This presentation will commence shortly.
Welcome to the presentation of Land Sec's 2025 half-year results. We continue to see clear, positive momentum across all parts of our business. Our primary focus is on delivering sustainable income and EPS growth, and we continue to do so effectively. I've been saying for some time that owning the right real estate has never been more important, and our performance over the past six months illustrates this yet again. Following our significant portfolio repositioning over recent years, our best-in-class office and major retail assets now make up over 90% of our income. Driven by the high quality of our market-leading platforms in both sectors, we have again delivered strong like-for-like net rental income growth and positive rental uplifts on relettings and renewals across both office and retail.
We see no signs that the strong customer demand for high-quality space, which underpins this positive trend, is abating, so this will remain the key driver of near-term income and EPS growth, with further asset rotation and residential expected to enhance this over the longer term. As a result, we are raising both our near-term and medium-term EPS outlook, which means we are well placed to deliver material shareholder value as we move to higher income, higher income growth, and lower cyclicality over time. To deliver our strategy, we set out nine key objectives back in February, and we are on track or ahead of plan on each of these. In the near term, most of our EPS growth will be driven by our current platforms, the assets we own today, so that is what the first five objectives are built on.
We continue to capture the growing reversionary potential in our office and retail portfolios and today raise our guidance for like-for-like income growth for this year to around 4%-5%. We have also raised our overhead cost savings target, which now implies a saving of more than GBP 10 million against financial year 2025 by next financial year. We are on track to deliver half of our three-year target to reduce our capital employed in pre-development assets by GBP 0.3 billion during year one, and we have sold one-third of our retail and leisure parks, whilst we are seeing an increasing number of acquisition opportunities in major retail coming to the market over the next 12-18 months.
Our four longer-term objectives are designed to ensure that in three to five years' time, our asset mix is such that we are still as confident about this outlook for income growth at that point as we are today. Again, progress on each is positive, as we have sold nearly GBP 300 million of offices over 12 months ahead of plan. We set a clear expectation for our income growth in retail at our recent capital markets day in September, and we have made good planning progress in residential. Still, as returns in retail continue to look most attractive, we do not plan any meaningful new development commitments over the next 12-18 months, and that means that our committed development exposure is set to come down to just GBP 200 million by mid-2026, and we expect this to remain meaningfully below the current GBP 1 billion level beyond that.
Our sharper focus on sustainable EPS growth as our primary financial objective that we set out earlier this year is providing real clarity of focus and clarity in decision-making, and we're seeing the benefits of this across all parts of the business. Across the whole portfolio, we have driven 5.2% growth in like-for-like income, and our occupancy is now at a decade high. We have had a highly active half-year in terms of shifting our portfolio mix, with the sale of GBP 644 million of assets, which generated limited or no return, and we're expecting further capital recycling in the second half. Meanwhile, our capital base remains solid, supported by continued growth in rental values, and we are committed to further improve this as we now target net debt to EBITDA of below seven times within the next two years. That's down from a previous target of below eight times.
All of this translated into a positive set of financial results for the half-year. Our strong like-for-like income growth and continued overhead cost savings meant that EPS was up 3.2%, whilst our dividend is up 2.2%. NTA per share was down slightly at 1.3%, but principally driven by the sale of nearly GBP 650 million of low-returning assets that I mentioned earlier. Aside from the finance lease income on Queen Anne's Mansions, the impact on EPS from these disposals was broadly neutral, and the cost to NTA about 1%. Our LTV is now 38.9%, and our net debt to EBITDA was up as expected, yet we expect this to come down to below seven times within the next two years as our current developments complete and lease up, and future development exposure reduces, whilst we expect LTV to reduce to below 35% over time.
Reflecting our positive performance, we raise our outlook for EPS growth for the full year and now expect this to be at the top end of our 2%-4% guidance range. This is before the disposal of Quam, which turns the residual finance lease on the asset from a receipt of income across 2025 and 2026 into an upfront capital receipt on completion of the sale next month. Although the amount of cash we receive is effectively the same, this reduces reported earnings for the year by GBP 7 million. In addition, we have also raised the outlook for our financial year 2030 EPS potential from around GBP 0.60 to GBP 0.62, and that's a 20% increase in our earnings growth objective, driven by higher growth in retail income, lower overhead costs, and lower development. Any upside from our planned medium-term investment in residential only becomes meaningful beyond financial year 2030.
We'll continue to pursue opportunities to further improve on this, but this now implies a compound annual growth in earnings per share of 4%-4.5%, adding further to our attractive existing income return. Now on to our operational review. Customers unquestionably remain focused on the best space in both office and retail, so driven by our high-quality operational platforms, our leasing performance remains market-leading, and our relative outperformance against the wider market continues to widen. Our occupancy is up to a decade high as our portfolio is effectively full, which is driving growing competition for space. This in turn is driving up rental values, so rental uplifts are rising, principally in retail, and like-for-like income growth is trending higher.
Reflecting this, we now expect like-for-like net rental income to grow around 4%-5% this year, up from our initial guidance of 3%-4%, and this established trend remains a key driver for our near-term EPS growth. Turning to offices in more detail, we continue to see growth in utilization rates, with turnstile tap-ins up 11% over the three months to October compared to the same period last year, even though TfL tube traffic was slightly down over the same period. Mirroring the experience we see across our own portfolio, the majority of active demand in the overall London market comes from businesses looking to increase space. As the availability of high-quality office space in locations with the right transport connectivity and attractive amenities is limited, this continues to drive rents higher, and that is not just for brand new developments, but also for existing high-quality assets.
We see the evidence of this in our 2.3 million sq ft estate in Victoria, which is 100% full, and we are now achieving rents on existing buildings in line with what just two years ago were record rents for a new development. All this is reflected in another set of market-leading operational results. Our office occupancy is now nearly 99%, and that is significantly ahead of the overall London market at 92%. Like-for-like income was up 6.8%, with uplifts on relettings and renewals of 6%, and we signed or enlisted hands on GBP 19 million of lettings, on average 9% ahead of ERV. This drove 3.1% ERV growth over the six months, which is well on track against our guidance of broadly similar full-year ERV growth to last year's 5%.
As our portfolio is now effectively full, capturing this market growth in like-for-like income is increasingly a function of lease events and will therefore be more balanced over time than it has been over the past six months. Yet our growing reversionary potential continues to support a positive outlook for like-for-like rental growth from here. This positive customer demand extends to our near-term office completions. Over the next nine months, we will see four new projects complete, including the repositioning of an existing asset to MIO Flex Office Space and a small forward purchase that we agreed back in 2021. Now, in total, we expect these projects to generate around GBP 58 million of net effective, i.e., P&L rent once let, with an associated incremental GBP 43 million of annualized interest expense.
The outlook for FY27 EPS is, of course, sensitive to the pace of lease-up of these schemes, but current engagement with prospective customers is encouraging as we have interest in the form of active negotiations, requests for proposals, or live engagement equating to an excess of 100% of space across our nearest term completions. Now, not all of that will translate into actual leasing, but in our FY27 EPS outlook, we currently assume around 40% of the two main schemes to be let by the time they complete and for all space to be let around 12 months post-completion, and we're comfortable that these assumptions reflect those current activity levels. In retail, brands continue to focus on the best locations as these provide the best access to consumer spend and the highest sales growth.
As the chart on the left shows here, the top 1%, 60% of all U.K. shopping destinations capture some 30% of all in-store retail spend, and this is where major brands focus their investment with, for example, around 90% of all Apple and Inditex stores in these locations, and it is also where close to 90% of our portfolio is focused. The quality of our assets and our platform is driving superior footfall, which in turn is driving substantially higher sales growth than the wider market. Indeed, whereas overall U.K. shopping center retailer sales have increased just 3% over the past few years, sales across our portfolio are up nearly 20%, and the gap in performance continues to widen.
This is why brands want to be in our locations, and as our portfolio is now nearly full, this is why rents continue to grow, and this is clearly reflected in our operational performance. Rental uplifts continue to trend higher, as shown here on the left, while occupancy is up 50 basis points year on year to almost 97%. This means that like-for-like income growth remains attractive at 5%, and we expect this to continue. We signed or enlisted hands on GBP 33 million of leases, on average 10% above ERV, which drove 2.2% growth in ERVs over the six months, comfortably on track with our expectation of similar growth for the full year to last year's 4%. As we set out at our capital markets event in Liverpool in September, the outlook for future income growth from retail is firmly positive.
Building on the unique data and insights that our market-leading U.K. platform provides, we continue to invest in creating experience-led places. The growth in footfall and sales that this then creates continues to attract leading brands, so alongside enhancing our social eating, dining, and leisure offer, this creates an environment and experience which in turn attracts higher footfall, higher sales, and so on. Our growth outlook is further enhanced by selective investment in highly accretive smaller CapEx projects, so combined with growing turnover income and commercialisation income, this is what underpins our target to deliver between 4.5% and 7% compound annual growth in net rental income from our existing retail platform over the next five years. Turning now to capital allocation, we continue to prioritise our capital allocation decisions based on this clear framework.
This looks at how our investment decisions contribute to income and EPS growth in the short term and how they shift our portfolio mix such that it can continue to deliver sustainable income and EPS growth for the longer term, underpinned at all times by our commitment to maintain a strong capital base. We continually monitor for any changes in risk and return prospects, but as things stand for the next 12-18 months, our priority is further investment into major retail destinations, given the high income returns and attractive income growth on offer, funded by further rotation out of lower return assets, including London office assets, as we have done over the past six months, and we do not plan to commit any meaningful capital to new development over that period, creating further investment capacity.
Based on the clarity that this framework provides, we've had a very active period of capital recycling. Our largest disposal was Queen Anne's Mansions, an asset which generated zero total return despite the high short-term income profile, as the valuation depreciates in line with every rent receipt until the end of the lease. Aside from the impact of turning the residual finance lease income into an upfront capital receipt, as I mentioned earlier, this has essentially no impact on earnings and de-risked the value of the site by transferring planning risk for a change of use to the buyer. We also sold two pre-development assets, which generated a negative income return, as well as four retail parks. Combined, these parks comprised around one-third of our portfolio of retail and leisure parks, and whilst they delivered a reasonable income return, income growth has been limited.
All in all, this means we have sold nearly GBP 650 million of assets, which generated limited or no return in just six months. This came at a cost to NTA of 1% when comparing sales to March book values, but will enhance our future income and EPS growth prospects, a clear example of our decisions being guided by a focus on EPS growth. We expect to remain active in terms of capital recycling in the second half. Investor interest in London has picked up from its low point, so whilst we already are ahead of plan in terms of office disposals, this provides us with an opportunity to recycle further capital to fund accretive investment in retail, where we are seeing more opportunities come to market, although not all of those will be opportunities for us.
We will, to some extent, be pragmatic on disposal values, as our principal focus should be less on NTA per se and more on ensuring that the NTA delivers growing cash flow, growing earnings, and growing dividends for our shareholders. In that respect, the roughly 200 basis points positive yield spread between office and retail, coupled with the superior income growth prospects for the latter, is meaningful, which is underlined by the excellent track record of the GBP 1 billion of retail acquisitions that we've made over the past few years, where in all cases, performance is tracking well ahead of our initial underwrite. We expect to see further opportunities like this to add to our market-leading platform, so this remains our key focus in the near term.
Whilst we do have a number of development projects that we could start in the near future, we currently see more attractive risk-adjusted returns elsewhere, so we're not planning to commit any meaningful capital to this. In London, we very much see the potential for continued rental growth, but as I explained earlier, our existing portfolio is benefiting from this trend as well, so taking into account the differing levels of risk, we see little upside in selling high-quality existing offices to fund the development of new ones, although we do see an opportunity to leverage our skill set by working with third-party capital to bring projects forward.
For residential development, the picture is a little more nuanced, partly because it would help shift our portfolio towards the higher income growth and lower cyclicality asset mix that we aim for, but also because we are seeing a shift in public sector policy, which could be supportive to returns. For example, with the recently announced reduction in affordable housing requirements and community infrastructure levy in London, which for our London projects could add between 50-75 basis points to our current net yields on cost of around 5%. Our near-term focus here is now on locking in this upside, so the outlook for returns could look different in 12-18 months' time. Until then, CapEx spend will be very carefully controlled and very limited.
Looking beyond the near term, we plan to move to structurally lower levels of development exposure over time in any event, as having large amounts of capital tied up in development for prolonged periods has a negative impact on our risk profile and on EPS growth, particularly so in a higher cost of capital environment. Part of this is reflected in our objective to release half of our roughly GBP 700 million capital employed in pre-development assets, where we're making very good progress, but we also plan to keep our own exposure to committed development closer to about half of the roughly GBP 1 billion that it has been in the past. This means that our balance sheet will have a greater proportion of income-generating assets in the future, which supports our objective to grow EPS in a sustainable way and means that our cash-based leverage measures will also improve.
With that, I will now hand you over to Vanessa Simms [CFO] (Land Securities Group plc) Simms [CFO] (Land Securities Group plc). Thank you, Mark, and good morning. We have had a positive start to the year with strong operational performance. Our occupancy is at a record high, we are leasing well ahead of passing rent, and our like-for-like income growth of 5.2% is well ahead of our full-year guidance. Reflecting this and the continued positive outlook from here, we have raised both our near-term EPS guidance and our medium-term EPS potential. For the half year, our strong like-for-like income growth and further reduction in overhead costs meant EPS was up 3.2%, supporting a 2.2% increase in the interim dividend. Our portfolio valuation was effectively stable, with NTA per share down slightly at GBP 8.63.
This was principally driven by our capital recycling, as we sold nearly GBP 650 million of assets, which generated limited or no return, which came at a cost to NTA of 1%. Our capital base remains robust with LTV at 38.9%, pro forma for the disposal since the end of September. Our net debt to EBITDA ticked up in line with the guidance that we set out in May, but we target this to reduce to below seven times within the next two years as our current on-site developments complete and they lease up, and we move to a structurally lower level of development exposure in the future. Now turning to income and EPRA Earnings, overall our net rental income was up GBP 15 million, supported by GBP 12 million like-for-like income growth.
This increase was despite the fact that the prior half year benefited from GBP 4 million increase in the recovery of previously provided bad debts, principally relating to a few assets where we brought the management in-house. Surrender receipts were low as well, just GBP 3 million, which means almost all of our rental income for the half year was regular recurring income as the benefit of one-off receipts was limited. Our focus on operational efficiency meant our gross to net margin improved by 130 basis points to 87.7%, and overhead costs were down GBP 2 million, with further reductions to come. Finance costs increased, as expected, principally relating to the increase in average borrowings following our acquisitions in the second half of last year and a small rise in our weighted average cost of debt. All combined, this meant EPRA Earnings were up GBP 6 million, or 3.2%.
This slide shows the movements of how this translates into growth in earnings per share. Our high-quality office and retail assets continue to benefit from strong customer demand and our strong operating platforms, and combined, these assets make up 90% of our income. In total, like-for-like income growth drove a 1.6 pence, or 6.4%, increase in earnings per share for the half year. Further overhead savings, which added 0.3 pence, offset the increase in like-for-like finance cost. Year-on-year movements in other items, which include lower surrender receipts and the bad debt recovery, reduced EPS by 0.9 pence. The overall benefit to EPS from both items is minimal now and is unlikely to have a meaningful impact in the future. The net impact from investment activity was also positive, with overall EPS up 3.2%.
As I will explain in more detail in a minute, the outlook for EPS from here remains positive. Our continued growth in income is further enhanced by our improving efficiency. Back in February, we set out a target to reduce overhead costs to less than GBP 65 million by financial year 2027, but we have now increased our target savings and we expect overhead costs next year to be in the low 60 millions. This reflects the benefits from our investments in data and technology, which I have talked about previously, and a cultural shift in our organization to sustain efficiency and maintain a structurally lower cost base going forward. We now expect overhead costs next year to be more than GBP 20 million lower than they were in financial year 2023, that is despite a GBP 9 million increase from wage costs and inflation.
In total, this marks a reduction in costs of over 25%. Turning to portfolio valuation, our successful leasing drove 2.5% growth in ERVs over the past six months, with 3.1% growth in office and 2.2% in retail, both well on track versus our guidance for the full year. The positive impact of ERV growth was partly offset by the continued wind down of the valuation of QAM, as the asset is nearing the end of its leases, so the MPV of the future income continues to reduce, and an increase in the business rates at Piccadilly Lights. Combined, these two factors reduced our overall portfolio valuation by 0.5%, but as we have agreed to sell QAM and the business rates review was the first since 2021, neither are expected to be continuing factors in the future. This means our overall portfolio valuation was effectively stable.
Our main focus is ensuring that we turn this value into growing cash flow, growing earnings, and growing dividends for shareholders. With that in mind, we said in February that we would be pragmatic about the value in terms of capital recycling, and the last six months have been an example of this. We sold GBP 650 million of assets, which generated little or no return, which came at a cost to NTA of 1% when comparing the proceeds to the book value. Ultimately, these disposals materially enhance our future income growth, yet this is the main reason our NTA was down 1.3%. This continues to be underpinned by our robust capital structure, which will strengthen further in the near future. Our average debt maturity remains long at 8.9 years, and we have no need to refinance any debt until 2027 at the earliest.
I mentioned in May that we expected our net debt to EBITDA to exceed eight times this year, as our two on-site office developments in London are nearing full investment, but they do not produce any income until they complete in the six- to nine-months' time. Combined with our pre-development assets, this means we currently have around GBP 1 billion of capital that's invested in assets that do not produce income, so we carry all the debt for this, but none of the EBITDA. As these projects complete and they lease up, and we move to a lower level of development exposure in the future, our net debt to EBITDA ratio will naturally fall. We are now targeting a net debt to EBITDA of below seven times, down from the previous target of below eight times, which we expect to achieve in the next two years.
We also expect our LTV to reduce below 35%, down from our current 38.9%. Our financial risk profile will therefore be even lower in the future, which further underpins the attraction of our growing income and EPS. The outlook for both of these is positive. Following the strong first half of the year, we have raised our guidance for like-for-like income growth for the full year to circa 4-5%, up from our initial guidance of 3-4%. Combined with further cost savings, this means we now expect EPS growth at the top end of our 2-4% guidance range that we provided in May. This is before the impact of the sale of QAM, which turns the residual finance lease income of this asset into a cash capital receipt on sale.
The overall amount of cash that we receive is effectively the same, but as we will now receive the cash when this sale completes next month, rather than as lease income over the rest of 2025 and 2026, this reduces EPRA earnings for this year by GBP 7 million. For next year, we expect like-for-like growth and cost savings to continue, yet the exact outturn in terms of EPS is also dependent on the pace at which we lease up our office developments. As Mark outlined earlier, we are seeing good engagement from potential customers, so we assume our two main projects on average to be 40% let by the time that they complete and leased up in full over the 12 months thereafter.
On this basis, we currently expect EPS growth for financial year 2027 to be broadly similar to financial year 2026, again before the impact of QAM, which reduces earnings for financial year 2027 by a further GBP 15 million. As the impact on EPS from the sale of QAM is beyond financial year 2027, it is minimal. This means we're on track for our medium-term EPS growth potential that we've outlined. Turning to that in more detail, back in February, we set out the potential for EPS to grow by around 20% to GBP 0.60 by financial year 2030, including the headwinds of QAM and the higher finance costs. We now raise this outlook to GBP 0.62, driven by higher income growth in retail, a further reduction in overhead costs, and a move to a lower level of development exposure.
Let me just take a moment to explain the moving parts in a bit more detail. Starting with last year's GBP 50.3 million, the sale of QAM, which I just explained, had an impact of just under GBP 0.03 million. By far, the biggest part of future growth is capturing the growing reversion in our existing portfolio. As you can see from our strong operational performance, we have a good track record of this with 5.2% like-for-like income growth for the first half across the whole portfolio, building on a 5% like-for-like growth that we reported last year. Our office portfolio is 12% reversionary, and our numbers here assume that we deliver like-for-like rental growth of 3-4% per annum, which is a more normalised level than over the last six months, given that our office portfolio is now effectively full.
At our capital markets day in September, we set out how we target to deliver income growth across our retail portfolio between 4.5%-7% over the next few years. Where rental uplifts are now up to 14%, turnover income is growing, and we're seeing the benefits of accretive CapEx. This outlook is based upon the midpoint of this range. The upside from further overhead savings I set out earlier equates to about GBP 1.5, and we have a good track record of delivering on this too. Our recent acquisitions and disposals, which include Liverpool One and the sale of our retail parks, have a net benefit of around GBP 0.01. As Mark mentioned, we are ahead of plan in terms of our objective to halve our capital employed in low and non-yielding pre-development assets, which will add around GBP 1.5 per share from interest cost savings.
The lease-up of near-term office completions will add around GBP 0.02. The upside from future asset rotation effectively reflects our plans to recycle more capital out of lower return assets and invest a further GBP 1 billion into major retail destinations. As our planned capital recycling out of offices into residential is broadly EPS neutral on this timeframe and will mostly benefit EPS growth beyond financial year 2030. Taking into account the expected rise in finance costs, all this equates to just over 4% annual growth. Delivering sustainable income and EPS growth will, over time, result in an attractive return on equity. With a strong capital base and attractive existing income return, we are well placed to drive substantial shareholder value. With that, I'll hand back to Mark. Thanks very much, Vanessa.
I'm now going to wrap up with a summary of what you can expect to see from us in the near future, where we see the differentiation opportunity for Land Sec before we then open for Q&A. The updated strategy that we set out back in February provides real clarity in terms of our key objectives and our primary target to deliver sustainable income and EPS growth for our shareholders. This means all of our priorities and decisions flow from this, creating a real clarity of focus across the business. For our best-in-class office platform, we are focused on capitalizing on the continued strong customer demand for space, and that's both for our near-term completions as well as across our existing estate.
This is similar to our market-leading retail platform, where we have robust plans to deliver 4.5%-7% growth in income over the next few years. As investment activity continues to pick up, we will look to rotate further capital out of offices into retail to capture the superior risk-adjusted returns. Meanwhile, in residential, we are focused on locking in the positive impact of strengthening public policy support, as this remains a highly attractive opportunity in the longer term, supported by strong growth fundamentals. We have now created a clear differentiation in our positioning. We have two unquestionably best-in-class, irreplaceable portfolios operated by two market-leading platforms of real scale and stature. Our primary focus on sustainable income and EPS growth as our principal performance measure provides absolute clarity across our entire business.
Our clear capital allocation framework means that we're clear-eyed and rational about investment decisions in pursuit of our primary financial objective, as reflected in our decision to significantly reduce our future development exposure, which underpins our move to an even stronger capital base with a net debt to EBITDA below 7 times. At the same time, the outlook for income growth remains firmly favorable. Strong customer demand for the best office and retail space continues to drive ERV growth, and our overall occupancy is at a decade high of 98%. Both our office and retail rents are highly reversionary, underpinning future income growth, which on an earnings level is supported by additional overhead savings. This provides us with the confidence to raise our guidance for FY 2026 earnings per share and increase the outlook for our financial year 2030 EPS potential, with dividends expected to grow alongside growth in EPS.
A strategy which is seeing us move to higher income and higher income growth and lower cyclicality over time, we are well positioned to deliver significant value for shareholders. Ladies and gentlemen, thank you very much for attending this morning and listening to our presentation. As usual, I'm now going to open for Q&A. We'll start here first in the room here, so please, if you have a question, raise your hand and wait for a microphone. We have also got people attending via webcast and conference call, and we'll go to both of those in turn as well. A couple of questions here at the front first, and then we'll go to a question at the back in the middle. Good morning, and thank you for taking my question. It's Maris Passio here from Bernstein.
If I may be turned to your longer-term plans in residential, I think you've quantified now kind of policy changes that will actually support your development yields within your kind of London schemes, for example. Would that uplift be enough for you to commit to those projects, or are you looking for more upside potential from other maybe cost savings, for example? We have indicated that we think, and we have to be clear at the moment, what we have is policy announcements from government and GLA together to reduce affordable housing and community infrastructure levy charges. We need to see how those things actually play through in the detail to individual projects. The indication we provided is if those land at a project level, that would be 50-75 basis points improvement.
That would take us to somewhere in the high fives as a yield on cost, which for a sector which has got structural growth and annual capturing of rental growth feels a pretty attractive starting point. It is a decision really for us to look at probably towards the end of 2026 when we have more clarity at a project level. We also have an understanding of what the other opportunities to deploy capital look like and what the relative risks and returns look like. It is unquestionably positive in terms of the direction of travel for policy support, but it will be a decision ultimately for later in 2026 when we can look at things with a greater degree of certainty. Okay, very clear. Thank you.
Also, just turning to retail, I think you've mentioned again you're expecting more potential investment opportunities to come to market, and that's where the focus is today and putting capital to work there. It feels also quite crowded with what we're seeing in the market, so are you confident on being able to allocate that capital and at the levels of returns you're previously targeting? We are, in short. There is more capital coming, starting to look at the market, but I think we have to remember a couple of things. It is a very operational market. I think having relationships with brands, having the operational expertise, having the data around consumer behavior are all critical to being able to successfully operate a shopping center. One of the reasons that we have deliberately targeted that sector is because we have a demonstrable capital advantage.
If you look at where we are today, our major retail portfolio has 40% more reach in terms of footfall than the next largest U.K. retail platform, and our plan is to build and grow on that. I think the bigger the lot sizes get, the more difficult it is for some of the other investors who might be coming into the space to capitalize that and to underwrite an exit. I think it's good news. You've got more investors looking at the sector in terms of validating what we see within it.
I do not think it is enough at this stage for us to be overly concerned about capital deployment, but it does mean one of the reasons we think it is a 12-18 month window, and one of the reasons we have accelerated office sales to rotate into that window is we do not want to do things over too long a period of time and find that the cap rate is 6.5 rather than 8 when we start to deploy capital. Jonathan. Thank you. Jonathan Carnay, Goldman Sachs. Three questions, if I may. First question is on retail ERV. When are we going to see these grow? You are obviously letting 10% ahead. How do you think this is going to evolve? First question. Second question, share buybacks were on your allocation charts. How are you thinking about this? Would you need more disposals to do share buybacks?
Are you considering those at this stage? Third question, you're obviously willing to redeploy in residential. We've talked about the economics. We've talked about the timeframe. Given the long timeframe for development as well, would student housing be something that you would consider instead of doing residential development? Thank you. Thank you. Just first on retail ERVs, I'll make a comment and then perhaps ask Vanessa Simms just to explain a little bit in the context of valuation. My personal view is that the ERVs that are put into valuation matrix are not particularly meaningful on the basis that we see our letting evidence is consistently so far ahead of those ERVs. I think there's been an issue over recent years of particular lettings being done and then a question of, does that provide rental evidence that can be ascribed to other demises within retail?
When occupancy was lower and there was a variety of different types of occupied demand, I think there were perhaps reasons to say, well, let's be a little bit more cautious on that. I think when you're 97% full and you're leasing, if you look at interest listed hands, double digits ahead, I think the evidence is clearer and clearer. For us, in terms of our decisions, we look at our leasing evidence and we look at our leasing pipeline and we base it on our conversations with retailers. Whether we find that ultimately finding its way into valuations is a sort of secondary point as far as we're concerned. We're looking at the cash on cash and how does it help us grow our earnings. Is that your impression that that's increasing? The letting that you're doing is increasing at better rates? Yes. Yeah.
I think you saw a chart in the chart which shows retailer sales across portfolio, which I think is really quite striking because at the end of the day, as a retailer, what are you trying to do? You want space that can help you grow your top line and grow your margin. To see 19% growth over three years across our portfolio in total retailer sales compared to a market movement of +3%, which is substantially below inflation over that period, shows that retailers are focusing on the best locations and that gap is widening. If the gap in terms of sales performance is widening, I think it follows that the room for rental values to grow is also widening. Is there anything, Vanessa, from a valuation point of view that you'd want to add?
I mean, no, I think the leases start to speak for themselves, do not they? When you are leasing 10% ahead of ERV, you have got 2.2% reflected in your valuation. And we continue to lease ahead of ERV and ahead of passing rent. I think that kind of shows that we are a bit more successful at leasing than probably the wider market. To your second question, we have quite deliberately included share buybacks on our capital allocation framework, and you should take from that that it is something that we as a board will continue to actively consider. You have seen the two axes of how we think about how we allocate capital. What does it do to our near-term earnings and how does it help our portfolio mix over time get to a position that we think can support long-term earnings growth?
At the moment, selling out of lower yielding assets, including offices, and deploying into retail is the most accretive use of our capital. We can buy at an ungeared yield, which is higher than the implied ungeared yield on our shares. That will definitely be where we would deploy. I think the second thing is then to make sure that we have a really solid balance sheet. We would always look at that quite cautiously. I think one of the things you have seen with us today is talk about effectively taking development down.
To me, as things stand at the moment, if we were just looking at, if we did not have those other options, we would look at share buyback as being preferable to development deployment, for example, because it would have the same effect in terms of portfolio mix, but it would have much more benefit on earnings accretion. It will remain on our framework, but we are very clear as things stand, deploying into retail is the most accretive use of our capital. How long do you wait? There is obviously a different execution risk in both products, right? There is a different execution risk. There is also a different scarcity value. No one is building any more of these shopping centers.
If we can add two or three further locations to what is already the leading platform by quite a margin in the U.K., those chances are not going to come around again. If we were to say, let's do something short-term in buying our stock and then not have the capital available in nine months' time to buy an asset which is not going to be on the market again for maybe another 10 years, I think that would be a real shame. Lastly, just on residential, you understand the timeframe. You understand the direction of travel on build to rent. That is where we think there is opportunity over the medium to long term to leverage our skill set. We considered student housing as one of a number of living sectors when we looked at our strategy last year before the February announcement.
I think it needs real expertise. I think there are some interesting questions about what the long-term growth characteristics of that sector look like. It is not something that we would plan to deploy capital into. Thank you. I might just, if I may, in the interest of the, oh no, I have got my question at the back. Sorry. I know you have been, there is a question at the back we will go to first. I think there are a couple more in the second row here. Hi. Thanks for the presentation, Ollie Woodall, Kolytics. This might have some overlap to the previous question, but given the 1% pool of retail assets that you have said you are interested in shopping in, you mentioned there is maybe about 30 centers and you obviously have not made any acquisitions yet since the CMD in February.
If no assets do come to market available at the price or yield that you like, how does that kind of shift your larger strategy in terms of capital deployment? Yeah, I mean, I think it's a largely hypothetical question because I think those assets will come forward and they will come forward at returns that will make sense for us. The reason we have that capital allocation framework is to make sure that we keep that discipline. I think if we got to a position where in that hypothetical scenario, you had earnings accretion that was meaningfully below the alternative of buying our own stock, then we would need to reassess at that point in time.
As things stand, I think you've still got quite a lot of centers that are owned by investors either individually or collectively that are not natural long-term holders of these assets. As liquidity improves, I think one of the benefits that has is it will encourage some of those existing owners to bring assets forward to market that perhaps were not available to invest in previously. I think we'll see the market balance out. As I said to the earlier question, I mean, the operational component of this, plus I think on some of these assets, the CapEx requirements on some of this, I think they will be, I think, reasons for investors without the real expertise in this sector to be a little bit cautious. That's clear. Thank you.
Just quickly on the GBP 200 million of accretive CapEx, is there opportunity to increase that slightly in the interim if the opportunity is slightly delayed? There might be. I think there's also hopefully opportunity to try and deliver the same for less, which will probably be our primary focus. If we can get the benefit of the return from that GBP 200 million by only spending GBP 180 million, we'd rather do that. I think there will always be investment opportunities across the portfolio, but we're really focused on the cash on cash yield we can get from those things. Thank you. Thank you. There's a question. We'll start in the middle of the row and then work that way if that's okay. Bjorn Zietzmann from KBW. You mentioned increasing opportunities in retail for acquisition. Can you give us a sense of the composition of those opportunities?
Are they shopping centers, retail parks, elsewhere? Yeah. The comment was intended really to talk about shopping centers, which is the only sort of segment that we would look at. Within that, there will be some that would not be of interest to us. They do not have the dominance in the catchment. They are not in a strong enough catchment. We do not see the opportunity to leverage our platform sufficiently. It will be the larger and more dominant of those that would be the likely area that we would look towards. Just on capital recycling, can you give us a sense of the pace, quantum, and timing as well as composition of any disposals? It will be capital recycling for the first year. We will use disposals to fund acquisitions. I think that is the first important thing to say.
I think you can judge on the basis that if we're hoping to invest into retail meaningfully on a 12- to 18-month view, that will need to be funded from disposals over a similar timeframe. We've said lower yielding assets, including London offices. Looking at the composition of the portfolio, that will need to involve ongoing disposals of London office assets as we've signaled. Morning. It's Rob Jones from BNP Paribas. This might be a question that's better offline, but we'll try now to start with. Sounds like fun. I was excited. Rob, is it? I was excited when I wrote the question. Put it that way. I don't know how you can get to your FY2027 EPS guidance that you published yesterday, which is GBP 0.533 on your website.
The reason why I can't get there, but you'll be able to help me, is for 2025, obviously you did 50.3p. You've then got, let's say, 4% earnings growth for this year to March 2026, which adds, say, 2p a share to 52.3. I've then got to strip out 0.9p for Queen Anne's Mansions. That gets me to 51.4 roughly for FY2026. I then look forward to FY2027. We've got, as you said, the second impact of Queen Anne's Mansions of GBP 15 million, call that 2p a share. So my 52.3 for March 2026 goes to 49, or sorry, 51.4 goes to 49.4 ex Queen Anne's Mansions in FY2027. You need to obviously then grow income ex Queen Anne's Mansions from that 49.4 to the 53.3 that you've currently got as your analyst consensus on your website.
That's an 8% growth for 2027. Let's say we do 4%. Does that mean that consensus is 4% too high? What have I missed? I've definitely missed something. I can't imagine why you thought that might be better offline. Perhaps I might just ask Vanessa to come. There might be a couple of big moving parts in that. Obviously, you can come back to me on Bjorn, honestly. We wouldn't, the number wouldn't be out there if we didn't have the component parts. Or analysts are 4% too high. That's the other option. If anything, just headlines. I'm happy to have a quick, a bit more detailed chart offline, but effectively you've got the continuation of like-for-like growth from leasing performance, cost reductions.
We do not have any major refinancing coming through in that year, so pretty stable position. There will then be the development completions, which we have had, they come from really from now over the next 12 months or so. We get some, we are assuming in there a bit of leasing performance and then you offset the QAM movement. You do not think that 53.3 FY27 today is too high? Is that fair? I will have a quick look at that if you like afterwards. All right, cool. All right, thanks very much. I have not actually seen what they are specifically talking about, so I think. No worries. Thank you, Rob. Morning. John Carhill from Stifel. Just one question, please. As you say, one of your differentiating factors now is your risk profile is vastly reduced from what it once was.
Leverage is going to be lower still, reducing the pace of developments. In isolation, lower risk, of course, is a positive. There must be a degree to which that slows down the rate at which you get to your 2030 diversified portfolio. Should we think of this as it's the executive's view that on a risk-adjusted basis, these are the best returns, or is it that the shareholders via the board are saying, yes, we want you to get where you're going with the resilient developments, but actually we're just going to put the brakes on you a little bit? Yeah, it's very much a, I mean, the capital allocation framework that we set out on the chart there, with the exception of adding in share buyback, is no different to the capital allocation framework that we set out with the strategy in February.
If you look at the objectives that we set, the short term and the long term, the short term included invest GBP 1 billion in retail. The longer term was to rotate office into residential. There is no change to that strategy. I think what we might reflect on post-February is that there is a lot of focus on residential and perhaps say we needed to do a better job on explaining the timescales and that we were sharing a five-year view of how we shift the portfolio mix over time. I think that got conflated with what drives near-term earnings per share guidance. What we have sought to do since then, and particularly with today, is show, look, the earnings guidance near-term is, of course, driven by today's portfolio. We are very, very happy with the quality of that.
We think retail continues to be the best place for us to deploy capital and leverage our expertise. We still think the rotation into residential is the right thing to do, and we still think the timeframe for that is medium to long term. No change in that respect. I think just trying to be a little bit sharper on what's happening over the next one to two years, which tends to be, I might even be giving them a bit more, giving markets a little bit more credit. That tends to be the sort of timeframe that markets are more focused on. I think that's what we've sought to do. Thank you. If I may just pass to Paul, it's for convenience, and then we'll come to Tom at the front. Paul May from Barclays. Three questions from me.
Given the losses on disposals on non-income producing sites, have you proactively written those down in the first half ahead of expected sales further forward, or should we expect further losses on those as you're being pragmatic? Second one, if recent press comments are correct, sorry, apologies, are you disappointed at having lost out on Marylebone High Street? Just get some color there. And then final one, as you know, I applaud the earnings-based strategy. I think it'd be a shame if the market doesn't wake up to it and see the earnings growth potential because I think it brings to question the whole European listed sector. I just wondered what more do you think you could do to convince people, and what pushback do you get from investors on that? Sure. So Vanessa, the first question around sort of, I suppose, where valuations sit relative to ongoing transaction activity?
Yeah, the disposal losses that we saw in the first half really related, the majority of them, to some development site sales where we're seeing that developers are really looking for a higher IRR from development activity than probably in the past they have. I think that it's quite specific to those sort of assets. We have reflected that through into our valuation for the first half of the September valuation. We've been through the discussions that we have, as you would expect, with all the valuers. We believe that our valuation now properly reflects what activity we're seeing and experiencing in the market. We've been pretty active, as you can tell from having sold almost GBP 650 million over that period. We've been pretty active. I'm sat here pretty confident that our valuation at this point reflects where we see the market position.
Of course, we have reasonable visibility on our own capital recycling plans and are comfortable in that respect as well. Your question on Marylebone High Street, you will not be surprised, I will not sort of comment on specifics. I guess what I will say is that there are a number of assets, including Marylebone High Street, that are being marketed. In how we look at those assets, we will look at what is the opportunity to leverage our platform, bring brands in that perhaps are not there, reposition assets through investment using consumer data to see what might be missing or what might drive performance. What do we think the CapEx bill is likely to be in order to effect those changes or to deal with backlog maintenance, which will be a feature on a lot of these assets. That is what we will always look at.
I think you can be confident that anything we do acquire, we will have answered those questions in the positive. There will be a decent number of assets we look at that we either will not spend much time on at all because we do not feel they are right, or we might spend a fair bit of time on but struggle to get ourselves comfortable at the sort of levels others may end up being. Again, I think we are comfortable. We will get to our capital deployment targets with what we can see on the market at the moment. I think with respect to earnings growth and what more can we do, I mean, we post our strategy, had a considerable number of meetings both then and through results cycles and over the summer and into the autumn. We engage regularly with all of our shareholders.
We certainly have had a pretty consistent message back that earnings growth and confidence and credibility in that earnings growth trajectory is what matters most to generalist investors, if that is the right term. Certainly, and you will understand this better than me, but the dynamic of investing in our sector is very different to where it was 10 years ago in terms of specialists versus generalists. I think it is the wider equity markets that we need to be able to talk to in a convincing way of how we are creating value for them.
I think that's a far more convincing story to be able to point in a quite granular way to how we're growing earnings and how you can form a view as an investor on the deliverability or otherwise of the different components of our earnings bridge to 2030 than pointing to a valuation and an NTA where I think there's a certainly for investors that look globally, NTA is not necessarily a feature in other markets. I think we're moving in the right direction. We certainly wouldn't be doing it if we didn't feel that. We've got to then deliver and execute on it. The more we do that, the more confident markets should become. Sorry, just on that last bit in terms of that, it's a bit with Rob's question as well, that consistency of earnings delivery into next year.
I suppose what would be good to provide comfort for investors that you do have that into next year, given the headwinds, as Rob mentioned. Also, are there any acquisitions baked into that FY27 earnings assumption? We have put the FY27 earnings number up there. I think within that, we will assume there is a small amount of recycling based on what we can see today, but not a significant amount in terms of undue reliance on achieving massive amounts of recycling to achieve a number with respect to earnings next year. The biggest sort of sensitivity is the pace of development leasing. We provided some color in the statement on what a plus minus 10% on the average occupancy on those assets through the year would do to earnings. I think that is the one that we are probably most focused on. Cool. Thank you.
Tom on the front here. Thanks. Morning. It's Tom Musson at Berenberg. Sorry, I just wonder if I can pin you down slightly on share buybacks. I appreciate what you're saying, where you see best use of capital today. Markets are volatile, especially today. Just wondering, at what share price or perhaps what earnings yield does it suddenly make sense for you to buy back shares? Are we close or still some way away? I mean, we don't have a precise number in mind. I think it would probably be unwise to have that. I would point back to my earlier answer around the scarcity of the alternative. I think buying major retail is much less about just a comparison of the spot yield and much more about what does that do to the long-term earnings potential of the business, the quality of the underlying portfolio.
Comparing a sort of a spot rate to a genuinely scarce asset, I think, is something that we would be cautious about doing. At the moment, the cap rates that we believe we can invest in in major retail would still make that very clearly the right place to deploy capital. I think there is an opportunity to add some scarce assets to an already market-leading platform on a 12-18 month view. That has got to be the right thing to do for the long-term value of the business. Thank you. Are there any other questions in the room? Otherwise, I am going to go to the conference call. Okay, we will go to the call. I think there are a couple of questions on the call, so let me open up to the operator on the call. Thank you.
Your first telephone question for today comes from the line of Zachary Gauge from UBS. Please go ahead. Can you hear me okay? I can. Morning. Morning, Zach. Okay. Perfect. Yeah, morning. Yeah, sorry, I'm not there in person. Yeah, just three questions for me, hopefully quite quick. Could you disclose what the discount to book was specifically on the GBP 72 million of development site sales that you had in the first six months? The second one is on the Oval office acquisition. Just interested to see how that fits into your new strategy, particularly around, obviously, the office holdings and the location being close to South Bank. And lastly, on the current developments, based on my calculations, when you strip out CapEx, PIMCO Square dropped by about 5% in value over the period. Just interested to see what was driving that.
Also, if you could touch on why 30 High, which 12 months ago was guided to be completing October 2025, now has a June 2026 completion date. Thank you. Zach, I have written down your questions, and I have written the first one down so badly I cannot read my writing. Sorry. What was your first question? The discount to book on the GBP 72 million. Oh, right. Thank you. On the first one, we do not disclose the specific sort of deal by deal of achievements relative to book. I think what Vanessa mentioned earlier with respect to sales is that where we have been selling development sites, there has tended to be in the market a higher IRR requirement than had previously been the case and that valuations were reflecting.
What I would say, though, is things are pretty sensitive, and we've got examples of other sites where we're talking to partners that are quite a different outcome to what we saw in the first half, including ones that would point to positive outcomes relative to book. It is very sensitive, but it is a relatively small part of the portfolio that will, I think, be largely sort of taken care of during the current financial year. The Oval acquisition dates back to 2021. Very good quality assets just delivered within the last month or so, as you'll see from the schedule. Good occupier demand.
The thinking of that at the time was looking for assets with a good value entry point in terms of price, perhaps slightly different in terms of local amenity playing to what was quite a different occupier dynamic back in sort of COVID era times. We looked at a relatively small acquisition to test that. I think we're pretty happy with the way the occupier demand is shaping up on that particular asset. As things have moved forward now, we've set out very clear priorities of where we're looking to allocate capital. I think you understand where office investment sits in that context. 30 High, I'll just talk to briefly and then ask Vanessa just on the PIMBA Square sort of movements.
Thirty High, yes, I mean, existing building where the contractors have some challenges within the existing building as a refurb, which has pushed the program back a little bit. We are indicating around middle of next year, there is a recovery program opportunity which could outperform that. It is important for us to set a clear date, particularly as we are starting to see quite significant incoming occupier demand, and there are quite short lead times on the sort of people that are looking to take, say, 10,000-11,000 sq ft floor plates. We need to have a date that we are very confident committing to for those occupiers. We have moved that guided completion date back for those reasons. Timber Square, yes, so Timber Square as an asset, actually, the valuation, because it is pretty close to completion, has transitioned to a cost-to-complete basis.
Looking at the end asset with the cost to go. Then it is therefore valued at the moment as an asset that is 100% vacant because we have not actually signed any of the leases at this stage. As we go throughout the remainder of the next six months until that completes, on the basis we are expecting to lease that asset, we will get to a position whereby the yield will shift to reflect that as a leased asset rather than a vacant office with cost to go. It is just the nuance in the way that the valuations on developments transition over the life of development. A point-in-time factor. Yeah. It is not necessarily any change to any major assumptions on that front. Okay. Thanks. Very clear. Is that okay, Zach? Yep. Yep. Cool. Thank you.
I think we may have at least one more question on the conference call. The next question comes from the line of Adam Shopton from Green Street. Please go ahead. Hi, morning all. Apologies as well. I'm not there in person. Just one from me on the thinking around residential development returns. I know you've had one or two questions already, but I'm going to preface the question by saying I realize there's a political dimension to the communication on this, but hopefully we can put that to one side. If I look back to the February capital markets day, you were pointing to net yield on cost of 5%, so 10-12% IRRs, and described that as attractive. Today, swap rates are a little lower, your share price is broadly the same, and you're saying a 5% net yield cost is not sufficient.
Can you explain why that stance has changed or correct me if my sort of February inference was wrong or not compared to capital cycles? More broadly, can you explain how you think about what would be a sufficient yield on cost or IRR for you to commit more capital to res in the medium term? Yeah, certainly. I think six months on, looking at what's happened across the wider market, not just residential, and I would include our development sales and what people are looking for in office development, etc., to the earlier question within this. I think our view on IRRs would probably be point to something a little bit higher than 10-12% being where we need to be.
I think we would also take a slightly more cautious view on exit cap rates, which, of course, has a fairly sensitive impact on IRRs. We are now suggesting, and as I stressed earlier, this is subject to all of this flowing through to the actual projects in detail, so it needs to be very heavily caveated. At a headline level, the reduction in affordable, the reduction in SIL, looks like it could add 50-75 basis points. That would take us into the high fives on a yield on cost basis, which, with sensible cap rate assumptions, I think delivers a better, a decent increase on that 10-12 guide on IRR.
I think where we are now, and I think this would also be consistent with a lot of the shareholder discussions we had post-strategy, is pointing to a need for IRRs to be higher than that 10-12% range. Yields on cost, which we think, frankly, is the most important measure because that's what ultimately is going to flow through to our earnings and earnings growth longer term. High fives feels a more sensible level at which to be seeking to underwrite these. Okay. Understood. Thanks. And then just on the additional yield that might come from the policy changes, is your expectation or is your hope that those become permanent rather than temporary or sort of time-limited measures, which I think is what we're looking at at the moment? I mean, at the moment, they're positioned as acceleration measures.
One would hope that if those acceleration measures achieve the desired acceleration, there's a better chance of them being permanent than if they don't. Certainly, from our point of view, without those changes, we'd have been unable to take any residential projects forward. Okay. Thank you. Thank you, Adam. Other questions on the conference call line? The next question comes from the line of Paul Goury from Citi. Please go ahead. Hi, all. Can you hear me okay? We can. Morning, Paul. Perfect. Morning, everyone. Yeah, just a quick follow-on from Rob Jones's question. I'm looking at slide 28, and basically, the FY27 outlook for earnings looks flat against FY26. So I'm just trying to understand, is that correct? Is that the right interpretation? Flat year on year, 27 versus 26. Is that before the QAM adjustments? That's after the QAM. After the QAM.
Sorry, I haven't got it in front of me. I'm just looking at the—sorry, yeah, it's the purple bars, the deep purple, taking QAM fully into account. It looks like it's flat year on year. From Vanessa's comments, it sounded flat year on year. Take out the finance lease. If you take the finance lease income from QAM out, because that basically we're receiving that as a cash receipt in the next month as opposed to through the finance lease income that comes through in those two years. If you look at the underlying portfolio, how that performs, that will be the growth. The guidance we've given is the 2-4%. If you net out the QAM, that's where it is, which I think goes back to Rob's point earlier, when I just had a quick look.
I think what's happened is since we've announced the sale of QAM, not all of the analysts out there have adjusted for the impact of QAM, even though the announcement, we were quite specific on the impact over those financial years. I think that's where the difference is to the roll-up of the consensus that sits out there. Yeah. Okay. That's good. With all the moving parts, when you actually look at the reported, it would be flat. Whether you look at the underlying performance of the portfolio, it'd be the 2-4%. Yeah. Got it. Very clear. Okay. Thank you. That was it. Thanks, Paul. Any more conference call questions? No, I think we're—it sounds like we've either cut them off or there aren't any more questions. We'll head to the webcast. A couple of or a few questions coming down on the webcast.
First, with the business plan seemingly on track, was the credit rating downgrade a surprise and are corrective measures called for from Mike Prue? Vanessa, just thoughts on credit? Yeah, happy to talk about that. We had a Fitch rating that was reflective of last financial year's position. That rating was reflecting the following the acquisition of Liverpool One. Our debt was slightly higher, as we talked about in our results being slightly higher. It is worth noting that S&P have just reaffirmed their rating, I think a couple of weeks ago, of AA rating, so still a very high investment-grade rating. Overall, we still have one of the highest—we are the highest—have the highest investment-grade rating in the sector. There is no need for necessarily corrective measures.
Our plan that we have in place at the moment, as we talked about with net debt to EBITDA, improving and naturally improving positions us well and our capital operating guidelines position us well and commensurate with high investment-grade rating. Our plans for the future put us in a good position. Thank you. A couple of questions from Alan Clifford. On future London office development, talked about partnering with third parties to leverage platform. What capacity do you have for this and how capital light is this likely to be?
I mean, we have at the moment, following the two development site disposals that we have already made, we have two further city-based assets plus an additional one in the South Bank, all of which are well advanced in terms of being able to commit capital to, and where we are in active discussions on how we best take those projects forward. That is what gives us the confidence to make reference within the statement here to opportunities to work with third-party capital. If you take that in alongside our comment within the results to not planning to commit any significant capital to develop ourselves on a 12- to 18-month view, I think you can infer from that that these would be very capital-light options should we choose to take them forward.
With regards to the wait-and-see comment on resi, how does this impact progress on the currently owned schemes with planning consent? That has no bearing at all on what we need to do on those, such as the detail required to take forward schemes from a resolution to grant planning, plus deal with the additional requirements of the building safety regulator whilst finalizing detailed designs, but more moving on site. Even if we wanted to go as fast as we possibly could on those residential projects, it would be mid-2027 with a following wind before we could put a spade in the ground on any of those. At the moment, there is no bearing.
That gives us the opportunity, without spending significant amounts of capital because we have the consents in place, to now work through the viability of those projects by mid-next year to then be able to make the decisions I talked about across the second half of 2026 without having any bearing on the delivery timelines of the projects we are looking at. I think that is the last of the questions. All that leaves me to do is to thank you all for taking the time to either attend here in person or to dial into the call. We look forward to further discussions with you over the coming few days and weeks. Thank you very much. This presentation has now ended.