Earnings Call: H1 2020

Nov 13, 2019

Good morning, and welcome to the British Land Half Year Results Presentation. My name is Courtney, and I'll be your coordinator for today's event. Please note that this conference is being recorded. And for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. I will now hand you over to your host at British Land to begin today's conference. Thank you. Thanks, Courtney. Thanks, Courtney. I think we have over 150 people on the line, so we're ready to go. I'm David Walker, Head of Investor Relations at British Land, and I'm here with Chris Grigg, CEO and Simon Carter, CFO. Before I hand you over to Chris, let me remind you that the slides to accompany this call are available now to download on our website, british land dot com. Those of you listening through the website, the slides will appear automatically. You're able to register questions at any time on the conference call, and those of you on the website can submit written questions. Take all of those questions following our prepared remarks. And with that, I'll hand you over to Chris. Thanks, David. Good morning, everybody. Today, I'll update you on the strategic progress we've made in the first half as well as what's happening on the ground in both parts of our business. Inevitably, our results have been impacted by the retail environment, but I'll provide some practical examples of how our strategy is working, then Simon will give you an update on our financial performance and I'll finish with a view on the outlook. We'll do all this in the context of our recent Investor Day at Paddington, where we spent a lot of time demonstrating the operational strength of our business. All of those materials are still online, but we've also made real progress since then. Let me start with the highlights. First, only six weeks ago, we achieved unanimous support from Southwark Council for our Canada Water Master Plan. That's an important milestone in our plans to create a new urban centre for London. It brings our medium term pipeline to 7,300,000 square feet and it's a key part of our long term strategy. Second, our office leasing success has continued on existing space and we further derisked our development pipeline, locking in £55,000,000 of future rent. Third, we sold over £230,000,000 of retail, ahead of book value, as we continue to reshape and refocus the business in line with strategy. And finally, we completed a £125,000,000 extension to our share buyback program, meaning we have now bought back £625,000,000 in the last couple of years. All this in one of the most uneven markets we've experienced with London strong, but retail obviously much more challenging. And that market backdrop has had an impact on our financial performance. As you've seen, NAV is down 5% overall. Offices, which are now 55% of our business, were marginally up in value led by developments, and we saw an uplift at Canada Water too. Retail was down nearly 11%. That's driven by weak investment demand and downward pressure on rents. EPS is also down. That's primarily because, in line with our strategy, we've made significant sales in the last eighteen months, and we're reinvesting in developments, which will deliver 4.6p annualized to EPS. Simon will talk you through all these numbers in more detail. And of course, CCAs and administrations have had an impact, but as we explained at the Investor Day, together with our peers, we've taken a more robust stance and as a result, we've helped significantly improve the outcomes for landlords. I'd like to give you a bit more color on how the retail part of our business is performing on the ground. You know we have a long term strategy to reduce and refocus our retail exposure. But as we made clear at our Investor Day, operationally the business continues to perform well. Occupancy remains high at 96% and you can see our footfall and sales outperformance on Slide 5. We let more than 600,000 square feet of space in the half, overall 1% ahead of previous passing rent. We are doing more short term deals that reflect the current needs of our customers as well as our focus on maintaining occupancy with the right mix, something that's critical for demandsupply tension and to drive footfall. Though particularly at centres impacted by CVAs, we've accepted a lower rent or a shorter lease to keep the space full. In the current environment, that's the right approach. Let me give you a couple of examples. At Guildbrook in Nottingham, we just relet the 30,000 square feet located by Fab Sofas to Marks and Spencer. Giltbrook works perfectly for them. It has a large large catchment, around a million people, and serves a broad range of shopper missions from destination to convenience. With a strong leisure and f and d mix and free parking, it's an excellent fit for their store transformation plan, targeting family friendly locations which support click and collect. Elsewhere at Mayflower Basildon, we let another fab sofa unit to Liddell, which will open in February. In these examples, it made sense to take a lower rent, 15% or more in both cases, but we secured occupiers who drive footfall and keep these assets full. We've seen single digit valuation declines in both instances. These deals are already baked into our values. Longer term, we are focused on reducing our exposure to retail to around 30% to 35% of our portfolio and we have a very clear approach to asset disposals. As we explained at our Investor Day, Slide seven sets out the key characteristics we use to evaluate our assets. We've continued to make progress on disposals. As I said earlier, the majority were the superstores we talked about in May. However, as you know, the investment market does remain dislocated with a number of operators under real pressure to sell. I'd characterize our approach as patient and opportunistic. Continue making sales that are in line with strategy as and when the opportunity arises. As we indicated in May, we are seeing some signs that liquidity is returning to certain parts of the market, but it will continue to be tough. I'll turn now to our London campuses. Here, we've made great progress. Excluding our most recent leasing deals, activity was over 670,000 square feet. So we're again taking more than our fair share of the market with terms on average 11% ahead of ERV. We've continued to increase the mix of uses and enhance our space through place making. For example, Everyman, the City Of London's first cinema, is now open at Broadgate. And at Paddington Central, the canal has been transformed from a scruffy barrier into a real feature. More canal boats providing cafe restaurant and event space. Developments are now 87% pre let or under offer, delivering over £60,000,000 of new rent when fully let. At Broadgate, our top rents are at £80 a square foot, nearly £10 above City Prime rents. That's a striking change from a few years ago, when top rents were below City Prime. This activity and pricing is a tremendous endorsement of our campus offer at Broadgate and elsewhere. It is really resonating with our customers and their people. Today we offer our businesses a much broader range of space, new or refurbished space that occupiers can fit out themselves, a blank canvas if you like, to fully fitted options where occupiers can move in quickly and terms are more flexible through to Storey, our all inclusive offer. Let me give you a few examples of how our offer is delivering. I have just mentioned the success we have had leasing new space. At 100 Liverpool Street and 1 Triton Square, for example, here we are delivering some of the smartest and most sustainable office space in London. But we are also enjoying similar success on existing space. The space isn't new, but it's high quality and it's been updated. Importantly, it benefits from all the amenities our campuses have to offer. A good example is Monza, a leading and fast growing challenger bank. The last few weeks, they signed at Broadgate in a building that was completed back in 1989. We've given the space a light refresh so it feels more contemporary. At Broadgate, we could also guarantee them space to expand. That was really important, so we've achieved a rent more than 10% above ERV. A good example of how we're commanding attractive rents on older but high quality space. Skyscanner, the online travel business, is another very recent example. They signed earlier this month at 338 Euston Road on our Regent's Place campus. We are delivering fully fitted space so they could move in almost immediately. And by reusing the furnishings and fit out from the previous occupants, rather than throwing it out and starting again, we've made a meaningful environmental saving. Because furniture and fit out accounts for a lot of the operational carbon for a building. They've also taken the full range of storey services, so what began as an initial discussion around a fitted option has become effectively a storey lease. Similarly, at 2 And 3 Finsbury Avenue, we've let space well. In buildings, we're effectively holding for development, and again, storey's been really successful here. Staying with storey, an increasing number of businesses are looking for fully managed, fully serviced and flexible space. Storey is now in its third year. It is operational across nearly 300,000 square feet. Differentiated our offer in a number of ways. Occupiers can brand the space themselves, so it's their name on the door. They benefit from being part of the campus community, and we target scale ups rather than start ups. Our average size is around 50 desks. The fact that Storey is operated by British Land is a real point of difference, because we own the buildings so we can integrate our Storey brand into our broader offer. We're also evolving Storey further. Many of you will remember Storey Club from our Investor Day. It's available to all our Paddington occupiers and helps them use their space more efficiently. We're planning a second club at Broadgate as part of our 100 Liverpool Street development. We're also rolling out our stand alone offer that includes Wells Street in Fitzroabia and Oarsman Road in Haggerston. We'll be ready in the spring. The story is making good progress in its own right and it is supporting our leasing business right across our business. Next, I will spend a bit of time on a couple of themes which are becoming more and more important in our leasing discussions, namely smart buildings and sustainability. In both areas, we have a real competitive advantage. 92% of our developments will be green excellent or very good And Haggerston, which I mentioned earlier, will be our first cross laminated timber building with a much lower carbon footprint. We are also clear, low carbon footprint buildings can help drive higher rents. We are responding to a couple of RFPs right now where occupiers are looking to make a real statement in terms of their sustainability credentials. Another way in which we are delivering more sustainable space is through smart technology. Over time, we think it will make our buildings more efficient and easier to maintain. We are piloting technology with an existing occupier to deliver a better and more efficient working environment, using sensors to capture data. This will help them reduce their operating costs as well as their carbon footprint. So as more and more of us try to tread more lightly, these features will become increasingly important to our business. Turning to Canada Water, we were delighted to receive unanimous support from the Southwark Council for our Master Plan in September. So we now have a resolution to grant outline planning, which is a strong endorsement of our engagement with the local community. To put that into perspective, we have undertaken more than 120 separate public consultations, attracting a total of 5,000 people over the last five years. All of this means we could be on-site as early as the middle of next year. That's after we have completed the next steps, such as the Section 106 agreement, a formal issue of planning and the drawdown of the headless. But there is always some risk to judicial review, so we will obviously keep you posted. I would like to finish with a quick summary of our progress against strategy. By now, this slide will be familiar to you. On each element, we've taken some real steps forward, addressing our plans at Canada Water, where most of our residential opportunities are focused, reducing retail and investing in our mixed use campuses. On that note, I thought I'd finish this section with a photo on slide 16. This is an installation that we put in place at Broadgate back in September during the London Design Festival. It created huge interest and is a great example of enlivenment on our campuses. With that, over to Simon for an update on the financials. Thank you, Chris, and good morning, everyone. As you've heard, we've made a lot of progress across the business. We've de risked the development programme even further and had great success at Canada Water, but the retail environment continues to be tough. I'll talk you through how each of these aspects impacted the numbers this half and look at the drivers of future performance. Turning to the results. EPS reduced by 6.4 due to our capital activity prior to the delivery of development income. EPRA NAV is down 5.4% to 856p. That's due to a decrease in our portfolio valuation of 4.3%, split 10.7% in retail, marginally up 0.4% in offices. LTV remains low at 30.8% despite valuation declines and spend on our developments. Committed developments are already 87% pre let or under offer, reducing risk and locking in future income. Looking at the movement in EPS in a bit more detail, This has been driven by our capital activity over the last eighteen months, primarily £1,200,000,000 of sales. Our investment in share buybacks has partially offset this. They are also using sale proceeds to invest in our value accretive development programme. We expect the committed programme alone to add 4.6p to annualized EPS, most of which is already secured. You set aside the impact of capital activity for a moment. Earnings are flat this period. Like for like rental growth and our financing activities fully offsetting the impact of CVAs and admins. Let's look at net rents. I'm not going to go through every component of this slide in detail, but I wanted to draw out some key points on a couple of the numbers. Retail like for like is down 3%, primarily due to CVAs and administrations. So Debenhams and Arcadia enter CVA in the period. And I'll go into the specifics of CVAs and administrations in more detail later on. Absent any further large tenant events, we'd expect retail like for like for the full year to be similar to the first half. Like for like growth in the offices portfolio has been lower than in recent periods at 1% due to a few material expiries. These were at Broadwalk House, which we subsequently re let to Monzo, as Chris mentioned, and also 155 Bishopsgate where we're planning a refurbishment. We're already seeing good interest on this space. Re Gears as well as lettings and rent reviews across our standing portfolio more than offset the impact of these expiries. Running down the income statement, we've covered net rents. There was a slight improvement in fees and other income as well as admin expenses. Disposals and financing activity reduced interest costs. Dividend is up 3%. I mentioned back in May that we would be seeing an increase in the dividend payout ratio this period as we take the full impact of sales prior to the delivery of developments. We expect future income from the committed development programme to reduce the dividend payout ratio by around 15%. I've provided the usual guidance slide in the appendix. Turning to the balance sheet. NAV is down 5%, and you can see that this is principally a result of the negative valuation movement in retail, which I'll go through in a moment. Partially offsetting this movement is the impact of the £125,000,000 share buyback of 8p. Financing activity has been slightly negative on NAV, but delivers future interest cost savings. Turning to valuation performance, overall values are down 4.3%. Offices have increased 0.4 with flat yields and ERV growth of 0.9% in the period. Retail is down 10.7%, reflecting 37 basis points outward yield shift and a 4.8% decline in ERVs. Heard from Chris about Canada Water already. And our strong progress here has increased the value by over 12% this half. From formal receipt of planning and drawdown of the head lease, we would expect further planning valuation gains to be reflected. Looking at offices in a bit more detail, investment volumes have been low. The transactions we have seen have held values firm, and we're aware that there is significant capital waiting on the sidelines pending further political stability. On the occupier side, there is a lack of high quality supply, though we've seen ERB growth on the standing portfolio. Customers are increasingly having to look further ahead if they have large space requirements. Consequently, the developments have once again delivered a strong performance. They're up almost 5%. We've let 120,000 square foot on these schemes since March, with a further 280,000 square foot under offer or in negotiation. On Slide 24, I've set out our retail valuations, which were down 10.7%. I've included some of our larger assets on the chart. Transaction volumes have been very low, but there have been a number of smaller retail parks that have transacted or gone under offer around the period end to provide some useful valuation evidence for parts of our portfolio. Larger lot sizes, investment market evidence has been more limited. Value is primarily driven by current market sentiment. Our largest five assets were down 13% in value overall, with yield movements ranging between twenty five and fifty basis points. We've not been immune to the pressures in the occupational market, and we have seen rental declines of 4.8% across the portfolio. As you know, retailers are facing a near perfect storm. We've seen high profile store closure programmes, CVAs and administrations. General, the impact of CVAs and admins has been lower in the last twelve months, as you can see from this chart. However, there will be further insolvencies, and as always, Christmas trading will be key. The market has joined us in taking a more robust stance on aggressive use of CVAs. So the terms are improving, and we're losing less rent as a result. We've made good progress on letting the space that's come back to us. Against the tough backdrop, we've continued to deliver strong operational performance. This is reflected in our continued high occupancy of 96%. In terms of overall leasing, deals are in line with previous passing rents. Long term deals have been three and a half percent ahead of ERV and 15% ahead of passing rents. Incentives stable at six months. In the Investor Day, we spoke about how we're having to be pragmatic to keep occupancy high. On occasion, this means letting space on a shorter term basis. We've been doing these deals on average around 20% below passing rent. Importantly, we're maintaining rental tension by keeping the portfolio full with the right occupiers. You can see the benefit of this approach in our footfall metrics. Our footfall is marginally down. We continue to outperform the national benchmark by some margin. And encouragingly, like for like retailer sales at our assets are up 05% in the period, again striking performance versus the benchmark. Moving on to developments. We're now 87% pre let or under offer across our committed schemes, locking in income which will underpin our dividend in future years. We're seeing good interest in on the near term pipeline, reflecting the lack of supply I spoke about earlier. Our developments provide compelling returns, yield on cost around 6% and deliver substantial development profits. On the left hand column, you can see the expected phasing of our committed development income. Committed developments will add 4.6p to annualized EPS when they're fully let. Looking ahead, we have ample opportunities within our portfolio. In the right hand column, you'll see the potential rents of £48,000,000 from our near term pipeline, where we are already seeing good interest. This is at North And Fulgate as well as 1 Broadgate, where we achieved planning permission this year. We have added Allgate Place, a build to rent scheme where we expect to be on-site next year. There's also a further 7,000,000 square foot of schemes in our medium term pipeline, including Canada Water. I'll finish up by looking at our debt metrics, which are particularly important to us in the current environment. LTV remains low at 30.8%. Valuation declines led to a 1.2% increase in the ratio, and development spend added 1.1%. These movements were partially offset by capital activity, which reduced LTV by 0.4%. 75% of projected debt is hedged over the next five years. And on a spot basis, this is 83%. Our use of caps as well as swaps means we also benefit while market rates remain lower. Our financing activity this half has reduced our weighted average interest rate to a new low of 2.7, and we have undrawn facilities of £1,400,000,000 So we're maintaining capacity to progress opportunities. And on that note, I'll hand you back to Chris to wrap up. Thanks, Simon. Before we move on to the outlook, I'd like to set out four key messages from today. First, we continue to be very focused on delivering operationally. Remarkably uneven markets, we leased more than 1,000,000 square feet of space in the half and we've made further progress since then. So the portfolio is virtually full and developments are 87% pre letter under offer, locking in £55,000,000 of future rates today and delivering more than £60,000,000 when fully let. We recognize the challenges in retail and we've been pragmatic to bring in the right occupiers. Second, strategically, we've also made good progress, investing in our mixed use campuses. We've also taken a major step forward at Canada Water and we've continued to reshape and refocus the retail portfolio. Third, we have managed our capital well. We completed a £125,000,000 buyback. We kept our debt low and our balance sheet is strong and flexible. And fourth, we made real progress on our pipeline of attractive opportunities. We can progress these when the time is right, so we're well positioned for the future. On that note, I'll turn to the outlook. We said already that this is an uneven market, and we think that will remain the case. Starting with retail, clearly a lot of pressure comes from the challenges retailers are facing. We don't expect that to change anytime soon. From an investment perspective, that operational pressure and the uncertainty it creates has put outward pressure on yields, as you see. Again, we are not expecting that to change significantly, but there is still demand for certain types of retail assets and as we said in May, there is growing evidence that more and more people are looking with interest in this space. Turning to London, we are optimistic that our current momentum will continue. That's partly a function of supply, which is relatively constrained, but also the quality and location of our assets. And of course, we have a substantial pipeline to exploit this situation in a very timely way. On the investment side, London prime yields are substantially higher than elsewhere in Europe. And as Simon highlighted, there is a strong sense that a lot of capital is on the sidelines. I can easily see a situation where some of that capital was put to work if we saw more macro stability, but time will tell. And on that note, I'll hand you back to the operator for any questions. Thank We currently have no questions coming through. Okay. If we've got no questions on the line, we do have two questions through the webcast, which I will take and read out for the guys. The first one is from Paul Sheridan at Silver Edge Capital. Given sentiment towards retail, is there a case for considering a contrarian approach to such negativity and keep an open mind for some selective opportunistic acquisitions that may present themselves in the retail sector, or is it still too early? It's Chris here. Look, what I would say is we've been very clear on our strategic intention to reduce our exposure to retail. I see that as being the prime approach. We've also said that we'll continue to look at mixed use opportunities. I think when you look across the opportunities we have already in our portfolio as well as, as I say, the mixed use proposition, then we don't really feel any need to go any further than that in terms of opportunity right now. We do have some questions on the line now. That's a relief. The first question from the line comes in from Markus Feijmudge calling from BMO Global Asset Management. Please go ahead. Markus? Chris, good morning. Thank you very much to you and the team for presentation. A question about valuation. Obviously, you hinted that this is probably not the end, I'm afraid, of the correction in pricing in retail. Is some of your some of what is driving that thought process partly because this kit that you put on the market, which just hasn't attracted interest anywhere close to valuation. So you appreciate you are not you do not you cannot lean on the values. You cannot guide them up or down. But just as a reflection, they've given you the numbers and you've gone, blimey, that we've struggled in the market to get that valuation. Is that what's leading you to your thought process that this really over yet? And yes, Well, more think questions in a I'll that part of that, and I don't if Simon has got any comments to add to that. Mean, look, Markus, better than most people, you know the valuation process. We've rotated a lot of our valuers over the last few years. So we're very comfortable that they go through a very rigorous challenge process. As you also know, there isn't much evidence particularly on the larger asset side, so there isn't an element of not guesswork, but they're having to operate with limited information. I would say that is and as you know, it's a backward looking process. So I think all those are really the things that lead us into this direction. In other words, looking at the continued pressure at an operational level, which we've talked about, is our real reason for suggesting that that pressure will continue. So that I would say is the first set of points I would make. The second set of points I would make is around the sorts of assets that we put on the market. We took a decision earlier this calendar year that we really felt that the balance of, if you will, sellers versus buyers was an unattractive one. And in those circumstances, again, you know you end up with outcomes that don't feel balanced and the seller can easily find themselves in a difficult position. And we have we feel the absolute benefit, and we've touched on it already, of a strong balance sheet and a clear strategy, but plenty of operational flexibility. So in that environment, we haven't really had assets on the market in any size whatsoever. The exception to that is the superstores and as you know, we've had quite some success on that. Do we get incoming? The benefit, I would say, of being as clear as or one benefit of being as clear as we have been, that we are, if you will, net sellers, is that we do get incoming calls. Simon alluded to the fact that we see more interest. I would say we principally measure that by incoming calls plus some other plus such evidence. There is? Simon, don't know if you want to add anything. No, don't think so. That's very clear. Okay. Thank you. My other question thank you very much for that, by the way. My other question is just and sorry if I've missed this and I haven't had a chance to go through all the documentation. But what's the average on the buyback price, average that you achieved and the price that you paid? Sure. So on the most recent buyback, the £125,000,000 the average price is $525,000,000 And then if you combine that with the previous 500,000,000 that's GBP $595,000,000. And the point I'd make on the buyback is our buybacks have been linked to specific disposals in each instance. So it's been, as we talked about at the Investor Day, about exploiting an arbitrage between the level at which we're selling assets and the implied price of our own portfolio that we're buying back. The next question comes in from the line of Sander Bunk calling from Barclays. Please go ahead. Hi, good morning. Two questions from me, please. The first one is just going back on that level of interest you're seeing for some assets. Can you give some further detail on kind of what type of buyers those are and what kind of pricing they're looking at? I'm aware we've seen some transactions taking place in the retail warehouses market, which was around 8%. Is that kind of the level where you are currently seeing interest? And following on from that, and how are they financing this? Because we understand that the financing environment for U. K. Shopping centers at the moment or U. K. Retail in general is pretty difficult. That's the first one. And the second one is, can you give some more detail on the like for like retail declines of minus 3.2%? Just a bit more color on what proportion has been released and what the actual declines were over the period? What have you been seeing either from just normal letting and from on the back of CVAs? Thank you. We're busy scribbling here, so hopefully we got all the questions. Let me start with the sorts of interest we're seeing. First of all, on I'll start with where we actual transactional evidence, as I said already, it's principally in the superstore area. And we continue to there are quite a lot of people interested in that segment. They range from other REITs through to income orientated all the way from income orientated organizations all the way from private offices through to funds. And I'd say that's a healthy mix of domestic and international, probably on balance more domestic than international. In terms of multi lets, tending more towards, I think this is bit we've been pretty consistent with what we've said and frankly what we've seen around that has tended towards kind of private equity and what we would characterize as organizations that act like private equity would be the people most interested in those sorts of assets. And I think it's quite hard to be specific on yields because it varies so much from asset to asset. We know of some deals that have gone through the sorts of yields that you described, but typically, have been felt reasonably weak assets. So that's those. Simon, do you want to take the how these things are being financed? Sure. So I think you're right. In terms of financing markets, obviously, banks are more nervous around retail. But I think a continuation of the theme we've spoken about previously, It does depend quite a lot on the sponsor. So if you've got a strong sponsor with a good track record, debt is available at sensible LTVs for those type of investors. And you can see a little bit of that with British Land. We refinanced and extended some debt that we had in our Hercules Unit Trust, reflecting those themes. And then Sandra, I think you asked about like for like rental decline. So it was 3.2% in the period on retail and almost all of that was from CVAs and admins. Actually, in terms of leasing other space, we were effectively flat. Okay. And of those units that became vacant, have you re lapped some of those? And then what kind of pricing was that? Sure. So we've been tracking since you saw that in my chart, April 2017 and of the units that have come back us. And that's primarily administrations rather than CVAs. And we have administrations. We've released, two thirds of the units that have come back to us. And typically, the discount that we're seeing is between 2025% on those. Okay. Good. Cool. And just that, just going back on that yield point from my previous question, understand it's very hard to comment on that because it's very much asset by asset. But of the units you are putting on the market, I think Markus was alluding to this as well, where you are seeing interest from buyers, Is that already pretty close to book? Or is that still is there still there is interest, but there's still quite a big a large discount that a buyer wants compared to the existing values? Yes. To Chris' point, we took the view we sold earlier in the previous year because we recognized it was going to be a low liquid market with some of this Brexit uncertainty we were running into. So we haven't really had assets in the market. So our comment about activity is more about what we've been seeing and what our valuers have been using. And as you're right, it's in the sort of smaller retail part, 25,000,000 to 100,000,000 And one observation I'd make on yields is, I think initial yield is pretty misleading because when we've looked at those comps, there's a really wide range. What's more important is equivalent yield because some of those parks have been really over rented. And then the other aspect that we look at increasingly in this kind of value in market is capital value per square foot. And so that provided the valuation evidence for marking those smaller retail parks in our portfolio. All right. Very clear. Thanks very much. The next question comes in from the line of Rob James calling from Deutsche Bank. Please go ahead. Rob James. Just one question, following up for Markus is actually around the buyback. I just wanted to understand your thought process around not announcing a further buyback today. Should we read into that as a lower level of confidence in achieving further asset disposals in H2? Obviously, did €236,000,000 in H1. Obviously, if you announced another £125,000,000 today, it would add about 1% to LTV if you didn't sell any assets and about 7p on NAV accretion on my numbers. So I just wanted to understand why you've not decided to go down that route today. Obviously, shares are off almost 3% so far, so further opportunity to buy back your own shares at a big discount. We will continue to look at all those things. And as we've said historically, it's a call around the various uses of our capital. And we have a track record of making sales, making buybacks and also investing in what we regard as being very attractive opportunities within the portfolio. We'll continue to do that. The scale of the sales in the half don't feel like they particularly suggest another buyback, but we'll continue to monitor the situation. Okay. Thank you. The next question comes in from the line of Max Nimmo calling from Kempen. Please go ahead. Hi, guys. Just a follow-up on the disposals. You're talking about getting to this 30% to 35% target in retail within five years. How do you see the makeup of what that retail will be? And is that changing based on what you're able to actually sell at the moment, what you can see there's interest in, I. E, we're seeing a bit more liquidity in the retail park market. You guys obviously still got €2,300,000,000 worth of retail parks in there. So should we expect that, that side of the portfolio will decrease in the coming years? The way I would characterize it is that what we try to do is, as we've made clear, is be tactically sensible in selling those assets where we think there's a better rather than a weaker bid. And just to give you an example of that, we signaled some years ago that we were going to reduce our exposure to superstores and that market has waxed and waned over time. Our volumes of sales have tactically waxed and waned, but we're now down to 1%. We have a clear view of what the future portfolio will look like. We set out in one of the slides those assets we want to hold and those that we want to sell. And we'll have both sort of tactical overlay on what's a strategic theme around the strength of particular assets as opposed to parks versus shopping centers. We try to give you a lot of disclosure around parks and centers as well as local versus regional, but that doesn't mean that we don't think about it particularly in the context of the regionals and the locals. We'll adjust the portfolio in line with the features that we've set out, that Simon set out. Okay. Thanks. We currently have no further questions coming through. So I shall hand you back over to your host of British Lands. Thank you. Thanks. We just have one more question through the website, which is from Mark Parham at Hargreaves Lansdowne and is also actually about the share buyback decision. I understand the view that with shares currently trading at a discount to NAV, excellent shareholder value in the very short term is achieved. As an investor with a long term view, however, would opportunities not exist to make acquisitions in the spaces that you're looking to increase exposure, I. E. Residential and commercial, as opposed to buybacks? Sure. Look, I'd take you back to what I just said. From our perspective, from the board's perspective, our capital is important and it's about making returns for our shareholders. And we see interesting opportunities in several places, in no particular order, in the development program, in share buybacks, and from time to time in new acquisitions, particularly when those acquisitions are supportive of particular things. It's the job of the board and the job of management to balance those things up against one another. We've been very clear, for example, as Simon said, that when we do the buybacks, we're arbitraging against specific disposals rather than, if you will, commenting so much on one share price versus another. So that's the first thing to bear in mind. We're very disciplined about where we invest in terms of the portfolio. And when we do make acquisitions, it has to be for a specific reason, which we think is additive to the business. And that is a don't want to sound too kind of dramatic about it, but that's a dynamic process where we try and look at each opportunity. When we look forward at the opportunity to be on-site at Canada Water That is frankly a very potentially very attractive opportunity both in the near term, medium term and long term. So there's a good example where you absolutely would not want to be you would want to have the capital to take that opportunity in a timely manner without stressing the balance sheet or the business overall. One more has just come in from Peter at Green Street. Can we have a sense, please, of the next few key milestones and dates for Canada Water that will presumably lead to a further reported valuation uplift? Yeah. I mean, I think, you know, in the, development game, the the the one thing that is the slightly unknown feature is the risk of judicial review. In the timetable where we are, risk is probably around Christmas time. But by and large, as I set out in my prepared remarks, we have to go through the rest of Canada sorry, the rest of planning. We have to agree the Section 106 and we also have to draw down the lease. We're now in partnership. We will be in partnership effectively as we've already talked with Southwark as in the local authority. But if all those things go kind of according to plan, then we would expect to be on-site in the summer and valuation would be judged by the valuers in accordance with exactly where we get to on that. So Simon, don't know if you'd add anything to that. No. I think that's it. Effectively, they will look for the progress against those milestones. Clearly, a big hurdle's being removed with the, decision to grant, which was unanimous. So there there was an uplift this period of 12.4%, but there will be more to come once we get through those milestones. Is that clear? Just looking around the room here, it looks like we've got no questions in any format. With that, thanks everyone for joining. We'll be back to our face to face format in May. And of course, we'll see many of you on our road show in the next few days, which I'm looking forward to. So thank you very much for your time today.