Life Science REIT reported a 6.9% fall in EPRA net tangible assets (NTA) in annual results for 2024, laying bare the company’s struggles that led to its board launching a strategic review and putting it up for sale.
EPRA NTA at the end of 2024 was 74.4p, down from 79.9p at the end of 2023, as the group’s portfolio of office and lab space fell 4.0% over the year to £385.2m.
Earnings were impacted by higher financing costs, with adjusted earnings per share of 1.7p (2023: 1.9p). Contracted rent, however, increased to £15.3m (2023: £14.0m), with a further £0.6m from developments.
The company’s dividend has been suspended pending the outcome of the strategic review.
Loan to value was 30.4% (2023: 24.7%), with the increase driven by a higher rate of debt drawn to finance developments in the year. That debt was on higher rates, which are fully hedged at 4.5% to March 2025 and 5.5% until September 2025.
Chair Claire Boyle said that the board was confident the company’s portfolio would be attractive to a number of potential bidders.
She added: “As announced on 14 March 2025, the board is currently undertaking a strategic review to consider the future of the company and to explore all options available to maximise value for shareholders.
“The background to this decision was set out in that announcement and reflects the significant headwinds the company has faced since IPO, including higher inflation and elevated interest rates, which have driven a fundamental slowdown in leasing activity and negatively impacted investor sentiment. Coupled with the company’s size and low levels of liquidity, these factors have resulted in the company’s share price trading at a significant discount to net asset value for a prolonged period of time.
“The board is confident that the company’s assets, which are focused on the “Golden Triangle” research and development hubs of Oxford, Cambridge and London’s Knowledge Quarter, will prove attractive to a number of parties. Given the uncertainty inherent in the possible outcomes of the strategic review, these results have been prepared on a going concern basis with material uncertainty.
“In addition, in recent weeks, the board has successfully reached an agreement with Ironstone Asset Management, the company’s investment adviser on a revision of the Investment Advisory Agreement, which will deliver cost savings of c. £1.0m per annum based on the December 2024 net asset value.
“In the meantime, the team remains sharply focused on capturing upside from the portfolio; £1.5m of contracted rent has been captured since the interim results in September 2024, a further £1.1m is in solicitors’ hands, and occupier engagement is encouraging.”
