Good morning everybody, and welcome. Today's results reflect another period of successful activity. In leasing, 1.3 million sq ft. In planning, 1.8 million sq ft. In sales, nearly GBP 1 billion. In particular even, on our development pipeline, where we're announcing significant leasing progress today. Despite the obvious uncertainties, these results demonstrate four things. That demand for our space is healthy, that we're actively managing our capital, that we've got a strong financial position, and that we're successfully positioning the business for growth. I'll start with the results. Profit was almost GBP 200 million for the half. That's despite selling one and a half billion GBP of assets over the last 18 months. NAV is 2.6% ahead of March, reflecting a valuation increase of 1.4%. We've leased half a million sq ft more than this time last year.
Our pricing remains firm, with deals signed 7% ahead of ERV and at 98% occupancy, the business is effectively full on both sides. We're also delivering from more than just a financial perspective. As you know, sustainability is integral to our strategy, and our leading position is now recognized by a number of international indices, as you can see here. Turning to offices, our leasing activity covered three quarters of a million sq ft. New lettings accounted for 8% of Central London activity, with an average lease term of more than 15 years. Overall terms were again ahead of ERV and incentives remained steady throughout the period. We're also under offer or in advanced negotiations on over half a million sq ft. Our experience is that demand is polarizing. Increasingly, occupiers are focused on high quality space and a broader experience. That's what our campuses offer.
Today, campuses represent nearly 80% of the office portfolio. These parts of London represent an increasing advantage for us. We're aggressively managing the mix of uses and the mix of occupiers, as well as curating the spaces outside our buildings. Of course, our campuses benefit from great locations. They're in vibrant neighborhoods with excellent transport links. It's a really attractive combination, which is appealing to a broader and broader mix of occupiers. All this creates a superior experience for employees before, during, and after the working day. Let's look at Broadgate. We're transforming the experience. We saw the move of UBS into 5 Broadgate as a big opportunity to reconfigure 30 acres of Central London. A year later, you can really see the impact of our activity in terms of the mix of uses and the occupiers that we're attracting.
Across our three developments, 100 Liverpool Street, 135 Bishopsgate, and 1FA, we're delivering over 1 million sq ft. 16% of that will be in retail and restaurants. We're already under offer to a global retail brand who are taking 40,000 sq ft. We're in active negotiations for a cinema as well. That's a big improvement in quality and in mix. Building on the success of Broadgate Circle. We've attracted occupiers who wouldn't previously have come to Broadgate, maybe not even thought about coming to Broadgate. That's been an important strategic focus for us. Mimecast are a great example. They complement recent lettings we've made at 2FA, where a FinTech cluster is now emerging. I'm also very pleased to announce that we're now under offer on 160,000 sq ft at 100 Liverpool Street. That means that the space across these three developments is already 36% let or under offer.
It helps that Crossrail opens in 2019, our customers will be just 35 minutes from Heathrow. They also value proximity to Spitalfields, to Shoreditch, and to Old Street. Flexible workspace is another important part of our campus proposition. We launched our own brand Storey in June. We've tapped into growing demand from small and medium-sized businesses, as well as for short-term and project space from larger customers. We're delighted with the progress we've made so far. Nearly 70% of the space is let or under offer on terms in line with expectations. That feels pretty good after just five months. At the moment, three-quarters of the space is at Broadgate, but we're also fitting out space at Paddington and Regent's Place. Storey will shortly be available campus-wide. Turning to Paddington, it's been another strong performance. 4 Kingdom Street was a speculative, I nearly said spectacular, development.
Both is true. We were 80% let within a week of completion in April. That is exceptional. Storey is taking space. Today, we just got one vacant floor. Average rents are 5% ahead of pre-referendum levels. We talked about Pergola in May. It attracted over 130,000 people this summer, and the lineup has just been refreshed for Christmas. That gives people another reason to visit. We're also making real progress at the Gateway. It's a 20-story premium hotel with high-quality retail and a restaurant on the ground floor. We're well on the way to a pre-let, and we've just received a resolution to grant planning. As you can see, our strategic decision to broaden the mix of uses is working well. We're now achieving rents 40% ahead of when we acquired Paddington Central four years ago. Remember, here too, Crossrail arrives in 2019.
At Regent's Place, our leasing has also been outstanding. Today, we're announcing our commitment to redevelop One Triton Square as we're now fully pre-let on the office space to Dentsu Aegis, the international media agency. That's over 300,000 square feet for a 20-year term. It's the largest West End pre-let for more than two decades. It's great that Facebook have increased their commitment, raising their occupancy to over 180,000 square feet. These commitments are another endorsement of our campus approach, as well as the attraction of the location. Our neighbors at Regent's Place include The Francis Crick Institute and the Wellcome Trust. In fact, there are eight universities within a one-mile radius. 73 organizations have joined together to create what is becoming known as London's Knowledge Quarter. This proximity to exceptional talent is great for leasing. Again, local connectivity is really important.
As you can see, our campus approach is driving demand for our space. We're capturing a bigger share of the market, 8% of all Central London activity in the half. That's a great result for British Land. Turning now to retail. Here, too, we've made good progress. Clearly, there are headwinds in the market in terms of the economic climate and continued structural change. Retailers are firmly focused on quality. As you can see, our leasing performance has been very strong. There's healthy demand for our space, and we're signing deals on average 12% ahead of ERV, showing that we are on the right side of polarization. This performance is a testament to all the work we've done and are doing to reshape our portfolio for an omni-channel world. Today, retailers' margins are under pressure, so the right network of high-quality stores is actually critical.
The role of the store is changing. Historically, most, if not all, shopping was done in the store. Today, retailers break the journey down into three parts: discovery, transaction, and fulfillment. Our job is to help with each part of that process. A quarter of online sales are first browsed in-store. Just think about that number. Physical discovery is important even for an online purchase. Our role is to attract people to the physical shop by driving footfall. That's why at our regional centers, we're enhancing the customer experience with more F&B and leisure. At the fulfillment stage, retailers are incentivizing consumers to use click and collect because last-mile delivery costs are expensive. 30% of shoppers now use click and collect at our local centers, up from 19% three years ago.
Two-thirds make an additional purchase while collecting. Retailers benefit from lower fulfillment costs and additional sales. Convenience is a big consideration for shoppers, which really benefits our locals. Here, the use of click and collect is significantly higher than the national average. Across the portfolio, we're also significantly ahead on footfall. This helps drive our leasing performance. What does all this mean for our retail business? We're continuing to reshape it in three ways. We're selling assets that are not in line with our approach. We sold GBP 1.7 billion of retail assets in the last three years. We'll continue to sell assets which don't fit our strategy, around another GBP half a billion over the next year. We're buying assets which fit consumer needs and an omni-channel approach, like our GBP 50 million purchase at Ealing, adding to the existing asset.
We're investing in those assets which can really drive performance. I'll give you a couple of examples. First, Meadowhall. It's a super-regional that provides great opportunity for discovery. We've just completed a GBP 60 million refurbishment. In response, over 70 retailers have invested nearly GBP 40 million upgrading their stores. Rents and valuation are up. We've outperformed IPD on a one, three, and a five-year basis. We're attracting some great brands. For example, Joe Browns. It's an online retailer, but they've opened their first physical store at Meadowhall just last month. In September, we received a resolution to grant planning for a 330,000 sq ft leisure hall. It's an exceptional design which will increase the lettable area by 20% and transform the leisure offering. It's a significant milestone in Meadowhall's evolution. What really helped us achieve planning was our track record for supporting the local economy.
For example, during the refurbishment, we prioritized local suppliers and workers, boosting the regional economy by over GBP 30 million. We're really excited about the next step. We'll tell you more about that next year. Whiteley, a local center, is another great example. We built it five years ago. Since then, we've had a total return of more than 20% per annum, in part because we added a leisure extension. We've made some great lettings in the half. ERVs and values were strongly up. As you'd expect, it works well for click and collect, with over a third of customers using it. In an omni-channel world, our combination of regional and local centers is working well for both shoppers and retailers. As you can see, despite the uncertainties, British Land is performing well.
In a moment, I'll talk you through how we're managing our capital and positioning the business for long-term growth. First, though, I'll hand over to Lucinda, who'll take you through the numbers.
Thank you, Chris, and good morning, everyone. I'm pleased to present another good set of results to you today which reflect the effectiveness of our strategy. At British Land, we create outstanding environments through development and expert asset management, with a strong balance sheet to boot. That's been achieved through another very active half in finance. For me, the highlights have been taking LTV to 27%, issuing a sterling bond, and launching a GBP 300 million share buyback. This activity reflects our focus on capital discipline and increases our flexibility, ensuring we can continue to make the right decisions for the business. Now I'd like to take you through the financials for the half year. We've kept profits and EPS in line with last year, at GBP 198 million and GBP 0.192 respectively, despite the impact of one and a half billion GBP of sales over the last 18 months.
That's 12% of the portfolio that we've sold. The dividend is up 3% to GBP 0.15. NAV is also up 2.6% at GBP 9.39, with valuations up 1.4%. We've been a net divestor, and LTV stands at 27%, underpinning the financial capacity to progress our substantially de-risk developments. Altogether, for the six months, this gives a total accounting return of 4.2%. If we look at the income statement, starting with rents, the net sales we've made have reduced rents by GBP 22 million this half. The impact of lease expiries of properties in our development pipeline is offset by a one-off surrender premium from RBS on 135 Bishopsgate, which you'll remember I mentioned at the full year. This surrender allowed us to accelerate our development plans and also gives a useful boost to development returns on the asset.
Income from our completed developments, as well as like-for-like growth of 1.8%, take rent to GBP 297 million for the half. Turning now to financing costs. We've reduced these by a further GBP 12 million. This is as a result of the liability management activities we've undertaken over the last 18 months, as well as our net divestment activity. In September, we cash settled our 1.5% convertible bond. This has been a highly efficient source of financing for us over the last five years, saving us GBP 40 million in financing costs. We also successfully issued a GBP 300 million unsecured bond for 12 years at a coupon of two and three eighths. That's the lowest achieved by U.K. REITs in this market. It's good to have established this benchmark in our home sterling market. It also further diversifies our sources of funding and extends our average maturity, which now stands at nine years.
Sorry, just under nine years. Today, on a spot basis, our debt is 76% fixed. Looking ahead, over the next five years, this reduces to 60% on average. Putting this all together, you can see here that profits are flat, and we've already discussed the key moving parts. What this slide further demonstrates is how active we've been through the half, both in terms of selling and reinvesting in development. Looking ahead to the second half, as we discussed in May, we expect profits to be lower as we won't benefit from the RBS surrender premium, and we will have a full six months impact of the sales we've made to date. I know this is currently captured in consensus. I've included my usual further detail guidance slide in the appendix.
Looking down the income statement, you'll notice that admin costs have decreased by GBP 2 million due to lower variable pay, I'm expecting them to be at a similar level or possibly a little lower in the second half. Overall, our EPS is in line with last September. The continued dividend growth reflects the board's confidence in our strategy and our ability to grow income, and therefore dividends sustainably over the longer term. Looking at the property performance, we've got a high quality portfolio that's practically full, with average lease length of eight years. Valuations are up 1.4%, reflecting stable yields and ERV growth of 1%. Our performance reflects some great leasing activity and investor appetite for long-term, secure income streams, including the Leadenhall Building.
As you know, we completed the sale in May, although we recognized most of the benefit in our March valuation, the remaining GBP 32 million was taken this half. We've made further sales of GBP 417 million, on average 2% ahead of valuation. The valuation fall of 4% at Canada Water reflects costs incurred in the period. Our new valuation appointment policy, which restricts engagement periods to 10 years, resulted in a change of valuer for nearly half of the portfolio. As you would expect, there were a number of moving parts at the individual asset level, but no material impact at subsector level, and therefore overall. On our portfolio as a whole, retail has underperformed IPD by 40 basis points, whilst offices has outperformed by 70 basis points on a total return basis. Looking at retail in more detail, valuations are marginally up at 0.3%.
Multi-let assets make up almost 80% of the portfolio now. These saw good ERV growth of just over 1%, and values overall were down 0.4%. We leased or renewed almost 580,000 sq ft of space in the half, at terms 12% ahead of ERV. That's a reflection of the quality of the retail we're delivering to our customers. Investors continue to focus on low risk, long-term, smaller lot size assets shown in our solus assets, where valuations were up 2.5%. Turning to offices, overall valuations were up 2.6%. Here we saw six basis points inward yield shift and ERV growth of 1.2%. Our West End valuations were up 3.2% overall. At Paddington, values were up 5.6%. Our success in leasing 4 Kingdom Street, with an average rent of GBP 71 a sq ft, had a positive impact on ERV growth across the campus.
This is an example of how our campus approach magnifies returns for investors. Over at Regent's Place, values were up 2.6%, primarily as a result of pre-letting One Triton Square on a 20-year lease. Values in the City were at 1.7%, reflecting the Leadenhall sale building I just mentioned. Broadgate was up 0.6%, with ERV growth of 1.4%. This reflects our reshaping there and occupier demand for the quality space we're creating in an increasingly diversified campus. In residential, Clarges is close to practical completion and will formally market the apartments in 2018. We've made some good sales progress here, and we only have GBP 127 million left to sell. Bringing it all together, NAV is up 2.6% at GBP 9.39. The impact of the valuation increase and contribution from underlying profit is partially offset by dividend payments in the year. The share buyback program contributed GBP 0.04.
To remind you, we launched the program because we decided that investing in our own shares represented an attractive use of funds, an example of our commitment to delivering long-term value for shareholders. To date, we've invested GBP 156 million in total, and we're on track to complete the program by the end of the financial year, which at today's share price, would generate an increase in NAV of around GBP 0.17 in total. I like this slide. Our debt metrics are strong. Our loan to value now stands at 27%. We retain significant headroom to our covenants, and our interest cover stands at a solid four times. We have undrawn facilities of over one and a half billion and no requirement to refinance until 2021. You can see we've got real financial capacity and, as importantly, long-term flexibility.
Development is a key element of our strategy for creating value and growing rents over the longer term. From a risk perspective, we're doing this in a really considered way, and I'd like to take you through it. Our committed pipeline has increased since March with the addition of One Triton Square and 1 Finsbury Avenue. It has an ERV of GBP 55 million, as you can see on the left-hand column in the chart. Of this, almost 60% is pre-let or under offer. That equates to a future income stream of GBP 32 million, shown in dark blue on the column. Despite more than doubling the ERV of our committed pipeline since March, speculative development exposure remains at just 4% of the portfolio. We have costs to go on this committed pipeline of GBP 446 million.
85% of this is covered by residential receipts to come on Clarges, two-thirds of which are already contracted. Looking also at the near-term pipeline, that's shown in the right-hand column. Again, the dark blue is leasing progress so far. We are already under offer on 168,000 sq ft at 135 Bishopsgate. Having recently secured planning for the Gateway building at Paddington, we're in advanced negotiations on a pre-let there. For a moment, let's look at these developments in the context of our LTV of 27%. If you strip out the book value of these committed and near-term developments, then the rest of the portfolio carries an LTV of just 22%. Chris will talk more about future developments, including Canada Water. Finally, as usual, let me talk you through our future income profile. This slide takes a five-year view of income.
As you know, it's illustrative and based on value as assumptions, and it excludes the impacts of future sales and purchases. I'd just like to draw out a few key points. You can see the GBP 55 million of ERV on our committed developments, which we just talked about. You can see the GBP 32 million of it that's let or under offer. That's considerably more than the lease expiries on properties in our development pipeline. I've set out in the appendix the year-by-year phasing of this, taken in the round, you can see why we're progressing our development opportunities and why we're confident about the future potential of the business. This is my last results presentation for British Land. Over the last six years, we've significantly reduced LTV from 45% to 27%, and the majority of this has been through actions we've taken rather than market movements.
We've also reduced the weighted average interest rate to 3% and practically doubled interest cover. Altogether, that's a 40% reduction in financing costs. The direct contribution of this activity is clear to see with the 50% growth in profits over the same period. We've grown the dividend whilst also improving the payout ratio. I'm proud that I'll be leaving the company and its finances in such good shape. On that note, I'd like to hand you back to Chris.
Thank you. I'm very conscious this will be the last time Lou and I sit on the stand, sit, whatever, on this platform. Normally, I give her a thank you for her presentation. To paraphrase her, I like this slide. I like it because it's a great testament to what she has done over the last six years as finance director. You will all have your favorite line in this, my own, for what it's worth, is financing costs reduced by 38%, because that's one of the ways we've been able to drive profits by as much as we have in what, over the period, has not been without its challenges. There's more to Lucinda's service to this company than the last six years, and I just wanted to draw your attention to a couple of things.
The first is, which I promised her I wouldn't say, I'm going to say anyway because I always was, I just didn't want to. She's been in the company 25 years. Her commitment to the business, her contribution over that period has been remarkable. To put that in perspective for people, I think it's worth reflecting on how few women in this industry have actually managed to go from, if you will, Lou, the bottom to the top over their career. Congratulations on that. The second thing, which really stands and will stand the company in great shape over and above the financials, has been her focus on sustainability, which is really, as you know, built into the way the company thinks about it. That's in no small part down to Lucinda's focus and attention.
Thank you very much for all the hard work. We look forward to working with you over the next period, but also wish you all well for the future. I think you should come up. I would say that it's a brave man or woman who asks a really tough finance question at the end, but okay, apart from the fact Charlie will probably clamber across and thump you, it'll be fine. Look, I think above all, for the purposes of this discussion, the main thing is to be very aware that Lucinda leaves this business in very good shape. Before I turn to the outlook, though, I'm going to talk about how we've positioned the business for long-term growth. First, I'll spend a few minutes on Canada Water.
It's the newest campus in our portfolio, a unique opportunity in Central London, one stop this side of the wharf in Zone 2. We've made real progress over the last 6 months. In September, we agreed heads of terms with the London Borough of Southwark, which combines our interests and simplifies the lease structure. We've now got a master plan for the whole site. It covers 46 acres, shown here in red. We'll develop the scheme in phases so we benefit from existing income. The first phase, shown here in blue, covers around 1.8 million sq ft. Commercial space will account for just over half of that, retail and leisure about 15%, and there'll be around 650 homes with a substantial affordable component. As you'd expect, we are already generating considerable interest.
We'll submit an application for the overall master plan in the spring, along with detailed applications on several buildings in that first phase. In the meantime, we're building awareness of the area through The Printworks, our award-winning event space. It's attracted over 180,000 visitors since its launch and is an important part of our plans to create a vibrant new neighborhood. Canada Water is a large-scale, ground-up, and mixed-use opportunity. That is very unusual. Canada Water is by no means our only opportunity. As Lucinda said, we've doubled our committed development pipeline in the last 6 months. It now stands at 1.5 million sq ft, and yet, as she said, speculative exposure remains low at 4%. We've already pre-let or under offer over 20% of our near-term pipeline. Our medium-term pipeline now covers 3.2 million sq ft, and that excludes Canada Water.
We're successfully positioning the business for growth. Let me tell you what is to come. Across the business, we're focusing more and more on mixed-use. Ealing Broadway and Eden Walk are great examples of this approach. Our London campuses represent a winning strategy. All are situated in vibrant parts of London. We have opportunities at each to further diversify the occupancy by sector and by use. Another real benefit of a campus is that our investment in one area improves the wider asset. For example, our recent letting success at 4 Kingdom Street has washed over the whole campus, pushing the valuation of Paddington up nearly 6% in the half. However, you can expect us to apply our usual capital discipline. Overall, I expect us to be a net seller this year, and we'll continue to be very focused on leasing.
We'll invest in the opportunities that deliver the best long-term value. As you've seen, we've got a variety of options. These include development, some acquisitions, and of course, returning capital to our shareholders. We have flexibility in all these decisions because quite deliberately, we've raised our dividend cover to its highest level in 8 years. To wrap up, yes, there is uncertainty. That's the environment we're operating in. I'm delighted with our performance and equally delighted with our progress. Going forward, we have 3 distinct advantages. First, our strategy. We've deliberately shaped our portfolio to attract more and more occupiers. Second, our financial strength and flexibility. Our income is robust. We have a resilient balance sheet and sensible leverage. Third, opportunity. We've created a considerable pipeline. It positions us for growth. It's diverse and well-funded, and it will create substantial, long-term, secure income for our shareholders.
That's a crucial advantage in today's markets. With that thought, I'll turn it over to questions. Emma, could you name, rank, serial number just to remind everybody? That would be helpful. Just down the front. Thank you.
Hi. Good morning. Hemant Kotecha from Green Street. Good results in what is a very difficult environment. Thank you for the presentation. Maybe starting with Tim first, if I could just ask a question on the supply outlook. We've heard one of your peers somewhat concerned about the supply outlook, and then we've heard another of your peers much less concerned, actually, saying that there will be a potential undersupply in the West End. What's your view, and specifically in the context of the City, please?
Yeah. First of all, I'm in the middle of that. I think that the supply pipeline is relatively balanced. What we've seen over the last 2 years is the supply pipeline adjust, and that means it has flattened out, and the peak that we were concerned about and you were concerned about in 2018, 2019, has moved further out. Also, what you've seen in the take-up figures is this extraordinary demand for pre-lets, and you've seen today that we've got more than our fair share. The pre-lets are also managing the supply pipeline. In terms of the City, again, I think that is a similar characteristic. The supply peak feels as though it's a bit closer than the West End. It would probably be in 2020. You've all seen me talk about supply peak, and what happens is that peak seems to move further out.
Generally, I think that the market is in pretty good shape, there's a nice level of demand, and that for our product, we're not finding it exceptionally competitive. We're getting good interest in it.
I think just to pick up on that, I do think this point that we made a lot is playing out, and that's around polarization. I think you do see evidence that ordinary stock isn't necessarily going that well. We have a big advantage of stuff. Where we are, the campus approach, or if it's not campus, then it's exceptional for other reasons. That feels like it really has linkage with our customers. A big part of that, of course, is talent attraction and talent retention.
Thank you. That's agreed and very clear. Maybe a question for Charlie on retail, please. Meadowhall, looks like it's performing very well. The pictures that we saw, it looks very good, and the refurbishment looks excellent. The fact that it's performing well now is great. How do you think about managing the risk of potential overextending that some of the other big centers have faced in the past, given the 330,000 extension that you're planning?
Those of you who know me, I'm excitable most days, but Meadowhall, I get very excited about. If you got a chance, because the refurb finishes this month, go and have a look at it because it is exceptional. I think a couple of things. The performance has been driven by great leasing activity. We put in the press release, the volume of lettings done, but 30 new brands over 18 months. The lettings are at 11% ahead of ERV. That's what's given the valuers confidence to increase the ERVs overall by 100%. Capital value is up one and a bit %. The yield on Meadowhall is never super aggressive, so it's on a topped-up initial yield of 4.25% and an equivalent yield of 4.4%. I feel confident from the starting point.
On the going forward, where we see, and one of the reasons we were so confident about putting the planning application in for Meadowhall is where we see opportunities, two areas. First off is the range of rents at Meadowhall are very broad from GBP 200 Zone A to GBP 400 Zone A. The rent isn't all concertina-ed up at that sort of high end. Second off is that, the food and beverage element and the leisure element at Meadowhall isn't high enough at the moment. There's only 7.5% of the income from food and beverage. The leisure hall extension is only 90,000 sq ft of F&B, 60,000 sq ft of retail, some leisure. That's going to be highly complementary to what's already going on there. We're not really adding to sort of existing offers. We're broadening the reach. We're super excited about it.
Thank you. That makes a lot of sense. Then just maybe just one last broad question on retail overall. In the presentation, you talk about this idea of selling GBP 500 million of retail assets. Obviously, you can't tell us which those are, but can you give us some of the characteristics of those assets? Will you be looking to potentially be active in the market in acquisitions? There's a recent press article that talks about a certain acquisition.
On the sales we've said in the past, we still got quite a lot of solus assets. We haven't just sold those because there's a lot of latent value in some of those assets where we can get planning. We'll continue to sell some solus, and actually, there's really good demand for superstores, bizarrely, at the moment. We've got one under offer at sub 4% yield. We will sell some of the multi-let assets where we don't think they fit our long-term strategy. We look at every asset in the portfolio on the purpose it fulfills. If we think we've done enough to it or we can't quite get it to where we want, then we'll sell those. On the acquisitions side, from what you heard from Chris, we're more confident about this sort of regional local split and the purpose of each asset.
We look at it and say, "What's the purpose of the asset? What shopper missions is it trying to fulfill?" That's why we don't talk about shopping centers or shopping parks. Particularly in the local sort of bucket, we think there's a lot of potential. Will we do one or two acquisitions? We may well do, where we think there's potential in that specific locality.
Thank you.
Just stay.
Michael Bird, Exane BNP Paribas. Just a further question on disposals. You talked about the GBP 500 million. Is there also appetite to crystallize more surpluses from?
Let's call them super prime assets in the office portfolio.
The way I would put it overall, we made it clear we expect to be a net seller this year, is we'll do right across the business what we have consistently done, which is we will look to see whether the asset is effectively more valuable to our shareholders by holding it or by selling it. It's a disciplined process. We go through it regularly, and we'll continue to do that, and some assets will pop out of that in accordance with demand and how we look at the asset versus how everybody else looks at the asset. That's the process. It's not changing in style or content. We'll keep on doing that.
Just the second one, maybe I can push you a little bit further on capital allocation. You've talked about the GBP 500 million of disposals. You've talked about the committed pipeline being the CapEx is 85% covered by residential disposal proceeds. The implication is that that's still sort of a fall in net debt. The buyback is half complete. The shares haven't moved on since the buyback started. Is it fair to assume that you could refresh that buyback looking into the next financial year?
The way I would put it, first of all, we're only halfway through, right? Bear in mind that we did not undertake the share buyback with a specific, we're going to change the share price, right? What this was principally about was seeing the opportunity to invest in a portfolio that we knew very well at a price that was compelling compared with other uses of our capital. You should expect us, as I tried to make clear in the remarks, to continue to look at those alternatives. We have to take a long-term view as well as a short-term view. We feel in a very good position, as I alluded to with respect to the position we find ourselves in very deliberately. We got great cover on the side. We've also got low gearing.
We feel we're in a position to finance that which isn't already financed, but we'll be looking between those two, we'll do it in a consistent way. Robbie.
The Dentsu Aegis letting, could you talk about the potential hand back of the other space? Will that adjust the terms, specifically sort of the incentives that have been given away if you do end up taking Just broader, could you just talk about that? The second question is for Charlie. Obviously pretty strong beat versus the ERV on a net effective basis, so well done. Were there any large lettings within that that skewed it, in other words, that sort of really lifted it up? If they were removed, would that number sort of come down to a lower level?
That's slightly in the when did you stop beating your wife conversation, you know? They might have skewed them the other way. You never know.
Valid point.
Robbie, first of all, absolutely thrilled with the Dentsu Aegis pre-let. Great evidence of the interest in our campus strategy. In terms of the hand back, as you know, Aegis are in 10 Triton Street. It's about 118,000 sq ft building. After we've completed One Triton Square, they can hand back that building, but they pay British Land compensation for the surrender. The option is neutral to the development economics of One Triton Square. We're not in a position to talk about the rent or the terms at the moment because we're under an NDA. You've heard it's a long lease and it's a good rent and it's a profitable development, and we're really thrilled with it.
Charlie.
Thanks for letting me go second. I always need a bit of time to think. There were 70 odd long-term lettings. There weren't any in there that really massively skewed the figures. Of those 72, only eight of them were below ERV. It was quite a broad church of deals. 70% of them were in the regional portfolio, 30% of them in the local portfolio. Again, the outperformance was roughly the same in both. It was sort of pretty consistent.
Anybody else on the Nothing on the I think we're done. Wait a minute. Wait a minute. God. One hesitation and you're nearly out of here.
Sorry, everyone. Max Nimmo. Just a quick one on the valuation side on retail. Could you give a little bit more color around, as I understand it, this latest round of valuations was since the 10% stake in, say, Bluewater sold. There are some larger stakes that have been potentially brought to market at larger discounts. How do you look at that going forward in with the backdrop that you're saying that there's a tougher retail environment? Where do you look at that mix of yield expansion versus the ERV growth? Perhaps it's for Charles.
Sure. I think, first off, you have to look at every deal on its own merits and what the starting point is. I'm told that the starting yield on the Bluewater stakes were sort of a 4% yield, also they're passive interests, they're subject to long-term asset management fees. An investor's going to look at the combination of all of that in how they price it. There's actually very little really good quality retail available at the moment. When you do see it coming, there is quite good interest for it. I think the other thing in the investment market at the moment, which has surprised me a bit, to be honest, is there's a lot of demand for the sub GBP 50 million lot sizes that Lou mentioned, particularly sort of long leases where people aren't looking at the underlying fundamentals.
You've got this slightly odd dynamic that on ERV and operating performance, the large lot sizes are sort of showing the long-term trends and the low lot sizes are being driven short-term in value by sort of people investing for a different reason. The only thing I'd added, it so happens they're valued by the same firm. In terms of can you expect consistency and all that stuff, yes, you can. But I would just emphasize this point that Charlie makes about the passive nature of the stake. People are taking a haircut effectively on that yield. There are quite a lot of people who will not look at those sorts of slivers of those. I think that that's one of the things the valuers will continue to have in their mind when they try and balance all the information they're getting.
Thanks.
Right. We certainly won't keep you any longer. Thanks very much for coming, everybody.