0%
Total(3) 15.3 100.0%
(1) HS - Herbrand Street; RSY - Rolling Stock Yard; CP - Cambourne Park
Science and Technology Campus; OTP - Oxford Technology Park.
(2) LS - Life Science occupier; Other - hotel and offices.
(3) Investment portfolio only. In addition, £0.6 million of contracted rent
has been agreed within development assets.
The portfolio
Well-located assets offering laboratory and office space
The portfolio is in strong locations within the Golden Triangle and primarily
comprises office and laboratory space. See below for the split of assets by
location and type as at 31 December 2024.
Asset location by valuation
· London 39.3%
· Oxford 38.0%
· Cambridge 22.7%
Life science exposure by contracted rent(1)
· Life science 56.0%
· Non-life science 44.0%
Life science occupier area by floor type(2)
· Office 53.9%
· Labs 46.1%
(1) Includes £0.6 million of contracted rent within development assets; life
science occupiers make up 54.3% of investment portfolio.
(2) 51.6% of portfolio area (including vacant space) currently let to life
science occupiers.
During the year there were no changes to the Group's portfolio, which
comprised the following assets at 31 December 2024:
Valuation WAULT Contracted rent
Asset £m £ per Area Occupancy to break to expiry £m p.a. £ PSF NIY NEY NRY
years
years
sq ft sq ft % % % %
OTP - Investments 89.9 378 237,900 70.8 7.2 10.4 3.4 19.3 3.6 5.4 5.5
Rolling Stock Yard 83.1 1,542 53,900 90.0 1.4 5.6 3.5 72.3 4.0 5.3 6.3
Cambourne 80.1 348 230,400 76.5 1.3 3.9 4.1 22.3 4.8 6.2 6.9
7-11 Herbrand Street 68.2 994 68,600 100.0 - 1.8 4.0 58.5 5.5 5.4 7.0
The Merrifield 7.4 589 12,600 100.0 2.0 7.0 0.3 23.1 3.7 5.4 6.0
Centre
Investment assets 328.7 545 603,400 84.4 3.1 5.3 15.3 31.3 4.4 5.6 6.4
OTP - Developments(1) 56.5 209 270,500(1) - - - - - - - -
Development 56.5 209 270,500 - - - - - - - -
assets
Total 385.2 441 873,900 - - - - - - - -
(1) Full build-out area.
OTP development assets comprise buildings under construction and the remaining
development land. The 270,500 sq ft shown in the table above is the expected
area of these assets once practically complete. At the year end, this related
to the remaining development land at OTP plus Buildings 6 to 9, which are due
to practically complete during H225. Unit 6A in Building 6 has reached
practical completion but is categorised as a development pending full
completion of the building.
Occupancy at the year end increased by 5.4 percentage points to 84.4% (31
December 2023: 79.0%). This increase was driven primarily by lettings in the
year at OTP. On a like-for-like basis, occupancy increased by 4.6 percentage
points to 83.6%.
The WAULT to expiry reduced by 0.5 years to 5.3 years (31 December 2023: 5.8
years), reflecting the natural reduction in remaining lease lengths over time
and the net effect of new leases in the year.
Valuation performance
The portfolio was independently valued by CBRE as at 31 December 2024, in
accordance with the internationally accepted RICS Valuation - Professional
Standards (the "Red Book").
The table below analyses the movement in valuation during the year:
Investment Development Total
assets
assets
£m
£m £m
Portfolio valuation at 31 December 2023 314.9 67.4 382.3
Capital expenditure 5.3 13.0 18.3
Finance costs capitalised 0.1 2.0 2.1
Movement in rent incentives (0.3) 0.2 (0.1)
Fair value losses on investment properties (12.5) (4.9) (17.4)
Transfer from development to investment 21.2 (21.2) -
Portfolio valuation at 31 December 2024 328.7 56.5 385.2
The portfolio valuation at the year end increased on an absolute basis by
£2.9 million to £385.2 million. The value of the investment portfolio
increased, driven primarily by the transfers of development assets at OTP
(Building 5), which reached practical completion during the year, partially
offset by outwards yield shift. This transfer resulted in a corresponding
reduction in the absolute value of the development assets. Capital expenditure
of £18.3 million primarily related to the development at OTP and repurposing
of space to labs at Cambourne. As a result of this expenditure, £2.1 million
of finance costs have been capitalised. Combined, all of these factors
resulted in a fair value loss of £17.4 million in 2024.
The table below analyses the key drivers of the valuation movement during 2024
compared to 2023 in further detail:
2024 2023 FY 2024 H124 H224
LFL LFL LFL
% % %
Investment assets
Valuation £m 328.7 314.9 (4.0)% (3.8)% (0.3)%
ERV £m 22.4 19.6 8.6% 8.2% 0.4%
NEY % 5.6 5.3 30bps 33bps 3bps
Development assets
Valuation £m 56.5 67.4 n/a n/a n/a
Total portfolio valuation £m 385.2 382.3 (4.0)% (3.8)% (0.3)%
£12.6 million of the £17.4 million fair value loss in the year is
attributable to the like-for-like portfolio, resulting in a 4.0% like-for-like
reduction in value for the year, but weighted towards the first half, when the
like-for-like reduction was 3.8% compared to 0.3% in the second half. This
performance reflects a stabilisation in yields, which expanded by 33bps in the
first half, but just 3 bps in the second half. Yield expansion was partially
offset by strong ERV growth of 8.6% for the year. These dynamics continue to
be reflective of the broader macro environment, with interest rates remaining
higher than expected over the year, resulting in further yield expansion,
notably on offices.
Space defined as laboratories for valuation purposes continued to be more
resilient, posting a like-for-like valuation decline of 3.7%, driven by a 27
basis points outward NEY shift which was partially offset by ERV growth of
13.7%. At the year end, this space represented 39.8% of the like-for-like
portfolio. Space defined as offices saw a valuation fall of 5.3% on a
like-for-like basis and reflected an outward NEY shift of 40 basis points.
On the remaining assets, the £4.8 million fair value loss reflected an inward
NEY shift of eight basis points following Building 5's completion and letting
to Fortescue Zero in the year, offset by development spend in the year. Based
upon 31 December 2024 valuations, there is up to a 70 basis points yield
variance in the vacant development space versus completed and let space. This
represents significant valuation upside to come once the vacant space is let,
assuming constant yields.
Implementing the asset management strategy
Cambourne Park Science and Technology Campus ("Cambourne")
The Group acquired Cambourne in 2021, with the intention of repositioning it
as a dedicated life science and technology hub. A key step in this evolution
is the repurposing of vacant ground floor office space in Building 2020 into
four fully fitted laboratories of around 2,200 sq ft each. The project reached
practical completion in the year and the space is now targeting rents of
£50.0 per sq ft, which compares to c. £25.0 per sq ft for typical office
space on the park. This smaller, fully fitted option is particularly
attractive to early-stage life science occupiers because it enables them to
spread the cost of fitting out space over time through higher rents and avoids
an upfront capital cost early in their lifecycle. However, the units can also
be combined to appeal to larger companies. The project improves the
environmental credentials of the buildings, including transitioning from gas
to electric power and is helping to drive an increase in the rental tone
across the park.
Post year end, we announced the letting of 17,200 sq ft of vacant office space
at Building 1020 to 42T, a product development and innovation consultancy
which delivers specialist technical solutions in healthcare & life
sciences, industrial and consumer sectors. We also announced a five year lease
extension to Carl Zeiss, our largest occupier on the park with 43,300 sq ft in
Building 1030. Carl Zeiss has recommitted until 2033 at the same rent, with a
rent review in 2028, and will be carrying out a number of sustainability
improvements to the building, including replacing gas boilers and installing
photovoltaic panels. This programme reflects its ambitious net zero
commitments.
Occupancy at Cambourne was 76.5% at year end (31 December 2023: 77.5%) and
increased to 83.3% following post year end leasing transactions.
Oxford Technology Park
OTP is 20-acre science and technology park strategically located in the Golden
Triangle, close to Oxford University and adjacent to Begbroke Science Park and
Oxford Airport. On acquisition in 2022, three of the planned buildings were
complete. Since then, 126,700 sq ft has been delivered; the Innovation Quarter
("IQ") completed in 2023 and Building 5 reached practical completion at the
start of 2024. Unit 6A in Building 6 has also reached practical completion but
is categorised as a development pending full completion of the whole building.
Unit 6B and Buildings 7 to 9 were expected to complete in FY 2024 but
connection to the local power grid was outstanding and these buildings are now
due to complete in Q2 2025.
The current rent roll of OTP is £4.0 million, including development lettings.
OTP has substantial scope to grow the Group's rental income in the near term.
The ERV of unlet space in the completed buildings and those due to complete
imminently (Buildings 6 to 9) is £4.6 million. Letting this space would
therefore increase the rent roll at OTP to £8.6 million. The existing leases
at OTP also have inbuilt reversion of £0.4 million.
Based on current designs, Buildings 10 and 11 have an ERV of a further £1.8
million. We have maintained a flexible approach with respect to Buildings 10
and 11 and are working with the developer to agree a final design and
programme. The existing planning consent is for two buildings of c. 43,500 sq
ft each, but the plots would also suit several smaller buildings or a single
larger building.
As noted above, we signed two new leases to Fortescue Zero in February 2024,
at an annual rent of £1.1 million or £20.1 per sq ft. The term is ten years,
with a break clause on half the space in year five and a rent review at the
end of the fifth year. The occupier has fitted out the building as offices and
R&D space.
Occupancy at OTP investment assets was 70.8% at year end (31 December 2023:
50.0%) with a further £0.6 million let in development assets. Since the year
end we signed an agreement for lease with OET who are taking 5,600 sq ft of
fully fitted space at £46.5 per sq ft.
Following strong demand for more amenities on site from existing and potential
occupiers, the Nexus cafe plus additional meeting space is due to complete at
the end of Q2 2025.
Rolling Stock Yard
RSY, located in London's Knowledge Quarter, offers office and fully fitted
laboratory space. Occupancy was 90.0% at the year end (31 December 2023:
87.3%) following increases in ERV during the year. The letting of the
remaining vacant space on the first floor has completed since the year end.
The 5,100 sq ft space was let to CFDX for £110.0 per sq ft adding £0.6
million to contracted rent, in line with ERV. The lease is for eight years
with an occupier's break at year four. For more on this new life science
occupier see leasing performance above. This letting would have taken the
occupancy of the building to 100.0%, however Xero (UK) Limited, who currently
occupies the seventh and eighth floors, has recently exercised its break and
vacated the scheme on 1 April 2025. We are in the process of marketing this
space to new occupiers.
7-11 Herbrand Street
Herbrand Street is an iconic Grade II listed building, in London's Knowledge
Quarter, fully let to Thought Machine. The lease runs until Q4 2026 and we are
actively engaged with the occupier ahead of this expiry to discuss options.
The Merrifield Centre
The Merrifield Centre is a fully let building just outside of Cambridge.
Astellas Engineered Small Molecules UK Limited, the occupier, has shown its
commitment to the asset by investing significant amounts in the building and
we have a well-established routine of occupier engagement. The lease expires
in December 2031, with a break in December 2026.
Resourcing for the Investment Adviser to support the Group's growth
As Investment Adviser, it is vital that we have the resources, knowledge and
skills to implement the Group's strategy. We have strengthened our leasing and
asset management team during the year with two new appointments, helping to
drive leasing activity. See leasing section above for further details.
Financial review
Financial performance
The Group's financial results are summarised below.
2024 2023
£m £m
Gross property income 16.3 15.5
Property operating expenses (1.9) (1.7)
Net rental income 14.4 13.8
Adjusted administration costs (4.8) (5.2)
Adjusted operating profit 9.6 8.6
Adjusted net finance costs (3.7) (2.0)
Tax - 0.1
Adjusted earnings 5.9 6.7
Exceptional finance costs - (1.5)
Fair value losses on derivatives and deferred premium (2.5) (3.8)
Fair value losses on investment properties (17.4) (22.8)
Loss on disposal of investment properties - (0.3)
IFRS loss after tax (14.0) (21.7)
Total gross property income in the year increased 5.2% to £16.3 million
(2023: £15.5 million), reflecting the new leases that commenced in the year
and a full 12 months of income from leases agreed in 2023, partially offset by
rent lost on Lumen House, which the Group sold in November 2023, and the
expiry of a rental guarantee at Rolling Stock Yard during the first half of
2023. The quality of the Group's occupier base is reflected in rent collection
of 99.8% in respect of the year.
Property operating expenses are primarily void costs on vacant units and
totalled £1.9 million (2023: £1.7 million), resulting in net rental income
of £14.4 million (2023: £13.8 million). On a like-for-like basis, net rental
income decreased by 3.8%, driven primarily by the write back of historical bad
debts at Cambourne that had been written off in prior years and were
subsequently collected in 2023 (note 4).
Administration costs of £4.8 million (2023: £5.2 million) include the
Investment Adviser's fee of £3.0 million (2023: £3.4 million), as well as
other costs of £1.8 million (2023: £1.8 million), including audit and
valuation fees, the Directors' fees and other corporate expenses.
The above results in a total cost ratio for the year (including direct vacancy
costs) of 40.8% (2023: 44.2%). Higher rental income was the key contributor to
the reduction versus 2023. We expect the ratio to further reduce as we
continue to lease up the buildings at OTP and realise the rental growth
potential elsewhere in the portfolio.
Adjusted net finance costs for the year were £3.7 million (2023: £2.0
million), comprising loan interest, expenses and arrangement fees of £9.8
million, partially offset by capitalised finance costs of £2.1 million and
adjusted finance income of £4.0 million.
As a REIT, the Group is not subject to corporation tax on its property rental
business. The estimated tax charge on its residual business was £nil (2023:
£0.1 million). Adjusted earnings for the year totalled £5.9 million (2023:
£6.7 million).
In 2023, the Group incurred exceptional one-off finance costs of £1.5
million, with £0.7 million relating to the write-off of unamortised
arrangement fees on the Group's debt facility, which was refinanced in June
2023, and an early repayment fee of £0.8 million on the Fairfield facility.
There were no exceptional finance costs in the year to 31 December 2024.
Fair value losses on derivatives and deferred premiums were £2.5 million
(2023: £3.8 million loss), relating to the Group's interest rate caps.
The unrealised loss on revaluation of investment properties was £17.4 million
(2023: £22.8 million loss). See the valuation section above for more
information.
The IFRS loss after tax for the year was £14.0 million (2023: £21.7 million
loss). This resulted in IFRS loss per share of 4.0 pence (2023: 6.2 pence
loss) and adjusted earnings per share ("EPS") of 1.7 pence (2023: 1.9 pence).
Dividends
The Company paid two dividends during 2024:
• In May 2024, the Company paid the second interim dividend of 1.0
pence per share in respect of the year to 31 December 2023.
• In October 2024, the Company paid the first interim dividend of 1.0
pence per share in respect of the year to 31 December 2024.
At 31 December 2024, the Group had distributable reserves of £326.9 million
(31 December 2023: £328.0 million), with the majority being in the Company.
Following the Board's announcement of a strategic review on 14 March 2025, all
future dividends have been suspended until the Strategic Review has been
concluded.
Net asset value
IFRS NAV was 75.1 pence per share at the year end (31 December 2023: 81.1
pence per share). The EPRA NTA at the year end was 74.4 pence per share (31
December 2023: 79.9 pence per share). The reduction in the EPRA NTA per share
was primarily the result of dividends paid and the revaluation loss, partially
offset by positive adjusted earnings. For further details on the revaluation
decline in the year see the valuation section above.
Debt financing
The Group has a £100.0 million term loan and a £50.0 million RCF, both of
which run to June 2026, with two one-year extension options. The Group also
has a £35.0 million accordion facility option available on the RCF. The
facilities are secured on all of the Group's assets, with £40.0 million of
the term loan defined as a Green loan in accordance with the LMA Green Loan
Principles.
The debt facility carries a cost of SONIA plus a 2.50% margin. The SONIA
reference rate has been capped at 2.00% per annum until March 2025. During the
year, the Group was slightly over hedged against SONIA. As a result, in
September 2024 the over hedged element of the existing caps were closed out
and the cap period extended for a further six months to September 2025,
capping SONIA at 3.00%. The net cost of this transaction was £0.3 million. In
addition, in December 2024 a further 2.00% cap was put in place for the
quarter ending December 2025 at a net cost of £0.8 million the payment of
which has been deferred to the cap period. As a result, the Group was hedged
100% for the next 12 months at the year end.
At 31 December 2024, £122.7 million of debt was drawn (31 December 2023:
£108.7 million), with the £100.0 million term loan fully drawn and £22.7
million drawn against the £50.0 million RCF. The Group also had cash and cash
equivalents of £5.6 million (31 December 2023: £14.3 million), giving a net
borrowings position of £117.1 million (31 December 2023: £94.4 million). LTV
was therefore 30.4% at the year end (31 December 2023: 24.7%).
At the year end there was £27.3 million undrawn on the RCF, of which £15.5
million is available to be drawn as at the reporting date with the balance
subject to future asset valuations. Including cash of £5.6 million this
provided liquidity of £32.9 million, covering committed costs to complete at
OTP of £27.4 million and uncommitted costs of £5.5 million. In addition, the
Group also has a £35.0 million accordion facility which can potentially be
used for future capital expenditure projects. The facility will be drawn as
required to meet funding requirements whilst minimising interest costs.
Compliance with the investment policy
The Group's investment policy is set out in full in the Annual Report. The key
elements of the policy are summarised below. We complied with the policy
throughout the year:
Policy element Compliance in the period
Invest in a diversified portfolio of properties across the UK which are Yes. All the properties are in the Golden Triangle and are either leased or
typically leased or intended to be leased to occupiers operating in, or intended to be leased to life science organisations.
providing a benefit to, the life science sector ("life science properties").
Examples of the assets the Group can acquire: wet and dry laboratories, Yes. All the Group's life science assets are a mix of laboratory and office
offices, incubators and co-working space, manufacturing and testing space.
facilities, and data centres.
The Group can acquire individual buildings, a group of buildings across a Yes. The Group owns both individual assets and a science park.
single science park or the entirety of a science park. This may include
purchasing or developing buildings that are leased or intended to be leased to
occupiers providing ancillary services to employees of companies operating in,
or providing a benefit to, the life science sector.
The Group will typically invest in income-producing assets, consistent with Yes. All the assets are income producing (other than the development at OTP)
providing capital growth and growing income. and offer potential for capital growth and rising income through asset
management.
Any asset management or development opportunities will minimise any Yes. We are forward funding the development programme at OTP and have a
development risk, typically through forward funding or similar arrangements. fixed-price contract for each building with the developer.
The maximum exposure to developments or land without a forward funding Yes. There are no developments or land without a forward-funding arrangement.
arrangement is 15% of gross asset value ("GAV").
No individual building will represent more than 25% of GAV from 31 December Yes. No individual building exceeds the threshold.
2023.
The Group targets a portfolio with no one occupier accounting for more than One occupier exceeds 20% of contracted rent but remains below the 30%
20% (but subject to a maximum of 30%) of the higher of either (i) gross threshold. This percentage is expected to fall as OTP continues to be
contracted rents or (ii) the valuer's ERV of the Group's portfolio including developed and leased up.
developments under forward-funding agreements, as calculated at the time of
investing or leasing.
The aggregate maximum exposure to assets under development, including forward Yes. 14.7% of assets are currently in development.
fundings, will not exceed 30% of GAV from 31 December 2023.
No more than 10% of GAV will be invested in properties that are not life Yes, more than 90% of assets are currently classified as life science
science properties. properties.
The Group will not invest more than 10% of GAV in other alternative investment Yes. The Company has no investments of this type.
funds or closed-ended investment companies.
Alternative Investment Fund Manager ("AIFM")
G10 Capital Limited ("G10") is the Company's AIFM, for the purposes of the UK
AIFM Regime, with Ironstone providing advisory services to both G10 and the
Company.
Investment Adviser
Ironstone Asset Management Limited is the Investment Adviser to the Company
and the AIFM.
Ironstone Asset Management Limited | Investment Adviser
15 April 2025
Principal risks and uncertainties
We take a thorough and proportionate approach to managing risk. We consider
our compliance requirements and the protection of our occupiers and other
stakeholders as key priorities when assessing our risk appetite. Our robust
risk, governance and control environment is designed to ensure we have a clear
understanding of business risks and opportunities, and our management and
mitigation strategies.
Overall risk culture
Our financial and operational performance and reputation are subject to
several risks and uncertainties. These risks could, either separately or in
combination, have a material impact on our performance, occupiers, third-party
service providers, the environment and shareholder returns.
The Board, supported by its advisers, is responsible for identifying,
understanding, considering and acting on the Group's current and emerging
risks. Our business culture is designed to enable decisions to be made within
agreed parameters and recognised accountabilities, to support the delivery of
our objectives.
Responsibilities
The Board has overall responsibility for managing risk, identifying principal
risks that may affect the Group's objectives and determining the nature and
extent of risk exposure that the business is willing to take in pursuit of its
strategy. The Audit and Risk Committee, on behalf of the Board, oversees the
Group's framework for risk management.
Our framework for risk management is approved by the Board. It sets out how we
identify, evaluate and report on our current and emerging risks, and
incorporates the assessment of the controls and mitigation strategies we have
in place for each documented risk. We apply a consistent evaluation framework
to the assessment of risks, providing a clear basis for considering threats
and opportunities across our activities.
Our approach
The Investment Adviser regularly reviews and updates the corporate risk
register, which is reported to each Audit and Risk Committee meeting,
highlighting any emerging risks and any changes to existing risks; the
controls in place; and our exposure to that risk. The Audit and Risk Committee
reviews the risk register, with particular focus on the principal risks and
any emerging risks and provides updates to the Board.
The Audit and Risk Committee also monitors our risk management processes and
approves relevant disclosures. It is responsible for monitoring financial
reporting and external audit plans and outputs, as well as providing assurance
to the Board in relation to financial, operational and compliance controls,
all of which are designed to manage our exposure to risk.
The Board has approved the delegated authority matrix and key policies, which
ensure that responsibility for making key decisions such as asset acquisitions
and disposals is clearly defined and understood. The authority matrix ensures
that significant decisions are taken at the appropriate level, taking into
account the size and complexity of the transaction, and its significance to
our plans.
Risk appetite and awareness
Risk awareness exists through our decision-making processes and is embedded in
our systems, policies, leadership, governance and behaviours. We primarily
have an outsourced model and are reliant on service providers, particularly
the Investment Adviser, to make decisions within the Board's approved
parameters. These parameters are summarised by our risk appetite, which is
incorporated within the risk framework.
Risk appetite
Our risk appetite was reassessed during the year, as part of the annual review
of the risk framework and remains unchanged. We have no appetite for risks
relating to compliance with regulatory and environmental requirements, or the
safety and welfare our occupiers, those working on our behalf, and the wider
community in which we work.
Our appetite for risks relating to climate change is low, and we are, through
the Sustainability Committee, working to identify and mitigate physical and
transitional risks to the portfolio and the Group.
We will accept a reasonable level of risk in relation to business activities
focused on enhancing revenues, portfolio values and increasing financial
returns for investors. We seek to balance our risk position through:
• a strong focus on compliance, with our expectations of service
providers incorporated within contract documents, and monitored through
performance reviews by the Management Engagement Committee;
• the acquisition and management of a balanced asset portfolio, being
selective in our acquisition decisions, and following a clear investment
appraisal process;
• a focus on mitigating climate-related risks and opportunities through
our portfolio acquisition decisions, refurbishment and repurposing approach,
and our work with and support to occupiers; and
• generating profit and funds through the effective asset management of
our portfolio.
Environmental, Social and Governance ("ESG") risk
We consider the active management of ESG related risk to be a key element of
our business operations. We have invested resource in understanding these
risks, in particular climate-related risk, and how we can best mitigate these.
ESG and climate‑related risks are included within the corporate risk
register, and we have a separate climate-related risk register, covering both
physical and transitional risks. This is reviewed by the Investment Adviser
and reported to the Sustainability Committee. There is a biannual formal
review of the risks in the climate related risk register, to consider whether
there are any risks rated high that should be escalated to the corporate risk
register. For more details on these risks, see TCFD section in the Annual
Report.
Emerging risks
A key element of our approach to the management of risk is the regular
identification and consideration of potential emerging risks for the Group.
These emerging risk reviews are carried out regularly with the Investment
Adviser, and it is part of the regular risk report to the Audit and Risk
Committee.
During the year, two new risks were added to the register:
• the potential for a significant legal challenge initiated by the
Group - relating to the ongoing development of OTP. We have raised concerns
with the developer in relation to the time frame for completion of the
buildings and are working with them to resolve the situation.
• general electrical capacity limitations - this is not specifically a
Group issue, being the lack of available capacity in the network given the
move towards electrical power as a cleaner energy source. However, whilst this
does not impact the Group's current business plan, there is a potential for
this risk to impact it in the longer term. The Investment Adviser has
undertaken an analysis of the power requirements of existing and potential
occupiers during the year which demonstrate this is not an issue for the
Group. Therefore, whilst this has been added to the risk register and will be
regularly monitored, we do not consider it is one of the Group's principal
risks.
We acknowledge the current macro-economic environment around globalised trade
and tariffs, but do not believe this has a material impact on the Group and
has therefore not been included as an emerging risk at this stage.
Principal risks
The Board confirms that it has performed a robust assessment of the Group's
principal and emerging risks and considered both the short and longer-term
impacts. The Investment Adviser and the Audit and Risk Committee regularly
review the corporate risk register in detail.
The Board considers its overarching risk to be that investment objectives and
performance against them become unattractive to investors, leading to a
prolonged widening share price discount to net asset value, constraining the
Group's ability grow by raising funds on the public markets.
The Board has identified its principal risks based on this overarching risk,
and these are summarised here, along with the current risk management
strategy, the assessment of exposure to each risk, and any change in
assessment since our last report.
Changes in risk, emerging risk
Other than the risk relating to legal challenge, there are no additional
principal risks, and we have not removed any risks previously considered to be
principal. Where the evaluation of the risk has changed, an explanation has
been provided in the detailed section below.
Business risks
1 Poor returns on the portfolio
Change No change
Whilst we have seen increasing interest from potential occupiers and a
generally more active market in the second half of the year, at this stage we
consider it prudent to maintain the medium evaluation of this risk.
Risk Achieving the targeted level of return on our property portfolio over time is
fundamental to the success of the business. The risk of a reduced return on
the portfolio could be caused by a number of factors, including:
• reduced property valuations;
• reduced rent levels;
• an inappropriate balance of property types within the portfolio;
• cost of capital increases, particularly as interest rates rise;
• higher than anticipated void rates, and bad debts; and
• increasing new tenancy costs (e.g. shorter leases or significant works to
attract occupiers).
In addition, external macroeconomic challenges may reduce investment in the
life sciences sector, subsequently reducing property values and rent incomes,
and in the medium to longer term this could also impact on the number of
potential occupiers looking for property.
Mitigation Portfolio risk mitigation is based around:
• Asset value - a robust acquisition and investment process, including
detailed financial modelling. Our investment protocol reflects our delegated
authority matrix, ensuring that decisions are made at the right level, with
particularly significant decisions referred to the Board.
We aim to have a balance between space developed with or by occupiers, and the
development of sites in advance of occupation, particularly with specialist
facilities such as laboratory space. This enables us to meet specific occupier
requirements, and also to attract potential occupiers who are looking for
reduced fit-out cost and time, which helps to drive rents.
• Occupier quality - our occupier approval process is designed to ensure we
fully understand occupier requirements, delivering appropriate space for them.
It also includes evaluation of potential occupiers, to ensure that they are
aligned with the Group's strategic priorities and have a business model and
financial plans which cover all property costs.
• Property management - the property managers work closely with the
Investment Adviser's asset management team, and together they provide regular
performance reviews and reports to the Board. Rent collection performance is
also monitored by Waystone, who are responsible for rent collection accounting
and maintenance of the debtor ledger.
2 Significant legal challenge
Change New
This risk was added to the risk register during the year, as the development
completions at OTP continue to be delayed.
Risk We entered into a development agreement as part of the acquisition and
construction of OTP. Our acquisition decision making relied in part on
information provided to us by the developer, particularly regarding timing of
construction and expected completion dates.
Due to ongoing completion delays, commencing legal challenge is an option
available to the Group. However we are working with the developer to resolve
this situation and avoid pursuing this route.
Mitigation We have engaged legal and technical expert advice, and are in formal
discussions with the developer in relation to the plan forward.
3 Inability to identify or secure assets/sites for acquisition
Change No change
Risk There is a risk that we may lose investment opportunities to competitors. This
could be driven by aggressive competitors, the overall level of competition in
the market, insufficient suitable available assets in the market, or
acquisition prices that would make it difficult for us to generate sufficient
returns.
Mitigation Our Investment Adviser has an experienced management team and is supported by
external property management specialists, who have extensive expertise and
contacts across the life sciences market and are able to source a range of
acquisition opportunities. However, our focus this year and next is on the
management of our existing assets, including progressing development and
potential repurposing to attract occupiers to our space and drive the best
value from our current portfolio.
4 Poor performance of the Investment Adviser or other significant third-party
provider
Change No change
Risk We operate an outsourced model and depend on the performance of our
third‑party service providers, particularly the Investment Adviser, AIFM,
Property Manager and Fund Administrator.
Poor service delivery from any of these key providers could result in poor
decisions, reduced portfolio returns or regulatory compliance failures, and
could ultimately have a financial impact on investors.
We rely on receiving high-quality and accurate information from our service
providers, and inaccurate or incomplete information could damage our finances,
properties, occupiers and reputation. In particular, inaccurate information
could increase our revenue risk, as we depend on third parties to invoice,
collect, bank and record revenues.
Mitigation Our governance framework is designed to ensure that the Board is involved with
decisions that are material to the success of the Group. There is an approved
delegated authority matrix, including the matters reserved for the Board.
Our service providers are recognised experts in their fields, and we have
contracts in place, with clear terms of service and our expectations
clarified.
The principal third-party providers oversee and review our activities, with
the AIFM reviewing and approving key transactions proposed by the Investment
Adviser, and the Investment Adviser monitoring the performance of the property
managers. Financial reports and information are prepared by Waystone and
checked by the Investment Adviser's Finance team, prior to reporting to the
Board.
Our Board members are experienced individuals, appointed for their knowledge
and their business and commercial acumen. In addition to their performance
reviews and variance analysis as part of the normal quarterly Board meetings,
they formally review the performance of key third-party service providers
through the Management Engagement Committee.
The valuation of the portfolio is a key risk area for the Group. The valuation
is undertaken by an independent valuer, which provides independent assurance
for the Board on the accuracy of key metrics reported by the Investment
Adviser
5 Inappropriate acquisition, or breach of investment strategy
Change No change
Risk Acquiring assets or taking on occupiers which are not in line with our
investment policy and objectives could have a detrimental effect on our
portfolio values, finances or reputation, and could also increase risk for
occupiers, particularly in multi-tenanted properties.
Mitigation Our investment policy is supported by processes designed to ensure that
acquisitions meet our requirements, and any capital expenditure will deliver
enhanced returns.
We have a strong acquisition protocol approved by the Board, which includes
robust due diligence processes and assessment against clear investment
criteria, including portfolio mix, property type and quality, legal issues,
environmental requirements, sector and quality of occupier.
Acquisition and investment approvals follow our delegated authority matrix,
with particularly material decisions reserved for the Board. All acquisitions
and disposals are also approved by the AIFM.
The Investment Adviser and the Property Manager provide us with expert
knowledge of the properties and geographical locations which are best suited
to the life science market, ensuring that our property portfolio is best
suited to the needs of our target occupiers.
Our procedures also require a full assessment of potential occupiers, ensuring
that they are linked to the life science sector and are of suitable financial
stability and strength for the lease concerned.
Financial risks
6 Interest rate changes
Change No change
Risk Interest rate rises present a number of different potential risks to the
Group. They may impact on our ability to utilise funding to execute the
strategy; may have an impact on the overall value of the portfolio, as the
cost of lending impacts on asset valuations; potential occupiers may decide to
delay expansion plans, and current occupiers may have reduced willingness or
ability to pay rents.
Mitigation The potential for interest rate rises is not a risk within our control, and we
therefore focus on managing and mitigating the consequences. We have a
financing strategy agreed with the Investment Adviser. We are in the second
year of a three year financing arrangement, which also has options for
extension. This provides sufficient headroom to complete our current planned
developments and refurbishments. We have also hedged the SONIA rate risk with
interest rate caps, targeting 100% hedging at all times. We also manage our
cash flows carefully, along with the timing of debt drawdowns for significant
outlays.
7 Breach of loan covenants or borrowing policy
Change Increase
Development completion delays and slower than anticipated leasing have
impacted on cashflows which may impact future compliance with facility
covenants.
Risk We set out our expected and maximum LTV ratios in the prospectus, and
separately have LTV and interest cover ratios within our financing facility.
Breach of any of these ratios, or the terms and conditions of the funding
facility, could have a serious impact on the delivery of our objectives,
through cash shortages or damage to our reputation.
Mitigation The Investment Adviser is responsible for monitoring operations, financial
transactions and performance, and reviews the financial position continuously
to ensure that neither the LTV ratio nor any specific requirements of our
financing facility are breached.
The Investment Adviser applies comprehensive financial models to plan cash
flows and funding requirements. Cash availability is built into the investment
decision-making process and capital expenditure planning.
The cash position is reconciled monthly to the bank statements by Waystone,
and by the Investment Adviser's Finance team on an ad hoc and quarterly basis
to the accounting records produced by Waystone.
We are working with the developer on a revised plan and completion timetable
for OTP which will enable the asset management team to focus leasing
activities accordingly. Ensuring that assets are revenue generating as soon as
possible will reduce future cash flow and covenant compliance risk.
8 Unable to attract investment, equity or debt funding
Change Increase
The prolonged discount at which our shares trade relative to net assets and
the delay in both development completions and leasing progress has restricted
our ability to source both equity and debt funding.
Risk There is a risk that we may be unable to raise funding, either through equity
from new investors/increased investment from existing shareholders or via debt
funding. This would affect our ability to grow and deliver on agreed strategic
objectives.
Mitigation We have an experienced Investment Adviser, with excellent market knowledge.
The Investment Adviser Finance Director maintains relationships with current
and potential funding partners, and any significant funding agreements are
reviewed and approved by the Board, in line with our delegated authority
matrix.
Following the refinancing, the banks remain supportive of our strategy,
providing we continue to operate within the covenants of our facility.
Whilst the discount at which our shares currently trade to net assets make
raising equity challenging, we maintain an active programme of shareholder
engagement and provide regular market updates on our strategic progress to
strengthen our relationship with investors and potential investors.
Compliance risks
9 Loss of REIT status
Change No change
Risk Failing to comply with the REIT framework could put our status as a REIT at
risk, resulting in a potentially significant impact on our shareholders.
Mitigation We have a documented governance framework, with clearly allocated
responsibilities set out in the matters reserved for the Board, the delegated
authority matrix, and in our contracts with the Investment Adviser and other
key service providers.
We obtain advice as needed from the AIFM, our brokers and external legal
support in relation to governance compliance, FCA and listing rules.
Our position against the key requirements of the REIT legislation is reviewed
by the Investment Adviser each month, by Waystone quarterly, and is reported
to the Board. Cash and earnings cover for dividends is monitored through the
comprehensive cash flow forecasting process.
Climate-related risks
10 Impact of climate change
Change No change
Risk The potential impact of climate change is one of our principal risks, and we
are investing time and resource to better understand and reduce our impact on
the environment and minimise the impact of climate change on our portfolio.
We have a separate climate risk register to help us identify, consider and
mitigate both physical and transitional risks in more detail.
Key risks documented in that register include:
• change in occupiers' requirements, as they seek more sustainable property
options; and
• the complexities and cost of compliance with increasing legislation and
reporting requirements, and the impact of changes to business practices going
forward.
Mitigation The global impact of climate change is already noticeable, and we recognise
our responsibility to develop a portfolio and business/operational practices
which reduce our environmental impact, impact and minimise the impact of
climate change on our portfolio whilst enabling us to deliver results for our
investors.
Further details are included in the Sustainability and TCFD sections of the
Annual Report, but a summary of the actions we have taken and planned are:
• new developments to be BREEAM 'Excellent' or 'Very Good' rated;
• environmental assessment of all potential acquisitions, as part of the
acquisition process;
• EPC reports are part of our standard process for acquisitions;
• capital expenditure planning includes consideration of climate-related
risk, with appropriate building standards being applied, such as energy
efficient lighting and heating;
• external specialists in place to assist us with delivery of our
sustainability roadmap and route to net zero;
• a Sustainability Committee which considers climate related risks and
opportunities, and approves our mitigation strategy and plans, and
• a standard quarterly Board report pack which includes ESG and
climate-related risk information, to ensure that Board members are fully
informed.
Going Concern and viability statement
Going concern
The Board monitors the Group's ability to continue as a going concern.
Specifically, at quarterly Board meetings, the Board reviews summaries of the
Group's liquidity position and compliance with loan covenants, as well as
forecast financial performance and cash flows. Throughout the period, the
Board met frequently, in conjunction with the Investment Adviser, to review
cash resources and the progress of the development and repurposing of the
investment property portfolio.
The Group ended the year with £5.6 million of unrestricted cash and £27.3
million of headroom available under its debt facilities, of which £15.5
million is available to draw as at the reporting date with the balance subject
to future asset valuations and capital commitments. These valuations are due
to increase as the development of OTP continues and completes. There is
limited risk that a fall in bank valuations would result in a liquidity issue
in the base and sensitised cases, however further asset disposals would
mitigate this risk. The Group is operating within its covenants and a
sensitivity analysis has been performed to identify the decrease in valuations
and rental income that would result in a breach of the LTV, or interest cover
covenants. For the HSBC and Bank of Ireland facility, current bank valuations
would need to fall by 28.9% or rents by 26.1%, as at the 2024 year end
covenant test date, before these covenants would be breached. As at 15 April
2025, 100% of rents invoiced in December 2024 in relation to the quarter to 24
March 2025 were received.
The Board has looked at its forecast cash flow for at least the next 12 months
and under the base case scenario, as expected, it can meet its covenants and
liquidity requirements within the current facility headroom. The Directors
have reviewed a number of scenarios which included plausible downside
sensitivities in relation to rental cash collection, making no acquisitions or
discretionary capital expenditure, and minimum dividend distributions under
the REIT rules. The sensitivity analysis also includes, for example,
considering the timing of cash flows on committed capital expenditure at OTP
and assumptions over the commencement and speed of completion of the work,
which impacts the timing of cash outflows being payable, which is currently
not certain.
In combination with this, the Directors note the debt facilities are due for
maturity in June 2026, and will consider the prospects of any refinancing
necessary, and any resultant liquidity constraints, as part of the strategic
review where individual and collective asset sales are under consideration.
The facility may be refinanced in full, in part at a reduced amount, or repaid
in full depending on the outcome of the strategic review which will conclude
before the refinancing date. The capital expenditure relating to the
development of OTP is the largest contributor to using up headroom in the
facility across the going concern period, and whilst the timing of this is not
certain as noted above, the Group has currently forecast that headroom will
remain available up to the refinancing date, based on the Directors' best
estimate of the build schedule as of the date of approving the Financial
Statements. Should it not, there are mitigating actions management can take to
generate additional liquidity if necessary which, whilst not entirely within
the Board's control as there is a reliance on the market, includes disposing
of one or more of the assets as part of the strategic review considerations.
The Board announced a strategic review on 14 March 2025 to consider the future
of the Group and to explore all strategic options available to maximise value
for shareholders, which may include a potential sale or a managed wind down.
The Board acknowledges the challenges and significant headwinds that the Group
has faced since IPO, in common with the wider REIT sector, including higher
inflation and elevated interest rates which have driven a fundamental slowdown
in leasing activity and negatively impacted investor sentiment. These factors,
coupled with the Group's size and low levels of liquidity have led to an under
performance of the share price, which has, as a result, traded at a
significant discount to net asset value for a prolonged period of time.
This announcement leads to uncertainty over the ownership, size and scale of
the total asset portfolio and the debt facility that may be needed at the June
2026 refinancing date. Under the base case, the Directors have a reasonable
expectation that the Group and the Company would have adequate resources to
continue in business for a period of at least 12 months from the date of
approval of the Annual Report and Financial Statements, given facility
headroom and liquidity remain available. However, the strategic review
announcement in particular leads the Directors to believe that there exists a
material uncertainty that may cast significant doubt over the Group's ability
to continue to be in operation for at least the next 12 months, even at the
base case.
Assessment of viability
In accordance with the AIC Code of Corporate Governance, the Directors would
ordinarily have assessed the Group's prospects over a period greater than the
12 months considered by the going concern provision. However, following the
strategic review announcement, this results in a level of uncertainty for the
long-term future of the business. The Directors have therefore deemed the
viability period to be aligned with the going concern period of 12 months from
the date of this report.
The principal risks detailed on pages 50 to 58 summarise the matters that
could prevent the Group from delivering its strategy. The Board seeks to
ensure that risks are kept to a minimum at all times and, where appropriate,
the potential impact of such risks is modelled within its viability
assessment. The Group's investment portfolio acquired to date delivers the
intended investment strategy of a diversified portfolio located within the
Golden Triangle of Oxford, Cambridge and London located near major
universities, hospitals and public and commercial organisations, where there
is a shortage of high-quality real estate space to support expanding life
science businesses. This is expected to lead to low vacancy rates and further
rental and capital growth.
The Directors' assessment takes into account forecast cash flows, debt
availability, forecast covenant compliance, dividend cover and REIT
compliance. The model is then stress tested for severe but plausible
scenarios, individually and in aggregate, along with consideration of
potential mitigating factors. The key sensitivities applied to the model are a
downturn in economic outlook and restricted availability of finance,
specifically:
• increased occupier turnover;
• increased void costs;
• increased interest rates; and
• reduced disposal proceeds.
Taking into account mitigating actions, the results of the sensitivity
analysis and stress testing demonstrated that the Group would have sufficient
liquidity to meet its ongoing liabilities as they fall due, maintain
compliance with banking covenants and maintain compliance with the REIT regime
over the period of the assessment.
Furthermore, the Board, in conjunction with the Audit and Risk Committee,
carried out a robust assessment of the principal risks and uncertainties
facing the Group, including those that would threaten its business model,
strategy, future performance, solvency or liquidity over the 12 month period
being assessed. The risk review process provided the Board with assurance that
the mitigations and management systems are operating as intended. The Board
believes that the Group is well positioned to manage its principal risks and
uncertainties and the economic and political environment.
The Board's expectation is further supported by regular briefings provided by
the Investment Adviser. These briefings consider market conditions,
opportunities, changes in the regulatory landscape and the current economic
and political risks and uncertainties. These risks, and other potential risks
which may arise, continue to be closely monitored by the Board.
Viability statement
The period over which the Directors consider it is feasible and appropriate to
report on the Group's viability has been aligned with the 12 month going
concern period following the strategic review announcement on 14 March 2025.
The Directors confirm that, taking account of the Group's current position and
the principal risks set out in the strategic report, they have a reasonable
expectation that the Group and the Company would have adequate resources to
continue in business for a period of at least 12 months from the date of
approval of the Annual Report and Financial Statements. However, the strategic
review announcement in particular leads the Directors to believe that there
exists a material uncertainty that may cast significant doubt over the Group's
ability to continue to be in operation for at least the next 12 months.
On behalf of the Board
Claire Boyle | Chair
15 April 2025
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the Company's
statutory accounts for the year ended 31 December 2024 but is derived from
those accounts. Statutory accounts for the year ended 31 December 2024 will be
delivered to the Registrar of Companies in due course. The Auditor has
reviewed those accounts; their report was unqualified and did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006. The auditor
did draw attention to the material uncertainty related to going concern as set
out in the going concern and viability statement above. The text of the
Auditor's report can be found in the Company's full Annual Report and
Financial Statements.
Statement of directors' responsibilities
In respect of the Annual Report and Financial Statements
The Directors are responsible for preparing the Annual Report and United
Kingdom adopted Financial Statements in accordance with applicable UK law and
in compliance with the requirements of the Companies Act 2006. Company law
requires the Directors to prepare financial statements for each financial
year. Under that law, the Directors are required to prepare the Group
financial statements in accordance with United Kingdom adopted international
accounting standards and International Financial Reporting Standards ("IFRS")
as issued by the International Accounting Standards Board ("IASB"). The
Directors have chosen to prepare the Parent Company financial statements in
accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law), including FRS 101 "Reduced
Disclosure Framework".
Under company law, the Directors must not approve the financial statements
unless they are satisfied that they present fairly the financial position,
financial performance and cash flows of the Group for that year. In preparing
the financial statements, the Directors are required to:
• select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors and apply them
consistently;
• present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
• provide additional disclosures when compliance with specific
requirements in IFRS is insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the Group's
financial position and financial performance;
• state that the Group has complied with IFRS, subject to any material
departures disclosed and explained in the financial statements;
• state whether the Company financial statements have been prepared in
accordance with Financial Reporting Standard 101 Reduced Disclosure Framework
("FRS 101") subject to any material departures disclosed and explained in the
Company financial statements; and
• make judgements and estimates that are reasonable and prudent.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy, at any time, the financial position of the Group and
enable it to ensure that the financial statements comply with the Companies
Act 2006 and Article 4 of the IAS Regulation.
They are also responsible for safeguarding the assets of the Group and, hence,
for taking reasonable steps for the prevention and detection of fraud and
other irregularities. Under applicable law and regulations, the Directors are
also responsible for preparing a strategic report, Directors' report,
Directors' remuneration report and corporate governance statement that comply
with that law and those regulations, and for ensuring that the Annual Report
includes information, where applicable, for the Disclosure Guidance and
Transparency Rules of the FCA.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website. The
work carried out by the Auditor does not involve consideration of the
maintenance and integrity of this website and, accordingly, the Auditor
accepts no responsibility for any changes that have occurred to the financial
statements since they were initially presented on the website. Visitors to the
website need to be aware that legislation in the UK covering the preparation
and dissemination of the financial statements may differ from legislation in
their jurisdiction.
We confirm that, to the best of our knowledge:
• the financial statements, prepared in accordance with IFRS, and in
conformity with the requirements of the Companies Act 2006, give a true and
fair view of the assets, liabilities, financial position and profit of the
Company (and Group as a whole); and
• this Annual Report includes a fair review of the development and
performance of the business and the position of the Company (and Group as a
whole), together with a description of the principal risks and uncertainties
that it faces.
The Directors consider that the Annual Report and Financial Statements, taken
as a whole, are fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's position and performance,
business model and strategy.
For and on behalf of the Board
Claire Boyle | Chair
15 April 2025
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December 2024
Continuing operations Notes Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Gross property income 3 16,355 15,481
Service charge income 3 3,953 4,461
Revenue 20,308 19,942
Recoverable service charges 4 (3,953) (4,461)
Property operating expenses 4 (1,931) (1,656)
Gross profit 14,424 13,825
Administration expenses 4 (4,838) (5,249)
Operating gains before losses on investment properties 9,586 8,576
Fair value losses on investment properties 13 (17,376) (22,848)
Loss on disposal of investment properties 13 - (317)
Operating loss (7,790) (14,589)
Finance income 7 4,203 3,807
Finance expenses 8 (10,390) (11,070)
Loss before tax (13,977) (21,852)
Taxation 9 - 146
Loss after tax for the period and total comprehensive loss attributable to (13,977) (21,706)
equity holders
Loss per share (basic and diluted) (pence) 12 (4.0) (6.2)
All items in the above statement derive from continuing operations. No
operations were discontinued during the period.
There is no other comprehensive income and as such a separate statement is not
present. The loss after tax is therefore also the total comprehensive loss.
Consolidated statement of financial position as at 31 December 2024
Notes 31 December 31 December
2024 2023
£'000 £'000
Assets
Non-current assets
Investment property 13 385,220 382,300
Interest rate derivatives 16 - 3,998
Trade and other receivables 14 3,826 3,409
389,046 389,707
Current assets
Trade and other receivables 14 4,196 6,656
Cash and cash equivalents 15 5,567 14,341
Interest rate derivatives 16 2,378 -
12,141 20,997
Total assets 401,187 410,704
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings 17 (122,238) (107,918)
Other payables and accrued expenses 18 (3,826) (4,604)
(126,064) (112,522)
Current liabilities
Interest-bearing loans and borrowings 17 - -
Other payables and accrued expenses 18 (12,355) (14,437)
(12,355) (14,437)
Total liabilities (138,419) (126,959)
Net assets 262,768 283,745
Equity
Share capital 19 3,500 3,500
Capital reduction reserve 314,823 321,823
Retained earnings 20 (55,555) (41,578)
Total equity 262,768 283,745
Number of shares in issue (thousands) 350,000 350,000
Net asset value per share (basic and diluted) (pence) 21 75.1 81.1
These Financial Statements were approved by the Board of Directors of Life
Science REIT plc on 15 April 2025 and signed on its behalf by:
Claire Boyle
Company number: 13532483
Consolidated statement of changes in equity for the year ended 31 December
2024
Notes Share Capital Retained Total equity
capital reduction earnings £'000
£'000 reserve £'000
£'000
Balance at 1 January 2024 3,500 321,823 (41,578) 283,745
Loss for the year and total comprehensive loss - - (13,977) (13,977)
Dividends paid 11 - (7,000) - (7,000)
Balance at 31 December 2024 3,500 314,823 (55,555) 262,768
Notes Share Capital Retained Total equity
capital reduction earnings £'000
£'000 reserve £'000
£'000
Balance at 1 January 2023 3,500 335,823 (19,872) 319,451
Loss for the year and total comprehensive loss - - (21,706) (21,706)
Dividends paid 11 - (14,000) - (14,000)
Balance at 31 December 2023 3,500 321,823 (41,578) 283,745
Consolidated statement of cash flows as at 31 December 2024
Notes Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Cash flows from operating activities
Operating loss (7,790) (14,589)
Adjustments to reconcile profit for the year to net cash flows:
Changes in fair value of investment properties 13 17,376 22,848
Adjustment for non-cash items - 317
Operating cash flows before movements in working capital 9,586 8,576
Decrease/(increase) in other receivables and prepayments 3,911 (5,177)
(Decrease)/increase in other payables and accrued expenses (576) 4,216
Net cash flow generated from operating activities 12,921 7,615
Cash flows from investing activities
Acquisition of investment properties (1,127) 1,653
Capital expenditure (19,280) (24,034)
Disposal of investments - 7,516
Interest received 4,057 3,222
Net cash used in investing activities (16,350) (11,643)
Cash flows from financing activities
Bank loans drawn down 17 14,000 142,520
Bank loans repaid 17 - (145,304)
Loan interest and other finance expenses paid (12,345) (9,473)
Loan issue costs paid - (980)
Dividends paid in the year (7,000) (14,000)
Net cash flow used in financing activities (5,345) (27,237)
Net decrease in cash and cash equivalents (8,774) (31,265)
Cash and cash equivalents at start of the year 14,341 45,606
Cash and cash equivalents at end of the year 15 5,567 14,341
Notes to the consolidated financial statements
for the year ended 31 December 2024
1. General information
Life Science REIT plc (the "Company") is a closed-ended Real Estate Investment
Trust ("REIT") incorporated in England and Wales on 27 July 2021. The Company
began trading on 19 November 2021 and its shares are admitted to trading on
the Premium Listing Segment of the Main Market of the London Stock Exchange.
The registered office of the Company is located at Central Square, 29
Wellington Street, Leeds, England, LS1 4DL.
The Group's consolidated Financial Statements for the year ended 31 December
2024 comprise the results of the Company and its subsidiaries (together
constituting the "Group") and were approved by the Board and authorised for
issue on 15 April 2025. The nature of the Group's operations and its principal
activities are set out in the strategic report of the Annual Report.
2. Basis of preparation
These Financial Statements are prepared in accordance with United Kingdom
adopted International Financial Reporting Standards and in conformity with the
requirements of the Companies Act 2006. The Financial Statements have been
prepared under the historical cost convention, except for the revaluation of
investment properties and financial instruments that are measured at revalued
amounts or fair values at the end of each reporting period, as explained in
the accounting policies below. Historical cost is generally based on the fair
value of the consideration given in exchange for goods and services. The
audited Financial Statements are presented in Pound Sterling and all values
are rounded to the nearest thousand pounds (£'000), except when otherwise
indicated.
2.1 Going concern
The Board monitors the Group's ability to continue as a going concern.
Specifically, at quarterly Board meetings, the Board reviews summaries of the
Group's liquidity position and compliance with loan covenants, as well as
forecast financial performance and cash flows. Throughout the period, the
Board met frequently, in conjunction with the Investment Adviser, to review
cash resources and the progress of the development and repurposing of the
investment property portfolio.
The Group ended the year with £5.6 million of unrestricted cash and £27.3
million of headroom available under its debt facilities, of which £15.5
million is available to draw as at the reporting date with the balance subject
to future asset valuations. These valuations are due to increase as the
development of OTP continues and completes. There is limited risk that a fall
in bank valuations would result in a liquidity issue in the base and
sensitised cases, however further asset disposals would mitigate this risk.
The Group is operating within its covenants and a sensitivity analysis has
been performed to identify the decrease in valuations and rental income that
would result in a breach of the LTV, or interest cover covenants. For the HSBC
and Bank of Ireland facility, current bank valuations would need to fall by
28.9% or rents by 26.1%, as at the 2024 year end covenant test date, before
these covenants would be breached. As at 15 April 2025, 100% of rents invoiced
in December 2024 in relation to the quarter to 24 March 2025 were received.
The Board has looked at its forecast cash flow for at least the next 12 months
and under the base case scenario, as expected, it can meet its covenants and
liquidity requirements within the current facility headroom. The Directors
have reviewed a number of scenarios which included plausible downside
sensitivities in relation to rental cash collection, making no acquisitions or
discretionary capital expenditure, and minimum dividend distributions under
the REIT rules. The sensitivity analysis also includes, for example,
considering the timing of cash flows on committed capital expenditure at OTP
and assumptions over the commencement and speed of completion of the work,
which impacts the timing of cash outflows being payable, which is currently
not certain.
In combination with this, the Directors note the debt facilities are due for
maturity in June 2026, and will consider the prospects of any refinancing
necessary, and any resultant liquidity constraints, as part of the strategic
review where individual and collective asset sales are under consideration.
The facility may be refinanced in full, in part at a reduced amount, or repaid
in full depending on the outcome of the strategic review which will conclude
before the refinancing date. The capital expenditure relating to the
development of OTP is the largest contributor to using up headroom in the
facility across the going concern period, and whilst the timing of this is not
certain as noted above, the Group has currently forecast that headroom will
remain available up to the refinancing date, based on the Directors' best
estimate of the build schedule as of the date of approving the Financial
Statements. Should it not, there are mitigating actions management can take to
generate additional liquidity if necessary which, whilst not entirely within
the Board's control as there is a reliance on the market, includes disposing
of one or more of the assets as part of the strategic review considerations.
The Board announced a strategic review on 14 March 2025 to consider the future
of the Group and to explore all strategic options available to maximise value
for shareholders, which may include a potential sale or a managed wind down.
The Board acknowledges the challenges and significant headwinds that the Group
has faced since IPO, in common with the wider REIT sector, including higher
inflation and elevated interest rates which have driven a fundamental slowdown
in leasing activity and negatively impacted investor sentiment. These factors,
coupled with the Group's size and low levels of liquidity have led to an under
performance of the share price, which has, as a result, traded at a
significant discount to net asset value for a prolonged period of time.
This announcement leads to uncertainty over the ownership, size and scale of
the total asset portfolio and the debt facility that may be needed at the June
2026 refinancing date. Under the base case, the Directors have a reasonable
expectation that the Group and the Company would have adequate resources to
continue in business for a period of at least 12 months from the date of
approval of the Annual Report and Financial Statements, given facility
headroom and liquidity remain available. However, the strategic review
announcement in particular leads the Directors to believe that there exists a
material uncertainty that may cast significant doubt over the Group's ability
to continue to be in operation for at least the next 12 months, even at the
base case, from the date of approval of the Annual Report and Financial
Statements.
2.2 New standards and interpretations effective in the current period
The following amendments to existing standards, which are required for the
Group's accounting period beginning on 1 January 2024, have been considered
and applied:
• Amendments to IAS 1 Presentation of Financial Statements clarifies
that liabilities are classified as either current or non‑current, depending
on the rights that exist at the end of the reporting period and not
expectations of, or actual events after, the reporting date. The amendments
also give clarification to the definition of settlement of a liability.
• Amendments to IFRS 16 Lease Liability in a Sale and Leaseback
specifies the requirements that a seller-lessee uses in measuring the lease
liability arising in a sale and leaseback transaction, to ensure the
seller-lessee does not recognise any amount of the gain or loss that relates
to the right of use it retains.
There were no material effects from the adoption of the above-mentioned
amendments to IFRS effective in the period. They have no significant impact on
the Group as they are either not relevant to the Group's activities or require
accounting that is already consistent with the Group's current accounting
policies.
2.3 New and revised accounting standards not yet effective
There are a number of new standards and amendments to existing standards,
which have been published and are mandatory for the Group's accounting periods
beginning on, or after, 1 January 2025. The Group is not adopting these
standards early. The following are the most relevant to the Group:
• Amendments to IAS 21 Lack of Exchangeability to assist entities in
determining whether a currency is exchangeable into another currency, and the
spot exchange rate to use when it is not.
• IFRS 18 Presentation and Disclosures in Financial Statements. This is
the new standard on presentation and disclosure in financial statements, which
replaces IAS 1, with a focus on updates to the statement of profit or loss.
• IFRS 19 Subsidiaries without Public Accountability: Disclosures. This
reduces disclosure requirements that an eligible subsidiary entity is
permitted to apply instead of the disclosure requirements in other IFRS
Accounting Standards.
• Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial
Instruments: Disclosures. The amendments provide clarity on the date of
recognition and derecognition of certain financial instruments and
amends/updates the disclosure required for some financial instruments.
The Directors have yet to assess the full outcome of these new standards,
amendments and interpretations; however, with the exception of IFRS 18, these
other new standards, amendments and interpretations are not expected to have a
significant impact on the Group's financial statements.
2.4 Significant accounting judgements and estimates
The preparation of these Financial Statements, in accordance with IFRS,
requires the Directors of the Company to make judgements, estimates and
assumptions that affect the reported amounts recognised in the Financial
Statements. However, uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to the carrying amount
of the asset or liability in the future.
Judgements
In the course of preparing the Financial Statements, the Investment Adviser
has made the following judgements in the process of applying the Group's
accounting policies that have had a significant effect on the amounts
recognised in the Financial Statements.
Business combinations
The Group acquires subsidiaries that own investment properties. At the time of
acquisition, the Group considers whether each acquisition represents the
acquisition of a business or the acquisition of an asset. Management considers
the substance of the assets and activities of the acquired entity in
determining whether the acquisition represents the acquisition of a business.
The Group accounts for an acquisition as a business combination where an
integrated set of activities is acquired in addition to the property. Where
such acquisitions are not judged to be the acquisition of a business, they are
not treated as business combinations. Rather, the cost to acquire the
corporate entity is allocated between the identifiable assets and liabilities
of the entity based upon their relative fair values at the acquisition date.
Accordingly, no goodwill or additional deferred tax arises.
No corporate acquisitions were made during the year and, therefore, no
business combinations were considered in this financial year.
Estimates
In the process of applying the Group's accounting policies, the Investment
Adviser has made the following estimates, which have the most significant risk
of material change to the carrying value of assets recognised in the
consolidated Financial Statements:
Valuation of property
The valuations of the Group's investment property are at fair value as
determined by the external valuer on the basis of market value in accordance
with the internationally accepted RICS Valuation - Professional Standards
January 2022 (incorporating the International Valuation Standards) and in
accordance with IFRS 13. The key estimates made by the valuer are the ERV and
equivalent yields of each investment property.
On-site developments are valued by applying the 'residual method' of
valuation, which is the investment method described above with a deduction for
all costs necessary to complete the development, with a further allowance for
remaining risk and developers' profit. Properties and land held for future
development are valued using the highest and best use method, by adopting the
residual method allowing for all associated risks, the investment method or a
value per acre methodology.
See notes 13 and 22 for further details.
2.5 Summary of material accounting policies
The principal accounting policies applied in the preparation of these
Financial Statements are stated in the notes to the Financial Statements.
a) Basis of consolidation
The Company does not meet the definition of an investment entity and,
therefore, does not qualify for the consolidation exemption under IFRS 10. The
consolidated Financial Statements comprise the Financial Statements of the
Company and its subsidiaries as at 31 December 2024. Subsidiaries are
consolidated from the date of acquisition, being the date on which the Group
obtained control, and will continue to be consolidated until the date that
such control ceases. An investor controls an investee when the investor is
exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over
the investee. In preparing these Financial Statements, intra-group balances,
transactions and unrealised gains or losses have been eliminated in full. All
non-dormant subsidiaries have the same year end as the Company. Uniform
accounting policies are adopted in the Financial Statements for like
transactions and events in similar circumstances.
b) Functional and presentation currency
The overall objective of the Group is to generate returns in Pound Sterling
and the Group's performance is evaluated in Pound Sterling. Therefore, the
Directors consider Pound Sterling as the currency that most faithfully
represents the economic effects of the underlying transactions, events and
conditions and have therefore adopted it as the functional and presentation
currency.
All values are rounded to the nearest thousand pounds (£'000), except when
otherwise stated.
c) Segmental reporting
The Directors are of the opinion that the Group is engaged in a single segment
of business, being the investment and management of premises relating to the
life science sector.
d) Derivative financial instruments
Derivative financial instruments, comprising interest rate derivatives for
mitigating interest rate risks, are initially recognised at fair value and are
subsequently measured at fair value, being the estimated amount that the Group
would receive or pay to terminate the agreement at the period end date, taking
into account current interest rate expectations and the current credit rating
of the Group and its counterparties. Premiums payable under such arrangements
are initially capitalised into the statement of financial position.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data is available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs significant to the fair value measurement as a whole. Changes in fair
value of interest rate derivatives are recognised within finance expenses in
profit or loss in the period in which they occur.
e) Exceptional costs
Items are classified as exceptional by virtue of their size, nature or
incidence, where their inclusion would otherwise distort the underlying
recurring earnings of the Group. Examples include, but are not limited to,
business transformation costs, early redemption costs of financial instruments
and tax charges specific to disposals. Exceptional costs are excluded from the
Group's adjusted earnings.
3. Revenue
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Rental income 15,652 14,584
Other income 506 521
Insurance recharged 164 143
Rental income straight-line adjustment 33 233
Gross property income 16,355 15,481
Service charge income 3,953 4,461
Total 20,308 19,942
Accounting policy
Rental and other income arising from operating leases on investment property
is accounted for on a straight-line basis over the lease term, and is included
in gross property income in the Group consolidated statement of profit or loss
and other comprehensive income. Initial direct costs incurred in negotiating
and arranging an operating lease are recognised as an expense over the lease
term on the same basis as the lease income. Rental and other income is
invoiced in advance and for all rental and other income that relates to a
future period, this is deferred and appears with current liabilities on the
Group statement of financial position.
For leases that contain fixed or minimum uplifts, the rental income arising
from such uplifts is recognised on a straight-line basis over the lease term.
Occupier lease incentives are recognised as an adjustment of rental revenue on
a straight-line basis over the term of the lease. The lease term is the
non-cancellable period of the lease together with any further term for which
the occupier has the option to continue the lease, where at the inception of
the lease, the Directors are reasonably certain that the tenant will exercise
that option.
Amounts received from occupiers to terminate leases or to compensate for
dilapidations are recognised in the Group consolidated statement of profit or
loss and other comprehensive income when the right to receive them arises.
Service charge income is recognised when the related recoverable expenses are
incurred. The Group acts as the principal in service charge transactions, as
it directly controls the delivery of the services at the point at which they
are provided to the occupier.
4. Property operating and administration expenses
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Recoverable service charges 3,953 4,461
Service charge void costs 665 1,120
Premises expenses 662 591
Rates 378 457
Insurance expense 198 153
Bad debt charge/(write back) 28 (665)
Property operating expenses 1,931 1,656
Investment Adviser fees 2,979 3,389
Other administration expenses 1,473 1,500
Directors' remuneration (see note 5) 201 200
Audit fees (see note 6) 185 172
Cost associated with moving to Main Market - (12)
Administration expenses 4,838 5,249
Total 10,722 11,366
Accounting policy
All property operating expenses and administration expenses are charged to the
consolidated statement of profit or loss and other comprehensive income and
are accounted for on an accruals basis.
Property expenses are costs incurred by the Group that are not directly
recoverable from an occupier, as well as professional fees relating to the
letting of our estates.
Further information on the calculation of the Investment Adviser fees is set
out in note 27.
5. Directors' remuneration
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Claire Boyle 55 55
Richard Howell 45 45
Sally Ann Forsyth 40 40
Michael Taylor 40 40
Employers' National Insurance contributions 21 20
Total 201 200
A summary of the Directors' emoluments, including the disclosures required by
the Companies Act 2006, is set out in the Directors' remuneration report of
the Annual Report. The Group had no employees in the year.
6. Auditor's remuneration
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Audit fee 185 172
Total 185 172
The Group reviews the scope and nature of all proposed non-audit services
before engagement, to ensure that the independence and objectivity of the
Auditor are safeguarded. Audit fees are comprised of the following items:
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Audit of Group Annual Report and Financial Statements(1) 185 172
Total 185 172
(1.) Split as audit fees of £182,250 (2023: £172,000) plus recharged
disbursements of £2,511 (2023: £nil).
The Auditor has not undertaken any non-audit services during the year (2023:
£nil). The Audit and Risk Committee has considered the independence and
objectivity of the Auditor and has conducted a review of services, which the
Auditor has provided during the year under review. The Audit and Risk
Committee receives an annual assurance from the Auditor that its independence
is not compromised.
7. Finance income
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Interest receivable from interest rate derivatives 3,858 3,019
Change in fair value of deferred consideration on interest rate derivatives 195 152
Income from cash and short-term deposits 150 636
Total 4,203 3,807
Accounting policy
Interest income is recognised on an effective interest rate basis and is shown
within the Group consolidated statement of profit or loss and other
comprehensive income as finance income.
8. Finance expenses
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Loan interest 9,221 8,209
Change in fair value of interest rate derivatives 2,649 3,936
Loan arrangement fees amortised 320 458
Loan expenses 286 261
Break fees - 751
Loan arrangement fees written off - 716
Gross interest costs 12,476 14,331
Capitalisation of finance costs (2,086) (3,261)
Total 10,390 11,070
Accounting policy
Any finance costs that are separately identifiable and directly attributable
to an asset, which takes a period of time to complete, are amortised as part
of the cost of the asset. All other finance costs are expensed in the period
in which they occur. Finance costs consist of interest and other costs that an
entity incurs in connection with bank and other borrowings. Finance costs have
been capitalised in the period in accordance with the accounting policy
detailed in note 17.
9. Taxation
Corporation tax has arisen as follows:
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Corporation tax on residual income - (146)
Total - (146)
Reconciliation of tax charge to profit before tax:
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Loss before tax (13,977) (21,852)
Corporation tax at 25.0% (2023: 23.5%) (3,494) (5,135)
Change in value of investment properties 4,344 5,369
Change in value of interest rate derivatives 613 (888)
Adjustment for disallowable costs - (3)
Tax-exempt property rental business (1,463) 657
Current year tax charge - -
Prior year accrual reversal - (146)
Total - (146)
Accounting policy
Corporation tax is recognised in the consolidated statement of comprehensive
income except where in certain circumstances corporation tax may be recognised
in other comprehensive income.
As a REIT, the Group is exempt from corporation tax on the profits and gains
from its property rental business, provided it continues to meet certain
conditions as per the REIT regulations.
Non-qualifying profits and gains of the Group continue to be subject to
corporation tax. Therefore, current tax is the expected tax payable on the
non-qualifying taxable income for the period, if applicable, using tax rates
enacted, or substantively enacted, at the balance sheet date.
10. Operating leases
Operating lease commitments - as lessor
The Group has entered into commercial property leases on its investment
property portfolio. These non-cancellable leases have a remaining term of up
to 20 years (31 December 2023: 21 years).
Future minimum rentals receivable under non-cancellable operating leases as at
31 December 2024 are as follows:
As at As at
31 December 31 December
2024 2023
Within one year 15,384 15,008
Between one and five years 38,974 44,625
More than five years 31,133 31,771
Total 85,491 91,404
11. Dividends
For the year ended 31 December 2024 Pence £'000
per share
Second interim dividend for year ended 31 December 2023, paid on 13 May 2024 1.0 3,500
First interim dividend for year ended 31 December 2024, paid on 31 October 1.0 3,500
2024
Total 2.0 7,000
Paid as:
Property income distribution - -
Non-property income distribution 2.0 7,000
Total 2.0 7,000
For the year ended 31 December 2023 Pence £'000
per share
Second interim dividend for year ended 31 December 2022, paid on 15 May 2023 3.0 10,500
First interim dividend for year ended 31 December 2023, paid on 31 October 1.0 3,500
2023
Total 4.0 14,000
Paid as:
Property income distribution - -
Non-property income distribution 4.0 14,000
Total 4.0 14,000
Accounting policy
Dividends due to the Company's shareholders are recognised when they become
payable.
12. Earnings per share ("EPS")
Basic EPS is calculated by dividing profit for the year attributable to
ordinary shareholders of the Company by the weighted average number of
ordinary shares during the year. As there are no dilutive instruments in
issue, basic and diluted EPS are identical.
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
IFRS earnings (13,977) (21,706)
EPRA earnings adjustments:
Fair value losses on investment properties 17,376 22,848
Realised losses on disposal of investment properties - 317
Exceptional finance costs greater than one year - 716
Changes in fair value of interest rate derivatives 2,649 3,936
Changes in fair value of deferred consideration payable on interest rate (195) (152)
derivatives
EPRA earnings 5,853 5,959
Group-specific earnings adjustments:
Exceptional finance costs less than one year - 751
Cost associated with moving to Main Market - (12)
Adjusted earnings 5,853 6,698
Year ended Year ended
31 December 31 December
2024 2023
Pence Pence
Basic IFRS EPS (4.0) (6.2)
Diluted IFRS EPS (4.0) (6.2)
EPRA EPS 1.7 1.7
Adjusted EPS 1.7 1.9
Year ended Year ended
31 December 31 December
2024 2023
Number Number
of shares of shares
Weighted average number of shares in issue (thousands) 350,000 350,000
13. Investment property
Completed Development Total
investment property investment
property and land property
£'000 £'000 £'000
Investment property valuation brought forward as at 1 January 2024 314,858 67,442 382,300
Acquisitions(1) (218) - (218)
Disposals in the year - - -
Capital expenditure 5,493 13,048 18,541
Finance costs capitalised 61 2,025 2,086
Fair value losses on investment property (12,511) (4,865) (17,376)
Movement in rent incentives and amortisation (256) 143 (113)
Transfer from development to investment(3) 21,246 (21,246) -
Fair value at 31 December 2024 328,673 56,547 385,220
Completed Development Total
investment property investment
property and land property
£'000 £'000 £'000
Investment property valuation brought forward as at 1 January 2023 309,969 77,581 387,550
Acquisitions(1) (759) (21) (780)
Disposals in the year(2) (7,833) - (7,833)
Capital expenditure 2,410 20,373 22,783
Finance costs capitalised - 3,261 3,261
Fair value losses on investment property (18,182) (4,666) (22,848)
Movement in rent incentives and amortisation 167 - 167
Transfer from development to investment(3) 29,086 (29,086) -
Fair value at 31 December 2023 314,858 67,442 382,300
(1) During 2024, there were no acquisitions of new assets. The movement
reflected relates to the finalisation of acquisition balances from prior
years.
(2) During the year ended 31 December 2023, Lumen House was disposed of for
gross consideration of £7.7 million, £7.5 million net of transaction fees.
After writing off the disposal value in the year of £7.8 million, a loss of
£0.3 million was recognised in the consolidated statement of profit or loss
and other comprehensive income.
(3) Following practical completion of Building 5 at OTP during the year
ended 31 December 2024, the property became income-producing, resulting in a
transfer from development property and land to completed investment property.
During the year ended 31 December 2023, practical completion of the IQ
(Buildings 4A and 4B) at Oxford Technology Park occurred, resulting in a
transfer of those buildings from development property and land to completed
investment property.
Accounting policy
Investment property comprises property held to earn rental income or for
capital appreciation, or both. Investment property is recognised upon legal
completion of the contract, where costs are reliably measured and future
economic benefits that are associated with the property flow to the entity.
Investment property is measured initially at cost including transaction costs.
Transaction costs include transfer taxes and professional fees to bring the
property to the condition necessary for it to be capable of operating. The
carrying amount also includes the cost of replacing part of an existing
investment property at the time that cost is incurred if the recognition
criteria are met.
Development property and land is where the whole or a material part of an
estate is identified as having potential for development. Assets are
classified as such until development is completed, and they have the potential
to be fully income generating. Development property and land is measured at
fair value if the fair value is considered to be reliably determinable. Where
the fair value cannot be determined reliably, but where it is expected that
the fair value of the property will be reliably determined when construction
is completed, the property is measured at cost less any impairment until the
fair value becomes reliably determinable or construction is completed,
whichever is earlier. It is the Group's policy not to capitalise overheads or
operating expenses and no such costs were capitalised in either the year ended
31 December 2024 or the year ended 31 December 2023; however £2.1 million
(2023: £3.3 million) of finance costs have been capitalised in the year to 31
December 2024. Refer to note 17 for more details.
Subsequent to initial recognition, investment property is stated at fair value
(see note 22). Gains or losses arising from changes in the fair values are
included in the consolidated statement of profit or loss and other
comprehensive income in the period in which they arise under IAS 40 Investment
Property.
Investment properties cease to be recognised when they have been disposed of,
or withdrawn permanently from use, and no future economic benefit is expected.
Gains or losses on the disposal of investment property are determined as the
difference between net disposal proceeds and the carrying value of the asset.
Movements in rent incentives are presented within the total portfolio
valuation.
14. Trade and other receivables
31 December 31 December
2024 2023
£'000 £'000
Rent and insurance receivable 2,333 2,065
Prepayments and other receivables 964 2,230
Interest receivable 714 763
Occupier deposits 180 173
Amounts due from property manager 5 991
VAT receivable - 434
Current trade and other receivables 4,196 6,656
Occupier deposits 3,826 3,409
Non-current trade and other receivables 3,826 3,409
Total trade and other receivables 8,022 10,065
Accounting policy
Rent and other receivables are recognised at their original invoiced value and
become due based on the terms of the underlying lease or at the date of
invoice.
The Group carries out an assessment of expected credit losses at each period
end, using the IFRS 9 simplified approach, where a lifetime expected loss
allowance is recognised over the expected life of the financial instrument.
Adjustments are recognised in the income statement as an impairment gain or
loss. The rent and insurance receivable represents gross receivables of £2.4
million (31 December 2023: £2.1 million) and a provision for doubtful debts
of £0.1 million (31 December 2023: £nil). Collections for the year are 99.8%
and all historic arrears have been collected, thus no further expected credit
loss provision analysis is deemed necessary.
The Group considers a financial asset to be in default when the borrower is
unlikely to pay its credit obligations to the Group in full. The Group writes
off trade receivables when there is no reasonable expectation of recovery.
15. Cash and cash equivalents
Year ended Year ended
31 December 31 December
2024 2023
£'000 £'000
Cash 3,567 4,341
Cash equivalents 2,000 10,000
Total 5,567 14,341
Cash equivalents includes £2.0 million (2023: £10.0 million) of cash held by
various banks on short-term deposits.
Accounting policy
Cash and cash equivalents comprise cash at bank and short-term deposits with
banks and other financial institutions, with an initial maturity of three
months or less.
16. Interest rate derivatives
31 December 31 December
2024 2023
£'000 £'000
At the start of the year 3,998 4,303
Additional premiums paid and accrued 1,351 3,631
Changes in fair value of interest rate derivatives (2,649) (3,936)
Termination of caps (322) -
Balance at the end of the year 2,378 3,998
Current 2,378 -
Non-current - 3,998
Balance at the end of the year 2,378 3,998
To mitigate the interest rate risk that arises as a result of entering into
variable rate linked loans, the Group enters into interest rate derivatives.
A number of forward starting interest rate caps were entered into as at 26
June 2023 for a total deferred premium of £3.6 million to align with the
expected debt draw down of the debt facility. This caps SONIA at a strike rate
of 2.00% with a termination date of March 2025 (aligned with the cap entered
into in 2022). During 2024, two further interest rate caps were entered into:
• In September 2024, for a premium of £0.6 million, a six-month hedge
was entered into capping SONIA at a strike rate of 3.00% from 1 April 2025 to
30 September 2025. At the same time, the notional of the forward starting caps
terminating in March 2025 was reduced in line with updated debt draw down
assumptions resulting in a termination value of £0.3 million as above.
• In December 2024, for a deferred premium of £0.8m, a three-month
hedge was entered into capping SONIA at a strike rate of 2.00% from 1 October
2025 to 31 December 2025.
Accounting policy
Interest rate derivatives are initially recognised at fair value and are
subsequently measured at fair value, being the estimated amount that the Group
would receive or pay to terminate the agreement at the year end date, taking
into account current interest rate expectations and the current credit rating
of the Group and its counterparties. Premiums payable under such arrangements
are initially capitalised into the statement of financial position.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data is available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs significant to the fair value measurement as a whole. Changes in fair
value of interest rate derivatives are recognised within finance expenses in
profit or loss in the period in which they occur.
17. Interest-bearing loans and borrowings
Non-current 31 December 31 December
2024 2023
£'000 £'000
At the beginning of the year 108,726 75,000
Drawn in the year 14,000 142,520
Repaid in the year - (108,794)
Interest-bearing loans and borrowings 122,726 108,726
Unamortised fees at the beginning of the year (808) (912)
Loan arrangement fees paid in the year - (980)
Unamortised fees written off - 716
Amortisation charge for the year 320 368
Unamortised loan arrangement fees (488) (808)
Loan balance less unamortised loan arrangement fees 122,238 107,918
Current 31 December 31 December
2024 2023
£'000 £'000
At the beginning of the year - 35,833
Repaid in the year - (36,510)
Interest and commitment fees incurred in the year - 677
Interest-bearing loans and borrowings - -
Unamortised fees at the beginning of the year - (90)
Amortisation charge for the year - 90
Unamortised loan arrangement fees - -
Loan balance less unamortised loan arrangement fees - -
The Company has a debt facility with HSBC and Bank of Ireland ("BOI") split
60% and 40%, respectively (the "debt facility"). The debt facility comprises a
£100.0 million term loan and £50.0 million revolving credit facility ("RCF")
with an expiry date of 23 June 2026. It has an interest rate in respect of
drawn amounts of 250 basis points over SONIA and is secured on all of the
assets of the Group, including Oxford Technology Park ("OTP"). The debt
facility borrowers are Ironstone Life Science Holdings Limited and Oxford
Technology Park Holdings Limited, both direct subsidiaries of the Company. The
£100.0 million term loan was fully drawn during 2024. The RCF is being drawn
to fund the OTP development and other refurbishment projects, with £22.7
million drawn at the year ended 31 December 2024 (31 December 2023: £8.7
million) and a remaining £27.3 million available to utilise (31 December
2023: £41.3 million). The Group also has a £35.0 million accordion facility
available on the RCF, which has not been utilised as at 31 December 2024.
The debt facility includes LTV and interest cover covenants. The Group is in
full compliance with all loan covenants as at 31 December 2024. The facility
also includes a ratchet clause that reduces the margin to 2.35% if the gross
LTV decreases to 30%, based on the lenders' annual valuation of the portfolio.
The Group has also defined £40.0 million of the term loan as a Green Loan in
accordance with the LMA Green Loan Principles. This is secured on Rolling
Stock Yard and completed OTP buildings, which are rated either BREEAM
Excellent or EPC A.
Accounting policy
Loans and borrowings are initially recognised at the proceeds received net of
directly attributable transaction costs. Loans and borrowings are subsequently
measured at amortised cost. Interest on the HSBC and BOI facility is charged
to the consolidated statement of profit or loss and other comprehensive income
at the effective interest rate and shown within finance costs. The effective
interest rate is calculated as the daily SONIA rate plus the facility margin.
Transaction costs are amortised over the term of the loan.
Where a property is being developed or undergoing major refurbishment, finance
costs associated with direct expenditure on the property are capitalised.
Capitalisation commences when the activities to develop the property start and
continues until the property is substantially ready for its intended use,
normally practical completion.
Capitalised finance costs are calculated at the Group's weighted average
interest rate.
18. Other payables and accrued expenses
31 December 31 December
2024 2023
£'000 £'000
Deferred income 4,222 3,686
Capital expenses payable 1,943 4,046
Deferred consideration on interest rate caps 1,922 2,636
Loan interest payable 1,809 1,823
Administration and other expenses payable 1,101 1,753
Accounts payable 761 -
Property operating expenses payable 389 320
Occupier deposits payable to occupier 180 173
VAT payable 28 -
Current other payables and accrued expenses 12,355 14,437
Occupier deposits payable to occupier 3,826 3,409
Deferred consideration on interest rate caps - 1,195
Non-current other payables and accrued expenses 3,826 4,604
Total other payables and accrued expenses 16,181 19,041
Accounting policy
Other payables and accrued expenses are initially recognised at fair value and
subsequently held at amortised cost.
Deferred income is rental income invoiced to the occupier but relates to
future accounting periods. The income is deferred and is unwound to revenue on
a straight-line basis over the period in which it is earned.
19. Share capital
Share capital is the nominal amount of the Company's ordinary shares in issue.
31 December 2024 31 December 2023
Ordinary shares of £0.01 each Number £'000 Number £'000
Authorised, issued and fully paid:
Shares issued 350,000,000 3,500 350,000,000 3,500
Balance at the end of the year 350,000,000 3,500 350,000,000 3,500
The share capital comprises one class of ordinary shares. At general meetings
of the Company, ordinary shareholders are entitled to one vote on a show of
hands and on a poll for every share held. There are no restrictions on the
size of a shareholding or the transfer of shares, except for the UK REIT
restrictions.
Accounting policy
Share capital is the nominal amount of the Company's ordinary shares in issue.
20. Retained earnings
Retained earnings comprise the following cumulative amounts:
31 December 31 December
2024 2023
£'000 £'000
Total unrealised loss on investment properties (63,500) (46,124)
Total unrealised loss on interest rate derivatives and deferred consideration (4,083) (1,629)
Total realised gains 12,028 6,175
Retained earnings (55,555) (41,578)
Accounting policy
Retained earnings represent the profits of the Group less dividends paid from
revenue profits to date. Unrealised gains/(losses) on the revaluation of
investment properties, interest rate derivatives and deferred consideration
contained within this reserve are not distributable until any gains
crystallise on the sale of the investment property and interest rate caps.
As at 31 December 2024, the Company had distributable reserves available of
£326.9 million (2023: £328.0 million).
21. Net asset value per share
Basic NAV per share amounts are calculated by dividing net assets attributable
to ordinary equity holders of the Company in the statement of financial
position by the number of ordinary shares outstanding at the end of the year.
As there are no dilutive instruments in issue, basic and diluted NAV per share
are identical.
EPRA net tangible assets ("EPRA NTA") is calculated using property values in
line with IFRS, where values are net of real estate transfer tax ("RETT") and
other purchasers' costs. EPRA NTA is considered to be the most relevant
measure for the Group's operating activities.
31 December 31 December
2024 2023
£'000 £'000
IFRS net assets attributable to ordinary shareholders 262,768 283,745
IFRS net assets for calculation of NAV 262,768 283,745
Adjustment to net assets:
Fair value of interest rate derivatives (2,378) (3,998)
EPRA NTA 260,390 279,747
31 December 31 December
2024 2023
Pence Pence
IFRS basic and diluted NAV per share (pence) 75.1 81.1
EPRA NTA per share (pence) 74.4 79.9
31 December 31 December
2024 2023
Number Number
of shares of shares
Number of shares in issue (thousands) 350,000 350,000
22. Fair value
IFRS 13 defines fair value as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The following methods and assumptions
were used to estimate the fair values.
The fair value of cash and short-term deposits, trade receivables, trade
payables and other current liabilities approximate their carrying amounts due
to the short-term maturities of these instruments.
Interest-bearing loans and borrowings are disclosed at amortised cost. The
carrying values of the loans and borrowings approximate their fair value due
to the contractual terms and conditions of the loan. The HSBC and BOI debt
facility has an interest rate of 250 basis points over SONIA in respect of
drawn amounts.
The fair value of the interest rate contracts is recorded in the statement of
financial position and is revalued quarterly by an independent valuations
specialist, Chatham Financial.
Six-monthly valuations of investment property are performed by CBRE,
accredited external valuers with recognised and relevant professional
qualifications and recent experience of the location and category of the
investment property being valued, on a variable fee basis. However, the
valuations are the ultimate responsibility of the Director who appraises these
every six months.
The valuation of the Group's investment property at fair value is determined
by the external valuer on the basis of market value in accordance with the
internationally accepted RICS Valuation - Professional Standards January 2022
(incorporating the International Valuation Standards).
Completed investment properties are valued by adopting the 'income
capitalisation' method of valuation. This approach involves applying
capitalisation yields to current and future rental streams, net of income
voids arising from vacancies or rent-free periods and associated running
costs. These capitalisation yields and future rental values are based on
comparable property and leasing transactions in the market using the valuer's
professional judgement and market observations. Other factors taken into
account in the valuations include the tenure of the property, tenancy details
and ground and structural conditions.
On-site developments are valued by applying the 'residual method' of
valuation, which is the investment method described above with a deduction for
all costs necessary to complete the development, with a further allowance for
remaining risk and developers' profit. Properties and land held for future
development are valued using the highest and best use method, by adopting the
residual method allowing for all associated risks, the investment method or a
value per acre methodology.
The following table shows an analysis of the fair values of investment
properties recognised in the statement of financial position by level of the
fair value hierarchy(1):
Assets and liabilities measured at fair value 31 December 2024
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investment properties - - 385,220 385,220
Interest rate derivatives - 2,378 - 2,378
Deferred consideration on interest rate caps - (1,922) - (1,922)
Total - 456 385,220 385,676
Assets and liabilities measured at fair value 31 December 2023
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investment properties - - 382,300 382,300
Interest rate derivatives - 3,998 - 3,998
Deferred consideration on interest rate caps - (3,831) - (3,831)
Total - 167 382,300 382,467
(1) Explanation of the fair value hierarchy:
• Level 1 - quoted prices (unadjusted) in active markets for identical
assets or liabilities that the entity can access at the measurement date;
• Level 2 - use of a model with inputs (other than quoted prices
included in Level 1) that are directly or indirectly observable market data;
and
• Level 3 - use of a model with inputs that are not based on
observable market data.
There have been no transfers between Level 1 and Level 2 during either year,
nor have there been any transfers in or out of Level 3.
Sensitivity analysis to significant changes in unobservable inputs within the
valuation of investment properties
The following table analyses:
• the fair value measurements at the end of the reporting year;
• a description of the valuation techniques applied;
• the inputs used in the fair value measurement, including the ranges
of rent charged to different units within the same building; and
• for Level 3 fair value measurements, quantitative information about
significant unobservable inputs used in the fair value measurement.
31 December 2024 Fair value Valuation Key Range
£'000 technique unobservable
inputs
Completed investment property(1) £328,673 Income capitalisation ERV £15.4-£110.0 per sq ft
Equivalent yield 5.05%-7.25%
Development property £50,972 Income ERV £20.0 per sq ft
capitalisation/ residual method
Equivalent yield 5.05%-5.75%
Development land £5,575 Comparable method/ residual method Sales rate per sq ft £63.7 per sq ft
Total £385,220
31 December 2023 Fair value Valuation Key Range
£'000 technique unobservable
inputs
Completed investment property £314,858 Income capitalisation ERV £16.0-£115.0 per sq ft
Equivalent yield 4.75%-7.25%
Development property £58,930 Income ERV £20.0 per sq ft
capitalisation/ residual method
Equivalent yield 5.25%-5.70%
Development land £8,512 Comparable method/ residual method Sales rate per sq ft £102.4 per sq ft
Total £382,300
(1) ERV range excludes one unit which has an ERV of £nil.
Significant increases/decreases in the ERV (per sq ft per annum) and rental
growth per annum in isolation would result in a significantly higher/lower
fair value measurement. Significant increases/decreases in the long-term
vacancy rate and discount rate (and exit yield) in isolation would result in a
significantly lower/higher fair value measurement.
Generally, a change in the assumption made for the ERV (per sq ft per annum)
is accompanied by:
• a similar change in the rent growth per annum and discount rate (and
exit yield); and
• an opposite change in the long-term vacancy rate.
The table below sets out a sensitivity analysis for each of the key sources of
estimation uncertainty with the resulting increase/(decrease) in the fair
value of completed investment property:
As at 31 December 2024
Completed investment property Increase in Decrease in
sensitivity sensitivity
£'000 £'000
Change in ERV of 10% 32,867 (32,867)
Change in net equivalent yields of 50 basis points (31,077) 37,251
Development property Increase in Decrease in
sensitivity sensitivity
£'000 £'000
Change in ERV of 10% 5,097 (5,097)
Change in net equivalent yields of 50 basis points (5,042) 6,032
Development land Increase in Decrease in
sensitivity sensitivity
£'000 £'000
Change in sales rate per sq ft of 10% 558 (558)
As at 31 December 2023 Increase in Decrease in
sensitivity sensitivity
£'000 £'000
Completed investment property
Change in ERV of 10% 31,486 (31,486)
Change in net equivalent yields of 50 basis points (29,733) 35,987
Development property Increase in Decrease in
sensitivity sensitivity
£'000 £'000
Change in ERV of 10% 5,893 (5,893)
Change in net equivalent yields of 50 basis points (6,829) 8,190
Development land Increase in Decrease in
sensitivity sensitivity
£'000 £'000
Change in sales rate per sq ft of 10% 851 (851)
Gains and losses recorded in profit or loss for recurring fair value
measurements categorised within Level 3 of the fair value hierarchy amount to
a loss of £17.4 million (31 December 2023: loss of £22.8 million) and are
presented in the consolidated statement of profit or loss and other
comprehensive income in line item 'fair value gains/(losses) on investment
properties'.
All gains and losses recorded in the consolidated statement of profit or loss
and other comprehensive income for recurring fair value measurements
categorised within Level 3 of the fair value hierarchy, are attributable to
changes in unrealised gains or losses relating to investment property held at
the end of the reporting year.
The carrying amount of the Group's other assets and liabilities is considered
to be the same as their fair value.
23. Financial risk management objectives and policies
The Group has trade and other receivables, trade and other payables, and cash
and short-term deposits that arise directly from its operations.
The Group is exposed to market risk, interest rate risk, credit risk and
liquidity risk. The Board of Directors reviews and agrees policies for
managing each of these risks, which are summarised below.
Market risk
Market risk is the risk that future values of investments in property and
related investments will fluctuate due to changes in market prices. The total
exposure in the consolidated statement of financial position at the year ended
31 December 2024 is £385.2 million (31 December 2023: £382.3 million) and to
manage this risk, the Group diversifies its portfolio across a number of
assets. The Group's investment policy is to invest in UK-located life science
assets. The Group will invest and manage its portfolio with an objective of
spreading risk and, in doing so, will maintain the following investment
restrictions:
• No individual building will represent more than 25% of gross asset
value.
• The Company will target a portfolio with no one occupier accounting
for more than 20% (but subject to a maximum of 30%) of the higher of either
(i) gross contracted rents or (ii) the valuer's ERV of the Company's
portfolio, including developments under forward-funding agreements, as
calculated at the time of investing or leasing.
• The aggregate maximum exposure to assets under development,
including forward fundings, will not exceed 30% of gross asset value. Within
this limit, the maximum exposure to developments, as measured by the expected
gross development cost, which are not under forward-funded arrangements, will
not exceed 15% of gross asset value at the commencement of the relevant
development.
• No more than 10% of gross asset value will be invested in properties
that are not life science properties.
Credit risk
Credit risk is the risk that a counterparty or occupier will cause a financial
loss to the Group by failing to meet a commitment it has entered into with the
Group.
All cash deposits are placed with approved counterparties, all of whom have a
credit rating of AA- or above. In respect of property investments, in the
event of a default by an occupier, the Group will suffer a shortfall and
additional costs concerning reletting of the property. The Investment Adviser
monitors the occupier arrears in order to anticipate and minimise the impact
of defaults by occupational occupiers. For further details on the Group's
expected credit loss policy, see note 14.
The following table analyses the Group's maximum exposure to credit risk:
31 December 31 December
2024 2023
£'000 £'000
Cash and cash equivalents 5,567 14,341
Trade and other receivables(1) 3,118 5,300
Total 8,685 19,641
(1) Excludes prepayments, occupier deposits and VAT receivable.
Interest rate risk
Interest rate risk is the risk that future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The
Group's exposure to the risk of changes in market interest rates relates to
its variable rate bank loans. To mitigate the interest rate risk that arises
as a result of entering into variable rate linked loans, the Group has entered
into interest rate derivatives. As at 31 December 2024, there were four
interest rate derivatives in place:
• In August 2022, additional protection was secured against potential
future interest rate rises through capping the SONIA rate at 2.00% until 31
March 2025 on the £75.0 million HSBC term loan at a premium of £2.3 million.
This remained in place following the refinancing with HSBC and BOI in June
2023, which resulted in an increase in the term loan to £100.0 million and
reduction in the RCF facility to £50.0 million.
• Following the refinancing with HSBC and BOI, in June 2023, a number
of forward starting interest rate caps were entered into for a total deferred
premium of £3.6 million to align with the expected debt draw down of the RCF
and hedge the remaining £25.0 million term loan. This caps SONIA at a strike
rate of 2.00% with a termination date of 31 March 2025.
• In September 2024, for a premium of £0.6 million, a six-month hedge
was entered into, capping SONIA at a strike rate of 3.00% from 1 April 2025 to
30 September 2025.
• In December 2024, for a deferred premium of £0.8m, a three-month
hedge was entered into, capping SONIA at a strike rate of 2.00% from 1 October
2025 to 31 December 2025.
Changes in interest rates may have an impact on consolidated earnings over the
longer term. The table below provides indicative sensitivity data.
2024 2023
Effect on profit before tax Increase in Decrease in Increase in Decrease in
interest rates interest rates interest rates interest rates
by 1% by 1% by 1% by 1%
£'000 £'000 £'000 £'000
(Decrease)/increase (119) 118 (1,475) 1,446
Foreign exchange rate risk
Management has considered the risks but has not deemed them material for the
business, as the Group's exposure to foreign exchange rate risk as at 31
December 2024 and 31 December 2023 was minimal.
Liquidity risk
Liquidity risk is defined as the risk that the Group will encounter difficulty
in meeting obligations associated with financial liabilities that are settled
by delivering cash or another financial asset. Exposure to liquidity risk
arises because of the possibility that the Group could be required to pay its
liabilities earlier than expected. The Group's objective is to maintain a
balance between continuity of funding and flexibility through the use of bank
deposits and loans.
Set out below is a comparison, by class, of the carrying amounts and fair
value of the Group's financial instruments that are carried in the financial
statements:
2024 2023
Fair Carrying Fair Fair Carrying Fair
value value value value value value
hierarchy £'000 £'000 £'000 £'000
Held at amortised cost
Cash and cash equivalents n/a 5,567 5,567 n/a 14,341 14,341
Trade and other receivables(1) n/a 7,124 7,124 n/a 9,316 9,316
Other payables and accrued expenses(2) n/a (11,959) (11,959) n/a (15,355) (15,355)
Interest-bearing loans and borrowings n/a (122,238) (122,238) n/a (107,918) (107,918)
Held at fair value
Interest rate derivatives n/a 2,378 2,378 n/a 3,998 3,998
(1) Excludes prepayments.
(2) Excludes deferred income.
The table below summarises the maturity profile of the Group's financial
liabilities based on contractual undiscounted payments:
Year ended 31 December 2024 Less Three One to Two to More than Total
than three to 12 two years five years five years £'000
months months £'000 £'000 £'000
£'000 £'000
Other payables and accrued expenses(1) 6,844 1,653 1,934 516 1,376 12,323
Interest-bearing loans and borrowings 1,438 4,931 125,504 - - 131,873
Total 8,282 6,584 127,438 516 1,376 144,196
Company Less Three One to Two to More than Total
than three to 12 two years five years five years
months months
Other payables and accrued expenses(1) 7,976 2,775 1,318 2,355 1,054 15,478
Interest-bearing loans and borrowings 1,336 4,036 5,357 110,017 - 120,746
Total 9,312 6,811 6,675 112,372 1,054 136,224
(1) Excludes deferred income and fair value adjustment on the deferred
consideration payable on cap premiums.
24. Subsidiaries
Company Country of Country of Number and class of Group
incorporation Registration share held by the Group holding
and operation Number
Ironstone Life Science Holdings Limited(2) UK 13390321 1,000 ordinary shares 100%
Ironstone Life Science Cambourne Two Limited(1, 2) UK 13779806 1 ordinary share 100%
Ironstone Life Science Cambourne Limited(1, 2) UK 13763082 1 ordinary share 100%
Ironstone Life Science RSY Limited(1, 2) UK 13763039 1 ordinary share 100%
Ironstone Life Science Merrifield Limited(1, 2) UK 13763037 1 ordinary share 100%
Merrifield Centre Limited(1, 2, 4) UK 11118349 21,786,493 ordinary shares 100%
Ironstone Life Science Herbrand Limited(1, 2) UK 14044299 1 ordinary share 100%
Herbrand Properties Limited(1, 3) BVI 1908435 6,000 ordinary shares 100%
Oxford Technology Park Holdings Limited(2) UK 12434159 92 ordinary shares 100%
Oxford Technology Park Limited(1, 2) UK 08483449 100 ordinary shares 100%
Oxford Technology Park Investments Limited(1, 2) UK 12442240 1 ordinary share 100%
(1) Indirect subsidiaries.
(2) Registered office: Radius House, 51 Clarendon Road, Watford, WD17 1HP.
(3) Registered office: Nerine Chambers, P.O. Box 905, Road Town, Tortola,
1110, British Virgin Islands.
(4) Merrifield Centre Limited was liquidated on 21 January 2025.
A list of all related undertakings included within these consolidated
Financial Statements is noted above. The principal activity of all the
subsidiaries relates to property investment.
The Group consists of a parent company, Life Science REIT plc, incorporated in
England and Wales, and a number of subsidiaries held directly by Life Science
REIT plc, which operate and are incorporated in the UK, Jersey and the British
Virgin Islands.
The Group owns 100% equity shares of all subsidiaries listed above and has the
power to appoint and remove the majority of the Board of Directors of those
subsidiaries. The relevant activities of the above subsidiaries are determined
by the Board of Directors based on the purpose of each company.
Therefore, the Directors concluded that the Group has control over all these
entities and all these entities have been consolidated within the consolidated
Financial Statements.
The subsidiaries are exempt from the requirements of the Companies Act 2006
relating to the audit of individual accounts by virtue of section 479A of the
Act. The Company has provided a guarantee under section 479C of the Companies
Act 2006 in respect of the financial year ended 31 December 2024 for a number
of its subsidiary companies. The guarantee is over all outstanding liabilities
to which the subsidiary companies are subject to at 31 December 2024 until
they are satisfied in full.
Accounting policy
Where property is acquired, via corporate acquisitions or otherwise,
management considers the substance of the assets and activities of the
acquired entity in determining whether the acquisition represents the
acquisition of a business.
Where such acquisitions are not judged to be an acquisition of a business,
they are not treated as business combinations. Rather, the cost to acquire the
corporate entity is allocated between the identifiable assets and liabilities
of the entity, based on their relative fair values at the acquisition date.
Accordingly, no goodwill or additional deferred taxation arises. Otherwise,
acquisitions are accounted for as business combinations.
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value, and the amount of any
non-controlling interest in the acquiree.
For each business combination, the acquirer measures the non-controlling
interest in the acquiree at fair value of the proportionate share of the
acquiree's identifiable net assets. Acquisition costs (except for costs of
issue of debt or equity) are expensed in accordance with IFRS 3 Business
Combinations.
When the Group acquires a business, it assesses the financial assets and
liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date.
Contingent consideration is deemed to be equity or a liability in accordance
with IAS 32. If the contingent consideration is classified as equity, it is
not remeasured, and its subsequent settlement shall be accounted for within
equity. If the contingent consideration is classified as a liability,
subsequent changes to the fair value are recognised either in profit or loss
or as a change to other comprehensive income.
25. Capital management
The Group's capital is represented by share capital, reserves and borrowings.
The primary objective of the Group's capital management is to ensure that it
remains within its quantitative banking covenants and maintains a strong
credit rating. The Group's capital policies are as follows:
• The Group will keep sufficient cash for working capital purposes with
excess cash, should there be any, deposited at the best interest rate
available whilst maintaining flexibility to fund the Group's investment
programme.
• Borrowings will be managed in accordance with the loan agreements and
covenants will be tested quarterly and reported to the Directors.
Additionally, quarterly lender reporting will be undertaken in line with the
loan agreement.
• New borrowings are subject to Director approval. Such borrowings will
support the Group's investment programme, but will be subject to a maximum 55%
LTV. The intention is to maintain borrowings at an LTV of between 30% and 40%.
The Group is subject to banking covenants in regard to its debt facility and
these include a prescribed methodology for interest cover and market value
covenants. The Group has complied with all covenants on its borrowings up to
the date of this report. All of the targets mentioned above sit comfortably
within the Group's covenant levels, which include LTV and forward and backward
looking interest cover ratios. The Group LTV at the year end was 30.4% (31
December 2023: 24.7%) and there is substantial headroom within existing
covenants.
26. Capital commitments
At 31 December 2024, the Group had contracted capital expenditure of £27.4
million (31 December 2023: £39.9 million).
27. Related party transactions
Directors
The Directors (all Non-Executive Directors) of the Company and its
subsidiaries are considered to be the key management personnel of the Group.
Directors' remuneration for the year totalled £200,880 (year ended 31
December 2023: £200,304) at 31 December 2024, including £20,880 of
employers' National Insurance contributions (year ended 31 December 2023:
£20,304); a balance of £nil (year ended 31 December 2023: £nil) was
outstanding relating to employer NI. Further information is given in note 5
and in the Directors' remuneration report of the Annual Report.
Investment Adviser
The Company is party to an Investment Advisory Agreement with the AIFM and the
Investment Adviser, pursuant to which the Investment Adviser has been
appointed to provide investment advisory services relating to the respective
assets on a day-to‑day basis in accordance with their respective investment
objectives and policies, subject to the overall supervision and direction by
the AIFM and the Board of Directors.
For its services to the Company, the Investment Adviser is entitled to a fee
payable quarterly in arrears calculated at the rate of one quarter of 1.1% per
quarter on that part of the NAV up to, and including, £500 million; one
quarter of 0.9% per quarter on that part of the NAV in excess of £500 million
and up to £1 billion; and one quarter of 0.75% per quarter on NAV in excess
of £1 billion.
Following the strategic review announcement on 14 March 2025, the Board and
Investment Adviser have agreed to revisions to the fee, effective from the
quarter commencing 1 April 2025. The Investment Advisory fee will move from
being calculated on net asset value to the lower of net asset value and the
average market capitalisation for the quarter, subject to a floor of no lower
than 70.0% of net asset value. In addition the rate applied to the initial fee
threshold of £500 million has been lowered to 1.0%. Refer to the Directors'
report in the Annual Report for further information.
During the year, the Group incurred £2,978,777 (2023: £3,388,548) in respect
of investment advisory fees. As at 31 December 2024, £726,625 (2023:
£787,521) was outstanding.
28. Reconciliation of changes in liabilities to cash flows generated from
financing activities
Interest-bearing loans Interest-bearing loans Total
and borrowings and borrowings £'000
current non-current
£'000 £'000
Balance as at 1 January 2024 - 107,918 107,918
Changes from financing cash flows:
Bank loans drawn down - 14,000 14,000
Bank loans repaid - - -
Loan arrangement fees paid in the year - - -
Total changes from financing cash flows - 14,000 14,000
Additional interest and commitment fees capitalised - - -
Unamortised fees written off - - -
Amortisation charge for the year - 320 320
Balance as at 31 December 2024 - 122,238 122,238
Interest-bearing loans Interest-bearing loans Total
and borrowings and borrowings £'000
current non-current
£'000 £'000
Balance as at 1 January 2023 35,743 74,088 109,831
Changes from financing cash flows:
Bank loans drawn down - 142,520 142,520
Bank loans repaid (36,510) (108,794) (145,304)
Loan arrangement fees paid in the year - (980) (980)
Total changes from financing cash flows (36,510) 32,746 (3,764)
Additional interest and commitment fees capitalised 677 - 677
Unamortised fees written off - 716 716
Amortisation charge for the year 90 368 458
Balance as at 31 December 2023 - 107,918 107,918
29. Ultimate controlling party
It is the view of the Directors that there is no ultimate controlling party.
30. Post balance sheet events
On 14 March 2025, the Board announced the commencement of a strategic review
whereby it is considering the future of the Group and exploring all strategic
options available to maximise value for shareholders.
Company statement of financial position
As at 31 December 2024
Notes 31 December 31 December
2024 2023
£'000 £'000
Assets
Non-current assets
Investment in subsidiary companies 33 73,769 73,767
Trade and other receivables 35 239,377 240,336
313,146 314,103
Current assets
Cash and cash equivalents 34 2,065 10,051
Trade and other receivables 35 322 1,338
2,387 11,389
Total assets 315,533 325,492
Liabilities
Current liabilities
Other payables and accrued expenses 36 (1,448) (3,151)
Total liabilities (1,448) (3,151)
Net assets 314,085 322,341
Equity
Share capital 19 3,500 3,500
Capital reduction reserve 314,823 321,823
Retained earnings (4,238) (2,982)
Total equity 314,085 322,341
Number of shares in issue (thousands) 350,000 350,000
Net asset value per share (basic and diluted) (pence) 89.7 92.1
The Company reported a loss for the year ended 31 December 2024 of £1,256,000
(year ended 31 December 2023: £20,667,000 profit).
These Financial Statements were approved by the Board of Directors of Life
Science REIT plc on 15 April 2025 and signed on its behalf by:
Claire Boyle
Company number: 13532483
Company statement of changes in equity
For the year ended 31 December 2024
Share Capital Retained Total equity
capital reduction earnings £'000
£'000 reserve £'000
£'000
Balance at 1 January 2024 3,500 321,823 (2,982) 322,341
Loss for the year and total comprehensive loss - - (1,256) (1,256)
Dividends paid - (7,000) - (7,000)
Balance at 31 December 2024 3,500 314,823 (4,238) 314,085
Share Capital Retained Total equity
capital reduction earnings £'000
£'000 reserve £'000
£'000
Balance at 1 January 2023 3,500 335,823 (23,649) 315,674
Profit for the year and total comprehensive profit - - 20,667 20,667
Dividends paid - (14,000) - (14,000)
Balance at 31 December 2023 3,500 321,823 (2,982) 322,341
Notes to the Company Financial Statements
for the year ended 31 December 2024
31. General information
Life Science REIT plc is a closed-ended REIT incorporated in England and Wales
on 27 July 2021. The Company began trading on 19 November 2021 and its shares
are admitted to trading on the Premium Listing Segment of the Main Market of
the London Stock Exchange. The registered office of the Company is located at
Central Square, 29 Wellington Street, Leeds, England, LS1 4DL.
32. Basis of preparation
These Financial Statements are prepared in accordance with United Kingdom
Generally Accepted Accounting Practice including Financial Reporting Standard
101 Reduced Disclosure Framework ("FRS 101") and in conformity with the
requirements of the Companies Act 2006. The Financial Statements have been
prepared under the historical cost convention. The audited Financial
Statements are presented in Pound Sterling and all values are rounded to the
nearest thousand pounds (£'000), except when otherwise indicated.
In preparing these Financial Statements, the Company has taken advantage of
all disclosure exemptions conferred by FRS 101. Therefore, these Financial
Statements do not include:
• certain disclosures regarding the Company's capital;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted;
• the disclosure of the remuneration of key management personnel; and
• disclosure of related party transactions with other wholly owned
members of Life Science REIT plc.
In addition, and in accordance with FRS 101, further disclosure exemptions
have been adopted because equivalent disclosures are included in the Company's
consolidated Financial Statements. These Financial Statements do not include
certain disclosures in respect of:
• share-based payments;
• financial instruments; and
• fair value measurement.
The Company has taken advantage of the exemption in section 408 of the
Companies Act 2006 not to present its own statement of comprehensive income.
The Financial Statements of the Company follow the accounting policies laid
out.
The key source of estimation uncertainty relates to the Company's investment
in Group companies and is stated in the Company's separate financial
statements at cost less impairment losses, if any. Impairment losses are
determined with reference to the investment's fair value less estimated
selling costs. Fair value is derived from the subsidiaries', and their
subsidiaries', net assets at the balance sheet date. Investment properties
held by the subsidiary companies are supported by independent valuation.
Judgements and assumptions associated with the property values of the
investments held by the subsidiary companies are detailed in the Group
financial statements.
33. Investment in subsidiary companies
31 December 31 December
2024 2023
£'000 £'000
Investment in subsidiary companies
Balance at the beginning of the year 73,767 65,138
Increase in investments 2 -
Cost of investment - (12,682)
Provision for impairment - 21,311
Total 73,769 73,767
31 December 31 December
2024 2023
£'000 £'000
Investment in subsidiary companies
Ironstone Life Science Holdings Limited 1 1
Oxford Technology Park Holdings Limited 73,768 73,766
73,769 73,767
Following a review comparing cost of investments to the underlying net assets
of subsidiary companies, an impairment provision has been made of £nil (2023:
£21.3 million reversal of 2022 provision).
Movement of £2,000 in the year relates to the reallocation of a prior period
cost allocation. In the prior year, negative costs associated with the
acquisition of new subsidiary companies of £12,682,000 resulted from the
reallocation of a prior period tax charge within the subsidiary company.
For an impairment review to be considered the value of the underlying assets
would need to fall by 74%.
Accounting policy
Investments in subsidiary companies are included in the statement of financial
position at cost less impairment. For a list of subsidiary companies, see note
24.
34. Cash and cash equivalents
31 December 31 December
2024 2023
£'000 £'000
Cash equivalents 2,000 10,000
Cash 65 51
Total 2,065 10,051
Accounting policy
Cash equivalents include cash at bank and short-term deposits with banks and
other financial institutions, with an initial maturity of three months or
less.
35. Trade and other receivables
A. Receivables: non-current assets
31 December 31 December
2024 2023
£'000 £'000
Amounts due from subsidiary companies 239,377 240,336
Total 239,377 240,336
Loans due from subsidiary companies are unsecured, interest free and repayable
on demand. These loans are not expected to be recovered within 12 months and,
are therefore, classified as non-current assets.
B. Receivables current assets
31 December 31 December
2024 2023
£'000 £'000
Prepayments and other receivables 322 1,338
Total 322 1,338
36. Other payables and accrued expenses
31 December 31 December
2024 2023
£'000 £'000
Administration expenses payable and accrued 1,056 1,345
Capital expenses payable 325 1,647
Accounts payable 67 -
Other expenses payable - 159
Total 1,448 3,151
UNAUDITED SUPPLEMENTARY NOTES NOT PART OF THE CONSOLIDATED FINANCIAL
INFORMATION
for the year ended 31 December 2024
The Group is a member of the European Public Real Estate Association ("EPRA")
and was awarded an EPRA gold award for compliance with EPRA Best Practice
Recommendations ("BPR") for the 2023 Annual Report and Financial Statements.
EPRA has developed and defined the following performance measures to give
transparency, comparability and relevance of financial reporting across
entities that may use different accounting standards. The following measures
are calculated in accordance with EPRA guidance. These are not intended as a
substitute for IFRS measures.
Table 1: EPRA performance measures summary
Notes Year to Year to
31 December 31 December
2024 2023
EPRA earnings (£'000) Table 2 5,853 5,959
EPRA EPS (pence) Table 2 1.7 1.7
EPRA cost ratio (including direct vacancy cost) Table 6 40.8% 44.1%
EPRA cost ratio (excluding direct vacancy cost) Table 6 34.1% 33.7%
Notes 31 December 31 December
2024 2023
EPRA NDV per share (pence) Table 3 75.1 81.1
EPRA NRV per share (pence) Table 3 81.7 87.2
EPRA NTA per share (pence) Table 3 74.4 79.9
EPRA NIY Table 4 3.9% 3.6%
EPRA 'topped-up' net initial yield Table 4 4.1% 3.7%
EPRA vacancy rate Table 5 15.6% 21.0%
EPRA loan to value Table 10 32.5% 27.0%
Table 2: EPRA income statement
Notes Year to Year to
31 December 31 December
2024 2023
Revenue 3 20,308 19,942
Less: insurance recharged 3 (164) (143)
Less: service charge income 3 (3,953) (4,461)
Rental income (A) 16,191 15,338
Property operating expenses (including recoverable service charges) 4 (5,884) (6,117)
Add: insurance recharged 3 164 143
Add: service charge income 4 3,953 4,461
Gross profit (B) 14,424 13,825
Administration expenses 4 (4,838) (5,249)
Operating profit before interest and tax 9,586 8,576
Finance income 7 4,203 3,807
Finance expenses 8 (10,390) (11,070)
Less change in fair value of interest rate derivatives and deferred 7,8 2,454 3,784
consideration
Less costs of early refinancing with greater than 12 months to expiry 8 - 716
Adjusted profit before tax 5,853 5,813
Taxation 9 - 146
EPRA earnings 5,853 5,959
Company-specific adjustments:
EPRA earnings 5,853 5,959
Cost associated with moving to Main Market 4 - (12)
Cost of early refinancing with less than 12 months to expiry 8 - 751
Adjusted earnings 5,853 6,698
Weighted average number of shares in issue (thousands) 19 350,000 350,000
EPRA EPS (pence) 12 1.7 1.7
Adjusted EPS (pence) 12 1.7 1.9
Gross to net rental income ratio (B/A) 89.1% 90.1%
Adjusted earnings represents earnings from operational activities. It is a key
measure of the Group's underlying operational results and an indication of the
extent to which dividend payments are supported by earnings.
Table 3: EPRA balance sheet and net asset value performance measures
EPRA net disposal value ("NDV"), EPRA net reinstatement value ("NRV") and EPRA
net tangible assets ("NTA"). A reconciliation of the three new EPRA NAV
metrics from IFRS NAV is shown in the table below. Total accounting return
will now be calculated based on EPRA NTA.
As at 31 December 2024 Notes EPRA NDV EPRA NRV EPRA NTA
£'000 £'000 £'000
Total properties(1) 13 385,220 385,220 385,220
Net borrowings(2) 15,17 (117,159) (117,159) (117,159)
Other net liabilities (5,293) (5,293) (5,293)
IFRS NAV 21 262,768 262,768 262,768
Include: real estate transfer tax(3) - 25,529 -
Exclude: fair value of interest rate derivatives 16 - (2,378) (2,378)
NAV used in per share calculations 262,768 285,919 260,390
Number of shares in issue (thousands) 19 350,000 350,000 350,000
NAV per share (pence) 21 75.1 81.7 74.4
As at 31 December 2023 Notes EPRA NDV EPRA NRV EPRA NTA
£'000 £'000 £'000
Total properties(1) 13 382,300 382,300 382,300
Net borrowings(2) 15,17 (94,385) (94,385) (94,385)
Other net liabilities (4,170) (4,170) (4,170)
IFRS NAV 21 283,745 283,745 283,745
Include: real estate transfer tax(3) - 25,357 -
Exclude: fair value of interest rate derivatives 16 - (3,998) (3,998)
NAV used in per share calculations 283,745 305,104 279,747
Number of shares in issue (thousands) 19 350,000 350,000 350,000
NAV per share (pence) 21 81.1 87.2 79.9
(1) Professional valuation of investment property.
(2) Comprising interest-bearing loans and borrowings (excluding unamortised
loan arrangement fees) of £122.7 million net of cash of £5.6 million (31
December 2023: £108.7 million net of cash of £14.3 million).
(3) EPRA NTA and EPRA NDV reflect IFRS values that are net of real estate
transfer tax. Real estate transfer tax is added back when calculating EPRA
NRV.
EPRA NDV details the full extent of liabilities and resulting shareholder
value if Company assets are sold and/or if liabilities are not held until
maturity. Deferred tax and financial instruments are calculated as to the full
extent of their liability, including tax exposure not reflected in the
statement of financial position, net of any resulting tax.
EPRA NTA assumes entities buy and sell assets, thereby crystallising certain
levels of deferred tax liability.
EPRA NRV highlights the value of net assets on a long-term basis and reflects
what would be needed to recreate the Company through the investment markets
based on its current capital and financing structure. Assets and liabilities
that are not expected to crystallise in normal circumstances, such as the fair
value movements on financial derivatives and deferred taxes on property
valuation surpluses, are excluded. Costs such as real estate transfer taxes
are included.
Table 4: EPRA net initial yield
Notes 31 December 31 December
2024 2023
£'000 £'000
Total properties per external valuers' report 13 385,220 382,300
Less development property and land 13 (56,547) (67,442)
Net valuation of completed properties 328,673 314,858
Add estimated purchasers' costs(1) 21,925 20,884
Gross valuation of completed properties, including 350,598 335,742
estimated purchasers' costs (A)
Gross passing rents(2) (annualised) 14,894 13,663
Less irrecoverable property costs(2) (1,077) (1,586)
Net annualised rents (B) 13,817 12,077
Add notional rent on expiry of rent-free periods or other lease incentives(3) 530 342
'Topped-up' net annualised rents (C) 14,347 12,419
EPRA NIY (B/A) 3.9% 3.6%
EPRA 'topped-up' net initial yield (C/A) 4.1% 3.7%
(1 ) Estimated purchasers' costs estimated at 6.7% (31 December 2023:
6.6%).
(2) Gross passing rents and irrecoverable property costs assessed as at the
balance sheet date for completed investment properties excluding development
property and land.
(3) Adjustment for unexpired lease incentives, such as rent-free periods,
discounted rent periods and step rents. The adjustment includes the annualised
cash rent that will apply at the expiry of the lease incentive. Rent-frees
expire over a weighted average period of 4 months (31 December 2023: 7
months).
EPRA NIY represents annualised rental income based on the cash rents passing
at the balance sheet date, less non‑recoverable property operating expenses,
divided by the market value of the property, increased with (estimated)
purchasers' costs. It is a comparable measure for portfolio valuations
designed to make it easier for investors to judge themselves how the valuation
of portfolio X compares with portfolio Y.
EPRA 'topped-up' NIY incorporates an adjustment to the EPRA NIY in respect of
the expiration of rent-free periods (or other unexpired lease incentives, such
as discounted rent periods and step rents).
NIY, as stated in the Investment Adviser's report, calculates net initial
yield on topped-up annualised rents, but does not deduct non-recoverable
property costs.
Table 5: EPRA vacancy rate
31 December 31 December
2024 2023
£'000 £'000
Annualised ERV of vacant premises (D) 3,488 4,113
Annualised ERV for the investment portfolio (E) 22,383 19,556
EPRA vacancy rate (D/E) 15.6% 21.0%
EPRA vacancy rate represents ERV of vacant space divided by ERV of the
completed investment portfolio, excluding development property and land. It is
a pure measure of investment property space that is vacant, based on ERV.
Table 6: Total cost ratio/EPRA cost ratio
Notes Year to Year to
31 December 31 December
2024 2023
£'000 £'000
Property operating expenses (excluding service charge expenses) 4 1,266 536
Service charge expenses 4 4,618 5,581
Add back: service charge income 3 (3,953) (4,461)
Add back: insurance recharged 3 (164) (143)
Net property operating expenses 1,767 1,513
Administration expenses 4 4,838 5,249
Deduct: costs associated with move to Main Market 4 - 12
Total cost including direct vacancy cost (F) 6,605 6,774
Direct vacancy cost 3,4 (1,077) (1,587)
Total cost excluding direct vacancy cost (G) 5,528 5,187
Rental income(1) 3 16,191 15,338
Gross rental income (H) 3 16,191 15,338
Less direct vacancy cost (1,077) (1,587)
Net rental income 15,114 13,751
Total cost ratio including direct vacancy cost (F/H) 40.8% 44.2%
Total cost ratio excluding direct vacancy cost (G/H) 34.1% 33.8%
(1) Includes rental income, rental income straight-line adjustment and other
income as per note 3.
Notes Year to Year to
31 December 31 December
2024 2023
£'000 £'000
Total cost including direct vacancy cost (F) 6,605 6,774
Add back: costs associated with move to Main Market 4 - (12)
EPRA total cost (I) 6,605 6,762
Direct vacancy cost (1,077) (1,587)
EPRA total cost excluding direct vacancy cost (J) 5,528 5,175
EPRA cost ratio including direct vacancy cost (I/H) 40.8% 44.1%
EPRA cost ratio excluding direct vacancy cost (J/H) 34.1% 33.7%
EPRA cost ratios represent administrative and operating costs (including and
excluding costs of direct vacancy) divided by gross rental income. They are a
key measure to enable meaningful measurement of the changes in the Group's
operating costs.
It is the Group's policy not to capitalise overheads or operating expenses and
no such costs were capitalised in the year ended 31 December 2024 or the year
ended 31 December 2023.
Table 7: Lease data
As at 31 December 2024 Year 1 Year 2 Years 3-5 Year 5+ Total
£'000 £'000 £'000 £'000 £'000
Passing rent of leases expiring in: 825 4,722 2,277 7,070 14,894
ERV of leases expiring in: 896 6,191 2,571 9,237 18,895
Passing rent subject to review in: 2,596 8,115 4,183 - 14,894
ERV subject to review in: 2,843 10,750 5,302 - 18,895
As at 31 December 2023 Year 1 Year 2 Years 3-5 Year 5+ Total
£'000 £'000 £'000 £'000 £'000
Passing rent of leases expiring in: 139 857 6,999 5,668 13,663
ERV of leases expiring in: 139 933 7,811 6,559 15,442
Passing rent subject to review in: 139 2,628 10,896 - 13,663
ERV subject to review in: 139 2,773 12,408 122 15,442
WAULT to expiry is 5.3 years (31 December 2023: 5.8 years) and to break is 3.1
years (31 December 2023: 3.8 years).
Table 8: Capital expenditure
Notes Year to Year to
31 December 31 December
2024 2023
£'000 £'000
Acquisitions(1) 13 (218) (780)
Development spend(2) 13 13,048 20,373
Movement in rent incentives and amortisation 13 (113) 167
Completed investment properties:(3)
No incremental lettable space - like-for-like portfolio 13 5,493 2,410
No incremental lettable space - other - -
Total capital expenditure 18,210 22,170
Conversion from accruals to cash basis 2,197 211
Total capital expenditure on a cash basis 20,407 22,381
(1) During 2024 and 2023 there were no acquisitions of new assets, the
balances reflected relate to the finalisation of prior year balances.
(2) Expenditure on development property and land.
(3) Expenditure on completed investment properties.
Table 9: Like-for-like net rental income(1)
Notes Year to Year to % Change
31 December 31 December
2024 2023
£'000 £'000
Like-for-like net rental income 12,669 13,168 (3.8)%
Development lettings 1,755 290
Properties disposed in current and prior year - 367
Properties acquired in current and prior year - -
Net rental income 3,4 14,424 13,825 ( )
(1) This table has been updated to reflect net rental income, taking into
account property operating expenses, which is more representative of the
investment portfolio's performance.
Table 10: Loan to value ("LTV") and EPRA LTV
Gross debt less cash, short-term deposits and liquid investments, divided by
the aggregate value of properties and investments. The Group has also opted to
present the EPRA LTV, which is defined as net borrowings divided by total
property market value.
Notes 31 December 31 December
2024 2023
£'000 £'000
Interest-bearing loans and borrowings(1) 17 122,726 108,726
Cash 15 (5,567) (14,341)
Net borrowings (A) 117,159 94,385
Investment property at fair value (B) 13 385,220 382,300
LTV (A/B) 30.4% 24.7%
EPRA LTV
Notes 31 December 31 December
2024 2023
£'000 £'000
Interest-bearing loans and borrowings(1) 17 122,726 108,726
Net payables(2) 8,159 8,976
Cash 15 (5,567) (14,341)
Net borrowings (A) 125,318 103,361
Investment properties at fair value 13 385,220 382,300
Total property value (B) 385,220 382,300
EPRA LTV (A/B) 32.5% 27.0%
(1) Excludes unamortised loan arrangement fees asset of £0.5 million (31
December 2023: £0.8 million) (see note 17).
(2) Net payables includes trade and other receivables, other payables and
accrued expenses. See notes 14 and 18 for a full breakdown.
Table 11: Total accounting return
The movement in EPRA NTA over a period plus dividends paid in the period,
expressed as a percentage of the EPRA NTA at the start of the period.
Notes Year ended Year ended
31 December 31 December
2024 2023
Pence Pence
per share per share
Opening EPRA NTA (A) 21 79.9 90.0
Movement (B) (5.5) (10.1)
Closing EPRA NTA 21 74.4 79.9
Dividend per share (C) 11 2.0 4.0
Total accounting return (B+C)/A (4.4)% (6.8)%
Table 12: Interest cover
Adjusted operating profit before gains on investment properties, interest and
tax, divided by the underlying net interest expense.
Notes Year to Year to
31 December 31 December
2024 2023
£'000 £'000
Adjusted operating profit before gains on investment properties (A)(1) 9,586 8,564
Finance expenses 8 10,390 11,070
Add back: capitalised finance costs 8 2,086 3,261
Less: exceptional finance costs 8 - (1,467)
Less: finance income 7 (4,203) (3,807)
Add back: change in fair value of interest rate derivatives and deferred 7,8 (2,454) (3,784)
consideration
Loan interest (B) 5,819 5,273
Interest cover (A/B) 164.7% 162.4%
(1) Prior year adjusted for move to Main Market costs £(12,000).
Table 13: Ongoing charges ratio
Ongoing charges ratio represents the costs of running the REIT as a percentage
of NAV as prescribed by the Association of Investment Companies.
Notes Year to Year to
31 December 31 December
2024 2023
£'000 £'000
Administration expenses 4 4,838 5,249
Less: cost associated with moving to Main Market 4 - 12
Annualised ongoing charges (A) 4,838 5,261
Opening NAV as at start of year 283,745 319,451
NAV as at 30 June 267,230 314,270
Closing NAV as at 31 December 262,768 283,745
Average undiluted NAV during the year (B) 271,248 305,822
Ongoing charges ratio (A/B) 1.8% 1.7%
Property portfolio as at 31 December 2024
Property Town Postcode Area (sq ft)
Oxford Technology Park(1) Oxford OX5 1GN 508,400
Cambourne Park, Science & Technology Campus Cambridge CB23 6DW 230,400
7-11 Herbrand Street London WC1N 1EX 68,600
Rolling Stock Yard London N7 9AS 53,900
The Merrifield Centre Cambridge CB1 3LQ 12,600
(1) Full build-out area. Area practically complete, as at 31 December 2024,
was 237,900 (31 December 2023: 173,400 sq ft).
Shareholder information
The Company was incorporated on 27 July 2021. This Annual Report and Financial
Statements covers the period from 1 January 2024 to 31 December 2024.
The Company's ordinary shares were admitted to trading on AIM on 19 November
2021 following IPO, and the Group's operations, therefore, commenced on this
date. Following the Company's migration to the Premium Listing Segment of the
Main Market of the London Stock Exchange ("LSE"), its shares were cancelled
from AIM on 1 December 2022 and admitted to trading on the Main Market of the
LSE.
Capital structure
The Company's share capital consists of ordinary shares of £0.01 each. At
shareholder meetings, members present in person, or by proxy, have one vote on
a show of hands and, on a poll, have one vote for each ordinary share held.
Shareholders are entitled to receive such dividends as the Directors resolve
to pay out of the assets attributable to ordinary shares. Holders of ordinary
shares are entitled to participate in the assets of the Company attributable
to the ordinary shares in a winding up of the Company. The ordinary shares are
not redeemable. As at the date of this report, there were 350,000,000 ordinary
shares in issue, none of which are held in treasury.
Investment objective
The Company's investment objective is to provide shareholders with an
attractive level of total return. The focus will be capital growth, whilst
also providing a growing level of income by investing primarily in a
diversified portfolio of UK properties that are leased, or intended to be
leased, to occupiers operating in the life science sector.
Investment policy
The Company seeks to achieve its investment objective by investing in a
diversified portfolio of properties across the UK, which are typically leased,
or intended to be leased, to occupiers operating in, or providing a benefit
to, the life science sector ("life science properties"). Life science is the
branch of sciences concerned with all processes affecting living organisms.
This encompasses servicing and the study of the breadth of life systems, and
the structure and behaviour of living things.
Companies operating in the life science sector include, but are not limited
to, those involved in the innovation, development and/or production of assets
directly, or indirectly, for human health purposes. These assets include
compounds, products and devices derived and designed for application in
numerous fields.
The Company does not limit itself in relation to the types of properties it
acquires or develops, but examples may include wet and dry laboratories,
offices, incubators and co‑working space, manufacturing and testing
facilities, and data centres. The Company retains flexibility to acquire
individual buildings, a group of buildings across a single science park or the
entirety of a science park.
This may include purchasing or developing buildings that are leased, or
intended to be leased, to occupiers providing ancillary services to employees
of companies operating in, or providing a benefit to, the life science sector.
The Company typically invests in income-producing assets. The Company focuses
on investing where it believes that the underlying property is consistent with
the overarching objective of providing shareholders with capital growth,
whilst also providing a growing level of income. Investment decisions are
based on analysis and due diligence, including, but not limited to, location,
occupier profile and demand, rental growth prospects, lease terms and/or asset
management/enhancement opportunities.
The Company may acquire properties either directly or through corporate
structures (whether onshore or offshore) and also through joint venture or
other shared ownership or co-investment arrangements. In circumstances where
the Company does not hold a controlling interest in the relevant investment,
the Company will seek, through contractual and other arrangements to, inter
alia, ensure that each investment is operated and managed in a manner that is
consistent with the Company's investment policy.
Any asset management or development opportunities that the Company pursues are
conducted in such a way as to minimise any development risk, typically through
the use of forward funding or similar arrangements. Asset management
opportunities may include, but are not limited to, refurbishing or extending
existing assets, or where the Company may seek to maximise or change
alternative use values of existing operational assets. The Company may, from
time to time, invest in development opportunities without a forward-funding
arrangement, including pre‑developed land or land where planning permission
may be required, subject to a restriction that maximum exposure to these
developments will not exceed 15% of gross asset value.
It is anticipated that properties will be held for the long term. However, the
Company may undertake opportunistic disposals of properties considered to be
in the best interests of shareholders.
The Company invests in, and actively manages, its assets with the objective of
reducing and diversifying risk and, in doing so, maintains the following
investment restrictions:
• No individual building will represent more than 35% of gross asset
value, reducing to 25% of gross asset value by 31 December 2023.
• The Company targets a portfolio with no one occupier accounting for
more than 20% (but subject to a maximum of 30%) of the higher of either (i)
gross contracted rents or (ii) the valuer's ERV of the Company's portfolio
including developments under forward-funding agreements, as calculated at the
time of investing or leasing.
• The aggregate maximum exposure to assets under development,
including forward fundings, will not exceed 50% of gross asset value, reducing
to 30% of gross asset value by 31 December 2023. Within this limit, the
maximum exposure to developments, as measured by the expected gross
development cost, which are not under forward‑funded arrangements, will not
exceed 15% of gross asset value at the commencement of the relevant
development.
• No more than 10% of gross asset value will be invested in properties
that are not life science properties.
In addition, the Company will not invest more than 10% of gross asset value in
other alternative investment funds or closed-ended investment companies.
Compliance with the above restrictions is calculated immediately following
investment and non-compliance resulting from changes in the price or value of
assets following investment is not considered as a breach of the investment
restriction.
The Company defines: (i) "gross asset value" as "the value of the assets of
the Company and its subsidiaries from time to time, determined in accordance
with the accounting policies adopted by the Company"; (ii) "gross contracted
rents" as "the total rent receivable on a property plus rent contracted from
expiry of rent-free periods and uplifts agreed under the leases contracted on
the Company's portfolio of properties"; and (iii) "ERV" as "the estimated
annual open market rental value of lettable space".
Gearing
The level of gearing will be on a prudent basis for the asset class, and will
seek to achieve a low cost of funds, whilst maintaining flexibility in the
underlying security requirements and the structure of the Company. It is
envisaged that an LTV ratio of between 30% and 40% would be the optimal
capital structure for the Company over the longer term. However, in order to
finance value‑enhancing opportunities, the Company may temporarily incur
additional gearing, subject to a maximum LTV ratio of 55%, at the time of an
arrangement.
Debt is secured at asset level and, potentially, at Company or special purpose
vehicle level, depending on the optimal structure for the Company and having
consideration to key metrics, including lender diversity, debt type and
maturity profiles.
Use of derivatives
The Company may utilise derivatives for efficient portfolio management only.
In particular, the Company may engage in full or partial interest rate hedging
or otherwise seek to mitigate the risk of interest rate increases on
borrowings incurred in accordance with the gearing limits as part of the
Company's portfolio management.
Cash management policy
The Company may hold cash on deposit and may invest in cash equivalent
investments, which may include short-term investments in money market type
funds ("cash and cash equivalents").
There is no restriction on the amount of cash and cash equivalents that the
Company may hold and there may be times when it is appropriate for the Company
to have a significant cash and cash equivalents position.
REIT status
The Company intends to continue conducting its affairs so as to enable it to
remain qualified as the principal company of a REIT group for the purpose of
Part 12 of the Corporation Tax Act 2010 (and the regulations made thereunder).
Changes to, and breach of, the investment policy
Any material change to the Company's investment policy set out above will
require the prior approval of shareholders by way of an ordinary resolution at
a general meeting.
In the event of a breach of the investment guidelines and the investment
restrictions set out above, the AIFM shall inform the Board upon becoming
aware of the same and if the Board considers the breach to be material,
notification will be made to a Regulatory Information Service.
Share dealing and share prices
Shares can be traded through your usual stockbroker. The Company's shares are
admitted to trading on the LSE.
Share register enquiries
The register for the ordinary shares is maintained by MUFG Corporate Markets
(UK) Limited. In the event of queries regarding your holding, please contact
the Registrar on 0371 664 0300. You can also email
infosharedeal@cm.mpms.mufg.com. Changes of address and mandate details can be
made over the telephone, but all other changes to the register must be
notified in writing to the Registrar: MUFG Corporate Markets (UK) Limited,
Central Square, 29 Wellington Street, Leeds LS1 4DL.
Electronic communications from the Company
Shareholders have the opportunity to be notified by email when the Company's
Annual Report, Half-yearly Report and other formal communications are
available on the Company's website, instead of receiving printed copies by
post. This has environmental benefits in the reduction of paper, printing,
energy and water usage, as well as reducing costs to the Company. If you have
not already elected to receive electronic communications from the Company and
wish to do so, please contact the Registrar using the details shown on the
inner back cover. Please have your investor code to hand.
Share capital and net asset value information
Ordinary 1p shares 350,000,000
SEDOL Number BP5X4Q2
ISIN GB00BP5X4Q29
Sources of further information
Copies of the Company's Annual and Half-yearly Reports are available from the
Company Secretary, who can be contacted at labs_cosec@cm.mpms.mufg.com and,
together with stock exchange announcements and further information on the
Company, are also available on the Company's website, lifesciencereit.co.uk.
Financial calendar
16 April 2025
Announcement of final results
3 June 2025
Annual General Meeting
30 June 2025
Half-year end
September 2025
Announcement of half-yearly results
31 December 2025
Year end
Glossary
Adjusted earnings per share ("Adjusted EPS")
EPRA EPS adjusted to exclude one-off costs, divided by the weighted average
number of shares in issue during the period
AGM
Annual General Meeting
AIC
The Association of Investment Companies
AIFM
Alternative Investment Fund Manager
AIM
A market operated by the London Stock Exchange
Association of Investment Companies
The Company is a member of the AIC
BREEAM
Building research establishment environmental assessment method
BREEAM Interim Excellent
Interim BREEAM certifications indicate the performance of the building at the
design stage of assessment
Carbon neutrality
Purchasing carbon reduction credits equivalent to emissions released without
the need for emission reductions to have taken place
Company
Life Science REIT plc
Contracted rent
Gross annual rental income currently receivable on a property plus rent
contracted from expiry of rent-free periods and uplifts agreed at the balance
sheet date less any ground rents payable under head leases
Development property and land
Whole or a material part of an estate identified as having potential for
development. Such assets are classified as development property and land until
development is completed and they have the potential to be fully income
generating
EPC
Energy performance certificate
EPRA
The European Public Real Estate Association, the industry body for European
REITs
EPRA cost ratio
The sum of property and administration expenses as a percentage of gross
rental income calculated both including and excluding direct vacancy cost
EPRA earnings
IFRS profit after tax excluding movements relating to changes in fair value of
investment properties, gains/losses on property disposals, changes in fair
value of financial instruments and the related tax effects
EPRA earnings per share ("EPRA EPS")
A measure of EPS on EPRA earnings designed to present underlying earnings from
core operating activities based on the weighted average number of shares in
issue during the period
EPRA guidelines
The EPRA Best Practices Recommendations Guidelines September 2024
EPRA NAV/EPRA NDV/EPRA NRV/EPRA NTA per share
The EPRA net asset value measures figures divided by the number of shares
outstanding at the balance sheet date
EPRA net disposal value ("EPRA NDV")
The net asset value measure detailing the full extent of liabilities and
resulting shareholder value if company assets are sold and/or if liabilities
are not held until maturity. Deferred tax and financial instruments are
calculated as to the full extent of their value or liability, net of any
resulting tax
EPRA net initial yield ("EPRA NIY")
The annualised passing rent generated by the portfolio, less estimated
non-recoverable property operating expenses, expressed as a percentage of the
portfolio valuation (adding notional purchasers' costs), excluding development
property and land
EPRA net reinstatement value ("EPRA NRV")
The net asset value measure to highlight the value of net assets on a
long-term basis and reflect what would be needed to recreate the Company
through the investment markets based on its current capital and financing
structure. Assets and liabilities that are not expected to crystallise in
normal circumstances, such as the fair value movements on financial
derivatives and deferred taxes on property valuation surpluses, are excluded.
Costs such as real estate transfer taxes are included
EPRA net tangible assets ("EPRA NTA")
An EPRA net asset value measure with adjustments made for the fair values of
certain financial derivatives and assumes entities buy and sell assets,
thereby crystallising certain levels of deferred tax liability
EPRA sBPR
European public real estate association sustainable best practice
recommendations
EPRA 'topped-up' net initial yield
The annualised passing rent generated by the portfolio, topped up for
contracted uplifts, less estimated non‑recoverable property operating
expenses, expressed as a percentage of the portfolio valuation (adding
notional purchasers' costs), excluding development property and land
EPRA vacancy rate
Total open market rental value of vacant units divided by total open market
rental value of the portfolio, excluding development property and land
EPS
Earnings per share
Equivalent yield
The weighted average rental income return expressed as a percentage of the
investment property valuation, plus purchasers' costs, excluding development
property and land
ERV
The estimated annual open market rental value of lettable space as assessed by
the external valuer
EU taxonomy
A classification system that aims to provide a clear definition of what should
be considered as 'sustainable' economic activity
FCA
Financial Conduct Authority
Fitwel
A real estate certification that measures a building against seven health
impact categories
FRI
A full repairing and insuring lease, known as a FRI lease, is a commercial
lease which gives the occupier sole responsibility for the maintenance,
repair, and insurance of the asset for the duration of their lease.
GAV
Gross asset value
Group
Life Science REIT plc and its subsidiaries
IASB
International Accounting Standards Board
IFRS
International Financial Reporting Standards
IFRS earnings per share ("EPS")
IFRS earnings after tax for the year divided by the weighted average number of
shares in issue during the period
IFRS NAV per share
IFRS net asset value divided by the number of shares outstanding at the
balance sheet date
Interest cover
Adjusted operating profit before gains on investment properties, interest and
tax divided by the underlying net interest expense
Investment property
Completed buildings, excluding development property and land, also referred to
as investment assets
Like-for-like rental income movement
The increase/decrease in contracted rent of properties owned throughout the
period under review, expressed as a percentage of the contracted rent at the
start of the period, excluding acquisitions, disposals, development property
and land
Like-for-like net rental income movement
The increase/decrease in net rental income of properties owned throughout the
period under review, expressed as a percentage of the net rental income at the
start of the period, excluding acquisitions, disposals, development property
and land
Like-for-like valuation movement
The increase/decrease in the valuation of properties owned throughout the
period under review, expressed as a percentage of the valuation at the start
of the period, net of capital expenditure
Loan to value ratio ("LTV")
Gross debt less cash, short-term deposits and liquid investments, divided by
the aggregate value of properties and investments
Main Market
The premium segment of the London Stock Exchange's Main Market
NAV
Net asset value
Net equivalent yield ("NEY")
The weighted average rental income return expressed as a percentage of the
investment property valuation, plus purchasers' costs, excluding development
property and land
Net initial yield ("NIY")
Contracted rent at the balance sheet date, expressed as a percentage of the
investment property valuation, plus purchasers' costs, excluding development
property and land
Net rental income
Gross annual rental income receivable after deduction of ground rents and
other net property outgoings, including void costs and net service charge
expenses
Net reversionary yield ("NRY")
The anticipated yield to which the net initial yield will rise (or fall) once
the rent reaches the ERV
Net zero carbon
The overall balance between emitting and absorbing carbon in the atmosphere
Occupancy
Total open market rental value of the units leased divided by total open
market rental value, excluding development property and land, equivalent to
one minus the EPRA vacancy rate
Ongoing charges ratio
Ongoing charges ratio represents the costs of running the Group as a
percentage of IFRS NAV as prescribed by the Association of Investment
Companies
Passing rent
Gross annual rental income currently receivable on a property as at the
balance sheet date less any ground rents payable under head leases
Property income distribution ("PID")
Profits distributed to shareholders that are subject to tax in the hands of
the shareholders as property income. PIDs are usually paid net of withholding
tax (except for certain types of tax-exempt shareholders). REITs also pay out
normal dividends called non-PIDs
RCF
Revolving credit facility
Real Estate Investment Trust ("REIT")
A listed property company that qualifies for, and has elected into, a tax
regime that is exempt from corporation tax on profits from property rental
income and UK capital gains on the sale of investment properties
Scope 1 and 2 emissions
GHGs released directly and indirectly from the Group e.g. company offices,
company vehicles and energy purchased by the Group
Scope 3 emissions
All other GHGs released indirectly by the Group, upstream and downstream of
the Group's business
SONIA
Sterling Overnight Index Average
Task Force on Climate-related Financial Disclosures ("TCFD")
An organisation established with the goal of developing a set of voluntary
climate-related financial risk disclosures to be adopted by companies to
inform investors and the public about the risks they face relating to climate
change
Total accounting return
The movement in EPRA NTA over a period plus dividends paid in the period,
expressed as a percentage of the EPRA NTA at the start of the period
Total cost ratio
EPRA cost ratio, excluding one-off costs calculated both including and
excluding vacant property costs
UK AIFM Regime
The Alternative Investment Fund Managers Regulations 2013 (as amended by The
Alternative Investment Fund
Managers (Amendment etc.) (EU Exit) Regulations 2019) and the Investment Funds
Sourcebook forming part of the FCA Handbook
Weighted average unexpired lease term ("WAULT")
Average unexpired lease term to first break or expiry weighted by contracted
rent across the portfolio, excluding development property and land
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