Leadership and purpose continued Board consideration of stakeholder interests and s.172(1) matters Impact on decisions Some examples of how the Board has considered stakeholder interests and s.172(1) matters in its decision making in 2021/22 are set out below and in ‘What we did in 2021/22’ on pages 96 and 97. Further details on our stakeholder engagement, and our response, can also be found on pages 52 to 62.
Acquisition of 7/15 Gresse Street & 12/13 Rathbone Place, W1 (Gresse Street) In January 2022, the Board approved the acquisition of Gresse Street for £36.5 million. In reviewing the proposal, the Board considered how the acquisition presented the opportunity to further its strategy to grow GPE’s Flex office portfolio, serving the longer-term interests of GPE and its stakeholders. This was supported by feedback from customers, agents, flexible space operators and market data, as well as from GPE’s successful roll-out of its Flex offer at eight buildings, indicating increasing customer demand for flexibility, experience and service provision. The Board considered the financial impact of the acquisition, including the anticipated income and capital returns, returns for shareholders and the further upside potential for the Group. It was discussed that, following the relocation of the Fashion Retail Academy, it was planned to undertake a substantial upgrade to the building to bring it in line with customer demands and to improve its sustainability and wellbeing credentials in accordance with GPE’s Net Zero Carbon commitment and stakeholder expectations. The Board also considered opportunities to support local community needs. From an employee perspective, it was considered that the acquisition would drive further momentum in the business whilst a flexible space business plan would provide employees with additional development opportunities, including in the area of customer service provision. It was concluded, having regard to stakeholder interests, that the acquisition was likely to generate long-term sustainable value for stakeholders. At the same time, it would provide further opportunity to innovate across our operations and work with our customers and communities to create sustainable space for London to thrive. See more on page 29
94 Great Portland Estates plc Annual Report 2022
Redevelopment of 2 Aldermanbury Square, EC2 (2AS) In November 2021, the Board committed in principle to the redevelopment of 2AS, and the incurrence of additional expenditure for demolition and enabling works. The Board discussed the strong business case, prospective performance metrics and development returns for the scheme and shareholders, along with wider stakeholder impacts. The Board considered recent customer and agent feedback and market analysis, which had highlighted strong customer demand for best-in-class offices in terms of flexibility, amenity, technology, wellbeing and sustainability. The proposed development would represent the next generation of exemplary modern offices and deliver in each of these areas in a prime location. The Board discussed GPE’s sustainability agenda and stakeholder expectations and the aim for the project to deliver GPE’s second net zero carbon building and its first NABERS UK rating for energy performance. The Board also considered GPE’s ongoing work with suppliers to achieve stretching embodied carbon targets, to reuse (and source more sustainable) construction materials, and the need to partner with customers to minimise their carbon impacts. The Board had regard to the impacts on communities and the public realm and amenity improvements under the scheme that would have a positive impact on the local area and improve accessibility to the western entrance of the Liverpool Street Crossrail station. The impact for the Group’s employees was also considered, noting that the scheme would offer employees both development and innovation opportunities. Having weighed up the balance of risks and potential returns, and after taking into account wider stakeholder interests, it was concluded that GPE should commit in principle to the development and proceed to the next stage of the project. See more on page 24
