GLADSTONE LAND Corp — Call Transcript 2026

Very good. Well, ladies and gentlemen, good morning, and welcome to the presentation of Landsec's 2026 full year results. Landsec is in excellent shape. Customer demand for our places remains very high, and with supply increasingly constrained, occupancy across our portfolio has risen to its highest level in more than two decades. As a result, rental values continue to rise, now at the fastest pace in nearly 20 years. We've carried this momentum into the new financial year, with 1 million square foot of active occupier demand across our recent office projects, a record leasing pipeline in retail, and no signs of weakening demand arising from the Middle East situation. This supports continued strong income growth from here, and with that, an acceleration in EPS growth in both the near- and medium-term. For this year, as we previously guided, we expect reported EPS to be stable due to the impact of last year's sale of Queen Anne's Mansions, offsetting strong underlying growth. Based on our current momentum, we expect EPS for FY 2028 to grow by a high single-digit %. This means that we remain on track to deliver compound annual growth in EPS of around 5% between now and FY 2030. On top of an existing income return NTA of 5.8%, implies an attractive low double-digit total return annually for shareholders. Our operational performance has shown consistent growth over the last few years, despite the elevated uncertainty in the external macro environment throughout that period. This reflects the uniqueness and resilience of our high-quality portfolio and our market-leading operating platforms, with occupancy rising steadily to now 98%. With our portfolio effectively full, the upward pressure on rents has continued to build, and uplifts in rent on relettings and renewals virtually doubled over the past year to 15%. As a result, we delivered 4.6% growth in like-for-like net rental income for the year, ahead of our initial guidance and a robust 4% compound annual growth over the last four years. Although the global macro outlook today is once again uncertain, the rapidly growing reversion in our high-quality portfolio means that the potential for future income growth is well underpinned regardless. Over the past few years, we have sought to reinforce this positive portfolio outlook through strategic discipline by actively positioning Landsec for a higher inflation, higher interest rate environment. Our average debt maturity of 8.6 years is now twice as long as the UK REIT sector average, which, combined with around 90% fixed rates, means our earnings are well protected against volatility in interest rates. We have brought our overhead costs down to their lowest level in 20 years, which means our future income growth flows through to earnings more readily. Our development exposure will be down to just 2% of our portfolio value by the summer, with no plans to add meaningfully to this in the near-term. With just GBP 185 million CapEx left to spend and no need to refinance any debt until 2028, we are in no way reliant on disposals or new financing to fund any commitments. Alongside a clearer, stronger growth outlook, we have actively now moved the business to a lower risk profile. All of this is reflected in another set of positive financial results. Driven by our strong like-for-like income growth and a 15% reduction in overhead costs, our 2.2% growth in EPRA earnings was at the top end of our guidance for the year, factoring in the 1.8% impact on EPS from the earlier than planned sale of QAM that was not part of our initial guidance, which gave rise to 2% growth in dividends. Our NTA per share was up 0.9% for the year, 2.2% in the second half, after having absorbed the 1.1% cost to NTA of selling over GBP 700 million of assets, which generated little or no return. Whilst LTV was down slightly to 38.7% and net debt to EBITDA improved to 8.4x. We expect this to reduce to below 7x over the next two years, driven by the lease-up of our latest developments and continued like-for-like income growth. Combined with our lower cost base and strategic discipline, this means our ongoing income growth will increasingly flow through to an acceleration in EPS growth. There are two very clear trends that support our positive outlook. Firstly, whether it's in retail, driven by a need to maximize consumer reach efficiently, or in office, with a need to attract and retain the best talent, occupier demand is increasingly concentrated on the very best space. Secondly, with development viabilities under pressure, the supply of space of the right quality is very heavily constrained. That's why our portfolio occupancy is now at its highest level since 2003, and ERVs are growing at their fastest pace since 2008. Prime commercial real estate is emerging as a clear winner in a tech-enabled world. In retail, the top 1% of retail destinations in the U.K. provide brands with access to almost 1/3 of all in-store retail spend. Unsurprisingly, therefore, this is where, for example, around 90% of all Apple, Inditex, Uniqlo, and Sephora stores are located. It is where 85% of our portfolio is located. Effective curation of the brands shoppers want drives growing footfall and consumer spend. This in turn results in higher demand for space from brands and so on. Over the past four years, sales in our destinations have grown by around 7x the U.K. national average, outperforming by a total 19 percentage points over that time. Brands continue to focus on our destinations when it comes to investing in fewer, bigger, better stores. Occupancy rises, rents grow. With replacement costs around double current values, new supply is and will remain effectively zero. In our offices, it's a similar story. There's roughly 900 million sq ft of office space across the U.K. With a 5 million sq ft portfolio, we own just 0.5% of the U.K. office market, and not just any 0.5%. Virtually all of that space is located in the two most highly valued locations in the country, the West End and the City, including Bankside. These locations consistently rank as number one or two of the top destinations in the world for international businesses as they provide the very best access to and conditions for talent. Even within these highly prized locations, we are significantly outperforming benchmarks as our occupancy of almost 99% is well ahead of the 93% for Central London as a whole. Meanwhile, net new supply is very limited, partly reflecting the well-understood challenges of build cost inflation and higher interest rates constraining development, but also space being taken offline or repurposed. For example, in Victoria, where around 45% of our London portfolio is located, expected new development supply over the next three years is almost entirely offset by the potential loss of space from offices which are in the process of being converted to alternative uses, such as residential or hotel. Rents for the best locations continue to rise with recent lettings across our existing Victoria estate now well in excess of GBP 100 a sq ft. The ongoing adoption of emerging technologies such as AI is only likely to accelerate consumers or customers' focus on the very best space. Back office and processing roles are set to reduce, the impact of this in central London is more than offset by the creation of new roles and indeed new businesses enabled by technology. There is the demand driven by large businesses concentrating their office space in vibrant business districts as opposed to out of town business park locations. A good example of this is our recent major letting at Timber Square to BP, which is consolidating much of its operations from just south of Heathrow into the center of London. The drivers of occupier demand in central London, certainly for our assets, are encouragingly diverse. You can see this in the roughly 1 million sq ft of active demand across our latest developments. Customers more often than not see new technologies not as an opportunity to improve productivity and to grow, rather than simply as a trigger to reduce headcount and space requirements. In retail, customers expect the rise of AI and agentic commerce to put even more focus on the value of the physical experience and customer connection as part of a wider unified commerce ecosystem. Brands will need to invest more in their spaces to deliver the right experience, adding further weight to the fewer, bigger, better thesis. The fact that we opened or exchanged contracts with more leading expansionary brands such as Sephora, Uniqlo, Pull&Bear, Lefties and other Inditex labels over the past 18 months than any other U.K. retail platform simply highlights the enduring appeal of our destinations. In an environment that is changing rapidly, our edge is clear. We have two market leading platforms and an irreplaceable portfolio focused firmly at the very top end of the market where customer demand is strongest. Reflecting this, we've had another strong year in terms of operational performance. In retail, rental uplifts continue to trend higher, as shown here on the left, whilst occupancy is up 100 basis points to almost 98%, and that's the highest that it's been since the early 2000s. Growth in like-for-like income rose to 5.5%, we signed or enlisted as hands on GBP 49 million of leases on average 11% above ERV. This drove an acceleration in ERV growth to 5.8%, that's comfortably ahead of our initial guidance of similar growth to last year's 4%, it's the highest rate of growth in over 20 years. This further adds to our future income growth potential. Building on the unique data and insights that our market leading U.K. platform provides, we continue to invest in creating experience-led places with a record number of new lettings. That means footfall in our locations is growing well ahead of the U.K. market average, we are gaining market share. This drives sales growth that in turn attracts more leading brands, which alongside enhancing our social eating, dining and leisure offer, leads to higher footfall, which then drives higher sales, and so on. As a result, we remain confident in our potential to deliver 4.5%-7% growth in net rental income per year from our existing retail platform over the next few years, driven by capturing the growing reversion in our portfolio, growing turnover rents and commercialization income, and selective CapEx investments into highly accretive smaller projects. In office, occupancy is now nearly 99%. Uplifts on relettings and renewals increased to 14% compared to 10% for the prior year, and this drove 6% growth in like-for-like income. We signed or in solicitors' hands on GBP 21 million of lettings, on average 7% ahead of ERV, and this drove 7% growth in rental values, well ahead of our guidance of similar growth to the 5% for the prior year, and the highest level that we've seen in our office portfolio since the EU referendum 2016. Our portfolio is effectively full, yet our reversionary potential has jumped now to a high 17%, and the potential income upside on lease events remains clear. This strength in customer demand bodes well for our latest London office completions, and we've made strong progress in terms of leasing since our half year results. Our three recently completed projects are now 54% let, with interest in the form of negotiations, requests for proposals, or active engagement covering substantially all of the remaining space. ERVs have increased meaningfully, especially so for Thirty High, which is due for sectional completion over the summer. With completion nearing, this is now also seeing strong customer engagement, we expect this to translate into good leasing activity over the next few months. In total, we now expect these projects to generate GBP 63 million of net effective rent once let, with an associated incremental GBP 43 million pound of annualized interest expense. Based on current momentum, we continue to expect all projects to lease up within around 12 months of completion, consistent with previous guidance, which will drive strong earnings growth for FY 2028 in particular. Turning now to capital allocation, we continue to base our capital allocation decisions on this clear framework, which is underpinned by our commitment to retain our strong balance sheet. This framework looks at how our investment decisions contribute to income and EPS growth in the short term, and how they shift our portfolio mix such that it can continue to deliver sustainable income and EPS growth for the longer-term. We constantly monitor for changes in risk and return prospects. At this stage, our priorities for the next 12-18 months remain broadly unchanged. As such, we will continue to explore opportunities to recycle capital out of lower returning assets, including offices, as we have done over the past year, and we will continue to prioritize investment into retail, given the high income returns and attractive income growth on offer. To create capacity for this, we do not plan to commit any meaningful capital to new development over this period, and that means that our net debt to EBITDA ratio will reduce meaningfully. Based on this framework, we've had an active year in terms of capital recycling. Our largest disposal was Queen Anne's Mansions. This was an asset that generated zero total return despite its high short-term income profile, as the valuation depreciated exactly in line with every quarterly rent receipt until the end of the lease, at which point the asset requires substantial redevelopment. Aside from the impact of turning the residual finance lease income into a capital receipt up front, this sale has essentially no impact on earnings and de-risked the remaining value of the site by transferring planning risk for a change of use to the buyer. We also sold two pre-development assets, which were generating a negative income return and would have required over GBP 400 million of CapEx to build out, as well as 4 retail parks and two smaller offices in London. All in all, this means that we sold just over GBP 700 million of assets which were generating limited or no return. This came at a cost to NTA of 1.1% when comparing sales proceeds to 2025 book values, and that was reflected in our half year numbers, but it's in line with the goal of our capital allocation framework. It significantly enhances our future income and EPS growth prospects. As we prioritize investment into retail, we are not planning to commit any meaningful capital to new development over the next 18 months. In London, we expect office rents to continue to grow, but as we have demonstrated over the past year, our existing portfolio is very well placed to capture this growth. Taking into account the materially higher risk involved, we do not believe that returns for new office development offer a sufficient premium versus our high quality existing portfolio to justify selling existing offices to fund the development of new ones. In residential, we continue to view the long-term demand supply and balance as compelling and are drawn to the long-term characteristics of higher inflation-linked income growth and lower cyclicality. Development viability for residential remains challenging, but over the past year, we have made substantive positive progress in improving the viability of our build-to-rent pipeline with proactive public sector support an important enabler, such as the government and GLA's package of acceleration measures for London. We can now see a potential route to viability for the most progressed of our projects, and in the year ahead, we'll seek to bottom out whether or not these projects are capable of proceeding. CapEx spend will remain very limited as we do so, and holding costs are low, but we continue to consider the time investment to be worthwhile. If we are able to secure viable returns, lead times are still such that the earliest start dates would be late 2027. As a result, our committed development exposure will reduce to less than 2% of portfolio value by the summer, down from on average around GBP 1 billion, closer to 10% over the last couple of years. It will likely stay at this level for the near future, but even over the longer-term, it will remain well below where it's been historically as we move to a structurally lower level of capital tied up in development. Supported by the positive outlook for rent and interest rates, investment market activity in both office and retail recovered steadily across 2025 and into the first few months of 2026. It's too early to assess what the longer-term impact of the Middle East conflict on this growing momentum might be. We are mindful that the renewed uncertainty around interest rates could impact investor decision-making in the near-term. It is worth stressing, however, that interest rates are only one factor, and others, such as confidence in rental growth prospects and returns relative to alternative options, are all stronger than they were a year ago. For us, the near-term focus in capital recycling remains unchanged. We will aim to continue to monetize further pre-development assets as these generate zero income return and would require significant CapEx to build out. We will also look to monetize further capital in offices as the potential upside from recycling capital into major retail destinations at around a 200 basis points higher net effective income yield and higher income growth is meaningful. We will, however, be a disciplined seller. We remain highly selective on quality, price, and CapEx risks in retail investment, which is why we chose not to progress any opportunities last year. We do, however, have decent visibility on future opportunities which are likely to come to the market over the next year or two. Capital rotation remains an important part of our longer-term strategy, but we are not reliant on this to drive growth, as around 80% of our potential EPS growth by FY 2030 is driven entirely by our existing portfolio and platform. With that, I will now hand you over to Vanessa. Thank you, Mark, and good morning. It has been another positive year for Landsec, driven by the quality of our portfolio and strong operational execution. With occupancy and rental growth at record highs, our growing reversion gives us good visibility on future income growth. It leaves us well-placed to accelerate EPS growth over the near-term. In financial year 2026, like-for-like income was up 4.6%. Overheads reduced significantly. As a result, our EPS increased 2.2% despite the 1.8% EPS impact from the earlier than planned sale of Queen Anne's Mansions. That supported a 2% increase in the dividend. Portfolio valuation was up 1.2%, with NTA per share up 0.9% for the year. 2.2% in the second half. We also reduced net debt by almost GBP 100 million, taking our LTV lower to 38.7% and reducing our net debt to EBITDA to 8.4x. With under GBP 200 million of development CapEx still to come, net debt to EBITDA should reduce meaningfully in the near-term as we lease up our new developments. Our balance sheet remains in a strong position. The main driver of that performance was strong like-for-like rental growth, with growth of 4.6% well ahead of our initial guidance, and it was in line with our revised guidance that we gave in November. Office and retail, which together represent over 90% of our income, both performed strongly with growth of 6% and 5.5% respectively. Occupancy in both portfolios reached new highs, our focus on efficiency helped us to lift our operating margin by 160 basis points to 87.1%. At the same time, uplifts on relettings and renewals virtually doubled to 15%, showing the growing reversion across the portfolio. Customer demand remains strong, and that continues to support further growth. Our office portfolio is now 99% full, so future like-for-like growth in offices will mainly come from capturing the reversion at lease events. While we expect office growth to moderate a little, in the year ahead, we still expect 3%-5% like-for-like income growth overall. The second key driver of earnings was a continued reduction in overhead costs. These were down 15% last year to GBP 62 million, well below our guidance of below GBP 70 million. In fact, we have already delivered our financial year 27 target of reducing our overheads to the low GBP 60 million. That improvement reflects the investments that we have made in data and technology over the last few years, which are now helping to automate core processes and improve our insights to drive further value. Taken together, overhead costs are down more than GBP 20 million over the last three years and are now at their lowest level in over 20 years. Looking ahead, we expect overheads to stay in the low GBP 60 million, with further efficiencies offsetting inflation, which means most of our income, more of our income will flow through to earnings and dividends. That earnings growth is also supported by our resilient funding profile. Our 8.6-year average debt maturity is the longest in the U.K. REIT sector, and it's twice as long as the average for the rest of the sector. We also have no need to refinance debt until 2028, and 89% of our debt is fixed or hedged. Our average cost of debt is 3.6%, and this will rise only gradually over time. Because our maturities are so long dated, we expect average debt costs to stay comfortably below the marginal cost of borrowing well beyond the next decade. That gives us strong protection from interest rate volatility. You can see the benefit of those three key drivers clearly in this year's EPS bridge. Like-for-like income growth of GBP 21 million added GBP 0.028 to EPS, and GBP 11 million of overhead savings added a further GBP 0.015, more than offsetting the like-for-like increase in finance cost. The year-over-year movements in other items reduced EPS by GBP 0.015, which was driven by two factors. The benefit from the recovery of previously provided bad debts normalizing to GBP 2 million, following an increase in the prior period, while surrender receipts were also minimal at just GBP 4 million. Both items now have only a minimal EPS benefit, we don't expect a meaningful impact from them in the future. Almost all of this year's income was regular recurring rental income with little benefit from one-off receipts. Regular investment activity had a net impact of GBP 0.003. EPS was up 4% before the effect of the earlier than planned disposal of QAM. That was at the top end of our initial guidance. Including this disposal, EPS was up 2.2%. The trends behind this strong operational performance remain very much in place. The near-term outlook for EPS growth is positive. As we guided in November, we expect EPS this year to be stable versus last year, with underlying growth offset by the annualized impact of the QAM sale, which has a 4% impact on EPS. Given the momentum that we have today, we expect EPS growth in the financial year 2028 to be in the high single-digits. That comes from continuing to capture our growing reversion and from leasing up our recent London office developments. As Mark said, demand for the space is strong, and we are already making good leasing progress. We typically assume that developments lease up within a 12-month period of completion whilst we stop capitalizing the interest as soon as the project's complete. That timing gap is, between incurring the interest and receiving the full income means we expect a temporary earnings drag from these developments in this financial year of between GBP 6 million-GBP 8 million. This should be more than offset the following year as these projects are expected to add GBP 20 million to earnings once they're fully let, supporting high single-digit EPS growth in financial year 2028. This is also a key part of the meaningful reduction in net debt to EBITDA that we expect over the next two years. Our current ratio reflects the fact that net debt includes GBP 1 billion of capital employed in our recent London office developments, but we received virtually no income from these developments last year, as three of them have only recently completed, and Thirty High is due to complete in the next few months. We're not planning to start any new development in the near future, and we're reducing our investment in pre-development assets. As we continue to capture reversion in our existing portfolio and lease up the developments, we expect net debt to EBITDA to fall below 7x within the next 2 years without material disposals. The strong capital base this provides is further underpinned by our other balance sheet metrics. Portfolio valuation was up 1.2%, helped by leasing activity that drove 6.4% ERV growth, the highest level in nearly 20 years and comfortably ahead of guidance. Yields were virtually stable, although the benefit of that strong ERV growth was offset by two isolated factors. These were the increase in business rates at Piccadilly Lights, which I mentioned six months ago, and a valuation reduction in office development assets due to higher build costs. Together, these two factors reduced the overall portfolio valuation by 1.1%. The disposal of around GBP 700 million of assets which generated limited or no returns had a 1.1% cost to NTA in total accounting return, as reflected in our half-year results. Even so, NTA was up 0.9% for the year and 2.2% in the second half. With net debt down nearly GBP 100 million, LTV reduced to 38.7%. We recognize that renewed uncertainty around global interest rates could affect investment markets in the near-term. Over the long run, income growth drives value growth in real estate. The record rental growth across our portfolio shows that upside continues to increase. We remain well-placed to accelerate EPS growth over the next few years. In November, we raised our outlook for potential earnings per share for financial year 2030 from GBP 0.60-GBP 0.62. Today, we reiterate that outlook. Let me briefly talk through the moving parts. Starting with last year's GBP 0.514, the sale of QAM has a residual EPS impact this year of GBP 0.02. The largest driver of future EPS growth continues to be capturing the growing reversion in our existing portfolio. Over the last four years, we have delivered 4% compound annual growth in like-for-like net rental income. Over the same period, the reversionary potential in offices has tripled to 17%. Uplifts in retail lettings and renewals have also grown to 15%. We have clear visibility on delivering our outlook, which assumes around 4% growth in like-for-like income per annum from here. Having now delivered our targeted overhead savings, the second-largest contributor is leasing up our current London office developments, which will add around GBP 0.03. Our recently completed schemes are already 54% let with strong interest in the remaining space, pushing ERVs higher. This is another area we have good visibility. Further reducing capital employed in low or non-yielding pre-development assets will add around GBP 0.01 per share through interest cost savings. Whilst global interest rates have increased since November, the impact on our future earnings growth is largely mitigated by our long dated maturities and hedging profile, and further offset by the increase in the ERV on both our existing portfolio and recent developments. Future asset rotation gives us further upside as we plan to recycle more capital out of lower return assets and invest around GBP 1 billion in major retail destinations. Our planned recycling from offices into residential is broadly EPS neutral over this period, with the EPS benefit coming beyond financial year 2030. We remain well-placed to deliver on average 5% EPS growth per year between now and financial year 2030, and that is on top of our existing strong income return of 5.8% on NTA. Around 80% of that growth comes from our existing portfolio and platform, so we are not reliant on investment market activity to deliver attractive EPS growth. As development exposure is coming down, our risk profile is reducing, leaving us well-placed to deliver substantial shareholder value. With that, I will hand back to Mark. Thank you, Vanessa. I'll now wrap up with a summary of what you can expect from us in the year ahead, where we see the differentiation and opportunity for Landsec, and then we'll open to Q&A. Over the last few years, we have actively positioned Landsec for a higher inflation, higher interest rate environment. The updated strategy that we set out just over a year ago encapsulated this, as it clearly set out our primary focus as being delivering sustainable income and EPS growth for our shareholders. All our priorities and decisions flow from that, whether that's the decision to materially reduce our development exposure, our proactive approach to reducing overhead costs, or taking advantage of market windows to term out debt, or indeed repositioning and refining our portfolio. Over the last five years, we sold nearly GBP 4 billion of largely mature assets and reinvested a broadly similar amount in high quality new acquisitions and well-timed developments. This resulted in the two irreplaceable portfolios and best-in-class platforms that we have today. Our focus now is on maximizing the potential of these by driving continued like-for-like income growth and leasing up our latest developments. We aim to supplement this by rotating further capital out of offices into retail over time, yet the contribution to EPS growth from this is relatively modest compared to the upside embedded in our existing portfolio. We will time this as we judge market conditions to be most suitable. Meanwhile, our current capital employed in residential is low and focused on high quality opportunities. We're focused on securing viability for these projects as the longer-term fundamentals of this space remain attractive and are worth the effort. CapEx here in the year ahead will be minimal. All this means that our differentiation remains clear. Our primary focus on sustainable income and EPS growth provides absolute clarity across our entire business. Our clear capital allocation framework means we are rational about investment decisions in pursuit of this financial objective as we move to an even stronger capital base. At the same time, customer demand remains high. Our occupancy is up to a two-decade high. Rents are rising at their fastest pace in nearly 20 years, which adds to our growing reversion and means the upside in terms of future income growth is abundantly clear. As our overhead costs are now down to a 20-year low, with our savings target hit a year ahead of schedule, this top line growth will increasingly flow through to an acceleration in EPS growth. Landsec is now positioned with a lower risk profile and a clearer, stronger growth outlook. With an existing income return at NTA of 5.8%, the potential to deliver around 5% EPS growth per year between now and FY 2030 supports an attractive total return outlook for shareholders. Ladies and gentlemen, thank you very much. I'm now going to open up for Q&A. As usual, we'll start with Q&A here in the room. We have handheld mics, if you could just wait for a mic after you've raised your hand. Then I'll move to questions from anyone attending on the call, and finally, the webcast. First question, just stand here on the right, and then in the middle with Paul at the back there. Three rows back. Morning. It's Oliver Woodall from Kolytics, wondering if you could provide just a bit more color on what needs to change to trigger more attractive risk-adjusted returns, in your view, for residential developments to become more viable. It really boils down to one thing, which is public sector policy support. If I take the most advanced of our projects, the O2 Centre Finchley Road, which has a detailed planning set in place but has a consent with a 35% affordable housing requirement and full Community Infrastructure Levy charges, that project isn't viable on that basis. We had an announcement from the government and GLA at the back end of last year, consulting on a package of acceleration measures, which were finalized in March of this year, that for certain projects that can hit a timetable of delivery, which would include Finchley Road, reduces the affordable housing from 35%-20% and effectively halves the CIL charge. Those two things together, we believe, get that project to a level that would be around a level of that we think supports viability. We've got to bottom out build cost and design to validate that. As I said in my comments on the call, we're spending very little money on these projects in the next year ahead, and I think the objective has to be to conclude whether or not these projects can get to viability. It's primarily policy support. Okay. Thank you. Just one more. I wonder if you could provide any update on conversations relating to the transaction market for major retail assets and any changes there, given elevated bond yields and things like that? Yeah. I think we comment earlier and said out in the statement that we've got visibility. We think of something in excess of GBP 3 billion worth of prime catchment dominant retail assets that we expect to come to the market over the next one to two years. The next one that's likely to come forward will be the Metrocentre, which could be in the market as soon as this month. I think there is more investor interest in the sector. Clearly, the sort of stats that we've reported today don't go unnoticed. For the more significant lot sizes where you need to have a combination of access to capital, desire to own assets long-term, and operational expertise, I think there's much less likely competition around there. Given that you're talking about yields that are typically starting with a 7% and maybe even starting with an 8%, it's much less sensitive in terms of that upfront position to purely rates, and I think the level of growth is something people are getting more comfortable with. Thank you. If we just go to Paul here in the middle, and then there's a couple just back from there. Thanks very much. Paul May from Barclays. Just a couple of questions. Three, actually. Two are linked. Obviously, you clearly moved away from most valuation-based metrics, with EPS instead of NAV being your focus, net debt to EBITDA instead of LTV seemingly a greater focus for you. You still focus on ERVs, as some might call them, elusive rental values. Why are you not reporting on and just focusing on renting and leasing versus previous passing? The usual pushback being that, you know, rent on vacant space is an infinite uplift, surely just reporting on an absolute basis would be more relevant for the earnings-based metrics that you have. Linked to that is TSR, earnings yield plus earnings growth not more relevant than earnings yield at NAV plus earnings growth as a focus point for you. Okay. Was that three? That's two, and then there's another one. Oh, right. Okay. linked ones that was. When we set out with the strategy a year ago, I mean, we've spent a lot of time thinking about, you know, our responsibilities as a management team in terms of creating value for the long-term for our shareholders. A sector that's traded pretty much consistently at quite a wide discount to its NTA, to its implied value of its underlying assets. Focusing on that doesn't seem to be solving the conundrum. We focus much more on the quality of our income stream and our ability to grow that income stream sustainably over time, and that's driven everything that's in our strategy. That breaks down really into two things, the quality of the portfolio and the ability of the portfolio to drive quality income, you see that today in all of the 20-year highs and the rest of it. Our business model and our financing, and you can see that in terms of taking cost out of the business, so there's very little leakage now, 55 basis points of overhead as a percentage of value, turned out the debt twice the sector average, and not allocating capital to areas that we think are excessively risky relative to what we can get in current assets. For us, that focus on earnings and earnings growth is absolutely key. The total accounting return, which includes the sort of valuation movement, you know, we of course report that. For us to deliver value for our shareholders is how you create value from that portfolio rather than a six-month to six-month valuation of what it would theoretically be worth if you theoretically tried to sell all those assets individually at the same time into the market. Net debt to EBITDA, sorry, you touched on, it's a cash on cash measure. I think if you look at LTV, you could have two businesses with LTV of say 35%, one of which has got 20% of its portfolio in development with a lot of risk, and one of which has no development. The LTVs would look the same. I'd argue that the risk profiles of those two businesses, theoretical businesses are very different. By looking at net debt to EBITDA, we reflect the value or the reduction in risk that is inherent in leasing up a development program and not being dependent on lots of moving parts on development risk looking forward. Just linking that back to ERV, there's constant mention of that, and that seems to be the last fallback towards valuation type metrics rather than previous passing and rental uplift on previous passing. Yeah, I think we're sort of halfway there on that, if I must just say. On the retail side of the business, we haven't been reporting our reversionary potential based on ERVs for some time, largely because what's driving like for like growth are things like turnover income, commercialization income, which value has struggled to put a cap rate on and include within an asset value. There we are reporting the leasing relative to previous passing, and you've seen that move dramatically up to mid-teens now. We've probably had about 3.5 years of market value growth on a portfolio with roughly five-year average lease terms. There should be another 18 months of sort of super growth, if you like, in that underlying reversion before things start to lap more encouraging growth numbers. I think in office, it's a slightly different position because you've got much less variable numbers in the office rents. Obviously, we're virtually full within the portfolio. By disclosing a true market value of the rents today based on rental evidence, typically drawn from our own portfolio, I think that does give a robust indication of what's the gap between what it's leased at today and what it would be leased at in the market. You can then combine with the average lease term, see how that should translate into earnings growth over the next few years. We're sort of in a sort of halfway there on that, but we think it is a relevant disclosure, particularly on the office side. Okay. Just linking to the earlier question on the retail side. I mean, as a result of the Middle East conflict, obviously higher rates look like they're gonna be here to stay for even longer. Do you see potential for some of the retail assets that were on the market that I'm sure you guys were looking at, that fell away because the existing owners just thought, "Well, things are looking good. The operational performance is there. Rates were coming down or expected to come down." That's now changed. Do you think some of those assets could come back to the market at more realistic pricing for you to be more interested in them again? I wouldn't want to say that there are a lot of assets that we just thought were priced too expensively. We are a disciplined buyer. I think we're still expecting to see assets come to the market, as I mentioned, you know, GBP 3 billion or so that we would see visibility of. I think it is fair to say they're in the hands of owners that are not natural long-term owners that will be looking at what's the best way of crystallizing an exit that gives them value for their investors. They must be looking at execution risk in a higher cost of capital world, that's got to play into their thinking. We've got no evidence today of exactly what's happening on the ground, but I think, you know, what you suggest, you know, makes sense to me. Perfect. Thanks very much. Thank you. I think there was a just behind one row. Oh, sorry. That was you next, Adam. Sorry. That's it. Thanks. Yeah, please. It's Bjorn Zietsman from Panmure Liberum. Two questions. You mentioned you're not reporting reversion on the retail portfolio. We can calculate it, how much reversion are you seeing within your retail portfolio? The second question, just over and above reversion, how much like for like rental growth are you assuming to achieve your 2030 EPS targets? In terms of what reversion we're seeing on retail, right now, we're for the year just ending, we were 15% ahead of previous passing. As I mentioned a moment ago, I think there's further ERV growth to go because we've effectively got 3.5 years of growth that we've seen since market rents turned positive to in-place rents. There should be another 18 months before we start lapping with an average lease term of five years. We flag on the retail side an expectation to deliver between 4.5% and 7% like for like income growth between now and 2030. Combination of capturing reversion, growing turnover rent, commercialization income, digital media, car charging, events, et cetera, and then a small number of CapEx projects. That's assuming an ERV growth number that would be in the region of 3%-4%, below what we're currently seeing at the moment. It would be a similar story in terms of ERV growth expectations on the office portfolio as well. I don't think we're making any particularly significant or aggressive assumptions in further market growth from here. If you look at the office portfolio, 17% reversionary, average lease term of around six years. You've sort of got 3% per annum roughly baked in already. I think we would be underwriting around 3%-4%. You know, as we've said, ERV growth, we expect to see that grow again at that sort of level for the year ahead. Just turn to Adam. You've got Mike. Good morning. Adam Shapton from Green Street. One on the retail opportunity set, and you've been very clear about your views of the recent market and the future investment market, how that, how that might fall in your favor. Just a point of clarification. For the opportunity set you see, are any of those likely to come with significant near-term CapEx needs to capture your target returns? So is it you spend GBP 800 million and maybe there's another GBP 100 million-GBP 250 million on top of that in the near-term? I would say the majority of those will come with decent amounts of CapEx requirements that we would price into our. In the near-term. relatively near-term, I would say on a, on a three- to five-year basis, we would be looking to acquire things and reposition and, you know, so, and we looked at a couple of assets last year. We didn't proceed. Couple of the ones that we chose not to bid on had, we felt, quite significant maintenance CapEx backlogs. About the sort of CapEx chart you showed, we could imagine sitting here in two years' time, you've acquired GBP 600 million-GBP 800 million of retail, and there's a CapEx chunk for that on top. I think the way we would look at that, our GBP 1 billion in retail, there's GBP 200 million of CapEx on our existing assets. The other GBP 800 million, I think we would be factoring in CapEx as part of that. We're not gonna be spending money and then taking on a very significant CapEx liability that we haven't priced in. Thank you. You very sensibly, proactively answered the share buybacks question in your statement this morning. The clear inference from that is that your return investment opportunities are cheaper than your shares today, is your view. Does it follow then that you're open-minded about issuing equity to part fund these retail acquisitions to keep at the very least leverage neutral or even a reduction in leverage if shopping centers are cheaper than your stock today? Yeah. So I think if you look at shopping centers, and let's assume there's a yield of somewhere in the mid-sevens. If you adjust for leverage, I think that gets you know, consistent level of leverage. I think that implies an income return on equity of nine, which is broadly in line with where the shares trade today. It's not a significant delta, but provided the right quality of assets are there and the there's scarcity that is gonna underpin longer, you know, better long-term growth characteristics, we think that's the better use of capital. In terms of raising capital to do something, if it's something that is the right quality of asset and it is growing earnings, then it's certainly something that we would consider. We're not going to dilute earnings across an existing portfolio for the sake of adding a nice asset. Okay. Understood. Thank you. Morning. It's Zachary Gauge from UBS. A couple of questions along fairly similar themes. Firstly, mostly on capital allocation. The CMD last February, you said in the next one to three-year plan, you expect to fund GBP 800 million of the shopping centers from disposals. Should we still be thinking that in two years' time there'll be an additional GBP 800 million deployed into shopping centers? Related to that, how flexible will you be on pricing on the office disposals, given what's happened to government bond yields and the political situation since the end of the reporting period? Then secondly, just to wrap up on the residential piece. If I understand correctly, you're essentially saying, and you've got 12 months to get viability working or not working. If it's not working in 12 months, is that sort of the end of residential development, and we should be thinking about how else that capital might be deployed? Yeah. I'll take those in reverse order. With respect to the recycling, I might ask Vanessa to talk to a bit more specifically what's assumed in our guidance around recycling over the next few years. With respect to residential, I think we are at a point now where we've got 9,000 units across four very high quality sites. As we've mentioned, viabilities currently are below a level that would make sense for us. They do all have planning consents in place, and we are on the most progressed of those in active and I think positive constructive engagement with public sector partners. I think on those projects, we will know where we can get to in terms of net yields on costs and IRRs over the next six to 12 months. If those numbers don't stack up, we're not gonna put capital into those projects. It would be crazy to do so. I think as I stand here today, there is a route through to that viability, that's why we're investing the time. We do think it's worthwhile, they're very strong projects, we think there's the basis of quite significant competitive advantage. If we can't get the returns to a level that makes sense, you know, you can't have a capital allocation framework as the one we set out then decide, actually, no, we wanna get on with these projects over here because we've had them for ages. I think with respect then to the recycling, I think the GBP 800 million is still our objective. Within two years, I think, you know, perhaps we will. Perhaps it'll be slightly longer than that, given those opportunities. Just with respect to earnings guidance, perhaps Vanessa could give a bit of clarity on what we're assuming. Yeah. We are targeting that rotation, as you say, across to financial year 2030. What we are assuming is we're splitting the GBP 800 million of investment into new assets, roughly around the three-year period from financial year 2028, 2029 and 2030. That's what we, if you assume that. Where we've guided financial year 2027, we're not making significant assumptions in the 2027 guidance around investment into retail acquisitions. In financial year 2028, we're assuming we get a third of that delivered. That would be around GBP 250 million-GBP 300 million of assumption within our guidance, which equates to probably around GBP 5 million or GBP 6 million of upside on earnings. It's not a significant amount in the financial year 2028 guidance. If you look at then the financial year 2030 potential that we have, 20% of that growth comes from that rotation. Therefore, you can see that we've shown that 80% remaining actually comes from our own portfolio. That's the differential between the two ends of those spectrums. Thank you. Zach? Sorry, just on the yields versus office yields that you would potentially move to fund in the current environment. Excuse me. I think that the 150-200 basis point spread between a true net effective yield on both sides of the ledger is still the sort of level that we would look at. Just to take that as an opportunity to stress and remind people about net effective yields. The net effective yield is what goes through our P&L account. It's different from the headline rents on offices because of the typically 20% of incentive that is offered upfront that we spread over the lease term. Typically, the net effective yield on an office is 20% lower than the headline yield that might be quoted on a transaction. If you sell at a yield of six, you're probably selling at a P&L yield of five. Whereas in retail, incentives tend to be more like 10% now, so less significant. Of course, in residential, essentially no incentives at all. Oh, sorry, one further question over here. There's a race with microphones. No. Morning. Ashnaa Vyas from Deutsche Numis. I just had one question on the use of agentic commerce and AI in your shopping centers, and if you guys are investing in it and what kind of spend you're putting in or thinking about putting in. Just on the back of that, what the experience is for your tenants using that and the end user, which is the consumers. Yeah. I think most of the investment in AI for consumers and more immersive retail environments, that CapEx is in the main coming from the retailers. I think that's what you're seeing in retailers deciding to sign for much larger stores and then investing within those store fits. Of course, you know, I don't know exactly where their investment numbers are, but on the basis that if I, you know, give the next example in Bluewater, I think that's an 11-year term certain on that lease with a turnover component to the lease as well. They're clearly looking at long periods of time to recoup investment. With ourselves, we're always looking at how we improve and enhance the environment and how we use data and AI to track performance and consumer behaviors and movements within our centers, but it's not a significant level of investment and not something that we have planned for investment at a significant level. I don't think there are any more questions in the room. Mark, I was gonna let you ask a question, but as you've decided you don't want to, that's just fine. I'm gonna go to anyone on the call now. Thank you. I would like to remind everyone over the phone to ask the question. Please press star one on your telephone keypad. There are no questions. Okay waiting at this time. Presenters, you may continue. Great. Thank you. Just going to go to one question on the webcast, which has come from Mike Pr. How does net effective rent on the BP pre-let at Timber Square compare with the underwrite? There's two questions. I'll cover that one first. That was a little way ahead of the underwrite. Probably a mid-single digit level ahead of what we'd assumed originally. The growth in Bankside has not been as significant as we've seen in Thirty High, for example. Still very encouraging, of course, with the quality of the occupier there. You know, that's also very additive to overall value. I think a very positive outturn. Sorry, I'm just trying to scroll back through here. Then is the residential operating platform still intended to be established organically or is it TBA? I think that will be part of the decisions we make over the next 12 months about the viability of developments. We would need to be confident of what the underlying operating solution was. As I think we've said in past, sort of conceptually, I don't think it's necessarily moving to the final answer immediately. It could be that you work with private operators to run things whilst we subscale and then move to something in-house longer-term. That'll be a decision alongside the viability of those residential projects over the next year or so. Then a question from Kempen. Since the acceleration in technologies around AI, have you started to look differently at your office portfolio or change your strategy? I think our strategy remains the same within office, the reduction of GBP 2 billion of capital employed by 2030. That still leaves us with a very significant high quality office portfolio. As I mentioned in comments during the presentation, we see that as being an accelerant of the concentration of occupied demand on the very best space. I think it's unlikely we'll see any shift in our plans around development just given the elevated risk we see and the ability of capturing growth within the existing portfolio. It's not something I expect to see delivering resulting in a change in strategy. It is something which I think underpins a very positive growth outlook for the portfolio. I think at that point, that's hopefully covering all the Q&A. I appreciate you've had a lot of you, a number of presentations this morning. Thank you very much for taking the time to come along or to dial in. Have a good day.

Speaker 4: Very good. Well, ladies and gentlemen, good morning, and welcome to the presentation of Landsec's 2026 full year results. Landsec is in excellent shape. Customer demand for our places remains very high, and with supply increasingly constrained, occupancy across our portfolio has risen to its highest level in more than two decades. As a result, rental values continue to rise, now at the fastest pace in nearly 20 years. We've carried this momentum into the new financial year, with 1 million square foot of active occupier demand across our recent office projects, a record leasing pipeline in retail, and no signs of weakening demand arising from the Middle East situation. This supports continued strong income growth from here, and with that, an acceleration in EPS growth in both the near- and medium-term. Very good. very good Well, ladies and gentlemen, good morning, and welcome to the presentation of Landsec's 2026 full year results. well ladies and gentlemen good morning and welcome to the presentation of landsec's 2026 full year results Landsec is in excellent shape. landsec is in excellent shape Customer demand for our places remains very high, and with supply increasingly constrained, occupancy across our portfolio has risen to its highest level in more than two decades. customer demand for our places remains very high and with supply increasingly constrained occupancy across our portfolio has risen to its highest level in more than two decades As a result, rental values continue to rise, now at the fastest pace in nearly 20 years. as a result rental values continue to rise now at the fastest pace in nearly 20 years We've carried this momentum into the new financial year, with 1 million square foot of active occupier demand across our recent office projects, a record leasing pipeline in retail, and no signs of weakening demand arising from the Middle East situation. we've carried this momentum into the new financial year with 1 million square foot of active occupier demand across our recent office projects a record leasing pipeline in retail and no signs of weakening demand arising from the middle east situation This supports continued strong income growth from here, and with that, an acceleration in EPS growth in both the near- and medium- term. this supports continued strong income growth from here and with that an acceleration in eps growth in both the near- and medium- term For this year, as we previously guided, we expect reported EPS to be stable due to the impact of last year's sale of Queen Anne's Mansions, offsetting strong underlying growth. Based on our current momentum, we expect EPS for FY 2028 to grow by a high single-digit %. This means that we remain on track to deliver compound annual growth in EPS of around 5% between now and FY 2030. On top of an existing income return NTA of 5.8%, implies an attractive low double-digit total return annually for shareholders. Our operational performance has shown consistent growth over the last few years, despite the elevated uncertainty in the external macro environment throughout that period. This reflects the uniqueness and resilience of our high-quality portfolio and our market-leading operating platforms, with occupancy rising steadily to now 98%. For this year, as we previously guided, we expect reported EPS to be stable due to the impact of last year's sale of Queen Anne's Mansions, offsetting strong underlying growth. for this year as we previously guided we expect reported eps to be stable due to the impact of last year's sale of queen anne's mansions offsetting strong underlying growth Based on our current momentum, we expect EPS for FY 2028 to grow by a high single-digit %. based on our current momentum we expect eps for fy 2028 to grow by a high single-digit % This means that we remain on track to deliver compound annual growth in EPS of around 5% between now and FY 2030. this means that we remain on track to deliver compound annual growth in eps of around 5% between now and fy 2030 On top of an existing income return NTA of 5.8%, implies an attractive low double-digit total return annually for shareholders. on top of an existing income return nta of 5.8% implies an attractive low double-digit total return annually for shareholders Our operational performance has shown consistent growth over the last few years, despite the elevated uncertainty in the external macro environment throughout that period. our operational performance has shown consistent growth over the last few years despite the elevated uncertainty in the external macro environment throughout that period This reflects the uniqueness and resilience of our high-quality portfolio and our market-leading operating platforms, with occupancy rising steadily to now 98%. this reflects the uniqueness and resilience of our high-quality portfolio and our market-leading operating platforms with occupancy rising steadily to now 98% With our portfolio effectively full, the upward pressure on rents has continued to build, and uplifts in rent on relettings and renewals virtually doubled over the past year to 15%. As a result, we delivered 4.6% growth in like-for-like net rental income for the year, ahead of our initial guidance and a robust 4% compound annual growth over the last four years. Although the global macro outlook today is once again uncertain, the rapidly growing reversion in our high-quality portfolio means that the potential for future income growth is well underpinned regardless. Over the past few years, we have sought to reinforce this positive portfolio outlook through strategic discipline by actively positioning Landsec for a higher inflation, higher interest rate environment. With our portfolio effectively full, the upward pressure on rents has continued to build, and uplifts in rent on relettings and renewals virtually doubled over the past year to 15%. with our portfolio effectively full the upward pressure on rents has continued to build and uplifts in rent on relettings and renewals virtually doubled over the past year to 15% As a result, we delivered 4.6% growth in like-for-like net rental income for the year, ahead of our initial guidance and a robust 4% compound annual growth over the last four years. as a result we delivered 4.6% growth in like-for-like net rental income for the year ahead of our initial guidance and a robust 4% compound annual growth over the last four years Although the global macro outlook today is once again uncertain, the rapidly growing reversion in our high-quality portfolio means that the potential for future income growth is well underpinned regardless. although the global macro outlook today is once again uncertain the rapidly growing reversion in our high-quality portfolio means that the potential for future income growth is well underpinned regardless Over the past few years, we have sought to reinforce this positive portfolio outlook through strategic discipline by actively positioning Landsec for a higher inflation, higher interest rate environment. over the past few years we have sought to reinforce this positive portfolio outlook through strategic discipline by actively positioning landsec for a higher inflation higher interest rate environment Our average debt maturity of 8.6 years is now twice as long as the UK REIT sector average, which, combined with around 90% fixed rates, means our earnings are well protected against volatility in interest rates. We have brought our overhead costs down to their lowest level in 20 years, which means our future income growth flows through to earnings more readily. Our development exposure will be down to just 2% of our portfolio value by the summer, with no plans to add meaningfully to this in the near-term. With just GBP 185 million CapEx left to spend and no need to refinance any debt until 2028, we are in no way reliant on disposals or new financing to fund any commitments. Our average debt maturity of 8.6 years is now twice as long as the UK REIT sector average, which, combined with around 90% fixed rates, means our earnings are well protected against volatility in interest rates. our average debt maturity of 8.6 years is now twice as long as the uk reit sector average which combined with around 90% fixed rates means our earnings are well protected against volatility in interest rates We have brought our overhead costs down to their lowest level in 20 years, which means our future income growth flows through to earnings more readily. we have brought our overhead costs down to their lowest level in 20 years which means our future income growth flows through to earnings more readily Our development exposure will be down to just 2% of our portfolio value by the summer, with no plans to add meaningfully to this in the near- term. our development exposure will be down to just 2% of our portfolio value by the summer with no plans to add meaningfully to this in the near- term With just GBP 185 million CapEx left to spend and no need to refinance any debt until 2028, we are in no way reliant on disposals or new financing to fund any commitments. with just gbp 185 million capex left to spend and no need to refinance any debt until 2028 we are in no way reliant on disposals or new financing to fund any commitments Alongside a clearer, stronger growth outlook, we have actively now moved the business to a lower risk profile. All of this is reflected in another set of positive financial results. Driven by our strong like-for-like income growth and a 15% reduction in overhead costs, our 2.2% growth in EPRA earnings was at the top end of our guidance for the year, factoring in the 1.8% impact on EPS from the earlier than planned sale of QAM that was not part of our initial guidance, which gave rise to 2% growth in dividends. Our NTA per share was up 0.9% for the year, 2.2% in the second half, after having absorbed the 1.1% cost to NTA of selling over GBP 700 million of assets, which generated little or no return. Alongside a clearer, stronger growth outlook, we have actively now moved the business to a lower risk profile. alongside a clearer stronger growth outlook we have actively now moved the business to a lower risk profile All of this is reflected in another set of positive financial results. all of this is reflected in another set of positive financial results Driven by our strong like-for-like income growth and a 15% reduction in overhead costs, our 2.2% growth in EPRA earnings was at the top end of our guidance for the year, factoring in the 1.8% impact on EPS from the earlier than planned sale of QAM that was not part of our initial guidance, which gave rise to 2% growth in dividends. driven by our strong like-for-like income growth and a 15% reduction in overhead costs our 2.2% growth in epra earnings was at the top end of our guidance for the year factoring in the 1.8% impact on eps from the earlier than planned sale of qam that was not part of our initial guidance which gave rise to 2% growth in dividends Our NTA per share was up 0.9% for the year, 2.2% in the second half, after having absorbed the 1.1% cost to NTA of selling over GBP 700 million of assets, which generated little or no return. our nta per share was up 0.9% for the year 2.2% in the second half after having absorbed the 1.1% cost to nta of selling over gbp 700 million of assets which generated little or no return Whilst LTV was down slightly to 38.7% and net debt to EBITDA improved to 8.4x. We expect this to reduce to below 7x over the next two years, driven by the lease-up of our latest developments and continued like-for-like income growth. Combined with our lower cost base and strategic discipline, this means our ongoing income growth will increasingly flow through to an acceleration in EPS growth. There are two very clear trends that support our positive outlook. Firstly, whether it's in retail, driven by a need to maximize consumer reach efficiently, or in office, with a need to attract and retain the best talent, occupier demand is increasingly concentrated on the very best space. Secondly, with development viabilities under pressure, the supply of space of the right quality is very heavily constrained. Whilst LTV was down slightly to 38.7% and net debt to EBITDA improved to 8.4x. whilst ltv was down slightly to 38.7% and net debt to ebitda improved to 8.4x We expect this to reduce to below 7x over the next two years, driven by the lease-up of our latest developments and continued like-for-like income growth. we expect this to reduce to below 7x over the next two years driven by the lease-up of our latest developments and continued like-for-like income growth Combined with our lower cost base and strategic discipline, this means our ongoing income growth will increasingly flow through to an acceleration in EPS growth. combined with our lower cost base and strategic discipline this means our ongoing income growth will increasingly flow through to an acceleration in eps growth There are two very clear trends that support our positive outlook. there are two very clear trends that support our positive outlook Firstly, whether it's in retail, driven by a need to maximize consumer reach efficiently, or in office, with a need to attract and retain the best talent, occupier demand is increasingly concentrated on the very best space. firstly whether it's in retail driven by a need to maximize consumer reach efficiently or in office with a need to attract and retain the best talent occupier demand is increasingly concentrated on the very best space Secondly, with development viabilities under pressure, the supply of space of the right quality is very heavily constrained. secondly with development viabilities under pressure the supply of space of the right quality is very heavily constrained That's why our portfolio occupancy is now at its highest level since 2003, and ERVs are growing at their fastest pace since 2008. Prime commercial real estate is emerging as a clear winner in a tech-enabled world. In retail, the top 1% of retail destinations in the U.K. provide brands with access to almost 1/3 of all in-store retail spend. Unsurprisingly, therefore, this is where, for example, around 90% of all Apple, Inditex, Uniqlo, and Sephora stores are located. It is where 85% of our portfolio is located. Effective curation of the brands shoppers want drives growing footfall and consumer spend. This in turn results in higher demand for space from brands and so on. That's why our portfolio occupancy is now at its highest level since 2003, and ERVs are growing at their fastest pace since 2008. that's why our portfolio occupancy is now at its highest level since 2003 and ervs are growing at their fastest pace since 2008 Prime commercial real estate is emerging as a clear winner in a tech-enabled world. prime commercial real estate is emerging as a clear winner in a tech-enabled world In retail, the top 1% of retail destinations in the U.K. provide brands with access to almost 1/3 of all in-store retail spend. in retail the top 1% of retail destinations in the u.k provide brands with access to almost 1/3 of all in-store retail spend Unsurprisingly, therefore, this is where, for example, around 90% of all Apple, Inditex, Uniqlo, and Sephora stores are located. unsurprisingly therefore this is where for example around 90% of all apple inditex uniqlo and sephora stores are located It is where 85% of our portfolio is located. Effective curation of the brands shoppers want drives growing footfall and consumer spend. it is where 85% of our portfolio is located. effective curation of the brands shoppers want drives growing footfall and consumer spend This in turn results in higher demand for space from brands and so on. this in turn results in higher demand for space from brands and so on Over the past four years, sales in our destinations have grown by around 7x the U.K. national average, outperforming by a total 19 percentage points over that time. Brands continue to focus on our destinations when it comes to investing in fewer, bigger, better stores. Occupancy rises, rents grow. With replacement costs around double current values, new supply is and will remain effectively zero. In our offices, it's a similar story. There's roughly 900 million sq ft of office space across the U.K. With a 5 million sq ft portfolio, we own just 0.5% of the U.K. office market, and not just any 0.5%. Virtually all of that space is located in the two most highly valued locations in the country, the West End and the City, including Bankside. Over the past four years, sales in our destinations have grown by around 7x the U.K. national average, outperforming by a total 19 percentage points over that time. over the past four years sales in our destinations have grown by around 7x the u.k national average outperforming by a total 19 percentage points over that time Brands continue to focus on our destinations when it comes to investing in fewer, bigger, better stores. brands continue to focus on our destinations when it comes to investing in fewer bigger better stores Occupancy rises, rents grow. occupancy rises rents grow With replacement costs around double current values, new supply is and will remain effectively zero. with replacement costs around double current values new supply is and will remain effectively zero In our offices, it's a similar story. in our offices it's a similar story There's roughly 900 million sq ft of office space across the U.K. there's roughly 900 million sq ft of office space across the u.k With a 5 million sq ft portfolio, we own just 0.5% of the U.K. office market, and not just any 0.5%. with a 5 million sq ft portfolio we own just 0.5% of the u.k office market and not just any 0.5% Virtually all of that space is located in the two most highly valued locations in the country, the West End and the City, including Bankside. virtually all of that space is located in the two most highly valued locations in the country the west end and the city including bankside These locations consistently rank as number one or two of the top destinations in the world for international businesses as they provide the very best access to and conditions for talent. Even within these highly prized locations, we are significantly outperforming benchmarks as our occupancy of almost 99% is well ahead of the 93% for Central London as a whole. Meanwhile, net new supply is very limited, partly reflecting the well-understood challenges of build cost inflation and higher interest rates constraining development, but also space being taken offline or repurposed. For example, in Victoria, where around 45% of our London portfolio is located, expected new development supply over the next three years is almost entirely offset by the potential loss of space from offices which are in the process of being converted to alternative uses, such as residential or hotel. These locations consistently rank as number one or two of the top destinations in the world for international businesses as they provide the very best access to and conditions for talent. these locations consistently rank as number one or two of the top destinations in the world for international businesses as they provide the very best access to and conditions for talent Even within these highly prized locations, we are significantly outperforming benchmarks as our occupancy of almost 99% is well ahead of the 93% for Central London as a whole. even within these highly prized locations we are significantly outperforming benchmarks as our occupancy of almost 99% is well ahead of the 93% for central london as a whole Meanwhile, net new supply is very limited, partly reflecting the well-understood challenges of build cost inflation and higher interest rates constraining development, but also space being taken offline or repurposed. meanwhile net new supply is very limited partly reflecting the well-understood challenges of build cost inflation and higher interest rates constraining development but also space being taken offline or repurposed For example, in Victoria, where around 45% of our London portfolio is located, expected new development supply over the next three years is almost entirely offset by the potential loss of space from offices which are in the process of being converted to alternative uses, such as residential or hotel. for example in victoria where around 45% of our london portfolio is located expected new development supply over the next three years is almost entirely offset by the potential loss of space from offices which are in the process of being converted to alternative uses such as residential or hotel Rents for the best locations continue to rise with recent lettings across our existing Victoria estate now well in excess of GBP 100 a sq ft. The ongoing adoption of emerging technologies such as AI is only likely to accelerate consumers or customers' focus on the very best space. Back office and processing roles are set to reduce, the impact of this in central London is more than offset by the creation of new roles and indeed new businesses enabled by technology. There is the demand driven by large businesses concentrating their office space in vibrant business districts as opposed to out of town business park locations. A good example of this is our recent major letting at Timber Square to BP, which is consolidating much of its operations from just south of Heathrow into the center of London. Rents for the best locations continue to rise with recent lettings across our existing Victoria estate now well in excess of GBP 100 a sq ft. rents for the best locations continue to rise with recent lettings across our existing victoria estate now well in excess of gbp 100 a sq ft The ongoing adoption of emerging technologies such as AI is only likely to accelerate consumers or customers' focus on the very best space. the ongoing adoption of emerging technologies such as ai is only likely to accelerate consumers or customers' focus on the very best space Back office and processing roles are set to reduce, the impact of this in central London is more than offset by the creation of new roles and indeed new businesses enabled by technology. back office and processing roles are set to reduce the impact of this in central london is more than offset by the creation of new roles and indeed new businesses enabled by technology There is the demand driven by large businesses concentrating their office space in vibrant business districts as opposed to out of town business park locations. there is the demand driven by large businesses concentrating their office space in vibrant business districts as opposed to out of town business park locations A good example of this is our recent major letting at Timber Square to BP, which is consolidating much of its operations from just south of Heathrow into the center of London. a good example of this is our recent major letting at timber square to bp which is consolidating much of its operations from just south of heathrow into the center of london The drivers of occupier demand in central London, certainly for our assets, are encouragingly diverse. You can see this in the roughly 1 million sq ft of active demand across our latest developments. Customers more often than not see new technologies not as an opportunity to improve productivity and to grow, rather than simply as a trigger to reduce headcount and space requirements. In retail, customers expect the rise of AI and agentic commerce to put even more focus on the value of the physical experience and customer connection as part of a wider unified commerce ecosystem. Brands will need to invest more in their spaces to deliver the right experience, adding further weight to the fewer, bigger, better thesis. The drivers of occupier demand in central London, certainly for our assets, are encouragingly diverse. the drivers of occupier demand in central london certainly for our assets are encouragingly diverse You can see this in the roughly 1 million sq ft of active demand across our latest developments. you can see this in the roughly 1 million sq ft of active demand across our latest developments Customers more often than not see new technologies not as an opportunity to improve productivity and to grow, rather than simply as a trigger to reduce headcount and space requirements. customers more often than not see new technologies not as an opportunity to improve productivity and to grow rather than simply as a trigger to reduce headcount and space requirements In retail, customers expect the rise of AI and agentic commerce to put even more focus on the value of the physical experience and customer connection as part of a wider unified commerce ecosystem. in retail customers expect the rise of ai and agentic commerce to put even more focus on the value of the physical experience and customer connection as part of a wider unified commerce ecosystem Brands will need to invest more in their spaces to deliver the right experience, adding further weight to the fewer, bigger, better thesis. brands will need to invest more in their spaces to deliver the right experience adding further weight to the fewer bigger better thesis The fact that we opened or exchanged contracts with more leading expansionary brands such as Sephora, Uniqlo, Pull&Bear, Lefties and other Inditex labels over the past 18 months than any other U.K. retail platform simply highlights the enduring appeal of our destinations. In an environment that is changing rapidly, our edge is clear. We have two market leading platforms and an irreplaceable portfolio focused firmly at the very top end of the market where customer demand is strongest. Reflecting this, we've had another strong year in terms of operational performance. In retail, rental uplifts continue to trend higher, as shown here on the left, whilst occupancy is up 100 basis points to almost 98%, and that's the highest that it's been since the early 2000s. The fact that we opened or exchanged contracts with more leading expansionary brands such as Sephora, Uniqlo, Pull&Bear, Lefties and other Inditex labels over the past 18 months than any other U.K. retail platform simply highlights the enduring appeal of our destinations. the fact that we opened or exchanged contracts with more leading expansionary brands such as sephora uniqlo pull&bear lefties and other inditex labels over the past 18 months than any other u.k retail platform simply highlights the enduring appeal of our destinations In an environment that is changing rapidly, our edge is clear. in an environment that is changing rapidly our edge is clear We have two market leading platforms and an irreplaceable portfolio focused firmly at the very top end of the market where customer demand is strongest. we have two market leading platforms and an irreplaceable portfolio focused firmly at the very top end of the market where customer demand is strongest Reflecting this, we've had another strong year in terms of operational performance. reflecting this we've had another strong year in terms of operational performance In retail, rental uplifts continue to trend higher, as shown here on the left, whilst occupancy is up 100 basis points to almost 98%, and that's the highest that it's been since the early 2000s. in retail rental uplifts continue to trend higher as shown here on the left whilst occupancy is up 100 basis points to almost 98% and that's the highest that it's been since the early 2000s Growth in like-for-like income rose to 5.5%, we signed or enlisted as hands on GBP 49 million of leases on average 11% above ERV. This drove an acceleration in ERV growth to 5.8%, that's comfortably ahead of our initial guidance of similar growth to last year's 4%, it's the highest rate of growth in over 20 years. This further adds to our future income growth potential. Building on the unique data and insights that our market leading U.K. platform provides, we continue to invest in creating experience-led places with a record number of new lettings. That means footfall in our locations is growing well ahead of the U.K. market average, we are gaining market share. Growth in like-for-like income rose to 5.5%, we signed or enlisted as hands on GBP 49 million of leases on average 11% above ERV. growth in like-for-like income rose to 5.5% we signed or enlisted as hands on gbp 49 million of leases on average 11% above erv This drove an acceleration in ERV growth to 5.8%, that's comfortably ahead of our initial guidance of similar growth to last year's 4%, it's the highest rate of growth in over 20 years. this drove an acceleration in erv growth to 5.8% that's comfortably ahead of our initial guidance of similar growth to last year's 4% it's the highest rate of growth in over 20 years This further adds to our future income growth potential. this further adds to our future income growth potential Building on the unique data and insights that our market leading U.K. platform provides, we continue to invest in creating experience-led places with a record number of new lettings. building on the unique data and insights that our market leading u.k platform provides we continue to invest in creating experience-led places with a record number of new lettings That means footfall in our locations is growing well ahead of the U.K. market average, we are gaining market share. that means footfall in our locations is growing well ahead of the u.k market average we are gaining market share This drives sales growth that in turn attracts more leading brands, which alongside enhancing our social eating, dining and leisure offer, leads to higher footfall, which then drives higher sales, and so on. As a result, we remain confident in our potential to deliver 4.5%-7% growth in net rental income per year from our existing retail platform over the next few years, driven by capturing the growing reversion in our portfolio, growing turnover rents and commercialization income, and selective CapEx investments into highly accretive smaller projects. In office, occupancy is now nearly 99%. Uplifts on relettings and renewals increased to 14% compared to 10% for the prior year, and this drove 6% growth in like-for-like income. This drives sales growth that in turn attracts more leading brands, which alongside enhancing our social eating, dining and leisure offer, leads to higher footfall, which then drives higher sales, and so on. this drives sales growth that in turn attracts more leading brands which alongside enhancing our social eating dining and leisure offer leads to higher footfall which then drives higher sales and so on As a result, we remain confident in our potential to deliver 4.5%-7% growth in net rental income per year from our existing retail platform over the next few years, driven by capturing the growing reversion in our portfolio, growing turnover rents and commercialization income, and selective CapEx investments into highly accretive smaller projects. In office, occupancy is now nearly 99%. as a result we remain confident in our potential to deliver 4.5%-7% growth in net rental income per year from our existing retail platform over the next few years driven by capturing the growing reversion in our portfolio growing turnover rents and commercialization income and selective capex investments into highly accretive smaller projects. in office occupancy is now nearly 99% Uplifts on relettings and renewals increased to 14% compared to 10% for the prior year, and this drove 6% growth in like-for-like income. uplifts on relettings and renewals increased to 14% compared to 10% for the prior year and this drove 6% growth in like-for-like income We signed or in solicitors' hands on GBP 21 million of lettings, on average 7% ahead of ERV, and this drove 7% growth in rental values, well ahead of our guidance of similar growth to the 5% for the prior year, and the highest level that we've seen in our office portfolio since the EU referendum 2016. Our portfolio is effectively full, yet our reversionary potential has jumped now to a high 17%, and the potential income upside on lease events remains clear. This strength in customer demand bodes well for our latest London office completions, and we've made strong progress in terms of leasing since our half year results. Our three recently completed projects are now 54% let, with interest in the form of negotiations, requests for proposals, or active engagement covering substantially all of the remaining space. We signed or in solicitors' hands on GBP 21 million of lettings, on average 7% ahead of ERV, and this drove 7% growth in rental values, well ahead of our guidance of similar growth to the 5% for the prior year, and the highest level that we've seen in our office portfolio since the EU referendum 2016. we signed or in solicitors' hands on gbp 21 million of lettings on average 7% ahead of erv and this drove 7% growth in rental values well ahead of our guidance of similar growth to the 5% for the prior year and the highest level that we've seen in our office portfolio since the eu referendum 2016 Our portfolio is effectively full, yet our reversionary potential has jumped now to a high 17%, and the potential income upside on lease events remains clear. our portfolio is effectively full yet our reversionary potential has jumped now to a high 17% and the potential income upside on lease events remains clear This strength in customer demand bodes well for our latest London office completions, and we've made strong progress in terms of leasing since our half year results. this strength in customer demand bodes well for our latest london office completions and we've made strong progress in terms of leasing since our half year results Our three recently completed projects are now 54% let, with interest in the form of negotiations, requests for proposals, or active engagement covering substantially all of the remaining space. our three recently completed projects are now 54% let with interest in the form of negotiations requests for proposals or active engagement covering substantially all of the remaining space ERVs have increased meaningfully, especially so for Thirty High, which is due for sectional completion over the summer. With completion nearing, this is now also seeing strong customer engagement, we expect this to translate into good leasing activity over the next few months. In total, we now expect these projects to generate GBP 63 million of net effective rent once let, with an associated incremental GBP 43 million pound of annualized interest expense. Based on current momentum, we continue to expect all projects to lease up within around 12 months of completion, consistent with previous guidance, which will drive strong earnings growth for FY 2028 in particular. Turning now to capital allocation, we continue to base our capital allocation decisions on this clear framework, which is underpinned by our commitment to retain our strong balance sheet. ERVs have increased meaningfully, especially so for Thirty High, which is due for sectional completion over the summer. ervs have increased meaningfully especially so for thirty high which is due for sectional completion over the summer With completion nearing, this is now also seeing strong customer engagement, we expect this to translate into good leasing activity over the next few months. with completion nearing this is now also seeing strong customer engagement we expect this to translate into good leasing activity over the next few months In total, we now expect these projects to generate GBP 63 million of net effective rent once let, with an associated incremental GBP 43 million pound of annualized interest expense. in total we now expect these projects to generate gbp 63 million of net effective rent once let with an associated incremental gbp 43 million pound of annualized interest expense Based on current momentum, we continue to expect all projects to lease up within around 12 months of completion, consistent with previous guidance, which will drive strong earnings growth for FY 2028 in particular. based on current momentum we continue to expect all projects to lease up within around 12 months of completion consistent with previous guidance which will drive strong earnings growth for fy 2028 in particular Turning now to capital allocation, we continue to base our capital allocation decisions on this clear framework, which is underpinned by our commitment to retain our strong balance sheet. turning now to capital allocation we continue to base our capital allocation decisions on this clear framework which is underpinned by our commitment to retain our strong balance sheet This framework looks at how our investment decisions contribute to income and EPS growth in the short term, and how they shift our portfolio mix such that it can continue to deliver sustainable income and EPS growth for the longer-term. We constantly monitor for changes in risk and return prospects. At this stage, our priorities for the next 12-18 months remain broadly unchanged. As such, we will continue to explore opportunities to recycle capital out of lower returning assets, including offices, as we have done over the past year, and we will continue to prioritize investment into retail, given the high income returns and attractive income growth on offer. To create capacity for this, we do not plan to commit any meaningful capital to new development over this period, and that means that our net debt to EBITDA ratio will reduce meaningfully. This framework looks at how our investment decisions contribute to income and EPS growth in the short term, and how they shift our portfolio mix such that it can continue to deliver sustainable income and EPS growth for the longer- term. this framework looks at how our investment decisions contribute to income and eps growth in the short term and how they shift our portfolio mix such that it can continue to deliver sustainable income and eps growth for the longer- term We constantly monitor for changes in risk and return prospects. we constantly monitor for changes in risk and return prospects At this stage, our priorities for the next 12 - 18 months remain broadly unchanged. at this stage our priorities for the next 12 - 18 months remain broadly unchanged As such, we will continue to explore opportunities to recycle capital out of lower returning assets, including offices, as we have done over the past year, and we will continue to prioritize investment into retail, given the high income returns and attractive income growth on offer. as such we will continue to explore opportunities to recycle capital out of lower returning assets including offices as we have done over the past year and we will continue to prioritize investment into retail given the high income returns and attractive income growth on offer To create capacity for this, we do not plan to commit any meaningful capital to new development over this period, and that means that our net debt to EBITDA ratio will reduce meaningfully. to create capacity for this we do not plan to commit any meaningful capital to new development over this period and that means that our net debt to ebitda ratio will reduce meaningfully Based on this framework, we've had an active year in terms of capital recycling. Our largest disposal was Queen Anne's Mansions. This was an asset that generated zero total return despite its high short-term income profile, as the valuation depreciated exactly in line with every quarterly rent receipt until the end of the lease, at which point the asset requires substantial redevelopment. Aside from the impact of turning the residual finance lease income into a capital receipt up front, this sale has essentially no impact on earnings and de-risked the remaining value of the site by transferring planning risk for a change of use to the buyer. We also sold two pre-development assets, which were generating a negative income return and would have required over GBP 400 million of CapEx to build out, as well as 4 retail parks and two smaller offices in London. Based on this framework, we've had an active year in terms of capital recycling. based on this framework we've had an active year in terms of capital recycling Our largest disposal was Queen Anne's Mansions. our largest disposal was queen anne's mansions This was an asset that generated zero total return despite its high short-term income profile, as the valuation depreciated exactly in line with every quarterly rent receipt until the end of the lease, at which point the asset requires substantial redevelopment. this was an asset that generated zero total return despite its high short-term income profile as the valuation depreciated exactly in line with every quarterly rent receipt until the end of the lease at which point the asset requires substantial redevelopment Aside from the impact of turning the residual finance lease income into a capital receipt up front, this sale has essentially no impact on earnings and de-risked the remaining value of the site by transferring planning risk for a change of use to the buyer. aside from the impact of turning the residual finance lease income into a capital receipt up front this sale has essentially no impact on earnings and de-risked the remaining value of the site by transferring planning risk for a change of use to the buyer We also sold two pre-development assets, which were generating a negative income return and would have required over GBP 400 million of CapEx to build out, as well as 4 retail parks and two smaller offices in London. we also sold two pre-development assets which were generating a negative income return and would have required over gbp 400 million of capex to build out as well as 4 retail parks and two smaller offices in london All in all, this means that we sold just over GBP 700 million of assets which were generating limited or no return. This came at a cost to NTA of 1.1% when comparing sales proceeds to 2025 book values, and that was reflected in our half year numbers, but it's in line with the goal of our capital allocation framework. It significantly enhances our future income and EPS growth prospects. As we prioritize investment into retail, we are not planning to commit any meaningful capital to new development over the next 18 months. In London, we expect office rents to continue to grow, but as we have demonstrated over the past year, our existing portfolio is very well placed to capture this growth. All in all, this means that we sold just over GBP 700 million of assets which were generating limited or no return. all in all this means that we sold just over gbp 700 million of assets which were generating limited or no return This came at a cost to NTA of 1.1% when comparing sales proceeds to 2025 book values, and that was reflected in our half year numbers, but it's in line with the goal of our capital allocation framework. this came at a cost to nta of 1.1% when comparing sales proceeds to 2025 book values and that was reflected in our half year numbers but it's in line with the goal of our capital allocation framework It significantly enhances our future income and EPS growth prospects. it significantly enhances our future income and eps growth prospects As we prioritize investment into retail, we are not planning to commit any meaningful capital to new development over the next 18 months. as we prioritize investment into retail we are not planning to commit any meaningful capital to new development over the next 18 months In London, we expect office rents to continue to grow, but as we have demonstrated over the past year, our existing portfolio is very well placed to capture this growth. in london we expect office rents to continue to grow but as we have demonstrated over the past year our existing portfolio is very well placed to capture this growth Taking into account the materially higher risk involved, we do not believe that returns for new office development offer a sufficient premium versus our high quality existing portfolio to justify selling existing offices to fund the development of new ones. In residential, we continue to view the long-term demand supply and balance as compelling and are drawn to the long-term characteristics of higher inflation-linked income growth and lower cyclicality. Development viability for residential remains challenging, but over the past year, we have made substantive positive progress in improving the viability of our build-to-rent pipeline with proactive public sector support an important enabler, such as the government and GLA's package of acceleration measures for London. Taking into account the materially higher risk involved, we do not believe that returns for new office development offer a sufficient premium versus our high quality existing portfolio to justify selling existing offices to fund the development of new ones. taking into account the materially higher risk involved we do not believe that returns for new office development offer a sufficient premium versus our high quality existing portfolio to justify selling existing offices to fund the development of new ones In residential, we continue to view the long-term demand supply and balance as compelling and are drawn to the long-term characteristics of higher inflation-linked income growth and lower cyclicality. in residential we continue to view the long-term demand supply and balance as compelling and are drawn to the long-term characteristics of higher inflation-linked income growth and lower cyclicality Development viability for residential remains challenging, but over the past year, we have made substantive positive progress in improving the viability of our build-to-rent pipeline with proactive public sector support an important enabler, such as the government and GLA's package of acceleration measures for London. development viability for residential remains challenging but over the past year we have made substantive positive progress in improving the viability of our build-to-rent pipeline with proactive public sector support an important enabler such as the government and gla's package of acceleration measures for london We can now see a potential route to viability for the most progressed of our projects, and in the year ahead, we'll seek to bottom out whether or not these projects are capable of proceeding. CapEx spend will remain very limited as we do so, and holding costs are low, but we continue to consider the time investment to be worthwhile. If we are able to secure viable returns, lead times are still such that the earliest start dates would be late 2027. As a result, our committed development exposure will reduce to less than 2% of portfolio value by the summer, down from on average around GBP 1 billion, closer to 10% over the last couple of years. We can now see a potential route to viability for the most progressed of our projects, and in the year ahead, we'll seek to bottom out whether or not these projects are capable of proceeding. we can now see a potential route to viability for the most progressed of our projects and in the year ahead we'll seek to bottom out whether or not these projects are capable of proceeding CapEx spend will remain very limited as we do so, and holding costs are low, but we continue to consider the time investment to be worthwhile. capex spend will remain very limited as we do so and holding costs are low but we continue to consider the time investment to be worthwhile If we are able to secure viable returns, lead times are still such that the earliest start dates would be late 2027. if we are able to secure viable returns lead times are still such that the earliest start dates would be late 2027 As a result, our committed development exposure will reduce to less than 2% of portfolio value by the summer, down from on average around GBP 1 billion, closer to 10% over the last couple of years. as a result our committed development exposure will reduce to less than 2% of portfolio value by the summer down from on average around gbp 1 billion closer to 10% over the last couple of years It will likely stay at this level for the near future, but even over the longer-term, it will remain well below where it's been historically as we move to a structurally lower level of capital tied up in development. Supported by the positive outlook for rent and interest rates, investment market activity in both office and retail recovered steadily across 2025 and into the first few months of 2026. It's too early to assess what the longer-term impact of the Middle East conflict on this growing momentum might be. We are mindful that the renewed uncertainty around interest rates could impact investor decision-making in the near-term. It is worth stressing, however, that interest rates are only one factor, and others, such as confidence in rental growth prospects and returns relative to alternative options, are all stronger than they were a year ago. It will likely stay at this level for the near future, but even over the longer- term, it will remain well below where it's been historically as we move to a structurally lower level of capital tied up in development. Supported by the positive outlook for rent and interest rates, investment market activity in both office and retail recovered steadily across 2025 and into the first few months of 2026. it will likely stay at this level for the near future but even over the longer- term it will remain well below where it's been historically as we move to a structurally lower level of capital tied up in development. supported by the positive outlook for rent and interest rates investment market activity in both office and retail recovered steadily across 2025 and into the first few months of 2026 It's too early to assess what the longer-term impact of the Middle East conflict on this growing momentum might be. it's too early to assess what the longer-term impact of the middle east conflict on this growing momentum might be We are mindful that the renewed uncertainty around interest rates could impact investor decision-making in the near- term. we are mindful that the renewed uncertainty around interest rates could impact investor decision-making in the near- term It is worth stressing, however, that interest rates are only one factor, and others, such as confidence in rental growth prospects and returns relative to alternative options, are all stronger than they were a year ago. it is worth stressing however that interest rates are only one factor and others such as confidence in rental growth prospects and returns relative to alternative options are all stronger than they were a year ago For us, the near-term focus in capital recycling remains unchanged. We will aim to continue to monetize further pre-development assets as these generate zero income return and would require significant CapEx to build out. We will also look to monetize further capital in offices as the potential upside from recycling capital into major retail destinations at around a 200 basis points higher net effective income yield and higher income growth is meaningful. We will, however, be a disciplined seller. We remain highly selective on quality, price, and CapEx risks in retail investment, which is why we chose not to progress any opportunities last year. We do, however, have decent visibility on future opportunities which are likely to come to the market over the next year or two. For us, the near-term focus in capital recycling remains unchanged. for us the near-term focus in capital recycling remains unchanged We will aim to continue to monetize further pre-development assets as these generate zero income return and would require significant CapEx to build out. we will aim to continue to monetize further pre-development assets as these generate zero income return and would require significant capex to build out We will also look to monetize further capital in offices as the potential upside from recycling capital into major retail destinations at around a 200 basis points higher net effective income yield and higher income growth is meaningful. we will also look to monetize further capital in offices as the potential upside from recycling capital into major retail destinations at around a 200 basis points higher net effective income yield and higher income growth is meaningful We will, however, be a disciplined seller. we will however be a disciplined seller We remain highly selective on quality, price, and CapEx risks in retail investment, which is why we chose not to progress any opportunities last year. we remain highly selective on quality price and capex risks in retail investment which is why we chose not to progress any opportunities last year We do, however, have decent visibility on future opportunities which are likely to come to the market over the next year or two. we do however have decent visibility on future opportunities which are likely to come to the market over the next year or two Capital rotation remains an important part of our longer-term strategy, but we are not reliant on this to drive growth, as around 80% of our potential EPS growth by FY 2030 is driven entirely by our existing portfolio and platform. With that, I will now hand you over to Vanessa. Capital rotation remains an important part of our longer-term strategy, but we are not reliant on this to drive growth, as around 80% of our potential EPS growth by FY 2030 is driven entirely by our existing portfolio and platform. capital rotation remains an important part of our longer-term strategy but we are not reliant on this to drive growth as around 80% of our potential eps growth by fy 2030 is driven entirely by our existing portfolio and platform With that, I will now hand you over to Vanessa. with that i will now hand you over to vanessa

Speaker 8: Thank you, Mark, and good morning. It has been another positive year for Landsec, driven by the quality of our portfolio and strong operational execution. With occupancy and rental growth at record highs, our growing reversion gives us good visibility on future income growth. It leaves us well-placed to accelerate EPS growth over the near-term. In financial year 2026, like-for-like income was up 4.6%. Overheads reduced significantly. As a result, our EPS increased 2.2% despite the 1.8% EPS impact from the earlier than planned sale of Queen Anne's Mansions. That supported a 2% increase in the dividend. Portfolio valuation was up 1.2%, with NTA per share up 0.9% for the year. 2.2% in the second half. Thank you, Mark, and good morning. thank you mark and good morning It has been another positive year for Landsec, driven by the quality of our portfolio and strong operational execution. it has been another positive year for landsec driven by the quality of our portfolio and strong operational execution With occupancy and rental growth at record highs, our growing reversion gives us good visibility on future income growth. with occupancy and rental growth at record highs our growing reversion gives us good visibility on future income growth It leaves us well-placed to accelerate EPS growth over the near- term. it leaves us well-placed to accelerate eps growth over the near- term In financial year 2026, like-for-like income was up 4.6%. in financial year 2026 like-for-like income was up 4.6% Overheads reduced significantly. overheads reduced significantly As a result, our EPS increased 2.2% despite the 1.8% EPS impact from the earlier than planned sale of Queen Anne's Mansions. as a result our eps increased 2.2% despite the 1.8% eps impact from the earlier than planned sale of queen anne's mansions That supported a 2% increase in the dividend. that supported a 2% increase in the dividend Portfolio valuation was up 1.2%, with NTA per share up 0.9% for the year. 2.2% in the second half. portfolio valuation was up 1.2% with nta per share up 0.9% for the year 2.2% in the second half We also reduced net debt by almost GBP 100 million, taking our LTV lower to 38.7% and reducing our net debt to EBITDA to 8.4x. With under GBP 200 million of development CapEx still to come, net debt to EBITDA should reduce meaningfully in the near-term as we lease up our new developments. Our balance sheet remains in a strong position. The main driver of that performance was strong like-for-like rental growth, with growth of 4.6% well ahead of our initial guidance, and it was in line with our revised guidance that we gave in November. Office and retail, which together represent over 90% of our income, both performed strongly with growth of 6% and 5.5% respectively. We also reduced net debt by almost GBP 100 million, taking our LTV lower to 38.7% and reducing our net debt to EBITDA to 8.4 x. we also reduced net debt by almost gbp 100 million taking our ltv lower to 38.7% and reducing our net debt to ebitda to 8.4 x With under GBP 200 million of development CapEx still to come, net debt to EBITDA should reduce meaningfully in the near -term as we lease up our new developments. with under gbp 200 million of development capex still to come net debt to ebitda should reduce meaningfully in the near -term as we lease up our new developments Our balance sheet remains in a strong position. our balance sheet remains in a strong position The main driver of that performance was strong like-for-like rental growth, with growth of 4.6% well ahead of our initial guidance, and it was in line with our revised guidance that we gave in November. the main driver of that performance was strong like-for-like rental growth with growth of 4.6% well ahead of our initial guidance and it was in line with our revised guidance that we gave in november Office and retail, which together represent over 90% of our income, both performed strongly with growth of 6% and 5.5% respectively. office and retail which together represent over 90% of our income both performed strongly with growth of 6% and 5.5% respectively Occupancy in both portfolios reached new highs, our focus on efficiency helped us to lift our operating margin by 160 basis points to 87.1%. At the same time, uplifts on relettings and renewals virtually doubled to 15%, showing the growing reversion across the portfolio. Customer demand remains strong, and that continues to support further growth. Our office portfolio is now 99% full, so future like-for-like growth in offices will mainly come from capturing the reversion at lease events. While we expect office growth to moderate a little, in the year ahead, we still expect 3%-5% like-for-like income growth overall. The second key driver of earnings was a continued reduction in overhead costs. These were down 15% last year to GBP 62 million, well below our guidance of below GBP 70 million. Occupancy in both portfolios reached new highs, our focus on efficiency helped us to lift our operating margin by 160 basis points to 87.1%. occupancy in both portfolios reached new highs our focus on efficiency helped us to lift our operating margin by 160 basis points to 87.1% At the same time, uplifts on relettings and renewals virtually doubled to 15%, showing the growing reversion across the portfolio. at the same time uplifts on relettings and renewals virtually doubled to 15% showing the growing reversion across the portfolio Customer demand remains strong, and that continues to support further growth. customer demand remains strong and that continues to support further growth Our office portfolio is now 99% full, so future like-for-like growth in offices will mainly come from capturing the reversion at lease events. our office portfolio is now 99% full so future like-for-like growth in offices will mainly come from capturing the reversion at lease events While we expect office growth to moderate a little, in the year ahead, we still expect 3%-5% like-for-like income growth overall. while we expect office growth to moderate a little in the year ahead we still expect 3%-5% like-for-like income growth overall The second key driver of earnings was a continued reduction in overhead costs. the second key driver of earnings was a continued reduction in overhead costs These were down 15% last year to GBP 62 million, well below our guidance of below GBP 70 million. these were down 15% last year to gbp 62 million well below our guidance of below gbp 70 million In fact, we have already delivered our financial year 27 target of reducing our overheads to the low GBP 60 million. That improvement reflects the investments that we have made in data and technology over the last few years, which are now helping to automate core processes and improve our insights to drive further value. Taken together, overhead costs are down more than GBP 20 million over the last three years and are now at their lowest level in over 20 years. Looking ahead, we expect overheads to stay in the low GBP 60 million, with further efficiencies offsetting inflation, which means most of our income, more of our income will flow through to earnings and dividends. That earnings growth is also supported by our resilient funding profile. In fact, we have already delivered our financial year 27 target of reducing our overheads to the low GBP 60 million. in fact we have already delivered our financial year 27 target of reducing our overheads to the low gbp 60 million That improvement reflects the investments that we have made in data and technology over the last few years, which are now helping to automate core processes and improve our insights to drive further value. that improvement reflects the investments that we have made in data and technology over the last few years which are now helping to automate core processes and improve our insights to drive further value Taken together, overhead costs are down more than GBP 20 million over the last three years and are now at their lowest level in over 20 years. taken together overhead costs are down more than gbp 20 million over the last three years and are now at their lowest level in over 20 years Looking ahead, we expect overheads to stay in the low GBP 60 million, with further efficiencies offsetting inflation, which means most of our income, more of our income will flow through to earnings and dividends. looking ahead we expect overheads to stay in the low gbp 60 million with further efficiencies offsetting inflation which means most of our income more of our income will flow through to earnings and dividends That earnings growth is also supported by our resilient funding profile. that earnings growth is also supported by our resilient funding profile Our 8.6-year average debt maturity is the longest in the U.K. REIT sector, and it's twice as long as the average for the rest of the sector. We also have no need to refinance debt until 2028, and 89% of our debt is fixed or hedged. Our average cost of debt is 3.6%, and this will rise only gradually over time. Because our maturities are so long dated, we expect average debt costs to stay comfortably below the marginal cost of borrowing well beyond the next decade. That gives us strong protection from interest rate volatility. You can see the benefit of those three key drivers clearly in this year's EPS bridge. Our 8.6-year average debt maturity is the longest in the U.K. our 8.6-year average debt maturity is the longest in the u.k REIT sector, and it's twice as long as the average for the rest of the sector. reit sector and it's twice as long as the average for the rest of the sector We also have no need to refinance debt until 2028, and 89% of our debt is fixed or hedged. Our average cost of debt is 3.6%, and this will rise only gradually over time. we also have no need to refinance debt until 2028 and 89% of our debt is fixed or hedged. our average cost of debt is 3.6% and this will rise only gradually over time Because our maturities are so long dated, we expect average debt costs to stay comfortably below the marginal cost of borrowing well beyond the next decade. because our maturities are so long dated we expect average debt costs to stay comfortably below the marginal cost of borrowing well beyond the next decade That gives us strong protection from interest rate volatility. that gives us strong protection from interest rate volatility You can see the benefit of those three key drivers clearly in this year's EPS bridge. you can see the benefit of those three key drivers clearly in this year's eps bridge Like-for-like income growth of GBP 21 million added GBP 0.028 to EPS, and GBP 11 million of overhead savings added a further GBP 0.015, more than offsetting the like-for-like increase in finance cost. The year-over-year movements in other items reduced EPS by GBP 0.015, which was driven by two factors. The benefit from the recovery of previously provided bad debts normalizing to GBP 2 million, following an increase in the prior period, while surrender receipts were also minimal at just GBP 4 million. Both items now have only a minimal EPS benefit, we don't expect a meaningful impact from them in the future. Almost all of this year's income was regular recurring rental income with little benefit from one-off receipts. Like-for-like income growth of GBP 21 million added GBP 0.028 to EPS, and GBP 11 million of overhead savings added a further GBP 0.015, more than offsetting the like-for-like increase in finance cost. like-for-like income growth of gbp 21 million added gbp 0.028 to eps and gbp 11 million of overhead savings added a further gbp 0.015 more than offsetting the like-for-like increase in finance cost The year-over-year movements in other items reduced EPS by GBP 0.015, which was driven by two factors. the year-over-year movements in other items reduced eps by gbp 0.015 which was driven by two factors The benefit from the recovery of previously provided bad debts normalizing to GBP 2 million, following an increase in the prior period, while surrender receipts were also minimal at just GBP 4 million. the benefit from the recovery of previously provided bad debts normalizing to gbp 2 million following an increase in the prior period while surrender receipts were also minimal at just gbp 4 million Both items now have only a minimal EPS benefit, we don't expect a meaningful impact from them in the future. both items now have only a minimal eps benefit we don't expect a meaningful impact from them in the future Almost all of this year's income was regular recurring rental income with little benefit from one-off receipts. almost all of this year's income was regular recurring rental income with little benefit from one-off receipts Regular investment activity had a net impact of GBP 0.003. EPS was up 4% before the effect of the earlier than planned disposal of QAM. That was at the top end of our initial guidance. Including this disposal, EPS was up 2.2%. The trends behind this strong operational performance remain very much in place. The near-term outlook for EPS growth is positive. As we guided in November, we expect EPS this year to be stable versus last year, with underlying growth offset by the annualized impact of the QAM sale, which has a 4% impact on EPS. Given the momentum that we have today, we expect EPS growth in the financial year 2028 to be in the high single-digits. That comes from continuing to capture our growing reversion and from leasing up our recent London office developments. Regular investment activity had a net impact of GBP 0.003. regular investment activity had a net impact of gbp 0.003 EPS was up 4% before the effect of the earlier than planned disposal of QAM. eps was up 4% before the effect of the earlier than planned disposal of qam That was at the top end of our initial guidance. that was at the top end of our initial guidance Including this disposal, EPS was up 2.2%. including this disposal eps was up 2.2% The trends behind this strong operational performance remain very much in place. the trends behind this strong operational performance remain very much in place The near-term outlook for EPS growth is positive. the near-term outlook for eps growth is positive As we guided in November, we expect EPS this year to be stable versus last year, with underlying growth offset by the annualized impact of the QAM sale, which has a 4% impact on EPS. as we guided in november we expect eps this year to be stable versus last year with underlying growth offset by the annualized impact of the qam sale which has a 4% impact on eps Given the momentum that we have today, we expect EPS growth in the financial year 2028 to be in the high single- digits. given the momentum that we have today we expect eps growth in the financial year 2028 to be in the high single- digits That comes from continuing to capture our growing reversion and from leasing up our recent London office developments. that comes from continuing to capture our growing reversion and from leasing up our recent london office developments As Mark said, demand for the space is strong, and we are already making good leasing progress. We typically assume that developments lease up within a 12-month period of completion whilst we stop capitalizing the interest as soon as the project's complete. That timing gap is, between incurring the interest and receiving the full income means we expect a temporary earnings drag from these developments in this financial year of between GBP 6 million-GBP 8 million. This should be more than offset the following year as these projects are expected to add GBP 20 million to earnings once they're fully let, supporting high single-digit EPS growth in financial year 2028. This is also a key part of the meaningful reduction in net debt to EBITDA that we expect over the next two years. As Mark said, demand for the space is strong, and we are already making good leasing progress. as mark said demand for the space is strong and we are already making good leasing progress We typically assume that developments lease up within a 12-month period of completion whilst we stop capitalizing the interest as soon as the project's complete. we typically assume that developments lease up within a 12-month period of completion whilst we stop capitalizing the interest as soon as the project's complete That timing gap is, between incurring the interest and receiving the full income means we expect a temporary earnings drag from these developments in this financial year of between GBP 6 million-GBP 8 million. that timing gap is between incurring the interest and receiving the full income means we expect a temporary earnings drag from these developments in this financial year of between gbp 6 million-gbp 8 million This should be more than offset the following year as these projects are expected to add GBP 20 million to earnings once they're fully let, supporting high single-digit EPS growth in financial year 2028. this should be more than offset the following year as these projects are expected to add gbp 20 million to earnings once they're fully let supporting high single-digit eps growth in financial year 2028 This is also a key part of the meaningful reduction in net debt to EBITDA that we expect over the next two years. this is also a key part of the meaningful reduction in net debt to ebitda that we expect over the next two years Our current ratio reflects the fact that net debt includes GBP 1 billion of capital employed in our recent London office developments, but we received virtually no income from these developments last year, as three of them have only recently completed, and Thirty High is due to complete in the next few months. We're not planning to start any new development in the near future, and we're reducing our investment in pre-development assets. As we continue to capture reversion in our existing portfolio and lease up the developments, we expect net debt to EBITDA to fall below 7x within the next 2 years without material disposals. The strong capital base this provides is further underpinned by our other balance sheet metrics. Our current ratio reflects the fact that net debt includes GBP 1 billion of capital employed in our recent London office developments, but we received virtually no income from these developments last year, as three of them have only recently completed, and Thirty High is due to complete in the next few months. our current ratio reflects the fact that net debt includes gbp 1 billion of capital employed in our recent london office developments but we received virtually no income from these developments last year as three of them have only recently completed and thirty high is due to complete in the next few months We're not planning to start any new development in the near future, and we're reducing our investment in pre-development assets. we're not planning to start any new development in the near future and we're reducing our investment in pre-development assets As we continue to capture reversion in our existing portfolio and lease up the developments, we expect net debt to EBITDA to fall below 7 x within the next 2 years without material disposals. as we continue to capture reversion in our existing portfolio and lease up the developments we expect net debt to ebitda to fall below 7 x within the next 2 years without material disposals The strong capital base this provides is further underpinned by our other balance sheet metrics. the strong capital base this provides is further underpinned by our other balance sheet metrics Portfolio valuation was up 1.2%, helped by leasing activity that drove 6.4% ERV growth, the highest level in nearly 20 years and comfortably ahead of guidance. Yields were virtually stable, although the benefit of that strong ERV growth was offset by two isolated factors. These were the increase in business rates at Piccadilly Lights, which I mentioned six months ago, and a valuation reduction in office development assets due to higher build costs. Together, these two factors reduced the overall portfolio valuation by 1.1%. The disposal of around GBP 700 million of assets which generated limited or no returns had a 1.1% cost to NTA in total accounting return, as reflected in our half-year results. Even so, NTA was up 0.9% for the year and 2.2% in the second half. Portfolio valuation was up 1.2%, helped by leasing activity that drove 6.4% ERV growth, the highest level in nearly 20 years and comfortably ahead of guidance. portfolio valuation was up 1.2% helped by leasing activity that drove 6.4% erv growth the highest level in nearly 20 years and comfortably ahead of guidance Yields were virtually stable, although the benefit of that strong ERV growth was offset by two isolated factors. yields were virtually stable although the benefit of that strong erv growth was offset by two isolated factors These were the increase in business rates at Piccadilly Lights, which I mentioned six months ago, and a valuation reduction in office development assets due to higher build costs. these were the increase in business rates at piccadilly lights which i mentioned six months ago and a valuation reduction in office development assets due to higher build costs Together, these two factors reduced the overall portfolio valuation by 1.1%. together these two factors reduced the overall portfolio valuation by 1.1% The disposal of around GBP 700 million of assets which generated limited or no returns had a 1.1% cost to NTA in total accounting return, as reflected in our half-year results. the disposal of around gbp 700 million of assets which generated limited or no returns had a 1.1% cost to nta in total accounting return as reflected in our half-year results Even so, NTA was up 0.9% for the year and 2.2% in the second half. even so nta was up 0.9% for the year and 2.2% in the second half With net debt down nearly GBP 100 million, LTV reduced to 38.7%. We recognize that renewed uncertainty around global interest rates could affect investment markets in the near-term. Over the long run, income growth drives value growth in real estate. The record rental growth across our portfolio shows that upside continues to increase. We remain well-placed to accelerate EPS growth over the next few years. In November, we raised our outlook for potential earnings per share for financial year 2030 from GBP 0.60-GBP 0.62. Today, we reiterate that outlook. Let me briefly talk through the moving parts. Starting with last year's GBP 0.514, the sale of QAM has a residual EPS impact this year of GBP 0.02. The largest driver of future EPS growth continues to be capturing the growing reversion in our existing portfolio. With net debt down nearly GBP 100 million, LTV reduced to 38.7%. with net debt down nearly gbp 100 million ltv reduced to 38.7% We recognize that renewed uncertainty around global interest rates could affect investment markets in the near- term. we recognize that renewed uncertainty around global interest rates could affect investment markets in the near- term Over the long run, income growth drives value growth in real estate. over the long run income growth drives value growth in real estate The record rental growth across our portfolio shows that upside continues to increase. the record rental growth across our portfolio shows that upside continues to increase We remain well-placed to accelerate EPS growth over the next few years. we remain well-placed to accelerate eps growth over the next few years In November, we raised our outlook for potential earnings per share for financial year 2030 from GBP 0.60 - GBP 0.62. in november we raised our outlook for potential earnings per share for financial year 2030 from gbp 0.60 - gbp 0.62 Today, we reiterate that outlook. today we reiterate that outlook Let me briefly talk through the moving parts. Starting with last year's GBP 0.514, the sale of QAM has a residual EPS impact this year of GBP 0.02. let me briefly talk through the moving parts. starting with last year's gbp 0.514 the sale of qam has a residual eps impact this year of gbp 0.02 The largest driver of future EPS growth continues to be capturing the growing reversion in our existing portfolio. the largest driver of future eps growth continues to be capturing the growing reversion in our existing portfolio Over the last four years, we have delivered 4% compound annual growth in like-for-like net rental income. Over the same period, the reversionary potential in offices has tripled to 17%. Uplifts in retail lettings and renewals have also grown to 15%. We have clear visibility on delivering our outlook, which assumes around 4% growth in like-for-like income per annum from here. Having now delivered our targeted overhead savings, the second-largest contributor is leasing up our current London office developments, which will add around GBP 0.03. Our recently completed schemes are already 54% let with strong interest in the remaining space, pushing ERVs higher. This is another area we have good visibility. Further reducing capital employed in low or non-yielding pre-development assets will add around GBP 0.01 per share through interest cost savings. Over the last four years, we have delivered 4% compound annual growth in like-for-like net rental income. over the last four years we have delivered 4% compound annual growth in like-for-like net rental income Over the same period, the reversionary potential in offices has tripled to 17%. over the same period the reversionary potential in offices has tripled to 17% Uplifts in retail lettings and renewals have also grown to 15%. uplifts in retail lettings and renewals have also grown to 15% We have clear visibility on delivering our outlook, which assumes around 4% growth in like-for-like income per annum from here. we have clear visibility on delivering our outlook which assumes around 4% growth in like-for-like income per annum from here Having now delivered our targeted overhead savings, the second-largest contributor is leasing up our current London office developments, which will add around GBP 0.03. having now delivered our targeted overhead savings the second-largest contributor is leasing up our current london office developments which will add around gbp 0.03 Our recently completed schemes are already 54% let with strong interest in the remaining space, pushing ERVs higher. our recently completed schemes are already 54% let with strong interest in the remaining space pushing ervs higher This is another area we have good visibility. this is another area we have good visibility Further reducing capital employed in low or non-yielding pre-development assets will add around GBP 0.01 per share through interest cost savings. further reducing capital employed in low or non-yielding pre-development assets will add around gbp 0.01 per share through interest cost savings Whilst global interest rates have increased since November, the impact on our future earnings growth is largely mitigated by our long dated maturities and hedging profile, and further offset by the increase in the ERV on both our existing portfolio and recent developments. Future asset rotation gives us further upside as we plan to recycle more capital out of lower return assets and invest around GBP 1 billion in major retail destinations. Our planned recycling from offices into residential is broadly EPS neutral over this period, with the EPS benefit coming beyond financial year 2030. We remain well-placed to deliver on average 5% EPS growth per year between now and financial year 2030, and that is on top of our existing strong income return of 5.8% on NTA. Whilst global interest rates have increased since November, the impact on our future earnings growth is largely mitigated by our long dated maturities and hedging profile, and further offset by the increase in the ERV on both our existing portfolio and recent developments. whilst global interest rates have increased since november the impact on our future earnings growth is largely mitigated by our long dated maturities and hedging profile and further offset by the increase in the erv on both our existing portfolio and recent developments Future asset rotation gives us further upside as we plan to recycle more capital out of lower return assets and invest around GBP 1 billion in major retail destinations. future asset rotation gives us further upside as we plan to recycle more capital out of lower return assets and invest around gbp 1 billion in major retail destinations Our planned recycling from offices into residential is broadly EPS neutral over this period, with the EPS benefit coming beyond financial year 2030. our planned recycling from offices into residential is broadly eps neutral over this period with the eps benefit coming beyond financial year 2030 We remain well-placed to deliver on average 5% EPS growth per year between now and financial year 2030, and that is on top of our existing strong income return of 5.8% on NTA. we remain well-placed to deliver on average 5% eps growth per year between now and financial year 2030 and that is on top of our existing strong income return of 5.8% on nta Around 80% of that growth comes from our existing portfolio and platform, so we are not reliant on investment market activity to deliver attractive EPS growth. As development exposure is coming down, our risk profile is reducing, leaving us well-placed to deliver substantial shareholder value. With that, I will hand back to Mark. Around 80% of that growth comes from our existing portfolio and platform, so we are not reliant on investment market activity to deliver attractive EPS growth. around 80% of that growth comes from our existing portfolio and platform so we are not reliant on investment market activity to deliver attractive eps growth As development exposure is coming down, our risk profile is reducing, leaving us well-placed to deliver substantial shareholder value. as development exposure is coming down our risk profile is reducing leaving us well-placed to deliver substantial shareholder value With that, I will hand back to Mark. with that i will hand back to mark

Speaker 4: Thank you, Vanessa. I'll now wrap up with a summary of what you can expect from us in the year ahead, where we see the differentiation and opportunity for Landsec, and then we'll open to Q&A. Over the last few years, we have actively positioned Landsec for a higher inflation, higher interest rate environment. The updated strategy that we set out just over a year ago encapsulated this, as it clearly set out our primary focus as being delivering sustainable income and EPS growth for our shareholders. All our priorities and decisions flow from that, whether that's the decision to materially reduce our development exposure, our proactive approach to reducing overhead costs, or taking advantage of market windows to term out debt, or indeed repositioning and refining our portfolio. Thank you, Vanessa. thank you vanessa I'll now wrap up with a summary of what you can expect from us in the year ahead, where we see the differentiation and opportunity for Landsec, and then we'll open to Q&A. i'll now wrap up with a summary of what you can expect from us in the year ahead where we see the differentiation and opportunity for landsec and then we'll open to q&a Over the last few years, we have actively positioned Landsec for a higher inflation, higher interest rate environment. over the last few years we have actively positioned landsec for a higher inflation higher interest rate environment The updated strategy that we set out just over a year ago encapsulated this, as it clearly set out our primary focus as being delivering sustainable income and EPS growth for our shareholders. the updated strategy that we set out just over a year ago encapsulated this as it clearly set out our primary focus as being delivering sustainable income and eps growth for our shareholders All our priorities and decisions flow from that, whether that's the decision to materially reduce our development exposure, our proactive approach to reducing overhead costs, or taking advantage of market windows to term out debt, or indeed repositioning and refining our portfolio. all our priorities and decisions flow from that whether that's the decision to materially reduce our development exposure our proactive approach to reducing overhead costs or taking advantage of market windows to term out debt or indeed repositioning and refining our portfolio Over the last five years, we sold nearly GBP 4 billion of largely mature assets and reinvested a broadly similar amount in high quality new acquisitions and well-timed developments. This resulted in the two irreplaceable portfolios and best-in-class platforms that we have today. Our focus now is on maximizing the potential of these by driving continued like-for-like income growth and leasing up our latest developments. We aim to supplement this by rotating further capital out of offices into retail over time, yet the contribution to EPS growth from this is relatively modest compared to the upside embedded in our existing portfolio. We will time this as we judge market conditions to be most suitable. Meanwhile, our current capital employed in residential is low and focused on high quality opportunities. Over the last five years, we sold nearly GBP 4 billion of largely mature assets and reinvested a broadly similar amount in high quality new acquisitions and well-timed developments. over the last five years we sold nearly gbp 4 billion of largely mature assets and reinvested a broadly similar amount in high quality new acquisitions and well-timed developments This resulted in the two irreplaceable portfolios and best-in-class platforms that we have today. this resulted in the two irreplaceable portfolios and best-in-class platforms that we have today Our focus now is on maximizing the potential of these by driving continued like-for-like income growth and leasing up our latest developments. our focus now is on maximizing the potential of these by driving continued like-for-like income growth and leasing up our latest developments We aim to supplement this by rotating further capital out of offices into retail over time, yet the contribution to EPS growth from this is relatively modest compared to the upside embedded in our existing portfolio. we aim to supplement this by rotating further capital out of offices into retail over time yet the contribution to eps growth from this is relatively modest compared to the upside embedded in our existing portfolio We will time this as we judge market conditions to be most suitable. we will time this as we judge market conditions to be most suitable Meanwhile, our current capital employed in residential is low and focused on high quality opportunities. meanwhile our current capital employed in residential is low and focused on high quality opportunities We're focused on securing viability for these projects as the longer-term fundamentals of this space remain attractive and are worth the effort. CapEx here in the year ahead will be minimal. All this means that our differentiation remains clear. Our primary focus on sustainable income and EPS growth provides absolute clarity across our entire business. Our clear capital allocation framework means we are rational about investment decisions in pursuit of this financial objective as we move to an even stronger capital base. At the same time, customer demand remains high. Our occupancy is up to a two-decade high. Rents are rising at their fastest pace in nearly 20 years, which adds to our growing reversion and means the upside in terms of future income growth is abundantly clear. We're focused on securing viability for these projects as the longer-term fundamentals of this space remain attractive and are worth the effort. we're focused on securing viability for these projects as the longer-term fundamentals of this space remain attractive and are worth the effort CapEx here in the year ahead will be minimal. capex here in the year ahead will be minimal All this means that our differentiation remains clear. all this means that our differentiation remains clear Our primary focus on sustainable income and EPS growth provides absolute clarity across our entire business. our primary focus on sustainable income and eps growth provides absolute clarity across our entire business Our clear capital allocation framework means we are rational about investment decisions in pursuit of this financial objective as we move to an even stronger capital base. our clear capital allocation framework means we are rational about investment decisions in pursuit of this financial objective as we move to an even stronger capital base At the same time, customer demand remains high. at the same time customer demand remains high Our occupancy is up to a two-decade high. our occupancy is up to a two-decade high Rents are rising at their fastest pace in nearly 20 years, which adds to our growing reversion and means the upside in terms of future income growth is abundantly clear. rents are rising at their fastest pace in nearly 20 years which adds to our growing reversion and means the upside in terms of future income growth is abundantly clear As our overhead costs are now down to a 20-year low, with our savings target hit a year ahead of schedule, this top line growth will increasingly flow through to an acceleration in EPS growth. Landsec is now positioned with a lower risk profile and a clearer, stronger growth outlook. With an existing income return at NTA of 5.8%, the potential to deliver around 5% EPS growth per year between now and FY 2030 supports an attractive total return outlook for shareholders. Ladies and gentlemen, thank you very much. I'm now going to open up for Q&A. As usual, we'll start with Q&A here in the room. We have handheld mics, if you could just wait for a mic after you've raised your hand. As our overhead costs are now down to a 20-year low, with our savings target hit a year ahead of schedule, this top line growth will increasingly flow through to an acceleration in EPS growth. as our overhead costs are now down to a 20-year low with our savings target hit a year ahead of schedule this top line growth will increasingly flow through to an acceleration in eps growth Landsec is now positioned with a lower risk profile and a clearer, stronger growth outlook. landsec is now positioned with a lower risk profile and a clearer stronger growth outlook With an existing income return at NTA of 5.8%, the potential to deliver around 5% EPS growth per year between now and FY 2030 supports an attractive total return outlook for shareholders. Ladies and gentlemen, thank you very much. with an existing income return at nta of 5.8% the potential to deliver around 5% eps growth per year between now and fy 2030 supports an attractive total return outlook for shareholders. ladies and gentlemen thank you very much I'm now going to open up for Q&A. i'm now going to open up for q&a As usual, we'll start with Q&A here in the room. as usual we'll start with q&a here in the room We have handheld mics, if you could just wait for a mic after you've raised your hand. we have handheld mics if you could just wait for a mic after you've raised your hand Then I'll move to questions from anyone attending on the call, and finally, the webcast. First question, just stand here on the right, and then in the middle with Paul at the back there. Three rows back. Then I'll move to questions from anyone attending on the call, and finally, the webcast. then i'll move to questions from anyone attending on the call and finally the webcast First question, just stand here on the right, and then in the middle with Paul at the back there. first question just stand here on the right and then in the middle with paul at the back there Three rows back. three rows back

Speaker 5: Morning. It's Oliver Woodall from Kolytics, wondering if you could provide just a bit more color on what needs to change to trigger more attractive risk-adjusted returns, in your view, for residential developments to become more viable. Morning. morning It's Oliver Woodall from Kolytics, wondering if you could provide just a bit more color on what needs to change to trigger more attractive risk-adjusted returns, in your view, for residential developments to become more viable. it's oliver woodall from kolytics wondering if you could provide just a bit more color on what needs to change to trigger more attractive risk-adjusted returns in your view for residential developments to become more viable

Speaker 4: It really boils down to one thing, which is public sector policy support. If I take the most advanced of our projects, the O2 Centre Finchley Road, which has a detailed planning set in place but has a consent with a 35% affordable housing requirement and full Community Infrastructure Levy charges, that project isn't viable on that basis. We had an announcement from the government and GLA at the back end of last year, consulting on a package of acceleration measures, which were finalized in March of this year, that for certain projects that can hit a timetable of delivery, which would include Finchley Road, reduces the affordable housing from 35%-20% and effectively halves the CIL charge. It really boils down to one thing, which is public sector policy support. it really boils down to one thing which is public sector policy support If I take the most advanced of our projects, the O2 Centre Finchley Road, which has a detailed planning set in place but has a consent with a 35% affordable housing requirement and full Community Infrastructure Levy charges, that project isn't viable on that basis. if i take the most advanced of our projects the o2 centre finchley road which has a detailed planning set in place but has a consent with a 35% affordable housing requirement and full community infrastructure levy charges that project isn't viable on that basis We had an announcement from the government and GLA at the back end of last year, consulting on a package of acceleration measures, which were finalized in March of this year, that for certain projects that can hit a timetable of delivery, which would include Finchley Road, reduces the affordable housing from 35% - 20% and effectively halves the CIL charge. we had an announcement from the government and gla at the back end of last year consulting on a package of acceleration measures which were finalized in march of this year that for certain projects that can hit a timetable of delivery which would include finchley road reduces the affordable housing from 35% - 20% and effectively halves the cil charge Those two things together, we believe, get that project to a level that would be around a level of that we think supports viability. We've got to bottom out build cost and design to validate that. As I said in my comments on the call, we're spending very little money on these projects in the next year ahead, and I think the objective has to be to conclude whether or not these projects can get to viability. It's primarily policy support. Those two things together, we believe, get that project to a level that would be around a level of that we think supports viability. those two things together we believe get that project to a level that would be around a level of that we think supports viability We've got to bottom out build cost and design to validate that. we've got to bottom out build cost and design to validate that As I said in my comments on the call, we're spending very little money on these projects in the next year ahead, and I think the objective has to be to conclude whether or not these projects can get to viability. as i said in my comments on the call we're spending very little money on these projects in the next year ahead and i think the objective has to be to conclude whether or not these projects can get to viability It's primarily policy support. it's primarily policy support

Speaker 5: Okay. Thank you. Just one more. I wonder if you could provide any update on conversations relating to the transaction market for major retail assets and any changes there, given elevated bond yields and things like that? Okay. okay Thank you. thank you Just one more. just one more I wonder if you could provide any update on conversations relating to the transaction market for major retail assets and any changes there, given elevated bond yields and things like that? i wonder if you could provide any update on conversations relating to the transaction market for major retail assets and any changes there given elevated bond yields and things like that

Speaker 4: Yeah. I think we comment earlier and said out in the statement that we've got visibility. We think of something in excess of GBP 3 billion worth of prime catchment dominant retail assets that we expect to come to the market over the next one to two years. The next one that's likely to come forward will be the Metrocentre, which could be in the market as soon as this month. I think there is more investor interest in the sector. Clearly, the sort of stats that we've reported today don't go unnoticed. Yeah. yeah I think we comment earlier and said out in the statement that we've got visibility. i think we comment earlier and said out in the statement that we've got visibility We think of something in excess of GBP 3 billion worth of prime catchment dominant retail assets that we expect to come to the market over the next one to two years. we think of something in excess of gbp 3 billion worth of prime catchment dominant retail assets that we expect to come to the market over the next one to two years The next one that's likely to come forward will be the Metrocentre , which could be in the market as soon as this month. the next one that's likely to come forward will be the metrocentre which could be in the market as soon as this month I think there is more investor interest in the sector. i think there is more investor interest in the sector Clearly, the sort of stats that we've reported today don't go unnoticed. clearly the sort of stats that we've reported today don't go unnoticed For the more significant lot sizes where you need to have a combination of access to capital, desire to own assets long-term, and operational expertise, I think there's much less likely competition around there. Given that you're talking about yields that are typically starting with a 7% and maybe even starting with an 8%, it's much less sensitive in terms of that upfront position to purely rates, and I think the level of growth is something people are getting more comfortable with. For the more significant lot sizes where you need to have a combination of access to capital, desire to own assets long- term, and operational expertise, I think there's much less likely competition around there. for the more significant lot sizes where you need to have a combination of access to capital desire to own assets long- term and operational expertise i think there's much less likely competition around there Given that you're talking about yields that are typically starting with a 7% and maybe even starting with an 8%, it's much less sensitive in terms of that upfront position to purely rates, and I think the level of growth is something people are getting more comfortable with. given that you're talking about yields that are typically starting with a 7% and maybe even starting with an 8% it's much less sensitive in terms of that upfront position to purely rates and i think the level of growth is something people are getting more comfortable with

Speaker 5: Thank you. Thank you. thank you

Speaker 4: If we just go to Paul here in the middle, and then there's a couple just back from there. If we just go to Paul here in the middle, and then there's a couple just back from there. if we just go to paul here in the middle and then there's a couple just back from there

Speaker 7: Thanks very much. Paul May from Barclays. Just a couple of questions. Three, actually. Two are linked. Obviously, you clearly moved away from most valuation-based metrics, with EPS instead of NAV being your focus, net debt to EBITDA instead of LTV seemingly a greater focus for you. You still focus on ERVs, as some might call them, elusive rental values. Why are you not reporting on and just focusing on renting and leasing versus previous passing? The usual pushback being that, you know, rent on vacant space is an infinite uplift, surely just reporting on an absolute basis would be more relevant for the earnings-based metrics that you have. Linked to that is TSR, earnings yield plus earnings growth not more relevant than earnings yield at NAV plus earnings growth as a focus point for you. Thanks very much. thanks very much Paul May from Barclays. paul may from barclays Just a couple of questions. just a couple of questions Three, actually. three actually Two are linked. two are linked Obviously, you clearly moved away from most valuation-based metrics, with EPS instead of NAV being your focus, net debt to EBITDA instead of LTV seemingly a greater focus for you. obviously you clearly moved away from most valuation-based metrics with eps instead of nav being your focus net debt to ebitda instead of ltv seemingly a greater focus for you You still focus on ERVs, as some might call them, elusive rental values. you still focus on ervs as some might call them elusive rental values Why are you not reporting on and just focusing on renting and leasing versus previous passing? why are you not reporting on and just focusing on renting and leasing versus previous passing The usual pushback being that, you know, rent on vacant space is an infinite uplift, surely just reporting on an absolute basis would be more relevant for the earnings-based metrics that you have. the usual pushback being that you know rent on vacant space is an infinite uplift surely just reporting on an absolute basis would be more relevant for the earnings-based metrics that you have Linked to that is TSR, earnings yield plus earnings growth not more relevant than earnings yield at NAV plus earnings growth as a focus point for you. linked to that is tsr earnings yield plus earnings growth not more relevant than earnings yield at nav plus earnings growth as a focus point for you

Speaker 4: Okay. Was that three? Okay. okay Was that three? was that three

Speaker 7: That's two, and then there's another one. That's two, and then there's another one. that's two and then there's another one

Speaker 4: Oh, right. Okay. Oh, right. oh right Okay. okay

Speaker 7: linked ones that was. linked ones that was. linked ones that was

Speaker 4: When we set out with the strategy a year ago, I mean, we've spent a lot of time thinking about, you know, our responsibilities as a management team in terms of creating value for the long-term for our shareholders. A sector that's traded pretty much consistently at quite a wide discount to its NTA, to its implied value of its underlying assets. Focusing on that doesn't seem to be solving the conundrum. We focus much more on the quality of our income stream and our ability to grow that income stream sustainably over time, and that's driven everything that's in our strategy. When we set out with the strategy a year ago, I mean, we've spent a lot of time thinking about, you know, our responsibilities as a management team in terms of creating value for the long- term for our shareholders. when we set out with the strategy a year ago i mean we've spent a lot of time thinking about you know our responsibilities as a management team in terms of creating value for the long- term for our shareholders A sector that's traded pretty much consistently at quite a wide discount to its NTA, to its implied value of its underlying assets. a sector that's traded pretty much consistently at quite a wide discount to its nta to its implied value of its underlying assets Focusing on that doesn't seem to be solving the conundrum. focusing on that doesn't seem to be solving the conundrum We focus much more on the quality of our income stream and our ability to grow that income stream sustainably over time, and that's driven everything that's in our strategy. we focus much more on the quality of our income stream and our ability to grow that income stream sustainably over time and that's driven everything that's in our strategy That breaks down really into two things, the quality of the portfolio and the ability of the portfolio to drive quality income, you see that today in all of the 20-year highs and the rest of it. Our business model and our financing, and you can see that in terms of taking cost out of the business, so there's very little leakage now, 55 basis points of overhead as a percentage of value, turned out the debt twice the sector average, and not allocating capital to areas that we think are excessively risky relative to what we can get in current assets. For us, that focus on earnings and earnings growth is absolutely key. That breaks down really into two things, the quality of the portfolio and the ability of the portfolio to drive quality income, you see that today in all of the 20-year highs and the rest of it. that breaks down really into two things the quality of the portfolio and the ability of the portfolio to drive quality income you see that today in all of the 20-year highs and the rest of it Our business model and our financing, and you can see that in terms of taking cost out of the business, so there's very little leakage now, 55 basis points of overhead as a percentage of value, turned out the debt twice the sector average, and not allocating capital to areas that we think are excessively risky relative to what we can get in current assets. our business model and our financing and you can see that in terms of taking cost out of the business so there's very little leakage now 55 basis points of overhead as a percentage of value turned out the debt twice the sector average and not allocating capital to areas that we think are excessively risky relative to what we can get in current assets For us, that focus on earnings and earnings growth is absolutely key. for us that focus on earnings and earnings growth is absolutely key The total accounting return, which includes the sort of valuation movement, you know, we of course report that. For us to deliver value for our shareholders is how you create value from that portfolio rather than a six-month to six-month valuation of what it would theoretically be worth if you theoretically tried to sell all those assets individually at the same time into the market. Net debt to EBITDA, sorry, you touched on, it's a cash on cash measure. I think if you look at LTV, you could have two businesses with LTV of say 35%, one of which has got 20% of its portfolio in development with a lot of risk, and one of which has no development. The LTVs would look the same. The total accounting return, which includes the sort of valuation movement, you know, we of course report that. the total accounting return which includes the sort of valuation movement you know we of course report that For us to deliver value for our shareholders is how you create value from that portfolio rather than a six-month to six-month valuation of what it would theoretically be worth if you theoretically tried to sell all those assets individually at the same time into the market. for us to deliver value for our shareholders is how you create value from that portfolio rather than a six-month to six-month valuation of what it would theoretically be worth if you theoretically tried to sell all those assets individually at the same time into the market Net debt to EBITDA, sorry, you touched on, it's a cash on cash measure. net debt to ebitda sorry you touched on it's a cash on cash measure I think if you look at LTV, you could have two businesses with LTV of say 35%, one of which has got 20% of its portfolio in development with a lot of risk, and one of which has no development. i think if you look at ltv you could have two businesses with ltv of say 35% one of which has got 20% of its portfolio in development with a lot of risk and one of which has no development The LTVs would look the same. the ltvs would look the same I'd argue that the risk profiles of those two businesses, theoretical businesses are very different. By looking at net debt to EBITDA, we reflect the value or the reduction in risk that is inherent in leasing up a development program and not being dependent on lots of moving parts on development risk looking forward. I'd argue that the risk profiles of those two businesses, theoretical businesses are very different. i'd argue that the risk profiles of those two businesses theoretical businesses are very different By looking at net debt to EBITDA, we reflect the value or the reduction in risk that is inherent in leasing up a development program and not being dependent on lots of moving parts on development risk looking forward. by looking at net debt to ebitda we reflect the value or the reduction in risk that is inherent in leasing up a development program and not being dependent on lots of moving parts on development risk looking forward

Speaker 7: Just linking that back to ERV, there's constant mention of that, and that seems to be the last fallback towards valuation type metrics rather than previous passing and rental uplift on previous passing. Just linking that back to ERV, there's constant mention of that, and that seems to be the last fallback towards valuation type metrics rather than previous passing and rental uplift on previous passing. just linking that back to erv there's constant mention of that and that seems to be the last fallback towards valuation type metrics rather than previous passing and rental uplift on previous passing

Speaker 4: Yeah, I think we're sort of halfway there on that, if I must just say. On the retail side of the business, we haven't been reporting our reversionary potential based on ERVs for some time, largely because what's driving like for like growth are things like turnover income, commercialization income, which value has struggled to put a cap rate on and include within an asset value. There we are reporting the leasing relative to previous passing, and you've seen that move dramatically up to mid-teens now. We've probably had about 3.5 years of market value growth on a portfolio with roughly five-year average lease terms. There should be another 18 months of sort of super growth, if you like, in that underlying reversion before things start to lap more encouraging growth numbers. Yeah, I think we're sort of halfway there on that, if I must just say. yeah i think we're sort of halfway there on that if i must just say On the retail side of the business, we haven't been reporting our reversionary potential based on ERVs for some time, largely because what's driving like for like growth are things like turnover income, commercialization income, which value has struggled to put a cap rate on and include within an asset value. on the retail side of the business we haven't been reporting our reversionary potential based on ervs for some time largely because what's driving like for like growth are things like turnover income commercialization income which value has struggled to put a cap rate on and include within an asset value There we are reporting the leasing relative to previous passing, and you've seen that move dramatically up to mid-teens now. there we are reporting the leasing relative to previous passing and you've seen that move dramatically up to mid-teens now We've probably had about 3.5 years of market value growth on a portfolio with roughly five-year average lease terms. we've probably had about 3.5 years of market value growth on a portfolio with roughly five-year average lease terms There should be another 18 months of sort of super growth, if you like, in that underlying reversion before things start to lap more encouraging growth numbers. there should be another 18 months of sort of super growth if you like in that underlying reversion before things start to lap more encouraging growth numbers I think in office, it's a slightly different position because you've got much less variable numbers in the office rents. Obviously, we're virtually full within the portfolio. By disclosing a true market value of the rents today based on rental evidence, typically drawn from our own portfolio, I think that does give a robust indication of what's the gap between what it's leased at today and what it would be leased at in the market. You can then combine with the average lease term, see how that should translate into earnings growth over the next few years. We're sort of in a sort of halfway there on that, but we think it is a relevant disclosure, particularly on the office side. I think in office, it's a slightly different position because you've got much less variable numbers in the office rents. i think in office it's a slightly different position because you've got much less variable numbers in the office rents Obviously, we're virtually full within the portfolio. obviously we're virtually full within the portfolio By disclosing a true market value of the rents today based on rental evidence, typically drawn from our own portfolio, I think that does give a robust indication of what's the gap between what it's leased at today and what it would be leased at in the market. by disclosing a true market value of the rents today based on rental evidence typically drawn from our own portfolio i think that does give a robust indication of what's the gap between what it's leased at today and what it would be leased at in the market You can then combine with the average lease t erm, see how that should translate into earnings growth over the next few years. you can then combine with the average lease t erm see how that should translate into earnings growth over the next few years We're sort of in a sort of halfway there on that, but we think it is a relevant disclosure, particularly on the office side. we're sort of in a sort of halfway there on that but we think it is a relevant disclosure particularly on the office side

Speaker 7: Okay. Just linking to the earlier question on the retail side. I mean, as a result of the Middle East conflict, obviously higher rates look like they're gonna be here to stay for even longer. Do you see potential for some of the retail assets that were on the market that I'm sure you guys were looking at, that fell away because the existing owners just thought, "Well, things are looking good. The operational performance is there. Rates were coming down or expected to come down." That's now changed. Do you think some of those assets could come back to the market at more realistic pricing for you to be more interested in them again? Okay. okay Just linking to the earlier question on the retail side. just linking to the earlier question on the retail side I mean, as a result of the Middle East conflict, obviously higher rates look like they're gonna be here to stay for even longer. i mean as a result of the middle east conflict obviously higher rates look like they're gonna be here to stay for even longer Do you see potential for some of the retail assets that were on the market that I'm sure you guys were looking at, that fell away because the existing owners just thought, "Well, things are looking good. do you see potential for some of the retail assets that were on the market that i'm sure you guys were looking at that fell away because the existing owners just thought "well things are looking good The operational performance is there. the operational performance is there Rates were coming down or expected to come down." That's now changed. rates were coming down or expected to come down." that's now changed Do you think some of those assets could come back to the market at more realistic pricing for you to be more interested in them again? do you think some of those assets could come back to the market at more realistic pricing for you to be more interested in them again

Speaker 4: I wouldn't want to say that there are a lot of assets that we just thought were priced too expensively. We are a disciplined buyer. I think we're still expecting to see assets come to the market, as I mentioned, you know, GBP 3 billion or so that we would see visibility of. I think it is fair to say they're in the hands of owners that are not natural long-term owners that will be looking at what's the best way of crystallizing an exit that gives them value for their investors. They must be looking at execution risk in a higher cost of capital world, that's got to play into their thinking. I wouldn't want to say that there are a lot of assets that we just thought were priced too expensively. i wouldn't want to say that there are a lot of assets that we just thought were priced too expensively We are a disciplined buyer. we are a disciplined buyer I think we're still expecting to see assets come to the market, as I mentioned, you know, GBP 3 billion or so that we would see visibility of. i think we're still expecting to see assets come to the market as i mentioned you know gbp 3 billion or so that we would see visibility of I think it is fair to say they're in the hands of owners that are not natural long-term owners that will be looking at what's the best way of crystallizing an exit that gives them value for their investors. i think it is fair to say they're in the hands of owners that are not natural long-term owners that will be looking at what's the best way of crystallizing an exit that gives them value for their investors They must be looking at execution risk in a higher cost of capital world, that's got to play into their thinking. they must be looking at execution risk in a higher cost of capital world that's got to play into their thinking We've got no evidence today of exactly what's happening on the ground, but I think, you know, what you suggest, you know, makes sense to me. We've got no evidence today of exactly what's happening on the ground, but I think, you know, what you suggest, you know, makes sense to me. we've got no evidence today of exactly what's happening on the ground but i think you know what you suggest you know makes sense to me

Speaker 7: Perfect. Thanks very much. Perfect. perfect Thanks very much. thanks very much

Speaker 4: Thank you. I think there was a just behind one row. Oh, sorry. That was you next, Adam. Sorry. That's it. Thanks. Yeah, please. Thank you. thank you I think there was a just behind one row. i think there was a just behind one row Oh, sorry. oh sorry That was you next, Adam. that was you next adam Sorry. sorry That's it. that's it Thanks. it thanks Yeah, please. yeah please

Speaker 3: It's Bjorn Zietsman from Panmure Liberum. Two questions. You mentioned you're not reporting reversion on the retail portfolio. We can calculate it, how much reversion are you seeing within your retail portfolio? The second question, just over and above reversion, how much like for like rental growth are you assuming to achieve your 2030 EPS targets? It's Bjorn Zietsman from Panmure Liberum. it's bjorn zietsman from panmure liberum Two questions. two questions You mentioned you're not reporting reversion on the retail portfolio. you mentioned you're not reporting reversion on the retail portfolio We can calculate it, how much reversion are you seeing within your retail portfolio? we can calculate it how much reversion are you seeing within your retail portfolio The second question, just over and above reversion, how much like for like rental growth are you assuming to achieve your 2030 EPS targets? the second question just over and above reversion how much like for like rental growth are you assuming to achieve your 2030 eps targets

Speaker 4: In terms of what reversion we're seeing on retail, right now, we're for the year just ending, we were 15% ahead of previous passing. As I mentioned a moment ago, I think there's further ERV growth to go because we've effectively got 3.5 years of growth that we've seen since market rents turned positive to in-place rents. There should be another 18 months before we start lapping with an average lease term of five years. We flag on the retail side an expectation to deliver between 4.5% and 7% like for like income growth between now and 2030. Combination of capturing reversion, growing turnover rent, commercialization income, digital media, car charging, events, et cetera, and then a small number of CapEx projects. In terms of what reversion we're seeing on retail, right now, we're for the year just ending, we were 15% ahead of previous passing. in terms of what reversion we're seeing on retail right now we're for the year just ending we were 15% ahead of previous passing As I mentioned a moment ago, I think there's further ERV growth to go because we've effectively got 3.5 years of growth that we've seen since market rents turned positive to in-place rents. as i mentioned a moment ago i think there's further erv growth to go because we've effectively got 3.5 years of growth that we've seen since market rents turned positive to in-place rents There should be another 18 months before we start lapping with an average lease term of five years. there should be another 18 months before we start lapping with an average lease term of five years We flag on the retail side an expectation to deliver between 4.5% and 7% like for like income growth between now and 2030. we flag on the retail side an expectation to deliver between 4.5% and 7% like for like income growth between now and 2030 Combination of capturing reversion, growing turnover rent, commercialization income, digital media, car charging, events, et cetera, and then a small number of CapEx projects. combination of capturing reversion growing turnover rent commercialization income digital media car charging events et cetera and then a small number of capex projects That's assuming an ERV growth number that would be in the region of 3%-4%, below what we're currently seeing at the moment. It would be a similar story in terms of ERV growth expectations on the office portfolio as well. I don't think we're making any particularly significant or aggressive assumptions in further market growth from here. If you look at the office portfolio, 17% reversionary, average lease term of around six years. You've sort of got 3% per annum roughly baked in already. I think we would be underwriting around 3%-4%. You know, as we've said, ERV growth, we expect to see that grow again at that sort of level for the year ahead. Just turn to Adam. You've got Mike. That's assuming an ERV growth number that would be in the region of 3%-4%, below what we're currently seeing at the moment. that's assuming an erv growth number that would be in the region of 3%-4% below what we're currently seeing at the moment It would be a similar story in terms of ERV growth expectations on the office portfolio as well. it would be a similar story in terms of erv growth expectations on the office portfolio as well I don't think we're making any particularly significant or aggressive assumptions in further market growth from here. i don't think we're making any particularly significant or aggressive assumptions in further market growth from here If you look at the office portfolio, 17% reversionary, average lease term of around six years. if you look at the office portfolio 17% reversionary average lease term of around six years You've sort of got 3% per annum roughly baked in already. you've sort of got 3% per annum roughly baked in already I think we would be underwriting around 3%-4%. i think we would be underwriting around 3%-4% You know, as we've said, ERV growth, we expect to see that grow again at that sort of level for the year ahead. you know as we've said erv growth we expect to see that grow again at that sort of level for the year ahead Just turn to Adam. just turn to adam You've got Mike. you've got mike

Speaker 1: Good morning. Adam Shapton from Green Street. One on the retail opportunity set, and you've been very clear about your views of the recent market and the future investment market, how that, how that might fall in your favor. Just a point of clarification. For the opportunity set you see, are any of those likely to come with significant near-term CapEx needs to capture your target returns? So is it you spend GBP 800 million and maybe there's another GBP 100 million-GBP 250 million on top of that in the near-term? Good morning. good morning Adam Shapton from Green Street. adam shapton from green street One on the retail opportunity set, and you've been very clear about your views of the recent market and the future investment market, how that, how that might fall in your favor. one on the retail opportunity set and you've been very clear about your views of the recent market and the future investment market how that how that might fall in your favor Just a point of clarification. just a point of clarification For the opportunity set you see, are any of those likely to come with significant near-term CapEx needs to capture your target returns? for the opportunity set you see are any of those likely to come with significant near-term capex needs to capture your target returns So is it you spend GBP 800 million and maybe there's another GBP 100 million-GBP 250 million on top of that in the near- term? so is it you spend gbp 800 million and maybe there's another gbp 100 million-gbp 250 million on top of that in the near- term

Speaker 4: I would say the majority of those will come with decent amounts of CapEx requirements that we would price into our. I would say the majority of those will come with decent amounts of CapEx requirements that we would price into our. i would say the majority of those will come with decent amounts of capex requirements that we would price into our

Speaker 1: In the near-term. In the near- term. in the near- term

Speaker 4: relatively near-term, I would say on a, on a three- to five-year basis, we would be looking to acquire things and reposition and, you know, so, and we looked at a couple of assets last year. We didn't proceed. Couple of the ones that we chose not to bid on had, we felt, quite significant maintenance CapEx backlogs. relatively near- term, I would say on a, on a three- to five -year basis, we would be looking to acquire things and reposition and, you know, so, and we looked at a couple of assets last year. relatively near- term i would say on a on a three- to five -year basis we would be looking to acquire things and reposition and you know so and we looked at a couple of assets last year We didn't proceed. we didn't proceed Couple of the ones that we chose not to bid on had, we felt, quite significant maintenance CapEx backlogs. couple of the ones that we chose not to bid on had we felt quite significant maintenance capex backlogs

Speaker 1: About the sort of CapEx chart you showed, we could imagine sitting here in two years' time, you've acquired GBP 600 million-GBP 800 million of retail, and there's a CapEx chunk for that on top. About the sort of CapEx chart you showed, we could imagine sitting here in two years' time, you've acquired GBP 600 million-GBP 800 million of retail, and there's a CapEx chunk for that on top. about the sort of capex chart you showed we could imagine sitting here in two years' time you've acquired gbp 600 million-gbp 800 million of retail and there's a capex chunk for that on top

Speaker 4: I think the way we would look at that, our GBP 1 billion in retail, there's GBP 200 million of CapEx on our existing assets. The other GBP 800 million, I think we would be factoring in CapEx as part of that. We're not gonna be spending money and then taking on a very significant CapEx liability that we haven't priced in. I think the way we would look at that, our GBP 1 billion in retail, there's GBP 200 million of CapEx on our existing assets. i think the way we would look at that our gbp 1 billion in retail there's gbp 200 million of capex on our existing assets The other GBP 800 million, I think we would be factoring in CapEx as part of that. the other gbp 800 million i think we would be factoring in capex as part of that We're not gonna be spending money and then taking on a very significant CapEx liability that we haven't priced in. we're not gonna be spending money and then taking on a very significant capex liability that we haven't priced in

Speaker 1: Thank you. You very sensibly, proactively answered the share buybacks question in your statement this morning. The clear inference from that is that your return investment opportunities are cheaper than your shares today, is your view. Does it follow then that you're open-minded about issuing equity to part fund these retail acquisitions to keep at the very least leverage neutral or even a reduction in leverage if shopping centers are cheaper than your stock today? Thank you. thank you You very sensibly, proactively answered the share buybacks question in your statement this morning. you very sensibly proactively answered the share buybacks question in your statement this morning The clear inference from that is that your return investment opportunities are cheaper than your shares today, is your view. the clear inference from that is that your return investment opportunities are cheaper than your shares today is your view Does it follow then that you're open-minded about issuing equity to part fund these retail acquisitions to keep at the very least leverage neutral or even a reduction in leverage if shopping centers are cheaper than your stock today? does it follow then that you're open-minded about issuing equity to part fund these retail acquisitions to keep at the very least leverage neutral or even a reduction in leverage if shopping centers are cheaper than your stock today

Speaker 4: Yeah. So I think if you look at shopping centers, and let's assume there's a yield of somewhere in the mid-sevens. If you adjust for leverage, I think that gets you know, consistent level of leverage. I think that implies an income return on equity of nine, which is broadly in line with where the shares trade today. It's not a significant delta, but provided the right quality of assets are there and the there's scarcity that is gonna underpin longer, you know, better long-term growth characteristics, we think that's the better use of capital. In terms of raising capital to do something, if it's something that is the right quality of asset and it is growing earnings, then it's certainly something that we would consider. Yeah. yeah So I think if you look at shopping centers, and let's assume there's a yield of somewhere in the mid-sevens. so i think if you look at shopping centers and let's assume there's a yield of somewhere in the mid-sevens If you adjust for leverage, I think that gets you know, consistent level of leverage. if you adjust for leverage i think that gets you know consistent level of leverage I think that implies an income return on equity of nine, which is broadly in line with where the shares trade today. i think that implies an income return on equity of nine which is broadly in line with where the shares trade today It's not a significant delta, but provided the right quality of assets are there and the there's scarcity that is gonna underpin longer, you know, better long-term growth characteristics, we think that's the better use of capital. it's not a significant delta but provided the right quality of assets are there and the there's scarcity that is gonna underpin longer you know better long-term growth characteristics we think that's the better use of capital In terms of raising capital to do something, if it's something that is the right quality of asset and it is growing earnings, then it's certainly something that we would consider. in terms of raising capital to do something if it's something that is the right quality of asset and it is growing earnings then it's certainly something that we would consider We're not going to dilute earnings across an existing portfolio for the sake of adding a nice asset. We're not going to dilute earnings across an existing portfolio for the sake of adding a nice asset. we're not going to dilute earnings across an existing portfolio for the sake of adding a nice asset

Speaker 1: Okay. Understood. Thank you. Okay. okay Understood. understood Thank you. thank you

Speaker 9: Morning. It's Zachary Gauge from UBS. A couple of questions along fairly similar themes. Firstly, mostly on capital allocation. The CMD last February, you said in the next one to three-year plan, you expect to fund GBP 800 million of the shopping centers from disposals. Should we still be thinking that in two years' time there'll be an additional GBP 800 million deployed into shopping centers? Related to that, how flexible will you be on pricing on the office disposals, given what's happened to government bond yields and the political situation since the end of the reporting period? Then secondly, just to wrap up on the residential piece. If I understand correctly, you're essentially saying, and you've got 12 months to get viability working or not working. Morning. morning It's Zachary Gauge from UBS. it's zachary gauge from ubs A couple of questions along fairly similar themes. a couple of questions along fairly similar themes Firstly, mostly on capital allocation. firstly mostly on capital allocation The CMD last February, you said in the next one to three-year plan, you expect to fund GBP 800 million of the shopping centers from disposals. the cmd last february you said in the next one to three-year plan you expect to fund gbp 800 million of the shopping centers from disposals Should we still be thinking that in two years' time there'll be an additional GBP 800 million deployed into shopping centers? should we still be thinking that in two years' time there'll be an additional gbp 800 million deployed into shopping centers Related to that, how flexible will you be on pricing on the office disposals, given what's happened to government bond yields and the political situation since the end of the reporting period? related to that how flexible will you be on pricing on the office disposals given what's happened to government bond yields and the political situation since the end of the reporting period Then secondly, just to wrap up on the residential piece. then secondly just to wrap up on the residential piece If I understand correctly, you're essentially saying, and you've got 12 months to get viability working or not working. if i understand correctly you're essentially saying and you've got 12 months to get viability working or not working If it's not working in 12 months, is that sort of the end of residential development, and we should be thinking about how else that capital might be deployed? If it's not working in 12 months, is that sort of the end of residential development, and we should be thinking about how else that capital might be deployed? if it's not working in 12 months is that sort of the end of residential development and we should be thinking about how else that capital might be deployed

Speaker 4: Yeah. I'll take those in reverse order. With respect to the recycling, I might ask Vanessa to talk to a bit more specifically what's assumed in our guidance around recycling over the next few years. With respect to residential, I think we are at a point now where we've got 9,000 units across four very high quality sites. As we've mentioned, viabilities currently are below a level that would make sense for us. They do all have planning consents in place, and we are on the most progressed of those in active and I think positive constructive engagement with public sector partners. Yeah. yeah I'll take those in reverse order. i'll take those in reverse order With respect to the recycling, I might ask Vanessa to talk to a bit more specifically what's assumed in our guidance around recycling over the next few years. with respect to the recycling i might ask vanessa to talk to a bit more specifically what's assumed in our guidance around recycling over the next few years With respect to residential, I think we are at a point now where we've got 9,000 units across four very high quality sites. with respect to residential i think we are at a point now where we've got 9,000 units across four very high quality sites As we've mentioned, viabilities currently are below a level that would make sense for us. as we've mentioned viabilities currently are below a level that would make sense for us They do all have planning consents in place, and we are on the most progressed of those in active and I think positive constructive engagement with public sector partners. they do all have planning consents in place and we are on the most progressed of those in active and i think positive constructive engagement with public sector partners I think on those projects, we will know where we can get to in terms of net yields on costs and IRRs over the next six to 12 months. If those numbers don't stack up, we're not gonna put capital into those projects. It would be crazy to do so. I think as I stand here today, there is a route through to that viability, that's why we're investing the time. We do think it's worthwhile, they're very strong projects, we think there's the basis of quite significant competitive advantage. If we can't get the returns to a level that makes sense, you know, you can't have a capital allocation framework as the one we set out then decide, actually, no, we wanna get on with these projects over here because we've had them for ages. I think on those projects, we will know where we can get to in terms of net yields on costs and IRRs over the next six to 12 months. i think on those projects we will know where we can get to in terms of net yields on costs and irrs over the next six to 12 months If those numbers don't stack up, we're not gonna put capital into those projects. if those numbers don't stack up we're not gonna put capital into those projects It would be crazy to do so. it would be crazy to do so I think as I stand here today, there is a route through to that viability, that's why we're investing the time. i think as i stand here today there is a route through to that viability that's why we're investing the time We do think it's worthwhile, they're very strong projects, we think there's the basis of quite significant competitive advantage. we do think it's worthwhile they're very strong projects we think there's the basis of quite significant competitive advantage If we can't get the returns to a level that makes sense, you know, you can't have a capital allocation framework as the one we set out then decide, actually, no, we wanna get on with these projects over here because we've had them for ages. if we can't get the returns to a level that makes sense you know you can't have a capital allocation framework as the one we set out then decide actually no we wanna get on with these projects over here because we've had them for ages I think with respect then to the recycling, I think the GBP 800 million is still our objective. Within two years, I think, you know, perhaps we will. Perhaps it'll be slightly longer than that, given those opportunities. Just with respect to earnings guidance, perhaps Vanessa could give a bit of clarity on what we're assuming. I think with respect then to the recycling, I think the GBP 800 million is still our objective. i think with respect then to the recycling i think the gbp 800 million is still our objective Within two years, I think, you know, perhaps we will. within two years i think you know perhaps we will Perhaps it'll be slightly longer than that, given those opportunities. perhaps it'll be slightly longer than that given those opportunities Just with respect to earnings guidance, perhaps Vanessa could give a bit of clarity on what we're assuming. just with respect to earnings guidance perhaps vanessa could give a bit of clarity on what we're assuming

Speaker 8: Yeah. We are targeting that rotation, as you say, across to financial year 2030. What we are assuming is we're splitting the GBP 800 million of investment into new assets, roughly around the three-year period from financial year 2028, 2029 and 2030. That's what we, if you assume that. Where we've guided financial year 2027, we're not making significant assumptions in the 2027 guidance around investment into retail acquisitions. In financial year 2028, we're assuming we get a third of that delivered. That would be around GBP 250 million-GBP 300 million of assumption within our guidance, which equates to probably around GBP 5 million or GBP 6 million of upside on earnings. It's not a significant amount in the financial year 2028 guidance. Yeah. yeah We are targeting that rotation, as you say, across to financial year 2030. we are targeting that rotation as you say across to financial year 2030 What we are assuming is we're splitting the GBP 800 million of investment into new assets, roughly around the three-year period from financial year 2028, 2029 and 2030. what we are assuming is we're splitting the gbp 800 million of investment into new assets roughly around the three-year period from financial year 2028 2029 and 2030 That's what we, if you assume that. that's what we if you assume that Where we've guided financial year 2027, we're not making significant assumptions in the 2027 guidance around investment into retail acquisitions. where we've guided financial year 2027 we're not making significant assumptions in the 2027 guidance around investment into retail acquisitions In financial year 2028, we're assuming we get a third of that delivered. in financial year 2028 we're assuming we get a third of that delivered That would be around GBP 250 million-GBP 300 million of assumption within our guidance, which equates to probably around GBP 5 million or GBP 6 million of upside on earnings. that would be around gbp 250 million-gbp 300 million of assumption within our guidance which equates to probably around gbp 5 million or gbp 6 million of upside on earnings It's not a significant amount in the financial year 2028 guidance. it's not a significant amount in the financial year 2028 guidance If you look at then the financial year 2030 potential that we have, 20% of that growth comes from that rotation. Therefore, you can see that we've shown that 80% remaining actually comes from our own portfolio. That's the differential between the two ends of those spectrums. If you look at then the financial year 2030 potential that we have, 20% of that growth comes from that rotation. if you look at then the financial year 2030 potential that we have 20% of that growth comes from that rotation Therefore, you can see that we've shown that 80% remaining actually comes from our own portfolio. therefore you can see that we've shown that 80% remaining actually comes from our own portfolio That's the differential between the two ends of those spectrums. that's the differential between the two ends of those spectrums

Speaker 4: Thank you. Zach? Thank you. thank you Zach? zach

Speaker 9: Sorry, just on the yields versus office yields that you would potentially move to fund in the current environment. Sorry, just on the yields versus office yields that you would potentially move to fund in the current environment. sorry just on the yields versus office yields that you would potentially move to fund in the current environment

Speaker 4: Excuse me. I think that the 150-200 basis point spread between a true net effective yield on both sides of the ledger is still the sort of level that we would look at. Just to take that as an opportunity to stress and remind people about net effective yields. The net effective yield is what goes through our P&L account. It's different from the headline rents on offices because of the typically 20% of incentive that is offered upfront that we spread over the lease term. Typically, the net effective yield on an office is 20% lower than the headline yield that might be quoted on a transaction. Excuse me. excuse me I think that the 150-200 basis point spread between a true net effective yield on both sides of the ledger is still the sort of level that we would look at. i think that the 150-200 basis point spread between a true net effective yield on both sides of the ledger is still the sort of level that we would look at Just to take that as an opportunity to stress and remind people about net effective yields. just to take that as an opportunity to stress and remind people about net effective yields The net effective yield is what goes through our P&L account. the net effective yield is what goes through our p&l account It's different from the headline rents on offices because of the typically 20% of incentive that is offered upfront that we spread over the lease term. it's different from the headline rents on offices because of the typically 20% of incentive that is offered upfront that we spread over the lease term Typically, the net effective yield on an office is 20% lower than the headline yield that might be quoted on a transaction. typically the net effective yield on an office is 20% lower than the headline yield that might be quoted on a transaction If you sell at a yield of six, you're probably selling at a P&L yield of five. Whereas in retail, incentives tend to be more like 10% now, so less significant. Of course, in residential, essentially no incentives at all. Oh, sorry, one further question over here. There's a race with microphones. No. If you sell at a yield of six, you're probably selling at a P&L yield of five. if you sell at a yield of six you're probably selling at a p&l yield of five Whereas in retail, incentives tend to be more like 10% now, so less significant. whereas in retail incentives tend to be more like 10% now so less significant Of course, in residential, essentially no incentives at all. of course in residential essentially no incentives at all Oh, sorry, one further question over here. oh sorry one further question over here There's a race with microphones. there's a race with microphones No. no

Speaker 2: Morning. Ashnaa Vyas from Deutsche Numis. I just had one question on the use of agentic commerce and AI in your shopping centers, and if you guys are investing in it and what kind of spend you're putting in or thinking about putting in. Just on the back of that, what the experience is for your tenants using that and the end user, which is the consumers. Morning. morning Ashnaa Vyas from Deutsche Numis. ashnaa vyas from deutsche numis I just had one question on the use of agentic commerce and AI in your shopping centers, and if you guys are investing in it and what kind of spend you're putting in or thinking about putting in. i just had one question on the use of agentic commerce and ai in your shopping centers and if you guys are investing in it and what kind of spend you're putting in or thinking about putting in Just on the back of that, what the experience is for your tenants using that and the end user, which is the consumers. just on the back of that what the experience is for your tenants using that and the end user which is the consumers

Speaker 4: Yeah. I think most of the investment in AI for consumers and more immersive retail environments, that CapEx is in the main coming from the retailers. I think that's what you're seeing in retailers deciding to sign for much larger stores and then investing within those store fits. Of course, you know, I don't know exactly where their investment numbers are, but on the basis that if I, you know, give the next example in Bluewater, I think that's an 11-year term certain on that lease with a turnover component to the lease as well. They're clearly looking at long periods of time to recoup investment. Yeah. yeah I think most of the investment in AI for consumers and more immersive retail environments, that CapEx is in the main coming from the retailers. i think most of the investment in ai for consumers and more immersive retail environments that capex is in the main coming from the retailers I think that's what you're seeing in retailers deciding to sign for much larger stores and then investing within those store fits. i think that's what you're seeing in retailers deciding to sign for much larger stores and then investing within those store fits Of course, you know, I don't know exactly where their investment numbers are, but on the basis that if I, you know, give the next example in Bluewater, I think that's an 11-year term certain on that lease with a turnover component to the lease as well. of course you know i don't know exactly where their investment numbers are but on the basis that if i you know give the next example in bluewater i think that's an 11-year term certain on that lease with a turnover component to the lease as well They're clearly looking at long periods of time to recoup investment. they're clearly looking at long periods of time to recoup investment With ourselves, we're always looking at how we improve and enhance the environment and how we use data and AI to track performance and consumer behaviors and movements within our centers, but it's not a significant level of investment and not something that we have planned for investment at a significant level. I don't think there are any more questions in the room. Mark, I was gonna let you ask a question, but as you've decided you don't want to, that's just fine. I'm gonna go to anyone on the call now. With ourselves, we're always looking at how we improve and enhance the environment and how we use data and AI to track performance and consumer behaviors and movements within our centers, but it's not a significant level of investment and not something that we have planned for investment at a significant level. with ourselves we're always looking at how we improve and enhance the environment and how we use data and ai to track performance and consumer behaviors and movements within our centers but it's not a significant level of investment and not something that we have planned for investment at a significant level I don't think there are any more questions in the room. i don't think there are any more questions in the room Mark, I was gonna let you ask a question, but as you've decided you don't want to, that's just fine. mark i was gonna let you ask a question but as you've decided you don't want to that's just fine I'm gonna go to anyone on the call now. i'm gonna go to anyone on the call now

Speaker 6: Thank you. I would like to remind everyone over the phone to ask the question. Please press star one on your telephone keypad. There are no questions. Thank you. thank you I would like to remind everyone over the phone to ask the question. i would like to remind everyone over the phone to ask the question Please press star one on your telephone keypad. please press star one on your telephone keypad There are no questions. there are no questions

Speaker 4: Okay Okay okay

Speaker 6: waiting at this time. Presenters, you may continue. waiting at this time. waiting at this time Presenters, you may continue. presenters you may continue

Speaker 4: Great. Thank you. Just going to go to one question on the webcast, which has come from Mike Pr. How does net effective rent on the BP pre-let at Timber Square compare with the underwrite? There's two questions. I'll cover that one first. That was a little way ahead of the underwrite. Probably a mid-single digit level ahead of what we'd assumed originally. The growth in Bankside has not been as significant as we've seen in Thirty High, for example. Still very encouraging, of course, with the quality of the occupier there. You know, that's also very additive to overall value. I think a very positive outturn. Great. great Thank you. thank you Just going to go to one question on the webcast, which has come from Mike Pr. just going to go to one question on the webcast which has come from mike pr How does net effective rent on the BP pre-let at Timber Square compare with the underwrite? how does net effective rent on the bp pre-let at timber square compare with the underwrite There's two questions. there's two questions I'll cover that one first. i'll cover that one first That was a little way ahead of the underwrite. that was a little way ahead of the underwrite Probably a mid-single digit level ahead of what we'd assumed originally. probably a mid-single digit level ahead of what we'd assumed originally The growth in Bankside has not been as significant as we've seen in Thirty High, for example. the growth in bankside has not been as significant as we've seen in thirty high for example Still very encouraging, of course, with the quality of the occupier there. still very encouraging of course with the quality of the occupier there You know, that's also very additive to overall value. you know that's also very additive to overall value I think a very positive outturn. i think a very positive outturn Sorry, I'm just trying to scroll back through here. Then is the residential operating platform still intended to be established organically or is it TBA? I think that will be part of the decisions we make over the next 12 months about the viability of developments. We would need to be confident of what the underlying operating solution was. As I think we've said in past, sort of conceptually, I don't think it's necessarily moving to the final answer immediately. It could be that you work with private operators to run things whilst we subscale and then move to something in-house longer-term. That'll be a decision alongside the viability of those residential projects over the next year or so. Then a question from Kempen. Sorry, I'm just trying to scroll back through here. sorry i'm just trying to scroll back through here Then is the residential operating platform still intended to be established organically or is it TBA? then is the residential operating platform still intended to be established organically or is it tba I think that will be part of the decisions we make over the next 12 months about the viability of developments. i think that will be part of the decisions we make over the next 12 months about the viability of developments We would need to be confident of what the underlying operating solution was. we would need to be confident of what the underlying operating solution was As I think we've said in past, sort of conceptually, I don't think it's necessarily moving to the final answer immediately. as i think we've said in past sort of conceptually i don't think it's necessarily moving to the final answer immediately It could be that you work with private operators to run things whilst we subscale and then move to something in-house longer- term. it could be that you work with private operators to run things whilst we subscale and then move to something in-house longer- term That'll be a decision alongside the viability of those residential projects over the next year or so. that'll be a decision alongside the viability of those residential projects over the next year or so Then a question from Kempen. then a question from kempen Since the acceleration in technologies around AI, have you started to look differently at your office portfolio or change your strategy? I think our strategy remains the same within office, the reduction of GBP 2 billion of capital employed by 2030. That still leaves us with a very significant high quality office portfolio. As I mentioned in comments during the presentation, we see that as being an accelerant of the concentration of occupied demand on the very best space. I think it's unlikely we'll see any shift in our plans around development just given the elevated risk we see and the ability of capturing growth within the existing portfolio. It's not something I expect to see delivering resulting in a change in strategy. Since the acceleration in technologies around AI, have you started to look differently at your office portfolio or change your strategy? since the acceleration in technologies around ai have you started to look differently at your office portfolio or change your strategy I think our strategy remains the same within office, the reduction of GBP 2 billion of capital employed by 2030. i think our strategy remains the same within office the reduction of gbp 2 billion of capital employed by 2030 That still leaves us with a very significant high quality office portfolio. that still leaves us with a very significant high quality office portfolio As I mentioned in comments during the presentation, we see that as being an accelerant of the concentration of occupied demand on the very best space. as i mentioned in comments during the presentation we see that as being an accelerant of the concentration of occupied demand on the very best space I think it's unlikely we'll see any shift in our plans around development just given the elevated risk we see and the ability of capturing growth within the existing portfolio. i think it's unlikely we'll see any shift in our plans around development just given the elevated risk we see and the ability of capturing growth within the existing portfolio It's not something I expect to see delivering resulting in a change in strategy. it's not something i expect to see delivering resulting in a change in strategy It is something which I think underpins a very positive growth outlook for the portfolio. I think at that point, that's hopefully covering all the Q&A. I appreciate you've had a lot of you, a number of presentations this morning. Thank you very much for taking the time to come along or to dial in. Have a good day. It is something which I think underpins a very positive growth outlook for the portfolio. it is something which i think underpins a very positive growth outlook for the portfolio I think at that point, that's hopefully covering all the Q&A. i think at that point that's hopefully covering all the q&a I appreciate you've had a lot of you, a number of presentations this morning. i appreciate you've had a lot of you a number of presentations this morning Thank you very much for taking the time to come along or to dial in. thank you very much for taking the time to come along or to dial in Have a good day. have a good day