Land Securities Group Plc (LAND) Earnings Call Transcript & Summary

Thank you very much. Good morning, everyone, and welcome to the presentation of Landsec's 2026 full-year results. Landsec is in excellent shape. Demand from customers for our places is still extremely strong, and with supply becoming more and more constrained, occupancy across our portfolio has climbed to the highest level seen in over 20 years. Because of that, rental values keep rising, and they are now increasing at the quickest rate in almost 20 years. We have brought that momentum into the new financial year, with 1 million square foot of active occupier demand across our recent office projects, a record leasing pipeline in retail, and no indication that demand is weakening because of the Middle East situation. That underpins continued robust income growth from this point, and along with it, an acceleration in EPS growth over both the near and medium term. For this year, as we guided previously, we anticipate reported EPS will be stable, since last year's sale of Queen Anne's Mansions offsets strong underlying growth. Given our current momentum, we anticipate EPS for FY28 will increase by a high single-digit percentage. That means we remain on track to deliver compound annual growth in EPS of around 5% between now and FY30.

That works out, on top of an existing income return at NTA of 5.8%, to an appealing low double-digit total return for shareholders each year. Across the last few years, our operational results have grown consistently, even with the heightened macro uncertainty in the external environment during that whole stretch. This speaks to how unique and resilient our high-quality portfolio is, along with our market-leading operating platforms, with occupancy climbing steadily to 98% now. Since our portfolio is effectively full, upward pressure on rents has kept building, and rent uplifts on relettings and renewals nearly doubled in the past year, reaching 15%. Consequently, we posted 4.6% growth in like-for-like net rental income for the year, beating our initial guidance, plus a solid 4% compound annual growth rate over the last four years. Even though the global macro outlook is uncertain once again today, the fast-growing reversion in our high-quality portfolio means the potential for income growth ahead is well underpinned in any case. During the past few years, we have looked to strengthen this positive portfolio outlook through strategic discipline, actively positioning Landsec for an environment of higher inflation and higher interest rates. Our average debt maturity of 8.6 years is now double the UK REIT sector average, which, together with roughly 90% fixed rates, means our earnings are well shielded from interest rate volatility.

We've reduced overhead costs to the lowest they've been in 20 years, so future income growth will flow through into earnings more easily. By the summer, development exposure will account for only 2% of our portfolio value, and we don't intend to add meaningfully to that in the near term. With only £185 million of capex remaining to spend and no debt needing refinancing until 2028, we are not reliant in any way on disposals or fresh financing to cover any commitments. Together with a clearer and stronger growth outlook, we have now actively shifted the business to a lower-risk profile. All of this shows up in another set of positive financial results. Thanks to strong like-for-like income growth and a 15% reduction in overhead costs, our EPRA earnings grew 2.2%, at the top end of our guidance for the year, after factoring in the 1.8% impact on EPS from the earlier than planned sale of QuAM, which wasn't part of our initial guidance and which gave rise to 2% growth in dividends. NTA per share rose 0.9% for the year, and 2.2% in the second half, after absorbing the 1.1% cost to NTA from selling over £700 million of assets that generated little or no return, while LTV edged down slightly to 38.7% and net debt to EBITDA improved to 8.4 times.

We anticipate that figure dropping below 7 times across the coming two years, thanks to lease-up at our newest developments along with sustained like-for-like income growth. Together with a reduced cost base and strategic discipline, that means our ongoing income growth will increasingly feed through into faster EPS growth. Two very clear trends underpin our positive outlook. First, whether in retail — where the drive is to maximize consumer reach efficiently — or in office, where the need is to attract and retain the best talent, occupier demand is concentrating more and more on the very best space. Second, with development viabilities under pressure, supply of space of the right quality is very heavily constrained. That explains why portfolio occupancy now stands at its highest level since 2003, and ERVs are growing at their fastest pace since 2008. Prime commercial real estate is emerging as a clear winner in a tech-enabled world. In retail, the top 1% of retail destinations in the UK give brands access to almost one-third of all in-store retail spend. So it is unsurprising that this is where, for example, around 90% of all Apple, Inditex, Uniqlo, and Sephora stores are located. It is where 85% of our portfolio is located.

Getting the right brands that shoppers are looking for onto our properties is what fuels rising footfall and consumer spending. That then leads to stronger demand from brands for space, and the cycle continues. Sales across our destinations over the last four years have climbed at roughly seven times the UK national average, which works out to 19 percentage points of outperformance in total across that period. When brands decide to put money into fewer, bigger, better stores, our destinations remain their focus. Occupancy goes up, and rents follow. Given that replacement costs sit at about double current values, new supply is effectively zero and will stay that way. The picture in our offices is much the same. Office space in the UK totals roughly 900 million square feet. Our portfolio is 5 million square feet, so we hold only 0.5% of the UK office market. And it isn't just any 0.5%. Nearly all of that space sits in the country's two most highly valued locations: the West End and the City, including Bankside. For international businesses, these locations consistently rank as number one or two among the top destinations worldwide, because they offer the very best access to talent and the best conditions for it. Even in these highly priced locations, we are beating benchmarks by a significant margin, since our occupancy of almost 99% is well ahead of the 93% recorded for Central London as a whole.

At the same time, the amount of new supply coming to market is quite constrained. That's partly because of the widely recognized difficulties caused by inflation in construction costs and elevated interest rates, which are holding back development, and partly because space is being withdrawn from use or converted to other purposes. In Victoria, for instance, where roughly 45% of our London portfolio sits, the new development supply anticipated across the coming three years is nearly all cancelled out by the possible removal of space in buildings currently being turned into different uses, including residential or hotel. Consequently, rents in the strongest locations keep climbing, and recent leases signed across our current Victoria estate are now comfortably above £100 per square foot. As customers keep embracing new technology like AI, that is only expected to sharpen their preference for the highest-quality space. Although back office and processing positions are expected to decline, in Central London the effect of that is more than outweighed by new roles being created and, indeed, by new businesses that technology makes possible. On top of that, there's demand from big companies that are gathering their office footprint into lively business districts rather than business park sites outside the city. A clear illustration is the significant letting we recently completed at Timber Square to BP, which is bringing together a large share of its operations from an area just south of Heathrow into central London.

When it comes to what's driving occupier demand in Central London — at least for our assets — the mix is encouragingly broad. That shows up in the approximately 1 million square feet of active demand we're seeing across our newest developments. More often than not, customers view new technologies as a chance to boost productivity and grow, not merely as a reason to cut head count and space requirements. On the retail side, customers anticipate that the rise of AI and agentic commerce will place even greater emphasis on the worth of the physical experience and customer connection within a wider, unified commerce ecosystem. To deliver the right experience, brands will have to put more investment into their spaces, which adds further weight to the fewer, bigger, better thesis. Over the past 18 months, we opened or exchanged contracts with more leading expansionary brands — Sephora, Uniqlo, Pull&Bear, Lefties, and other Inditex labels — than any other UK retail platform, and that fact alone underscores the enduring appeal of our destinations. In a setting that's shifting fast, our edge is plain. We hold two market-leading platforms and an irreplaceable portfolio fixed squarely at the very top end of the market, where customer demand is strongest. A reflection of that: we've delivered another strong year on operational performance.

When it comes to retail, rental uplifts keep climbing, as the chart on the left shows, while occupancy has gained 100 basis points to nearly 98% — the strongest level seen since the early 2000s. Like-for-like income growth accelerated to 5.5%, and we have either signed, or have in solicitors' hands, £49 million of leases at an average of 11% above ERV. That pushed ERV growth up to 5.8%, which is comfortably ahead of the initial guidance we gave of growth similar to last year's 4%, and it marks the fastest pace in more than 20 years. This adds further to the income growth we can expect going forward. Leveraging the distinctive data and insights from our market-leading UK platform, we keep investing in experience-led places, with a record number of new lettings. As a result, footfall at our locations is rising well ahead of the UK market average, and we are picking up market share. That fuels sales growth, which in turn draws in more leading brands, and together with strengthening our social eating, dining, and leisure offer, this brings higher footfall, which then generates higher sales, and so on. Consequently, we remain confident in our ability to deliver 4.5% to 7% growth in net rental income each year from our current retail platform over the coming years, powered by capturing the growing reversion in our portfolio, increasing turnover rents and commercialization income, and selective capex investments in highly accretive smaller projects.

In office, occupancy is now nearly 99%. On relettings and renewals, uplifts rose to 14%, versus 10% a year earlier, and that produced 6% growth in like-for-like income. We have signed, or are in solicitors' hands on, £21 million of lettings averaging 7% ahead of ERV, and that generated 7% growth in rental values — well ahead of our guidance of growth similar to the 5% for the prior year, and the highest level we've seen across our office portfolio since the EU referendum 2016. Our portfolio is effectively full, yet reversionary potential has now climbed to a high 17%, and the potential income upside on lease events remains clear. This strength in customer demand bodes well for our latest London office completions. Since our half-year results, we've made strong progress on leasing: our three recently completed projects are now 54% let, with interest — in the form of negotiations, requests for proposals, or active engagement — covering substantially all of the remaining space. ERVs have risen meaningfully, especially for Thirty High, which is due for sectional completion over the summer. With completion nearing, it is now also seeing strong customer engagement, and we expect that to translate into good leasing activity over the next few months.

Altogether, we now anticipate that once these projects are let, they will produce £63 million in net effective rent, along with £43 million of incremental annualized interest expense. Given the momentum we are seeing at present, our expectation remains that every project will be fully leased within roughly 12 months of completion, in line with prior guidance, and that should drive particularly strong earnings growth for FY28. Moving on to capital allocation. Our decisions on capital allocation continue to rest on this clear framework, which reflects our commitment to keeping a strong balance sheet. The framework considers how our investment choices add to income and EPS growth over the short term, and how they alter our portfolio mix so that it can keep delivering sustainable income and EPS growth over the longer term. We keep a constant watch for shifts in risk and return prospects, but at this point our priorities over the next 12 to 18 months are largely the same. Accordingly, we will keep looking for opportunities to recycle capital out of assets with lower returns, offices included, as we have over the past year, and we will keep prioritizing investment in retail, given the high income returns and attractive income growth available.

To make room for this, we don't intend to put any significant capital toward new development during this period. What that means is our ratio of net debt to EBITDA is going to come down substantially. Under this framework, we've had a busy year when it comes to recycling capital. Queen Anne's Mansions was the biggest disposal we made. That asset delivered a total return of zero even though it had a high short-term income profile, since the valuation fell by exactly the same amount as each quarterly rent receipt all the way to lease expiry, and at that point the asset needs substantial redevelopment. Beyond the effect of converting the residual finance lease income into a capital receipt upfront, this sale has basically no effect on earnings, and it derisked the site's remaining value by shifting planning risk for a change of use onto the buyer. We also sold two pre-development assets that were producing a negative income return and would have needed £400 million of capex to build out, along with four retail parks and two smaller offices in London. Taken together, that means we sold just over £700 million of assets that were generating limited return or none at all. This cost NTA 1.1% when sales proceeds are compared with 2025 book values, and that showed up in our half-year numbers, but it's consistent with what our capital allocation framework is aiming for; it significantly strengthens our prospects for future income and EPS growth.

Since our focus is on putting money into retail, we don't intend to devote any significant capital toward new development during the coming 18 months. Office rents in London should keep rising, in our view, and as the last year has shown, our current portfolio is positioned extremely well to benefit from that growth. Given the substantially greater risk entailed, we don't think returns on new office development carry a large enough premium over our high-quality existing portfolio to warrant selling existing offices in order to finance building new ones. On residential, the long-term imbalance between demand and supply still strikes us as compelling, and we're attracted by the long-term features of income growth that is higher and inflation-linked, along with reduced cyclicality. Residential development viability continues to be difficult, yet during the past year we've achieved substantive, positive progress toward improving the viability of our build-to-rent pipeline, with proactive public sector support serving as an important enabler — for example, the package of acceleration measures for London from the Government and the GLA. For the most progressed of our projects, we can now see a potential route to viability, and over the year ahead we'll seek to establish definitively whether or not these projects are able to proceed. As we do so, capex spend will stay very limited, and holding costs are low, but we still regard the time investment as worthwhile.

If we can achieve viable returns, lead times mean the soonest we could start is late 2027. So by the summer, our committed development exposure will fall to under 2% of portfolio value, compared with an average of roughly £1 billion, nearer 10%, across the past couple of years. It will probably remain at that level in the near future, but even further out it will stay well below historical levels, since we are shifting toward a structurally lower amount of capital tied up in development. Helped by favorable prospects for rent and interest rates, investment market activity in office and retail picked up steadily through 2025 and the opening months of 2026. Assessing the longer-term effect of the Middle East conflict on this building momentum is premature, though we are conscious that fresh uncertainty over interest rates could affect investor decisions in the near term. Still, it deserves emphasis that interest rates represent just one factor, and others — including confidence in rental growth prospects and returns versus alternative options — are all stronger now than 12 months ago.

Our near-term priority when it comes to recycling capital hasn’t changed. We’ll keep working to monetize more pre-development assets, since those produce no income return and building them out would take considerable capex. We’ll also seek to monetize more capital in offices, because the potential upside from recycling that capital into major retail destinations at a net effective income yield roughly 200 basis points higher, along with stronger income growth, is meaningful. That said, we will sell in a disciplined way. We stay highly selective about quality, price, and capex risks in retail investment, which is why we chose not to move forward with any opportunities last year. We do, though, have decent visibility on future opportunities, which are likely to reach the market over the next year or two. Capital rotation remains an important part of our longer-term strategy, but we don’t depend on it to drive growth, since around 80% of our potential EPS growth by FY30 comes entirely from our existing portfolio and platform. With that, I’ll now hand you over to Vanessa.

Thank you, Mark, and good morning. Landsec has delivered another positive year, with the quality of our portfolio and strong operational execution driving that result. Occupancy and rental growth are at record highs, and our growing reversion provides good visibility into future income growth, leaving us well positioned to accelerate EPS growth in the near term. In financial year 2026, like-for-like income rose 4.6%, and overheads came down significantly. Consequently, our EPRA EPS grew 2.2%, even with the 1.8% EPS impact from the earlier than planned sale of Queen Anne's Mansions. That supported a 2% increase in the dividend. Portfolio valuation rose 1.2%, with NTA per share up 0.9% for the year and 2.2% in the second half. We also cut net debt by almost £100 million, bringing LTV down to 38.7% and lowering our net debt to EBITDA to 8.4 times. With under £200 million of development capex still to come, net debt to EBITDA should come down meaningfully in the near term as we lease up on new developments. Our balance sheet remains in a strong position. The primary driver of that performance was strong like-for-like rental growth, with growth of 4.6% well ahead of our initial guidance, and it was in line with our revised guidance that we gave in November.

Office and retail together make up more than 90% of our income, and both did well — up 6% and 5.5% respectively. Occupancy hit new highs in both portfolios, and because we've stayed focused on efficiency, we lifted our operating margin 160 basis points to 87.1%. Meanwhile, uplifts on relettings and renewals nearly doubled to 15%, which shows the reversion building across the portfolio. Demand from customers is still strong, and that keeps supporting additional growth. Our office portfolio is now 99% full, so future like-for-like growth in offices will mostly come from capturing reversion at lease events. We do expect office growth to moderate somewhat in the year ahead, but overall we still expect like-for-like income growth of 3% to 5%. The second main driver of earnings was a continued cut in overhead costs. Those fell 15% last year to £62 million, well under our guidance of below £70 million. In fact, we've already hit our financial year 2027 target of bringing overheads down to the low £60 millions. That improvement reflects the investments we've made in data and technology over the last few years, which are now helping automate core processes and sharpen our insights to drive further value.

All told, overheads have fallen by over £20 million across the past three years, and they now sit at the lowest point seen in more than 20 years. Going forward, we anticipate overheads remaining in the low £60 millions, as additional efficiencies counter inflation, so a larger share of our income reaches earnings and dividends. Resilient funding also underpins that earnings growth. At 8.6 years, our average debt maturity is the longest anywhere in the UK REIT sector — twice the sector average elsewhere. Moreover, no debt needs refinancing before 2028, and 89% of our debt is fixed or hedged. The average cost of our debt stands at 3.6%, and it will climb only steadily as time passes. Since our maturities stretch so far out, we anticipate average debt costs remaining comfortably beneath the marginal cost of borrowing well past the coming decade. That affords us robust insulation from interest rate volatility. This year's EPS bridge makes the benefit of those three key drivers plain to see. Like-for-like income growth of £21 million contributed 2.8 pence to EPS, while £11 million in overhead savings contributed another 1.5 pence, more than offsetting the like-for-like rise in finance cost.

When it comes to other items, the year-on-year swings cut EPS by 1.5 pence, and two things drove that: the gain from bad debts previously provided for coming back, which normalized to £2 million after rising in the prior period, and surrender receipts, which were also very small at only £4 million. Neither item now gives much of an EPS boost, and we don't see them having a meaningful effect going forward. Nearly all of this year's income came from regular, recurring rental income, with little gained from one-off receipts. Regular investment activity contributed a net 0.3 pence, and before the impact of the earlier than planned QuAM disposal, EPS rose 4%. That landed at the top end of our initial guidance; taking that disposal into account, EPS was up 2.2%. The trends underpinning this strong operational performance are still very much intact, and the near-term outlook for EPS growth is positive. As we guided in November, we expect EPS to be stable this year versus last year, with underlying growth offset by the annualized effect of the QuAM sale, which carries a 4% impact on EPS. With the momentum we have today, we expect EPS growth in the financial year 2028 to land in the high single digits.

This is a result of our ongoing capture of improving reversion along with leasing activity at the London office developments we completed recently. Demand for that space is robust, as Mark mentioned, and leasing momentum is already building nicely. Our standard assumption is that a development leases up over a 12-month window following completion, while interest capitalization ceases the moment a project is finished. Because of that gap in timing — interest costs coming in before the full income arrives — we anticipate a temporary drag on earnings from these developments during this financial year in the range of £6 million to £8 million. That should be more than recovered in the subsequent year, since once these projects are fully let they are expected to contribute £20 million to earnings, which underpins high single-digit EPS growth in financial year 2028. It also plays a key part in the significant net debt to EBITDA reduction we foresee across the next two years. The ratio we currently report reflects net debt that includes £1 billion of capital employed in our recent London office developments, yet we booked virtually no income from them last year, given that three completed only recently and Thirty High is set to finish within the next few months.

We don't intend to launch any new development work in the near term, and investment in pre-development assets is being trimmed. As we keep capturing reversion across the existing portfolio and lease up those developments, net debt to EBITDA should drop under 7 times over the coming two years, with no material disposals needed. That strong capital base is reinforced further by the other balance sheet metrics we hold. Portfolio valuation rose 1.2%, supported by leasing activity that produced 6.4% ERV growth — the strongest in almost 20 years and well above guidance. Yields were essentially flat, though two isolated factors offset the benefit of that robust ERV growth. Those were the business rates increase at Piccadilly Lights, which I flagged six months ago, and a valuation reduction on office development assets driven by higher build costs. Combined, those two factors cut overall portfolio valuation by 1.1%. Disposing of roughly £700 million of assets that delivered limited or no returns carried a 1.1% cost to NTA and total accounting return, as shown in our half-year results. Despite that, NTA climbed 0.9% for the year and 2.2% in the second half. With net debt nearly £100 million lower, LTV came down to 38.7%.

We know that fresh uncertainty about interest rates globally might impact investment markets in the short term, yet income growth is what pushes value growth in real estate over the long run, and the record rental growth throughout our portfolio demonstrates that this upside keeps rising. We are still well positioned to speed up EPS growth across the coming few years. Back in November, we lifted our projection for potential earnings per share for financial year 2030 from 60p to 62 pence, and today we repeat that projection. Let me walk quickly through the components. Beginning with last year's 51.4 pence, the QuAM sale leaves a residual EPS effect of 2 pence this year. The biggest factor behind future EPS growth remains capturing the expanding reversion within our current portfolio. Across the past four years, we achieved 4% compound annual growth in like-for-like net rental income, and during that same stretch, reversionary potential in offices has tripled to 17%, while uplifts in retail lettings and renewals have climbed to 15% as well. We have clear visibility on delivering our projection, which assumes roughly 4% growth in like-for-like income per annum from this point. With our targeted overhead savings now delivered, the second-biggest contributor is leasing up our existing London office developments, which will contribute about 3 pence.

The schemes we've finished recently are already 54% let, and strong demand for the remaining space is driving ERVs up. That's another area where we have good visibility. Cutting capital tied up in pre-development assets that yield little or nothing will add roughly 1 pence per share via interest cost savings. Global interest rates have risen since November, yes, but the effect on our future earnings growth is largely offset by our long-dated maturities and hedging profile, and it's further offset by higher ERV across both our existing portfolio and recent developments. Future asset rotation offers us more upside, since we intend to recycle additional capital out of lower-return assets and put around £1 billion into major retail destinations. Our planned recycling from offices into residential is broadly EPS neutral across this period, with the EPS benefit arriving after financial year 2030. We're well positioned to deliver EPS growth of 5% per year on average between now and financial year 2030, and that sits on top of our existing strong income return of 5.8% on NTA. Roughly 80% of that growth stems from our existing portfolio and platform, so we don't depend on investment market activity to deliver attractive EPS growth. With development exposure declining, our risk profile is coming down, which leaves us well placed to deliver substantial shareholder value.

With that, I'll turn things back over to Mark.

Thanks, Vanessa. I'll close now by summarizing what to expect from us over the coming year, where we see the differentiation and opportunity for Landsec, and after that we'll take your questions. During the past few years, we have taken active steps to position Landsec for an environment of higher inflation and higher interest rates. The refreshed strategy we presented a little more than a year ago captured this, since it plainly stated that our main focus is delivering sustainable income and EPS growth for shareholders. Every one of our priorities and decisions stems from that — whether it's the choice to cut our development exposure materially, our proactive stance on lowering overhead costs, or seizing market windows to term out debt or, equally, repositioning and refining our portfolio. Across the last five years, we've disposed of close to £4 billion of largely mature assets and put a broadly comparable sum back into high-quality new acquisitions and well-timed developments. That has given us the two irreplaceable portfolios and best-in-class platforms we have today. Our focus now is on maximizing their potential by driving continued like-for-like income growth and leasing up our latest developments. We aim to supplement this by rotating further capital out of offices into retail over time, although the contribution to EPS growth from this is relatively modest compared to the upside embedded in our existing portfolio.

The timing of that judgment will depend on when we see market conditions as being most appropriate. In the meantime, the capital we currently have deployed in residential is modest and concentrated on opportunities of high quality. Our efforts are centered on securing viability for those projects, since the longer-term fundamentals of this space stay attractive and justify the work. Capex in this area over the coming year will be minimal. Taken together, all of this leaves our differentiation clear. With sustainable income and EPS growth as our primary focus, there is absolute clarity throughout our entire business. Because our capital allocation framework is clear, we are rational about investment decisions as we pursue that financial objective and move toward an even stronger capital base. Simultaneously, customer demand continues to be high. Occupancy has reached its highest level in two decades, and rents are climbing at their quickest rate in nearly 20 years, which bolsters our growing reversion and makes the upside for future income growth abundantly clear. With overhead costs now reduced to a 20-year low and our savings target achieved a year ahead of schedule, this top-line growth will increasingly feed through into an acceleration of EPS growth. Landsec now stands positioned with a lower risk profile and a clearer, stronger growth outlook.

Given a current income return on NTA of 5.8%, the capacity to generate roughly 5% EPS growth each year from now through FY30 underpins a compelling total return prospect for shareholders. Ladies and gentlemen, many thanks. At this point I'll open the floor for Q&A. As we normally do, we'll begin with questions from the room here. Handheld mics are available, so please just wait for one once you've put your hand up. After that I'll take questions from anybody joining on the call, and lastly from the webcast. Our first question is right here on the right, and then in the middle with Paul at the back, three rows back, so...

Morning — Oliver Woodall here, from Coletics. I was hoping you might give us a little more color on what has to change for residential developments to trigger more attractive, risk-adjusted returns in your view — what would make them more viable?

Honestly, it comes down to a single factor: backing from public sector policy. Consider our most advanced scheme, O2 Centre Finchley Road — it already holds detailed planning consent, yet that consent carries a 35% affordable housing obligation along with full Community Infrastructure Levy charges, and on that footing the project simply doesn't work financially. Late last year the Government and the GLA announced they were consulting on a set of acceleration measures, and those were finalized in March of this year; for specific projects able to meet a delivery timetable — Finchley Road among them — they cut affordable housing from 35% down to 20% and essentially halve the CIL charge. Taken together, those two changes, in our view, bring the scheme to a point we believe makes it viable. We still need to bottom out build cost and design in order to validate that. As I mentioned in my remarks on the call, we're putting very little money into these projects over the year ahead, and I think the goal must be to determine whether these projects can reach viability. It's mainly a matter of policy support.

Thanks. One last thing — could you give us any update on how talks are going around the transaction market for major retail assets, and whether anything has shifted there in light of elevated bond yields and that sort of thing?

As we mentioned earlier and noted in the statement, we believe we have visibility on more than £3 billion of prime catchment-dominant retail assets that we expect to reach the market over the next one to two years. The next one likely to come forward is the Metrocentre, which could be on the market as early as this month. I think investor interest in the sector is greater now. Clearly, the stats we've reported today don't go unnoticed. For the larger lot sizes, where you need access to capital, a desire to hold assets over the long term, and operational expertise combined, I think competition around there is much less likely. Given that you're talking about yields typically starting with a 7 and perhaps even starting with an 8, that upfront position is much less sensitive to purely rates, and I think people are becoming more comfortable with the level of growth.

Much appreciated.

Let's move to Paul in the center, and then there are a couple right behind him. Hello,

Thanks very much. Paul May from Barclays. I have a few questions — three, actually, and two of them are connected. Clearly you've shifted away from most valuation-based metrics: EPS is now your focus rather than NAV, and net debt to EBITDA rather than LTV seems to get more of your attention. Yet you still concentrate on ERVs — elusive rental values, as some people call them. Why aren't you reporting on, and simply focusing on, renting and leasing versus previous passing? The usual pushback is that rent on vacant space represents an infinite uplift, but surely reporting on an absolute basis alone would be more relevant for the earnings-based metrics you now have. And linked to that is TSR: isn't earnings yield plus earnings growth more relevant than earnings yield at NAV plus earnings growth as a focus point for you?

Okay. Did that make 3?