Good morning and welcome, everyone, to Helical's results presentation for the half-year ending the 30th of September 2025. I'm joined today by our CFO, James Moss, and our CIO, Rob Sims. The agenda here sets out what we will cover during the presentation, and we will take any questions at the end. At our half-year results a year ago, my first as CEO, I set out what I saw as the Helical opportunity, and that slide is shown here. Through significant capital recycling, we had materially reduced our LTV to provide the equity to fund our development pipeline. We felt that an inflection point had been reached, and now was the time to build into a supply-constrained market where we saw rents rising strongly.
At our results presentation in May this year, we reconfirmed our strategic focus of delivering large-scale, best-in-class central London office projects, pivoting to alternative use when appropriate in joint venture and via equity-light structures. The aim being to provide enhanced and, relative to our size, meaningful returns as we deliver our development pipeline and unlock the profits via lettings and sales. We remain committed to that strategy, and we are in execution mode. During the period, we've made substantial progress across our construction projects in build and progress with planning consents and financing for those about to start. Rob will provide further detail on the individual schemes, but we're increasingly confident that the office schemes we are delivering at Brettenham House, 10 King William Street, and at Paddington will deliver significant profits.
Alongside the proposed forward sale of our PBSA scheme at Southwark, we aim to deliver GBP 85 million of profit in our base case scenario, rising to GBP 140 million if we achieve 10% rental growth on those office projects. We're also delighted to announce that through our strategic joint venture with Places for London, we now have new schemes to add to our development pipeline. We have a new office project in Farringdon, where a planning application has just been submitted, and a significant PBSA scheme in White City, together with two further sites undergoing feasibility for either PBSA or living uses. I'll cover these in more detail later. Turning to the results, as you'll be aware, the vast majority of the profit from the market-defining sale of 100 New Bridge Street to State Street a year ahead of practical completion was taken at the full year just gone.
Our half-year results announced today show an uplift in EPRA NTA per share to GBP 3.49 and a profit after tax of GBP 1.8 million. James will provide further detail on the financial results shortly. What I would like to do now is talk about the market themes we are seeing on the ground and how we expect that to impact our development projects and our investment assets. Many of the occupational themes highlighted are well-reported and well-known: strong active demand and take-up above the long-term average, a flight to quality to the best connected amenity-rich buildings, which are in short supply and with occupiers typically taking more space rather than less space. High fit-out costs, rising rents, and the shortage of options will inevitably lead some occupiers to extend leases if that is an option for them.
Our experience presenting 10 King William Street to potential occupiers is that company moves are frequently lease-event and expansion-driven. Interestingly, despite AI potentially driving efficiencies in those businesses, further expansion beyond their current requirements is often anticipated in the longer term. Occupiers remain discerning, and for those with a choice as to whether to move or not, will only do so if the new building provides them with what they need in order to convince fellow partners or their U.S. parent that it is required to attract and retain the best talent, enhance collaboration, productivity, brand, and culture. Our focus on delivering market-leaning, design-led product puts us in a great position to satisfy that demand. With the shortage of space in the core markets and the inevitable jumps in headline rents, we are seeing a noticeable change in the interest levels in the best buildings adjacent to those core markets.
At our Bower campus, the quality of offering, the all-in occupational cost, together with a resurgence of tech and AI-driven demand, means that we have active discussions happening on all of the vacant spaces. This is an exciting and positive change, and it is interesting to note that these occupiers seem not to be considering those more budget options further away from transport connections or buildings that are otherwise compromised. Another interesting theme we are seeing at the Bower and in the market more widely for floors typically 10,000 sq ft and below is occupiers wanting to take that space not only fitted but also wanting to bring in third-party management companies to run services for them within their space.
Many have been used to serviced or fully managed solutions, and this bridges the gap as they move to larger premises, this time with the benefit of the managed solutions that they actually want to pay for. This very much suits our own business model for the Bower. I should point out that our office development pipeline is quite different and that it focuses on our schemes which would have much larger floor plates where occupiers take longer leases who wish to carry out their own bespoke fit-outs. Turning now to the constrained pipeline in the core central London submarkets, we believe that this window will be open for longer than many commentators suggest due to the lack of market distress, significant constraints of raised construction and finance costs, and a retrofit-first planning policy.
Whilst this policy is an understandable ambition, it frequently delays permissions as developers try to justify their interventions to planning and heritage officers. With new build, best-in-class product, one can be fairly confident of demand levels and likely rents achievable. However, the dilemma in a retrofit-repositioning proposition is whether the interventions made will be sufficient to command the rents needed to justify the investment. The investment decisions therefore become more difficult, more nuanced, and frequently delayed. Investment activity in central London by the end of Q3 2025 reached GBP 6 billion, representing a 47% increase over the equivalent period in 2024, though this is still 24% below the long-term average. Encouragingly, there has been an uptick in the number of large lot-sized transactions, and we await the outcome of seven transactions which are due to exchange before Christmas.
The increasing depth of buyers to the market is a positive sign, and in particular, the re-emergence of institutional capital. A further reduction in base rates would be an added stimulus, making debt more accretive. I'll now hand over to James to run through the financial results in more detail.
Morning. Our GBP 245 million of sales last year provide the equity we need to take advantage of the market conditions Matthew has just outlined. Looking at the results, the profit after tax for the period was GBP 1.8 million, with EPRA earnings per share of GBP 0.024. EPRA NTA increased slightly to GBP 3.49, and the C3 loan to value remains low at 28%. As you would expect, last year's sales have resulted in lower net rental income at GBP 7.7 million. Through the use of joint venture and equity-light structures, we enhance our returns by generating development management fees and promotes. The progress we have made on site has resulted in a significant increase in our development income to GBP 2.9 million. These were partially offset by development staff costs and other costs of GBP 1.4 million.
As a reminder, at the end of the year, at the year-end, we took the opportunity to reclassify the development staff costs from admin to development profit, more appropriately aligning these costs with the value and income they create. We have continued this approach for the half-year. Overall, we generated a development profit of GBP 1.5 million, slightly up from last year, with these profits due to increase further going forward. When we announced our new strategy a year ago, we undertook to reduce and rebase admin costs, ensuring we are well-positioned to maximize our growth ambition. Our admin expense for the period fell by GBP 1.8 million, GBP 0.9 million of which was a result of reclassifying the development staff costs, but the remaining GBP 0.9 million reflects the savings of our leaner operating structure. The net impact is an increased EPRA profit.
We achieved a net gain and sale and revaluation of GBP 2 million. This was offset by a fall in the fair value of our interest rates for up to GBP 3.2 million, resulting in an overall IFRS profit after tax of GBP 1.8 million. Our NTA of GBP 3.48 at the beginning of the period was increased by the earnings per share of GBP 0.024, and the revaluation of gains from our development activity of GBP 0.017. The payment of the prior year final dividend of GBP 0.035 partially offset these gains, resulting in an EPRA NTA of GBP 3.49. Our dividend policy is to pay, as a minimum, the PID required by our REIT status. This will be supplemented by a share of capital profit from sales when appropriate.
Following the announcement of our successful forward sale of 100 New Bridge Street, we state our intention to return at least 50% of the profit from the sale when it completes, subject, of course, to wider business requirements. Today, we announce an interim dividend of GBP 0.015, maintaining the same level as the prior period and fully covered by the EPRA EPS. During the period, we exercised our first extension option on the GBP 210 million RCF, and we're pleased that all three lenders confirmed their support of the business and elected to participate. Our two development facilities, funding 100 New Bridge Street and 10 King William Street, continue to work well. Signing the forward sale of 100 New Bridge Street triggered a 100 basis point margin step-down, and this facility will be prepaid once it completes.
Our debt with HSBC on 10 King William Street contains margin step-downs based on construction and letting progress. We began our initial discussions for the financing of Paddington in spring this year and received indicative terms from a number of lenders. As we pulled the options together in October, we were delighted that the improved market sentiment and quality of the scheme resulted in better terms being offered. We now have attractive and accretive terms from an institutional lender and are looking to sign the facility alongside the site acquisition in January. The slide shows our overall debt position, with borrowings fully hedged and an extended maturity of three and a half years. The average cost of debt on the RCF remains low at 3.5%.
We have GBP 192 million of cash non-drawn facilities to fund the ongoing and future development activity and over GBP 90 million of equity due back from the sale of 100 New Bridge Street. Over the past five years, we have sold over GBP 620 million of assets, including 10 offices. For context, this is more than the total value of our portfolio today. These sales, in challenging market conditions and combined with the forward sale of 100 New Bridge Street, evidence our ongoing commitment to recycling assets once we have achieved their business plan, containing our gearing and allowing us to redeploy the equity into higher-yielding development opportunities. Our LTV remains low at 28%, and as previously guided, the increase was a result of building out the development pipeline. Looking forward to the year-end, our committed CapEx program will take our LTV to 36%, ignoring the impact of valuation movements.
However, once the sale of 100 New Bridge Street completes, this brings down the LTV to a pro forma position of around 17%, again demonstrating our commitment to maintaining our balance sheet discipline. Helical is a capital growth stock, and we target total accounting returns in excess of 10%, though the nature of these tend to be lumpy and driven by milestone events. Whilst our standing investment portfolio returns are lower than our cost of capital, they do cover the group's admin and finance costs and provide for the payment of a dividend. As we let the available space at these assets, we will benefit from the increased rental income before we recycle them at the appropriate point.
It is from our development activities that we look to drive our growth, with the value created recognized through revaluation gains, which are crystallized on sale of the asset, combined with the development fees and promotes from the use of joint ventures and equity-light as they come through. The key triggers for the recognition of these gains and promotes outside of yield movement or sales is pre-letting or letting the space, and this is where we have been successful, setting new benchmark rents for the submarkets we are in. Looking at our current and future secure pipeline, we believe there is GBP 85 million of value to come, which could increase to GBP 117 million if we achieve rents 5% above the business plan and GBP 140 million if we hit 10%. Rob will explain our progress on each asset shortly.
In summary, our focus is on finalizing our debt facility for Paddington, completing the sale of 100 New Bridge Street and the corresponding return of equity, structuring funding for the new opportunities, all whilst maintaining a strong balance sheet.
The past six months have seen considerable activity across our exciting development pipeline, with nearly one million man-hours worked. This morning, I'll take you through the progress that has been made on each of these schemes and the key milestones ahead. Let's begin with 100 New Bridge Street, where we remain on track to complete the development in April 2026. Since announcing the forward sale to State Street in April, we have worked closely with their project team to ensure the successful delivery of what will become their U.K. headquarters.
It has been particularly satisfying for the team to witness their enthusiasm to move into the building and to watch their fit-out plans develop, realizing the full potential of the space we have created. As Matthew touched upon earlier, there is some evidence of increasing liquidity in capital markets, with the sale of 100 New Bridge Street remaining one of the standout transactions. In fact, the net sales price of GBP 333 million, based on GBP 100 per sq ft ERV and a 5% yield, continues to be the largest outright office sale in London this year. The pictures on this slide illustrate the scale of work that has been undertaken to ensure this building is repositioned as a true best-in-class asset. It is also worth highlighting that the wholesale refurbishment and extension of the original 1990s building has been undertaken in just 24 months, in line with the ambitious original program.
The scheme remains on budget, and the final profit is to be taken upon practical completion. Next, Brettenham House, where this comprehensive refurbishment project is anticipated to complete in Q3 2026. Brettenham continues to represent the sort of project that differentiates Helical from our peers. It's an example of how we can adopt flexible capital structures, such as our GBP 12.5 million secured loan, to enable partnerships to be formed with existing building owners. It has also required Helical to utilize its full skill set to ensure the remodeling of this 1930s building is executed successfully. We are pleased to see the historic façade, striking marble staircases, and other art deco features of the building, all elements that originally captured our imagination being carefully restored. As we head into the new year, the focus will shift to the leasing campaign.
We have not actively marketed the building to date as construction work has been ongoing, but we look forward to presenting the building to prospective office tenants once work on site reduces. The site benefits from high footfall due to its prime location between Waterloo Bridge, the Embankment, and the Strand. Recognizing this opportunity, a leading F&B brand approached us over the summer, and we have since agreed to terms with them to occupy the ground floor retail unit. We are confident that their presence will further enhance the overall amenity of the scheme. As a reminder, Helical's returns on this project will be predominantly promote-based, with payment due once 90% of the office space is let. The promote is strongly correlated to rental performance, and we continue to see the potential for further upside on our equity-light investment as rental growth continues. Now at 10 King William Street.
As shown in this time-lapse video, rapid progress has been made on the development of this extremely rare prime island site. Work commenced at the start of the year, and the concrete box and core were formed by the summer. Since that point, the focus has been upon erecting the steelwork, with eight floors installed, and the cladding is due to commence soon. The superstructure is due to top out before the end of the year, which will mark a key milestone for the Places for London joint venture, with 10 King William Street being the first of the three initial sites to reach this point. Practical completion remains scheduled for December 2026, and importantly, cost certainty has been secured, with the interim final account now agreed.
We continue to engage actively with a number of potential tenants, particularly from the legal and financial services sectors, who are increasingly aware of the demand-supply imbalance within the City of London. This center-core building, with virtually column-free floor plates, has been designed to appeal to a broad range of requirements, enabling competition to be maximized. Interest has ranged from organizations looking to occupy the whole of the 142,000 sq ft building to tenants seeking to take combinations of floors, and we remain open to either strategy. For reference, valuation ERVs are already 22% above the acquisition underwrite. With new build vacancy in the City at 0.5%, we anticipate further strong rental growth, which should drive future valuation gains.
At Southwark, we've agreed heads of terms with Places for London for the forward funding of the PBSA building, and with Southwark Council for the forward sale of the affordable housing block. The final matters have been closed out at present, and both transactions are expected to exchange before the year-end. The quantum of the expected profit has been revised down marginally from GBP 25 million- GBP 19 million to reflect the forward funding structure and the impacts of refinements to the project budget as the design has developed during the period. This continues to equate to an excess of a three times equity multiple, with further upside to potentially be unlocked via rental promote payment. The transactions will enable the JV to receive a GBP 20 million gross profit payment upon commencement of development works, with the balance of the profit due upon practical completion, which is anticipated in 2029.
In addition, no further equity will be required to be invested by the JV partners from exchange of contracts. As you may have seen, Southwark Underground Station has recently been designated as Grade II listed. We have been aware of the potential for this to occur for some time. The station was originally designed with the intention for a building to be constructed above it. As such, we ensured that the consented scheme sensitively responded to the station structure from the outset. The team have prepared the necessary listed building consents, and we will now submit these. Importantly, we do not anticipate that the listing will have any impact on program or budget.
This project demonstrates our ability to deliver value from complex situations, with a once capital-intensive office scheme being restructured now into an equity-light investment, delivering enhanced returns to the JV, whilst also ensuring that the best value use for the site is adopted. At Paddington, enabling works began over the summer, six months ahead of program. The tower crane has recently been installed on site, and construction of the 19-story building will begin early next year. Procurement for all key packages is well underway, and the tender returns received to date are encouragingly within budget. Through early engagement with the main contractor Mace, we have also managed to reduce the development program by almost a year compared to the original business plan, with completion now anticipated in Q3 2028.
We are extremely excited to bring forward a scheme on what we believe to be the best site in Paddington, immediately adjacent to the station and with the reception opening onto the vibrant canal side. The 235,000 sq ft office scheme will feature highly sought-after 15,000 sq ft floor plates, with terraces on every one of its 15 floors. With no new office starts in the submarket, we are well positioned to benefit from improving rental dynamics. Moving to our investment assets. At The Loom, our largest tenant, Erdem, has extended their lease until 2036. Whilst two tenants vacated upon lease expiry, one new letting was secured, and discussions continue with existing tenants who are considering expanding. The Old Gate Market, in general, continues to experience comparatively high vacancy levels. The tenants are predominantly SMEs and have been impacted more by the economic challenges of the past few years.
However, as with previous cycles, where The Loom has reached full occupancy, we do anticipate demand expanding as core markets become increasingly expensive. At The Bower, we continue to see lots of activity across the campus, with numerous discussions ongoing. The uptick in demand is driven by a range of factors. Firstly, occupiers are increasingly drawn by The Bower's comparatively low all-in occupational cost. The price differential to more supply-constrained submarkets looks favorable and is expected to widen further with the business rates review due in April 2026. In addition, our strategy of offering a variety of finishes and specifications has been well received at present in the market. It is also noticeable that AI, rather than reducing demand of office space, is generating new requirements.
Given Old Street's reputation as a tech and innovation hub, these new businesses are increasingly seeking to be located in and around the Silicon Roundabout. The Bower is particularly well positioned, located beside the recently upgraded Urban Peninsula, which links directly into the station. With viewing levels at their highest in a number of years and a broad range of interest and discussions happening across the available space, we expect to be able to announce signed lettings in the very near future. Alongside the positive rise in interest levels, we have active discussions with existing occupiers throughout the warehouse to extend their leases. Encouragingly, occupiers are exploring opportunities to take expansion space within the campus. This continues to demonstrate the benefit of our relationship-driven approach to asset management. All retail units continue to be occupied, adding vibrancy to the campus.
The recent upgrade works undertaken at the cafe and the reception areas have also now completed. This investment significantly enhances the arrival experience for tenants and ensures the building continues to present as new. In closing, the key priority remains The Bower, where we are really encouraged by the rise in viewings, and we will seek to convert these into successful lettings. This will stabilize occupancy levels, strengthen the income profile of the asset, and enable capital recycling to be contemplated in due course. Across the development assets, we are in a period of significant activity, and we remain focused on maintaining program and budget discipline. As we approach PC on three of the schemes in 2026, our intention now is upon crystalizing value through translating the favorable market conditions into successful lettings. I want to hand back to Matthew.
I would now like to touch on some of the exciting new projects that we have coming through with Places for London. The first of these is an office project at 63 Charterhouse Street, which lies midway between our previous project at JJ Mack and at Kaleidoscope, opposite Smithfield. We have agreed terms for the acquisition of our share of the site on a subject planning basis, and our application was submitted last month. It will comprise 55,000 sq ft new build, partly behind a retained facade shown on the left in the picture, and benefits from a substantial roof terrace accessed via a rooftop pavilion. It is, of course, an area well known to us, and being so close to the Elizabeth Line, we are very confident of its market appeal.
The second opportunity is a site immediately north of White City Underground Station, adjacent to Imperial College's White City campus, where we are proposing a substantial student-led scheme. We expect to be working closely with Imperial College in considering our plans to maximize the opportunity. As you can see, we've already begun initial studies and intend to start planning discussions in the new year. Feasibility work is also underway on two other potential sites, at Parsons Green in Fulham and North Acton, which could also come forward in due course, most likely again for student or living-led uses. It is worth noting that whilst the wider PBSA sector has experienced some negative commentary of late, the schemes all benefit from having exceptional connectivity to London's leading academic institutions, and we will be appraising them using the latest market data.
One of the key benefits of these types of projects is that we have optionality to create equity-light structures through the forward funding models. I would now like to conclude the presentation by summarizing what we see as Helical's market opportunity. The decision to build into the supply-constrained market looks to be well-timed, and we're delivering the right product in the right submarkets. We are seeing encouraging occupier interest at our largest investment asset, and we see the potential to significantly increase our rental income. By being experienced in delivering complex schemes with multiple uses, we are able to be nimble and pivot to the best value use for any given opportunity. We have right-sized the capital base of the business, but will not be constrained if further resource is required to capitalize on the market opportunity.
Our long-term joint venture with Places for London provides access to highly connected development opportunities, which can be brought forward when market conditions are favorable. With the return of equity from the 100 New Bridge Street sale, we will look to deploy this capital into new opportunities with Places for London and with other joint venture partners. Helical is a dynamic and agile capital growth business, which, helped by its size and a disciplined approach to recycling equity, seeks to outperform through its development-focused activities, adopting joint venture and equity-light structures to drive enhanced returns. Thank you for listening, and we're happy to move to questions.
Morning, it's Max New at DutchNews . Thank you for the presentation. Just a couple of questions, particularly on those forward-looking things we're talking about there.
In terms of the structures, in terms of funding, how are you thinking about, will the PBSA be sort of forward-funded, similar to what you've done at Southwark, and what are the kind of restrictions within the JV on that? Maybe just a second higher-level question, just again relating to, obviously, you've got a very good track record in office development, but obviously, looking forward, it seems that there's quite a bit of PBSA there. Is this bit of a shift or more just kind of an opportunistic, this is what PFL want, and this is what we know we can deliver? Thanks.
I think the student market, while there is a forward-funding potential way to exit those projects, that's always going to be attractive to us because it makes our equity work very hard.
You can see the equity multiples that we're getting at Southwark, and if we can replicate that on a number of other schemes, we'd very much like to do so. We do see this as a market opportunity. We've identified a site at White City, which is right next to Imperial College's campus. It just seemed a natural opportunity, the one at North Acton, whether it's deliverable or not, we'll see. That, again, is next door to Imperial's facility, where they have a lot of student accommodation. I think it's purely opportunistic. First and foremost, we're a central London office developer. Farringdon is a key project going forward, but we're very much out there looking for new office projects to deliver into this supply-constrained market.
As I mentioned in my speech, I think the window is going to be open for longer than most people envisage. There is a lot of real estate in the wrong hands, and we can help those people deliver these projects. We are working with capital partners, but also partners, hopefully, with assets that we can bring our skill set to bear.
Thank you.
Morning, it is Matt Saperia from Peel Hunt. I guess both questions are really following on from Max. On the PBSA, I think you talked about working very closely with Imperial. Could that mean some sort of lease on a building that you deliver either at White City or North Acton, or is there some other potential relationship there? Back to offices, you are obviously very enthusiastic about the leasing momentum that you expect at The Bower.
Does that sort of give you renewed interest on new opportunities in that part of the market, particularly working with, as you said, Matthew, people that own the real estate and it's currently in the wrong hands?
Yeah, sorry, remind me of the first question. Relation to Imperial. I think ultimately they're probably taking out the nominations element of those schemes rather than taking a lease of the whole. I think their interest is there probably. You're on the central line at White City, very close to a lot of other leading academic institutions. I think the demand's going to be strong. Imperial, we had a meeting with Imperial earlier in the week. I mean, they've got a very strong demand for further accommodation. In terms of the letting interest at The Bower, we've got nine active negotiations ongoing, and we've got less floors than that available.
That does bode well. I think the whole sort of tech-driven demand there is very much AI-led in terms of the tech demand being bolstered by AI innovation. I think some of the tenants that we've got there are looking to expand. It's through that AI element of their business that is creating further demand for their product. Ultimately, when looking at opportunities, we always prefer undersupplied markets. There are certain areas of London that we're not looking hard at, but there are lots of areas that we are looking hard at. We're active in negotiations with owners of that real estate to see how we can help.
Equally, we'll be out there pursuing sites that come up onto the market with capital partners as well, because we want to make sure that we redeploy the equity that will be coming out of the 100 New Bridge Street sale. For us, it's all about finding the right opportunity, using that equity, structuring it the right way, exiting, and making sure that we recycle that equity. Any other questions? I don't think there's any questions online either. On behalf of James, Rob, and myself, thank you all for coming, but also a huge thank you to the Helical team for all of their hard work over the last few weeks and indeed a late night last night in order to get everything done. It is very much appreciated. Thank you all for coming.