Good morning to everyone, and welcome to CLS Holdings full-year results 2024 presentation. Let me start with an introduction. I'm Fredrik Widlund, Chief Executive, and next to me is our CFO, Andrew Kirkman. This morning, we will present you with the results for 2024 that we announced this morning. If we move to the first slide on page four, we will start with an overview of the year. On the operational side, we had strong leasing momentum and delivered our best leasing performance in the U.K. and Germany since 2015, with the group signing GBP 16.6 million of annual rent. This is up 7% on the previous year, and the leases signed were at 6.8% above ERVs. Net rental income was up 0.9%, or 3.8% on a like-for-like basis, taking into account sales over the year.
The main drivers were indexations, new lettings, and other income, including the Westminster Tower deposit. The underlying vacancy fell to 10.6%, as we are making good leasing progress. We also completed several refurbishments that are now available to let, meaning that the overall vacancy increased, especially in the U.K. Valuations for the full year were down 5.8%, but bottomed in the second half of 2024, with flat valuations in Germany and France, and a reduction in the decline in the U.K., and for some properties, increasing values. The decreases we saw for the full year were driven by expanding yields, but with stabilizing interest rates, we believe we are now close or at the bottom of this cycle. All 2024 refinancings were completed, and we've made significant progress in 2025, with GBP 42 million completed in Q1.
Another GBP 86 million will be refinanced with the sale of Spring Mews that we announced last week. We also have GBP 189 million that is credit-approved or going through credit approval. We will go through this in more detail later. In March 2024, we announced that we would sell GBP 270 million of property, and we have now either sold, exchanged, or agreed on GBP 199 million, or 70%. This leaves us with GBP 79 million to go, and we have also identified another GBP 130 million that we intend to sell to fund opportunities whilst reducing LTVs. EPRA EPS was down 10.7% to 9.2 pence from increasing financing costs, and although we are expecting our cost of funds to have stabilized, we are proposing a resetting of the dividend to fund opportunities that will drive long-term earnings growth, with a new range of 1.5-3 times cover.
This will take the full 2024 dividend to 5.28 pence per share, and it's a 50% reduction to the current dividend. The dividend will continue to be paid one-third as interim and two-thirds as final. If we now move to the next slide, I would like to give more details on our leasing activities. Leasing activity, especially in the U.K. and Germany, continued to increase over the year. On the left-hand side, you can see that we secured GBP 16.6 million of annual rent, which is 7% more than in 2023. The leases signed were at 6.8% above ERV, as we continue to see healthy rental growth. Like-for-like contracted rent grew 3.7% over the year, although headline ERV in the portfolio was down 0.8%. This requires a bit more explanation. Like-for-like ERVs in Germany grew 0.9%, and in France, 0.6%.
In the U.K., like-for-like ERVs were down 2.4%, but up 3% excluding New Printing House Square, where we took the decision in early 2024 to delay the redevelopment, resulting in lower ERVs. In conclusion, group ERVs, excluding New Printing House Square, grew 1.8% in 2024, which is similar to the run rate for full year 2023. On the right-hand side, you can see that our underlying vacancy fell to 10.6%. When adding the recently completed development, our reported vacancy increased to 12.7%, which was down from its peak of 13.2% in June. The majority of this came from the completion of the remaining floors at Prescott Street in London and three floors at Front de Parc i n Lyon. In summary, we're making good progress, and activity is increasing.
We're building on this momentum from the letting to Médecins Sans Frontières, or MSF, at Prescott Street to fill this property further, which would drive a significant reduction in U.K. vacancy. We are confident in letting more floors, given that the property has achieved EPC A and BREEAM Excellent ratings and has best-in-class amenities. On slide six, we have highlighted more details about the largest leases signed in 2024. One of the larger deals was a 20-year lease to the City of Dortmund, which built on the success of our letting to the City of Essen last year, and we are continuing to see strong interest in our German properties from government tenants. Professional services and IT companies are also active, and we signed several deals in all three countries.
What they all have in common is that these occupiers are looking for high-quality offices, well located near public transport in larger cities, but not necessarily in the most expensive locations, and that is exactly what we can provide. As previously mentioned, we're also delighted to welcome MSF as our first tenant at Prescott Street in Aldgate on a 10-year lease for 12,000 sq ft. Moving on to valuation on the next slide, I'd like to talk more about what we saw during the year and why we believe that values have bottomed. Starting with the group figure, you can see that we were down 5.8% in local currency, split between 4.1% in the first half and 1.8% in the second half. The main driver in both periods was yields expanding. In the U.K., valuations were down 8.3% over the year, and equivalent yields was up 41 basis points.
As we have highlighted before, it's worth noting that Spring Gardens, which has a shortening lease with the NCA, is valued as an office investment and not yet as a development opportunity, accounting for 40% of the U.K. decline. The rest of our 33 U.K. properties was down 5.1%. In Germany, valuations were down 3.5% from equivalent yields increasing 12 basis points. The reductions were evenly spread across most cities and properties, and so was the ERV growth of 0.9%. In France, valuations were down 5.1% from yields moving out 16 basis points, while ERVs were up 0.6%. Both Germany and France were flat in the second half of the year, and the U.K. decline reduced significantly.
With leasing activities holding up well and investment markets gradually becoming more active, in combination with property yields having adjusted to the new interest rate levels, it indicates that we are at or close to the bottom of the current cycle. On the next slide, I would like to give an update on our sales program. In March 2024, we announced that we would target to sell GBP 270 million of property, and in 2024, we sold properties for GBP 66.1 million. The properties were sold at book value. The majority was in the U.K., but we also sold in Germany and France.
Since the beginning of 2025, we have exchanged or agreed a further GBP 125 million, including the exchange of Spring Mews Student for over GBP 100 million at 8.1% above the 2023 valuation that we announced last week, taking the execution above 70% of target, leaving GBP 79 million in progress that we are targeting to complete in the near term. It has taken a bit longer than we've liked, so we have maintained pricing discipline. We've also identified another GBP 130 million that we plan to sell to ensure that we have the resources to invest in the many opportunities we have in our portfolio and pay down debt. I'll now hand you over to Andrew for more details on the financials.
Thank you, Fredrik, and good morning both to those in the room and to everyone online. This morning, I'm going to run you through our 2024 financial results, the successful refinancing activity that we executed in 2024, and the significant progress that we've made this year with planned 2025 refinancings. Finally, our occupiers and our index-linked leases. On this slide is a picture of our building in Bochum in Germany, where we have a government tenant on a lease until 2049, delivering rock-solid long-term income. Slide 10 sets out several key financial metrics for the business, which I'll run through in more detail over the following slides. In summary, CLS has delivered resilient performance against a demanding but improving market. This market has led to a reduction in valuations, a strengthening of sterling against the euro, and an expected increase in finance costs.
As a result, EPRA NTA was down 15%. EPRA EPS was down 10.7%, with the proposed final dividend halved to 2.68p, so as to retain at least GBP 16 million per annum of funds within the business to deliver on our significant and exciting refurbishment opportunities. The balance sheet remained strong, with over 80% of debt fixed or capped and an interest cost of 3.77%. Now for some more detail around these numbers and the drivers behind them. Turning to the next slide, I have set out some more detail on our positive rental income performance, which was outweighed by higher financing costs, resulting in lower EPRA earnings. Key to driving earnings is reducing vacancy, delivering on the opportunities in our portfolio, and controlling finance costs. As Fredrik has already touched on, the occupational market remains healthy, which helped CLS to drive a 3.8% increase in like-for-like net rental income.
The principal movements, which are highlighted in the graph on the left, can be grouped as followed. Firstly, new leases and renewals at GBP 5.7 million were ahead of expiries of GBP 4.8 million. Secondly, we have the combined GBP 5.9 million increase from the positive impact of indexation, strong performances at our Vauxhall Student and Hotel accommodation, and an increase in other income, primarily from the net deposit received from the failed sale of Westminster House to compensate for cancelling tenancies. These increases were slightly offset by less rent from properties becoming developments, such as The Bricks, Bismarckstraße , and Debussy, about which Fredrik will say more later. On a non-like-for-like basis, net rental income increased by GBP 1 million, or 0.9%, with reductions from disposals and FX and other minor movements.
On the right-hand side, moving from 2023 earnings to 2024 earnings, we have the GBP 1 million increase in net rental income assessed out in the left-hand side of the chart, equating to 0.3 pence per share. A slight increase in expenses due to higher student and hotel costs, given higher occupancy, as well as costs from higher vacancy from recent refurbishments. A benefit from tax and other, given a lower tax rate due to some tax savings. With, in some ways, the whole story being higher finance expense, as our interest costs increased by 16 basis points compared to last year, with finance costs reflecting the full year impact of 2023 refinancings coming through in 2024. Without this increase in finance costs, earnings would have grown year on year.
The waterfall chart on slide 12 sets out the main components of the movement in EPRA net tangible assets, with NTA decreasing by 15%, or GBP 0.38 per share. Going through the components of the movement from opening to closing NTA in order, we have EPRA earnings of GBP 0.092, which I've just walked through, the dividends paid in 2024 of GBP 0.0795 per share, which were effectively covered 1.2 times by EPRA earnings, the valuation decrease of 5.8%, or GBP 0.318, with decreases slowing significantly in the second half in all countries, and overall the valuation decreases were lower than the market, sterling strengthened by 4.8% against the euro in the period, resulting in a GBP 0.065 decrease. This is the decrease in the value of our properties in Germany and France, partly offset by the natural hedge of the associated euro debt.
Lastly, other of 0.9 pence is made up of small movements on several items. Slide 13 sets out the movement in CLS's cash and cash equivalents during 2024. Overall, we have over GBP 60 million of cash and GBP 60 million of underwritten facilities. In summary, our movement of uses in cash can be divided into two categories. Firstly, cash from operations, less interest and tax, which used to pay the dividends in the year. Going forward, we'll be saving GBP 16 million per annum from the reduced dividend. Secondly, the sale of properties, which used to pay down some loans and cover capital expenditure. Capital expenditure was at a much lower level in 2024, following two years of substantial investment in 2022 and 2023, although we do expect capital expenditure to increase to GBP 30-35 million in 2025, given the significant opportunities within the portfolio.
Financing is a key part of CLS's business model, and therefore I've included two slides in this presentation. The first slide, slide 14, summarizes CLS's financing strategy and some of our key metrics. There are three key points to highlight. Firstly, in terms of strategy, CLS uses secured SPV financing with 25 different lenders and over GBP 100 million of cash and cash equivalents and underwritten facilities. There are no group loan-to-value or interest cover covenants. Secondly, despite net debt being reduced by over GBP 60 million, LTV increased in 2024 to 50.7% from valuation declines. As per last week's announcement, the completion of the Spring Mews Student will reduce LTV by 2.8% to 47.9% on a pro forma basis. We have a target LTV range of 35-45%, and as announced by Fredrik, we're exploring more sales to bring LTV down to below 45%.
Finally, our cost of debt increased by 16 basis points to 3.77%, but was down by four basis points from the half year. Going forward, our cost of debt is forecast to remain stable or slightly reduce over 2025 and 2026. The sale of Spring Mews Student and the associated debt restructuring gives us confidence in achieving this target. Slide 15 summarizes our refinancings completed in 2024 and the progress that we are making with our 2025 refinancing activity. As shown in the chart in the left-hand corner, we refinanced or repaid all debt that was maturing in 2024.
Of the nearly GBP 200 million that was expiring in 2024, having already refinanced GBP 178.2 million of 2024 maturities in 2023, we refinanced or extended GBP 154.5 million, including GBP 9 million of new debt, repaid GBP 40 million after property disposals and amortization, and took GBP 10 million less debt through lower LTVs on these loans. The main focus for 2025 is to refinance all the debt maturing this year. We've already made excellent progress with over 90%, or GBP 342.1 million, of this debt.
The breakdown is as follows: GBP 42.1 million has been refinanced, GBP 85.8 million will be refinanced or repaid on the completion of the sale of Spring Mews Student in May, GBP 189.1 million has been or is going through credit approval, with most, if not all, expected to be refinanced by the half year, and GBP 25.1 million as well progressed and again expected to be financed this half year.
This would leave GBP 22 million across two loans for the second half of 2025. As is also shown in the graph in the right-hand corner, this refinancing activity will also help to reprofile our debt maturities more evenly in the future. My penultimate slide, slide 16, is a familiar one, which illustrates our high-quality and diversified tenant base across our three markets. There are three main takeaways. Firstly, our properties remain strongly multi-let, with our 719 tenants equating to an average of nearly nine tenants per building. Secondly, in terms of the top 15 tenants, there have been a few changes in reordering, mainly in Germany. The two most notable changes are associated with new leases.
At The Yellow in Dortmund, there are a number of changes at the now full building to accommodate the 20-year lease with the City of Dortmund, who will be a top 15 tenant next year. Also, as part of the associative reordering of space, HSPV NRW, the regional police academy, has leapfrogged Postbank to number five. HPH Institute, a blood laboratory, has come in at number 12, following the signing of a 10-year lease to take all the remaining space at Fangdieckstraße in Hamburg. Finally, rent collection has remained at over 99%, reflecting that government tenants and major companies account for two-thirds of our tenant base. My final slide summarizes the resilience of our income, with over 50% of rent being index-linked. As noted, indexation was one of the key drivers of the increase in net rental income.
The amount of indexation and how it works does vary by country. Most U.K. leases are not index-linked but benefit from upward-only rent reviews. However, Spring Gardens had a 2.6% rent increase mid-year 2024 due to the rent being linked to RPIX. In Germany, 62% of our leases are CPI-linked, which rose by 3.7%. In addition, a further 19% of our German leases have contractual step increases, which resulted in a 2.4% increase. Lastly, in France, all leases are index-linked. In 2024, we saw an inflation increase of 5.2% based on ILAT, which is a basket of property and construction indices. With that, I'll hand back to Fredrik.
Thank you, Andrew. On the following few slides, I would like to talk about some of the most important near-term projects that we're working on, including Citadel Place, which is currently known as Spring Gardens.
First, though, I'm pleased to present more details about three projects in Germany and one in France, with three out of the four being pre-let. The first two projects are The Bricks in Essen, on the left-hand side, and The Yellow in Dortmund, on the right-hand side. Both associated with recent long-term index-linked leases with two government tenants. Starting with The Bricks in Essen, where we have signed a 30-year lease for 17,400 sq m with a new anchor tenant, the City of Essen. The refurbishment is underway, with total remaining CapEx of circa GBP 15 million to be invested in 2025 and 2026, and the space will be handed over in phases from July this year.
The second project is The Yellow in Dortmund, where we are doing significant refurbishment, with total CapEx of GBP 10 million invested in 2025 and 2026, following a new 20-year lease with the City of Dortmund for 9,600 sq m and with the option to take another 2,500 sq m later. The renovated space will also be handed over in phases, starting in November this year. Both of these projects are expected to achieve an excellent estimated profit on cost in excess of 20%. Continuing on the pipeline and with a similar timeframe, we also have Debussy in Paris, on the left-hand side, and Bismarckstraße , in Berlin, on the right. Debussy is a GBP 10 million conversion of one of our existing buildings into serviced apartments, a growing segment that will also diversify our French portfolio.
Here we are converting an old office building, which will be operated by Regus on a 12-year lease, structured as a base rent and a variable rent tied to turnover. We have now secured planning permission, and construction is planned to start this summer, with completion in early 2027. Bismarckstraße , on the right, is a refurbishment of one of the best-located properties we have in central Berlin. Planning permission for the 6,000 sq m building has been granted for a comprehensive and energy-efficient upgrade. The estimated CapEx is circa GBP 12 million to be invested from the second half of this year and in 2026. Letting discussions have started, and we have some flexibility on the start date pending these discussions. These two projects are also expected to achieve an estimated profit on cost between 15-20%.
If we then move to the next slide, I am very pleased to give an update on the latest progress for Citadel Place. This is one of the largest properties in our portfolio, being a two-and-a-half-acre site in Zone One in London. The property is let to the NCA until September 2026, after recently securing a seven-month extension, and located opposite our previous mixed-use development at Spring Mews in Vauxhall. Here we have the opportunity to deliver a residential development with a gross development value between GBP 340 and GBP 380 million, with attractive potential upside. As with previous CLS developments, we are targeting 15%-20% profit on cost.
This is a large development, and our intention is to partner with a residential developer once planning has progressed further, and we're very excited about the potential here. We're working closely with Lambeth Council on delivering the planning application.
We have just completed the second public consultation, with the target to submit the planning application in the Q2 this year. Now, turning to the next slide, I'll provide an update on our sustainability program and the progress we are making. The work to deliver on our net zero carbon pathway is continuing. We have completed a further 27 projects this year, with many more in progress. We had spent GBP 17 million by the end of 2024 as part of the overall net zero carbon plan to invest GBP 65 million between 2021 and 2030, although it is increasingly difficult to separate this out as these upgrades are becoming more and more standardized when refurbishing buildings. The outcome for the year was a decrease in like-for-like energy consumption of 4.9%, which was better than our annual reduction target of 3%.
Nearly 80% of our properties now have smart meters for optimization of electricity, gas, and water usage. The U.K. EPC ratings are rapidly improving, and we're confident in meeting the expected regulatory requirements by 2027 and 2030, with over 80% of our U.K. buildings already rated an EPC A, B, or C. Being halfway through our current net zero carbon policy in 2025, we're also looking to review it this year to ensure we spend our CapEx in the best possible way and over the right timeline. Let's now move to the summary and outlook section from page 24. Starting with the U.K. on the left-hand side of the slide, the outlook in the U.K. has shifted, and despite some recent setbacks in terms of economic growth, our view is that we have a more positive market environment with increasingly larger transactions in the office sector.
It also helps that the working-from-home debate is more or less gone, with employees returning to the office either because they have realized that it's better for their own development or well-being, or that many employers are now encouraging office attendance. Vacancy in London and the Southeast is stable, and with limited new supply, we expect vacancy to reduce near term. In Germany, the recent election results and the reform of the debt brake are expected to drive a more growth-oriented path, which we believe is likely to result in an increase in office take-up and improve confidence in Germany as an investment location. In short, the majority of the EUR 900 billion announced will be spent in Germany with German companies, and that will increase demand both from government and private businesses, which will benefit the type of properties that we own.
In France, we have a more complex parliamentary situation after the election last year. This, together with a more challenging supply and demand balance for offices in part of Paris, while Lyon remains stable, means that there has been a slower rebind round in the investment markets. In summary, all the signs from valuations bottoming, increasing investment activity, attractive property yield versus swap rates, and growing occupier demand mean that we believe the market is at or close to the bottom of this property cycle across our three countries. Our operational focus continues to be on reducing vacancy, especially in the U.K., and letting our recent refurbishment and developments. We have signed leases at both Artesian at Prescott Street and The Coade in Vauxhall, and we're building on this momentum to progress this further in the near future.
With over 50% of our portfolio being index-linked, this also drives uplifts in the current environment. The walk on the slide starts with our contracted rent of GBP 108.9 million. The GBP 15.1 million represents the value of current space that is being marketed. As you can see, the vacancy is very concentrated to a few properties, with about half being our recently completed projects, i.e., high-quality Grade A space. The GBP 4.9 million of over-rented space that we now have is an effect of recent indexations, which has driven rent above ERV, while the large part is Spring Gardens, which is relevant as it is a development opportunity. Also, as previously described, we have been writing leases above ERVs, so we expect portfolio ERVs to catch up. Overall, this means that we have an opportunity to drive rents to GBP 119.1 million.
In addition, we have a further GBP 10.3 million of ERVs in current refurbishment that takes the potential to GBP 129.4 million. To summarise it, capturing the upside from leasing represents a huge opportunity for us that will drive upside. As you heard earlier, we also have some great projects that will deliver income over the more medium term. On this final slide, I would like to conclude and leave you with a few key messages. Leasing momentum is progressing, and our underlying vacancy is reducing, but we need to maintain momentum in letting our recent projects in the U.K. We have delivered on 70% or GBP 191 million of the sales program that we announced a year ago, and are targeting to complete the remaining GBP 79 million in the near term, and launch an additional GBP 130 million of sales to fund opportunities whilst reducing LTV.
We completed on all 2024 refinancings and have made significant progress on the debt expiring in 2025, with 342 out of the 374 either completed, credit-approved, or well-progressed. We are also resetting the dividend to enable long-term earnings growth with a new range of 1.5-3 times cover. This will take the full year 2024 dividend to GBP 5.28 per share. There are significant near-term opportunities in the portfolio, and we believe the market is now at or close to the bottom of this property cycle. With that, I'd like to finish today's presentation. Thank you all for listening, and we will now open up for questions. Tim.
Morning. Tim Leckie from Panmure Liberum . A couple of questions to start, please. Just on the refinancings, clearly a lot going on during a time of some volatility in the market. The Spring Mews disposal was an interesting one. Could you just spend a moment talking about how that—I hope I use the right wording here—collateral pool works, allowing you to retain the lower cost of debt? Maybe just walk us through that process. As a follow-up, I guess another one for Andrew is regarding the dividend cut.
Perhaps, is it possible to get some timing on the capital deployment opportunities and perhaps a bit more detail on the residential conversion in the U.K.? It's early days, I appreciate it, but around Citadel, how much will be the land contribution to a JV versus incremental cash? Just to give us some more details on the use that proceeds and timing as the dividend was cut for.
Thanks, Tim. One, I do a bit on Spring Mews Student and a bit on the dividend. Actually, probably best handled with Fredrik on some of the opportunities. In terms of Spring Mews Student, I mean, we thought it was an elegant deal in that we already had a long-term green financing in place with both good flexibility and a great partner. That allowed us, therefore, to restructure that financing. We achieved four things. Firstly, we managed to deal with GBP 85.8 million of refinancing for this year, reduced LTV by 2.8% to GBP 47.9 million. We reduced our cost of debt by 20 basis points, and it was earnings accretive while selling for book value.
We think overall it was a really good deal. What does this mean for financing going forwards? Our financing hit an all-time low of 2.22% in December 2021. It peaked at 3.81% in June this year and has dropped to 3.77%. We think that over the next couple of years, financing will be—costs will be down by over 20 basis points. Partly, that's because of things like Spring Mews Student and some of the sales that we've got coming up to repay more expensive debt. I think the other thing to remember is that if you look at us compared to many of our peers, because we've done so much refinancing activity over the last three years, we've taken a lot of the pain of resetting to recent increases in interest costs.
I think we're in a pretty good place from a financing perspective. In terms of the dividend cut, I mean, it's basically to fund these opportunities. We have got the three prelets already. We've got them on site for 2025, 2026, and then we've got the longer-term Citadel Place opportunity.
Yeah, maybe just to add to Andrew on that, those four opportunities that we talked about, we could deploy the cash straight away with that. It is not a question of having to wait. As we said, we are already on site for two of them, and the French one is due to start this summer. We expect that to happen straight away. Citadel Place, we have to obviously wait until the lease expires, which is September 2026. In the meantime, we are working on the planning application. As you heard, we are planning on submitting that in the Q2 . In the meantime, we will obviously be talking to partners and review various options for this site.
In terms of how much we would expect to contribute, yes, we would expect to contribute the land value, which is probably somewhere between GBP 80 million-GBP 100 million, and then we would have to contribute part of the CapEx. We're very excited about it. It's a great opportunity. It's a four-story building in central London, surrounded by 20, 40 stories of residential towers. We have good hopes that that will be a great project for us.
Morning, I'm James Carswell from Peel Hunt. Can you just talk a little bit about Prescott Street? I don't know, is it fair to say it's maybe leasing up a little bit slower than you'd hoped? When we look at some of the headlines in the city of kind of record rents and some of the big pre-leasing deals, it feels that that market's pretty strong. I mean, is that a reflection of the fact that your building's obviously positioned at smaller tenants? Is that market slightly different at the moment?
I mean, if maybe we take a step back first and just look at vacancy in our French and German portfolios between 6%-8%, which is what you would expect in this part of the cycle. The U.K. vacancy is too high. There's no doubt about that. I think it's important to remember that Prescott Street did not complete until Q1 2024. We have let one floor to MSF. It's a great building. It's EPC A, BREEAM excellent, and so on. I think, unfortunately, it's just a question of time, but I have no doubt that we will progress with that one in the near future.
This is Judith from Berenberg. Absolutely. You marked 79 disposals for this year and 130 as well. Are you able to give us some color on the valuations you're likely to achieve? Is it going to be around book value or any color on that would be great? Thank you.
I mean, as you saw before, we have maintained pricing discipline, so we have sold at book value for both in 2024 and what we have achieved so far this year. I think in some cases you have to look at potentially would you have to give some type of discount, but we are very much focused on achieving what we believe is the right value for these properties. Of those 79, we're already in discussions with them, but we do expect them to progress to the next stage fairly shortly.
I don't even know if you can answer this one, but given the share price, have you heard from your major shareholder? We're seeing increasing bid speculation. We've got US REITs coming in, private equity. The sector looks to be in play. Assuming that we get a pickup in letting activity, securing the EPS, the yield looks on the wrong side of double digits. Surely that's got to be attractive to someone out there. Have you any approach from the shareholder or any communication, anything you can tell us regarding that?
I mean, we obviously have a dialogue with our main shareholder on a very regular basis, but I mean, clearly we can't really have a comment on their views. The only thing we know is that they are a long-term, very supportive shareholder, and they like what the company do. Tim Leckie is about to bid for us then.
Yeah, yeah, sadly no. Thanks.
Beaman, we have any questions online?
Yeah, we have a couple, but several of them have already been asked in the room. I think one from an anonymous retail investor is about leasing activity being high, but U.K. vacancy—sorry, positive—but U.K. vacancy still being high, which I know has been asked, but then they asked for any update on the lettings with Artesian and The Coade as well.
I mean, going back to a little bit what I said earlier on, if you look at our vacancy in the U.K., it is clearly higher than in the other two countries. I think it's important to remember that about half the U.K. vacancy are in two buildings. One is Prescott Street, and the other one is The Coade in Vauxhall. I can just say that we're working very hard to let more of that. It is a question of time, but these are two great buildings. As I said, they're absolute Grade A, and they will let.
Great. Is there any more color? I know there's already been a question about the valuations for the additional sales, but any color on the additional sales that are planned? Where are you looking?
Yeah, I mean, we've done a lot of disposals in the U.K. We're therefore going to look at probably mainly Germany. Why? With the reduced swap rates, the gap between swap rates and property yields is now pretty attractive. That obviously underpins values. Obviously, we've got a lot more government tenants now in Germany, and some of those properties are going to become quite dry. I think on that basis, you'll see a lot more disposals in Germany going forwards.
A couple just asking about trying to understand sort of the new value of Citadel Place.
I mean, like in any development, it's an estimated end value of it that is based on the values you achieve per sq ft for flats in the Vauxhall area. That's how the reason we have a range is that there's clearly variables that move around, but it is in the region of GBP 340-GBP 380 based on current assumptions.
Great. Final one, just on values, you say that values are bottoming out. What is the direction going forward, and do you have a timeline?
I mean, both France and Germany were flat in the second half of 2024, and the U.K. reduction reduced significantly. That in combination with what you've heard before in terms of the gap between swap rates and property yields, increased activity in the market, it all points to the fact that we are very close or at the bottom right now. I don't think it's going to turn straight away. It will be gradual, and it probably will be slightly different between the countries, but there's no doubt that the trajectory we're on now is certainly much more positive than what we saw, say, six months ago.
Great. Go on, Tim, asked too, so I'll come back. Just I noticed in the statement there's talk about the board considered kind of various possible funding options and strategies and concluded that the existing strategy is the right one. I mean, can you give a bit of color as to what those alternatives were? Was that selling off a particular geography, or was that something else?
I mean, we have at least one strategy day per year, and as any company, and looking at the share price, we'd be right to consider different options. It's no more than that, James. I mean, we look at everything at all points in time. Thanks. If there are any more questions in the room, that's everything online.
All right. In that case, thank you all again for attending. Thank you.