London & Stamford Property Limited (LSP) 2022年年度報告「LSE」.pdf

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1、Real estate for reliable incomeAnnual Report and Accounts 2022An overview,purpose and strategy update 1Creating value 20A detailed analysis of our property activity 28A review of our financial performance 42Our sustainability performance 49EnvironmentalSocialGovernanceA review of our risk 70In this

2、reportFinancial statementsDetailed financial performance 155GovernanceHow we govern the business88Remuneration 132Strategic ReportDividend Growth+6.9%Total Accounting Return+41.9%OwnManageCollaborateGeneratePatrick VaughanChairWe have delivered a very strong set of results and the portfolio provides

3、 a solid foundation for future performance.Andrew JonesChief ExecutiveLondonMetric is a FTSE 250 REIT that owns one of the UKs leading logistics platforms alongside a grocery-led long income portfolio.We own 3.6bn of assets across 17m sq ft with contracted rental income of 143m p.a.The Company has p

4、rogressed earnings and NTA significantly,allowing us to grow the dividend further.Martin McGannFinance DirectorAnnual Report and Accounts 2022LondonMetric Property PlcOwnManageCollaborateGenerateOwn desirable real estate that meets occupiers needs.p02Manage and enhance responsibly to improve ourasse

5、ts and help occupiers thrive.p04Maximise our expertise and relationships to build on our position as partner of choice.p06Generate reliable,repetitive and growing income-led totalreturns.p08Our purpose is to own and manage desirable real estate that meets occupiers demands,delivers reliable,repetiti

6、ve and growing income-led returns and outperforms over the long term.Strategic reportGovernanceFinancial statements1LondonMetric Property PlcAnnual Report and Accounts 20221-8788-154 155-208Our purpose*Includes developments,based on value1 Analysing and understanding the macro trends affecting real

7、estate Implementing a range of investment strategies to ensure we own the right assets in the right locations that can deliver reliable,repetitive and growing income returns Employing the right people to identify and execute the right actions to create a superior portfolio What this means to our bus

8、inessAn overview,purpose and strategy updateThe portfolios 74.6%*weighting towards logistics and 22.5%*weighting to long income is ensuring that our assets are benefiting from todays macro environment.We are continually upscaling the quality of the portfolio to ensure future outperformance,with a st

9、rong focus on owning well located urban logistics.Valentine Beresford Investment DirectorPositioning the portfolio to benefit from the medium and long term drivers of return and meeting the needs of our occupiers.Own desirable real estateHighlights43.9%*Urban logistics exposure as aproportion of our

10、 assets575mAcquisitions in yearLondonMetric Property PlcAnnual Report and Accounts 202222 A highly disciplined acquisitions and disposals programme over many years to create a resilient portfolio that is fit for purpose Maintained consistently high occupancy and long average lease lengths through ou

11、r investment,asset management and development actions Delivered strong total property return outperformance against our benchmark What were proud of3 Ensuring the portfolio is positioned for the future to benefit from macro trends Making the correct property decisions and acting on our experience an

12、d knowledge minimises future risk and ensures we own assets with enduring occupier appealWhy it matters to usTotal property return in the year+28%Strategic reportGovernanceFinancial statements3LondonMetric Property PlcAnnual Report and Accounts 20221-8788-154 155-208 Adopting the right approach and

13、doing the right thing for our stakeholders and the environment Understanding and responding to the needs of our occupiers to help them thrive Protecting and improving our cash flow with long term planning and decision makingWhat this means to our businessSecuring and enhancing our strong income metr

14、ics as well as improving the quality and sustainability of our assets.Manage and enhance responsiblyOccupier initiatives undertaken in the year helping to deliver 5.4%like for like income growth166Highlights in the year+10.5mAdditional income per annum from lettings and rent reviews 16 yearsAverage

15、lease lengths onlettings signed+1.2m sq ftBREEAM Very Good/Excellent certified assets acquired or developed LondonMetric Property PlcAnnual Report and Accounts 202241An overview,purpose and strategy update Consistently delivering like for like income growth through our asset management approach Incr

16、easing the proportion of our portfolio with an EPC rating of A-C to 85%Developing high quality assets which has helped to increase the proportion of our portfolio certified BREEAM Very Good or Excellent to 29%What were proud of Ensuring that the portfolio is fit for purpose and improve the resilienc

17、e ofour assets Maximising the opportunities to improve the cash flow and quality of our assets whilst being strong stewards ofunderinvested assets Minimising the environmental impact of our activities and enhancing the sustainability of our assets Why it matters to usWe continue to adopt the right a

18、pproach in managing and enhancing our assets to ensure they are fit for purpose and deliver sustainable and growing income streams.Mark Stirling Asset Director Strategic reportGovernanceFinancial statements5LondonMetric Property PlcAnnual Report and Accounts 20221-8788-154 155-20823We are proud of o

19、ur employees who we recognise are vital to the continued success of the Company.Andrew LivingstonDesignated workforce Non Executive DirectorHighlights in the year 100%of employees agreed that they enjoy working at LondonMetric98.7%Occupancy rate8.5/10Average score in occupier survey for whether our

20、occupiers would recommend LondonMetricWe have a highly talented,motivated and aligned team who collaborate with all stakeholders to build strong relationships and trust.Maximise our expertise and relationships Empowering some of the most talented minds in real estate with a combination of strong mar

21、ket insight,deep fundamental analysis and market leading relationships Adopting a partner of choice approach,collaborating with all stakeholdersWhat this means to our businessLondonMetric Property PlcAnnual Report and Accounts 202261An overview,purpose and strategy update Consistently high occupancy

22、 and scores inour occupier survey Consistently high levels of staff satisfaction and scores in our staff survey Strong shareholder,property and financing relationshipsWhat were proud of2Equity raise in the year which was strongly supported by shareholders,allowing us to transact on a number of inves

23、tments175m Leveraging our highly talented,motivated and aligned team to make the right decisions and deliver long term outperformance By working with a wide range of stakeholders,we gather a greater depth of understanding to deliver a culture of excellence Why it matters to usStrategic reportGoverna

24、nceFinancial statements7LondonMetric Property PlcAnnual Report and Accounts 20221-8788-154 155-2083 Delivering reliable,repetitive and growing income-led cash flows from fit for purpose assets Bringing all our actions together to deliver strong,durable cash flows underpinning highly attractive total

25、 returnsWhat this means to our businessA high quality real estate portfolio is the bedrock to delivering reliable,repetitive and growing income.Generate reliable,repetitive and growing incomeHighlights in the year133mNet rental income+41.9%Total accounting return+5.5%Growth in EPRA earnings per shar

26、e+6.9%Growth in dividend per share Growth in open market rent reviews forurban logistics+22.4%LondonMetric Property PlcAnnual Report and Accounts 202281An overview,purpose and strategy update Seven years of dividend progression 203%total accounting return over nine years 296%total shareholder return

27、 over nine yearsWhat were proud of Delivering on our progressive and covered dividend policy Outperforming our benchmarks consistently over the long term and winning with integrity Attracting and retaining some of the most talented people within real estateWhy it matters to usOur income focus has se

28、en our EPRA EPS increase 5.5%in the year,which has allowed us to progress our dividend for the seventh year in a row.Martin McGannFinance DirectorStrategic reportGovernanceFinancial statements9LondonMetric Property PlcAnnual Report and Accounts 20221-8788-154 155-20823LondonMetric Property PlcAnnual

29、 Report and Accounts 202210An overview,purpose and strategy updatePerformance highlightsIFRS reported profit734.5m734.5257.3-5.7119.72022202120202019185%EPRA EPS110.04p10.049.529.268.7720222021202020195.5%Dividend per share9.25p9.258.658.38.220222021202020196.9%IFRS net assets2,559.7m2,559.71,731.31

30、,431.81,216.8202220212020201947.8%EPRA net tangible assets per share1261.1p261.1190.3170.3173.7202220212020201937.2%Total property return28.2%28.213.45.19.020222021202020191480 bpsCost of debt2.6%2.62.52.93.1202220212020201910bpsAverage debt maturity6.5 yrs6.54.24.76.420222021202020192.3 yearsLoan t

31、o value ratio28.8%28.832.335.932.22022202120202019350 bpsWAULT11.9 yrs11.911.411.212.520222021202020190.5 years1 Alternative performance measuresThe Group financial statements are prepared in accordance with IFRS where the Groups interests in joint ventures and any non-controlling interests are show

32、n as asingle line item on the consolidated income statement and balance sheet and all subsidiaries areconsolidated at 100%.Management reviews the performance of the business principally on a proportionately consolidated basis which includes theGroups share of joint ventures and excludes any non-cont

33、rolling interest ona line by line basis.The key financial performance indicators arealso presented on this basis.Alternative performance measuresare financial measures which are not specified under IFRSbut are used by management as they highlight the underlying performance of the Groups property ren

34、tal business and are based on the EPRA Best Practice Recommendations(BPR)reporting framework which is widely recognised and used bypublic realestate companies.Therefore,unless specifically stated,theperformance metrics and financial results reflected in the Strategic Report and on this page,reflect

35、the proportionately consolidated results of the Group and theEPRA BPR reporting framework.Further details and reconciliations between EPRA measures and IFRS equivalents can be found in theFinancial review and in note 8 to the Group financial statements.11LondonMetric Property PlcAnnual Report and Ac

36、counts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-208An overview,purpose and strategy updateChairs statementOnce again,it is time to write to you as shareholders of LondonMetric with my thoughts on the past year and our immediate future.The first and most obvious item on which

37、I must comment is the results achieved by the Company,especially the increase in our EPRA net tangible assets per share of 37.2%.In the 50 years in which I have been actively involved in the property industry,this years total accounting return at 41.9%and our total property return at 28.2%are the hi

38、ghest I have ever been honoured to be associated with.On your behalf,may I warmly thank the team at LondonMetric for their excellent execution of the Companys long term business plan.We did well during the pandemic with outstanding levels of rent collection reflecting the quality of our portfolio an

39、d our sector selections.Our 75%weighting towards distribution has put us in a very strong position and,like everyone with a high weighting to this sector,this has helped to deliver some fantastic returns over the last 12 months.These returns have also been supported by our long income and other non-

40、logistics calls,all of which have also performed well and helped to support a strong and rising dividend.With current nervousness about large distribution warehousing,shareholders will note our preference for and rebalancing of the portfolio in the past three years away from big box,which has shrunk

41、 from 23%to 12%of our assets,in favour of urban logistics which has grown from 27%to 44%.Our focus on income has seen our EPRA earnings per share increase by 5.5%which has again given us confidence to increase our dividend per share for the seventh year in a row,up by 6.9%over the year and 109%cover

42、ed by EPRA earnings.Over the nine years since our merger,we have delivered a total shareholder return of 296%,significantly outperforming the FTSE 350 Real Estate Super Sector average of 92%,as well as increasing our earnings by 157%to 10.0p per share.Our long term track record and performance conti

43、nues to support our standing in the equity markets.Our 175 million equity fundraising in the year attracted excellent and broad based support from shareholders,for which I thank you for your continued support.We were disciplined in our approach to ensure quick deployment into accretive opportunities

44、 and the fundraise has allowed us to make a number of very attractive investments which have enhanced our portfolio and helped it to grow from 2.6 billion to 3.6 billion over the year.Whilst Covid-19 may thankfully be largely behind us and prospects have significantly improved,the world and the real

45、 estate sector continues to face a number of challenges.Economic growth is threatened by the highest inflation seen for decades,which is putting pressure on central banks to tighten monetary policy.The geopolitical tensions of the war in Ukraine,along with the further risk of escalation and its rest

46、raints to trade,have dampened confidence and pushed up energy,commodity and food prices.Supply chain issues have been further impacted by lockdowns in China.Despite these challenges,we maintain that well managed real estate in structurally supported sectors is an asset class which offers an outstand

47、ing ability to provide reliable and growing dividends over the long term.We feel that we are well positioned thanks to our carefully selected portfolio,our ongoing discipline,inflation protection through a combination of inherent rental growth and index linked leases as well as our lower LTV level t

48、oday,with much of our debt costs hedged.We also have a strongly aligned and high class team who have excellent occupier and property relationships.On that note,I would again like to warmly thank the Board and all of our employees for their hard work in this exceptional year.I should also like to con

49、firm that we have also strengthened our Board with the appointment of Alistair Elliott,who I would like to welcome on your behalf.Alistair brings an outstanding depth of property and leadership experience to our team.Looking forward,we believe the portfolio is stronger than ever which will allow us

50、to grow our income and asset value over the longer term.This,combined with the experience of our team,leaves the Company very well placed to deliver on its core policy of a sustainable and progressive dividend.Patrick VaughanChair 26 May 2022+37.2%EPRA net tangible asset per share increase+6.9%Divid

51、end increase per sharePatrick VaughanChair HighlightsLondonMetric Property PlcAnnual Report and Accounts 202212At a glanceAn overview,purpose and strategy updateOur portfolio is located in the UK and has grown from 1.2 billion in 2013 to 3.6 billion today.It has shifted significantly away from multi

52、-let retail parks,offices and residential into distribution and grocery-led long income assets.Property value3.6bnWAULT 11.9 yrsTotal Property Return28.2%Our portfolioOur focus on logistics and long income3412Urban logistics43.9%Long Income22.5%Mega&Regional logistics30.7%Retail Parks&offices2.9%Our

53、 property portfolio has performed exceptionally well in the year.Learn more on page 282022202120202.6bn2.3bn3.6bn20222021202011.4 yrs11.2 yrs11.9 yrs2022202120205.1%13.4%28.2%1342*Includes developmentMark StirlingAsset Director13LondonMetric Property PlcAnnual Report and Accounts 2022Strategic repor

54、tGovernanceFinancial statements1-8788-154 155-208Urban LogisticsMega&Regional LogisticsLong IncomeMega DistributionLarge scale modern distribution units,typically greater than 500,000 sq ft and located close to major arterial routes.Regional DistributionMid size units typically between 100,000 sq ft

55、 and 500,000 sq ft serving as regional hubs and creating the link in any modern supply chain.Grocery and RoadsideConsists of grocery,wholesale and roadside assets.NNN RetailPrimarily discount,essential,electrical and home stores.Trade,DIY&OtherPrincipally building,trade and DIY stores as well as car

56、 servicing centres.LeisureFive out of town cinemas let to Odeon,two hotels,3 F&B sites andone development site.Smaller logistics units strategically located in or close to dense areas of population to meet increasing consumer demands for next and same day delivery.Our exposure to this sector has inc

57、reased substantially and has been our main conviction call.127 assets7.7m sq ftProperty value*1,577mWAULT8.6 yrsTotal property return33.3%16 assets6.1m sq ftProperty value*1,106mWAULT 15.2 yrsTotal property return28.2%132 assets2.8m sq ftProperty value*809mWAULT 14.1 yrsTotal property return 19.0%Re

58、ad more about urban logistics on page 33Read more about mega®ional distribution on page 33Read more about long income on page 38*Including developmentsStrategic priorities1 Align portfolio to real estate benefiting from macro trends that are structurally supported2 Focus on long let property in g

59、ood locations with strong occupier contentment,intrinsic value and rental growth prospectsLong term strategyEmploying a range of investment strategies to ensure we own the right asset in the right locationFocus on geography,asset quality,lease and credit strength and sector diversity ofour occupiers

60、2022/23 prioritiesRetain our over weight exposure to logistics with a preference for urban logisticsRemain highly disciplined to ensure each asset remains fit for purpose delivering attractive total returnsStrategic priorities3 Protect and enhance the asset value and cash flow with long term decisio

61、n making4 Improve the quality and sustainability of our assets by adopting high standards and supporting our stakeholders and local communitiesLong term strategyAdopting an active asset management approach to deliver value accretive initiativesEmbed sustainability and high ESG standards across all o

62、f our activities2022/23 prioritiesRetain high occupancy and long average lease lengthsContinue to improve the average EPC rating across the portfolio whilst recognising our ability to be a strong steward of under invested assetsStrategic priorities5 Adopting a partner of choice mindset,collaborating

63、 with all stakeholders6 Having the right people and using the teams breadth and depth of expertise to make well informed decisions and act in the best interests of our stakeholdersLong term strategyRetain our rational and disciplined approach driving our long term decision makingBeing a desirable pl

64、ace to work,attracting and retaining some of the best talent in the real estate industry2022/23 prioritiesRetain high levels of employee and occupier satisfactionStrategic priorities7 Generate reliable,repetitive and growing income led cash flows from fit forpurpose assets8 Bringing all our actions

65、together to deliver strong,durable cash flows underpinning highly attractive total returnsLong term strategyDeliver attractive total returns,underpinned by a reliable,progressive and covered dividend policy2022/23 prioritiesDeliver and sustain EPRA earnings per share growth facilitating our progress

66、ive and covered dividend ambitionsDeliver top quartile performance and outperform our benchmarksLondonMetric Property PlcAnnual Report and Accounts 202214An overview,purpose and strategy updateOur strategic prioritiesLearn more on page 2Learn more on page 4Own desirable real estate that meets occupi

67、ers needsManage and enhance responsibly to improve our assets and help occupiers thriveMaximise our expertise and relationships to build on our position as partner of choiceGenerate reliable,repetitive and growing income-led totalreturnsLearn more on page 6Learn more on page 8The real estate sector

68、continues to witness disruption and social changeWe are operating in an ever changing macro environment.The conflict in Ukraine is adding to the geopolitical uncertainty which,together with the economic impact from a re-opening of the global economy and the lingering effects of Covid-19 lockdowns,ha

69、s increased the cost of goods and resulted in elevated inflation and a cost of living squeeze.These macro factors are having a profound impact on a real estate market that has already seen a significant acceleration of evolving consumer habits as a result of Covid-19,a number of which were already i

70、n the system:increased online shopping,greater convenience,better experiences and increased flexibility from working from home.This has led to a shift in demand and supply dynamics highlighting material polarisation in performances across various real estate subsectors;the gap between the winners an

71、d losers remains wide.Many landlords have emerged from the pandemic realising that their assets are not fit for purpose.They will blame the pandemic for poor performances,dividend cuts,share price collapses and falling rental income,although the truth is that many failed to embrace a rapidly changin

72、g world and shift their portfolios to support these emerging trends.A quick look back shows that,as we emerged from the Global Financial Crisis,new structural trends in how we work,shop and interact with our friends and family began to surface,largely driven by the introduction of new technological

73、innovations.This is evidenced by the enormous rise in online sales penetration,from 9%a decade ago to 19%pre-pandemic and 26%today.This represents an extraordinary acceleration,and has meant that growth that was forecast to take five years has taken just two.However,it is unlikely to stop there with

74、 some of the strongest retailers seeing significantly higher online sales,including both John Lewis and Next who have reported online sales at around 70%and 65%respectively.Online grocery has also seen a significant rise,from 8%pre-pandemic to 13%today.Again,what was expected to take years hashappen

75、ed in a matter of months.In all likelihood,this upward trend will be maintained as consumers appreciation ofonline convenience,price transparency and quicker delivery times continues to grow.Demand for warehousing remains both broad and deep with online operations competing with businesses who are r

76、eacting to global trade disruptions by onshoring more of their operations and also holding higher inventory levels within the UK.We do believe that peak globalisation may have passed and localisation is emerging.Its no longer acase of just in time,but now just in case.Conversely,physical retail asse

77、ts face significant challenges with reduced demand and over supply as the consumer pivots towards a more omni-channel model,meaning that there are few hiding places for those without an online platform,with too many shops and behind the curve strategies.Department stores and over built shopping cent

78、res look particularly vulnerable with prime shopping centres not being the safe haven that many management teams thought they would be.The effect has been witnessed in rising vacancies,falling rents,increasing obsolescence and almost universal value destruction.Commentary from retailers,as well as e

79、vidence from property investment transactions,continues to highlight that the pricing power has firmly shifted away from traditional retail owners to the retailers,with rents continuing to fall and valuations continuing to drift downwards.However,there are some bright spots within the retail space w

80、ith convenience,grocery and discount retailers outperforming as consumer shopping patterns continue to evolve.In offices,it is hard to ignore that demand is facing structural disruption and continued uncertainty.Working from home during the pandemic has transformed employees views on traditional wor

81、king practices.Despite a strong re-opening and a buzz returning to many city centres,there is increased demand from employees for greater flexibility leading to reduced office presence and occupancy settling well below pre-pandemic levels.This is making future office demand and rental growth harder

82、to predict,and at a time when owners are having to retrofit their offices to meet new sustainability requirements.Whilst the post-pandemic economic recovery is well underway,inflationary pressures arising from current macro events and the reopening of the global economy risk derailing this.We are no

83、w faced with constrained supply chains,surging commodity,energy and food prices which are leading to higher interest rates.Consumers are having to adjust to higher household bills which will likely suppress non-essential expenditure.Experiential shopping increasingly feels like a luxury that few wil

84、l be able to afford.We believe that all these factors will continue to drive the polarisation in performances across various real estate subsectors with legacy retail assets likely to experience further headwinds.After all,the macro trends accelerated by the pandemic will almost certainly outpace mi

85、cro decisions.97%Portfolios logistics andlongincome weighting+28%Total property return15LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-208An overview,purpose and strategy updateChief Executives review Andrew JonesChief ExecutiveHi

86、ghlightsOur focus on the structural trends and disciplined investing are being rewardedLink to strategic priorities:1 2Our very strong set of full year results,which has delivered a total property return of 28.2%,continues to reflect many years of forward planning that has seen us pivot into assets

87、that benefit from the structural shifts in consumer behaviour,in order to deliver superior income growth.Our real estate decisions continue to be influenced by trends that originate outside the property sector but that fundamentally shape its future.We pride ourselves on recognising new trends,ident

88、ifying pricing inefficiencies and acting quickly to create new opportunities or exit old ones.We believe that there is no substitute for being aware,open minded and prepared to act.Our decision four years ago to focus on urban logistics and shift away from big box logistics has allowed us to capture

89、 strong rental growth,drastically reducing binary occupation risks and materially increasing our income granularity.Our portfolio is firmly placed on the right side of structural change having recognised these macro trends early,tactically shifting away from the legacy real estate sectors of general

90、 merchandise retailing and offices into logistics and grocery-led long income assets which now account for 74.6%and 22.5%of our portfolio respectively.We remain highly confident that the portfolio provides a solid foundation for future performance and income progression,delivering on our collect,com

91、pound and compress approach.Our investment strategy is about owning quality assets in the best geographies andthe winning sectorsOur long term view remains that owning strong assets,in the winning sectors and in the best geographies,allows us to avoid owning difficult assets and the valuable thinkin

92、g time that comes with owning cheap assets.When you choose real estate for its quality and location,you are more likely to be a price setter.Occupiers will need you more and you can attract quality companies,be more confident of future rental growth and feel safe in the knowledge that there is high

93、intrinsic value to your land.We continue to believe that the importance of geography is wildly misunderstood by the markets,which fails to appreciate that great locations are more reliable when measuring returns over longer hold periods.This rigorous approach tempers our acquisition activity,ensurin

94、g that we remain disciplined to pursue excellent returns and not just grow assets under management.Our investment activity is based on proper process,discipline and rationality.We remain obsessed with winning the losers game;selling the laggards and running the winners.In the year,we continued to al

95、ign to our chosen sectors with 575 million of investments,75%of which were logistics assets.These acquisitions were in strong geographies,with 57%located in London and the South East,a WAULT of 15 years and attractive income growth prospects.Sales in the year of 208 million were higher than last yea

96、r.Whilst we try not to trade unnecessarily,high investor demand for our assets persuaded us to monetise some of our investments.All of our sales have been characterised by a long period of attractive returns,and an assessment that the best returns have already been captured and thatfuture returns ma

97、y flatten.The investment market for our assets remains extremely healthy and we continue to receive many approaches.We will sometimes react to these approaches and our decision post year end to sell our DHL asset in Reading was largely down to the fact that the sale price was far in excess of our pe

98、rceived view of valuation.It is a good asset,but we achieved an excellent price and,whilst it will have a mildly dilutive impact on earnings,we will always prioritise the correct real estate decisions.We will now work harder to find more attractive opportunities to recycle the capital into.Logistics

99、 continues to experience strong tailwinds from attractive demand/supply dynamicsUK logistics was once again the strongest performing property sector in the year,with favourable structural trends resulting in superior rental growth and further yield compression.As a result,investors continue to targe

100、t the sector with investment volumes totalling an impressive 16 billion,assisted by both further rotation of capital out of legacy real estate and rising demand from overseas investors.In my previous statements,I referenced that the UK would eventually run out of logistics warehousing.Recent supply

101、and demand dynamics have certainly tested this prediction,with record take up and falling vacancy rates to just 1.6%.The first quarter of 2022 alone saw 10.4 million sq ft taken up and,whilst speculative supply has increased in response,pent up and new demand continues to absorb new product.Whilst A

102、mazon recently announced that it was no longer chasing physical capacity,ithas enjoyed phenomenal growth over the last 25 years,building its fulfilment network and then doubling that platform over the last two years.It has set a very high bar for customer expectations that their competitors are stil

103、l trying to match.Our exposure to urban logistics has increased further and is delivering strong returnsAt 44%of our portfolio,urban logistics is our largest sub sector exposure,valued at 1.6 billion and up from 1.0 billion a year ago.It remains our strongest conviction call and despite fierce inves

104、tment competition,we were able to acquire 243 million of high quality and fairly priced urban assets in the year,leveraging our occupier insights and sector contacts.Some of these acquisitions have given us exposure to occupiers in new,high growth sectors including dark kitchens,data centres and lif

105、e sciences.Urban warehouse demand has been rising for a number of years,accelerated by rapid growth in online shopping,growing customer expectations and the arrival of new industries such as Q-commerce and dark kitchens.Companies have been forced to evolve operationally by locating closer to their e

106、nd customer,in order to minimise delivery times.575mWAULT on acquisitions 14.9 yrsUrban logistics exposure*43.9%LondonMetric Property PlcAnnual Report and Accounts 202216An overview,purpose and strategy updateChief Executives review AcquisitionsOwn desirable real estate*Including developments,based

107、on valueOur real estate strategy is underpinned by income to deliver highly attractive returns Link to strategic priorities:7 8We continue to believe that income and income growth are the defining characteristics of todays investing environment and that real estate strategies focused on income-led t

108、otal returns will deliver future outperformance.Collecting and growing income is fundamental to successful long term investing and we appreciate the true benefit of compounding over longer terms with an absolute focus on the quantity,quality and timing of when cash will be returned.After all,investi

109、ng is about laying out money today,with the expectation that more will be returned to you over time.Even with rising interest rates,real estate can offer excellent inflation protection and total returns significantly higher than many alternatives.We believe that certain subsectors of real estate,par

110、ticularly convenience long income and urban logistics,can continue to perform well in the current economic environment.We believe this demand is set to continue for a number of years due to an acute lack of supply,particularly in London,where alternative uses continue to diminish the supply of avail

111、able industrial space.This is driving rents up as occupiers compete for suitable space.Over the year,our open market rent reviews on our urban logistics assets were 22%above previous passing rent and ERV growth over the year was 13%,with the most pronounced growth in London and the South East at 15%

112、,where over half of our urban logistics portfolio is located.We believe that there is further rental growth in the system,particularly as the supply side of the equation continues to fall.We remain confident that our investment in urban logistics across our chosen geographies gives us a greater degr

113、ee of certainty of achieving income growth and benefiting from rising intrinsic values,where returns can be levered by time and compounding.Long income assets continue to grow in appeal and our opportunistic approach continues to deliver strong returns It is our long held belief that long income ass

114、ets with low operational requirements have for a number of years been mispriced by the real estate market and offer attractive propositions.These are well located assets,let on long leases to strong operators such as convenience grocers,discounters,home retailers and DIY stores.Most of these operato

115、rs have resilient business models that stayed open,performed strongly during the various lockdowns and consistently paid their rents.The consumer is more than ever driven by convenience and value,and their non-discretionary qualities and low susceptibility to online migration ensure that these asset

116、s remain desirable.As the cost of living crisis pushes shoppers to seek cheaper grocery options,Aldi and Lidl have continued to gain market share,with Aldi adding one million new customers in the last year.We also expect roadside and auto to perform well as the trend towards staycations remain and t

117、he lack of new car supply places a greater emphasis on car maintenance.Unsurprisingly,their strong metrics are now being appreciated by real estate investors with yields for the very strongest and longest let assets seeing material yield compression.Our investment activity over the last few years ha

118、s ensured that grocery and roadside assets(drive-thru and auto)now account for almost half of our long income portfolio;we refer to them as the retail winners.Our long income acquisitions in the year totalled 143 million,let on average for 11 years to strong credits such as Aldi,B&M,Dunelm,McDonalds

119、,The Range and Screwfix,with half located in London and the South East.These acquisitions were partly offset by 59 million of long income disposals where values had reached a level that exceeded our own expectations.Post year end,we have sold a further 34.2 million(25.2 million at share)which includ

120、es the sale of our Lidl in Ashford at a very low 3.0%NIY.Our long income portfolio is 100%let off low and sustainable rents,offering a topped up NIY of 4.7%,a WAULT of 14 years and 68%of income subject to contractual rental uplifts.This offers a strong income bedrock benefiting from both capital and

121、 inflation protection characteristics.Strategic priorities1 Align portfolio to macro trends 2 Focus on long-let property with rental growth3 Enhance asset value and cash flow4 Improve quality and sustainability of our assets5 Partner of choice mindset6 Use the teams expertise to make informed decisi

122、ons7 Generate reliable,repetitive and growing income8 Deliver strong cash flows and attractive total returns17LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-208Own desirable real estate continuedGenerate incomeWe continue to stren

123、gthen our income andthe quality of our assetsLink to strategic priorities:3 4The portfolio continues to achieve its objective of delivering reliable,repetitive and growing income as part of a total return strategy.Its metrics remain very strong with occupancy at 98.7%,WAULT rising to 11.9 years and

124、a gross to net income ratio of 98.8%that reflects our very low income leakage.61%of our income benefits from contractual rental uplifts providing certainty ofincome growth.During the year,166 occupier initiatives added 10.5 million per annum of rent and delivered like for like income growth of 5.4%.

125、Lettings across 1.3 million sq ft were signed on average lease lengths of 16 years.Rent reviews were agreed on 4.4 millionsqft,delivering a 13%uplift on a five yearly equivalent basis,with urban logistics open market reviews at 22%.We completed two BREEAM Excellent developments in Bedford and Tysele

126、y.At Bedford Link,we delivered 355,000 sq ft of space that was quickly let for 25 years to Movianto,a dedicated healthcare logistics company.At Tyseley,120,000 sq ft was completed and let to Amazon for 15years.Our development activity currently underway is 86%pre-let and represents 8.7 million of ex

127、pected income per annum.These activities are increasing the quality of our portfolio and providing new and attractive future income streams.We continue to embed sustainability and high ESG standards across our activities,driven by our own aspirations as well as those of our customers,occupiers and s

128、hareholders.EPC ratings improved significantly over the year,with 85%now rated A-C compared to 74%last year and 89%of our current developments will be certified BREEAM Very Good,which is expected to increase the percentage of the portfolio that is certified BREEAM Very Good or Excellent to 29%.In ad

129、dition,a further 0.9 MWp of solar PV was installed in the year.We maintained our GRESB green star with a score of 65%,which is in line with the previous year and we continue to make good progress in implementing our Net Zero Carbon strategy.Expertise and relationshipsWe continue to benefit from our

130、strongteamand their relationshipsLink to strategic priorities:5 6Our teams strong economic alignment to our success ensures an ownership culture and a strong conviction to make the right property and financial decisions.We work with all of our stakeholders to deliver longer term benefits to our inve

131、stors,occupiers,people,local communities and contractors.We maintain a highly rational and disciplined property approach,selling assets that dont meet our strict investment criteria and waiting patiently for attractive new opportunities.In the year,175 million of equity was raised through a signific

132、antly oversubscribed placing which enabled us to tap attractive property investments.Whilst size should always be the result of a successful strategy and not just an ambition in itself,our increased scale will deliver further efficiencies as our operationally light model allows us to sustain a large

133、r portfolio without requiring additional resource.Reflecting this,our EPRA cost ratio fell by 110bps over the year to 12.5%.The 780 million refinancing of debt facilities extended the maturity of our debt at attractive margins,further diversified our lending base and added a green financing framewor

134、k to our borrowings.A further new 150 million credit facility strengthened our financing position and we have no material refinancing until the end of 2023.Our recent employee survey again demonstrated our high levels of staff satisfaction,with all employees agreeing thatthey enjoy working at London

135、Metric.We continue to put our occupiers at the forefront of our decision making,and this is reflected in the strength of feedback from our recent occupier survey,where we achieved an average score of 8.5 out of 10.0 for whether occupiers would recommend LondonMetric as a landlord.OutlookAs we contin

136、ue to live in a period of increased uncertainty across the world,we believe that real estate can continue to deliver reliable,repetitive and growing income streams.We have a high conviction that this thesis is more dependable within structurally supported sectors that are located in the strongest ge

137、ographies.This is why we continue to pivot our portfolio to take advantage of the strongest demand/supply dynamics to deliver the most attractive income and rental growth.Looking ahead,we retain our firm view that the logistics market will continue to offer attractive returns and we remain wide eyed

138、 for future opportunities that allow us to increase and improve our urban warehouse portfolio further.In the biggest cities,we are seeing very limited new land supply coming on stream to meet the rapidly changing behaviour and growing expectations of the UK consumer.We have strengthened and enlarged

139、 our portfolio,selling our weaker assets and replacing them with better assets that are more fit for purpose through our acquisitions and developments.Over the next 12 months we expect market volatility to offer up even more opportunities which will allow us,once again,to improve our financial and p

140、ortfolio metrics as we continue to collect,grow and compound our rental income to deliver a progressive dividend.We believe that this is best achieved by investing in the winning sectors and owning the best buildings.After all,when you invest in quality,time will help you to create wealth.LondonMetr

141、ic Property PlcAnnual Report and Accounts 202218An overview,purpose and strategy updateManage and enhanceChief Executives review Upgrading assets through investment and development activityExtending economic life of buildings through environmental improvements as well as helping to meet occupier E r

142、equirementsOverviewOur strategy supports a low carbon approachThe portfolio is operationally light with a low carbon intensityWe are a strong steward ofunderinvested assets 120,000 sq ft urban warehouse development in Tyseley completed in the year which is let to Amazon and BREEAM Excellent certifie

143、d with solar PV and EV charging.Cost effective improvements such as LED lighting,new HVAC systems,removing gas,better insulation and glazing are helping to significantly improve EPC ratings.Working with our occupiers to add solar across our portfolio is helping to address their ambitions to be Net Z

144、ero Carbon and mitigate energy costs.refurbishment in Bicester which improved the EPC rating to A.The addition of solar PV would enable the building to be Net Zero Carbon.300 kWpsolar PV scheme in Milton Keynes,funded by LondonMetric.30,000 sq ft Our investments are focused on high quality buildings

145、 or assets where we can use our expertise to materially upgrade the building.Our developments are typically BREEAM Very Good or Excellent and we work with contractors to ensure sustainability is properly considered as part of the project.19LondonMetric Property PlcAnnual Report and Accounts 2022Stra

146、tegic reportGovernanceFinancial statements1-8788-154 155-208Our environmental focus Manage and enhanceManage and enhanceAn overview,purpose and strategy updateRead more on page 57LondonMetric Property PlcAnnual Report and Accounts 202220Our marketsCreating valueReal estate remains an attractive inve

147、stment class that can generate reliable,repetitive and growing income.However,with asignificant polarisation in performances and rapidly evolving mega trends,owning the right real estate in strong locations has never been more important.Income from real estate is attractive Technology continues to d

148、isruptSustainability increasingly impacting decisionsDemand for urban real estate increasingThe demand for real assets such as property which could deliver attractive income and income growth with a hedge against inflation remains attractive.In todays environment,despite global uncertainties,these a

149、ssets remain highly desirable,particularly as the number of retirees who require reliable and repetitive income continues to grow rapidly.We believe that real estate strategies focused on income-led total returns and supported by the macro trends are well placed to succeed.The continued migration to

150、 online shopping and services requires real estate infrastructure to meet consumer demands.Competing land use creates supply pressures with scarce urban logistics real estate often commanding premium rental levels.As online adoption continues to grow and become further embedded in every day life,exp

151、ectations grow for faster and more accurate delivery times which is fuelling further demand for the right urban logistics assets.We are all more mindful of our impact on the planet with the UK government and corporates leading the way on Net Zero Carbon ambitions.Ensuring real estate is fit for purp

152、ose with enduring occupier appeal increasingly requires buildings to be more energy efficient and better adapted to climate change.Recent energy price inflation is serving to accelerate the ambitions of occupiers and landlords further to drive forward the sustainability agenda.Technology continues t

153、o power change across society in the way we work,live and shop.As we have emerged from the pandemic,it is clear that technology has been a true enabler to allow many to work from home and it has created a trend that is unlikely reverse.The scaling up of technology to service the UK economy from onli

154、ne platforms was truly amazing something that simply wouldnt have been possible only ten years ago.As a result,penetration and adoption of online shopping has never been higher and will continue to influence decisions and real estate portfolios into the future.Structural trends in real estate21Londo

155、nMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-208LogisticsElevated investment volumesInvestment volumes for UK logistics in 2021 were very strong at 16 billion.Driven by continued strong sector dynamics,logistics benefitted from furth

156、er rotation of capital out of legacy real estate as well as an influx of overseas money.As a result,yields have compressed significantly over the year with prime logistics yields at c.3.5%.Strong occupational demandOccupational take up in 2021 of 42 million sq ft significantly exceeded the long term

157、 average.Occupiers are continuing to focus on new stock,reflecting their need forquality accommodation.Q1 2022 alone saw 10 million sq ft taken up,which has led to vacancy rates falling to just 1.6%.Whilst speculative supply has increased in response,pent up and new demand continues to absorb newly

158、built product.Urban logistics seeing strongest growthLogistics continues to generate attractive rental growth but urban logistics is seeing the strongest growth due to a perfect condition of rising demand and falling supply,accentuated by strong competition from more valuable alternative landuses.Th

159、is is particularly the case around majorconurbations,with the SouthEast continuing to experience the highest rental growth.Outlook remains highly supportiveThe supportive trend for logistics is likely to be maintained as consumers appreciation of online convenience,price transparency and quicker del

160、ivery times continues to grow.Demand for warehousing remains both broad and deep,with businesses continually having to improve online operations as well as react to global trade disruptions which are forcing higher inventory levels to be held within the UK.Long IncomeLong income real estate in deman

161、dStructurally supported long income assets with low operational requirements and let to high quality occupiers at yields significantly higher than Government bonds remain an attractive proposition in todays investment environment.Grocery real estate,in particular,has seen significant investor demand

162、 with long-let grocery yields in good locations transacting at yields as lows as 3.0%.Similarly,discount/essential stores long-let to strong credits have seen an ever growing pool of investors appreciating their many qualities.Consumers driven by convenience and valueThe consumer is more than ever d

163、riven by convenience and value,and their non-discretionary qualities and low susceptibility to online migration ensure that our long income real estate remain desirable.As the cost of living crisis pushes shoppers to seek cheaper grocery options,Aldi and Lidl have continued to gain market share.We e

164、xpect grocery and discount retail to continue to perform well,with other sub sectors such as roadside and auto also delivering strong returns.42m sq ftLogistics take up in 2021,materially higher than the long term average3.0%Recent transactional yields on long-let,well located grocery 1.6%Vacancy ra

165、te for logistics at the end of Q1 2022LondonMetric Property PlcAnnual Report and Accounts 202222Creating valueBusiness modelOur key stakeholders are critical to our successOur peopleOur success is dependent on employing atalented,motivated and diverse team withstrong property and finance expertise.O

166、ur occupiersWe engage with occupiers across allofouractivities to provide real estate solutions that deliver mutually beneficial outcomes adopting a partner of choice mindset.Our local communitiesWe recognise the importance of supporting and properly engaging with local communities.We work closelywi

167、th local authorities,residents and businesses toensure that our activities consider and bring benefits tolocal communities.Our contractors and suppliersDelivering developments and asset management initiatives on time,on budget and in adherence with our standards is a high priority.We select high qua

168、lity and robust contractors who have a proven track record and we work in collaboration with them.Our investors We value our good relationships with investorsand debt providers toensure we have wide access tocapital markets.We also work closely with our joint venture partners to fulfil their busines

169、s objectives.Learn more on page 24Owning the right asset in the right sector is increasingly criticalto deliver future outperformance.Wehave aligned our portfolio towards the logistics and long income sectors andcontinue to upscale the quality ofourportfolio.We aim to deliver real estate solutions t

170、hat will help occupiers businesses thrive.Our focus on ESG and Responsible Business is helping to grow and improve the quality of our income and the sustainability of our assets.Underpinned by our strategic priorities on page 14OwnManageTotal property return28.2%Additional income per annum from occu

171、pier transactions 10.5mOur purpose drives our income growth and value creationGenerating value and long-term returnsLondonMetric Property PlcAnnual Report and Accounts 2022GovernanceFinancial statements88-154 155-2081-87Strategic report 155-20823Financial statementsGovernance88-154Additional income

172、per annum from occupier transactions Our purpose drives our income growth and value creationUsing our expertise to work closely withoccupiers and wider stakeholders to understand their needs results inhigh satisfaction andoccupancylevels.Income is central to our business model.The income from our as

173、sets is passed toourshareholders in the form of a well covered and progressive dividend.See our principal risks on page 70CollaborateGenerateOccupancy98.7%Net rental income133.1mTotal accounting return+41.9%Dividend growth+6.9%BREEAM Very Good/Excellent buildings added in year+1.2m sq ftGenerating v

174、alue and long-term returnsLondonMetric Property PlcAnnual Report and Accounts 202224Creating valueEngaging with stakeholdersOur occupiers Our occupiers are at the heart of our purpose,and we are highly focused on understanding what they need and how to meet their requirements in order to successfull

175、y grow our partnership with them.How we engageRegular liaison and meetings with all of our occupiersAnnual occupier surveysOutcomes98.7%Occupancy rate across portfolio8.3/10.0Average property satisfaction score in occupier survey8.5/10.0Average landlord recommendation in occupier survey We work clos

176、ely with occupiers to provide fit for purpose real estate that creates high occupational satisfaction.How we engageEmployee surveysRegular updates from CEODesignated work NED group meetingsInclusive cultureAnnual one to one appraisalsOutcomes6%average staff turnoverHigh staff participation in LTIPs1

177、00%of our people feel that they are proud to work for LondonMetricWe hold staff group meetings annually to ensure high employee satisfaction.Our peopleOur small and dedicated team of 35 employees is critical to our success and delivering our strategy.We strive to employ the best and motivate our peo

178、ple,providing opportunities to develop their careers.Building and nurturing relationships with our stakeholders is integral to our business model and the way we work.We focus on understanding the views of our stakeholders and take account of what is important to them.Read more in Responsible Busines

179、s and ESG review page 60 and Governance page 100Read more in Responsible Business and ESG review page 59Andrew LivingstonDesignated workforce Non Executive DirectorMark StirlingAsset Director25LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-878

180、8-154 155-208Our InvestorsOur investors are critical to the Company and its ability to access capital,efficiently and quickly.How we engageRegular calls and briefingsAnnual General MeetingsAnnual and half year presentations and roadshowsInvestor surveys and visitsOpen dialogue with CEO,Finance Direc

181、tor and Head of IR and SustainabilityInvestors value both meetings as well as site visits and we ensure we are fully engaged throughout the year.Our communitiesConsidering and supporting communities local to where we work,along with focused charitable giving is important to us.We look to consider th

182、e needs of all communities close to our assets as well as involve all employees in our charitable activities.How we engageOngoing local community liaisonPublic consultations prior to and during developmentsEngagement with and support of schools,charities&organisations local to our assetsDonations by

183、 the company and support for charitable staff activitiesOutcomes66,766 spent on charitable and community giving in year32 charitable causes supportedLandAid Foundation PartnerEmployee participation in charity events and fundraisingOutcomesc.250equity investors met in year175mequity raised in year 93

184、0mnew debt facilities completed in the yearWe need contractors we can trust and work as an extension of our small team.How we engageDay to day contact with our development/contractor teamsAnnual contractor review and auditsHealth and safety policy and annual auditsRegular presentations form external

185、 advisors to the BoardOutcomes100%compliance with our RDR checklistHealth and safety policy updatesEffective long-term partnershipsRead more on in Responsible Business and ESG review page63Our contractors and suppliers We rely on the support of a diverse group of key suppliers including contractors,

186、professional advisors and agents.Martin McGannHead of charity and communities working groupNick HeathHead of DevelopmentCreating valueKey performance indicatorsWe continue to track seven key performance indicators(KPIs)to monitor theperformance of the business,which includes our share of joint ventu

187、res.TheKPIsare also used to determine how Executive Directors and senior managementareevaluated andremunerated.ObjectiveDeliver long term shareholder returnsMaximise long term total accounting returnMaximise property portfolio returnsDeliver sustainable growth in EPRAearningsDrive like for like inco

188、megrowthMaintain a higher than market benchmark WAULTMaintain strong occupier contentmentKPITotal shareholder return(%)33.728.7-7.6202220212020Total accounting return(%)41.916.72.9202220212020Total property return(%)28.213.45.1202220212020PerformanceTotal Shareholder Return(TSR),being the share pric

189、e movement together with the dividend,in the nine years post merger was 296%,over three times that of the FTSE 350 Real EstateSuper Sector index movement of 92%.12 month TSR delivered 33.7%compared to the FTSE350 RealEstate Super Sector returnof 20.8%.Total Accounting Return(TAR)of EPRA net tangible

190、 assets per share movement together with dividend paid inthe year.12 month TAR delivered areturnof 41.9%.The full calculation can befound in Supplementary noteviii on page 196.Unlevered Total Property Return(TPR),including capital and income return,of the portfolio as calculated by IPD.12 months TPR

191、 delivered areturn of 28.2%compared tothe IPD All Property benchmark of19.6%.RemunerationUnder the Remuneration Policy 37.5%of LTIP awards are subject to TSR growth compared with the FTSE 350 Real Estate Super Sector excluding agencies and operators.The TSR component of the 2018 LTIP award vested in

192、 full in the year and the TSR component of the 2019 LTIP award is expected to vest in full.The three year TSR for the 2019 LTIPs was 59.5%compared to the FTSE 350 Real Estate Super Sector excluding agencies andoperators of19.8%.Under the Remuneration Policy 37.5%of LTIP awards are subject to TAR gro

193、wth compared with the FTSE 350 Real Estate Super Sector excluding agencies and operators.The TAR component of the 2018 LTIP award vested in full in the year and the TAR component of the 2019 LTIP award is expected to vest in full.The three year TAR for the 2019 LTIP was 65.1%compared to the FTSE 350

194、 Real Estate Sector excluding agencies andoperators of-0.2%.35%of the annual bonus awardis subject to TPR outperforming the IPD benchmark.This year TPR outperformed the IPD benchmark delivering a 72%bonus payout.2022/23 ambitionThree year TSR performance to be in the upper quartile of the FTSE350 Re

195、al Estate SuperSector,excluding agencies and operators.Three year total accounting return to be in the upper quartile of FTSE 350 Real Estate Super Sector,excluding agencies and operators.One year TPR outperformance against IPD benchmark.Deliver and sustain EPRA earnings per share growth anddividend

196、 progression.Deliver like for like incomegrowth ahead of inflation plus 1.5%.Maintain high weighted average unexpired lease termtargeting 10 years.Maintain high occupancy across the investment portfolio,targeting in excess of 95%.1 Align portfolio to macrotrends 2 Focus on long-let property with ren

197、talgrowth 3 Enhance assetvalue and cash flow 4 Improve quality and sustainability of our assets 5 Partner of choice mindset 6 Use the teams expertiseto make informed decisions 7 Generate reliable,repetitive and growing income 8 Deliver strong cash flows and attractive total returnsLondonMetric Prope

198、rty PlcAnnual Report and Accounts 202226Deliver sustainable growth in EPRAearningsDrive like for like incomegrowthMaintain a higher than market benchmark WAULTMaintain strong occupier contentmentKPITotal shareholder return(%)33.728.7-7.6202220212020Total accounting return(%)41.916.72.9202220212020To

199、tal property return(%)28.213.45.1202220212020EPRA earnings per share(p)10.049.529.26202220212020Like for like income growth(%)5.43.13.8202220212020WAULT(years)11.911.411.2202220212020EPRA vacancy(%)1.31.31.4202220212020EPRA earnings per share from operational activities have grown by 5.5%over the la

200、st 12months.In the nine years post merger,EPRA earnings per share has grown by 157%from 3.9p to 10.04ppershare.The movement in the contracted rental income onproperties owned through the period increased by5.4%.Additional income of 10.5 million was generated from asset management activity following

201、lettings,regears andrent reviews.Weighted average unexpired lease term across the investment portfolio(excluding residential and development)of 11.9 years asat31March2022.Occupancy rate of investment portfolio at31March 2022 was98.7%,maintaining ourvacancy at 1.3%.35%of the annual bonus award is sub

202、ject to an EPRA EPSgrowth target.This year EPRA EPS outperformed itsgrowth target securing afull bonus payout.25%of LTIP awards vest after three years subject to anEPRA EPS growth target.100%of the EPRA EPS component of the 2018LTIP award vested inthe year and 83%oftheEPRA EPS component of the 2019

203、LTIP award is expected to vest.Forms part of EPRA earnings per share,which as noted above,isakey financial performance measure for the Companys variable incentive arrangements.Linked to individual personal objectives,representing 30%of the annual bonus performance conditions.Linked to individual per

204、sonal objectives,representing 30%of the annual bonus performance conditions.Deliver and sustain EPRA earnings per share growth anddividend progression.Deliver like for like incomegrowth ahead of inflation plus 1.5%.Maintain high weighted average unexpired lease termtargeting 10 years.Maintain high o

205、ccupancy across the investment portfolio,targeting in excess of 95%.Financial performance indicatorsWe monitor other financial performanceindicators in respect of LTV,debt maturity and cost ofborrowing.Risk managementThe achievement of our seven KPIsisinfluenced by the identification andmanagement o

206、f risks which might otherwise prevent the attainment ofourstrategic priorities.The relationship between our principal risks,strategic priorities and KPIs is reviewed in the Risk management section.RemunerationThe table on page 139 shows how ourKPIs are reflected in and therefore aligned to remunerat

207、ion and incentivearrangements.ESG and SustainabilityOur Responsible Business and ESG review on page 49 sets out our performance over the year including information on our Net Zero Carbon ambitions,green financing,EPC ratings,BREEAM rating on our portfolio and developments and carbon reductionperform

208、ance.27LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-208Read more in Financial review page 42Read more in Risk management page 70Read more in Remuneration Committee report page 132Read more in Responsible Business and ESG review

209、page 49A detailed analysis of our property activityOverviewWe invest in real estate that can deliver repetitive,reliable and growing incomereturns.Our actions aim tocontinuouslyimprove the portfolios quality,sustainability and income longevity.Acquisitions&Disposals783mWAULT (acquisitions)15 yearsIn

210、vestment activityOccupancy(portfolio)99%WAULT (lettings)16 yearsPortfolio activityHighlightsHighlightsWe continue to focus on strengthening our portfolio metrics and are signing long leases and delivering highly attractive rental growth.Our portfolio delivered a record total return in the year.Mark

211、StirlingAsset DirectorOur acquisition activity has continued to focus on urban logistics where we believe demand/supply dynamics continue to offer strong long term growth prospects.Valentine BeresfordInvestment DirectorLondonMetric Property PlcAnnual Report and Accounts 202228Delivering strong total

212、 property returns,driven by distribution The portfolio delivered a strong total property return of 28.2%over the year,significantly outperforming the IPD All Property index of 19.6%:Distribution delivered 31.1%with urban and regional seeing the strongest performances;and Long income delivered 19.0%.

213、Capital growth of 22.9%was driven by management actions,yield compression and rental growth:Distribution delivered a 26.5%capital return;and Long income delivered a 13.7%capital return.The investment portfolios EPRA topped up net initial yield is 3.7%and the equivalent yield is 4.4%with a like for l

214、ike valuation yield compression of 61bps over the year.ERV growth over the year was 10%,driven by distribution assets which increased by 14%.Our asset management activity added 10.5 million of rental income and further improved the quality of our incomeDuring the year,we undertook 166 occupier initi

215、atives adding 10.5 million per annum of rent and delivering like for like income growth of 5.4%.These consisted of:Leasing activity,where we signed 77 new leases and regears,mostly on logistics assets,delivering 8.5 million of increased rent with a WAULT of 16 years;Contractual rental uplifts,where

216、56 fixed and index linked reviews were settled delivering 1.3 million of increased rent at an average of 13%above passing on a five yearly equivalent basis;and Open market rent reviews,where 33 reviews were settled delivering 0.7 million of increased rent at an average of 19%above passing.Open marke

217、t reviews on urban logistics were particularly strong at 22%above passing.Total property returnLease expiry profileRent review profile10-3 years10.6%24-10 years36.7%311-15 years23.6%416-20 years16.2%5 20 years12.9%28.2%Our portfolio metrics continue toreflect our focus on income quality and growthTh

218、e portfolios WAULT increased from 11.4years to 11.9 years,continuing to provide good income security with only 10.6%of income expiring within three years.Occupancy remains high at 98.7%and our gross to net income ratio of 98.8%continues to reflect the portfolios very lowoperational requirements.Cont

219、ractual rental uplifts apply to 60.9%of our income,which provides high certainty ofincome growth:46.6%index linked:30.2%RPI,12.3%CPI or CPIH and 4.1%CPI+1 or CPIH+1;and 14.3%subject to fixed uplifts,with average uplifts of 2.1%per annum.Our index linked rent reviews have a range of collars and caps

220、which are typically between 1%to 4%over a five year period.At 16%inflation over a five year period(equivalent to 3%p.a.),99%of inflation is captured under our RPI linked rent reviews(100%for CPI reviews).At 22%inflation over a five year period(equivalent to 4%p.a.),92%of inflation is captured under

221、our RPI linked rent reviews(86%for CPI reviews).These reviews are mostly five yearly rather than annually compounded meaning that higher inflation in a particular year is often offset with a lower rate of inflation in another to result in the blended average rate over the five year period being with

222、in the cap and collar provisions.12345Income expiring within 3 yrs10.6%13421Fixed Uplift14.3%2RPI Linked30.2%3CPI Linked16.4%4Market Review39.1%Contractual rental uplifts60.9%28.2%13.4%5.1%9.0%202220212020201929LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinanci

223、al statements1-8788-154 155-2081342134256123456A detailed analysis of our property activityOverviewInvestment activity continues to improve the portfolios quality and resilienceDuring the year,we were a significant net acquirer of assets.Acquisitions in the year totalled 575 million,with urban logis

224、tics warehousing accounting for nearly half of purchases.They had a WAULT of 14.9 years and were acquired at a NIY of 4.4%and a reversionary yield of 5.0%.Reflecting our focus on income growth and strong geographies,64.2%of the income was subject to contractual rental uplifts and 57.1%was located in

225、 London and the South East.93.8%of acquisitions had an EPC rating of A-C.Disposals in the year totalled 208 million and were transacted at a NIY of 5.2%and with a WAULT of 9.6 years.They were mostly located in the Midlands,North East and Yorkshire.The largest disposal was a mega distribution warehou

226、se let to Primark for 102 million whilst 59 million of sales from our long income portfolio accounted for the majority of the remaining disposals.We also sold 38 million of non-core assets which consisted of:A retail park in Leeds sold for 25 million with a WAULT to first break of six years;Two offi

227、ces in Birmingham and Solihull sold for 12 million with a WAULT of six years;and Four residential flats sold for 1 million at share,which completed the sale of our remaining residential flats.Post year end,we have acquired a further 43 million of assets,with a WAULT of 13 years,and sold 86 million w

228、ith a WAULT of 8 years.Continued alignment to structurally supported distribution and long income Assisted by a strong capital performance and significant net investment into the sector,our distribution portfolio increased in value to 2,684 million,representing 74.6%of the total portfolio,up from 70

229、.8%at the start of the year.Our urban logistics weighting has grown to represent 43.9%of the portfolio,up from 38.5%at the start of the year.Long income reduced to 22.5%of the portfolio,with grocery and roadside continuing to represent just under half of this segment.The remaining 2.9%of the portfol

230、io is deemed non-core and is split between fiveoffices and four remaining retail parks.Geographical focusOur focus on owning assets in strong geographies,particularly around major urban conurbations,has increased the portfolios London and South East weighting to 47.1%with the Midlands accounting for

231、 a further 31.4%of the portfolio.3.6bn portfolio*1Urban Logistics43.9%2Regional Distribution18.9%3Mega Distribution11.8%4Long Income22.5%5Retail Parks2.0%6Offices&Residential0.9%Acquired*575mDisposed*208mInvestment activity in the year*Excludes 35.7 million of acquisitions that exchanged in the prev

232、ious year but completed in the year.Includes 72.4 million of acquisitions,predominantly urban logistics,that exchanged in the year but that complete post year end*Excludes 15.2 million of disposals that exchanged in the previous year but completed in the year.Includes 21.2 million of disposals that

233、exchanged in the year but complete post year endUrban logistics43.9%1Urban Logistics 242.9m2Mega&Regional Distribution188.9m3Long Income Other84.2m4Long Income Grocery&Roadside59.2m1Mega Distribution102.0m2Long Income Grocery&Roadside44.2m3Retail Parks25.2m4Long Income Other14.6m5Office&Residential1

234、3.1m6Urban Logistics 8.5m*Including development,based on valueLondonMetric Property PlcAnnual Report and Accounts 202230We continue to have a strong focus on income diversification and occupier creditOur investment and asset management actions over a number of years have increased the resilience of

235、our portfolio by investing in structurally supported sectors and improving our income diversification,granularity and security.We have a diverse occupier base by type of activity:Business Services&Trade accounts for 36%of income,spread across a broad range of sectors;Retail Logistics accounts for21%

236、;Third Party&Parcel Logistics accounts for 15%;Grocery&Roadside accounts for 12%;Electrical,Home&Discount Stores account for 11%;and Leisure and other sectors account for 5%.Our top ten occupiers account for 29%of contracted income which is down from 51%in 2019 and 36%in 2021.Contracted rent increas

237、ed over the year from 124.3 million to 143.3 million.Our latest occupier survey again demonstrated strong contentmentOur annual occupier survey was carried out in March 2022 and we continue to receive very good feedback.138 occupiers representing 81%by income were contacted and responses were receiv

238、ed from 55 occupiers representing 42%of income.We scored an average of 8.5 out of 10.0 in terms of whether occupiers would recommend us as a landlord,with our top 10occupiers scoring us higher at 9.1.In terms of how well our properties meet our occupiers needs,we scored 8.3 out of 10.0,which is in l

239、ine with our 2021 survey score.Occupier base by type of occupier(%of rental income)Income from top ten occupiers 29%2021:36%2019:51%Top ten occupiers(%)1Business Services&Trade36%Manufacturing&Packaging13%Building,Trade&DIY5%Aerospace,Auto&Transport6%TMT5%Food,Healthcare&Chemicals5%Education2%2Retai

240、l Logistics21%Online&Omni Retail17%Store only Retail4%4Grocery&Roadside12%Grocery8%Roadside4%5Electrical,Home&Discount11%Electrical&Home8%Essential/Discount3%6Leisure&Other5%Leisure3%Other2%3Third Party&Parcel Logistics15%2.3%2.4%2.5%2.5%2.7%2.9%2.9%2.8%3.4%4.1%WaitroseOdeonCurrysDHLDFSEddie Stobart

241、THGArgosAmazonPrimark61342531LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-208Our Net Zero Carbon(NZC)frameworkIn the previous year,we set three specific NZC ambitions as part of our longer term target of becoming NZC:1.Our opera

242、tions will be NZC by 2023Operationally,we continue to make good progress and have achieved a 92%reduction in our absolute landlord energy consumption since 2015.We continue to reduce our own emissions where possible and ensure that our energy supplies are all from renewable sources,aligned to indust

243、ry procurement best practice.From 2023 onwards,we have committed to offset residual carbon to ensure our operations are NZC and,during the year,we put in place a carbon offset strategy.2.We will continue to reduce emissions from development activity and new developments will be NZC by 2030Our develo

244、pment activity continues to focus on building highly efficient buildings.All of our completed developments in the year totalling 475,000 sq ft were certified BREEAM Excellent and we will add a further 845,000 sq ft of BREEAM Very Good assets through our current development activity.As part of our ef

245、forts to reduce carbon on developments,we continue to challenge our supply chains to minimise waste and select low carbon materials.At our recently completed Bedford Link development,we have reduced embodied carbon over the different phases of development by 27%through on site carbon reduction measu

246、res and amendments to material specification.We have introduced shadow carbon pricing on select direct flagship developments such that carbon is either offset or an equivalent value is reinvested into green initiatives.3.We will assist occupiers to help them meet their NZC targets and,from 2035,wewi

247、ll offset any of their residual carbonAs part of our drive to upgrade the quality of our assets,we continue to invest in high quality buildings as well as progress energy efficiency and clean energy initiatives including solar PV,LED lighting upgrades,roof works and electric vehicle charging.Our act

248、ivity in the year has materially improved the proportion of our assets with an EPC AC rating from 74%to 85%.As covered more fully in the Distribution review section,we see the potential to upgrade the quality of our urban assets through relatively straightforward initiatives which can materially imp

249、rove value,income and occupier appeal,particularly as we continue to focus on providing fit for purpose and NZC ready buildings.In addition,following completion of developments underway,we expect to increase the proportion of assets built to a BREEAM Very Good or Excellent standard from 26%at the st

250、art of the year to 29%.Furthermore,in the year we added 0.9 MWp of solar PV and continue to engage with occupiers on adding further solar installations.As part of progressing our NZC targets,we are increasingly focused on understanding how we can increase the number of NZC ready buildings we own.In

251、the year,we undertook NZC assessments on several assets.An important part of this focus is measuring emissions from all occupiers and,in the year,we increased occupier energy data coverage from 43%last year to 59%.As we recognise the growing importance of clean energy and EV charging,we signed an EV

252、 framework agreement with Motor Fuel Group,which will see a programme of Ultra-Rapid 150kWh charging hubs installed across our assets.In addition,we continue to install EV charging on new developments and properties where we are undertaking asset management initiatives.Further reporting on ESG is pr

253、ovided on pages 50 to 69A detailed analysis of our property activityOverviewWe continue to improve our ESG focus,particularly on environmental matters Our aim is to minimise the environmental impact ofour business,maximise energy efficiency and improve the resilience of our properties.We recognise t

254、he importance of a comprehensive ESG focus and each year set specific corporate targets.As part of our environmental focus,during the year,we:Undertook a comprehensive climate risk assessment;Progressed our Net Zero Carbon framework;and Completed on 450 million of debt facilities with a green financ

255、ing framework.Over the year,we maintained our Green Star status in the Global Real Estate Sustainability Benchmark(GRESB)survey.Our score of 65%is unchanged but significantly up from the 34%score in 2014.We also maintained our:BBB rating by MSCI;Gold Award by EPRA sBPR;and Inclusion in the FTSE4Good

256、 Index.Climate-related risks and opportunitiesDuring the year,we undertook a comprehensive climate-related risk assessment,in which we identified our key physical and transition risks over the short,medium and long term.Key opportunities were also analysed as part of the assessment.This was done at

257、a portfolio level using different climate change scenarios and we also analysed climate-related risks on a number of representative assets.The third party assessment concluded that our sustainability strategy is well positioned to manage climate-related risks and opportunities.LondonMetric Property

258、PlcAnnual Report and Accounts 2022321231Urban Logistics59%2Regional Distribution25%3Mega Distribution16%Distribution2,684mA detailed analysis of our property activity DistributionOur warehouses provide critical infrastructure to our occupiers and continue to benefit from highly attractive supply/dem

259、and dynamics.Strong performance from distribution Our distribution assets are spread across the urban,regional and mega sub-sectors.Including developments,we increased our exposure to distribution over the year from 1,829 million to 2,684 million,accounting for 74.6%of our portfolio.The WAULT on the

260、se assets is 11.3 years and occupancy is high at 98.1%,with our mega and regional assets fully let.Our urban logistics occupancy remained at 96.9%and vacancies relate mainly to assets which we are improving.Our distribution assets performed well over the year,delivering a total property return of 31

261、.1%which was driven by continued strong yield compression,rental growth and further gains on developments.Urban and regional delivered 33.3%and 34.0%respectively,whilst mega delivered 20.7%.Distribution acquisitions in the year totalled 432 million and were acquired with a WAULT of 16.7 years and a

262、NIY of 4.1%,which is expected to rise to 4.7%after five years from expected income growth.Disposals totalled 111 million,reflecting a NIY of 4.1%and a WAULT of 10.7 years.Post year end,in addition to further acquisitions,we sold a 229,000 sq ft regionalwarehouse let to DHL for a further 3.1 years fo

263、r 61 million at a 20%premium tobook value.Increased weighting to urban logistics In urban logistics,rental growth remains strongest,driven by severely restricted supply and strong occupier demand.Urban logistics has been our strongest conviction call for several years and,over the year,our urban log

264、istics portfolio increased from 994 million to 1,577 million across 127 locations,accounting for 58.8%of our distribution assets.Whilst the WAULT on these assets of nine years is lower than for mega or regional,these assets benefit from significant rental reversion,with average ERVs 17.3%above avera

265、ge rents.Furthermore,with 53%of our urban portfolio located in London and the South East and a further 34%in the Midlands,we expect continued market rental growth in these areas to increase our urban portfolios market rents.Urban warehousing acquisitions totalled 243 million across 26 assets.84%of a

266、ssets by value were in London and the South East,demonstrating our continued focus on the best urban centres.The NIY on these investments was 4.0%but with contractual rental uplifts and embedded rental reversion,this is expected to rise to 4.7%over five years.In the year,we sold one multi-let urban

267、estate for 8.5 million,reflecting a NIY of 3.5%.As at 31 March 2022123UrbanRegionalMegaTypical warehouse sizeUp to 100,000 sq ft100,000 to 500,000 sq ftIn excess of 500,000 sq ft Value11,577.3m681.2m425.2mWAULT8.6 yrs13.7 yrs17.8 yrsAverage rent(psf)7.506.705.80ERV(psf)8.808.006.70Topped up NIY3.5%3

268、.4%3.1%Contractual uplifts41.7%82.1%100.0%Total property return in 202233.3%34.0%20.7%*Including developmentsDistribution Portfolio*Selective investment activity in larger boxWhilst we continue to see better return prospects in urban logistics,we will always look at selective investment and forward

269、funding opportunities in the larger distribution warehousing sector.In the year,we acquired 189 million of regional and mega box warehouses across three assets at an attractive NIY of 4.1%rising to 4.6%over five years from inflation linked rental uplifts.These highly modern and well specified assets

270、 were acquired on long leases with a WAULT of 23 years and are all certified BREEAM Very Good.The majority of this larger box investment activity was funded by the disposal of a 785,000 sq ft warehouse in Northamptonshire let to Primark for a further 11 years.The sale price of 102 million reflected

271、a NIY of 4.1%.With fixed rental uplifts capped at 1.5%per annum and a declining lease length on an older property,we felt that future returns from the building would be limited.33LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-208

272、686,000 sq ft mega warehouse acquired for 97.0 million with a WAULT of 23 years,let to THG in Warrington*.The asset is reversionary and has further development potential of c.180,000 sq ft 345,000 sq ft of urban logistics acquired for 86.2 million as part of the larger 122.2 million Savills IM acqui

273、sition 300,000 sq ft new regional warehouse acquired for 53.4 million pre-let to AM Fresh for 25 years in Huntingdon*296,000 sq ft new regional warehouse acquired for 38.5 million,pre-let for 20years to an ecommerce company and located at Port One Logistics Park in Ipswich*168,000 sq ft urban wareho

274、use acquired for 15.5 million with redevelopment potential and located close to Luton town centre and the M1 130,000 sq ft warehouse acquired for 19.0 million through a 15 year sale and lease back with Bowers&Wilkins in Worthing 119,000 sq ft urban warehouse acquired for 11.1 million,let to Global L

275、ife Science Solutions,trading as Cytiva,for ten years in Cardiff 115,000 sq ft urban warehouse acquired for 43.8 million,let for 23 years to Reynolds and located in Waltham Cross 50,000 sq ft urban warehouse acquired for 10.3 million,let to John Lewis for a further 15 years in Uckfield 47,000 sq ft

276、urban warehouse acquired for 6.1 million with redevelopment potential,let to Jewson for a further 17years in Exeter 43,000 sq ft new urban warehouse acquired for 8.4 million in Preston,pre-let to Sainsburys for 15 years*34,000 sq ft new urban warehouse in Ashford acquired for 7.2 million,pre-let to

277、Blue Chyp for 15 years*28,000 sq ft highly reversionary urban warehouse acquired for 5.2 million,let to HTC Group for four years in Croydon 23,000 sq ft urban warehouse acquired for 7.2 million in Tottenham with significant refurbishment plans 19,000 sq ft urban warehouse acquired for 3.0 million an

278、d let to Deralam Laminates for four years in Dunstable 9,500 sq ft urban warehouse acquired for 3.5 million,let to Pai Skincare in Acton 8,000 sq ft urban warehouse acquired for 2.7 million in Thamesmead let to Archive UK on a new 10 year lease 9.25 acre vehicle parking site with consent for develop

279、ment acquired for 9.2 million,let to Amazon in Droitwich three urban sites acquired in Walthamstow,Stockwell and Cardiff for 4.6 million with development potential*denotes BREEAM Very Good certificationPost year end6 assets0.2m sq ftValue43mWAULT 13 yrs 125,000 sq ft forward funding development in L

280、eicester acquired for 19.6 million.90,000 sq ft is pre-let on a new 15 year lease*33,000 sq ft urban warehouse let to Jewson with a WAULT of ten years acquired in Ipswich for 5.3 million 28,500 sq ft urban warehouse in Canvey Island acquired for 5.4 million,let to a hygiene supplies company on a new

281、 15 year lease 11,000 sq ft urban warehouse in Stratford acquired for 6.0 million with vacant possession 11,000 sq ft urban warehouse redevelopment in Colliers Wood acquired for 4.1 million with vacant possession 6,000 sq ft urban warehouse acquired in Hackney for 2.6 million let to a dark kitchens

282、operator on a 20 year leaseA detailed analysis of our property activityDistributionDistribution AcquisitionsWorthing 130,000 sq ftIn year29 assets2.4m sq ftValue432mWAULT 17 yrsWaltham Cross 115,000 sq ftLondonMetric Property PlcAnnual Report and Accounts 202234Overview highlights 15 assetsc.490,000

283、 sq ftWAULT 11 yrsContracted Rent5.4m 74%of the assets are located in London&South East.Key locations including Croydon,Farnborough,Hounslow,Greenwich,Guildford,Maidstone and Stevenage.A further 12%is located in the Midlands.Strong locations74%In London&the South EastPortfolio overviewIn December 20

284、21 LondonMetric acquired Savills IM UK Income&Growth Fund in a corporate acquisition valued at 122.2 million.This acquisition was in line with our strategy of acquiring urban logistics assets in strong locations at attractive yields and with good rental growth potential.The portfolio had a high weig

285、hting to London and the South East where we continue to see high occupier demand and diminishing supply drive rental growth.Our strong credentials as well as our thorough and speedy due diligence process put us in a strong position to be the preferred bidder and acquire the portfolio.The acquisition

286、 was a key pipeline asset for our 175 million equity placing and was transacted within a month of the raise.Key occupier activityAttractive income with growthThe portfolio was acquired at ablended yield of 4.3%and areversionary yield of 4.9%.It has a WAULT of 11 years and generates 5.4m of rent per

287、annum,with a diverse list of occupiers.43%of the income benefits from contractual uplifts.The assets are under-rented,offering significant rental growth prospects as well as other asset management potential through lease regears and refurbishment.Acquisition case study Savills IM portfolio LONDONKen

288、tSurreyOxfordHertfordNorfolkBirmingham35LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-208Key occupier activity DistributionDistribution lettings and regearsDistribution lettings and regears in the year were signed on 1.2 million

289、sq ft,adding 6.9 million per annum of income,with a WAULT of 15.3 years:355,000 sq ft letting to Movianto for 25 years at our recently completed regional warehouse at Bedford Link Logistics Park;172,000 sq ft letting to Carlton Packaging for 15 years at Bedford Link;116,000 sq ft of break removals w

290、ith Grupo Antolin and DHL,extending term certain by an average of seven years;86,000 sq ft letting to My 1st Years for 15 years at our recently refurbished warehouse in Grange Park,Northampton,where the rent increased 27%compared to previous passing;121,000 sq ft of lettings and regears on multi-let

291、 warehousing with a WAULT of five years;65,000 sq ft of regears at Crawley where leases were extended by five years;62,000 sq ft of lettings at Mucklow Park,Tyseley with a WAULT of 10 years;56,000 sq ft of lettings at Wednesbury One with a WAULT 11 years;45,000 sq ft regear to Topgrade,increasing te

292、rm certain to ten years;30,000 sq ft letting to Greencore Construction for ten years in Bicester.The warehouse was refurbished to an enhanced specification which increased the EPC rating to A from C.Installation of a solar PV system would allow the building to become net zero.The new letting resulte

293、d in a 31%rental uplift compared to previous passing;and 16,000 sq ft of lettings with a WAULT of 17 years to Screwfix and Jacuna,a dark kitchens operator,at our substantially refurbished unit in Streatham.As part of our focus on solar PV,we funded a 300 kWp installation at our asset in Milton Keyne

294、s let to Speedy Hire.Under the arrangement,LondonMetric will receive an RPI linked income strip,delivering a minimum 7%IRR.The EPC rating is expected to have increased from C to A.Distribution rent reviewsDistribution rent reviews in the year were settled across 3.6 million sq ft,adding 1.4 million

295、per annum of income at 13%above previous passing rent,on a five yearly equivalent basis.37 urban reviews were settled at 20%above passing rent on a five yearly equivalent basis,with open market reviews achieving 22%uplifts on average and ranging from 7%to 88%.Two fixed mega reviews settled at 8%abov

296、e passing rent on a five yearly equivalent basis.Three index-linked regional reviews were settled at 16%above previous passing.Distribution lettings and regears(Additional Income p.a.)+6.9mDistribution rent reviews(Additional Income p.a.)+1.4mA detailed analysis of our property activityStreatham 19,

297、000 sq ft refurbished EPC upgrade D to B Solar enabled roofMilton Keynes 300 kWp solar PV Minimum 7%IRR EPC A expectedEnvironmental asset managementSee page 57Distribution asset managementactivityLondonMetric Property PlcAnnual Report and Accounts 202236Total lettings715,000 sq ftIncome5.5m p.a.Envi

298、ronmental considerations 100%certified BREEAM Very Good or Excellent and rated EPC A 450kWp of solar PV installed on two units with further potential 27%reduction in embodied carbon on last phase compared to first phase 30 EV charging points installed Building design facilitated Net Zero Carbon in o

299、peration High quality landscaping Social considerations Creation of a softer and contemporary logistics park,respectful of local residents in layout and landscaping c.450 permanent jobs created locally with a strong focus on employee wellbeing:high quality staffing areas,green surroundings,enhanced

300、cycle routes and footpaths High scoring of contractor on its local community activities Regular liaison with the local authority as well as various community and charity initiatives throughout the developmentA high quality sustainable logistics park,let to strong and growing businessesThe high quali

301、ty development was certified BREEAM Very Good or Excellent and consists of five buildings totalling 715,000 sq ft and ranging in size from 30,000 sq ft up to 355,000 sq ft.The final stage of the phased development completed in December 2022 and,in the year,we let the two largest buildings totalling

302、527,000 sq ft.This is LondonMetrics flagship asset and was built at a total cost of 68 million.It generates 5.5 million of rent per annum,which reflects a yield on cost of 7.4%,and has been let with an average lease length of 20 years to high quality occupiers.Four of the occupiers are now operation

303、al,with Carlton Packaging the latest occupier to commence operations in April 2022 at its 172,000 sq ft warehouse(as pictured).Lettings case study Bedford Link37LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-2081234A detailed anal

304、ysis of our property activity Long incomeOur long income assets are typically single tenant assets with low operational requirements that are benefiting from the changes in the way people live and shop.They are insulated from structural dislocation,continue to offer long leases and are predominantly

305、 focused on grocery,wholesale,roadside services,discount and essential retail,trade and DIY.The value of our long income assets increased from 635 million at the start of the year to 809 million,representing 22.5%of our total portfolio.They are 100%let to strong occupiers with a WAULT of 14.1 years,

306、average rents of 15.90 psf and a topped up NIY of 4.7%.Average asset size is c.6 million with 68%of income subject to contractual rental uplifts.Long income delivered a total property return of 19.0%.Strong performers were NNN Retail and Trade which delivered a return of 24.9%and 24.4%respectively.N

307、NN RetailThese are primarily single or cluster assets let to discount,essential,electrical and home retail occupiers.48%of the assets are located in London and the South East,with the largest located in New Malden,London.These assets typically benefit from high alternative use values.Trade,DIY&Other

308、A significant proportion of this segment consists of assets that are trade/DIY focused.A recent addition to this sub-sector has been a portfolio of Halfords Autocentres situated around the South East.1234As at 31 March 2022Grocery&RoadsideNNN RetailTrade,DIY&Other Leisure2Value1362.9m221.0m137.9m86.

309、7mWAULT16.2 years10.2 years13.6 years18.3 yearsAverage rent(psf)18.8019.807.9017.70Topped up NIY4.3%5.5%4.0%6.3%Contractual uplifts86%36%66%92%Total property return in 202214.9%24.9%24.4%11.0%1 Including developments2 Leisure primarily consists of five out of town cinemas let to OdeonLong Income por

310、tfolio breakdownKey occupiers Aldi EG Group BP Lidl Co-op M&S Costco WaitroseKey occupiers Howdens Safestore Jewson Selco Kwik Fit Topps Tiles MKM WickesKey occupiers B&M Halfords Currys Home Bargains DFS Pets at Home Dunelm The RangeLong income809m1Grocery&Roadside45%2NNN Retail27%3Trade,DIY&Other1

311、7%4Leisure11%Long income portfolio split*Grocery&RoadsideGrocery-led convenience forms c.65%of this segment with the remainder made up of convenience stores with attached petrol filling stations,drive-thru coffee outlets and automated car washes,all located in high density urban areas.We have been s

312、ignificant net acquirers in this segment.*Including development,based on valueLondonMetric Property PlcAnnual Report and Accounts 202238Acquisitions 143.4 million of long income assets were purchased at a NIY of 5.5%and a WAULT of 11 years.Half are in London and the South East:36.0 million portfolio

313、 of grocery-led,trade/DIY and leisure assets as part of the 122.2 million Savills IM acquisition;23.3 million portfolio of two NNN Retail assets in Burton and Evesham with a WAULT of six years;18.0 million grocery-led asset in South Ruislip let to Aldi and B&M for a further nine years and located on

314、 a 3.5 acre site;14.5 million grocery-led development funding in Uckfield pre-let to M&S and Home Bargains;13.0 million site in Fulham with vacant possession and significant refurbishment plans;8.0 million NNN retail asset in Birmingham let to Dunelm and Currys;6.9 million portfolio of five drive th

315、ru McDonalds with a WAULT of 16 years;6.6 million NNN retail asset in Truro let to The Range for a further ten years;5.8 million sale and leaseback portfolio of four Halfords Autocentres with a WAULT of 15 years in the South East;5.0 million roadside asset in Tonbridge,let to BP for a further nine y

316、ears;3.8 million NNN retail asset in Thanet,let to DFS for a further nine years;and 2.5 million trade park in Bognor with a WAULT of six years.Disposals 72.8 million(Group share:58.8 million)was sold at a NIY of 5.9%and with a WAULT of ten years:15.0 million car showroom in Solihull,Midlands,let to

317、Johnsons VW for 17 years.This asset formed part of the Savills IM acquisition;14.2 million(Group share:7.1 million)portfolio of three properties,located in Speke,Barnsley and Beverley let to Wickes and Dunelm with a WAULT of ten years;12.8 million grocery-led asset in Newport,let to M&S for five yea

318、rs;11.9 million(Group share:6.0 million)NNN retail asset in North Shields with a WAULT of five years;10.2 million grocery asset in Liverpool let to Aldi and M&S with a WAULT of 13 years;6.2 million grocery asset in Derby let to M&S for 15 years;2.0 million(Group share:1.0 million)NNN Retail asset in

319、 Inverness let for less than one year;and 0.5 million trade&DIY asset in Aylesford,let to Halfords for 14 years.Lettings and regearsIn the year,we signed 12 lettings with aWAULT of 18 years adding 1.3 million of income.These included:four pre-lets with Dunelm,B&M,McDonalds and Costa with a WAULT of

320、16 years at our Weymouth development;a 25 year letting with Lidl at Ashford,Middlesex,on a former 32,000 sq ft Hitchcock&King unit;a 20 year letting to Lidl at Totton to extend its representation to 21,000 sq ft,occupying space let to Poundstretcher;a regear with Co-op,where we extended the lease to

321、 20 years;a 15 year pre-let of a new Costa;and two 30 year lease regears at a petrol filling station and convenience store.Rent reviewsRent reviews were settled on 44 assets in the year generating an uplift of 0.5 million at 15%above previous passing on a five yearly equivalent basis.The largest rev

322、iew was on a Costco in Coventry where a five yearly fixed review increased the rent by 0.2 million.The remaining reviews were inflation linked or fixed uplifts,mostly relating to our Grocery and Roadside assets.Long income asset management activityLong Income investment activityPost year endWe sold

323、34.2 million(Group share:25.2 million)of assets at a NIY of 4.4%and with a WAULT of 16 years:a grocery store in Ashford recently let to Lidl on a new 25 year lease;a NNN Retail asset in Cardiff with a WAULT of eight years;a pub in Greenwich,previously,part of the Savills IM portfolio;and a petrol fi

324、lling station in Rushden.Long income acquisitions 143m39LondonMetric Property PlcAnnual Report and Accounts 2022Strategic reportGovernanceFinancial statements1-8788-154 155-208A detailed analysis of our property activity Developments BedfordThe 355,000 sq ft distribution development let to Movianto

325、completed in December and is BREEAM Excellent certified with a 200 kWp solar PV scheme installed.TyseleyConstruction of the 120,000 sq ft distribution warehouse completed in July and is let to Amazon on a 15 year lease.The building is BREEAM Excellent and a 105 kWp solar PV scheme was installed.Hunt

326、ingdonDevelopment of a 300,000 sq ft regional warehouse,pre-let for 25 years,is expected to complete in December 2022.The building is expected to be BREEAM Very Good with the benefit of solar PV.IpswichDevelopment of a 296,000 sq ft distribution warehouse,pre-let to an ecommerce company for 20 years

327、,is expected to complete in June 2022.The building is expected to be BREEAM Very Good.LeicesterDevelopment of a 125,000 sq ft distribution warehouse is expected to complete at the start of 2023.The building is c.70%pre-let to EM Pharma and is expected to be BREEAM Very Good with the benefit of solar

328、 PV.WeymouthAt our long income development site,construction of a further 51,000 sq ft expected to complete in October 2022.The BREEAM Very Good buildings are 100%pre-let with a WAULT of 16 years.PrestonDevelopment of a 43,000 sq ft distribution warehouse,pre-let to Sainsburys for 15 years,which is

329、expected to complete in the next 12 months.The building is expected to be BREEAM Very Good.UckfieldDevelopment of a 41,000 sq ft grocery-led funding pre-let to M&S and Home Bargains is expected to complete in Q1 2023.London redevelopments Following recent acquisitions,we are redeveloping or refurbis

330、hing four London sites,consisting of:23,000 sq ft in Tottenham,which we have acquired vacant and are undertaking a comprehensive refurbishment;21,000 sq ft in Fulham,which we acquired vacant and are comprehensively refurbishing with terms agreed on a letting;11,000 sq ft in Colliers Wood,where we ar

331、e redeveloping the site;and 4,000 sq ft in Stockwell,where we are undertaking a redevelopment of the site.In the year,we completed 0.5 million sq ft of BREEAM Excellent developments representing 4.5 million of rent per annum at a yield on cost of 7.0%.0.9 million sq ft is under development which is

332、expected to generate 8.7 million of rent per annum.89%of developments underway are BREEAM Very Good.Completed inyearArea sq ft 000Income mYield on cost%Bedford(Unit 1)3552.97.8Tyseley(Phase 2)1201.66.0Total4754.57.0Under constructionHuntingdon13002.03.7Ipswich12961.94.5Leicester1,21250.94.5London re

333、developments(x4)2591.95.0Weymouth510.96.6Preston1,2430.33.9Uckfield1410.85.5Total9158.74.61 Forward fundings2 Anticipated yield on cost and rentsCompleted in the year0.5m sq ft100%BREEAM ExcellentUnder construction0.9m sq ft89%BREEAM Very GoodLondonMetric Property PlcAnnual Report and Accounts 202240Pre-let development in Huntingdon The 300,000 sq ft development was acquired during the year and re