Our investment activities

Operational measures1

Purchases

Capital value per sq ft

Sales

Premium to book value2

2022 2021

£36.5m £nil £847 –£90.8m £16.0m 5.0% 11.7% Capital value per sq ft £1,091 £2,515 Total investment transactions3 £127.3m £16.0m Net investment4 £(54.3)m £(16.0)m

1. Including joint ventures at share. 2. Based on book values at start of financial year. 3. Purchases plus sales. 4. Purchases less sales.

Our approach

Buying at the right price and selling at the right time is central to our business model. Using our extensive network of market contacts, our Investment team adopts a disciplined approach with clearly defined acquisition criteria.

See more on page 12

To supplement our organic Flex growth, we are also targeting acquisitions suitable for conversion to Flex office space, with the following requirements:

– amenity rich locations with excellent transport links; – clustering around existing GPE holdings desirable; – 30,000 – 60,000 sq ft with divisible floorplates; – target unit size of 3,000 – 5,000 sq ft; – ability to create internal and external amenity space; – high quality ground floor experience; – product and market appropriate refurbishment capex; and – opportunity to deliver stabilised income of 6%+.

Once we have acquired a property, the Investment team works closely with our Portfolio Management and Development teams to deliver the business plan and maximise the property’s potential. Every asset’s business plan is updated quarterly, providing estimates of forward look returns under different market scenarios. These plans also help to inform our sales activities, with the assets providing the lower risk adjusted returns often being sold and the proceeds recycled into better performing opportunities or returned to shareholders.

The acquisition of Gresse Street offers a fantastic opportunity for us to reposition these tired buildings with high quality, fully managed flexible spaces designed with the customer at its heart and in a location that is full of opportunity.”

Robin Matthews

Investment Director We continue to monitor the investment market closely with a clear focus on development and repositioning opportunities, buildings that would suit our Flex products and assets that are challenged from a sustainability perspective. Since 1 April 2021, we have made two acquisitions and one disposal.

Sales for the year ended 31 March 2022

Price1 £m Premium to book value % Price per sq ft £ NIY %

160 Old Street, EC1 90.8 5.0 1,091 4.1

1. Including share of joint ventures.

In September 2021, the Great Ropemaker Partnership (GRP), our 50:50 joint venture with BP Pension Fund, sold 160 Old Street, EC1 to a fund advised by J.P. Morgan Global Alternatives. The headline price of £181.5 million (our share: £90.8 million) reflected a 5% premium to the March 2021 valuation. The total contracted annual rental income was £7.9 million (our share: £4.0 million), with a weighted average unexpired lease term of approximately 10.3 years to the earlier of breaks or expiries.

In March 2022, we acquired the long leasehold interests at 7/15 Gresse Street and 12/13 Rathbone Place, W1 for £36.5 million (equating to £847 per sq ft, 5.6% NIY). The building has been home to the Fashion Retail Academy since 2005, who we expect will relocate from the building next year.

Acquisitions for the year ended 31 March 2022

Price £m NIY % Area sq ft

Cost per sq ft 7/15 Gresse Street, W1 36.5 5.6 43,000 847

In May 2022, we acquired the long leasehold interest at 6/10 St Andrew Street for £30.0 million (£650 per sq ft). The 46,200 sq ft building is currently vacant, and benefits from planning permission for a two-storey extension. It will provide approximately 48,000 sq ft over lower ground and eight upper floors, with two private terraces as well as a communal roof terrace and winter garden.

Following comprehensive refurbishment of both these acquisitions, we intend to implement our Fully Managed Flex offering, adding to our growing Flex office portfolio, which currently provides around 250,000 sq ft of space on Fitted and Fully Managed terms, across central London.

How we are positioned

We are constantly reviewing acquisition opportunities, and we currently have £1.0 billion of potential acquisitions under review, predominantly off market.

We are actively seeking new buildings for our Flex offerings, opportunities for repositioning or development and we increasingly expect the sustainability challenge to provide us with opportunities to acquire orphaned assets needing a sustainability solution. However, we will remain disciplined. Any potential purchase needs to outperform the assets we already own, and with our existing portfolio stacked with opportunity, the hurdle is high.