REG - Warehouse REIT PLC - Final Results for Year Ended 31 March 2025
Wed 07:00
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RNS Number : 2928M Warehouse REIT PLC 11 June 2025
11 June 2025
Warehouse REIT plc
(the "Company" or "Warehouse REIT", together with its subsidiaries, the
"Group")
Full year results for the 12 months ended 31 March 2025
Strong operational performance and delivery of strategic initiatives
Neil Kirton, Chairman of Warehouse REIT commented: "Throughout the financial
year the Board has focused on the continued execution of our strategic plan -
the key objectives being to reduce debt and move towards dividend cover. In a
day-to-day sense, our occupational markets have continued to be resilient, and
well-located, quality space has continued to be in short supply. We have
driven rental growth through our active asset management, and our portfolio
continues to provide attractive opportunities to capture reversion over
time.
"Despite the Company's strong operational performance and the Board's
continued conviction that we are invested in a very attractive asset class,
given our size, the low liquidity of our shares, and with other, risk-free
asset classes offering attractive returns, we have traded at a significant
discount to net asset value for some time. It is in that context that the
Board has evaluated an offer for the Company."
Portfolio valuation uplift driven by outperformance of strategically located
multi-let assets
· Like-for-like portfolio valuation up 3.8% to £805.4 million (31
March 2024: £810.2 million)
o Multi-let assets, which now comprise 80.3% of the portfolio, up 7.1%
o Equivalent yield of 6.4% (31 March 2024: 6.5%)
o Development land down 14.7%, weighted towards the first half
o Like-for-like growth in estimated rental values of 6.8%, driven by strong
leasing activity
· EPRA NTA per share up 2.9% to 128.0p (31 March 2024: 124.4p)
delivering a total accounting return of 8.0% (FY24: 6.7%)
Resilient demand for well-located multi-let space, with leasing activity 24.4%
ahead of previous rents and £3.7 million of new contracted rent added
· 105 lease events over 1.9 million sq ft, securing £14.1 million
of contracted rent, comprising:
o £2.0 million from 38 new lettings, 31.7% ahead of previous contracted
rent;
o £4.9 million from 42 renewals, 28.5% ahead of previous contracted rent;
and
o £7.2 million from 25 rent reviews, 20.1% ahead of previous contracted
rent; 31.5% excluding contracted uplifts
· Highly reversionary portfolio with £6.1 million or 14.3% of
potential rental reversion and a further £4.6 million of potential rent on
vacant space, taking the total reversionary potential to 25.2%
· Occupancy down to 93.7% (FY24: 96.4%) reflecting expected vacancy at a
small number of larger units; effective occupancy, which excludes units under
offer or undergoing refurbishment of 97.7%
Improved financial performance and successful execution of earnings accretive
initiatives
· IFRS Profit after tax up 21.6% to £41.7 million
· Operating profit flat at £35.0 million; adjusted EPS up 8.3% at
5.2p (31 March 2024: 4.8p)
· Strategic initiatives, including £300 million debt refinancing on
improved terms and amendment to Investment Management Agreement to deliver
cost savings in the current financial year
· 92.9% debt hedged against interest rate volatility with no major
refinancing until 2028
· LTV at 32.4% in-line with stated target, with significant headroom of
£31.0 million in cash and available facilities
Further progress on disposals, recycling capital into value-accretive
opportunities
· £85.7 million of sales (headline), 0.7% ahead of book value;
£0.5 million loss on disposal, post costs; blended NIY on passing rent of
assets sold of 6.7%
· Total sales of £193.4 million since disposal plan announced in
November 2022
· £38.6 million acquisition of Ventura Retail Park, Tamworth, NIY
of 7.4%; now valued at £43.5 million
· Exchanged on the acquisition of Rycote Lane, a multi-let industrial
estate near Thame for £34.75 million, announced 4 June 2025
Progressing our sustainability strategy
· 68.7% of the portfolio EPC A+ to C rated (31 March 2024: 66.6%)
· EPRA sBPR Gold for the fourth year and improvement in our MSCI
rating from BB to BBB
Offer for the Company
· On 4 June 2025, the Board of Warehouse REIT and Wapping Bidco Ltd, a
newly-formed company indirectly owned by investment funds advised by
affiliates of Blackstone Inc ("Blackstone") announced that they had reached an
agreement regarding an all cash offer for the entire issued and to be issued
share capital of Warehouse REIT at 109 pence per share
Financial highlights
Year ended 31 March 2025 2024
Gross property income £48.6m £47.1m
Operating profit before change in value of investment properties £35.0m £35.0m
IFRS profit/(loss) before tax £41.7m £34.3m
IFRS earnings per share 9.8p 8.1p
EPRA earnings per share* 5.1p 4.8p
Adjusted earnings per share 5.2p 4.8p
Dividends paid per share 6.4p 6.4p
Total accounting return 8.0% 6.7%
Total cost ratio including direct vacancy costs 28.1% 24.4%
As at 31 March 2025 31 March 2024
Portfolio valuation £805.4m £810.2m
IFRS net asset value £550.1m £535.6m
IFRS net asset value per share 129.5p 126.1p
EPRA net tangible assets ("NTA") per share 128.0p 124.4p
Loan to value ("LTV") ratio 32.4% 33.1%
*Comparative restated in-line with new EPRA earnings guidance issued Sept 2024
Investment portfolio statistics
As at 31 March 2025 31 March 2024
Contracted rent £42.5m £44.6m
ERV £53.2m £53.5m
Passing rent £40.8m £42.9m
WAULT to expiry 5.0 years 5.0 years
WAULT to first break 3.5 years 4.1 years
Occupancy 93.7% 96.4%
Enquiries
Warehouse REIT plc
via FTI Consulting
Tilstone Partners Limited
Simon Hope, Peter Greenslade, Paul Makin, Jo Waddingham
+44 (0) 1244 470 090
G10 Capital Limited (part of the IQEQ Group, AIFM)
Maria Baldwin
+44 (0) 207 397 5450
FTI Consulting (Financial PR and IR Advisor to the Company)
Dido Laurimore, Richard Gotla, Oliver Parsons
+44 (0) 7904 122207 / WarehouseReit@fticonsulting.com
Further information on Warehouse REIT is available on its website:
warehousereit.co.uk
(https://tilstone.sharepoint.com/whreit/corp/finance/annacc/2024/H1/warehousereit.co.uk)
Notes
Warehouse REIT is a UK Real Estate Investment Trust that invests in UK
warehouses, focused on multi-let assets in industrial hubs across the UK.
We provide a range of warehouse accommodation in key locations, which meets
the needs of a broad range of occupiers. Our focus on multi-let assets means
we provide occupiers with greater flexibility so we can continue to match
their requirements as their businesses evolve, encouraging them to stay with
us for longer.
We invest in our business by selectively acquiring assets with potential and
by delivering opportunities we have created. Through pro-active asset
management we unlock the value inherent in our portfolio, helping to capture
rising rents and driving an increase in capital values to deliver strong
returns for our investors over the long term.
Sustainability is embedded throughout our business, helping us meet the
expectations of our stakeholders today and futureproofing our business for
tomorrow.
The Company is an alternative investment fund ("AIF") for the purposes of the
AIFM Directive and, as such, is required to have an investment manager who is
duly authorised to undertake the role of an alternative investment fund
manager ("AIFM"). The AIFM and the Investment Manager is currently G10 Capital
Limited (Part of the IQEQ Group).
Forward-looking statements
Certain information contained in these half-year results may constitute
forward-looking information. This information relates to future events or
occurrences or the Company's future performance. All information other than
information of historical fact is forward-looking information. The use of any
of the words "anticipate", "plan", "continue", "estimate", "expect", "may",
"will", "project", "should", "believe", "predict" and "potential" and similar
expressions are intended to identify forward-looking information. This
information involves known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from those
anticipated in such forward-looking information. No assurance can be given
that this information will prove to be correct, and such forward looking
information included in this announcement should not be relied upon.
Forward-looking information speaks only as of the date of this announcement.
The forward-looking information included in this announcement is expressly
qualified by this cautionary statement and is made as of the date of this
announcement. The Company and its Group do not undertake any obligation to
publicly update or revise any forward-looking information except as required
by applicable securities laws.
CHAIRMAN'S STATEMENT
Throughout the financial year the Board has focused on the continued execution
of our strategic plan - the key objectives being to reduce debt and move
towards dividend cover. In a day-to-day sense, our occupational markets have
continued to be resilient, and well-located, quality space has continued to be
in short supply. We have driven rental growth through our active asset
management, and our portfolio continues to provide attractive opportunities to
capture reversion over time.
At a Board level we have been focussed on three major areas of significance to
shareholders.
First, in my last statement to you I made reference to the financial basis on
which many REIT Boards engaged asset managers and that in conjunction with
Tilstone, we were reviewing our own arrangements. I was delighted that the
Board and Tilstone were able to agree an amendment to the Investment
Management Agreement, which we announced in February. This amendment connects
the financial rewards for the Investment Advisor with market capitalisation
and is a significant change which further increases alignment between our
Shareholders and Tilstone. At the time of the announcement, we estimated that
this represented a £1.7 million saving in the current year, which would flow
straight to earnings and have a positive impact on our dividend cover. The
Board felt strongly, that this combination of lower fees and increased
alignment would serve to mitigate some investor reservations about external
structures and make Warehouse REIT a more attractive investment proposition
for both existing and potential shareholders. In addition, as I have mentioned
before, your agreement with Tilstone is one of exclusivity which I believe has
significant value for Warehouse REIT shareholders.
Secondly, during March we announced a refinancing of our debt arrangements. We
cover this in more detail elsewhere in our Report but with annualised cost
savings of £1.2 million, equating to an additional 0.3p of earnings per
share, this marked another important step in the restoration of our dividend
cover.
With these strategic initiatives delivered, the Company would have been on a
much sounder footing as the financial year drew to a close.
Inescapably however, the third area of focus, has been evaluating the series
of unsolicited offers which were made for your Company since the start of the
calendar year. In previous comments, I have referred to the disconnect between
share prices and the valuation of assets which has manifested itself across
almost all the UK real estate sector in varying, but sizable discounts, and in
particular, has attached to those with development exposure. One virtue
associated with this situation, is that management teams have been forced to
focus on the extraction of value from existing assets but inevitably, it has
also restricted expansion and growth through capital raises. Smaller real
estate vehicles, many of which came to the public markets when interest rates
were abnormally low and which typically offered high yields have particularly
struggled to keep and attract investors as other assets, for example UK
government bond yields rose substantially.
Your Board rejected a number of offers for the equity of your company because
we did not believe they represented the best value for shareholders. On 4 June
2025 we recommended a cash bid from Blackstone at 109 pence per share.
Operational review
Our valuation performance again bears out our decision to focus our portfolio
on multi-let industrial assets. The value of investment assets increased by
6.1% on a like-for-like basis to £736.5 million, with the total portfolio,
including developments, now valued at £805.4 million. The uplift was driven
by ERV growth of 6.8%, demonstrating the resilience of our occupational
markets, as well as our active approach to asset management, with equivalent
yields broadly flat.
Multi-let has long been our core focus and more recently its highly attractive
characteristics, which include significant reversionary potential and the
opportunity to capture that through a high frequency of lease events, have
been recognised more widely. This has encouraged greater investment into the
sector, which of course, we have been a beneficiary of. Values are firmly
underpinned by the fact that rebuild costs are well above capital values; our
multi-let assets for example have a reinstatement value of £125.44 per sq ft
versus a capital value of £108.18 per sq ft.
While we have seen a slight reduction in occupancy, that reflects a small
number of expected vacancies arising on relatively large sites. More generally
however, demand for our space has proved resilient and that is despite ongoing
cost pressures for small businesses. We have maintained our historic run rate,
with 105 lease events in the year, generating £3.7 million of new rent. On
average, deals were 24.4% above prior rent, as we continue to capture the
reversion inherent in the portfolio, but there remains significant upside to
come.
At the year-end, the portfolio was 14.3% reversionary, equivalent to an
additional £6.1 million of rent to be captured in the coming years. There is
a further £4.6 million of additional income which would be available on
letting the vacant space, taking the total reversionary potential to 25.2%,
again underlining the attractive nature of our portfolio.
Financial performance
Despite being a net seller over the year, net operating income was flat at
£35.0 million, with the acquisition of one high-yielding asset and strong
leasing activity offsetting the loss from disposals. Like-for-like contracted
rental growth of 4.7% for the year is one of our strongest performances in
recent years, demonstrating the strength and resilience of our platform.
Notably, there have been no major delinquencies in the year.
Our focus on reducing overall debt levels and optimising our financing has
delivered a reduction in financing costs and improvement in earnings, with
adjusted earnings per share up 8.3% to 5.2 pence per share, representing
dividend coverage of 81.3% (FY24: 75.0%).
Rebuilding dividend coverage remains the key focus for the Board and as
discussed above, initiatives were put in place this year which would have
added an additional 0.7 pence per share to earnings; 0.4 pence attributable to
the amendment to the Investment Management Agreement and 0.3 pence
attributable to the refinancing.
The uplift in our valuation supported an increase in our EPRA NTA of 2.9% to
128.0p (31 March 2024: 124.4p), resulting in a 8.0% total accounting return
for the period, ahead of last year (FY24: 6.7%).
Capital allocation and balance sheet
As a Board, we recognise that efficient capital allocation plays a critical
role in rebuilding dividend coverage. Our disposal plan has focused on selling
lower yielding or non-core assets, helping to reduce our more expensive debt
to support earnings. This year, we completed £85.7 million of disposals,
ahead of book value on a headline basis. Sales have included Barlborough Links
in Chesterfield, a single-let asset, with an index-linked lease and therefore
non-core, which sold for £46.0 million. Importantly, we have sold no flagship
assets. This activity brings total sales since the Group announced its
disposal plan in November 2022, to £193.4 million.
We made one acquisition in the year, Ventura Retail Park, near Birmingham, a
high conviction location for us. It was acquired for £38.6 million in June
2024 on a very attractive yield of 7.4% and is now valued at £43.5 million.
Following this activity, net debt stood at £260.6 million at the year end,
with a loan to value ratio of 32.4%. A sale or part sale of Radway would have
further reduced our debt to a level below £250 million, which is the total
covered by our existing hedging arrangements but ongoing negotiations were
effectively paused by the offer from Blackstone.
At year-end therefore, 92.9% of our debt was hedged. The refinancing which
completed in the final month of the year was at a margin of 1.75%, a 45 basis
point saving on the previous margin, lowering our average cost of debt as at
31 March 2025 to 3.6% from 4.2% a year ago, positioning us well for the year
ahead.
ESG
The Group has made great progress on sustainability since its inception. We
manage our capital carefully, so our programme of refurbishment is selective,
but improving the environmental credentials of our space is thoroughly
embedded in our approach. At year-end, 68.7% of our space was rated EPC A+ to
C (31 March 2024: 66.6%) and this is despite sales of some of our higher-rated
assets.
We were again awarded Gold for compliance with both the EPRA Best Practice
Reporting and the EPRA Sustainability Best Practice Recommendations and the
Board was particularly pleased that the Company's MSCI Rating improved to a
BBB from a BB, reflecting good progress made.
Conclusion
When Warehouse REIT plc listed its shares on AIM towards the end of 2017 the
macro-economic environment was indeed very different. In recent years, we and
many of our peers, have experienced a prolonged divergence between a strong
operational performance and a much weaker capital markets environment. The
cost of capital has risen, and our sector has struggled to compete for fresh
equity from investors. The Board remains strongly of the conviction that we
are invested in a very attractive asset class, but given our size, the low
liquidity of our shares, and with other, risk-free asset classes offering
attractive returns, we have traded at a significant discount to net asset
value for some time.
As you would expect, your Board reviewed many strategic options including
internalising, mergers, a wind down and a sale of the Company. While the offer
from Blackstone was unsolicited, the Board has of course given it full and due
consideration and in view of the points set out above, considers that it
represents the most attractive option to shareholders at this time.
I would like once again to thank Tilstone for all their endeavours and hard
work on behalf of the shareholders and my fellow Board members for their
continuing commitment, particularly in recent weeks. In addition the advisory
group that assist the Board on a day to day basis have been outstanding.
Neil Kirton
Chairman
10 June 2025
KEY PERFORMANCE INDICATORS
We use the following key performance indicators ("KPIs") to monitor our
performance and strategic progress.
Occupancy Like-for-like rental income growth Rental increases agreed versus valuer's erv
93.7% 4.7% (1.1)%
Description Description Description
Total open market rental value of the units leased divided by total open The increase in contracted rent of units owned throughout the period, The difference between the rent achieved on new lettings and renewals and the
market rental value, excluding development property and land, and equivalent expressed as a percentage of the contracted rent at the start of the period, ERV assessed by the external valuer, expressed as a percentage above the ERV
to one minus the EPRA vacancy rate. excluding development property, land and units undergoing refurbishment. at the start of the period.
Why is this important? Why is this important? Why is this important?
Shows our ability to retain occupiers at renewal and to let vacant space, Shows our ability to identify and acquire attractive properties and grow Shows our ability to achieve rental growth ahead of ERV through asset
which in turn underpins our income and dividend payments. average rents over time. management and the attractiveness of our assets to potential occupiers.
How we performed How we performed How we performed
Occupancy across the investment portfolio reduced to 93.7%, with notable We delivered further good rental growth, as we continued to capture the We let space overall (1.1%) below ERV. Excluding capped rent reviews, leasing
vacancies in Leicester, Speke, Warrington, and Witney where we have reversionary potential in the portfolio through active asset management. was overall 4.2% ahead of ERV.
refurbishment programmes ongoing to capture latent reversion.
Like-for-like valuation increase Total accounting return Total cost ratio
3.8% 8.0% 28.1%
Description Description Description
The change in the valuation of properties owned throughout the period under The movement in EPRA NTA over a period plus dividends paid in the period, The total cost ratio is the sum of property expenses and administration
review, expressed as a percentage of the valuation at the start of the period, expressed as a percentage of the EPRA NTA at the start of the period. expenses (excluding one-off costs) as a percentage of gross rental income.
and net of capital expenditure.
(See table 6 on pages 138 to 139 for detail).
Why is this important?
Why is this important?
Why is this important?
Demonstrates the Group's success at creating value for shareholders.
Shows our ability to acquire the right quality of assets at attractive
Shows our ability to effectively control our cost base, which in turn supports
valuations, add value through asset management and drive increased capital How we performed dividend payments to shareholders.
values by capturing rental growth.
We delivered a total accounting return of 8.0% in the year, which was below How we performed
How we performed our target as ongoing economic uncertainty continues to weigh on the sector,
but performance was significantly ahead of last year reflecting the uplift in The total cost ratio increased in the year due to a rise in non-recoverable
The combination of our high quality portfolio, improving occupier sentiment valuation. holding costs of vacant properties. Excluding these costs, the total cost
and a resilient occupational market has driven a 3.8% increase in the ratio was down 40 basis points to 22.8%.
like-for-like valuation (6.1% excluding developments).
Epra NTA per share Loan to value ratio
128.0p 32.4%
Description Description
The EPRA net asset value measure assumes entities buy and sell assets, thereby Gross debt less cash, short-term deposits and liquid investments, divided by
crystallising certain levels of deferred tax liability. This is expressed on a the aggregate value of properties and investments. (See table 10 on page 140
per share basis. (See table 3 on page 137 for detail). for detail)
Why is this important? Why is this important?
Shows our ability to acquire well and to increase capital values through Shows our ability to balance the additional portfolio diversification and
active asset management. returns that come from using debt, with the need to manage risk through
prudent financing.
How we performed
How we performed
The increase in capital values relative to the market contributed to a 3.6
pence increase in EPRA NTA per share to 128.0 pence per share. The decrease in the LTV reflects both proceeds from asset disposals which have
reduced our level of debt as well as an increase in portfolio value.
INVESTMENT ADVISOR'S REPORT
Good progress with our priorities
In June 2023, the Board set four strategic priorities for the business. These
were to:
• capture the reversionary potential in the portfolio;
• recycle capital, enabling us to pay down the Group's floating rate debt,
strengthen the balance sheet and support earnings;
• progress the disposal of our Radway Green development scheme; and
• increase dividend cover, by driving earnings through these actions.
The Group has consistently performed well against the first two of these
priorities and during the year, made material progress against the third which
would have supported dividend coverage. However, the Blackstone Proposal
received in the final month of the year effectively paused ongoing
negotiations for a sale of this asset.
Priority FY25 progress
Capture reversion £3.7 million of new rent added, with £2.8 million of reversion captured
Future reversion of £6.1 million, providing a potential uplift of 14.3%,
rising to 25.2% including vacant space
Continued capital recycling £85.7 million headline sales, 0.7% ahead of book value
£38.6 million asset acquired on a 7.4% net initial yield ("NIY")
Progress Radway Green Progressing reserved matters consent on Phase 2 and delivering power to the
whole site
Negotiations for a sale of Phase 1 continued through the second half but
paused in March 2025
Pathway to dividend cover 81.3% covered for FY25 (FY24:75%)
Amendment to the Investment Management Agreement expected to deliver 0.4p per
share cost savings in the current financial year
Refinancing expected to deliver 0.3p per share on an annualised basis, based
on year-end debt position
PORTFOLIO REVIEW CAPITAL ACTIVITY
£ million % NIY
Disposals 85.7 6.7
Acquisitions 38.6 7.4
The Group keeps the portfolio under constant review, to identify mature or
non-core assets that are candidates for disposal. Sales have focused on
single-let assets, or assets where the Group has substantially completed its
asset management initiatives leaving little further upside. In addition,
disposal targets include those that generate a yield below the Group's cost of
debt and are therefore earnings-enhancing on sale.
Disposals
During the period, the Group sold ten assets for £85.7 million (headline),
0.7% ahead of book value. After taking into account disposal-related costs,
the Group crystallised a small loss on disposal of £0.5 million. Sales
reflected a blended net initial yield on passing rent of 6.7%.
The assets sold in the period were:
• Barlborough Links, Chesterfield for £46.0 million;
• Ikon Trading Estate, Hartlebury for £7.3 million;
• Parkway Industrial Estate, Plymouth for £6.3 million;
• Swift Valley Industrial Estate, Rugby for £6.1 million;
• Celtic Business Park, Newport for £5.2 million;
• Pikelaw Place, Skelmersdale for £4.1 million;
• Halebank Industrial Estate, Widnes for £4.1 million.
• Falcon Business Park, Burton-on-Trent for £2.7 million;
• Festival Drive, Ebbw Value for £2.2 million; and
• Crown Street, Carlisle for £1.8 million.
This activity brings total asset sales since the Group announced its disposal
plan in November 2022 to £193.4 million, demonstrating our ability to match
assets that are non-core for Warehouse REIT with pockets of demand across the
market.
In addition, as announced in its HY24 results in November 2023, the Group has
been progressing a sale of Radway Green, its development opportunity near
Crewe. This is a highly attractive scheme in a premier location just 1.5 miles
from Junction 16 of the M6. It has the potential to deliver at least 1.8
million sq ft of space, across two phases of 0.8 million sq ft and 1.0 million
sq ft.
Following a thorough process, in November 2024, the Group announced that terms
had been agreed and solicitors instructed on the sale of Phase 1 of this
asset. A period of due diligence followed with negotiations still underway at
the time of the Blackstone offer for the Company. However, the Blackstone
Proposal received in the final month of the year effectively paused a sale of
this asset.
Simultaneously, the Investment Advisor has focused on delivering reserved
matters consent on Phase 2, which represents the majority of the scheme's
value and on securing 8 MW of power on top of the existing 2 MW for the wider
site.
Acquisitions
On 25 June 2024, the Group acquired Phase 2 of Ventura Retail Park
("Ventura"), a 13-unit scheme in Tamworth, close to Birmingham, for £38.6
million, representing a net initial yield of 7.4%.
Built in two phases, Ventura is one of the top 20 shopping parks in the UK by
sq ft. Phase 2 covers 120,000 sq ft and is fully let to a high-quality
occupier line-up including Boots, Sports Direct and H&M. Contracted rent
across the scheme was £3.1 million and the WAULT was 5.6 years as at
year-end.
VALUATION
At the year-end, the investment portfolio comprised 602 units across 6.9
million sq ft of space (31 March 2024: 642 units across 7.8 million sq ft).
The table below analyses the portfolio as at 31 March 2025:
Value (£m) LFL movement (%) ERV growth (%) NIY (%) NEY (%) Capital value (£ per sq ft)
Multi-let more than 100k sq ft 451.5 7.4 7.4 5.2 6.2 108.36
Multi-let less than 100k sq ft 139.8 6.5 6.4 5.7 6.7 107.58
Single-let regional distribution 84.6 0.7 6.3 5.3 6.4 96.26
Single-let last-mile 60.6 4.5 4.7 6.2 6.3 118.92
Total 736.5 6.1 6.8 5.4 6.4 107.45
Development land 68.9 (14.7)
Total portfolio 805.4 3.8
The portfolio was independently valued by CBRE as at 31 March 2025, and
prepared in accordance with the latest version of the RICS Valuation - Global
Standards (incorporating the International Valuation Standards) and the UK
national supplement (the "Red Book").
The total portfolio value was £805.4 million (31 March 2024: £810.2
million), an increase of 3.8% on a like-for-like basis. The value of the
investment portfolio was up 6.1% on a like-for-like basis, driven by a strong
performance from multi-let assets which were up 7.1%. ERV growth across the
whole portfolio was 6.8%, but stronger on multi-let assets at 7.1%.
The EPRA NIY at 31 March 2025 was 4.9% (31 March 2024: 5.4%) and the EPRA
topped-up NIY was 5.3% (31 March 2024: 5.6%). Across the investment portfolio
equivalent yields are now 6.4% (31 March 2024: 6.5%).
The average capital value across the portfolio was £107.45 per sq ft,
significantly above the FY24 position of £93.52 per sq ft, partly driven by
the acquisition of Ventura Retail Park. The average capital value for
multi-let assets was £108.18 per sq ft, which remains well below the
reinstatement value for this type of asset, which is £125.44 per sq ft.
LEASING AND ASSET MANAGEMENT
% of investment portfolio Occupancy by ERV (%) Contracted rent ERV
(£per sq ft) (£ per sq ft)
Multi-let more than 100k sq ft 61.3 92.1 7.03 7.94
Multi-let less than 100k sq ft 19.0 91.8 7.22 8.09
Single-let regional distribution 11.5 100.0 5.43 7.14
Single-let last-mile 8.2 100.0 8.50 9.15
Total 100.0 93.7 6.96 7.95
The Group has a diverse occupier base of 409 businesses, with 75.0% generating
revenues of more than £10 million and 89.1% exceeding £1 million of
revenues.
At the year-end, the contracted rent roll for the investment portfolio
(excluding developments) was £42.5 million, compared to an ERV of £53.2
million. The difference reflects £6.1 million (or 14.3%) of portfolio
reversion and £4.6 million of potential rent on vacant space taking total
reversionary potential to 25.2%.
The structure of the Group's leases supports capturing this reversion, with
less than 5% being subject to an index-linked, cap, collar or turnover-related
arrangement. This flexibility is an important advantage, enabling us to
capture reversion ahead of inflation.
We made good progress in FY25, with a total of 105 lease events completed,
covering 1.9 million sq ft. As a result, we were able to add £3.7 million of
new contracted rent, with £2.8 million of reversion captured. Deals were on
average 24.4% ahead of previous passing rent and 4.2% above ERV excluding
capped rent reviews (1.1% below ERV overall). £1.1 million of new contracted
rent added came from the letting vacant space.
Total contracted rents for the investment property portfolio stood at £42.5
million at year-end, an increase of 4.7% on a like-for-like basis during the
year.
Occupancy across the investment portfolio reduced during the period to 93.7%
(31 March 2024: 96.4%). The decrease reflects vacancies at Meridian Business
Park, Leicester; Gawsworth Court, Warrington; Witan Park Industrial Estate,
Witney; and Maxwell Road Industrial Estate, Peterborough, where we have a
tailored refurbishment programme planned to capture the embedded reversion and
interest has been encouraging.
Effective occupancy, which excludes units under offer to let or undergoing
refurbishment, was 97.7% (31 March 2024: 97.6%), with 1.7% of the investment
portfolio under offer to let and a further 2.4% undergoing refurbishment at
that date.
The weighted average unexpired lease term for the investment portfolio was
unchanged at 5.0 years (31 March 2024: 5.0 years).
New leases
The Group completed 38 new leases on 0.2 million sq ft of space during the
period, which will generate annual rent of £2.0 million, 31.7% ahead of the
previous contracted rent and 6.9% ahead of the 31 March 2024 ERV. The level of
incentives has increased slightly ahead of the previous year-end but remains
below the market convention of one month for every year on the lease.
Highlights are shown in the table below:
Increase over
Estate Lease length (years) Annual rent (£) Previous rent ERV at 31/3/24
Gateway Park, Birmingham 10 268,900 52.2% 21.7%
Knowsley Business Park, Knowsley 10 177,500 34.1% 0.8%
Oldbury Point, Oldbury 10 114,000 20.0% 12.3%
Lease renewals
The Group continues to retain the majority of its occupiers, with 62.9%
remaining in occupation at lease expiry and increasing to 72.7% including
those units re-let within the period. Renewal rates were lower than in
previous years, with a number of expected vacancies arising on a small number
of larger properties, as set out on page 34.
There were 42 lease renewals on 0.7 million sq ft of space during the period,
generating contracted rents of £4.9 million, with an average uplift of 28.5%
above the previous passing rent and 4.3% above the ERV.
Highlights are shown in the table below:
Increase over
Estate Lease length (years) Annual rent (£) Previous rent ERV at 31/3/24
Midpoint 18, Middlewich 10 2,430,700 28.8% 0.3%
Murcar Industrial Estate, Aberdeen 4 340,000 26.6% 13.3%
Sussex Avenue, Leeds 10 225,000 32.4% 10.7%
Rent reviews
During the year, the Group completed 25 rent reviews, on 1.0 million sq ft of
space, generating contracted rents of £7.2 million per annum, 20.1% ahead of
previous rent and 6.3% below 31 March 2024 ERV. Excluding four capped rent
reviews, the rent reviews were settled 31.5% ahead of previous rent and 2.8%
ahead of the 31 March 2024 ERV.
Highlights are shown in the table below:
Increase over
Estate Annual rent (£) Previous rent ERV at 31/3/24
Daneshill Industrial Estate, Basingstone 1,220,000 31.9% 2.6%
Boulevard Industrial Park, Speke 1,035,900 27.2% (7.8)%
Granby Industrial Estate, Milton Keynes 468,300 39.7% 35.1%
Capturing reversion
The following table demonstrates the potential for continuing to capture
reversion in the years ahead. These represent good opportunities for further
rental growth and reflects the position before any further ERV growth or
outperformance.
Rent subject to review or lease expiry Contracted rent (£m) ERV (£m)
Prior to FY26 3.5 4.5
FY26 8.0 9.6
FY27 6.2 7.0
FY28 6.2 6.7
FY28+ 20.0 22.1
CAPITAL EXPENDITURE
On average, the Group budgets to invest around 0.75% of its gross asset value
("GAV") in capital expenditure each year. This excludes development projects
and is therefore based on GAV excluding developments. Our priorities when
investing in the estate are to drive rental growth, improve EPC ratings and
secure other ESG improvements. Approximately 20% of capex is typically
directed to EPC-related improvements and all capex must generate a minimum
return of 10% on the capital deployed. Our capital expenditure plans also take
account of local demand and supply, the requirements of individual units
versus the overall estate, and the Company's longer-term aspirations to hold
or sell the asset.
Total capital expenditure in the year was £6.6 million (excluding
development), equivalent to 0.81% of GAV. At the year-end, approximately 2.4%
of the portfolio's ERV was under refurbishment (31 March 2024: 0.8%).
ESG PERFORMANCE
At the year-end, 68.7% of the portfolio was rated EPC A+ to C (31 March 2024:
66.6%). This improvement reflects progress made in the year, with 38 units,
representing 223,000 sq ft of space achieving a minimum of an EPC B rating.
This has offset the impact of selling assets with high EPC ratings, notably
Barlborough Links, Chesterfield, a 500,000 sq ft asset, rated EPC B. In
England and Wales, which are subject to MEES requirements, 74.3% of space is
rated EPC A+ to C.
In line with the Group's long-term target of increasing on-site renewable
energy capacity, solar PV panels have been fitted to Walton Road Industrial
Estate in Stone and Witan Park Industrial Estate in Witney, together covering
51,100 sq ft. One further asset is at the viability stage, covering 188,000 sq
ft and is expected to complete in FY26.
Warehouse REIT was again awarded Gold for compliance with both the EPRA Best
Practice Reporting and the EPRA Sustainability Best Practice Recommendations
and its MSCI Rating has improved to a BBB from a BB reflecting good progress
made in the prior reporting year.
This year, the Group reported a 30.8% like-for-like reduction in its scope 1
and 2 emissions, which represents good progress albeit the comparison only
comprises a small number of assets (two for scope 1 and thirteen for scope 2).
Occupier electricity consumption has been reported for the second year
running, with coverage of 48.0% of the investment portfolio by sq ft. The
Group worked with Savills to set a carbon baseline and to assess the likely
impact of energy efficient interventions to be delivered over the coming
years, and based on their analysis, has set a target for reducing
building-related scope 3 emissions by at least 25% by 2030; at least 80% by
2040; and to be net zero by 2050, in line with the government's target.
Working with occupiers
While the Group's outsourced property managers handle some day-to-day
administrative tasks with occupiers, we ensure that we always own the occupier
relationship. Our asset management team regularly visits sites, meets
occupiers face to face and holds calls with them.
We also run surveys to obtain insights from occupiers, so we can support them
better and to inform our asset management plans. These typically cover
feedback on the estate, current and future space requirements, ESG priorities
and broader macro concerns. This year, we conducted a formal survey, which was
made available to all occupiers. Over 90% of respondents rated our buildings
between average and very good, with 49% rating them good or very good and 68%
said they expected their space requirements to stay the same, with a further
26% expected to require more space. From a macro perspective, rising costs was
cited as the biggest business concern over the next year by 76% of
respondents. Read more on pages 46.
The Group's rent roll is also well diversified. The top 15 occupiers account
for 33.6% of the contracted rents from the investment portfolio, with the top
100 generating 77.5%.
Top 15 occupiers at 31 March 2025 Rent £m % of total rent D&B score
Wincanton Holdings Limited 2.4 5.7 5A2
John Lewis PLC 2.0 4.7 5A2
DFS Trading Limited 1.5 3.4 5A2
Alliance Healthcare (Distribution) Limited 1.2 2.9 5A2
Direct Wines Limited 1.2 2.7 N2
Artifex Interior Systems Limited 1.0 2.4 5A3
Argos Limited 0.8 2.0 5A2
Evtec Aluminium Limited 0.6 1.5 N4
Swissport GB Limited 0.6 1.4 N3
A. Schulman Thermoplastic Compounds Limited 0.5 1.2 3A2
Colormatrix Europe Limited 0.5 1.2 5A2
Smyths Toys UK Limited 0.5 1.2 4A2
Magna Exteriors (Banbury) Limited 0.5 1.1 2A2
F&F Stores Limited 0.5 1.1 4A2
Selco Trade Centres Limited 0.5 1.1 5A2
Total 14.3 33.6
This spread of occupiers across industries and business sizes means the Group
is not reliant on any one occupier or industry. This increases the Group's
resilience and helps to mitigate both financial and leasing risks.
Contracted rent by occupier size
FINANCIAL REVIEW
Performance
Rental income for the year was £43.4 million (FY24: £44.0 million), with the
reduction reflecting the impact of asset disposals, partially offset by the
Group's leasing activity, EPRA like-for-like rental growth of 4.2% and the
acquisition of Ventura Retail Park in the financial year. The Group's
operating costs include its running costs (primarily the management, audit,
company secretarial, other professional, and Directors' fees), and
property-related costs (including legal expenses, void costs and repairs).
Total operating costs for the year were £16.9 million (FY24: £16.0 million),
reflecting an increase in non-recoverable holding costs relating to larger
vacant sites in Leicester, Swindon and Speke, as well as a back-dated rates
settlement with Glasgow City Council.
The expected credit loss allowance remained low at £0.1 million (FY24: £0.2
million). This reflects the diversity and quality of the Group's occupiers and
our close relationships with them.
The total cost ratio, which is the adjusted cost ratio including direct
vacancy costs, was 28.1% (FY24: 24.4%), reflecting the increase in
non-recoverable holding costs of vacant properties. The total cost ratio
excluding these costs was down 53 basis points to 22.8%. The ongoing charges
ratio, representing the costs of running the REIT as a percentage of NAV
remains stable at 1.4% (FY24: 1.4%).
The Group disposed of assets totalling £85.7 million in the year, (on a
headline basis) 0.7% ahead of book values, after taking into account
disposal-related costs; a small loss on disposal has been recognised for the
year ended 31 March 2025 of £0.5 million.
At 31 March 2025, the Group recognised a gain of £30.2 million on the
revaluation of its portfolio (FY24: gain of £15.1 million). See the Valuation
section above for more information.
Financing income in the year was £8.4 million (FY24: £8.5 million),
including £8.0 million (FY24: £8.2 million) of interest receipts from
interest rate derivatives.
Financing costs include the interest and fees on the Group's revolving credit
facility ("RCF") and term loan (see Debt Financing and Hedging). Excluding the
one-off £3.1 million accelerated amortisation of loan issue costs, as a
result of the debt refinancing (see Debt Financing and Hedging section for
more information), financing costs fell to £21.4 million. This is driven by a
reduction in debt levels as well as a fall in the base rate.
The cost of debt as at 31 March 2025 has fallen to 3.6% (FY24: 4.2%). The
Group also had a £6.8 million change in fair value of derivatives (FY24:
£5.2 million loss).
The statutory profit before tax was £41.7 million (FY24: £34.3 million).
The Group has continued to comply with its obligations as a REIT and the
profits and capital gains from its property investment business are therefore
exempt from corporation tax. The corporation tax charge for the year was
therefore £nil (FY24: £nil).
Earnings per share under IFRS was 9.8 pence (FY24: 8.1 pence per share). EPRA
EPS was 5.1 pence (FY24 (restated): 4.8 pence).
Adjusted earnings per share was 5.2 pence for the year (FY24: 4.8 pence). The
table below reconciles the movement in adjusted EPS between the two years:
Adjusted earnings per share Pence
For the year ended 31 March 2024 4.8
Rental income and dilapidations 0.4
Reduced non-recoverable property expenses (0.3)
Reduced investment management fee and other administrative expenses (0.0)
Net finance costs 0.3
For the year ended 31 March 2025 5.2
Dividends
The Company has declared the following interim dividends in respect of the
year:
Quarter to Pence Paid/to be paid Amount (p)
30 June 2024 31 August 2024 6 October 2024 1.6
30 September 2024 22 November 2024 27 December 2024 1.6
31 December 2024 19 February 2025 11 April 2025 1.6
Total 4.8
Two dividends were property income distributions and one was a non-property
income distribution. The cash cost of the total dividend for the year
(inlcuding the interim dividend declared for the March 2024 quarter) will be
£27.2 million (FY24: £27.2 million).
Net asset value
EPRA Net Tangible Assets ("NTA") per share was 128.0 pence at 31 March 2025
(31 March 2024: 124.4 pence).
Combined with the dividend, this positive movement has generated a total
accounting return of 8.0% up 130 bps from 6.7% the year prior.
The table below reconciles the movement in the EPRA NTA in FY25:
EPRA NTA per share Pence
As at 31 March 2024 124.4
Adjusted earnings 5.2
Profit on disposals (0.1)
Dividends (6.4)
Valuation movement 7.1
Accelerated borrowing costs (0.7)
Deferred consideration on interest rate caps (1.5)
As at 31 March 2025 128.0
Debt financing and hedging
The Group refinanced its debt facilities in March 2025. The new £300.0
million facility comprises a £200.0 million term loan and a £100.0 million
RCF. It replaces the Company's previous £320.0 million debt facility to June
2028. The facility is provided by the Group's existing club of four lenders:
HSBC, Bank of Ireland, NatWest and Santander. The minimum interest cover is
1.5 times, compared to 2.0 times under the previous facility, and the maximum
LTV has been extended from 55% to 60%. Both the term loan and the RCF attract
a margin of 1.75% plus SONIA for an LTV below 40% or 2.05% if the LTV is above
40%.
The margin on this facility was 45 basis points below the previous margin,
delivering a cost saving of £1.2 million for the Company on an annualised
basis, equivalent to a per share saving of 0.3 pence (based on the drawn
balance at the year-end). This was one of the key initiatives undertaken by
the Group to improve dividend cover in the current year.
At 31 March 2025, £69.0 million was drawn against the RCF and £200.0 million
against the term loan. This gave total debt of £269.0 million (31 March 2024:
£284.0 million), with the Group also holding cash balances of £8.4 million
(31 March 2024: £16.0 million), giving a net debt position of £260.6 million
(31 March 2024: £268.0 million). The LTV ratio at 31 March 2025 was therefore
32.4% (31 March 2024: 33.1%). Interest cover for the period was 3.4 times,
meaning the Group was substantially within the covenants in the debt facility.
At the year-end, the Group had £250.0 million of interest rate caps in place.
£50.0 million has a termination date of November 2026 and caps SONIA at 2.0%;
£100.0 million has a termination date of July 2025 and £100.0 million has a
termination date of July 2027, both of which cap SONIA at 1.5%. As a result,
92.9% of the Group's debt was hedged at year-end.
Amendment to Investment Management Agreement
At its HY25 results in November 2024 the Board announced that discussions were
underway, directed at making some changes to the management arrangements. In
February 2025, Tilstone reached an agreement with the Board on the basis of
its future fee calculation. The new arrangement sees the basis of the
quarterly management fee move from net asset value to the lower of net asset
value and market capitalisation effective 1 April 2025. The fee thresholds and
rates applied to the net asset value-based calculations are unchanged under
the new arrangement, but for the linkage to market capitalisation, as shown
below.
Threshold Fee rate on lower of EPRA net asset value and market capitalisation
Up to £500 million 1.1%
Above £500 million 0.9%
As part of the transition to this new arrangement, for the first financial
year only (ending 31 March 2026), the basis of the fee calculation is subject
to a floor of no lower than 70% of EPRA net asset value. This arrangement was
expected to deliver cost savings of £2.1 million per annum (equivalent to 0.5
pence per share) based on the share price at the time it was announced to the
market on 11 February 2025, or £1.7 million under the transitional
arrangement (0.4 pence per share). This is another key action the Group has
undertaken to support dividend coverage in the year.
All other terms of the Investment Management Agreement were unchanged.
TILSTONE PARTNERS LIMITED
As the Investment Advisor, our team plays a crucial role in the Group's
success. Our people have a range of relevant skills, including real estate
investment, asset management, finance and sustainability.
While everyone who joins us has the experience and qualifications they need
for their role, we are committed to supporting professional and personal
development and training. We therefore run an annual appraisal process and
provide both statutory and individual training, according to each person's job
or personal requirements. Disclosure on training and development for the
Tilstone team is provided within our EPRA Sustainability tables (see page
146).
In March 2025 we conducted our second employee survey. We had a 100%
participation rate and were particularly pleased that over 90% rated their
overall working environment as Very Good or Good. We set annual objectives
which align to our values and every employee has at least one ESG-related
objective. Diversity and inclusion are important to us, as we recognise the
benefits of diverse viewpoints and life experiences. At the year-end, gender
diversity was 71% male, 29% female across the Investment Advisor.
POST-PERIOD END ACTIVITY
On 4 June 2025 the Group announced that it had exchanged contracts for the
acquisition of Rycote Lane, a multi-let industrial estate near Thame, in the
Oxford-Cambridge Arc, for £34.75 million.
The scheme comprises 14 units, ranging in size from 3,000 sq ft to over 50,000
sq ft and is 98% occupied, generating a contracted rent of £2.1 million,
equating to a net initial yield of 5.6%. It is rated BREEAM Excellent and all
units are EPC A rated.
The acquisition is due to complete in September 2025.
COMPLIANCE WITH THE INVESTMENT POLICY
The investment policy is summarised below. The Group continued to comply in
full with this policy throughout the year.
Investment policy Performance
The Group will only invest in warehouse assets in the UK. All of the Group's estates are UK-based warehouses.
No individual warehouse will represent more than 20% of the Group's The largest individual warehouse represents 7.4% of GAV.
last-published gross asset value ("GAV"), at the time it invests.
The Group will target a portfolio with no one occupier accounting for more The largest occupier accounts for 5.7% of gross contracted rents and 4.3% of
than 20% of its gross contracted rents at the time of purchase. No more than gross assets.
20% of its gross assets will be exposed to the creditworthiness of a single
occupier at the time of purchase.
The Group will diversify the portfolio across the UK, with a focus on areas The portfolio is well balanced across the UK, as shown in the chart on page 8.
with strong underlying investment fundamentals.
The Group can invest no more than 10% of gross assets in other listed The Group held no investments in other funds during the year.
closed-ended investment funds.
The Group's exposure to assets under development (including pre-let assets, The Group's exposure to developments at the year-end was 8.6% of GAV.
forward fundings or assets which have been at least partially de-risked),
assessed on a cost basis, will not exceed 20% of gross assets at the time of
purchase.
The Group may invest directly, or through forward funding agreements or
commitments, in developments (including pre-developed land), where:
the structure provides us with investment risk rather than development risk;
the development is at least partially pre-let, sold or de-risked in a similar
way; and
we intend to hold the completed development as an investment asset.
The Group may, where considered appropriate, undertake an element of
speculative development, provided that the exposure to these assets, assessed
on a cost basis, does not exceed 10% of gross assets. Speculative developments
are those which have not been at least partially leased, pre-leased or
de-risked in a similar way.
The Group views an LTV of between 30% and 40% as optimal over the longer term The LTV at 31 March 2025 was 32.4%.
but can temporarily increase gearing up to a maximum of LTV of 50% at the time
of an arrangement, to finance value-enhancing opportunities.
INVESTMENT MANAGER
The Company is an alternative investment fund for the purposes of the
Alternative Investment Fund Managers Directive ("AIFMD") and, as such, is
required to have an Investment Manager who is duly authorised to undertake
that role. G10 Capital Limited ("G10") is the Company's AIFM and Investment
Manager and is authorised and regulated by the Financial Conduct Authority.
INVESTMENT ADVISOR
Tilstone Partners Limited is Investment Advisor to the Company.
Simon Hope
Tilstone Partners Limited
10 June 2025
PRINCIPAL RISKS AND UNCERTAINTIES
Business
A Economic downturn B Poor returns on the portfolio
A general downturn in the UK economy could have a negative impact on the Risk mitigation: There is a risk that the returns generated by the portfolio may not be in line Risk mitigation:
warehouse market. In particular, the exposure would be increased if there was
with our plans and forecasts. There are many factors that could drive this,
a decline in specific markets, for example logistics. The Investment Advisor maintains detailed forecasts of the property portfolio, including an inappropriate investment strategy set by the Board; poor delivery The investment strategy is set by the Board, and performance against key
which is subject to regular scenario testing. of the strategy; reduced capital valuations; or reduced rental incomes. targets and KPIs is reviewed and reported to the Board on an ongoing basis.
Metrics in key areas e.g. rent collection, credit risk ratings are monitored This would have an impact on the financial performance of the REIT, and Significant decisions, relating to assets or occupiers follow established
monthly to enable prompt identification of changes or trends. returns for our investors. protocols, ensuring there is proper assessment, at the right levels.
We have a diverse occupier base, and complete an annual review of our occupier
mix, to help inform our leasing approach. We conduct a monthly portfolio risk
review.
We also stress test the working capital model and associated assumptions.
Change from previous year We have not experienced any deterioration in rent collection performance, or Change from previous year No change
any significant insolvencies.
During the year we saw increased interest in the market generally,
particularly after the general election. The Investment Adviser continues to
closely monitor the portfolio, the external market and the economic outlook
for any changes or negative trends.
Business Compliance
C Poor performance of key third-party service provider D REIT status lost
The Group outsources its activities and is reliant on the performance of Risk mitigation: Loss of our REIT status, through failing to meet regulatory requirements or Risk mitigation:
third-party service providers.
listing rules would have a significant impact on our reputation and the
There are contracts in place between the Group and all third-party advisors, financial returns for our investors. The Board has approved a clear governance framework which incorporates the
Poor performance of a significant advisor, including the Investment Manager, setting out responsibilities. Matters Reserved for the Board and delegated authorities, which are further
Investment Advisor, Fund Administrator, or one of the Property Managers, could
supported by the clear, contracted allocation of responsibilities to our
have a significant impact on the performance of the Group. The Group has a clear scheme of delegation, approved by the Board. Significant third-party service providers.
decisions are the responsibility of the Board.
The Investment Advisor reviews the position against REIT legislation with
The Board receives regular formal quarterly reports, which include key Waystone quarterly.
performance targets and KPIs.
Dividend cover and cash is continuously monitored and forecast forward, and
The Management Engagement Committee carries out an annual service review of the position reported to the Audit and Risk Committee, and Board.
key service providers, which is reported to the Board.
Change from previous year No change Change from previous year No change
Compliance Climate
E Breach of loan covenants or our borrowing policy F Climate-related risk
Our loan funding is subject to conditions, and breach of those could result in Risk mitigation: Climate change may have an impact across the business, including both physical Risk mitigation:
restrictions to funding and activities going forwards.
risks - e.g. extreme weather events impacting on properties - and transitional
Our financial position is closely monitored, with the Investment Advisor risks - such as properties not meeting occupier requirements relating to The Sustainability Committee approves and monitors progress on our
In addition, the Board approved and communicated our borrowing policy, and monitoring loan-to-value percentages and interest cover ratios against the energy efficiency, or the increasing costs of compliance as requirements sustainability strategy.
breach of agreed limits may risk financial and reputation damage. loan covenant and borrowing policy on an ongoing basis. around energy efficient solutions and building standards increase.
Our Investment Advisor and Property Managers are working with occupiers to
In addition, forward forecasts are prepared and reviewed both to assess the understand their energy usage and how we can support them to meet their
business's position, and to ensure that any acquisition decisions include
sustainability objectives and net zero plans. We are also working with
consideration of the cash and funding impact. external specialists to refine our ambitions and targets, and enhance our
climate-related governance and reporting.
The Board receives a formal update each quarter, and there is a quarterly
compliance letter prepared for the bank. Capital development and refurbishment works include consideration of
energy-efficient solutions, emissions management, and options to reduce waste
and resource usage, and we are building these into our standard refurbishment
procedures.
Change from previous year No change Change from previous year We have continued to build our processes and standards relating to climate
risk mitigation and improving sustainability.
Our disposal programme typically targets smaller lot sizes which is steadily
improving the overall quality of our portfolio.
Operational
G Significant bad debt H Inappropriate acquisitions
A substantial increase in our bad debt, or the level of arrears and slow Risk mitigation: Inappropriate acquisitions could increase risk in relation to portfolio Risk mitigation:
payment, could have a direct impact on cash flow and profitability. This may
returns, as properties may be harder to let, may not generate appropriate
also have an impact on average lease lengths, and void levels and costs. Our diverse portfolio of assets and wide range of occupiers is a key driver of revenues, or may require additional costs to support. We have a comprehensive acquisition protocol which is linked to the Matters
our performance and risk profile in relation to bad debts. Reserved for the Board and the delegated authority matrix.
We have 409 individual occupiers across our portfolio of 60 estates, and our The protocol sets out detailed due diligence steps, (including environmental
top ten occupiers (by contracted rent) combined generate less than 30% of our due diligence) which must be completed and fully evidenced as part of the
rent roll. decision-making process.
Our occupier portfolio risk is monitored to ensure that commitments Acquisition decisions are approved by the Investment Advisor Investment
to/reliance on different sectors and business types is understood. Committee and the Investment Manager Investment Committee, and any higher risk
acquisition decisions (by value or complexity) are escalated to the Board.
At an operational level, we have robust processes in place to ensure that we
accurately record, invoice and collect amounts due. Working with the property The REIT's Investment Manager (G10) is also required to approve acquisition
managers, our credit control processes identify any potential arrears problems decisions.
to enable action to be taken at an early stage.
There is a rigorous due diligence process prior to the acceptance of
occupiers, with rent guarantees or rent deposits taken where appropriate. We
also have ongoing automated credit risk monitoring on the occupier portfolio.
Change from previous year No change Change from previous year No change
Financial
I Unable to raise funding J Interest rate
There are three areas of potential risk: Risk mitigation: Changes in interest rates could directly impact on our cost of capital, and Risk mitigation:
indirectly may impact on market stability
· Inability to attract additional equity investment Market conditions remain challenging and in particular impact our ability to Changes in interest rates are not in our control, and our focus is therefore
raise equity. on mitigation of the potential impact.
· Difficulty in securing new loan funding for the business, at an
affordable rate We have completed a number of disposals during the year. Interest rate caps are in place, and we have three years remaining on current
lending arrangements.
· Our ability to raise funds through the disposal of assets could The Investment Advisor maintains close contact with agents to ensure that
be impacted by an economic downturn disposal proceeds and the timing of sales are optimised. The monitoring of We have the opportunity to review these in 2025, which may enable us to take
financial covenants also enables efficient disposal planning. advantage of the better outlook, as rates are reducing.
Regular investor communications ensure we receive timely feedback on our The Investment Advisor maintains detailed records of the property portfolio,
strategy and performance, informing decision-making on our strategy. and financial scenario testing is undertaken to assess the potential impact of
changes in financing costs.
Change from previous year No change Change from previous year No change
GOING CONCERN AND VIABILITY STATEMENT
Going concern
The Board monitors the Group's ability to continue as a going concern.
Specifically, at quarterly Board meetings, the Board reviews summaries of the
Group's liquidity position and compliance with loan covenants, as well as
forecast financial performance and cash flows. Throughout the year, the Board
met, in conjunction with the Investment Advisor, Tilstone, to review the
uncertainties created by geopolitical tensions and inflation and interest
rates, and specifically their potential impact on rent collection, cash
resources, loan facility headroom, covenant compliance, acquisitions and
disposals of investment properties; discretionary and committed capital
expenditure and dividend distributions.
The Group ended the year with £8.4 million of unrestricted cash and £31.0
million of headroom readily available under its facilities. Disposals are an
important part of our approach to portfolio optimisation and we continually
review the portfolio to identify opportunities to increase efficiency and
dispose of any assets that are considered ex-growth or non-core, recycling
that capital into accretive acquisitions or to reduce debt. The Group made
disposals totalling £85.7 million during the year.
The Group is operating significantly within its covenants and a sensitivity
analysis has been performed to identify the decrease in valuations and rental
income that would result in a breach of the LTV, market value covenants or
interest cover covenants. Valuations would need to fall by c. 34% or rents by
c. 43%, when compared with 31 March 2025, before these covenants would be
breached, which, based on available market data, is considered unlikely.
Furthermore, current debt and associated covenants are summarised in note 17,
with no covenant breaches during the period.
Post 31 March 2025, the Group received credit approval to extend the revolving
credit facility by £20.0 million, bringing the total facility to £320.0
million.
In addition, the Group has exchanged contracts to complete on a property in
Thame for a headline acquisition price of £34.8 million.
The Group has considered the impact of both the extension of the current
facility and the proposed acquisition and note that the Group would still have
sufficient headroom to remain a going concern.
Furthermore, disposals are an important part of our approach to portfolio
optimisation and we continually review the portfolio to identify opportunities
to increase efficiency and dispose of any assets that are considered non-core
or where the Group has fully executed its asset management strategy.
Tilstone has prepared projections for the Group covering the going concern
period to 30 June 2026, which have been reviewed by the Directors. As part of
the going concern assessment, and taking the above into consideration, the
Directors reviewed a number of scenarios that included extreme downside
sensitivities in relation to rental cash collection, making no discretionary
capital expenditure, adverse refinancing conditions and minimum dividend
distributions under the REIT rules.
Accordingly, based on this information, and in light of mitigating actions
available and the recent refinancing, the Directors would have a reasonable
expectation that the Group and the Company have adequate resources to continue
in business for a period of at least 12 months from the date of approval of
the Annual Report and Financial Statements.
However; the Directors acknowledge that as a formal bid for the Group is
currently ongoing, and at the date of signing, the outcome and timing of this
process remain uncertain.
Due to the possible change in ownership, decisions on the future direction of
the Group could be taken by new directors, who are not appointed at the
approval date of the financial statements, that affect whether the forecasts
used in the current directors' going concern assessment will be achieved.
As such, there exists a material uncertainty which may cast significant doubt
on the Company's ability to continue as a going concern. The Directors
acknowledge this uncertainty and confirm that, notwithstanding this, it is
appropriate to prepare the financial statements on a going concern basis
The financial statements do not include any adjustments that would be required
if the financial statements were prepared on a basis other than that of a
going concern.
Assessment of viability
In accordance with the AIC Code of Corporate Governance, the Directors have
assessed the Group's prospects over a period greater than the 12 months
considered by the going concern provision.
The Directors have conducted their assessment over a three-year period to June
2028, allowing a reasonable level of accuracy given typical lease terms and
the cyclical nature of the UK property market.
The principal risks detailed on pages 59 to 68 summarise the matters that
could prevent the Group from delivering its strategy. The Board seeks to
ensure that risks are kept to a minimum at all times and, where appropriate,
the potential impact of such risks is modelled within its viability
assessment.
The nature of the Group's business as the owner of a diverse portfolio of UK
warehouses, principally located close to urban centres or major highways and
let to a wide variety of occupiers, reduces the impact of adverse changes in
the general economic environment or market conditions, particularly as the
properties are typically flexible spaces, adaptable to changes in occupational
demands.
The Directors' assessment takes into account forecast cash flows, debt
maturity and renewal prospects, forecast covenant compliance, dividend cover
and REIT compliance. The model is then stress tested for severe but plausible
scenarios, individually and in aggregate, along with consideration of
potential mitigating factors. The key sensitivities applied to the model are a
downturn in economic outlook and restricted availability of finance,
specifically:
i. increased occupier churn and occupier defaults;
ii. increased void periods following break or expiry;
iii. decreased rental income;
iv. decrease in property valuation; and
v. increased interest rates.
The sensitivity analysis identifies the decrease in valuations and rental
income that would result in a breach of the LTV, market value covenants or
interest cover covenants as set out in the Going Concern section above. Taking
into account mitigating actions, the results of the sensitivity analysis and
stress testing demonstrated that the Group would have sufficient liquidity to
meet its ongoing liabilities as they fall due, maintain compliance with
banking covenants and maintain compliance with the REIT regime over the period
of the assessment.
Furthermore, the Board, in conjunction with the Audit and Risk Committee,
carried out a robust assessment of the principal risks and uncertainties
facing the Group, including those that would threaten its business model,
strategy, future performance, solvency or liquidity over the three-year
period. The risk review process provided the Board with assurance that the
mitigations and management systems are operating as intended. The Board
believes that the Group is well positioned to manage its principal risks and
uncertainties successfully, taking into account the current economic and
political environment.
The Board's expectation is further supported by regular briefings provided by
Tilstone. These briefings consider market conditions, opportunities, changes
in the regulatory landscape and the current economic and political risks and
uncertainties. Additionally, the shortage of supply nationally, is seen as
mitigation. These risks, and other potential risks that may arise, continue to
be closely monitored by the Board.
The financial statements do not include any adjustments that would be required
if the financial statements were prepared on a basis other than that of a
going concern.
Viability statement
The period over which the Directors consider it is feasible and appropriate to
report on the Group's viability is a three-year period to June 2028. This
period has been selected because it is the period that is used for the Group's
medium-term business plans. Underpinning this plan is an assessment of each
individual unit's performance, driving the overall letting assumptions and
corresponding forecast cash flows.
Having made an assessment of each individual unit's performance, the forecast
cash flows, covenant compliance and the impact of sensitivities in
combination, the Directors confirm that, taking account of the Group's current
position, there exists a material uncertainty which may cast significant doubt
on the Group's ability to continue as a going concern due to the
unpredictability of the bid and the outcomes planned in assessing the
medium-term viability cannot be assured. Notwithstanding this, the Directors
have a reasonable expectation that the Group would be able to continue in
operation and meet its liabilities as they fall due over the three year period
of assessment.
Neil Kirton
Chairman
10 June 2025
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and Financial
Statements in accordance with UK adopted international accounting standards
and 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 financial statements of the Group in
accordance with UK adopted international accounting standards and have elected
to prepare the Company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards
and applicable law). Additionally, the Directors must not approve the
financial statements unless they are satisfied that they present fairly the
financial position, financial performance and cash flows of the Group and
Company for that year.
In preparing the financial statements, the Directors are required to:
• select suitable accounting policies and apply them consistently;
• present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
• provide additional disclosures when compliance with specific
requirements in IFRS is insufficient to enable users to understand the impact
of particular transactions, other events and conditions on the Group's
financial position and financial performance;
• state whether the Group financial statements have been prepared in
accordance with UK adopted international accounting standards, subject to any
material departures disclosed and explained in the financial statements;
• state whether the Company financial statements have been prepared in
accordance with Financial Reporting Standard 101 'Reduced Disclosure
Framework' ('FRS101') subject to any material departures disclosed and
explained in the Company financial statements;
• make judgements and estimates that are reasonable and prudent;
• prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Group and the Company will continue in
business; and
• prepare a directors' report, a strategic report and directors'
remuneration report which comply with the requirements of the Companies Act
2006.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and enable
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,
including ensuring the Annual Report and Financial Statements are made
available. The work carried out by the Auditor does not involve consideration
of the maintenance and integrity of this website and, accordingly, the Auditor
accepts no responsibility for any changes that have occurred to the financial
statements since they were initially presented on the website. As such, the
Directors' responsibility also extends to the ongoing integrity of the
financial statements contained therein. Financial statements are published on
the Company's website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial statements and
visitors to the website need to be aware that legislation in the UK covering
the preparation and dissemination of the financial statements may differ from
legislation in their jurisdiction.
• The Directors confirm that, pursuant to their responsibilities under
DTR4, to the best of their knowledge: the financial statements, prepared in
accordance with UK adopted international accounting standards and in
conformity with the requirements of the Companies Act 2006, give a true and
fair view of the assets, liabilities, financial position and profit of the
Company (and Group as a whole); and
• this Annual Report includes a fair review of the development and
performance of the business and the position of the Company (and Group as a
whole), together with a description of the principal risks and uncertainties
that it faces.
Having taken advice from the Audit and Risk Committee, the Directors consider
that the Annual Report and Financial Statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary for
shareholders to assess the Company's position and performance, business model
and strategy.
On behalf of the Board
Neil Kirton
Chairman
10 June 2025
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2025
All items in the statement derive from continuing operations. No operations
were acquired or discontinued during the year.
There is no other comprehensive income and therefore the profit for the year
after tax is also the total comprehensive income.
The accompanying notes form an integral part of these financial statements.
Continuing operations Notes Year ended 31 March 2025 Year ended
£'000 31 March 2024
£'000
Gross property income 3 48,631 47,173
Service charge income 3 3,280 3,853
Service charge expenses 4 (3,596) (4,068)
Net property income 48,315 46,958
Property operating expenses 4 (5,453) (4,330)
Gross profit 42,862 42,628
Administration expenses 4 (7,830) (7,605)
Operating profit before gains on investment properties 35,032 35,023
Fair value gains on investment properties 13 30,155 15,082
Realised (losses)/gains on disposal of investment properties 13 (493) 5,521
Operating profit 64,694 55,626
Finance income 7 8,350 8,460
Finance expenses 8 (24,509) (24,566)
Changes in fair value of interest rate derivatives (6,826) (5,214)
Profit before tax 41,709 34,306
Taxation 9 - -
Total comprehensive income for the period 41,709 34,306
Earnings per share (basic and diluted) (pence) 12 9.8 8.1
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2025
These financial statements were approved by the Board of Directors of
Warehouse REIT plc on 10 June 2025 and signed on its behalf by:
Neil Kirton
Company number: 10880317
The accompanying notes form an integral part of these financial statements.
Notes 31 March 2025 31 March
£'000 2024
£'000
Assets
Non-current assets
Investment property 13 819,223 695,345
Trade and other receivables 16 6,000 -
Interest rate derivatives 18 3,476 5,485
828,699 700,830
Current assets
Investment property held for sale 14 - 129,060
Interest rate derivatives 18 2,835 1,756
Cash and cash equivalents 15 8,389 15,968
Trade and other receivables 16 10,303 11,519
21,527 158,303
Total assets 850,226 859,133
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings 17 (268,257) (280,413)
Head lease liability 19 (13,989) (14,235)
(282,246) (294,648)
Current liabilities
Other payables and accrued expenses 20 (10,226) (20,658)
Deferred income 20 (6,674) (7,251)
Head lease liability 19 (974) (987)
(17,874) (28,896)
Total liabilities (300,120) (323,544)
Net assets 550,106 535,589
Equity
Share capital 21 4,249 4,249
Share premium 22 275,648 275,648
Retained earnings 23 270,209 255,692
Total equity 550,106 535,589
Number of shares in issue (thousands) 424,862 424,862
Net asset value per share (basic and diluted) (pence) 24 129.5 126.1
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2025
Further details of retained earnings are presented in note 23.
The accompanying notes form an integral part of these financial statements.
Notes Share capital Share premium Retained earnings Total
£'000 £'000 £'000 £'000
Balance at 31 March 2023 4,249 275,648 248,578 528,475
Total comprehensive income - - 34,306 34,306
Dividends paid 11 - - (27,192) (27,192)
Balance at 31 March 2024 4,249 275,648 255,692 535,589
Total comprehensive income - - 41,709 41,709
Dividends paid 11 - - (27,192) (27,192)
Balance at 31 March 2025 4,249 275,648 270,209 550,106
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 March 2025
The accompanying notes form an integral part of these financial statements.
Notes Year ended 31 March 2025 Year ended
£'000 31 March
2024
£'000
Cash flows from operating activities
Operating profit 64,694 55,626
Adjustments to reconcile profit for the period to net cash flows:
Gains from change in fair value of investment properties 13 (30,155) (15,082)
Realised loss/(gain) on disposal of investment properties 13 493 (5,521)
Head lease movement in asset value 408 (61)
Operating cash flows before movements in working capital 35,440 34,962
Decrease/(increase) in other receivables and prepayments 1,460 (2,464)
Decrease in other payables and accrued expenses (988) (1,723)
Net cash flow generated from operating activities 35,912 30,775
Cash flows from investing activities
Acquisition of investment properties (52,310) (5,888)
Capital expenditure (6,328) (5,197)
Development expenditure (994) (6,974)
Purchase of interest rate caps 18 (5,895) (5,069)
Interest received 8,554 7,740
Disposal of investment properties 78,967 51,733
Net cash flow generated from investing activities 21,994 36,345
Cash flows from financing activities
Bank loans drawn down 56,000 323,000
Bank loans repaid (71,000) (345,000)
Loan interest and other finance expenses paid (21,225) (21,321)
Other finance expenses paid (233) (367)
Non-recurrent loan fees (801) (4,251)
Head lease payments (1,034) (1,074)
Dividends paid in the period 11 (27,192) (27,192)
Net cash flow used in financing activities (65,485) (76,205)
Net decrease in cash and cash equivalents (7,579) (9,085)
Cash and cash equivalents at start of the period 15,968 25,053
Cash and cash equivalents at end of the period 15 8,389 15,968
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2025
1. General information
Warehouse REIT plc is a closed-ended Real Estate Investment Trust ("REIT")
with an indefinite life incorporated in England and Wales on 24 July 2017. The
Company began trading on 20 September 2017. The registered office of the
Company is located at 19th Floor, 51 Lime Street, London EC3M 7DQ. The
Company's shares are admitted to trading on the Main Market, a market operated
by the London Stock Exchange.
The Group's consolidated financial statements for the year ended 31 March 2025
comprise the results of the Company and its subsidiaries (together
constituting the "Group") and were approved by the Board and authorised for
issue on 10 June 2025. The nature of the Group's operations and its principal
activities are set out in the strategic report available on the Group's
website.
2. Basis of preparation
These financial statements are prepared in accordance with UK-adopted
international accounting standards and in conformity with the requirements of
the Companies Act 2006. The financial statements have been prepared under the
historical cost convention, except for the revaluation of investment
properties and financial instruments that are measured at revalued amounts or
fair values at the end of each reporting period, as explained in the
accounting policies below. Historical cost is generally based on the fair
value of the consideration given in exchange for goods and services. The
audited financial statements are presented in Pound Sterling and all values
are rounded to the nearest thousand pounds (£'000), except when otherwise
indicated.
The financial information for the year ended 31 March 2025 and the year ended
31 March 2025 does not constitute the company's statutory accounts for those
years.
Statutory accounts for the year ended 31 March 2024 have been delivered to the
Registrar of Companies. The statutory accounts for the year ended 31 March
2025 will be delivered to the Registrar of Companies following the Company's
Annual General Meeting.
The auditors' reports on the accounts for 31 March 2024 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.
The auditors' reports on the accounts for 31 March 2025 were unqualified, did
not contain a statement under 498(2) or 498(3) of the Companies Act 2006 and
highlighted that a material uncertainty exists that may cast significant doubt
on the Group's and Parent Company's ability to continue as a going concern.
We draw attention to note 2 to the financial statements which indicates that a
formal bid for the Group is ongoing and, at the date of the financial
statements, the outcome and timing of the process remains uncertain. Due to
the possible change in ownership, decisions on the future direction of the
Group could be taken by new directors, who are not appointed at the approval
date of the financial statements, that affect whether the forecasts used in
the current directors' going concern assessment will be achieved. As stated in
note 2, these conditions indicate that a material uncertainty exists that may
cast significant doubt on the Group's and Parent Company's ability to continue
as a going concern. The financial statements do not include any adjustments
that would be required if the financial statements were prepared on a basis
other than that of a going concern. The auditor's opinion is not modified in
respect of this matter.
Going concern
The Directors have made an assessment of the Group's ability to continue as a
going concern. They carefully considered areas of potential financial risk and
reviewed cash flow forecasts, evaluating a number of scenarios, which included
extreme downside sensitivities in relation to rental cash collection, making
no acquisitions or discretionary capital expenditure and minimum dividend
distributions under the REIT rules.
Accordingly, based on this information, and in light of mitigating actions
available, the Directors have a reasonable expectation that the Group and the
Company have adequate resources to continue in business for a period of at
least 12 months from the date of approval of the Annual Report and Financial
Statements (see the going concern section).
The Directors note that as the formal bid for the Group is currently ongoing,
and at the date of this Financial Statements, the outcome and timing of this
process remain uncertain. Due to the possible change in ownership, decisions
on the future direction of the Group could be taken by new directors, who are
not appointed at the approval date of the financial statements, that affect
whether the forecasts used in the current directors' going concern assessment
will be achieved.
As such, there exists a material uncertainty which may cast significant doubt
on the Company's ability to continue as a going concern. The Directors
acknowledge this uncertainty and confirm that, notwithstanding this, it is
appropriate to prepare the financial statements on a going concern basis. The
financial statements do not include any adjustments that would be required if
the financial statements were prepared on a basis other than that of a going
concern.
2.1 Changes to accounting standards and interpretations
New standards and interpretations effective in the current period
Other standards, interpretations and amendments effective in the current
financial year have not had a material impact on the consolidated Group
financial statements.
The Group has not applied any standards, interpretations or amendments that
have been issued but are not yet effective.
New and revised accounting standards not yet effective
There are a number of new standards and amendments to existing standards that
have been published and are mandatory for the Group's accounting periods
beginning on or after 1 April 2025 or later. The Group is not adopting these
standards early. There are no accounting standards expected to have a material
impact on the Group. The impact of the following is under assessment:
• Amendments to the Measurement of Financial Instruments
Classification and Measurement of Financial {Amendments to IFRS 9 Financial
Instruments) effective 1 January 2026; and
• IFRS 18 'Primary financial statements', which will become
effective in the consolidated Group financial statements for the financial
year ending 31 March 2028, subject to UK endorsement.
2.2 Material accounting judgements and estimates
The preparation of these financial statements in accordance with IFRS requires
the Directors of the Group to make judgements, estimates and assumptions that
affect the reported amounts recognised in the financial statements. However,
uncertainty about these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount of the asset or
liability in the future.
2.3 Restatement of financial statements
In September 2024, the European Public Real Estate Association's guidelines
for the calculation of EPRA earnings were updated to include the interest from
financial derivatives, effective from 1 October 2024 onwards. The Group has
early adopted the guidance to bring the calculation of EPRA earnings in-line
with the treatment of interest in the calculation of adjusted earnings. The
comparative has been restated to reflect the change in guidance.
Judgements
In the course of preparing the financial statements, no judgements have been
made in the process of applying the Group's accounting policies, other than
those involving estimations detailed below, that have had a significant effect
on the amounts recognised in the financial statements.
2. Basis of preparation continued
Estimates
In the process of applying the Group's accounting policies, the Investment
Advisor has made the following estimates, which have the most significant risk
of material change to the carrying value of assets recognised in the
consolidated financial statements:
Valuation of property
The valuations of the Group's investment property are at fair value as
determined by the external independent valuer on the basis of market value in
accordance with the internationally accepted RICS Valuation - Professional
Standards January 2025 (incorporating the International Valuation Standards)
and in accordance with IFRS 13. The key estimates made by the valuer are the
ERV and equivalent yields of each investment property and land values per acre
for development properties. The valuers have the buildings location, building
specification and various other climate-related considerations and have
factored this into the valuation. See notes 13 and 25 for further details.
2.4 Summary of material accounting policies
The principal accounting policies applied in the preparation of these
financial statements are stated in the notes to the financial statements.
a) Basis of consolidation
The Company does not meet the definition of an investment entity and therefore
does not qualify for the consolidation exemption under IFRS 10. The
consolidated financial statements comprise the financial statements of the
Group and its subsidiaries as at 31 March 2025.
b) Functional and presentation currency
The overall objective of the Group is to generate returns in Pound Sterling
and the Group's performance is evaluated in Pound Sterling. Therefore, the
Directors consider Pound Sterling as the currency that most faithfully
represents the economic effects of the underlying transactions, events and
conditions and have therefore adopted it as the functional and presentation
currency.
c) Segmental reporting
The Directors are of the opinion that the Group is engaged in a single segment
of business, being the investment in, and provision of, UK urban warehouses.
3. Property income
Year ended31 March 2025 Year ended
£'000 31 March
2024
£'000
Rental income 43,402 44,025
Surrender premiums received 380 -
Insurance recharged 1,432 1,496
Dilapidation income 3,417 1,652
Gross property income 48,631 47,173
Service charge income 3,280 3,853
Total property income 51,911 51,026
No occupier accounts for more than 10% of rental income.
Accounting policy
Rental income arising from operating leases on investment property is
accounted for on a straight-line basis over the lease term and is included in
gross property income in the Group statement of comprehensive income. Initial
direct costs incurred in negotiating and arranging an operating lease are
recognised as an expense over the lease term on the same basis as the lease
income. Rental income is invoiced in advance and for all rental income that
relates to a future period, this is deferred and appears within current
liabilities in the Group statement of financial position.
For leases that contain fixed or minimum uplifts, the rental income arising
from such uplifts is recognised on a straight-line basis over the lease term.
A rental adjustment is recognised from the rent review date in relation to
unsettled rent reviews, once the rental uplifts are agreed.
Occupier lease incentives are recognised as an adjustment of rental revenue on
a straight-line basis over the term of the lease. The lease term is the
non-cancellable period of the lease together with any further term for which
the occupier has the option to continue the lease where, at the inception of
the lease, the Directors are reasonably certain that the occupier will
exercise that option.
Insurance income is recognised in the accounting period in which the services
are rendered.
Amounts received from occupiers to terminate leases or to compensate for
dilapidations are recognised in the Group statement of comprehensive income
when the right to receive them arises, typically at the cessation of the
lease.
Service charge income is recognised when the related recoverable expenses are
incurred. The Group acts as the principal in service charge transactions as it
directly controls the delivery of the services at the point at which they are
provided to the occupier.
4. Property operating and administration expenses
Year ended 31 March 2025 Year ended
£'000 31 March
2024
£'000
Service charge expenses 3,596 4,068
Premises expenses 3,762 2,625
Insurance 1,551 1,509
Loss allowance on trade receivables 140 196
Property operating expenses 5,453 4,330
Investment Advisor fees 5,821 5,725
Directors' remuneration (including social security costs) 178 179
Head lease asset depreciation 164 165
Other administration expenses 1,667 1,536
Administration expenses 7,830 7,605
Total 16,879 16,003
Details of how the Investment Advisor fees are calculated are disclosed in
note 29.
Accounting policy
All property operating expenses and administration expenses are charged to the
consolidated statement of comprehensive income and are accounted for on an
accruals basis.
Property expenses are costs incurred by the Group that are not directly
recoverable from an occupier, as well as professional fees relating to the
letting of our estates.
5. Directors' remuneration
Year ended 31 March 2025 Year ended
£'000 31 March
2024
£'000
Neil Kirton 48 48
Lynette Lackey 38 38
Martin Meech - 17
Aimée Pitman 38 38
Dominic O'Rourke 38 21
Employer's national insurance contributions 16 17
Total 178 179
A summary of the Directors' emoluments, including the disclosures required by
the Companies Act 2006, is set out in the Directors' remuneration report. The
Group had no employees in either period. All payments made are short-term
employee benefits.
6. Auditor's remuneration
Year ended 31 March 2025 Year ended
£'000 31 March
2024
£'000
Audit fee 238 214
Total 238 214
The Group reviews the scope and nature of all proposed non-audit services
before engagement, to ensure that the independence and objectivity of the
Auditor are safeguarded. Audit fees are comprised of the following items:
Year ended 31 March 2025 Year ended
£'000 31 March
2024
£'000
Group year-end Annual Report and Financial Statements 199 190
2024 audit fee over-run 14 -
Subsidiary accounts 25 24
Total 238 214
The Audit Committee receives assurance from the Auditor that its independence
is not compromised. The Group's Auditor for the year ended 31 March 2025 was
BDO LLP.
7. Finance income
Year ended 31 March 2025 Year ended
£'000 31 March
2024
£'000
Interest from cash and short-term deposits 231 267
Interest from deferred consideration (note 16) 86 -
Interest from derivatives 8,033 8,193
Total 8,350 8,460
Accounting policy
Interest income is recognised on an effective interest rate basis and shown
within the Group statement of comprehensive income as finance income. See note
18 for details on the accounting policy for interest rate derivatives.
8. Finance expenses
Year ended 31 March 2025 Year ended
£'000 31 March
2024
£'000
Loan interest 20,644 21,791
Head lease interest 1,050 1,054
Accelerated loan arrangement fees 3,119 1,688
Loan arrangement fees amortised 666 883
Recurrent loan fees 227 362
Bank charges 4 6
25,710 25,784
Less: amounts capitalised on the development of properties (1,201) (1,218)
Total 24,509 24,566
During the year ended 31 March 2025 finance expenses include accelerated
amortisation of £3.2 million (31 March 2024: £1.6 million) given the
refinancing of the facility that took place in March 2025 (31 March 2024: July
2023). Refer to note 17 for details.
The interest capitalisation rates for the year ended 31 March 2025 ranged from
3.6% to 4.4% (31 March 2024: 4.3% to 4.7%).
Accounting policy
Finance costs consist of interest and other costs that the Group incurs in
connection with bank and other borrowings. Any finance costs that are
separately identifiable and directly attributable to an asset that takes a
period of time to complete are capitalised as part of the cost of the asset.
Ongoing services fees relating to the maintenance of the facility are expensed
in the period in which they occur. Fair value movements on derivatives are
recorded in finance expenses or in finance income depending on the fair value
movement during the year. See note 19 for the accounting policy on head lease
interest expensed.
9. Taxation
Corporation tax has arisen as follows:
Year ended 31 March 2025 Year ended
£'000 31 March
2024
£'000
Corporation tax on residual income - -
Total - -
Reconciliation of tax charge to profit before tax:
Year ended 31 March 2025 Year ended
£'000 31 March
2024
£'000
Profit before tax 41,709 34,306
Corporation tax at 25.0% (2024: 25.0%) 10,427 8,577
Change in value of investment properties (7,539) (3,771)
Realised loss/ (profit) on disposal of investment properties 123 (1,380)
Tax-exempt property rental business (3,011) (3,426)
Total - -
Accounting policy
As a REIT, the Group is exempt from corporation tax on the profits and gains
from its property rental business, provided it continues to meet certain
conditions as per the REIT regulations.
Non-qualifying profits and gains of the Group continue to be subject to
corporation tax. Therefore, current tax is the expected tax payable on the
non-qualifying taxable income for the period, if applicable, using tax rates
enacted or substantively enacted at the balance sheet date.
10. Operating leases
Operating lease commitments - as lessor
The Group has entered into commercial property leases on its investment
property portfolio. These non-cancellable leases have a remaining term of up
to 14 years.
Future minimum rentals receivable under non-cancellable operating leases as at
31 March 2025 are as follows:
31 March 2025 31 March
£'000 2024
£'000
Within one year 42,739 40,436
Between one and two years 36,649 33,894
Between two and three years 28,000 27,053
Between three and four years 22,091 22,170
Between four and five years 15,892 18,597
Between five and ten years 18,346 35,956
More than ten years 7,700 7,925
Total 171,417 186,031
11. Dividends
For the year ended 31 March 2025 Pence per share £'000
Third interim dividend for year ended 31 March 2024 paid on 2 April 2024 1.60 6,798
Fourth interim dividend for year ended 31 March 2024 paid on 26 July 2024 1.60 6,798
First interim dividend for year ended 31 March 2025 paid on 4 October 2024 1.60 6,798
Second interim dividend for year ended 31 March 2025 paid on 27 December 1.60 6,798
2024
Total dividends paid during the year 6.4 27,192
Paid as:
Property income distributions 4.8 20,394
Non-property income distributions 1.6 6,798
Total 6.4 27,192
For the year ended 31 March 2024 Pence per share £'000
Third interim dividend for year ended 31 March 2023 paid on 3 April 2023 1.60 6,798
Fourth interim dividend for year ended 31 March 2023 paid on 7 July 2023 1.60 6,798
First interim dividend for year ended 31 March 2024 paid on 6 October 2023 1.60 6,798
Second interim dividend for year ended 31 March 2024 paid on 29 December 1.60 6,798
2023
Total dividends paid during the year 6.4 27,192
Paid as:
Property income distributions 6.4 27,192
Non-property income distributions - -
Total 6.4 27,192
As a REIT, the Group is required to pay property income distributions ("PIDs")
equal to at least 90% of the property rental business profits of the Group.
A third interim property income dividend for the year ended 31 March 2025 of
1.60 pence per share was declared on 19 February 2025 and paid on 11 April
2025.
Accounting policy
Dividends due to the Group's shareholders are recognised when they become
payable.
12. Earnings per share
Basic EPS is calculated by dividing profit for the period attributable to
ordinary shareholders of the Group by the weighted average number of ordinary
shares during the period. As there are no dilutive instruments in issue, basic
and diluted EPS are identical.
The European Public Real Estate Association ("EPRA") publishes guidelines for
calculating adjusted earnings on a comparable basis. EPRA EPS is a measure of
EPS designed by EPRA to enable entities to present underlying earnings from
core operating activities, which excludes fair value movements on investment
properties.
In September 2024, the European Public Real Estate Association's guidelines
for the calculation of EPRA earnings were updated to include the interest from
financial derivatives, effective from 1 October 2024 onwards, the comparative
has been restated to reflect the change in guidance in-line with the
calculation of adjusted earnings. This change in guidance has resulted in an
increase in EPRA earnings of £8.2 million or 1.9 pence per share.
The Group has also included additional earnings measures called 'Adjusted
Earnings' and 'Adjusted EPS' and includes premiums received during the period
in compensation for rental income foregone for surrendering a lease early. The
Board deems this a more relevant indicator of core earnings as it reflects our
ability to generate earnings from our portfolio.
Year ended 31 March 2025 Year ended
£'000 31 March 2024 (Restated)
£'000
IFRS earnings/(losses) 41,709 34,306
EPRA earnings adjustments:
Loss/(gain) on disposal of investment properties 493 (5,521)
Fair value gains on investment properties (30,155) (15,082)
Surrender premiums (380) -
Changes in fair value of interest rate derivatives 6,826 5,214
Losses associated with early close out of debt (see note 17) 3,119 1,688
EPRA earnings 21,612 20,605
Group-specific earnings adjustments:
Surrender premiums 380 -
Adjusted earnings 21,992 20,605
Year ended 31 March 2025 Year ended
Pence 31 March 2024 (Restated)
Pence
Basic IFRS EPS 9.8 8.1
Diluted IFRS EPS 9.8 8.1
EPRA EPS 5.1 4.8
Adjusted EPS 5.2 4.8
Year ended 31 March 2025 Year ended
Number of shares 31 March
2024
Number of shares
Weighted average number of shares in issue (thousands) 424,862 424,862
13. UK investment property
Completed investment property Development property and land Total investment property
£'000 £'000 £'000
Investment property valuation brought forward as at 1 April 2024 675,497 5,663 681,160
Acquisition of properties 40,771 152 40,923
Capital expenditure 6,565 2,195 8,760
Movement in rent incentives 457 1 458
Disposal of properties (28,886) - (28,886)
Assets transferred from 'held for sale' - 72,830 72,830
Fair value gains/(losses) on revaluation of investment property 42,116 (11,961) 30,155
Total portfolio valuation per valuer's report 736,520 68,880 805,400
Adjustment for head lease obligations 13,823 - 13,823
Carrying value at 31 March 2025 750,343 68,880 819,223
Completed investment property Development property and land Total investment property
£'000 £'000 £'000
Investment property valuation brought forward as at 1 April 2023 752,485 75,660 828,145
Acquisition of properties - - -
Capital expenditure 3,327 8,191 11,518
Movement in rent incentives 1,065 (3) 1,062
Disposal of properties (42,462) (3,125) (45,587)
Fair value gains/(losses) on revaluation of investment property 17,312 (2,230) 15,082
Total portfolio valuation per valuer's report 731,727 78,493 810,220
Assets transferred to 'held for sale' (56,230) (72,830) (129,060)
Adjustment for head lease obligations 14,185 - 14,185
Carrying value at 31 March 2024 689,682 5,663 695,345
All completed investment properties are charged as collateral on the Group's
borrowings. See note 17 for details.
Included within the carrying value of investment properties as at 31 March
2025 is £8.4 million (31 March 2024: £8.9 million, recalculated) in respect
of rent incentives as a result of the IFRS treatment of leases with rent-free
periods, which require recognition on a straight-line basis over the lease
term. The difference between this and cash receipts change the carrying value
of the property on which revaluations are measured.
During the period the Group capitalised £1.2 million (31 March 2024: £1.2
million) of interest paid in development properties. Please see note 8 for
details on the capitalisation rate used.
Realised (gain)/loss on disposal of investment properties
31 March 2025 31 March
£'000 2024
£'000
Net proceeds from disposals of investment property during the year (including 78,623 51,733
investment properties held for sale-note 14)
Deferred consideration due (see note 16) 6,000
Carrying value of disposals (85,116) (46,212)
Realised (loss)/gain on disposal of investment properties (493) 5,521
Accounting policy
Development property and land is where the whole or a material part of an
estate is identified as having potential for development. Assets are
classified as such until development is completed and they have the potential
to be fully income-generating. Development property and land is measured at
fair value if the fair value is considered to be reliably determinable. Where
the fair value cannot be determined reliably but where it is expected that the
fair value of the property will be reliably determined when construction is
completed, the property is measured at cost less any impairment until the fair
value becomes reliably determinable or construction is completed, whichever is
earlier. In addition, it is the Group's policy to capitalise finance costs
relating to the development of the assets with planning permission, where
development work is underway see note 8 for details.
Subsequent to initial recognition, investment property is stated at fair value
(see note 25). Gains or losses arising from changes in the fair values are
included in the profit and loss in the period in which they arise under IAS 40
Investment Property.
Investment properties cease to be recognised when they have been disposed of
or withdrawn permanently from use and no future economic benefit is expected.
Gains or losses on the disposal of investment property are determined as the
difference between net disposal proceeds and the carrying value of the asset.
Movements in rent incentives are presented within the total portfolio
valuation.
Where an investment property is held under a leasehold interest, the headlease
is initially recognised as an asset at cost plus the present value of minimum
ground rent payments and is subsequently measured at fair value. The
corresponding rental liability to the head leaseholder is included in the
balance sheet as a finance lease obligation (see note 19).
14. Investment properties held for sale
Completed investment property Development property and land Total investment property
£'000 £'000 £'000
Carrying value at 31 March 2023 625 - 625
Disposal of properties (625) - (625)
Assets transferred in 56,230 72,830 129,060
Carrying value at 31 March 2024 56,230 72,830 129,060
Disposal of properties (56,230) - (56,230)
Assets transferred out - (72,830) (72,830)
Carrying value at 31 March 2025 - - -
During the year ended 31 March 2025, the Group decided to pause the proposed
sale of Radway Green, Crewe from the market following the Blackstone bid;
accordingly, this asset was transferred back to UK Investment Properties to
reflect this change. As at 31 March 2025, no properties are held for sale.
Accounting policy
An asset will be classified as held for sale in line with IFRS 5 'Non-Current
Assets Held for Sale and Discontinued Operations' if its carrying value is
expected to be recovered through a sale transaction rather than continuing
use. An asset will be classified in this way only when a sale is highly
probable, management are committed to selling the asset at the year-end date,
the asset is available for immediate sale in its current condition and the
asset is expected to be disposed of within 12 months after the date of the
consolidated statement of financial position.
15. Cash and cash equivalents
31 March 2025 31 March
£'000 2024
£'000
Cash 8,389 9,905
Cash in transit - 6,063
Total 8,389 15,968
Cash in transit comprises £nil million (31 March 2024: £6.1 million) of cash
held by the Group's Registrar to fund the shareholder dividend, less
withholding tax, which was paid on 2 April 2024 as disclosed in note 11. As at
31 March 2025 there were no cash equivalents held (31 March 2024: nil).
Accounting policy
Cash and cash equivalents comprise cash at bank and short-term deposits with
banks and other financial institutions, with an initial maturity of three
months or less.
16. Trade and other receivables
31 March 2025 31 March
£'000 2024
£'000
Non-current
Deferred consideration due 6,000 -
Current
Rent and insurance receivables 4,474 4,425
Payments in advance of property completion 2,526 2,217
Interest receivable on derivatives 1,567 1,770
Occupier deposits 457 643
Prepayments 465 266
Other receivables 814 2,198
Total 10,303 11,519
Grand total 16,303 11,519
The rent and insurance receivables balance represents gross receivables of
£4.9 million (31 March 2024: £4.7 million), net of a provision for doubtful
debts of £0.4 million (31 March 2024: £0.3 million).
Deferred consideration due includes consideration of £6.0 million in relation
to a property disposal sold during the year ended 31 March 2025. The deferred
consideration is due in December 2026 and accrues interest from December 2024
at an interest rate of 5.0% per annum.
Payments in advance of property completion represent the deposits paid to
vendors upon exchange of purchase contracts.
Accounting policy
Rent and other receivables are recognised at their original invoiced value and
become due based on the terms of the underlying lease or at the date of
invoice.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses using a lifetime expected credit loss provision for trade receivables.
To measure expected credit losses on a collective basis, trade receivables are
grouped based on similar credit risk and ageing.
The expected loss rates are based on the Group's historical credit losses
experienced over the two-year period prior to the year-end. The historical
loss rates are then adjusted for current and forward-looking information on
macroeconomic factors affecting the Group's customers.
17. Interest-bearing loans and borrowings
31 March 2025 31 March 2024
£'000 £'000
At the beginning of the year 284,000 306,000
Drawn in the year 330,000 323,000
Repaid in the year (345,000) (345,000)
Interest-bearing loans and borrowings 269,000 284,000
Unamortised fees at the beginning of the year (3,587) (1,907)
Loan arrangement fees incurred in the year (941) (4,251)
Unamortised fees written off in the year 3,119 1,688
Amortisation charge for the year 666 883
Unamortised loan arrangement fees (743) (3,587)
Loan balance less unamortised loan arrangement fees 268,257 280,413
On 24 March 2025, the Group entered into a new £300.0 million facility,
replacing the Group's previous £320.0 million debt facility, both expiring
June 2028. It comprises a £200.0 million term loan (2024: £220.0 million)
and a £100.0 million RCF (2024: £100.0 million) with a club of four lenders;
HSBC, Bank of Ireland, NatWest and Santander. The minimum interest cover is
1.5 times and the maximum LTV is 60%. Both the term loan and the RCF attract a
margin of 1.75% plus SONIA for an LTV below 40% (previously 2.2%) or 2.1% if
above (previously 2.5%). As the new financing arrangements are with the
existing club members and security agency, no cash outflows occurred at the
point of refinancing.
The Group has £250.0 million of interest rate caps in place; £50.0 million
has a termination date of 20 November 2026, £100.0 million has a termination
date of 20 July 2025 and £100.0 million has a termination date of 20 July
2027 (see note 18). The facilities are secured on all completed investment
properties within the portfolio.
At 31 March 2025, £69.0 million was drawn against the RCF (31 March 2024:
64.0 million) and £200.0 million against the term loan (31 March 2024:
£220.0 million). This gave total debt of £269.0 million (31 March 2024:
£284.0 million); with the Group also holding cash balances of £8.4 million
(31 March 2024: £16.0 million), the Group's net debt as at 31 March 2025 was
£260.6 million (31 March 2024: £268.0 million). The LTV ratio at 31 March
2025 was therefore 32.4% (31 March 2024: 33.1%), with the decrease reflecting
the disposal of properties in the year and the higher portfolio valuation.
As at 31 March 2025, there was £31.0 million (31 March 2024: £36.0 million)
available to draw.
The debt facility includes interest cover and market value covenants (as set
out above) that are measured at a Group level on a quarterly basis. The Group
has complied with all covenants throughout the financial period.
Accounting policy
Loans and borrowings are initially recognised as the proceeds received net of
directly attributable transaction costs. Loans and borrowings are subsequently
measured at amortised cost with interest charged to the consolidated statement
of comprehensive income at the effective interest rate, and shown within
finance costs. Transaction costs are spread over the term of the loan.
18. Interest rate derivatives
31 March 2025 31 March
£'000 2024
£'000
At the start of the period 7,241 7,387
Additional premiums accrued - 3,849
Changes in fair value of interest rate derivatives (6,826) (5,214)
Movement in interest rate derivative premium payable 5,896 1,219
Balance at the end of the period 6,311 7,241
Current 2,835 1,756
Non-current 3,476 5,485
Balance at the end of the period 6,311 7,241
To mitigate the interest rate risk that arises as a result of entering into
variable rate linked loans, the Group entered into interest rate derivatives
("caps") against movements in SONIA. The caps have a combined notional value
of £250.0 million with £200.0 million at a strike rate of 1.50% and the
remaining £50 million at a strike rate of 2.00%. The £100.0 million has a
termination date of 20 July 2025, £50.0 million cap has a termination date of
20 November 2026 and £100.0 million has a termination date of 20 July 2027.
Total consideration payable for the interest rate caps has been deferred over
eight consecutive quarters, subsequent to the issuance of the instrument. The
Group has paid £5.9 million in deferred premiums during the year to 31 March
2025 (2024: £5.1 million). The remaining premium of £7.5 million is due in
quarterly instalments with the final payment due in October 2025.
Accounting policy
Interest rate derivatives are initially recognised at fair value and are
subsequently measured at fair value, being the estimated amount that the Group
would receive or pay to terminate the agreement at the period-end date, taking
into account current interest rate expectations and the current credit rating
of the Group and its counterparties. Premiums payable under such arrangements
are initially capitalised into the statement of financial position.
The Group uses valuation techniques that are appropriate in the circumstances
and for which sufficient data is available to measure fair value, maximising
the use of relevant observable inputs and minimising the use of unobservable
inputs significant to the fair value measurement as a whole. Changes in fair
value of interest rate derivatives are recognised within finance expenses in
profit or loss in the period in which they occur.
All receipts of income from the instrument are recognised as finance income in
note 8 of the financial statements separate from the fair value measurement
recorded.
19. Head lease obligations
The following table analyses the present value of minimum lease payments under
non-cancellable head leases using an average discount rate of 6.91% for each
of the following periods:
31 March 2025 31 March
£'000 2024
£'000
Current liabilities
Within one year 974 987
Non-current liabilities
After one year but not more than two years 911 903
After two years but not more than five years 2,395 2,374
After five years but not more than ten years 3,065 3,035
Later than ten years 7,618 7,923
13,989 14,235
Total head lease obligations 14,963 15,222
The maturity analysis has been expanded in the current year to provide more
information. The comparatives have been amended for consistency.
31 March 2025 31 March
£'000 2024
£'000
Head lease liability - opening balance 15,222 15,025
Cash flows (1,034) (1,074)
Non-cash movements
Interest 1,050 1,054
Head lease accrual (275) 217
Head lease obligations - closing balance 14,963 15,222
The following table analyses the minimum undiscounted lease payments under
non-cancellable head leases for each of the following periods:
31 March 2025 31 March
£'000 2024
£'000
Current liabilities
Within one year 1,037 1,056
Non-current liabilities
After one year but not more than five years 4,151 4,223
Later than five years 84,823 86,696
Total 90,011 91,975
The weighted average unexpired lease term of head leases is 91.2 years (31
March 2024: 88.2 years).
Accounting policy
At the commencement date, head lease obligations are recognised at the present
value of future lease payments using the discount rate implicit in the lease,
if determinable, or, if not, the property-specific incremental borrowing rate.
20. Other liabilities - other payables and accrued expenses, provisions and
deferred income
31 March 2025 31 March 2024
£'000 £'000
Administration expenses payable 2,150 1,763
Deferred consideration payable - 10,300
Capital expenses payable 1,844 1,743
Loan interest payable 3,580 4,161
Property operating expenses payable 1,141 733
Other expenses payable 1,511 1,958
Total other payables and accrued expenses - current 10,226 20,658
Other payables and accrued expenses are initially recognised at fair value and
subsequently held at amortised cost. No discounting is applied to deferred
consideration on the grounds of materiality.
31 March 2025 31 March
£'000 2024
£'000
Total deferred income 6,674 7,251
Deferred income is rental income received in advance during the accounting
period. The income is deferred and is unwound to revenue on a straight-line
basis over the period in which it is earned.
21. Share capital
Share capital is the nominal amount of the Group's ordinary shares in issue.
Ordinary shares of £0.01 each Number 31 March 2025 Number 31 March
£'000 2024
£'000
Authorised, issued and fully paid:
At the start of the period 424,861,650 4,249 424,861,650 4,249
Shares issued - - - -
Balance at the end of the period 424,861,650 4,249 424,861,650 4,249
The share capital comprises one class of ordinary shares. At general meetings
of the Group, ordinary shareholders are entitled to one vote on a show of
hands and on a poll, to one vote for every share held. There are no
restrictions on the size of a shareholding or the transfer of shares, except
for the UK REIT restrictions.
22. Share premium
Share premium comprises the following amounts:
31 March 2025 31 March
£'000 2024
£'000
At the start of the period 275,648 275,648
Shares issued - -
Share premium 275,648 275,648
Share premium represents the excess over nominal value of the fair value of
the consideration received for equity shares net of direct issue costs.
23. Retained earnings
Retained earnings comprise the following cumulative amounts:
31 March 2025 31 March
£'000 2024
£'000
Capital reduction reserve 161,149 161,149
Total unrealised gains on investment properties 141,248 111,093
Total unrealised gain on interest rate caps (6,994) (168)
Total realised profits 125,026 106,646
Dividends paid from revenue profits (150,220) (123,028)
Retained earnings 270,209 255,692
Retained earnings represent the profits of the Group less dividends paid from
revenue profits to date. Unrealised gains on the revaluation of investment
properties and interest rate caps contained within this reserve are not
distributable until any gains crystallise on the sale of the investment
property and settlement of the interest rate caps. The capital reduction
reserve is a distributable reserve established upon cancellation of the share
premium of the Group on 17 November 2017.
24. Net asset value per share
Basic NAV per share amounts are calculated by dividing net assets attributable
to ordinary equity holders of the Group in the statement of financial position
by the number of ordinary shares outstanding at the end of the period. As
there are no dilutive instruments in issue, basic and diluted NAV per share
are identical.
31 March 2025 31 March
£'000 2024
£'000
IFRS net assets attributable to ordinary shareholders 550,106 535,589
IFRS net assets for calculation of NAV 550,106 535,589
Adjustment to net assets:
Fair value of interest rate derivatives (note 18 ) (6,311) (7,241)
EPRA NTA 543,795 528,348
31 March 2025 31 March
Pence 2024
Pence
IFRS basic and diluted NAV per share (pence) 129.5 126.1
EPRA NTA per share (pence) 128.0 124.4
31 March 2025 31 March
Number 2024
of shares Number
of shares
Number of shares in issue (thousands) 424,862 424,862
25. Fair value
IFRS 13 defines fair value as the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The following methods and assumptions
were used to estimate the fair values.
The fair value of cash and short-term deposits, trade receivables, trade
payables and other current liabilities approximate their carrying amounts due
to the short-term maturities of these instruments.
Interest-bearing loans and borrowings are disclosed at amortised cost. The
carrying value of the loans and borrowings approximate their fair value due to
the contractual terms and conditions of the loan. The loans are at variable
interest rates of 1.75% to 2.05% above SONIA.
Interest rate derivatives
The fair value of the interest rate cap contracts is recorded in the statement
of financial position and is revalued quarterly by an independent valuations
specialist, Chatham Financial.
The fair value is determined by forming an expectation that interest rates
will exceed strike rates and discounting these future cash flows at the
prevailing market rates as at the year-end.
Investment properties
Six-monthly valuations of investment property are performed by CBRE,
accredited independent external valuers with recognised and relevant
professional qualifications and recent experience of the location and category
of the investment property being valued. The valuations are the ultimate
responsibility of the Directors however, who appraise these every six months.
The valuation of the Group's investment property at fair value is determined
by the independent external valuer on the basis of market value in accordance
with the internationally accepted RICS Valuation - Professional Standards
January 2025 (incorporating the International Valuation Standards).
Completed investment properties are valued by adopting the 'income
capitalisation' method of valuation. This approach involves applying
capitalisation yields to current and future rental streams, net of income
voids arising from vacancies or rent-free periods and associated running
costs. These capitalisation yields and future rental values are based on
comparable property and leasing transactions in the market using the valuer's
professional judgement and market observations. Other factors taken into
account in the valuations include the tenure of the property, tenancy details
and ground and structural conditions.
Development property and land has been valued by adopting the 'comparable
method' of valuation and where appropriate supported by a 'residual
development appraisal'. The comparable method involves applying a sales rate
per acre to relevant sites supported by comparable land sales. Residual
development appraisals have been completed where there is sufficient clarity
regarding planning and an identified or indicative scheme. In a similar manner
to 'income capitalisation', development inputs include the capitalisation of
future rental streams with an appropriate yield to ascertain a gross
development value. The costs associated with bringing a scheme to the market
are then deducted, including construction costs, professional fees, finance
and developer's profit, to provide a residual site value.
The following tables show an analysis of the fair values of investment
properties and interest rate derivatives recognised in the statement of
financial position by level of the fair value hierarchy(1):
Assets and liabilities measured at fair value
31 March 2025
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investment properties - - 805,400 805,400
Interest rate derivatives - 6,311 - 6,311
Total - 6,311 805,400 811,711
Statement of financial position by level of the fair value hierarchy(1):
Assets and liabilities measured at fair value
31 March 2024
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Investment properties and assets held for sale - - 810,220 810,220
Interest rate derivatives - 7,241 - 7,241
Total - 7,241 810,220 817,461
1 Explanation of the fair value hierarchy:
• Level 1 - quoted prices (unadjusted) in active markets for
identical assets or liabilities that the entity can access at the measurement
date;
• Level 2 - use of a model with inputs (other than quoted
prices included in Level 1) that are directly or indirectly observable market
data; and
• Level 3 - use of a model with inputs that are not based on
observable market data.
Sensitivity analysis to significant changes in unobservable inputs within the
valuation of investment properties
The following table analyses:
• the fair value measurements at the end of the reporting period;
• a description of the valuation techniques applied;
• the inputs used in the fair value measurement, including the ranges of
rent charged to different units within the same building; and
• for Level 3 fair value measurements, quantitative information about
significant unobservable inputs used in the fair value measurement.
31 March 2025 Fair value £'000 Valuation technique Key unobservable inputs Range
Multi-let more than 100k sq ft 451,520 Income capitalisation ERV £3.04 - £25.66
Equivalent yield 5.1% - 11.6%
Multi-let less than 100k sq ft 139,835 Income capitalisation ERV £6.21 - £13.58
Equivalent yield 5.7% - 13.1%
Single-let regional distribution 84,625 Income capitalisation ERV £5.50 - £8.00
Equivalent yield 6.0% - 9.8%
Single-let last-mile 60,540 Income capitalisation ERV £7.25 - £11.00
Equivalent yield 5.5% - 7.3%
Development land 68,880 Comparable method Sales rate per acre £201,000 - £733,000
805,400
31 March 2024 Fair value £'000 Valuation technique Key unobservable inputs Range
Multi-let more than 100k sq ft 373,510 Income capitalisation ERV £2.62 - £10.90
Equivalent yield 5.2% - 11.1%
Multi-let less than 100k sq ft 150,390 Income capitalisation ERV £5.22 - £12.53
Equivalent yield 5.7% - 13.1%
Single-let regional distribution 129,875 Income capitalisation ERV £5.25 - £7.38
Equivalent yield
5.7% - 9.7%
Single-let last-mile 78,065 Income capitalisation ERV £4.25 - £12.71
Equivalent yield 5.5% - 9.5%
Development land 78,380 Comparable method Sales rate per acre £195,000 - £860,000
810,220
The weighted average equivalent yield and ERV for completed investment
property is 6.3% and £9.30 per sq ft, respectively (31 March 2024: 6.4% and
£7.60 per sq ft). The weighted average sales rate per acre for development
property and land is £587,000 (31 March 2024: £681,000).
Significant increases/decreases in the ERV (per sq ft per annum) and rental
growth per annum in isolation would result in a significantly higher/lower
fair value measurement. Significant increases/decreases in the discount rate
(and equivalent yield) in isolation would result in a significantly
lower/higher fair value measurement.
Generally, a change in the assumption made for the ERV is accompanied by:
• a similar change in the rent growth per annum and discount rate
(and exit yield)
The table below sets out a sensitivity analysis for each of the key sources of
estimation uncertainty with the resulting increase/(decrease) in the fair
value of completed investment property and derivatives:
As at 31 March 2025
Completed investment property Increase in sensitivity Decrease in sensitivity
£'000 £'000
Change in ERV of 5% 37,650 (37,650)
Change in net equivalent yields of 25 basis points 30,865 (28,441)
Development property and land Increase in sensitivity Decrease in sensitivity
£'000 £'000
Change in sales rate per acre of 5% 3,420 (3,420)
Interest rate derivatives Increase in sensitivity Decrease in sensitivity
£'000 £'000
Change in SONIA by 50 basis points 1,489 (1,489)
As at 31 March 2024
Completed investment property Increase in sensitivity Decrease in sensitivity
£'000 £'000
Change in ERV of 5% 36,592 (36,592)
Change in net equivalent yields of 25 basis points 27,874 (30,214)
Development property and land Increase in sensitivity Decrease in sensitivity
£'000 £'000
Change in sales rate per acre of 5% 3,892 (3,892)
Interest rate derivatives Increase in sensitivity Decrease in sensitivity
£'000 £'000
Change in SONIA by 50 basis points 2,423 (2,417)
Gains recorded in profit or loss for recurring fair value measurements
categorised within Level 3 of the fair value hierarchy amount to £30,155,000
(31 March 2024: £15,082,000) and are presented in the consolidated statement
of comprehensive income in line item 'fair value gains/(losses) on investment
properties'.
All gains and losses recorded in profit or loss for recurring fair value
measurements categorised within Level 3 of the fair value hierarchy are
attributable to changes in unrealised gains or losses relating to investment
property held at the end of the reporting period.
The carrying amount of the Group's assets and liabilities is considered to be
the same as their fair value.
26. Financial risk management objectives and policies
The Group's principal financial liabilities are loans and borrowings. The main
purpose of the Group's loans and borrowings is to finance the acquisition of
the Group's property portfolio. The Group has trade and other receivables,
trade and other payables and cash and short-term deposits that arise directly
from its operations.
The Group is exposed to market risk, interest rate risk, credit risk and
liquidity risk. The Board of Directors reviews and agrees policies for
managing each of these risks, which are summarised below.
Market risk
The Group's activities expose it primarily to the financial risks of changes
in interest rates. The Group enters into a variety of derivative financial
instruments to manage its exposure to interest rate risk. There has been no
change to the Group's exposure to market risks or the manner in which these
risks are managed and measured.
Interest rate risk
Interest rate risk is the risk that future cash flows of a financial
instrument will fluctuate because of changes in market interest rates. The
Group's exposure to the risk of changes in market interest rates relates to
its variable rate bank loans. In order to address interest rate risk, the
Group has entered into interest rate cap instruments.
The instruments have a combined notional value of £250.0 million, £200.0
million at a strike rate of 1.50% and the remaining £50.0 million at a strike
rate of 2.00%. £100.0 million has a termination date of 20 July 2025, £100.0
million has a termination date of 20 July 2027 and the £50.0 million has a
termination date of 20 November 2026.
As at 31 March 2025, the unhedged exposure to changes in interest rates is
£19.0 million (31 March 2024: £34.0 million).
Changes in interest rates may have an impact on consolidated earnings over the
longer term. The table below provides indicative sensitivity data.
Effect on profit before tax: 2025 2024
Increase in interest rates by 1% Decrease in interest rates by 1% Increase in interest rates by 1% Decrease in interest rates by 1%
£'000 £'000 £'000 £'000
Increase/(decrease) (190) 190 (340) 340
Credit risk
Credit risk is the risk that a counterparty or occupier will cause a financial
loss to the Group by failing to meet a commitment it has entered into with the
Group.
All cash deposits are placed with approved counterparties, currently HSBC Bank
plc. In respect of property investments, in the event of a default by an
occupier, the Group will suffer a shortfall and additional costs concerning
reletting of the property. The Investment Advisor monitors the occupier
arrears in order to anticipate and minimise the impact of defaults by
occupational occupiers.
Credit risk is not considered material due to the diverse number of occupiers
in the investment property portfolio.
The following table analyses the Group's exposure to credit risk:
31 March 2025 31 March
£'000 2024
£'000
Cash and cash equivalents 8,389 9,905
Restricted cash - 6,063
Trade and other receivables¹ 13,312 9,036
Total 21,701 25,004
1 Excludes prepayments and payments in advance of
completion.
Liquidity risk
Liquidity risk is defined as the risk that the Group will encounter difficulty
in meeting obligations associated with financial liabilities that are settled
by delivering cash or another financial asset. Exposure to liquidity risk
arises because of the possibility that the Group could be required to pay its
liabilities earlier than expected. The Group's objective is to maintain a
balance between continuity of funding and flexibility through the use of bank
deposits and loans.
Set out below is a comparison by class of the carrying amounts and fair value
of the Group's financial instruments that are carried in the financial
statements:
2025 2024
Fair value hierarchy Carrying value Carrying value Fair Fair
£'000 £'000 value value
£'000 £'000
Held at amortised cost
Cash and cash equivalents n/a 8,389 8,389 9,905 9,905
Restricted cash n/a - - 6,063 6,063
Trade and other receivables¹ n/a 13,312 13,312 9,036 9,036
Other payables and accrued expenses² n/a (9,789) (9,789) (18,985) (18,985)
Interest-bearing loans and borrowings n/a (268,257) (268,257) (280,413) (280,413)
Held at fair value
Interest rate derivatives (assets) 2 6,311 6,311 7,241 7,241
1 Excludes prepayments and payments in advance of
completion.
2 Excludes VAT liability and deferred income.
The table below summarises the maturity profile of the Group's financial and
lease liabilities based on contractual undiscounted payments:
Year ended 31 March 2025 Less than three months Three to 12 months One to two years Two to five years More than five years Total
£'000 £'000 £'000 £'000 £'000 £'000
Interest-bearing loans and borrowings 4,956 14,923 19,879 293,454 - 333,212
Other payables and accrued expenses 9,789 - - - - 9,789
Head lease obligations 259 778 1,038 3,113 84,823 90,011
Total 15,004 15,701 20,917 296,567 84,823 433,012
Year ended 31 March 2024 Less than three months Three to 12 months One to two years Two to five years More than five years Total
£'000 £'000 £'000 £'000 £'000 £'000
Interest-bearing loans and borrowings 5,233 15,755 20,988 330,805 - 372,781
Other payables and accrued expenses 8,685 10,300 - - - 18,985
Head lease obligations 264 792 1,056 3,167 86,696 91,975
Total 14,182 26,847 22,044 333,972 86,696 483,741
27. Subsidiaries
Company Country of Number and class Group
incorporation of share held holding
and operation by the Group
Tilstone Holdings Limited UK 63,872 ordinary shares 100%
Tilstone Warehouse Holdco Limited UK 94,400 ordinary shares 100%
Tilstone Industrial Warehouse Limited(1) UK 23,600 ordinary shares 100%
Tilstone Retail Warehouse Limited(1) UK 20,000 ordinary shares 100%
Tilstone Industrial Limited(1) UK 20,000 ordinary shares 100%
Tilstone Retail Limited(1) UK 200 ordinary shares 100%
Tilstone Trade Limited(1) UK 20,004 ordinary shares 100%
Tilstone Basingstoke Limited(1) UK 1,000 ordinary shares 100%
Tilstone Glasgow Limited(1) UK 1 ordinary share 100%
Tilstone Radway Limited(1) UK 100 ordinary shares 100%
Tilstone Oxford Limited(1) UK 1,000 ordinary shares 100%
Tilstone Liverpool Limited(1) UK 100 ordinary shares 100%
Warehouse 1234 Limited(1) UK 100 ordinary shares 100%
Tilstone Tamworth Limited(1) UK 100 ordinary shares 100%
1 Indirect subsidiaries.
The registered office of all subsidiaries is located at 19th Floor, 51 Lime
Street, London EC3M 7DQ.
Tilstone Chesterfield Limited was sold on 18 June 2024.
28. Capital management
The Group's capital is represented by share capital, reserves and borrowings
totalling £820.0 million (2024: £816.0 million).
The primary objective of the Group's capital management is to ensure that it
remains within its quantitative banking covenants and maintains a strong
credit rating. The Group's capital policies are as follows:
• the Group will keep sufficient cash for working capital purposes with
excess cash, should there be any, deposited at the best interest rate
available while maintaining flexibility to fund the Group's investment
programme;
• borrowings will be managed in accordance with the loan agreements and
covenants will be tested quarterly and reported to the Directors.
Additionally, quarterly lender reporting will be undertaken in line with the
loan agreement; and
• new borrowings are subject to Director approval. Such borrowings will
support the Group's investment programme but be subject to a maximum 60% LTV.
The intention is to maintain borrowings at an LTV of between 30% and 40%.
The Group is subject to banking covenants in regards to its debt facility and
these include a prescribed methodology for interest cover and market value
covenants that are measured at a Group level.
The Group has complied with all covenants on its borrowings up to the date of
this report. All of the targets mentioned above sit comfortably within the
Group's covenant levels, which include loan to value ("LTV"), interest cover
ratio and loan to projected project cost ratio. The Group LTV at the year-end
was 32.4% (2024: 33.1%) and there is substantial headroom within existing
covenants.
29. Related-party transactions
Directors
The Directors (all Non-Executive Directors) of the Group and its subsidiaries
are considered to be the key management personnel of the Group. Directors'
remuneration (including social security costs) for the period totalled
£178,000 (31 March 2024: £178,000) and at 31 March 2025, a balance of £nil
(31 March 2024: £nil) was outstanding. The Directors who served during the
year received £1.5 million in dividend payments (31 March 2024: £1.5
million). Further information is given in note 5 and in the Directors'
remuneration report on pages 95 to 97.
Investment Advisor
The Group is party to an Investment Management Agreement with the Investment
Manager and the Investment Advisor, pursuant to which the Group has appointed
the Investment Advisor to provide investment advisory services relating to the
respective assets on a day-to-day basis in accordance with their respective
investment objectives and policies, subject to the overall supervision and
direction by the Investment Manager and the Board of Directors.
For its services to the Group during the year ended 31 March 2025, the
Investment Advisor receives an annual fee at the rate of 1.1% of the NAV of
the Group up to £500 million and at a lower rate of 0.9% thereafter.
During the year, the Group incurred £5,821,000 (31 March 2024: £5,725,000)
in respect of investment management fees. As at 31 March 2025, £1,453,000 (31
March 2024: £1,429,000) was outstanding.
During the year, the Group reimbursed £11,771 (31 March 2024: £5,151) of
incidental travel-related costs.
On 11 February the Board reached an agreement with the Investment Advisor on
the basis of its fee calculation.
The new arrangement will see the basis of the quarterly management fee move
from net asset value to the lower of net asset value and market
capitalisation, effective from 1 April 2025. The current fee thresholds and
rates applied to the net asset value-based calculations will be unchanged, as
shown below.
Threshold Fee rate on lower of EPRA net asset value and market capitalisation
Up to £500 million 1.1%
Above £500 million 0.9%
As part of the transition to this new fee arrangement, there will be an
adjustment in the calculation of the fee for the first financial year only
(ending 31 March 2026). Under this transitional arrangement, the basis of the
fee calculation will be subject to a floor of no lower than 70% of EPRA net
asset value. All other terms of the Investment Management Agreement remain
unchanged.
30. Ultimate controlling party
It is the view of the Directors that there is no ultimate controlling party.
31. Notes to the statement of cash flows
Reconciliation of changes in liabilities to cash flows generated from
financing activities
Interest payable Interest-bearing loans and borrowings Head lease liability Total
£'000 £'000 £'000 £'000
Balance as at 1 April 2024 4,161 280,413 15,222 299,796
Changes from financing cash flows:
Bank loans drawn down - 56,000 - 56,000
Bank loans repaid - (71,000) - (71,000)
Loan arrangement fees paid in the year - (801) - (941)
Loan interest paid (21,225) - - (21,225)
Head lease payments - - (1,034) (1,034)
Total changes from financing cash flows (21,225) (15,801) (1,034) (38,200)
Accrued arrangement fees - (140) - -
Amortisation charge for the year - 666 - 666
Arrangement fees written-off - 3,119 - 3,119
Head lease interest - - 1,050 1,050
Interest and commitment fee 20,644 - - 20,644
Accrued head lease expense - - (275) (275)
Balance as at 31 March 2025 3,580 268,257 14,963 286,800
Interest payable Interest-bearing loans and borrowings Head lease liability Total
£'000 £'000 £'000 £'000
Balance as at 1 April 2023 3,691 304,093 15,025 322,809
Changes from financing cash flows:
Bank loans drawn down - 323,000 - 323,000
Bank loans repaid - (345,000) - (345,000)
Loan arrangement fees paid in the year - (4,251) - (4,251)
Loan interest paid (21,321) - - (21,321)
Head lease payments - - (1,074) (1,074)
Total changes from financing cash flows (21,321) (26,251) (1,074) (48,646)
Amortisation charge for the year - 883 - 883
Arrangement fees written-off - 1,688 - 1,688
Head lease interest - - 1,054 1,054
Interest and commitment fee 21,791 - - 21,791
Accrued head lease expense - - 217 217
Balance as at 31 March 2024 4,161 280,413 15,222 299,796
32. Capital commitments
Other than the amounts disclosed in note 20, the Group has no material capital
commitments in relation to its development activity, asset management
initiatives and commitments under development land, outstanding as at 31 March
2025 (31 March 2024: £nil).
33. Post-balance sheet events
On 4 June 2025 the Group announced that it has exchanged contracts for the
acquisition of Rycote Lane, a multi-let industrial estate near Thame, in the
Oxford-Cambridge Arc, for £34.8 million. The acquisition is due to complete
in September 2025.
As announced on 4 June 2025, the Company's directors have reached an agreement
on the terms of a recommended cash acquisition of the entire issued and to be
issued ordinary share capital of the Company by Wapping Bidco Ltd, a newly
formed company indirectly owned by investments funds advised by affiliates of
Blackstone Inc. expected to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006 (the "Acquisition"). If the
Acquisition is completed, this will result in a change in control of the
Company. There are no agreements between the Company and the directors for
compensation for loss of office as a result of the Acquisition or any other
takeover, other than the provisions of the existing appointment letters.
UNAUDITED SUPPLEMENTARY NOTES NOT PART OF THE CONSOLIDATED FINANCIAL
INFORMATION
For the year ended 31 March 2025
The Group is a member of the European Public Real Estate Association ("EPRA").
EPRA has developed and defined performance measures to give transparency,
comparability and relevance of financial reporting across entities that may
use different accounting standards.
The Group presents adjusted earnings per share ("EPS"), dividends per share,
total accounting return, total cost ratio, LTV ratio and EPRA Best Practices
Recommendations, calculated in accordance with EPRA guidance, as Alternative
Performance Measures ("APMs") to assist stakeholders in assessing performance
alongside the Group's statutory results reported under IFRS. APMs are among
the key performance indicators used by the Board to assess the Group's
performance and are used by research analysts covering the Group.
EPRA Best Practices Recommendations have been disclosed to facilitate
comparison with the Group's peers through consistent reporting of key real
estate specific performance measures. Certain other APMs may not be directly
comparable with other companies' adjusted measures and are not intended to be
a substitute for, or superior to, any IFRS measures of performance.
Table 1: EPRA performance measures summary
Notes 2025 2024
(Restated)
EPRA EPS (pence) Table 2 5.1 4.8
EPRA cost ratio (including direct vacancy cost) Table 6 28.1% 24.4%
EPRA cost ratio (excluding direct vacancy cost) Table 6 22.8% 23.4%
EPRA NDV per share (pence) Table 3 129.5 126.1
EPRA NRV per share (pence) Table 3 140.9 137.3
EPRA NTA per share (pence) Table 3 128.0 124.4
EPRA NIY Table 4 4.9% 5.4%
EPRA 'topped-up' net initial yield Table 4 5.3% 5.6%
EPRA vacancy rate Table 5 8.5% 3.6%
EPRA LTV Table 10 30.5% 34.2%
Table 2: EPRA income statement and earnings performance measures
Notes Year ended 31 March 2025 Year ended
£'000 31 March 2024 (Restated)
£'000
Total property income 3 51,911 51,026
Less: service charge income 3 (3,280) (3,853)
Less: dilapidation income 3 (3,417) (1,652)
Less: insurance recharged 3 (1,432) (1,496)
Rental income (A) 43,782 44,025
Property operating expenses 4 (5,453) (4,330)
Service charge expenses 4 (3,596) (4,068)
Add back: service charge income 3 3,280 3,853
Add back: dilapidation income 3 3,417 1,652
Add back: insurance recharged 3 1,432 1,496
Adjusted gross profit (B) 42,862 42,628
Administration expenses 4 (7,830) (7,605)
Adjusted operating profit before interest and tax 35,032 35,023
Finance income 7 8,350 8,460
Finance expenses 8 (24,509) (24,566)
Add back: Losses associated with early close-out of debt (see note 17) 3,119 1,688
Adjusted profit before tax 21,992 20,605
Tax on adjusted profit - -
Adjusted earnings 21,992 20,605
Less: surrender premium received (380) -
EPRA earnings 21,612 20,605
Weighted average number of shares in issue (thousands) 424,862 424,862
EPRA EPS (pence) 5.1 4.8
Adjusted EPS (pence) 5.2 4.8
Gross to net rental income ratio (B/A) 97.90% 96.83%
The adjusted earnings per share reflects our ability to generate earnings from
our portfolio.
Table 2: EPRA income statement and earnings performance measures continued
In September 2024, the European Public Real Estate Association's guidelines
for the calculation of EPRA earnings were updated to include the interest from
financial derivatives, effective from 1 October 2024 onwards; the comparative
has been restated to reflect the change in guidance in line with the
calculation of adjusted earnings.
The Group has also included additional earnings measures called 'Adjusted
Earnings' and includes premiums received during the year in compensation for
rental income foregone for surrendering a lease early.
The Board deems this a more relevant indicator of core earnings as it reflects
our ability to generate earnings from our portfolio.
Table 3: EPRA balance sheet and net asset value performance measures
In line with the European Public Real Estate Association ("EPRA") published
Best Practice Recommendations ("BPR") for financial disclosures by public real
estate companies, the Group presents three measures of net asset value: EPRA
net disposal value ("NDV"), EPRA net reinstatement value ("NRV") and EPRA net
tangible assets ("NTA"). EPRA NTA is considered to be the most relevant
measure for Warehouse REIT's operating activities.
As at 31 March 2025 EPRA NDV EPRA NRV EPRA NTA
£'000 £'000 £'000
Total properties(1) 805,400 805,400 805,400
Net borrowings(2) (260,611) (260,611) (260,611)
Other net liabilities 5,317 5,317 5,317
IFRS NAV 550,106 550,106 550,106
Exclude: fair value of interest rate derivatives - (6,311) (6,311)
Include: real estate transfer tax(3) - 54,767 -
NAV used in per share calculations 550,106 598,562 543,795
Number of shares in issue (thousands) 424,862 424,862 424,862
NAV per share (pence) 129.5 140.9 128.0
As at 31 March 2024 EPRA NDV EPRA NRV EPRA NTA
£'000 £'000 £'000
Total properties(1) 810,220 810,220 810,220
Net borrowings(2) (268,032) (268,032) (268,032)
Other net liabilities (6,599) (6,599) (6,599)
IFRS NAV 535,589 535,589 535,589
Exclude: fair value of interest rate derivatives - (7,241) (7,241)
Include: real estate transfer tax(3) - 55,095 -
NAV used in per share calculations 535,589 583,443 528,348
Number of shares in issue (thousands) 424,862 424,862 424,862
NAV per share (pence) 126.1 137.3 124.4
1 Professional valuation of investment property (including assets held
for sale).
2 Comprising interest-bearing loans and borrowings (excluding unamortised
loan arrangement fees) of £269,000,000 (31 March 2024: £284,000,000) net of
cash of £8,389,000 (31 March 2024: £15,968,000).
3 EPRA NTA and EPRA NDV reflect IFRS values which are net of real estate
transfer tax. Real estate transfer tax is added back when calculating EPRA
NRV.
EPRA NDV details the full extent of liabilities and resulting shareholder
value if Company assets are sold and/or if liabilities are not held until
maturity. Deferred tax and financial instruments are calculated as to the full
extent of their liability, including tax exposure not reflected in the
statement of financial position, net of any resulting tax.
EPRA NTA assumes entities buy and sell assets, thereby crystallising certain
levels of deferred tax liability.
EPRA NRV highlights the value of net assets on a long-term basis and reflects
what would be needed to recreate the Company through the investment markets
based on its current capital and financing structure. Assets and liabilities
that are not expected to crystallise in normal circumstances, such as the fair
value movements on financial derivatives and deferred taxes on property
valuation surpluses, are excluded. Costs such as real estate transfer taxes
are included.
Table 4: EPRA net initial yield
31 March 2025 31 March 2024
£'000 £'000
Total properties per external valuers' report 805,400 810,220
Less development property and land (68,880) (78,493)
Net valuation of completed investment property 736,520 731,727
Add estimated purchasers' costs(1) 50,083 49,757
Gross valuation of completed property including estimated purchasers' costs 786,603 781,484
(A)
Gross passing rents(5) (annualised) 40,849 42,920
Less irrecoverable property costs(2) (2,122) (613)
Net annualised rents (B) 38,727 42,307
Add notional rent on expiry of rent-free periods or other lease incentives(3) 2,968 1,654
'Topped-up' net annualised rents (C) 41,695 43,961
EPRA NIY (B/A) 4.9% 5.4%
EPRA 'topped-up' net initial yield (C/A) 5.3% 5.6%
1 Purchasers' costs estimated at 6.8%.
2 Gross passing rents and irrecoverable property costs assessed as at
the balance sheet date for completed investment properties excluding
development property and land.
3 Adjustment for unexpired lease incentives such as rent-free periods,
discounted rent period and step rents. The adjustment includes the annualised
cash rent that will apply at the expiry of the lease incentive. Rent-frees
periods expire over a weighted average period of three months' passing rents.
Irrecoverable property costs assessed as at the balance sheet date for
completed investment properties excluding development property and land.
EPRA NIY represents annualised rental income based on the cash rents passing
at the balance sheet date, less non-recoverable property operating expenses,
divided by the market value of the property, increased with (estimated)
purchasers' costs. It is a comparable measure for portfolio valuations
designed to make it easier for investors to judge for themselves how the
valuation of portfolio X compares with portfolio Y.
EPRA 'topped-up' NIY incorporates an adjustment to the EPRA NIY in respect of
the expiration of rent-free periods (or other unexpired lease incentives such
as discounted rent periods and step rents).
NIY as stated in the Investment Advisor's report calculates net initial yield
on topped-up annualised rents but does not deduct non-recoverable property
costs.
Table 5: EPRA vacancy rate
31 March 2025 31 March 2024
£'000 £'000
Annualised ERV of vacant premises (D) 4,638 1,907
Annualised ERV for the investment portfolio (E) 54,525 53,488
EPRA vacancy rate (D/E) 8.5% 3.6%
EPRA vacancy rate represents ERV of vacant space divided by ERV of the
completed investment portfolio, excluding development property and land. It is
a pure measure of investment property space that is vacant, based on ERV.
Table 6: Total cost ratio/EPRA cost ratio
Year ended 31 March 2025 Year ended
£'000 31 March 2024
£'000
Property operating expenses 5,453 4,330
Service charge expenses 3,596 4,068
Add back service charge income (3,280) (3,853)
Add back insurance recharged (1,432) (1,496)
Net property operating expenses 4,337 3,049
Administration expenses 7,830 7,605
Less ground rents(1) (164) (165)
Total cost including direct vacancy cost (F) 12,003 10,489
Direct vacancy cost (2,261) (455)
Total cost excluding direct vacancy cost (G) 9,742 10,034
Rental income 43,402 44,025
Surrender premium 380 -
Less ground rents paid (1,034) (1,074)
Gross rental income less ground rents (H) 42,748 42,951
Less direct vacancy cost (2,261) (455)
Net rental income less ground rents 40,487 42,496
Total cost ratio including direct vacancy cost (F/H) 28.1% 24.4%
Total cost ratio excluding direct vacancy cost (G/H) 22.8% 23.4%
1 Ground rent expenses included within
administration expenses such as depreciation of head lease assets.
Table 6: Total cost ratio/EPRA cost ratio continued
Year ended 31 March 2025 Year ended
£'000 31 March 2024
£'000
Total cost including direct vacancy cost (F) 12,003 10,489
EPRA total cost including direct vacancy cost (I) 12,003 10,489
Direct vacancy cost (2,261) (455)
EPRA total cost excluding direct vacancy cost (J) 9,742 10,034
EPRA cost ratio including direct vacancy cost (I/H) 28.1% 24.4%
EPRA cost ratio excluding direct vacancy cost (J/H) 22.8% 23.4%
EPRA cost ratios represent administrative and operating costs (including and
excluding costs of direct vacancy) divided by gross rental income less ground
rents. They are a key measure to enable meaningful measurement of the changes
in the Group's operating costs.
It is the Group's policy not to capitalise overheads or operating expenses and
no such costs were capitalised in either the year ended 31 March 2025 or the
year ended 31 March 2024.
Table 7: Lease data
As at 31 March 2025 Year 1 Year 2 Years 3- 10 Year 10+ Head rents payable Total
£'000 £'000 £'000 £'000 £'000 £'000
Passing rent of leases expiring in: 6,077 3,688 29,713 1,517 (1,326) 39,669
ERV of leases expiring in: 12,278 4,326 35,916 2,220 (1,326) 53,414
Passing rent subject to review in: 11,061 6,096 23,625 213 (1,326) 39,669
ERV subject to review in: 18,292 6,978 29,151 319 (1,326) 53,414
WAULT to expiry is 5.0 years and to break is 3.4 years.
As at 31 March 2024 Year 1 Year 2 Years 3- 10 Year 10+ Head rents payable Total
£'000 £'000 £'000 £'000 £'000 £'000
Passing rent of leases expiring in: 7,583 5,642 28,759 2,282 (1,209) 43,057
ERV of leases expiring in: 11,525 6,712 34,103 2,571 (1,209) 53,702
Passing rent subject to review in: 16,208 8,313 19,744 1 (1,209) 43,057
ERV subject to review in: 22,714 9,583 22,613 1 (1,209) 53,702
WAULT to expiry is 5.0 years and to break is 4.1 years.
Table 8: EPRA capital expenditure
Year ended 31 March 2025 Year ended
£'000 31 March 2024
£'000
Acquisitions(1) 40,923 -
Development spend(2) 2,195 8,191
Completed investment properties:(3)
No incremental lettable space - like-for-like portfolio 6,565 3,327
No incremental lettable space - other - -
Occupier incentives - -
Total capital expenditure 49,683 11,518
Conversion from accruals to cash basis 9,949 653
Total capital expenditure on a cash basis 59,632 12,171
1 Acquisitions include £40.9 million completed investment property and
£nil development property and land (2024: £nil and £nil respectively).
2 Expenditure on development property and land.
3 Expenditure on completed investment properties.
Table 9: EPRA like-for-like rental income
Notes Fair value as at Year ended 31 March 2025 Year ended % change
31 March 2025 £'000 31 March 2024
£'000 £'000
EPRA like-for-like rental income(1) 38,555 36,995 4.2%
Other(2) 188 -
Adjusted like-for-like rental income 693,020 38,743 36,995 4.7%
Development lettings 68,880 109 145
Properties acquired 43,500 2,015 -
Properties sold 2,535 6,885
Rental income 43,402 44,025
Surrender premium 380
Service charge income 3,280 3,853
Dilapidation income 3,417 1,652
Insurance recharged 1,432 1,496
Total property income 3 805,400 51,911 51,026
1 Like-for-like portfolio valuation as at 31 March 2025: £693.0 million
(31 March 2024: £595.6 million).
2 Includes rent surrender premiums, back rent and other items.
Table 10: Loan to value ("LTV") ratio and EPRA LTV
Gross debt less cash, short-term deposits and liquid investments, divided by
the aggregate value of properties and investments. The Group has also opted to
present the EPRA loan to value, which is defined as net debt divided by total
property market value.
Notes Year ended 31 March 2025 Year ended
£'000 31 March 2024
£'000
Interest-bearing loans and borrowings 17 269,000 284,000
Cash 15 (8,389) (15,968)
Net debt (A) 260,611 268,032
Total portfolio valuation per valuer's report (B) 13, 14 805,400 810,220
LTV ratio (A/B) 32.4% 33.1%
EPRA LTV
Notes Year ended 31 March 2025 Year ended
£'000 31 March 2024
£'000
Interest-bearing loans and borrowings(1) 17 269,000 284,000
Net payables(2) (8,912) 16,646
Cash 15 (8,389) (15,968)
Net borrowings (A) 251,699 284,678
Investment properties at fair value 13, 14 805,400 810,220
Interest rate derivatives 18 6,311 7,241
Head lease obligation 13, 19 13,823 14,185
Total property value (B) 825,534 831,646
EPRA LTV (A/B) 30.5% 34.2%
1 Excludes unamortised loan arrangement fees asset of £0.7 million
(2024: £3.6 million) (see note 17).
2 Net payables includes trade and other receivables and other payables
and accrued expenses.
Table 11: Total accounting return
The movement in EPRA NTA over a period plus dividends paid in the period,
expressed as a percentage of the EPRA NTA at the start of the period.
Year ended 31 March 2025 Year ended 31 March 2024
Notes Pence per share Pence per share
Opening EPRA NTA (A) 124.4 122.6
Movement (B) 3.6 1.8
Closing EPRA NTA 24 128.0 124.4
Dividends per share (C) 11 6.4 6.4
Total accounting return (B+C)/A 8.0% 6.7%
Table 12: Ongoing charges ratio
Ongoing charges ratio represents the costs of running the REIT as a percentage
of NAV as prescribed by the Association of Investment Companies.
Notes Year ended 31 March 2025 Year ended
£'000 31 March 2024
£'000
Administration expenses 4 7,830 7,605
Less: costs associated with moving to Main Market - -
Less: head lease asset depreciation (164) (165)
Annualised ongoing charges (A) 7,666 7,440
Opening NAV as at 1 April 535,589 528,475
NAV as at 30 September 547,100 536,848
Closing NAV as at 31 March 551,106 535,589
Average undiluted NAV during the period (B) 544,597 533,637
Ongoing charges ratio (A/B) 1.4% 1.4%
GLOSSARY
Adjusted earnings per share ("Adjusted EPS")
EPRA EPS adjusted to exclude one-off costs, divided by the weighted average
number of shares in issue during the year, which ultimately underpins our
dividend payments
Admission
The admission of Warehouse REIT plc onto the premium segment of the London
Stock Exchange on 12 July 2022
AGM
Annual General Meeting
AIC
The Association of Investment Companies
AIFM
Alternative Investment Fund Manager
AIFMD
The Alternative Investment Fund Managers Regulations 2013 (as amended by The
Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations
2019) and the Investment Funds
Sourcebook forming part of the FCA Handbook
AIM
A market operated by the London Stock Exchange
APM
An Alternative Performance Measure is a numerical measure of the Company's
current, historical or future financial performance, financial position or
cash flows, other than a financial measure defined or specified in the
applicable financial framework. In selecting these APMs, the Directors
considered the key objectives and expectations of typical investors
BREEAM
BREEAM (Building Research Establishment Environmental Assessment Method) is a
certification which assesses the sustainability credentials of buildings
against a range of social and environmental criteria
Company
Warehouse REIT plc
Contracted rent
Gross annual rental income currently receivable on a property plus rent
contracted from expiry of rent-free periods and uplifts agreed at the balance
sheet date less any ground rents payable under head leases
Development property and land
Whole or a material part of an estate identified as having potential for
development. Such assets are classified as development property and land until
development is completed and they have the potential to be fully income
generating
Effective occupancy
Total open market rental value of the units leased divided by total open
market rental value excluding assets under development, units undergoing
refurbishment and units under offer to let
EPC
Energy Performance Certificates provide information about a property's energy
use including an energy efficiency rating from A (most efficient) to G (least
efficient) and is valid for ten years.
EPRA
The European Public Real Estate Association, the industry body for European
REITs
EPRA cost ratio
The sum of property expenses and administration expenses as a percentage of
gross rental income less ground rents, calculated both including and excluding
direct vacancy cost
EPRA earnings
IFRS profit after tax excluding movements relating to changes in fair value of
investment properties, gains/losses on property disposals, changes in fair
value of financial instruments and the related tax effects
EPRA earnings per share ("EPRA EPS")
A measure of EPS on EPRA earnings designed to present underlying earnings from
core operating activities based on the weighted average number of shares in
issue during the year
EPRA guidelines
The EPRA Best Practices Recommendations Guidelines October 2019
EPRA like-for-like rental income growth
The growth in rental income on properties owned throughout the current and
previous year under review. This growth rate includes revenue recognition and
lease accounting adjustments but excludes development property and land in
either year and properties acquired or disposed of in either year
EPRA NDV / EPRA NRV / EPRA NTA per share
The EPRA net asset value measures figures divided by the number of shares
outstanding at the balance sheet date
EPRA net disposal value ("EPRA NDV")
The net asset value measure detailing the full extent of liabilities and
resulting shareholder value if Company assets are sold and/or if liabilities
are not held until maturity. Deferred tax and financial instruments are
calculated as to the full extent of their liability, including tax exposure
not reflected in the statement of financial position, net of any resulting tax
EPRA net initial yield ("EPRA NIY")
The annualised passing rent generated by the portfolio, less estimated
non-recoverable property operating expenses, expressed as a percentage of the
portfolio valuation (adding notional purchasers' costs), excluding development
property and land
EPRA net reinstatement value ("EPRA NRV")
The net asset value measure to highlight the value of net assets on a
long-term basis and reflect what would be needed to recreate the Company
through the investment markets based on its current capital and financing
structure. Assets and liabilities that are not expected to crystallise in
normal circumstances, such as the fair value movements on financial
derivatives and deferred taxes on property valuation surpluses, are excluded.
Costs such as real estate transfer taxes are included
EPRA net tangible assets ("EPRA NTA")
The net asset value measure assuming entities buy and sell assets, thereby
crystallising certain levels of deferred tax liability
EPRA 'topped-up' net initial yield
The annualised passing rent generated by the portfolio, topped up for
contracted uplifts, less estimated non-recoverable property operating
expenses, expressed as a percentage of the portfolio valuation (adding
notional purchasers' costs), excluding development property and land
EPRA vacancy rate
Total open market rental value of vacant units divided by total open market
rental value of the portfolio excluding development property and land
EPS
Earnings per share
Equivalent yield
The weighted average rental income return expressed as a percentage of the
investment property valuation, plus purchasers' costs, excluding development
property and land
ERV
The estimated annual open market rental value of lettable space as assessed by
the external valuer
FCA
Financial Conduct Authority
GAV
Gross asset value
Group
Warehouse REIT plc and its subsidiaries
IASB
International Accounting Standards Board
IFRS
International Financial Reporting Standards
IFRS earnings per share ("EPS")
IFRS earnings after tax for the year divided by the weighted average number of
shares in issue during the year
IFRS NAV per share
IFRS net asset value divided by the number of shares outstanding at the
balance sheet date
Interest cover
Adjusted operating profit before gains on investment properties, interest (net
of interest received) and tax, divided by the underlying net interest expense
Investment portfolio
Completed buildings and excluding development property and land
IPO
Initial public offering
Like-for-like rental income growth
The increase in contracted rent of properties owned throughout the period
under review, expressed as a percentage of the contracted rent at the start of
the period, excluding development property and land and units undergoing
refurbishment
Like-for-like valuation increase
The increase in the valuation of properties owned throughout the period under
review, expressed as a percentage of the valuation at the start of the period,
net of capital expenditure
Loan to value ratio ("LTV")
Gross debt less cash, short-term deposits and liquid investments, divided by
the aggregate value of properties and investments
Main Market
The Premium Segment of the London Stock Exchange's Main Market
MEES
The Minimum Energy Efficiency Standards are regulations requiring a minimum
energy efficiency standard to be met (or have valid exemptions registered)
before properties in England and Wales can be let. Currently the minimum is an
EPC E rating.
NAV
Net asset value
Net initial yield ("NIY")
Contracted rent at the balance sheet date, expressed as a percentage of the
investment property valuation, plus purchasers' costs, excluding development
property and land
Net rental income
Gross annual rental income receivable after deduction of ground rents and
other net property outgoings including void costs and net service charge
expenses
Net reversionary yield ("NRY")
The anticipated yield to which the net initial yield will rise (or fall) once
the rent reaches the ERV
Occupancy
Total open market rental value of the units leased divided by total open
market rental value excluding development property and land, equivalent to one
minus the EPRA vacancy rate
Ongoing charges ratio
Ongoing charges ratio represents the costs of running the REIT as a percentage
of NAV as prescribed by the Association of Investment Companies
Passing rent
Gross annual rental income currently receivable on a property as at the
balance sheet date less any ground rents payable under head leases
Property income distribution ("PID")
Profits distributed to shareholders that are subject to tax in the hands of
the shareholders as property income. PIDs are usually paid net of withholding
tax (except for certain types of tax-exempt shareholders). REITs also pay out
normal dividends called non-PIDs
Reversion
Estimated rental uplift to market levels on contracted rent.
RCF
Revolving credit facility
Real Estate Investment Trust ("REIT")
A listed property company that qualifies for, and has elected into, a tax
regime that is exempt from corporation tax on profits from property rental
income and UK capital gains on the sale of investment properties
RPI
Retail price index
SONIA
Sterling Overnight Index Average
Total accounting return
The movement in EPRA NTA over a period plus dividends paid in the period,
expressed as a percentage of the EPRA NTA at the start of the period
Total cost ratio
EPRA cost ratio excluding one-off costs calculated both including and
excluding vacant property costs
Weighted average unexpired lease term ("WAULT")
Average unexpired lease term to first break or expiry weighted by gross
contracted rent (excluding ground rents payable under head leases) across the
portfolio, excluding development property and land
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