TIDMGPOR
RNS Number : 5097W
Great Portland Estates PLC
15 November 2017
Press Release
15 November 2017
Strong operational performance in H1
The Directors of Great Portland Estates plc announce the results
for the Group for the six months ended 30 September 2017.
Highlights(1) for the six months:
Valuation up; upgraded rental value growth guidance
-- Portfolio valuation up 1.0%(2) (developments: up 1.6%(2) )
-- Rental value growth of 0.7%(2) (0.5% offices, 1.7% retail); yield contraction of 4 bps
-- Total property return of 2.4%, with capital return of 1.0% v
IPD Central London (quarterly index) of 2.9%
-- Upgraded rental value growth guidance for financial year: range now +1.5% to minus 2.5%
Robust financial performance; increased EPRA NAV, earnings and
interim dividend
-- EPRA(3) NAV per share of 813 pence, up 1.8% over six months
-- Net assets of GBP2,634.8 million (31 March 2017: GBP2,738.4
million); reduction primarily due to payment of GBP110 million
special dividend in period
-- EPRA(3) earnings of GBP31.6 million, up 11.7% on H1 2016. EPRA(3) EPS of 9.6 pence, up 15.7%
-- After revaluation surplus, reported profit after tax of
GBP25.3 million (2016: loss of GBP62.8 million)
-- Total accounting return of 2.6% over six months; interim
dividend per share of 4.0 pence, up 8.1%
Leasing ahead of ERV and capturing reversion, driving rent roll
to new record
-- 37 new lettings (annual rent of GBP11.3 million, 170,100 sq
ft), market lettings 2.4% above March 2017 ERV
-- 21 rent reviews securing GBP8.7 million, 42.9% ahead of
passing rent, 8.7% ahead of ERV at the review date
-- GBP3.1 million reversion captured since March 2017; further
reversionary potential of 17.0% (GBP20.2 million)
-- Rent roll up 8.8%/18.7% over 6/12 months to GBP119.2 million;
total potential future rent roll growth of 50%
-- Vacancy rate reduced to 5.4%, average office rent GBP52.80
per sq ft, 5.5 years average lease length
-- Further GBP3.2 million of lettings completed since 1 October,
market lettings 6.0% above March 2017 ERV; GBP6.9 million of
lettings currently under offer, in-line with March and Sept 2017
ERV
Profitable development completion; 3 near-term schemes, all to
benefit from Crossrail; increased flexible medium-term pipeline
-- One scheme completed (37,300 sq ft), profit on cost of 15.8%,
10.5% pre-let with good leasing interest
-- Two committed schemes (313,400 sq ft), profit on cost of 1.8%
(13.8% excluding Rathbone residential), 75.2% pre-let/pre-sold
(increasing to 87.5% including space under offer)
-- Good progress across three near-term schemes (414,000 sq ft),
including recently acquired Cityside House, E1 and new-build
planning application submitted at Oxford House, W1; all with
potential starts in 2018
-- Potential capital expenditure to come across committed and
near-term schemes of GBP248 million
-- Flexible medium-term development pipeline increased to 13
schemes, expected 35% area increase on existing 1.0 million sq ft,
current 4.6% net initial yield, 3.8 years average lease length,
18.7% reversionary(1)
One acquisition in H1; likely net seller in H2
-- Purchase of freehold of Cityside and Challenger House, E1 for
GBP49.6 million, or GBP320 per sq ft
-- GBP196 million of pre-sale proceeds to come on handover of
residential at Rathbone Square, W1 in early 2018
-- Further c.GBP400 million in the market to sell
Strong financial position; low LTV and significant liquidity
-- Pro forma(4) loan-to-value of 15.4% (31 March 2017: 18.3%),
weighted average interest rate of 2.7%, weighted average debt
maturity of 5.7 years, pro forma(4) liquidity of GBP497 million
(1) All values include share of joint ventures unless otherwise
stated (2) On a like-for-like basis (3) In accordance with EPRA
guidance (4) See our Financial Results EPRA and adjusted metrics:
we prepare our financial statements using IFRS, however we also use
a number of adjusted measures in assessing and managing the
performance of the business. These include measures defined by
EPRA, which are designed to enhance transparency and comparability
across the European real estate sector, see note 8 to the financial
statements. For a definition of pro forma debt metrics see Appendix
3.
Toby Courtauld, Chief Executive, said:
"We are pleased to report a good set of results with all our key
financial performance measures moving in the right direction and
our balance sheet as strong as ever. Another successful leasing
performance has driven voids lower and rent roll to a new record
whilst a busy period of portfolio activity has delivered increases
in both rental and capital values. As a result, we have raised the
interim dividend by 8.1% and increased our rental guidance for the
financial year.
Today, in spite of the macro-economic and political
uncertainties, tenant interest remains healthy across our portfolio
with GBP6.9 million of lettings currently under offer. Moreover,
activity and pricing in central London's commercial property market
remains robust for prime assets, offering potential opportunities
for us to crystallise further surpluses through sales in the near
term. Although we can expect some weakness in market rents and
secondary yields during this period of uncertainty, demographic
growth and the broad spread and depth of the capital's economic
activity will help to cement its position as one of only a handful
of truly global cities and Europe's business capital, generating
demand for our brand of well designed, centrally located, high
quality space. Additionally, we can look forward to Crossrail,
Europe's largest infrastructure project, near to which 86% of our
portfolio sits, opening in late 2018.
With a clear and focussed strategy, we look to our future with
confidence; after more than four years of net sales, we have the
financial strength to exploit any future market weakness; our
investment portfolio is let off low average rents with plenty of
near-term reversion to capture; our future development
opportunities, covering 40% of our portfolio, are stronger than
ever, including three potential starts in 2018; and, our first
class, strengthened team is ready to capitalise on this period of
uncertainty."
Contacts:
Great Portland Estates plc +44 (0) 20 7647 3000
Toby Courtauld, Chief Executive
Nick Sanderson, Finance Director
Finsbury Group +44 (0) 20 7251 3801
James Murgatroyd
Gordon Simpson
The results presentation will
be broadcast live at 9.00am today
on:
www.gpe.co.uk/investors/latest-results
A conference call facility will be available to listen to the
presentation at 9.00am today on the following numbers:
UK: 0808 109 0700 (freephone)
International: +44 (0) 20 3003 2666
Disclaimer
This announcement contains certain forward-looking statements.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances.
Actual outcomes and results may differ materially from any outcomes
or results expressed or implied by such forward-looking
statements.
Any forward-looking statements made by or on behalf of Great
Portland Estates plc ("GPE") speak only as of the date they are
made and no representation or warranty is given in relation to
them, including as to their completeness or accuracy or the basis
on which they were prepared. GPE does not undertake to update
forward-looking statements to reflect any changes in GPE's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
Information contained in this announcement relating to the
Company or its share price, or the yield on its shares, should not
be relied upon as an indicator of future performance.
To view the accompanying graphics please paste the below into
your web browser
http://www.rns-pdf.londonstockexchange.com/rns/5097W_1-2017-11-14.pdf
Half Year Results
Our market
Introduction
Central London's commercial property markets have to date proven
resilient in spite of the uncertain political and economic
background. Business confidence surveys have recovered from
immediate post-EU referendum lows and have stabilised in positive
territory, although they remain subdued. Forecast levels of GDP
continue to show modest levels of growth. However, there are clear
signs of slowing consumer confidence, in part due to increased
inflationary pressures and the recent increase in UK base interest
rates. Furthermore, levels of political risk continue to be
heightened following the summer's snap general election and we can
expect confidence to remain low whilst the shape of our future
trading arrangements with the EU remain unclear.
Against this unsettled backdrop, activity in London's commercial
property markets was maintained over the last six months with
healthy transaction levels in both the occupational and investment
markets, supporting property valuations. In the near term, we
expect the uncertain economic and political environment to weigh on
rental levels and yields for secondary properties. However, we
remain positive on the long-term prospects for London as a truly
global city offering significant attractions for a diverse range of
businesses and investors.
Lower but stable economic growth
UK GDP forecasts have decreased very marginally over the period
with Oxford Economics forecasting annual GDP growth over the next
three years of 1.5%, down from 1.6% in March. However, London is
expected to continue to outperform the wider UK economy with annual
GDP growth of 1.8% forecast over the next three years. Moreover,
the most recent Deloitte UK CFO survey undertaken in September
showed a small bounce in business confidence following the
post-election drop over the summer, although the proportion of CFOs
who think now is a good time to take risk onto their balance sheet
still remains well below the long-term average.
Despite the lower economic growth outlook, London's population
is forecast to continue growing and Oxford Economics forecast the
creation of 115,000 new office-based jobs in inner London over the
next five years (down from 129,000 at May 2017). Together, we
expect lower levels of growth, combined with some businesses
deferring investment decisions in the more uncertain environment,
to have an adverse impact on our occupational markets, although
relatively low vacancy rates and the limited supply of new space
should provide some near-term mitigation.
The attractions of investing in central London real estate,
particularly to the overseas buyer, remain intact with transaction
volumes of GBP4.8 billion in the quarter to 30 September 2017, the
second highest quarterly level for two years. Investor demand has
largely been focussed at the prime end of the market, with strong
liquidity particularly in large lot size City office properties.
With the level of equity capital looking to invest in London
remaining near record highs, prime office yields were unchanged
over the period.
Occupational markets resilient
Over the six months to 30 September 2017, central London office
take-up was 6.6 million sq ft, an increase of 4.7% on the preceding
six months and 8.7% above the ten-year average of 6.1 million sq
ft. Central London availability marginally reduced over the six
months to 14.3 million sq ft at 30 September, down 0.4 million sq
ft and below the ten-year average of 14.7 million sq ft. This has
helped broadly maintain rental values and pre-letting activity
across our markets. However, tenant incentives (including rent
frees) have continued to rise, increasing by around one to two
months over the period, and larger leasing transactions are
typically taking longer to close.
In the central London office market as a whole, development
completions in the six months to 30 September 2017 were 2.2 million
sq ft, with an overall vacancy rate of 4.6%. However, in the core
of the West End, the focus of our development activities,
completions totalled only 42,000 sq ft in the six month period.
This supply shortage has meant that occupiers have sought to secure
space well in advance, with 45% of the 12.9 million sq ft of space
under construction already pre-let or under offer. Looking ahead,
the speculative development pipeline continues to moderate. In
central London, we estimate that 10.6 million sq ft of new
speculative space could be delivered over the five years to
December 2021 of which only 1.7 million sq ft is in the West End
core, equating to only 0.3 million sq ft per annum.
West End occupational market
Over the six months to 30 September 2017, West End office
take-up was 2.7 million sq ft, up 30.0% on the preceding six months
with current availability of 4.1 million sq ft, 0.8 million sq ft
below the ten-year average. Vacancy rates remain low at 3.7% at
September 2017, with grade A vacancy estimated by CBRE to be only
2.8%. Despite the relatively robust leasing market, CBRE reported
that prime office rental values reduced by GBP5 per sq ft to GBP105
per sq ft over the last six months with rent frees increasing on
average by around one month to 22-24 months on a ten year
lease.
Whilst UK retail sales have come under pressure given the
squeeze on consumer income, the West End retail market (where 30.5%
of our West End portfolio by value is located) has continued to
demonstrate relative strength. Over the six months, demand for
well-configured units on London's prime retail streets remained
healthy, with flagship stores an important part of an omni-channel
offer. As a result, vacancy on Oxford Street, Regent Street and
Bond Street remains low at c.4% with prime Zone A rents on Oxford
Street and Bond Street stable at GBP1,000 per sq ft and GBP2,225
per sq ft respectively.
City, Midtown and Southbank occupational markets
Over the six months to 30 September 2017, the City leasing
market has been trending in line with the ten-year average, with
City office take-up at 2.5 million sq ft and availability
increasing to 6.3 million sq ft. At 30 September, the amount of
space under offer was 1.4 million sq ft, 21% above the 10-year
average, suggesting a strong final leasing quarter for 2018.
However, the City vacancy rate increased to 5.9% with grade A
vacancy estimated by CBRE to be 4.1%, up from 3.9% at March. CBRE
also reported that City prime rental values reduced marginally over
the period to GBP69.50 per sq ft, from GBP70 per sq ft in March,
whilst the rent free period on a ten-year lease increased by six
weeks to 24 months.
Take up in Midtown and Southbank was strong, up 45.1% on the
preceding six months at 1.3 million sq ft. CBRE reported that this
strength, combined with a lack of new space, resulted in prime
office rental values increasing to GBP80 and GBP65 per sq ft
respectively. Rent frees remained largely unchanged at 22-24 months
on average on a ten-year lease.
Investment market activity robust driven by overseas
purchasers
The pickup in the investment market activity witnessed in the
first quarter of 2017 has been maintained. The six months to
September 2017 saw GBP7.9 billion of transactions, including a
number of high profile, large scale purchases in the City. Interest
from overseas investors continues to dominate, accounting for 83%
of transactions over the last six months (and 94% over the last
three months), as the low value of Sterling and London's safe haven
status continued to attract international buyers, particularly from
Asia and the Middle East.
We reported in May 2017 that we estimated GBP39.5 billion of
equity capital was seeking to invest in commercial property across
central London compared to only GBP5.3 billion of stock on the
market available to buy. Today we estimate that there is currently
GBP11.1 billion of stock on the market available to buy, whilst the
weight of money seeking to invest remains high at GBP39.0 billion.
With levels of equity demand at elevated levels and debt
availability still good for prime quality assets and sponsors,
investment yields for office properties remain unchanged. At 30
September 2017, prime yields were 3.75% and 4.00% in the West End
and City respectively, according to CBRE.
Poor visibility on market outlook
Given the cyclical nature of our markets, we actively monitor
numerous lead indicators to help identify key trends in our
marketplace. Over the last six months, our property capital value
indicators are largely unchanged and continue to provide limited
market visibility. Investment activity in the central London
commercial property market is healthy and the real yield spread
over gilt yields remains supportive, however, we expect yields to
increase for higher risk, more secondary properties. Furthermore,
given lower forecast rates of economic growth and tempered business
confidence, we do not expect significant rental value movements in
the very near-term and we have upgraded our rental value growth
range for the financial year to 31 March 2018 to +1.5% to minus
2.5% (see Asset Management below).
Our business
Our business is accompanied by graphics (see Appendix 1)
Development management
Since the start of the financial year, we have successfully
completed one scheme and our two on-site committed schemes at
Rathbone Square, W1 and 160 Old Street, EC1 (together 313,400 sq
ft) are significantly de-risked (75.2% pre-sold or pre-let,
increasing to 87.5% including space under offer) and on track for
completion by the end of April 2018.
Looking forward, the Group's pipeline of future developments
remains substantial, representing 40% of the Group's existing
portfolio and providing development opportunities stretching into
the 2020s. With the acquisition of Cityside House, E1, we have
added to the near-term pipeline and now have three schemes that
could start in the next nine months (totalling 414,000 sq ft), all
of which are set to benefit from the opening of Crossrail in
December 2018.
One development profitably completed
In November, we successfully completed 55 Wells Street, W1,
delivering 37,300 sq ft of well-specified office and restaurant
space in an attractive Fitzrovia location. We pre-let the 4,500 sq
ft restaurant unit to Ottolenghi in June and early interest is
encouraging in the 32,800 sq ft of Grade A office space which we
expect to let on a floor-by-floor basis. The ERV of the office
space was GBP2.6 million at 30 September 2017 and the scheme profit
on cost was 15.8%.
Two committed schemes, substantially de-risked
At Rathbone Square, W1, having profitably forward sold the
commercial element in February 2017, we settled the overage due to
the Royal Mail Group over the summer and more recently handed over
the completed garden square to Deka. Looking forward, we expect to
achieve practical completion of the 142 private residential units
by the end of November and we will commence handing over the 140
pre-sold apartments to the buyers early in the New Year, with the
remaining 75% of the sale proceeds (approximately GBP196 million)
expected to be collected by the end of the financial year. Whilst
the entire Rathbone Square scheme in total delivered a whole life
profit on cost in excess of 20%, the residential element is
expected to deliver a small loss on cost of 1%.
At 160 Old Street, EC1, owned in our 50:50 joint venture with
the BP Pension Fund, the construction works are progressing well
and we are targeting completion of the 161,700 sq ft of high
quality office, retail and restaurant space in April 2018. We have
57% of the building under offer (all office) and leasing interest
in the remaining office space and retail units is strong. The
scheme is expected to deliver a profit on cost of 14%.
At 30 September 2017, the three committed development schemes at
that date (including 55 Wells Street, W1) were valued at GBP381.6
million (our share), with capital expenditure to come of GBP15.0
million on the two remaining committed schemes.
Three near-term schemes, all to benefit from Crossrail and with
potential starts over next nine months
During the period, we have added to our near-term development
pipeline which now comprises three schemes (414,000 sq ft), all
with potential project starts over the next nine months.
Cityside House, E1 was acquired in June 2017 with an existing
planning consent to add a further three floors to the building,
increasing the net internal area by 22,200 sq ft to 76,500 sq ft.
In addition, the site encompasses freehold land to the rear, part
of which has a planning consent for 19,000 sq ft of development,
comprising hotel and residential uses. Since acquisition, strip out
and demolition works have commenced and we are actively seeking to
improve both planning consents to enhance the quality of the space
we can deliver on the site, with the expectation of commencing the
redevelopment of the currently vacant Cityside House early in 2018.
We will be targeting average office rents across the building of
around GBP49 per sq ft, with delivery expected in 2019 following
the opening of Whitechapel Crossrail station.
At Oxford House, 76 Oxford Street, W1, we have now submitted a
planning application for a new build scheme to improve upon both
the scale and quality of the building that could be delivered under
our existing consent for a refurbishment. Our proposed new build
scheme of around 116,500 sq ft comprises 78,100 sq ft of offices
and 38,400 sq ft of retail, with the large modern retail units
targeted to meet the strong occupier demand at the eastern end of
Oxford Street given the opening of Crossrail in 2018. Subject to
planning and neighbourly matters, we could commence on site in the
first half of 2018 on exercise of our lease break options with the
existing occupiers.
At Hanover Square, W1, we signed a phased access agreement with
Crossrail in June to allow us to access the site to undertake
further enabling works. The agreement also gives us the ability,
should the market be supportive, to accelerate the construction
programme such that we could commence the New Bond Street building
in the first half of 2018, with the larger over station development
following later in the year. Although we have not commenced
marketing, we are encouraged by the occupier enquiries that we are
already receiving for the office space (totalling 167,200 sq ft),
the earliest possible delivery date for which is 2020. The
development is owned by the GHS Partnership.
At 30 September 2017, the three near-term development properties
were valued at GBP277.7 million (our share) and would require
GBP233.3 million of capital expenditure to complete.
Substantial medium-term development pipeline
Beyond our near-term schemes, GPE's well-stocked development
pipeline for the next cycle includes a further 13 uncommitted
projects (1.3 million sq ft). These schemes include a number of
exciting projects, including New City Court, SE1, in the London
Bridge Quarter, where we hope to materially increase the size of
the existing 97,800 sq ft building, and Mount Royal, W1, located at
the western end of Oxford Street, where we are drawing up early
plans to redevelop this two-acre site into a retail-led development
scheme. All but one are income producing today, with an average
lease length of 3.8 years, and they will provide the bedrock of our
development activities for the next cycle.
Asset management
During the period, we have maintained our high level of leasing
activity, both capturing significant reversion across the portfolio
and leasing up our limited available space, together driving the
Group's rent roll to record levels. Key highlights include:
-- 37 new leases were signed during the first half (2016: 21
leases), generating annual rent of GBP11.3 million (our share:
GBP9.8 million; 2016: GBP9.4 million), with market lettings 2.4%
above March 2017 ERVs;
-- 21 rent reviews securing GBP8.7 million (our share: GBP7.9
million; 2016: GBP3.3 million) of rent were settled during the half
year, representing an annualised increase of GBP2.6 million per
annum, or 42.9% above the previous passing rent and 8.7% above the
ERV at the review date;
-- total space covered by new lettings, reviews and renewals
during the first half was 310,200 sq ft (2016: 207,300 sq ft);
-- GBP3.1 million reversion captured (our share) in the six
months to 30 September 2017, with a further reversionary potential
of GBP20.2 million (17.0%) of which 67% is available in the next 18
months;
-- 91% (by area) of the 48 leases with breaks or expiries in the
twelve months to 30 September 2017 were retained, re-let, under
offer or under refurbishment, leaving only 9% still to transact;
and
-- Group rent roll has increased by 8.8% since 31 March 2017 and
18.7% over the last twelve months to GBP119.2 million (2016:
GBP100.4 million).
Key leasing transactions
The increased rent roll over the period was driven by a number
of notable transactions, including:
-- at our completed development, 84/86 Great Portland Street,
W1, we let the entirety of the 18,000 sq ft self-contained office
space to a not-for-profit organisation at an annual rent of GBP1.2
million on a ten-year term (no breaks), 5.5% ahead of the March
2017 ERV;
-- at 200 Gray's Inn Road, WC1, where our refurbishment works on
the ground and first floor continue, we let part of the 5th floor
and 7th floor (23,400 sq ft) to Carlton Communications for a
combined annual rent of GBP1.4 million (our share GBP0.7 million),
in line with March 2017 ERV;
-- at 24/25 Britton Street, WC1, we settled a rent review with
Kurt Geiger, capturing significant reversion, increasing the annual
rent by GBP1.0 million to GBP2.5 million, an increase of 64% on the
previous rent and 2.4% above ERV;
-- at New City Court, SE1, we settled a rent review with
Sinclair Knight Merz (Europe) Limited on the 3rd and 4th floors,
increasing the combined annual rent by GBP0.5 million to GBP1.6
million, an increase of 59% on the previous passing rent and 8.6%
above ERV at the review date; and
-- at 30 Broadwick Street, W1, we let the first floor (14,600 sq
ft) to BCG Digital Ventures (part of the Boston Consulting Group)
who expanded their presence having secured the second floor in
November 2016. The building is now 85% let with only one office
floor remaining.
Lower vacancy rate
Overall, these asset management successes have helped reduce the
Group's vacancy rate to 5.4% at 30 September 2017 (31 March 2017:
6.8%). At 30 September 2017, the average rent across our office
portfolio was GBP52.80 per sq ft, up from GBP46.20 per sq ft at 30
September 2016.
The table below summarises our leasing transactions in the
period:
Leasing Transactions Three months Six months Six months
ended 30 ended 30 ended 30
September September September
2017 2017 2016
--------------------------- ------------- ----------- -----------
New leases and renewals
completed
Number 17 37 21
GPE share of rent GBP4.6 GBP9.8 GBP9.4
p.a. million million million
Area (sq ft) 75,500 170,100 147,100
Rent per sq ft (including GBP71 GBP67 GBP67
retail)
Rent reviews settled
Number 11 21 10
GPE share of rent GBP4.1 GBP7.9 GBP3.3
p.a. million million million
Area (sq ft) 72,100 140,100 60,200
Rent per sq ft (including GBP67 GBP62 GBP86
retail)
---------------------------- ------------- ----------- -----------
Note: Includes joint ventures at share
Good start to the second half of the year
Since 30 September 2017, our leasing momentum has been
maintained:
-- We have completed 10 new leases generating GBP3.2 million
(our share: GBP2.8 million) of annual rent (76,500 sq ft), with
market lettings 6.0% ahead of March 2017 ERV; and
-- a further 130,650 sq ft of space is currently under offer
which would deliver approximately GBP6.9 million p.a. in rent (our
share: GBP4.4 million), market lettings in line with September 2017
ERVs.
Upgraded rental value guidance
Given our leasing successes over the period, and the resilience
of the Group's ERVs, we now estimate that rental values across our
office and retail portfolio will grow between +1.5% to minus 2.5%
for the year ending 31 March 2018 (previously 0% to minus
7.5%).
Investment management
The weight of international capital looking to invest in London
has remained at elevated levels during the first half of the
financial year, supporting asset values across the capital.
Moreover, we are yet to see many vendors become more realistic on
pricing, particularly for riskier assets. As a result, attractive
acquisition opportunities have been limited with one purchase by
the Group during the period.
One acquisition in first half of the year, adding to the
near-term development pipeline
In June 2017, we acquired the freehold of land and buildings
including Cityside House and Challenger House, 40/42 Adler Street
and 2/8 Whitechapel Road, London E1 from Hermes Investment
Management for GBP49.6 million, or GBP320 per sq ft on the
consented space. The 1.1 acre site sits between Aldgate East
underground station to the west and Whitechapel station to the east
and consists of:
-- Challenger House - a freehold interest in a five-storey
hotel, leased to Qbic Hotels for a further 21 years at a rent of
GBP1.4 million p.a., with CPI linked five yearly reviews, capped
and collared at 2% - 4% p.a.. The hotel trades from 171 bedrooms
with a public restaurant;
-- Cityside House - a freehold interest in a five-storey, 54,300
sq ft office building. The property is currently unoccupied and has
planning consent for an additional three floors; and
-- Development sites - freehold land to the rear of Cityside
House, part of which has a planning consent for 19,000 sq ft of
development, comprising hotel and residential uses.
This acquisition represents an exciting opportunity to augment
our near-term development programme with a well-designed, cost
effective and prominent office building in the heart of
Whitechapel, supported by a long-term income stream from Qbic
Hotels, and further development sites. In addition, Whitechapel is
set to benefit from significant further regeneration, including its
new Crossrail station opening in late 2018.
In the period, we also enhanced our ownership at City Tower, 40
Basinghall Street, EC2 by extending our leasehold interest to 125
years.
GBP10.1 million of disposals, 6% premium to book value
During the period, we continued to take advantage of supportive
market conditions with a number of smaller asset sales. In June
2017, we sold 48 Broadwick Street, W1, a small residential building
in Soho for GBP4.3 million, equating to GBP1,463 per sq ft and in
September 2017 we sold 42/44 Mortimer Street, W1 for GBP4.8
million, reflecting a net initial yield to the buyer of 3.85%.
We also disposed of the final residual buildings in the Great
Wigmore Partnership, our joint venture with Aberdeen Asset
Management, for a combined price of GBP2.0 million (our share:
GBP1.0 million), bringing a successful conclusion to the
Partnership's activities.
Likely net seller in second half of the year
With investment pricing remaining strong and prime yields
trending flat, we will continue to explore opportunities to
crystallise further surpluses from the 19% of the portfolio that
comprises long-let, well-located prime assets which continue to see
demand from international capital. As a result, we currently have
around GBP400 million of property in the market to sell and expect
to be a net seller over the remainder of the financial year,
particularly when also factoring in the expected completion of the
residential sales at Rathbone Square, W1, where 140 of the private
units are already pre-sold.
Valuation
Valuation is accompanied by graphics (see Appendix 2)
The valuation of the Group's properties was GBP3,277.8 million
as at 30 September 2017, reflecting a valuation increase of 1.0% on
a like-for-like basis since 31 March 2017. At 30 September 2017,
the wholly-owned portfolio was valued at GBP2,682.9 million and the
Group had three active joint ventures which owned properties valued
at GBP594.9 million (our share) by CBRE.
The key drivers behind the Group's valuation movement for the
six-month period were:
-- yield contraction - equivalent yields reduced by 4 basis
points over the period. At 30 September 2017, the portfolio true
equivalent yield was 4.5%;
-- rental value increase - since the start of the financial
year, rental values have increased by 0.7%, with office and retail
rental values rising by 0.5% and 1.7% respectively. At 30 September
2017, the portfolio was 17.0% reversionary;
-- intensive asset management - during the period, 58 new
leases, rent reviews and renewals were completed, securing GBP17.7
million (our share) of annual income which helped to support the
valuation over the period; and
-- development and trading properties - the valuation of current
development and trading properties increased by 1.6% to GBP381.6
million.
Including rent from pre-lets and leases currently in rent free
periods, the adjusted initial yield of the investment portfolio at
30 September 2017 was 3.8%, 30 basis points higher than at the
start of the financial year.
Our West End investment portfolio produced the most robust
performance by geographic sector over the period, increasing in
value by 1.0% on a like-for-like basis, in part driven by our
leasing activity as set out above. Our City, Midtown and Southbank
properties increased by 0.9%. Our joint venture properties
increased in value by 1.7% over the period while the wholly-owned
portfolio increased by 0.9% on a like-for-like basis.
The Group delivered a total property return (TPR) for the six
months to 30 September 2017 of 2.4% (2016: -2.2%), compared to the
Central London IPD quarterly benchmark of 4.5%, and a capital
return of 1.0% (versus 2.9% for IPD).
Our financial results
Our financial results are accompanied by graphics, see Appendix
3, and details on our approach to risk are set out in Appendix
1
We calculate adjusted net assets and earnings per share in
accordance with the Best Practice Recommendations issued by the
European Public Real Estate Association (EPRA). The recommendations
are designed to make the financial statements of public real estate
companies clearer and more comparable across Europe enhancing the
transparency and coherence of the sector. We consider these
standard metrics to be the most appropriate method of reporting the
value and performance of the business and a reconciliation to the
IFRS numbers is included in note 8 to the accounts.
EPRA NAV growth of 1.8%
EPRA net assets per share (NAV) at 30 September 2017 was 813
pence per share, an increase of 1.8% over the last six months,
largely due to the 1.0% like-for-like increase in value of the
property portfolio. The main drivers of the 14 pence per share
increase in NAV from 31 March 2017 were:
-- the increase of 8 pence per share arising from the
revaluation of the property portfolio. Of this amount, development
and trading properties increased NAV by around 2 pence;
-- EPRA earnings for the period of 10 pence per share enhanced NAV;
-- the prepayment of US private placement notes reduced NAV by 4 pence per share;
-- the final dividend of 6 pence per share reduced NAV;
-- the special dividend of 32.15 pence per share and the
associated 19 for 20 share consolidation increased NAV by 8 pence
per share; and
-- other movements reduced NAV by 2 pence per share.
EPRA NAV growth of 1.8%, combined with the payment of last
year's final dividend of 6.4 pence per share, delivered a total
accounting return for the six months to 30 September 2017 of
2.6%.
At 30 September 2017, the Group's net assets were GBP2,634.8
million, down from GBP2,738.4 million at 31 March 2017, with the
reduction largely attributable to the special dividend (totalling
GBP110 million) paid during the period. EPRA triple net assets per
share (NNNAV) was 804 pence at 30 September 2017 compared to 782
pence at 31 March 2017 (up 2.8%). At the period end, the difference
between NAV and NNNAV was the net impact of the mark to market of
debt of 9 pence per share, mainly arising from the Group's 2029
debenture (coupon of 5.63%). There was a GBP2.5 million increase in
deferred tax assets during the period.
EPRA earnings growth of 11.7%
EPRA earnings were GBP31.6 million, 11.7% higher than for the
same period last year, predominantly due to our leasing activities
driving rental income growth.
Rental income from wholly-owned properties was GBP44.7 million,
up GBP6.4 million or 16.7% on last year, principally as a result of
new lettings at recently completed developments, including 30
Broadwick Street, W1, and the successful settlement of a large
number of rent reviews capturing significant reversionary
potential. Joint venture fees were GBP1.1 million, down GBP0.5
million on last year due to lower levels of transaction activity in
the joint ventures. Taken together, rental income from wholly-owned
properties and joint venture fees totalled GBP45.8 million, up
14.8% on the prior period. Adjusting for acquisitions, disposals
and transfers to and from the development programme, like-for-like
rental income (including from joint venture properties) increased
5.7% on the prior period.
Property expenses increased by GBP0.5 million to GBP3.7 million,
principally due to increased costs associated with our leasing
initiatives and higher service charge costs. Administration costs
were GBP11.9 million, an increase of GBP1.4 million, primarily as a
result of higher provisions for performance related pay (including
share incentive plans) and lower capitalised employee costs
reflecting the reduced number of committed developments.
EPRA pro ts from joint ventures (excluding fair value movements)
were GBP1.0 million, down from GBP1.2 million last year
predominantly due to reduced sales activity in the joint
ventures.
Gross interest paid on our debt facilities was GBP4.8 million
lower than the prior period. The reduction in interest paid was
predominantly due to the redemption of GBP287.5 million of US
private placement notes paying a blended coupon of 5.0%, offset by
the new issue in May 2017 of GBP175 million seven-year US private
placement notes with a fixed rate coupon of only 2.15%.
We capitalised interest of GBP4.5 million (2016: GBP10.4
million) during the period, a GBP5.9 million reduction on the prior
year reflecting our reduced development exposure as we have
completed or forward sold major development schemes. As a result,
the Group had underlying net nance income (including interest
receivable on joint ventures balances) of GBP0.7 million (2016:
GBP0.9 million income).
Revaluation gains together with increased underlying earnings
resulted in an accounting profit after tax of GBP25.3 million
(2016: loss of GBP62.8 million). The basic earnings per share for
the period was 7.7 pence, compared to an 18.4 pence loss for 2016.
The diluted earnings per share for the period was 5.7 pence
compared to 19.9 pence per share loss for 2016. Diluted EPRA
earnings per share was 9.6 pence (2016: 8.3 pence), an increase of
15.7%, and cash earnings per share was 7.2 pence (2016: 4.6
pence)
Results of joint ventures
The Group's net investment in joint ventures was GBP508.0
million, an increase from GBP480.8 million at 31 March 2017,
largely due to the increase in value of the property portfolio and
an increase in partner loan contributions to fund development
expenditure. Our share of joint venture net rental income was
GBP8.6 million, down GBP0.3 million on last year as a result of
property sales offset by positive asset management activity. The
underlying joint venture pro ts are stated after charging GBP1.1
million of GPE management fees (2016: GBP1.6 million).
Overall, our three active joint ventures represent an important
proportion of the Group's business. At 30 September 2017, joint
ventures made up 18.2% of the portfolio valuation, 19.3% of net
assets and 16.5% of rent roll (31 March 2017: 18.0%, 17.5% and
16.8% respectively).
Strong financial position
Group consolidated net debt was GBP514.6 million at 30 September
2017, up from GBP502.8 million at 31 March 2017 (30 September 2016:
GBP738.5 million). The increase was due to the payment of the
special dividend, development capital expenditure and the
acquisition of Cityside House and Challenger House more than
offsetting receipts (including deferred receipts) from property
sales. Group gearing increased to 19.5% at 30 September 2017 (31
March 2017: 18.4%) due to higher levels of on-balance sheet debt
more than offsetting the increase in the portfolio value. Including
the non-recourse debt in the joint ventures, total net debt was
GBP587.0 million (31 March 2017: GBP576.8 million) equivalent to a
loan to property value of 17.9% (31 March 2017: 18.3%). The
proportion of the Group's total net debt represented by our share
of joint venture net debt was 12.3% at 30 September 2017. At 30
September 2017, the Group, including our share of joint ventures,
had cash and undrawn committed credit facilities of GBP415
million.
Pro forma for the receipt of remaining deferred consideration
(GBP82.3 million) on property sales (including the commercial
element of Rathbone Square, W1 and 73/89 Oxford Street, both W1),
the Group's loan to property value is 15.4%, with cash and undrawn
facilities rising to GBP497 million.
The Group's weighted average cost of debt, including fees and
joint venture debt, for the period was 3.3%, 70 basis points lower
than at 31 March 2017 due to the repayment and new issue of private
placement notes at a lower coupon rate as mentioned above. The
weighted average interest rate (excluding fees) at the period end
was 2.7% (31 March 2017: 3.0%). At 30 September 2017, 59% of the
Group's total drawn debt (including non-recourse joint venture
debt) was provided on an unsecured basis (31 March 2017: 63%) and
92% was from non-bank sources (31 March 2017: 75%).
At 30 September 2017, 90% of the Group's total drawn debt
(including non-recourse joint ventures) was at fixed or hedged
rates (31 March 2017: 82%). Due to the treatment of capitalised
interest under our Group covenants, there is no net interest charge
in the period applicable for the purposes of calculating our net
interest cover ratio (31 March 2017: n/a). Without the benefit of
interest capitalised, net interest cover over the last twelve
months would be very healthy at more than five times. Our weighted
average drawn debt maturity was 5.7 years at 30 September 2017 (31
March 2017: 5.1 years).
100% rent collection and robust tenant base
The quarterly cash collection performance has continued to be
very strong throughout 2017. We secured a record 100.0% of rent due
within seven working days following the September quarter day,
improving on the March (99.4%) and June (99.8%) quarters earlier
this year. Tenants on monthly payment terms represent around 3.1%
of our rent roll (30 September 2016: 3.6%). We had two small tenant
delinquencies in the first half of the six month period (0.1% of
rent roll); and we remain vigilant regularly monitoring the
financial position of our tenants. In addition, we have further
protection from any tenant defaults with GBP34.2 million of rent
deposits and bank guarantees, representing around 29% of rent
roll.
Taxation
The tax credit in the income statement for the half year was
GBP2.5 million (2016: GBP0.1 million charge) and comprises solely
deferred tax (principally in respect of revenue losses). The
underlying effective tax rate was 0% (2016: 0%) as a result of the
tax free nature of much of the Group's income, and other allowances
being available to set against non-REIT profits.
In general, as a REIT, the Group is broadly exempt from
corporation tax in respect of its rental profits and chargeable
gains relating to its property rental business but is otherwise
subject to corporation tax. In particular, the Group is subject to
corporation tax in respect of (i) any profits arising on the sale
of trading properties and (ii) any gains arising on the sale of
development properties which are sold within three years of
completion of the development.
Dividend growth and share consolidation
Following receipt of the majority of the sales proceeds from the
disposal of Rathbone Square, W1, the whole life surplus from the
development of approximately GBP110.0 million was returned to
shareholders by way of a special dividend on 30 May 2017. The
special dividend was accompanied by a 19 for 20 share consolidation
of the Company's ordinary share capital. This special dividend
along with the final dividend from the year ended 31 March 2017,
together totalling GBP130.8 million, are included within the Group
Statement of Changes in Equity for the period.
The Board has declared an interim ordinary dividend of 4.0 pence
per share (2016: 3.7 pence) which will be paid on 2 January 2018.
All of this dividend will be a REIT Property Income Distribution
(PID) in respect of the Group's tax-exempt property rental
business.
Condensed group income statement
For the six months ended 30 September 2017
Six Six
Year months months
to to to
31 30 30
March September September
2017 2017 2016
Audited Unaudited Unaudited
GBPm Notes GBPm GBPm
------------ ----------------------------------------- ----- ---------- ----------
121.9 Total revenue 2 65.4 57.4
------------ ----------------------------------------- ----- ---------- ----------
80.2 Net rental income 3 44.7 38.3
4.1 Joint venture fee income 11 1.1 1.6
------------ ----------------------------------------- ----- ---------- ----------
Rental and joint venture fee
84.3 income 45.8 39.9
(7.3) Property expenses 4 (3.7) (3.2)
77.0 Net rental and related income 42.1 36.7
(20.1) Administrative expenses (11.9) (10.5)
------------ ---------- ----------
25.2 Development management revenue 12.6 10.5
(25.2) Development management costs (12.9) (10.5)
------------ ---------- ----------
- (0.3) -
Trading property - cost of
(0.3) sales (0.1) (0.3)
------------ ---------- ----------
Operating profit before surplus/(deficit)
on investment property and
56.6 results of joint ventures 29.8 25.9
Surplus/(deficit) from investment
(136.9) property 9 16.9 (90.3)
(57.2) Share of results of joint ventures 11 11.2 (37.9)
(137.5) Operating profit/(loss) 57.9 (102.3)
9.0 Finance income 5 5.2 4.3
(9.2) Finance costs 6 (4.5) (3.4)
Premium paid on cancellation
(51.5) of private placement notes 15 (36.6) -
Fair value movement on convertible
10.1 bond 6.2 10.3
38.9 Fair value movement on derivatives (5.4) 28.4
(140.2) Profit/(loss) before tax 22.8 (62.7)
0.8 Tax 7 2.5 (0.1)
------------ ----------------------------------------- ----- ---------- ----------
(139.4) Profit/(loss) for the period 25.3 (62.8)
------------ ----------------------------------------- ----- ---------- ----------
All results are derived from continuing
operations in the United Kingdom.
(40.8)p Basic earnings/(loss) per share 8 7.7p (18.4)p
------------ ----------------------------------------- ----- ---------- ----------
Diluted earnings/(loss) per
(40.8)p share 8 5.7p (19.9)p
------------ ----------------------------------------- ----- ---------- ----------
17.3p EPRA EPS 8 9.6p 8.3p
------------ ----------------------------------------- ----- ---------- ----------
17.3p Diluted EPRA EPS 8 9.6p 8.3p
------------ ----------------------------------------- ----- ---------- ----------
Condensed group statement of comprehensive income
For the six months ended 30 September 2017
Six
Year months
ended to Six months
31 30 to
March September 30 September
2017 2017 2016
Audited Unaudited Unaudited
GBPm GBPm GBPm
-------- ------------------------------------ ---------- -------------
(139.4) Profit/(loss) for the period 25.3 (62.8)
Items that will not be reclassified
subsequently to profit and loss:
Actuarial gain/(deficit) on defined
(3.6) benefit scheme 1.1 (4.8)
Total comprehensive income/(expense)
(143.0) for the period 26.4 (67.6)
-------- ------------------------------------ ---------- -------------
Condensed group balance sheet
At 30 September 2017
As at
As at As at 30
31 March 30 September September
2017 2017 2016
Audited Unaudited Unaudited
GBPm Notes GBPm GBPm
--------- ------------------------------------- ----- ------------- ----------
Non-current assets
2,351.9 Investment property 9 2,448.6 2,957.3
480.8 Investment in joint ventures 11 508.0 510.6
5.1 Plant and equipment 12 4.9 3.8
2.0 Deferred tax 7 4.5 1.2
--------- ------------------------------------- ----- ------------- ----------
2,839.8 2,966.0 3,472.9
--------- ------------------------------------- ----- ------------- ----------
Current assets
246.7 Trading property 10 262.2 232.1
351.8 Trade and other receivables 13 91.0 61.8
1.0 Corporation tax 0.6 0.9
25.5 Cash and cash equivalents 13.8 9.0
--------- ------------------------------------- ----- ------------- ----------
625.0 367.6 303.8
--------- ------------------------------------- ----- ------------- ----------
3,464.8 Total assets 3,333.6 3,776.7
--------- ------------------------------------- ----- ------------- ----------
Current liabilities
(147.0) Trade and other payables 14 (121.7) (150.1)
- Interest-bearing loans and borrowings 15 (153.2) -
--------- ------------------------------------- ----- ------------- ----------
(147.0) (274.9) (150.1)
--------- ------------------------------------- ----- ------------- ----------
Non-current liabilities
(537.7) Interest-bearing loans and borrowings 15 (378.4) (756.7)
(35.9) Obligations under finance leases (40.7) (35.9)
(5.8) Pension liability (4.8) (7.2)
--------- ------------------------------------- ----- ------------- ----------
(579.4) (423.9) (799.8)
--------- ------------------------------------- ----- ------------- ----------
(726.4) Total liabilities (698.8) (949.9)
--------- ------------------------------------- ----- ------------- ----------
2,738.4 Net assets 2,634.8 2,826.8
--------- ------------------------------------- ----- ------------- ----------
Equity
43.0 Share capital 16 43.0 43.0
352.0 Share premium account 352.0 352.0
16.4 Capital redemption reserve 16.4 16.4
2,330.8 Retained earnings 2,227.0 2,418.9
(3.8) Investment in own shares 17 (3.6) (3.5)
--------- ------------------------------------- ----- ------------- ----------
2,738.4 Total equity 2,634.8 2,826.8
--------- ------------------------------------- ----- ------------- ----------
796p Net assets per share 8 806p 822p
--------- ------------------------------------- ----- ------------- ----------
799p EPRA NAV 8 813p 813p
--------- ------------------------------------- ----- ------------- ----------
Condensed group statement of cash flows
For the six months ended 30 September 2017
Year Six months Six months
to to to
31 March 30 September 30 September
2017 2017 2016
Audited Unaudited Unaudited
GBPm Notes GBPm GBPm
--------- ---------------------------------------- ----- ------------- -------------
Operating activities
(137.5) Operating profit/(loss) 57.9 (102.3)
192.4 Adjustments for non-cash items 18 (29.6) 128.5
Deposits received on forward
8.8 sale of residential units 0.5 5.9
(75.0) Development of trading property (12.5) (49.7)
(12.7) (Increase)/decrease in receivables (5.8) 0.8
(5.4) Increase/(decrease) in payables 5.3 (4.1)
--------- ---------------------------------------- ----- ------------- -------------
Cash generated/(absorbed) by
(29.4) operations 15.8 (20.9)
(29.0) Interest paid (8.4) (13.7)
0.1 Tax received 0.4 -
Cash inflow/(outflow) from operating
(58.3) activities 7.8 (34.6)
--------- ---------------------------------------- ----- ------------- -------------
Investing activities
56.2 Distributions from joint ventures 8.4 23.6
(187.3) Purchase and development of property (107.7) (145.1)
(4.9) Purchase of plant and equipment (0.2) (3.0)
346.5 Sale of properties 243.0 26.7
(6.7) Investment in joint ventures (4.1) (4.0)
Cash inflow/(outflow) from investing
203.8 activities 139.4 (101.8)
--------- ---------------------------------------- ----- ------------- -------------
Financing activities
109.0 Revolving credit facility (repaid)/drawn (47.0) 169.0
- Issue of private placement notes 174.1 -
Redemption of private placement
(159.7) notes (127.7) -
Premium paid on redemption of
(51.5) private placement notes (36.6) -
Termination of cross currency
34.7 swaps 23.1 -
(33.6) Funds to joint ventures (15.1) (18.1)
(31.6) Equity dividends paid (129.7) (18.2)
--------- ---------------------------------------- ----- ------------- -------------
Cash (outflow)/inflow from financing
(132.7) activities (158.9) 132.7
--------- ---------------------------------------- ----- ------------- -------------
Net (decrease)/increase in cash
12.8 and cash equivalents (11.7) (3.7)
Cash and cash equivalents at
12.7 1 April 25.5 12.7
--------- ---------------------------------------- ----- ------------- -------------
Cash and cash equivalents at
25.5 balance sheet date 13.8 9.0
--------- ---------------------------------------- ----- ------------- -------------
Condensed group statement of changes in equity
For the six months ended 30 September 2017 (unaudited)
Share Capital Investment
Share premium redemption Retained in own Total
capital account reserve earnings shares equity
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------ --------- --------- ----------- --------- ------------ -------
Total equity at 1 April 2017 43.0 352.0 16.4 2,330.8 (3.8) 2,738.4
Profit for the period - - - 25.3 - 25.3
Actuarial gain on defined benefit scheme - - - 1.1 - 1.1
------------------------------------------- --------- --------- ----------- --------- ------------ -------
Total comprehensive income for the period - - - 26.4 - 26.4
------------------------------------------- --------- --------- ----------- --------- ------------ -------
Employee Long-Term Incentive Plan and
Share Matching Plan charge - - - - 0.8 0.8
Transfer to retained earnings - - - 0.6 (0.6) -
Dividends to shareholders - - - (130.8) - (130.8)
------------------------------------------- --------- --------- ----------- --------- ------------ -------
Total equity at 30 September 2017 43.0 352.0 16.4 2,227.0 (3.6) 2,634.8
------------------------------------------- --------- --------- ----------- --------- ------------ -------
Condensed group statement of changes in equity
For the six months ended 30 September 2016 (unaudited)
Share Capital Investment
Share premium redemption Retained in own Total
capital account reserve earnings shares equity
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------- --------- --------- ----------- --------- ------------ -------
Total equity at 1 April 2016 43.0 352.0 16.4 2,509.9 (9.1) 2,912.2
Loss for the period - - - (62.8) - (62.8)
Actuarial deficit on defined benefit
scheme - - - (4.8) - (4.8)
--------------------------------------- --------- --------- ----------- --------- ------------ -------
Total comprehensive expense for the
period - - - (67.6) - (67.6)
--------------------------------------- --------- --------- ----------- --------- ------------ -------
Employee Long-Term Incentive Plan and
Share Matching Plan charge - - - - 1.3 1.3
Transfer to retained earnings - - - (4.3) 4.3 -
Dividends to shareholders - - - (19.1) - (19.1)
--------------------------------------- --------- --------- ----------- --------- ------------ -------
Total equity at 30 September 2016 43.0 352.0 16.4 2,418.9 (3.5) 2,826.8
--------------------------------------- --------- --------- ----------- --------- ------------ -------
Condensed group statement of changes in equity
For the year ended 31 March 2017 (audited)
Share Capital Investment
Share premium redemption Retained in own Total
capital account reserve earnings shares equity
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------------------- --------- --------- ----------- --------- ---------- -------
Total equity at 1 April 2016 43.0 352.0 16.4 2,509.9 (9.1) 2,912.2
Loss for the year - - - (139.4) - (139.4)
Actuarial deficit on defined benefit scheme - - - (3.6) - (3.6)
-------------------------------------------- --------- --------- ----------- --------- ---------- -------
Total comprehensive expense for the year - - - (143.0) - (143.0)
-------------------------------------------- --------- --------- ----------- --------- ---------- -------
Employee Long-Term Incentive Plan and Share
Matching Plan charge - - - - 1.0 1.0
Transfer to retained earnings - - - (4.3) 4.3 -
Dividends to shareholders - - - (31.8) - (31.8)
Total equity at 31 March 2017 43.0 352.0 16.4 2,330.8 (3.8) 2,738.4
-------------------------------------------- --------- --------- ----------- --------- ---------- -------
Condensed notes forming part of the half year results
1 Basis of preparation
The information for the year ended 31 March 2017 does not
constitute statutory accounts as defined in section 434 of the
Companies Act 2006. A copy of the statutory accounts for that year
has been delivered to the Registrar of Companies. The auditor's
report on those accounts was not qualified, did not include a
reference to any matters to which the auditors drew attention by
way of emphasis without qualifying the report and did not contain
statements under section 498(2) or (3) of the Companies Act
2006.
The annual financial statements of Great Portland Estates plc
are prepared in accordance with IFRSs as adopted by the European
Union. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with
International Accounting Standard 34 Interim Financial Reporting,
as adopted by the European Union. The same accounting policies,
presentation and methods of computation are followed and there have
been no changes in the nature of the Significant Judgements and Key
Sources of Estimation Uncertainty in the condensed set of financial
statements to those applied in the Group's latest annual audited
financial statements. The Group's performance is not subject to
seasonal fluctuations.
The directors do not expect that the adoption of the new and
revised IFRSs that have been issued but are not yet effective will
have a material impact on the financial statements of the Group in
future periods, except that IFRS 9 will impact both the measurement
and disclosures of financial instruments, IFRS 16 will require the
Group to include its limited lease liabilities and associated right
of use assets onto its balance sheet and IFRS 15 may have an impact
on revenue recognition and related disclosures. Beyond the
information above, it is not practicable to provide a reasonable
estimate of the effect of these new standards until a detailed
review is complete.
Going concern
Details of the market in which the Group operates, together with
factors likely to affect its future development and performance,
are set out in the "Our market" and "Our business" sections of this
report. The financial position of the Group, its liquidity position
and borrowing facilities are described in "Our financial results"
and in the notes of the half year results.
The Directors have reviewed the current and projected financial
position of the Group, making reasonable assumptions about future
trading performance. After making enquiries, the Directors have a
reasonable expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis
in preparing the half year results.
2 Total revenue
Six
Year months Six months
to to 30 to
31 March September 30 September
2017 2017 2016
GBPm GBPm GBPm
--------- ------------------------------ ---------- -------------
77.7 Gross rental income 42.1 37.6
3.1 Spreading of lease incentives 3.1 1.0
11.8 Service charge income 6.5 6.7
4.1 Joint venture fee income 1.1 1.6
25.2 Development management revenue 12.6 10.5
121.9 65.4 57.4
--------- ------------------------------ ---------- -------------
3 Net rental income
Six Six
months months
Year to to
to 30 30
31 March September September
2017 2017 2016
GBPm GBPm GBPm
--------- ----------------------------- ---------- ----------
77.7 Gross rental income 42.1 37.6
3.1 Spreading of lease incentives 3.1 1.0
(0.6) Ground rent (0.5) (0.3)
80.2 44.7 38.3
--------- ----------------------------- ---------- ----------
4 Property expenses
Six
months
Year Six months to
to to 30
31 March 30 September September
2017 2017 2016
GBPm GBPm GBPm
--------- ----------------------- ------------- ----------
(11.8) Service charge income (6.5) (6.7)
13.9 Service charge expenses 7.9 7.6
5.2 Other property expenses 2.3 2.3
--------- ----------------------- ------------- ----------
7.3 3.7 3.2
--------- ----------------------- ------------- ----------
5 Finance income
Six
months
Year Six months to
to to 30
31 March 30 September September
2017 2017 2016
GBPm GBPm GBPm
--------- ----------------------------------------- ------------- ----------
9.0 Interest income on joint venture balances 5.2 4.3
9.0 5.2 4.3
--------- ----------------------------------------- ------------- ----------
6 Finance costs
Six
months
Year Six months to
to to 30
31 March 30 September September
2017 2017 2016
GBPm GBPm GBPm
--------- ---------------------------------------- ------------- ----------
3.3 Interest on revolving credit facilities 1.4 1.6
12.9 Interest on private placement notes 1.9 6.4
8.0 Interest on debenture stock 4.0 4.0
1.5 Interest on convertible bond 0.8 0.8
Interest on obligations under finance
1.8 leases 0.9 1.0
27.5 Gross finance costs 9.0 13.8
Less: capitalised interest at an average
(18.3) interest cost of 3.3% (2016: 3.9%) (4.5) (10.4)
--------- ---------------------------------------- ------------- ----------
Finance costs before finance income
9.2 and fair value movements 4.5 3.4
--------- ---------------------------------------- ------------- ----------
7 Tax
Six
months
Year Six months to
to to 30
31 March 30 September September
2017 2017 2016
GBPm GBPm GBPm
--------- ----------------------------------- ------------- ----------
Current tax
- UK corporation tax - current period - -
(0.1) UK corporation tax - prior periods - -
--------- ----------------------------------- ------------- ----------
(0.1) Total current tax - -
(0.7) Deferred tax (2.5) 0.1
(0.8) Tax (credit)/charge for the period (2.5) 0.1
--------- ----------------------------------- ------------- ----------
The difference between the standard rate of tax and the
effective rate of tax arises from the items set out below:
Six
months
Year Six months to
to to 30
31 March 30 September September
2017 2017 2016
GBPm GBPm GBPm
--------- ---------------------------------------- ------------- ----------
(140.2) Profit/(loss) before tax 22.8 (62.7)
--------- ---------------------------------------- ------------- ----------
Tax charge/(credit) on profit/(loss)
(28.0) at standard rate of 19% (2016: 20%) 4.3 (12.5)
Changes in the fair value of properties,
32.8 not subject to tax (5.7) 25.3
Changes in the fair value of financial
(2.9) instruments, not subject to tax 4.2 (7.7)
REIT tax-exempt rental income and
(4.0) gains (5.2) (5.6)
(0.1) Prior periods' corporation tax - -
1.4 Other (0.1) 0.6
(0.8) Tax (credit)/charge for the period (2.5) 0.1
--------- ---------------------------------------- ------------- ----------
The Group's deferred tax assets and liabilities have been
calculated using tax rates that have been enacted or substantively
enacted at the balance sheet date and are expected to apply when
the liability is settled or the asset is realised.
During the period GBPnil (2016: GBPnil) of deferred tax was
credited directly to equity. The Group's net deferred tax at 30
September 2017 was an asset of GBP4.5 million (2016: GBP1.2
million). This consists of a deferred tax liability of GBP2.8
million (2016: GBPnil) and deferred tax assets of GBP7.3 million
(2016: GBP1.2 million).
Movement in deferred tax:
Recognised
At in the
1 April income At 30September
2017 statement 2017
GBPm GBPm GBPm
----------------------------------------- -------- ---------- --------------
Deferred tax liability in respect of
GBP150 million 1.00% convertible bonds
2018 (2.8) - (2.8)
Deferred tax asset in respect of revenue
losses 4.0 2.6 6.6
Deferred tax asset in respect of other
temporary differences 0.8 (0.1) 0.7
Net deferred tax asset 2.0 2.5 4.5
----------------------------------------- -------- ---------- --------------
A further deferred tax asset of GBP2.8 million, mainly relating
to revenue losses, the pension liability and contingent share
awards was not recognised because it is uncertain whether future
taxable profits will arise against which this asset can be
utilised.
As a REIT, the Group is largely exempt from corporation tax in
respect of its rental profits and chargeable gains relating to its
property rental business. The Group is otherwise subject to
corporation tax. In particular, the Group's REIT exemption does not
extend to either profits arising from the sale of investment
properties in respect of which a major redevelopment has completed
within the preceding three years or profits arising from trading
properties (including the sale of the residential units at Rathbone
Square, W1).
In order to ensure that the Group is able to both retain its
status as a REIT and to avoid financial charges being imposed, a
number of tests (including a minimum distribution test) must be met
by both Great Portland Estates plc and by the Group as a whole on
an ongoing basis. These conditions are detailed in the Corporation
Tax Act 2010.
8 Performance measures and EPRA metrics
Adjusted earnings and net assets per share are calculated in
accordance with the Best Practice Recommendations issued by the
European Public Real Estate Association (EPRA). The recommendations
are designed to make the financial statements of public real estate
companies clearer and more comparable across Europe enhancing the
transparency and coherence of the sector. The directors consider
these standard metrics to be the most appropriate method of
reporting the value and performance of the business.
Weighted average number of ordinary shares
Year Six months Six months
to to to
31 March 30 September 30 September
2017 2017 2016
No. No. of No.
of shares shares of shares
----------- ----------------------------------- ------------- -------------
Issued ordinary share capital
343,926,149 at 1 April 343,926,149 343,926,149
- Share consolidation (12,755,495) -
(1,933,616) Investment in own shares (1,538,561) (2,073,445)
----------- ----------------------------------- ------------- -------------
Weighted average number of ordinary
341,992,533 shares - basic 329,632,093 341,852,704
----------- ----------------------------------- ------------- -------------
Basic and diluted earnings per share
Six Six Six Six Six Six
Year months months months months months months
to to 30 to 30 to 30 to 30 to 30 to 30
31 March September September September September September September
2017 2017 2017 2017 2016 2016 2016
Loss Profit No. Earnings Loss No. Loss
per after of per after of per
share tax shares share tax shares share
pence GBPm million pence GBPm million pence
--------- ------------------ ---------- ---------- ---------- ---------- ---------- ----------
(40.8) Basic 25.3 329.6 7.7 (62.8) 341.9 (18.4)
Dilutive effect of
- LTIP shares - - - - 0.6 -
Dilutive effect of
- convertible bond (5.4) 20.7 (2.0) (9.5) 21.0 (1.5)
--------- ------------------ ---------- ---------- ---------- ---------- ---------- ----------
(40.8) Diluted 19.9 350.3 5.7 (72.3) 363.5 (19.9)
--------- ------------------ ---------- ---------- ---------- ---------- ---------- ----------
EPRA Earnings per share
Six Six Six Six Six Six
Year months months months months months months
to to 30 to 30 to 30 to 30 to 30 to 30
31 March September September September September September September
2017 2017 2017 2017 2016 2016 2016
(Loss)/earnings Profit/(loss) No. Earnings/(loss) (Loss)/profit No. (Loss)/earnings
per after of per after of per
share tax shares share tax shares share
pence GBPm million pence GBPm million pence
--------------- ----------------- ------------- --------- --------------- ------------- --------- ---------------
(40.8) Basic 25.3 329.6 7.7 (62.8) 341.9 (18.4)
(Surplus)/deficit
from investment
40.1 property (16.9) - (5.1) 90.3 - 26.4
(Surplus)/deficit
from joint
venture
investment
17.4 property (9.7) - (2.9) 38.3 - 11.2
Premium paid on
cancellation
of private
placement
15.1 notes 36.6 - 11.1 - - -
Movement in fair
value of
(11.4) derivatives 5.4 - 1.6 (28.4) - (8.3)
Movement in fair
value of
convertible
(3.0) bond (6.2) - (1.9) (10.3) - (3.0)
Movement in fair
value of
derivatives
- in joint ventures (0.5) - (0.1) 0.8 - 0.3
Trading property
0.1 - costs of sale 0.1 - - 0.3 - 0.1
(0.2) Deferred taxation (2.5) - (0.8) 0.1 - -
Basic EPRA
17.3 earnings 31.6 329.6 9.6 28.3 341.9 8.3
--------------- ----------------- ------------- --------- --------------- ------------- --------- ---------------
Dilutive effect
of
- LTIP shares - - - - 0.6 -
- Dilutive effect - - - - - -
of
convertible bond
--------------- ----------------- ------------- --------- --------------- ------------- --------- ---------------
Diluted EPRA
17.3 earnings 31.6 329.6 9.6 28.3 342.5 8.3
--------------- ----------------- ------------- --------- --------------- ------------- --------- ---------------
8 Performance measures and EPRA metrics (continued)
EPRA Net assets per share
31 March 30 September 30 September
2017 30 September 2017 30 September 2016
Net 30 September 2017 Net 30 September 2016 Net
assets 2017 No. assets 2016 No. assets
per Net of per Net of per
share assets shares share assets shares share
pence GBPm million pence GBPm million pence
-------- ---------------------- ------------ ------------ ------------ ------------ ------------ ------------
796 Basic 2,634.8 326.7 806 2,826.8 343.9 822
Investment in own
4 shares - (1.4) 4 - (1.8) 4
- Dilutive effect of - - - - - -
convertible bond
Dilutive effect of
(1) LTIP shares - 0.2 (1) - 0.7 (1)
-------- ---------------------- ------------ ------------ ------------ ------------ ------------ ------------
799 Diluted net assets 2,634.8 325.5 809 2,826.8 342.8 825
Surplus on revaluation
5 of trading property 12.8 - 4 2.0 - -
Fair value of
convertible
3 bond 3.2 - 1 9.2 - 3
Fair value of
(8) derivatives - - - (52.7) - (16)
Fair value of
derivatives
- in joint ventures 0.8 - - 2.1 - 1
- Deferred tax (4.5) - (1) (1.2) - -
799 EPRA NAV 2,647.1 325.5 813 2,786.2 342.8 813
Fair value of
financial
(21) liabilities (27.5) - (8) (111.8) - (32)
Fair value of
convertible
(3) bond (3.2) - (1) (9.2) - (3)
Fair value of
financial
liabilities in joint
(1) ventures (1.4) - - (2.9) - (1)
Fair value of
8 derivatives - - - 52.7 - 16
Fair value of
derivatives
- in joint ventures (0.8) - - (2.1) - (1)
Tax arising on sale
(1) of trading properties (2.4) - (1) (0.4) - -
1 Deferred tax 4.5 - 1 1.2 - -
782 EPRA NNNAV 2,616.3 325.5 804 2,713.7 342.8 792
-------- ---------------------- ------------ ------------ ------------ ------------ ------------ ------------
The Group has GBP150.0 million of convertible bonds in issue
with an initial conversion price of GBP7.27 per share. The dilutive
effect of the contingently issuable shares within the convertible
bond is required to be recognised in accordance with IAS 33 -
Earnings per Share. In accordance with the EPRA Best Practice
Recommendations, we have presented EPRA earnings per share on a
basic and diluted basis.
Total Accounting return
31 March 30 September 30 September
2017 2017 2016
per per per
share share share
pence pence pence
-------- -------------------------------- ------------ ------------
847.0 Opening EPRA NAV (A) 799.0 847.0
799.0 Closing EPRA NAV 813.0 813.0
-------- -------------------------------- ------------ ------------
(48.0) Increase/(decrease) in EPRA NAV 14.0 (34.0)
-------- -------------------------------- ------------ ------------
9.3 Ordinary dividend paid in period 6.4 5.6
-------- -------------------------------- ------------ ------------
(38.7) Total return (B) 20.4 (28.4)
-------- -------------------------------- ------------ ------------
(4.6)% Total return % (B/A) 2.6% (3.3)%
-------- -------------------------------- ------------ ------------
8 Performance measures and EPRA metrics (continued)
Loan-to-property value
31 March 30 September 30 September
2017 2017 2016
GBPm GBPm GBPm
-------- ---------------------------------------- ------------ ------------
GBP142.9 million 5.625% debenture
143.9 stock 2029 143.9 143.9
107.0 GBP450 million revolving credit facility 60.4 166.8
127.4 Private placement notes 174.1 286.8
GBP150.0 million 1.00% convertible
150.0 bonds 2018 (at nominal value) 150.0 150.0
(25.5) Less: cash and cash equivalents (13.8) (9.0)
-------- ---------------------------------------- ------------ ------------
502.8 Net debt excluding joint ventures 514.6 738.5
-------- ---------------------------------------- ------------ ------------
Joint venture interest bearing loans
84.6 and borrowings (at share) 84.6 84.5
Joint venture cash and cash equivalents
(10.6) (at share) (12.2) (10.4)
Net debt including joint ventures
576.8 (A) 587.0 812.6
-------- ---------------------------------------- ------------ ------------
2,580.0 Group properties at market value 2,682.9 3,155.5
Joint venture properties at market
565.5 value 594.9 595.0
Property portfolio at market value
3,145.5 including joint ventures (B) 3,277.8 3,750.5
-------- ---------------------------------------- ------------ ------------
18.3% Loan-to-property value (A/B) 17.9% 21.7%
-------- ---------------------------------------- ------------ ------------
9 Investment property
Investment property
Freehold Leasehold Total
GBPm GBPm GBPm
-------------------------------- -------- --------- -------
Book value at 1 April 2017 1,222.9 1,041.1 2,264.0
Acquisitions 53.7 - 53.7
Costs capitalised 9.3 13.5 22.8
Disposals (8.7) - (8.7)
Net valuation (deficit)/surplus (2.0) 13.3 11.3
-------------------------------- -------- --------- -------
Book value at 30 September 2017 1,275.2 1,067.9 2,343.1
-------------------------------- -------- --------- -------
Investment property under development
Freehold Leasehold Total
GBPm GBPm GBPm
---------------------------------------- -------- --------- -------
Book value at 1 April 2017 87.9 - 87.9
Costs capitalised 7.9 - 7.9
Interest capitalised 0.6 - 0.6
Net valuation surplus 9.1 - 9.1
---------------------------------------- -------- --------- -------
Book value at 30 September 2017 105.5 - 105.5
---------------------------------------- -------- --------- -------
Book value of total investment property
at 30 September 2017 1,380.7 1,067.9 2,448.6
---------------------------------------- -------- --------- -------
Surplus/(deficit) from investment property
Six
Year Six months months
to to 30 to 30
31 March September September
2017 2017 2016
GBPm GBPm GBPm
--------- ----------------------------------- ---------- ----------
Net valuation surplus/(deficit) on
(111.4) investment property 20.4 (91.2)
(Loss)/profit on sale of investment
(25.5) properties (3.5) 0.9
--------- ----------------------------------- ---------- ----------
Surplus/(deficit) from investment
(136.9) property 16.9 (90.3)
--------- ----------------------------------- ---------- ----------
9 Investment property (continued)
The Group's investment properties, including those held in joint
ventures (note 11), were valued on the basis of Fair Value by CBRE
Limited (CBRE), external valuers, as at 30 September 2017. The
valuations have been prepared in accordance with the RICS Valuation
- Global Standards 2017 which incorporate the International
Valuation Standards and the RICS Valuation - Professional Standards
UK January 2014 (revised April 2015) ("the Red Book") and have been
primarily derived using comparable recent market transactions on
arm's length terms. CBRE have advised us that the total fees paid
to CBRE by the Group represent less than five per cent of their
total revenue in any year.
Real estate valuations are complex and derived using comparable
market transactions, which are not publicly available and involve
an element of judgement. Therefore, in line with EPRA guidance, we
have classified the valuation of the property portfolio as Level 3
as defined by IFRS 13. There were no transfers between levels
during the period. Inputs to the valuation, including
capitalisation yields (typically the true equivalent yield) and
rental values, are defined as 'unobservable' as defined by IFRS
13.
Key inputs to the valuation (by building)
ERV True equivalent yield
Average Range Average Range
GBP per sq ft GBP per sq ft % %
---------------------------- ------- -------------- -------------- ----------- -------------
North of Oxford Street Office 70 47 - 86 4.5 3.9 - 6.2
Retail 68 34 - 181 3.7 2.9 - 5.9
Rest of West End Office 80 61 - 93 4.5 3.7 - 6.0
Retail 108 15 - 295 4.0 2.8 - 5.7
City, Midtown and Southwark Office 50 45 - 60 5.1 4.6 - 5.5
Retail 81 28 - 122 4.6 4.6 - 4.7
Capital value
------------------------------
Average Range
GBP per sq ft GBP per sq ft
---------------------------- ------- -------------- -------------- ----------- -------------
Residential 1,926 1,575 - 2,700 n/a n/a
------------------------------------- -------------- -------------- ----------- -------------
Everything else being equal, there is a positive relationship
between rental values and the property valuation, such that an
increase in rental values will increase the valuation of a property
and a decrease in rental values will reduce the valuation of a
property. However, the relationship between capitalisation yields
and the property valuation is negative; therefore, an increase in
capitalisation yields will reduce the valuation of a property and a
reduction will increase its valuation. There are interrelationships
between these inputs as they are determined by market conditions
and the valuation movement in any one period depends on the balance
between them. If these inputs move in opposite directions (i.e.
rental values increase and yields decrease) valuation movements can
be amplified whereas if they move in the same direction they may
offset reducing the overall net valuation movement.
The book value of investment properties includes GBP40.7 million
(2016: GBP35.9 million) in respect of the present value of future
ground rents. Net of these amounts, the market value of the
investment properties together with the market value of the trading
properties was GBP2,682.9 million. During the period, the Group
capitalised GBP0.4 million (2016: GBP1.1 million) of employee costs
in respect of its development team into trading properties and
investment properties under development. At 30 September 2017, the
Group had capital commitments of GBP9.9 million (2016: GBP136.1
million).
10 Trading property
31 March 30 September 30 September
2017 2017 2016
GBPm GBPm GBPm
-------- -------------------------- ------------ ------------
172.4 At beginning of the period 246.7 172.4
66.0 Costs capitalised 11.6 54.1
8.3 Interest capitalised 3.9 5.6
-------- -------------------------- ------------ ------------
246.7 At the end of the period 262.2 232.1
-------- -------------------------- ------------ ------------
The Group is developing a large mixed-use scheme at Rathbone
Square, W1. Part of the approved scheme consists of residential
units, which the Group holds for sale. As a result, the residential
element of the scheme is held as trading property. The fair value
of the trading property was GBP275.0 million at 30 September 2017,
representing a revaluation above cost of GBP12.8 million.
At 30 September 2017, the Group had exchanged contracts to sell
GBP262.1 million of the residential units and received initial cash
deposits of GBP66.5 million from the purchasers (see note 14).
11 Investment in joint ventures
Balances
with
Equity partners Total
GBPm GBPm GBPm
-------------------------------------- ------ --------- -----
At 1 April 2017 250.6 230.2 480.8
Movement on joint venture balances - 20.3 20.3
Additions 4.1 - 4.1
------ --------- -----
Share of profit of joint ventures 1.5 - 1.5
Share of revaluation surplus of joint
ventures 9.6 - 9.6
Profit on sale of investment property 0.1 - 0.1
------ --------- -----
Share of results of joint ventures 11.2 - 11.2
Distributions (8.4) - (8.4)
-------------------------------------- ------ --------- -----
At 30 September 2017 257.5 250.5 508.0
-------------------------------------- ------ --------- -----
The investments in joint ventures comprise the following:
Ownership Country of Ownership Ownership
31 March Incorporation/registration 30 September 30 September
2017 2017 2016
--------- ------------------------------- --------------------------- ------------- -------------
50% The GHS Limited Partnership Jersey 50% 50%
The Great Capital Partnership
50% (dormant) United Kingdom 50% 50%
50% The Great Ropemaker Partnership United Kingdom 50% 50%
50% The Great Victoria Partnerships United Kingdom 50% 50%
50% The Great Wigmore Partnership United Kingdom 50% 50%
--------- ------------------------------- --------------------------- ------------- -------------
11 Investment in joint ventures (continued)
Summarised balance sheets
31
March 30 30 30
2017 The GHS The Great The Great The Great The Great September September September
At Limited Capital Ropemaker Victoria Wigmore 2017 2017 2016
share Partnership Partnership Partnership Partnerships Partnership Total At share At share
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- -------------- ----------- ----------- ----------- ------------ ----------- --------- --------- ---------
Investment
570.7 property 238.1 - 730.7 231.3 - 1,200.1 600.1 600.1
0.9 Current assets 0.1 - 0.6 0.5 - 1.2 0.6 0.8
Cash and cash
10.6 equivalents 3.1 0.1 17.4 3.5 0.2 24.3 12.2 10.4
Balances
(from)/to
(230.2) partners (94.8) - (417.1) 10.9 - (501.0) (250.5) (210.0)
Interest
bearing loans
(84.6) and borrowings - - (89.6) (79.6) - (169.2) (84.6) (84.5)
(1.3) Derivatives - - (1.5) - - (1.5) (0.8) (2.1)
Current
(10.3) liabilities (7.8) - (16.0) (4.5) (0.2) (28.5) (14.3) (9.0)
(5.2) Finance leases - - (10.3) - - (10.3) (5.2) (5.1)
------- -------------- ----------- ----------- ----------- ------------ ----------- --------- --------- ---------
250.6 Net assets 138.7 0.1 214.2 162.1 - 515.1 257.5 300.6
------- -------------- ----------- ----------- ----------- ------------ ----------- --------- --------- ---------
Summarised income
statements
------------------------- ----------- ----------- ----------- ------------ ----------- --------- --------- ---------
31
March 30 30 30
2017 The GHS The Great The Great The Great The Great September September September
At Limited Capital Ropemaker Victoria Wigmore 2017 2017 2016
share Partnership Partnership Partnership Partnerships Partnership Total At share At share
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------- -------------- ----------- ----------- ----------- ------------ ----------- --------- --------- ---------
Net rental
17.4 income - - 11.5 5.7 - 17.2 8.6 8.9
Property and
administration
(4.1) costs (0.7) - (2.4) (0.4) (0.1) (3.6) (1.8) (2.5)
Net finance
(10.8) costs (2.3) - (7.8) (1.5) - (11.6) (5.8) (5.2)
Movement in
fair value
(0.1) of derivatives - - 1.0 - - 1.0 0.5 (0.8)
Share of
profit of
joint
2.4 ventures (3.0) - 2.3 3.8 (0.1) 3.0 1.5 0.4
Revaluation of
investment
(55.6) property (0.9) - 17.4 2.8 - 19.3 9.6 (38.4)
Profit/(loss)
on sale
of investment
(4.0) property - - - - 0.2 0.2 0.1 0.1
------- -------------- ----------- ----------- ----------- ------------ ----------- --------- --------- ---------
Share of
results of
joint
(57.2) ventures (3.9) - 19.7 6.6 0.1 22.5 11.2 (37.9)
------- -------------- ----------- ----------- ----------- ------------ ----------- --------- --------- ---------
11 Investment in joint ventures (continued)
The non-recourse loans of the joint ventures at 30 September
2017 are set out below:
Nominal
value
Joint venture debt facilities GBPm Maturity Fixed/Floating Interest rate
------------------------------- ------- --------- -------------- -------------
The Great Ropemaker 90.0 December Floating LIBOR +1.25%
Partnership 2020
The Great Victoria Partnership 80.0 July 2022 Fixed 3.74%
Total 170.0
------------------------------- ------- --------- -------------- -------------
The Great Ropemaker Partnership has entered into two interest
rate swaps with a fixed rate of 1.42%, which expire conterminously
with the bank loan in 2020, with a notional principal amount of
GBP90.0 million. The loan has an all-in hedged coupon of 2.67%.
At 30 September 2017, the Great Victoria Partnership loan had a
fair value of GBP83.3 million (2016: GBP85.7 million). All
interest-bearing loans are in sterling. At 30 September 2017, the
joint ventures had GBPnil undrawn facilities (2016: GBPnil).
The investment properties include GBP5.2 million (2016: GBP5.1
million) in respect of the present value of future ground rents,
net of these amounts the market value of our share of the total
joint venture properties is GBP594.9 million. At 30 September 2017,
the Group's share of joint venture capital commitments was GBP37.4
million (2016: GBP62.3 million).
Transactions during the period between the Group and its joint
ventures, who are related parties, are set out below:
31 March 30 September 30 September
2017 2017 2016
GBPm GBPm GBPm
-------- --------------------------------- ------------ ------------
Movement on joint venture
(42.6) balances during the period (20.3) (22.4)
Balances receivable at the period
(230.2) end from joint ventures (250.5) (210.0)
56.2 Distributions 8.4 23.6
4.1 Fee income 1.1 1.6
-------- --------------------------------- ------------ ------------
The joint venture balances bear interest as follows: the GHS
Limited Partnership at 5.3% on balances at inception and 4.0% on
any subsequent balances, the Great Ropemaker Partnership at 4.0%
and the Great Wigmore Partnership at 4.0%.
The Group earns fee income from its joint ventures for the
provision of management services. All of the above transactions are
made on terms equivalent to those that prevail in arm's length
transactions.
12 Plant and equipment
Fixtures
Leasehold and
improvements fittings Total
GBPm GBPm GBPm
------------------------------------- ------------- --------- -----
Cost or valuation
At 1 April 2017 5.2 1.0 6.2
Additions 0.1 0.1 0.2
-------------------------------------
At 30 September 2017 5.3 1.1 6.4
------------------------------------- ------------- --------- -----
Depreciation
At 1 April 2017 0.7 0.4 1.1
Charge for the period 0.3 0.1 0.4
------------------------------------- -------------
At 30 September 2017 1.0 0.5 1.5
------------------------------------- ------------- --------- -----
Carrying amount at 30 September 2017 4.3 0.6 4.9
------------------------------------- ------------- --------- -----
13 Trade and other receivables
31 March 30 September 30 September
2017 2017 2016
GBPm GBPm GBPm
-------- ------------------------------------------ ------------ ------------
4.0 Trade receivables 3.9 3.9
(0.1) Allowance for doubtful debts (0.2) (0.4)
-------- ------------------------------------------ ------------ ------------
3.9 3.7 3.5
0.7 Prepayments and accrued income 1.0 1.4
Work in progress on development management
14.7 contracts 20.9 1.0
3.2 Other trade receivables 3.7 3.2
Deferred consideration on property
300.8 sales 61.7 -
28.5 Derivatives - 52.7
351.8 91.0 61.8
-------- ------------------------------------------ ------------ ------------
Work in progress on development management contracts is an
amount due to the Group in relation to a development property sold
prior to its completion where the Group has a contract with the
buyer to construct the remainder of the building on their behalf.
During the period, the Group received payments on account of GBP6.1
million (2016: GBP11.9 million). At 30 September 2017, the
aggregate cumulative cost incurred was GBP12.6 million (2016:
GBP53.0 million) and the cumulative profits less losses recognised
was a loss of GBP0.3 million (2016: profit of GBP5.7 million).
There are no material project retentions.
14 Trade and other payables
31 March 30 September 30 September
2017 2017 2016
GBPm GBPm GBPm
-------- --------------------------------------- ------------ ------------
22.8 Rents received in advance 24.5 21.6
Deposits received on forward sale
66.0 of residential units 66.5 63.1
58.2 Non-trade payables and accrued expenses 30.7 65.4
147.0 121.7 150.1
-------- --------------------------------------- ------------ ------------
15 Interest-bearing loans and borrowings
31 March 30 September 30 September
2017 2017 2016
GBPm GBPm GBPm
-------- ---------------------------------------- ------------ ------------
Non-current liabilities at amortised
cost
Secured
GBP142.9 million 5.625% debenture
143.9 stock 2029 143.9 143.9
Unsecured
107.0 GBP450 million revolving credit facility 60.4 166.8
GBP175 million 2.15% private placement
- notes 2024 174.1 -
GBP30.0 million 5.09% private placement
- notes 2018 - 30.0
$130.0 million 4.81% private placement
- notes 2018 - 80.9
$78.0 million 5.37% private placement
- notes 2021 - 48.5
$160.0 million 4.20% private placement
101.9 notes 2019 - 101.9
$40.0 million 4.82% private placement
25.5 notes 2022 - 25.5
Current liabilities at fair value
Unsecured
GBP150.0 million 1.00% convertible
159.4 bonds 2018 153.2 159.2
537.7 531.6 756.7
-------- ---------------------------------------- ------------ ------------
The Group has a floating rate GBP450.0 million revolving credit
facility. The facility is unsecured, attracts a floating rate based
on a ratchet of between 105-165 basis points above LIBOR, based on
gearing, and expires in 2021. At 30 September 2017, the Group had
GBP389 million (2016: GBP282.0 million) of undrawn committed credit
facilities.
15 Interest-bearing loans and borrowings (continued)
In May 2017, the Group repaid its 2019 and 2022 private
placement notes for a total redemption premium of GBP13.5 million,
representing GBP36.6 million premium (including early redemption
premium, unamortised costs and currency movements since issue) on
the private placement notes net of GBP23.1 million receipt on
cancellation of the associated cross currency swaps. Also in May,
the Group raised GBP175 million through the issue of new seven-year
US private placement notes. The new notes are sterling denominated,
unsecured and have a fixed rate coupon of 2.15%.
The Group's convertible bonds have a fixed coupon of 1.0% per
annum and an initial conversion price of GBP7.27 per share. In
accordance with IAS 39, the Convertible Bonds have been designated
at fair value through profit and loss upon initial recognition,
with any gains or losses arising on subsequent re-measurement
recognised in the income statement.
At 30 September 2017, properties with a carrying value of
GBP384.5 million (2016: GBP386.6 million) were secured under the
Group's debenture stock.
The following table details the notional principal amounts and
remaining terms of interest rate derivatives:
Average contracted
fixed interest Notional principal Fair value
rate amount asset/(liability)
-------------------------- -------------------------- --------------------------
30 September 30 September 30 September 30 September 30 September 30 September
2017 2016 2017 2016 2017 2016
Cash flow hedges % % GBPm GBPm GBPm GBPm
-------------------- ------------ ------------ ------------ ------------ ------------ ------------
Interest rate floor
Within one year - 1.80 - 159.7 - 1.5
- 1.80 - 159.7 - 1.5
-------------------- ------------ ------------ ------------ ------------ ------------ ------------
The following table details the notional principal amounts and
remaining terms of exchange rate derivatives:
Average Notional
exchange Foreign principal Fair value
rate currency amount asset/(liability)
---------- ------------------------ ------------------------ ------------------------ ----------------------------------
Cash flow 30 30 September 30 30 September 30 30 September 30 September 30 September
hedge September 2016 September 2016 September 2016 2017 2016
- cross 2017 rate 2017 US$m 2017 GBPm GBPm GBPm
currency rate US$m GBPm
swaps
---------- ---------- ------------ ---------- ------------ ---------- ------------ ------------- -------------------
Between
two and
five
years - 1.587 - 368.0 - 231.9 - 47.1
In excess
of five
years - 1.566 - 40.0 - 25.5 - 4.1
---------- ---------- ------------ ---------- ------------ ---------- ------------ ------------- -------------------
- 1.585 - 408.0 - 257.4 - 51.2
---------- ---------- ------------ ---------- ------------ ---------- ------------ ------------- -------------------
The Group operates solely in the United Kingdom, and all of its
operating profits and net assets are sterling denominated.
15 Interest-bearing loans and borrowings (continued)
Fair value of financial liabilities/(assets)
31 March 31 March 30 September 30 September 30 September 30 September
2017 2017 2017 2017 2016 2016
Book Fair Book Fair Book Fair
value value value value value value
GBPm GBPm Fair value hierarchy GBPm GBPm GBPm GBPm
-------- -------- ------------------------- ------------ ------------ ------------ ------------
Level 1
GBP150.0 million
1.00% convertible
159.4 159.4 bond 2018 153.2 153.2 159.2 159.2
Level 2
(28.0) (28.0) Cross currency swaps - - (51.2) (51.2)
(0.5) (0.5) Interest rate floor - - (1.5) (1.5)
Other items not carried
at fair value
GBP142.9 million
5.625% debenture
143.9 177.9 stock 2029 143.9 173.8 143.9 182.0
Private placement
127.4 164.4 notes 174.1 171.7 286.8 360.5
107.0 107.0 Bank loans and overdrafts 60.4 60.4 166.8 166.8
509.2 580.2 531.6 559.1 704.0 815.8
-------- -------- ------------------------- ------------ ------------ ------------ ------------
The fair values of the Group's listed convertible bonds have
been estimated on the basis of quoted market prices, representing
Level 1 fair value measurements as defined by IFRS 13 Fair Value
Measurement. The fair value of the Group's interest rate floor was
estimated by calculating the present value of future cash flows,
using appropriate market discount rates, representing Level 2 fair
value measurements as defined by IFRS 13. The fair value of the
Group's cross currency swaps was estimated on the basis of the
prevailing rates at the period end, representing Level 2 fair value
measurements as defined by IFRS 13. None of the Group's financial
derivatives are designated as financial hedges. The fair values of
the Group's cash and cash equivalents and trade payables and
receivables are not materially different from those at which they
are carried in the financial statements. The fair values of the
Group's private placement notes were determined by comparing the
discounted future cash flows using the contracted yields with those
of the reference gilts plus the implied margins.
16 Share capital
Six
months
Year Year Six months Six months Six months to
to to to to to 30
31 March 31 March 30 September 30 September 30 September September
2017 2017 2017 2017 2016 2016
Number GBPm Number GBPm Number GBPm
----------- --------- ------------------- ------------- ------------- ------------- ----------
Allotted, called
up and fully paid
At the beginning
343,926,149 43.0 of the period 343,926,149 43.0 343,926,149 43.0
- - Share consolidation (17,196,297) - - -
At the end of the
343,926,149 43.0 period 326,729,852 43.0 343,926,149 43.0
----------- --------- ------------------- ------------- ------------- ------------- ----------
On 18 May 2017, in conjunction with a special dividend (see note
19), the Company carried out a 19 for 20 share consolidation of the
Company's ordinary share capital. After the consolidation, the
Company had 326,729,852 ordinary shares with a nominal value of 13
(3) (19) pence each.
17 Investment in own shares
Six
months
Year Six months to
to to 30
31 March 30 September September
2017 2017 2016
GBPm GBPm GBPm
--------- --------------------------------- ------------- ----------
9.1 At the beginning of the period 3.8 9.1
Employee Long-Term Incentive Plan
(1.0) and Share Matching Plan charge (0.8) (1.3)
- Purchase of shares - -
(4.3) Transfer to retained earnings 0.6 (4.3)
3.8 At the end of the period 3.6 3.5
--------- --------------------------------- ------------- ----------
The investment in the Company's own shares is held at cost and
comprises 1,366,628 shares (31 March 2017: 1,804,412 shares) held
by the Great Portland Estates plc LTIP Employee Share Trust which
will vest for certain senior employees of the Group if performance
conditions are met.
During the period 347,572 shares (2016: 765,065 shares) were
awarded to directors and senior employees in respect of the 2014
LTIP award. The fair value of shares awarded and outstanding at 30
September 2017 was GBP4.3 million (2016: GBP6.3 million).
18 Adjustment for non-cash movements in the cash flow
statement
Six
months
Year Six months to
to to 30
31 March 30 September September
2017 2017 2016
GBPm GBPm GBPm
--------- ---------------------------------------- ------------- ----------
(Surplus)/deficit from investment
136.9 property (16.9) 90.3
Employee Long-Term Incentive and Share
1.0 Matching Plan charge 0.8 1.3
(3.1) Spreading of tenant lease incentives (3.1) (1.0)
- Loss on development management contracts 0.3 -
57.2 Share of results from joint ventures (11.2) 37.9
0.4 Other items 0.5 -
--------- ---------------------------------------- ------------- ----------
192.4 Adjustments for non-cash items (29.6) 128.5
--------- ---------------------------------------- ------------- ----------
19 Dividends
On 31 May 2017, the Company paid an interim special dividend of
32.15 pence per share equating to GBP110.0 million. On 10 July
2017, the Company paid the final dividend from the year ended 31
March 2017 of 6.4 pence per share equating to GBP20.8 million. Both
the interim special dividend for the year ending 31 March 2018 and
final dividend from the year ended 31 March 2017, together
totalling GBP130.8 million, are included within the Group Statement
of Changes in Equity.
The declared interim dividend of 4.0 pence per share (2016: 3.7
pence per share) was approved by the Board on 15 November 2017 and
is payable on 2 January 2018 to shareholders on the register on 24
November 2017. The dividend is not recognised as a liability in the
Half Year Results.
20 Operating leases
Future aggregate minimum rentals receivable under
non-cancellable operating leases are:
31 March 30 September 30 September
2017 2017 2016
GBPm GBPm GBPm
-------- -------------------------- ------------ ------------
The Group as a lessor
76.7 Less than one year 81.8 74.3
224.3 Between one and five years 247.5 195.9
169.2 More than five years 194.7 142.3
-------- -------------------------- ------------ ------------
470.2 524.0 412.5
-------- -------------------------- ------------ ------------
The Group leases its investment properties under operating
leases. The weighted average length of lease at 30 September 2017
was 5.5 years (2016: 4.9 years). All investment properties, except
those under development or being prepared for development,
generated rental income and no contingent rents were recognised in
the period (2016: GBPnil).
Future aggregate minimum rentals payable under non-cancellable
operating leases are:
31 March 30 September 30 September
2017 2017 2016
GBPm GBPm GBPm
-------- -------------------------- ------------ ------------
The Group as a lessee
1.0 Less than one year 1.0 1.0
4.1 Between one and five years 4.1 4.1
3.0 More than five years 2.5 3.5
-------- -------------------------- ------------ ------------
8.1 7.6 8.6
-------- -------------------------- ------------ ------------
21 Reserves
The following describes the nature and purpose of each reserve
within equity:
Share capital
The nominal value of the Company's issued share capital,
comprising 13(3) (19) pence ordinary shares.
Share premium
Amount subscribed for share capital in excess of nominal value
less directly attributable issue costs.
Capital redemption reserve
Amount equivalent to the nominal value of the Company's own
shares acquired as a result of share buy-back programmes.
Retained earnings
Cumulative net gains and losses recognised in the Group income
statement together with other items such as dividends.
Investment in own shares
Amount paid to acquire the Company's own shares for its Employee
Long-Term Incentive Plan and Share Matching Plan less accounting
charges.
Directors' responsibility statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting';
(b) the half-yearly report includes a fair review of the
information required by DTR 4.2.7R (indication of important events
during the first six months and description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the half-yearly report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related party
transactions and changes therein).
By the order of the Board
Toby Courtauld Nick Sanderson
Chief Executive Finance Director
15 November 2017 15 November 2017
Independent review report to Great Portland Estates plc
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2017 which comprises the income
statement, the balance sheet, the statement of changes in equity,
the cash flow statement and related notes 1 to 21. We have read the
other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Auditing Practices
Board. Our work has been undertaken so that we might state to the
Company those matters we are required to state to it in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our review work, for this
report, or for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2017 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
Deloitte LLP
Statutory Auditor
London, UK
15 November 2017
Directors and shareholders' information
Directors
Martin Scicluna Wendy Becker
Chairman, Non-Executive Non-Executive Director
Toby Courtauld Nick Hampton
Chief Executive Non-Executive Director
Nick Sanderson Richard Mully
Finance Director Non-Executive Director
Charles Philips
Non-Executive Director
Jonathan Short
Non-Executive Director
Shareholders' information
Financial calendar 2017
Ex-dividend date for interim dividend 23 November
Registration qualifying date for interim
dividend 24 November
2018
Interim dividend payable 2 January
Announcement of full year results 23 May*
Circulation of Annual Report and Accounts
2018 2 June*
Annual General Meeting 5 July*
Final dividend payable 9 July*
*Provisional.
Shareholder enquiries Dividend payments
All enquiries relating to holdings of shares, As a REIT, dividend payments
bonds or debentures in Great Portland Estates, must be split between PIDs
including notification of change of address, and
queries regarding dividend/interest payments non-PIDs. Information in
or the loss of a certificate, should be respect of the tax consequences
addressed to the Company's Registrars: for shareholders of receiving
Capita Registrars dividends can be found on
34 Beckenham Road the Company's website at
Beckenham www.gpe.co.uk/investors/shareholder-information/reits
Kent
BR3 4TU Share dealing service
Tel: 0871 664 0300 An online and telephone
E-mail: ssd@capitaregistrars.com dealing service is available
(Calls cost 12 pence per minute plus network for UK shareholders through
extras; lines are open 9.00am - 5.30pm Monday Capita Deal. For further
to Friday.) information on this service,
If you are calling from overseas, please or to buy and sell shares,
dial +44 371 664 0300. please contact:
Online dealing - www.capitadeal.com
Website: www.gpe.co.uk Telephone dealing - 0371
The Company's corporate website holds, 664 0445
amongst other information, a copy of our (Calls are charged at the
latest annual report and accounts, a list standard geographical rate
of properties held by the Group and press and will vary by provider;
announcements released over the last twelve lines are open 8.00am -
months. 4.30pm Monday to Friday).
Company Secretary
Desna Martin
Registered office:
33 Cavendish Square
London W1G 0PW
Tel: 020 7647 3000
Fax: 020 7016 5500
Registered Number: 596137
Glossary
Core West End
Areas of London with W1 and SW1 postcodes.
Earnings Per Share (EPS)
Profit after tax divided by the weighted average number of
ordinary shares in issue.
EPRA adjustments
Standard calculation methods for adjusted EPS and NAV as set out
by the European Public Real Estate Association (EPRA) in their Best
Practice and Policy Recommendations.
Estimated Rental Value (ERV)
The market rental value of lettable space as estimated by the
Company's valuers at each balance sheet date.
Fair value - investment property
The amount as estimated by the Company's valuers for which a
property should exchange on the date of valuation between a willing
buyer and a willing seller in an arm's-length transaction after
proper marketing wherein the parties had each acted knowledgeably,
prudently and without compulsion. In line with market practice,
values are stated net of purchasers' costs.
IPD
The Investment Property Databank Limited (IPD) is a company that
produces an independent benchmark of property returns.
IPD central London
An index, compiled by IPD, of the central and inner London
properties in their monthly and quarterly valued universes.
Like-for-like portfolio
Properties that have been held for the whole of the period of
account.
Loan to Value (LTV)
Total bank loans, private placement notes, convertible bonds at
nominal value and debenture stock, net of cash (including our share
of joint ventures balances), expressed as a percentage of the
market value of the property portfolio (including our share of
joint ventures).
Net assets per share or Net Asset Value (NAV)
Equity shareholders' funds divided by the number of ordinary
shares at the balance sheet date.
Net debt
The book value of the Group's bank and loan facilities, private
placement notes and debenture loans plus the nominal value of the
convertible bond less cash and cash equivalents.
Net gearing
Total Group borrowings (including the convertible bonds at
nominal value) less short-term deposits and cash as a percentage of
equity shareholders' funds, calculated in accordance with our bank
covenants.
Net initial yield
Annual net rents on investment properties as a percentage of the
investment property valuation having added notional purchaser's
costs.
Non-PIDs
Dividends from profits of the Group's taxable residual
business.
PMI
Purchasing Managers Index
Portfolio Internal Rate of Return (IRR)
The rate of return that if used as a discount rate and applied
to the projected cash flows from the portfolio would result in a
net present value of zero.
Property Income Distributions (PIDs)
Dividends from profits of the Group's tax-exempt property rental
business.
REIT
UK Real Estate Investment Trust.
Rent roll
The annual contracted rental income.
Return on shareholders' equity
The growth in the EPRA diluted net assets per share plus
dividends per share for the period expressed as a percentage of the
EPRA net assets per share at the beginning of the period.
Glossary (continued)
Reversionary or under-rented
The percentage by which ERV exceeds rent roll on let space.
Reversionary yield
The anticipated yield, which the initial yield will rise to once
the rent reaches the ERV.
Total Accounting Return (TAR)
The growth in EPRA NAV per share plus ordinary dividends paid,
and this can be expressed as a percentage of EPRA NAV per share at
the beginning of the period.
Total Property Return (TPR)
Capital growth in the portfolio plus net rental income derived
from holding these properties plus profit on sale of disposals
expressed as a percentage return on the period's opening value as
calculated by IPD.
TMT
Technology, Media and Telecoms sector.
Total Shareholder Return (TSR)
The growth in the ordinary share price as quoted on the London
Stock Exchange plus dividends per share received for the period
expressed as a percentage of the share price at the beginning of
the period.
Triple net asset value (NNNAV)
NAV adjusted to include the fair value of the Group's financial
liabilities and deferred tax on a diluted basis.
True equivalent yield
The constant capitalisation rate which, if applied to all cash
flows from an investment property, including current rent,
reversions to current market rent and such items as voids and
expenditures, equates to the market value having taken into account
notional purchaser's costs. Assumes rent is received quarterly in
advance.
Vacancy rate
The element of a property which is unoccupied but available for
letting, expressed as the ERV of the vacant space divided by the
ERV of the total portfolio.
Weighted Average Unexpired Lease Term (WAULT)
The Weighted Average Unexpired Lease Term expressed in
years.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FZLLFDFFLFBF
(END) Dow Jones Newswires
November 15, 2017 02:00 ET (07:00 GMT)
Great Portland Estates (LSE:GPOR)
Historical Stock Chart
From Apr 2024 to May 2024
Great Portland Estates (LSE:GPOR)
Historical Stock Chart
From May 2023 to May 2024