UK Commercial Property REIT Limited (BBOX) Earnings Call Transcript & Summary

I'm Ian Brown, Head of Corporate Strategy and Investor Relations. I'm joined today by Aubrey Adams, our Chairman; Colin Godfrey, and Frankie Whitehead, the CEO and CFO of Tritax Big Box; and by Bjorn Hobart, our Investment Director. Before I hand over to Aubrey, a few points to note. Firstly, this presentation is being recorded and a replay and transcript will be available on our website later today. Secondly, there will be a live Q&A session for investors and analysts after the presentation. [Operator Instructions]. Thank you.

Good morning, everyone. The Board believes the combination between Big Box and UKCM represents a compelling opportunity to create a high-quality and complementary logistics-oriented business. This opportunity is in line with a highly successful strategy that Big Box has delivered since IPO, and which over recent years has included carefully acquiring selected last mile and urban logistics assets. UKCM's assets complement our larger assets, generating compelling returns and help to broaden our customer offer in terms of building size and location. In addition, they provide significant scope for near-term rental income growth and asset management opportunities. Our strong conviction call remains that UK logistics is the most compelling commercial real estate sector. It is supported by long-term structural drivers that we believe will underpin attractive levels of rental growth and performance. Through the combination of UKCM and Big Box, we will acquire a component of assets outside of logistics, which we're calling nonstrategic. In line with our convictions, we will over time, seek to rotate out of these nonstrategic assets, recycling capital primarily into our attractive logistics development pipeline. In line with this and given our enduring conviction in the sector, we would expect the combined portfolio to be exclusively focused on high-quality U.K. logistics assets upon completion of this capital recycling. In summary, Big Box recognizes the quality of the UKCM portfolio and sees a combination with UKCM as being highly complementary to our strategy and helping to drive returns for both sets of shareholders. And to cover this in more detail, I'll hand over to Colin.

Thanks, Aubrey, and good morning, everyone. As Aubrey said, a combination with UKCM presents a unique and attractive opportunity that's clearly in line with our strategy. The transaction will produce a high-quality logistics portfolio with resilient and growing income that complements our Big Box portfolio with an attractive element of urban and last mile assets. The logistics element of the UKCM portfolio presents significant near-term opportunities to deliver rental income growth through capture of its 39% rental reversion. The combination immediately enhances our logistics real estate offering to customers by providing a broader range of building sizes, locations and tenant uses, from mega boxes to smaller, strategically located assets within key urban locations. As Aubrey outlined, UKCM's nonstrategic assets are high quality and will comprise around 8% of the combined group GAV. This represents an opportunity to recycle capital into logistics and deliver superior returns for both sets of shareholders. In addition to an immediate GBP 4 million of cost savings per annum, providing a degree of immediate accretion, further mid-digit earnings growth is supported by the recycling of capital from nonstrategic assets to logistics development. And our developments are producing an attractive yield on cost at the midpoint of our anticipated 6% to 8% range. Identified cost savings will be immediately accretive to earnings and our progressive dividend. The transaction will also preserve our robust and conservatively leveraged balance sheet with a reduced loan-to-value ratio of 29%, significant available liquidity, no near-term debt maturities and flexibility to raise leverage modestly. From a broader market perspective, we believe that this combination is well timed with the potential for asset values to increase from improving UK macroeconomics and through a share-for-share transaction at NTA, both sets of shareholders can benefit. Lastly, the combination will increase our scale with both sets of shareholders benefiting from enhanced financial flexibility, lower cost of capital and increased share liquidity. As I mentioned, the combination has strong alignment with our strategy to acquire and actively manage high-quality logistics assets, attracting world-leading customers and delivering attractive and sustainable returns to shareholders. The transaction will enhance our customer offer and advance our strategy by increasing our exposure to high-quality urban logistics, create value for both sets of shareholders via identified direct and active management of portfolio of assets, which offer significant reversionary potential and enable us to recycle capital from disposals of UKCM's nonstrategic assets into our attractive logistics development pipeline or high-returning logistics investment opportunities. As part of the transaction, UKCM shareholders will receive 0.444 new ordinary Big Box shares for each UKCM share, which reflects a NAV-to-NAV approach based on December valuations. This implies an offer price of 71.1p per UKCM share, which is a 10.8% premium to UKCM's undisturbed share price and a 23% premium to UKCM's 6-month VWAP. Following completion, Big Box shareholders will own circa 77% of the combined group, whilst UKCM shareholders will own approximately 23%. We've received strong support from UKCM shareholders with an irrevocable undertaking from Phoenix and a letter of intent from Investec, together representing around 57% of UKCM's issued share capital. Both Big Box and UKCM's Boards believe that the transaction has compelling strategic and financial rationale, building on Big Box's existing strategy and a proven track record of delivering attractive and sustainable returns, which both sets of shareholders will continue to benefit from. Over the following slides, Bjorn Hobart, our Director of Investment and I will provide an overview of the strong underlying property fundamentals of UKCM's portfolio and the opportunity to actively manage this to capture embedded income reversion. What the combined UKCM and Big Box portfolio metrics will look like and how this is complementary to the Big Box portfolio and how we will apply the full extent of Tritax's expertise to unlock and maximize value from the entire UKCM portfolio. This transaction further cements our leadership position as a U.K. logistics-focused REIT, allowing us to utilize our sector knowledge to enhance value. Upon completion of this transaction, Big Box's GAV would increase by 24% from GBP 5.1 billion to GBP 6.3 billion, moving Big Box from the sixth to the fourth largest U.K. REIT by portfolio value, which brings a multitude of corporate advantages that will benefit both sets of shareholders. Upon close, the combined portfolio would comprise 92% logistics and 8% nonstrategic assets, which we would recycle over a period of approximately 24 months. The combined business will generate rental income of approximately GBP 290 million per annum and benefit from 23% combined portfolio reversion. Big Box's portfolio WAULT would reduce slightly from approximately 11 years to around 10 years, although the impact of this will be reduced as asset management plans are implemented and longer lease development assets are added to the combined portfolio. Bjorn will now provide you with further detail on UKCM's portfolio and the combination.

Thank you, Colin. As an overview, the GBP 1.2 billion UKCM portfolio comprises 37 assets, which are heavily weighted towards logistics at 61% by value, with the nonstrategic portion of the portfolio spread across alternatives, which include student accommodation, hotels and town center leisure schemes; retail, which includes both retail warehouses and food stores; and town center offices. Among the portfolio's most noteworthy assets are the top 5 properties by value, 4 of which are in the logistics sector, and collectively account for 31% of overall portfolio with the fifth asset being a prime retail warehouse park in Leeds. These 4 logistics assets are in core Southeast markets and represent a combination of urban estates and a single let Big Box. We believe that our logistics portfolio of this scale and quality would be extremely challenging to aggregate in the open market in a timely and cost-effective manner. The portfolio also demonstrates a clear commitment to sustainability, with an impressive 85% of assets rated EPC A to C. Now focusing on UKCM's GBP 740 million logistics portfolio of 19 assets, which represents 61% of the portfolio GAV and comprises high-quality logistics assets across a range of building sizes in core locations producing GBP 34 million per annum of contracted rental income. The first pie chart indicates the portfolio has a high weighting of 89% towards the core logistics markets of the Southeast, including London and the Midlands, where supply is particularly constrained. Occupational demand remains robust, and there is a resilient underlying land value. The second pie chart shows how the portfolio has a 71% exposure to sub 250,000 square foot units, with 54% being smaller urban and last mile properties, complementing the bigger format buildings we typically hold in the Big Box portfolio. This supports our strategic focus to selectively increase exposure to these size bands, which we have been implementing over the last few years, more recently, taking advantages of changes in asset values through selective purchases. The final chart indicates how the portfolio is heavily biased to open market rent reviews, which represents 78% of contracted rent. This gives us near-term opportunities to capture the market rent, which currently reflects a 39% reversion, with 43% and 79% of reversion subject to lease events occurring by 2025 and 2026, respectively. Looking closer at the UKCM's logistics portfolio, it comprises 8 assets of less than 100,000 square foot, 6 assets of 100,000 to 250,000 square foot and 5 assets of greater than 250,000 square foot across 79 units. These characteristics bring a number of benefits to the combined portfolio by immediately enhancing our customer offering, given a broader range of building sizes, the shorter lease terms will allow us to actively manage and drive value. This is especially evident in the sub-100,000 square foot urban size band, where there is a 5.3-year weighted average unexpired lease term and a 56% rent reversion and a broader range of locations and tenant uses in line with our strategy for further diversification in the logistics sector. On this light, we have outlined the positive impact of combining the portfolios of UKCM with big box, which further highlights it's complementary nature. The first chart indicates the increase in exposure to the key markets of the Southeast and Midlands, which will reflect 71% on a combined basis. The second chart shows the UKCM's portfolio complementing Big Box's existing larger assets with a range of smaller units. These smaller assets typically have shorter lease profiles with more frequent opportunities to add value with active asset management. And finally, in the third chart, the increased percentage of open market rent reviews. Mean our overall portfolio is well balanced between inflation-linked and open market review types. A combination, we think is particularly attractive, especially given the portfolio's significant reversion. If we look at the detail of the combined portfolio's lease profile, it shows that 79% of the rent reversion can be captured in 3 years through either rent reviews or lease expiries, presenting near-term income growth. Turning to the GBP 475 million nonstrategic part of the UKCM portfolio formed a diverse mix of commercial real estate sectors comprising alternatives, retail and offices. And through our property due diligence, combined with external inspections, we have been impressed with the modernity, quality and core locations of these assets, which generated a rental income of GBP 31 million per annum with a blended net initial yield of 6.4% and a net reversionary yield of 6.8%. Critically, the majority of these assets are in attractive sectors which are in demand from investors. Consequently, we've already had a number of unsolicited inbound inquiries on components of the nonstrategic portfolio, which we can pursue upon completion. The UKCM team have recently successfully exited 2 office assets, Craven House in London and Temple Quay in Bristol, both at prices in line with their December 2023 book value, further demonstrating the portfolio's liquidity. We aim to build on this successful track record by adopting a disciplined approach to substantially exiting these assets over a period of approximately 24 months from completion. A key element to this acquisition is that these nonstrategic assets will provide incremental capital once divested to rotate into high-returning, triple-net logistics assets from our development pipeline, targeting a 7% yield on cost or opportunistic standing investments. I will now pass back to Colin who will highlight how our in-house asset management expertise will be utilized to drive value in the portfolio.

A key part of the combination described by Bjorn is the additional value that we can unlock through active management. Tritax is a logistics real estate specialist with a deep understanding of the market and strong relationships with its key players. As a boutique specialist manager, we pride ourselves on our entrepreneurial and dynamic culture, which enables us to make well research decisions quickly and decisively. We do all of our asset management in-house, which we believe is vital to building strong customer relationships and identifying opportunities to create value, and we rigorously pursue those opportunities. In addition, as we mentioned in our full year results, we have continued to invest in our capabilities as a full range service provider and have a broad range of expertise in key areas, including supply chains and power. Consequently, we believe that we're optimally placed to unlock additional value from the UKCM portfolio. We've outlined the highly reversionary nature of the logistics part of the UKCM's portfolio and our rigorous direct and proactive approach to asset management that will ensure we maximize the opportunity from the significant level of lease events in 2024 and beyond. As Bjorn explained, we will sell nonstrategic assets once we've maximized value through asset management. And we have identified opportunities within the nonstrategic portfolio to reposition assets into logistics and data centers. Finally, we have sector leading ESG credentials and are looking forward to applying this to the UKCM portfolio. So that provides an overview of UKCM's portfolio and the strategic rationale for the combination. I'll now pass over to Frankie to discuss the financial benefits, Frankie. ?

Thank you, Colin. In addition to the clear strategic benefits of a combination with UKCM, we believe it also has a number of compelling financial benefits over the short, medium and long term. Looking at the cost savings. The transaction is expected to generate immediate cost savings totaling GBP 4 million or 11% of the combined overheads. This is split between GBP 2.6 million of management fee savings following the unification of the management contract under the existing Tritax Management IMA along with GBP 1.4 million of other operational cost synergies. We also see the potential for further material cost savings over the medium term. In 2022, UKCM reported direct property cost leakage, representing 10% of rental income. There are further operational synergies available from increasing the portfolio efficiency. This will be incremental as we rotate out of nonstrategic assets into more efficient triple-net logistics leases. And given Big Box's investment-grade credit rating, the margin at which it borrows is currently 70 basis points lower than that of UKCM. Over time, we therefore expect this cost of capital benefit to feed through into efficiencies across the UKCM loan book. Finally, our Chairman has negotiated a full waiver of the termination fee that was due under the IMA between UKCM and its current investment manager Aberdeen, achieving a further one-off saving of GBP 6.7 million. Turning to look in more detail how we plan to drive returns through a capital recycling program. As we have outlined, our capital recycling strategy will focus on the disposal of the nonstrategic assets for investment primarily into our profitable development platform. We will adopt a disciplined approach targeting a substantial exit from the nonlogistics assets within approximately 24 months. Full rotation out of the nonstrategic assets and redeployment into our development pipeline is expected to generate upon stabilization, mid-single-digit growth across both adjusted earnings and dividends, along with slightly higher growth in EPRA NTA. And you can see on the right here, a combination of noncore disposal proceeds and maintaining a leverage position of 30% would provide us with just over GBP 500 million of additional firepower to invest into our current and near-term development pipeline. In broad terms, this provides us with greater certainty over funding the next 2 years of our development activity. And this also provides further financial flexibility allowing us to fund an acceleration to our development targets over the next few years, subject to market conditions or an ability to capture accretive investment opportunities, which we believe will start to manifest as we progress through 2024. Under both scenarios, and acceleration in the deployment of our capital would lead to an improved shareholder return over the medium term. Another benefit of the transaction is that it further strengthens our balance sheet, given the lower leverage position of UKCM. Big Box operates with a conservative leverage policy, and this is a philosophy shared by UKCM. Many of the key financing metrics of the 2 businesses are very well aligned, including the average cost of debt, average debt maturity and the fact that the combined debt book will remain significantly fixed or hedged. However, with UKCM's low leverage at just 15%, a combination reduces the day 1 Big Box LTV from 32% to 29% as well as a net debt-to-EBITDA ratio reducing from 8.3x to 7.4x. Critically, we maintain a well-staggered debt maturity profile with no near-term refinancings. We have received consent from UKCM lenders to pull all of UKCM's existing facilities without additional cost as part of this transaction. And as mentioned, factoring in Big Box is BAA1 credit rating enables potential financing synergies from a lower pro forma cost of capital for the combined group over the medium term. And finally, to summarize, the combination has a number of strategic and financial benefits, including: firstly, enhanced earnings. It is expected to be immediately accretive to adjusted EPS, supporting future earnings growth and dividend progression. Secondly, there is a significant opportunity to unlock value via asset management, including a significant rental reversion of 39% within the UKCM logistics portfolio with lease profiles to facilitate the short-term capture of that embedded income. Thirdly, the opportunity to generate mid-single-digit growth in adjusted earnings per share and EPRA NTA per share through the recycling of nonstrategic assets into our accretive development pipeline. Fourth is the instant access this transaction provides to a high-quality logistics portfolio. From this, we expect to deliver unlevered returns materially above Big Box's cost of capital over the medium term. And by acquiring via a share for share transaction, we are saving significant property transaction costs we otherwise would incur if we were to organically acquire these assets on a piecemeal basis. And finally, as I've outlined, there are potential further cost benefits from implementation of triple net leases as we rotate capital from nonstrategic assets into logistics, in addition to the anticipated financing synergies that we expect to come through over the medium term. And with that, I will hand over to Colin to conclude.

Thanks, Frankie. To conclude, we're really excited about the opportunities that the combination with UKCM unlocks for both sets of shareholders. We are acquiring a high-quality logistics portfolio heavily exposed to the most attractive logistics markets in the U.K. and providing us with access to more urban and last-mile assets. It is highly complementary to our existing Big Box portfolio and aligns with our strategy. We can leverage our existing customer relationships across the combined business to offer a true end-to-end logistics real estate offer. And we can bring to bear our extensive logistics expertise to unlock further value from the UKCM portfolio. Ultimately, the combination of our ability to add value to UKCM's logistics portfolio and the recycling of capital from nonstrategic assets, provides significant growth opportunities for us as a business, driving further shareholder returns and further strengthening our leadership position in U.K. logistics. That concludes the presentation. Thank you for listening. I'll now hand over to Ian, who will open up the line for your questions.

[Operator Instructions] So Jess, if you don't mind, can you have Q&A on the phone please.

Of course. So our first question comes from the line of Rob Jones from BNP Paribas.

I've got three in total, if that's okay. First one, probably for Frankie. The GBP 2.6 million fee saving as part of the GBP 4 million total cost savings, does that GBP 2.6 million, is that net of incremental fees charged by Tritax Management LLP to Big Box as a result of the increase in assets that will now be being managed?

That is the combined NTA of the 2 businesses, applying to our fee structure. So yes.

Okay. Great. The second one was, should I think of nonstrategic UKCM sales as -- = as additional disposal over and above any planned Big Box asset sales that you would have been undertaking over the next, say, 2 years to fund the development pipeline, i.e., should I see this as incremental disposals? Or is this part of the wider plan to fund pipeline opportunity.

No, you shouldn't think about them as incremental, Rob. But we will flex against the market, we are expecting the investment market to improve in the last part of '24 and into 2025. And you should expect us to see us also divesting off some logistics assets in the usual way, but not at the same rate as we've done more recently because that will be essentially covered off by the nonstrategic sales. So we've got the ability to flex into the market demand and also to support our desires to reinvest that capital into a new investment assets, but also to support our development CapEx desires as well.

Okay. Very clear. And then the final one for me was when I think about the income upside from redeployment of capital post disposals. If I simplistically think about it as we're losing roughly a 6.4% yielding portfolio, GBP 475 million, and we're reinvesting at a blended average, say, 7% yield, i.e., 60 bps spread on 475, which is about GBP 3 million of incremental rent. Is that a reasonable modeling assumption to make?

I think that is a reasonable assumption, Rob, bear in mind the fact that we're coming out of noncore going into core where we fundamentally believe in the rental growth prospects, and IRRs of the development component of the portfolio. We have guided to mid-single digit adjusted EPS growth as a result of that rotation. So that is included within [Indiscernible] guidance as well.

Just to supplement Rob briefly to your last question. I mean I think it's fair to say that in terms of the sales program, I mean we have given guidance on the development side of 2 million to 3 million square feet per annum. We currently have around 7 million square feet planned consented land, and we are expecting more planned consents coming through in the near term. So we're not constrained on land availability, but we will be customer-led in terms of that demand profile and it's highly flexible. So if necessarily we can flex up to 4 million or 5 million square feet by way of example. And obviously, that back solves against the level of investment sales that you can expect, both from the nonstrategic and also from our core portfolio.

But if this gives you a lower levered balance sheet, which is great because it gives you more firepower, this gives you greater volume of noncore assets that you can sell. Why not today come out with a revised CapEx spend guidance above your previous comments, reflects the capacity you've got.

Because we're customer and market led primarily. So we've got the ability to do exactly what you said, but we want to make sure we do that in a measured way at a point which delivers attractive returns to our shareholders.

[Operator Instructions] And our next question our next question comes from the line of Paul May from Barclays.

Just one, I think, from me. What would change your targeted investment from development towards acquisitions? You've seen others highlighting both in U.K. and Europe that acquisition opportunities are coming through an attractive yield, and I expect that to increase as the year progresses. You mentioned with development, it's difficult to accelerate that. And there's obviously risk around speculative development that is in the market and will your schemes are speculative at the moment. So at what point does acquisitions become more attractive than a, say, circa 7% yield on cost on development?

Thanks, Paul. It's Colin. So look, I think what we said is that development [Indiscernible] accelerated. So that's the first point of clarification. I think the second point I would say is that we consider all opportunities on their own merits. And it's really about making sure we've got a balanced profile of opportunity to capture that, always thinking about the total return delivery. So you will see us, and I think we consistently improved over the years, our ability to buy well and deliver strong returns from our investment assets. And to the extent that we see investment opportunity through perhaps the stress in the market, then we would look to take advantage of that. It's not -- they're not mutually exclusive elements to our business line, and we're not pursuing the development opportunities exclusively against opportunities in the investment market. So we will consider both at in their own merits.

Okay. And do you think those will accelerate those opportunities as the year progresses?

I think there will be -- we're in brackish waters right now. There is an expectation that investment market is going to become more interesting, I think, in the second half of the year because the interest rate cuts are likely to give rise to a higher level of investment demand. So I think you'll see more liquidity in the market. But at this point in the market cycle, there will undoubtedly be some transactions which make like the market is hardening, and others, which make it like it's softening. And we would look to take advantage of that market opportunity. So absolutely, we'll be live to those opportunities as the market starts to open up.

Next question comes from Andrew Saunders from Shore Capital via the webcast. He asks that -- you mentioned advanced interest in some of the disposal assets, which is encouraging, but is it realistic to expect a market value for this disposable portfolio given you are now committed to being a forced seller?

Okay. Well, I think the first point there is that we're not a forced seller. Forced seller is someone that has to dispose of assets in very quick order. We have identified asset management opportunities within this portfolio that we would look to add value to during the course of the next 24 months or so. We have suggested that as a point of guidance, we're not saying that, that's a specific time horizon. And of course, as I've said, we're going to dispose assets in the market in a timely fashion to the extent that we believe that we are securing attractive value for our shareholders, and we're taking that into more accretive opportunities, and obviously at a much more attractive yield on cost. So you will -- and I think the other point to make is that the sales that UKCM has undertaken in its offices already have been -- and we understand there's further asset under offer again at book. And we -- given that the market knows that we are looking to acquire this portfolio, we have had a number of inbounding inquiries right away across sectoral split from parties that are interested in acquiring those assets at or above book. So we're pretty confident that this is one of the reasons why we were really attractive to the portfolio, the quality and what we perceive as a high level of liquidity of the assets in a timely fashion.

The next question comes from Denese Newton of Stifel, who asks, it would appear that not all UKCM directors are recommending the offer. Who are they? And why are they not prepared to recommend the deal?

Okay. Thanks, Denese. So Mr. Pereira Gray, the Chair of UKCM is abstaining from voting. And he is clearly entitled to his opinion. You won't be surprised to hear that we don't agree with Mr. Pereira Gray's positioning. We have I think delivered a robust rebuttal for each of the points that Mr. Pereira has made and we set these out in the 2.7 announcement that you can read. It's important to note that all of the other UKCM directors are in favor of the deal. They've interrogated it very, very closely. We understand that there's been strong support from UKCM shareholders. And indeed Rothschild, UKCM's financial adviser has also recommended the deal to UKCM Board and to UKCM shareholders, noting also that we have a letter of intent and undertaking in place from both Phoenix and Investec, providing 56% support for -- from UKCM shareholders prior to the vote. So I think that's pretty emphatic.

And just, I think just one final question from the phone, if you wouldn't mind taking at.

Our next question comes from the line of Suraj Goyal from Green Street.

Just a couple of questions from me. The first one is around -- you mentioned that it's around 10% leakage in the existing UKCM portfolio. What level would you anticipate this margin to get to? And what would you think the achievable time frame would be post combination?

So in terms of time frame, I would keep that consistent with the 24-month guidance we've given to rotate out at noncore. We haven't given specific guidance around what that 10% could get to. But I think if you apply the fact that there is 40% of the portfolio within that noncore component, that would give you a bit of a feel for where that property leakage could move to post disposals. So that answers that one.

That's helpful. The second one is, I know you mentioned a 24 months expected time line for selling the assets. And I appreciate you on the previous question you mentioned you aren't a forced seller and time period is just a guideline. But what would the plan B here in case you do to difficulties to carry out the disposals? Would you be confident in managing those assets yourself and being able to unlock any sort of reversion potential there? Just would appreciate some color around that.

So in-house, we have expertise in the vast majority of these other sectors. As I mentioned earlier, we've identified asset management opportunities. We would look to execute on those prior to sale in order to capture full value. As I've said, we've already had inbound inquiries on a number of those sectors. That gives us a high level of confidence in addition to the sales that have already been taken place in offices and the offer on the ledger asset. We are of the view that the investment market would generally start to improve. There's quite a lot of talk in the investment market about the level at which retail yields have reached and the level of which office yields have now reached, which I think is giving some parts of the investment community increased confidence that those sectors are now offering interesting value at this point in the market cycle. . And as I mentioned earlier, the expectation of significant capital entering into the commercial property market in the U.K. is likely to give -- provide a rising tide across commercial property values more generally, but we think more specifically in industrial logistics because of the attractive level of rental growth that it's been delivering in recent times. So look, now we've got a proven track record of performance as a house in terms of investment sales. And you saw that we sold GBP 327 million in several transactions last year, all aggregated above book. And all of those were off market. So we've got a very strong level of knowledge of who the buyers are, what they want to buy, what their pricing point is, what agent are acting for them, and we're confident in extracting best value as a consequence of that. And we've done that year after year for the last few years in what has been actually one of the most challenging markets in terms of liquidity in recent times.

We currently have no questions on the phone lines. So I will now hand back to Ian for some additional webcast questions.

And I will handover to Colin to conclude this morning's session.

Well, thank you very much, everybody, for taking the time to join us this morning and for your support on the transaction. We look forward to speaking to some of you personally in fullness of time. I wish you a pleasant rest of your day. Thank you. Bye-bye.