Regional REIT (LSE:RGL) — Full Year Results

0:00 Good morning, and welcome to the REGIONAL REIT Limited Full Year Results Investor Presentation. Throughout this recorded meeting, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply type in your question and press send. The company may not be in a position to answer every question received during the meeting itself, but the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Stephen Ingalls, Chief Executive Officer. Good morning, sir. Thank you, Paul. Good morning, everyone, and welcome to the presentation of the results of REGIONAL REIT for the period ending 12/31/2025. This morning, I'll take you through the results for 2025 and then spend a bit of time updating you on the continued progress that is being made towards our strategic goals as well as what we are witnessing in the marketplace.

0:54 As Paul mentioned, you're happy to take questions. We'll deal with them at the end of the presentation. Those that we don't get around to, we will, of course, respond to as soon as we possibly can. If I may introduce this morning's team from REGIONAL REIT, I'm joined. I'm Steven Ingalls, chief executive officer of ESR, Regional REIT's manager. I'm joined by Alastair Huett, the finance director, by Simon Marriott, our property investment director, and by Adam Dickinson, our investor relations director. I will start by stating that it's been a difficult year for the company with continuing headwinds of higher interest rates, many key government initiatives creating issues for UK businesses, ultimately our customers, and, of course, the uncertainty created by the broader macroeconomic and geopolitical backdrop.

1:53 The environment undoubtedly has had an impact on UK businesses, which has resulted in a slower leasing market than we had anticipated at the beginning of twenty twenty five. Despite this, the company has made good progress over the past twelve months. If we move to slide three, please, Adam. We have delivered on our targeted sales program with £51,600,000 of sales ahead of our estimate 40 to 50,000,000, which was essential in reducing debt and improving the position of the company in relation to VOID costs. The banking facility, which had been due to expire in August 2026, was refinanced, improving cash flow management.

2:42 The company also renegotiated the terms of the management contract, creating much greater alignment between the manager and shareholders by also generating substantial annual operational savings. And of course, we delivered a 10p per share fully covered dividend. As we reported in 2025, during the year, we experienced several large unexpected tenant breaks, which had an initial impact on income in 2025, though the full effect of these will be felt in 2026. As a consequence of this and the board's wish to retain cash for accretive reinvestment into the portfolio, we are targeting a prudent dividend of 8p per share in 2026.

3:37 So let me take you through the salient points for the year to 12/31/2025. A few highlights then. We continue with our efforts to reposition the portfolio with capital expenditure in the period up from £8,200,000 in 2024 to 11,800,000 in 2025. Despite the slow leasing market, we still delivered 64 new lettings and encouragingly at rents 3.9% ahead of ERV, showing further signs of rental growth for the right product. EPRA occupancy at 76% is slightly down in last year largely as a result of the three large breaks exercised in 2025.

4:27 EPRA EPS in the year was 11.8p per share, which more than fully covered the 10p dividend for the year 2025. Through our strategic sales program, we've been able to manage down the LTV to just over 40% from just over 42% despite the drop in valuation. Gross borrowings you will note have decreased to $266,200,000 with $50,500,000 of debt repaid in the period. Moving on, Adam, please. Slide five. Just looking at the strategic sales program. We sold 18 assets in 2025 for £51,600,000, and the sales program continues to gain momentum.

5:22 This is evidenced by a further five sales completed post year for £12,300,000. And together with this, we have a further 14 sales well advanced either contracted in solicitors' hands or where terms have been agreed, which totals a further £29,000,000. You will note from the slide that the 2026 sales, the vast majority, almost 80 are from the noncore underperforming assets contained in the sales segment of the portfolio, and the average occupancy of these and sales undertaken to date, 22%, and in those sales, which we hope to complete by the half year, only 27%.

6:09 So on completion, the disposal of these assets will improve net income by £2,100,000, again, emphasizing the importance of disposing of void or largely void assets, which are a significant drain on the net income position of the company given the landlord's VoIP costs. Moving on, Adam, please. We continue to reposition the portfolio, and you will note average rents have been increasing. We are seeing a slight increase in average leasing size and are in discussions on several large space requirements at this time. It's too early to say whether this is a is a trend or it is encouraging as many of these requirements are tenants upsizing.

7:00 Slide seven, please, Adam. This is a map familiar to most of you who seen our presentations before showing The UK and, obviously, our assets geographically spread across The UK around the major conurbations. I also highlight some of the core deals undertaken over the year. So many of you have seen the half many have seen in the half year, but of note, another take in the second half of the year are delighting to secure a group at 300 Bath Street, Park House Bristol, where we let 10,000 square feet to open tree mobility as rent of refurbished space at £23 per square foot. Origin one and two Crowley, where we've let just under 8,000 square feet to Mingus, and a rent of £27.50 per square foot. And DMH Stallard, again, at £27.50 per square foot.

8:01 Encouragingly, where we are expanding CapEx and refurbishing space, rents typically are in the range of 20 to £30 a square foot, so considerably higher than the £15.60 average rent across the portfolio. Slide eight, please, Adam. A quick look at the segmentation of the portfolio. Just looking at the major changes, you'll note that the sales element has increased and the value add element decreased. This is mainly as a result of the slower development market with the long promised planning changes yet to make a material impact and increased costs, particularly in the delivery of beds, I. Residential and PBSA making schemes less profitable, which has resulted in land values coming under pressure.

8:57 Where we are holding vacant or largely vacant assets, which, of course, are more readily saleable to developers, on a case by case basis, we are choosing to sell now and recycle that capital in terms of debt and and into our CapEx program rather than progressing planning as this results in reduction of void costs, debt levels, and interest payments. Core and CapEx, the core remains over 80% of the portfolio, and occupancy levels have held up well with core at over 86% occupancy and CapEx to core growing in occupancy as we undertake the refurbishment projects. Slide 10, please, Adam.

9:48 Now looking at the trends of regional offices in respect to supply and demand, we are seeing continuing demand for offices with the 2025 number in line with recent years, and rental growth continues to tick up. You'll see from the top right hand, graph, the average rental growth in 2025, the regions was 3.2%, slightly ahead of London, and that's very much in line with what we have seen in our portfolio, which to reiterate saw net lettings delivered on average at 3.9% ahead of ERV. Occupiers are from a very broad range of uses, the largest being the professional sector, which accounted for just over 25%, education and health sector, almost 16%, and technology at 14%.

10:43 Slide 11, Adam, please. We'll now look at the supply side and development of new stock. Firstly, let's look at construction. Whilst we are still seeing stock being completed, you'll see from the bottom right hand chart that this is diminishing. Developments in commenced in '23 and '24 are now being completed. And whilst we see delivery in a large delivery in 2027 that falls off a cliff in 2028 and little or no new development beyond that. Indeed, in total, Abbasid Young estimate that only 2,500,000 square feet is under construction, a very, very small number in terms of the overall market.

11:30 And this will continue to fall as there's little or no new starts. If you look at the left hand graph there, that is construction new starts, and it really is a a very diminishing story, very little in the way of new starts at all. So very little new construction. Construction starts are weak as they've been for fifteen years. Then existing supplies, the top right hand side, I've mentioned many times the flight to quality. Grade a space conforming to EPC a and b is what the majority of occupiers are seeking, and that's been borne out in terms of lettings undertaken in 2025. Prime stock is very limited indeed at just five percent of total availability.

12:18 And as I say, with little or no new developments commencing, this will continue to decrease. Grainy availability, which is the green, is also decreasing with the vast majority of available stock being grade b or c, and this is not what the vast majority of occupiers are seeking. With demand holding and there being little or no new prime stock expected to be delivered beyond 2028, then tenants are left with a few options. They can continue to occupy substandard accommodation, which is noncompliant and not really meeting their needs or, more importantly, the needs of their staff, or they can relocate to the next best available space, I. E, grade a accommodation conforming to EPC a or b, which is exactly what we offer and are striving to offer with our CapEx program.

13:22 We have strong conviction that not not all companies require the very best prime space at rents that will soon be in excess of £50 per square foot. But rather, the majority of the market will seek very good quality grade a space, and this will push rents for this accommodation, which will still be in short supply towards an average above £30 a square foot over the medium term. Remember I mentioned earlier that our refurbished space is achieving rents of between 20 and £30. We have no doubt that that rental growth will continue, and that rents for good quality grade a space will exceed 30 pounds. This still represents a substantial discount to Prime.

14:10 Next slide, please, Adam. We continue to invest in the portfolio and upgrade the quality of our properties. In 2025, we completed 18 projects for just over £10,000,000. We're currently on-site on a further 10 projects for £4,000,000, due to commence an additional 13 projects, which we estimate will cost a reach of £9,400,000. And on the right, there are just some thumbnails of a few of the projects completed in 2025. 13, please. Thanks, Adam. Then talking through some of the case studies which demonstrates our strategy in action.

14:56 On the left, a CapEx project in Milton Keynes that has completed delivering improvements that have allowed us to push rents up with the latest renewal taking place at £21 per square foot, up from £18 per square foot previously, being charged, an increase of over 16%. The expansion not only delivered improvement income, but also delivered a 7.5% improvement in value. On the right hand side, I think, you know, is a good example of how a small amount of CapEx can improve the long term viability of an asset. Here, we invested £200,000 in works, which took the building from EPCC to b, and in doing so, us secure a lease extension one with one of the main tenants.

15:46 So not huge expenditure to improve the EPC ratings. Next slide, please, Adam. As a reminder of how CapEx can deliver both improved leasing outcomes and a higher sales price, this is a property in Bedford that we sold in 2025. The CapEx works we undertook improved EPC rating, the tenant renewed in a long term lease and at the end of business plan, we sold the asset for a profit to book value. This in itself helped to reduce the company's gearing and helped us in our ability to refinance the facility announced earlier that we refinanced in December 2025. Slide 15, please, Adam.

16:37 Further examples of improvements, not again EPC improvement from c to a. Hill partnerships has led three and a half thousand square feet of space at twenty pounds sixty three. Previous passing rents on this business park, 14 to £16 per square foot. So a large improvement. Slide 16, please, Adam. Another successful project where we've upgraded the building from EPC d to a in a sentence, then we successfully leased a vacant accommodation and achieved an 18.5% uplift in the previous passing rent. Value add remains a key segment of the portfolio.

17:23 And whilst I mentioned earlier, the difficulty is still being witnessed in the planning regime. Nevertheless, we are still taking many projects through the planning process where we believe there is meaningful value add opportunities to be unlocked. There's still no intention of undertaking direct development of these assets. Rather, we will improve the use, improve the value, and sell. ESG remains a very important component in tenants' decision making processes when seeking office accommodation. We continue to make good progress in improving the EPC ratings, And over 60% of our portfolio is now EPC a or b and a further 25% at c.

18:18 I think given the, examples that I showed, the small amounts of money can improve c to an a or c to a b, making them compliant. Given the ongoing sales and CapEx programs, this will allow us to continue to improve the portfolio and the majority of the EPC d and e and below rated assets are part of the sales program. There remains a structural issue in The UK commercial real estate sector in respect of EPCs with the British Property Federation estimating that only 19% of commercial real estate build buildings in The UK currently meet the twenty thirty standard.

19:04 This really highlights the scale of the opportunity for regional REIT. As you can see from this slide, our four d installation program has been installed in 46 locations with the next phase about to commence. This is a sophisticated monitoring of energy and operating systems and improves both EPC ratings and delivers potentially substantial financial benefits. We have now the opportunity to analyze the information gathered from the first four assets, and this identified savings of 160,000 per annum to regional REITs over and above savings to our occupiers.

19:52 This along with additional 42 properties once implemented could provide substantial savings to operating costs. We will, of course, provide further updates to shareholders on this as we continue our rollout and analysis information has been witnessed. The solar initiative continues to be rolled out across the portfolio. Six sites completed online with a further 14 due to be completed soon with additional install phases planned. The current six sites are producing 1,385 kilowatts, the equivalent of powering 1,600 homes annually. And, of course, there's a carbon reduction we expect to be at 910 tons of reduced c o two emissions.

20:42 Total c o two avoided from both projects is a 122,000 tonnes from 10 properties, and this obviously will increase substantially as we analyze and roll out both solar and four d across the rest of the portfolio. Finally, on this slide, we have officially launched REGIONAL REIT's flexible workspace offering, which we intend to roll out across 10 sites in the short term. Okay. Slide 22 is our debt slide, so I'll hand over to Alastair to cover the debt or to Ali. Sorry. Yeah. I'll I'll Okay. That that's that slide shows the the summary of our debt facilities at the year end. Steven mentioned we achieved the refinancing of the our syndicated facility, and there's also been a continued focus on degearing with 50,500,000 repaid in the year, the bulk of that coming from property sales.

21:42 Post the year end, we have repaid 7,800,000 debt and are about to repay now 3.7, taking the total repayments for the year to date to 11,500,000. As I mentioned, we've refinanced the facility we had with RBS, Bank of Scotland and Barclays, and we refinanced that with Santander coming in to replace Barclays. That facility now expires in December 2028. The existing hedging that's shown on the table, that's in place until August 2026, but we've now entered into new hedging, which takes us from the period of August 26 to the maturity date in December 2028. That hedging has obviously increased in price given the market rates. So the straight rate in the new hedging is 3.56% against the blend of 0.98% as shown on the table, so an increase of just under 2.6%.

22:37 The overhedged position at the year end, I think it notes in the table there, it was a 101% hedging. That's now been rectified, so the debt facility has now back to been fully hedged. Going forward, focus is shifting towards the refinancing of the Scottish Widows and Aviva facility, which matures in December 2027. We are likely to have to do some housekeeping in that facility to reduce the LTV in advance of the refinancing, but we have started initial discussions with the existing lenders, and we'll wait to continue them over the next weeks and months. Our aim is to have that facility refinanced by this time next year, but we have to be mindful that refinancing early will result in an increased cost as it's a fixed rate facility rather than a a swap term facility, so we don't have the same ability to roll forward the hedging as we did with the recent refinanced facility.

23:35 Okay. Thanks, Allison. Okay. I hope I hope we can move on. So key metrics overview. I mean, this is a summary of what we've just been discussing. So I don't intend going to this in any detail. We have discussed earlier and have previously announced to the market. At the year end, we had 552,200,000 of assets, reduction from the previous year coming from sales and a small proportion being the valuation decrease of 5% like for like. On the small acquisition, this relates to a purchase of Leeds, which is the final piece of a jigsaw on a large development site that we are taking forward in Leeds City Centre.

24:20 And now it means we have complete control over the entire site. And then at the bottom there, you see dividends declared the year at 10p per share. Next few slides are the bridges, in terms of, first one, obviously, in terms of value, showing the, how we arrive at the 552,000,000, of value. Slide 25, the bridge of income and earnings showing the 19,100,000 that was estimated, and and we obviously came in in line with the anticipated numbers.

25:07 Slide 26, the balance sheet overview, again, showing the the $31.05 EPRA NTA as at 12/31/2025. Okay. So looking at strategic priorities, we remain committed to reducing debt and aim to have LTV below 40% in the very near term. We continue to focus on driving income at a headline level by creating better quality space to fuel leasing activity, but also on a net basis by reducing void costs and by a combination of new lettings and the sale of lower occupancy nonperforming assets.

25:57 We continue to improve our EPC numbers and our overall ESG ratings, which is key and represents a pathway to fueling demand. We remain focused on pursuing opportunities to add value to some of the assets by fully investigating change of use options. And we're, of course, committed to paying an attractive, fully covered and sustainable dividend. So to round up, clearly, remain in a period of instability given everything that is going on in Ukraine and The Middle East. The UK real estate market will not be immune from cost pressures and the cost of energy in particular, and therefore, we're hopeful that this will be a short term scenario.

26:48 The impact, however, to the occupation of an investment market is still unknown, and therefore, we must continue to deliver on our plan to reduce gearing and improve net income through all of the measures I've previously discussed. We must strive to put the company in a stronger position than it can be to withstand whatever is ahead. There remains a structural supply and demand imbalance in the regional office sector, which is only likely to strengthen given the severe lack of new site starts. With our attractive energy efficient spaces across The UK, REGIONAL REIT is well placed to benefit from ongoing demand as market conditions stabilize.

27:39 That is the end of my presentation, and we will now happily deal with some of the questions that have been submitted. Fantastic. Thank you very much indeed for your presentation. And ladies and gentlemen, do please continue to submit your questions just using the q and a tab situated on the right hand corner of the screen. Just while the team take a few moments to review those questions submitted today, I'd like to remind you the recording of the presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. As you can see, we've received a large number of questions throughout today's presentation. Thank you to all the investors for submitting those. I'd now like to hand you over to Adam Dickinson to host the Q and A. Adam, could I please just ask you to read out the question where appropriate to do so, direct it to the team and pick up from you at the end. You. Thank you, Paul.

28:25 Stephen, a number of questions have come in. One of them, could you just provide a little bit more color on the valuation decrease in 2025? Yes. I mean, the the I think I mentioned at the half year, if I did mention the half year, that we saw a stabilization in terms of yields at the June half year valuation. That that was also the case in December. So this isn't a market decrease. Yields have actually stabilized. This was down to a change in income, and specifically, three large tenants that we lost over the course of 2025. Those three tenants alone accounted for just over 50% of the valuation change.

29:11 So as I say, the market has stabilized in terms of yields. Those yields obviously are multiple. Then then you apply the multiple to the income to get to your end value. So it's it was a loss of income that created the issue for us, not a a a market conditions. Thank you. And then another couple of questions on CapEx. What is the CapEx program for 2026? And will it be equal to 2025? And in terms of when allocating the CapEx for the CapEx to core, what is the return expected or targeted? Yes. I think, yes, we obviously stated the numbers earlier in the presentation of what is on-site now and what is likely to come on-site. So expenditure likely to be in line with 2025, the the 10 to 12,000,000 figure.

30:10 We obviously accelerated some of our CapEx program in 2025, and we we wanna continue that momentum over the course of '26 and indeed '27. So so, yes, you know, we we want to create high quality RET ladies RET RET ready space, in order to capture the demand that's out there. So we we will continue, at the same, at the same level. In terms of returns, you know, we we have an internal return target that we look to hit, which is, 1.5 times, the capital deployed. So we wanna see that that capital improvement in in terms of the value and also 10% in terms of income. So we wanna try and generate a 10% income return from that CapEx in order to obviously fulfill our our desire to be as high a dividend as possible. So they're the kind of parameters that we work to.

31:09 There is there is flexibility in that. Some of our CapEx is required sometimes for defensive CapEx. If there's specific items required to be done to buildings, which sometimes doesn't add value. But on the whole, our CapEx is accretive CapEx that we are improving value and improving letability. Thank you. And now question on disposals. Could you give a little bit of rationale for the type of assets that are being sold? Yes. I think I did see a question earlier in connection with you did sell some income last year rather than purely the non income and pure performing assets. That is true. The I I mentioned in the presentation, the Bedford property, that was an end of business plan asset.

31:56 Would we have liked to have held that? Yes. But we had to put, the facility that we refinanced in December into position to be refinanced, and therefore, that was sold to pay down debt, in order to refinance that facility. We did sell some income last year for the for the same reason, but the desire is definitely to focus on the poorer performing assets from an income perspective that are dragged on NOI. And I think we've demonstrated that in terms of the sales that we've undertaken so far this year, and those that we hope to complete over the coming weeks and months that are under offer, or indeed already contracted. So when we when we look at those numbers, they are quite meaningful.

32:42 You know, the sales so far occupancy level was only 22% and and a drag on NOI. And on the the the sales that we are hoping to complete in the short term, occupancy just over 27%. Again, a large drag on NOI. So void costs are a major issue, and we're trying to tackle them by a combination of sales and then upgrading space and leasing it. And, of course, as as we lease that space, those obligations become the occupiers. Thank you, Stephen. I think this is a question for Simon. In terms of the investment market the buyers, what type of buyers are you seeing? And how is that impacting on the prices that they're being offered?

33:27 Well, this time last year, there were very few buyers. I'm pleased to say that this time this year, there are the pool is much deeper. It is generally comprising of local property companies, family trusts, mostly all equity. It's very little debt, which is encouraging because, obviously, as soon as you put debt into the equation, that gives another reason for people to not perform. And the last three sales that we've currently got in solicitors' hands have all gone to a best and final offers process, which is very encouraging, I. E, we've got half a dozen people all looking at the same asset. Sort of the only constant has been what we've well known as the French SCPIs who are looking for slightly longer income than we tend to be selling. They were the guys who actually bought our asset last year in Bedford, and they have looked at a number of our other assets. But other than that, it's a very, very fragmented market.

34:30 The unitized funds that used to play in this market for in The UK market are are are pretty much gone and are mostly selling down themselves. Although encouragingly, people that didn't spend money for the last four or five years are very cash rich and are looking to take advantage of what they see as a bottomed out and resurging market in terms of the the the uses that people are putting our assets that we're selling to, very significant change of use to residential, be that either student or to let residential, a couple of bids from hoteliers stroke hospitality companies who will turn office buildings into, you know, cheap budget hotels, travelogue, etcetera.

35:17 And then one or two people who are looking at some of the business park type investments who would look to actually flatten those and put industrial schemes and, to a certain extent, open industrial storage on those facilities where the land price is now pretty cheap. Thank you very much, Sam. A number of questions coming on the dividend. I think probably one for you, Stephen. In terms of historic dividends and historic dividend cover, the company has delivered, could you provide a little bit of color on that? And how you see that going forward? And in terms of paying out the $0.90 PID requirement, what is going to be the use of the 10% that's retained? Yes. Mean we post raise, we did say we would reduce to 90% of PID.

36:03 Last year, clearly, our income was impacted, by the the three large breaks mentioned earlier, and and, the board decided to maintain the 10p, which would have been 90% of PED had income held up. So we we overpaid effectively in 2025. We thought that was the right thing to do. We promised our shareholders a 10p dividend, and and there was, you know, more than sufficient income to pay that. The problem with paying out, higher than Pit is we're unable to retain as much cash in the business. And, clearly, our CapEx program is essential to driving lettings, and driving those lettings is essential to improving net income.

36:49 So the the intention and the the board have taken a more prudent approach. They've they've looked at, the situation and said, fine. We are absolutely committed to maintaining our REIT status and committed to paying the minimum 90% of, property income distributions, so the the pit element, and that results in an 8p per share estimated dividend this year. The remaining cash will be redeployed within the portfolio and used as part of our CapEx program for accretive CapEx. Thank you, Stephen. And I think on the ESG side of things, just a question on EPCs. Is it expensive to upgrade from upgrade the EPCs to the target b EPC for 2030?

37:40 Yeah. I I mean, I I think I demonstrated in in the the property in in Bristol, we we only spent £200,000 to upgrade that that property. So it can be relatively modest or it can be quite expensive, and and our job is to analyze the uplift in rates achieved from that CapEx expenditure and and see if it meets our parameters in terms of the returns on CapEx I talked about earlier. So so no. I mean, it can it can be relatively inexpensive. The journey I mean, I mentioned earlier, 60% of our portfolio is a or b already. The journey from c to a or c to b is relatively modest, and and, you know, an example of things that that can be done to upgrade, you know, clearly changing changing lighting systems to LED lighting is is a huge energy saving component part.

38:36 Very often, we'll change the the the boiler systems from gas to electric, doing away with fossil fuels, and putting in new electric boilers. So that that's commonplace across our portfolio. And those two changes alone can quite often upgrade the building at least one spot from c to b or even from c to a in some instances. So, yes, I mean, it can be done relatively inexpensively. I mean, the you know, I I remember only a few years ago, people talking about this massive black hole, the CapEx involved in taking your portfolio to be conforming to those twenty, thirty regulations would be, you know, tens of millions of pounds. That that is just not the case. What I argued back then and remains the case is we continually invest in our portfolio anyway quite often through the service charge, so the tenants cost.

39:26 This CapEx program that we're talking about in terms of the 10 to 12,000,000 is not the total expend on the portfolio. It's only the landlord's contribution, to more often not vacant space, to upgrade vacant space, or or common areas in in terms of of building. So the the total expenditure in on the portfolio, a lot of it goes through service charge that tenants pay for, and we're continually, expanding capital on our buildings, little and often to keep them current and and ready and comprising something that tenants actually want. Thank you, Stephen. I think that's the main of the questions covered. Any of the smaller particular questions, I'll come back on.

40:11 So Paul, if I may hand back to you. Fantastic. Thank you very much indeed for answering those questions from investment. Of course, as Adam said, can review your questions and then publish responses where appropriate to do so. Just before redirecting investors to provide you with their feedback, and it's particularly important to the team. Stephen, if I may just ask you just for a couple of closing comments, please. Thank you very much for your time this morning. We it has been a difficult year. I think we've made very good progress in 2025. We continue to make progress into 2026. I think my my sort of closing remarks would be it'd be too early to think that, the impact on of geopolitic geopolitics won't, in any shape or form impact The UK or UK real estate market. I think the the the sales program is interesting. We've seen no nobody pulling back from the sales.

41:04 We've seen nobody pulling back from leases, of which there are many in negotiations just now, probably the healthiest position we've seen for some time. But I but I would caveat that by saying that if this is a prolonged war, and the impact on particularly energy prices, and therefore inflation continues, that could well have a detrimental effect on demand in terms of tenants pulling back from making decisions on new leases and indeed operational costs of buildings, as obviously we're not immune to, energy rises and or inflationary pressures from suppliers, particularly on the vacant elements, which makes the the the importance of the sales prat program or highlights the importance of the sales program.

41:52 Sales program has been unimpacted. As as Simon alluded to earlier, the vast majority of our sales are relatively small lot sizes, 5,000,000 or under. That market tends to be a large proportion of cash, and they are individual buyers rather than, you know, one of the market's not reliant on several multiple buyers. So we we think the the sales, program will be largely unimpacted. The the leasing market is showing reasonable signs of activity just now, and we're hopeful of landing, a few significant leases over the coming months. But as I say, the the caveat is whatever mister Trump does and and what happens in terms of the the Iranian conflict.

42:39 So cautiously optimistic where things stand just now, but, clearly, we have to have one eye on on what's happening in the wider world. Fantastic, Tim. Thank you, and thank you for updating investors today. Can I please ask investors not to close this session? We should be automatically redirected to provide your feedback in order the team can better understand your views and expectations. This will only take a few moments to complete, and it'll be greatly valued by the company. On behalf of REGIONAL REIT LIMITED team, thank you very much indeed for joining today's presentation. That concludes today's session. And