Tritax Big Box Reit Stock

Good morning, and welcome to our results presentation for the first six months of 2026. I'm Colin Godfrey, CEO of Tritax Big Box. As usual, I will kick off with our key messages before Frankie, our CFO, provides an update on our financial and operational performance. I'll then outline the substantial strategic progress that we've made in the period before opening the lines for Q&A.

The key message that I want to deliver this morning is that we're exceptionally well positioned to take advantage of the significant opportunities inherent within our business and the broader market. We continue to deliver against our key growth milestones and with a near doubling of secured power for our data center pipeline, we're increasing our EPS growth ambition to 65% by 2031 or sooner from 50% by 2030.

The first half of 2026 has been defined by strong execution and a series of important strategic milestones across the business. Active asset management and capture of rental reversion has delivered strong income growth, and we've been doing this at pace. Supported by a successful disposal program, we've recycled capital from lower returning assets to generate superior risk-adjusted returns and provide a key source of funding flexibility.

Since January 2023, we have redeployed more than GBP 1 billion into higher-returning opportunities. In development, our agile platform continues to create future income opportunities at attractive yields on cost, allowing us to align development activity with market conditions and allocate capital selectively.

Just 18 months after entering the data center sector, we have already made meaningful capital value development gains, rental income and earnings growth as schemes are delivered.

Together, these achievements have delivered another period of strong financial performance with growth in net rental income, earnings and dividends, which Frankie will cover in more detail shortly. They demonstrate the earnings power of our platform and the significant opportunity ahead as we continue to progress towards our long-term earnings ambition.

Yesterday afternoon, we announced the exciting news that we have secured a further 235 megawatts of power for our data center pipeline. This is another major milestone, building on successful granting of planning permission at Manor Farm in the period. This incremental power is phased for delivery in 2030 to 2031 and nearly doubles our secured power to 507 megawatts.

It is connected to two additional schemes, which have the potential to deliver exceptional risk-adjusted returns with a yield on costs of between 9% and 11% and a profit on cost in excess of 50%. The proposed equity issue unlocks the next wave of the data center pipeline, securing the early-stage and longer-term CapEx requirements of these two schemes, complementing our ongoing Capital Recycling Program.

These two new schemes give us the potential to nearly double our expected data center rental income from the GBP 58 million that we announced for the Manor Farm and Chelmsford projects to between GBP 107 million and GBP 119 million. It is this additional opportunity, which gives us the confidence to increase our adjusted EPS growth ambition to 65% by 2031 or sooner, up from 50% by 2030.

Given commercial sensitivities and as was the case with Chelmsford, we are not disclosing the precise location of these two new schemes. However, they are both in the prime Greater London Availability Zones. This is further evidence that our power-first approach is working, creating exciting prospects in data centers with the potential to deliver exceptional risk-adjusted returns across a current total opportunity of over 1 gigawatt of potential power capacity.

With that, I'll hand over to Frankie to cover the financial and operational review. Frankie?

Thank you, Colin, and good morning, everyone. This first half reflects another strong period of disciplined execution across the business with consistent delivery across asset management, capital recycling and progress with our development opportunities. This has translated into strong earnings growth, along with creating significant future opportunities to deliver value to shareholders.

Starting with the headlines. The portfolio generated 5.1% EPRA like-for-like rental growth, more than double the level of the prior period. Adjusted EPS, excluding all DMA income, increased by 7% to 4.41p. And the dividend grew to 4p per share, a 4.4% increase. Our portfolio value was GBP 7.7 billion, reflecting net disposals and modest valuation movements, resulting in a 1% reduction in EPRA NTA per share to 185.9p.

Turning to the income statement, which highlights our recurring earnings and dividend growth. Net rental income increased by 16.2% to GBP 173.3 million, driven by the contribution from the Blackstone portfolio acquired in October 2025 and strong like-for-like rental growth.

Operational efficiencies reduced the EPRA cost ratio, excluding vacancy costs, to 12.2%. This remains one of the lowest in the European real estate sector as the bottom right-hand chart shows. As a result, operating profit increased by 6.1%. We have taken the opportunity to simplify our disclosure around earnings, which we now quote fully inclusive and fully exclusive of DMA income.

Adjusted EPS, excluding all DMA income, increased by 7% to 4.41p. Adjusted earnings per share was also 4.41p with no DMA income recognized during the period. And the dividend represented a 91% payout ratio. The right-hand chart sets out the moving parts of annual contracted rent over the period. And with the ERV of the portfolio 29% ahead of contracted rent, this shows that looking forward, there is still plenty of income growth to deliver.

Our capital allocation framework remains unchanged. We continue to recycle capital from lower returning assets into higher risk-adjusted returns. At 30 June, the LTV had reduced to 32.9%. And when including post period-end disposals, reduces further to 32.1%. Despite some softening in prime yields, EPRA NTA per share declined only 1%, reflecting portfolio resilience and was offset by value created from our active asset management and development activity.

We completed GBP 259 million of disposals during the half, averaging 2% above prevailing book values and GBP 344 million in the year-to-date. Just to highlight how effective we have been funding our strategy in recent years, this takes total disposals over a 3.5-year period to over GBP 1 billion. As ever, CapEx invested over the period is reflective of specific circumstances in relation to our development sites.

The planning delay at Manor Farm has been well communicated, and this was coupled with a delayed planning decision at a logistics site. Our logistics CapEx, including development and asset refurbishment, therefore, has been lower than anticipated this half with a combined GBP 79 million invested.

CapEx in half two is set to increase, and I will update you on how we see the remainder of the year on a later slide. Total accounting returns were impacted by the capital value performance across the portfolio of minus 0.2% for the period.

Our 2.3% earnings yield for the six months was partly offset by a combined 0.9% reduction across our investment and logistics development portfolios as our equivalent yield moved out by 10 basis points to 5.8%.

Like-for-like ERV growth remained healthy, however, at 1.9% for the six months. We are now starting to see value delivered from our DC pipeline with a 0.5% positive contribution in respect of the Manor Farm planning delivery. Together, this produced an underlying total accounting return of 1.6% for the six months and a reported total accounting return of 1.3% after a land option impairment and the Blackstone completion statement true-up effects.

Importantly, these returns do not yet reflect the full earnings and shareholder value potential embedded within the business. The benefits from the Blackstone portfolio are only just beginning to flow through, while the most significant value creation opportunities associated with our data center platform remain ahead of us, which I'll talk to in a moment.

Now looking at our three growth drivers.

First, asset management, which continues to deliver attractive and highly visible earnings growth. Across all lease events, we have secured GBP 8.6 million of additional annual rental income, over 50% higher than the same period last year, delivering an average 10.5% uplift in passing rents. With a larger part of the portfolio subject to lease events in the period, this has led to our strong EPRA like-for-like rental growth of 5.1%.

In our 2025 annual results, we signaled GBP 26.9 million of potential reversion capture for this year, and we're making good progress looking at the bottom left-hand chart.

First, we have captured GBP 6.5 million of rental reversion through lease events in the first half, achieving 100% of the potential that we previously indicated.

Second, we have GBP 4.5 million of rental reversion attached to half one lease events, which are currently in progress. To remind you, we have a policy of accruing 75% of this from the rent review date.

And thirdly, the second half events are even more significant with over GBP 15 million of rental reversion available in half two.

Portfolio vacancy was slightly higher overall, but this reflected net development activity. Underlying vacancy remained stable at 3.1%.

Logistics development is our second growth driver. We currently have 1.2 million square feet under construction, representing GBP 13 million of potential additional rent with 78% of this already secured via pre-leasing. We completed 0.6 million square feet of new space with potential rent of GBP 6.9 million at an expected yield on cost of over 10%. This very attractive yield reflects later phases of schemes where land and infrastructure costs have already been borne within previous phases. Further, we secured development lettings in the period, adding almost GBP 5 million of annual rent and achieved an average yield on cost of around 7.5%. And Colin will expand upon some of the positive forward-looking indicators that we are seeing in a moment.

Now turning to data centers, our third growth driver. On the left is a reminder of the key features of our power-first approach. An attractive component is that most of the value is created before construction begins. This illustration shows that approximately 60% of expected development profit is captured through delivering power, planning and pre-letting.

At Manor Farm, we had recognized approximately 20% of scheme profit at 30 June, stepping up to 30% in July after clearing the judicial review period. And with the pre-lease expected in half two, we expect to recognize 60% of scheme profits by the financial year-end. At Chelmsford, around 10% of scheme profit had been recognized at 30 June. With planning permission pending, we expect to recognize at least 30% by the year-end. Overall, this could translate to up to GBP 100 million of data center development profit being recognized this current year.

Sustainability remains integral to our strategy and supports all three growth drivers. We continue to progress across the four pillars of our framework, including increasing rooftop solar, biodiversity, communities and carbon reduction initiatives. We're also developing a dedicated sustainability approach for our data centers, which we believe will differentiate our projects, and we will talk more about this in future presentations.

Our balance sheet remains a competitive advantage, supported by our staggered, diversified and long-term debt portfolio. We ended the period with an LTV of 32.9%, approximately GBP 530 million of available liquidity, four years average debt maturity and an average cost of debt of 3.6%.

Pulling out the middle chart on this slide, which highlights an important point. Even if interest rates remain elevated and refinancing occurs at prevailing market rates, existing portfolio rental reversion far exceeds projected medium-term financing cost increases. And this is before any further rental growth is factored in. So overall, our balance sheet strength provides us with substantial flexibility to fund our future growth opportunities.

Looking now at some forward guidance. Given the lower CapEx deployed in this first half, we have updated some of the current year figures in this table to reflect this. We expect to deliver up to GBP 400 million of disposals during the full year 2026 and are well on track given year-to-date activity.

We continue to see annual logistics development CapEx of GBP 200 million to GBP 250 million over the long term. And given the development of the broader data center opportunity in the period, we are upgrading our CapEx targets for data centers from next year, effectively doubling these to between GBP 200 million and GBP 400 million per annum at a targeted yield on cost of 9% to 11%.

To conclude, the business continues to combine strategic delivery with financial strength, supported by our robust balance sheet. Together, these support our three growth drivers: asset management and capturing rental reversion; logistics development; and our data center pipeline.

It's this combination augmented by the news of new power connections being secured and new equity capital to support enhanced DC development, which positions us to achieve our upgraded adjusted earnings per share growth ambition of 65% by 2031.

Now I'll hand you back to Colin for the strategic update.

Thanks, Frankie. I've never before been more confident in our ability to create long-term value for shareholders. We've built a unique platform in the most exciting segments of U.K. real estate, a market-leading logistics portfolio with significant embedded rental growth, an agile logistics development platform and a hugely compelling and growing opportunity in data centers. These foundations established over the last decade have created a broader opportunity set than ever before, while remaining supported by high-quality income-producing assets and a strong balance sheet. As a result, we are extremely well positioned to continue growing earnings and creating significant value for shareholders over the long term.

Starting with a high-level summary on the market. Demand led by e-commerce occupiers is healthy at 10.9 million square feet and supply remains constrained with limited speculative development starts. Vacancy remained stable at around 7%, while rental growth was 2.1%, in line with our portfolio.

Investment market activity suppressed in the spring due to the geopolitical events shows sign of improvement with high-quality logistics assets continuing to attract investor interest, albeit that there has been some modest yield softening.

Against this backdrop, our portfolio has performed well, reflecting its quality and positioning, and we are optimally placed to capture further growth. We've developed our strategy so that the business can thrive in all market conditions. Our objective remains unchanged to convert structural demand across logistics and data centers into superior risk-adjusted returns for shareholders.

We achieved this through owning and developing high-quality assets and directly and actively managing them. We are client-focused, sustainability-led and differentiated by our entrepreneurialism. The value that we're delivering is from three distinct and powerful growth drivers.

First, capturing rental reversion and creating value through active asset management.

Second, delivering logistics developments at attractive yields on cost through an agile and capital-efficient development platform.

And third, generating exceptional returns from pre-let data center developments through our innovative power-first approach.

Together, these growth drivers provide attractive, high-quality income growth and substantial long-term value creation opportunities. Our portfolio is a significant competitive advantage. It's a deliberately curated, market-leading collection of modern and mission-critical logistics assets in the U.K.'s most important distribution locations leased to world-leading occupiers and generating highly resilient income. Supported by a triple net lease structure, it delivers high quality and resilient cash flows, providing a strong platform for embedded and sustainable earnings growth.

Turning then to our growth drivers. Building on the compounding nature of our rental income, our first growth driver remains one of the most compelling opportunities available to us.

Market rental growth has been replenishing our portfolio rental reversion at the same rate that we have been capturing it, which is why our attractive level of reversion of over GBP 100 million has remained broadly unchanged. Importantly, this growth requires little or no capital investment. We have a long-established track record of meeting or exceeding market rental values when opportunities arise. During the first half, we captured 100% of available ERV.

As shown here on the right, we estimate that more than 70% of today's rental reversion can be captured within the next three years. This is highly visible, high-quality and capital-light earnings growth that remains within our control to deliver.

Following the successful acquisition of UKCM, the nonstrategic asset sales have been above the purchase prices in aggregate, and we now have the final asset in solicitors hands. Enhancing our urban small box opportunity, the Blackstone acquisition significantly increased our rental reversion and is performing strongly with contracted rent up 4.4% and more to come.

Our direct approach to asset management is producing compelling results, having completed 14 new lettings, adding around GBP 2 million of income and delivered average uplifts of 42% at rent review, representing a new asset event every two days since acquisition. The examples on the right highlight the opportunity to deliver compelling rental income growth.

Contracted rent has increased by 56% at Gatwick distribution point and 33% at Stirchley Trading Estate since acquisition. Taken together, this demonstrates that the Blackstone portfolio is performing with and in some areas ahead of our original expectations.

Our second growth driver is logistics development. With more than GBP 360 million of future rental income potential, this remains one of the largest and most attractive development portfolios in the U.K. market. Through our agile and capital-efficient approach, we target yields on cost of 6% to 8%, with recent activity towards the top end of that range.

Development activity in the first half was lower than prior periods, reflecting planning timetables on a small number of schemes rather than any change in occupier demand. And as we've shown on the right, we have pre-lets in solicitors' hands, advanced discussions across several opportunities and strong occupier inquiry levels.

Combined with our capital efficient and land option model, this leaves us well positioned to accelerate delivery as schemes move through the pipeline and operational demand crystallizes. Data centers represent a significant additional growth opportunity and are already contributing to performance. Market demand continues to accelerate, driven by hyperscale cloud, AI and data sovereignty requirements, while power constraints continue to limit new supply.

As a result, occupiers are expanding beyond traditional West London locations into new markets where power is available. These conditions play directly to the strengths of our lower-risk power-first strategy, creating opportunities to deliver projects of scale for leading operators.

This third growth driver is a particularly exciting part of our strategy because we're at the early stages of the journey, and there is so much more to come.

Manor Farm demonstrates why our power-first approach to data centers is so valuable in a power-constrained market. With power and planning consent secured, we now own an exceptionally scarce asset of scale in one of the world's most important data center locations. This has attracted significant occupier interest with a pre-let imminent. As Frankie highlighted earlier, all of this supports a meaningful uplift in NTA with development profits preceding attractive rental income at a 9.3% yield on cost, creating exceptional risk-adjusted returns.

This is our power-first approach in action. And the really exciting news is that Manor Farm is just the start as we are today announcing two further schemes, which nearly double the amount of our secured power.

As we outlined on the left-hand side of this slide, our first two schemes have the potential to deliver approximately GBP 58 million of annual rent at an attractive 9% to 11% yield on cost, with planning secured at Manor Farm and Chelmsford not far behind. They are already contributing to NTA growth with capital value gains in the period. As mentioned, we have secured an additional 235 megawatts of power, enabling an additional two schemes in the Greater London Availability Zones, as shown in the middle of the slide.

This near doubling of our secured power also gives us the capability to nearly double the potential data center rental income that we can generate of between GBP 107 million and GBP 119 million per annum at compelling yields on cost, supporting an increase in our EPS ambition.

These secured schemes form part of a total current opportunity of over 1 gigawatt, offering the potential to deliver exceptional income and capital returns over the medium term.

Bringing everything together, you'll be familiar with this bridge, which illustrates the scale of the opportunity ahead, giving us the potential to nearly double our rent roll in the medium term. So starting with today's passing rent on the left, we show how our three growth drivers can deliver materially higher earnings over time.

Rental reversion provides the largest near-term opportunity driven by lease events and active asset management.

Logistics development adds a substantial layer of potential future income and capital value growth through pre-lets, completions and the continued replenishment of the pipeline.

Data centers provide a significant additional source of both income growth and value creation, beginning with Manor Farm and Chelmsford and the contribution of the new schemes of GBP 55 million, effectively providing approximately GBP 113 million of rental income.

And while this bridge shows the rental income potential within the business, we also expect to deliver significant NTA growth, which will support total accounting returns. This is particularly relevant to our data center pipeline, where meaningful development gains will drive NTA growth ahead of significant rental income contributions.

So, in conclusion, we have never been more confident in the opportunity ahead. Our high-quality portfolio with substantial embedded rental growth, agile development platform and exceptional data center opportunities provide multiple pathways to grow income significantly and create substantial value. Supported by a strong balance sheet and disciplined capital allocation, we believe that we are very well positioned to deliver our enhanced earnings growth ambition.

Thank you for joining us. That concludes the formal part of our presentation. I'll now hand over to Ian for your questions. Ian?

Good morning, everyone, and welcome to the live Q&A part of the presentation this morning. We'll begin by taking calls from the phone lines, and then we'll move over to the webcast to your questions there. This is a reminder on the webcast, there is a chat box you can put your question into, and we'll try to get as many as we can and where possible, we try and aggregate similar questions thematically.

So with that, I'll hand over to Laura, who I think is helping us on the phone, and take our first question from there.

[Operator Instructions] We will now take our first question from John Vuong of Kempen.

So you haven't started any developments in logistics in the first half, which I understood is partly driven by planning. At the same time, you have delivered some vacant developments. So just tying this together with your data center ambitions and the 2030 to '31 EPS growth target, how should we see the split of growth between the two sectors going forward?

Yes. John, thanks for your question. So, on development outlook, I think we're going to be second half weighted in terms of our delivery from development this financial year. We expect the CapEx to increase as we move through second half. We've got a number of deals in solicitors' hands and lots of active discussions going on. So, we expect a pickup there through half two.

I think as we look at the sort of five-to-six-year journey, certainly, the front half of that from an income delivery perspective is going to be development led, logistics development led. We expect our first data center to come on stream from 2028 onwards. So 2028 onwards, there will be the DC income, which will give that EPS real acceleration as we move into the 2030, 2031 period. So, first half, logistics driven; second half, data center driven across that timeframe.

Okay. That's clear. And just on Chelmsford, I noticed that there's again some fees payable to the manager as well as a profit share similar to Manor Farm. Just to confirm, is the targeted yield on cost of 10% to 11% net of all these fees? And following up on that, should we also expect a similar fee structure for the two new schemes?

Yes, it is net. And the Board has yet to agree the fee structure for the two new schemes, but that will be confirmed at the time.

Okay. That's clear. And just on the yield on cost target for the two new schemes, what's the swing factor between the lower end and the high end of the range? Is that driven by these fees? Or is there another factor, for example, the type of tenant that you would be looking at?

No, it's just to give room for maneuver. I mean, obviously, there are many varying factors that can impact on the yield on cost. And it partly depends on location and the type of building that we're creating. So Manor Farm, by way of example, is 9.3% target yield on cost. That's quite precise.

Most of the other schemes that we are looking to deliver in double digits. But in uber prime locations, you can expect that to be slightly under double digits. And in prime locations such as Chelmsford, you could expect it to be into double digits. So it just gives us a range to explain the type of difference in the locations that we are targeting.

We'll now move on to our next question from Paul May of Barclays.

Just three quick questions from me. Could we see part of the equity raise today is effectively a bit of a backfill on the Blackstone portfolio acquisition, just to provide some equity for that given leverage increased through that deal and the income accretion doesn't come for quite some time from the data centers?

And secondly, just following on from John's question really, given the obviously difficult warehouse development situation, is it not more accretive, especially on a risk-adjusted basis in the large acquisition opportunities similar to that Blackstone deal? We understand there are opportunities available and more coming as private funds refinance at higher rates.

And then the final one, what justification do the valuers have or provide to you for the 4.38% net initial yield? There doesn't seem to be any transactional evidence for this. So, I just wondered what the basis is, what your comfort is on that valuation.

Paul, do you mind just repeating that last part of your third question, just we didn't quite catch the number there.

The 4.38% net initial yield, it doesn't seem to be supported by transactional evidence. And I just wonder what gives you and your valuers comfort at that level of yield the valuation.

Well, look, to start off, Paul, thanks for your questions. It's Colin. The first thing to say is that, no, we're not backfilling. We're really happy with where the LTV currently sits. It's in line with business plan. We've successfully executed GBP 344 million of sales year-to-date and over GBP 1 billion of sales over the last 3.5 years, all in aggregate above our average valuation levels.

So, I think that partly talks to one of your other questions about lack of evidence. I mean we've proved our NAV time and again in selling everything across our portfolio, long income, short income, older buildings, shorter buildings, high-quality covenant income, et cetera. So that's the first answer.

Second one, regarding our warehouse development. I mean, look, markets ebb and flow a little bit. These are big buildings, and we're pretty confident in the pickup in the second half and the significant level of activity we've got ongoing should be seen in that period and into 2027.

Acquisitions naturally will fulfill part of our thinking. And you've seen us very active in that space in the acquisition of UKCM and of course, the Blackstone portfolio, but it's part of a broad set of opportunities that we will continue to consider with the Board and ensuring that we're making the best possible decisions for shareholders right the way across the business in terms of opportunity set, whether that's organic or through acquisitions.

Just going back on the disposals you mentioned improving valuations. I appreciate they improve the valuation of those sales. But I just wondered on that 4.38%, that is very tight. There doesn't seem to be much activity at that kind of level. Certainly when I speak to the people in the market, they kind of scoff at that kind of number. Just wondering what gives you the confidence on your remaining portfolio?

Yes. I think the net initial yield is not really the metric. It's the numeric underpin to the equivalent yield and the reversionary yield and the timing of delivery of the reversionary yield that's driving market interest. I mean, it is fair to say that liquidity has slowed a little bit, and we have seen a two agencies move out their prime yield by accord of a point. You've seen that play out in our NTA. So, we're keeping a close eye on that.

But we think that across the market, we're in a pretty good shape in terms of the quality of our real estate and the liquidity of our properties, which we've proved time and again. So, but obviously, that's a consequence of geopolitical risk and macroeconomic backdrop that's impacting on confidence in the marketplace. But we do still see a significant amount of investment looking to get into logistics assets.

It's probably fair to say that as you capture the reversion in theory, your value doesn't increase materially, but your earnings obviously move in the right direction. Is that the right way to, I think your message yield will expand as you capture the reversion potential.

Well, that's correct to one degree. But of course, as we've been capturing the reversion, market rental growth has been very healthy and the reversions continue to be replenished. So it's being replenished at the same rate as we've been capturing it, which is why we still have a 29%, in fact, slightly ahead at a new record level of reversion of 29.2%. So there's still a lot more to come there, Paul. And of course, the process of capturing that is helping us move up the yield curve progressively over the course of the next few years.

Paul, could I just add that I think from a valuer's perspective, the topped-up net initial, the 4.7% that we quote is more akin to that, not the 4.4 and the equivalent is 5.8%. So I view net initial 4.7, equivalent 5.8 at 30 June.

Yes, the 5.8% is far more important metric to the market.

We'll now take our next question from Christen Hjorth of Deutsche Bank.

Just two from me. So first of all, when you sort of think about risks of delays on DCs three and four, which unfortunately in the U.K. is something we want to consider. To what extent is that being factored into the time lines that you've set out?

And second, obviously, a good performance on the cost ratio in H1. How should we think about that going forward? Should we have a degree of operational gearing, particularly around the data center piece as the rental income starts coming through from that at the back end of the decade?

Yes. Thanks for the question. So on the DCs, I think our experience at Manor Farm was an extreme case where we had to go to appeal after delays in local authority determination. It was then subject to a consideration by the inspector and then was called in by the government. We don't expect any of our subsequent schemes to take nearly that long.

Chelmsford is being dealt with by way of, it's an allocated site and it's being dealt with by way of the delegated power to the local authorities. So it doesn't even go to committee. And as for the two new schemes, we see those sitting within the bookends of those two extreme cases that I've just outlined.

So yes, we have factored in what we believe is appropriate time lines given that experience into the timetable that we've outlined and that Frank has just mentioned with income delivery from Manor Farm first full year '28. And then the last scheme expecting to be fully income producing in 2031.

Frankie, would you like to take the cost ratio?

On the cost ratio, obviously, it's something we keep a keen eye on. We have been driving that down in recent periods. I think as we look forward over the time frame that we're talking here with DC delivery, there's plenty of scope to drive that a lot closer to sort of the 10% mark from a net per cost ratio perspective.

And we'll now take our next question from Andrew Saunders of Shore Capital.

I've got two questions, if I may. First one, just how the equity raise might change your thinking on planned disposals and further debt drawdown going forward, perhaps where we might see leverage settling out over the next five years or so?

And secondly, if we can just talk about the reversion opportunity. Perhaps you can just flesh out for us how much of that actually sits with the urban logistics portfolio? And I think you sort of touched on that with the Blackstone deal. Perhaps just give us a flavor of where the sort of greater upside sits between Big Box and Urban Reversion.

On the disposal front, look, we've been effective sellers and rotators of capital over the last sort of two to three years, as we've highlighted. That isn't going to stop. We think a continual pruning of lower-performing assets, maybe assets that are sitting there with a little bit more risk in them is good discipline. So we'll continue to do that.

The guidance we stated looking forward is disposals of anything up to GBP 350 million per annum. So that capital rotation piece will continue. From a debt perspective, clearly, the equity reduces our leverage to between 27% and 28%. We think going into this next phase where we've upgraded our DC CapEx targets, well capitalized is in the best interest of shareholders. We've always operated with a policy of a sub-35% loan-to-value. That isn't going to change. I think for the next period of time, seeing us in and around that 30% mark, if not slightly below that 30% mark is where we'll operate for the foreseeable future.

Thanks, Andrew. So talking to the reversion opportunity, I talked to the 29% overall. I mean we've been making great strides in urban logistics capture. And I think we talked to the asset management side of the business, which has been incredibly powerful in delivering essentially an initiative every other day.

The reversion pertaining to the small box urban piece of our portfolio stands at around 40% of the total reversionary pot. So relative to the size of our portfolio, that is where the larger element of the opportunity lies. Of course, we do have some vacancy in the portfolio in the small box portfolio as well, which provides a further opportunity to tighten that and therefore, deliver sort of net increase in income capture.

We'll now move on to our next question from Suraj Goyal of Green Street.

Just a couple from me. So could you share some additional color on how the integration of the Blackstone portfolio is going? I know you provided a couple of the positive case studies in the presentation. But thinking now almost a year on, are there parts of the portfolio that we now see as more challenging, maybe not necessarily the case a year ago?

And then on EPRA vacancy, which jumped to 6.5% from the 5.6% at year-end. I think I saw in the release, it was entirely from unlet spec completions. What's the sort of timeline on that space in your opinion? And is there a scenario where your continued spec development potentially start to outpace occupier demand? Then in addition to that, how are sort of tenant incentives trending? Are you seeing any upward pressure here?

Thanks very much for the questions. So the integration of the Blackstone portfolio has gone incredibly well. We're delighted with how it's dovetailed in with the core UKCM assets we've acquired to produce a really high-quality small box urban portfolio. And as I alluded to earlier, we've been making great strides in leasing some of the vacancy there. There's been a huge amount of active management being undertaken in-house.

As I said, one transaction every other day and very strong income capture from those activities. We've been really pleased. I mean, look, these are in the main parks, and we're controlling the parks and driving value through doing things such as refurbishments, proving new rental tones and then applying that to the parks. But it's also about making sure that our customers are happy. We are a customer-led business, and ensuring that they're happy with service charge and they're getting good value for money is absolutely key. These are high-quality parks in strong locations that have got depth of demand.

As I've mentioned just a moment ago, they also have the largest element of reversion attached to them. So we're really happy with the Blackstone portfolio. It's going very much in the same vein as the UKCM portfolio was.

Yes. So the vacancy point quite rightly points out that it increased by about 90 basis points. It's totally development driven. I think that's three buildings that PC sort of May, June time, so very recently. Just to point out that in all of our sort of underlying appraisals and assumptions for speculative buildings, we build in a 12-month forward period. So we certainly expect to lease the buildings within the assumptions set out there. There's good interest in all three buildings. And yes, within a 12-month period is where we'd expect to be.

I think the last question was about tenant incentives. Yes, we're not really seeing tenant incentives change. Look, I would say broadly, the market is stable. There was 10.9 million square feet of takeup in the first half. That's down a little bit on the GBP 13 million in the prior period, but net absorption is up 20% over the period. So as a consequence of new buildings coming on stream, I think the occupational market is in pretty good shape. And we're not seeing any significant impact on incentives as a result.

We will now move on to our next question from Tom Musson from Berenberg.

Maybe it's a similar question to what you've been discussing on disposals. But because you're able to recycle capital into a space that's much more accretive now, does that mean you're willing to expand the range of assets you'd be comfortable to sell from and therefore accept some higher disposal yields going forward because the visible funding requirements are obviously a lot higher now?

And then the second one, can you just give a little color on the land impairments because I think that was just at two sites, which sites were they? And what was driving that impairment?

Yes. So look, there's nothing on our books that we wouldn't be prepared to sell at the right price, Tom. And you're absolutely right. Selling any of our standing investments and deploying that capital into our logistics development pipeline and more particularly into data centers is hugely accretive, and that's what we've been doing over the last couple of years.

But of course, we are mindful of the two aspects there. Firstly, selling investments that have maximized value in our hands where we've completed our business plans. And we're also mindful of the magnitude of the sales program. Our DC development CapEx is very significant up to 2030. The reason for our equity raise that we just closed is that we don't feel it's possible to sensibly fund all of that from investment disposals, although we've been disposing very, very successfully and to a significant degree, we don't want to be seen to be forced sellers in the market.

So it's a balancing act on those things. Of course, the market has at a very significant level of excess demand that we've received, which has given us strong support for that strategy in the subscriptions on the equity raise last evening.

So one of the impairments is pretty modest. But if we look at the larger, we go through an ongoing process of appraising the future development schemes. This particular scheme in question, I think we're seeing some challenges around the viability of progressing that scheme. I think that shows that we run the rule of these schemes pretty frequently, and we are being very selective around where we choose to allocate capital. As a result, I mean, the particular point is around the land value. So we do not yet own the land, and it's about the residual land price that the scheme would come in at.

The other thing to mention is a large part of the write-down relates to, if you remember back in 2019, when we acquired the DB Symmetry business, we paid a price for the entirety of the sites, and we had to allocate that price across the site. So this is not the underlying cost of option professional fees. This is the corporate acquisition cost that sits on top of that particular scheme. So we've pared that back a little bit. We'll see how we go. There are some challenges there. But I think it points out that we're running all over these things on an ongoing basis and allocating capital appropriately.

I think we have time for one more question on the phone. There's a couple coming through on the webcast as well, but I'm conscious we're getting near half the hour. But Laura, could we just take the question from Greg Simpson, please.

Greg, your line is open. Please go ahead.

It's Greg from BNP. You've got GBP 344 million of disposals year-to-date, but guiding to up to GBP 400 million for the full year, so implying not much in H2. Can you talk a bit about the health of the investment markets you're seeing? And is it being impacted by some of the political changes in the U.K. and high bond yields?

And then secondly, just on the Manor Farm potential pre-let. Can you talk about the kind of tenants, lease length, indexation, other terms you're kind of targeting? And is there any discussion about Phase 2 Manor Farm at this stage?

Yes. Thanks, Greg. So on the disposals, yes, we wanted to be front-footed, and I think we've done very well in the first half. We're being a bit cautious in the second half there. There has been a little bit of slowdown in market activity. We have to see how that plays out. It's very difficult to tell until we come back in September. I think there's still a healthy level of demand in the market.

But you're absolutely right. The geopolitical situation and domestic political backdrop aren't necessarily helping market confidence. But as I said earlier, there's still a lot of interest in logistics development because it has very significant tailwinds, which we consider and most of the market considers will continue to deliver attractive rental growth and returns opportunities.

So, I think watch that space, and we haven't disappointed in the past, and we're confident of continuing to deliver a good cadence of disposals to support our strategy. As for Manor Farm pre-lets, the deal there has been in solicitors' hands for quite some time. It's with a major co-locator with a strong balance sheet. We've agreed all the principal terms, the lease length, the rent, the review terms, the principal specification of the building, et cetera. So, we're pretty close now, and we're confident of concluding that, and it's in line with our business plan objectives.

Great. Look, I'm conscious of time. We'll go quickly to the webcast. A question from Harry at BNP. Can you confirm you have enough equity funding now to complete all the already announced projects? And should we see the GBP 350 million raise for circa 235 megawatts of DCs as a good proxy for the remaining 500 megawatts of DC potential, i.e., you might need another GBP 750 million further down the line?

It's quite a scientific way of looking at it. I think as we look forward, we've got the funding leaves available to execute the business plan. As I said earlier, looking at this next phase for us being well capitalized going into that, I think, is going to allow us to deliver best value for shareholders.

Pointing to equity as a component of that. Clearly, last night, today, announcing the GBP 350 million raise, we are announcing an enlarged opportunity. And looking back to the last time that we raised equity for cash in 2021, that was when we had a lot of pre-let opportunity, and we accelerated our development program. So I think every time we come to shareholders, we are either accelerating or enhancing the opportunities there. So I'd just point to that when we look forward and our various sources of capital.

Question from Elliott at CCLA. Can you add some color to the vacancy of the spec developments and the average time to let the spec buildings, even though you build a 12-month void period, what has been the average period to let up the vacant spec space?

I don't know the answer to that.

It's certainly within 12 months, but I couldn't give the exact.

Yes. I mean we have, in the past, talked to stats of average leasing in negative territory, i.e., letting buildings on average before they've practically completed. We build in a sensible time frame, and that's not coming under pressure.

So as Frankie says, we're certainly delivering lettings within the timeframe, but I don't have the specific number to hand yet. We can come back to you on that after the presentation closes.

Next question from Bjorn Zietsman. Can you give guidance around the cap rate you expect to use in valuing the power revenue received associated with the DC opportunities?

I would apply a high single-digit cap rate there. So guide you to the 8% to 10% sort of level.

Next question from Bjorn. The additional 235 megawatts materially increases the opportunity. Can you talk about the competitive dynamics that allowed you to secure these sites? Are similar opportunities still available? Or are they becoming increasingly scarce?

Okay. Thanks, Bjorn. So I think the thing to say here is that we set up our power team and our power-first strategy five years ago with some of the leading power brains in the U.K. in the business. And it's all about developing relationships and understanding the opportunity set. So we haven't gone about this in the way that most people do in securing land and then seeking to acquire power because power is very difficult to come by. If you apply for power in around Heathrow today, you'd be waiting 10, potentially 15 years for delivery.

So we have put in place joint venture initiatives with power generators. And it's that relationship and the work we put in to identify power contracts, secure those, and the fact we've got a JV partner that has statutory powers, it enables us to deliver the project on time and with greater certainty than we would otherwise have. So it's a direct route to power securing and delivery. And that's why when we've announced the new 235 megawatts in two schemes, allied to what we already have, giving us a total of 507 megawatts overall.

We've said that all of that is power secured. We own the land at Chelmsford. We own the land at Manor Farm. The two new schemes, one of those, we own the land on, the other one we don't. But key here is that we've got control of power and delivery of power within the time frame to 2030 that will bring these schemes on tap.

And with apologies to Bjorn, I think we've slightly overrun, but thank you very much indeed for your questions. And I think that will probably conclude the presentation.

Thanks, everyone, for joining. Really appreciate your continued interest in the company and your support. Have a good day.

Good morning, everyone, and thank you for joining us today for our results webcast. We're delighted to have you with us. Before we begin, a quick note to say that today's session is being recorded, and a replay will be available on our website shortly after the event.

Turning to the agenda. We'll start with a brief introduction from our Chairman, Aubrey Adams. He'll then hand over to Colin Godfrey, our CEO, who will provide an overview of the period before passing to Frankie Whitehead, our CFO, for the financial and operational review. We'll conclude with a live Q&A [Operator Instructions]

And with that, I'll hand over to Aubrey.

Good morning, and welcome to our full year results presentation.

I'm pleased to be opening today with a strong set of results, reflecting a year of significant strategic progress and excellent delivery across the business. We have continued to execute our strategy with discipline, strengthen the platform for future growth and the business enters the year ahead with a real sense of momentum.

Before handing over to Colin and the management team to take you through the detail, I would like to take a moment on a more personal note. This presentation marks my final results as Chairman, as I will be retiring from the Board after 9 very rewarding years. It has been a privilege to serve alongside such a high-quality Board, and I would like to thank my fellow directors, past and present, for their insight, challenge and support. I would also like to extend my sincere thanks to the manager and the wider team for their professionalism, commitment and consistent delivery throughout my tenure. Finally, I would like to thank our shareholders for their continued support and engagement.

I leave the business in the strongest position it has ever been with a clear strategy of high-quality portfolio and a management team well placed to continue creating long-term value for shareholders. And it's very pleasing that the company's success has been reflected in its elevation to the FTSE 100, which becomes effective on Monday.

With that, I will hand over to Colin to take you through the results in more detail.

Thanks, Aubrey. Hello, everyone, and thank you for joining us. We entered 2026 with real momentum, improving occupier demand, the successful integration of recent acquisitions and powerful structural trends across logistics and data centers, all of which plays to the strengths of our portfolio and our strategy. And it means that we start this year exceptionally well placed to deliver against our 3 growth drivers and our ambitions to grow adjusted earnings by 50% by 2030. This is a business set up for multiyear compounding growth built on capability, discipline and consistent delivery.

Throughout 2025, we delivered strong strategic momentum across our growth drivers. We continue to capture record rental reversion, expanded our logistics development platform and advanced our data center pipeline, including launching our power-first model and progressing as planned with the delivery of our first data center project at Manor Farm, Heathrow. We also fully integrated UKCM, generating very attractive returns and further enhanced our urban exposure with the addition of the Blackstone portfolio. At the same time, we executed a significant disposal program to recycle capital and increase returns. This is embedding highly visible multiyear growth and translating into financial performance.

Despite significant capital recycling, we grew net rental income by 10.6%, increased adjusted EPS by 4.1% and delivered 4.4% dividend growth. The financial results demonstrate that the strategy is working. And as a result, we enter 2026 with momentum, visibility and confidence. As shown at the top here, our strategy builds on over a decade of consistent value creation and the evolution of the business has been deliberate and cumulative.

Since our IPO in 2013, we've sought to create the most compelling supply chain-focused real estate business in Europe. In 2019, we added the U.K.'s largest logistics development platform with the acquisition of DB Symmetry, enabling us to create high-quality buildings and compelling returns. And in 2023, we made our first urban logistics acquisition with Junction 6, Birmingham, and subsequently further strengthened our offering through the acquisition of UKCM in 2024 and the portfolio of assets from Blackstone last year.

And following 5 years of work in 2025, we launched our power-first data center strategy. The combination of the largest logistics investment portfolio and the largest logistics development platform means that we are the largest logistics real estate business operating in the U.K. This gives us many advantages, including deep market knowledge, strong relationships, a lower cost of capital and increased share liquidity. Each phase has broadened our capability and helped to enhance our performance as the data below shows.

Over the past 10 years, we've grown contracted rent from GBP 100 million to GBP 361 million and at the same time, reduced our EPRA cost ratio by 220 basis points as detailed at bottom left. That combination, continued income growth underpinned by an efficient cost base has delivered strong and sustained total shareholder returns as seen bottom right. Looking forward, we're primed to deliver, and we're entering 2026 with growing momentum in each of our 3 growth drivers.

Now I'll come back to this later. But first, I'll hand over to Frankie to cover our financial and operational review. Frankie?

Thank you, and good morning, everyone. As Colin said, 2025 has been another strategically important year for the company, and we've delivered excellent progress across our 3 growth drivers. Our active approach to managing the portfolio has resulted in strong operational performance. And with 2 milestone events during the year, the launch of our data center strategy and the acquisition of the GBP 1 billion logistics portfolio from Blackstone, we expect momentum from these events to accelerate our financial performance into 2026 and beyond.

So starting with the headlines. We've delivered strong like-for-like rental growth this year of 4.2%. This has supported an increase in our adjusted EPS of 4.1% to 8.38p per share, and the dividend is up by 4.4% to 8p per share. We have deployed capital into a range of attractive opportunities, which along with valuation uplifts, increased our portfolio value by over 20% this year to GBP 7.9 billion. Our EPRA NTA increased to 187.8p with income growth and ERV growth leading to valuation gains and once again, generated attractive returns through our development activity.

Now turning to look at income and earnings growth in more detail. Our earnings growth drivers are clear, and these underpin our ambition to deliver adjusted earnings growth of 50% by the end of 2030. Firstly, net rental income has increased by 10.6%, driven by a full year's contribution from the UKCM logistics assets, a 10-week contribution from the Blackstone portfolio and strong like-for-like rental income growth net of our disposal activity.

Income from development management agreements or DMAs, was GBP 15.5 million and in line with expectation. We guide to DMA income reverting to our GBP 3 million to GBP 5 million run rate for the financial year 2026. Secondly, our disciplined cost management has further improved our EPRA cost ratio to 12.4%, one of the most efficient platforms in the sector. This reflects the advantages of our externally managed structure and our commitment to cost efficiency as we scale. We continue to exclude the additional element of DMA income from adjusted earnings to maintain comparability year-on-year.

Adjusted EPS growth, excluding net additional DMA income, was 4.1%. And with the dividend growing by 4.4% to 8p, our payout ratio is consistent with the prior year at 95%. Looking at the top right chart, you can see the significant embedded rental potential of 37% between current passing rents and the estimated rental values across the portfolio. This provides us with great near-term visibility over the future growth in net rental income, and we'll be coming back to this later in the presentation.

Let me now turn to capital allocation and our robust balance sheet. As already noted, the portfolio increased in value to GBP 7.9 billion. Looking at our allocation of capital on the top right, you see that during the year, we deployed development CapEx in line with our guidance of GBP 231 million into logistics development and GBP 209 million into our first 2 data center schemes.

In addition, our logistics acquisitions totaled over GBP 1 billion, the majority of which was the portfolio acquired from Blackstone. This portfolio will deliver a 6% running yield in 2026 and is immediately accretive to adjusted earnings. And we've made excellent progress on capital recycling, shown here on the bottom right, with GBP 416 million of assets sold or exchanged to sell in the year, which means we are now 80% through the disposal program of the UKCM nonstrategic assets. These capital movements and the increase in net debt, which part financed the transaction with Blackstone, resulted in a year-end loan-to-value of 33.2%. And with the GBP 62 million of disposals that were exchanged and have now subsequently completed post the year-end, our pro forma LTV reduces to 32.7%. Drawing this all together and including the equity consideration issued in the year, our EPRA NTA increased to GBP 5.1 billion or 187.8p per share, up 1.2%.

We have again delivered compelling underlying total accounting returns. Starting on the left-hand side with our 4.7% earnings yield. We added 1.9% and 2.6% to returns from our investment and development portfolios, respectively. And with capital value performance across the whole portfolio at 2.4% over the year, we delivered an underlying total accounting return of 8.5%. We have separated 3 nonrecurring items here from underlying performance, which span the nonstrategic asset performance, an impairment against our land option portfolio, which I covered at the half year and the technical NTA dilution arising from the shares issued as part consideration for the Blackstone portfolio. This results in the reported total accounting return of 5.5%.

And it's worth stating here that we have yet to feel the full financial impact of the Blackstone portfolio of assets and to a larger degree, our live data center projects. And so we're expecting a larger contribution from these components to total returns as we move forward. A component of this performance shown along the bottom was our portfolio ERV growth of 4% over the year, which is attractive in the context of underlying inflation. Our portfolio equivalent yield has remained stable at 5.7%.

Moving on now to our asset management performance. Colin highlighted this as our first key growth driver, and we've delivered another year of strong progress. Our asset management team has added GBP 10.5 million of contracted rent through rent reviews and other lease events. Open market rent reviews and hybrid reviews performed particularly strongly, averaging a 36% and 21% increase in passing rent, respectively, all aiding our improved EPRA like-for-like rental growth of 4.2%.

And as the bottom left-hand chart highlights, we will see a greater proportion of the portfolio subject to review in 2026 and 2027. And this will deliver an acceleration in the rental income capture over the next few years. And finally, moving on to the right-hand side. Our portfolio vacancy has reduced slightly to 5.6%, reflecting the net effect of our portfolio activity and as expected, the greater level of rotation within the urban assets.

Before I move on to our development activity, I want to briefly highlight an important component of the Blackstone transaction, which is the innovative 3-year reversionary bridge. There is a lot of detail on this slide, but essentially, the portfolio acquired came with GBP 20 million of cash, acting as a bridge between the passing rent at acquisition and the market-based ERVs across the portfolio. The release of this reversionary bridge will be recognized within adjusted earnings over the next 3 financial years on a reducing annual basis so that it tapers in line with the actual capture of market level rents as set out at the bottom of this slide.

This earnings contribution should be viewed as a baseline for performance from the portfolio with upside available through rent review outperformance or an improvement in portfolio occupancy. Our development platform is our second key growth driver and continues to deliver strong returns for us. During the year, we commenced construction on 1.4 million square feet of space, which has the potential to deliver over GBP 13 million in headline rent. We secured 0.4 million square feet of development lettings this year, adding nearly GBP 4 million to contracted rent at a yield on cost right at the top end of our 6% to 8% target range.

Finally, it's fair to say 2025 was a year of macroeconomic uncertainty. This continued to weigh on the pace of occupier decision-making. But as Colin will outline in a moment, occupier confidence is improving, and we ended the year with 1.8 million square feet under construction, representing GBP 19.6 million of potential rent, of which 53% was pre-let.

The importance of sustainability to our business is clear, and it continues to play a vital role in driving performance and returns. We provide what clients want, highly modern buildings that are powered by clean energy, are energy efficient and have the power resilience to accommodate future automation. Excluding the portfolio of assets acquired in the year, our EPC rating improved to 86% at B or above. And with the portfolio from Blackstone included, this remains stable versus 2024 at 79%.

These new assets present an opportunity for improvement where targeted investment can deliver both sustainability benefits and meaningful value enhancement. Our rooftop solar program increased capacity by 4.5 megawatts in the year to a total of 29 megawatts. And we also continue to invest in natural capital and community programs. This year surpassing 62,000 young people positively impacted through our social value initiatives. All these sustainability actions support long-term occupier demand, reduce obsolescence risk and drive resilience across our estates.

Turning to our balance sheet. This remains a real strength and provides flexibility as we invest for growth. During the year, we completed several important pieces of financing. We refinanced and upsized our GBP 400 million revolving credit facility. We issued a new GBP 300 million 7-year public bond at a 4.75% interest rate. And we agreed an acquisition facility to part finance the Blackstone transaction. At the year-end, as set out along the bottom of this slide, we had very strong financing metrics, along with a well-staggered maturity profile and access to a diverse pool of debt capital. These metrics supported our Moody's upgrade to A3 stable in the year.

And we've shown on the right how our capitalized interest is evolving, reflecting the higher level of capital investment in live development projects, which is around 2.5x greater than this time last year. Interest capitalized against our logistics developments remains modest due to our capital light land option model and relatively short construction periods. An addition in the year is the interest capitalized against our data center developments, reflecting earlier land drawdowns, greater infrastructure investment and longer construction periods. However, it's important to note that this cost of finance is fully captured within our underlying appraisal return targets.

So looking at some forward guidance. Our development CapEx guidance for 2026 remains unchanged. We expect to maintain our GBP 200 million to GBP 250 million run rate for logistics development and GBP 100 million to GBP 200 million into data center development this year. And we expect to achieve returns in line with previous guidance at between 7% and 8% for logistics currently and 9% to 11% across our 2 data center projects.

As we highlighted at the point of the Blackstone transaction, we expect disposals to run at an elevated level this year of between GBP 400 million to GBP 500 million to finance our accretive development activity as well as targeting an LTV at the lower end of the 30% to 35% range. This is all part of our disciplined approach to capital allocation, which ensures we remain optimally positioned for the next phase of growth.

This discipline, combined with our access to the multiple funding levers set out across the top of the slide, gives us the appropriate financial flexibility to identify and pursue opportunities as and when they arise, enabling us to invest strategically and proactively for growth. And so drawing all of this together, 2025 has been a year of disciplined delivery and strong financial performance. We're entering 2026 in a great position with a strong balance sheet, multiple funding levers and a clear line of sight across our 3 growth drivers. Our considered approach to managing risk, combined with the scale of the opportunities ahead, underpin our potential to grow adjusted earnings by 50% by the end of 2030.

And with that, I will hand you back to Colin.

Thank you, Frankie. Turning now to our strategy. The platform that we've built strengthened again this year is now positioned for the next phase of growth. It's diversified, insight-driven, operationally sophisticated and capital efficient. And crucially, it's aligned to the structural demand drivers underpinning logistics and data centers. So we're entering 2026 with the right assets, the right people and the right opportunities.

And to drive value in this market environment, our strategy has a simple objective: Convert structural demand into superior shareholder returns through a focus on high-quality assets, a direct and active management approach and an insight-driven development model. This strategic focus has created 3 clear and powerful drivers in our business. Firstly, capturing record rental reversion, which requires no or limited capital and delivers high certainty returns; secondly, developing new logistics assets at a 6% to 8% yield on cost, supported by long-dated capital-efficient and flexible land options; and thirdly, developing pre-let data centers targeting a 9% to 11% yield on cost, enabled by our innovative power-first model.

These drivers give us resilient growing income, combined with opportunity for substantial capital growth. Let's start by looking at the U.K. logistics market, where demand is strengthening. Take-up increased in 2025 to 25.6 million square feet, up 22% year-on-year and the best level since the pandemic. Demand is broad-based across e-commerce, retail, manufacturing, defense and 3PLs. Lettings are typically still taking extended periods of time to close, which was accentuated in 2025 by elevated macro uncertainty. But importantly, occupier confidence is improving, and this is feeding through into activity with nearly 10 million square feet under offer heading into 2026.

Turning to supply. 20.9 million square feet was delivered in 2025. Vacancy ended the year at 7.1% with new space remaining broadly stable and the secondhand component increasing to nearly half of the total. Occupiers are rotating into higher quality modern buildings, exactly where our portfolio is positioned. And looking ahead, supply is tightening. Space under construction is down 28% year-on-year with speculative development almost 50% lower, pointing to fewer completions in 2026. Against that backdrop, rents continue to grow ahead of inflation with market ERVs up 3.9%. Investment capital markets volumes also increased, aiding price discovery with nearly GBP 9 billion of transactions, noting that the prime yield has held firm at 5.25% since 2022.

Turning back to our business. Our portfolio has been curated to maximize our opportunities. We now have a broader range of unit sizes with greater urban penetration and more assets benefiting from open market rent reviews, improving pricing power in a rising market. This is all underpinned by long-dated Big Box income from a modern portfolio let to some of the world's most recognized companies, as you'll see here on the right. It's exactly the right mix heading into 2026.

Our first major growth driver is continuing to capture our in-built rental reversion. And this is an exceptionally attractive and growing opportunity. Through rental reversion and vacancy, we have the opportunity to increase rental income by over GBP 100 million, of which 73% can be delivered within the next 3 years. Delivering this increase requires minimal capital, and our team has a strong track record of meeting or exceeding ERVs. This is high certainty, high-quality income growth and is firmly within our control.

Frankie updated you on the excellent progress made in investment sales to support our recycling program. This included GBP 299 million of UKCM nonstrategic assets sold since May 2024 and a further GBP 62 million with contracts exchanged, leaving GBP 86 million in 2 assets, representing around 1% of portfolio value to be sold within the next few months. And one of these is now under offer. So in aggregate, these sales are ahead of the effective cost of acquisition.

This is disciplined capital recycling, selling noncore assets and reinvesting into high-returning logistics and data center opportunities. But the primary reason for acquiring UKCM was to capture a high-quality urban logistics portfolio with significant in-built reversion. And we've made great strides in capturing this, having increased contracted rent by 18% since acquisition, supported by strong rent reviews, lease regears and new lettings. And this blueprint for success is mirrored in the Blackstone portfolio transaction, which completed late last year, where we have acquired a high-quality urban logistics portfolio at below replacement cost.

These assets are now fully integrated into our platform, and we're already making excellent progress with our asset management initiatives, letting up vacancy and capturing significant rental reversion as demonstrated by the examples shown here on the right-hand side of the slide.

Our second growth driver is logistics development. This platform is capable of delivering more than GBP 300 million of additional rental income, nearly doubling today's passing rent. It's capital efficient, supported by long-dated land options and can be flexed according to market conditions and our strategic objectives. As Frankie mentioned, some lettings that we expected to close in Q4 2025 slipped into this year, such that 2026 development activity is primed for delivery with nearly GBP [ 15 ] million of rent close to being secured. We have nearly GBP 9 million of pre-let rental income in solicitors' hands, over GBP 5 million of rental income in advanced negotiations, strong occupier engagement across the pipeline, including a 55% increase in pre-let inquiries and yields on costs tracking at the upper end of the 6% to 8% range. Our development platform is, therefore, a significant driver of multiyear income and value growth.

And our third and most exciting growth driver is data centers. Demand for data center capacity is strong and is expected to grow significantly, noting that co-locators dominate the London market. The constraint to supply in this market is power. There isn't enough in the right locations deliverable within the right time frames. Our power-first model solves that constraint, enabling faster delivery, lower risk and materially higher returns.

In the 12 months since we announced our data center strategy, we've created an exciting pipeline of opportunities with more than 230 megawatts of power across our first 2 sites and the potential for GBP 58 million of annual rent, targeting an attractive 9% to 11% yield on cost. At Manor Farm, our first DC project, momentum continues to build. We're in advanced negotiations on a pre-let with an occupier, have agreed a contractor and are primed to make swift progress.

We're expecting a planning decision imminently with the planning inspectorate indicating a determination on or before the 17th of March 2026, keeping us on track to begin construction as planned. And we have also made good progress at our second data center site, where we expect a planning decision this year. These are just the first of a series of projects in a pipeline of potential opportunities of over 1 gigawatt.

When you bring the 3 growth drivers together, the scale of the opportunity ahead of us becomes clear. We can more than double our rental income to over GBP 800 million across the medium and longer term. We show here the contribution from our 3 growth drivers: Rental reversion in gold, development in blue and data centers in red. Today's GBP 337 million of passing rent on the left bridges to GBP 361 million of contracted rent through the burn-off of rent-free periods and signed agreements for lease. You can then see how the growth drivers generate a near-term opportunity to increase passing rent to GBP 425 million driven by reversion and development, a medium-term opportunity to increase this to GBP 562 million, reflecting further reversion and development potential plus a very meaningful additional upside from our first two data center projects. And finally, there is a significant long-term opportunity within our extensive logistics land portfolio, taking rent to well above GBP 800 million.

Key here is that much of this value is already baked into our business. And as you can see at the bottom, none of this includes future rental growth or additional asset management upside. And crucially, it excludes any benefit from our 1 gigawatt pipeline of further data center opportunities. Now this is why we are so confident in delivering sustained earnings growth and compelling returns for shareholders.

So to conclude, we have a resilient and high-quality income stream, an attractive and growing dividend and clear line of sight to material earnings growth with an ambition to grow adjusted earnings by 50% by 2030. We have a strong balance sheet, a proven model and powerful multiyear drivers. And critically, the business is primed for delivery in 2026, particularly through the early stages of our data center program. It's a compelling combination, resilient income, strong and compounding growth and the potential for exceptional returns from data centers in the years ahead.

Thank you for listening. And with that, I'll hand you over to Ian, who is coordinating Q&A. Ian?

Good afternoon, everyone, and thank you very much indeed for joining us. This is the live Q&A part of this afternoon's presentation. And thank you very much indeed for submitting your questions via the webcast. [Operator Instructions] We'll go straight into this.

So the first question we've had is the potential for e-commerce growth to slow and what replaces that demand?

Thanks, Ian. Good morning, everyone. Thanks for joining us. So e-com has hit about 28% of total retail sales. It's still an important part of our market. We think it will continue to grow at a rate above inflation. But I think the key thing to note here is that there are many drivers to demand in our market. Third-party logistics operators have been the largest contributor to take-up i.e. lettings in recent times. Again, this year, around 30% in 2025, followed by manufacturing, which is partly as a consequence of Brexit and deglobalization effects. So we've got a broad -- very broad range of sectors actually that is supporting demand in industrial logistics. And that's very, very gratifying because it means that if one of them was to slow a little bit in demand case, then it's not going to have a significant effect on demand in our market more generally.

Great. Thanks, Colin. The next question is, have you undertaken a stress test in the event that a major tenant pulled out?

Frankie?

Yes, there's probably a few layers to this. So in terms of stress testing, I mean, of course, in the ordinary course business, that's absolutely something that we do on an ongoing basis to know under various scenarios, what that would mean for the business. Speaking about occupiers more generally, I think if we look across our occupier base, we're very happy with the strength of that. I think it's one of the most diverse and strongest customer bases of a logistics portfolio across Europe. We've got very strong history of rent collection. And of course, when we're signing new leases, there's a thorough diligence process around customer credit strength and financial worthiness. So there's a robust process around all of that.

I think the other factor here is in the current market environment where rents are growing attractively and our portfolio today sits 28% under-rented in a circumstance where we were to lose a customer, actually, it does accelerate an ability to grow that income and accelerate the capture of that rental reversion. So there's various layers there. We're very happy with the current picture in terms of customer.

Great. Thanks, Frankie. The next question is, how do you see the political environment at the present time?

Okay. It's a broad-ranging question. Look, I think there's obviously been geopolitical risk in recent times. We've had other external factors. I touched on deglobalization earlier, but lots of elections. I mean you had the tariff impact. And close to home, we obviously had the run-up to the budget. And there's clearly been destabilization politically within the U.K. as well. But I do think that our occupiers, the C-suite of the U.K. plc are getting used to the disruptive -- these disruptive elements. And they're increasingly showing signs of adapting to that and being able to make investment decisions with the backdrop of that. So I do think things are improving a little bit, certainly in terms of the impact on our market, obviously, having absorbed the national insurance increases and those sorts of things. And we are seeing more occupiers now that are planning to make fairly major decisions in terms of taking on new space.

Great. The next question is, do you plan any further acquisitions? And what does the pipeline look like?

Okay. I might sort of share this with Frankie. But look, I mean, we -- everything we take on its own merits when we did the UKCM corporate acquisition, when we did the Blackstone portfolio transaction last year, which obviously is mid-single-digit accretive. So a great deal for our shareholders, but I think it was a real win-win transaction. And we obviously, in terms of the cost of our capital and the way we think about returns, think about this in the context of the income, the total return potential that it has and the risk/reward factors. So capital allocation is really, really important. And we run the rule over everything and think about this the same way as we always have. I mean, Frankie, do you just want to expand on that?

Yes. Maybe just staying into capital allocation for a moment then. So we've got three main strands in terms of growth drivers in terms of allocating capital. So the first one, the rental reversion, I just touched on that. Effectively, that is a low level of capital that's required to realize that under -- that reversionary potential.

Moving into logistics development, the parameters around target returns there are 6% to 8% yield on cost. We're currently operating in the upper half of that range in terms of what we're developing at the moment. And then complementary to that is our data center pipeline, and we're targeting a 9% to 11% yield on cost across those 2 schemes currently. So great opportunities to allocate capital into development. That is typically where we're seeing the best return from a risk-adjusted perspective. But as Colin said, always open to opportunity. We look at the investment side more opportunistically. So we don't sort of set any hard and fast targets on that. But clearly, we've been active in the last few years with regards to the UKCM and the Blackstone transaction.

And it's probably worth adding as well that I think we've got a very strong track record in both identifying but implementing and integrating the acquisitions that we've made to date. So when we acquired DB Symmetry, which gave us access to the U.K.'s largest land platform and that pipeline of very attractive development opportunities that yield between 6% and 8%. And at the moment, we're trending right at the top end of that range. That has been a great sort of success for the business. UKCM, we reported an 18% increase in rental income over the last 18 months. So again, well integrated and adding a really high-quality urban logistics portfolio to the business. And the deal we did with Blackstone just adds to that further. So I think we've got license to do these deals when we see the opportunities based on how successful we've been at integrating them and really extracting the full value from them.

And with the backdrop of what I think is best-in-class big box industrial logistics portfolio with really high-caliber tenants and great quality buildings. I mean that really does cement the quality of -- and give confidence to our earnings and our dividends.

The next question, which almost segues into what you're just saying, actually, are you still seeing strong demand for Big Box logistics space?

Yes, very much so, and it's increasing. I think that if you look at the data, I mean, we've delivered a 4% ERV growth in our portfolio. The market MSCI number was 3.9%, obviously, handsomely ahead of inflation. But we do think that there has -- there's opportunity for that to improve when one looks at the levels of supply and demand in the market. So occupationally, we saw a 22% increase, as you probably heard in the presentation, in take-up by lettings last year to 25.6 million square feet, which is a significant increase on the year before. So I think they're demonstrating an increase in occupier sentiment. There is a bit of a lag effect often with these things, and we think that, that will continue to improve, particularly given that the number of speculative construction starts in 2025 was fairly significantly down. We expect that to manifest in a lower number of construction completions in 2026. So we think the supply side is muted and demand is on the rise, which is good news for the potential for rental growth. Just lastly, on the investment side, we've seen investment volumes increase to around GBP 9 billion in 2025, again, an uptick and another positive momentum. Yields are holding firm at 5.25% prime yield. We are seeing more portfolios coming out into the market. And I think that, that improved price discovery is going to manifest in a greater level of confidence in the market more generally.

Great. Next question is, why is the share price still below pre-rate rise levels if the business is performing well?

Pre-rate?

Pre-rate rise.

Pre-rate rise, okay. Look, I think there's a -- real estate, to some degree, has been a little bit out of fashion in recent times. We've been a proxy for debt. We've been pegged against gilt rate movements. And I think one's got to accept that bond rates have been fairly stubborn. They are coming down now. But I think that the mood music is changing actually, and we're seeing that in our share price. We performed very well in the over the course of the last 12 months and particularly recently. And so I do think you're going to see an increase in love as it were for real estate. But it does take time. It's a -- we could start seeing things start moving very, very quickly. We are now really closing the gap in terms of our discount to NAV. So I think really a case of watching that space. But don't worry, we'll be flying the flag.

Great. And unfortunately, we can't see the names of people who've asked questions, but thank you very much indeed for your questions, and please do keep sending them in. Particularly, this isn't a question, it's a statement, but someone's written this. So thank you very much indeed. Congratulations on moving to the FTSE 100 with you.

Thank you very much.

Thank you, which is great news. Next question is a little bit ambiguous. It says, are you going to keep increasing it every year? We've interpreted that as perhaps relating to the dividend.

The dividend. Well, that's certainly the target is to increase every year. We've got a policy around growing the dividend on a sustainable basis. And I would point you to the target that we announced to the market in the middle of 2025, which was to grow our adjusted earnings by 50% by the end of 2030. So if one assumes that the dividend should move semi in line with that target, that's of a 2024 base position, and therefore, that's 50% growth over a 6-year period. So if you break that back, the growth, it won't be completely linear, but that is broadly a 7% to 8% growth rate on adjusted earnings over that 6-year period. So that is the target, and we believe that the business is very capable of delivering that sort of return to shareholders.

Great. Thanks. The next question is, what percentage -- this is a test of your memory here. What percentage of rent comes from Amazon at the moment?

Yes. I knew that. 13%, and they are our largest client by rental.

And an excellent tenant to have in our lineup in terms of credit spread and resilient income.

Absolutely. And we own some of Amazon's most important buildings in Europe. We've developed a number of them for them. We've done more business with Amazon than anyone else in Europe over the last few years. Obviously, a superb covenant, and we know them very, very well. We have a great relationship with them.

Thank you. The question is, do you have any tenants in trouble?

Well, I think -- look, I think if we look back into the recent past, when we -- when our small urban portfolio was relatively modest, one looks at our Big Box occupier lineup, and it was very, very strong. And we had probably a couple of customers on our watch list. They are no longer in our portfolio. So I think that part of our business is incredibly good shape. Of course, there's a risk reward framework here that one has to consider in relation to how one thinks about real estate and customers. And so with the urban assets, you typically have, as your customers, smaller balance sheet is businesses.

The key, however, is that your risk is significantly mitigated by diversification. And in that circumstance, it's about having the right buildings and the right parks in the right locations. If you have that, you will get demand. And actually, you do want shorter-term leases and you do want vacancy from time to time because it gives you the opportunity to capture true market rents and drive those rents forward. And that's what Ian alluded to when he talked to the UKCM 18% rental growth since acquisition, pretty well 1% per month, which is an exceptional performance. So I think on balance, our portfolio is in really great shape.

If I may, I'll just add to that because you will have seen that we recently got upgraded by Moody's from Baa1 to A3 in part recognizing the overall strength of our tenant lineup and also that diversification that Colin alluded to that actually the smaller assets provide as well within the portfolio. So I think it's good to see that, that credit strength being recognized by obviously a well-respected rating agency.

Next question is, are any units currently empty?

Yes. And actually, ironically, I just touched on that in the last answer. We have a vacancy rate of 5.6% on our portfolio. Underlying on our investment assets is 3.1%, and then we have 2.5% in development assets, which typically we would expect to obviously see to let up during the year. Now there's a lot going on in terms of asset management, letting up buildings. Sometimes you purposely create vacancy, not just through developing speculatively vacant buildings if they're not let prior to the completion of construction, but often to take a building back to have the opportunity to refurbish it from our investment portfolio before we then relet it again into a higher rental tone and driving forward profitability and rental advancement.

Great. The next question, it's actually written are data warehouses, high-risk investments. I'm going to assume that means our data centers high-risk investments.

I wouldn't cast them as high risk. No, anything but in the current market. I think one's got to think about the context of where we seem to be moving in terms of tech. There's obviously cloud services, support and then AI with large language model learning. The demand in that space is growing exponentially and supply has serious barriers to entry, particularly in the U.K. And where one sees a very favorable relationship between supply and demand, one has the opportunity for significant income growth. So -- and noting that the occupiers of data centers are either hyperscalers who are some of the biggest balance sheet companies in the world right now or a very well-respected co-locators who in themselves often have very big balance sheets. You look at some of the U.S. operators by way of example. Indeed, quite a lot of the co-locators are who take leases are backing off those leases against single contract use for hyperscalers. So we'll often see a co-locator represented in a building that they're looking at who may well have a contract that they're fulfilling, say, for Microsoft or Meta or someone. So it's a very, very strong market, really attractive market. I think absolutely not in terms of higher risk. No, it's the opposite.

I'll just add. I think, again, if we just think about from our perspective as a business, we announced our data center strategy just over a year ago. And again, data centers are a very natural adjacency for us to move into. So they look and feel a lot like the large logistics buildings that we are building for the likes of Amazon. So large multi-deck buildings that have to be built to extremely precise standards. And we are very, very familiar with delivering these buildings to clients who are extremely demanding and exacting in their requirements. So we've got a very good track record there. They fall under the same planning use class as well. So again, this is a very natural step for us to make. I think the key point I would make is that we are pursuing a powered shell and pre-let model, which means that we're only deploying significant capital into data centers when we've got planning and we've got one of the sort of high-quality tenants that Colin alluded to on a long-dated lease, only then will we start the construction of one of these buildings. And then that income stream that's generated by that building, not only will it deliver a very attractive return, and we're guiding to anywhere between a 9% and 11% yield on cost, but that will be absolute kind of anchor income within the portfolio, really underpinning the strength of the portfolio overall. And again, reiterating that point about cementing the real credit strength of the business as well.

And then just a very good point. And just to finish on that, our power-first strategy, means that we have the ability to -- once we got planning and a pre-let to deliver the building swiftly. And it's not always the case. The traditional approach to this has been purchase the land, go in for planning consent and apply for power. Power now is acutely difficult to capture in the U.K. in short order in significant scale. So our power-first strategy absolutely is giving us an edge in this regard. And remember, power is portable land isn't.

Great. Thank you. The next question is, do management get paid based on the share price performance?

Short answer is no, we don't. We have a fee based on the net asset value of the business. We take 25% of our fee in shares in Big Box. Those shares are locked in for a period of 12 months. The management team over the last 12.5 years, as far as I'm aware, has never sold a share. And collectively, we now have a meaningful holding between us. I think we're in the top 30 of shareholders in the business as a consequence.

Great. The next question is -- I think this question might be incorrectly wording -- dividend up by 8%. Are you able to continue this growth? I don't think that's correct as frankly, the dividend wasn't up by 8%.

It was up to 8p. It was up by 4.5% in the year. So I think good progression in the dividend, a similar level to what we achieved in the prior year. And I go back to the medium-term target around adjusted earnings for us. That's growth of 50% over a 6-year period, translating into an annual 7% to 8%, not necessarily totally linear, but over that 6-year time frame, an expectation and a target of growing dividends by that sort of level on an annual basis.

Next question is what impact is being a FTSE 100 company going to have?

Do you want to take the governance side of that, Frankie?

I think from a governance perspective, everything that is expected of a FTSE 100 business was equally expected of a FTSE 250 business, and we are fulfilling. So sort of no real change from a government perspective on that step up.

No, I think in terms of the market more generally, I mean, I think one is under more scrutiny. There are obviously different pools of capital because the index tracker stocks that follow the 250 are different than those that follow in the 100. And one would hope that as a consequence of the increased scale of our market cap that we would have the opportunity to welcome some new shareholders to our register. And that's something that we'll be doing on our travels as we promote the business around the globe.

Great. Thank you. There's another question on acquisitions, but I think we've tackled that already, so we'll skip over that one. Next question is what happens to your valuation if U.K. pension funds keep selling property?

Well, look, I think the sale from U.K. pension funds has not been helpful in the recent past. But the market has stabilized really in the aftermath of that. We've now had stable prime yields in industrial logistics of 5.25% since 2022 from memory. And the sell-off that you're talking to has been ongoing throughout that period. So look, I think there are new entrants to the market that see opportunity. We've -- in that period, we've seen a significant rise in private equity in the markets that have, to some degree, stepped in to fill the void of the traditional institutions with investors obviously voting with their feet and taking direct investment decisions often with closed-ended funds, which means that they don't have the same liquidity as they might do if they invested in the business such as [ Asbor ], of example, where you have a share that you can trade, which is one of the attractions, the liquidity. So look, I think what we're seeing is a change in the constituents of the marketplace, but the marketplace holding in good shape. And in fact, I do believe that, as I alluded to earlier, that there's opportunity for real estate to really bounce back. But some of the structures that we've seen in the market evolved -- will be changed forever undoubtedly.

Great. Thank you. And this is our final question, which is Manor Farm, which is the name of our first data center site for those of you not familiar with that. Manor Farm, what more are you able to tell us on the progression there? And are there more data centers in the pipeline?

Okay. [indiscernible] Frankie?

Sure. So we are in for planning at Manor Farm. That planning has been called in by the Secretary of State, and we are expecting a decision on or before the 17th of March. So that's the planning aspect. We have been in negotiations with a number of potential occupiers for the building on a pre-let basis. We have narrowed that down to one party. So we're in advanced negotiations with one party. So one could expect the chain of events to be planning consent on or before 17 March. And swiftly moving into execution of an agreement for lease in the prevailing time thereafter. And that would then allow us to effectively start on site from a construction perspective. And broadly, we would be looking at an 18-month construction time frame for the development out of that first data center with a target PC of the end of 2027. So fully income producing for 2028. So that's the broad program as it stands today on the first scheme. Further beyond that, there is a second project that is in the pipeline. We have secured the land for that project during the course of 2025. And equally, we have submitted a planning application for a data center on that site. So timing-wise, that will sit a little bit behind the Manor Farm scheme, and there will be further updates through time as we make progress with that scheme. And beyond that, there is a 1 gigawatt or potential 1 gigawatt pipeline. We are working our way through that. We are pulling together the necessary pieces of the jigsaw to bring in schemes 3 and 4 and schemes subsequent to that. There's a lot of analysis and diligence that's ongoing. And as Colin alluded to, we are adopting a power first strategy. So it's all about securing the power and securing the applicable land and site for development of future data centers.

Great. Thanks so much, indeed, for your time. I'll hand over to Colin for a few final remarks, and I think [ Aubrey ] is going to close for us.

Thanks, Ian. And thank you very much, everyone, for joining us and for your support. We are particularly pleased with the FTSE 100 milestone after 12.5 years. And perhaps I can take this opportunity to thank our shareholders that have supported us on this journey, all of our stakeholders, the Board of Tritax Big Box and my colleagues and our advisers everyone, in fact, that's contributed to the growth and the success of the business in that time. We really do appreciate it.

And with that, thank you very much for joining us today, and I hope you enjoy the rest of your afternoon. Thank you.

Thank you to the management team for joining us today. That concludes the Tritax investor presentation. Please take a moment to complete a short survey following the event. The recording of this presentation will be made available on Engage Investor. I hope you enjoyed today's webinar.

Good morning, everyone, and thank you for joining us today for our results webcast. We're delighted to have you with us. Before we begin, a quick note to say that today's session is being recorded, and a replay will be available on our website shortly after the event.

Turning to the agenda. We'll start with a brief introduction from our Chairman, Aubrey Adams. He'll then hand over to Colin Godfrey, our CEO, who will provide an overview of the period before passing to Frankie Whitehead, our CFO, for the financial and operational review. We'll conclude with a live Q&A. [Operator Instructions]

And with that, I'll hand over to Aubrey.

Good morning, and welcome to our full year results presentation. I'm pleased to be opening today with a strong set of results, reflecting a year of significant strategic progress and excellent delivery across the business. We have continued to execute our strategy with discipline, strengthen the platform for future growth and the business enters the year ahead with a real sense of momentum.

Before handing over to Colin and the management team to take you through the detail, I would like to take a moment on a more personal note. This presentation marks my final results as Chairman, as I will be retiring from the Board after 9 very rewarding years. It has been a privilege to serve alongside such a high-quality Board, and I would like to thank my fellow directors, past and present, for their insight, challenge and support. I would also like to extend my sincere thanks to the manager and the wider team for their professionalism, commitment and consistent delivery throughout my tenure.

Finally, I would like to thank our shareholders for their continued support and engagement. I leave the business in the strongest position it has ever been with a clear strategy of high-quality portfolio and a management team well placed to continue creating long-term value for shareholders. And it's very pleasing that the company's success has been reflected in its elevation to the FTSE 100, which becomes effective on Monday.

With that, I will hand over to Colin to take you through the results in more detail.

Thanks, Aubrey. Hello, everyone, and thank you for joining us. We entered 2026 with real momentum, improving occupier demand, the successful integration of recent acquisitions and powerful structural trends across logistics and data centers, all of which plays to the strength of our portfolio and our strategy. And it means that we start this year exceptionally well placed to deliver against our 3 growth drivers and our ambitions to grow adjusted earnings by 50% by 2030. This is a business set up for multiyear compounding growth built on capability, discipline and consistent delivery.

Throughout 2025, we delivered strong strategic momentum across our growth drivers. We continue to capture record rental reversion, expanded our logistics development platform and advanced our data center pipeline, including launching our power-first model and progressing as planned with the delivery of our first data center project at Manor Farm, Heathrow. We also fully integrated UKCM, generating very attractive returns and further enhanced our urban exposure with the addition of the Blackstone portfolio.

At the same time, we executed a significant disposal program to recycle capital and increase returns. This is embedding highly visible multiyear growth and translating into financial performance. Despite significant capital recycling, we grew net rental income by 10.6%, increased adjusted EPS by 4.1% and delivered 4.4% dividend growth. The financial results demonstrate that the strategy is working. And as a result, we enter 2026 with momentum, visibility and confidence.

As shown at the top here, our strategy builds on over a decade of consistent value creation and the evolution of the business has been deliberate and cumulative. Since our IPO in 2013, we've sought to create the most compelling supply chain-focused real estate business in Europe. In 2019, we added the U.K.'s largest logistics development platform with the acquisition of db Symmetry, enabling us to create high-quality buildings and compelling returns. And in 2023, we made our first urban logistics acquisition with Junction 6, Birmingham and subsequently further strengthened our offering through the acquisition of UKCM in 2024 and the portfolio of assets from Blackstone last year.

And following 5 years of work in 2025, we launched our power-first data center strategy. The combination of the largest logistics investment portfolio and the largest logistics development platform means that we are the largest logistics real estate business operating in the U.K. This gives us many advantages, including deep market knowledge, strong relationships, a lower cost of capital and increased share liquidity. Each phase has broadened our capability and helped to enhance our performance as the data below shows.

Over the past 10 years, we've grown contracted rent from GBP 100 million to GBP 361 million and at the same time, reduced our EPRA cost ratio by 220 basis points as detailed bottom left. That combination continued income growth underpinned by an efficient cost base has delivered strong and sustained total shareholder returns as seen bottom right. Looking forward, we're primed to deliver, and we're entering 2026 with growing momentum in each of our 3 growth drivers.

Now I'll come back to this later. But first, I'll hand over to Frankie to cover our financial and operational review. Frankie?

Thank you, and good morning, everyone. As Colin said, 2025 has been another strategically important year for the company, and we've delivered excellent progress across our 3 growth drivers. Our active approach to managing the portfolio has resulted in strong operational performance. And with 2 milestone events during the year, the launch of our data center strategy and the acquisition of the GBP 1 billion logistics portfolio from Blackstone. We expect momentum from these events to accelerate our financial performance into 2026 and beyond.

So starting with the headlines. We've delivered strong like-for-like rental growth this year of 4.2%. This has supported an increase in our adjusted EPS of 4.1% to 8.38p per share. And the dividend is up by 4.4% to 8p per share. We have deployed capital into a range of attractive opportunities, which along with valuation uplifts, increased our portfolio value by over 20% this year to GBP 7.9 billion. Our EPRA NTA increased to 187.8p with income growth and ERV growth leading to valuation gains and once again generated attractive returns through our development activity.

Now turning to look at income and earnings growth in more detail. Our earnings growth drivers are clear, and these underpin our ambition to deliver adjusted earnings growth of 50% by the end of 2030. Firstly, net rental income has increased by 10.6%, driven by a full year's contribution from the UKCM logistics assets, a 10-week contribution from the Blackstone portfolio and strong like-for-like rental income growth, net of our disposal activity. Income from development management agreements or DMAs, was GBP 15.5 million and in line with expectation. We guide to DMA income reverting to our GBP 3 million to GBP 5 million run rate for the financial year 2026.

Secondly, our disciplined cost management has further improved our EPRA cost ratio to 12.4%, one of the most efficient platforms in the sector. This reflects the advantages of our externally managed structure and our commitment to cost efficiency as we scale. We continue to exclude the additional element of DMA income from adjusted earnings to maintain comparability year-on-year. Adjusted EPS growth, excluding net additional DMA income, was 4.1%. And with the dividend growing by 4.4% to 8p, our payout ratio is consistent with the prior year at 95%. Looking at the top right chart, you can see the significant embedded rental potential of 37% between current passing rents and the estimated rental values across the portfolio. This provides us with great near-term visibility over the future growth in net rental income, and we'll be coming back to this later in the presentation.

Let me now turn to capital allocation and our robust balance sheet. As already noted, the portfolio increased in value to GBP 7.9 billion. Looking at our allocation of capital on the top right, you see that during the year, we deployed development CapEx in line with our guidance of GBP 231 million into logistics development and GBP 209 million into our first 2 data center schemes. In addition, our logistics acquisitions totaled over GBP 1 billion, the majority of which was the portfolio acquired from Blackstone. This portfolio will deliver a 6% running yield in 2026 and is immediately accretive to adjusted earnings.

And we've made excellent progress on capital recycling, shown here on the bottom right, with GBP 416 million of assets sold or exchanged to sell in the year, which means we are now 80% through the disposal program of the UKCM nonstrategic assets. These capital movements and the increase in net debt, which part financed the transaction with Blackstone, resulted in a year-end loan-to-value of 33.2%. And with the GBP 62 million of disposals that were exchanged and have now subsequently completed post the year-end, our pro forma LTV reduces to 32.7%. Drawing this all together and including the equity consideration issued in the year, our EPRA NTA increased to GBP 5.1 billion or 187.8p per share, up 1.2%.

We have again delivered compelling underlying total accounting returns. Starting on the left-hand side with our 4.7% earnings yield. We added 1.9% and 2.6% to returns from our investment and development portfolios, respectively. And with capital value performance across the whole portfolio at 2.4% over the year, we delivered an underlying total accounting return of 8.5%. We have separated 3 nonrecurring items here from underlying performance, which span the nonstrategic asset performance, an impairment against our land option portfolio, which I covered at the half year and the technical NTA dilution arising from the shares issued as part consideration for the Blackstone portfolio.

This results in the reported total accounting return of 5.5%. And it's worth stating here that we have yet to feel the full financial impact of the Blackstone portfolio of assets and to a larger degree, our live data center projects. And so we're expecting a larger contribution from these components to total returns as we move forward. A component of this performance shown along the bottom was our portfolio ERV growth of 4% over the year, which is attractive in the context of underlying inflation. Our portfolio equivalent yield has remained stable at 5.7%.

Moving on now to our asset management performance. Colin highlighted this as our first key growth driver, and we've delivered another year of strong progress. Our asset management team has added GBP 10.5 million of contracted rent through rent reviews and other lease events. Open market rent reviews and hybrid reviews performed particularly strongly, averaging a 36% and 21% increase in passing rent, respectively, all aiding our improved EPRA like-for-like rental growth of 4.2%. And as the bottom left-hand chart highlights, we will see a greater proportion of the portfolio subject to review in 2026 and 2027. And this will deliver an acceleration in the rental income capture over the next few years.

And finally, moving on to the right-hand side. Our portfolio vacancy has reduced slightly to 5.6%, reflecting the net effect of our portfolio activity and as expected, the greater level of rotation within the urban assets. Before I move on to our development activity, I want to briefly highlight an important component of the Blackstone transaction, which is the innovative 3-year reversionary bridge. There is a lot of detail on this slide, but essentially, the portfolio acquired came with GBP 20 million of cash, acting as a bridge between the passing rent at acquisition and the market-based ERVs across the portfolio. The release of this reversionary bridge will be recognized within adjusted earnings over the next 3 financial years on a reducing annual basis so that it tapers in line with the actual capture of market level rents as set out at the bottom of this slide. This earnings contribution should be viewed as a baseline for performance from the portfolio with upside available through rent review outperformance or an improvement in portfolio occupancy.

Our development platform is our second key growth driver and continues to deliver strong returns for us. During the year, we commenced construction on 1.4 million square feet of space, which has the potential to deliver over GBP 13 million in headline rent. We secured 0.4 million square feet of development lettings this year, adding nearly GBP 4 million to contracted rent at a yield on cost right at the top end of our 6% to 8% target range. Finally, it's fair to say 2025 was a year of macroeconomic uncertainty. This continued to weigh on the pace of occupier decision-making. But as Colin will outline in a moment, occupier confidence is improving, and we ended the year with 1.8 million square feet under construction, representing GBP 19.6 million of potential rent, of which 53% was pre-let.

The importance of sustainability to our business is clear, and it continues to play a vital role in driving performance and returns. We provide what clients want, highly modern buildings that are powered by clean energy, are energy efficient and have the power resilience to accommodate future automation. Excluding the portfolio of assets acquired in the year, our EPC rating improved to 86% at B or above. And with the portfolio from Blackstone included, this remains stable versus 2024 at 79%. These new assets present an opportunity for improvement where targeted investment can deliver both sustainability benefits and meaningful value enhancement. Our rooftop solar program increased capacity by 4.5 megawatts in the year to a total of 29 megawatts. And we also continue to invest in natural capital and community programs. This year surpassing 62,000 young people positively impacted through our social value initiatives. All these sustainability actions support long-term occupier demand, reduce obsolescence risk and drive resilience across our estates.

Turning to our balance sheet. This remains a real strength and provides flexibility as we invest for growth. During the year, we completed several important pieces of financing. We refinanced and upsized our GBP 400 million revolving credit facility. We issued a new GBP 300 million 7-year public bond at a 4.75% interest rate. And we agreed an acquisition facility to part finance the Blackstone transaction. At the year-end, as set out along the bottom of this slide, we had very strong financing metrics, along with a well-staggered maturity profile and access to a diverse pool of debt capital. These metrics supported our Moody's upgrade to A3 stable in the year.

And we've shown on the right how our capitalized interest is evolving, reflecting the higher level of capital investment in live development projects, which is around 2.5x greater than this time last year. Interest capitalized against our logistics developments remains modest due to our capital-light land option model and relatively short construction periods. An addition in the year is the interest capitalized against our data center developments, reflecting earlier land drawdowns, greater infrastructure investment and longer construction periods. However, it's important to note that this cost of finance is fully captured within our underlying appraisal return targets.

So looking at some forward guidance. Our development CapEx guidance for 2026 remains unchanged. We expect to maintain our GBP 200 million to GBP 250 million run rate for logistics development and GBP 100 million to GBP 200 million into data center development this year. And we expect to achieve returns in line with previous guidance at between 7% and 8% for logistics currently and 9% to 11% across our 2 data center projects. As we highlighted at the point of the Blackstone transaction, we expect disposals to run at an elevated level this year of between GBP 400 million to GBP 500 million to finance our accretive development activity as well as targeting an LTV at the lower end of the 30% to 35% range.

This is all part of our disciplined approach to capital allocation, which ensures we remain optimally positioned for the next phase of growth. This discipline, combined with our access to the multiple funding levers set out across the top of the slide, gives us the appropriate financial flexibility to identify and pursue opportunities as and when they arise, enabling us to invest strategically and proactively for growth.

And so drawing all of this together, 2025 has been a year of disciplined delivery and strong financial performance. We're entering 2026 in a great position with a strong balance sheet, multiple funding levers and a clear line of sight across our 3 growth drivers. Our considered approach to managing risk, combined with the scale of the opportunities ahead, underpin our potential to grow adjusted earnings by 50% by the end of 2030.

And with that, I will hand you back to Colin.

Thank you, Frankie. Turning now to our strategy. The platform that we've built strengthened again this year is now positioned for the next phase of growth. It's diversified, insight-driven, operationally sophisticated and capital efficient. And crucially, it's aligned to the structural demand drivers underpinning logistics and data centers. So we're entering 2026 with the right assets, the right people and the right opportunities.

And to drive value in this market environment, our strategy has a simple objective: convert structural demand into superior shareholder returns through a focus on high-quality assets, a direct and active management approach and an insight-driven development model. This strategic focus has created 3 clear and powerful drivers in our business. Firstly, capturing record rental reversion, which requires no or limited capital and delivers high certainty returns. Secondly, developing new logistics assets at a 6% to 8% yield on cost, supported by long-dated capital-efficient and flexible land options. And thirdly, developing pre-let data centers targeting a 9% to 11% yield on cost, enabled by our innovative power-first model. These drivers give us resilient growing income, combined with opportunity for substantial capital growth.

Let's start by looking at the U.K. logistics market, where demand is strengthening. Take-up increased in 2025 to 25.6 million square feet, up 22% year-on-year and the best level since the pandemic. Demand is broad-based across e-commerce, retail, manufacturing, defense and 3PLs. Lettings are typically still taking extended periods of time to close, which was accentuated in 2025 by elevated macro uncertainty. But importantly, occupier confidence is improving, and this is feeding through into activity with nearly 10 million square feet under offer heading into 2026.

Turning to supply. 20.9 million square feet was delivered in 2025. Vacancy ended the year at 7.1% with new space remaining broadly stable and the secondhand component increasing to nearly half of the total. Occupiers are rotating into higher quality modern buildings, exactly where our portfolio is positioned. And looking ahead, supply is tightening. Space under construction is down 28% year-on-year with speculative development almost 50% lower, pointing to fewer completions in 2026. And against that backdrop, rents continue to grow ahead of inflation with market ERVs up 3.9%. Investment capital markets volumes also increased, aiding price discovery with nearly GBP 9 billion of transactions, noting that the prime yield has held firm at 5.25% since 2022.

Turning back to our business. Our portfolio has been curated to maximize our opportunities. We now have a broader range of unit sizes with greater urban penetration and more assets benefiting from open market rent reviews, improving pricing power in a rising market. This is all underpinned by long-dated big box income from a modern portfolio let to some of the world's most recognized companies, as you'll see here on the right. It's exactly the right mix heading into 2026.

Our first major growth driver is continuing to capture our in-built rental reversion. And this is an exceptionally attractive and growing opportunity. Through rental reversion and vacancy, we have the opportunity to increase rental income by over GBP 100 million, of which 73% can be delivered within the next 3 years. Delivering this increase requires minimal capital, and our team has a strong track record of meeting or exceeding ERVs. This is high certainty, high-quality income growth and is firmly within our control.

Frankie updated you on the excellent progress made in investment sales to support our recycling program. This included GBP 299 million of UKCM nonstrategic assets sold since May 2024 and a further GBP 62 million with contracts exchanged, leaving GBP 86 million in 2 assets, representing around 1% of portfolio value to be sold within the next few months. And one of these is now under offer. So in aggregate, these sales are ahead of the effective cost of acquisition.

This is disciplined capital recycling, selling noncore assets and reinvesting into high-returning logistics and data center opportunities. But the primary reason for acquiring UKCM was to capture a high-quality urban logistics portfolio with significant in-built reversion. And we've made great strides in capturing this, having increased contracted rent by 18% since acquisition, supported by strong rent reviews, lease regears and new lettings. And this blueprint for success is mirrored in the Blackstone portfolio transaction, which completed late last year, where we have acquired a high-quality urban logistics portfolio at below replacement cost. These assets are now fully integrated into our platform, and we're already making excellent progress with our asset management initiatives, letting up vacancy and capturing significant rental reversion as demonstrated by the examples shown here on the right-hand side of the slide.

Our second growth driver is logistics development. This platform is capable of delivering more than GBP 300 million of additional rental income, nearly doubling today's passing rent. It's capital efficient, supported by long-dated land options and can be flexed according to market conditions and our strategic objectives. As Frankie mentioned, some lettings that we expected to close in Q4 2025 slipped into this year, such that 2026 development activity is primed for delivery with nearly GBP 15 million of rent close to being secured.

We have nearly GBP 9 million of pre-let rental income in solicitors' hands, over GBP 5 million of rental income in advanced negotiations, strong occupier engagement across the pipeline, including a 55% increase in pre-let inquiries and yields on costs tracking at the upper end of the 6% to 8% range. Our development platform is, therefore, a significant driver of multiyear income and value growth.

And our third and most exciting growth driver is data centers. Demand for data center capacity is strong and is expected to grow significantly, noting that colocators dominate the London market. The constraint to supply in this market is power. There isn't enough in the right locations deliverable within the right time frames. Our power-first model solves that constraint, enabling faster delivery, lower risk and materially higher returns.

In the 12 months since we announced our data center strategy, we've created an exciting pipeline of opportunities with more than 230 megawatts of power across our first 2 sites and the potential for GBP 58 million of annual rent, targeting an attractive 9% to 11% yield on cost. At Manor Farm, our first DC project, momentum continues to build. We're in advanced negotiations on a pre-let with an occupier, have agreed a contractor and are primed to make swift progress. We're expecting a planning decision imminently with the planning expect indicating a determination on or before the 17th of March 2026, keeping us on track to begin construction as planned. And we have also made good progress at our second data center site, where we expect a planning decision this year. These are just the first of a series of projects in a pipeline of potential opportunities of over 1 gigawatt.

When you bring the 3 growth drivers together, the scale of the opportunity ahead of us becomes clear. We can more than double our rental income to over GBP 800 million across the medium and longer term. We show here the contribution from our 3 growth drivers: rental reversion in gold, development in blue and data centers in red. Today's GBP 337 million of passing rent on the left bridges to GBP 361 million of contracted rent through the burn-off of rent-free periods and signed agreements for lease. You can then see how the growth drivers generate a near-term opportunity to increase passing rent to GBP 425 million driven by reversion and development. A medium-term opportunity to increase this to GBP 562 million, reflecting further reversion and development potential plus a very meaningful additional upside from our first 2 data center projects.

And finally, there is the significant long-term opportunity within our extensive logistics land portfolio, taking rent to well above GBP 800 million. Key here is that much of this value is already baked into our business. And as you can see at the bottom, none of this includes future rental growth or additional asset management upside. And crucially, it excludes any benefit from our 1 gigawatt pipeline of further data center opportunities. Now this is why we are so confident in delivering sustained earnings growth and compelling returns for shareholders.

So to conclude, we have a resilient and high-quality income stream, an attractive and growing dividend and clear line of sight to material earnings growth with an ambition to grow adjusted earnings by 50% by 2030. We have a strong balance sheet, a proven model and powerful multiyear drivers. And critically, the business is primed for delivery in 2026, particularly through the early stages of our data center program. It's a compelling combination, resilient income, strong and compounding growth and the potential for exceptional returns from data centers in the years ahead.

Thank you for listening. And with that, I'll hand you over to Ian, who is coordinating Q&A.

Good morning, everyone, and welcome to the live part of our results presentation this morning, where we are opening up the call to your questions. And I'm joined this morning by -- in addition to Colin and Frankie, Henry Stratton, our Head of Research, to the right of me. And to my left, Charlie Withers, our Head of Director of Development. And I'm being supported on the phones by Sergey, who will coordinate calls. [Operator Instructions]

So, I'll hand over to you to open up the lines for questions.

Our first question comes from John Vuong from Kempen.

On data centers, so it's considered critical national infrastructure, which means that obtaining planning approval shouldn't be a major hurdle. Just trying to understand the Manor Farm progress. Could you provide a bit more color on what has happened and how this impacts your expected time line? And do you see any risk coming from the first expansion plans?

Thanks for the question, Jonathan (sic) [ John ]. Catch the last part of that. But I think you're looking for a bit of color on the progress we've made at Manor Farm. So we submitted planning earlier last year. The planning application proceeded to the inspector, where there was a hearing. That process took place and the planning application was called in by the Secretary of State for determination by the government, which we see as a positive move. The inspector's report has been submitted to the Secretary of State. And the Secretary of State has indicated that a decision should be expected by the 17th of March. So we're not far from that date. We should be hearing very soon. We remain positive in terms of the expectation for the outcome from that decision.

And if I just add to that as well, John, I think the key point as well is that we very much remain within the parameters of the original timetable that we outlined to the market back in -- I think it was January of 2025.

And just given the risk...

[Technical Difficulty]

Sorry, John. I wouldn't get a word, I'm afraid it's a terrible line.

With this, we'll move now to the next question from Tom Musson from Berenberg.

Just a question on your target to grow earnings by 50% by 2030. Since you announced that initial target, you've obviously acquired the Blackstone portfolio, which is accretive as you've described. Given the visibility you've got elsewhere on the like-for-like growth plus the confidence you have in delivering on new development, including data centers, isn't that 50% growth target now just very conservative? And could it, in fact, be materially higher?

Thanks very much for the question. Frankie, do you want to touch on that? I mean we can do a tag team.

Yes. Look, I think we've got lots of embedded growth as we set out this morning, pointing to our 3 growth drivers there, Tom, the rental reversion that's going to be the biggest contributor to the growth over time, logistics development and data center development. Look, it's a medium-term target. We're certainly on track to deliver that. I think as we perhaps get closer to that 2030 date, we may look to revise the guidance. But as we sit here today, very confident in terms of the delivery, but we're still maintaining the 50% earnings growth by 2030.

And just to add to that, I think if you think about the context of the Blackstone acquisition and the increase in our urban component to our portfolio and how we've performed on the UKCM acquisitions. We've delivered an 18% income growth in as many months on UKCM. We believe that the Blackstone portfolio has similar attributes in terms of asset management potential. And so we believe that, that has the potential to perform very strongly for the business in the medium term, underpinning Frankie's reassurance in terms of our expectations for that tail growth.

Okay. That's clear. And maybe just a second one on Manor Farm. Assuming that you do get a positive planning decision there, how will you expect to phase the capital profits? I see you're talking to accounting for some of those in '26. Just to get an indication of how that phases.

I think if you assume that the planning is delivered this year along with the pre-letting, I think a substantial part of that capital profit would come off of the back of those 2 events. So obviously, there's a bit that comes through during the course of construction, and there will be a bit at the back end once the project is fully derisked. But a substantial part as we sit here today, would be expected in the current financial year off the back of those 2 milestone events, the planning and the pre-letting delivery.

Our next question is from Suraj Goyal from Green Street.

Just a couple of questions from me. Firstly, does the ERV growth of 4% for the full year versus the 2.3% at the first half suggest a slowdown in rent growth or any concerns in certain locations? And a follow-on from that, what do you see in terms of sort of net absorption of industrial space across the U.K. and your portfolio more broadly? I know you touched on it a bit during the presentation.

And then the second question, could you share some color on how the integration of the Blackstone portfolio is going? And 4 months on, there are parts of the portfolio that are perhaps more challenging or asset management intensive.

Okay. Well, I think we take that in reverse order, and then I'll deal with the first -- the last question and then hand over to Henry Stratton. The integration has gone very well. It's still very early days. We are really pleased with the quality of the portfolio that we've acquired from Blackstone. Obviously, this early stage has been about reaching out to our clients, engaging with them, understanding what they're looking for in terms of occupational interest, whether or not we can improve the opportunity for them. And just really talk to them about how happy they are in their space.

And in acting -- really, we're putting together business plans, which we started actually prior to the acquisition and starting to engage with customers in acting those business plans. Some of that will include refurbishments, et cetera, as well. So early days, but going very, very well and very, very similarly to UKCM acquisition of that portfolio, as I alluded to earlier.

Henry, do you want to...

Yes. So picking up on the net absorption number, first of all, that was GBP 11 million for the U.K. across 2025. And we've actually now seen 3 half years of incremental improvement in that net absorption figure. So we're seeing positive momentum there in terms of what's happening in the market. It was GBP 10 million the year before, but lighter in the second half of that. So we're seeing that improvement.

What we would say is that we're seeing a lot of rotation at the moment from occupiers into higher quality, more modern new space. And as they consolidate and rotate, they're also giving up some of those older buildings. So the vacancy number in the U.K., it's secondhand stock now, which is pushing that higher and it's high-quality new space of the type that we own and develop that occupiers are moving into.

And then just in terms of the rental growth outlook, you're right, 1.5% rental growth in the second half of this year at a market level. But again, we see a lot of dynamics in the market that are encouraging on that front. So first of all, on demand, we're seeing growth in the economy. We're seeing retail sales increase, online penetration improve. We're seeing occupier confidence build, but we're also importantly seeing occupiers making more use of their networks. And as I said, that's driving the 25 million square foot of take-up that we saw last year, which is a significant improvement. So encouraging trends as we head into 2026.

Yes. And I think just to add to that, our ERV growth of 4%, very much in line with MSCI at 3.9%. And I think the tone that we're seeing in terms of conversations with occupiers is increasingly positive, alluding to what Henry said in terms of their desire to make investment in newer high-quality space. So we don't -- we certainly don't see there's any significant trend there in terms of the level of rental growth, and we expect 2026 to be a strong year moving forward.

The next question is from Neil Green from JPMorgan.

Two quick questions from me, please. The first one, just on the Blackstone reversion bridge, just to check, if you beat those ERVs, is that all upside for yourselves? Or is there any kind of type of clawback on that, please? And secondly, you've shown a couple of times how your cost ratio has come down over recent years. And looking at the situation today and hearing your comments on the call, it feels like there's a lot of opportunity to go for. Are there any or do you envisage any resourcing pinch points at this point, please? That's all.

On the first point, there's no clawback arrangement. So all of that upside would be to the benefit of Big Box and Big Box shareholders.

Yes. And on the cost ratio point, Neil, we have resourced into the UKCM transaction and subsequently and into the face of the Blackstone transaction. So we are fully staffed. But noting, of course, that those costs are cost to the manager and not to the company. So you can rest assured that we are making sure we've absolutely got all of the right people on the ground, high-caliber people that are engaging, and we're getting some really good results as a consequence of that very, very active approach that we're taking to those assets.

The next question is from Paul May from Barclays.

Just a couple from me. The like-for-like rental growth and the expectation of reviews and revisions -- reversions, sorry, coming up. It looks like like-for-like rental growth could accelerate over the next few years up to sort of 8%, 7% and then back down to sort of 4% from 28%. Is that a fair assumption in terms of how that will flow through?

And then second question, can you just remind everyone on your capitalized interest policy? It looks to have doubled or more than doubled year-on-year, now about 7% of recurring income. Just wondered what is the rate that you use? And what is the policy on what is capitalized? Is that on any of the land or land options that you have, for example?

Okay. Thanks for the question, Paul. So the first thing is to remind everyone, we have a 28% reversion in the business. That's held firm. So the rate of capture has been broadly in line with the rate at which the market rents have continued to grow. As for looking forward in terms of like-for-like, I mean, Henry might make a comment on this, but we do expect -- I mean obviously, off the back of the current rates, we do expect the potential for that to improve. But we're certainly not guiding 7% to 8%, Paul, for the near term. We think that a range in the sort of 4%, 5% in the current market. I mean obviously, we'll have to keep an eye on how that progresses. We are seeing improved sentiment occupationally.

Henry, do you want to make any comment on that?

Well, I think just to add on the market side, we're still seeing that rental growth building the reversion side of it. So it's a positive picture there, which obviously the business is then aligned to capture that reversion over time.

Frankie?

Yes. So on capitalized interest, obviously, the new feature is the data center investment that we made during the course of the year. The level of capital invested in development activity is about 2.5x greater than this point last year and hence, why that number has grown during the course of the last 12 months.

The policy is we capitalize from the point of land drawdown. So nothing pre that. So we're not capitalizing interest on the land option component. Obviously, for the data center, the capital intensity is going to be slightly higher. We're drawing down land earlier. We're investing into infrastructure earlier and the construction cycles are slightly longer on that. So that's where we are.

So just to follow up on that, what's the rate that you use on capitalized interest? Is it the actual cost of debt? Is it marginal? Is it your average?

So on logistics, we are borrowing from a general pool. So it's the blended cost of debt, the actual blended cost of debt on that. For data centers, we're thinking about that from a sort of project finance perspective. So it's the actual cost of finance that is going into that project at the moment. So we're borrowing under the RCF currently for the first -- the early phases of those 2 projects. So it's the cost of borrowing under the RCF for the data center component.

And sorry, just a quick one on the like-for-likes. I mean the 7% to 8% you get to from looking at the reversion that you highlight and the portion of the rent that is being pushed through in terms of the rent reviews, is there then a risk that you're not -- are you saying you're not going to capture the full reversion on those reviews? Is that why it's more 4% to 5% than 7% to 8% for the next couple of years? Or is it just a timing factor?

No. I think this -- look, we're not giving any specific guidance on any particular period, Paul. But we are confident in the earnings bridge over the medium term. 2026 is expected to have a higher level of rent reviews. I think it's 32%. And you'll see on Slide number -- Ian's got it there.

Slide 22.

We've set out the levels of rent that is capable of being captured in that period. What we're not saying is that we're definitely going to capture each of those amounts in each of those periods. So it could ebb and flow a little bit over the course of those years, but we are pretty confident in capturing that over that period of time more generally.

And to put that into context, we reviewed about 21% of the portfolio over the course of 2025. So 32% up for review over the course of 2026 with that GBP 27 million of rental reversion that we think is potentially capturable within the period.

So it could be 7% to 8%, but if we capture all of that, to your point.

Our next question is from Max Nimmo from Deutsche Bank.

I had one question on like-for-like rental growth, but I think you've kind of answered it there. Maybe just on the second data center, I know it's early days, but is there anything you can kind of tell us on that front roughly in terms of timing and your thinking on that one?

Charlie, is that something you'd like to?

Yes, yes. We are -- it's a plot we acquired last year, which we are running on the planning process at the moment, which we're looking to achieve consent during the course of this year. Discussions are going well, and we will look to bring that forward again in a similar fashion to Manor Farm with a pre-let backed construction program.

[Operator Instructions] The next question is from Jonathan Kownator from Goldman Sachs.

Actually, just a follow-up to Max's question. Any discussion already on the site with potential occupiers? And also, can you help us understand how you're thinking about bringing forward the rest of the DC pipeline? Any progress there? And would you consider, again, any joint venture partners, things like that?

Sorry, John, is that the occupier question? Was that relating to the second site?

Yes, correct. I don't think you touched upon that, maybe it's a bit early.

Charlie, would you like to?

We are quite early in the process there, but we have had initial engagement with a number of parties. So it's encouraging.

Ian, would you like to?

And is it hyperscaler as well? Or what type of occupiers are you targeting for that?

Similar operators to the people we're engaging with at Manor Farm.

And just with regards to the pipeline, I mean it's very analogous to what we're doing on the logistics development pipeline where we are taking the sort of the gigawatt potential and working each of those schemes through and securing the necessary steps to turn those into what we would call kind of credible delivery state. So again, we'll update the market in due course as we continue to progress that. But as Colin mentioned in the presentation, there's a lot there for us to go for.

And it's -- all of these sites are following our power-first strategy. where we're looking to control and deliver a significant amount of power that would be attractive to major DC operators. All of these sites are within the key locations within the U.K. and focus primarily on the London availability zone.

And maybe just one follow-up to that then. How are you finding bringing on that power? Obviously, you have secured agreements, but is bringing on the power effectively upon your schedule? Or are you finding still having secured the principle that it's not that easy to convert into hard infrastructure?

Yes. So the point here, John, is really the way we go about what we're doing. And this is something that we've been working on for 5 years, the power team, progressing the power delivery. It's -- I think one needs to think about it from the context of the fact that we are not a typical consumer of power. We're working collaboratively with a JV partner power generators. And so we are, if you like, partly in control of the process and the delivery time lines, which gives us a much stronger conviction in terms of the ability to deliver that power when we need it.

So we're not at the whim of the power industry and if you like, sitting in the queue, as is ordinarily the case for most property developers who would acquire a site, then look to achieve planning and power subsequently, hence, hitting the buffers with potentially in the context of [ slow ] by way of example, up to a 10-year wait. So we're not doing that. We are taking a very, very different approach, which we believe is very innovative and it's something that isn't capable of being replicated in the near term because it's taken us several years to where we've got to in that journey.

Thank you. It seems there are currently no further questions over the phone. With this, I'd like to hand the call back over to you for any webcast questions. Over to you, Ian.

Great. Look, I think we'll turn to the webcast. So thanks for submitting your questions through that as well. So starting from the top, a question from John Vuong at Kempen. He asks, what's the size of development starts that you're expecting for 2026, given that you're seeing high inquiries?

Second point to that, on the lettings in solicitors' hands and in advanced negotiations, how much of it is new post budget and how much is more from delayed decision-making? And how have you seen occupier demand progress at the start of the year?

Okay. Charlie, I don't know if you've got all of those...

I missed the middle one. I got...

We'll brief you. So development starts '26, is the first question.

Development starts 2026. I think we've guided previously that our CapEx for this year is somewhere between GBP 200 million and GBP 250 million, which is in line with previous years. Square footage will vary depending on the customers that we're talking to. So -- but our CapEx guidance is in line with previous years.

In terms of occupier demand, which I think was your final question, we are seeing increased levels of occupier demand across both the standing stock portfolio with those buildings that we've got recently completed or currently under construction and a substantially increased level of pre-let build-to-suit inquiries compared to 12 months ago. So we're encouraged by the level of occupier demand and the prospects for increased lettings and development this year.

And that's really reflective of what we're seeing in the market more generally that Henry alluded to earlier. And I think the other question, the mid-question was of the amount in solicitors' hands and in advanced negotiations. The question was about how much of that has been delayed essentially in terms of decision-making, Charlie?

Well, the square footage that we have in solicitors' hands is 0.9 million square feet, GBP 8.9 million of rent. That -- all of that we were expecting or hoping would slip into last year. But as with build-to-suits, it's -- they're more challenging to get over the line than deals on standing stock, and those have slipped. So I hope that answers that question.

And I think Henry has touched on this a little bit later. We have seen in recent times, occupiers, we've sort of used the expression sitting on their hands. There has been reticence from C-suite to make really significant investment. And some of these buildings, as Henry alluded to, if you're coming out of a secondhand building to a very large significant facility and you are investing in automation, that is a long-term, very significant investment you're making in the business.

And companies have been holding back as a consequence of geopolitical risk, some of the economic shocks that they've seen. But we are now starting to see more positive sentiment with occupiers planning for these major decisions. That's the mood music coming through. That's what we're now seeing on the ground in terms of the letting activity. And that's why we're pretty confident in terms of the outlook for the market moving forward. Next question?

Just checking. I think that might be it. I think we might have exhausted our questions, Colin.

Okay. Well, it remains then for me to thank everyone for joining. I'm very thankful for you taking the time to join us. The Chairman mentioned our entry to the FTSE 100 at the start of the presentation. And I just wanted to take the opportunity to thank all of our stakeholders, advisers, everyone that's helped us along the journey of the last 12.5 years to reach this milestone, which we're very proud of, and we're really thankful for your support over that time and also for my colleagues that have worked tirelessly alongside me over that period.

So thanks to everyone. I hope you have a great day, and we look forward to catching up with you soon. Thank you. Bye-bye.

Good morning, everyone, and thank you very much for joining us at short notice to join us as we present this morning's announcement of our portfolio acquisition. We'll run you through this morning's announcement in a bit more detail. We have had to accelerate this materially given the leak over the weekend. So please forgive us if we're not as polished as we normally are, but we are keen to get as much information to the market as quickly as possible. And I'd also just like to take this opportunity to thank the team who have worked through the night to deliver this.

So I'll hand over to Colin to get things started.

Well, good morning, and thank you for joining us. I'm incredibly excited to announce this exceptional transaction. The acquisition of a carefully selected portfolio of high-quality urban logistics assets in key locations and attractive big box units for a total consideration of just over GBP 1 billion. This transaction enhances our integrated network of first to last mile logistics assets in the U.K. And as a natural progression of our strategy, the scale and breadth of our footprint means that we can offer clients the interconnected real estate space that they increasingly need in more locations, further strengthening our leading position in U.K. logistics.

The portfolio that we're acquiring is highly complementary to our existing portfolio. It brings together the best of both worlds, a high-quality, well-located urban logistics portfolio with significant near-term rental reversion and additional asset management potential plus high-specification big box assets that provide resilient long-term income.

So let me open by setting out why this transaction is so attractive for Tritax Big Box and its shareholders. The strategic and financial rationale of this transaction is compelling. Firstly, I must emphasize quality. We're acquiring an exceptional high-quality reversionary urban and last-mile logistics portfolio in prime locations, which is being carefully curated over several years. This broadens our footprint in key micro locations across the Southeast and Midlands, markets underpinned by strong fundamentals.

In addition, we're acquiring mission-critical big boxes, all of which are complementary to the stature of our existing high-caliber logistics portfolio. Put simply, we couldn't organically create a portfolio of this quality in these great locations and with the necessary scale at such a compelling price. Key here is the current and future affordability of these assets to our clients, not just the current passing rents, but also the ERVs, which further complement our existing strong reversion. This provides significant rental growth headroom for the future, and Bjorn will cover this shortly.

Secondly, the timing and pricing of this transaction are attractive because we're purchasing these assets at a level materially below their replacement cost, primarily reflecting the quality of their locations and the current cost of rebuilding them. And thirdly, this transaction delivers value for shareholders from day 1. The acquisition is expected to deliver mid-single-digit EPS accretion in the first full year and be meaningfully accretive thereafter, supporting our ability to deliver sustainable earnings growth.

And with a low EPRA cost ratio, top line benefits of this acquisition efficiently convert into bottom line earnings and dividend growth. We have also identified meaningful active management opportunities to add value. Consequently, the portfolio's IRR is expected to be well above our cost of capital, enhancing total returns for shareholders.

And finally, 40% of the consideration is being funded by the issue of new Big Box shares at a material premium to the prevailing share price. Moreover, we're pleased to welcome Blackstone, a world-leading real estate investor as a shareholder, noting that they will hold approximately 8.6% of our pro forma shares.

In summary, this acquisition is an exceptional opportunity and is a natural and highly complementary extension of what Big Box already does best: driving performance through our 3 growth drivers with a particular focus on accelerating income growth and delivering attractive risk-adjusted returns for shareholders.

Turning to the transaction structure. We're acquiring 41 properties comprising 409 units from Blackstone for a total consideration of just over GBP 1 billion, specifically GBP 635 million in cash and GBP 377 million in newly issued Big Box shares. The shares will be issued at a price of 161p per share, which is approximately a 14% premium to the closing price on Friday.

The cash element will be funded through a combination of existing resources and a new GBP 650 million short-term acquisition facility. Blackstone's confidence in the portfolio's reversion rate potential is underlined by a GBP 20 million rental reversionary bridge, acting as a partial bridge between the current passing rent and the reversionary rents. Their commitment is further demonstrated through a lockup and standstill arrangement on their shareholding.

Completion is expected in the coming days with a formal announcement to follow. Post completion, Blackstone will own approximately 8.6% of Big Box, reflecting both their ongoing strong conviction in the U.K. logistics sector and confidence in the Tritax Big Box team's ability to deliver attractive shareholder returns. So let's look in more detail at the attractive market dynamics underpinning this acquisition.

Firstly, the urban market dynamics. On the left, the urban logistics market is characterized by a broad and increasingly high-value occupier base. Demand is diverse across retail, manufacturing, logistics and SMEs. Market dynamics are attractive. Competition for land in U.K. cities is intense and the new development is constrained by planning and land availability. Vacancy remains low at approximately 10% across the outer Southeast and regional U.K. markets with higher quality portfolios such as the one that we're acquiring today, exhibiting overall lower vacancy rates.

We expect these factors to continue to support attractive levels of rental growth with more than 4.5% per annum forecast between now and 2029. Looking then at the big box market dynamics. On the right, this transaction also complements our core big box portfolio. The big box market is underpinned by attractive long-term structural drivers of demand. And despite all of the external uncertainty, demand has proven to be very resilient with an encouraging level of new requirements and high levels of renewals.

The acquisition portfolio has been carefully selected to complement these strengths, combining the best of both markets and positioning the business to benefit from ongoing structural trends in U.K. logistics. This transaction is fully aligned with our strategy and our growth drivers, which, as a reminder, are firstly, capturing record rental reversion and active management; secondly, expanding our flexible logistics development pipeline; and thirdly, delivering exceptional returns through pre-let data center development.

This acquisition is particularly compelling because it amplifies the first of these drivers. As I've outlined, the assets we're acquiring offer substantial near-term reversionary potential, located in markets with solid fundamentals and where our asset management expertise can unlock significant further value. This is not just about adding scale. It's about adding the right kind of scale, properties in the right locations with the right characteristics to drive long-term performance.

So this acquisition is a natural progression in steadily increasing exposure to urban logistics that big box has been purposefully and successfully undertaking over recent years. It builds on the momentum established through the integration of UKCM and other targeted investment acquisitions. This has seen big box increase the urban weighting within the portfolio from 2% in 2022 to over 20% through this transaction.

In an increasingly polarized market, we are purposefully aligning the business in the 2 most compelling size brackets, mega box and small urban box. As well as enabling us to broaden our client offering, this deliberate strategy positions us well to deliver sustainable rental growth over the short, medium and long terms.

I'll now hand over to our Investment Director, Bjorn Hobart, who will run you through the portfolio in more detail. Bjorn?

Thank you, Colin, and good morning. Turning to Slide 7. This portfolio is a particularly high quality and complementary fit for the business. It's positioned to benefit directly from the attractive market dynamics outlined earlier. And this slide sets out the key details of the portfolio and how it fits with our existing stabilized assets. In particular, I'd like to highlight 3 characteristics, which provide specific color on the rationale for this transaction.

First, 28% reversion in the acquisition portfolio, including 38% within the urban assets and the opportunity to capture the gap between average passing rents at approximately GBP 8.10 per square foot to the current ERV of over GBP 10 per square foot is extremely compelling, but critically remains affordable for clients. Second, at 5.9 years, the relatively near-term portfolio WAULT will enable us to capture much of this reversion within a few years.

And finally, there is a 28% overlap with the existing mix of clients in the current big box portfolio. And this will support operational efficiencies and facilitate the integration of the new assets and the new opportunity of wider occupational discussions, potentially enabling us to support more of our clients across more of their supply chain.

And as with the current portfolio, the assets being acquired compromise a diverse mix of clients, which carry out a variety of business activities, which range from national, regional and local businesses. The diversification provides appealing defensiveness and resilience.

So in summary, this is a portfolio that directly complements the existing portfolio we have already curated and enhances our ability to deliver a wider choice of real estate solutions for clients while generating more opportunities for value creation for shareholders in the years ahead.

So turning to Slide 8 and looking in more detail at the acquisition portfolio details and the combined business. As you'll see on this slide, the acquisition increases our exposure to the key markets of the Southeast, the Midlands and the Northwest. It also supplements our existing big box assets and meets our objective to increase our urban logistics exposure around essential city centers, bringing greater scale and efficiency to the platform.

The enlarged portfolio will benefit from increased operational leverage, allowing us to drive rental growth and efficiencies across asset management, leasing and client engagement. The acquisition also increases the weighting to open market reviews, which will enable us to capture the embedded reversion and drive rents forward.

With a greater number and frequency of lease events, we will have more opportunities not just to capture the gap between passing and ERV, but also actively manage the portfolio to drive further ERV growth and maximize income and value. The increased scale also enhances our ability to serve a broader range of clients' needs, supporting a diverse and resilient income profile.

I'll now hand over to Petrina Austin, our Head of Asset Management, to walk you through some of the examples of how we intend to create further value to the portfolio.

Thank you, Bjorn. So let's now turn to an example that demonstrates that unlocking of value. This slide showcases the strategic advantages of creating integrated asset networks in key urban locations, such as our growing presence in Birmingham. The acquisition portfolio includes several well-located assets in the city, complementing our existing Junction 6 scheme and our bigger box assets in the region. These assets are strategically positioned with prime industrial zones, providing us with a meaningful concentration of urban logistics units in a market characterized by good occupier demand and limited new supply.

Creating this interconnected portfolio delivers multiple benefits. Prime locations underpin demand, reducing long-term vacancy risk and ensuring good occupier retention and take-up. Enhanced asset management opportunities from a higher concentration of assets, enabling us to drive operational efficiencies and economies of scale, thereby increasing earnings potential. Scalable client solutions stem from our broad property offering across major U.K. regional hubs.

This allows us to meet evolving client operational needs, supporting them with the right space in the right place at the right time. diversified occupier exposure from well-located urban assets, attracting clients with advanced supply chain requirements, enhancing portfolio resilience and diversifying our client base. Accelerated rental reversion from the frequent lease events of this asset type, which enables us to capture near-term income potential through proactive asset management initiatives.

In summary, creating interconnectivity in cities such as Birmingham exemplifies how we can optimize further value from the acquisition portfolio and deliver enhanced returns. Focusing further on Birmingham. This case study brings our extensive asset management capabilities to life, demonstrating the successful and comprehensive work undertaken by our team at our Junction 6 scheme in Birmingham, our first significant urban logistics asset acquisition in 2023.

Within just 12 months of acquisition, we increased contracted rent by 30% through multiple lease events. We also enhanced income security, improving WAULT to break from 1.6 years to 6.9 years. In addition, ESG-related initiatives increased the efficiency of the assets with a proportion of B-rated EPCs rising from just 14% to 47% since acquisition. So whilst this acquisition has a lot of rental reversion to go after, we are focusing on not just capturing ERVs, but growing them too through our own actions.

We've got a great multi-disciplined asset management team, and it is this breadth and depth of expertise that we will apply to the acquired portfolio, ensuring we unlock its full potential for shareholders. With over 100 lease events scheduled by the end of 2026 alone, there really is much we're looking forward to doing. I'll now hand over to Frankie to talk you through the financial benefits of the acquisition.

Thank you, Petrina, and good morning, everyone. So I'll now run you through the very attractive financial benefits of this transaction, starting with the enhancement in reversionary potential. First, on the left-hand side, the chart highlights in green, the day 1 contribution to passing rent from the portfolio of approximately GBP 53 million. We then step through the last reported big box rental reversion plus the additional rental reversion added from the acquisition of nearly GBP 15 million.

This gets us to the overall estimated rental value of the combined portfolio, which now sits at above GBP 450 million, which is over 27% ahead of the group's passing rent today. The chart on the right then shows how we have the opportunity to capture a substantial portion of this additional reversion over the next few years via the proactive asset management initiatives explained by Petrina, with approximately 80% available for capture between now and the end of 2028.

The uplift in embedded rental reversion clearly supplements our first growth driver, providing a strong foundation for future income growth. In addition, a key feature of this transaction is the GBP 20 million reversionary bridge provided by Blackstone, which acts as a bridge between the current passing rent and a substantial part of today's ERV across the portfolio's current occupied assets. As highlighted in the gold, this reversionary bridge reduces over the next 3 years as we capture the reversion and grow our passing rent.

The GBP 20 million of cash is under Big Box's control, and we will recognize its release within our adjusted earnings over the next 3 years on a reducing annual basis, bridging us through to the reversion capture. The combination of the net rental income and the reversionary bridge is expected to deliver a contribution to earnings of between GBP 66 million and GBP 68 million per annum for the next 3 full financial years, translating into an effective day 1 running yield of over 6% for the portfolio.

We deliberately maintain a strong and flexible balance sheet to enable us to move quickly to capture attractive opportunities in the market, such as this acquisition. Alongside the new shares being issued at a 14% premium to our prevailing share price, and to finance the cash element of this transaction, we are putting in place a GBP 650 million acquisition facility, which has a term of up to 2.5 years.

The pro forma loan-to-value ratio will be approximately 35% post completion, albeit we have a clear plan to reduce this back towards 30% through targeting additional disposals of GBP 300 million over the next 12 to 18 months. And as you know, we have a strong track record in disposing assets in line with or above book values with more than GBP 800 million of assets successfully sold over the last few years. The additional sales will be used to repay the acquisition facility over the short term with any balancing -- balance being termed out into the debt capital markets in due course.

Looking ahead and building on the previous slide on financing, the only change to our future guidance is, therefore, this additional GBP 300 million of selected disposals targeted over the next 12 to 18 months. This is incremental to the previous longer-term disposal guidance of GBP 250 million to GBP 350 million per annum highlighted at our half year results in August. This should be considered a one-off action related to the acquisition to actively reduce our LTV towards the low 30s.

It's in keeping with our financing strategy and will preserve balance sheet strength and future flexibility. This acquisition does not impact our other targets in terms of capital allocation to both our logistics development and data center development pipelines. So in conclusion, this acquisition delivers an attractive effective day 1 running yield of over 6%, which is extremely compelling from an earnings standpoint.

It is expected to enhance earnings by mid-single digits in the first full year post the acquisition. And we are confident that this portfolio has the ability to deliver IRRs, which are significantly ahead of our cost of capital. Our financial strength and funding options underpin our ability to deliver this transaction for shareholders, which, coupled with our other growth drivers, support our target of delivering superior risk-adjusted returns.

The themes represented on this slide, including an ability to grow our future income, further operational flexibility, a significant earnings benefit and a robust balance sheet, all contribute to our ability to deliver on our strategy and create future value for shareholders. And with that, I will hand you back to Colin to conclude.

Thank you, Frankie. And to close, I want to reiterate why we are so excited about this exceptional opportunity. We're acquiring a very high-quality portfolio of carefully selected urban logistics and big box assets in key locations. These assets have a significant amount of upside potential through rental reversion capture and applying our active asset management capabilities to them.

We're acquiring them at a great price, materially below their replacement value, which marks an excellent entry point. And the combination of significant rental reversion and attractive entry price means that we're delivering attractive risk-adjusted returns to Big Box shareholders with mid-single-digit EPS accretion and returns well ahead of our cost of capital.

And finally, we welcome Blackstone, one of the world's most sophisticated real estate investors as a shareholder in the business. Blackstone's ownership highlights their conviction in Big Box and our market-leading position as well as their belief in our long-term strategy and outlook.

With that, we will open up the lines for your questions. So I'll now hand over to Ian, who will explain the arrangements. Thank you.

Thanks, Colin. [Operator Instructions] Just to begin because we've had a few coming through on the web chat already. The first question from Rob Jones at BNP is GBP 300 million of disposals to get back to the low end of the LTV range. What kind of kit do you want to sell?

Shall I take that question? It's Bjorn speaking. So we're very fortunate that we have curated already an incredibly high-quality portfolio. And as we've proved from the start of 2023, we've disposed regularly in a very disciplined manner around GBP 800 million of disposals. So a proof point as to the liquidity of that portfolio. Now all of our assets are always in a ready-for-sale state. So it gives us a great degree of flexibility on what we can sell and when we can sell it.

And it will come as no surprise that we continually assess our portfolio on a relative basis comparing assets with the other assets in the portfolio as to which we would like to sell at any point in time. But we can sell a combination, we can sell individual assets as we have proved before. So we're confident in being able to increase the cadence of that disposal program as and when we need.

Great. Thanks, Bjorn. The next question comes from Jonathan Jackson, who asks, do you have the management bandwidth to cope with the increased asset base? And were you planning to undertake this transaction in addition to warehouse REIT if that deal had gone ahead? And he's also asking about the timing of extra disposals, but I think we've answered that component.

Yes, I'll take the reverse part of that, the end part of that, Ian. It's Colin. No, it wouldn't have been in addition to the warehouse REIT transaction. Petrina, would you like to take the first part of that question in relation to resource?

Yes. Thank you, Colin. Well, prior to the UKCM acquisition, we invested a lot of time and capability into our in-house modeling systems, linking in with both asset management and ESG data points to really rev up our analysis that we do on a lease-by-lease basis. So in essence, the success that we've had in integrating UKCM, which included additions to the team and widening the skill set across the team has meant that, that's been a great guinea pig for us to then be able to add to it for analysis and due diligence.

We will be recruiting additional people into the team, and that recruitment is already in hand just purely because of the volume of number of assets. But we are confident that the skill set, the technology, the systems that we have enables us to take on board this platform of assets very easily.

Great. Thanks, Petrina. I'm going to attempt to go to the phones. So I hope this works. I'm going to allow Paul May to talk apparently. So I hope his phone works. Paul, can you hear us?

I can hear you. Sorry, if there's any background noise here. Apologies for that, just on the road at the moment. Quick couple of questions. Just checking, were any of these assets, are any of these in the warehouse portfolio? Or is this all already entirely separate? Sorry, apologies if you've already answered that.

It's entirely separate, Paul.

Cool. Great. And then separately, is this a precursor to potentially future deals? I appreciate it's GBP 1 billion. It's big. It's the first one, but Blackstone has got quite a lot of stuff they probably wants to sell over time, and there could be some more opportunities. Could this be a start of an ongoing relationship and more deals coming through the pipeline?

There's no preconceived expectation in that regard, Paul. This is a transaction which we've worked up independently of any other thought processes. We think it's an exceptional opportunity, both in terms of the quality of the assets, as we've mentioned, what it does for our business, but also building relationship with Blackstone, who are incredibly knowledgeable and insightful in this market. And for the fact that they've chosen Tritax as their partner for this transaction is really, I think, an endorsement of our business. So in isolation, is the short answer to your question.

Just very last one. Did you cherry pick the assets? Or is it a portfolio that has been brought to you by Blackstone? Just wondering how the transaction came about?

It's a bit of both, Paul. So Blackstone has carefully assembled this portfolio over a period of number of years. When we engaged with Blackstone to discuss the potential to acquire assets from them, we looked at a number of portfolios. And in negotiation with Blackstone, we selected what we felt was the best fit for our business in terms of quality and income profile.

And so there was an element of cherry-picking from our side, but the hard work has been done by Blackstone in terms of the aggregation of those assets over a number of years. I think they've done a really, really good job because you couldn't go out and buy this portfolio today. And certainly, it would take you many years to assemble it if you try to do it organically.

Great stuff. And sorry, just a final one, just to confirm on the earnings accretion. I think a couple of times you've mentioned earnings and a couple of times EPS. Just confirming it's EPS accretion you're talking about.

Paul, you're correct there. It is EPS accretive to the tune of mid-single digits in 2026.

Next question comes from Marc Mozzi.

Just trying to clarify at least to me, exactly how this rental reversionary bridge works in practice. I'm trying to get your net initial yield you're going to be capable to benefit from '26. So I'm right to say, actually, you have GBP 20 million receiving cash. You're going to divide those GBP 20 million by 3 years. So that's going to be 6-point something per year, and you have this on '25 and on '26. And because you're doing this, that gives you a 6.4% net initial yield on '26. That's number one, first question. And then from here, I get where your mid-single-digit accretion on EPS comes from.

And then my second question is what's going to happen from '28? So when you're going to have effectively recognized those GBP 20 million over 3 years in your earnings, how things will -- what's going to happen in '28? Are we going to see a drop in terms of earnings simply because you're going to be just at the same level? Or yes, just let me know how -- that's my first question.

Frankie, are you happy to take that one from Marc?

Yes. Let me try and speak to that. So correct, Marc, the GBP 20 million has been retained by Tritax Big Box. So we have that cash to effectively recognize over the next 3 financial years. It acts as a bridge. It accelerates the cash flows from effectively passing rent today to the -- substantially the ERV level today. So we will recognize that on a decreasing basis over the next 3 years because in year 1, obviously, it is the largest, the balance will reduce and reduce further in 2028. So it's a sliding scale in terms of its recognition.

Sorry, Frankie, I think we lost you a little bit there. Would you mind just recapping that last sentence?

Apologies. So it's a recognition over a sliding scale. The gap between passing rent and reversion is the largest in year 1. As we capture that through the lease events that Petrina talked through, that gap will reduce in year 2 and year 3 further. So the recognition is not on a linear basis. We will be recognizing more of that GBP 20 million in year 1, less in year 2 and less again in year 3. That gets us to a day 1 running yield of 6%, Marc.

I think you quoted 6.4%. 6.4% is the full reversionary yield. The running yield, effective running yield to us is 6% from day 1. And as we get to the end of 2028, in effect, we have stepped in and captured that reversion through the lease events over the course of the next 3 years. And therefore, we're expecting growth thereafter from the GBP 66 million to GBP 68 million that we're quoting as the contribution over the course of the next 3 years.

So there is an ability to accelerate that. Obviously, we're expecting further market rental growth over that period. We have an ability to bring some of that capture forward through asset management initiatives. And of course, we can potentially eat into that vacancy that's there as well. So hopefully, that answers that, but feel free to follow up.

Thank you, Frankie. And just to add to that, this -- the timing of this rather neatly dovetails with our expectation for data center income delivery from 2027 onwards and growing.

Okay. So if I understand you correctly, year 1, your net initial yield is 6%. So that's GBP 62 million of net rental income. So that's -- you recognized about GBP 10 million or GBP 9.5 million of this GBP 20 million in year 1. Can we know what would it be in year 2 and year 3, please?

Yes, Marc, it's circa GBP 10 million, GBP 6 million to GBP 7 million in year 2, and then the balance of GBP 2 million to GBP 3 million in the final year.

Super. And if we were to assume that you're not capable to capture the rental reversion on your side, then we're going to have a drop in '28 of earnings?

Yes. I mean we've got full confidence in capturing that rental reversion as has Blackstone by effectively providing the reversionary bridge. And of course, as I said, we're expecting further market rental growth over the course of these 3 financial years that we're talking about. So in actual fact, the actual capture should be ahead of the numbers that we've talked through.

So if I understand correctly, because I'm just struggling to understand why Blackstone gave you those GBP 20 million. So it's not for free, I guess. So you're going to pay down those GBP 20 million when you're going to capture the rental reversion? Is that the way I should understand it in terms of cash. So you get GBP 20 million year 1. And then if you're capable to capture GBP 10 million, then you're going to give back those GBP 10 million to Blackstone?

No, we don't give any back, Marc.

So you're going to have 2, double counting?

Yes, we have the GBP 20 million, and we capture the reversionary rent progressively through the rent review profiles and lease renewals and lettings.

So that's going to be on top? So it's GBP 20 million -- it's GBP 10 million year 1, plus GBP 3 million of rental reversion, so you're going to get GBP 13 million year 1 in your earnings. Is that the way I should understand it? I'm sorry, I'm slightly confused. And the first time in my career, I see that.

Yes. No, there's no double counting here, Marc. We try to guide to the contribution of net rental income plus the reversionary bridge in all 3 of the next 3 full financial years resting between GBP 66 million and GBP 68 million. That's the way you should think about it. As the passing rent grows, the reversionary bridge reduces to effectively compensate the actual capture of that. So think of it as a bridge from a cash flow perspective to the year 3 net rental income.

I start to get it. Just for the sake of progressing on my question, your average cost of debt you're going to -- the new cost of -- marginal cost of debt you're going to get on your 3.5-year debt, should we assume what, 4% plus 80 bps? It's a middle -- it's something between the 5 years and the 10-year SONIA or it's cheaper than that as an initial SONIA swap?

That's about right, Marc. Yes, you're accurate in those numbers.

4% plus 80 bps. So 4.8% is the marginal cost of debt?

Correct.

Okay. Super. And can I have -- just for my own culture, what are the top 10 tenants of this portfolio you're acquiring or top 5? And the concentration of those top 5 or top 10, if you have?

Bjorn, are you able to cover that? I think it was on one of the slides.

I was just about to say, on Slide 7, it highlights some of the key tenants and the overlap with the current big box portfolio. So you'll see the likes of Tescos and Amazon and Argos/Sainsbury's, B&Q, DHL, but there's also then new additions to the portfolio and they're clients that we're very familiar with, and we have been engaging with on some of the development pipeline over the past few years. So that should give you color.

Next question comes from Marcus Phayre-Mudge. Marcus, hopefully, you can hear us? Marcus? Okay. We might move on from Marcus. Next question comes from Suraj Goyal.

Just a quick one from me. Do you expect the synergies or operational benefits as you integrate these assets into your existing platform? I know you touched on some of the concepts earlier on. But I also want to just get understanding whether there are sort of deferred maintenance or CapEx requirements within the acquired portfolio as well that may be vastly different to your existing portfolio?

Well, they're quite granular, as we've already mentioned. So it's a very hands-on approach that we take to active asset management. So there's a lot of work to do, and we'll be taking that on with [indiscernible]. But Petrina, do you want to just talk about some of the operational synergistic benefits?

Yes. Thank you, Colin. Just to stress, the sort of geographical concentration means that we'll be able to run contracts over a wider portfolio base within that particular location. So we will get economies of scale through the facilities management service contracts, which underpin the service charge budgets for each of the estates in a similar way that we get economies of scale and good coverage for our insurance, which we placed. So there will be multiple benefits in having a larger portfolio with this smaller unit size in the same urban geographies.

Next question comes from the line of Chris [indiscernible].

Two questions from me, please. The first is, I know that in the kind of large-scale asset space that vacancy is sitting, I guess, nationwide at 7.1%. I was wondering if you could give some color as to what you think that means for rental growth for Big Box assets? And what is the level of sort of speculative supply? My second question comes back to the 6% initial running yields on the acquisition.

Is that at the cost that you're paying? And therefore, I guess that there will be an ever so slight enhancement from the fact that for existing shareholders, your -- some of that cost is being financed by shares issued at a premium to the prevailing share price.

Thanks for the question, Chris. Henry, are you -- would you like to take the first part of the question, the market orientated piece?

Yes, certainly, Colin. So Henry Stratton, Head of Research. So that 7.1% vacancies dropped to 6.9% in Q3. So a little bit of an improvement there, which is encouraging across the third quarter of this year with that recovery in demand we talked about at the midyear, holding firm through the third quarter with just over 8 million square foot let. So market fundamentals on the big box side, as we talked about, certainly stabilizing, looking like they're improving a little bit, and we're still seeing that rental growth coming through. And of course, this is supportive of that.

And just on the spec side, again, we talked in the middle of the year about 7.5 million square foot of spec coming over the next year, and that number has held flat across Q3 as well. So this lower level of spec delivery that we've been expecting remains the case. We're not seeing significant starts in the market at the moment. So we're still confident around those market fundamentals and the outlook for rental growth in the big box side of the market.

Frankie, are you happy taking the second piece?

Indeed. And Chris, it's a very good point you make. The 6% initial running yield is quoted off of the headline GBP 1.035 billion. And of course, that's predicated off of the 161p issue price on the equity portion of consideration. If you effectively apply the fair value of that, there will be a modest reduction in terms of that overall consideration. So yes, the running yield will be slightly enhanced in actual terms from the 6% that we've quoted this morning.

Apologies, sorry, just before I go, just coming back on that vacancy point. So you spoke to -- I mean, I think it's clear that rental growth ought to be reasonably strong in urban logistics. What do you expect rental growth to be over the sort of medium term in big box space, please?

Colin, shall I take that again?

Yes, please. Thanks, Henry.

Chris, the Capital Markets Day this year, we talked to sort of 3% to 5% as a medium-term rental growth number in the market for big boxes. And it looks like this year will come well within that range. But on a multiyear basis, that's the sort of level that we see rents growing at, which, of course, is positive at the moment in relation to where inflation is. And as we say, that reflects the strong dynamics of that market.

Great. So I've got a question from Marcus Phayre-Mudge via the chat. I don't think the phone line was working, but he asks, economies of scale has been highlighted by management. This is an externally managed business and part of shareholders' return is to benefit from these economies through a lower management cost. Why is this not being reflected in additional fee tiering? And how big will the portfolio need to be to see the creation of another lower fee tier?

Thanks for the question, Marcus. Obviously, we've had this discussion with you before. And were this to be a big box portfolio, then in isolation, then that would undoubtedly be forefront in our minds. The simple fact of the matter is this is highly granular. As we've outlined, there are a lot of assets to manage here. That's going to require -- for us to do the best job that we can, and that is our objective. We want to extract full value for shareholders to maximize returns from this portfolio. It needs to be very hands-on in terms of management.

And that's boots on the ground, that's active engagement with all of our clients. That's improving the quality of the real estate assets, et cetera, et cetera. And we've discussed this with Blackstone. And Blackstone themselves believe that there's a lot of opportunity for us to extract in this portfolio, one of the reasons why they're staying on significant shareholders. So the simple fact of the matter is that when you're dealing with a portfolio of this granularity with this level of asset management, it's very difficult to achieve that with any significant savings.

Now this is something that we're going to obviously monitor as we build up, and that's something we can sort of look forward to discussing with you once we've bedded it down and got a feel for the level of workload involved, but we think it's going to be quite significant.

Great. Next question comes from Matt Norris, who asks, how was the 161p price determined for the GBP 375 million consideration share element?

Thanks, Matt. It was a point of commercial negotiation between the parties, obviously, noting that our share price was moving around, and we needed to fix a price that we felt was appropriate in the context of our last reported NAV per share, but also in the context of the prevailing share price and reflective of a number of other attributes of the transaction. And that was negotiated over a period of time.

We believe that it's a very attractive deal for our shareholders, but it's also -- I think this transaction is a good deal for Blackstone as well. So I think we do believe it's a true win-win situation in this deal. And obviously, a 14% premium to the last closing share price is a meaningful one.

Great. Next question from [ Robert Dean, ] asks are you expecting Moody's to upgrade to an A3 on the back of this?

Frankie, it's probably one for you.

Yes. I think it's too early to say that. Obviously, there will be a full consultation process with them now the deal has been announced, and we will see where we end up. But there's sort of no answer on that I can give you as we sit here today.

And probably...

It may be just worth mentioning, just to jump in there, that one of the things that Moody's has said to us in the past that it recognizes the importance of diversified asset platforms. And clearly, this transaction will deliver increased diversification within our property asset pool that we're managing for shareholders. So I think that will be a positive attribute that Moody's will take from the transaction.

Great. And probably one final question from Tom Furlong. How will this acquisition impact your ability to make data centers a meaningful proportion of the rent roll? And will the dilution be offset with more data center announcements?

Yes. Thanks, Ian. I think I sort of captured that. So look, this transaction isn't impacting on our strategic thinking and our ambitions regarding data centers. We've obviously made some clear announcements regarding the data center pipeline, that those are proceeding according to plan, and we're very pleased with that progress. And so what we've outlined to the market to date remains in our contemplation. But obviously, to the extent that the business grows in size, then proportionately, that data center pool that we've outlined would be a slightly smaller component part of the overall, but it remains a very important part of our future growth expectations.

We're not, however, changing the name over the door. We are, first and foremost, a logistics-focused business, and we believe that what we've done within logistics is -- has very close synergies with the data center market as we've highlighted previously.

Great. Well, I think that's all the time we've got for questions. So I think we'll wrap things up.

Thanks, Ian. Well, from me, Colin Godfrey, remains for me to say thank you very much for everyone joining the call today. By all means, if you have follow-up questions that you've been too shy to ask on the call, please do reach out to Ian and/or your broker, and we'll be more than happy to follow up with you over the course of the coming days. But for the time being, thank you for joining us.

Thank you for your continued support and encouragement for the business. We're really, really excited about this transaction. We think it's a fantastic step forward for our business. And we're looking forward to extracting value for you, the shareholders, from this transaction over the coming years. Have a good day. Thanks very much for joining. Bye-bye.