Land Securities Group Plc · LSE:LAND
Land Securities — Q2 2025 Earnings Presentation
47 slides from Land Securities's earnings presentation, Nov 15, 2024
Slide 1: Half Year Results for 30 September 2024
OUR - HALF YEAR .S RESULTS ® Landsec for 30 September 2024 @LandsecGroup y Landsec.com
Slide 2: Half year results 2024
Half year results 2024 Landsec Mark Allan CHIEF EXECUTIVE OFFICER
Slide 3: Strategic focus is delivering
k Landsec — Half year results 2024/25 2 Strategic focus is delivering Positive first half of year with clear future growth potential High quality portfolio underpins growth Delivering attractive income-led total returns Capitalising on accretive growth potential Dashwood, EC2 ae Ne Ae » Customers fo
Slide 4: Portfolio and pipeline set for growth
k Landsec — Half year results 2024/25 3 Portfolio and pipeline set for growth Positive rent reversions plus substantial development opportunity Central London Major retail Future pipeline Piccadilly Lights 1 Mayfield, Manchester | AEM » £16m of lettings 3% above ERV » £26m of lettings 7% above ERV »
Slide 5: Investment markets improving
k Landsec — Half year results 2024/25 4 Investment markets improving Demand starting to return for best assets as rents continue to grow Values return to modest growth Accretive capital recycling Strong capital base to support growth | > Portfolio value +0.9% » Sold £464m non-core assets > 34.9% LTV
Slide 6: Positive financial results
k Landsec — Half year results 2024/25 Positive financial results Raising EPS guidance due to higher LFL growth and cost efficiencies 30 September 2024 30 September 2023 Change EPRA earnings £186m £198m +£1m/+0.1p adjusted for EPRA EPS 25.0p 26.7p surrenders Dividend per share 18.6p 18.2p +2.2% Total
Slide 7: Operational review
Operational review Landsec Mark Allan CHIEF EXECUTIVE OFFICER
Slide 8: Focus on quality underpins income/value growth
k. Landsee — Half year results 2024/25 7 Focus on quality underpins income/value growth Customers focused on best space in each market Central London- 65% of portfolio Major retail destinations — 20% of portfolio Future pipeline Landsec occupancy vs overall London office market - CBRE Landsec occupa
Slide 9: Central London
k Landsec — Half year results 2024/25 Central London ca Robust demand for high-quality space in right locations > Customers focused on best-in-class space » Sustainability, connectivity and amenities remain key factors in decision making » Limited supply of best-in-class space » New record rents in
Slide 10: Central London: growing utilisation and de-densification
k. Landsee — Half year results 2024/25 9 Central London Growing utilisation and de-densification supports ongoing demand Office utilisation still trending higher Customers planning for more space More upsizing than downsizing Unique daily turnstile tap-ins across Landsec portfolio Average sq ft/pers
Slide 11: Central London
k Landsec — Half year results 2024/25 10 Central London Continued positive operational performance Best-in-class assets with high occupancy > £9m of rent signed, 4% ahead of ERV > £8m of rent ISH, 3% above ERV » 7% uplifts on relettings/ renewals 97.9% 97.3% » Occupancy +60bps to 97.9% vs 91.5% for
Slide 12: Retail brands list
Apple Uniqlo Urban Outfitters Zara Reiss Lego Pandora Foot Locker Skechers Primark H&M New Look Footasylum Superdrug River Island Nike JD Sports M&S Sports Direct Next
Slide 13: Major retail destinations
k Landsec — Half year results 2024/25 12 Major retail destinations Continued shift towards fewer, bigger, better stores Stores c. 20% bigger than five years ago Growing demand in our portfolio Continued strong leasing activity Change in brands’ store portfolios since 2018 Last six months plus live d
Slide 14: Major retail destinations
k Landsec — Half year results 2024/25 1B Major retail destinations Increasing uplifts on relettings/lease renewals Major retail destinations occupancy ahead of pre-pandemic levels » YTD retail sales +2.5% > Footfall -1.3% YoY, partly due to timing of Easter » £12m of lettings, 5% above ERV 95.7% 95.
Slide 15: New investment — Major retail destinations
k Landsec — Half year results 2024/25 14 New investment — Major retail destinations Attractive returns with accretive growth potential » Day-one income return of 7-8% with growing rents » Values well below replacement cost » Limited maintenance capex, having repositioned space from larger tenant fai
Slide 16: New investment — Central London
k Landsec — Half year results 2024/25 15 New investment —Central London Significant pipeline of highly sustainable space Two schemes on site with expected completion in late 2025 Future development potential MI Thirty High, Victoria ‘Southbank 383,000 sq ft 299,000 sq ft 2 sites—0.7m sq ft 4 sites—0
Slide 17: New investment - Residential
k Landsec — Half year results 2024/25 16 New investment - Residential Growing visibility on 6,000+ homes pipeline in well-connected locations Started preparations on site Renegotiated development agreement Submitted masterplan, Finchley Road, NW3. - Mayfield, Manchester i Wn > 1,800 homes 1,700 home
Slide 18: Capital allocation
k Landsec — Half year results 2024/25 7 Capital allocation Clear view on risk/return prospects Unlevered return expectations—IRR by segment > Major retail delivers most attractive risk/return > Positive outlook for prime London offices reflecting relatively attractive yields and rental growth » Rent
Slide 19: Financial review
Financial review Vanessa Simms CHIEF FINANCIAL OFFICER
Slide 20: Financial summary
k Landsec — Half year results 2024/25 Financial summary 19 Earnings at top end of expectations, as values return to modest growth 30 September 2023 Change Gross rental income £302m £323m £13m or 1.7p/share EPRA earnings £186m £198m EPRA earnings per share) 25.0p 26.7p Dividend per share 18.6p 18.2p
Slide 21: EPRA EPS ahead of guidance
k Landsec — Half year results 2024/25 EPRA EPS ahead of guidance LFL income growth and efficiency gains offset impact of disposals 20 » Net disposals of £0.5bn over past year reduced net rental income by £20m » Lower surrenders vs prior year reduced net rental income by £13m, as expected ) Like-for-
Slide 22: Growth in like-for-like net rental income increases to 3.4%
k Landsec — Half year results 2024/25 21 Growth in like-for-like net rental income increases to 3.4% Increasing outlook for full year growth Movement in net rental income (£m) > LFL growth” ahead of guidance for the full year 350 +£7m . . Like-for-like growth +3.4% » Agreed 6% uplifts on relettings/
Slide 23: Property values return to modest growth
k Landsec — Half year results 2024/25 Property values return to modest growth 22 2.1% growth in rental values drives 0.9% increase in capital values Valuation LFL equivalent as.at ‘Surplus/ Equivalent yield LFLERV 30 September 2024 (deficit) yield movement movement £m % % bps % CL offices, retail an
Slide 24: Total return on equity for first half year of 3.9%
k Landsec — Half year results 2024/25 23 Total return on equity for first half year of 3.9% Supported by 1.4% increase in EPRA NTA per share Total return on equity Movement in EPRA NTA per share (pps) Half year to Full year to Half year to Full year to Half year to Sept-22 Mar-23 Sept-23, Mar-24 Sep
Slide 25: Maintained strong capital base
b, Landsec — Half year results 2024/25 24 ° ° ° Maintained strong capital base Ca pacity to Invest at attractive point In cycle 30 Sept 31 March 2024 2024 2,000 TM Bonddebt — ll Drawn bank debt/Commercial paper Undrawn bank facilities Adjusted net debt £3,510m £3,517m 1,500 Uy cssomieuedin Group LTV
Slide 26: Capital recycling
k Landsec — Half year results 2024/25 25 Capital recycling £690m of transaction activity since March Capital recycling - s > Sold £464m in first half, in line with book value Disposals » Total disposals since late 2020 now £3.1bn » Invested £140m in major retail destinations » Double-digit ungeared
Slide 27: Raising our earnings outlook
k Landsec — Half year results 2024/25 26 Raising our earnings outlook Improved LFL growth and cost efficiencies offset impact from disposals Capturing benefits of focus on efficiency—Admin expenses » LFL income growth ahead of expectation » Growing reversion to underpin future LFL growth p--— a . |
Slide 28: Overview
Overview Mark Allan Landsec CHIEF EXECUTIVE OFFICER
Slide 29: Outlook
k Landsec — Half year results 2024/25 28 Outlook Positioned for growth » Repositioned business for new reality » Growing reversionary potential across portfolio » Yields for best assets stabilising » Strong balance sheet » Created significant optionality » Clear growth potential in portfolio/ pipeli
Slide 30: Our focus for the near future
k Landsec — Half year results 2024/25 29 Our focus for the near future Enhancing returns whilst maintaining strong capital base > Drive like-for-like incorne growth 5.8% income return at NTA > Further optimise efficiency te » Expand major retail platform LFL income growth » Unlock residential potent
Slide 31: Landsec.com
Landsec.com
Slide 32: Appendices contents
A. Landsec — Appendices Contents Page Page SUSTAINABILITY DEVELOPMENT Our sustainability framework 32 Office-led development returns 40 Sustainability leadership - Demonstrated by our performance across Future devel it r vi all key ESG benchmarks 33 Uture development pipeline Minimum Energy Efficien
Slide 33: Our sustainability framework
A. Landsec — Appendices 32 Our sustainability framework MATERIAL ISSUES Decarbonising ‘our portfolio Enhancing nature and green spaces Using resources efficiently MATERIAL ISSUES Embedding ESG Doing the basics brilliantly KEY TARGETS Achieve net zero emissions by 2040: Near-Term: reduce absolute sco
Slide 34: Sustainability leadership
A. Landsec — Appendices Sustainability leadership Demonstrated by our performance across all key ESG benchmarks 33 EPRA 2024 Received our I1t® Gold Award for best practice sustainability reporting FTSE4Good FTSE4Good 2023 97% percentile We continue to retain our established position in the FTSE4Good
Slide 35: Minimum Energy Efficiency Standards
A. Landsec — Appendices Minimum Energy Efficiency Standards 52% of portfolio already rated EPC ‘B’ or higher 34 > 100% compliant with 2023 MEES regulations requiring all non-domestic rented properties to achieve an EPC 'E’ or above > Net Zero Transition Investment Plan will see 50% of our office por
Slide 36: Reducing upfront embodied carbon
A. Landsec — Appendices 35 Reducing upfront embodied carbon Practical example at Timber Square Timber Square Approach EE | Ni) 4) 1) Retenti > Print building-80% retention of the structure of 1950s printworks resulting in a carbon saving of 234 kgCO,e/m? GIA | | etention (5,860 tonnes CO,e total) 1}
Slide 37: Valuation movements
&. Landsec — Appendices 36 Valuation movements As at 30 September 2024 EPRA topped-up Market value Valuation LFLERV net initial Equivalent 30 September 2024 change change yield yield equivalent yield £m % % % % % bps West end offices 3,083 0.0 13 39 57 5.3 4 City offices 1,251 WW 5.3 43 53 61 7 Reta
Slide 38: Operational performance analysis
A. Landsec — Appendices Operational performance analysis As at 30 September 2024 3 g Annualised Net estimated rental income rental value EPRA occupancy) —_LFL occupancy change“) WAULT() £m £m % ppt Years West end offices 158 188 98.7 (0.9) 64 City offices n 98 96.5 28 74 Retail and other 4) 55 98.1
Slide 39: Rent reviews and lease expiries and breaks
&. Landsec — Appendices 38 Rent reviews and lease expiries and breaks") Excluding developments Outstanding 2024/25 2025/26 2026/27 2027/28 2028/29 2030* Total Rents passing from leases subject to review Gross reversion under lease provisions 5 1 2 2 1 10 (o} 20 2024/25 2025/26 2026/27 2027/28 2028/2
Slide 40: Central London office customers by sector
A. Landsec — Appendices 39 Central London office customers by sector Diversified customer mix with limited exposure to tech and banks Top 10 customers — Percentage of Central London annualised rental income Customers by sector — Percentage of Central London annualised rental income Central governmen
Slide 41: Office-led development returns
&. Landsec — Appendices 40 Office-led development returns Thirty High, SW1 Timber Square, SE1 Status On site On site onze | Description of use Office-89% Office -96% Retail-11% Retail-4% Landsec ownership % 100 100 Size sq ft (000) 299 383 Letting status % - - Market value £m 300 205 Net income/ERV
Slide 42: Future development pipeline
&. Landsec — Appendices 41 Future development pipeline Proposed sq ft Indicative TDC Indicative ERV Gross yield on TDC( Potential Planni Project ‘000 £r % start date stati Office-led Red Lion Court, SE1 250 2025 Consented Liberty of Southwark, SE1 220 2026 Consented Old Broad Street, EC2 290 2025 Co
Slide 43: Future committed capital expenditure on committed pipeline
&. Landsec — Appendices 42 Future committed capital expenditure on committed pipeline > £545m future committed capex on our two £m 5 Timber Square = Thirty High committed developments: Timber Square 300 and Thirty High 250 £236m » Expected ERV of £61m > Delivering an attractive 7.1% gross yield on c
Slide 44: Major retail destinations — Economics
A. Landsec — Appendices 43 Major retail destinations — Economics Attractive value in high and growing income returns Landsec shopping centre values, rental income and retail sales") (index, Mar-17= ear real interest rates m0 — Net rental income — Asset values =Total sales 100 eS SS * 90 Improved aff
Slide 45: Central London office—Investment markets
A. Landsec — Appendices 44 Central London office—Investment markets Values stabilising for best assets as signs of demand pick up Peak to Trough (months), Cycle of Capital Value Decline Central London Offices Central London Office Real Capital Values (Indexed Dec ‘99 = 100) 100 90s Dot Com CFC Bond
Slide 46: Central London office—Demand and supply
A. Landsec — Appendices 45 Central London office- Demand and supply Sustained demand for best-quality stock Central London Active Demand (million sq —cenvl London demand —10yeor quarry overge 2 o “, [\ pA A A VI oe \w van 8 ‘ ‘ os 3 3 3 ry 3 2809 3b 3b Se aa ie save: ca Origin of take up of space ov
Slide 47: Important notice
A. Landsec — Appendices 46 Important notice This presentation may contain certain ‘forward-looking’ statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any
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