LEI: 213800RG7JNX7K8F7525
("
Results for the six months ended
The macro environment has remained challenging and as a result, leasing progress in the period has remained slow, albeit we have continued to sign deals at attractive prices and to shift the occupier line up further in favour of life sciences businesses. The recommitment of Thought Machine, our largest occupier, to
STRATEGIC REVIEW
· Strategic Review completed with the Board concluding that a Managed Wind-Down would be in the best interests of shareholders and a process to implement this is now underway
· Realisations may take the form of disposals of single assets, groups of assets or the portfolio as a whole
· Anticipated that the realisation of the portfolio will be concluded over a 12-18 month period, depending on, amongst other things, the prevailing market environment
· Implementation of the Managed Wind-Down will require amendments to the Company's investment objective and investment policy to be approved by shareholders by ordinary resolution at a general meeting to be convened in the near future
· Shareholders should refer to the announcement on
FINANCIAL HIGHLIGHTS
Further leasing progress offset by higher interest costs:
· Contracted rent increased to
· Gross property income up to
· Adjusted earnings stable at
· Adjusted EPS of
Macro headwinds and slower than anticipated leasing drives further outward yield shift:
· Portfolio value of
· Corresponding reduction in EPRA NTA to
Banking facilities:
· Debt fully hedged at 5.5% interest payable until
· No further hedging put in place after
OPERATIONAL HIGHLIGHTS
Pace of leasing activity slower, reflecting challenging occupational market but pricing remains firm:
· 5 new leases commenced in 2025 adding a net
· Post period end one lease completed, to
· Proportion of the Group's assets leased to life sciences occupiers increased to 57.5% of the Group's contracted rent (
· Occupancy stable at 84.0% (
· 100% of properties EPC A-C rated (
Development progress:
· 61,100 sq ft completed at OTP year to date; a further 91,800 sq ft is expected to complete in Q4 2025
· Post period end agreement with the developer at OTP to redesign Buildings 10 and 11 to deliver seven smaller units which command a higher ERV of
Embedded opportunities to drive future rents through development, repurposing and capturing reversion:
· Target portfolio ERV of
o Embedded reversion of 18.6% on let space, equating to
o
o
o
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FINANCIAL HIGHLIGHTS1 |
Six months ended |
Six months ended |
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Gross property income |
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IFRS loss before tax |
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IFRS loss per share |
(8.5)p |
(3.7)p |
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EPRA earnings per share |
1.0p |
1.0p |
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Adjusted earnings per share |
1.0p |
1.0p |
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Dividends per share2 |
n/a |
1.0p |
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As at |
As at |
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Portfolio valuation |
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IFRS net asset value |
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IFRS net asset value per share |
66.6p |
75.1p |
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EPRA net tangible assets |
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EPRA net tangible assets per share |
66.3p |
74.4p |
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Loan to value ratio |
33.8% |
30.4% |
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Total accounting return |
(10.9)% |
(4.4)% |
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OPERATIONAL HIGHLIGHTS - INVESTMENT ASSETS |
As at |
As at |
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Contracted rent roll |
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Estimated rental value |
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Occupancy |
84.0% |
84.4% |
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WAULT to expiry |
5.6 years |
5.3 years |
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WAULT to first break |
3.3 years |
3.1 years |
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Net equivalent yield |
6.1% |
5.6% |
1. The Group presents EPRA Best Practices Recommendations as Alternative Performance Measures ("APMs") to assist stakeholders in assessing performance alongside the Group's statutory results reported under IFRS. APMs are among the key performance indicators used by the Board to assess the Group's performance and are used by research analysts covering the Group. EPRA Best Practices Recommendations have been disclosed to facilitate comparison with the Group's peers through consistent reporting of key real estate specific performance measures. However, these are not intended as a substitute for IFRS measures. Please see the unaudited supplementary notes for further details on APMs.
2. This is the total of dividends paid and declared in respect of the period to
Enquiries:
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Ironstone Asset Management - Investment Adviser |
+44 20 3011 2160 |
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Panmure Liberum - Financial Adviser & Corporate Broker |
+44 20 7886 2500 |
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+44 20 7397 5450 |
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+44 20 3727 1000 |
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Notes to editors
CHAIR'S STATEMENT
Strategic Review update
As announced on
The macro environment has remained challenging and as a result, leasing progress in the period has remained slow, albeit we have continued to sign deals at attractive prices and to shift the occupier line up further in favour of life sciences businesses. The recommitment of Thought Machine, our largest occupier to
Market context
Take up across
On the supply side, 3.8 million sq ft of lab space was under construction across
Operational update
Despite a challenging leasing environment, five new leases commenced in the period, increasing rents by a net
In recent weeks, we are pleased to have signed a new lease at
We have made progress on developments, with the second half of Building 6 and Building 7 at OTP both completing in the period and post period end, and we have come to an agreement with the OTP developer on a redesign of Buildings 10 and 11 which is expected to add
Financial performance
Net rental income increased by 8.8% on a like for like basis to
Conclusion
While the long-term structural drivers which underpin our investment proposition remain intact, the macroeconomic and Company specific challenges which have impacted the Company's performance since IPO have not abated. These factors, combined with the Company's small size and low levels of liquidity, led to the Board's decision to launch the Strategic Review in March. Having thoroughly reviewed all options since then, the Board has concluded that a Managed Wind-Down represents the best opportunity to maximise value for
Claire Boyle | Chair
INVESTMENT ADVISER'S REPORT
Leasing performance
The wider occupational market has remained challenging in the period, with uncertainty further elevated by the US President's "Liberation Day" policies impacting both occupier confidence and the wider life sciences funding environment. As a result, leasing momentum has been slower than expected, but deals are signing at levels at or ahead of ERV, reinforcing confidence in the Group's broader investment proposition of delivering specialist life science space.
During the period to
•
• 42
•
The contracted rent roll for the investment portfolio at the period end therefore increased by a net of
In addition, during the period one lease extension also completed, extending the Group's weighted average lease length:
•
Since the period end, the following leases have completed increasing total contracted rent to
•
•
|
|
Investment property or development property and land |
Total portfolio 30 June 2025 £m |
Total portfolio 22 September 2025 £m |
|
Contracted rent |
Investment |
17.2 |
18.5 |
|
Contracted rent |
Development |
- |
- |
|
Contracted rent - total portfolio |
|
17.2 |
18.5 |
|
Inbuilt reversion in current leases |
Investment |
3.2 |
2.1 |
|
Letting vacant space at |
Investment |
3.8 |
3.6 |
|
Letting developments currently on-site |
Development |
1.9 |
1.9 |
|
Letting future developments |
Development |
1.8 |
2.1 |
|
Target estimated rental value |
|
27.9 |
28.2 |
Potential for strong income growth
The total portfolio ERV was
Since the period end, the ERV has increased by
The Group's occupiers
The proportion of the Group's assets leased to life science occupiers has continued to grow, with 57.5% of the Group's contracted rent attributed to life science occupiers as at
The three largest life science occupiers by contracted rent at the period end were:
•
• Fortescue, a technology and engineering services provider delivering innovative solutions to a range of sectors including green energy, medical engineering and automotive, based at OTP; and
•
Under the Group's investment policy, no occupier should account for more than 30.0% of the higher of gross contracted rents or the valuer's ERV of the portfolio, including developments under forward-funding agreements. The Group remains within this limit, with the largest occupier accounting for 23.4% of gross contracted rents and 21.2% of the ERV at the year end.
|
Occupier |
Asset1 |
Occupier |
Annual |
% of total |
|
|
HS |
Other |
4.0 |
23.4% |
|
|
RSY |
LS |
1.5 |
9.0% |
|
|
OTP |
LS |
1.1 |
6.7% |
|
|
CP |
LS |
1.0 |
5.6% |
|
|
RSY |
Other |
0.9 |
5.2% |
|
|
RSY |
LS |
0.8 |
4.7% |
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OTP |
Other |
0.8 |
4.5% |
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CP |
Other |
0.7 |
4.0% |
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CP |
LS |
0.7 |
3.9% |
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OTP |
LS |
0.6 |
3.5% |
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Subtotal - top ten |
|
|
12.1 |
70.5% |
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Remaining |
|
|
5.1 |
29.5% |
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Total3 |
|
|
17.2 |
100.0% |
1 HS -
2 LS - Life Science occupier; Other - hotel and offices.
3 Investment portfolio only. As at
The portfolio
Well-located assets offering laboratory and office space
The portfolio is in strong locations within
Asset location by valuation
·
·
·
Life science exposure by contracted rent
· Life science 57.5%
· Non-life science 42.5%
Life science occupier area by floor type1
· Office 52.4%
· Labs 47.6%
1 49.6% of portfolio area (including vacant space) currently let to life science occupiers.
During the period there were no changes to the Group's portfolio, which comprised the following assets at
|
|
Valuation |
|
|
WAULT |
Contracted rent |
|
|
|
|||
|
Asset |
£m |
£ per sq ft |
Area sq ft |
Occupancy % |
to break |
to expiry |
£m p.a. |
£ per sq ft |
NIY % |
NEY % |
NRY % |
|
OTP - Investments |
112.4 |
342 |
329,100 |
59.1 |
6.7 |
10.3 |
4.1 |
20.2 |
3.4 |
5.8 |
6.0 |
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Rolling Stock Yard |
79.1 |
1,468 |
53,900 |
100.0 |
2.1 |
5.5 |
4.3 |
79.1 |
5.0 |
5.8 |
6.7 |
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Cambourne |
69.9 |
304 |
230,100 |
83.8 |
3.4 |
5.1 |
4.5 |
22.5 |
6.0 |
7.0 |
7.8 |
|
|
66.4 |
968 |
68,600 |
100.0 |
1.3 |
1.3 |
4.0 |
58.5 |
5.7 |
5.9 |
7.2 |
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The Merrifield |
7.0 |
554 |
12,600 |
100.0 |
1.5 |
6.5 |
0.3 |
23.1 |
3.9 |
5.8 |
6.3 |
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Investment assets |
334.8 |
482 |
694,300 |
84.0 |
3.3 |
5.6 |
17.2 |
31.9 |
4.8 |
6.1 |
6.8 |
|
OTP - Developments1 |
25.8 |
144 |
179,3001 |
- |
- |
- |
- |
- |
- |
- |
- |
|
Development |
25.8 |
144 |
179,300 |
- |
- |
- |
- |
- |
- |
- |
- |
|
Total |
360.6 |
413 |
873,600 |
- |
- |
- |
- |
- |
- |
- |
- |
1 Full build-out area.
OTP development assets comprise buildings under construction and the remaining development land. The 873,600 sq ft shown in the table above is the expected area of these assets once practically complete. At the period end, this related to the remaining development land at OTP plus Buildings 8 and 9, which are expected to reach practical completion in Q4 2025. Unit 6B in Building 6 and Building 7 reached practical completion during the period.
Occupancy at the period end decreased by 0.4 percentage points to 84.0% (
The WAULT to expiry increased by 0.3 years to 5.6 years (
Valuation performance
The portfolio was independently valued by CBRE as at
The table below analyses the movement in valuation during the period:
|
|
Investment £m |
Development £m |
Total £m |
|
Portfolio valuation at |
328.7 |
56.5 |
385.2 |
|
Capital expenditure |
0.7 |
5.2 |
5.9 |
|
Finance costs capitalised |
- |
1.0 |
1.0 |
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Movement in rent incentives |
0.1 |
- |
0.1 |
|
Fair value losses on investment properties |
(25.6) |
(6.0) |
(31.6) |
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Transfer from development to investment |
30.9 |
(30.9) |
- |
|
Portfolio valuation at |
334.8 |
25.8 |
360.6 |
The portfolio valuation at the period end decreased on an absolute basis by
The table below analyses the key drivers of the valuation movement during the first half of 2025 compared to 2024 in further detail:
|
|
|
30 June 2025 |
31 December 2024 |
H1 2025 LFL % |
FY 2024 LFL % |
|
Investment assets |
|
|
|
|
|
|
Valuation |
£m |
334.8 |
328.7 |
(6.7)% |
(4.0)% |
|
ERV |
£m |
24.2 |
22.4 |
0.0% |
8.6% |
|
NEY |
% |
6.1 |
5.6 |
50bps |
30bps |
|
Development assets |
|
|
|
|
|
|
Valuation |
£m |
25.8 |
56.5 |
n/a |
n/a |
|
Total portfolio valuation |
£m |
360.6 |
385.2 |
(6.7)% |
(4.0)% |
Based upon
Asset management update
Cambourne Park Science and Technology Campus ("Cambourne")
The Group acquired Cambourne in 2021, with the intention of repositioning it as a dedicated life science and technology hub. A key step in this evolution is the repurposing of vacant ground floor office space in Building 2020 into four fully fitted laboratories of around 2,200 sq ft each. The project reached practical completion at the end of 2024 and the space is targeting rents of
During the period, 17,200 sq ft of vacant office space at Building 1020 was let to 42T, a product development and innovation consultancy which delivers specialist technical solutions in healthcare & life sciences, industrial and consumer sectors. A five year lease extension to
Occupancy as a result increased by 7.3 percentage points to 83.8% at the period end (
OTP is 20-acre science and technology park strategically located in
The current rent roll of OTP is
Based on designs in place at period end, Buildings 10 and 11 would have added an additional
At
Occupancy at OTP investment assets was 59.1% at the period end (
Following strong demand for more amenities on site from existing and potential occupiers, the Nexus cafe plus additional meeting space is due to complete early Q4 2025.
Rolling Stock Yard
RSY, located in
Xero, exercised their break in the period and vacated the 7th and 8th floors in
The Merrifield Centre
The Merrifield Centre is a fully let building just outside of
Financial review
Financial performance
The Group's financial results are summarised below.
|
|
Six months ended 30 June 2025 £m |
Six months ended 30 June 2024 £m |
Year ended £m |
|
Gross property income |
8.9 |
8.1 |
16.3 |
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Property operating expenses |
(0.8) |
(0.7) |
(1.9) |
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Net rental income |
8.1 |
7.4 |
14.4 |
|
Adjusted administration costs |
(2.1) |
(2.3) |
(4.8) |
|
Adjusted operating profit |
6.0 |
5.1 |
9.6 |
|
Adjusted net finance costs |
(2.6) |
(1.7) |
(3.7) |
|
Tax |
- |
- |
- |
|
Adjusted earnings |
3.4 |
3.4 |
5.9 |
|
Fair value losses on derivatives and deferred premium |
(1.5) |
(1.0) |
(2.5) |
|
Fair value losses on investment properties |
(31.6) |
(15.4) |
(17.4) |
|
IFRS loss after tax |
(29.7) |
(13.0) |
(14.0) |
Total gross property income in the period increased 9.9% to
Property operating expenses are primarily void costs on vacant units and totalled
Administration costs of
The above results in a total cost ratio for the period (including direct vacancy costs) of 32.2% (six months ended
Adjusted net finance costs for the period were higher at
As a REIT, the Group is not subject to corporation tax on its property rental business. The estimated tax charge on its residual business was £nil (six months ended
Fair value losses on derivatives and deferred premiums were
The unrealised loss on revaluation of investment properties was
The IFRS loss after tax for the period was
Dividends
Following the Board's announcement of a Strategic Review on
Net asset value
IFRS NAV was
Debt financing
The Group has a
The debt facility carries a cost of SONIA plus a 2.50% margin. The SONIA reference rate has been capped at 3.00% per annum until
At
At the period end, there was £23.3 million undrawn on the RCF, of which £17.0 million is available to be drawn as at the date of this report, with the balance subject to future asset valuations. Including cash of £4.7 million this provides liquidity of £21.7 million. Committed costs to complete at the date of this report were £27.8 million with a further £2.2 million of uncommitted costs. This is higher than the current facility available to draw, however these total costs will not need to be drawn in full on day one, with the majority of the spend in 2026 when the Group expects to have disposed of at least one asset, as part of the Managed Wind-Down, providing more liquidity. The facility will continue to be drawn as required to meet funding requirements whilst minimising interest costs.
Principal risks and uncertainties
The Group's principal risks are presented on pages 50 to 58 of the 2024 Annual Report and are summarised below.
The Board has regularly reviewed existing and emerging risks during the period, including detailed consideration of the principal risks, which are those most material to the Group. The Board have concluded that whilst the existing principal risks remain the same, there have been changes to the impact and likelihood of some principal risks which have been detailed below:
Business risks
· Significant legal challenge - decreased following completions of Buildings 6B and 7 at OTP and the agreement of the deed of variation post period end with the developer for Buildings 10 and 11.
Financial risks
· Breach of loan covenants or borrowing policy - increased following the breach of the projected ICR covenant at 30 June 2025 and future breaches forecast. A waiver was obtained for the breach at 30 June 2025 and the lenders continue to be supportive of the Group during the Managed Wind-Down process mitigating this increased risk.
Going concern
The Board announced a strategic review on 14 March 2025 to consider the future of the Group and to explore all strategic options available to maximise value for shareholders, which may include a potential sale or a managed wind down. The Board acknowledges the challenges and significant headwinds that the Group has faced since IPO, in common with the wider REIT sector, including higher inflation and elevated interest rates which have driven a fundamental slowdown in leasing activity and negatively impacted investor sentiment. These factors, coupled with the Group's size and low levels of liquidity have led to an under performance of the share price, which has, as a result, traded at a significant discount to net asset value for a prolonged period of time.
The Board monitors the Group's ability to continue as a going concern. Specifically, at quarterly Board meetings, the Board reviews summaries of the Group's liquidity position and compliance with loan covenants, as well as forecast financial performance and cash flows. Throughout the period, the Board met frequently, in conjunction with the Investment Adviser, to review cash resources and the progress of the development and repurposing of the investment property portfolio.
The Group ended the period with £4.7 million of unrestricted cash and £23.3 million of headroom available under its debt facilities, of which £17.0 million is available to draw as at the date of this report with the balance subject to future asset valuations and capital commitments. These valuations are due to increase as the development of OTP continues and completes. There is limited risk that a fall in bank valuations would result in a liquidity issue in the base and sensitised cases, however further asset disposals would mitigate this risk.
As at the reporting date, no further hedging had been put in place given the strategic review was still ongoing at that time (see Chair's statement for further information). As a result, this has led to a breach in the projected interest cover ratio ("ICR") at the 30 June 2025 test which both lenders have provided a waiver for.
Due to the substantial rent free agreed in the
The Group is operating within all other covenants and a sensitivity analysis has been performed to identify the decrease in valuations that would result in a breach of the LTV. For the HSBC and Bank of Ireland facility, current bank valuations would need to fall by 27.7% as at the period end covenant test date, before this covenant would be breached. As at 22September 2025, 99.4% of rents invoiced in June 2025 in relation to the quarter to 29 September 2025 were received.
The Board has looked at its forecast cash flow for at least the next 12 months and under the base case scenario, as expected, it can meet its covenants and liquidity requirements within the current facility headroom. The Directors have reviewed a number of scenarios which included plausible downside sensitivities in relation to rental cash collection, discretionary capital expenditure, delayed disposals with reduced proceeds, and minimum dividend distributions under the REIT rules. The sensitivity analysis also includes, for example, considering the timing of cash flows on committed capital expenditure at OTP and assumptions over the commencement and speed of completion of the work, which impacts the timing of cash outflows being payable, which is currently not certain.
In combination with this, the Directors note the debt facilities are due for maturity in June 2026, and will consider the prospects of any refinancing necessary, and any resultant liquidity constraints, as part of the proposed Managed Wind-Down where individual and collective asset sales are under consideration. The facility may be refinanced in full, in part at a reduced amount, or repaid in full. The capital expenditure relating to the development of OTP is the largest contributor to using up headroom in the facility across the going concern period. Whilst the timing of these costs is not certain, as noted above, the Group has currently forecast that headroom will remain available up to the refinancing date, based on the Directors' best estimate of the build schedule as of the date of approving the Financial Statements and proposed disposal schedule (in the absence of a full portfolio sale). Should it not, there are further mitigating actions management can take to generate additional liquidity which, whilst not entirely within the Board's control as there is a reliance on the market and the ability to dispose of assets as part of the proposed Managed Wind-Down.
On 19 September 2025, the Board announced the conclusion of the strategic review. During the process, the Company received a significant amount of interest from a range of sources, with certain parties being granted access to additional due diligence materials and meetings with the Investment Adviser. However, the Board have concluded that the offers received for a full portfolio sale do not provide the optimal return to shareholders and therefore have concluded to proceed with a proposed Managed Wind-Down of the portfolio which is most likely to achieve best value for shareholders. The conclusion of the strategic review is considered a non-adjusting post balance sheet event which is detailed further in note 23 of the financial statements below and therefore has no impact on the going concern basis as at 30 June 2025.
Under the base case, the Directors have a reasonable expectation that the Group and the Company would have adequate resources to continue in business for a period of at least 12 months from the date of approval of the Financial Statements, given facility headroom and liquidity remains available. However, the Directors believe their remains material uncertainty that may cast significant doubt over the Group's ability to continue to be in operation for at least the next 12 months, even at the base case.
Alternative Investment Fund Manager ("AIFM")
Investment Adviser
Ironstone
Ironstone
Investment Adviser
22 September 2025
DIRECTORS' RESPONSIBILITIES STATEMENT
The Directors confirm to the best of our knowledge:
· the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting and gives a true and fair view of the assets, liabilities, financial position, and profit of the Group, as required by DTR 4.2.4R;
· the Interim Report includes a fair review of the information required by DTR 4.2.7R (indication of the important events during the first six months and description of principal risks and uncertainties for the remaining six months of the financial year); and
· the Interim Report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).
The Directors of
By order of the Board
Chair
22 September 2025
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (UNAUDITED)
FOR THE SIX MONTHS ENDED 30 JUNE 2025
|
|
|
Six months |
Six months |
Year |
|
|
|
ended |
ended |
ended |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2025 |
2024 |
2024 |
|
Continuing operations |
Notes |
£'000 |
£'000 |
£'000 |
|
Gross property income |
3 |
8,881 |
8,067 |
16,355 |
|
Service charge income |
3 |
1,886 |
1,970 |
3,953 |
|
Revenue |
|
10,767 |
10,037 |
20,308 |
|
Recoverable service charges |
4 |
(1,886) |
(1,970) |
(3,953) |
|
Property operating expenses |
4 |
(772) |
(724) |
(1,931) |
|
Gross profit |
|
8,109 |
7,343 |
14,424 |
|
Administration expenses |
4 |
(2,145) |
(2,276) |
(4,838) |
|
Operating profit before losses on investment properties |
|
5,964 |
5,067 |
9,586 |
|
Fair value losses on investment properties |
11 |
(31,600) |
(15,412) |
(17,376) |
|
Operating loss |
|
(25,636) |
(10,345) |
(7,790) |
|
Finance income |
5 |
1,297 |
2,089 |
4,203 |
|
Finance expense |
6 |
(5,373) |
(4,759) |
(10,390) |
|
Loss before tax |
|
(29,712) |
(13,015) |
(13,977) |
|
Taxation |
7 |
- |
- |
- |
|
Loss after tax for the period and total comprehensive income attributable to equity holders |
|
(29,712) |
(13,015) |
(13,977) |
|
Loss per share (basic and diluted) (pence) |
10 |
(8.5) |
(3.7) |
(4.0) |
All items in the above statement derive from continuing operations. No operations were discontinued during the period.
There is no other comprehensive income and as such a separate statement is not present. The loss after tax is therefore also the total comprehensive loss.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
AS AT 30 JUNE 2025
|
|
|
30 June |
31 December |
|
|
|
2025 |
2024 |
|
|
Notes |
£'000 |
£'000 |
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Investment property |
11 |
360,575 |
385,220 |
|
Interest rate derivatives |
14 |
- |
- |
|
Trade and other receivables |
12 |
3,889 |
3,826 |
|
|
|
364,464 |
389,046 |
|
Current assets |
|
|
|
|
Trade and other receivables |
12 |
4,819 |
4,196 |
|
Cash and cash equivalents |
13 |
4,719 |
5,567 |
|
Interest rate derivatives |
14 |
944 |
2,378 |
|
|
|
10,482 |
12,141 |
|
Total assets |
|
374,946 |
401,187 |
|
Liabilities |
|
|
|
|
Non-current liabilities |
|
|
|
|
Interest-bearing loans and borrowings |
15 |
- |
(122,238) |
|
Other payables and accrued expenses |
16 |
(3,889) |
(3,826) |
|
|
|
(3,889) |
(126,064) |
|
Current liabilities |
|
|
|
|
Interest-bearing loans and borrowings |
15 |
(126,402) |
- |
|
Other payables and accrued expenses |
16 |
(11,599) |
(12,355) |
|
|
|
(138,001) |
(12,355) |
|
Total liabilities |
|
(141,890) |
(138,419) |
|
Net assets |
|
233,056 |
262,768 |
|
Equity |
|
|
|
|
Share capital |
17 |
3,500 |
3,500 |
|
Capital reduction reserve |
|
314,823 |
314,823 |
|
Retained loss |
|
(85,267) |
(55,555) |
|
Total equity |
|
233,056 |
262,768 |
|
Number of shares in issue (thousands) |
|
350,000 |
350,000 |
|
Net asset value per share (basic and diluted) (pence) |
18 |
66.6 |
75.1 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
FOR THE SIX MONTHS ENDED 30 JUNE 2025
|
|
|
|
Capital |
|
|
|
|
|
Share |
reduction |
Retained |
|
|
|
|
capital |
reserve |
loss |
Total |
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 1 January 2025 |
|
3,500 |
314,823 |
(55,555) |
262,768 |
|
Loss for the period and total comprehensive loss |
|
- |
- |
(29,712) |
(29,712) |
|
Dividends paid |
9 |
- |
- |
- |
- |
|
Balance at 30 June 2025 |
|
3,500 |
314,823 |
(85,267) |
233,056 |
|
|
|
|
Capital |
|
|
|
|
|
Share |
reduction |
Retained |
|
|
|
|
capital |
reserve |
loss |
Total |
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 1 January 2024 |
|
3,500 |
321,823 |
(41,578) |
283,745 |
|
Loss for the period and total comprehensive loss |
|
- |
- |
(13,015) |
(13,015) |
|
Dividends paid |
9 |
- |
(3,500) |
- |
(3,500) |
|
Balance at 30 June 2024 |
|
3,500 |
318,323 |
(54,593) |
267,230 |
|
|
|
|
Capital |
|
|
|
|
|
Share |
reduction |
Retained |
|
|
|
|
capital |
reserve |
loss |
Total |
|
|
Notes |
£'000 |
£'000 |
£'000 |
£'000 |
|
Balance at 1 July 2024 |
|
3,500 |
318,323 |
(54,593) |
267,230 |
|
Loss for the period and total comprehensive loss |
|
- |
- |
(962) |
(962) |
|
Dividends paid |
9 |
- |
(3,500) |
- |
(3,500) |
|
Balance at 31 December 2024 |
|
3,500 |
314,823 |
(55,555) |
262,768 |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED 30 JUNE 2025
|
|
|
Six months |
Six months |
Year |
|
|
|
ended |
ended |
Ended |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2025 |
2024 |
2024 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
Cash flows from operating activities |
|
|
|
|
|
Operating loss |
|
(25,636) |
(10,345) |
(7,790) |
|
Adjustments to reconcile profit for the period to net cash flows: |
|
|
|
|
|
Changes in fair value of investment properties |
11 |
31,600 |
15,412 |
17,376 |
|
Operating cash flows before movements in working capital |
|
5,964 |
5,067 |
9,586 |
|
Decrease/(increase) in other receivables and prepayments |
|
25 |
4,499 |
3,911 |
|
(Decrease)/increase in other payables and accrued expenses |
|
(691) |
(980) |
(576) |
|
Net cash flow generated from operating activities |
|
5,298 |
8,586 |
12,921 |
|
Cash flows from investing activities |
|
|
|
|
|
Acquisition of investment properties |
|
- |
(358) |
(1,127) |
|
Capital expenditure |
|
(5,806) |
(14,689) |
(19,280) |
|
Interest received |
|
1,688 |
2,028 |
4,057 |
|
Net cash used in investing activities |
|
(4,118) |
(13,019) |
(16,350) |
|
Cash flows from financing activities |
|
|
|
|
|
Bank loans drawn down |
15 |
4,000 |
10,000 |
14,000 |
|
Loan interest and other finance expenses paid |
|
(6,028) |
(5,897) |
(12,345) |
|
Dividends paid in the period |
|
- |
(3,500) |
(7,000) |
|
Net cash flow (used in)/generated from financing activities |
|
(2,028) |
603 |
(5,345) |
|
Net decrease in cash and cash equivalents |
|
(848) |
(3,830) |
(8,774) |
|
Cash and cash equivalents at start of the period |
|
5,567 |
14,341 |
14,341 |
|
Cash and cash equivalents at end of the period |
13 |
4,719 |
10,511 |
5,567 |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE SIX MONTHS ENDED 30 JUNE 2025
1. General information
The Group's interim condensed consolidated unaudited financial statements for the six months ended 30 June 2025 comprise the results of the Company and its subsidiaries (together constituting the "Group") and were approved by the Board and authorised for issue on 22 September 2025.
2. Basis of preparation
These interim condensed consolidated unaudited financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and
These interim condensed consolidated unaudited financial statements should be read in conjunction with the Company's last financial statements for the year ended 31 December 2024. These interim condensed consolidated unaudited financial statements do not include all of the information required for a complete set of annual financial statements prepared in accordance with IFRS; however, they have been prepared using the accounting policies adopted in the audited financial statements for the year ended 31 December 2024 and selected explanatory notes have been included to explain events and transactions that are significant in understanding changes in the Company's financial position and performance since the last financial statements.
The financial statements have been prepared under the historical cost convention, except for the revaluation of investment properties and financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
IAS 34 requires that comparative figures are presented for the comparable interim period in the preceding year, therefore the six-month period ended 30 June 2024 has been presented.
The financial information contained within these interim results does not constitute full statutory accounts as defined in section 434 of the Companies Act 2006.
The financial statements for the six months ended 30 June 2025 and for the six-months ended 30 June 2024 have been neither audited nor reviewed by the Company's Auditor. The information for the year ended 31 December 2024 has been extracted from the latest published Annual Report and Financial Statements, which has been filed with the Registrar of Companies. The Auditor reported on those accounts; its report was unqualified and did not contain a statement under sections 498(2) or (3) of the Companies Act 2006.
2.1 Going concern
The Board announced a strategic review on 14 March 2025 to consider the future of the Group and to explore all strategic options available to maximise value for shareholders, which may include a potential sale or a managed wind down. The Board acknowledges the challenges and significant headwinds that the Group has faced since IPO, in common with the wider REIT sector, including higher inflation and elevated interest rates which have driven a fundamental slowdown in leasing activity and negatively impacted investor sentiment. These factors, coupled with the Group's size and low levels of liquidity have led to an under performance of the share price, which has, as a result, traded at a significant discount to net asset value for a prolonged period of time.
The Board monitors the Group's ability to continue as a going concern. Specifically, at quarterly Board meetings, the Board reviews summaries of the Group's liquidity position and compliance with loan covenants, as well as forecast financial performance and cash flows. Throughout the period, the Board met frequently, in conjunction with the Investment Adviser, to review cash resources and the progress of the development and repurposing of the investment property portfolio.
The Group ended the period with £4.7 million of unrestricted cash and £23.3 million of headroom available under its debt facilities, of which £17.0 million is available to draw as at the reporting date with the balance subject to future asset valuations and capital commitments. These valuations are due to increase as the development of OTP continues and completes. There is limited risk that a fall in bank valuations would result in a liquidity issue in the base and sensitised cases, however further asset disposals would mitigate this risk.
As at the reporting date, no further hedging had been put in place given the strategic review was still ongoing at that time (see Chair's statement for further information). As a result, this has led to a breach in the projected interest cover ratio ("ICR") at the 30 June 2025 test which both lenders have provided a waiver for.
Due to the substantial rent free agreed in the
The Group is operating within all other covenants and a sensitivity analysis has been performed to identify the decrease in valuations that would result in a breach of the LTV. For the HSBC and Bank of Ireland facility, current bank valuations would need to fall by 27.7% as at the period end covenant test date, before this covenant would be breached. As at 22 September 2025, 99.4% of rents invoiced in June 2025 in relation to the quarter to 29 September 2025 were received.
The Board has looked at its forecast cash flow for at least the next 12 months and under the base case scenario, as expected, it can meet its covenants and liquidity requirements within the current facility headroom. The Directors have reviewed a number of scenarios which included plausible downside sensitivities in relation to rental cash collection, discretionary capital expenditure, delayed disposals with reduced proceeds, and minimum dividend distributions under the REIT rules. The sensitivity analysis also includes, for example, considering the timing of cash flows on committed capital expenditure at OTP and assumptions over the commencement and speed of completion of the work, which impacts the timing of cash outflows being payable, which is currently not certain.
In combination with this, the Directors note the debt facilities are due for maturity in June 2026, and will consider the prospects of any refinancing necessary, and any resultant liquidity constraints, as part of the proposed Managed Wind-Down where individual and collective asset sales are under consideration. The facility may be refinanced in full, in part at a reduced amount, or repaid in full. The capital expenditure relating to the development of OTP is the largest contributor to using up headroom in the facility across the going concern period. Whilst the timing of these costs is not certain as noted above, the Group has currently forecast that headroom will remain available up to the refinancing date, based on the Directors' best estimate of the build schedule as of the date of approving the Financial Statements and proposed disposal schedule (in the absence of a full portfolio sale). Should it not, there are further mitigating actions management can take to generate additional liquidity which, whilst not entirely within the Board's control as there is a reliance on the market, and the ability to dispose of assets as part of the proposed Managed Wind-Down.
On 19 September 2025, the Board announced the conclusion of the strategic review. During the process, the Company received a significant amount of interest from a range of sources, with certain parties being granted access to additional due diligence materials and meetings with the Investment Adviser. However, the Board have concluded that the offers received for a full portfolio sale do not provide the optimal return to shareholders and therefore have concluded to proceed with a proposed Managed Wind-Down of the portfolio which is most likely to achieve best value for shareholders. The conclusion of the strategic review is considered a non-adjusting post balance sheet event which is detailed further in note 23 of the financial statements below and therefore has no impact on the going concern basis as at 30 June 2025.
Under the base case, the Directors have a reasonable expectation that the Group and the Company would have adequate resources to continue in business for a period of at least 12 months from the date of approval of the Financial Statements, given facility headroom and liquidity remains available. However, the Directors believe their remains material uncertainty that may cast significant doubt over the Group's ability to continue to be in operation for at least the next 12 months, even at the base case.
2.2 New standards and interpretations effective in the current period
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 31 December 2024, except for the adoption of new standards effective as of 1 January 2025. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
2.3 New and revised accounting standards not yet effective
There are a number of new standards and amendments to existing standards which have been published and are mandatory for the Group's accounting periods beginning on or after 1 January 2025 or later. The Group is not adopting these standards early. The following are the most relevant to the Group:
• Amendments to IAS 21 Lack of Exchangeability to assist entities in determining whether a currency is exchangeable into another currency, and the spot exchange rate to use when it is not.
• IFRS 18 Presentation and Disclosures in Financial Statements. This is the new standard on presentation and disclosure in financial statements, which replaces IAS 1, with a focus on updates to the statement of profit or loss.
• IFRS 19 Subsidiaries without Public Accountability: Disclosures. This reduces disclosure requirements that an eligible subsidiary entity is permitted to apply instead of the disclosure requirements in other IFRS Accounting Standards.
• Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. The amendments provide clarity on the date of recognition and derecognition of certain financial instruments and amends/updates the disclosure required for some financial instruments.
The Directors have yet to assess the full outcome of these new standards, amendments and interpretations; however, with the exception of IFRS 18, these other new standards, amendments and interpretations are not expected to have a significant impact on the Group's financial statements.
2.4 Significant accounting judgements and estimates
The preparation of these Financial Statements in accordance with IFRS requires the Directors of the Company to make judgements, estimates and assumptions that affect the reported amounts recognised in the Financial Statements. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability in the future.
Judgements
In the course of preparing the Financial Statements, the Investment Adviser has made the following judgements in the process of applying the Group's accounting policies which have had a significant effect on the amounts recognised in the Financial Statements.
Business combinations
The Group acquires subsidiaries that own investment properties. At the time of acquisition, the Group considers whether each acquisition represents the acquisition of a business or the acquisition of an asset. Management considers the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business.
The Group accounts for an acquisition as a business combination where an integrated set of activities is acquired in addition to the property. Where such acquisitions are not judged to be the acquisition of a business, they are not treated as business combinations. Rather, the cost to acquire the corporate entity is allocated between the identifiable assets and liabilities of the entity based upon their relative fair values at the acquisition date. Accordingly, no goodwill or additional deferred tax arises.
No corporate acquisitions were made during the period and therefore no business combinations were considered in this financial period.
Estimates
In the process of applying the Group's accounting policies, the Investment Adviser has made the following estimates which have the most significant risk of material change to the carrying value of assets recognised in the consolidated Financial Statements:
Valuation of property
The valuations of the Group's investment property are at fair value as determined by the external valuer on the basis of market value in accordance with the internationally accepted RICS Valuation - Professional Standards January 2022 (incorporating the International Valuation Standards) and in accordance with IFRS 13. The key estimates made by the valuer are the ERV and equivalent yields of each investment property.
On-site developments are valued by applying the 'residual method' of valuation, which is the investment method described above with a deduction for all costs necessary to complete the development, with a further allowance for remaining risk and developers' profit. Properties and land held for future development are valued using the highest and best use method, by adopting the residual method allowing for all associated risks, the investment method, or a value per acre methodology.
See notes 11 and 19 for further details.
2.5 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these Financial Statements are stated in the notes to the Financial Statements.
a) Basis of consolidation
The Company does not meet the definition of an investment entity and therefore does not qualify for the consolidation exemption under IFRS 10. The interim condensed consolidated unaudited Financial Statements comprise the Financial Statements of the Group and its subsidiaries as at 30 June 2025. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtained control, and will continue to be consolidated until the date that such control ceases. An investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. In preparing these Financial Statements, intra-group balances, transactions and unrealised gains or losses have been eliminated in full. All non-dormant subsidiaries have the same year end as the Company. Uniform accounting policies are adopted in the Financial Statements for like transactions and events in similar circumstances.
b) Functional and presentation currency
The overall objective of the Group is to generate returns in Pound Sterling and the Group's performance is evaluated in Pound Sterling. Therefore, the Directors consider Pound Sterling as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions and have therefore adopted it as the functional and presentation currency.
All values are rounded to the nearest thousand pounds (£'000), except when otherwise stated.
c) Segmental reporting
The Directors are of the opinion that the Group is engaged in a single segment of business, being the investment and management of premises relating to the life science sector.
d) Derivative financial instruments
Derivative financial instruments, comprising interest rate derivatives for mitigating interest rate risks, are initially recognised at fair value and are subsequently measured at fair value, being the estimated amount that the Group would receive or pay to terminate the agreement at the period end date, taking into account current interest rate expectations and the current credit rating of the Group and its counterparties. Premiums payable under such arrangements are initially capitalised into the statement of financial position.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs significant to the fair value measurement as a whole. Changes in fair value of interest rate derivatives are recognised within finance expenses in profit or loss in the period in which they occur.
e) Exceptional costs
Items are classified as exceptional by virtue of their size, nature or incidence, where their inclusion would otherwise distort the underlying recurring earnings of the Group. Examples include, but are not limited to, business transformation costs, early redemption costs of financial instruments and tax charges specific to disposals. Exceptional costs are excluded from the Group's adjusted earnings.
3. Revenue
|
|
Six months |
Six months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2024 |
|
|
£'000 |
£'000 |
£'000 |
|
Rental income |
8,026 |
7,762 |
15,652 |
|
Other income |
553 |
217 |
506 |
|
Rental income straight-line adjustment |
219 |
7 |
33 |
|
Insurance recharged |
83 |
81 |
164 |
|
Gross property income |
8,881 |
8,067 |
16,355 |
|
Service charge income |
1,886 |
1,970 |
3,953 |
|
Total |
10,767 |
10,037 |
20,308 |
4. Property operating and administration expenses
|
|
Six months |
Six months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2024 |
|
|
£'000 |
£'000 |
£'000 |
|
Recoverable service charges |
1,886 |
1,970 |
3,953 |
|
Premises expenses |
351 |
277 |
662 |
|
Rates |
181 |
109 |
378 |
|
Service charge void costs |
137 |
227 |
665 |
|
Insurance expense |
102 |
109 |
198 |
|
Bad debt charge |
1 |
2 |
28 |
|
Property operating expenses |
772 |
724 |
1,931 |
|
Investment Adviser fees |
1,120 |
1,513 |
2,979 |
|
Other administration expenses |
801 |
573 |
1,473 |
|
Audit fees |
124 |
92 |
185 |
|
Directors' remuneration |
100 |
98 |
201 |
|
Administration expenses |
2,145 |
2,276 |
4,838 |
|
Total |
4,803 |
4,970 |
10,722 |
5. Finance income
|
|
Six months |
Six months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2024 |
|
|
£'000 |
£'000 |
£'000 |
|
Interest receivable from interest rate derivatives |
1,253 |
2,003 |
3,858 |
|
Income from cash and short-term deposits |
40 |
78 |
150 |
|
Other interest received |
4 |
- |
- |
|
Change in fair value of deferred consideration on interest rate derivatives |
- |
8 |
195 |
|
Total |
1,297 |
2,089 |
4,203 |
6. Finance expense
|
|
Six months |
Six months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2024 |
|
|
£'000 |
£'000 |
£'000 |
|
Loan interest |
4,430 |
4,535 |
9,221 |
|
Change in fair value of interest rate derivatives and deferred consideration |
1,506 |
975 |
2,649 |
|
Loan expenses |
234 |
155 |
286 |
|
Loan arrangement fees amortised |
164 |
153 |
320 |
|
Gross interest costs |
6,334 |
5,818 |
12,476 |
|
Capitalisation of finance costs |
(961) |
(1,059) |
(2,086) |
|
Total |
5,373 |
4,759 |
10,390 |
7. Taxation
Corporation tax has arisen as follows:
|
|
Six months |
Six months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2024 |
|
|
£'000 |
£'000 |
£'000 |
|
Corporation tax on residual income |
- |
- |
- |
|
Total |
- |
- |
- |
Reconciliation of tax charge to loss before tax:
|
|
Six months |
Six months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2024 |
|
|
£'000 |
£'000 |
£'000 |
|
Loss before tax |
(29,712) |
(13,015) |
(13,977) |
|
Corporation tax at 25.0% |
(7,428) |
(3,254) |
(3,494) |
|
Change in value of investment properties |
7,900 |
3,853 |
4,344 |
|
Change in value of interest rate derivatives and deferred consideration |
377 |
242 |
613 |
|
Tax-exempt property rental business |
(849) |
(841) |
(1,463) |
|
Current year tax charge |
- |
- |
- |
8. Operating leases
Operating lease commitments - as lessor
The Group has entered into commercial property leases on its investment property portfolio. These non-cancellable leases have a remaining term of up to 20 years (31 December 2024: 20 years).
Future minimum rentals receivable under non-cancellable operating leases as at 30 June 2025 are as follows:
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
Within one year |
15,994 |
15,384 |
|
Between one and five years |
44,808 |
38,974 |
|
More than five years |
34,229 |
31,133 |
|
Total |
95,031 |
85,491 |
9. Dividends
|
|
Pence |
|
|
For the six months ended 30 June 2025 |
per share |
£'000 |
|
Total |
- |
- |
|
Paid as: |
|
|
|
Property income distribution |
- |
- |
|
Non-property income distribution |
- |
- |
|
Total |
- |
- |
|
|
Pence |
|
|
For the six months ended 30 June 2024 |
per share |
£'000 |
|
Second interim dividend for the year ended 31 December 2023, paid on 13 May 2024 |
1.0 |
3,500 |
|
Total |
1.0 |
3,500 |
|
Paid as: |
|
|
|
Property income distribution |
- |
- |
|
Non-property income distribution |
1.0 |
3,500 |
|
Total |
1.0 |
3,500 |
|
|
Pence |
|
|
For the six months ended 31 December 2024 |
per share |
£'000 |
|
First interim dividend for year ended 31 December 2024, paid on 31 October 2024 |
1.0 |
3,500 |
|
Total |
1.0 |
3,500 |
|
Paid as: |
|
|
|
Property income distribution |
- |
- |
|
Non-property income distribution |
1.0 |
3,500 |
|
Total |
1.0 |
3,500 |
10. Earnings per share
Basic EPS is calculated by dividing profit for the period attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares during the period. As there are no dilutive instruments in issue, basic and diluted EPS are identical.
|
|
Six months |
Six months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2024 |
|
|
£'000 |
£'000 |
£'000 |
|
IFRS earnings |
(29,712) |
(13,015) |
(13,977) |
|
EPRA earnings adjustments: |
|
|
|
|
Fair value losses/(gains) on investment properties |
31,600 |
15,412 |
17,376 |
|
Changes in fair value of interest rate derivatives |
1,433 |
975 |
2,649 |
|
Changes in fair value of deferred consideration payable on interest rate derivatives |
73 |
(8) |
(195) |
|
EPRA earnings1 |
3,394 |
3,364 |
5,853 |
1. Adjusted earnings are aligned with EPRA earnings in all periods.
|
|
Six months |
Six months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2024 |
|
|
£'000 |
£'000 |
£'000 |
|
Basic IFRS EPS |
(8.5) |
(3.7) |
(4.0) |
|
Diluted IFRS EPS |
(8.5) |
(3.7) |
(4.0) |
|
EPRA EPS |
1.0 |
1.0 |
1.7 |
|
Adjusted EPS |
1.0 |
1.0 |
1.7 |
|
|
Six months |
Six months |
Year |
|
|
ended |
ended |
ended |
|
|
30 June |
30 June |
31 December |
|
|
2025 |
2024 |
2025 |
|
|
Number |
Number |
Number |
|
|
of shares |
of shares |
of shares |
|
Weighted average number of shares in issue (thousands) |
350,000 |
350,000 |
350,000 |
11.
|
|
Completed |
Development |
Total |
|
|
investment |
property |
investment |
|
|
property |
and land |
property |
|
|
£'000 |
£'000 |
£'000 |
|
Investment property valuation brought forward as at 1 January 2025 |
328,673 |
56,547 |
385,220 |
|
Acquisitions1 |
- |
- |
- |
|
Capital expenditure |
696 |
5,160 |
5,856 |
|
Finance costs capitalised |
- |
961 |
961 |
|
Fair value losses on investment property |
(25,617) |
(5,983) |
(31,600) |
|
Movement in rent incentives and amortisation |
151 |
(13) |
138 |
|
Transfer from development to investment |
30,872 |
(30,872) |
- |
|
Fair value at 30 June 2025 |
334,775 |
25,800 |
360,575 |
|
|
Completed |
Development |
Total |
|
|
investment |
property |
investment |
|
|
property |
and land |
property |
|
|
£'000 |
£'000 |
£'000 |
|
Investment property valuation brought forward as at 1 January 2024 |
314,858 |
67,442 |
382,300 |
|
Acquisitions1 |
(218) |
- |
(218) |
|
Capital expenditure |
5,493 |
13,048 |
18,541 |
|
Finance costs capitalised |
61 |
2,025 |
2,086 |
|
Fair value losses on investment property |
(12,511) |
(4,865) |
(17,376) |
|
Movement in rent incentives and amortisation |
(256) |
143 |
(113) |
|
Transfer from development to investment |
21,246 |
(21,246) |
- |
|
Fair value at 31 December 2024 |
328,673 |
56,547 |
385,220 |
1. During the current period and 2024 there were no acquisitions of new assets. The movement reflects the finalisation of acquisition balances from prior periods.
12. Trade and other receivables
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
Amounts due from property manager |
1,908 |
5 |
|
Prepayments and other receivables |
1,476 |
964 |
|
Rent and insurance receivable |
566 |
2,333 |
|
Interest receivable |
324 |
714 |
|
VAT receivable |
369 |
- |
|
Occupier deposits |
176 |
180 |
|
Current trade and other receivables |
4,819 |
4,196 |
|
Occupier deposits |
3,889 |
3,826 |
|
Non-current trade and other receivables |
3,889 |
3,826 |
|
Total trade and other receivables |
8,708 |
8,022 |
13. Cash and cash equivalents
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
Cash |
3,719 |
3,567 |
|
Cash equivalents |
1,000 |
2,000 |
|
Total |
4,719 |
5,567 |
Cash equivalents includes £1.0 million (31 December 2024: £2.0 million) of cash held by various banks on short-term deposits.
14. Interest rate derivatives
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
At the start of the period |
2,378 |
3,998 |
|
Additional premiums paid and accrued |
- |
1,351 |
|
Changes in fair value of interest rate derivatives |
(1,434) |
(2,649) |
|
Balance at the end of the period |
944 |
2,378 |
|
|
|
|
|
Current |
944 |
2,378 |
|
Non-current |
- |
- |
|
Total |
944 |
2,378 |
To mitigate the interest rate risk that arises as a result of entering into variable rate linked loans, the Group entered into interest rate derivatives.
A number of forward starting interest rate caps were entered into as at 26 June 2023 for a total deferred premium of £3.6 million to align with the expected debt draw down of the debt facility. This caps SONIA at a strike rate of 2.00% with a termination date of March 2025 (aligned with the cap entered into in 2022). During 2024, two further interest rate caps were entered into:
• In September 2024, for a premium of £0.6 million, a six-month hedge was entered into capping SONIA at a strike rate of 3.00% from 1 April 2025 to 30 September 2025. At the same time, the notional of the forward starting caps terminating in March 2025 was reduced in line with updated debt draw down assumptions resulting in a termination value of £0.3 million as above.
• In December 2024, for a deferred premium of £0.8 million, a three-month hedge was entered into capping SONIA at a strike rate of 2.00% from 1 October 2025 to 31 December 2025.
15. Interest-bearing loans and borrowings
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
At the beginning of the period |
122,726 |
108,726 |
|
Drawn in the period |
4,000 |
14,000 |
|
Interest-bearing loans and borrowings |
126,726 |
122,726 |
|
Unamortised fees at the beginning of the period |
(488) |
(808) |
|
Amortisation charge for the period |
164 |
320 |
|
Unamortised loan arrangement fees |
(324) |
(488) |
|
Loan balance less unamortised loan arrangement fees |
126,402 |
122,238 |
|
|
|
|
|
Current |
126,402 |
- |
|
Non-current |
- |
122,238 |
|
Total |
126,402 |
122,238 |
The Company has a debt facility with HSBC and Bank of Ireland ("BOI") split 60% and 40%, respectively (the "debt facility"). The debt facility comprises a £100.0 million term loan and £50.0 million revolving credit facility ("RCF") with an expiry date of 23 June 2026. It has an interest rate in respect of drawn amounts of 250 basis points over SONIA and is secured on all of the assets of the Group, including Oxford Technology Park ("OTP"). The debt facility borrowers are Ironstone Life Science Holdings Limited and Oxford Technology Park Holdings Limited, both direct subsidiaries of the Company. The £100.0 million term loan was fully drawn during 2024. The RCF is being drawn to fund the OTP development and other refurbishment projects, with £26.7 million drawn as at 30 June 2025 (31 December 2024: £22.7 million) and a remaining £23.3 million available to utilise (31 December 2024: £27.3 million). The Group also has a £35.0 million accordion facility available on the RCF, which has not been utilised as at 30 June 2025.
The debt facility includes LTV and interest cover covenants. As at 30 June 2025 the Group was in full compliance with all loan covenants other than the projected interest cover ratio which both lenders have provided a waiver for. Given the ongoing strategic review, no further hedging had been put in place leading to the breach and subsequent waiver. The lenders continue to be supportive of the Group during the strategic review period. The facility also includes a ratchet clause that reduces the margin to 2.35% if the gross LTV decreases to 30%, based on the lenders' annual valuation of the portfolio.
The Group has also defined £40.0 million of the term loan as a Green Loan in accordance with the LMA Green Loan Principles. This is secured on Rolling Stock Yard and completed OTP buildings, which are rated either BREEAM Excellent or EPC A.
16. Other payables and accrued expenses
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
Deferred income |
4,076 |
4,222 |
|
Capital expenses payable |
1,986 |
1,943 |
|
Accounts payable |
1,776 |
761 |
|
Loan interest payable |
1,694 |
1,809 |
|
Administration and other expenses payable |
984 |
1,101 |
|
Deferred consideration on interest rate caps |
754 |
1,922 |
|
Occupier deposits payable to occupier |
176 |
180 |
|
Property operating expenses payable |
153 |
389 |
|
VAT payable |
- |
28 |
|
Current other payables and accrued expenses |
11,599 |
12,355 |
|
Occupier deposits payable to occupier |
3,889 |
3,826 |
|
Non-current other payables and accrued expenses |
3,889 |
3,826 |
|
Total other payables and accrued expenses |
15,488 |
16,181 |
17. Share capital
Share capital is the nominal amount of the Company's ordinary shares in issue.
|
|
|
30 June |
|
31 December |
|
|
|
2025 |
|
2024 |
|
Ordinary shares of £0.01 each |
Number |
£'000 |
Number |
£'000 |
|
Authorised, issued and fully paid: |
|
|
|
|
|
Shares issued |
350,000,000 |
3,500 |
350,000,000 |
3,500 |
|
Balance at the end of the period |
350,000,000 |
3,500 |
350,000,000 |
3,500 |
The share capital comprises one class of ordinary shares. At general meetings of the Company, ordinary shareholders are entitled to one vote on a show of hands and on a poll, to one vote for every share held. There are no restrictions on the size of a shareholding or the transfer of shares, except for the
In a prior period, the Company cancelled its share premium account and, as a result, transferred the balance to the capital reduction reserve. The share premium account is no longer presented in the financial statements.
18. Net asset value per share
Basic NAV per share amounts are calculated by dividing net assets attributable to ordinary equity holders of the Company in the consolidated statement of financial position by the number of ordinary shares outstanding at the end of the period. As there are no dilutive instruments in issue, basic and diluted NAV per share are identical.
EPRA net tangible assets ("EPRA NTA") is calculated using property values in line with IFRS, where values are net of real estate transfer tax ("RETT") and other purchasers' costs. EPRA NTA is considered to be the most relevant measure for the Group's operating activities.
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
IFRS net assets attributable to ordinary shareholders |
233,056 |
262,768 |
|
IFRS net assets for calculation of NAV |
233,056 |
262,768 |
|
Adjustment to net assets: |
|
|
|
Fair value of interest rate derivatives |
(944) |
(2,378) |
|
EPRA NTA |
232,112 |
260,390 |
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
Pence |
Pence |
|
IFRS basic and diluted NAV per share |
66.6 |
75.1 |
|
EPRA NTA per share |
66.3 |
74.4 |
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
Number |
Number |
|
|
of shares |
of shares |
|
Number of shares in issue (thousands) |
350,000 |
350,000 |
19. Fair value
IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values.
The fair value of cash and short-term deposits, trade receivables, trade payables and other current liabilities approximate their carrying amounts due to the short-term maturities of these instruments.
Interest-bearing loans and borrowings are disclosed at amortised cost. The carrying values of the loans and borrowings approximate their fair value due to the contractual terms and conditions of the loan. The HSBC and BOI debt facility has an interest rate of 250 basis points over SONIA in respect of drawn amounts.
The fair value of the interest rate contracts is recorded in the statement of financial position and is revalued quarterly by an independent valuations specialist,
Six-monthly valuations of investment property are performed by CBRE, accredited external valuers with recognised and relevant professional qualifications and recent experience of the location and category of the investment property being valued, on a variable fee basis. However, the valuations are the ultimate responsibility of the Director who appraise these every six months.
The valuation of the Group's investment property at fair value is determined by the external valuer on the basis of market value in accordance with the internationally accepted RICS Valuation - Professional Standards January 2022 (incorporating the International Valuation Standards).
Completed investment properties are valued by adopting the 'income capitalisation' method of valuation. This approach involves applying capitalisation yields to current and future rental streams, net of income voids arising from vacancies or rent-free periods and associated running costs. These capitalisation yields and future rental values are based on comparable property and leasing transactions in the market using the valuer's professional judgement and market observations. Other factors taken into account in the valuations include the tenure of the property, tenancy details and ground and structural conditions.
On-site developments are valued by applying the 'residual method' of valuation, which is the investment method described above with a deduction for all costs necessary to complete the development, with a further allowance for remaining risk and developers' profit. Properties and land held for future development are valued using the highest and best use method, by adopting the residual method allowing for all associated risks, the investment method, or a value per acre methodology.
The following table shows an analysis of the fair values of investment properties recognised in the statement of financial position by level of the fair value hierarchy1:
|
|
30 June 2025 |
|||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
Assets and liabilities measured at fair value |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investment properties |
- |
- |
360,575 |
360,575 |
|
Interest rate derivatives |
- |
944 |
- |
944 |
|
Deferred consideration on interest rate caps |
- |
(754) |
- |
(754) |
|
Total |
- |
190 |
360,575 |
360,765 |
|
|
31 December 2024 |
|||
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
Assets and liabilities measured at fair value |
£'000 |
£'000 |
£'000 |
£'000 |
|
Investment properties |
- |
- |
385,220 |
385,220 |
|
Interest rate derivatives |
- |
2,378 |
- |
2,378 |
|
Deferred consideration on interest rate caps |
- |
(1,922) |
- |
(1,922) |
|
Total |
- |
456 |
385,220 |
385,676 |
1. Explanation of the fair value hierarchy:
· Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
· Level 2 - use of a model with inputs (other than quoted prices included in Level 1) that are directly or indirectly observable market data; and
· Level 3 - use of a model with inputs that are not based on observable market data.
There have been no transfers between Level 1 and Level 2 during either period, nor have there been any transfers in or out of Level 3.
Sensitivity analysis to significant changes in unobservable inputs within the valuation of investment properties
The following table analyses:
· the fair value measurements at the end of the reporting period;
· a description of the valuation techniques applied;
· the inputs used in the fair value measurement, including the ranges of rent charged to different units within the same
· building; and
· for Level 3 fair value measurements, quantitative information about significant unobservable inputs used in the fair value measurement.
|
|
|
|
Key |
|
|
|
Fair value |
Valuation |
unobservable |
|
|
30 June 2025 |
£'000 |
technique |
inputs |
Range |
|
Completed investment property |
334,775 |
Income capitalisation |
ERV |
£15.4 - £110.0 per sq ft |
|
|
|
|
Equivalent yield |
5.5% - 8.25% |
|
Development property |
22,727 |
Income capitalisation/ residual method |
ERV |
£20 per sq ft |
|
|
|
|
Equivalent yield |
6.3% |
|
Development land |
3,073 |
Comparable method/ residual method |
Sales rate |
£35.1 per sq ft |
|
Total |
360,575 |
|
|
|
|
|
|
|
Key |
|
|
|
Fair value |
Valuation |
unobservable |
|
|
31 December 2024 |
£'000 |
technique |
inputs |
Range |
|
Completed investment property |
328,673 |
Income capitalisation |
ERV |
£15.4 - £110.0 per sq ft |
|
|
|
|
Equivalent yield |
5.05% - 7.25% |
|
Development property |
50,972 |
Income capitalisation/ residual method |
ERV |
£20.0 per sq ft |
|
|
|
|
Equivalent yield |
5.05% - 5.75% |
|
Development land |
5,575 |
Comparable method/ residual method |
Sales rate |
£63.7 per sq ft |
|
Total |
385,220 |
|
|
|
1 ERV range excludes one unit which has an ERV of £nil.
Significant increases/decreases in the ERV (per sq ft per annum) and rental growth per annum in isolation would result in a significantly higher/lower fair value measurement. Significant increases/decreases in the long-term vacancy rate and discount rate (and exit yield) in isolation would result in a significantly higher/lower fair value measurement.
Generally, a change in the assumption made for the ERV (per sq ft per annum) is accompanied by:
· a similar change in the rent growth per annum and discount rate (and exit yield); and
· an opposite change in the long-term vacancy rate.
Gains and losses recorded in profit or loss for recurring fair value measurements categorised within Level 3 of the fair value hierarchy amount to a loss of £31.6 million (31 December 2024: £17.4 million loss) and are presented in the consolidated statement of comprehensive income in line item 'fair value gains/(losses) on investment properties'.
All gains and losses recorded in profit or loss for recurring fair value measurements categorised within Level 3 of the fair value hierarchy are attributable to changes in unrealised gains or losses relating to investment property held at the end of the reporting period.
The carrying amount of the Group's other assets and liabilities is considered to be the same as their fair value.
20. Capital commitments
At 30 June 2025, the Group had contracted capital expenditure of £22.8 million (31 December 2024: £27.4 million).
21. Related party transactions
Directors
The Directors (all Non-Executive Directors) of the Company and its subsidiaries are considered to be the key management personnel of the Group. Directors' remuneration for the period totalled £100,440 (six months to 30 June 2024: £98,232), including £10,440 of employers' National Insurance contributions (six months to 30 June 2024: £8,232); and at 30 June 2025, a balance of £nil (31 December 2024: £nil) was outstanding.
Investment Adviser
The Company is party to an Investment Advisory Agreement with the AIFM and the Investment Adviser, pursuant to which the Investment Adviser has been appointed to provide investment advisory services relating to the respective assets on a day-to‑day basis in accordance with their respective investment objectives and policies, subject to the overall supervision and direction by the AIFM and the Board of Directors.
For its services to the Company, the Investment Adviser is entitled to a fee payable quarterly in arrears calculated at the rate of one quarter of 1.1% per quarter on that part of the NAV up to, and including, £500 million; one quarter of 0.9% per quarter on that part of the NAV in excess of £500 million and up to £1 billion; and one quarter of 0.75% per quarter on NAV in excess of £1 billion.
Following the strategic review announcement on 14 March 2025, the Board and Investment Adviser have agreed to revisions to the fee, effective from the quarter commencing 1 April 2025. The Investment Advisory fee will move from being calculated on net asset value to the lower of net asset value and the average market capitalisation for the quarter, subject to a floor of no lower than 70.0% of net asset value. In addition the rate applied to the initial fee threshold of £500 million has been lowered to 1.0%. Refer to the Directors' report in the Annual Report for further information.
During the period, the Group incurred £1,120,144 (six months to 30 June 2024: £1,513,045) in respect of investment advisory fees. As at 30 June 2025, £666,611 (31 December 2024: £726,625) was outstanding.
22. Ultimate controlling party
It is the view of the Directors that there is no ultimate controlling party.
23. Post balance sheet events
Deed of variation:
On 18 July 2025 the Group entered into a deed of variation contract with the developer at OTP to redesign Buildings 10 and 11 for an additional £5.0 million capital expenditure. This expenditure was not committed as at 30 June 2025 and therefore has not been reflected in the financial statements or in note 20.
Conclusion of strategic review:
On 14 March 2025, the Board of Directors of the Company announced the commencement of a strategic review to assess the long-term options available to the business, which may include a potential sale or managed wind down.
On 19 September 2025, following the conclusion of the strategic review, the Board formally resolved to commence an orderly wind down of the Company over an anticipated period of between 12-18 months.
As this decision occurred after the reporting date of 30 June 2025, it is classified as a non-adjusting event under IAS 10 Events After the Reporting Period. Accordingly, the interim financial statements have been prepared on a going concern basis with material uncertainty, which is aligned with the approach at the year ended 31 December 2024.
Based on preliminary assessments, the financial impact of the planned wind down is not expected to differ materially from the values reported in these interim financial statements as at 30 June 2025. However, the ultimate financial effect of the liquidation depends on several uncertain factors, including the timing and method of asset realisation and liability settlement, and therefore cannot yet be reliably estimated in full at this stage.
The Company will adopt the liquidation (or break up) basis of accounting for its next financial reporting period, in accordance with the requirements of IAS 1 and applicable guidance.
UNAUDITED SUPPLEMENTARY NOTES NOT PART OF THE CONSOLIDATED FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 30 JUNE 2025
EPRA has developed and defined the following performance measures to give transparency, comparability and relevance of financial reporting across entities which may use different accounting standards. The following measures are calculated in accordance with EPRA guidance. These are not intended as a substitute for IFRS measures.
Table 1: EPRA performance measures summary
|
|
|
Six months |
Six months |
Year |
|
|
|
ended |
ended |
ended |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2025 |
2024 |
2024 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
EPRA earnings (£'000) |
Table 2 |
3,394 |
3,364 |
5,853 |
|
EPRA EPS (pence) |
Table 2 |
1.0 |
1.0 |
1.7 |
|
EPRA cost ratio (including direct vacancy cost) |
Table 6 |
32.2% |
36.6% |
40.8% |
|
EPRA cost ratio (excluding direct vacancy cost) |
Table 6 |
28.4% |
32.0% |
34.1% |
|
|
|
30 June |
31 December |
|
|
Notes |
2025 |
2024 |
|
EPRA NDV per share (pence) |
Table 3 |
66.6 |
75.1 |
|
EPRA NRV per share (pence) |
Table 3 |
73.1 |
81.7 |
|
EPRA NTA per share (pence) |
Table 3 |
66.3 |
74.4 |
|
EPRA net initial yield |
Table 4 |
4.0% |
3.9% |
|
EPRA 'topped-up' net initial yield |
Table 4 |
4.5% |
4.1% |
|
EPRA vacancy rate |
Table 5 |
16.0% |
15.6% |
|
EPRA LTV |
Table 10 |
35.7% |
32.5% |
Table 2: EPRA income statement
|
|
|
Six months |
Six months |
Year |
|
|
|
ended |
ended |
ended |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2025 |
2024 |
2024 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
Revenue |
3 |
10,767 |
10,037 |
20,308 |
|
Less: insurance recharged |
3 |
(83) |
(81) |
(164) |
|
Less: service charge income |
3 |
(1,886) |
(1,970) |
(3,953) |
|
Rental income (A) |
|
8,798 |
7,986 |
16,191 |
|
Property operating expenses (including recoverable service charges) |
4 |
(2,658) |
(2,694) |
(5,884) |
|
Add: insurance recharged |
3 |
83 |
81 |
164 |
|
Add: service charge income |
3 |
1,886 |
1,970 |
3,953 |
|
Gross profit (B) |
|
8,109 |
7,343 |
14,424 |
|
Administration expenses |
4 |
(2,145) |
(2,276) |
(4,838) |
|
Operating profit before interest and tax |
|
5,964 |
5,067 |
9,586 |
|
Finance income |
5 |
1,297 |
2,089 |
4,203 |
|
Finance expenses |
6 |
(5,373) |
(4,759) |
(10,390) |
|
Less: change in fair value of interest rate derivatives and deferred consideration |
6 |
1,506 |
967 |
2,454 |
|
Adjusted profit before tax |
|
3,394 |
3,364 |
5,853 |
|
Taxation |
7 |
- |
- |
- |
|
EPRA earnings |
|
3,394 |
3,364 |
5,853 |
|
|
|
|
|
|
|
Weighted average number of shares in issue (thousands) |
17 |
350,000 |
350,000 |
350,000 |
|
EPRA EPS (pence) |
10 |
1.0 |
1.0 |
1.7 |
|
|
|
|
|
|
|
Gross to net rental income ratio (B/A) |
|
92.2% |
91.9% |
89.1% |
In all periods reflected above adjusted earnings are aligned with EPRA earnings. Adjusted earnings represents earnings from operational activities. It is a key measure of the Group's underlying operational results and an indication of the extent to which dividend payments are supported by earnings.
Table 3: EPRA balance sheet and net asset value performance measures
EPRA net disposal value ("NDV"), EPRA net reinstatement value ("NRV") and EPRA net tangible assets ("NTA"). A reconciliation of the three EPRA NAV metrics from IFRS NAV is shown in the table below. Total accounting return is calculated based on EPRA NTA.
|
|
|
EPRA NDV |
EPRA NRV |
EPRA NTA |
|
As at 30 June 2025 |
Notes |
£'000 |
£'000 |
£'000 |
|
Total properties1 |
11 |
360,575 |
360,575 |
360,575 |
|
Net borrowings2 |
13,15 |
(122,007) |
(122,007) |
(122,007) |
|
Other net liabilities |
|
(5,512) |
(5,512) |
(5,512) |
|
IFRS NAV |
18 |
233,056 |
233,056 |
233,056 |
|
Include: real estate transfer tax3 |
|
- |
23,887 |
- |
|
Exclude: fair value of interest rate derivatives |
14 |
- |
(944) |
(944) |
|
NAV used in per share calculations |
|
233,056 |
255,999 |
232,112 |
|
Number of shares in issue (thousands) |
18 |
350,000 |
350,000 |
350,000 |
|
NAV per share (pence) |
|
66.6 |
73.1 |
66.3 |
|
|
|
EPRA NDV |
EPRA NRV |
EPRA NTA |
|
As at 31 December 2024 |
Notes |
£'000 |
£'000 |
£'000 |
|
Total properties1 |
11 |
385,220 |
385,220 |
385,220 |
|
Net borrowings2 |
13,15 |
(117,159) |
(117,159) |
(117,159) |
|
Other net liabilities |
|
(5,293) |
(5,293) |
(5,293) |
|
IFRS NAV |
18 |
262,768 |
262,768 |
262,768 |
|
Include: real estate transfer tax3 |
|
- |
25,529 |
- |
|
Exclude: fair value of interest rate derivatives |
14 |
- |
(2,378) |
(2,378) |
|
NAV used in per share calculations |
|
262,768 |
385,919 |
260,390 |
|
Number of shares in issue (thousands) |
18 |
350,000 |
350,000 |
350,000 |
|
NAV per share (pence) |
|
75.1 |
81.7 |
74.4 |
1. Professional valuation of investment property.
2. Comprising interest-bearing loans and borrowings (excluding unamortised loan arrangement fees) of £126.7 million net of cash of £4.7 million (31 December 2024: £122.7 million net of cash of £5.6 million).
3. EPRA NTA and EPRA NDV reflect IFRS values which are net of real estate transfer tax. Real estate transfer tax is added back when calculating EPRA NRV.
EPRA NDV details the full extent of liabilities and resulting shareholder value if Company assets are sold and/or if liabilities are not held until maturity. Deferred tax and financial instruments are calculated as to the full extent of their liability, including tax exposure not reflected in the statement of financial position, net of any resulting tax.
EPRA NTA assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability.
EPRA NRV highlights the value of net assets on a long-term basis and reflects what would be needed to recreate the Company through the investment markets based on its current capital and financing structure. Assets and liabilities that are not expected to crystallise in normal circumstances, such as the fair value movements on financial derivatives and deferred taxes on property valuation surpluses, are excluded. Costs such as real estate transfer taxes are included.
Table 4: EPRA net initial yield
|
|
|
30 June |
31 December |
|
|
|
2025 |
2024 |
|
|
Notes |
£'000 |
£'000 |
|
Total properties per external valuer's report |
11 |
360,575 |
385,220 |
|
Less development property and land |
11 |
(25,800) |
(56,547) |
|
Net valuation of completed properties |
|
334,775 |
328,673 |
|
Add estimated purchasers' costs1 |
|
22,243 |
21,925 |
|
Gross valuation of completed properties including estimated purchasers' costs (A) |
|
357,018 |
350,598 |
|
Gross passing rents2 (annualised) |
|
15,269 |
14,894 |
|
Less irrecoverable property costs2 |
|
(1,049) |
(1,077) |
|
Net annualised rents (B) |
|
14,220 |
13,817 |
|
Add notional rent on expiry of rent-free periods or other lease incentives3 |
|
1,885 |
530 |
|
'Topped-up' net annualised rents (C) |
|
16,105 |
14,347 |
|
EPRA NIY (B/A) |
|
4.0% |
3.9% |
|
EPRA 'topped-up' net initial yield ( |
|
4.5% |
4.1% |
1. Estimated purchasers' costs at 6.6% (31 December 2024: 6.7%).
2. Gross passing rents and irrecoverable property costs assessed as at the balance sheet date for completed investment properties excluding development property and land.
3. Adjustment for unexpired lease incentives such as rent-free periods, discounted rent period and step rents. The adjustment includes the annualised cash rent that will apply at the expiry of the lease incentive. Rent-frees expire over a weighted average period of 8 months (31 December 2024: 4 months).
EPRA NIY represents annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with (estimated) purchasers' costs. It is a comparable measure for portfolio valuations designed to make it easier for investors to judge themselves how the valuation of portfolio X compares with portfolio Y.
EPRA 'topped-up' NIY incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents).
NIY as stated in the Investment Adviser's report calculates net initial yield on topped-up annualised rents but does not deduct non-recoverable property costs.
Table 5: EPRA vacancy rate
|
|
30 June |
31 December |
|
|
2025 |
2024 |
|
|
£'000 |
£'000 |
|
Annualised ERV of vacant premises (A) |
3,864 |
3,488 |
|
Annualised ERV for the investment portfolio (B) |
24,213 |
22,383 |
|
EPRA vacancy rate (A/B) |
16.0% |
15.6% |
EPRA vacancy rate represents ERV of vacant space divided by ERV of the completed investment portfolio, excluding development property and land. It is a pure measure of investment property space that is vacant, based on ERV.
Table 6: Total cost ratio/EPRA cost ratio
|
|
|
Six months |
Six months |
Year |
|
|
|
ended |
ended |
ended |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2025 |
2024 |
2024 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
Property operating expenses (excluding service charge expenses) |
4 |
635 |
497 |
1,266 |
|
Service charge expenses |
4 |
2,023 |
2,197 |
4,618 |
|
Add back: service charge income |
3 |
(1,886) |
(1,970) |
(3,953) |
|
Add back: insurance recharged |
3 |
(83) |
(81) |
(164) |
|
Net property operating expenses |
|
689 |
643 |
1,767 |
|
Administration expenses |
4 |
2,145 |
2,276 |
4,838 |
|
Total cost including direct vacancy cost (A) |
|
2,834 |
2,919 |
6,605 |
|
Direct vacancy cost |
|
(337) |
(364) |
(1,077) |
|
Total cost excluding direct vacancy cost (B) |
|
2,497 |
2,555 |
5,528 |
|
|
|
|
|
|
|
Rental income1 |
3 |
8,798 |
7,986 |
16,191 |
|
Gross rental income (C) |
3 |
8,798 |
7,986 |
16,191 |
|
Less direct vacancy cost |
|
(337) |
(364) |
(1,077) |
|
Net rental income |
|
8,461 |
7,622 |
15,114 |
|
Total cost ratio including direct vacancy cost (A/C) |
|
32.2% |
36.6% |
40.8% |
|
Total cost ratio excluding direct vacancy cost (B/C) |
|
28.4% |
32.0% |
34.1% |
|
|
|
Six months |
Six months |
Year |
|
|
|
ended |
ended |
ended |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2025 |
2024 |
2024 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
Total cost including direct vacancy cost (A) |
|
2,834 |
2,919 |
6,605 |
|
EPRA total cost (D) |
|
2,834 |
2,919 |
6,605 |
|
Direct vacancy cost |
|
(337) |
(364) |
(1,077) |
|
EPRA total cost excluding direct vacancy cost (E) |
|
2,497 |
2,555 |
5,528 |
|
EPRA cost ratio including direct vacancy cost (D/C) |
|
32.2% |
36.6% |
40.8% |
|
EPRA cost ratio excluding direct vacancy cost (E/C) |
|
28.4% |
32.0% |
34.1% |
1. Includes rental income, rental income straight-line adjustment and other income as per note 3.
EPRA cost ratios represent administrative and operating costs (including and excluding costs of direct vacancy) divided by gross rental income. They are a key measure to enable meaningful measurement of the changes in the Group's operating costs.
It is the Group's policy not to capitalise overheads or operating expenses and no such costs were capitalised in the six months ended 30 June 2025 or in prior periods.
Table 7: Lease data
|
|
Year 1 |
Year 2 |
Years 3-5 |
Year 5+ |
Total |
|
As at 30 June 2025 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Passing rent of leases expiring in: |
919 |
4,917 |
1,038 |
8,395 |
15,269 |
|
ERV of leases expiring in: |
1,004 |
6,400 |
1,063 |
11,883 |
20,350 |
|
|
|
|
|
|
|
|
Passing rent subject to review in: |
4,669 |
5,945 |
3,698 |
957 |
15,269 |
|
ERV subject to review in: |
5,961 |
7,792 |
4,627 |
1,970 |
20,350 |
|
|
|
|
|
|
|
|
|
Year 1 |
Year 2 |
Years 3-5 |
Year 5+ |
Total |
|
As at 31 December 2024 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Passing rent of leases expiring in: |
825 |
4,722 |
2,277 |
7,070 |
14,894 |
|
ERV of leases expiring in: |
896 |
6,191 |
2,571 |
9,237 |
18,895 |
|
|
|
|
|
|
|
|
Passing rent subject to review in: |
2,596 |
8,115 |
4,183 |
- |
14,894 |
|
ERV subject to review in: |
2,843 |
10,750 |
5,302 |
- |
18,895 |
WAULT to expiry is 5.6 years (31 December 2024: 5.3 years) and to break is 3.3 years (31 December 2024: 3.1 years).
Table 8: Capital expenditure
|
|
|
Six months |
Year |
|
|
|
ended |
ended |
|
|
|
30 June |
31 December |
|
|
|
2025 |
2024 |
|
|
Notes |
£'000 |
£'000 |
|
Acquisitions1 |
11 |
- |
(218) |
|
Development spend2 |
11 |
5,160 |
13,048 |
|
Movement in rent incentives and amortisation |
11 |
138 |
(113) |
|
Completed investment properties:3 |
|
|
|
|
No incremental lettable space - like-for-like portfolio |
11 |
696 |
5,493 |
|
No incremental lettable space - other |
|
- |
- |
|
Total capital expenditure |
|
5,994 |
18,210 |
|
Conversion from accruals to cash basis |
|
(188) |
2,197 |
|
Total capital expenditure on a cash basis |
|
5,806 |
20,407 |
2. During the current period and prior year end there were no acquisitions of new assets, the balances reflected relate to the finalisation of acquisitions from prior periods.
3. Expenditure on development property and land.
4. Expenditure on completed investment properties.
Table 9: Like-for-like net rental income
|
|
|
Six months |
Six months |
|
|
|
|
ended |
ended |
|
|
|
|
30 June |
30 June |
|
|
|
|
2025 |
2024 |
|
|
|
Notes |
£'000 |
£'000 |
% Change |
|
Like-for-like net rental income |
|
7,274 |
6,687 |
8.8% |
|
Development lettings |
|
835 |
656 |
|
|
Properties disposed in current and prior year |
|
- |
- |
|
|
Properties acquired in current and prior year |
|
- |
- |
|
|
Net rental income |
3,4 |
8,109 |
7,343 |
|
Table 10: Loan to value ("LTV") and EPRA LTV
Gross debt less cash, short-term deposits and liquid investments, divided by the aggregate value of properties and investments. The Group also presents the EPRA LTV which is defined as net borrowings divided by total property market value.
|
|
|
30 June |
31 December |
|
|
|
2025 |
2024 |
|
|
Notes |
£'000 |
£'000 |
|
Interest-bearing loans and borrowings1 |
15 |
126,726 |
122,726 |
|
Cash |
13 |
(4,719) |
(5,567) |
|
Net borrowings (A) |
|
122,007 |
117,159 |
|
Investment property at fair value (B) |
11 |
360,575 |
385,220 |
|
LTV (A/B) |
|
33.8% |
30.4% |
EPRA LTV
|
|
|
30 June |
31 December |
|
|
|
2025 |
2024 |
|
|
Notes |
£'000 |
£'000 |
|
Interest-bearing loans and borrowings1 |
15 |
126,726 |
122,726 |
|
Net payables2 |
|
6,780 |
8,159 |
|
Cash |
13 |
(4,719) |
(5,567) |
|
Net borrowings (A) |
|
128,787 |
125,318 |
|
Investment properties at fair value |
11 |
360,575 |
385,220 |
|
Total property value (B) |
|
360,575 |
385,220 |
|
EPRA LTV (A/B) |
|
35.7% |
32.5% |
1. Excludes unamortised loan arrangement fees asset (see note 15) of £0.3 million (31 December 2024: £0.5 million).
2. Net payables include trade and other receivables, other payables and accrued expenses. See Consolidated Statement of Financial Position and notes 12 and 16 for a full breakdown.
Table 11: Total accounting return
The movement in EPRA NTA over a period plus dividends paid in the period, expressed as a percentage of the EPRA NTA at the start of the period.
|
|
|
Six months |
Year |
|
|
|
ended |
ended |
|
|
|
30 June |
31 December |
|
|
|
2025 |
2024 |
|
|
|
Pence per |
Pence per |
|
|
Notes |
share |
share |
|
Opening EPRA NTA (A) |
18 |
74.4 |
79.9 |
|
Movement (B) |
|
(8.1) |
(5.5) |
|
Closing EPRA NTA |
18 |
66.3 |
74.4 |
|
Dividend per share (C) |
9 |
- |
2.0 |
|
Total accounting return (B+C)/A |
|
(10.9)% |
(4.4)% |
Table 12: Interest cover
Adjusted operating profit before gains on investment properties, interest and tax divided by the underlying adjusted net interest expense.
|
|
|
Six months |
Six months |
Year |
|
|
|
ended |
ended |
ended |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2025 |
2024 |
2024 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
Adjusted operating profit/(loss) before losses on investment properties (A) |
|
5,964 |
5,067 |
9,586 |
|
Finance expenses |
6 |
5,373 |
4,759 |
10,390 |
|
Add back: capitalised finance costs |
6 |
961 |
1,059 |
2,086 |
|
Less: finance income |
5 |
(1,297) |
(2,089) |
(4,203) |
|
Add back: change in fair value of interest rate derivatives and deferred consideration |
5,6 |
(1,506) |
(967) |
(2,454) |
|
Loan interest (B) |
|
3,531 |
2,762 |
5,819 |
|
Interest cover (A/B) |
|
168.9% |
183.5% |
164.7% |
Table 13: Ongoing charges ratio
Ongoing charges ratio represents the costs of running the REIT as a percentage of NAV as prescribed by the Association of Investment Companies.
|
|
|
Six months |
Six months |
Year |
|
|
|
ended |
ended |
ended |
|
|
|
30 June |
30 June |
31 December |
|
|
|
2025 |
2024 |
2024 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
Administration expenses |
4 |
2,145 |
2,276 |
4,838 |
|
Ongoing charges |
|
2,145 |
2,276 |
4,838 |
|
Annualised ongoing charges (A) |
|
4,290 |
4,552 |
4,838 |
|
Opening NAV as at start of period |
|
262,768 |
283,745 |
283,745 |
|
NAV as at 30 June |
|
- |
- |
267,230 |
|
Closing NAV as at end of period |
|
233,056 |
267,230 |
262,768 |
|
Average undiluted NAV during the period (B) |
|
247,912 |
275,488 |
271,248 |
|
Ongoing charges ratio (A/B) |
|
1.7% |
1.7% |
1.8% |
Glossary
Adjusted earnings per share ("Adjusted EPS")
EPRA EPS adjusted to exclude one-off costs, divided by the weighted average number of shares in issue during the period
AGM
Annual General Meeting
AIC
The Association of Investment Companies
AIFM
Alternative Investment Fund Manager
AIM
A market operated by the London Stock Exchange
Association of Investment Companies
The Company is a member of the AIC
BREEAM
Building research establishment environmental assessment method
BREEAM Interim Excellent
Interim BREEAM certifications indicate the performance of the building at the design stage of assessment
Carbon neutrality
Purchasing carbon reduction credits equivalent to emissions released without the need for emission reductions to have taken place
Company
Contracted rent
Gross annual rental income currently receivable on a property plus rent contracted from expiry of rent-free periods and uplifts agreed at the balance sheet date less any ground rents payable under head leases
Development property and land
Whole or a material part of an estate identified as having potential for development. Such assets are classified as development property and land until development is completed and they have the potential to be fully income generating
EPC
Energy performance certificate
EPRA
The European Public Real Estate Association, the industry body for European REITs
EPRA cost ratio
The sum of property and administration expenses as a percentage of gross rental income calculated both including and excluding direct vacancy cost
EPRA earnings
IFRS profit after tax excluding movements relating to changes in fair value of investment properties, gains/losses on property disposals, changes in fair value of financial instruments and the related tax effects
EPRA earnings per share ("EPRA EPS")
A measure of EPS on EPRA earnings designed to present underlying earnings from core operating activities based on the weighted average number of shares in issue during the period
EPRA guidelines
The EPRA Best Practices Recommendations Guidelines September 2024
EPRA NAV/EPRA NDV/EPRA NRV/EPRA NTA per share
The EPRA net asset value measures figures divided by the number of shares outstanding at the balance sheet date
EPRA net disposal value ("EPRA NDV")
The net asset value measure detailing the full extent of liabilities and resulting shareholder value if company assets are sold and/or if liabilities are not held until maturity. Deferred tax and financial instruments are calculated as to the full extent of their value or liability, net of any resulting tax
EPRA net initial yield ("EPRA NIY")
The annualised passing rent generated by the portfolio, less estimated non-recoverable property operating expenses, expressed as a percentage of the portfolio valuation (adding notional purchasers' costs), excluding development property and land
EPRA net reinstatement value ("EPRA NRV")
The net asset value measure to highlight the value of net assets on a long-term basis and reflect what would be needed to recreate the Company through the investment markets based on its current capital and financing structure. Assets and liabilities that are not expected to crystallise in normal circumstances, such as the fair value movements on financial derivatives and deferred taxes on property valuation surpluses, are excluded. Costs such as real estate transfer taxes are included
EPRA net tangible assets ("EPRA NTA")
An EPRA net asset value measure with adjustments made for the fair values of certain financial derivatives and assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability
EPRA sBPR
European public real estate association sustainable best practice recommendations
EPRA 'topped-up' net initial yield
The annualised passing rent generated by the portfolio, topped up for contracted uplifts, less estimated non‑recoverable property operating expenses, expressed as a percentage of the portfolio valuation (adding notional purchasers' costs), excluding development property and land
EPRA vacancy rate
Total open market rental value of vacant units divided by total open market rental value of the portfolio, excluding development property and land
EPS
Earnings per share
Equivalent yield
The weighted average rental income return expressed as a percentage of the investment property valuation, plus purchasers' costs, excluding development property and land
ERV
The estimated annual open market rental value of lettable space as assessed by the external valuer
EU taxonomy
A classification system that aims to provide a clear definition of what should be considered as 'sustainable' economic activity
FCA
Financial Conduct Authority
Fitwel
A real estate certification that measures a building against seven health impact categories
FRI
A full repairing and insuring lease, known as a FRI lease, is a commercial lease which gives the occupier sole responsibility for the maintenance, repair, and insurance of the asset for the duration of their lease.
GAV
Gross asset value
Group
IASB
IFRS
International Financial Reporting Standards
IFRS earnings per share ("EPS")
IFRS earnings after tax for the year divided by the weighted average number of shares in issue during the period
IFRS NAV per share
IFRS net asset value divided by the number of shares outstanding at the balance sheet date
Interest cover
Adjusted operating profit before gains on investment properties, interest and tax divided by the underlying net interest expense
Investment property
Completed buildings, excluding development property and land, also referred to as investment assets
Like-for-like rental income movement
The increase/decrease in contracted rent of properties owned throughout the period under review, expressed as a percentage of the contracted rent at the start of the period, excluding acquisitions, disposals, development property and land
Like-for-like net rental income movement
The increase/decrease in net rental income of properties owned throughout the period under review, expressed as a percentage of the net rental income at the start of the period, excluding acquisitions, disposals, development property and land
Like-for-like valuation movement
The increase/decrease in the valuation of properties owned throughout the period under review, expressed as a percentage of the valuation at the start of the period, net of capital expenditure
Loan to value ratio ("LTV")
Gross debt less cash, short-term deposits and liquid investments, divided by the aggregate value of properties and investments
Main Market
The premium segment of the London Stock Exchange's Main Market
NAV
Net asset value
Net equivalent yield ("NEY")
The weighted average rental income return expressed as a percentage of the investment property valuation, plus purchasers' costs, excluding development property and land
Net initial yield ("NIY")
Contracted rent at the balance sheet date, expressed as a percentage of the investment property valuation, plus purchasers' costs, excluding development property and land
Net rental income
Gross annual rental income receivable after deduction of ground rents and other net property outgoings, including void costs and net service charge expenses
Net reversionary yield ("NRY")
The anticipated yield to which the net initial yield will rise (or fall) once the rent reaches the ERV
Net zero carbon
The overall balance between emitting and absorbing carbon in the atmosphere
Occupancy
Total open market rental value of the units leased divided by total open market rental value, excluding development property and land, equivalent to one minus the EPRA vacancy rate
Ongoing charges ratio
Ongoing charges ratio represents the costs of running the Group as a percentage of IFRS NAV as prescribed by the Association of Investment Companies
Passing rent
Gross annual rental income currently receivable on a property as at the balance sheet date less any ground rents payable under head leases
Property income distribution ("PID")
Profits distributed to shareholders that are subject to tax in the hands of the shareholders as property income. PIDs are usually paid net of withholding tax (except for certain types of tax-exempt shareholders). REITs also pay out normal dividends called non-PIDs
RCF
Revolving credit facility
Real Estate Investment Trust ("REIT")
A listed property company that qualifies for, and has elected into, a tax regime that is exempt from corporation tax on profits from property rental income and
Scope 1 and 2 emissions
GHGs released directly and indirectly from the Group e.g. company offices, company vehicles and energy purchased by the Group
Scope 3 emissions
All other GHGs released indirectly by the Group, upstream and downstream of the Group's business
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
Total accounting return
The movement in EPRA NTA over a period plus dividends paid in the period, expressed as a percentage of the EPRA NTA at the start of the period
Total cost ratio
EPRA cost ratio, excluding one-off costs calculated both including and excluding vacant property costs
The Alternative Investment Fund Managers Regulations 2013 (as amended by The Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019) and the Investment Funds Sourcebook forming part of the FCA Handbook
Weighted average unexpired lease term ("WAULT")
Average unexpired lease term to first break or expiry weighted by contracted rent across the portfolio, excluding development property and land
ENDS
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