Good morning, and welcome to this presentation of CLS Holdings PLC full year results 2023. I am Fredrik Widlund, Chief Executive, and I'm here with Andrew Kirkman, our CFO. To comment upfront on the future need for office space, it is very encouraging that more and more companies are calling for their employees to return to the office, and we've seen a clear trend of companies thinking strategically about return to the office as a value driver for their businesses. Today, we will present to you with the full year results and give you an update on our priorities and on the portfolio. But let me first start with an overview of the year. We had a good year on the operational side in all our three countries.
We had strong leasing momentum, especially in the second half of the year, and signed 89% more leasing transactions by value than in 2022. We also saw very healthy rental growth, with the new leases 6.9% above ERV. Our net rental income was up 4.8% to GBP 130 million, and our underlying vacancy was steady at 7.6%. On the valuation side, as expected, we saw a full year reduction of 12.5% in local currency, which was driven by yield expansion. One of our priorities last year was on the financing side, and I'm very pleased to report that we completed all of the 2023 refinancings, and as per today, 70% of the 2024 refinancings have also been completed.
The investment markets were more challenging, and we sold GBP 25 million of property, but we are targeting over GBP 270 million this year. I'll come back later on this, but it certainly appears that this year has started in a more positive spirit. The board is proposing to keep the full year dividend flat at GBP 0.0795, which is reflecting its confidence in the business and in our assets, and that there is significant rental upside in the portfolio. Now, let's move to the next slide to give more details on the leasing activities. We had a busy year on the leasing side, and our asset management team did a great job in converting inquiries into signed leases.
On the left-hand side, you can see that we signed 130 leases at 6.9% ahead of ERV, which is up significantly compared to last year, both in the number of leases, value, and ERV uplift. Encouragingly, the average lease size was also up, even if small to medium-sized floor plates are most sought after in the current market. Like for like contracted rent and ERV in the portfolio both grow during the year, as highlighted in the middle of the slide. Our underlying vacancy was steady at 7.6%, and when adding the completed developments, our reported vacancy increased to 11%. This was due to the completion of The Coade in London and Park Avenue in Lyon in the first half of the year, and part completion of The Artesian in London in the second half.
I will give you a separate update on these projects later. Underlying vacancy was stable across the board, and the largest overall increase was in the U.K. from the developments, which also represents our greatest opportunity to drive rental income. The beginning of 2024 has also started in a similar fashion to Q4 last year, with a higher level of deal activity continuing. On this slide, I will walk you through the valuation movement. A reduction was expected, and the portfolio was down 12.5% in local currency for the full year. With 5.5% in the first half, we saw a large decrease of around 7% in the second half. This is, however, better for the markets we operate in compared to market statistics.
The valuation decline was all driven by yield expansion on the back of rising interest rates, as we saw ERV increases in all countries. In the U.K., valuations declined 16.7%, and equivalent yields were up 79 bips, while ERV was up 1.1%. It is worth noting that Spring Gardens, which has a shortening lease with NCA, is valued as an office investment and not a development opportunity, and that contributed 2.7% to the U.K. decline, so the rest of the U.K. was down 14%. In Germany, valuations were down 9.1% from equivalent yields increasing 36 basis points due to the stronger ERV growth of 2.4%. The reductions were evenly spread across most cities and properties, although we did have a good uplift in Essen due to the new 30-year lease.
In France, valuations were also down 9.1% from yields moving out 82 bips, while ERVs were up 1.3%. Our Paris properties reduced in value by 6.9%, while Lyon was down 12.3%. It's always hard to predict the future, but with market expectations of lower interest rates and the adjustments we have seen so far, it is starting to feel like we are nearing the bottom of the cycle. Next, I would like to talk about our sales program on slide seven. So the property investments markets were difficult in 2023, with reductions in volume of between 40%-60% in all markets, and this was down from the low numbers we saw in 2022. During the year, we sold 5 properties for a total value of just over GBP 25 million.
They were all relatively small, which was one part of the market that still had some traction. Many were repositioning opportunities, and in total, the sales closed at 10% above the latest valuation. We are looking to reduce our LTV, and for 2024, we have a larger sales program, which includes the remarketing of Westminster Tower, where the buyer, unfortunately, failed to complete, and also our Spring Mews student property, which we have now owned for 10 years. During this period, the performance of our student property has steadily improved, but we believe we have done what we can to optimize this property, and now is a good time to look for an exit. In total, we're looking to sell for over GBP 270 million of property, and we have already made good progress with two properties, sales agreed in principle.
I will now hand you over to Andrew for more details on the numbers and occupiers.
Thank you, Fredrik, and good morning to those in the room and to everyone dialing in. In May, it will have been 30 years since CLS floated on the London Stock Exchange, and we'll be back here then to celebrate the anniversary. Consequently, it seems apt today to present our results from the stock exchange. This morning, I'm gonna run you through our 2023 financial results, the successful refinancing activity that we executed in 2023, and the further progress we've made this year with planned 2024 refinancings. And finally, I will talk about our occupiers and our index-linked leases. The picture on this slide is one of the offices of our Spring Mews development in Vauxhall, which highlights the increasing quality of our portfolio.
Slide nine sets out several of the key financial metrics for the business, which I'll run you through in more detail over the following slides. In summary, CLS continues to perform well in the challenging market. This challenging 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 EPS was down 11.2%, and EPRA NTA was down 23.2%. But reflecting confidence in our business and assets, the proposed total dividend is maintained at GBP 0.0795 per share. Overall, these resulted in a total accounting return of negative 20.8%. The balance sheet remains strong, with almost 80% of debt fixed or capped, and an interest cost of 3.61%.
Now for more details around these numbers and the drivers behind them. Turning to the next slide, I've set out some more detail on our positive rental income performance, which was outweighed by higher finance costs, resulting in lower EPRA earnings. As Fredrik has already touched on, the occupational market remains healthy, which has helped CLS to drive a 4.8% increase in net rental income. The principal movements, which are highlighted in the graph on the left, are as follows: firstly, over 55% of the portfolio is subject to indexation, which resulted in a GBP 2.8 million increase. There was a GBP 2.3 million increase from the full-year impact of the last two acquisitions that were made in 2022.
Our student and hotel operations had another excellent year, with the student accommodation being fully occupied and bookings already well ahead for the next academic year. While the hotel saw significant increases in average daily room rates. The GBP 0.9 million increase in other is a mixture of dilapidations, offset by some refurbishments and higher net rent, and a high net service charge. And finally, a small decline from the disposals that were made in 2022 and 2023. On the right-hand side, this GBP 5.2 million increase in net rental income translates into a 1.3 pence per share increase in earnings. However, this was more than offset by higher finance costs, with our interest costs increasing by 92 basis points and slightly higher expenses from inflation increases.
The waterfall chart on Slide 11 sets out the main components of the movement in EPRA net tangible assets, with NTA decreasing by 23.2% or GBP 0.776 per share. Going through the components of the movement from opening to closing NTA in order, we have EPRA earnings of GBP 0.103, which I've just walked through. The dividends paid in 2023 of GBP 0.0795 per share, which were 1.3 times covered by EPRA earnings. In the middle bar, effectively, the whole story of the NTA movement, with a valuation decrease of GBP 0.756 or 12.5%, with decreases in all countries, albeit these were lower than respective markets.
Finally, sterling strengthened by 2.1% against the euro in the period, resulting in a 3.6 pence decrease. Slide 12 sets out the movement in CLS's liquid resources in 2023. Rather than going through the graph bar by bar, I'll just pick out the main points. Despite ongoing investment into our portfolio, our cash position remains strong, with over GBP 70 million of cash and GBP 50 million of undrawn facilities. The GBP 50 million comprises two committed RCFs, which we secured in the second half of 2023 for three to five years. Overall, cash went down by GBP 43.3 million, which is similar to the GBP 47.2 million cash that we spent on capital expenditure.
The two-year period of elevated capital expenditure has now finished, and we are forecasting that spend will drop to around GBP 30 million per annum going forwards. We would expect cash to increase in 2024 as we make further disposals, as highlighted by Fredrik earlier. Lastly, cash from operations remained strong and was used to cover the payments of dividends, interest, tax, and other cost. Interest cover at 2.2 times remained healthy.... Financing is a key part of CLS's business model, and therefore, I've included two slides in the presentation. The first slide, slide 13, summarizes CLS's financing strategy and the progress we made in 2023. The main points of our strategy are: CLS differs from most of our competitors, as we use secured non-recourse lending, with currently 43 loans from over 25-- or from 24 different lenders.
In addition, we aim to have at least GBP 100 million in cash and undrawn facilities, currently over GBP 120 million. And our LTV target is between 35% and 45%, given that we borrow in the U.K. as well as in Germany and France. While net debt was unchanged in 2023, LTV increased to 48.5% as a result of property valuation declines. We are targeting to reduce gearing to below 45% in the short term and below 40% in the medium term. To achieve this, we have identified over GBP 270 million disposals, including Spring Mews student accommodation. On the right-hand side, I've highlighted the progress made in 2023.
As you can imagine, with over 40 loans with a debt maturity of 3.5 years, our treasury department is always going to be busy. 2023 was no different, and we refinanced all of the loans which were expiring in 2023. In addition, we refinanced over 50% of the loans maturing in 2024. The chart in the bottom right shows the debt maturity at the start and end of the year. Slide 14 summarizes the further financing progress made in 2024 and our focus for the rest of the year. The chart in the left-hand corner shows the position at the start of the year and the current position. We have already extended two loans this year, so that compared to the start of 2023, over 70% of 2024 refinancings are now complete.
For the remainder of the year, we only have six loans in Germany and France for GBP 98.3 million left to refinance. We also believe that our finance costs are starting to peak based upon the current swap curves, with only a 10-20 basis point increase in our debt costs expected this year. The other focus for 2024 is to tackle the refinancings that we have coming up in 2025 early. Our strategy has been to extend loans over the last two years, as some loans are associated with expected sales, and so we wanted to avoid break costs on long-term fixed rate loans. Some loans are for buildings for which we are trying to improve the letting situation first before securing a long-term loan.
Finally, we expected finance costs to reduce and did not want to take out longer-term loans at the higher rates. For 2023, we have 12 loans for GBP 399 million to refinance, with the greatest percentage being in the U.K., as it includes one portfolio loan across 12 portfolios. We are already progressing with refinancing some of the 2025 loans early, and others will be paid down through sales of usual debt amortization. My penultimate slide, slide 15, is a familiar one, which illustrates our high quality and diversified tenant base across our three markets. The three key points to highlight on, our properties remain strongly multi-let, with 744 tenants equating to an average of over eight per building.
A couple of changes in our hit parade of our top 15 tenants, with Kantar in at number four and Fraunhofer at number 13. Both of these changes are the result of us negotiating the surrender of the headlease at New Printing House Square from the Secretary of State. This means that we're now directly contracting with the tenants, as well as receiving increased rental income. And as a consequence of this, our portion, proportion of government tenants has dropped by 4% to 22%. But these, plus major corporations, represent well over half of our tenant base, which is reflected in our rent collection of over 99%. The strong rent collection of over 99% is the same as before, during, and after the pandemic. My final slide summarizes the resilience of our income, with over 55% of our rent being index-linked.
As noticed, this indexation was one of the key drivers of the increase in net rental income. The amount of indexation and how it works varies by country. Most U.K. leases are not index-linked, but benefit from upward-only rent reviews. However, Spring Gardens, CLS's most valuable property, had an 11.1 rent increase mid-year 2023 due to the rent being linked to RPIX. In Germany, 66% of our leases are CPI-linked, which rose by 7.1%. In addition, a further 20% of our German leases had contractual stepped increases, which rose by 5.7%. And lastly, in France, all leases are index-linked. In 2023, we had an inflation increase of 5.6%. And with that, I'll hand back to Fredrik.
Thank you, Andrew. As I said earlier, we would like to go into more details about our recently completed projects. Moving on to page 18. During 2023, we finished our enhanced CapEx program with the completion of three larger projects. At The Coade in Vauxhall, we have completed our nine-floor office development. The development was completed in May, with launch in June, and we have now let ground floor and ninth. The rent achieved for the ninth floor is starting at GBP 59 per sq ft and will rise to over GBP 70 per sq ft over time. At Park Avenue in Lyon, we have refurbished five out of nine floors and the facade, with the marketing launch in September.
Existing tenants for five floors are back, and we have let three floors at ERV, with two floors left that we are confident will go shortly. At The Artesian in Prescot Street in Aldgate, we have completed a renovation of the entire 96,000 sq ft building. The marketing launch was in November, and so far, we've had 25 viewings. Interestingly, we have now had six inquiries from universities, and we have therefore submitted a planning application for dual use. All of these properties now meet the highest environmental standards. If we now move to the next slide on page 19. Part of our active asset management is to modernize and renovate our buildings when we have the opportunity. We always have a few smaller refurbishments in the portfolio. And why do we do this?
Because it drives rental growth, and below are a few recent examples that we have been working on. The first one is Flexion in Berlin. We acquired a property in 2020, when it was 70% vacant. We have refurbished about half the building, and it is now 85% let. The new space is achieving roughly 30% higher rent compared to the existing space. The second one, Fleethaus in Hamburg, is an old water house or warehouse building in the waterfront area, where we have carefully renovated a listed facade and windows to improve noise and energy efficiency, in addition to contributing to the cultural heritage. The building is now 80% let, and we are under final negotiations for the last remaining space, with rents circa 20% above ERV.
The third one on this slide is Apex Tower in New Malden, where we have refurbished several floors, including the addition of a business lounge on the top floor. We've let circa 60% of the refurbished space, with strong interest for the remainder, and we will continue with phase two once this space is let. Turning to the next slide, I will now give you an update on our sustainability program. We're making good progress on our Net Zero Carbon pathway, and I am very pleased with how things are progressing. We spent over GBP 15 million by year-end 2023, out of a total program cost of GBP 65 million until 2030, with great results. This has also been recognized by the EPRA Gold Best Practice, as well as GRESB four out of five Green Stars.
We will also publish a separate sustainability report, which will be available on our website, together with the annual report. We completed 73 projects in 2023, including installation of EV charging points and the completion of our photovoltaic program in the U.K. This has also resulted in a 20% reduction in our D-rated buildings in the U.K., and we are fully compliant with U.K. EPC legislation and on track to meet our long-term targets. Let's now move to the summary and outlook section, starting from page 22. As an overall direction, the leasing markets are performing well, while the investment markets have literally collapsed in the last few years with extremely low transaction volumes.
Starting with the U.K., we're seeing good leasing demand, and as you heard earlier, especially the second half of the year was strong, with small to medium-sized floor plates, particularly in demand. There's also been much more clarity from larger corporates in the U.K. about future space requirements, with most companies now calling for employees to return to the office. The trend is also clear for fully fitted Cat B offices. In Germany, lettings to government and Mittelstand companies are performing well, while the larger German companies, whose main markets are overseas, are still grappling with uncertainty, which is mainly driven by general growth concerns. New E.U. regulations around sustainability are also coming into effect, and both tenants and banks are ramping up their requirements.
Rental growth is evident across the board, and we are seeing growth rates in Germany that are twice the U.K and France for the right quality buildings. In France, we're also seeing good demand for small to medium-sized floor plates, which plays well to our French properties. Office supply in Paris will increase in 2024, which will dampen rental growth. But we're also seeing more conversions of office building to residential due to more local planning system that favors residential conversions. In Lyon, we expect the lower market vacancy rate to be maintained due to more restrictive planning policies for new developments by the Green Party in charge of the city, and that in combination with a strong local economy. Our main operating, operational focus is on letting our refurbishment and developments to drive rental growth in our existing properties.
We have updated the walk that we have shown before, and we believe there are good opportunities to drive rental income over the next few years. So starting on the left-hand side, you can see that our contracted rents are GBP 112.6 million as at year-end 2023. The vacancies we have in the portfolio, which includes some of the recent developments, represents close to GBP 14 million of opportunity. That gives a total of roughly GBP 126 million. In addition to that, we are on site working on refurbishments. It's the second phase of The Artesian, which completed in the early part of this year. We have Apex Tower phase two that you heard about earlier on, and we also have Bismarckstraße in Berlin that we are on site working on.
These opportunities represents another GBP 11.6 million of rental opportunity, and that would take the total opportunity from the GBP 130 million up to GBP 138 million of rental income. In addition to that, we also have some longer-term development opportunities. We have Adlershof, and we have Lichthof in Germany, and we also have the larger opportunities with Spring Gardens and New Printing House Square in Zone 1 in London, but that is after 2025. In addition to these opportunities, and as you heard from Andrew, we also have over 55% of the portfolio on index-linked lease contracts, which will drive growth going forward. On slide 24, the last slide, I would like to leave you with a few key takeaways.
So strong leasing momentum, and last year, we increased net rental income close to 5%, while new leases were nearly 7% above ERV. Full-year dividend maintained at 7.95 pence, reflecting the board's confidence in our business and in our assets. For 2024, we will target more disposals to reduce LTV and increase flexibility, and over 70% of our 2024 financings have already been completed. We will continue to invest in the portfolio, although going forward at a more normal level of circa GBP 30 million per year. The operational focus is on reducing vacancy, and we do expect rental growth to continue. There is significant portfolio upside from reducing vacancy, indexation, and from letting developments. We believe the outlook for high-quality offices is bright, as more and more companies favor the return to the office.
Companies are again looking at their occupancy needs strategically, and as the pandemic legacy fades away, with more realistic, flexible working policies emerging. That is the end of today's presentation. Thank you all for attending and listening in. We will now open up for questions.
Do we have any questions in the room? If you could say your name and company and ask your question. Please.
Good morning, Tim Leckie from Panmure Gordon. Thanks for the presentation. Just two from me. The sub-10,000 sq ft market you pointed to as being a source of strength, could you perhaps, if possible, expand on what you see as driving that and how you're positioning your product to take advantage of that? And then perhaps looking more forward, assuming the disposals go through and put the balance sheet into a more proactive position, do you see that GBP 30 million CapEx you just touched on as having some upside risk once that is achieved, or is that a level you see as being in place for the next several years, regardless of where the balance sheet ends up post the disposals? Thank you.
Well, I'll take the first one, and then I'll hand over to Andrew for the CapEx question. But, I mean, interestingly, floor plates below 1,000 sq m or 10,000 sq ft has been the strongest part for us. It does play very well to our French portfolio because they are smaller properties, while the U.K. and German one also includes some larger floor plates. But I think it's pretty clear that smaller organizations seem to have quicker adapted to new ways of working and accepting that you need to be back in the office to be proper productive. And some of the larger companies are clearly struggling a bit more. We have seen a shift in the U.K., where I think a lot of companies are very clear on what they expect from their employees.
As I said as well, in Germany, there's a little bit more reluctance, but that's not driven by these policies. It's much more driven by general economic uncertainty around exactly how well the export industry will do going forward. But I think it's fair to say, smaller floor plates has definitely done better, and it does play quite well to our strength.
Tim, I think on your question around disposals and CapEx, you make an interesting point. So when we look at our CapEx program, the first thing that we look at is sustainability. So we've got our Net Zero Carbon pathway to 2030. That GBP 65 million of spend means that we're spending around about GBP 5-6 million a year. So that's pretty much the first thing that we commit to because the sustainability goes hand in hand with those quality refurbishments. The rest of it, we tend to scale depending on the opportunities we see in the portfolio. If tenants leave, then we refurbish the space because we can drive higher rental growth from that. But I think you are right.
If we are looking at our medium-term sustainable earnings, I suspect that therefore we will think about whether if the portfolio is a bit smaller in size, we might therefore see an upside opportunity on slightly lower CapEx.
Miranda Cockburn from Berenberg. Just following up on both of those, just in terms of the leasing market, are you seeing much of a change in lease terms, in terms of the length of leasing for the shorter, for these smaller units? And also, what sort of rent free is like at the moment? And then just on the CapEx, again, just expanding that a little bit more, are there any sort of major projects which you've had to put on hold just at the moment and that, you know, sort of going back to Tim's point, that you'd like to accelerate as soon as you can?
... Yeah, where did you stop? Yeah.
Reversal. If we look at, CapEx, Miranda, I think there are always opportunities. I mean, the nice thing is that our country heads are always pushing us because they think they've got the next big thing. So for us, it's balancing and making sure that we're comfortable the occupation market supports those. A good example of one we have delayed is the Lichthof development in Stuttgart, where we have planning permission for a brand-new office, but we've put that on hold. Whereas if we look at Adlershof, which is the building in, Berlin, we have permission for a rooftop extension, and we will go ahead with that, but probably not yet.
But then if we take things that we are definitely looking at, Biesdorf Strasse in Berlin, that's going ahead, but we are looking at more CapEx facilities as well, just to allow us to accelerate some of those because we do think the opportunity is there. So, yeah, we are constantly pushed to spend money. Somebody is grumpy in the corner and says, "We're not spending money." But, yeah, it's just if not, if we are confident, going back to your original point about occupation markets, you know, justifying that spend with increased rental.
Yeah, and on the lease terms, I think one of the trends we have definitely seen is that a lot of tenants are acquiring fully fitted Cat B offices, i.e., they are fitted out and including furniture, and that has clearly shifted in the last couple of years. So I think there's probably more discussion around what can we help with as a landlord, instead of saying, "I would like another three months of rent-free." So I think the requirements have shifted, and that's all part of people want higher quality offices, and sometimes they're not prepared to do that themselves. They want us to turn the properties and the space into exactly what they need before they move in. In terms of lease terms, I don't think there's anything new.
I mean, anything over 10 years is extremely rare these days. The 30-year lease we did with the City of Essen is quite unusual in today's market. Most leases would either be a 10-year with a five-year break, or in some cases, a five-year lease with a three-year break. And as you know, we're quite open to do these type of things, as most tenants, once they're in a property, don't tend to move.
Hi, Bjorn Zietsman, Liberum Capital. Can you comment on the changes in the type of occupier that you're seeing? You mentioned previously on one of your site visits that you're seeing increased demand from, for example, education providers. And then just a comment on, is it fair to say that that reversion should more than offset any increases in finance costs over time, over the next two years? And then just a comment on the CapEx requirements, specifically for the ongoing refurbs, expected to complete by 2025.
Well, if we start with the type of tenant, what have we seen? Certainly in Germany, we've seen quite an increase of government tenants, and that might not be central government, but a local type of government. So we're-they're quite active. I think we've seen more of that. Educational providers, I think that's very location-driven. In the City of London, Aldgate, East London, it's clearly an area where a lot of universities are looking to establish themselves. And yes, we have seen quite a lot of that. As I said, six inquiries relates to Prescott Street from universities, and we are back in for planning on that one.
But in general, I think you're going to have to accept that buildings will have different uses, and they might be an office building for 30 years. If they're in the right location, they might turn into something else later on, and that's clearly something that future planning policy needs to be a bit more flexible about.
Bjorn, on your question around financing costs, I mean, as we've said, we are seeing them peaking. So yeah, we are only seeing 10-20 basis points increase in our cost of debt this year. Why is that? Well, only 20% is floating, and if you look at where the curves are, you know, they've obviously flattened down a lot. And secondly, we've only got GBP 98 million left to refinance this year, so there isn't much that, you know, can move, touch wood. But then, your other point is absolutely right. You know, there's a 20% upside opportunity in the portfolio from letting out the existing vacancy in those properties that are coming back to us soon. So that should more than offset that increase in financing cost. And I think your final one was on CapEx.
I mean, yeah, for 2024, 2025, et cetera, we're imagining it's going to be at GBP 30 million. You know, the bigger opportunities around the Spring Gardens, and possibly New Printing House Square. Yeah, I mean, I think we'll come back to you in more detail. I mean, the only thing we'd say is, you know, we are looking at, you know, all options currently, as we would do, and, looking at planning, applications for Spring Gardens.
Morning, it's James Carswell from Peel Hunt. You mentioned the GBP 270 million disposals. I'm just wondering which geographies that might come from. I appreciate Spring Mews, obviously, one of those assets, but outside of that. And in terms of the investment market, you touched on kind of signs of life kind of coming back. Is that in all three geographies, or is that more so in, in one?
I mean, to start with, the geography of the sales, by value, the largest ones are in the U.K., including Spring Mews student housing. But we are also looking to exit a few things in Germany and a smaller property in France. But by value, it would be U.K., Germany, and then France, which also represents the size of our portfolio. In terms of springing back to life, I think we certainly have seen more activity in the U.K. and a willingness to have discussion at a more constructive level in terms of where pricing should be. I don't think we've seen much yet in continental Europe, but I'm sure that will happen. It normally comes through months later on.
And then maybe just one final on Westminster Tower. I mean, can you talk a bit about how much the deposit is that you've, you're kind of keeping in terms of the buyer that's walked away? And also, do you know the rationale, why have they walked away? Does that reflect the market kind of falling away? Is that their own kind of issues?
I can't really comment in absolute detail on that, but I could say that, yes, we have kept the deposit for that one, and we are back in the market with the property. We would expect that one to be selling fairly quickly, given that it has a residential planning permission that's been implemented, and there's still a lot of demand for that type of office to residential conversion.
Any more questions in the room? We have two from the webcast Q&A, both from Richard Pearson of Hamilton Asset Management. First, if the two sales agreed in principle complete, how much would they raise? And second, do you expect to complete the Spring Gardens redevelopment yourself post-2025 or sell to another developer?
The two sales that we are referring to is around GBP 70 million, if they both complete. In terms of Spring Gardens, we are looking at all options at the moment, including planning application for a mixed-use scheme. We have not decided exactly how we would progress that one, but I think it's very unlikely that we would do that on our own. It is just a very large 2.5-acre site in central London, and we will probably be looking for some sort of partner if we were to do that. Do we have any questions online?
I think we have one. Do we?
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In that case, I will go back to the room and see if there's any final comments from anyone or anything. That doesn't seem to be the case. So in that case, thank you again for attending. I hope you found it useful, and that concludes today's presentation. Thank you.