We unlock potential, creating sustainable space for London to thrive Annual Report and Accounts 2021 This was an unprecedented year. Despite the significant economic and social challenges presented by the pandemic, we have continued to innovate, positioning GPE for change. Whilst we temporarily switched from offices and shops to spare rooms and kitchen tables, we also welcomed occupiers to our newly completed sustainable spaces designed to complement evolving patterns of work, set our Roadmap to Net Zero Carbon by 2030 and achieved new milestones in both employee and customer engagement. Our commitment to London is undiminished. As we work to support the wellbeing of our customers, people and communities, we are confident that GPE and our great capital city can both look forward to a promising future. In this report Overview Strategic Report – Overview – Report Strategic 02 A clear vision to navigate uncertain times… 03 …shaped by our purpose, strategy and strength 04 Living our culture even from a distance… 05 …whilst strengthening bonds with our stakeholders 06 Creating great spaces in London 08 Our case studies 18 How we create value 20 Our Key Performance Indicators P12 P09 Governance Other information 100 Overview 210 Five-year record 101 Introduction from the Chairman 211 Our properties and occupiers 104 Leadership and purpose 214 Portfolio statistics 108 Engaging with our investors 215 Glossary Strategic Report – Annual review 110 Engaging with our employees 217 Shareholders’ information 23 Statement from the Chief Executive 116 Division of responsibilities 218 Financial calendar 25 Our markets 118 Composition, succession and evaluation 32 Our near-term strategic priorities 125 Audit, risks and internal controls 34 Our development activities 134 Directors’ remuneration report P71 39 Our leasing activities 160 Report of the directors 42 Our investment activities 164 Directors’ responsibilities statement 43 Our financial results 47 Our culture and people Financial statements 54 The Board 166 Group income statement 56 Senior Management Team 166 Group statement of 58 Our stakeholder relationships comprehensive income 66 Engaging with our stakeholders 167 Group balance sheet 70 Our portfolio and sustainability 168 Group statement of cash flows 82 Our capital strength 169 Group statement of changes in equity 84 Our approach to risk 170 Notes forming part of the Group financial statements 193 Independent auditor’s report P16 203 Company balance sheet 204 Company statement of changes in equity 205 Notes forming part of the Company financial statements Cover Image: Andy Jacobs, Senior Occupier Services Manager and Sahsha Lucak, Occupier Services Manager at our recently completed Hanover Square, W1 development. Annual Report 2021 Great Portland Estates 01 A clear vision to navigate uncertain times… Statement from the Chairman In a challenging year like no other, we have continued to innovate, delivering tech-enabled, amenity rich office space with the highest sustainability credentials. Richard Mully Chairman An extraordinary year Sustainability – it’s imperative This has been a year like no other, with the COVID-19 With our detailed Roadmap to Net Zero by 2030, sustainability pandemic dominating. Repeated lockdowns forced many is both an economic and strategic imperative, providing of central London’s office workers, shoppers and tourists us with an opportunity to differentiate our product and to stay at home for much of the year, although restrictions potentially acquire orphaned assets. Moreover, the recent are now easing. Despite these challenges, the GPE team launch of our Decarbonisation Fund will drive further has pulled together, adapted and embraced change. behavioural change across our business. Occupier trends accelerated London to bounce back With occupiers’ expecting ever greater choice, flexibility Recovering transaction activity again demonstrated that and service provision, we have built on our existing London’s commercial property market has enduring appeal momentum to deliver innovative, tech-enabled, amenity for occupiers and investors alike, and when combined with rich office space with the highest sustainability credentials. our human desire to congregate and create, London’s magnetic appeal as a global cultural and business Focused on the wellbeing of our people centre is likely to remain intact. and wider stakeholders We have engaged extensively with our occupiers, supply GPE well positioned chain and communities throughout the year, providing With our talented team, portfolio primed for growth assistance where it has been needed most and further and financial strength, we are well placed to capitalise strengthening our relationships. We have also ensured on opportunities that emerge and to continue unlocking that the wellbeing of our customers and people remains potential, creating sustainable space for London to thrive. front and centre, and are pleased that our progressive Our Strategic Report on pages 1 to 98 has been reviewed culture and clear values have meant both employee and approved by the Board. engagement and occupier satisfaction levels continue to be exceptionally strong. On behalf of the Board Richard Mully BChairmanusines s mix 5% 19 May 2021 8% Office £1,913.8m Retail £530.1m 37% Our portfolio1 Residential £13.2m 22% Business mix 19% 5% 8% LoOfficecations £1,913.8m Business mix 100% central 5% 78% London, with 40% RetailNorth8% of Oxford Street£530.1£9m20.6m Office £1,913.8m in our development 37% Residential £13.2m Retail £530.1m 22% Rest of West End £753.7m programme 19% 37% City £461.0m Residential £13.2m 22% 19L%ocations 31% 78% Southwark £186.6m North of Oxford Street £920.6m Locations Midtown 78% £135.2m Rest of West End £753.7m North of Oxford Street £920.6m City £461.0m Rest of West End £753.7m 31% Southwark £186.6m City £461.0m Midtown 31% £135.2m Southwark £186.6m Midtown £135.2m 02 Great Portland Estates Annual Report 2021 …shaped by our purpose, strategy and strength Overview Our purpose – Report Strategic We unlock potential, creating sustainable space for London to thrive. See more on page 106 Our purpose underpins our strategy Our financial performance We aim to deliver superior returns by unlocking One year the often hidden potential in commercial 2021 2020 real estate in central London, creating high quality Portfolio valuation1 £2.46bn £2.62bn sustainable spaces for occupiers and long-term IFRS NAV & EPRA NTA per share 779p 868p value for our stakeholders. (Loss)/profit after tax £(201.9)m £51.8m Our strategy is underpinned by six clear principles: Total Property Return (TPR)1 -5.9% 3.7% 100% central London; West End focus Total Accounting Return (TAR) -8.8% 3.2% Reposition properties let off low rents Total Shareholder Return (TSR) 1.7% -7.2% Flex operational risk through the property cycle Ten years Maintain low financial leverage 2021 Benchmark 1 2 Disciplined capital management; raise to acquire, Total Property Return (TPR) 229.8% 255.5% distribute excess Total Accounting Return (TAR) 144.2% 48.0% Sustainability touches everything we do Total Shareholder Return (TSR) 107.7% 131.8% See more on pages 18 and 19 As is usual practice in our sector, we use Alternative Performance Measures (APMs) to help explain the performance of the business. These include quoting a number of measures on a proportionally consolidated basis to include joint ventures, as it best describes how we manage the portfolio, like-for-like measures and using measures prescribed by EPRA. The measures defined by EPRA are designed to enhance transparency and comparability across the European real estate sector. Reconciliations of APMs are included in note 8 of the financial statements. Our strength IFRS net assets Cash and undrawn credit facilities1 Occupier satisfaction (NPS Score) £2.0bn £443m +42.0 2020: £2.2bn 2020: £411m 2020: +25.3 Loan to Value1 Employee engagement index Dividend per share 18.4% 93% 12.6p 2020: 14.2% 2020: 90% 2020: 12.6p 1. Includes share of joint ventures. 2. MSCI Quarterly Central & Inner London index. Annual Report 2021 Great Portland Estates 03 Living our culture even from a distance… Our strong culture and values Our open and progressive culture is underpinned by our values. They define who we are and how we act. Our values are at the heart of what we do and are what make us special. They give us direction, describe how we behave and how we do business. This year they have had an added importance, drawing us together in a year of social distancing. See more on page 47 04 Great Portland Estates Annual Report 2021 …whilst strengthening bonds with our stakeholders Overview Our stakeholder relationships – Report Strategic Our continued long-term success relies on the close relationships we have with our occupiers, local communities and partners. Throughout this extraordinary year, these relationships mattered more than ever as we sought to collectively tackle the challenges presented by the pandemic. See more on page 58 Annual Report 2021 Great Portland Estates 05 Creating great D E R A L N D O W spaces in LondonC R N E W P A N N O C R R T A H M S R I R D D D L A L E R D N V I L N T O N D P E R King’sD Cross St Pancras H E A A V D O C L I R D M E T B Y U R K R R P D A D I T S T Y N D S H N N E E R S R O B E R T S T T O G A R Hanover Square D Y N I A R E D L B L T M D U S G K L T R C O T C S A S S S L C N O E T I T C S D S O A E G A S O S R T Go to pages 12 and 13 T S I G Euston S R E H N Q C U W F R E O I T U L D S E K I E S L I P BETHNAL R R L D R W J R U GREEN E O D D L