Understanding how climate change may affect our assets, both today and over the coming decades, remains an important part of responsible portfolio and risk management.

Assessing physical climate risks

Our physical risk assessment, originally undertaken on an asset-by-asset basis and refreshed in the past year to reflect portfolio changes including acquisitions and disposals, confirmed continued low exposure to climate-related hazards across Germany and the UK.

Only a small number of assets showed potential exposure to rare, high-impact events such as 100-year floods or storm surges, representing 2.6% and under 2% of the total portfolio, respectively.

While these findings are encouraging, climate-related risks continue to evolve. The assessment has helped us identify locations where enhanced monitoring or localised adaptation measures may be beneficial. At certain sites, we are also starting to engage with municipal authorities to understand wider flood mitigation planning and ensure potential building adaptations align with regional resilience efforts.

Incorporating transition risks into financial planning

Alongside physical risks, we continue to assess transition risks, particularly evolving carbon pricing mechanisms. In Germany, the national emissions trading scheme for heating influences operational costs for certain assets and informs decisions around heating system replacements and efficiency investments. Rather than attempting to anticipate specific policy outcomes, our priority is to remain prepared and flexible, ensuring our planning reflects the likely direction of regulation as it continues to develop.

Embedding sustainability into acquisition due diligence

Sustainability considerations form a core part of our acquisition due diligence process. All prospective purchases reaching advanced stages undergo an ESG assessment that examines energy performance, PV potential, heating system condition, tenant energy characteristics, and exposure to physical climate risks. We continue to review opportunities to strengthen consistency across our UK due diligence processes, with a particular focus on physical risk assessments and long-term resilience considerations.

This approach strengthens our understanding of the possible long-term performance of potential acquisitions and the capital investment that may be required to align new assets with our decarbonisation pathway and supports future engagement with tenants.

Renewing assessment of climate-related issues

To ensure our planning remains responsive to emerging developments, we refreshed our assessment of climate-related risks and opportunities during the past year. The review highlighted the increasing relevance of physical climate risks, the importance of asset valuation and resilience considerations, and the significant influence of policy and regulatory change. Energy and carbon pricing exposure, access to capital and evolving stakeholder expectations also remain strategically important. These insights are being integrated into scenario analysis, risk management, and capital planning processes across the Group.

This work was carried out through a dedicated TCFD Scenario Analysis and Materiality Workshop in January 2026 and a structured management survey in February 2026, the outputs of which are reflected in the TCFD Report on pages 35 to 45 of the Annual Report.

Planning for a resilient portfolio

Together, these activities form an integrated approach to climate adaptation. By combining updated data from our projects, evolving scenario analysis and strengthened due diligence processes, we are better able to plan for the long-term and ensure our buildings remain reliable, efficient, and resilient amid a changing climate and an increasingly complex policy environment.