UK: Raising The Bar - EPRA Annual Report Awards 2008/09

Last Updated: 24 September 2009
Article by Deloitte Real Estate Group

Most Read Contributor in UK, August 2017


Raising the bar Deloitte, in conjunction with EPRA, are delighted to announce the results of our 2008/09 Annual Report Awards. Improving financial reporting for the benefit of shareholders and investors is close to the heart of both EPRA's Reporting and Accounting Committee and the Deloitte Real Estate team. Eighty annual reports from across Europe were included in the survey and reviewed for compliance with the EPRA Best Practices Recommendations (BPR), the purpose of which is to promote consistency and transparency in the financial reporting of listed real estate companies in Europe.

I would like to congratulate not only the award winners, Land Securities, for Best Annual Report and Sponda, for Most Improved Annual Report, but also the large number of companies which upgraded their annual reports compared with last year. Raising the bar to the next level is key in helping to continually improve financial reporting across the whole sector for the benefit of shareholders and investors.

However, whilst congratulations are due for efforts this year, there is still room for improvement going forward. EPRA has renewed its focus on the BPR and issued extensive updates for 2009, including a new section on additional performance measures. I encourage companies to consider where these can be applied in their own financial reporting.

I would like to thank PGGM for its continued sponsorship of these awards, the Jury for its very valuable review of our findings and Jennifer Chase, Gemma Grey and the team of reviewers at Deloitte. Please contact me or Gareth Lewis at EPRA if you would like further information about this survey. We are happy to meet with finance teams to discuss our findings and ways of improving individual company financial reporting in future.

Claire Faulkner

Real Estate Partner


Key points from the 2008/09 EPRA review

  • The bar has been raised even higher with improved financial reporting across the spectrum and narrative reporting giving greater transparency.
  • Land Securities is the winner of the 2008/09 EPRA Best Annual Report Award, with commendations to British Land and SEGRO. The award to Land Securities recognises its innovative, clear and transparent reporting.
  • The 2008/09 EPRA Most Improved Annual Report Award goes to Sponda with commendations to Mucklow and Big Yellow.
  • UK corporates continue to set the standard, with the top three places being awarded to UK companies and, in the main part, a good response to reporting of current market issues. However, Dutch companies showed greater consistency and earned the highest average scores.
  • Whilst companies are recognising the need to issue results more quickly in response to market pressure, there has been limited improvement in this area with a few notable exceptions.
  • There are early signs that companies are streamlining annual reports to aid clarity, with portfolio and CSR information being published separately.
  • 95% of companies now apply the fair value model which enhances comparability in financial reporting.
  • There is significant room for improvement in reporting of KPIs. The lack of identifiable KPIs in many companies and differences in calculation result in a lack of comparability of performance.
  • 50% of the largest companies are consistently reporting EPRA NAV metrics. However, fewer than 10% of companies reported on all three of the EPRA diluted NAV, diluted NNNAV and diluted EPS measures.

1. Introduction to the awards

Best Practices Recommendations

In the words of EPRA, its mission is to "promote, develop and represent the public real estate sector". EPRA has published Best Practices Recommendations (BPR) setting out guidelines for European real estate companies to follow in financial reporting. The BPR are just that, 'best practice', and are not governed by regulation or law. However, many of the BPR are covered by financial reporting standards and are an extension of those requirements.

The BPR are regularly updated following a consultation process led by the EPRA Reporting and Accounting Committee. Updates typically reflect amendments to reporting standards and provide additional guidance to IFRS, as well as reflecting changes in the market and demand for information to be disclosed in annual reports.

Purpose of the EPRA Annual Report Awards

The EPRA review 2008/09 has assessed compliance with the EPRA BPR issued in May 2008.

This year Deloitte, in conjunction with EPRA, has created two award categories to recognise both those companies that continue to prepare annual reports with a high level of compliance with the BPR and those companies which have made a significant investment in improving their annual reports. The winners of both awards are detailed in Sections 4 and 5.

  • Best Annual Report The quality of the annual reports surveyed was very high, particularly amongst the top six companies where the final scores were very close. To differentiate further between them, the extent to which the companies embraced the spirit of the BPR in promoting transparency and clarity in reporting was also considered.
  • Most Improved Annual Report This award recognises those companies which have most improved their annual reports and the information provided to shareholders and the investor community. Whilst not in the top tier of annual reports surveyed, all finalists showed a commitment to improving the quality and content of their annual reports.

In addition to announcing the winners of each award, this report highlights how the 80 companies surveyed complied with key BPR reporting metrics and how they dealt with reporting matters of particular relevance in the current economic climate. These observations are included in Sections 2 and 3 respectively.

The BPR comprise six sections:

  1. General items – guidance on specific additional disclosures for real estate companies within the IFRS framework, to enhance uniform performance reporting and presentation between real estate companies.
  2. Accounting and valuation principles – for guidance in areas where IFRS are not considered to be specific enough for real estate companies.
  3. Presentation of accounts – provides standard formats for presentation of financial statements.
  4. Notes and additional disclosure – provides guidance on additional notes and disclosure items to make the financial reporting of real estate companies more insightful.
  5. Performance reporting – guidance on presentation of portfolio performance.
  6. NAV/EPS – provides standard calculation methods for diluted NAV, diluted NNNAV and diluted EPS.

Companies reviewed

EPRA has over 200 active members, including Europe's leading property companies, investors and consultants that together manage more than €300 billion of real estate assets.

The EPRA review 2008/09 assessed the 2008/09 annual reports of 80 real estate companies from across Europe – the members of the FTSE EPRA/NAREIT Developed Europe Index (the Index). Of the 80 companies surveyed, 78% reported to a December 31 year end.

Geographical location and investment As shown by Figure 1, UK companies dominate the Index. Overall companies' investments are concentrated primarily in domestic and European markets:

  • The UK was the most highly represented country in the Index, with 28 out of 80 companies. A total of 12 countries were represented.
  • Over half of the companies surveyed apply the Euro as their reporting currency.
  • More significantly, of the 80 companies surveyed, 73 focused on investing either within domestic markets or within Europe and fewer than 10% investing outside Europe. The option to invest further afield therefore could represent significant opportunity for growth.


The portfolio sizes of companies in the Index vary significantly (see Figure 2) and the majority of companies invested across more than one sector:

  • The relative size of portfolios by value varied between smaller portfolios of €100-200 million, to those valued over €10 billion, representing a wide diversity in the asset management strategies and capabilities of the companies. There was a concentration of mid-sized portfolios of €1-5 billion.
  • Figure 3 shows that the majority of companies operate across multiple industry sectors rather than being entirely specialised within one sector.
  • The most common sectors invested in are the office sector (61 companies) and the retail sector (48 companies). The main other sectors of operation were (in descending order) residential, industrial, and warehousing.

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