The group has adopted IFRS 8, Operating Segments with effect from 1st January 2009. IFRS 8 requires operating segments to be identified on the basis of internal financial reports about components of the group that are regularly reviewed by the chief operating decision maker (which in the group’s case is its executive board comprising the six executive directors) in order to allocate resources to the segments and to assess their performance.

The internal financial reports received by the group’s executive board contain financial information at a group level as a whole and there are no reconciling items between the results contained in these reports and the amounts reported in the financial statements. These internal financial reports include the IFRS figures but also report the non-IFRS figures for recurring earnings per share, adjusted net asset value and recurring profit. Reconciliations of each of these figures to their statutory equivalents are detailed in note 16, note 34 and note 35 respectively. Additionally, information is provided to the executive board showing gross property income and investment property valuation by individual property. Therefore, for the purposes of IFRS 8, each individual property is considered to be a separate operating segment in that its performance is monitored individually.

The group’s investment property portfolio comprises 91% offices* by value. The directors consider that these properties have similar types of tenants, they demonstrate similar long-term financial performance and have similar economic characteristics. Therefore, these individual properties have been aggregated into a single operating segment. The remaining 9% represents a mixture of retail, hotel, residential and light industrial properties, as well as land, each of which is de minimis in its own right. Accordingly, the directors are of the view that it is appropriate to disclose two reportable segments, ‘offices’ and ‘other’, by reference to gross property income and investment property value.

* Note: some offices have an ancillary element such as retail or residential.

All of the group’s investment properties are based in the UK. The group also owns a joint venture in Prague which represents 0.2% of the group’s assets (see note 42). No geographical grouping is contained in any of the internal financial reports provided to the group’s executive board. Therefore, no geographical segmental analysis is required by IFRS 8. However, the following analysis is included to provide users with additional information regarding the geographical areas contained in the business review.