29
February 2024
HAMMERSON plc - FULL YEAR
2023 RESULTS
Strong 2023: rental growth and
earnings up, more to come
Rita-Rose Gagné, Chief Executive
of Hammerson, said:
"Our city centre destinations are in high demand. This
year we delivered a positive performance across our key strategic,
operational and financial metrics. Like-for-like gross rental
income was up 6%, following another record year of leasing.
Occupancy remains strong and footfall and sales were up
again. We've strengthened our operational platform, whilst
reducing costs by 14%. As a result, adjusted earnings rose
11% to £116m, whilst net debt was down 23%, with ample
liquidity.
Over the last three years, we have delivered against all
strategic milestones. We now have a core portfolio focused on
urban locations which are evolving into my vision: vibrant, 24/7
multi-use estates. These destinations are fast growing, and
part of the fabric and infrastructure of the cities in which we
operate.
Whilst our eyes are open to the current macro-economic
environment, our occupiers are thriving and our visitor numbers are
on the rise in our realigned portfolio. We are reaping the rewards
of the investments we are making in our core portfolio alongside
best-in-class occupiers, which underpins the high levels of demand
for our space. We expect this trajectory to continue in the
year ahead. We have a strong pipeline of leasing and
repurposing opportunities. There is still more for us to do,
but we are now entering a time where having the capability to
invest and operate with discipline and conviction will be
rewarded."
Positive performance across our
key operational and financial metrics:
·
Another record year of leasing with 306 deals,
representing £46m of headline rent, £29m at our share, up +23%
LFL
·
Permanent deals signed +37% vs previous passing;
net effective rent +12% vs ERV
·
Footfall up +3% year-on-year; dwell time +5%; LFL
sales +1% UK, +3% France
·
Adjusted earnings growth of +11% to £116m, or
2.3p per share (+10%), driven by like-for-like GRI up +6%, NRI
+4%
·
Continued cost reduction outperformance: gross
administration cost -14% year-on-year bringing total cost reduction
since FY 20 to -24%; guiding to a further -10% cost reduction in
2024
·
Value Retail adjusted earnings of £32m (FY 22:
£27m), and £74m of catch-up cash distributions received
·
Group portfolio value of £4.7bn (FY 22: £5.1bn),
mainly due to disposals and derecognitions; capital return
-2.6%
·
IFRS loss of £51m (FY 22: £164m loss), basic loss
per share of -1.0p (FY 22: -3.3p)
·
EPRA NTA per share 51p (FY 22: 53p)
·
Execution of disposal programme has strengthened
balance sheet: net debt down 23% to £1,326m; LTV 34% (FY 22: 39%),
FPC LTV 44% (FY 22: 47%); Net debt to EBITDA of 8.0x (FY 22:
10.4x); liquidity of £1.2bn (FY 22: £1.0bn)
·
Balance sheet further strengthened since the
year-end with the exchange for the sale of USQ for £111m
Dividend
·
In July 2023, the Board reinstated a cash
dividend as guided and announced a new dividend policy of 60-70% of
annual adjusted earnings, balancing distributions to shareholders
with our focus on reinvesting in our core portfolio to deliver
further growth and value.
· Today, the Board has recommended a final cash dividend of
0.78p per share subject to shareholder approval, which will be paid
as an ordinary dividend, bringing the full year cash dividend to
1.50p per share, representing a 64% payout, commensurate with the
half year payment. The dividend declaration will be released as a
separate announcement.
Outlook
We had a strong 2023. City
centres remain the dominant locations for commerce and
lifestyle. Our destinations are in high demand by occupiers
and visitors. The importance of a physical presence in a
digitally-integrated strategy for best-in-class operators is
undeniable. Over time, we have a unique opportunity to
complement our retail core with a broader mix of uses by
repurposing existing space and unlocking value on adjacent
land.
We have a strong platform with
long term visibility of income. We remain operationally disciplined
and expect further cost reductions in 2024. We are confident in our
ability to grow top line and earnings off a new base, and therefore
create value for shareholders.
Results presentation
today:
Hammerson will hold a presentation
for analysts and investors at its Marble Arch House office to
present its full year financial results for the 12 months ended 31
December 2023, followed by a Q&A session.
Date & time:
|
Thursday 29 February 2024 at 09.45
am (GMT)
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Webcast link:
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https://hammerson-fy-results-2023.open-exchange.net/
|
Conference call:
|
Quote Hammerson when prompted by
the operator, access code 329183
|
Please join the call 5 minutes
before the booked start time to allow the operator to transfer you
into the call by the scheduled start time
France:
|
+33 9
7073 3958
|
|
Ireland:
|
+353 1
691 7842
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Netherlands:
|
+31 85
888 7233
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South Africa:
|
+27 87
550 8441
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UK:
|
+44 20 3936 2999
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|
USA:
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+1 646 787 9445
|
|
The presentation and press release
will be available at:
https://www.hammerson.com/investors/reports-results-presentations on
the morning of results.
Enquiries:
Rita-Rose Gagné, Chief Executive
Officer
|
Tel:
+44 (0)20 7887 1000
|
|
Himanshu Raja, Chief Financial
Officer
|
Tel:
+44 (0)20 7887 1000
|
|
Josh Warren, Director of Strategy,
Commercial Finance and IR
|
Tel:
+44 (0)20 7887 1053
|
josh.warren@hammerson.com
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Natalie Gunson, Group Director of
Communications
|
Tel:
+44 (0)20 7887 4672
|
natalie.gunson@hammerson.com
|
Oliver Hughes, Ollie Hoare and
Charles Hirst, MHP
|
Tel:
+44 (0)20 3128 8100
|
Hammerson@mhpgroup.com
|
Disclaimer
Certain statements made in this
document are forward looking and are based on current expectations
concerning future events which are subject to a number of
assumptions, risks and uncertainties. Many of these assumptions,
risks and uncertainties relate to factors that are beyond the
Group's control and which could cause actual results to differ
materially from any expected future events or results referred to
or implied by these forward-looking statements. Any forward-looking
statements made are based on the knowledge and information
available to Directors on the date of publication of this
announcement. Unless otherwise required by applicable laws,
regulations or accounting standards, the Group does not undertake
any obligation to update or revise any forward-looking statements,
whether as a result of new information, future developments or
otherwise. Accordingly, no assurance can be given that any
particular expectation will be met, and reliance should not be
placed on any forward-looking statement. Nothing in this
announcement should be regarded as a profit estimate or
forecast.
This announcement does not
constitute or form part of any offer or invitation to sell, or any
solicitation of any offer to subscribe for or purchase any shares
or other securities in the Company or any of its group members, nor
shall it or any part of it or the fact of its distribution form the
basis of, or be relied on in connection with, any contract or
commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other
securities of the Company or any of its group members. Statements
in this announcement reflect the knowledge and information
available at the time of its preparation. Liability arising from
anything in this announcement shall be governed by English law.
Nothing in this announcement shall exclude any liability under
applicable laws that cannot be excluded in accordance with such
laws.
Index to key data
Unless otherwise stated, figures
have been prepared on a proportionally consolidated basis,
excluding Value Retail as outlined in the presentation of
information section of the Financial Review.
Year ended
|
|
|
2023
|
2022
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Note/Ref
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Income
|
|
|
|
|
|
Gross rental income
|
|
|
£208m
|
£215m
|
2
|
Adjusted earnings - Value
Retail
|
|
a
|
£32m
|
£27m
|
2
|
Adjusted finance costs
|
|
a
|
£46m
|
£54m
|
2
|
Adjusted earnings
|
|
a
|
£116m
|
£105m
|
2
|
Revaluation losses - Managed
portfolio
|
|
|
£(119)m
|
£(221)m
|
2
|
Revaluation losses - Group
portfolio, including Value Retail
|
|
|
£(127)m
|
£(282)m
|
3B
|
Loss for the year
(IFRS)
|
|
|
£(51)m
|
£(164)m
|
2
|
Adjusted earnings per
share
|
|
a
|
2.3p
|
2.1p
|
10B
|
Basic loss per share
|
|
|
(1.0)p
|
(3.3)p
|
10B
|
Final cash dividend per
share
|
|
|
0.78p
|
-
|
18
|
Dividend per share for the year
(cash/enhanced scrip)
|
|
|
1.50p/-
|
0.2p/2.0p
|
18
|
|
|
|
|
|
|
Operational
|
|
|
|
|
|
Like-for-like gross rental income
change
|
|
|
+5.5%
|
+8.3%
|
Financial Review
|
Like-for-like adjusted net rental
income change
|
|
|
+3.6%
|
+29.2%
|
Table
3
|
Occupancy - flagships
|
|
|
95%
|
96%
|
Table
5
|
Leasing activity
|
|
|
£29m
|
£25m
|
n/a
|
Leasing v ERV (principal
leases)
|
|
|
+12%
|
+2%
|
n/a
|
Leasing v Passing rent (principal
leases)
|
|
|
+37%
|
+34%
|
n/a
|
Passing rent
|
|
|
£188m
|
£210m
|
Table
4
|
Like-for-like passing rent
change
|
|
|
+2.5%
|
+1.4%
|
n/a
|
ERV
|
|
|
£193m
|
£218m
|
Table
4
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Like-for-like ERV change
- flagships
|
|
|
+1.7%
|
(2.2)%
|
Financial Review
|
|
|
|
|
|
|
Capital and financing
|
|
|
|
|
|
Managed portfolio value
|
|
|
£2,776m
|
£3,220m
|
3B
|
Group portfolio value (including
Value Retail)
|
|
|
£4,662m
|
£5,107m
|
3B
|
Total accounting return
|
|
|
(2.1)%
|
(6.8)%
|
Table 15
|
Total property return (including
Value Retail)
|
|
|
3.2%
|
(0.7)%
|
Table
9
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Capital return (including Value
Retail)
|
|
|
(2.6)%
|
(5.8)%
|
Table
9
|
Net debt
|
|
|
£1,326m
|
£1,732m
|
Table
13
|
Gearing
|
|
|
55%
|
68%
|
Table
18
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Loan to value -
headline
|
|
|
34%
|
39%
|
Table
19
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Loan to value - fully
proportionally consolidated
|
|
|
44%
|
47%
|
Table
19
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Liquidity
|
|
|
£1,225m
|
£996m
|
Financial Review
|
Interest cover
|
|
|
3.91x
|
3.24x
|
Table
17
|
Net debt : EBITDA
|
|
|
8.0x
|
10.4x
|
Table
16
|
Net assets
|
|
|
£2,463m
|
£2,586m
|
Balance
sheet
|
EPRA net tangible assets (NTA) per
share
|
|
|
51p
|
53p
|
10C
|
a These results include
discussion of alternative performance measures (APMs) which include
those described as Adjusted, EPRA and Headline as well as constant
currency (where current period exchange rates are applied to the
prior period's results). Adjusted, EPRA and Headline measures are
described in note 1C to the financial statements and
reconciliations for earnings and net assets measures to their IFRS
equivalents are set out in note 9 to the financial
statements.
CHIEF EXECUTIVE'S REVIEW
In 2023, we delivered another year
of significant strategic, operational and financial progress and
growth, reflecting three years of transformational change for the
business. We are now well positioned to invest for growth and value
creation. Today, the Group is focused on a core portfolio of
city centre destinations in some of the fastest growing cities in
Europe that are evolving to my vision: 24/7, urban 'living spaces'.
Occupier flight to quality - fewer, better stores in prime
locations - is undeniable, with high flagship occupancy at 95%
following another year of record leasing in our uniquely located
city centre destinations.
We signed 306 leases representing
£46m of headline rent, £29m at our share, split roughly evenly
between: new to portfolio brands, new concepts, social and
entertainment offers; and renewals with our current occupiers,
including new concepts and upsizes. We attract best-in-class
occupiers who in turn make significant investments in their
physical footprint. Rental levels have rebased and we are driving
growth with permanent deals signed 12% ahead of ERV on a net
effective basis, and 37% ahead of previous passing rent, equating
to additional annualised passing rent of £7m on our £179m flagship
rent roll.
The exceptional environments we
create for our occupiers and visitors is reflected in strong
operational fundamentals. Despite the volatile macroeconomic
environment, footfall and like-for-like sales continue to grow.
Notably, we have seen particularly strong operational performances
at assets where we have made significant investments in recent
years, such as Bullring, Dundrum and Les 3 Fontaines.
Since 2020, we have transformed
our operating model, and reshaped our organisation. We have brought
in new skills and talent in asset management, leasing,
commercialisation and placemaking, which means we can focus our
energies on value creation. On-site property management and
associated accounting services in the UK and France have largely
been consolidated with proven scale strategic partners.
We have invested to realign and
upgrade our IT and digital platform in areas where speed and data
quality is critical. Today we are a more agile, resilient and
market facing asset-centric organisation, one that continues to
evolve and reshape our destinations to be fit for the future. We
have again reduced gross administration costs, down 14%
year-on-year and we are targeting a further 10% reduction in
2024.
We have further realigned our
portfolio, exiting non-controlling minority stakes in Italie Deux
in France, alongside realising value from standalone development
assets in Croydon, and other non-core land generating £216m in
disposal proceeds in 2023. At the same time, we have been
disciplined in not allocating capital to assets with secured debt
where these did not meet our location and catchment, investment or
return criteria. Whilst recognising an impairment of £22m,
£125m of secured debt was derecognised in the period following
exits from Highcross and O'Parinor, also bringing a sharper focus
to investment opportunities in the core portfolio. Since the
balance sheet date, we have exchanged on the sale of Union Square,
which will bring to a close our £500m disposal programme set out at
FY 21.
At 31 December 2023, our financial
position was significantly strengthened, with ample cash and
undrawn committed facilities of £1.2bn, more than covering near
term maturities and providing capital for investment. We will
continue to be disciplined allocators of capital and select the
best returns for shareholders, mindful of our own cost of capital
and all options for capital deployment including maintaining
balance sheet strength and flexibility.
Dividend
As announced at the 2023 half year
results and outlined in the 2022 annual report, the Board
reinstated a cash dividend in 2023, declaring an interim cash
dividend of 0.72p in July which was paid entirely as a
PID.
At the same time, the Board
announced a new sustainable dividend policy of 60% to 70% of annual
adjusted earnings to be paid semi-annually. This policy is based on
disciplined capital allocation seeking to balance returns to
shareholders whilst continuing to invest to drive growth and value
creation in our core assets.
Therefore, the Board recommends a
final cash dividend of 0.78p per share in respect of 2023 to be
paid as an ordinary dividend subject to shareholder approval, which
would represent a full year cash dividend of 1.50p per share and a
payout ratio of 64%, commensurate with the half year.
The Board recognises dividends are
an important constituent of shareholder returns and the policy will
be kept under review.
FINANCIAL AND OPERATIONAL REVIEW
Adjusted earnings were up 11% to
£116m or 2.3p per share, reflecting 6% like-for-like growth in GRI
and 4% growth in like-for-like NRI, combined with significant
further reductions in gross administration and net finance
costs.
At FY 22, we committed to reduce
our gross administration costs by 20% by FY 24. We have delivered a
14% reduction in 2023. There are more efficiencies to come as we
pursue greater automation and digitalisation of our business, as
well as outsourcing and consolidation of supplier opportunities. We
expect to deliver a further 10% reduction in 2024 which means we
are on track to exceed our target of 20% reduction by 2024, which
would bring cumulative savings of more than 30% since FY
20.
Net debt was down 23% to £1,326m
(FY 22: £1,732m). Headline LTV was 34% (FY 22: 39%) and 44% (FY 22:
47%) including the Group's proportionate share of Value Retail net
debt. Our Net debt: EBITDA improved to 8.0x from 10.4x at FY 22,
reflecting both lower debt and the improved operating
performance.
EPRA NTA was 51p per share at 31
December 2023 (FY 22: 53p), with higher earnings in part offsetting
disposal and impairment and revaluation losses, totalling £167m.
Having been broadly flat for the first three quarters of the year,
we saw some marginal yield expansion in the fourth quarter in all
territories, which offset incremental flagship ERV growth in the
UK, Ireland and France. Moreover, all but two of our flagship
assets benefited from positive ERV movements, and all ten in the
second half of the year. We are starting to see positive valuation
movements on selected assets.
Overall, the Group recorded an
IFRS loss of £51m (FY 22: £164m loss), and a negative total
accounting return of -2.1%.
Footfall and sales
Footfall and sales performance
reflects the exceptional nature of our destinations and the
improving mix of uses. The recovery in footfall that we saw across
our assets in FY 22 continued through FY 23 with consumers also
increasingly returning to city centres, both for leisure and work.
Footfall was +3% year-on- year (UK+1%, France +7% and Ireland +4%),
closing the gap on 2019 levels, which we are now on average less
than 10% below. Average dwell time was up 5% to 88
minutes.
Overall, total sales and sales
densities have risen by mid-teens percentages since 2019, with
substantial evidence that repurposed space and new concepts
materially outperform that which it is replacing.
Consumer spending continues to be
resilient, with an improving outlook for 2024. Despite the
'cost of living' crisis, savings built during the Covid-19
pandemic, high levels of employment and strong wage growth, which
outpaced inflation in the second half of 2023, have helped underpin
continued consumer spend, along with evolving lifestyle
trends. Like-for-like sales were up 1% in
the UK and 3% for France.
Occupancy
Our core portfolio continues to
benefit from the increasing polarisation in the market and the
flight to quality reflected in the wealth of key new openings,
leasing demand and tension, and growing footfall and sales. It is
now a fact that online/offline has balanced and occupiers have now
adopted a holistic view, understanding that a high quality physical
presence is an essential part of the supply chain.
Flagship portfolio occupancy
remained strong at 95%, broadly flat year-on-year. UK flagship
occupancy stands at 95% and Ireland at 96%, with some assets in
these geographies full. France was slightly weaker at 93%
reflecting the continuing lease-up at Les 3 Fontaines
extension.
Value Retail
Value Retail delivered another
solid operational performance. Brand sales increased 10%
year-on-year and were 5% above 2019 levels. Footfall across the
Villages saw a 9% increase year-on-year but remained below 2019
levels. Sales densities grew broadly in line with footfall and were
marginally ahead of 2019, whilst spend per visit was up 1%
year-on-year and 6% ahead of 2019.
Average occupancy was 95%,
marginally up on 2022 but remaining around one percentage point
below 2019 levels. Overall, the Group's share of Adjusted earnings
was £32m (FY 22: £27m). Positive GRI growth was partially offset by
rising finance costs reflecting the refinancing in FY 22 at
Bicester and La Vallée, and higher administration costs.
Year-to-date, Hammerson has received £74m of cash distributions
from Value Retail, in part reflecting catch up payments from 2019
to 2023.
At 31 December 2023, the Group's
interest in Value Retail's property portfolio was £1.9bn, unchanged
year-on-year. Net assets were £1.1bn, down 6%, primarily due to
distributions paid to the Group. The difference between gross
and net asset value is principally due to £0.7bn of net debt within
the Villages which is non-recourse to the Group. The average LTV
across the Villages is 39%.
STRATEGY UPDATE
We own city centre destinations
and adjacent land around which we can reshape entire
neighbourhoods. Our strategy recognises the unique position that we
have in our locations and the opportunities to leverage our
experience and capabilities to create and manage vibrant 24/7,
multi-use, urban 'living spaces' that realise value for all our
stakeholders, connects our communities and delivers a positive
impact for generations to come.
Our aim is simple and clear - to
chart a path to growth that delivers strong income and total
returns for shareholders through consistent execution against our
strategic goals. Following three years of strategic and operational
progress, we are now investing for growth and value creation in our
core assets.
We are combining targeted leasing
with repurposing and redevelopment opportunities, which are
integral and complementary to our destinations, directing capital
expenditure to our core estates, where we are able to realise high
returns. This asset focus is underpinned by our now increasingly
agile platform, our strong capital structure and by our commitment
to ESG.
In FY 23, we made significant
progress towards all our goals as follows:
Investment for growth and value creation
The key source of competitive
advantage for Hammerson is the quality and location of our
destinations in some of Europe's fastest-growing cites. We have
some of the best assets in the very best prime city centre
catchments and transportation hubs, and, due to the strong ties we
have in the communities in which we operate, supportive local
authorities. Additionally, our pre-development and strategic land
represent a considerable set of unrealised long term opportunities
which we can selectively draw upon.
The consumer and occupier
landscape continues to evolve at pace. Occupiers are continuing to
shift to using physical space for a broad mix of uses, including:
point of sale; last mile fulfilment; returns; servicing;
experiential; marketing; brand development; education; workspace;
and leisure - 'living spaces'. At the same time, visitors demand
top quality environments and experiences. We continue to invest in
our assets to partner with best-in-class occupiers to cater to the
communities and catchments in which we operate, whether this be
repurposing of obsolete department store space into leisure and
modern retail, or redevelopment to residential, workspace,
healthcare and lifestyle uses.
Our investments to date have
attracted some of the very best global brands. Our leasing strategy
has evolved from an emphasis on filling space and increasing
occupancy as we emerged from the Covid-19 pandemic. We now focus
more proactively on a high quality, diverse and complementary mix
and offer for both occupiers and customers, which in turn underpins
a more diverse, resilient and higher quality income
profile.
Following our best year for
leasing in FY 22 since FY 18, our momentum continued in FY 23 with
another record year: 306 leases signed on a more focused portfolio
(FY 22: 317), a volume increase of 10% on a like-for-like basis,
representing £46m of headline rent at 100% (FY 22: £45m), or £29m
at share (FY 22: £25m), up 23% like-for-like. In this context, we
saw much greater competitive tension with occupiers not exercising
breaks to leverage better terms, which meant an additional £2m of
rent retained.
For principal deals, headline rent
was 37% ahead of previous passing rent (FY 22: +34%), continuing to
reflect strong demand, the lease up of vacant space and the
conversion of temporary leases onto long term deals. On a net
effective basis, principal deals were 12% ahead of ERV (FY 22:
+2%), with new leases +14% and renewals +8%. In terms of mix, just
under half of leasing was to best-in-class and new fashion
concepts, and the balance to non-fashion, services, leisure, food,
workspace and Printemps in France.
Providing the exceptional spaces
with high footfall, high demand, growing leasing tension and
thereby rental levels which underpins this leasing performance
requires investment: investment to repurpose obsolete or
underutilised space; investment in time to select the right brand
partners to enhance the mix and complete works to a high standard;
investment alongside key brand partners in their offer; investment
in public realm to maintain our appeal to customers and occupiers
whilst ensuring further integration with the communities we serve;
and investment in key leasing, asset management, placemaking and
marketing talent. From our investments in the last few years, we've
delivered solid returns and created value.
Looking at two key examples that
came to fruition this year:
· In
Dundrum, we opened Penneys (Primark) and Nike Live, to complete the
repurposing of the former House of Fraser space, with the backfill
allowing Dunnes Stores, which opened in November, to enter the
destination for the first time. Taken as a whole, the significant
increase in rents with an incremental ERV benefit to adjacent units
generated an IRR in excess of 20% from an investment of €31m (at
100%). Elsewhere in Dundrum, we converted underutilised storage
space to modern workspace and leased it to Western Union, bringing
a new use and income stream to the asset, as well as incremental
customers to the food and leisure oriented Pembroke Square area.
Dundrum has already seen an increase in footfall and sales
following these openings in the second half of the year.
· In
Bullring, we handed over former Debenhams space to M&S, which
also opened in November, with an extremely strong sales performance
and establishing a further consolidation of the city centre into
our estate. We also handed over the top floor space to TOCA Social
- the football themed entertainment operator - which will become
their first operation outside London when it opens in 2024. This
will strengthen the critical mass and complement the entertainment
and social operators we opened in 2023, which included Lane 7
Bowling, and a new leisure concept, VR Sandbox. We target to
complete the repositioning of the Debenhams space - representing
about 15% of the total floorspace of the Bullring - by concluding
negotiations with a best-in-class fashion operator which will
concentrate the retail pitch alongside openings in 2023, including
those to Bershka, JD Sports, Footlocker, and Pull and Bear. Taken
together we expect our investment into this repositioning project
will be around £17m (at 100%), which will not only deliver a high
double digit IRR, but also a positive halo on the performance and
presentation of the asset and the consequent rental demand and
values, which we expect to further capitalise with future lettings.
Following these openings, Bullring experienced a particularly
strong Christmas period, with sales and footfall up in stark
contrast to national indices. Importantly, it also saw an uplift in
value of £35m (at 100%), reflecting a 5% increase in ERVs
year-on-year.
We have a rich set of similar
opportunities in our core portfolio relating to former department
store space. Having proactively secured vacant possession, we have
already commenced the repurposing of the former House of Fraser
space in The Oracle, having agreed terms with Hollywood Bowl and TK
Maxx, and are in detailed negotiations with other key partners. At
the other end of the scheme, we await the outcome of a planning
application for the major regeneration of the eastern quarter,
including the former Debenhams, with the potential to develop c.450
residential units in phases alongside renewed landscaping and other
commercial uses, much in demand in this strong
catchment.
In Birmingham, we achieved
planning consent for Drum, an amenity rich workspace led proposal,
which predominantly occupies the former John Lewis Partnership
space at Grand Central and is directly served by the UK's most
connected rail station, Birmingham New Street. Strip out works have
been completed, and we are working with stakeholders to unlock the
next stages of de-risking and delivering this scheme.
In Cabot Circus, we are working up
investment plans, alongside relevant operators, to reposition and
maximise the value of major spaces including the House of Fraser
department store at the gateway to the asset and to replace the
cinema operator as part of the development of a social and
entertainment quarter.
Overall, of the department store
space the Group had at FY 19, roughly two-thirds has been
repurposed or is in advanced planning, and a third has been
sold.
Elsewhere, we continue to lease to
high quality brand partners, enhancing the quality of the mix and
bringing new uses to our destinations. Other than those already
mentioned, key deals and openings in 2023 included:
· Renewals and new deals were secured with JD Sports, Uniqlo,
Decathlon, Olympique de Marseille, Levi's, Puma, Hugo Boss, Michael
Kors and Five Guys at Les Terrasses du Port as we approach the ten
year anniversary of the opening of Marseille's super prime
destination.
· At
Les 3 Fontaines, we opened H&M in March and brought in New
Yorker to an adjacent unit later in the year, whilst
reconfigurations allowed the entry of Action, Celio and a new
leisure offering from Smile World. In the extension, additions
comprised increased presence from global brands including Eden Park
and Swarovski.
· In
Brent Cross, we signed a deal with Social Sports Society to bring a
padel tennis and other outside sports facilities to the
underutilised Southern Lands, subject to planning, alongside
reconfigurations that allowed the renewal of Boots and the
introduction of Superdrug into the scheme. We also relocated
Moorfields Eye Hospital into an underutilised area of the scheme,
after a period of testing customer appetite for alternative uses.
In 2024, we expect to create a new market hall offering, where we
have already agreed terms with three occupiers.
· In
Bullring, in addition to repurposing and new leasing related to the
former Debenhams unit, we opened the first Nike Rise concept
outside of London, brought Footasylum in for the first time, and
saw Goldsmiths undertake a significant refit and expansion which
included the introduction of a separate Rolex store.
· Westquay saw the delivery of new offers from premium
lifestyle and beauty brands Sweaty Betty and Space NK, and F&B
from Wingstop and Mettricks.
· Cabot Circus saw four portfolio firsts, including the
introduction of Stradivarius, bringing another sought-after Inditex
brand into the destination, alongside the debuts of Lounge, German
Donor Kebab and Lids.
· Meanwhile in Ireland, in Dundrum, Space NK signed a lease to
open their second store in Ireland. Both with minimal vacancy, it
was a quieter year at Pavilions and Ilac, although the former
opened a new leisure offer from Zero Latency, whilst the latter
signed a new flagship city centre store for Liverpool
FC.
Our approach to leasing works in
parallel with our greater emphasis on placemaking, which not only
serves to enliven space and enhance the experience and environment
for customers and occupiers, but also increasingly contributes
meaningfully in its own right in terms of incremental footfall,
income, and engagement across all channels. Key highlights in the
year included:
· Staging our first Late Night Out ticketed event, bringing the
after hours economy to Bullring
· We
brought the Charity Super.Mkt, the UK's first shop space bringing
multiple charities under one roof, to Brent Cross, The Oracle and
Cabot Circus, driving incremental footfall, significant media
coverage and winning us a Revo award for Pop-up of the Year. We aim
to continue working with Charity Super.Mkt through 2024.
· We
had further success bringing digitally native brands to physical
space, most notably SHEIN to Bullring and Grand Central, and UK
firsts including Trinny London's kiosk to Bullring.
· In
France, we hosted a two-week pop-up store at Les Terrasses du Port
for local rapper Jul, and then 'Sunset Live' later in the year,
which showcased local and international musical artists on the
seafront terrace, attracting significant media and influencer
attention, and involving 25 brand partners.
· Meanwhile, at Les 3 Fontaines we hosted the second edition of
the 3Festival which celebrates 'Art in all its forms' with local
partners from street art workshops to culinary battles.
· We
continue to exploit underutilised car parking space with new uses,
occupiers and events, including the UK's largest Tesla collection
point, the Florescenza garden centre, and Big Kid Circus at Brent
Cross; Skatepark with Red Bull at Cabot Circus, and the Supercar
Weekend at Dundrum.
· We
enlivened our destinations with summer bars including large
external screens showing major sporting events, and created winter
wonderlands in our unique outside spaces with Apres ski bars and
ice rinks plus a visit from the much-loved Coca Cola truck in
Bullring and Grand Central creating high footfall.
· We
increased our social media presence and partnerships with local
influencers, contributing to increased visibility and customer
engagement with our destinations.
Turning to other near term
projects which are integral to our existing assets, at Ironworks in
Dundrum, a 122 unit residential development, construction continued
during 2023. We also agreed a long term indexed lease for the
social housing units that we have built as part of the scheme and
were completed in the year.
In France, we are considering
options for incremental repurposing of underutilised space at Cergy
3, to capitalise on strong demand, following the opening of Les 3
Fontaines extension in March last year, and are in discussions on
heads of terms with two operators.
During 2023, we have been
disciplined with our resourcing and capital expenditure on our
development projects and pre-development and strategic lands;
focusing on those initiatives which give short term routes to
value, and those integral projects which add most value to our
wider estate.
The wider development market has
been somewhat fractured during the course of 2023; with viability
under pressure due to ongoing challenges with construction costs,
cost of capital and valuation yield movements, alongside
uncertainty of public policy and decisions. Nevertheless,
structural demand from occupiers - and therefore rental performance
- remains strong across most asset classes where we have exposure,
particularly in city centre locations for best-in-class workplace
and purpose-built rental apartments.
We have continued to advance
planning consents and land assembly agreements across the
portfolio, which is capital light. In Ireland, we expect the
initial planning consents to be finalised in 2024 at Dublin Central
and there are ongoing discussions with potential end users, while
our planning application for a strategic residential masterplan at
Dundrum Phase II remains in consideration with the local authority.
At Martineau Galleries, part of the wider Birmingham Estate, we
have been working closely with Birmingham City Council and other
stakeholders to ensure that we have a route to prepare for the
development of this multi-use estate which will complement and
benefit from our other holdings in the city.
Lastly, in our longer term
development opportunities, standing alone from existing
destinations, we exited our 50% share of all land and corporate
interests at Croydon at a narrow discount to book value, as well as
some small land interests in Clonsilla, Dublin, focusing our core
portfolio and creating additional liquidity for investment. At
Eastgate, Leeds, we have agreed to update an historical development
agreement with the City Council paving the way to unlock the value
of the site. At Bishopsgate Goodsyard, we are progressing with
detailed design and feasibility, the procurement of initial
demolition and preparation works, and engagement with Network
Rail.
Agile platform
We have transformed our platform
and cost base to create an organisation focused on growth and value
creation. We took decisive action in 2021 and 2022, shifting from
a top heavy, geographically oriented and
siloed organisation to a simplified, asset-centric operating
model.
In 2023, we continued to drive
efficiencies and adapt our ways of working, both in terms of
technology - systems and automation - and in terms of greater
collaboration, encouraging cross pollination of ideas and practices
between asset management, leasing, placemaking and marketing, ESG,
strategy and insights, finance and
communications.
We are creating a high
performance, high engagement culture with an emphasis on strategic
value creation focused on asset management and delivery,
placemaking and the repositioning of our assets. Property
management and associated accounting services have largely been
consolidated to proven third party partners of scale.
In 2023, we implemented the
consolidation of our property management suppliers in the UK in
February, and similar activity in France in the second half. Our
164 colleagues are now focused on strategic tasks as a result of
the overhaul of our operations.
The actions we have taken over the
last three years in realigning our portfolio and business model as
well as introducing new systems, tools and more efficient ways of
working have necessarily resulted in a reduction of headcount of
68% since FY 20. This has delivered a gross administration cost
reduction of 24%.
By introducing these agile, more
efficient and sustainable ways of working we are increasing speed
to market and productivity. Today, we deliver more leasing and
commercialisation activity than in 2019, with a leaner team, on a
more focused portfolio. Other sources of savings include reductions
in work space in the UK and France, insurance renewals, and a
rigorous management of costs in general. We
have also increased our efforts on employee engagement and talent management as part of our
strategy to retain and develop key talent and we continue to invest
in and promote key talent to be fit for the future.
Sustainable and resilient capital structure
Our capital allocation framework
remains the same. We will maintain a stable and resilient capital
structure, with an IG credit rating, to maintain access to capital
markets. We are committed to a sustainable and growing cash
dividend, covered by cashflow, and balanced with our total returns
focus. We are mindful of our cost of capital, but will remain
opportunistic on capital deployment. After strengthening of the
balance sheet, our priority is to invest for growth and value
creation.
Today, we have a resilient balance
sheet, ample liquidity, and have maintained our IG credit rating.
In 2023, in France we completed the sale of our 25% share of Italie
Deux, and 100% of the Italik extension, and our 50% share of our
interests in Croydon, together with non-core land in the UK and
Ireland, generating gross proceeds of £216m. Moreover, £125m of secured
debt has been derecognised in connection with our exits from
non-core assets in Highcross and O'Parinor.
Since the balance sheet date, we
have exchanged unconditional contracts for the disposal of Union
Square to an affiliate of Lone Star Real Estate Fund VI L.P. for
gross proceeds of £111m, taking total proceeds since FY 21 to £521m
and thereby completing our targeted £500m disposals programme. In
September 2023, we issued a £100m increase
of our existing £200m 7.25% coupon bonds maturing in 2028. The new
issue was priced at a yield of 9.1%. In parallel, we redeemed £100m
of our 3.5% coupon bonds maturing in 2025 and 6.0% coupon bonds
maturing in 2026, at a discount of £4m.
Overall, net debt reduced 23% to
£1,326m at 31 December 2023. Headline LTV stood at 34% (FPC: 44%),
down from 39% (FPC: 47%) at FY 22. Net debt to EBITDA improved to
8.0x from 10.4x. At 31 December 2023, the Group had liquidity
of £1.2bn in the form of cash balances
(£570m) and undrawn committed RCFs (£655m), and had no significant
unsecured refinancing requirements until 2026 not covered by
existing cash.
Environmental, Social and Governance
Our ESG agenda grew in 2023, with
a continued focus on achieving our targets, addressing both the
Climate and Nature emergencies, whilst continuing to deliver an
expanded Social Value programme.
We commenced our Net Zero Asset
Plan (NZAP) programme of works focusing on degasification in
Ireland, renewable energy in France, and HVAC and lighting design
in the UK. To support this, we also undertook revised Physical
Climate Risk Assessments in the UK and Ireland. These combine with
our NZAPs to ensure a diligent, asset-centric approach to climate
risk mitigation. Alongside the delivery of the NZAP projects across
our destinations, renewable energy purchasing with true
'additionality' is a central pillar of our Net Zero transition and
we are proactively seeking a Corporate Power Purchase Agreement
(CPPA) to support our 2025 interim carbon target. Overall, our
like-for-like scope 1, 2 and landlord 3 carbon emissions are down
13% year-on-year, and 35% since 2019.
Our climate and energy focus
continues to receive external focus with Pavilions, Swords winning
a Best Energy Achievement in Retail and Best Overall Achievement at
the Business Energy Achievement Awards 2023 (Ireland) for going gas
free in 2023, four years ahead of schedule. In addition to this we have launched a quantifiable program
to deliver nature based action plans for each asset. This
recognises that globally we are experiencing two emergencies,
Nature and Climate. The rapid biodiversity loss globally not only
needs to be addressed to maintain
essential ecosystems but also to ensure a low carbon future aligned
to the Paris agreement. In 2023 we took the step to gift a woodland
and natural grassland in Lowestoft to the Wildlife Trust. This land
gift recognised the natural value of the land over its commercial
value and ensure it is preserved for nature and the community for
the foreseeable future.
From a Social Value perspective,
we delivered asset-centric events to support the communities we
serve whilst also continuing to support our corporate charity
partner, LandAid. We also introduced an all-colleague Giving Back
Day which coincided with volunteering week and will occur annually
in the future. We had very high participation rates of more than
90%, with 152 colleagues taking part doing everything from CV
workshops to clearing wetlands.
We continued to focus on
benchmarks identified by our stakeholders as key to their decision
making. We rank as one of the top property companies in ISS ESG
with a score of C+. We maintained our low-risk rating by
Sustainalytics, making us a regional leader, and we also regained
our 4-star GRESB rating with a ten-point score improvement to 85
points. We also achieved a related GRESB ESG public disclosure
score of 96/100, scoring us an A, which ranks us first out of our
peers in our transparency surrounding our ESG practices.
CONCLUSION AND OUTLOOK
Since FY 20, we have navigated the
Company through a high-risk period of deleveraging and
repositioning. We have realigned our portfolio to a core of unique
city centre destinations, started to deliver strong investment
returns in our properties, and we have ample further opportunity to
invest for growth and value creation. In the wider portfolio, we
remain capital disciplined and have realised value from our
pre-development and strategic lands, most recently with the exit
from Croydon.
At the same time, we have
transformed our platform. We have become leaner and 'developed
muscle', with headcount and costs down by more than two-thirds and
a quarter respectively since FY 20, but with speed to market and
performance increased. We remain committed to a high performance,
high engagement culture with the right talent to be fit for the
future.
Whilst our eyes are open to the
current macro-economic environment, our
occupiers are thriving and our visitor numbers are on the rise in
our realigned portfolio. City centres remain the dominant locations
for commerce and lifestyle. Our destinations are in high demand by
occupiers and visitors. The importance of a physical presence in a
digitally integrated strategy for best-in-class operators is
undeniable.
Over time, we have a unique
opportunity to complement our core with a broader mix of uses by
repurposing existing space, consolidating, and unlocking value on
adjacent land. We have a strong platform with long term visibility
of income. We are confident in our ability to grow top line and
earnings off a new base, and therefore create value for
shareholders in the years to come.
FINANCIAL REVIEW
Overview
2023 has been another year of significant
financial progress.
Adjusted earnings for 2023 of £116m were 11%
higher than 2022. Key drivers were underlying rental growth; lower
gross administration and net finance costs; higher earnings from
Value Retail; partly offset by income foregone from disposals. We
returned to the payment of cash dividends. In addition to the
interim dividend of 0.72p per share, the Directors have recommended
a final dividend of 0.78p per share, bringing the full year cash
dividend to 1.50p per share.
IFRS reported losses decreased to £51m
compared with £164m in 2022. The reduction was due to lower
revaluation losses, principally associated with outward yield
shift, of £127m in 2023 compared with £282m in 2022.
Net assets at 31 December 2023 were £2,463m
(2022: £2,586m). EPRA NTA per share was 51p (2022:53p), equivalent
to a total accounting return of -2.1% (2022: -6.8%).
Net debt reduced by £406m, or 23%, to £1,326m
at 31 December 2023 benefiting from disposal proceeds of £216m, the
derecognition of £125m of secured debt, £104m of cash generated
from operations and £74m of distributions from Value Retail. The
reduction strengthened the Group's balance sheet and credit
metrics, with year end headline LTV of 34% (2022: 39%) and LTV on a
fully proportional consolidation basis of 44% (2022: 47%). Net
debt:EBITDA improved to 8.0x (2022: 10.4x). The Group also has
ample liquidity in cash and undrawn committed facilities of
£1.2bn.
Presentation of financial
information
IFRS vs Proportional
consolidation
The Group's property portfolio comprises
properties that are either wholly owned or co-owned with third
parties.
While the Group prepares its financial
statements under IFRS (the 'Reported Group'), the Group evaluates
the performance of its portfolio for internal management reporting
by aggregating its wholly owned businesses together with its share
of joint ventures and associates which are under the Group's
management ('Share of Property interests') on a proportionally
consolidated basis, line-by-line (in total described as the Group's
'Managed portfolio').
The Group's investment in Value Retail is not
proportionally consolidated because it is not under the Group's
management, is independently financed and has differing operating
metrics to the Group's Managed portfolio. Accordingly, it is
accounted for separately as 'Share of results of associates' as
reported under IFRS and is also excluded from the Group's
proportionally consolidated key metrics such as net debt or
like-for-like net rental income growth.
However, for certain of the Group's
Alternative Performance Measures (APMs), for enhanced transparency,
we do disclose certain metrics combining both the Managed portfolio
and Value Retail. These include property
valuations, property returns and certain credit
metrics.
Both IFRS and Management reporting bases are
presented in the Group's financial statements with supporting
analysis and reconciliations between management and IFRS bases in
the Additional Information section.
Management reporting and IFRS accounting
treatment
|
Comprising properties which are
|
Accounting treatment
|
Management reporting
|
|
|
Managed portfolio
|
- Wholly owned and Share of Property interests
|
Proportionally
consolidated
|
Value Retail
|
- Held as an associate
|
Single line - results/investment
in associates
|
IFRS
|
|
|
Managed portfolio:
|
|
|
- Reported Group
|
- Wholly owned
- Jointly owned1
|
Fully consolidated
Consolidation of Group's
share
|
- Share of Property
interests
|
- Held in joint ventures
- Held in associates2
|
Single line - results/investment
in joint ventures
Single line - results/investment
in associates
|
Value Retail
|
- Held as an associate
|
Single line - results/investment
in associates
|
1 See note 11A to the
financial statements for information on the Group's two joint
operations (Pavilions, Swords and Ilac Centre, Dublin)
2 Only includes the Group's 25%
investment in Italie Deux until its disposal on 31 March
2023.
Derecognition of Highcross and
O'Parinor
During 2023, the Group derecognised its
Highcross and O'Parinor joint ventures in which it had 50% and 25%
interests respectively at 31 December 2022.
These two joint ventures had a total of £125m
of borrowings secured against their individual property interests.
These borrowings were non-recourse to the Group. At 31 December
2022, both loans were in breach of certain conditions and the Group
was working constructively with the respective lenders on
options to realise 'best value' for all
stakeholders.
On 9 February 2023, a receiver was appointed
by the lenders to administer Highcross for the benefit of the
creditors. As a result of no longer having joint control, the Group
derecognised its share of assets and liabilities, including the
property value and £80m of secured borrowings. There was no loss on
derecognition as the Group's joint venture investment in Highcross
had been fully impaired at 31 December 2021, from which date the
Group had ceased recognising the results of this joint venture in
the income statement.
On 30 June 2023, the lenders to O'Parinor took
control of the joint venture and the Group therefore impaired its
joint venture investment by £22m and derecognised its share of
assets and liabilities, including the property value and £45m of
secured borrowings.
Alternative performance measures
(APMs)
The Group uses a number of APMs, being
financial measures not specified under IFRS, to monitor the
performance of the business. Many of these measures are based on
the EPRA Best Practice Recommendations (BPR) reporting framework
which aims to improve the transparency, comparability and relevance
of the published results of listed European real estate companies.
Details on the EPRA BPR can be found on
www.epra.com and the Group's key EPRA metrics are
shown in Table 1 of the Additional information.
We present the Group's results on
an IFRS basis but also on an EPRA, Headline and
Adjusted basis as explained in note 1C to the financial statements.
The Adjusted basis enables us to monitor the underlying operations
of the business on a proportionally consolidated basis as described
in the basis of preparation and excludes capital and non-recurring
items such as revaluation movements, gains or losses on the
disposal of properties or investments, as well as other items which
the Directors and management do not consider to be part of the
day-to-day operations of the business. Such excluded items are in
the main reflective of those excluded for EPRA earnings, but
additionally exclude certain cash and non-cash items which we deem
not to be reflective of the normal routine operating activities of
the Group. We believe that disclosing such non-IFRS measures
enables evaluation of the impact of such items on results to
facilitate a fuller understanding of performance from period to
period. These items, together with EPRA and Headline adjustments
are set out in more detail in note 9A to the financial
statements.
For 2023, adjusting items additional to EPRA
adjusting items comprised:
· Exclusion of a
charge of £13.2m (2022: £5.1m) in respect of business
transformation costs as the Group continues its implementation of
strategic change and refining its operating model. This charge
comprises mainly non-capitalisable costs relating to digital
transformation as well as severance and other costs associated with
team and operational restructuring.
· A charge of
£0.3m (2022: credit of £2.4m) to reverse expected credit losses
charged to the income statement but where the related income is
deferred on the balance sheet such that the exclusion of this
removes the distortive mismatch this causes.
INCOME STATEMENT
Summary income
statement
|
2023
£m
|
2022
£m
|
Change
£m
|
Gross rental income
|
208.4
|
215.2
|
(6.8)
|
Net service charge expenses and
cost of sales
|
(40.9)
|
(40.4)
|
(0.5)
|
Adjusted net rental
income
|
167.5
|
174.8
|
(7.3)
|
Adjusted gross administration
expenses
|
(51.5)
|
(59.8)
|
8.3
|
Other income
|
14.9
|
17.0
|
(2.1)
|
Profit from operating
activities
|
130.9
|
132.0
|
(1.1)
|
Value Retail Adjusted
earnings
|
32.1
|
27.4
|
4.7
|
Operating profit
|
163.0
|
159.4
|
3.6
|
Adjusted net finance
costs
|
(45.9)
|
(54.0)
|
8.1
|
Tax charge
|
(0.8)
|
(0.5)
|
(0.3)
|
Adjusted earnings
|
116.3
|
104.9
|
11.4
|
Revaluation losses - Managed
portfolio
|
(119.1)
|
(221.0)
|
101.9
|
Revaluation losses - Value
Retail
|
(7.7)
|
(60.7)
|
53.0
|
(Loss)/profit on sale of
properties
|
(17.8)
|
0.6
|
(18.4)
|
Impairment of joint
venture
|
(22.2)
|
-
|
(22.2)
|
Business transformation
costs
|
(13.2)
|
(5.1)
|
(8.1)
|
Other (see note 9A to the financial
statements)
|
12.3
|
17.1
|
(4.8)
|
IFRS Loss for the year
|
(51.4)
|
(164.2)
|
112.8
|
(Loss)/earnings per
share
|
pence
|
pence
|
pence
|
Basic
|
(1.0)
|
(3.3)
|
2.3
|
Adjusted
|
2.3
|
2.1
|
0.2
|
For the year ended 31 December 2023 the Group
reported an IFRS loss of £51.4m (2022: £164.2m loss), a reduction
of £112.8m. The key factors in the reduced loss were lower
revaluation losses of £154.9m partly offset by the year-on-year
change in the loss/profit on sale of properties of £18.4m and an
impairment charge of £22.2m in 2023 in relation to the Group's
O'Parinor joint venture.
On an Adjusted basis, earnings increased by
£11.4m to £116.3m (2022: £104.9m). Adjusted net rental income was
£7.3m lower, £11.2m was due to disposals partly offset by £4.8m
higher income from the like-for-like Managed portfolio, equivalent
to 3.6% growth. Gross administration costs were £8.3m, or 14%,
lower reflecting reduced headcount and corporate costs. The Group's
share of Value Retail Adjusted earnings grew by £4.7m and adjusted
net finance costs were £8.1m lower, reflecting reduced debt levels
and increased income from cash deposits benefiting from the higher
interest rate environment.
A detailed reconciliation from Reported Group
to the proportionally consolidated basis is set out in note 2 to
the financial statements and further details on reconciling items
between Adjusted earnings and IFRS loss are in note 9A to the
financial statements.
Rental income
Analysis of rental income
Proportionally consolidated
|
|
Gross rental income
£m
|
Change in like-for-like
|
Adjusted
net rental income
£m
|
Change in like-for-like
|
|
Year ended 31 December
2022
|
|
215.2
|
|
174.8
|
|
|
Like-for-like Managed
portfolio:
|
|
|
|
|
|
|
- UK
|
|
5.9
|
6.8%
|
2.3
|
3.2%
|
|
- France
|
|
0.4
|
1.4%
|
0.5
|
1.8%
|
|
- Ireland
|
|
2.2
|
5.7%
|
2.0
|
6.0%
|
|
|
|
8.5
|
5.5%
|
4.8
|
3.6%
|
|
Disposals
|
|
(17.8)
|
|
(11.2)
|
|
|
Developments and other
|
|
0.4
|
|
(2.7)
|
|
|
Foreign exchange
|
|
2.1
|
|
1.8
|
|
|
Year ended 31 December
2023
|
|
208.4
|
|
167.5
|
|
|
Gross rental income decreased by a net £6.8m to
£208.4m. Disposals reduced income by £17.8m, principally Silverburn
and Victoria Leeds in 2022 and Italie Deux and Croydon in 2023.
This was partly offset by growth in like-for-like income of £8.5m,
or 5.5%. 60% of the growth was due to higher base rent consistent
with the Group's strong leasing performance and the remainder was
due to year-on-year increases in variable rent (turnover rent and
car park and commercialisation income).
Adjusted net rental income decreased by a net
£7.3m to £167.5m. Disposals reduced NRI by £11.2m. From a
like-for-like perspective, UK adjusted NRI grew by 3.2%, with lower
void costs and the strong like-for-like GRI growth of 6.8% partly
offset by the year-on-year change in bad debt charges where 2022
benefited from credits due to the reversals of provisions
associated with the strong improvement in collections post
Covid-19. Income growth in France of 1.8% was muted due to the
adverse impact of a small number of tenants entering
administration. Ireland was the strongest
performing country with growth of 6.0%, benefiting from the
reversal of prior year bad debt charges as collection rates
improved.
Further analysis of net rental income by
segment is provided in Table 3 of the Additional
information.
Analysis of rental income
Rental income is further analysed below between
the Group's various ownerships.
|
|
|
|
|
2023
|
|
|
Share of Property
interests
|
|
Proportionally consolidated
|
Reported Group
£m
|
Joint
Ventures
£m
|
Associates
£m
|
Subtotal
£m
|
Total
£m
|
Gross rental income
|
92.8
|
114.4
|
1.2
|
115.6
|
208.4
|
Net service charge expenses and
cost of sales
|
(17.2)
|
(24.0)
|
-
|
(24.0)
|
(41.2)
|
Net rental income
|
75.6
|
90.4
|
1.2
|
91.6
|
167.2
|
Change in provision for amounts not
yet recognised in the income statement
|
0.2
|
0.1
|
-
|
0.1
|
0.3
|
Adjusted net rental
income
|
75.8
|
90.5
|
1.2
|
91.7
|
167.5
|
|
|
|
|
|
2022
|
|
|
Share of Property
interests
|
|
Proportionally consolidated
|
Reported Group
£m
|
Joint
Ventures
£m
|
Associates
£m
|
Subtotal
£m
|
Total
£m
|
Gross rental income
|
90.2
|
119.4
|
5.6
|
125.0
|
215.2
|
Net service charge expenses and
cost of sales
|
(12.9)
|
(23.9)
|
(1.2)
|
(25.1)
|
(38.0)
|
Net rental income
|
77.3
|
95.5
|
4.4
|
99.9
|
177.2
|
Change in provision for amounts not
yet recognised in the income statement
|
(0.9)
|
(1.5)
|
-
|
(1.5)
|
(2.4)
|
Adjusted net rental
income
|
76.4
|
94.0
|
4.4
|
98.4
|
174.8
|
Administration expenses
Proportionally consolidated
|
2023
£m
|
2022
£m
|
Employee costs - excluding variable
costs
|
25.0
|
29.2
|
Variable employee costs
|
10.3
|
9.6
|
Other corporate costs
|
16.2
|
21.0
|
Adjusted gross administration
costs
|
51.5
|
59.8
|
Property fee income
|
(8.4)
|
(11.5)
|
Joint venture and associate
management fee income
|
(6.5)
|
(5.5)
|
Other income
|
(14.9)
|
(17.0)
|
Adjusted net administration
expenses
|
36.6
|
42.8
|
Business transformation
costs
|
13.2
|
5.1
|
Net administration
expenses
|
49.8
|
47.9
|
During 2023, Adjusted net administration
expenses decreased by £6.2m against 2022. Gross administration
costs fell by £8.3m reflecting the Group's focus on cost reduction,
partly offset by a reduction in other income of £2.1m due to
disposals, principally in France. The most significant elements of
the cost reduction were:
· Employee costs,
including variable costs, were £3.5m (9%) lower reflecting the
organisational restructuring and simplification of the Group's
operating model in 2023. Average headcount, excluding employees
recharged to tenants, reduced from 225 in 2022 to 175 in
2023.
· Other corporate
costs, comprising mainly professional fees, premises costs and
software licences, fell by £4.8m (23%). The two most significant
areas of savings were premises costs, with downsized relocations in
both the UK and France during the year; and a decrease of £1.5m in
corporate insurances, with the most significant reduction in
Directors and Officers insurance premiums reflecting the
strengthening of the Group's financial position.
Business transformation costs of £13.2m in
2023 comprised mainly severance costs directly associated with the
simplification of the Group's operating model and fees for
contractors and consultants from the Group's digitalisation
programme, both of these matters were key outputs of the Group's
strategic and operational review undertaken in 2021 and do not
reflect underlying trading.
Disposals and assets held for
sale
During 2023, we realised gross proceeds of
£216m, relating mainly to the disposals of the Group's interests in
Italie Deux (including the Italik extension) and our standalone
development interests in Croydon. In total, disposals in the year
resulted in a loss on disposal of £18m, and these disposals were at
an average 5% discount (based on gross proceeds) to 31 December
2022 book value.
Since the year end, we exchanged contracts for
the sale of Union Square, Aberdeen for gross proceeds of £111m,
representing an 8% discount to book value at 31 December 2023. This
disposal concludes the Group's £500m non-core disposal program
commenced in 2022.
Share of results of joint
ventures
A listing of our interests in joint ventures
is included in note 12 to the financial statements. On an IFRS
basis, the Group's share of results in 2023 was £9.4m (2022: £41.5m
loss). The £50.9m improvement was principally due to lower
revaluation losses in 2023 of £73.9m compared with losses of
£132.1m 2022.
On an Adjusted basis, our share of results
from joint ventures was £85.0m (2022: £88.1m). The £3.1m
year-on-year reduction was principally due to the disposals of the
Group's investments in Croydon in 2023 and Silverburn in 2022, and
the derecognition of O'Parinor in June 2023.
Given that five out of six of our UK flagship
destinations and Dundrum, the largest asset of our Ireland
flagships, are held in joint ventures the financial and operating
performance of these assets is consistent with the proportionally
consolidated performance explained in this Review and shown in the
Additional Information. The two French flagship destinations are
wholly owned.
Share of results of
associates
Following the sale of the Group's investment
in Italie Deux in March 2023, at 31 December 2023 the Group's sole
associate investment was Value Retail. On an IFRS basis, the
Group's share of results in 2023 was £16.0m compared with a loss of
£7.1m in 2022. The year-on-year increase of £23.1m was principally
due to lower revaluation losses in 2023 of £7.7m compared with
losses of £66.9m in 2022, partly offset by losses on the fair value
of derivatives of £11.1m in 2023 compared to gains of £18.1m in
2022 and a year-on-year increase in profit from operating
activities of £6.6m.
On an Adjusted basis, our share of results
from associates was £33.3m (Value Retail: £32.1m, Italie Deux:
£1.2m) compared with £31.8m (Value Retail: £27.4m, Italie Deux:
£4.4m) in 2022. The £4.7m year-on-year increase in Adjusted
earnings from Value Retail was due to £14.4m higher gross rental
income reflecting stronger sales and the benefits from indexed
rents. This growth was partly offset by increased administration
costs of £3.4m and finance costs of £7.5m, this latter change
relating to the refinancing of the loans secured against La Vallée
and Bicester in 2022. The reduction in Italie Deux reflects its
disposal in March 2023.
Value Retail's Adjusted earnings reflected an
effective yield of 2.7% as a percentage of the Group's investment
at the start of the year (2022: 2.4%).
Net finance costs
Proportionally consolidated
|
|
|
2023
|
|
|
2022
|
|
Reported Group
£m
|
Share of Property interests
£m
|
Total
£m
|
Reported Group
£m
|
Share of Property interests
£m
|
Total
£m
|
Adjusted finance income
|
30.9
|
4.1
|
35.0
|
26.4
|
-
|
26.4
|
|
|
|
|
|
|
|
Finance costs
|
|
|
|
|
|
|
Gross interest costs
|
(72.0)
|
(8.9)
|
(80.9)
|
(74.9)
|
(6.7)
|
(81.6)
|
Interest capitalised
|
-
|
-
|
-
|
1.2
|
-
|
1.2
|
Adjusted finance costs
|
(72.0)
|
(8.9)
|
(80.9)
|
(73.7)
|
(6.7)
|
(80.4)
|
|
|
|
|
|
|
|
Adjusted net finance
costs
|
(41.1)
|
(4.8)
|
(45.9)
|
(47.3)
|
(6.7)
|
(54.0)
|
Debt and loan facility cancellation
costs
|
-
|
-
|
-
|
(1.3)
|
-
|
(1.3)
|
Discount on redemption of
bonds
|
4.3
|
-
|
4.3
|
-
|
-
|
-
|
Change in fair value of
derivatives
|
0.7
|
(1.8)
|
(1.1)
|
(14.4)
|
4.1
|
(10.3)
|
IFRS net finance costs
|
(36.1)
|
(6.6)
|
(42.7)
|
(63.0)
|
(2.6)
|
(65.6)
|
Adjusted net finance costs were £45.9m, a
decrease of £8.1m compared with 2022. The decrease was driven by
the benefits of deleveraging since the start of 2022, early
repayment of debt utilising proceeds from disposals, the related
restructuring of hedging derivatives and higher interest income
from cash deposits benefiting from the higher interest rate
environment.
In the second half of 2023, we repurchased
£12m of the Group's £350m 3.5% bonds maturing in 2025 and £88m of
the Group's 6.0% bonds maturing in 2026 at £4.3m below book value.
This latter amount has been recognised in finance income in 2023,
and given its one-off nature has been excluded from the Group's
Adjusted earnings.
Tax
Due to the Group having tax exempt status in
its principal operating countries the tax charge, on a
proportionally consolidated basis, remained low at £0.8m (2022:
£0.5m).
The low tax charge reflects that the Group
benefits from being a UK REIT and French SIIC and its Irish assets
are held in a QIAIF. The Group is committed to remaining in these
tax exempt regimes and further details on these regimes are given
in note 7 to the financial statements. In order to satisfy the REIT
conditions, the Company is required, on an annual basis, to pass
certain business tests. The Group is expected to meet all
requirements for maintaining its REIT status for the year ended 31
December 2023.
Dividends
As explained in the Chair of the Board's
Statement, the Group announced a new sustainable dividend policy of
60-70% of annual Adjusted earnings during the year with an interim
cash dividend of 0.72p per share paid in October.
The Board has proposed a final cash dividend
of 0.78p per share, payable as an ordinary dividend on 10 May 2024
to shareholders on the register on 5 April 2024. A dividend
reinvestment plan ('DRIP') remains available to
shareholders.
NET ASSETS
A detailed analysis of the balance sheet on a
proportionally consolidated basis is set out in Table 12 of the
Additional information with a summary reconciling to EPRA NTA set
out in the table below:
|
|
|
|
|
2023
|
|
|
|
2022
|
|
Summary net assets
|
Reported Group
£m
|
Share of Property interests
£m
|
EPRA
adjustments
£m
|
EPRA NTA Total
£m
|
Reported Group
£m
|
EPRA adjustments £m
|
Share of Property interests
£m
|
EPRA NTA
Total
£m
|
|
Investment and trading
properties
|
1,396
|
1,380
|
-
|
2,776
|
1,497
|
1,723
|
-
|
3,220
|
|
Investment in joint
ventures
|
1,193
|
(1,193)
|
-
|
-
|
1,342
|
(1,342)
|
-
|
-
|
|
Investment in associates
|
- Value Retail
|
1,115
|
-
|
79
|
1,194
|
1,189
|
-
|
52
|
1,241
|
|
- Italie Deux
|
-
|
-
|
-
|
-
|
108
|
(108)
|
-
|
-
|
Net trade receivables
|
28
|
15
|
-
|
43
|
23
|
19
|
-
|
42
|
|
Net debt1
|
(1,163)
|
(163)
|
-
|
(1,326)
|
(1,458)
|
(274)
|
(1)
|
(1,733)
|
|
Other net liabilities
|
(106)
|
(39)
|
-
|
(145)
|
(115)
|
(18)
|
(3)
|
(136)
|
|
Net assets
|
2,463
|
-
|
79
|
2,542
|
2,586
|
-
|
48
|
2,634
|
|
|
|
|
|
|
|
|
|
|
|
EPRA NTA per
share2
|
|
|
|
51p
|
|
|
|
53p
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
1 See Table 13 in Additional Information
for further details.
2 EPRA adjustments in accordance with
EPRA best practice, principally in relation to deferred tax, as
shown in note 9B to the financial statements.
During 2023, net assets decreased 5% to £2,463m
(2022: £2,586m). Net assets, calculated on an EPRA Net Tangible
Assets (NTA) basis, were £2,542m, or 51p per share, a reduction of
2p compared to 31 December 2022 and is equivalent to a total
accounting return of -2.1%
(see Table 15 in Additional Information). The key components of the
movement in Reported Group net assets and EPRA NTA are shown in the
table below:
Movement in net assets
|
Group net assets
£m
|
EPRA adjustments £m
|
EPRA NTA £m
|
1 January 2023
|
2,586
|
48
|
2,634
|
Property revaluation
|
- Managed portfolio
|
(119)
|
-
|
(119)
|
|
- Value Retail
|
(8)
|
-
|
(8)
|
Adjusted earnings
|
116
|
-
|
116
|
Disposal and impairment
losses
|
(40)
|
-
|
(40)
|
Change in deferred tax
|
(2)
|
1
|
(1)
|
Dividends
|
(36)
|
-
|
(36)
|
Foreign exchange and other
movements
|
(34)
|
30
|
(4)
|
31 December 2023
|
2,463
|
79
|
2,542
|
PROPERTY PORTFOLIO
ANALYSIS
Portfolio valuation
The Group's external valuations continue to be
conducted by CBRE Limited (CBRE), Cushman and Wakefield LLP
(C&W) and Jones Lang LaSalle Limited (JLL), providing
diversification of valuation expertise across the Group. At 31
December 2023 the majority of our UK flagship destinations have
been valued by JLL and CBRE, the French portfolio by JLL, and the
Irish portfolio, Value Retail and Brent Cross have been valued by
C&W. This is unchanged from 31 December 2022.
There have been a limited number of comparable
transactions in the Group's investment markets during 2023, with
the higher interest rate environment and lower levels of liquidity
resulting in an outward movement in valuation yields. However,
there has been a growing polarisation based on asset quality from
both an occupational and investment perspective, with the outward
yield movements being more pronounced for less prime assets.
Valuers have also begun to differentiate between properties based
on future capital expenditure requirements.
At 31 December 2023, the Group's portfolio was
valued at £4,662m, a reduction of £445m since 31 December 2022.
This movement was primarily due to disposals, including the
derecognition of Highcross and O'Parinor, of £331m; revaluation
losses of £127m; adverse foreign exchange losses of £61m, partly
offset by capital expenditure of £74m. Movements in the portfolio
valuation are shown in the table below.
Movements in property
valuation
Proportionally consolidated
including Value Retail
|
UK
£m
|
France
£m
|
Ireland
£m
|
Total flagships
£m
|
Develop-ments and other
£m
|
Managed portfolio
£m
|
Value
Retail
£m
|
Group portfolio
£m
|
At 1 January 2023
|
871
|
1,241
|
676
|
2,788
|
432
|
3,220
|
1,887
|
5,107
|
Capital expenditure
|
14
|
14
|
6
|
34
|
13
|
47
|
27
|
74
|
Disposals
|
-
|
(151)
|
-
|
(151)
|
(55)
|
(206)
|
-
|
(206)
|
Derecognition of Highcross and
O'Parinor
|
-
|
(62)
|
-
|
(62)
|
(63)
|
(125)
|
-
|
(125)
|
Yield
|
(17)
|
(27)
|
(36)
|
(80)
|
(1)
|
(81)
|
-
|
(81)
|
Income
|
1
|
12
|
(1)
|
12
|
(4)
|
8
|
(4)
|
4
|
Development and other
costs
|
(6)
|
-
|
-
|
(6)
|
(40)
|
(46)
|
(4)
|
(50)
|
Revaluation losses
|
(22)
|
(15)
|
(37)
|
(74)
|
(45)
|
(119)
|
(8)
|
(127)
|
Foreign exchange
|
-
|
(24)
|
(15)
|
(39)
|
(2)
|
(41)
|
(20)
|
(61)
|
At 31 December 2023
|
863
|
1,003
|
630
|
2,496
|
280
|
2,776
|
1,886
|
4,662
|
Capital expenditure
During the year, capital expenditure on the
Managed portfolio was £47m, of which £34m was on the Group's
Flagship portfolio reflecting reconfiguration works, including the
repurposing of the former Debenhams at Bullring where M&S and
TOCA Social opened in the year, and lease incentives directly
related to the Group's record leasing volume in 2023. In addition,
£13m was invested in the Group's Developments and other portfolio,
with £5m spent on the on-site development of the Ironworks
residential scheme at Dundrum. Other key areas of expenditure were
to advance planning at Bishopsgate Goodsyard and Dublin Central.
Table 11 of the Additional information analyses the spend between
the creation of additional area and that relating to the
enhancement of existing space.
Disposals, principally the Group's share of
Italie Deux (including the Italik extension) and Croydon in the
first half of the year, reduced the portfolio by £206m, with a
further £125m reduction due to the derecognition of Highcross and
O'Parinor.
Revaluation losses
In 2023, we recognised a total revaluation
loss across the Group portfolio of £127m, comprising £119m in
respect of the Managed portfolio and £8m in Value Retail. £81m, or
64%, of these losses was due to the Group's valuers moving out
yields to reflect the higher interest rate environment and lower
levels of market liquidity. The remainder of the losses related to
development and other cost factors, principally adverse changes to
residual valuations on the Developments and other portfolio
associated with outward yield shift on end values and project cost
inflation.
UK flagship destinations reported a
revaluation deficit of £22m, £17m was due to outward yield shift
averaging 10 basis points ('bps'), with the remaining £5m
associated with capital expenditure, principally the recognition of
a cladding allowance at Union Square. Bullring saw a revaluation
gain in the year of £11m, the yield was stable reflecting the
recent investment to repurpose the former Debenhams and the strong
leasing performance leading to higher ERVs.
In France, yields moved out by 10bp equivalent
to a revaluation deficit of £27m, this was partly offset by income
growth, with like-for-like ERVs 2.5% higher, equivalent to a
revaluation gain of £12m. While Ireland reported a revaluation
deficit of £37m, of which £36m was due to outward yield shift
averaging 30bp.
Value Retail values were broadly flat during
the year, with capital expenditure offset by a marginal revaluation
loss of £8m and adverse foreign exchange of £20m.
Further valuation analysis is included in
Table 9 of the Additional information.
Like-for-like
ERV1
Flagship destinations
|
2023
%
|
2022
%
|
UK
|
1.8
|
(3.8)
|
France
|
2.5
|
(1.6)
|
Ireland
|
0.2
|
0.3
|
|
1.7
|
(2.2)
|
1 Calculated on a constant currency
basis for properties owned throughout the relevant reporting
period.
Like-for-like ERVs grew by 1.7% during 2023. In
the second half of the year ERVs were marked up at all of the
Group's flagship destinations, equivalent to growth of
1.6%.
UK ERVs were 1.8% higher, reflecting the
strong leasing performance and investment to attract
'best-in-class' occupiers. Bullring had the strongest growth at
5.0% over the year with occupiers seeking space following the
opening of the repurposed former Debenhams space. We signed 23
permanent leases at the asset in 2023 at an average net effective
rent 9% above prevailing ERVs.
ERVs in France grew by 2.5%, driven by
indexation and leasing demand at both of our two wholly owned
assets. At Les Terrasses du Port we have secured over 70% of the
expected income from the expiring leases which were signed when the
destination opened in 2014. The new deals have been signed at an
average of 6% above ERV.
In Ireland, ERVs were up 0.2%, the lower
vacancy levels in the Irish portfolio meant that it was more
challenging to provide multiple sources of evidence for the valuers
to mark up ERVs in 2023. However, the leasing pipeline for space
remains strong, particularly at Dundrum Town Centre where there
have been a number of major asset management initiatives, the most
significant being the opening of Brown Thomas in the former House
of Fraser unit in February 2023.
Property returns
analysis
The Group's managed property portfolio
generated a total property return of 1.6%, comprising an income
return of 5.9% offset by a capital return of -4.1%. Incorporating
the income and capital returns from the Value Retail portfolio,
this brought the Group's income return to 6.0% and the capital
return to -2.6%, to generate a total return of 3.2% (2022:
-0.7%).
|
|
|
|
|
|
|
|
2023
|
Proportionally consolidated
including Value Retail
|
UK
%
|
France
%
|
Ireland
%
|
Total flagships
%
|
Develop-ments and other
%
|
Managed portfolio
%
|
Value
Retail
%
|
Group portfolio
%
|
Income return
|
8.7
|
4.6
|
5.7
|
6.3
|
2.7
|
5.9
|
6.2
|
6.0
|
Capital return
|
(2.4)
|
(4.3)
|
(5.6)
|
(4.0)
|
(6.2)
|
(4.1)
|
(0.4)
|
(2.6)
|
Total return
|
6.1
|
0.1
|
(0.2)
|
2.0
|
(3.6)
|
1.6
|
5.8
|
3.2
|
|
|
|
|
|
|
|
|
2022
|
Proportionally consolidated
including Value Retail
|
UK
%
|
France
%
|
Ireland
%
|
Total flagships
%
|
Develop-ments and other
%
|
Managed portfolio
%
|
Value
Retail
%
|
Group portfolio
%
|
Income return
|
7.9
|
4.8
|
5.2
|
6.0
|
2.3
|
5.4
|
5.3
|
5.3
|
Capital return
|
(9.4)
|
(4.6)
|
(3.0)
|
(5.9)
|
(14.8)
|
(7.3)
|
(3.1)
|
(5.8)
|
Total return
|
(2.1)
|
-
|
2.1
|
(0.2)
|
(12.8)
|
(2.3)
|
2.0
|
(0.7)
|
Shareholder returns
analysis
Return per annum over
|
Total shareholder return
Cash basis1
%
|
Total shareholder return
Scrip basis1
%
|
Benchmark2
%
|
One year
|
22.8
|
22.8
|
5.5
|
Three years
|
6.6
|
16.5
|
(4.6)
|
1 Cash and scrip bases represent the
return assuming investors opted for either cash or scrip dividends
with the assumption that those opting for scrip dividends continued
to hold the additional shares issued.
2 Benchmark is the FTSE EPRA/NAREIT UK
index.
The Group's total shareholder return in 2023
over one year was 22.8%, outperforming the FTSE EPRA/NAREIT UK
index of 5.5%. Over three years the Group also outperformed the
benchmark of -4.6% with shareholder returns of 6.6% and 16.5% on a
cash and scrip basis, respectively.
INVESTMENT IN JOINT VENTURES AND
ASSOCIATES
Details of the Group's joint ventures and
associates are shown in notes 12 and 13, respectively to the
financial statements.
Reported Group
Joint ventures
During the year, our investment in joint
ventures decreased by £149m to £1,193m (2022: £1,342m). £99m of the
reduction related to the disposal of Croydon and derecogntion of
O'Parinor; revaluation losses totalled £74m and cash distributions
to the Group were £55m. These reductions were partly offset by the
Group's share of Adjusted earnings of £85m.
Associates
Our investment in associates decreased by
£182m to £1,115m (2022: £1,297m). £109m of the reduction was due to
the disposal of Italie Deux in March, a further £74m due to
distributions from Value Retail , partly offset by the Group's
share of Adjusted earnings of £33m.
TRADE RECEIVABLES
Collection rates improved over the course of
the year such that 96% of the rental income due in 2023 (as at 23
February 2024) has been collected. As a result we reduced the
provisioning rates for amounts overdue by 3-12 months, although
this did not have a significant financial impact to property
outgoings.
On a proportionally consolidated basis, net
trade receivables at 31 December 2023 were £43m (2022: £42m),
reflecting gross trade receivables of £62m (2022: £74m) against
which a provision of £19m (2022: £32m) has been applied.
PENSIONS
On 8 December 2022, the Trustees of the Group's
principal defined benefit pension scheme ('the Scheme'), with the
Company's support, purchased a bulk annuity policy ('buy-in') with
Just Retirement Limited ('Just') for a premium of £87.3m. This
contract fully insured all future payments to members of the
Scheme, with the premium met from the Scheme's assets.
During 2023, a data cleansing process was
completed and subsequently verified by Just, resulting in a small
balancing premium receipt to the Scheme. Given the successful
completion of the buy-in and for the Trustees to trigger the
winding-up of the Scheme, on 20 December 2023 the Company
terminated its liability to make further contributions to the
Scheme. This initiated a process for the Trustees to assign the
bulk annuity policy to individual Scheme members and to transfer
the administration to Just which is expected to take place in the
first quarter of 2024, after which the final steps to wind up the
Scheme can be undertaken.
This material balance sheet de-risking exercise
is in line with the Group's long term strategy to strengthen the
resilience of the Group's balance sheet.
FINANCING AND CASH FLOW
Financing strategy
Our financing strategy is to borrow
predominantly on an unsecured basis to maintain flexibility.
Secured loans are occasionally used, mainly in conjunction with
joint venture partners. Value Retail also uses predominantly
secured debt in its financing strategy. All secured debt is
non-recourse to the rest of the Group.
The Group's debt is arranged to maintain
access to short term liquidity and long term financing. Short term
liquidity is principally through syndicated revolving credit
facilities. Long term debt comprises the Group's fixed rate
unsecured bonds and private placement notes. At 31 December 2023,
the Group also had secured loans in the Dundrum joint venture and
Value Retail. Acquisitions may initially be financed using short
term funds before being refinanced with longer term funding
depending on the Group's financing position in terms of maturities,
future commitments or disposals, and market conditions.
Derivative financial instruments are used to
manage exposure to fluctuations in foreign currency exchange rates
and interest rates but are not employed for speculative
purposes.
The Board regularly reviews the Group's
financing strategy and approves financing guidelines against which
it monitors the Group's financial structure. Where there is any
non-compliance with the guidelines, this should not be for an
extended period but the Group objective is to maintain an
investment grade credit rating. The key financing metrics are set
out below.
Key financial metrics
Proportionally consolidated unless otherwise
stated
|
|
Calculation
(References to Additional
information)
|
2023
|
2022
|
Net debt
|
|
Table 13
|
£1,326m
|
£1,732m
|
Liquidity
|
|
|
£1,225m
|
£996m
|
Weighted average interest rate -
net debt
|
|
|
2.4%
|
2.4%
|
Weighted average interest rate -
gross debt
|
|
|
3.3%
|
2.6%
|
Weighted average maturity of
debt
|
|
|
2.5 years
|
3.4 years
|
FX hedging
|
|
|
91%
|
91%
|
Net debt:EBITDA
|
|
Table 16
|
8.0x
|
10.4x
|
Loan to value -
Headline1
|
|
Table 19
|
34%
|
39%
|
Loan to value - Full proportional
consolidation (of Value Retail)2
|
|
Table 19
|
44%
|
47%
|
Metrics with associated financial
covenants
|
Covenants
|
|
|
|
Interest cover
|
≥
1.25x
|
Table 17
|
3.91x
|
3.24x
|
Gearing - Selected
bonds3
|
≤
175%
|
Table 18
|
55%
|
68%
|
- Other borrowings and
facilities
|
≤
150%
|
Table 18
|
55%
|
68%
|
Unencumbered asset ratio
|
≥
1.5x
|
Table 20
|
2.04x
|
1.74x
|
Secured debt/equity shareholders'
funds
|
≤
50%
|
|
11%
|
15%
|
Fixed rate debt as a proportion of
total debt
|
n/a
|
|
84%
|
84%
|
1 Headline: 'Loan' excludes Value Retail
net debt and 'Value' includes Value Retail net assets.
2 Full proportional consolidation of VR:
'Loan' includes Value Retail net debt and 'Value' includes Value
Retail property values.
3 Applicable to bonds maturing in 2025
and 2027 (as set out in note 16 to the financial
statements).
Credit ratings
During the year, Moody's and Fitch's senior
unsecured investment grade credit ratings were re-affirmed as Baa3
and BBB+ respectively.
Leverage
At 31 December 2023, the Group's gearing was
55% (2022: 68%) and Headline loan to value ratio was 34% (2022:
39%).
The Group's share of net debt in Value Retail
totalled £730m (2022: £675m). Fully proportionally consolidating
Value Retail's net debt, the Group's loan to value ratio was 44%
(2022: 47%).
Calculations for gearing and loan to value are
set out in Tables 18 and 19 of the Additional information,
respectively.
Borrowings and covenants
The terms of the Group's unsecured borrowings
contain a number of covenants which provide protection to the
lenders and bondholders as set out in the Key financial metrics
table above. At 31 December 2023, the Group had significant
headroom against these metrics.
In addition, Dundrum and Value Retail have
secured debt facilities which include covenants specific to those
properties, including covenants for loan to value and interest
cover. However, there is no recourse to the Group.
Managing foreign exchange
exposure
The Group's exposure to foreign exchange
translation differences on euro-denominated assets is managed
through a combination of euro borrowings and derivatives. At 31
December 2023, the value of euro-denominated liabilities as a
proportion of the value of euro-denominated assets was 91% the same
level as at the beginning of the year. Interest on euro-denominated
debt also acts as a partial hedge against exchange differences
arising on net income from our overseas operations. Sterling
strengthened against the euro during the year by 2%.
CASH FLOW AND NET DEBT
Proportionally consolidated net
debt
On a proportionally consolidated
basis, net debt decreased by 23% to £1,326m (2022: £1,732m). At 31
December 2023 the Group's net debt comprised loans of £1,885m and
the fair value of currency swaps of £11m, less cash and cash
equivalents of £570m, of which £472m is held by the Reported Group.
Disposals during the year generated proceeds of £216m. Cash
generated from operations of £104m comprised profit from operating
activities of £117m less a net £13m reduction in working capital
and other non-cash items. We also received £74m of distributions
from Value Retail. These cash inflows were partly offset by cash
dividends paid of £30m, capital expenditure of £43m and net
interest of £46m.
Refinancing
During the first half of the year, £605m of
revolving credit facilities were extended by one year such that
they now mature in 2026.
In the second half of 2023, we extended our
debt maturity profile through the issuance of a £100m bond tap of
our existing £200m 7.25% bonds maturing in 2028 resulting in a new
outstanding notional of £300m. The issuance was at a discount of
£6.7m, meaning the newly issued bonds were priced at an effective
yield of 9.1%. At the same time a matching tender was launched for
the £350m 3.5% bonds maturing in 2025 and the £300m 6.0% bonds
maturing in 2026 for which we repurchased £12m and £88m at yields
of 7.7% and 8.1% respectively, in total £4.3m below book
value.
Liquidity
The Group's liquidity at 31
December 2023, calculated on a proportionally consolidated basis
comprising cash of £570m and unutilised committed
facilities of £655m, was £1,225m, £229m higher than at the
beginning of the year. This was primarily due to proceeds from
disposals.
Debt and facility
profile
Maturity profile of loans and
facilities
The Group's weighted average maturity of debt
is 2.5 years (2022: 3.4 years). The near-term unsecured maturities
including the £109m of private placement notes due in 2024 and the
£337m sterling bonds due in 2025 are covered by existing cash with
the Group.
Refinancing discussions are progressing in
relation to the €600m (Group's 50% share €300m) secured loan held
by the Dundrum joint venture which matures in September
2024.
Maturity analysis of loans and reconciliation
to net debt
Loan
|
Maturity1
|
2023
£m
|
2022
£m
|
Sterling bonds
|
2025-2028
|
840.6
|
846.4
|
Sustainability-linked
eurobond
|
2027
|
600.8
|
612.3
|
Unamortised facility
fees
|
2024-2026
|
(2.2)
|
(3.1)
|
Senior notes (US private
placements)
|
2024-2031
|
185.3
|
190.8
|
Total loans - Reported
Group
|
|
1,624.5
|
1,646.4
|
Share of Property
interests
|
2024
|
260.0
|
391.6
|
Total loans - proportionally
consolidated
|
|
1,884.5
|
2,038.0
|
Cash and cash
equivalents
|
|
(569.6)
|
(336.5)
|
Fair value of currency
swaps
|
|
11.4
|
30.6
|
Net debt- proportionally
consolidated
|
|
1,326.3
|
1,732.1
|
1 Maturity of
loans at 31 December 2023
Risks and uncertainties
The Board continually reviews and
monitors the principal risks and uncertainties which could have a
material effect on the Group's results. The principal risks and
uncertainties for 2023 are listed below with details of each risk.
Full disclosure of the risks, including the factors which mitigate
them, is set out within the Risk and uncertainties section of the
Annual Report 2023.
A. Macroeconomic
Residual risk:
High
|
Adverse changes to the geopolitical landscape
and macroeconomic environment in which the Group operates have the
potential to hinder the ability to deliver the strategy and
financial performance.
|
B. Retail market
Residual risk:
Medium
|
In the context of the ever-evolving retail
marketplace, the Group fails to anticipate and address structural
market changes. This could impair leasing performance, result in a
sub-optimal occupier mix and thus impact the ability to attract
visitors, and grow footfall/spend and income at the Group's
properties.
|
C. Investment market and
valuations
Residual risk:
Medium
|
Investor appetite for retail-led assets is
reduced due to macroeconomic or retail market factors including
increased borrowing costs, economic downturn, and consumer and
occupier confidence. This could adversely impact property
valuations and risk hindering the liquidity of the Group's
portfolio. This in turn would reduce the availability of funds for
reinvestment in core assets and/or refinancing of debt.
|
D. Climate
Residual risk:
Medium
|
Climate risks, particularly the reduction in
carbon emissions and compliance with ESG regulations, are not
appropriately managed and communicated. This is likely to adversely
impact valuations and investor sentiment and may result in an
increased final year bond coupon if the Group's sustainability
linked bond targets are not met. Also, extreme weather events may
impact our properties.
|
E. Tax
Residual risk: Medium
|
The Group suffers financial loss and
reputational damage from new or increased tax levies or due to
non-compliance with local tax legislation.
|
F. Legal and regulatory
compliance
Residual risk: Medium
|
The failure to comply with a multitude of laws
and regulations relevant to the Group. These laws and regulations
cover the Group's role as a multi-jurisdiction listed company; an
owner and operator of property; an employer; and as a developer.
Failure to comply could result in the Group suffering reputational
damage and/or financial penalties. Changes or new requirements may
place administrative burden on to the Group and divert
resources away from strategic objectives.
|
G. Non-retail/multi-use
markets
Residual risk: Medium
|
The Group fails to target the optimal
(non-retail) property sectors for future repurposing or
developments or has insufficient access to capital and the skills
required to deliver its urban estates vision. Occupier or investor
demand for non-retail sectors weakens or evolves such that the
Group's repurposing or development plans are
sub-optimal.
|
H. Cyber security
Residual risk: Medium
|
The Group's information technology systems
fail or are subject to an attack which breaches their technological
defences. A failure could lead to operational disruption,
financial, or reputational damage due to assets being brought down
and/or loss of commercially sensitive data.
|
I. Health and
safety
Residual risk: Medium
|
There is a risk of serious work related
injury, death and/or ill health to the Group's colleagues,
customers or contractors, and anyone else who visits the Group's
properties or premises. This may be due to the Group's actions or
activities, or from external threats such as terrorism. In addition
an incident or public health issue, such as a pandemic, is likely
to have an adverse operational impact. Insufficient insight into
health and safety risks and mitigations or a failure to embed a
strong safety culture could increase the Group's exposure to
reputational damage, fines and sanctions.
|
J. Capital
structure
Residual risk: Medium
|
Lack of access to capital on attractive terms
could lead to the Group having insufficient liquidity to enable the
delivery of the Group's strategic objectives.
|
K. Partnerships
Residual risk:
High
|
A significant proportion of the Group's assets
are held in conjunction with third parties which has the potential
to limit the ability to implement the Group's strategy and reduces
control and therefore liquidity if partners are not strategically
aligned.
|
L. Property development
Residual risk: Medium
|
Property development is inherently risky due
to its complexity, management intensity and uncertain outcomes,
particularly for major schemes with multiple phases and long
delivery timescales. Unsuccessful projects result in adverse
financial and reputational outcomes.
|
M. Transformation
Residual risk: Medium
|
The Group fails to deliver its strategic
objective of creating an agile platform due to sub-optimal
transformation projects. Other issues could arise due to
transformation initiatives being delivered late, overbudget or
causing significant disruption to business-as-usual
activity.
|
N. People
Residual risk: Medium
|
A failure to retain or recruit key management
and other colleagues to build skilled and diverse teams could
adversely impact operational and corporate performance, culture and
ultimately the delivery of the Group's strategy. As the Group
evolves its strategy it must continue to motivate and retain
people, ensure it offers the right colleague proposition and
attract new skills in a changing market.
|
Consolidated income statement
Year
ended 31 December 2023
|
|
|
Note
|
2023
£m
|
2022
£m
|
|
|
|
|
|
|
Revenue
|
|
|
2,4
|
134.3
|
131.4
|
|
|
|
|
|
|
Profit
from operating activities*
|
|
|
2
|
26.2
|
29.7
|
|
|
|
|
|
|
Revaluation loss on properties
|
|
|
2
|
(45.2)
|
(82.7)
|
Other net
gains
|
|
|
2
|
1.2
|
0.6
|
|
|
|
|
|
|
Share of
results of joint ventures
|
|
|
12B
|
9.4
|
(41.5)
|
Impairment of joint ventures
|
|
|
8
|
(22.2)
|
-
|
Share of
results of associates
|
|
|
13B
|
16.0
|
(7.1)
|
Operating
loss
|
|
|
|
(14.6)
|
(101.0)
|
|
|
|
|
|
|
Finance
income
|
|
|
6
|
35.2
|
26.1
|
Finance
costs
|
|
|
6
|
(71.3)
|
(89.1)
|
Loss before
tax
|
|
|
|
(50.7)
|
(164.0)
|
|
|
|
|
|
|
Tax
charge
|
|
|
7
|
(0.7)
|
(0.2)
|
|
|
|
|
|
|
Loss for the year
attributable to equity shareholders
|
|
|
|
(51.4)
|
(164.2)
|
|
|
|
|
-
|
|
|
|
|
|
|
|
Basic and diluted loss per
share
|
|
|
10B
|
(1.0)p
|
(3.3)p
|
* Includes a charge of £9.4m (2022:
£4.0m) and a corresponding credit of £8.0m (2022: credit of £10.7m)
relating to provisions for impairment of trade (tenant)
receivables.
Consolidated statement of COMPREHENSIVE
income
Year
ended 31 December 2023
|
|
2023
£m
|
2022
£m
|
Loss for
the year
|
|
(51.4)
|
(164.2)
|
|
|
|
|
Recycled through the profit or loss on disposal of overseas
property interests
|
|
|
|
Exchange
gain previously recognised in the translation reserve
|
|
(100.3)
|
-
|
Exchange
loss previously recognised in the net investment hedge
reserve
|
|
80.2
|
-
|
Net
exchange loss relating to equity shareholders
|
a
|
(20.1)
|
-
|
|
|
|
|
Items that may subsequently be recycled through profit or
loss, net of tax
|
|
|
|
Foreign
exchange translation differences
|
|
(49.3)
|
130.6
|
Gain/(loss) on net investment hedge
|
|
39.3
|
(103.4)
|
Net
gain/(loss) on cash flow hedge
|
|
0.2
|
(1.9)
|
Share of
other comprehensive (loss)/gain of associates
|
|
(8.8)
|
23.3
|
|
|
(18.6)
|
48.6
|
Items that will not subsequently be recycled through the
profit or loss, net of tax
|
|
|
|
Net
actuarial losses on pension schemes
|
|
(1.4)
|
(26.7)
|
|
|
|
|
Total other comprehensive (loss)/income
|
b
|
(40.1)
|
21.9
|
|
|
|
|
Total comprehensive loss for the year
|
|
(91.5)
|
(142.3)
|
a Relates to the sale of
Italie Deux and the derecognition of O'Parinor as described in note
8.
b All items within total
other comprehensive (loss)/income relate to continuing
operations.
Consolidated balance sheet
As at 31
December 2023
|
|
Note
|
2023
£m
|
2022
£m
|
Non-current
assets
|
|
|
|
|
Investment properties
|
|
11
|
1,396.2
|
1,461.0
|
Interests
in leasehold properties
|
|
|
32.7
|
34.0
|
Right-of-use assets
|
|
|
3.9
|
9.5
|
Plant and
equipment
|
|
|
0.9
|
1.4
|
Investment in joint ventures
|
|
12C
|
1,193.2
|
1,342.4
|
Investment in associates
|
|
13D
|
1,115.0
|
1,297.1
|
Other
investments
|
|
|
8.8
|
9.8
|
Trade and
other receivables
|
|
|
1.9
|
3.2
|
Derivative financial instruments
|
|
|
-
|
7.0
|
Restricted monetary assets
|
|
15
|
21.4
|
21.4
|
|
|
|
3,774.0
|
4,186.8
|
Current
assets
|
|
|
|
|
Trading
properties
|
|
11
|
-
|
36.2
|
Trade and
other receivables
|
|
14
|
74.1
|
85.9
|
Derivative financial instruments
|
|
|
5.2
|
0.1
|
Restricted monetary assets
|
|
15
|
2.2
|
8.6
|
Cash and
cash equivalents
|
|
|
472.3
|
218.8
|
|
|
|
553.8
|
349.6
|
Total
assets
|
|
|
4,327.8
|
4,536.4
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Trade and
other payables
|
|
|
(129.8)
|
(168.3)
|
Obligations under head leases
|
|
|
(0.1)
|
(0.2)
|
Loans
|
|
16A
|
(108.6)
|
-
|
Tax
|
|
|
(0.3)
|
(0.5)
|
Derivative financial instruments
|
|
|
(2.3)
|
(16.1)
|
|
|
|
(241.1)
|
(185.1)
|
Non-current
liabilities
|
|
|
|
|
Trade and
other payables
|
|
|
(55.5)
|
(56.3)
|
Obligations under head leases
|
|
|
(37.3)
|
(38.1)
|
Loans
|
|
16A
|
(1,515.9)
|
(1,646.4)
|
Deferred
tax
|
|
|
(0.4)
|
(0.4)
|
Derivative financial instruments
|
|
|
(15.0)
|
(23.7)
|
|
|
|
(1,624.1)
|
(1,764.9)
|
Total
liabilities
|
|
|
(1,865.2)
|
(1,950.0)
|
Net assets
|
|
|
2,462.6
|
2,586.4
|
|
|
|
|
|
Equity
|
|
|
|
|
Share
capital
|
|
|
250.1
|
250.1
|
Share
premium
|
|
|
1,563.7
|
1,563.7
|
Other
reserves
|
|
|
105.5
|
135.4
|
Retained
earnings
|
|
|
549.7
|
646.0
|
Investment in own shares
|
|
|
(6.4)
|
(8.8)
|
Equity shareholders'
funds
|
|
|
2,462.6
|
2,586.4
|
EPRA net tangible assets
value per share
|
|
10C
|
51p
|
53p
|
These financial statements were
approved by the Board on 28 February 2024 and signed on its behalf
by:
Rita-Rose Gagné
|
Himanshu Raja
|
Chief Executive
|
Chief Financial Officer
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUIty
Year ended 31 December
2023
|
Share capital
|
Share premium
|
Merger reserve
|
Capital and share-based
reserves
|
Other reserves
|
Retained earnings
|
Investment in own shares
|
Equity shareholders'
funds
|
Non- controlling
interests
|
Total equity
|
|
a
|
|
b
|
c
|
d
|
|
a
|
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1 January
2022
|
221.0
|
1,593.2
|
374.1
|
198.2
|
110.0
|
252.9
|
(3.5)
|
2,745.9
|
0.1
|
2,746.2
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
exchange translation differences
|
-
|
-
|
-
|
-
|
130.7
|
-
|
-
|
130.7
|
(0.1)
|
130.6
|
Loss on
net investment hedge
|
-
|
-
|
-
|
-
|
(103.4)
|
-
|
-
|
(103.4)
|
-
|
(103.4)
|
Gain on
cash flow hedge
|
-
|
-
|
-
|
-
|
6.3
|
-
|
-
|
6.3
|
-
|
6.3
|
Gain on
cash flow hedge recycled to net finance costs
|
-
|
-
|
-
|
-
|
(8.2)
|
-
|
-
|
(8.2)
|
-
|
(8.2)
|
Share of
other comprehensive gain of associates (see note 13D)
|
-
|
-
|
-
|
-
|
-
|
23.3
|
-
|
23.3
|
-
|
23.3
|
Net
actuarial losses on pension schemes
|
-
|
-
|
-
|
-
|
-
|
(26.7)
|
-
|
(26.7)
|
-
|
(26.7)
|
Loss for
the year
|
-
|
-
|
-
|
-
|
-
|
(164.2)
|
-
|
(164.2)
|
-
|
(164.2)
|
Total comprehensive
income/(loss)
|
-
|
-
|
-
|
-
|
25.4
|
(167.6)
|
-
|
(142.2)
|
(0.1)
|
(142.3)
|
|
|
|
|
|
|
|
|
|
|
|
Transfer
|
-
|
-
|
(374.1)
|
(198.2)
|
-
|
572.3
|
-
|
-
|
-
|
-
|
Share-based employee remuneration
|
-
|
-
|
-
|
-
|
-
|
3.0
|
-
|
3.0
|
-
|
3.0
|
Cost of
shares awarded to employees
|
-
|
-
|
-
|
-
|
-
|
(1.4)
|
1.4
|
-
|
-
|
-
|
Purchase
of own shares
|
-
|
-
|
-
|
-
|
-
|
-
|
(6.7)
|
(6.7)
|
-
|
(6.7)
|
Dividends
(see note 18)
|
-
|
-
|
-
|
-
|
-
|
(140.3)
|
-
|
(140.3)
|
-
|
(140.3)
|
Scrip
dividend related share issue
|
29.1
|
(29.1)
|
-
|
-
|
-
|
127.1
|
-
|
127.1
|
-
|
127.1
|
Scrip
dividend related share issue costs
|
-
|
(0.4)
|
-
|
-
|
-
|
-
|
-
|
(0.4)
|
-
|
(0.4)
|
At 31 December
2022
|
250.1
|
1,563.7
|
-
|
-
|
135.4
|
646.0
|
(8.8)
|
2,586.4
|
-
|
2,586.4
|
|
|
|
|
|
|
|
|
|
|
|
Recycled
exchange gains on disposal of overseas property
interests
|
-
|
-
|
-
|
-
|
(20.1)
|
-
|
-
|
(20.1)
|
-
|
(20.1)
|
Foreign
exchange translation differences
|
-
|
-
|
-
|
-
|
(49.3)
|
-
|
-
|
(49.3)
|
-
|
(49.3)
|
Gain on
net investment hedge
|
-
|
-
|
-
|
-
|
39.3
|
-
|
-
|
39.3
|
-
|
39.3
|
Loss on
cash flow hedge
|
-
|
-
|
-
|
-
|
(3.4)
|
-
|
-
|
(3.4)
|
-
|
(3.4)
|
Loss on
cash flow hedge recycled to net finance costs
|
-
|
-
|
-
|
-
|
3.6
|
-
|
-
|
3.6
|
-
|
3.6
|
Share of
other comprehensive loss of associates (see note
13D)
|
-
|
-
|
-
|
-
|
-
|
(8.8)
|
-
|
(8.8)
|
-
|
(8.8)
|
Net
actuarial losses on pension schemes
|
-
|
-
|
-
|
-
|
-
|
(1.4)
|
-
|
(1.4)
|
-
|
(1.4)
|
Loss for
the year
|
-
|
-
|
-
|
-
|
-
|
(51.4)
|
-
|
(51.4)
|
-
|
(51.4)
|
Total comprehensive
loss
|
-
|
-
|
-
|
-
|
(29.9)
|
(61.6)
|
-
|
(91.5)
|
-
|
(91.5)
|
|
|
|
|
|
|
|
|
|
|
|
Share-based employee remuneration
|
-
|
-
|
-
|
-
|
-
|
3.6
|
-
|
3.6
|
-
|
3.6
|
Cost of
shares awarded to employees
|
-
|
-
|
-
|
-
|
-
|
(2.4)
|
2.4
|
-
|
-
|
-
|
Dividends
(see note 18)
|
-
|
-
|
-
|
-
|
-
|
(35.9)
|
-
|
(35.9)
|
-
|
(35.9)
|
As at 31 December
2023
|
250.1
|
1,563.7
|
-
|
-
|
105.5
|
549.7
|
(6.4)
|
2,462.6
|
-
|
2,462.6
|
a Share capital
includes shares held in treasury and shares held in an employee
share trust, which are held at cost and excluded from equity
shareholders' funds through 'Investment in own shares'.
b The merger
reserve arose in September 2014 from a placing of new shares using
a structure which resulted in merger relief being taken under
Section 612 of the Companies Act 2006. Following receipt of the
proceeds in 2014 and the relevant criteria enabling use of the
reserve having been satisfied, the amounts in the merger reserve
are deemed distributable and accordingly the balance of this
reserve was transferred to retained earnings.
c The
capital redemption reserve comprised £14.3m relating to share
buybacks which arose over a number of years up to 2019 and £183.9m
resulting from the cancellation of the Company's shares as part of
the reorganisation of share capital in 2020. Following approval by
the Court on 22 November 2022, this reserve was reclassified as
available for distribution to shareholders in accordance with ICAEW
Technical Release 02/17BL section 2.8A and as a result was
transferred to retained earnings.
d Other reserves
comprises Translation, Net investment hedge and Cash flow hedge
reserves.
Consolidated cash flow statement
Year
ended 31 December 2023
|
|
Note
|
2023
£m
|
2022
£m
|
Profit from operating
activities
|
|
|
26.2
|
29.7
|
Net movements in working capital
and restricted monetary assets
|
|
19A
|
(4.7)
|
2.6
|
Non-cash items
|
|
19A
|
2.8
|
(0.8)
|
Cash generated from operations
|
|
|
24.3
|
31.5
|
|
|
|
|
|
Interest received
|
|
|
39.1
|
18.1
|
Interest paid
|
|
|
(80.8)
|
(69.1)
|
Debt and loan facility issuance
and extension fees
|
|
|
(1.0)
|
(2.8)
|
Premiums on hedging
derivatives
|
|
|
-
|
(3.9)
|
Tax (paid)/repaid
|
|
|
(0.9)
|
0.3
|
Distributions and other
receivables from joint ventures
|
|
|
57.6
|
89.5
|
Distributions from joint ventures
classified as assets held for sale
|
|
|
-
|
6.0
|
Cash flows from operating activities
|
|
|
38.3
|
69.6
|
|
|
|
|
|
Investing activities
|
|
|
|
|
Capital expenditure
|
|
|
(18.7)
|
(36.4)
|
Sale of properties (including
trading properties)
|
|
|
49.0
|
124.0
|
Sale of investments in joint
ventures
|
|
|
69.0
|
67.9
|
Sale of investments in
associates
|
|
|
96.7
|
-
|
Advances
to joint ventures
|
|
|
(8.3)
|
(4.0)
|
Distributions and capital returns
received from associates
|
|
|
73.6
|
2.6
|
Cash flows from investing activities
|
|
|
261.3
|
154.1
|
|
|
|
|
|
Financing activities
|
|
|
|
|
Share issue expenses
|
|
|
-
|
(0.5)
|
Proceeds from award of own
shares
|
|
|
-
|
0.1
|
Purchase of own shares
|
|
|
-
|
(6.7)
|
Proceeds from new
borrowings
|
|
|
96.0
|
-
|
Repayment of borrowings
|
|
|
(111.1)
|
(302.4)
|
Equity dividends paid
|
|
18
|
(29.9)
|
(13.2)
|
Cash flows from financing activities
|
|
|
(45.0)
|
(322.7)
|
|
|
|
|
|
Increase/(decrease) in cash and cash
equivalents
|
|
|
254.6
|
(99.0)
|
Opening cash and cash equivalents
|
|
19B
|
218.8
|
315.1
|
Exchange translation
movement
|
|
19B
|
(1.1)
|
2.7
|
Closing cash and cash equivalents
|
|
19B
|
472.3
|
218.8
|
Notes to the CONSOLIDATED FINANCIAL
STATEMENTS
1. BASIS OF PREPARATION, CONSOLIDATION AND PRINCIPAL
ACCOUNTING POLICIES
A: BASIS OF PREPARATION AND
CONSOLIDATION
Basis of preparation
The consolidated financial
statements have been prepared in accordance with both UK adopted
international accounting standards and International Financial
Reporting Standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the EU, (IFRS adopted by the EU
as at 31 December 2020), as well as SAICA Financial Reporting
Guides as issued by the Accounting Practices committee and those
parts of the Companies Act 2006 as applicable to companies
reporting under IFRS.
New accounting standards,
amendments to standards and IFRIC interpretations which became
applicable during the year or have been published but are not yet
effective, were either not relevant or had no, or are not expected
to have a material impact on the Group's results or net
assets.
In addition to the above, an
assessment has been undertaken on the Pillar 2 tax legislation
(effective 1 January 2024), which is based around undertaxed
profits. The Group is not expected to meet the minimum threshold in
place for the legislative rules to apply.
The financial statements are
prepared on the historical cost basis, except that investment
properties, other investments and derivative financial instruments
are stated at fair value. Accounting policies have been applied
consistently.
Basis of consolidation
The consolidated financial
statements incorporate the financial statements of the Company and
entities controlled by the Company (its subsidiaries). Control is
achieved where the Company has the power over the investee, is
exposed, or has rights, to variable return from its involvement
with the investee and has the ability to use its power to affect
its returns.
The results of subsidiaries, joint
ventures or associates are included in the consolidated income
statement when control is achieved, which is usually from the
effective date of acquisition, or up to the effective date of
disposal which is usually on completion of the transaction. All
intragroup transactions, balances, income and expenses are
eliminated on consolidation. Where necessary, adjustments are made
to bring the accounting policies used into line with those used by
the Group.
Business combinations are
accounted for using the acquisition method where any excess of the
purchase consideration
over the fair value of the assets,
liabilities and contingent liabilities acquired and the resulting
deferred tax thereon is recognised as goodwill which is then
reviewed annually for impairment. Acquisition related costs are
expensed.
B. ALTERNATIVE PERFORMANCE MEASURES (APMs)
The Group uses a number of
performance measures which are non-IFRS. The key measures comprise
the following:
- Adjusted
measures: Used by the Directors and management to monitor business
performance internally and exclude the same items as for EPRA
earnings, but also certain cash and non-cash items which they
believe are not reflective of the normal day-to-day operating
activities of the Group. Furthermore, the Group evaluates the
performance of its portfolio by aggregating its share of joint
ventures and associates which are under the Group's management
('Share of Property interests') on a proportionally consolidated
basis. The Directors believe that disclosing such non-IFRS measures
enables a reader to isolate and evaluate the impact of such items
on results and allows for a fuller understanding of performance
from year to year. Adjusted performance measures may not be
directly comparable with other similarly titled measures used by
other companies.
- EPRA
earnings and EPRA net assets: Calculated in accordance with
guidance issued by the European Public Real Estate Association
recommended bases.
- Headline
earnings: Calculated in accordance with the requirements of the
Johannesburg Stock Exchange listing requirements.
A reconciliation between reported
and the above alternative earnings and net asset measures is set
out in note 9.
1. BASIS OF PREPARATION, CONSOLIDATION AND PRINCIPAL
ACCOUNTING POLICIES
D. GOING CONCERN
Introduction
In order to prepare the financial
statements for the year ended 31 December 2023 on a going concern
basis the Directors have undertaken a detailed assessment of the
Group's principal risks and current and projected financial
position over the period to 30 June 2025 ('the going concern
period'). This period has been selected as it coincides with the
first six monthly covenant test date for the Group's unsecured debt
facilities falling due after the minimum 12 months going concern
period.
The assessment included the
preparation of a Base scenario which contained earnings, balance
sheet, cash flow, liquidity and credit metric projections. The Base
scenario was derived from the Group's 2024 Business Plan, which was
approved by the Board in December 2023, with amendments to exclude
certain uncommitted transactions such as disposals. The Business
Plan projections assumed further improvements in the Group's near
term operational performance, supported by the Group's strong
leasing pipeline; collections performance; robust occupancy; and
footfall and sales growth seen in 2023. The projections also
factored in the latest geopolitical, economic and trading outlook,
particularly the financial challenges on both consumers and
businesses from high interest rates, benign economic growth,
inflation and supply chain pressures.
Financial position
Over the course of 2023, the
Group's net debt has reduced by £406m to £1,326m. The Group also
has significant liquidity of £1,225m (2022: £997m), comprising cash
of £570m and undrawn revolving credit facilities of £655m. The net
debt reduction was principally due to disposal proceeds in the year
of £216m and the derecognition of the Group's investment in
Highcross and O'Parinor which included £125m of secured debt. This
reduction has led to an improvement in the Group's credit metrics
as detailed on page 21 of the Financial Review. Over the going
concern period, there is only £109m of unsecured debt maturities,
relating solely to a proportion of the Group's £185m private
placement notes.
The Group has three principal
unsecured debt covenants: gearing, interest cover and unencumbered
asset ratio, with the latter covenant only applicable to the
private placement notes. It also has a covenant relating to the
amount of secured debt as a percentage of equity shareholders'
funds which must remain below 50%. This was 11% at 31 December 2023
and is forecast to remain broadly unchanged over the going concern
period. The key variables impacting the three principal covenants
are valuation movements for the gearing and unencumbered asset
ratio covenants, and changes in net rental income for the interest
cover covenant. Net interest cost also impacts the interest cover
ratio, although at 31 December 2023, 84% of the Group's gross debt
is at fixed interest rates, which limits the volatility of this
element of the covenant over the going concern period.
The Group also has secured debt in
its Dundrum joint venture and its associate, Value Retail. These
secured facilities are non-recourse to the rest of the Group and
subject to covenants, principally relating to loan to value and
interest cover. The loan secured against Dundrum and three of the
loans held by Value Retail mature over the going concern period. In
total the Group's share of these maturing loans was £513m at 31
December 2023.
Assessment approach
Consistent with the Group's strong
financial position, the Base scenario projections forecast that the
Group will maintain significant covenant headroom and liquidity
over the going concern period.
To further determine the Group's
ability to continue as a going concern, a reverse stress test
('stress test') was undertaken on the Base scenario to assess the
maximum level that valuations and net rental income could fall over
the going concern period before the Group reaches its key unsecured
debt covenant thresholds. The stress test adopted valuation yields
and ERVs as at 31 December 2023. However, to fully assess the
impact on the going concern assessment the stress test adopted the
following worse case assumptions:
- the secured
loans in Dundrum and Value Retail are not refinanced and the
lenders enforce their security resulting in the Group derecognising
the full value of its equity investments totalling £508m;
and
- the
early repayment of £77m of the Group's unsecured private placement
notes which do not mature over the going concern period. This
assumption has been adopted as the unencumbered asset ratio, which
is only applicable to these notes, has the lowest covenant headroom
to valuation falls at 31 December 2023 of 27% and hence would
breach before the gearing covenant shown below. In practice, this
potential issue can be avoided as the Group has the right to redeem
the notes for their value plus a make whole amount.
Having reviewed the results of the
stress tests, current external forecasts, recent precedents and
plausible future adverse impacts to valuations and net rental
income, the Directors are satisfied that the Group has sufficient
covenant headroom over the going concern period.
The Group is also forecast to
retain significant liquidity over the going concern period, such
that liquidity in the stress tests remains above £800m over the
going concern period.
1. BASIS OF PREPARATION, CONSOLIDATION AND PRINCIPAL
ACCOUNTING POLICIES
D. GOING CONCERN
Mitigating actions
The going concern assessment
explained above excludes the beneficial impact of potential
mitigating actions which would provide the Group with further
financial strength and covenant headroom. These include:
-
Refinancing of maturing loans in the ordinary course of business,
particularly in relation to secured debt, as this avoids the
modelled derecognition of these investments in the stress test.
Refinancing discussions are progressing for the Dundrum secured
loan while Value Retail management remain confident of refinancing
its maturing loans following the major refinancing activities of
£1.4bn in 2022 and 2023.
-
Additional liquidity from further disposals including the recently
contracted sale of Union Square, Aberdeen for £111m which is due to
complete in March 2024.
-
Curtailment of uncommitted capital expenditure plans and other
discretionary cash flows factored into the assessment.
Conclusion
The going concern assessment
described above demonstrates that the Group is forecast to remain
in a robust financial position over the going concern period with
significant liquidity and debt covenant headroom. The Directors
have therefore concluded that it is appropriate to prepare the
financial statements on a going concern basis.
Foreign currency
Exchange
rates
The principal foreign currency
denominated balances are in euro where the translation exchange
rates used are:
Consolidated income
statement:
Average rate
|
Year ended
31 December 2023
|
Year ended
31 December 2022
|
Quarter 1
|
€1.133
|
€1.195
|
Quarter 2
|
€1.150
|
€1.179
|
Quarter 3
|
€1.163
|
€1.168
|
Quarter 4
|
€1.154
|
€1.150
|
Consolidated balance
sheet:
|
31 December 2023
|
31 December 2022
|
Year end rate
|
€1.153
|
€1.128
|
2. PROFIT/(LOSS) FOR THE YEAR
As described in note 3, the Group
evaluates the performance of its portfolio by aggregating its share
of joint ventures (see note 12) and associates (see note 13) which
are under the Group's management ('Share of Property interests') on
a proportionally consolidated basis with its wholly owned portfolio
in its 'Reported Group'.
Adjusted earnings, which are also
calculated on a proportionally consolidated basis, is the Group's
primary profit measure and this is the basis of information which
is reported to the Board. The following table sets out a
reconciliation from Reported earnings to Adjusted
earnings.
|
|
|
2023
|
|
|
|
|
|
Proportionally consolidated
|
|
|
|
Reported Group
|
Share of Property
interests
|
Sub-total before
adjustments
|
Capital and other
|
Adjusted
|
|
|
|
|
|
|
a
|
|
|
|
Note
|
£m
|
£m
|
£m
|
£m
|
£m
|
Revenue
|
|
|
134.3
|
132.4
|
266.7
|
-
|
266.7
|
|
|
|
|
|
|
|
|
Gross rental
incomeb
|
|
3A,
4
|
92.8
|
115.6
|
208.4
|
-
|
208.4
|
Service charge income
|
|
4
|
26.6
|
17.1
|
43.7
|
-
|
43.7
|
|
|
|
119.4
|
132.7
|
252.1
|
-
|
252.1
|
Service charge expenses
|
|
|
(29.1)
|
(20.4)
|
(49.5)
|
-
|
(49.5)
|
Cost of sales
|
|
5
|
(14.7)
|
(20.7)
|
(35.4)
|
0.3
|
(35.1)
|
Net rental income
|
|
|
75.6
|
91.6
|
167.2
|
0.3
|
167.5
|
|
|
|
|
|
|
|
|
Gross administration
costs
|
|
5
|
(64.3)
|
(0.4)
|
(64.7)
|
13.2
|
(51.5)
|
Other income
|
|
4
|
14.9
|
-
|
14.9
|
-
|
14.9
|
Net administration
expenses
|
|
|
(49.4)
|
(0.4)
|
(49.8)
|
13.2
|
(36.6)
|
|
|
|
|
|
|
|
|
Profit from operating
activities
|
|
|
26.2
|
91.2
|
117.4
|
13.5
|
130.9
|
|
|
|
|
|
|
|
|
Revaluation losses on
properties
|
|
|
(45.2)
|
(73.9)
|
(119.1)
|
119.1
|
-
|
|
|
|
|
|
|
|
|
Disposals
|
|
|
|
|
|
|
|
- Profit/(loss) on sale of properties
|
|
8A
|
1.3
|
(19.1)
|
(17.8)
|
17.8
|
-
|
- Recycled
exchange gains on disposal of overseas interests
|
|
|
20.1
|
-
|
20.1
|
(20.1)
|
-
|
Change in fair value of other
investments
|
|
|
(1.1)
|
-
|
(1.1)
|
1.1
|
-
|
Loss on sale of joint ventures and
associates
|
|
|
(19.1)
|
19.1
|
-
|
-
|
-
|
Other net gains
|
|
|
1.2
|
-
|
1.2
|
(1.2)
|
-
|
|
|
|
|
|
|
|
|
Share of results of joint
ventures
|
|
12B
|
9.4
|
(9.4)
|
-
|
-
|
-
|
Impairment of joint
venture
|
|
|
(22.2)
|
-
|
(22.2)
|
22.2
|
-
|
Share of results of
associates
|
|
13B
|
16.0
|
(1.2)
|
14.8
|
17.3
|
32.1
|
Operating (loss)/profit
|
|
|
(14.6)
|
6.7
|
(7.9)
|
170.9
|
163.0
|
|
|
|
|
|
|
|
|
Net finance costs
|
|
6
|
(36.1)
|
(6.6)
|
(42.7)
|
(3.2)
|
(45.9)
|
(Loss)/profit before tax
|
|
|
(50.7)
|
0.1
|
(50.6)
|
167.7
|
117.1
|
Tax charge
|
|
7
|
(0.7)
|
(0.1)
|
(0.8)
|
-
|
(0.8)
|
(Loss)/profit for the year
attributable to equity shareholders
|
|
|
(51.4)
|
-
|
(51.4)
|
167.7
|
116.3
|
a Adjusting
items, described above as 'Capital and other', are set out in note
9A.
b Proportionally
consolidated figure includes £13.6m (2022: £13.7m) of contingent
rents calculated by reference to tenants' turnover.
|
|
|
2022
|
|
|
|
|
|
Proportionally consolidated
|
|
|
|
Reported Group
|
Share of Property
interests
|
Sub-total before
adjustments
|
Capital and other
|
Adjusted
|
|
|
|
|
|
|
a
|
|
|
|
Note
|
£m
|
£m
|
£m
|
£m
|
£m
|
Revenue
|
|
|
131.4
|
143.6
|
275.0
|
-
|
275.0
|
|
|
|
|
|
|
|
|
Gross rental
incomeb
|
|
3A,
4
|
90.2
|
125.0
|
215.2
|
-
|
215.2
|
Service charge income
|
|
4
|
24.2
|
18.6
|
42.8
|
-
|
42.8
|
|
|
|
114.4
|
143.6
|
258.0
|
-
|
258.0
|
Service charge expenses
|
|
|
(27.8)
|
(22.5)
|
(50.3)
|
-
|
(50.3)
|
Cost of sales
|
|
5
|
(9.3)
|
(21.2)
|
(30.5)
|
(2.4)
|
(32.9)
|
Net rental income
|
|
|
77.3
|
99.9
|
177.2
|
(2.4)
|
174.8
|
|
|
|
|
|
|
|
|
Gross administration
costs
|
|
5
|
(64.6)
|
(0.3)
|
(64.9)
|
5.1
|
(59.8)
|
Other income
|
|
4
|
17.0
|
-
|
17.0
|
-
|
17.0
|
Net administration
expenses
|
|
|
(47.6)
|
(0.3)
|
(47.9)
|
5.1
|
(42.8)
|
|
|
|
|
|
|
|
|
Profit from operating
activities
|
|
|
29.7
|
99.6
|
129.3
|
2.7
|
132.0
|
|
|
|
|
|
|
|
|
Revaluation losses on
properties
|
|
|
(82.7)
|
(138.3)
|
(221.0)
|
221.0
|
-
|
|
|
|
|
|
|
|
|
Disposals and assets held for
sale
|
|
|
|
|
|
|
|
- Profit/(loss) on sale of properties
|
|
8A
|
0.7
|
(0.1)
|
0.6
|
(0.6)
|
-
|
- Income
from assets held for sale
|
|
8A,
9A
|
-
|
(1.6)
|
(1.6)
|
1.6
|
-
|
Change in fair value of other
investments
|
|
|
(0.1)
|
-
|
(0.1)
|
0.1
|
-
|
Other net gains/(losses)
|
|
|
0.6
|
(1.7)
|
(1.1)
|
1.1
|
-
|
|
|
|
|
|
|
|
|
Share of results of joint
ventures
|
|
12B
|
(41.5)
|
41.5
|
-
|
-
|
-
|
Share of results of
associates
|
|
13B
|
(7.1)
|
1.8
|
(5.3)
|
32.7
|
27.4
|
Operating (loss)/profit
|
|
|
(101.0)
|
2.9
|
(98.1)
|
257.5
|
159.4
|
|
|
|
|
|
|
|
|
Net finance costs
|
|
6
|
(63.0)
|
(2.6)
|
(65.6)
|
11.6
|
(54.0)
|
(Loss)/profit before tax
|
|
|
(164.0)
|
0.3
|
(163.7)
|
269.1
|
105.4
|
Tax charge
|
|
7
|
(0.2)
|
(0.3)
|
(0.5)
|
-
|
(0.5)
|
(Loss)/profit for the year
attributable to equity shareholders
|
|
|
(164.2)
|
-
|
(164.2)
|
269.1
|
104.9
|
3. SEGMENTAL ANALYSIS
The Group's reportable segments
are determined by the internal performance reported to the Chief
Operating Decision Makers which has been determined to be the Chief
Executive Officer and the Group Executive Committee. Such reporting
is both by sector and geographic location as these demonstrate
different characteristics and risks, are managed by separate teams
and are the basis on which resources are allocated.
The Group evaluates the
performance of its portfolio by aggregating its wholly owned
properties and joint operations in the 'Reported Group' with share
of joint ventures and associates which are under the Group's
management ('Share of Property interests') on a proportionally
consolidated line-by-line basis. The Group does not proportionally
consolidate the Group's investment in Value Retail as this is not
under the Group's management, and instead monitors the performance
of this investment separately as its share of results of associates
as reported under IFRS.
The Group's activities presented
on a proportionally consolidated basis including Share of Property
interests are:
·
Flagship destinations
·
Developments and other
Total assets are not monitored by
segment and resource allocation is based on the distribution of
property assets between segments.
A. INCOME BY
SEGMENT
|
|
Gross rental income
|
Adjusted net rental
income
|
|
|
2023
|
2022
|
2023
|
2022
|
|
|
£m
|
£m
|
£m
|
£m
|
Flagship destinations
|
|
|
|
|
|
UK
|
|
92.8
|
90.5
|
72.9
|
74.3
|
France
|
|
58.6
|
61.8
|
49.4
|
53.8
|
Ireland
|
|
40.0
|
37.3
|
36.3
|
33.6
|
|
|
191.4
|
189.6
|
158.6
|
161.7
|
Developments and other
|
|
17.0
|
25.6
|
8.9
|
13.1
|
Managed portfolio - proportionally
consolidated
|
|
208.4
|
215.2
|
167.5
|
174.8
|
Less Share of Property
interests
|
|
(115.6)
|
(125.0)
|
|
|
Reported Group
|
|
92.8
|
90.2
|
|
|
B. INVESTMENT AND DEVELOPMENT
PROPERTY ASSETS BY SEGMENT
|
|
2023
|
2022
|
|
|
Property valuation
|
Capital
expenditure
|
Revaluation losses
|
Property valuation
|
Capital
expenditure
|
Revaluation
losses
|
|
Note
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Flagship destinations
|
|
|
|
|
|
|
|
UK
|
|
863.1
|
13.9
|
(21.8)
|
871.0
|
12.8
|
(90.2)
|
France
|
|
1,003.3
|
14.3
|
(15.2)
|
1,241.0
|
33.3
|
(57.2)
|
Ireland
|
|
629.7
|
5.4
|
(37.5)
|
676.4
|
4.9
|
(20.1)
|
|
|
2,496.1
|
33.6
|
(74.5)
|
2,788.4
|
51.0
|
(167.5)
|
Developments and other
|
|
280.0
|
13.3
|
(44.6)
|
431.7
|
21.9
|
(53.5)
|
Managed portfolio - proportionally
consolidated
|
|
2,776.1
|
46.9
|
(119.1)
|
3,220.1
|
72.9
|
(221.0)
|
Value Retail
|
|
1,885.7
|
27.5
|
(7.7)
|
1,887.0
|
6.6
|
(60.7)
|
Group portfolio
|
|
4,661.8
|
74.4
|
(126.8)
|
5,107.1
|
79.5
|
(281.7)
|
Less Value Retail
|
13C
|
(1,885.7)
|
(27.5)
|
7.7
|
(1,887.0)
|
(6.6)
|
60.7
|
Less Share of Property
interestsa
|
12C
|
(1,379.9)
|
(27.3)
|
73.9
|
(1,722.9)
|
(35.2)
|
138.3
|
Less trading
propertiesb
|
|
-
|
-
|
-
|
(36.2)
|
-
|
-
|
Reported Group
|
11
|
1,396.2
|
19.6
|
(45.2)
|
1,461.0
|
37.7
|
(82.7)
|
a The property
valuation of Share of Property interests comprises UK Flagship
destinations: £741.8m (2022: £738.6m); France flagship
destinations: £nil (2022: £166.8m), Ireland flagship destinations:
£485.2m (2022: £525.0m) and Developments and other £152.9m (2022:
£292.5m).
b In December
2019, the Group exchanged contracts for the forward sale of Italik,
subject to completion of the development which was opened in 2021,
resulting in the sale becoming unconditional although in accordance
with a contractually allowed option and subsequent agreement, the
purchaser deferred completion to 2023. At 31 December 2022, the 75%
of Italik contracted for sale was included within Trading
properties at the agreed sale price less forecast costs to complete
with final completion occurring on 11 March 2023 as explained in
note 8.
4. REVENUE
|
|
|
2023
|
2022
|
|
|
Note
|
£m
|
£m
|
Base rent
|
|
|
69.6
|
68.2
|
Turnover rent
|
|
|
4.7
|
5.5
|
Car park
income*
|
|
|
10.9
|
10.8
|
Lease incentive
recognition
|
|
|
3.2
|
2.7
|
Other rental income
|
|
|
4.4
|
3.0
|
Gross rental income
|
|
2
|
92.8
|
90.2
|
Service charge
income*
|
|
2
|
26.6
|
24.2
|
Other income
|
|
|
|
|
- Property fee
income*
|
|
2
|
8.4
|
11.5
|
- Joint venture and associate
management fees*
|
|
2
|
6.5
|
5.5
|
|
|
|
14.9
|
17.0
|
|
|
|
|
|
Total
|
|
|
134.3
|
131.4
|
* Revenue for those
categories marked * amounted to £52.4m (2022: £52.0m) and is
recognised under IFRS 15 'Revenue from Contracts with Customers'.
All other revenue is recognised in accordance with IFRS 16
'Leases'.
5. COSTS
Profit from operating activities is stated after
charging:
|
|
|
2023
|
2022
|
Cost of
sales
|
|
|
£m
|
£m
|
Ground and equity rents
payable
|
|
|
1.1
|
0.7
|
Inclusive lease costs recovered
through rent
|
|
|
2.8
|
3.1
|
Other property
outgoingsa
|
|
|
10.6
|
6.4
|
Change in provision for amounts
not yet recognised in the income statement
|
|
|
0.2
|
(0.9)
|
|
|
|
14.7
|
9.3
|
|
|
|
2023
|
2022
|
Gross administration
costs
|
|
Note
|
£m
|
£m
|
Employee costs
|
|
|
35.2
|
42.0
|
Depreciation of plant and
equipment
|
|
|
0.6
|
1.0
|
Depreciation of right-of-use
assets
|
|
|
2.4
|
3.1
|
Other costsb
|
|
|
12.9
|
13.4
|
Business transformation
costs
|
|
9A
|
13.2
|
5.1
|
|
|
|
64.3
|
64.6
|
a Includes
charges and credits in respect of expected credit losses as set out
in note 14A.
b Comprises
predominantly professional fees (mainly audit, valuation and
legal), Corporate office costs and insurances and IT related
costs.
6. NET FINANCE COSTS
|
|
|
2023
|
2022
|
|
|
Note
|
£m
|
£m
|
Discount on redemption of
bonds
|
|
|
4.3
|
-
|
Interest receivable on
derivatives
|
|
|
12.8
|
21.4
|
Bank and other interest
receivable
|
|
|
18.1
|
4.7
|
Finance income
|
|
|
35.2
|
26.1
|
|
|
|
|
|
Interest on bank loans and
overdrafts
|
|
|
(4.5)
|
(4.6)
|
Interest on bonds and related
charges
|
|
|
(59.2)
|
(61.4)
|
Interest on senior notes and
related charges
|
|
|
(5.4)
|
(6.0)
|
Interest on obligations under head
leases
|
|
|
(2.1)
|
(2.1)
|
Interest on other lease
obligations
|
|
|
(0.1)
|
(0.1)
|
Other interest payable
|
|
|
(0.7)
|
(0.4)
|
Gross interest costs
|
|
|
(72.0)
|
(74.6)
|
Interest capitalised in respect of
properties under development
|
|
|
-
|
1.2
|
|
|
|
(72.0)
|
(73.4)
|
Debt and loan facility
cancellation costs
|
|
9A
|
-
|
(1.3)
|
Fair value gains/(losses) on
derivatives
|
|
9A
|
0.7
|
(14.4)
|
Finance
costs
|
|
|
(71.3)
|
(89.1)
|
|
|
|
|
|
Net
finance costs
|
|
|
(36.1)
|
(63.0)
|
7. TAX CHARGE
|
|
|
2023
|
|
2022
|
|
|
|
£m
|
|
£m
|
Foreign
current tax
|
|
|
0.7
|
|
0.2
|
Tax
charge
|
|
|
0.7
|
|
0.2
|
The Group's tax charge remains low
because it has tax exempt status in its principal operating
countries. The Group has been a REIT in the UK since 2007 and a
SIIC in France since 2004. These tax regimes exempt the Group's
property income and gains from corporate taxes, provided a number
of conditions in relation to the Group's activities are met. These
conditions include, but are not limited to, distributing at least
90% of the Group's UK tax exempt profits as property income
distributions (PID) with equivalent tests of 95% on French tax
exempt property profits and 70% of tax exempt property gains. Based
on preliminary calculations, the Group has met the REIT and SIIC
conditions for 2023. The residual businesses in both the UK and
France are subject to corporation tax as normal. The Irish assets
are held in a QIAIF which provides similar tax benefits to those of
a UK REIT but which subjects dividends and certain excessive
interest payments to a 20% withholding tax. The Group is committed
to remaining in these tax exempt regimes.
The Group operates in a number of
jurisdictions and is subject to periodic reviews and challenges by
local tax authorities on a range of tax matters during its normal
course of business. Tax impacts can be uncertain until a conclusion
is reached with the relevant tax authority or through a legal
process. The Group uses in-house expertise when assessing uncertain
tax positions and seeks the advice of external professional
advisors where appropriate. The Group believes that its tax
liability accruals are adequate for all open tax years based on its
assessment of many factors, including tax laws and prior
experience.
8. DISPOSALS AND IMPAIRMENT
A. DISPOSALS
Year ended 31 December 2023
On 31 March 2023, the Group raised
gross proceeds of €164m (£144m) from the disposal of its 25%
associate stake in Italie Deux in Paris and the wholly owned Italik
extension. 75% of the Italik extension had been classified as a
trading property up to the point of disposal.
On 21 April 2023, the Group
completed the sale of its 50% joint venture investment in Centrale
and Whitgift in Croydon for gross proceeds of £70m. Also during the
year the Group raised further gross proceeds of £2m from the sale
of ancillary non-core land.
In total these disposals resulted
in a net loss on disposal of £17.8m, of which a profit of £1.3m
related to the Reported Group.
Year ended 31 December 2022
The profit on the sale of
properties of £0.7m includes the disposal of Victoria, Leeds which
was sold on 25 February 2022 for gross proceeds of £120m and
several post completion adjustments arising mainly from historical
disposals in prior periods.
Also, on 15 March 2022, the Group
completed the sale of its joint venture investment in Silverburn
for gross proceeds of £70m. The Group had exchanged contracts for
this sale on 14 December 2021 such that this investment was
classified as assets held for sale at 31 December 2021 at £71.4m.
In 2022, £nil gain/loss on disposal was recognised. However, income
generated during the period of £1.6m was included in Adjusted
earnings as shown in note 9A.
B. IMPAIRMENT ON DERECOGNITION OF JOINT
VENTURES
Year ended 31 December 2023
At 31 December 2022, the Group's
Highcross and O'Parinor joint ventures, in which the Group had 50%
and 25% interests respectively had £125m of debt secured against
the property interests which was non-recourse to the Group. In both
cases the loans were in breach of certain conditions and the Group
had been working constructively with the respective lenders on
options to realise "best value" for all stakeholders.
On 9 February 2023, a receiver was
appointed to administer Highcross for the benefit of the creditors
and, as a result of no longer having joint control the Group
derecognised its share of assets and liabilities, including the
property value and £80m of debt. There was no loss on derecognition
as the Group's joint venture investment in Highcross had been fully
impaired at 31 December 2021, from which date the Group had ceased
recognising the results of this joint venture in the consolidated
income statement.
On 30 June 2023, the lenders on
O'Parinor took control of the joint venture. The Group therefore
fully impaired its joint venture investment by £22.2m and
derecognised its share of assets and liabilities, including the
property value of £61m and £45m of secured debt. The impairment has
increased by £0.1m from 30 June 2023 due to additional costs of
disposal.
9. KEY ALTERNATIVE PERFORMANCE MEASURES
Headline earnings has been
calculated in accordance with the requirements of the Johannesburg
Stock Exchange listing requirements. EPRA earnings and EPRA net
assets are calculated in accordance with guidance issued by the
European Public Real Estate recommended bases. Reconciliations from
Reported Group (IFRS) earnings after tax and Net assets
attributable to equity shareholders to these measures are set out
below.
A. ALTERNATIVE EARNINGS
MEASURES
|
|
Footnote
|
2023
£m
|
2022
£m
|
Reported Group
|
|
|
|
|
Loss after tax
|
|
|
(51.4)
|
(164.2)
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Revaluation losses on managed
portfolio
|
|
|
119.1
|
221.0
|
Disposals
|
|
|
|
|
- Loss/(profit) on sale of
properties
|
|
a
|
17.8
|
(0.6)
|
- Recycled
exchange gains on disposal of overseas property
interests
|
|
b
|
(20.1)
|
-
|
Joint venture related
|
|
|
|
|
- Impairment of investment
|
|
c
|
22.2
|
-
|
Associates (Value
Retail):
|
|
|
|
|
- Revaluation losses
|
|
d
|
7.7
|
60.7
|
- Deferred
tax
|
|
d,
e
|
7.4
|
0.1
|
- Change in fair value of financial
assets
|
|
d
|
0.2
|
(0.2)
|
Sub-total: Adjustments for Headline
earnings
|
|
|
154.3
|
281.0
|
Associates (Value
Retail):
|
|
|
|
|
- Change
in fair value of derivatives
|
|
d,
f
|
11.1
|
(18.1)
|
- Change
in fair value of participative loans
|
|
d,
f
|
(9.1)
|
(9.8)
|
Included in Financing:
|
|
|
|
|
- Discount on redemption of
bonds
|
|
g
|
(4.3)
|
-
|
- Debt and
loan facility cancellation costs
|
|
g
|
-
|
1.3
|
- Change
in fair value of derivatives
|
|
g
|
1.1
|
10.3
|
Change in fair value of other
investments
|
|
h
|
1.1
|
0.1
|
Sub-total: Adjustments for EPRA earnings
|
|
|
154.2
|
264.8
|
Included in profit from operating
activities:
|
|
|
|
|
- Business
transformation costs
|
|
i
|
13.2
|
5.1
|
- Change
in provision for amounts not yet recognised in the income
statement
|
|
j
|
0.3
|
(2.4)
|
- Income
from assets held for sale
|
|
k
|
-
|
1.6
|
Total: Adjustments for Adjusted earnings
|
|
|
167.7
|
269.1
|
|
|
|
|
|
Headline earnings
|
|
|
102.9
|
116.8
|
EPRA earnings
|
|
|
102.8
|
100.6
|
Adjusted earnings
|
|
|
116.3
|
104.9
|
a As shown in
note 2, includes profit on the sale of properties of £1.3m (2022:
loss of £0.6m) and losses on the sale of joint venture and
associates of £19.1m (2022: £nil) principally relating to the sales
of Italie Deux and Croydon. See note 8 for further
details.
b Exchange gains
previously recognised in equity until disposal, principally in
relation to Italie Deux and O'Parinor.
c
Impairment resulting from derecognition of O'Parinor joint venture,
see note 8 for details.
d Adjustments in
respect of associates. Total for 2023 is £17.3m (2022:
£32.7m).
e In accordance
with EPRA guidance, the tax effects of EPRA adjustments (including
those for disposals) are excluded.
f Change
in fair value of derivatives and participative loans: such items
are excluded because they represent gains and losses arising from
market rather than settlement revaluation methodologies which
differ from the accruals basis upon which all other non-investment
property related assets and liabilities are measured. Such a
treatment is a form of revaluation gain or loss created by an
assumption that the derivatives or loans will be settled before
their maturity. Such gains and losses are excluded from Adjusted
earnings as they are unrealised and conflict with the commercial
reasons for entering into such arrangements and are expected to be
held to maturity.
g Financing items comprise:
|
|
2023
|
2022
|
|
|
Reported Group
£m
|
Share of Property
interests
£m
|
Total
£m
|
Reported Group
£m
|
Share of Property
interests
£m
|
Total
£m
|
Discount on redemption of
bonds
|
|
(4.3)
|
-
|
(4.3)
|
-
|
-
|
-
|
Debt and loan facility cancellation
costs
|
|
-
|
-
|
-
|
1.3
|
-
|
1.3
|
Change in fair value of
derivativesf
|
|
(0.7)
|
1.8
|
1.1
|
14.4
|
(4.1)
|
10.3
|
|
|
(5.0)
|
1.8
|
(3.2)
|
15.7
|
(4.1)
|
11.6
|
The write off of up-front fees
arising on early cancellation or early repayment redemption
premiums are considered outside of day-to-day financing activities
and are accordingly excluded from Adjusted earnings.
h Relates to the
fair value movement in a small residual investment in VIA
Outlets.
i
Business transformation costs comprise:
|
|
|
2023
£m
|
2022
£m
|
Employee severance
|
|
|
6.3
|
3.4
|
System related costs
|
|
|
2.9
|
1.7
|
Consultancy costs
|
|
|
4.0
|
-
|
|
|
|
13.2
|
5.1
|
Such costs relate to the strategic
and operational review undertaken by the new management team and
which is an integral part of the Group's strategy announced during
2021. The related costs are incremental and do not form part of
underlying trading. These costs have been incurred since the
announcement of the strategy and further transformation activities
will take place in 2024.
j
The Group makes a charge for expected credit losses in accordance
with the technical interpretation of IFRS 9 irrespective of whether
the income to which the provision relates has been recognised in
the income statement or is deferred on the balance sheet. Because
of the mismatch this causes between the cost of provision being
recognised in one accounting period and the related revenue being
recognised in a different accounting period, the adjustment
eradicates this distortion. For 2023 the adjustment of £0.3m (2022:
£(2.4m)) is split £0.2m (2022: £(0.9m)) for the Reported Group and
£0.1m (2022: (£1.5m)) for Share of Property interests.
k Income
from assets held for sale in 2022 relates to the Group's joint
venture investment in Silverburn, which was transferred to assets
held for sale as at 31 December 2021 and where the sale
completed in March 2022. A £nil gain/loss was generated on the sale
which comprised certain additional costs and accruals of £1.6m
which were offset by net income generated in the period up to the
point of disposal (after taking account of distributions) of £1.6m.
The Group excludes losses on disposal from its EPRA and Adjusted
earnings, and because this offset of income generated in the period
against the loss causes the income to be excluded, the income is
added back as an adjusting item in order to reflect the fact that
the property remained under the Group's ownership and management up
until completion of the disposal and is therefore considered to
form part of underlying earnings. There were no assets held for
sale as at 31 December 2023.
B. ALTERNATIVE NET ASSET
MEASURES
The Group uses the EPRA best
practice guidelines incorporating three measures of net asset
value: EPRA Net Tangible Assets (NTA), Net Reinstatement Value
(NRV) and Net Disposal Value (NDV). EPRA NTA is considered to be
the most relevant measure for the Group.
A reconciliation between IFRS net
assets and the three EPRA net asset valuation metrics is set out
below.
|
|
|
|
|
|
2023
|
|
|
Footnote
|
Reported Group
£m
|
Share of Property
interests
£m
|
Value Retail
£m
|
Total
£m
|
|
|
|
|
|
|
|
Reported balance sheet net assets
(equity shareholders' funds)
|
|
|
2,462.6
|
-
|
-
|
2,462.6
|
Change in fair value of
borrowings
|
|
a
|
36.7
|
(0.2)
|
-
|
36.5
|
EPRA NDV
|
|
|
|
|
|
2,499.1
|
Deduct change in fair value of
borrowings
|
|
a
|
(36.7)
|
0.2
|
-
|
(36.5)
|
Deferred tax - 50% share
|
|
b
|
0.2
|
0.1
|
100.7
|
101.0
|
Fair value of currency swaps as a
result of interest rates
|
|
c
|
1.0
|
-
|
-
|
1.0
|
Fair value of interest rate
swaps
|
|
|
0.7
|
(1.3)
|
(22.0)
|
(22.6)
|
EPRA NTA
|
|
|
|
|
|
2,542.0
|
Deferred tax - remaining 50%
share
|
|
b
|
0.2
|
-
|
100.7
|
100.9
|
Purchasers' costs
|
|
d
|
302.9
|
-
|
-
|
302.9
|
EPRA NRV
|
|
|
|
|
|
2,945.8
|
|
|
|
|
|
2022
|
|
|
Footnote
|
Reported Group
£m
|
Share of Property
interests
£m
|
Value Retail
£m
|
Total
£m
|
|
|
|
|
|
|
|
Reported balance sheet net assets
(equity shareholders' funds)
|
|
|
2,586.4
|
-
|
-
|
2,586.4
|
Change in fair value of
borrowings
|
|
a
|
216.2
|
(0.7)
|
-
|
215.5
|
EPRA NDV
|
|
|
|
|
|
2,801.9
|
Deduct change in fair value of
borrowings
|
|
a
|
(216.2)
|
0.7
|
-
|
(215.5)
|
Deferred tax - 50% share
|
|
b
|
0.2
|
0.1
|
99.4
|
99.7
|
Fair value of currency swaps as a
result of interest rates
|
|
c
|
(0.9)
|
-
|
-
|
(0.9)
|
Fair value of interest rate
swaps
|
|
|
2.1
|
(6.3)
|
(47.3)
|
(51.5)
|
EPRA NTA
|
|
|
|
|
|
2,633.7
|
Deferred tax - remaining 50%
share
|
|
b
|
0.2
|
-
|
99.4
|
99.6
|
Purchasers' costs
|
|
d
|
330.0
|
-
|
-
|
330.0
|
EPRA NRV
|
|
|
|
|
|
3,063.3
|
a Applicable for
EPRA NDV calculation only and hence the adjustment is reversed for
EPRA NTA and EPRA NRV.
b EPRA guidance
stipulates exclusion of 50% of deferred tax for EPRA NTA
purposes.
c Excludes
impact of foreign exchange.
d Represents
property transfer taxes and fees payable should the Group's entire
property portfolio, (including Value Retail), be acquired at year
end market values.
10. (LOSS)/EARNINGS PER SHARE AND NET ASSET VALUE PER
SHARE
The calculations of the
(loss)/earnings per share (EPS) measures set out below are based on
(loss)/profit after tax, Headline profit after tax, EPRA profit
after tax and Adjusted profit after tax attributable to owners of
the parent and the weighted average number of shares in issue
during the year.
Headline earnings per share has
been calculated in accordance with the requirements of the
Johannesburg Stock Exchange listing requirements. EPRA has issued
recommended bases for the calculation of certain per share
information which includes net asset value per share as well as
earnings per share. The calculation of Headline, EPRA and Adjusted
earnings which includes a reconciliation to Reported IFRS earnings
is set out in note 9A.
Basic EPS measures are calculated
by dividing the earnings attributable to the equity shareholders of
the Company by the weighted average number of shares outstanding
during the year. Diluted EPS measures are calculated on the same
basis as basic EPS but with a further adjustment to the weighted
average number of shares outstanding to assume conversion of all
potentially dilutive ordinary shares. Such potentially dilutive
ordinary shares comprise share options and awards granted to
colleagues where the exercise price is less than the average market
price of the Company's ordinary shares during the year and any
unvested shares which have met, or are expected to meet, the
performance conditions at the end of the year. To the extent that
there is no dilution, this arises due to the anti-dilutive effect
of all such shares.
Net assets per share comprise net
assets calculated in accordance with EPRA guidelines, as set out in
note 9B, divided by the number of shares in issue.
A. NUMBER
OF ORDINARY SHARES FOR PER SHARE CALCULATIONS
|
|
2023
|
2022
|
|
|
million
|
million
|
Shares in issue (for purposes of net asset per share
calculations)
|
|
5,002.3
|
5,002.3
|
|
|
|
|
|
|
|
|
Weighted average number of shares:
|
|
|
|
For purposes of basic EPS
|
|
4,971.4
|
4,938.9
|
Effect of potentially dilutive
shares (share options)
|
|
10.6
|
10.3
|
For purposes of diluted EPS (excluding Reported
Group)
|
|
4,982.0
|
4,949.2
|
B.
(LOSS)/EARNINGS PER SHARE
|
|
|
(Loss)/earnings
|
|
(Loss)/earnings per
share
|
|
|
|
|
|
|
Basic
|
Diluted
|
|
|
Note
|
2023
£m
|
2022
£m
|
|
2023
pence
|
2022
pence
|
2023
pence
|
2022
pence
|
Reported Group
|
|
|
(51.4)
|
(164.2)
|
|
(1.0)p
|
(3.3)p
|
(1.0)p
|
(3.3)p
|
Headline
|
|
9A
|
102.9
|
116.8
|
|
2.1p
|
2.4p
|
2.1p
|
2.4p
|
EPRA
|
|
9A
|
102.8
|
100.6
|
|
2.1p
|
2.0p
|
2.1p
|
2.0p
|
Adjusted
|
|
9A
|
116.3
|
104.9
|
|
2.3p
|
2.1p
|
2.3p
|
2.1p
|
C. NET
ASSET VALUE PER SHARE
|
|
Net asset value
|
|
Net asset value per
share
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
Note
|
£m
|
£m
|
|
pence
|
pence
|
EPRA NDV
|
9B
|
2,499.1
|
2,801.9
|
|
50p
|
56p
|
EPRA NTA
|
9B
|
2,542.0
|
2,633.7
|
|
51p
|
53p
|
EPRA NRV
|
9B
|
2,945.8
|
3,063.3
|
|
59p
|
61p
|
11. PROPERTIES
|
|
2023
|
2022
|
|
|
Investment properties
|
Trading properties
|
Total
|
Investment properties
|
Trading
properties
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1 January
|
|
1,461.0
|
36.2
|
1,497.2
|
1,561.4
|
34.3
|
1,595.7
|
Revaluation losses
|
|
(45.2)
|
-
|
(45.2)
|
(82.7)
|
-
|
(82.7)
|
Capital expenditure
|
|
19.6
|
-
|
19.6
|
37.7
|
-
|
37.7
|
Capitalised interest
|
|
-
|
-
|
-
|
1.2
|
-
|
1.2
|
Disposals (see note 8)
|
|
(11.9)
|
(36.2)
|
(48.1)
|
(125.3)
|
-
|
(125.3)
|
Exchange adjustment
|
|
(27.3)
|
-
|
(27.3)
|
68.7
|
1.9
|
70.6
|
At 31 December
|
|
1,396.2
|
-
|
1,396.2
|
1,461.0
|
36.2
|
1,497.2
|
|
|
2023
|
2022
|
|
|
Freehold
|
Long leasehold
|
Total
|
Freehold
|
Long leasehold
|
Total
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Valuation analysis by
tenure
|
|
734.0
|
662.2
|
1,396.2
|
805.3
|
691.9
|
1,497.2
|
Properties are stated at fair
value, valued by professionally qualified external valuers in
accordance with RICS Valuation - Global Standards as
follows:
Valuer
|
Properties
|
CBRE
|
UK flagships, Developments and
other properties
|
Jones Lang LaSalle
|
UK flagships, French flagships,
Developments and other properties
|
Cushman and Wakefield
|
Brent Cross, Irish flagships,
Development and other, Value Retail (not included in the table
above)
|
The estimation and judgement
required in the valuations which are derived from data that is not
publicly available, consistent with EPRA's guidance, these
valuations are classified as Level 3 in the IFRS 13 fair value
hierarchy. A reconciliation of the Group portfolio valuation to
Reported Group is shown in note 3B. A listing of properties is in
Table 22 of the Additional Information.
A.
JOINT OPERATIONS
Investment properties included a
50% interest in the Ilac Centre, Dublin and a 50% interest in
Pavilions, Swords totalling £144.5m (2022: £151.4m). These
properties are jointly controlled in co-ownership with Irish Life
Assurance plc.
12. INVESTMENT IN JOINT VENTURES
The Group's investments in joint
ventures form part of the Share of Property interests to arrive at
management's analysis of the Group on a proportionally consolidated
basis as explained in note 3 and set out in note 2.
The Group and its partners invest
principally by way of equity investment. However, where applicable,
non-equity (loan) balances have been included within non-current
other payables as a liability of the joint venture. Joint ventures
comprise prime urban real estate consisting of Flagship
destinations and Developments and other properties.
A. INVESTMENTS AT 31 DECEMBER
2023
|
|
|
|
Joint
venture
|
Partner
|
Principal
property
|
Share
|
United Kingdom
|
|
|
|
Bishopsgate Goodsyard Regeneration
Limited
|
Ballymore
Properties
|
The
Goodsyard
|
50%
|
Brent Cross Partnership
|
Aberdeen
Standard Investments
|
Brent
Cross
|
41%
|
Bristol Alliance Limited
Partnership
|
AXA Real
Estate
|
Cabot
Circus
|
50%
|
Grand Central Limited
Partnership
|
CPP
Investments
|
Grand
Central
|
50%
|
The Bull Ring Limited
Partnership
|
CPP
Investments
|
Bullring
|
50%
|
The Oracle Limited
Partnership
|
ADIA
|
The
Oracle
|
50%
|
The West Quay Limited
Partnership
|
GIC
|
Westquay
|
50%
|
Ireland
|
|
|
|
Dundrum Retail Limited
Partnership/Dundrum Car Park Limited
|
PIMCO
|
Dundrum
|
50%
|
The results of disposals of
interests in joint ventures are included up to the point of
disposal except for where such disposals form part of assets held
for sale whereby they are excluded for the whole year.
During the year, and as explained
in note 8, the Group disposed of its 50% interest in Croydon and
also derecognised its 50% investment in Highcross and 25%
investment in O'Parinor.
Figures in the following tables
include, where applicable, adjustments to align to the Group's
accounting policies and exclude balances which are eliminated on
consolidation. For 2023, Goodsyard, Croydon (up to its disposal in
April 2023), Highcross (up to date of derecognition in February
2023) and O'Parinor (up to date of derecognition in June 2023) are
included in 'Other'. Croydon is separately disclosed in
2022.
B. RESULTS
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
|
|
100% share
|
|
|
Brent Cross
|
Cabot Circus
|
Bullring
|
Grand Central
|
The Oracle
|
West Quay
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Gross rental
income
|
|
28.6
|
29.4
|
48.5
|
8.0
|
23.5
|
28.9
|
Net rental
income
|
|
24.1
|
22.8
|
39.7
|
4.4
|
14.7
|
23.2
|
Administration expenses
|
|
(0.1)
|
(0.1)
|
(0.1)
|
(0.1)
|
(0.1)
|
(0.1)
|
Profit from operating
activities
|
|
24.0
|
22.7
|
39.6
|
4.3
|
14.6
|
23.1
|
Revaluation (losses)/gains on properties
|
|
(9.6)
|
(6.1)
|
21.3
|
(13.8)
|
(22.3)
|
(2.8)
|
Operating
profit/(loss)
|
|
14.4
|
16.6
|
60.9
|
(9.5)
|
(7.7)
|
20.3
|
Finance
income
|
|
0.4
|
0.4
|
0.5
|
-
|
0.2
|
0.7
|
Finance
costs
|
|
(0.4)
|
(0.7)
|
-
|
(0.1)
|
-
|
(0.4)
|
Profit/(loss) before
tax
|
|
14.4
|
16.3
|
61.4
|
(9.6)
|
(7.5)
|
20.6
|
Tax
charge
|
|
-
|
-
|
-
|
-
|
(0.1)
|
-
|
Profit/(loss) for the
year
|
a
|
14.4
|
16.3
|
61.4
|
(9.6)
|
(7.6)
|
20.6
|
Share of distributions
received by the Group
|
|
9.8
|
7.5
|
10.0
|
14.9
|
2.0
|
-
|
C. ASSETS AND
LIABILITIES
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
|
|
100% share
|
|
|
Brent Cross
|
Cabot Circus
|
Bullring
|
Grand Central
|
The Oracle
|
West Quay
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Non-current
assets
|
|
|
|
|
|
|
|
Investment properties
|
|
388.0
|
234.9
|
575.0
|
67.0
|
184.1
|
283.5
|
Other
non-current assets
|
|
12.8
|
13.6
|
0.3
|
2.6
|
-
|
4.2
|
|
|
400.8
|
248.5
|
575.3
|
69.6
|
184.1
|
287.7
|
Current
assets
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
16.9
|
18.8
|
28.8
|
9.0
|
14.8
|
31.3
|
Other
current assets
|
|
5.4
|
6.0
|
7.5
|
9.9
|
4.3
|
7.9
|
|
|
22.3
|
24.8
|
36.3
|
18.9
|
19.1
|
39.2
|
Current
liabilities
|
|
|
|
|
|
|
|
Loans -
secured
|
|
-
|
-
|
-
|
-
|
-
|
-
|
Other
payables
|
|
(14.9)
|
(13.1)
|
(22.0)
|
(10.8)
|
(8.9)
|
(17.0)
|
|
|
(14.9)
|
(13.1)
|
(22.0)
|
(10.8)
|
(8.9)
|
(17.0)
|
Non-current
liabilities
|
|
|
|
|
|
|
|
Obligations under head leases
|
|
(12.8)
|
(14.1)
|
-
|
(2.8)
|
-
|
(4.2)
|
Other
payables - due to Group companies
|
b
|
-
|
-
|
-
|
-
|
-
|
(348.2)
|
- other parties and deferred tax
|
|
(0.9)
|
(0.2)
|
(0.6)
|
(0.4)
|
(0.4)
|
(348.9)
|
|
|
(13.7)
|
(14.3)
|
(0.6)
|
(3.2)
|
(0.4)
|
(701.3)
|
Net
assets/(liabilities)
|
b
|
394.5
|
245.9
|
589.0
|
74.5
|
193.9
|
(391.4)
|
a Following the
impairment of Highcross to £nil in 2021, the Group ceased to equity
account for its investment in this joint venture such that although
gross balance sheet items on a proportionally consolidated basis
remain included in the Group's figures, it was excluded from all
income statement metrics including revaluation losses. The effect
of this is that the Group's share of results was £nil and the
cumulative losses restricted shown on the balance sheet therefore
represents the Group's share of losses which exceed the Group's
investment of £nil.
b The Group's
long term loan due from Westquay of £348.2m (2022: £348.2m) has
been impaired by its share of the net liabilities of Westquay of
£195.7m (2022: £201.1m).
c
Comprises income in respect of Silverburn as described in note
9A.
d Other current
assets in Croydon included restricted monetary assets of £41.8m
relating to cash held in escrow for specified development
costs.
e Dundrum loans
of £42.6m at 100%, previously included in 'other payables' were
reclassified to equity.
|
|
|
|
|
2023
|
|
|
|
|
100%
|
|
|
|
Dundrum
|
Other
|
Total
|
Group Share
|
|
|
£m
|
£m
|
£m
|
£m
|
Gross rental
income
|
|
59.2
|
17.5
|
243.6
|
114.4
|
Net rental
income
|
|
52.6
|
13.7
|
195.2
|
90.4
|
Administration expenses
|
|
(0.3)
|
-
|
(0.9)
|
(0.4)
|
Profit from operating
activities
|
|
52.3
|
13.7
|
194.3
|
90.0
|
Revaluation (losses)/gains on properties
|
|
(74.4)
|
(41.8)
|
(149.5)
|
(73.9)
|
Operating
(loss)/profit
|
|
(22.1)
|
(28.1)
|
44.8
|
16.1
|
Finance
income
|
|
4.6
|
2.9
|
9.7
|
4.1
|
Finance
costs
|
|
(17.1)
|
(7.4)
|
(26.1)
|
(10.7)
|
Profit/(loss) before
tax
|
|
(34.6)
|
(32.6)
|
28.4
|
9.5
|
Tax
charge
|
|
-
|
-
|
(0.1)
|
(0.1)
|
Profit/(loss) for the
year
|
a
|
(34.6)
|
(32.6)
|
28.3
|
9.4
|
Share of distributions
received by the Group
|
|
3.5
|
-
|
47.7
|
47.7
|
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
|
100% share
|
|
|
|
|
|
Dundrum
|
Other
|
Total
|
Group
Share
|
|
|
|
|
£m
|
£m
|
£m
|
£m
|
Non-current
assets
|
|
|
|
|
|
|
|
Investment properties
|
|
|
|
1,011.0
|
89.0
|
2,832.5
|
1,379.9
|
Other
non-current assets
|
|
|
|
2.2
|
-
|
35.7
|
16.7
|
|
|
|
|
1,013.2
|
89.0
|
2,868.2
|
1,396.6
|
Current
assets
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
|
|
77.8
|
0.6
|
198.0
|
97.3
|
Other
current assets
|
|
|
|
8.0
|
0.1
|
49.1
|
23.6
|
|
|
|
|
85.8
|
0.7
|
247.1
|
120.9
|
Current
liabilities
|
|
|
|
|
|
|
|
Loans -
secured
|
|
|
|
(520.0)
|
-
|
(520.0)
|
(260.0)
|
Other
payables
|
|
|
|
(9.1)
|
(0.5)
|
(96.3)
|
(46.0)
|
|
|
|
|
(529.1)
|
(0.5)
|
(616.3)
|
(306.0)
|
Non-current
liabilities
|
|
|
|
|
|
|
|
Obligations under head leases
|
|
|
|
-
|
-
|
(33.9)
|
(15.8)
|
Other
payables - due to Group companies
|
|
|
b
|
-
|
(49.3)
|
(397.5)
|
-
|
- other parties and deferred tax
|
|
|
|
(1.0)
|
(49.5)
|
(401.9)
|
(2.5)
|
|
|
|
|
(1.0)
|
(98.8)
|
(833.3)
|
(18.3)
|
Net
assets/(liabilities)
|
|
|
b
|
568.9
|
(9.6)
|
1,665.7
|
1,193.2
|
B. RESULTS
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
|
100% share
|
|
|
Brent Cross
|
Cabot Circus
|
Bullring
|
Grand Central
|
The Oracle
|
West Quay
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Gross rental
income
|
|
28.0
|
27.8
|
45.2
|
9.9
|
22.1
|
29.1
|
Net rental
income
|
|
26.5
|
23.9
|
37.2
|
6.4
|
15.7
|
24.5
|
Administration expenses
|
|
-
|
-
|
0.1
|
(0.1)
|
-
|
-
|
Profit from operating
activities
|
|
26.5
|
23.9
|
37.3
|
6.3
|
15.7
|
24.5
|
Revaluation losses on properties
|
|
(35.8)
|
(30.0)
|
(35.0)
|
(4.6)
|
(44.1)
|
(29.3)
|
Adjustment for income from assets held for sale
|
c
|
-
|
-
|
-
|
-
|
-
|
-
|
Operating
(loss)/profit
|
|
(9.3)
|
(6.1)
|
2.3
|
1.7
|
(28.4)
|
(4.8)
|
Finance
income
|
|
-
|
-
|
0.3
|
-
|
0.1
|
-
|
Finance
costs
|
|
(0.3)
|
(0.5)
|
-
|
(0.1)
|
-
|
(0.2)
|
(Loss)/profit before
tax
|
|
(9.6)
|
(6.6)
|
2.6
|
1.6
|
(28.3)
|
(5.0)
|
Tax
charge
|
|
-
|
-
|
-
|
-
|
-
|
-
|
(Loss)/profit for the
year
|
|
(9.6)
|
(6.6)
|
2.6
|
1.6
|
(28.3)
|
(5.0)
|
Share of distributions
received by the Group
|
|
11.8
|
15.8
|
23.9
|
-
|
9.3
|
-
|
C. ASSETS AND
LIABILITIES
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
|
100% share
|
|
|
Brent Cross
|
Cabot Circus
|
Bullring
|
Grand Central
|
The Oracle
|
West Quay
|
|
|
|
|
|
|
|
e
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Non-current
assets
|
|
|
|
|
|
|
|
Investment properties
|
|
396.6
|
237.3
|
540.5
|
78.5
|
201.1
|
285.3
|
Other
non-current assets
|
|
12.8
|
13.5
|
2.7
|
2.6
|
-
|
4.2
|
|
|
409.4
|
250.8
|
543.2
|
81.1
|
201.1
|
289.5
|
Current
assets
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
13.0
|
24.1
|
18.0
|
24.7
|
11.6
|
16.5
|
Other
current assets
|
d
|
4.2
|
7.1
|
9.8
|
19.0
|
3.6
|
3.9
|
|
|
17.2
|
31.2
|
27.8
|
43.7
|
15.2
|
20.4
|
Current
liabilities
|
|
|
|
|
|
|
|
Loans -
secured
|
|
-
|
-
|
-
|
-
|
-
|
-
|
Other
payables
|
|
(13.6)
|
(21.3)
|
(20.9)
|
(7.3)
|
(9.7)
|
(10.9)
|
|
|
(13.6)
|
(21.3)
|
(20.9)
|
(7.3)
|
(9.7)
|
(10.9)
|
Non-current
liabilities
|
|
|
|
|
|
|
|
Loans -
secured
|
|
-
|
-
|
-
|
-
|
-
|
-
|
Obligations under head leases
|
|
(12.8)
|
(14.1)
|
-
|
(2.8)
|
-
|
(4.2)
|
Other
payables - due to Group companies
|
b,e
|
-
|
-
|
-
|
-
|
-
|
(348.2)
|
- other parties and deferred tax
|
e
|
(0.8)
|
(0.6)
|
(1.0)
|
(0.6)
|
(0.7)
|
(348.8)
|
|
|
(13.6)
|
(14.7)
|
(1.0)
|
(3.4)
|
(0.7)
|
(701.2)
|
Cumulative losses restricted
|
a
|
-
|
-
|
-
|
-
|
-
|
-
|
Net
assets/(liabilities)
|
b
|
399.4
|
246.0
|
549.1
|
114.1
|
205.9
|
(402.2)
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
100% share
|
|
|
|
Croydon
|
Highcross
|
Dundrum
|
Other
|
Total
|
Group Share
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Gross rental
income
|
|
14.3
|
20.6
|
55.0
|
21.4
|
273.4
|
119.4
|
Net rental
income
|
|
0.5
|
14.3
|
48.1
|
22.6
|
219.7
|
95.5
|
Administration expenses
|
|
(0.2)
|
(0.3)
|
(0.4)
|
(0.1)
|
(1.0)
|
(0.3)
|
Profit from operating
activities
|
|
0.3
|
14.0
|
47.7
|
22.5
|
218.7
|
95.2
|
Revaluation losses on properties
|
|
(54.2)
|
(52.1)
|
(34.2)
|
(12.5)
|
(331.8)
|
(132.1)
|
Adjustment for income from assets held for sale
|
c
|
-
|
-
|
-
|
(3.2)
|
(3.2)
|
(1.6)
|
Operating
(loss)/profit
|
|
(53.9)
|
(38.1)
|
13.5
|
6.8
|
(116.3)
|
(38.5)
|
Finance
income
|
|
0.2
|
7.4
|
-
|
-
|
8.0
|
0.3
|
Finance
costs
|
|
-
|
(5.0)
|
(1.9)
|
(5.7)
|
(13.7)
|
(3.0)
|
(Loss)/profit before
tax
|
|
(53.7)
|
(35.7)
|
11.6
|
1.1
|
(122.0)
|
(41.2)
|
Tax
charge
|
|
(0.5)
|
-
|
-
|
-
|
(0.5)
|
(0.3)
|
(Loss)/profit for the
year
|
|
(54.2)
|
(35.7)
|
11.6
|
1.1
|
(122.5)
|
(41.5)
|
Share of distributions
received by the Group
|
|
-
|
-
|
2.6
|
-
|
63.4
|
63.4
|
|
|
|
|
|
|
|
2022
|
|
|
|
|
|
|
100% share
|
|
|
|
Croydon
|
Highcross
|
Dundrum
|
Other
|
Total
|
Group Share
|
|
|
|
|
|
|
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Non-current
assets
|
|
|
|
|
|
|
|
Investment properties
|
|
108.9
|
125.7
|
1,088.9
|
379.3
|
3,442.1
|
1,620.0
|
Other
non-current assets
|
|
0.6
|
6.1
|
8.9
|
-
|
51.4
|
26.7
|
|
|
109.5
|
131.8
|
1,097.8
|
379.3
|
3,493.5
|
1,646.7
|
Current
assets
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
13.9
|
22.2
|
73.3
|
13.9
|
231.2
|
110.9
|
Other
current assets
|
d
|
65.4
|
5.0
|
3.7
|
19.5
|
141.2
|
61.3
|
|
|
79.3
|
27.2
|
77.0
|
33.4
|
372.4
|
172.2
|
Current
liabilities
|
|
|
|
|
|
|
|
Loans -
secured
|
|
-
|
(158.8)
|
-
|
(186.4)
|
(345.2)
|
(126.1)
|
Other
payables
|
|
(16.0)
|
(35.7)
|
(14.9)
|
(11.8)
|
(162.1)
|
(80.7)
|
|
|
(16.0)
|
(194.5)
|
(14.9)
|
(198.2)
|
(507.3)
|
(206.8)
|
Non-current
liabilities
|
|
|
|
|
|
|
|
Loans -
secured
|
|
-
|
-
|
(530.9)
|
-
|
(530.9)
|
(265.5)
|
Obligations under head leases
|
|
-
|
-
|
-
|
-
|
(33.9)
|
(15.8)
|
Other
payables - due to Group companies
|
b,e
|
(25.3)
|
-
|
-
|
(45.4)
|
(418.9)
|
-
|
- other parties and deferred tax
|
e
|
(43.3)
|
(0.2)
|
(0.9)
|
(55.8)
|
(452.7)
|
(6.3)
|
|
|
(68.6)
|
(0.2)
|
(531.8)
|
(101.2)
|
(1,436.4)
|
(287.6)
|
Cumulative losses restricted
|
a
|
-
|
35.7
|
-
|
-
|
35.7
|
17.9
|
Net
assets/(liabilities)
|
b
|
104.2
|
-
|
628.1
|
113.3
|
1,957.9
|
1,342.4
|
D. RECONCILIATION OF MOVEMENTS IN
INVESTMENT IN JOINT VENTURES
|
|
2023
|
2022
|
|
Footnote
|
£m
|
£m
|
At 1 January
|
|
1,342.4
|
1,451.8
|
Share of results of joint
ventures
|
|
9.4
|
(41.5)
|
Advances
|
|
8.3
|
4.0
|
Cash distributions (including
interest)
|
a
|
(55.0)
|
(84.0)
|
Other receivables
|
|
(6.8)
|
(5.3)
|
Disposals (see note 8)
|
|
(98.9)
|
-
|
Exchange and other
movements
|
|
(6.2)
|
17.4
|
At 31 December
|
|
1,193.2
|
1,342.4
|
a Comprises
distributions of £47.7m (2022: £63.4m) and interest previously
accrued of £7.3m (2022: £20.6m).
13. INVESTMENT IN ASSOCIATES
A. PERCENTAGE SHARE
|
|
|
|
2023
|
2022
|
|
|
Principal
property
|
Footnote
|
Share
|
Share
|
Value Retail
|
|
Various Villages across
Europe
|
a
|
40%
|
40%
|
Italie Deux
|
|
Italie Deux, Paris
|
b
|
-
|
25%
|
a Interest is
calculated based on the share of profits to which the Group is
entitled and excludes individual interests which are loss
making.
b The Group
disposed of its 25% interest in Italie Deux on 31 March 2023. See
note 8 for further details.
Analysis of the results and assets
and liabilities of the Group's investment in associates is set out
below and with the exception of Value Retail, these results form
part of the Share of Property interests to arrive at management's
analysis of the Group on a proportionally consolidated basis as
explained in note 3 and set out in note 2.
B. RESULTS
|
2023
|
|
Value
Retail
|
Italie
Deux
|
Total
|
|
100% share
|
Group share
|
100% share
|
Group share
|
100% share
|
Group share
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Gross rental income
|
482.7
|
162.4
|
4.8
|
1.2
|
487.5
|
163.6
|
Net rental income
|
330.6
|
114.5
|
4.6
|
1.2
|
335.2
|
115.7
|
Administration expenses
|
(156.9)
|
(51.4)
|
-
|
-
|
(156.9)
|
(51.4)
|
Profit from operating
activities
|
173.7
|
63.1
|
4.6
|
1.2
|
178.3
|
64.3
|
Revaluation gains/(losses) on
properties
|
15.8
|
(7.7)
|
-
|
-
|
15.8
|
(7.7)
|
Operating profit
|
189.5
|
55.4
|
4.6
|
1.2
|
194.1
|
56.6
|
|
|
|
|
|
|
|
Interest costs
|
(97.0)
|
(35.2)
|
-
|
-
|
(97.0)
|
(35.2)
|
Fair value losses on
derivatives
|
(47.5)
|
(11.1)
|
-
|
-
|
(47.5)
|
(11.1)
|
Fair value gain on participative
loans
|
-
|
15.6
|
-
|
-
|
-
|
15.6
|
Net finance costs
|
(144.5)
|
(30.7)
|
-
|
-
|
(144.5)
|
(30.7)
|
|
|
|
|
|
|
|
Profit before tax
|
45.0
|
24.7
|
4.6
|
1.2
|
49.6
|
25.9
|
Current tax charge
|
(12.9)
|
(2.5)
|
-
|
-
|
(12.9)
|
(2.5)
|
Deferred tax charge
|
(28.9)
|
(7.4)
|
-
|
-
|
(28.9)
|
(7.4)
|
Profit for the year
|
3.2
|
14.8
|
4.6
|
1.2
|
7.8
|
16.0
|
|
|
|
|
|
|
|
Adjusted earnings - Value Retail
|
|
|
|
|
|
32.1
|
Adjusted earnings - Italie Deux
|
|
|
|
|
|
1.2
|
Adjusted earnings - Total
|
|
|
|
|
|
33.3
|
|
2022
|
|
Value Retail
|
Italie Deux
|
Total
|
|
100% share
|
Group share
|
100% share
|
Group share
|
100%
share
|
Group
share
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Gross rental income
|
434.1
|
148.0
|
22.4
|
5.6
|
456.5
|
153.6
|
Net rental income
|
288.5
|
101.3
|
17.8
|
4.4
|
306.3
|
105.7
|
Administration expenses
|
(144.3)
|
(48.0)
|
(0.1)
|
-
|
(144.4)
|
(48.0)
|
Profit from operating
activities
|
144.2
|
53.3
|
17.7
|
4.4
|
161.9
|
57.7
|
Revaluation losses on
properties
|
(98.1)
|
(60.7)
|
(24.8)
|
(6.2)
|
(122.9)
|
(66.9)
|
Operating profit/(loss)
|
46.1
|
(7.4)
|
(7.1)
|
(1.8)
|
39.0
|
(9.2)
|
|
|
|
|
|
|
|
Interest costs
|
(79.6)
|
(27.7)
|
(0.1)
|
-
|
(79.7)
|
(27.7)
|
Fair value gain on
derivatives
|
57.0
|
18.1
|
-
|
-
|
57.0
|
18.1
|
Fair value gain on participative
loans
|
-
|
15.0
|
-
|
-
|
-
|
15.0
|
Net finance (costs)/income
|
(22.6)
|
5.4
|
(0.1)
|
-
|
(22.7)
|
5.4
|
|
|
|
|
|
|
|
Profit/(loss) before tax
|
23.5
|
(2.0)
|
(7.2)
|
(1.8)
|
16.3
|
(3.8)
|
Current tax charge
|
(15.3)
|
(3.2)
|
-
|
-
|
(15.3)
|
(3.2)
|
Deferred tax charge
|
(8.8)
|
(0.1)
|
-
|
-
|
(8.8)
|
(0.1)
|
Loss for the year
|
(0.6)
|
(5.3)
|
(7.2)
|
(1.8)
|
(7.8)
|
(7.1)
|
|
|
|
|
|
|
|
Adjusted earnings - Value Retail
|
|
|
|
|
|
27.4
|
Adjusted earnings - Italie Deux
|
|
|
|
|
|
4.4
|
Adjusted earnings - Total
|
|
|
|
|
|
31.8
|
C. ASSETS AND
LIABILITIES
|
|
|
2023
|
2022
|
|
|
|
|
100% share
|
|
100% share
|
|
|
|
|
|
|
Value
Retail
|
Group
share
|
Value
Retail
|
Italie
Deux
|
Total
|
Group share
|
|
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
Investment properties
|
|
|
|
5,142.1
|
1,885.7
|
5,151.0
|
411.6
|
5,562.6
|
1,989.9
|
|
Other non-current assets
|
|
|
|
321.3
|
93.0
|
370.7
|
-
|
370.7
|
114.2
|
|
|
|
|
|
5,463.4
|
1,978.7
|
5,521.7
|
411.6
|
5,933.3
|
2,104.1
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
193.8
|
64.4
|
288.6
|
27.4
|
316.0
|
93.6
|
|
Other current assets
|
|
|
|
116.0
|
43.2
|
98.9
|
11.8
|
110.7
|
40.7
|
|
|
|
|
|
309.8
|
107.6
|
387.5
|
39.2
|
426.7
|
134.3
|
|
Total assets
|
|
|
|
5,773.2
|
2,086.3
|
5,909.2
|
450.8
|
6,360.0
|
2,238.4
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
(159.3)
|
(87.8)
|
(314.7)
|
-
|
(314.7)
|
(108.1)
|
|
Other payables
|
|
|
|
(143.2)
|
(103.2)
|
(148.4)
|
(17.0)
|
(165.4)
|
(104.6)
|
|
|
|
|
|
(302.5)
|
(191.0)
|
(463.1)
|
(17.0)
|
(480.1)
|
(212.7)
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
Loans
|
|
|
|
(1,973.1)
|
(706.1)
|
(1,787.1)
(1,787.1)
|
-
-
|
(1,787.1)
(1,787.1)
|
(653.6)
(653.6)
|
|
Participative loans
|
|
|
|
(398.5)
|
(98.5)
|
(387.1)
|
-
|
(387.1)
|
(95.7)
|
|
Other payables, including deferred
tax
|
|
|
|
(665.7)
|
(188.1)
|
(650.7)
|
(3.1)
|
(653.8)
|
(185.2)
|
|
|
|
|
|
(3.037.3)
|
(992.7)
|
(2,824.9)
|
(3.1)
|
(2,828.0)
|
(934.5)
|
|
Total liabilities
|
|
|
|
(3,339.8)
|
(1,183.7)
|
(3,288.0)
|
(20.1)
|
(3,308.1)
|
(1,147.2)
|
|
Net assets
|
|
|
|
2,433.4
|
902.6
|
2,621.2
|
430.7
|
3,051.9
|
1,091.2
|
|
Reverse participative
loans
|
|
|
|
398.5
|
212.4
|
387.1
|
-
|
387.1
|
205.9
|
|
|
|
|
|
2,831.9
|
1,115.0
|
3,008.3
|
430.7
|
3,439.0
|
1,297.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
D. RECONCILIATION OF MOVEMENTS IN
INVESTMENT IN ASSOCIATES
|
2023
|
2022
|
|
|
Value
Retail
|
Italie
Deux
|
Total
|
|
Value Retail
|
Italie Deux
|
Total
|
|
|
£m
|
£m
|
£m
|
|
£m
|
£m
|
£m
|
At 1
January
|
|
1,189.4
|
107.7
|
1,297.1
|
|
1,140.8
|
106.2
|
1,247.0
|
Share of
results of associates
|
|
14.8
|
1.2
|
16.0
|
|
(5.3)
|
(1.8)
|
(7.1)
|
Capital
return
|
|
-
|
-
|
-
|
|
-
|
(2.0)
|
(2.0)
|
Distributions
|
|
(66.3)
|
-
|
(66.3)
|
|
(4.4)
|
(0.6)
|
(5.0)
|
Share of
other comprehensive (loss)/gain of associate
|
a
|
(8.8)
|
-
|
(8.8)
|
|
23.3
|
-
|
23.3
|
Disposals
|
|
-
|
(108.6)
|
(108.6)
|
|
-
|
-
|
-
|
Exchange
and other movements
|
|
(14.1)
|
(0.3)
|
(14.4)
|
|
35.0
|
5.9
|
40.9
|
At 31
December
|
b
|
1,115.0
|
-
|
1,115.0
|
|
1,189.4
|
107.7
|
1,297.1
|
a Relates to the
change in fair value of derivative financial instruments in an
effective hedge relationship within Value Retail.
b Includes
accumulated impairment to the investment in Value Retail of £94.3m
(2022: £94.3m) which was recognised in the year ended 31 December
2020 and is equivalent to the notional goodwill on this
investment.
14. TRADE AND OTHER RECEIVABLES
A: TRADE (TENANT) RECEIVABLES -
AGEING ANALYSIS AND PROVISIONING
|
|
|
2023
|
2022
|
|
|
|
Gross trade receivables
|
Provision
|
Net trade receivables
|
Gross receivables
|
Provision
|
Net trade receivables
|
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
Not yet
due
|
|
|
11.9
|
(1.2)
|
10.7
|
3.2
|
(0.6)
|
2.6
|
0 - 3
months overdue
|
|
|
5.5
|
(1.0)
|
4.5
|
4.0
|
(0.8)
|
3.2
|
3 - 12
months overdue
|
|
|
8.1
|
(2.6)
|
5.5
|
8.1
|
(2.3)
|
5.8
|
More than
12 months overdue
|
|
|
16.1
|
(9.2)
|
6.9
|
25.7
|
(13.9)
|
11.8
|
|
|
|
41.6
|
(14.0)
|
27.6
|
41.0
|
(17.6)
|
23.4
|
Provisions against trade
receivables includes £0.9m (2022: £0.2m) against receivables
whereby the income has been deferred on the balance sheet. On a
proportionally consolidated basis, a further £1.0m (2022: £1.4m)
relates to Share of Property interests. The charge made for making
these provisions is excluded from Adjusted earnings as described in
note 9A.
B: ANALYSIS OF MOVEMENTS IN
PROVISIONS
|
|
2023
|
2022
|
Loss
allowance
|
|
£m
|
£m
|
At 1
January
|
|
17.6
|
27.4
|
Additions
to provisions
|
|
9.4
|
4.0
|
Disposals
|
|
-
|
(1.3)
|
Release
of provisions
|
|
(8.0)
|
(10.7)
|
Utilisation
|
|
(5.4)
|
(2.8)
|
Exchange
|
|
0.4
|
1.0
|
At 31
December
|
|
14.0
|
17.6
|
15. RESTRICTED MONETARY ASSETS
|
|
|
2023
|
2022
|
|
|
|
Current
|
Non-current
|
Current
(restated)
|
Non-current
|
|
|
Footnote
|
£m
|
£m
|
£m
|
£m
|
Cash held
in respect of tenants and co-owners
|
|
a
|
2.2
|
-
|
8.6
|
-
|
Cash held
in escrow
|
|
b
|
-
|
21.4
|
-
|
21.4
|
|
|
|
2.2
|
21.4
|
8.6
|
21.4
|
a Comprises
amounts held to meet future services charge costs and related
expenditure such as marketing expenditure, where local laws or
regulations restrict the use of such cash.
b Comprises
funds placed in escrow in 2020 by Hammerson plc to satisfy
potential obligations under indemnities granted in favour of
Directors and officers to the extent that such obligations
are not already satisfied by the Company or covered by
Directors' and Officers' liability insurance. The funds will remain
in trust until the later of December 2026, or, if there are
outstanding claims at that date, the date on which all claims are
resolved.
16. LOANS
A. LOAN PROFILE
|
|
2023
|
2022
|
|
Footnote
|
£m
|
£m
|
Unsecured
|
|
|
|
£300.0m (2022: £200m) 7.25%
sterling bonds due 2028
|
a
|
292.2
|
199.0
|
€700.0m 1.75% eurobonds due
2027
|
b
|
600.8
|
612.3
|
£211.2m (2022: £300.0m) 6%
sterling bonds due 2026
|
a
|
211.1
|
299.1
|
£338.3m (2022: £350.0m) 3.5%
sterling bonds due 2025
|
a
|
337.3
|
348.3
|
Unamortised facility
fees
|
|
(2.2)
|
(3.1)
|
Senior notes due 2031
|
|
5.0
|
5.1
|
Senior notes due 2028
|
|
11.0
|
11.3
|
Senior notes due 2026
|
|
60.7
|
62.0
|
Senior notes due 2024
|
|
-
|
112.4
|
|
|
1,515.9
|
1,646.4
|
Senior notes due 2024 - shown in
current liabilities
|
|
108.6
|
-
|
|
|
1,624.5
|
1,646.4
|
a On 31 August
2023 the Group issued £100m of bonds (at a discount of £6.7m),
adding to the existing £200m, 7.25% sterling bond issue due 2028.
The newly issued bonds therefore having an effective interest rate
of 9.1%. The proceeds were used to redeem £88.8m of the 6% sterling
bonds due in 2026, and £11.7m of the 3.5% sterling bonds due in
2025 by way of a tender. The tendered bonds were redeemed at a
discount, and after associated costs, the Group recognised a net
gain of £4.3m which is shown in finance income in note 6, this
discount has been excluded from the Group's Adjusted earnings as
shown in note 9A.
b The coupon is
linked to two sustainability performance targets, both of which
will be tested in December 2025 against a 2019 benchmark. If the
targets are not met, a total of 37.5 basis points per annum, or
€2.625m (£2.3m) per target, will be payable in addition to the
final year's coupon. The Group has made certain assumptions which
support not increasing the effective interest rate, as a result of
the possibility of failing to meet the targets. Planned future
initiatives which will assist the Group in achieving the targets
include the introduction of energy efficient projects, the
generation of additional on or offsite energy and driving
compliance with relevant energy performance legislation. The Group
continues to make steady progress against both targets.
B. UNDRAWN COMMITTED
FACILITIES
The Group has the following
revolving credit facilities (RCF), which are all in sterling unless
otherwise indicated, expiring as follows:
|
|
2023
|
2022
|
|
Footnote
|
£m
|
£m
|
2021 RCF expiring 2024
|
|
50.0
|
150.0
|
2021 JPY7.7bn RCF expiring
2026
|
a
|
43.2
|
48.9
|
2021/22 RCF expiring
2026
|
a
|
563.0
|
463.0
|
|
b
|
656.2
|
661.9
|
a On 29 April
2023, the Group exercised its option to extend the maturity of
these RCFs by one year from 2025 to 2026.
b £0.8m (2022:
£2.1m) of RCFs have been utilised (although not drawn) to support
ancillary facilities leaving £655.4m (2022: £659.8m) available to
the Group.
C. MATURITY ANALYSIS OF UNDRAWN
COMMITTED FACILITIES
|
|
2023
|
2022
|
Expiry
|
|
£m
|
£m
|
Within one year
|
|
50.0
|
-
|
Within one to two years
|
|
-
|
50.0
|
Within two to five
years
|
|
606.2
|
611.9
|
|
|
656.2
|
661.9
|
17. FINANCIAL INSTRUMENTS AND RISK
MANAGEMENT
A: FINANCIAL RISK MANAGEMENT
AND STRATEGY
The Group's financial risk
management strategy seeks to set financial limits for treasury
activity to ensure they are in line with the risk appetite of the
Group. The Group's activities expose it to certain financial risks
comprising liquidity risk, market risk (comprising interest rate
and foreign currency risk), credit risk and capital
risk.
The Group's treasury function,
which operates under treasury policies approved by the Board,
maintains internal guidelines for interest cover, gearing,
unencumbered assets and other credit ratios and both the current
and projected financial position against these guidelines is
monitored regularly.
To manage the risks set out above,
the Group uses certain derivative financial instruments to mitigate
potentially adverse effects on the Group's financial performance.
Derivative financial instruments are used to manage exposure to
fluctuations in foreign currency exchange rates and interest rates
but are not employed for speculative purposes.
B. FINANCIAL INSTRUMENTS HELD AT
FAIR VALUE
Definitions
The Group's financial instruments
are categorised by level of fair value hierarchy prescribed by
accounting standards. The different levels are defined as
follows:
· Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities.
· Level 2: inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (actual prices) or indirectly (derived from actual
prices).
· Level 3: inputs for the asset or liability that are not based
on observable market data (from unobservable inputs).
Fair value valuation technique
Financial
instrument
|
Valuation
technique for determining fair value
|
Unsecured bonds
|
Quoted market prices
|
Senior notes
|
Present value of cash flows
discounted using prevailing market interest rates
|
Unsecured bank loans and
overdrafts
|
Present value of cash flows
discounted using prevailing market interest rates
|
Fair value of currency swaps and
interest rate swaps
|
Present value of cash flows
discounted using prevailing market interest rates
|
Other investments including
participative loans to Value Retail
|
Underlying net asset values of the
interests in Villages/centre *
|
* The assets of
the Villages/centre comprise mainly investment properties held at
fair value determined by professional valuers.
Fair value hierarchy analysis
|
|
|
|
|
2023
|
2022
|
|
|
Hierarchy
|
|
|
Carrying amount
|
Fair value
|
Carrying amount
|
Fair value
|
|
|
|
|
|
£m
|
£m
|
£m
|
£m
|
Unsecured bonds
|
|
Level 1
|
|
|
1,441.4
|
1,407.4
|
1,458.7
|
1,249.5
|
Senior notes
|
|
Level 2
|
|
|
185.3
|
180.4
|
190.8
|
180.7
|
Unsecured facility fees
|
|
Level 2
|
|
|
(2.2)
|
-
|
(3.1)
|
-
|
Fair value of currency
swaps
|
|
Level 2
|
|
|
11.4
|
11.4
|
30.6
|
30.6
|
Borrowings
|
|
|
|
|
1,635.9
|
1,599.2
|
1,677.0
|
1,460.8
|
Fair value of interest rate
swaps
|
|
Level 2
|
|
|
0.7
|
0.7
|
2.1
|
2.1
|
Participative loans to Value
Retail
|
|
Level 3
|
|
|
212.4
|
212.4
|
205.9
|
205.9
|
Fair value of other
investments
|
|
Level 3
|
|
|
8.8
|
8.8
|
9.8
|
9.8
|
18. DIVIDENDS
|
|
Cash dividend per share
|
Enhanced scrip
alternative
per share
|
Footnote
|
2023
£m
|
2022
£m
|
Prior period dividends
|
|
|
|
|
|
|
2021 final dividend
|
- Cash
|
0.2p
|
|
a
|
-
|
11.8
|
|
- Enhanced scrip
alternative
|
|
2.0p
|
b
|
-
|
51.4
|
2022 interim dividend
|
- Cash
|
0.2p
|
|
|
-
|
1.4
|
|
- Enhanced scrip
alternative
|
|
2.0p
|
b
|
-
|
75.7
|
2023 interim dividend
|
- Cash
|
0.72p
|
|
a,c
|
35.9
|
-
|
|
|
35.9
|
140.3
|
|
|
|
|
Cash flow analysis:
|
|
|
|
Cash dividend
|
d
|
29.9
|
2.6
|
Withholding tax - 2021 final
dividend
|
a
|
-
|
10.6
|
|
|
29.9
|
13.2
|
|
|
|
|
Total cash dividends per share in respect of the
year
|
|
|
|
0.72p
|
0.2p
|
a Dividends paid
as a PID are subject to withholding tax which is paid approximately
two months after the dividend itself is paid.
b Calculated as
the market value of shares issued to satisfy the enhanced scrip
dividend alternative.
c 2023 interim
dividend paid on 2 October 2023 less £6.0m of withholding tax which
was paid in January 2024. No final 2022 dividend was paid as the
Group had satisfied its 2022 PID obligations.
d Comprises cash
payments after deduction of withholding tax (see note c above),
where applicable.
A final 2023 dividend of 0.78
pence per share payable in cash, was recommended by the Board on 28
February 2024 and, subject to approval by shareholders at the 2024
AGM, is payable on 10 May 2024 to shareholders on the register at
the close of business on 5 April 2024. The dividend will be paid
entirely as a non-PID, and treated as an ordinary company
dividend.
19. NOTES TO THE CASH FLOW STATEMENT
A. ANALYSIS OF ITEMS INCLUDED IN
OPERATING CASH FLOWS
|
Footnote
|
2023
£m
|
2022
£m
|
Net movements in working capital and restricted monetary
assets
|
|
|
|
Movements in working
capital:
|
|
|
|
- Decrease/(increase) in receivables
|
|
8.8
|
(6.0)
|
- Decrease in payables
|
|
(19.8)
|
(17.4)
|
|
|
(11.0)
|
(23.4)
|
Decrease in restricted monetary
assets
|
|
6.3
|
26.0
|
|
|
(4.7)
|
2.6
|
Non-cash items
|
|
|
|
Increase in accrued rents
receivable
|
|
(3.2)
|
(3.5)
|
Increase/(decrease) in loss
allowance provisions
|
a
|
1.0
|
(2.6)
|
Amortisation of lease incentives
and other costs
|
|
0.6
|
1.2
|
Depreciation (note 5)
|
|
3.0
|
4.1
|
Other non-cash items including
share-based payment charge
|
|
1.4
|
-
|
|
|
2.8
|
(0.8)
|
a Comprises movement
in provisions against trade (tenant) receivables and unamortised
tenant incentives.
B. ANALYSIS OF MOVEMENTS IN NET
DEBT
|
|
2023
|
2022
|
|
|
Cash and cash
equivalents
|
Borrowings
|
Net debt
|
Cash and cash
equivalents
|
Borrowings
|
Net debt
|
|
|
£m
|
£m
|
£m
|
£m
|
£m
|
£m
|
At 1 January
|
|
218.8
|
(1,677.0)
|
(1,458.2)
|
315.1
|
(1,878.9)
|
(1,563.8)
|
Cash flow
|
|
254.6
|
(15.1)
|
239.5
|
(99.0)
|
302.4
|
203.4
|
Change in fair value of currency
swaps
|
|
-
|
(1.9)
|
(1.9)
|
-
|
8.4
|
8.4
|
Exchange and other non-cash
movements
|
|
(1.1)
|
58.1
|
57.0
|
2.7
|
(108.9)
|
(106.2)
|
At 31 December
|
|
472.3
|
(1,635.9)
|
(1,163.6)
|
218.8
|
(1,677.0)
|
(1,458.2)
|
Borrowings at 31 December 2023
reflects loans of £1,624.5m (2022: £1,646.4m) and fair value of
currency swaps of £11.4m (2022: £30.6m).
20. CONTINGENT LIABILITIES AND COMMITMENTS
A: CONTINGENT LIABILITIES
|
|
2023
£m
|
2022
£m
|
Reported Group:
|
|
|
|
- guarantees given
|
|
23.1
|
45.3
|
- claims arising in the normal
course of business
|
|
15.6
|
34.0
|
Share of Property interests -
claims arising in the normal course of business
|
|
12.4
|
6.5
|
|
|
51.1
|
85.8
|
In addition, the Group operates in
a number of jurisdictions and is subject to periodic challenges by
local tax authorities on a range of tax matters during the normal
course of business. The tax impact can be uncertain until a
conclusion is reached with the relevant tax authority or through a
legal process. The Group addresses this by closely monitoring these
potential instances, seeking independent advice and maintaining
transparency with the authorities it deals with as and when any
enquiries are made. As a result, the Group has identified a
potential tax exposure attributable to the ongoing applicability of
tax treatments adopted in respect of certain tax structures within
the Group. The range of potential outcomes is a possible outflow of
minimum £nil and maximum £122m (2022: minimum £nil and maximum
£145m). The Directors have not provided for this amount because
they do not believe an outflow is probable.
B: CAPITAL COMMITMENTS ON INVESTMENT
PROPERTIES
|
|
2023
£m
|
2022
£m
|
Reported Group
|
|
0.4
|
0.4
|
Share of Property
interests
|
|
45.5
|
51.4
|
|
|
45.9
|
51.8
|
21. POST BALANCE SHEET EVENTS
On 23 February 2024, the Group
exchanged contracts for the sale of Union Square, Aberdeen for
gross proceeds of £111m, with completion due in March 2024. At the
balance sheet date this asset did not meet the criteria for
reclassification to assets held for sale under IFRS 5 as it was not
being actively marketed and substantive terms had yet to be agreed
such that a sale was not considered highly probable. Consequently
as at 31 December 2023 it was included within investment properties
at its fair value of £121m.
ADDITIONAL INFORMATION - UnAudited
|
Table
|
|
|
Table
|
Summary EPRA performance measures
|
1
|
|
Balance sheet information
|
|
|
|
|
Balance
sheet
|
12
|
Portfolio analysis
|
|
|
Net
debt
|
13
|
Adjusted net rental
income
|
2
|
|
Movement in net debt
|
14
|
Net rental income
|
3
|
|
Total
accounting return
|
15
|
Rental data
|
4
|
|
Financing metrics
|
|
Vacancy
|
5
|
|
Net debt : EBITDA
|
16
|
Lease expiries and
breaks
|
6
|
|
Interest
cover
|
17
|
Top ten tenants
|
7
|
|
Gearing
|
18
|
Cost ratio
|
8
|
|
Loan to
value
|
19
|
Valuation analysis
|
9
|
|
Unencumbered asset ratio
|
20
|
Net initial yield
|
10
|
|
EPRA loan to value
|
21
|
Capital expenditure
|
11
|
|
Key properties
|
22
|
Hammerson is a member of the
European Public Real Estate Association (EPRA) and has
representatives who actively participate in a number of EPRA
committees and initiatives. This includes working with peer group
companies, real estate investors and analysts and the large audit
firms, to improve the transparency, comparability and relevance of
the published results of listed real estate companies in
Europe.
As with other real estate companies,
we have adopted the EPRA Best Practice Recommendations (BPR) and
were again awarded a Gold Award for compliance with the EPRA BPR
for our 2022 Annual Report. Further information on EPRA and the
EPRA BPR can be found on their website www.epra.com. Details of our
key EPRA metrics are shown in Table 1.
SUMMARY EPRA PERFORMANCE MEASURES
Table 1
Performance measure
|
|
Note/
Table
|
2023
|
2022
|
|
|
|
|
|
|
|
Earnings
|
|
9A
|
£102.8m
|
£100.6m
|
|
Earnings per share (EPS)
|
|
10B
|
2.1p
|
2.0p
|
|
Cost ratio (including vacancy
costs)
|
|
Table 8
|
41.2%
|
38.0%
|
|
|
|
|
|
|
|
|
|
|
2023
|
2022
|
|
Net Disposal Value (NDV) per
share
|
|
10C
|
50p
|
56p
|
|
Net Tangible Assets value (NTA) per
share
|
|
10C
|
51p
|
53p
|
|
Net Reinstatement Value (NRV) per
share
|
|
10C
|
59p
|
61p
|
|
Net Initial Yield (NIY)
|
|
Table 10
|
5.9%
|
5.8%
|
|
Topped-up Net Initial
Yield
|
|
Table 10
|
6.3%
|
6.0%
|
|
Vacancy rate
|
|
Table 5
|
5.8%
|
4.8%
|
|
Loan to value
|
|
Table 21
|
48.1%
|
49.2%
|
|
PORTFOLIO ANALYSIS
Where applicable, the information
presented within the 'Development and other' segment only reflects
available data in relation to the investment properties within this
segment.
Adjusted net rental income
Table 2
Proportionally consolidated
|
|
2023
£m
|
2022
£m
|
Base rent
|
|
149.8
|
159.2
|
Turnover rent
|
|
13.6
|
13.7
|
Car park income
|
|
28.1
|
27.9
|
Commercialisation income
|
|
9.8
|
9.5
|
Surrender premiums
|
|
0.4
|
0.8
|
Lease incentive
recognition
|
|
4.3
|
0.9
|
Other rental income
|
|
2.4
|
3.2
|
Gross rental income
|
|
208.4
|
215.2
|
Ground rents payable
|
|
(1.8)
|
(1.3)
|
Inclusive lease costs recovered
through rent
|
|
(6.4)
|
(9.1)
|
Other property outgoings
|
|
(32.7)
|
(30.0)
|
Cost of Sales
|
|
(40.9)
|
(40.4)
|
Adjusted net rental income
|
|
167.5
|
174.8
|
Table 3
Like-for-like net rental income
(NRI) is calculated as the percentage change in NRI for investment
properties owned throughout both the current and prior year, after
taking account of exchange translation movements. Properties
undergoing a significant extension project are excluded from this
calculation during the period of the works.
|
|
|
|
|
|
2023
|
Proportionally consolidated
|
|
Properties
owned throughout 2022/23
£m
|
Change in
like-for-like NRI
%
|
Disposals
£m
|
Developments
and other
£m
|
Total
Adjusted
NRI
£m
|
Change in provision
£m
|
Total
NRI
£m
|
UK
|
|
73.5
|
3.2
|
-
|
(0.6)
|
72.9
|
(0.3)
|
72.6
|
France
|
|
28.1
|
1.8
|
3.4
|
17.9
|
49.4
|
-
|
49.4
|
Ireland
|
|
36.3
|
6.0
|
-
|
-
|
36.3
|
-
|
36.3
|
Flagship destinations
|
|
137.9
|
3.6
|
3.4
|
17.3
|
158.6
|
(0.3)
|
158.3
|
Developments and other
|
|
-
|
n/a
|
-
|
8.9
|
8.9
|
-
|
8.9
|
Managed portfolio
|
|
137.9
|
3.6
|
3.4
|
26.2
|
167.5
|
(0.3)
|
167.2
|
|
|
|
|
|
|
|
2022
|
Proportionally consolidated
|
|
|
Properties
owned throughout 2022/23
£m
|
Exchange
£m
|
Disposals
£m
|
Developments
and other
£m
|
Total
Adjusted
NRI
£m
|
Change in provision
£m
|
Total
NRI
£m
|
UK
|
|
|
71.2
|
-
|
3.7
|
(0.6)
|
74.3
|
1.7
|
76.0
|
France
|
|
|
27.6
|
(1.0)
|
10.6
|
16.6
|
53.8
|
-
|
53.8
|
Ireland
|
|
|
34.3
|
(0.7)
|
-
|
-
|
33.6
|
0.2
|
33.8
|
Flagship destinations
|
|
|
133.1
|
(1.7)
|
14.3
|
16.0
|
161.7
|
1.9
|
163.6
|
Developments and other
|
|
|
-
|
(0.1)
|
0.3
|
12.9
|
13.1
|
0.5
|
13.6
|
Managed portfolio
|
|
|
133.1
|
(1.8)
|
14.6
|
28.9
|
174.8
|
2.4
|
177.2
|
The Managed portfolio value on
which like-for-like growth is based was £2,008m (2022:
£2,244m).
Table 4
|
|
|
|
|
|
2023
|
Proportionally
consolidated
|
Gross rental
income
£m
|
Adjusted net rental
income
£m
|
Vacancy
rate
%
|
Average
rents
passing
£/m2
|
Rents
passing
£m
|
Estimated rental value
£m
|
Rents passing for
reversion
£m
|
Reversion/
(over-rented)
%
|
|
|
|
a
|
b
|
c
|
d
|
e
|
f
|
UK
|
92.8
|
72.9
|
4.9
|
400
|
87.3
|
82.3
|
83.7
|
(1.8)
|
France
|
58.6
|
49.4
|
6.9
|
450
|
53.0
|
61.3
|
54.2
|
13.2
|
Ireland
|
40.0
|
36.3
|
3.8
|
480
|
39.0
|
39.5
|
37.1
|
6.4
|
Flagship destinations
|
191.4
|
158.6
|
5.4
|
430
|
179.3
|
183.1
|
175.0
|
4.6
|
|
|
|
|
|
|
|
|
|
Developments and other
|
17.0
|
8.9
|
13.6
|
190
|
8.5
|
10.0
|
9.2
|
8.9
|
Managed portfolio
|
208.4
|
167.5
|
5.8
|
400
|
187.8
|
193.1
|
184.2
|
4.8
|
|
|
|
|
|
|
2022
|
UK
|
90.5
|
74.3
|
3.6
|
420
|
84.0
|
80.8
|
80.6
|
0.4
|
France
|
61.8
|
53.8
|
4.4
|
430
|
65.9
|
75.5
|
67.0
|
12.5
|
Ireland
|
37.3
|
33.6
|
2.3
|
500
|
38.8
|
39.9
|
36.9
|
8.1
|
Flagship destinations
|
189.6
|
161.7
|
3.7
|
440
|
188.7
|
196.2
|
184.5
|
6.3
|
|
|
|
|
|
|
|
|
|
Developments and other
|
25.6
|
13.1
|
16.0
|
170
|
21.6
|
21.6
|
21.8
|
(1.4)
|
Managed portfolio
|
215.2
|
174.8
|
4.8
|
380
|
210.3
|
217.8
|
206.3
|
5.5
|
a See Table 5
for analysis of vacancy.
b Average rents
passing at the year end before deducting head rents and excluding
rents passing from anchor units, car parks and
commercialisation.
c Rents
passing are the annual rental income receivable at the year end
from an investment property, after any rent-free periods and after
deducting head rents and car parking and commercialisation running
costs totalling £12.6m (2022: £14.2m).
d The estimated
rental value (ERV) at the year end calculated by the Group's
valuers. At 31 December 2023, includes ERV for vacant space of
£9.9m (2022: £9.2m) as per Table 5 and ERV for space undergoing
reconfiguration of £2.6m - UK £2.3m, Ireland £0.3m (2022: £2.6m -
UK £2.2m, Ireland £0.4m). ERVs in the above table are included
within the unobservable inputs to the portfolio valuations as
defined by IFRS 13.
e Rents passing
for reversion is rents passing adjusted for tenant incentives and
inclusive costs, to give a better comparison with ERV which is on a
net effective basis.
f
We have amended the reversion/(over-rented)
figures (and restated 2022 figures) to show a direct comparison
between the valuers' ERV and rents passing for reversion, with both
sets of figures being on a net effective basis. The
reversion/(over-rented) figures therefore show the future change in
the Group's rental income from the settlement of review rents or a
combination of letting:
- units at prevailing ERVs at the
next lease event i.e. break or expiry (see Table 6)
- vacant units (see Table
5)
- units undergoing reconfiguration
(see noted above).
Table 5
|
|
2023
|
2022
|
Proportionally consolidated
|
|
ERV of vacant space
£m
|
Total ERV for vacancy
£m
a
|
Vacancy
rate
%
|
ERV of vacant space
£m
|
Total ERV for vacancy
£m
|
Vacancy
rate
%
|
|
|
|
a
|
|
|
a
|
|
UK
|
|
3.2
|
65.9
|
4.9
|
2.3
|
64.2
|
3.6
|
France
|
|
4.2
|
60.6
|
6.9
|
3.2
|
72.5
|
4.4
|
Ireland
|
|
1.3
|
35.2
|
3.8
|
0.8
|
35.7
|
2.3
|
Flagship destinations
|
|
8.7
|
161.7
|
5.4
|
6.3
|
172.4
|
3.7
|
|
|
|
|
|
|
|
|
Developments and other
|
|
1.2
|
8.5
|
13.6
|
2.9
|
17.9
|
16.0
|
Managed portfolio
|
|
9.9
|
170.2
|
5.8
|
9.2
|
190.3
|
4.8
|
a Total ERV for
vacancy differs from Table 4 due to the exclusion of car park ERV
and head rents payable which distort the vacancy metric.
Lease expiries and breaks
Table 6
|
Rental income based on passing
rents that expire/break in
|
ERV of leases that expire/break
in
|
Weighted average unexpired
lease term
|
Proportionally consolidated
|
Outstanding
£m
|
2024
£m
|
2025
£m
|
2026
£m
|
Total
£m
|
Outstanding
£m
|
2024
£m
|
2025
£m
|
2026
£m
|
Total
£m
|
to break years
|
to expiry years
|
UK
|
2.7
|
14.4
|
8.6
|
10.5
|
36.2
|
3.8
|
12.9
|
7.2
|
8.8
|
32.7
|
5.8
|
7.9
|
France
|
3.6
|
6.2
|
1.7
|
1.6
|
13.1
|
3.4
|
6.2
|
2.0
|
1.8
|
13.4
|
2.6
|
5.9
|
Ireland
|
0.9
|
5.0
|
1.6
|
3.0
|
10.5
|
1.3
|
5.1
|
1.4
|
2.8
|
10.6
|
5.4
|
6.9
|
Flagship destinations
|
7.2
|
25.6
|
11.9
|
15.1
|
59.8
|
8.5
|
24.2
|
10.6
|
13.4
|
56.7
|
4.6
|
6.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Developments and other
|
1.3
|
1.0
|
2.2
|
0.7
|
5.2
|
1.0
|
0.9
|
1.5
|
0.6
|
4.0
|
6.1
|
7.6
|
Managed portfolio
|
8.5
|
26.6
|
14.1
|
15.8
|
65.0
|
9.5
|
25.1
|
12.1
|
14.0
|
60.7
|
4.6
|
7.0
|
The table above compares rents passing (as
per Table 4) on a headline basis for those units with leases
expiring or subject to a tenant break in each year compared to the
ERV of those units determined by the Group's valuers on a net
effective basis (as per Table 4).
Top ten tenants
Table 7
Ranked by passing rent
Proportionally consolidated
|
|
|
Passing rent
£m
|
% of total
passing rent
|
Inditex
|
|
|
9.6
|
5.1
|
H&M
|
|
|
3.8
|
2.0
|
Next
|
|
|
3.4
|
1.8
|
Selfridges
|
|
|
3.2
|
1.7
|
River Island
|
|
|
2.8
|
1.5
|
CK Hutchison Holdings
|
|
|
2.6
|
1.4
|
JD Sports
|
|
|
2.5
|
1.4
|
Boots
|
|
|
2.3
|
1.2
|
Watches of Switzerland
|
|
|
2.2
|
1.2
|
Signet
|
|
|
2.1
|
1.1
|
|
|
|
34.5
|
18.4
|
Table 8
Proportionally consolidated
|
|
|
2023
£m
|
2022
£m
|
Adjusted gross administration
costs
|
|
|
51.5
|
59.8
|
Business transformation
costs
|
|
A
|
13.2
|
5.1
|
Gross administration
costs
|
|
|
64.7
|
64.9
|
Property fee income
|
|
|
(8.4)
|
(11.5)
|
Management fee
receivable
|
|
|
(6.5)
|
(5.5)
|
Property outgoings
|
|
|
39.1
|
39.1
|
Less inclusive lease costs
recovered through rent
|
|
|
(6.4)
|
(9.1)
|
Total operating
costs
|
|
B
|
82.5
|
77.9
|
Less
vacancy costs
|
|
|
(8.6)
|
(12.3)
|
Total operating costs
excluding vacancy costs
|
|
C
|
73.9
|
65.6
|
|
|
|
|
|
Gross
rental income
|
|
|
208.4
|
215.2
|
Ground rents payable
|
|
|
(1.8)
|
(1.3)
|
Less inclusive lease costs
recovered through rent
|
|
|
(6.4)
|
(9.1)
|
Gross rental
income
|
|
D
|
200.2
|
204.8
|
|
|
|
|
|
Cost ratio including vacancy
costs
|
|
B/D
|
41.2%
|
38.0%
|
Cost ratio excluding vacancy
costs
|
|
C/D
|
36.9%
|
32.0%
|
Cost ratio including vacancy
costs (excluding business transformation costs)
|
|
(B-A)/D
|
34.6%
|
35.5%
|
The Group's business model for
developments is to use a combination of in-house resource and
external advisors. The cost of external advisors is capitalised to
the cost of developments. The cost of employees working on
developments is generally expensed, but capitalised subject to
meeting certain criteria related to the degree of time spent on and
the stage of progress of specific projects. Employee costs of £0.1
(2022: £0.8m) were capitalised as development costs and are not
included within 'Gross administration costs'.
Table 9
|
|
|
|
|
|
|
|
2023
|
Proportionally consolidated - including Value
Retail
|
|
|
Properties
at valuation
£m
|
Revaluation losses
in the year
£m
|
Income
return
a
%
|
Capital
return
a,b
%
|
Total
return
a,b
%
|
Initial
yield
%
|
True
equivalent
yield
%
|
Nominal
equivalent
yield
c
%
|
UK
|
|
|
863.1
|
(21.8)
|
8.7
|
(2.4)
|
6.1
|
7.8
|
8.5
|
8.1
|
France
|
|
|
1,003.3
|
(15.2)
|
4.6
|
(4.3)
|
0.1
|
4.4
|
5.3
|
5.1
|
Ireland
|
|
|
629.7
|
(37.5)
|
5.7
|
(5.6)
|
(0.2)
|
5.4
|
6.0
|
5.8
|
Flagship destinations
|
|
|
2,496.1
|
(74.5)
|
6.3
|
(4.0)
|
2.0
|
5.8
|
6.6
|
6.3
|
Developments and other
|
|
|
280.0
|
(44.6)
|
2.7
|
(6.2)
|
(3.6)
|
8.2
|
10.2
|
9.6
|
Managed portfolio
|
|
|
2,776.1
|
(119.1)
|
5.9
|
(4.1)
|
1.6
|
5.9
|
6.7
|
6.4
|
Value Retail
|
|
|
1,885.7
|
(7.7)
|
6.2
|
(0.4)
|
5.8
|
|
|
|
Group portfolio
|
|
|
4,661.8
|
(126.8)
|
6.0
|
(2.6)
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022
|
|
|
|
Properties
at valuation
£m
|
Revaluation losses
in the year
£m
|
Income
return
a
%
|
Capital
return
a,b
%
|
Total
return
a,b
%
|
Initial
yield
%
|
True
equivalent
yield
%
|
Nominal
equivalent
yield
c
%
|
UK
|
|
|
871.0
|
(90.2)
|
7.9
|
(9.4)
|
(2.1)
|
7.7
|
8.4
|
8.0
|
France
|
|
|
1,241.0
|
(57.2)
|
4.8
|
(4.6)
|
-
|
4.4
|
5.2
|
5.0
|
Ireland
|
|
|
676.4
|
(20.1)
|
5.2
|
(3.0)
|
2.1
|
5.3
|
5.7
|
5.5
|
Flagship destinations
|
|
|
2,788.4
|
(167.5)
|
6.0
|
(5.9)
|
(0.2)
|
5.7
|
6.3
|
6.1
|
Developments and other
|
|
|
431.7
|
(53.5)
|
2.3
|
(14.8)
|
(12.8)
|
7.0
|
10.3
|
9.7
|
Managed portfolio
|
|
|
3,220.1
|
(221.0)
|
5.4
|
(7.3)
|
(2.3)
|
5.8
|
6.6
|
6.3
|
Value Retail
|
|
|
1,887.0
|
(60.7)
|
5.3
|
(3.1)
|
2.0
|
|
|
|
Group portfolio
|
|
|
5,107.1
|
(281.7)
|
5.3
|
(5.8)
|
(0.7)
|
|
|
|
a Returns
included 100% of Italik, 75% of which was classified as a trading
property until its sale in March 2023.
b Capital and
Total return figures include the losses on disposal and impairment
charges on derecognised assets (Highcross and O'Parinor)
c Nominal
equivalent yields are included within the unobservable inputs to
the portfolio valuations as defined by IFRS 13. The nominal
equivalent yield for the Reported Group was 5.7% (2022:
5.7%).
Table 10
Investment portfolio
Proportionally consolidated
|
|
|
Note
|
2023
£m
|
2022
£m
|
Wholly owned
|
|
a
|
3B
|
1,396.2
|
1,461.0
|
Share of Property
interests
|
|
|
3B
|
1,379.9
|
1,722.9
|
Trading properties
|
|
|
3B
|
-
|
36.2
|
Net investment portfolio valuation on a proportionally
consolidated basis
|
|
|
3B
|
2,776.1
|
3,220.1
|
Less: Developments
|
|
b
|
|
(192.3)
|
(249.0)
|
Completed investment portfolio
|
|
|
|
2,583.8
|
2,971.1
|
Purchasers' costs
|
|
c
|
|
171.9
|
197.2
|
Grossed up completed investment portfolio
|
A
|
|
|
2,755.7
|
3,168.3
|
|
|
|
|
|
|
Annualised cash passing rental
income
|
|
|
|
182.4
|
207.1
|
Non recoverable costs
|
|
|
|
(15.5)
|
(21.1)
|
Rents payable
|
|
|
|
(4.1)
|
(3.8)
|
Annualised net rent
|
B
|
|
|
162.8
|
182.2
|
Add:
|
|
|
|
|
|
Notional rent expiration of
rent-free periods and other lease incentives
|
|
d
|
|
7.8
|
3.2
|
Future rent on signed
leases
|
|
|
|
1.7
|
3.8
|
Topped-up annualised net rent
|
C
|
|
|
172.3
|
189.2
|
Add back: Non recoverable
costs
|
|
|
|
15.5
|
21.1
|
Passing rents
|
|
|
Table 4
|
187.8
|
210.3
|
|
|
|
|
|
|
Net initial yield
|
B/A
|
|
|
5.9%
|
5.8%
|
'Topped-up' net initial yield
|
C/A
|
|
|
6.3%
|
6.0%
|
a 31 December
2022 figure included 100% of Italik, 75% of which is part of
trading properties. The Group's 100% interest was sold in March
2023.
b Included
within the Developments and other portfolio.
c
Purchasers' costs equate to 6.7% (2022: 6.7%) of the value of the
completed investment portfolio.
d Weighted
average remaining rent-free period is 0.5 years (2022: 0.7
years).
Table 11
|
|
|
2023
|
2022
|
Proportionally consolidated
|
|
Note
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Proportionally
consolidated
£m
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Proportionally
consolidated
£m
|
Developments
|
|
|
3
|
10
|
13
|
5
|
10
|
15
|
Capital expenditure - creating
area
|
|
|
1
|
-
|
1
|
14
|
-
|
14
|
Capital expenditure - no
additional area
|
|
|
12
|
13
|
25
|
3
|
24
|
27
|
Tenant incentives
|
|
|
4
|
4
|
8
|
16
|
1
|
17
|
Total
|
|
3B
|
20
|
27
|
47
|
38
|
35
|
73
|
Conversion from accruals to cash
basis
|
|
|
(1)
|
(3)
|
(4)
|
(2)
|
5
|
3
|
Total on cash basis
|
|
|
19
|
24
|
43
|
36
|
40
|
76
|
BALANCE SHEET INFORMATION
Note 2 to the financial statements
shows the Group's proportionally consolidated income statement. The
Group's proportionally consolidated balance sheet and net debt are
shown in Tables 12 and 13 respectively. As explained in note 3 to the financial
information, the Group's interest in Value Retail is not
proportionally consolidated as it is not under the Group's
management.
Table 12
|
|
2023
|
2022
|
|
|
Note
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Proportionally
consolidated
£m
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Proportionally
consolidated
£m
|
Non-current assets
|
|
|
|
|
|
|
|
Investment properties
|
|
1,396.2
|
1,379.9
|
2,776.1
|
1,461.0
|
1,722.9
|
3,183.9
|
Interests in leasehold
properties
|
|
32.7
|
15.4
|
48.1
|
34.0
|
15.4
|
49.4
|
Right-of-use assets
|
|
3.9
|
-
|
3.9
|
9.5
|
-
|
9.5
|
Plant and equipment
|
|
0.9
|
-
|
0.9
|
1.4
|
-
|
1.4
|
Investment in joint
ventures
|
|
1,193.2
|
(1,193.2)
|
-
|
1,342.4
|
(1,342.4)
|
-
|
Investment in
associates
|
|
1,115.0
|
-
|
1,115.0
|
1,297.1
|
(107.7)
|
1,189.4
|
Other investments
|
|
8.8
|
-
|
8.8
|
9.8
|
-
|
9.8
|
Trade and other
receivables
|
|
1.9
|
1.3
|
3.2
|
3.2
|
5.0
|
8.2
|
Derivative financial
instruments
|
|
-
|
-
|
-
|
7.0
|
6.3
|
13.3
|
Restricted monetary
assets
|
|
21.4
|
-
|
21.4
|
21.4
|
-
|
21.4
|
|
|
3,774.0
|
203.4
|
3,977.4
|
4,186.8
|
299.5
|
4,486.3
|
Current assets
|
|
|
|
|
|
|
|
Trading properties
|
|
-
|
-
|
-
|
36.2
|
-
|
36.2
|
Trade and other
receivables
|
|
74.1
|
22.0
|
96.1
|
85.9
|
43.4
|
129.3
|
Derivative financial
instruments
|
|
5.2
|
1.4
|
6.6
|
0.1
|
-
|
0.1
|
Restricted monetary
assets
|
|
2.2
|
0.2
|
2.4
|
8.6
|
21.0
|
29.6
|
Cash and cash
equivalents
|
|
472.3
|
97.3
|
569.6
|
218.8
|
117.7
|
336.5
|
|
|
553.8
|
120.9
|
674.7
|
349.6
|
182.1
|
531.7
|
Total assets
|
|
4,327.8
|
324.3
|
4,652.1
|
4,536.4
|
481.6
|
5,018.0
|
Current liabilities
|
|
|
|
|
|
|
|
Trade and other
payables
|
|
(129.9)
|
(46.0)
|
(175.9)
|
(168.5)
|
(66.8)
|
(235.3)
|
Loans
|
|
(108.6)
|
(260.0)
|
(368.6)
|
-
|
(126.1)
|
(126.1)
|
Tax
|
|
(0.3)
|
-
|
(0.3)
|
(0.5)
|
(0.3)
|
(0.8)
|
Derivative financial
instruments
|
|
(2.3)
|
-
|
(2.3)
|
(16.1)
|
-
|
(16.1)
|
|
|
(241.1)
|
(306.0)
|
(547.1)
|
(185.1)
|
(193.2)
|
(378.3)
|
Non-current liabilities
|
|
|
|
|
|
|
|
Trade and other
payables
|
|
(55.5)
|
(2.4)
|
(57.9)
|
(56.3)
|
(7.0)
|
(63.3)
|
Obligations under head
leases
|
|
(37.3)
|
(15.8)
|
(53.1)
|
(38.1)
|
(15.8)
|
(53.9)
|
Loans
|
|
(1,515.9)
|
-
|
(1,515.9)
|
(1,646.4)
|
(265.5)
|
(1,911.9)
|
Deferred tax
|
|
(0.4)
|
(0.1)
|
(0.5)
|
(0.4)
|
(0.1)
|
(0.5)
|
Derivative financial
instruments
|
|
(15.0)
|
-
|
(15.0)
|
(23.7)
|
-
|
(23.7)
|
|
|
(1,624.1)
|
(18.3)
|
(1,642.4)
|
(1,764.9)
|
(288.4)
|
(2,053.3)
|
Total liabilities
|
|
(1,865.2)
|
(324.3)
|
(2,189.5)
|
(1,950.0)
|
(481.6)
|
(2,431.6)
|
Net assets
|
|
2,462.6
|
-
|
2,462.6
|
2,586.4
|
-
|
2,586.4
|
EPRA adjustment
|
9B
|
|
|
79.4
|
|
|
47.3
|
EPRA NTA
|
10C
|
|
|
2,542.0
|
|
|
2,633.7
|
EPRA NTA per share
|
10C
|
|
|
51p
|
|
|
53p
|
|
|
|
|
|
|
|
|
| |
Table 13
|
|
|
2023
|
2022
|
Proportionally consolidated
|
|
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Total
£m
|
Reported
Group
£m
|
Share of
Property
interests
£m
|
Total
£m
|
Cash and cash
equivalents
|
|
|
472.3
|
97.3
|
569.6
|
218.8
|
117.7
|
336.5
|
Loans
|
|
|
(1,624.5)
|
(260.0)
|
(1,884.5)
|
(1,646.4)
|
(391.6)
|
(2,038.0)
|
Fair value of currency
swaps
|
|
|
(11.4)
|
-
|
(11.4)
|
(30.6)
|
-
|
(30.6)
|
Net debt
|
|
|
(1,163.6)
|
(162.7)
|
(1,326.3)
|
(1,458.2)
|
(273.9)
|
(1,732.1)
|
Table 14
Proportionally consolidated
|
|
2023
£m
|
2022
£m
|
Opening net
debt
|
|
(1,732.1)
|
(1,798.8)
|
Profit
from operating activities
|
|
117.3
|
129.3
|
Decrease
in receivables and restricted monetary assets
|
|
16.5
|
27.5
|
(Decrease)/increase in payables
|
|
(31.0)
|
8.2
|
Adjustment for non-cash items
|
|
0.7
|
0.7
|
Cash generated from
operations
|
|
103.5
|
165.7
|
Interest
received
|
|
43.6
|
16.8
|
Interest
paid
|
|
(93.5)
|
(73.5)
|
Redemption premiums and fees from early repayment of
debt
|
|
4.3
|
-
|
Debt and
loan facility issuance and extension fees
|
|
(0.6)
|
(2.8)
|
Bond
issue costs
|
|
73.6
|
-
|
Premiums
on hedging activities
|
|
-
|
(3.9)
|
Tax
repaid/(paid)
|
|
(0.4)
|
0.1
|
Cash flows from operating
activities
|
|
130.5
|
102.4
|
|
|
|
|
Investing
activities
|
|
|
|
Capital
expenditure
|
|
(42.9)
|
(76.3)
|
Derecognition of JV cash
|
|
(15.6)
|
-
|
Derecognition of JV secured debt
|
|
125.0
|
-
|
Cash held
within sold or derecognised entities
|
|
(8.4)
|
-
|
Sale of
properties
|
|
216.4
|
191.9
|
Cash flows from investing
activities
|
|
274.5
|
115.6
|
|
|
|
|
Financing
activities
|
|
|
|
Share
issue expenses
|
|
-
|
(0.5)
|
Purchase
of own shares
|
|
-
|
(6.7)
|
Proceeds
from awards of own shares
|
|
0.1
|
0.1
|
Equity
dividends paid
|
|
(30.0)
|
(13.2)
|
Cash flows from financing
activities
|
|
(29.9)
|
(20.3)
|
Exchange
translation movement
|
|
30.7
|
(131.0)
|
Closing net
debt
|
|
(1,326.3)
|
(1,732.1)
|
Table 15
|
|
|
2023
|
|
2022
|
|
|
NTA
£m
|
NTA per share
p
|
NTA
£m
|
NTA per share
p
|
EPRA NTA
at 1 January
|
|
2,633.7
|
52.7
|
2,840.1
|
64.3
|
Scrip
dividend dilution in NTA per share in the year
|
|
-
|
-
|
-
|
(7.5)
|
EPRA NTA
at 1 January rebased to reflect scrip dividends in the
year
|
A
|
2,633.7
|
52.7
|
2,840.1
|
56.8
|
EPRA NTA
at 31 December
|
|
2,542.0
|
50.8
|
2,633.7
|
52.7
|
Movement
in NTA
|
|
(91.7)
|
(1.9)
|
(206.4)
|
(4.1)
|
Cash
dividends in the year
|
|
35.9
|
0.7
|
13.2
|
0.3
|
|
B
|
(55.8)
|
(1.2)
|
(193.2)
|
(3.8)
|
|
|
|
|
|
|
Total accounting return
|
B/A
|
|
(2.1)%
|
|
(6.8)%
|
FINANCING METRICS
Table 16
Proportionally
consolidated
|
|
|
Note
|
2023
£m
|
2022
£m
|
Adjusted operating
profit
|
|
|
|
163.0
|
159.4
|
Amortisation of tenant incentives
and other items within net rental income
|
|
|
|
(3.6)
|
(0.1)
|
Share-based
remuneration
|
|
|
|
3.6
|
3.0
|
Depreciation
|
|
|
|
3.0
|
4.1
|
EBITDA - rolling 12 month basis
|
A
|
|
|
166.0
|
166.4
|
|
|
|
|
|
|
Net debt
|
B
|
|
Table 13
|
1,326.3
|
1,732.1
|
|
|
|
|
|
|
Net debt : EBITDA
|
B/A
|
|
|
8.0x
|
10.4x
|
Table 17
Proportionally
consolidated
|
|
|
Note
|
2023
£m
|
2022
£m
|
Adjusted net rental income
|
|
|
2
|
167.5
|
174.8
|
Less net
rental income in associates: Italie Deux
|
|
|
13B
|
(1.1)
|
(4.4)
|
|
A
|
|
|
166.4
|
170.4
|
|
|
|
|
|
|
Adjusted net finance costs
|
|
|
2
|
45.9
|
54.0
|
Less interest on lease obligations
and pensions
|
|
|
|
(3.3)
|
(2.6)
|
Add capitalised
interest
|
|
|
6
|
-
|
1.2
|
|
B
|
|
|
42.6
|
52.6
|
|
|
|
|
|
|
Interest cover
|
A/B
|
|
|
3.91x
|
3.24x
|
Table 18
Proportionally
consolidated
|
|
|
Note
|
2023
£m
|
2022
£m
|
Net debt
|
|
|
Table 13
|
1,326.3
|
1,732.1
|
Unamortised borrowing costs
--
|
|
|
|
18.4
|
15.9
|
Cash held within investments in
associates: Italie Deux
|
|
|
|
-
|
6.8
|
Net debt for gearing
|
A
|
|
|
1,344.7
|
1,754.8
|
|
|
|
|
|
|
Equity shareholders' funds - Consolidated net tangible
worth
|
B
|
|
|
2,462.6
|
2,586.4
|
|
|
|
|
|
|
Gearing
|
A/B
|
|
|
54.6%
|
67.8%
|
Table 19
Proportionally
consolidated
|
|
|
Note
|
2023
£m
|
2022
£m
|
Net debt - 'Loan'
|
A
|
|
Table 13
|
1,326.3
|
1,732.1
|
|
|
|
|
|
|
Managed property
portfolio
|
B
|
|
3B
|
2,776.1
|
3,220.1
|
Investment in Value
Retail
|
|
|
|
1,115.0
|
1,189.4
|
'Value'
|
C
|
|
|
3,891.1
|
4,409.5
|
|
|
|
|
|
|
Loan to value - Headline
|
A/C
|
|
|
34.1%
|
39.3%
|
|
|
|
|
|
|
Net debt - Value Retail
|
D
|
|
|
729.6
|
674.9
|
Property portfolio - Value Retail
|
E
|
|
3B
|
1,885.7
|
1,887.0
|
|
|
|
|
|
|
Loan to value - Full proportional consolidation of Value
Retail
|
(A+D)/(B+E)
|
|
|
44.1%
|
47.1%
|
Net payables - Managed Portfolio
|
|
|
|
110.9
|
160.3
|
Net payables - Value Retail
|
|
|
|
76.4
|
14.2
|
Net payables - Group
|
F
|
|
|
187.3
|
174.5
|
Loan to value - EPRA
|
(A+D+F)/(B+E)
|
|
|
48.1%
|
49.2%
|
Table 20
Proportionally
consolidated
|
|
|
Note
|
2023
£m
|
2022
£m
|
|
|
|
|
|
|
Managed property
portfolio
|
|
|
3B
|
2,776.1
|
3,220.1
|
Adjustments:
|
|
|
|
|
|
- Properties held in associates: Italie Deux
|
|
|
|
-
|
(102.9)
|
- Encumbered assets
|
|
|
*
|
(487.7)
|
(651.0)
|
Total unencumbered assets
|
A
|
|
|
2,288.4
|
2,466.2
|
|
|
|
|
|
|
Net debt - proportionally
consolidated
|
|
|
Table 13
|
1,326.3
|
1,732.1
|
Adjustments:
|
|
|
|
|
|
- Cash
held within investments in associates: Italie Deux
|
|
|
|
-
|
6.8
|
- Cash
held within investments in encumbered joint ventures
|
|
|
*
|
39.4
|
50.8
|
- Unamortised borrowing costs - Group
|
|
|
|
18.4
|
15.9
|
- Encumbered debt
|
|
|
*
|
(260.2)
|
(392.3)
|
Total unsecured debt
|
B
|
|
|
1,123.9
|
1,413.3
|
|
|
|
|
|
|
Unencumbered asset ratio
|
A/B
|
|
|
2.04x
|
1.74x
|
* At 31
December 2023 encumbered assets and debt relate to Dundrum. At 31
December 2022 they also included Highcross and O'Parinor where the
lenders took control of the secured properties in 2023 at which
point the derecognised the assets and liabilities of these
entities.
Table 21
|
|
|
|
|
2023
|
Proportionally consolidated
|
|
|
Reported
Group
£m
|
Share of
joint ventures
£m
|
Share of associates £m
|
Non-controlling interests
£m
|
Total
£m
|
Include:
|
|
|
|
|
|
|
|
Loans
|
|
|
1,624.5
|
260.0
|
793.9
|
-
|
2,678.4
|
Foreign currency
derivatives
|
|
|
11.4
|
-
|
-
|
-
|
11.4
|
Net payablesa
|
|
|
87.0
|
23.9
|
76.4
|
-
|
187.3
|
Exclude:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
(472.3)
|
(97.3)
|
(64.4)
|
-
|
(634.0)
|
Net Debt
|
|
A
|
1,250.6
|
186.6
|
805.9
|
-
|
2,243.1
|
Include:
|
|
|
|
|
|
|
|
Investment properties at fair
value
|
|
|
1,396.2
|
1,379.9
|
1,885.7
|
-
|
4,661.8
|
Total property value
|
|
B
|
1,396.2
|
1,379.9
|
1,885.7
|
-
|
4,661.8
|
|
|
|
|
|
|
|
|
EPRA LTV
|
|
A/B
|
|
|
|
|
48.1%
|
|
|
|
|
|
2022
|
Proportionally consolidated
|
|
|
Reported
Group
£m
|
Share of
joint ventures
£m
|
Share of associates £m
|
Non-controlling interests
£m
|
Total
£m
|
Include:
|
|
|
|
|
|
|
|
Loans
|
|
|
1,646.4
|
391.6
|
674.9
|
-
|
2,712.9
|
Foreign currency
derivatives
|
|
|
30.6
|
-
|
-
|
-
|
30.6
|
Net payablesa
|
|
|
101.0
|
14.7
|
82.8
|
-
|
198.5
|
Exclude:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
(218.8)
|
(117.7)
|
(93.6)
|
-
|
(430.1)
|
Net Debt
|
|
A
|
1,559.2
|
288.6
|
664.1
|
-
|
2,511.9
|
Include:
|
|
|
|
|
|
|
|
Investment properties at fair
value
|
|
|
1,461.0
|
1,722.8
|
1,887.0
|
-
|
5,070.8
|
Properties held for sale
|
|
|
-
|
36.2
|
-
|
-
|
36.2
|
Total property value
|
|
B
|
1,461.0
|
1,759.0
|
1,887.0
|
-
|
5,107.0
|
|
|
|
|
|
|
|
|
EPRA LTV
|
|
A/B
|
|
|
|
|
49.2%
|
Rows with zero balances have
intentionally been excluded from the EPRA specified format in the
above tables.
a Net payables includes the following balance sheet accounts:
interests in leasehold properties, right-of-use assets, trade and
other receivables (current and non-current), restricted monetary
assets (current and non-current), trade and other payables (current
and non-current), obligations under head leases (current and
non-current), tax and deferred tax (at 50%).
Table 22
Managed
portfolio
|
Location
|
Accounting classification
where not wholly-owned
|
|
Ownership
|
Area, m2
|
No. of tenants
|
Passing rent £m
|
|
|
|
|
|
|
|
|
Flagship destinations
|
|
|
|
|
|
|
|
UK
|
|
|
|
|
|
|
|
Brent Cross
|
London
|
Joint venture
|
|
41%
|
94,000
|
114
|
12.8
|
Bullring
|
Birmingham
|
Joint venture
|
a
|
50%
|
117,000
|
152
|
23.9
|
Cabot Circus
|
Bristol
|
Joint venture
|
b
|
50%
|
106,300
|
109
|
10.8
|
The Oracle
|
Reading
|
Joint venture
|
|
50%
|
72,100
|
98
|
10.4
|
Union Square
|
Aberdeen
|
|
|
100%
|
51,800
|
72
|
15.9
|
Westquay
|
Southampton
|
Joint venture
|
|
50%
|
94,400
|
110
|
13.6
|
France
|
|
|
|
|
|
|
|
Les 3 Fontaines
|
Cergy
|
|
c
|
100%
|
76,600
|
197
|
21.9
|
Les Terrasses du Port
|
Marseille
|
|
|
100%
|
62,800
|
166
|
30.3
|
Ireland
|
|
|
|
|
|
|
|
Dundrum Town Centre
|
Dublin
|
Joint venture
|
|
50%
|
125,600
|
152
|
27.5
|
Ilac Centre
|
Dublin
|
Joint operation
|
|
50%
|
27,900
|
64
|
4.1
|
Pavilions
|
Swords
|
Joint operation
|
|
50%
|
44,400
|
94
|
7.2
|
|
|
|
|
|
|
|
|
Developments and other (key properties)
|
|
|
|
|
|
|
Bristol Broadmead
|
Bristol
|
Joint venture
|
b
|
50%
|
34,800
|
62
|
2.9
|
Dublin Central
|
Dublin
|
|
|
100%
|
n/a
|
n/a
|
n/a
|
Dundrum Phase II
|
Dublin
|
Joint venture
|
|
50%
|
n/a
|
n/a
|
n/a
|
Grand Central
|
Birmingham
|
Joint venture
|
a
|
50%
|
39,000
|
53
|
3.7
|
Eastgate
|
Leeds
|
|
|
100%
|
n/a
|
n/a
|
n/a
|
Martineau Galleries
|
Birmingham
|
|
a
|
100%
|
35,200
|
41
|
2.0
|
Pavilions land
|
Swords
|
|
|
100%
|
n/a
|
n/a
|
n/a
|
The Goodsyard
|
London
|
Joint venture
|
|
50%
|
n/a
|
n/a
|
n/a
|
|
|
|
|
Ownership
|
Area, m2
|
No. of tenants
|
Income
£m
|
Value
Retail
|
|
Associate
|
d
|
|
|
|
|
Bicester Village
|
Bicester
|
|
|
50%
|
28,000
|
159
|
77.9
|
La Roca Village
|
Barcelona
|
|
|
41%
|
25,900
|
146
|
23.5
|
Las Rozas Village
|
Madrid
|
|
|
38%
|
15,600
|
99
|
14.8
|
La Vallée Village
|
Paris
|
|
|
26%
|
21,600
|
109
|
25.5
|
Maasmechelen Village
|
Brussels
|
|
|
27%
|
20,000
|
106
|
6.3
|
Fidenza Village
|
Milan
|
|
|
34%
|
21,100
|
117
|
7.3
|
Wertheim Village
|
Frankfurt
|
|
|
45%
|
20,900
|
116
|
11.0
|
Ingolstadt Village
|
Munich
|
|
|
15%
|
21,000
|
112
|
3.9
|
Kildare Village
|
Dublin
|
|
|
41%
|
21,600
|
117
|
11.7
|
a Collectively
known as the Birmingham Estate.
b Collectively
known as the Bristol Estate.
c Property
includes areas held under co-ownership; figures above reflect the
Group's ownership interests only.
d Passing rent
for Value Retail represents annualised base and turnover rent at
the Group's ownership share.
Responsibility Statement
The Annual Report 2023 which will
be issued in March 2024, contains a responsibility statement in
compliance with DTR 4.1.12 of the Listing Rules which sets out that
as at the date of approval on 28 February 2024, the Directors
confirm to the best of their knowledge:
·
The Group financial statements, which have been
prepared in accordance with UK-adopted international accounting
standards and International Financial Reporting Standards (IFRS)
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in
the European Union, give a true and fair view of the assets,
liabilities, financial position and loss of the Group
·
The Company financial statements, which have been
prepared in accordance with UK Accounting Standards, comprising FRS
101, give a true and fair view of the assets, liabilities and
financial position of the Company
·
The Strategic Report includes a fair review of
the development and performance of the business and the position of
the Group and Company, together with a description of the principal
risks and uncertainties that it faces
The financial statements were
approved by the Directors and signed on their behalf by:
Rita-Rose Gagné
|
Himanshu Raja
|
Director
|
Director
|
28 February 2024
Glossary
Adjusted earnings
|
Reported amounts excluding certain
items in accordance with EPRA guidelines and also certain cash and
non-cash items which the Directors believe are not reflective of
the normal day-to-day operating activities of
the Group.
|
Annual Incentive Plan
(AIP)
|
Annual bonus plan for all employees,
including Executive Directors.
|
Average cost of debt or weighted
average interest rate (WAIR)
|
The cost of finance expressed as a
percentage of the weighted average debt (can be calculated on both
a net and gross debt basis) during the period.
|
Borrowings
|
The aggregate of loans and currency
swaps but excluding the fair value of the interest rate swaps, as
the fair value crystallises over the life of the instruments rather
than at maturity.
|
BREEAM
|
An environmental rating assessed
under the Building Research Establishment Environmental
Assessment Method.
|
Capital return
|
The change in property value during
the period after taking account of capital expenditure, calculated
on a monthly time-weighted and constant currency basis.
|
Compulsory Voluntary Arrangement
(CVA)
|
A legally binding agreement with
creditors to restructure liabilities, including future lease
liabilities.
|
Corporate Sustainability Reporting
Directive (CSRD)
|
A new directive requiring large
companies to disclose ESG information based on the European
Sustainability Reporting Standards (ESRS). The Group is expecting
to report under CSRD in 2025.
|
Dividend cover
|
Adjusted earnings per share divided
by dividend per share.
|
EBITDA
|
Earnings before interest, tax,
depreciation and amortisation.
|
EPRA
|
The European Public Real Estate
Association, a real estate industry body, of which the Company is a
member. This organisation has issued Best Practice Recommendations
with the intention of improving the transparency, comparability and
relevance of the published results of listed real estate companies
in Europe.
|
Equivalent yield (true and
nominal)
|
The capitalisation rate applied to
future cash flows to calculate the gross property value. The cash
flows reflect future rents resulting from lettings, lease renewals
and rent reviews based on current ERVs. The true equivalent yield
(TEY) assumes rents are received quarterly in advance, while the
nominal equivalent yield (NEY) assumes rents are received annually
in arrears. These yields are determined by the Group's external
valuers.
|
ERV
|
The estimated market rental value of
the total lettable space in a property calculated by the Group's
external valuers on a net effective basis.
|
ESG
|
Using environmental, social and
governance factors to evaluate companies and countries on how far
advanced they are with sustainability.
|
F&B
|
Food and beverage.
|
Gearing
|
Net debt expressed as a percentage
of equity shareholders' funds calculated as per the covenant
definition in the Group's unsecured bank loans and facilities and
private placements.
|
Gross property value or Gross asset
value (GAV)
|
Property value before deduction of
purchasers' costs, as provided by the Group's external
valuers.
|
Gross rental income (GRI)
|
Income from leases, car parks and
commercialisation, after amortising lease incentives.
|
Headline rent
|
The annual rental income derived
from a lease, including base and turnover rent but after rent-free
periods.
|
Inclusive lease
|
A lease, often for a short period,
under which the rent includes costs such as service charge, rates
and utilities. Instead, the landlord incurs these costs as part of
the overall commercial arrangement.
|
Income return
|
Income derived from property taken
as a percentage of the property value on a time-weighted and
constant currency basis after taking account of capital
expenditure.
|
Initial yield (or Net initial yield
(NIY))
|
Annual cash rents receivable (net of
head rents and the cost of vacancy, and, in the case of France, net
of an allowance for costs of approximately 5%, primarily for
management fees), as a percentage of gross property value, as
provided by the Group's external valuers. Rents receivable
following the expiry of rent-free periods are not included. Rent
reviews are assumed to have been settled at the contractual review
date at ERV.
|
Interest cover
|
Adjusted net rental income excluding
associates, divided by Adjusted net finance costs before
capitalised interest and interest charges on lease obligations and
pensions.
|
Interest rate or currency swap (or
derivatives)
|
An agreement with another party to
exchange an interest or currency rate obligation for a
pre-determined period.
|
Joint venture and associate
management fees
|
Fees charged to joint ventures and
associates for accounting, secretarial, asset and development
management services.
|
Leasing
|
Comprises new lettings and
renewals.
|
Leasing vs Passing rent
|
A comparison of Headline rent from
new leases and renewals to the Passing rent at the most recent
balance sheet date.
|
Like-for-like (LFL)
GRI/NRI
|
The percentage change in GRI/NRI for
flagship properties owned throughout both current and prior
periods, calculated on a constant currency basis. Properties
undergoing a significant extension project are excluded from this
calculation during the period of the works. For interim reporting
periods properties sold between the balance sheet date and the date
of the announcement are also excluded from this metric.
|
Loan to value (LTV)
|
Net debt expressed as a percentage
of property portfolio value. The Group has three measures of LTV:
Headline, which includes the Group's investment in Value Retail;
Full proportional consolidation of Value Retail (FPC), which
incorporates the Group's share of Value Retail's net debt and
property values; and EPRA, which includes an adjustment for net
payables.
|
Net effective rent (NER)
|
Annual rent from a unit calculated
by taking the total rent payable over the term of the lease to the
earliest termination date and deducting all tenant
incentives.
|
Net rental income (NRI)
|
GRI less net service charge expenses
and cost of sales. Additionally, the change in provision for
amounts not yet recognised in the income statement is also excluded
to calculate Adjusted NRI.
|
NTA (EPRA)
|
EPRA Net Tangible Assets: An EPRA
net asset per share measure calculated as equity shareholders'
funds with adjustments made for the fair values of certain
financial derivatives, deferred tax and any goodwill
balances.
|
Occupancy rate
|
The ERV of the area in a property or
portfolio, excluding developments, which is let, expressed as a
percentage of the total ERV, excluding the ERV for car parks, of
that property or portfolio.
|
Occupational cost ratio
(OCR)
|
The proportion of retailer's sales
compared with the total cost of occupation, including rent, local
taxes (i.e. business rates) and service charge. Calculated
excluding department stores.
|
Over-rented
|
The amount, or percentage, by which
the ERV falls short of rent passing for reversion.
|
Passing rents or rents
passing
|
The annual rental income receivable
from an investment property after rent-free periods, head rents,
car park costs and commercialisation costs.
|
Pre-let
|
A lease signed with a tenant prior
to the completion of a development or other major
project.
|
Principal lease
|
A lease signed with a tenant with a
secure term of greater than one year.
|
Property fee income
|
Amounts recharged to tenants or
co-owners for property management services including, but not
limited to service charge management and rent collection
fees.
|
Property Income Distribution
(PID)
|
A dividend, generally subject to
withholding tax, that a UK REIT is required to pay from its
tax-exempt property rental business and which is taxable for
UK-resident shareholders at their marginal tax rate.
|
Property interests (Share
of)
|
The Group's non-wholly owned
properties which management proportionally consolidate when
reviewing the performance of the business. These exclude Value
Retail which is not proportionally consolidated.
|
Property outgoings
|
The direct operational costs and
expenses incurred by the landlord relating to property ownership
and management. This typically comprises void costs, net service
charge expenses, letting related costs, marketing expenditure,
repairs and maintenance, tenant incentive impairment, bad debt
expense relating to items recognised in the income statement and
other direct irrecoverable property expenses. These costs are
included within the Group's calculation of like-for-like NRI and
the cost ratio.
|
Proportional
consolidation
|
The aggregation of the financial
results of the Reported Group and the Group's Share of Property
interests under management (i.e. excluding Value Retail) as set out
in note 2 to the financial statements.
|
QIAIF
|
Qualifying Investor Alternative
Investment Fund. A regulated tax regime in the Republic of Ireland
which exempts participants from Irish tax on property income and
chargeable gains subject to certain requirements.
|
REIT
|
Real Estate Investment Trust. A tax
regime which in the UK exempts participants from corporation tax
both on UK rental income and gains arising on UK investment
property sales, subject to certain requirements.
|
Rent collection
|
Rent collected as a percentage of
rent due for a particular period after taking account of any rent
concessions granted for the relevant period.
|
Rent
passing for
reversion
|
Passing rent adjusted for tenant
incentives and inclusive costs to be on a net effective basis. This
will increase or decrease due to changes to rents passing at rent
review or the next lease event (i.e. expiry or break), or by
leasing vacant space or space undergoing
reconfiguration.
|
Reported Group
|
The financial results as presented
under IFRS.
|
Reversionary or
under-rented
|
The amount, or percentage, by which
the ERV exceeds the rent passing for reversion.
|
RIDDOR
|
A health and safety reporting
obligation to report deaths, injuries, diseases and 'dangerous
occurrences' at work, including near misses, under the Reporting of
Injuries, Diseases and Dangerous Occurrences Regulations
2013.
|
Scope 1 emissions
|
Direct emissions from owned or
controlled sources.
|
Scope 2 emissions
|
Indirect emissions from the
generation of purchased energy.
|
Scope 3 emissions
|
All indirect emissions (not included
in Scope 2) that occur in the value chain of the reporting company,
including both upstream and downstream emissions.
|
SAICA
|
South African Institute of Chartered
Accountants.
|
SIIC
|
Sociétés d'Investissements
Immobiliers Côtées. A tax regime in France which exempts
participants from the French tax on property income and gains
subject to certain requirements.
|
SONIA
|
Sterling Overnight Index
Average.
|
Task Force on Climate-related
Financial Disclosures (TCFD)
|
An organisation established with the
goal of developing a set of voluntary climate-related financial
risk disclosures to be adopted by companies to inform investors and
the public about the risks they face relating to climate
change.
|
Temporary lease
|
A lease with a period of one year or
less, measured to the earlier of lease expiry or tenant
break.
|
Total accounting return
(TAR)
|
The growth in EPRA NTA per share
plus dividends paid, expressed as a percentage of EPRA NTA per
share at the beginning of the period. The return excludes the
dilution impact from scrip dividends.
|
Total development cost
|
All capital expenditure on a
development or other major project, including capitalised
interest.
|
Total property return (TPR)
(or total return)
|
NRI, excluding the change in
provision for amounts not yet recognised in the income statement,
and capital growth expressed as a percentage of the opening book
value of property adjusted for capital expenditure, calculated on a
monthly time-weighted and constant currency basis.
|
Total shareholder return
(TSR)
|
Dividends and capital growth in a
Company's share price, expressed as a percentage of the share price
at the beginning of the period.
|
Transitional risk
|
Business risk posed by regulatory
and policy changes implemented to tackle climate change.
|
Turnover rent
|
Rental income which is linked to an
occupier's revenues.
|
Vacancy rate
|
The ERV of the area in a property,
or portfolio, excluding developments, which is currently available
for letting, expressed as a percentage of the ERV of that property
or portfolio.
|
WAULB/WAULT
|
Weighted Average Unexpired Lease to
Break/Term.
|
Yield on cost
|
Passing rents expressed as a
percentage of the total development cost of a property.
|
This announcement has also been
released on the SENS system of the Johannesburg Stock Exchange and
on Euronext Dublin.