We unlock potential,
creating sustainable
space for London to thrive
Great Portland Estates plc
Annual Report and Accounts 2024
Governance
90
Overview
91
Introduction from the Chair
94
The Board
96
Leadership and purpose
100
Engaging with our investors
102
Engaging with our employees
104
Board consideration of stakeholder
interests and s.172(1) matters
108
Division of responsibilities
110
Composition, succession
and evaluation
116
Audit, risks and internal controls
124
Directors’ remuneration report
144
Report of the Directors
146
Directors’ responsibilities statement
Strategic Report – Overview
01
Statement from the Chair
02
An evolving strategy…
03
…underpinned by our values and
commitment to sustainability
04
Creating great spaces
in central London
06
Putting our customers first
12
How we create value
14
Our near-term strategic priorities
16
Our key performance indicators
Strategic Report – Annual review
19
Statement from the Chief Executive
21
Our markets
23
Our development activities
and capex programme
26
Our leasing and Flex activities
28
Our investment activities
30
Our financial results
34
Our portfolio
37
Sustainability
63
Our people and culture
69
Our stakeholder relationships
72
Engaging with our stakeholders
74
Our approach to risk
Financial statements
148
Group income statement
148
Group statement of
comprehensive income
149
Group balance sheet
150
Group statement of cash flows
151
Group statement of changes
in equity
152
Notes forming part of the
Group financial statements
179
Independent auditors’ report
187
Company balance sheet
188
Company statement of changes
in equity
189
Notes forming part of the
Company financial statements
Other information (unaudited)
194
Five-year record
195
Our properties and customers
197
Portfolio statistics
198
Glossary
201
Shareholders’ information
203
Financial calendar
In this report
Cover image: Entrance to Woolyard, SE1.
We believe in the power of people
and partnerships to create exceptional,
sustainable places in London that deliver
for our customers and drive consistent
growth and performance for our investors.
Our spaces are designed and managed
to create a sustainable legacy for our
great city. One that inspires, enriches and
enhances the lives of our customers and
the communities that surround them.
See our website
www.gpe.co.uk
For more information
Statement from the Chair
Committed to London, our true global city
Whilst the macro-economic uncertainty and higher
interest rates impacted our property valuation
and financial performance, we delivered another
strong operating performance as we continue
to evolve our strategy. Moreover, with the return
of the property cycle, and both interest rates
and property yields now likely around their peak,
we are increasingly confident that our activities
will drive attractive shareholder returns in the
medium term.
We have maintained our absolute focus on our true
global city and delivering our purpose: to unlock
potential, creating sustainable space for London
to thrive. We are meeting the growing needs of
our customers, delivering magnetic office spaces
for their people and communities in amenity rich,
well connected central London locations.
Operating well in an increasingly supportive market
With the market further bifurcating between the
best and the rest over the year, we increased our
commitments to develop more best-in-class HQ
buildings and create more smaller fitted Flex spaces
with higher service levels, whilst also adding to
our portfolio of opportunity through acquisitions.
Our leasing has remained strong with rents growing
as supply remains tight, and we expect further
growth from here.
Strengthening our commitments to net zero
We have strengthened our commitments to
decarbonise our business, updating our Roadmap
to Net Zero whilst innovating and embracing
the circular economy. And with customers at the
heart of both our activities and our values, we again
delivered a leading office Net Promoter Score
and further enhanced our organisational structure.
Through promoting from within and the targeted
recruitment of new talent, the Board has ensured
we have the right team and capabilities to deliver
our strategic ambitions and to progress our
diversity and inclusion agenda.
Looking ahead, we are well positioned to capitalise
on the compelling new investment opportunities
that are emerging and can look to the future
with confidence.
Our Strategic Report, on pages 01 to 88, has been
reviewed and approved by the Board.
On behalf of the Board
Richard Mully
Chair
22 May 2024
“We are well positioned to capitalise on the compelling
new investment opportunities that are emerging and
can look to the future with confidence.”
Richard Mully Chair
Strategic Report – Overview
01
Annual Report 2024 Great Portland Estates plc
An evolving
strategy…
Our business model
In order to unlock potential, we apply our specialist skills to
reposition properties to produce high quality, sustainable spaces,
with high levels of service that our customers demand.
Our near-term priorities
In the near term, our priorities include
creating exciting sustainable spaces
for our customers, whether through
expanding our flexible offerings or
delivering on our ambitious development
programme, as well as enhancing our
portfolio through acquisitions and sales.
See more on our near-term strategic
priorities on pages 14 and 15
See more on how we create value on pages 12 and 13
Customer First:
partnering with our
customers to meet
their evolving needs
Flex
spaces
Smaller fitted
units, often with
higher service
levels
Flex
Partnerships
Fully
Managed
Fitted
Ready to Fit
For businesses
which want to fit out
the space themselves
Fully furnished,
well-designed
workspaces
Fitted space where
GPE handles all
day-to-day running
of the workplace
Delivered by
desk or room
HQ
repositioning
Delivering large,
best-in-class
HQ buildings
Two complementary,
overlapping products
Four core office solutions
See more on HQ
repositioning on
page 23 and 24
See more on our leasing
and Flex activities on
page 27
Our purpose
We unlock potential, creating
sustainable space for London to thrive.
Our strategic principles
Our strategy is underpinned
by a set of clear principles:
100% central London
Reposition properties
Match risk to cycle
Low financial leverage
Disciplined capital management
Sustainability: an imperative
Customer First
Acquire
Operate & manage
Recycle
Reposition
02
Great Portland Estates plc Annual Report 2024
One year
2024
2023
Portfolio valuation1
£2.33bn
£2.38bn
IFRS NAV & EPRA NTA per share
624p
757p
Loss after tax
£(307.8)m
£(163.9)m
Total Accounting Return (TAR)
(15.9%)
(7.8%)
Total Shareholder Return (TSR)
(21.3%)
(27.3%)
As is usual practice in our sector, we use alternative performance
measures (APMs) to help explain the performance of the business. These
include quoting a number of measures on a proportionally consolidated
basis to include joint ventures, as it best describes how we manage the
portfolio, like-for-like measures and using measures prescribed by EPRA.
The measures defined by EPRA are designed to enhance transparency
and comparability across the European real estate sector. Reconciliations
of APMs are included in note 9 of the financial statements.
1. Includes share of joint ventures.
2. ERV at 31 March 2023.
Our financial performance
IFRS
net assets
£1.6bn
2023: £1.9bn
Customer satisfaction
(Office NPS Score)
+30.2
2023: +44.0
EPRA
Loan to Value1
32.6%
2023: 19.8%
Employee engagement
index (EEII)
74%
2023: 84%
New leasing deals
premium to ERV2
+9.1%
2023: +3.3%
Vacancy rate1
1.3%
2023: 2.5%
Dividend per share
12.6p
2023: 12.6p
Committed Flex space
503,000
sq ft
…underpinned by our values and
commitment to sustainability
See more on our financial results on pages 30 to 33
Our values
Our values define who we are and how we act, and are at the heart of what we do:
Highlights
See more on our people and culture on pages 63 to 68
Our approach to sustainability
Creating sustainable spaces sits at the heart of our purpose. We are:
See more on sustainability on pages 37 to 62
Integrating
climate resilience
across our
business
Decarbonising
our business to
become net zero
by 2040
Putting health
and wellbeing
front and centre
Creating a lasting
positive social
impact in our
communities
Strategic Report – Overview
03
Annual Report 2024 Great Portland Estates plc
R I
V
E R
T H
A
M E
S
P I C C A D I L LY
PA R K L A N E
B A K E R S T
G L O U C E S T E R P L
M A R Y L E B O N E R D
E U S T O N R D
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T H E O
B A L D S R D
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T O T
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G R O S V E
N O
AY L I
S
R
D
B U C K
I
N
G
H
A M
G
Leicester
Square
Leicester
Square
Covent
Garden
Covent
Garden
Holborn
Holborn
Chancery Lane
Chancery Lane
Piccadilly
Circus
Piccadilly
Circus
Green
Park
Green
Park
Goodge
Street
Goodge
Street
Bond
Street
Bond
Street
Marble
Arch
Marble
Arch
Hyde Park
Corner
Hyde Park
Corner
Oxford
Circus
Oxford
Circus
Regent’s
Park
Regent’s
Park
Great
Portland
Street
Great
Portland
Street
Euston
Square
Euston
Square
Euston
Euston
Russell
Square
Russell
Square
Waterloo
Waterloo
Westminster
Westminster
Temple
Temple
St James’s
St James’s
Charing
Cross
Charing
Cross
Embankment
Embankment
Baker
Street
Baker
Street
Warren
Street
Warren
Street
Tottenham
Court Road
H Y D E PA R K
H Y D E PA R K
G R O S V E N O R
S Q U A R E G A R D E N
G R O S V E N O R
S Q U A R E G A R D E N
C A V E N D I S H
S Q U A R E
C A V E N D I S H
S Q U A R E
P O R T M A N
S Q U A R E
P O R T M A N
S Q U A R E
H A N O V E R
S Q U A R E
H A N O V E R
S Q U A R E
R U S S E L L
S Q U A R E
R U S S E L L
S Q U A R E
B E D F O R D
S Q U A R E
G A R D E N
B E D F O R D
S Q U A R E
G A R D E N
L I N C O L N ’ S
I N N F I E L D S
L I N C O L N ’ S
I N N F I E L D S
I N N E R T E M P L E
G A R D E N S
I N N E R T E M P L E
G A R D E N S
J U B I L E E
G A R D E N S
J U B I L E E
G A R D E N S
B E R K E L E Y
S Q U A R E
B E R K E L E Y
S Q U A R E
R E G E N T ’ S PA R K
R E G E N T ’ S PA R K
G R E E N PA R K
G R E E N PA R K
S T J A M E S ’ S
PA R K
S T J A M E S ’ S
PA R K
S T J A M E S ’ S
S Q U A R E
S T J A M E S ’ S
S Q U A R E
S O H O
S Q U A R E
S O H O
S Q U A R E
M AY FA I R
C O V E N T
G A R D E N
S O U T H B A N K
H O L B O R N
B L O O M S B U R Y
F I T Z R O V I A
M A R Y L E B O N E
Portfolio valuation1
£2.3bn
2023: £2.4bn
Rent roll1
£107.5m
2023: £106.4m
Property sq ft2
2.7m sq ft
2023: 2.6m sq ft
Our portfolio1
1. Including share of joint ventures.
2. Includes joint ventures.
Mount
Royal
183/190
Tottenham
Court Road
95/96
New Bond
Street
Hanover
Square
Elm Yard
Wells
& More
23/24
Newman
Street
Walmar
House
200 & 214
Gray’s Inn
Road
103/113
Regent
Street
1 Newman
Street &
70/88 Oxford
Street
7/15
Gresse
Street
35
Portman
Square
Pollen
House
Kingsland
House
48/54
Broadwick
Street &
16 Dufour’s
Place
31/34
Alfred
Place
The
Piccadilly
Buildings
Elsley
House
Kent
House
Orchard
Court
Carrington
House
141
Wardour
Street
Soho Square
Estate
See more
on page 11
Creating great spaces
in central London
5%
4%
3%
60%
18%
10%
Ready to fit
Retail
Fully managed
Flex Partnerships
Fitted
Other
04
Great Portland Estates plc Annual Report 2024
FA
R R
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D
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S
T
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YA L M I N T S T
N E W R D
K I N G S L
A
N
D R D
H
A C K N E Y R D
Old
Street
Old
Street
Farringdon
Farringdon
Blackfriars
Blackfriars
St Paul’s
St Paul’s
Bank
Bank
Mansion
House
Mansion
House
London
Bridge
London
Bridge
Borough
Borough
Southwark
Southwark
Barbican
Barbican
Moorgate
Moorgate
Tower
Hill
Tower
Hill
Fenchurch
Street
Fenchurch
Street
Liverpool
Street
Liverpool
Street
Aldgate
Aldgate
Aldgate East
Aldgate East
Whitechapel
Whitechapel
Bethnal
Green
Bethnal
Green
Shoreditch
High Street
Shoreditch
High Street
Monument
Monument
W A P P I N G
G A R D E N S
W A P P I N G
G A R D E N S
W E A V E R S
F I E L D S
W E A V E R S
F I E L D S
S O U T H W A R K
C L E R K E N W E L L
S H O R E D I T C H
W H I T E C H A P E L
W A P P I N G
B E T H N A L
G R E E N
B A R B I C A N
C I T Y O F
L O N D O N
North of Oxford Street
Rest of West End
£870.3m
£849.6m
£306.7m
£213.9m
£90.7m
City
Southwark
Midtown
Value
Locations
Office
Retail
Residential
£1,838.3m
£485.7m
£7.2m
Value
Business mix
100% central London,
with 24% in our
HQ development or
Flex refurbishment
programme
37%
37%
4%
9%
13%
79%
21%0%
Buildings providing Flex space
North of Oxford Street
Rest of West End
City
Midtown
Southwark
2 Cathedral
Street
City
Tower
Woolyard
New City
Court
The Hickman
& Challenger
House
Bramah
House
2
Aldermanbury
Square
6
St Andrew
Street
Minerva
House
See more on
pages 8 and 9
Strategic Report – Overview
05
Annual Report 2024 Great Portland Estates plc
Greater
choice.
See more on page 07
Trusted
partners.
See more on page 10
Driving
innovation.
See more on page 08
Future
London.
See more on page 11
Putting our
customers first
We aim to help our customers thrive,
by designing, creating, managing and
owning market-leading, sustainable
workspaces, delivering personal customer
experiences every single day.
06
Great Portland Estates plc Annual Report 2024
As customers increasingly demand the very best, sustainable spaces,
and discount the rest, we are shaping our spaces accordingly. We know
every business is different, so we aim to provide a choice of premium
spaces that allow our customers to take the option that best suits
their business needs.
Across our diverse London portfolio, our customers can choose to take
office space as Ready to Fit, or delivered flexibly on a Fitted or Fully
Managed basis, helping to make life easier and hassle free. Whilst our
spaces are many and varied, they are all of a high quality, as we recognise
that second best is no longer in demand.
Our leasing success this year demonstrates that this approach is working.
We signed 66 new leases generating £22.5 million in annual rent. The
rents achieved were 9.1% ahead of the March 2023 ERV, as our customers
recognise the value of the quality of space we are delivering. Looking
ahead, GPE is well-placed to continue this success with a deep pipeline
of buildings that will ensure we continue to deliver best-in-class spaces
over the coming years.
See more on pages 26 and 27
Greater
choice
Strategic Report – Overview
07
Annual Report 2024 Great Portland Estates plc
We are committed to embedding innovative ways of working
throughout our development process to help benefit the local
environment, reduce our carbon footprint and have a positive
impact on the communities in which we work.
At Minerva House, SE1, we are working with our partners Morrisroe
and Multiplex to create a best-in-class riverside workspace,
located on the Southbank, right in front of the River Thames.
Originally constructed in the 1980s, the six-storey building sits
opposite Southwark Cathedral and Borough Market, an iconic
location, that is surrounded by public realm.
We aim to retrofit and refurbish the existing building, maintaining
over 70% of the existing fabric, together with introducing innovative
ways of working that will further reduce the overall embodied
carbon impact of the development. As part of our activities, 20 tonnes
of glass will be salvaged from site and used in the production of
new glass; this is one of the first schemes in the country to participate
in this truly circular and innovative process.
Minerva House is also the first private development on the Thames
to utilise a barge to remove materials from site during the first phase
of the development. This pioneering approach will reduce the total
number of heavy goods vehicles coming to site by 65% during the
deconstruction phase, removing waste from an area with very high
footfall, as well as reducing noise and air pollution in a congested,
pedestrian heavy environment.
See more on page 24
Driving
innovation
08
Great Portland Estates plc Annual Report 2024
Our innovative approach of utilising the river will benefit the
local community by reducing pollution and vehicle numbers, and
managing road safety in a congested central London location.
Strategic Report – Overview
09
Annual Report 2024 Great Portland Estates plc
Trusted
partners
We believe in the power of people and partnerships to
create exceptional, climate-conscious places that deliver
for our customers. In order to create space for London
to thrive, we have a responsibility to ensure that we have
a long lasting positive impact on the communities in
which we work.
This year we continued to support our charity partnership
with XLP by organising a series of charity challenges during
our inaugural community week. More than 120 GPE team
members came together to undertake numerous activities,
including: completing the National Three Peaks challenge
in 24 hours, trekking 42km along the South Downs way,
walking a marathon through London’s Royal Parks,
braving a tandem skydive from 13,000 ft and community
volunteering. The team successfully raised over £82,000
and surpassed our initial target of £75,000.
We support XLP because it empowers young people
from disadvantaged backgrounds to complete their
education, avoid anti-social behaviour and ultimately
become independent and confident contributors within
their communities. Last year, the organisation helped
4,000 young people and their families. Our partnership
with XLP is designed to help us reach our shared goal of
creating social value in London, creating a positive impact
in the areas where we operate and improving the lives
of its residents and wider community.
See more on pages 50 and 51
Skye from Newham is one of XLP’s young musicians. She’s now
working in the music industry and on the charity’s youth board.
10
Great Portland Estates plc Annual Report 2024
Our recent acquisition of the Soho Square Estate, W1 represents
a fantastic opportunity to transform a strategic West End
freehold site into a new best-in-class headquarters building
perfectly suited to the demands of the modern customer.
The 0.5 acre site is located at the eastern end of Oxford Street, in a
area we know well, just 100 metres from the new Tottenham Court
Road Elizabeth line station. The existing collection of buildings are
at the end of their economic life and the site benefits from planning
consent to deliver a brand new building spanning the entirety of
the site. Ahead of an anticipated start in Q1 2025, we intend to
improve the building design by adding new area and improving the
quality of space to further increase its attractiveness to prospective
customers. Once complete, the building will provide 100,300 sq ft
of new Grade A offices on Soho Square and prime retail space on
Oxford Street. The office building will be arranged over basement,
lower ground, ground and eight upper floors, with multiple private
terraces and a communal roof terrace and will deliver best-in-class
sustainability metrics.
The Soho Square Estate is a great addition to a development
pipeline that is already stacked with future opportunity. Our plans
will greatly improve the local environment, provide support for
London’s economy and deliver a lasting sustainable impact
on London’s future.
See more on pages 24 and 25
Future
London
Strategic Report – Overview
11
Annual Report 2024 Great Portland Estates plc
How we create value
In order to unlock potential, we apply our specialist skills to reposition properties to
produce high quality, sustainable spaces that our customers demand. Our disciplined
approach to allocating capital shapes our activities, ensuring we operate in tune
with London’s cyclical property markets to maximise returns.
Our stakeholder relationships
– Intense, supportive, customer-focused approach to
understand customers’ needs. Utilising regular customer
feedback to create bespoke action plans.
– Strong levels of customer satisfaction.
– Open relationship with debt and equity providers based
on clear investment case and transparent disclosure.
– Deep relationships with key suppliers (including contractors)
and joint venture partners.
– Positive engagement with local communities,
local authorities and planning departments.
Our portfolio and sustainability
– 100% central London, in attractive locations well served
by local infrastructure with enduring customer demand.
– Located in markets with high barriers to entry playing to our strengths.
– Continual repositioning of buildings to enhance the customer
experience, improve sustainability performance, futureproof
value and enhance the environment in which they are located.
– Measures to improve the climate resilience of our buildings
integrated within the design of our spaces.
– Positioned for future growth; 24% of portfolio in our HQ
development or Flex refurbishment programme. Potential
c.£0.5 billion commitment across seven on-site HQ development
and Flex conversion schemes.
– Disciplined capital allocation approach;
must be accretive to existing portfolio.
– Tired, inefficient properties, often with
poor EPC ratings, with angles to exploit.
– Attractive central London locations
supported by infrastructure
improvements/local investment.
– Discount to replacement cost
and typically off-market.
– Off low rents and low capital
values per sq ft.
– Optionality: flexible business plans.
– Opportunity to enhance sustainability
credentials and grow our Flex portfolio.
– Ability to deliver profit on cost on
development schemes of 12.5%-20.0%
and an ungeared IRR of 10.0%-15.0%.
See more on our investment activities and Flex acquisition criteria
on pages 28 and 29
– Through lease restructuring,
the delivery of flexible space,
refurbishment or redevelopment.
– Deliver high quality sustainable
spaces into supportive markets that
meet and exceed customer needs.
– Manage risk through pre-letting,
joint ventures and forward sales.
– Deliver climate-resilient buildings that
integrate market-leading sustainability
standards, flexibility, amenity, wellbeing
and technological innovation.
– Enhance the local environment
and public realm.
– Deliver a lasting positive social impact
in our communities.
See more on our development activities
on pages 23 to 25
We apply our specialist skills to reposition properties…
…to create value
1,450hrs
Hours donated
to XLP
-12.1%
Like-for-like portfolio
valuation decline1
100%
BREEAM ’Excellent’
completions
£338k
Contributed to our
Decarbonisation Fund
See our KPIs on pages 16 and 17
See more on our stakeholder relationships
on pages 69 to 72
See more on our portfolio and sustainability
on pages 34 to 62
Sustainability touches everything we do
…underpinned by key resources and relationships…
Acquire
Reposition
+30.2
Office Net Promoter
Score, outperforming
the industry average
of +6.9
£1.5m
GPE social value
created
During the year, our
acquisitions included
141 Wardour Street, W1
(above) to add to our Fully
Managed office offer
and the Soho Square
Estate which has been
added to our near-term
development pipeline.
Repositioning
buildings is key to
adding value. This year,
we commenced the
redevelopment of
French Railways House
& 50 Jermyn Street,
SW1 which will add
67,600 sq ft of best-in-
class, office and retail
space near St James’s
and Piccadilly.
12
Great Portland Estates plc Annual Report 2024
Our people and culture
– Experienced management team supported by specialist in-house
Portfolio Management, Customer Experience, Development,
Investment, Leasing and Finance teams and support functions.
– Entrepreneurial, collegiate and inclusive culture based on
strong values with disciplined approach to risk management.
– Reward linked to purpose, strategy and values with close
alignment with stakeholders to deliver value and outperformance.
– Effective governance structure.
– Positive employee engagement.
Our capital strength
– Consistently strong balance sheet and conservative
financial leverage.
– Low cost, diversified debt facilities and plentiful liquidity.
– Evolving debt book to align with our values via
ESG-linked financing.
– Sustainable Finance Framework in place.
– Disciplined allocation of capital through analytical,
risk adjusted IRR decision making.
– Support low and progressive dividend policy.
– Tax efficient REIT structure.
See more in our investment activities
on pages 28 and 29
See more about our customers
on pages 69 and 70
– Deliver a ‘Customer First’ approach,
providing efficient, resilient, healthy and
innovative space to meet the demands
of modern customers.
– Provide a greater choice of spaces to appeal
to a variety of customer needs, whether on
a Ready to Fit, Fitted or Fully Managed basis.
– Constantly evolving to lead emerging trends,
including the use of technology to enhance
the customer experience.
– Detailed business plan for every property
reviewed quarterly to maximise total returns
over our cost of capital.
– Strong sustainability credentials to maximise
customer appeal, enhance the long-term
property value and reduce obsolescence.
– Disciplined capital recycling through
the sale of properties where we
have executed our business plans,
projected returns are insufficient
or where we are able to monetise
our expected future profits.
– Create a legacy of high quality,
sustainable buildings to benefit
London and the communities
in which they are located.
– Reinvest proceeds into higher
return opportunities.
– Return excess equity capital to
shareholders when reinvestment
opportunities are limited.
98%
Staff survey
participation rate
88%
Proud to work at GPE
74%
Employee
Engagement Index
624p
EPRA NTA NAV
32.6%
EPRA loan to value1
£633m
Cash and undrawn
facilities1
See more on our culture and people
on pages 63 to 68
See more on our capital strength
on page 32
1. Includes share of joint ventures.
Operate & manage
Recycle
Our customers are
demanding the very
best spaces for their
people, together
with greater levels of
service and amenity.
Therefore, the spaces
we deliver and the
services we provide are
evolving to meet these
growing demands.
During the year,
we made a number
of small sales
totalling £13.4 million,
including 6 Brook
Street, W1 (above).
Looking forward,
we anticipate further
sales in the near term.
Strategic Report – Overview
13
Annual Report 2024 Great Portland Estates plc
Our near-term strategic priorities
We have a clear strategic focus that enables us to deliver attractive long-term value
to our stakeholders. In the near term, our priority is to create exciting sustainable spaces
for our customers, whether through expanding our flexible offerings or delivering on our
ambitious development programme.
Priorities for 2023/24
1 Progress
sustainability
and innovation
agenda
2 Enhance
portfolio through
acquisitions
and sales
3 Deliver on our
Flex ambition
See more on pages 37 to 62
See more on pages 28 and 29
See more on pages 25 to 27
Key initiatives
– Complete new metering initiative
to transform capture of energy
usage across the portfolio.
– Deliver climate change Transition
Plan by March 2024 in line with
UK legislation.
– Implement initiatives under
Innovation Strategy and explore
emerging technologies including
artificial intelligence.
– Acquire Flex opportunities to
help deliver growth ambition.
– Supplement development pipeline
through acquisition.
– Maintain discipline of capital recycling
through the sale of properties where
we have executed our business
plans and prospective returns are
insufficient. Recycle proceeds
into development programme.
– Explore opportunities to JV
larger developments.
– Deliver Flex growth to more
than one million sq ft over next
five years, both organically
and through acquisitions.
– Evolve and embed new marketing
messages on Flex key selling points.
– Commence the refurbishment of
6 St Andrew Street, EC4, Alfred Place,
WC1 and Egyptian House, SW1.
Progress in year
– Development of real time
analytics dashboard to increase
business pace and agility.
– Further delivery of CRM platform
to support the scaling of our
Fully Managed space.
– Refreshed Roadmap to Net Zero.
– Significant circular economy
project to reuse steel underway
at 2 Aldermanbury Square, EC2.
– Metering project well underway.
– Two Flex acquisitions: 141 Wardour
Street, W1 and Bramah House, SE1
totalling £53 million.
– Soho Square Estate acquired for
new HQ development for £70 million.
– Two small sales completed realising
£13.4 million in proceeds.
– Flex space grown to 503,000 sq ft,
or 23.5% of office portfolio.
– Flex marketing collateral launched.
– Refurbishment underway at
6 St Andrew Street, EC4,
Egyptian & Dudley House, SW1
Alfred Place, WC1 and Kent House, W1.
– Bramah House, SE1 and
141 Wardour Street, W1 acquired.
Priorities for 2024/25
Unchanged
Unchanged
Unchanged
Key initiatives
– Develop multi-year, business
wide digital transformation plan.
– Launch and embed our Roadmap
to Net Zero v2.0.
– Deliver Transition Plan in line
with sector guidance published
in Q1 2024, including double
materiality review.
– Utilise steel recovered from
2 Aldermanbury Square in French
Railways House & 50 Jermyn Street, SW1.
– Deploy proceeds from rights issue.
– Acquire Flex opportunities to help deliver
one million sq ft growth ambition.
– Supplement development pipeline
through acquisition.
– Maintain discipline of capital recycling
through the sale of properties where
we have executed our business
plans and prospective returns are
insufficient. Recycle proceeds into
development programme and
new acquisition opportunities.
– Complete refurbishments of
31/34 Alfred Place, Kent House
and 6 St Andrew Street.
– Maintain sector leading NPS score
for Fitted and Fully Managed spaces.
– Acquire Flex opportunities to
help deliver growth ambition.
– Achieve £15.0 million of annualised
Fully Managed NOI by 31 March 2025.
14
Great Portland Estates plc Annual Report 2024
Priorities for 2023/24
4 Embed our
‘Customer First’
approach
5 Deliver and lease
the committed
schemes
6 Prepare
the pipeline
See more on pages 69 and 70
See more on pages 23 to 25
See more on pages 23 to 25
Key initiatives
– Roll out customer service proposition
and training to all GPE employees
and service partners.
– Establish KPIs, along with greater
engagement from customers,
to measure success of the
Customer First programme.
– Deliver roll-out of phase 2 of CRM.
– Progress the redevelopment
of 2 Aldermanbury Square, EC2
to time and budget.
– Maintain close relationship with
Clifford Chance to help deliver
a building that meets its needs.
– Deliver the refurbishment of
6 St Andrew Street, EC4 by Q3 2024,
prepare marketing campaign
for launch.
– Resolve planning status at
New City Court and Minerva House,
both SE1.
– Commence the redevelopment
of French Railways House
& 50 Jermyn Street, SW1.
– Prepare Minerva House for start
on-site.
Progress in year
– Customer service proposition
rolled out to GPE workforce,
with positive feedback.
– New CRM capability to cover reporting
on leasing funnel and tracking customer
success and complaints stories.
– Established new customer insights
and strategy function as well as
new role focused on customer
relationship management.
– Customer First added to GPE values
and senior management objectives.
– 2 Aldermanbury Square on time and
budget with expected completion,
and hand-over to Clifford Chance
in Q1 2026.
– Positive engagement with Clifford
Chance, with confirmation that
they have not taken up their option
to hand space back to GPE.
– Refurbishment underway at
6 St Andrew Street, with completion
expected in Q4 2024 and marketing
underway.
– Planning permission granted
at Minerva House.
– Planning permission refused
at New City Court, alternative
business plans underway together
with early engagement with
Southwark Council.
– Development commitment
made at Minerva House, SE1,
anticipated completion Q4 2026.
Priorities for 2024/25
Unchanged
Unchanged
Unchanged
Key initiatives
– Roll-out GPE service proposition
and standards to service partners,
agents and contractors.
– Retail customer journey mapping.
– Embed Customer Relationship
Engagement Strategy and team
with the ambition to drive increased
renewals and retention.
– Further develop customer
insights function.
– Seek pre-letting opportunities at
Minerva House, SE1 and French Railways
House & 50 Jermyn Street, SW1.
– Remain on track for delivery of
2 Aldermanbury Square, French
Railways House & 50 Jermyn Street
and Minerva House.
– Complete refurbishment of
6 St Andrew Street, 141 Wardour
Street and 31/34 Alfred Place
and commence leasing.
– Prepare Soho Square Estate
for redevelopment.
– Reconfigure plans for the
redevelopment of New City Court,
SE1 and submit revised planning
application to Southwark Council.
– Progress refurbishment plans for
The Courtyard, WC1 following
exchange of contracts in April 2024.
Strategic Report – Overview
15
Annual Report 2024 Great Portland Estates plc
Our key performance indicators
Rationale
TSR is a standard measure of shareholder value creation over
time. It measures the movement in a company’s share price
plus dividends expressed as an annual percentage movement.
Commentary
TSR of the Group has been benchmarked against the
TSR of the FTSE 350 Real Estate Index (excluding agencies).
The TSR of the Group was -21.3%1 for the year, compared
to +10.7% for the benchmark given improved investor
sentiment for non-office based real estate companies.
See more on page 140
Rationale
TAR is measured as absolute EPRA NTA per share growth
(the industry standard measure of a real estate company’s
success at creating value) plus any ordinary dividends paid,
expressed as a percentage of the period’s opening EPRA NTA.
Commentary
TAR was -15.9% for the year. The TAR performance was
driven by the impact of elevated interest rates on the
property valuation.
See more on pages 30 to 33 and note 9
to the financial statements
Total Accounting Return
% (TAR)
Total Shareholder Return
% (TSR)
Our KPIs are driven by our
strategic priorities:
LTIP
Performance criteria for Executive Directors’ and
certain senior managers’ long-term incentives
plans (LTIP).
Exec Bonus
Performance criteria for Executive Directors’ and all
employees’ annual bonuses save that the employee
engagement and diversity measures do not apply
to most colleagues to avoid conflicts of interest.
The previously reported relative Total Property Return
metric ceased to apply to bonuses following the
adoption of the 2023 Directors’ remuneration policy
and is no longer reported on as KPI in this section.
Our key performance indicators (KPIs) measure the principal metrics that we focus on to
run the business, and they, along with the key measures that drive them, help determine
how we are remunerated. Over the longer term, we aim to outperform our benchmarks
through successfully executing our strategy. Over the last 12 months, the challenging macro-
economic environment impacted absolute property returns and real estate share prices.
However, our strong operating performance helped us outperform many of our benchmarks.
(7.2)
1.7
6.6
Benchmark (italics)
(12.4)
21.1
2020
2021
2022
2023
2024
(21.3)
(27.3)(28.5)
20.8
10.7
-10
-20
30
10
20
-30
0
8.8
(8.8)
3.2
2020
2021
2022
2023
2024
(15.9)
(7.8)
0
-5
20
10
15
-10
-15
-20
5
4.0
4.0
4.0
3.0
Benchmark (italics)
1
Progress sustainability
and innovation agenda
2
Enhance portfolio through
sales and acquisitions
3
Deliver on our Flex ambition
4
Embed our ‘Customer First’
approach
5
Deliver and lease the
committed schemes
6
Prepare the pipeline
AlI
All six priorities
LTIP
Exec Bonus2
All
LTIP
All
2. For the 2023/24 Annual Bonus, TAR per share is benchmarked against the
relative performance of the FTSE 350 Real Estate Index (excluding agencies).
While a number of companies are yet to publish their financial results,
we anticipate that our TAR for the year underperformed the Index due
to the comparatively stronger performance of other real estate sectors.
1. On a spot basis.
See Directors’ remuneration report
on pages 124 to 143
16
Great Portland Estates plc Annual Report 2024
Scorecard
Measure
Link to shareholder returns
Performance
2023/24 minimum threshold
Optimising financial
performance
(during downturn)
5
1
4
2
3
1. Rent achieved on market
lettings during year vs
ERV (as per CBRE at start
of year) – ‘% beat to
market rent’
Will enhance property
valuations and
maximise income
+9.1%
≥ ERV @ 31 March 2023
2. Vacancy rate at year end
(including completed
development/refurbished
space during year)
Will enhance property
valuations and
maximise income
1.3%
≤ 8.0%
3. Maintain appropriate
liquidity
Underpins ability to acquire
and invest in assets to drive
capital and income returns
£633m
≥ £150m
Transforming the
business and putting
customers first
6
2
5
3
4
1. Hitting planning milestones
in year (combination of
planning submissions and
planning approvals across
entire portfolio)
Enhances property valuations
50%/100%
50% of Major and
50% of Minor in-scope
applications approved
2. Commitments to new
Flex space over the year
Underpins strategy to
expand Flex space in line
with disclosed targets
102,353 sq ft
≥ 30,000 sq ft
3. Market leading
office customer NPS
Underpins strategy, aids
customer retention and
enhances property valuations
+30.2
≥ +20.0
Delivering our
Roadmap to Net Zero
1
5
6
1. Reduction in energy
consumption (targets
set each year against
Roadmap)
Increases attraction of
GPE space driving rents
and enhancing property
valuations
149.7 kWh/m2
≤ 191 kWh/m2
2. All new developments
to be net zero or on
track to be net zero
Underpins HQ repositioning
strategy, customer demand,
capital and income returns
83%
≥ 50%
Personal and
business culture
All
1. Maintaining and nurturing
a positive and inclusive
culture (measured through
employee engagement
and inclusion index survey
scores)
Retaining and attracting
key talent critical to
support growth
74%
≥65%
2. Achievements
against gender and
diversity targets (as
detailed on page 130)
Ensuring diverse talent to
develop and deliver strategy
Progress against
both targets
Improvement on each
target against position
at 31 March 2023
Revised KPIs for 2023/2024
As explained in last year’s Annual Report, given the macro-economic backdrop, the Group has moved to a more target-based
operational scorecard under the revised Directors’ remuneration policy approved by shareholders at the 2023 Annual
General Meeting. The scorecard is designed to motivate management to optimise returns for shareholders by focusing on
clear and measurable objectives to deliver our strategic priorities. Each of the measures is designed to directly or indirectly
drive our financial KPIs and shareholder value in the longer term and form an integral part of the revised Directors’ remuneration
policy to align performance and executive remuneration.
Strategic Report – Overview
17
Annual Report 2024 Great Portland Estates plc
We are integrating climate
resilience across our business
We maintain our ambition to be at the leading edge of sustainable development
Applying climate resilience to our business strategy means we address the transitional risk of climate
change and implement net zero carbon plans for each of our assets. Through our approach, we are
committed to collaborating with all our partners to improve the resilience of our supply chain, and
are constantly looking to embed nature-based solutions to increase biodiversity across our portfolio.
Last year we also repositioned our Statement of Intent ‘The Time is Now’ to ensure we continue to
deliver against our commitments and continue to support the resilience of our London communities.
In this section:
19
Statement from the Chief Executive
21
Our markets
23
Our development activities
and capex programme
26
Our leasing and Flex activities
28
Our investment activities
30
Our financial results
34
Our portfolio
37
Sustainability
63
Our people and culture
69
Our stakeholder relationships
72
Engaging with our stakeholders
74
Our approach to risk
Strategic Report
Annual review
18
Great Portland Estates plc Annual Report 2024
Statement from the Chief Executive
Strong operational performance – strategic focus
Despite the continued macro-economic uncertainty and higher
interest rates impacting our property valuation over the year, we
delivered another strong operational performance. Our excellent
leasing results, low vacancy and positive rental growth again
demonstrated that our offices are in high customer demand,
in a supply constrained market. With these supportive market
conditions, characterised by the sharp bifurcation between
the best spaces and the rest, our clear strategy of delivering
best-in-class HQ buildings and Flex spaces for our customers
means we have both a business and a portfolio which are
well positioned to take advantage.
Positioned to take advantage of return of
the cycle – net buyer for first time since 2013
In this financial year, we added to our portfolio, acquiring
three properties off-market for £122.9 million, including
two Flex acquisitions and one HQ in Soho Square, W1, that
has been added to our development pipeline. With two
small non-core sales, we were a net buyer for the first time in
more than ten years. Since the start of the new financial year,
we have also exchanged contracts to buy The Courtyard, WC1
for £28.6 million in an asset swap deal, adding to our Flex
cluster in Fitzrovia.
We believe the central London investment market is now at or
around its trough and is turning in our favour with real property
values having fallen to 2009 levels, triggered by elevated
inflation and high interest rates. As a result, we fully expect to
add to our growth prospects and have identified a compelling
set of accretive acquisition opportunities. The rights issue,
together with our already strong financial and liquidity
position, will provide further capacity for new investment.
With our strong track record of counter-cyclical investment
and our experienced team, our prospects are appealing.
Strong leasing year – 9.1% ahead of ERV
During the year, we signed 66 new leases, delivering £22.5 million
of new rent, with market lettings 9.1% ahead of the March 2023
ERV. This includes 29 new deals across our Flex spaces, securing
£13.7 million in rent at a 12.3% beat to the March 2023 ERV.
At our Fully Managed spaces, we achieved average rents of
£208 per sq ft, supporting our ambitions for further growth
across our identified central London Flex clusters.
We also had many leasing successes across our retail portfolio,
as the recovery strengthens with West End footfall back to
near pre-pandemic levels and the Elizabeth line enhancing
transport connectivity for shoppers, workers and tourists alike.
We signed 26 retail leases delivering £7.0 million of new rent,
beating the March 2023 ERV by 4.7%.
We value every customer – market leading
NPS and high customer retention
Our well established Customer First approach, putting
customer needs at the centre of everything we do, was
further strengthened this year with the addition of a
new employee value: ‘We value every customer’.
We also continued to deliver a leading Net Promoter Score
of +30.2, significantly ahead of the office industry average
of +6.9, which has supported strong customer retention.
We retained 83% of our customers across the portfolio in the
last 12 months, which helped us maintain our exceptionally
high rent collection rates, securing in excess of 99% of all
rents within seven working days, whilst also keeping our
investment void low at 1.3%.
Rental value growth more than offset by
increased yields – valuation performance impacted
With customers increasingly demanding the very best,
sustainable spaces, they are competing in a market
increasingly starved of new, Grade A supply, putting further
upward pressure on prime rents. Across our portfolio, we saw
a like-for-like increase in rental values of 3.8% over the year,
with our retail rental values up 4.4%. Overall our office rents
were up 3.6%, whilst our Fully Managed office spaces again
outperformed, up 5.2%.
Despite this attractive rental growth, our property values
reduced by 12.1%, reflecting the global impact of higher
interest rates on property yields. However, this reduction
was first half weighted and we believe prime property
yields are now likely around their peak.
The property valuation decline reduced IFRS NAV and EPRA
NTA per share by 17.6% over the year. When combined with
an ordinary dividend maintained at 12.6 pence per share,
our Total Accounting Return was minus 15.9%. Including the
revaluation of the portfolio, we delivered an IFRS loss for
the year of £307.8 million. Diluted EPRA EPS was 7.1 pence,
a decline of 25.3%, primarily driven by the impact of the
higher interest rate environment.
“Our clear strategy of delivering
best-in-class HQ buildings and
Flex spaces for our customers means
we have both a business and a
portfolio which is well positioned
to take advantage of supportive
market conditions.”
Toby Courtauld Chief Executive
Strategic Report – Annual review
19
Annual Report 2024 Great Portland Estates plc
Statement from the Chief Executive continued
More rental value growth to come –
London a true global city
Whilst macro-economic volatility persists, our confidence
and belief in London remains. Unrivalled as one of the
world’s most attractive and diverse mixed-use locations,
London is a true global city. Central London is busy and
office workers have returned, with hybrid working now
the norm. 74% of our portfolio is in the West End and 93%
located close to Elizabeth line stations.
Looking forward, we anticipate supportive rental conditions
for the best spaces and are optimistic for further rental
growth, with portfolio-wide guidance of 3% to 6% over the
next financial year. For prime office space, our guidance
is stronger still at 5% to 10%.
HQ repositioning – two new major commitments
We committed to the redevelopment of French Railways House
& 50 Jermyn Street, SW1, following the agreement of a new
headlease. Our prime office-led scheme on Piccadilly will
provide 67,600 sq ft of new Grade A space and will embrace
the principles of the circular economy. It is expected to
complete in mid-2026 and deliver a profit on cost of 23.7%.
Our latest commitment at Minerva House, SE1, will take full
advantage of its impressive River Thames frontage, creating an
enviable South Bank HQ destination with new public realm
and gardens, whilst delivering outstanding sustainability and
re-use credentials. It is expected to complete in Q3 2026
and deliver a profit on cost of 19.1%.
We have also made significant progress at 2 Aldermanbury
Square, EC2. Clifford Chance LLP have leased the entirety of
office space (321,100 sq ft) and our development works are
progressing well, where we are substantially increasing the
size of the building (up from 176,000 sq ft) and completion
is expected in early 2026. Preparations for our two other
near-term schemes continue, which, together with our
committed schemes, will deliver 0.8 million sq ft of prime,
predominantly office space with exemplary sustainability
credentials, along with £76 million of ERV following our
proposed £0.8 billion of total investment.
Flex spaces – four schemes on-site and
on track for growth to one million sq ft
We have recently committed to the refurbishment of
141 Wardour Street, W1 which will provide 29,900 sq ft of new
Fully Managed led space in the heart of Soho. The building
will form part of our Soho Flex cluster, close to our successfully
established 16 Dufour’s Place, W1 and will complete next year.
Our three other on-site Flex refurbishments are progressing
well, with 6 St Andrew Street, EC4 and 31/34 Alfred Place, WC1
on track to be delivered in Q3 2024, whilst Egyptian & Dudley
House, SW1 will complete in 2025.
Together with good progress across our various on-floor
refurbishments, we have increased our committed Flex space
to 503,000 sq ft, as we advance towards our one million sq ft
ambition. We expect that more than 75% of our Flex footprint
will be delivered as Fully Managed spaces, generating
more than £75 million of net operating income. To deliver
on these ambitions, we have enhanced our organisational
structure through promoting from within and the targeted
recruitment of new talent.
Sustainability: updated Roadmap to Net Zero
and embracing the circular economy
Last year, we updated our approach to climate resilience and
our sustainability Statement of Intent. This year, we updated
our Roadmap to Net Zero, increasing the scope and ambition
of lowering our carbon emissions and aiming to deliver a 90%
reduction in Scope 1, 2 and 3 emissions to reach net zero by
2040. Alongside these ambitious targets, we have continued
to embrace the principles of the circular economy across our
development projects, with market leading steel and glass
reuse projects commenced during the year.
Outlook
We are pleased to report on another year of strong
operational performance. Our appealing blend of best in
class HQ offices and Fully Managed Flex spaces, all in central
London’s undersupplied markets, is proving attractive to
customers, enabling us to beat the valuer’s ERV estimates
by 9.1% on all signed leases, the highest margin since 2012
and by 11.1% across our office lettings. Today, our portfolio
is effectively full and, having delivered ERV growth towards
the top end of last year’s guidance, we have upgraded our
forecast for this year to 5% to 10% for our prime offices.
We remain strong believers in London’s long-term prospects;
whilst its occupational markets, particularly for centrally located,
Grade A space continue to power ahead with growing demand
and shrinking supply, we believe its investment markets are
at an inflection point; macro-economic effects ushered in a
prolonged period of high inflation and elevated interest rates,
triggering capital value declines of 58% in real terms since 2016,
to levels we last saw after the GFC in 2009. We believe values
are now at or around their cyclical trough and consequently,
we turned net buyer during the year for the first time since 2013,
acquiring £152 million of opportunities since March 2023 at an
average 42% discount to replacement cost.
To enable us to take further advantage of disrupted
investment market pricing, we intend to complete a fully
underwritten rights issue and have exchanged on the acquisition
of The Courtyard, a core West End Flex conversion opportunity.
With an increasing pipeline of potential acquisitions, totalling
circa £1.4 billion and a number of encouraging discussions
ongoing, we can look forward to adding accretive opportunities
to our well-located portfolio. Having completed our asset sales
at more opportune points in the cycle, we will return to selling
once investment markets recover.
In this context, GPE’s prospects are strong; our Flex and
HQ development business streams are both growing with
supportive market conditions, backed up by our market-
leading service to our customers; we expect to add further
opportunities, capturing value in disrupted investment
markets; our teams’ extensive experience of successful
value creation in cyclical markets and our strong balance
sheet will all combine to enable us to generate attractive
shareholder returns.
20
Great Portland Estates plc Annual Report 2024
Our markets
Occupational markets1
– Occupational market active; central London take-up
10.5 million sq ft in year, but down 13.8% from prior year.
– Central London active demand 7.8 million sq ft,
up 16.7% year on year (Knight Frank).
– Availability remains elevated at 25.9 million sq ft,
marginally ahead of 31 March 2023 and remains
45.9% ahead of the ten-year average.
– Space under offer high at 4.1 million sq ft, up from
3.0 million sq ft at 31 March 2023 and above the
ten-year average of 3.4 million sq ft.
– Central London vacancy rate 8.8% at 31 March 2024;
up from 7.8% last year, newly completed vacancy
rate at 1.9%.
– Supply remains tight; availability of space newly
completed or under construction low, at 32.9%
of total stock (8.5 million sq ft).
– Rents for prime spaces to significantly outperform
Grade B rents at +19,1% v -3.5% respectively for the
West End between 31 December 2023 and 2028 (Savills).
Interest rates were elevated over the course of the year, as inflation remained persistently
higher than many had forecast. The resultant upward pressure on property yields more than
outweighed any positive impact from supportive occupational markets, reducing investment
market turnover and lowering property values. Looking forward, the UK has recently emerged
from a shallow recession, the UK GDP outlook is more positive and inflation is abating,
but many macro-economic risks remain.
Investment markets1
– Investment markets challenged given heightened
interest rate environment.
– Office investment deals £5.2 billion in 2024,
down significantly from £11.2 billion in 2023.
– Turnover in Q1 2024 still muted at £1.1 billion.
– We estimate that £3.9 billion of real estate is currently
on the market to buy versus £19.2 billion of equity
demand looking to invest.
– Given elevated global interest rates, prime yields
have risen; CBRE reports prime yields of 4.0%
and 5.75% for the West End and City respectively.
– Prime retail yields 4.25% Regent Street, 4.5% Oxford Street
both stable and Bond Street softened by 25 bps to 3.0%.
The West End
– Office take-up 3.3 million sq ft,
down 32.1% on preceding year.
– Availability 6.4 million sq ft,
up 5.5%.
– Vacancy 4.7%, up from 3.3% at
31 March 2023; vacancy of newly
completed space only 1.1%.
– Prime office rental values
£155 per sq ft at 31 March 2024,
up 10.7% in year.
– Retail vacancy stabilised;
Zone A rents maintained
on key retail streets.
The City
– Office take-up 5.6 million sq ft,
up 13.2% on preceding year.
– Availability 10.4 million sq ft,
down 2.4%.
– Vacancy 11.8%, up from 10.9%
at 31 March 2023; vacancy
of newly completed space
only 2.2%.
– Prime office rental values
£77 per sq ft, up 6.9% in year.
– City space under offer
2.2 million sq ft, the highest
for ten years.
Near-term outlook
We actively monitor numerous lead indicators to help
identify key trends in our marketplace. Over the last year,
our property capital value indicators have improved,
along with a more optimistic outlook for interest rates.
However, risks remain, including the continued macro-
economic uncertainty and ongoing geopolitical tensions.
Today we expect the flight to quality to continue, with
investment demand to support prime yields in the near
term, with potential compression as rents grow and interest
rates settle. In the occupational market, given a strong
leasing and rental performance of the portfolio, our rental
value growth range for the financial year to 31 March 2025
is positive at between 3.0% and 6.0%, predominantly driven
by the positive expected performance of our office portfolio.
1. To 31 March 2024 and sourced from CBRE unless otherwise stated.
Macro-economic backdrop
– IMF estimates global GDP growth to be stable at 3.2%
in both 2024 and 2025.
– UK forecast to grow; 0.9% GDP growth in 2024, or
1.8% p.a. over the next three years, with London expected
to outperform at nearly double for the UK as whole at
0.5% p.a. (Oxford Economics).
– Consumer confidence recovering from 2022 lows,
now at highest level since January 2022.
– Deloitte CFO survey: sentiment among UK CFOs has
risen for the third consecutive quarter, with uncertainty
at a two-and-a-half year low.
– UK composite PMI surveys have improved in Q1 2024
and indicate expansion; >50 at March 2024.
– Inflationary risks abating; UK CPI 3.2% in March 2024,
anticipated to reduce over the remainder of the year.
Strategic Report – Annual review
21
Annual Report 2024 Great Portland Estates plc
The hybrid office
Employees increasingly value the flexibility and convenience
of hybrid working. Therefore, the office needs to offer
employees the best of both worlds, the connectivity they
desire with home working, together with the benefits of
face-to-face collaboration and team building that the office
provides. In this environment, the demand for office space
is no longer solely driven by headcount. Broader business
requirements, workplace policies and employee behaviours
all have an impact.
Improving retail demand
Retail occupational demand improved over the course of 2023,
with footfall up and vacancy rates shrinking across London’s
key shopping streets. Savills reported that vacancy levels on
Oxford Street had fallen to 3.6% at Q4 2023, the lowest level
since 2019. This lack of availability has translated into rental
growth, with prime West End retail rents growing by 9.7% over
the course of 2023. Whilst the economic backdrop remains
challenging, we expect retail sentiment to continue to improve
as domestic disposable incomes return to growth in 2024.
Our response
The workplace must be somewhere that is worth travelling to.
The best offices need to act as a magnet for their workforce,
providing services and amenities that employees cannot get
at home. The quality of the office experience matters. In our
view, the best buildings need to provide flexible work settings,
support the health and wellbeing of employees, promote
sustainability and be more human in scale and connected
to the communities in which they sit. They also need to be
well connected to high quality public transport to minimise
the impact of the commute.
We are well placed to capitalise. Our developments are
perfectly suited to meet this evolving demand and our Flex
offers are increasingly catering to larger corporates that
want additional flexibility, and high levels of service provision,
to help drive employee engagement. Our portfolio is also
centrally located with 93% of our buildings within 800 metres
of an Elizabeth line station.
Our response
We believe in central London’s attraction as a premium retail
destination. Its unique combination of tourist destinations,
flagship stores, selection of restaurants and a deep cultural
offer remains and will continue to attract shoppers from
around the world.
Retail comprises 21% of our portfolio by value. We aim to
provide high quality, modern retail units into locations with
enduring appeal. Accordingly, the bulk of our activities
centre on the prime shopping streets delivering new retail
experiences into locations that benefit from the recently
opened Elizabeth line.
This year, against this backdrop of improved demand,
we completed £7.0 million of retail lettings, 4.7% ahead
of the March 2023 ERV including a significant new letting
with TK Maxx at Mount Royal, W1.
The growing demand for flexible spaces
London has witnessed significant growth in the demand for
flexible office space in recent years. Advances in technology,
the growth in start-up businesses, increased mobility in the
workforce and the rise of the gig economy have helped drive
this growth. A plethora of new suppliers have entered the
market to meet this demand. Flexible spaces have bounced
back quickly as people have returned to the workplace post
pandemic and we expect this growth to continue.
The sustainability premium
The demand for highly sustainable spaces is growing fast.
Customers, together with their employees, are increasingly aware
of their impact on the environment and are prepared to pay a
premium for spaces with the highest sustainability and wellbeing
credentials. CBRE’s Sustainability Index demonstrates this trend,
with energy efficient offices delivering higher total returns
and more resilient performance during the recent downturn.
Sustainability is now a prerequisite for achieving the best rents.
Our response
Whilst for many businesses, securing high quality,
well-located space for longer-term occupation is vital,
we recognise that customers are increasingly seeking
an element of flexibility for some parts of their business.
To meet this growing demand, we have a Fitted offer to
provide dedicated, fully furnished space on flexible terms,
allowing customers to move in and out of the space with
ease. Where our customers want a higher level of service
provision we have a growing Fully Managed offer, which
extends our proposition to provide additional services and
amenity. Interest in these spaces remains high. They typically
let quicker and we are charging a premium for a hassle-free
real estate experience. Over time we expect this to be the
default requirement for spaces of less than 10,000 sq ft.
See more on pages 34 and 69
Our response
Sustainability is becoming an increasing differentiator
and is widening the gap between the best space and
the rest. Therefore, owners of real estate need the expertise
to either create new high quality spaces or retro fit
existing space in line with new and evolving requirements.
Buildings that are not repositioned risk being stranded. We see
this as an opportunity. We are an experienced developer
with a track record of delivering the highly sustainable
buildings that customers demand. We also know how to
reposition assets through refurbishment and renovation.
Furthermore, buildings with poorer sustainability credentials
are a potential avenue for future acquisitions, allowing
us to create value by transforming unloved buildings into
desirable, highly sustainable, prime real estate.
See more on pages 37 to 62
Our markets continued
The nature of demand for our spaces is undergoing a significant transformation
as key themes continue to shape and evolve our markets. These themes are united
by a common thread – the widening gap in demand between the best spaces
and the rest. Against this backdrop, we are well placed to outperform.
22
Great Portland Estates plc Annual Report 2024
Our development activities and capex programme
Despite a challenging backdrop, we made good operational
progress across our development programme. This included
securing planning permission and committing to
Minerva House, SE1, our commitment to the redevelopment
of French Railways House & 50 Jermyn Street, SW1 and the
acquisition of the Soho Square Estate, W1. Today, our capex
programme provides a significant platform for growth,
with a capital commitment across our on-site schemes
of £0.5 billion.
Repositioning our buildings through redevelopment
and refurbishment is a core part of our business model
and presents a significant organic growth opportunity.
Our forecasts suggest that the future supply of new spaces
in London is severely constrained. We estimate that only
3.0 million sq ft p.a. of new space will be delivered on average
over the next four years, in a market where the average
take-up of new space is much greater, at 4.9 million sq ft p.a.
Our significant capex programme is targeted to deliver new
high quality space into these supportive markets through
the delivery of new HQ developments and through the
expansion of our Flex spaces.
Three committed HQ development schemes
Our development works are progressing well at our fully pre-let
2 Aldermanbury Square, EC2, where we are substantially
increasing the size of the building to 322,600 sq ft (up from
176,000 sq ft). Following the careful deconstruction of the
previous building, the structural steel has been extracted and
is being reconditioned for reuse to form the majority of the
structural elements of French Railways House & 50 Jermyn
Street (see below). This pioneering approach will nearly
entirely eliminate the embodied carbon of the steel and help
deliver our second net zero carbon building, after 50 Finsbury
Square, EC2. The scheme also includes a number of public
realm and amenity improvements that will have a positive
impact on the local area and improve accessibility to the
western entrance of the Liverpool Street Elizabeth line station.
Clifford Chance LLP has confirmed that it will be proceeding
to lease the entirety of office space (321,100 sq ft) following
the expiry of their option to hand back the first to fourth floors
of the building. Whilst the development is currently anticipated
to deliver a loss on cost from the commitment date of 12.4%,
given market yield expansion driven valuation declines to date,
from the 31 March 2024 valuation the scheme is expected
to deliver around £30 million of future profit.
At French Railways House & 50 Jermyn Street, SW1, we have
now obtained vacant possession and have commenced the
strip out of the buildings. Our major office-led redevelopment
will provide 67,600 sq ft (up from 54,700 sq ft) of new Grade A
space and is expected to complete in mid-2026. The scheme
is designed to embrace the principles of the circular economy
which includes retaining the existing foundations and basement
and reusing the structural steel from the demolition of
2 Aldermanbury Square, EC2. Once complete, the building
will provide best in class, column free space together with
high-specification amenities including a wellness suite,
private terraces on the upper floors, a communal roof terrace
with panoramic views, as well as the highest sustainability
credentials. We have £95 million cost to come and the scheme
is anticipated to deliver a profit on cost of 23.7%, an ungeared
IRR of 14.5% and a 6.4% development yield.
2023/24 Strategic priorities:
5 Deliver and lease
the committed schemes
6 Prepare the pipeline
Business model
Acquire
Reposition
Operate & manage
Recycle
Operational measures1
2024
2023
Profit/(loss) on cost
3.5%
(2.1%)
Ungeared IRR
8.6%
4.4%
Yield on cost
6.0%
5.4%
Income already secured
32.3%
99.5%
BREEAM Excellent (targeted)
100%
100%
Committed capital expenditure
to come
£498m
£265m
1. Committed HQ developments and Flex refurbishments
at date of report.
Our approach
Upgrading our portfolio through development
using targeted capital expenditure creates sustainable
spaces with improved customer appeal and longevity.
This enhances both rental values and capital returns.
The cyclical nature of central London property markets
means it is critical for us to match this development
activity to the appropriate point in the cycle, delivering
new buildings into a supportive market when quality
space is scarce and demand is resilient. By combining
our forensic analysis of market conditions with
our active portfolio management, we aim to be
opportunistic and flexible when planning the start
and, therefore, completion dates for our schemes.
We have a good track record of matching our activities
to the ebb and flow of London’s cyclical market and
providing spaces that customers want. Today, we have
three committed HQ development schemes and
four Flex refurbishments and a substantial pipeline
of opportunities. As a result, the successful leasing of
these schemes and preparation of the development
programme are key near-term strategic priorities.
“With demand for the best spaces strong,
and the forward-look supply of new
spaces increasingly scarce, our growing
development activity feels well timed
to benefit.”
Andrew White Development Director
Strategic Report – Annual review
23
Annual Report 2024 Great Portland Estates plc
Our development activities and capex programme continued
At Minerva House, SE1, Southwark Council resolved to grant
planning permission for the redevelopment and good
progress has been made to prepare the site to start this year.
We committed to the development in April 2024, and our
plans will take the overall commercial space to 143,100 sq ft,
an increase of approximately 56% on the existing area.
Our proposals will take full advantage of the building’s
river frontage and, by adding additional storeys, we will be
able to create outdoor terraces and amenity space with
commanding views over central London. The refurbishment
will also improve the public realm around the building, creating
new and improved connections through the site as well as
attractive new gardens that will contribute to local greening
and biodiversity and provide space for people to enjoy in the
setting of Southwark Cathedral. Our proposals will retain and
reuse the majority of the existing building’s structure, including
two primary façades and provide market leading sustainability
credentials. The scheme is anticipated to deliver a profit on
cost of 19.1%, an ungeared IRR of 11.7% and a development
yield of 7.0%.
See our case study on pages 08 and 09
In total, across the three on-site HQ schemes we have
committed expenditure to come of £424 million.
Two near-term development schemes
Beyond our three committed schemes, we have a substantial
and flexible pipeline of four uncommitted HQ schemes,
including two schemes in our near-term pipeline.
At our recently acquired Soho Square Estate, W1, we continue
to work up our plans to refine the existing planning consent to
deliver around 100,300 sq ft of new Grade A office and prime
retail space. The redevelopment will provide a best-in-class
HQ office building on Soho Square with flagship retail fronting
Oxford Street, with multiple private terraces and a communal
roof terrace, all adjacent to the Tottenham Court Elizabeth
line station. We anticipate starting on site early next year.
We anticipate that the redevelopment will deliver healthy
returns, with an expected profit on cost of 20.7%, an ungeared
IRR of 10.4% and a development yield of 5.8%.
See our case study on page 11
At New City Court, SE1, we submitted two planning
applications to Southwark Council to redevelop the building,
the first in December 2018 for a 372,500 sq ft scheme, and
a second in April 2021 for a 389,100 sq ft scheme.
Following an appeal for non-determination, in September
2023, we received confirmation that the Planning Inspector’s
report recommended the planning applications were refused
and the Secretary of State agreed with its conclusions.
As a result of the planning decision, we are exploring
the opportunity to reuse and extend the existing building,
combining Fully Managed and Ready to Fit spaces, to create
a renewed building with exemplary sustainability credentials,
amenity provision, flexible spaces and far-reaching views
from large, landscaped roof terraces.
Three committed HQ schemes:
533,300 sq ft
2 Aldermanbury Square, EC2
Size
322,600 sq ft
Construction cost
£302m
Expected completion date
Q1 2026
BREEAM target
Excellent
Distance to Elizabeth line station
250 metres
Computer generated images.
Minerva House, SE1
Size
143,100 sq ft
Construction cost
£136m
Expected completion date
Q1 2027
BREEAM target
Outstanding
Distance to London Bridge station
250 metres
French Railways House & 50 Jermyn St, SW1
Size
67,600 sq ft
Construction cost
£114m
Expected completion date
Q3 2026
BREEAM target
Outstanding
Distance to Elizabeth line station
750 metres
533,300 sq ft
Three committed HQ redevelopments
24
Great Portland Estates plc Annual Report 2024
Commitment to further Flex expansion
In order to expand our Flex office offers, and meet our
ambitious targets for growth, we are on-site at four
refurbishments to provide new dedicated Fully Managed
spaces, as well as converting a significant number of
individual floors across our portfolio.
Four committed Fully Managed refurbishments
We have recently committed to the refurbishment of 141
Wardour Street, W1 which will provide 29,900 sq ft of new Fully
Managed led space in the heart of Soho. 141 Wardour Street
will build on our success to date at nearby 16 Dufour’s Place,
W1, delivering light-filled floorplates of 2,000 to 4,000 sq ft,
terraces on the upper floors and excellent amenity space.
The construction is expected to complete in early 2025
with capex to come of £20 million.
At 6 St Andrew Street, EC4, we started on site in June 2023
to deliver 47,800 sq ft of new Grade A Fully Managed offices.
Our plans include the addition of two new storeys, together
with extensive terracing and significant amenity throughout
the building. We anticipate that the scheme will complete
in Q3 2024, and will cost £16 million to finish.
At 31/34 Alfred Place, WC1, in the heart of Fitzrovia,
we have committed to an extensive refurbishment of the
entirety of the 41,700 sq ft building to provide outstanding
Fully Managed office space. The cost to convert the space
will be £13 million and we anticipate the scheme will be
completed in Q4 2024.
At Egyptian and Dudley House, SW1, we are comprehensively
refurbishing the building to provide 25,600 sq ft of Fully
Managed space. We are infilling lightwells to expand
floorplates, creating new first-floor amenity space and
creating an external terrace with garden to provide
additional amenity and biodiversity. The scheme is expected
to complete in spring 2025 and will cost £25 million to finish.
Together with a number of other conversions, we anticipate
growing our Flex offerings from 503,000 sq ft today to
605,000 sq ft organically. Moreover, we are aiming to add to
this programme through acquisition, as demonstrated by our
recent exchange of contracts to purchase of The Courtyard,
WC1, and are targeting enlarging our Flex offerings to one
million sq ft over the coming years.
How we are positioned
In total, our HQ development and Flex capex programme
provides a strong platform for organic growth. Together,
our seven on-site schemes will deliver 678,000 sq ft of well-
designed, tech-enabled and sustainable space into a market
where prospective supply is increasingly limited. Moreover,
with around £120 million of anticipated profit to come from
these schemes, they will provide a strong foundation to
the Group’s growth in the coming years.
In total, our three committed and two near-term schemes
comprise around £770 million of anticipated capital
expenditure and are expected to deliver 0.8 million sq ft of
best-in-class, highly sustainable space, perfectly placed to
benefit from a market where forward look supply is severely
constrained. With a further three schemes in the medium-term
pipeline, our HQ development programme totals 1.1 million
sq ft and will provide strong growth potential over the
coming years, which we plan to supplement through
further acquisitions.
Two near-term HQ schemes:
270,300 sq ft
Soho Square Estate, W1
Proposed size
100,300 sq ft
Earliest start
2025
Opportunity area
Core West End
Distance to Elizabeth line station
100 metres
New City Court, SE1
Proposed size
c.170,000 sq ft
Earliest start
2026
Opportunity area
Southbank
Distance to London Bridge station
100 metres
c.£120m
Development surplus to come
from seven on-site schemes
Indicative computer generated images.
Strategic Report – Annual review
25
Annual Report 2024 Great Portland Estates plc
Our leasing and Flex activities
With a continued high demand for best-in-class spaces,
we delivered another strong leasing performance.
Supported by our Fully Managed spaces we signed
£22.5 million of new leases, beating rental values by 9.1%.
Our customer retention also remained high at 83%.
During the year, our rental values increased by 3.8% across
the portfolio. Within this, our retail space outperformed our
offices for the first time in a while, with like-for-like retail rental
values increasing by 4.4% compared with a 3.6% increase
in office rental values. Within our offices, our Fully managed
rental values outperformed, increasing by 5.2% on a
like-for-like basis.
With customers increasingly demanding the very best,
sustainable spaces, we expect the trend of the best
spaces outperforming the rest to continue. This supportive
demand in a market starved of new, Grade A supply, means
the occupational market dynamics remain in our favour.
Our rental growth guidance for the next year continues
to remain positive, at 3.0% to 6.0%, with the best spaces
even higher at 5.0% to 10.0%.
See our markets on pages 21 and 22
The key leasing highlights for the year included:
– 66 new leases and renewals completed during the year
(2023: 105 leases), generating annual rent of £22.5 million
(our share: £19.8 million; 2023: £52.8 million), with market
lettings 9.1% ahead of ERV;
– of the new leases signed, five were Fitted and 24 were
Fully Managed space, achieving on average £208
per sq ft on the Fully Managed space, 12.6% ahead of
March 2023 ERV;
– 26 new retail leases securing £7.0 million of rent with
market lettings 4.7% ahead of March 2023 ERV, including
new London flagship store for TK Maxx on Oxford Street;
– 11 rent reviews securing £8.4 million of rent (our share:
£5.8 million; 2023: £6.3 million) were settled at an increase
of 3.3% over the previous rent and 16.7% ahead of ERV
at review date;
– total space covered by new lettings, reviews and renewals
was 401,500 sq ft (2023: 861,200 sq ft);
– the Group’s vacancy rate decreased to 1.3%
(31 March 2023: 2.5%);
– the Group’s rent roll has increased by 1.0% to £107.5 million
following a successful leasing period (not including the
pre-let at 2 Aldermanbury Square, EC2) offset by vacant
possessions ahead of developments; and
– 97% (by area) of the 104 leases with breaks or expiries
in the 12 months to 31 March 2024 were retained (83%),
re-let, or are under offer, leaving 10,200 sq ft still
to transact.
2023/24 Strategic priority:
3 Deliver on our Flex ambition
5 Deliver and lease the
committed schemes
Business model
Acquire
Reposition
Operate & manage
Recycle
Operational measures
2024
2023
New lettings and renewals
£22.5m
£55.5m
Premium to ERV1 (market lettings)
9.1%
3.3%
Vacancy rate2
1.3%
2.5%
ERV growth2
3.8%
2.1%
Reversionary potential2
10.1%
2.1%
Rent collected within seven days3
99.3%
99.5%
1. ERV at beginning of financial year.
2. Including share of joint ventures.
3. For March 2024 quarter.
Our approach
We consider that a close relationship with our customers
is vital to our success. As a result, we manage all aspects
of our property portfolio in-house, enabling us to
continually refine our understanding of what customers
want and how we can meet their needs. We aim to
deliver a premium experience, through our high quality
teams, the energised spaces we provide and high
levels of customer service, all supported by technology.
Our Leasing and Marketing teams ensure the spaces
appeal to market demand and with our Development
team to ensure that vacant possession is achieved
on a timely basis ahead of key development starts,
wherever possible relocating customers to other
buildings within our portfolio.
Our portfolio managers, supported by our Workplace
and Customer Experience teams, administer a portfolio
of approximately 262 customers, from a diverse range
of industries across 38 buildings. This diversity limits
our exposure to any one customer or sector, with our
20 largest customers at 31 March 2024 accounting
for 38.2% (2023: 39.4%) of our rent roll.
“The fundamentals in our leasing markets
remain strong. We have delivered another
strong leasing year, with rents 9.1%
ahead of the valuer’s estimate. With this
success it reaffirms our confidence in
our portfolio rental value guidance of 3%
to 6% growth for our next financial year,
with the best space likely higher still.”
Marc Wilder Leasing Director
£22.5m
Leases signed in strong
leasing year
26
Great Portland Estates plc Annual Report 2024
Retail: £7.0 million, resurgent demand
During the year, our retail leasing was strong. At our Piccadilly
Buildings, San Carlo, the award-winning restaurant group,
signed a lease for its new flagship Cicchetti, occupying
7,000 sq ft over ground and basement floors, across two units.
On Regent Street, we completed two flagship retail lettings
to The North Face and JOSEPH. The North Face has traded
successfully at GPE’s Walmar House site since 2015 and
signed a 10 year lease on an additional 10,000 sq ft ahead
of 31 March 2023 ERV. Further south on Regent Street,
British contemporary designer fashion brand, JOSEPH, also
signed a lease for a new store located at Kingsland House,
124 Regent Street, W1, completing the repositioning of
the retail offering at the building.
At Mount Royal, 508/540 Oxford Street, W1, TK Maxx, Europe’s
leading off-price apparel and homeware retailer, signed
up for its latest London flagship store. The store comprises
22,500 sq ft across the ground and first floor levels, with
70 ft of Oxford Street frontage. This will be TK Maxx’s second
store on Oxford Street. In addition, the high street health
and beauty retailer, Superdrug, also recently re-geared
its retail lease for their 8,000 sq ft store at Mount Royal,
committing to another 10 years.
In April 2024, we let the retail space at 141 Wardour Street,
W1 to British luxury retail brand, REPRESENT, for its new
London flagship store. The space comprises 5,000 sq ft across
two floors, which will be its second store globally to date,
following its LA opening in West Hollywood.
Customer retention 83%
Customer relationship management and retention are
also a key part to our success. In addition to delivering
market leading NPS scores, our customer retention numbers
are strong. We have retained 83% across the whole portfolio
in the last 12 months.
This high retention rate helps reduce vacancy costs and lowers
refresh capital expenditure in our Flex spaces. Furthermore,
should a customer need to move, we aim to utilise our
broad portfolio to allow them to grow or contract with us.
This includes transitioning some of our long-term Ready
to Fit customers into our Flex space, as well as providing
opportunities for some of our smaller Flex customers to
graduate into larger and longer-term spaces as they grow.
How we are positioned
Despite a weak macro-economic backdrop, we anticipate
that current occupational trends will continue. We expect
that the demand for the best spaces will outstrip supply
and the trend for smaller spaces to be provided on a flexible
basis to increasingly become the norm. Buildings that are
unable to meet this evolving demand, particularly in the
face of competition from elevated secondary supply, will
underperform. The gap between the best and the rest is
likely to widen further.
Against this backdrop, we remain well positioned: our
leasing record remains strong, our committed development
programme is focused on high quality, well-located office-
led schemes that have enduring demand, we are delivering
innovative products that lease well, office rents remain
affordable and 93% of our portfolio is within walking
distance of an Elizabeth line station.
Flex: £13.7 million, strong leasing successes
At 16 Dufour’s Place, W1, we renewed the 3rd floor (3,100 sq ft)
lease with a marketing firm on a Fully Managed basis. They
have taken an additional two year lease, paying a rent
of £278 per sq ft, an increase of 53% on their previous terms.
This new lease, together with a number of other lease renewals
in the building during the year, has increased the average
rent in the building to £250 per sq ft.
At The Hickman, E1, we completed the letting to New Look
on the third and fourth floors (23,242 sq ft) on a Fitted basis
on ten-year leases with an option to break at year seven.
New Look was an existing GPE customer and vacated
35,860 sq ft at Wells & More, W1, which has provided GPE
with the opportunity to refurbish and re-lease the space in
this prime Fitzrovia location. The Hickman is now fully let.
In total, we signed £13.7 million of new leases in our Flex space;
£1.6 million Fitted and £12.1 million Fully Managed leases at a
combined 12.3% ahead of March 2023 ERV. Our Fully Managed
deals achieved on average £208 per sq ft, 12.6% ahead
of March 2023 ERV.
Our Flex space continues to grow on target to hit
one million sq ft
During the year, including our Flex Partnerships, we increased
our committed Flex offerings across the portfolio and they now
total 503,000 sq ft (or c.23.5% of our offices). Our four on-site
Flex refurbishments are progressing well, with 6 St Andrew
Street, EC4 and Alfred Place, WC1 on track to be delivered
in Q3 2024, whilst Egyptian and Dudley House, SW1 and
141 Wardour Street, W1 will complete in 2025.
See our Development Activities on pages 23 to 25
Looking forward, our portfolio is well suited to further Flex
growth. Our average building size is small at around 65,000
sq ft and more than 80% of our floors are sub-10,000 sq ft.
Together with good progress across our various on-floor
refurbishments, we have increased our committed Flex space
to 503,000 sq ft (up from 434,000 in September 2023) as
we remain on track to meet our one million sq ft ambition.
Moreover, we are seeing continued strong demand for our Flex
spaces and, following a strong leasing, our completed Fitted
and Fully Managed spaces are now 98% let. Furthermore,
we are excited for opportunities to further supplement this
growth through acquiring buildings that lend themselves
to our flexible space offer. In total, we are targeting growth,
both organically and through acquisition, to one million sq ft.
Ready to Fit: £1.8 million deals completed
We completed ten Ready to Fit deals across various buildings
during the year, beating the March 2023 ERV by 2.2%.
At 2 Aldermanbury Square, EC2, Clifford Chance chose not to
exercise their option to hand back the first to fourth floors of
the building (up to 89,000 sq ft) in early March 2024, confirming
their commitment to all of the office space. Good progress
has been made ahead of the building’s completion in Q1 2026
and we look forward to welcoming them to the building.
See our Development Activities on pages 23 to 25
Strategic Report – Annual review
27
Annual Report 2024 Great Portland Estates plc
Our investment activities
Despite a muted investment market, we were net investors
during the year, acquiring three buildings to augment both
our HQ repositioning pipeline and our Flex office offers.
Looking forward, our acquisition pipeline is growing and
since the year end we have further added to our Flex offer
with our recent exchange of contracts to purchase the
Courtyard, WC1.
Acquisitions for the year ended 31 March 2024
Price
£m
NIY
%
Area
sq ft
Cost
per
sq ft
Soho Square Estate, W1
70.0
2.1%
57,500
7721
141 Wardour Street, W1
39.0
n/a
33,700
1,156
Bramah House, SE1
13.9
5.9%
16,000
892
Total
122.9
107,200
911
1. On consented area.
In August 2023, we acquired the Soho Square Estate, W1,
for £70.0 million (£772 per sq ft on consented NIA). The site is
located in the heart of the West End at the eastern end of
Oxford Street and backs onto Soho Square, just 100 metres
from the new Tottenham Court Road Elizabeth line station.
The 0.5 acre site benefits from planning consent to demolish
the existing buildings and deliver around 100,300 sq ft of
new Grade A office and prime retail space.
We intend to re-work the designs to improve the quality
of the space, further increasing its attractiveness to
prospective customers in a materially undersupplied
market. The redevelopment will provide a best-in-class
HQ office building on Soho Square with flagship retail
fronting Oxford Street, with multiple private terraces
on the upper floors and a communal roof terrace.
In May 2023, we acquired 141 Wardour Street, W1 for
£39.0 million (£1,156 per sq ft). The 33,700 sq ft building was
vacant, had been stripped out by the previous owner and
benefited from planning consent for a comprehensive
refurbishment. The building is in the heart of Soho, prominently
positioned on the corner of Wardour Street and Broadwick
Street and within a five-minute walk of the new Tottenham
Court Road Elizabeth line station. The building is perfectly
suited to our Fully Managed offer and will provide best-in-class
office and retail accommodation.
Also in May 2023, we acquired Bramah House, SE1 for
£13.9 million, reflecting a 5.9% net initial yield and a capital
value of £892 per sq ft. The 16,000 sq ft freehold building
is multi-let, and over time, we intend to convert the space
to Fully Managed offices. The building is located opposite
our existing ownership at Woolyard and will add to a
growing Fully Managed cluster.
Sales for the year ended 31 March 2024
Price
£m
Premium/
(discount)
to book
value %
Price per
sq ft
£
NIY
%
Poland Street, W1
5.0
(13.4%)
995
5.5%
6 Brook Street, W1
8.4
–
2,306
3.0%
Total
13.4
(5.4%)
1,546
We also took the opportunity to sell two smaller non-core
West End assets for £13.4 million, at a 5.4% discount to the
March 2023 valuation.
2023/24 Strategic priority:
2 Enhance portfolio through
sales and acquisitions
Business model
Acquire
Reposition
Operate & manage
Recycle
Operational measures1
2024
2023
Acquisitions
£122.9m
£37.1m
Capital value per sq ft
£911
£705
Sales
£13.4m
£217.8m
Discount to book value2
(5.4%)
(1.1%)
Capital value per sq ft
£1,546
£1,472
Total investment transactions3
£136.3m
£254.9m
Net investment4
£109.5m
£(180.7)m
1. Including share of joint ventures.
2. Based on book values at start of financial year.
3. Purchases plus sales.
4. Purchases less sales.
Our approach
Buying at the right price and selling at the right time is
central to our business model. Using our extensive network of
market contacts, our Investment team adopts a disciplined
approach with clearly defined acquisition criteria.
See more on pages 12 and 13
To supplement our organic Flex growth, we are also
targeting acquisitions suitable for conversion to
Flex office space, with the following requirements:
– amenity-rich locations with excellent transport links;
– clustering around existing GPE holdings is desirable;
– 30,000 – 60,000 sq ft with divisible floorplates;
– target unit size of 2,000 – 6,000 sq ft;
– ability to create internal and external amenity space;
– high quality ground floor experience;
– product and market appropriate refurbishment capex; and
– opportunity to deliver stabilised income of 6%+.
Once we have acquired a property, the Investment
team works closely with our Portfolio Management and
Development teams to deliver the business plan and
maximise the property’s potential. Every asset’s business
plan is updated quarterly, providing estimates of forward
look returns under different market scenarios. These plans
also help to inform our sales activities, with the assets
providing the lower risk-adjusted returns often being
sold and the proceeds recycled into better performing
opportunities or returned to shareholders.
“The acquisition of the Soho Square Estate
represents a fantastic opportunity for us to
develop a strategic West End freehold site
into a best-in-class headquarters building
with excellent sustainability credentials.”
Dan Nicholson Executive Director
28
Great Portland Estates plc Annual Report 2024
Disciplined approach
With interest rates remaining elevated, our investment
markets have slowed and we have seen asset values decline,
particularly for assets with vacancy, short-term income or
development risk. We anticipate that against this backdrop
some property owners will be increasingly motivated to
sell and fully expect further opportunities to buy over the
course of 2024. However, we remain disciplined. Any potential
purchase needs to outperform the assets we already own,
and with our existing portfolio stacked with opportunity,
the hurdle is high.
How we are positioned
We are actively seeking new buildings for our Flex offerings,
as well as opportunities for HQ repositioning or development
and we increasingly expect the sustainability challenge to
provide us with opportunities to acquire stranded assets
needing a sustainability solution.
Encouragingly, there are clear signs that the investment
market is moving in our favour, with more opportunities trading
closer to our view of fair value. Furthermore, we currently
have £1.4 billion of assets actively under review. They are
predominantly off market, split broadly equally between HQ
repositioning opportunities and Flex and around half are
in the West End. Beyond this we have a further watchlist
of £1.4 billion additional opportunities which we are
actively tracking.
Current value deals under review £bn
£1.4 billion under review – 27 buildings
1.6
2.0
1.2
0.8
0.4
0.0
May
2019
Nov
2019
May
2020
Nov
2020
May
2021
Nov
2021
May
2022
Nov
2022
May
2023
Nov
2023
Mar
2024
Flex
HQ Repositioning
49%
51%
Of these opportunities, three buildings, totalling around
£250 million were near-term opportunities one of which
recently exchanged at The Courtyard, WC1. We have
exchanged to buy the building for £10.4 million of cash and
through a property exchange of 95/96 New Bond Street
for £18.2 million. The Courtyard comprises 62,000 sq ft of
vacant office and partially let retail space and is well suited
to be repositioned into the Group’s Fully Managed offering.
The Courtyard is located in a prime West End location,
around 400 meters from Tottenham Court Road Elizabeth
line station, and is adjacent to Alfred Place, one of the
Group’s other Fully Managed buildings.
Soho Square Estate, W1
Area
57,500 sq ft
Acquisition date
August 2023
Price
£70m
Opportunity
HQ redevelopment
Distance to Elizabeth line station
100 metres
141 Wardour Street, W1
Area
33,700 sq ft
Acquisition date
May 2023
Price
£39m
Opportunity
Fully Managed refurbishment
Distance to Elizabeth line station
250 metres
Bramah House, SE1
Area
16,000 sq ft
Acquisition date
May 2023
Price
£13.9m
Opportunity
Fully Managed refurbishment
Distance to London Bridge station
350 metres
Three acquisitions; all off market
Strategic Report – Annual review
29
Annual Report 2024 Great Portland Estates plc
Our financial results
As is usual practice in our sector, we use alternative performance
measures (APMs) to help explain the performance of the
business. These include quoting a number of measures on
a proportionately consolidated basis to include joint ventures,
as it best describes how we manage the portfolio, like-for-like
measures and using measures prescribed by EPRA. The measures
defined by EPRA are designed to enhance transparency
and comparability across the European real estate sector.
Reconciliations of APMs are included in note 9 of the
financial statements.
See more about performance measures and
EPRA metrics on page 33 and note 9 to the accounts
Lower IFRS NAV and EPRA NTA per share
driven by valuation declines
IFRS NAV and EPRA NTA per share at 31 March 2024 were
624 pence per share, a decrease of 17.6% over the year,
largely due to the 12.1% like-for-like valuation decrease
in the property portfolio. When combined with ordinary
dividends paid of 12.6 pence per share, this delivered
a Total Accounting Return of minus 15.9%.
EPRA NTA pence per share
700
550
500
750
800
31 March
2024
600
650
Increase
Decrease
Total
31 March
2023
757
Revaluation
(127)
Loss on
disposals
(1)
Ordinary
dividends
(13)
EPS
7
Other
1
624
The main drivers of the 133 pence per share decrease
in EPRA NTA from 31 March 2023 included:
– the decrease of 127 pence per share arising from the
revaluation of the property portfolio, with virtually all
of the decline arising from upward pressure on property
yields as a result of higher interest rates;
– EPRA earnings for the year of 7 pence per share
enhanced NTA; and
– ordinary dividends paid of 13 pence per share reduced NTA.
At 31 March 2024, the Group’s net assets were £1,583.0 million,
down from £1,918.6 million at 31 March 2023, with the decrease
largely attributable to the decrease in property valuation
of £322.2 million. EPRA NDV and EPRA NRV were 644 pence
and 691 pence at 31 March 2024 respectively, compared with
790 pence and 826 pence at 31 March 2023.
See more about our capital strength on page 32
Revenue increased due to increased rental income
Revenue for the year was £95.4 million, up from £91.2 million
on the prior year, driven by higher gross rental income (up
£0.6 million), increased service charge income (up £1.9 million)
and greater Fully Managed services income (up £2.7 million)
given its expansion. The increase in revenue was supported by
our successful leasing, where we signed 66 leases, generating
new annual income of £22.5 million p.a. (our share: £19.8 million)
and reduced our investment void from 2.5% at 31 March 2023
to 1.3% at 31 March 2024.
Net rental income, after taking account of expected credit losses,
lease incentives and ground rents, was £72.1 million, up from
£70.9 million in the prior year, as we saw the benefit from the
commencement of new leases given our strong leasing year
and a reduced credit loss provision as our rental collection
rates returned to more normalised levels.
Given the increase of our Fully Managed spaces during the
year, and the associated management information, we have
presented our Fully Managed spaces as a separate segment.
Adjusting for acquisitions, disposals and transfers to and from
the development programme, like-for-like rental income
(including share of joint ventures) increased by 4.1% excluding
expected credit losses.
Joint venture fee income for the year was £1.7 million,
a decrease of £0.7 million, as a result of limited leasing
or sales activity in the joint ventures during the year.
Strong rent collection
We secured in excess of 99% of all rents, including in our joint
ventures, within seven days of the due date. Since 1 April 2023,
four of our customers have gone into administration,
representing less than 0.7% of our rent roll. At 31 March 2024,
we held rent deposits and bank guarantees totalling £21.3 million,
including our share of joint ventures.
£1.6bn
Net assets
“Despite a strong operating
performance, our financial results
were adversely impacted by the
higher interest rate environment,
reducing valuations and increasing
the Group’s cost of debt.”
Nick Sanderson Chief Financial & Operating Officer
30
Great Portland Estates plc Annual Report 2024
Cost of sales increased
Cost of sales increased from £32.2 million to £33.3 million
for the year ended 31 March 2024. This increase was primarily
driven by increased service charge expenses, which includes
Fully Managed services costs, which rose as our Fully Managed
spaces grew over the year. At 31 March 2023, we had 55
Fully Managed units, at 31 March 2024 this rose to 82 units.
Other property expenses reduced by £5.0 million, due to lower
average levels of vacancy reducing payments for business
rates on empty spaces, reduced leasing costs as activity was
lower given last year’s record performance and lower amounts
paid to third parties in respect of joint venture transactions
due to lower levels of activity.
Taken together, net service charge income, net Fully Managed
services income and expenses, other property costs and
expected credit loss provisions for service charges reduced
to £11.4 million from £15.2 million in the prior year.
Joint venture earnings
EPRA earnings from joint ventures were £9.8 million, unchanged
on the prior year, with a £1.2 million increase in net rental income
offset by higher property and administration costs.
Administration costs
Administration costs were £42.3 million, £4.0 million higher than
the previous year. The increase in the Group’s overhead was
due to an increase in employment costs, due to inflationary
salary uplifts and the cost associated with team restructuring
of around £2.0 million. In addition, provisions for share-based
payments returned to more normalised levels as the reversal
of prior year charges under the Group’s LTIP scheme in the
year ended 31 March 2023 did not reoccur in the current year.
Looking forward, we anticipate that recent years’ growth
in the Group’s overhead cost will moderate significantly.
Increased interest costs
Gross interest paid on our debt facilities was £26.5 million,
£8.7 million higher than the prior year. This increase was
primarily due to a combination of higher levels of average
drawn debt (including the utilisation of the Group’s new
£250 million term loan), which was used to fund both our
recent acquisitions as well capital expenditure on the Group’s
development and Flex refurbishments, together with higher
underlying interest rates.
Capitalised interest increased by £2.5 million to £11.3 million as
our development activity increased, including the commitments
to develop French Railways House & 50 Jermyn Street, SW1
and Minerva House, SE1 as well as the commencement of a
growing number of refurbishment schemes to deliver on our
Flex ambitions, including 141 Wardour Street, W1, Egyptian
& Dudley House, SW1 and 31/34 Alfred Place, WC1. As a result,
the Group had net finance costs (including interest receivable)
of £11.6 million (2023: £5.5 million).
EPRA earnings
EPRA earnings were £17.9 million, 25.4% lower than last year
as expected, predominantly due to higher finance costs
and administration expenses offset by increased net rental
income and lower property costs.
EPRA earnings £m
Increase
Decrease
Total
31 March
2023
24.0
Rental
income
1.2
Joint
venture
fees
(0.7)
Property
costs
3.4
Admin
costs
(4.0)
Net
Interest
(6.1)
0.1
Other
17.9
31 March
2024
0
25
20
15
10
5
30
Revaluation declines in the Group’s investment properties,
together with reduced EPRA earnings, led to the Group’s
reported IFRS loss after tax of £307.8 million (2023: £163.9 million).
Basic and diluted loss per share for the year were both a 121.7
pence loss, compared with 64.8 pence for 2023. Diluted EPRA
EPS was 7.1 pence (2023: 9.5 pence), a decrease of 25.3%
and cash EPS was 1.4 pence (2023: 1.4 pence).
Results of joint ventures
The Group’s net investment in joint ventures decreased
to £491.3 million at 31 March 2024, down from £538.8 million
in the previous year. The decrease is largely due to the 10.2%
like-for-like decrease in value of the joint venture property
portfolio. Our share of joint venture net rental income was
£19.4 million, up 6.6% from last year. This increase was primarily
as a result of completing the leasing of the retail space at
Hanover Square, W1 in the GHS Partnership.
See more about our joint ventures on page 70
Our capital strength
While our primary objective is to deliver returns consistently
ahead of our cost of capital, we also seek to minimise the
cost of our capital through the appropriate mix of equity
and debt finance, and to ensure that we have access to
sufficient financial resources to implement our business plans.
Optimising and flexing the allocation of capital across our
portfolio, including between our investment and development
activities, is key to our business and ensuring that we maximise
returns on a risk-adjusted basis through the property cycle.
Accordingly, we operate with four key ‘givens’:
– conservative leverage to enhance, not drive, returns;
– sustainable ordinary dividends;
– disciplined capital allocation; and
– balance sheet efficiency – track record of accretively
raising and returning capital.
Our preference for low financial leverage helps to provide
downside protection when operating in the cyclical central
London property market and to maintain the financial
flexibility to allow us to act quickly on new investment
opportunities as they arise.
Strategic Report – Annual review
31
Annual Report 2024 Great Portland Estates plc
Our financial results continued
Our capital strength; EPRA LTV of 32.6%
The Group’s consolidated net debt increased to £721.0 million,
or £738.0 million excluding customer deposits at 31 March 2024,
compared with £457.7 million at 31 March 2023. The increase was
largely due to the acquisition of three buildings during the year
for £122.9 million (excluding costs), together with £142.4 million
of development and refurbishment capital expenditure
across the Group. As a result, the Group’s gearing increased
to 46.8% at 31 March 2024 from 24.0% at 31 March 2023.
Including cash balances in joint ventures, total net debt,
excluding net liabilities, was £695.3 million (2023: £440.0 million)
or £713.5 million excluding customer deposits, equivalent to
an EPRA LTV of 32.6% (2023: 19.8%). At 31 March 2024, we had
no external debt in any of our joint ventures. At 31 March 2024,
the Group, including its joint ventures, had unrestricted
cash (£30.4 million) and undrawn committed credit facilities
(£603.0 million) totalling £633.4 million.
Debt analysis
March
2024
March
2023
Net debt excluding JVs (£m)1
738.0
457.7
Net gearing
46.8%
24.0%
Total net debt including 50%
JV cash balances (£m)1
713.5
440.0
EPRA LTV
32.6%
19.8%
Interest cover
3.7x
10.2x
Weighted average interest rate
4.3%
2.7%
Weighted average cost of debt
4.1%
3.0%
% of drawn debt fixed/hedged
87%
97%
Cash and undrawn facilities (£m)
633.4
457.0
1. Excludes customer deposits.
During the year, to support the delivery of our strategic priorities,
including funding the Group’s near-term development
programme and the £175 million private placement debt
maturity in May 2024, we secured a new £250 million term loan
at a headline margin of 175 basis points over SONIA with three
existing relationship banks. The loan has an initial three-year
term which may be extended to a maximum of five years.
Given the elevated interest rate environment, and our greater
weighting to SONIA rates through the drawdown of our
£250 million loan facility, the Group’s weighted average cost
of debt for the year, including fees, was 4.1% and its weighted
average interest rate (excluding fees) was 4.3% up from
3.0% and 2.7% respectively. At 31 March 2024, our weighted
average drawn debt maturity was at 3.4 years (31 March
2023: 6.4 years).
At 31 March 2024, 87% of the Group’s total drawn debt was at
fixed or hedged rates (2023: 97%). The Group is operating with
substantial headroom over its debt covenants. At 31 March 2024,
given our low levels of leverage, property values would have
to fall a further 34% before covenant breach.
Balance sheet discipline
When considering the appropriate level of financial leverage
in the business, we apply the same capital discipline that we
use when making asset-level decisions. Typically, we aim for
an LTV ratio (see page 161 for calculation) of between 10% and
35% through the cycle. Additionally, we have a track record of
accretively raising and returning equity capital to shareholders
at the appropriate time and in the appropriate circumstances,
including returning £616 million to shareholders between
2017 and 2020, following profitable recycling activity. Our key
considerations when making such capital decisions include:
– the market outlook;
– opportunities for growth (both capital expenditure
and acquisitions);
– opportunities for profitable recycling activity; and
– current and prospective debt ratios (including LTV
and interest cover).
Taxation
The tax credit in the income statement for the year was
£nil million (2023: £0.1 million) and the effective tax rate on
EPRA earnings was 0% (2023: 0%). The majority of the Group’s
income is tax free as a result of its REIT status, and other
allowances were available to set against non-REIT profits.
The Group complied with all relevant REIT tests for the year
to 31 March 2024.
As a REIT, the majority of rental profits and chargeable
gains from our property rental business are exempt from UK
corporation tax, provided we meet a number of conditions,
including distributing at least 90% of the rental income profits
of this business (known as Property Income Distributions (PIDs))
on an annual basis. These PIDs are then typically treated as
taxable income in the hands of shareholders. During the year,
the Group paid £20.0 million of PIDs.
The Group’s REIT exemption does not extend to either profits
arising from the sale of trading properties or gains arising from
the sale of investment properties in respect of which a major
redevelopment has completed within the preceding three
years (including the sale of 50 Finsbury Square, EC2, which
completed in February 2023). The Group is otherwise subject
to corporation tax.
Despite being a REIT, we are subject to a number of other taxes
and certain sector-specific charges in the same way as non-
REIT companies. During the year, we incurred £10.6 million in
respect of stamp taxes, section 106 contributions, community
infrastructure levies, empty rates in respect of vacant space,
head office rates, employer’s National Insurance and
irrecoverable VAT.
All entities within the Group are UK tax resident; as our business
is located wholly in the UK, we consider this to be appropriate.
The Group maintains an open working relationship with HMRC
and seeks pre-clearance in respect of complex transactions.
HMRC regards the Group as ‘low risk’ and maintaining this
status is a key objective of the Group.
See more about our tax strategy at:
www.gpe.co.uk/about-us/governance
32
Great Portland Estates plc Annual Report 2024
Ordinary dividends
Given the low yielding nature of London real estate, the Group
operates a low and progressive ordinary dividend policy, with
the aim of maintaining average dividend cover of 1.0x through
the cycle. The Board has recommended a final dividend of
7.9 pence per share (2023: 7.9 pence) which will be paid, subject
to shareholder approval, on 8 July 2024 to shareholders on the
register on 31 May 2024. Approximately half of the final dividend
will be a REIT PID in respect of the Group’s tax-exempt property
rental business.
Together with the interim dividend of 4.7 pence per share,
the total dividend for the year is 12.6 pence per share,
consistent with the prior 12 months.
Ordinary dividends: 12.6 pence per share
2021
2022
2020
7
13
2024
10
11
12
8
9
12.6
12.6
12.6
12.6
12.6
2023
EPRA performance measures
Measure
Definition of measure
March
2024
March
2023
EPRA earnings*
Recurring earnings from core operational activities
£17.9m
£24.0m
EPRA EPS*
EPRA earnings divided by the weighted average number of shares
7.1p
9.5p
Diluted EPRA EPS*
EPRA earnings divided by the diluted weighted average number of shares
7.1p
9.5p
EPRA costs
(by portfolio value)*
EPRA costs (including direct vacancy costs) divided by market value
of the portfolio
2.3%
2.2%
EPRA capital
expenditure*
The Group’s capital expenditure on the portfolio categorised
between acquisitions, development and on the investment portfolio
£295.0m
£149.3m
EPRA NTA*
Assumes that entities buy and sell assets, thereby crystallising certain
levels of unavoidable deferred tax. Diluted net assets per share adjusted
to remove the cumulative fair value movements on interest rate swaps
and similar instruments, the carrying value of goodwill arising as a result
of deferred tax and other intangible assets
£1,582.6m
£1,918.6m
EPRA NTA per share*
EPRA NTA assets divided by the number of shares at the balance sheet
date on a diluted basis
624p
757p
EPRA NDV*
Represents the shareholders’ value under a disposal scenario, where
deferred tax, financial instruments and certain other adjustments are
calculated to the full extent of their liability, net of any resulting tax.
Diluted net assets per share adjusted to remove the impact of goodwill
arising as a result of deferred tax and fixed interest rate debt
£1,633.7m
£2,002.0m
EPRA NDV per share*
EPRA NDV assets divided by the number of shares at the balance sheet
date on a diluted basis
644p
790p
EPRA NRV*
Represents the value of net assets on a long-term basis. Assets and
liabilities that are not expected to crystallise in normal circumstances
such as the fair value movements on financial derivatives, real estate
transfer taxes, and deferred taxes on property valuation surpluses
are therefore excluded
£1,752.7m
£2,092.2m
EPRA NRV per share*
EPRA NRV assets divided by the number of shares at the balance sheet
date on a diluted basis
691p
826p
EPRA LTV
Debt (including net payables) divided by market value of the property
32.6%
19.8%
EPRA NIY
Annualised rental income based on cash rents passing at the balance
sheet date less non-recoverable property operating expenses,
divided by the market value of the property increased by estimated
purchasers’ costs. See calculation table on page 166
3.2%
2.5%
EPRA ‘topped-up’ NIY
EPRA NIY adjusted to include rental income in rent-free periods
(or other unexpired lease incentives). See calculation table on page 166
3.4%
3.2%
EPRA vacancy rate
ERV of non-development vacant space as a percentage of ERV
of the whole portfolio (minus developments). See calculation table
on page 197
28.4%
20.4%
* Audited; reconciliation to IFRS numbers included in note 9 to the financial statements.
£633m
Cash and undrawn facilities
Strategic Report – Annual review
33
Annual Report 2024 Great Portland Estates plc
Our portfolio
Our portfolio is exclusively based in central London,
with the majority located in the West End. Our customers
are diverse, and their demands and preferences are
evolving at a rapid pace. As a result, we are committed
to shaping our products and services to meet these
changing needs.
Well-located central London portfolio
Our specialist approach requires focus. As a result, we only
operate in central London. Whilst our origins lie in the West
End, we recognise that central London is growing, and as it
grows, new locations will become sought after by customers
seeking new homes for their businesses. As a result, we remain
opportunistic and will invest across central London where
we see both value and opportunities for growth.
See more about our customers on pages 69 and 70
Evolving our products
To succeed, we need to provide our customers with great
spaces that are flexible, sustainable and beautifully designed,
offering high quality services to provide an enticing real estate
experience. To achieve this Customer First approach, and
meet changing needs and working patterns, we have evolved
our products to focus on two complementary, overlapping
activities, and our portfolio is well suited to deliver both:
– HQ repositioning – developing larger, best-in-class HQ
buildings. Growing demand for very high quality, brand
new space has remained strong and the future supply of
space remains limited. Today our development programme
totals 9.7% of the Group’s existing portfolio. This pipeline
of opportunity provides raw material, often with poor
sustainability credentials, which we can transform into
best-in-class spaces designed to let well in their local
markets, be futureproofed in a rapidly changing world
and have regard to the wider environment in which
they are located.
– Flex spaces – smaller fitted units, often with higher service
levels. Customers in our smaller spaces are increasingly
demanding the provision of flexibility, amenity and service
provision. Accordingly, we have developed a choice of
Flex offerings to meet this need. We provide spaces that
are delivered flexibly on a Fitted or Fully Managed basis,
making life easier and hassle free. Where the management
of the space is more intensive, delivered by the desk or room,
we partner with another provider to meet this demand.
Our portfolio, with around 80% of our spaces sub-
10,000 sq ft, is perfectly placed to meet this demand.
Both of these business activities are complementary and primed
for growth. Our on-site HQ development and Flex conversions will
commit £498 million of capital, delivering 678,300 sq ft of brand
new space, and we have an ambition to significantly grow our
Flex offerings to more than one million sq ft in the coming years.
Operational measures
-12.1%
Property valuation decline
(on a like-for-like basis)
24%
Percentage of portfolio
in Flex or HQ development
programme
+56 bps
Outward yield movement
23.5%
Percentage of office portfolio
in committed Flex offerings
“The rise in global interest rates
has impacted property yields,
reducing values. This decline has
more than offset the positive impact
of rental growth that we continue
to capture across our portfolio.”
Hugh Morgan Director of Portfolio Management
Our approach
Our focused business model is based upon
repositioning properties to unlock their often hidden
potential. This repositioning relies on having a deep
understanding of the markets in which we operate,
to enable us to unearth new opportunities, provide
spaces that customers demand and develop
buildings for the customers of tomorrow.
We aim to position our portfolio to maximise
the opportunity for future growth. As a result, every
property has a detailed business plan which forecasts
each and every customer’s future cash flows and,
using our own assumptions for future movements in
rents and yields, forecasts the forward look returns
for the portfolio. If a property’s prospective returns
do not meet our required investment hurdles, taking
into account both our cost of capital and the risks,
typically it is sold.
34
Great Portland Estates plc Annual Report 2024
100%
Of the portfolio in central London
Valuation declines driven by outward yield shift %
Rental value growth
0%
Yield shift
Residual
-5%
-10%
-15%
-20%
5%
3.8%
(8.5)%
(7.4)%
Including rent from pre-lets and leases currently in rent-free
periods, the adjusted initial yield of the investment portfolio
at 31 March 2024 was 3.9%, 10 basis points higher than
the start of the financial year.
Whilst the overall valuation decreased by 12.1% during the year
on a like-for-like basis, elements of the portfolio continued
to show greater variation:
– the second half performance was down 2.4% significantly
outperforming the first six months (down 10.3%) with our Flex
office space reducing in value by 8.2% outperforming the
Group’s wider office space which fell by 11.8% in value;
– retail space underperformed offices falling in value by 13.2%
resulting from a greater yield expansion of 62 basis points;
– including developments, our West End portfolio (-8.4%)
performed better than our rest of London portfolio (-20.7%),
given a more aggressive yield expansion in the City
+73 basis points versus +53 basis points for the West End;
– newer, higher quality buildings outperformed older assets,
with those assets with a capital value per sq ft in excess
of £1,000 per sq ft, reducing in value by 5.5% compared
to those with a capital value per sq ft of less than £1,000
per sq ft which reduced by 21.5%; and
– buildings with better sustainability credentials outperformed.
Buildings with an EPC rating of A or B reduced in value
by 7.0%, outperforming properties with an EPC of C
or D which fell by 18.2% in the year.
Our joint venture properties fell in value by 10.2% over the year,
driven by higher investment yields whilst our wholly-owned
portfolio decreased by 12.6% on a like-for-like basis.
The second half performance (down 2.4% like-for-like)
indicates both interest rates and property yields are now
likely around their peak.
Yield driven valuation decline
The valuation of our portfolio, including our share of
joint ventures, declined over the 12 months by 12.1% on
a like-for-like basis, to £2,331.2 million at 31 March 2024.
Our portfolio by value – 74% in West End1
37%
North of Oxford Street £870.3m
Rest of West End £849.6m
City £306.7m
Southwark £213.9m
Midtown £90.7m
9%
4%
37%
13%
1. Including share of joint ventures.
The key drivers behind the Group’s valuation decrease
for the year, including joint ventures at share, were:
– higher investment yields – given the backdrop of higher
interest rates, equivalent yields increased by 56 basis points
(2023: 42 basis points) during the year (office: +54 basis points;
retail: +62 basis points) reducing valuations. At 31 March 2024,
the portfolio true equivalent yield was 5.3%;
See more about our markets on pages 21 and 22
– rental value growth – the continued demand for our
best in class spaces has helped increase our rental values.
Since the start of the financial year we have seen continued
demand for the best spaces and our rental values increased
by 3.8% on a like-for-like basis, with our office portfolio
up by 3.6%, with our Fully Managed offices up even higher
at 5.2%. ERVs in our retail portfolio increased by 4.4%;
See more about our markets on pages 21 and 22
– developments – the valuation of our committed development
properties decreased by 28.7% on a like-for-like basis to
£201.5 million during the period, given development returns
are more sensitive to movements in investment yields; and
See more about our leasing and Flex activities on pages 26 and 27
– portfolio management – we delivered a strong leasing year,
signing 75 new leases, rent reviews and renewals, with new
lettings 9.1% ahead of ERV. This secured £25.6 million (our
share) of annual income, supporting the valuation over the
year. At 31 March 2024, the portfolio was 10.1% reversionary.
See more about our development activity on pages 23 to 25
Strategic Report – Annual review
35
Annual Report 2024 Great Portland Estates plc
Our portfolio continued
Portfolio performance
Wholly-
owned
£m
Joint
ventures1
£m
Total
£m
Proportion
of portfolio
%
Valuation
movement
%
North of Oxford Street
Office
677.3
–
677.3
29.1
(10.5)
Retail
152.3
36.7
189.0
8.1
(11.4)
Residential
4.0
–
4.0
0.2
(13.8)
Rest of West End
Office
218.1
239.2
457.3
19.6
0.6
Retail
127.1
109.5
236.6
10.2
(11.4)
Residential
0.7
–
0.7
–
(26.9)
Total West End
1,179.5
385.4
1,564.9
67.2
(7.8)
City, Midtown and Southwark
Office
340.0
90.7
430.7
18.5
(17.2)
Retail
7.7
–
7.7
0.3
(7.7)
Residential
–
–
–
–
–
Total City, Midtown and Southwark
347.7
90.7
438.4
18.8
(17.0)
Investment property portfolio
1,527.2
476.1
2,003.3
86.0
(10.0)
Development property
201.5
–
201.5
8.6
(28.7)
Total properties held throughout the year
1,728.7
476.1
2,204.8
94.6
(12.1)
Acquisitions
126.4
–
126.4
5.4
(6.6)
Portfolio valuation
1,855.1
476.1
2,331.2
100.0
(11.8)
1. GPE share.
Portfolio characteristics
Investment
properties
£m
Development
properties
£m
Total
property
portfolio
£m
Office
£m
Retail
£m
Residential
£m
Total
£m
Net
internal
area sq ft
000s
North of Oxford Street
870.3
–
870.3
677.3
189.0
4.0
870.3
760
Rest of West End
804.9
44.7
849.6
560.8
288.1
0.7
849.6
651
Total West End
1,675.2
44.7
1,719.9
1,238.1
477.1
4.7
1,719.9
1,411
City, Midtown and Southwark
454.5
156.8
611.3
600.2
8.6
2.5
611.3
1,319
Total
2,129.7
201.5
2,331.2
1,838.3
485.7
7.2
2,331.2
2,730
By use:
Office
1,684.9
153.4
1,838.3
Retail
440.1
45.6
485.7
Residential
4.7
2.5
7.2
Total
2,129.7
201.5
2,331.2
Net internal area sq ft 000s
2,197
533
2,730
£2.3bn
Portfolio valuation
36
Great Portland Estates plc Annual Report 2024
Sustainability
Creating sustainable spaces sits at the heart of our purpose. Whilst the world
of sustainability can be complicated, our approach is simple and is set out in our
Sustainability Statement of Intent ‘The Time is Now’.
During the year we…
– Updated ‘Our Roadmap to Net Zero’, we are increasing the ambition of our near-term targets
and reducing 90% of our footprint, in our commitment to reach net zero by 2040.
– Continued the roll out of ‘Our Brief for Creating Sustainable Spaces’ to all our HQ developments,
major and minor refurbishments, as well as on-floor fit-out projects.
– Continued to implement the four pillars of our Sustainability Statement of Intent:
How our sustainability strategy supports our business
Statement of Intent, ‘The Time is Now v2.0’
Sets out the four pillars of our approach to sustainability
Climate resilience
Decarbonise
Our Roadmap to Net Zero v2.0
Health and wellbeing
Social impact
Social Impact Strategy
www.gpe.co.uk/
sustainability
www.gpe.co.uk/
sustainability
www.gpe.co.uk/documents/
the-time-is-now
Our Brief for Creating Sustainable Spaces
Sets out how we implement the four pillars of our approach as we design, construct, fit out and manage our spaces
Supported by strong governance and reporting
Transparent disclosure through our Annual Report and Sustainability Performance tables
www.gpe.co.uk/sustainability/
governance-reporting
For TCFD response see pages 52 to 61
www.gpe.co.uk/documents/
sustainable-spaces-brief
Integrating
climate resilience
across our
business
See page 40
Decarbonising
our business to
become net zero
by 2040
See page 42
Putting health
and wellbeing
front and centre
See page 48
Creating a lasting
positive social
impact in our
communities
See page 50
Strategic Report – Annual review
37
Annual Report 2024 Great Portland Estates plc
Sustainability continued
Good governance supports progress on sustainability
Our robust governance structure ensures that appropriate oversight is given to sustainability –
a strategic imperative at GPE.
Oversight starts with our Board, typically meeting six times
per year, with regular sustainability updates provided by our
Chief Executive and Sustainability and Social Impact Director.
In addition, the Board receives an update on progress towards
our sustainability strategy as part of the Chief Executive’s
report at each Board meeting. Three of our Board Committees
oversee aspects of sustainability-related governance. As a
member of Executive Committee, our Sustainability and Social
Impact Director is involved in all key asset-related decisions
such as acquisitions, development appraisals, lettings and
disposals. Furthermore, the Sustainability Committee provides
a forum for management to discuss risks and opportunities and
potential blockers to progress, while Operational Committees
work to pre-empt potential challenges that may slow our
progress. Our Committees ensure wide-scale involvement at
all levels of the business, supporting a collaborative approach
to sustainability. More details can be found on page 52 in our
TCFD response and page 108 in Leadership.
Development Sustainability
Sub-Committee
Co-Chairs: Martin Quinn & Frank Blande
Sustainable Finance
Committee
Chair: Nick Sanderson
Management Committees
Portfolio Sustainability
Sub-Committee
Chair: Janine Cole
Executive Committee
Chair: Toby Courtauld
Sustainability Committee
Chair: Toby Courtauld
Nomination Committee
Chair: Richard Mully
The key objectives of the Nomination
Committee, which meets five times per
year, are to regularly review the skills and
experience of the Board to ensure that it
is the right size, structure and composition
taking into account the skills, experience,
independence, knowledge and diversity of
Directors and the future strategy of the Group.
Consideration of these attributes in relation
to climate resilience and decarbonisation
is an important part of this process.
Our Development Sustainability
Sub-Committee reports quarterly to the
Sustainability Committee, and provides
operational oversight on climate-related
risks and opportunities within the development
pipeline. The key areas of focus are
embodied carbon, delivery of the circular
economy and integration of nature-based
solutions to support both biodiversity
net gain and climate resilience.
The Chief Executive chairs the Executive
Committee on a fortnightly basis. Key
stakeholders including Finance, Legal,
Leasing, Development, Human Resources,
Portfolio Management, Flex, Customer
Experience and Sustainability meet regularly
to review key strategic and operational
decisions to be made by the business. This
includes development appraisals outlining
embodied carbon and energy intensity
benchmarks, significant procurement
decisions outlining the resilience of our
value chain and Sustainability Strategy.
Audit Committee
Chair: Vicky Jarman
The key objectives for the Audit Committee,
which meets four times per year, are to
report to the Board and shareholders on
the Group’s financial reporting, internal
control and risk management systems, and
on the independence and effectiveness of
the external auditor. Assurance processes
and internal audit processes connected with
sustainability and ESG key performance
indicators are captured within the remit
of the Audit Committee.
Our Portfolio Sustainability Sub-Committee
reports quarterly to the Sustainability
Committee, and provides operational
oversight on climate-related risks and
opportunities within the standing portfolio.
The key area of focus being energy use
intensity, stranding of assets both from
a carbon and energy perspective and
integration of nature-based solutions
to support both biodiversity net gain
and climate resilience.
Remuneration Committee
Chair: Emma Woods
The Remuneration Committee is responsible for
determining the remuneration of the Executive
Directors and the Chair of the Board, the
members of the Executive Committee and
other senior executives. Meeting five times a
year, the Committee also reviews the broad
operation of remuneration policy and practices
for all employees. The recently updated
bonus scorecard includes KPIs on achieving
net zero carbon at our developments and
reducing energy intensity.
The Sustainable Finance Committee was
formed to manage the Sustainable Finance
Framework and all Sustainable Debt
Instruments issued under the Framework.
As no such Sustainable Debt Instruments
have been issued to date, this Committee was
not convened during the last financial year.
The Chief Executive chairs the quarterly
Sustainability Committee meeting, also
attended by the Chief Financial & Operating
Officer, Executive Director, Development
Director, Customer Experience and Flex
Director, Sustainability and Social Impact
Director and key department heads.
This provides strategic oversight on climate
risk and resilience, reviews the progress and
evolution of the sustainability strategy, and
monitors performance against our targets.
Outcomes from this Committee are brought to
the attention of the Board by the Chief Executive
and the Sustainability and Social Impact Director.
Board Committees
Strategic
Operational
Sustainability
Social Impact Committee
Chair: Nick Sanderson
The Chief Financial Operating Officer chairs
the Social Impact Committee which meets
on a quarterly basis and reports to the
Executive Committee every six months.
The Committee has oversight of the social,
community and charitable endeavours of
the business in line with the Social Impact
Strategy. Representatives from HR, Marketing,
Portfolio Management and Development
teams attend to ensure collaboration and
transparency across the organisation in
relation to social initiatives, charitable
donations and allocation of budget.
For full TCFD response see pages 52 to 61
38
Great Portland Estates plc Annual Report 2024
Continually adapting and evolving our approach
Roadmap to Net Zero v2.0
Version 2.0 of our Roadmap to Net Zero, released in May 2024, reflects advancing knowledge on net zero, improved clarity
on the extent of carbon reductions necessary and much less reliance on offsetting. We have increased the ambition of our
near- and long-term targets, requiring a 90% reduction in our Scope 1, 2, and 3 emissions to reach net zero carbon by 2040.
Increased near-term ambitions, longer-term targets to 2040
Collaboration is integral to success throughout the value chain
Increasing ambition
The ambition of our net zero target
has increased to a 90% reduction
in emissions across Scopes 1, 2 &
3 by 2040, as compared with our
previous target of 50% by 2030.
Our absolute emissions reductions
targets for Scopes 1, 2 and 3, as well
as embodied carbon and energy
use intensity reductions required
by 2030, are also more challenging.
Residual emissions will only be
treated once we have reduced our
emissions by 90%, either through
insetting or offsetting programmes.
To drive faster progress in our Scope
3 reductions, we have also increased
our Internal Carbon Price from £95
per tonne to £150 per tonne and set
value chain engagement targets.
For further information see page 42
Customers
We have committed to engaging
with at least 80% of our top energy
consuming customers by 2027.
We have always collaborated with
our customers but we are now
formalising that engagement
through specific requirements
on sharing sustainability data
and collaboration.
By formalising that engagement
we can support our customers in
achieving their own sustainability
goals as well as reducing the Scope 3
carbon emissions of our buildings.
We know that sustainability is
increasingly a talent retention issue for
our customers, therefore our spaces
must reflect the ambition of our
customers. As well as environmental
concerns, our customers are
increasingly addressing wellbeing
considerations as well as connection
with the local community.
Decarbonising energy
We must transition our buildings
away from reliance on fossil fuels.
Our updated Roadmap includes a
commitment to remove fossil fuel-
derived energy from our existing
buildings by 2030.
This requires us to rapidly upscale
our investment in technologies
such as heat pumps as well as
increasing the on-site generation
of renewable energy.
Whilst 100% of our procured energy is
already purchased from Renewable
Energy Guarantees of Origin (REGO)
and Renewable Gas Guarantees
of Origin (RGGO) -backed tariffs,
we recognise their validity is being
challenged. We are reviewing
our energy procurement policy
and considering 24/7 matching
targets for renewable energy
procured by our business as well
as a review of Power Purchase
Agreement options.
Supply chain partners
We have committed to engaging
with at least 80% of our supply
chain partners, by spend, by 2027.
We are already reaping the benefits
of collaboration and engagement
across our development pipeline,
helping us tackle the challenge
of embodied carbon. Through our
revised target we are looking to
deepen our engagement across
the whole of our supply chain.
As we evolve towards a more
service-led, operational model
within our Fully Managed spaces
we know that the carbon emissions
associated with the provision of
those services and amenities may
increase. We are partnering with an
AI-based sustainable procurement
platform to give us greater
oversight of how our suppliers
are already performing to inform
our engagement programme.
Defining net zero
In its simplest form, net zero is
when all emissions released into
the atmosphere are equal to
the amount removed.
We have made considerable
progress on emissions reductions
since we first set out our Roadmap to
Net Zero in 2020, however legislative
frameworks and businesses are
increasingly converging around a
science-based approach to net zero.
Following the achievement of
our original Science Based Target
in 2023, we are now aligning our
approach to the SBTi Corporate
Net-Zero Standard. During the
next year we will work towards
SBTi validation of our targets.
For further information see page 42
Communities
In order for our customers, supply
chain and buildings to be resilient to
climate change it is essential that we
work closely with our communities.
Through our social impact strategy
we are therefore working with
organisations that support the
resilience of our London boroughs.
This strategy includes:
– Reducing the impact of our
developments on the community,
for example, our barge servicing
strategy at our Minerva House,
SE1, development is substantially
reducing vehicle movements.
– Working with charities that
are supporting improvements
to London’s biodiversity.
– Working with charities who
unlock the potential of London’s
young people.
More detail found on
pages 41 and 50 to 51
Strategic Report – Annual review
39
Annual Report 2024 Great Portland Estates plc
Sustainability continued
Our performance during the year
In April 2023 we set a number of priorities for the financial year.
Undertake a risk assessment to better understand
the climate risk embedded within our supply chain
Our highest risks within our supply chain are associated
with our development activities and the management of
mechanical and electrical services within our buildings.
During the year, we embedded Our Brief for Sustainable
Spaces into the business. This has provided a clear framework
for our supply chain to report their sustainability performance
and improved the level of focus given to climate resilience
in their proposals. In particular this has included buildability
challenges as well as reviewing the availability of materials
within their own specialist supply chain.
Led by our Head of Projects, we have quarterly roundtables
with our supply chain partners from across the building life
cycle. This includes architects, structural engineers, quantity
surveyors, MEP consultants and contractors. During the year
these have focused on the availability of cement replacements
to help lower the embodied carbon of structures, as well as
investigations into the use and availability of low-carbon
materials and the implementation of alternative structural
design. This focus is supporting the improved resilience of
our developments and carbon reduction.
During the year we retendered our portfolio mechanical and
electrical services contract, The tender process incorporated
more sustainability and social impact requirements to
improve engagement from our service partners on how they
can support us in delivering more efficient, climate resilient
buildings. The tender incorporated reward mechanisms for
innovative approaches to building energy optimisation,
comfort reporting and life cycle analysis to support a more
data-driven approach to the maintenance of our portfolio.
Our partnership with Responsibly, an AI-enabled sustainability
due diligence provider, and Nutral, a sustainable supply chain
auditor, has improved our understanding of the climate-related
processes of our supply chain. During the next financial year
we will continue to work with these businesses to support
the delivery of our supply chain engagement goal, now
incorporated within our updated Roadmap to Net Zero.
Create net zero carbon asset plans, informed
by data from our portfolio metering project
Despite not yet fully formalising net zero carbon transition
plans for each asset, the findings of the initial phase of this
work resulted in the implementation of an 18-month portfolio
wide metering project. This project is nearing its conclusion
and is already substantially improving the quality and
granularity of energy data. The completion of this project
will enable more rapid identification of further energy
efficiency measures to support us as we respond to tightening
legislative requirements and increasing customer and investor
expectations on energy efficiency. Additionally, our improved
data will be used to create a portal to allow our customers
to access their energy data when convenient for them.
This will support them in monitoring their own performance
In order to become a climate resilient
business, we are addressing transitional
climate risk, integrating climate adaptation
measures into building design and working
to support the resilience of our customers,
suppliers and communities.
Our commitments
Our Sustainability Statement of Intent, updated and
relaunched in May 2023, repositioned our approach to
climate resilience. A climate resilient business requires a
net zero carbon pathway to mitigate carbon emissions and
a climate adaptation plan to support business resilience
to climate change. We have therefore committed to:
– addressing the transitional risk of climate change
and implementing net zero carbon plans at each asset;
– integrating climate adaptation and physical resilience
measures into our buildings;
– working with our supply chain partners to improve
the resilience of our supply chain; and
– supporting the climate resilience of our communities.
Management of climate resilience
Our Sustainability Statement of Intent, Roadmap to
Net Zero and Our Brief for Creating Sustainable Spaces
provide a framework (see page 37 for more on our policies
and strategy) to support us in addressing the transitional
risks of climate change. This includes the risk of extensive
policy, legal, technology and market changes to address
mitigation and adaptation requirements related to climate
change. Additionally, they provide strategic direction on
how we will adapt to the physical risks associated with more
frequent extreme weather events or longer-term shifts
in precipitation and temperature. A full disclosure on the
risks and opportunities connected with climate change
along with our governance arrangements can be found on
pages 37 to 38 and in our TCFD disclosure on pages 52 to 61.
We are integrating
climate resilience
across our business
40
Great Portland Estates plc Annual Report 2024
Supporting the resilience of our communities
As energy costs continue to escalate, the link between the
climate crisis and social inequality is clearer than ever. In the
second year of our partnership with National Energy Action,
we continued to support their ‘Warm Welcome’ in London
programme. This provided energy saving advice and financial
support to 95 parents and carers struggling to pay their
energy bills. We have also continued to prioritise supporting
community groups who maintain London’s green spaces,
including Bankside Open Spaces Trust and London Wildlife
Trust. During the year, alongside our supply partners, we spent
more than 170 hours volunteering for charities supporting
climate resilience. See Social Impact on pages 50 to 51.
Through our membership of the Better Buildings Partnership,
recognising the importance of London’s climate resilience
to the success of our business, we outlined our experiences
through the consultation exercise undertaken by the
Greater London Authority as part of the London Climate
Resilience Review, We have also participated in the UKGBC
task group which has brought together experts from across
the built environment value chain to develop the UK’s
first shared pathway for adapting to a changing climate.
Reference: Building layers and their indicative lifespans on page 8
of GLA CE Statement guidance: https://www.london.gov.uk/sites/
default/files/circular_economy_statements_lpg_0.pdf
Our progress
Portfolio targeted
or rated EPC A or B
63.6%
compared to 51% in 2023 due
to our development pipeline
and upgrade programme
Increase in
biodiversity
3.1%
exceeding our year on year
3% biodiversity net gain target
Embodied
carbon analysis
100%
third party verified embodied
carbon analysis for all projects
over £5 million
Charitable
volunteering
170+
hours from GPE and supply partners
supporting climate resilience of our
London communities
on emissions reductions. During the next financial year, we will
be rolling this out across our portfolio and extending to water
and waste data where systems allow. Due to the complexity
of the project, some delays have been experienced during
the digitisation process, however we will be feeding our
much-improved data into refreshed net zero carbon asset
plans during the next financial year.
During the year, we also continued our EPC upgrade works,
looking to further increase the percentage of our buildings
rated as EPC A or B. With the inclusion of developments, the
percentage of our portfolio with EPC ratings of B and above
has increased by 12.9% (by floor area) from last year up to
63.6%. Due to our business model of repositioning poorly
performing assets, we do not expect to reach a position
where 100% of our buildings are rated A or B by 2030.
Create a climate transition plan
Despite not formally delivering a climate transition plan,
in May 2023 we updated our Sustainability Statement
of Intent and more recently have updated our Roadmap to
Net Zero – essentially, these documents set out our detailed
ambitions and actions to reduce our Scope 1, 2 and 3 emissions.
Further, our updated TCFD disclosure (see pages 52 to 61) sets
out the risks posed to our business by climate change and our
response to those risks. During the next financial year we will
be bringing these aspects together, as well as undertaking
an assessment of how we are contributing to the economy-
wide transition to a lower-carbon economy and our impacts
and dependencies. We expect to publish this in the final
quarter of the financial year ending March 2025.
Integrate climate adaptation and resilience
measures into our buildings
During the year we increased biodiversity net gain across
the portfolio by 3.1% from the 2023 baseline, through the
enhancement of existing biodiverse living roofs and new
planters at Woolyard, SE1, Hanover Square, W1 and The
Hickman, E1. During the year we also undertook biodiversity
learning tours to support the understanding of the GPE team
on biodiversity net gain and benefits of ecosystem services.
Through design, we are integrating measures such as passive
solar shading, sustainable drainage systems, including blue
roofs, and greywater and rainwater harvesting as standard
to support the climate resilience of our buildings.
By using the ‘Building in Layers’ approach, as highlighted
opposite, our Soho Square team have been able to fine-
tune their thinking and consider the impacts of climate
change on items such as structural stability and robustness;
weatherproofing and detailing; the durability of materials;
the health, safety and wellbeing of our customers and
future building users; business continuity; and the capacity
of building services and suitability of renewable technologies.
Looking forward
– We will complete our Transition Plan and launch it
by 31 March 2025.
– Will complete our metering project (scheduled
to be complete by September 2024) and roll out
environmental dashboards using real-time data for
each asset, with access provided to our customers.
– We will complete our supply chain risk assessment
looking at the impact of climate change on
materials availability.
Skin/Shell
Structure/frame
Space plan/interior
Stuff/contents
3–5
years
3–40
years
7–30
years
30–120
years
20–60
years
Services (building)
Strategic Report – Annual review
41
Annual Report 2024 Great Portland Estates plc
Sustainability continued
Our updated Roadmap includes clearer steps to reduce
our Scope 3 emissions, including value chain targets as well
as an approach to treatment of residual emissions, ensuring
that corporate offsetting does not take place until we have
reduced our Scope 1, 2 and 3 emission by 90% (previously 50%).
To ensure our actions are in line with climate science and
to avoid following a Roadmap that may not be consistent
with addressing the climate crisis, we have aligned our
approach with the current Science Based Targets initiative
Corporate Net-Zero Standard.
Our steps to net zero by 2040
Reduce our embodied carbon by 52% by 2030
Our progress so far on reducing embodied carbon has
exceeded our expectations. Our first net zero carbon in
construction development, in line with the UKGBC Framework
Definition, was delivered at 50 Finsbury Square in 2023.
Reductions forecast within our developments currently in design
indicate a reduction of 44% from our 2020 embodied carbon
baseline. Whilst these reductions require verification upon
practical completion in each case, we are now increasing our
ambition. It is envisaged that by 2040 embodied carbon of our
developments and refurbishments will need to be less than
140kgCO2e/m2. This is an enormous challenge. We are therefore
focusing on the retention and reuse of materials, minimising
the use of virgin materials and improving design and
specification at smaller refurbishments and fit out projects.
Reduce our energy intensity by 47% by 2030
As of 31 March 2024, our energy intensity has reduced by 36%
compared to our 2016 baseline. We have therefore updated
our target, looking to reach an energy intensity of 123 kWh/
m2 by 2030 (a 47% reduction). This aligns our energy intensity
reduction trajectory with the CRREM pathway out to 2030.
We will continue our retrofit programme, implementing energy
efficiency projects, supported by our metering project and the
rapid digitisation of our energy data (for further detail see
page 44). To support faster progress against our targets we
are also increasing our Internal Carbon Price from £95 per
tonne to £150 per tonne. This is levied on our Scope 1 and 2
emissions and the embodied carbon of our developments
up to practical completion.
It is envisaged that by 2040 our energy intensity will need to be
less than 70kWh/m2. Substantial technological advancements
as well as customer and supply chain engagement will
be necessary to reach this target. Our business model of
repositioning poorly performing buildings will also add to
this challenge as we purchase inefficient buildings and
redevelop them to meet evolving standards.
Engage with our value chain
The Scope 3 emissions from our value chain amount to 79%
of our carbon footprint. Whilst we have always engaged with
our supply chain and our customers on sustainability we have
now formally set a target to engage with 80% of our customers
by energy consumption and to provide real-time energy data
to 100% of our customers by 2027, supporting behavioural
energy reductions. Within our supply chain we have set a
target to engage with 80% of our supply chain and service
partners, excluding principal contractors (who we already
engage closely with on embodied carbon). Additionally, we
are committed to developing a baseline and benchmarking
Our Roadmap to Net Zero v2.0 sets out in
detail how we will decarbonise our business,
reducing our emissions by 90% by 2040.
The updated Roadmap incorporates our
approach to reducing embodied carbon and
energy intensity, value chain engagement
and decarbonising our energy procurement.
Our commitments
Our Roadmap to Net Zero, relaunched in May 2024, has
updated our approach to decarbonisation in light of our
changing business and evolving definitions of net zero.
We have increased the ambition and scope of our Roadmap
in a number of areas, as well as adding new targets to
support our overall decarbonisation journey, We will:
– reduce our Scope 1, 2 and 3 emissions by 42% by 2030
and by 90% by 2040 to become net zero (when compared
to our 2023 baseline).
– reduce energy intensity by 47% (previously 40%) across
our occupied portfolio by 2030 (when compared to
our 2016 baseline).
– reduce our embodied carbon by 52% (previously 40%)
by 2030 across our new build developments and major
refurbishments (when compared to our 2020 baseline).
– engage with the top 80% of our customers (by energy
consumed) and the top 80% of our supply chain partners
(by spend) by 2027.
– remove fossil fuel derived energy from across our portfolio
by 2030.
– offset, only once we have achieved a 90% reduction across
all scopes, the total residual carbon to reach net zero.
Evolution of our approach
Climate change is the biggest long-term challenge we
face and, as the risk and need for urgent action increases,
the climate crisis has become both a moral and economic
imperative. With the built environment contributing
approximately 40% of global carbon emissions, our industry
faces a huge challenge as it moves to decarbonising the
whole building life cycle.
Last year we updated our Sustainability Statement of Intent
‘The Time is Now’, setting out our ambitious sustainability vision.
This year we have updated Our Roadmap to Net Zero, increasing
the ambition of our short-term targets to 2030 and the
interventions that will be necessary before we reach net zero
in 2040 after reducing 90% of our Scope 1, 2 and 3 emissions.
We are decarbonising
our business to become
net zero by 2040
42
Great Portland Estates plc Annual Report 2024
Energy intensity
reduction
36%
when compared
to our 2016 baseline
Revised Roadmap
to Net Zero
2040
covering Scope 1, 2 and 3
at 90% reduction
Carbon intensity
reduction
66.3%
when compared
to our 2016 baseline
Decarbonisation
Fund contribution
£338k
from the application of our internal
carbon price to embodied carbon
and operational emissions
Looking forward
– We will roll out our revised Roadmap to Net Zero.
– We will implement the findings of our energy
procurement review.
– We will commence our formal value chain
engagement programme.
– We will identify further opportunities to make
energy efficiency savings through the delivery
of our metering project across our portfolio.
Our performance during the year
In addition to the update to our Roadmap we also set
out a number of priorities for this financial year.
Continue implementation of NABERS UK Design
for Performance and Energy for Offices
During the year we achieved a 5 star design stage rating
for 2 Aldermanbury Square, EC2, and achieved a 3 star
rating for Elm Yard, WC1, under the Energy for Offices
NABERS scheme. The NABERS specification has been used
as a blueprint for our metering project, standardisation
of plant run times and other systems improvements.
Set out our carbon offsetting strategy
At the start of the financial year, we had envisaged that we
would set out a comprehensive carbon offsetting strategy.
Instead we have updated Our Roadmap to Net Zero with
residual emissions being treated once we have reduced
our Scope 1, 2 and 3 emissions by 90%.
Implement the requirements of ‘Our Brief for
Creating Sustainable Spaces’.
Since the completion of our first net zero carbon building
at 50 Finsbury Square, EC2, we are taking the best practice
and lessons learned across all development projects.
At 2 Aldermanbury Square, EC2, we are incorporating the
principles of the circular economy, including the dismantling
and reuse of over 1,500 tonnes of structural steel during
demolition. Through early stage contractor involvement,
collaboration with materials manufacturers and innovative
thinking, we are maximising the use of lower-carbon materials
and materials with greater recycled content.
Use our metering project to identify further
opportunities to make energy efficiency savings
We expect to complete our metering project during the
summer. Once complete, we will have much-improved granular
data to support further energy efficiency improvements.
tool to understand customer ambitions on sustainability,
and progress made by our service partners in achieving
their targets. By 2040 we hope to see this engagement
mean that all of our customers and supply partners have
verified science-based targets.
Decarbonise our energy consumption
Whilst we have consistently ensured that the energy we
procure is REGO backed or RGGO backed in the case of our
gas supplies, we are cognisant of the lack of transparency in
the REGO market. Whilst we remain committed to installing
renewable energy supplies at our properties, this is often
not practical at existing buildings, where there may not be
space. We have therefore made slow progress towards our
on-site renewable energy generation target. We are therefore
removing this target, in order to commit to the removal of all
fossil fuel derived energy from our buildings by 2030. We are
also embarking on a comprehensive review of our energy
procurement policy, including the review of power purchase
agreements and a target of 60% hourly matching of renewable
energy purchased by 2030, rising to 80% by 2040.
Residual emissions strategy
In our original Roadmap we had expected to reduce
our emissions by 50% by 2030 and then offset to net zero.
However, the offsetting of residual emissions has become
an increasingly complex issue with projects being called
into question and some doing more harm than good. We
are therefore increasing the scope of emissions reductions
needed to reach net zero, committing to reducing our
Scope 1, 2 and 3 emissions by 90% by 2040. Our increased
Internal Carbon Price of £150 per tonne will be used in the
intervening period to invest in the decarbonisation of our
value chain, supporting energy efficiency projects at our
projects and investment into alternative materials and
construction techniques. Offsetting is likely to remain part
of our strategy at asset level, aligning with the emerging
Net Zero Carbon Building Standard.
Working towards 2040
To meet the emissions reductions outlined above we will
need substantial technological advances, including industry
wide roll-out of materials passports and materials exchange
platforms to turbocharge the wider adoption of the principles
of the circular economy. In 2040, when we offset the remaining
10% of our emissions, we expect to invest in natural carbon
capture and storage and local projects where carbon credits
can be used to deliver a positive social impact.
Our progress
Strategic Report – Annual review
43
Annual Report 2024 Great Portland Estates plc
Sustainability continued
Streamlined Energy and Carbon Reporting (SECR)
Total carbon footprint
Year ended 31 March
2023/24
tCO2e
2022/23
tCO2e
Scope 1 emissionsA
1,255
1,556
Scope 2 emissionsA
2,092
2,221
Scope 3 emissions
Category 1 – Purchased goods and services
7,674
7,055
Category 2 – Capital goods
10,814
9,501
Category 3 – Fuel and energy-related activities
2,095
2,232
Category 4 – Upstream transportation and distribution
38
25
Category 5 – Waste generated (operations and development)
44
37
Category 6 – Business travel
59
91
Category 7 – Employee commuting
69
73
Category 11 – Use of sold products
872
3,272
Category 12 – End-of-life treatment of sold products
4
45
Category 13 – Downstream leased assetsA
6,090
6,0821
Total Scope 3 emissions
27,759
28,413
Total Scope 1, 2 & 3 emissions
31,106
32,190
A Metrics with independent limited assurance provided by PwC in accordance with the International Standard on Assurance Engagements (ISAE3000).
1. 2022/23 figures have been restated to reflect improved data quality and coverage for Downstream leased assets – Customer Procured Electricity.
NB Scope 3 Category 8 (upstream leased assets), 9 (downstream transportation and distribution), 10 (processing of sold products), 14 (franchises)
and category 15 (investments) are excluded from the footprint as per our Basis of Reporting due to not being applicable to the business.
Energy performance
We saw a 7% reduction in total energy consumption during
the year. The reduction was partly driven by reductions in
energy consumption for landlord areas, as electricity sub-
metered to our customers remained largely level year on year.
Direct electricity consumption for landlord-controlled common
parts reduced by 12%, and gas consumption for shared
services reduced by 11%.
This year, we outperformed our energy intensity target by
achieving 150 kWh/m2, against a benchmark of 191 kWh/m2
and a stretch target of 174 kWh/m2. Compared with last year,
our energy intensity dropped 6% from 158 kWh/m2. A 36%
reduction in energy intensity has been achieved when
compared with our 2016 baseline.
Due to further investment in energy efficiency and building
optimisation, there was a 13% reduction during the reporting
year in whole building electricity and gas consumption at our
highest energy consuming site, 200 Gray’s Inn Road, WC1.
Further reductions were driven by the movement of some
smaller buildings out of the operational portfolio into the
development pipeline in the second half of the period.
Energy efficiency actions
During the reporting year our primary focus has been on rolling
out our updated metering strategy, delivering improvements to
accuracy, scope and granularity of our metering infrastructure.
The project covers electricity, heat and water, building
management system (BMS) controls and networks, as well as
gas where applicable for shared services. The strategy has been
carried out utilising best practice and lessons learned from our
implementation of the NABERS UK energy rating scheme and
will drive improved collaboration with our customers on energy
efficiency improvements to support energy reductions.
Key energy efficiency actions taken during the reporting
year include:
– optimisation of gas-powered infrastructure to support
energy and carbon savings, removing out-of-hours hot
water demand and auxiliary equipment requirements
leading to 130,000kWh savings annually with an
immediate return on investment;
– installation of solar photovoltaic panels at our Woolyard
building, projected to save 150,000kWh annually and
have a return on investment of 2.5 years;
– NABERS UK Energy for Offices readiness assessment and
certification at Elm Yard, WC1. The building achieved a 3
star rating, providing great insight into how we can improve
this building, and others, going forward; and
– energy audits to meet legal compliance requirements.
For more detail on our performance see pages 42 and 43
Performance against our Roadmap to Net Zero
As a signatory of the Better Buildings Partnership’s (BBP) Climate
Commitment, we are required to disclose progress annually
against our Roadmap to Net Zero. Our carbon footprint and
narrative on progress during the last year is set out below.
Overall performance
Our total carbon footprint (Scopes 1, 2 and 3) decreased by 3%
or 1,084tCO2e during the year. We have made positive progress
where carbon emissions are in our direct control as well as with
respect to embodied carbon intensity. Absolute embodied
carbon (capital goods) and emissions related to the products
and services we procure have increased in the year, driven
by an increase in development activity and shift towards our
Fully Managed product. It is likely that in the short term these
absolute numbers will continue to rise as we seek to improve
data granularity and collection processes.
Scope 1 and 2 emissions
Our Scope 1 and 2 (location-based) emissions decreased
by 11% or 430tCO2e compared with last year. This decrease
was driven, in part, by energy the efficiency projects and
portfolio changes, as detailed in the section above.
44
Great Portland Estates plc Annual Report 2024
Indirect energy-related Scope 3 emissions
Our Scope 3 emissions from customer electricity (both sub-
metered and directly procured by customers) reduced by 9tCO2e
compared with last year. Engaging our customers to continue
to reduce energy consumption is going to be critical for us to
meet our net zero carbon ambitions, as these cover Scope 3
emissions from customer energy usage. This requirement is
now incorporated within our updated Roadmap to Net Zero.
Indirect non energy-related Scope 3 emissions
The majority, 89%, of our carbon emissions fall outside our
direct control and form our Scope 3 emissions; these are emitted
through our value chain – customers and supply partners.
The 2.3% reduction in our total Scope 3 carbon emissions for
the year was driven primarily by our asset disposals, equating
to lower use, and end-of-life treatment, of sold products.
During the reporting period, although we did not complete
any major developments, our construction activity increased in
the year with projects such as 2 Aldermanbury Square, EC2, and
others, such as 6 St Andrew Street, EC4, Alfred Place, WC1, and
Minerva House, SE1, starting development activities. Our on
floor refurbishment work has also increased in line with our
Flex ambition. As such, has led to a 17% increase in absolute
embodied carbon emissions. Our Carbon Measurement
Framework continues to support consistency in reporting
and will be adopted across all development activities in
the coming year.
Emissions from corporate business travel and employee
commuting have decreased after a year in which travel picked
up post-COVID. Taken together, business travel, employee
commuting and working from home emissions have decreased
by 23% compared with last year. This is also due to an increase
in the use of virtual meetings and utilisation of our Head Office
to facilitate face-to-face collaboration.
Emissions from operational procurement, including maintenance
and repair materials and services, have remained steady
as a proportion of our footprint. The increase of 5% this year
compared to last is due to greater spend in more carbon
intensive procurement categories, again highlighting how
integral supplier engagement is to ensure procurement
decisions include carbon considerations alongside cost.
Carbon footprint progress annual carbon emissions (tCO2e)1
6,053
5,070
4,894
7,139
4,289
309
3,095
19,726
5,669
6,973
4,681 93
12,410
29,826
3,777
6,082
9,744
164
12,423
32,190
3,347
6,090
11,370 127
10,172
31,106
7,136
11,405
424
2,418
26,453
9,320
17,921
Scope 1 & 2: Owner generated energy emissions
Scope 3: Occupier generated energy emissions
Scope 3: Embodied carbon emissions from development activities
Scope 3: Corporate emissions
Scope 3: Other (non-energy) emissions from investment portfolio
Roadmap target2
45,000
0
9,000
18,000
27,000
36,000
2023
2022
2021
2020
2019
2024
8,780
42,442
368
13.6k
During 2023/24 we participated in:
We are signatories of:
Longer-term performance
In Our Roadmap to Net Zero v2.0, we set out our ambition to
reduce Scope 1, 2, and 3 emissions by 42% by 2030 and 90%
by 2040 from our 2023 baseline. The graph below shows our
progress to date since 2019. This demonstrates the need to
monitor performance towards net zero over the longer term,
as our normal cycle of business activity, such as our decision
to sell or develop assets, will inevitably cause fluctuations in
emissions. Our overriding aim must be to decouple the growth
and economic performance of our business with our carbon
footprint. Over the next year we will embed our Roadmap v2.0
ambitions and incorporate our refreshed approach in a robust
and transparent transition plan.
Further information
Our full Sustainability Performance tables, aligned with
EPRA Sustainability Best Practice Recommendations and
SASB Real Estate indicators, can be found at www.gpe.co.uk/
sustainability/governance-reporting. This includes more
extensive detail on our emissions and our Basis of Reporting.
We have also disclosed our performance to numerous
organisations and external benchmarks and are signatories
to relevant commitments detailed below.
1. 2022/23 data restated for Downstream Leased Assets – Customer Procured.
2. 2030 target aim from Roadmap to Net Zero v2.0.
Strategic Report – Annual review
45
Annual Report 2024 Great Portland Estates plc
Our SECR disclosure presents our greenhouse gas (GHG) emissions across Scope 1, 2 and select 3 metrics and associated
energy use, together with an appropriate intensity metric, as required by the Large and Medium-Sized Companies and Groups
(Accounts and Reports) Regulations 2008 (as amended). Our complete Scope 3 disclosure can be found on page 44.
Energy consumption
Year ended 31 March
Unit
2023/24A
2022/23
YoY
% change
Energy
consumption1,2
Gas used for shared services in managed portfolio
(kWh)
6,514,198
7,325,541
-11%
Landlord purchased electricity used in common parts areas
for the managed portfolio
(kWh)
10,103,847
11,486,161
-12%
Landlord procured electricity sub-metered to customers
(kWh)
17,662,321
17,915,413
-1%
Total absolute energy use
(kWh)
34,280,366
36,727,115
-7%
Absolute energy
intensity4
Landlord purchased energy used for common parts areas
and electricity sub-metered to customers (Scope 1, 2 and 3)
across the portfolio divided by normalised floor area
(kWh/m2)
150
158
-6%
GHG emissions
Absolute Scope 1 and 2 Greenhouse Gas emissions
Unit
2023/24A
2022/23
YoY
% change
Scope 1
emissions
Emissions from the combustion of fuel:
gas used for shared services in managed portfolio
(tCO2e)
1,192
1,337
-11%
Emissions from operations of facilities:
fugitive emissions from refrigerant losses
(tCO2e)
63
219
-71%
Total Scope 1 emissions
(tCO2e)
1,255
1,556
-19%
Scope 2
emissions
Emission from the purchase of electricity used in common
parts areas for the managed portfolio (location-based)
(tCO2e)
2,092
2,221
-6%
Emission from the purchase of electricity used in common
parts areas for the managed portfolio (market-based)2
(tCO2e)
0
0
-%
Total Scope 2 emissions
(tCO2e)
2,092
2,221
-6%
Total Scope 1 and 2 emissions (location-based)
(tCO2e)
3,347
3,777
-11%
Total Scope 1 and 2 emissions (market-based)
(tCO2e)
1,255
1,556
-19%
Emissions intensity Scope 1 and 2 (location-based)
(tCO2e/m2)
0.0516
0.0593
-13%
Scope 3
emissions
Category 13: Emissions from landlord purchased
electricity sub-metered to customers
(tCO2e)
3,657
3,464
6%
Total energy-related Scope 1 (incl. fugitive emissions
from refrigerant losses), 2 and select Scope 3 emissions
(tCO2e)
7,004
7,242
-3%
Absolute
emissions
intensity3
Emissions from landlord purchased energy used for
common parts areas and electricity sub-metered
to customers (Scope 1, 2 and 3) across the portfolio
divided by normalised floor area
(tCO2e/m2)
0.0303
0.0303
0%
A Metrics with independent limited assurance provided by PwC in accordance with the International Standard on Assurance Engagements (ISAE3000).
1. As a business 100% focused on central London, all energy is consumed in the UK.
2. 100% of purchased electricity is REGO-backed and 100% of purchased gas is biogas/carbon offset gas. More detail can be found in our Basis of Reporting.
3. The intensity metrics include energy-related building emissions (location-based), excluding customer-procured energy. Floor area is an appropriate
intensity metric as it directly relates to our business activities.
NB Numbers in this section may appear different to the Sustainability Performance tables due to rounding treatment.
Sustainability continued
Streamlined Energy and Carbon Reporting (SECR) continued
Our methodology
Emissions are calculated using the UK Government’s
Environmental Reporting Guidelines and the Greenhouse Gas
Protocol. We have used the operational control approach for
consolidating our GHG emissions; included in this are emissions
and energy usage from our managed properties (including 100%
of emissions from joint venture properties) and head office usage.
Where we have purchased electricity, which is sub-metered
to customers, this is itemised separately under our Scope 3
emissions, but is included within our energy intensity target.
Our full Sustainability Performance tables, including more
extensive reporting on our emissions aligned with EPRA
Sustainability Best Practice Recommendations and SASB
Real Estate indicators, can be found at www.gpe.co.uk/
sustainability/governance-reporting
Independent limited assurance
PwC LLP has provided independent limited assurance over the
published metrics identified by ‘A’ in the SECR, and supporting
performance tables, in accordance with the International
Standard on Assurance Engagements ISAE3000 and ISAE3410.
PwC’s full unqualified Assurance Statement, together
with our Basis of Reporting, can be found on our website at
www.gpe.co.uk/sustainability/governance-reporting
ESG-linked Revolving Credit Facility (RCF)
Our updated Roadmap to Net Zero includes more ambitious
short-term targets. We have aligned our RCF requirements,
in partnership with our lenders, to these new ambitions.
The table opposite outlines our performance against the
final year of the existing RCF targets.
46
Great Portland Estates plc Annual Report 2024
KPI 1
Reduction in energy consumption
KPI 2
Reduction in carbon impact
KPI 3
Increase in biodiversity
In line with our 40% reduction in energy
intensity by 2030 target set out in Our
Roadmap to Net Zero v1.0, our RCF KPI is
to reduce our portfolio energy intensity
(kWh per m2) by 25.5% by 2026. When
compared with our 2016 baseline of
234 kWh/m2.
This target applies to energy consumed
within our portfolio and to all energy
purchased by GPE, including electricity
sub-metered to our customers.
In line with our 40% reduction in the embodied
carbon of our developments by 2030 target
set out in Our Roadmap to Net Zero v1.0,
our RCF KPI is to reduce our embodied
carbon of completed projects by 25% by 2026.
This is measured against a 2020 baseline
of 954kg CO2e per m2.
This target is tested at each design
phase from RIBA Stage 3, and again at
practical completion to verify reductions.
Embodied carbon reviews are undertaken
by an independent consultant, in line with
the RICS professional statement.
We are committed to delivering an
increase in biodiversity net gain across
our buildings.
Our KPI requires us to achieve at least
a 3% uplift in biodiversity net gain each
year on a like-for-like basis.
Target
For March 2024, the RCF target was
an energy intensity reduction of 18.5%
(191 kWh/m²), when compared with
our 2016 baseline.
Target
For March 2024, we targeted a 20%
reduction in embodied carbon against
our 2020 baseline for all developments
in design or construction phase.
A 15% reduction was targeted for buildings
reaching practical completion in 2024.
Target
For March 2024, we targeted a 3%
increase in biodiversity net gain
across our existing portfolio on
a like-for-like basis.
Achievement
For the year ended March 2024 we
achieved a reduction in energy intensity
of 36% (150 kWh/m²) when compared
with our 2016 baseline.
This reduction was delivered through the
investment in energy saving initiatives
undertaken during the last two years,
particularly at our most energy intensive
site, 200 Gray’s Inn Road, W1.
Achievement
We achieved an average reduction of 44%
for the seven projects in scope, which included
2 Aldermanbury Square, EC2, 6 St Andrew
Street, EC4, Egyptian & Dudley House,
W1, Alfred Place, WC1, 141 Wardour St, W1,
Minerva House, SE1 and French Railways
House & 50 Jermyn Street, SW1.
There were no projects in scope for
practical completion.
Achievement
For the year ended March 2024, we
achieved a 3.1% uplift in biodiversity
net gain across our portfolio.
This increase was driven by a living
roof retrofit at Woolyard, SE1,
the installation of a green wall at
45 Mortimer Street, W1 and the
installation of a green roof at
New City Court, SE1.
Three long term sustainability KPIs are integrated into our ESG linked RCF.
EPC ratings: percentage of portfolio (by sq ft)
B
E
C
A
0
40
G
F
D
15
35
30
25
20
5
10
Current managed portfolio EPCs
Current FRI EPCs
Targeted under development EPCs
18.2
17.7
0.2
1.4
0.8
2.0
Uncertified
0.1
7.3
23.4
9.0
5.6
1.9
12.4
0
0
Energy Performance Certification
Our portfolio is fully compliant with 2023 EPC legislation,
(no F or G rated space). A greater proportion of our floor area
now sits in our Development Pipeline and as such targeted
A or B space has increased to 23.8% (2023: 7.3%).
During the year, our managed and FRI properties that are
EPC A or B rated decreased to 40%A (2023: 43%) and the amount
of unrated space increased to 2%A (2023: 1%). Both of these
changes are due to our acquisition of the Soho Square Estate.
However, overall managed and targeted floor area at EPC A
or B has increased from 50.7% to 63.6%.
In 2022, we estimated that the cost to get our portfolio
to EPC B and above would be approximately £23 million.
As we continue to acquire new assets for repositioning,
and revisit a number of existing properties after the changes
to the EPC methodology, we will review this estimate during
the forthcoming year as part of our transition plan and
double materiality exercise.
Strategic Report – Annual review
47
Annual Report 2024 Great Portland Estates plc
Sustainability continued
As part of that focus we have taken part in a study led by
researchers at the Institute of Sustainability Leadership,
University of Cambridge, to provide our experience of
exploring opportunities to deliver sustainable coworking
spaces that improve inclusivity, and the wellbeing experience
of a more diverse range of users.
The purpose of the research is to explore the inclusivity
and wellbeing criteria of flexible and coworking spaces to
understand how accessible they are, and how designs might
be adapted to help ensure that they are made available to as
wide a range of users as possible. We hope to use the findings
of the research which are of particular importance to us
at GPE as we continue the expansion of our Fully Managed
product and the diversity of customers that are looking
for inclusive office space.
Ensuring improved air quality across
our portfolio and communities
At our development Minerva House, SE1, our supply chain
partner, GPS Marine, has confirmed it is the first private
development on the River Thames to utilise a barge to remove
materials from site. The utilisation of the barge is reducing
the impact of the development on local stakeholders such as
Southwark Cathedral and Borough Market, as well as local
community residents. We are working with partners Morrisroe
and Multiplex to deliver the project.
Our retrofit strategy aims to maintain over 70% of the existing
building by retaining the structure and façade. By utilising
the barge for construction logistics, we are reducing the
total number of heavy goods vehicles that will travel to and
from the local area during the deconstruction phase. With the
River Thames acting as the primary route of transport, the
barge provides an alternative route to remove waste in an
area with very high footfall, as well as reducing noise and
air pollution in a congested, pedestrian heavy environment.
Monitoring and managing the health
and wellbeing of our customers
By implementing an effective monitoring regime we are
able to quantify a number of different measures. These include
air quality, temperature and noise levels, To support these
quantifiable metrics we also need to understand how these
impact on our customers in a qualitative sense. We therefore
regularly undertake surveys to seek feedback from our
customers and include questions in connection with the health
and wellbeing of their employees. This includes a review of how
our amenity spaces and outside spaces benefit our customers,
and this data is being fed back into our design process.
A sustainable building should also contribute
to the wellbeing of our customers and
the local community, supporting healthier,
happier and more productive lives.
Our commitments
The role our buildings play in the wellbeing of not only their
users, but the communities that surround them, should not
be underestimated. A sustainable building must have health
and wellbeing front and centre. We are integrating wellbeing
considerations into the design of our spaces, supporting
improvements in external air quality across our portfolio
and the communities in which we operate. Furthermore, we
are improving our internal spaces to enhance our customers’
experience and promoting initiatives that support the health
and wellbeing of our people, customers and service partners.
Management of health and wellbeing
Our Brief for Creating Sustainable Spaces ensures that
our buildings are designed to enable the achievement
of wellbeing ratings, such as the WELL Building Standard
or the Fitwel rating. It also brings together our focus on
creating biodiverse outdoor space for our customers
to promote social interaction and access to nature.
The delivery of these accreditations is achieved through
effective stakeholder management with regular feedback
provided on key challenges and progress made.
Our performance during the year
In April 2023 we set a number of priorities for the financial year.
Integrating wellbeing into the design
and operation of our spaces
We are constantly looking for ways to better consider the
implications of the way we design and operate our spaces
with particular regard to the health and wellbeing of our
customers and employees.
We are putting
health and wellbeing
front and centre
Looking forward
– We will continue to deliver increases in biodiversity
across the portfolio and establish a methodology
for reporting the ecosystem service benefits.
– We will review the integration of wellbeing
certifications into our internal design briefs,
ensuring benefits for the customer are paramount.
– We will replicate the template of our own Health
and Wellbeing Employee Impact Group with
customers and suppliers.
Our progress
Net Promoter Interviews
122
interviews conducted to gather
customer feedback including on
the sustainability of spaces
Heavy goods vehicle
movements avoided
65%
reduction in HGVs for deconstruction
phase at Minerva House, SE1
48
Great Portland Estates plc Annual Report 2024
Looking ahead, we will continue to prioritise the safety and
wellbeing of all individuals within our properties. We continue
to carry out regular audits under our Health and Safety audit
programme and conduct leadership tours to reinforce our
commitment to safety standards.
As we seek to continuously improve, we are undertaking
a review of our suite of Health and Safety policies and
procedures in the coming year to ensure they align with
the latest industry standards and regulatory requirements.
Health and safety accidents by year
Where accidents occur, our goal is to provide assistance and
foster collaboration within our supply chain. This collaboration
aims to enhance our understanding and capitalise on
opportunities for improvement. By doing so, we can proactively
mitigate future risks and uphold a culture that prioritises the
wellbeing of all workers, free from blame.
Health & Safety statistics
2023/24
2022/23
2021/22
Enforcement notices
or fines received
–
–
–
Employees
Work-related
fatalities (A)
–
–
–
Lost day rate (A)
–
–
–
Injury rate (A)
–
–
0.41
Absentee rate (A)
0.005
0.006
0.005
At our occupied
buildings
Work-related
fatalities
–
–
–
Reportable
injuries/incidents
1
1
1
Minor injuries
3
2
8
At our developments
Work-related
fatalities
–
–
–
Reportable
injuries/incidents
1
–
1
Minor injuries
2
–
4
A Metrics with independent limited assurance provided by PwC in
accordance with the International Standard on Assurance Engagements
(ISAE 3000). Further detail can be found in our Basis of Reporting at
www.gpe.co.uk/sustainability/governance-reporting
We are dedicated to creating and maintaining
safe, healthy and secure environments for our
communities, our people and our partners.
We are constantly striving to set the highest
standards for health and safety in the
industry and are committed to continuously
improving our practices and procedures.
We monitor our health and safety performance across our
portfolio through a set of key performance indicators, which
help us to track our progress and identify areas for improvement,
whether that be data granularity or system efficiency. Our
proactive approach includes regular audits, regular training
for our employees and supply chain, and a focus on fire
safety management in line with current legislation.
Recognising the importance of proactive measures in health
and safety management, we conducted a comprehensive
training needs analysis in 2023/24 and established a health
and safety training budget to address identified areas.
This will be reviewed and maintained at regular intervals.
Additionally, we are proud to announce that we have attained
Level 3 Disability Confident Leader status, further demonstrating
our commitment to inclusivity and accessibility.
We will remain focused on fire safety management across
the portfolio with special attention on our residential buildings
to ensure compliance with the Building Safety Act 2022.
During the year we have registered our residential buildings
falling within the scope of the Building Safety Act 2022
and commenced preparations to gather the necessary
information for the requisite building safety case reports.
We remain dedicated to proactive health and safety measures,
inclusive practices, and compliance with evolving legislation.
Providing safe,
healthy and secure
environments
Looking forward
– We will continue our programme of Health and
Safety audits and leadership tours with a focus
on consistency and continuous improvement.
– We will further embed our Health & Safety
Management System and refresh key policies
and procedures.
– We will maintain focus on the Building Safety Act 2022.
Our progress
Disability Confident
Level 3
Highest level of the UK Government
scheme, championing equity,
equality and diversity
Building Safety Act 2022
100%
of buildings registered that fall
within the scope of the Act
Strategic Report – Annual review
49
Annual Report 2024 Great Portland Estates plc
Social value created
2023/24
2022/23
2021/22
2020/21
Total social
value created
£1,494,000
£1,157,000
£631,000
£620,000
Direct GPE
contributions
(cash)
£238,000
£486,000
£215,000
£475,000
Additional
social value
created
£1,256,000
£671,000
£416,000
£145,000
Our performance during the year
In April 2023 we set out a number of priorities for the
financial year:
To better integrate social value within our planning applications
During the year we continued to work on completion of the
Section 106 agreement for our Minerva House, SE1 development
and refined the design at French Railways House & 50 Jermyn
Street, SW1.
Enabling works commenced at Minerva House. Primarily the
works were serviced by a pontoon on the river to ensure that
the strip-out of the building did not increase traffic movements
through an already congested area of south-east London.
This minimises the impact of the development site on the
local community. Meanwhile, at French Railways House &
50 Jermyn Street, SW1 we are maximising biodiversity net gain
to support improvements to biodiversity in Westminster.
We have long-standing relationships with Bankside
Open Spaces Trust and Young Westminster Foundation.
Through both organisations we are supporting employability
programmes in the planning authorities of Southwark
and Westminster respectively to support people who may
have difficulties accessing employment opportunities.
To further support the growth of social enterprises
across the business, having already established strong
relationships through our Fully Managed buildings
For social enterprises to build their customer base they need
access to new audiences. During the year, we worked with our
service partners to ensure that where pop-up events were
being organised within our spaces, social enterprises were
invited to take part in the event. By improving engagement
with our supply chain on the benefits of supporting social
enterprises we saw spend increase to £1 million, including
£822,000 spent through our service partners.
To improve the recording of the social value generated
by our suppliers and to further integrate social value
into relationships within our supply chain
During the year, we rolled out our Impact reporting framework
to our service partners to allow them to record activities
undertaken by them at our buildings that create social value.
These activities included NG Bailey employing apprentices
on GPE sites, payment of the London Living Wage (set by
the Resolution Foundation annually) to all service partner
employees working at our buildings and cleaning provided
by City and Essex free of charge to The Story of Christmas,
a charity currently occupying space at Carrington House,
London W1.
We know that the socially disadvantaged
members of our communities will be most
impacted by climate change. We are therefore
committed to supporting the people and
communities with whom we work to have
a better quality of life, whilst also enabling
a thriving economy for London’s future.
Our commitments
Our Social Impact Strategy, first published in 2021, sets out
how we will deliver our vision to create at least £10 million
of social value in our local communities by 2030 and create
a lasting positive social impact. Through the four pillars of
our Social Impact Strategy we are contributing to the needs
of the London boroughs in which we are working.
Enabling
healthy and
inclusive
communities
Championing
diverse skills
and accessible
employment
opportunities
Supporting
the growth of
local business
and social
enterprise
Connecting
people
with urban
nature
Management of social impact
Progress against the commitments in our strategy is overseen
by the Social Impact Committee and is reported periodically
to the Executive Committee and to the Board. Our Charities
Network oversees the relationship with our main charity partner,
XLP, and donations more broadly, including the awarding of
£15,000 each year to employee nominated charities.
We use the National Social Value Framework (National TOMS
framework) to measure the social value generated by our
business. The framework allocates a proxy value for time
spent or pound invested and is one of the most widely used
methods for the measurement of social value, including
by government, local authorities and businesses.
However, social impact is generated in a variety of ways and
some of these are not easily measured financially. Therefore,
we try and take a balanced approach between those activities
that generate the most social value (in our case the donation
of space to charities) and the broader, long-lasting benefits
associated with activities such as social enterprise spend
and time spent on employability and skills programmes.
Since the launch of our strategy, we have created £3.8 million
of social value towards our £10 million target.
The majority of our cash donations are made to our charity
partners. For the year ended March 2024, our charity partners
were XLP, National Energy Action, Young Westminster
Foundation and Bankside Open Spaces Trust.
Sustainability continued
We are creating a lasting
positive social impact
in our communities
50
Great Portland Estates plc Annual Report 2024
Looking forward
– We will implement biodiversity offsetting strategy by
partnering with local business improvement districts
(BIDs) and local nature-focused charities.
– We will review the appropriateness of our £10 million
social value goal and whether a monetary target is still
the right approach.
– We will review the Social Impact Strategy in its entirety
to ensure that it is still relevant to our changing
business three years after publication.
Our progress
Social value created
during the year
£1.5m
GPE created social value (not including
service partner contributions)
Hours donated to
charity partner, XLP
1,450
donated by GPE employees
(target: 240 hours)
Weeks of internships
provided
26
through Leonard Cheshire,
Change 100 programme
Spend with social
enterprises
£187k
direct annual spend with voluntary,
community & social enterprises (VCSE)
Championing accessible employment opportunities
To promote entry-level roles at GPE and reach a wider,
more diverse talent pool, we continued our Early Careers
Programme, hiring two Customer Experience apprentices.
We also hosted our first work placements through the Leonard
Cheshire Change 100 programme which led to 26 weeks of
internships in total, with all interns paid at least the London
Living Wage. During the year ended March 2024, we hosted
154 apprenticeship weeks. Additionally, our team reached
90 young people through Career Workshops.
We also actively advocate for ethical labour practices
within our supply chain, for example by ensuring all
people working on our behalf are paid the London Living
Wage, and by undertaking Labour Practice Audits to help
eradicate modern slavery.
Working with our customers and service partners
to create social impact
We recognise that in order to create a lasting positive social
impact and contribute to improving the resilience of our
London communities we must work with our customers
and service partners.
This has included extending the reach of social enterprises
and our charity partners by supporting their participation in
building events. Additionally, we are supporting our service
partners in creating opportunities for early careers including
apprenticeships, volunteering and work experience. During
the year, this created an additional £1.3 million of social value.
To develop our biodiversity offsetting strategy to support
the climate resilience of our communities and delivery
of nature-based solutions
Recognising the need to support our communities become
more climate resilient and the positive social impact of
increasing biodiversity and access to nature, during the year
we commenced work on a biodiversity offsetting process.
A KPI of our ESG-linked RCF is to increase biodiversity across
our portfolio. This is much easier to achieve on our larger
development sites or at our properties with more extensive
outside spaces. However, this can be more difficult at smaller
existing buildings where roofs would need to be strengthened
to install biodiversity and there are no terraces to install
planters. In these cases an assessment is undertaken to
ascertain the likelihood of planting surviving elsewhere on-site,
or whether it would be more impactful to invest in biodiversity
in existing community gardens and parks. Whilst we will always
try and install biodiversity interventions at our properties,
not least due to the increased resilience of buildings with
enhanced greening, the mechanism to offset biodiversity has
now been agreed with an ecologist for those occasions where
biodiversity offsetting would be a more impactful action.
Other key successes include:
– Generating £960,787 of social value through the letting
of a total of 32,500 sq ft of space to six charities.
– Providing 150 skills-based pro bono volunteering hours
for charities, social enterprises and not-for-profit
organisations.
– The GPE team spending 1,890 hours volunteering.
Delivering impact through charitable partnerships
During the year, we held our biggest ever Community Event,
with more than 100 of the GPE team taking part in fundraising
activities. Activities included the National Three Peaks
Challenge, walking the South Downs Way, tandem skydives
and a walk through the London Royal Parks and a total of
£82,000 was raised for XLP. Additionally, groups participated
in a careers workshop for young people supported by XLP and
gardening activities with the Wildfowl and Wetland Trust.
We continued to support National Energy Action, funding
their Warm Welcome initiative in London. The Warm Welcome
initiative supports new and expectant parents in London
who are struggling to balance the financial impact of a
young family and high energy bills. Support is given through
community advice sessions to families and one-to-one
advice to vulnerable parents with more complex issues.
The fund also supports community energy fun days to provide
interactive energy advice to both children and parents,
and an emergency hardship fund to provide essential items
such as blankets, flasks and air fryers to struggling families.
Strategic Report – Annual review
51
Annual Report 2024 Great Portland Estates plc
Great Portland Estates plc has, at the time of publication,
complied with the requirements of LR 9.8.6(8)R by including
climate-related financial disclosures consistent with the
TCFD Recommendations and Recommended Disclosures.
Consideration has also been given to the all sector guidance
updated in 2021 with regards Strategy: a) and b), and
Metrics and Targets: a).
Additional supporting information that can be found on
pages 14 to 17, page 46 in our SECR table (performance)
and pages 74 to 87 (Our approach to risk). For further
complimentary information, see www.gpe.co.uk/
sustainability/governance-reporting
Governance
Board oversight of climate-related risks
and opportunities
The Board, typically meet six times annually, has ultimate
responsibility for oversight of climate and sustainability risks
and opportunities with a particular focus on the impact
on our business strategy. Our Governance structure can
be found on page 38 of this report. During the year:
– the Board reviewed the definitive appraisal for the
Minerva House, SE1, redevelopment including embodied
carbon impact, use of the barge for servicing and
payment to the Decarbonisation Fund;
– the Board approved the acquisition of the Soho Square
Estate which included a review of the implications for
our net zero commitments;
– the Board approved the repositioning of our Roadmap to
Net Zero, recognising progress in reducing carbon emissions,
evolving definitions of net zero carbon and the need to
incorporate more of our emissions into our target;
– the Audit Committee reviewed findings from the ESG data
assurance process and outcomes from a sustainability
internal audit; and
– the Remuneration Committee approved new ESG-
linked KPIs for the corporate bonus scorecard.
As climate change and decarbonisation is considered
a principal risk for the Group, at the half year and year-
end, as part of our robust risk assessment review, the
Executive Committee, Audit Committee and Board review
and assess the impact on the business of climate-related
risks. This process involves consideration of the risks,
internal controls, emerging risks and ongoing monitoring
and mitigation of risks. Opportunities connected with
market transition are also considered.
Risks discussed included EPC and energy performance
legislation and changes to planning requirements, in particular
new requirements from Westminster City Council on their
‘retrofit first’ policy and their new carbon pricing plans.
The increased costs and availability of materials was also
considered as well as the climate resilience of our buildings
in the context of London’s climate resilience.
Opportunities included the approval of costs for the reuse of
steel from 2 Aldermanbury Square, EC2, in our French Railways
House & 50 Jermyn Street development. The appraisal for our
200 Gray’s Inn Road, WC1, project considered the impact of
the removal of gas-fired central heating and hot water from
the building on ability to lease the properties once works
are complete.
Management’s role in assessing and managing
climate-related risks and opportunities
Climate-related risks and opportunities are brought
to the attention of the Board by the Chief Executive and
Sustainability and Social Impact Director. Where our valuation
or development projects are impacted by climate-related risks,
these are reported separately within our Executive Director’s
reports to the Board.
Regular updates are also provided to our Executive Committee.
During the year this has included three updates on our Roadmap
to Net Zero and additional updates from Sustainability and
Social Impact Committees. More detail on our committee
structure can be found on page 38 of this report.
The Sustainability and Social Impact Director – a member of
Executive Committee – and our in-house Sustainability team
manage the strategic direction and operational management
of sustainability-related issues. In addition, there are clear
departmental responsibilities for sustainability including:
– Joint Director of Finance – oversight of the ESG-linked
revolving credit facility (RCF) and Sustainable
Finance Framework.
– Development Director and Director of Projects – integration
of sustainability across all projects, irrespective of scope;
asset energy efficiency and the implementation of energy
efficiency measures.
– The Sustainability and Social Impact Director and Executive
Director – allocation of Decarbonisation Fund to retrofit
projects, the Executive Director ensures that climate risk is
considered in acquisition and repositioning of potentially
stranded assets; this includes monitoring and managing
the business response to expected legislative changes.
Our strategy
We identify and acquire unloved properties, reposition
them through lease restructuring, delivery of flexible space,
refurbishment or redevelopment and then manage for income
or recycle them. The buildings we develop can be in use for
up to 60 years; we therefore consider the whole building life
cycle when reviewing climate-related risks.
Engagement with our stakeholders is fundamental to
the success of our strategy and understanding their needs
on sustainability is fundamental to success. This includes the
provision of assets that are not at risk of stranding due to their
energy and carbon efficiency and that are resilient to the
physical impacts of climate change, be that overheating, flash
flooding or other extreme weather events. We also recognise
the importance placed on transparency of reporting from
our investors. The above factors support the attractiveness
of our buildings to our customers and investors.
Climate-related risks, opportunities,
and impacts
To assess how various climate change drivers may impact GPE,
we use the TCFD framework’s categorisation of transition
and physical climate risks. We consider climate-related
risks and opportunities over three time horizons: short,
medium and long term, identified on pages 54 to 59. These
time horizons follow our Roadmap to Net Zero targets
and approach to business and asset planning.
Sustainability continued
Task Force on Climate-related Financial Disclosures (TCFD)
52
Great Portland Estates plc Annual Report 2024
In line with our Group risk management policy and approach,
GPE defines whether a risk or opportunity is ‘principal’ by the
likelihood of it occurring and the potential impact it may
have. We consider climate change to be a principal risk to the
business due to the transitional risks and their potential impact
on rental values, building valuation and our ability to attract
and retain customers. Our full approach to defining principal
risk is found on page 74. Through our risk review process we
highlighted the following:
– the need to update physical climate change modelling,
through further scenario analysis, on the basis of emerging
information from the UN Committee on Climate Change;
– the need to improve financial modelling on the impact of
climate change – our metering and energy management
project is almost complete and will feed into that process
during the next financial year; and
– the need to further increase value chain engagement
to reduce our Scope 3 emissions; new targets have been
included within our revised Roadmap to address this risk.
Additionally, we are responding to the transitional risks of
climate change, specifically upgrading EPC ratings, retrofitting
existing buildings, removing fossil fuels and aligning with CRREM
pathways. Our customer requirements on sustainability
continue to evolve as concepts such as net zero mature;
this impacts the design of our buildings and the materials
we use to develop and refurbish them.
This approach is where we see opportunities materialise,
through the provision of buildings and spaces that are resilient
to a changing climate, in turn supporting improved rents,
valuations and speed of letting, Our design briefs and asset
plans are structured to capitalise on this opportunity.
Physical risks and opportunities
Whilst in the short to medium term, focus remains on
transitional risks, we see a gradual increase in focus on physical
risks such as flash flooding and overheating.
In 2019, we conducted physical climate risk modelling using
four IPCC projections, from a 1.5°C temperature rise (RCP
2.6) up to 5.4°C (RCP 8.5) and applied a rating to each risk.
With a central London portfolio the climate-related physical
risks profile is largely consistent across all our buildings, with
the exception of flash flooding where quantification is more
challenging or riverside properties such as Minerva House,
SE1 (more detail on pages 42 and 62). Following the release
of the 2023 IPCC Report on Climate Change in March and
the London Climate Resilience Review at the end of 2023
we are committed to updating this modelling during the
next financial year as part of our Transition Plan.
We have updated our Roadmap to Net Zero including our
energy and carbon targets to 2030 (including our Scope 3
emissions) as well as introducing long-term targets to 2040.
We are aligning our new targets with the SBTi Corporate Net-
Zero Standard and therefore remain confident that they are in
line with 1.5°C. Whilst our previous target was verified by the
SBTi (SME route), we are yet to complete this process for our
revised Roadmap and will update publicly once complete.
We recognise that current UN projections suggest that a 2°C
or 4°C warming scenario is more likely and have therefore
set out our response to physical and transitional risks in those
particular scenarios within the tables on pages 54 to 59.
Resilience of organisation’s strategy considering
different climate-related scenarios
Our strategy enables us to build resilience considerations
into the acquisition, design, development and operation
of buildings. We do not believe we will need to change
our strategy in a 1.5, 2 or 4ºC warming scenario.
We have outlined on pages 54 to 59 the climate-related
risks and opportunities identified by our business and how
we are responding to these risks to deliver both business
resilience and a resilient value chain.
The delivery of actions to reduce our risk has an impact on
the remuneration of all colleagues through our Annual Bonus
Scorecard (pages 16 to 17). Reduction in energy consumption
and net zero carbon developments are intrinsically linked to
energy savings and Decarbonisation Fund contributions as
listed in the Metrics and Targets on page 61.
Risk management
In addition to the assessment of the principal and emerging
risks facing the Group at the half-year and year end, the
Board Committees and Management Committees, outlined
on page 38, review the actions taken to help mitigate our
sustainability related-risks.
During the year this included:
– the Audit Committee reviewing the outcome of an Internal
Audit review of sustainability governance. A key action
following the review has been the creation of a dashboard of
all ESG-related KPIs to be presented to the Board regularly;
– a decision by the Executive Committee that our Roadmap
to Net Zero needed to be updated to meet evolving
definitions of net zero and to respond to our changing
business, including raising our Internal Carbon Price
from £95 to £150/tCO2e (more detail can be found on
pages 42 to 43);
– the Sustainability Committee signing off new short-term
targets on energy intensity and embodied carbon to
align more closely with CRREM and SBTi guidance;
– oversight of our metering project and implementation of
energy action plans by the Portfolio Sustainability Sub-
Committee, including challenges on the commissioning
of new meters and transfer of information to our data
management system;
– oversight of sustainability innovation through our
Development Sustainability Sub-Committee, including
in relation to the availability and use of alternative
concrete products and circular economy innovation; and
– Design Review meetings considered progress against
and the applicability of ratings such as BREEAM, SKA
and NABERS Design for Performance and NABERS UK
Energy for Performance.
Controls for managing our identified climate-related risks
and opportunities are outlined on the following pages 54 to 60
and more broadly, integrated as a principal risk, within the
‘Our approach to risk’ section on pages 74 to 87.
During the next reporting period we will be carrying out a
double materiality exercise that will inform our disclosure
for the year ending 31 March 2025, as well as our Transition
Plan that will be developed in line with the guidance from
the Transition Plan Taskforce.
Strategic Report – Annual review
53
Annual Report 2024 Great Portland Estates plc
Sustainability continued
Task Force on Climate-related Financial Disclosures (TCFD) continued
Climate-related transition and physical risks
Risk
Description
Scenario
Timeframe
Transition risks
Policy and legal
Risk 1
Ability to respond to uncertainty on evolving EPC legislation –
leading to increased costs and the risk of stranded assets.
2ºC
4ºC
Short
Short
Risk 2
Increased focus on ‘energy in use ratings’ within the market,
leading to additional legislative burden.
2ºC
4ºC
Short
Short
Risk 3
Evolving local planning requirements including increased
carbon tariffs leading to increased complexity of developing
commercial buildings.
2ºC
4ºC
Short
Medium
Technology
Risk 4
Inefficiencies in building operation caused by outdated utility
metering, lack of understanding of complex building systems.
2ºC
4ºC
Short
Short
Risk 5
Increased costs associated with research and development
of technological solutions or pace of change is not sufficient
to respond to scale of challenge.
2ºC
4ºC
Short
Medium
Market
Risk 6
Volatility in energy market, prices and availability of net zero
energy tariffs. Energy security concerns leading to increased
energy costs.
2ºC
4ºC
Short
Medium
Risk 7
Increased costs of raw materials driven by growing demand
for sustainable products may impact on ability to reduce
embodied carbon of future developments.
2ºC
4ºC
Short
Medium
Risk 8
Increased customer demand for highly sustainable buildings
may lead to the risk of stranded assets.
2ºC
4ºC
Short
Short
Risk 9
Increased cost of development and refurbishment driven
by increasingly complex planning regime.
2ºC
4ºC
Short
Short
Climate change and decarbonisation is considered to be
a principal risk for GPE and the successful management
of that risk, along with any associated opportunity,
is critical for the Group to deliver its strategic priorities.
Our overarching risk management process comprises of
four main stages: risk identification, risk assessment, risk
response, and monitoring reporting and escalation. The risks,
and opportunities, related to climate change are managed
through that same approach. Risk management is an integral
part of all business activities, as is consideration of the impact
of our activities on the long-term performance of the business.
The Groups principal risks have remained largely unchanged
from the previous reporting period, as is the case with our
climate-related transition and physical risks that can be
seen in the following tables. We have taken the opportunity
to consolidate some of these risks in order to simplify
our approach to managing them.
Climate change remains a principal risk to the business, with
a ‘Medium’ net risk rating. We recognise the impact it has over
our ability to deliver on our strategic priorities and as such we
endeavour to ensure that the appropriate polices, procedures,
internal controls and people are in place to help minimise that risk.
54
Great Portland Estates plc Annual Report 2024
Response to risk
Next steps
Review of EPC upgrade costs completed, asset level plans created,
upgrade works underway, target to remove energy-related fossil fuels
from all buildings incorporated in Roadmap to Net Zero review.
Portfolio EPC review to be updated as new acquisitions enter portfolio
and development/refurbishment works complete. Increased focus
additionally on energy intensity going forward in updated Roadmap.
NABERS UK Design for Performance ratings in progress for developments.
NABERS UK Energy for offices implemented at two pilot buildings.
Metering project implemented.
Implement more challenging target on energy intensity, now aligned
with CRREM. Create net zero asset plans for all properties once
metering project fully complete.
Brief for Creating Sustainable Spaces sets out key requirements
on energy performance in use, NABERS ratings, metering strategy,
embodied carbon and circular economy in building design to
reduce whole life carbon. Internal carbon price has supported
behavioural change.
As developments that have NABERS accreditation as a deliverable
get closer to practical completion we are working closely with
contractors, engineers and our own operational teams to ensure
delivery of energy use intensity metrics. Implement updated Roadmap
to Net Zero including commitment to remove fossil fuel derived
energy consumption.
Cross-portfolio, extensive metering project nearing completion
to support improved energy consumption data. In turn will support
identification of energy efficiency opportunities. Digital twin
technology, energy management software and enhanced building
management systems rolled out. New MEP service partner with
clear energy-related KPIs.
Finalise the portfolio-wide metering project, ensure all data can
be pulled through to real-time dashboards, provide data directly
to customers, to support energy reductions. Further integration of
building information modelling/digital twins and BMS/EMS systems
to support a more efficient approach in collaboration with new
MEP service partner.
Investment in Pi Labs supports innovation and R&D. Active programme
exploring new materials and technological solutions to energy
efficiency and construction-related challenges. Progress made
on digital twin technology and innovation in construction. New MEP
contract to drive innovation in operation.
Increase in the internal carbon price will allow Decarbonisation Fund
to be used for research. Increased focus on innovation and technology
to improve sustainability outcomes and climate resilience of the business.
Continue to review approach to digitisation and adoption of technology.
Energy councils established with customers. Supply chain workshops
underway to deal with operational energy efficiency challenges.
100% of energy purchased on net zero carbon tariffs. Procurement
policy under review.
Sustainability remains a regular topic of engagement between
all customer types, Integration of energy and carbon targets into
service partner KPIs will lead to a performance-led approach.
Review of renewable energy procurement underway.
Our ‘Brief for Creating Sustainable Spaces’ launched in the
reporting year including expectations on material specification.
Development Sustainability Sub-Committee provides oversight
of sustainable products in use at our developments.
Maintain our quarterly roundtables with quantity surveyors, structural
engineers etc. to identify alternative solutions for materials that are
in shorter supply, i.e. GGBS being replaced with calcine clay, reused steel
products over EAF produced steel.
GPE approach to building acquisition remains the same, taking
poor performing assets in all regards and turning them into best-
in-class space. Our development and refurbishment programme
prioritises sustainable design.
Embed new Roadmap to support achievement of CRREM performance
metrics. Include year of stranding when looking to acquire assets.
Continue to raise bar across our developments to provide highly
efficient and sustainable buildings.
The internal carbon price has been in place for three years which
has driven behavioural change. Our approach to sustainability
and retrofitting supports successful planning outcomes.
Development and project management teams remain integrated
into wider industry groups such as the City and Westminster Planning
Associations. GPE continue to feedback on public policy consultations
to provide feedback on increasing performance requirements.
Key
Short term
Medium term
Long term
1–5 years
(2025–2029)
6–10 years
(2030–2034)
10+ years
(2035+)
Strategic Report – Annual review
55
Annual Report 2024 Great Portland Estates plc
Risk
Description
Scenario
Timeframe
Transition risks continued
Reputation
Risk 10
Ability to meet increasing requirements on sustainability
disclosure from investors and lenders.
2ºC
4ºC
Short
Medium
Risk 11
Ability to secure sufficient supplies of sustainable materials
to meet embodied carbon targets for our developments.
Delays caused by supply chain or transport interruptions.
2ºC
4ºC
Medium
Short
Risk 12
Potential detrimental impact on reputation of owning
lower EPC-rated assets.
2ºC
4ºC
Medium
Short
Physical risks
Risk 13
Increased severity of extreme weather events, like flash floods.
2ºC
Medium
Risk 14
Increased annual temperature.
2ºC
Medium
Risk 15
Reduction in precipitation.
2ºC
Medium
Risk 16
Potential water shortages and subsidence within London.
4ºC
Medium/Long
Risk 17
Increased severity of extreme weather events, like flash floods.
4ºC
Medium/Long
Risk 18
Increased annual temperature.
4ºC
Medium/Long
Sustainability continued
Task Force on Climate-related Financial Disclosures (TCFD) continued
Climate-related transition and physical risks continued
56
Great Portland Estates plc Annual Report 2024
Response to risk
Next steps
Active investor programme. Sustainability and Social Impact Director
meets with investors to understand their priorities. Updated Roadmap
to Net Zero includes alignment with CRREM pathways and Science
Based Target initiative guidance.
Remaining close to our own investors with regard to their key ESG drivers
and requirements, as well as with our audit and assurance partners.
Focus in FY25 towards transition planning and double materiality.
‘Brief for Creating Sustainable Spaces’ supports longer-term
planning on embodied carbon. Development Sustainability
Sub-Committee provides oversight to progress against embodied
carbon KPIs. Engagement with main contractor partners and
specialist subcontractors.
Increase in the internal carbon price allows greater scope of investment
to come from the Decarbonisation Fund, so that all areas of the business,
and value chain, can benefit. Ongoing innovation programme.
Roundtables with quantity surveyors, structural engineers to identify
alternative solutions for materials in short supply.
EPC reviews to be integrated within asset plans, net zero carbon
asset plans underway, and delivered alongside metering project.
New acquisitions quickly enter development pipeline for upgrade.
Ongoing portfolio-wide interventions to support improvements
in EPC ratings. Continue to take advantage where vacancies arise
to implement energy efficiency interventions. For new acquisitions,
ensure EPC upgrade plan and net zero asset plan implemented.
Our Statement of Intent, Roadmap and Social Impact Strategy
all include requirements for:
– increased biodiversity and solar shading, and the support
of community greening;
– drought resistant planting;
– use of sustainable drainage systems;
– reduced water consumption;
– designing of climate resilient buildings that are robust,
adaptable and have longevity;
– working with our supply chain to improve transparency
of ethical sourcing processes; and
– working with our partners to consider impact of extreme
weather events on our supply chain.
With the release of our updated Roadmap, next steps will include
aligning our established Statement of Intent and Creating Sustainable
Spaces Brief to reflect our increased ambition with regard to energy
use intensity and embodied carbon reductions.
During the next financial year we will be:
– updating physical climate change modelling on the basis of
emerging information from the UN Committee on Climate Change;
– improving financial modelling on the impact of climate change,
our metering and energy management project is almost complete
and will feed into that process during the next financial year; and,
– increasing value chain engagement to reduce our Scope 3 emissions;
new targets have been included within our revised Roadmap to
address this risk.
Our ‘Brief for Creating Sustainable Spaces’ outlines key performance
requirements on incorporating climate resilience in the design of all
our spaces irrespective of size and scale.
We work with our consultants and project teams to ensure our
developments are able to meet the evolving requirements of
planning authorities and customer expectations.
Sustainability considerations are integrated within our acquisition
process so that we are able to forecast the required improvements
for assets to mitigate physical risks.
Key
Short term
Medium term
Long term
1–5 years
(2025–2029)
5–10 years
(2030–2034)
10+ years
(2035+)
Strategic Report – Annual review
57
Annual Report 2024 Great Portland Estates plc
Sustainability continued
Task Force on Climate-related Financial Disclosures (TCFD) continued
Climate-related transition and physical opportunities
Opportunity
Description
Scenario
Time frame
Transition opportunities
Policy and legal
Opp 1
Increasing complexity of regulatory environment may
present opportunities to acquire lower rated buildings
(stranded assets) at reduced prices for repositioning.
2ºC
4ºC
Short
Opp 2
Proactive response to legislative changes improves
desirability of GPE assets for customers and investors.
2ºC
4ºC
Short
Opp 3
Deep knowledge supports transition of business to a
‘retrofit first’ approach which is challenging in London
and technically more difficult.
2ºC
4ºC
Short
Opp 4
Potential increased returns and improved valuation
connected with higher demand for more sustainable space.
2ºC
4ºC
Short
Medium
Technology
Opp 5
Early adoption of technology supports improved visibility
and management of utility consumption data and associated
reduced costs for our customers.
2ºC
4ºC
Short
Opp 6
Payback of costs (dependent on energy consumption
and variable energy costs) likely to be short term and
will support improved collaboration with customers.
2ºC
4ºC
Short
Opp 7
Implementation of new technologies to drive down
embodied carbon provides opportunity to capitalise
on customer appetite for net zero carbon buildings.
2ºC
4ºC
Short
Medium
Market
Opp 8
Increased collaboration with customers and supply
chain supporting faster progress on energy efficiency.
2ºC
4ºC
Short
Opp 9
Proactive approach to reducing consumption and improving
energy security, including on-site energy generation, passive
cooling and connection to local heat and power networks
supports customer demand for sustainable spaces.
2ºC
4ºC
Short
Opp 10
Ability to capitalise on deep knowledge of London market,
where other developers may not be as well placed to
navigate complexities.
2ºC
4ºC
Short
Reputation
Opp 11
Continued transparency of reporting coupled with frequent
investor engagement results in increased confidence in
ability of business to deliver on sustainability goals.
2ºC
4ºC
Short
Opp 12
‘Our Brief for Creating Sustainable Spaces’ supports best
practice approach to sustainable design irrespective of
the product.
2ºC
4ºC
Short
Opp 13
Early engagement and collaborative relationships with
supply chain to support early warning of supply issues
and ability to source alternative solutions.
2ºC
4ºC
Short
Opp 14
Early adoption of innovative approaches to energy
efficiency and low-carbon construction and materials.
2ºC
4ºC
Medium
Physical opportunities
Opp 15
Potential increase in valuation of buildings that are
climate resilient and adaptable.
2ºC
Medium
Opp 16
Increased demand for buildings with climate resilience
measures such as passive cooling, nature-based solutions
and sustainable urban drainage systems incorporated.
4ºC
Long
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Great Portland Estates plc Annual Report 2024
Response to opportunity
Next steps
Acquisition programme sought out lower rated buildings to
reposition into best-in-class space.
Our Investment and acquisition teams continue to review the market
in areas to find lower rated buildings where an innovative approach to
redevelop or retrofit could support the creation of new best-in-class space.
Our Brief for Creating Sustainable Spaces has integrated a number of
legislative changes from their inception. This has included biodiversity
net gain, circular economy statements and climate resilience.
As we revise our Roadmap to Net Zero, we are thinking ahead to the
introduction of further legislation, particularly focusing on retrofit
policy and more governance around approaches to offsetting.
We have been delivering refurbishment and retrofit projects for
a number of years and as such have built a strong supporting value
chain around us, from architects to engineers and contractors.
Learning from our steel reuse initiative between 2 Aldermanbury Square and
French Railways House & 50 Jermyn Street we are continuing to implement
innovative technological solutions to promote the reuse of materials.
Sustainability is a key aspect of design and research shows that
higher rated buildings support increased valuations. The net zero
carbon status of 50 Finsbury Square supported the sale price.
Priority is therefore continuing to be given to sustainable design
and achieving the appropriate sustainability ratings.
We continue to work with our valuers to strengthen the argument for,
and provide a stronger evidence base on how more sustainable spaces
drive higher demand and in turn better returns. This has informed our
newly announced commitment to remove energy-related fossil fuels
from the portfolio.
Our portfolio wide metering project has greatly improved
not only the visibility of data for ourselves and our customers
but also supported greater behavioural-led change and
performance improvements.
Completion of the metering project and integration of that data into our
asset dashboards will ensure that our customers have real-time energy
consumption data for their spaces, allowing us to work together to drive
building-wide energy performance improvements and reduce costs.
We will be concentrating on the presentation of data through
dashboards, onboarding a Data Manager into the business, and
delivering greater Customer First and sustainability integration.
The opportunity to propose new technology has been integrated
into the CSS brief, and innovations around the delivery of net zero
carbon buildings are encouraged as below the line solutions in
our tender process.
We are increasing the scope of the Decarbonisation Fund to our
development pipeline, allowing for further investment in new technology
and piloting solutions across development and portfolio.
Energy Councils with our customers are in place, whilst our regular
roundtables with key members of our supply chain including architects,
engineers, project managers and other service partners support innovation.
To take this collaboration further we have set public-facing targets
in our new Roadmap that focus on our engagement with customers
and supply chain partners.
Our new MEP contract supports increased innovation to reduce
consumption. Additionally, through our Brief for Creating Sustainable
Spaces we are supporting innovation. We are currently reviewing
our energy procurement process to support energy security.
Reflecting on the lessons learned through our early engagement
with the NABERS UK process we will be able to improve the integration
of passive measures, as well as focusing on how we procure energy
to ensure security of supply.
The GPE approach to building acquisition is well established,
taking poor performing assets in all regards and turning them into
best-in-class space in concentrated areas of London that we know well.
We continue to remain active participants in groups such as the Westminster
and City Property Associations, supporting them through our own
experience of the London market and local planning authority nuances.
Our approach to the disclosure of our data and performance
has been established over a number of years and this has included
our annual reporting process as well as third-party disclosures.
Through ongoing review of what we disclose and how we disclose it,
we are making improvements to the integration of sustainability data
into our Annual Report and creating a new accessible dataset that
will be publicly available for download.
Over the last reporting period we have been rolling out the new
Brief, and the reporting mechanisms that are associated with it.
Sustainability dashboards and our Development Sustainability
Sub-Committee provides oversight of progress against KPIs.
We continue to implement the Brief across all our projects, including on
floor fit-out projects. Feedback is being incorporated into new projects.
Our approach to collaboration, outside of the confines of the
contractual environment, have supported much more transparent
and productive conversations with our supply chain partners.
Following on from the release of our revised Roadmap, and the inclusion
of formal engagement targets with our supply chain partners on
sustainability, we will be holding formal workshops to raise awareness
and foster greater collaboration between our supply chain partners,
who in some cases will operate in different parts of the built environment.
The opportunity to propose innovative approaches has been
integrated into our Brief for Creating Sustainable Spaces and solutions
around the delivery of net zero carbon buildings are encouraged as
below the line solutions in our tender process.
We are increasing the scope of the Decarbonisation Fund to our
development pipeline, allowing for further investment in new
technology and piloting solutions across development and portfolio.
Our ‘Brief for Creating Sustainable Spaces’ outlines key performance
requirements on incorporating climate resilience in the design of all
our spaces irrespective of size and scale.
Being able to identify building-specific risks supports the integration
of effective resilience measures such as increased flood defence
being managed at our Minerva, SE1, project.
We will be reviewing our approach to climate risk modelling in the
coming year to expand upon the work that has already been done
across the portfolio. This will also include the identification of ways
in which we can better support our customers, and the communities
in which we operate, to deal with the physical risks of climate
change such as accessibility issues and emergency preparedness.
Key
Short term
Medium term
Long term
1–5 years
(2025–2029)
5–10 years
(2030–2034)
10+ years
(2035+)
Strategic Report – Annual review
59
Annual Report 2024 Great Portland Estates plc
Sustainability continued
Task Force on Climate-related Financial Disclosures (TCFD) continued
Impact on strategy
Linked risks/
opportunities
Impact on financial planning
Operating costs, capital expenditure and allocation
Our Sustainability Statement of Intent, and revised Roadmap
to Net Zero, set out our sustainability strategy. We have
refocused our strategy with the aim of ensuring that climate
resilience is integrated across our business as well as increasing
our ambition with regard to embodied carbon reduction
and energy efficiency. We consider climate risk throughout
our processes, including leasing, customer relationships,
development appraisals, asset business plans, financing
arrangements, acquisitions and remuneration arrangements.
Risk:
1-9, 11-12,
13-18
Opp:
1–3, 5–7, 9,
10, 13–16
Detailed review undertaken to understand the cost of
improving our portfolio to an EPC B rating. We estimated that
the cost would be circa £20 million in the current regulatory
environment and these are works that would have, in any event,
been incorporated into our work to reposition assets. We are
undertaking a similar exercise to create an energy intensity
trajectory to 90 kWh per m2 by 2030 for our new developments
and a CRREM aligned trajectory across the portfolio. Our
recently increased Internal Carbon Price to £150 per tonne
feeds into our Decarbonisation Fund which supports energy
efficiency improvements.
Access to capital
It is increasingly important to demonstrate how financing
is linked to ESG considerations. Our Sustainable Finance
Framework is in place and sets out how we may link future
debt facilities to our business activities. In addition, our
ESG-linked RCF incorporates KPIs on energy intensity,
embodied carbon and biodiversity.
Risk:
2, 3, 5, 7, 8,
9, 11, 12–18
Opp:
1, 2, 4, 7, 10,
11, 14–16
Throughout the year we have engaged in a number of discussions
with our lenders, focusing on our ESG-linked revolving credit
facility as well as a new debt facility negotiated during
2023 which totals £250m. The updated energy and carbon
targets included in our Roadmap to Net Zero have now been
incorporated in both these debt facilities.
Acquisitions and divestments
We seek to acquire assets that are at risk of being stranded
to refurbish and reposition them. We may also seek to divest
from assets where it is not possible to upgrade to an EPC
B rating. When making an acquisition, we undertake due
diligence on the potential for the asset to reach an EPC B rating
and net zero carbon. At 50 Finsbury Square we delivered a
building verified as net zero carbon. This was then incorporated
within the contract of sale with a financial penalty in the event
it was not achieved. Our learning from this process coupled
with our customer engagement process with Clifford Chance at
2 Aldermanbury Square has been embedded in our processes.
Risk:
1, 5, 7, 8, 9,
11, 13, 14–18
Opp:
1, 3, 4, 6, 7,
10, 15, 16
Appraisals for asset acquisitions are considered at a number
of different levels within the business, particularly at Executive
Committee and Board meetings. In order to gain sign off for
these developments the implications on sustainability KPIs
must be presented for discussion. This includes contributions
to the Decarbonisation Fund, likely embodied carbon impact
of development proposals and energy use intensities. In respect
of divestments (asset disposals) CRREM analysis is completed
to support the sale of these assets as sellers become more
mature in the sustainability data they are requesting. The
sustainability credentials of the building support the valuation.
Developments
We take a whole life carbon approach to development,
designing for climate resilience, longevity, and adaptability.
All buildings in our development pipeline will be fossil fuel free,
low embodied carbon and energy efficient, with an ambition
of meeting the Net Zero Carbon Building Standard when it
is released. Together these credentials support the valuations
of our buildings. The financial implications of implementing
this are included within our development appraisals, which
also include the impact of our Internal Carbon Price. In the
case of projects such as 2 Aldermanbury Square, EC2 where
we are removing steel to be reused in another development,
costs can vary due to the complex process of dismantling steel,
charges for warehousing the steel and impact on programme.
When taken in combination with reusing the steel at French
Railways House & 50 Jermyn Street we expect to be cost neutral
whilst reducing the embodied carbon of the steel used at
the development by 95%.
Risk:
2, 3, 5, 6, 8,
9, 10, 11, 13,
14–18
Opp:
1–5, 7–9, 10,
12, 14–16
Costs related to sustainability innovation at our developments
are fluctuating as the industry adapts and evolves. Our Internal
Carbon Price, recently revised to £150 per tonne, is applied at
practical completion of our developments and incentivises the
reduction of embodied carbon and supports progress towards
our short-term embodied carbon reductions.
The ICP is included into the development appraisal process as
a financial implication and impacts the overall profit on cost as
a key driver for the business. Our recent exchange of contracts
for the acquisition of the Courtyard, has £450,000 included
within its appraisal. In effect this ensures that the embodied
carbon of design changes is better understood and drives
commercial decisions on carbon.
Our ‘Brief for Creating Sustainable Spaces’ also ensures that
we set the right design brief for all our spaces.
Managing assets
Our Roadmap to Net Zero sets out how we can reduce energy
consumption and carbon emissions to reach our near-term
targets by 2030. Our Internal Carbon Price, recently raised
to £150 per tonne, is applied to operational carbon emissions,
with our Decarbonisation Fund supporting ongoing investment
in energy efficiency projects across our portfolio and now into
innovation in our developments. Our Sustainability Statement
of Intent has been updated to reposition climate resilience
to ensure it is integrated across our business. Our revised Brief
for Creating Sustainable Spaces further sets out how we will
ensure that the design of our spaces supports reductions
in carbon emissions.
Risk:
1, 2, 5, 6, 7, 9,
11, 13, 14–18
Opp:
2–6, 8, 9,
12, 15, 16
Our Portfolio Managers are ultimately responsible for the long-
term financial performance of our real estate assets. Energy
performance, climate resilience, biodiversity interventions
and social value are all monitored as part of our asset business
planning process. In particular, scheduling energy efficiency
interventions to support improvements in EPC ratings where
vacancies arise to reduce the risk of stranding as legislation
tightens, or the retrofitting of biodiversity interventions to support
the climate resilience of an asset. The financial implications
of implementing these actions are presented at quarterly
asset reviews as part of overall asset performance to support
better understanding of the impact of improving sustainability
performance on individual asset financial performance.
Strategy and financial planning
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Great Portland Estates plc Annual Report 2024
Metrics and targets
Metrics used to assess climate-related risks and opportunities in line with strategy
and risk management processes
Risk adaptation and
mitigation metrics
Baseline
2021/22
2022/23
2023/24
Target
Progress
EPCs rated A and B
by floor area1
Risk:
1, 2, 13
Opp:
1, 2, 3, 15
2016
37%
43%
40%
100%
by 2030
Compliant with current EPC legislation with plans
in place to meet potential further EPC legislative
changes and quarterly asset reviews are
monitoring progress.
Our acquisition of the Soho Square Estate in the
period led to a reduction in the overall operational
floor area % of As and Bs but this will be remedied
as it transitions to the development pipeline.
Including floor area in development 63.6% of the
portfolio is meeting or targeting EPC A and B.
EPCs rated F and G
by floor area
Risk:
1, 2, 13
Opp:
1, 2, 3, 15
2016
0%
0%
0%
0%
Proportion of portfolio
with green building ratings
by floor area
Risk:
1, 2, 3, 9, 13, 14–18
Opp:
1, 2, 3, 4, 7, 9, 12, 14–16
2016
55%
48%
44%
60%
Our Brief for Creating Sustainable Spaces provides
clear governance structure for the delivery
of green building ratings. The Brief applies to
all developments, refurbishments and fit outs.
It includes certifications such as BREEAM, WELL,
Fitwel, NABERS and SKA ratings. A further 25%
of the portfolio in development is targeting
green buildings ratings.
Estimated annual savings
from energy efficiency
measures implemented
during the year
Risk:
1, 2, 5, 7, 9, 11
Opp:
4–6, 8, 9, 12, 14
2018 3,777 MWh 3,226 MWh
1,077 MWh
Develop
target
A greater focus this year has been on upgrading
metering infrastructure, due for completion in
the early part of FY25. Buildings completed early
in the programme are able to utilise automated,
granular data and dashboards to drive improved
energy efficiency and optimisation. We anticipate
we will be able to quantify the savings from
greater data availability in following disclosures.
Internal Carbon Price
Risk:
1–10, 14–18
Opp:
1–7, 12–16
2021
£95
£95
£95
Review
by end
of FY27
The ICP is currently applied to Scope 1 and 2
location based emissions and residual embodied
carbon emissions from our development pipeline.
It has been updated to £150 per tCO2e in the
Roadmap v2.0.
Total (to date) contribution
to Decarbonisation Fund
Risk:
1–10, 14–18
Opp:
1–7, 12–16
2022
£403k
£1.29m
Restated
£1.63m
Develop
target
Decarbonisation Fund in place since 2020
supporting investment in efficiency of our
standing assets. Plan to utilise the fund to
support decarbonisation of our value chain.
FY23/24 contribution is lower due to reductions
in Scope 1 and 2 emissions and no completed
developments meeting the criteria for payment
of the ICP.
Electricity purchased
from renewable sources
Risk:
5, 7, 9
Opp:
4, 5, 8, 9, 11
2020
100%
100%
100%
100%
We procure 100% REGO-backed electricity,
however we are reviewing this approach to
ensure our approach to energy procurement
is robust and transparent.
On-site renewable
energy generation
Risk:
5, 7, 9
Opp:
4, 5, 8, 9, 11
2020
27 MWh
5.3 MWh
Restated
6.7 MWh
Target
removed
Our original target of 600MWh of renewable
energy generation by 2030 has been reviewed
as part of our Roadmap refresh exercise. We are
re-prioritising this pillar of our Roadmap towards
a more robust and transparent approach
to energy procurement across the portfolio.
We will continue to install on-site renewable
energy on all new developments.
1. Based on operational floor area, excluding on-site development. Further detail with forecast EPC ratings can be found on page 47.
Further information complimentary to this disclosure can be found in our Sustainability Statement of Intent and our Roadmap
to Net Zero v2.0, providing context and historic performance against all metrics and targets, at www.gpe.co.uk/reporting
Our Sustainability Performance tables detail our full performance against our targets for the last financial year. Detailed reporting of
our sustainability performance, including energy consumption and Scope 1, 2 and relevant Scope 3 metrics (including carbon emissions
associated with water consumption and waste management), is included within our Streamlined Energy and Carbon Reporting (SECR)
table on pages 46 to 48 of this report.
Strategic Report – Annual review
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Annual Report 2024 Great Portland Estates plc
Sustainability continued
Our business model is to take poorly performing, unloved buildings and reposition them
into best-in-class sustainable spaces. In order to deliver our sustainability strategy we
work with our whole value chain, whether that is our supply chain partners, our customers,
local communities and planning authorities, investors, purchasers or lenders.
Minerva House, SE1 – Major refurbishment on the banks of the Thames
Egyptian and Dudley House, SW1 – Heritage refurbishment focused on retention
2 Aldermanbury Square, EC2 – New build driving energy efficiency
Local authorities
In our efforts to integrate climate
resilience within our own business, as well
as our value chain, we recognise that we
are one part of a much larger picture
when it comes to delivering a resilient
built environment that can withstand
the impacts of a changing climate
and safeguarding London’s future.
At our major refurbishment project
Minerva House, SE1, we have been
collaborating with the local planning
authority as well as the Environment
Agency to ensure we design and build
for a London that will be subject
Freeholders
Across our portfolio we are often the
long leaseholder, requiring effective
collaboration and communication
with our freehold partners.
At Egyptian and Dudley House, we
have been working very closely with
the Crown Estate, to not only align our
sustainability ambitions, but also to
push each other forward in a number of
areas. By providing consistent messaging
to both our value chains, we can create
efficiencies whilst driving best practice
and innovation.
Supply chain partners
Our innovative approach to dismantling
City Place House to allow the reuse
of steel at both 2 Aldermanbury
Square and French Railways House
& 50 Jermyn Street demonstrates
the value of close collaboration with
our supply chain partners.
Our partners, Arup, Elliott Wood,
Keltbray, EMR and Lendlease
challenged each other to deliver
a market-leading approach to the
circular economy, delivering emissions
savings at French Railways House.
to a number of physical climate risks.
The project is located on the northern
edge of Southwark, between Borough
Market and the River Thames, and as such
is directly impacted by a potential increase
in flooding as climate change progresses.
During the planning and design phases
of the development, the project team
have worked with the engineers at the
Environment Agency to deliver improved
resilience through repairs to the brick
flood defence and specifying specialist
render to the basement walls to increase
their durability and lifespan. This work has
been informed by the Environment Agency’s
updated Thames Estuary 2100 Plan.
Supply chain partners
Strong collaboration not only supports
the environmental element of sustainability
but can drive positive change with regard
to social and ethical outcomes.
We are working with our principal contractor,
8Build, to roll-out ethical labour audits
across the Egyptian and Dudley House
supply chain. The aim is to identify key risk
areas, including modern slavery, engage
directly with the workforce on-site to hear
their experiences and ensure we improve
our own procurement processes to deliver
a better, safer place of work for all.
Customers
The sustainability features of
2 Aldermanbury Square were central
to discussions with our customer,
Clifford Chance LLP. Right from the start
sustainability played a significant role
in their decision to pre-let the building,
three years ahead of completion.
Discussions included energy use,
embodied carbon and the delivery
of a NABERS rated building, and have
expanded to nature-based solutions
and the impact of a joint approach
to social value.
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Great Portland Estates plc Annual Report 2024
Our people and culture
Q&A with Carrie Heiss, HR Director
Q: What makes the culture at GPE so special?
Our culture is the character and personality of GPE.
It stands out because it’s the embodiment of a great
purpose and core values which define who we are and
how we act. These values, outlined on page 03, are at
the heart of what we do and what makes us special.
Of course, it’s our people who bring the culture and the
values to life, so it’s really important that our values resonate
with everyone. GPE’s values were developed several years ago
in a collaborative, all-company exercise. We have recently
reviewed these values with colleagues to ensure that they
continue to inform our beliefs and behaviours and they are as
relevant today as they’ve ever been. Following our colleague
feedback, we were pleased to adopt a fifth value, ‘We value
every customer’, which reflects the importance and the
focus we have on providing a great customer experience.
Each year, we have an extremely high response rate to our
Engagement Survey (February 2024 Engagement Survey:
98% response rate and 1,300 comments). This shows our
colleagues care deeply about our business and making their
voices heard. We rely heavily on this input to continue to
evolve our working practices and ensure that GPE remains
a fantastic place to work. Our overall favourability rating
of 74% is reassuring and reinforces that we are doing a lot
of things very well.
Q: What actions have we taken to embed
GPE’s values this year?
We’ve helped colleagues and leaders to personalise
the values for themselves and their teams and I can share a
couple of examples. All colleagues took part in Customer First
Workshops earlier in the year where we discussed GPE’s service
standards and made ‘team commitments’ to action these in our
everyday activities. We even kept track of these commitments
with a ‘Leader Board’ throughout the year. This fun and friendly
competition between teams has helped to ensure that our
collective commitments to customers are being actioned.
The value, ‘We are fair and inclusive’ was similarly brought to
life through Inclusion Workshops attended by all colleagues
in the autumn. We worked with a specialist D&I consultant to
create a safe space for colleagues to engage on a number
of issues relating to inclusion. With an emphasis on personal
and collective responsibility to create an inclusive workplace,
colleagues were asked to make personal commitments to
reflect what they could do to make a difference in the future.
These were displayed for everyone to access and socialise.
We regularly take opportunities to publicly recognise
behaviour that exemplifies our values. Colleagues have the
opportunity to nominate their peers for a quarterly ‘Living
our values’ award and these are awarded by the CEO.
Q: What have we done this year to deliver
against our people priorities?
We are always looking for ways to improve our colleague
experience at GPE and two specific initiatives come to mind.
This year we invested heavily in our leadership capabilities,
designing and conducting two bespoke development
programmes: ‘Inspire’ for our people managers; and
‘Momentum’ for our senior leaders. Having great people
management and leadership skills makes the work
environment better for everyone. Over several months, our
managers and leaders worked with experts, both in small
teams and one-on-one with coaches, to improve their
knowledge, hone their skills and most importantly to confidently
connect with their people as capable and inclusive leaders.
Another highlight for the year is an initiative we launched
to promote colleagues’ willingness and comfort to speak up
and share their views. This is clearly an important attribute
for a positive and healthy culture and, while we consistently
have high response rates for our anonymous surveys, this is
an area of continuous focus. We started a listening initiative
called ‘The Booth’, which allows members of our Executive
Committee to host up to seven colleagues in a monthly
session at a local cafe with the sole purpose of engaging
with colleagues and listening to what they want to discuss.
Across the 13 sessions held in 2023, we heard ideas, suggestions,
complaints and concerns – all in a safe and informal setting.
Participants appreciated the opportunity to interact with
members of the Executive Committee, and other colleagues,
in a relaxed and informal setting. These sessions have been
positively received and we plan to continue them in 2024.
“Our success is a testament to
the passion and commitment of
our people. At the heart of all our
achievements lie their dedication
and talent.”
Carrie Heiss Human Resources Director
88%
of our employees
are proud to work
at GPE
84%
of our employees say
that GPE’s core values
are aligned with their
own personal values
Strategic Report – Annual review
63
Annual Report 2024 Great Portland Estates plc
Our people and culture continued
Q: What are the people priorities for the
year ahead?
We will continue to progress our three-year People Strategy
referred to internally as OneGPE which puts diversity and
inclusion in the centre, with five additional focus areas:
colleague experience, growth and progression, leadership
capability, performance and reward, and health and
wellbeing. The strategy is due to be updated in 2024
with a roadmap to cover the next three years to achieve
measurable progress in key areas, including engagement,
diversity, inclusion and retention.
GPE aims to be the place where the best people do their
best work. This means ensuring we have the right talent and the
right skills where needed. We want everyone to achieve their
full potential. One of GPE’s core values is ‘We are committed
to excellence’ and with a high-performance culture it is vital to
promote and support our colleagues’ growth and progression.
To complement our focus on leadership capability in 2023 with
Inspire and Momentum, we look forward to launching ‘Thrive’
in 2024, to support colleagues in achieving their potential and
performance goals, focusing on the development of resilience,
feedback and accountability skills. We will continue to run our
highly successful internal GPE mentorship scheme, focusing
on our high-potential population as identified in our annual
Talent Review. This scheme matches around 20 individuals with
senior leaders and runs for 9–12 months. Our Non-Executive
Directors will also be continuing with mentoring sessions
with selected members of senior management.
Another priority is consolidating the organisational changes
that we made in 2023/24, which are explained below. With a
workforce of 134 colleagues as at 31 March 2024 (down from
139 in March 2023) we rely on teamwork and collaboration to
achieve our objectives and exemplify the value ‘We achieve
more together’. We successfully onboarded 29 new joiners
in the year and had 34 leavers. Our retention rate of 75.5%
as a measure of stability (down from 83.5% in 2023) reflects
a stable workforce.
We have continued to evolve the shape of the organisation
to reflect our strategic ambition to grow our Flex office
footprint and deliver an excellent customer experience.
Changes to team structures and people within teams
occurred predominantly in the second half of the year.
We reviewed team structures, roles within teams, reporting
lines and resourcing levels, making changes where
necessary to ensure we are well positioned to deliver
our strategic plans. Changes and the rationale for these
changes were communicated and the priority for this
coming year is to ensure that our teams are all working
well and collaborating effectively.
Alexa Baden-Powell, Inspire participant
and Senior Investment Manager:
“I found the Inspire programme very useful indeed. It gave
me a better understanding of different managerial styles.
The 360 feedback was really interesting and good to hear.
It sparked some useful discussions with my team, helping
us to improve the way we work together.”
Rebecca Bradley, Momentum participant and
Director of Customer Experience & Relationships:
“For me, there were several benefits to taking part
in Momentum. The one-on-one coaching sessions
enabled me to work on my own personal development
areas while the practical sessions facilitated an open
environment where we could learn together and
practice our leadership and coaching skills on each
other. The whole programme provided the opportunity
to build stronger relationships with peers in an informal
environment, which has supported cross-departmental
communication since the programme finished. I feel
good about working for a company that invests in its
people by providing this type of opportunity.”
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Great Portland Estates plc Annual Report 2024
Our employee survey is comprised of 70 questions covering all aspects of the employee experience.
Within this, we consistently ask three core questions to give us an indication of overall employee
engagement. While the scores for these are down slightly from the same period last year, mainly
attributed to the organisational restructure and ensuing changes, they remain positive overall.
76%
Employee
Engagement Index
(February 2024)
84% in March 2023
74%
of our employees
recommend GPE as
a great place to work
85% in March 2023
80%
of our employees
believe in what we are
trying to achieve
87% in March 2023
72%
say work gives them
a personal feeling
of accomplishment
78% in March 23
Where we’ve improved based on feedback
we heard and actions we’ve taken this year
We have worked hard on connecting with our colleagues,
listening to them and generally encouraging people
to be themselves. Our targeted efforts to foster a truly
inclusive workplace have started to feed through to the
feedback from colleagues. Where we have seen the biggest
improvement in favourable scores from FY23 to FY24 are:
+11% I feel safe and able to speak up at GPE.
+9% I am treated with respect.
+9% People from diverse backgrounds are helped to feel
accepted and be themselves.
+7% I feel comfortable here, accepted and able to be myself.
+6% An effort is made to accommodate any particular
need or goal that I have.
Where we still have work to do
There are three main areas of improvement that we need to focus
on based on the input and feedback we received in February.
Area to improve
1. Collaboration between different teams to get things done.
2. Improving internal systems and processes for
optimal productivity.
3. Our physical environment in our head office location;
making it more functional and enjoyable.
Actions planned
1. Team objectives for FY25 are being articulated and
shared between teams to clarify roles and responsibilities.
2. This has been built into the work plan for our new
Director of Digital & Technology.
3. A plan has been made to refresh and reconfigure the
space in our head office building. This will be completed
later in the year.
Continuous improvement
A few of our key achievements in FY24
April–June
2023
July–September
2023
October– December
2023
January–March
2024
– Listening Initiative
(‘The Booth’).
– Introduced new Bank
Holiday Swap Policy
(suggested by the
Inclusion Committee).
– Customer First workshops
attended by all colleagues
in teams.
– Signed the Race at
Work Charter (Business
in the Community).
– Published first ‘Diversity
Tracker’ to all colleagues
providing full transparency
on self-declared
demographic profile.
– Introduced key new benefits
(additional support for fertility,
menopause, volunteering).
– Achieved Bronze level
Accreditation with Clear
Assured (global accreditation
for best practice in diversity
and inclusion).
– Following shareholder
approval of our revised 2023
Directors’ remuneration
policy at the 2023 AGM,
we communicated changes
to our annual bonus process
with a new corporate
scorecard cascaded through
the business.
– Achieved Level 3
Disability Confident
Leader (highest status).
– Compulsory Inclusion
Training for the entire
business resulting in
personal commitments
and greater D&I
competence.
– Rotated volunteer leaders
for our Impact Groups.
– Adopted a new Board-
approved ethnic diversity
target for senior leaders
(Parker Review).
– HR-driven social value
confirmed – £162,460 for
the year (combination of
training, apprenticeships,
mental health support).
– Reviewed, refreshed and
published updated our
corporate values (adding
a fifth for customer).
– Conducted a
comprehensive annual
employee engagement
survey.
Strategic Report – Annual review
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Annual Report 2024 Great Portland Estates plc
Our people and culture continued
Powered by people
We have made several key changes and appointments
this year, promoting from within and also recruiting talented
specialists to support the acceleration of our flexible office
space roll-out and our focus on customers. We have also
taken steps to ensure our core supporting infrastructure
is strong and future-fit, whilst remaining focused on
headcount and cost management.
– Simon Rowley was promoted to the role of Director
of Flex Workspaces with overall responsibility to grow
our Flex office footprint.
– Jordan McLean was recruited as Director of Digital
& Technology and assumed responsibility for all our
digital transformation and innovation activities
in addition to managing our IT infrastructure.
– Helen Hare expanded her Projects remit to include
Health & Safety and two new teams; Technical Services
and Flex Workspaces Design and Delivery.
– Felicity Roocke was recruited as Head of Flex
Workspaces Design & Delivery and is responsible for
leading our workplace design and delivery strategy
for all our Flex projects.
– Federico Boronet joined as Senior Central Services
Manager in our Customer Experience team and has
responsibility for procurement and supply chain
management of all outsourced service contracts
and strategic service partner management.
– Anthony Osho was promoted to Customer
Relationships and Insights Lead, a new role focused
on Flex customers and portfolio-wide insight.
– Timothy Scanlon was recruited as a Customer
Experience Senior Manager overseeing our
Customer Operations at 200 Gray’s Inn Road.
– Molly Maguire joined as a Flex Leasing Manager and
is focused on growing our flexible workplace offering.
– Mark Walkden was promoted to Head of Technical
Services, with responsibility for the technical aspects
of all our buildings.
– Hugh Morgan, already a commercial Director, was
appointed as Director of Portfolio Management,
overseeing the implementation of asset strategies
across our entire building portfolio.
– Martin Leighton and Stephen Burrows were appointed
Co-Directors of Finance in an internal restructuring
of the Finance team. They are jointly responsible for
Corporate Finance, Finance Operations, Financial
Reporting, and Financial Planning & Analysis.
Anthony Osho, Customer Relationships
& Insights Lead:
“I’m looking forward to developing a dedicated
customer account management capability alongside
our asset and operational teams. Also, understanding
our customers’ experiences through what they tell
us and what they don’t tell us (but what we see in
how they interact with our spaces) is the next step
for insight strategy.”
Jordan McLean, Director of Digital & Technology:
“I’m really excited about the opportunity to drive
genuine innovation and digitisation into an industry
that is ripe for change. GPE have the appetite, energy
and leadership to transform not just the Company
but the whole industry and I’m thrilled to be here
to lead us on that journey.”
Molly Maguire, Flex Leasing Manager:
“I was very keen to join a brilliant team who all have
a shared goal and vision of creating, delivering and
leasing market-leading Flex spaces across London. It was
GPE’s Flex aspirations and commitment to the growth
of the Fully Managed portfolio which I found incredibly
exciting and something I wanted to be a part of.”
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Great Portland Estates plc Annual Report 2024
Colleagues making a difference
GPE has four very active Impact Groups that are focused on diversity, equality and inclusion issues. Each Impact Group is led
by volunteer colleagues from across the business and is sponsored by a member of the Executive Committee. These groups
are overseen by our Inclusion Committee, which meets six times a year and coordinates our efforts to cultivate an inclusive
workplace. The Inclusion Committee also advocates other strands of diversity for which we do not presently have an Impact
Group (primarily LGBTQ+ and abilities including visible and invisible disabilities).
Felicity Kelly, currently on
a secondment to HR covering
a maternity leave:
“In the six years I have been here, I have
definitely seen progress in terms of
the culture and ensuring that equal
opportunities exist for everyone to
succeed and advance their careers.”
James Harrop-Griffiths,
Investment Manager and
Inclusion Committee member:
“I have been a member of the IC since
it started in 2022. It’s been a fantastic
forum to increase my own learning and
confidence in talking about these topics
and I feel like I am helping to make
GPE a safe space for everyone.”
Yasemin Kiani, Communications
Lead and Co-Chair of the R&EIG:
“At first I was concerned that the D&I
work would be ‘all talk, no action’ but
I’ve actually seen the commitment from
our most senior leaders and I believe
they mean what they say. We still have
a lot to do but are on the right path.”
Health & Wellbeing Impact Group
Our Health & Wellbeing Impact Group supports our vision
of happy and healthy colleagues by raising awareness,
increasing knowledge and ensuring people have access to
tips and tools to improve their physical, mental and financial
wellbeing. The group sponsors a variety of events across the
year and there is widespread participation. Examples include
mini ‘health-MOTs’, a January fitness challenge, monthly
chair massages, board-game lunches, walking meetings,
nutrition talks, and financial planning seminars.
Race & Ethnicity Impact Group
Our Race & Ethnicity Impact Group is comprised of a
multi-cultural group of colleagues from across the business.
The purpose of this group is to support each other to
succeed at GPE and seeks to educate, encourage allyship,
and to generally create an environment which empowers
and celebrates the race, ethnicity and heritage of all our
colleagues. By raising awareness, the group has been
instrumental in helping colleagues in the wider business
to become more comfortable talking about race,
ethnicity and religion.
Women’s Impact Group
Our Women’s Impact Group advocates on issues and policies
related to gender equality and seeks to provide a safe,
supportive ‘network’ where colleagues can share experiences
and challenges as well as learn from and help each other.
This group provides networking opportunities for GPE women
through social and learning events and a ‘buddy system’
which rotates on a quarterly basis. The group also organised
events for International Women’s Day and held various
training sessions, open to all (Panel Speaking, Resilience,
Avoiding Burnout, and Silencing your Inner Critic).
Parents & Carers Impact Group
Our Parents & Carers Impact Group recognises the challenge
for those with caring responsibilities outside of work to
balance this with a thriving career. This group is committed
to helping colleagues feel empowered to be the best they
can be both inside and outside of work. This group has
actively influenced our family benefit policies and has
ensured that all colleagues have access to a widely used
support portal which offers resources and information
to help people achieve a healthy work-life balance.
Strategic Report – Annual review
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Annual Report 2024 Great Portland Estates plc
Our people and culture continued
GPE gender and ethnicity balance
Diversity and inclusion is at the heart of our People Strategy.
We genuinely believe that diversity gives us strength and we
value all kinds of diversity including diversity of experience,
thought and perspective. We are proud of the fact that:
– 89% of our colleagues say that they are treated with respect;
– 79% say they feel comfortable at GPE, accepted and able
to be themselves;
– 70% feel that GPE is doing the right things to improve D&I.
These results are encouraging and we will continue to build
on our progress to date. We are convinced that diverse
leadership teams create a competitive advantage and
we have set some important aspirational targets for
our gender and ethnic diversity to help us achieve
our ambitions. Specifically:
– 20% of all management roles will be held by colleagues
who identify with an ethnic minority category by
31 March 2025. 31 March 2024: 15%.
– 40% of all senior leadership roles will be held by
women by 31 March 2025. 31 March 2024: 33.3%.
In line with the Parker Review recommendations, we have
also set a further target for at least 15% of our senior
managers (Executive Committee and their direct reports)
to be represented by individuals identifying with an ethnic
minority category by the end of 2027. 31 March 2024: 4.2%.
Diversity disclosure tables
Gender:
as at 31 March 2024
Number
of Board
members
Percentage
of the Board
Number of
Senior Positions
on Board
(CEO, CFO,
SID and Chair)
Number
in Executive
Management*
Percentage
of Executive
Management
Number
of total
employees
Percentage
of total
employees
Men
6
60%
4
6
75%
64
48%
Women
4
40%
–
2
25%
69
51%
Other categories
–
0%
–
–
0%
1
1%
Not specified/prefer not to say
–
0%
–
–
0%
–
0%
* In accordance with the UK Listing Rules’ definition, Executive Management comprises the Executive Committee (being the most senior executive
body below the Board).
Ethnic Background:
as at 31 March 2024
Number
of Board
members
Percentage
of the Board
Number of
Senior Positions
on Board
(CEO, CFO,
SID and Chair)
Number
in Executive
Management*
Percentage
of Executive
Management
Number
of total
employees
Percentage
of total
employees
White British or other White
(including minority-white groups)
9
90%
4
8
100%
97
72%
Mixed/multiple ethnic groups
–
0%
–
–
0%
9
7%
Asian/Asian British
1
10%
–
–
0%
7
5%
Black/African/Caribbean/
Black British
–
0%
–
–
0%
11
8%
Other ethnic group,
including Arab
–
0%
–
–
0%
4
3%
Not specified/prefer not to say
–
0%
–
–
0%
6
5%
Approach to data collection
All individuals are asked to self-report their ethnicity and gender identity on a strictly confidential and voluntary basis with a ‘prefer not to say’ option for
certain fields. Over 95% of our population have self-reported personal information for ethnicity and gender identity as well as religion, sexual orientation
and disability.
Senior leadership gender diversity as at 31 March 2024
Males
Females
% Female
Executive Committee
6
2
25.0%
Senior Management
10
6
37.5%
All senior leadership roles
16
8
33.3%
Senior Management above is comprised of our Department
Directors and Heads of Departments. As at 31 March 2024, and
for the purposes of disclosure under section 414C Companies
Act 2006, our ‘senior leader’ population of Executive
Committee members (excluding the Executive Directors)
and members of Senior Management comprised 16 men
(66.6%) and 8 women (33.3%).
Executive Committee and direct reports as at 31 March 2024
63%
37%
Male 17
Female 10
The Executive Committee
and their direct reports include
Executive Directors, other Executive
Committee members (including
the General Counsel and Company
Secretary) and their direct
reports comprising individuals
for whom they have direct line
management responsibility,
excluding administrative or
support roles.
Information prescribed by the Listing Rules on the gender diversity of our Board and Executive Management, and also of our
total employee population, is set out in the diversity disclosure tables below. Details regarding the Board’s Diversity Policy and
representation targets, its approach to D&I and our Board diversity statement can be found in the Nomination Committee
report on pages 112 and 113.
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Great Portland Estates plc Annual Report 2024
Our stakeholder relationships
Whichever offer our customers choose, they are each
developed with sustainability at their core. We future proof our
spaces, incorporating technology to enhance the customer
experience, and they are designed to promote health and
wellbeing for our customers and local communities, with highly
adaptable open plan configurations and outdoor spaces.
We recognise that to deliver a high quality service, we need
to have a direct relationship with our customers. Therefore,
we have dedicated in-house Customer Experience and
Workplace Technical Services teams whose roles are to
manage the day-to-day operation of our buildings and
deliver an attractive service provision to all of our customers.
Our service proposition
It takes a true partnership to unlock potential. That is why
we work hand in hand with our customers to ensure we thrive
together. We understand there is no one size fits all approach
and that we need to work closely with our customers to
understand their challenges and changing needs. Our service
proposition ‘Together we thrive’ helps ensure we continue
to deliver and maintain the highest standards and includes
five service standards that have been rolled out across the
business to ensure consistency in our approach, whilst also
providing a strong promise to our customers:
Knowledge of the changing needs of our customers requires a
close relationship and regular engagement. A key element of
our approach, in addition to frequent day-to-day interaction,
is to require our team to formally meet with every customer
twice a year and we have enhanced our engagement with
Executive Committee members meeting a cross section of
our customers at least annually. Furthermore, our refreshed
Roadmap to Net Zero has introduced new sustainability
customer engagement targets. These meetings, combined
with the independent customer satisfaction surveys we
undertake, provide an understanding of how our customers’
real estate needs are developing and provide valuable insight
into the health of the sectors in which they operate.
Examples of topics raised during the year
– The rising cost of energy for our customers;
– Ensuring safety of buildings and health and wellbeing
of people in the office;
– Opportunities to improve service charge communication
and management processes;
– Areas to improve the user experience of our sesame® app;
– Single point of contact to support customer requirements,
enhanced strategic relationship with GPE; and
– Timely repair and swift communication of building issues.
Approach and objectives
Customer First
We know that every business is different, so we provide
choice to allow our customers to create their space the way
they want it. Our Ready to Fit offering provides flexibility for
customers to design and build the space in our buildings that is
just right for them and their people. We provide Fitted spaces
that are designed for our customers by our in-house experts.
Customers can also choose to have their space Fully Managed
by us, where we take care of everything, making life easier
and hassle free so they can concentrate on their business.
Customers
Understanding our customers’ businesses and
having a deep appreciation of what they require
enables us to deliver a workplace environment
in which they can focus on their own business
activities. Having a strong, enduring relationship
with our customers means we can work with them
to ensure they remain satisfied within their existing
workspace, and allows us to retain or relocate
them when their occupational requirements
change. Our ‘Customer First’ approach is vital to
help us design and deliver spaces and experience
which allow our customers’ businesses to thrive.
The role of the property owner is rapidly changing
as the needs of customers evolve. An attractive
office is now considered more than simply a location
in which to do business. It serves a broader purpose.
It needs to enhance the productivity of the
workforce, align to a business’s brand and culture
and play a key role in attracting and retaining
talent in a competitive marketplace.
GPE customer mix %
11%
31%
17%
23%
Retail, hospitality
and leisure
Banking and finance
Professional
Corporates
Technology, media
and telecoms
18%
Our key stakeholders have been identified as our investors, people,
customers, joint venture partners, communities, local planning authorities
and suppliers. See more on our people and culture on pages 63 to 68
See more on engaging with our investors on pages 100 and 101
See more on our communities on pages 50 and 51
Building and nurturing the relationships we have with our stakeholders is critical to our
success and too valuable to outsource. As a result, we manage all aspects of our property
portfolio in-house. We aim to build lasting relationships based on professionalism,
fair dealing and integrity.
Service standards:
Actively
listen
Bring the
energy
Be
flexible
Add
value
Keep our
word
Service proposition:
Together we thrive
Strategic Report – Annual review
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Annual Report 2024 Great Portland Estates plc
Our stakeholder relationships continued
Our joint venture partners
Joint ventures are an important part of our business
and today they comprise three active partnerships,
with BP Pension Fund (GRP), the HKMA (GHS) and
Threadneedle (GVP). Our joint ventures are built on
long-term relationships with trusted, high quality
partners. At 31 March 2024, they made up 20.4%
of the portfolio valuation, 31.0% of net assets
and 21.4% of rent roll (at 31 March 2023: 22.0%,
28.1% and 23.9% respectively).
Approach and objectives
Our approach has been to seek joint venture partners to
help us unlock real estate opportunities that might not have
been available to GPE alone, either through sharing risk or
providing access to new properties. The success of our joint
venture activities relies on strong relationships with our
partners, based on frequent engagement. Each partnership
has a joint board (including at least one GPE Executive
Director) that typically meets quarterly on a formal basis
with frequent ad hoc engagement throughout the year.
The joint venture properties are valued quarterly, with
detailed management information being provided to
the joint venture board.
Examples of topics raised during the year
– Evaluating the further roll out of Fitted and Fully Managed
spaces in Elm Yard, WC1 in GRP;
– Consideration of the refurbishment of 200 Gray’s Inn Road,
WC1 in GRP;
– Completion of the retail leasing at Hanover Square, W1
in GHS; and
– The retail leasing strategy for Mount Royal, W1, in GVP
given the evolution of Oxford Street.
How did we respond
– Further Flex roll out complete at Elm Yard with the
majority of the building now let on either a Fitted
or Fully Managed basis;
– Preparation for the refurbishment of elements of
200 Gray’s Inn Road with an anticipated start in
summer 2024; and
– strong leasing at Mount Royal, W1, including a new
22,500 sq ft flagship store for TK Maxx.
Next steps
Looking forward, we are working closely with our partners
to advance our business plans across our existing
joint ventures, together with actively seeking opportunities
to acquire new assets in joint venture structures.
How did we respond
– Incorporated customer feedback/issue tracking
in GPE customer CRM;
– Simplified our sesame® app, with phased roll out
planned and testing underway;
– Senior management tours of all development sites
and the managed portfolio exclusively focusing
on health and safety; and
– Detailed customer journey mapping completed,
service charge and Flex process improvements
being implemented.
High levels of customer satisfaction
We commission an annual independent customer
satisfaction survey which is designed to determine our
customers’ satisfaction with their building, communication,
our understanding of their business needs and ease of doing
business with us. This year 122 retail and office customers
participated. A key output of the survey is a Net Promoter
Score (NPS), which is best translated as the willingness to
recommend GPE. It is expressed as an absolute number
between -100 and +100.
Our office NPS remains high, at +30.2 in 2024 (2023: +44.0).
Whilst this year’s score is lower than last year, it remains
materially ahead of the industry average of +6.9. From the
valuable feedback and comments we receive, we prepare
building-specific action plans to further improve our
services. The plans are produced within four weeks of the
results and implemented as soon as possible, demonstrating
that we have listened and, more importantly, acted
on feedback.
Next steps
70% of respondents to our customer survey shared a
sustainability contact within their organisations for us
to talk to which will help us and our customers drive down
energy usage, drive up recycling rates and implement
new sustainability activities to lower our joint impact
on the environment.
Through our customer survey, this year many of our
customers told us that they would like a more strategic
relationship with us outside of their day-to-day interaction
with our CXM team. To this end we will be strategic, ensuring
that we spend more time hearing from the decision makers
within our customer community to ensure we better
understand their business and how we can help support
their space requirements.
We have also recently hired a Data Analyst to join our
CX team so 2024 will see us focusing more than ever on
what our data tells us, and using it to draw out actionable
insights to further improve customer experience.
Operational
measure
Customer satisfaction
(Office Net Promoter Score)
+30.2
2023: +44.0
Operational
measure
Net assets in
joint venture
31.0%
2023: 28.1%
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Great Portland Estates plc Annual Report 2024
Local planning authorities
Developing buildings in central London is challenging.
Conservation areas protect a large proportion of
the city, building heights are restricted, development
needs to be considerate to local residents and
justified in sustainability terms. Consequently,
the planning process is increasingly demanding,
lengthy and costly. Therefore, our relationships
with local planning authorities and communities
are key to the delivery of new spaces in London.
Approach and objectives
Navigating the planning process is key to our success.
We engage with local authorities, residents and other
stakeholders in an open, transparent and constructive manner
to understand their needs and, where possible, adjust our
proposals to take account of comments received. This helps
us to secure planning consents that are beneficial to us and
the local communities in which they are built. During the
deconstruction and construction phases, we maintain regular
meetings with residents and stakeholders to ensure we
mitigate the impact of the works and aim for our projects
to creating a lasting positive social impact in London.
Examples of topics raised during the year
– The increasing importance of sustainability commitments
and their impact on the planning landscape;
– The appropriate level of carbon tariffs, including new
proposals by Westminster City Council;
– Successful planning consents at Minerva House, SE1
and French Railways House & 50 Jermyn Street, SW1;
– Planning refusal on appeal for non-determination of
our proposed New City Court, SE1 development; and
– Increasing local authority preference for retrofit
over new build.
How did we respond
– Proactive engagement regarding the design and
development of schemes, with changes made to
incorporate feedback;
– Maintaining an appropriate balance between retrofit
and new build, including innovative approaches
to the circular economy;
– Driving down our in-use carbon through demanding
operational carbon intensity standards;
– Continued consultation with local authorities
directly and through business organisations; and
– Resident and key local stakeholder consultation
during planning processes.
Next steps
Over the coming year, we will be focused on managing
the procurement and delivery of our near-term projects,
whilst also progressing the early design stages of our
longer-term pipeline. We are also building on our innovative
approaches to design, materials and procurement to maintain
our market leading position on sustainability matters.
Furthermore, we will build on our ‘responsible developer’
credentials and the benefits to our projects including;
creation of employment generating space, strong
sustainability credentials, social value and biodiversity.
Our suppliers
We work with a diverse range of suppliers, from small
independents to large multinationals. The successful
and profitable delivery of our larger projects requires
strong relationships and collegiate working across
our supply chain. Whilst most procurement is subject
to a tender process to ensure we obtain value for
money, we aim to partner with suppliers who share
our values, work to secure the best people with
an established track record and, where possible,
retain key team members on successive projects.
Approach and objectives
The close relationship we foster with our suppliers, alongside
a track record of successful project delivery and a deep pipeline
of future work, means that people want to work with us,
and ensures that we have good access to quality partners.
For our development, refurbishment and fit-out projects,
regular communication is paramount. This starts with the
design process, where we encourage our project teams to
consider the art of the possible and work with our contractors
to explore new and innovative ways of working. We are
increasingly working with our supply chain partners much
earlier in the design process, including our leasing agents to
help us to ensure our buildings are optimally designed and,
where appropriate, evolve over the project to remain relevant.
We also aim to treat our suppliers fairly through prompt
payment, including bi-monthly payment terms with some
of our largest contractors. Whilst we expect all our suppliers
to operate to high standards, our Supplier Code of Conduct
sets out the standards that we require. Furthermore, we work
closely with our suppliers to enable us to achieve the goals set
out in our Sustainability Statement of Intent, using sensible
procurement methods to mitigate our carbon impact where
possible. We ensure that the sustainability and social impact
goals of our suppliers are taken into account prior to tendering
our contracts.
Examples of topics raised during the year
– Support for site safety and mental health;
– Impacts of inflationary pressures and supply
chain disruption;
– How to improve productivity in design, procurement
and construction; and
– Greater collaboration to reduce our carbon footprint
and improve social impact.
How did we respond
– 35 days’ average payment terms;
– Working with suppliers on information sharing and
initiatives to reduce carbon through the supply chain;
– Encouraged the adoption of the principles of the
Private Sector Playbook; and
– Working with suppliers to manage procurement options
and minimise the risk of modern slavery.
Next steps
Continue our collaboration with Lendlease to deliver the
redevelopment of 2 Aldermanbury Square, EC2, with Mace
to deliver French Railways House & 50 Jermyn Street, SW1
and with Multiplex to deliver Minerva House, SE1. For our
refurbishment and fit-out schemes we continue our great
work with Faithdean, 8Build, Knight Harwood and ISG
and also continue to expand our contractor base for
our near-term schemes.
Strategic Report – Annual review
71
Annual Report 2024 Great Portland Estates plc
Engaging with our stakeholders
You can read more about our approach to s.172(1) matters and stakeholder engagement as follows:
Key decisions and
long-term consequences
Statement from the Chair
See more on page 01
An evolving strategy underpinned by our
values and commitment to sustainability
See more on pages 02 and 03
How we create value
See more on pages 12 and 13
Impact on decisions
See more on page 104
Letter from the Chair of the Board
See more on pages 91 to 93
What we did in 2023/24
See more on pages 106 and 107
Employees
Our people and culture
See more on pages 63 to 68
Leadership and purpose
See more on pages 98, 99, 102 and 103
Fostering business relationships with
suppliers, customers and others
Our stakeholder relationships
See more on pages 39, 50, 63 to 70, 100 to 101
Leadership and purpose
See more on page 99
Communities
We are creating a lasting positive
social impact in our communities
See more on pages 50 and 51 and 69 to 71
Leadership and purpose
See more on page 99
Environment
Sustainability
See more on pages 37 to 62
Our stakeholder relationships
See more on pages 69 to 71
High standards of business conduct
Our people and culture
See more on pages 63 to 68
Our stakeholder relationships
See more on pages 69 to 71
Letter from the Chair of the Board
See more on pages 91 to 93
Anti-fraud, bribery and corruption,
ethics and whistleblowing
See more on pages 105 and 120
Investors
Letter from the Chair of the Board
See more on pages 91 to 93
Leadership and purpose
See more on pages 100 and 101
Our engagement
Our extensive engagement efforts help to ensure that
the Board can understand, consider and balance broad,
and sometimes conflicting, stakeholder interests when
making decisions to deliver long-term sustainable success.
Every decision the Board makes will not necessarily result in
a positive outcome for all stakeholders; however, the Board
aims to treat stakeholders fairly and consistently, guided
by GPE’s purpose, values and strategic priorities, and the
long-term interests of the Company.
Board processes
While the Board will engage directly with stakeholders
on certain issues, stakeholder engagement will often take
place at an operational level, with the Board receiving regular
updates on stakeholder views from the Executive Directors
and senior management.
As part of our Director induction process, Directors receive
a briefing and induction materials regarding their duties
under s.172. Training has further been delivered by the
Company Secretariat team to management to ensure that
they understand the duties of the Board and the importance
of s.172(1) matters in GPE’s strategy discussions and decision
making. Board papers for all key decisions are required
to include a specific section reviewing the impact of the
proposal on relevant stakeholder groups as well as other
s.172(1) considerations.
Page 104 sets out some examples of how the Board has
considered s.172(1) matters in its decision making in 2023/24.
Section 172(1) statement
The Directors have acted in the way that they considered,
in good faith, would be most likely to promote the success
of the Company for the benefit of its members as a whole
and, in doing so, have had regard, amongst other matters,
to those matters set out in section 172(1)(a) to (f) of the
Companies Act 2006, being:
– the likely consequences of any decision in the long term;
– the interests of the Company’s employees;
– the need to foster the Company’s business relationships
with suppliers, customers and others;
– the impact of the Company’s operations on the
community and the environment;
– the desirability of the Company maintaining a reputation
for high standards of business conduct; and
– the need to act fairly as between members of the Company.
Our stakeholders
As explained on pages 69 to 71, GPE has identified its key
stakeholders as being its: investors, people, customers,
JV partners, communities, local planning authorities and
suppliers. Building and nurturing these relationships based
on professionalism, fair dealing and integrity is critical
to our success.
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Great Portland Estates plc Annual Report 2024
Non-financial and sustainability information statement
This table is disclosed on a voluntary basis and signposts related non-financial and sustainability information in this report
and further reading on our website.
Reporting area1
Policies
Website
Reference in 2024 Annual Report
1. Environmental
and sustainability
matters
Sustainability Policy Statement
Our Brief for Creating
Sustainable Spaces
Our Guiding Principles of Design
Sustainability Statement of Intent
Our Roadmap to Net Zero
Task Force on Climate-related
Financial Disclosures (TCFD)
Streamlined Energy and Carbon
Reporting (SECR) disclosure
www.gpe.co.uk/sustainability
www.gpe.co.uk/sustainability/
our-approach
www.gpe.co.uk/investors/
investment-case/our-guiding-
principles
See more about sustainability,
including our updated Roadmap
to Net Zero on pages 37 to 62
See our SECR disclosures
on pages 44 to 47
See our response to the TCFD
Recommendations on pages 52 to 61
Additional information in response
to the requirements of s414CB(2A)
climate-related financial disclosures
(a–h) can be found on pages 38, 39,
42 to 47 and 52 to 61
2. Employees
Our values
Diversity Policy
Our People Plan
Personal Development Plans
www.gpe.co.uk/our-people/
our-values
www.gpe.co.uk/investors/
governance
www.gpe.co.uk/our-people/
diversity-inclusion
www.gpe.co.uk/our-people
See more about our values
on pages 03 and 63
See more about people and culture
on pages 63 to 68 and 110 to 113
See more about diversity and inclusion
on pages 67 and 68
3. Human rights
Supplier Code of Conduct
Annual Modern Slavery Statement
www.gpe.co.uk/investors/
our-relationships/our-service-
partners
www.gpe.co.uk/our-modern-
slavery-statement
See more about how we behave,
human rights and supplier stewardship
on page 105
See more about mitigating
the risk of modern slavery
on pages 51 and 105
See more about our suppliers
on page 71
4. Social
Social Impact Strategy
Creating Sustainable
Relationships
GPE Standard Supply Terms
Health and Safety Policy
www.gpe.co.uk/sustainability
www.gpe.co.uk/investors/our-
relationships/our-service-partners
www.gpe.co.uk/health-safety
See more about our stakeholder
relationships on pages 69 to 71
See more about communities
on pages 48, 50, 51 and 71
See more about our Social Impact
Strategy on pages 50 and 51
See more about our suppliers
on page 71
See more about providing safe,
healthy and secure environments
on page 49
5. Anti-corruption
and anti-bribery
Financial Crime Policy
Ethics and Whistleblowing Policies
Gifts and Hospitality Policy
Use of GPE Suppliers Policy
Conflicts of Interest Policy
Inside Information and
Share Dealing Policy
www.gpe.co.uk/investors/
governance
See more about anti-corruption
and anti-bribery matters
on pages 105 and 120
See more about our Financial Crime,
Ethics and Whistleblowing Policies
on page 120
6. Business model
www.gpe.co.uk/why-gpe/
our-brand
www.gpe.co.uk/investors/
investment-case
See more about how we create value
on pages 12 and 13
7. Principal risks
and uncertainties
Group Risk Management Policy
www.gpe.co.uk/investors/
governance
www.gpe.co.uk/investors/
investment-case/our-strategy
See more about our approach to risk
on pages 74 to 87
8. Non-financial
key performance
indicators
www.gpe.co.uk/investors/
investment-case/key-
performance-indicators
See more about our KPIs
on pages 16 and 17
See more about our near-term
strategic priorities on
pages 14 and 15
1. Board oversight of these policies and matters is also covered through ‘What we did in 2023/24’ on pages 106 and 107.
Strategic Report – Annual review
73
Annual Report 2024 Great Portland Estates plc
Our approach to risk
The successful management of risk is critical for the
Group to deliver its strategic priorities. Whilst the ultimate
responsibility for risk management rests with the Board,
the effective day-to-day management of risk is integral
to the way we do business and the culture of our team.
Our attitude to risk is one of collective responsibility, with the
identification and management of risks and opportunities
being part of the mindset of the GPE team. Our organisational
structure, including close involvement of senior management
in all significant decisions and in-house management of our
development, portfolio and occupational service activities,
together with our prudent and analytical approach, is designed
to align the Group’s interests with those of shareholders.
Setting and monitoring our ‘risk appetite’
The Group’s overarching risk appetite is set in the context that we
focus on a single market, that of central London, operating out of
a single head office within close proximity to all of our activities.
Central London’s real estate markets have historically been
highly cyclical and, as a result, we apply a disciplined approach
to our capital allocation and managing our operational risk,
in particular our development exposure, in tune with prevailing
market conditions. Furthermore, we aim to operate with low
financial risk by maintaining conservative financial leverage.
Further details regarding our management of financial risks can
be found in Note 16 to the Financial Statements on page 172.
We use a suite of key operational parameters as an
important tool to set and then measure the Group’s risk
profile. These parameters consider, amongst other matters,
the Group’s size, financial gearing, interest and fixed charge
cover, level of speculative and total development exposure,
level of Flex exposure and single asset concentration risk.
These parameters are revisited annually as part of the
Board’s strategy review and are regularly reviewed at Board
meetings. We monitor the Group’s actual and forecast
position over a five-year period against these parameters.
We set a target risk position for each of our principal risks
to determine whether the net risk position of each principal
risk is within the Board’s risk appetite level, and to determine
any appropriate risk response.
Our risk culture and how we manage our risks
Our overarching risk management process comprises
four main stages, as summarised in the diagram below.
We believe that effective management of risk is based
1
4
2
3
Risk identification
– Identification and description of
significant and emerging risks that
could affect GPE’s key objectives
– Risks categorised with assignment
of accountabilities and executive
ownership of principal risks
Risk monitoring, reporting and escalation
– Risks documented, reported and monitored
on a regular basis by management,
Executive Committee, Audit Committee
and Board
– New risks and significant changes to
risk profiles escalated as appropriate
Risk assessment
– Potential impact and likelihood of
risk assessed using defined criteria
– Principal risks assessed on a gross,
net and target risk basis
Risk response
– Appropriate response determined
with reference to risk appetite
– Risk response may include Treat,
Transfer, Terminate or Tolerate
Communication
and
consultation
on a ‘top-down’ and ‘bottom-up’ approach with
appropriate controls and oversight, as outlined on page 75,
which include:
– our strategy setting process;
– the quality of our people and culture;
– established procedures and internal controls;
– policies for highlighting and controlling risks;
– oversight by the Board, Committees and management; and
– ongoing review of market conditions and the property cycle.
Moreover, risk management is an integral part of all our activities.
We consider risks and, more positively, where these might also
provide opportunities, as part of every business decision we make,
including how they would affect the achievement of our strategic
priorities and the long-term performance of our business.
Six-monthly assessment of principal and emerging
risks, opportunities and effectiveness of controls
As part of a robust assessment of the principal and emerging risks
facing the Group, at the half-year and year end, the Executive
Committee, Audit Committee and Board formally review the
Group’s principal and emerging risks, including those that would
threaten its business model, future performance, solvency
or liquidity and reputation. Importantly, part of this review
is the consideration of:
– the internal operational controls in place to mitigate
the principal risks, how key controls have operated in the
preceding six months and additional activities and
controls to further reduce risks where desirable, including
any instances where net risk assessments may exceed
the target risk position;
– consideration of any emerging risks and opportunities; and
– the Board’s ongoing monitoring of these risks.
Whilst emerging risks and opportunities are considered
as part of this formal six-monthly assessment, the Board
spends additional time at scheduled Board meetings on
‘blue sky’ thinking and consideration of possible emerging
risks. Executive Committee members are tasked to provide
a summary in their regular Board updates of the three areas
concerning and exciting them the most. We also ask our
functional Directors and Heads of Department the same
question to continually challenge ourselves as to how
we should evolve. Emerging risks are also considered by
the Board as part of its annual strategy review. Further
information on emerging risks can be found on page 77.
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Great Portland Estates plc Annual Report 2024
Board oversight of risk
Business risk
Nomination Committee
Audit Committee
Board
Remuneration Committee
Operational Committee oversight
Weekly/Monthly
Development management
Portfolio management
Investment management
Financial management
Customer experience & relationships
Inclusion Committee
Quarterly
Health and safety
Development management review
Portfolio management review
Sustainability
Social impact
Executive Committee
High-level risk assessment
framework
Strict approval requirements
Extensive documentation
to support decisions
Formal policies and procedures
consistently applied
Defined performance indicators
with sensitivity analysis
External review of key
controls/internal audit
Observations from the
external auditor
Whistleblowing Policy
Focused market expertise
Open communication
Transparent disclosure
with stakeholders
Integrity in business conduct
Interests aligned with shareholders
Qualified and experienced
personnel with specific roles
Intense Development,
Portfolio Management, Leasing
and Customer Experience teams
Conservative attitude
to capital deployment
Analytical rigour
Investment return benchmarks
Debt leverage, covenant
compliance and liquidity limits
Regular review of business plans,
dashboard lead indicators
and operational parameters
Occupancy targets
Development appraisal parameters
Leasing objectives and
customer covenant testing
People and culture
guided by our values
Procedures and
internal controls
Policies for highlighting
and controlling risk
Strategic Report – Annual review
75
Annual Report 2024 Great Portland Estates plc
Our approach to risk continued
With volatile macro conditions across the global landscape,
the Board and the Audit Committee have overseen the
Company’s response to the challenging macro environment,
including persistently higher inflation and interest rates, which
have driven up property yields, and the UK entering a shallow
recession. This has included actions taken to mitigate risks but
also to position GPE to take advantage of the opportunities
arising from uncertain markets and the evolution of the
property cycle.
The Board and Audit Committee continue to monitor
macro-economic and political risks, including those risks
arising from Russia’s invasion of Ukraine, conflict in the Middle
East and other geopolitical tensions, along with their potential
impacts on the UK economy, our operations and London’s
attractiveness. Further details on market impacts can be
found in ‘Our markets’ on pages 21 and 22 and our viability
assessment on page 88.
Our principal risks remain largely unchanged from the prior
year when we took the opportunity to reframe, consolidate
and simplify several principal risks while reflecting the
increased emphasis of macro-economic uncertainty in the
risk landscape. Amongst other changes, this included the
introduction of a standalone ‘Adverse macro-economic
environment’ principal risk. We have since revised the
descriptions and assessments of some of our principal
risks to reflect how they evolved over the past 12 months.
Key changes include the following:
– our risk assessment of ‘Adverse macro-economic
environment’ increased at the half year. However, in view of
moderating inflation, anticipated interest rate cuts later in
2024 and stabilising yields, alongside improved sentiment,
rebased property valuations and healthy customer demand
(amidst a tightening supply of prime space and rising
rents), our assessment of macro-economic risks has now,
on balance, reduced back to a level comparable to where
it was 12 months ago. While macro-economic risks remain,
we believe that GPE is well positioned to take advantage
of accretive acquisition opportunities presented by
market conditions and the anticipated inflection in the
property cycle;
– amidst volatile macro-uncertainty, the need to ensure
the appeal of the London Stock Exchange to investors and
issuers has been the subject of much high profile discussion.
In this context, the risk of diminishing attractiveness of the
London Stock Exchange potentially limiting the availability
of capital has therefore been incorporated in our ‘Adverse
macro-economic environment’ risk;
– the ‘Poor capital allocation decisions and/or misreading
market conditions’ risk has been updated to expressly
reference the risk of our failing to read and respond to
the evolution of the property cycle. Our assessment of this
risk has reduced on balance due to increased gearing being
offset by less volatile market conditions, stabilising property
valuations, and rebased residual values increasing forecast
development returns. Market conditions are also expected
to present opportunities for GPE to purchase assets at
attractive pricing;
Likelihood
Low
Medium
High
Low
High
Medium
Impact
Principal risk
1
Failure to meet customer needs
2
Climate change and decarbonisation
3
London attractiveness
4
Adverse macro-economic environment
5
Poor capital allocation decisions and/or misreading
market conditions
6
Failure to profitably deliver the development
and/or refurbishment programme
7
People
8
Health and safety
9
Cyber security and infrastructure failure
10 Failure to profitably deliver the Flex Strategy
Net risk heatmap
2
3
4
5
7
Net risk rating as assessed after existing controls and mitigation
1
Risk severity
Medium
Low
High
9
10
1
8
6
76
Great Portland Estates plc Annual Report 2024
– as we progress the growth of our Flex business and
associated refurbishment activities, our ‘Failure to
profitably deliver the development programme’ risk
has been expanded to also capture the risk of our not
translating the growing refurbishment programme
into profitable schemes;
– our assessment of the ‘Failure to profitably deliver the
development and/or refurbishment programme’ risk has
reduced overall with the progress of our development
pipeline (planning now having been secured for our three
major HQ development schemes), construction costs
stabilising, expected interest rate cuts and re-based residual
land values supporting the profitability of developments.
The business is live to the increasingly challenging planning
environment which is a key consideration in acquisition
decisions and related appraisals; and
– the ‘Failure to profitably deliver the Flex Strategy’ risk
has also been updated to capture the risk that failing to
deliver our target Flex growth will impact the delivery of
the Flex strategy and our ability to generate appropriate
risk adjusted returns.
A description of the Group’s principal risks, and a summary
of the key controls and steps taken to mitigate those risks,
is shown on pages 78 to 87. The likelihood and impact of each
principal risk is assessed on a gross, net (taking account
of the Group’s existing controls and mitigations) and target
risk basis (to determine whether the net risk position is within
the Board’s appetite level). The net risk assessment for each
principal risk is shown on the heatmap on page 76.
The Board’s ongoing monitoring of the
Group’s principal risks and controls
Ongoing monitoring of our principal risks and controls
by the Board is undertaken through:
– relatively low levels of authority for transactions
requiring Board approval, with investment transactions
and development approvals requiring, amongst other
matters, consideration of the impact on financial
leverage, interest cover and portfolio risk/composition;
– the Executive Committee’s oversight of all day-to-day
significant decisions;
– the Chief Executive reporting on the market conditions
dashboard, operational parameters, sustainability
and digital, IT and innovation activities, as appropriate,
at each scheduled Board meeting;
– members of the Executive Committee regularly providing
a review of the development programme, occupational
markets and key property matters to the Board;
– the Chief Financial & Operating Officer reporting
on Group forecasts, including actual and prospective
leverage metrics, HR, Flex, customer experience,
marketing and social impact matters at scheduled
Board meetings;
– the Executive Director reporting on the customer
watch list and delinquencies, voids and vacancy rates,
health and safety matters and new business developments
at scheduled Board meetings;
– the Executive Directors communicating with the Board
on any significant market and operational matters
between Board meetings;
– senior managers attending the Board and Committee
meetings as appropriate to discuss specific risks
across the business, such as sustainability, health and
safety, regulatory, people and cyber risks, or relating
to transactions;
– the Audit Committee meeting with the valuers at least
twice a year to better understand market conditions
and challenge the assumptions underlying the
valuation; and
– the Audit Committee receiving internal audit reports
on key risk and control areas and observations from
the external auditor.
Board consideration of emerging risks
As explained on page 74, the Board regularly considers
emerging risks and opportunities which could impact
the business. Whilst risks relating to structural market changes
and short and medium-term climate change are considered
within our principal risks, we have also spent time discussing
emerging risks across a number of themes, examples of
which are set out below:
– technological advances including artificial intelligence,
the emergence of the metaverse and other disruptive
technologies could impact the quantum and nature of
demand for work space in central London. Failure to evolve
quickly enough could also result in the loss of customers
to competitors. Our Digital, Technology and Innovation
Strategy is designed to identify innovation opportunities
for GPE to enhance its offer and demand;
– the long-term impacts of climate change could impact
the ability to travel to, live, work and shop in central
London. Our approach to climate resilience is set out in our
Sustainability Statement of Intent, updated Roadmap to
Net Zero and Our Brief for Creating Sustainable Spaces;
– deglobalisation resulting from geopolitical tensions could
lead to recognised world centres becoming less relevant,
which could impact London’s status as a capital city and
global gateway. Geopolitical risks could restrict capital
flows, adversely impact investment markets and impact
the availability of materials, labour and energy security;
– changes to tax and economic policies given current
levels of government debt and/or as a consequence of
a general election in 2024 could result in increases in sales
taxes, stamp duty, business rates and corporation tax
and adversely impact the real estate market, occupier
demand and GPE returns; and
– increasing regulation, reporting and assurance requirements
could increase operational costs and constrain resources,
impacting returns.
Strategic Report – Annual review
77
Annual Report 2024 Great Portland Estates plc
Our approach to risk continued
How we manage principal risks and uncertainties
Principal risk
Strategic priorities
How we monitor and manage risk
Failure to meet customer needs
We fail to identify and react
effectively to shifting patterns of
workspace use and/or understand
and provide spaces that meet quickly
evolving customer needs, including
potential longer-term structural
changes in working and/or retail
practices that change the level
and nature of demand for space
in central London. This could lead
to GPE failing to deliver space and
lease terms that customers want
and/or an inappropriate mix of Flex
versus traditional space, resulting in
poor investment returns, potentially
stranded assets and losing customers
to competitors.
1
Progress
sustainability
and innovation
agenda
2
Enhance
portfolio
through sales
and acquisitions
3
Deliver on our
Flex ambition
4
Embed our
Customer
First approach
5
Deliver and lease
the committed
schemes
6
Prepare
the pipeline
– HQ repositioning and Flex office strategy to meet evolving customer demand.
– Quarterly review of individual property business plans and the market
more generally.
– Portfolio Management, Leasing, Flex and Customer Experience quarterly
updates to the Executive Committee with reporting at scheduled
Board meetings.
– Board and management review of GPE’s flexible space offer across
the portfolio, including broadening our product offer.
– The Group’s in-house Customer Experience team has proactive engagement
with customers to understand their occupational needs and requirements
with a focus on retaining income, including through meetings and regular
customer surveys which help us track our Net Promoter Score. Includes
proactive communication with customers to manage the impacts of
building works and refurbishments.
– Cross-functional customer and building action plans are regularly reviewed
to align the customer strategy with customer needs.
– Programme of engagement for members of the Executive Committee to
meet with a selection of customers across the portfolio at least once a year.
– Working with potential customers to address their needs and aspirations
during design stages of projects. Board and management oversight of the
development and implementation of our Digital, Technology and Innovation
Strategy and related initiatives.
– Design (supported by a specialist fit-out team) and innovation activities
in the areas of sustainability, technology, wellbeing and experience.
– Customer First programme and strategy in place, with dedicated leadership,
relationship management and insights capabilities supported by our customer
relationship management system. Customer service proposition and
standards in place to ensure consistency when delivering the strategy.
– Board annual strategy review, including market updates received from
third parties.
– New ‘We value every customer’ corporate value adopted in the year to
reflect and reinforce our Customer First approach.
Climate change and decarbonisation
The need to decarbonise our business
increases the cost of our activities
through the need to retro-fit buildings
to improve their sustainability
credentials (e.g. minimum energy
efficiency standards and building
ratings) and make them resilient to
the impact of climate change. This
also reduces our ability to redevelop
due to planning restrictions, increased
regulation (including additional
reporting obligations and costs)
and stakeholder expectations,
the increased cost of low carbon
technology/materials (including
utilisation of the circular economy)
and potentially the pricing of carbon.
Failure to meet the climate challenge
could impact our ability to raise
capital, deliver buildings, reduce
the demand for the buildings we
own, cause significant reputational
damage and result in exposure
to environmental activism and
potentially stranded assets.
1
Progress
sustainability
and innovation
agenda
2
Enhance
portfolio
through sales
and acquisitions
4
Embed our
Customer
First approach
6
Prepare
the pipeline
– Regular Board and Executive Committee review of Sustainability Policy
and response to climate risk.
– Sustainability Committee meets quarterly to consider strategy in
respect of climate change-related risks. Its Portfolio and Development
sub-committees meet regularly and report to the Sustainability
Committee on progress.
– Social Impact Committee meets quarterly to oversee the delivery
of our Social Impact Strategy.
– Dedicated Sustainability and Social Impact Director on the Executive
Committee supported by Sustainability Lead.
– Design Review meetings to review design brief for all buildings to ensure
that forthcoming sustainability risks are considered.
– Sustainable Spaces Brief and Sustainability Strategy in place with climate
resilience strategy.
– Updated Roadmap to Net Zero with challenging embodied carbon and
energy intensity targets. Decarbonisation Fund and internal carbon
price established to support initiatives including energy efficiency
retro-fitting in existing buildings.
– ESG-linked RCF and annual bonus measures to support delivery of
decarbonisation and reduction in energy consumption within the business.
– Programme of ESG investor engagement in place, with regular review
of reporting requirements and participation in investor indices.
– Steering group to assess, manage and monitor EPC risks across the
portfolio both to estimate compliance costs and to inform our buy,
hold and sell strategy and decisions.
– Participation in industry bodies to influence policy and drive innovation.
78
Great Portland Estates plc Annual Report 2024
Net risk movement
over the last 12 months
Commentary
No change
With hybrid working here to stay, and customers having more choices about where they work, our spaces need to
provide compelling reasons to come into the office. With average office rents only c.5%–10% of a typical London
business’ salary cost, and the office environment a key tool in attracting and retaining talent, we anticipate that
competition for the very best spaces will remain healthy. We continue to witness a growing divergence between the
prospects of the best spaces versus the rest, and we believe this is set to widen further as customers seek out sustainable
and well designed, prime spaces, of which there is a marked shortage, particularly in the West End.
Our strategy of focusing on the best spaces, both through our development of large, best-in-class HQ buildings and
smaller fitted units, often with higher service levels, is underpinned by the need to meet the evolving demands of our
customers. To ensure we are delivering the spaces our customers want, we have continued to develop our Customer
First approach and embed this into our culture and across our business operations. This has included, amongst other
things, a refresh of our Fully Managed branding, the reorganisation and strengthening of our teams with new hires
and promotions, and the further roll out of our new customer service proposition and associated service standards
supported by our Customer Relationship Management System.
Reflecting how our Customer First approach is becoming entrenched in our culture, we also adopted a new GPE
Value in the year – ‘We value every customer’.
Testament to our approach, we had a good leasing year, completing 66 new leases and renewals, and securing
£22.5 million of rent at a 9.1% premium to March 2023 ERVs, whilst continuing the successful roll-out of our flexible
space offering.
We continue to design and innovate in the areas of sustainability, technology, wellbeing and service provision. During the
year, we expanded our flexible offerings in line with quickly evolving customer demand, including the further roll-out
of our Fully Managed offer. Together with planned acquisitions, we are aiming to expand our Flex office offering to
more than one million sq ft.
A close relationship with our customers is vital to our success. We were pleased by this year’s independent customer
satisfaction survey, which updated our understanding of how our customers view their buildings and the services
we provide. Our office Net Promoter Score remained high (albeit down from last year’s score) at +30.2, significantly
above the office industry average of +6.9.
No change
With the built environment contributing approximately 40% of the UK’s carbon footprint and the climate change
debate being both a moral and economic imperative, particularly for our customers and other stakeholders, we have
been further expanding our sustainability commitments and activities. Our Statement of Intent ‘The Time is Now’
was launched in 2020. Since then, our approach and thinking has developed considerably. In our recently released
version 2.0, we set out our increased ambitions to reduce our carbon impacts and revised timelines in which to
achieve them.
For further details, see pages 39 to 43.
Our Sustainable Finance Framework governs our potential future debt issuance, with the aim of financing projects
that have a positive environmental and/or social impact. This builds on our ESG-linked revolving credit facility, which
includes targets to reduce embodied carbon from our new developments and major refurbishments and to improve
biodiversity across our portfolio. The rate of interest we pay on this facility depends on our performance against these
targets. Furthermore, sustainability targets have been included within the annual bonus scorecard of the whole GPE
team and are being used to assess levels of remuneration. Good progress has been made against the 2023/24 annual
targets, as set out on pages 17, 41, 43 and 130.
We continue to work to improve the number of our buildings rated for their sustainability credentials. The UK Government
has previously announced its intention that all buildings will require an Energy Performance Certificate (EPC) rating
of B or above by 2030. As a result, we have created individual asset plans to proactively improve our EPC ratings to meet
government and broader stakeholder expectations, to assess potential exposures and inform our hold/sell strategies.
We expect the sustainability challenge to provide us with potential opportunities to acquire orphaned assets
needing a sustainability solution.
Strategic Report – Annual review
79
Annual Report 2024 Great Portland Estates plc
Our approach to risk continued
How we manage principal risks and uncertainties continued
Principal risk
Strategic priorities
How we monitor and manage risk
London attractiveness
London’s appeal may be impacted by
reduced appetite to travel to, work
and shop in London due to changes in
working patterns, changes in government
policies or political instability, the rise of
alternative destinations for international
trade, the impact of civil unrest, terrorism,
a pandemic, the impact of long-term
climate change (including risk of flooding),
disruption to energy supplies and/or the
relative expense of operating in London.
This results in reduced international capital
flows into London, leading to a lack of
investment and/or capital flight (including
diminished appeal of the London Stock
Exchange), lower leasing demand and
elevated vacancy, decreasing income,
asset values and development viability.
2
Enhance
portfolio
through sales
and acquisitions
3
Deliver on our
Flex ambition
4
Embed our
Customer
First approach
5
Deliver and lease
the committed
schemes
6
Prepare
the pipeline
– Board annual strategy review with regular economic and market
updates received from third parties.
– Strategic financial forecasts are updated prior to each Board meeting
with scenario planning for different economic cycles and eventualities.
– Regular review of strategic priorities and transactions in light of the
Group’s dashboard of lead indicators and operational parameters.
– Key London indicators are monitored to help inform GPE’s view of
London’s economy.
– The impacts of international trading relationships, supply chain disruption
and geopolitical issues continue to be monitored and reported to the
Executive Committee and Board.
– Active participation in industry groups to promote London.
– Business Continuity Plan in place to manage our response to a major
incident or disruption.
Adverse macro-economic environment
Adverse macro-economic conditions
driven by events such as geopolitical
tensions (including conflicts in the Ukraine
and Middle East), UK political instability
or government policy and supply chain
disruption result in weakened UK GDP
growth and recession. Elevated inflation
(including energy prices), persistently
higher interest rates and reduced
consumer spending impair investor and
occupier demand, increase customer
and supplier failure, limit the availability
and increase the costs of debt financing,
curtail income and reduce asset values
and returns. As a result, GPE’s financial
leverage increases and potentially results
in limited availability of capital (including
the reduced attractiveness of the London
Stock Exchange) and/or a breach of our
banking covenants.
2
Enhance
portfolio
through sales
and acquisitions
3
Deliver on our
Flex ambition
4
Embed our
Customer
First approach
5
Deliver and lease
the committed
schemes
6
Prepare
the pipeline
– Regular review of financing and capital structure, including gearing levels,
by the Chief Financial & Operating Officer and Executive Committee.
– Board annual strategy review including regular economic and market
updates received from third parties.
– Strategic financial forecasts are updated prior to each scheduled
Board meeting with scenario planning for different economic cycles
and eventualities.
– Regular review of strategic priorities and transactions in light of the
Group’s dashboard of lead indicators and operational parameters.
– Regular review of current and forecast debt, hedging levels and
financing ratios under various market scenarios.
– The Group aims to maintain a consistent policy of conservative
financial leverage.
– Proactive balance sheet management.
– Investor relations programme, with regular broker consultation,
to build a supportive base in the event of future fundraisings.
– The Group’s funding measures are diversified across a range of bank
and bond markets. Sustainable Finance Framework in place for
future debt issuances. During the year, the Group secured a new
£250 million term loan and £200 million backstop facility.
– Selection of customers, contractors and suppliers based on
creditworthiness and close monitoring of rent and service charge
collection rates.
80
Great Portland Estates plc Annual Report 2024
Net risk movement
over the last 12 months
Commentary
No change
London generates around a quarter of UK GDP and is one of the world’s leading commercial, creative and financial
centres, with a deep pool of talent. It has one of the world’s largest commercial real estate markets, with around
440 million sq ft of office and retail property attracting a deep and diverse mix of customers and property investors,
many from overseas. London remains one of the leading global destinations for real estate investment due to its
combination of relative value, strong legal system, time zone advantages, international connectivity and a welcoming
attitude to global businesses.
Factors such as the impact of geopolitical tensions, supply chain disruption, lower GDP forecasts, inflationary pressures,
elevated interest rates and rising costs of living have weighed on sentiment and impacted activity in our investment
markets. However, London is resilient, our leasing activity remains robust and West End footfall and tourism has returned
to near pre-pandemic levels. Central London is busy and office workers have returned, with hybrid working now
the norm. With the macro-economic environment anticipated to improve during 2024, we believe that London’s
attraction as a global cultural and business centre is undiminished.
No change
Our markets remained challenging over the course of the financial year. However, inflation has moderated, interest rate
cuts are anticipated over the course of 2024 and we believe yields are stabilising. This, alongside improved sentiment,
rebased property valuations and healthy customer demand amidst a tightening supply of prime space and rising
rents, has resulted in our assessment of macro-economic risks being comparable to where it was 12 months ago.
Given this backdrop, our property values reduced by 12.1%, on a like-for-like basis, over the year driven by the impact of
elevated interest rates on property yields. Whilst values were down, GPE delivered a strong leasing year and our portfolio
ERVs continued to grow, up 3.8% in the year, reflecting the continued shortage of high quality space across our markets.
Over the long term, real estate markets have historically been cyclical, and London has been no exception to this.
As a result, we have consistently adopted a conservative approach to financial leverage. As at 31 March 2024,
our property LTV was 32.6%, net gearing was 46.8% and interest cover was 3.7 times. Accordingly, we have substantial
headroom above our Group debt covenants. We estimate property values could fall around 34% before Group
debt covenants could be endangered, even before factoring in mitigating management actions. The Group also
has significant financial capacity with liquidity of £633 million (including joint ventures), comprising unrestricted
cash of £30.4 million and undrawn committed credit facilities of £603.0 million.
While macro-economic risks remain, we believe that GPE is well positioned to take advantage of accretive acquisition
opportunities presented by market conditions and the anticipated inflection in the property cycle.
Strategic Report – Annual review
81
Annual Report 2024 Great Portland Estates plc
Our approach to risk continued
How we manage principal risks and uncertainties continued
Principal risk
Strategic priorities
How we monitor and manage risk
Poor capital allocation decisions and/or misreading market conditions
We make poor decisions regarding
the allocation of capital and/or fail
to adequately read the property cycle
or market conditions (including global
investor appetite for commercial
real estate and offices) such that our
leasing, buying, selling or development
activities deliver inadequate investment
returns, restrict our ability to finance
our operations or result in inappropriate
asset concentration, building mix and/
or level of development undertaken
as a percentage of the portfolio.
1
Progress
sustainability
and innovation
agenda
2
Enhance
portfolio
through sales
and acquisitions
3
Deliver on our
Flex ambition
4
Embed our
Customer
First approach
5
Deliver and lease
the committed
schemes
6
Prepare
the pipeline
– Board annual strategy review including regular economic and market
updates received from third parties.
– Strategy review forecast on an asset-by-asset basis to provide a business
plan for each individual property which is subsequently reviewed against
the performance of the business as a whole.
– Strategic financial forecasts are updated prior to each scheduled
Board meeting with scenario planning for different economic cycles.
– Regular reviews conducted of individual property IRRs, including quarterly
review of individual property dashboards, and market generally. Quarterly
review of asset-by-asset business plans to assess future performance
and to inform hold/sell decision making.
– Weekly investment meetings held and regular dialogue maintained
with key intermediaries.
– Portfolio Management, Flex, Customer Experience, Development and
Leasing quarterly updates to the Executive Committee with reporting
at scheduled Board meetings.
– Regular review of property cycle by reference to a dashboard
of lead indicators.
– Dedicated in-house team with remit to research submarkets in central
London, seeking the right balance between investment and development
opportunities for both current and prospective market conditions.
– Detailed due diligence processes for all prospective acquisitions/capital
expenditure to help ensure appropriate returns. Key decisions are subject
to Board and/or Executive Committee approval in line with the Group’s
delegated authorities.
Failure to profitably deliver the development and/or refurbishment programme
We fail to translate the development
and/or refurbishment pipeline and
current committed schemes into
profitable schemes. This may result from
poor scheme management (including of
supply chain disruption, the impacts of
inflation or adverse yield movements),
an increasingly challenging planning
and regulatory environment, failure
to agree acceptable terms with
freeholders/adjoining owners/other
stakeholders, poor timing of activity
and/or inappropriate products for an
evolving market and customer needs
(including sustainability expectations).
This results in reduced development
and/or refurbishment activity, weak
leasing performance, reputational
damage and reducing property returns.
1
Progress
sustainability
and innovation
agenda
2
Enhance
portfolio
through sales
and acquisitions
4
Embed our
Customer
First approach
5
Deliver and lease
the committed
schemes
6
Prepare
the pipeline
– Strategic financial forecasts are updated prior to each scheduled
Board meeting with scenario planning for different economic cycles.
– Development management quarterly updates to the Executive Committee
with reporting to each scheduled Board meeting.
– Regular review of portfolio mix and asset concentration. Adjustment
of the portfolio as appropriate through undertaking acquisitions and/or
development projects in joint venture or forward funding.
– Regular meetings with key cost advisers, main contractors and subcontractors
to monitor market conditions. Procurement routes and when to fix prices kept
under close review.
– Prior to committing to a scheme, the Group conducts a detailed financial and
operational appraisal process which evaluates the expected returns from a
scheme in light of likely risks. During the course of a scheme, the actual costs
and estimated returns are regularly monitored to signpost prompt decisions
on project management, leasing and ownership.
– Regular pipeline review meetings between the Development and Portfolio
Management teams and quarterly asset review sessions.
– Selection of contractors and suppliers based on their track record of delivery
and creditworthiness, corporate responsibility and sustainability credentials.
– Post-completion reviews undertaken through Final Appraisal process on
all developments to identify best practice and areas for improvement.
– Regular, proactive engagement with key stakeholders: working closely with
agents, potential customers, and purchasers to identify and address their
needs and aspirations, including in respect of safety, sustainability, wellbeing
and technology during the planning application and design stages; regular
meetings with local authorities, planning officers and experienced planning
advisers; early engagement with local residents and community groups,
adjoining owners and freeholders.
– Design Review meetings to review design briefs for all buildings for
sustainability considerations. All our major developments are subject
to an appropriate sustainability rating requirement.
– Regular review of the prospective performance of individual assets
and their business plans with joint venture partners.
82
Great Portland Estates plc Annual Report 2024
Net risk movement
over the last 12 months
Commentary
Decreased
During the year, we committed to the development of Minerva House, SE1 and French Railways House & 50 Jermyn
Street, SW1. We are also on-site at four Flex refurbishment schemes which are anticipated to deliver 145,000 sq ft of
Fully Managed space. In total, our HQ development and Flex capex programme provides a strong platform for organic
growth. Together, our seven on-site schemes will deliver 678,300 sq ft of well designed, tech-enabled and sustainable
space into a market where prospective supply is increasingly limited. Moreover, with around £120 million of anticipated
development surplus to come from these schemes, they will provide a strong foundation to the Group’s growth in the
coming years.
We continue to assess potential HQ development and Flex acquisition opportunities across central London and regularly
review the forward-look performance of our portfolio to maximise returns. During the year, we acquired £122.9 million
of new opportunities, including 141 Wardour Street, W1 and the Soho Square Estate, W1. More recently, we exchanged
contracts to acquire the long leasehold interest at The Courtyard, WC1.
Our assessment of this risk has reduced on balance with increased gearing being offset by volatile market conditions,
stabilising property valuations and rebased residual values increasing forecast development returns. Market conditions
are also expected to present opportunities for GPE to purchase assets at attractive pricing. With the return of the
property cycle, the Board remains focused on the acquisition pipeline and ensuring GPE is well positioned to take
advantage of accretive acquisitions.
Decreased
During the year, our assessment of the ‘Failure to profitably deliver the development and/or refurbishment programme’
risk has reduced overall with the progress of our development pipeline (planning now secured for our three major HQ
development schemes), construction costs stabilising, expected interest rate cuts and re-based residual land values
supporting the profitability of developments. The business is live to the increasingly challenging planning environment
which is a key consideration in acquisition decisions and related appraisals.
Our seven on-site schemes, three HQ developments and four Flex refurbishments will deliver 678,000 sq ft of well designed,
tech-enabled and sustainable space into a market where prospective supply is increasingly limited. Moreover, we
have around £120 million of anticipated development surplus to come from these schemes.
To successfully deliver our developments, we work closely with both local authorities and communities to secure
planning consents to create great new sustainable spaces, helping London to thrive. We aim to engage with local
authorities in an open, transparent and non-adversarial manner. Furthermore, in line with our Social Impact Strategy,
as a matter of course, we liaise with community stakeholders to understand their needs and, where possible, we will
adjust our proposals to take account of comments received. We use planning performance agreements with the
local planning authority to ensure that our planning applications are determined in a timely manner.
With planning permissions in place for Minerva House, SE1, French Railways House & 50 Jermyn Street, SW1
and 2 Aldermanbury Square, EC2, we are now progressing on-site for these schemes.
The planning environment remains challenging, especially for new build development schemes, where there is an
increasing preference for ‘retrofit first’. Sustainability is becoming ever more important in the planning process with
key local authorities declaring climate emergencies. As such, we will look to work with them to support their principles
of ‘good growth’ and continue to evolve our strategies for reducing the carbon footprint of our development activities,
including through the use of the circular economy.
At New City Court, SE1, following an appeal for non-determination, in September 2023, we received confirmation that the
Planning Inspector’s report recommended the planning applications were refused and the Secretary of State agreed with
its conclusions. As a result of the planning decision, we are exploring the opportunity to reuse and extend the existing
building, combining Fully Managed and Ready to Fit spaces, to create a renewed building with exemplary sustainability
credentials, amenity provision, flexible spaces and far-reaching views from large, landscaped roof terraces.
Strategic Report – Annual review
83
Annual Report 2024 Great Portland Estates plc
Our approach to risk continued
How we manage principal risks and uncertainties continued
Principal risk
Strategic priorities
How we monitor and manage risk
People
Failure to attract, incentivise
and retain high quality, suitably
diverse and experienced individuals
negatively impacts our ability
to deliver our strategic objectives
and has a detrimental impact on
our values and inclusive culture.
Additionally, failure to design and
implement the right organisational
structure (structure, skills, resourcing
levels) will impede our ability to
achieve our strategic objectives.
3
Deliver on our
Flex ambition
4
Embed our
Customer
First approach
5
Deliver and lease
the committed
schemes
6
Prepare
the pipeline
– Regular review is undertaken of the Group’s resourcing requirements,
performance management, talent review and succession planning.
– The Group has a competitive and attractive employee value proposition
that is strongly linked to performance and values and a formal six‑monthly
appraisal system to provide regular assessment of individual performance.
– Regular benchmarking of remuneration and non-financial packages to
ensure they remain competitive in the market, supported by shareholder
adoption of a new remuneration policy in 2023 which is cascaded through
the business. Cost of living actions taken where appropriate.
– Personal development planning and ongoing training support for employees,
together with focused initiatives to nurture potential successors, including
talent development, mentoring and coaching programmes.
– Clear articulation of GPE values and behaviours which are embedded in key
people practices. We place strong emphasis on creating an inclusive culture,
supported by the work of our Inclusion Committee and four employee-led
impact groups.
– Board, Nomination and Executive Committee oversight of our People Plan
and diversity and inclusion strategy.
– Hybrid Working Policy to give employees appropriate flexibility to perform
their roles.
– Focus on people engagement with regular two-way communication
and responsive employee-focused activities.
Health and safety
A health and safety incident
(including by our contractors) results
in loss of life, significant injury or
widespread infection, and financial
and/or reputational damage to GPE.
Furthermore, significant changes
in health and safety and fire safety
regulations (including pursuant to the
Building Safety Act 2022) and practice
driven by government intervention
increase compliance and development
costs and/or risks of non-compliance.
1
Progress
sustainability
and innovation
agenda
4
Embed our
Customer
First approach
5
Deliver and lease
the committed
schemes
6
Prepare
the pipeline
– Quarterly Health and Safety Committee meetings are held, with regular
reporting on health and safety to the Executive Committee and Board,
including on progress against our Health and Safety Strategy and KPIs.
– Regular health and safety site checks are undertaken by internal teams
and third parties, along with regular senior leadership building tours.
– Pre-qualification and competency checks are undertaken for contractors
and consultants with contractor management processes in place.
– Formal reporting on near misses/significant incidents and accidents.
– Proactive health and safety KPIs to monitor and track performance
and drive behaviours.
– Annual external cycle of health and safety, asbestos, fire safety and water
safety risk assessments and surveys.
– Online health and safety risk management system in place for the business.
– Fire safety management procedures in place.
– Activities are undertaken to monitor and raise employee awareness and
understanding of health and safety matters, including through employee
engagement surveys.
– Comprehensive health and wellbeing programme in place for employees
with mental health first aiders and an employee assistance programme.
Cyber security and infrastructure failure
A cyber attack or infrastructure
failure leads to business or network
disruption within our portfolio or loss
of information or personal and/or
customer data. There is the potential
for greater impact on Fully Managed
customers, to which we provide
increased infrastructure support, and
high-risk customers. This results in
litigation, reputational damage and/
or financial or regulatory penalties.
1
Progress
sustainability
and innovation
agenda
3
Deliver on our
Flex ambition
4
Embed our
Customer
First approach
5
Deliver and lease
the committed
schemes
– IT and cyber security updates are regularly reported to the Executive
Committee and the Board, which oversee the implementation of our
new three-year Digital, Technology & Innovation Strategy approved
by the Board in April 2024.
– Cyber security systems and controls are in place and regularly reviewed,
with external support, against best practice.
– A head office and portfolio IT risk register is maintained.
– The Group’s IT Disaster Recovery Plan is regularly reviewed and tested
and recovery of data at an off-site recovery centre is tested during the year.
– Regular testing of IT security is undertaken, including penetration testing
of key systems.
– The Group’s data is regularly backed up and replicated.
– The Group’s Cyber Third Party Management and Security Policy and
processes are designed to identify and control cyber-related risks
arising from our third-party relationships.
– Employee awareness training on cyber risk is undertaken regularly.
– Cyber risk insurance is in place.
– Each building has a bespoke Emergency Action Plan, maintaining
appropriate systems to mitigate any infrastructure failure.
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Great Portland Estates plc Annual Report 2024
Net risk movement
over the last 12 months
Commentary
No change
The motivation of our people and maintaining our strong inclusive culture remains fundamental to the delivery of our
strategic priorities. The strength of our values and appeal of our culture was highlighted with our most recent employee
survey showing 88% of our people ‘are proud to work at GPE’. While our overall employee engagement scores were
slightly down from the prior year, participation levels were high with 98% of the GPE team completing the survey.
To enhance our Customer First approach, as we continue to innovate, digitise our activities and grow our Flex workspace
offer, we made a number of organisational design changes to support the delivery of our strategic priorities.
We continue to develop our talent and made several senior hires and internal promotions in our management team
during the year.
We continue to progress our diversity and inclusion strategy, which forms an integral part of our People Strategy.
During the year, the Board and Nomination Committee have continued to oversee the implementation of key initiatives
and the setting of clear representation targets across the Group. See pages 68, 112 and 113 for further details.
The physical and mental wellbeing of our people remains a key priority. We seek to be a caring and supportive employer
with a comprehensive Wellbeing Programme to support physical and mental health with a focus on de-stigmatising
the reality of mental health challenges. We have trained mental health first aiders and have introduced innovative
tools to support the mental health of our employees and family members.
We have continued our Board Engagement Programme to enable the Board to listen and respond to feedback
from employees and to discuss important matters impacting the business. During the year, we continued the work
of our four Employee Impact Groups to strengthen our engagement and feedback from under-represented groups,
overseen by our Inclusion Committee.
We continue to focus on growing the breadth, depth and diversity of our talent, providing focused development
support where needed in an inclusive environment.
No change
We continue to focus on ensuring that we have a best-in-class and proactive health and safety culture. With the
introduction of the Fire Safety Act and Building Safety Act and subsequent guidance, we are proactively strengthening
our practices and procedures in response to requirements. We continue to monitor evolving regulation and assess
its potential impact on our portfolio.
The Group had two reportable accidents during the year, each of which involved contractors. Where accidents do
occur, we work with our supply chain on accident investigation to understand lessons learned and opportunities for
improvement, to consider how the work could have been set up differently and to understand how, as a client, we can
better support our suppliers.
We continue to undertake activities to raise employee awareness and understanding of health and safety requirements
and monitor health and safety across the portfolio through a set of proactive key performance indicators.
No change
Cyber security risk has remained elevated due to the rise in attempted cyber crime amidst geopolitical tensions, combined
with greater reliance on technology and increased vulnerabilities created by remote and hybrid working. We have
continued to invest time and resource into our cyber security measures, both in our head office and across our portfolio.
We continue to strengthen the design and operation of our IT controls, including our IT disaster recovery procedures
in response to recommendations arising from a recent internal audit review.
The Board approved a new Digital, Technology and Innovation Strategy in April 2024, which was presented by GPE’s new
Director of Digital & Technology. The new strategy will apply for three years and includes goals and objectives to manage
risk, become a more digitally enabled business and deliver an improved digital customer experience.
We regularly consider the potential risks arising from technological advances, such as artificial intelligence, as well as
the opportunities this may present for our business and our customers.
Strategic Report – Annual review
85
Annual Report 2024 Great Portland Estates plc
Our approach to risk continued
How we manage principal risks and uncertainties continued
Principal risk
Strategic priorities
How we monitor and manage risk
Failure to profitably deliver the Flex Strategy
The failure to appropriately structure
our activities, achieve appropriate
pricing, maximise operational
efficiencies, deliver target growth or
adequately control costs impacts the
delivery of our Flex office strategy and
our ability to generate appropriate
risk-adjusted returns. Further, as
we scale up our Flex office delivery
and increase our focus on service
provision, the failure by GPE and/
or its service partners to deliver high
quality service impacts customer
satisfaction, demand and retention
and asset values.
1
Progress
sustainability
and innovation
agenda
2
Enhance
portfolio
through sales
and acquisitions
3
Deliver on our
Flex ambition
4
Embed our
Customer
First approach
5
Deliver and lease
the committed
schemes
6
Prepare
the pipeline
– Board and management oversight of the development and implementation
of the Flex strategy and business plan with regular review of Flex KPIs to
monitor performance.
– Board annual strategy review with regular market updates.
– Regular Flex updates and formal quarterly updates to the Executive
Committee with reporting at scheduled Board meetings.
– Dedicated Flex leadership and team in place under a new organisational
structure with senior design and delivery, customer relationship and retention
and operational capabilities. Regular review of skills and capabilities to
ensure appropriate resourcing is in place for the effective delivery of service
and experience.
– Customer First programme and strategy in place, led by our dedicated
Customer Experience team, to drive customer engagement and insight
and to ensure our customers’ occupational needs are met.
– Quarterly review of individual assets plans and the market generally.
– Close management oversight of costs and services, including design
and delivery.
– Flex Design Guidelines & Principles in place to provide consistency
and increase efficiencies across the portfolio.
– Board and management oversight of our Digital, Technology and
Innovation Strategy and related initiatives to support customer needs.
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Great Portland Estates plc Annual Report 2024
Net risk movement
over the last 12 months
Commentary
No change
To profitably deliver our Flex Strategy and scale up our Flex operations, we have improved our ability to deliver this
operationally intensive side of our business, control the associated cost base and generate appropriate risk-adjusted
returns. We have also recruited additional expertise to focus on improving management information, budgeting,
customer experience and delivery.
In order to expand our Flex office offers, and meet our ambitious targets for growth, we are on-site at four refurbishments
to provide new dedicated Fully Managed spaces, as well as converting a significant number of individual floors
across our portfolio. During the year, we acquired £122.9 million of new opportunities, including 141 Wardour Street,
W1 and Bramah House, SE1 for our Fully Managed offerings. More recently, we exchanged contracts to acquire the
leasehold interest at The Courtyard, WC1 which will form a new Flex cluster with our other Flex building on Alfred Place.
During the year, including our Flex Partnerships, we increased our committed Flex offerings across the portfolio,
and they now total 503,000 sq ft (or approximately 23.5 % of our office portfolio). In total, we signed £13.7 million
of new leases in our Flex space, which included five Fitted and 24 Fully Managed leases at a combined 12.3% ahead
of March 2023 ERV.
We continue to evolve our operating model and closely monitor costs and prospective risk-adjusted returns
as we refine our offer. A Flex management pack with operational KPIs has been further developed to monitor
performance and maximise returns.
To date, we remain encouraged by the leasing performance and feedback we have had for our products,
which was reflected in this year’s independent customer satisfaction survey, where our Net Promoter Score
remained high, particularly for our Flex offers. The ongoing development of our Customer First programme is
designed to ensure continuous feedback and provide valuable insight to help us deliver the type and quality
of services our customers demand.
Strategic Report – Annual review
87
Annual Report 2024 Great Portland Estates plc
Our approach to risk continued
Viability statement
Assessment of the Group’s prospects
In accordance with Provision 31 of the 2018 UK Corporate
Governance Code, the Board has assessed the prospects
of the Group over a longer period than the 12 months required
by the ‘Going Concern’ provision. The work conducted for
this longer-term assessment supports the Board’s statements
on both viability, as set out below, and going concern, as set
out on page 152.
The Group’s future prospects are assessed regularly and at an
annual strategy review in late March. This review is led by the
Chief Executive drawing on expertise across the Group. This year
it included an assessment of the macro-economic environment,
forecasts of key property market metrics (including yields and
rental value movements), annual valuation movements for
each of our properties, the financial metrics associated with
our Flex offerings, the costs associated with meeting emerging
sustainability regulations and a selection of development
scenarios. It also included a number of market assumptions,
including base, upside and downside scenarios, to reflect different
potential economic outcomes, including further disruption
from political and economic uncertainty, and a number of
business activity responses, including development activity,
sales and acquisitions.
The key outputs from this process are full financial statements
for a five-year forecast period, with a primary focus on the
first three years. The forecasts are summarised in a dashboard,
which analyses profits, cash flows, funding requirements, key
financial ratios, compliance with the REIT rules and headroom
in respect of the financial covenants contained in the Group’s
various loan arrangements. The strategy review was considered
by the Board in March 2024, with updated forecasts, including
a Going Concern market scenario to reflect the impact of
an event similar to the 2008/09 financial crisis in severity,
presented to the Board in May.
The forecasts contain a number of assumptions, including:
– estimated year on year movements in rental values and
yields for each of our properties under a number of scenarios;
– the continued conversion of some of our office space
to our Flex offerings;
– the refinancing of the Group’s existing debt facilities as they
fall due, including its £175 million private placement notes
maturing in May 2024 and its revolving credit facility maturing
in January 2027, as disclosed in note 16;
– a number of sales and acquisition scenarios with appropriate
new debt facilities to support growth;
– the completion of the Group’s committed development
programme in line with our most recent estimated
completion dates and the commencement of certain
pipeline projects; and
– forecast interest rates.
Assessment of risks
The Group’s principal risks are subject to regular review by the
Executive Committee, the Audit Committee and the Board.
The review conducted for the preparation of the Annual Report
and the Viability Statement demonstrated limited change in
our principal risks over the year.
The risks with the greatest potential impact on the Group’s
viability were considered as follows (see pages 74 to 87 above):
– London attractiveness: we rely on London’s magnetism
and relative appeal to other financial centres to continue
to attract global capital, businesses and talent from around
the world to support demand for our properties;
– Adverse macro-economic environment: a challenging
economic backdrop could instigate financial stress in our
key markets materially reducing property values, and the
viability of Group’s developments, and impairing the Group’s
income risking a breach of our banking covenants; and
– Climate change and decarbonisation: a changing climate
could impact the resilience of our buildings, impact our
ability to deliver new developments and reduce the demand
for the buildings we own.
Assessment of viability
A three-year viability period is considered an optimum balance
between our need to plan for the long term and the shorter-term
nature of our active business model, which often includes high
levels of recycling of our property portfolio, an average lease
length of around three years and a near-term development
programme which will be commenced over the same period.
The assessment of viability included stress testing the resilience
of the Group, and its business model, to the potential impact of
the risks set out above. Specifically, given the ongoing macro-
economic uncertainty, high inflationary environment and rising
interest rates, our assessment of viability was based on the
Group’s performance under a Going Concern market scenario,
with further sensitivity analysis to understand the resilience
of the Group to a significant economic shock.
The Going Concern market scenario reduced rental values across
both offices and retail by 10% and assumed an outward yield shift
of 50 basis points. When combined, over the three-year period this
scenario reduced property values by around 15%, with a 32% peak
to trough from 31 March 2022. The assessment demonstrated that
given the Group’s low levels of debt and high liquidity, it would be
able to withstand the impact of this scenario over the period of the
financial forecast and continue to operate with headroom above
the financial covenants contained in its various loan arrangements.
Moreover, this was before any mitigating actions such as property
sales or pausing of the capital expenditure associated with the
conversion of office space to the Group’s Flex offerings.
In addition, reverse stress tests were performed, to understand
how extensive any valuation and income fall would be required to
extinguish the Group’s liquidity and/or breach the Group’s gearing,
interest cover ratio or inner borrowing covenants. In the three-year
period, before any mitigating actions, rental income would need to
fall by an additional 14% and property values would need to fall by
a further 17%, before the Group breached its banking covenants.
The assessment also included a review of the potential impact of
climate change on the Group. Whilst it would be unlikely to affect
the viability of the Group within the three-year review period,
we ran a scenario to assess the impact of significant increases
in the cost of development to meet sustainability requirements
(an additional 5% on our committed development capex).
This did not impact our viability assessment.
Viability statement
Based on the Board’s assessments, the Directors confirm that
they have a reasonable expectation that the Group will be able
to continue in operation and meet its liabilities as they fall due
over the three-year period ending 31 March 2027.
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Great Portland Estates plc Annual Report 2024
We are decarbonising
our business to become
net zero by 2040
Our updated Roadmap to Net Zero v2.0 sets out, in detail, how we will tackle the
challenge of decarbonising our business and value chain, collaborating with our
stakeholders to reduce our Scope 1, 2 and 3 emissions by 90% by 2040 before
reaching net zero.
As a business we recognise that we have more than just a moral obligation to
decarbonise our business with our customers increasingly holding us to account
on the sustainability performance of the spaces that they occupy.
In this section:
90
Overview
91
Introduction from the Chair
94
The Board
96
Leadership and purpose
100
Engaging with our investors
102
Engaging with our employees
104
Board consideration of stakeholder
interests and s.172(1) matters
108
Division of responsibilities
110
Composition, succession and evaluation
116
Audit, risks and internal controls
124
Directors’ remuneration report
144
Report of the Directors
146
Directors’ responsibilities statement
Governance
Governance
89
Annual Report 2024 Great Portland Estates plc
Overview
Statement by the Directors on compliance with the provisions of the UK Corporate Governance Code
The UK Corporate Governance Code 2018 (the Code) applied to GPE’s financial year ended 31 March 2024. The Board
considers that it has complied in full with the provisions of the Code during the year. The Code is publicly available
at www.frc.org.uk. A summary of the system of governance adopted by the Company and how we have applied the
principles of the Code is set out on pages 91 to 145. The Company is aware of the revised UK Corporate Governance Code
published in January 2024 (Revised Code), which will begin applying to GPE from 1 April 2025. The Directors are already
considering the changes introduced in the Revised Code and will report on progress at the appropriate time.
Leadership
and purpose
Provides an overview of
the activities undertaken
by the Board in the year,
how the Board has
considered its s.172
responsibilities and its
governance framework.
– A review of the year from the Chair
– The Board’s attendance and activities during the year
– Setting the Company’s standards
– Purpose, values and culture
– Stakeholder engagement and how the Board has
considered its s.172 and stakeholder responsibilities
– Our conflicts of interest procedures
– Board induction and development
See more about our approach to leadership
and purpose on pages 91 to 107
Division of
responsibilities
Explains the roles of the
Board and its Directors.
– The role and interaction of the Board
and its Committees during the year
– The roles of the individual Directors
See more about our approach to division
of responsibilities on pages 108 and 109
Composition,
succession
and evaluation
Sets out the key processes
which ensure that the
Board and its Committees
can operate effectively.
– Composition and diversity
– Nomination Committee report
– This year’s Board evaluation
See more about our approach to effectiveness
on pages 110 to 115
Audit, risks and
internal controls
Explains the role of
the Board and the Audit
Committee in ensuring
the integrity of the
financial statements and
maintaining effective
systems of internal controls.
– Internal controls and ongoing risk management
– Fair, balanced and understandable
– Audit Committee report
See more about our approach to accountability
on pages 116 to 123
Remuneration
Describes the Company’s
remuneration arrangements
in respect of its Directors
and how these have been
implemented in 2023/24.
– Statement by the Remuneration Committee Chair
– Annual report on remuneration
See more about our approach to remuneration
on pages 124 to 143
90
Great Portland Estates plc Annual Report 2024
Introduction from the Chair
Dear fellow shareholder
I am delighted to present this year’s Corporate Governance
report for the financial year ended 31 March 2024.
The Board recognises that how the Group does business is as
important as what it does. A strong governance framework
with robust supporting processes across the Group, with high
standards set from the top, is a key factor in our ability to
deliver sustainable business performance, generate value
for our shareholders and contribute to wider society.
A key part of the Board’s role is to provide entrepreneurial
leadership, with appropriate oversight, challenge and support
to management. At GPE, the Board’s support, advice and
interaction extend beyond the boardroom, supporting
our efforts to promote and monitor culture and ensure its
alignment with our purpose, values and strategy.
Board focus and oversight
Key areas of the Board’s focus during the year have included
our response to macro conditions and the volatile global and
political landscape, evolving and executing our strategy,
driving our Flex ambitions alongside the development
pipeline, developing our organisational structure to deliver
our ambitions plans, further embedding our Customer First
approach, wider stakeholder engagement and progressing
our sustainability and diversity and inclusion agendas.
Further details can be found in ‘What we did in 2023/24’
on pages 106 to 107.
UK Corporate Governance Code
and s.172 reporting
This report demonstrates how we have applied the principles
and complied with the provisions of the UK Corporate
Governance Code 2018 (the Code) during the year and our
approach to governance in practice. Our Code compliance
statement can be found on page 90. Details of how the
Board has discharged its duty under s.172 of the Companies
Act 2006 can be found on pages 72, 104 and 106 and 107.
The Board and its Committees have spent time considering
corporate governance reforms and their implications for
the Company. This has included reviewing the Revised Code,
the majority of the provisions of which will apply to the
Company from the financial year commencing 1 April 2025.
Board composition
Succession planning is an important part of our governance
processes. As planned, Alison Rose stepped down from the
Board from the conclusion of the 2023 AGM to focus on her
other commitments. Having already identified a need to
strengthen the Board’s City, financial markets and transaction
experience, we were pleased to welcome Karen Green to
the Board from 1 December 2023.
With both Nick Hampton’s and my own nine-year tenure
due to be completed in October 2025 and December 2025
respectively, succession planning for the Senior Independent
Director and Chair roles is a continuing area of focus for the
Board and Nomination Committee.
Further details regarding the Board changes in the year, and
our Board appointment and succession planning processes,
can be found in the Nomination Committee report on page 112.
Diversity and inclusion
The Board continues to focus on strengthening diversity
and inclusion at GPE, both in relation to the Board and
more broadly throughout the organisation. A diverse Board
and workforce, which is representative of London and
our customers, is a strategic imperative as we enhance our
customer approach and develop our operations to meet the
evolving needs of a diverse customer base. We believe that
a more diverse and inclusive culture will help GPE to become
a more profitable, successful and innovative organisation.
We have seen good progress in a number of areas under our
People Plan, supported by the incorporation of diversity and
inclusion metrics within the annual bonus objectives of our
Executive Committee members and other senior executives.
These include targets to drive progress against our aspirational
diversity targets for the organisation which were introduced
last year. These targets have now been supplemented by
a new target introduced in the year in line with the Parker
Review. By the end of 2027, we are aiming for at least 15% of
the senior management population (comprising the Executive
Committee and their direct reports) to be represented by
individuals who self-identify as being from an ethnic minority.
However, there is more work to do, and we continue to
monitor performance against our targets, and the impact and
development of wider initiatives to drive meaningful progress
to foster a diverse and inclusive culture. See ‘Our people and
culture’ on pages 63 to 68 and our Nomination Committee
report on pages 112 and 113 for further details, including for
our disclosure against Listing Rule requirements.
Our Board Diversity Policy setting out our diversity targets
at Board level can be found at www.gpe.co.uk/investors/
governance, reflecting the latest recommendations from
the FTSE Women Leaders Review and the Parker Review.
Diversity continues to be a key consideration in Board
recruitment and succession planning.
Board effectiveness review
This year, we undertook an internal Board evaluation which
was led by Nick Hampton, our Senior Independent Director.
Details of this process, the findings of the review and our
progress against the actions arising from the 2022/23
Board evaluation can be found on pages 114 and 115.
“A strong governance framework with
robust supporting processes across the
Group, with high standards set from
the top, is a key factor in our ability to
deliver sustainable business performance,
generate value for our shareholders and
contribute to wider society.”
Richard Mully Chair
Governance
91
Annual Report 2024 Great Portland Estates plc
Purpose, strategy and consideration of the likely
consequences of decisions for the long term
In the context of uncertain markets and evolving customer
needs, the Board has spent significant time this year
considering the development and execution of our strategy,
in particular our Flex plans and Customer First approach,
to ensure we maximise opportunities to generate long-term
value for our stakeholders in line with our purpose – to unlock
potential, creating sustainable space for London to thrive.
As part of these discussions, we challenge our purpose and
strategic ‘givens’ and reflect on our customers’ changing
needs, the optimum size for our business, whether our risk
profile is appropriate and on our investment and disposal
strategies in the context of the property cycle. The Group’s
business model and strategy are outlined on pages 12 to 15.
We remain confident that London’s commercial property
market has enduring appeal and we have been pleased
to see strong customer demand across our prime office
and retail portfolio, signing £22.5 million of leases in the
year. This included completing the leasing at The Hickman,
E1, signing 29 Flex leases and substantial progress across
our retail portfolio, with significant lettings at Mount Royal,
508/540 Oxford Street, W1, Walmar House, 288/300 Regent
Street, W1, and Kingsland House, 124 Regent Street, W1.
We continue to evolve with the needs of our customers
to create market-leading, high quality and sustainable
workspaces in London. As the market continues to bifurcate,
with demand focusing on the best spaces which remain
in limited supply, our activities remain focused on our two
complementary, overlapping activities of HQ repositioning
and the delivery of flexible office spaces, providing quality,
choice and flexibility for our customers.
The Board has progressed our development programme
this year, including commitments to the redevelopments of
French Railways House & 50 Jermyn Street, SW1 and of Minerva
House, SE1. At the same time, we have continued to grow our
committed Flex space to more than 500,000 sq ft, and we
are seeking to grow this to over one million sq ft through a
combination of organic growth and acquisitions. To this end,
since approving the acquisition of 141 Wardour Street, W1 in
May 2023, the Board was pleased to approve the acquisitions of
the Soho Square Estate, W1 in August 2023 and The Courtyard,
WC1 in March 2024, the latter being part of a swap deal for
our asset at 95/96 New Bond Street following progression
of our business plan for that asset. The Board also approved
Flex refurbishment schemes for Egyptian & Dudley House,
Alfred Place and 141 Wardour Street.
With the return of the property cycle, the Board remains focused
on the acquisition pipeline and ensuring GPE is well positioned to
take advantage of market conditions and accretive acquisition
opportunities. We have identified a compelling set of acquisition
and development opportunities, and the rights issue to be
announced alongside our year end results will provide us
with further capacity for new investment to deliver returns
for our shareholders.
Our customers are at the heart of everything we do, and
the Board has therefore devoted time to overseeing the
continued implementation of our Customer First approach.
Reflecting how our customer-centric approach is becoming
entrenched in our culture, we were pleased to adopt a new
GPE Value in the year which was selected by our colleagues –
‘We value every customer’.
Sustainability is integral to our offer and sits at the core of
our purpose. The Board sees sustainability as a differentiator
and an opportunity for GPE, including the acquisition of
perceived stranded assets where GPE’s skills and credentials
could potentially allow us to address sustainability demands
and requirements that existing owners cannot.
It is essential that GPE has the right organisational structure and
people capabilities in place to deliver our ambitious strategic
plans. With this objective in mind, the Board and Nomination
Committee endorsed organisational design changes along
with several senior management hires and promotions in the
year, as explained on page 112.
The Board recognises the importance of innovation and
technology in enhancing our operations and our customer
offer and discusses the related risks and opportunities, including
those posed by artificial intelligence and other developments.
The Board was pleased to approve a new Digital, Technology &
Innovation Strategy in April 2024 which was presented by GPE’s
Director of Digital & Technology, who was recruited into this
newly created role during the year. The new strategy will apply
for the next three years and includes goals and objectives for
GPE to become a more digitally enabled business and deliver
an improved digital customer experience.
Stakeholder engagement and support
Building and nurturing strong working relationships with our
stakeholders is critical to our success and the development
of our strategy and is intrinsic in our day-to-day activities.
As well as direct engagement, a key part of the Board’s role is,
therefore, the oversight of work undertaken by the GPE team
to maintain and enhance these relationships.
The past year has continued to be impacted by the volatile
economic and political landscape. The wellbeing of our
employees has remained paramount and we have continued
to engage extensively with our colleagues to understand
what matters most to them. The work of our Employee Impact
Groups has also continued to strengthen our engagement
with our colleagues from under-represented groups. We were
pleased to see positive employee engagement scores this year,
as set out on page 65, and the Board continues to consider
colleague feedback and to oversee initiatives designed to
further strengthen our inclusive culture.
Our Customer First programme continues to be a real
differentiator, delivering high quality, personal customer
experiences every day, and we are delighted that this was
reflected in our Net Promoter Score of +30.2%. We continue
to focus on customer and supplier engagement as we
further embed our Customer First approach and progress
our sustainability ambitions.
Further details of how we engage with our stakeholders
are set out on pages 50, 63 to 72 and 99 to 104.
Sustainability and the impact of the
Company’s operations on the community
and the environment
We see sustainability and responding to climate change as
an economic and strategic imperative as well as a moral
obligation. Sustainability and our wider ESG considerations
are therefore integrated across all our business activities.
Introduction from the Chair continued
92
Great Portland Estates plc Annual Report 2024
During the year, the Board has received regular reports and
updates from our Sustainability and Social Impact Director
and has held detailed discussions regarding our sustainability
objectives, strategy, risks and opportunities. The Board has
continued to monitor the progress against our Roadmap to Net
Zero, the impact of our Internal Carbon Price (now increased
to £150 per tonne) and the deployment of monies from our
Decarbonisation Fund to finance the reduction of emissions
from our buildings. These and other initiatives continue to
drive meaningful behavioural change across the business.
However, we recognise that sustainability regulations
and expectations are fast evolving. In May 2024, the Board
therefore approved our updated Roadmap to Net Zero v.2.0
to align with the Science Based Targets initiative Corporate
Net-Zero Standard. The updated Roadmap sets out our new
near-term and longer-term targets to reduce our Scope 1, 2
and 3 carbon emissions by 90% by 2040 in order to reach net
zero by 2040. Working collaboratively with our stakeholders
is key to achieving our sustainability ambitions and we
have therefore introduced new customer and supply chain
engagement targets as part of our Roadmap. Further details
can be found on page 39.
ESG metrics continue to feature as an important element
of our annual bonus targets, and we were pleased to see
strong performance against these targets during the year,
as further explained in the Directors’ remuneration report
on page 130.
We have continued to oversee the delivery of our Social
Impact Strategy, which is designed to create a lasting
positive social impact in our communities, with a target
of creating £10 million of social value by 2030. We are
delighted that, for 2023/24, GPE generated £1.5 million
in social value through our community programmes and
direct business activities. See pages 50 and 51 for further
details regarding the social value we created in the year.
As we seek to build a sustainable legacy for London, we also
extended our charity partnerships with XLP, a charity focused
on creating positive futures for young people growing up
on inner city estates in London, National Energy Action, a
charity which focuses on alleviating fuel poverty, and Young
Westminster Foundation, which supports members of local
youth clubs and organisations through grants, training,
and networking opportunities. See pages 50 and 51 for
further details.
Maintaining a reputation for high standards
of business conduct
We aspire to the highest standards of conduct and, together
with a culture of continuous improvement in standards and
performance, this helps to ensure that good governance
extends beyond the boardroom. In April 2024, the Board
approved the creation of a new Board Disclosure Committee
as part of its continuous process review with the aim of
maximising effectiveness. The new Committee will support
the Board in the identification, assessment and disclosure of
market sensitive information and oversight of key procedures.
Annually, the Board approves the Group’s Financial Crime,
Ethics, Gifts and Hospitality and Whistleblowing Policies,
each of which are also reviewed in advance by the Audit
Committee. Each of these policies is available on our
website at www.gpe.co.uk/about-us/governance
In September each year, the Board considers and approves
our Modern Slavery Statement, which explains the activities
we have undertaken during the year to demonstrate our
commitment to seeking to ensure that there is no slavery,
forced labour or human trafficking within any part of our
business or in our supply chains. A copy of our Modern
Slavery Statement is available at www.gpe.co.uk/our-
modern-slavery-statement. More on how we behave
can be found on pages 51 and 105.
We seek sustainable long-term, two-way relationships with
our supply chain, building mutual trust to deliver exceptional
results in a responsible way. Our Supplier Code of Conduct,
which is available on our website at www.gpe.co.uk/
our-relationships/our-suppliers, sets out the standards
we require of our suppliers to help ensure they operate
ethically and responsibly.
I am delighted that the efforts of our team have been
rewarded by winning a number of awards, including,
amongst others, Britain’s Most Admired Company 2023
(Property/Residential & Commercial REITs), the Best Use of
Data (Property) award at the UK PropTech Association Awards
2023, the UK Green Business Circular Economy Project of the
Year 2023 award for our steel reuse project at 2 Aldermanbury
Square, the 2023 RIBA National Award for our Hanover Square
development and the Best Overall Company IR (Small Cap)
award at the IR Society Best Practice Awards 2023. I am
also very pleased to report on our achieving gold awards
in relation to EPRA’s 2023 Best Practice Recommendations
and Sustainability Best Practices Recommendations.
Engaging with our shareholders
We believe that communication with our shareholders is key.
To this end, in addition to our comprehensive investor relations
programme led by Toby Courtauld and Nick Sanderson,
as detailed on pages 100 and 101, as Chair of GPE, I proactively
seek periodic engagement with many of our institutional
shareholders to discuss and hear their views on GPE’s business
and governance arrangements.
I, together with Nick Hampton as Senior Independent Director,
am available to meet with shareholders as appropriate.
Each of our Committee Chairs will also seek engagement
with shareholders on significant matters related to their
areas of responsibility. Most recently, Emma Woods, as Chair
of our Remuneration Committee, met with many of our
largest shareholders to discuss the changes to our Directors’
remuneration policy prior to its approval at the 2023 AGM.
The AGM also provides the Board with an opportunity
to engage with and answer questions from shareholders.
Arrangements for the 2024 AGM can be found in our
2024 AGM Notice.
On behalf of the Board, I would like to thank all our of
shareholders and other stakeholders for their continued
support as we work to evolve and execute GPE’s strategy
to deliver long-term sustainable success.
Richard Mully
Chair
22 May 2024
Governance
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Annual Report 2024 Great Portland Estates plc
Richard Mully
BSc (Hons), MBA
Chair
Committees: N
Date appointed to the Board:
December 2016
Date appointed as Chair:
February 2019
Independent: Yes, on
appointment as Chair
Relevant skills and experience:
Richard is currently Senior
Advisor to TPG Global LLC.
He has extensive property,
banking and private equity
experience. This, combined
with his Senior Independent
and Non-Executive Director
experience, enables him
to provide constructive
leadership, challenge and
support to the Board and
wider business for the benefit
of all stakeholders. Richard
was formerly Chairman
of Arlington Business Parks
Partnership LLP, Vice Chairman
and member of the Supervisory
Board of Alstria Office REIT-AG,
co-founder and Managing
Partner of Soros Real Estate
Partners LLC, a Non-Executive
Director and Chairman of the
Remuneration Committee
of Standard Life Aberdeen
plc and Senior Independent
Director at ISG, Hansteen
Holdings and St Modwen
Properties.
Current external
commitments:
Senior Advisor to TPG Global
LLC and Chairman of RX
Propellant Pvt Ltd (an Actis-
controlled private company
based in India). Also a Director
of Starr Street Limited, which
co-invests in and acts as a
corporate director of several
TPG-controlled European
private real estate companies,
and as an Advisory Board
Member of Brydell Partners,
a private UK investment firm.
Toby Courtauld
MA, MRICS
Chief Executive
Committees: E S
Joint venture directorships:
Director of the GHS Limited
Partnership general partner
Date appointed to the Board:
April 2002
Independent: No
Relevant skills and experience:
Toby joined the Group in
April 2002 as Chief Executive
and has more than three
decades of extensive
experience in real estate.
He was previously with the
property company MEPC
for 11 years, where he gained
broad experience ranging from
portfolio management through
to corporate transactions and
general management as a
member of the Group Executive
Committee. He has previously
been President and member of
the British Property Federation
Board and Policy Committee.
Toby’s significant knowledge
of the Company and the sector
enables him to provide broad
leadership of the business
internally and externally,
through the successful design
and implementation of the
Company’s strategy, values
and business plans and their
exemplary communication to
a wide range of stakeholders.
Current external
commitments:
Director of The New West
End Company, Non-Executive
Director of Liv-ex Limited,
Member of the Council of
Imperial College, London and
Chair of its Property Committee.
Nick Sanderson
BA (Hons), ACA
Chief Financial &
Operating Officer
Committees: E S S I
Joint venture directorships:
Director of the GHS Limited
Partnership and the Great
Ropemaker Partnership general
partners
Date appointed to the Board:
July 2011
Independent: No
Relevant skills and experience:
Nick joined the Group in
July 2011 as Finance Director,
was subsequently promoted
to Finance & Operations
Director and is now Chief
Financial & Operating Officer.
He was formerly Partner, Head
of Real Estate Corporate
Finance Advisory at Deloitte,
following ten years of real
estate investment banking
experience in Europe and Asia
with Nomura, Lehman Brothers
and UBS Investment Bank. Nick’s
wide-ranging property-related
financial experience combined
with strategic and corporate
finance skills enables him to
provide valuable support in
developing, implementing and
articulating the Company’s
strategy, and taking leadership
over the delivery of a wide
range of financial and
operational matters along with
our Flex, customer experience
and corporate marketing
activities.
Current external
commitments:
Member of the Reporting
and Accounting Committee
of EPRA and Trustee of the
Outward Bound Trust.
Dan Nicholson
MA (Cantab), MA, MRICS
Executive Director
Committees: E S H
Joint venture directorships:
Director of the Great
Ropemaker Partnership,
the Great Victoria Partnership
and the Great Victoria
Partnership (No. 2) general
partners
Date appointed to the Board:
September 2021
Independent: No
Relevant skills and experience:
Dan joined the Group in
September 2021 as an
Executive Director and now
has responsibility for the New
Business, Portfolio Management
and Development Management
teams. He has extensive
knowledge of the real estate
industry and, prior to joining GPE,
spent over ten years with Tishman
Speyer, for the majority of which
he ran their UK business. Dan
started his career as a surveyor
at Lambert Smith Hampton
before gaining broad property
investment, development and
asset management experience
in a number of organisations,
including at City & West End
Property Group, Quintain
Estates & Development plc
and real estate private equity
firm, Three Delta LLP. Dan’s
significant sector and business
expertise enables him to
provide valuable support in
developing and implementing
the Company’s strategy.
Current external
commitments:
Non-Executive Director of
Bioregional Homes Limited.
Chair
Executive Directors
The Board
R
N
S
S
A
E
H
Committee memberships:
Committee Chair:
A Audit Committee
E
Executive Committee
N Nomination Committee
S
Sustainability Committee
R Remuneration Committee
H Health & Safety Committee
S
Social Impact Committee
I
Inclusion Committee
94
Great Portland Estates plc Annual Report 2024
Non-Executive Directors
business experience gained in
multiple industries and diverse
functional areas, underpinned
by a strong technology focus,
and a background in leading
successful customer-facing
and digital transformation
initiatives. Before joining Trainline,
Champa held senior positions
at Amadeus IT Group between
2015 and 2020 and previously
held leadership roles at American
Express, Royal Bank of Scotland
and Cisco Systems. Champa’s
significant digital transformation,
technology, operational and
broad commercial experience
enable her to provide valuable
insight as GPE evolves its strategy,
products and Customer First
approach.
Current external commitments:
Managing Director for
the Hospitality division
of The Access Group.
Karen Green
BSc (Hons)
Non-Executive Director
Committees: A N R
Date appointed to the Board:
December 2023
Independent: Yes
Relevant skills and experience:
Karen is currently a Non-Executive
Director, Senior Independent
Director and Chair of the
Sustainability Committee at
Phoenix Group Holdings plc and a
Non-Executive Director and Chair
of the Remuneration Committee
at Admiral Group plc. She was
previously a Council Member
and Chair of the Investment
Committee at Lloyd’s of London
until November 2023. Karen was
formerly Chief Executive of Aspen
UK between 2011 and 2017, which
comprised the UK insurance
and reinsurance companies
of US-listed Aspen Insurance
Holdings, and also held a number
of other senior positions at Aspen
including Group Head of Strategy
and Corporate Development.
Prior to that, Karen held various
senior corporate finance, M&A
and private equity roles at GE
Capital and then MMC Capital
(now Stone Point Capital),
having started her career as
an investment banker at Baring
Brothers and then Schroders plc.
Karen’s considerable City,
financial markets and non-
executive experience enable her
to provide valuable commercial
insight and to contribute to the
development and execution
of the Group’s strategy.
Current external commitments:
Non-Executive Director of
Phoenix Group Holdings PLC,
Admiral Group plc, Miller
Insurance Services LLP and
Asta Managing Agency
Limited. Also a member of
the Supervisory Board of TMF
Group Holdings BV, Trustee of
Wellbeing of Women Limited
and Adviser to Cytora Limited.
Emma Woods
MA (Hons)
Non-Executive Director
Committees: A N R
Date appointed to the Board:
February 2022
Independent: Yes
Relevant skills and experience:
Emma is currently Chair of
Ancient + Brave, Non-Executive
Director and Chair of the
Remuneration Committee
of Huel Limited (a nutritional
food company) and Chair of
Tortilla Mexican Grill plc. Emma
was formerly Non-Executive
Director, Senior Independent
Director and Chair of the
Remuneration Committee of
The Gym Group plc. She was
previously Chief Executive
Officer at Wagamama and
subsequently an Advisory Board
Member of the Wagamama
Brand Board. Emma has also
held senior marketing roles at
Merlin Entertainments, Pizza
Express and Unilever. Emma’s
extensive operational, customer
service, digital and marketing
skills, combined with her non-
executive and remuneration
committee experience, allow
her to provide valuable strategic
insight and challenge, including
to further enhance delivery on
our customers’ needs, as well
serving as a strong foundation
for her effective performance as
Remuneration Committee Chair.
Current external commitments:
Chair of Tortilla Mexican Grill plc,
Non-Executive Director of
Huel Limited and Chair of
Ancient + Brave.
Vicky Jarman
BEng, ACA
Non-Executive Director
Committees: A N R
Date appointed to the Board:
February 2020
Independent: Yes
Relevant skills and experience:
Vicky is currently a Non-Executive
Director of Melrose Industries plc.
She is a chartered accountant
who qualified at KPMG before
spending over ten years with
Lazard Ltd working in the
Investment Banking team and
then as Chief Operating Officer
for the London and Middle East
operations until 2009. Vicky has
previously been a Non-Executive
Director and Chair of the Audit
Committees of Equiniti Group plc,
Hays plc and De La Rue plc, a Non-
Executive Director of Signature
Aviation plc and Entain plc and
Senior Independent Director
at Equiniti Group plc. Vicky’s
significant financial, commercial
and non-executive experience
enable her to contribute to the
strategy of the business and its
long-term sustainable success,
and provide a strong basis for
her effective performance as
Audit Committee Chair.
Current external commitments:
Non-Executive Director
of Melrose Industries plc.
Champa Magesh
MBA, MSIM
Non-Executive Director
Committees: A N R
Date appointed to the Board:
August 2022
Independent: Yes
Relevant skills and experience:
Champa is currently Managing
Director for the Hospitality
division of The Access Group, a
private equity-owned business
management software provider.
Champa was formerly a member
of the executive team at Trainline
plc and President of Trainline
Partner Solutions, where she
was responsible for Trainline’s
business travel and white
label businesses. Champa has
over 20 years’ international
Nick Hampton
MA (Hons)
Senior Independent Director
Committees: A N R
Date appointed to the Board:
October 2016 (Senior Independent
Director from 30 March 2023)
Independent: Yes
Relevant skills and experience:
Nick is currently Chief Executive
Officer (previously Chief Financial
Officer) of Tate & Lyle PLC, and
prior to this spent 20 years with
PepsiCo in a number of financial,
commercial and operational
roles. Nick’s strong financial
background, and general
management experience, as well
as his deep knowledge of GPE,
provide a strong basis for him
to offer wise counsel in his role
as Senior Independent Director.
Current external commitments:
Chief Executive Officer
of Tate & Lyle PLC.
Mark Anderson
Dip Mgmt, MBA, FRICS
Non-Executive Director
Committees: A N R
Date appointed to the Board:
September 2021
Independent: Yes
Relevant skills and experience:
Mark is currently Property and
International Managing Director
of Whitbread Plc and leads its
international businesses and
M&A activities. Mark previously
spent 16 years at J Sainsbury PLC
in a variety of senior positions,
finally managing all aspects
of its property estate. Mark’s
significant property, operational
and customer service knowledge
and expertise, gained over many
years, enable him to provide
valuable strategic insight
and challenge to Board and
Committee discussions.
Current external commitments:
Property and International
Managing Director of Whitbread
Plc and Trustee of Tourism for
All UK.
Changes to the Board during 2023/24
– Alison Rose stepped down from the Board on 6 July 2023.
– Karen Green joined the Board on 1 December 2023.
Governance
95
Annual Report 2024 Great Portland Estates plc
Audit
Committee
See Committee
report on pages
116 to 123
Nomination
Committee
See Committee
report on pages
110 to 115
Leadership and purpose
The Board’s attendance in 2023/24
Attendance at scheduled Board and Committee meetings during the year was as follows:
1. There were five scheduled Board meetings in 2023/24. The Board
meeting that would typically be held at the end of March was
held on 4 April 2024 and therefore technically falls into 2024/25.
All Directors attended that meeting. The Board also held a
strategy review session on 5 April 2024 and additional meetings
in the year to consider matters of a time-sensitive nature –
see Board activities on pages 97 and 106 and 107.
2. Non-Executive Directors (including the Chair), where not a
member of a Committee, have a standing invitation to attend
meetings of that Committee where appropriate.
3. Executive Directors are not members of the Audit, Nomination
or Remuneration Committees. However, they are invited to
attend for parts or all of certain Committee meetings
where appropriate.
4. Karen Green was appointed to the Board and also the Audit,
Nomination and Remuneration Committees with effect from
1 December 2023. The numbers in parentheses are the number
of meetings she could have attended in the year.
5. Alison Rose stepped down from the Board at the conclusion
of the 2023 AGM held on 6 July 2023. The numbers in parentheses
are the number of meetings she could have attended in the year.
Alison Rose was unable to attend the Remuneration Committee
meeting held on 18 April 2023 due to a late scheduling conflict
with a material business commitment. Alison received meeting
papers in advance and was able to provide comments to the
Committee Chair.
5
Scheduled meetings
5
Scheduled meetings
4
Scheduled meetings
5
Scheduled meetings1
Chair2
Richard Mully
–
–
Executive Directors2
Toby Courtauld
–
–
–
Nick Sanderson
–
–
–
Dan Nicholson
–
–
–
Non-Executive
Directors3
Mark Anderson
Karen Green4
Nick Hampton
Vicky Jarman
Champa Magesh
Alison Rose5
Emma Woods
Board meetings attended
Board meetings not attended
Committee meetings attended
Committee meetings not attended
Board
Remuneration
Committee
See Committee
report on pages
124 to 143
(1/1)
(1/1)
(2/2)
(1/1)
(2/2)
(1/1)
(1/1)
(1/2)
96
Great Portland Estates plc Annual Report 2024
Board activities
The Board typically meets for scheduled Board meetings six times a year in addition to an annual strategy review session.
The Board also meets as necessary to consider matters of a time-sensitive nature.
The role and interaction of the Board and its Committees during the year
The Board has a duty to promote the long-term sustainable success of the Company for its shareholders. The Board is
responsible for establishing and monitoring the Company’s purpose, values and strategy and ensuring that these and its culture
are aligned. Its role includes the oversight of human resource levels and succession planning, approval of major acquisitions,
disposals, capital expenditure and financing arrangements and of the Group’s systems of internal control, governance and
risk management. The Board provides and promotes effective and entrepreneurial leadership across the business within
the Group’s governance framework.
May
July
September November
January
April1
Purpose, strategy and implementation
Purpose and strategic review, discussion and setting of business plan
Chief Executive’s report including market conditions dashboard, operational
parameters, strategic risks and opportunities, leasing activity, sustainability,
IT & innovation and team resourcing
–
Executive Director’s and other Board reports on valuation, key portfolio
and development activities, asset strategies, the longer-term pipeline,
new business opportunities and health and safety updates
–
Chief Financial & Operating Officer’s report including forecasts, finance
initiatives, debt and equity markets updates, social impact updates and
operational matters including Flex, customer experience, marketing and HR
–
Shareholder analysis and/or investor relations updates
–
Board property tour
–
–
–
–
–
Risks
Formal review of risk management and internal controls
–
–
–
–
Ongoing monitoring of risks
Governance
Review of half-year or annual results, going concern,
viability statement, dividend policy and analyst presentation
–
–
–
–
Stakeholder feedback, including shareholders and analysts,
employees, customers, communities, suppliers, joint venture partners
and local planning authorities
Reports from Board Committees
–
Corporate governance matters including authority levels,
Terms of Reference, UK Corporate Governance Code compliance
–
–
–
–
–
Health and safety updates
–
Sustainability updates including vision, strategy, targets and Roadmap
Corporate Responsibility including review of the Company’s
Modern Slavery Statement, Financial Crime, Ethics, Gifts and Hospitality
and Whistleblowing Policies
–
–
–
–
Evaluation
Board evaluation
–
–
–
–
–
Conflicts of interest
Board meeting matter
1. The Board meeting that would typically be held at the end of March was held shortly after the year end, on 4 April 2024.
Other ad hoc matters for consideration by the Board at both
scheduled and unscheduled Board meetings, in addition to
the above, include:
– major potential acquisitions and disposals;
– significant leasing arrangements;
– approval of major developments;
– significant financing arrangements;
– Board and senior management appointments; and
– appointments of principal advisers.
A forward agenda for the Board is maintained to ensure that
all necessary and appropriate matters are covered during the
year and to allow sufficient time for discussion and debate.
The Board receives papers and presentations from the Executive
Directors and senior managers are regularly invited to attend
to provide further insight and feedback on specific matters.
Significant matters discussed and major transactions approved
by the Board in the year are shown on pages 106 and 107.
Where Directors are unable to attend meetings, their comments,
as appropriate, are provided to the Board or Committee
Chair prior to the meeting.
At least annually, the Board reviews the nature and scale
of matters reserved for its decision.
Governance
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Annual Report 2024 Great Portland Estates plc
Our purpose, strategy, values and culture
Our purpose is to unlock potential, creating sustainable space
for London to thrive. In setting our purpose, we believe our role
relates not only to our buildings, but also to the people who live
and work there and what and how we contribute to the wider
public realm, community and environment.
The Board sets our strategy and strategic priorities to align
with our purpose, which informs our decisions regarding our
acquisition, repositioning, operation or sale of properties.
Our purpose is underpinned by our values and behaviours, which
encapsulate who we are and how we do business. Our purpose,
values and behaviours were originally articulated through a
Board-sponsored, employee-driven initiative and we again
enlisted the help of our colleagues to revisit and update our
values in the year. Engaging all our employees in this way helps
to ensure we have a unifying purpose and set of values which
are well understood and regularly discussed. At GPE, everyone
is accountable for living by our shared set of behaviours,
which form an important part of our workforce policies
and remuneration processes.
Our culture is underpinned by a clear alignment of purpose,
strategy, values and incentives. It is our culture that makes
us unique. Further details regarding our culture, values
and behaviours can be found on page 63.
Our culture inspires us to go further for our customers,
partners, each other and the business. As we innovate and
adapt in a fast-changing market to deliver our customer,
sustainability, technology and flexible space ambitions,
our strong culture has never been more important and
we must therefore work hard to preserve and enhance it.
A key objective for the Board is to monitor our culture,
and to address any instances where there is a misalignment
between our purpose, culture, values and behaviours.
Our culture is not about rules, but about actions, and the
Board and senior management seek to lead by example
in communicating and demonstrating the values and
behaviours which lie at the heart of our culture.
How the Board monitors culture
The Board is committed to ensuring that
the tone of our values is set from the top by
both the Board and senior management.
Our smaller size and the high level of
regular Board interaction with employees
facilitates the Board’s monitoring of
culture and the implementation of our
values, which we do in a number of ways:
– inclusion of culture, values and
behaviour-led questions within
employee surveys, with Board
analysis of the results;
– regular face-to-face engagement
with employees as part of our
Non-Executive Director breakfast
programme, our programme of
employee engagement sessions,
Board and Committee presentations,
property tours and other meetings
and engagements throughout the year
(see ‘Engaging with our employees’
on pages 102 and 103 for more details);
– demonstration of our values is
an integral part of our annual
performance reviews, with outcomes
being reported via the Remuneration
Committee. 360-degree feedback
reviews for senior management
prompt open feedback on culture
and values which then feeds into an
individual’s personal development plan.
Our personal bonus structure ensures
a strong link between the values and
remuneration, with a proportion of
each employee’s personal bonus based
on their values and behaviours;
– Executive Committee members
hold regular ‘Listening’ sessions
with colleagues across the business,
the feedback from which is discussed
with the Board;
– policies, pay and diversity and inclusion
activities are reviewed and developed
to ensure they appropriately capture
and reflect our values;
– reviews of compliance, whistleblowing
statistics, health and safety incidents
and internal audit reports to identify
and address any areas not meeting
expected standards of conduct
or behaviour;
– feedback from our stakeholder
engagement programmes, including
our customer survey results, helps
the Board to assess how the values
and behaviours are embedded in
our interactions with third parties
and the way we do business; and
– review of supplier payment practices.
The Board is satisfied that there remains a
high level of engagement with our values.
However, safeguarding our culture and
further embedding our values remains
a continuous area of focus. Following
this year’s feedback, a number of
actions have been taken to help further
strengthen our culture and drive the
right behaviours through our activities.
These have included:
– implementing initiatives within our
People Plan, an ongoing process, to
positively impact our culture through a
focus on diversity, equity and inclusion;
– endorsing the launch of new
development programmes for
our managers and senior leaders
to build on their leadership and
management capabilities;
– following the participation by all
members of our Executive Committee
in a nine-month inclusive leadership
programme, running a similar
programme for other members
of senior management together
with compulsory Inclusion Workshops
for all colleagues;
– the inclusion of diversity and inclusion
KPIs within the annual bonus measures
for senior executives;
– continuing the work of our
Race & Ethnicity, Women’s, Health
& Wellbeing and Parents & Carers’
employee-led impact groups,
overseen by the Inclusion Committee,
aimed at making our culture even
more inclusive through engagement,
initiatives and events;
– adopting a new Company value which
was developed with our colleagues –
‘We value every customer’ – as we
continue to build on our customer-
centric culture;
– holding a series of compulsory
all-employee workshops designed
to embed our Customer First
approach across all our operations
and business activities; and
– demonstrating support for wellbeing
and good mental health by sponsoring
activities throughout the year and
regularly communicating the resources
made available to colleagues.
Leadership and purpose continued
98
Great Portland Estates plc Annual Report 2024
Stakeholder engagement
Understanding the views of all our stakeholders and fostering of business relationships
The Board oversees and receives regular updates throughout the year on engagement activities with our key stakeholders.
The Board develops its understanding of these key stakeholder views in a number of different ways, including the following:
Investors
The Chair engages with major shareholders on matters of governance and strategy,
and Committee Chairs engage, as appropriate, on their areas of responsibility. Formal
and informal discussions are held with shareholders in the context of the Company’s AGM.
Shareholders are invited to attend the AGM in person and those unable to attend in person
are given the opportunity to ask questions of the Board via e-mail in advance of the meeting.
We have a comprehensive investor relations programme with regular reporting of feedback
to the Board. Members of the Board also attend investor events to hear views and questions
first-hand. Our Executive Directors and Corporate Finance team have regular dialogue
with our debt providers and report to the Board on their feedback.
Our people
High levels of direct engagement are maintained throughout the year through numerous
mechanisms, including our formal programmes of Non-Executive Director breakfast
meetings and ‘An Audience with…’ employee engagement sessions, our Non-Executive
Director mentoring programme, property tours, employee presentations and other meetings
and events. The Board also receives regular reports on employee feedback, including from
employee engagement surveys, ‘Listening Sessions’ hosted by Executive Committee members
with small groups of employees, and from the work of the Inclusion Committee and our
various Employee Impact Groups.
Customers
The Board meets customers where possible as part of its cycle of property tours.
Board papers include regular updates on our Customer First programme and customer
engagement activities, including feedback from customer meetings which are periodically
attended by Executive Directors, updates on discussions with property agents and feedback
from industry forums and events and marketing campaigns. The Board discusses Net Promoter
Scores and feedback from independent customer surveys. The Board also receives updates
on occupier trends and market analysis from internal and external presenters.
Joint venture partners
Frequent engagement with joint venture partners throughout the year is led by our
Executive Directors, at least one of whom serves on each joint venture board, with regular
updates and reporting of key matters to the Board.
Communities
Our Social Impact Strategy, which is designed to create a lasting positive social impact
in our communities, is set by the Board, with implementation overseen by our Social Impact
Committee which is chaired by the Chief Financial & Operating Officer. The Board receives
regular updates on activities and initiatives, including the measurement of the social
value we create.
Local planning
authorities
Our relationships with key planning authorities are critical to the delivery of new spaces
in London. Our Executive Director and Development Director regularly report to the Board
on recent engagement activities, including planning discussions, community considerations
and any development consultations involving key stakeholders and local residents.
Suppliers
Engagement is led through our Development, Leasing, Customer Experience, Health and
Safety and Sustainability teams, with information received through regular Board reports
and presentations. The Board often engages directly with contractors during development
site visits and may also receive external presentations from suppliers such as property
agents and valuers. The Audit Committee reviews GPE’s supplier payment practices
and performance twice-yearly.
Further details of our relationships and engagement with key stakeholders, how stakeholder issues have been monitored
and considered by the Board through our scheduled Board meetings, and discussion of matters between these meetings,
are explained in more detail in:
Our stakeholder relationships on pages 69 to 72
Our people and culture on pages 63 to 68
Our approach to risk on pages 74 to 87
Engaging with our investors on pages 100 and 101
Engaging with our employees on pages 102 and 103
Impact of engagement on Board decisions on page 104
What we did in 2023/24 on pages 106 and 107
Governance
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Annual Report 2024 Great Portland Estates plc
What we did in 2023/24
– Roadshow: US
(New York & Chicago)
– Conference:
Morgan Stanley
(London)
– Equity sales force
meetings x1
June
May
November
January
– Roadshows: London
– Conference: Kempen
(Netherlands)
– Equity sales force
meetings x3
– Roadshows: London &
Netherlands (virtual)
– Conferences:
JP Morgan (London),
UBS (London)
– Equity sales force
meetings x2
– Conference:
Barclays (London)
– Roadshow: Asia
(Hong Kong and
Singapore)
July
– Annual General
Meeting
– Fireside chat:
Numis (London)
– Equity sales force
meetings x1
– Conferences:
Bank of America
(New York), EPRA
(London), Goldman
Sachs (London)
September
Institutional shareholders by geography at 31 March 2024
1%1%
45%
28%
United Kingdom
United States
Europe
Asia Pacific
Rest of World
25%
Investor contact by method
90
53
15
158
meetings
Meeting
Conference
Tour
2023
2024
Engaging with our investors
The Board aims to maintain an open relationship with our investors based on a clear investment case and transparent disclosure.
As a result, we maintain a regular dialogue with shareholders, potential shareholders, debt providers and analysts through a
comprehensive investor relations programme.
See more about our largest shareholders on page 145
Sustainability indices 2023/24
Given the increased focus on sustainability, the Board
believes that it is essential to provide transparent reporting.
We therefore participated in a number of sustainability
indices during the year:
– CDP
– EPRA
– MSCI
– FTSE4Good
– ISS
– GRESB
See more about our approach to sustainability on pages 37 to 62
200+
Investors met during the year
Leadership and purpose continued
– Conference: Peel Hunt
(London)
– EPRA/Bloomberg
Real Estate Summit
(London)
April
– Investor & Analyst
Flex Session
– Property tours
February
March
– Conferences:
Citi (US), Bank of
America (London)
– Property tours
– Equity sales force
meetings x1
100
Great Portland Estates plc Annual Report 2024
Investor & Analyst Flex Session
Since 2017, we have been expanding our provision of
flexible office spaces across our portfolio. As our Flex
offers have grown, we have also increased the amount
of information we provide to investors and analysts to
help deepen market understanding of our activities.
In February 2024, we hosted an online Investor &
Analyst Flex session to highlight the opportunity that
Flex presents when leasing smaller offices in London,
including an overview of our activities, how we differ
from our competitors and the returns we expect over
the coming years. We also took the opportunity to
provide an update on progress at our exciting larger
refurbishments including 6 St Andrew Street, EC4
and 141 Wardour Street, W1. There were more than
100 attendees at the session.
Our approach
Our Investor Relations programme is executed across
a number of geographies, reflecting the international
nature of our share register, and through a variety
of routes including roadshows, meetings at industry
conferences, investor and analyst events, property
tours and presentations to analysts and investment
banks’ equity sales teams.
The Board is also committed to providing investors
with regular announcements of significant events
affecting the Group, including its business activity
and financial performance. These announcements
are available on the Group’s website at www.gpe.co.uk
along with results webcasts, analyst presentations,
property videos, press releases and interviews with
the management team.
The Executive Directors and the Director of Financial
Reporting and Investor Relations are the Company’s
principal representatives with investors, analysts,
fund managers, press and other interested parties,
and independent feedback on presentations by the
Executive Directors to shareholders and analysts is
provided to the Board on a regular basis.
The Executive Directors and Corporate Finance team
also have regular dialogue with our debt providers,
including relationship banks, private placement
investors and debenture holders and report back
to the Board as appropriate.
Activities during the year
Our engagement with our shareholders during the year
was extensive. In addition to roadshows and attendance
at conferences, we hosted an Investor and Analyst Flex
session online to provide a deeper dive on our Flex activities
and held a series of property tours to showcase a number
of our recent property acquisitions.
The Executive Directors and senior management had 158
virtual and in-person meetings with over 200 shareholders,
and potential shareholders, from a broad range of institutions
during the year. This included participating in 12 industry
conferences, which provided the management team with
the ability to meet a large number of investors on a formal
and informal basis. We also held five roadshows to meet
with investors from London, the Netherlands (virtual) and the US
and a trip to Asia to meet investors in Hong Kong and Singapore.
We actively seek feedback after every roadshow, which is
provided to the Board on a regular basis.
Examples of topics raised in the year
– Our view on the markets in which we operate;
– London economic activity and its impact on office demand,
retail footfall and occupancy;
– Higher interest rates and their impact on future returns
from the development pipeline;
– Our expectation of when the interest rate cycle will turn
and the implications for forward-look property values;
– The expansion of our Flex offers, our ambition for
growth and their respective financial returns;
– The increasingly challenging planning regime in London
and the impact on the supply of new space;
– The increasing bifurcation between the best space and
the rest, including the importance of sustainability; and
– Evolving working patterns including the impact of
working from home, technology and design.
We used these topics to shape both the content of
subsequent investor presentations and our communications
to the market to ensure that we meet their expectations.
Next steps
Following the announcement of our year-end results,
we will be embarking on our post-results IR programme
over the early summer. We will be conducting in-person
roadshows in London, the Netherlands and the US and
attending the Morgan Stanley and BNP conferences
in London.
“We had a busy year from an IR perspective.
Our priorities included showcasing a
number of our recent property acquisitions
and providing more granular information on
our Flex office activities, which culminated
in an online Flex event in February 2024.”
Stephen Burrows Director of Investor Relations
and Joint Director of Finance
6 St Andrew Street
Governance
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Annual Report 2024 Great Portland Estates plc
An audience
with Champa
Magesh
One of our ‘Audience with…’
sessions this year was held
with Champa Magesh,
hosted by Rebecca Bradley,
our Director of Customer
Experience & Relationships.
Rebecca opened the session by
exploring the evolution of Champa’s
career and her extensive international
business experience. Champa discussed
the importance of having a growth
mindset and seeking out opportunities
for development, which resonated
with colleagues.
This led to an engaging discussion
on resilience, and how GPE and its
employees can navigate change by
amplifying its passion and strengths,
embracing opportunity and focusing
on the positive outcomes for customers.
Champa also highlighted the need
to stay true to GPE’s strong culture
and values during periods of change
and transformation.
Champa answered questions and
provided her insights on customer
service, maintaining positive
relationships, the need for continuous
feedback and improvement and
how GPE can further drive progress
in this area, also learning from
other industries. This was a helpful
discussion as we strengthen our
approach to customer engagement.
Champa spoke about the future of
technology and artificial intelligence,
its potential impacts on the workplace
and how it could be an enabler of
revenue growth and efficiency for
GPE and a tool to provide further data
insight to support decision making.
Champa answered questions
regarding diversity and inclusion,
the use of diversity targets, the
role of GPE’s Employee Impact
Groups and the responsibility
of all colleagues to foster and
maintain an inclusive environment.
The discussion supported GPE’s
ongoing focus in this area.
There was an opportunity for
employees to ask questions and
exchange views with Champa
across a broad range of topics
which affected them.
The session was engaging and
interactive. It was well attended
by employees and received
positive feedback.
Engaging with our employees
Being a relatively small company of approximately 135
employees operating in one location, there is a high level of
visibility of the Board by employees and vice versa. Given this
high level of visibility, the Board has decided not to adopt any
of the three specific employee engagement methods referred
to in the 2018 UK Corporate Governance Code at this time.
Instead, we have adopted the following employee engagement
arrangements, which the Board believes have operated
effectively during the year, to provide it with regular formal
and informal employee feedback for consideration as part
of the Board’s decision-making process:
– a formal programme of breakfast meetings between the
Non-Executive Directors and members of the Executive
Committee and senior management. These meetings have
no fixed agenda and provide a useful forum to discuss what
is happening in day-to-day operations and the associated
challenges which might not be significant enough individually
to warrant formal reporting at Board meetings; and
– a Non-Executive Director, on a rotational basis, presenting to
all employees in a discursive format approximately twice yearly
on a particular theme, followed by a Q&A session. To facilitate
these sessions, we have set up an online portal for employees
to raise questions, anonymously if they wish, in advance of the
event. Employees are also invited to ask questions and to share
their views on the day. These sessions are also designed for
Board members to provide the Board’s views, as appropriate,
on matters raised through employee engagement, and
feedback from the sessions is reported to the Board. Our latest
sessions were led by Champa Magesh in November 2023 and
by Karen Green in April 2024, each of which is described below.
In addition to these arrangements, direct Board engagement
with employees during the year has included the following:
– in September, property tours of 141 Wardour Street and the
Soho Square Estate as part of the annual Board property tour
involving our New Business, Development, Project Management,
Leasing and Flex and Customer Experience teams;
Leadership and purpose continued
“The session was an excellent
opportunity to hear
Champa’s views on the
evolving digital landscape
and the transformative
impact that AI might have
in general and for GPE. She
also shared helpful insight on
her career progression and
how to become a successful
female executive.”
Kay Fraser
Deputy Company Secretary
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Great Portland Estates plc Annual Report 2024
An audience
with Karen
Green
Our latest ‘Audience with…’
session was held with
Karen Green, hosted by
Andrew White, our
Development Director.
Andrew introduced Karen, GPE’s newest
NED, and explored with Karen her career
path and motivations. Karen discussed
personal development, self-belief
and suggestions for how everyone
can develop their confidence and
raise their profile.
Karen responded to questions about
her role as a Non-Executive Director
and what attracted her to GPE,
and shared her impressions of GPE as
a leader in its industry and on matters
of sustainability. This led to a discussion
regarding the risks and opportunities
presented by sustainability challenges,
and the importance of GPE’s Social
Impact Strategy.
Karen discussed her experience
of customer service in the insurance
industry and the need to prioritise
areas that will deliver most value
for GPE’s customers.
Karen spoke about the importance
of a strong culture, and how it was
hoped that GPE’s organisational
redesign would help empower
colleagues to learn and to develop.
Employees were interested to
hear Karen’s views on employee
engagement and colleagues
considered additional feedback
mechanisms which will now be
considered for the coming year.
There was an engaging conversation
on diversity and inclusion, the need
to accelerate progress both at
GPE and across the wider industry
and the value of mentoring in
developing a diverse talent pipeline.
Additional mentoring opportunities
for diverse talent are now being
planned. Karen also shared her own
experience as a woman in business
and her work as a Trustee of the
Wellbeing of Women charity.
Karen also answered questions
covering a variety of subjects,
including hybrid working, the role
and potential impacts of artificial
intelligence for the real estate
industry and areas in which the
insurance and real estate sectors
might collaborate.
The event was well-received
with good levels of attendance.
– presentations made to the Board by the Executive
Committee team at scheduled Board meetings;
– Board presentations and Q&A sessions by Heads
of Department and other employees on key matters
including acquisitions, development appraisals, leasing,
our Flex business, customer experience, IT and cyber
security, health and safety, sustainability, financing,
leasing, investor relations, diversity and inclusion
and corporate governance;
– mentoring sessions between Non-Executive Directors
and members of senior management as part of our
Non-Executive Director Mentoring Programme;
– all-staff quarterly review meetings led by our Chief Executive
which provide an informal forum for employees to discuss
and raise questions regarding key events at GPE; and
– all employees are invited to attend a weekly update
meeting on Monday mornings, led by our Chief
Executive and other Executive Directors, to discuss key
developments and concerns.
During the year, we also adopted a number of initiatives
and activities to maintain levels of employee engagement,
wellbeing and feedback, which we continue to evolve to
further support our people.
See more on pages 63 to 68
“It was great to hear
directly from Karen at our
latest ‘Audience with…’
She offered a really fresh
perspective on why GPE
appeals to her, and her
extensive journey to date.
It was a very authentic
conversation about
her career but also the
importance of embedding
a positive culture in
the workplace.”
Yasemin Kiani
Communications Lead
Governance
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Annual Report 2024 Great Portland Estates plc
Board consideration of stakeholder interests and s.172(1) matters
Impact on decisions
Some examples of how the Board has considered stakeholder interests and s.172(1) matters in its decision making in 2023/24
are set out below and in ‘What we did in 2023/24’ on pages 106 and 107. Further details on our stakeholder engagement,
and our response, can also be found on pages 69 to 72.
French Railways House &
50 Jermyn Street, SW1 (FRH)
1
4
5
6
In September 2023, the Board approved the
redevelopment of FRH having secured an
to option sign a development agreement
and regear the headlease with freeholder,
The Crown Estate.
The Board discussed the strong business case for the
redevelopment and its wider stakeholder impacts
compared to alternative business
strategies, including a sale or
refurbishment. This included
the review of performance
metrics, procurement
and construction costs
in a volatile market,
the leasing prospects
for the scheme and the
prospective returns for
GPE and its shareholders.
The Board considered
customer and agent feedback
and market analysis, which had
highlighted strong customer demand for prime office
space in a location where there was a tightening of
supply and a limited development pipeline.
The Board had regard to the positive impact the
scheme would have on local communities and the
engagement to date with key stakeholders in designing
the scheme. The impact on the Group’s employees was
also considered, noting that the scheme would offer
employees development, project management and
innovation opportunities.
The Board considered GPE’s sustainability agenda
and stakeholder expectations and the exemplary and
market-leading sustainability credentials of the building
which would include a steel frame comprised of reused
steel from the careful deconstruction of the previous
building at 2 Aldermanbury Square, EC2. The Board also
considered GPE’s ongoing work with suppliers to reduce
carbon impacts.
Having weighed up the balance of risks and potential
returns, it was concluded that the proposals aligned
with GPE’s purpose and strategy and, in view of the
value expected to be delivered to stakeholders, that
GPE should proceed with the redevelopment of FRH.
See more on pages 23 and 24
Acquisition of 16/19 Soho Square,
29/43 Oxford Street and
7 Falconberg Mews, W1
(the Soho Square Estate)
1
2
4
6
In August 2023, the Board approved the
acquisition of the corporate vehicle holding
the freehold interests of the Soho Square Estate
for cash consideration based on a property
value of £70 million.
The Board noted how the acquisition of the mixed-use
buildings presented the opportunity to build on GPE’s HQ
development footprint in a core target Soho location,
close to the Elizabeth line, along with flagship retail
fronting Oxford Street. Office and retail market analysis
for the area was reviewed which indicated the likelihood
of strong customer demand for prime
assets in an undersupplied market.
The Board considered the
mitigation of transaction risks
and the financial impact of
the acquisition, including
the attractive pricing and
anticipated returns for
GPE and its shareholders.
While the site benefited
from an existing planning
consent for a new development
scheme, opportunities also existed
to enhance the scheme’s design and
massing to further improve prospective returns
for shareholders and respond to customer demand.
The Board noted plans to upgrade the buildings to improve
their sustainability, biodiversity and wellbeing credentials
in accordance with GPE’s net zero carbon commitments
and stakeholder expectations. Opportunities to support
local community needs were also noted.
From an employee perspective, the acquisition would
drive further momentum in the business and provide
employees with additional development opportunities.
Having regard to stakeholder interests, and the
long-term sustainable value expected to be delivered
for stakeholders, the Board approved the acquisition
of the Soho Square Estate.
See more on pages 11, 24 and 25
Leadership and purpose continued
1 Denotes strategic priorities for 2023/24 as set out on pages 14 and 15.
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Great Portland Estates plc Annual Report 2024
How we behave, human rights, supplier
stewardship and anti-corruption and
anti-bribery matters
We aspire to the highest standards of conduct based on
honesty and transparency in everything we do. Our Executive
Committee has a high level of oversight over the Group’s day-
to-day policies and procedures and carries out regular reviews
of the appointment of contractors, consultants and suppliers.
We support the principles of the UN Declaration of Human Rights
and core conventions of the International Labour Organization.
Our expectations on human rights are set out across a number
of our policies and procedures as we seek to avoid causing
or contributing to adverse human rights impacts through our
activities. In our business relationships, we look to demonstrate
a commitment to fundamental human rights through our
own behaviours and look to engage suppliers whose values
and business principles are consistent with our own. Whilst we
require all our suppliers to comply with standards and codes that
may be specific to their industry, our Supplier Code of Conduct
also sets out the additional standards that we require of our
suppliers in this regard. GPE team members regularly meet
with main contractors to share information on industry best
practice, including in relation to human rights, modern slavery,
health and safety and responsible sourcing.
In September 2023, we published our latest Modern Slavery
Act Statement, which can be found at www.gpe.co.uk/our-
modern-slavery-statement, setting out the steps we have
taken over the past year, and intend to take over the next
12 months, to ensure our suppliers and their supply chains
adopt similar standards to our own to prevent slavery and
human trafficking taking place within our supply chain.
Formal policies in place in relation to human rights,
anti-bribery and corruption, fraud and sanctions matters
include our overarching Financial Crime Policy, together with
our Ethics, Gifts and Hospitality, Whistleblowing, Use of GPE
Suppliers, Conflicts of Interest and our Inside Information and
Share Dealing Policies. All new employees receive training
on these policies as part of their induction process. A formal
compliance statement relating to these policies is required
to be signed off by employees annually, with any matters
of concern reported to the Audit Committee. There were no
significant matters to report to the Audit Committee in relation
to these policies in the year ended 31 March 2024. The Audit
Committee also reviews our Financial Crime, Ethics, Gifts and
Hospitality and Whistleblowing Policies annually. Our policies
can be found at www.gpe.co.uk/about-us/governance
Whilst we consider our industry to be relatively low risk
with regard to money laundering, we also have a formal
Anti-Money Laundering Policy in place and specific
training is provided to employees as appropriate.
Our conflict of interest procedures
The Company’s Articles of Association allow the Board to
authorise potential conflicts of interest that may arise and to
impose such limits or conditions as it thinks fit. The Company
has established a procedure whereby any actual or potential
conflicts of interest that may arise must be authorised by the
Board, maintained on a register and periodically reviewed,
with Directors required to update the Board with any
changes to the nature of any conflicts disclosed.
A Director who has a conflict of interest is not counted in
the quorum or entitled to vote when the Board considers
the matter in which the Director has an interest and
the Director may be excluded from the meeting where
appropriate. The Board considers these procedures to
be working effectively.
Our approach to Board induction
and development
Having joined the Board as a new Non-Executive Director
this year, Karen Green received a comprehensive induction
programme over a number of months which was facilitated
by the Chair and the General Counsel & Company Secretary
and tailored to Karen’s individual needs. Our induction
process is designed to develop the Director’s knowledge and
understanding of the Group, covering key areas including
GPE’s purpose, values, culture and strategy, its corporate
governance, risks and internal controls and the industry and
markets in which it operates. Our induction programme
for new Directors is delivered through:
– meetings with the Chair, wider Board, General Counsel
& Company Secretary and relevant Committee Chairs;
– a structured programme of meetings with executives
and senior managers to provide a deeper understanding
of risks and opportunities and stakeholder interests;
– meetings with advisers, including the internal and
external auditors and brokers, to provide a valuable
external perspective;
– property tours to see assets first-hand and to learn
more about GPE’s asset and development plans;
– access to a library of reference materials covering
key areas including strategy, finance and operations,
governance, risk management and internal controls; and
– training as appropriate on key policies, statutory duties
and legal and governance requirements.
To enable the Board to discharge its duties, all Directors
receive appropriate and timely information, including briefing
papers distributed in advance of Board meetings and regular
property tours conducted by the relevant GPE teams.
The Board strongly supports the ongoing development of
its Directors. The Directors may, at the Company’s expense,
take independent professional advice and are encouraged
to continually update their professional skills and knowledge
of the business and wider industry. Senior managers and
external advisers presented to the Board during the year on
a range of subjects, including: macro-economic and political
risks; industry themes and developments; the global and UK
real estate investment market; the flexible space market and
GPE’s flexible space offer; property innovation and technology;
climate change and sustainability; planning regulation;
cyber risk; and accounting and governance developments.
Directors also individually attend seminars or conferences
associated with their expertise or areas of responsibility and
are provided each quarter with a list of relevant upcoming
seminars by various firms. Director training is reviewed
by the Nomination Committee and development areas are
discussed with individual Directors as part of the annual
performance evaluation process.
Governance
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Annual Report 2024 Great Portland Estates plc
May/June
June/July
August/September
Strategy,
governance, risk
and opportunity
management
– Discussion of 2023/24 key
priorities, themes, strategic
actions and team resourcing
– Discussion of market
conditions, the macro-
economic environment,
capital allocation implications
and the strategic risks and
opportunities
– Update on real estate trends,
customer demand and rent
collection
– Discussed asset strategies
and potential sales and
acquisitions
– Received an update on
activities being undertaken in
relation to the development
pipeline, including the Minerva
House planning process and
the challenging planning
environment
– Received an update from
GPE’s corporate brokers
on the market backdrop
and GPE’s positioning
and opportunity
– Approval of the refurbishments
of (i) Egyptian & Dudley
House, Piccadilly; and (ii)
Alfred Place, each as Fully
Managed spaces
– Approval of an option
to regear the headlease
and sign a development
agreement with the
freeholder at FRH
– Update on Executive
Committee ‘Away Day’,
including discussions on
market dynamics, team
effectiveness, delivery of
a Customer First culture
and the evolution of GPE’s
Roadmap to Net Zero
– Approval of the appointment
of Karen Green as a
Non-Executive Director
– Approval of the acquisition
of the Soho Square Estate
– Strategy update and
discussion of GPE’s strategic
response to the economic
environment and return of
the property cycle
– Update on Flex activities,
including market conditions,
performance, customer
retention and team resourcing
– Approval of a new
£250 million unsecured term
loan to support the delivery
of strategic priorities and
funding of a £175 million
private placement debt
maturity
– Approval of the definitive
appraisal and commitment to
progress the redevelopment
of FRH
– Authority given to progress
the Minerva House scheme
design and prepare the
building for demolition
– Noted a health and safety
update and progress
against KPIs
Understanding
the views of
stakeholders,
the interests of
employees and
the fostering
of business
relationships
– Received an update on recent
employee ‘pulse’ engagement
survey results and feedback
from Executive Committee
‘Listening Sessions’
– Discussion of customer
experience initiatives, strong
NPS results and development
of actions plans in response to
feedback, including meetings
with detractors and process
improvements
– Approved updates to GPE’s
Sustainability Policy
– Consideration of engagement
with freeholders, including
to progress the regear of the
headlease at French Railways
House & 50 Jermyn Street
(FRH)
– Recommendation of the
payment of a final dividend
to shareholders
– Noted shareholder feedback
on the proposed new Directors’
remuneration policy and
changes made in response
– Approved proposed new
Restricted Share Plan to
support employee motivation
and retention
– Consideration of feedback
from investor meetings
following the year-end
results, including in respect
of macro challenges, market
bifurcation, earnings and
opportunities to strengthen
GPE’s Flex messaging
– Noted updates on Customer
First employee workshops and
a customer panel discussion
focused on customer
service strategies
– Noted feedback from joint
venture partners regarding
the management of assets
and JV strategies
– Received feedback regarding
GPE’s successful Community
Week and funds raised for
charity partner, XLP
– Consideration of reports
from institutional shareholder
advisory bodies and the
recommendations for
the AGM
– Discussion of the sustainability
landscape and developing
stakeholder, local authority,
regulatory and wider
expectations, including in
respect of net zero carbon
and offsetting strategies,
and the implications for
GPE’s sustainability strategy
– Noted activities to deepen
freeholder relationships with
potential to pursue wider
acquisition and partnership
opportunities
– Discussion of a review
to simplify the sesame®
workplace app and improve
user experience in response
to feedback
– Noted improvements to
customer engagement to
drive actionable insights
– Discussion of development,
planning, procurement and
construction pricing risks
and mitigating actions in
collaboration with suppliers
– Review of investor relations
activities and analyst updates
– Approval of GPE’s 2023
Modern Slavery Statement
What we did in 2023/24
Leadership and purpose continued
2023
Soho Square
Estate
Consideration of stakeholder engagement
Alfred Place
Soho Square
Estate
French
Railways House
106
Great Portland Estates plc Annual Report 2024
November
January/February
March/April
– Discussion of key
market themes, macro
conditions and the relative
performance of the London
office market
– Received an update from
GPE’s corporate brokers
regarding macro conditions
and opportunities as the
property cycle returns
– Received a review of GPE’s
technological capabilities
and discussed opportunities
to strengthen the enterprise
architecture and the
role of data analytics in
decision-making
– Review of potential
asset sales
– Discussion of a
potential acquisition
– Noted void rates and
void mitigation strategies
– Noted progress against the
GPE Customer Roadmap
– Supported the
appointment of PwC
as GPE’s third-party
sustainability data
assurance provider
– Review of key themes and
priorities to be addressed
as part of the March 2024
strategy review
– Approval of a £200 million
short term debt facility
– Approval of the definitive
appraisal for the 141 Wardour
Street refurbishment scheme
– Discussion of the London
Flex office leasing market,
customer retention and
the benefits of product
differentiation and building
clusters in micro-locations
– Discussion of the
recommendations arising
from the internal Board
evaluation
– External presentations on
the economy and the central
London office market
– Adoption of a new Digital,
IT and Innovation Strategy
– Approved a revised Health
& Safety Policy Statement
– Received an update on
customer experience
activities
– Approved the acquisition
of The Courtyard building
as part of a swap deal with
95/96 New Bond Street
– Approval of the definitive
appraisal and commitment to
progress the redevelopment
of Minerva House
– Approval of the definitive
appraisal for the
refurbishment of 200
Gray’s Inn Road
– Discussion of feedback
from joint venture partners
– Supported the adoption of a
new GPE senior management
ethnic diversity target to
increase representation
and further support
GPE’s inclusive culture
– Discussion of design
progression for near-term
schemes, including Minerva
House, to meet evolving
customer, local community
and sustainability needs
– Approval of the
interim dividend
– Discussion of Customer
Experience team resourcing
to meet GPE’s customer
ambitions and positive
feedback from new Flex
customer onboarding
surveys
– Discussion of a planned ‘Flex
teach-in’ session for investors
and analysts and feedback
indicating that Flex was well-
understood and considered
to be an important part of
the market going forward
– Discussed feedback from
an investor roadshow in Asia
suggesting improvements
in sentiment towards the
UK real estate market
– Received an update, in
response to evolving market
expectations, on plans to
update GPE’s Roadmap to
Net Zero and sustainability
targets, including to work
with customers and suppliers
to reduce their carbon
emissions
– Noted feedback from
freeholders in relation to
proposed headlease regears
and asset business plans
– Review of feedback from an
institutional investor roadshow
in November, including positive
feedback on Flex progress and
ongoing focus on development
returns, leverage, growth
and the scale of acquisition
opportunities
– Noted GPE’s attainment
of Level Three Disability
Confident Employer
accreditation
– Approved GPE’s updated
Roadmap to Net Zero
and sustainability targets
– Update on results of
the recent customer
satisfaction survey and
Net Promoter Score and
action plans to respond
to feedback on processes
to address maintenance
and building issues and
opportunities to strengthen
strategic relationships,
customer communications
and the sesame® app
– Approved the adoption
of a new Company value –
‘We value every customer’
– Discussion of the impacts
of social impact activities
and the creation of
£1.5 million of social value
in the year
The table below provides examples of our significant discussions, transactions and appointments over and above the
scheduled matters outlined on page 97, together with examples of our oversight of engagement with stakeholders
and consideration of s.172(1) matters since April 2023. You can read our s.172(1) statement on page 72.
2024
141 Wardour Street
Minerva House
141 Wardour Street
The Courtyard
Minerva House
Governance
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Annual Report 2024 Great Portland Estates plc
Division of responsibilities
Audit Committee
four scheduled meetings a year
oversees financial reporting
monitors risk management
and internal controls
scrutinises activities and performance
of the external auditor
conducts, as appropriate, the tender
process for the external audit contract
evaluates internal auditor
and audit plan
Remuneration Committee
five scheduled meetings a year
establishes Directors’ remuneration policy to
be proposed to shareholders for approval
sets executive remuneration schemes
reviews Executive Committee member
objectives and achievements
approves senior management
remuneration and incentive awards
approves variable remuneration targets
approves the Directors’ remuneration report
reviews wider workforce pay policies and
alignment of incentives with culture
Executive
Committee
meets fortnightly
implements the
Group’s strategy
oversees transactions
monitors risks and
opportunities
responsible for succession
planning, resourcing and
people development
Sustainability
Committee
meets four times a year
manages climate change
risk and resilience
reviews progress
and development of
sustainability strategy
monitors environmental
compliance
oversees allocation of
Decarbonisation Fund
development sub-committee
focuses on innovation and
opportunities of net zero carbon
development and refurbishment
portfolio sub-committee focuses
on reducing carbon emissions
in the existing portfolio
Social Impact
Committee
meets four times a year
sets direction for the Group’s
social value creation
oversees implementation
of the Group’s Social
Impact Strategy, charitable
partnerships and donations
Inclusion Committee
meets six times a year
provides oversight of Group
diversity and inclusion initiatives
oversees the work of
Employee Impact Groups
monitors feedback and identifies
areas for improvement
Health and Safety
Committee
meets four times a year
reviews the Group’s health
and safety compliance
and performance
provides oversight on
Health and Safety Strategy
identifies and reviews
opportunities for improvement
Nomination Committee
five scheduled meetings a year
recommends Board appointments
approves senior
management appointments
oversees succession planning and
development of a diverse pipeline
responsible for Board
effectiveness evaluation
typically six scheduled
meetings a year
sets strategy
provides oversight of
purpose, culture and risk
approves major transactions
provides oversight of governance
oversees climate change risk
and sustainability strategy
The role of the Board
and its Committees
during the year
Board
Board
Committees
Management
Committees
See Nomination Committee report
on pages 110 to 115
See Our people and culture
on pages 63 to 68
See Strategic Report
on pages 01 to 80
See Strategic Report
on pages 01 to 80
See Sustainability on our
website www.gpe.co.uk/
sustainability/working-safely
See Sustainability on our
website www.gpe.co.uk/
sustainability
See Directors’ remuneration report
on pages 124 to 143
See Audit Committee report
on pages 116 to 123
See Our approach to risk
on pages 74 to 87
See Board activities on pages 97 to 107
See biographies of the current Directors on pages 94 and 95
See the division of responsibilities of the Directors on pages 108 and 109
108
Great Portland Estates plc Annual Report 2024
The division of responsibilities of the Directors
The Board currently comprises the Non-Executive Chair, three Executive Directors and six independent Non-Executive
Directors and is supported by the General Counsel & Company Secretary. The Chair and the other Non-Executive Directors
meet regularly without the Executive Directors, and at least once a year the Non-Executive Directors meet without the Chair.
In addition, individual Directors meet routinely outside the formal Board meetings as part of each Director’s contribution
to the delivery of the Company’s strategy and review of operations.
The Executive Directors meet every two weeks with senior management as the Executive Committee, chaired by the
Chief Executive, to attend to the ongoing management of the Group. The Executive Committee makes decisions within
the parameters set out in the Group’s Delegated Authorities which govern the taking and escalation of significant decisions.
Significant operational and market matters are communicated to the Non-Executive Directors on a timely basis outside
of the Board meetings. All Directors have access to the advice and services of the General Counsel & Company Secretary,
who is responsible to the Chair on matters of corporate governance.
Each year the Schedule of Board Responsibilities and Terms of Reference for the roles of Chair, Chief Executive and Senior
Independent Director are revisited by the whole Board and are available on our website at www.gpe.co.uk/investors/governance
Roles and responsibilities of the Directors:
Chair
Richard Mully
Richard is responsible for leading the Board and for its effectiveness, meeting
with shareholders as appropriate, ensuring a culture of openness, transparency
and debate and helping the Chief Executive ‘to set the tone from the top’ on the
Company’s purpose, values and culture. As part of his role in leading the Board,
he ensures that the Board provides constructive input into the development
of strategy, understands the views of the Company’s key stakeholders and
provides appropriate oversight, challenge and support.
As Chair, Richard also leads the Nomination Committee.
Chief Executive
Toby Courtauld
Toby is responsible for setting the Group’s strategic direction, implementing the
agreed strategy, the operational and financial performance of the Group and
the day-to-day management of the Company, including setting the tone for, and
ensuring oversight of, the Company’s culture through ‘living our values’ and ensuring
the Board is aware of key stakeholders’ views. As part of his role, Toby is responsible
for leading the Executive and Sustainability Committees, has executive responsibility
for climate change and sustainability matters and has responsibility for oversight
of the IT, Innovation & Digital Transformation, Leasing and Legal & Corporate
Secretariat functions.
Chief Financial &
Operating Officer
Nick Sanderson
Nick supports the Chief Executive in developing and implementing the Group
strategy and all financial matters. As part of his operations role, Nick has responsibility
for oversight of the valuation process and the HR, Customer Experience, Flex and
corporate Marketing functions. Nick also leads the Social Impact Committee.
Executive Director
Dan Nicholson
Dan further supports the Chief Executive in developing and implementing the
Group strategy while he has specific responsibility for portfolio management and
development management. Dan also leads the Health and Safety Committee,
has Board responsibility for health and safety and leads the New Business team.
Senior
Independent
Director
Nick Hampton
Nick acts as a sounding board for the Chair, leads the other independent
Non-Executive Directors in the performance evaluation of the Chair and is available
to shareholders as required. As part of his role, he also acts as an intermediary for
the Non-Executive Directors if necessary and is an independent point of contact
in the Group’s whistleblowing procedure. As Senior Independent Director, Nick
is also responsible for the Chair’s succession process, working closely with the
Nomination Committee.
Non-Executive
Directors
Mark Anderson
Karen Green
Vicky Jarman
Champa Magesh
Emma Woods
Responsible for bringing an external perspective and providing constructive
challenge and support to the Board’s deliberations and decision making, using
their broad mix of business skills, knowledge and experience acquired across
different business sectors. They are also responsible for monitoring the delivery of
the agreed strategy within the risk management framework set by the Board and
promoting high standards of integrity and corporate governance. As Committee
Chair, Emma Woods is responsible for leading the Remuneration Committee,
while Vicky Jarman is responsible for leading the Audit Committee. Each Committee
Chair seeks engagement with shareholders, as appropriate, on significant matters
relating to their areas of responsibility.
Governance
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Annual Report 2024 Great Portland Estates plc
Composition, succession and evaluation
Directors’ tenure (as at 31 March 2024)
’02
’03
’04
’05
’06
’07
’08
’09
’10
’11
’12
’13
’14
’15
’16
’17
’18
’19
’20
’21
’22
’23
’24
Toby Courtauld
21 yrs 11 mths
Nick Sanderson
12 yrs 8 mths
Dan Nicholson
2 yrs 7 mths
Richard Mully
7 yrs 5 mths
Mark Anderson
2 yrs 7 mths
Karen Green
4 mths
Nick Hampton
7 yrs 7 mths
Vicky Jarman
4 yrs 2 mths
Champa Magesh
1 yr 8 mths
Emma Woods
2 yrs 2 mths
Executive Directors
Non-Executive Directors
Board diversity and tenure (as at 31 March 2024 and the date of this report)
Gender1
Male – 60%
Female – 40%
Age
40–50
51–56
57+
Ethnic group1
White – 90%
Ethnic Minority – 10%
Board balance
Chair
Executive Directors
Independent Non-Executive Directors
1. As at 31 March 2024 and the date of this
report, GPE met the FTSE Women Leaders
Review target to have at least 40% female
representation on the Board and the Parker
Review target to have at least one Director
from an ethnic minority background. GPE
does not currently meet the FTSE Women
Leaders Review target to have at least one
woman in a senior Board role (Chair, SID, CFO
or CEO). GPE’s Board Diversity & Inclusion
Policy, which was updated in March 2023, can
be found on our website at www.gpe.co.uk/
investors/governance. Further information
can be found on pages 112 and 113.
8
1
1
4
6
3
1
6
9
Par
ker
Re
vie
w
Diversity
characteristics
FTS
E W
om
en
Le
ad
ers
1
Board composition and diversity
The diagrams below show the Board’s composition, tenure and diversity characteristics.
The biographical details of the Directors can be found on pages 94 and 95 which show the breadth of their skills
and experience, why their contribution is important to the Company’s long-term sustainable success, and their
membership of the Company’s various Committees.
Further details regarding diversity and inclusion at GPE can be found on pages 68, 112 and 113.
110
Great Portland Estates plc Annual Report 2024
In making any recommendations for Board appointments,
the Nomination Committee consults with the Chief Executive
and other members of the Board as appropriate. During the
year, the Chief Executive was invited to attend Nomination
Committee meetings to provide the Committee with updates
on human resourcing, diversity and inclusion activities, talent
development and succession planning. The Chief Executive
and the Chief Financial & Operating Officer also provided
their input into Board recruitment processes.
In making recommendations to the Board on Non-Executive
Director appointments, the Nomination Committee
specifically considers the expected time commitment of the
proposed Non-Executive Director and other commitments
they already have. Agreement of the Board is also required
before a Director may accept any additional commitments
to ensure possible conflicts of interest are identified and that
the Directors will continue to have sufficient time available
to devote to the Company. In November 2023, the Board
carefully considered the proposed appointments of Emma
Woods as a Non-Executive Director of Ancient + Brave and
of Champa Magesh as Managing Director for the Hospitality
division of The Access Group, noting their other current
commitments. The Board was satisfied that these changes
would not impact Emma’s or Champa’s independence or
commitment and that in each case they would continue
to be able to add significant value to their respective
roles at GPE.
Non-Executive Directors are not appointed for specific terms
but, in accordance with the UK Corporate Governance Code,
are subject to annual re-election. All proposed re-elections
to the Board are formally considered by the Nomination
Committee, taking account of each individual’s effectiveness
and commitment to the role.
The Nomination Committee also reviews the recommendations
of the Board evaluation process and progress against the
recommendations from the previous year.
Our process
The Nomination Committee Terms of Reference are
available on the Company website at www.gpe.co.uk/
investors/governance
The Nomination Committee membership generally
includes all of the Non-Executive Directors. At the start of
the financial year, the Nomination Committee comprised
the Chair of the Board, Richard Mully, and six independent
Non-Executive Directors, namely Mark Anderson, Nick
Hampton, Vicky Jarman, Champa Magesh, Alison Rose and
Emma Woods. Alison Rose stepped down from the Board,
and therefore the Committee, with effect 6 July 2023.
Karen Green was appointed to the Committee with effect
from her appointment to the Board on 1 December 2023.
Our approach
The key objectives of the Committee are to
regularly review the skills and experience of the
Board to ensure that it is the right size, structure
and composition taking into account the skills,
experience, independence, knowledge and diversity
of Directors and the future strategy of the Group.
It is the Committee’s role to consider succession
planning for the Board and senior executives below
Board level, to oversee the development of a diverse
pipeline for succession and to lead on the process
for Board appointments.
As part of its objectives, the Committee reviews
and recommends to the Board (i) the compositions
of the Audit, Nomination and Remuneration
Committees, taking into consideration individuals’
experience, ongoing training and development
needs, their time commitments and the benefits
of diversity; and (ii) the re-election of Directors by
shareholders at the Annual General Meeting.
Nomination
Committee
1. Alison Rose also served as a member of the Nomination Committee during
the year, stepping down from the Board and the Committee on 6 July 2023.
Committee members1
Director
Role
Richard Mully
Chair
Nick Hampton
Senior Independent Director
Mark Anderson
Non-Executive Director
Karen Green
Non-Executive Director
Vicky Jarman
Non-Executive Director
Champa Magesh
Non-Executive Director
Emma Woods
Non-Executive Director
Further details regarding Committee
memberships, meetings and attendance
can be found on page 96.
Governance
111
Annual Report 2024 Great Portland Estates plc
Composition, succession and evaluation continued
Dear fellow shareholder
On behalf of the Nomination Committee, welcome to the
report of the Nomination Committee for the year ended
31 March 2024. The Committee has continued to focus
on Board recruitment and succession planning and the
progression of our diversity and inclusion agenda.
Board and Committee composition
The Nomination Committee regularly reviews the composition
of the Board and its Committees to ensure they have the
requisite skills, experience, diversity and knowledge in
alignment with the Group’s strategy. The Committee also gives
ongoing consideration to the length of service of, in particular,
Non-Executive Directors, to ensure Board membership is
regularly refreshed and that appropriate succession plans
are in place.
As I explained in last year’s report, having identified the need
to strengthen the Board’s City, financial and transaction
experience, the Committee instructed executive search
firm, Russell Reynolds, to support with the search for an
additional Non-Executive Director with the desired skills
and experience. Russell Reynolds has no connection
with the Company or any individual Directors other than
to assist with Executive and Non-Executive succession
planning and appointment processes.
As part of the recruitment process, the Committee reviewed
diverse longlists from which refined shortlists of candidates
were selected for interview. Following a detailed selection
process the Committee recommended to the Board the
appointment of Karen Green, who joined the Board and each
of its Committees from 1 December 2023. Karen’s considerable
City, financial markets and non-executive experience enables
her to provide valuable commercial insight and to contribute
to the development and execution of the Group’s strategy.
I am delighted Karen has joined us, together with the other
additions we have made to the Board over the last few years,
bringing essential skills and expertise to the Board for the
future. I would also like to record my thanks to Alison Rose,
who stepped down from the Board at our AGM on 6 July 2023,
for her valuable contributions and insight.
The Committee also spent time during the year discussing
succession planning for Nick Hampton, our Senior Independent
Director (SID), whose nine-year tenure is due to end in October
2025, and also for my role as Chair, given I will have served
nine years on the Board in December 2025. Chair and SID
succession planning, and the shape and timings of associated
processes to ensure a smooth transition, will remain an area of
focus over the next year. We anticipate that Nick Hampton will
lead the process at the appropriate time to find my successor.
The Committee aims for GPE to achieve the FTSE Women
Leaders Review and Listing Rule target for at least one of the
Chair, SID, CEO and CFO positions to be held by a woman,
and the benefits of diversity will continue to be an important
consideration in our Board succession planning, including
our ongoing succession planning for the Chair and SID roles.
Succession planning and talent development
During the year, in addition to the Board processes described
above, we have considered the development plans and
succession planning for Executive Directors, the Executive
Committee and senior leaders. As part of this process, the
Committee considers the depth and quality of the succession
pipeline, the skills and capabilities required for the future
strategic needs of the business, retention and succession
planning risks, personal development needs and the
strengthening of diversity and inclusion.
Recognising and developing our top talent is key to ensuring
that we have a healthy and diverse pipeline of current and
potential future leaders, and this remains a key area of focus
for the Board and Committee. We have progressed our
Non-Executive Director mentoring programme for selected
members of the GPE team and continue to oversee our wider
talent development programme. Further details can be
found on pages 63 to 68.
To enhance the delivery of our Customer First approach as we
continue to innovate, digitise our activities and grow our Flex
workspace offer, we were pleased to endorse organisational
design changes as well as several senior operational role
changes in the year. This included: Rebecca Bradley, Director
of Customer Experience & Relationships, assuming leadership
of our new Customer Strategy & Insights team; Simon Rowley
being appointed to the newly created role of Director of Flex
Workspaces; Jordan McLean joining GPE in the newly created
role of Director of Digital & Technology; and Helen Hare,
Director of Projects, assuming responsibility for our Building
Surveying and Technical Services teams. Details of these and
other changes made to strengthen the team can be found
on page 66.
Our approach to diversity and inclusion
We recognise the strategic importance of a diverse Board
and workforce which is representative of our stakeholders
and which provides different perspectives to support the
development and delivery of our strategy.
The Board’s Diversity & Inclusion Policy, adopted in March
2023, specifically applies to the Board and its Committees
and supports GPE’s wider approach to diversity. A copy of
the policy can be found on our website at www.gpe.co.uk/
investors/governance. We believe that the Board should
comprise Directors with a diverse mix of attributes including
but not limited to skills, knowledge, experience, gender,
ethnicity, age and educational, professional and socio-
economic background. Different perspectives and points of
view improve decision making, and we believe that ultimately
“The Committee has continued
to focus on Board recruitment
and succession planning, and
the progression of our diversity
and inclusion agenda.”
Richard Mully Chair of the Nomination Committee
112
Great Portland Estates plc Annual Report 2024
this will benefit GPE’s stakeholders through better business
performance. The Board also believes that the tone for
diversity and inclusion at GPE must be set from the top;
having a diverse leadership team and an open and inclusive
culture is aligned to our core values and expected behaviours.
We expect our search consultants to ensure that the
candidate pool for appointments to the Board is sufficiently
wide and includes candidates from a variety of backgrounds
with a wide range of experience and strengths to reflect
the Board’s diversity aims. This approach to recruitment is
mirrored across the business.
From a gender perspective, the Committee supports
the recommendations set out in the FTSE Women Leaders
Review. As at 31 March 2024, women represented 40% of
the Board, 25% of the Executive Committee and 37% of
the population comprising the Executive Committee and
their direct reports. The Board’s Diversity & Inclusion Policy
also states our aim for there to be at least one woman in
a senior Board role (Chair, SID, CEO or CFO) by the end of
2025 at the latest.
We are pleased to have met the Parker Review target to
have at least one Director from a minority ethnic background
and, as explained below, we are working to increase ethnic
minority representation across the organisation.
Diversity and inclusion, and the development of a diverse
management pipeline, remain a key priority and the Board,
along with the Nomination and Remuneration Committees,
continues to drive and oversee our progress in these areas
under our People Plan. To inject further pace, for 2023/24,
Executive Directors and other senior executives were
given a specific annual bonus scorecard measure linked
to progress against two of our aspirational diversity and
inclusion targets:
– for 40% of senior leadership roles (Executive Committee,
Department Director and Heads of Department roles)
to be held by women by 2025 (31 March 2024: 33.3%); and
– for 20% of all management roles to be held by colleagues
who identify with an ethnic minority category (as identified
by the ONS) by 2025 (31 March 2024: 15%).
In line with the Parker Review recommendations for
FTSE 350 companies, the Committee has also set a further
target for at least 15% of the population comprising
the Executive Committee and their direct reports to be
represented by individuals who identify with an ethnic
minority category (as identified by the ONS) by the end
of 2027 (31 March 2024: 4.2%).
We continue to make progress in many areas but
recognise there is much work still to do and the Committee
continues to oversee the development, implementation
and progress of diversity and inclusion initiatives under our
Board-approved People Strategy. The work of our Inclusion
Committee and four Employee Impact Groups has continued
to provide a voice for colleagues from under-represented
groups. This year also saw the launch of compulsory inclusion
workshops for all colleagues, the completion of an inclusive
leadership programme by Department Directors and Heads
of Department and a series of ‘Listening Sessions’ hosted
by Executive Committee members with colleagues from
across the business.
We believe that these, and the many other initiatives
across the business, are helping to educate colleagues
and foster a diverse and inclusive culture. We were delighted
to become a Level 3 Disability Confident Employer in the
year and to receive a Clear Assured Bronze level diversity
and inclusion accreditation, reflecting the positive progress
being made in many areas.
Further details regarding our diversity and inclusion initiatives
and progress can be found on pages 63 to 68.
Committee and Director effectiveness review
This year, the Committee oversaw an internal Board and
Committee effectiveness review. The review concluded that
the Board and its Committees, including the Nomination
Committee, continue to operate efficiently and effectively.
Details of the review and its findings can be found on
pages 114 and 115.
All proposed elections and re-elections to the Board are
formally considered by the Nomination Committee, taking
account of each individual’s continued effectiveness and
commitment to the role. Following this review, I can confirm
that each of the Non-Executive Directors is considered
effective in their roles and both independent of the executive
management and free from any business or other relationship
which could materially interfere with their exercising
of independent judgement. The SID also met with the
Directors to appraise my own performance.
Richard Mully
Chair of the Nomination Committee
22 May 2024
Statement in accordance with Listing Rule
9.8.6R(9) on Board Diversity
As at 31 March 2024, GPE met the targets specified in Listing
Rules 9.8.6R(9)(a) and (c) with the Board comprising 40% women
and having one Director from a minority ethnic background.
However, while the key roles of Audit Committee Chair and
Remuneration Committee Chair are both held by women, the
Board has not yet met the target under Listing Rule 9.8.6R(9)(b)
for at least one of the Chair of the Board, Chief Executive,
SID or CFO positions to be held by a woman.
All Board appointments are based on merit and objective criteria,
taking account of the benefits of diversity and, as explained on
page 112, the benefits of diversity are an important consideration
in our ongoing succession planning for the roles of Nick Hampton
(SID) and Richard Mully (Chair) who will have served on the Board
for nine years in October 2025 and December 2025 respectively.
It is the Board’s aspiration and intention to meet the target
specified in Listing Rule 9.8.6R(9)(b) as we refresh our Board over
time and, as set out in our Board Diversity & Inclusion Policy, we
aim to meet all targets set out in Listing 9.8.6(9) by no later than
the end of 2025. We will provide further updates on our succession
planning and recruitment processes at the appropriate time.
Details regarding GPE’s gender and ethnic diversity data,
including that required by Listing Rule 9.8.6R(10), and our
approach to collecting data, can be found on page 68.
Governance
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Annual Report 2024 Great Portland Estates plc
Composition, succession and evaluation continued
Our 2023/24 Board evaluation process
In accordance with the recommendations of the Code, we undertake a review of the effectiveness of the Board’s performance
and that of its Committees and Directors every year, with an external evaluation held at least every three years.
Our progress against the actions identified through the 2022/23 external review facilitated by Milena Djurdjevic of Calibro
Consult, an external board evaluation specialist, is set out below:
An internal Board and Committee effectiveness review
was undertaken in 2023/24 which was led by Nick Hampton,
our SID, with the support of the General Counsel & Company
Secretary. The process, which was agreed by the Nomination
Committee, involved completion of an online questionnaire
followed by individual meetings with Directors, a detailed
report of findings and discussion at the January 2024
Board meeting.
The aim of the review was to assess the effectiveness of
the Board, its Committees and individual Directors in order
to identify any actions to improve how Directors fulfil their
duties and become a more effective Board. The review
covered the following key themes:
– the Board’s role, composition and operation;
– the Board’s protocols and behaviours and how
effectively Directors work together to achieve the
Board’s objectives;
– the performance of the Board and its Committees;
– progress against the key actions arising from the
2022/23 external evaluation; and
– focused questions on the Board’s strategic oversight
in the context of the challenging macro environment,
stakeholder feedback, transition to a new external
auditor and diversity and inclusion.
Progress against 2022/23 Board evaluation actions
Actions
Progress
Enhancing the Board’s
City, financial markets and
transaction experience.
– Following a detailed recruitment process, Karen Green was appointed to the Board
on 1 December 2023 bringing considerable City and financial markets experience.
To allocate additional Board
time to GPE’s strategy and
transformation.
– Additional time allocated at scheduled Board and Committee meetings to
discuss strategy and transformation, including transformation in the areas
of Flex operations, customer experience, technology and people.
To further deepen the Board’s
knowledge of the developing
flexible space market and
continue to ensure that Flex
has the right structure,
resourcing and oversight.
– Updates on Flex performance and market received at each scheduled Board
meeting. Flexible space market also considered in the context of GPE’s strategy,
acquisition pipeline, refurbishment and customer feedback discussions.
– Further development of Flex management pack and KPIs to monitor performance,
with additional reporting on operational improvements.
– Simon Rowley appointed to the newly created role of Director of Flex Workspaces
with team recruitment and reorganisation to support Flex delivery.
To further develop the Board’s
understanding of technology
and innovation threats and
opportunities, GPE’s ambitions
in these areas and the best
means of achieving them.
(Ongoing focus area)
– Presentations to the Board on progress against prior Innovation Strategy
and internal and external technology risks and opportunities, including AI.
– Creation of new Director of Digital & Technology role. Adoption of new Digital,
IT & Innovation Strategy in April 2024.
– Updates received on cyber security controls and recommendations arising
from a simulated cyber attack exercise.
– Updates received on a review of the sesame® app to maximise its benefits
and further support customer experience.
Board and Nomination
Committee continued focus
on talent development and
Executive Committee and
Board succession planning
and diversity.
(Ongoing focus area)
– Board and Executive Committee gender diversity increased.
– Nomination Committee oversaw organisational design changes, team
reorganisations and associated talent development and succession opportunities.
– Implementation of meaningful diversity and inclusion initiatives – see pages 63 to 68,
112 and 113.
– Diversity and inclusion targets tracked, new senior management ethnic diversity
target introduced in line with Parker Review and clear D&I annual bonus targets set.
114
Great Portland Estates plc Annual Report 2024
2023
2024
The process also considered the effectiveness of individual
Directors and one-to-one performance feedback was given
by the SID to the Chair and by the Chair to the other Directors
at the end of the process. The review concluded that the
Board, its Committees and individual Directors continue
to operate effectively.
Some of the key strengths identified included:
– an inclusive Board culture which is open, collaborative
and collegiate;
– high levels of engagement from Directors with
strong contributions to both strategic and
organisational discussions;
– a diverse range of skills and perspectives, supported
by recent additions to the Board;
– constructive discussion with good debate and an
appropriate balance of challenge and support;
– well-managed Board and Committee meetings supported
by high quality papers and effective leadership from their
respective Chairs, with a clear focus on priorities; and
– strong progress having been made in response to key
areas of feedback arising from the prior year’s review,
in particular in relation to the implementation of
organisational changes and the development of the
Flex strategy, business plan and operations.
The review identified some recommendations and
opportunities and the key actions arising from the review
are as follows:
What we did in 2023/24
Nomination Committee
– Richard Mully and
Russell Reynolds updated
the Committee on the
search for an additional
Non-Executive Director
with City and financial
markets experience
– The Committee discussed
Executive Committee
talent planning, succession
and development
– The Committee noted
Alison Rose’s decision not
to stand for re-election at
the AGM and subsequently
recommended the
appointment of Karen
Green as a Non-Executive
Director and member of
the Audit, Nomination and
Remuneration Committees
Board
– The Board approved
the appointment of Karen
Green as a Non-Executive
Director
Nomination Committee
– The Committee discussed
the findings from the 2023/24
external Board and Board
Committee evaluation
– The Committee reviewed
Board and Board
Committee compositions
and Board training
– The Committee received
an update on governance
and regulatory requirements,
including the revised UK
Corporate Governance Code
– The Committee reviewed
its Terms of Reference
Board meeting
– The Board and Committee
memberships were approved
Nomination Committee
– The Committee discussed
Executive Director
performance and
development
– The Committee endorsed
proposed senior
operational role changes
and appointments
Nomination Committee
– The Committee endorsed
proposed changes to GPE’s
organisational design
and structure
– The Committee discussed
the findings from a senior
management talent
development, retention and
succession planning review
and Executive Committee
succession planning
– The Committee considered
Chair and SID succession
planning
Board
– The Board considered the
findings from the 2023/24
Board and Board Committee
evaluation
Nomination Committee
– The Committee discussed
the diversity and inclusion
agenda and initiatives
and the development
of a diverse pipeline
– The Committee approved
GPE’s new voluntary ethnic
diversity target for senior
management in line with
the Parker Review
– The Committee received
an update on proposed
organisational design
changes
Key recommendations from the
2023/24 Board evaluation
1
To monitor the implementation of
organisational design and people
changes to ensure that GPE has the
right structure and capabilities to
deliver its ambitious strategic plan.
2
Continuing to oversee the evolution
of the Flex strategy and product
offer to drive differentiated returns
and shareholder value.
3
To maintain close oversight of macro
conditions and the next property cycle
and the implications for GPE’s strategy
and capital allocation decisions.
4
To allocate additional Board
time to considering technology
risks and opportunities, including
implementation of the new Digital,
IT & Innovation Strategy.
5
Ongoing focus on Board composition
and succession planning in view of
Chair and SID tenures and on diversity
representation levels of the Board
and wider business.
March
May/June
November
September
January
February
Governance
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Annual Report 2024 Great Portland Estates plc
Audit, risks and internal controls
Together, the Audit Committee and the Board are responsible
for ensuring the Group has an effective internal control and
risk management system and that the Annual Report provides
a fair reflection of the Group’s activities during the year.
Internal controls and ongoing risk management
The Board is responsible for maintaining and monitoring
the Group’s system of internal control and, at least annually,
reviewing its effectiveness.
Such a system can only provide reasonable, and not absolute,
assurance against material misstatement or loss, as it is
designed to manage rather than eliminate the risk of failure
to achieve business objectives.
The identification and management of risks and opportunities
is part of the GPE mindset, underpinned by evolving processes
and procedures in place for identifying, evaluating and
managing the principal and emerging risks faced by the
Group. These processes and procedures have been in place
for the year under review and up to the date of this report,
are regularly reviewed by the Board and accord with the
Financial Reporting Council’s Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting.
Key features of our system of internal control include:
– a comprehensive system of financial reporting and
business planning;
– a defined schedule of matters reserved for Board decision,
which is reviewed by the Board at least annually;
– an organisational structure with clearly defined levels
of authority and division of responsibilities;
– formal documentation of procedures;
– the close involvement of the Executive Directors and the
other Executive Committee members in day-to-day
operations, including regular meetings with senior
managers to review operational activities and risk
management systems;
– the Executive Committee reporting on control systems
to the Audit Committee and Board, including to annually
confirm its view on whether GPE’s internal controls,
and broader control environment, are appropriate
and operating effectively;
– regular Board review of Group strategy, including forecasts
of the Group’s future performance and progress on the
Group’s development projects;
– formal sign-off on the Group’s Ethics, Financial Crime
(incorporating anti-fraud, bribery and corruption,
facilitation of tax evasion and sanctions), Gifts and
Hospitality and Whistleblowing Policies by all employees
annually; and
– review by the Audit Committee of internal audit reports
and reports from the external auditor.
Twice a year, the Audit Committee carries out, on behalf
of the Board, a review of the Group’s risk management
framework, its principal and emerging risks, key controls and
their oversight during the year. The Group’s systems of risk
management and internal controls involves the identification
of business and financial market risks including social,
ethical and sustainability issues which may impact on the
Group’s objectives, together with the controls and reporting
procedures designed to minimise those risks.
As part of its review, the Audit Committee formally considers
the key controls forming the Group’s system of internal control
and whether these are considered to be operating effectively.
The Committee considers a report from management,
the work of internal audit, as described on page 120, and
feedback from the external auditor. Key control observations,
exceptions and management actions are reviewed and
discussed, and identified risk areas are considered for inclusion
in the internal audit plan where appropriate. Once complete,
the Audit Committee’s review of the Group’s risks and internal
controls, and their effectiveness, is considered by the full
Board. No significant control weaknesses or failures were
identified as part of this year’s internal controls effectiveness
review. During the year, the Board and Audit Committee
have overseen actions to further enhance controls
and the efficiency of GPE’s internal control framework.
This has included:
– the continued embedding of GPE’s fraud risk
assessment process;
– the reorganisation of the Finance team, strengthening
information flows and management oversight of control
areas. Further enhancement of GPE’s controls framework
is being considered in view of the new provisions under
the revised UK Corporate Governance Code;
– the ongoing strengthening of IT disaster recovery
controls in response to recommendations arising from
an internal audit review and the adoption of a new Digital,
Technology and Innovation Strategy; and
– enhancements to sustainability data assurance activities.
The Board and Audit Committee have also continued
to oversee the implementation and development of the
Company’s risk management framework and processes
to ensure these remain fit for purpose.
During the year, the Board and the Audit Committee
have continued to regularly review and monitor the risks,
potential impacts and controls associated with the volatile
macro-economic environment and geopolitical risks arising
from the war in Ukraine and the conflict in the Middle East,
including in respect of rising inflation, interest rates and
property yields, and supply chain pressures. This has included
a review of the impacts on GPE’s operations, development
delivery and costs, valuations, financial forecasts and business
plans. The Group’s business plans continue to be prepared
under a variety of market scenarios to reflect a number
of potential outcomes.
The Board and the Audit Committee have continued their
focus on climate change and decarbonisation risks and the
steps being taken by GPE to mitigate these risks and their
potential impacts on our business and operations. Such steps
have included the updating of our Roadmap to Net Zero,
further details of which can be found on page 39.
The Group’s principal risks relating to ‘Climate change and
decarbonisation’, ‘Adverse macro-economic environment’,
and ‘London attractiveness’ continue to be identified as
the risks which the Board believes could have the greatest
potential impact on the Group’s viability. The Group’s viability
statement can be found on page 88.
The Group’s principal risks and the processes in place
to manage those risks are described in more detail on
pages 74 to 87.
116
Great Portland Estates plc Annual Report 2024
Audit
Committee
Our process
The Audit Committee Terms of Reference are available on the
Company website at www.gpe.co.uk/investors/governance
At the beginning of the financial year, the Committee
comprised six independent Non-Executive Directors: Vicky
Jarman as Chair, Mark Anderson, Nick Hampton, Champa
Magesh, Alison Rose and Emma Woods. Alison Rose stepped
down from the Board, and therefore the Committee,
at the end of the Company’s Annual General Meeting on
6 July 2023. Karen Green joined the Committee with effect
from her appointment to the Board on 1 December 2023.
The biographies of the current Committee members are set
out on pages 94 and 95. Vicky Jarman, Nick Hampton and
Karen Green have recent and relevant financial experience
and are considered suitably competent in accounting and/
or auditing. The Committee, as a whole, has competence
relevant to the real estate sector.
The Committee provides a forum for review of the Group’s
financial external reporting, including its accounting policies.
In respect of the Group’s half-year and year-end results,
this includes discussions with the Group’s external valuer,
CBRE, on the valuation process and conditions in London’s
real estate markets and with the Group’s external auditor,
PricewaterhouseCoopers LLP (PwC), on any accounting
or audit matters. The Committee reviews the Company’s
sustainability data assurance activities being carried out
by PwC’s sustainability assurance team and considers
the Company’s Task Force on Climate-related Financial
Disclosures in the Annual Report. The Committee also reviews
the adequacy and effectiveness of the Group’s internal
financial controls and internal control and risk management
systems and is responsible for the selection and review of
the effectiveness of the internal and external auditors.
The Chair of the Board, Richard Mully, attends the
meetings reviewing the half-year and year-end results
and has a standing invitation to attend any other meetings
as appropriate. The Chief Executive, Chief Financial &
Operating Officer, Executive Director, Director of Investor
Relations and Joint Director of Financial Reporting, other
members of senior management and representatives
from the external auditor and internal auditor also attend
Committee meetings as appropriate.
The Committee typically meets four times a year, with the
meetings aligned with our financial reporting timetable.
Our approach
The key objectives for the Audit Committee are to
review and report to the Board and shareholders on
the Group’s financial reporting, internal control and
risk management systems, and on the independence
and effectiveness of the external auditor.
Committee members1
Director
Role
Vicky Jarman
Committee Chair
Nick Hampton
Senior Independent Director
Mark Anderson
Non-Executive Director
Karen Green
Non-Executive Director
Champa Magesh
Non-Executive Director
Emma Woods
Non-Executive Director
Further details regarding Committee
memberships, meetings and attendance
can be found on page 96.
1. Alison Rose also served as a member of the Audit Committee during the year,
stepping down from the Board and the Committee on 6 July 2023.
Governance
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Annual Report 2024 Great Portland Estates plc
In addition, the Committee has continued to monitor UK
audit and corporate governance reforms and consider the
implications of the revised UK Corporate Governance Code
(the Revised Code) which was published in January 2024.
The majority of the changes will apply to the Company from
the accounting period commencing 1 April 2025 with certain
provisions concerning internal controls and risk management
reporting to apply from the subsequent accounting period.
The Committee has also had regard to the ‘Audit Committees
and the External Audit: Minimum Standard (Minimum Standard)’
against which it will report under the Revised Code. While the
Committee considers that it met the requirements of the
Minimum Standard in 2023/24, it is considering opportunities
to enhance processes regarding the evidence it obtains from
stakeholders regarding the effectiveness of the external audit
in view of the recommendations of the Minimum Standard.
Valuation of the portfolio, accounting
considerations and key areas of judgement
As expected of a listed property REIT, the most significant
financial judgement in the preparation of the Group accounts
is GPE’s property valuation, which is central to the Group’s
performance and net tangible asset value and is inherently
subjective. A key responsibility of the Committee is, therefore,
to satisfy itself that the valuation process in relation to the
Group’s property portfolio has been carried out appropriately
by the Group’s valuer, CBRE. Following a comprehensive
process, which is outlined in more detail below, the Committee
is satisfied that the valuation process is sufficiently robust.
In October 2023, the Royal Institution of Chartered Surveyors
published an updated UK supplement of its ‘Red Book’ –
its master document for regulating the valuation profession
globally – implementing new rules that will prevent valuation
firms from valuing an asset for regulated purposes for more
than ten consecutive years. It is expected that CBRE will
remain as the Group’s valuer until 31 March 2026 in accordance
with the applicable rules and the Committee will be overseeing
the process for the appointment of a new valuer with
appropriate transitional arrangements.
During the year, the Committee considered a number of items
that impacted the Group’s financial statements, including:
– the segmental reporting of GPE’s Fully Managed activities
in accordance with ‘IFRS 8 – Segmental Reporting’ as
these activities have grown along with associated Flex
management information produced by the business;
– the accounting treatment of the acquisition of King
Sloane Properties Limited, being the corporate vehicle
which held the Soho Square Estate, W1;
– the accounting treatment of the £200 million interest
rate cap taken out alongside GPE’s new £250 million term
loan in September 2023 to protect against further interest
rate increases;
– the accounting treatment in respect of the New City Court,
SE1 redevelopment in accordance with ‘IAS 40 – Investment
Property’; and
– the rate of capitalisation of interest for upcoming
redevelopments under IAS 23 in view of the Group’s
new debt facilities – ‘Borrowing Costs’.
Dear fellow shareholder
On behalf of the Audit Committee, I am pleased to present
the report of the Audit Committee for the year ended
31 March 2024.
During a year which was marked by continued macro-
economic volatility and the impacts of the war in Ukraine
and conflict in the Middle East, the Committee has played
a crucial role in providing comfort to the Board on the
integrity of the Group’s processes and procedures in relation
to financial reporting, internal control and risk management.
The Committee’s report is intended to provide insight into its
activities during the year and sets out how it has performed
against its key objectives.
As outlined on pages 117 and 123, the Committee meets
four times a year to:
– review the plan for the external audit;
– agree the internal audit plan;
– identify key accounting matters and areas of judgement
as early as possible;
– review reports from the external and internal auditors
and valuer;
– consider how risks and internal controls have operated
in the preceding six months in respect of the half-year
and year-end results;
– monitor the integrity of the Group’s financial reporting
and consider any key accounting judgements by
management; and
– review the independence and effectiveness of both
the external and internal auditors.
This year, the Committee spent time ensuring the
effective transition to the new external auditor,
PricewaterhouseCoopers LLP (PwC), which succeeded
Deloitte as the Group’s external auditor from the conclusion
of the Company’s Annual General Meeting on 6 July 2023.
Further details can be found on page 121.
The Committee also oversaw a tender process resulting in
the appointment of PwC as the Group’s sustainability data
assurance provider in respect of selected data presented in
this Annual Report, and agreed the scope of the assurance
work to be performed.
Audit, risks and internal controls continued
“The Committee has continued to
play a crucial role in providing comfort
to the Board on the integrity of the
Group’s processes and procedures in
relation to financial reporting, internal
control and risk management.”
Vicky Jarman Chair of the Audit Committee
118
Great Portland Estates plc Annual Report 2024
Accounting and key areas of judgement
Significant matter
Action taken
Valuation of the Group’s portfolio
The valuation of the Group’s property
portfolio is a key determinant of the
Group’s net tangible asset value as well
as indirectly impacting executive and
employee remuneration. The valuation
is conducted externally by independent
valuers; however, the nature of the
valuation process is inherently subjective
due to the assumptions made on market
comparable yields, estimated rental
values, void periods and the costs to
complete development projects.
The Audit Committee, together with the Chair of the Board, meets with the valuer,
the Executive Directors and senior management involved in the valuation process along
with the external auditor in November and May to discuss the valuation included within
the half-year and year-end financial statements. This review includes the valuation
process undertaken, changes in market conditions, including higher interest rates
and property yields, recent transactions in the market and how these have impacted
our portfolio, the valuation of individual buildings and the valuer’s expectations in
relation to future rental growth and yield movement. The Committee asks the valuer
to highlight significant judgements or disagreements with management during the
valuation process.
The external auditor, PwC, using its real estate experts, separately meets the valuer
and provides the Audit Committee with a summary of its work as part of its reports
on the half-year review and year-end audit.
As a result of these reviews, the Committee concluded that the valuation had been
carried out appropriately and independently and was suitable for inclusion in the
Group’s accounts.
Fair, balanced and understandable
As part of the fair, balanced and understandable review,
an advanced draft of the whole Annual Report was reviewed
by senior management, with independent functions also
reviewing and verifying relevant sections. The Chief Financial &
Operating Officer, in his year-end Audit Committee and Board
papers, includes a checklist of areas for the Audit Committee
and Board to consider (including successes and challenges
over the year and looking ahead) when reviewing the fairness,
consistency and balance of the Annual Report and Financial
Statements, including whether there are significant omissions
of information. The external auditor also reported its findings
to the Committee.
The Committee considered this Annual Report and Financial
Statements 2024, taken as a whole, and concluded that the
disclosures, as well as the process and controls underlying
its production, were appropriate and recommended to the
Board that the Annual Report and Financial Statements
2024 is fair, balanced and understandable while providing
the necessary information to assess the Company’s position
and performance, business model and strategy.
Viability and going concern statements
The Committee considered the viability and going concern
statements and their underlying assumptions. This included
management’s work on assessing the potential risks to
the business and the impacts arising from the adverse
macro-economic environment (including the impact of
high inflation and higher interest rates on property yields,
property valuation, the costs and availability of financing,
and on the supply chain), London attractiveness risks,
(including the rise of alternative destinations
for international trade), development risk, and climate
change and decarbonisation risks. Following this review,
the Committee was satisfied that management had
conducted robust viability and going concern assessments
and recommended the approval of the viability and
going concern statements to the Board.
Internal controls and risk management
The Audit Committee’s role in supporting the Board’s
oversight and review of the Group’s principal and emerging risks,
internal controls and risk management processes is covered
on pages 74 to 77 and page 116.
The Committee continues to consider and monitor
developments and practice in the areas of internal controls
assurance and risk management, including in the context
of relevant new provisions under the Revised Code which
will apply to the Company from the accounting period
commencing 1 April 2026.
Financial Reporting Council (FRC) review
During the year, the Group received a letter from the Corporate
Reporting Review team of the FRC concerning its review of
the Group’s interim report for the period ended 30 September
2023. The FRC did not raise any questions or queries based on
its review, although the FRC caveated that it could do so in the
future should new information become available to it which it
considers relevant. The review conducted by the FRC was based
solely on the interim report and does not provide any assurance
that the interim report is correct in all material respects.
Governance
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Annual Report 2024 Great Portland Estates plc
Audit, risks and internal controls continued
Internal audit
Our internal audit function, which is outsourced to Grant
Thornton, provides independent assurance as to the
adequacy and effectiveness of the Company’s internal
controls and risk management systems, and reports its
findings to the Committee.
During the year, Grant Thornton undertook internal
audit reviews in relation to: the Flex management
reporting; Information Technology Disaster Recovery;
HR Operations; and Sustainability Governance. The reviews
did not identify any major causes for concern. A number
of recommendations were made to strengthen the design
and operation of certain controls and to implement ‘best
practice’ alongside other opportunities for improvements.
Following reviews, the Committee receives regular updates
on the implementation of agreed actions arising from
internal audit findings. Periodic reports on IT general
controls and cyber governance are also presented to
the Board during the year.
At the Audit Committee meeting in February 2024, the
Committee reviewed and agreed with Grant Thornton
the internal audit plan for 2024/25, having regard to the
Company’s risk management framework. It was concluded
that, for the current financial year, Grant Thornton should
carry out an internal audit of:
– the Customer Relationship Management system,
post implementation review;
– the end-to-end service charges management
process; and
– business applications governance and procurement.
The Committee believes that the process for determining
the internal audit plan is appropriate and effective with
scope for the Committee to react to events, new information
and situations which become known during the year and to
include them as necessary. The internal audit plan for 2023/24
will continue to be reviewed and adapted, if appropriate,
to meet the changing needs of the business.
Supplier payment practices
The Committee reviews the Group’s supplier payment
practices twice per year along with opportunities to further
enhance processes. For the period to 31 March 2024, the
average supplier payment period of the Group’s largest
subsidiary was 35 days (2023: 31 days).
Our Anti-Fraud, Bribery & Corruption
and Whistleblowing Policies
Each year, as part of the year-end planning meeting,
the Committee reviews the Group’s Financial Crime, Ethics,
Gifts and Hospitality and Whistleblowing Policies, which
comprise the Company’s key policies on bribery and fraud,
for reporting to the Board. The Board has a zero tolerance
for bribery and corruption of any kind. The Committee
also oversees the periodic review of the Group’s fraud risk
assessment matrix.
This year, the Committee also considered the implications
of the Economic Crime and Corporate Transparency Act 2023
(ECCTA), including the new ‘failure to prevent fraud’ corporate
offence which is expected to come into force and apply to the
Group in 2024, following the awaited publication of associated
guidance by the government. A review of the Group’s fraud
procedures will be undertaken against the government’s
pending guidance to ensure they remain appropriate.
Annually, all employees are required to confirm their compliance
with the Group’s Financial Crime, Ethics, Gifts and Hospitality
and Whistleblowing Policies as outlined on page 105, and
any non-compliance is escalated to the Committee as
appropriate. No matters were escalated to the Committee
during the year.
The Company’s whistleblowing processes include a
confidential hotline, operated by an independent third party,
through which employees can anonymously raise matters
of concern relating to suspected wrongdoings or dangers at
work. Any matters reported are investigated by the General
Counsel & Company Secretary or the Senior Independent
Director. During the year, there were no whistleblowing
incidents reported.
Committee effectiveness
I believe that the quality of discussion and level of challenge
by the Committee with management, the internal and external
audit teams and the valuer, together with the timeliness and
quality of papers received by the Committee, ensures the
Committee is able to perform its role effectively. The formal
review of the Committee’s effectiveness was covered as
part of this year’s internal Board and Committee evaluation
process and I am pleased that the review confirmed that the
Committee continues to operate effectively. Further details
on the evaluation process and its broader findings can be
found on pages 114 and 115.
Vicky Jarman
Chair of the Audit Committee
22 May 2024
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Great Portland Estates plc Annual Report 2024
The external audit and review
of its effectiveness
The Audit Committee advises the Board on the appointment
of the external auditor, negotiates and agrees its remuneration
for audit and non-audit work, reviews its effectiveness,
independence and objectivity and discusses the nature,
scope and results of the audit with the external auditor.
Following a competitive tender process in 2022/23 and
approval by shareholders at the 2023 AGM, PwC was
appointed as the Group’s external auditor for 2023/24.
In view of Deloitte stepping down and PwC being newly
appointed as the Company’s external auditor in July 2023,
the Committee did not conduct a formal backward-looking
effectiveness review in respect of the 2022/23 external
audit. Nevertheless, taking relevant factors into account,
the Committee was satisfied with the independence and
effectiveness of the 2022/23 external audit. The next such
backward-looking evaluation will take place later this
year after PwC has completed its first audit of the Group’s
financial statements.
The Committee has closely monitored the performance
of PwC since its appointment and the effectiveness of
the external audit process throughout the year. As part
of this work, the Audit Committee has considered:
– the risks to audit quality identified by PwC and how
these are being addressed, including through the use
of technology;
– PwC’s key audit firm level controls relied on to address
audit quality risks, reports on PwC’s work from the FRC’s
Audit Quality Review, PwC’s Audit Quality Plan, Strategy
and audit culture and behaviours and the findings of
FRC reviews of Company financial statements;
– the calibre of PwC as an external audit firm – including
reputation, coverage and industry presence;
– progress against the agreed audit plan and any changes
to its scope or perceived audit risks;
– the quality of the audit team and its individuals, their
character and knowledge, resources, partner involvement,
team rotation, planning and execution, scope adequacy
and specialist areas and understanding of the business;
– audit fee reasonableness and scope changes;
– audit communications and effectiveness – response to
new developments and regulations, approach to critical
accounting policies, issues and risks, quality of processes,
timely resolution of issues, level of professional scepticism
and challenge of management assumptions and the results
of those challenges, robustness in handling key judgements,
quality of responses to questions from the Audit Committee
and feedback on management performance and internal
control systems;
– feedback from key stakeholders on the conduct of the audit,
including in private sessions held with (i) management; and
(ii) internal audit without the auditors present and regular
meetings between the Audit Committee Chair and members
of management and the internal audit partner;
– governance and independence – internal governance
arrangements, lines of communication with the Audit
Committee, integrity of the audit team, Audit Committee
confidence in the audit team and transparency;
– ethical standards, including potential conflicts of interest; and
– non-audit work and the potential impairment of
independence by non-audit fee income.
The Committee also considered the effectiveness of the Group’s
management during the external audit process and sought
feedback from PwC on the conduct and responsiveness of
members of the Finance team. The Committee is satisfied that
there has been a good level of interaction and communication
between the GPE team and PwC.
The Committee believes that there has been a smooth
transition of the external audit to PwC and that the audit
process and external auditor have been effective. As explained
above, a formal annual evaluation of PwC will also take
place later this year after PwC has completed its first audit.
The Committee is also satisfied with PwC’s independence,
with non-audit services previously provided by PwC having
been transferred to other service providers ahead of PwC’s
appointment, where considered appropriate.
In line with best practice, the Company intends to put the
external audit out to tender at least every ten years in
the future.
The Company has complied during the year ended
31 March 2024, and up to the date of this report, with the
provisions of the Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order 2014.
Non-audit services
The external auditor, PwC, is responsible for the annual
statutory audit and also provides certain other services
which the Audit Committee believes PwC is best placed to
undertake due to its position as auditor. These arrangements
are governed by the Group’s policy for provision of non-
audit services by the external auditor, which is available
on the Company’s website at www.gpe.co.uk/investors/
governance. The policy, which is reviewed annually, reflects
the FRC’s Revised Ethical Standard that came into force
on 15 March 2020.
The purpose of this policy is to ensure that auditor
independence and objectivity are maintained and, under
the policy, prior approval is required by the Committee for
any permitted non-statutory assignments over £50,000, or
where such an assignment would take the cumulative total
of non-audit fees paid to the external auditor over 50% of
that year’s audit fees. The appointment of PwC to undertake
any non-audit services also requires the prior approval of
the Chief Financial & Operating Officer and, importantly,
he is required to consider whether it is in the interests
of the Company that the services are provided by PwC,
rather than another supplier.
Governance
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Annual Report 2024 Great Portland Estates plc
Audit, risks and internal controls continued
The policy also applies a fee cap on permitted non-audit
services, whereby such fees in any financial year must
not exceed 70% of the average statutory audit fee for the
prior three consecutive financial years paid to the appointed
auditor. The cap on PwC‘s non-audit services will therefore
apply from the year ending 31 March 2027, after it has
completed three audits.
During the year, activities undertaken by PwC for the Group
outside of the main audit included:
– the interim review;
– reporting on the income cover in connection with the
debenture trust deed compliance certificate; and
– third-party sustainability assurance.
In each case, PwC was considered the most appropriate
service provider due to its position as auditor and given its
detailed knowledge and understanding of our business and
industry. Ahead of its appointment as the Group’s external
auditor for the 2023/24 audit, non-audit services previously
provided to the Group by PwC were transitioned to other
service providers where considered appropriate.
Payments made by the Group for audit and non-audit fees for
the year are disclosed on page 157. The Group’s audit fees are
presented to, discussed and approved by the Audit Committee
at its February year-end planning meeting. In addition, audit
and non-audit fees paid to PwC in respect of joint ventures
totalled £94,000 (GPE share: £46,000) (2023: £52,500) and
£nil (2023: £52,500) respectively.
Non-audit fees represented 23% of the 2023/24 audit fee
of £548,000 (including Group share of joint ventures). A more
detailed analysis is provided on page 157.
PwC’s non-audit service fees for the year ending 31 March
2025 will be higher than for the year ended 31 March 2024 as
a consequence of its appointment as reporting accountants
to the Company in connection with the rights issue to be
announced alongside our 2023/24 year-end results.
In addition to ensuring compliance with the Group’s policy in
respect of non-audit services, the Committee also receives
confirmation from PwC that it remains independent and has
maintained internal safeguards to ensure its objectivity.
Internal audit and review
of its effectiveness
An Internal Audit Charter approved by the Committee
governs the internal audit remit and provides the framework
for the conduct of the internal audit function, which has
been outsourced to Grant Thornton since January 2022.
The Internal Audit Charter reflects market practice and
recommendations in the Internal Audit Code published
by the Chartered Institute of Internal Auditors in 2020.
The Committee reviews and approves the internal audit
plan annually which is closely aligned to the review by
management and the Committee of the Group’s risk
management framework. In addition, the Committee
Chair meets with the internal auditor separately from the
Committee to discuss planned internal audit activities
and the results of internal audit reviews.
The Committee meets annually with the internal auditor
without management present to discuss the effectiveness
of the internal audit function, and also to seek feedback
from the internal auditor on the conduct of members of the
GPE team during the internal audit process. The external
audit partner also meets separately with the internal
auditor at least annually.
In January 2024, the Committee conducted a formal
assessment of the effectiveness of internal audit, which was
facilitated by the Company Secretariat team. Key stakeholders
were asked to complete a questionnaire-based assessment
which was designed to evaluate internal audit’s purpose,
objectives and understanding, position, process, relationships
and communication, people and performance. The responses
were collated on an anonymous basis and the results were
shared with the Committee Chair, internal audit partner and
Chief Financial & Operating Officer prior to consideration
at the Committee’s meeting in February 2024.
The overall assessment concluded that the internal
audit function remained effective. The review found that
internal audit was trusted and respected by the business
and respondents believed that its work led to lasting
positive change and a stronger risk management culture.
Internal audit was also considered to have good relationships
and open communications with stakeholders. Feedback was
constructive and provided areas of opportunity for Grant
Thornton to deepen its understanding of the business and
its risk environment, and to continue to build its standing
in the business.
Where it is proposed to appoint Grant Thornton in any
advisory role, careful consideration must first be given to
any potential conflict with its internal audit role. The Audit
Committee will also specifically consider Grant Thornton’s
independence when annually reviewing and approving
the internal audit plan to ensure that there are no conflicts
in Grant Thornton undertaking the proposed internal
audit work.
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Great Portland Estates plc Annual Report 2024
Internal audit
Met with Grant Thornton to approve the 2024/25 internal
audit plan, approve updates to the internal audit charter
and discuss the findings from the internal audit reviews
of HR Operations and Sustainability Governance.
Year-end planning update
Met with PwC and management to consider/approve:
– significant accounting and key areas of judgement;
– proposed changes to disclosures planned for the 2024
Annual Report;
– developments in corporate governance presented by PwC;
– the 2023/24 audit plan update; and
– the 2023/24 audit fee – see page 122.
Other matters
Discussed the internal audit effectiveness review.
Discussed the roles and structure of the GPE Finance team.
Discussed the outcome of the process to appoint a new
sustainability data assurance provider and the scope of work.
Corporate governance and legal update received from
the General Counsel & Company Secretary and PwC,
including in respect of the Revised Code and ECCTA.
Review of GPE’s Financial Crime, Ethics, Gifts and Hospitality
and Whistleblowing Policies – see page 120.
Reviewed the Audit Committee Terms of Reference.
Reviewed non-audit fees and the Provision of Non-Audit
Services Policy.
Reviewed the Committee’s effectiveness.
Discussed valuer rotation requirements and likely process
and supported CBRE remaining as the Group’s valuer in
the interim period.
Review of half-year results
Met with CBRE to consider the September 2023 valuation.
Met with PwC and management to consider:
– PwC’s independence;
– their review of the September 2023 valuation and the
half-year results announcement;
– significant accounting and key areas of judgement,
including going concern – see page 119;
– the principal and emerging risks, monitoring of
internal controls and risk management processes;
– the half-year results announcement; and
– the relationship between PwC and management,
with feedback provided by PwC without management
present and from management without PwC present.
Other matters
Discussed an update from the General Counsel
on corporate governance and legal developments,
including the ECCTA.
Received an update on supplier payment practices.
Considered the findings from Grant Thornton’s internal
audit review of Information Technology Disaster and
progress against the FY23 internal audit plan.
What we did in relation to the financial year ended 31 March 2024
Review of year-end results
Met with CBRE to consider the March 2024 valuation –
see pages 34 to 36.
Met with PwC and management to review:
– PwC’s audit of the March 2024 valuation –
see pages 34 to 36;
– significant accounting and key areas of judgement,
including going concern and viability work –
see page 119;
– an update on Group tax matters;
– an update on GPE’s supplier payment practices;
– the principal and emerging risks, monitoring of
internal controls and risk management processes –
see pages 74 to 87;
– the year-end results announcement and Annual Report;
– the relationship between PwC and GPE management,
with feedback provided by PwC without management
present.
Other matters
Met with Grant Thornton to receive an update on the
status of the 2024/25 internal audit plan and actions
arising from previous internal audits.
September
February
Annual planning meeting
Met with CBRE to receive a market update ahead of the
half-year valuation.
Met with the external auditor, PwC, and management
to review:
– significant accounting and key areas of judgement –
see page 119; and
– PwC’s 2023/24 audit plan.
Internal audit
Met with the internal auditor, Grant Thornton, to discuss
its findings from its Flex Management Reporting review.
Other matters
Discussed the scope of sustainability data assurance
going forward and the process to appoint a third-party
assurance provider.
Received an update from PwC regarding the latest
developments in audit and corporate governance reforms.
2023
2024
November
May
Governance
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Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report
Our process
The Committee’s Terms of Reference are available on the
Company’s website at www.gpe.co.uk/about-us/governance.
The Committee currently comprises six independent
Non-Executive Directors, namely Emma Woods as Chair,
Nick Hampton, Mark Anderson, Karen Green, Vicky Jarman
and Champa Magesh. Karen Green joined the Board and
the Committee on 1 December 2023, whilst Alison Rose
stepped down from the Board and the Committee on
6 July 2023. Non-Executive Directors who are not members of
the Committee have a standing invitation to attend meetings
of the Committee as appropriate. While not a member,
the Company’s Chair generally attends the meetings
except where his own remuneration is under discussion.
At the request of the Committee, Toby Courtauld, the Chief
Executive, attends Committee meetings where appropriate
and provides input with regard to the achievement of
personal objectives for senior executives. He also attends
discussions on remuneration as considered appropriate
by the Committee, including on new appointments and
promotions and to provide his input on the development
of the Directors’ remuneration policy. The Chief Financial
& Operating Officer attends discussions regarding the
setting of, and performance against, annual bonus targets.
Carrie Heiss, HR Director, attends Committee meetings
where appropriate to present proposals regarding Executive
Director and workforce remuneration and related policies,
to discuss the alignment of remuneration across the
organisation and to voice the perspectives of employees
on relevant matters.
The Committee ensures it seeks independent advice as
appropriate and was advised during the year by independent
remuneration consultants, FIT Remuneration Consultants LLP.
The Committee also has access to the HR Director and General
Counsel & Company Secretary without the Executives present.
Consistent with good practice, no Director or employee is
involved in discussions on their own pay and any decisions
are taken without the affected individual present.
Our approach
The key objectives of the Remuneration Committee
(the Committee) are to ensure that the Executive
Directors are appropriately incentivised and
remuneration arrangements are fully aligned
with the Company’s strategy to generate superior
portfolio and shareholder returns.
As well as being responsible for determining
the remuneration of the Executive Directors, the
Committee is responsible for setting the remuneration
of the Chair of the Board, the members of the Executive
Committee and other senior executives. The Committee
also reviews the broad operation of remuneration
policy and practices for all employees.
The Directors’ remuneration policy (the Policy),
approved at the 2023 AGM, was updated to reflect
the current strategy and wider economic backdrop
with a revised bonus scorecard focusing on the
Company’s key business priorities to drive its strategy,
with this scorecard being applied to all colleagues,
and the previous LTIP being replaced by a restricted
share plan. It is felt that the updated policy better
aligns the whole workforce to the Company’s success.
Remuneration
Committee
Further details regarding Committee
memberships, meetings and attendance
can be found on page 96.
Committee members
Director
Role
Emma Woods
Committee Chair
Nick Hampton
Senior Independent Director
Mark Anderson
Non-Executive Director
Karen Green
Non-Executive Director
Vicky Jarman
Non-Executive Director
Champa Magesh
Non-Executive Director
Employee remuneration and engagement
The Committee applies consistent remuneration
principles for employees across the Group. As part
of its responsibilities, the Committee reviews GPE’s
wider employee remuneration policies and practices
and the alignment of incentives and rewards with
the Company’s culture.
The Committee is advised of pay levels throughout
the Group, and takes into account wider pay and
conditions across the Group when determining the
remuneration of the Executive Directors and other
members of senior management. It specifically approves
the packages of more senior colleagues and is advised
of benchmark pay levels for most roles. As part of the
annual pay review, the Committee receives a report
setting out changes to employee remuneration levels and
proposed discretionary bonus awards. The Committee
also discusses GPE’s gender pay gap statistics alongside
our D&I objectives and related policies.
The Company engages with employees on remuneration
generally, including executive remuneration. In March
2023, the Committee Chair led an interactive all-
employee event to discuss the proposed changes to the
Policy. Employees have since been periodically updated
in the year on the implementation of the Policy and
performance against the bonus scorecard measures.
More broadly, remuneration is regularly discussed with
employees. GPE’s annual review process and how this
links to employees’ remuneration is incorporated into our
new joiner induction process, along with an introduction
to GPE’s all-employee share plan. Briefing sessions are
also held with employees from time to time to discuss
pay policies and the work of the Committee, as well as to
enable employees to find out more about GPE’s pension
scheme and all-employee share plan offer.
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Great Portland Estates plc Annual Report 2024
Clarity
Remuneration
arrangements should be
transparent and promote
effective engagement
with shareholders and
the workforce
The Committee proactively engages with shareholders and their
representative bodies as part of the Policy renewal process. As such, it
engaged with shareholders representing over 73% of the share register as
part of the 2023 Policy review. The Committee is also regularly updated on
developments in market practice and receives reports on pay and conditions
across the business. In March 2023, the Chair of the Committee invited all
staff to attend an interactive event to discuss the planned Policy revisions
and broader remuneration matters. Employees are periodically updated
on implementation of the Policy and performance against the bonus
scorecard measures.
Simplicity
Remuneration structures
should avoid complexity
and their rationale and
operation should be easy
to understand
The Company operates a simple pay model which comprises fixed and
variable remuneration, with the performance conditions for variable elements
clearly communicated to participants. Under the Policy, at least 80% of bonus
measures must be objectively measurable.
The restricted share plan (RSP) provides a simple mechanism for aligning
Executive Director and shareholder interests. The RSP removes the difficult
challenge of setting robust and appropriately challenging longer-term
performance targets in a volatile market, thereby avoiding potentially
unintended remuneration outcomes, and significantly reduces the
maximum pay available to Executive Directors.
Risk
Remuneration
arrangements should
ensure reputational and
other risks from excessive
rewards, and behavioural
risks that can arise from
target-based incentive
plans, are identified
and mitigated
There is broad discretion to reduce variable pay if the Committee does
not consider the formulaic outcome to be appropriate in the circumstances,
and all plans include the ability to operate malus and clawback, where
appropriate. A proportion of Executive Director bonuses is deferred into
shares for three years and post-cessation shareholding guidelines apply
to mitigate the risk of short-termist behaviours.
Predictability
The range of possible
reward values to individual
directors and any other
limits or discretions should
be identified and explained
at the time of approving
the policy
The Policy includes a scenario chart showing potential pay levels on
various assumptions, and all awards are subject to maximum grant levels
as set out in the Policy, together with the discretions set out under ‘Risk’
above. The RSP has increased the predictability of reward values subject
to an overriding discretion to reduce vesting if not considered appropriate
through its underpin.
Proportionality
The link between individual
awards, the delivery of
strategy and the long-term
performance of the
Company should be clear.
Outcomes should not
reward poor performance
The outturn in respect of variable pay is clearly set out in this report on
pages 129 to 135, with payment clearly linked to our strategic and financial
priorities. Pages 17 and 130 set out how the measures under the bonus
scorecard are clearly linked to the Company’s strategy and KPIs. As indicated
under ‘Risk’, the outturn can be reduced by the Committee as appropriate
to ensure that outcomes do not reward poor performance.
Alignment
to culture
Incentive schemes should
drive behaviours consistent
with Company purpose,
values and strategy
Equivalent incentive plans apply to the wider workforce to engender a
high-performance culture. The bonus scorecard is cascaded to all colleagues,
albeit with a higher weighting on personal performance for less senior
colleagues (and with the colleague engagement and diversity elements
excluded for most colleagues to avoid potential for conflicts). All objectives
are linked to the Group’s strategy and KPIs. An individual’s commitment
to GPE’s values and behaviours is also reviewed as part of the personal
performance assessment process.
The RSP clearly aligns Executive Directors’ interests with those of shareholders
by ensuring a focus on delivering the strategy to generate long-term value
for shareholders.
Compliance with the 2018 UK Corporate Governance Code
Throughout the year, the Committee has considered the provisions set out in the 2018 UK Corporate Governance Code
(the Code). In the Committee’s view, it has complied with the provisions of the Code, including those set out in Provision 40
of the Code as set out below.
Governance
125
Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report continued
Dear shareholder
I am pleased to present our Directors’ remuneration
report for the year ended 31 March 2024 (the Report)
on behalf of the Committee. In particular, I want to thank
shareholders for the support shown in approving our revised
2023 Directors’ remuneration policy (the Policy) at our AGM
held on 6 July 2023, with all of the remuneration-related
resolutions receiving over 92% support. Whilst we note that
a minority of shareholders were unable to support the move
to an RSP, and we will continue to engage with shareholders
where appropriate over the three-year life of this Policy to
ensure that they understand its rationale and operation,
we consider the support achieved as endorsing the
approach adopted to date.
The Committee has implemented the Policy during the
year as set out in this Report and no changes to the Policy
are proposed for 2024/25. A full copy of the Policy can be
found on our website at www.gpe.co.uk/investors and
on pages 136 to 146 of last year’s Annual Report.
Key decisions
The Committee has had regard to business performance
alongside the wider context explained below when considering
reward and incentive outcomes. Key Committee decisions
for the year, as more fully described in this Report, include:
– determining annual bonus and Long Term Incentive
Plan (LTIP) outcomes;
– agreeing salary and fee increases for the Executive
Directors and the Chair of the Board below the
all-colleague average increase; and
– setting suitably stretching targets for the 2024/25
annual bonus.
Remuneration outcomes in respect
of the year ended 31 March 2024
As anticipated, real estate markets have continued to be
challenging, with the macro-economic backdrop impacted
by elevated inflation and interest rates. As a consequence,
property valuations reduced by 12.1% on a like-for-like
basis, driven by increased investment yields. This resulted
in a negative Total Accounting Return (TAR) in absolute
terms. While a number of real estate companies are yet
to publish their financial results, we anticipate that our TAR
for the year underperformed the FTSE 350 Real Estate Index
due to the comparatively stronger performance of other
real estate sectors, including student accommodation,
industrial and logistics space. Shareholder returns were
also down, with GPE delivering a Total Shareholder
Return (TSR) of -21.3%.
Despite the challenging macro-economic environment,
GPE has made significant progress against its strategy during
the year, increasing our Flex commitments by over 21%,
committing to our HQ redevelopments at Minerva House,
SE1 and French Railways House & 50 Jermyn Street, SW1 and
progressing our development pipeline in line with our net zero
carbon commitments. We have delivered strong operational
performance, signing £22.5 million of leases in the year with
total rents 9.1% ahead of ERV (estimated rental values set by
CBRE at 31 March 2023). We also completed the acquisitions
of 141 Wardour Street, W1, Bramah House, SE1, the Soho
Square Estate, W1 and exchanged contracts for the
acquisition of The Courtyard, WC1.
We have continued to evolve our strategy in response to market
trends and the changing needs of our customers, people and
wider stakeholders as we focus on our business priorities to
position GPE for success for when markets recover. We have
strengthened our Customer First approach, further developed
our Flex offerings, developed our updated Roadmap to Net
Zero and progressed our diversity and inclusion agenda.
Moreover, we have maintained our financial strength and
capital discipline, with our loan-to-property value ratio
being 32.6% and our liquidity position remains strong, with
£633 million of available cash and undrawn facilities. We have
also maintained the payment of our ordinary dividends.
Taken as a whole, we are well positioned to deliver both
our purpose and long-term shareholder value and, with
the market moving in our favour, to take advantage of
the investment opportunities that are starting to emerge.
Against this backdrop of business performance, the Company’s
variable pay was assessed as set out in the following sections.
Salaries
As explained in last year’s report, for the year commencing
1 April 2023, the average like-for-like all-colleague salary
increase was 5.7%. The Committee continued to focus
increases on the lowest-paid colleagues and increased
Toby Courtauld’s, Nick Sanderson’s and Dan Nicholson’s
salaries by 5%, below the employee average.
Annual Bonus Plan
This was the inaugural year of our new bonus scorecard and
I am delighted with how it has landed in the organisation.
Shareholders will recall that we made the move to a more
target-focused operational scorecard to drive GPE’s
strategy and performance and to ensure that our talented
team is motivated to optimise returns for shareholders
as the economy recovers. Our scorecard is designed to
focus on the Company’s clear priorities. The changes we
made followed both external and internal feedback and
we were mindful of just how important it would be for us
and our shareholders to retain our talent over the next
few years. I’m pleased to report that the new scorecard is
being used as an effective management tool to incentivise
and challenge our people, with progress being discussed
regularly at all-company meetings led by our Chief Executive,
enabling colleagues to really understand the link between
performance and reward.
“I am particularly pleased that
our new bonus scorecard has
been embedded across all levels
within the business as a key tool
for continuous assessment of our
ambition and achievement.”
Emma Woods Chair of the Remuneration Committee
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Great Portland Estates plc Annual Report 2024
As outlined above and in the Chief Executive’s report on
pages 19 and 20, the key scorecard achievements over
the year were:
– our total rent on market lettings in the year beating
ERV by over 9% whilst maintaining a low vacancy rate
at 1.3%, despite the challenging macro-economic
environment;
– committing to over 100,000 square feet of new
Flex space as we expand this area of the business;
– achieving an office customer Net Promoter Score of
+30.2, being (albeit down on last year’s score), ahead
of the office industry average of +6.9, as we continue
to strengthen our approach to customer experience;
– exceeding our energy consumption reduction targets
while ensuring that our new developments remain
on track to being net zero; and
– achieving the vast majority of our planning
milestones in the year, enabling us to progress
our development pipeline.
The business has worked hard to foster an inclusive and
diverse culture. Whilst we have seen progress in many areas,
there is more work do to here and this was reflected in the
outcomes of our culture and diversity targets for the year.
Full details of the bonus outturn, and the linkage of the
targets to our strategic priorities, can be found on page 130.
The bonus outcome for 2023/24 is 63.5% achievement
before the operation of the personal element (which now
applies to a reduced 10% of the total bonus). This resulted
in total payouts for the three Executive Directors being
broadly in line with the prior year at 64.2% for the Chief
Executive and Chief Financial & Operating Officer and
63.7% for the Executive Director.
The Committee considered the bonus outturn against
this wider context and confirmed both that the scorecard
was operating as intended in aligning variable pay to key
milestones and that the outturn should be applied without
the exercise of any discretion. Consistent with the previous
policy, 40% of the achieved bonuses of the Executive
Directors will be deferred into shares in the Company
for three years.
2021 LTIP vesting
While the LTIP has been replaced by the RSP and no further
grants will be made, outstanding awards will continue to run
their course. Performance under the 2021 LTIP is expected
to result in no vesting based on the information available
as at 31 March 2024 (a nil vesting of the TAR measure having
already been confirmed).
Overall outturn
The Committee considered the overall outturn for the year,
with a moderately above target bonus and a zero vest on the
2021 LTIP, to be in line with both the significant progress against
the Board’s strategic objectives (justifying the bonus outturn)
and the shareholder experience (leading to the zero vest of
the LTIP) resulting in the Committee approving this outturn
without the exercise of discretion.
Chief Executive outturn vs max and target opportunity £000
Base salary
Benefits
Pension
Annual bonus
LTIP
2,500
0
1,000
500
1,500
2,000
3,000
4,000
3,500
Achieved
Maximum
Target
Toby Courtauld
Decisions relating to the year to March 2025
Salaries
For the year commencing 1 April 2024, the average all-
colleague salary increase has been reduced from 5.7% last
year to 4.9% (inclusive of an allowance for promotions and
some benchmarking adjustments). However, we remain
mindful that cost of living increases will still be impacting our
lower-paid colleagues the most and so salary increases have
been focused on our lower-paid colleagues who will generally
receive a 5% salary increase, with our Executive Directors
receiving a more modest 2% salary increase.
Annual bonus
The Executive Directors’ bonus opportunity will remain at
150% of salary, with 40% of any bonus earned deferred into
shares for three years through the Company’s Deferred Share
Bonus Plan. The scorecard for 2024/25 will be largely carried
forward although, reflecting our evolving strategic priorities
and our experience of now having operated it for a year,
the following minor changes have been made:
– given our increasing focus on income returns, the Flex
measure will change from a space commitment measure
(with a 5% weighting) to a net operating income measure
(with a higher 10% weighting);
– as we look to take advantage of market conditions,
we have introduced a deployment of capital measure
in place of the previous liquidity measure;
– having progressed our planning targets, our development
measure will focus on achieving key development milestones
in the year; and
– there will be some minor definitional changes to the
NPS metric to capture retail as well as office customers.
As a result, 60% (previously 50%) of the bonus scorecard
will comprise financial measures, as set out on page 136.
Restricted Share Plan (RSP)
The second grant under the RSP will be made in or around
June 2024. Under this grant, the Executive Directors are
expected to again receive an award each over shares worth
150% of salary, which will be subject to assessment against
a performance underpin following the third anniversary of
grant and then subject to a further two-year holding period.
I hope you find this Report clear and informative and I look
forward to receiving your support for the resolution approving
the Report at the 2024 AGM, where I will be available to
engage with shareholders.
Emma Woods
Chair of the Remuneration Committee
22 May 2024
Governance
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Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report continued
Our overarching remuneration policy principles
and a fair and consistent approach
The Executive Directors’ total pay is analysed by looking
at each of the different elements of remuneration, including
salary, benefits, pension, the Annual Bonus Plan and long-
term incentives, to provide the Committee with a view of
total remuneration rather than just the competitiveness
of the individual elements. It is important that the Group’s
remuneration policy reinforces the Company’s purpose,
culture and values, providing effective incentives for
exceptional Group and individual performance. As well as
providing motivation to perform, remuneration plays an
important retention role and needs to be appropriately
competitive without being excessive.
To achieve the aims of the Company’s Policy, the Committee
generally seeks to position fixed remuneration, including
benefits and pension, by reference to the mid-market position,
taking into account the size and complexity of the business
as compared with other peer companies in the sector,
and, using a significant proportion of variable reward,
offers the ability to increase total potential remuneration
for superior performance through the Annual Bonus Plan
and long-term incentives.
The Committee seeks to apply consistent principles
to remuneration across the organisation. Our approach
to salary reviews is to consider each employee’s level
of responsibility, experience, individual performance,
salary levels in comparable companies and the Company’s
ability to pay. Remuneration surveys and meetings
with sector specialists are used, where appropriate,
to establish market rates.
The weighting of the different components of an
employee’s remuneration will vary depending on their
role, responsibilities and seniority, with senior employees
having a higher proportion of their remuneration linked
to variable reward and Company performance. However,
we apply our overarching remuneration principles,
and provide a competitive and consistent remuneration
and benefits package, as appropriate, throughout GPE.
This is made up of the following key components:
Salary
All employees receive a market-competitive base salary reflective of the individual’s role, responsibilities
and experience, which is subject to an annual external benchmarking review for approximately 95%
of our roles.
Executive Directors: same approach.
Benefits
All employees receive market-competitive benefits, including private medical insurance.
Executive Directors: same approach (no car allowance).
Pension
All employees are eligible and encouraged to join the GPE pension scheme to save for their retirement,
with an employer contribution of 15%.
Executive Directors: contribution levels are aligned with the wider workforce at 15%.
All-
employee
share
plans
All employees can join the Company’s Share Incentive Plan, allowing employees to purchase Company
shares in a tax-efficient way and to receive matching shares, thereby encouraging employee share ownership.
63% of GPE’s employees participate in the Share Incentive Plan.
Executive Directors: also eligible to participate.
Annual
Bonus
Plan
All employees participate in the Annual Bonus Plan. All employees are subject to the same measures with
the exception of the employee engagement and diversity measures which will not apply to most colleagues
to avoid conflicts of interest while less senior colleagues have a higher weighting on personal performance.
Executive Directors: have a bonus opportunity of 150% of salary with 40% of any outturn being deferred
into shares for three years.
Restricted
Share Plan
(RSP)
Those able to influence long-term performance, generate significant sustainable returns or managing major
capital budgets may participate in the RSP. RSP awards (like prior LTIP awards) will vest after three years.
Executive Directors: have a larger potential maximum opportunity under the RSP, being eligible to
receive an award of up to 150% of base salary. RSP awards are subject to a five-year release period
(comprising a three-year underpin period followed by a two-year holding period).
128
Great Portland Estates plc Annual Report 2024
This Report sets out how the Policy was applied in 2023/24 and how it will be applied for the forthcoming year. It is divided into
four sections:
Section of Report
Page numbers
Executive Directors’ remuneration for the year ended 31 March 2024
See pages 129 to 135
Executive Directors’ remuneration for the year ending 31 March 2025
See pages 136 and 137
Chair and Non-Executive Directors’ remuneration
See page 138
Other disclosures
See pages 139 to 143
The Company’s auditor has reported on specific sections of this Report and stated, where applicable, that in its opinion those
sections have been properly prepared in accordance with Schedule 8 to the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, as amended. The sections that have been subject to audit are marked with an asterisk (*).
The Policy was approved by shareholders at the 2023 AGM and is available on the Company’s website at www.gpe.co.uk/investors.
Executive Directors’ remuneration for the year ended 31 March 2024
Executive Directors’ single figure table*
Base
salary1
Benefits
Pension2
SIP3
Fixed
Total
Annual
Bonus4
LTIP
Variable
Total
Total8,9
Executive
Directors
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
2024
£000
2023
£000
20245
£000
2023
£000
20246
£000
20237
£000
2024
£000
2023
£000
2024
£000
2023
£000
Toby
Courtauld
679
646
18
16
102
121
4
4
803
787
653
630
–
–
653
630
1,456
1,417
Nick
Sanderson
467
445
19
18
70
83
4
4
560
550
449
439
–
–
449
439
1,009
989
Dan
Nicholson2
380
362
8
6
57
54
4
4
449
426
363
345
–
–
363
345
812
771
1. Please refer to the ‘Salary’ table on page 136 for details of Executive Directors’ annual salaries.
2. Toby Courtauld and Nick Sanderson received a pension allowance of 15% of their basic salary in line with the wider workforce. Dan Nicholson has
received a mix of employer pension contributions and pension allowance of 15% of his basic salary (receiving £10,000 of his total contribution into
a registered pension).
3. The value of the matching shares awarded under the SIP are calculated using the share price on the date the shares were purchased.
4. 40% of the annual bonus will be deferred into shares for three years under the Deferred Share Bonus Plan. Deferred bonus shares are not subject to any
further conditions.
5. The estimated 2024 annual bonus outcome based on information available as at 19 May 2024, with the relative TAR measure to be confirmed following
the publication of results by comparator companies.
6. A nil vesting of the 2021 LTIP awards has been assumed based on the information available as at 19 May 2024.
7. The figures disclosed in the 2023 Annual Report for the 2020 LTIP vesting were based on an estimated nil vesting which was subsequently confirmed.
There was therefore no value attributed to share price appreciation.
8. The single figure for the total remuneration due to the Directors for the year ended 31 March 2024.
9. The aggregate emoluments (being salary/fees, benefits, cash allowances in lieu of pension and bonus) of all Directors for the year ended 31 March 2024
was £3,958,000 (2023: £3,929,000).
Fixed pay:
Taxable benefits*
Benefits principally comprise private medical insurance, membership subscriptions, travel expenses, luncheon vouchers,
the Employee Assistance Programme and entertainment. No individual benefit provided has a value which is significant
enough to warrant separate disclosure.
Pensions*
None of the Executive Directors participate in the Group’s defined benefit final salary pension plan, which was closed to
new entrants in 2002. Each Executive Director’s employer pension contribution rate is 15%, in line with the wider workforce.
All-employee Share Incentive Plan*
In line with the wider workforce, Executive Directors may participate in the GPE Share Incentive Plan, which is an HMRC
tax-advantaged plan. Participants may save up to £150 from their monthly pre-tax salary to purchase shares. For every
share purchased, GPE grants two matching shares. Shares acquired attract dividends paid by the Company, typically
at the half-year and year end.
Governance
129
Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report continued
Variable pay:
Executive Directors’ 2024 bonus outcome*
As explained in the Committee Chair’s statement and last year’s Annual Report, a new bonus scorecard was introduced for
2023/24 as part of the wider Policy renewal to better align with the Company’s strategic priorities and to focus on relative TAR
and key business priorities to drive our financial KPIs.
Key
elements
of strategy
Max.
% of
salary Measured by
Threshold
performance
target
(20% payout)
Maximum
performance
target
(100% payout)
Actual
performance
achieved
Actual
performance
level as a %
of maximum
Bonus receivable (£000)
Toby
Courtauld
Nick
Sanderson
Dan
Nicholson
Market
performance
(20%
weighting)
1
2
3
4
5
6
30%
GPE Relative TAR1 (EPRA
NTA growth + dividends)
per share vs FTSE 350
real estate companies
excluding agencies†
Median
Upper
quartile
Below
median2
(estimated)
0%2
£02
£02
£02
Optimising
financial
performance
(during
downturn)
(30%
weighting –
10% each)
1
2
3
4
5
15%
Rent achieved on market
lettings during year vs ERV
(as per CBRE valuation
at start of year) – ‘%
beat to market rent’†
31 March 2023
ERV
3.5% above
ERV
9.1% above
ERV
100%
£101,799
£70,038
£57,055
15%
Vacancy rate at year end
(including completed
development/refurbished
space during year)†
8%
6%
4.4%4
100%
£101,799
£70,038
£57,055
15%
Maintain appropriate
liquidity
£150m
£350m
£433m5
100%
£101,799
£70,038
£57,055
Transforming
the business
and putting
customers
first
(15%
weighting –
5% each)
2
3
4
5
6
7.5%
Hitting planning
milestones in year
(combination of
planning submissions
and planning approvals
across entire portfolio)
50% of major
and 50% of
minor in-scope
applications
approved
All in-scope
applications
approved
50% of major
and 100%
of minor
applications
approved
50%
£25,449
£17,510
£14,264
7.5%
Commitments to new
Flex space over the year†
30,000 sq ft
100,000 sq ft
102,353 sq ft
100%
£50,899
£35,019
£28,527
7.5%
Market leading office
customer NPS†
+20 points
>+40 points
+30.2 points
60.8%
£30,947
£21,292
£17,344
Delivering
our Roadmap
to Net Zero
(15%
weighting –
7.5% each)
1
5
6
11.25% Reduction in energy
consumption (targets
set each year against
Roadmap)†
191 kWh/m2
<174 kWh/m2
149.7 kWh/m2 100%
£76,349
£52,529
£42,791
11.25% All new developments
to be net zero or on
track to be net zero†
50%
100%
83.33% 6
75%
£57,262
£39,397
£32,093
Personal
and business
culture
(20%
weighting
– 10% for
personal
objectives,
5% and 5%)
15%
Personal
objectives (reduced
from historic 15%)
Partial
achievement
of personal
objectives
Exceeding
personal
objectives
See pages
131 and 132
Toby Courtauld
70%
Nick Sanderson
70%
Dan Nicholson
65%
£71,259
£49,027
£37,085
7.5%
Maintaining and
nurturing a positive and
inclusive culture (measured
through employee
engagement and inclusion
index survey scores)
Score between
65% and 70%
Score above
80%
74%
50%
£25,450
£17,510
£14,263
7.5%
Achievement
against gender and
diversity targets3
Progress made
against both
targets
Both targets
achieved
Progress
made against
both targets
20%
£10,180
£7,004
£5,705
Total
% of max
£653,192
64.2%
£449,402
64.2%
£363,237
63.7%
† On a straight-line basis.
1 Denotes strategic priorities as set out on pages 14 and 15.
1. As with the previous arrangements, any dividends will be deducted from the base figure from the point of distribution (as it is not realistic to
deliver growth after capital has been repaid to shareholders), except where reflected in some other way such as through a share consolidation.
2. Estimated based on information available as of 19 May 2024. The actual outcome will be confirmed in next year’s Annual Report.
3. Objectives are to achieve (i) 40% women in senior leadership roles; and (ii) 20% of management roles to be filled by colleagues identifying with
an Office for National Statistics ethnic minority category, each by March 2025. Targets for March 2024: (i) 34% and (ii) 17%.
4. The actual vacancy rate at the year-end was 1.3%. To ensure that the measure operated as intended when the targets were set, the Committee
added back schemes which had been scheduled to be completed in the period, increasing this figure to 4.4%.
5. Excludes £200 million undrawn short-term facility arranged in the year to ensure that the measure operated as intended when the targets were set.
6. A strict interpretation of the performance condition implied a 100% vesting, however the Committee felt that this was not intended and calculated
the outturn with New City Court, for which original planning was declined, regarded as a non-achievement.
130
Great Portland Estates plc Annual Report 2024
Executive Directors’ personal objectives*
Under the new bonus system for the 2023/24 bonus year, the weighting on personal objectives was reduced from 15% to 10%
of the total opportunity. These objectives, approved by the Committee, are designed to focus on the delivery of the strategic
priorities and the successful management of risk for both 2023/24 and the longer term. Following consideration of achievement
against the Executive Directors’ personal objectives set at the beginning of the year as listed below, the Committee awarded
Toby Courtauld, Nick Sanderson and Dan Nicholson 80%, 80% and 75% respectively for performance against personal objectives
but lowered the bonus payout by 10% each at the request of the Executive Directors in recognition of the challenging market
conditions and to align with the shareholder experience.
Measure
Score
Key achievements
Execute approved
strategy and operational
excellence
CEO
45%/60%
CF&OO
45%/60%
ED
40%/55%
Shared
– Determined and executed major capital allocation activities, including new development
and refurbishment commitments.
– Drove growth of Flex space to more than 500,000 sq ft.
– Grew Fully Managed annualised net operating income to over £8.5m.
– Delivered two Flex acquisitions and one HQ acquisition.
– Exceeded leasing targets; beating both void and ERV targets.
– Refreshed Net Promoter Score and new customer services KPIs.
CEO
– Presented and secured Board approval for a return to targeted acquisitions strategy.
– Flex, Customer and Digital/technology strategies all addressed through team changes.
– Drove sustainability strategy with notable circular economy successes at 2 Aldermanbury Square,
French Railways House & 50 Jermyn Street and Minerva House. Oversaw development of
Our Roadmap to Net Zero v.2.0.
CF&OO
– Led debt financing activity.
– Worked with CEO on ‘Customer First’ strategy implementation.
– Oversaw growth in net operating income from Fully Managed spaces.
– Oversaw delivery of £1.5 million of social value under our Social Impact Strategy.
ED
– Ensured that sustainability remained central to operational performance with use
of new materials and driving down carbon footprint of development schemes.
– Planning permission secured at Minerva House and French Railways House & 50 Jermyn Street.
– Oversaw completion of two property sales (Brook Street and Poland Street) as well as
headlease regears.
Governance
131
Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report continued
Measure
Score
Key achievements
Develop the team
CEO
25%/30%
CF&OO
27%/30%
ED
25%/30%
Shared
– Delivered restructure of the leadership team to meet new strategy.
– Identified and developed potential successors, conducted Company-wide Talent Review.
CEO
– Ensuring the team is well positioned to lead the refocus of our strategy on targeted acquisitions.
– Development of direct reports through mentoring and coaching.
CF&OO
– Completed roll out of Customer First training throughout the business to customer partners.
– Restructure of Customer Experience, marketing and finance teams to align with stakeholder
needs.
– Elevated senior employees into new roles with Customer Experience and Flex.
– Focus on development and growth for high-potential leadership successors.
ED
– Provided support and commercial oversight and leadership to the Portfolio Management,
Investment, Development and Project Management Teams.
– Restructured health & safety function.
Champion our purpose,
live our values
CEO
10%/10%
CF&OO
8%/10%
ED
10%/15%
Shared
– Maintained strong employee engagement scores.
– Demonstrated role model behaviours.
– Embedded the ethos of sustainable spaces into all our processes.
– Diversity and inclusion initiatives progressed. Stretch target of 60% exceeded with 66.6% female
hires into roles above £75,000. Ensured that all recruitment shortlists have equal gender splits.
CEO
– Provided inspirational leadership throughout a significant period of change during the
restructuring process.
– Delivered regular internal communications to ensure clarity of strategic vision and performance.
CF&OO
– Role model behaviours and provided strong support to rising leaders of the business.
– Implemented means of publishing diversity representation statistics on a quarterly basis.
ED
– Increased leadership and oversight of direct reports while promoting empowerment.
Total Performance
Assessment
CEO
80%/100%
CF&OO
80%/100%
ED
75%/100%
Total Bonus
Assessment
(following a 10% reduction
to the performance
assessment at the request
of the Executive Directors,
as explained above)
CEO
70%/100%
CF&OO
70%/100%
ED
65%/100%
While each of the Executive Directors was separately assessed, they inevitably had a number of common objectives so the
above table identifies both individual and shared objectives. In each case, their contribution to the delivery of those objectives
was considered.
Executive Directors’ personal objectives continued
132
Great Portland Estates plc Annual Report 2024
Executive Directors’ LTIPs*
Anticipated vesting of 2021 LTIP awards
The table below sets out the anticipated vesting of the 2021 LTIP awards in June 2024, together with indicative payouts for the
Executive Directors. The anticipated value of these awards at vesting reflects the disclosure in the single figure table on page 129.
Anticipated vesting of LTIP awards granted in the year ended 31 March 2022, vesting in the year ending 31 March 2025, is included
in the 2024 single figure table.
Key elements
of strategy
% of award
Measured by
Threshold
performance
target (20%)
Maximum
performance
target (100%)
Estimated
performance
Estimated
vesting level as at
19 May 2024
as a percentage
of maximum by
vesting date1
Shareholder
value
50%
Relative Total Shareholder Return
(based on a three-year
performance period)
Median
Upper
quartile
Below
Median
0%
Absolute
performance
50%
Absolute Total Accounting Return
(based on a three-year
performance period)
3% p.a.
7% p.a.
-5.5% p.a.
(actual)
0%
Total
(estimated)
0%
1. Toby Courtauld and Nick Sanderson’s 2021 LTIP is due to vest on 7 June 2024. For the TAR target, the performance period for the 2021 awards is the three-year
period to 31 March 2024. For the TSR element, the vesting period is the three-year period from the award date (7 June 2021) and compares the Company’s TSR
to that of the constituents, at the date of grant, of the FTSE 350 Real Estate Index excluding agencies.
Confirmed vesting of 2020 LTIP awards
The figures provided in last year’s Annual Report for the 2020 LTIP awards were disclosed on an estimated basis. The table below
sets out the confirmed performance outcomes of the 2020 LTIP awards that resulted in a 0% vesting following the expiry of the
three-year performance period on 29 July 2023.
Key elements
of strategy
% of award
Measured by
Threshold
performance
target (20%)
Maximum
performance
target (100%)
Performance
Confirmed
percentage
of maximum
at end of
performance
period
(29 July 2023)
Shareholder
value
50%
Relative Total Shareholder Return
(based on a three-year
performance period)
Median
Upper
quartile
20.8th
percentile
0%
Absolute
performance
50%
Total Accounting Return
(based on a three-year
performance period)
868p
925p
795p
0%
Total
0%
Number of shares at the end of the performance period for 2020 LTIP awards
No. of shares awarded
as nil cost options
% overall vesting
No. of shares under
option at the end of the
performance period1
Toby Courtauld
317,906
0
0
Nick Sanderson
218,722
0
0
1. The LTIP awards made in 2020 are subject to a five-year release period, comprising a three-year performance period (to 29 July 2023) followed by
a further two-year holding period. No share options will become exercisable on the fifth anniversary of the date of award because no options vested
after the three-year performance period.
Governance
133
Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report continued
Outstanding share awards*
The following tables provide details of outstanding share awards under the LTIP, RSP, DSBP and the performance measures that
apply to the awards. All awards were granted in the form of nil cost options.
Executive Director
Date of grant
Basis of award
Face value
of award
made
£000
Number
of shares
under
award1,2
Percentage
of award
receivable for
threshold
performance
End of
performance/
underpin period
Performance
measures
Toby Courtauld
LTIP
7 June 20213
300% of salary
1,873
255,587
20%
6 June 2024
TSR – 50%
TAR Target – 50%
27 May 2022
300% of salary
1,939
300,391
20%
26 May 2025
TSR – 50%
TAR Target – 50%
DSBP
2 May 2021
40% of bonus
88
12.410
n/a
n/a
n/a
27 May 2022
40% of bonus
211
32,652
n/a
n/a
n/a
2 June 2023
40% of bonus
252
51,486
n/a
n/a
n/a
RSP
7 July 2023
150% of salary
1,018
241,024
n/a
6 July 2026
n/a – subject
to underpin5
Total
893,550
Nick Sanderson
LTIP
7 June 20213
300% of salary
1,289
175,845
20%
6 June 2024
TSR – 50%
TAR Target – 50%
27 May 2022
300% of salary
1,334
206,671
20%
26 May 2025
TSR – 50%
TAR Target – 50%
DSBP
2 May 2021
40% of bonus
64
9,075
n/a
n/a
n/a
27 May 2022
40% of bonus
145
22,465
n/a
n/a
n/a
2 June 2023
40% of bonus
175
35,832
n/a
n/a
n/a
RSP
7 July 2023
150% of salary
700
165,826
n/a
6 July 2026
n/a – subject
to underpin5
Total
615,714
Dan Nicholson4
LTIP
27 May 20223
300% of salary
1,087
168,357
20%
26 May 2025
TSR – 50%
TAR Target – 50%
DSBP
27 May 2022
40% of bonus
54
8,377
n/a
n/a
n/a
2 June 2023
40% of bonus
138
28,190
n/a
n/a
n/a
RSP
7 July 2023
150% of bonus
571
135,084
n/a
6 July 2026
n/a – subject
to underpin5
Total
340,008
1. For all awards, the face value is calculated on the five-day average share price prior to the date of grant.
For the 2021 LTIP, this was up to and including 4 June 2021, being £7.33. For the 2022 LTIP, this was up to and including 26 May 2022, being £6.46. For the
2023 RSP, this was up to and including 6 July 2023, being £4.22. For the 2021 DSBP, this was up to and including 1 May 2021, being £7.09. For the 2022 DSBP,
this was up to and including 26 May 2022, being £6.455. For the 2023 DSBP, this was up to and including 1 June 2023, being £4.896.
2. In addition, a cash sum equivalent to the value of dividends on the number of plan shares which vest in respect of the period from the award date
to the expiry of the applicable two-year holding period will be payable at the end of that period.
3. The estimated overall outcome for the 4 June 2021 LTIP as at 19 May 2024 is 0%. This would equate to nil shares vesting for each of Toby Courtauld
and Nick Sanderson.
4. Dan Nicholson joined the Board on 6 September 2021 and was entitled to his first LTIP and DSBP awards in 2022.
5. The underpin is the same as that set out on page 136, i.e. the vesting is subject to a robust underpin allowing the Committee to reduce the vesting of awards
in whatever circumstances it considers to be appropriate. The Committee will also specifically consider reducing vesting levels in the event of a breach of
the financial covenants of the Group’s principal debt facilities; failure to make satisfactory progress in delivering our Sustainability of Intent; or there being
material damage to the reputation of the Company.
2021 and 2022 LTIP awards – performance measures*
Performance measure over three years
% of award
Vesting
level
Start of
measurement period
20%
Straight-line vesting
between these points
100%
2021 LTIP Award
Total Accounting Return
50%
3% p.a.
7% p.a.
1 April prior to grant date
TSR against constituents of FTSE 350
Real Estate Sector (excluding agencies)
50%
Median
Upper
quartile
Grant date
2022 LTIP Award
Total Accounting Return
50%
3% p.a.
8% p.a.
1 April prior to grant date
TSR against constituents of FTSE 350
Real Estate Sector (excluding agencies)
50%
Median
Upper
quartile
Grant date
134
Great Portland Estates plc Annual Report 2024
Executive Director remuneration from other roles
Executive Directors are able to accept external Board appointments with the consent of the Board. Any fees received by
an Executive Director for such an external appointment can be retained by the individual. Toby Courtauld is a Non-Executive
Director of Liv-ex Limited, for which he received no remuneration during the year. He also received no remuneration for
serving as a Director of the New West End Company.
Nick Sanderson is a Trustee of the Outward Bound Trust, for which he received no remuneration during the year. Dan Nicholson
is a Non-Executive Director of Bioregional Homes Limited, for which he also received no remuneration during the year.
Statement of Executive Directors’ shareholdings and share interests*
Executive Directors are required to hold a minimum of 300% of base salary in shares. The table below sets out their holdings
against the requirement and their beneficial and conditional ownership as at 31 March 2024. Dan Nicholson joined the Board
on 6 September 2021. As with the other Executive Directors, Dan will be required to build up a shareholding of 300% of base
salary and to retain all shares that are vested to him, net of any tax liabilities, until the requirement is satisfied.
Director
Beneficial ownership
Conditional ownership6
Shareholding
requirement
met9,10
Comparator
to 2023
Number
of shares
owned1
SIP
Matching
shares
subject to
forfeiture
Total
beneficial
ownership
2,3,4,5
LTIP/RSP
subject to
performance
conditions/
underpins
LTIP awards
which have
met their
performance
conditions
and remain
subject to a
holding
period7
Deferred
Share
Bonus
Plan8
Total
beneficial
and
conditional
ownership
as at
31 March
2024
Total
beneficial
and
conditional
ownership
as at
31 March
2023
Toby
Courtauld
1,399,022
2,018
1,401,040
797,002
18,686
96,548
2,313,276
2,337,379
835% – Yes
1,112%
Nick
Sanderson
281,531
2,016
283,547
548,342
12,856
67,372
912,117
927,891
271%11
326%
Dan
Nicholson
20,556
1,564
22,120
303,441
–
36,567
362,128
177,787
42%12
1%
1. Excludes SIP shares that are subject to forfeiture.
2. Holdings are calculated based on the share price as at 31 March 2024 of £3.878.
3. Beneficial interests include shares held directly or indirectly by connected persons.
4. The Executive Directors did not exercise any share options in the year ended 31 March 2024. Between 1 April 2024 and 19 May 2024, Toby Courtauld and
Dan Nicholson each acquired 37 Partnership shares and 74 conditional Matching shares and Nick Sanderson acquired 38 Partnership Shares and 76 Matching
Shares under the SIP. In addition, under the SIP, 40 Matching shares vested to each of Toby Courtauld and Nick Sanderson. Otherwise there were no changes
in their shareholdings during that period.
5. 40% of the Executive Directors’ annual bonuses for the year ended 31 March 2024 will be deferred into shares for three years under the Deferred Share
Bonus Plan (DSBP). The number of shares awarded will be disclosed following the awards, in the 2025 Annual Report. In respect of their annual bonuses
for the year ended 31 March 2023, Toby Courtauld, Nick Sanderson and Dan Nicholson were granted DSBP awards over 51,486, 35,832 and 28,190
shares respectively.
6. LTIP, RSP and DSBP awards are granted in the form of nil cost options. A nil vesting of the 2021 LTIP awards has been assumed based on the information
available as at 19 May 2024.
7. Consistent with best practice, estimated after-tax shares that will be retained after the cessation of the two-year holding period are included in
the shareholding requirement (53% of shares retained).
8. Consistent with best practice, estimated after-tax shares retained are included in the shareholding requirement (53% of shares retained).
9. Post-cessation shareholding guidelines came into effect following the approval of the Policy at the 2020 AGM. Executive Directors are expected
to retain the lower of actual shares held at cessation and shares equal to 300% of salary for two years post-cessation. Shares retained following
vesting of LTIP, RSP and DSBP awards granted after the 2020 AGM will be held in via escrow/a nominee arrangement to enable enforcement of the
post-cessation guidelines.
10. Executive Directors are required to hold 300% of their base salary and are expected to retain the after-tax shares received on the exercise of awards
until they have acquired the necessary shares to meet their shareholding requirement.
11. The fall in share price over the year resulted in Nick Sanderson’s holding falling moderately below the guideline level. He will not sell any shares other
than to meet tax liabilities until this requirement is met.
12. Dan Nicholson joined the Board with effect from 6 September 2021 and is working towards his minimum shareholding requirement.
Governance
135
Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report continued
Executive Directors’ remuneration for the year ending 31 March 2025
Statement of implementation of Policy for the year ending 31 March 2025
The Policy and its implementation for the Executive Directors for the forthcoming financial year is summarised below.
For information on the Chair of the Board and Non-Executive Directors, please refer to page 138.
Salary
Executive Director
Year ending
31 March 2025
£0001
Year ended
31 March 2024
£0001
Base salary
increase
Toby Courtauld
692
679
2%
Nick Sanderson
476
467
2%
Dan Nicholson
388
380
2%
1. Rounded to the nearest £1,000.
Executive Directors have received an increase in salary below the all-colleague average increase of 4.9%. In reviewing
the salaries of the Executive Directors, the Committee has also taken account of both the individual’s and the Company’s
performance and the employment conditions and salary increases awarded to employees across the Group.
Pension and benefits
There have been no changes to the benefits and pension provision for the Executive Directors.
Bonus for the year ending 31 March 2025
The target and maximum annual bonus potentials will remain unchanged at 75% and 150% of salary respectively for the
Executive Directors. As with the existing Policy, under the proposed new Policy, 40% of any annual bonus outcome will be
deferred into shares for three years under the Deferred Share Bonus Plan.
The scorecard measures will be consistent with those for 2023/24 except that, as explained on page 127, the Flex measure will
change from a space commitment to a net operating income measure, a deployment of capital measure will replace the
liquidity measure, the development measure will focus on achieving key development milestones in the year and there will be
some minor definitional changes to the NPS metric to capture retail as well as office customers. Furthermore, the weighting
of measures will be adjusted, increasing the total weightings on financial measures from 50% to 60% as follows:
2024/25 Bonus weightings
Financial measures
Total weighting
Non-financial measures
Total weighting
Relative TAR
20%
Development milestones
5%
Rent achieved vs ERV
10%
Customer NPS
5%
Vacancy rate
10%
Energy consumption
5% (previously 7.5%)
Deployment of capital
10%
Net zero developments
5% (previously 7.5%)
Flex net operating income
10% (replaces 5% Flex space measure)
Personal objectives
10%
Positive and inclusive culture
5%
Diversity targets
5%
Total
60%
40%
The Committee is of the opinion that, given the commercial sensitivity around GPE’s business, disclosing precise targets for the Annual
Bonus Plan in advance would not be in the best interests of shareholders or the Company. Objectives, performance achieved and
awards made will be published at the end of the performance period so shareholders can fully assess the basis for any payouts.
Restricted Share Plan awards for the year ending 31 March 2025
Performance measure over three years
Award as %
of base salary
Subject to underpins as described in full in the Remuneration Policy
150%
The maximum potential award for the 2024 Restricted Share Plan Award is 150% of base salary, being 50% of the 300% of base
salary awarded under historic LTIPs. This conversion rate is reflective of common market practice. The awards, granted in the
form of nil cost options, will be subject to the underpins set out in the Policy. Alongside the operation of a robust underpin allowing
the Committee to reduce the vesting of awards in whatever circumstances it considers to be appropriate, the Committee will
also specifically consider reducing vesting levels in the event of a breach of the financial covenants of the Group’s principal
debt facilities; failure to make satisfactory progress in delivering our Sustainability Statement of Intent; or there being material
damage to the reputation of the Company. Following a three-year vesting period, the 2024 RSP awards will be subject to a
two-year holding period, whereby participants will not be permitted to exercise any performance-vested awards until the
fifth anniversary of the award date. The holding period will generally continue to operate post-cessation of employment.
136
Great Portland Estates plc Annual Report 2024
Chief Executive £000
818
818
818
818
1,038
2,894
519
1,038
2,375
1,038
2,500
0
1,000
500
1,500
2,000
3,000
3,500
Maximum
On target
Minimum
818
1,557
3,313
1,038
Maximum with 50%
share price increase
Executive Director £000
2,500
0
1,000
500
1,500
2,000
3,000
3,500
Fixed
Annual bonus
RSP
Maximum with 50%
share price increase
458
458
458
458
582
1,622
291
582
1,331
582
458
873
1,913
582
Maximum
On target
Minimum
Chief Financial & Operating Officer £000
2,500
0
1,000
500
1,500
2,000
3,000
3,500
Maximum with 50%
share price increase
570
570
570
570
714
1,998
357
714
1,641
714
570
1,071
2,355
714
Maximum
On target
Minimum
Executive Director remuneration scenarios based on performance
The charts below set out the potential remuneration receivable by Executive Directors for minimum (where performance is below
threshold for variable awards), on-target and maximum performance. Potential reward opportunities are based on the Policy
and applied to salaries for the year ending 31 March 2025. It should be noted that the projected values exclude the impact of any
dividend accrual.
Governance
137
Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report continued
Chair and Non-Executive Directors’ remuneration
Single figure table annual fees for year ended 31 March 2024*
This section of the Report contains details of how the Policy for the Chair and Non-Executive Directors was implemented
during the financial year ended 31 March 2024.
Name
Fees
Benefits
Totals
2024
2023
2024
2023
2024
2023
Richard Mully
256
244
21
21
258
246
Mark Anderson
75
72
–
–
75
72
Karen Green2
25
–
–
–
25
–
Nick Hampton3,4
85
74
–
–
85
74
Vicky Jarman4
82
77
–
–
82
77
Champa Magesh5
75
48
26
–
77
48
Alison Rose7
20
72
–
–
20
72
Emma Woods8
82
77
–
–
82
77
Total
700
664
4
2
704
666
1. Richard Mully’s benefits of less than £2,000 related to reimbursed travel (and related tax) for GPE meetings.
2. Karen Green joined the Board and each of its Committees on 1 December 2023.
3. Nick Hampton became Senior Independent Director from 30 March 2023.
4. Vicky Jarman succeeded Nick Hampton as Chair of the Audit Committee from 7 July 2022.
5. Champa Magesh joined the Board and each of its Committees on 1 August 2022.
6. Champa Magesh’s benefits of less than £2,000 related to reimbursed travel (and related tax) for GPE meetings.
7. Alison Rose stepped down from the Board and its Committees on 6 July 2023.
8. Emma Woods became Chair of the Remuneration Committee from 7 July 2022.
Shareholdings*
31 March 2024 31 March 2023
Richard Mully
60,000
31,379
Mark Anderson
2,451
2,451
Karen Green
–
–
Nick Hampton
2,500
2,500
Vicky Jarman
2,708
2,708
Champa Magesh
–
–
Alison Rose
–
–
Emma Woods
–
–
There were no changes in the shareholdings of the Chair and Non-Executive Directors in office between 1 April 2024 and 19 May 2024.
The reported figures reflect the position at the stated dates or date of appointment if later/date of retirement if earlier.
Annual fees for year ending 31 March 2025
The table below sets out the fee rates for the Chair of the Board and Non-Executive Directors for the year ending 31 March 2025.
The fees of the Chair and the base fees of the Non-Executive Directors have been increased by approximately 2%, being below
the average of 4.9% awarded to colleagues. Fee levels for the Chair and Non-Executive Directors are assessed having regard
to individual responsibility and fees paid to Non-Executive Directors in the wider FTSE 250.
1 April 2023 to
31 March 2024
£
From
1 April 2024
(per annum)
£
Chair fee
256,000
261,100
Non-Executive Director base fee
61,500
62,700
Senior Independent Director fee
10,000
10,000
Audit or Remuneration Committee Chair
12,500
12,500
Audit or Remuneration Committee Member
5,000
5,000
Nomination Committee Member
3,350
3,350
138
Great Portland Estates plc Annual Report 2024
Other disclosures
Percentage change in Board remuneration vs Group employees
The table below shows the percentage change in remuneration/fees for the years ended 31 March 2021, 31 March 2022,
31 March 2023 and 31 March 2024 for each of the Directors who served during the year ended 31 March 2024 (including salary,
taxable benefits and annual bonus) compared to that for an average Group employee (noting that the Group has been used
rather than parent company on the basis that there are no Company employees).
Name
Base salary/fees
Taxable benefits10
Bonus11
Change
Change
Change
2020/21
2021/22
2022/23
2023/24
2020/21
2021/22
2022/23
2023/24
2021/22
2022/23
2023/24
Average employee1
+5.1%
+3.2%
+6.2%
+6.6%
+4.1%
-20,1%
-0.3%
+15.2%
+71.3%
+13.5%8
+12.4%
Executive Directors
Toby Courtauld
+1.5%
+1.5%
+3.5%
+5.0%
-3.6%
-38.5%
0%
+12.5%
+139.5%
+19.5%
+3.7%
Nick Sanderson
+1.5%
+1.5%
+3.5%
+5.0%
-22.7%
-12.5%
+18.6%
+5.6%
+125.5%
+20.9%
+2.3%
Dan Nicholson2
n/a
n/a
80.1%
+5.0%
n/a
n/a
+100%
+33.3%
n/a
+155.6%
+5.2%
Non-Executive
Directors
Richard Mully (Chair)
-5.0%
0%
3.8%
+4.9%
-100%
+100%
+100%
+0%
n/a
n/a
n/a
Mark Anderson3
n/a
0%
75.6%
+4.2%
n/a
–
–
–
n/a
n/a
n/a
Karen Green4
n/a
n/a
n/a
-%
n/a
–
–
–
n/a
n/a
n/a
Nick Hampton5,6
-4.2%
0%
-1.3%
+14.9%
-100%
–
–
–
n/a
n/a
n/a
Vicky Jarman6
-2.9%
0%
+10.0%
+6.5%
–
–
–
–
n/a
n/a
n/a
Champa Magesh7
–
–
0%
+56.3%
–
–
–
+100%
n/a
n/a
n/a
Alison Rose8
-2.9%
0%
+2.9%
-72.2%
–
–
–
–
n/a
n/a
n/a
Emma Woods9
n/a
n/a
+541.7
+6.5%
n/a
–
–
–
n/a
n/a
n/a
1. Based on all employees who were employed for the full consecutive financial years being compared. Average employee pay has been calculated
on a full-time equivalent basis.
2. Dan Nicholson joined the Group in September 2021, part-way through the financial year. His remuneration in 2021/22 reflected this period of service,
whereas his remuneration from 2022/23 was for a full year’s service, explaining his large percentage increase over the two years.
3. Mark Anderson joined the Board on 1 September 2021.
4. Karen Green joined the Board on 1 December 2023.
5. Nick Hampton become Senior Independent Director on 30 March 2023.
6. Vicky Jarman succeeded Nick Hampton as Chair of the Audit Committee from 7 July 2022.
7. Champa Magesh joined the Board from 1 August 2022.
8. Alison Rose stepped down from the Board on 6 July 2023.
9. Emma Woods joined the Board on 1 February 2022 and became Chair of the Remuneration Committee from 7 July 2022.
10. Taxable benefits from 31 March 2023, in line with the single figure table on page 129, have been updated to include: private medical insurance,
membership subscriptions, travel expenses, luncheon vouchers, Employee Assistance Programme and entertainment. Prior years included death
in service, life assurance and permanent health insurance which are not taxable benefits in line with HMRC guidelines.
11. Executive Directors have a higher proportion of their remuneration linked to variable pay and Company performance for greater alignment with shareholders.
The percentage change in bonus payments will therefore fluctuate according to variable pay outcomes each year. The payout for the 2020/21 annual
bonus financial measures was nil, resulting in the higher percentage change in bonuses for 2022/23.
Governance
139
Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report continued
Ten-year Chief Executive remuneration package
The table below shows the Chief Executive’s (Toby Courtauld throughout) remuneration package over the past ten years,
together with incentive payout/vesting as compared to the maximum opportunity.
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Single figure of total remuneration (£000)
3,689
2,650
1,420
1,174
905
1,599
984
1,425
1,417
1,456
Bonus payout (as % of
maximum opportunity)
48%
100%
20%
37%
19%
31%
23.9%
56.3%
65%
64.2%
Long-term incentive vesting rates
(as % of maximum opportunity)
81%
58%
33%
10%
0%
28.8%
0%
7.4%
0%2
0%1
1. Based on estimated performance as at 19 May 2024.
2. This reflects the actual LTIP performance outcome of 0% as referred to in the single figure table on page 129. The figure provided in last year’s Annual Report,
of 0%, was disclosed on an estimated basis.
Total Shareholder Return performance
The following graph shows the Total Shareholder Returns for the Company for each of the last ten financial years compared
to the FTSE 350 Real Estate Index (excluding agencies). The Company is a constituent of the FTSE 350 Real Estate Index and
the Committee considers this benchmark to be the most appropriate for illustrating the Company’s performance.
Total Shareholder Return over ten years (indexed)
31 March
2014
31 March
2015
31 March
2016
31 March
2017
31 March
2018
31 March
2019
31 March
2020
31 March
2024
31 March
2023
31 March
2022
31 March
2021
Great Portland Estates plc
Source: Refinitiv Datastream.
FTSE 350 Real Estate – Sector (Excluding Agencies)
200
175
150
125
100
75
50
CEO pay ratio
Although the Company has fewer than 250 employees and is not, therefore, subject to any legal requirement to include
such ratios, the Committee considers inclusion of the ratio to be reflective of best practice and includes this on a voluntary
basis. The Committee notes the general preference of institutional shareholders for companies to use statutory Method A
and prepared the calculations on that basis. However, for a company with a relatively small number of employees (134 as
at 31 March 2024), the ratios can be unduly impacted by joiners and leavers who may not participate in the full suite of
remuneration arrangements in the year of joining or leaving. Accordingly, the Committee modified the statutory basis to
exclude any employee not employed throughout the financial year. In all other respects, Method A was followed so the
following tables refer to modified Method A being adopted.
The Company believes that a bias towards variable pay for senior executives is the most appropriate means of both incentivising
the senior executives and aligning them with shareholders. The ratios will therefore fluctuate according to variable pay
outcomes each year. Variable pay outcomes were broadly consistent in 2022/23 and 2023/24 and the ratios have therefore
remained broadly consistent in these years. Overall, the outcomes and the resulting ratios are considered appropriate.
140
Great Portland Estates plc Annual Report 2024
Ratio of the pay of the Chief Executive to that of the UK lower quartile, median and upper quartile employees
Year
Method
Pay ratio
25th percentile
50th percentile (median)
75th percentile
31 March 2024
Modified Method A
17.3:1
12.1:1
6.5:1
31 March 2023
Modified Method A
18.0:1
12.6:1
6.7:1
31 March 2022
Modified Method A
19.9:1
15.4:1
7.2:1
31 March 2021
Modified Method A
15.1:1
11.2:1
5.8:1
31 March 2020
Modified Method A
24.1:1
18.2:1
8.7:1
Additional information on the ratio of the pay of the Chief Executive to that of employees
– Employee pay data is based on full-time equivalent pay for UK employees as at 31 March 2024. For each employee,
total pay is calculated in line with the single figure methodology (i.e. fixed pay accrued during the financial year
and the value of performance-based incentive awards vesting in relation to the performance year).
– Employee pay data excludes leavers and joiners to help ensure data is on a like-for-like basis. No other calculation
adjustments or assumptions have been made.
– Chief Executive pay is as per the single total figure of remuneration for 2024, as disclosed on page 129.
– The 2024 ratio will be re-stated in the 2025 Directors’ remuneration report (if required) to take account of the final
LTIP vesting data for eligible employees and for the Chief Executive.
The Committee has considered the pay data for the three individuals identified for 2024 and believes that it fairly reflects
pay at the relevant quartiles among the UK employee population. Each of the individuals identified was a full-time employee
during the year and received remuneration in line with the Policy. The Company employs a highly skilled and experienced
workforce which leads to a narrower CEO ratio than at many other listed companies with a different employee base. The ratios
reflect this and are felt appropriate in this context. This year, there was no LTIP vesting and, in a year in which the LTIP did vest,
the ratio would widen given the greater focus on variable pay for more senior levels.
Salary and total remuneration used to calculate the pay ratio
Chief Executive
£000
25th percentile
£000
50th percentile (median)
£000
75th percentile
£000
Total salary
679
58
76
130
Total remuneration (single figure)
1,456
84
120
224
Employee Share Trust
Upon the vesting of share awards, shares used to satisfy awards under the LTIP, RSP and Deferred Share Bonus Plan are
transferred out of the Great Portland Estates plc LTIP Employee Share Trust (the Trust), a discretionary trust established
to facilitate the operation of the Company’s share plans. The shares to satisfy vested awards have been purchased by the
Trustees of the Trust in the open market. The number of shares held by the Trust as at 31 March 2024 was 887,159 (2023: 877,159).
Dilution
The Company currently funds the Trustees to purchase all of the shares required to satisfy awards under the Company’s share
plans and no shares have been issued to satisfy any grants made in the last ten years. However, if the Company decided to issue
new shares to meet these awards, the Company would operate all of its share incentive arrangements within The Investment
Association (IA) Guidelines on dilution. The following table sets out the level of dilution against the IA limits for all share plans
and discretionary plans in respect of the outstanding awards should the Company issue shares rather than use purchased
shares held in Trust.
Maximum
As at 31 March 20241
10% dilution in ten years (all plans)
1.23%
5% dilution in ten years (discretionary plans)
1.28%
1. This figure shows the number of shares required to satisfy all outstanding awards as at 31 March 2024 as a percentage of the Company’s issued share
capital were these to be satisfied by the issue of new shares. This does not include vested awards that have been satisfied using market purchased shares.
Governance
141
Annual Report 2024 Great Portland Estates plc
Directors’ remuneration report continued
Relative importance of spend on pay
The table below sets out the relative importance of spend on pay in 2023 and 2024:
Relative importance of spend on pay £m
Overall spend on pay
Overall spend on dividend
2023
2024
2023
2024
+18.5%
27.6
32.7
0%
31.9
31.9
35
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
Committee advisers
The Committee was advised during the year by FIT Remuneration Consultants LLP (FIT Rem) as independent remuneration
consultants. FIT Rem, which was appointed by the Committee in August 2014 following a review of advisers, attends Committee
meetings and provides advice on remuneration for the Executive Directors, analysis on all elements of the Directors’
remuneration policy and regular market and best practice updates.
FIT Rem reports directly to the Committee and does not provide any other services to the Company.
The Committee is satisfied that the advice received from FIT Rem is independent and objective as FIT Rem complies with
the Code of Conduct for Remuneration Consultants (which can be found at www.remunerationconsultantsgroup.com)
and provides no other advice to the Group. FIT Rem’s fees for the year to 31 March 2024 were £68,127.50 (2023: £112,056)
which were charged on the basis of the time spent advising the Company.
Independent and objective performance certificates are provided to the Committee by Aon Hewitt on measurement
of TSR performance targets for the LTIP. Fees paid to Aon Hewitt in respect of this were £10,750. Aon Hewitt also provides
gender pay gap assistance and salary benchmarking to the Group and fees paid in relation to these totalled £15,000
and £1,750 respectively.
142
Great Portland Estates plc Annual Report 2024
Statement of voting at the AGM
The following table shows the results of the remuneration related resolutions at the 2023 AGM:
It is the Committee’s policy to consult with major shareholders prior to any major changes to its Executive remuneration.
For
Against
Abstentions
2023 Directors’ remuneration report
197,428,528 (96.51%)
7,135,959 (3.49%)
3,186
2023 Directors’ remuneration policy
189,336,232 (92.56%)
15,228,255 (7.44%)
3,186
Consideration of shareholder views
When determining remuneration, the Committee takes into account the guidelines of investor bodies and shareholder views.
The Committee is always open to feedback from shareholders on remuneration policy and arrangements, and commits to
undertaking shareholder consultation in advance of any significant changes to the remuneration policy.
The Policy was subject to thorough consultation with our major shareholders and the main proxy voting advisers ahead of being
approved by shareholders at the 2023 AGM.
Service agreements and payments for loss of office/payments to former Directors*
The policy of the Company is to have service contracts for Executive Directors with notice periods of one year. It is sometimes
necessary when recruiting a new Executive Director to give a service contract with an initial term of up to 18 months, in which
case a 12-month notice period may be given no earlier than six months from the start date of the contract.
Non-Executive Directors, who have letters of appointment, are subject to annual re-election under the Company’s Articles
of Association and have a notice period of three months by either party. They are not eligible for payment in lieu of notice
or any other payment on termination.
The following table sets out the dates of each of the Executive Directors’ service agreements and their unexpired term, the dates
of the Non-Executive Directors’ letters of appointment and the date on which the Non-Executive Director is next subject to
reappointment or re-election.
Executive
Date of service agreement
Unexpired term (months)
Toby Courtauld
18 March 2002 (amended 2017)
12
Nick Sanderson
7 June 2011 (amended 2017)
12
Dan Nicholson
30 July 2021
12
Non-Executive
Date of appointment letter
Date when next subject to appointment or re-election
Richard Mully
12 October 2016
4 July 2024
Karen Green1
15 June 2023
4 July 2024
Nick Hampton
28 September 2016
4 July 2024
Vicky Jarman
22 January 2020
4 July 2024
Mark Anderson
30 July 2021
4 July 2024
Emma Woods
25 January 2022
4 July 2024
Champa Magesh
6 June 2022
4 July 2024
1. Karen Green was appointed to the Board on 1 December 2023 and will be subject to election at the next AGM on 4 July 2024.
No Directors received termination payouts or payments for loss of office in respect of the year and no former Director received
any relevant payments.
This Report will be submitted to shareholders for approval at the AGM to be held on 4 July 2024.
Approved by the Board on 22 May 2024 and signed on its behalf by:
Emma Woods
Chair of the Remuneration Committee
22 May 2024
Governance
143
Annual Report 2024 Great Portland Estates plc
Report of the Directors
Strategic Report
The Group’s Strategic Report on pages 01 to 88 includes
the Company’s business model and strategy, the principal
risks and uncertainties facing the Group and how these
are managed and mitigated, an indication of likely future
developments in the Company and details of important
events since the year ended 31 March 2024.
The purpose of the Annual Report is to provide information
to the members of the Company, as a body. The Company,
its Directors, employees, agents or advisers do not accept
or assume responsibility to any other person to whom this
document is shown or into whose hands it may come and
any such responsibility or liability is expressly disclaimed.
The Annual Report contains certain forward-looking
statements with respect to the operations, performance
and financial condition of the Group. By their nature,
these statements involve uncertainty since future events
and circumstances can cause results and developments
to differ from those anticipated. The forward-looking
statements reflect knowledge and information available
at the date of preparation of this Annual Report. Nothing in
this Annual Report should be construed as a profit forecast.
Results and dividends for the year
The Group’s results for the year are set out on pages 148 to 178.
An interim dividend of 4.7 pence per share (2023: 4.7 pence)
was paid on 4 January 2024, and the Directors propose to
pay a final dividend of 7.9 pence per share on 8 July 2024
to shareholders on the register of members as at the close
of business on 31 May 2024. This makes a total of 12.6 pence
per share (2023: 12.6 pence) for the year ended 31 March 2024.
Directors
Biographical details of the current Directors of the
Company are shown on pages 94 and 95. Alison Rose
also served as a Director during the year under review,
stepping down from the Board on 6 July 2023.
In accordance with the UK Corporate Governance Code,
all the current Directors will retire, and those who wish
to continue to serve will offer themselves for election
or re-election at the forthcoming Annual General
Meeting (AGM).
Directors’ shareholdings
The interests of the Directors of the Company (and of their
connected persons) in the shares of the Company, which
have been notified to the Company in accordance with
the UK Market Abuse Regulation, are set out in the Directors’
remuneration report on pages 135 and 138. The Directors’
remuneration report also sets out details of any changes
in those interests between 31 March 2024 and 19 May 2024.
Directors’ indemnities and insurance
On 14 September 2007, an indemnity was given by the
Company to the Directors in terms which comply with
company law. The indemnity was in force during the
year and remains in force at the date of this Report
of the Directors.
The Company maintains directors’ and officers’ liability
insurance and pension trustee liability insurance, both
of which are reviewed annually.
Directors’ powers
The powers of the Directors are contained in the Company’s
Articles of Association. These include powers, subject to relevant
legislation, to authorise the issue and buyback of the Company’s
shares by the Company, subject to authority being given
to the Directors by the shareholders in a general meeting.
Appointment and replacement of Directors
The rules about the appointment and replacement of Directors
are contained in the Company’s Articles of Association.
Under the Articles of Association, every Director who held office
on the date seven days before the date of notice of the AGM
shall retire from office. A retiring Director shall be eligible for
re-election at the AGM, and a Director who is re-elected will
be treated as continuing in office without a break. This is in line
with the UK Corporate Governance Code, which recommends
that all Directors should be subject to annual re-election.
Changes to the Articles of Association must be approved
by the Company’s shareholders in accordance with
legislation in force from time to time.
Corporate governance statement
The information fulfilling the requirements of the corporate
governance statement can be found in this Report of the
Directors and on pages 89 to 143, all of which are incorporated
into this Report of the Directors by reference.
Political donations
It is the Company’s policy not to make political donations
or undertake any activities incurring political expenditure.
Annual General Meeting
Details of the Company’s AGM can be found in the Notice of AGM
2024, which will be made available on the Company’s website at
www.gpe.co.uk/investors/shareholder-information/agmgm
Additional disclosures
Disclosures required by Schedule 7, Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations
2008 (as amended), to the extent not already disclosed
or referred to in this Report of the Directors, can be found
on the following pages, all of which are incorporated into
this Report of the Directors by reference:
Page/s
Financial instruments
154, 171 to 173
Greenhouse gas emissions,
energy consumption and
energy efficiency action
37 to 62
Engagement with suppliers,
customers and others
39 to 41, 48 to 51, 62,
69 to 72 and 99 to 103
Research and development
01, 08, 14, 22 to 25, 26,
27, 39 to 42, 69 to 70
Disclosures required by the Financial Conduct Authority’s
Listing Rule 9.8.4R can be found on the following pages:
Page/s
Capitalised interest
158 and 163
Waiver of dividends
145
The Directors’ responsibilities statement is on page 146 and is
incorporated into this Report of the Directors by reference.
The ‘Other information’ found on pages 194 to 203 is also
incorporated into this Report of the Directors by reference.
144
Great Portland Estates plc Annual Report 2024
Significant shareholdings
As at 31 March 2024, the Company had been notified, in
accordance with the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules (DTR 5), of the following
interests in the voting rights in its ordinary share capital:
Number of
voting rights1
%1
Nature of
holding1
Norges Bank
Investment
Management
32,829,313
12.93
Direct
T. Rowe Price
Associates, Inc.
27,888,682
10.99
Indirect
BlackRock, Inc.
20,088,428
2,638,337
7.91
1.03
Indirect
Financial
instruments
KKR Investment
Management LLC
13,579,569
5.35
Indirect
1. As at date of notification.
In the period from 31 March 2024 to 19 May 2024, the Company
received a further notification from BlackRock, Inc. disclosing
that its interests in voting rights in the Company through indirect
holdings and holdings of financial instruments had increased
to 21,297,445 (8.38%) and 4,062,147 (1.59%) respectively.
Information provided to the Company under the Financial
Conduct Authority’s Disclosure Guidance and Transparency
Rules is publicly available via the regulatory information
service and on the Company’s website.
Share capital and control
As at 31 March 2024, the issued share capital of the Company
was 253,867,911 (2023: 253,867,911) ordinary shares of 154/19 pence
each, all fully paid up and listed on the London Stock Exchange.
At the 2023 AGM, shareholders authorised the Company to
make market purchases of up to 38,054,799 ordinary shares
of 155/19 pence each, representing 14.99% of the issued share
capital of the Company as at 29 May 2023, such authority
to expire at the earlier of the conclusion of the 2024 AGM
or 1 October 2024. No shares were purchased under that
authority during the financial year. The Company is seeking
to renew the authority at the forthcoming AGM, within the
limits set out in the Company’s Notice of AGM 2024.
There are no restrictions on transfer or limitations on the
holding of the ordinary shares. None of the shares carry
any special rights with regard to the control of the Company.
There are no known arrangements under which financial
rights are held by a person other than the holder of the
shares and no known agreements on restrictions on share
transfers and voting rights. The Great Portland Estates plc
LTIP Employee Share Trust (the Trust) is an employee share
scheme which holds ordinary shares in the Company on trust
for the benefit of employees within the Group. The Trustee of
the Trust has the power to exercise all the rights and powers
(including rights with regard to control of the Company)
incidental to, and to generally act in relation to, the ordinary
shares subject to the Trust in such manner as the Trustee in
its absolute discretion thinks fit as if it were absolutely entitled
to those ordinary shares. The Trustee has waived the right
to receive dividends on the shares held in the Company.
Change of control
The Company has a number of unsecured borrowing
facilities provided by various lenders. These facilities generally
include provisions that may require any outstanding borrowings
to be repaid or the alteration or termination of the facilities
upon the occurrence of a change of control of the Company.
The Company’s Restricted Share Plan, Long Term Incentive
Plan, Deferred Share Bonus Plan, Restricted Share Plan
and Annual Bonus Plan contain provisions relating to the
vesting of awards in the event of a change of control.
Going concern
The Group’s business activities, together with the factors
affecting its performance, the impact of recent macro-
economic uncertainty and weak UK growth, are set out in
the Strategic Report on pages 01 to 88. Details of the finances
of the Group, including its strong liquidity position, attractively
priced borrowing facilities and favourable debt maturity profile,
are set out in ‘Our financial results’ on pages 30 to 33 including
‘Our capital strength’ on page 32 and in notes 9, 16 and 17
of the financial statements on pages 152 to 178.
The Directors have reviewed the current and projected financial
position of the Group, making reasonable assumptions about
future trading performance, with particular focus on macro-
economic conditions in which the Group is operating, including
weak UK growth, the ongoing economic disruption from
geopolitical tensions, a high inflationary environment and
elevated interest rates. This included a going concern scenario
to consider the impact of market disruption on the Group’s cash
balances, its capital commitments, its debt maturity profile,
including undrawn facilities and the long-term nature of customer
leases. The going concern scenario did not include the proceeds of
the intended rights issue. The Directors also conducted extensive
stress testing, including sensitising significant increases in the
cost of development to meet sustainability requirements as
detailed further in the viability statement. Further information
on the assumptions contained in the going concern scenario is
on page 88. On the basis of this review, and after making due
enquiries, the Directors have a reasonable expectation that the
Company and the Group have adequate resources to continue in
operational existence for a period of at least 12 months from the
date of approval of the financial statements. Accordingly,
they continue to adopt the going concern basis in preparing
the Annual Report and financial statements.
Viability statement
The Company’s viability statement is on page 88.
Events after the balance sheet date
In April 2024, the Group exchanged contracts to buy
The Courtyard, WC1 for £10.4 million of cash and through a
property exchange of 95/96 New Bond Street for £18.2 million.
At the reporting date, the acquisition had not yet completed.
In addition, the Group’s £175.0 million 2.15% private placement
notes 2024 were repaid on 22 May 2024.
Statement as to disclosure of information
to the auditor
So far as the Directors who held office at the date of approval
of this Report of the Directors are aware, there is no relevant audit
information of which the auditor is unaware and each Director has
taken all steps that he or she ought to have taken as a Director to
make himself or herself aware of any relevant audit information
and to establish that the auditor is aware of that information.
This confirmation is given and should be interpreted in accordance
with the provisions of section 418 of the Companies Act 2006.
By order of the Board
Darren Lennark
General Counsel & Company Secretary
Great Portland Estates plc
Company number: 596137
22 May 2024
Governance
145
Annual Report 2024 Great Portland Estates plc
Directors’ responsibilities statement
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable
law and regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance
with UK-adopted international accounting standards and
the Company financial statements in accordance with
United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, comprising FRS 101
“Reduced Disclosure Framework”, and applicable law).
Under company law, the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
Company and of the profit or loss of the Group for that period.
In preparing the financial statements, the Directors are
required to:
– select suitable accounting policies and then apply
them consistently;
– state whether applicable UK-adopted international
accounting standards have been followed for the group
financial statements and United Kingdom Accounting
Standards, comprising FRS 101 have been followed
for the company financial statements, subject to any
material departures disclosed and explained in the
financial statements;
– make judgements and accounting estimates that are
reasonable and prudent; and
– prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the group
and company will continue in business.
The Directors are responsible for safeguarding the assets of
the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and
other irregularities.
The Directors are also responsible for keeping adequate
accounting records that are sufficient to show and explain
the Group’s and Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Group and Company and enable them to ensure that
the financial statements and the Directors’ remuneration
report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and accounts,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders to
assess the Group’s and Company’s position and performance,
business model and strategy.
Each of the Directors, whose names and functions are listed
in pages 94 to 95 confirm that, to the best of their knowledge:
– the Group financial statements, which have been prepared
in accordance with UK-adopted international accounting
standards, give a true and fair view of the assets, liabilities,
financial position and loss of the Group;
– the Company financial statements, which have been
prepared in accordance with United Kingdom Accounting
Standards, comprising FRS 101, give a true and fair view
of the assets, liabilities and financial position of the
Company; and
– the Strategic Report includes a fair review of the
development and performance of the business and
the position of the Group and Company, together with
a description of the principal risks and uncertainties
that it faces.
This responsibility statement was approved by the Board
of Directors and is signed on its behalf by:
Toby Courtauld
Nick Sanderson
Chief Executive
Chief Financial & Operating Officer
22 May 2024
22 May 2024
146
Great Portland Estates plc Annual Report 2024
In this section:
148
Group income statement
148
Group statement of comprehensive income
149
Group balance sheet
150
Group statement of cash flows
151
Group statement of changes in equity
152
Notes forming part of the
Group financial statements
179
Independent auditors’ report
187
Company balance sheet
188
Company statement of changes in equity
189
Notes forming part of the
Company financial statements
Financial
statements
We are putting health and
wellbeing front and centre
We are in the age of the conscious consumer. Therefore, it’s more important than
ever for businesses to consider its customers, as customers will make decisions on
whom they work for and where they work, based on social and environmental issues.
A sustainable building should contribute to the wellbeing of our customers and the
local community, supporting healthier, happier and more productive lives.
Financial statements
147
Annual Report 2024 Great Portland Estates plc
Notes
2024
£m
2023
£m
Revenue
3
95.4
91.2
Cost of sales
4
(33.3)
(32.2)
62.1
59.0
Administration expenses
5
(42.3)
(38.3)
Expected credit losses
(0.1)
(0.8)
Development management losses
–
(0.1)
Operating profit before deficit from investment property,
revaluation movements and results of joint ventures
19.7
19.8
Deficit from investment property
10
(267.3)
(145.0)
(Deficit)/surplus on revaluation of other investments
13
(0.2)
0.1
Share of results of joint ventures
11
(46.7)
(33.4)
Operating loss
(294.5)
(158.5)
Finance income
6
6.1
6.0
Finance costs
7
(17.7)
(11.5)
Fair value loss on derivatives
17
(1.7)
–
Loss before tax
(307.8)
(164.0)
Tax
8
–
0.1
Loss for the year
(307.8)
(163.9)
Basic loss per share
9
(121.7p)
(64.8p)
Diluted loss per share
9
(121.7p)
(64.8p)
Basic EPRA earnings per share
9
7.1p
9.5p
Diluted EPRA earnings per share
9
7.1p
9.5p
All results are derived from continuing operations in the UK and are attributable to ordinary equity holders.
Group statement of comprehensive income
For the year ended 31 March 2024
Notes
2024
£m
2023
£m
Loss for the year
(307.8)
(163.9)
Items that will not be reclassified subsequently to profit and loss
Actuarial gain on defined benefit scheme
26
0.1
0.3
Deferred tax on actuarial gain on defined benefit scheme
8
–
(0.1)
Total comprehensive expense for the year
(307.7)
(163.7)
Group income statement
For the year ended 31 March 2024
148
Great Portland Estates plc Annual Report 2024
Notes
2024
£m
2023
£m
Non-current assets
Investment property
10
1,911.0
1,922.2
Investment in joint ventures
11
491.3
538.8
Property, plant and equipment
12
2.0
3.5
Pension asset
26
4.9
4.1
Derivative financial instruments
17
0.4
–
Other investments
13
2.4
1.8
2,412.0
2,470.4
Current assets
Trade and other receivables
14
24.9
15.8
Cash and cash equivalents
22
22.9
19.4
47.8
35.2
Current assets held for sale
Investment property held for sale
10
18.2
–
18.2
–
Total assets
2,478.0
2,505.6
Current liabilities
Interest-bearing loans and borrowings
16
(175.0)
–
Trade and other payables
15
(76.2)
(56.8)
Corporation tax
8
(0.3)
–
(251.5)
(56.8)
Non-current liabilities
Interest-bearing loans and borrowings
16
(565.4)
(458.5)
Head lease obligations
18
(74.1)
(66.7)
Occupational lease obligations
19
(1.0)
(2.0)
Provisions in respect of warranties on sold buildings
(3.0)
(3.0)
(643.5)
(530.2)
Total liabilities
(895.0)
(587.0)
Net assets
1,583.0
1,918.6
Equity
Share capital
20
38.7
38.7
Share premium account
46.0
46.0
Capital redemption reserve
326.7
326.7
Retained earnings
1,166.0
1,504.4
Investment in own shares
21
5.6
2.8
Total equity
1,583.0
1,918.6
Basic net assets per share (diluted)
9
624p
757p
EPRA NTA (diluted)
9
624p
757p
Approved by the Board on 22 May 2024 and signed on its behalf by:
Toby Courtauld
Nick Sanderson
Chief Executive
Chief Financial & Operating Officer
Group balance sheet
At 31 March 2024
Financial statements
149
Annual Report 2024 Great Portland Estates plc
Notes
2024
£m
2023
£m
Operating activities
Operating loss
(294.5)
(158.5)
Adjustments for non-cash items
23
313.4
175.1
(Increase)/decrease in receivables
(8.6)
5.3
Increase/(decrease) in payables
4.1
(6.1)
Cash generated from operations
14.4
15.8
Interest paid
(22.3)
(17.6)
Interest received
0.3
0.1
Cash flows used in operating activities
(7.6)
(1.7)
Investing activities
Distributions from joint ventures
–
7.5
Repayment of loans by joint ventures
6.7
9.0
Investment in joint ventures
(0.1)
–
Purchase of other investments
(0.8)
(0.7)
Development of investment property
(121.7)
(80.5)
Purchase of investment property
(128.3)
(39.9)
Purchase of plant and equipment
(0.1)
(0.2)
Sale of properties
12.6
217.4
Cash flows (used in)/generated from investing activities
(231.7)
112.6
Financing activities
Revolving credit facility repaid
16
(275.4)
(387.0)
Revolving credit facility drawn
16
308.4
314.0
Term loan drawn
16
248.0
–
Purchase of derivative
17
(2.1)
–
Payment of lease obligations
(3.4)
(3.3)
Dividends paid
24
(32.7)
(31.9)
Cash flows generated from/(used in) financing activities
242.8
(108.2)
Net increase in cash and cash equivalents
3.5
2.7
Cash and cash equivalents at 1 April
19.4
16.7
Cash and cash equivalents at 31 March
22
22.9
19.4
Group statement of cash flows
For the year ended 31 March 2024
150
Great Portland Estates plc Annual Report 2024
Group statement of changes in equity
For the year ended 31 March 2024
Notes
Share
capital
£m
Share
premium
account
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Investment
in own
shares
£m
Total
equity
£m
Total equity at 1 April 2023
38.7
46.0
326.7
1,504.4
2.8
1,918.6
Loss for the year
–
–
–
(307.8)
–
(307.8)
Actuarial gain on defined benefit scheme
26
–
–
–
0.1
–
0.1
Deferred tax on defined benefit scheme
–
–
–
–
–
–
Total comprehensive expense for the year
–
–
–
(307.7)
–
(307.7)
Employee incentive plan charges
21
–
–
–
–
4.0
4.0
Dividends to shareholders
24
–
–
–
(31.9)
–
(31.9)
Transfer to retained earnings
21
–
–
–
1.2
(1.2)
–
Total equity at 31 March 2024
38.7
46.0
326.7
1,166.0
5.6
1,583.0
Notes
Share
capital
£m
Share
premium
account
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Investment
in own
shares
£m
Total
equity
£m
Total equity at 1 April 2022
38.7
46.0
326.7
1,697.9
3.6
2,112.9
Loss for the year
–
–
–
(163.9)
–
(163.9)
Actuarial gain on defined benefit scheme
26
–
–
–
0.3
–
0.3
Deferred tax on defined benefit scheme
–
–
–
(0.1)
–
(0.1)
Total comprehensive expense for the year
–
–
–
(163.7)
–
(163.7)
Employee Long-Term Incentive Plan charge
21
–
–
–
–
1.3
1.3
Dividends to shareholders
24
–
–
–
(31.9)
–
(31.9)
Transfer to retained earnings
21
–
–
–
2.1
(2.1)
–
Total equity at 31 March 2023
38.7
46.0
326.7
1,504.4
2.8
1,918.6
Group statement of changes in equity
For the year ended 31 March 2023
Financial statements
151
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements
1 Material accounting policies
Basis of preparation
Great Portland Estates plc is a public company limited by
shares incorporated and domiciled in the United Kingdom
(England and Wales). The address of the registered office
is given on page 202. The financial statements have been
prepared in accordance with United Kingdom adopted
international accounting standards and the requirements
of the Companies Act 2006 as applicable to companies
reporting under those standards.
The financial statements have been prepared on the historical
cost basis, except for the revaluation of properties and
certain financial instruments which are held at fair value.
The consolidated financial statements, including the results
and financial position, are expressed in sterling (£), which is
the presentation currency of the Group.
The Directors have considered the appropriateness of
adopting the going concern basis in preparing the financial
statements for the year ended 31 March 2024, with particular
focus on the impact of the macro-economic conditions in
which the Group is operating. The Directors also considered
the Group’s net current liability position as at 31 March 2024,
which is primarily driven by the maturity in May 2024 of a
£175 million private placement note (see note 16). The Directors’
assessment is based on the next 12 months of the Group’s
financial forecasts from the date of approval of the annual
report, including a going concern scenario which included
the following key assumptions:
– a 14% decline in the valuation of the property portfolio; and
– a 35% decline in earnings before interest and tax.
The going concern scenario did not include the proceeds
of the intended rights issue and demonstrates that the
Group over the next 12 months:
– has sufficient liquidity to fund its ongoing operations;
– is operating with significant headroom above its Group
debt financing covenants;
– property values would have to fall by 18% before breach
(or 34% from 31 March 2024 values);
– earnings before interest and tax would need to fall by 42%
before breach (or 63% from 31 March 2024 levels); and
– has sufficient liquidity to continue its operations on repayment
of the Group’s £175 million private placement notes, that
mature in May 2024, as were repaid on 22 May 2024.
The Directors also conducted extensive stress testing, sensitising
the potential impact of climate change as detailed further
in the viability statement as well as the impact of removing
non-committed disposal proceeds and capital expenditure.
Based on these considerations, together with available market
information and the Directors’ knowledge and experience of
the Group’s property portfolio and markets, the Directors have
adopted the going concern basis in preparing the accounts
for the year ended 31 March 2024. The Group has adopted
a number of alternative performance measures, see note 9
for further detail.
Critical accounting judgements and key sources
of estimation uncertainty
In the process of preparing the financial statements, the
Directors are required to make certain judgements, assumptions
and estimates. Not all of the Group’s accounting policies
require the Directors to make difficult, subjective or complex
judgements or estimates. Any estimates and judgements made
are continually evaluated and are based on historical experience
and other factors, including expectations of future events
that are believed to be reasonable under the circumstances.
Although these estimates are based on the Directors’ best
knowledge of the amount, event or actions, actual results
may differ from those estimates.
No critical judgements have been made.
The following is intended to provide an understanding of
the estimates that management consider critical because
of the level of complexity, judgement or estimation involved
in their application and their material impact on the
financial statements.
Key source of estimation uncertainty:
investment property portfolio valuation
The valuation to determine the fair value of the Group’s
investment properties is prepared by its external valuer.
The valuation is based upon a number of assumptions and
estimations, including future rental income, anticipated
capital expenditure, including future development costs and
an appropriate discount rate. The valuer also makes reference
to market evidence of transaction prices for similar properties.
Information about the valuation techniques, significant
assumptions and associated key unobservable inputs
sensitivity disclosures are disclosed in note 10. An adjustment
to any of these assumptions could lead to a material change
in the property valuation. For the current year and prior year,
the Directors adopted the valuation without adjustment
– further information is provided in the accounting policy
for investment property and note 10.
New accounting standards
In the current year, the Group has applied a number of
amendments to IFRSs that are mandatorily effective for an
accounting period that begins on or after 1 January 2024.
Their adoption has not had any material impact on the
disclosures or on the amounts reported in these financial
statements. These new standards and amendments are
listed below:
– IFRS 17 – Insurance contracts;
– Disclosure of accounting policies amendments to IAS 1
and IFRS Practice Statement 2;
– Amendments to IAS 8 – Accounting policies – definition
of accounting estimates;
– Amendments to IAS 12 – Income taxes – deferred tax
relating to assets and liabilities arising from a single
transaction; and
– OECD Pillar Two Rules (out of scope).
At the date of authorisation of these financial statements,
the Group has not applied the following new and revised
IFRSs that have been issued but are not yet effective:
152
Great Portland Estates plc Annual Report 2024
1 Material accounting policies continued
– Amendments to IAS 1 – Presentation of financial
statements – classification of liabilities as current or
non-current and non-current liabilities with covenants;
– Amendments to IFRS 16 – Leases – lease liability in a sale
and leaseback;
– IFRS 18 – Presentation and Disclosure in Financial Statements;
– Amendments to IAS 7 and IFRS 7 – supplier finance
arrangements; and
– Amendments to IFRS 10 and IAS 28 – sale or contribution
of assets between an investor and its associate or
joint venture.
The Directors do not expect that the adoption of the standards
listed above will have a material impact on the financial
statements of the Group in future periods, with the exception of
IFRS 18, where the Directors are assessing its potential impact.
Basis of consolidation
The Group’s financial statements consolidate the financial
statements of the Company and all its subsidiary undertakings
for the year ended 31 March 2024. Subsidiary undertakings
are those entities controlled by the Group. Control exists
when the Company is exposed, or has rights, to variable
returns from its involvement with the entity and has the ability
to affect those returns through its power over the investee.
Revenue
Gross rental income comprises rental income and premiums
on lease surrenders on investment properties for the year,
exclusive of service charges receivable, on a straight-line
basis. Initial direct costs incurred in arranging a lease are
added to the carrying value of investment properties and
are subsequently recognised as an expense over the lease
term on the same basis as the lease income.
Lease incentives, including rent-free periods and payments
to customers, are allocated to the income statement on
a straight-line basis over the lease term or on another
systematic basis, if applicable. The value of resulting accrued
rental income is included within the respective property,
with the aggregate cost of the incentive recognised as
a reduction in rental income on a straight-line basis over
the term of the lease.
Revenue from Fully Managed spaces is split between an
amount attributable to the rent on a fitted basis and services
income as set out in the lease agreement, which is based
on stand-alone selling prices. Where the lease agreement
does not provide an attribution, the Group splits the revenue
based on the ERV of the fitted rent, which represents the
stand-alone selling price. The rent is recognised in gross rental
income (see above) and the services income is recorded
over the period when the services are provided and benefit
the customer.
The Group’s Flex Partnerships represent leases with third-party
operators where the rent payable is calculated by reference
to the profitability of the space under management. The rent
is recognised in gross rental income (see above).
Service charge income is recorded over the period when
the services are provided and benefit the customer.
Cost of sales
Service charge expenses represent the costs of operating
the Group’s portfolio and are expensed as incurred.
Fully Managed service costs represent the costs of operating
the Group’s Fully Managed spaces and are expensed as incurred.
Other property expenses represent irrecoverable running
costs directly attributable to specific properties within
the Group’s portfolio. Costs incurred in the improvement
of the portfolio which, in the opinion of the Directors,
are not of a capital nature are written-off to the income
statement as incurred.
Administration expenses
Costs not directly attributable to individual properties
are treated as administration expenses.
Share-based payments
The cost of granting share-based payments to employees
and Directors is recognised within administration expenses
in the income statement. The Group has used the stochastic
model to fair value LTIP grants, which is dependent upon
factors including the share price, expected volatility and
vesting period. The fair value of the RSP is based on the share
price at grant date. The resulting fair value is amortised
through the income statement over the vesting period.
The charge is recognised over the vesting period and reversed
if it is likely that any non-market-based performance or service
criteria will not be met. Any cost in respect of share-based
payments relating to the employees of a subsidiary company
is recharged accordingly.
Investment property
Both leasehold and freehold investment properties and
investment properties under development are professionally
valued on a fair value basis by qualified external valuers
and the Directors must ensure that they are satisfied that
the valuation of the Group’s properties is appropriate for
inclusion in the accounts without adjustment. The valuation
of the property portfolio reflects its fair value taking into
account the market view of all relevant factors, including
the climate-related risks associated with the properties.
This includes the impact of expected regulatory changes.
The valuations have been prepared in accordance with the
current versions of the RICS Valuation – Global Standards
(incorporating the International Valuation Standards (IVS))
and the UK national supplement (the Red Book) and have
been primarily derived using comparable recent market
transactions on arm’s length terms.
For investment property, this approach involves applying
market-derived capitalisation yields to current and market-
derived future income streams with appropriate adjustments
for income voids arising from vacancies or rent-free periods.
These capitalisation yields and future income streams are
derived from comparable property and leasing transactions
and are considered to be the key inputs in the valuation.
Other factors that are taken into account in the valuations
include the tenure of the property, tenancy details, non-payment
of rent, planning, building and environmental factors that
might affect the property.
Financial statements
153
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
1 Material accounting policies continued
An investment property will be classified as held for sale where
it is available for immediate sale in its present condition and
the sale is highly probable.
In the case of investment property under development, the
approach applied is the ‘residual method’ of valuation, which is
the investment method of valuation as described above with a
deduction for the costs necessary to complete the development,
together with an allowance for the remaining risk.
The Group recognises sales and purchases of property when
control passes on completion of the contract. Gains or losses
on the sale of properties are calculated by reference to the
carrying value at the end of the previous year, adjusted
for subsequent capital expenditure.
Lease obligations
Where the Group is a lessee, a right of use asset and lease
liability are recognised at the outset of the lease. The lease
liability is initially measured at the present value of the
lease payments based on the Group’s expectations of the
likelihood of the lease term. The lease liability is subsequently
adjusted to reflect an imputed finance charge, payments
made to the lessor and any lease modifications.
The right of use asset is initially measured at cost, which
comprises the amount of the lease liability and direct costs
incurred, less any lease incentives received by the Group.
The Group has two categories of right of use assets: those
in respect of head leases related to its leasehold properties and
an occupational lease for its head office. The right of use asset
in respect of head leases is classified as investment property
and is added to the carrying value of the leasehold investment
property. The right of use asset in respect of its occupational
leases is classified as property, plant and equipment and is
subsequently depreciated over the length of the lease.
Depreciation
No depreciation is provided in respect of freehold investment
properties and leasehold investment properties. Plant and
equipment is held at cost less accumulated depreciation.
Depreciation is provided on plant and equipment, at rates
calculated to write off the cost, less residual value prevailing
at the balance sheet date of each asset evenly over its
expected useful life, as follows:
Fixtures and fittings – over three to five years.
Leasehold improvements – over the term of the lease.
Joint ventures
Joint ventures are accounted for under the equity method
where, in the Directors’ judgement, the Group has joint
control of the entity. The Group’s level of control in its joint
ventures is driven both by the individual agreements which
set out how control is shared by the partners and how that
control is exercised in practice. The Group balance sheet
contains the Group’s share of the net assets of its joint
ventures. Balances with partners owed to or from the Group
by joint ventures are included within investments. The Group’s
share of joint venture profits and losses are included in the
Group income statement in a single line. All of the Group’s
joint ventures adopt the accounting policies of the Group
for inclusion in the Group financial statements. There have
been no new joint ventures during the year and no changes
to any of the agreements in place.
Income tax
Current tax is the amount payable on the taxable income
for the year and any adjustment in respect of previous years.
Deferred tax is provided in full on temporary differences between
the tax base of an asset or liability and its carrying amount in the
balance sheet. Deferred tax is determined using tax rates that
have been enacted or substantively enacted by the balance
sheet date and are expected to apply when the asset is realised
or the liability is settled. Deferred tax assets are recognised when
it is probable that taxable profits will be available against which
the deferred tax assets can be utilised. No provision is made
for temporary differences arising on the initial recognition of
assets or liabilities that affect neither accounting nor taxable
profit, with the exception of leases. Tax is included in the
income statement except when it relates to items recognised
directly in other comprehensive income or equity, in which
case the related tax is also recognised directly in other
comprehensive income or equity.
Pension benefits
The Group contributes to a defined benefit pension plan which
is funded with assets held separately from those of the Group.
The full value of the net assets or liabilities of the pension fund
is brought onto the balance sheet at each balance sheet date.
Actuarial gains and losses are taken to other comprehensive
income; all other movements are taken to the income statement.
Capitalisation of interest
Interest associated with direct expenditure on investment and
trading properties under development and refurbishment is
capitalised. Direct expenditure includes the purchase cost
of a site if it has been purchased with the specific intention
to redevelop, but does not include the original book cost of
a site where no intention existed. Interest is capitalised from
the start of the development work until the date of practical
completion. The rate used is the Group’s weighted average
cost of borrowings or, if appropriate, the rate on specific
associated borrowings.
Other investments
Other investments comprise investments in Pi Labs European
PropTech venture capital fund, which is measured at fair value,
based on the net assets of the fund; this is a Level 3 valuation
as defined by IFRS 13. Changes in fair value are recognised
in profit or loss.
Financial instruments
i Borrowings The Group’s borrowings in the form of its
debentures, private placement notes and bank loans are
recognised initially at fair value, after taking account of any
discount or premium on issue and attributable transaction
costs. Subsequently, borrowings are held at amortised
cost, with any discounts, premiums and attributable costs
charged to the income statement using the effective
interest rate method.
ii Cash and cash equivalents Cash and cash equivalents
comprise cash in hand, demand deposits and other short-term
highly liquid investments that are readily convertible into a
known amount of cash and are subject to insignificant risk
of changes in value.
154
Great Portland Estates plc Annual Report 2024
1 Material accounting policies continued
iii Trade receivables and payables Trade receivables
are initially measured at the transaction price, and are
subsequently measured at amortised cost using the effective
interest rate method. See note 14 for further information
on trade receivables and associated expected credit losses.
Trade payables are initially measured at fair value and
subsequently measured at amortised cost.
iv Derivative financial instruments The Group uses derivatives
(principally interest rate caps) in managing interest rate risk,
and does not use them for trading. They are recorded, and
subsequently revalued, at fair value, with revaluation gains
or losses being immediately taken to the income statement.
Derivatives with a maturity of less than 12 months or that expect
to be settled within 12 months of the balance sheet date are
presented as current assets or liabilities. Other derivatives
are presented as non-current assets or liabilities.
2. Segmental analysis
IFRS 8 Operating Segments requires the identification of operating segments based on internal financial reports detailing
components of the Group regularly reviewed by the chief operating decision makers (the Group’s Executive Committee) in order
to allocate resources to the segments and to assess their performance.
In recent years, the Group has evolved the types of office space it provides to its customers. This has included a Fully Managed
offer with additional service provision. As this element of the Group’s business has grown, so has the level of financial information
and oversight. As a result, the Directors have concluded that, based on the level of information provided to the Executive
Committee, for the current year this element of the business is an operating segment as defined by IFRS 8. Furthermore, given the
revenue for the current financial year is in excess of 10% of wider Group revenue, the segment should be separately reported from
the remainder of the Group’s activities. The Executive Committee reviews the performance of its Fully Managed offer based on
gross revenue (including Fully Managed services income) net of cost of sales on a proportionally consolidated basis (including the
Group’s joint ventures at share). The cost of sales information is not available for the prior year due to the information not being
available and the cost to develop it would be excessive. Total assets and liabilities are not monitored by segment.
The remainder of the Group’s components are managed together, with their operating results reviewed on an aggregated basis.
All of the Group’s revenue is generated from investment properties located in a small radius within central London. The properties
are managed as a single portfolio by a portfolio management team whose responsibilities are not segregated by location or
type, but are managed on an asset-by-asset basis. The majority of the Group’s assets are mixed-use, therefore the office, retail
and any residential space is managed together. The Directors have considered the nature of the business, how the business is
managed and how they review performance, and in their judgement, the Group has only two reportable segments.
Segmental analysis for the year ended 31 March 2024
Fully Managed
offices including
joint ventures
£m
Joint
ventures
£m
Group Fully
Managed
offices
£m
Remainder
of portfolio
£m
Total
2024
£m
Total
2023
£m
Revenue
13.6
(1.4)
12.2
83.2
95.4
91.2
Cost of sales
(8.6)
0.5
(8.1)
(25.2)
(33.3)
n/a
Net result
5.0
(0.9)
4.1
58.0
62.1
n/a
Revenue for the Group’s Fully Managed offices in the year to 31 March 2023 was £7.8 million (£8.0 million including share of joint ventures).
3 Revenue
2024
£m
2023
£m
Gross rental income
67.2
66.6
Spreading of lease incentives
5.7
5.9
Service charge income
14.4
12.5
Fully Managed services income
6.4
3.7
Trading property revenue
–
0.1
Joint venture fee income
1.7
2.4
95.4
91.2
Financial statements
155
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
3 Revenue continued
The table below sets out the Group’s gross rental income split between types of space provided:
2024
£m
2023
£m
Ready to Fit
37.9
42.4
Retail
10.5
11.1
Fitted
6.8
3.8
Fully Managed
5.8
4.1
Flex Partnerships
3.8
3.2
Hotel
2.4
2.0
67.2
66.6
The table below sets out the Group’s net rental income, which is an alternative performance measure:
2024
£m
2023
£m
Gross rental income
67.2
66.6
Expected credit loss
(0.2)
(0.6)
Rental income
67.0
66.0
Spreading of lease incentives
5.7
5.9
Ground rent
(0.6)
(1.0)
Net rental income
72.1
70.9
4 Cost of sales
2024
£m
2023
£m
Service charge expenses (including Fully Managed service costs – see note 2)
25.8
19.3
Other property expenses
6.9
11.9
Ground rent
0.6
1.0
33.3
32.2
For the year ended 31 March 2024, the Fully Managed service costs comprised £8.1 million of the £25.8 million service charge
expenses (see note 2).
The table below sets out the Group’s property costs, which is an alternative performance measure:
2024
£m
2023
£m
Service charge income
(14.4)
(12.5)
Fully Managed services income
(6.4)
(3.7)
Service charge expenses (including Fully Managed service costs)
25.8
19.3
Other property expenses
6.9
11.9
Expected credit (recovery)/loss
(0.1)
0.2
Property costs
11.8
15.2
5 Administration expenses
2024
£m
2023
£m
Employee costs
30.9
26.3
Depreciation (see note 12)
1.6
1.7
Other head office costs
9.8
10.3
42.3
38.3
156
Great Portland Estates plc Annual Report 2024
5 Administration expenses continued
Included within employee costs is an accounting charge for the Employee Long Term Incentive Plan and deferred bonus shares
of £4.0 million (2023: £1.3 million). Employee costs, including those of Directors, comprise the following:
2024
£m
2023
£m
Wages and salaries (including annual bonuses)
24.4
22.4
Share-based payments
4.1
1.5
Social security costs
3.7
3.4
Other pension costs
2.4
2.3
34.6
29.6
Less: recovered through service charges
(1.9)
(2.0)
Less: capitalised into development projects
(1.8)
(1.3)
30.9
26.3
Key management compensation
The emoluments and pension benefits of the Directors are set out in detail within the Directors’ remuneration report on
pages 124 to 143. The Directors and the Executive Committee are considered to be key management for the purposes of IAS 24 –
Related Party Transactions with their aggregate compensation set out below:
2024
£m
2023
£m
Wages and salaries (including annual bonuses)
6.8
6.8
Share-based payments
1.9
0.3
Social security costs
1.1
1.0
Other pension costs
0.5
0.5
10.3
8.6
The number of people considered key management totalled 17 (2023: 18). The Group had loans to key management of £2,880
(2023: £17,882) outstanding at 31 March 2024. The Group’s key management, its pension plan and joint ventures are the Group’s
only related parties.
Employee information
The monthly average number of employees of the Group, including Directors, was:
2024
Number
2023
Number
Head office and property management
150
145
Auditor’s remuneration
2024
£000
2023
£000
Audit of the Group and Company’s annual accounts
394
242
Audit of subsidiaries
107
94
501
336
Audit-related assurance services, including the interim review
61
49
Sustainability assurance
68
63
Auditor’s remuneration
630
448
For the year ended 31 March 2024, PricewaterhouseCoopers LLP was appointed as auditor to the Group, succeeding Deloitte LLP.
Financial statements
157
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
6 Finance income
2024
£m
2023
£m
Interest income on joint ventures balances
5.8
5.9
Interest on cash deposits
0.3
0.1
6.1
6.0
7 Finance costs
2024
£m
2023
£m
Interest on revolving credit facilities
5.8
5.7
Interest on term loan
8.5
–
Interest on private placement notes
11.0
10.9
Interest on debenture stock
1.2
1.2
Interest on obligations under occupational leases
–
0.1
Interest on obligations under head leases
2.4
2.4
Other
0.1
–
Gross finance costs
29.0
20.3
Less: capitalised interest
(11.3)
(8.8)
17.7
11.5
The Group capitalised interest on certain developments with specific associated borrowings at 6.8% (2023: nil), with the remainder
at the Group’s weighted average cost of non-specific borrowings of 3.5% (2023: 3.0%).
8 Tax
2024
£m
2023
£m
Current tax
UK corporation tax – current period
–
–
UK corporation tax – prior periods
–
–
Total current tax
–
–
Deferred tax
–
(0.1)
Tax credit for the year
–
(0.1)
The effective rate of tax is lower (2023: lower) than the standard rate of tax. The difference arises from the items set out below:
2024
£m
2023
£m
Loss before tax
(307.8)
(164.0)
Tax credit on loss at standard rate of 25% (2023: 19%)
(77.0)
(31.2)
REIT tax exempt rental profits and gains
(7.4)
(7.1)
Changes in fair value of properties not subject to tax
80.5
35.1
Difference between accounting profit and tax profit on disposal
–
2.0
Other
3.9
1.1
Tax credit for the year
–
(0.1)
During the year, £nil million (2023: £0.1 million) of deferred tax was debited directly to equity. The Group recognised a net
deferred tax asset at 31 March 2024 of £nil (2023: £nil). This consists of deferred tax assets of £1.6 million (2023: £1.2 million)
and deferred tax liabilities of £1.6 million (2023: £1.2 million).
158
Great Portland Estates plc Annual Report 2024
8 Tax continued
Deferred tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.
The standard rate of tax increased on 1 April 2023 from 19% to 25%.
Movement in deferred tax
At 1 April
2023
£m
Recognised
in the income
statement
£m
Recognised
in equity
£m
At 31 March
2024
£m
Net deferred tax asset/(liability) in respect of other temporary differences
–
–
–
–
The Group has not recognised further deferred tax assets in respect of gross temporary differences arising from the following
items, because it is uncertain whether future taxable profits will arise against which these assets can be utilised:
2024
£m
2023
£m
Revenue losses
24.6
15.7
Share-based payments
8.4
10.5
Other
1.3
1.4
34.3
27.6
As a REIT, the majority of rental profits and chargeable gains from the Group’s property rental business are exempt from UK
corporation tax. The Group is otherwise subject to corporation tax. In particular, the Group’s REIT exemption does not extend
to either profits arising from the sale of trading properties or gains arising from the sale of investment properties in respect
of which a major redevelopment has completed within the preceding three years (including the sale of 50 Finsbury Square, EC2,
which completed in February 2023).
In order to ensure that the Group is able to both retain its status as a REIT and avoid financial charges being imposed, a number
of tests (including a minimum distribution test) must be met by both Great Portland Estates plc and by the Group as a whole on
an ongoing basis. These conditions are detailed in the Corporation Tax Act 2010.
9 Alternative performance measures and EPRA metrics
As is usual practice in our sector, we use alternative performance measures (APMs) to help explain the performance of the business.
These include quoting a number of measures on a proportionally consolidated basis to include joint ventures, as it best describes
how we manage the portfolio, and using measures prescribed by the European Public Real Estate Association (EPRA). The measures
defined by EPRA are designed to enhance transparency and comparability across the European real estate sector in accordance
with its Best Practice Recommendations. The Directors consider these EPRA metrics, and the other metrics provided, to be
the most appropriate method of reporting the value and performance of the business. A summary of our EPRA measures is
on page 33. EPRA capital expenditure and EPRA NIY are included in note 10 and EPRA vacancy is set out on page 197.
Earnings per share
Weighted average number of ordinary shares
2024
Number of
shares
2023
Number of
shares
Issued ordinary share capital at 1 April
253,867,911
253,867,911
Investment in own shares
(887,159)
(941,432)
Weighted average number of ordinary shares at 31 March – basic
252,980,752
252,926,479
Basic and diluted earnings per share
Loss
after tax
2024
£m
Number
of shares
2024
million
Loss
per share
2024
pence
Loss
after tax
2023
£m
Number
of shares
2023
million
Loss
per share
2023
pence
Basic
(307.8)
253.0
(121.7)
(163.9)
252.9
(64.8)
Dilutive effect of LTIP shares
–
–
–
–
–
–
Diluted
(307.8)
253.0
(121.7)
(163.9)
252.9
(64.8)
Financial statements
159
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
9 Alternative performance measures and EPRA metrics continued
Basic and diluted EPRA earnings per share
(Loss)/
Earnings
after tax
2024
£m
Number
of shares
2024
million
(Loss)/
Earnings
per share
2024
pence
(Loss)/
Earnings
after tax
2023
£m
Number
of shares
2023
million
(Loss)/
Earnings
per share
2023
pence
Basic
(307.8)
253.0
(121.7)
(163.9)
252.9
(64.8)
Deficit from investment property net of tax (note 10)
267.3
–
105.7
145.0
–
57.3
Deficit from joint venture investment property (note 11)
56.5
–
22.3
43.2
–
17.1
Trading property revenue
–
–
–
(0.1)
–
–
Deficit on revaluation of derivatives
1.7
–
0.7
–
–
–
Deficit/(surplus) on revaluation of other investments (note 13)
0.2
–
0.1
(0.1)
–
–
Deferred tax in respect of adjustments (note 8)
–
–
–
(0.1)
–
(0.1)
Basic EPRA earnings
17.9
253.0
7.1
24.0
252.9
9.5
Dilutive effect of LTIP shares (note 21)
–
0.2
–
–
0.2
–
Diluted EPRA earnings
17.9
253.2
7.1
24.0
253.1
9.5
Net assets per share
The Group has adopted EPRA’s Best Practice Recommendations for Net Asset Value (NAV) metrics. The recommendations include
three NAV metrics: EPRA Net Tangible Assets (NTA), Net Reinvestment Value (NRV) and Net Disposal Value (NDV). We consider
EPRA NTA to be the most relevant measure for the Group and the primary measure of IFRS net asset value, definitions are
included in the glossary.
Number of ordinary shares
2024
Number of
shares
2023
Number of
shares
Issued ordinary share capital
253,867,911
253,867,911
Investment in own shares
(887,159)
(887,159)
Number of shares – basic
252,980,752
252,980,752
Dilutive effect of LTIP shares
563,956
326,340
Number of shares – diluted
253,544,708
253,307,092
EPRA net assets per share at 31 March 2024
IFRS
£m
EPRA
NTA
£m
EPRA
NDV
£m
EPRA
NRV
£m
IFRS basic and diluted net assets
1,583.0
1,583.0
1,583.0
1,583.0
Fair value of derivative financial instruments
–
(0.4)
–
(0.4)
Fair value of financial liabilities (note 17)
–
–
50.7
–
Real estate transfer tax
–
–
–
170.1
Net assets used in per share calculations
1,583.0
1,582.6
1,633.7
1,752.7
IFRS
EPRA
NTA
EPRA
NDV
EPRA
NRV
Net assets per share (pence)
626
626
646
693
Diluted net assets per share (pence)
624
624
644
691
160
Great Portland Estates plc Annual Report 2024
9 Alternative performance measures and EPRA metrics continued
EPRA net assets per share at 31 March 2023
IFRS
£m
EPRA
NTA
£m
EPRA
NDV
£m
EPRA
NRV
£m
IFRS basic and diluted net assets
1,918.6
1,918.6
1,918.6
1,918.6
Fair value of financial liabilities (note 17)
–
–
83.4
–
Real estate transfer tax
–
–
–
173.6
Net assets used in per share calculations
1,918.6
1,918.6
2,002.0
2,092.2
IFRS
EPRA
NTA
EPRA
NDV
EPRA
NRV
Net assets per share (pence)
758
758
791
827
Diluted net assets per share (pence)
757
757
790
826
Total Accounting Return (TAR)
2024
Pence per
share
2023
Pence per
share
Opening EPRA NTA (A)
757.0
835.0
Closing EPRA NTA
624.0
757.0
Decrease in EPRA NTA
(133.0)
(78.0)
Ordinary dividends paid in the year
12.6
12.6
Total return (B)
(120.4)
(65.4)
Total Accounting Return (B/A)
(15.9%)
(7.8%)
EPRA loan-to-property value and net debt
We consider loan-to-property value, including our share of joint ventures, to be the best measure of the Group’s risk
from financial leverage. We also present net gearing as it is a key covenant on our loan facilities (see note 16).
2024
£m
2023
£m
£21.9 million 55⁄8% debenture stock 2029
21.9
21.9
£450.0 million revolving credit facility
47.0
14.0
£250.0 million term loan
250.0
–
Private placement notes
425.0
425.0
Less: cash and cash equivalents
(22.9)
(19.4)
Group net debt
721.0
441.5
Net payables (including customer rent deposits)
54.6
44.0
Group net debt including net payables
775.6
485.5
Joint venture net payables (at share)
10.5
3.4
Less: joint venture cash and cash equivalents (at share)
(25.7)
(17.7)
Net debt including joint ventures (A)
760.4
471.2
Group properties at market value
1,855.1
1,855.5
Joint venture properties at market value (at share)
476.1
524.5
Property portfolio at market value including joint ventures (B)
2,331.2
2,380.0
EPRA loan-to-property value (A/B)
32.6%
19.8%
Group cash and cash equivalents includes customer rent deposits (as restated) held in separate designated bank accounts
of £17.0 million (2023: £16.2 million), the use of the deposits is subject to restrictions as set out in the customer’s lease agreement
and therefore not available for general use by the Group.
Financial statements
161
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
9 Alternative performance measures and EPRA metrics continued
EPRA cost ratio (including share of joint ventures)
2024
£m
2023
£m
Administration expenses
42.3
38.3
Net property costs (excluding Fully Managed services income and costs1)
10.1
15.2
Joint venture management fee income (note 3)
(1.7)
(2.4)
Joint venture property and administration costs (note 11)
3.6
2.2
EPRA costs (including direct vacancy costs) (A)
54.3
53.3
Direct vacancy costs
(5.1)
(7.8)
Joint venture direct vacancy cost
(2.2)
(0.3)
EPRA costs (excluding direct vacancy costs) (B)
47.0
45.2
Net rental income (note 3)
72.1
70.9
Joint venture net rental income (note 11)
19.4
18.2
Gross rental income (C)
91.5
89.1
Portfolio at fair value including joint ventures (D)
2,331.2
2,380.0
Cost ratio (including direct vacancy costs) (A/C)
59.3%
59.8%
Cost ratio (excluding direct vacancy costs) (B/C)
51.4%
50.7%
Cost ratio (by portfolio value) (A/D)
2.3%
2.2%
1. For 2024 only, the information is not available for the prior year see note 2.
Net gearing
2024
£m
2023
£m
Nominal value of interest-bearing loans and borrowings (see note 16)
743.9
460.9
Obligations under occupational leases
1.0
2.0
Less: cash and cash equivalents (unrestricted) (see note 22)
(5.9)
(3.2)
Adjusted net debt (A)
739.0
459.7
Net assets
1,583.0
1,918.6
Pension scheme asset
(4.9)
(4.1)
Adjusted net equity (B)
1,578.1
1,914.5
Net gearing (A/B)
46.8%
24.0%
Cash earnings per share
Profit
after tax
2024
£m
Number
of shares
2024
million
Earnings
per share
2024
pence
Profit
after tax
2023
£m
Number
of shares
2023
million
Earnings
per share
2023
pence
Diluted EPRA earnings
17.9
253.2
7.1
24.0
253.1
9.5
Capitalised interest
(11.3)
–
(4.5)
(8.8)
–
(3.5)
Spreading of lease incentives
(5.7)
–
(2.3)
(5.9)
–
(2.3)
Spreading of lease incentives in joint ventures
(1.4)
–
(0.5)
(7.0)
–
(2.8)
Employee incentive plan charges
4.0
–
1.6
1.3
–
0.5
Cash earnings per share
3.5
253.2
1.4
3.6
253.1
1.4
162
Great Portland Estates plc Annual Report 2024
10 Investment property
Investment property
Freehold
£m
Leasehold
£m
Total
£m
Book value at 1 April 2022
929.6
1,047.2
1,976.8
Costs capitalised
17.6
11.2
28.8
Movement in lease incentives
4.8
1.1
5.9
Acquisitions
7.5
36.1
43.6
Disposals
(27.3)
–
(27.3)
Transfer to investment property under development
–
(101.2)
(101.2)
Net valuation deficit on investment property
(48.7)
(69.4)
(118.1)
Book value at 31 March 2023
883.5
925.0
1,808.5
Costs capitalised
28.0
57.3
85.3
Movement in lease incentives
7.8
(0.4)
7.4
Interest capitalised
2.2
2.6
4.8
Acquisitions
128.3
–
128.3
Disposals
(5.8)
(8.4)
(14.2)
Transfer to investment property under development
(50.1)
(59.6)
(109.7)
Transfer to investment property held for sale
–
(18.2)
(18.2)
Net valuation deficit on investment property
(108.8)
(106.0)
(214.8)
Book value at 31 March 2024 (A)
885.1
792.3
1,677.4
Investment property under development
Freehold
£m
Leasehold
£m
Total
£m
Book value at 1 April 2022
167.6
–
167.6
Costs capitalised
21.1
32.0
53.1
Disposals
(193.4)
–
(193.4)
Interest capitalised
4.7
4.1
8.8
Transfer from investment property
–
101.2
101.2
Net valuation deficit on investment property under development
–
(23.6)
(23.6)
Book value at 31 March 2023
–
113.7
113.7
Costs capitalised
–
54.6
54.6
Interest capitalised
–
6.5
6.5
Transfer from investment property
50.1
59.6
109.7
Net valuation deficit on investment property under development
–
(50.9)
(50.9)
Book value at 31 March 2024 (B)
50.1
183.5
233.6
Book value of investment property & investment property under development (A+B)
935.2
975.8
1,911.0
Investment property held for sale
Freehold
£m
Leasehold
£m
Total
£m
Book value at 1 April 2022 and 31 March 2023
–
–
–
Transfer from investment property – held for sale
–
18.2
18.2
Book value of investment property held for sale at 31 March 2024 (C)
–
18.2
18.2
Book value of total investment property at 31 March 2024 (A+B+C)
935.2
994.0
1,929.2
The book value of investment property includes £74.1 million (2023: £66.7 million) in respect of the present value of future
ground rents. The market value of the portfolio (excluding these amounts) is £1,855.1 million. The total portfolio value
including joint venture properties of £476.1 million (see note 11) was £2,331.2 million. At 31 March 2024, property with a
carrying value of £107.0 million (2023: £111.0 million) was secured under the first mortgage debenture stock (see note 16).
At the balance sheet date, one property had exchanged for sale and accordingly was classified as held for sale. The sale
is anticipated to complete in January 2025.
Financial statements
163
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
10 Investment property continued
Surplus from investment property
2024
£m
2023
£m
Net valuation deficit on investment property
(265.7)
(141.7)
Loss on sale of investment properties
(1.6)
(3.3)
(267.3)
(145.0)
The Group’s investment properties, including those held in joint ventures (note 11), were valued on the basis of fair value by
CBRE Limited (CBRE), external valuers, as at 31 March 2024. The valuations have been prepared in accordance with the current
versions of the RICS Valuation – Global Standards (incorporating the International Valuation Standards (IVS)) and the UK
national supplement (the Red Book) and have been primarily derived using comparable recent market transactions on arm’s
length terms.
The total fees, including the fixed fee for this assignment, earned by CBRE (or other companies forming part of the same group of
companies within the UK) from the Group are less than 5.0% of its total UK revenues. CBRE has carried out valuation instructions,
agency and professional services on behalf of the Group for in excess of 20 years.
Real estate valuations are complex and derived using comparable market transactions which are not publicly available
and involve an element of judgement. Therefore, we have classified the valuation of the property portfolio as Level 3 as defined
by IFRS 13; this is in line with EPRA guidance. There were no transfers between levels during the year. Inputs to the valuation,
including capitalisation yields (typically the true equivalent yield) and rental values, are defined as ‘unobservable’ as defined
by IFRS 13.
Everything else being equal, there is a positive relationship between rental values and the property valuation, such that an
increase in rental values will increase the valuation of a property and a decrease in rental values will reduce the valuation of the
property. Any percentage movement in rental values will translate into approximately the same percentage movement in the
property valuation. However, due to the long-term nature of leases, where the passing rent is fixed and often subject to upwards
only rent reviews, the impact will not be immediate and will be recognised over a number of years. The relationship between
capitalisation yields and the property valuation is negative and more immediate; therefore, an increase in capitalisation yields
will reduce the valuation of a property and a reduction will increase its valuation. There is a negative relationship between
development costs and the property valuation, such that an increase in estimated development costs will decrease the valuation
of a property under development and a decrease in estimated development costs will increase the valuation of a property
under development.
An increase of 10% on the capital expenditure on the Group’s three HQ development schemes and four Flex conversion schemes,
which the Directors believe is a reasonable variance to budgeted cost based on industry experience, would reduce the valuation
by £49.8 million, with a decrease of 10% increasing the valuation by £49.8 million.
A decrease in the capitalisation yield by 50 basis points would result in an increase in the fair value of the Group’s investment
property by £203.2 million (£241.4 million including a share of joint ventures), whilst a 50 basis point increase would reduce the
fair value by £166.7 million (£200.0 million including a share of joint ventures). A movement of 56 basis points was shown across
the portfolio over the last 12 months and a 50 basis point movement is therefore considered to be a reasonably possible change.
Given there is only a marginal difference in the overall yields for office and retail and the movement in year, we feel this sensitivity
to be appropriate. There are interrelationships between these inputs as they are determined by market conditions, and the
valuation movement in any one period depends on the balance between them. If these inputs move in opposite directions
(i.e. rental values increase and yields decrease), valuation movements can be amplified, whereas if they move in the same
direction, they may offset, reducing the overall net valuation movement.
The valuation of the property portfolio reflects its fair value taking into account the climate related risks associated with
the properties. This includes the impact of expected regulatory changes, and we estimate that the investment required to
upgrade our existing buildings to the new minimum EPC B rating by 2030 is less than £10 million (including share of joint ventures)
over and above specific refurbishment and development assumptions included in the valuation.
During the year, the Group capitalised £1.8 million (2023: £1.3 million) of employee costs in respect of its development team
into investment properties under development. At 31 March 2024, the Group had capital commitments of £502.3 million
(2023: £311.6 million). For further detail, see Our development activities on pages 23 to 25.
In April 2024, the Group exchanged contracts to buy The Courtyard, WC1 for £10.4 million of cash and through a property
exchange of 95/96 New Bond Street for £18.2 million. At the reporting date, the acquisition has not yet completed.
164
Great Portland Estates plc Annual Report 2024
10 Investment property continued
Key inputs to the valuation (by building and location) at 31 March 2024
ERV
True equivalent yield
Average
£ per sq ft
Range
£ per sq ft
Average
%
Range
%
North of Oxford Street
Office
102
74 – 174
5.3
4.8 – 7.3
Retail
67
34 – 110
5.3
4.5 – 10.0
Rest of West End
Office
143
70 – 249
5.8
5.0 – 7.3
Retail
115
15 – 295
5.0
3.2 – 6.8
City, Midtown and Southwark
Office
83
47 – 173
5.7
5.4 – 7.3
Retail
36
28 – 363
5.9
5.5 – 6.7
Key inputs to the valuation (by building and location) at 31 March 2023
ERV
True equivalent yield
Average
£ per sq ft
Range
£ per sq ft
Average
%
Range
%
North of Oxford Street
Office
88
54 – 131
4.8
4.3 – 6.8
Retail
63
33 – 107
4.5
4.2 – 7.5
Rest of West End
Office
101
57 – 163
5.4
3.3 – 7.3
Retail
96
15 – 266
4.7
3.2 – 7.1
City, Midtown and Southwark
Office
75
47 – 167
5.0
4.5 – 6.1
Retail
25
25 – 27
5.5
4.6 – 5.9
EPRA capital expenditure
2024
£m
2023
£m
Group
Acquisitions
128.3
43.6
Developments
54.6
53.1
Interest capitalised
11.3
8.8
Investment properties: incremental lettable space
–
–
Investment properties: no incremental lettable space
85.3
28.8
Movement in lease incentives
7.4
5.9
Group total
286.9
140.2
Joint ventures (at share)
Developments
–
–
Interest capitalised
–
–
Investment properties: incremental lettable space
–
–
Investment properties: no incremental lettable space
5.7
1.3
Movement in lease incentives
2.4
7.8
Total capital expenditure
295.0
149.3
Conversion from accrual to cash basis
(12.0)
7.3
Total capital expenditure on a cash basis
283.0
156.6
Financial statements
165
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
10 Investment property continued
EPRA net initial yield (NIY) and topped-up NIY
2024
£m
2023
£m
Properties at fair value including joint ventures
2,331.2
2,380.0
Less: properties under development including joint ventures
(201.5)
(89.0)
Less: residential properties
(4.7)
(12.4)
Like-for-like investment property portfolio, proposed and completed developments
2,125.0
2,278.6
Plus: estimated purchasers’ costs
155.0
166.3
Grossed-up completed property portfolio valuation (B)
2,280.0
2,444.9
Annualised cash passing rental income1
85.9
76.7
Net service charge expense including joint ventures
(5.1)
(3.3)
Other irrecoverable property costs including joint ventures
(7.9)
(12.9)
Annualised net rents (A)
72.9
60.5
Plus: rent-free periods and other lease incentives including joint ventures
3.9
16.8
Topped-up annualised net rents (C)
76.8
77.3
EPRA net initial yield (A/B)
3.2%
2.5%
EPRA topped-up initial yield (C/B)
3.4%
3.2%
1. Annualised passing rental income as calculated by the Group’s external valuers including joint ventures at share.
See note 9 for further detail on EPRA measures which are Alternative Performance Metrics.
11 Investment in joint ventures
The Group has the following investments in joint ventures:
Equity
£m
Balances
with
partners
£m
2024
Total
£m
2023
Total
£m
At 1 April
324.4
214.4
538.8
582.8
Movement on joint venture balances
–
(0.9)
(0.9)
(3.1)
Additions
0.1
–
0.1
–
Share of profit of joint ventures
9.8
–
9.8
9.8
Share of revaluation deficit of joint ventures
(56.5)
–
(56.5)
(43.2)
Share of results of joint ventures
(46.7)
–
(46.7)
(33.4)
Distributions
–
–
–
(7.5)
At 31 March
277.8
213.5
491.3
538.8
All of the Group’s joint ventures operate solely in the United Kingdom and comprise the following:
Country of registration
2024
ownership
2023
ownership
The GHS Limited Partnership
Jersey
50%
50%
The Great Ropemaker Partnership
United Kingdom
50%
50%
The Great Victoria Partnerships
United Kingdom
50%
50%
166
Great Portland Estates plc Annual Report 2024
11 Investment in joint ventures continued
The Group’s share in the assets and liabilities, revenues and expenses for the joint ventures is set out below:
The GHS
Limited
Partnership
£m
The Great
Ropemaker
Partnership
£m
The Great
Victoria
Partnerships
£m
2024
Total
£m
2024
At share
£m
2023
At share
£m
Balance sheets
Investment property
643.6
245.4
73.5
962.5
481.2
529.6
Current assets
0.5
3.8
1.1
5.4
2.7
3.6
Cash and cash equivalents
13.1
19.6
18.7
51.4
25.7
17.7
Balances from partners
(222.0)
(131.8)
(73.1)
(426.9)
(213.5)
(214.4)
Current liabilities
(12.0)
(13.2)
(1.3)
(26.5)
(13.2)
(7.0)
Obligations under head leases
–
(10.2)
–
(10.2)
(5.1)
(5.1)
Net assets
423.2
113.6
18.9
555.7
277.8
324.4
The GHS
Limited
Partnership
£m
The Great
Ropemaker
Partnership
£m
The Great
Victoria
Partnerships
£m
2024
Total
£m
2024
At share
£m
2023
At share
£m
Income statements
Revenue
24.7
21.5
6.8
53.0
26.5
25.5
Net rental income
20.1
14.6
4.1
38.8
19.4
18.2
Property and administration costs
(2.0)
(3.2)
(2.0)
(7.2)
(3.6)
(2.2)
Net finance costs
(9.0)
(3.1)
0.1
(12.0)
(6.0)
(6.2)
Share of profit from joint ventures
9.1
8.3
2.2
19.6
9.8
9.8
Revaluation of investment property
(25.8)
(77.4)
(9.8)
(113.0)
(56.5)
(43.2)
Results of joint ventures
(16.7)
(69.1)
(7.6)
(93.4)
(46.7)
(33.4)
At 31 March 2024 and 31 March 2023, the joint ventures had no external debt facilities.
Transactions during the year between the Group and its joint ventures, which are related parties, are disclosed below:
2024
£m
2023
£m
Movement on joint venture balances during the year
0.9
3.1
Balances receivable at the year end from joint ventures
(213.5)
(214.4)
Interest on balances with partners (see note 6)
5.8
5.9
Distributions
–
7.5
Joint venture fees paid (see note 3)
1.7
2.4
The joint venture balances are repayable on demand and bear interest as follows: the GHS Limited Partnership at 4.0% and the
Great Ropemaker Partnership at 2.0%. In measuring expected credit losses of the balances receivable at the year end from
joint ventures under IFRS 9, the ability of each joint venture to repay the loan at the reporting date if demanded by the Group
is assumed to be through the sale of the investment properties held by the joint venture. Investment properties are held at fair
value at each reporting date as described in note 10. Therefore, the net asset value of the joint venture is considered to be a
reasonable approximation of the available assets that could be realised to recover the loan balance and the requirement to
recognise expected credit losses.
The investment properties include £5.1 million (2023: £5.1 million) in respect of the present value of future ground rents; net of
these amounts, the market value of our share of the total joint venture properties is £476.1 million. The Group earns fee income from
its joint ventures for the provision of management services. All of the above transactions are made on terms equivalent to those
that prevail in arm’s length transactions. See notes 10, 14 and 17 for more information on the valuation of investment properties
and expected credit losses in joint ventures.
At 31 March 2024, the Group had £nil contingent liabilities arising in its joint ventures (2023: £nil). At 31 March 2024, the Group
had capital commitments in respect of its joint ventures of £nil million (2023: £0.4 million).
Financial statements
167
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
12 Property, plant and equipment
Right of use
asset for
occupational
leases
£m
Leasehold
improvements
£m
Fixtures and
fittings/
other
£m
Total
£m
Cost
At 1 April 2022
4.9
5.6
1.9
12.4
Costs capitalised
–
–
0.2
0.2
At 31 March 2023
4.9
5.6
2.1
12.6
Costs capitalised
–
–
0.1
0.1
At 31 March 2024
4.9
5.6
2.2
12.7
Depreciation
At 1 April 2023
3.3
3.9
1.9
9.1
Charge for the year
0.8
0.6
0.2
1.6
At 31 March 2024
4.1
4.5
2.1
10.7
Carrying amount at 31 March 2023
1.6
1.7
0.2
3.5
Carrying amount at 31 March 2024
0.8
1.1
0.1
2.0
13 Other investments
2024
£m
2023
£m
At 1 April
1.8
1.0
Acquisitions
0.8
0.7
(Deficit)/surplus on revaluation
(0.2)
0.1
At 31 March
2.4
1.8
In January 2020, the Group entered into a commitment of up to £5.0 million to invest in the Pi Labs European PropTech venture
capital fund. At 31 March 2024, the Group had made net investments of £2.5 million. Launched in 2014, Pi Labs is Europe’s longest
standing PropTech VC, and this third fund has a primary focus to invest in early stage PropTech start-ups across Europe and the
UK that use technology solutions to enhance any stage of the real estate value chain. The valuation of the fund is based on the
net assets of its investments therefore, given these are not readily traded, we have classified the valuation of the investments
as Level 3 as defined by IFRS 13. Key areas of focus for the fund include sustainability, future of work, future of retail, commercial
real estate technologies, construction technology and smart cities.
14 Trade and other receivables
2024
£m
2023
£m
Trade receivables
6.7
8.3
Expected credit loss allowance
(0.3)
(1.7)
6.4
6.6
Prepayments
0.2
4.4
Other sales taxes
5.9
–
Other receivables
12.4
4.8
24.9
15.8
168
Great Portland Estates plc Annual Report 2024
14 Trade and other receivables continued
Trade receivables consist of rent and service charge monies, which are typically due on the quarter day with no credit period.
Interest is charged on trade receivables in accordance with the terms of the customer’s lease. Trade receivables are provided
for based on the expected credit loss, which uses a lifetime expected loss allowance for all trade receivables based on an
assessment of each individual customer’s circumstances. This assessment reviews the outstanding balances of each individual
customer and makes an assessment of the likelihood of recovery, based on an evaluation of their financial situation. Where the
expected credit loss relates to revenue already recognised, this has been recognised immediately in the income statement.
Of the gross trade receivables of £6.7 million, £4.4 million (2023: £5.5 million) was past due, of which £1.2 million (2023: £3.0 million)
was over 30 days.
2024
£m
2023
£m
Movements in expected credit loss allowance
Balance at the beginning of the year
(1.7)
(6.0)
Expected credit loss allowance during the year
(0.3)
(1.0)
Expected credit loss allowance in respect of prior years
–
0.8
Amounts written-off as uncollectable
1.7
4.5
(0.3)
(1.7)
The expected credit loss for the year represents 5% (2023: 26%) of the net trade receivables balance at the balance sheet date.
15 Trade and other payables
2024
£m
2023
£m
Rents received in advance
16.4
15.1
Accrued capital expenditure
18.1
5.9
Payables in respect of customer rent deposits
17.0
16.2
Other accruals
23.3
15.2
Other taxes
–
0.7
Other payables
1.4
3.7
76.2
56.8
The Directors consider that the carrying amount of trade payables approximates their fair value.
Financial statements
169
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
16 Interest-bearing loans and borrowings
2024
£m
2023
£m
Current liabilities at amortised cost
Unsecured
£175.0 million 2.15% private placement notes 2024
175.0
–
Non-current liabilities at amortised cost
Secured
£21.9 million 55⁄8% debenture stock 2029
22.0
22.0
Unsecured
£450.0 million revolving credit facility
46.1
12.8
£250.0 million term loan
248.3
–
£175.0 million 2.15% private placement notes 2024
–
174.8
£40.0 million 2.70% private placement notes 2028
39.9
39.9
£30.0 million 2.79% private placement notes 2030
29.9
29.9
£30.0 million 2.93% private placement notes 2033
29.9
29.9
£25.0 million 2.75% private placement notes 2032
24.9
24.9
£125.0 million 2.77% private placement notes 2035
124.4
124.3
Non-current interest-bearing loans and borrowings
565.4
458.5
Total interest-bearing loans and borrowings
740.4
458.5
In April 2023, the Group extended the maturity of £50 million of its £450 million unsecured revolving credit facility (RCF) to
January 2027, coterminous with the remainder of the facility. The facility is unsecured, attracts a floating rate based on a headline
margin that was unchanged at 90.0 basis points over SONIA (plus or minus 2.5 basis points subject to a number of ESG-linked
targets in future years).
In September 2023, the Group arranged a new £250 million unsecured term loan at a headline margin of 175 basis points over
SONIA with three existing relationship banks. The loan has an initial three-year term which may be extended to a maximum
of five years at GPE’s request, subject to bank consent. The Group also entered a £200 million interest rate cap (at a cost of
£2.1 million) to protect against any further increases in rates whilst preserving the benefit of any reductions. The loan and
interest rate cap were both effective from 9 October 2023.
In January 2024, the Group arranged a new £200 million loan facility at a headline margin of 75 basis points over SONIA,
with the margin stepping up by 0.25% after six months, a further 0.25% after 12 months and a final step-up of 0.50% at 18 months.
The loan has a one-year term, which may be extended by up to a further year at GPE’s request and was undrawn at
31 March 2024.
The Group’s £175.0 million 2.15% private placement notes 2024 were repaid on 22 May 2024.
At 31 March 2024, the nominal value of the Group’s interest-bearing loans and borrowing was £743.9 million (2023: £460.9 million)
and the Group had £603 million (2023: £436.0 million) of undrawn credit facilities.
170
Great Portland Estates plc Annual Report 2024
17 Financial instruments
Categories of financial instrument
Carrying
amount
2024
£m
Amounts
recognised in
income
statement
2024
£m
Gain/(loss)
to equity
2024
£m
Carrying
amount
2023
£m
Amounts
recognised in
income
statement
2023
£m
Gain/(loss)
to equity
2023
£m
Other investments
2.4
(0.2)
–
1.8
0.1
–
Interest rate cap
0.4
(1.7)
–
–
–
–
Assets at fair value
2.8
(1.9)
–
1.8
0.1
–
Balances with joint ventures
213.5
5.8
–
214.4
5.9
–
Trade receivables
24.7
(0.1)
–
11.4
(0.8)
–
Cash and cash equivalents
22.9
0.3
–
19.4
0.1
–
Assets at amortised cost
261.1
6.0
–
245.2
5.2
–
Trade and other payables
(1.4)
–
–
(4.4)
–
–
Payables in respect of customer rent deposits
(17.0)
–
–
(16.2)
–
–
Interest-bearing loans and borrowings
(740.4)
(15.2)
–
(458.5)
(9.0)
–
Obligations under occupational leases
(1.0)
–
–
(2.0)
(0.1)
–
Obligations under finance leases
(74.1)
(2.4)
–
(66.7)
(2.4)
–
Liabilities at amortised cost
(833.9)
(17.6)
–
(547.8)
(11.5)
–
Total financial instruments
(570.0)
(13.5)
–
(300.8)
(6.2)
–
Financial risk management objectives
Capital risk
The Group manages its capital to ensure that entities in the Group will be able to operate on a going concern basis and as such
it aims to maintain an appropriate mix of debt and equity financing. The current capital structure of the Group consists of a mix
of equity and debt. Equity comprises issued share capital, reserves and retained earnings as disclosed in the Group statement
of changes in equity. Debt comprises long-term debenture stock, private placement notes and drawings against committed
revolving credit facilities from banks. The Group aims to maintain a loan-to-property value of between 10–35% (see note 10).
The Group operates solely in the United Kingdom, and its operating profits and net assets are sterling denominated. As a result,
the Group’s policy is to have no unhedged assets or liabilities denominated in foreign currencies.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has a policy of reviewing the financial information of prospective customers and only dealing with those that are
creditworthy and obtaining sufficient rental cash deposits or third-party guarantees as a means of mitigating financial loss
from defaults. The concentration of credit risk is limited due to the large and diverse customer base, with no one customer
providing more than 10% of the Group’s rental income. Details of the Group’s receivables, and the associated expected credit loss,
are summarised in notes 11 and 14 of the financial statements. The Directors believe that there is no further expected credit
loss required in excess of that provided. The carrying amount of financial assets recorded in the financial statements, which is
net of impairment losses, represents the Group’s maximum exposure to credit risk. The Group’s cash deposits are placed with
a diversified range of investment grade banks, and strict counterparty limits ensure the Group’s exposure to bank failure
is minimised.
Liquidity risk
The Group operates a framework for the management of its short-, medium- and long-term funding requirements. Cash flow
and funding needs are regularly monitored to ensure sufficient undrawn facilities are in place. The Group’s funding sources
are diversified across a range of bank and bond markets and strict counterparty limits are operated on deposits.
Financial statements
171
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
17 Financial instruments continued
The Group meets its day-to-day working capital requirements through the utilisation of its revolving credit facility.
The availability of this facility depends on the Group complying with a number of key financial covenants; these covenants
and the Group’s compliance with them are set out in the table below:
Key covenants
Covenant
March 2024
actuals
Group
Net gearing (see note 9)
<125%
46.8%
Inner borrowing (unencumbered asset value/unsecured borrowings)
>1.66x
2.42x
Interest cover
>1.35x
3.65x
The Group has undrawn credit facilities of £603.0 million and has substantial headroom above all of its key covenants. As a result,
the Directors consider the Group to have adequate liquidity to be able to fund the ongoing operations of the business.
The following tables detail the Group’s remaining contractual maturity on its financial instruments and have been drawn up
based on the undiscounted cash flows of financial liabilities, including associated interest payments, based on the earliest
date on which the Group is required to pay, and conditions existing at the balance sheet date:
At 31 March 2024
Carrying
amount
£m
Contractual
cash flows
£m
Less than
one year
£m
One to
two years
£m
Two to
five years
£m
More than
five years
£m
Non-derivative financial liabilities
£21.9 million 55⁄8% debenture stock 2029
22.0
27.8
1.2
1.2
25.4
–
£450.0 million revolving credit facility
46.1
58.9
4.2
4.2
50.5
–
£250.0 million term loan
248.3
291.3
17.2
17.2
256.9
–
Private placement notes
424.0
489.6
182.5
7.0
60.0
240.1
Derivative financial instruments
Interest rate cap
(0.4)
(0.3)
(0.2)
(0.1)
–
–
740.0
867.3
204.9
29.5
392.8
240.1
At 31 March 2023
Carrying
amount
£m
Contractual
cash flows
£m
Less than
one year
£m
One to
two years
£m
Two to
five years
£m
More than
five years
£m
Non-derivative financial liabilities
£21.9 million 55⁄8% debenture stock 2029
22.0
29.0
1.2
1.2
3.7
22.9
£450.0 million revolving credit facility
12.8
22.0
2.1
2.1
17.8
–
Private placement notes
423.7
500.2
10.8
182.5
20.8
286.1
458.5
551.2
14.1
185.8
42.3
309.0
The maturity of lease obligations is set out in notes 18 and 19.
Interest rate risk
Interest rate risk arises from the Group’s use of interest-bearing financial instruments. It is the risk that future cash flows arising
from a financial instrument will fluctuate due to changes in interest rates. It is the Group’s policy to reduce interest rate risk in
respect of the cash flows arising from its debt finance either through the use of fixed rate debt or through the use of interest
rate derivatives such as swaps, caps and floors. It is the Group’s usual policy to maintain the proportion of floating interest rate
exposure to between 20–40% of forecast total debt. However, this target is flexible, and may not be adhered to at all times
depending on, for example, the Group’s view of future interest rate movements.
Interest rate caps
Interest rate caps protect the Group from rises in short-term interest rates by making a payment to the Group when the
underlying interest rate exceeds a specified rate (the ‘cap rate’) on a notional value. If the underlying rate exceeds the cap rate,
the payment is based upon the difference between the two rates, ensuring the Group only pays the maximum of the cap rate.
At 31 March 2024, the Group’s only interest rate derivative was a £200 million interest rate cap.
172
Great Portland Estates plc Annual Report 2024
17 Financial instruments continued
Interest rate sensitivity
The sensitivity analysis below has been determined based on the exposure to interest rates for financial instruments at the
balance sheet date, and represents management’s assessment of possible changes in interest rates based on historical trends.
For the floating rate liabilities, the analysis is prepared assuming the amount of the liability at 31 March 2024 was outstanding
for the whole year:
Impact on loss
Impact on equity
2024
£m
2023
£m
2024
£m
2023
£m
Increase of 50 basis points
(0.5)
(0.1)
(0.5)
(0.1)
Increase of 25 basis points
(0.2)
(0.1)
(0.2)
(0.1)
Decrease of 25 basis points
0.7
0.1
0.7
0.1
Decrease of 50 basis points
1.5
0.1
1.5
0.1
Fair value of interest-bearing loans and borrowings
Book value
2024
£m
Fair value
2024
£m
Book value
2023
£m
Fair value
2023
£m
Items carried at fair value
Interest rate cap (asset)
(0.4)
(0.4)
–
–
Items not carried at fair value
£21.9 million 55⁄8% debenture stock 2029
22.0
22.0
22.0
22.4
£450.0 million revolving credit facility
46.1
46.1
12.8
12.8
£250.0 million term loan
248.3
248.3
–
–
Private placement notes
424.0
373.3
423.7
339.9
740.0
689.3
458.5
375.1
The fair values of the Group’s private placement notes were determined by comparing the discounted future cash flows using
the contracted yields with those of the reference gilts plus the implied margins, representing Level 2 fair value measurements
as defined by IFRS 13 – Fair Value Measurement. The fair values of the Group’s outstanding interest rate cap has been estimated
by calculating the present value of future cash flows, using appropriate market discount rates, representing Level 2 fair value
measurements as defined by IFRS 13. The fair values of the Group’s cash and cash equivalents and trade payables and receivables
are not materially different from those at which they are carried in the financial statements.
The following table details the principal amounts and remaining terms of interest rate derivatives outstanding:
Average contracted
fixed interest rate
Notional
principal amount
Fair value asset
2024
%
2023
%
2024
£m
2023
£m
2024
£m
2023
£m
Cash flow hedges
Interest rate cap
5.094%
–
200.0
–
0.4
–
The Group entered a £200 million interest rate cap (at a cost of £2.1 million) effective from 9 October 2023 and expires in
September 2025.
18 Head lease obligations
Head lease obligations in respect of the Group’s leasehold properties are payable as follows:
Minimum
lease
payments
2024
£m
Interest
2024
£m
Principal
payments
2024
£m
Minimum
lease
payments
2023
£m
Interest
2023
£m
Principal
payments
2023
£m
Less than one year
2.9
(2.9)
–
2.4
(2.4)
–
Between one and five years
11.5
(11.3)
0.2
9.7
(9.5)
0.2
More than five years
358.0
(284.1)
73.9
304.5
(238.0)
66.5
372.4
(298.3)
74.1
316.6
(249.9)
66.7
Financial statements
173
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
19 Occupational lease obligations
Obligations in respect of the Group’s occupational leases for its head office are payable as follows:
Minimum
lease
payments
2024
£m
Interest
2024
£m
Principal
payments
2024
£m
Minimum
lease
payments
2023
£m
Interest
2023
£m
Principal
payments
2023
£m
Less than one year
1.0
–
1.0
1.0
–
1.0
Between one and five years
–
–
–
1.0
–
1.0
1.0
–
1.0
2.0
–
2.0
20 Share capital
2024
Number
2024
£m
2023
Number
2023
£m
Allotted, called up and fully paid ordinary shares of 155⁄19 pence
At 1 April and 31 March
253,867,911
38.7
253,867,911
38.7
At 31 March 2024, the Company had 253,867,911 ordinary shares with a nominal value of 155⁄19 pence each.
21 Investment in own shares
2024
£m
2023
£m
At 1 April
(2.8)
(3.6)
Employee share-based incentive charges
(4.0)
(1.3)
Transfer to retained earnings
1.2
2.1
At 31 March
(5.6)
(2.8)
The investment in the Company’s own shares is held at cost and comprises 887,159 shares (2023: 887,159 shares) held by the
Great Portland Estates plc LTIP Employee Share Trust, which will vest for certain senior employees of the Group if performance
conditions are met. During the year, no shares (2023: 192,112) vested to Directors and senior employees and no additional shares
were acquired by the Trust (2023: 201,936). The fair value of shares awarded and outstanding at 31 March 2024 was £9.8 million
(2023: £8.4 million).
Details of outstanding share plans are set out below:
Date of Grant/Fair value (pence)
At 1 April 2023
No. of shares
Granted
No. of shares
Vested
No. of shares
Lapsed/
forfeit
No. of shares
At 31 March
2024
No. of shares
Vesting dates
Long Term Incentive Plan
29 July 2020/581p
1,619,621
–
–
(1,619,621)
–
28 July 2023
12 November 2020/704p
19,522
–
–
(19,522)
–
11 November 2023
7 June 2021/733p
1,358,980
–
–
(19,545)
1,339,435
6 June 2024
27 May 2022/645p
1,926,632
–
–
(126,942)
1,799,690
26 May 2025
Restricted Share Plan
7 July 2023/422p
–
1,220,784
–
(119,474)
1,101,310
6 July 2026
24 November 2023/408p
–
10,283
–
–
10,283
23 November 2026
4,924,755
1,231,067
–
(1,905,104)
4,250,718
174
Great Portland Estates plc Annual Report 2024
22 Cash and cash equivalents
2024
£m
2023
£m
Cash held at bank (unrestricted)
5.9
3.2
Amounts held in respect of customer rent deposits (restricted)
17.0
16.2
22.9
19.4
Amounts held in respect of customer rent deposits are subject to restrictions as set out in the customers’ lease agreement
and therefore not available for general use by the Group.
23 Notes to the Group statement of cash flows
Reconciliation of financing liabilities
1 April
2023
£m
New
obligations
£m
Inflows/
(outflows)
£m
Other
non-cash
movements
£m
31 March
2024
£m
Long-term interest-bearing loans and borrowings
458.5
248.0
33.5
(174.6)
565.4
Short-term interest-bearing loans and borrowings
–
–
–
175.0
175.0
Obligations under leases
68.7
7.4
(3.3)
2.3
75.1
527.2
255.4
30.2
2.7
815.5
1 April
2022
£m
New
obligations
£m
Inflows/
(outflows)
£m
Other non
cash
movements
£m
31 March
2023
£m
Long-term interest-bearing loans and borrowings
531.0
–
(73.0)
0.5
458.5
Short-term interest-bearing loans and borrowings
0.2
–
(0.2)
–
–
Obligations under leases
58.5
11.1
(3.3)
2.4
68.7
589.7
11.1
(76.5)
2.9
527.2
Adjustment for non-cash items
Adjustments for non-cash items used in the reconciliation of cash generated used in operations in the Group statement of cash
flows’ is disclosed below:
2024
£m
2023
£m
Deficit from investment property
267.3
145.0
Deficit/(surplus) on revaluation of other investments
0.2
(0.1)
Employee share-based incentive charge
4.0
1.3
Spreading of lease incentives
(5.7)
(5.9)
Share of results of joint ventures
46.7
33.4
Depreciation
1.6
1.7
Other
(0.7)
(0.3)
Adjustments for non-cash items
313.4
175.1
24 Dividends
2024
£m
2023
£m
Dividends paid
Interim dividend for the year ended 31 March 2024 of 4.7 pence per share
11.9
–
Final dividend for the year ended 31 March 2023 of 7.9 pence per share
20.0
–
Interim dividend for the year ended 31 March 2023 of 4.7 pence per share
–
11.9
Final dividend for the year ended 31 March 2022 of 7.9 pence per share
–
20.0
31.9
31.9
A final dividend of 7.9 pence per share was approved by the Board on 22 May 2024 and, subject to shareholder approval, will be paid
on 8 July 2024 to shareholders on the register on 31 May 2024. The dividend is not recognised as a liability at 31 March 2024. The 2023
final dividend and the 2023 interim dividend are included within the Group statement of changes in equity.
Financial statements
175
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
25 Lease receivables
Future aggregate minimum rentals receivable under non-cancellable leases are:
2024
£m
2023
£m
The Group as a lessor
Less than one year
66.0
58.3
Between two and five years
141.0
129.9
More than five years
62.9
66.7
269.9
254.9
The Group leases its investment properties under operating leases. The weighted average length of lease at 31 March 2024
was 3.4 years (2023: 3.2 years). All investment properties, except those under development, generated rental income, and
£nil contingent rents were recognised in the year (2023: £nil).
26 Employee benefits
The Group operates a UK-funded approved defined contribution plan. The Group’s contribution for the year was £1.8 million
(2023: £1.5 million). The Group also contributes to a defined benefit final salary pension plan (the Plan), the assets of which
are held and managed by trustees separately from the assets of the Group. The Plan has been closed to new entrants since
April 2002. The most recent actuarial valuation of the Plan was conducted at 1 April 2023 by a qualified independent actuary
using the projected unit method. The Plan was valued using the following key actuarial assumptions:
2024
%
2023
%
Discount rate
4.90
4.80
Expected rate of salary increases
4.10
4.20
RPI inflation
3.10
3.20
Rate of future pension increases
2.90
2.90
Life expectancy assumptions at age 65:
2024
Years
2023
Years
Retiring today age 65 – male:female
23:25
25:26
Retiring in 25 years (age 40 today) – male:female
25:27
27:29
Changes in the present value of the pension obligation are as follows:
2024
£m
2023
£m
Defined benefit obligation at 1 April
26.9
35.9
Service cost
0.2
0.3
Interest cost
1.2
1.1
Effect of changes in demographic assumptions
(1.9)
–
Effect of changes in financial assumptions
(0.5)
(10.5)
Effect of experience adjustments
1.3
1.1
Benefits paid
(1.3)
(1.0)
Present value of defined benefit obligation at 31 March
25.9
26.9
176
Great Portland Estates plc Annual Report 2024
26 Employee benefits continued
Changes to the fair value of the Plan assets are as follows:
2024
£m
2023
£m
Fair value of the Plan assets at 1 April
31.0
39.4
Interest income
1.5
1.1
Actuarial loss
(1.0)
(9.1)
Employer contributions
0.6
0.6
Benefits paid
(1.3)
(1.0)
Fair value of the Plan assets at 31 March
30.8
31.0
Net pension asset
4.9
4.1
The amount recognised immediately in the Group statement of comprehensive income was £0.1 million (2023: £0.3 million).
The amount recognised in the balance sheet in respect of the Plan is as follows:
2024
£m
2023
£m
Present value of unfunded obligations
(25.9)
(26.9)
Fair value of the Plan assets
30.8
31.0
Pension asset
4.9
4.1
Amounts recognised as administration expenses in the income statement are as follows:
2024
£m
2023
£m
Current service cost
(0.2)
(0.3)
Net interest income
0.3
–
0.1
(0.3)
All equity and debt instruments have quoted prices in active markets. The fair value of the Plan assets at the balance sheet date
is analysed as follows:
2024
£m
2023
£m
Cash
0.1
0.1
Equities
1.6
11.9
Bonds
27.6
19.0
Derivatives
1.5
–
30.8
31.0
Other than market and demographic risks, which are common to all retirement benefit schemes, there are no specific risks
in the relevant benefit schemes which the Group considers to be significant or unusual. Detail on two of the more specific risks
are detailed below:
Changes in bond yields
Falling bond yields tend to increase the funding and accounting liabilities. However, the investment in corporate and government
bonds offers a degree of matching, i.e. the movement in assets arising from changes in bond yields partially matches the
movement in the funding or accounting liabilities. In this way, the exposure to movements in bond yields is reduced.
Financial statements
177
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Group financial statements continued
26 Employee benefits continued
Life expectancy
The majority of the obligations are to provide a pension for the life of the member on retirement, so increases in life expectancy
will result in an increase in the liabilities. The inflation-linked nature of the majority of benefit payments increases the sensitivity
of the liabilities to changes in life expectancy.
The effect on the defined benefit obligation of changing the key assumptions, calculated using approximate methods based
on historical trends, is set out below:
2024
£m
2023
£m
Discount rate -0.25%
26.9
27.9
Discount rate +0.25%
25.1
26.0
RPI inflation -0.25%
25.6
26.5
RPI inflation +0.25%
26.3
27.4
Post-retirement mortality assumption – one year age rating
26.9
27.9
Given the Plan surplus, the Group has agreed to pause contributions to the Plan. Accordingly, the Group expects to contribute
£nil (2023: £0.6 million) to the Plan in the year ending 31 March 2024. The expected total benefit payments for the year ending
31 March 2024 are £0.9 million, rising to around £1.1 million per annum over the next five years. A total of c.£6.6 million is expected
to be paid over the subsequent five year period.
27 Reserves
The following describes the nature and purpose of each reserve within equity:
Share capital: The nominal value of the Company’s issued share capital, comprising 155⁄19 pence ordinary shares.
Share premium: Amount subscribed for share capital in excess of nominal value, less directly attributable issue costs.
Capital redemption reserve: Amount equivalent to the nominal value of the Company’s own shares acquired as a result
of share buyback programmes.
Retained earnings: Cumulative net gains and losses recognised in the Group income statement together with other items
such as dividends.
Investment in own shares: Amount paid to acquire the Company’s own shares for its Employee Long-Term Incentive Plan
less accounting charges.
178
Great Portland Estates plc Annual Report 2024
Independent auditors’ report
to the members of Great Portland Estates plc
Report on the audit of the financial statements
Opinion
In our opinion:
– Great Portland Estates plc’s group financial statements and company financial statements (the “financial statements”)
give a true and fair view of the state of the group’s and of the company’s affairs as at 31 March 2024 and of the group’s loss
and the group’s cash flows for the year then ended;
– the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards as applied in accordance with the provisions of the Companies Act 2006;
– the company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework”, and applicable law); and
– the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts (the “Annual Report”), which comprise:
the group and company Balance Sheets as at 31 March 2024; the group Income Statement, the group Statement of Comprehensive
Income, the group Statement of Cash Flows, and the group and company Statement of Changes in Equity for the year then ended;
and the notes to the financial statements, comprising material accounting policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial statements section
of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were
not provided.
Other than those disclosed in Note 5 to the Financial Statements, we have provided no non-audit services to the company
or its controlled undertakings in the period under audit.
Our audit approach
Context
The year ended 31 March 2024 is our first year as the external auditors of the group. Following the external audit tender in 2022,
we undertook certain transition activities, including attending key governance meetings during the 2023 financial reporting process.
In planning for our first year audit, we met with the Audit Committee and members of management across the group to understand
the business and any significant changes during the year, and to understand their perspectives on associated business risks.
We used this insight, in addition to our reviewing the previous auditors’ audit work papers, when forming our own views regarding
the audit risks and as part of developing our planned audit approach to address those risks.
Overview
Audit scope
– Our audit scope has been determined to provide coverage of all material financial statement line items, and as part of
designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
– The group’s investment properties are held across a number of subsidiary and joint venture entities within the group
financial statements. All work was carried out by the group audit team with additional procedures performed at the group
level to ensure sufficient coverage for our opinion on the group financial statements as a whole.
Key audit matters
– Valuation of investment properties, either held directly or through joint ventures (group).
– Recoverability of investments and loans to subsidiaries and joint ventures (parent).
Materiality
– Overall group materiality: £24.7 million based on 1% of total assets.
– Overall company materiality: £22.3 million based on 1% of total assets.
– Performance materiality: £18.5 million (group) and £16.7 million (company).
– Specific group materiality: £0.89 million based on 5% of the group’s adjusted profit before tax.
Financial statements
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Independent auditors’ report continued
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit
of the financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and
any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Key audit matter
How our audit addressed the key audit matter
Valuation of investment properties,
either held directly or through joint
ventures (group)
Refer to the Audit Committee Report and
the Financial Statements (including notes to
the Financial Statements; Note 1, Accounting
policies; Note 10, Investment property; and
Note 11, Investments in joint ventures).
We focused on the valuation of investment
properties because investment properties
represent the principal element of the net
asset value as disclosed in the group Balance
Sheet in the Financial Statements and is an
area of significant estimation uncertainty.
The portfolio is held by the group, and
through joint ventures.
The portfolio includes completed investment
properties and properties under development.
The valuation of the group’s portfolio is
inherently subjective due to, among other
factors, the individual nature of each property,
its location and the expected future rentals
for that particular property. The wider
challenges currently facing the real estate
sector as a result of the macroeconomic
environment further contributed to the
subjectivity at 31 March 2024.
Valuations are carried out by third party
valuers CBRE (the ‘Valuers’). The Valuers were
engaged by the Directors, and performed
their work in accordance with the Royal
Institution of Chartered Surveyors (‘RICS’)
Valuation – Global Standards 2022. The
valuations take into account the property-
specific information including the current
tenancy agreements and rental income,
condition and location of the property, and
future rental prospects, as well as prevailing
market yields and market transactions.
Given the inherent subjectivity involved in the valuation of investment properties,
and therefore the need for deep market knowledge when determining the most
appropriate assumptions, and the technicalities of the valuation methodology,
we engaged our internal valuation experts to assist us in our audit of this matter.
Assessing group’s external Valuers’ expertise and objectivity
We assessed the Valuers’ qualifications and expertise and read their terms of
engagement with the group to determine whether there were any matters that
might have affected their objectivity or may have imposed scope limitations
upon their work. We also considered fees and other contractual arrangements
that might exist between the group and the Valuers. We found no evidence to
suggest that the objectivity of the Valuers was compromised.
Testing the valuations assumptions and capital movement
We obtained and read the CBRE valuation reports covering all of the group’s
investment properties. We held meetings with management and the Valuers,
at which the valuations and the key assumptions therein were discussed. We
focused on the largest properties, properties under development, flex spaces,
short leaseholds and any outliers (where the assumptions used and/or year on
year capital value movement were out of line with our range of assumptions
developed using externally published market data for the relevant sector).
To verify that the valuation approach was suitable for use in determining the
carrying value for investment properties in the Financial Statements, we:
– Confirmed that the valuation approach was in accordance with RICS standards;
– Obtained valuation details of every property held by the group and
developed ranges for each key valuation assumption or capital value
movement, determined by reference to published benchmarks and using
our experience and knowledge of the market. We compared the investment
yields used by the Valuers with the expected range of yields and the year
on year capital movement to our expected range;
– Assessed the reasonableness of other assumptions that are not readily
comparable with published benchmarks, such as Estimated Rental Value;
– For developments valued using the residual valuation method, we obtained
the development appraisals and assessed the reasonableness of the Valuers’
key assumptions. This included comparing the yield to comparable market
benchmarks, comparing the costs to complete estimates to development
plans and contracts, and considering the reasonableness of other assumptions
that are not so readily comparable with published benchmarks, such as
estimated rental value and developers’ profit; and
– With the support of our internal valuation experts, we also questioned the
Valuers as to the extent to which yields and expected rental values used
in deriving their valuations took into account the impact of climate change
and ESG considerations.
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Key audit matter
How our audit addressed the key audit matter
Valuation of investment properties,
either held directly or through joint
ventures (group) continued
In addition to the above, where assumptions were outside the expected
range or otherwise appeared unusual, and/or valuations showed unexpected
movements, we undertook further investigations and, when necessary,
held further discussions with the Valuers and obtained evidence to support
explanations received. The supporting evidence and valuation commentaries
provided by the Valuers, enabled us to consider the property specific factors
that had or may have had an impact on value, including recent comparable
transactions where appropriate.
Information and standing data
We agreed the amounts per the valuation reports to the accounting records
and from there we agreed the related balances through to the Financial
Statements. We tested the standing data which the group provided to the
Valuers for use in the performance of the valuation. For operating properties,
we agreed tenancy information to supporting evidence on a sample basis.
For properties under development, we confirmed that the supporting information
for construction contracts and budgets, which was supplied to the Valuers,
was also consistent with the group’s records for example by inspecting
construction contracts. For these properties, capitalised expenditure was
tested on a sample basis to invoices, and budgeted costs to complete
compared to supporting evidence.
We have no matters to report in respect of our work over the valuation
of investment properties.
Recoverability of investments and loans
to subsidiaries and joint ventures (parent)
Refer to the Financial Statements
(including notes to the Financial Statements;
Note 1, Accounting policies; Note 11,
Investments in joint ventures; and Note iii,
Fixed asset investments).
The company has investments in subsidiaries
of £1,240.6 million (2023: £1,240.8 million)
and loans to subsidiaries of £761.2 million
(2023: £548.4 million) at 31 March 2024. The
company has investments in joint ventures
of £0.1 million (2023: £0.1 million) and loans
to joint ventures of £213.5 million (2023: £214.4
million) at 31 March 2024. This is following the
recognition of a £11.2 million (2023: £2.2 million)
provision for impairment in investments
and loans to subsidiaries, and a £0.0 million
(2023: £0.1 million) provision for impairment
investments and loans to joint ventures in
the year.
The company’s accounting policy for
investments and loans is to hold them at
cost less any impairment. Impairment of the
loans is calculated in accordance with IFRS 9,
where expected credit losses are considered
to be the excess of the company’s loan to a
subsidiary over the subsidiary net asset value.
Investments in subsidiaries and joint ventures
are assessed for impairment in line with IAS 36.
We assessed the accounting policy for investments and loans to subsidiaries
and joint ventures to ensure they were compliant with FRS 101 “Reduced
Disclosure Framework”. We obtained management’s impairment assessments
for the recoverability of investments and loans in subsidiaries and joint
ventures as at 31 March 2024.
We verified that the methodology used by management in arriving at the
carrying value of the investments in subsidiaries and joint ventures was in line
with IAS 36 Impairment of Assets, and that for loans to subsidiaries and joint
ventures the expected credit loss was in line with IFRS 9 Financial Instruments,
including the related provision for impairment of investments and loans.
We identified the key estimate within the assessment of impairment of the
investments and loans to subsidiaries and joint ventures to be the underlying
valuation of investment property held by the subsidiaries and joint ventures.
For details of our procedures over investment property valuations please
refer to the related group key audit matter above.
We have no matters to report in respect of this work.
Financial statements
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Independent auditors’ report continued
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls,
and the industry in which they operate.
The group’s investment properties are held across a number of subsidiary and joint venture entities within the group
financial statements. All work was carried out by the group audit team with additional procedures performed at the group
level to ensure sufficient coverage for our opinion on the group financial statements as a whole.
The group operates a common IT environment, processes and controls across all reported segments. In establishing the
overall approach to our audit, we assessed the risk of material misstatement, taking into account the nature, likelihood and
potential magnitude of any misstatement. Following this assessment, we applied professional judgement to determine
the extent of testing required over each balance in the financial statements.
In respect of the audit of the company, the group audit team performed a full scope statutory audit, leveraging on the
work performed on the group audit where appropriate with additional audit procedures performed on other company
specific balances.
The impact of climate risk on our audit
In planning our audit, we made enquiries with management to understand the extent of the potential impact of climate change
risk on the financial statements. Our evaluation of this conclusion included challenging key judgements and estimates in areas
where we considered that there was greatest potential for climate change impact. We particularly considered how climate
change risks would impact the assumptions made in the valuation of investment properties as explained in our key audit
matter above. We also considered the consistency of the disclosures in relation to climate change made within the Annual Report,
the financial statements and the knowledge obtained from our audit. We assessed the consideration of the cost of delivering
the group’s climate change and sustainability strategy within the going concern and viability forecasts.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect
of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – group
Financial statements – company
Overall materiality
£24.7 million.
£22.3 million.
How we determined it
1% of total assets.
1% of total assets.
Rationale for
benchmark applied
The primary measurement attribute of the group
is the carrying value of investment properties.
On this basis,we set an overall group materiality
level based on total assets.
The primary measurement attribute of the
company is the carrying value of investments
in subsidiaries. On this basis, we set an overall
company materiality level based on total assets.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality.
The range of materiality allocated across components was between £1.1 million and £22.3 million. Certain components were
audited to a local statutory audit materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope
of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example
in determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to £18.5 million for the
group financial statements and £16.7 million for the company financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £1.2 million
(group audit) and £1.1 million (company audit) as well as misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
In addition we agreed with the Audit Committee that we would report to them misstatements identified during our group
audit above £0.04 million for misstatements related to adjusted profit before tax within the financial statements, as well as
misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
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Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern
basis of accounting included:
– Procedures to identify events or conditions that may cast significant doubt on the ability to continue as a going concern
and whether or not a material uncertainty related to going concern exists;
– Obtaining the directors’ assessment of going concern and assessing the current impact of severe, but plausible, downside
scenarios and the basis for the downside stress scenarios that have been applied;
– Evaluation and corroboration of management’s significant assumptions used to assess going concern, including whether
or not they align with our understanding of the entity and other relevant areas of the entity’s business activities; and
– Considered the appropriateness of the mitigating actions available to management in the event of the downside scenario
materialising. Specifically, we focused on whether these actions are within the group’s control and are achievable.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s and the company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s
and the company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material
to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’
report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated
in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact. We have nothing to report
based on these responsibilities.
With respect to the Strategic report and Report of the Directors, we also considered whether the disclosures required by the
UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic report and Report of the Directors
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Report of the Directors for the year ended 31 March 2024 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of
the audit, we did not identify any material misstatements in the Strategic report and Report of the Directors.
Directors’ Remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with
the Companies Act 2006.
Financial statements
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Independent auditors’ report continued
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of
the corporate governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance
Code specified for our review. Our additional responsibilities with respect to the corporate governance statement as other
information are described in the Reporting on other information section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate
governance statement is materially consistent with the financial statements and our knowledge obtained during the audit,
and we have nothing material to add or draw attention to in relation to:
– The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
– The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging
risks and an explanation of how these are being managed or mitigated;
– The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them, and their identification of any material uncertainties to the group’s and company’s
ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;
– The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this assessment covers
and why the period is appropriate; and
– The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in
operation and meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group and company was substantially less in
scope than an audit and only consisted of making inquiries and considering the directors’ process supporting their statement;
checking that the statement is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering
whether the statement is consistent with the financial statements and our knowledge and understanding of the group and
company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
corporate governance statement is materially consistent with the financial statements and our knowledge obtained during
the audit:
– The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable,
and provides the information necessary for the members to assess the group’s and company’s position, performance,
business model and strategy;
– The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
– The section of the Annual Report describing the work of the Audit Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s
compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the
Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Directors’ responsibilities statement, the directors are responsible for the preparation of the
financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view.
The directors are also responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or the company or to cease operations, or have no
realistic alternative but to do so.
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Great Portland Estates plc Annual Report 2024
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent
to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and
regulations related to compliance with the Real Estate Investment Trust (REIT) status Part 12 of the Corporation Tax Act 2010 and
UK regulatory principles, such as those governed by the Listings Rules, and we considered the extent to which non-compliance
might have a material effect on the financial statements. We also considered those laws and regulations that have a direct
impact on the financial statements such as Companies Act 2006. We evaluated management’s incentives and opportunities
for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the
principal risks were related to posting inappropriate journal entries to increase revenue, and management bias in accounting
estimates and judgemental areas of the financial statements such as the valuation of investment properties. Audit procedures
performed by the engagement team included:
– Discussions with management and internal audit, including consideration of known or suspected instances of non-compliance
with laws and regulations and fraud, and review of the reports made by internal audit;
– Understanding management’s internal controls designed to prevent and detect irregularities;
– Reviewing the group’s litigation register in so far as it related to non-compliance with laws and regulations and fraud;
– Reviewing relevant meeting minutes, including those of the Board of Directors and the Audit Committee;
– Designing audit procedures to incorporate unpredictability around the nature, timing and extent of our testing;
– Reviewing tax compliance with the involvement of our tax specialists in the audit;
– Challenging assumptions and judgements made by management in their significant areas of estimation including
procedures relating to the valuation of investment properties; and
– Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations,
or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations.
We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the population from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Financial statements
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Independent auditors’ report continued
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
– we have not obtained all the information and explanations we require for our audit; or
– adequate accounting records have not been kept by the company, or returns adequate for our audit have not been
received from branches not visited by us; or
– certain disclosures of directors’ remuneration specified by law are not made; or
– the company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement
with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit Committee, we were appointed by the members on 6 July 2023 to audit the
financial statements for the year ended 31 March 2024 and subsequent financial periods. This is therefore our first year
of uninterrupted engagement.
Other matter
The company is required by the Financial Conduct Authority Disclosure Guidance and Transparency Rules to include these
financial statements in an annual financial report prepared under the structured digital format required by DTR 4.1.15R – 4.1.18R
and filed on the National Storage Mechanism of the Financial Conduct Authority. This auditors’ report provides no assurance
over whether the structured digital format annual financial report has been prepared in accordance with those requirements.
Saira Choudhry
(Senior Statutory Auditor)
For and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
22 May 2024
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Great Portland Estates plc Annual Report 2024
Notes
2024
£m
2023
£m
Non-current assets
Fixed asset investments
iii
1,240.7
1,240.9
Amounts owed by subsidiary undertakings
761.2
548.4
Amounts owed by joint ventures
213.5
214.4
Derivative financial instruments
17
0.4
–
2,215.8
2,003.7
Current assets
Other debtors
6.6
1.3
Deferred tax
vi
–
1.2
Cash at bank and short-term deposits
6.0
9.2
12.6
11.7
Total assets
2,228.4
2,015.4
Current liabilities
iv
(1,205.0)
(1,023.2)
Non-current liabilities
Interest-bearing loans and borrowings
v
(565.4)
(458.5)
(565.4)
(458.5)
Total liabilities
(1,770.4)
(1,481.7)
Net assets
458.0
533.7
Capital and reserves
Share capital
20
38.7
38.7
Share premium account
46.0
46.0
Capital redemption reserve
326.7
326.7
Retained earnings
41.0
119.5
Investment in own shares
21
5.6
2.8
Shareholders’ funds
458.0
533.7
Notes: The loss within the Company financial statements was £47.8 million (2023: £25.0 million). References in roman numerals refer
to the notes to the Company financial statements, references in numbers refer to the notes to the Group financial statements.
The financial statements of Great Portland Estates plc (registered number: 00596137) were approved by the Board on
22 May 2024 and signed on its behalf by:
Toby Courtauld
Nick Sanderson
Chief Executive
Chief Financial & Operating Officer
Company balance sheet
At 31 March 2024
Financial statements
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Annual Report 2024 Great Portland Estates plc
Notes
Share
capital
£m
Share
premium
account
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Investment
in own
shares
£m
Total
equity
£m
Total equity at 1 April 2023
38.7
46.0
326.7
119.5
2.8
533.7
Loss for the year and total
comprehensive expense
–
–
–
(47.8)
–
(47.8)
Dividends to shareholders
24
–
–
–
(31.9)
–
(31.9)
Employee Long-Term Incentive Plan charge
21
–
–
–
–
4.0
4.0
Transfer to retained earnings
21
–
–
–
1.2
(1.2)
–
Total equity at 31 March 2024
38.7
46.0
326.7
41.0
5.6
458.0
At 31 March 2024, the Company had unaudited realised profits available for distribution of approximately £30 million.
Company statement of changes in equity
For the year ended 31 March 2023
Notes
Share
capital
£m
Share
premium
account
£m
Capital
redemption
reserve
£m
Retained
earnings
£m
Investment
in own
shares
£m
Total
equity
£m
Total equity at 1 April 2022
38.7
46.0
326.7
174.3
3.6
589.3
Loss for the year and total
comprehensive expense
–
–
–
(25.0)
–
(25.0)
Dividends to shareholders
24
–
–
–
(31.9)
–
(31.9)
Employee Long-Term Incentive Plan charge
21
–
–
–
–
1.3
1.3
Transfer to retained earnings
21
–
–
–
2.1
(2.1)
–
Total equity at 31 March 2023
38.7
46.0
326.7
119.5
2.8
533.7
Company statement of changes in equity
For the year ended 31 March 2024
188
Great Portland Estates plc Annual Report 2024
Notes forming part of the Company financial statements
i Accounting policies
Accounting convention
Great Portland Estates plc is a public company limited by shares incorporated and domiciled in the United Kingdom
(England and Wales). The address of the registered office is given on page 202. The financial statements have been prepared
on the historical cost basis except for the remeasurement of certain financial instruments to fair value. Historical cost is
generally based on the fair value of the consideration given in exchange for the goods and services. There were no significant
judgements made or critical estimates applied in the preparation of the financial statements.
Disclosure exemptions adopted
The separate financial statements of the Company are presented as required by the Companies Act 2006. The Company meets
the definition of a qualifying entity under FRS 100 (Financial Reporting Standard 100) issued by the Financial Reporting Council.
Accordingly, the financial statements have therefore been prepared in accordance with FRS 101 (Financial Reporting Standard
101) Reduced Disclosure Framework as issued by the Financial Reporting Council incorporating the Amendments to FRS 101
issued by the FRC in July 2015 and July 2016.
In preparing these financial statements, Great Portland Estates plc has taken advantage of all disclosure exemptions conferred
by FRS 101. Therefore these financial statements do not include:
– certain comparative information as otherwise required by the United Kingdom adopted international accounting standards;
– certain disclosures regarding the Company’s capital;
– a statement of cash flows;
– certain disclosures in respect of financial instruments;
– the effect of future accounting standards not yet adopted; and
– disclosure of related party transactions with wholly-owned members of the Group.
The above disclosure exemptions have been adopted because equivalent disclosures are included in the consolidated Group
accounts into which Great Portland Estates plc is consolidated.
Subsidiary undertakings and joint ventures
The Company is a holding and financing company for the Great Portland Estates plc Group. Shares in subsidiary undertakings
and joint ventures are carried at amounts equal to their original cost less any provision for impairment.
Amounts owed by subsidiary undertakings and joint ventures are expected to remain outstanding for the foreseeable future and
therefore deemed long term in nature and classified as non-current assets and are stated at amortised cost including a provision
for expected credit losses. For the purposes of impairment assessment, amounts to subsidiary undertakings and joint ventures
are considered low credit risk and, therefore, the Company measures the provision at an amount equal to 12-month expected
credit losses. Provision for expected credit losses in the current and prior year are immaterial.
Other
Accounting policies for share-based payments, other investment, deferred tax and financial instruments are the same as those
of the Group and are set out on pages 152 to 155.
The Company participates in a Group defined benefit scheme which is the legal responsibility of Great Portland Estates Services
Limited as the sponsoring employer. There is no contractual agreement or stated policy for charging the net defined benefit
cost. In accordance with IAS 19 (Revised 2011), the Company accounts for the contributions to the scheme as if it were a defined
contribution scheme. Details of the Group’s pension plan can be found on pages 176 to 178.
The auditor’s remuneration for audit and other services is disclosed in note 4 to the Group accounts.
ii Profit attributable to members of the parent undertaking
As permitted by section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account.
The loss dealt within the financial statements of the Company was £47.8 million (2023: £25.0 million). The employees of the
Company are the Directors and the Company Secretary. Full disclosure of the Directors’ remuneration can be found on
pages 124 to 143.
Financial statements
189
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Company financial statements continued
iii Fixed asset investments
Investment in
joint ventures
£m
Shares in
subsidiary
undertakings
£m
Total
£m
At 1 April 2023
0.1
1,240.8
1,240.9
Additions
–
11.0
11.0
Impairment
–
(11.2)
(11.2)
31 March 2024
0.1
1,240.6
1,240.7
Shares in subsidiary undertakings and joint ventures are carried at cost less any provision for impairment. The historical cost
of the shares in subsidiary undertakings and joint ventures at 31 March 2024 was £1,240.7 million (2023: £1,240.9 million).
The subsidiaries of the Company at 31 March 2024 were:
Direct subsidiaries
The Company has a 100% interest in the ordinary share capital of the following entities:
Principal activity
Principal activity
Great Portland Estates Services
Limited (00517550)
Property management
G.P.E. (St Thomas Street) Limited
(05593274)
Property investment
Collin Estates Limited*
(00349259)
Property investment
J.L.P. Investment Company Limited
(00459857)
Property investment
Courtana Investments Limited
(00764696)
Property investment
Knighton Estates Limited
(00379493)
Property investment
G.P.E. (Bermondsey Street) Limited
(05593239)
Property investment
Pontsarn Investments Limited
(00611070)
Property investment
73/77 Oxford Street Limited
(00628026)
Property investment
Portman Square Properties Holdings
Limited (06049187)
Holding company
GPE (Brook Street) Limited*
(09144095)
Property investment
GPE Pension Trustee Limited
(05406955)
Corporate trustee
GPE (GHS) Limited*
(08737134)
Property investment
G.P.E. (Marcol House) Limited
(07046709)
Holding company
Gresse Street Limited*
(05279893)
Property investment
G.P.E. (Rathbone Place 1) Limited
(0774083)
Property investment
GPE (Dufour’s Place) Limited*
(14078313)
Property investment
GPE St Andrew Street Limited*
(14085827)
Property investment
GPE (Soho Square) Limited
(15088898)
Property investment
GPE (Piccadilly) Limited
(14832783)
Property investment
GPE (Bramah House) Limited*
(14790117)
Property investment
GPE (135-141 Wardour Street) Limited*
(14780172)
Property investment
G.P.E. Construction Limited*
(04936146)
Development
management
G.P.E. (Rathbone Place 2) Limited
(07754121)
Property investment
The Rathbone Place Partnership
(G.P. 1) Limited (07740829)
Property investment
G.P.E. (Rathbone Place 3) Limited
(07754130)
Property investment
King Sloane Properties Limited
(22867/OE027819)
Property investment
* Great Portland Estates plc has guaranteed the liabilities of these subsidiaries under section 479A and C of the Companies Act 2006 (as amended).
As such, these subsidiaries will take advantage of the audit exemption set out within section 479A for the year ended 31 March 2024.
190
Great Portland Estates plc Annual Report 2024
iii Fixed asset investments continued
Indirect subsidiaries
Principal activity
Principal activity
The Rathbone Place Partnership
(G.P. 2) Limited (07742507)
Property investment
Portman Square Properties Limited
(03872261)
Property investment
The Rathbone Place Limited
Partnership** (LP014603)
Property investment
G.P.E. (Newman Street) Limited*
(07796204)
Property investment
Rathbone Square No. 1 Limited
(04122795)
Property investment
Rathbone Square No.2 Limited
(04122784)
Property investment
The Newman Street Unit Trust
Property investment
Marcol House Jersey Limited
(95425)
Property investment
** The Group has taken advantage of the exemption, which is conferred by The Partnerships (Accounts) Regulations 2008, for preparing financial statements
for The Rathbone Place Limited Partnership.
Directly held joint venture entities
Principal activity
Principal activity
The Great Victoria Partnership
(G.P.) Limited (05216728)
Property investment
The Great Victoria Partnership
(G.P.) (No. 2) Limited (05375913)
Property investment
Great Ropemaker Partnership
(G.P.) Limited (06526534)
Property investment
GHS (GP) Limited
(114189)
Property investment
Indirectly held joint venture entities
Principal activity
Principal activity
Great Victoria Property Limited
(05208609)
Property investment
The Great Victoria Partnership
(LP009971)
Property investment
The Great Victoria Partnership (No. 2)
(LP010380)
Property investment
Great Victoria Property (No. 2) Limited
(05385912)
Property investment
Great Ropemaker Property Limited
(06526552)
Property investment
The Great Ropemaker Partnership
(LP012802)
Property investment
Great Ropemaker Property
(Nominee 1) Limited (07830921)
Property investment
Great Ropemaker Property
(Nominee 2) Limited (07830923)
Property investment
The GHS Limited Partnership
(1697)
Property investment
GPE (Hanover Square) Limited
(03723180)
Property investment
14 Brook Street Management
Company Limited (12938268)
Property investment
GHS (Nominee) Limited
(114197)
Property investment
All of the above companies are registered at 33 Cavendish Square, London, W1G 0PW and operate in England and Wales
except for: Marcol House Jersey Limited, GHS (GP) Limited, GHS (Nominee) Limited and The GHS Limited Partnership, which are
registered at 44 Esplanade, St Helier, Jersey, JE4 9WG, The Newman Street Unit Trust, which is registered at 11 Old Jewry, London,
EC2R 8DU and King Sloane Properties Limited, which is registered in One Welches, Welches, St. Thomas BB22025, Barbados.
Great Portland Estates plc is the ultimate parent undertaking of the GPE Group.
Financial statements
191
Annual Report 2024 Great Portland Estates plc
Notes forming part of the Company financial statements continued
iv Current liabilities
2024
£m
2023
£m
Amounts owed to subsidiary undertakings
1,017.6
1,014.0
Interest bearing loans and borrowings
175.0
–
Other creditors
–
1.0
Accruals
12.4
8.2
1,205.0
1,023.2
Interest on intercompany debt is charged at variable rates based on the weighted average interest rate of Group third-party debt.
Amounts are unsecured and are repayable on demand.
v Interest-bearing loans and borrowings
2024
£m
2023
£m
Bank loans
294.4
12.8
Debentures
22.0
22.0
Private placement notes
249.0
423.7
565.4
458.5
At 31 March 2024, property with a carrying value of £107.0 million (2023: £111.0 million) was secured under the first mortgage
debenture stock. Further details of the Company’s loans and borrowings can be found on notes 16 and 17 of the Group accounts.
vi Deferred tax
1 April
2023
£m
Recognised in
the income
statement
£m
Recognised
in equity
£m
31 March
2024
£m
Net deferred tax asset in respect of other temporary differences
1.2
(1.2)
–
–
1.2
(1.2)
–
–
The Company has not recognised further deferred tax assets in respect of gross temporary differences arising from the
following items, because it is uncertain whether future taxable profits will arise against which these assets can be utilised:
2024
£m
2023
£m
Revenue losses
30.7
15.7
Share-based payments
2.7
2.7
33.4
18.4
192
Great Portland Estates plc Annual Report 2024
In this section:
194
Five-year record
195
Our properties and customers
197
Portfolio statistics
198
Glossary
201
Shareholders’ information
203
Financial calendar
Other
information
(unaudited)
We are creating a lasting
positive social impact in
our communities
We know that the socially disadvantaged members of our communities will be
the most impacted by climate change. We are therefore committed to supporting
the people, and the communities, in which we work to have a better quality of life,
whilst also supporting a thriving economy for London’s future.
Through the continued implementation of our Social Impact Strategy and by
maintaining long-term community relationships, we are creating at least £10 million
of social value by 2030 and disclosing our progress against this target annually.
Other information
193
Annual Report 2024 Great Portland Estates plc
Based on the Group financial statements for the years ended 31 March
Balance sheet
2020
£m
2021
£m
2022
£m
2023
£m
2024
£m
Property portfolio
1,987.1
1,894.5
2,144.4
1,922.2
1,929.2
Joint ventures
647.0
626.4
582.8
538.8
491.3
Trading property
–
–
–
–
–
Loans and borrowings
(444.3)
(488.6)
(531.2)
(458.5)
(740.4)
Other assets/(liabilities)
13.3
(60.7)
(83.1)
(83.9)
(97.1)
Net assets
2,203.1
1,971.6
2,112.9
1,918.6
1,583.0
Financed by
£m
£m
£m
£m
£m
Issued share capital
38.7
38.7
38.7
38.7
38.7
Reserves
2,164.4
1,932.9
2,074.2
1,879.9
1,544.3
Total equity
2,203.1
1,971.6
2,112.9
1,918.6
1,583.0
Net assets per share
868p
779p
835p
757p
624p
EPRA NTA
868p
779p
835p
757p
624p
Income statement
£m
£m
£m
£m
£m
Revenue
102.5
88.5
84.2
91.2
95.4
Cost of sales
(27.7)
(24.7)
(30.1)
(32.2)
(33.3)
74.8
63.8
54.1
59.0
62.1
Administration expenses
(29.0)
(25.2)
(35.0)
(38.3)
(42.3)
Estimated credit loss
(0.1)
(7.7)
(4.1)
(0.8)
(0.1)
Development management losses
(0.2)
(0.1)
(0.4)
(0.1)
–
Operating profit before (deficit)/surplus from property
and results of joint ventures
45.5
30.8
14.6
19.8
19.7
(Deficit)/surplus on investment property
(52.6)
(156.8)
107.9
(145.0)
(267.3)
(Deficit)/surplus on revaluation of investments
–
–
–
0.1
(0.2)
Share of results of joint ventures
57.9
(76.2)
45.9
(33.4)
(46.7)
Operating (loss)/profit
50.8
(202.2)
168.4
(158.5)
(294.5)
Finance income
7.3
8.0
7.4
6.0
6.1
Finance costs
(6.5)
(7.8)
(9.1)
(11.5)
(17.7)
Fair value loss on derivatives
–
–
–
–
(1.7)
(Loss)/profit before tax
51.6
(202.0)
166.7
(164.0)
(307.8)
Tax
0.2
0.1
0.5
0.1
–
(Loss)/profit for the year
51.8
(201.9)
167.2
(163.9)
(307.8)
(Loss)/earnings per share – basic
20.0p
(79.8)p
66.1p
(64.8)p
(121.7)p
(Loss)/earnings per share – diluted
20.0p
(79.8)p
66.0p
(64.8)p
(121.7)p
EPRA earnings per share – diluted
22.0p
15.8p
10.8p
9.5p
7.1p
Dividend per share
12.6p
12.6p
12.6p
12.6p
12.6p
Five-year record
194
Great Portland Estates plc Annual Report 2024
Our properties and customers
In value order (GPE share)
Location
Tenure
Rent roll
(GPE share)
£
Net
internal area
sq ft
Ownership
Property name
£200 million plus
50%
Hanover Square
Rest of West End
FH/LH
12,501,400
220,500
100%
1 Newman Street & 70/88 Oxford Street
Noho
FH
11,257,600
122,700
£100 million – £200 million
100%
Wells & More
Noho
FH
5,358,500
122,200
100%
Elsley House
Noho
FH
4,105,600
65,000
100%
2 Aldermanbury Square
Noho
FH
–
322,600
100%
Kent House
Noho
FH
6,183,100
59,300
£75 million – £100 million
100%
City Tower
City
LH
6,963,000
138,600
100%
Walmar House
Noho
LH
4,485,000
56,500
£50 million – £75 million
100%
Soho Square Estate
Rest of West End
FH
1,249,100
57,500
50%
200 & 214 Gray’s Inn Road
Midtown
LH
2,999,200
287,900
100%
Empire House
Rest of West End
LH
4,333,900
45,700
100%
The Hickman
City
FH
4,202,500
74,900
100%
35 Portman Square
Noho
LH
5,483,900
73,400
100%
Carrington House, 126/130 Regent Street
Rest of West End
LH
3,178,200
30,900
100%
Woolyard
Southwark
FH
4,682,200
46,300
100%
New City Court, 14/20 St Thomas Street
Southwark
FH
3,811,800
98,000
100%
Egyptian & Dudley House
Rest of West End
LH
490,000
30,100
100%
Minerva House
Southwark
FH
85,500
166,800
£30 million – £50 million
100%
54/56 Jermyn Street
Rest of West End
LH
2,803,500
28,700
100%
French Railways House & 50 Jermyn Street
Rest of West End
LH
–
67,600
100%
48/54 Broadwick Street and 16 Dufour’s Place
Rest of West End
FH
3,909,700
24,500
100%
Challenger House
City
FH
2,439,200
59,200
100%
6 St Andrew Street
Midtown
FH
–
47,800
100%
31/34 Alfred Place
Noho
LH
532,200
41,700
100%
141 Wardour Street
Rest of West End
FH
–
33,700
50%
Mount Royal, 508/540 Oxford Street
Noho
LH
2,977,800
92,100
100%
Pollen House
Rest of West End
LH
2,725,500
21,300
£10 million – £30 million
100%
7/15 Gresse Street
Noho
LH
2,490,000
43,100
50%
103/113 Regent Street
Rest of West End
LH
2,466,600
56,900
100%
Orchard Court
Noho
LH
295,600
47,900
50%
Elm Yard
Midtown
FH
2,020,900
49,400
100%
Foxglove House
Rest of West End
LH
1,246,800
18,100
100%
95/96 New Bond Street
Rest of West End
LH
188,000
9,000
100%
Bramah House
Southwark
FH
247,300
16,000
100%
Kingsland House, 122/124 Regent Street
Rest of West End
LH
970,300
8,700
Below £10 million
100%
Cathedral Street
Southbank
LH
332,000
6,400
100%
23/24 Newman Street
Noho
LH
7,900
25,200
100%
183/190 Tottenham Court Road
Noho
LH
438,400
12,000
FH = Freehold or Virtual Freehold.
LH = Leasehold.
195
Annual Report 2024 Great Portland Estates plc
Other information
Top ten customers
Customer
Use
Rent roll
(our share)
£m
% of rent roll
(our share)
1
Kohlberg Kravis Roberts LLP
Office
4.4
4.1
2
Runway East
Office
3.6
3.4
3
Glencore UK Limited
Office
3.1
2.9
4
Exane SA
Office
2.8
2.6
5
Richemont UK Limited
Office
2.7
2.5
6
Fashion Retail Academy
Office
2.5
2.3
7
Uniqlo
Retail
2.5
2.3
8
RBH Group
Hotel
2.4
2.2
9
New Look
Office
1.9
1.8
10
Synthesia
Office
1.7
1.6
Total
27.6
25.7
Our properties and customers continued
196
Great Portland Estates plc Annual Report 2024
Rental income
Wholly-owned
Share of joint ventures
Rent roll
£m
Reversionary
potential
£m
Rental
values
£m
Rent roll
£m
Reversionary
potential
£m
Rental
values
£m
Total rental
values
£m
London
North of Oxford Street
Office
32.5
3.1
35.6
–
–
–
35.6
Retail
8.1
0.9
9.0
3.0
0.1
3.1
12.1
Rest of West End
Office
14.6
2.3
16.9
9.7
1.8
11.5
28.4
Retail
6.5
0.7
7.2
5.3
0.2
5.5
12.7
Total West End
61.7
7.0
68.7
18.0
2.1
20.1
88.8
City, Midtown and Southwark
Office
20.0
2.1
22.1
5.0
0.3
5.3
27.4
Retail
2.8
(0.7)
2.1
–
–
–
2.1
Total City, Midtown and Southwark
22.8
1.4
24.2
5.0
0.3
5.3
29.5
Total let portfolio
84.5
8.4
92.9
23.0
2.4
25.4
118.3
Voids (A)
2.7
–
2.7
Premises under refurbishment and development
89.0
4.5
93.5
Total portfolio (B)
184.6
29.9
214.5
Vacancy rate % (A/B)
1.5
–
1.3
EPRA vacancy
Wholly-
owned
£m
Joint
ventures
£m
Total
£m
Voids and premises under refurbishment excluding development (A)
42.5
4.5
47.0
Total portfolio
184.6
29.9
214.5
Less: premises under development
(49.2)
–
(49.2)
Total (B)
135.4
29.9
165.3
EPRA vacancy rate % (A/B)
31.4
15.1
28.4
Rent roll security, lease lengths and voids
Wholly-owned
Joint ventures
Rent roll
secure for
five years
%
Weighted
average
lease length
Years
Void
%
Rent roll
secure for
five years
%
Weighted
average
lease length
Years
Void
%
London
North of Oxford Street
Office
34.2
4.2
1.2
–
–
–
Retail
48.4
5.6
2.0
–
1.7
–
Rest of West End
Office
0.7
1.6
0.7
89.1
11.3
–
Retail
19.8
4.0
1.2
30.7
5.3
–
Total West End
25.8
3.7
1.1
57.2
7.9
–
City, Midtown and Southwark
Office
13.9
2.6
2.0
–
1.6
–
Retail
11.3
2.2
–
–
–
–
Total City, Midtown and Southwark
13.6
2.5
2.0
–
1.6
–
Total portfolio
22.5
3.4
1.5
44.7
6.5
–
Rental values and yields
Wholly-owned
Joint ventures
Wholly-owned
Joint ventures
Average
rent
£psf
Average
ERV
£psf
Average
rent
£psf
Average
ERV
£psf
Initial
yield
%
True
equivalent
yield
%
Initial
yield
%
True
equivalent
yield
%
London
North of Oxford Street
Office
86
102
–
–
3.3
5.3
–
–
Retail
66
67
83
83
2.2
5.3
4.7
5.8
Rest of West End
Office
99
143
116
138
4.6
5.8
3.6
4.6
Retail
99
115
108
113
3.9
5.0
4.1
4.4
Total West End
86
106
107
113
3.5
5.4
3.9
4.8
City, Midtown and Southwark
Office
64
83
46
53
4.4
5.7
4.5
6.1
Retail
39
36
–
–
4.3
5.9
–
–
Total City, Midtown and Southwark
59
76
46
53
4.4
5.7
4.5
6.1
Total portfolio
77
91
83
84
3.7
5.4
4.0
5.1
Portfolio statistics at 31 March 2024
197
Annual Report 2024 Great Portland Estates plc
Other information
Building Research Establishment Environmental
Assessment Methodology (BREEAM)
Building Research Establishment method of assessing,
rating and certifying the sustainability of buildings.
Cash EPS
EPRA EPS adjusted for certain non-cash items (including
our share of joint ventures): lease incentives, capitalised
interest and charges for share-based payments.
Core West End
Areas of London with W1 and SW1 postcodes.
Development profit on cost
The value of the development at completion, less the value
of the land at the point of development commencement
and costs to construct (including finance charges,
letting fees, void costs and marketing expenses).
Development profit on cost %
The development profit on cost divided by the land
value at the point of development commencement
together with the costs to construct.
Earnings Per Share (EPS)
Profit after tax divided by the weighted average
number of ordinary shares in issue.
EPRA metrics
Standard calculation methods for adjusted EPS and NAV
and other operating metrics as set out by the European
Public Real Estate Association (EPRA) in their Best Practice
and Policy Recommendations.
EPRA Net Disposal Value (NDV)
Represents the shareholders’ value under a disposal
scenario, where deferred tax, financial instruments and
certain other adjustments are calculated to the full extent
of their liability, net of any resulting tax. Diluted net assets
per share adjusted to remove the impact of goodwill
arising as a result of deferred tax and fixed interest
rate debt.
EPRA Net Reinstatement Value (NRV)
Represents the value of net assets on a long-term basis.
Assets and liabilities that are not expected to crystallise
in normal circumstances, such as the fair value movements
on financial derivatives, real estate transfer taxes and
deferred taxes on property valuation surpluses, are
therefore excluded.
EPRA Net Tangible Assets (NTA)
Assumes that entities buy and sell assets, thereby
crystallising certain levels of unavoidable deferred
tax. Diluted net assets per share adjusted to remove
the cumulative fair value movements on interest-rate
swaps and similar instruments, the carrying value of
goodwill arising as a result of deferred tax and other
intangible assets.
Estimated rental value (ERV)
The market rental value of lettable space as estimated
by the Group’s valuers at each balance sheet date.
Fair value – investment property
The amount as estimated by the Group’s valuers
for which a property should exchange on the date of
valuation between a willing buyer and a willing seller in an
arm’s-length transaction after proper marketing wherein
the parties had each acted knowledgeably, prudently
and without compulsion. In line with market practice,
values are stated net of purchasers’ costs.
Ready to fit
For businesses typically taking larger spaces on longer
leases who want to fit out the space themselves.
Fitted spaces
Where businesses can move into fully furnished, well
designed workspaces, with their own front door, furniture,
meeting rooms, kitchen and branding.
Fully Managed
Fitted space where GPE handles all day-to-day services
and running of the workplace in one monthly bill.
Flex space partnerships
Revenue share agreements with flexible space operators;
these are typically structured via lease arrangements
with the revenue share recognised within rental income.
Full repairing and Insuring (FRI) lease
In an FRI lease, the customer is responsible for managing
the space they occupy, including all costs associated
with repairing and maintaining the property, as well as
obtaining insurance coverage.
IFRS
United Kingdom adopted international
accounting standards.
Internal rate of return (IRR)
The rate of return that if used as a discount rate and
applied to the projected cash flows that would result
in a net present value of zero.
Glossary
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Like-for-like (Lfl)
The element of the portfolio that has been held for the
whole of the period of account.
MSCI
Morgan Stanley Capital International (MSCI) is a
company that produces an independent benchmark
of property returns.
EPRA Loan-to-Value (LTV)
The nominal value of total bank loans, private placement
notes, debenture stock and any net liabilities/assets,
net of cash (including our share of joint ventures balances),
expressed as a percentage of the market value of the
property portfolio (including our share of joint ventures).
MSCI central London
An index, compiled by MSCI, of the central and inner
London properties in their March annual valued universes.
Net assets per share or net asset value (NAV)
Equity shareholders’ funds divided by the number
of ordinary shares at the balance sheet date.
Net debt
The book value of the Group’s bank and loan facilities,
private placement notes and debenture loans plus the
nominal value of the convertible bond less cash and
cash equivalents.
Net gearing
Total Group borrowings at nominal value plus obligations
under occupational leases less short-term deposits
and cash as a percentage of equity shareholders’ funds
adjusted for value of the Group’s pension scheme,
calculated in accordance with our bank covenants.
Net initial yield
Annual net rents on investment properties as a percentage
of the investment property valuation having added
notional purchasers’ costs.
Net rental income
Gross rental income adjusted for the spreading of lease
incentives less expected credit losses for rental income
and ground rents.
Non-PIDs
Dividends from profits of the Group’s taxable
residual business.
Property costs
Service charge and Fully Managed services income less
service charge expenses, Fully Managed services cost,
other property expenses and expected credit losses
for service charges.
Property Income Distributions (PIDs)
Dividends from profits of the Group’s tax-exempt
property rental business.
PMI
Purchasing Managers Index.
REIT
UK Real Estate Investment Trust.
Rent roll
The annual contracted rental income.
Reversionary potential
The percentage by which ERV exceeds rent roll on
let space.
Topped-up initial yield
Annual net rents on investment properties as a percentage
of the investment property valuation having added
notional purchasers’ costs and contracted uplifts from
tenant incentives.
Total potential future growth
Portfolio rent roll plus the ERV of void space, space under
refurbishment and the committed development schemes,
expressed as a percentage uplift on the rent roll at the
end of the period.
Total Accounting Return (TAR)
The growth in EPRA NTA per share plus ordinary dividends
paid, expressed as a percentage of EPRA NTA per share
at the beginning of the period.
Total Property Return (TPR)
Capital growth in the portfolio plus net rental income
derived from holding these properties plus profit on sale
of disposals expressed as a percentage return on the
period’s opening value.
Total Shareholder Return (TSR)
The growth in the ordinary share price as quoted on the
London Stock Exchange, plus dividends per share received
for the period expressed as a percentage of the share
price at the beginning of the period.
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Annual Report 2024 Great Portland Estates plc
Other information
True equivalent yield
The constant capitalisation rate which, if applied to all
cash flows from an investment property, including current
rent, reversions to current market rent and such items
as voids and expenditures, equates to the market value
having taken into account notional purchasers’ costs.
Assumes rent is received quarterly in advance.
Ungeared IRR
The ungeared internal rate of return (IRR) is the interest
rate at which the net present value of all the cash flows
(both positive and negative) from a project or investment
equal zero, without the benefit of financing. The internal
rate of return is used to evaluate the attractiveness of
a project or investment.
EPRA vacancy rate
The element of a property which is unoccupied, expressed
as the ERV of the vacant space divided by the ERV of the
total portfolio, excluding committed developments.
Weighted Average Unexpired Lease Term (WAULT)
The Weighted Average Unexpired Lease Term expressed
in years.
Whole life surplus
The value of the development at completion, less the
value of the land at the point of acquisition and costs
to construct (including finance charges, letting fees,
void costs and marketing expenses), plus any income
earned over the period.
Glossary continued
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Shareholder enquiries
Enquiries relating to shareholdings, such as the transfer
of shares, change of name or address, lost share certificates
or dividend cheques, should be referred to the Company’s
Registrar at:
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Tel: +44 (0) 371 384 2030
(Lines are open 8.30am to 5.30pm, Monday to Friday,
excluding bank holidays in England and Wales).
See help.shareview.co.uk for additional information.
Managing your shares online
Shareholders and employees can manage their
Great Portland Estates plc holdings online by registering
with Shareview, a secure online platform provided by
Equiniti Limited. Registration is a straightforward process
and allows shareholders to:
– access information on their shareholdings, including
share balance and dividend information;
– sign up for electronic shareholder communications;
– buy and sell shares;
– update their records following a change of address;
– have dividends paid into their bank account; and
– vote by proxy online in advance of general meetings
of the Company.
Electronic communication
Shareholders are encouraged to elect to receive all
shareholder documentation electronically by registering
with Shareview at www.shareview.co.uk. Shareholders
who have registered for this option will receive an email
notification when shareholder documents are available
on the Company’s website and a link will be provided
to that information.
When registering, shareholders will need their shareholder
reference number, which can be found on their share
certificate or proxy form.
Equiniti Limited offers a range of shareholder information
and services online at www.shareview.co.uk
For deaf and speech impaired customers, Equiniti welcomes
calls via Relay UK. Please see www.relayuk.bt.com for
more information.
Unsolicited telephone calls – boiler room scams
In recent years, some of our shareholders have received
unsolicited telephone calls or correspondence concerning
investment matters from organisations or persons
claiming or implying that they have some connection
with the Company.
These are typically from overseas based ‘brokers’ who target
UK shareholders offering to sell them shares that often turn
out to be worthless or non-existent, or an inflated price for
shares they own. These operations are commonly known as
‘boiler rooms’. Shareholders are advised to be very wary of
any offers of unsolicited advice, discounted shares, premium
prices for shares they own or free reports into the Company.
If you receive any unsolicited investment advice:
– ensure you get the correct name of the person and firm;
– check that the firm is on the Financial Conduct Authority
(FCA) Register to ensure they are authorised at
https://register.fca.org.uk;
– use the details on the FCA Register to contact the firm;
– call the FCA Consumer Helpline (0800 111 6768) if there
are no contact details in the Register or you are told
they are out of date; and
– if the calls persist, hang up.
If you use an unauthorised firm to buy or sell shares, you will
not have access to the Financial Ombudsman Service or the
Financial Services Compensation Scheme.
Dividends
Dividends can be paid by BACS directly into a UK bank
account, with the dividend confirmation being sent to the
shareholder’s address. This is the easiest way for shareholders
to receive dividend payments and avoids the risk of lost or
out-of-date cheques. A dividend mandate form is available
from Equiniti Limited or online at www.shareview.co.uk/info/
directdividends
Dividends payable in foreign currencies
Equiniti is able to pay dividends to shareholder bank accounts
in over 83 currencies worldwide through the Overseas Payment
Service. An administrative fee will be deducted from each
dividend payment. Further details can be obtained from
Equiniti or online at www.shareview.co.uk/info/ops
Dividend Reinvestment Plan
Our Dividend Reinvestment Plan (DRIP) enables shareholders
to use their dividends to buy further Great Portland Estates plc
shares. Full details of the DRIP can be obtained from Equiniti
Limited or online at www.shareview.co.uk/info/drip
Shareholders’ information
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Annual Report 2024 Great Portland Estates plc
Other information
Shareholders’ information continued
Tax consequences of REIT status
As a REIT, dividend payments may be split between PIDs and
non-PIDs. Information in respect of the tax consequences
for shareholders of receiving dividends can be found on
the Company’s website at www.gpe.co.uk/investors/
shareholder-information/reits
Share dealing
Great Portland Estates plc shares can be traded through
most banks, building societies or stockbrokers. Equiniti Limited
offers a telephone and internet dealing service. Terms and
conditions and details of the commission charges are
available on request.
For telephone dealing, please telephone 0345 603 7037
between 8.00am and 4.30pm, Monday to Friday (excluding
bank holidays in England and Wales), and for internet dealing
visit www.shareview.co.uk/dealing
Shareholders will need their reference number, which can
be found on their share certificate.
Website
The Company has a corporate website, which holds, amongst
other information, a copy of our latest Annual Report and
financial statements, a list of properties held by the Group
and copies of all press announcements released over the
last 12 months. The site can be found at www.gpe.co.uk
General Counsel & Company Secretary
Darren Lennark
Registered office
33 Cavendish Square
London W1G 0PW
Tel: 020 7647 3000
Registered number: 596137
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Great Portland Estates plc Annual Report 2024
2024
30 May
Ex-dividend date for 2023/24 final dividend
31 May
Registration qualifying date for 2023/24 final dividend
4 July
Annual General Meeting
8 July
2023/24 final dividend payable
14 November
Announcement of 2024/25 interim results (provisional)
21 November
Ex-dividend date for 2024/25 interim dividend (provisional)1
22 November
Registration qualifying date for 2024/25
interim dividend (provisional)1
2025
3 January
2024/25 interim dividend payable (provisional)1
21 May
Announcement of 2024/25 full-year results (provisional)1, 2
1. Provisional dates will be confirmed in the half-year results
announcement 2025. All dividends are subject to the Board’s
recommendation (and also, in the case of the final dividend,
to shareholder approval) at the appropriate time.
2. The timetable for the potential final dividend will be confirmed
in the 2025 Annual Report.
Financial calendar
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Annual Report 2024 Great Portland Estates plc
Other information
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Great Portland Estates plc Annual Report 2024
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Great Portland Estates plc
33 Cavendish Square, London W1G 0PW
Tel: 020 7647 3000
www.gpe.co.uk