We unlock potential, creating space for London to thrive Annual Report and Accounts 2020 We unlock potential, identifying opportunities that others may not have seen, harnessing the skills and talents of our people and a vast range of partners to unlock that potential. As the boundaries between work and play and public and private spaces blur, we are creating space demanded by our vibrant and truly global city. And we are continually innovating to meet the evolving needs of our occupiers, our people, our communities and our other stakeholders, creating an environment for London to thrive. Strategic Report – Overview 02 A clear vision... 03 ....delivered through our people 04 A clear plan and financial strength... 05 ...supported by our deep relationships 06 A clear focus on creating great spaces 08 Our case studies 16 How we create value 18 Our KPI benchmarks Strategic Report – Annual Review 21 Statement from the Chief Executive 23 Our market 30 Our near-term strategic priorities 32 Our investment activities 34 Our development activities 39 Our leasing activities 42 Our financial results 46 Our culture and people 54 The Board 56 Senior Management Team 58 Our stakeholder relationships 68 Our portfolio 78 Our capital strength 80 Our approach to risk Governance 96 Overview 97 Introduction from the Chairman 100 Leadership and purpose 110 Division of responsibilities 112 Composition, succession and evaluation 118 Audit, risks and internal controls 126 Directors’ remuneration report 155 Report of the directors 158 Directors’ responsibilities statement Financial statements 160 Group income statement 160 Group statement of comprehensive income 161 Group balance sheet 162 Group statement of cash flows 163 Group statement of changes in equity 164 Notes forming part of the Group financial statements 187 Independent auditor’s report 197 Company balance sheet 199 Notes forming part of the Company financial statements Other information 204 Five year record 205 Our properties and occupiers 208 Portfolio statistics 209 Glossary 211 Shareholders’ information 212 Financial calendar Annual Report 2020 Great Portland Estates 01 A clear vision... Statement from the Chairman With our clear strategy, progressive culture and single focus on central London commercial property, we are continuing to evolve and innovate, embracing Despite these unprecedented conditions, the change and turning challenges into opportunities. GPE team has pulled together well with all its stakeholders and ensured that our portfolio is We are Great Portland Estates. We aim to deliver superior as prepared as can be for the current situation. returns by unlocking the often hidden potential in commercial However long the COVID crisis lasts, with our real estate in central London, creating great spaces for our occupiers, partners and communities. low gearing and ample liquidity, GPE is well positioned to weather the impact until market Positive London prospects conditions normalise.” London is one of only a handful of truly global cities, with a commercial property market that has enduring appeal for occupiers and investors alike, and notwithstanding the current situation, we believe the long-term prospects for London remain positive. However, the relationship between real estate owners and occupiers is evolving, with our occupiers now wanting more, including increased flexibility and service provision, as well as smart tech-enabled buildings with outstanding sustainability and wellbeing credentials. Evolving and innovating As a result, we are innovating. We are broadening our product and service offer, enhancing the occupier experience, installing technology solutions across our portfolio and reinvigorating communal spaces. Moreover, with sustainability touching everything that we do and moving to an economic imperative, we have set out our intent to become a net zero carbon business by 2030. Progressive culture Our strong and talented team, underpinned by our Our portfolio progressive culture and clear values, is embracing opportunity and delivering this change. And with ongoing 100% central London, with 56% in our investment in employee training and development, we are development programme continuing to promote talent from within. Unlocking potential Business mix 5% Looking ahead, with a portfolio full of opportunity and 8% Office £1,865.9m 36% exceptional financial strength, we remain extremely well 18% Retail £734.0m positioned. And together with our employees, occupiers, 1% suppliers and other stakeholders, we will continue to Residential £24.2m 28% unlock potential, creating space for London to thrive. Locations Our Strategic Report on pages 1 to 94 has been reviewed and 71% North of Oxford Street £942.0m approved by the Board. Rest of West End £863.7m On behalf of the Board City £467.6m 33% Southwark £202.8m Richard Mully Chairman Midtown £148.0m 9 June 2020 02 Great Portland Estates Annual Report 2020 ...delivered through our people Overview Our strong culture and values Our open and progressive culture underpins our values, which define who we are and how we act. They are at the heart of what we do and are what make us special. – Report Strategic They give us direction, describe how we behave and how we do business. › See more on our culture and people on pages 46 to 53 Annual Report 2020 Great Portland Estates 03 A clear plan and financial strength... Our purpose Our strategy We aim to deliver superior returns by unlocking We unlock potential, the often hidden potential in commercial real estate in central London, creating great spaces creating space for for occupiers and long-term value for our London to thrive. stakeholders. › See more on pages 16 and 17 Our strategy is underpinned by six clear principles: 100% central London; West End focus Reposition properties let off low rents Flex operational risk through the property cycle Maintain low financial leverage Disciplined capital management; raise to acquire, distribute excess Sustainability touches everything we do › See more on pages 16 and 17 Our financial strength IFRS net Net Loan Weighted average Cash and assets gearing to value interest rate undrawn facilities £2.2bn 16.2% 14.2% 2.2% £411m 2019: £2.3bn 2019: 6.8% 2019: 8.7% 2019: 2.7% 2019: £608m Our performance highlights One year Portfolio EPRA NAV Total Property Total Accounting Total Shareholder valuation per share Return (TPR) Return (TAR) Return (TSR) £2.62bn 868p 3.7% 3.2% -7.2% 2019: £2.58bn 2019: 853p 2019: 3.5% 2019: 2.3% 2019: 14.0% (down 0.3% LfL) (up 1.8%) (up 0.2 pps) (up 0.9 pps) (down 21.2 pps) Ten years Total Property Total Accounting Total Shareholder EPRA and adjusted metrics: we prepare our financial Return (TPR) Return (TAR) Return (TSR) statements using IFRS, however we also use a number of adjusted measures in assessing and managing the performance of the business. These measures, including 199.0% 240.5% 152.9% those defined by EPRA which are designed to enhance Benchmark: 205.2% Benchmark: 48.0% Benchmark: 106.3% transparency and comparability across the European real estate sector, are included in note 9 of the financial statements. 04 Great Portland Estates Annual Report 2020 ...supported by our deep relationships Overview Our resources and relationships Our business model is supported by key resources and relationships which we constantly develop to – Report Strategic ensure long-term success. › See more on pages 58 to 66 Annual Report 2020 Great Portland Estates 05 A clear focus on creating great spaces H E A A VE O L M B U RS K P A I T N S HOLT NY E ROBERT ST T G R E D R S C A ST N I C D ST O R T Euston S R C U R E O L D S E S R D W J U O D B U D R N S T REGENT’S PARK Euston PL P A D Square R R K N G O R T R D S Warren E U A E Street Y C L ’ C I R Great S R T E I O U Portland N T N Street O 25 T R CL T D E Russell N 26 Baker H Square Regent’s BLOOMSBURY F A Street A M Park R 21 R D R E C N I O GR L E B MARYLEBONE O RUSSELL N R Y U M A SQUARE G EAT P R P D T O GO O R R N D D T W R S L O E L D R A A RT Goodge D OUTH ST R O B N E ST Street S T H WEYM D LA FITZROVIA T T 24 S P N CRAWFORD E T L S D G I SH D D O GLOUCESTER PL B N AVE STS O BEDFORD AK C T G NEW 8 SQUARE E GARDEN R 20 S H I G H H O L B O R N T T R S M E Chancery Lane R T I 13 M O T R D S Holborn 7 11 X F O T 23 E W O E S N R G EO ORE STCAVENDISH G IGM 10 W SQUARE 14 22TottTottenhamtt LINCOLN’S CouCourt Road INN FIELDS PORTMANN 3 KI SQUARE S T N O R D O X F SOHO G S SQUARE C Oxford WA HOLBORN H 2 6 Circus A Y R I Marble Bond 4 N F L E E T S T 1 HANOVER G Street Arch 5 SQUARE C 19 R Covent O H Garden Y C S W D 18 S L E A R V R ST E A D COVENT K Y G R B ROO U S T E B R N 15 S GARDEN O E E N T INNER TEMPLE GROSVENOR S V T O F GARDENS SQUARE GARDEN G R S A Bla T H S Leicester Temple 16 Square T E N MAYFAIR K M A N D B P N E M A Piccadilly A R A R BERKELEY 17 T I K 9 Circus S R SQUARE O L T W S A C M E A A N I H V T T E E R R E L I V O R O B R STT JAMES’SJ AMES ’ S CharingChariningngg I Green D HYDE PARK 12 SQUARES QUARE CrossCrosss G Park E T EmbankmentEmbankment S L L D A R M F O Y L MA M L L SOUTHBANK A I L PALPA T D S A C I C P W H O H I R T S L L E E A H W M G A Southwa E JUBILEE A U H U L T T A A E GREEN PARK L GARDENS Waterloo R R R L D D O U T S SSTT JAMES’SJ AMES ’ S S O C E D R R H Hyde Park PARPARKK R R T D D D Corner K C O N S T I T U T I O N H I L L R O Y SLOA WestminsterWestminstWestmin t W A L K W E S T A G E M I N S T E R B R I D G E G B I R D C R D NE O R S T V S S I A I S B R E U O L T N T C C Y O K StSt James’sJames’s I I N V A BELGRAVE R G › See more on page 36 B H ParParkk SQUARE P A L M A Lambeth GARDEN G B U A PPER T I North E A shortage of high quality officeN space D D S T E R G R M I N R W E S T BELGRAVIA BE D E in London has resulted in competition C LG O L A N O S N P T B R WESTMINSTERWESTW T H E A for the best buildings.