List of definitions

Net assets per share or net asset value (NAV)

Equity shareholders’ funds divided by the number of ordinary shares in issue at the balance sheet date.

Adjusted net asset value per share

NAV adjusted to exclude deferred tax on the property revaluation surplus and fair value adjustments to the carrying value of assets and liabilities.

European Public Real Estate Association (EPRA)

A not-for-profit association with a membership of Europe’s leading property companies, investors and consultants which strives to establish best practices in accounting, reporting and corporate governance and to provide high-quality information to investors.

Recurring net property income

Net property income excluding development income.

Recurring profit before taxation

Profit before tax excluding development income, the revaluation movement in investment properties and financial instruments and the profit on disposal of investment properties.

Adjusted recurring profit before taxation

Recurring profit before taxation adjusted for items which are unlikely to be repeated to the same level in the future, and are excluded to show the underlying trend.

Earnings per share (EPS)

Profit for the year attributable to equity shareholders divided by the weighted average number of ordinary shares in issue during the financial year.

Recurring earnings per share

Earnings per share adjusted to exclude the after tax effect of non-recurring items, profits or losses on sales of properties and investments, and the fair value adjustments to the carrying value of assets and liabilities.

Diluted earnings per share

Earnings per share adjusted to include the dilutive effects of potential shares issuable under the group’s share option schemes. However, a loss per share cannot be reduced by dilution in accordance with IAS 33, Earnings per Share.

Property income distribution (PID)

Dividends from profits of the group’s tax-exempt property rental business under the REIT regulations.

Non PID

Dividends from profits of the group’s taxable residual business.

Net debt

Borrowings plus bank overdraft and loans less cash and cash equivalents.

Balance sheet gearing

Net debt divided by net assets.

Profit and loss gearing/Interest cover ratio (ICR)

Gross property income, excluding surrender premiums, less ground rent divided by interest payable on borrowings less interest receivable. This is similar to the group’s most commonly used interest cover ratio covenant.

Property gearing/Loan-to-value ratio (LTV)

The nominal value of borrowed funds divided by the fair value of investment property. This is equivalent to the loan-to-value calculations used in the group’s bank covenants.

Ground rent

The rent payable by the group for its leasehold properties. Under IFRS, these leases are treated as finance leases and the cost allocated between interest payable and property outgoings.

Building Research Establishment Environmental Assessment Method (BREEAM)

The BREEAM rating assesses the operational and the embodied environmental impacts of individual buildings. The ratings are Pass, Good, Very Good, Excellent and Outstanding.

IPD Central London Offices Index

An index, compiled by Investment Property Databank Limited, of the central and inner London offices in their quarterly valued universe.

Capital return

The annual valuation movement arising on the group’s portfolio expressed as a percentage return on the valuation at the beginning of the year adjusted for acquisitions and capital expenditure.

Total return

The movement in adjusted net asset value per share between the beginning and the end of each financial year plus the dividend per share paid during the year, expressed as a percentage of the adjusted net asset value per share at the beginning of the year.

Total property return

The annual capital appreciation, net of capital expenditure, plus the net annual rental income received, expressed as a percentage of capital employed (property value at the beginning of the year plus capital expenditure).

Total shareholder return

The growth in the ordinary share price as quoted on the London Stock Exchange plus dividends per share received for the period, expressed as a percentage of the share price at the beginning of the year.

Rent roll

The annualised contracted rental income, net of ground rents.

Initial yield

The rent roll generated by a property or by the portfolio as a whole expressed as a percentage of its valuation. Where applicable, the valuation is adjusted to include any capital expenditure required for scheme completion.

True equivalent yield

The constant capitalisation rate which, if applied to all cash flows from the portfolio, including current rent, reversions to valuers’ estimated rental value and such items as voids and expenditures, equates to the valuation having taken into account notional purchasers’ costs. Assumes rent is received quarterly in advance.

Reversionary yield

The anticipated yield based upon the valuers’ estimated rental value of a property or portfolio, expressed as a percentage of its valuation. Where applicable, the valuation is adjusted to include any capital expenditure required for scheme completion.

Reversion

The reversion is the difference between the rent roll of a property or portfolio and the rental value as estimated by the group’s external valuers. The reversion is derived from contractual rental increases, rent reviews, lease renewals and the letting of vacant space.

Underlying portfolio

Properties that have been held for the whole of the financial year.

Vacancy rate

The rental value of vacant space in a property or portfolio, that is immediately available for occupation, expressed as a percentage of the estimated rental value.