Key Performance Indicators

What it is: TSR measures the change in our share price over the year assuming that dividends paid are reinvested. This KPI reflects our commitment to delivering enhanced returns for our shareholders through the execution of our strategy over the medium term. TSR is a key metric used in setting the long-term incentive plan remuneration for both the Executive Directors and senior managers. 

Our performance: The TSR of the Group was 55.1 per cent, compared with 29.9 per cent for the FTSE 350 Real Estate index. This performance reflects a combination of the 22.6 pence dividend (15.2 pence 2020 final dividend and 7.4 pence 2021 interim dividend) paid during the year and an increase in the share price from 947.6 pence at 31 December 2020 to 1,436.5 pence at 31 December 2021.

What it is: TPR is the ungeared combined income and capital return from our portfolio of standing  investments held throughout the year. It is an important measure of the success of our strategy in terms of asset selection and management. MSCI Real Estate prepares the calculation, as well as providing
benchmark TPR data for similar properties in their wider universe. We aim to outperform the benchmark over the long term. Details on how TPR impacts short- and long-term incentives are provided on pages 140 to 155 or the 2021 Annual Report and Accounts.

Our performance: The TPR of the Group’s standing assets held throughout 2021 was 33.7 per cent
(2020: 14.0 per cent). The UK portfolio generated a TPR of 39.1 per cent, performing ahead of the benchmark calculated by MSCI Real Estate UK All Industrial Quarterly of 36.4 per cent. The TPR of our Continental Europe portfolio was 24.0 per cent. Benchmark data for Continental Europe will be received later in the year.

What it is: TAR is the growth in Adjusted NAV per share plus dividends paid, expressed as a percentage of Adjusted NAV per share at 31 December 2020. It measures the return on capital and is a key metric used in setting the long-term incentive plan remuneration for both the Executive Directors and senior managers.

Our performance: The TAR for the Group was 42.5 per cent (2020: 19.3 per cent). This performance reflects a combination of the 323 pence increase in Adjusted NAV from 814 pence at December 2020 to 1,137 pence at 31 December 2021 and the 22.6 pence dividend (15.2 pence 2020 final dividend and 7.4 pence 2021 interim dividend) paid during the year.

What it is: Our headline Adjusted earnings per share (EPS) reflects earnings from our operating business: rental income less operating, administrative and financing costs and tax. It is the primary determinant of the level of the annual dividend. IFRS EPS includes the impact of realised and unrealised changes in the valuation of our assets which can often mask the underlying operating performance. The reconciliation between Basic EPS and Adjusted EPS can be found in Note 12(i) on page 194 of the 2021 Annual Report and Accounts.

Our performance: Adjusted EPS increased by 14.6 per cent to 29.1 pence during the year, reflecting higher rental income from our standing assets, new income from acquisitions and developments, and a 1.1p contribution from a performance fee received from our SELP joint venture.

What it is: The headline annualised rent contracted during the year less income lost from takebacks. There are two elements: to grow income from our standing assets by reducing vacancy and increasing rents from lease renewals and rent reviews; and to generate new rent by developing buildings either on a pre-let or speculative basis. Rent from new acquisitions is not included. 

Our performance: In total, we generated £72 million of net new annualised rent during the year (2020: £60 million). The increase was driven by higher rents on review and renewal in the UK and by the increased volume of rent from development completions and pre-let agreements secured during the year.

What it is: The proportion of our property assets (including investment, owner-occupier and trading properties at carrying value and our share of properties in joint ventures and excludes head lease ROU asset) that are funded by borrowings. At this stage in the cycle, and based on our investment plans, we aim to maintain our LTV at around 30 per cent for the foreseeable future. We believe that REITs with lower leverage offer a lower
risk and less volatile investment proposition for shareholders.

Our performance: The Group’s LTV ratio was slightly lower at 23 per cent, despite £1.5 billion of net investment in our business during 2021. This was mostly due to the unrealised gain on the value of our portfolio. The timing of investment decisions and disposals, as well as movement in the value of our assets may cause the LTV to fluctuate.