REG - LondonMetric - FULL YEAR RESULTS FOR THE YEAR ENDED 31 MARCH 2026
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RNS Number : 1740F LondonMetric Property PLC 21 May 2026
LONDONMETRIC PROPERTY PLC
("LondonMetric" or the "Group" or the "Company")
FULL YEAR RESULTS FOR THE YEAR ENDED 31 MARCH 2026
Delivering reliable and growing income from the UK's leading Triple Net Lease
REIT
LondonMetric today announces its full year results for the year ended 31 March
2026.
Income Statement FY 2026 FY 2025
Net rental income (£m) 455.3 390.6
EPRA earnings(1) (£m) 305.3 268.0
IFRS reported profit (£m) 295.7 347.9
EPRA earnings per share(1) (p) 13.5 13.1
IFRS earnings per share (p) 13.0 17.1
Dividend per share (p) 12.45 12.00
Balance Sheet FY 2026 FY 2025
EPRA net tangible assets(1) (NTA) (£m) 4,698.1 4,071.0
EPRA NTA per share(1) (p) 200.6 199.2
IFRS net asset value (£m) 4,732.9 4,123.9
IFRS net asset value per share (p) 202.7 202.4
1. Further details on alternative performance measures can be found
in the Financial Review and definitions can be found in the Glossary
2. Like for like growth in contracted rental income
Focus on best assets in winning sectors drives rents, earnings and eleventh
year of dividend progression
· Net rental income increased 16.6% to £455.3m, 9 months
contribution from Urban Logistics REIT ('ULR') takeover
· Sector leading EPRA cost ratio down a further 10bps to 7.7%
· EPRA earnings up 13.9% to £305.3m, +2.4% on a per share basis to
13.5p (+24% over two years)
· Dividend up 3.8% to 12.45p, 108% covered by earnings and including
Q4 dividend declared today of 3.3p.
Delivering reliable, repetitive and growing income
· Total property return of 7.1%, outperforming MSCI All Property UK
Index by 170bps
· Like for like income growth(2) of 4.2%, contributing to a valuation
uplift of £68m
· Valuation yields unchanged and ERV growth was 3.3%, EPRA topped up
NIY of 5.3% (equivalent yield of 6.4%)
· EPRA NTA per share up 0.7% to 200.6p
· IFRS reported profit of £295.7m
· Total accounting return of 6.9%
£7.6bn portfolio aligned to strongest thematics and mission critical assets
· Logistics weighting increased from 46% to 53%, urban logistics 38%
of the portfolio (2025: 29%)
· £1,549m acquired in year (80% logistics) primarily through the
takeover of ULR
· £318m disposed in year (54% former M&A assets) through 57
disposals
· Post year end: Acquired four convenience food pre-let developments
anchored by M&S for £40m and sold £49m of further assets
Activity enhancing portfolio quality and strength of income, capturing
reversion
· Rent reviews in year +19% on five yearly equivalent basis, with
urban logistics market reviews +38%
· Asset management added £17m pa of net contracted rent
· Contractual uplifts on 69% of rental income (2025: 77%), expect
£38m of rent uplift over next two years
· WAULT of 17 years, gross to net income ratio of 99% and occupancy
at 98%
· Top three occupiers represent 22% of rent, down from 27%
· 92% of portfolio EPC A-C rated (A-B: 60%) with 4MWp of solar PV
added
Scale is allowing us to benefit from greater debt optionality and has enhanced
our debt structure
· £2.7bn of new/ refinanced debt in year with £1.1bn repaid,
diversifying our lending pool and reducing finance costs
· Debt maturity of 4.4 years (5.2 years including extension options)
with no material refinancing until FY30
· Low cost of debt maintained at 4.0%, 99.8% hedged and LTV at 36.7%
Andrew Jones, Chief Executive of LondonMetric, commented:
"Our results today reflect the progress that we have made over the last few
years to create the UK's largest and most efficient NNN REIT. Despite macro
uncertainty, our relentless focus on income and ongoing rental growth, has
again delivered.
"Our investment activity through further M&A and direct transactions has
maintained our strategy of owning high quality assets in winning sectors. This
has helped to propel our rental income to a new record which has allowed us to
progress our dividend for the eleventh consecutive year and put us a step
closer to dividend aristocracy. We are grounded in the belief that income
compounding is one of the true wonders of investing - the essential ingredient
and rocket fuel of long term wealth creation.
"As owners of the business, our interests are fully aligned with our
investors and we remain focused on our mission to operate, execute and
allocate capital with discipline, experience and ruthless efficiency. We
believe this represents the right way to invest. In today's environment, scale
and efficiency are essential, and our relentless expansion has put us in a
strong position with every reason to be optimistic. After all market
uncertainty will undoubtedly throw up new opportunities."
For further information, please contact:
LondonMetric Property Plc:
+44
(0)20 7484 9000
Andrew Jones (Chief Executive)
Martin McGann (Chief Financial Officer)
Gareth Price (Investor Relations)
FTI Consulting:
+44 (0)20 3727 1000
Dido Laurimore
Londonmetric@fticonsulting.com (mailto:Londonmetric@fticonsulting.com)
Andrew Davis
Meeting and audio webcast
An analysts meeting will be held at 8.30 am today and a live audio webcast
will be available at the below link. An on demand recording will also be
available from the same link shortly after the meeting:
https://brrmedia.news/LMP_FY26 (https://brrmedia.news/LMP_FY26)
Notes to editors
LondonMetric Property Plc is the UK's leading triple net lease REIT with an
£8 billion portfolio aligned to structurally supported sectors of logistics,
healthcare, convenience, entertainment and leisure. It owns and manages
desirable real estate that meets occupiers' demands, delivers reliable,
repetitive and growing income-led returns and outperforms over the long term.
Further information is available at www.londonmetric.com
(http://www.londonmetric.com) .
Neither the content of LondonMetric's website nor any other website accessible
by hyperlinks from its website are incorporated in, or form part of this
announcement nor, unless previously published by means of a recognised
information service, should any such content be relied upon in reaching a
decision to acquire, continue to hold, or dispose of shares in LondonMetric.
This announcement may contain certain forward-looking statements with respect
to LondonMetric's expectations and plans, strategy, management objectives,
future developments and performance, costs, revenues and other trend
information. These statements and forecasts involve risk and uncertainty
because they relate to future events and circumstances. There are a number of
factors which could cause actual results or developments to differ materially
from those expressed or implied by these forward-looking statements and
forecasts. Certain statements have been made with reference to forecast price
changes, economic conditions and the current regulatory environment. Any
forward-looking statements made by or on behalf of LondonMetric speak only as
of the date they are made. LondonMetric does not undertake to update
forward-looking statements to reflect any changes in LondonMetric's
expectations with regard thereto or any changes in events, conditions or
circumstances on which any such statement is based. Nothing in this
announcement should be construed as a profit forecast. Past share price
performance cannot be relied on as a guide to future performance.
Alternative performance measures: The Group financial statements are prepared
in accordance with IFRS where the Group's interests in joint ventures and
non-controlling interests are shown as single line items on the income
statement and balance sheet. Management reviews the performance of the
business principally on a proportionately consolidated basis, which includes
the Group's share of joint ventures and excludes non-controlling interests on
a line by line basis. Alternative performance measures are financial measures
which are not specified under IFRS but are used by management as they
highlight the underlying performance of the Group's property rental business
and are based on the EPRA Best Practice Recommendations (BPR) reporting
framework which is widely recognised and used by public real estate
companies.
Chair's statement
It has been another very busy year for LondonMetric with £1.2 billion of
assets added from M&A activity, 92 investment transactions, 327 occupier
initiatives and £3.8 billion of debt activity.
This activity has continued to consolidate our position as the UK's leading
Triple Net ('NNN') Lease REIT by further aligning the portfolio to mission
critical and structurally supported real estate. We have maintained our sector
leading income metrics, once again increased our rental income, improved the
portfolio's growth prospects and extracted efficiencies from our scalable
platform.
Our results for the year built on the strong performance delivered in the
previous year, during which EPRA earnings per share ('EPRA EPS') and dividend
per share increased by 21% and 18% respectively. In the year to 31 March 2026,
net rental income was up 16.6% to £455.3 million, whilst our EPRA EPS
increased by 2.4% to 13.5p, a 246% increase from 3.9p at the time of our
formation in 2013 (a 10% compounded annual growth rate). This has allowed us
to increase our dividend per share for the eleventh year running, up 3.8% to
12.45p and 108% covered by EPRA EPS. We expect dividend growth to continue and
are guiding to a 3.3% increase in our first quarterly dividend for FY27 to
3.15p.
Our strong income performance helped deliver another year of attractive
returns, with a total property return of 7.1% (a 170bps outperformance of MSCI
All UK Property) and a total accounting return of 6.9% (7.7% excluding M&A
related and exceptional costs).
We have proactively strengthened and diversified our debt over the year by
refinancing £1.5 billion of debt facilities, raising new debt of £1.2
billion and repaying £1.1 billion. This activity included a £500 million
debut senior unsecured bond issue, which extended debt maturity at attractive
rates and broadened access to the public debt markets. We remain in a very
strong financing position with a blended cost of debt of 4.0%, average debt
maturity of 4.4 years, an LTV of 36.7% and £0.5 billion of undrawn
facilities.
Our exceptional team is working tirelessly to build an even stronger business
that can continue to deliver earnings and dividend growth over the long term.
Our enlarged scale and highly efficient business model will continue to offer
up a wide variety of further opportunities for growth.
On behalf of the Board and on his retirement from LondonMetric may I offer my
sincere thanks to Valentine Beresford for all he has contributed to the
business over the years. Whilst our overlap has been a relatively short one,
it is clear that his impact has been significant, not least overseeing several
hundred million pounds of successful transactions during recent challenging
market conditions. Crucially, he leaves the business with a strong team to
continue to build momentum.
Finally, having seen first hand the enormous commitment that has been made, I
would like to thank all of our team and the Board for their hard work and
dedication over the past year. I remain genuinely excited by the prospects for
the Company.
Chief Executive Q&A
Q
How would you describe LondonMetric and what is distinctive about its NNN lease model?
A
LondonMetric is a high conviction Triple Net Lease REIT focused on generating
secure, growing income from mission critical real estate. Our business is
simple and highly efficient, designed to convert rental income into
sustainable earnings and deliver a well covered, progressive dividend to
shareholders.
Our NNN lease structure ensures the occupier bears the vast majority of
property operating costs, allowing 99% of rent collected to flow through to
earnings. This delivers exceptionally strong margins and limits volatility.
Importantly, we are not just collecting rent - we compound income over the
long term by avoiding vacancy risk, occupier fragility and speculative
development.
We have fully embraced the attractiveness of the NNN model, and this
combination of income continuity and growth is the foundation of our strategy.
Q
What is LondonMetric's investment strategy?
A
We invest in mission critical real estate within sectors supported by long
term structural trends, with one primary financial objective: to deliver
reliable income with guaranteed future income growth.
Our portfolio is aligned to macro trends of digitalisation, convenience and
experiences through our main focus on logistics, convenience retail,
entertainment and hospitality. We acquire high quality assets at reasonable
prices, partner with strong occupiers with high occupier contentment, and
apply conservative leverage to amplify returns.
Our assets are held for the long term to drive compounding returns. In short,
LondonMetric is where income compounds.
Q
How has M&A supported the delivery of this strategy?
A
Our four recent M&A transactions have been an important enabler of
earnings growth and operational efficiency through economies of scale, and
scale has delivered a competitive advantage.
These public takeovers have increased our portfolio from £3.0 billion in 2023
to £7.6 billion today, materially strengthening exposure to our highest
conviction sectors. The takeover of Urban Logistics REIT Plc ('ULR') in June
2025 significantly increased our weighting to urban logistics - a sector we
regard as central to future income growth.
M&A has also enhanced our income granularity, diversification and
reversionary potential. Less than a year into our ownership of ULR, we are
already unlocking material rental growth through our occupier relationships
and best in class team.
Q
How are you managing the portfolio in a difficult real estate market?
A
We manage the portfolio with a clear focus on resilience and relevance. By
concentrating on structurally supported sectors and mission critical assets,
we avoid assets where income growth is uncertain or capital expenditure risk
is rising.
We look to avoid the losers by actively disposing of weaker assets and sectors
where we lack occupier leverage or long term tailwinds. During the year, we
sold £318 million of properties, including £173 million previously inherited
through recent M&A.
Our philosophy is straightforward: run the winners and sell the losers. This
disciplined approach underpins our all weather portfolio and reinforces our
long term income compounding strategy.
Q
How does market uncertainty create opportunities and why is scale a competitive advantage?
A
Periods of uncertainty favour well capitalised, disciplined investors. We
remain thoughtful, deliberate and disciplined when it comes to capital
allocation, and our size, patience and diversification make us a safe
proposition.
Whilst scale can make life a little harder for our activity to move the
needle, it does broaden our access to opportunities and improve execution
certainty. Today, we are seeing exciting opportunities emerge from pension
fund rebalancing, constrained development finance and occupiers seeking sale
and leaseback solutions to release capital back into their businesses.
Scale also delivers meaningful cost efficiency, as evidenced by our recent
refinancings and sector leading EPRA cost ratio of 7.7%. Our operating
leverage is clear: in the year, our dividend payments were nine times total
overheads.
Scale, efficiency, liquidity and hard work position LondonMetric to continue
creating long term value.
Chief Executive's review
We appreciate the benefit of long term income compounding
We continue to believe - now more than ever - that income and income growth
are the defining characteristics of long term returns.
The true power of investment lies in the compounding of income, with a
relentless focus on the quantity, quality and timing of cash returned to
shareholders. Compounding is often misunderstood and rarely appreciated, yet
it is one of the most powerful forces in investing.
Our approach to compounding is simple. It is not flashy, and it is frequently
overlooked, but we apply it with conviction. It is a 'slow cook' strategy that
rewards patience and consistency - an approach suited to those prepared to get
rich slowly. In the early years it can appear unexciting, which is why many
abandon it in favour of short term or speculative strategies. Over time,
however, growth builds upon growth, and the outcomes become increasingly
compelling.
Informed by the success of NNN REITs in the US, we have fully embraced the
REIT structure, recognising its exceptional strengths. In the UK, this is
reinforced by the full repairing and insuring ('FRI') lease structure, under
which tenants are responsible for repairs, maintenance and insurance - in many
respects mirroring the NNN model.
However, we think about NNN differently. For us, NNN means:
· No income leakage from repairs, maintenance, operating costs, insurance
or taxes;
· No vacancy risk, instead long WAULTs secured against strong occupiers;
and
· No deployment of capital into direct developments that promise future
returns while quietly absorbing years of opportunity cost from uncertainty
over planning, letting and/or project delivery. For us, that is not investing
- it is gambling, where hope substitutes for rationality.
We believe that reliable, predictable and growing income from the strongest
property sectors remains one of the most under recognised attractions of real
estate investing - and a critical driver of sustained compounding. For us, the
principle is as simple as ABC: always be compounding.
Our portfolio income metrics are sector leading and we are highly efficient
Our portfolio's income metrics are best in class. Our annual net contracted
rent of £432 million benefits from a long WAULT of 17 years, high occupancy
of 98% and an exceptional gross to net income ratio of 99%. With 69% of income
subject to contractual rental uplifts and strong reversionary potential across
our logistics assets, the portfolio offers high visibility and certainty of
income growth. This is evidenced by its like for like income growth of 4.2%
over the year and an equivalent yield of 6.4%, some 110bps higher than the
topped up NIY.
We remain laser focused on cost control with our sector leading EPRA cost
ratio - an area that continues to be underestimated across the listed REIT
sector, as reflected in the elevated cost ratios still borne by many peers.
Tight management of property costs and overheads, using AI to further improve
our NNN efficiencies, delivers the operating margins required to compound long
term earnings and drive dividend growth. Our scale has also allowed us to
benefit from improved financial costs as demonstrated in the year by the
attractive 4.7% all-in rate on our bond issue and the 49bps margin saving on
our refinancing activity. Cost discipline and reduced debt costs serve the
bottom line just as effectively as rental growth serves the top line.
We believe that NNN income compounding represents the most effective way to
invest: low cost, high quality income, delivered reliably and efficiently,
without the distractions of excessive activity, large organisations or binary
risk taking. In that context, we remain equally focused on avoiding the other
ABC: arrogance, bureaucracy and complacency.
Our strategy is to own quality assets in winning sectors
Our investment thesis is rooted in allocating capital where it is best treated
- sectors supported by enduring structural trends rather than short term
cycles. This requires constant awareness, intellectual honesty and a
willingness to pivot when facts change. As a high conviction NNN investor, we
distinguish between what is structural from what is cyclical when deploying
capital.
Our thematic approach has aligned the portfolio with powerful macro trends,
including digitalisation, the increasing value of time, and the growing
importance of experiences. As a result, we have concentrated our investments
in the winning sectors of logistics, convenience retail, entertainment and
hospitality.
Within these sectors, we prioritise mission critical assets which are relevant
in an increasingly AI driven world, and where occupiers stay longer, invest
more and pay higher rents. With 64% of the portfolio in London, the South East
and the Midlands, our assets benefit from strong underlying land values,
persistent demand and constrained supply. When the wind is at your back, you
are more likely to be a price setter than a price taker.
We seek to acquire quality assets, apply conservative leverage and hold them
for extended periods to generate sustainable returns. Time is the ally of a
great portfolio. We describe this discipline as the three Cs: collect income,
allow it to compound, and watch yields on cost compress.
Our focus on compounding - rather than simply growing assets under management
- ensures discipline: spending is easy whilst investing is difficult. Buying
low quality assets cheaply is not our strategy; such assets often over
distribute, dilute equity value and introduce unnecessary risk and complexity.
Accordingly, we will exit weaker investments with shorter leases and capital
expenditure requirements that are likely to grow faster than rental income. We
would rather pay a fair price for a wonderful asset than a wonderful price for
a fair one.
This philosophy explains why we have avoided office investments. Offices fail
our NNN test: they suffer from accelerating obsolescence, technological
disruption, changing occupier preferences, rising sustainability costs and
shortening leases. It is difficult to maintain a long term relationship with
offices - their appeal fades, they require continual capital to remain
relevant, demand weakens as newer alternatives emerge and values can erode
quickly.
Our compounding model simply requires discipline and the avoidance of unforced
errors. In short, we succeed by staying the course and following the money -
mindful always that it is management's capital alongside shareholders'.
The economic outlook remains highly uncertain and macro uncertainty is impacting liquidity for UK real estate
The global economic outlook remains highly uncertain, with elevated
geopolitical risk continuing to influence markets. The escalation of conflict
in the Middle East has renewed volatility in energy markets and reintroduced
inflationary pressures, pushing bond yields and swap rates materially higher
once again.
In the UK, the outlook remains uncertain. Weak economic growth, political
uncertainty, a softening labour market and declining consumer confidence all
point to interest rates remaining higher for longer. That said, we continue to
believe the consumer is in reasonably good shape: employment remains high,
wage growth continues to outpace inflation and household balance sheets are
relatively robust.
This latest macro uncertainty is prolonging the sharp reduction in liquidity
already seen across the property investment market. The impact has been most
pronounced for larger lot sizes above £20 million, where the buyer universe
has narrowed significantly, with limited engagement from long only UK
institutions and US private equity investors.
New acquisition opportunities arise daily from pension fund reallocations,
balance sheet management and strategic repositioning. We dismiss most of these
at first sight as they fail to meet our strict investment criteria. After all,
whilst many people are rewarded for activity, our approach can deliver
attractive returns generated through inactivity.
Our activity has focused on further M&A, non core disposals and reinvestment
Our M&A activity added £1.2 billion of quality assets through the
acquisitions of ULR and Highcroft Investments plc ('Highcroft'). We
successfully acquired businesses that were no longer well suited to the listed
market and out of favour with investors, who are increasingly focused on
scale, relevance and liquidity.
Whilst we continue to assess further M&A opportunities, these have become
fewer. In conjunction with Schroder Real Estate Investment Trust Limited
('SREIT'), we continue to progress our recently proposed offer for Picton
Property Income Limited. Alongside M&A, we have acquired strategic
positions in two listed property companies through our 11% holding in SREIT
and 15% holding in Value and Indexed Property Income Trust PLC.
Limited competition in the direct market allowed us to progress £333 million
of other investment opportunities in the year including sale and leasebacks,
development fundings and acquisitions arising from fund expiries and pension
fund liquidations. These acquisitions were largely funded through £318
million of non core and mature asset disposals, primarily former ULR and LXi
assets at prices in line with our underwritten values. Despite constrained
market liquidity, our low average disposal lot size of £6 million has been a
clear advantage and allowed us to transact efficiently by accessing a broader
and deeper pool of buyers, including private investors, family offices, local
authority pension funds and owner occupiers.
Our investment activity has increased our logistics exposure, focusing on urban logistics
The logistics sector remains attractive, underpinned by strong structural
tailwinds including continued growth in online sales, ongoing investment in
more efficient and resilient supply chains and increased warehouse automation.
We continue to believe that urban logistics is the most compelling sub-sector,
offering the strongest demand/supply imbalance and the greatest potential for
income growth. New supply remains constrained by elevated development costs
and the ongoing loss of urban warehousing to higher value alternative land
uses. At the same time, occupier demand remains granular and resilient, driven
by businesses seeking to operate closer to customers, reduce delivery times,
improve fulfilment accuracy and to meet consumer expectations for speed and
convenience. These dynamics continue to support robust rental growth in urban
locations.
The acquisition of ULR materially accelerated our ambition to grow further
exposure to urban logistics, adding £1.1 billion of warehousing. Together
with other acquisitions, including those completed through the Highcroft
takeover, logistics exposure increased from 46% to 53% of the portfolio over
the year.
Take up of UK logistics warehousing increased during 2025 and this higher
level of leasing activity continued into the first quarter of 2026. However,
elevated levels of activity have not materially reduced vacancy, which remains
at c.6-7% nationally. Vacancy remains pronounced in the mid box segment
(100,000-400,000 sq ft), where speculative development has added to supply. By
contrast, our vacancy in this size bracket remains significantly lower at
c.3%, largely relating to former ULR warehouses.
During the year, we disposed of £137 million of logistics assets, focusing on
poorer geographies and on lower quality buildings with weaker rental growth
prospects, higher vacancy risk and increasing capital expenditure
requirements. £55 million of disposals related to former ULR assets, and we
also took the opportunity to reduce multi-let exposure, reflecting strong
investor demand for this product.
Over the year, the logistics portfolio delivered a strong total property
return of 7.0% and recorded ERV growth of 2.6%, with urban logistics again
delivering strong open market rent review settlements at 38% ahead of previous
levels. The logistics portfolio remains highly reversionary, providing clear
visibility of future income growth. With construction costs up nearly 40%
since Covid, rents will need to rise materially to make new development
viable, reinforcing the attractive outlook for well located assets.
Our long income assets are benefitting from structural tailwinds
Our long income portfolio represents 46% of total assets and is aligned with
structurally supported sectors of convenience retail, entertainment and
leisure, and healthcare. These sectors benefit from long term shifts in
consumer behaviour and demographics, as spending increasingly pivots towards
convenience, experiences and improved healthcare provision. Supportive
demand/supply dynamics, together with high replacement metrics, ensure these
assets are mission critical locations for our occupiers.
The portfolio is let to strong operators and benefits from inflation
protection and compelling income compounding characteristics. It delivered a
total property return of 7.2% over the year, with occupancy of 99%, a long
dated WAULT of 23 years, a topped up net initial yield of 5.6% and an
equivalent yield of 6.7%.
Across long income markets, investor demand for high quality assets has
remained strong. While we were outbid on several opportunities, we
successfully added £306 million of high quality long income investments in
the year, predominantly within the hotel sector. Acquisitions included 18
Premier Inn hotels - largely through sale and leaseback transactions with
Whitbread PLC - alongside a further 18 convenience investments. We have also
continued to sell non core and mature long income assets where pricing
exceeded our assessment of fair value. Total long income disposals amounted to
£146 million and comprised primarily former LXi assets, including larger food
stores, smaller hotels, car parks, pubs and care homes.
Convenience is a sector that is benefitting from consumers increasingly seeing
their time as a more valuable commodity. In the best locations, we are seeing
good rental growth for convenience assets that is comparable to rental growth
on urban logistics. The store network remains integral to retailers, and our
convenience assets are well located, stand-alone or cluster properties that
are fit for purpose, right sized and right rented. Our convenience assets are
let on long NNN leases to grocers, discounters, home and DIY operators with
resilient business models that are less exposed to the migration of shopping
online and offer omnichannel optionality in a convenient format. We have
consciously avoided experiential retail assets where rents are elevated,
credits can be weak and operational capex is high. Roadside has been an area
of focus for us, particularly drive-thrus, with customers requiring EV
charging. We own a substantial number of drive-thrus, let to occupiers such as
Costa, McDonald's and Starbucks.
Entertainment and leisure continues to benefit from the trend towards
experiences and growing preference for staycations. We have continued to
improve our hotel portfolio and, since the LXi takeover, we have sold 17
Travelodge hotels and reinvested in larger, better located and stronger
performing Premier Inn hotels. UK budget hotels are well placed, supported by
resilient demand and highly affordable price points. Cost conscious consumers
and businesses continue to drive demand, sustaining high occupancy rates. With
limited new supply, strong brands and efficient operating models, the sector
can offer reliable income with growth prospects. Our theme park investments
are proving to be non-cyclical performers as consumers prioritise experiences
over things and are showing an unwillingness to cut back on discretionary
spend in this area. Theme parks also have significant barriers to entry in the
UK with large investment required to maintain visitor appeal which adds to
their defensive characteristics.
Healthcare is underpinned by strong demand drivers from an ageing and growing
population as well as improvements in technology, and the real estate
investment market in healthcare has been particularly active over the last
year. UK private hospitals are well placed as a result of long NHS waiting
lists and increased demand from patients treated through private medical
insurance as well as self-pay as they seek better and faster care. Development
activity in the UK healthcare market remains constrained, primarily due to
elevated construction costs and planning restrictions.
Our activity is growing our income and improving asset quality
Our strong occupier relationships enable us to maintain continuous insight
into occupier contentment and future demand. During the year, 327 occupier
initiatives generated an additional £16.6 million of annualised rent,
delivering like for like income growth of 4.2%. Lettings and lease regears
were completed with an average WAULT of ten years, adding £5.7 million of
rent, while rent reviews contributed a further £10.9 million, representing a
19% rental uplift on a five yearly equivalent basis.
We have continued to work closely with our partners. In particular, we
recently completed three pre-let M&S store developments in Weymouth, Luton
and Largs and we expect to shortly complete the development of a 390,000 sq ft
M&S distribution facility in Avonmouth alongside another M&S food
store in Ludlow. We have a number of further M&S food stores under
development or planned.
Looking ahead, we are well positioned to benefit from income growth through
the capture of reversion across logistics and contracted uplifts within long
income. We expect an additional £38 million of rental uplift from the
portfolio over the next two years, supplemented by a further £11 million of
uplift potential from the letting of current vacancies. With our assumption
that the Company's finance costs can remain broadly stable over the next few
years, this rental growth is expected to translate directly into earnings.
Embedding sustainability remains a core focus. We see ourselves as responsible
stewards of under invested or lower quality assets, where capital investment
can materially improve buildings. Over the year, the proportion of assets
rated EPC A-B rose from 58% to 60%, while solar capacity rose from 8MWp to
12MWp, with a number of further PV schemes expected in the near term. We have
also updated our Net Zero pathway following significant changes to our
portfolio in the year.
We continue to diversify our income and align to strong operators
Our activity during the year has improved both the diversification and
granularity of our portfolio income, reducing the proportion of rent accounted
for by our three largest occupiers - Ramsay Health Care, Merlin Entertainments
and Travelodge - from 27% to 22%. Through investment and asset management, we
have meaningfully increased exposure to the next tier of high quality
occupiers. Tesco and Booker combined now represent 3.7% of rent (2025: 2.5%),
Premier Inn represents 3.3% (2025: 1.1%) and M&S represents 1.9% (2025:
0.9%).
Actively managing occupier concentration remains a core priority and we
continue to engage proactively to further reduce rental exposure to our
largest occupiers. Merlin remains a key occupier and, notwithstanding
headwinds experienced globally last year, it continues to invest heavily in
its UK estate, with major new attractions underway at Alton Towers and Thorpe
Park. We also take significant comfort from Merlin's distinctive ownership
structure and the strength of its shareholder base, comprising KIRKBI (the
LEGO family office and a 47.5% shareholder), CPPIB, Blackstone and the
Wellcome Trust - a group of long term, well capitalised investors that
provides strong alignment and financial backing.
We continue to benefit from our strong team and its relationships
We work closely with all stakeholders to deliver long term benefits for our
investors, occupiers, people, local communities, contractors, suppliers and
advisors. Strong occupier relationships are central to LondonMetric's success
and our March 2026 annual occupier survey again demonstrated high levels of
satisfaction. Occupiers rated us an average of 8.8 out of 10 for their
willingness to recommend LondonMetric as a landlord (2025: 8.7).
Employee engagement also remains consistently high. In our 2026 employee
survey, 94% of colleagues said they enjoy working for the Company (2025: 96%).
Strong economic alignment between our people and the Company's performance
underpins a genuine ownership culture and reinforces disciplined property and
financial decision making. With increased scale and activity, LondonMetric
continues to be an exciting and dynamic place to work, creating new
opportunities for development and progression. As a growing business, we
remain focused on investing in our people and planning thoughtfully for
succession.
Valentine Beresford's retirement at the end of the year marked a poignant
moment for the Company. However, the promotion of Will Evers to sole Head of
Investment was a natural and long planned transition. Alongside Will, Darren
Richards (Chief Investment Officer), Mark Stirling (Asset Director) and Andrew
Smith (Strategy Director) form an exceptionally experienced property
leadership team, supported by a deep and talented wider organisation.
Outlook
Our NNN income model is delivering strong income and above average rental
growth through a low cost, highly efficient platform. We believe this
represents the right way to invest. In today's environment, scale and
efficiency are essential, and our relentless expansion gives us every reason
to be optimistic. Our M&A activity has enhanced liquidity in our shares,
broadened our access to high quality investment opportunities and delivered
meaningful economies of scale. As the most active consolidator in the sector
over recent years, this discipline has helped propel the Company into the FTSE
100. While further opportunities may arise, we will not pursue growth for its
own sake; we will deploy equity only where it adds high quality and accretive
assets to our all weather portfolio.
Our position as one of the largest and most efficient REITs is no accident. It
reflects years of building the right portfolio, exercising financial prudence,
making difficult decisions when easier alternatives existed, and assembling a
high calibre team. As the world has changed, we have consistently pivoted,
informed by macroeconomic forces, evolving consumer behaviour and
demand/supply dynamics. Technological innovation continues to disrupt
behaviour, including our own. We therefore remain agile, adapting as real
estate demand patterns shift, and are careful to avoid legacy sectors. After
all, no matter the quality of insight or how hard the work, the macro forces
always outrun the micro.
To ensure the portfolio remains fit for the future - supported by best in
class occupier relationships - we will continue to refine its quality and
income. This includes selectively reducing exposure to certain sub-sectors,
ex-growth assets and individual credits. Logistics and convenience remain our
strongest convictions for income growth, while evolving consumer behaviour
continues to offer opportunities for rental progression across other
structurally supported sectors.
As owners of the business, our interests are fully aligned with those of our
shareholders. We remain focused on our mission: to operate, execute and
allocate capital with discipline and ruthless efficiency. We are on a clear
path towards dividend aristocracy, grounded in the belief that income
compounding is one of the true wonders of investing - the essential ingredient
and rocket fuel of long term wealth creation.
Property review
Our assets are structurally supported
Over the year we added £1.2 billion of assets through M&A and £0.3
billion of further acquisitions in the direct market, which increased the
portfolio value from £6.2 billion to £7.6 billion. The portfolio now totals
680 assets, which reflects an average value per asset of £11 million, across
36.6 million sq ft and let at an average rent of £11 per sq ft.
Our activity focused predominantly on urban logistics investments and
consequently our logistics weighting increased from 46% to 53% over the year,
with urban logistics now representing 38% of the portfolio (2025: 29%). Whilst
our long income assets (comprising convenience, entertainment & leisure
and healthcare sectors) grew in absolute size, their weighting fell from 52%
to 46%.
Portfolio weighting (by value)
Logistics 52.8%
Entertainment & leisure 20.2%
Convenience 13.8%
Healthcare (including education) 12.1%
Other (four offices and a life science asset) 1.1%
Our portfolio's income metrics remain very strong
The income security of the portfolio remains very strong with a WAULT of 16.9
years which is down from 18.5 years in 2025 due to the addition of shorter let
assets from the Urban Logistics REIT Plc ('ULR') takeover. The WAULT to first
break is 15.5 years and only 8% of income expires within the next three years.
Occupancy remains high at 98% and our gross to net income ratio of 99%
continues to reflect the portfolio's strong retention rate, very low property
costs and minimal operational requirements.
Net contracted rent increased significantly over the year from £340.4 million
to £432.1 million and, in line with our preference for greater market rental
growth exposure in urban logistics, the proportion of total rent linked to
open market rent reviews increased from 23% to 31%.
At 69%, we continue to have a high proportion of income with guaranteed
contractual reviews:
· 49% of rent is index linked: with 24% RPI linked, 13% CPI+ linked and 12%
CPI or CPIH linked; and
· 20% of rent is subject to fixed uplifts, with a weighted average uplift
of 2.6% per annum.
Index linked reviews have a range of collars and caps typically 1% and 4% over
a five year period such that:
· For RPI reviews, at 22% inflation over a five year period (4% per annum),
93% of inflation is captured; and
· For CPI reviews, at 16% inflation over a five year period (3% per annum),
99% of inflation is captured.
Annual reviews apply to 33% of our rent, which is down from 40% in 2025.
The portfolio delivered a strong TPR of 7.1%
The portfolio's EPRA topped up net initial yield is 5.3% (2025: 5.1%) and,
reflecting the embedded income growth in the portfolio, the equivalent yield
is 6.4% (2025: 6.3%). Like for like ERV growth for the year was 3.3% and the
portfolio saw a 0.8% property valuation increase with yields largely
unchanged. The Company again delivered an attractive total property return for
the year of 7.1%. This represented a 170bps outperformance of the MSCI All
Property UK Index. Over the last six years, LondonMetric has delivered a total
property return of 55%, which is a compound annual growth rate of 7.6%.
Our assets are well located
We invest in strong geographies with high intrinsic value from the land. 64.2%
of the portfolio by value is located in London, the South East and the
Midlands. London and the South East represents 40.5% and the Midlands
represents 23.7%. The rest of England accounts for 30.2% comprising the North
West (10.4%), the North East and Yorkshire (8.6%), the South West (6.6%) and
the East of England (4.6%). Scotland, Wales and Northern Ireland account for
3.8% and the remaining 1.8% relates to our theme park in Germany.
Logistics portfolio review
Our logistics portfolio is spread across the urban, regional and mega
sub-sectors and is valued at £4,024 million, up from £2,838 million in 2025
and representing 53% of the total portfolio. The 308 logistics assets have a
WAULT of ten years and an occupancy rate of 97%.
The urban logistics sub-sector has been our strongest conviction call for a
number of years, and this part of the portfolio grew significantly over the
year from £1,796 million to £2,904 million following the ULR takeover. Our
urban assets are spread across 279 locations and account for almost three
quarters of our logistics assets. 63% of our urban logistics rent has market
linked rent reviews, which is up from 53% in 2025. Demonstrating our focus on
strong geographies, 47% is located in London and the South East and 25% is in
the Midlands.
Logistics portfolio by sub-sector Urban Regional Mega
As at 31 March 2026
Value1 £2,904m £803m £317m
Net contracted rent £156m £39m £16m
WAULT 9 years 16 years 14 years
Average rent (psf) £8.80 £6.50 £6.50
ERV (psf) £9.90 £8.70 £8.60
Topped up NIY 5.1% 4.8% 4.6%
Contractual uplifts on rent 37% 75% 100%
Total property return 6.9% 8.4% 5.5%
1 Including developments
Logistics continues to deliver attractive market rental growth which, together
with material embedded reversion, is delivering strong income growth. Over the
year, we added £8.4 million of additional rent from asset management on our
logistics assets, with urban logistics open market rent reviews delivering an
uplift of 38%.
Reflecting the reversion still embedded in the portfolio, average ERVs on our
logistics portfolio are 18% higher than average passing rents (urban
logistics: 12%, regional and mega: 32%). The higher reversion for regional and
mega reflects greater exposure to contractual reviews (index linked and fixed)
and the fact that these reviews have to date lagged stronger open market
settlements.
Our logistics assets are valued at a topped up NIY of 5.0% and an equivalent
yield of 6.2%. Over the year, they delivered a total property return of 7.0%
and saw a valuation uplift of 1.5%. On a like for like basis, yields remained
flat across our three sub-sectors and ERVs grew by 2.6% (urban logistics:
2.8%, regional and mega: 2.3%).
Long income portfolio review
Our long income assets are aligned to the changes in the way people live and
shop, and are spread across the convenience, entertainment & leisure and
healthcare sectors. They are let on long leases to best in class operators and
have very low operational requirements. As at the year end, our long income
portfolio had grown by £309 million to £3,516 million, representing 46% of
the portfolio. The 365 assets are 99% occupied, let with a WAULT of 23 years
and 89% of rent is subject to contractual uplifts which provides certainty of
income growth.
Long income portfolio by sub-sector Entertainment Convenience Healthcare
& leisure
& education
As at 31 March 2026
Value1 £1,540m £1,055m £921m
Net contracted rent £94m £64m £51m
WAULT 36 years 11 years 13 years
Topped up NIY 5.7% 5.7% 5.2%
Equivalent yield 7.5% 6.1% 5.7%
Contractual uplifts 98% 64% 100%
Total property return 7.4% 8.3% 5.8%
1 Including developments
Entertainment and leisure, which mainly comprises our theme parks and hotel
investments, is our largest sub-sector weighting at £1,540 million (2025:
£1,298 million). The increase in our long income portfolio's value over the
year was largely due to our £214 million of hotel investment activity. Our
convenience exposure also increased to £1,055 million (2025: £978 million)
helped by the addition of M&S and Booker assets in the year. Our
healthcare exposure remained broadly unchanged.
Our long income assets are valued at a topped up NIY of 5.6% and an equivalent
yield which is 110bps higher at 6.7%. Over the year, our long income assets
delivered a total property return of 7.2% with valuations flat and ERV growth
of 4.1%. Our long income asset management delivered an £8.0 million per annum
uplift in rent, mostly from rent reviews which added £6.5 million and
reflected an 18% increase on a five yearly equivalent basis.
Entertainment & leisure represents 20% of the portfolio and comprises:
· Theme parks - 41% of sub-sector - Four assets at Thorpe Park (490 acres),
Alton Towers (550 acres), Warwick Castle (100 acres) and Heide Park (in
Germany, 210 acres). These assets are let with a WAULT of 51 years to Merlin
Entertainments, with annual CPI+0.5% rent reviews on the UK assets and annual
fixed rent reviews of 3.3% per annum on Heide Park. All of our Merlin assets
are guaranteed by Merlin's top operating company. C.20% of our rent is derived
from Merlin's hotels with accommodation bookings an important source of
revenue for Merlin. In total, the sites have c.6.5 million visitors per year
and are valued at an average of c.£0.5 million per acre;
· Hotels - 40% of sub-sector - 93 budget hotels, with a WAULT of 28 years,
including 63 let to Travelodge (53 following post year end activity) with a
WAULT of 24 years, mainly on five yearly CPI+0.5%/RPI linked reviews, and 26
let to Premier Inn with a WAULT of 24 years. Our hotels are nationwide and
focused on roadside locations; and
· Other - 19% of sub-sector - Consists mainly of 16 pubs, five cinemas,
five garden centres and the AO Manchester Arena, which is mostly let to SMG
Europe for a further 19 years.
Convenience represents 14% of the portfolio and comprises:
· Food stores - 38% of sub-sector - 44 assets let at an average rent of £19.40 psf with key occupiers including M&S, Waitrose, Sainsbury's, Co-op, Costco, Tesco and Aldi. These are predominantly smaller format stores averaging c.30,000 sq ft;
· NNN retail - 37% of sub-sector - 50 assets, primarily single or cluster assets let to discount, essential, electrical and home retail occupiers such as B&M, Currys, DFS, Dunelm, Home Bargains, Pets at Home and The Range at an average rent of £14.50 psf. These assets typically benefit from high alternative use values;
· Roadside - 14% of sub-sector - 70 assets, primarily convenience stores with attached petrol filling stations, drive-thru coffee outlets and automated car washes. Key occupiers include Co-op, IMO, BP, McDonalds, MFG and Starbucks; and
· Other - 11% of sub-sector - 20 trade/DIY stores and autocentres (key occupiers include Halfords, Kwik Fit, Topps Tiles and Wickes) and eight car parks let to Q-Park with a WAULT of 26 years.
Healthcare and education represents 12% of the portfolio and comprises:
· Hospitals - 86% of sub-sector - 12 private hospitals, of which 11 are let to Ramsay Health Care with a WAULT of 11 years and annual fixed rent reviews of 2.75%. All of our Ramsay hospitals have a parent company guarantee. The two largest hospitals are in Sawbridgeworth and Chelmsford with over half the hospitals located in the South East;
· Care homes - 8% of sub-sector - Six assets mainly let to Bupa and Priory
with a WAULT of 19 years; and
· Education - 6% of sub-sector - 24 children's nurseries and adventure
centres and one student asset.
Acquisitions in the year
Acquisitions in the year, including £1.2 billion of properties added through
the takeover of ULR and Highcroft, totalled £1,549 million across 187 assets.
The acquisitions had a WAULT of 12.9 years and a NIY of 5.4% which is expected
to grow to 6.1% over five years from contractual rent reviews and capturing
reversion through asset management.
Logistics investments made up 80% of the acquisitions, mostly in the urban
logistics sector and acquired through the takeover of ULR. A further 15% of
acquisitions consisted of entertainment & leisure investments,
predominantly Premier Inn hotels, with the remainder mainly comprising
convenience purchases and two office investments, the latter acquired through
the Highcroft takeover for £4.4 million.
Logistics acquisitions - £1,238 million
142 logistics assets were acquired for £1,238.4 million with a WAULT of 9.1
years comprising:
· 130 urban warehouses, acquired for £1,134.5 million through the ULR
takeover. The 10.1 million sq ft portfolio generated a rent of £64.7 million
per annum, 82% of which was subject to open market rent reviews. The assets
had a WAULT of eight years and 63% were located in London, the South East and
the Midlands. 3PL and parcel operators represented a significant amount of
this income;
· Four urban warehouses, acquired individually for a total of £48.1
million with a WAULT of 12.2 years, comprising a recently developed 106,000 sq
ft two unit scheme in Irlam, an 80,000 sq ft pre-let development funding in
Malton, a recently developed and let 68,000 sq ft warehouse in the West
Midlands, and a 159,000 sq ft Booker warehouse in Doncaster with potential for
a large extension;
· Seven warehouses, acquired for £33.5 million through the Highcroft
takeover. The 507,000 sq ft of predominantly urban assets generated a rent of
£2.5 million per annum with a WAULT of six years, and 42% was located in
London, the South East and the Midlands; and
· A 450,000 sq ft regional warehouse let to UPS and located at East
Midlands Airport, acquired for £22.3 million. The state-of-the-art airside
facility was built in 2020 at a cost of £140 million and is let until 2117
with five yearly rent reviews linked to CPI.
Long income acquisitions - £306 million
43 long income assets were acquired in the year for £305.8 million with a
WAULT of 33.1 years.
Entertainment and leisure acquisitions totalled £230.4 million, comprising:
· 18 Premier Inn hotels, acquired for £181.1 million, 17 of which were
sale and leasebacks with Whitbread PLC. The modern and refurbished hotels have
a WAULT of 28 years, CPI linked rent reviews and strong rent cover. 66% are
located in the South East;
· Three further hotel acquisitions for £32.6 million, including two at
Manchester Airport comprising the Clayton hotel (365 beds) and the Crown Plaza
hotel (299 beds);
· Two garden centres, acquired for £9.5 million let to BGC and another
small property for £0.2 million; and
· Two gyms, acquired for £7.0 million through the Highcroft takeover.
Convenience acquisitions totalled £75.4 million, comprising:
· 11 NNN retail/roadside assets, acquired for £36.1 million through the
Highcroft takeover, most of which are located in London, the South East and
Midlands and include units let to Booker, Wickes and Pets at Home;
· Five Booker units in Tunbridge Wells, Lincoln, Southend-on-Sea, Worcester
and Merthyr Tydfil, acquired for £26.9 million; and
· Two development fundings in Ludlow and Eastbourne let to M&S, Greggs
and Starbucks, acquired for £12.4 million.
Post year end, we have exchanged on the acquisition of convenience pre-let
development fundings for up to £39.8 million, reflecting a yield on cost of
6.1%. The developments are anchored by M&S food stores with an anticipated
WAULT of 19.3 years and index linked rent reviews.
Disposals in the year
Over the year, we sold 57 assets for £318.1 million (at LondonMetric share),
reflecting an average transaction size of £6 million and a blended NIY of
5.8%. The WAULT was 12.5 years and sales were in line with prevailing book
values. Logistics assets accounted for 43% of disposals, most of which were in
the urban logistics sector and a significant proportion of which were former
ULR assets. Convenience sales accounted for a further 33% of disposals, most
of which were the sale of former LXi assets.
In total, we sold 43 assets acquired through recent M&A activity, netting
£173 million. Including post year end sales, which generated total proceeds
of £49 million, we have now sold 79 former LXi assets for £327 million, (12%
of the original portfolio) and 21 ULR assets for £72 million (7% of the
original portfolio).
Logistics disposals - £137 million
25 logistics assets were sold for £137.3 million with a WAULT of just four
years, reflecting our strategy of selling down shorter-let income where income
growth prospects were less certain. The sales comprised:
· 17 former ULR assets, sold for £54.9 million and with a WAULT of just
3.7 years. Nearly half of the assets were located in the North of England or
Scotland and approximately half were let to 3PLs or parcel delivery operators
including DX and XPO;
· A vacant 290,000 sq ft regional logistics warehouse in Sheffield, sold to
an owner occupier for £26.0 million;
· A 98,000 sq ft multi-let urban logistics asset in Crawley, sold for
£21.4 million and with just two years term certain;
· A 32,000 sq ft urban logistics asset together with a car park in
Walthamstow London, both let to Ocado for a further three years, sold for
£15.6 million; and
· Four further sales for £19.4 million with a WAULT of five years and
mostly former LXi or Mucklow assets.
Post year end, we sold five logistics warehouses for total proceeds of £27.9
million, four of which were former ULR assets.
Long income disposals - £146 million
Long income assets sold in the year totalled £146.1 million across 30
properties and with a WAULT of 17.5 years.
Convenience disposals represented the majority of these sales, with 12 assets
sold for £105.7 million, comprising:
· A 125,000 sq ft LXi Sainsbury's supermarket in Middlesbrough, sold for
£41.0 million;
· Two LXi car parks let to Q-Park sold for £24.5 million;
· Three Wickes stores in Wigston, Carlisle and Newmarket, sold for £11.6
million;
· A new M&S store in Weymouth, sold for £15.9 million;
· Two LXi food stores, in Scotland and Liverpool, sold for £8.5 million;
· Two roadside assets let to Starbucks and Burger King in Rushden and
Peterborough, sold for £3.4 million; and
· A Highcroft asset in Leamington Spa, sold for £0.8 million.
Entertainment and leisure sales totalled £31.8 million across 15 assets. They
comprised seven Travelodge hotels sold for £18.7 million, and eight pubs sold
for £13.1 million, five of which were Stonegate pubs with just 16 pubs
remaining from the initial 34 acquired from the LXi takeover.
Healthcare and education assets sales totalled £8.6 million and comprised one
care home and two children's nurseries.
Post year end, we have sold seven long income assets for £21.3 million, six
of which were Travelodge hotels.
Other disposals - £35 million
Other sales outside logistics and long income totalled £49.7 million
(LondonMetric share: £34.7 million), comprising:
· A 70,000 sq ft retail park in London, sold for a total consideration of
£48.5 million (LondonMetric share: £33.5 million). The asset was acquired
for £38 million in 2022. Our asset management has increased the annual rent
from £1.4 million to £2.5 million through regears with B&Q and Pets at
Home, and new leases with Tapi, Starbucks, Burger King and InstaVolt; and
· A vacant Highcroft office in Cardiff, sold for £1.2 million.
Occupier activity
Asset management continues to lengthen our income profile and generate
attractive income growth as we work in partnership with our occupiers. During
the year, we undertook 327 occupier initiatives adding £16.6 million per
annum of rent, which delivered like for like income growth of 4.2%. Asset
management on assets acquired through the ULR takeover delivered £2.6 million
of this additional rent. Over the next two years, with the benefit of
contractual uplifts, open market uplifts on our logistics portfolio and other
active asset management initiatives, we expect to add £38 million per annum
of additional income. Full letting of vacant space would add a further £11
million of rent.
Lettings and regears
69 lettings and regears were signed in the year with a WAULT of ten years,
adding £5.7 million of rent per annum and with average occupier incentives
equivalent to just six months rent free.
Logistics lettings and regears were all on urban logistics assets and with a
WAULT of eight years adding £4.0 million. They comprised:
· 19 regears adding £2.3 million of rent at 24% above previous passing
rent and extending the WAULT by six years, with ten of the regears on former
ULR assets with occupiers including Ceva Logistics, Culina Logistics, XPO and
Volvo; and
· 11 new lettings adding £1.7 million of rent, the largest of which was a
71,000 sq ft vacant warehouse in Luton relet at 72% above rent previously
paid. Six of the lettings were on former ULR assets, adding £0.6 million.
Long income lettings and regears totalled 37 and were signed with a WAULT of
14 years, adding £1.4 million per annum of rent. Convenience lettings and
regears accounted for £1.1 million of the uplift and comprised:
· 18 new lettings, adding £0.6 million, including seven new lettings with
EV operator InstaVolt; and
· 11 regears, adding £0.5 million with an average rent increase of 20%,
including a 24,000 sq ft food store in Luton where we let a former Homebase to
M&S on a new 15 year lease at a rent 53% higher than previously passing.
Four deals were signed with Wickes, whilst other deals were signed with
occupiers including Halfords, Dunelm, BP and Tapi.
Outside of our logistics and long income sectors, a further £0.3 million was
added through two office lettings.
At the year end, 1.2 million sq ft of the portfolio was vacant, of which 0.9
million sq ft related to former ULR assets. The largest vacancy is 0.5 million
sq ft of warehousing in Melton Mowbray where we are engaged with a number of
potential occupiers who are attracted by very low rents at the asset.
We continue to work closely with M&S and recently completed development of
three pre-let stores in Weymouth (41,000 sq ft, BREEAM Excellent), Luton
(24,000 sq ft refurbishment) and Largs (13,000 sq ft). In addition, we expect
to complete developments in the summer of our new 390,000 sq ft M&S
distribution facility in Avonmouth (BREEAM Excellent) and a 21,000 sq ft store
in Ludlow. We have also commenced construction of a 21,000 sq ft M&S food
store in Blackpool.
Rent reviews
258 rent reviews were settled in the year, adding £10.9 million per annum of
rent at an average of 19% above previous passing on a five yearly equivalent
basis, with open market reviews 33% higher.
Logistics rent reviews totalled 69 and added £4.4 million of rent at 21%
above previous passing rent on a five yearly equivalent basis. These reviews
comprised:
· 52 urban reviews, which added £3.5 million and were settled at 25% above
passing rent on a five yearly equivalent basis, with open market urban reviews
adding £2.2 million which represented a 38% uplift (a 6.6% CAGR);
· 16 regional reviews, which added £0.8 million and were settled at 19%
above previous passing on a five yearly equivalent basis. All but one of these
reviews were RPI linked; and
· One mega fixed review, settled at 8% above previous passing rent on a
five yearly equivalent basis.
Long income rent reviews were settled across 186 properties, adding £6.5
million of rent at 18% above previous passing rent, on a five yearly
equivalent basis. All but 11 of the reviews were contractual (RPI, CPI or
fixed) rent reviews and the deals comprised:
· 42 entertainment & leisure reviews, adding £2.5 million, of which
£1.6 million related to theme parks;
· 100 convenience reviews, adding £2.5 million; and
· 44 healthcare and education reviews, adding £1.5 million, most of which
related to annual reviews on our Ramsay Hospitals.
Occupier income diversification and satisfaction levels
Our investment and asset management actions over a number of years have
increased the resilience of our portfolio by aligning our income to
structurally supported sectors and assets with strong occupational and
investment demand. The LXi merger in 2024 increased our income diversification
through the addition of new sectors where we believe there are strong
structural tailwinds, whilst the ULR takeover added greater income granularity
in our key conviction sector.
Over the year, we reduced the income concentration from our top ten occupiers
from 38% to 35%, with exposure to our three largest occupiers (Ramsay Health
Care, Merlin Entertainments and Travelodge) also falling from 27% to 22%.
Our latest occupier survey in March 2026, again demonstrated strong
contentment and we scored an average of 8.8 out of 10.0 for whether occupiers
would recommend us as a landlord (2025: 8.7). In terms of satisfaction with
our properties, we scored 8.6 (2025: 8.6). 201 occupiers were contacted
representing 86% of our rent, and we received 70 responses representing 55% of
our rent. The survey included occupiers inherited through the ULR takeover.
Top ten occupiers (% of income)
Ramsay Health Care(1) 9.1%
Merlin Entertainments(2) 7.8%
Travelodge 4.9%
Premier Inn 3.3%
Booker 2.2%
M&S 1.9%
Great Bear 1.6%
Tesco 1.5%
Primark 1.4%
Amazon 1.3%
Total 35.0%
1 Ramsay Health Care provides quality healthcare globally with over 14
million patient admissions per annum across over 550 locations. Ramsay is
listed on the Australian Stock Exchange valued at £5 billion. In the UK,
Ramsay is one of the leading independent healthcare providers with 34 acute
hospitals caring for over 200,000 patients per annum and employing c.8,000
people. UK revenues in the last financial year were 13% higher at £1.3
billion.
2 Merlin Entertainments is a global leader in branded entertainment
destinations with c.61 million visitors per annum. It operates c.130
attractions in over 20 countries, including Alton Towers, Thorpe Park and
Warwick Castle in the UK which are owned by LondonMetric. Merlin recorded
global revenues of £2.0 billion in 2025 and is owned by the LEGO family,
Blackstone, Wellcome Trust and CPPIB.
ESG activity
We have a comprehensive ESG strategy to minimise the environmental impact of
our assets, maximise energy efficiency and improve climate resilience. We
continue to invest in high quality buildings and focus on working with our
occupiers on energy efficiency and clean energy initiatives, primarily solar
PV, LED lighting, roof improvements and degasification. We also see ourselves
as strong stewards of poorer quality assets, with the necessary expertise and
appetite to improve existing buildings.
Our NNN approach ensures that our Scope 1 and 2 emissions remain very low. Our
Scope 3 emissions are significantly higher but predominantly relate to
occupier energy usage and have a far lower energy intensity level than many
other real estate sectors. Relatively inexpensive initiatives can materially
improve energy ratings and consumption, with occupiers typically undertaking
these improvements themselves given the quick payback and their long leases
with us. Where we fund improvements, this supports higher rents or are
incorporated within normal lease incentives, helping to minimise defensive
capex.
We continue to improve our external ESG benchmark scoring, notably improving
our CDP score from C- to A-. Our GRESB score remained above the peer average
at 73, resulting in a two-star rating. Our MSCI rating was A, and our
FTSE4Good score remained above average at 3.6. Key progress in the year
included:
· EPCs - Despite our M&A, our EPC A-B ratings increased from 58% to 60%
of the portfolio, and our EPC A-C ratings were unchanged at 92% of the
portfolio. Our EPC ratings benefitted from asset management initiatives, new
EPC assessments on over 50 units covering 2.2 million sq ft, and our
investment activity where we sold lower-rated assets and acquired mainly EPC
A-B rated assets;
· Asset management and improvements - We continue to build sustainability
improvements into all of our new leases and regears. We also undertook a
number of refurbishments during the year, which materially improved the EPC
ratings and environmental credentials of those assets;
· Net Zero - Our Net Zero Pathway has been updated to reflect changes in
the portfolio in the year, including M&A. Our portfolio carbon intensity
has decreased from 39kgCO2e/sq m (2024 baseline) to 33kgCO2e/sq m;
· Occupier energy data - We continue to measure our occupiers' energy
usage. Despite industry changes which limited automated data access this year,
we reached 72% portfolio coverage compared to 80% in the previous year;
· Climate Resilience - We continue to monitor our portfolio's current and
future vulnerability to extreme climate hazards, with a focus on flood risk.
Our updated flooding analysis showed that the ULR portfolio has a similarly
low risk profile compared to the LondonMetric portfolio. We continue to
undertake further analysis on higher risk assets; and
· Solar PV - We continue to collaborate with occupiers to install solar
across our properties, adding 3.9MWp in the year, bringing the total capacity
to 11.9MWp (2025: 8.1MWp). This comprised 1.9MWp installed across seven
existing properties, as well as 2.0MWp from the ULR takeover and other
acquisitions. Our pipeline of future solar projects totals 4.9MWp.
Financial review
Our continued focus on income and portfolio growth this year, through
significant M&A activity and asset recycling, has enabled us to deliver
another strong set of results, despite the liquidity challenges that have
persisted in the real estate sector and the ongoing economic and geopolitical
uncertainty. The corporate acquisitions of Highcroft Investments plc
('Highcroft') and Urban Logistics REIT Plc ('ULR') in the first half of the
year added £1.2 billion of assets to our portfolio and underpinned the 16.6%
increase in our net rental income and 13.9% increase in EPRA earnings, to
£305.3 million or 13.5p per share. Our dividend for the year of 12.45p per
share is 108% covered by EPRA earnings and fully covered on a cash basis. We
have benefitted from operational synergies and cost savings following these
corporate acquisitions and continue to maintain a disciplined approach to cost
control, allowing us to report a sector leading EPRA cost ratio of 7.7%.
We have strengthened our balance sheet and grown IFRS net assets by £609.0
million in the year or by 14.8% to £4.7 billion, primarily as a result of our
M&A activity and valuation gain of £68.2 million. Through targeted asset
recycling and sales of weaker and non core assets, we have reinvested into
better quality assets in stronger sectors and geographies and have increased
our logistics weighting to 52.8% from 46.1% last year. EPRA net tangible
assets ('NTA') per share increased from 199.2p last year to 200.6p.
This year, we have taken proactive measures to strengthen and diversify our
financial position through comprehensive refinancing of secured, near term and
high cost debt facilities acquired through M&A. We have raised new debt of
£1.2 billion, repaid £1.1 billion and most recently refinanced £1.5 billion
of unsecured bank facilities. The new debt arrangements included our inaugural
£500 million public bond with a weighted average maturity of 5.5 years and
fixed rate coupon of 4.69%, rated A- by Fitch and a £150 million US private
placement, priced at the tightest credit spread of any REIT globally in the US
private placement market over the last three years reflecting strong demand.
The new arrangements allowed us to repay £1,143.9 million of existing debt,
of which £743.9 million was secured and more expensive former ULR and LXi
facilities. These refinancings have lowered our finance costs, increased our
maturity and diversified our lending pool both through new bank lenders and
greater access to the debt capital markets building on the success and
strength of our credit rating.
In March 2026, we refinanced £1.5 billion of unsecured revolving credit
facilities and term loans, reducing the average margin by 49bps to 1.05% and
average commitment fees by 19bps, further diversifying our lender base with
two new lenders and improving our weighted average debt maturity.
Our refinancing activity has enabled us to maintain a low average cost of debt
of 4.0% (2025: 4.0%), despite acquiring higher priced debt through M&A and
persistently high base rates. Our other debt metrics remain robust, with debt
maturity at the year end of 4.4 years (2025: 4.7 years), only £0.2 billion of
debt expiring over the next two years and a loan to value of 36.7% (2025:
32.7%). We have available undrawn debt facilities of £0.5 billion, which
together with our disposals programme, provides significant headroom and
removes material refinancing risk until FY30.
We continue to be very well protected against adverse movements in interest
rates through a combination of fixed rate loans and interest rate derivatives
in the form of swaps and caps. We acquired £140 million of interest rate
swaps through the ULR acquisition at an average rate of 3.2% and post year end
we completed £350 million of new interest rate swaps at a fixed rate of
3.75%. Our drawn debt at the year end was 99.8% hedged by current fixed rate
debt and interest rate derivatives.
Presentation of financial information
The Group financial information is prepared in accordance with IFRS, where the
Group's share of its joint venture ('JV') is shown as a single line item in
the income statement and balance sheet and its subsidiaries including any
non-controlling interest ('NCI') are fully consolidated.
The Group uses alternative performance measures based on the European Public
Real Estate Association ('EPRA') Best Practice Recommendations ('BPR') to
supplement IFRS, in line with best practice in our sector, as they highlight
the performance of the Group's property rental business and aid the
comparability of financial information across public real estate companies.
EPRA earnings and EPRA net tangible assets are key business metrics adopted in
this review and throughout this report and exclude items including fair value
movements on property, derivatives and other financial instruments, profits
and losses on disposal of properties, goodwill, acquisition costs and deferred
tax, all of which may fluctuate considerably from year to year. EPRA earnings
is the key support to the level of dividend payments.
The supplementary notes include other EPRA metrics and a proportionally
consolidated EPRA income statement and balance sheet. Further details,
definitions and reconciliations between EPRA measures and the IFRS financial
statements can be found in note 8 to the financial statements, supplementary
notes i to vii and xviii, and in the Glossary.
M&A activity
We acquired the entire issued share capital of Highcroft on 21 May 2025 for
£47.6 million through the issue of 24.2 million new ordinary shares. The fair
value of net assets acquired was £52.9 million, the portfolio of 22 assets
being valued on acquisition at £81.1 million. The acquisition has been
accounted for as a property acquisition and the difference between the
consideration paid and the net assets acquired represents a price discount of
£5.3 million, reducing the cost of the property assets acquired. The price
discount was largely due to the exchange ratio being based on the Company's
adjusted net tangible assets ('NTA') which was higher than the Company's share
price on completion used to determine the consideration paid of 196.5p.
Highcroft Investments plc
£m
Fair value of consideration paid Shares 47.6
Fair value of net assets acquired Investment property 81.1
Bank debt (26.1)
Other (2.1)
52.9
Price discount on acquisition (5.3)
Acquisition costs 1.7
We acquired the entire issued share capital of ULR on 23 June 2025 for £726.8
million through the issue of 257.9 million new ordinary shares at 202.2p per
share, a cash consideration of £196.7 million and the fair value of the
Company's existing shareholding in ULR of £8.7 million. The exchange ratio
was based on an adjusted NTA to adjusted NTA approach, taking into account the
fair value of property and debt and the acquisition of the investment advisory
contract and team of four employees which completed the following day for a
cash consideration of £8.1 million.
These two acquisitions have been accounted for as business combinations in
accordance with IFRS 3. The difference between the total consideration paid of
£734.9 million and the total fair value of net assets acquired of £726.8
million, totalling £8.1 million, has been recognised in the income statement
as goodwill fully impaired in the year. The goodwill arising was largely due
to the consideration paid being based on the Company's share price at
completion of 202.2p, which was higher than the adjusted NTA used to determine
the exchange ratio.
Transaction costs of £16.3 million have been recognised separately in the
income statement. Further details are set out in note 15 to the financial
statements.
Urban Logistics REIT Plc Logistics Asset Management Total
£m
Newco Limited
£m
£m
Fair value of consideration paid:
Shares 521.4 - 521.4
Cash 196.7 8.1 204.8
Shares held in Urban Logistics REIT Plc 8.7 - 8.7
726.8 8.1 734.9
Fair value of net assets acquired (note 15) 726.7 0.1 726.8
Goodwill recognised on acquisition and subsequently impaired 0.1 8.0 8.1
Acquisition costs recognised in the income statement 16.0 0.3 16.3
Through our M&A activity we acquired secured debt facilities with new
lenders of £484.4 million, of which £464.4 million had been drawn at an
average rate of 4.26%.
Income statement
Group EPRA earnings are summarised in the table below.
For the year to 31 March 2026 2025
£m
£m
Gross rental income 461.7 395.5
Property costs (6.4) (4.9)
Net rental income 455.3 390.6
Management fees and other income 2.9 1.2
Net income 458.2 391.8
Administrative costs (30.2) (27.1)
Net finance costs1 (123.9) (97.1)
Share of joint venture and non-controlling interest2 2.2 1.9
Tax³ (1.0) (1.5)
EPRA earnings 305.3 268.0
1 Reflect borrowing costs of £163.6 million (2025: £124.5 million) (note
5b) and finance income of £18.0 million (2025: £23.7 million) (note 5a) less
the impact of inflation volatility relating to the income strip of £4.8
million (2025: £3.7 million) and debt early repayment costs of £16.9 million
in the current year
2 Reflects EPRA earnings for MIPP of £3.4 million (2025: £3.2 million)
reduced by the NCI share of EPRA earnings of £1.2 million (2025: £1.3
million) as shown in supplementary note ii
3 UK and German current taxes as reflected in note 6 to the financial
statements. Deferred tax on our German asset of £0.7 million (2025: £0.7
million) is also included in IFRS reported profit
Net rental income
As the UK's leading NNN lease REIT, we strive to deliver reliable, repetitive
and progressive income and dividends for our shareholders over the long term
and are therefore delighted to report a 16.6% increase in net rental income in
the year. The detailed movements in net rental income are set out in the table
below.
£m £m
Net rental income in the year to 31 March 2025 390.6
Additional rent from existing properties and developments 9.8
Movement in surrender premium income 2.5
Additional rent from acquisitions1 72.2
Rent lost through disposals (23.0)
Additional rent from net acquisitions 49.2
Movement in rent provisions 4.7
Movement in property costs (1.5)
Net rental income in the year to 31 March 2026 455.3
1 Includes additional rent from ULR of £54.6 million, from Highcroft of
£4.8 million and from other acquisitions of £12.8 million
Our property costs have increased primarily as a result of increased vacancy
costs inherited through our acquisition of ULR. However, our cost leakage
ratio remains low at 1.4% (2025: 1.2%) which is a reduction since the half
year as we have started to mitigate the impact of the ULR inherited vacancies.
Rent collection
Our rent collection rates continue to be very strong, reflecting our focus on
credit control and the quality of our covenants. We have collected 99.7% of
rent due in the year and trade receivables of £2.2 million that were overdue
and considered at risk have been provided for in full.
Administrative costs and EPRA cost ratio
Administrative costs increased 11.4% to £30.2 million, reflecting higher
remuneration costs from increased headcount and role changes following
corporate acquisitions, increased advisory fees for the enlarged group and
inflation.
Our sector leading EPRA cost ratio of 7.7% demonstrates operational synergies,
cost discipline and rental growth. The full calculation is set out in
supplementary note iv.
For the year to 31 March 2026 2025
%
%
EPRA cost ratio including direct vacancy costs 7.7 7.8
EPRA cost ratio excluding direct vacancy costs 7.1 7.5
Net finance costs
Our net finance costs have increased by £26.8 million or 27.6% to £123.9
million this year. We have held higher debt balances during the year due to
debt of £464.4 million acquired through corporate transactions and additional
debt required to fund the cash consideration of £204.8 million for ULR.
Our average drawn debt balance was £0.5 billion higher than last year and our
net debt has increased from £2.0 billion last year to £2.8 billion at 31
March 2026.
Therefore, whilst our average debt cost is unchanged at 4.0% our net finance
costs have increased by £26.8 million. This increase reflects interest
charges on new debt acquired through our M&A in the year of £11.1
million, increased interest on other debt facilities net of derivative
receipts of £14.4 million, higher commitment and amortisation costs
associated primarily with new facilities of £1.9 million and increased
interest charged on lease and other financial liabilities following CPI
increases of £1.2 million. This was offset by increased bank, coupon and
capitalised interest receivable of £1.8 million.
Further details on finance income and costs are provided in note 5 to the
financial statements.
Taxation
As the Group is a UK REIT, any income and capital gains from our qualifying
property rental business are exempt from UK corporation tax. Any UK income
that does not qualify as property income within the REIT regulations is
subject to UK tax in the normal way.
Our German asset, acquired through LXi, is subject to German corporate income
tax and deferred tax is provided on revaluation gains on that property.
The tax charge of £1.7 million in the year relates primarily to German
corporate and deferred taxes and the UK corporation tax charge attributable to
the Group's non-controlling interest in LMP Retail Warehouse JV Holdings
Limited.
The Group's tax strategy is compliance oriented; to account for tax on an
accurate and timely basis and meet all REIT compliance and reporting
obligations. We seek to minimise the level of tax risk and to structure our
affairs based on sound commercial principles. We strive to maintain an open
dialogue with HMRC with a view to identifying and resolving any issues as they
arise.
We continue to monitor and comfortably comply with the REIT balance of
business tests and distribute as a Property Income Distribution ('PID') 90% of
REIT relevant earnings to ensure our REIT status is maintained. The Group has
already paid a large part of its expected PID for the year to 31 March 2026.
IFRS reported profit
A reconciliation between EPRA earnings and the IFRS reported profit is given
in note 8(a) to the financial statements and supplementary note ii on a
proportionately consolidated basis and is summarised in the table below.
For the year to 31 March 2026 2025
£m
£m
EPRA earnings 305.3 268.0
Revaluation of property 68.2 106.0
Fair value of derivatives (9.7) (11.1)
Loss on disposals (19.0) (13.0)
Goodwill impairment1 (9.6) -
Acquisition costs(2) (16.3) -
Debt and hedging early repayment costs (16.9) -
Other movements3 (6.3) (2.0)
IFRS reported profit 295.7 347.9
1 Goodwill recognised on acquisition and subsequently impaired. Full details
are set out in note 15 to the financial statements
2 Reflects acquisition costs recognised in the income statement for the
corporate acquisition of ULR
3 Includes JV and NCI share of adjustments (£2.8 million), impact of
inflation volatility relating to the income strip (-£4.8 million),
revaluation of investments (-£3.6 million) and deferred tax (-£0.7 million)
in the year to 31 March 2026
The Group's reported profit for the year was £295.7 million (2025: £347.9
million), representing a 15.0% decrease. The movement reflects costs
associated with corporate acquisitions and debt repayment in the current year
of £42.8 million and adverse movements compared to last year in property
revaluations, sales and other movements of £48.1 million, offset by positive
movements in earnings and derivatives of £38.7 million.
Balance sheet
EPRA net tangible assets ('NTA') is a key performance measure that includes
both income and capital returns but excludes the fair valuation of derivative
instruments that are reported in IFRS net assets. A reconciliation between
IFRS net assets and EPRA NTA is detailed in the table below and in note 8(c)
to the financial statements. The EPRA proportionally consolidated balance
sheet is shown in supplementary note iii.
As at 31 March 2026 2025
£m
£m
Investment properties 7,819.0 6,383.9
Assets held for sale 47.8 10.4
Trading properties 1.1 1.1
Group investment property 7,867.9 6,395.4
Gross debt (2,952.3) (2,073.2)
Cash 143.4 81.2
Share of joint venture and non-controlling interest1 48.9 42.2
Other net liabilities (409.8) (374.6)
EPRA net tangible assets 4,698.1 4,071.0
Derivatives 16.2 23.7
Deferred tax - (0.5)
IFRS equity shareholders' funds 4,714.3 4,094.2
Share of non-controlling interest 18.6 29.7
IFRS net assets 4,732.9 4,123.9
1 Reflects share of net assets of MIPP of £67.5 million (2025: £71.9
million) reduced by the NCI share of net assets of £18.6 million (2025:
£29.7 million) as shown in supplementary note iii
IFRS net assets
IFRS reported net assets increased by £609.0 million or 14.8% in the year to
£4.7 billion, largely due to our M&A activity. EPRA NTA has increased
accordingly by £627.1 million or 0.7% on a per share basis to 200.6p. The
movement is detailed in the table below.
£m EPRA NTA
£m
At 1 April 2025 4,071.0
EPRA earnings 305.3
Dividend paid1 (245.3)
Property revaluation 68.2
Corporate acquisitions Highcroft Share issue 47.6
ULR Share issue 521.4
ULR Goodwill and derivatives(2) (9.3)
ULR Acquisition costs(3) (16.8)
542.9
Other movements4 (44.0)
EPRA NTA at 31 March 2026 4,698.1
1 Dividend charge of £271.8 million less scrip saving of £26.5 million
2 Goodwill of £8.1 million recognised on acquisition and subsequently
impaired and the fair value of derivatives acquired of £1.2 million
3 Acquisition costs of £16.3 million reflected in the income statement and
£0.5 million charged to equity
4 Other movements include debt early repayment costs (-£16.9 million), loss
on sales (-£19.0 million), the impact of inflation volatility relating to the
income strip (-£4.8 million), revaluation of investments (-£3.6 million) and
other movements (£0.3 million)
The movement in EPRA NTA per share, together with the dividend paid in the
year, results in a total accounting return of 6.9% (7.7% after adjusting for
M&A costs). The full calculation can be found in supplementary note viii.
Dividend
Our policy of paying a sustainable and progressive dividend remains unchanged
and the dividend for the year is 108% covered by EPRA earnings and fully
covered on a cash basis as set out in supplementary note xx. We have continued
to declare quarterly dividends and offer shareholders a scrip alternative to
cash payments.
The Company paid the third and fourth quarterly dividends for the year to 31
March 2025 and the first two quarterly dividends for the year to 31 March 2026
totalling £271.8 million or 12.4p per share as reflected in note 7 to the
financial statements. The Company issued 14.2 million ordinary shares under
the terms of the Scrip Dividend Scheme, which reduced the cash dividend
payment by £26.5 million to £245.3 million.
The first two quarterly payments for the current year of 6.1p per share were
paid as Property Income Distributions ('PIDs') in the year. The third
quarterly dividend of 3.05p per share was paid as a PID in April 2026 and the
Company has approved a fourth quarterly payment of 3.3p per share to be paid
in July 2026, of which 1.5p will be a PID. The total dividend payable for 2026
of 12.45p represents an increase of 3.8% over the previous year.
The Board took the following into account when considering its dividend
payments:
· Its REIT obligations to distribute 90% of property rental business
profits;
· Its desire to pay a sustainable, covered and progressive return to
shareholders;
· Its EPRA earnings for 2026; and
· The outlook for 2027.
At the year end, the Company had distributable reserves of £1.7 billion
(2025: £1.1 billion), providing substantial cover for the dividend payable
for the year. When required and at least six monthly, the Company receives
dividends from its subsidiaries which increase its distributable reserves.
Portfolio valuation
Our property portfolio valuation including the share of joint ventures and
excluding the non-controlling interest increased in the year to £7.6 billion
as set out in the table below.
The Group property portfolio valuation includes the value of assets held for
sale and trading properties that are reflected separately in the balance
sheet.
As at 31 March 2026 2025
£m
£m
Investment properties 7,819.0 6,383.9
Assets held for sale 47.8 10.4
Trading properties 1.1 1.1
Group investment property 7,867.9 6,395.4
Income strip gross up(1) (237.1) (231.0)
Head lease assets (54.4) (40.9)
Group property portfolio valuation2 7,576.4 6,123.5
Share of joint venture 65.5 69.9
Share of non-controlling interest (21.3) (38.1)
Total property portfolio valuation 7,620.6 6,155.3
1 Represents the gross up of the investment property balance associated with
the sale of a 65 year income strip of Alton Towers and Thorpe Park in 2022, as
reflected in note 14a(ii)
2 Portfolio valuation from external valuation reports set out in note 9a of
£7,575.3 million (2025: £6,122.4 million) plus trading property of £1.1
million (2025: £1.1 million)
During the year and as reflected in the table below, we acquired property
assets for £1,526.6 million, of which £1,225.7 million related to the
corporate acquisitions of Highcroft and ULR.
We spent £161.8 million on development and other capital expenditure and
generated net sales proceeds of £288.4 million which reduced the book value
of property by £307.4 million (including the cost of lease incentives written
off of £4.0 million).
At 31 March 2026, we had exchanged to sell ten assets for £48.4 million (book
value £47.8 million). These transactions will be accounted for on completion
next year. A full reconciliation between transactions exchanged and completed
in the year is set out in supplementary note xix.
Portfolio valuation movement
The portfolio movement in the year is reflected in the table below.
For the year to 31 March 2026 2025
£m
£m
Group opening valuation 6,123.5 5,972.7
Acquisitions1 1,526.6 284.7
Developments2 98.4 22.8
Capital expenditure3 63.4 68.9
Disposals4 (303.4) (323.7)
Revaluation5 62.1 101.0
Foreign currency 5.8 (2.9)
Group closing property portfolio valuation 7,576.4 6,123.5
Income strip gross up 237.1 231.0
Head lease assets 54.4 40.9
Group investment property6 7,867.9 6,395.4
1 Group acquisitions include purchase costs and represent completed
investment properties as shown in note 9 to the financial statements
2 Group developments include acquisitions, capital expenditure and lease
incentive movements on properties under development as reflected in note 9
3 Group capital expenditure and lease incentive movements on completed
properties as reflected in note 9 to the financial statements
4 Group disposals as reflected in notes 9a and 9b to the financial
statements
5 Profit on revaluation of investment properties in the income statement
also includes the movement in the income strip gross up of £6.1 million
(2025: £5.0 million)
6 Includes the value of assets held for sale of £47.8 million (2025: £10.4
million) and trading properties of £1.1 million (2025: £1.1 million)
Portfolio valuation split
A breakdown of the total property portfolio valuation by sector is reflected
in the table below.
As at 31 March 2026 2026 2025 2025
£m
%
£m
%
Mega distribution 316.5 4.2 315.1 5.1
Regional distribution 802.8 10.5 726.8 11.8
Urban logistics 2,904.4 38.1 1,796.0 29.2
Logistics 4,023.7 52.8 2,837.9 46.1
Convenience 1,054.8 13.8 977.7 15.9
Entertainment & leisure 1,539.6 20.2 1,297.8 21.1
Healthcare & education 921.5 12.1 931.1 15.1
Long income 3,515.9 46.1 3,206.6 52.1
Other 81.0 1.1 110.8 1.8
Total property portfolio value 7,620.6 100.0 6,155.3 100.0
Income strip gross up1 237.1 231.0
Head lease assets 54.4 40.9
Total portfolio value 7,912.1 6,427.2
Share of joint venture (65.5) (69.9)
Share of non-controlling interest 21.3 38.1
Group investment property2 7,867.9 6,395.4
1 Represents the gross up of the investment property balance associated with
the sale of a 65 year income strip of Alton Towers and Thorpe Park in 2022, as
reflected in note 14a(ii)
2 Includes investment properties of £7,819.0 million (2025: £6,383.9
million), assets held for sale of £47.8 million (2025: £10.4 million) and
trading properties of £1.1 million (2025: £1.1 million) which are reflected
separately in the Group balance sheet
Financing
The key performance indicators used to monitor the Group's debt and liquidity
position are shown below.
As at 31 March 2026 2025
£m
£m
Total debt drawn1 2,977.2 2,090.6
Cash 143.4 81.2
Net debt 2,833.8 2,009.4
Net debt/EBITDA2 7.5 6.4
Loan to value3 36.7% 32.7%
Cost of debt4,6 4.0% 4.0%
Interest cover5 (times) 3.8 4.2
Undrawn facilities 515.0 831.1
Average debt maturity 4.4 years 4.7 years
Hedging6 99.8% 100.0%
1 Excludes unamortised fair value adjustments that reduce gross debt to
£2,952.3 million (2025: £2,073.2 million) as set out in note 14a(i)
2 Based on net debt and annualised funds from operations, which includes
Highcroft and ULR pre-acquisition earnings
3 LTV includes the impact of sales and acquisitions that have exchanged and
excludes the fair value of debt as reflected in supplementary note xviii
4 Cost of debt is based on total debt drawn and includes amortised costs but
excludes commitment fees and adjustments to fair value
5 Net income divided by net interest payable as defined by the Group's
unsecured funding arrangements
6 Includes the impact of post period end hedging arrangements
Financing activity in the year
Net debt has increased by £0.8 billion this year, primarily as a result of
our M&A activity, through which we acquired £484.4 million secured
facilities with new lenders and funded the cash consideration for ULR of
£204.8 million.
In total, we have completed £1,230.0 million of new unsecured debt
arrangements which comprised the following:
· Inaugural £500 million public bond, rated A- by Fitch, with a weighted
maturity of 5.5 years and attractive coupon of 4.69%;
· £150 million US private placement with a weighted maturity of 5.5 years
and blended fixed rate of 5.3%; and
· Four unsecured bank facilities totalling £580 million with eight new
lenders, a weighted maturity of 4.2 years and blended margin of 1.4% which was
lower than comparable existing facilities.
These new arrangements have allowed us to repay £1,143.9 million of existing
debt facilities, comprising:
· £743.9 million secured facilities acquired through LXi and ULR;
o Four fixed rate facilities totalling £553.9 million with a blended rate of
5.4%;
o £190 million term loan and revolving credit facility with a margin of 1.75%
and less than two years remaining; and
· Two unsecured revolving credit facilities totalling £400 million with a
blended margin of 1.6% and four months remaining.
These financings have reduced our finance costs, increased our maturity and
diversified our lending pool both through new bank lenders and greater access
to the debt capital markets, building on the success and strength of our
credit rating.
Finally, in March 2026, we refinanced £1.5 billion of unsecured revolving
credit facilities and term loans, reducing the average margin by 49bps to
1.05% and average commitment fees by 19bps, further diversifying our lender
base with two new lenders and improving our weighted average debt maturity.
Hedging
The Group's policy continues to be to limit exposure to interest rate
volatility by entering into hedging and fixed rate arrangements. We acquired
£140 million of interest rate swaps through the ULR acquisition at an average
rate of 3.2% and post year end have completed on £350 million of new interest
rate swaps at a fixed rate of 3.75%. We continue to be very well protected
against adverse movements in interest rates and our year end drawn debt was
99.8% hedged by fixed rate loans and interest rate swaps and caps that we
currently have in place. We received £13.2 million (2025: £20.6 million)
from interest rate derivatives in place during the year and continue to
monitor our hedging profile in light of interest rate projections.
Financial loan covenants
The Group has comfortably complied throughout the year with the financial
covenants contained in its debt funding arrangements and has substantial
levels of headroom within these. Covenant compliance is regularly stress
tested for changes in capital values and income. The Group's unsecured
facilities, private placement loan notes and public bond, which together
account for 81% of debt drawn at the year end, contain gearing and interest
cover financial covenants. At 31 March 2026, the Group's gearing ratio as
defined within these funding arrangements was 67% which is significantly lower
than the maximum limit of 125%, and its interest cover ratio was 3.8 times,
comfortably higher than the minimum level of 1.5 times. Property values would
have to fall by 27% to reach the banking gearing threshold, which would equate
to an LTV ratio of 54%, and rents would have to fall by 57% or interest costs
rise by 152% before the banking interest covenant is breached.
Financial position at 31 March 2026
This year, we have proactively strengthened and diversified our financial
position through extensive refinancing of secured, near term and expensive
debt facilities. At 31 March 2026, we had total debt facilities of £3.5
billion, undrawn debt facilities of £0.5 billion and ample room under banking
covenants. We are in a strong financial position, with diversified sources of
funding and flexibility to execute transactions as opportunities arise and
repay near term debt expiries.
Our refinancing activity has enabled us to maintain a low average cost of debt
of 4.0% (2025: 4.0%), despite acquiring higher priced debt through M&A and
persistently high base rates. Other debt metrics remain robust, with debt
maturity at the year end of 4.4 years (2025: 4.7 years), with only £0.2
billion of debt expiring over the next two years, and loan to value of 36.7%
(2025: 32.7%).
Cash flow
During the year, the Group's cash balances increased by £62.2 million as
reflected in the table below. Further detail is provided in the consolidated
cash flow statement.
For the year to 31 March 2026 2025
£m
£m
Net cash from operations before changes in working capital 366.2 322.1
Working capital movements and tax paid (4.0) (5.2)
Net cash from operating activities 362.2 316.9
Net cash used in investing activities (303.8) (7.9)
Net cash from/(used in) financing activities 3.8 (339.7)
Net increase/(decrease) in cash and cash equivalents 62.2 (30.7)
The net cash inflow from operations has increased by £45.3 million to £362.2
million. The Group spent £163.9 million acquiring Highcroft and ULR (net of
cash received) and a further £447.2 million acquiring other property and
investment assets and developing property. It received £282.6 million from
property disposals, £9.1 million from joint ventures investments and £15.6
million in interest. Cash inflows from financing activities reflect net loans
drawn of £415.9 million offset by dividend payments and distributions of
£256.1 million, financing costs of £152.1 million and share purchases and
awards of £3.9 million.
Risk management and internal controls
Managing risk
Our risk management framework ensures that risks are managed in line with the
Board's risk appetite.
The Board
The Board determines the level of risk it is prepared to accept in pursuing
the Group's strategic objectives and retains ultimate responsibility for the
risk management and internal controls framework.
Risk considerations are embedded within Board decision making and form a
standing component of Board agendas throughout the year. The Chief Executive
initiates discussion through a market and operating overview covering relevant
macroeconomic themes, external developments, evolving trends within UK real
estate and the wider risk environment. Input is provided by the Chief
Financial Officer as appropriate, including in relation to capital structure,
liquidity, financing and other Company specific risks. A high level risk
dashboard is used to monitor material issues, track movements in principal and
emerging risks and promote regular, structured risk debate.
Detailed Board papers highlight specific risk considerations relevant to
matters reserved for the Board. Where such papers are circulated outside of
scheduled meetings, Directors are able to engage with senior management prior
to approval and subsequent Board ratification. Relevant discussions between
Directors outside formal meetings are also reported back to the Board.
During the year, the external environment continued to be a key driver of
Board level risk discussions. The Board considered the implications of ongoing
geopolitical instability, including the escalation of conflict in the Middle
East, rapidly evolving US policy and domestic political and fiscal
developments, as well as the renewed volatility in global trade, energy
markets and supply chains. These developments have increased uncertainty
around inflation, interest rates, debt costs and market sentiment, with
potential second order impacts for occupiers, investment markets and financing
conditions.
Alongside the macro backdrop, the Board also considered a range of business
specific risks, including labour and skills retention, sustained higher debt
costs, market liquidity, execution risk associated with corporate activity,
the timing and pricing of non core asset disposals, debt strategy, tenant
covenants, vacancies and asset management initiatives.
This year, the Board approved a number of acquisitions, including the
takeovers of Urban Logistics REIT Plc ('ULR') and Highcroft Investments plc
('Highcroft'). In each case, the transactions were assessed through the
Group's established investment appraisal and approval processes, supported by
detailed due diligence and external advice where appropriate. The Board was
satisfied that the acquisitions were consistent with the Group's strategy and
risk appetite and did not give rise to any new principal risks.
Determining appropriate risk appetite levels
The Group's risk management framework provides the Board with assurance that
inherent business risks are identified and mitigated appropriately, reducing
the likelihood of adverse outcomes and helping to ensure that controllable
risks remain within acceptable limits.
Risk appetite represents the nature and extent of risk the Board is willing to
accept in pursuit of its strategic objectives. In determining risk appetite,
the Board considers a wide range of factors, including prevailing market
conditions, emerging risks and the Group's financial strength. While the Board
maintains a generally low risk appetite, it balances this with the need to
remain commercially responsive and able to pursue value accretive
opportunities.
Preparing for the Provision 29 controls declaration
The UK Corporate Governance Code 2024 places increased emphasis on the Board's
responsibility for establishing and maintaining an effective risk management
and internal control framework, including an annual evidence based review of
the effectiveness of material controls and a formal declaration in the Annual
Report from next year.
During the year, the Group continued to progress a structured programme of
work to strengthen, document and evidence its internal control framework in
preparation for this future declaration. This programme has been overseen by
management with regular updates provided to the Audit Committee and Board.
Key elements of the programme include:
· Scoping the Group's key business cycles and processes to establish a
consistent and repeatable basis for identifying material control areas
· Documenting end‑to‑end processes and controls, supported by process
maps and risk and control matrices to identify key risks, material controls
and any gaps
· Enhancing the documentation and consistency of controls across financial,
operational, reporting and compliance areas and identifying and tracking
remediation actions
· Developing an assurance and monitoring approach to support the Board's
ongoing assessment of control effectiveness
· Completing an initial assessment of the design of material controls
across key business cycles with effectiveness testing planned ahead of 31
March 2027
This work is being phased and prioritised reflecting both the scale and
complexity of the Group's activities and the evolving regulatory timetable.
While the Board has not yet made a declaration under Provision 29, the
programme is designed to ensure that it is well prepared to do so when
required and that internal controls continue to evolve in line with the
Group's growth and risk profile.
Risk categories Risk consideration
Corporate - Relating to the entire Group Culture, strategy, the market, political, economic, employees, Responsible
Business practices, wider stakeholders, security, systems, regulation
Property - Focusing on our core business Portfolio composition, investments, divestment, asset management,
developments, valuation, occupiers
Financing - Focusing on business funding Capital markets, investors, joint ventures, debt, cash management
Looking ahead
Looking ahead, the Board and Audit Committee will continue to monitor the
evolving economic, market, climate and geopolitical environment and its
potential implications for the Group's risk profile. Focus will remain on
maintaining strong capital discipline and liquidity, overseeing the continued
embedding and monitoring of the Group's internal control framework in
preparation for the future declaration under Provision 29 of the Code and
ensuring that established processes continue to support effective execution of
the Group's strategy. The Board will also remain alert to emerging risks,
including those relating to tenant performance, operational resilience and
corporate activity, and will respond as appropriate should conditions change.
A review of our principal risks
Corporate risks
1. Strategy and its execution
Risk
Our asset selection or targeted sectors may not always align with the current
economic climate, market cycle or occupier needs. External factors or
ineffective implementation of strategy may prevent us from achieving our
goals.
Impact
Our financial performance and growth objectives may be negatively impacted.
Mitigation
· Our investment approach focuses on income growth by directing resources
into sectors supported by broad economic trends, evolving consumer preferences
and demographics, with an emphasis on assets that are essential to occupiers.
· By leveraging a wide ranging network, thorough research and strong
connections with tenants, we gather essential market insights to aid effective
strategic decisions.
· The Senior Leadership Team has extensive experience to manage the
essential operational and financial elements that drive the business forward
and with a streamlined organisational structure we can quickly identify market
changes, evaluate developing risks and efficiently manage operational
activities.
· The Board regularly reviews strategy and objectives to ensure continued
alignment with evolving market conditions, structural trends and technological
developments.
· The portfolio is continually analysed to take into consideration sector
weightings, tenant and geographical concentrations, perceived threats and
market changes, asset management opportunities and other factors.
· Robust transactional controls are maintained and the Board is kept
regularly updated on significant activity.
Commentary
The Group's income-led strategy and focus on structurally supported sectors
continue to guide capital allocation during a challenging investment market.
Activity levels during this year and last were exceptionally high, reflecting
the execution of strategy through accretive corporate activity alongside
disciplined portfolio optimisation, despite constrained market liquidity.
Against a subdued and uncertain transactional backdrop, the Group has
continued to refine sector exposure, tenant mix and asset quality in line with
strategic objectives.
This year total acquisitions amounted to £333 million on a stand-alone
basis and £1.5 billion including M&A activity, while disposals totalled
£318 million. Income lost on disposals broadly matched income acquired on a
like for like basis, even though higher yielding assets were generally sold.
Since the acquisition of LXi two years ago, to March 2026, £327 million or
12% of the original portfolio has been sold, representing significant progress
in reducing non core exposure, alongside £72 million of ULR assets since
June sold at prices in line with underwritten values. Sales of poorer quality
and vacant assets have reduced reletting risk and ongoing void costs.
Year ahead
The Group will remain disciplined as it continues to optimise the enlarged
portfolio, recycling capital from non core assets where appropriate and
deploying selectively into opportunities that meet return and risk
requirements. While direct market liquidity remains uneven, the Group's scale,
income characteristics and proven execution capability provide flexibility to
remain patient and opportunistic.
Appetite
Low. The Board has a low appetite for misalignment between strategy and
execution. Capital is allocated selectively to assets and sectors that support
long term income growth, with disciplined execution, portfolio alignment and
sustainable compounding rather than simply growing assets under management.
Change in the year
Increased risk. The level of risk has increased due to the scale and pace of activity undertaken in a more challenging and illiquid investment environment. This reflects greater external complexity rather than any diminution in execution capability or strategic clarity.
2. Major event
Risk
Unexpected events on a national, regional or global scale - including
financial crises, pandemics, conflicts, terrorism, or political and economic
developments - may cause market downturns, sector instability or significant
business disruption.
Impact
Our competitive advantage could be diminished, potentially impacting our
financial performance.
Mitigation
· The Board assesses the external operating environment and its
implications on capital markets, occupier demand and portfolio resilience,
using this analysis to inform capital allocation and investment decisions.
· We focus on the controllable aspects of the business through disciplined
portfolio management, maintaining a broad mix of tenants to diversify risk,
keeping vacancies low and investing in well located UK properties across
structurally supported sectors.
· Building strong relationships with occupiers helps us to understand
tenant needs and stay informed about market trends and emerging risks. This
allows us to offer assets that consistently attract occupiers, supporting
steady income and lasting value.
· Our capital and funding strategy is kept under regular review and we
maintain flexible funding arrangements from a diverse lender pool, with
significant covenant headroom, low leverage and an investment grade credit
profile.
· Development exposure remains limited in the current economic environment
with no speculative development activity.
· The property portfolio is protected by appropriate insurance cover.
Commentary
The external environment has become increasingly uncertain, shaped by
heightened geopolitical tension, ongoing conflict in Ukraine and the Middle
East, persistent inflationary pressures and the risk of further disruption to
capital markets and global trade. Such events can have rapid and unpredictable
effects on sentiment, liquidity and occupier behaviour, even where underlying
property fundamentals remain sound.
In response, the Group has continued to focus on strengthening the resilience
of the elements of the business that are within its control. Capital
allocation decisions during the year reflected a cautious and disciplined
approach to market risk, prioritising income durability, asset quality and
flexibility over short term growth. Significant progress in reducing non core
exposure and vacancy risk has improved portfolio robustness, while the focus
on mission critical assets that are integral to occupiers' core operations
continues to support stable cash flows during periods of disruption.
The Group's scale, diversification and measured approach to execution provide
a degree of insulation against major external shocks. These characteristics,
alongside active oversight by the Board of the evolving risk environment,
position the business to remain operationally and financially resilient as
conditions continue to change.
Year ahead
The external environment is expected to remain volatile, with the potential
for further geopolitical, economic and market driven disruption. The Group
will continue to focus on the areas it can control, maintaining portfolio and
income resilience, preserving balance sheet flexibility and retaining the
ability to adjust capital allocation and management actions promptly as
conditions evolve. The Board will keep the potential implications of major
external events under close review as part of ongoing strategic and capital
allocation decisions.
Appetite
Low. Events of this nature are inherently outside the Board's control. The
Board's appetite is therefore focused on maintaining a resilient portfolio and
financing structure that can absorb shocks and limit potential adverse
impacts. The evolving risk environment is monitored closely, with adjustments
made where necessary.
Change in the year
Increased risk. The risk has increased due to escalating geopolitical conflict, continued instability in Ukraine and the Middle East, heightened global trade and capital market tensions, UK political instability and the increasing prevalence of disinformation, all of which elevate uncertainty and the potential for sudden external shocks.
3. People
Risk
The Group relies on a relatively small team of highly motivated individuals
whose skills and experience are critical to the effective leadership of the
business, capital allocation discipline and the execution of strategy. The
ability to attract, motivate and retain high calibre individuals, particularly
in senior roles, is essential to the Group's continued success.
Impact
Our financial performance and ability to deliver long term value for
shareholders may be adversely affected if we are unable to retain key skills,
leadership capability and organisational momentum.
Mitigation
· Competitive remuneration structures are in place, with employees
participating in long term incentive arrangements that support retention,
encourage long term performance and foster an ownership culture. Staff
turnover remains low.
· Employee engagement and culture are monitored through annual staff
satisfaction surveys, with results reviewed and actions considered as
appropriate by senior management and the Board.
· The designated workforce Non Executive Director holds annual round table
discussions with a cross section of employees to gather feedback and insights,
with key themes reported to the Board.
· Performance management and development are supported through annual
appraisals, providing a structured forum to discuss objectives, performance,
and development needs, supplemented by ongoing dialogue with line managers.
· The Senior Leadership Team actively promotes talent development below
Board level, supporting succession planning and organisational resilience.
· External specialist support is engaged where appropriate to complement
internal capability.
Commentary
We value a culture of empowerment, inclusion, openness and teamwork, which has
supported strong engagement and retention during a period of sustained
business change. Over the last three years the Group has completed four public
company takeovers, growing assets from £3.0 billion to £7.6 billion and
increasing contracted rent from £145 million to £432 million, placing
increased demands on leadership, organisational capability and culture.
This year we welcomed four colleagues following the acquisition of ULR, all of
whom have transitioned successfully and are fully embedded in the business.
Continued growth and scale create further opportunities for professional
development, supporting LondonMetric's position as an attractive place to
work.
Staff survey results remain highly positive, with 94% of employees saying that
they enjoy working at LondonMetric. This independent evidence is consistent
with feedback reported to the Board by the workforce Non Executive Director
following informal employee engagement.
Succession planning remains a key focus for the Board and the Senior
Leadership Team. Following Valentine Beresford's decision to retire at the
year end, Will Evers was appointed sole Head of Investment. The investment and
property leadership team continues to operate collaboratively, ensuring
continuity of expertise, clear accountability and disciplined capital
allocation, underpinned by strong economic alignment with long term
shareholder interests.
Year ahead
Resourcing will be kept under review, alongside continued system enhancements
to streamline processes and further improve operational efficiency.
Appetite
Low. The Board has a low appetite for risks that could undermine effective
leadership, specialist expertise, succession planning or organisational
culture, recognising these as critical to the delivery of strategy and long
term value.
Change in the year
No significant change. While organisational scale and demands increased during the year, strong retention, engagement and succession planning have mitigated any increase in people-related risk.
4. Systems, processes and financial management
Risk
The effectiveness of the Group's cyber security, the integrity of its property
and financial systems and the accuracy and timeliness of financial information
supporting decision making and strategy may be compromised.
Impact
Decisions may be made on inaccurate or incomplete information and external
reporting may be misstated or delayed. Cyber threats may give rise to
significant financial losses, reputational harm and disruption to business
continuity.
Mitigation
· A strong controls culture is maintained across the business, supported by
appropriate segregation of duties and controls over financial systems. Robust
data capture and validation processes underpin the integrity and accuracy of
the Group's property database and financial records.
· Management information and financial performance are monitored through
regular reporting with management accounts reviewed by senior management and
the Board. Variances to forecast are analysed and reported supporting
effective oversight and informed decision making.
· Cost management and expenditure controls ensure spending is appropriate,
authorised and subject to ongoing monitoring.
· Corporate acquisitions are subject to comprehensive due diligence to
identify differences in accounting policies, processes, systems and controls.
Following completion, enhanced controls and oversight are implemented where
required prior to full integration.
· IT resilience and cyber security are supported through a business
continuity framework, independent third party testing and ongoing staff
training, with cyber risk and control effectiveness kept under regular review.
Commentary
During the year, the Group successfully integrated the ULR and Highcroft
acquisitions from a systems, financial reporting and controls perspective.
Financial data and key processes were migrated onto LondonMetric's established
systems, with enhanced oversight and controls implemented where required to
support consistency, accuracy and timely reporting across the enlarged Group.
As part of this, management continued the migration of rent billing activity
in‑house, improving control over billing processes, data quality and the
timeliness of financial information. These changes have increased resilience
and reduced reliance on third party providers while supporting more effective
portfolio and cash flow management.
The Group also made progress in strengthening the documentation and
consistency of key financial and operational controls in preparation for the
future material controls declaration under Provision 29. The Audit Committee
reviewed management's assessment of the design and implementation of key
internal controls across financial, operational, reporting and compliance
areas and no significant weaknesses were identified.
Cyber and IT risks continue to receive focused management and Board oversight.
System resilience and cyber security are supported through a business
continuity framework, independent testing and ongoing staff training with the
Audit Committee receiving regular updates on control effectiveness in this
area.
Year ahead
The programme of work to strengthen, document and evidence the Group's systems
and internal controls will continue with a focus on completing process
mapping, refining control documentation, progressing the testing of material
controls and embedding consistency across the enlarged Group. Progress,
including the development of appropriate assurance and monitoring approaches,
will continue to be overseen by management and reviewed by the Audit
Committee.
Appetite
Low. The Board has a low appetite for risks that could compromise the
integrity, accuracy or timeliness of financial and property information, the
effectiveness of internal controls, or the resilience of the Group's IT and
cyber environment.
Change in the year
No significant change. While system integration and control documentation activity increased following corporate acquisitions, no material weaknesses were identified and overall risk levels remain unchanged.
5. Responsible business and sustainability
Risk
Failure to adhere to responsible business practices or to effectively identify
and manage climate-related risks.
Impact
Non-compliance could result in reputational damage, reduced asset
desirability, increased costs, lower income resilience or restricted access to
capital.
Mitigation
· Supported by external specialists, we monitor developments in regulation,
stakeholder expectations and best practice relating to sustainability,
environmental matters and social impact to inform strategy and decision
making.
· Clear accountability for responsible business obligations sits with
members of the Senior Leadership Team, supported by a Responsible Business
Working Group that meets regularly and reports to the Audit Committee with
material issues escalated to the Board as appropriate.
· Sustainability objectives and performance targets are set, monitored and
reported. Energy performance across the portfolio is managed to comply with
current and future Minimum Energy Efficiency Standards ('MEES'), supporting
asset quality, lettability and long term liquidity.
· Environmental and climate-related risks are assessed across the
portfolio, supported by targeted studies, data analysis and appropriate
training.
· Regular engagement with occupiers and other stakeholders informs
priorities and expectations and supports a collaborative approach to
responsible business outcomes.
· We work with tenants to enhance the resilience of assets and occupier
business models in response to climate-related risks while also considering
the Group's impact on local communities.
· Contractors and suppliers are required to comply with the Group's
responsible development and sustainability requirements.
Commentary
During the year, the Group made further progress in strengthening its approach
to responsible business and the management of climate-related risks across the
enlarged portfolio. Detailed analysis was undertaken and our Net Zero Pathway
refreshed to encompass assets acquired. The update and relevance of our ESG
KPIs were presented to the Audit Committee to ensure our targets remain
appropriate, credible and aligned with the Group's strategy and risk appetite.
The Group continues to monitor the environmental impact of its activities,
having 72% coverage of occupier emissions and it remains carbon neutral for
Scope 1 and 2 landlord emissions. Energy performance has continued to improve,
with EPC A-C rated assets maintained at 92% of the portfolio and A-B
increasing to 60%, supporting asset quality, tenant demand and long term
liquidity.
Flood risk analysis was progressed across the portfolio during the year to
review assets acquired enabling targeted mitigation on higher risk properties.
Engagement with occupiers remains strong and continues to translate into
tangible outcomes, including implementation of sustainability improvements at
lease events and the routine adoption of green clauses on new leases and
regears. The annual occupier survey again reported a high landlord
recommendation score of 8.8/10, demonstrating alignment between responsible
business outcomes and tenant satisfaction. This alignment also resulted in an
additional 1.9MWp of solar capacity added to the portfolio from asset
management.
Year ahead
The Group will continue to embed its responsible business priorities into
regular asset management reviews and asset by asset action plans, with a focus
on implementing and monitoring the revised Net Zero Pathway KPIs across the
enlarged portfolio. Portfolio level flood risk will continue to be monitored
to support resilience planning, alongside continued improvement in EPC
performance and collaboration with occupiers on energy efficiency and
sustainability initiatives.
Appetite
Low. The Board has a low tolerance for responsible business and
sustainability-related risks that could adversely impact the Group's
reputation, stakeholder confidence, asset liquidity or access to capital.
Change in the year
No significant change. Although regulatory expectations and climate-related risks are expected to continue to evolve, the Group's overall responsible business risk profile remains stable, supported by improved data, governance and portfolio analysis.
6. Regulatory framework
Risk
Failure to comply with applicable legal and regulatory requirements.
Impact
Failure could result in financial penalties, reputational damage, operational
disruption or restrictions on the Group's ability to execute its strategy.
Mitigation
· Regulatory developments affecting the Group are monitored on an ongoing
basis, supported by external specialist advisors where appropriate.
· The implications of legislative and regulatory change are assessed and
factored into strategic and operational planning.
· Clear accountability for compliance with specific legal and regulatory
obligations is assigned to individual members of the Senior Leadership Team,
with oversight provided by the Board and Audit Committee through regular
reporting and review.
· Employees receive regular training on relevant compliance matters,
including health and safety, cyber awareness, anti‑money laundering, market
abuse, whistleblowing, conduct and ethics.
· Health and safety policies and procedures are kept under regular review,
with audits undertaken on developments and activities to monitor compliance
and support continuous improvement.
· The Group's procurement and supply chain policies set clear standards
relating to labour practices, human rights, environmental matters, pollution
risk and community impact, supporting responsible business practices across
the value chain.
Commentary
While the regulatory environment continues to evolve, including increased
expectations around governance, reporting and sustainability, no significant
regulatory breaches or compliance failures were identified this year.
The Group continued to strengthen its regulatory compliance framework,
supported by clear accountability within the Senior Leadership Team and
regular oversight by the Board and Audit Committee. Experience from prior
acquisitions has been embedded into the Group's existing controls, reinforcing
a consistent approach to regulatory compliance across the enlarged business.
Year ahead
Regulatory expectations relating to governance, reporting and internal
controls are expected to continue to evolve. The Board and Audit Committee
will maintain oversight of management's ongoing programme to strengthen,
document and evidence compliance and control frameworks in preparation for
future regulatory requirements, including the Board declaration on the
effectiveness of material controls required under the UK Corporate Governance
Code 2024.
Any future independent assurance activities in this area, and the evaluation
of outputs arising from them, will be considered by the Audit Committee in the
context of the Group's overall assurance framework and reported to the Board
as appropriate.
Appetite
Low. The Board has a low appetite for regulatory non‑compliance that could
result in harm to stakeholders, damage to assets or reputation, or
restrictions on the execution of strategy.
Change in the year
No significant change. While regulatory requirements continue to evolve, no material compliance failures were identified and the overall level of regulatory risk remains unchanged.
Property risks
7. Investment risk
Risk
We may be unable to source and execute investment opportunities at pricing
levels that meet the Group's return requirements.
Impact
The Group's ability to deploy capital in a disciplined manner and deliver
value and earnings accretive growth in line with its strategy may be
constrained.
Mitigation
· The investment team draw on deep sector experience, market insight and
established relationships to identify and assess investment opportunities
across the market.
· Investment decisions are subject to rigorous governance through a Senior
Leadership Team led Investment Committee, supported by short reporting lines
and active management involvement, enabling timely and well informed decision
making.
· All transactions are assessed against strict pricing, return and risk
criteria with a disciplined approach to underwriting maintained and investment
deferred where pricing does not meet required thresholds.
· The Group's scale and position as a leading consolidator in the UK listed
real estate market provide access to a broad range of corporate and asset
level opportunities, supported by experience in executing and integrating
transactions, while also enabling selectivity and pricing discipline in
assessing potential investments.
· A resilient capital structure, significant undrawn facilities and access
to diversified funding sources support flexibility and optionality, allowing
the Group to remain patient and disciplined until pricing is attractive.
· High levels of contracted and index linked rental income provide income
visibility and allow the Group to remain patient and selective, maintaining
pricing discipline.
Commentary
The investment market has remained challenging during the year, with elevated
and volatile debt costs and cautious market sentiment continuing to weigh on
transaction activity particularly for acquisitions of scale requiring
leverage.
Against this backdrop, the Group has remained highly active, across both
acquisitions and disposals, maintaining a broadly balanced approach to capital
deployment and recycling at a direct asset level. Investment activity has
reflected disciplined capital allocation with decisions focused on
opportunities that met the Group's pricing, income durability and asset
quality requirements.
The Group's scale, sector focus and established relationships have continued
to provide access to opportunities that are less competitive such as sale and
leaseback opportunities, or require execution capability, structuring
expertise or certainty of delivery beyond that of many market participants.
Year ahead
Investment activity is expected to remain selective, with transaction
liquidity and pricing varying significantly by asset type and lot size. The
Group will continue to deploy capital in a disciplined manner.
Appetite
Low. Capital deployment is deliberately paced in response to market
conditions. The Board has a low appetite for deploying capital at pricing that
does not meet the Group's return and risk thresholds and is prepared to remain
patient where market conditions do not support disciplined investment.
Change in the year
Increased risk. Investment risk has increased due to continued volatility in debt markets, constrained transaction liquidity and persistent misalignment between asset pricing and returns that meet the Group's underwriting criteria, particularly in structurally supported sectors.
8. Valuation risk
Risk
The value of the Group's investments may decline.
Impact
A sustained fall in asset values could place pressure on net asset value and,
in very adverse scenarios, on loan to value covenant headroom.
Mitigation
· The Group prioritises sustainable income, through lettings to high
quality tenants across a diversified portfolio of well located assets. Modern,
fit for purpose properties, low vacancy and strong covenants support income
resilience and help moderate valuation volatility in weaker market conditions.
· The portfolio is predominantly aligned to structurally supported sectors,
with negligible exposure to legacy sectors supporting long term asset
relevance and liquidity.
· Active asset management enhances the quality, functionality and
desirability of assets over time. Close engagement with occupiers supports
longer dated income visibility and greater certainty of cash flows.
· Market conditions and property cycle dynamics are continually monitored,
with capital allocation and asset management decisions taken in anticipation
of changing conditions and adjusted where appropriate.
· Asset performance is reviewed regularly on an asset by asset basis,
supported by benchmarking and portfolio analytics.
· Tenant covenant strength and trading performance are monitored to
identify emerging pressures and inform asset level decision making.
· Capital is actively recycled through disposals of weaker sub-sectors and
assets with reinvestment into higher quality opportunities with better income
growth prospects in strong sectors, enabling the portfolio to adapt to
changing market conditions and occupier needs.
Commentary
During the year, management continued to focus on actively reducing valuation
risk through the disposal of non core and lower quality assets, particularly
those with short income profiles, weaker tenant credits or elevated
obsolescence risk. In total, 57 assets were sold for £318 million despite
the challenging market backdrop and uncertainty around liquidity for certain
asset types.
Most of these disposals related to assets acquired through recent corporate
activity that did not align with the Group's long term strategy. While overall
market liquidity remained constrained, the Group continued to see more
consistent buyer depth for smaller lot sizes, particularly where leverage was
not required. This supported execution at or around book values, albeit with
pricing still sensitive to asset quality and sector.
Sales proceeds have been recycled into higher quality properties with stronger
income durability and growth prospects, supporting valuation stability over
the medium term. By focusing on asset quality, income visibility and lot size
liquidity rather than near term yield optimisation, the Group has taken a
measured approach to managing valuation risk in an environment where pricing
remains highly sensitive to interest rates and sentiment.
Year ahead
Valuation conditions are expected to remain uncertain, with pricing discovery
constrained by elevated funding costs and intermittent market liquidity. The
Group will continue to manage valuation risk through a further reduction of
residual non core exposure where appropriate and disciplined capital
allocation with continued focus on income quality and asset relevance rather
than short term yield movements.
Appetite
Low. The Board seeks to minimise valuation risk through disciplined asset
selection and active portfolio management, recognising that property
valuations are inherently subjective and sensitive to changes in interest
rates, sentiment and market liquidity.
Change in the year
Increased risk. Although prime yields in structurally supported sectors have shown some stability, valuation risk has increased due to continued uncertainty around pricing discovery, limited liquidity for larger assets and the heightened sensitivity of values to interest rate movements and market sentiment.
9. Transaction and tenant risk
Risk
Acquisitions and asset management initiatives may be inconsistent with
strategy, due diligence may be inadequate, or tenants may default or fail.
Impact
This could adversely affect financial performance, constrain the delivery of
growth objectives and place pressure on debt covenant headroom in extreme
circumstances.
Mitigation
· Acquisitions and asset management initiatives are subject to
comprehensive due diligence, supported by input from experienced internal
teams and external advisors where appropriate.
· New initiatives are assessed through structured cost benefit and risk
analysis prior to approval and implementation.
· Tenant concentration, covenant strength and trading performance are
considered for all investment and leasing decisions and are monitored on an
ongoing basis thereafter.
· Close engagement with tenants supports early identification of potential
issues, with rent collection and arrears monitored closely to inform proactive
management.
· The Group has a diversified tenant base, with the majority of income
generated from a broad range of occupiers, reducing reliance on individual
tenants. Exposure to bespoke assets is concentrated in a small number of high
quality tenants with strong covenants and long dated income.
· An experienced asset management team works collaboratively with occupiers
to deliver solutions that support tenant performance and help mitigate vacancy
and income risk.
Commentary
During the year, the Group continued to manage transaction and tenant risk
through a combination of income granularity, long dated lease structures and
active, engagement led asset management. Rental income growth was delivered
across lettings, regears and reviews, reflecting the underlying strength of
occupier demand for the Group's assets and the effectiveness of its asset
management approach.
The portfolio benefits from a diversified tenant base and a high proportion of
long dated, contracted income, which limits exposure to individual tenants or
transactions. Where risks do arise, close engagement with occupiers enables
early identification of potential issues and proactive interventions to
protect income continuity and reduce vacancy risk.
While operating conditions are more challenging for some tenants, the Group's
focus on business critical assets, strong covenants and flexible asset
management solutions continues to mitigate the potential impact of tenant
distress on overall performance.
Year ahead
While the external economic environment remains uncertain and cost pressures
may increase stress for some tenants in certain sectors, these factors are not
expected to materially increase overall transaction and tenant risk. This
reflects the diversification of the income base and the Group's proactive
management approach. The focus will remain on tenant engagement, disciplined
transaction execution and early intervention where pressures emerge.
Appetite
Low. The Board has no appetite for risk arising from inadequate due diligence
or poor execution of acquisitions or asset management initiatives. A measured
level of tenant covenant risk and shorter lease lengths may be accepted only
where supported by strong occupational demand, asset flexibility or credible
alternative use.
Change in the year
Increased risk. While portfolio composition and operating performance remain robust, tenant and transaction risk has increased due to a more challenging economic backdrop, rising cost pressures on occupiers and increased uncertainty affecting business confidence.
Financing risks
10. Capital and finance risk
Risk
The Group may have insufficient liquidity or access to available credit, or
may be exposed to rising interest rates.
Impact
This could constrain the implementation of the Group's strategy and adversely
affect financial performance.
Mitigation
· Capital allocation is managed on a disciplined basis, with competition
for capital across the portfolio. Assets are considered for disposal where
future growth prospects are assessed to be limited, supporting liquidity and
balance sheet flexibility.
· The availability, cost and terms of debt are considered as part of long
term capital planning, with relationships maintained across a diversified
group of lenders and funding sources.
· Cash flow and liquidity forecasts are monitored regularly by members of
the Senior Leadership Team, supporting early identification of funding
requirements and pressures.
· The Group operates with a prudent level of gearing and monitors LTV and
covenant headroom on an ongoing basis.
· Financing arrangements incorporate appropriate covenant headroom and cure
rights, and the predominantly unsecured nature of the Group's facilities
provides flexibility.
· Where secured debt inherited through corporate activity is backed by
multiple assets, the implications of asset disposals are assessed and lenders
engaged to facilitate substitutions where appropriate.
· Interest rate exposure is actively managed, with derivatives used
selectively to fix or cap rates in line with the Group's risk appetite.
· Debt maturity profiles are actively managed to avoid concentration risk
and support flexibility over the medium and long term.
Commentary
In December, the Group successfully accessed the public debt capital markets
issuing a debut £500 million unsecured bond. This issuance improved access to
longer term funding, diversified the Group's sources of capital and supported
a return to a predominantly unsecured debt structure.
Building on this, in March the Group completed the refinancing of £1.5
billion of unsecured term loans and revolving credit facilities. The new £1.3
billion syndicated facility and £200 million bilateral facility replaced
nearly all unsecured facilities due to mature over the next four years and
delivered a material enhancement to the Group's debt profile, including
expected savings from lower margins and commitment fees, improved lender
diversification and an extended weighted average debt maturity.
Following the refinancing, only £186 million of debt will mature over the
next two years, which can be met from planned disposals and available undrawn
facilities as the Group retains significant liquidity headroom.
Interest rate risk continues to be managed in line with the Board's risk
appetite. The refinancing was undertaken alongside the Group's existing
hedging strategy, with all drawn debt either fixed or fully hedged, providing
protection against interest rate volatility and supporting the predictability
of finance costs.
Following the year end, a further £350 million of swaps expiring April 2029
were executed at 3.75%.
Year ahead
The Group will continue to actively manage its capital structure to maintain
strong liquidity and covenant headroom while monitoring market conditions for
opportunities to further optimise the cost, maturity and mix of funding. Focus
will remain on preserving flexibility, supporting disciplined capital
allocation and aligning future financing decisions with the Group's strategy
and risk appetite.
Appetite
Low. The Board has no appetite for imprudently low levels of liquidity or
covenant headroom and has very limited appetite for unhedged floating rate
debt, particularly in a volatile interest rate environment.
Change in the year
Decreased risk. During the year, the Group executed a significant refinancing programme that materially strengthened its capital structure, improved funding flexibility and reduced refinancing risk.
Going concern and viability
The Directors have evaluated the Group's prospects and principal risks to
assess both short term and long term viability. Based on the results of this
assessment, they believe that the Group has adequate resources to meet its
liabilities as they fall due over the three year period to 31 March 2029 and
will be able to continue in operation. The assessment of viability is split
into short term and longer term time horizons.
Time period of assessment
Consistent with previous years and in accordance with the UK Corporate
Governance Code 2024, the Board has assessed the prospects of the Group over
the following time horizons:
· Short term - a period of 12 months from the date of this report as
required by the 'Going Concern' provision; and
· Longer term - a period of three years to 31 March 2029 as required by the
'Viability Statement' provision.
Short term assessment
The Directors' short term going concern assessment considered the key models
and metrics used by the Senior Leadership Team to measure and monitor the
Group's liquidity.
These are reviewed at least monthly by the Senior Leadership Team and include
the following key metrics and information:
· The Group's current financial position;
· The short term cash flow forecast;
· The availability of undrawn debt facilities;
· The repayment profile of the Group's debt facilities;
· Potential sources of alternative financing;
· The hedging profile and forecast interest and swap rates;
· Rent collection rates; and
· The lease expiry profile.
The following key financial metrics, which are set out in the Financial review
supported their assessment:
As at 31 March 2026
Loan to value 36.7%
Cost of debt 4.0%
Interest cover (times) 3.8
Undrawn facilities (£m) 515.0
Cash (£m) 143.4
Average debt maturity 4.4 years
Hedging 99.8%
Rent collection in the year 99.7%
Occupancy 97.7%
During the year, the Group raised £1,230.0 million of funding through a
£500.0 million public bond, £150.0 million US private placement and £580.0
million new revolving credit facilities and term loans. The new arrangements
diversified lending sources and were at attractive prices and lower than for
existing comparable facilities. The public bond was rated A- by Fitch and
broadened our access to the public debt market.
The new arrangements allowed the Directors to consider the repayment of more
expensive secured facilities acquired through our acquisitions of LXi and ULR
and also unsecured facilities that were nearing maturity. In total, the Group
was able to repay £1,143.9 million existing debt facilities that were on less
favourable terms or had shorter maturities.
In March 2026, we completed an extensive refinancing exercise of £1.5 billion
revolving credit facilities and term loans. The Group entered into two new
arrangements on similar terms with Lloyds and a syndicate of ten lenders, at
lower margins and extended maturities.
At 31 March 2026, the Group's gearing ratio as defined within its unsecured
facilities, private placement loan notes and public bond, which together
account for 81% of debt drawn, was 67% (maximum 125%) and interest cover was
3.8 times (minimum 1.5 times).
Going Concern Statement
On the basis of this review, together with available market information and
the Directors' experience and knowledge of the portfolio, they have a
reasonable expectation that the Company and the Group can meet its liabilities
as they fall due and has adequate resources to continue in operational
existence for at least 12 months from the date of signing these financial
statements. Accordingly, they continue to adopt the going concern basis in
preparing the financial statements for the year to 31 March 2026.
Longer term assessment
The Board has reviewed the viability assessment period and, as in previous
years, considers the three year period to 31 March 2029 suitable for
evaluating the Group's viability for the following reasons:
· The Group's financial business plan and detailed budgets cover a rolling
three year period;
· It is a reasonable approximation of the time it takes from obtaining
planning permission for a development project to practical completion of the
property; and
· Three years is considered to be the optimum balance between long term
property investment and the difficulty in accurately forecasting ahead given
the cyclical nature of property investment.
Assessment of viability
The Board conducted this review taking account of the Group's business
strategy, principal and emerging risks, financial position.
The Group's three year business model is used to consider future prospects on
a quarterly basis and to stress test assumptions and consider the likely
impact of changes in the principal risks, including:
· Macroeconomic conditions in the domestic and global markets and changes
impacting rental income, property values and finance costs;
· The occupier market and changes impacting occupancy levels;
· The availability of additional funding and interest rate projections; and
· The real estate market conditions impacting investment, divestment and
development opportunities.
Our strategy, which the Board reviews at each of its meetings, focuses on
investing in mission-critical assets and delivering reliable, repetitive and
growing income and dividends over the long term.
This strategy forms the foundation of our business plan and three year
financial forecasting model, incorporating transactions under offer, committed
developments and reinvestment plans. The integrated model forecasts future
earnings, cash flows and net assets, taking into account capital commitments,
dividend cover, loan covenants and REIT compliance metrics. The Senior
Leadership Team provide key strategic input to the financial forecasts
covering investment, divestment and development plans which consider their
impact on earnings and liquidity. Forecasts are reviewed against actual
performance and reported quarterly to the Board.
The business plan was stress tested to ensure it remained resilient to adverse
movements in its principal risks including changes to macroeconomic conditions
that were considered severe but realistic scenarios, both on an individual and
collective basis.
The scenarios considered the likely impact on the Group's longer term
profitability and liquidity and were consistent with previous years as set out
below:
· A 2% increase in interest rates;
· A 5% tenant default rate reducing rent by the equivalent amount; and
· A 5% decline in property valuations.
The modelling indicated that under all scenarios the Group would still be able
to execute its strategic plan and had sufficient reserves to continue in
operation and remain compliant with its debt covenants.
In addition, reverse stress testing was undertaken to determine the
circumstances under which financial covenants would be breached and considered
the following scenarios:
· The amount by which property values would need to fall before the gearing
covenant was breached;
· The amount by which rent would need to fall before the interest cover
covenant was breached; and
· The amount by which interest costs would need to rise before the interest
cover covenant was breached.
Under the Group's unsecured facilities, private placement debt and public
bond, that together account for 81% of the Group's borrowing, the reverse
stress testing indicated the following:
· Property values would need to fall by 27% before the banking gearing
threshold was reached and this would equate to a loan to value ratio of 54%;
and
· Rental income would need to fall by 57% or interest payable rise by 152%
to breach the interest cover covenant.
In conjunction with the modelling undertaken, the Board is mindful of the
following points when assessing the Group's longer term prospects:
· Income certainty, with 69% of the Group's rental income benefitting from
contractual uplifts;
· Income diversity, with only 35% of rent due from our top ten occupiers
and lower than in the previous year;
· Strong rent collection, with 99.7% of rent due in the year collected;
· Strong relationships with debt providers, evidenced by the new £1.2
billion debt arrangements and £1.5 billion refinancing which also diversified
the pool of lenders and debt offering;
· Substantial liquidity, with undrawn debt facilities of £515.0 million at
the year end;
· Significant hedging following post period end transactions which
increased the percentage of debt drawn at the year end hedged to 99.8%,
mitigating future interest rate risk and volatility;
· The Group's proven track record of executing transactions, including
sizeable corporate acquisitions and successful subsequent integration, making
good sector choices and growing income even in uncertain and challenging
times; and
· The Group's ability to be flexible and react to changes in the
macroeconomic and property markets, including the ability to transact through
M&A opportunities.
This testing, combined with the Group's strong financial position and
mitigation actions available including deferring non committed capital
expenditure and selling assets, supports the Group's ability to weather
unexpected and adverse economic and property market conditions over the longer
term viability period.
Viability Statement
Based on the results of their assessment, the Directors have a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due over the three year viability period to 31
March 2029.
Directors' Responsibilities Statement
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
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 UK-adopted international accounting
standards in conformity with the requirements of the Companies Act 2006. The
financial statements also comply with International Financial Reporting
Standards ('IFRSs') as issued by the International Accounting Standards Board.
The Directors have elected to prepare the Company financial statements in
accordance with Financial Reporting Standard 101 ('FRS 101') 'Reduced
Disclosure Framework'. Under Company law the Directors must not approve the
accounts unless they are satisfied that they give a true and fair view of the
state of affairs of the Company and of the profit or loss of the Company for
that period.
In preparing the Company financial statements, the Directors are required to:
· Select suitable accounting policies and then apply them consistently;
· Make judgements and accounting estimates that are reasonable and prudent;
· State whether applicable FRS 101 'Reduced Disclosure Framework' has been
followed, subject to any material departures disclosed and explained in the
financial statements; and
· Prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
In preparing the Group financial statements, International Accounting Standard
1 requires that Directors:
· Properly select and apply accounting policies;
· Present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
· Provide additional disclosures when compliance with the specific
requirements in IFRSs are insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the entity's
financial position and financial performance; and
· Make an assessment of the Company's ability to continue as a going
concern.
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 Company and to
enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company
and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
· The financial statements, prepared in accordance with the relevant
financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole;
· The Strategic report includes a fair review of the development and
performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face; and
· 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 performance, business model and strategy.
By order of the Board
Andrew Jones
Chief Executive
21 May 2026
Martin McGann
Chief Financial Officer
21 May 2026
Group income statement
For the year ended 31 March
Note 2026 2025
£m
£m
Revenue 3 464.6 396.7
Cost of sales (6.4) (4.9)
Net income 458.2 391.8
Administrative costs 4a (30.2) (27.1)
Goodwill impairment 15c (9.6) -
Acquisition costs 15c (16.3) -
Profit on revaluation of investment properties 68.2 106.0
(Loss)/profit on revaluation of investments (3.6) 0.9
Loss on sale of investment properties (19.0) (13.0)
Share of profits of joint ventures 10 4.7 6.1
Operating profit 452.4 464.7
Finance income 5a 18.0 23.7
Finance costs 5b (173.3) (135.6)
Profit before tax 297.1 352.8
Taxation 6 (1.7) (2.2)
Profit for the year 295.4 350.6
Attributable to:
Equity shareholders 295.7 347.9
Non-controlling interest 20b (0.3) 2.7
Earnings per share
Basic 8b 13.0p 17.1p
Diluted 8b 13.0p 17.0p
Group statement of comprehensive income
For the year ended 31 March
Note 2026 2025
£m
£m
Profit for the year 295.4 350.6
Foreign exchange translation loss (0.6) (0.4)
Other comprehensive expense for the year (0.6) (0.4)
Total comprehensive income for the year 294.8 350.2
Attributable to:
Equity shareholders 295.1 347.5
Non-controlling interest (0.3) 2.7
All amounts relate to continuing activities. There are no items in other
comprehensive income that will not be reclassified to profit and loss.
Group balance sheet
As at 31 March
Note 2026 2025
£m
£m
Non current assets
Investment properties 9a 7,819.0 6,383.9
Investment in equity accounted joint ventures 10 67.5 71.9
Other investments and tangible assets 33.2 21.7
Derivative financial instruments 14c 16.2 23.7
7,935.9 6,501.2
Current assets
Assets held for sale 9b 47.8 10.4
Trading properties 1.1 1.1
Trade and other receivables 11 27.9 13.7
Cash and cash equivalents 12 143.4 81.2
220.2 106.4
Total assets 8,156.1 6,607.6
Current liabilities
Trade and other payables 13 181.6 142.5
Bank borrowings 14a(i) 92.8 347.7
Other financial liabilities 14a(ii) 9.4 9.0
Lease liabilities 16 0.8 0.7
284.6 499.9
Non current liabilities
Bank borrowings 14a(i) 2,844.8 1,710.9
Other financial liabilities 14a(ii) 227.7 222.0
Lease liabilities 16 54.8 40.8
Deferred tax 6 11.3 10.1
3,138.6 1,983.8
Total liabilities 3,423.2 2,483.7
Net assets 4,732.9 4,123.9
Equity
Called up share capital 17,18 234.4 204.8
Share premium 17,18 451.0 425.9
Capital redemption reserve 18 9.6 9.6
Other reserve 18 2,858.3 2,317.7
Retained earnings 18 1,161.0 1,136.2
Equity shareholders' funds 4,714.3 4,094.2
Non-controlling interest 20b 18.6 29.7
Total equity 4,732.9 4,123.9
IFRS net asset value per share 8c 202.7p 202.4p
The financial statements were approved and authorised for issue by the Board
of Directors on 21 May 2026 and were signed on its behalf by:
Martin McGann
Chief Financial Officer
Registered in England and Wales, No 7124797
Group statement of changes in equity
For the year ended 31 March
Note Share Share Capital redemption Other Retained Equity Non-controlling Total
capital
premium
reserve
reserves¹
earnings
shareholders'
interest
equity
£m
£m
£m
£m
£m funds
£m
£m
£m
At 1 April 2025 204.8 425.9 9.6 2,317.7 1,136.2 4,094.2 29.7 4,123.9
Profit/(loss) for the year - - - - 295.7 295.7 (0.3) 295.4
Other comprehensive expense in the year - - - (0.6) - (0.6) - (0.6)
Total comprehensive (expense)/income for the year - - - (0.6) 295.7 295.1 (0.3) 294.8
Share issue on acquisition 28.2 - - 540.3 - 568.5 - 568.5
Purchase of shares held in Employee Benefit Trust - - - (3.1) - (3.1) - (3.1)
Vesting of shares held in Employee Benefit Trust - - - 4.0 (4.8) (0.8) - (0.8)
Distribution to non-controlling interest 20b - - - - - - (10.8) (10.8)
Share based awards - - - - 5.7 5.7 - 5.7
Dividends 7 1.4 25.1 - - (271.8) (245.3) - (245.3)
At 31 March 2026 234.4 451.0 9.6 2,858.3 1,161.0 4,714.3 18.6 4,732.9
1 Other reserves include merger relief reserve, Employee Benefit Trust
shares and a foreign currency exchange reserve as set out in note 18
Note Share Share Capital redemption Other Retained Equity Non-controlling Total
capital
premium
reserve
reserves¹
earnings
shareholders'
interest
equity
£m
£m
£m
£m
£m
funds
£m
£m
£m
At 1 April 2024 203.7 404.7 9.6 2,332.4 991.1 3,941.5 28.0 3,969.5
Profit for the year - - - - 347.9 347.9 2.7 350.6
Other comprehensive expense for the year - - - (0.4) - (0.4) - (0.4)
Total comprehensive (expense)/income for the year - - - (0.4) 347.9 347.5 2.7 350.2
Purchase of shares held in Employee Benefit Trust - - - (18.2) - (18.2) - (18.2)
Vesting of shares held in Employee Benefit Trust - - - 3.9 (4.4) (0.5) - (0.5)
Distribution to non-controlling interest 20b - - - - - - (1.0) (1.0)
Share based awards - - - - 5.3 5.3 - 5.3
Dividends 7 1.1 21.2 - - (203.7) (181.4) - (181.4)
At 31 March 2025 204.8 425.9 9.6 2,317.7 1,136.2 4,094.2 29.7 4,123.9
1 Other reserves include merger relief reserve, Employee Benefit Trust
shares and a foreign currency exchange reserve as set out in note 18
Group cash flow statement
For the year ended 31 March
Note 2026 2025
£m
£m
Cash flows from operating activities
Profit before tax 297.1 352.8
Adjustments for non cash items:
Profit on revaluation of investment properties (68.2) (106.0)
Loss/(profit) on revaluation of investments 3.6 (0.9)
Loss on sale of investment properties 19.0 13.0
Share of post tax profit of joint ventures (4.7) (6.1)
Movement in lease incentives (51.2) (47.9)
Share based payment 5.7 5.3
Goodwill 9.6 -
Net finance costs 155.3 111.9
Cash flows from operations before changes in working capital 366.2 322.1
Change in trade and other receivables 6.1 7.9
Change in trade and other payables (1.3) (12.5)
Cash flows from operations 371.0 317.5
Tax paid (8.8) (0.6)
Cash flows from operating activities 362.2 316.9
Investing activities
Net cash paid for the acquisition of Highcroft (1.7) -
Net cash paid for the acquisition of ULR 15c (162.2) -
Purchase of investment and development properties (396.6) (296.1)
Capital expenditure on investment properties (25.2) (32.9)
Purchase of investments and tangible assets (24.0) (19.3)
Lease incentives paid (1.4) (8.2)
Sale of investment properties 282.6 322.7
Distributions from joint ventures 10 9.1 3.4
Interest received 15.6 22.5
Net cash used in investing activities (303.8) (7.9)
Financing activities
Dividends paid 7 (245.3) (181.4)
Distribution to non-controlling interest 20b (10.8) (1.0)
Purchase of shares held in Employee Benefit Trust (3.1) (18.2)
Settlement of shares held in Employee Benefit Trust (0.8) (0.5)
New borrowings and amounts drawn down 19 3,149.9 406.8
Repayment of loan facilities 19 (2,734.0) (423.5)
Purchase of derivative financial instruments (1.0) (2.2)
Financial arrangement fees and break costs (11.8) (10.9)
Lease liabilities and other financial liabilities paid (12.7) (10.1)
Interest paid (126.6) (98.7)
Net cash from/(used in) financing activities 3.8 (339.7)
Net increase/(decrease) in cash and cash equivalents 19 62.2 (30.7)
Opening cash and cash equivalents 81.2 111.9
Closing cash and cash equivalents 143.4 81.2
Notes forming part of the Group financial statements
1 Material accounting policy information
The financial information set out herein does not constitute the Company's
statutory accounts for the years ended 31 March 2026 or 31 March 2025 but is
derived from those accounts. Statutory accounts for the years ended 31 March
2026 and 31 March 2025 have been reported on by the independent auditor. The
independent auditor's reports on the Annual Report and financial statements
for 2026 and 2025 were unqualified, did not draw attention to any matters by
way of emphasis and did not contain a statement under 498(2) or 498(3) of the
Companies Act 2006. Statutory accounts for the year ended 31 March 2025 have
been filed with the Registrar of Companies. The statutory accounts for the
year ended 31 March 2026 will be delivered to the Registrar following the
Company's Annual General Meeting. The financial information set out in this
results announcement has been prepared using the recognition and measurement
principles of International Accounting Standards, International Financial
Reporting Standards and Interpretations issued by the IASB. The accounting
policies adopted in this results announcement are consistent with those used
in preparing the financial statements for the year ended 31 March 2026, which
are the same as those used in the financial statements for the year ended 31
March 2025.
a) General information
LondonMetric Property Plc is a company incorporated in the United Kingdom
under the Companies Act and is registered in England. The address of the
registered office is One Curzon Street, London, W1J 6HB. The principal
activities of the Company and its subsidiaries ('the Group') and the nature of
the Group's operations are set out in the Chief Executive's review and the
Property review.
b) Statement of compliance
The consolidated financial statements have been prepared in accordance with
UK-adopted international accounting standards in conformity with the
requirements of the Companies Act 2006 and with International Financial
Reporting Standards ('IFRS') as issued by the IASB.
c) Going concern
The Board has continued to pay particular attention to the appropriateness of
the going concern basis in preparing these financial statements and its
detailed assessment is set out in the Going Concern and Viability review.
Having performed a detailed assessment, the Directors consider the going
concern assumption for the 12 month period from signing these financial
statements to be appropriate. The assessment considers the principal risks and
uncertainties facing the Group's activities, future development and
performance. A key consideration is the Group's financial position, cash flows
and liquidity, including its access to debt facilities and headroom under
financial loan covenants, which is discussed in detail in the Financial
review.
d) Basis of preparation
The financial statements are prepared on a going concern basis, as explained
above. The functional currency of the Company and the presentational currency
of the Group is sterling. The functional currency of all subsidiaries except
for the Group's German operations is sterling. Euro denominated results of the
German operations have been converted to sterling initially at the applicable
exchange rate ruling on the transaction date.
Foreign exchange gains and losses from settling transactions are reflected in
the income statement, and from retranslating assets and liabilities held in
foreign currencies in other comprehensive income and accumulated in the
foreign currency translated reserve. Exchange differences recognised in this
reserve are reclassified to profit or loss on disposal of the relevant foreign
operation. Assets and liabilities are retranslated at the period end rate and
income and expenses are retranslated at the average rate. The principal
exchange rate used to translate foreign currency denominated assets and
liabilities at the year end and the net income for the year was £1= €1.14.
The financial statements are prepared on the historical cost basis except that
investment and development properties and derivative financial instruments are
stated at fair value.
The accounting policies have been applied consistently in all material
respects except for the adoption of new and revised standards as noted below.
i) Significant accounting estimates and judgements
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience
and other factors that are considered to be relevant. Actual results may
differ from these estimates.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period. If the revision
affects both current and future periods, the change is recognised over those
periods.
The accounting policies subject to significant judgements and estimates are
considered by the Audit Committee and are as follows:
Significant areas of estimation uncertainty
Property valuations
The valuation of the property portfolio is a critical part of the Group's
performance. The Group carries the property portfolio at fair value in the
balance sheet and engages professionally qualified external valuers to
undertake six monthly valuations.
The determination of the fair value of each property requires, to the extent
applicable, the use of estimates and assumptions in relation to factors such
as estimated rental value and current market rental yields. In addition, to
the extent possible, the valuers make reference to market evidence of
transaction prices for similar properties. Whilst there are other inputs into
the valuation of the property portfolio, these are not considered to be
significant areas.
The fair value of a development property is determined by using the 'residual
method', which deducts all estimated costs necessary to complete the
development, together with an allowance for development risk, profit and
purchasers' costs, from the fair valuation of the completed property.
Note 9(c) to the financial statements includes further information on the
valuation techniques, sensitivities and inputs used to determine the fair
value of the property portfolio.
Significant areas of judgement
Significant transactions
Some property transactions are large or complex and require management to make
judgements when considering the appropriate accounting treatment. These
include acquisitions of property through corporate vehicles, which could
represent either asset acquisitions or business combinations under IFRS 3.
Other complexities include conditionality inherent in transactions and other
unusual terms and conditions. There is a risk that an inappropriate approach
could lead to a misstatement in the financial statements.
Management applied judgement to three corporate acquisitions made during the
year and determined the following:
· The acquisition of Highcroft Investments plc ('Highcroft') was an asset
acquisition rather than a business combination, as no processes or workforce
were acquired and substantially all of the fair value of the net assets
acquired was represented by investment properties; and
· The acquisitions of Urban Logistics REIT Plc ('ULR') and Logistics Asset
Management Newco Limited, which held the investment advisory contract for ULR,
were both considered to be business combinations in accordance with IFRS 3 as
in addition to the property portfolio and debt facilities acquired, a team of
four employees, an investment advisory contract and all of its operating
processes were transferred.
ii) Adoption of new and revised standards
Standards and interpretations effective in the current period
During the year, the following new and revised standards and interpretations
have been adopted and have not had a material impact on the amounts reported
in these financial statements.
Name Description
Amendments to IAS 21 Lack of exchangeability
iii) Standards and interpretations in issue not yet adopted
The IASB and the International Financial Reporting Interpretations Committee
have issued the following standards and interpretations, as at the date of
this report, that are mandatory for later accounting periods and which have
not been adopted early. The Directors do not expect that the adoption of the
standards listed below will have a material impact on the financial statements
of the Group in future periods, except in respect of IFRS 18 as noted below.
Name Description
Amendments to IFRS 9 and IFRS 7 Amendments to the classification and measurement of financial instruments
Annual Improvements to IFRS Accounting Standards Volume 11
IFRS 18 Presentation and disclosures in financial statements
IFRS 19 Subsidiaries without public accountability: disclosures
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1
unchanged and complementing them with new requirements. In addition, some IAS
1 paragraphs have been moved to IAS 8 and IFRS 7. Furthermore, the IASB has
made minor amendments to IAS 7 and IAS 33 Earnings per Share.
IFRS 18 introduces new requirements to:
· Present specified categories and defined subtotals in the statement of
profit or loss;
· Provide disclosures on management-defined performance measures in the
notes to the financial statements; and
· Improve aggregation and disaggregation.
An entity is required to apply IFRS 18 for annual reporting periods beginning
on or after 1 January 2027, with earlier application permitted. The amendments
to IAS 7 and IAS 33, as well as the revised IAS 8 and IFRS 7, become effective
when an entity applies IFRS 18. IFRS 18 requires retrospective application
with specific transition provisions.
The Group is assessing the impact of IFRS 18 and expect it will significantly
impact presentation and disclosure in the financial statements including, but
not limited to, profit or loss categorisation, aggregation and disaggregation
and management defined performance measures.
iv) Consideration of climate change
In preparing the consolidated financial statements, the Directors have
considered the impact of climate change, particularly in the context of risk
identified in the TCFD disclosures. There has been no material impact
identified on the financial reporting judgements and estimates. In particular,
the Directors have considered the impact of climate change in respect of the
following areas:
· Going Concern and the Viability Statement;
· Impact on the carrying value and useful economic lives of property and
other tangible assets; and
· Preparation of budgets and cash flow forecasts.
Given no material risks have been identified as per the assessment outlined in
the TCFD report, no climate change-related impact was identified. The
Directors are, however, aware of the changing nature of risks associated with
climate change and will regularly assess these risks against judgements and
estimates made in the preparation of the Group's financial statements. Climate
risk forms part of the annual risk assessment undertaken by the Audit
Committee on behalf of the Board.
e) Basis of consolidation
i) Subsidiaries
The consolidated financial statements include the accounts of the Company and
its subsidiaries. Subsidiaries are those entities controlled by the Group.
Control is assumed when the Group:
· Has the power over the investee;
· Is exposed, or has rights, to variable returns from its involvement with
the investee; and
· Has the ability to use its power to affect its returns.
In the consolidated balance sheet, the acquiree's identifiable assets,
liabilities and contingent liabilities are initially recognised at their fair
value at the acquisition date. The results of subsidiaries are included in the
consolidated financial statements from the date that control commences until
the date that control ceases.
ii) Joint ventures
Joint arrangements are those entities over whose activities the Group has
joint control. The Group's joint venture is a type of joint arrangement in
which the partners have rights to the net assets.
Joint ventures are accounted for under the equity method, whereby the
consolidated balance sheet incorporates the Group's share of the net assets of
its joint ventures and the consolidated income statement incorporates the
Group's share of joint venture profits after tax. The Group's joint ventures
adopt the accounting policies of the Group for inclusion in the Group
financial statements. Joint venture management fees are recognised as income
in the accounting period in which the service is rendered.
iii) Non-controlling interest
The Group's non-controlling interest ('NCI') represents a 31% shareholding in
LMP Retail Warehouse JV Holdings Limited, which owns a portfolio of retail
assets.
The Group consolidates the results and net assets of its subsidiary in these
financial statements and reflects the non-controlling interests' share within
equity in the consolidated balance sheet and allocates to the non-controlling
interest their share of profit or loss for the period within the consolidated
income statement.
iv) Alternative performance measures
Our portfolio is a combination of properties that are wholly owned by the
Group and part owned through joint venture arrangements or where a third party
holds a non-controlling interest. Management reviews the performance of the
Group's proportionate share of assets and returns and considers the
presentation of information on this basis helpful to stakeholders as it
aggregates the results of all the Group's property interests which under IFRS
are required to be presented across a number of line items in the financial
statements.
The Group uses alternative performance measures based on the European Public
Real Estate Association ('EPRA') Best Practice Recommendations ('BPR') to
supplement IFRS, in line with best practice in our sector, as they highlight
the performance of the Group's property rental business and aid the
comparability of financial information across public real estate companies.
These measures are alternative performance measures as they are not defined
under IFRS. The supplementary notes include other EPRA metrics and a
proportionally consolidated EPRA income statement and balance sheet. Further
details, definitions and reconciliations between EPRA measures and the IFRS
financial statements can be found in note 8 to the financial statements,
Supplementary notes i to vii and xviii, and in the Glossary.
v) Business combinations
Where properties are acquired through corporate acquisitions and there are no
significant assets or liabilities other than property, the acquisition is
treated as an asset acquisition.
Where a business acquisition reflects an integrated set of activities and
assets capable of being conducted and managed for the purpose of providing
goods or services to customers, the acquisition accounting method is used.
The cost of the acquisition is measured at the aggregate of the fair values of
assets and liabilities acquired and equity instruments issued by the Group in
exchange for control of the acquiree. Acquisition costs are recognised in the
income statement as incurred.
Any excess of the purchase price of business combinations over the fair value
of the assets, liabilities and contingent liabilities acquired is recognised
as goodwill. This is recognised as an asset and is reviewed for impairment at
least annually. Any impairment is recognised immediately in the income
statement.
Any deficit of the purchase price of business combinations over the fair value
of the assets, liabilities and contingent liabilities acquired is recognised
as a gain on acquisition in the income statement.
f) Property portfolio
i) Investment properties
Investment properties are properties owned or leased by the Group which are
held for long term rental income and for capital appreciation. Investment
property includes property that is being constructed, developed or redeveloped
for future use as an investment property. Investment property is initially
recognised at cost, including related transaction costs. It is subsequently
carried at each published balance sheet date at fair value on an open market
basis as determined by professionally qualified independent external valuers.
Changes in fair value are included in the income statement.
Where a property held for investment is appropriated to development property,
it is transferred at fair value. A property ceases to be treated as a
development property on practical completion. In accordance with IAS 40
Investment Properties, no depreciation is provided in respect of investment
properties.
Investment property is recognised as an asset when:
· It is probable that the future economic benefits that are associated with
the investment property will flow to the Group; and
· The cost of the investment property can be measured reliably.
All costs directly associated with the purchase and construction of a
development property are capitalised. Capital expenditure that is directly
attributable to the redevelopment or refurbishment of investment property, up
to the point of it being completed for its intended use, is included in the
carrying value of the property.
ii) Assets held for sale
An asset is classified as held for sale if its carrying amount is expected to
be recovered through a sale transaction rather than through continuing use.
This condition is regarded as met only when the sale is highly probable, the
asset is available for sale in its present condition and management are
committed to the sale and expect it to complete within one year from the date
of classification. Assets classified as held for sale are measured at the
lower of carrying amount and the fair value less costs to sell.
iii) Tenant leases
Leases - the Group as a lessor
Rent receivable is recognised in the income statement on a straight line basis
over the term of the lease. When the Group is an intermediate lessor, it
accounts for the head lease and the sub-lease as two separate contracts.
All leases where the Group is a lessor are classified as operating leases.
Leases - the Group as lessee
Where the Group is a lessee, a right of use asset and lease liability are
recognised at the outset of the lease. The lease liability is initially
measured at the present value of the lease payments based on the Group's
expectations of the likelihood of the lease term. The lease liability is
subsequently adjusted to reflect an imputed finance charge, payments made to
the lessor and any lease modifications.
The right of use asset is initially measured at cost, which comprises the
amount of the lease liability, direct costs incurred, less any lease
incentives received by the Group.
The Group has two categories of right of use assets: those in respect of head
leases related to a number of leasehold properties and an occupational lease
for its head office. All right of use assets are classified as investment
properties and added to the carrying value of leasehold investment properties.
The right of use asset in respect of the Group's head office lease is
subsequently depreciated over the length of the lease.
iv) Net rental income
Rental income from investment property leased out under an operating lease is
recognised in the profit or loss on a straight line basis over the lease term.
Contingent rents, such as turnover rents, rent reviews and indexation, are
recorded as income in the periods in which they are earned. The uplift from
rent reviews is recognised when such reviews have been agreed with tenants.
Surrender premiums receivable are recognised on completion of the surrender.
Where a rent free period is included in a lease, the rental income foregone is
allocated evenly over the period from the date of lease commencement to the
earlier of the first break option or the lease termination date.
Lease incentives and costs associated with entering into tenant leases are
amortised over the period from the date of lease commencement to the earlier
of the first break option or the lease termination date.
For leases which contain fixed or minimum uplifts, the rental income arising
from such uplifts is recognised on a straight line basis to the earlier of the
first break option or the lease termination date.
Property operating expenses are expensed as incurred and any property
operating expenditure not recovered from tenants through service charges is
charged to the income statement.
v) Profit or loss on sale of investment properties
Profits and losses on sales of investment properties are recognised at the
date of legal completion rather than exchange of contracts and calculated by
reference to the carrying value at the previous year end valuation date,
adjusted for subsequent capital expenditure.
g) Financial assets and financial liabilities
Financial assets and financial liabilities are recognised in the balance sheet
when the Group becomes a party to the contractual terms of the instrument.
Financial instruments under IFRS 9
i) Trade and other receivables
Trade receivables are initially recognised at their transaction price and
subsequently measured at amortised cost as the Group's business model is to
collect the contractual cash flows due from tenants. An impairment provision
is created based on lifetime expected credit losses, which reflect the Group's
historical credit loss experience and an assessment of current and forecast
economic conditions at the reporting date.
ii) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks and other short term highly liquid investments with original maturities
of three months or less, measured at amortised cost. When the Group is the
principal in an underlying transaction and has the right to the cash inflows
and/or the obligation to settle a liability and directs another entity, acting
as its agent, to receive and make payments on its behalf, the Group accounts
for the transaction in the cash flow statement by reporting the underlying
cash flows as operating, investing or financing according to their nature.
iii) Trade and other payables
Trade payables and other payables are initially measured at fair value, net of
transaction costs and subsequently measured at amortised cost using the
effective interest method.
iv) Borrowings
Borrowings are recognised initially at fair value less attributable
transaction costs. Subsequently, borrowings are measured at amortised cost
with any difference between the proceeds and redemption value being recognised
in the income statement over the term of the borrowing using the effective
interest method.
v) Derivative financial instruments
The Group uses derivative financial instruments to hedge its exposure to
interest rate risks. Derivative financial instruments are recognised initially
at fair value and subsequently remeasured at each period end, with changes in
fair value being recognised in the income statement. The Group does not apply
hedge accounting under IFRS 9.
vi) Income strip
As part of the merger with LXi, the Group acquired a financial liability
associated with the sale of a 65 year income strip of Alton Towers and Thorpe
Park in 2022. The structure comprised selling the freehold of the properties
to a UK institutional investor, with 999 year leases granted back, pursuant to
which was the obligation to pay rental income equivalent to 30% of the annual
rental income received from the tenant. The Group has the ability to acquire
the freehold back in 2087 for £1. The financial obligations in relation to
this transaction were fair valued on acquisition using the prevailing market
interest rate. Thereafter, the liability is measured at amortised cost.
h) Finance costs and income
Net finance costs include interest payable on borrowings, net of interest
capitalised and finance costs amortised. Interest is capitalised if it is
directly attributable to the acquisition, construction or redevelopment of
development properties from the start of the development work until practical
completion of the property. Capitalised interest is calculated with reference
to the actual interest rate payable on specific borrowings for the purposes of
development or, for that part of the borrowings financed out of general funds,
with reference to the Group's cost of borrowings.
Finance income includes interest receivable on funds invested at the effective
rate and notional interest receivable on forward funded developments at the
contractual rate. Finance costs and income are presented in the cash flow
statement within financing and investing activities, respectively.
i) Tax
Tax is included in profit or loss except to the extent that it relates to
items recognised directly in equity, in which case the related tax is
recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the balance sheet date,
together with any adjustment in respect of previous years.
Deferred tax is provided using the balance sheet liability method, providing
for temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and their tax bases. The amount
of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates
enacted or substantively enacted at the balance sheet date. A deferred tax
asset is recognised only to the extent that it is probable that future taxable
profits will be available against which the asset can be utilised.
As the Group is a UK REIT there is no provision for deferred tax arising on
the revaluation of UK properties or other temporary differences. The Group
must comply with the UK REIT regulation to benefit from the favourable tax
regime.
Our German asset, acquired through LXi, is subject to German corporate income
tax on those operations. A deferred tax liability was recognised on
acquisition and has been restated for the revaluation and currency movement in
the year.
j) Share based payments
The fair value of equity-settled share based payments to employees is
determined at the date of grant and is expensed on a straight line basis over
the vesting period based on the Group's estimate of shares that will
eventually vest.
k) Shares held in Trust
The cost of the Company's shares held by the Employee Benefit Trust is
deducted from equity in the Group balance sheet. Any shares held by the Trust
are not included in the calculation of earnings or net tangible assets per
share.
l) Dividends
Dividends on equity shares are recognised when they become legally payable. In
the case of interim dividends, this is when paid. In the case of final
dividends, this is when approved by the shareholders at the Annual General
Meeting.
2 Segmental information
a) Property value
As at 31 March 2026 2025
£m
£m
Logistics 4,023.7 2,837.9
Long income 3,471.7 3,159.7
Other¹ 81.0 125.9
Total portfolio² 7,576.4 6,123.5
Income strip gross up 237.1 231.0
Head lease assets 54.4 40.9
7,867.9 6,395.4
1 Other property assets include a retail park, four offices, a life science
asset and trading property
2 Total portfolio includes trading assets of £1.1 million (2025: £1.1
million) and assets held for sale of £47.8 million (2025: £10.4 million)
b) Gross rental income
For the year to 31 March 2026 2025
£m
£m
Logistics 209.0 143.3
Long income 246.2 241.4
Other 6.5 10.8
461.7 395.5
c) Net rental income
For the year to 31 March 2026 2025
£m
£m
Logistics 204.8 141.3
Long income 244.0 239.1
Other 6.5 10.2
455.3 390.6
An operating segment is a distinguishable component of the Group that engages
in business activities, earns revenue and incurs expenses, whose results are
reviewed by the Group's Chief Operating Decision Makers ('CODMs') and for
which discrete financial information is available.
Gross rental income represents the Group's revenues from its tenants and net
rental income is the principal profit measure used to determine the
performance of each sector. Total assets and liabilities are not monitored by
segment. However, property assets are reviewed on an ongoing basis. The Group
operates predominantly in the United Kingdom and no geographical split is
provided in information reported to the Board.
Included within the logistics operating segment are the sub-categories of
urban logistics, regional distribution and mega distribution and within the
long income operating segment are the sub-categories of convenience,
entertainment and leisure and healthcare. However the sub-category results are
not separately reviewed by the CODMs as they are not considered separate
operating segments. Instead the CODMs review the logistics and long income
sectors as a whole as their own operating segments.
The income strip gross up and head lease assets are not considered separate
operating segments and are included in this note for reconciliation purposes
only.
3 Revenue
For the year to 31 March 2026 2025
£m
£m
Gross rental income 461.7 395.5
Property management fees 0.9 1.0
Other income 2.0 0.2
Revenue 464.6 396.7
For the year to 31 March 2026 2025
£m
£m
Gross rental income 461.7 395.5
Cost of sales - property operating expenses (6.4) (4.9)
Net rental income 455.3 390.6
One tenant contributed more than 10% of gross rental income in the current
year (2025: two tenants). The net contracted rental income of the Group's top
ten occupiers, which is reflected net of income strip and head lease payments,
is shown in Supplementary note xvii.
4 Administrative costs
a) Total administrative costs
For the year to 31 March 2026 2025
£m
£m
Staff costs 22.7 20.7
Auditor's remuneration 1.0 0.7
Depreciation 1.0 0.6
Other administrative costs 5.5 5.1
30.2 27.1
b) Staff costs
For the year to 31 March 2026 2025
£m
£m
Employee costs, including those of Directors, comprise the following:
Wages and salaries 17.1 15.7
Less staff costs capitalised in respect of development projects (2.0) (1.9)
15.1 13.8
Social security costs 1.4 1.2
Pension costs 0.5 0.4
Share based payment 5.7 5.3
22.7 20.7
The long term share incentive plan ('LTIP') allows Executive Directors and
eligible employees to receive an award of shares, held in trust, dependent on
performance conditions based on the earnings per share, total shareholder
return and total accounting return of the Group over a three year vesting
period. The Group expenses the estimated number of shares likely to vest over
the three year period based on the market price at the date of grant. In the
current year the charge was £5.7 million (2025: £5.3 million). The cost of
acquiring the shares expected to vest under the LTIP of £3.1 million has been
charged to reserves this year (2025: £18.2 million).
Directors' emoluments are reflected in the table below. Directors received a
salary supplement in lieu of pension contributions for the current and
previous year. Details of the Directors' remuneration awards under the LTIP
are given in the Remuneration Committee report.
For the year to 31 March 2026 2025
£m
£m
Remuneration for management services 4.2 4.0
Entitlement to pension scheme contributions 0.1 0.1
4.3 4.1
The emoluments and benefits of the key management personnel of the Company,
which comprise the Directors and certain members of the Senior Leadership
Team, are set out in aggregate in the table below.
For the year to 31 March 2026 2025
£m
£m
Short term employee benefits 12.9 11.6
Share based payments 4.6 4.1
17.5 15.7
No disclosures have been made in accordance with IFRS 2 for share based
payments to employees other than those in the Remuneration Committee report on
the basis of materiality.
c) Staff numbers
The average number of employees including Executive Directors during the year
was:
2026 2025
Number
Number
Property and administration 53 47
d) Auditor's remuneration
For the year to 31 March 2026 2025
£'000
£'000
Audit services:
Audit of the Group and Company financial statements 733.0 572.0
Audit of the Company's subsidiaries 50.1 48.0
Other fees:
Issuance of comfort letter for the EMTN programme 80.0 -
Audit related assurance services - Interim Review 103.8 95.0
Total fees for audit and other services 966.9 715.0
In addition, £25,800 (2025: £24,700) was due to the Group's auditor in
respect of the audit of its joint venture.
5 Finance income and costs
a) Finance income
For the year to 31 March 2026 2025
£m
£m
Interest received on bank deposits 2.4 1.9
Interest receivable from interest rate derivatives 13.2 20.6
Interest receivable from forward funded developments 2.4 1.2
Total finance income 18.0 23.7
b) Finance costs
For the year to 31 March 2026 2025
£m
£m
Interest payable on bank loans 115.1 98.5
Unwinding of discount on fixed rate debt acquired 5.9 4.6
Debt and hedging early close out costs 16.9 -
Amortisation of loan issue costs 5.2 4.3
Interest on lease and other financial liabilities 17.5 15.2
Commitment fees and other finance costs 6.5 5.3
Total borrowing costs 167.1 127.9
Less amounts capitalised on developments (3.5) (3.4)
Net borrowing costs 163.6 124.5
Fair value loss on derivative financial instruments 9.7 11.1
Total finance costs 173.3 135.6
Net finance costs deducted from EPRA earnings as disclosed in Supplementary
note ii exclude the fair value loss on derivatives of £9.7 million (2025:
£11.1 million), debt and hedging early close out costs of £16.9 million
(2025: £nil) and the impact of the inflation volatility relating to the
income strip of £4.8 million (2025: £3.7 million).
6 Taxation
For the year to 31 March 2026 2025
£m
£m
Current tax
UK corporation tax 0.5 0.9
German corporate income tax 0.5 0.6
Deferred tax
Deferred tax on German asset 0.7 0.7
Total tax charge 1.7 2.2
As the Group is a UK REIT, any profits and gains arising from its property
rental business are exempt from UK corporation tax and there is no provision
for deferred tax arising on the revaluation of properties.
The UK corporation tax charge relates to tax arising on income attributable to
the Group's non-controlling interest and other residual tax. The Group has one
German property and is subject to German corporate income tax at an effective
rate of 15.825%, which resulted in a tax charge of £0.5 million in the year
(2025: £0.6 million).
An associated deferred tax liability is recognised and the revaluation
movement of £0.7 million has been reflected in the year along with an adverse
currency movement of £0.5 million, resulting in a deferred tax liability of
£11.3 million at the year end (2025: £10.1 million).
The reconciliation of the total tax charge in the year to the tax assessed on
profits at the standard rate of corporation tax in the UK is set out below.
For the year to 31 March 2026 2025
£m
£m
Profit before tax 297.1 352.8
Tax charge at the standard rate of corporation tax in the UK of 25% (2025: 74.3 88.2
25%)
Effects of:
Items not taxable (2.4) (20.7)
Share of post tax profits of joint ventures (1.2) (1.5)
REIT exemption on income and gains (68.3) (63.5)
Other (0.7) (0.3)
Tax charge on profit 1.7 2.2
7 Dividends
For the year to 31 March 2026 2025
£m
£m
Ordinary dividends paid
2024 Third quarterly interim dividend 2.4p per share - 26.2
2024 Fourth quarterly interim dividend 3.0p per share - 61.1
2025 First quarterly interim dividend 2.85p per share - 58.1
2025 Second quarterly interim dividend 2.85p per share - 58.3
2025 Third quarterly interim dividend 3.0p per share 61.2 -
2025 Fourth quarterly interim dividend 3.3p per share 68.2 -
2026 First quarterly interim dividend 3.05p per share 71.2 -
2026 Second quarterly interim dividend 3.05p per share 71.2 -
271.8 203.7
Ordinary dividend payable
2026 Third quarterly interim dividend 3.05p per share 71.2
2026 Fourth quarterly interim dividend 3.3p per share 77.0
The Company paid its third quarterly interim dividend in respect of the
financial year to 31 March 2026 of 3.05p per share, wholly as a Property
Income Distribution ('PID'), on 17 April 2026 to ordinary shareholders on the
register at the close of business on 13 March 2026.
The fourth quarterly interim dividend for 2026 of 3.3p per share, of which
1.5p is payable as a PID, will be payable on 9 July 2026 to shareholders on
the register at the close of business on 5 June 2026. A scrip dividend
alternative will be offered to shareholders as it was for the first three
quarterly dividend payments. Neither dividend has been included as a liability
in these accounts. Both dividends will be recognised as an appropriation of
retained earnings in the year to 31 March 2027.
During the year, the Company issued 14.2 million ordinary shares under the
terms of the Scrip Dividend Scheme, which reduced the cash dividend payment by
£26.5 million to £245.3 million.
8 Earnings and net assets per share
Adjusted earnings and net assets per share are calculated in accordance with
the Best Practice Recommendations ('BPR') of the European Public Real Estate
Association ('EPRA'). The EPRA earnings measure highlights the performance of
the property rental business.
The basic earnings per share calculation uses the weighted average number of
ordinary shares during the year and excludes the average number of shares held
by the Employee Benefit Trust for the year. The IFRS basic net asset value per
share calculation uses the number of shares in issue at the year end and
excludes the actual number of shares held by the Employee Benefit Trust at the
year end. The fully diluted calculations assume that new shares are issued in
connection with the expected vesting of the Group's long term incentive plan.
Further EPRA performance measures are reflected in the Supplementary notes.
a) EPRA earnings
EPRA earnings for the Group and its share of joint venture is summarised in
the Financial review and on a proportionally consolidated basis in
Supplementary note ii. The reconciliation of EPRA earnings to IFRS reported
profit is set out in the table below and in supplementary note ii on a
proportionally consolidated basis.
For the year to 31 March 2026 2025
£m
£m
EPRA earnings 305.3 268.0
Revaluation of property and investments 64.6 106.9
Fair value of derivatives (9.7) (11.1)
Loss on disposal (19.0) (13.0)
Impact of inflation volatility relating to the income strip (4.8) (3.7)
Debt and hedging early repayment costs (16.9) -
Goodwill impairment (9.6) -
Acquisition costs (16.3) -
Deferred tax (0.7) (0.7)
JV and NCI share of adjustments 2.8 1.5
IFRS reported profit 295.7 347.9
b) Earnings per ordinary share attributable to equity shareholders
For the year to 31 March 2026 2025
£m
£m
Basic and diluted earnings 295.7 347.9
EPRA adjustments above 9.6 (79.9)
EPRA earnings 305.3 268.0
For the year to 31 March 2026 2025
Number of
Number of
shares
shares
(millions)
(millions)
Weighted ordinary share capital 2,278.9 2,044.2
Shares held in the Employee Benefit Trust (9.6) (4.5)
Weighted average number of ordinary shares - basic 2,269.3 2,039.7
Employee share schemes 7.9 6.2
Weighted average number of ordinary shares - fully diluted 2,277.2 2,045.9
Earnings per share
Basic 13.0p 17.1p
Diluted 13.0p 17.0p
EPRA earnings per share
Basic 13.5p 13.1p
Diluted 13.4p 13.1p
c) Net assets per share attributable to equity shareholders
The EPRA best practice recommendations for financial disclosures by public
real estate companies include three measures of net asset value: EPRA net
tangible assets ('NTA'), EPRA net reinstatement value ('NRV') and EPRA net
disposal value ('NDV'). EPRA NTA is considered to be the most relevant measure
for the Group. All three measures are calculated on a diluted basis, which
assumes that new shares are issued in connection with the expected vesting of
the Group's long term incentive plan.
As at 31 March 2026 EPRA net EPRA net EPRA net reinstatement value
tangible assets
disposal
£m
£m
value
£m
Equity shareholders' funds 4,714.3 4,714.3 4,714.3
Deferred tax on fair value gains of investment property - - 11.3
Fair value of Group derivatives (16.2) - (16.2)
Mark to market of fixed rate debt - 86.0 -
Mark to market of public bond - 16.7 -
Purchasers' costs¹ - - 518.2
EPRA net asset value 4,698.1 4,817.0 5,227.6
1 Estimated from the portfolio's external valuation which is stated net of
purchasers' costs of 6.8%
As at 31 March 2025 EPRA net EPRA net EPRA net reinstatement value
tangible assets
disposal value
£m
£m
£m
Equity shareholders' funds 4,094.2 4,094.2 4,094.2
Deferred tax on fair value gains of investment property 0.5 - 10.1
Fair value of Group derivatives (23.7) - (23.7)
Mark to market of fixed rate debt - 87.6 -
Purchasers' costs(1) - - 418.6
EPRA net asset value 4,071.0 4,181.8 4,499.2
1 Estimated from the portfolio's external valuation which is stated net of
purchasers' costs of 6.8%
As at 31 March 2026 2025
Number of
Number of
shares
shares
(millions)
(millions)
Ordinary share capital 2,344.4 2,048.1
Shares held in Employee Benefit Trust (10.0) (10.5)
Number of ordinary shares - basic 2,334.4 2,037.6
Employee share schemes 8.1 6.4
Number of ordinary shares - fully diluted 2,342.5 2,044.0
IFRS net asset value per share 202.7p 202.4p
EPRA net tangible assets per share 200.6p 199.2p
EPRA net disposal value per share 205.6p 204.6p
EPRA net reinstatement value per share 223.2p 220.1p
9 Investment properties
a) Investment properties
As at 31 March Completed Under development 2026 Completed Under 2025
£m
£m
Total
£m
development
Total
£m
£m
£m
Opening balance 6,327.6 15.4 6,343.0 6,146.4 38.2 6,184.6
Acquisitions 1,526.6 82.1 1,608.7 284.7 10.8 295.5
Capital expenditure 14.9 16.2 31.1 24.7 11.9 36.6
Disposals (293.0) - (293.0) (293.8) (21.4) (315.2)
Property transfers¹ (26.5) (21.3) (47.8) 17.0 (27.4) (10.4)
Revaluation movement² 54.5 7.6 62.1 97.8 3.2 101.0
Foreign currency 5.8 - 5.8 (2.9) - (2.9)
Movement in income strip gross up(2,3) 6.1 - 6.1 9.5 - 9.5
Movement in tenant incentives and rent free uplifts 48.5 0.1 48.6 44.2 0.1 44.3
Property portfolio 7,664.5 100.1 7,764.6 6,327.6 15.4 6,343.0
Head lease assets 54.4 - 54.4 40.9 - 40.9
7,718.9 100.1 7,819.0 6,368.5 15.4 6,383.9
1 Properties totalling £47.8 million (2025: £10.4 million) have been
transferred to current assets and separately disclosed as assets held for sale
as reflected in note 9b
2 Revaluation and income strip movements are reflected together as profit on
revaluation of investment properties in the income statement of £68.2 million
(2025: £106.0 million)
3 Prior year movement of £9.5 million comprises an adjustment of £4.5
million to incorporate an inflation adjustment and a gross up of £5.0 million
which is included in the income statement
Investment properties are stated at fair value as at 31 March 2026 based on
external valuations performed by professionally qualified and independent
valuers CBRE Limited ('CBRE'), Savills (UK) Limited ('Savills') and Knight
Frank LLP ('Knight Frank'). The valuations have been prepared in accordance
with the RICS Valuation - Global Standards 2025 on the basis of fair value.
There has been no change in the valuation technique in the year. The total
fees earned by each valuer from the Company represent less than 5% of their
total UK revenues.
A reconciliation of the total portfolio valuation to the valuers' reports is
provided below:
As at 31 March Note 2026 2025
£m
£m
Property portfolio valuation 9a 7,764.6 6,343.0
Assets held for sale 9b 47.8 10.4
Less income strip gross up (237.1) (231.0)
Portfolio valuation from external valuation reports 7,575.3 6,122.4
As part of the LXi merger, the Group acquired a financial liability associated
with the sale of a 65 year income strip of Alton Towers and Thorpe Park in
2022 as set out in note 14a(ii). The income strip balance included within
investment properties represents the gross up of the asset values as the
external valuation is based on net cash flows after deducting income strip
payments. The movement in the year of £6.1 million comprises a gross up which
is included in the income statement within the movement in revaluation of
investment properties.
Completed properties include buildings that are occupied or are available for
occupation. Properties under development include land under development and
investment property under construction. Internal staff costs of the
development team of £2.0 million (2025: £1.9 million) have been capitalised
in the year, being directly attributable to the development projects in
progress.
Long term leasehold values included within investment properties amount to
£1,332.3 million (2025: £1,169.8 million). Almost half relates to theme park
assets which are let on 999 year leases. All other properties are freehold.
The historical cost of all of the Group's investment properties at 31 March
2026 was £6,850.4 million (2025: £5,484.0 million).
Included within the investment property valuation is £205.5 million (2025:
£156.9 million) in respect of unamortised lease incentives and rent free
periods. The movement in the year reflects lease incentives paid of £1.4
million (2025: £8.2 million) and rent free and amortisation movements of
£51.2 million (2025: £47.9 million), offset by incentives written off on
disposal of £4.0 million (2025: £11.8 million). Capital commitments have
been entered into amounting to £49.6 million (2025: £107.2 million) which
have not been provided for in the financial statements.
b) Assets held for sale
As at 31 March 2026 2025
£m
£m
Opening balance 10.4 8.5
Disposals (10.4) (8.5)
Property transfers 47.8 10.4
Closing balance 47.8 10.4
The valuation of freehold and leasehold property held for sale at 31 March
2026 was £47.8 million (2025: £10.4 million), representing £18.6 million
logistics and £29.2 million long income assets which are expected to complete
within the next six months.
c) Valuation technique and quantitative information
ERV Net initial yield Reversionary yield
Asset type Segmental split Under development Trading Fair value Valuation Weighted Range Weighted Range Weighted Range
(note 2)
£m
assets
2026¹
technique
average
(£ per sq ft)
average
%
average
%
£m
£m
£m
(£ per sq ft)
%
%
Logistics 4,023.7 (80.8) - 3,942.9 Yield capitalisation 9.52 1.80-37.10 5.0 1.7-10.1 6.2 3.1-21.7
Long income 3,471.7 (19.3) - 3,452.4 Yield capitalisation 19.43 1.10-191.60 5.6 1.3-13.3 5.6 3.2-16.7
Other 81.0 - (1.1) 79.9 Yield capitalisation 14.32 5.70-70.10 5.6 4.6-10.6 8.5 5.3-11.2
Development - 100.1 - 100.1 Residual 14.22 12.50-55.60 4.9 3.8-5.7 5.3 5.1-
6.3
ERV Net initial yield Reversionary yield
Asset type Segmental split Under development Trading Fair value Valuation Weighted Range Weighted Range Weighted Range
£m
assets
2025¹
technique
average
(£ per sq ft)
average
%
average
%
(note 2)
£m
£m
(£ per sq ft)
%
%
£m
Logistics 2,837.9 (6.2) - 2,831.7 Yield capitalisation 9.82 2.50-37.10 4.7 2.0-12.4 5.7 4.0-11.6
Long income 3,159.7 (9.2) - 3,150.5 Yield capitalisation 20.97 3.50-191.60 5.5 1.3-13.4 4.2 3.0-30.1
Other 125.9 - (1.1) 124.8 Yield capitalisation 16.84 5.70-60.80 4.8 4.1-11.5 7.0 4.6-11.5
Development - 15.4 - 15.4 Residual 26.40 22.50-55.60 5.7 5.5- 5.8 5.7-
5.7 6.7
1 As reflected in notes 2 and 9 and including assets held for sale of £47.8
million (2025: £10.4 million) but excluding trading properties classified as
development of £1.1 million (2025: £1.1 million)
All of the Group's properties are categorised as Level 3 in the fair value
hierarchy as defined by IFRS 13 fair value measurement. There have been no
transfers of properties between Levels 1, 2 and 3 during the year ended 31
March 2026. The fair value at 31 March 2026 represents the highest and best
use of the properties. When considering the highest and best use, the valuers
will look at existing and potential uses which are viable.
i) Technique
The valuation techniques described below are consistent with IFRS 13 and use
significant 'unobservable' inputs such as Expected Rental Value ('ERV') and
yield. There have been no changes in valuation techniques since the prior
year.
Yield capitalisation - for commercial investment properties, market rental
values are capitalised with a market capitalisation rate. The resulting
valuations are cross-checked against the net initial yields and the fair
market values per square foot derived from recent market transactions.
Residual - for certain investment properties under development, the fair value
of the property is calculated by estimating the fair value of the completed
property using the yield capitalisation technique less estimated costs to
completion and a risk premium which includes but is not limited to
construction and letting risk.
ii) Sensitivity
A 5% increase or decrease in ERV would increase or decrease the fair value of
the Group's investment properties by £160.8 million or £164.9 million
respectively.
An increase or decrease of 25bps to the equivalent yield would decrease or
increase the fair value of the Group's investment properties by £311.8
million or £334.1 million respectively. An increase or decrease of 50bps to
the equivalent yield would decrease or increase the fair value of the Group's
investment properties by £613.3 million or £739.5 million respectively. The
Directors consider these thresholds to be appropriate in order to demonstrate
a reasonable movement in the underlying significant estimates and their impact
on the valuation of the property portfolio based on historical movements and
consider their presentation to be in line with market practice.
There are interrelationships between the valuation inputs and they are
primarily determined by market conditions. The effect of an increase in more
than one input could be to magnify the impact on the valuation. However, the
impact on the valuation could be offset by the interrelationship of two inputs
moving in opposite directions, for example an increase in rent may be offset
by a decrease in occupancy, resulting in no net impact on the valuation.
iii) Process
The valuation reports produced by CBRE, Savills and Knight Frank are based on:
· Information provided by the Group, such as current rents, lease terms,
capital expenditure and comparable sales information, which is derived from
the Group's financial and property management systems and is subject to the
Group's overall control environment; and
· Assumptions applied by the valuers such as ERVs and yields which are
based on market observation and their professional judgement.
10 Investment in joint ventures
At 31 March 2026, the following principal property interest, being a jointly
controlled entity, has been equity accounted for in these financial
statements:
Country of incorporation Property sectors Group share
or registration(1)
Metric Income Plus Partnership ('MIPP') England Long income 50.0%
1 The registered address is One Curzon Street, London, W1J 5HB
The principal activity is property investment into long income assets in the
UK, which complements the Group's operations and contributes to the
achievement of its strategy.
At 31 March 2026, the freehold and leasehold investment properties were
externally valued by CBRE. The movement in the carrying value of joint venture
interests in the year is summarised as follows:
As at 31 March 2026 2025
£m
£m
Opening balance 71.9 69.2
Share of profit for the year 4.7 6.1
Distributions received¹ (9.1) (3.4)
67.5 71.9
1 Comprises profit distributions of £6.3 million (2025: £3.4 million) and
repayment of partner loans of £2.8 million (2025: £nil)
The Group's share of the profit after tax and net assets of MIPP is as
follows:
Summarised income statement Total Group Total Group
2026
share
2025
share
£m
2026
£m
2025
£m
£m
Gross rental income 8.2 4.1 7.8 3.9
Property costs (0.5) (0.3) (0.4) (0.2)
Net rental income 7.7 3.8 7.4 3.7
Management fees (1.1) (0.5) (1.1) (0.6)
Revaluation gain 2.6 1.3 5.8 2.9
Profit on disposal 0.1 - - -
Net finance income 0.1 0.1 0.1 0.1
Profit after tax 9.4 4.7 12.2 6.1
Group share of profit after tax 4.7 6.1
EPRA adjustments:
Revaluation gain (2.6) (1.3) (5.8) (2.9)
Profit on disposal (0.1) - - -
EPRA earnings 6.7 3.4 6.4 3.2
Group share of EPRA earnings 3.4 3.2
Summarised balance sheet
Investment properties 131.2 65.5 139.8 69.9
Other current assets 0.4 0.2 0.5 0.2
Cash 6.0 3.0 5.5 2.8
Current liabilities (2.5) (1.2) (2.1) (1.0)
Net assets 135.1 67.5 143.7 71.9
Group share of net assets 67.5 71.9
11 Trade and other receivables
As at 31 March 2026 2025
£m
£m
Trade receivables 10.1 3.6
Prepayments and accrued income 4.3 4.6
Other receivables 13.5 5.5
27.9 13.7
All amounts fall due for payment in less than one year. Trade receivables
comprise rental income which is due on contractual payment days with no credit
period.
At 31 March 2026, trade receivables of £2.2 million were overdue and
considered at risk and have been provided for in full (2025: £1.4 million).
In addition, an impairment provision based on the IFRS expected credit loss
model of £6.0 million (2025: £4.9 million) and a provision against tenant
incentives of £1.8 million (2025: £1.4 million) have been recognised. The
impairment provision includes £1.8 million acquired through the corporate
acquisition of ULR.
12 Cash and cash equivalents
Cash and cash equivalents include £55.8 million (2025: £39.4 million)
retained in restricted accounts which are not readily available to the Group
for day-to-day commercial purposes. Cash in rent accounts of £32.6 million
was released following the next interest payment date.
13 Trade and other payables
As at 31 March 2026 2025
£m
£m
Trade payables 10.1 3.7
Amounts payable on property acquisitions and disposals 2.4 1.8
Rent received in advance 93.0 63.1
Accrued interest 14.5 4.7
Tax liabilities 10.8 16.9
Other payables 28.1 31.5
Other accruals and deferred income 22.7 20.8
181.6 142.5
The Group has financial risk management policies in place to ensure that all
payables are settled within the required credit timeframe.
14 Borrowings and financial instruments
a) Borrowings
i) Secured and unsecured loans
As at 31 March 2026 2025
£m
£m
Secured bank loans 533.5 799.3
Unsecured bank loans 2,418.8 1,273.9
2,952.3 2,073.2
Unamortised finance costs (14.7) (14.6)
2,937.6 2,058.6
Of the total borrowings of £2,937.6 million, £92.8 million are repayable
within one year (2025: £347.7 million).
As at 31 March 2026 Total debt Floating rate Fixed rate Unamortised fair value adjustments Total gross debt Weighted
facility
debt drawn
debt drawn
£m
£m
average
£m
£m
£m
maturity
(years)
Secured bank loans:
Rothesay (Mucklow) 60.0 - 60.0 1.3 61.3 5.7
Canada Life (CTPT) 90.0 - 90.0 (0.6) 89.4 0.6
Scottish Widows (LXi) 170.0 - 170.0 (13.2) 156.8 7.7
Handelsbanken (Highcroft) 27.2 - 27.2 (0.9) 26.3 2.7
Aviva (ULR) 210.0 - 210.0 (10.3) 199.7 4.4
Unsecured bank loans:
Public bond 2025 500.0 - 500.0 (1.2) 498.8 5.2
Revolving credit facilities 2026 (syndicate) 755.0 245.0 - - 245.0 4.7
Revolving credit facilities 2026 (Lloyds) 150.0 145.0 - - 145.0 4.6
Term loan 2025 (syndicate) 180.0 180.0 - - 180.0 2.3
Term loan 2025 (CCB) 50.0 50.0 - - 50.0 2.6
Term loans 2026 (syndicate) 545.0 545.0 - - 545.0 2.5
Term loans 2026 (Lloyds) 50.0 50.0 - - 50.0 2.5
Private placement 2016 (syndicate) 25.0 - 25.0 - 25.0 2.5
Private placement 2018 (syndicate) 150.0 - 150.0 - 150.0 4.8
Private placement 2021 (syndicate) 380.0 - 380.0 - 380.0 6.2
Private placement 2025 (syndicate) 150.0 - 150.0 - 150.0 5.1
3,492.2 1,215.0 1,762.2 (24.9) 2,952.3 4.4
Total debt drawn 2,977.2
As at 31 March 2025 Total debt Floating rate Fixed rate Unamortised fair value adjustments Total gross debt Weighted
facility
debt drawn
debt drawn
£m
£m
average
£m
£m
£m
maturity
(years)
Secured bank loans:
Scottish Widows (Mucklow) 60.0 - 60.0 1.5 61.5 6.7
Canada Life (CTPT) 90.0 - 90.0 (1.7) 88.3 1.6
L&G (LXi) 62.5 - 62.5 (0.2) 62.3 0.4
AIG (LXi) 286.2 - 286.2 (0.8) 285.4 0.5
Scottish Widows (LXi) 170.0 - 170.0 (14.9) 155.1 8.7
Canada Life (LXi) 148.0 - 148.0 (1.3) 146.7 14.1
Unsecured bank loans:
Revolving credit facility 2021 (syndicate) 225.0 145.0 - - 145.0 1.1
Wells Fargo revolving credit facility 175.0 55.0 - - 55.0 1.1
Revolving credit facility 2022 (syndicate) 275.0 135.0 - - 135.0 2.6
Revolving credit facility 2024 (syndicate) 560.0 152.1 - - 152.1 3.8
SMBC revolving credit facility 2025 175.0 91.8 - - 91.8 4.7
Term loan 2024 (syndicate) 140.0 140.0 - - 140.0 1.8
Private placement 2016 (syndicate) 25.0 - 25.0 - 25.0 3.5
Private placement 2018 (syndicate) 150.0 - 150.0 - 150.0 5.8
Private placement 2021 (syndicate) 380.0 - 380.0 - 380.0 7.2
2,921.7 718.9 1,371.7 (17.4) 2,073.2 4.7
Total drawn debt 2,090.6
The Group strengthened and diversified its financial position during the year
through extensive refinancing of secured, near term and expensive debt
facilities. In total, the Group completed £1.2 billion of new unsecured debt
arrangements, repaid £1.1 billion existing facilities and refinanced £1.5
billion unsecured revolving credit facilities and term loans. Further details
are set out in the Financial review.
Certain bank loans at 31 March 2026 are secured by fixed charges over Group
investment properties with a carrying value of £1,660.7 million (2025:
£2,191.9 million).
ii) Other financial liability
As part of the merger with LXi, the Group acquired a financial liability
associated with the sale of a 65 year income strip of Alton Towers and Thorpe
Park, entered into in 2022. The proceeds LXi received prior to our merger were
matched with a corresponding financial liability and a 30% pay away of rent.
The structure comprised selling the freehold of the properties to a UK
institutional investor, with 999 year leases granted back, pursuant to which
was the obligation to pay rental income equivalent to 30% of the annual rental
income received from the tenant. The Group has the ability to acquire the
freehold back in 2087 for £1.
The financial obligations in relation to this transaction were fair valued on
acquisition using the prevailing market interest rate at £221.4 million. At
31 March 2026, the total liability was £237.1 million based on amortised
cost, with £9.4 million being due in less than one year. For disclosure
purposes, the fair value of the liability at 31 March 2026 was assessed by
independent experts Chatham Financial to be £212.8 million.
The corresponding gross up is reflected within investment properties in the
balance sheet as the external valuation of the assets is based on net cash
flows after deducting income strip payments. The gross rental income
receivable from the tenant is reflected in the income statement within revenue
and the 30% pay away is reflected as interest payable on other financial
liabilities and included within finance costs.
b) Financial risk management
Financial risk factors
The Group's overall risk management programme focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the
Group's financial performance. The Group's financial risk management
objectives are to minimise the effect of risks it is exposed to through its
operations and the use of debt financing. The principal financial risks to the
Group and the policies it has in place to manage these risks are summarised
below.
i) Credit risk
Credit risk is the risk of financial loss to the Group if a client or
counterparty to a financial instrument fails to meet its contractual
obligations. The Group's principal financial assets are cash balances and
deposits and trade and other receivables. The Group's credit risk is primarily
attributable to its cash deposits and trade receivables.
The Group mitigates financial loss from tenant defaults by dealing with only
creditworthy tenants. Trade receivables are presented at amortised cost less a
provision for specific overdue debts. A loss allowance for expected credit
losses is also provided for in the accounts and is low relative to the scale
of the balance sheet at £6.0 million (2025: £4.9 million) as reflected in
note 11, and therefore the credit risk of trade receivables is considered to
be low. Cash is held in a diverse mix of institutions with investment grade
credit ratings. The credit ratings of the banks are monitored and changes are
made where necessary to manage risk.
The credit risk on liquid funds and derivative financial instruments is
limited due to the Group's policy of monitoring counterparty exposures with a
maximum exposure equal to the carrying amount of these instruments. The Group
has no significant concentration of credit risk, with exposure spread over a
large number of counterparties.
ii) Liquidity risk
Liquidity risk arises from the Group's management of working capital and the
finance charges and principal repayments on its debt instruments. It is the
risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due.
The Group actively maintains a mixture of long term and short term committed
facilities that are designed to ensure that the Group has sufficient available
funds for operations. The Group's funding sources are diversified across a
range of banks and institutions. Cash flow forecasts are prepared for the
Senior Leadership Team to ensure sufficient resources of cash and undrawn debt
facilities are in place to meet liabilities as they fall due.
At 31 March 2026, the Group had cash reserves of £143.4 million (2025: £81.2
million), of which £55.8 million was retained in restricted accounts, and
available and undrawn bank loan facilities of £515.0 million (2025:
£831.1 million). Cash and cash equivalents were placed with financial
institutions with A or better credit ratings.
The following table shows the contractual maturity profile of the Group's
loans, interest payments on loans, other financial liabilities and derivative
financial instruments on an undiscounted cash flow basis and assuming
settlement on the earliest repayment date. Other liabilities as disclosed in
note 14c(i) include trade payables and accrued interest and are repayable
within one year. The contractual maturity profile of lease liabilities
disclosed in the balance sheet is reflected in note 16.
As at 31 March 2026 Less than One to Three months to One to Two to More than Total
one month
three months
one year
two years
five years
five years
£m
£m
£m
£m
£m
£m
£m
Bank loans 10.1 20.5 184.2 509.4 1,746.0 1,027.3 3,497.5
Other financial liabilities 0.8 1.5 7.1 9.7 31.0 1,760.0 1,810.1
Derivative financial instruments (0.6) (0.9) (4.0) (2.5) (2.4) - (10.4)
10.3 21.1 187.3 516.6 1,774.6 2,787.3 5,297.2
As at 31 March 2025 Less than One to Three One to Two to More than Total
one month
three months
two years
five years
five years
£m
£m
£m months to
£m
£m
£m
one year
£m
Bank loans 8.9 16.2 411.7 494.0 758.8 804.4 2,494.0
Other financial liabilities 0.7 1.5 6.8 9.2 29.0 1,324.6 1,371.8
Derivative financial instruments (1.4) (2.8) (12.6) (9.6) (4.9) (5.5) (36.8)
8.2 14.9 405.9 493.6 782.9 2,123.5 3,829.0
iii) Market risk - interest rate risk
The Group is exposed to interest rate risk from the use of debt financing at a
variable rate and currency risk relating to loans denominated in euros. There
is a risk that future cash flows of a financial instrument will fluctuate
because of changes in interest or currency rates.
The Group uses interest rate derivatives and fixed rates to manage its
interest rate exposure and hedge future interest rate risk for the term of the
loan. Although the Board accepts that this policy neither protects the Group
entirely from the risk of paying rates in excess of current market rates nor
eliminates fully the cash flow risk associated with interest payments, it
considers that it achieves an appropriate balance of exposure to these risks.
At the year end, 99.8% of the Group's debt drawn was hedged, through fixed
coupon debt arrangements and interest rate swaps and caps currently in place.
The average interest rate payable by the Group on all bank borrowings at 31
March 2026, including the cost of amortising finance arrangement fees, was
4.0% (2025: 4.0%). A 1% increase or decrease in interest rates during the year
would have decreased or increased the Group's annual profit before tax by
£2.7 million or £3.2 million respectively.
iv) Capital risk management
The Group's objectives when maintaining capital are to safeguard the entity's
ability to continue as a going concern so that it can provide returns to
shareholders and as such it seeks to maintain an appropriate mix of debt and
equity. The capital structure of the Group consists of debt, which includes
long term borrowings and undrawn debt facilities, and equity comprising issued
capital, reserves and retained earnings. The Group balances its overall
capital structure through the payment of dividends and new share issues as
well as the issue of new debt or the redemption of existing debt.
The Group seeks to maintain an efficient capital structure with a balance of
debt and equity as shown in the table below.
As at 31 March 2026 2025
£m
£m
Net debt 3,085.2 2,230.9
Shareholders' equity 4,714.3 4,094.2
7,799.5 6,325.1
v) Foreign currency exchange risk
The Group prepares its financial statements in sterling. However, the Group is
subject to foreign currency exchange risk as it has assets and liabilities
denominated in euros. A 10% increase or decrease in closing sterling rates
against the euro would decrease or increase net assets by £1.6 million (2025:
decrease or increase by £1.5 million).
c) Financial instruments
i) Categories of financial instruments
Measured at amortised cost Measured at fair value
As at 31 March 2026 2025 2026 2025
£m
£m
£m
£m
Non current assets
Derivative financial instruments (see 14c (iii)) - - 16.2 23.7
Current assets
Cash and cash equivalents (note 12) 143.4 81.2 - -
Trade receivables (note 11) 10.1 3.6 - -
Other receivables (note 11) 13.5 5.5 - -
167.0 90.3 16.2 23.7
Non current liabilities
Borrowings (note 14a (i)) 2,844.2 1,710.9 - -
Other financial liabilities (note 14a (ii)) 227.7 222.0 - -
Lease liabilities (note 16) 54.8 40.8 - -
Current liabilities
Borrowings (note 14a (i)) 93.4 347.7 - -
Other financial liabilities (note 14a (ii)) 9.4 9.0 - -
Lease liabilities (note 16) 0.8 0.7 - -
Contingent consideration - - 2.9 1.4
Trade payables (note 13) 10.1 3.7 - -
Accrued interest (note 13) 14.5 4.7 - -
3,254.9 2,339.5 2.9 1.4
ii) Fair values
To the extent financial assets and liabilities are not carried at fair value
in the consolidated balance sheet, the Directors are of the opinion that book
value approximates to fair value at 31 March 2026 with the exception of the
Group's fixed rate debt and public bond.
The adjustment required to measure the fixed rate debt at fair value is
provided in note 8c. This is measured by Chatham Financial using the equity
method which discounts the difference between the remaining contractual and
market debt service payments at an equity discount rate and represents Level 2
in the hierarchy table.
The adjustment required to measure the public bond at fair value is provided
in note 8c. This is based on quoted market prices for the listed bond at the
balance sheet date and represents a Level 1 fair value measurement in the
hierarchy.
iii) Derivative financial instruments
Details of the fair value of the Company and Group's derivative financial
instruments that were in place at 31 March 2026 are provided below:
As at 31 March Average rate Notional amount Fair value
Interest rate swaps - expiry 2026 2025 2026 2025 2026 2025
%
%
£m
£m
£m
£m
Less than one year 2.4 - 101.3 - - -
One to two years 2.8 2.4 365.0 97.1 5.6 (0.5)
Two to five years 3.1 3.1 350.0 725.0 10.3 15.5
2.9 3.0 816.3 822.1 15.9 15.0
As at 31 March Average rate Notional amount Fair value
Interest rate caps - expiry 2026 2025 2026 2025 2026 2025
%
%
£m
£m
£m
£m
Less than one year 2.0 - 443.7 - 0.3 -
One to two years - 2.0 - 441.8 - 8.7
2.0 2.0 443.7 441.8 0.3 8.7
Total fair value 16.2 23.7
All derivative financial instruments are interest rate derivatives and are
carried at fair value following a valuation by Chatham Financial. In
accordance with accounting standards, fair value is estimated by calculating
the present value of future cash flows, using appropriate market discount
rates. For all derivative financial instruments this equates to a Level 2 fair
value measurement as defined by IFRS 13 Fair Value Measurement. The valuation
therefore does not reflect the cost or gain to the Group of cancelling its
interest rate protection at the balance sheet date, which is generally a
marginally higher cost (or smaller gain) than a market valuation.
15 Business combinations
a) Acquisition of Urban Logistics REIT Plc
On 23 June 2025, the Company acquired the entire issued share capital of Urban
Logistics REIT Plc ('ULR'). The acquisition was implemented by way of a Scheme
of Arrangement under Part 26 of the Companies Act and was effected through the
issue of 257.9 million new ordinary shares at 202.2p per share totalling
£521.4 million, and cash consideration of 42.8p per share totalling £196.7
million. The Group's existing shareholding in ULR was valued at £8.7 million
on acquisition and was included as part of the consideration paid, which in
aggregate was £726.8 million. The exchange ratio was based on an adjusted net
tangible assets ('NTA') to adjusted NTA approach, taking into account the fair
value of property and debt and the acquisition of Logistics Asset Management
Newco Limited as reflected in note 15b.
The fair value of the identifiable net assets acquired was £726.7 million as
reflected in the table below. The difference between the consideration paid
and the fair value of net assets acquired of £0.1 million has been recognised
as goodwill in the year and has been fully impaired as the future cash flows
arising in the form of rental income were fully incorporated into the fair
value of the assets acquired. Acquisition-related costs of £16.0 million have
been recognised separately in the income statement.
The fair value adjustments required under IFRS 3 are as follows:
· Borrowings - secured debt with a nominal value of £267.2 million was
fair valued to £255.1 million, a £12.1 million reduction. The fair value
adjustment is offset by £3.9 million of unamortised issue costs associated
with debt which was derecognised on completion. The fair value adjustment will
be amortised to other finance costs over the remaining term of the debt
facility.
· Trade debtors and receivables - an impairment provision of £1.8 million
was recognised on acquisition along with other provisions against lease
incentives and dilapidation income receivable of £4.1 million. After these
adjustments, the amortised cost of trade debtors and receivables approximates
to their fair value.
Acquisition of Urban Logistics REIT Plc
Book value as at 23 June 2025 Fair value of fixed rate debt Fair value of prepaid finance costs Other fair value adjustments Fair value
£m
£m
£m
£m
as at
23 June 2025
£m
Investment properties(1) 1,144.6 - - - 1,144.6
Derivative financial instruments 1.2 - - - 1.2
Trade and other receivables 18.3 - - (5.9) 12.4
Cash and cash equivalents 41.9 - - - 41.9
Total assets 1,206.0 - - (5.9) 1,200.1
Trade and other payables (22.3) - - - (22.3)
Rent received in advance (15.6) - - - (15.6)
Borrowings (437.2) 12.1 - - (425.1)
Prepaid finance costs 3.9 - (3.9) - -
Lease liabilities (10.4) - - - (10.4)
Total liabilities (481.6) 12.1 (3.9) - (473.4)
Fair value of net assets acquired 724.4 12.1 (3.9) (5.9) 726.7
Issue of 257.9 million ordinary shares 521.4
Cash consideration paid 196.7
Shares held in Urban Logistics REIT Plc 8.7
Fair value of consideration paid 726.8
Goodwill recognised on acquisition and subsequently impaired 0.1
1 Includes urban logistics warehouses of £1,134.5 million and head lease
assets of £10.1 million
b) Acquisition of Logistics Asset Management Newco Limited
On 24 June 2025, alongside the acquisition noted in 15a above, we completed
the acquisition of Logistics Asset Management Newco Limited, which held the
investment advisory contract for ULR, for total consideration of £8.1 million
which included £1.0 million of contingent consideration at fair value. The
contingent consideration is payable over two years and is based on growth in
the LondonMetric average share price and aggregated rent roll.
The fair value of net assets acquired was £0.1 million and the resulting
goodwill generated on acquisition of £8.0 million has been fully impaired and
recognised in the income statement. Additional transaction costs of £0.3
million have been recognised separately within the income statement.
c) Summary of ULR acquisition disclosures
Urban Logistics REIT Plc Logistics Asset Management Newco Limited Total
£m
£m
£m
Fair value of net assets acquired 726.7 0.1 726.8
Fair value of consideration paid:
Shares 521.4 - 521.4
Cash 196.7 8.1 204.8
Shares held in Urban Logistics REIT Plc 8.7 - 8.7
Total consideration paid 726.8 8.1 734.9
Goodwill recognised on acquisition and subsequently impaired 0.1 8.0 8.1
Acquisition costs recognised in the income statement 16.0 0.3 16.3
The cost of the ULR acquisition reflected in the Group cash flow statement of
£162.2 million reflects cash consideration paid of £204.8 million noted
above less contingent consideration payable of £1.0 million and less cash
acquired of £41.9 million (as reflected in note 15a) and includes costs
relating to the issuance of share capital of £0.3 million charged to equity.
The goodwill charge in the income statement of £9.6 million reflects the
goodwill recognised on acquisition of ULR of £8.1 million as noted in the
table above and also additional contingent consideration of £1.5 million
relating to the acquisition of LXi REIT Advisors Limited.
The acquisition of ULR has contributed £54.6 million to gross rental income,
£42.9 million to EPRA earnings and £42.8 million to retained profit since
acquisition. Had ULR been part of the Group since 1 April 2025, the combined
Group's gross rental income, EPRA earnings and retained profits for the year
to 31 March 2026 would have been £475.0 million, £311.8 million and £286.6
million respectively.
16 Leases
The Group's minimum lease rentals receivable under non cancellable leases,
excluding joint ventures, are as follows:
As at 31 March 2026 2025
£m
£m
Less than one year 434.1 346.1
Between one and five years 1,608.1 1,354.3
Between six and ten years 1,736.3 1,562.8
Between 11 and 15 years 1,198.1 1,184.6
Between 16 and 20 years 827.4 790.0
Over 20 years 2,851.6 2,155.2
8,655.6 7,393.0
In accordance with IFRS 16, the Group has recognised a right of use asset for
its head office lease and other head lease obligations. The Group's minimum
lease payments are due as follows:
As at 31 March Undiscounted minimum lease payments Interest Present value of minimum lease payments Present value of minimum lease payments
£m
£m
2026
2025
£m
£m
Less than one year 3.2 (2.4) 0.8 0.7
Between one and two years 3.2 (2.4) 0.8 0.7
Between two and five years 7.6 (6.9) 0.7 1.3
Over five years 230.1 (176.8) 53.3 38.8
244.1 (188.5) 55.6 41.5
17 Share capital
As at 31 March 2026 2026 2025 2025
Number
£m
Number
£m
Issued, called up and fully paid
Ordinary shares of 10p each 2,344,406,347 234.4 2,048,108,416 204.8
The movement in the share capital and share premium of the Company during the
current and previous year is summarised below.
Share capital issued, called up and fully paid Ordinary shares Number Ordinary shares £m Share premium £m
At 31 March 2024 2,036,519,647 203.7 404.7
Issued under scrip share scheme 11,588,769 1.1 21.2
At 31 March 2025 2,048,108,416 204.8 425.9
Issued on acquisition 282,075,415 28.2 -
Issued under scrip share scheme 14,222,516 1.4 25.1
At 31 March 2026 2,344,406,347 234.4 451.0
The Company issued 24,210,964 ordinary shares as consideration for the
acquisition of Highcroft Investments plc on 21 May 2025 and 257,864,451
ordinary shares as consideration for the acquisition of Urban Logistics REIT
Plc on 23 June 2025, as set out in note 15. The share issues qualified for
merger relief and the premium arising of £540.3 million has been added to the
merger relief reserve within other reserves.
The Company issued 14.2 million ordinary shares under the terms of its Scrip
Dividend Scheme during the year. Post year end in April, the Company issued a
further 0.4 million ordinary shares under the terms of its Scrip Dividend
Scheme. The movement in the shares held by the Employee Benefit Trust in the
current and previous year is summarised in the table below.
Shares held by the Employee Benefit Trust Ordinary shares Number Ordinary shares £m
At 31 March 2024 2,589,207 0.3
Shares issued under employee share schemes (1,968,850) (0.2)
Shares acquired by the Employee Benefit Trust 9,852,125 0.9
At 31 March 2025 10,472,482 1.0
Shares issued under employee share schemes (2,189,496) (0.2)
Shares acquired by the Employee Benefit Trust 1,676,429 0.2
At 31 March 2026 9,959,415 1.0
18 Reserves
The nature and purpose of each reserve within equity is described below:
Share capital The nominal value of shares issued.
Share premium The premium paid for new ordinary shares issued above the nominal value.
Capital redemption reserve Amounts transferred from share capital on redemption of issued ordinary
shares.
Other reserve A reserve relating to the application of merger relief in the acquisition of
LondonMetric Management Limited, Metric Property Investments Plc, A&J
Mucklow Group Plc, CT Property Trust Limited, LXi REIT plc, Highcroft
Investments plc and Urban Logistics REIT Plc by the Company, the cost of
shares held in trust to provide for the Company's future obligations under
share award schemes and a foreign currency exchange reserve.
A breakdown of other reserves is provided for the Group below.
Retained earnings The cumulative profits and losses after the payment of dividends.
Other reserves
As at 31 March Merger Employee Foreign 2026 Merger Employee Foreign 2025
relief
Benefit Trust shares
currency exchange reserve
Total other
relief
Benefit Trust shares
currency exchange reserve
Total other reserves
reserve
£m
£m
reserves
reserve
£m
£m
£m
£m
£m
£m
Opening balance 2,337.5 (19.9) 0.1 2,317.7 2,337.5 (5.6) 0.5 2,332.4
Share issue on acquisitions 540.3 - - 540.3 - - - -
Foreign currency exchange - - (0.6) (0.6) - - (0.4) (0.4)
Employee share schemes:
Purchase of shares - (3.1) - (3.1) - (18.2) - (18.2)
Vesting of shares - 4.0 - 4.0 - 3.9 - 3.9
Closing balance 2,877.8 (19.0) (0.5) 2,858.3 2,337.5 (19.9) 0.1 2,317.7
19 Analysis of movement in net debt
Non cash movements
1 April 2025 Acquisition of subsidiaries Debt issue and close out costs and foreign exchange Fair value Interest charge 31 March 2026
£m
Cash flows
£m
£m
movements
and unwinding
£m
£m
£m
of discount
£m
Secured and unsecured loans 2,073.2 415.9 451.2 6.1 - 5.9 2,952.3
Derivative financial instruments (23.7) (1.0) (1.2) - 9.7 - (16.2)
Unamortised finance costs (14.6) (5.3) - 5.2 - - (14.7)
Other finance costs - (6.5) - 6.5 - - -
Interest payable 4.7 (126.6) 4.4 16.9 - 115.1 14.5
Other financial liabilities 231.0 (9.0) - - - 15.1 237.1
Lease liabilities 41.5 (3.7) 10.4 - 5.0 2.4 55.6
Total liabilities from financing activities 2,312.1 263.8 464.8 34.7 14.7 138.5 3,228.6
Cash and cash equivalents (81.2) (62.2) - - - - (143.4)
Net debt 2,230.9 201.6 464.8 34.7 14.7 138.5 3,085.2
Non cash movements
1 April 2024 Debt issue costs and foreign exchange Fair value Interest charge 31 March
£m
Cash flows
£m
movements
and unwinding
£m
£m
of discount 2025
£m
£m
Secured and unsecured loans 2,087.4 (16.7) (2.1) - 4.6 2,073.2
Derivative financial instruments (32.6) (2.2) - 11.1 - (23.7)
Unamortised finance costs (13.3) (5.6) 4.3 - - (14.6)
Other finance costs - (5.3) 5.3 - - -
Interest payable 4.9 (98.7) - - 98.5 4.7
Other financial liabilities 221.5 (8.5) - 4.5 13.5 231.0
Lease liabilities 48.1 (1.6) - (6.7) 1.7 41.5
Total liabilities from financing activities 2,316.0 (138.6) 7.5 8.9 118.3 2,312.1
Cash and cash equivalents (111.9) 30.7 - - - (81.2)
Net debt 2,204.1 (107.9) 7.5 8.9 118.3 2,230.9
20 Related party transactions
a) Joint arrangement
Management fees and distributions receivable from the Group's joint
arrangement during the year were as follows:
Management fees Distributions
For the year to 31 March Group interest 2026 2025 2026 2025
£m
£m
£m
£m
Metric Income Plus Partnership 50% 1.1 1.1 6.3 3.4
Transactions between the Company and its subsidiaries, which are related
parties, have been eliminated on consolidation.
b) Non-controlling interest
The Group's non-controlling interest ('NCI') represents a 31% shareholding in
LMP Retail Warehouse JV Holdings Limited, which owns a portfolio of retail
assets.
The Group's interest in LMP Retail Warehouse JV Holdings Limited is 69%,
requiring it to consolidate the results and net assets of its subsidiary in
these financial statements and reflect the non-controlling share as a
deduction in the consolidated income statement and consolidated balance sheet.
At the year end, LMP Retail Warehouse JV Holdings Limited owed £17.2 million
to the Company, which has been eliminated on consolidation.
As at the year end, the NCI's share of losses and net assets was £0.3 million
(2025: profit of £2.7 million) and £18.6 million (2025: £29.7 million)
respectively. Distributions to the NCI in the year totalled £10.8 million
(2025: £1.0 million).
21 Post balance sheet events
Post year end we have exchanged or completed asset acquisitions and sales for
£39.8 million and £65.5 million respectively, of which £22.8 million of
sales had exchanged in the year.
On 12 May 2026, a joint announcement was made under Rule 2.4 of the City Code
on Takeovers and Mergers regarding a proposed non-binding, indicative
all-share offer by the Company and Schroder Real Estate Investment Trust
Limited ('SREIT') for the entire issued and to be issued share capital of
Picton Property Income Limited ('Picton').
Based on closing share prices on 11 May 2026, the proposed offer implied a
value of approximately £403.4 million for Picton's share capital. Under the
proposed terms, the Company would acquire approximately 46% of Picton's gross
asset value, with the remaining approximately 54% to be acquired by SREIT. No
firm offer has been made and there can be no certainty that a firm offer will
be made.
Supplementary information
(not audited)
i EPRA summary table
2026 2025
EPRA earnings per share 13.5p 13.1p
EPRA net tangible assets per share 200.6p 199.2p
EPRA net disposal value per share 205.6p 204.6p
EPRA net reinstatement value per share 223.2p 220.1p
EPRA vacancy rate 2.3% 1.9%
EPRA cost ratio (including vacant property costs) 7.7% 7.8%
EPRA cost ratio (excluding vacant property costs) 7.1% 7.5%
EPRA loan to value 39.2% 34.7%
EPRA net initial yield 5.1% 5.0%
EPRA 'topped up' net initial yield 5.3% 5.1%
The definition of these measures can be found in the Glossary.
ii EPRA proportionally consolidated income statement
For the year to 31 March 100% JV NCI Total 100% JV NCI Total
owned
£m
£m
2026
£m
£m
£m
£m owned 2025
£m
£m
Gross rental income 461.7 4.1 (2.2) 463.6 395.5 3.9 (2.4) 397.0
Property costs (6.4) (0.3) - (6.7) (4.9) (0.2) 0.1 (5.0)
Net rental income 455.3 3.8 (2.2) 456.9 390.6 3.7 (2.3) 392.0
Management fees and other income 2.9 (0.5) 0.1 2.5 1.2 (0.6) 0.1 0.7
Administrative costs (30.2) - - (30.2) (27.1) - - (27.1)
Net finance (costs)/income¹ (123.9) 0.1 0.5 (123.3) (97.1) 0.1 0.5 (96.5)
Tax (1.0) - 0.4 (0.6) (1.5) - 0.4 (1.1)
EPRA earnings 303.1 3.4 (1.2) 305.3 266.1 3.2 (1.3) 268.0
1 Group net finance costs reflect net borrowing costs of £163.6 million
(2025: £124.5 million) (note 5b) and finance income of £18.0 million (2025:
£23.7 million) (note 5a) less debt and hedging early close out costs of
£16.9 million (2025: £nil) and the impact of inflation volatility relating
to the income strip of £4.8 million (2025: £3.7 million)
The reconciliation of EPRA earnings to IFRS profit is set out below.
100% JV NCI Total 100% JV NCI Total
owned
£m
£m
2026
owned
£m
£m
2025
For the year to 31 March
£m
£m
£m
£m
EPRA earnings 303.1 3.4 (1.2) 305.3 266.1 3.2 (1.3) 268.0
Revaluation of property 68.2 1.3 0.6 70.1 106.0 2.9 (1.4) 107.5
Revaluation of investments (3.6) - - (3.6) 0.9 - - 0.9
Fair value of derivatives (9.7) - - (9.7) (11.1) - - (11.1)
(Loss)/profit on disposal (19.0) - 0.9 (18.1) (13.0) - - (13.0)
Impact of inflation volatility relating to the income strip (4.8) - - (4.8) (3.7) - - (3.7)
Debt and hedging early repayment costs (16.9) - - (16.9) - - - -
Goodwill impairment (9.6) - - (9.6) - - - -
Acquisition costs (16.3) - - (16.3) - - - -
Deferred tax (0.7) - - (0.7) (0.7) - - (0.7)
IFRS reported profit 290.7 4.7 0.3 295.7 344.5 6.1 (2.7) 347.9
iii EPRA proportionally consolidated balance sheet
As at 31 March 100% JV NCI Total 100% JV NCI Total
owned
£m
£m
2026
owned
£m
£m
2025
£m
£m
£m
£m
Investment property 7,819.0 65.5 (21.3) 7,863.2 6,383.9 69.9 (38.1) 6,415.7
Assets held for sale 47.8 - - 47.8 10.4 - - 10.4
Trading property 1.1 - - 1.1 1.1 - - 1.1
7,867.9 65.5 (21.3) 7,912.1 6,395.4 69.9 (38.1) 6,427.2
Gross debt (2,952.3) - - (2,952.3) (2,073.2) - - (2,073.2)
Cash 143.4 3.0 (1.6) 144.8 81.2 2.8 (0.8) 83.2
Other net liabilities (409.8) (1.0) 4.3 (406.5) (374.6) (0.8) 9.2 (366.2)
EPRA net tangible assets 4,649.2 67.5 (18.6) 4,698.1 4,028.8 71.9 (29.7) 4,071.0
Derivatives 16.2 - - 16.2 23.7 - - 23.7
Deferred tax movement - - - - (0.5) - - (0.5)
IFRS equity shareholders' funds 4,665.4 67.5 (18.6) 4,714.3 4,052.0 71.9 (29.7) 4,094.2
IFRS net assets 4,665.4 67.5 - 4,732.9 4,052.0 71.9 - 4,123.9
Loan to value 36.7% - - 36.7% 32.7% - - 32.7%
Cost of debt 4.0% - - 4.0% 4.0% - - 4.0%
Undrawn facilities 515.0 - - 515.0 831.1 - - 831.1
iv EPRA cost ratio
For the year to 31 March 2026 2025
£m
£m
Property operating expenses 6.4 4.9
Administrative costs 30.2 27.1
Share of joint venture and NCI property costs, administrative costs and 0.7 0.6
management fees
Less:
Property management fees (0.9) (1.2)
Ground rents (1.7) (1.3)
Total costs including vacant property costs (A) 34.7 30.1
Vacant property costs (2.5) (1.1)
Total costs excluding vacant property costs (B) 32.2 29.0
Gross rental income 461.7 395.5
Other income 2.0 -
Share of joint venture gross rental income 4.1 3.9
Share of NCI gross rental income (2.2) (2.4)
465.6 397.0
Less:
Ground rents and income strip (13.2) (11.7)
Total gross rental income (C) 452.4 385.3
Total EPRA cost ratio (including vacant property costs) (A)/(C) 7.7% 7.8%
Total EPRA cost ratio (excluding vacant property costs) (B)/(C) 7.1% 7.5%
v EPRA net initial yield and 'topped up' net initial yield
As at 31 March 2026 2025
£m
£m
Investment property - wholly owned1 7,575.3 6,122.4
Investment property - share of joint ventures 65.5 69.9
Trading property 1.1 1.1
Less development properties (101.2) (16.5)
Less non-controlling interest (21.3) (38.1)
Completed property portfolio 7,519.4 6,138.8
Allowance for:
Estimated purchasers' costs 511.3 417.4
Estimated costs to complete 42.4 25.3
EPRA property portfolio valuation (A) 8,073.1 6,581.5
Annualised passing rental income 412.6 326.8
Share of joint ventures 3.7 4.0
Less development properties (1.4) -
Annualised net rents (B) 414.9 330.8
Contractual rental increase across the portfolio 9.7 4.1
'Topped up' net annualised rent (C) 424.5 334.9
EPRA net initial yield (B/A) 5.1% 5.0%
EPRA 'topped up' net initial yield (C/A) 5.3% 5.1%
1 Wholly owned investment property includes assets held for sale of £47.8
million (2025: £10.4 million)
vi EPRA vacancy rate
As at 31 March 2026 2025
£m
£m
Annualised estimated rental value of vacant premises 11.1 7.1
Portfolio estimated rental value¹ 476.6 368.9
EPRA vacancy rate 2.3% 1.9%
1 Excludes development properties
vii EPRA capital expenditure analysis
As at 31 March 100% JV NCI Total 100% JV NCI Total
owned5
£m
£m
2026
owned5
£m
£m
2025
£m
£m
£m
£m
Opening valuation 6,395.4 69.9 (38.1) 6,427.2 6,241.8 67.1 (36.4) 6,272.5
Acquisitions1 1,526.6 - - 1,526.6 284.7 - - 284.7
Developments2,4 95.8 - - 95.8 20.5 - - 20.5
Investment properties
- incremental lettable space3 2.3 - - 2.3 13.6 - - 13.6
- no incremental lettable space3 11.7 1.9 (0.7) 12.9 10.0 0.2 (0.2) 10.0
- tenant incentives(9) 48.5 (0.1) 0.3 48.7 44.2 (0.3) (0.1) 43.8
Capitalised interest4 3.5 - - 3.5 3.4 - - 3.4
Total EPRA capex 1,688.4 1.8 (0.4) 1,689.8 376.4 (0.1) (0.3) 376.0
Disposals⁶ (303.4) (7.5) 16.6 (294.3) (323.7) - - (323.7)
Revaluation⁷ 62.1 1.3 0.6 64.0 101.0 2.9 (1.4) 102.5
Foreign currency 5.8 - - 5.8 (2.9) - - (2.9)
Income strip gross up(7,8) 6.1 - - 6.1 9.5 - - 9.5
ROU asset 13.5 - - 13.5 (6.7) - - (6.7)
Closing valuation 7,867.9 65.5 (21.3) 7,912.1 6,395.4 69.9 (38.1) 6,427.2
1 Group acquisitions in the year include completed investment properties as
reflected in note 9 to the financial statements
2 Group developments include acquisitions, capital expenditure and lease
incentive movements on properties under development as reflected in note 9
after excluding capitalised interest noted in footnote 4 below
3 Group capital expenditure on completed properties, as reflected in note 9
to the financial statements after excluding capitalised interest noted in
footnote 4 below
4 Capitalised interest on investment properties of £0.9 million (2025:
£1.1 million) and development properties of £2.6 million (2025: £2.3
million)
5 Including trading property of £1.1 million (2025: £1.1 million) and
assets held for sale of £47.8 million (2025: £10.4 million)
6 Group disposals include assets held for sale
7 Group revaluation and income strip movements are reflected together as
profit on revaluation of investment properties in the income statement of
£68.2 million (2025: £106.0 million)
8 Prior year movement of £9.5 million comprises an adjustment of £4.5
million to incorporate an inflation adjustment and a gross up of £5.0 million
which is included in the income statement
9 Reflects rent free movements, rent smoothing of fixed and minimum uplifts
and amortisation of incentives
viii Total accounting return
For the year to 31 March 2026 2025
pence per share
pence per share
EPRA net tangible assets per share
- at end of year 200.6 199.2
- at start of year 199.2 191.7
Increase in the year 1.4 7.5
Dividend paid 12.4 11.1
Total increase 13.8 18.6
Total accounting return1 6.9% 9.7%
1 Total accounting return after adjusting for M&A costs is 7.7%
ix Portfolio split and valuation
As at 31 March 100% JV NCI 2026 2026 2025 2025
owned
£m
£m
£m
%
£m
%
£m
Mega distribution 316.5 - - 316.5 4.2 315.1 5.1
Regional distribution 802.8 - - 802.8 10.5 726.8 11.8
Urban logistics 2,904.4 - - 2,904.4 38.1 1,796.0 29.2
Logistics 4,023.7 - - 4,023.7 52.8 2,837.9 46.1
Convenience 1,010.6 65.5 (21.3) 1,054.8 13.8 977.7 15.9
Entertainment & leisure 1,539.6 - - 1,539.6 20.2 1,297.8 21.1
Healthcare & education 921.5 - - 921.5 12.1 931.1 15.1
Long income 3,471.7 65.5 (21.3) 3,515.9 46.1 3,206.6 52.1
Other 81.0 - - 81.0 1.1 110.8 1.8
Total property portfolio 7,576.4 65.5 (21.3) 7,620.6 100.0 6,155.3 100.0
Income strip gross up¹ 237.1 - - 237.1 231.0
Head lease assets 54.4 - - 54.4 40.9
7,867.9 65.5 (21.3) 7,912.1 6,427.2
1 Represents the gross up of assets associated with the sale of a 65 year
income strip of Alton Towers and Thorpe Park in 2022, as reflected in note
14a(ii)
x Investment portfolio yields
As at 31 March EPRA NIY EPRA 2026 Equivalent EPRA NIY EPRA 2025 Equivalent
%
topped up NIY
yield
%
topped up NIY
yield
%
%
%
%
Logistics 4.8 5.0 6.2 4.6 4.6 5.8
Long income 5.5 5.6 6.7 5.5 5.5 6.7
Other 5.4 5.6 7.4 4.9 4.9 6.9
Investment portfolio 5.1 5.3 6.4 5.0 5.1 6.3
xi Investment portfolio - Key statistics
As at 31 March 2026 Area WAULT WAULT Occupancy Average rent
'000 sq ft
to expiry
to first break
%
£ per sq ft
years
years
Logistics 27,326 10.3 8.7 96.7 8.1
Long income(1) 8,773 23.3 22.0 98.8 20.0
Other 502 18.5 18.2 100.0 9.4
Investment portfolio 36,601 16.9 15.5 97.7 11.0
1 Due to having minimal internal areas, car parks and theme parks have been
excluded from the long income average rent per sq ft
xii Total property returns
For the year to 31 March All property All property
2026
2025
%
%
Capital return 1.4 2.5
Income return 5.6 5.7
Total return 7.1 8.3
xiii Net contracted rental income¹
As at 31 March 2026 2025
£m
£m
Logistics 210.7 142.7
Long income 209.0 189.5
Other 4.8 6.0
Investment portfolio 424.5 338.2
Development 7.6 2.2
Total portfolio 432.1 340.4
1 Contracted rent net of income strip and head lease payments
xiv Rent subject to expiry
As at 31 March 2026 Within Within Within Within Within Within
3 years
5 years
10 years
15 years
20 years
25 years
%
%
%
%
%
%
Logistics 13.0 24.3 56.3 81.4 92.3 97.2
Long income 2.3 6.5 15.6 45.1 60.3 67.8
Other 6.0 14.8 26.1 30.8 30.8 90.7
Investment portfolio 7.5 15.3 35.5 62.6 75.5 82.3
xv Contracted rent subject to inflationary or fixed uplifts
As at 31 March 2026 2026 2025 2025
£m
%
£m
%
Logistics 103.1 48.7 85.4 59.6
Long income 194.2 88.7 179.4 90.1
Other 2.9 60.0 4.2 70.0
Investment portfolio 300.2 69.0 269.0 77.2
xvi Top ten assets (by value)
As at 31 March 2026 Area Net contracted Occupancy WAULT WAULT
'000
rent
%
to expiry
to first break
sq ft
£m
years
years
Alton Towers Park n/a 9.9 100 51.3 51.3
Ramsay Rivers Hospital 193 10.2 100 11.1 11.1
Thorpe Park n/a 7.4 100 51.3 51.3
Bedford Link, Bedford 715 6.0 100 15.2 13.4
Primark, Islip 1,062 6.2 100 14.5 14.5
Great Bear, Dagenham 454 4.8 100 17.5 17.5
Ramsay Springfield Hospital 85 5.9 100 11.1 11.1
Heide Park n/a 6.0 100 51.4 51.4
Argos, Bedford 658 4.8 100 8.0 8.0
THG, Warrington 686 4.7 100 18.7 18.7
xvii Top ten occupiers
As at 31 March 2026 Net contracted Net contracted
rental income
rental income
£m
%
Ramsay Health Care 39.4 9.1
Merlin Entertainments 33.6 7.8
Travelodge 21.1 4.9
Premier Inn 14.0 3.3
Booker 9.7 2.2
Marks & Spencer 8.1 1.9
Great Bear 7.0 1.6
Tesco 6.6 1.5
Primark 6.2 1.4
Amazon 5.7 1.3
Total 151.4 35.0
xviii Loan to value
As at 31 March 100% owned JV NCI 2026 2025
£m
£m
£m
£m
£m
Gross debt 2,952.3 - - 2,952.3 2,073.2
Less: Fair value adjustments 24.9 - - 24.9 17.4
Less: Cash balances (143.4) (3.0) 1.6 (144.8) (83.2)
Net debt 2,833.8 (3.0) 1.6 2,832.4 2,007.4
Acquisitions exchanged in the year - - - - 14.7
Disposals exchanged in the year1 (53.9) - - (53.9) (10.6)
Adjusted net debt (A) 2,779.9 (3.0) 1.6 2,778.5 2,011.5
Exclude:
Acquisitions exchanged in the year - - - - (14.7)
Disposals exchanged in the year1 53.9 - - 53.9 10.6
Include:
Net payables 153.7 1.0 1.0 155.7 129.3
EPRA net debt (B) 2,987.5 (2.0) 2.6 2,988.1 2,136.7
Investment properties at fair value 7,527.5 65.5 (21.3) 7,571.7 6,143.8
Properties held for sale 47.8 - - 47.8 10.4
Trading properties 1.1 - - 1.1 1.1
Total property portfolio 7,576.4 65.5 (21.3) 7,620.6 6,155.3
Acquisitions exchanged in the year - - - - 14.7
Disposals exchanged in the year2 (47.8) - - (47.8) (10.4)
Adjusted property portfolio (C) 7,528.6 65.5 (21.3) 7,572.8 6,159.6
Exclude:
Acquisitions exchanged in the year - - - - (14.7)
Disposals exchanged in the year2 47.8 - - 47.8 10.4
Include:
Financial assets 5.3 - - 5.3 8.9
EPRA property portfolio (D) 7,581.7 65.5 (21.3) 7,625.9 6,164.2
Loan to value (A)/(C) 36.7% 32.7%
EPRA Loan to value (B)/(D) 39.2% 34.7%
1 Reflects disposal proceeds of assets held for sale of £48.4 million and
other completed sales of £5.5 million
2 Reflects the book value of assets held for sale of £47.8 million as
stated in note 9b
xix Acquisitions and disposals
As at 31 March 2026 2025
£m
£m
Acquisition costs
Completed in the year 1,526.6 284.7
Exchanged in the previous year (14.7) (2.3)
Exchanged but not completed in the year - 14.7
Forward funded investments classified as developments 49.9 58.6
Transaction costs and other (13.2) (12.6)
Exchanged in the year 1,548.6 343.1
Disposal proceeds
Completed in the year - Group 288.4 322.5
Completed in the year - share of JV and NCI (12.8) -
Exchanged in the previous year (15.3) (9.3)
Exchanged but not completed/received in the year1 53.9 15.3
Transaction costs and other 3.9 13.4
Exchanged in the year 318.1 341.9
1 Reflects disposal proceeds of assets held for sale of £48.4 million and
other completed sales of £5.5 million (2025: £15.3 million)
xx Cash earnings cover
For the year to 31 March Note 2026
£m
EPRA earnings 8 305.3
Rent free and amortisation adjustments1 9 (51.2)
Capitalised costs2 4,5 (5.5)
Share based payment 4 5.7
Unwinding of discount on fixed rate debt acquired 5 5.9
Amortisation of loan issue costs 5 5.2
Movement rent provisions 11 0.5
Other 10.5
Cash earnings A 276.4
Dividend charge for the year net of scrip saving3 B 275.9
Cash earnings cover A/B 100%
1 Reflects the smoothing of rent free periods and fixed and minimum uplifts
2 Capitalised interest of £3.5 million (note 5) and staff costs of £2.0
million (note 4)
3 Based on the average scrip take up over the preceding 12 months of 5%
Glossary
Building Research Establishment Environmental Assessment Methodology ('BREEAM')
An assessment and certification method for buildings.
Carbon Neutral
Companies, processes, and buildings become carbon neutral when they calculate
their carbon emissions and compensate for what they have produced via carbon
offsetting projects.
Capital Return
The valuation movement on the property portfolio adjusted for capital
expenditure and expressed as a percentage of the capital employed over the
period.
Chief Operating Decision Makers ('CODMs')
The Executive Directors, Senior Leadership Team members and other senior
managers.
CO(2)e
Carbon dioxide equivalents (CO(2)e) provide a unit for expressing greenhouse
gas (GHG) emissions, converting gases such as methane and nitrous oxide into
the equivalent amount of carbon dioxide (CO(2)) based on their warming
potential. Emissions are reported in kilograms or tonnes of CO(2) equivalent
(kgCO(2)e and tCO(2)e).
Code
The UK Corporate Governance Code published by the Financial Reporting Council
in January 2024, publicly available at www.frc.org.uk which sets out
principles of good corporate governance for listed companies. The 2024 Code
applies to financial years beginning on or after 1 January 2025, other than
Provision 29 which will apply to financial years beginning on or after 1
January 2026.
Contracted Rent
The annualised rent excluding rent free periods.
Cost of Debt
Weighted average interest rate payable.
CRREM Modelling
The Carbon Risk Real Estate Monitor ('CRREM') tool models an asset's
performance to determine the year it will become 'stranded'. Stranding is the
point in time when the asset will not meet future energy efficiency standards
and whose energy upgrade will not be financially viable.
Debt Maturity
Weighted average period to expiry of debt drawn.
Distribution
The term is used synonymously with 'Logistics' and means the organisation and
implementation of operations to manage the flow of physical items from origin
to the point of consumption by the end user.
Embodied Carbon
Embodied carbon refers to the emissions associated with materials and
construction processes throughout the whole life cycle of a building or
infrastructure. It is typically associated with any processes, materials, or
products used to construct, maintain, repair, refurbish, and repurpose a
building. LondonMetric's development-related emissions account only for
upfront embodied carbon, which refers to the emissions up to practical
completion before the building begins to be used by an occupier.
Energy Performance Certificate ('EPC')
Required certificate whenever a property is built, sold or rented. An EPC
gives a property an energy efficiency rating from A (most efficient) to G
(least efficient) and is valid for ten years. An EPC contains information
about a property's energy use and typical energy costs, and recommendations
about how to reduce energy use and save money.
EPRA Cost Ratio
Administrative and operating costs (including and excluding costs of direct
vacancy) as a percentage of gross rental income.
EPRA Earnings per share ('EPS')
Earnings from the Group's property rental business divided by the weighted
average number of shares in issue over the period.
EPRA Loan to Value ('LTV')
Net debt and net current payables if applicable, divided by the total property
portfolio value including net current receivables if applicable and financial
assets due from the non-controlling interest.
EPRA Net Disposal Value per share
Represents the shareholders' value under a disposal scenario, where assets are
sold and/or liabilities are not held to maturity. Therefore, this measure
includes an adjustment to mark to market the Group's fixed rate debt and
public bond.
EPRA Net Reinstatement Value per share
This reflects the value of net assets required to rebuild the entity, assuming
that entities never sell assets. Assets and liabilities, such as fair value
movements on financial derivatives that are not expected to crystallise in
normal circumstances, are excluded. Investment property purchasers' costs are
included.
EPRA Net Tangible Assets per share ('NTA')
This reflects the value of net assets on a long term, ongoing basis assuming
entities buy and sell assets. Assets and liabilities, such as fair value
movements on financial derivatives that are not expected to crystallise in
normal circumstances, are excluded.
EPRA Net Initial Yield
Annualised rental income based on cash rents passing at the balance sheet
date, less non recoverable property operating expenses, expressed as a
percentage of the market value of the property, after inclusion of estimated
purchaser's costs.
EPRA Topped Up Net Initial Yield
EPRA net initial yield adjusted for expiration of rent free periods or other
lease incentives such as discounted rent periods and stepped rents.
EPRA Vacancy
The Estimated Rental Value ('ERV') of immediately available vacant space as a
percentage of the total ERV of the Investment Portfolio.
Equivalent Yield
The weighted average income return expressed as a percentage of the market
value of the property, after inclusion of estimated purchaser's costs.
ESOS
Energy Savings Opportunity Scheme ('ESOS') is a mandatory energy assessment
scheme designed to identify tailored, cost effective measures that enable
participating organisations to save energy and reduce carbon emissions and
costs.
Estimated Rental Value ('ERV')
The external valuers' opinion of the open market rent which, on the date of
valuation, could reasonably be expected to be obtained on a new letting or
rent review of a property.
European Public Real Estate Association ('EPRA')
EPRA is the industry body for European Real Estate Investment Trusts
('REITs').
European Single Electronic Format ('ESEF')
ESEF is the electronic reporting format required from 1 January 2021 to
facilitate access, analysis and comparison of annual financial reports.
Financial Conduct Authority ('FCA')
The Financial Conduct Authority is a regulatory body, operating independently
of the UK Government, which regulates financial firms providing services to
consumers and maintains the integrity of the financial markets in the UK.
GHG
Greenhouse gases ('GHG') are gases that contribute directly to climate change
by trapping heat in the Earth's atmosphere. The most common of these gases is
carbon.
Green Lease
A green lease is a standard form lease with additional clauses that provide
for the management and improvement of a building's environmental performance
by both owner and occupier(s). For LondonMetric, this includes clauses around
data sharing, EPC rating preservation, smart metering, and yielding up.
GRESB
Global Real Estate Sustainability Benchmark ('GRESB') is an investor-driven
global sustainability benchmark and reporting framework for property
companies, funds, developers, and investors in real estate.
Gross Rental Income
Rental income for the period from let properties reported under IFRS, after
accounting for lease incentives and rent free periods. Gross rental income
will include, where relevant, turnover based rent, surrender premiums and car
parking income.
Group
LondonMetric Property Plc and its subsidiaries.
Highcroft Investments plc ('Highcroft')
Incorporated in the UK with company number 00224271.
Highcroft Acquisition/Takeover
The acquisition of the entire issued share capital of Highcroft Investments
plc implemented by way of a Scheme of Arrangement under Part 26 of the
Companies Act 2006.
IFRS
The International Financial Reporting Standards issued by the International
Accounting Standards Board and adopted by the UK.
IFRS Net Assets
The Group's equity shareholders' funds at the period end including the net
assets attributable to the non-controlling interest.
IFRS Net Assets per share
IFRS net assets divided by the number of shares in issue at the balance sheet
date.
IFRS Reported Profit
The Group's equity shareholders' profit for the period excluding the profit
for the period attributable to the non-controlling interest.
Income Return
Net rental income expressed as a percentage of capital employed over the
period.
Income Strip
Through the sale of a 65 year income strip of Alton Towers and Thorpe Park in
2022, the Group has an obligation to pay rental income equivalent to 30% of
the annual rental income received from the tenant and the ability to acquire
the freehold back in 2087 for £1.
Investment Portfolio
The Group's property portfolio excluding development, land holdings and
residential properties.
Investment Property Databank ('IPD')
IPD is a wholly owned subsidiary of MSCI producing an independent benchmark of
property returns and the Group's portfolio returns.
IPCC
The Intergovernmental Panel on Climate Change ('IPCC') is the United Nations
body for assessing the science related to climate change. They developed the
Representative Concentration Pathways ('RCPs'), which describe four different
21st-century pathways of greenhouse gas ('GHG') emissions and atmospheric
concentrations, air pollutant emissions and land use.
Like for Like Income Growth ('LFL')
The movement in contracted rental income on properties owned through the
period under review, excluding properties held for development and
residential.
Listing Rules
The listing rules of the FCA made under the Financial Services and Markets Act
2000 as amended from time to time.
Loan to Value ('LTV')
Net debt expressed as a percentage of the total property portfolio value at
the period end, adjusted for deferred completions on sales and acquisitions
that exchanged in the period.
Logistics
The term is used synonymously with 'Distribution' and means the organisation
and implementation of operations to manage the flow of physical items from
origin to the point of consumption by the end user.
Low carbon heating
Low carbon heating refers to systems that reduce the reliance on fossil fuels
and their associated carbon emissions to heat properties. These include but
are not limited to heat pumps, electric boilers, biomass boilers, micro-CHP
systems, solar water heating, and other hybrid systems.
LXi Acquisition/Merger
The acquisition of the entire issued share capital of LXi REIT plc implemented
by way of a Scheme of Arrangement under Part 26 of the Companies Act 2006 and
deemed a reverse takeover and Class 1 transaction pursuant to the Listing
Rules.
LXi REIT plc ('LXi')
LXi REIT plc (now LXi Limited). Incorporated in the UK with company number
10535081.
MEES
The Minimum Energy Efficiency Standards ('MEES') Regulations establish a
minimum level of energy efficiency for rented property in England and Wales.
From April 2023, they require private rented properties to have a minimum
Energy Performance Certificate ('EPC') rating of E unless they have registered
a valid exemption. This is set to rise to EPC 'B' by 2030.
Net Debt
The Group's secured and unsecured loans net of cash balances at the period
end.
Net Rental Income
Gross rental income receivable after deduction for ground rents and other net
property outgoings including void costs and net service charge expenses.
Net Zero
Companies, processes, and buildings become Net Zero when they reduce their
absolute carbon emissions to a minimum, with only the remaining hard-to-abate
residual emissions being offset.
NNN
NNN, or Triple Net Lease, is a type of lease agreement commonly used in
commercial real estate. In a NNN lease, the tenant is responsible for paying
key expenses in addition to the base rent.
NNN REIT
Also known as Triple Net Lease Real Estate Investment Trust, is a type of real
estate investment trust ('REIT') that specialises in properties leased to
tenants under triple net leases. In a triple net lease, the tenant agrees to
pay all ongoing operating expenses associated with the property, in addition
to rent and utilities.
Occupancy Rate
The ERV of the let units as a percentage of the total ERV of the Investment
Portfolio.
Operational Control Consolidated Approach
Under the operational control consolidated approach, a company accounts for
100% of emissions from operations over which it or one of its subsidiaries has
operational control. It does not account for GHG emissions from operations in
which it owns an interest but has no control.
Passing Rent
The gross rent payable by tenants under operating leases, less any ground rent
payable under head leases and the income strip.
Property Income Distribution ('PID')
Dividends from profits of the Group's tax-exempt property rental business
under the REIT regulations. The PID dividend is paid after deducting
withholding tax at the basic rate.
Real Estate Investment Trust ('REIT')
A listed property company which qualifies for and has elected into a tax
regime which is exempt from corporation tax on profits from property rental
income and UK capital gains on the sale of investment properties.
REGOs
Renewable Energy Guarantees of Origin Certificates ('REGOs') demonstrate that
electricity has been generated from renewable sources.
Total Accounting Return ('TAR')
The movement in EPRA Net Tangible Assets per share plus the dividend paid
during the period expressed as a percentage of the EPRA net tangible assets
per share at the beginning of the period.
Total Property Return ('TPR')
Unlevered weighted capital and income return of the property portfolio as
calculated by MSCI.
Total Shareholder Return ('TSR')
The movement in the ordinary share price as quoted on the London Stock
Exchange plus dividends per share assuming that dividends are reinvested at
the time of being paid.
Triple Net Lease
Triple Net Lease, or NNN, is a type of lease agreement commonly used in
commercial real estate. In a NNN lease, the tenant is responsible for paying
key expenses in addition to the base rent.
Triple Net Lease REIT
Also known as NNN REIT, is a type of real estate investment trust ('REIT')
that specialises in properties leased to tenants under triple net leases. In a
triple net lease, the tenant agrees to pay all ongoing operating expenses
associated with the property, in addition to rent and utilities.
UK Sustainability Reporting Standards ('SRS')
UK SRS S1 and UK SRS S2 set out a framework for corporate disclosures. UK SRS
S1 includes the general framework for applying UK SRS, as well as requirements
on general sustainability-related risks and opportunities. UK SRS S2 sets out
requirements on climate-related risks and opportunities.
Urban Logistics REIT Plc ('ULR' or 'Urban Logistics REIT')
Urban Logistics REIT Plc (now Urban Logistics REIT Limited). Incorporated in
the UK with company number 09907096.
ULR Acquisition/Takeover
The acquisition of the entire issued share capital of Urban Logistics REIT Plc
implemented by way of a Scheme of Arrangement under Part 26 of the Companies
Act 2006.
Weighted Average Interest Rate
The total loan interest and derivative costs per annum (including the
amortisation of finance costs) divided by the total debt in issue at the
period end.
Weighted Average Unexpired Lease Term ('WAULT')
Average unexpired lease term across the Investment Portfolio weighted by
Contracted Rent.
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