Assura : Good operational and strategic progress; further dividend increase announced

21 May 2024

Assura plc

Good operational and strategic progress; further dividend increase announced

Assura plc ("Assura"), the specialist healthcare property investor and developer, today announces its results for the year ended 31 March 2024.

Jonathan Murphy, CEO, said:

"We have continued our track record of growth to deliver another period of increased EPRA earnings and dividend, driven by our disciplined approach to investment, extensive sector expertise, and ability to identify new market opportunities. It is these capabilities, underpinned by our strong financial position and secure balance sheet, that make Assura best placed to meet the critical need for new and enhanced healthcare capacity in a community setting.

"Our portfolio continues to deliver high-quality cash flows, against a turbulent economic backdrop, as we further demonstrate our long-term resilience with another year of strong financial performance - increasing rental income by 4% to £143.3 million. Opportunities across broader healthcare markets, each identified as meeting the same underlying demand and offering attractive risk-adjusted investment characteristics, are becoming meaningful contributors to Assura's £2.7bn portfolio and cash flows. Our five completions reflect the shifting demand in the healthcare sector and include schemes for private operators such as a state-of-the art day case hospital in Kettering as well as our first development in Ireland.

"We have today separately announced a £250m joint venture with USS is an exciting transaction that will further strengthen our balance sheet whilst diversifying the available funding sources to support Assura's continued growth trajectory. The long-term partnership aligns with cross-party political support for investment into essential NHS community healthcare buildings that are so needed to enable better health outcomes.

"Assura is the partner of choice for the future - best positioned to provide high-quality, sustainable new premises for the delivery of health services in the community - and deliver long-term value for all stakeholders."

Attractive and resilient assets with another period of EPRA earnings and dividend growth

• Passing rent roll increased 5% to £150.6 million (2023: £143.4 million) with WAULT of 10.8 years
• Net rental income up 4% to £143.3 million (2023: £138.0 million)
• Investment property value £2,708 million (March 2023: £2,738 million)
• Net Initial Yield ("NIY") widened 30 basis points to 5.17% (March 2023: 4.87%)
• EPRA earnings up 6% to £102.3 million (2023: £96.8 million) and EPRA EPS of 3.4p (2023: 3.3p)
• IFRS loss before tax £28.7 million (2023: £119.2 million) and EPS (1.0)p (2023: (4.0)p), reflecting a 4% like-for- like valuation decline driven by outward yield shift
• 2.4% increase in the quarterly dividend to 0.84 pence per share (3.36 pence on an annual basis) with effect from the July 2024 payment

Answering critical need for new health care capacity in a community setting

• Portfolio of 614 high-quality primary care properties serving 6.4 million people across the UK
• Five developments completed in the period (completion value £72 million) and one acquisition in Ireland (Wicklow) that includes opportunity for a significant asset enhancement project
• Completed eight asset enhancement capital projects (total spend £8.9 million); on site with five (total spend £4.0 million)
• Rent reviews generated a like-for-like increase of 8.9% on 24% of rent roll reviewed (weighted average annual rent increase of 3.9%1)

£250 million joint venture; to further strengthen balance sheet and support Assura's growth trajectory

• Assura today announces strategic partnership with USS, the principal pension scheme for universities and Higher Education institutions in the UK, focused solely on assets let directly to NHS or GP tenants
• Long-termpartnership will support investment into essential NHS community healthcare buildings, to help address the current patient backlog and meet demand for modern, flexible healthcare properties

• Seeded with an initial agreed portfolio of seven assets from Assura's existing portfolio valued at £107 million; targeting growth to £250 million over the next three years with the potential to increase this to £400 million
• Assura will act as property manager, with an appropriate asset management fee linked to vehicle gross asset value, as well as retaining 20% of the equity interest

Good momentum from strategic expansion into broader healthcare markets

• Opportunities across broader healthcare markets becoming meaningful contributors to portfolio and cash flow - each identified as closely aligned with existing portfolio with a strong underlying tenant covenant, and significant future growth potential:
  o Private health: Completion of newly built state-of-the-art day case hospitals in Kettering and Guildford
  o NHS Trusts: On site developments include two schemes directly with NHS Trusts including £25 million Northumbria Training Academy in Cramlington (completed post year end) and £11 million net zero carbon in operation Ambulance Hub in Bury St Edmunds
  o Mental health: Currently on site with children's therapy centre in Fareham
  o Ireland: Four standing investments in Ireland - one with a significant development opportunity; on site with one in-house development and two forward funding projects with a further two in the immediate pipeline

Disciplined investment activity with pipeline of attractive opportunities

• On site with eight developments; total cost of £92 million (March 2023: 11, £129 million) of which £42 million is remaining to be spent
• Immediate development pipeline of five schemes (total cost £28 million), and extended pipeline of 34 schemes (total cost £423 million)
• Pipeline of 18 asset enhancement capital projects (projected spend of £9 million) over the next two years

The Bigger Picture: Health at the heart of all decision-making

• Relaunched ESG strategy The Bigger Picture to provide lens to view strategic decisions
• Three pillars of Healthy Environment, Healthy Communities and Healthy Business. In the year to 31 March 2024: o Healthy Environment: 45 energy efficient building upgrades delivered in the year, saving 1.9m kWh per year. 66% of portfolio now at EPC B or better (2023: 53%); on site with first two net zero carbon developments at Fareham and Winchester, and net zero carbon in operation scheme at Bury St
  Edmunds
  o Healthy Communities: five new developments completed to benefit communities; £3.40 of social value generated from every £1 donated and team volunteering hours significantly increased year on year; Assura Community Fund has committed over £2.0 million since 2020 to community health related projects
  o Healthy Business: 11th consecutive year of dividend growth and named in the Top 10 of the FTSE 250 Women Leaders 2023 review
• Intention to become a B-Corp; giving strong external accreditation of our approach to social responsibility. Expected to be the first FTSE 250 entity to achieve this. Certification to be ratified following AGM in July 2024

Robust financial position and balance sheet

• Weighted average interest rate unchanged at 2.30% (March 2023: 2.30%); all drawn debt at fixed rates
• Weighted average debt maturity of 6 years, no refinancing on drawn debt due until October 2025. Over 50% of drawn debt matures beyond 2030, with our longest maturity debt at our lowest rates
• Revolving credit facilities refinanced in October 2023, increased to £200 million, reduced overall cost and adding sustainability-linked KPIs
• Net debt of £1,217 million on a fully unsecured basis with cash and undrawn facilities of £235 million (including refinanced RCF)

Summary results

Financial performance	March 2024	March 2023	Change
Net rental income	£143.3m	£138.0m	3.8%
IFRS loss before tax	£(28.7)m	£(119.2)m	(75.8)%
IFRS loss per share	(1.0)p	(4.0)p
EPRA earnings per share	3.4p	3.3p	3.0%
Dividend per share	3.24p	3.08p	5.2%
Property valuation and performance	March 2024	March 2023	Change
Investment property	£2,708m	£2,738m	(1.1)%

Diluted EPRA NTA per share	49.3p	53.6p	(8.0)%
Rent roll	£150.6m	£143.4m	5.0%
Financing	March 2024	March 2023	Change
Net debt to EBITDA	9.4x	9.1x
Undrawn facilities and cash	£235m	£243m	(3.3)%
Weighted average cost of debt	2.30%	2.30%	No change

1 Weighted average annual uplift on all settled reviews

Alternative Performance Measures ("APMs")

The highlights page and summary results table above include a number of financial measures to describe the financial performance of the Group, some of which are considered APMs as they are not defined under IFRS. Further details are provided in the CFO Review, notes to the accounts and glossary.

For further information, please contact:
Assura plc	Tel: [phone]
Jayne Cottam, CFO	Email:[e-mail]
David Purcell, Investor Relations Director
FGS Global	Tel: [phone]
Gordon Simpson	Email:[e-mail]
Grace Whelan

A presentation for investors and analysts followed by live Q&A will be hosted at the London Stock Exchange on 21 May 2024 at 9.00am BST. The event will also be streamed live at the following link, and shortly after the event a full recording will be available.

Webcast link:https://brrmedia.news/AGR_FY23

This announcement contains inside information as defined in Article 7 of the EU Market Abuse Regulation No 596/2014 and has been announced in accordance with the Company's obligations under Article 17 of that Regulation.

Notes to Editors

Assura plc is the UK's leading specialist healthcare property investor and developer. Assura enables better health outcomes through its portfolio of more than 600 healthcare buildings, from which over six million patients are served.

A UK REIT based in Altrincham, Assura is a constituent of the FTSE 250 and the EPRA* indices. As at 31 March 2024, Assura's portfolio was valued at £2.7 billion and has a strong track record of growing financial returns and dividends for shareholders.

At Assura, we BUILD for health, having developed over 100 new healthcare buildings in our history, and at the heart of our strategy sits The Bigger Picture; Healthy Environment (E), Healthy Communities (S), Healthy Business

(G).

Further information is available at www.assuraplc.com

Assura plc LEI code: 21380026T19N2Y52XF72

*EPRA is a registered trademark of the European Public Real Estate Association.

Chair's statement

Delivering growth for our shareholders

I am pleased to be reporting to you on another year in which we have delivered for all of our stakeholders - delivering new buildings for health services, delivering building upgrades and sustainability improvements, delivering social value through our community initiatives and delivering growth for our shareholders.

The delivery of health services in the UK is a subject which is so often front and centre of the political agenda and is incredibly important to the population of the UK. The NHS faces many challenges: long waiting lists, an ageing population with increasingly complex health needs, budgetary pressures, ageing infrastructure and a wave of medical and technological innovations. All of these will need to be addressed in the coming years.

Whilst the NHS continues to be a system of which we, in the UK, are rightly proud, it is also a system that needs help to continue to adapt and deliver the changes a fit-for-purpose health service requires.

There are many improvements that can be made to achieve this. Moving services out of hospital into a community- setting. Shifting the focus to prevention from treatment. Investing in an estate which has a growing maintenance backlog. Training the staff needed to deliver the healthcare of the future. Harnessing the power of digital delivery and access. Thinking about sustainability as an investment for improved long-term cost efficiency. All areas that can be enabled through Assura's expertise and experience.

Increasingly, the NHS is supported by, or patients choose to be seen by, the private sector. Embracing the help of the private sector from capacity to expertise can enable the health system as a whole to become more efficient. Jonathan's CEO Statement covers why we consider private assets, and those in broader healthcare markets, as attractive investments. What is most important is that patients get early diagnoses and then are treated promptly and efficiently - something that Assura enables by creating standout quality facilities that provide capacity to support high quality patient care and improved patient outcomes.

We continue to run our business for the long term, including conservatively managing our balance sheet. Whilst the recent economic headwinds have led to many difficult decisions around capital allocation and cost control, our long- term prospects remain strong. The recent valuation movement of our portfolio has no impact on our occupiers or the underlying quality of our cash flows.

We are proud to have delivered another year of growth in earnings and dividend for shareholders.

This growth has not come at the expense of our other stakeholders, who remain at the centre of our strategic decision making. Our re-launched ESG strategy, The Bigger Picture, doesn't change what we are doing. It does, however, provide us with a lens through which to frame our decisions - thinking about ensuring a Healthy Environment, positively contributing to Healthy Communities and remaining a Healthy Business. We believe our approach leaves us well-placed to capture more than our fair share of opportunities over the long term.

Even in times of adversity, The Bigger Picture sets the long term expectation from the public.

Once again I would like to reiterate that all the great things our business does would not be possible without the skill and dedication of our team. We promote creative thinking - our buildings are not 'one size fits all' and that speaks to the approach we collectively take. We pride ourselves on the strength of our long term relationships, which ultimately comes down to how everyone within our organisation operates and conducts themselves.

We continue to look to the future with a high degree of optimism - seeing myriad ways that our business can grow and deliver for all of our stakeholders, economic returns, innovation, expertise, ultimately enabling better health outcomes.

Ed Smith CBE

Non-Executive Chair

21 May 2024

CEO statement

Delivering essential healthcare infrastructure to create value for all stakeholders

Assura is a business built for the long-term, enabling better health outcomes to create value for all our stakeholders.

As the leading investor and developer of healthcare buildings in a community setting, Assura is best-placed to meet the critical need for delivery of fit-for-purpose, sustainable healthcare buildings leveraging our extensive sector experience and taking a consistently, disciplined investment approach.

The UK is facing a healthcare crisis, and the nation's ageing population combined with unrelenting hospital waiting lists continues to drive significant demand for investment in healthcare infrastructure.

This demand for investment in improved and more diverse health facilities has received cross-party political support, with countless reports highlighting the need to move services out of hospital and tackle health inequalities within communities in a cost-effective way. 2024 is set to be an election year and the NHS will undoubtedly be a key election topic, already having been granted considerable air time by all the major political parties in recent months. Whichever party is in Government post-election, our expectation is that there will continue be a desire to demonstrate improvements in health services during the next parliamentary term. Investment in community healthcare is an obvious way to achieve this - easing pressure on the NHS, benefiting patients, focusing on prevention rather than treatment, and ultimately making the health system more efficient over the long-term.

It is these essential health spaces that Assura invests in and develops, across healthcare markets including for private providers, and our resilient cash flows which have delivered growing dividends to our shareholders, underpinned by long-term healthcare demands.

Our decision making is on a long-term basis too and is why we continue to illustrate discipline in our investment and development activities, waiting for the right opportunities and adapting as our cost of capital has evolved over the past 18 months in response to the macro-economic environment. We have moved on site with five developments in the year as rent negotiations catch up with the current cost of new buildings. We see pockets of improvement in certain locations around the country, generally where demand is strongest, and maintain our push for a wider unlocking.

Recognising the evolving and diversified nature of healthcare demand in communities, we continue to develop opportunities in broader healthcare markets: with NHS Trusts, partnerships with private providers, provision of mental health service infrastructure and expansion into Ireland. We identified all of these areas as demonstrating the same underlying market demand for more investment in health buildings; structural trends that support this demand; offering attractive risk-adjusted investment characteristics with long leases and a secure cash flow stream; and benefitting from Assura's extensive sector experience, expertise and long-term relationships.

We have a strong financial position, with a secure balance sheet, A- investment grade credit rating from Fitch and a debt book, one of the best in the UK listed real estate sector, that is fully fixed at a rate of 2.3% and with a maturity of 6 years. These characteristics position us well for the long-term as we continue to invest in our capabilities to remain best-placed to meet the needs of our customers.

Intrinsic to delivering better outcomes for all our stakeholders is our ESG focus - which underpins everything we do at Assura as we support the communities and environments we serve to deliver associated long-term health benefits.

Our newly refreshed ESG strategy - the Bigger Picture - provides three clear pillars of Healthy Environment, Healthy Communities and Healthy Business, against which to align our strategic decisions, central to which sits Assura's high quality team. Our success would not be possible without this team, and we were delighted to see strong positive results from our staff engagement survey as well as recognition for our gender diversity - being Top 10 for the FTSE 250 Women Leaders 2023 review.

Financial and operational performance

Our business is built on the reliability and resilience of the long-term, secure cash flows from our high-quality £2.7 billion portfolio of 614 properties alongside our efficient capital structure.

We strive to grow the rental income generated from our portfolio…

Assura has consistently demonstrated an ability to identify and secure new opportunities for growth, building on our market-leading capabilities to manage, invest in and develop outstanding spaces for health services in our communities.

We have continued our strong track record of investing with capital discipline. We made one acquisition in Ireland and have closely monitored our on site developments to deliver them on budget. We celebrated our 100th development completion of Prestbury Medical Centre in Wolverhampton, with a total of five completions (£72 million) during the year that also included schemes for private operators such as a state-of-the art day case hospital in Kettering and a cancer care facility in Guildford as well as our first development completion in Ireland: Kilbeggan Medical Centre. These diverse schemes, alongside the contribution from portfolio management, enabled us to deliver 4% growth in net rental income to £143.3 million, and our passing rent roll stands at £150.6 million 5% higher than 12 months ago.

…whilst protecting the quality of our cash flows…

An essential part of our growth strategy is the careful review of every asset for opportunities to increase its lifetime cash flows and impact on the community. Our portfolio management team seek to enhance the value of our assets through agreeing rent reviews, completing lease re-gears, letting vacant space and undertaking physical extensions.

This year, the team completed 307 rent reviews (generated an 8.9% uplift on the rent reviewed), 15 lease re-gears, and invested in eight capital projects and 45 sustainability improvements. Collectively these added £3.4 million to our rent roll, offering attractive growth for modest capital outlay. Our total contracted rental income, which is a combination of our passing rent roll and lease length, stands at £1.8 billion, our weighted average unexpired lease term is 10.8 years and 95% of our income comes from GPs, the NHS, the HSE, pharmacies or established private operators.

…and carefully controlling our balance sheet and cost base…

Despite the impact of inflation, we reduced administrative expenses and our EPRA Cost Ratio fell. The decline in valuation, albeit lower than in the previous year nevertheless resulted in us recording an IFRS loss of £29 million or 1.0 pence per share.

Our balance sheet remains strongly positioned with robust debt metrics of net debt to EBITDA, interest cover and LTV. Our investment grade rating of A- was re-affirmed by Fitch Ratings Ltd in January 2024.

All of our drawn debt has fixed interest, at an average of 2.3%, a weighted average maturity of 6 years and we have no significant refinancings due in the next four years.

…to deliver earnings growth that supports our dividend policy.

These elements have enabled us to continue our track record of growth year on year. Our EPRA earnings have increased by 6% to £102.3 million which translates to an EPRA EPS of 3.4 pence per share.

The strength of our income and the growth we have delivered is reflected in our fully covered dividend payments, which we have now increased for 11 consecutive years. Alongside these results, we announce a 2% increase in the quarterly dividend payment to 0.84 pence with effect from the July 2024 payment, equivalent to 3.36 pence per share on an annualised basis.

Assura outlook

The primary care market remains a challenging environment in which to achieve external growth, with delays in agreeing the rents required for new build developments to be commercially viable. The underlying demand for new buildings remains high, so we are confident that this position will unlock in due course, and pockets of opportunity have started to emerge in some regions. We only move on site when all aspects of a scheme (NHS approval, fixed price construction contract, agreement for lease in place) are agreed in full.

Our focus over the past 12 months has been on efficiently delivering our on site schemes and driving internal growth, as well as continuing to grow our longer term pipeline of opportunities across broader healthcare markets.

We are currently on site with eight developments (remaining spend £42 million) of which six are due to complete in 2024 and so will positively boost our rental income in the coming months, as well as having attractive long term rental growth characteristics.

The make-up of schemes we have completed in recent years is where we have seen change. Our five completions include only two UK medical centres (in Kings Lynn and Wolverhampton) - the others being two treatment centres for private providers (Guildford and Kettering) and one primary care community centre in Ireland (Kilbeggan), building on our successes in recent years with the West Midlands Ambulance Hub and several private day-case hospitals.

Similarly, our eight on site schemes include two UK medical centres (Southampton and Winchester). The others include three Irish schemes (Castlebar, Birr and Ballybay), two buildings for NHS Trusts (Cramlington and Bury St Edmunds) and an NHS children's therapy centre (Fareham).

Our capital markets event in February highlighted the attraction of these broader healthcare markets, with very similar investment characteristics to our existing portfolio - long leases, upward only rent reviews, and, most importantly, underpinned by the long-term health needs in each particular location that gives us a strong underlying occupier covenant. All of these areas offer attractive growth in the future, both short- and long-term, and we expect these, collectively, to become increasingly meaningful contributors to our rental growth and earnings, alongside the strong prospects in the primary care market.

Having completed eight asset enhancement projects (£8.9 million) in the period, we are on site with a further six (total spend £4.0 million). The nature of each of these projects is different - for example, a significant extension and refurbishment of the existing area at Wantage, a sustainability-linked improvement alongside a reconfiguration and lease regear at Ling House in Keighley, and a sustainability linked upgrade in Banbury (conversion to an air source heat pump). Crucially each of these responds to specific local and community needs for health services and associated infrastructure. Delivering projects such as these helps us serve our customers best, as well as driving long-term returns from the assets in our portfolio.

Market outlook

Assura has a vital role as a partner to a range of health providers to ease the pressures faced by the system, whether with GPs, with NHS Trusts, mental health services, private providers or the HSE in Ireland. Our unique set of skills leaves us well-placed to capture opportunities across these identified areas.

Health providers need a specialist health care landlord to develop new premises or to improve their existing estate and Assura's long-term relationships in healthcare, focus on social impact and sustainability, and capabilities across development and asset enhancements means we can offer health care providers a complete, long-term solution.

We are the partner of choice for the future: best placed to provide high-quality, sustainable new premises for delivery of health services, to retrofit existing buildings to meet the net zero carbon challenge, partnering with our supply chain to maximise the social value that we create for the communities we operate in and continually evolving our offering through adopting the latest technologies and responding to shifting demand in the healthcare sector.

This approach means we are enabling our customers, and partners, to do what they do best - delivering quality health care services and better patient outcomes.

Jonathan Murphy

CEO

21 May 2024

CFO Review

A disciplined approach creating growing returns for investors

Despite the turbulent economic backdrop, our portfolio continues to deliver high-quality cash flows, which combine with our disciplined cost control and fixed-rate debt book to deliver growing EPRA earnings.

We have continued to demonstrate our long-term resilience with another year of strong financial performance. Our focus has been on delivering our on site developments and generating internal growth from rent reviews and asset enhancement activities.

This year we successfully refinanced our revolving credit facility with improved terms; increasing the size of the facility, reducing the costs and adding sustainability-linked KPIs. The improved terms are a reflection of the strength of our business, which also saw our A- rating from Fitch reaffirmed with a stable outlook.

Despite the wider macroeconomic uncertainty, with the inflationary environment and increase in interest rates, the strong financial performance highlights the resilience of our assets in generating high-quality cash flows. Our asset class benefits from increasing demand, long leases and a primarily government-backed occupier base, and so it remains attractive regardless of the political or economic backdrop.

This is then enhanced by our disciplined balance sheet management and cost control. The long-term, fixed and sustainable financing in place, and the reduction in administrative expenses, despite the inflationary environment, means the growth in rental income can efficiently flow through to EPRA earnings and the dividend we pay.

All of this means we continue to have high confidence in our future prospects and our ability to deliver attractive returns that benefit all of our stakeholders.

Alternative Performance Measures ("APMs")

The financial performance for the period is reported including a number of APMs (financial measures not defined under IFRS). We believe that including these alongside IFRS measures provides additional information to help understand the financial performance for the period, in particular in respect of EPRA performance measures which are designed to aid comparability across real estate companies. Explanations to define why the APM is used and calculations of the measures, with reconciliations back to reported IFRS measured normally in the Glossary, are included where possible.

Portfolio as at 31 March 2024 £2,708.3 million (2023: £2,738.0 million)

Our business is based on our investment portfolio of 614 properties (2023: 608).

This has a passing rent roll of £150.6 million (2023: £143.4 million), 79% of which is underpinned by the NHS. The

WAULT is 10.8 years (2023: 11.2 years) and we have a total contracted rent roll of £1.76 billion (2023: £1.77 billion).

At 31 March 2024 our portfolio of completed investment properties was valued at a total of £2,652.1 million (2023: £2,667.4 million), which produced a net initial yield ("NIY") of 5.17% (2023: 4.87%). Taking account of potential lettings of unoccupied space and any uplift to current market rents on review, our valuers assess the net equivalent yield to be 5.41% (2023: 5.09%). Adjusting this Royal Institution of Chartered Surveyors ("RICS") standard measure to reflect the advanced payment of rents, the true equivalent yield is 5.43% (2023: 5.12%).

Our EPRA NIY, based on our passing rent roll and latest annual direct property costs, was 5.08% (2023: 4.77%).

	2024	2023
	£m	£m
Net rental income	143.3	138.0
Valuation movement	(131.5)	(215.3)
Total Property Return	11.8	(77.3)

Reflecting the recent unstable macroeconomic backdrop and movement in gilt yields, we, like most real estate companies, recorded a loss on valuation of £131.5 million in the period. This is consequently reflected in our Total Property Return (expressed as a percentage of opening investment property plus additions) which was 0.4% for the year (2023: negative 2.6%).

The net valuation loss represents a 4% movement on a like-for-like basis (prior year 6.4%). However, this was offset by the positive actions we have taken in the year to improve the portfolio - with 15 lease regears, eight capital projects and £3.4 million additional rent from asset enhancement activities.

As a comparison, the 10-year and 15-year UK gilts moved significantly in the year, now standing at 3.93% and 4.23% respectively (2023:3.49% and 3.78% respectively).

Portfolio additions

We have continued to take a disciplined approach to investment in the period, with primary spending relating to on site developments and asset enhancement capital projects. This follows on from the slowdown in activity which commenced around October 2022 following the economic uncertainty in the UK which preceded an increase in interest rates.

Expenditure in the period can be split between investments in completed properties, developments, forward-funding projects, extensions and fit-out costs enabling vacant space to be let as follows:

	2024
	£m
Acquisitions	13.2
Completed developments	71.8
Additions	85.0
Disposals	(3.4)
Asset enhancement & sustainability	15.7
Net investment	97.3

We have completed one acquisition in Ireland, five developments reached practical completion and completed eight asset enhancement capital projects. These activities focused on completing outstanding commitments, and opportunities for generating internal growth.

These additions were at a combined total cost of £85 million with a combined initial passing rent of £3.8 million and a WAULT of 25 years.

Development activity

We completed five developments during the year, with a completion value of £71.8 million. The completions reflected a mix of GP surgeries (two including the 100th development in our 20-year history, Prestbury Medical Practice in Wolverhampton) and broader healthcare markets (two private day case units in Kettering and Guildford, and our first completion in Ireland at Kilbeggan).

Reflecting our disciplined approach in response to the current economic backdrop, only three schemes have moved on site during the year. All three are in broader healthcare markets with two in Ireland and one ambulance hub in Bury St Edmunds, meaning that we have eight schemes on site at 31 March 2024. These eight schemes have a combined development cost of £91.2 million, of which £42.0 million is remaining to be spent as at the year end.

We continue to source additional schemes for our development pipeline, but the pressures of both rising construction costs and higher costs of finance have led us to proceed with discipline before committing, ensuring all aspects are fixed before we commence. We have an immediate pipeline of five properties (estimated cost £28 million, which we would hope to be on site within 12 months) and an extended pipeline of 34 properties (estimated cost £423 million, appointed exclusive partner and awaiting NHS approval).

Live developments and forward funding arrangements

	Forward fund/	Principal	Estimated	Total development	Costs	Size
	in house	occupier	completion date	costs	to date	sq.m
				£m	£m
Ballbay	FF	HSE	Q4 24	4.3	1.2	1,695
Birr	FF	HSE	Q3 25	15.3	0.9	5,000
Bury St Edmunds	In house	NHS Trust	Q2 24	11.1	8.0	2,900
Castlebar	In house	HSE	Q2 25	11.9	1.0	4,200
Cramlington	In house	NHS Trust	Q2 24	26.7	23.5	6,500
Fareham	In house	NHS Trust	Q4 24	5.2	2.1	950
Southampton	In house	GPs	Q2 24	8.3	7.9	1,385
Winchester	In house	GPs	Q3 24	8.4	4.6	1,353

Portfolio management

Our rent roll grew by £7.2 million during the year to £150.6 million. The growth came from rent reviews (£3.1 million), acquisitions and development completions (£3.8 million), and asset enhancement activity (£0.3 million).

During the year we successfully concluded 307 rent reviews (2023: 352 reviews) to generate a weighted average

annual rent increase of 3.9% (2023: 3.8%) on those properties, which is a figure that includes rent reviews we chose not to instigate in the year. These 307 reviews covered £34.1 million or 24% of our rent roll at the start of the year and, on a like-for-like basis, the absolute increase of £3.1 million is an 8.9% increase on this rent. Our portfolio benefits from a 39% weighting in fixed, RPI and other uplifts which generated an average uplift of 5.2% during the period. The majority of our portfolio is subject to open market reviews and these have generated an average uplift of 1.7% (2023: 1.5%) during the period.

Our total contracted rental income, which is a function of the current rent roll and unexpired lease term on the existing portfolio and on site developments, is £1.76 billion (March 2023: £1.77 billion). We grow our total contracted rental income through additions to the portfolio and getting developments on site, but increasingly our focus has been extending the unexpired term on the leases on our existing portfolio ("regears").

We delivered 15 lease regears in the year covering £0.5 million of current annual rent and adding 10 years to the WAULT for those particular leases and two vacant space lettings adding £0.1 million annual rent (2023: 15 regears, £2.0 million of rent). We have also agreed terms on a pipeline of 33 regears covering £4.4 million of rent roll and these are currently in legal hands.

We have completed eight capital projects in the year (total spend £8.9 million) and are currently on site with a further six (total spend of £4.0 million). These schemes increase the WAULT on those properties by 11 years and improve the sustainability performance of those buildings. In addition, we have 18 asset enhancement projects we hope to complete in the next two years with estimated spend of £8.7 million.

Our EPRA Vacancy Rate was 1.0% (March 2023: 1.0%).

Our current contracted annual rent roll is £150.6 million and, on a proforma basis, would increase to in excess of £161.0 million once on site developments, asset enhancement projects and rent reviews are completed.

Administrative expenses

Administrative expenses in the year were £13.2 million (2023: £13.3 million). The Group analyses cost performance by reference to our EPRA Cost Ratios (including and excluding direct vacancy costs) which were 13.2% and 11.7% respectively (2023: 13.5% and12.3%).

We also measure our operating efficiency as the ratio of administrative costs to the average gross investment property value. This ratio during the period equated to 0.48% (2023: 0.48%).