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CREATING
SPACE FOR
SCIENCE
Life Science REIT plc
Annual Report and Financial Statements 2024
OUR CULTURE
• Open and collegiate
• Purpose driven
• Appropriately challenging
• Combining experience
and innovation
STRATEGIC REPORT
Introduction
01
What makes a good life science space
02
Highlights
04
At a glance
06
Chair’s statement
08
Market overview
10
Our stakeholders
14
Section 172(1) statement
16
Objectives and strategy
17
Oxford Technology Park
18
Key performance indicators
20
Investment Adviser’s report
22
Sustainability
34
TCFD
40
Principal risks and uncertainties
50
Going concern and viability statement
59
CORPORATE GOVERNANCE
Governance at a glance
62
Chair’s introduction to Governance
63
Board of Directors
64
Corporate Governance statement
66
Nomination Committee report
76
Audit and Risk Committee report
79
Management Engagement Committee report
82
Sustainability Committee report
83
Directors’ remuneration report
84
Directors' report
88
FINANCIAL STATEMENTS
Statement of Directors’ responsibilities
92
Independent Auditor’s report
93
Consolidated statement of profit or loss
and other comprehensive income
101
Consolidated statement of financial position
102
Consolidated statement of changes in equity
103
Consolidated statement of cash flows
104
Notes to the consolidated
financial Statements
105
Company statement of financial position
131
Company statement of changes in equity
132
Notes to the Company financial statements
133
ADDITIONAL INFORMATION
Unaudited supplementary notes not part
of the consolidated financial information
136
EPRA sBPR reporting
145
Property portfolio
152
Shareholder information
153
Glossary
156
Contact details of the advisers
IBC
Visit our corporate website at:
lifesciencereit.co.uk
Our portfolio comprises five buildings, focused on the ‘Golden
Triangle’ research and development hubs of Oxford, Cambridge
and London’s Knowledge Quarter.
The Company is currently undertaking a Strategic Review to consider
the future of the company and to explore all strategic options
available to maximise value for shareholders.
Read more on page 06 and 09.
Our shares are traded on the Main Market of the London Stock Exchange,
under the ticker LABS.
Introduction to our 2024 Annual Report
LIFE SCIENCE REIT PLC IS THE UK’S ONLY
LISTED PROPERTY BUSINESS FOCUSED
ON THE GROWING LIFE SCIENCE SECTOR
.
01
PROGRESSING OUR STRATEGY
We are delivering
a range of space suitable for life
sciences use, and are attracting occupiers from across
the industry, helping to establish our assets as life
sciences destinations.
CREATING LIFE SCIENCE SPACE
FURTHER LEASING PROGRESS
FINANCING
Valuation
£385.2m
FY23: £382.3m
NTA per share
74.4p
FY23: 79.9p
Contracted rent
£15.3m
99.8% rent collection
LFL ERV growth
8.6%
Lab portfolio 13.7%
LTV
30.4%
FY23: 24.7%
Dividend per share
1.0p
FY23: 2.0p
01
Life Science REIT plc
Annual Report and Financial Statements 2024
01
SPACE TO EXPAND
The life science industry covers a
broad spectrum from large, multi-
national pharmaceutical companies,
to small, entrepreneurial businesses,
focused on a single discovery.
Occupiers are typically reluctant to
move which may delay experiments
and risks losing experienced staff,
so expansion space is
highly attractive.
GENEROUS SLAB TO
SLAB HEIGHTS
With more technical equipment, larger
than average floor to ceiling heights are
important and are a key structural factor
limiting the conversion of conventional
office space into life science space. Typical
heights required are 4–4.5 metres allowing
for a service zone of 0.8–1 metres above
the lab compared to 3.5–4.2 metres
for offices.
Golden Triangle locations
High quality, affordable space
Flexible offer, including
laboratory, office and
hybrid space
Growing provision of on-site
amenities
Specialist team with the
experience and flexibility
to meet occupier needs
WHAT MAKES A GREAT
LIFE SCIENCE SPACE?
OUR COMPETITIVE ADVANTAGE
02
Life Science REIT plc
Annual Report and Financial Statements 2024
02
EXCELLENT POWER
SUPPLY
Life science occupiers often use
specialised equipment with much
higher power requirements and
can request capacity three to five
times higher than that of a standard
office occupier. With the UK
electricity network under increasing
pressure, this can be challenging for
developers to deliver upon.
ACCESS TO LIFE
SCIENCES CLUSTERS
Life science businesses thrive by
exchanging ideas and many scientists
work across multiple institutions.
Proximity to leading academic
institutions enables occupiers to tap
into this network and attract talented
individuals to their team.
FREQUENT AIR CHANGES
Life science buildings need
infrastructure that supports
significantly higher air changes per
hour than standard offices to ensure
air quality, safety, and regulatory
compliance. This can be up to 20+
air changes per hour for laboratories,
compared to four to six in office
spaces.
GOOD LOCAL
INFRASTRUCTURE
Talented individuals are key to the
success of any life sciences business
and as well as being close to academic
centres, locations with good housing
and schools, excellent local transport
or parking facilities are highly attractive.
Onsite amenities, such as gyms and
restaurants as well as activities outside
of work are highly attractive.
LIMITED BUILDING
VIBRATION
Given the use of highly sensitive
equipment, buildings need to be
thoroughly tested to ensure that their
vibrations do not impact experiments.
Proximity to rail or underground can
render buildings unsuitable or require
anti-vibration measures to be installed
before repurposing for life science use.
03
Life Science REIT plc
Annual Report and Financial Statements 2024
03
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
HIGHLIGHTS
FINANCIAL
1
The Group presents EPRA Best Practices Recommendations as Alternative Performance Measures (“APMs”) to assist stakeholders in assessing performance
alongside the Group’s statutory results reported under IFRS. APMs are amongst the key performance indicators used by the Board to assess the Group’s
performance and are used by research analysts covering the Group. EPRA Best Practices Recommendations have been disclosed to facilitate comparison with
the Group’s peers through consistent reporting of key real estate specific performance measures. However, these are not intended as a substitute for IFRS
measures. Please see the unaudited supplementary notes on pages 136 to 144 for further details on APMs.
2
This is the total of dividends paid and declared in respect of the year to 31 December 2024. Dividends paid in 2024 totalled 2.0 pence per share, comprising
the 1.0 pence per share second interim dividend for 2023 and the 1.0 pence per share interim dividend for 2024. Dividends paid in 2023 totalled 2.0 pence
per share.
Development and leasing progress supporting
rental growth, but slower than expected
• Five new leases commenced in 2024 adding £1.9 million to
total contracted rent
• Contracted rents for the investment portfolio increased
to £15.3 million (31 December 2023: £14.0 million), with
a further £0.6 million from developments, taking total
contracted rents to £15.9 million
• Occupancy increased to 84.4%; like-for-like occupancy
increased to 83.6%
Valuations stabilising in the second half
with yield expansion reducing
• Like-for-like valuation down 4.0% driven by 30bps outward
movement in the net equivalent yield to 5.6%, more
pronounced in H1, partially offset by like-for-like lab ERV
growth of 13.7%
Balance sheet
• Loan to value 30.4%
• Debt fully hedged against SONIA at 4.5% interest payable
to March 2025 and 5.5% until September 2025
For the year ended 31 December 2024
1
As at 31 December 2024
1
Gross property income
IFRS loss before tax
IFRS loss per share
£16.3m
£(14.0)m
(4.0)p
2023: £15.5m
2023: £(21.9)m
2023: (6.2)p
EPRA earnings per share
Adjusted earnings per share
Dividends per share
2
1.7p
1.7p
1.0p
2023: 1.7p
2023: 1.9p
2023: 2.0p
Portfolio valuation
IFRS net asset value
IFRS net asset value per share
£385.2m
£262.8m
75.1p
As at 31 December 2023: £382.3m
As at 31 December 2023: £283.7m
As at 31 December 2023: 81.1p
EPRA net tangible assets per share
Loan to value ratio
Total accounting return
74.4p
30.4%
(4.4)%
As at 31 December 2023: 79.9p
As at 31 December 2023: 24.7%
As at 31 December 2023: (6.8%)
04
Life Science REIT plc
Annual Report and Financial Statements 2024
04
OPERATIONAL – INVESTMENT ASSETS
Embedded opportunities to drive future rents through
development, repurposing and capturing reversion
• Target portfolio ERV of £27.9 million
Recent trading
• Since the interim results in September 2024 £1.5 million of
new rent has been captured compared to our target of £3.2
million, with a further £1.1 million in solicitors’ hands
• Current contracted rent increased to £16.5 million, including
breaks exercised at Rolling Stock Yard of £0.7 million
Strategic Review underway
• Commenced 14 March 2025 to explore all strategic options
available to maximise value for shareholders, including a
possible sale or managed wind down of the Company
• Future dividends suspended pending outcome of
Strategic Review
Improvement in international sustainability indices
• MSCI A rated (2023: MSCI B)
• EPRA sBPR Gold award (2023: Silver)
1
Please see the unaudited supplementary notes on pages 136 to 144 for further details on APMs.
As at 31 December 2024
1
SUSTAINABILITY
As at 31 December 2024
Contracted rent roll
Estimated rental value
Occupancy
£15.3m
£22.4m
84.4%
As at 31 December 2023: £14.0m
As at 31 December 2023: £19.6m
As at 31 December 2023: 79.0%
WAULT to expiry
WAULT to first break
Net equivalent yield
5.3 years
3.1 years
5.6%
As at 31 December 2023: 5.8 years
As at 31 December 2023: 3.8 years
As at 31 December 2023: 5.3%
EPC A-C
Reduction in energy intensity
Reduction in scope 3 emissions
100%
15%
19%
2023: 87%
LFL and absolute basis
LFL basis
Charitable donations
Female representation on Board
Read more about
Sustainability
on pages 34 to 39
£10,000
50%
Supporting local communities
45% Investment Adviser
05
Life Science REIT plc
Annual Report and Financial Statements 2024
05
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Cambridge
23%
London
39%
Oxford
38%
Area:
237,900 sq ft built,
270,500 sq ft under construction / land
Type:
Labs 81%; Office 9%; Other 10%
Contracted rent:
£3.4 million
Investments; £0.6 million Developments
Valuation:
£146.4 million
Acquisition date:
May 2022
OXFORD TECHNOLOGY
PARK
1
Area:
230,400 sq ft
Type:
Labs 32%; Office 68%
Contracted rent:
£4.1 million
Valuation:
£80.1 million
Acquisition date:
December 2021
CAMBOURNE PARK SCIENCE
& TECHNOLOGY CAMPUS
2
Area:
53,900 sq ft
Type:
Labs 83%; Office 17%
Contracted rent:
£3.5 million
Valuation:
£83.1 million
Acquisition date:
December 2021
ROLLING STOCK YARD
4
Area:
12,600 sq ft
Type:
Laboratory
Contracted rent:
£0.3 million
Valuation:
£7.4 million
Acquisition date:
November 2021
THE MERRIFIELD
CENTRE
3
Area:
68,600 sq ft
Type:
Office
Contracted rent
: £4.0 million
Valuation:
£68.2 million
Acquisition date:
May 2022
7–11 HERBRAND STREET
5
Key attractions of the
Golden Triangle
• Top 10 universities
• Leading teaching hospitals
• Well established science parks
• Available talent pool
• Connectivity to London
The clustering together of entrepreneurial life sciences businesses around leading academic institutions and hospitals is central
to our thesis. The Golden Triangle locations are the most successful life sciences clusters in the UK and all of our assets are
located here.
Asset location by valuation
AT A GLANCE
OUR PORTFOLIO IS FOCUSED ON KEY
GOLDEN TRIANGLE LOCATIONS
06
Life Science REIT plc
Annual Report and Financial Statements 2024
06
A STRONG OCCUPIER MIX FOCUSED
ON LIFE SCIENCES BUSINESSES
BUILDING OUR EXPOSURE TO GROWTH SECTORS IN OUR MARKET
Contracted rent by life science subsector
28
Occupiers
99.8%
Rent collected
£15.3m
contracted rent
5.3
years WAULT
to expiry
Read more on pages 24 to 28
Pharmaceutical
Biotechnology
What is it?
The development and manufacturing of new drugs to treat
illness and disease as well as ancillary services such as
clinical research organisations ("CRO"), contract design
and manufacturing organisations ("CDMO") and technical
or innovation consultancies which support pharmaceutical,
biotechnology and medical devices companies at all stages of
the drug development and manufacturing process.
What is it?
The use of biomolecular and cellular processes to develop
products that can improve human, animal, plant health or
the health of the wider environment and the planet. Modern
applications of biotechnology often work through genetic
engineering, which works by modifying or interacting with
genetic materials and cell structures.
Our occupiers
Our occupiers
Health technology
Deep technology
What is it?
A broad spectrum, including artificial intelligence (“AI”) and
other data-driven techniques which are driving medical
innovation and healthcare advances, such as drug discovery
and more personalised healthcare as well as the devices,
instruments and hardware used for the prevention, diagnosis
and treatment of diseases.
What is it?
A growing sub-set of technology focused on finding
advanced technology solutions to complex global challenges
like climate change. These scientific or engineering solutions
often require lengthy research and development and large
capital investment before successful commercialisation.
Our occupiers
Our occupiers
of contracted rent
is from life science
occupiers
56%
Health technology
13%
Pharmaceutical
3%
Biotechnology
45%
Deep technology
39%
07
Life Science REIT plc
Annual Report and Financial Statements 2024
07
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
The Board is considering
all options available
to maximise value for
shareholders.
Claire Boyle | Chair
Introduction and market context
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 “Strategic Review”).
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 and negatively impacted investor
sentiment. Coupled with the Company’s size and low levels
of liquidity these factors resulted in the Company’s share
price trading at a significant discount to net asset value for a
prolonged period of time.
The Board has confidence 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.
In addition, in recent weeks, the Board has successfully
reached agreement with Ironstone, the Company’s Investment
Adviser on a revision of the Investment Advisory Agreement,
which will deliver cost savings of c. £1.0 million per annum,
based on December 2024 NAV.
Life sciences leasing market
2024 was a challenging year for leasing across the
Golden Triangle, with life sciences take up of 460,000
sq ft, just over half the amount of 2023. The uptick in
confidence which followed the general election proved
short-lived and sentiment weakened post the budget.
However, the Government has demonstrated its support
for the sector, with planned investment into the Oxford and
Cambridge region, including a new rail link, and the funding
environment has strengthened.
In 2024, £3.7 billion was raised for UK biotech funding, making
it the strongest year since the 2021 peak. £2.2 billion was
raised through VC funding and a further £1.5 billion was raised
through follow on financings suggesting a preference for well
established, lower risk ventures. Inevitably it takes time for the
impact of a successful fund raise to filter through to real estate
decision making but by the end of 2024, 300,000 sq ft of
space was under offer to life sciences companies.
Strategy and operations
Our priorities over the year were to progress our leasing
programme, deliver life science space and maintain a sound
financial position.
After a challenging first half, our markets were more stable
in the second half of the year and occupier interest has
remained at encouraging levels since the year end. However,
leasing transactions typically take longer to conclude in the
life sciences space, where fit outs can be more complicated,
and occupiers tend to be emerging businesses with less
property and legal expertise. Coupled with heightened macro
uncertainty towards the end of the year, our leasing activity
has therefore fallen short of our target of £3.2 million of
contracted rent to be added between September 2024 and
March 2025. We have however delivered a further £1.5 million
of contracted rent in that time period, and we have a further
£1.1 million in solicitors’ hands.
Over the course of the financial year, £1.9 million of new
leases commenced across the portfolio, bringing total
contracted rent for all assets to £15.9 million compared to
£15.1 million at the end of 2023. Post year end activity has
further increased contracted rent to £16.5 million, including
breaks exercised at Rolling Stock Yard, one lease expiry and
reversion captured. This compares to a target estimated rental
value for the portfolio of £27.9 million when fully developed
and let, underpinning our conviction in the value our portfolio
can deliver over time.
CHAIR’S STATEMENT
08
Life Science REIT plc
Annual Report and Financial Statements 2024
08
On 14 March 2025, the Company announced that it
was 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 that decision includes the
significant headwinds the Company has faced since
IPO, including higher inflation and elevated interest
rates, as well as the Company's size and low levels
of liquidity, which have resulted in the share price
trading at a significant discount to net asset value for
a prolonged period of time.
The outcome of the Strategic Review may include a
potential sale of the whole business or a managed
wind down of the Company. This has led to a material
uncertainty casting significant doubt over the Group’s
ability to continue as a going concern for the next
12 months, which is explained in detail on pages 59
to 61.
Our strategy of creating dedicated life science space has
made progress with the repurposing project at Cambourne
Park, covering 8,800 sq ft, reaching practical completion in
the year. However, delays to the delivery of the next phase
of power at Oxford Technology Park ("OTP") meant we
were unable to formally complete Unit 6B at Building 6 and
Buildings 7, 8 and 9 by the year end, although power has
now been connected to site and practical completion of all
Buildings is expected in Q225.
We have maintained a flexible approach with respect to
Buildings 10 and 11 and are working with the developer to
agree a final design and programme.
Financial performance
The total value of the portfolio stood at £385.2 million as at
31 December 2024, up marginally on an absolute basis, but
with the investment portfolio down 4.0% on a like-for-like
basis, driven by 30 basis points of yield expansion, partially
offset by like-for-like ERV growth of 8.6%. However, we are
encouraged that the rate of decline has continued to slow to
just 0.3% in the second half, from 3.8% in the first half.
The Group reported a 4.3% increase in net rental income
to £14.4 million during the period, driven by new leases
commencing in the year, with some rent lost through an asset
sold last year. Total costs were lower, driven by a reduction
in the Investment Adviser’s fee, however, net finance costs
were higher in the year resulting in adjusted earnings of £5.9
million, below the prior year (2023: £6.7 million).
As a result of the delays to leasing activity, and the
expectation that further lease incentives, including rent free
periods will be required to secure further leases, and the
associated impact on cash flow, the Company has decided to
suspend any future dividends until the Strategic Review has
been completed. Total dividends declared for the 2024 year
are therefore 1.0 pence per share.
Environmental, social and governance
Last year we set out our commitment to be net zero in scope 1
and 2 carbon emissions by 2040 and in scope 3 emissions by
2045. This year, we have made good progress on initiatives
which will support that. These include our renewable energy
project at OTP, where we are working with a supplier to own
and operate photovoltaic panels across the park. All our
space is now EPC A to C rated and our developments are all
tracking BREEAM Excellent certifications.
Our progress has been reflected in our MSCI ESG ratings
performance which has improved from a B to an A, an
increase of three ratings as well as achieving a gold award in
the EPRA Sustainability Best Practice Ratings, up from a Silver
in the prior year.
Conclusion
We have assembled a highly attractive portfolio, with excellent
locations in the Golden Triangle and embedded opportunities
to develop and repurpose our space over time. Our assets
are focused on a market which is structurally well supported
in terms of long-term demand drivers and constrained supply.
However, an unfavourable macro environment, combined with
the Company’s size and low levels of liquidity have proved
challenging to our business model.
Through the Strategic Review process, the Board will
be evaluating a range of options to maximise value for
shareholders. These may include a potential sale or managed
wind down of the Company. The Strategic Review is ongoing
and the Board will provide further updates to the market as
appropriate.
Claire Boyle | Chair
15 April 2025
A Strategic Review of the
Company is underway
We have assembled a highly
attractive portfolio, with
excellent locations in the
Golden Triangle.
09
Life Science REIT plc
Annual Report and Financial Statements 2024
09
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
MARKET OVERVIEW
2024 saw a recovery in UK biotech funding, with £3.7 billion
raised, making it the strongest year since the 2021 peak.
£2.2 billion was raised through VC funding but IPO activity
remained weak, influenced by wider macro uncertainty;
follow on financing had a very strong year, accounting for the
remaining £1.5 billion. Series B investments dominated UK VC
funding and combined with the strength of follow on financing
suggests a preference for more established and potentially
de-risked ventures.
This backdrop is supportive for the outlook of life sciences
real estate but there is inevitably a time lag between fund
raising and the decision to take space; anecdotally, based on
occupiers at our assets, this is at least nine months.
DEMOGRAPHICS
RESILIENT FUNDING ENVIRONMENT
GOVERNMENT SUPPORT
Long-term structural drivers in our market
Aging population
Key policy announcements
In the UK, the percentage of people aged 65 or over is
expected to increase from 18.1% in 2015 to 23.5% by 2035,
and this increase is more dramatic elsewhere in Europe.
These structural changes underpin long-term demand across
the life sciences spectrum, for example:
• To find cures or treat age-related illnesses
• To provide healthcare more efficiently / at lower cost
• To deliver more digital healthcare, enabling a smaller
number of professionals to treat a greater number
of patients
The life sciences industry contributes c. £13 billion to the UK
economy and is estimated to employ one in every 121 people.
The UK’s pre-eminent academic institutions also give it a
comparative advantage that has been recognised by the
Government who has identified life sciences as one of eight
growth sectors for the UK economy.
The Government reiterated its support for life sciences in the
Autumn Budget which included the following commitments:
• A total investment of £20.4 billion in R&D for the year
• A Life Sciences Innovative Manufacturing Fund, with a
long-term commitment of up to £520 million
• £40 million over five years to be invested in a Proof of
Concept Fund to support university spin-outs
• Progressing the East-West Rail project connecting Oxford,
Milton Keynes, and Cambridge
Percentage of the population aged 65 and over
2015
2035
0
5
10
15
20
25
30
35
Ireland
United Kingdom
France
Netherlands
Spain
Germany
Italy
%
VC
IPO
Follow-on
0
1
2
3
4
5
6
2024
2023
2022
2021
2020
£bn
3.7
1.8
2.0
5.3
2.6
VC
IPO
Follow-on
0
1
2
3
4
5
6
2024
2023
2022
2021
2020
£bn
3.7
1.8
2.0
5.3
2.6
Source: ONS
UK biotech financing
Bicester
Bedford
Milton Keynes
Oxford Parkway
Bletchley
Winslow
Tempsford
Marston Vale
Cambourne
Cambridge
Cambridge South
Oxford
East-West Rail project
10
Life Science REIT plc
Annual Report and Financial Statements 2024
10
DEEP TECHNOLOGY
FULLY FITTED SPACE
UNIVERSITY SPIN-OUTS
ESG CREDENTIALS
Current themes
Demand for both flexible and landlord-fitted, life sciences
space is growing, driven by the need to be operational
quickly, as well as minimising occupier exposure to rising
costs and development delays. With a scarcity of suitable
space in the Golden Triangle, these factors drive rental
premiums of c. 70% for fitted space compared to traditional
office space, according to research conducted by Savills.
In common with leading life sciences businesses, many of
our largest occupiers, including Fortescue Zero and Carl
Zeiss have ambitious net zero targets. Providing space which
enables them to meet these goals is key to our strategy. The
need to attract and retain talent is also particularly challenging
in this sector, making quality of workspace and amenities of
growing importance.
+90%
+65%
58%
11.6%
Premium for fully fitted
labs in Cambridge
Premium for fully fitted
labs in Oxford
Of listed companies globally
have a net zero target
Rental premium for BREEAM
certified space, per JLL
Our response
To address this demand, we are delivering fully fitted options
on both a bespoke and a speculative basis. At Cambourne,
we have completed the repurposing of 8,800 sq ft of offices
into laboratories and at OTP we completed the lease on our
first fully fitted unit this year. In both cases, the rents were
approximately double the office rent we could achieve.
Our response
To support our occupiers at OTP, we are retrofitting our
buildings with photovoltaic panels providing them with
renewable energy at lower cost (see page 37). Sustainability
is also central to our repurposing project at Cambourne,
which will remove gas and follows Fitwel principles to support
wellbeing for our occupiers.
Deep technology refers to the wide spectrum of technologies
driven by ground-breaking advancements in engineering and
science and includes sectors such as artificial intelligence,
clean technology, electronics hardware, renewable energy
and medical devices. These sectors are typically very capital
and R&D intensive, and require significant funding to bring
products to market.
University spin-outs are a key source of life sciences
innovation. Oxford and Cambridge are the leading academic
institutions for equity secured by spin-outs, accounting
for more than 50% of the 205 equity deals in 2023. The
Government is trying to make the UK a more attractive
spin-out destination through dedicated funding and by
encouraging UK universities to take a sub 10% equity stake.
5,841
5,157
3,658
£14.6bn
UK deeptech companies in
the Golden Triangle
Deeptech patents
filed in 2022
Equity deals secured by
spin-outs, 2014–2023
Equity investment secured
by spin-outs, 2014–2023
Our response
We target a broad spectrum of occupiers and consider
their likely requirements, particularly enhanced power,
when delivering new space. We have successfully attracted
businesses which leverage deep technology to our space,
for example in quantum computing (Oxford Ionics, Infleqtion),
health technology (Arcturis) and biotechnology (Beacon
Therapeutics, Native Antigen).
Our response
We have established an Innovation Quarter (“IQ”) at Oxford
Technology Park, comprising 12 units, ranging from 3,200
sq ft to 7,800 sq ft, just a five-minute drive from Begbroke
Science Park. Several Oxford spin-outs, including Oxford
Gene Technology have taken space there. Ironstone is also
an investor into Oxford Science Enterprises providing us with
access to a network of growing life sciences businesses.
11
Life Science REIT plc
Annual Report and Financial Statements 2024
11
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
MARKET OVERVIEW
CONTINUED
SUPPLY AND DEMAND FOCUSED ON THE GOLDEN TRIANGLE
‘Genius Loci’ – the need to co-locate around centres of academic excellence, focuses activity on the Golden Triangle of London,
Oxford and Cambridge.
Cambridge
Science Park
The Merrifield
Centre
Cambourne
Park Science &
Technology Campus
Granta Park
Cambridge
University of
Cambridge
The Oxford
Science Park
Begbroke
Science Park
Oxford
University
Oxford
Technology Park
7-11 Herbrand
Street
UCL
The Francis
Crick Institute
Rolling
Stock Yard
Cambridge
Oxford
London
Cambridge University is ranked in the
top five leading R&D centres, globally.
Successful life sciences clusters
have emerged around the university,
including Cambridge Science Park and
St John’s Innovation Park to the north
and in the south, Babraham Research
Campus, Cambridge Research Park and
Granta Park.
The region has a broad spread
of expertise, but in particular has
seen clustering by biotechnology,
pharmaceuticals, electronics and
software engineering firms.
£248m
Equity invested in university
spin-outs, 2023
The best established life sciences
cluster in the UK.
Oxford University and the medical
school is ranked no. 1 globally and has
a strong infrastructure for supporting
emerging life science businesses.
Oxford Science Enterprise, a
partnership with the university invests
in university spin-outs and Begbroke
Science Park, owned by the university is
a highly successful incubator, providing
offices, workshops and laboratories.
The wider Oxford area includes ARC
Oxford, ARC Harwell, Milton Park and
the Oxford Science Park.
£406m
Equity invested in university
spin-outs, 2023
The London life sciences market
is fast establishing itself around
the academic institutions of the
Knowledge Quarter
.
These include Imperial College London
(a top 10 University globally), University
College Hospital (“UCL”), and the
Francis Crick Institute.
In addition, a number of leading
international science and technology
businesses have major offices
here, including Google DeepMind,
MSD (Merck & Co, Inc), GSK and
Novo Nordisk.
£382m
Equity invested in university
spin-outs, 2023
AlexMastro – stock.adobe.com
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Annual Report and Financial Statements 2024
12
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Cambridge
Oxford
London
0
50
100
150
200
250
300
350
400
Under Offer
2024
2023
2022
2021
2023
2029F
0
20
40
60
80
100
Cambridge
Oxford
OCCUPATIONAL MARKET
DEVELOPMENT PIPELINE
2024 was challenging year for leasing across the Golden
Triangle, with take up of 460,000 sq ft, just over half the
amount of 2023. However, with an uptick in venture capital
and follow on financing, the outlook is more positive and at
the start of the year, 300,000 sq ft was under offer.
Oxford saw the most activity, accounting for 62% of life
sciences take up in the Golden Triangle. Notable transactions
included the letting of 60,000 sq ft to Novo Nordisk at Oxford
Science Park, consolidating their relocation from Crawley to
Oxford and underlining the importance of a Golden Triangle
location. Whilst overall requirements have fallen, demand for
smaller units has proved more consistent over the last year.
At the end of 2024, 4.3 million sq ft of laboratory space was
reported to be under construction, of which c. 13% was pre let
or under offer. A further 5.2 million sq ft of space has planning
permission with the potential to complete before the end of
2028, but with development finance remaining expensive, it is
unlikely that all of this will be delivered as planned.
Much of this space will also be targeting the higher end of the
market, with fully fitted rents of £78.5 per sq ft and £72.5 per
sq ft for Oxford and Cambridge respectively.
This compares
to rents in the region of £50 per sq ft at OTP and Cambourne
where affordability is a key attraction.
Cambridge accounted for 32% of take up, and whilst
availability has ticked up to 6.8%, demand for laboratory
space remains over two times supply.
London markets were subdued, with take up of 30,400 sq ft,
below the five year average, but over 100,000 sq ft was under
offer at the year end.
Golden Triangle take up (000s sq ft)
Fitted labs rent (£ per sq ft)
Source: Bidwells
Source: Cushman & Wakefield
Cambridge
Oxford
0.0
0.5
1.0
1.5
2.0
2.5
2027
2026
2025
London
Pre-let
Sq ft (000s)
Lab pipeline under construction chart
Source: Cushman & Wakefield
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Annual Report and Financial Statements 2024
13
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Meeting the needs of our
occupiers is fundamental to our
business. If our occupiers are able
to thrive, our places are more
successful, driving value for our
business and our stakeholders.
To maintain a supportive
shareholder base, we regularly
communicate our performance
and update on key events from
across our business.
Ironstone Asset Management
Limited implements our strategy
and is responsible for the day-
to-day operation of the business,
making it a critical stakeholder.
Stakeholder interests
• The suitability and location of our
assets for life science occupiers, and
their attractiveness as a workplace
• Rental levels, lease lengths and terms
• Our knowledge and understanding of
their businesses
• Our asset management plans
• Our financial strength
• Our sustainability strategy and
existing sustainability credentials of
our assets
Stakeholder interests
• Our ability to source accretive
investments and add value through
asset management to drive
total return
• Our financial and operational
performance
• The security of our future dividends
• Our approach to ESG
• The Board’s skills and experience
• The Investment Adviser’s skills,
experience and recruitment to
support our growth
Stakeholder interests
• The terms of their engagement
• Clarity of fees and prompt payment
• Clearly defined strategy
• Open communication and alignment
of values
• Ability to attract and retain an
expert team
• Ability to appoint expert third party
service providers
How we engage
• The Investment Adviser builds
relationships with current and
potential occupiers, and reports to
the Board on occupier issues
• The Investment Adviser’s asset
management team regularly visits our
sites and meets key decision makers
• The property managers engage with
occupiers at an operational level
• The Investment Adviser’s Head
of ESG and specialist consultants
regularly engage with occupiers
How we engage
• The Investment Adviser leads our
investor relations programme and
along with our corporate broker,
provides feedback to the Board
• We hold regular capital markets
events and asset tours
• We engage through other channels
including, the Group’s website, social
media, the Annual Report and the
Annual General Meeting
• If requested, we hold separate ESG
conversations
How we engage
• Open, regular and transparent
discussions with Ironstone, including
attendance at Board meetings
• Annual staff survey for the Ironstone
team and formal appraisal and
feedback process
See the MEC report on page 82 for
more information
Outcomes
• High retention rate of 99.6%
• Five new leases commenced
in 2024
• ESG engagement supporting
a move to greener, cheaper
energy
• Rolling out occupier amenities
including collaborative space,
exercise classes and an
app at OTP
Outcomes
• Annual dividend rebased to
2.0 pence at the start of 2024
from 4.0 pence
• Strategic Review launched
post year end to explore all
options available to maximise
value for shareholders;
dividend suspended pending
outcome of Strategic Review
• Improvement in MSCI rating
Outcomes
• Ironstone's continued
appointment approved by
the Board
• Ironstone share purchases
increased their holding to 1.6
million shares
• Post year end, the Board
agreed an amendment
to Ironstone's fee, better
aligning its incentives with
shareholders' and delivering
cost savings
OUR STAKEHOLDERS
OCCUPIERS
SHAREHOLDERS
INVESTMENT ADVISER
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Annual Report and Financial Statements 2024
14
As an externally managed
business, third parties provide key
services, including the Investment
Manager, risk and internal audit
adviser and company secretarial.
We look to build strong
relationships with lenders, who
provide the debt facilities needed
to support our business growth.
We are aware that we have a
broader responsibility to the
communities who live in and
around our assets or might be
affected by our activities.
Other key relationships include our
property manager (Savills), Group
Auditor (Deloitte LLP) and corporate
brokers (Panmure Liberum).
Stakeholder interests
• The terms of their engagement
• Clarity of fees and prompt payment
• Open and two-way communication
and information flow
Stakeholder interests
• The quality of the security we provide
for our loans
• Our ability to meet our interest
payments
• The strength and diversification of our
income streams
• Hedging of interest rates where
appropriate
• The suitability of our projects for
Green Finance
Stakeholder interests
• Impact on the local environment
• Noise and traffic
• Health and safety
• Opportunities for employment
How we engage
• Quarterly service calls with the
Investment Adviser
• Regular contact with the Board
including regular appearance at
Board meetings
• Clear supplier appointment process
including Supplier Code of Conduct
and checklist for third party suppliers
• The MEC oversees and reviews
service provider performance on the
Board’s behalf (see page 82)
How we engage
• The Investment Adviser is primarily
responsible for engaging with lenders
including regular update meetings
and providing quarterly compliance
monitoring
• The Investment Adviser keeps the
Board informed as necessary
How we engage
• The Board ensures that any key
decisions take into account the
impact on local communities and the
environment
• The Company meets all health
and safety requirements, local
environmental standards on waste
and other regulatory obligations
• We build strong relationships with
organisations and charities close to
our assets
Outcomes
• Higher quality service
providers appointed
• Service providers' advice,
needs and views routinely
taken into account
• Prompt payment
Outcomes
• SONIA reference rate on the
facilities capped 100% until
December 2025
• Low LTV of 30.4% at
31 December 2024
See note 16 and 17 on
pages 117 to 119 for more
information
Outcomes
• Attracting new occupiers
creates additional
employment opportunities
• £10,000 charitable donations
• Ironstone participated in
the Pathways to Property
internship programme
• Community engagement
including asset tours for
school children
OTHER THIRD PARTIES
LENDERS
LOCAL COMMUNITIES
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Annual Report and Financial Statements 2024
15
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SECTION 172(1) STATEMENT
Under section 172(1) (a)-(f) of the Companies Act 2006, the
Directors are required to take into account the matters set
out in the table below, and to promote the success of the
Company for the benefit of its members as a whole. In doing
so, the Directors must also consider the interests of key
stakeholders and the environment in their discussions and
decision making. Set out below are the matters the Board is
required to take into account under section 172(1).
Taking account of stakeholder views
Information on stakeholder engagement, including how the
Board is kept informed about stakeholder views, can be
found on pages 14 and 15. This engagement is an important
input into the Board’s decision making. The Directors keep
the methods for engaging with stakeholders under review, to
ensure they remain effective.
Key Board decisions
The Board’s key decisions during the year included
approving:
• the second interim dividend in respect of the prior year and
first interim dividend in respect of the current year, totalling
2.0 pence per share;
• additional SONIA hedging;
• annual budget for 2025; and
• five new governance policies.
Matter
Response
a. The likely consequence of any
decision in the long term.
All Board decisions involve careful consideration of the longer-term consequences
and their implications for stakeholders. For example, during the year, the Board made
the decision to re-base the dividend, providing them with the financial flexibility to
progress the laboratory repurposing project at Cambourne Park, which will have a
positive impact on the wider park. Post year end, the Board is undertaking a Strategic
Review and the dividend has been suspended pending its outcome.
b. The interests of the Company’s
employees.
As an externally managed company, we do not have any employees, so this matter
is not applicable. The Investment Adviser conducts an annual employee survey and
delivers a comprehensive training and development programme.
c. The need to foster the Company’s
business relationships with
suppliers, customers and others.
The Company's relationships with its suppliers, occupiers and others is managed by
the Investment Adviser who keep the Board regularly updated.
The Board oversees the Company's relationship with all its principal service providers
through the Management Engagement Committee. As a result of its oversight and
review, the Committee recommended the continuing appointment of Ironstone and
the other key service providers.
d. The impact of the Company’s
operations on the community
and environment.
The Board takes actively monitors the progress the Company makes against
on its Sustainability Strategy, including the Pathway to Net Zero set last year.
The Sustainability Committee provides a dedicated forum for overseeing and
directing our ESG activities which this year have included progressing plans to
add photovoltaic panels to the roofs at OTP and ensuring our development and
repurposing activities meet the highest environmental standards.
e. The desirability of the Company’s
operations on the community
and environment.
During the year, the Board approved five new policies and reviewed and updated
two existing policies, ensuring the Company maintains high governance standards.
These policies can be found on the Company’s website lifesciencereit.co.uk.
f. The need to act fairly between
members of the Company.
The Company Board is fully independent and no shareholder or group of
shareholders has direct influence over the Board’s decisions. At 31 December 2024
the Investment Adviser and its principals owned 5.2 million shares in the Company
valued at c. £2.0 million (5.2 million shares valued at £2.2 million as at the date of this
report), aligning their interests with those of shareholders.
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Life Science REIT plc
Annual Report and Financial Statements 2024
16
1
CREATING
LIFE SCIENCE
SPACE
2
FURTHER
LEASING
PROGRESS
3
FINANCING
Our strategic priorities
We create space for life sciences
businesses through development of
new space or repurposing of existing
office space.
• 57,000 sq ft of new developments
completed at OTP in 2024
• Further 183,000 sq ft of development
space due to complete at OTP in
Q2 2025
• 8,800 sq ft repurposed at Cambourne
Park into four fully fitted laboratories
• Further potential repurposing options
at Cambourne Park
Despite a challenging leasing market,
particularly in the first half of 2024,
our leasing activity has increased
occupancy to 84.4% from 79.0%.
Many of the transactions underway in
2024 completed early in 2025:
• 94,700 sq ft let at OTP in 2024 with a
further 5,600 sq ft post year end
• 17,200 sq ft let at Cambourne Park,
post year end
• 5,100 sq ft let at Rolling Stock Yard,
post year end
Maintaining a sound financial position
supports our ability to deliver on
our strategy.
• At 30.4% our LTV is at the lower end
of the range we consider acceptable,
of 30.0%-40.0%
• All debt fully hedged against SONIA
• Dividend rebased to provide the
financial flexibility to progress strategy
• Post year end, dividends have been
suspended pending the outcome of
the Strategic Review
OBJECTIVES AND STRATEGY
Our activities over the year have been focused on our broader purpose of creating space for science. We
have three key strategic priorities we have progressed, but more broadly, our activities cover four areas:
• Investment (read more on pages 24 to 28),
• Asset Management (read more on pages 29 to 30),
• Financing (read more on pages 30 to 32)
• and Sustainability (read more on pages 34 to 49).
17
Life Science REIT plc
Annual Report and Financial Statements 2024
17
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
OXFORD TECHNOLOGY PARK
Overview
At OTP we are creating an ecosystem of science
and technology businesses by providing a range
of modern, affordable space.
This means we can attract small as well as larger
businesses and accommodate them through their
life cycle. Our formats include:
The Innovation Quarter
, 3,200 to 7,800 sq ft, in
single or multiple units: provides smaller, more
flexible space, aimed at emerging businesses.
Given our proximity to Begbroke Science Park,
a number of our occupiers have graduated from
there to the IQ. The Nexus cafe and co-working
space is planned at the IQ.
Tech Boxes
, 37,000 to 57,000 sq ft: targeting more
mature businesses, with a typically more bespoke
fit out.
Innovox
: suites from 4,000 sq ft with the flexibility
to cater to office, laboratory and R&D use.
Key statistics
CASE STUDY
Valuation
£146.4m
2023: £139.5m
Number of occupiers
9
2023: 8
% completed by area
46.8%
2023: 34.8%
Estimated completion
2026
2023: H1 2025
Occupancy of
completed buildings
70.8%
2023: 50.0%
Target contracted rent
£10.8m
2023: £11.0m
Costs to complete
£32.9m
2023: £46.2m
Total area on completion
508,400
sq ft
2023: 492,400 sq ft
Creating a life sciences destination
at Oxford Technology Park
18
Life Science REIT plc
Annual Report and Financial Statements 2024
18
A LIFE SCIENCES
COMMUNITY
Attracting industry leaders
OTP is home to global science and technology
leaders, including LGC, a biomed business
and one of the first producers of the Covid-19
antigen in the UK, and Fortescue Zero a
leading climate technology business providing
green energy solutions to eliminate the use of
fossil fuels.
A cluster of quantum technology businesses
including Oxford Ionics, Infleqtion and Quantum
Solutions is emerging at the park (read more
about our occupiers on page 25).
A growing community
Around 450 people are employed across the
site, working in complementary businesses. We
create opportunities for them to connect inside
and outside of work via the OTP app, and
by hosting industry events, including Oxford
Bioscience Network, which have helped to
establish OTP as a life science destination.
Leading on ESG
This year our occupiers cooperated to deliver
a STEM tour for local school children and our
project to add photovoltaic panels to the roofs
will deliver cleaner and greener electricity for
our occupiers. Read more on pages 34 to 39.
https://oxfordtechnologypark.com/
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
19
Life Science REIT plc
Annual Report and Financial Statements 2024
19
STRATEGIC REPORT
Occupancy (%)
Like-for-like rental
income movement (%)
Like-for-like valuation
movement (%)
Like-for-like energy
intensity (%)
84.4%
5.7%
(4.0)%
(15)%
2022
2023
2024
84.4
79.0
82.0
2022
2023
2024
5.7
2.4
1.2
2022
2023
2024
(4.0)
(7.1)
(1.8)
2021
2022
2023
2024
(15.0)
15.0
N/A
Description
Total open market rental
value of the units leased
divided by total open market
rental value, excluding
development property
and land, and equivalent
to one minus the EPRA
vacancy rate.
Description
The change in contracted
rent of properties owned
throughout the period under
review, as a percentage of
the contracted rent at the
start of the period, excluding
acquisitions, disposals,
development property
and land.
Description
The change in the valuation
of properties owned
throughout the period under
review, expressed as a
percentage of the valuation
at the start of the period, and
net of capital expenditure.
Description
The like-for-like change
in landlord procured and
generated energy intensity,
measured in MWh/m
2
.
Relevance to our strategy
Shows our ability to retain
occupiers at renewal and to
let vacant space, balanced
with the need for vacancy to
carry out asset management
initiatives.
Relevance to our strategy
Shows our ability to identify
and acquire attractive
properties and grow rents
over time.
Relevance to our strategy
A high-quality portfolio and
an active asset management
programme will help improve
asset values and provide
future resilience.
Relevance to our strategy
Our decarbonisation targets
were set in 2023 with the
Group committing to being
net zero in scope 1 & 2 by
2040 and in scope 3 by
2045. This measure helps
monitor progress.
Performance
The change in occupancy
reflects the net impact of
new leases in the year and
the practical completion of
new space at OTP. On a like-
for-like basis, occupancy has
increased 4.6 percentage
points to 83.6% at the
year end.
Performance
At 31 December 2024, like-
for-like rental income had
increased by 5.7% compared
to the prior year. The letting
to Infleqtion at OTP slightly
offset by ProCam downsizing
at Cambourne drove this
increase.
Performance
The portfolio valuation
decreased by 4.0% on a
like-for-like basis driven
primarily by an outward
yield shift of 30 basis points
during 2024, with laboratory
space proving more resilient
at a 3.7% decline (see page
28). The second half of 2024
stabilised with only a 0.3%
like-for-like decline.
Performance
The significant improvement
in energy intensity was
driven by an improvement
in the operational efficiency
at Herbrand Street, which
accounted for 87% of the
total LFL reduction. This
follows close engagement
with the occupier.
Link to strategic priorities
Link to strategic priorities
Link to strategic priorities
Link to strategic priorities
1
2
1
2
1
2
1
KEY PERFORMANCE INDICATORS
OPERATIONAL KPIs
20
Life Science REIT plc
Annual Report and Financial Statements 2024
20
Total cost ratio (%)
EPRA NTA
per share (p)
Loan to value
ratio (%)
Total accounting
return (%)
40.8%
74.4p
30.4%
(4.4)%
2022
2023
2024
40.8
44.2
58.9
2022
2023
2024
74.4
79.9
90.0
2022
2023
2024
30.4
24.7
16.8
2022
2023
2024
(4.4)
(6.8)
(9.1)
Description
EPRA cost ratio including
direct vacancy costs but
excluding one-off costs. The
EPRA cost ratio is the sum
of property expenses and
administration expenses, as
a percentage of gross rental
income.
Description
This net asset value measure
includes adjustments for the
fair values of certain financial
derivatives and assumes
entities buy and sell assets,
thereby crystallising certain
levels of deferred tax liability.
Description
Gross debt less cash,
short-term deposits, divided
by the aggregate value of
properties and investments.
Description
The movement in EPRA
NTA over a period plus
dividends paid in the period,
expressed as a percentage
of the EPRA NTA at the start
of the period.
Relevance to our strategy
Shows our ability to
effectively manage our cost
base, which in turn supports
dividend payments and
shareholder returns.
Relevance to our strategy
Reflects our ability to add
value by acquiring well and
through asset management,
which in turn increases our
resilience during market
downturns.
Relevance to our strategy
Shows our ability to balance
the additional portfolio
diversification and returns
that come from using debt,
with the need to manage risk
through prudent financing.
Relevance to our strategy
Shows our ability to construct
a portfolio that delivers a
secure and growing return to
shareholders. Our target is in
excess of 10.0% per annum,
through a combination
of dividends and growth
in NAV.
Performance
The increase in net rental
income was the key driver
for the reduction in the total
cost ratio of 3.4%. This will
continue to reduce as we
complete and let new space
at OTP and repurpose space
at our other assets to labs.
Performance
The decline was primarily the
result of dividends paid and
the loss on revaluation of the
portfolio, partially offset by
positive earnings in the year.
Performance
The LTV remains at a
prudent level of 30.4%, at
the lower of our 30%-40%
target range. The increase
in the year was driven by
the ongoing development
at OTP and other asset
management initiatives
including repurposing space
to labs at Cambourne.
Performance
We paid dividends of
2.0 pence per share and
delivered adjusted earnings
of £5.9 million (2023: £6.7
million). Despite this, a
decline in NAV driven by
revaluation losses in both
the current year and prior
year has resulted in negative
total accounting returns.
There is however a 2.4%
improvement year on year.
Link to strategic priorities
Link to strategic priorities
Link to strategic priorities
Link to strategic priorities
1
2
1
2
3
1
2
3
1
2
3
FINANCIAL KPIs
Key to strategic priorities
1
2
3
Delivering Life
Science Space
Progress Leasing
Maintain our sound
financing position
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Life Science REIT plc
Annual Report and Financial Statements 2024
21
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
INVESTMENT ADVISER’S REPORT
STEPHEN BARROW
SIMON HOPE
SIMON FARNSWORTH
Chair (Non-Executive Director)
Vice-Chair (Non-Executive Director)
Managing Director
Stephen has over 30 years’ experience
setting up and managing funds. Starting
as an investment analyst at Morgan
Grenfell, Stephen managed the £5
billion UK Equity Exempt Fund in the
1990s combined with the role of Head
of Global Research. Stephen then
set up the successful Global Equity
Select strategy at Morgan Grenfell
in 2002. Leaving Morgan Grenfell
in 2005, Stephen built a successful
team at IronBridge International and,
as founding CIO, ultimately managed
over $7 billion for a range of UK and
overseas clients. Since 2012, Stephen
has been investing in a range of
property vehicles alongside colleague
Simon Hope, notably Warehouse REIT.
Stephen has an MA in Economic History
from the University of St Andrews.
Simon has over 35 years’ experience
in the real estate sector, gained during
his career at Savills, one of the world’s
leading property agents. From 2004
to 2021 he was Global Head of Capital
Markets specialising in portfolio
investment construction, acquisitions
and disposals. He was a founding
Director of the Charities Property Fund
which he chaired between 2002 to
2007. In addition, he chaired Savills’
proprietary trading and investment arm,
Grosvenor Hill Ventures until 2007.
Simon was also the executive sponsor
of Savills’ Life Science practice which
incorporates a multi-disciplinary team
of over 18 professionals. In 2013 he
became Chairman of Tilstone Partners
Limited, the investment adviser to
Warehouse REIT plc, a FTSE listed real
estate investment trust. He also sits
on the Warehouse REIT plc Board as
a Non-Executive Director. He studied
Estate Management at the Royal
Agricultural College, Cirencester and is
a RICS Fellow. He also holds an MBA
from Reading University.
Simon is an experienced fund manager
and chartered surveyor with over 35
years' experience in the UK real estate
market. Previously he was a Managing
Director of the UK Funds business of
CBRE Global Investors and a member
of their UK Executive Committee and
Investment Committee. Prior to that he
was a Business Development Director
at GE Capital Real Estate. Latterly,
Simon was a founding Director of
Westmount Real Estate, a boutique real
estate investment advisory and asset
management business advising on
acquisitions, asset management and
financing across all UK sectors. He has
considerable experience in sourcing,
managing and financing across many
real estate asset classes along with
developments, forward fundings and
corporate transactions. He has a BSc in
Land Management from the University
of Reading.
Ironstone Asset Management Limited provide day-to-day investment advisory and asset
management services to the Group.
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Life Science REIT plc
Annual Report and Financial Statements 2024
22
IAN HARRIS
DAVID LEWIS
Director of Asset Management
Finance Director
Ian is a qualified chartered surveyor
with over 35 years’ experience in
the UK real estate market. His asset
management career began at Imry
Holdings where he was responsible
for the £200 million Halogic Portfolio
in joint venture with GE Real Estate.
He moved on to become Director of
Frame Investments Limited, a privately
owned property investment and asset
management company specialising in
multi-let value-add portfolios in the UK
with financial partners including PRICOA
and Portfolio Holdings Limited. He
was then appointed Director of Asset
Management for the Strategic Partners
series of UK value-add funds at CBRE
Global Investors with assets under
management of £1 billion. Subsequently,
he went on to co-found Westmount
Real Estate Ltd, a boutique investment
advisory and asset management
business acting for a wide range of
domestic and international investors.
Ian has a BSc in Land Management
from the University of Reading and is
a Member of the Royal Institution of
Chartered Surveyors.
David has over 30 years’ commercial
and financial global experience, most
recently with Round Hill Capital, a
real estate private equity firm. He
has held senior executive positions
with Campus Living Villages, Balfour
Beatty Investments and Lend Lease
Infrastructure and was the European
CFO of Babcock & Brown, the
investment manager who established
the now FTSE 250 listed company
International Public Partnerships.
Previously David was a Technical
Director with Ernst & Young in Australia
and is a Fellow of the Institute of
Chartered Accountants, England &
Wales. David has a BSc in Fuel and
Energy and Management Studies from
the University of Leeds.
The Ironstone team
The wider Ironstone team as at
31 December 2024:
Gender
Male 55%
Female 45%
Ethnicity
White British 82%
Other 18%
Age profile
20–29 10%
30–39 27%
40–49 27%
50–59 27%
60–69 9%
See more at lifesciencereit.co.uk
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Life Science REIT plc
Annual Report and Financial Statements 2024
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
INVESTMENT ADVISER’S REPORT
CONTINUED
Implementing the investment strategy
Leasing performance
In line with the wider market, leasing activity was slower in
the first half of the year, with uncertainty ahead of the general
election causing occupiers to postpone decisions where
possible. Activity began to pick up in the second half and
whilst confidence has been impacted by the budget, demand
has been stable for the remainder of the period, albeit deals
are taking longer to conclude.
During the year to 31 December 2024, four new leases
commenced, comprising:
• Two leases covering 57,016 sq ft to Fortescue Zero Limited
(“Fortescue”) at Building 5 at Oxford Technology Park
(“OTP”) which will generate £1.1 million of contracted rent
• A 7,497 sq ft lease to Infleqtion in the IQ at OTP for
£0.3 million
• A 30,156 sq ft lease to Oxford Ionics Limited in unit 6A of
Building 6 at OTP for £0.6 million; this unit has completed
but the building is categorised as a development until
full completion
In addition, a new lease was agreed with Pro Cam UK
Limited (“Pro Cam”), who downsized from its 7,400 sq ft unit
in Cambourne Building 2020 to a 4,300 sq ft unit in Building
2030 at an increased rent of £25.0 per sq ft (up 8.2% from
their previous rent of £23.1 per sq ft). The new lease has a
five year term with an increase in rent to £30.0 per sq ft in
year four.
The contracted rent roll for the investment assets at the year
end therefore increased by £1.3 million or 9.3% to £15.3 million
(31 December 2023: £14.0 million) with a further £0.6 million let
on development assets.
Since the year end, the following leases have completed:
• CFDX Limited (“CFDX”) have taken 5,100 sq ft of fully fitted
space at Rolling Stock Yard (“RSY”) for £110.0 per sq ft
on an eight year lease with a four year break. This lease
completed in February 2025.
• 42 Technology Limited (“42T”) signed a 10 year lease,
also in February 2025, for 17,200 sq ft at Building 1020 in
Cambourne paying a rent of £25.5 per sq ft.
In addition, an agreement for lease with Oxford Expression
Technologies Limited ("OET") for 5,600 sq ft of fully fitted
space, was signed at the IQ at OTP. The ten year lease, at
£46.5 per sq ft sets a new record for the park.
Post year end one regear and one lease extension have also
completed, extending the Group average lease length:
• Carl Zeiss at Cambourne agreed a new lease on expiry of
their current lease in 2028, adding a further five years to
the term with the rent subject to review in 2028.
Post year end leasing activity, including breaks exercised at
Rolling Stock Yard, one lease expiry and reversion captured
brings total current rent to £16.5 million.
In line with the wider market,
leasing activity was slower in
the first half.
Activity picked
up in the second half but deals
have taken longer to close.
Simon Farnsworth | Managing Director
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Annual Report and Financial Statements 2024
24
Investment
property or
development
property
and land
Total portfolio
31 December 2024
£m
Contracted rent
Investment
15.3
Contracted rent
Development
0.6
Contracted rent – total portfolio
15.9
Inbuilt reversion in current leases
Investment
3.6
Letting vacant space at Oxford Technology Park, Cambourne and Rolling Stock Yard
Investment
3.5
Letting developments currently on-site
(Unit 6B and Buildings 7 to 9 at OTP)
Development
3.1
Letting future developments
(Buildings 10 and 11 at OTP)
Development
1.8
Target estimated rental value
27.9
Potential for strong income growth
The target total portfolio ERV was £27.9 million at
31 December 2024 (31 December 2023: £26.2 million), split
£22.4 million investment assets ERV (31 December 2023:
£19.6 million) and £5.5 million development assets
(31 December 2023: £6.6 million). The investment assets ERV
is £7.1 million above the contracted rent of £15.3 million, with
£3.5 million of the difference resulting from vacant space
at the year end and £3.6 million reflecting the reversionary
potential of the portfolio. The let area in the investment assets
portfolio has a reversionary percentage of 23.2% and like-for-
like ERV growth during 2024 was 8.6%.
At the time of the interim results in September 2024, the
Investment Adviser estimated that a further £3.2 million of
contracted rent would be secured over the six months to
March 2025 and a total of £8.1 million to September 2025.
As at the date of this report, an additional £1.5 million of
contracted rent has been added to the rent roll, £1.1 million is
currently in solicitors' hands offset by a £0.7 million reduction
due to an occupier exercising their break and one lease
expiry post year end.
The Group’s occupiers
As we successfully implement the asset management strategy,
the proportion of the Group’s assets leased to life science
occupiers continues to grow, with 54.3% of the Group’s
contracted rent attributed to life science occupiers as at
31 December 2024 (31 December 2023: 53.5%).
During the year two new life science occupiers took
occupation at our assets amounting to 37,700 sq ft and
£0.9 million of additional contracted rent. These new
occupiers included:
Oxford Ionics
, which is a high-performance quantum
computing company which has taken space in Building 6
at OTP.
Infleqtion
, another quantum technology company that uses
atomic physics to build quantum computers and integrate
them across networks. Infleqtion has taken space in the IQ
at OTP.
In addition to the above, the three largest life science
occupiers by contracted rent at the year end were:
Beacon Therapeutics
, a clinical-stage company owned by
Novartis, developing gene therapies to treat diseases of the
eye that cause vision loss and blindness who occupy three
floors in Rolling Stock Yard;
Fortescue
, a technology and engineering services
provider delivering innovative solutions to a range of
sectors including green energy, medical engineering and
automotive, based at OTP; and
Carl Zeiss
, a leading technology enterprise, operating in the
optics and optoelectronics industries; the UK headquarters
for its life science businesses of microscopy, medical
technology and consumer optics are in Building 1030 at
Cambourne.
Under the Group’s investment policy, no occupier should
account for more than 30.0% of the higher of gross
contracted rents or the valuer’s ERV of the portfolio, including
developments under forward-funding agreements. We remain
within this limit, with the largest occupier accounting for 26.2%
of gross contracted rents and 22.9% of the ERV at the period
end. As we continue to develop and lease OTP, the rent roll
will further diversify and reduce the proportion of total rents
coming from individual occupiers.
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Annual Report and Financial Statements 2024
25
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
INVESTMENT ADVISER’S REPORT
CONTINUED
Occupier
Asset
1
Occupier
type
2
Annual
contracted
rent
(£m)
% of total
Thought Machine Group Ltd
HS
Other
4.0
26.2%
Gyroscope Therapeutics Ltd
RSY
LS
1.5
10.0%
Fortescue Zero Ltd
OTP
LS
1.1
6.9%
Carl Zeiss Ltd
CP
LS
1.0
6.2%
Beacon Therapeutics Ltd
RSY
LS
0.8
5.3%
Xero (UK) Ltd
RSY
Other
0.7
4.7%
Cambridge Cambourne Centre Ltd (Regus)
CP
Other
0.7
4.5%
MTK Wireless Ltd
CP
LS
0.7
4.4%
Premier Inn Ltd
OTP
Other
0.7
4.3%
Native Antigen Company Ltd (LGC)
OTP
LS
0.5
3.5%
Subtotal – top ten
11.7
76.0%
Remaining
3.6
24.0%
Total
3
15.3
100.0%
1
HS – Herbrand Street; RSY – Rolling Stock Yard; CP – Cambourne Park Science and Technology Campus; OTP – Oxford Technology Park.
2
LS - Life Science occupier; Other – hotel and offices.
3
Investment portfolio only. In addition, £0.6 million of contracted rent has been agreed within development assets.
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Annual Report and Financial Statements 2024
26
During the period there were no changes to the Group’s portfolio, which comprised the following assets at 31 December 2024:
Valuation
WAULT
Contracted rent
Asset
£m
£ per
sq ft
Area
sq ft
Occupancy
%
to break
years
to expiry
years
£m p.a.
£ PSF
NIY
%
NEY
%
NRY
%
OTP – Investments
89.9
378 237,900
70.8
7.2
10.4
3.4
19.3
3.6
5.4
5.5
Rolling Stock Yard
83.1
1,542
53,900
90.0
1.4
5.6
3.5
72.3
4.0
5.3
6.3
Cambourne
80.1
348 230,400
76.5
1.3
3.9
4.1
22.3
4.8
6.2
6.9
7-11
Herbrand Street
68.2
994
68,600
100.0
1.8
4.0
58.5
5.5
5.4
7.0
The Merrifield
Centre
7.4
589
12,600
100.0
2.0
7.0
0.3
23.1
3.7
5.4
6.0
Investment assets
328.7
545 603,400
84.4
3.1
5.3
15.3
31.3
4.4
5.6
6.4
OTP –
Developments
1
56.5
209 270,500
1
Development
assets
56.5
209 270,500
Total
385.2
441 873,900
1
Full build-out area.
OTP development assets comprise buildings under construction and the remaining development land. The 270,500 sq ft shown
in the table above is the expected area of these assets once practically complete. At the year end, this related to the remaining
development land at OTP plus Buildings 6 to 9 which are due to practically complete during H225. Unit 6A in Building 6 has
reached practical completion but is categorised as a development pending full completion of the building.
Occupancy at the year end increased by 5.4 percentage points to 84.4% (31 December 2023: 79.0%). This increase was driven
primarily by lettings in the year at OTP. On a like-for-like basis, occupancy increased by 4.6 percentage points to 83.6%.
The WAULT to expiry reduced by 0.5 years to 5.3 years (31 December 2023: 5.8 years), reflecting the natural reduction in
remaining lease lengths over time and the net effect of new leases in the year.
Asset location by valuation
Life Science exposure
by contracted rent
1
Life Science occupier area
by floor type
2
London: 39.3%
Oxford: 38.0%
Cambridge: 22.7%
Life science: 56.0%
Non-life science: 44.0%
Office: 53.9%
Labs: 46.1%
1
Includes £0.6 million of contracted rent within development assets; life science occupiers make up 54.3% of investment assets.
2
51.6% of portfolio area (including vacant space) currently let to life science occupiers.
The portfolio
Well-located assets offering laboratory and office space
The portfolio is in strong locations within the Golden Triangle and primarily comprises office and laboratory space. See below for
the split of assets by location and type as at 31 December 2024.
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Annual Report and Financial Statements 2024
27
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
INVESTMENT ADVISER’S REPORT
CONTINUED
Valuation performance
The portfolio was independently valued by CBRE as at 31 December 2024, in accordance with the internationally accepted RICS
Valuation – Professional Standards (the “Red Book”).
The table below analyses the movement in valuation during the year:
Investment
assets
£m
Development
assets
£m
Total
£m
Portfolio valuation at 31 December 2023
314.9
67.4
382.3
Capital expenditure
5.3
13.0
18.3
Finance costs capitalised
0.1
2.0
2.1
Movement in rent incentives
(0.3)
0.2
(0.1)
Fair value losses on investment properties
(12.5)
(4.9)
(17.4)
Transfer from development to investment
21.2
(21.2)
Portfolio valuation at 31 December 2024
328.7
56.5
385.2
The portfolio valuation at the year end increased on an absolute basis by £2.9 million to £385.2 million. The value of the
investment portfolio increased, driven primarily by the transfers of development assets at OTP (Building 5), which reached
practical completion during the year, partially offset by outwards yield shift.
This transfer resulted in a corresponding reduction
in the absolute value of the development assets. Capital expenditure of £18.3 million primarily related to the development at
OTP and repurposing of space to labs at Cambourne. As a result of this expenditure £2.1 million of finance costs have been
capitalised. Combined, all of these factors resulted in a fair value loss of £17.4 million in 2024.
The table below analyses the key drivers of the valuation movement during 2024 compared to 2023 in further detail:
2024
2023
FY 2024
LFL
%
H124
LFL
%
H224
LFL
%
Investment assets
Valuation
£m
328.7
314.9
(4.0)%
(3.8)%
(0.3)%
ERV
£m
22.4
19.6
8.6%
8.2%
0.4%
NEY
%
5.6
5.3
30bps
33bps
3bps
Development assets
Valuation
£m
56.5
67.4
n/a
n/a
n/a
Total portfolio valuation
£m
385.2
382.3
(4.0)%
(3.8)%
(0.3)%
£12.6 million of the £17.4 million fair value loss in the period is attributable to the like-for-like portfolio, resulting in a 4.0% like-for-
like reduction in value for the year, but weighted towards the first half, when the like-for-like reduction was 3.8% compared to
0.3% in the second half. This performance reflects a stabilisation in yields, which expanded by 33bps in the first half, but just 3
bps in the second half. Yield expansion was partially offset by strong ERV growth of 8.6% for the year. These dynamics continue
to be reflective of the broader macro environment, with interest rates remaining higher than expected over the year, resulting in
further yield expansion, notably on offices.
Space defined as laboratories for valuation purposes continued to be more resilient, posting a like-for-like valuation decline of
3.7%, driven by a 27 basis points outward NEY shift which was partially offset by ERV growth of 13.7%. At the year end, this space
represented 39.8% of the like-for-like portfolio. Space defined as offices saw a valuation fall of 5.3% on a like-for-like basis and
reflected an outward NEY shift of 40 basis points.
On the remaining assets, the £4.8 million fair value loss reflected an inward NEY shift of eight basis points following Building 5’s
completion and letting to Fortescue Zero in the year, offset by development spend in the year. Based upon 31 December 2024
valuations, there is up to a 70 basis points yield variance in the vacant development space versus completed and let space. This
represents significant valuation upside to come once the vacant space is let, assuming constant yields.
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Life Science REIT plc
Annual Report and Financial Statements 2024
28
Implementing the asset management strategy
Cambourne Park Science and Technology Campus
(“Cambourne”)
The Group acquired Cambourne in 2021, with the intention
of repositioning it as a dedicated life science and technology
hub. A key step in this evolution is the repurposing of vacant
ground floor office space in Building 2020 into four fully
fitted laboratories of around 2,200 sq ft each. The project
reached practical completion in the year and the space is now
targeting rents of £50.0 per sq ft which compares to c. £25.0
per sq ft for typical office space on the park. This smaller, fully
fitted option is particularly attractive to early-stage life science
occupiers because it enables them to spread the cost of
fitting out space over time through higher rents and avoids
an upfront capital cost early in their life cycle. However, the
units can also be combined to appeal to larger companies.
The project improves the environmental credentials of the
buildings, including transitioning from gas to electric power
and is helping to drive an increase in the rental tone across
the park.
Post year end, we announced the letting of 17,200 sq ft
of vacant office space at Building 1020 to 42T, a product
development and innovation consultancy which delivers
specialist technical solutions in healthcare & life sciences,
industrial and consumer sectors. We also announced a five
year lease extension to Carl Zeiss, our largest occupier on
the park with 43,300 sq ft in Building 1030. Carl Zeiss has
recommitted until 2033 at the same rent with a rent review
in 2028 and will be carrying out a number of sustainability
improvements to the building, including replacing gas boilers
and installing photovoltaic panels. This programme reflects its
ambitious net zero commitments.
Occupancy at Cambourne was 76.5% at year end
(31 December 2023: 77.5%) and increased to 83.3% following
post year end leasing transactions.
Oxford Technology Park
OTP is 20-acre science and technology park strategically
located in the Golden Triangle, close to Oxford University
and adjacent to Begbroke Science Park and Oxford Airport.
On acquisition in 2022, three of the planned buildings were
complete. Since then, 126,700 sq ft has been delivered; the
Innovation Quarter (“IQ”) completed in 2023 and Building 5
reached practical completion at the start of 2024. Unit 6A
in Building 6 has also reached practical completion but is
categorised as a development pending full completion of the
whole building. Unit 6B and Buildings 7 to 9 were expected
to complete in FY 2024 but connection to the local power
grid was outstanding and these buildings are now due to
complete in Q2 2025.
The current rent roll of OTP is £4.0 million, including
development lettings. OTP has substantial scope to grow
the Group’s rental income in the near term. The ERV of unlet
space in the completed buildings and those due to complete
imminently (Buildings 6 to 9) is £4.6 million. Letting this space
would therefore increase the rent roll at OTP to £8.6 million.
The existing leases at OTP also have inbuilt reversion of
£0.4 million.
Based on current designs, Buildings 10 and 11 have an ERV of
a further £1.8 million. We have maintained a flexible approach
with respect to Buildings 10 and 11 and are working with
the developer to agree a final design and programme. The
existing planning consent is for two buildings of c. 43,500 sq
ft each, but the plots would also suit several smaller buildings
or a single larger building.
As noted above, we signed two new leases to Fortescue
Zero in February 2024, at an annual rent of £1.1 million or £20.1
per sq ft. The term is ten years, with a break clause on half
the space in year five and a rent review at the end of the fifth
year. The occupier has fitted out the building as offices and
R&D space.
Occupancy at OTP investment assets was 70.8% at year
end (31 December 2023: 50.0%) with a further £0.6 million
let in development assets. Since the year end we signed an
agreement for lease with OET who are taking 5,600 sq ft of
fully fitted space at £46.5 per sq ft.
Following strong demand for more amenities on site from
existing and potential occupiers, the Nexus cafe plus
additional meeting space is due to complete at the end of
Q2 2025.
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Annual Report and Financial Statements 2024
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
INVESTMENT ADVISER’S REPORT
CONTINUED
Rolling Stock Yard
RSY, located in London’s Knowledge Quarter, offers office and
fully fitted laboratory space. Occupancy was 90.0% at the year
end (31 December 2023: 87.3%) following increases in ERV
during the year. The letting of the remaining vacant space on
the first floor has completed since the year end. The 5,100
sq ft space was let to CFDX for £110.0 per sq ft adding £0.6
million to contracted rent, in line with ERV. The lease is for
eight years with an occupier’s break at year four. For more on
this new life science occupier see page 24. This letting would
have taken the occupancy of the building to 100.0%, however
Xero (UK) Limited, who currently occupies the seventh and
eighth floors has recently exercised its break and vacated the
scheme on 1 April 2025. We are in the process of marketing
this space to new occupiers.
7-11 Herbrand Street
Herbrand Street is an iconic Grade II listed building, in
London’s Knowledge Quarter, fully let to Thought Machine.
The lease runs until Q4 2026 and we are actively engaged
with the occupier ahead of this expiry to discuss options.
The Merrifield Centre
The Merrifield Centre is a fully let building just outside of
Cambridge. Astellas Engineered Small Molecules UK Limited,
the occupier, has shown its commitment to the asset by
investing significant amounts in the building and we have a
well-established routine of occupier engagement. The lease
expires in December 2031, with a break in December 2026.
Resourcing for the Investment Adviser to
support the Group’s growth
As Investment Adviser, it is vital that we have the resources,
knowledge and skills to implement the Group’s strategy. We
have strengthened our leasing and asset management team
during the year with two new appointments, helping to drive
leasing activity. See leasing section above for further details.
Financial review
Financial performance
The Group’s financial results are summarised below.
2024
£m
2023
£m
Gross property income
16.3
15.5
Property operating expenses
(1.9)
(1.7)
Net rental income
14.4
13.8
Adjusted administration costs
(4.8)
(5.2)
Adjusted operating profit
9.6
8.6
Adjusted net finance costs
(3.7)
(2.0)
Tax
0.1
Adjusted earnings
5.9
6.7
Exceptional finance costs
(1.5)
Fair value losses on derivatives
and deferred premium
(2.5)
(3.8)
Fair value losses on investment
properties
(17.4)
(22.8)
Loss on disposal of investment
properties
(0.3)
IFRS loss after tax
(14.0)
(21.7)
Total gross property income in the year increased 5.2% to
£16.3 million (2023: £15.5 million), reflecting the new leases
that commenced in the year and a full 12 months of income
from leases agreed in 2023, partially offset by rent lost on
Lumen House, which the Group sold in November 2023, and
the expiry of a rental guarantee at Rolling Stock Yard during
the first half of 2023. The quality of the Group’s occupier base
is reflected in rent collection of 99.8% in respect of the year.
Property operating expenses are primarily void costs on
vacant units and totalled £1.9 million (2023: £1.7 million),
resulting in net rental income of £14.4 million (2023: £13.8
million). On a like-for-like basis net rental income decreased
by 3.8% driven primarily by the write back of historical bad
debts at Cambourne that had been written off in prior years
and were subsequently collected in 2023 (note 4).
Administration costs of £4.8 million (2023: £5.2 million)
include the Investment Adviser’s fee of £3.0 million (2023:
£3.4 million), as well as other costs of £1.8 million (2023: £1.8
million), including audit and valuation fees, the Directors’ fees
and other corporate expenses.
The above results in a total cost ratio for the year (including
direct vacancy costs) of 40.8% (2023: 44.2%). Higher rental
income was the key contributor to the reduction versus 2023.
We expect the ratio to further reduce as we continue to lease
up the buildings at OTP and realise the rental growth potential
elsewhere in the portfolio.
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Life Science REIT plc
Annual Report and Financial Statements 2024
30
Adjusted net finance costs for the year were £3.7 million (2023: £2.0 million), comprising loan interest, expenses and
arrangement fees of £9.8 million, partially offset by capitalised finance costs of £2.1 million and adjusted finance income of
£4.0 million.
As a REIT, the Group is not subject to corporation tax on its property rental business. The estimated tax charge on its residual
business was £nil (2023: £0.1 million). Adjusted earnings for the year totalled £5.9 million (2023: £6.7 million).
In 2023, the Group incurred exceptional one-off finance costs of £1.5 million, with £0.7 million relating to the write-off of
unamortised arrangement fees on the Group’s debt facility, which was refinanced in June 2023, and an early repayment fee of
£0.8 million on the Fairfield facility. There were no exceptional finance costs in the year to 31 December 2024.
Fair value losses on derivatives and deferred premiums were £2.5 million (2023: £3.8 million loss), relating to the Group’s
interest rate caps.
The unrealised loss on revaluation of investment properties was £17.4 million (2023: £22.8 million loss). See the valuation section
above for more information.
The IFRS loss after tax for the year was £14.0 million (2023: £21.7 million loss). This resulted in IFRS loss per share of 4.0 pence
(2023: 6.2 pence loss) and adjusted earnings per share (“EPS”) of 1.7 pence (2023: 1.9 pence).
Dividends
The Company paid two dividends during 2024:
• In May 2024, the Company paid the second interim dividend of 1.0 pence per share in respect of the year to
31 December 2023.
• In October 2024, the Company paid the first interim dividend of 1.0 pence per share in respect of the year to
31 December 2024.
At 31 December 2024, the Group had distributable reserves of £326.9 million (31 December 2023: £328.0 million), with
the majority being in the Company. Following the Board’s announcement of a strategic review on 14 March 2025, all future
dividends have been suspended until the Strategic Review has been concluded.
Net asset value
IFRS NAV was 75.1 pence per share at the year end (31 December 2023: 81.1 pence per share). The EPRA NTA at the year end
was 74.4 pence per share (31 December 2023: 79.9 pence per share). The movement in the EPRA NTA per share is reconciled
in the following chart:
Dividends
paid
Fair value losses
on development
non-LFL portfolio
SONIA
cap premium
Adjusted
earnings
EPRA NTA
per share at
31 December 2023
Fair value
losses on
LFL portfolio
EPRA NTA
per share at
31 December 2024
85.0
82.5
80.0
77.5
75.0
72.5
70.0
(1.4)
(0.2)
1.7
79.9
(2.0)
(3.6)
74.4
Pence per share
Movement in EPRA NTA per share
For further details on the revaluation decline in the period see the valuation section above.
31
Life Science REIT plc
Annual Report and Financial Statements 2024
31
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
INVESTMENT ADVISER’S REPORT
CONTINUED
Debt financing
The Group has a £100.0 million term loan and a £50.0
million RCF, both of which run to June 2026, with two one-
year extension options. The Group also has a £35.0 million
accordion facility option available on the RCF. The facilities are
secured on all of the Group's assets, with £40.0 million of the
term loan defined as a Green loan in accordance with the LMA
Green Loan Principles.
The debt facility carries a cost of SONIA plus a 2.50% margin.
The SONIA reference rate has been capped at 2.00% per
annum until March 2025. During the year, the Group was
slightly over hedged against SONIA. As a result, in September
2024 the over hedged element of the existing caps were
closed out and the cap period extended for a further six
months to September 2025, capping SONIA at 3.00%. The
net cost of this transaction was £0.3 million. In addition, in
December 2024 a further 2.00% cap was put in place for the
quarter ending December 2025 at a net cost of £0.8 million
the payment of which has been deferred to the cap period. As
a result, the Group was hedged 100% for the next 12 months at
the year end.
At 31 December 2024, £122.7 million of debt was drawn
(31 December 2023: £108.7 million), with the £100.0 million
term loan fully drawn and £22.7 million drawn against the
£50.0 million RCF. The Group also had cash and cash
equivalents of £5.6 million (31 December 2023: £14.3
million), giving a net borrowings position of £117.1 million
(31 December 2023: £94.4 million). LTV was therefore 30.4% at
the year end (31 December 2023: 24.7%).
At the year end there was £27.3 million undrawn on the
RCF, of which £15.5 million is available to be drawn as at
the reporting date with the balance subject to future asset
valuations. Including cash of £5.6 million this provided total
facility liquidity of £32.9 million, covering committed costs to
complete at OTP of £27.4 million and uncommitted costs of
£5.5 million. In addition, the Group also has a £35.0 million
accordion facility which can potentially be used for future
capital expenditure projects. The facility will be drawn as
required to meet funding requirements whilst minimising
interest costs.
32
Life Science REIT plc
Annual Report and Financial Statements 2024
Compliance with the investment policy
The Group’s investment policy is set out in full on pages 153 to 155. The key elements of the policy are summarised below.
We complied with the policy throughout the year:
Policy element
Compliance in the period
Invest in a diversified portfolio of properties across the UK
which are typically leased or intended to be leased to occupiers
operating in, or providing a benefit to, the life science sector
(“life science properties”).
Yes. All the properties are in the Golden Triangle and are
either leased or intended to be leased to life science
organisations.
Examples of the assets the Group can acquire: wet and
dry laboratories, offices, incubators and co-working space,
manufacturing and testing facilities, and data centres.
Yes. All the Group’s life science assets are a mix of
laboratory and office space.
The Group can acquire individual buildings, a group of buildings
across a single science park or the entirety of a science park.
This may include purchasing or developing buildings that are
leased or intended to be leased to occupiers providing ancillary
services to employees of companies operating in, or providing a
benefit to, the life science sector.
Yes. The Group owns both individual assets and a
science park.
The Group will typically invest in income-producing assets,
consistent with providing capital growth and growing income.
Yes. All the assets are income producing (other than
the development at OTP) and offer potential for capital
growth and rising income through asset management.
Any asset management or development opportunities will
minimise any development risk, typically through forward
funding or similar arrangements.
Yes. We are forward funding the development
programme at OTP and have a fixed-price contract for
each building with the developer.
The maximum exposure to developments or land without a
forward funding arrangement is 15% of gross asset value (“GAV”).
Yes. There are no developments or land without a
forward-funding arrangement.
No individual building will represent more than 25% of GAV from
31 December 2023.
Yes. No individual building exceeds the threshold.
The Group targets a portfolio with no one occupier accounting
for more than 20% (but subject to a maximum of 30%) of the
higher of either (i) gross contracted rents or (ii) the valuer’s ERV
of the Group’s portfolio including developments under forward-
funding agreements, as calculated at the time of investing
or leasing.
One occupier exceeds 20% of contracted rent but
remains below the 30% threshold. This percentage is
expected to fall as OTP continues to be developed and
leased up.
The aggregate maximum exposure to assets under
development, including forward fundings, will not exceed 30%
of GAV from 31 December 2023.
Yes. 14.7% of assets are currently in development.
No more than 10% of GAV will be invested in properties that are
not life science properties.
Yes, more than 90% of assets are currently classified as
life science properties.
The Group will not invest more than 10% of GAV in other
alternative investment funds or closed-ended investment
companies.
Yes. The Company has no investments of this type.
Alternative Investment Fund Manager (“AIFM”)
G10 Capital Limited (“G10”) is the Company’s AIFM, for the purposes of the UK AIFM Regime, with Ironstone providing advisory
services to both G10 and the Company.
Investment Adviser
Ironstone Asset Management Limited is the Investment Adviser to the Company and the AIFM.
Ironstone Asset Management Limited | Investment Adviser
15 April 2025
33
Life Science REIT plc
Annual Report and Financial Statements 2024
33
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
SUSTAINABILITY
Delivering space with excellent sustainability credentials goes
hand in hand with our broader purpose of creating space for
science, so we are pleased with the progress we have made
this year. The space we are developing or repurposing targets
market leading ESG certifications and through the data we
collect, we are learning more about how to run our buildings
efficiently. These initiatives are key to delivering upon the
Pathway to Net Zero we set last year and this year, we are
pleased to report a notable like-for-like reduction in our scope
3 emissions, which accounts for most of our carbon footprint.
Highlights of the year include the progress we have made at
OTP, where we will be fitting a system of photovoltaic panels
to the roof of buildings without them (see page 37). This will
provide occupiers with greener and cheaper electricity, whilst
at Cambourne, our repurposing at Building 2020 has fully
electrified the space and sets a new standard for sustainable
refurbishment on the park. In March 2025 this year, we were
delighted to extend the lease for our largest occupier there,
driven by their need to undertake a comprehensive refit to
meet their own ambitious ESG commitments.
From a social perspective, we have continued to engage
closely with our occupiers to understand their needs. We
held face to face meetings with 37% of our occupiers on ESG
matters and by sharing insights from the data we collect,
enabled one occupier to reduce gas consumption by over
50%. We recognise the importance of delivering places that
support employee wellbeing and as we repurpose space at
Cambourne for example, are aligning to the Fitwel criteria. We
are looking for more opportunities to drive these interventions
and our occupier ESG survey which was completed towards
the end of the year provides some helpful insights in
this respect.
We have also worked hard to support the communities
around our assets. This year, we have again supported
Science Oxford, a local charity founded to encourage young
people to consider STEM careers (see page 38). We have
also worked with Pathways to Property, an organisation that
encourages young people from different backgrounds to
consider a career in real estate and were pleased that one of
their students joined Ironstone as an intern in October 2024.
We are delighted that this strong progress has been
recognised by both EPRA and MSCI; we achieved our first
EPRA sBPR Gold award for our 2023 annual report and are
now rated A by MSCI from a B rating previously, a jump of
three ratings. This recognition is important to our shareholders
and we hope to deliver further improvements as we make
progress on our strategy.
Delivering sustainable
space goes hand in hand
with our broader purpose of
creating space for science.
Sally Ann Forsyth | Chair of the Sustainability Committee
Framework
Status
Pages
Task Force on Climate-related Financial Disclosures
(“TCFD”)
Voluntary disclosure (not mandatory for closed-
ended investment companies)
40 to 49
Streamlined Energy and Carbon Reporting (“SECR”)
Mandatory disclosure
145 to 151
The Companies (Directors’ Report) and LLPs
(Energy and Carbon Report) Regulations 2018
Mandatory disclosure
145 to 151
EPRA – European Real Estate Association
Voluntary disclosure (not mandatory reporting, best
practice adopted)
145 to 151
34
Life Science REIT plc
Annual Report and Financial Statements 2024
34
47.2%
12.5%
40.3%
2024
0%
20%
40%
60%
80%
100%
100%
Rated A-C
12.7%
9.0%
35.5%
2023
42.8%
87%
Rated A-C
EPC A
EPC B
EPC C
EPC D
Our approach to Sustainability
ENVIRONMENTAL
SOCIAL
GOVERNANCE
• Progressing our net zero pathway
• Achieving best-in-class building
certifications
• Sustainable development
and repurposing
• Supporting biodiversity
• Providing healthy buildings
• Partnering with our occupiers on
their sustainability objectives
• Providing collaborative space
• Encouraging active travel
• Supporting local charitable
organisations
• Maintaining best practice
governance
• Addressing ESG related risks and
opportunities
• Transparent disclosure and
participation in industry
benchmarks
Performance highlights
Performance highlights
Performance highlights
• 100% A–C EPC by area (2023: 87%)
• 10 buildings (including on-site
developments) with full or interim
BREEAM Excellent or Very Good
certifications
• 15% decrease in LFL energy
intensity driven by greater
operational efficiency, principally at
Herbrand Street
• 6% increase in scope 1 & 2 GHG
emissions on a LFL basis
• 19% reduction in scope 3 emissions
on a LFL basis
• 100% of landlord controlled waste
diverted from landfill (2023: 100%)
• Face-to-face ESG engagement with
37% of single let occupiers by sq ft
(2023: 45%)
• Occupier survey completed
covering 75% by area
• Aligning repurposing projects
to Fitwel
• 341 registered users of the
OTPortal app
• £10,000 donated to charities local
to our assets or provided through
match funding
• Awarded sBPR Gold Award
(2023: Silver) for the first time
• MSCI rating improved to an A
(2023: B)
• Maintaining Board gender diversity
with 50% female representation,
including the Chair
• Framework for monitoring ESG and
climate-related risk embedded in
governance processes
BREEAM
Excellent 8.5%
Interim Excellent 35.5%
Very Good 6.8%
Uncertified Area 49.2%
EPC ratings by area
UN SDGs
In setting our sustainability strategy, we have
aligned our approach to the following of
the UN’s Sustainability Development Goals
where we can have the biggest impact:
BREEAM certification by area
35
Life Science REIT plc
Annual Report and Financial Statements 2024
35
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
ENVIRONMENT
Reducing our impact on the environment, reducing carbon emissions
and waste, and enhancing biodiversity.
Sustainability strategy
We have a broad sustainability strategy with headline corporate targets supported by more granular, asset level initiatives and
the minimum environmental standards we have set ourselves for developments and acquisitions.
Key to status

Ahead of target
On target
Behind target
SUSTAINABILITY
CONTINUED
Focus area
Targets
Achievements
Status
2025 targets
Progressing
net zero
• Progress towards
net zero by 2040
for direct (scope
1 & 2) carbon
emissions (CO
2
e)
• Progress towards
net zero by
2045 for indirect
(scope 3) carbon
emissions (CO
2
e)
• 100% of scope 1 & 2 carbon emissions reported
• 409 tCO
2
e absolute scope 1 & 2 carbon emissions,
an increase of 6% on an absolute and LFL basis
• 62% energy consumption data coverage for
occupier controlled units
• 2,167 tCO
2
e absolute scope 3 carbon emissions
reported; LFL emissions down 19%
• Progress on PV project at OTP supportive of scope
1, 2 and 3 reductions over time (see below)
• 15% decrease in LFL energy intensity driven
by greater operational efficiency; data sharing,
analysis and M&E adjustments enabled a major
occupier to cut electricity and gas usage by 41%
and 55% respectively (see page 146)
• Cambourne repurposing has delivered fully
electrified the space
• Cambourne energy audit undertaken identifying
opportunities to reduce emissions and meet future
regulatory requirements; now actioned

• Track energy
use intensity
on our portfolio
with a view to
setting a target
(see case study
on page 39)
• 100% of landlord
renewable energy
procured
• 100% of landlord procured energy Renewable
Energy Guarantees of Origin (“REGO”) (FY23: 52%)

• 100% of landlord
renewable
energy procured
• Identify and
progress
opportunities
for on-site
renewables
across portfolio
• PV supplier and operator identified for OTP
(see case study, page 37)

• Complete PV
roll out at OTP
• Develop a
renewables
strategy for
Cambourne
Achieving
best-in-class
building
certifications
• Achieve BREEAM
Excellent rating
for ground-up
construction
projects and
Very Good rating
for repurposing
projects
• Additional Interim BREEAM ‘Excellent’ in design
certifications registered for buildings 8 and 9;
buildings 3, 5, 6, 7 and the IQ (4A and 4B) at OTP
remain interim 'Excellent’ in design certifications.
See BREEAM table on page 147
• Deliver final
BREEAM
certifications
at OTP
• Buildings 10
& 11 to align
to BREEAM
Excellent
36
Life Science REIT plc
Annual Report and Financial Statements 2024
36
OTP PV panels
CASE STUDY
Improving the sustainability credentials of our
buildings not only supports our Pathway to Net
Zero but also helps us lease our space faster
and at higher rents. This year, we completed
the detailed design work to add PV panels to all
existing buildings at OTP and have identified a
partner to fit, own and operate them.
One of our major occupiers on the park will
pilot the scheme which is expected to become
operational later this year. A second occupier has
installed PV panels to the roof themselves which
has reduced their energy requirement significantly.
Focus area
Targets
Achievements
Status
2025 targets
• Target minimum
EPC rating
B across the
portfolio
• 100% of properties now EPC A-C rated (2023:
87%). See EPC ratings table on page 147
• Illustrative assessment on Cambourne repurposing
project gave an EPC A indicating that once
repurposing plans have been delivered across the
whole buildings, it should achieve an EPC A
• EPC rating A for
buildings at OTP
• EPC A in future
Cambourne
repurposing
projects
Sustainable
development
and
repurposing
• Track and report
on adherence
to sustainable
standards for
repurposing and
development
• Zero non-
hazardous waste
to landfill
• Cambourne and new OTP projects delivered in line
with standards for example:
- use of materials with high recycled content
- local materials sourcing
- Participation in considerate contractor schemes
• 100% waste diverted from landfill

• Continue to
track and report
on adherence
to internal
standards
Supporting
biodiversity
• Biodiversity
net gain on all
developments
• Biodiversity
strategy for
all assets
• Biodiversity assessment undertaken at Cambourne
identifying the current biodiversity levels and cost
effective methods to improve for such as habitat
replacement

• Biodiversity
strategy to be
developed for
Cambourne
and OTP
37
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
37
Life Science REIT plc
Annual Report and Financial Statements 2024
SUSTAINABILITY
CONTINUED
SOCIAL
Providing buildings that enhance wellbeing, encourage collaboration
and enable a healthy workforce for our occupiers
Focus area
Targets
Achievements
Status
2025 targets
Providing
healthy
buildings
• Developments
to achieve Fitwel
certification with a
minimum 2-star rating
• Repurposing projects
and existing portfolio
to be assessed against
Fitwel criteria
• Cambourne repurposing project aligns
to a Fitwel 1-star rating which could
be pursued on refurbishment of the
whole building
• Assessment of OTP against Fitwel
criteria completed identifying areas for
improvement

• Pursue site wide
Fitwel certification
at OTP
Partnering with
our occupiers
on their
sustainability
objectives
• Opportunity to
collaborate on ESG
matters offered to all
occupiers by the end
of 2024
• Occupier survey completed, covering
75% of occupiers by area
• One-to-one engagement with 37% of
single unit occupiers

• Deliver Nexus café,
identified as key
occupier amenity
Providing
collaborative
space
• All multi-tenanted
assets to have
collaborative space on-
site by 2025
• Plans for the Nexus café at OTP and
collaborative space finalised, starting
on site in H1 2025
• OTP app has 341 registered users

• Evaluate
opportunities
at Cambourne,
including app
and café
Encouraging
active travel
• Green and active travel
plans in place across
portfolio including
cycling facilities
• Cycling facilities at all sites
• EV charging points being rolled-out
across portfolio
• Deliver at least
one initiative at
each of OTP and
Cambourne
Supporting
local charitable
organisations
• Annual corporate
charitable plan
• Hosted Science Oxford tour of OTP for
school children and team volunteering
at the Unity MK homeless shelter café;
£10,000 charitable donations including
Science Oxford, Unity MK, Sorrell
House Hospice and the Wildlife Trust
• Develop
relationships with
existing partners,
targeting events
at Cambourne
and OTP
Science Oxford
As part of our commitment to supporting the communities
around our assets, for the second year running, we worked
with Science Oxford, a local charity founded to encourage
young people to get involved in science, technology,
engineering and maths.
We organised a visit to OTP for secondary school students
as part of their STEM Insight Week, where they toured
the Fortescue Zero and Native Antigen space and heard
more about the practical side of STEM careers. Hands
on experiences like this can be instrumental in attracting
people from a diverse range of backgrounds into science.
Case study
38
Life Science REIT plc
Annual Report and Financial Statements 2024
38
EUI analysis
Last year we committed to setting an energy use intensity
(EUI) target. To progress this, we have looked at the annual
EUI on our buildings compared to an industry standard.
We consider that our most appropriate benchmark is the UK
Net Zero Carbon Buildings Standard for acute healthcare
refurbishment EUI of 258 kWh/m
2
/year. As more of our
space is repurposed and as developments complete, we
will track their performance to arrive at an appropriate
target for our buildings. In doing so, we are mindful or
our broad range of occupiers including AI and quantum
computing where energy usage is typically high.
GOVERNANCE
Developing a robust corporate governance framework to support
the long-term success of our business
Focus area
Targets
Achievements
Status
2025 targets
Maintaining
best practice
governance
and oversight
of ESG risks
• Evolve best
practice
governance in
line with GRESB,
the Global Real
Estate Sustainability
Benchmark
and TCFD
recommendations
demonstrating
incremental
improvement
each year
• Reporting against our net zero pathway
• Tracking and benchmarking energy use
intensity (EUI) as part of our TCFD reporting
• A TCFD gap analysis was undertaken
• Framework for monitoring ESG and
climate-related risk embedded in
governance processes
• Additional corporate governance policies
approved including Business Code of
Conduct, Health and Safety statement and an
updated Modern Slavery Policy
• Provided additional disclosure on EPRA Board
and Investment Adviser social statistics

• Evolve best
practice
governance in
line with GRESB
and TCFD
recommendations
• 100% of leases
contain green
clauses aligned
to principles
• 100% of new leases include an obligation
to share energy data and preservation of
EPC rating
• 410,000 sq ft, 77.6% of the leased portfolio
now covered by green leases

• 100% of new
leases contain
green clauses
aligned to
principles
Transparent
disclosure and
participation
in industry
benchmarks
• Achieve Gold
standard EPRA
sBPR reporting for
year ending 2023
• Awarded EPRA sBPR gold award for the 2023
Annual Report, following our silver award for
the 2022 Annual Report
• Maintain Gold
standard EPRA
sBPR reporting for
year ending 2024
• Achieve
incremental rating
improvement
for indices
• MSCI rating improved to an 'A’ from a ‘B’
based on our 2023 annual report and website
• Achieve
incremental rating
improvement
for indices
Case study
LSR
average
UK Net Zero
Carbon
Buildings
Standard
OTP
building 1
Cambourne
average
Cambourne
2030
Cambourne
2020
Cambourne
1020
Rolling
Stock Yard
Herbrand
0
200
400
600
800
1000
Average for UK Net Zero Carbon Buildings Standard
39
Life Science REIT plc
Annual Report and Financial Statements 2024
39
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURE (“TCFD”)
A summary of the Group’s climate-related financial
disclosures is set out below. This aligns to the TCFD’s four
pillars – Governance, Strategy, Risk Management and Metrics
and Targets and to the 11 specific TCFD recommendations.
Progress against each recommendation is set out below.
Although the Group is exempt from the
TCFD disclosure requirement as Listing Rule
6.6.6R (8) explicitly excludes closed-ended
investment companies, the Group fully supports
the recommendations and voluntarily discloses
its alignment.
Compliance statement
TCFD recommendation
Compliance
1
Governance
a. Describe the Board’s oversight of climate-related risks and opportunities.
Consistent
b. Describe management’s role in assessing and managing climate-related risks
and opportunities.
Consistent
2
Strategy
a. Describe the climate-related risks and opportunities the organisation has
identified over the short, medium and long-term.
Consistent
b. Describe the impact of climate-related risks and opportunities on the
organisation’s business strategy and financial planning.
Developing: Climate-related risks and
opportunities have been identified and
materiality assessed and incorporated within
business plan. Developing a quantitative
approach over the medium-term.
c. Describe the resilience of the organisation’s strategy, taking into consideration
different climate-related scenarios, including a 2°C or lower scenario.
Consistent
3
Risk management
a. Describe the organisation’s processes for identifying and assessing
climate-related risks.
Consistent
b. Describe the organisation’s processes for managing climate-related risks.
Consistent
c. Describe how processes for identifying and managing climate-related risks
are integrated into the organisation’s overall risk management.
Consistent
4
Metrics and targets
a. Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process.
Consistent, and developing further metrics
including energy intensity measures over
the medium-term.
b. Disclose scope 1, scope 2, and, if appropriate, scope 3 greenhouse gas
(“GHG”) emissions, and the related risks.
Consistent regarding scopes 1 & 2. Voluntary
reporting of occupier procured consumption
and associated scope 3 emissions.
c. Describe the targets used by the organisation to manage climate-related risks
and opportunities and performance against targets.
Consistent
40
Life Science REIT plc
Annual Report and Financial Statements 2024
40
Governance of climate-related risks and opportunities
The Board
Sets the sustainability strategy of the Group, monitors and
has oversight of performance against targets.
Audit and Risk Committee
Monitors and reviews risks and
opportunities of the Group, including
those that are key climate-related.
Sustainability Committee
Monitors and reviews climate-related
risks and opportunities, makes
recommendations to the Audit
and Risk Committee for additions/
deletions to the corporate risk
register via AuditR.
Investment Adviser
Investment Committee
Ensures expenditure is in line
with the sustainability standards
and targets.
Risk Management Consultant
AuditR prepares, provides expertise
and manages the Group’s Risk
Management Framework.
ESG Taskforce
A group of internal (Ironstone) and external expertise reviewing emerging
climate-related risks and providing expert industry advice.
ESG Consultant
Square Gain provides support on
operational aspects of ESG, the
regulatory landscape, and climate-
related risks and opportunities.
Investment Adviser
Responsible for preparing and
implementing the sustainability strategy,
including identifying, assessing and
managing climate-related risk mitigation.
1
Governance
Describe the Board’s oversight of climate-related risks and opportunities
The Board, which is advised by Ironstone, the Investment
Adviser, is responsible for setting the strategic direction
of the Group, which includes delivery of the sustainability
strategy. The Board has oversight of climate-related risks
and opportunities via the Audit and Risk Committee and the
Sustainability Committee; in 2024 all Board Directors were
members of the Sustainability Committees and the Audit and
Risk Committee.
In 2025, Claire Boyle became an attendee
of the Audit and Risk Committee.
The Sustainability Committee is chaired by Sally Ann
Forsyth and meets biannually to monitor progress against
sustainability strategy targets, including climate-related risk
mitigation. At each Sustainability Committee the Investment
Adviser provides the ESG risk register for review and
comment, with attention drawn to any changes in risk rating,
new or emerging risks.
The Sustainability Committee recommends to AuditR Ltd
(“AuditR”) (the Group’s independent risk management
consultant) any key risks to be included in the corporate risk
register which is subsequently presented to the Audit and Risk
Committee by AuditR.
Biannually, the Investment Adviser provides updates on
progress against the sustainability strategy goals and updates
on ESG considerations more broadly to enable the Board to
fully consider climate-related risks and opportunities in their
decision making.
The Investment Adviser’s Investment Committee meets to
review and appraise investment decisions for the Group
including the acquisition and disposal of assets, and significant
repurposing/refurbishing projects. Decision making includes
consideration of climate-related risks and opportunities.
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Strategy
Describe the climate-related risks and opportunities the organisation has identified over the short,
medium and long term
In 2023, the Group created an ESG Risk Register which
includes the identification of climate-related risks and
opportunities across our portfolio, both the physical climate
risks posed by climate change, and also the risks that
arise as we transition towards a net zero carbon economy.
Climate-related risks have been identified over a range of
time horizons which are based on real estate life cycles. As
buildings have long design lifespans, climate-related issues
often manifest themselves over the medium and longer-term.
The time horizons adopted are:
• short-term is considered up to 1 year, aligned with the
current period;
• medium-term is 2-5 years, aligned with the period used
for the Group’s planning, forecasting and performance
analysis; and
• long-term is over five years, beyond the current forecasting
period, informing the longer-term investment plan.
Refer to the table below for an overview of the climate-related
risks and opportunities identified across our portfolio.
1
Governance
Describe management’s role in assessing and managing climate-related risks and opportunities
The Investment Adviser prepares and integrates the
sustainability strategy within the day-to-day management of
the Group’s assets. The Investment Adviser works with the
independent risk management consultant, AuditR, and the
independent ESG Consultant, Square Gain, to undertake
regular assessments of the Group’s climate-related risks and
opportunities. These assessments are undertaken alongside
broader ESG topics and results in an updated ESG risk
register including controls and mitigations which is provided
to the Sustainability Committee for review biannually.
In 2023, the Investment Adviser introduced sustainability
standards for acquisitions, development and repurposing.
The Investment Adviser undertakes environmental due
diligence focused on the asset’s vulnerability and resilience
to key climate-related risks including flooding, subsidence,
overheating and Minimum Energy Efficiency Standards
(“MEES”) compliance against these standards.
The Investment Adviser has established an ESG Taskforce,
which comprises the Head of ESG, Director of Asset
Management, and Square Gain. They meet monthly to
prepare, manage and prioritise the sustainability strategy
including climate-related risks at asset level and work closely
with the Head of Investor Relations and Corporate Affairs on
sustainability reporting and progress against strategy. The
ESG Taskforce is also to be consulted as appropriate on
material investment decisions.
The Investment Adviser was closely involved in a climate
change scenario analysis conducted in 2022, further detail set
out below. The output was integrated into both the ESG risk
register and the corporate risk register which is reviewed by
the Audit and Risk Committee.
For full details of our Risk Management Framework see
page 50 to 58.
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Climate-related risks and opportunities
Ref
Risk
Time horizon and
description
Impact on strategy
and planning
Impact on
financial planning
Residual
exposure
Physical Risk (P)
P1
Flooding, including
sustained changes
over time
Short to medium-term:
• Damage due to surface
water and river discharge
• High-level flood risk
modelling undertaken
to inform decisions on
acquisitions
• Will look to do flood
risk assessments
medium-term
• Cost of flood risk
assessments
• Cost of repairing/
maintaining buildings
• Increased
insurance costs
• Loss of value of impacted
buildings
Medium
P2
Extreme weather
events ("acute") and
sustained climatic
changes over time
("chronic")
Short-term:
• Damage from storm,
extreme heat, wind
Medium and long-term:
• Subsidence, damage to
structure of building
• Climate change scenario
analysis undertaken
• Refurbishment and
acquisition protocols in
place which take account
of climate risk factors
• Comprehensive
maintenance
programmes on
multi-let assets
• Increased
insurance costs
• Cost of cooling facilities
• Increased cost of repair
and maintenance
• Loss of value of impacted
buildings as potential
occupiers are put off
Low
Transition Risk (T)
T1
Market:
• Occupier demand
Short to medium-term:
• Demand for sustainable
space could result in
rent reductions for less
sustainable properties
• Occupiers recognise
the need for buildings
to have resilient energy
supplies and sufficient
capacity for their needs,
which may result in a
discount for space which
cannot guarantee this
• Occupiers require
additional amenities to
support wellbeing
• Targeting minimum
BREEAM Very Good
rating and EPC B
• Assessing opportunities
for Fitwel certification
• Comprehensive
programme of occupier
engagement to
understand their needs
• Cost of delivering more
sustainable buildings
(low carbon materials,
low carbon plant and
equipment)
• Cost of building
certifications
• Cost of delivering
amenity space and
renewable energy
solutions
Medium
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Ref
Risk
Time horizon and
description
Impact on strategy
and planning
Impact on
financial planning
Residual
exposure
Transition Risk (T)
T2
Policy & legal:
• Regulatory
compliance
Short to medium-term:
• Increasing volume of
disclosure requirements
• Complexity of data
collection
• Elevated risk of
incorrect disclosures
• External advisers
engaged to support on
disclosure requirements
and advise on regulatory
landscape
• Improving the robustness
of our data through
automated systems
• Occupier engagement to
support data collection
• Acquisition and asset
management protocols
incorporating climate
considerations
• Cost of external advice
• Cost of improved data
systems
Medium
T3
Market:
• Stranded assets
Medium to long-term:
• Buildings become
unlettable and the cost of
upgrading is prohibitive
• Insufficient electrical
capacity
• Acquisition and asset
management protocols
include climate risk
analysis to identify
how we can enhance
climate resilience of our
buildings
• External advisers
engaged to advise on
regulatory landscape
• Regular power usage
audits undertaken and
monitored
• Cost of more regular
upgrades and
improvements
• Cost of external advice
and third-party analysis
• Occupier engagement to
understand a building’s
performance
Medium
T4
Market:
• Cost of
decarbonisation
plans
Short-term:
• Cost of low carbon
materials and processes
rises, lack of green skills
Long-term
• Cost of carbon offsets
increases
• Business model focused
on repurposing,
incorporating
sustainability
considerations
• Net zero pathway
reduces carbon
emissions prior to
commitment date,
minimising cost of
offsetting
• Higher capital
expenditure to deliver
business plan
• Loss of value for assets
where business plan not
delivered
Medium
T5
Market:
• Cost of capital
Medium-term:
• Higher cost of finance for
less sustainable assets
• Inability to access
financing
• Business model focused
on repurposing,
incorporating
sustainability
considerations
• Higher cost of finance/
inability to access
financing
Low
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Ref
Risk
Time horizon and description
Impact on strategy
and planning
Impact on
financial planning
Opportunities (O)
O1
Market:
• Occupier demand
Short to medium-term:
• Occupier demand for
sustainable space could
result in a “green” rental
premium
• Business model focused on
repurposing, incorporating
sustainability considerations
• Potential to drive
rental growth
O2
Market:
• Stranded assets
Short to medium-term:
• Opportunity to acquire
discounted ‘brown’ assets
and repurpose
• Acquisition targeting
• Capital expenditure/
repurposing planning
• Potential to deliver
enhanced returns
O3
Market:
• Cost of capital
Long-term:
• Access to green finance
• Continue to explore green
financing opportunities
• Lower cost of finance
O4
Energy source
Short to medium-term:
• Increasing on-site
renewables
• Renewables feasibility
studies
• Collaboration with
occupiers
• Regularly review EV
charging provision
• Planning underway
to install PV panels
where appropriate
• Potential for additional
income streams
• Initial capital outlay
Describe the impact of climate-related risks and opportunities on the organisation’s
businesses, strategy and financial planning
Under the Board's supervision, when reviewing the climate-
related risk and opportunities for the Group, operational and
financial impacts are also considered as set out in the tables
on pages 43 to 45.
The Group believes climate change is a key risk for the
real estate industry and has therefore approved targets
to achieve net zero carbon for scope 1, 2 and 3 emissions
on our portfolio. Our net zero carbon pathway is aligned
with our longer term repurposing and refurbishment plans
for the portfolio. Our approach incorporates electrification,
energy efficiency and renewable energy as detailed in
our sustainability standards. These also support planning
for acquisitions, ground-up construction and repurposing
works, focusing on using energy more efficiently, making our
assets more resilient and reducing operating costs for our
customers. Pages 34 to 39 sets out the progress made on our
sustainability strategy in more detail in addition to our metrics
and targets.
A key part of our strategy is engagement with occupiers,
and with the market trending towards more sustainable
spaces, it is important we understand their evolving needs
and aspirations so occupier engagement is essential to our
approach. The Group’s occupier engagement has included
obtaining occupier-procured consumption data to calculate
the associated scope 3 emissions for voluntary reporting.
This year the Group has advanced its net zero pathway,
including progressing the PV project at OTP, where a third
party has been identified to fit, own and operate the panels.
Additionally at Cambourne, a partial repurposing of one of the
buildings has now completed, delivering all-electric space and
setting the benchmark for sustainable repurposing at the park.
Further sustainability initiatives are underway, including an
ecological assessment to support biodiversity.
Reflecting the importance it attributes to climate-related
issues, the Board receives regular updates from the ESG
Taskforce on market trends and asset-specific climate-related
issues. The Group closely monitors UK climate-related
regulation, so the financial and operational impacts are
identified early and incorporated into the business plan.
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2
Strategy
Describe the resilience of the organisation’s strategy, taking into consideration different climate-related
scenarios, including a 2°C or lower (above pre-industrial levels) scenario
As part of our business strategy and to support the
identification of climate-related risks, a climate change
scenario analysis was undertaken in 2022 and updated in
2023 to review the short, medium and long-term physical risks
to the business. The Group’s sustainability strategy takes into
consideration different climate-related scenarios, including
a 2°C or lower scenario, to ensure our individual assets
and business operations have resilience in each of these
scenarios. The methodology applied to the climate change
scenario analysis is set out below.
Climate change scenario analysis methodology
To take account of the uncertainty of how climate change
impacts will manifest over time, the climate change scenario
analysis considers three of the Intergovernmental Panel on
Climate Change’s representative concentration pathways
(“RCPs”) scenarios. The scenarios describe different climate
futures and the resulting global mean temperature increases
by the end of the century, depending on the volume of GHGs
emitted in the years to come.
The Group’s scenario analysis considers the impact of climate
change on the organisation’s strategy over the following
RCP scenarios:
• RCP 2.6: 0.9-2.3°C
• RCP 4.5: 1.7-3.2°C
• RCP 6.0: 2.0-3.7°C
It is industry best practice to identify climate risks across
multiple scenarios to account for the uncertainty that comes
with modelling future projections of climate change impact.
Low emission scenarios such as RCP 2.6 have high transition
risk and low physical risk, whereas high emission scenarios
such as RCP 6.0 is appropriate to consider physical climate
risks under a world where temperatures increases up to 3.7
degrees by the end of the century.
Based on this analysis, our vulnerability to all physical climate
risks is low, up to 2030. In the RCP 6.0 post-2050 scenario,
the risks assessed as material are from flooding and building
inoperability due to overheating. However, these risks do not
take account of existing mitigation or adaptation measures
at a site level. The climate change scenario analysis focused
on physical climate risk whilst transition risks are identified,
assessed and managed through our ESG Risk Register.
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3
Risk management
Describe the organisation’s processes for identifying and assessing climate-related risks
Through the climate change scenario analysis and the Group’s
ESG risk register, we identify, assess and monitor the climate-
related risks for our business, with significant climate-related
risks being included in our corporate risk register. For the
purpose of reporting the Group uses the impact and likelihood
thresholds of our Risk Management Framework to define
climate-related risks and opportunities (see page 50).
Prior to each Sustainability Committee, the ESG Taskforce
(supported by AuditR and Square Gain) reviews the ESG
risk register, updating it as appropriate and discussing any
emerging climate-related risks. The Sustainability Committee
reviews the climate-related risks and any proposed changes
to the corporate risk register are recommended to the Audit
and Risk Committee. The potential impact of climate change
is one of our principal risks, as we seek to reduce both our
impact on the environment and the impact that climate change
has on our business.
Our risk assessment process for prioritising climate-related
risks incorporates an assessment of existing and emerging
regulatory requirements, and the potential materiality of the
impact on our operations. This considers both the acute and
chronic physical risks, and the transition risks as we move to
a net zero carbon and climate resilient economy (in line with
TCFD recommendations). Our assessment has shown that
our portfolio is resilient and that these risks are adequately
mitigated at the present time.
For full details of the Risk Management Framework and
consideration of emerging risks see pages 50 to 58 and for
a detailed description of the roles and responsibilities of the
Sustainability Committee see page 83.
In addition, when acquiring new buildings, we will undertake
an environmental assessment and climate risk analysis as
part of the due diligence process. This helps to ensure that
we enhance the asset’s climate resilience when works are
undertaken to refurbish and repurpose the asset to life
science use.
New leases include clauses designed to assist with delivering
our climate change ambitions, for example requiring any
building alterations to be of a type and quality that does not
adversely impact the EPC rating and the provision of energy
consumption data to enable measurement of the portfolio’s
carbon emissions as we progress towards our net zero
pathway targets.
Describe the organisation’s processes for managing climate-related risks
The Investment Adviser regularly reviews and updates the
corporate risk register, which is reported to each Audit and
Risk Committee meeting, highlighting any emerging risks,
any changes to existing risks and our exposure to that risk.
The Audit and Risk Committee reviews the risk register, with
particular focus on the principal risks and any emerging risks
(including climate-related risks) and provides updates to
the Board.
The Audit and Risk Committee also monitors our risk
management processes and approves relevant disclosures.
It is responsible for monitoring financial reporting and
external audit plans and outputs, as well as providing
assurance to the Board in relation to financial, operational and
compliance controls, all of which are designed to manage our
exposure to risk.
Each risk (including climate-related risk) within the risk register
has mitigations in place to ensure these are appropriately
managed, which the Investment Adviser is responsible for. We
manage, minimise and mitigate our climate risks and ensure
resilience through implementing a range of measures; this
includes flood risk assessments on acquisition, as well as
targeting BREEAM certifications, and EPC A or B ratings.
Describe how processes for identifying, assessing and managing climate-related risks
are integrated into the organisation’s overall risk management
We have established climate-related risk identification,
assessment and management into our core risk management
framework. For full details of our Risk Management Framework
see page 50. There is regular risk reporting to the Audit and
Risk Committee, in line with the approved framework.
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4
Metrics and targets
Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process
The metrics used by the Group to assess climate-
related risks and opportunities are aligned with TCFD
recommendations and detailed in the sustainability strategy
and risk management process. Metrics on climate-related
risks associated with water, energy, land use and waste
management, are included and considered to be the most
appropriate for the Group at present.
These metrics are reviewed on an annual basis to ensure they
are consistent with sector-wide disclosure. As data develops,
the Group is committed to providing historical data to aid
trend analysis; further details on our metrics and targets can
be seen in the table below and in the EPRA sBPR report on
pages 145 to 151.
Disclose Scope 1, Scope 2 and Scope 3 GHG emissions, and related risks
The Group reports on 100% of its scope 1 and 2 GHG
emissions and this focus is consistent with cross-industry
climate-related metric categories and the GHG Protocol (see
the EPRA sBPR report on pages 145 to 151). Given a significant
contribution of our reported energy consumption is consumed
by our occupiers, we calculate and report on scope 3 GHG
emissions associated with downstream leased assets. Scope
3 GHG emissions accounts for 84% of our total operational
GHG emissions.
We have further engaged with occupiers this year and are
making progress to track occupier energy consumption, and
to develop plans to enhance energy efficiency and achieve
carbon savings. These activities also support our occupiers’
own sustainability ambitions.
Currently, the Group is responsible for the majority of its
occupiers’ energy procurement; 74% of the landlord-procured
energy was consumed by occupiers, with the remainder being
used in common areas and voids.
The most significant opportunity to minimise carbon and
improve energy efficiency across the portfolio, is at the time
when buildings are repurposed to laboratory space. These
key intervention points have been mapped across the
portfolio and form the basis of our decarbonisation pathway
as we transition to net zero emissions by 2040 for scope 1 and
2 GHG emissions, and by 2045 for scope 3 GHG emissions.
Disclose the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets
The Group uses a suite of targets to manage climate-related
risks and opportunities. For reporting purposes, we have set
out the Group’s targets in the table below. See the full report
on progress against our sustainability strategy on pages 34 to
39 for further details and our EPRA disclosures on pages 145
to 151 for historical performance.
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Environmental
Risk
Metric
Page
Key target
P2, T3,
T4, O2
• % repurposing projects to meet
Internal sustainability standards
See Sustainability section, page 37
100% comply or explain
T2
• Absolute scope 1 & 2 carbon
emissions and scope 3
emissions
See EPRA SBPR Reporting section,
page 149
To be net zero by 2040 for scope
1 & 2 and net zero by 2045 for
scope 3.
Interim target for scope 1
& 2 of a 50% reduction by 2030
T2
• Energy use intensity (EUI)
See EPRA SBPR Reporting section,
page 148
Tracking EUI across our portfolio
and benchmarking against industry
best practice with a view to setting
a target at year end (see case
study on page 39)
T1, O2
• Portfolio EPC performance
See EPRA SBPR Reporting section,
page 147
B rating for all buildings
T1, O2
• Number of assets with Excellent
or Very Good BREEAM
certifications
Seee EPRA SBPR Reporting
section, page 147
Minimum BREEAM Excellent for
ground-up construction projects
and Very Good for refurbishments
04
• Number of assets with on-site
renewable
See EPRA SBPR Reporting section,
page 146 and 148
Identify and progress opportunities
for on-site renewables across
portfolio, with progress delivered
at OTP (see case study on
page 37)
04
% electricity purchased from
renewable sources
See EPRA SBPR Reporting
section, page 148
100%
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I
N
D
E
P
E
N
D
E
N
T
A
S
S
U
R
A
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M
A
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A
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M
E
N
T
A
S
S
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R
A
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E
A
M
R
S
N
AIFM
Valuers
Auditors
Depositary
Other external
assurance
Investment
Adviser
R
I
S
K
I
D
E
NT
I
F
I
C
A
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Board
PRINCIPAL RISKS
AND UNCERTAINTIES
Overall risk culture
Our financial and operational performance and reputation are
subject to several risks and uncertainties. These risks could,
either separately or in combination, have a material impact on
our performance, occupiers, third-party service providers, the
environment and shareholder returns.
The Board, supported by its advisers, is responsible for
identifying, understanding, considering and acting on the
Group’s current and emerging risks. Our business culture
is designed to enable decisions to be made within agreed
parameters and recognised accountabilities, to support the
delivery of our objectives.
Responsibilities
The Board has overall responsibility for managing risk,
identifying principal risks that may affect the Group’s
objectives and determining the nature and extent of risk
exposure that the business is willing to take in pursuit of its
strategy. The Audit and Risk Committee, on behalf of the
Board, oversees the Group’s framework for risk management.
We take a thorough and proportionate approach to managing risk. We consider our
compliance requirements and the protection of our occupiers and other stakeholders as
key priorities when assessing our risk appetite. Our robust risk, governance and control
environment is designed to ensure we have a clear understanding of business risks and
opportunities, and our management and mitigation strategies.
Risk management framework
Our framework for risk management is approved by the
Board. It sets out how we identify, evaluate and report on our
current and emerging risks, and incorporates the assessment
of the controls and mitigation strategies we have in place
for each documented risk. We apply a consistent evaluation
framework to the assessment of risks, providing a clear basis
for considering threats and opportunities across our activities.
Our approach
The Investment Adviser regularly reviews and updates the
corporate risk register, which is reported to each Audit and
Risk Committee meeting, highlighting any emerging risks and
any changes to existing risks; the controls in place; and our
exposure to that risk. The Audit and Risk Committee reviews
the risk register, with particular focus on the principal risks and
any emerging risks and provides updates to the Board.
The Audit and Risk Committee also monitors our risk
management processes and approves relevant disclosures.
It is responsible for monitoring financial reporting and external
audit plans and outputs, as well as providing assurance to
the Board in relation to financial, operational and compliance
controls, all of which are designed to manage our exposure
to risk.
Committee key
N
Nomination Committee
A
Audit and Risk Committee
M
Management Engagement Committee
S
Sustainability Committee
R
Remuneration Committee
The Board has approved the delegated authority matrix and
key policies, which ensure that responsibility for making key
decisions such as asset acquisitions and disposals is clearly
defined and understood. The authority matrix ensures that
significant decisions are taken at the appropriate level, taking
into account the size and complexity of the transaction, and its
significance to our plans.
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Risk appetite and awareness
Risk awareness exists through our decision-making processes
and is embedded in our systems, policies, leadership,
governance and behaviours. We primarily have an outsourced
model and are reliant on service providers, particularly the
Investment Adviser, to make decisions within the Board’s
approved parameters. These parameters are summarised
by our risk appetite, which is incorporated within the risk
framework.
Our risk appetite was reassessed during the year,
as part of the annual review of the risk framework
and remains unchanged. We have no appetite for
risks relating to compliance with regulatory and
environmental requirements, or the safety and welfare
our occupiers, those working on our behalf, and the
wider community in which we work.
Our appetite for risks relating to climate change is
low, and we are, through the Sustainability Committee,
working to identify and mitigate physical and
transitional risks to the portfolio and the Group.
We will accept a reasonable level of risk in relation to
business activities focused on enhancing revenues,
portfolio values and increasing financial returns
for investors. We seek to balance our risk position
through:
• a strong focus on compliance, with our expectations
of service providers incorporated within contract
documents, and monitored through performance
reviews by the Management Engagement
Committee;
• the acquisition and management of a balanced
asset portfolio, being selective in our acquisition
decisions, and following a clear investment
appraisal process;
• a focus on mitigating climate-related risks and
opportunities through our portfolio acquisition
decisions, refurbishment and repurposing
approach, and our work with and support to
occupiers; and
• generating profit and funds through the effective
asset management of our portfolio.
Risk appetite
Environmental, Social and Governance (“ESG”) risk
We consider the active management of ESG related risk to be
a key element of our business operations. We have invested
resource in understanding these risks, in particular climate-
related risk, and how we can best mitigate these.
ESG and climate-related risks are included within the
corporate risk register, and we have a separate climate-
related risk register, covering both physical and transitional
risks. This is reviewed by the Investment Adviser and reported
to the Sustainability Committee. There is a biannual formal
review of the risks in the climate related risk register, to
consider whether there are any risks rated high that should
be escalated to the corporate risk register. For more details
on these risks, see pages 40 to 49 in the TCFD section of
this report.
Emerging risks
A key element of our approach to the management of risk
is the regular identification and consideration of potential
emerging risks for the Group. These emerging risk reviews
are carried out regularly with the Investment Adviser, and it is
part of the regular risk report to the Audit and Risk Committee.
During the year, two new risks were added to the register:
• the potential for a significant legal challenge initiated by the
Group – relating to the ongoing development of OTP. We
have raised concerns with the developer in relation to the
time frame for completion of the buildings and are working
with them to resolve the situation.
• general electrical capacity limitations – this is not
specifically a Group issue, being the lack of available
capacity in the network given the move towards electrical
power as a cleaner energy source. However, whilst this
does not impact the Group's current business plan, there
is a potential for this risk to impact it in the longer term.
The Investment Adviser has undertaken an analysis of the
power requirements of existing and potential occupiers
during the year which demonstrate this is not an issue for
the Group. Therefore, whilst this has been added to the risk
register and will be regularly monitored, we do not consider
it is one of the Group’s principal risks.
We acknowledge the current macroeconomic environment
around globalised trade and tariffs, but do not believe this has
a material impact on the Group and has therefore not been
included as an emerging risk at this stage.
51
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
9
Compliance risks
6
7
8
Financial risks
10
Climate-related risks
1
2
3
4
Business risks
5
Principal risks
The Board confirms that it has performed a robust assessment
of the Group’s principal and emerging risks and considered
both the short and longer-term impacts. The Investment
Adviser and the Audit and Risk Committee regularly review
the corporate risk register in detail.
The Board considers its overarching risk to be that
investment objectives and performance against them become
unattractive to investors, leading to a prolonged widening
share price discount to net asset value, constraining the
Group’s ability grow by raising funds on the public markets.
The Board has identified its principal risks based on this
overarching risk, and these are summarised here, along with
the current risk management strategy, the assessment of
exposure to each risk, and any change in assessment since
our last report.
Changes in risk, emerging risk
Other than the risk relating to legal challenge, there are no
additional principal risks, and we have not removed any risks
previously considered to be principal. Where the evaluation
of the risk has changed, an explanation has been provided in
the detailed section below.
The heat map summarises the Group’s current principal risk exposure
Key to risk movement
Increase since previous year
Decrease since previous year
Poor returns on the portfolio
Significant legal challenge
Inability to identify or secure
assets/sites for acquisition
Poor performance of the
Investment Adviser or
other significant third-party
provider
Inappropriate acquisition,
or breach of investment
strategy
Interest rate changes
Breach of loan covenants, or
prospectus borrowing policy
Inability to attract investment,
either equity or debt funding
Loss of REIT status
Impact of climate change
PRINCIPAL RISKS
AND UNCERTAINTIES
CONTINUED
9
4
1
5
7
6
3
10
8
Likelihood
Impact
Low risk
High risk
2N
New principal risk in 2024
N
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52
Key to strategy
1
2
3
Delivering life
science space
Progress leasing
Maintain our sound
financing position
Business risks
1
Poor returns on the portfolio
Change
No change
Whilst we have seen increasing interest from potential occupiers and a generally more active
market in the second half of the year, at this stage we consider it prudent to maintain the medium
evaluation of this risk.
Risk
Achieving the targeted level of return on our property portfolio over time is fundamental to the
success of the business. The risk of a reduced return on the portfolio could be caused by a number
of factors, including:
• reduced property valuations;
• reduced rent levels;
• an inappropriate balance of property types within the portfolio;
• cost of capital increases, particularly as interest rates rise;
• higher than anticipated void rates, and bad debts; and
• increasing new tenancy costs (e.g. shorter leases or significant works to attract occupiers).
In addition, external macroeconomic challenges may reduce investment in the life sciences sector,
subsequently reducing property values and rent incomes, and in the medium to longer term this
could also impact on the number of potential occupiers looking for property.
Mitigation
Portfolio risk mitigation is based around:
• Asset value – a robust acquisition and investment process, including detailed financial modelling.
Our investment protocol reflects our delegated authority matrix, ensuring that decisions are made
at the right level, with particularly significant decisions referred to the Board.
We aim to have a balance between space developed with or by occupiers, and the development
of sites in advance of occupation, particularly with specialist facilities such as laboratory space.
This enables us to meet specific occupier requirements, and also to attract potential occupiers
who are looking for reduced fit-out cost and time, which helps to drive rents.
• Occupier quality – our occupier approval process is designed to ensure we fully understand
occupier requirements, delivering appropriate space for them. It also includes evaluation of
potential occupiers, to ensure that they are aligned with the Group’s strategic priorities and have
a business model and financial plans which cover all property costs.
• Property management – the property managers work closely with the Investment Adviser’s asset
management team, and together they provide regular performance reviews and reports to the
Board. Rent collection performance is also monitored by Waystone, who are responsible for rent
collection accounting and maintenance of the debtor ledger.
Link to strategic
priorities
1
2
Inherent to residual risk
Residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
20
12
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
PRINCIPAL RISKS
AND UNCERTAINTIES
CONTINUED
2
Significant legal challenge
Change
New
This risk was added to the risk register during the year, as the development completions at OTP
continue to be delayed.
Risk
We entered into a development agreement as part of the acquisition and construction of OTP.
Our acquisition decision making relied in part on information provided to us by the developer,
particularly regarding timing of construction and expected completion dates.
Due to ongoing completion delays, commencing legal challenge is an option available to the Group.
However we are working with the developer to resolve this situation and avoid pursuing this route.
Mitigation
We have engaged legal and technical expert advice, and are in formal discussions with the
developer in relation to the plan forward.
Link to strategic
priorities
1
2
Inherent to residual risk
Residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
20
12
3
Inability to identify or secure assets/sites for acquisition
Change
No change
Risk
There is a risk that we may lose investment opportunities to competitors. This could be driven
by aggressive competitors, the overall level of competition in the market, insufficient suitable
available assets in the market, or acquisition prices that would make it difficult for us to generate
sufficient returns.
Mitigation
Our Investment Adviser has an experienced management team and is supported by external
property management specialists, who have extensive expertise and contacts across the life
sciences market and are able to source a range of acquisition opportunities. However, our focus
this year and next is on the management of our existing assets, including progressing development
and potential repurposing to attract occupiers to our space and drive the best value from our
current portfolio.
Link to strategic
priorities
1
Inherent to residual risk
Residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
16
9
54
Life Science REIT plc
Annual Report and Financial Statements 2024
54
4
Poor performance of the Investment Adviser or other significant third-party provider
Change
No change
Risk
We operate an outsourced model and depend on the performance of our third-party service
providers, particularly the Investment Adviser, AIFM, Property Manager and Fund Administrator.
Poor service delivery from any of these key providers could result in poor decisions, reduced
portfolio returns or regulatory compliance failures, and could ultimately have a financial impact
on investors.
We rely on receiving high-quality and accurate information from our service providers, and
inaccurate or incomplete information could damage our finances, properties, occupiers and
reputation. In particular, inaccurate information could increase our revenue risk, as we depend on
third parties to invoice, collect, bank and record revenues.
Mitigation
Our governance framework is designed to ensure that the Board is involved with decisions that are
material to the success of the Group. There is an approved delegated authority matrix, including the
matters reserved for the Board.
Our service providers are recognised experts in their fields, and we have contracts in place, with
clear terms of service and our expectations clarified.
The principal third-party providers oversee and review our activities, with the AIFM reviewing
and approving key transactions proposed by the Investment Adviser, and the Investment Adviser
monitoring the performance of the property managers. Financial reports and information are
prepared by Waystone and checked by the Investment Adviser’s Finance team, prior to reporting to
the Board.
Our Board members are experienced individuals, appointed for their knowledge and their business
and commercial acumen. In addition to their performance reviews and variance analysis as part
of the normal quarterly Board meetings, they formally review the performance of key third-party
service providers through the Management Engagement Committee.
The valuation of the portfolio is a key risk area for the Group. The valuation is undertaken by an
independent valuer, which provides independent assurance for the Board on the accuracy of key
metrics reported by the Investment Adviser
Link to strategic
priorities
1
2
3
Inherent to residual risk
Residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
15
8
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Annual Report and Financial Statements 2024
55
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
PRINCIPAL RISKS
AND UNCERTAINTIES
CONTINUED
5
Inappropriate acquisition, or breach of investment strategy
Change
No change
Risk
Acquiring assets or taking on occupiers which are not in line with our investment policy and
objectives could have a detrimental effect on our portfolio values, finances or reputation, and could
also increase risk for occupiers, particularly in multi-tenanted properties.
Mitigation
Our investment policy is supported by processes designed to ensure that acquisitions meet our
requirements, and any capital expenditure will deliver enhanced returns.
We have a strong acquisition protocol approved by the Board, which includes robust due diligence
processes and assessment against clear investment criteria, including portfolio mix, property type
and quality, legal issues, environmental requirements, sector and quality of occupier.
Acquisition and investment approvals follow our delegated authority matrix, with particularly material
decisions reserved for the Board. All acquisitions and disposals are also approved by the AIFM.
The Investment Adviser and the Property Manager provide us with expert knowledge of the
properties and geographical locations which are best suited to the life science market, ensuring that
our property portfolio is best suited to the needs of our target occupiers.
Our procedures also require a full assessment of potential occupiers, ensuring that they are linked
to the life science sector and are of suitable financial stability and strength for the lease concerned.
Link to strategic
priorities
1
2
Inherent to residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
8
3
Residual risk
Financial risks
6
Interest rate changes
Change
No change
Risk
Interest rate rises present a number of different potential risks to the Group. They may impact on
our ability to utilise funding to execute the strategy; may have an impact on the overall value of
the portfolio, as the cost of lending impacts on asset valuations; potential occupiers may decide to
delay expansion plans, and current occupiers may have reduced willingness or ability to pay rents.
Mitigation
The potential for interest rate rises is not a risk within our control, and we therefore focus on
managing and mitigating the consequences. We have a financing strategy agreed with the
Investment Adviser. We are in the second year of a three year financing arrangement, which also
has options for extension. This provides sufficient headroom to complete our current planned
developments and refurbishments. We have also hedged the SONIA rate risk with interest rate
caps, targeting 100% hedging at all times. We also manage our cash flows carefully, along with the
timing of debt drawdowns for significant outlays.
Link to strategic
priorities
3
Inherent to residual risk
Residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
20
12
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Life Science REIT plc
Annual Report and Financial Statements 2024
56
7
Breach of loan covenants or borrowing policy
Change
Increase
Development completion delays and slower than anticipated leasing have impacted on cashflows
which may impact future compliance with facility covenants.
Risk
We set out our expected and maximum LTV ratios in the prospectus, and separately have LTV and
interest cover ratios within our financing facility. Breach of any of these ratios, or the terms and
conditions of the funding facility, could have a serious impact on the delivery of our objectives,
through cash shortages or damage to our reputation.
Mitigation
The Investment Adviser is responsible for monitoring operations, financial transactions and
performance, and reviews the financial position continuously to ensure that neither the LTV ratio nor
any specific requirements of our financing facility are breached.
The Investment Adviser applies comprehensive financial models to plan cash flows and funding
requirements. Cash availability is built into the investment decision-making process and capital
expenditure planning.
The cash position is reconciled monthly to the bank statements by Waystone, and by the Investment
Adviser’s Finance team on an ad hoc and quarterly basis to the accounting records produced
by Waystone.
We are working with the developer on a revised plan and completion timetable for OTP which will
enable the asset management team to focus leasing activities accordingly. Ensuring that assets are
revenue generating as soon as possible will reduce future cash flow and covenant compliance risk.
Link to strategic
priorities
3
Inherent to residual risk
Residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
20
12
8
Unable to attract investment, equity or debt funding
Change
Increase
The prolonged discount at which our shares trade relative to net assets and the delay in both
development completions and leasing progress has restricted our ability to source both equity and
debt funding.
Risk
There is a risk that we may be unable to raise funding, either through equity from new investors/
increased investment from existing shareholders or via debt funding. This would affect our ability to
grow and deliver on agreed strategic objectives.
Mitigation
We have an experienced Investment Adviser, with excellent market knowledge. The Investment
Adviser Finance Director maintains relationships with current and potential funding partners, and
any significant funding agreements are reviewed and approved by the Board, in line with our
delegated authority matrix.
Following the refinancing, the banks remain supportive of our strategy, providing we continue to
operate within the covenants of our facility.
Whilst the discount at which our shares currently trade to net assets make raising equity
challenging, we maintain an active programme of shareholder engagement and provide regular
market updates on our strategic progress to strengthen our relationship with investors and
potential investors.
Link to strategic
priorities
1
3
Inherent to residual risk
Residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
16
12
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Annual Report and Financial Statements 2024
57
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
PRINCIPAL RISKS
AND UNCERTAINTIES
CONTINUED
Compliance risks
9
Loss of REIT status
Change
No change
Risk
Failing to comply with the REIT framework could put our status as a REIT at risk, resulting in a
potentially significant impact on our shareholders.
Mitigation
We have a documented governance framework, with clearly allocated responsibilities set out in
the matters reserved for the Board, the delegated authority matrix, and in our contracts with the
Investment Adviser and other key service providers.
We obtain advice as needed from the AIFM, our brokers and external legal support in relation to
governance compliance, FCA and listing rules.
Our position against the key requirements of the REIT legislation is reviewed by the Investment
Adviser each month, by Waystone quarterly, and is reported to the Board. Cash and earnings cover
for dividends is monitored through the comprehensive cash flow forecasting process.
Link to strategic
priorities
3
Inherent to residual risk
Residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
15
5
Climate-related risks
10
Impact of climate change
Change
No change
Risk
The potential impact of climate change is one of our principal risks, and we are investing time and
resource to better understand and reduce our impact on the environment and minimise the impact
of climate change on our portfolio.
We have a separate climate risk register to help us identify, consider and mitigate both physical and
transitional risks in more detail.
Key risks documented in that register include:
• change in occupiers’ requirements, as they seek more sustainable property options; and
• the complexities and cost of compliance with increasing legislation and reporting requirements,
and the impact of changes to business practices going forward.
Mitigation
The global impact of climate change is already noticeable, and we recognise our responsibility to
develop a portfolio and business/operational practices which reduce our environmental impact,
impact and minimise the impact of climate change on our portfolio whilst enabling us to deliver
results for our investors.
Further details are included in the Sustainability and TCFD reports (see pages 34 to 49), but a
summary of the actions we have taken and planned are:
• new developments to be BREEAM ‘Excellent’ or ‘Very Good’ rated;
• environmental assessment of all potential acquisitions, as part of the acquisition process;
• EPC reports are part of our standard process for acquisitions;
• capital expenditure planning includes consideration of climate-related risk, with appropriate
building standards being applied, such as energy efficient lighting and heating;
• external specialists in place to assist us with delivery of our sustainability roadmap and route to
net zero;
• a Sustainability Committee which considers climate related risks and opportunities, and approves
our mitigation strategy and plans, and
• a standard quarterly Board report pack which includes ESG and climate-related risk information,
to ensure that Board members are fully informed.
Link to strategic
priorities
1
2
Inherent to residual risk
Residual risk
Low 1-4
Medium 5-12
High 13-25
Inherent risk
16
9
58
Life Science REIT plc
Annual Report and Financial Statements 2024
58
GOING CONCERN AND
VIABILITY STATEMENT
Going concern
The Board monitors the Group’s ability to continue as a
going concern. Specifically, at quarterly Board meetings, the
Board reviews summaries of the Group’s liquidity position
and compliance with loan covenants, as well as forecast
financial performance and cash flows. Throughout the period,
the Board met frequently, in conjunction with the Investment
Adviser, to review cash resources and the progress of
the development and repurposing of the investment
property portfolio.
The Group ended the year with £5.6 million of unrestricted
cash and £27.3 million of headroom available under its
debt facilities, of which £15.5 million is available to draw
as at the reporting date with the balance subject to future
asset valuations. These valuations are due to increase as
the development of OTP continues and completes. There
is limited risk that a fall in bank valuations would result in a
liquidity issue in the base and sensitised cases, however
further asset disposals would mitigate this risk. The Group
is operating within its covenants and a sensitivity analysis
has been performed to identify the decrease in valuations
and rental income that would result in a breach of the LTV,
or interest cover covenants. For the HSBC and Bank of
Ireland facility, current bank valuations would need to fall by
28.9% or rents by 26.1%, as at the 2024 year end covenant
test date, before these covenants would be breached. As at
15 April 2025, 100% of rents invoiced in December 2024 in
relation to the quarter to 24 March 2025 were received.
The Board has looked at its forecast cash flow for at least
the next 12 months and under the base case scenario, as
expected, it can meet its covenants and liquidity requirements
within the current facility headroom. The Directors have
reviewed a number of scenarios which included plausible
downside sensitivities in relation to rental cash collection,
making no acquisitions or discretionary capital expenditure,
and minimum dividend distributions under the REIT rules. The
sensitivity analysis also includes, for example, considering
the timing of cash flows on committed capital expenditure at
OTP and assumptions over the commencement and speed
of completion of the work, which impacts the timing of cash
outflows being payable, which is currently not certain.
In combination with this, the Directors note the debt facilities
are due for maturity in June 2026, and will consider the
prospects of any refinancing necessary, and any resultant
liquidity constraints, as part of the strategic review where
individual and collective asset sales are under consideration.
The facility may be refinanced in full, in part at a reduced
amount, or repaid in full depending on the outcome of the
strategic review which will conclude before the refinancing
date. The capital expenditure relating to the development
of OTP is the largest contributor to using up headroom in
the facility across the going concern period, and whilst the
timing of this is not certain as noted above, the Group has
currently forecast that headroom will remain available up to
the refinancing date, based on the Directors’ best estimate of
the build schedule as of the date of approving the Financial
Statements. Should it not, there are mitigating actions
management can take to generate additional liquidity if
necessary which, whilst not entirely within the Board’s control
as there is a reliance on the market, includes disposing of
one or more of the assets as part of the strategic review
considerations.
The Board announced a strategic review on 14 March 2025 to
consider the future of the Group and to explore all strategic
options available to maximise value for shareholders, which
may include a potential sale or a managed wind down.
The Board acknowledges the challenges and significant
headwinds that the Group has faced since IPO, in common
with the wider REIT sector, including higher inflation and
elevated interest rates which have driven a fundamental
slowdown in leasing activity and negatively impacted investor
sentiment. These factors, coupled with the Group's size and
low levels of liquidity have led to an under performance of
the share price, which has, as a result, traded at a significant
discount to net asset value for a prolonged period of time.
This announcement leads to uncertainty over the ownership,
size and scale of the total asset portfolio and the debt
facility that may be needed at the June 2026 refinancing
date. Under the base case, the Directors have a reasonable
expectation that the Group and the Company would have
adequate resources to continue in business for a period of
at least 12 months from the date of approval of the Annual
Report and Financial Statements, given facility headroom
and liquidity remain available. However, the strategic review
announcement in particular leads the Directors to believe that
there exists a material uncertainty that may cast significant
doubt over the Group’s ability to continue to be in operation
for at least the next 12 months, even at the base case.
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59
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Assessment of viability
In accordance with the AIC Code of Corporate Governance,
the Directors would ordinarily have assessed the Group’s
prospects over a period greater than the 12 months
considered by the going concern provision. However,
following the strategic review announcement, this results in
a level of uncertainty for the long-term future of the business.
The Directors have therefore deemed the viability period to
be aligned with the going concern period of 12 months from
the date of this report.
The principal risks detailed on pages 50 to 58 summarise
the matters that could prevent the Group from delivering its
strategy. The Board seeks to ensure that risks are kept to a
minimum at all times and, where appropriate, the potential
impact of such risks is modelled within its viability assessment.
The Group’s investment portfolio acquired to date delivers the
intended investment strategy of a diversified portfolio located
within the Golden Triangle of Oxford, Cambridge and London
located near major universities, hospitals and public and
commercial organisations, where there is a shortage of high-
quality real estate space to support expanding life science
businesses. This is expected to lead to low vacancy rates and
further rental and capital growth.
The Directors’ assessment takes into account forecast
cash flows, debt availability, forecast covenant compliance,
dividend cover and REIT compliance. The model is then stress
tested for severe but plausible scenarios, individually and in
aggregate, along with consideration of potential mitigating
factors. The key sensitivities applied to the model are a
downturn in economic outlook and restricted availability of
finance, specifically; increased occupier turnover; increased
void costs; increased interest rates; and reduced disposal
proceeds.
Taking into account mitigating actions, the results of the
sensitivity analysis and stress testing demonstrated that the
Group would have sufficient liquidity to meet its ongoing
liabilities as they fall due, maintain compliance with banking
covenants and maintain compliance with the REIT regime over
the period of the assessment.
Furthermore, the Board, in conjunction with the Audit and
Risk Committee, carried out a robust assessment of the
principal risks and uncertainties facing the Group, including
those that would threaten its business model, strategy,
future performance, solvency or liquidity over the 12 month
period being assessed. The risk review process provided the
Board with assurance that the mitigations and management
systems are operating as intended. The Board believes that
the Group is well positioned to manage its principal risks and
uncertainties and the economic and political environment.
The Board’s expectation is further supported by regular
briefings provided by the Investment Adviser. These briefings
consider market conditions, opportunities, changes in the
regulatory landscape and the current economic and political
risks and uncertainties. These risks, and other potential
risks which may arise, continue to be closely monitored by
the Board.
Viability statement
The period over which the Directors consider it is feasible and
appropriate to report on the Group’s viability has been aligned
with the 12 month going concern period following the strategic
review announcement on 14 March 2025.
The Directors confirm that, taking account of the Group’s
current position and the principal risks set out in the strategic
report, they have a reasonable expectation that the Group and
the Company would have adequate resources to continue
in business for a period of at least 12 months from the date
of approval of the Annual Report and Financial Statements.
However, the strategic review announcement in particular
leads the Directors to believe that there exists a material
uncertainty that may cast significant doubt over the Group's
ability to continue to be in operation for at least the next 12
months.
On behalf of the Board
Claire Boyle | Chair
15 April 2025
GOING CONCERN AND
VIABILITY STATEMENT
60
Life Science REIT plc
Annual Report and Financial Statements 2024
60
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
61
Life Science REIT plc
Annual Report and Financial Statements 2024
61
STRATEGIC REPORT
Female: 2
Male: 2
Balance of
Directors
Read the
Board
biographies
on page
62 and 63
• Results roadshows, investor conferences and private
client lunch
• Occupier survey covering 75% of our occupier base
• Face to face meetings on ESG matters with 37% of
our occupiers
• Supporting local communities through asset tours,
volunteering and charitable donations
This page demonstrates the key aspects and activities of Life Science REIT plc during 2024 and its priorities for 2025.
Highlights of stakeholder engagement
Key Board activities during the year
Board priority for 2025
On 14 March 2025, the Board announced the commencement of a Strategic Review whereby it is considering the future of the
Group and exploring all strategic options available to maximise value for shareholders. This is the immediate priority at the date
of this report.
GOVERNANCE AT A GLANCE
Skills and experience
Investment trust/REIT
Listed company
Corporate finance
Financial regulation
Risk management
Audit/accounting
Strategic thinking
Stakeholder engagement
Environmental, social
and governance
Independence
Investor relations
Number of Directors
0
1
2
3
4
Key Board statistics
• Strategy day
• Approval of full year 2023 results
• Approval of two interim dividends
• Approval of half year 2024 results
• Appointment of FTI as PR advisers
• Approval of 2025 Budget
62
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Annual Report and Financial Statements 2024
62
CHAIR’S INTRODUCTION
TO GOVERNANCE
On behalf of the Board, I am pleased to present the Corporate
Governance report for 2024. This report demonstrates
the importance of governance to the Board and how the
Company has complied with the Association of Investment
Companies Corporate Governance Code (“AIC Code”). A key
part of the Company’s corporate governance arrangements
is that Board decision making takes into consideration the
impact on the Company’s stakeholders and performance over
the longer term. This is supported by having a clear strategy,
investment policy and schedule of matters reserved for the
Board (see section 172 (1) statement on page 16).
Under the UK Listing Rules, the Company is required to
comply with the UK Code of Corporate Governance (the “UK
Code”) issued by the Financial Reporting Council. However, as
an externally managed investment company, it is recognised
that some of the provisions of the AIC Code provide more
relevant information to shareholders. The AIC Code is aligned
with the UK Code, and sets out additional provisions on issues
that are of specific relevance to listed investment companies
(see page 66).
Key highlights during 2024 included regular Committee
meetings, the approval of Board and Company policies, a
review of the skills and diversity of the Board, the monitoring
of progress against the Group’s sustainability strategy and
Pathway to Net Zero, the holding of a separate strategy
day and the continued review of the life science and real
estate sectors.
Following the publication of the revised UK Code in January
2024, the Board welcomed the amended AIC Code published
in August 2024, which carries over the majority of provisions,
particularly those provisions addressing the importance of
evidencing the effectiveness of internal controls. The AIC
Code applies to accounting periods beginning on, or after,
1 January 2025 with the exception of provision 29 (internal
controls), which will apply for reporting periods on or after,
1 January 2026. The Board looks forward to reporting against
the updated AIC Code in subsequent Annual Reports.
The Board’s immediate priority as at the date of this report
is the Strategic Review of the Group. As announced to the
market on 14 March 2025 the Board will consider all available
options to maximise value for shareholders.
Claire Boyle | Chair and Non-Executive Director
15 April 2025
This report demonstrates the importance
of Governance to the Board and how the
Company has ensured compliance with the
AIC Code.
Claire Boyle | Chair and Non-Executive Director
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
CLAIRE BOYLE
RICHARD HOWELL
Chair of the Board of Directors
Senior Independent Director;
Chair of the Audit and Risk Committee
N
A
M
S
R
N
A
M
S
R
Appointed:
14 October 2021
Last re-elected:
2024
Remuneration:
£55,000
Shareholding:
30,000
Appointed:
3 May 2022
Last re-elected:
2024
Remuneration:
£45,000
Shareholding:
30,000
External appointments
Claire is a Non-Executive Director and Chair of the Audit
Committee of Fidelity Special Values plc and a Non-Executive
Director of The Monks Investment Trust and Nippon Active
Value Fund plc.
Experience and contribution
Claire has over 20 years’ experience working in financial
services and investment management; qualifying as a
chartered accountant with Coopers and Lybrand, where she
specialised in litigation support and forensic accounting.
Claire then spent 13 years working in equity investment
management for Robert Fleming Investment Management,
American Express Asset Management and, latterly, Oxburgh
Partners, where she was a partner with responsibility for
their European Hedge Fund. Claire has a degree in Natural
Sciences from Durham University and is a Fellow of the
Institute of Chartered Accountants in England and Wales.
External appointments
Richard is the Chief Financial Officer (“CFO”) of
Primary Health Properties PLC.
Experience and contribution
Richard is CFO of Primary Health Properties plc, the FTSE
250 REIT and leading investor in flexible, modern primary
healthcare accommodation across the UK and Ireland.
Richard is a Chartered Accountant and has over 25 years’
experience working with London-listed commercial property
companies, gained principally with LondonMetric Property plc
and Brixton plc. Richard was part of the senior management
team that led the merger of Metric Property Investments plc
and London & Stamford Property Plc in 2013 to create
LondonMetric Property plc with a combined property portfolio
of £1.4 billion.
The Board consists solely of independent Non-Executive Directors. During the year under review,
there were no changes to the Directors.
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64
MICHAEL TAYLOR
DR SALLY ANN FORSYTH OBE
Non-Executive Director; Chair of the Management
Engagement and Remuneration Committees
Non-Executive Director; Chair of the Nomination
and Sustainability Committees
N
A
M
S
R
N
A
M
S
R
Appointed:
14 October 2021
Last re-elected:
2024
Remuneration:
£40,000
Shareholding:
20,000
Appointed:
14 October 2021
Last re-elected:
2024
Remuneration:
£40,000
Shareholding:
20,342
External appointments
Mike is a Director for the British Heart Foundation Shops
Limited and the British Heart Foundation Ventures Limited.
Experience and contribution
Mike is the Commercial Director for the British Heart
Foundation (“BHF”), which is the largest funder of life science
research into heart and cardio-vascular disease in the UK.
Since joining the BHF in 2012, he has overseen significant
growth and diversification of its commercial revenues across
the extensive retail estate of c. 700 retail shops, new online
channels and commercial health ventures.
Prior to joining the BHF, he spent over 20 years working in
senior roles in a wide range of major retailers with significant
retail, logistic and office property portfolios, and has been
Managing Director of a number of national retailers including
Budgens, Londis and Whittard. Mike has a degree in
Economics from the University of East Anglia.
External appointments
Sally Ann is the Chief Executive Officer (“CEO”) at Stevenage
Bioscience Catalyst Ltd and a Director of Local Enterprise
Partnership Hertfordshire.
Experience and contribution
Sally Ann is CEO of the Stevenage Bioscience Catalyst and
is a pioneer of the Life Science real estate industry with 16
years of experience in the delivery of outstanding science
parks. She has been responsible for the strategy, growth
and development of four internationally recognised clusters,
including Harwell Oxford, Colworth Science Park, Norwich
Research Park and, most recently, Stevenage Bioscience
Catalyst, where she is CEO.
She began her career with Unilever, where she had lead
responsibility for scientific Strategic Alliances and Open
Innovation and gained an insight into the needs of growing
companies as part of the founding team of Unilever Ventures.
She gained her property experience through Goodman
International, where she was Director of Science Parks
responsible for the development and management of their
UK portfolio.
She has a PhD in molecular biology from the University of
Cambridge, a certificate in Real Estate Economics and Finance
from LSE, and is a qualified management accountant (CGMA).
She was awarded an OBE for services to Business and Science
in 2021, was named by Cranfield School of Management as
one of the Women to Watch 2022 and, in 2023, was awarded
an Honorary Doctorate from the University of Hertfordshire in
recognition of her lifetime achievements in science.
Committee key
N
Nomination Committee
S
Sustainability Committee
A
Audit and Risk Committee
R
Remuneration Committee
M
Management Engagement Committee
Chair of the Committee
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
Statement of compliance
The Board has considered the principles and provisions of
the AIC Code. The AIC Code addresses the provisions set out
in the UK Corporate Governance Code as published by the
Financial Reporting Council (the “UK Corporate Governance
Code”), as well as setting out additional provisions on issues
that are of specific relevance to listed investment companies.
The Board considers that reporting against the principles and
recommendations of the AIC Code will provide more relevant
information to its shareholders.
Throughout the year ended 31 December 2024, the Company
has complied with the principles and provisions of the
relevant provisions of the UK Code, except as set out below.
The UK Code includes provisions relating to the role of the
Chief Executive, Executive Directors’ remuneration and the
need for an internal audit function. As an externally managed
investment company with no Executive Directors, employees
or internal operations, all of the Group’s ongoing management
and administration functions are delegated to the Investment
Adviser and other service providers, and, as such, the Board
does not consider that the above provisions are relevant. We
have, therefore, not reported further on these provisions.
The Board undertakes an annual review of its compliance with
the principles and recommendations of the AIC Code. A copy
of the AIC Code, which was last updated in 2024, can be
obtained via the AIC website,
theaic.co.uk
. The table to the
right details a summary of the AIC Code Principles and where
they are reviewed in this Corporate Governance Statement.
This report explains the key features of the Group’s governance structure.
AIC Code Principle
Page
1
Board leadership and purpose
A: 67
B: 67
C: 68
D: 68
2
Division of responsibilities
F: 70
G: 70
H: 71
I: 72
3
Composition, succession
and evaluation
J: 73
K: 73
L: 73
4
Audit, risk and internal control
M: 73
N: 73
O: 73
5
Remuneration
P: 75
Q: 75
R: 75
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Effectiveness of the Board
The Board ensures that the necessary resources are in place
for the Group to meet its objectives and fulfil its obligations
to shareholders within a framework of high standards of
corporate governance and effective internal controls. The
Directors are responsible for the determination of the
Company’s investment policy and strategy and have the
overall responsibility for the Group’s activities, including the
control and supervision of the AIFM and Investment Adviser.
The Chair leads the Board and is responsible for its overall
effectiveness in directing the Group in delivering on its
strategy. By demonstrating objective judgement, the Chair
promotes a culture of openness and debate and facilitates
effective contributions from all Directors. In liaison with the
Company Secretary, the Chair ensures that the Directors
receive accurate, timely and clear information. The Directors
are required to act with integrity, lead by example and
promote this culture within the Group.
Purpose, values and strategy
The Group’s purpose is to own and manage life sciences
real estate across the UK, providing the space its occupiers
need for their businesses to thrive. Further information about
the purpose and strategy of the Group can be found in the
strategic report on pages 1 to 59. The Board regularly reviews
the strategy of the Company through reporting from relevant
advisers at Board and Committee meetings and engagement
with stakeholders to ensure it remains appropriate and in the
best interests of the shareholders. The Board seeks to ensure
the alignment of the Group’s purpose, values and strategy
with the culture of openness, debate and integrity through
ongoing dialogue and engagement with the AIFM, Investment
Adviser and the Group’s other service providers.
The culture of the Board is considered as part of the annual
performance evaluation process undertaken by each
Director. The culture of the Group’s service providers is also
considered by the Management Engagement Committee
during the annual review of their performance and whilst
considering their continued appointment by the Board. This
includes assessing their approach to significant ethical issues
such as modern slavery. The Company’s Modern Slavery
Statement is available at
lifesciencereit.co.uk
.
The approval of the strategy and overseeing its
implementation is one of the Board’s core responsibilities. The
table on the next page details the Board’s activities in respect
of each element of the Group’s strategic areas.
BOARD LEADERSHIP AND PURPOSE
1
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
CONTINUED
BOARD LEADERSHIP AND PURPOSE
CONTINUED
1
Strategic area
Strategic area
Strategic area
Strategic area
INVESTMENT
STRATEGY
ASSET
MANAGEMENT
STRATEGY
FINANCING
STRATEGY
SUSTAINABILITY
STRATEGY
Board governance role
• Overseeing the selection
of acquisitions, against
the backdrop of current
market and economic
conditions
• Approving acquisitions,
which are within the
investment policy but
have a value of 20% or
more of the Group’s GAV
• Approving any
acquisitions outside the
investment policy
Board governance role
• Overseeing the portfolio
• Overseeing the
Investment Adviser’s
asset management
activities
Board governance role
• Approving any changes
to the Group’s capital
structure
• Approving the Group’s
gearing policy, dividend
policy and treasury policy
• Approving disposals of
20% or more of the GAV
of the Group’s portfolio
• Approving any
disposals outside the
investment policy
Board governance role
• Approving the
sustainability policy
and strategy
• Monitoring progress
in delivering the
sustainability strategy
Board key activities
during the year
• Reviewed market
updates and key
transactions in the sector
each quarter
Board key activities
during the year
• Reviewed quarterly
portfolio updates from
the Investment Adviser,
including lease events,
capital expenditure
works and development
updates
• Approved the
annual budget for
the year ended
31 December 2025
• Read more about asset
management during the
year in the Investment
Adviser’s report on
page 29
Board key activities
during the year
• Monitored the Group’s
debt levels and interest
rate hedging
• Approval to rebase
dividend and payments
of two interim dividends
during the year
• Read more about
financing activity
during the year in the
Investment Adviser’s
report on page 32
Board key activities
during the year
• Ongoing review and
monitoring of the
sustainability strategy
and policy
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68
Conflicts of interest
The Articles of Association permit the Board to consider and,
if it deems fit, to authorise situations where a Director has
an interest that conflicts, or may possibly conflict, with the
Group’s interests. The Board has a formal system to consider
such conflicts, with the Directors who have no interest in the
matter deciding whether to authorise the conflict and any
conditions to attach to such authorisation. Any such conflicted
Director would not be present during Board discussions
regarding the conflicting matter to ensure that the debate
remains unbiased and objective. A register of potential
conflicts of interest is maintained by the Company Secretary
and presented for information at each Board meeting. As at
15 April 2025, being the latest practicable date of this report,
no such conflicts were identified.
Performance review
The Board and the Management Engagement Committee
regularly review the performance of the Company and the
performance and resources of the Investment Adviser and
other service providers to ensure that the Company can
continue to meet its investment objective. The Audit and
Risk Committee is responsible for assessing and managing
risks and the Company has engaged a third-party internal
audit function. Further information about how this is done
can be found in the Audit and Risk Committee Report on
pages 79 to 81.
Shareholders and stakeholders
Communication with shareholders is a high priority for both
the Board and the Investment Adviser, and the Directors are
available to discuss the Group’s progress and performance
with shareholders. The Investment Adviser, in conjunction with
its Corporate Broker, Panmure Liberum, are in regular contact
with the major institutional investors and regularly report the
results of meetings and the views of those shareholders to
the Board. The Chair and the other Directors are available to
attend these meetings with shareholders if required.
All shareholders are encouraged to attend and vote at
the AGM, during which the Chair of the Board, the Chair
of each respective Committee, the Board as a whole and
representatives of the Investment Adviser will be available to
discuss issues affecting the Group and answer any questions.
Shareholders wishing to communicate directly with the
Board, or to lodge a question in advance of the AGM, should
contact the Company Secretary at the address on the inner
back cover. The Company makes sure to always respond to
correspondence from its shareholders.
For more information on the Group’s approach to stakeholder
engagement, see pages 14 and 15 of the strategic report.
The Board and its advisers will prepare the Group’s
Annual and Half-yearly Reports to present a full and readily
understandable review of the Group’s performance.
Copies will be released through a Regulatory News
Service, dispatched to shareholders depending on their
communication preference and made available from the
Company Secretary or by downloading from the Company’s
website at
lifesciencereit.co.uk.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
Board
Nomination
Chair:
Sally Ann Forsyth
Audit and Risk
Chair:
Richard Howell
Management
Engagement
Chair:
Mike Taylor
Sustainability
Chair:
Sally Ann Forsyth
Remuneration
Chair:
Mike Taylor
CORPORATE GOVERNANCE STATEMENT
CONTINUED
DIVISION OF RESPONSIBILITIES
2
Governance structure
As an externally managed investment trust, the Company has no employees, and the Board relies on third parties to administer
the Company and provide investment management services. The below diagram demonstrates the Company’s governance
structure and how responsibilities are divided.
Board composition
The Chair, Claire Boyle, and the Senior Independent Director,
Richard Howell, were deemed by their fellow independent
Board members to have been independent on appointment
and to have no conflicting relationships.
The role and responsibilities of the Chair are outlined on
page 81 and are clearly defined and set out in writing.
A copy of which is available on the Group’s website at
lifesciencereit.co.uk
. The Senior Independent Director acts
as a sounding board for the Chair and as an intermediary
for other Directors when necessary. He leads the annual
appraisal of the Chair’s performance, takes responsibility
for an orderly succession process and is also available to
shareholders to discuss any concerns they may have.
All of the Directors are Non-Executive and are independent
of the Investment Adviser and the other service providers.
The Chair was independent of the Investment Adviser
at the time of her appointment and remains so. The
Nomination Committee met once during the year and
considered the composition and mix of skills of the Board,
and succession planning. The Board evaluation concluded
that each Director provides a valuable contribution to Board
meeting discussions and exercises appropriate levels of
challenge and debate.
As part of the Board evaluation process, the contributions
of each Director, as well as the time commitments made by
each Board member, are considered and reviewed. Directors’
other commitments are regularly reviewed and any new
appointments are considered by the other Directors to ensure
there is no conflict of interest or risk of ‘over boarding’.
Board operation
The Directors meet at regular Board meetings, including one
strategy day, held at least four times a year, with additional
meetings arranged as necessary. The Directors are given a
week to review papers before each Board and Committee
meeting. Board members are notified between meetings of
any material events, including, but not limited to, significant
transactions, litigation, mergers and acquisitions, and changes
in capital structure.
Shareholders
Investment Adviser and AIFM
Other third-party service providers
Page 76
Page 79
Page 82
Page 83
Page 84
The Committees’ terms of reference
are available on the Company’s
website at
lifesciencereit.co.uk.
Members: all Non-Executive Directors
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Annual Report and Financial Statements 2024
70
There is regular contact between Board members and the Investment Adviser, in addition to the formal Board meetings.
The table below sets out the Directors’ attendance at both regular and ad hoc Board and Committee meetings during the year
ended 31 December 2024, against the number of meetings each Board member was eligible to attend:
Board
Audit and Risk
Committee
Management
Engagement
Committee
Nomination
Committee
2
Remuneration
Committee
Sustainability
Committee
2
Claire Boyle
4/4
3/3
1/1
1/1
1/1
2/2
Sally Ann Forsyth
1
2/4
1/3
1/1
0/1
0/1
1/2
Michael Taylor
4/4
3/3
1/1
1/1
1/1
2/2
Richard Howell
4/4
3/3
1/1
1/1
1/1
2/2
1
Attendance in 2024 has been impacted by ill health. The Board is satisfied that Sally Ann Forsyth is not over-boarded and can devote the time required for
the role.
2
In the absence of Sally Ann Forsyth, Claire Boyle chaired the Nomination Committee and Sustainability Committee meetings.
The Board has formal arrangements for the Directors, in the furtherance of their duties, to take independent professional advice
at the Company’s expense. The Company has also taken out a Directors’ and Officers’ liability insurance policy, which is referred
to on page 90.
Key Board activities during the year
At each quarterly Board meeting, a report from both the AIFM and the Investment Adviser is reviewed. The AIFM report includes
updates on regulation, portfolio management and risk management, fund reporting and general compliance. The AIFM provides
a separate quarterly Money Laundering and Reporting Officer report.
The Investment Adviser’s report includes details of portfolio activity, the pipeline, occupiers, strategic activity and health and
safety matters. Updates from finance and investor relations are also provided.
The Board receives and reviews a quarterly share register analysis, as well as a report from the Company Secretary including
regulatory and governance updates.
Q1 2024
Q2 2024
Q3 2024
Q4 2024
• Strategy day
• Updates from
Management
Engagement
Committee and
Audit and Risk
Committee Chairs
• Approval of Annual
Report and Financial
Statements for
the year ended
31 December 2023
• Approval of second
interim 2023 dividend
• Update from the
Sustainability
Committee Chair
• Approval of Supplier
Code of Conduct
Policy, Board Diversity
Policy and Anti-Tax
Evasion Policy
• Update from the
Depository
• Annual General
Meeting
• Approval of 2024
Interim Report
• Approval of first
interim 2024 dividend
• Approval of Directors’
and Officers’ liability
insurance
• Financial year 2025
budget approval
• Updates from
the Audit and
Risk Committee,
Nomination
Committee,
Remuneration
Committee and
Sustainability
Committee
• Update from the
Depository
Board responsibilities and relationship with the Investment Adviser
The Board’s main roles are to lead the Group and ensure its long-term sustainable success, generating value for shareholders
and contributing to wider society, and to approve the Group’s purpose, values and strategic objectives, and satisfy itself that
these and its culture are aligned.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
CONTINUED
The Board annually maintains and reviews its schedule of
matters reserved for the Board of Directors, which details its
specific responsibilities, which include:
• approving the Group’s investment and business strategy;
• approving the gearing policy;
• overseeing cash management;
• approving the Annual and Interim Reports and Financial
Statements and accounting policies, prospectuses, circulars
and other shareholder communications;
• approving acquisitions and disposals that are within the
investment policy but have a value of 20% or more of
the GAV of the Group’s portfolio, and any acquisitions or
disposals outside the investment policy;
• raising new capital and approving major financing facilities;
• approving the valuation of the Group’s portfolio;
• approving and recommending dividends;
• approving Board appointments and removals;
• appointing or removing the Group’s external Auditor
following the recommendation of the Audit and Risk
Committee;
• appointing or removing the AIFM, Investment Adviser,
Depositary, Auditor, Company Secretary and other
service providers following the recommendation of the
Management Engagement Committee; and
• ensuring a satisfactory dialogue with shareholders and
other key stakeholders.
A copy of the schedule of matters reserved for the Board
of Directors is available on the Company’s website at
lifesciencereit.co.uk
.
The Board has delegated its day-to-day functions to a number
of service providers, each engaged under separate legal
agreements. In particular, portfolio management and risk
management of the Group’s assets has been delegated to the
AIFM. The Management Engagement Committee reviews the
performance and cost of the Company’s third-party service
providers on an annual basis. More information regarding the
work of the Management Engagement Committee can be
found on page 82.
The Investment Adviser provides recommendations to the
AIFM’s Investment Committee. These recommendations
cover acquisitions and sales of Group assets (where this
would be in line with the Group’s objectives and investment
policy), and recommendations on where the Group should
incur borrowings and give guarantees and securities (subject
to certain investment restrictions imposed by the Board and
the Board’s overall control and supervision). The Board, the
AIFM and the Investment Adviser operate a fully supportive,
co-operative and open environment.
At each Board meeting, the Directors follow a formal agenda,
which is circulated in advance by the Company Secretary
following its approval by the Chair. The Company Secretary
and Investment Adviser regularly provide financial information,
together with briefing notes and papers in relation to changes
in the Group’s economic and financial environment, statutory
and regulatory changes and corporate governance best
practice to the Board. Representatives from the Investment
Adviser and the AIFM attend each Board meeting and
communicate with the Board between formal meetings.
Election/re-election of Directors
Under the Company’s Articles of Association, Directors
are required to stand for election at the first AGM after
their appointment and each AGM thereafter for re-election.
Therefore, as stated above and in accordance with the
AIC Code, each Director will stand for re-election at the
forthcoming AGM. The Board considers that both during
the year ended 31 December 2024, and from the end of
the year to 15 April 2025, being the latest practicable date
of this report, each Director has performed effectively and
demonstrated excellent commitment to their role at this
early and important stage of the Company’s development.
It therefore, believes that it is in the best interests of
shareholders that each Director is re-elected at the AGM.
Company Secretary
The Board has direct access to the advice and services
of the Company Secretary, MUFG Corporate Governance
Limited, which is responsible for ensuring that the Board and
Committee procedures are followed and that applicable rules
and regulations are complied with. The Company Secretary is
also responsible to the Board for ensuring timely delivery of
information and reports, and for ensuring the Company meets
its statutory obligations.
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72
COMPOSITION, SUCCESSION AND EVALUATION
3
Board appointments
The Board has established a Nomination Committee,
comprising all of the independent Directors. This Committee
will lead the appointment process of new Directors as and
when vacancies arise and as part of the Directors’ ongoing
succession plans. More information regarding the work of the
Nomination Committee can be found on page 76.
The Board has adopted a diversity policy, which
acknowledges the benefits of greater diversity and remains
committed to ensuring that the Company’s Directors bring a
wide range of skills, knowledge, experience, backgrounds
and perspectives to the Board.
None of the Directors have a service contract. Letters of
appointment set out the terms of their appointment and
copies are available on request from the Company Secretary
at
labs_cosec@cm.mpms.mufg.com
and will be available at
the AGM. The Directors are not entitled to any compensation
for loss of office.
Board skills, experience and knowledge
The Directors’ biographical details are set out on pages 64 to
63 of this Report. These demonstrate the wide range of skills
and experience that they bring to the Board. The Nomination
Committee is responsible for identifying and recommending to
the Board the appointment of new Directors and considering
long-term succession plans.
Board skills matrix
For more details of the Board’s composition and skills,
please see page 62.
Annual evaluation of the Board
The Directors consider the evaluation of the Board, its
committees, the Chair and themselves to be an integral part
of the Company’s governance framework and evaluations are
undertaken annually.
For the year under review, this was carried out by way of a
questionnaire, which covered the functioning of the Board as
a whole, the effectiveness of each the Board Committees and
the independence and contribution made by each Director
and the Chair. The Nomination Committee reported the results
from the evaluations to the Board. Following this review, the
Board is satisfied that the structure, mix of skills and operation
of the Board is effective and relevant for the Company. Further
detail on the outcomes of the Board and Board Committees
evaluation can be found in the Nomination Committee report
on page 76.
The individual performance of each Director standing for
election has been evaluated and it is recommended that
shareholders vote in favour of their re-election at the AGM.
Directors are subject to annual re-election by shareholders
and, accordingly, all Directors will submit themselves for
re-election by shareholders at the forthcoming Annual General
Meeting. More information regarding the proposed election of
each Director can be found on page 72.
AUDIT, RISK AND INTERNAL CONTROL
4
External audit
The Group is subject to an annual audit of its consolidated
financial statements and its component entities by its external
Auditor, Deloitte LLP. The Group produces its consolidated
financial statements in accordance with IFRS.
The Audit and Risk Committee supports the Board by
reviewing the performance of the external Auditor, audit
quality, and the Auditor’s objectivity and independence. In
addition, the Audit and Risk Committee reviews the integrity
and content of these financial statements, the half year
financial statements and the ongoing viability of the Company.
Fair, balanced and understandable assessment
The Audit and Risk Committee has considered the 2024
Annual Report and Accounts as a whole and believes that
the document presents a fair, balanced and understandable
assessment of the Company’s position and prospects.
In particular, the Committee has considered the language
used in the document to ensure technical terminology is
avoided to the extent possible, or, where used, it is suitably
explained. For further details, see pages 79 to 81.
Risk management
The Group has a Risk Management Framework, managed by
our third party risk consultant, AuditR, which is approved by
the Board and subject to annual review (as a minimum) by the
Audit and Risk Committee. A detailed risk register has been
compiled, identifying key risks and mitigations, and evaluating
the exposure for each risk, using a standardised evaluation
matrix. The Investment Adviser regularly reviews the risk
register, and it is provided to the Audit and Risk Committee
for discussion at each meeting. The framework is included on
page 50 of the strategic report.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE STATEMENT
CONTINUED
Principal and emerging risks
The principal and emerging risks that the Board has identified
are set out on pages 50 to 58.
Internal controls
The Directors are responsible for the Group’s system of
internal control and for reviewing its effectiveness.
Internal control systems are designed to manage, but not
eliminate, the risk of failure of the Group to meet its business
objective, and, as such, only provide reasonable, but not
absolute assurance against material misstatement or loss.
The key components designed to provide effective internal
control are outlined below:
• The Group has a clearly defined organisational structure.
• The Group has policies and procedures for internal controls
of key matters, including a Whistleblowing Policy and
Anti-Bribery and Corruption Policy.
• An annual budgeting process is in place.
• Detailed quarterly reporting occurs.
• At least annually, the Board conducts a review of the
effectiveness of the Group’s internal controls, covering all
material controls.
• The Directors actively respond to any external audit
recommendations on internal control deficiencies and
demonstrate how they are actioned. A follow-up process
is in place for actions arising from audits and the risk
management process, which ensures that actions are
implemented effectively.
• A delegated authority matrix has been developed to cover
key commercial and financial activities, investment and
disposal transactions, and the management of disputes or
legal challenges.
• The Directors have documented key controls, which
mitigate risk of inaccurate reporting.
The Audit and Risk Committee undertakes the annual review
of the effectiveness of internal controls and reports the results
of this to the Board for consideration. The Audit and Risk
Committee also receives reports from the Investment Adviser,
AIFM and the external Auditor concerning the system of
internal control and any material control weaknesses. It may
also seek external reviews and advice. Any significant issues
identified are referred to the Board for consideration. Where
any material control deficiencies are identified, remedial
actions are agreed and implemented, and the Board is
updated on its progress.
The Audit and Risk Committee reviews reports from the
principal service providers on compliance and the internal
and financial control systems in operation and relevant
independent audit reports thereon.
The Audit and Risk Committee regularly reviews the
Company’s internal controls through regular reporting,
including reviewing the Group’s risk register, risk appetite
statement and internal audits undertaken during the quarter.
Further information regarding the work of the Audit and Risk
Committee can be found on pages 79 to 81.
Segregation of duties and authorisation limits
As occurs with other organisations of its size and which
have a similar business, the Group faces challenges in
implementing segregation of duties. The Group operates an
outsourced model of suppliers and has no direct employees.
The Group has considered the risk around segregation of
duties within the processing of payments and transactions,
and has identified, and put in place, a delegated authority
matrix for acquisitions, disposals, property and occupier
related activities and capital expenditure.
In addition, the following authorisation controls are in place for
the processing of payments:
• The payments themselves are made by the Administrator
of the Group, based upon the approvals received from the
Investment Adviser, with a primary authorised signatory and
secondary authorised signatories.
• Each payment or transaction is signed off by one signatory,
up to a total of £100,000. Payments or transactions above
this figure require authorisation by two signatories and to
be in line with the Group’s delegated authority matrix and
acquisition/disposal protocols (as applicable) as approved
by the Board.
• The Administrator has a clearly defined set of processes
in place to manage payment risks. It produces an ISAE
3402 controls report to the Investment Adviser, providing
assurance over the adequacy and operation of key
controls.
Internal audit
The Group is not considered sufficient in size or complexity
to warrant the establishment of an internal audit function.
The Audit and Risk Committee reviews the requirement for
an internal audit function at least annually. If that threshold
has been attained, the Audit and Risk Committee will
approach the Board of Directors to request approval for the
establishment or outsource of an internal audit function.
Equally, if the Group’s Investment Adviser or AIFM determines
that it is appropriate to establish an internal audit function,
they will approach the Board of Directors for approval to
establish, or outsource, an internal audit function.
To gain assurance over the control environment of the Group
without an internal audit function, the Group, via AuditR,
has regular informal contact with the Investment Adviser, in
conjunction with a third-party risk and internal audit adviser,
will review Board papers, which are received in a timely
manner, seek information from the external Auditor, review the
risk register and progress with any actions arising.
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REMUNERATION
5
The Board has established a Remuneration Committee,
comprising all the independent Directors.
The Company has no employees other than its Directors,
who are all Non-Executive and independent of the Investment
Adviser. The remuneration of the Directors is determined
within the limits set out within the Company’s Articles of
Association and the total aggregate annual fees payable
to the Directors in respect of any financial period shall not
exceed £400,000.
The Company Secretary provides a comparison of the
Directors’ remuneration with other investment trusts of similar
size and/or mandate.
This comparison, together with consideration of any change
in Non-Executive Directors’ responsibilities, is used to review,
annually, whether any change in remuneration is appropriate.
More information regarding the work of the Remuneration
Committee can be found in the Remuneration Report on
pages 84 to 87.
Whistleblowing
The Group has no employees, being wholly supported by
third-party service providers. However, it has a Whistleblowing
Policy setting out the procedures that any third party could
follow to raise any concerns. Third-party service providers are
expected to comply with all the relevant laws and regulations
as a contractual requirement, and adequate whistleblowing
procedures are included within that expectation. In particular,
the Investment Adviser Whistleblowing Policy offers staff, or
others raising concerns, the opportunity to raise them directly
with the Chair of the Group.
Insider information and Market Abuse Regulation
The Company has an Insider Dealing Policy and a Share
Dealing Protocol. The Board and the Investment Adviser are
responsible for ensuring that information is properly assessed
to ascertain whether it is market sensitive, and advice is
sought in complex areas.
The Company Secretary is responsible for ensuring that
open and closed periods are recognised and communicated
to all PDMRs and insiders of the Company. In accordance
with the Share Dealing Protocol, all share dealings for both
Directors of the Company and employees of the Investment
Adviser, deemed to be persons discharging managerial
responsibilities, must be approved in advance.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
NOMINATION COMMITTEE REPORT
Furthermore, the Committee is responsible for making
recommendations to the Board on succession planning for
Non-Executive Directors, the role of the Senior Independent
Director, Directors’ re-election, committee memberships, and
the reappointment of Non-Executive Directors.
Tenure
In accordance with the AIC Code, the Directors were
required to retire at the first AGM following their appointment.
Thereafter, at each AGM, all Directors, including the Chair of
the Board, will seek annual re-election. The Board has not
stipulated a maximum term of any directorship, except that
subject to ensuring business continuity, all Non-Executive
Directors will remain on the Board for a maximum period
of nine years in accordance with the AIC Code. At the
23 May 2024 AGM, all Directors were re-elected. The next
AGM is scheduled for 3 June 2025.
Diversity, inclusion and succession planning
In accordance with the AIC Code, the Board is comprised of
a group of individuals who have an appropriate balance of
skills and experience to meet the future opportunities and
challenges facing the Group. Appointments are made first
and foremost on the basis of merit and taking into account
the recognised benefits of all types of diversity. The Board
ensures that diversity is an important consideration and part
of the selection criteria used to assess candidates to achieve
a balanced Board.
The FCA has introduced ‘comply or explain’ targets that at
least 40% of the Board should be women, that at least one
of the senior Board positions should be held by a woman,
and that at least one member of the Board should be from a
minority ethnic background.
At the year end, 50% of the Board were women and Claire
Boyle was the Chair; therefore, the Company meets the first
two of these targets.
Introduction and composition of the Committee
The Committee is comprised of all the Directors of the
Company and in the absence of Sally Ann Forsyth was
chaired by Claire Boyle. The Committee met once during the
year with the Committee’s key responsibilities being to assist
the Board in reviewing the skills, diversity and composition of
the Board and its Committees, taking into consideration the
guiding principles from the AIC Code and UK Listing Rules.
Role of the Nomination Committee
The Committee’s primary responsibilities include:
• regular review of the Board’s structure and composition;
• preparing policies for the tenure of the Chair and the Board,
and succession planning for the Directors;
• staying informed about strategic issues and
market changes;
• identifying and nominating candidates for Board vacancies;
• ensuring diversity on the Board;
• maintaining the Company’s diversity policy; and
• facilitating various evaluation processes.
The Nomination Committee is essential
to ensure the Board has the necessary
composition of skills, experience and
perspective to drive the Group’s strategy.
Sally Ann Forsyth | Chair of the Nomination Committee
Committee members
Name
Attendance
Sally Ann Forsyth
1
(Chair)
0/ 1
Claire Boyle
1 / 1
Michael Taylor
1 / 1
Richard Howell
1 / 1
1
Unable to attend meetings due to ill health.
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The Company’s non-compliance with the third target is
explained in more detail below. In accordance with UK
Listing Rule 6.6.6R (9), (10) and (11), the Board has provided
the following information in relation to its diversity. This
information has been collected by self-disclosure directly from
the individuals concerned, who were asked to confirm their
gender and ethnicity. There have been no changes to the
composition of the Board since 31 December 2024.
As the Company is an investment company with no Executive
Directors and a small Board relative to that which would be
expected for a trading company of equivalent size, it has not
managed to comply with UK Listing Rules’ diversity targets as
none of the current Directors come from an ethnic minority
background.
Gender identity
Number of
Board members
Percentage
on the Board
Number of
senior positions
on the Board
1
Men
2
50
1
Women
2
50
1
Not specified/prefer not to say
Ethnic background
Number of
Board members
Percentage
on the Board
Number of
senior positions
on the Board
1
White British or other white (including minority white groups)
4
100
4
Mixed/multiple ethnic groups
Asian/Asian British
Asian
Other ethnic group, including Arab
Not specified/prefer not to say
1
Listing Rule 6.6.6R includes only the positions of Chair, Chief Executive, Senior Independent Director and Chief Financial Officer in this category. As an externally
managed investment company with no Executive Directors, the Company does not have either a Chief Executive or a Chief Financial Officer. The Company
considers the position of the Chairs of the Audit and Risk Committee and Sustainability Committee as senior positions in addition to those reported above. Of
these four senior roles, two are performed by women and two by men.
The Board will continue to take all matters of diversity into
account as part of its succession planning and the benefits of
diversity will continue to be considered as an important factor
in all future appointments.
The Committee operates within defined terms of reference,
which are regularly reviewed and updated as necessary. The
terms of reference are available on the Company’s website.
Activities
The Committee met once during the year under review.
At the meeting, the Committee:
• considered the succession planning;
• reviewed results of the internal evaluations;
• reviewed membership of the Board’s committees;
• considered Directors standing for re-election/election at
the AGM and recommendations to shareholders; and
• reviewed the terms of reference.
Board and Committee evaluation
Towards the end of 2024, the Committee conducted an
internal evaluation of the effectiveness of the Board, its
Committees, the Chair and the Directors.
The 2024 evaluation was an internal performance evaluation
by way of questionnaires completed by the Directors. The
results were collated and a report detailing the responses
was considered by the Committee along with considering
areas of focus and improvement for 2025.
This process was facilitated by the Company Secretary.
The scope of the questionnaire was designed to cover all
aspects of the Board’s operation, including the management
of meetings, the strengths and independence of the Board
and the Chair, individual Directors and the performance of its
Committees, each Director’s perspective on the Board’s future
priorities, training requirements, and the way the Board works
as a team.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
NOMINATION COMMITTEE REPORT
CONTINUED
The Committee concluded that the evaluation demonstrated that the composition of the Board and its Committees continued to
be appropriate and it provided adequate supervision, oversight and challenge. The areas identified for the Board to focus on in
2025 are summarised below:
Area of assessment
Agreed action
Role of the Board, strategy
and governance
The Board has an open and constructive relationship with the Investment Adviser.
The Board has agreed to spend more informal time outside of quarterly meetings.
Stakeholder engagement
The levels of engagement between the Investment Adviser, Brokers and shareholders are
good with feedback regularly provided by the Board. The Board will continue to increase its
undertaking of stakeholder engagement in 2025.
Composition and
independence
The Board considers its composition to be appropriate with a good understanding of the
Group’s strategy. The Board will continue to monitor its composition against diversity targets
and recommendations.
Looking ahead
Priorities for 2025 include keeping under review the succession plan and composition of the Board and its Committees.
Sally Ann Forsyth
|
Chair of the Nomination Committee
15 April 2025
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AUDIT AND RISK COMMITTEE REPORT
Introduction and composition of the Committee
The Committee is chaired by Richard Howell, who is a
qualified chartered accountant, has a degree in Accounting
and Finance from Kingston University, as well as having
recent and relevant financial experience. During the year
under review The Chair of the Board was a member of the
Committee, as permitted by the AIC Code. This was deemed
appropriate as Claire Boyle is a Fellow of the ICAEW, has a
diverse background in equity investment, and has recent
and relevant financial experience, having chaired audit
committees herself. However, from 2025 following a review
of the composition of the Committee and taking into account
the recommendation from the AIC Code it was agreed that
it would be appropriate for Claire Boyle to step down as
a Committee member, but continue to attend Committee
meetings as an attendee. All members of the Committee are
considered independent Non-Executive Directors by the
Board on appointment.
The Committee as a whole has competence relevant to the
sector in which the Group operates. For more information on
the individual background of each Committee member, please
see pages 64 and 65 to view their biographies.
Role and activities of the Committee
The Audit and Risk Committee is responsible for the
effectiveness of internal control, risk management
and auditing processes. The Committee’s primary
responsibilities are to:
• consider the appointment, compensation, terms of
engagement of, independence and objectivity, resignation
or dismissal of the external Auditor;
• meet with the external Auditor and discuss the nature and
scope of the audit, the findings from the audit, including
accounting and internal controls;
• review the independence of the Auditor and provide
recommendations to the Board with regard to audit
engagement terms;
• review the Group’s financial statements, annual accounts
and accompanying reports to shareholders and
announcements relating to financial information;
• review the Group’s internal financial controls, the policies
and overall process for identifying and assessing
business risks;
• review the Group’s risk register, in particular with regard to
the potential impact of principal and emerging risks;
• review, on an annual basis, whether there should be an
internal audit function;
• review the procedures for whistleblowing, detecting
fraud and prevention of bribery of the outsourced service
providers; and
• produce an annual report of the Committee’s activities to be
included in the Annual Report.
The Committee has direct access to the Group’s Auditor,
Deloitte LLP, and provides a forum through which the Auditor
reports to the Board. Representatives of the Auditor attend
Committee meetings at least annually.
The Committee operates within defined terms of reference,
which are regularly reviewed and updated as necessary.
The terms of reference are available on the Company’s
website at
lifesciencereit.co.uk
.
The Audit and Risk Committee
(“Committee”) plays a key role in
the Group’s corporate governance
framework, ensuring key controls are in
place, risks are mitigated and reported
figures are accurate.
Richard Howell | Chair of the Audit and Risk Committee
Committee members
Name
Attendance
Richard Howell (Chair)
3 / 3
Claire Boyle
3 / 3
Michael Taylor
3 / 3
Sally Ann Forsyth
1
1 / 3
1
Unable to attend all meetings due to ill health.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
AUDIT AND RISK COMMITTEE REPORT
CONTINUED
The Committee met three times during the year under review.
At the meetings, the Committee:
• reviewed the internal controls and risk management
systems of the Group and its third-party service providers;
• reviewed the internal audits undertaken, monitored the
progress of the internal audit plan;
• agreed the audit plan with the Auditor, including the
principal areas of focus, and agreed the audit fee;
• received and discussed with the Auditor its report on the
results of the audit;
• reviewed the Group’s interim and annual financial
statements and discussed the appropriateness of the
accounting policies adopted;
• recommended the approval of two interim dividends;
• reviewed the valuation of the Group’s investment properties
and recommended this to the Board; and
• reviewed the performance of the Group’s Auditor.
During the year, the Committee has reviewed and updated,
where appropriate, the corporate risk register. This will
be completed at least half-yearly, in conjunction with the
Investment Adviser and AIFM. During the year, the addition of
new risks to the register and, more recently, minor changes
to the principal risks, which demonstrated the strength of the
business, are described on pages 50 to 58.
The Committee reviewed the requirement for an internal audit
function following the year end and concluded that this would
provide minimal added comfort at considerable extra cost to
the Group.
The Committee received reports on internal controls and
compliance from the Investment Adviser in conjunction with a
third-party risk and internal audit adviser and discussed these
with the Investment Adviser. These reports also covered the
internal controls of the Group’s other key service providers.
No significant matters of concern were identified.
Effectiveness of external audit process
The Committee monitors and reviews the effectiveness of
the external audit process for the Annual Report, including a
detailed review of the audit plan and the audit results report.
This review takes into account the experience and tenure of
the audit partner and team, the nature and level of services
provided, and confirmation that the Auditor has complied with
independence standards. During the year under review, the
Committee had closed sessions with the Auditor without the
presence of the Investment Adviser.
Audit fees and non-audit services
An audit fee of £182,250 has been agreed in respect of the
audit for the year ended 31 December 2024 (year ended
31 December 2023: £172,000) for auditing the Annual Report
and consolidated financial statements. No fees for non-audit
services were incurred in the current or prior year. Further
information on the fees paid to the Auditor is set out in note 6
to the financial statements on page 110.
Auditor independence and objectivity
The Committee has considered the Auditor’s independence
and objectivity and reviewed the non-audit services, which
the Auditor provided during the year. The Committee is
required to pre-approve all non-audit services prior to any
work commencing and considers the safeguards in place to
maintain their independence, such as the use of separate
teams to mitigate the risk of any self-review, are effective.
The Committee also receives an annual assurance from the
Auditor that its independence is not compromised by the
provision of such non-audit services. In the year, there were
no non-audit services provided by the Auditor. As such,
the Committee is satisfied that the Auditor’s objectivity and
independence has not been impaired and that the Auditor
has fulfilled its obligations to the Group and the Company’s
shareholders.
Deloitte LLP has been the Auditor since the Company’s
launch in November 2021. The Committee will regularly
consider the need to put the audit out to tender, the Auditor’s
fees and independence, and the matters raised during each
audit. James Wright, the current audit partner, was appointed
as audit lead during 2023 and will step down as audit partner
after they have served for five years.
Reappointment of the Auditor
The Committee has recommended to the Board the
reappointment of Deloitte LLP as Auditor to the Group.
The approval of Deloitte LLP as the Group’s Auditor will
be put to shareholders as an ordinary resolution at the
forthcoming AGM.
AIC statement of compliance
For the audit of the Financial Statements in this Annual Report,
the Company complied with the mandatory audit processes,
including The Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive Tender
Processes and Audit Committee Responsibilities) Order
2014 (“CMA Order”), and the Committee complied with the
responsibility provisions set out in the CMA Order relating to:
(a) putting the audit services engagement on tender every ten
years; and (b) strengthening the accountability of the external
auditor to the Committee, including: that only the Committee
can agree to the external auditors’ fees and scope of services
including authorisation of any non-audit services; and make
recommendations regarding the appointment of auditors and
audit engagement partner.
Fair, balanced and understandable reporting
The Committee reviewed drafts of this Annual Report and
Financial Statements to consider whether it is fair, balanced
and understandable and provides the information necessary
for shareholders to assess the Group’s performance, business
model and strategy. The Committee also gained assurance
that there is a robust process of review and challenge at
different levels within the Group to ensure balance and
consistency.
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80
Following the consideration of the above matters and its detailed review, the Committee was of the opinion that the Annual
Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary
for shareholders to assess the Group’s position and performance, business model and strategy.
Significant issues
The Committee considered the following key issues in relation to the Group’s financial statements during the year:
Valuation of
investment property
The Committee considered and discussed the valuation of the Group’s investment properties
as at 31 December 2024. The valuer attended the Committee meeting in March and September
2024 and March 2025 to enable a full discussion of the valuation and underlying assumptions
and to enable the Directors to challenge as appropriate.
Maintenance of REIT
status
The UK REIT regime affords the Group a beneficial tax treatment for income and capital gains,
provided certain criteria are met. There is a risk that these REIT conditions may not be met and
additional tax becomes payable by the Group. The Committee, therefore, monitored the Group’s
compliance status and considered each of the requirements for the maintenance of the REIT
status throughout the year ended 31 December 2024.
Going concern and
long-term viability
The Committee considered the Group’s financial requirements for the next 12 months and
concluded that it has sufficient resources to meet its commitments and any outstanding financing
covenants.
Following the announcement of a strategic review on 14 March 2025, the Committee has deemed
it not appropriate at the reporting date to prepare a long-term viability statement for the three-year
period to 31 December 2027. Instead the viability period has been aligned with the going concern
period of 12 months. Consequently, the financial statements have been prepared on a going
concern basis with material uncertainty.
For further details, see the Group’s going concern and viability statement on pages 59 to 61.
Internal controls
Please see page 74 for an overview of the internal controls of the Group.
Committee evaluation
The Committee undertook a self-performance evaluation during the year under review. Further details on the evaluation
process can be found in the Nomination Committee report on pages 76 to 78.
Look ahead to 2025
The Committee has agreed several areas of focus, including:
• ensuring continued integrity and balance in the Group’s financial reporting;
• ensuring the continued review of the documentation and evidence around key procedures and processes;
• actioning any required changes following the publication of the revised UK Corporate Governance;
• monitoring the Minimum Standard for Audit Committees and consider appropriate processes;
• consideration of new and emerging risks; and
• looking at specific implications of the current UK economic downturn on the Group’s portfolio value, including
macro and life science industry specific impacts and assessing resulting financial impacts.
However, following the announcement on 14 March 2025 of the commencement of a strategic review, this is the Committee and
Board’s immediate focus for 2025.
Richard Howell | Chair of the Audit and Risk Committee
15 April 2025
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
MANAGEMENT ENGAGEMENT
COMMITTEE REPORT
Introduction and composition of the Committee
The Committee is comprised of all the Directors of the
Company and chaired by Michael Taylor. The Committee met
on one occasion during the year under review, in accordance
with its terms of reference.
The Committee is responsible for evaluating the performance
of the Group’s key service providers and satisfying itself that
the continuation of such service provider appointments are in
the best interests of shareholders as a whole.
The Committee reviews the Investment Adviser and AIFM’s
agreements, including the methodology used for calculating
fees, to ensure that the terms remain fair and in the best
interests of shareholders.
Role and activities of the Management
Engagement Committee
The Committee operates within defined terms of reference,
which are regularly reviewed and, at least, on an annual
basis, to ensure they remain fit for purpose. The terms
of reference are available on the Company’s website at
lifesciencereit.co.uk
.
Investment Adviser and AIFM
Two of the key service providers of the Group are the
Investment Adviser and AIFM. During the year, the Committee
considered its performance against its obligations under the
Investment Advisory and AIFM Agreements, and whether it was
appropriate to recommend the continuing appointments of the
Investment Adviser and AIFM to the Board.
In reaching its recommendation to the Board, the Committee’s
deliberations included consideration of:
• the investment advisory and AIFM fees as detailed on
page 89;
• whether the terms of the agreements remained fair,
complied with all regulatory requirements, conformed with
market and industry practice, and were in the best interests
of shareholders; and
• the execution of the Group’s investment strategy (see page
17) by the Investment Adviser during the year.
Following the review, the Committee agreed that the
Investment Adviser and AIFM had performed their duties
to a high standard and recommended to the Board that the
continuing appointments of the Investment Adviser and AIFM
were in the best interests of the shareholders. However,
following the announcement of a strategic review post year
end, the Board have agreed a fee cut with the Investment
Adviser. See page 89 for further details.
Other key service providers
The Committee reviewed the ongoing performance and the
continuing appointment of the Group’s other key service
providers, including the Administrator, Auditor, Corporate
Broker, Legal Adviser, Property Manager, Registrar, Company
Secretary, Depositary, and Valuer. The Committee recognises
that ensuring excellent support and performance by service
providers is critical for the Group’s continuing operation as an
externally managed Real Estate Investment Trust.
Committee evaluation
The Committee undertook a self-performance evaluation during
the year under review. Further details on the evaluation process
can be found in the Nomination Committee report on pages
76 to 78.
Michael Taylor | Chair of the Management
Engagement Committee
15 April 2025
Committee members
Name
Attendance
Michael Taylor (Chair)
1 / 1
Claire Boyle
1 / 1
Sally Ann Forsyth
1 / 1
Richard Howell
1 / 1
The Management Engagement Committee
reviews the performance and ongoing
appointment of third-party service
providers to ensure they are operating
in the shareholders’ best interests.
Michael Taylor | Chair of the
Management Engagement Committee
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SUSTAINABILITY COMMITTEE REPORT
The Committee’s primary responsibilities are to:
• oversee the formulation and implementation of the Group’s
sustainability strategy, review updates on any regulatory
changes affecting the strategy and make recommendations
to the Board regarding changes to strategy;
• review any updates on regulatory changes that could
impact the implementation of the sustainability strategy;
• oversee service providers’ own sustainability policies and
procedures; and
• review the Group’s efficacy in relation to its
sustainability reporting.
The Committee met twice during the year under review.
At the meetings, the Committee reviewed:
• progress against the Group’s net zero pathway, including
the photovoltaic project at OTP;
• asset specific progress; and
• the ESG risk register.
Committee evaluation
The Committee undertook a self-performance evaluation
during the year under review and considered areas of focus
for 2025. Overall, it was concluded that the Committee
operated effectively.
Looking ahead
The Committee’s priority for 2025 is to continue to oversee
and embed the sustainability strategy, focusing on the
decarbonisation journey of the Group’s assets and the net
zero pathway (see Sustainability Report on pages 34 to 39 for
further details).
Sally Ann Forsyth | Chair of the Sustainability Committee
15 April 2025
The Committee is comprised of all the Directors of
the Company and is chaired by Sally Ann Forsyth, the
Sustainability Lead. The Committee has met twice during the
year under review and where Sally Ann Forsyth was unable
to attend, Claire Boyle chaired the meeting. The Committee
assists the Board in overseeing the implementation of the
Group’s sustainability strategy and the Company’s contribution
to society and impact on the environment in line with its
obligations under section 172.
Role and activities of the Sustainability Committee
The Committee operates within defined terms of reference,
which are regularly reviewed, at least, on an annual basis, to
ensure they remain fit for purpose. The terms of reference are
available on the Company’s website at
lifesciencereit.co.uk
.
The Sustainability Committee complements our Audit and
Risk Committee. Sustainability risks are incorporated into our
corporate risk register, which is reviewed and updated on a
regular basis.
Sustainability is a key focus of
the Group, with the Committee
overseeing the implementation
of the Group’s strategy.
Sally Ann Forsyth | Chair of the Sustainability Committee
Committee members
Name
Attendance
Sally Ann Forsyth
1
(Chair)
1 / 2
Claire Boyle
2 / 2
Michael Taylor
2 / 2
Richard Howell
2 / 2
1
Unable to attend all meetings due to ill health.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
The Board has prepared this report in accordance with the
requirements of the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations
2013. The law requires the Auditor to audit certain disclosures
contained within this report and these are indicated
accordingly. An ordinary resolution to approve the Directors’
remuneration report will be put to shareholders at the
forthcoming AGM.
Statement from the Chair
The Remuneration Committee is chaired by Michael Taylor
and comprises all Directors on the Board. The Board consists
entirely of Non-Executive Directors and the Group has no
employees. We have not, therefore, reported on those
aspects of remuneration that relate to Executive Directors.
During the year under review, the Remuneration Committee
met once to review the levels of remuneration for its
Non-Executive Directors, including the Chair. Remuneration
for all Non-Executive Directors does not include share options
or any other performance-related or variable elements.
No Director, including myself in my role as Chair of the
Remuneration Committee, is involved in setting their own
levels of remuneration.
Directors’ fees are set at a level of £55,000 per annum
for the Chair and £40,000 per annum for the independent
Non-Executive Directors. The Chair of the Audit and Risk
Committee will receive an additional £5,000 per annum.
The Remuneration Committee reviewed the Directors’ fees
during the year and does not recommend any increase for
the year ended 31 December 2025. The Directors are also
entitled to out-of-pocket expenses incurred in the proper
performance of their duties.
Directors are not eligible for bonuses, share options or
long-term incentive schemes or other performance-related
benefits, as the Board does not believe that this is appropriate
for Non-Executive Directors. There are no pension
arrangements in place for the Directors.
Directors’ Remuneration Policy
The Directors’ Remuneration Policy (the “Policy”), is scheduled
to be put to shareholders at the 2025 AGM as an ordinary
resolution having last been approved by shareholders at
the 2021 AGM. The Directors’ would like to propose an
amendment to the Policy to include the provisions set
out in the Company’s Articles of Association regarding
Directors’ fees. The Directors do not intend for this to signal
any fundamental changes to the existing remuneration
arrangements and, instead, wish to expand the Policy to
include the applicable statutory provisions. The proposed
Policy is set out below:
The Company and, respectively, the Policy follows the
recommendation of the AIC Corporate Governance Code.
The Company has no employees other than its Directors, who
are all Non-Executive and independent of Ironstone Asset
Management Limited.
The Policy is that the remuneration of Non-Executive Directors
should reflect the experience of the Board as a whole. The
Company Secretary provides a comparison of the Directors’
remuneration with other companies of similar size and/
or mandate. This comparison, together with consideration
of any change in Non-Executive Directors’ responsibilities,
is used to review annually whether any change in
remuneration is appropriate.
The Remuneration
Committee’s main function is
approving the remuneration
policy of the Directors.
Michael Taylor | Chair of the Remuneration Committee
Committee members
Name
Attendance
Michael Taylor (Chair)
1 / 1
Claire Boyle
1 / 1
Sally Ann Forsyth
1
0 / 1
Richard Howell
1 / 1
1
Unable to attend meetings due to ill health.
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84
The remuneration of the Directors is determined within the limits set out within the Company’s Articles of Association, and the
total aggregate annual fees payable to the Directors in respect of any financial period shall not exceed £400,000. Further, if
any Director is called upon to perform extra or special duties or services outside of their ordinary duties as a Director, they may
be paid reasonable additional remuneration as determined by the Board. Directors are also entitled to be paid all expenses
properly incurred in attending Board or shareholder meetings or otherwise in the performance of their duties. These expenses
are unlikely to be of a significant amount.
Statement of the implementation of the Remuneration Policy in respect of the financial year
ended 31 December 2024
The Remuneration Committee reviewed the fees during the year under review, including the time required to be committed
to the business of the Company, and will consider whether any further changes to remuneration are required over the next
financial year.
Statement of voting at the Annual General Meeting
Voting results from the 2024 Annual General Meeting:
For
Against
Votes
withheld
(No. of
shares)
Resolution
No.
of shares
%
No.
of shares
%
1. To receive and approve the Directors’
remuneration report
247,684,045
99.97
68,743
0.03
217,130
For more information, see the results on the Company’s website at
lifesciencereit.co.uk
.
Voting results from the 2023 Annual General Meeting:
For
Against
Votes
withheld
(No. of
shares)
Resolution
No.
of shares
%
No.
of shares
%
1. To receive and approve the Directors’
remuneration report
236,497,636
99.68
761,688
0.32
77,734
Remuneration report
Directors’ fees received for the year
The Directors who served in the year to 31 December 2024 received the following emoluments (gross of any tax or
National Insurance contributions):
Fees
£’000
Year ended
31 December 2024
Total
£’000
Fees
£’000
Period ended
31 December 2023
Total
£’000
Claire Boyle
55
55
55
55
Sally Ann Forsyth
40
40
40
40
Michael Taylor
40
40
40
40
Richard Howell
45
45
45
45
Total
180
180
180
180
The information in the above table has been audited.
The Directors’ remuneration is determined as per the limits set out within the Company’s Articles of Association and the
Remuneration Policy – with the Directors not eligible for benefits, bonuses, share options or long-term performance incentives.
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
Annual percentage change in the remuneration of Directors
Directors’ pay has increased over the last three years as set out in the table below. The Company does not have any employees
and, therefore, no comparisons are given in respect of Directors’ and employee’s pay increases.
2022
£’000
2022
to 2023
% change
2023
£’000
2023
to 2024
% change
2024
£’000
Claire Boyle
55
0
55
0
55
Sally Ann Forsyth
1
42
(5)
40
0
40
Michael Taylor
40
0
40
0
40
Richard Howell
2
29
55
45
0
45
1
Sally Ann Forsyth joined the Board as a Director on 14 October 2021 receiving her pro rata share of the £40,000 per annum fee and was Chair of the Audit and
Risk Committee until 23 June 2022, receiving a pro rata share of the £5,000 per annum fee.
2
Richard Howell joined the Board as a Director on 3 May 2022, receiving his pro rata share of the £40,000 per annum fee. In addition, he became Chair of the
Audit and Risk Committee on 24 June 2022, receiving his pro rata share of the £5,000 per annum fee.
Total shareholder return
The graph below shows the total shareholder return of the Company’s ordinary shares relative to a return on a hypothetical
holding over the same period in the FTSE All-Share REIT index.
Total shareholder return index (18 November 2021 = 100)
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
Nov-2021
Dec-2021
Jan-2022
Feb-2022
Mar-2022
Apr-2022
May-2022
Jun-2022
Jul-2022
Aug-2022
Sep-2022
Oct-2022
Nov-2022
Dec-2022
Jan-2023
Feb-2023
Mar-2023
Apr-2023
May-2023
Jun-2023
Jul-2023
Aug-2023
Sep-2023
Oct-2023
Nov-2023
Dec-2023
Jan-2024
Feb-2024
Mar-2024
Apr-2024
May-2024
Jun-2024
Jul-2024
Aug-2024
Sep-2024
Oct-2024
Nov-2024
Dec-2024
Life Science REIT plc
FTSE All Share
FTSE EPRA NAREIT UK
Source: Morningstar
Past performance is not a reliable indicator of future results
DIRECTORS’ REMUNERATION REPORT
CONTINUED
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86
Relative importance of spend on pay
The table below sets out significant use of profit and cash in respect of the years ended 31 December 2023 and
31 December 2024.
2024
£’000
2023
£’000
Change
%
Total Directors’ remuneration
180.0
180.0
0
Investment Adviser fees
2,979.0
3,389.0
(12.1)
Total dividend paid or declared
3.5
7.0
(50.0)
Directors’ beneficial and family interests
There is no requirement under the Company’s Articles of Association for Directors to hold shares in the Company.
The interests of the Directors and any connected persons in the ordinary shares of the Company are set out below:
31 December 2024
Number of shares
31 December 2023
Number of shares
Claire Boyle
30,000
30,000
Sally Ann Forsyth
20,342
20,342
Michael Taylor
20,000
20,000
Richard Howell
30,000
30,000
The above information has been audited.
There have been no changes to these holdings between 31 December 2024 and the date of this report.
On behalf of the Board
Michael Taylor | Chair of the Remuneration Committee
15 April 2025
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
DIRECTORS’ REPORT
The Directors present the Annual Report and Financial
Statements of Life Science REIT plc (the “Company”)
(registered number 13532483) for the year ended
31 December 2024.
In accordance with the Companies Act 2006 (as amended),
the Listing Rules and the Disclosure Guidance and
Transparency Rules, the Corporate Governance Statement,
Directors’ remuneration report, report from the Audit and Risk
Committee and the statement of Directors’ responsibilities
should be read in conjunction with one another and the
strategic report. As permitted by legislation, some of the
matters normally included in the Directors’ report have instead
been included in the strategic report, as the Board considers
them to be of strategic importance.
The corporate governance report forms part of this Directors’
report and can be found on pages 66 to 75. Please refer to
the Chair’s statement on pages 8 to 9 and the Investment
Adviser’s report on pages 22 to 33 for information about
future developments and important events that have occurred
since the year end. For further information on the going
concern and longer-term viability of the Group please see
pages 59 to 61.
Status of Life Science REIT plc
The Company is an investment company, as defined in
section 833 of the Companies Act 2006, and qualifies as a UK
Real Estate Investment Trust (“REIT”) as defined under section
527(2) of the Corporation Tax Act 2010.
Investment portfolio
A comprehensive analysis of the property portfolio can be
found on page 27 and a summary of the valuation of the
property portfolio can be found in note 13 on page 115. The
investment policy can be found on page 153.
Directors
Biographies of each Director appointed to the Company can
be found on pages 64 and 65.
The following information is disclosed in accordance with The
Large and Medium sized Companies and Groups (Accounts
and Reports) (Amendment) Regulations 2013 and DTR 7.2.6
of the Financial Conduct Authority’s Disclosure Guidance and
Transparency Rules.
Directors’ authority to purchase own shares
The Company did not purchase any of its own shares during
the year.
The Company will seek the authority to make market
purchases of up to 14.99% of the issued ordinary share
capital at the 2025 AGM via resolution 14 as included in the
Notice of Meeting.
Authority to allot shares
A general authority to allot new shares (or to grant rights over
shares) was given to the Directors at the Company’s AGM
in 2024.
The authority gives the Directors, for the period until the
conclusion of the AGM in 2025, the necessary authority
to allot securities up to a maximum nominal amount of
£2,333,333.33.
The Directors are proposing to renew the general authority
to allot shares at the 2025 AGM. This power will be exercised
only if, in the opinion of the Directors, it would be in the best
interests of shareholders as a whole.
Disapplication of pre-emption rights
A general power to disapply the pre-emption rights set out in
Section 561 of the Companies Act 2006 was granted to the
Directors at the AGM in 2024. The Directors are proposing
a resolution to renew and extend, subject to the passing of
the resolution to allot shares, the Directors’ authority to allot
equity securities for cash without pre-emption rights applying
in certain circumstances.
This resolution will authorise the Directors, until the date
falling 15 months after the date of the passing of the
resolution, or, if earlier, the conclusion of the next Annual
General Meeting of the Company, to issue ordinary shares
for cash, without pre-emption rights applying, of up to
an aggregate nominal value of £350,000, representing
approximately 10% of the issued ordinary share capital as at
the date of the Notice.
This power will be exercised only if, in the opinion of the
Directors, it would be in the best interests of shareholders as
a whole.
Current share capital
As at 31 December 2024 and the date of the report, there
were 350,000,000 ordinary shares of £0.01 in issue, none of
which were held in treasury. The share capital comprises one
class of ordinary shares. Each ordinary share carries the right
to receive profits of the Company available for distribution
and determined to be distributed by way of interim or final
dividends at such times as the Directors may determine in
accordance with these Articles.
Results and dividends
A summary of the Group’s performance during the year and
the outlook for the coming year is set out in the strategic
report on pages 22 and 33.
In respect of the year ended 31 December 2024, the
Company paid a first interim dividend of 1.0 pence per
ordinary share, in respect of the six-month period to
30 June 2024, on 31 October 2024. This is in line with the
Group’s obligation as a REIT to distribute 90.0% of the Group’s
aggregate UK property rental business profits as calculated
for tax purposes that the Group receives during the year.
At the start of 2024 the Board rebased the dividend to
2.0 pence per share. Post year end dividends have been
suspended pending the outcome of the strategic review
announced on 14 March 2025.
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88
Substantial shareholdings
As at 31 December 2024, the following shareholders had
notified the Company of their shareholdings under their
DTR 5 obligations:
Shareholder
Ordinary
shares
held
1
Percentage
of voting
rights
(%)
Rathbones Investment
Management Limited
59,425,981
17.0
The London & Amsterdam Trust
Company Limited
17,939,237
5.1
Sarasin & Partners LLP
17,452,282
5.0
BlackRock, Inc.
17,501,688
5.0
Legal & General Group Plc
(Group)
14,008,951
4.0
Hazelview Investments Inc.
11,059,078
3.2
1
As at date of notification to the Company.
It should be noted that these holdings may have changed
since notified to the Company and may not, therefore,
be wholly accurate statements of actual holdings as at
31 December 2024. However, notification of any change is
not required until the next applicable threshold is crossed.
Interests disclosed to the Company occurring between the
year end and 15 April 2025, being the latest practicable date:
Shareholder
Ordinary
shares
held
1
Percentage
of voting
rights
(%
)
Rathbones Investment
Management Limited
52,442,720
15.0
Hazelview Investments Inc.
10,339,530
3.0
BlackRock, Inc.
17,519,919
5.0
1
As at date of notification to the Company.
Powers of the Board of Directors
The powers of the Directors are set out in the Articles of
Association of the Company at section 104. This section
states that the business of the Group shall be managed by
the Board, which may exercise all the powers of the Group,
whether relating to the management of the business or not,
subject to any limitations imposed by legislation, the Articles
and/or any directions given by special resolution of the
shareholders of the Company.
Management arrangements
The Company and the AIFM have appointed Ironstone Asset
Management Limited as Investment Adviser to the Group.
The Company is an alternative investment fund for the
purposes of the UK AIFM Regime and, as such, is required
to have an AIFM who is duly authorised to undertake that
role. Pursuant to an agreement dated 21 October 2021 (the
“Alternative Investment Fund Management Agreement”), the
Company appointed G10 Capital Limited as its AIFM. G10
Capital Limited is authorised and regulated by the Financial
Conduct Authority with firm reference number 648953.
The AIFM is responsible for overall portfolio management, risk
management and compliance with the Group’s investment
policy and the requirements of the UK AIFM Regime that
apply to the Group. The Investment Adviser is an Appointed
Representative of the AIFM. As an Appointed Representative,
the Investment Adviser is responsible for working with and
advising the Group and the AIFM in respect of sourcing
investment opportunities that meet the Group’s investment
policy.
As an Appointed Representative, Ironstone is exempt from the
requirement to be authorised by the FCA as a pre-requisite to
giving investment advice and arranging deals in investments.
Ironstone is also responsible for managing the underlying real
estate assets within the Group’s investment portfolio, which
does not constitute a regulated activity.
The AIFM has, and shall maintain, the necessary expertise
and resource to supervise the delegated tasks effectively.
Under the terms of the Investment Advisory Agreement, the
Investment Adviser is entitled to a fee payable quarterly in
arrears calculated at the rate of one quarter of 1.1% per quarter
on that part of the NAV up to and including £500 million; one
quarter of 0.9% per quarter on that part of the NAV in excess
of £500 million and up to £1 billion; and one quarter of 0.75%
per quarter on NAV in excess of £1 billion.
Following the strategic review announcement on
14 March 2025, the Board and Investment Adviser have
agreed to revisions to the fee, effective from the quarter
commencing 1 April 2025. The Investment Advisory fee will
move from being calculated on net asset value to the lower of
net asset value and the average market capitalisation for the
quarter, subject to a floor of no lower than 70.0% of net asset
value. In addition the rate applied to the initial fee threshold of
£500 million has been lowered to 1.0%.
The Investment Advisory Agreement is terminable on
24 months’ notice in writing by either party and also by the
AIFM, with the consent of the Company; such notice is not
to be given prior to the four-year anniversary of the date of
Admission.
The Alternative Investment Fund Management Agreement
may be terminated by the Company or the AIFM giving not
less than six months’ written notice. In addition, it is terminable
on 30 days’ notice by either party in writing in the event
that the other party is found liable for material breach of
duty, negligence, wilful default, fraud or a material breach of
applicable requirements in connection with the performance
of its duties under this Agreement or a material or persistent
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
breach of this Agreement, which is either irremediable, or, if
capable of remedy, not remedied within 30 days of receipt by
the defaulting party of a notice signed on behalf of the non-
defaulting party requiring such breach to be rectified.
The Company is also entitled to terminate the agreement
with immediate effect in the event that the AIFM ceases to
maintain its permission to act as the AIFM or such permission
is suspended.
The Group pays to the AIFM, exclusive of VAT, a fixed monthly
fee of £3,183 in respect of risk management and portfolio
management services, a fixed quarterly fee of £4,000 for the
provision of Annex IV AIFM Directive regulatory reporting,
and other fees for the provision of additional ad hoc services
and maintaining the Key Information Documents (“KIDs”). The
Group will also reimburse the AIFM for costs and expenses
properly incurred by the AIFM in the performance of its
obligations under the AIFM Agreement.
Continuing appointment of the Investment Adviser
The Board keeps the performance of the Investment Adviser
under continual review. The Management Engagement
Committee conducts an annual appraisal of the Investment
Adviser’s performance and makes a recommendation to the
Board about the continuing appointment of the Investment
Adviser. It is the opinion of the Directors that the continuing
appointment of the Investment Adviser is in the interests of
shareholders as a whole. The reasons for this view are that
the Investment Adviser executed the investment strategy, at
this early stage of the Group’s development, according to the
Board’s expectations and on terms which, in the view of the
Board, continue to remain commercial and reasonable.
NMPI
On 1 January 2014, certain changes to the FCA rules
regarding the restrictions on the retail distribution of
unregulated collective investment schemes and close
substitutes (“non-mainstream pooled investments”, or “NMPIs”)
came into effect.
Since the Company obtained approval as a UK REIT, with
effect from Admission to AIM on 19 November 2021, its
ordinary shares of nominal value of 0.01 pence each (the
“shares”) are excluded from these rules and, therefore, the
restrictions relating to NMPIs do not apply to its shares. It is
the Board’s intention that the Group will continue to conduct
its affairs in such a manner that it maintains its approved REIT
company status and that, accordingly, the Company’s shares
will continue to be excluded from the FCA’s rules relating to
NMPIs and can be recommended by financial advisers to
retail investors in accordance with the FCA’s rules in relation
to NMPI products.
Related party transactions
Details of related part disclosures are set out in note 27 on
page 129.
Change of control
There are no agreements to which the Company is party that
might be affected by a change of control of the Company
except for the agreement in relation to the Company’s credit
facility. The Company entered into a £150.0 million Facility
Agreement with HSBC and Bank of Ireland in June 2023,
expiring in June 2026. Any loan drawn under this facility
agreement could require repayment upon the change of
control of the Company.
Post balance sheet events
Disclosures relating to post balance sheet events can be
found in note 30 to the financial statements on page 130.
Directors’ indemnities and Directors’ and Officers’
liability insurance
The Company’s agreement to indemnify each Director
against any liability incurred in the course of their tenure, to
the extent permitted by law, remains in place. In addition,
under the Company’s Articles of Association, the Directors
are provided, subject to the provisions of UK legislation and
at the discretion of the Board, with an indemnity in respect of
liabilities owed to third parties, which they may sustain or incur
in connection with their appointment.
The Directors were covered throughout the year under review.
Greenhouse gas emissions
During the year under review, the Group met the criteria
for reporting greenhouse gas emissions as per the SECR
disclosure requirements (see the table on page 149). Under
the leadership of the Sustainability Committee, the Group
has developed a sustainability strategy and an action plan.
Please see pages 36 to 37 for our approach and page
149 for greenhouse gas emissions disclosure in our EPRA
sBPR reporting.
Information to be disclosed in accordance
with the UK Listing Rule 6.6.4R
UK Listing Rule 6.6.4R requires the Company to include
certain information in a single identifiable section of the
Annual Report or a cross-reference table indicating where
the information is set out. The following information required
to be disclosed in accordance with Listing Rule 6.6.4R is not
applicable, unless stated otherwise:
• A statement of the amount of interest capitalised by the
Group during the period under review with an indication
of the amount and treatment of any related tax relief (see
notes 8 and 9)
• Information in relation to the publication of unaudited
financial information
• Details of any long-term incentive schemes
• Any arrangements under which a Director has waived
emoluments, or agreed to waive any future emoluments,
from the Group
• Details of any non-pre-emptive issues of equity for cash
by the Group
DIRECTORS’ REPORT
CONTINUED
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• Any non-pre-emptive issues of equity for cash by the Group
or by any unlisted major subsidiary undertaking
• Parent participation in a placing by a listed subsidiary
• Any contract of significance in which a Director of the
Company is or was materially interested
• Any waiver of dividends by a shareholder
Auditor
The Directors holding office at the date of this Annual Report
confirm that, so far as they are each aware, there is no
relevant audit information of which the Group’s Auditor is
unaware. Each Director has taken all the steps that they ought
to have taken as a Director to make themselves aware of any
relevant audit information and to establish that the Group’s
Auditor is aware of that information.
Deloitte LLP has expressed its willingness to be appointed as
Auditor of the Group and resolutions for its appointment and
to authorise the Audit and Risk Committee to determine its
remuneration will be proposed at the forthcoming AGM.
Financial risk management
Please see note 23 to the financial statements on pages
125 and 127 for information on financial risk management
objectives and policies in relation to the Group’s market risk,
interest risk, credit risk and liquidity risk.
The Group’s approach to hedging is included in the
investment policy on page 153.
Research and development activities
The Company and its subsidiaries did not carry out any
activities in the field of research and development over
the year.
Donations
The Company and its subsidiaries made £10,000 (year ended
31 December 2023: £10,000) of charitable donations during
the year to organisations either within or outside of the UK.
No political donations were made in either the current or
prior year.
Annual General Meeting
The Company’s AGM will be held on 3 June 2025. The Notice
of the AGM will be circulated to shareholders separately.
The Board is of the opinion that the passing of all resolutions
being put to the AGM would be in the best interests of the
Company and its shareholders. The Directors, therefore,
recommend that shareholders vote in favour of all resolutions
as set out in the Notice of Meeting as they intend to do in
respect of their own shareholdings.
For and on behalf of the Board
MUFG Corporate Governance Limited | 
Company Secretary
15 April 2025
Company number: 13532483
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FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual
Report and United Kingdom adopted Financial Statements in
accordance with applicable UK law and in compliance with
the requirements of the Companies Act 2006. Company law
requires the Directors to prepare financial statements for each
financial year. Under that law, the Directors are required to
prepare the Group financial statements in accordance with
United Kingdom adopted international accounting standards
and International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board
(“IASB”). The Directors have chosen to prepare the Parent
Company financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law), including
FRS 101 “Reduced Disclosure Framework”.
Under company law, the Directors must not approve the
financial statements unless they are satisfied that they present
fairly the financial position, financial performance and cash
flows of the Group for that year. In preparing the financial
statements, the Directors are required to:
• select suitable accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and
Errors and apply them consistently;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with
specific requirements in IFRS is insufficient to enable users
to understand the impact of particular transactions, other
events and conditions on the Group’s financial position and
financial performance;
• state that the Group has complied with IFRS, subject to
any material departures disclosed and explained in the
financial statements;
• state whether the Company financial statements have been
prepared in accordance with Financial Reporting Standard
101 Reduced Disclosure Framework (“FRS 101”) subject to
any material departures disclosed and explained in the
Company financial statements; and
• make judgements and estimates that are reasonable
and prudent.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy, at any time, the financial position of the Group and
enable it to ensure that the financial statements comply with
the Companies Act 2006 and Article 4 of the IAS Regulation.
They are also responsible for safeguarding the assets of
the Group and, hence, for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a strategic report, Directors’ report,
Directors’ remuneration report and corporate governance
statement that comply with that law and those regulations,
and for ensuring that the Annual Report includes information,
where applicable, for the Disclosure Guidance and
Transparency Rules of the FCA.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. The work carried out by the
Auditor does not involve consideration of the maintenance
and integrity of this website and, accordingly, the Auditor
accepts no responsibility for any changes that have occurred
to the financial statements since they were initially presented
on the website. Visitors to the website need to be aware
that legislation in the UK covering the preparation and
dissemination of the financial statements may differ from
legislation in their jurisdiction.
We confirm that, to the best of our knowledge:
• the financial statements, prepared in accordance with IFRS,
and in conformity with the requirements of the Companies
Act 2006, give a true and fair view of the assets, liabilities,
financial position and profit of the Company (and Group as
a whole); and
• this Annual Report includes a fair review of the
development and performance of the business and the
position of the Company (and Group as a whole), together
with a description of the principal risks and uncertainties
that it faces.
The Directors consider that the Annual Report and Financial
Statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary
for shareholders to assess the Company’s position and
performance, business model and strategy.
For and on behalf of the Board
Claire Boyle | Chair
15 April 2025
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF LIFE SCIENCE REIT PLC
Report on the audit of the financial statements
1.
Opinion
In our opinion:
• the financial statements of Life Science REIT Plc (the ‘Parent
Company’) and its subsidiaries (the ‘Group’) give a true
and fair view of the state of the Group’s and of the Parent
Company’s affairs as at 31 December 2024 and of the
Group’s loss for the year then ended;
• the Group financial statements have been properly
prepared in accordance with United Kingdom adopted
international accounting standards and IFRS accounting
standards as issued by the International Accounting
Standards Board (IASB);
• the Parent Company financial statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice, including
Financial Reporting Standard 101 ”Reduced Disclosure
Framework”; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
• the consolidated statement of profit or loss and other
comprehensive income;
• the consolidated and Parent Company statements of
financial position;
• the consolidated and Parent Company statements of
changes in equity;
• the consolidated statement of cash flows;
• the material accounting policy information; and
• the related notes 1 to 37.
The financial reporting framework that has been applied in
the preparation of the Group financial statements is applicable
law, United Kingdom adopted international accounting
standards and IFRS Accounting Standards as issued by the
IASB. The financial reporting framework that has been applied
in the preparation of the Parent Company financial statements
is applicable law and United Kingdom Accounting Standards,
including FRS 101 “Reduced Disclosure Framework” (United
Kingdom Generally Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described
in the auditor’s responsibilities for the audit of the financial
statements section of our report.
We are independent of the Group and Parent Company in
accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as
applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. We confirm that we have not provided any non-
audit services prohibited by the FRC’s Ethical Standard to the
Group and Parent Company.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
3.
Material uncertainty related to going concern.
We draw attention to note 2 in the financial statements, which
indicates that primarily as a result of the Strategic Review
announcement on 14 March 2025, the Directors believe that
there is a material uncertainty that the Group will continue to
be in operation for at least the next 12 months. The directors
are required under IAS 1 Presentation of Financial Statements
to make an assessment of the group’s ability to continue as a
going concern for a period of at least 12 months from the date
of approval of the financial statements and determine whether
any material uncertainties exist.
As at 31 December 2024 the group had £5.6 million of
unrestricted cash and £15.5 million available to drawdown
under its current debt facilities based on the current bank
valuations of the properties. These are due to increase as the
development of OTP continues and completes. The Group is
operating within its covenants which relate to both LTV and
interest coverage. Sensitivities have been performed on these
covenants and based of the current market data it is highly
unlikely that these would be breached.
As part of the going concern assessment, and taking the
above into consideration, the Directors reviewed a number
of scenarios which included plausible downside sensitivities
in relation to rental cash collection, making no acquisitions
or discretionary capital expenditure, and minimum dividend
distributions under the REIT rules. Based on this information,
and in light of mitigating actions available, the Directors have
a reasonable expectation that the Group and the Company
have adequate resources to continue in business for a
period of at least 12 months from the date of approval of
the Annual Report and Financial Statements. However, on
the 14 March 2025, the business released an RNS stating
that the business will “explore all strategic options available
to maximise value for shareholders, which may include a
potential sale or managed wind down of the Company”.
Further the HSBC and Bank of Ireland debt facilities reach
maturity in June 2026. The Group is assessing the possible
impact of refinancing necessary along with the resultant
liquidity impact as part of the strategic review process. There
are multiple outcomes to the above as the facilities may be
fully refinanced, partially refinanced at a reduced level, or
repaid in full, depending on the outcome of the strategic
review. Therefore, whilst the business may be able to
continue trading for the going concern period operationally,
there is uncertainty over the future of the business across the
same period. The business could continue trading, or certain
assets could be sold, or the business itself could be sold or
wound down.
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INDEPENDENT AUDITOR’S REPORT
CONTINUED
As stated in note 2, along with the other matters as set
forth in the Going Concern section per the Strategic Report,
indicate that a material uncertainty exists that may cast
significant doubt on the company’s ability to continue as a
going concern. Therefore, the Financial Statements have
been prepared on the going concern basis with material
uncertainty. Our opinion is not modified in respect of this
matter.
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our
evaluation of the directors’ assessment of the group’s ability
to continue to adopt the going concern basis of accounting
included:
• challenging the directors’ approved going concern
assessment by assessing this against our knowledge of the
business, results of our audit testing as well as prevailing
macro-economic conditions;
• assessing a forecast budget to 30 June 2026, covering the
maturity date of the facilities on 23 June 2026, including
consideration of the Group’s financing arrangements and
evaluating management’s stress testing and mitigating
actions;
• assessing the integrity and accuracy of the forecast budget
along with the historical forecasting accuracy of the model;
• reviewing the facility agreement to consider whether all
key terms and covenants are appropriately included in the
forecast;
• considering the latest valuations of the properties in order
to identify the amount available to draw from the financing
facilities and therefore the liquidity position of the group;
• assessing the implications of the Strategic Review
announced by the group on 14 March 2025 and the
potential impact of the decisions on liquidity, refinancing
and going concern overall;
• assessing compliance with both current and forecasted
loan covenants; and
• assessing the appropriateness of going concern
disclosures included in the Financial Statements.
In relation to the reporting on how the group has applied the
UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to:
• the directors’ statement in the financial statements about
whether the directors considered it appropriate to adopt
the going concern basis of accounting; and
• the directors' identification in the financial statements of the
material uncertainty related to the group’s ability to continue
as a going concern over a period of at least twelve months
from the date of approval of the financial statements.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
4.
Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
• Valuation of investment properties measured at Fair Value through Profit or Loss (“FVTPL”)
• Going concern (see material uncertainty related to going concern section)
Within this report, key audit matters are identified as follows:
!
Newly identified

Similar level of risk
Materiality
The materiality that we used for the Group financial statements was £5,256,000 which was
determined on the basis of 2% of net asset value. We have also used a lower threshold for items
impacting EPRA earnings of £293,000 which was determined on the basis of 5% of EPRA earnings.
Scoping
We have performed full scope audit procedures on the Group’s consolidated balances in relation to
the statement of profit or loss and other comprehensive income as well as the statement of financial
position.
Significant changes
in our approach
In the current year we have identified a key audit matter in relation to the going concern basis of
preparation of the financial statements due to the material uncertainty present over the group’s ability
to continue in operation for at least the next 12 months.
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5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
5.1. Valuation of investment properties measured at FVTPL

Key audit matter
description
The Group’s investment properties totalled £385.2 million (31 December 2023: £382.3 million).
The Group measures the investment properties at FVTPL in accordance with IAS 40 Investment
Property and are classified as Level 3 in the fair value hierarchy in accordance with IFRS 13 Fair Value
Measurement. The Group’s accounting policy for the investment properties is specified in Note 13 of
the financial statements.
The valuation of the Group’s investment properties as explained in Note 22 of the financial
statements involves significant estimates and assumptions which include applying capitalisation
yields to current and future rental streams that could materially affect the financial statements.
Therefore, we identified the valuation of investment properties as a key audit matter.
Management appoints an external valuer CBRE Limited, chartered surveyors to perform the
valuations in accordance with the appropriate sections of the RICS Red Book and in line with the
requirements of IFRS 13 Fair Value Measurement. The valuer has issued a valuation report on the
entire property portfolio as at the year-end. The property portfolio is valued on the basis of up-to-
date tenancy information supplied by management and publicly available market information.
In determining the fair value, the external valuers make a number of key estimates and assumptions,
in particular assumptions in relation to market comparable yields and estimates in relation to
increases or decreases in future rental income. These estimates and assumptions require input from
management, whilst others are subject to market forces and will change over time. Manipulation of
these accounting estimates could result in material misstatements, and therefore we identified a
potential fraud risk in this key audit matter.
How the scope of
our audit responded
to the key audit
matter
In response to the above key audit matter, we:
• obtained an understanding of the relevant controls over investment property valuations;
• obtained and assessed the final valuation reports prepared by the Group’s valuer;
• involved our real estate valuation specialists to assist us in independently evaluating the
appropriateness of the inputs and assumptions used in the valuation methodology (including yield
and estimated rental values) for the properties;
• benchmarked valuation assumptions to relevant market evidence including specific property
transactions and other external data;
• assessed the accuracy and completeness of data provided by management to the Group’s valuer;
• assessed the independence, competence, capabilities and objectivity of the Group’s valuer by
assessing whether the valuers are RICS approved and that there are no conditions or specific
assumptions in the letter of engagement;
• assessed the adequacy and completeness of disclosures presented in the financial statements.
• reconciled the external valuation reports to underlying financial records to test for completeness
and accuracy within the Group’s financial statements; and
• assessed the cost to complete in relation to development property.
Key observations
Based on the work performed we concluded that the valuation of investment properties measured at
FVTPL is appropriate.
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FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
CONTINUED
6.
Our application of materiality
6.1 Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the
scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group Financial Statements
Parent Company Financial Statements
Materiality
Basis for determining
materiality
£5,256,000 (2023: £5,674,000)
2% (31 December 2023: 2%) of the Group’s
net asset value.
£4,711,000 (2023: £4,515,000).
1.5% (31 December 2023: 1.5%) of the Parent
Company’s net asset value.
Rationale for the
benchmark applied
We determined materiality based on net
assets value, which is deemed appropriate
due to the nature of the Group’s business
being owners of investment property with
a modest level of gearing. Investors are
most likely to focus on the performance of
the properties and the returns on these,
and this is represented by the net assets
value of the Group.
We determined materiality based on total net
assets value, which is deemed appropriate due
to the nature of the Parent Company’s business.
Further, it does not generate any revenue in its
own capacity, as this is done through the investee
companies that are owned by it. Investors are
most likely to focus on the carrying value of the
investments and this is represented by the net
assets value of the Company.
A lower threshold of £293,000 (31 December 2023: £297,000) based upon 5% of EPRA earnings has also been used for items
impacting EPRA earnings. We consider EPRA Earnings as a critical performance measure for the Group and a measure which
is widely used within the Real Estate industry. This has been applied for testing all balances impacting that measure. Refer to
pages 145 to 151 for the Group’s EPRA performance measures.
Net Asset Value
Group Materiality
Net Asset Value
£262,768,000
Group Materiality
£5,256,000
Audit Committee
reporting threshold
£263,000
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6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole
Group Financial Statements
Parent Company Financial Statements
Performance materiality
70% (2023: 70%) of Group materiality.
70% (2023: 70%) of Parent Company materiality.
Basis and rationale for
determining performance
materiality
In determining performance materiality, we considered the following factors:
a. the quality of the control environment; and whether we were able to rely on controls.
b. low level of corrected and uncorrected misstatements identified in the prior year.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report
to the Committee all audit differences in excess of £263,000
(2023: £283,700) for the overall Group financial statements
and £14,700 (2023: £15,000) for items impacting EPRA
earnings, as well as differences below that threshold that,
in our view, warranted reporting on qualitative grounds. We
also report to the Audit Committee on disclosure matters that
we identified when assessing the overall presentation of the
financial statements.
7.
An overview of the scope of our audit
7.1. Scoping
Our Group audit was scoped by obtaining an understanding
of the Group and its environment, including Group-wide
controls, and assessing the risks of material misstatement
at the Group level. Audit work to respond to the risks of
material misstatement was performed directly by Group
audit engagement team. We have performed full scope audit
procedures on the Group’s consolidated balances in relation
the statement of profit or loss and other comprehensive
income as well as the statement of financial position.
7.2. Our consideration of the control environment
We did not take a controls reliance approach on the general
IT controls during the audit for the Group due to the simple
control environment and financial reporting system. We
obtained an understanding and tested the relevant manual
controls over the key business processes. These include
revenue, valuation of property and the financial reporting
process.
7.3. Our consideration of climate-related risks
In planning our audit, we have considered the potential
impact of climate change on the Group’s business and its
financial statements.
As a part of our audit, we have obtained management’s
climate-related risk assessment and held discussions with
management to understand the process of identifying climate-
related risks, the determination of mitigating actions and the
impact on the Group’s financial statements. Management has
assessed that there is currently no material impact arising
from climate change on the judgements and estimates
determining the valuations within the financial statements.
We performed our own assessment of the potential impact of
climate change on the Group’s account balances and classes
of transaction and did not identify any reasonably possible
risks of material misstatement.
In the current year the Group has voluntarily disclosed
its alignment with the Task Force on Climate-related
Financial Disclosures (“TCFD”). Our procedures included
use of our ESG specialist to review the disclosure in the
financial statements to ensure it is in line with the disclosure
requirements, despite the Group being exempt from
disclosure as a closed-end investment fund.
Our procedures also included reviewing all further disclosures
included in the Strategic Report, set out on pages 34 to 49,
to consider whether they are materially consistent with the
financial statements and our knowledge obtained in the audit.
8. Other information
The other information comprises the information included in
the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the
other information contained within the annual report.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to
be materially misstated.
If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether
this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
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FINANCIAL STATEMENTS
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement, the directors are responsible for the preparation
of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group’s and Parent Company’s
ability to continue as a going concern, disclosing as
applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either
intend to liquidate the Group or Parent Company or to cease
operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of the
financial statements is located on the FRC’s website at: www.
frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor’s report.
11. Extent to which the audit was considered capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related to
irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment
and business performance including the design of the
Group’s remuneration policies, key drivers for directors’
remuneration, investment manager fees and performance
targets;
• results of our enquiries of the investment managers, the
directors and the Audit and Risk Committee about their own
identification and assessment of the risks of irregularities,
including those that are specific to the Group’s sector;
• any matters we identified having obtained and reviewed
the Group’s documentation of their policies and procedures
relating to:
– identifying, evaluating and complying with laws and
regulations and whether they were aware of any
instances of non-compliance;
– detecting and responding to the risks of fraud and
whether they have knowledge of any actual, suspected
or alleged fraud;
– the internal controls established to mitigate risks of fraud
or non-compliance with laws and regulations;
• the matters discussed among the audit engagement team
and relevant internal specialists, including valuations
regarding how and where fraud might occur in the financial
statements and any potential indicators of fraud.
As a result of these procedures, we considered the
opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for
fraud in the valuation of investment properties measured at
FVTPL.
In common with all audits under ISAs (UK), we are also
required to perform specific procedures to respond to the risk
of management override.
We also obtained an understanding of the legal and
regulatory framework that the Group operates in, focusing
on provisions of those laws and regulations that had a
direct effect on the determination of material amounts and
disclosures in the financial statements. The key laws and
regulations we considered in this context included the
UK Companies Act, Listing Rules, REIT conditions and tax
legislation.
In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental
to the Group’s ability to operate or to avoid a material penalty.
These included the Group’s compliance with health and safety
matters, including fire safety and fire cladding.
INDEPENDENT AUDITOR’S REPORT
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11.2. Audit response to risks identified
As a result of performing the above, we identified valuation
of investment properties measured at FVTPL as a key
audit matter related to the potential risk of fraud. The key
audit matters section of our report explains the matter in
more detail and also describes the specific procedures we
performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks
identified included the following:
• reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as
having a direct effect on the financial statements;
• enquiring of the Investment managers the Audit and Risk
Committee and external legal counsel concerning actual
and potential litigation and claims;
• performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
• reading minutes of meetings of those charged with
governance; and
• in addressing the risk of fraud through management
override of controls, testing the appropriateness of journal
entries and other adjustments; assessing whether the
judgements made in making accounting estimates are
indicative of a potential bias; and evaluating the business
rationale of any significant transactions that are unusual or
outside the normal course of business.
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement team
members including internal specialists, and remained alert
to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies
Act 2006
In our opinion the part of the directors’ remuneration report to
be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
• the information given in the strategic report and the
directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
• the strategic report and the directors’ report have been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group
and Parent Company and their environment obtained in
the course of the audit, we have not identified any material
misstatements in the strategic report or the directors’ report.
13. Corporate Governance Statement
The Listing Rules require us to review the directors' statement
in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the
Group’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with
the financial statements and our knowledge obtained during
the audit:
• the directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified set out on pages 59 to 61;
• the directors’ explanation as to its assessment of the
Group’s prospects, the period this assessment covers and
why the period is appropriate set out on pages 59 to 61;
• the directors' statement on fair, balanced and
understandable set out on page 80;
• the board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 50 to 58;
• the section of the annual report that describes the review
of effectiveness of risk management and internal control
systems set out on page 74; and
• the section describing the work of the audit and risk
committee set out on pages 79 to 81.
14. Matters on which we are required to report by exception
14.1. Adequacy of explanations received and accounting
records
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
• we have not received all the information and explanations
we require for our audit; or
• adequate accounting records have not been kept by the
Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the Parent Company financial statements are not in
agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
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INDEPENDENT AUDITOR’S REPORT
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14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to
report if in our opinion certain disclosures of directors’
remuneration have not been made or the part of the directors’
remuneration report to be audited is not in agreement with
the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the Audit and Risk
Committee, we were appointed by the board on
11 February 2022 to audit the financial statements for the
period ended 31 December 2021 and subsequent financial
periods. The period of total uninterrupted engagement
including previous renewals and reappointments of the firm is
four years, covering the periods ended 31 December 2021 to
31 December 2024.
15.2. Consistency of the audit report with the additional
report to the audit committee
Our audit opinion is consistent with the additional report to
the audit committee we are required to provide in accordance
with ISAs (UK).
16. Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a
body, for our audit work, for this report, or for the opinions we
have formed.
As required by the Financial Conduct Authority (FCA)
Disclosure Guidance and Transparency Rule (DTR) 4.1.15R
– DTR 4.1.18R, these financial statements form part of the
Electronic Format Annual Financial Report filed on the
National Storage Mechanism of the FCA in accordance
with DTR 4.1.15R – DTR 4.1.18R. This auditor’s report provides
no assurance over whether the Electronic Format Annual
Financial Report has been prepared in compliance with DTR
4.1.15R – DTR 4.1.18R.
James Wright FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, UK
15 April 2025
100
Life Science REIT plc
Annual Report and Financial Statements 2024
100
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
Continuing operations
Notes
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Gross property income
3
16,355
15,481
Service charge income
3
3,953
4,461
Revenue
20,308
19,942
Recoverable service charges
4
(3,953)
(4,461)
Property operating expenses
4
(1,931)
(1,656)
Gross profit
14,424
13,825
Administration expenses
4
(4,838)
(5,249)
Operating gains before losses on investment properties
9,586
8,576
Fair value losses on investment properties
13
(17,376)
(22,848)
Loss on disposal of investment properties
13
(317)
Operating loss
(7,790)
(14,589)
Finance income
7
4,203
3,807
Finance expenses
8
(10,390)
(11,070)
Loss before tax
(13,977)
(21,852)
Taxation
9
146
Loss after tax for the period and total comprehensive loss attributable to
equity holders
(13,977)
(21,706)
Loss per share (basic and diluted) (pence)
12
(4.0)
(6.2)
All items in the above statement derive from continuing operations. No operations were discontinued during the period.
There is no other comprehensive income and as such a separate statement is not present. The loss after tax is therefore also
the total comprehensive loss.
The accompanying notes on pages 105 to 130 form an integral part of these Financial Statements.
101
Life Science REIT plc
Annual Report and Financial Statements 2024
101
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
Notes
31 December
2024
£’000
31 December
2023
£’000
Assets
Non-current assets
Investment property
13
385,220
382,300
Interest rate derivatives
16
3,998
Trade and other receivables
14
3,826
3,409
389,046
389,707
Current assets
Trade and other receivables
14
4,196
6,656
Cash and cash equivalents
15
5,567
14,341
Interest rate derivatives
16
2,378
12,141
20,997
Total assets
401,187
410,704
Liabilities
Non-current liabilities
Interest-bearing loans and borrowings
17
(122,238)
(107,918)
Other payables and accrued expenses
18
(3,826)
(4,604)
(126,064)
(112,522)
Current liabilities
Interest-bearing loans and borrowings
17
Other payables and accrued expenses
18
(12,355)
(14,437)
(12,355)
(14,437)
Total liabilities
(138,419)
(126,959)
Net assets
262,768
283,745
Equity
Share capital
19
3,500
3,500
Capital reduction reserve
314,823
321,823
Retained earnings
20
(55,555)
(41,578)
Total equity
262,768
283,745
Number of shares in issue (thousands)
350,000
350,000
Net asset value per share (basic and diluted) (pence)
21
75.1
81.1
These Financial Statements were approved by the Board of Directors of Life Science REIT plc on 15 April 2025 and signed on
its behalf by:
Claire Boyle
Company number: 13532483
The accompanying notes on pages 105 to 130 form an integral part of these Financial Statements.
102
Life Science REIT plc
Annual Report and Financial Statements 2024
102
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Notes
Share
capital
£’000
Capital
reduction
reserve
£’000
Retained
earnings
£’000
Total equity
£’000
Balance at 1 January 2024
3,500
321,823
(41,578)
283,745
Loss for the year and total comprehensive loss
(13,977)
(13,977)
Dividends paid
11
(7,000)
(7,000)
Balance at 31 December 2024
3,500
314,823
(55,555)
262,768
Notes
Share
capital
£’000
Capital
reduction
reserve
£’000
Retained
earnings
£’000
Total equity
£’000
Balance at 1 January 2023
3,500
335,823
(19,872)
319,451
Loss for the year and total comprehensive loss
(21,706)
(21,706)
Dividends paid
11
(14,000)
(14,000)
Balance at 31 December 2023
3,500
321,823
(41,578)
283,745
The accompanying notes on pages 105 to 130 form an integral part of these Financial Statements.
103
Life Science REIT plc
Annual Report and Financial Statements 2024
103
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT
OF CASH FLOWS
AS AT 31 DECEMBER 2024
Notes
Year ended
31 December
2024
£’000
Year ended
31 December
2023
£’000
Cash flows from operating activities
Operating loss
(7,790)
(14,589)
Adjustments to reconcile profit for the year to net cash flows:
Changes in fair value of investment properties
13
17,376
22,848
Adjustment for non-cash items
317
Operating cash flows before movements in working capital
9,586
8,576
Decrease/(increase) in other receivables and prepayments
3,911
(5,177)
(Decrease)/increase in other payables and accrued expenses
(576)
4,216
Net cash flow generated from operating activities
12,921
7,615
Cash flows from investing activities
Acquisition of investment properties
(1,127)
1,653
Capital expenditure
(19,280)
(24,034)
Disposal of investments
7,516
Interest received
4,057
3,222
Net cash used in investing activities
(16,350)
(11,643)
Cash flows from financing activities
Bank loans drawn down
17
14,000
142,520
Bank loans repaid
17
(145,304)
Loan interest and other finance expenses paid
(12,345)
(9,473)
Loan issue costs paid
(980)
Dividends paid in the year
(7,000)
(14,000)
Net cash flow used in financing activities
(5,345)
(27,237)
Net decrease in cash and cash equivalents
(8,774)
(31,265)
Cash and cash equivalents at start of the year
14,341
45,606
Cash and cash equivalents at end of the year
15
5,567
14,341
The accompanying notes on pages 105 to 130 form an integral part of these Financial Statements.
104
Life Science REIT plc
Annual Report and Financial Statements 2024
104
STRATEGIC REPORT
CORPORATE GOVERNANCE
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
105
105
1. General information
Life Science REIT plc (the “Company”) is a closed-ended
Real Estate Investment Trust (“REIT”) incorporated in England
and Wales on 27 July 2021. The Company began trading on
19 November 2021 and its shares are admitted to trading
on the Premium Listing Segment of the Main Market of
the London Stock Exchange. The registered office of the
Company is located at Central Square, 29 Wellington Street,
Leeds, England, LS1 4DL.
The Group’s consolidated Financial Statements for the
year ended 31 December 2024 comprise the results of the
Company and its subsidiaries (together constituting the
“Group”) and were approved by the Board and authorised for
issue on 15 April 2025. The nature of the Group’s operations
and its principal activities are set out in the strategic report on
pages 1 to 61.
2. Basis of preparation
These Financial Statements are prepared in accordance with
United Kingdom adopted International Financial Reporting
Standards and in conformity with the requirements of the
Companies Act 2006. The Financial Statements have been
prepared under the historical cost convention, except for the
revaluation of investment properties and financial instruments
that are measured at revalued amounts or fair values at the
end of each reporting period, as explained in the accounting
policies below. Historical cost is generally based on the fair
value of the consideration given in exchange for goods and
services. The audited Financial Statements are presented
in Pound Sterling and all values are rounded to the nearest
thousand pounds (£’000), except when otherwise indicated.
2.1 Going concern
The Board monitors the Group’s ability to continue as a
going concern. Specifically, at quarterly Board meetings, the
Board reviews summaries of the Group’s liquidity position
and compliance with loan covenants, as well as forecast
financial performance and cash flows. Throughout the period,
the Board met frequently, in conjunction with the Investment
Adviser, to review cash resources and the progress of the
development and repurposing of the investment property
portfolio.
The Group ended the year with £5.6 million of unrestricted
cash and £27.3 million of headroom available under its
debt facilities, of which £15.5 million is available to draw
as at the reporting date with the balance subject to future
asset valuations. These valuations are due to increase as
the development of OTP continues and completes. There
is limited risk that a fall in bank valuations would result in a
liquidity issue in the base and sensitised cases, however
further asset disposals would mitigate this risk. The Group
is operating within its covenants and a sensitivity analysis
has been performed to identify the decrease in valuations
and rental income that would result in a breach of the LTV,
or interest cover covenants. For the HSBC and Bank of
Ireland facility, current bank valuations would need to fall by
28.9% or rents by 26.1%, as at the 2024 year end covenant
test date, before these covenants would be breached. As at
15 April 2025, 100% of rents invoiced in December 2024 in
relation to the quarter to 24 March 2025 were received.
The Board has looked at its forecast cash flow for at least
the next 12 months and under the base case scenario, as
expected, it can meet its covenants and liquidity requirements
within the current facility headroom. The Directors have
reviewed a number of scenarios which included plausible
downside sensitivities in relation to rental cash collection,
making no acquisitions or discretionary capital expenditure,
and minimum dividend distributions under the REIT rules. The
sensitivity analysis also includes, for example, considering
the timing of cash flows on committed capital expenditure at
OTP and assumptions over the commencement and speed
of completion of the work, which impacts the timing of cash
outflows being payable, which is currently not certain.
In combination with this, the Directors note the debt facilities
are due for maturity in June 2026, and will consider the
prospects of any refinancing necessary, and any resultant
liquidity constraints, as part of the strategic review where
individual and collective asset sales are under consideration.
The facility may be refinanced in full, in part at a reduced
amount, or repaid in full depending on the outcome of the
strategic review which will conclude before the refinancing
date. The capital expenditure relating to the development
of OTP is the largest contributor to using up headroom in
the facility across the going concern period, and whilst the
timing of this is not certain as noted above, the Group has
currently forecast that headroom will remain available up to
the refinancing date, based on the Directors’ best estimate of
the build schedule as of the date of approving the Financial
Statements. Should it not, there are mitigating actions
management can take to generate additional liquidity if
necessary which, whilst not entirely within the Board’s control
as there is a reliance on the market, includes disposing of
one or more of the assets as part of the strategic review
considerations.
The Board announced a strategic review on 14 March 2025 to
consider the future of the Group and to explore all strategic
options available to maximise value for shareholders, which
may include a potential sale or a managed wind down.
The Board acknowledges the challenges and significant
headwinds that the Group has faced since IPO, in common
with the wider REIT sector, including higher inflation and
elevated interest rates which have driven a fundamental
slowdown in leasing activity and negatively impacted investor
sentiment. These factors, coupled with the Group's size and
low levels of liquidity have led to an under performance of
the share price, which has, as a result, traded at a significant
discount to net asset value for a prolonged period of time.
This announcement leads to uncertainty over the ownership,
size and scale of the total asset portfolio and the debt
facility that may be needed at the June 2026 refinancing
date. Under the base case, the Directors have a reasonable
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
continued
2. Basis of preparation
expectation that the Group and the Company would have
adequate resources to continue in business for a period of
at least 12 months from the date of approval of the Annual
Report and Financial Statements, given facility headroom
and liquidity remain available. However, the strategic review
announcement in particular leads the Directors to believe that
there exists a material uncertainty that may cast significant
doubt over the Group’s ability to continue to be in operation
for at least the next 12 months, even at the base case, from
the date of approval of the Annual Report and Financial
Statements (see pages 59 to 61 for full details).
2.2 New standards and interpretations effective in
the current period
The following amendments to existing standards, which are
required for the Group’s accounting period beginning on
1 January 2024, have been considered and applied:
• Amendments to IAS 1 Presentation of Financial Statements
clarifies that liabilities are classified as either current or
non-current, depending on the rights that exist at the end
of the reporting period and not expectations of, or actual
events after, the reporting date. The amendments also give
clarification to the definition of settlement of a liability.
• Amendments to IFRS 16 Lease Liability in a Sale and
Leaseback specifies the requirements that a seller-lessee
uses in measuring the lease liability arising in a sale and
leaseback transaction, to ensure the seller-lessee does not
recognise any amount of the gain or loss that relates to the
right of use it retains.
There were no material effects from the adoption of the
above-mentioned amendments to IFRS effective in the
period. They have no significant impact on the Group as they
are either not relevant to the Group’s activities or require
accounting that is already consistent with the Group’s current
accounting policies.
2.3 New and revised accounting standards not yet effective
There are a number of new standards and amendments
to existing standards, which have been published and are
mandatory for the Group’s accounting periods beginning
on, or after, 1 January 2025. The Group is not adopting
these standards early. The following are the most relevant to
the Group:
• Amendments to IAS 21 Lack of Exchangeability to assist
entities in determining whether a currency is exchangeable
into another currency, and the spot exchange rate to use
when it is not.
• IFRS 18 Presentation and Disclosures in Financial
Statements. This is the new standard on presentation and
disclosure in financial statements, which replaces IAS 1, with
a focus on updates to the statement of profit or loss.
• IFRS 19 Subsidiaries without Public Accountability:
Disclosures. This reduces disclosure requirements that
an eligible subsidiary entity is permitted to apply instead
of the disclosure requirements in other IFRS Accounting
Standards.
• Amendments to IFRS 9 Financial Instruments and IFRS
7 Financial Instruments: Disclosures. The amendments
provide clarity on the date of recognition and derecognition
of certain financial instruments and amends/updates the
disclosure required for some financial instruments.
The Directors have yet to assess the full outcome of these
new standards, amendments and interpretations; however,
with the exception of IFRS 18, these other new standards,
amendments and interpretations are not expected to have a
significant impact on the Group’s financial statements.
2.4 Significant accounting judgements and estimates
The preparation of these Financial Statements, in accordance
with IFRS, requires the Directors of the Company to make
judgements, estimates and assumptions that affect the
reported amounts recognised in the Financial Statements.
However, uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to
the carrying amount of the asset or liability in the future.
Judgements
In the course of preparing the Financial Statements, the
Investment Adviser has made the following judgements in the
process of applying the Group’s accounting policies that have
had a significant effect on the amounts recognised in the
Financial Statements.
Business combinations
The Group acquires subsidiaries that own investment
properties. At the time of acquisition, the Group considers
whether each acquisition represents the acquisition of
a business or the acquisition of an asset. Management
considers the substance of the assets and activities of
the acquired entity in determining whether the acquisition
represents the acquisition of a business.
The Group accounts for an acquisition as a business
combination where an integrated set of activities is acquired
in addition to the property. Where such acquisitions are
not judged to be the acquisition of a business, they are not
treated as business combinations. Rather, the cost to acquire
the corporate entity is allocated between the identifiable
assets and liabilities of the entity based upon their relative
fair values at the acquisition date. Accordingly, no goodwill or
additional deferred tax arises.
No corporate acquisitions were made during the year and,
therefore, no business combinations were considered in this
financial year.
Estimates
In the process of applying the Group’s accounting policies,
the Investment Adviser has made the following estimates,
which have the most significant risk of material change to
the carrying value of assets recognised in the consolidated
Financial Statements:
Life Science REIT plc
Annual Report and Financial Statements 2024
106
106
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
107
107
Valuation of property
The valuations of the Group’s investment property are at fair
value as determined by the external valuer on the basis of
market value in accordance with the internationally accepted
RICS Valuation – Professional Standards January 2022
(incorporating the International Valuation Standards) and in
accordance with IFRS 13. The key estimates made by the
valuer are the ERV and equivalent yields of each investment
property.
On-site developments are valued by applying the ‘residual
method’ of valuation, which is the investment method
described above with a deduction for all costs necessary
to complete the development, with a further allowance for
remaining risk and developers’ profit. Properties and land held
for future development are valued using the highest and best
use method, by adopting the residual method allowing for all
associated risks, the investment method or a value per acre
methodology.
See notes 13 and 22 for further details.
2.5 Summary of material accounting policies
The principal accounting policies applied in the preparation
of these Financial Statements are stated in the notes to the
Financial Statements.
a) Basis of consolidation
The Company does not meet the definition of an investment
entity and, therefore, does not qualify for the consolidation
exemption under IFRS 10. The consolidated Financial
Statements comprise the Financial Statements of the
Company and its subsidiaries as at 31 December 2024.
Subsidiaries are consolidated from the date of acquisition,
being the date on which the Group obtained control, and will
continue to be consolidated until the date that such control
ceases. An investor controls an investee when the investor is
exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns
through its power over the investee. In preparing these
Financial Statements, intra-group balances, transactions
and unrealised gains or losses have been eliminated in full.
All non-dormant subsidiaries have the same year end as
the Company. Uniform accounting policies are adopted in
the Financial Statements for like transactions and events in
similar circumstances.
b) Functional and presentation currency
The overall objective of the Group is to generate returns in
Pound Sterling and the Group’s performance is evaluated
in Pound Sterling. Therefore, the Directors consider Pound
Sterling as the currency that most faithfully represents the
economic effects of the underlying transactions, events and
conditions and have therefore adopted it as the functional
and presentation currency.
All values are rounded to the nearest thousand pounds
(£’000), except when otherwise stated.
c) Segmental reporting
The Directors are of the opinion that the Group is engaged
in a single segment of business, being the investment and
management of premises relating to the life science sector.
d) Derivative financial instruments
Derivative financial instruments, comprising interest rate
derivatives for mitigating interest rate risks, are initially
recognised at fair value and are subsequently measured
at fair value, being the estimated amount that the Group
would receive or pay to terminate the agreement at the
period end date, taking into account current interest rate
expectations and the current credit rating of the Group and its
counterparties. Premiums payable under such arrangements
are initially capitalised into the statement of financial position.
The Group uses valuation techniques that are appropriate in
the circumstances and for which sufficient data is available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs
significant to the fair value measurement as a whole. Changes
in fair value of interest rate derivatives are recognised within
finance expenses in profit or loss in the period in which
they occur.
e) Exceptional costs
Items are classified as exceptional by virtue of their
size, nature or incidence, where their inclusion would
otherwise distort the underlying recurring earnings of the
Group. Examples include, but are not limited to, business
transformation costs, early redemption costs of financial
instruments and tax charges specific to disposals. Exceptional
costs are excluded from the Group’s adjusted earnings.
2. Basis of preparation
continued
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
3. Revenue
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Rental income
15,652
14,584
Other income
506
521
Insurance recharged
164
143
Rental income straight-line adjustment
33
233
Gross property income
16,355
15,481
Service charge income
3,953
4,461
Total
20,308
19,942
Accounting policy
Rental and other income arising from operating leases on investment property is accounted for on a straight-line basis over
the lease term, and is included in gross property income in the Group consolidated statement of profit or loss and other
comprehensive income. Initial direct costs incurred in negotiating and arranging an operating lease are recognised as an
expense over the lease term on the same basis as the lease income. Rental and other income is invoiced in advance and
for all rental and other income that relates to a future period, this is deferred and appears with current liabilities on the Group
statement of financial position.
For leases that contain fixed or minimum uplifts, the rental income arising from such uplifts is recognised on a straight-line basis
over the lease term.
Occupier lease incentives are recognised as an adjustment of rental revenue on a straight-line basis over the term of the lease.
The lease term is the non-cancellable period of the lease together with any further term for which the occupier has the option
to continue the lease, where at the inception of the lease, the Directors are reasonably certain that the tenant will exercise
that option.
Amounts received from occupiers to terminate leases or to compensate for dilapidations are recognised in the Group
consolidated statement of profit or loss and other comprehensive income when the right to receive them arises.
Service charge income is recognised when the related recoverable expenses are incurred. The Group acts as the principal
in service charge transactions, as it directly controls the delivery of the services at the point at which they are provided to
the occupier.
108
108
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
109
109
4. Property operating and administration expenses
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Recoverable service charges
3,953
4,461
Service charge void costs
665
1,120
Premises expenses
662
591
Rates
378
457
Insurance expense
198
153
Bad debt charge/(write back)
28
(665)
Property operating expenses
1,931
1,656
Investment Adviser fees
2,979
3,389
Other administration expenses
1,473
1,500
Directors’ remuneration (see note 5)
201
200
Audit fees (see note 6)
185
172
Cost associated with moving to Main Market
(12)
Administration expenses
4,838
5,249
Total
10,722
11,366
Accounting policy
All property operating expenses and administration expenses are charged to the consolidated statement of profit or loss and
other comprehensive income and are accounted for on an accruals basis.
Property expenses are costs incurred by the Group that are not directly recoverable from an occupier, as well as professional
fees relating to the letting of our estates.
Further information on the calculation of the Investment Adviser fees is set out in note 27.
5. Directors’ remuneration
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Claire Boyle
55
55
Richard Howell
45
45
Sally Ann Forsyth
40
40
Michael Taylor
40
40
Employers’ National Insurance contributions
21
20
Total
201
200
A summary of the Directors’ emoluments, including the disclosures required by the Companies Act 2006, is set out in the
Directors’ remuneration report on pages 84 to 87. The Group had no employees in the year.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
110
110
6. Auditor’s remuneration
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Audit fee
185
172
Total
185
172
The Group reviews the scope and nature of all proposed non-audit services before engagement, to ensure that the
independence and objectivity of the Auditor are safeguarded. Audit fees are comprised of the following items:
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Audit of Group Annual Report and Financial Statements
1
185
172
Total
185
172
1
Split as audit fees of £182,250 (2023: £172,000) plus recharged disbursements of £2,511 (2023: £nil).
The Auditor has not undertaken any non-audit services during the year (2023: £nil). The Audit and Risk Committee has
considered the independence and objectivity of the Auditor and has conducted a review of services, which the Auditor has
provided during the year under review. The Audit and Risk Committee receives an annual assurance from the Auditor that its
independence is not compromised.
7. Finance income
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Interest receivable from interest rate derivatives
3,858
3,019
Change in fair value of deferred consideration on interest rate derivatives
195
152
Income from cash and short-term deposits
150
636
Total
4,203
3,807
Accounting policy
Interest income is recognised on an effective interest rate basis and is shown within the Group consolidated statement of profit
or loss and other comprehensive income as finance income.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
111
111
8. Finance expenses
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Loan interest
9,221
8,209
Change in fair value of interest rate derivatives
2,649
3,936
Loan arrangement fees amortised
320
458
Loan expenses
286
261
Break fees
751
Loan arrangement fees written off
716
Gross interest costs
12,476
14,331
Capitalisation of finance costs
(2,086)
(3,261)
Total
10,390
11,070
Accounting policy
Any finance costs that are separately identifiable and directly attributable to an asset, which takes a period of time to complete,
are amortised as part of the cost of the asset. All other finance costs are expensed in the period in which they occur. Finance
costs consist of interest and other costs that an entity incurs in connection with bank and other borrowings. Finance costs have
been capitalised in the period in accordance with the accounting policy detailed in note 17.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
9. Taxation
Corporation tax has arisen as follows:
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Corporation tax on residual income
(146)
Total
(146)
Reconciliation of tax charge to profit before tax:
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Loss before tax
(13,977)
(21,852)
Corporation tax at 25.0% (2023: 23.5%)
(3,494)
(5,135)
Change in value of investment properties
4,344
5,369
Change in value of interest rate derivatives
613
(888)
Adjustment for disallowable costs
(3)
Tax-exempt property rental business
(1,463)
657
Current year tax charge
Prior year accrual reversal
(146)
Total
(146)
Accounting policy
Corporation tax is recognised in the consolidated statement of comprehensive income except where in certain circumstances
corporation tax may be recognised in other comprehensive income.
As a REIT, the Group is exempt from corporation tax on the profits and gains from its property rental business, provided it
continues to meet certain conditions as per the REIT regulations.
Non-qualifying profits and gains of the Group continue to be subject to corporation tax. Therefore, current tax is the expected
tax payable on the non-qualifying taxable income for the period, if applicable, using tax rates enacted, or substantively enacted,
at the balance sheet date.
112
112
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
113
113
10. Operating leases
Operating lease commitments – as lessor
The Group has entered into commercial property leases on its investment property portfolio. These non-cancellable leases
have a remaining term of up to 20 years (31 December 2023: 21 years).
Future minimum rentals receivable under non-cancellable operating leases as at 31 December 2024 are as follows:
As at
As at
31 December
31 December
2024
2023
Within one year
15,384
15,008
Between one and five years
38,974
44,625
More than five years
31,133
31,771
Total
85,491
91,404
11. Dividends
Pence
For the year ended 31 December 2024
per share
£’000
Second interim dividend for year ended 31 December 2023, paid on 13 May 2024
1.0
3,500
First interim dividend for year ended 31 December 2024, paid on 31 October 2024
1.0
3,500
Total
2.0
7,000
Paid as:
Property income distribution
Non-property income distribution
2.0
7,000
Total
2.0
7,000
Pence
For the year ended 31 December 2023
per share
£’000
Second interim dividend for year ended 31 December 2022, paid on 15 May 2023
3.0
10,500
First interim dividend for year ended 31 December 2023, paid on 31 October 2023
1.0
3,500
Total
4.0
14,000
Paid as:
Property income distribution
Non-property income distribution
4.0
14,000
Total
4.0
14,000
Accounting policy
Dividends due to the Company’s shareholders are recognised when they become payable.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
12. Earnings per share (“EPS”)
Basic EPS is calculated by dividing profit for the year attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares during the year. As there are no dilutive instruments in issue, basic and diluted EPS
are identical.
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
IFRS earnings
(13,977)
(21,706)
EPRA earnings adjustments:
Fair value losses on investment properties
17,376
22,848
Realised losses on disposal of investment properties
317
Exceptional finance costs greater than one year
716
Changes in fair value of interest rate derivatives
2,649
3,936
Changes in fair value of deferred consideration payable on interest rate derivatives
(195)
(152)
EPRA earnings
5,853
5,959
Group-specific earnings adjustments:
Exceptional finance costs less than one year
751
Cost associated with moving to Main Market
(12)
Adjusted earnings
5,853
6,698
Year ended
Year ended
31 December
31 December
2024
2023
Pence
Pence
Basic IFRS EPS
(4.0)
(6.2)
Diluted IFRS EPS
(4.0)
(6.2)
EPRA EPS
1.7
1.7
Adjusted EPS
1.7
1.9
Year ended
Year ended
31 December
31 December
2024
2023
Number
Number
of shares
of shares
Weighted average number of shares in issue (thousands)
350,000
350,000
114
114
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
115
115
13. Investment property
Completed
Development
Total
investment
property
investment
property
and land
property
£’000
£’000
£’000
Investment property valuation brought forward as at 1 January 2024
314,858
67,442
382,300
Acquisitions
1
(218)
(218)
Disposals in the year
Capital expenditure
5,493
13,048
18,541
Finance costs capitalised
61
2,025
2,086
Fair value losses on investment property
(12,511)
(4,865)
(17,376)
Movement in rent incentives and amortisation
(256)
143
(113)
Transfer from development to investment
3
21,246
(21,246)
Fair value at 31 December 2024
328,673
56,547
385,220
Completed
Development
Total
investment
property
investment
property
and land
property
£’000
£’000
£’000
Investment property valuation brought forward as at 1 January 2023
309,969
77,581
387,550
Acquisitions
1
(759)
(21)
(780)
Disposals in the year
2
(7,833)
(7,833)
Capital expenditure
2,410
20,373
22,783
Finance costs capitalised
3,261
3,261
Fair value losses on investment property
(18,182)
(4,666)
(22,848)
Movement in rent incentives and amortisation
167
167
Transfer from development to investment
3
29,086
(29,086)
Fair value at 31 December 2023
314,858
67,442
382,300
1
During 2024, there were no acquisitions of new assets. The movement reflected relates to the finalisation of acquisition balances from prior years.
2
During the year ended 31 December 2023, Lumen House was disposed of for gross consideration of £7.7 million, £7.5 million net of transaction fees. After writing
off the disposal value in the year of £7.8 million, a loss of £0.3 million was recognised in the consolidated statement of profit or loss and other comprehensive
income.
3
Following practical completion of Building 5 at OTP during the year ended 31 December 2024, the property became income-producing, resulting in a transfer
from development property and land to completed investment property. During the year ended 31 December 2023, practical completion of the IQ (Buildings 4A
and 4B) at Oxford Technology Park occurred, resulting in a transfer of those buildings from development property and land to completed investment property.
Accounting policy
Investment property comprises property held to earn rental income or for capital appreciation, or both. Investment property is
recognised upon legal completion of the contract, where costs are reliably measured and future economic benefits that are
associated with the property flow to the entity. Investment property is measured initially at cost including transaction costs.
Transaction costs include transfer taxes and professional fees to bring the property to the condition necessary for it to be
capable of operating. The carrying amount also includes the cost of replacing part of an existing investment property at the time
that cost is incurred if the recognition criteria are met.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
Development property and land is where the whole or a material part of an estate is identified as having potential for
development. Assets are classified as such until development is completed, and they have the potential to be fully income
generating. Development property and land is measured at fair value if the fair value is considered to be reliably determinable.
Where the fair value cannot be determined reliably, but where it is expected that the fair value of the property will be reliably
determined when construction is completed, the property is measured at cost less any impairment until the fair value
becomes reliably determinable or construction is completed, whichever is earlier. It is the Group’s policy not to capitalise
overheads or operating expenses and no such costs were capitalised in either the year ended 31 December 2024 or the
year ended 31 December 2023; however £2.1 million (2023: £3.3 million) of finance costs have been capitalised in the year to
31 December 2024. Refer to note 17 for more details.
Subsequent to initial recognition, investment property is stated at fair value (see note 22). Gains or losses arising from changes
in the fair values are included in the consolidated statement of profit or loss and other comprehensive income in the period in
which they arise under IAS 40 Investment Property.
Investment properties cease to be recognised when they have been disposed of, or withdrawn permanently from use, and no
future economic benefit is expected. Gains or losses on the disposal of investment property are determined as the difference
between net disposal proceeds and the carrying value of the asset.
Movements in rent incentives are presented within the total portfolio valuation.
14. Trade and other receivables
31 December
31 December
2024
2023
£’000
£’000
Rent and insurance receivable
2,333
2,065
Prepayments and other receivables
964
2,230
Interest receivable
714
763
Occupier deposits
180
173
Amounts due from property manager
5
991
VAT receivable
434
Current trade and other receivables
4,196
6,656
Occupier deposits
3,826
3,409
Non-current trade and other receivables
3,826
3,409
Total trade and other receivables
8,022
10,065
Accounting policy
Rent and other receivables are recognised at their original invoiced value and become due based on the terms of the
underlying lease or at the date of invoice.
The Group carries out an assessment of expected credit losses at each period end, using the IFRS 9 simplified approach, where
a lifetime expected loss allowance is recognised over the expected life of the financial instrument. Adjustments are recognised
in the income statement as an impairment gain or loss. The rent and insurance receivable represents gross receivables of
£2.4 million (31 December 2023: £2.1 million) and a provision for doubtful debts of £0.1 million (31 December 2023: £nil).
Collections for the year are 99.8% and all historic arrears have been collected, thus no further expected credit loss provision
analysis is deemed necessary.
The Group considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Group in
full. The Group writes off trade receivables when there is no reasonable expectation of recovery.
13. Investment property
continued
116
116
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
117
117
15. Cash and cash equivalents
Year ended
Year ended
31 December
31 December
2024
2023
£’000
£’000
Cash
3,567
4,341
Cash equivalents
2,000
10,000
Total
5,567
14,341
Cash equivalents includes £2.0 million (2023: £10.0 million) of cash held by various banks on short-term deposits.
Accounting policy
Cash and cash equivalents comprise cash at bank and short-term deposits with banks and other financial institutions, with an
initial maturity of three months or less.
16. Interest rate derivatives
31 December
31 December
2024
2023
£’000
£’000
At the start of the year
3,998
4,303
Additional premiums paid and accrued
1,351
3,631
Changes in fair value of interest rate derivatives
(2,649)
(3,936)
Termination of caps
(322)
Balance at the end of the year
2,378
3,998
Current
2,378
Non-current
3,998
Balance at the end of the year
2,378
3,998
To mitigate the interest rate risk that arises as a result of entering into variable rate linked loans, the Group enters into interest
rate derivatives.
A number of forward starting interest rate caps were entered into as at 26 June 2023 for a total deferred premium of
£3.6 million to align with the expected debt draw down of the debt facility. This caps SONIA at a strike rate of 2.00% with a
termination date of March 2025 (aligned with the cap entered into in 2022). During 2024, two further interest rate caps were
entered into:
• In September 2024, for a premium of £0.6 million, a six-month hedge was entered into capping SONIA at a strike rate of
3.00% from 1 April 2025 to 30 September 2025. At the same time, the notional of the forward starting caps terminating in
March 2025 was reduced in line with updated debt draw down assumptions resulting in a termination value of £0.3 million
as above.
• In December 2024, for a deferred premium of £0.8 million, a three-month hedge was entered into capping SONIA at a strike
rate of 2.00% from 1 October 2025 to 31 December 2025.
Accounting policy
Interest rate derivatives are initially recognised at fair value and are subsequently measured at fair value, being the estimated
amount that the Group would receive or pay to terminate the agreement at the year end date, taking into account current
interest rate expectations and the current credit rating of the Group and its counterparties. Premiums payable under such
arrangements are initially capitalised into the statement of financial position.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs significant
to the fair value measurement as a whole. Changes in fair value of interest rate derivatives are recognised within finance
expenses in profit or loss in the period in which they occur.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
118
118
17. Interest-bearing loans and borrowings
31 December
31 December
2024
2023
Non-current
£’000
£’000
At the beginning of the year
108,726
75,000
Drawn in the year
14,000
142,520
Repaid in the year
(108,794)
Interest-bearing loans and borrowings
122,726
108,726
Unamortised fees at the beginning of the year
(808)
(912)
Loan arrangement fees paid in the year
(980)
Unamortised fees written off
716
Amortisation charge for the year
320
368
Unamortised loan arrangement fees
(488)
(808)
Loan balance less unamortised loan arrangement fees
122,238
107,918
31 December
31 December
2024
2023
Current
£’000
£’000
At the beginning of the year
35,833
Repaid in the year
(36,510)
Interest and commitment fees incurred in the year
677
Interest-bearing loans and borrowings
Unamortised fees at the beginning of the year
(90)
Amortisation charge for the year
90
Unamortised loan arrangement fees
Loan balance less unamortised loan arrangement fees
The Company has a debt facility with HSBC and Bank of Ireland (“BOI”) split 60% and 40%, respectively (the “debt facility”).
The debt facility comprises a £100.0 million term loan and £50.0 million revolving credit facility (“RCF”) with an expiry date of
23 June 2026. It has an interest rate in respect of drawn amounts of 250 basis points over SONIA and is secured on all of the
assets of the Group, including Oxford Technology Park (“OTP”). The debt facility borrowers are Ironstone Life Science Holdings
Limited and Oxford Technology Park Holdings Limited, both direct subsidiaries of the Company. The £100.0 million term loan
was fully drawn during 2024. The RCF is being drawn to fund the OTP development and other refurbishment projects, with
£22.7 million drawn at the year ended 31 December 2024 (31 December 2023: £8.7 million) and a remaining £27.3 million
available to utilise (31 December 2023: £41.3 million). The Group also has a £35.0 million accordion facility available on the RCF,
which has not been utilised as at 31 December 2024.
The debt facility includes LTV and interest cover covenants. The Group is in full compliance with all loan covenants as at
31 December 2024. The facility also includes a ratchet clause that reduces the margin to 2.35% if the gross LTV decreases to
30%, based on the lenders’ annual valuation of the portfolio.
The Group has also defined £40.0 million of the term loan as a Green Loan in accordance with the LMA Green Loan Principles.
This is secured on Rolling Stock Yard and completed OTP buildings, which are rated either BREEAM Excellent or EPC A.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
119
119
17. Interest-bearing loans and borrowings
continued
Accounting policy
Loans and borrowings are initially recognised at the proceeds received net of directly attributable transaction costs. Loans and
borrowings are subsequently measured at amortised cost. Interest on the HSBC and BOI facility is charged to the consolidated
statement of profit or loss and other comprehensive income at the effective interest rate and shown within finance costs. The
effective interest rate is calculated as the daily SONIA rate plus the facility margin. Transaction costs are amortised over the term
of the loan.
Where a property is being developed or undergoing major refurbishment, finance costs associated with direct expenditure on
the property are capitalised. Capitalisation commences when the activities to develop the property start and continues until the
property is substantially ready for its intended use, normally practical completion.
Capitalised finance costs are calculated at the Group’s weighted average interest rate.
18. Other payables and accrued expenses
31 December
31 December
2024
2023
£’000
£’000
Deferred income
4,222
3,686
Capital expenses payable
1,943
4,046
Deferred consideration on interest rate caps
1,922
2,636
Loan interest payable
1,809
1,823
Administration and other expenses payable
1,101
1,753
Accounts payable
761
Property operating expenses payable
389
320
Occupier deposits payable to occupier
180
173
VAT payable
28
Current other payables and accrued expenses
12,355
14,437
Occupier deposits payable to occupier
3,826
3,409
Deferred consideration on interest rate caps
1,195
Non-current other payables and accrued expenses
3,826
4,604
Total other payables and accrued expenses
16,181
19,041
Accounting policy
Other payables and accrued expenses are initially recognised at fair value and subsequently held at amortised cost.
Deferred income is rental income invoiced to the occupier but relates to future accounting periods. The income is deferred and
is unwound to revenue on a straight-line basis over the period in which it is earned.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
19. Share capital
Share capital is the nominal amount of the Company’s ordinary shares in issue.
31 December 2024
31 December 2023
Ordinary shares of £0.01 each
Number
£’000
Number
£’000
Authorised, issued and fully paid:
Shares issued
350,000,000
3,500
350,000,000
3,500
Balance at the end of the year
350,000,000
3,500
350,000,000
3,500
The share capital comprises one class of ordinary shares. At general meetings of the Company, ordinary shareholders
are entitled to one vote on a show of hands and on a poll for every share held. There are no restrictions on the size of a
shareholding or the transfer of shares, except for the UK REIT restrictions.
Accounting policy
Share capital is the nominal amount of the Company’s ordinary shares in issue.
20. Retained earnings
Retained earnings comprise the following cumulative amounts:
31 December
31 December
2024
2023
£’000
£’000
Total unrealised loss on investment properties
(63,500)
(46,124)
Total unrealised loss on interest rate derivatives and deferred consideration
(4,083)
(1,629)
Total realised gains
12,028
6,175
Retained earnings
(55,555)
(41,578)
Accounting policy
Retained earnings represent the profits of the Group less dividends paid from revenue profits to date. Unrealised gains/(losses)
on the revaluation of investment properties, interest rate derivatives and deferred consideration contained within this reserve
are not distributable until any gains crystallise on the sale of the investment property and interest rate caps.
As at 31 December 2024, the Company had distributable reserves available of £326.9 million (2023: £328.0 million).
120
120
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
121
121
21. Net asset value per share
Basic NAV per share amounts are calculated by dividing net assets attributable to ordinary equity holders of the Company in
the statement of financial position by the number of ordinary shares outstanding at the end of the year. As there are no dilutive
instruments in issue, basic and diluted NAV per share are identical.
EPRA net tangible assets (“EPRA NTA”) is calculated using property values in line with IFRS, where values are net of real estate
transfer tax (“RETT”) and other purchasers’ costs. EPRA NTA is considered to be the most relevant measure for the Group’s
operating activities.
31 December
31 December
2024
2023
£’000
£’000
IFRS net assets attributable to ordinary shareholders
262,768
283,745
IFRS net assets for calculation of NAV
262,768
283,745
Adjustment to net assets:
Fair value of interest rate derivatives
(2,378)
(3,998)
EPRA NTA
260,390
279,747
31 December
31 December
2024
2023
Pence
Pence
IFRS basic and diluted NAV per share (pence)
75.1
81.1
EPRA NTA per share (pence)
74.4
79.9
31 December
31 December
2024
2023
Number
Number
of shares
of shares
Number of shares in issue (thousands)
350,000
350,000
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
122
122
22. Fair value
IFRS 13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The following methods and assumptions were used to
estimate the fair values.
The fair value of cash and short-term deposits, trade receivables, trade payables and other current liabilities approximate their
carrying amounts due to the short-term maturities of these instruments.
Interest-bearing loans and borrowings are disclosed at amortised cost. The carrying values of the loans and borrowings
approximate their fair value due to the contractual terms and conditions of the loan. The HSBC and BOI debt facility has an
interest rate of 250 basis points over SONIA in respect of drawn amounts.
The fair value of the interest rate contracts is recorded in the statement of financial position and is revalued quarterly by an
independent valuations specialist, Chatham Financial.
Six-monthly valuations of investment property are performed by CBRE, accredited external valuers with recognised and relevant
professional qualifications and recent experience of the location and category of the investment property being valued, on a
variable fee basis. However, the valuations are the ultimate responsibility of the Director who appraises these every six months.
The valuation of the Group’s investment property at fair value is determined by the external valuer on the basis of market value
in accordance with the internationally accepted RICS Valuation – Professional Standards January 2022 (incorporating the
International Valuation Standards).
Completed investment properties are valued by adopting the ‘income capitalisation’ method of valuation. This approach
involves applying capitalisation yields to current and future rental streams, net of income voids arising from vacancies or
rent-free periods and associated running costs. These capitalisation yields and future rental values are based on comparable
property and leasing transactions in the market using the valuer’s professional judgement and market observations.
Other factors taken into account in the valuations include the tenure of the property, tenancy details and ground and
structural conditions.
On-site developments are valued by applying the ‘residual method’ of valuation, which is the investment method described
above with a deduction for all costs necessary to complete the development, with a further allowance for remaining risk and
developers’ profit. Properties and land held for future development are valued using the highest and best use method, by
adopting the residual method allowing for all associated risks, the investment method or a value per acre methodology.
The following table shows an analysis of the fair values of investment properties recognised in the statement of financial
position by level of the fair value hierarchy
1
:
31 December 2024
Level 1
Level 2
Level 3
Total
Assets and liabilities measured at fair value
£’000
£’000
£’000
£’000
Investment properties
385,220
385,220
Interest rate derivatives
2,378
2,378
Deferred consideration on interest rate caps
(1,922)
(1,922)
Total
456
385,220
385,676
31 December 2023
Level 1
Level 2
Level 3
Total
Assets and liabilities measured at fair value
£’000
£’000
£’000
£’000
Investment properties
382,300
382,300
Interest rate derivatives
3,998
3,998
Deferred consideration on interest rate caps
(3,831)
(3,831)
Total
167
382,300
382,467
1
Explanation of the fair value hierarchy:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 – use of a model with inputs (other than quoted prices included in Level 1) that are directly or indirectly observable market data; and
Level 3 – use of a model with inputs that are not based on observable market data.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
123
123
22. Fair value
continued
There have been no transfers between Level 1 and Level 2 during either year, nor have there been any transfers in or out of
Level 3.
Sensitivity analysis to significant changes in unobservable inputs within the valuation of investment properties
The following table analyses:
• the fair value measurements at the end of the reporting year;
• a description of the valuation techniques applied;
• the inputs used in the fair value measurement, including the ranges of rent charged to different units within the same
building; and
• for Level 3 fair value measurements, quantitative information about significant unobservable inputs used in the fair value
measurement.
Key
Fair value
Valuation
unobservable
31 December 2024
£’000
technique
inputs
Range
Completed investment property
1
£328,673
Income
ERV
£15.4–£110.0
capitalisation
per sq ft
Equivalent yield
5.05%–7.25%
Development property
£50,972
Income
ERV
£20.0 per sq ft
capitalisation/
residual method
Equivalent yield
5.05%–5.75%
Development land
£5,575
Comparable
Sales rate
£63.7 per sq ft
method/
per sq ft
residual method
Total
£385,220
Key
Fair value
Valuation
unobservable
31 December 2023
£’000
technique
inputs
Range
Completed investment property
£314,858
Income
ERV
£16.0–£115.0
capitalisation
per sq ft
Equivalent yield
4.75%–7.25%
Development property
£58,930
Income
ERV
£20.0 per sq ft
capitalisation/
residual method
Equivalent yield
5.25%–5.70%
Development land
£8,512
Comparable
Sales rate
£102.4 per sq ft
method/
per sq ft
residual method
Total
£382,300
1
ERV range excludes one unit which has an ERV of £nil.
Significant increases/decreases in the ERV (per sq ft per annum) and rental growth per annum in isolation would result in a
significantly higher/lower fair value measurement. Significant increases/decreases in the long-term vacancy rate and discount
rate (and exit yield) in isolation would result in a significantly lower/higher fair value measurement.
Generally, a change in the assumption made for the ERV (per sq ft per annum) is accompanied by:
• a similar change in the rent growth per annum and discount rate (and exit yield); and
• an opposite change in the long-term vacancy rate.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
The table below sets out a sensitivity analysis for each of the key sources of estimation uncertainty with the resulting increase/
(decrease) in the fair value of completed investment property:
As at 31 December 2024
Increase in
Decrease in
sensitivity
sensitivity
Completed investment property
£’000
£’000
Change in ERV of 10%
32,867
(32,867)
Change in net equivalent yields of 50 basis points
(31,077)
37,251
Increase in
Decrease in
sensitivity
sensitivity
Development property
£’000
£’000
Change in ERV of 10%
5,097
(5,097)
Change in net equivalent yields of 50 basis points
(5,042)
6,032
Increase in
Decrease in
sensitivity
sensitivity
Development land
£’000
£’000
Change in sales rate per sq ft of 10%
558
(558)
As at 31 December 2023
Increase in
Decrease in
sensitivity
sensitivity
Completed investment property
£’000
£’000
Change in ERV of 10%
31,486
(31,486)
Change in net equivalent yields of 50 basis points
(29,733)
35,987
Increase in
Decrease in
sensitivity
sensitivity
Development property
£’000
£’000
Change in ERV of 10%
5,893
(5,893)
Change in net equivalent yields of 50 basis points
(6,829)
8,190
Increase in
Decrease in
sensitivity
sensitivity
Development land
£’000
£’000
Change in sales rate per sq ft of 10%
851
(851)
Gains and losses recorded in profit or loss for recurring fair value measurements categorised within Level 3 of the fair value
hierarchy amount to a loss of £17.4 million (31 December 2023: loss of £22.8 million) and are presented in the consolidated
statement of profit or loss and other comprehensive income in line item ‘fair value gains/(losses) on investment properties’.
All gains and losses recorded in the consolidated statement of profit or loss and other comprehensive income for recurring fair
value measurements categorised within Level 3 of the fair value hierarchy, are attributable to changes in unrealised gains or
losses relating to investment property held at the end of the reporting year.
The carrying amount of the Group’s other assets and liabilities is considered to be the same as their fair value.
22. Fair value
continued
124
124
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
125
125
23. Financial risk management objectives and policies
The Group has trade and other receivables, trade and other payables, and cash and short-term deposits that arise directly from
its operations.
The Group is exposed to market risk, interest rate risk, credit risk and liquidity risk. The Board of Directors reviews and agrees
policies for managing each of these risks, which are summarised below.
Market risk
Market risk is the risk that future values of investments in property and related investments will fluctuate due to changes in
market prices. The total exposure in the consolidated statement of financial position at the year ended 31 December 2024 is
£385.2 million (31 December 2023: £382.3 million) and to manage this risk, the Group diversifies its portfolio across a number
of assets. The Group’s investment policy is to invest in UK-located life science assets. The Group will invest and manage its
portfolio with an objective of spreading risk and, in doing so, will maintain the following investment restrictions:
• No individual building will represent more than 25% of gross asset value.
• The Company will target a portfolio with no one occupier accounting for more than 20% (but subject to a maximum of 30%) of
the higher of either (i) gross contracted rents or (ii) the valuer’s ERV of the Company’s portfolio, including developments under
forward-funding agreements, as calculated at the time of investing or leasing.
• The aggregate maximum exposure to assets under development, including forward fundings, will not exceed 30% of gross
asset value. Within this limit, the maximum exposure to developments, as measured by the expected gross development cost,
which are not under forward-funded arrangements, will not exceed 15% of gross asset value at the commencement of the
relevant development.
• No more than 10% of gross asset value will be invested in properties that are not life science properties.
Credit risk
Credit risk is the risk that a counterparty or occupier will cause a financial loss to the Group by failing to meet a commitment it
has entered into with the Group.
All cash deposits are placed with approved counterparties, all of whom have a credit rating of AA- or above. In respect of
property investments, in the event of a default by an occupier, the Group will suffer a shortfall and additional costs concerning
reletting of the property. The Investment Adviser monitors the occupier arrears in order to anticipate and minimise the impact of
defaults by occupational occupiers. For further details on the Group’s expected credit loss policy, see note 14.
The following table analyses the Group’s maximum exposure to credit risk:
31 December
31 December
2024
2023
£’000
£’000
Cash and cash equivalents
5,567
14,341
Trade and other receivables
1
3,118
5,300
Total
8,685
19,641
1
Excludes prepayments, occupier deposits and VAT receivable.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
continued
23. Financial risk management objectives and policies
Interest rate risk
Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest
rates. The Group’s exposure to the risk of changes in market interest rates relates to its variable rate bank loans. To mitigate
the interest rate risk that arises as a result of entering into variable rate linked loans, the Group has entered into interest rate
derivatives. As at 31 December 2024, there were four interest rate derivatives in place:
• In August 2022, additional protection was secured against potential future interest rate rises through capping the SONIA
rate at 2.00% until 31 March 2025 on the £75.0 million HSBC term loan at a premium of £2.3 million. This remained in place
following the refinancing with HSBC and BOI in June 2023, which resulted in an increase in the term loan to £100.0 million and
reduction in the RCF facility to £50.0 million.
• Following the refinancing with HSBC and BOI, in June 2023, a number of forward starting interest rate caps were entered into
for a total deferred premium of £3.6 million to align with the expected debt draw down of the RCF and hedge the remaining
£25.0 million term loan. This caps SONIA at a strike rate of 2.00% with a termination date of 31 March 2025.
• In September 2024, for a premium of £0.6 million, a six-month hedge was entered into, capping SONIA at a strike rate of
3.00% from 1 April 2025 to 30 September 2025.
• In December 2024, for a deferred premium of £0.8 million, a three-month hedge was entered into, capping SONIA at a strike
rate of 2.00% from 1 October 2025 to 31 December 2025.
Changes in interest rates may have an impact on consolidated earnings over the longer term. The table below provides
indicative sensitivity data.
2024
2023
Increase in
Decrease in
Increase in
Decrease in
interest rates
interest rates
interest rates
interest rates
by 1%
by 1%
by 1%
by 1%
Effect on profit before tax
£’000
£’000
£’000
£’000
(Decrease)/increase
(119)
118
(1,475)
1,446
Foreign exchange rate risk
Management has considered the risks but has not deemed them material for the business, as the Group’s exposure to foreign
exchange rate risk as at 31 December 2024 and 31 December 2023 was minimal.
Liquidity risk
Liquidity risk is defined as the risk that the Group will encounter difficulty in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset. Exposure to liquidity risk arises because of the possibility
that the Group could be required to pay its liabilities earlier than expected. The Group’s objective is to maintain a balance
between continuity of funding and flexibility through the use of bank deposits and loans.
Set out below is a comparison, by class, of the carrying amounts and fair value of the Group’s financial instruments that are
carried in the financial statements:
2024
2023
Fair
Carrying
Fair
Carrying
Fair
value
value
value
Fair
value
value
hierarchy
£’000
£’000
value
£’000
£’000
Held at amortised cost
Cash and cash equivalents
n/a
5,567
5,567
n/a
14,341
14,341
Trade and other receivables
1
n/a
7,124
7,124
n/a
9,316
9,316
Other payables and accrued
n/a
(11,959)
(11,959)
n/a
(15,355)
(15,355)
expenses
2
Interest-bearing loans and borrowings
n/a
(122,238)
(122,238)
n/a
(107,918)
(107,918)
Held at fair value
Interest rate derivatives
n/a
2,378
2,378
n/a
3,998
3,998
1
Excludes prepayments.
2
Life Science REIT plc
Annual Report and Financial Statements 2024
126
126
Excludes deferred income.
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
127
127
23. Financial risk management objectives and policies
continued
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments:
Less
Three
than three
to 12
One to
Two to
More than
months
months
two years
five years
five years
Total
Year ended 31 December 2024
£’000
£’000
£’000
£’000
£’000
£’000
Other payables and accrued
6,844
1,653
1,934
516
1,376
12,323
expenses
1
Interest-bearing loans and borrowings
1,438
4,931
125,504
131,873
Total
8,282
6,584
127,438
516
1,376
144,196
Less
Three
than three
to 12
One to
Two to
More than
Company
months
months
two years
five years
five years
Total
Other payables and accrued
7,976
2,775
1,318
2,355
1,054
15,478
expenses
1
Interest-bearing loans and borrowings
1,336
4,036
5,357
110,017
120,746
Total
9,312
6,811
6,675
112,372
1,054
136,224
1
Excludes deferred income and fair value adjustment on the deferred consideration payable on cap premiums.
24. Subsidiaries
Number and
Country of
Country of
class of
incorporation
Registration
share held by
Group
Company
and operation
Number
the Group
holding
Ironstone Life Science Holdings Limited
2
UK
13390321
1,000
100%
ordinary shares
Ironstone Life Science Cambourne Two Limited
1, 2
UK
13779806
1 ordinary share
100%
Ironstone Life Science Cambourne Limited
1, 2
UK
13763082
1 ordinary share
100%
Ironstone Life Science RSY Limited
1, 2
UK
13763039
1 ordinary share
100%
Ironstone Life Science Merrifield Limited
1, 2
UK
13763037
1 ordinary share
100%
Merrifield Centre Limited
1, 2, 4
UK
11118349
21,786,493
100%
ordinary shares
Ironstone Life Science Herbrand Limited
1, 2
UK
14044299
1 ordinary share
100%
Herbrand Properties Limited
1, 3
BVI
1908435
6,000
100%
ordinary shares
Oxford Technology Park Holdings Limited
2
UK
12434159
92
100%
ordinary shares
Oxford Technology Park Limited
1, 2
UK
08483449
100
100%
ordinary shares
Oxford Technology Park Investments Limited
1, 2
UK
12442240
1 ordinary share
100%
1
Indirect subsidiaries.
2
Registered office: Radius House, 51 Clarendon Road, Watford, WD17 1HP.
3
Registered office: Nerine Chambers, P.O. Box 905, Road Town, Tortola, 1110, British Virgin Islands.
4
Merrifield Centre Limited was liquidated on 21 January 2025.
A list of all related undertakings included within these consolidated Financial Statements is noted above. The principal activity of
all the subsidiaries relates to property investment.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
The Group consists of a parent company, Life Science REIT
plc, incorporated in England and Wales, and a number of
subsidiaries held directly by Life Science REIT plc, which
operate and are incorporated in the UK, Jersey and the British
Virgin Islands.
The Group owns 100% equity shares of all subsidiaries listed
above and has the power to appoint and remove the majority
of the Board of Directors of those subsidiaries. The relevant
activities of the above subsidiaries are determined by the
Board of Directors based on the purpose of each company.
Therefore, the Directors concluded that the Group has
control over all these entities and all these entities have been
consolidated within the consolidated Financial Statements.
The subsidiaries are exempt from the requirements of the
Companies Act 2006 relating to the audit of individual
accounts by virtue of section 479A of the Act. The Company
has provided a guarantee under section 479C of the
Companies Act 2006 in respect of the financial year ended
31 December 2024 for a number of its subsidiary companies.
The guarantee is over all outstanding liabilities to which the
subsidiary companies are subject to at 31 December 2024
until they are satisfied in full.
Accounting policy
Where property is acquired, via corporate acquisitions or
otherwise, management considers the substance of the
assets and activities of the acquired entity in determining
whether the acquisition represents the acquisition of a
business.
Where such acquisitions are not judged to be an acquisition
of a business, they are not treated as business combinations.
Rather, the cost to acquire the corporate entity is allocated
between the identifiable assets and liabilities of the entity,
based on their relative fair values at the acquisition date.
Accordingly, no goodwill or additional deferred taxation
arises. Otherwise, acquisitions are accounted for as business
combinations.
Business combinations are accounted for using the
acquisition method. The cost of an acquisition is measured
as the aggregate of the consideration transferred, measured
at acquisition date fair value, and the amount of any non-
controlling interest in the acquiree.
For each business combination, the acquirer measures
the non-controlling interest in the acquiree at fair value of
the proportionate share of the acquiree’s identifiable net
assets. Acquisition costs (except for costs of issue of debt
or equity) are expensed in accordance with IFRS 3 Business
Combinations.
When the Group acquires a business, it assesses the financial
assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions as at the
acquisition date.
Contingent consideration is deemed to be equity or a liability
in accordance with IAS 32. If the contingent consideration is
classified as equity, it is not remeasured, and its subsequent
settlement shall be accounted for within equity. If the
contingent consideration is classified as a liability, subsequent
changes to the fair value are recognised either in profit or loss
or as a change to other comprehensive income.
24. Subsidiaries
continued
128
128
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
ADDITIONAL INFORMATION
Life Science REIT plc
Annual Report and Financial Statements 2024
129
129
25. Capital management
The Group’s capital is represented by share capital, reserves
and borrowings.
The primary objective of the Group’s capital management
is to ensure that it remains within its quantitative banking
covenants and maintains a strong credit rating. The Group’s
capital policies are as follows:
• The Group will keep sufficient cash for working capital
purposes with excess cash, should there be any, deposited
at the best interest rate available whilst maintaining
flexibility to fund the Group’s investment programme.
• Borrowings will be managed in accordance with the
loan agreements and covenants will be tested quarterly
and reported to the Directors. Additionally, quarterly
lender reporting will be undertaken in line with the loan
agreement.
• New borrowings are subject to Director approval. Such
borrowings will support the Group’s investment programme,
but will be subject to a maximum 55% LTV. The intention is
to maintain borrowings at an LTV of between 30% and 40%.
The Group is subject to banking covenants in regard to its
debt facility and these include a prescribed methodology
for interest cover and market value covenants. The Group
has complied with all covenants on its borrowings up to
the date of this report. All of the targets mentioned above
sit comfortably within the Group’s covenant levels, which
include LTV and forward and backward looking interest
cover ratios. The Group LTV at the year end was 30.4%
(31 December 2023: 24.7%) and there is substantial headroom
within existing covenants.
26. Capital commitments
At 31 December 2024, the Group had contracted capital
expenditure of £27.4 million (31 December 2023: £39.9
million).
27. Related party transactions
Directors
The Directors (all Non-Executive Directors) of the
Company and its subsidiaries are considered to be the
key management personnel of the Group. Directors’
remuneration for the year totalled £200,880 (year ended
31 December 2023: £200,304) at 31 December 2024,
including £20,880 of employers’ National Insurance
contributions (year ended 31 December 2023: £20,304); a
balance of £nil (year ended 31 December 2023: £nil) was
outstanding relating to employer NI. Further information is
given in note 5 and in the Directors’ remuneration report on
pages 84 to 87.
Investment Adviser
The Company is party to an Investment Advisory Agreement
with the AIFM and the Investment Adviser, pursuant to which
the Investment Adviser has been appointed to provide
investment advisory services relating to the respective assets
on a day-to-day basis in accordance with their respective
investment objectives and policies, subject to the overall
supervision and direction by the AIFM and the Board of
Directors.
For its services to the Company, the Investment Adviser is
entitled to a fee payable quarterly in arrears calculated at the
rate of one quarter of 1.1% per quarter on that part of the NAV
up to, and including, £500 million; one quarter of 0.9% per
quarter on that part of the NAV in excess of £500 million and
up to £1 billion; and one quarter of 0.75% per quarter on NAV
in excess of £1 billion.
Following the strategic review announcement on
14 March 2025, the Board and Investment Adviser have
agreed to revisions to the fee, effective from the quarter
commencing 1 April 2025. The Investment Advisory fee will
move from being calculated on net asset value to the lower of
net asset value and the average market capitalisation for the
quarter, subject to a floor of no lower than 70.0% of net asset
value. In addition the rate applied to the initial fee threshold
of £500 million has been lowered to 1.0%. Refer to page 89 of
the Directors’ report for further information.
During the year, the Group incurred £2,978,777 (2023:
£3,388,548) in respect of investment advisory fees.
As at 31 December 2024, £726,625 (2023: £787,521) was
outstanding.
NOTES TO THE CONSOLIDATED
CONTINUED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Life Science REIT plc
Annual Report and Financial Statements 2024
28. Reconciliation of changes in liabilities to cash flows generated from financing activities
Interest-
Interest-
bearing loans
bearing loans
and
and
borrowings
borrowings
current
non-current
Total
£’000
£’000
£’000
Balance as at 1 January 2024
107,918
107,918
Changes from financing cash flows:
Bank loans drawn down
14,000
14,000
Bank loans repaid
Loan arrangement fees paid in the year
Total changes from financing cash flows
14,000
14,000
Additional interest and commitment fees capitalised
Unamortised fees written off
Amortisation charge for the year
320
320
Balance as at 31 December 2024
122,238
122,238
Interest-
Interest-
bearing loans
bearing loans
and
and
borrowings
borrowings
current
non-current
Total
£’000
£’000
£’000
Balance as at 1 January 2023
35,743
74,088
109,831
Changes from financing cash flows:
Bank loans drawn down
142,520
142,520
Bank loans repaid
(36,510)
(108,794)
(145,304)
Loan arrangement fees paid in the year
(980)
(980)
Total changes from financing cash flows
(36,510)
32,746
(3,764)
Additional interest and commitment fees capitalised
677
677
Unamortised fees written off
716
716
Amortisation charge for the year
90
368
458
Balance as at 31 December 2023
107,918
107,918
29. Ultimate controlling party
It is the view of the Directors that there is no ultimate controlling party.
30. Post balance sheet events
On 14 March 2025, the Board announced the commencement of a strategic review whereby it is considering the future of the
Group and exploring all strategic options available to maximise value for shareholders.
130
130
COMPANY STATEMENT
OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
Notes
31 December
2024
£’000
31 December
2023
£’000
Assets
Non-current assets
Investment in subsidiary companies
33
73,769
73,767
Trade and other receivables
35
239,377
240,336
313,146
314,103
Current assets
Cash and cash equivalents
34
2,065
10,051
Trade and other receivables
35
322
1,338
2,387
11,389
Total assets
315,533
325,492
Liabilities
Current liabilities
Other payables and accrued expenses
36
(1,448)
(3,151)
Total liabilities
(1,448)
(3,151)
Net assets
314,085
322,341
Equity
Share capital
19
3,500
3,500
Capital reduction reserve
314,823
321,823
Retained earnings
(4,238)
(2,982)
Total equity
314,085
322,341
Number of shares in issue (thousands)
350,000
350,000
Net asset value per share (basic and diluted) (pence)
89.7
92.1
The Company reported a loss for the year ended 31 December 2024 of £1,256,000 (year ended 31 December 2023:
£20,667,000 profit).
These Financial Statements were approved by the Board of Directors of Life Science REIT plc on 15 April 2025 and signed on
its behalf by:
Claire Boyle
Company number: 13532483
131
Life Science REIT plc
Annual Report and Financial Statements 2024
131
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
COMPANY STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Share
capital
£’000
Capital
reduction
reserve
£’000
Retained
earnings
£’000
Total equity
£’000
Balance at 1 January 2024
3,500
321,823
(2,982)
322,341
Loss for the year and total comprehensive loss
(1,256)
(1,256)
Dividends paid
(7,000)
(7,000)
Balance at 31 December 2024
3,500
314,823
(4,238)
314,085
Share
capital
£’000
Capital
reduction
reserve
£’000
Retained
earnings
£’000
Total equity
£’000
Balance at 1 January 2023
3,500
335,823
(23,649)
315,674
Profit for the year and total comprehensive profit
20,667
20,667
Dividends paid
(14,000)
(14,000)
Balance at 31 December 2023
3,500
321,823
(2,982)
322,341
132
Life Science REIT plc
Annual Report and Financial Statements 2024
132
NOTES TO THE COMPANY
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
31. General information
Life Science REIT plc is a closed-ended REIT incorporated
in England and Wales on 27 July 2021. The Company began
trading on 19 November 2021 and its shares are admitted to
trading on the Premium Listing Segment of the Main Market
of the London Stock Exchange. The registered office of the
Company is located at Central Square, 29 Wellington Street,
Leeds, England, LS1 4DL.
32. Basis of preparation
These Financial Statements are prepared in accordance
with United Kingdom Generally Accepted Accounting
Practice including Financial Reporting Standard 101 Reduced
Disclosure Framework (“FRS 101”) and in conformity with the
requirements of the Companies Act 2006. The Financial
Statements have been prepared under the historical cost
convention. The audited Financial Statements are presented
in Pound Sterling and all values are rounded to the nearest
thousand pounds (£’000), except when otherwise indicated.
In preparing these Financial Statements, the Company has
taken advantage of all disclosure exemptions conferred by
FRS 101. Therefore, these Financial Statements do not include:
• certain disclosures regarding the Company’s capital;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted;
• the disclosure of the remuneration of key management
personnel; and
• disclosure of related party transactions with other wholly
owned members of Life Science REIT plc.
In addition, and in accordance with FRS 101, further disclosure
exemptions have been adopted because equivalent
disclosures are included in the Company’s consolidated
Financial Statements. These Financial Statements do not
include certain disclosures in respect of:
• share-based payments;
• financial instruments; and
• fair value measurement.
The Company has taken advantage of the exemption in
section 408 of the Companies Act 2006 not to present its
own statement of comprehensive income.
The Financial Statements of the Company follow the
accounting policies laid out on pages 103 to 128.
The key source of estimation uncertainty relates to the
Company’s investment in Group companies and is stated
in the Company’s separate financial statements at cost less
impairment losses, if any. Impairment losses are determined
with reference to the investment’s fair value less estimated
selling costs. Fair value is derived from the subsidiaries’,
and their subsidiaries’, net assets at the balance sheet date.
Investment properties held by the subsidiary companies
are supported by independent valuation. Judgements and
assumptions associated with the property values of the
investments held by the subsidiary companies are detailed in
the Group financial statements.
133
Life Science REIT plc
Annual Report and Financial Statements 2024
133
ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
33. Investment in subsidiary companies
31 December
2024
£’000
31 December
2023
£’000
Investment in subsidiary companies
Balance at the beginning of the year
73,767
65,138
Increase in investments
2
Cost of investment
(12,682)
Provision for impairment
21,311
Total
73,769
73,767
31 December
2024
£’000
31 December
2023
£’000
Investment in subsidiary companies
Ironstone Life Science Holdings Limited
1
1
Oxford Technology Park Holdings Limited
73,768
73,766
73,769
73,767
Following a review comparing cost of investments to the underlying net assets of subsidiary companies, an impairment provision
has been made of £nil (2023: £21.3 million reversal of 2022 provision).
Movement of £2,000 in the year relates to the reallocation of a prior period cost allocation. In the prior year, negative costs
associated with the acquisition of new subsidiary companies of £12,682,000 resulted from the reallocation of a prior period tax
charge within the subsidiary company.
For an impairment review to be considered the value of the underlying assets would need to fall by 74%.
Accounting policy
Investments in subsidiary companies are included in the statement of financial position at cost less impairment. For a list of
subsidiary companies, see note 24.
34. Cash and cash equivalents
31 December
2024
£’000
31 December
2023
£’000
Cash equivalents
2,000
10,000
Cash
65
51
Total
2,065
10,051
Accounting policy
Cash equivalents include cash at bank and short-term deposits with banks and other financial institutions, with an initial maturity
of three months or less.
NOTES TO THE COMPANY
FINANCIAL STATEMENTS
CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2024
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35. Trade and other receivables
A. Receivables: non-current assets
31 December
2024
£’000
31 December
2023
£’000
Amounts due from subsidiary companies
239,377
240,336
Total
239,377
240,336
Loans due from subsidiary companies are unsecured, interest free and repayable on demand. These loans are not expected to
be recovered within 12 months and, are therefore, classified as non-current assets.
B. Receivables current assets
31 December
2024
£’000
31 December
2023
£’000
Prepayments and other receivables
322
1,338
Total
322
1,338
36. Other payables and accrued expenses
31 December
2024
£’000
31 December
2023
£’000
Administration expenses payable and accrued
1,056
1,345
Capital expenses payable
325
1,647
Accounts payable
67
Other expenses payable
159
Total
1,448
3,151
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ADDITIONAL INFORMATION
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
UNAUDITED SUPPLEMENTARY NOTES NOT PART OF THE
CONSOLIDATED FINANCIAL INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2024
The Group is a member of the European Public Real Estate Association (“EPRA”) and was awarded an EPRA gold award for
compliance with EPRA Best Practice Recommendations (“BPR”) for the 2023 Annual Report and Financial Statements. EPRA
has developed and defined the following performance measures to give transparency, comparability and relevance of financial
reporting across entities that may use different accounting standards. The following measures are calculated in accordance with
EPRA guidance. These are not intended as a substitute for IFRS measures.
Table 1: EPRA performance measures summary
Notes
Year to
31 December
2024
Year to
31 December
2023
EPRA earnings (£’000)
Table 2
5,853
5,959
EPRA EPS (pence)
Table 2
1.7
1.7
EPRA cost ratio (including direct vacancy cost)
Table 6
40.8%
44.1%
EPRA cost ratio (excluding direct vacancy cost)
Table 6
34.1%
33.7%
Notes
31 December
2024
31 December
2023
EPRA NDV per share (pence)
Table 3
75.1
81.1
EPRA NRV per share (pence)
Table 3
81.7
87.2
EPRA NTA per share (pence)
Table 3
74.4
79.9
EPRA NIY
Table 4
3.9%
3.6%
EPRA ‘topped-up’ net initial yield
Table 4
4.1%
3.7%
EPRA vacancy rate
Table 5
15.6%
21.0%
EPRA loan to value
Table 10
32.5%
27.0%
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UNAUDITED SUPPLEMENTARY NOTES NOT PART OF THE
CONSOLIDATED FINANCIAL INFORMATION
CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2024
Table 2: EPRA income statement
Notes
Year to
31 December
2024
Year to
31 December
2023
Revenue
3
20,308
19,942
Less: insurance recharged
3
(164)
(143)
Less: service charge income
3
(3,953)
(4,461)
Rental income (A)
16,191
15,338
Property operating expenses (including recoverable service charges)
4
(5,884)
(6,117)
Add: insurance recharged
3
164
143
Add: service charge income
4
3,953
4,461
Gross profit (B)
14,424
13,825
Administration expenses
4
(4,838)
(5,249)
Operating profit before interest and tax
9,586
8,576
Finance income
7
4,203
3,807
Finance expenses
8
(10,390)
(11,070)
Less change in fair value of interest rate derivatives and deferred consideration
7,8
2,454
3,784
Less costs of early refinancing with greater than 12 months to expiry
8
716
Adjusted profit before tax
5,853
5,813
Taxation
9
146
EPRA earnings
5,853
5,959
Company-specific adjustments:
EPRA earnings
5,853
5,959
Cost associated with moving to Main Market
4
(12)
Cost of early refinancing with less than 12 months to expiry
8
751
Adjusted earnings
5,853
6,698
Weighted average number of shares in issue (thousands)
19
350,000
350,000
EPRA EPS (pence)
12
1.7
1.7
Adjusted EPS (pence)
12
1.7
1.9
Gross to net rental income ratio (B/A)
89.1%
90.1%
Adjusted earnings represents earnings from operational activities. It is a key measure of the Group’s underlying operational
results and an indication of the extent to which dividend payments are supported by earnings.
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FINANCIAL STATEMENTS
Table 3: EPRA balance sheet and net asset value performance measures
EPRA net disposal value (“NDV”), EPRA net reinstatement value (“NRV”) and EPRA net tangible assets (“NTA”). A reconciliation
of the three new EPRA NAV metrics from IFRS NAV is shown in the table below. Total accounting return will now be calculated
based on EPRA NTA.
As at 31 December 2024
Notes
EPRA NDV
£’000
EPRA NRV
£’000
EPRA NTA
£’000
Total properties
1
13
385,220
385,220
385,220
Net borrowings
2
15,17
(117,159)
(117,159)
(117,159)
Other net liabilities
(5,293)
(5,293)
(5,293)
IFRS NAV
21
262,768
262,768
262,768
Include: real estate transfer tax
3
25,529
Exclude: fair value of interest rate derivatives
16
(2,378)
(2,378)
NAV used in per share calculations
262,768
285,919
260,390
Number of shares in issue (thousands)
19
350,000
350,000
350,000
NAV per share (pence)
21
75.1
81.7
74.4
As at 31 December 2023
Notes
EPRA NDV
£’000
EPRA NRV
£’000
EPRA NTA
£’000
Total properties
1
13
382,300
382,300
382,300
Net borrowings
2
15,17
(94,385)
(94,385)
(94,385)
Other net liabilities
(4,170)
(4,170)
(4,170)
IFRS NAV
21
283,745
283,745
283,745
Include: real estate transfer tax
3
25,357
Exclude: fair value of interest rate derivatives
16
(3,998)
(3,998)
NAV used in per share calculations
283,745
305,104
279,747
Number of shares in issue (thousands)
19
350,000
350,000
350,000
NAV per share (pence)
21
81.1
87.2
79.9
1
Professional valuation of investment property.
2
Comprising interest-bearing loans and borrowings (excluding unamortised loan arrangement fees) of £122.7 million net of cash of £5.6 million (31 December 2023:
£108.7 million net of cash of £14.3 million).
3
EPRA NTA and EPRA NDV reflect IFRS values that are net of real estate transfer tax. Real estate transfer tax is added back when calculating EPRA NRV.
EPRA NDV details the full extent of liabilities and resulting shareholder value if Company assets are sold and/or if liabilities are
not held until maturity. Deferred tax and financial instruments are calculated as to the full extent of their liability, including tax
exposure not reflected in the statement of financial position, net of any resulting tax.
EPRA NTA assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability.
EPRA NRV highlights the value of net assets on a long-term basis and reflects what would be needed to recreate the Company
through the investment markets based on its current capital and financing structure. Assets and liabilities that are not expected
to crystallise in normal circumstances, such as the fair value movements on financial derivatives and deferred taxes on property
valuation surpluses, are excluded. Costs such as real estate transfer taxes are included.
UNAUDITED SUPPLEMENTARY NOTES NOT PART OF THE
CONSOLIDATED FINANCIAL INFORMATION
CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2024
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Table 4: EPRA net initial yield
Notes
31 December
2024
£’000
31 December
2023
£’000
Total properties per external valuers’ report
13
385,220
382,300
Less development property and land
13
(56,547)
(67,442)
Net valuation of completed properties
328,673
314,858
Add estimated purchasers’ costs
1
21,925
20,884
Gross valuation of completed properties, including
estimated purchasers’ costs (A)
350,598
335,742
Gross passing rents
2
(annualised)
14,894
13,663
Less irrecoverable property costs
2
(1,077)
(1,586)
Net annualised rents (B)
13,817
12,077
Add notional rent on expiry of rent-free periods or other lease incentives
3
530
342
‘Topped-up’ net annualised rents (C)
14,347
12,419
EPRA NIY (B/A)
3.9%
3.6%
EPRA ‘topped-up’ net initial yield (C/A)
4.1%
3.7%
1
Estimated purchasers’ costs estimated at 6.7% (31 December 2023: 6.6%).
2
Gross passing rents and irrecoverable property costs assessed as at the balance sheet date for completed investment properties excluding development
property and land.
3
Adjustment for unexpired lease incentives, such as rent-free periods, discounted rent periods and step rents. The adjustment includes the annualised cash rent
that will apply at the expiry of the lease incentive. Rent-frees expire over a weighted average period of 4 months (31 December 2023: 7 months).
EPRA NIY represents annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable
property operating expenses, divided by the market value of the property, increased with (estimated) purchasers’ costs. It is a
comparable measure for portfolio valuations designed to make it easier for investors to judge themselves how the valuation of
portfolio X compares with portfolio Y.
EPRA ‘topped-up’ NIY incorporates an adjustment to the EPRA NIY in respect of the expiration of rent-free periods (or other
unexpired lease incentives, such as discounted rent periods and step rents).
NIY, as stated in the Investment Adviser’s report, calculates net initial yield on topped-up annualised rents, but does not deduct
non-recoverable property costs.
Table 5: EPRA vacancy rate
31 December
2024
£’000
31 December
2023
£’000
Annualised ERV of vacant premises (D)
3,488
4,113
Annualised ERV for the investment portfolio (E)
22,383
19,556
EPRA vacancy rate (D/E)
15.6%
21.0%
EPRA vacancy rate represents ERV of vacant space divided by ERV of the completed investment portfolio, excluding
development property and land. It is a pure measure of investment property space that is vacant, based on ERV.
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FINANCIAL STATEMENTS
Table 6: Total cost ratio/EPRA cost ratio
Notes
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
Property operating expenses (excluding service charge expenses)
4
1,266
536
Service charge expenses
4
4,618
5,581
Add back: service charge income
3
(3,953)
(4,461)
Add back: insurance recharged
3
(164)
(143)
Net property operating expenses
1,767
1,513
Administration expenses
4
4,838
5,249
Deduct: costs associated with move to Main Market
4
12
Total cost including direct vacancy cost (F)
6,605
6,774
Direct vacancy cost
3,4
(1,077)
(1,587)
Total cost excluding direct vacancy cost (G)
5,528
5,187
Rental income
1
3
16,191
15,338
Gross rental income (H)
3
16,191
15,338
Less direct vacancy cost
(1,077)
(1,587)
Net rental income
15,114
13,751
Total cost ratio including direct vacancy cost (F/H)
40.8%
44.2%
Total cost ratio excluding direct vacancy cost (G/H)
34.1%
33.8%
1
Includes rental income, rental income straight-line adjustment and other income as per note 3.
Notes
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
Total cost including direct vacancy cost (F)
6,605
6,774
Add back: costs associated with move to Main Market
4
(12)
EPRA total cost (I)
6,605
6,762
Direct vacancy cost
(1,077)
(1,587)
EPRA total cost excluding direct vacancy cost (J)
5,528
5,175
EPRA cost ratio including direct vacancy cost (I/H)
40.8%
44.1%
EPRA cost ratio excluding direct vacancy cost (J/H)
34.1%
33.7%
EPRA cost ratios represent administrative and operating costs (including and excluding costs of direct vacancy) divided by gross
rental income. They are a key measure to enable meaningful measurement of the changes in the Group’s operating costs.
It is the Group’s policy not to capitalise overheads or operating expenses and no such costs were capitalised in the year ended
31 December 2024 or the year ended 31 December 2023.
UNAUDITED SUPPLEMENTARY NOTES NOT PART OF THE
CONSOLIDATED FINANCIAL INFORMATION
CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2024
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Table 7: Lease data
As at 31 December 2024
Year 1
£’000
Year 2
£’000
Years 3–5
£’000
Year 5+
£’000
Total
£’000
Passing rent of leases expiring in:
825
4,722
2,277
7,070
14,894
ERV of leases expiring in:
896
6,191
2,571
9,237
18,895
Passing rent subject to review in:
2,596
8,115
4,183
14,894
ERV subject to review in:
2,843
10,750
5,302
18,895
As at 31 December 2023
Year 1
£’000
Year 2
£’000
Years 3–5
£’000
Year 5+
£’000
Total
£’000
Passing rent of leases expiring in:
139
857
6,999
5,668
13,663
ERV of leases expiring in:
139
933
7,811
6,559
15,442
Passing rent subject to review in:
139
2,628
10,896
13,663
ERV subject to review in:
139
2,773
12,408
122
15,442
WAULT to expiry is 5.3 years (31 December 2023: 5.8 years) and to break is 3.1 years (31 December 2023: 3.8 years).
Table 8: Capital expenditure
Notes
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
Acquisitions
1
13
(218)
(780)
Development spend
2
13
13,048
20,373
Movement in rent incentives and amortisation
13
(113)
167
Completed investment properties:
3
No incremental lettable space – like-for-like portfolio
13
5,493
2,410
No incremental lettable space – other
Total capital expenditure
18,210
22,170
Conversion from accruals to cash basis
2,197
211
Total capital expenditure on a cash basis
Page 104
20,407
22,381
1
During 2024 and 2023 there were no acquisitions of new assets, the balances reflected relate to the finalisation of prior year balances.
2
Expenditure on development property and land.
3
Expenditure on completed investment properties.
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ADDITIONAL INFORMATION
FINANCIAL STATEMENTS
Table 9: Like-for-like net rental income
1
Notes
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
% Change
Like-for-like net rental income
12,669
13,168
(3.8)%
Development lettings
1,755
290
Properties disposed in current and prior year
367
Properties acquired in current and prior year
Net rental income
3,4
14,424
13,825
1
This table has been updated to reflect net rental income, taking into account property operating expenses, which is more representative of the investment
portfolio’s performance.
Table 10: Loan to value (“LTV”) and EPRA LTV
Gross debt less cash, short-term deposits and liquid investments, divided by the aggregate value of properties and investments.
The Group has also opted to present the EPRA LTV, which is defined as net borrowings divided by total property market value.
Notes
31 December
2024
£’000
31 December
2023
£’000
Interest-bearing loans and borrowings
1
17
122,726
108,726
Cash
15
(5,567)
(14,341)
Net borrowings (A)
117,159
94,385
Investment property at fair value (B)
13
385,220
382,300
LTV (A/B)
30.4%
24.7%
EPRA LTV
Notes
31 December
2024
£’000
31 December
2023
£’000
Interest-bearing loans and borrowings
1
17
122,726
108,726
Net payables
2
8,159
8,976
Cash
15
(5,567)
(14,341)
Net borrowings (A)
125,318
103,361
Investment properties at fair value
13
385,220
382,300
Total property value (B)
385,220
382,300
EPRA LTV (A/B)
32.5%
27.0%
1
Excludes unamortised loan arrangement fees asset of £0.5 million (31 December 2023: £0.8 million) (see note 17).
2
Net payables includes trade and other receivables, other payables and accrued expenses. See notes 14 and 18 for a full breakdown.
UNAUDITED SUPPLEMENTARY NOTES NOT PART OF THE
CONSOLIDATED FINANCIAL INFORMATION
CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2024
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Table 11: Total accounting return
The movement in EPRA NTA over a period plus dividends paid in the period, expressed as a percentage of the EPRA NTA at the
start of the period.
Notes
Year ended
31 December
2024
Pence
per share
Year ended
31 December
2023
Pence
per share
Opening EPRA NTA (A)
21
79.9
90.0
Movement (B)
(5.5)
(10.1)
Closing EPRA NTA
21
74.4
79.9
Dividend per share (C)
11
2.0
4.0
Total accounting return (B+C)/A
(4.4)%
(6.8)%
Table 12: Interest cover
Adjusted operating profit before gains on investment properties, interest and tax, divided by the underlying net interest expense.
Notes
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
Adjusted operating profit before gains on investment properties (A)
1
9,586
8,564
Finance expenses
8
10,390
11,070
Add back: capitalised finance costs
8
2,086
3,261
Less: exceptional finance costs
8
(1,467)
Less: finance income
7
(4,203)
(3,807)
Add back: change in fair value of interest rate derivatives and deferred
consideration
7,8
(2,454)
(3,784)
Loan interest (B)
5,819
5,273
Interest cover (A/B)
164.7%
162.4%
1
Prior year adjusted for move to Main Market costs £(12,000).
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FINANCIAL STATEMENTS
Table 13: Ongoing charges ratio
Ongoing charges ratio represents the costs of running the REIT as a percentage of NAV as prescribed by the Association of
Investment Companies.
Notes
Year to
31 December
2024
£’000
Year to
31 December
2023
£’000
Administration expenses
4
4,838
5,249
Less: cost associated with moving to Main Market
4
12
Annualised ongoing charges (A)
4,838
5,261
Opening NAV as at start of year
283,745
319,451
NAV as at 30 June
267,230
314,270
Closing NAV as at 31 December
262,768
283,745
Average undiluted NAV during the year (B)
271,248
305,822
Ongoing charges ratio (A/B)
1.8%
1.7%
UNAUDITED SUPPLEMENTARY NOTES NOT PART OF THE
CONSOLIDATED FINANCIAL INFORMATION
CONTINUED
FOR THE YEAR ENDED 31 DECEMBER 2024
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EPRA sBPR REPORTING
EPRA sBPR FY24 Disclosure
Introduction
To uphold a high standard of transparency in ESG-related
disclosures, the Group reports against relevant ESG indicators
in accordance with the fourth edition of the European Public
Real Estate Association (“EPRA”) Sustainability Best Practice
Recommendations (“sBPR”) and the Streamlined Energy and
Carbon Reporting (“SECR”) requirements.
For details on the progress of the Group’s sustainability
strategy and the management approach to material
sustainability topics, please refer to the sustainability section
of this Annual Report, starting on page 34.
The Group’s EPRA sBPR disclosures are organised into the
following four sections:
• Reporting methodology
• Environmental performance measures
• Social performance measures
• Governance performance measures
Reporting methodology
Organisational and operational boundaries
As of 31 December 2024, the Group’s total investment in
real estate comprised five fully owned assets, either directly
owned or held through wholly owned subsidiaries. The Group
does not have any partially owned entities.
The Group’s EPRA sBPR organisational boundary is defined
using the principle of operational control. This means that
only assets where the Group, through its property managers,
has the authority to introduce and implement operating
policies, and procedures fall within the defined organisational
boundary. Properties on full repairing and insurance (“FRI”)
leases are without operational control. Based on this
principle, four of the five assets were deemed to have full or
partial operational control at the end of the reporting year.
Additionally, real estate development activities are excluded
from the scope of EPRA sBPR. Consequently, 51% of the
Group’s total standing real estate investment by floor area
falls within the defined organisational boundary.
Unless otherwise stated, the reporting boundary for
Performance Measures related to energy usage, associated
GHG emissions, and water consumption includes areas where
the Group procures utilities. These areas include common
spaces, shared services, and lettable areas. To provide
greater transparency regarding the Group’s environmental
footprint, landlord-procured occupier consumption and the
associated Scope 3 GHG emissions, are reported separately.
Where available, occupier-procured consumption is also
reported on a voluntary basis. Performance Measures
related to waste only cover those assets where the Group is
responsible for procuring waste collection services.
Coverage
100% of the floor area within the Group’s defined
organisational boundary has been included in each asset-
level Performance Measure.
Like-for-like performance indicators include properties within
this boundary for which the Group collected data for two
consecutive years. Units sold, units leased without operational
control, or units under development during 2023 and 2024
are excluded from like-for-like performance reporting. As a
result, like-for-like performance indicators were reported for
86% of the defined organisational boundary by floor area.
Assets within the defined organisational boundary that were
owned and managed throughout the full 2024 reporting
year were included in absolute energy and GHG intensity
calculations.
As referenced above, the Group voluntarily reports occupier-
procured consumption and the associated Scope 3 GHG
emissions. In 2024, data coverage for occupier-controlled
units was 62%. Consequently, the Group achieved 76% data
coverage of total real estate investment by floor area.
Data estimation and normalisation
The Group strives to report data that is as complete and
accurate as practicable. All data is derived from invoices
and meter readings where available. Where actual data was
unavailable at the time of publication, the Group adopted the
following data estimation approaches:
1. Estimating consumption/generation data based on the most
recent three months of available actual data; or
2. Estimating consumption/generation data using available
actual data from the same period in the previous
reporting year.
Based on these data estimation methods, the proportion of
estimated data for 2024 was 0% for energy, 2% for water,
and 4% for waste.
2023 water consumption data was also
restated as described below.
On the normalisation of Performance Measures, energy, water,
and GHG emissions data are normalised as landlord-procured
utility consumption per square meter of floor area (m²), while
employee-related Performance Measures are normalised
using full-time equivalent (“FTE”) employee numbers.
2023 figures for landlord procured fuels and electricity have
been updated for more accurate data, with a corresponding
impact on GHG emission metrics.
Data verification and assurance
Environmental and social performance data were externally
reviewed and checked by Savills (UK) Limited. However, no
third-party assurance was conducted on the underlying data
disclosed in this report.
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FINANCIAL STATEMENTS
Segmental analysis
Segmental analysis is not applicable by geography or
property type, because all five assets owned by the Group
as of 31 December 2024 are located in the United Kingdom
within the same climatic zone and are classified as life science
real estate within the offices sector. Therefore, additional
analysis by geography and property type is unnecessary.
Disclosure on own offices
As the Group is externally managed by the Investment
Adviser, a separate legal entity, it does not occupy any
offices for its business activities, nor does it own or lease any
vehicles. Consequently, the Group has no utility consumption
or associated GHG emissions from its own office operations.
Reporting period
Performance measures for absolute and intensity metrics are
reported for the year ended 31 December 2024. Like-for-like
performance metrics are reported where sufficient data for
the prior year ended 31 December 2023 is available.
Data estimation
In line with the Group’s materiality assessment, the following
performance measures are excluded from reporting:
• DH&C-Abs
and
DH&C-LfL
, as no district heating or cooling
is procured across the portfolio.
Selected social performance measures have been voluntarily
reported for the Investment Adviser, a separate legal entity
responsible for all administrative duties related to the asset
management of the Group. The Group has no employees and,
therefore, equivalent disclosures are not made.
GHG emissions calculation
The Group calculates and reports its GHG emissions
in accordance with the latest guidance from the GHG
Protocol, including the Corporate Accounting and Reporting
Standard, the Scope 2 Guidance and where applicable, the
Technical Guidance for Calculating Scope 3 Emissions. The
emission factors used in this disclosure are derived from
the UK Government GHG Conversion Factors for Company
Reporting, relevant to the respective reporting periods. The
Group reports Scope 2 emissions using both location-based
and market-based methods:
• Location-based emissions reflect the average emissions
intensity of energy production within a defined local or
national region.
• Market-based emissions for Scope 2 were calculated using
the European Residual Mixes Factors (version 2022). These
default emissions factors represent untracked or unclaimed
energy and emissions. A zero-emissions factor was applied
for electricity supplies backed by Renewable Energy
Guarantees of Origin (“REGO”) and for on-site renewable
energy generation from photovoltaic (“PV”) systems.
The proportion of energy sourced from renewables includes
landlord-procured renewable energy and electricity
generated and directly consumed by PV systems owned by
the landlord. PV systems are installed at three of the Group's
five assets: Cambourne, Rolling Stock Yard, and Oxford
Technology Park. However, as the PV system at Oxford
Technology Park was installed and is owned by the occupier,
its associated generation is excluded from this report.
EPRA sBPR REPORTING
CONTINUED
146
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Annual Report and Financial Statements 2024
146
Environmental Performance Measures
In 2024, the Group procured 7,926 MWh of energy for use across the assets within the defined organisational boundary. Of this,
58% was electricity consumption, and 42% was gas consumption. The majority of landlord-procured energy, 74% was consumed
by occupiers. During the reporting year, 94 MWh of electricity was generated from on-site solar PV panels and consumed on-
site. Like-for-like figures indicate a decrease of 15% in total landlord-procured energy (2023: +15%), driven primarily by improved
operational efficiency at Herbrand Street, which accounted for 87% of the total like-for-like reductions.
Total Scope 1 and Scope 2 (location-based) GHG emissions for the reporting year were 409 tonnes CO
2
e, comprising 34%
Scope 1 and 66% Scope 2 GHG emissions. We have achieved 100% procurement of REGO-backed renewable electricity in
2024, resulting in Scope 2 (market-based) GHG emissions of 0 tonnes CO
2
e.
The Group procured a total of 11,306m³ of water in 2024. However, this figure does not fully represent total water consumption
across all assets within the defined organisational boundary, as most water usage is procured directly by occupiers. Reported
water consumption increased significantly by 55%, partly reflecting a refund at Cambourne Park in 2023 where utility
consumption had been based on estimated meter readings; actual meter readings were obtained in 2024, leading to a revision
of the reported consumption.
A significant increase was also observed at Rolling Stock Yard, due to occupiers operating at
full capacity.
In 2024, the Group managed and reported a total of 42 tonnes of waste, with 100% diverted from landfill. Of this, 39% was
reused or recycled, and 61% was incinerated with energy recovery. Like-for-like figures show a 56% decrease in total waste
weight compared to the prior year because the waste management responsibility of Herbrand Street was taken under occupier
remit starting from February 2024.
All of the Group’s assets comply fully with the latest Minimum Energy Efficiency Standards (“MEES”) requirements, with all floor
areas holding an EPC rating of A to C. RSY has a BREEAM Excellent certification, while Building 2 at OTP is rated BREEAM
Very Good. Buildings 1, 3,4, 5 and 6A (completed) and Buildings 6B, 7, 8 and 9 (in development) at OTP hold Interim BREEAM
Excellent certifications.
EPRA indicator
Certificate
2024
2023
Number of
certificates
% of Floor area
2
Number of
certificates
% of Floor area
Cert-Tot
BREEAM Certificates – Completed Projects
BREEAM Excellent
1
8.5%
1
10.0%
BREEAM Interim
Excellent
5
35.5%
3
25.7%
BREEAM
Very Good
1
6.8%
1
6.5%
Total with
Certification
7
50.8%
5
42.2%
BREEAM Certificates – Development Projects
BREEAM Interim
Excellent
1
2
n/a
3
n/a
EPC ratings
EPC A
15
40.3%
14
35.5%
EPC B
3
12.5%
2
9.0%
EPC C
7
47.2%
6
42.8%
EPC D
1
12.7%
EPC E or below
Total
25
100.0%
23
100.0%
1
Buildings 8 and 9 are included on a joint certificate
2
Floor area includes investment portfolio and unit 6A which has reached practical completion
147
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147
STRATEGIC REPORT
CORPORATE GOVERNANCE
ADDITIONAL INFORMATION
FINANCIAL STATEMENTS
EPRA Code
Measure
Managed portfolio
Like-for-like
2024
2023
% change
2024
2023
% change
Energy consumption, MWh
Elec-Abs,
Elec-LfL
Landlord procured
electricity
4,627
5,382
(14)%
4,575
5,343
(14)%
Of which consumed
by occupier
3,317
4,037
(18)%
3,317
4,037
(18)%
Total on-site
renewable electricity
generation
94
127
(26)%
94
127
(26)%
Proportion of
procured and
generated electricity
from renewable
sources
100%
59%
41%
100%
59%
41%
Occupier procured
electricity
3,903
2,761
41%
2,344
2,526
(7)%
DH&C-Abs,
DH&C-LfL
Landlord-procured
district heating and
cooling
None of our assets are connected to, or benefit from, district heating and cooling.
Fuels-Abs,
Fuels-LfL
Landlord
procured fuels
3,298
3,962
(17)%
3,298
3,962
(17)%
Of which consumed
by occupier
2,542
3,377
(25)%
2,542
3,377
(25)%
Occupier-
procured fuels
1,134
2,432
(53)%
1,134
1,656
(32)%
Total energy
Total landlord
procured
7,926
9,345
(15)%
7,873
9,305
(15)%
Of which consumed
by occupier
5,859
7,414
(21)%
5,859
7,414
(21)%
Landlord-procured
and generated
8,020
9,472
(15)%
7,967
9,432
(16)%
Proportion estimated
0%
1.4%
(1.4)%
0%
1.5%
(1.5)%
Disclosure
coverage of defined
organisation
boundary
100%
100%
86%
76%
10%
Energy intensity MWh/m
2
Energy-Int
Landlord-procured
and generated
0.27
0.31
(15)%
0.30
0.36
(15)%
Occupier procured
0.28
0.28
0%
0.34
0.37
(8)%
EPRA SBPR REPORTING
CONTINUED
148
Life Science REIT plc
Annual Report and Financial Statements 2024
148
EPRA Code
Measure
Managed portfolio
Like-for-like
2024
2023
% change
2024
2023
% change
Greenhouse gas emissions, tCO
2
e
GHG-Dir-Abs,
GHG-Dir-LfL
Total direct GHG
emissions, Scope 1
138
107
29%
138
107
29%
GHG-Indir-Abs,
GHG-Indir-LfL
Total indirect GHG
emissions, Scope 2 –
location-based
271
279
(3)%
260
270
(4)%
Total indirect GHG
emissions, Scope 2 –
market-based
0
79
(100)%
0
65
(100)%
Indirect GHG
emissions, Scope
3 (Landlord-
procured occupier
consumption)
1,152
1,454
(21)%
1,152
1,454
(21)%
Indirect GHG
emissions, Scope 3
(Occupier-procured
consumption)
1,015
1,017
(0)%
693
826
(16)%
Total direct and
indirect
Scope 1 and 2
(location-based)
1
409
386
6%
399
377
6%
Total scope 3
2,167
2,470
(12)%
1,845
2,280
(19)%
GHG-Int
2
GHG emissions
intensity, scope 1 and
2, tonnes CO
2
e/m
2
0.01
0.01
6%
0.01
0.01
6%
Water consumption, m
3
Water-Abs,
Water-LfL
Total landlord-
procured
3
11,306
7,286
55%
9,857
7,286
35%
Proportion estimated
2%
0%
2%
2%
0%
2%
Disclosure
coverage of defined
organisation
boundary
100%
100%
86%
76%
10%
Water-Int
Water intensity,
landlord
procured, m
3
/m
2
0.38
0.24
55%
0.38
0.28
35%
Landlord waste management, tonnes and proportion of waste disposal route, %
Waste-Abs,
Waste-LfL
Recycled or reused
16
48
(66)%
16
48
(66)%
Incineration with
energy recovery
26
47
(46)%
25
47
(46)%
Sent to landfill
Total
42
95
(56)%
42
95
(56)%
Proportion estimated
4%
0.4%
3.6%
4%
0.4%
3.6%
Disclosure
coverage of defined
organisation
boundary
100%
100%
86%
76%
10%
149
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Annual Report and Financial Statements 2024
149
STRATEGIC REPORT
CORPORATE GOVERNANCE
ADDITIONAL INFORMATION
FINANCIAL STATEMENTS
EPRA Code
Measure
Managed portfolio
Like-for-like
2024
2023
% change
2024
2023
% change
Waste-Abs,
Waste-LfL
Recycled or reused
39%
50%
(11)%
39%
50%
(11)%
Incineration with
energy recovery
61%
50%
11%
61%
50%
11%
1
Scope 2 (location-based) GHG emissions used for reporting total emissions and GHG emissions intensity.
2
Utility consumption data and the associated GHG emissions data have been restated as we obtained actual data after the publication of the previous report.
3
FY 2023 restated reflecting more accurate data.
Social performance measures
The Group reports on all applicable EPRA sBPR social performance metrics. As an externally managed company with
no employees, the applicable metrics are limited to those related to the Board, asset health and safety, and community
engagement measures. Additionally, selected social performance measures have been voluntarily reported for the Investment
Adviser, a separate legal entity responsible for managing the Group’s administrative and asset management duties.
EPRA Code
Measure
2024
2023
Group
Diversity-Emp
Board gender diversity %
Female 50%
Male 50%
Female 50%
Male 50%
Investment Adviser gender diversity %
Female 45%
Male 55%
Female 64%
Male 36%
Diversity-Pay
Board salary ratio of men to women, reported by median basic salary
(10.5)%
(10.5)%
Investment Adviser ratio of men to women, reported by median
basic salary
32%
46.1%
H&S-Asset
Proportion of asset health and safety assessments
100%
100%
H&S-Comp
Asset health and safety compliance, number of incidents unresolved
within the required timeframe
Comty-Eng
Community engagement, impact assessments and development
programmes, proportion of assets
Investment Adviser
Emp-Training
Employee training and development, average hours/year/employee
12.5
12
Emp-Dev
Proportion of employees with performance appraisals
100%
100%
Emp-Turnover
New hires and rate of new employee hire
2 and 15%
1 and 8%
Total number of employee turnover and rate
2 and 15%
1 and 8%
H&S-Emp
Absentee rate (per days scheduled)
0.1%
0.1%
Injury rate (per 100 hours worked)
Lost day rate
Number of work related fatalities
EPRA SBPR REPORTING
CONTINUED
150
Life Science REIT plc
Annual Report and Financial Statements 2024
150
Governance performance measures
This section provides a high-level summary of governance performance measures associated with the Board. For
comprehensive information on the Group’s governance performance measures, including Board profiles, nomination
procedures, and processes for managing potential conflicts of interest, please refer to pages 62 to 75 of this report.
Non-Executive Director Sally Ann Forsyth, who chairs the Group’s Sustainability Committee, brings significant expertise in
developing and implementing strategies to enhance social and environmental impacts within the life sciences industry.
Richard Howell leads the ESG strategy at Primary Health Properties PLC, including the development of a net zero
carbon strategy.
Michael Taylor, as a Director at the British Heart Foundation, possesses extensive experience in creating and executing
strategies to improve the social and environmental impacts of funding bodies in the life sciences sector.
EPRA Code
Measure
2024
2023
Composition of the highest governance body
Gov-Board
Number of Non-Executive Board members
4
4
Average tenure on the governance body (months)
37
25
Number of Non-Executive Board members with competencies relating
to ESG topics
3
3
Gov-Select
Process for nominating and selecting the highest governance body
See corporate governance
section, pages 62 to 75
Gov-CoI
Process for managing conflicts of interest
151
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151
STRATEGIC REPORT
CORPORATE GOVERNANCE
ADDITIONAL INFORMATION
FINANCIAL STATEMENTS
PROPERTY PORTFOLIO
AS AT 31 DECEMBER 2024
Property
Town
Postcode
Area (sq ft)
Oxford Technology Park
1
Oxford
OX5 1GN
508,400
Cambourne Park, Science & Technology Campus
Cambridge
CB23 6DW
230,400
7-11 Herbrand Street
London
WC1N 1EX
68,600
Rolling Stock Yard
London
N7 9AS
53,900
The Merrifield Centre
Cambridge
CB1 3LQ
12,600
1
Full build-out area. Area practically complete, as at 31 December 2024, was 237,900 (31 December 2023: 173,400 sq ft).
152
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152
SHAREHOLDER INFORMATION
The Company was incorporated on 27 July 2021. This Annual
Report and Financial Statements covers the period from
1 January 2024 to 31 December 2024.
The Company’s ordinary shares were admitted to trading on
AIM on 19 November 2021 following IPO, and the Group’s
operations, therefore, commenced on this date. Following the
Company’s migration to the Premium Listing Segment of the
Main Market of the London Stock Exchange (“LSE”), its shares
were cancelled from AIM on 1 December 2022 and admitted
to trading on the Main Market of the LSE.
Capital structure
The Company’s share capital consists of ordinary shares
of £0.01 each. At shareholder meetings, members present
in person, or by proxy, have one vote on a show of hands
and, on a poll, have one vote for each ordinary share held.
Shareholders are entitled to receive such dividends as the
Directors resolve to pay out of the assets attributable to
ordinary shares. Holders of ordinary shares are entitled to
participate in the assets of the Company attributable to the
ordinary shares in a winding up of the Company. The ordinary
shares are not redeemable. As at the date of this report, there
were 350,000,000 ordinary shares in issue, none of which
are held in treasury.
Investment objective
The Company’s investment objective is to provide
shareholders with an attractive level of total return. The focus
will be capital growth, whilst also providing a growing level
of income by investing primarily in a diversified portfolio of
UK properties that are leased, or intended to be leased, to
occupiers operating in the life science sector.
Investment policy
The Company seeks to achieve its investment objective by
investing in a diversified portfolio of properties across the
UK, which are typically leased, or intended to be leased,
to occupiers operating in, or providing a benefit to, the life
science sector (“life science properties”). Life science is the
branch of sciences concerned with all processes affecting
living organisms. This encompasses servicing and the study of
the breadth of life systems, and the structure and behaviour of
living things.
Companies operating in the life science sector include,
but are not limited to, those involved in the innovation,
development and/or production of assets directly, or indirectly,
for human health purposes. These assets include compounds,
products and devices derived and designed for application in
numerous fields.
The Company does not limit itself in relation to the types of
properties it acquires or develops, but examples may include
wet and dry laboratories, offices, incubators and co-working
space, manufacturing and testing facilities, and data centres.
The Company retains flexibility to acquire individual buildings,
a group of buildings across a single science park or the
entirety of a science park.
This may include purchasing or developing buildings that
are leased, or intended to be leased, to occupiers providing
ancillary services to employees of companies operating in, or
providing a benefit to, the life science sector.
The Company typically invests in income-producing assets.
The Company focuses on investing where it believes that
the underlying property is consistent with the overarching
objective of providing shareholders with capital growth,
whilst also providing a growing level of income. Investment
decisions are based on analysis and due diligence,
including, but not limited to, location, occupier profile and
demand, rental growth prospects, lease terms and/or asset
management/enhancement opportunities.
The Company may acquire properties either directly or
through corporate structures (whether onshore or offshore)
and also through joint venture or other shared ownership or
co-investment arrangements. In circumstances where the
Company does not hold a controlling interest in the relevant
investment, the Company will seek, through contractual and
other arrangements to, inter alia, ensure that each investment
is operated and managed in a manner that is consistent with
the Company’s investment policy.
Any asset management or development opportunities that
the Company pursues are conducted in such a way as to
minimise any development risk, typically through the use of
forward funding or similar arrangements. Asset management
opportunities may include, but are not limited to, refurbishing
or extending existing assets, or where the Company may
seek to maximise or change alternative use values of existing
operational assets. The Company may, from time to time,
invest in development opportunities without a forward-funding
arrangement, including pre-developed land or land where
planning permission may be required, subject to a restriction
that maximum exposure to these developments will not
exceed 15% of gross asset value.
It is anticipated that properties will be held for the long
term. However, the Company may undertake opportunistic
disposals of properties considered to be in the best interests
of shareholders.
153
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Annual Report and Financial Statements 2024
153
STRATEGIC REPORT
CORPORATE GOVERNANCE
ADDITIONAL INFORMATION
FINANCIAL STATEMENTS
The Company invests in, and actively manages, its assets with
the objective of reducing and diversifying risk and, in doing
so, maintains the following investment restrictions:
• No individual building will represent more than 35% of
gross asset value, reducing to 25% of gross asset value by
31 December 2023.
• The Company targets a portfolio with no one occupier
accounting for more than 20% (but subject to a maximum
of 30%) of the higher of either (i) gross contracted rents or
(ii) the valuer’s ERV of the Company’s portfolio including
developments under forward-funding agreements, as
calculated at the time of investing or leasing.
• The aggregate maximum exposure to assets under
development, including forward fundings, will not exceed
50% of gross asset value, reducing to 30% of gross
asset value by 31 December 2023. Within this limit, the
maximum exposure to developments, as measured by
the expected gross development cost, which are not
under forward-funded arrangements, will not exceed
15% of gross asset value at the commencement of the
relevant development.
• No more than 10% of gross asset value will be invested in
properties that are not life science properties.
In addition, the Company will not invest more than 10% of
gross asset value in other alternative investment funds or
closed-ended investment companies.
Compliance with the above restrictions is calculated
immediately following investment and non-compliance
resulting from changes in the price or value of assets
following investment is not considered as a breach of the
investment restriction.
The Company defines: (i) “gross asset value” as “the value of
the assets of the Company and its subsidiaries from time to
time, determined in accordance with the accounting policies
adopted by the Company”; (ii) “gross contracted rents” as “the
total rent receivable on a property plus rent contracted from
expiry of rent-free periods and uplifts agreed under the leases
contracted on the Company’s portfolio of properties”; and (iii)
“ERV” as “the estimated annual open market rental value of
lettable space”.
Gearing
The level of gearing will be on a prudent basis for the asset
class, and will seek to achieve a low cost of funds, whilst
maintaining flexibility in the underlying security requirements
and the structure of the Company. It is envisaged that an LTV
ratio of between 30% and 40% would be the optimal capital
structure for the Company over the longer term. However, in
order to finance value-enhancing opportunities, the Company
may temporarily incur additional gearing, subject to a
maximum LTV ratio of 55%, at the time of an arrangement.
Debt is secured at asset level and, potentially, at Company
or special purpose vehicle level, depending on the optimal
structure for the Company and having consideration to key
metrics, including lender diversity, debt type and maturity
profiles.
Use of derivatives
The Company may utilise derivatives for efficient portfolio
management only. In particular, the Company may engage
in full or partial interest rate hedging or otherwise seek to
mitigate the risk of interest rate increases on borrowings
incurred in accordance with the gearing limits as part of the
Company’s portfolio management.
Cash management policy
The Company may hold cash on deposit and may invest
in cash equivalent investments, which may include short-
term investments in money market type funds (“cash and
cash equivalents”).
There is no restriction on the amount of cash and cash
equivalents that the Company may hold and there may be
times when it is appropriate for the Company to have a
significant cash and cash equivalents position.
REIT status
The Company intends to continue conducting its affairs so as
to enable it to remain qualified as the principal company of a
REIT group for the purpose of Part 12 of the Corporation Tax
Act 2010 (and the regulations made thereunder).
Changes to, and breach of, the investment policy
Any material change to the Company’s investment policy set
out above will require the prior approval of shareholders by
way of an ordinary resolution at a general meeting.
In the event of a breach of the investment guidelines and the
investment restrictions set out above, the AIFM shall inform
the Board upon becoming aware of the same and if the Board
considers the breach to be material, notification will be made
to a Regulatory Information Service.
Share dealing and share prices
Shares can be traded through your usual stockbroker. The
Company’s shares are admitted to trading on the LSE.
Share register enquiries
The register for the ordinary shares is maintained by
MUFG Corporate Markets (UK) Limited. In the event
of queries regarding your holding, please contact
the Registrar on 0371 664 0300. You can also email
infosharedeal@cm.mpms.mufg.com
. Changes of address
and mandate details can be made over the telephone, but
all other changes to the register must be notified in writing to
the Registrar: MUFG Corporate Markets (UK) Limited, Central
Square, 29 Wellington Street, Leeds LS1 4DL.
SHAREHOLDER INFORMATION
CONTINUED
154
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Annual Report and Financial Statements 2024
154
Electronic communications from the Company
Shareholders have the opportunity to be notified by email
when the Company’s Annual Report, Half-yearly Report and
other formal communications are available on the Company’s
website, instead of receiving printed copies by post. This
has environmental benefits in the reduction of paper,
printing, energy and water usage, as well as reducing costs
to the Company. If you have not already elected to receive
electronic communications from the Company and wish to do
so, please contact the Registrar using the details shown on
the inner back cover. Please have your investor code to hand.
Share capital and net asset value information
Ordinary 1p shares
350,000,000
SEDOL Number
BP5X4Q2
ISIN
GB00BP5X4Q29
Sources of further information
Copies of the Company’s Annual and Half-yearly Reports are
available from the Company Secretary, who can be contacted
at
labs_cosec@cm.mpms.mufg.com
and, together with
stock exchange announcements and further information on
the Company, are also available on the Company’s website,
lifesciencereit.co.uk
.
Financial calendar
16 April 2025
Announcement of final results
3 June 2025
Annual General Meeting
30 June 2025
Half-year end
September 2025
Announcement of half-yearly results
31 December 2025
Year end
155
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155
STRATEGIC REPORT
CORPORATE GOVERNANCE
ADDITIONAL INFORMATION
FINANCIAL STATEMENTS
GLOSSARY
Adjusted earnings per share (“Adjusted EPS”)
EPRA EPS adjusted to exclude one-off costs, divided by
the weighted average number of shares in issue during
the period
AGM
Annual General Meeting
AIC
The Association of Investment Companies
AIFM
Alternative Investment Fund Manager
AIM
A market operated by the London Stock Exchange
Association of Investment Companies
The Company is a member of the AIC
BREEAM
Building research establishment environmental
assessment method
BREEAM Interim Excellent
Interim BREEAM certifications indicate the performance of the
building at the design stage of assessment
Carbon neutrality
Purchasing carbon reduction credits equivalent to emissions
released without the need for emission reductions to have
taken place
Company
Life Science REIT plc
Contracted rent
Gross annual rental income currently receivable on a property
plus rent contracted from expiry of rent-free periods and
uplifts agreed at the balance sheet date less any ground rents
payable under head leases
Development property and land
Whole or a material part of an estate identified as having
potential for development. Such assets are classified
as development property and land until development
is completed and they have the potential to be fully
income generating
EPC
Energy performance certificate
EPRA
The European Public Real Estate Association, the industry
body for European REITs
EPRA cost ratio
The sum of property and administration expenses as a
percentage of gross rental income calculated both including
and excluding direct vacancy cost
EPRA earnings
IFRS profit after tax excluding movements relating to changes
in fair value of investment properties, gains/losses on property
disposals, changes in fair value of financial instruments and
the related tax effects
EPRA earnings per share (“EPRA EPS”)
A measure of EPS on EPRA earnings designed to present
underlying earnings from core operating activities based
on the weighted average number of shares in issue during
the period
EPRA guidelines
The EPRA Best Practices Recommendations Guidelines
September 2024
EPRA NAV/EPRA NDV/EPRA NRV/EPRA NTA
per share
The EPRA net asset value measures figures divided by the
number of shares outstanding at the balance sheet date
EPRA net disposal value (“EPRA NDV”)
The net asset value measure detailing the full extent of
liabilities and resulting shareholder value if company assets
are sold and/or if liabilities are not held until maturity. Deferred
tax and financial instruments are calculated as to the full
extent of their value or liability, net of any resulting tax
EPRA net initial yield (“EPRA NIY”)
The annualised passing rent generated by the portfolio, less
estimated non-recoverable property operating expenses,
expressed as a percentage of the portfolio valuation (adding
notional purchasers’ costs), excluding development property
and land
EPRA net reinstatement value (“EPRA NRV”)
The net asset value measure to highlight the value of net
assets on a long-term basis and reflect what would be
needed to recreate the Company through the investment
markets based on its current capital and financing structure.
Assets and liabilities that are not expected to crystallise in
normal circumstances, such as the fair value movements on
financial derivatives and deferred taxes on property valuation
surpluses, are excluded. Costs such as real estate transfer
taxes are included
EPRA net tangible assets (“EPRA NTA”)
An EPRA net asset value measure with adjustments made for
the fair values of certain financial derivatives and assumes
entities buy and sell assets, thereby crystallising certain levels
of deferred tax liability
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EPRA sBPR
European public real estate association sustainable best
practice recommendations
EPRA ‘topped-up’ net initial yield
The annualised passing rent generated by the portfolio,
topped up for contracted uplifts, less estimated
non-recoverable property operating expenses, expressed
as a percentage of the portfolio valuation (adding notional
purchasers’ costs), excluding development property and land
EPRA vacancy rate
Total open market rental value of vacant units divided by
total open market rental value of the portfolio, excluding
development property and land
EPS
Earnings per share
Equivalent yield
The weighted average rental income return expressed as
a percentage of the investment property valuation, plus
purchasers’ costs, excluding development property and land
ERV
The estimated annual open market rental value of lettable
space as assessed by the external valuer
EU taxonomy
A classification system that aims to provide a clear definition
of what should be considered as ‘sustainable’ economic
activity
FCA
Financial Conduct Authority
Fitwel
A real estate certification that measures a building against
seven health impact categories
FRI
A full repairing and insuring lease, known as a FRI lease, is a
commercial lease which gives the occupier sole responsibility
for the maintenance, repair, and insurance of the asset for the
duration of their lease.
GAV
Gross asset value
Group
Life Science REIT plc and its subsidiaries
IASB
International Accounting Standards Board
IFRS
International Financial Reporting Standards
IFRS earnings per share (“EPS”)
IFRS earnings after tax for the year divided by the weighted
average number of shares in issue during the period
IFRS NAV per share
IFRS net asset value divided by the number of shares
outstanding at the balance sheet date
Interest cover
Adjusted operating profit before gains on investment
properties, interest and tax divided by the underlying net
interest expense
Investment property
Completed buildings, excluding development property and
land, also referred to as investment assets
Like-for-like rental income movement
The increase/decrease in contracted rent of properties
owned throughout the period under review, expressed as a
percentage of the contracted rent at the start of the period,
excluding acquisitions, disposals, development property
and land
Like-for-like net rental income movement
The increase/decrease in net rental income of properties
owned throughout the period under review, expressed as a
percentage of the net rental income at the start of the period,
excluding acquisitions, disposals, development property
and land
Like-for-like valuation movement
The increase/decrease in the valuation of properties
owned throughout the period under review, expressed as a
percentage of the valuation at the start of the period, net of
capital expenditure
Loan to value ratio (“LTV”)
Gross debt less cash, short-term deposits and liquid
investments, divided by the aggregate value of properties
and investments
Main Market
The premium segment of the London Stock Exchange’s
Main Market
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STRATEGIC REPORT
CORPORATE GOVERNANCE
ADDITIONAL INFORMATION
FINANCIAL STATEMENTS
NAV
Net asset value
Net equivalent yield ("NEY")
The weighted average rental income return expressed as
a percentage of the investment property valuation, plus
purchasers' costs, excluding development property and land
Net initial yield (“NIY”)
Contracted rent at the balance sheet date, expressed as
a percentage of the investment property valuation, plus
purchasers’ costs, excluding development property and land
Net rental income
Gross annual rental income receivable after deduction of
ground rents and other net property outgoings, including void
costs and net service charge expenses
Net reversionary yield (“NRY”)
The anticipated yield to which the net initial yield will rise (or
fall) once the rent reaches the ERV
Net zero carbon
The overall balance between emitting and absorbing carbon
in the atmosphere
Occupancy
Total open market rental value of the units leased divided
by total open market rental value, excluding development
property and land, equivalent to one minus the EPRA
vacancy rate
Ongoing charges ratio
Ongoing charges ratio represents the costs of running the
Group as a percentage of IFRS NAV as prescribed by the
Association of Investment Companies
Passing rent
Gross annual rental income currently receivable on a property
as at the balance sheet date less any ground rents payable
under head leases
Property income distribution (“PID”)
Profits distributed to shareholders that are subject to tax in
the hands of the shareholders as property income. PIDs are
usually paid net of withholding tax (except for certain types
of tax-exempt shareholders). REITs also pay out normal
dividends called non-PIDs
RCF
Revolving credit facility
Real Estate Investment Trust (“REIT”)
A listed property company that qualifies for, and has elected
into, a tax regime that is exempt from corporation tax on
profits from property rental income and UK capital gains on
the sale of investment properties
Scope 1 and 2 emissions
GHGs released directly and indirectly from the Group e.g.
company offices, company vehicles and energy purchased by
the Group
Scope 3 emissions
All other GHGs released indirectly by the Group, upstream
and downstream of the Group’s business
SONIA
Sterling Overnight Index Average
Task Force on Climate-related Financial Disclosures
(“TCFD”)
An organisation established with the goal of developing a
set of voluntary climate-related financial risk disclosures to
be adopted by companies to inform investors and the public
about the risks they face relating to climate change
Total accounting return
The movement in EPRA NTA over a period plus dividends
paid in the period, expressed as a percentage of the EPRA
NTA at the start of the period
Total cost ratio
EPRA cost ratio, excluding one-off costs calculated both
including and excluding vacant property costs
UK AIFM Regime
The Alternative Investment Fund Managers Regulations
2013 (as amended by The Alternative Investment Fund
Managers (Amendment etc.) (EU Exit) Regulations 2019)
and the Investment Funds Sourcebook forming part of the
FCA Handbook
Weighted average unexpired lease term (“WAULT”)
Average unexpired lease term to first break or expiry
weighted by contracted rent across the portfolio, excluding
development property and land
GLOSSARY
CONTINUED
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The production of this report supports the work of the
Woodland Trust, the UK’s leading woodland conservation
charity. Each tree planted will grow into a vital carbon store,
helping to reduce environmental impact as well as creating
natural havens for wildlife and people.
CONTACT DETAILS OF THE ADVISERS
Alternative Investment Fund Manager
G10 Capital Limited
(part of IQ-EQ)
4th Floor
3 More London Riverside
London SE1 2AQ
Investment Adviser
Ironstone Asset Management Limited
Registered office
First Floor Radius House
51 Clarendon Road Watford
Hertfordshire WD17 1HP
London office
55 Wells Street
London W1T 3PT
Investor enquiries: investments@lifesciencereit.co.uk
Company website
www.lifesciencereit.co.uk
Administrator
Waystone Administration Solutions (UK) Limited
Broadwalk House
Southernhay West
Exeter EX1 1TS
Auditor
Deloitte LLP
2 New Street Square
London EC4A 3BZ
Corporate Broker and Financial Adviser
Panmure Liberum Limited
25 Ropemaker Street
London EC2Y 9LY
Financial PR and IR Adviser
FTI Consulting
200 Aldersgate, Aldersgate Street
London EC1A 4HD
Legal Adviser
Gowling WLG (UK) LLP
4 More London Riverside
London SE1 2AU
Property Manager
Savills plc
33 Margaret Street
London W1G 0JD
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds LS1 4DL
Email: shareholderenquiries@cm.mpms.mufg.com
Website: mpms.mufg.com
Company Secretary and registered office
MUFG Corporate Governance Limited
Central Square
29 Wellington Street
Leeds LS1 4DL
Email: labs_cosec@mpms.mufg.com
Depositary
Gen II Fund Services (UK) Limited
8 Sackville Street
London W1S 3DG
Valuer
CBRE Limited
Henrietta House
Henrietta Place
London W1G 0NB
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Life Science REIT plc
investments@lifesciencereit.co.uk
contact@lifesciencereit.co.uk
020 3102 9465
www.lifesciencereit.co.uk