Ladies and gentlemen, welcome to the Derwent London Q1 2024 business update. My name is Derwent, and I will be the operator for your call this morning. If you would like to ask a question during the question-and-answer session on today's call, you can do so by pressing * followed by one on your telephone keypad. If you wish to ask a question via the webcast, please click on the Ask a Question link under the video player. I will now hand you over to Paul Williams, Chief Executive. Thank you very much. Good morning and welcome to the Derwent London Q1 2024 business update. I'm delighted to say that the momentum in the occupational market that we highlighted with our year-end results is increasing. Since the start of 2024, we've agreed GBP 5.4 million on new leases, and there is a further GBP 4.3 million of rent under offer. On average, the rent on new leases in Q1 was at a premium of 9.2% to ERV, with an average lease term to break of 7.4 years. The flight to quality, particularly for our own product, continues. In total, 58% of the space we had available to let at the end of 2023 has neither been leased nor is under offer. I'm also very pleased to announce that we've signed a third pre-let at 25 Baker Street. Cushman & Wakefield is taking just over 17,000 sq ft on the first floor. Reflecting the quality of the space, its significant occupier appeal, and following the other pre-lets to PIMCO and Moelis, the rent of GBP 1.8 million a year equates to GBP 107.50 per sq ft and is 19% ahead of ERV, providing a further boost to the project's yield on cost. 1 Oxford Street Uniqlo has now opened and is proving a great anchor for this end of Oxford Street. Starbucks has also leased one of the adjacent units, leaving only the two smaller retail units available. I'm encouraged by the level of demand with detailed negotiations ongoing. Letting activity is well spread across the portfolio, with the eSIG a significant pickup. At The Whitechapel Building, for example, where demand has been slower since the pandemic, activity levels have increased noticeably. Since the start of the year, 116,000 sq ft has been leased or is under offer, including PLP Architecture, who have taken 22,000 sq ft on a 10-year lease at GBP 50 per sq ft. Our portfolio appeals to a broad range of occupiers, including those who are more cost-conscious yet still require high-quality space with good amenity and transport connections in lower rental locations. Overall, our EPRA vacancy rate has reduced to 3.7% at 31st of March, down from 4% at year-end. Market vacancy rates were stable in Q1, with the West End tight. The investment market has remained subdued, but we were pleased to sell Turnmill for GBP 77.4 million, 3% ahead of December's book value, proceeds due later in Q2. Our on-site developments are both in the West End, where the supply-demand imbalance is greatest. At 25 Baker Street, façade works are making good progress. The main office building is now at 84% pre-let, on rents averaging 15% above the appraisal ERV. In addition, we have exchanged contracts for the sale of nine of the 41 private residential units, with a combined price of GBP 54 million, comprising 30% of the total residential area. This reflects a value of GBP 3,920 per sq ft, which is significantly higher than the appraisal valuation. At Network W1, superstructure works have commenced. With some 18 months to go until completion, we are in discussion on several potential pre-lets and are very confident in the prospect for this amenity-rich, best-in-class office building. We'll also continue to prepare for our next phase of West End developments at 50 Baker Street and Holden House, which together total 390,000 sq ft. Turning to the financials, our balance sheet remains very well placed, and our gearing this month is the lowest in the U.K. REIT sector, with an LTV of just 28%. Project expenditure of GBP 54 million in the quarter was the main driver of the modest increase in net debt to GBP 1.4 billion. Our treasury team has made good progress on a replacement facility for the GBP 83 million secured loan, which will ensure it's in October with terms already agreed. In summary, with our full-year results, we upgraded our rental growth forecast for 2024 to +2% to +5%. Our leasing activity underpins this forecast alongside the increasing strength of the occupational market for well-located buildings with the right amenity. Rental growth is further supported by the shortage of existing supply and constrained market pipeline. We have a strong balance sheet and a regeneration pipeline we expect will deliver attractive returns. We are well positioned to benefit from these trends. Thank you, and I now hand back to the operator for any questions. Thank you. If you wish to ask a question, please press * followed by one on your telephone keypad. If you change your mind and wish to remove your question, please press * followed by two. When preparing to ask a question, please ensure that your phone is unmuted locally. To confirm, press * followed by one to ask a question. If you wish to ask a question via the webcast, please click on the Ask a Question link under the video player. The first question is from the line of Callum Marley from Colliers. Please go ahead. Morning, guys. Thank you for taking my question. Three quick questions, please. First one, just on the disposals that you did. Congratulations on that. I've noted 4.9% net yield. Can you just remind us quickly of where yield on cost and development margins sit at 25 Baker Street and Network W1 as of today? Yeah. So just looking at the information for you. On cost and yield? Sorry. Yield on cost, Robbie? 5.8. 5.8%. Gotcha. Thank you. Second question. Long term, just looking at your vacancy numbers and as we think about them going forward, do you expect the trends in vacancies to continue to lap down to 1% from its pre-COVID levels, or is this kind of 3% the new normal? Well, obviously, we're a very active portfolio, and a vacancy rate I mean, around 4%, I think, is very good. But obviously, from time to time, we will refurbish space or we will take better space to upgrade. So I think it's been in a good place for some time. Obviously, what's of interest to us also is the vacancy rate in our core areas so that we've and obviously, with supply so constrained, the vacancy rate, particularly in the West End. So for us, that means really good, strong demand in a constrained market. But this is a very active portfolio. We take space back occasionally to reposition, etc., but I would expect the vacancy rate to remain in a very good place over the next couple of years. Brilliant. And last one, just looking back over the last 2 years in the same U.K., it's clear that you're moving your portfolio away from the city more towards the West End. I think the breakdown might be something like 75, 25% now. What is your long-term view on that portfolio weighting? And then as a follow-up, what is your investment view on the London city market today, given that valuations have repriced quite a bit and prime yields are arguably quite a bit more attractive? Okay. That's a very good question. I think, firstly, we very much like our clusters. And I think West End has performed very well over many, many decades. And I think having a percentage of circa 70% in the West End is very good, particularly as to say about 70% of the West End is either listed or is unable to be redeveloped, very high. So with those dynamics from a planning point of view, where you can secure planning permission like we have done for our developments, there is a sort of limited supply and therefore good rental growth prospects. So I think the West End's always been tight, and I think will remain so. Historically, we haven't really invested in the city. We've very much done very well with our sort of northern fringe, whatever you want to call it, or the city borders. The Whitechapel area has picked up, as I said earlier, but also if you look at what we've done well in Clerkenwell and etc. So I think those areas will remain pretty important to us. If we found a building of interest in the City at a good price where we could have that sort of Derwent and special dust, then I think we would consider it. But that's a market with a much higher vacancy rate. I think there are a much higher level of secondary space available there. So I think the market dynamics there is very different. So I would rule it out, but you could rule it out that we're not going to go further east than that. I think we'd like to stay in the central locations because, as we've seen over the last couple of years, people are prepared to pay a very good premium rent to be in central London locations. You see that in the West End. You've seen also some good deals in the city. So I think we're going to remain focused in our core areas of the West End, about 70% plus our city borders. But also, if something interesting came up, we would certainly consider it. Thank you. Pleasure. Thank you. The next question comes from the line of Tom Musson with Goldman Sachs. Please go ahead. Thanks very much. Morning, gents. Yeah, just a couple of questions. Firstly, at 25 Baker Street, if you adjust for the lease incentives, how does the net effective rent you've secured from Cushman compare to that of the PIMCO and Moelis deals? Just want to get a sense of whether you've seen as much progression there on the net effective as you have at the headline level as you pre-let that building. That's a good question. Firstly, interesting, Cushman & Wakefield is a 15-year lease. So the actual level of rent-free period will be higher, but a proportion of its rent will be very much in line with that. And I think you could normally assume something around 20%. The market will probably be about 36 months on a 15-year lease. The rent-free period we've given to Cushman & Wakefield's is slightly lower than that. So we've done well on that, but rent-frees still remain around about 20%. So a little bit lower than the market, but probably, in fairness, relatively in line. But headline rent, as I say, 19% above, and it was very good to secure such a long lease. And that's what we're finding quite interesting, that people for top-quality space were very happy to consider decent long leases. And our WAULT is in a great place. I think you had a second question. Yeah? Got it. Yeah. No, that's helpful. Thank you. Second one was on Network W1. I think you previously mentioned you were happy to wait a little before pre-letting anything there to let ERVs grow. Seems from your comments like there is gathering interest in that space. What is your latest thinking there now around a pre-let? Do you think we could expect something this year, or should we be thinking more along the lines of 2025 for that, somewhere closer to PC? Well, I think momentum's very much building up in its demand. We have really been marketing. It doesn't finish until H2 2025, and so that's 18 months away. And that's when you would normally expect to sort of start seeing some interest. So as I said in the statement, we've got multiple interest in the asset. And I think the decision we need to make is who do we go with and all the rest of it. But I would very much hope that we would be getting a good retail rent rather than a discounted rent because, as we see, rents grow. So I would hope that you would have some good news this year rather than next year. I don't think that we also take the view if someone's in the market or in the shop to buy, make sure they buy at a proper price. So we are very encouraged by the level of interest we've got. And I've got multiple discussions. And one would hope that we could make some sort of announcement later this year. But with the vacancy rate as low as it is, having 84% pre-let Baker Street, I'm in a position to make some choices. And we would encourage people to transact with this, but we want to make sure we get good returns. That's really helpful. Thank you. Pleasure. Thank you. We have the next question from the line of Paul May with Barclays. Please go ahead. Hi, guys. Just a couple of questions on the Turnmill initially from me. Just wondered if you can give some guidance as to the write-down from peak values. Secondly, were you in discussions at the year-end, and what was the write-down in the asset in the second half or over the whole of last year? And can you give any guidance on the equivalent yield or the reversion potential in the asset for the rent review next year? Appreciate you sold at a 4.9 initial yield, which is higher than the rest of your portfolio. I just wondered how the reversion is expected to go next year. Thank you. Thanks, Paul. Well, obviously, turning to the question about term, it obviously came down in value in 2023 as other parts of the market have done. I mean, I think, firstly, look at the initial yield, 4.9%, supply percent. I think most people have been telling us that's a very, very, very strong price. It came down double-digit, Nigel, probably? Yeah. Yeah. I mean, overall, the portfolios I probably had, I think, 3 six-months of valuation declines. Last year, we were down 10% overall, and the six-month previously, 18%. So overall, the portfolios are down about 18%, and that's probably where. But make it clear, Paul. We weren't looking to sell this building. Someone approached us off-market. And so our view about when we were approached was, "Yes, but it has to be a decent price." So I think we were very happy to be bought. I mean, book is as you know, the portfolio's valued twice a year independently. The book value is the book value is what they gave us at that year-end. But as I say, it's good to be bought. Can you remind me of your second question? The line was brilliant, by the way. No worries. I was just trying to get a sense on the reversion potential because I think it's due for a rent review next year. So wonder what the 4.9 could become next year? Well, it is due for a rent review. I mean, obviously, rent reviews, they're always done on a get down to a net effective rent. So they're not always as positive. But I would say on reversion yield, low fives, all right? I mean, we wished the purchaser well. But I think from our point of view, we saw little rental growth on the rent review. And as I say, we were happy to sell it at sub-5%. And we thought, "Well, we're a recycling model. Get about GBP 80 million back into the business to reinvest elsewhere is a good business. Cool. Thank you very much. Then just one more. So if you're bonding, I would say low fives. Yeah? Cool. Thank you. And then just a separate question on cost, if that's possible. I appreciate sort of cost ratio's relatively high. I understand why, given the development-led model of the business. Is there any thought process around trying to bring that down through either increased scale and operational leverage in order to drive a greater income return for investors? You mean our overall cost rather than construction cost? Yes. Yes. Overall cost, the cost ratio of the business. So obviously, we're always mindful of the cost ratio. Our average cost ratio's at 28%, which is a lot lower than others. And obviously, when you've got scale, it's more implicit. And in respect of the business, obviously, the bigger the business, hopefully, the lower the ratio. And if we could grow the business, we would certainly look to do that. But nothing to reveal as such. Paul, this is a Q1 update. We don't provide any further figures. I can tell you, though, last year's figures, you'll notice, they were elevated by the unexpected high energy costs that we saw through last year. We haven't disclosed any figures in Q1. We'll do that at the half-year. But I can tell you our cost ratio's down in Q1 compared to last year, but we're not disclosing those figures at this stage. Yeah. Perfect. Thank you very much. Thank you. Ladies and gentlemen, we do have web questions at this time. Good. So we've got two questions. The first is from Adam Shapton at Green Street. Is the furnished and flexible ERV beat at 19.8% against a specific furnished and flexible ERV, or is it based on the ERV of a normal fit-out list? Well, we'll pass that to Emily to answer. Yeah. The uplift that we referred to there is against an already elevated furnished and flexible ERV and is a net figure after any additional costs. Then the second question is from Zach Gage at UBS. And it is, "How does the GBP 50 per sq ft letting on The Whitechapel Building to PLP compare to the ERV? That one is just marginally above. So it's about 5.3% above. ERV was GBP 47.50. So in that marketplace, a good level rent for that deal. I think it's a very good rent. I mean, good to see a good 10-year lease again. So it's interesting to see how that market's picked up. I think that's the end of questions on the web. We got any more questions online? We do not have any further questions on the audio bridge. Well, can I just say thank you very much for listening in today. We're very busy. We're encouraged by the active demand across the whole of our portfolio of getting ready for our next phase of developments. If any of you guys got any further questions you'd like to raise, Robbie, the team, the rest of us are around later today. Obviously, we look forward to catching up fully in terms of the beginning of August. So have a good day in this lovely sunny weather. Take care, everyone. Thank you. This presentation has now.