Hammerson Plc (HMSO) Earnings Call Transcript & Summary

Good morning, everyone, and thanks for joining us for our half year presentation today. This is our third set of results under new leadership and another half year focused on execution, which has delivered tangible results. I will give you a quick overview and then pass on Himanshu to take you through the numbers. This slide shows on the left our key priorities and what we said we would deliver. We said we'd optimize cash flow and drive further value from our assets through operational improvement. We said we'd reduce cost and drive organizational speed to value through digitalization and automation. We also said we generate capital to reduce debt and reinvest. And we said we create value and optionality by hitting key milestones on our predevelopment scheme. On the right, you can now see what we did and how we delivered on all of our commitments and key metrics. Like-for-like GRI grew by 16% and NRI by 48%. Footfall, sales, occupancy and collections are recovering and now close to or above 2019 levels. This momentum continues into July. We saw a good leasing performance, 31% over previous passing and now in line with ERV. We have strengthened our tenant profile and mix and now have more than half of our deals to non-fashion and 68% since half year '21. Flagship occupancy in our managed portfolio is now up 2% to 95% year-on-year. We have also made significant progress on reducing growth admin costs, delivering a 20% reduction year-on-year, achieving our 2023 target 18 months early. Net finance costs were also down 25%. We have delivered GBP 194 million of disposals and have a solid balance sheet with more than GBP 1 billion of liquidity following further refinancing activity in the half. We have no group unsecured debt maturities not covered by cash until 2025. We have also continued to make strategic progress on our land promotion and predevelopments with key milestone met that will deliver options for further value creation. Overall, adjusted earnings were up 154% year-on-year to GBP 51 million. And by the way, this is the first time our adjusted earnings have been in line with IFRS profit since 2017. So you can see we have a strong operational grip on the business, and we are more resilient and financially secure as a result of the actions taken since the start of 2021. We show you this following slide at full year, which demonstrates our focus and disciplined financial and operational management that are the drivers of a better, more resilient business. Our focus for the half was and will continue to be as follows: First of all, further realigning our portfolio to best-in-class city center locations with resilient catchments. 2, on leasing, we have a stronger, more diversified occupier mix and higher-quality brand portfolio. 3, footfall and sales are recovering and despite the economic backdrop, Q2 2022 was stronger than Q1 and we are seeing that trend continue into July. 4, we have delivered a strong improvement on cash collections, which are normalizing. We have already collected 90% of rent due to date versus 69% at this time last year. 5, the actions taken in the last 12 months on cost, you can already see in earnings this year. We are not done. And we are also exploring further opportunities within our control. 6, our capital allocation remains disciplined and tight with disciplined expenditure on core assets and land promotion in 2022 and 2023. 7, headline LTV is now down at 37%, reflecting disposals completed and we will further strengthen the balance sheet. Last but not least, the increased strength of our balance sheet was reflected in our IG outlook being upgraded from negative to stable. With that summary, I will hand over now to Himanshu for details on the strong half year numbers, and then I will come back to you to talk about our strategic and operational progress.

Thank you, Rita-Rose. And good morning, everyone. Okay. Let's jump right in. These are good numbers, which as Rita-Rose has said show the tangible progress we're making at each reporting period. Our adjusted NRI was GBP 87 million, down 1%, largely reflecting the impact of disposals. And cogently our like-for-like NRI increased by 48%. Rent collection continues to strengthen and normalize with H1 and 92%, which compares with 71% when we reported this time last year. And this momentum has continued into Q3, where we're already at 84%. And we have more to do here, and I expect collection rates to continue to improve, notwithstanding the uncertain economic backdrop. The results in adjusted earnings were GBP 51 million, up 154%. Gross administration costs were down 20% year-on-year. Finance costs were down 25%, and we also had a strong contribution from Value Retail. Turning to valuations. Our managed portfolio is valued at GBP 3.3 billion. Yields has been stable since the first half of 2021 and the effect of ERVs on valuations continues to diminish. Capital returns were a negative 1.5%, but with total returns up 2.1%, this being the first reporting in 4 years the group has posted positive total returns. Our net debt stands at GBP 1.7 billion, down 6%, benefiting from the sales of [indiscernible] and lease, which generated GBP 194 million in disposal proceeds. And finally, as I signaled in March, headline LTV is 37% and LTV on a fully proportional basis is 45%. Turning now to the adjusted earnings walk in more detail. Starting with the GBP 20.1 million we reported this time last year, the underlying NRI before the effect of disposals was GBP 14.1 million, driven by improved collections and the flow-through of the overall strong leasing forms over the last 12 months. The reduction in net debt and on refinancing saves GBP 9.9 million, whilst gross admin costs were GBP 7.2 million down, of which 2/3 related to lower head count. As Rita-Rose has said, we delivered our commitment to 15% to 20% savings against the 2019 base 18 months early. There's more opportunity here, which Rita-Rose will pick up on in her section. Our all 3 value retail earnings were momentarily. The effect of disposals of GBP 14.8 million and the related loss of income brings home the earnings walk to GBP 51.1 million. To Value Retail. A continued strong performance from Value Retail with earnings of GBP 13.7 million compared with a loss of GBP 2 million in H1 '21 when the villages suffered COVID-related closures at the beginning of that year. The strong GRI performance of GBP 32.4 million at our share reflects strong footfall with overall spend per visit exceeding 2019 levels by 7% year-on-year. And there are 3 main drivers: one, targeting high net worth domestic customers; 2, an increase in European tourism; and 3, the return of some tax-free shoppers, particularly at La Vallee and Las Rosas. Occupier demand for space remains high with 178 leases signed in the half, occupancy at 94% and collection rates are an impressive 100%. Income was further underpinned by inflation and closes in the base run from the majority of the villages. And strong operational and financial cost control saw the benefits in GRI drop to the bottom line. And now to VR refinancing, La Vallee completed through financing in the ordinary course during the first half, reflecting the confidence in the bank market for quality assets. The Bicester facility expires at the end of 2022. And the refinance of this facility is in the advanced stages with draft documentation under review. Lens of either credit approval or I'll go through their credit approvals presently. And closing is anticipated to occur in the second half, again, in the ordinary course. The next slide, turning to valuations. Valuation declines have continued to slow in all 3 territories with yields stable since this time last year. And in the half, we saw the ERV effect diminishing, reflecting the improved leasing performance. Taking a step back, the boxes at the bottom show the declines from peak, 60% for the U.K., 27% for France and 30% for Ireland together with the breakdowns of those movements. Overall, it feels like we're roughly at the bottom today, notwithstanding some near-term volatility in the macro environment. The yields for each market and the range as of June '22 also show quite a bit of headroom to prevailing and forecast interest rates. We have a strengthened balance sheet. As a result of the bottoming out of valuations and the significant disposals, GBP 627 million since the beginning of 2021, the group is financially secure today. We have no group debt maturities not covered by current cash holdings until 2025. Consequently, GBP 1.7 billion of net debt is 6% lower than the year-end. We will look to continue to drive that down further with GBP 300 million of disposal to come by the end of 2023. And with ample liquidity and improved metrics, both Moody's and Fitch recently changed their outlook in February and May respectively, from negative to stable, and we have in the half maintained our IG credit rating. It's worth dwelling for a moment on the debt stack. The left-hand side of this chart shows the unsecured debt and maturity profile and the middle shows the secured debt facilities. In the first half, we refinanced GBP 820 million RCFs to a new GBP 463 million, 3 plus 1 plus 1 facility, supported by a core group of Tier 1 banks. Total liquidity now stands at GBP 1.2 billion, including undrawn existing and new facilities and GBP 500 million of cash. And you can see on the left, the GBP 313 million 2023 and 2024 maturities are more than covered by the available cash. On the secured debt that is held either against noncore assets, which I would anticipate being disposed of in the near to midterm or undrawn, which we'd expect to refinance in the ordinary course. In other words, we are no rush to issue. Indeed, we're looking to drive down debt further through the GBP 300 million or so disposals in our guidance. To summarize, it's been a strong half year delivering tangible results with adjusted earnings up 154% to GBP 51 million. And as a CFO from a quality of earnings perspective, it's good to see that adjusted earnings were in line with IFRS profit as valuation stabilized. Combined with the reduction in debt, NTA has increased and that is also for the first time since 2017. We've achieved our cost targets 18 months early. The balance sheet is stronger with lower finance costs, and we've no need to refinance in the near term. The usual line by line modeling guidance is in the back, which Josh can walk you through. And you'll see from this and from our outlook statement that notwithstanding the wider economic volatility, we look forward into H2 with real confidence. This is a better business today with strong strategic and operational momentum, which Rita-Rose will expand upon. Rita-Rose, over to you.

Thanks, Himanshu. Now let me update you on the execution of our strategy and priorities for the second half of the year. Let me first set the scene and talk about what we are seeing on the ground, facts, not speculation. There is no debate today on online versus offline omnichannel is the future. Growth of online is slowing, particularly in the U.K., as you can see on the left. Cost and profitability in terms of customer acquisition and fulfillment favors a hybrid omnichannel model. This was true pre-pandemic and fulfillment costs have only increased since then. Brick-and-mortar is crucial to drive online and to enable brand interaction, customer engagement, fulfillment and the overall human experience, which cannot be replicated online alone. This is illustrated by the opinions of brands shown on the top right, with 60% to 80% saying that bricks and mortar is more effective for cross-selling, boosting online sales and customer engagement. Best-in-class operators such as Apple, Nike, Next and Inditex for example, already have this model in place today and are growing strategically with stores in the right locations, and we have those. Those who have been exclusively online or physical, such as Primark are taking steps into the omnichannel world, often driving that last mile fulfillment to the store. We have more than 250 million visitors passing through our portfolio of unique city center locations each year. Overall, we have strong catchments and a relatively young and affluent customer base benefiting from 1,250 diverse and quality brands offering a mix of experiences. Therefore, we are well-positioned and are already benefiting from this ever-evolving landscape. This strength is reflected in the sustained recovery in footfall compared with 2019 levels. We have seen from 80% in January to around 90% today. At group level, July footfall is in line with June. In some core destinations, we are seeing footfall at or above 2019 levels and well above national indices. In the first half, sales in U.K. and Ireland exceeded 2019 levels. We are only slightly behind in France, but we saw a strong performance from France in June 2022. Occupancy costs have become affordable, particularly given sales figures do not take into consideration the benefit that stores provide for last-mile fulfillment, brand interaction and customer service. Overall, flagship occupancy is up 2% year-on-year and stable versus the year-end. On to leasing now, this slide shows again the appeal of our destinations. It emphasizes a strong leasing performance, the continuation of a team started in the second half of last year. Let me walk you through a few data points. We signed 143 leases, securing a further GBP 10.5 million of income and a total of GBP 25 million since the middle of last year. Headline rent is 31% ahead of previous passing and 1% ahead of ERV. July continues to show robust activity with 22 deals already signed, securing a further 2.3 of rent, in line with ERV and again, well ahead of previous passing. Our leasing activity has been geared towards non-fashion, which made up 68% of the total over the last 12 months. Nonetheless, we continue to enjoy the support of innovative and best-in-class fashion brands with strong evidence in renewals. Occupiers are signing to longer-term deals, and this is also reflected in the duration statistics at the bottom right, the [ WHOP ] of 7.6 years and a vault of around 10 years. So those were the numbers, but it's the brands that really bring the story to life. There is too much to go through on this slide, so I will just pull out a few examples. The Commonwealth Games begin today in Birmingham. As well as being a sponsor, the Bullring is hosting the official store, and we have installed new EV charging points for use by the games fleet in the immediate term and important for sustainability in the longer term. Just this week, we expanded our partnership with CPP Investments in Bullring. The same day, we signed a new lease with JD Sports who are more than doubling their presence in Bullring with a new flagship store of 24,000 square feet. This prioritizes their city center presence in Bullring and is a fixed rent lease in line with ERV. Commercialization continues to play a crucial role. It not only brings vibrancy to the assets with new experiences and brands, but delivers a meaningful contribution to income, up 70% year-on-year and adding GBP 12 million of income since half year 2021. Let me call out a few projects. The Sky, who we collaborated with the showcase its new glass TV in a popup house in Bullring and Cabot Circus following its success in Brent Cross. This summer sports was free to view giant screens at the Oracle, Wesky and Bullring offerings sport bars and casual dining. There is Big Sara, the 150-million-year-old Dinosaur at Wesky, who is attracting the local community and visitors from far and wide. And our events and immersive experiences ranging from [ Pride ], hip hop and music festivals to family-days and world yoga events. The repurposing in Dundrum is seeing pennies upsize into the remaining former house of Fraser space. This reinvigoration has seen new occupiers such as Watches of Switzerland chose Dundrum for their first Irish store and the return of brands such as Aldo. Continuing with the momentum and the teams from the full year, we have seen further long-term renewals from Levi's and Earnest Johns in Grusky, Diesel in Pavilions, Alba one at Oracle, Kills and Smiles who are a dental clinic in Dundrum and many more. A key entrant to the portfolio for us and expanding the F&B selection at [ Grancross ] was Marugame Udon. This is a well-known brand in Japan, expanding outside the Westend for the first time and now also opening at the Oracle. In terms of new users, we are also excited about the lost concept coming to Croydon from the team behind Secret Cinema. This will repurpose the previous older space, formerly the U.K.'s largest department store and will move out in live in Croydon. Finally, we have also opened 2 units with Sook, who ran state-of-the-art retail pop-up space by the day. Sook will help drive vibrancy and footfall. Turning now to cost actions, a key lever for us facing a volatile macro environment and building sustainable earnings. The actions taken in the last 12 months are yielding results with gross admin costs down 20% year-on-year, and that is 18 months ahead of our 2023 target. But as I said earlier, we are not done. We are already exploring further opportunities for cost reduction, improved agility and speed to value, creating more responsive, efficient and data-driven business. We are also creating more integrated connected automated system that will drive overall efficiency. In terms of net finance costs, these are down 25% with no group unsecured refinancings in the immediate future. And as we complete further sales and put some capital to play, there may be opportunity to improve this further. You will be familiar with this slide and our approach to capital allocation. With the disposal of Silverburn, lease another noncore land, our cumulative disposals are now at GBP 627 million since the start of 2021, and we anticipate completing the remaining GBP 300 million by the end of 2023, further strengthening the balance sheet. Conversations with a broad range of buyers are ongoing, and we -- remember we are not forced sellers. Over the medium term, there will be further opportunity for potential sources of liquidity as we continue to evolve the portfolio and to, therefore, recycle capital to both core and long-term opportunities. Let me turn to accelerating development. In the half, we met our key land promotion and predevelopment milestones. As guided at full year, our capital requirement is modest. We are looking at a potential spend of approximately GBP 70 million by the end of next year to generate an absolute uplift in value of about GBP 110 million by 2023. We are taking these and other projects like the remaining East Gate land in Leads to create value uplift and optionality, optionality on how and when to proceed further and how much of our own capital to source and invest. Therefore, there is a long-term opportunity with a potential GDV of more than GBP 2.5 billion and our share. We will assess and select the best returns for shareholders, mindful of our own cost of capital and assess all options for capital allocation, including further debt retirement and distributions for shareholders. Let me now bring to life the progress we have made on predevelopment and land promotion. In Ireland, we are delighted to have achieved 3 of 6 planning permissions for Dublin Central and are progressing a further 2 in the second half. Staying in Dublin, we expect to start the podium at Dundrum in the second half of the year. A modest and low-risk residential scheme on the Dundrum estate, diversifying our mix and activity and a proof of onset for the wider residential opportunity in the Dundrum village. Back in March, we opened the new expansion at Cergy [indiscernible] in France, and it was really great to be part of the opening event. I'm pleased say that this is 86% let or in the hands of solicitors. In the U.K., in the second half of the year, we are master planning a resi-led scheme for our 10 acres of remaining 100% owned land in Leads, part of which we will identify potential partners. Close consultation with local authorities continues in Birmingham to secure infrastructure funding for Martineau Galleries. We are also progressing designs and feasibility with our partners, CPP Investment for a major repositioning of Grand Central located above New Street station, which will create an amenity-rich workspace-led offering. Lastly, in March, we signed a Section 106 agreement for the Goodsyard in London. We anticipate completing the drawdown of this land in the second half. So in summary, it has been another half year of strong strategic and operational financial progress. We have strong strategic assets, a robust strategy and a leadership team that has consistently delivered key milestones since the start of 2021. My immediate priority is more of the same, relentless execution to continue to build a better business by further strengthening of our balance sheet by going again and again on cost to deliver a more agile organization, reducing vacancy and void costs, repurpose in space, delivering a vibrant occupier mix expected by our customers and brands and unlocking the predevelopment value uplift that continues to create optionality for the future. Now to my closing remarks. Physical retail is a critical part of the omnichannel fulfillment and brand experience for our occupiers and to the customers. Our strategy is focused on best-in-class city destinations, which play a central role for our occupiers and the communities in which we operate and which we can continue to grow and thrive. We have a strong operational grip the business, as a result of the actions we have taken since the start of 2021. Hammerson today is a better, more resilient and financially secure business. While mindful of the wider economic volatility, we have a good pipeline of opportunities ahead and look forward with more confidence. Thank you very much for your attention.

[Operator Instructions] And our first question Colm Lauder calling from Goodbody.

I sort of kick off firstly with trying to get your views on the consumer market. Of that you have the benefit of access to live sales data, live footfall data, et cetera, across your flagships and indeed the outlets. I was wondering if there anything that, that data is showing us in terms of how you are seeing consumer trends evolving or changing within your centers?

So I think there's sort of 2 angles to your question. First of all, the data per se, and I'll give you a bit of color on how that data has evolved and into July and how we see the next few months. But also, as you point out some consumer trends that are changing and ultimately to a certain extent, adapting to the current environment. So as you remember in our year-end results, the trends were recovering strongly, I would say, since half -- since the second half year last year. So if you look at the first half this year, definitely statistics around footfall and sales are the -- it's been stronger in Q2 than in Q1, notwithstanding the fact that I remembers standing or sitting with you while I was during the end of year results and a week before we have had the use of Ukraine. So since then, there has continued to be also some growth and some robust activity up to this base actually. So if we look briefly at footfall, we're saying and broadly in the portfolio at the moment, potentially about -- you found our statistics about at 10% -- minus 1% pre-pandemic, but we have several properties that are way above that, way above pre-pre-pandemic levels still today. On the sales side, and if I continue on footfall and I talk about July, June and July actually if you look more particularly of statistics for the U.K., June was at about minus 10%, as I just said, and now July is at minus 8% up to this date. For France, it's pretty stable and Ireland also. In terms of the sales, we don't have yet the sales for the month of July, but through June and maybe if we look at May and June, May has been a strong month. June has seen a decrease in sales, but we're still over and above pre-pandemic levels. In the outlet sector, it's really considerably higher. So again, robust performance that continues to flow through in July. And it's difficult to talk about that without talking about the leasing activity that we're seeing in July because we've had a strong half year. We've signed 142 deals. And now in July, we've already signed 22 deals. We have a strong pipeline. There's a lot of new deals in there. We're signing them above ERV above considerably above passing rent. Just this week, actually, there's been a lot of news for Birmingham but we signed a JD Sports yesterday and yesterday, 24,000 square feet, expanding location into the Bullring. So the activity continues to be strong on that front. And I would just add 2 things actually to complete your question. There's the consumer trend and then the retailers because you can ask yourself, why are these trends there? And why are these stronger? First of all, there's definitely when I -- and I'm spending more time myself at the asset and with the retailers and the consumers, we're doing a lot of survey at this point in time we're increasing our capability to track data more quickly and interpret that data. But at the end of the day, the polarization, slight quality for retailers at this moment, particularly in this environment, I would say. So really, they are searching for the best quality assets and Hammerson has that and some key flagship assets. And it's about the quality of the brands and the assets. And that's not just a general concept. It's really we're growing really more deeper in the analysis of each catchment area to make sure that we're adapting. The mix is not just the tenants on also the activities and everything that goes on in the assets to cater to the consumer. The retailers are adapting their business models to the current environment that let alone the macroeconomic side, just digitalization that's going on in general on the retail side. So there's a transformation going on omnichannel. So the concepts are changing in the physical store formats that are way more catered to the contact with the consumer education, the last-mile fulfillment. So there's going to be a lot a uses in our property in the future. On the consumer side, you're seeing that you're seeing a change post-COVID. There's some trends that have been picking up around leisure, health, to gathering this wellness, et cetera. So what is discretionary and nondiscretionary is changing also. So we're in a period of transformational adjustments, I would say the timer overall economy, but we're seeing that flow through as strongly. So it's really for us also a flight to back quality, quality, the operators that can adapt to them and good -- also good, I would say, brand, independent brands, so a mixed to Cather to the specific communities we serve. So that's how we stop here. I can go on longer, obviously, and I hope that just answers to your question.

That's very helpful, Rita-Rose. And maybe just as a follow-up to that and thinking about your leasing pipeline, and you've obviously you've mentioned that there's a good bit of deal flow so far in July. Are you seeing any sort of changes in the mix within that leasing activity for July? And in terms of sort of the areas or pockets of changing occupier demand. Are you seeing more food and bev or less or more leisure? What are the sort of the occupier segments at the moment that are particularly active work?

Yes. Well, we've -- for one, we ourselves are targeting to realign our mixed. So we've increased our reach to some types of uses, and we're saying in the documentation, the result that we have more non-fashion in the leasing pipeline at the movement. And I would say to you that the mix is -- what we're seeing flow through in terms of the demand. And again, it varies some catchment area. And it really varies because in some of our properties in our surveys what come out is that customer want the fashion brands, they want the Primark, the Nikes, the Adidas, Inditex, et cetera. And these brands are really premium and they have a lot of concepts that are adapting to the demand. So you saw Bershka and [indiscernible] get into the Bullring, Tissot in former Arcadia in Bullring. We saw that in Brent Cross also. There is still that demand, but we're seeing a lot of F&B. We're seeing a lot of leisure well-being is something that, as I said in previously, the discretionary and nondiscretionary is sort of changing post-COVID. So I would say that we're seeing a lot of that flow through. And we again, I was talking about fashion, we -- Cergy, we just signed a large deal in H&M, and it's extreme -- it's doing extremely well. So it really depends, but the pipeline, I would say we're seeing increased demand around leisure, social, gains, again, sciences, health, I would say, yes. Jewelry sector is still strong also. Outdoor sports strong. It's also a function of the fact that -- I'll just finish on this, that some retailers are adapting at the moment to the outlook and adapting to supply to the customers a different adapted service or type of product. We saw some retailers that are starting to offer renting of product, outdoor sports, et cetera. So you're really seeing different uses and different habits flow through in the pipeline. But overall, I would say that what we have in the pipeline is 68% about is non-fashion.

Your next question comes in from the line of Paul May calling from Barclays.

Just a quick one on the leasing side of things. Just looking at the sort of leasing volumes, it seems to be quite a bit slower in France in the first half. Is there anything behind that at all? Or is it just a circumstance? The situation, obviously, rents are up strongly versus previous passing, but sort of leasing volume is quite low.

Yes, you're right, but it's just a question of timing. And if you look at the month of July, then France goes back up, it's just a question of timing.

And then just another one on the development pipeline or the sort of opportunities moving forward. Does the changing finance situation affect your decisions there at all in terms of the cost of financing? I think before returns on those were difficult to determine, I think you said?

Are you talking about the developing pipeline? Paul, sorry, we can't hear you 100%. But if I repeat your question is on the development pipeline, are we concerned about the financing costs?

Yes, that's right. The impact of pipeline as in cost on that development pipeline.

Yes. Well, listen, again, and it's the same -- ultimately exactly the same presentation we did at year-end. We're not yet in a development pipeline for one. What we're saying here is that our land, there's so much great land in there that we really want to uplift, capture an uplift in value and bring us to a shovel-ready point, which will be probably by the end of '23. So at the moment, it's not something that is of a concern, and it is like CapEx at this moment. It's about drawdown of land. It's about planning consents, it's about designs. So that concern is not there yet. And when we will come at the point of decision, ultimately, then we will underwrite cautiously and carefully at that time, and we will also have many options to consider because we already have a lot of options coming at us and partners wanting to help us capitalize on the opportunities. So we shall see at that point.

The next question come in from the line of Matthew Saperia calling from Peel Hunt.

Just one quick question from me. I was hoping probably for Himanshu, whether you could talk about your sensitivity to rising interest rates. And specifically what we might expect the -- whether there's going to be a change in the interest rate on the refinancing of Bicester that you're expecting to conclude in the second half?

Himanshu, do you want to pick that up?

Yes. 2 questions in there, one general sensitivity and 2 Bicester. Let me just cover off Bicester. As the release this morning says, Bicester in the advanced stages of refinancing with documentation largely agreed and bank side of the credit approved or going through that credit approval processes. And naturally, I'm not going to reveal what the spreads are on that. But suffice to say actually there remains good support for high-quality assets such as Bicester and the same is true for Value Retail's La Vallee financing. And I'd say the management team is pleased with the pricing they have seen on Bicester. More broadly to your question, clearly, spreads widened, but as we point out in our presentation, we don't need to be accessing the capital markets till at least year 2025. And we'll keep a weather eye on how bond markets move over that time period. It's well-documented that those markets are quite volatile today. Real estate has underperformed, as a set as in retail kind of all the more so, but we don't have to access those markets till late '24, early '25.

Thanks, Himanshu. Does that answer the question?

Yes, that's fine.

That was the final question via the audio line. So I shall hand the call back [indiscernible] for any online questions.

Thank you very much to everybody for your attention this morning.

Just got a couple of questions coming in from the written in norms from [ Nicholas Stanley ] just asking at what price or coupon would you be able to issue a 5-year sterling bond today?

So I think that's a good question for Himanshu.

Again, if you look at the spreads, then they have widened considerably. And if we had to access the markets today, which again we don't, theoretically the bond pricing will be up 8%, 9% sort of level, but they move quite considerably kind of week on week. So I'm not sure that's a representative indicator of what the pricing will be when we come to refinance in 2024, 2025.

Yes.

Next question comes from [ Yaquin ] at Kempen. So could you please comment on the split of the GBP 22.5 million sterling increase in NRI and flagships and give some indication of the shares coming from rent collection, provision releases and other relevant items?

So the split in the NRI if I understand well. So we have a chart on that, I think Himanshu, we can give a bit more detail if you want.

Yes, I think I -- the way I guide is split is approximately 50-50 between higher income from turnover rent and from car park and commercialization income and lower costs relating to the year-on-year change in the bad debt charged. You've seen in the release the low bad debt charges from improved collections right across the board.

And we've covered in one way or another all the other questions coming through online.

Great. Thank you very much, again, everybody. Have a good day.

Thank you.