British Land Company Plc · LSE:BLND
British Land — FY2023 Earnings Presentation
96 slides from British Land's earnings presentation, May 2023
Slide 1: Full Year Results 31 March 2023
31 MARCH 2023 FULL YEAR R E S U LT S
Slide 2: Introduction
Introduction Simon Carter Peterhouse Expansion, Cambridge CGI FULL YEAR RESULTS | 31 MARCH 2023 PG.2
Slide 3: Full Year 2023 Headlines
FULL YEAR 2023 HEADLINES UNDERLYING PROFIT +7% – Like-for-like net rental growth 6% – Disciplined cost control and additional fee income REBASING OF VALUES FOR HIGHER RATES – Portfolio value down 12.3%, 71 bps yield expansion – Upward yield pressure easing, early signs of yield compression in Retail
Slide 4: Key Themes
KEY THEMES 1. EXECUTING WELL STRATEGICALLY AND OPERATIONALLY 2. FOCUSSED ON MARKETS WITH STRONG FUNDAMENTALS 3. SIGNIFICANT OPPORTUNITIES FOR VALUE CREATION Priestley Centre CGI FULL YEAR RESULTS | 31 MARCH 2023 PG.4
Slide 5: Financial Results
FINANCIAL RESULTS Bhavesh Mistry 155 Bishopsgate FULL YEAR RESULTS | 31 MARCH 2023 PG.5
Slide 6: Strong Rental, Earnings & Dividend Growth, Resilient Balance Sheet
STRONG RENTAL, EARNINGS & DIVIDEND GROWTH, RESILIENT BALANCE SHEET £264M +6% 28.3P / 22.64P Underlying Profit Life-for-like net rental growth Underlying EPS / DPS +7% vs Mar 22 EPRA Cost Ratio: 19.5% +5% / +3% vs Mar 22 [8.5] 588PX 36.0% 6.4X / 8.4X EPRA Net Debt NTAto per EBITDA share Loan to value
Slide 7: 5% Net Rental Income Growth
5% NET RENTAL INCOME GROWTH £m 21 (13) 13 0 446 425 5% 20221 Net divestment Developments CVAs, admins and provisions Like-for-like growth2 2023 for debtors and tenant incentives 1 Prior year comparatives have been restated for a change in accounting policy in respect of rental concessions (see slide
Slide 8: 6% Like-for-Like Net Rental Growth
6% LIKE-FOR-LIKE NET RENTAL GROWTH Campuses Retail Parks Shopping Centres Strong leasing, rent reviews and Occupancy at 99%, Good performance with solid increased Storey occupancy highest in 12 years leasing and improving occupancy +6.5% +6.0% +6.2% +2.5% +2.6% -6.0% FY22 vs FY21 FY23 vs FY22 Occupa
Slide 9: 7% Profit Increase: Rental Growth & Tight Cost Control
7% PROFIT INCREASE: RENTAL GROWTH & TIGHT COST CONTROL Financial year ending 31 March (£m) 2023 20221 Change % Gross rental income 493 493 - Reflects normalisation of NRI margin Property operating expenses (47) (68) (30.9)% post Covid-19 disruption Net rental income 446 425 4.9% NRI margin3 90.5% 86
Slide 10: EPRA NTA Decline Reflects Property Market Yield Expansion
EPRA NTA DECLINE REFLECTS PROPERTY MARKET YIELD EXPANSION (147p) 28p (23p) 730p 588p Mar 221 Valuation performance Underlying Dividend Mar 23 Profit TOTAL ACCOUNTING RETURN -16.3% 1 Prior year comparatives have been restated for a change in accounting policies in respect of rental concessions and te
Slide 11: Capital Allocation Framework in the Current Environment
CAPITAL ALLOCATION FRAMEWORK IN THE CURRENT ENVIRONMENT DEVELOPMENTS ACQUISITIONS Thoughtful approach to new commitments, based on Selective and disciplined capital deployment in line with rent visibility and yield on cost our strategic themes BALANCE SHEET SHAREHOLDER DISTRIBUTIONS Well managed and
Slide 12: Significant Development Profit to Come
SIGNIFICANT DEVELOPMENT PROFIT TO COME APPRAISALS REFLECT CURRENT ENVIRONMENT £1.7BN Development profits to come YIELDS 30% of Net Tangible Assets – Adjusted to reflect higher interest rates: c.+75bps COSTS – Construction cost inflation peaked in FY23, moderating to 3-4% in FY24 and reflected within
Slide 13: Attractive Development Pipeline Across Our Chosen Markets
ATTRACTIVE DEVELOPMENT PIPELINE ACROSS OUR CHOSEN MARKETS LONDON URBAN LOGISTICS CANADA WATER CAMPUSES The Box, Paddington The Founding, Phase 1 3 Sheldon Square 2 Finsbury Avenue Verney Road and Mandela Way, Southwark Printworks Park, Phase 2 Peterhouse, Cambridge FULL YEAR RESULTS | 31 MARCH 2023
Slide 14: Strong Financial Position Managed Through the Cycle
STRONG FINANCIAL POSITION MANAGED THROUGH THE CYCLE WE MONITOR THREE KEY METRICS – Absolute net debt 31 Mar 2023 31 Mar 2022 – Net Debt to EBITDA – Loan to Value (LTV) Net debt1 £3.2bn £3.5bn NET DEBT TO EBITDA – Lower YoY driven by disposals and strong earnings growth Net debt to EBITDA Group2 6.4x
Slide 15: FY23 Financing Activity
FY23 FINANCING ACTIVITY A DIVERSE DEBT PROFILE £3.4bn Drawn Gross Debt GOOD RELATIONSHIPS & ACCESS TO A RANGE OF FINANCE MARKETS JVs Bank Facilities – £1.4bn financing activity on favourable terms, including Loans Drawn £0.3bn margins in line with our in place facilities £0.4bn – £875m completed in
Slide 16: Financial Summary
FINANCIAL SUMMARY 7% UNDERLYING PROFIT GROWTH STRONG LFL RENTAL GROWTH AND COST CONTROL STRONG BALANCE SHEET AND EXCELLENT LIQUIDITY HIGH QUALITY DEVELOPMENT PIPELINE DRIVING FUTURE RETURNS Printworks Park CGI, Canada Water FULL YEAR RESULTS | 31 MARCH 2023 PG.16
Slide 17: Real Estate Review
REAL ESTATE REVIEW Darren Richards Relation Therapeutics, 338 Euston Road FULL YEAR RESULTS | 31 MARCH 2023 PG.17
Slide 18: Yield Expansion Partially Offset by Rental Growth
YIELD EXPANSION PARTIALLY OFFSET BY RENTAL GROWTH VALUATION YIELD ERV VALUATION £M MOVEMENT MOVEMENT MOVEMENT TOTAL 8,898 -12.3% +71 bps 2.8% Campuses 5,650 -13.1% +70 bps 2.6% Standing portfolio 4,351 -12.4% +70 bps 2.6% Developments 1,299 -15.2% - - Retail & London Urban Logistics 3,248 -10.9% +72
Slide 19: Increasing Investment Activity
INCREASING INVESTMENT ACTIVITY AGENT PRIME INVESTMENT YIELDS UPWARD YIELD PRESSURE EASING Prime Yields1 Sub-sector Mar 22 Mar 23 Apr 23 May 23 – We’ve seen significant yield expansion over the year Retail Parks (open A1) 4.75 – 5.25% 5.75 – 6.00% 5.50 – 5.75% 5.50 – 5.75% – MSCI data and agent’s vie
Slide 20: Campuses: Strong Leasing Across Our Best in Class Portfolio
CAMPUSES: STRONG LEASING ACROSS OUR BEST IN CLASS PORTFOLIO OVER 1M SQ FT LEASING ACTIVITY – £68.4m of rents (£45.6m BL share) – 11.0% ahead of ERV1, 18.2% above previous passing rent – 106,000 sq ft under offer, 8.6% ahead of ERV1 CONTINUED DEMAND FOR STOREY – 146,000 sq ft of leasing in the year –
Slide 21: London Offices – A Bifurcated Market
1 JLL – Sustainability and value, Jan 23 2 CBRE LONDON OFFICES – A BIFURCATED MARKET Central London Net Absorption (m sq ft) 6.0 BEST VS THE REST: – BREEAM Certified buildings command a premium1: 4.0 • 12% premium in rents • 24 bps yield premium 2.0 – Net absorption rates for best in class office sp
Slide 22: Net Absorption for Best in Class Space
NET ABSORPTION FOR BEST IN CLASS SPACE DEMAND FOCUSED ON QUALITY City and West End Net Absorption (m sq ft) – Positive absorption across City and West 1.8 End OUR HIGH QUALITY COMMITTED PIPELINE 1.3 – Delivering into supply constrained market – 46% office space pre let 0.8 – Strong interest on remai
Slide 23: Progressing Life Sciences at Regent's Place
PROGRESSING LIFE SCIENCES AT REGENT ’S PLACE TRANSFORMATION AT REGENT’S PLACE – Potential to deliver c.700k sq ft of lab and innovation space, including the Euston Tower: • 120k sq ft planned on existing buildings, of which half is completed or onsite KEY DRIVER OF FUTURE GROWTH – Rental premium net
Slide 24: Another Year of Strong Momentum on Sustainability
ANOTHER YEAR OF STRONG MOMENTUM ON SUSTAINABILITY STANDING PORTFOLIO – 45% of portfolio EPCs A-B (FY22: 36%) • 50% of office EPCs A-B (FY22: 46%) – Heat pumps operational across 5 buildings • 4 more planned for FY24 – Operational carbon intensity down 40% • Energy intensity down 22% vs 2019 DEVELOPM
Slide 25: Retail Leasing – Another Record Breaking Year
RETAIL LEASING – ANOTHER RECORD BREAKING YEAR Retail & London Urban Logistics FY23 leasing volumes (sq ft) 1,000,000 2.4M SQ FT OF RETAIL LEASING ACTIVITY – 18.8% ahead of ERV1 800,000 – 8.8% below previous passing rent A FURTHER 808,000 SQ FT UNDER OFFER 600,000 – 19.5% ahead of ERV1, 9.6% below pr
Slide 26: Retail Parks: Occupiers Preferred Retail Format
RETAIL PARKS: OCCUPIERS PREFERRED RETAIL FORMAT AFFORDABLE FOR OUR OCCUPIERS – Our Retail Parks have OCRs of 9% ATTRACTS A DIVERSE OCCUPIER BASE – Best format for omni channel retail and appeals to value retailers SCALE IS KEY – Able to negotiate deals across multiple scheme with our occupiers – 54%
Slide 27: Highest Retail Park Occupancy in 12 Years
HIGHEST RETAIL PARK OCCUPANCY IN 12 YEARS Glasgow Fort New Mersey, Speke Broughton, Chester New lettings: 70k sq ft New lettings: 34k sq ft New lettings: 15k sq ft Renewals: 97k sq ft Renewals: 64k sq ft Renewals: 9k sq ft 100% let 100% let 100% let The A1, Biggleswade Crown Wharf, Walsall Giltbrook
Slide 28: London Urban Logistics: Delivering to a Supply Constrained Market
LONDON URBAN LOGISTICS: DELIVERING TO A SUPPLY CONSTRAINED MARKET SPECIALISING IN ZONE 1 AND MULTI-STOREY LOGISTICS FOCUSING ON ZONE 1 AND MULTI-STOREY LOGISTICS – Zone 1: nascent market, vacancy is 0.4% Enfield* – Multi-storey: leveraging complex development expertise Wembley* DELIVERING INTO A SUP
Slide 29: London Urban Logistics: Progressing at Pace
LONDON URBAN LOGISTICS: PROGRESSING AT PACE 2.9M SQ FT URBAN LOGISTICS PIPELINE – £1.3bn gross development value – Planning consent achieved for The Box, expect Mandela Way, Southwark The Box, Paddington Heritage House, Enfield Planning status: Submitted Planning status: Consented Planning status: S
Slide 30: Shopping Centres: Good Operational Performance in the Year
SHOPPING CENTRES: GOOD OPERATIONAL PERFORMANCE IN THE YEAR ACTIVE ASSET MANAGEMENT DRIVING PERFORMANCE – 1m sq ft of leasing, 18.5% ahead of ERV – Occupancy improving to 94.1% – Rents approaching sustainable level PREFER FUNDAMENTALS OF RETAIL PARKS – Higher levels of maintenance capex vs Retail Par
Slide 31: Operational Outperformance in Our Key Sectors
OPERATIONAL OUTPERFORMANCE IN OUR KEY SECTORS 3.4M SQ FT OF TOTAL LEASING, 15.1% AHEAD OF ERV CAMPUSES: DELIVERING BEST IN CLASS SPACE PIVOTING INTO LIFE SCIENCES AND INNOVATION RETAIL PARKS: 99% OCCUPANCY, RENTAL GROWTH RETURNING URBAN LOGISTICS: GOOD PROGRESS ON PIPELINE 155 Bishopsgate, Broadgate
Slide 32: Strategy & Outlook
Strategy & Outlook Simon Carter Paper Yard, Canada Water CGI FULL YEAR RESULTS | 31 MARCH 2023 PG.32
Slide 33: Favourable Occupational Fundamentals Across Our Markets
FAVOURABLE OCCUPATIONAL FUNDAMENTALS ACROSS OUR MARKETS DEMAND S U P P LY Focused on prime, sustainable space c.5% of available space is BREEAM 12% rental premium for best space1 Outstanding2 Leasing 11.0% Campuses above ERV Innovation demand concentrated in the Vacancy below 1% in London & ERV +2.6
Slide 34: Aim to Be Leader in All Our Sectors
AIM TO BE LEADER IN ALL OUR SECTORS CURRENT POSITION AMBITION Leverage expertise to consolidate position Leading owner of Campuses in the UK Progress Canada Water development Campuses 1.9m sq ft pipeline of lab space, including Leading UK REIT in life sciences and innovation opportunity at Regent’s
Slide 35: Future Portfolio Activity
FUTURE PORTFOLIO ACTIVITY SOURCE VALUE ADD DEVELOP AND ACTIVELY OPPORTUNITIES MANAGE TARGET TOTAL Campus developments Retail Parks ACCOUNTING RETURNS (including Canada Water) Sites suitable for London Urban OF 8-10% THROUGH THE CYCLE London Urban Logistics Logistics developments Innovation campuses
Slide 36: Targeting Life Sciences and Innovation Occupiers
TARGETING LIFE SCIENCES AND INNOVATION OCCUPIERS INNOVATION OCCUPIERS DATA SCIENCES PHYSICAL SCIENCES LIFE SCIENCES SUSTAINABILITY (c.1.2m sq ft) (c.150k sq ft) (c.75k sq ft) (c.85k sq ft) FULL YEAR RESULTS | 31 MARCH 2023 PG.36
Slide 37: Attractive UK Life Sciences Dynamics
ATTRACTIVE UK LIFE SCIENCES DYNAMICS UK AT LEAST A DECADE BEHIND THE US – Life sciences space per capita is c.3.5x higher in US vs UK1 DEEP AND AFFORDABLE TALENT POOL – Scientist salaries in US are nearly double those in UK2 VENTURE CAPITAL FUNDING TRENDING ABOVE PRE COVID LEVELS – 22% higher vs 202
Slide 38: British Land's Ingredients for Success in Life Sciences
BRITISH LAND’S INGREDIENTS FOR SUCCESS IN LIFE SCIENCES CAMPUS MODEL DEVELOPING A BEST IN CLASS PLATFORM Our proposition is uniquely suited to the clustering and Technical and operational expertise collaboration characteristics of life sciences and Innovation Advisory Council innovation LOCATION SPE
Slide 39: 1.9M Sq Ft Pipeline of Lab Enabled Buildings
1.9M SQ FT PIPELINE OF LAB ENABLED BUILDINGS Scheme Space (000 sq ft) Status REGENT’S PLACE Repurposed office space (committed) 62 Delivered / Onsite c.190,000 SQ FT OF SPACE DELIVERED BY YEAR END Repurposed office space (near term) 63 Expiries / surrenders – At Regent’s Place, Canada Water and Guil
Slide 40: Sustainability Underpins All Our Activity
SUSTAINABILITY UNDERPINS ALL OUR ACTIVITY GREENER SPACES THRIVING PLACES RESPONSIBLE CHOICES 50% less embodied carbon at our Committed to a £25m Social Responsible employment developments Impact Fund to 2030 75% reduction in operational Education / employment initiatives Diversity and inclusion carb
Slide 41: The Box – Sustainability in Action
THE BOX – SUSTAINABILITY IN ACTION LOWER COST, REDUCING DELIVERY TIMES − 240 cargo bikes, 1.6x faster in London traffic1 LOWER CARBON, REDUCING POLLUTION & CONGESTION – Removing 100 large vehicles from Central London – Cargo bikes reduce carbon emissions by up to 90%, saving the equivalent to 3x the
Slide 42: Outlook for Our Markets – Central Case
OUTLOOK FOR OUR MARKETS – CENTRAL CASE 2FA MACRO UNCERTAINTY REMAINS UPWARD YIELD PRESSURE EASING − Early signs of yield compression for Retail Parks RENTAL GROWTH ACROSS OUR CORE MARKETS − Campuses: 2-4%, benefitting as demand gravitates to the best space − Retail Parks: 2-4%, driven by high occupa
Slide 43: Summary
SUMMARY STRONG OPERATIONAL PERFORMANCE FOCUSSED ON MARKETS WITH STRONG FUNDAMENTALS SIGNIFICANT OPPORTUNITIES FOR VALUE CREATION FULL YEAR RESULTS | 31 MARCH 2023 PG.43 Euston Tower CGI
Slide 44: Appendices
APPENDICES
Slide 45: Change in Accounting Policies (1/2)
CHANGE IN ACCOUNTING POLICIES (1/2) Opening balance 31 March 2022 restatement for rental Rental concessions Tenant deposits 31 March 2022 Published concessions restatement restatement Restated £m £m £m £m £m Performance metrics Underlying profit 251 - (4) - 247 EPRA NTA 6,771 30 5 - 6,806 pence penc
Slide 46: Change in Accounting Policies (2/2)
CHANGE IN ACCOUNTING POLICIES (2/2) Opening balance 31 March 2022 restatement for rental Rental concessions Tenant deposits 31 March 2022 Published concessions restatement restatement Restated £m £m £m £m £m IFRS Consolidated balance sheet (extract) Investments in joint ventures 2,511 7 3 - 2,521 De
Slide 47: FY24 Income Statement Guidance
FY24 INCOME STATEMENT GUIDANCE FY24 Guidance FY24 Range FY23 £m £m • Absent any significant tenant administrations, expecting low single digit like-for-like GRI growth in FY24 Gross Rental Income • Impact of completed FY23 sales & purchases of £(2)m 480 – 500 493 • Forecast PC of Norton Folgate offs
Slide 48: Estimated Future Development Spend and Capitalised Interest
ESTIMATED FUTURE DEVELOPMENT SPEND AND CAPITALISED INTEREST As at 31 March 2023 PC Cost to Come £m Calendar (excluding notional interest) – 6 months breakdown Year Sep-23 Mar-24 Sep-24 Mar-25 Sep-25 Mar-26 Sep-26 Mar-27 Total Norton Folgate Q4 2023 38 49 4 2 - - - - 93 The Priestley Centre Q4 2023 6
Slide 49: Committed Developments
COMMITTED DEVELOPMENTS Sector BL Sq ft PC Current Cost to ERV Let & Forecast Rebased As at Share (100%) Calendar Value Come Under IRR IRR 31 March 2023 Year Offer % ‘000 £m £m1 £m2 £m4 %5 %6 The Priestley Centre Life Science 100 83 Q4 2023 24 15 3.2 2.0 14 21 Norton Folgate Office 100 335 Q4 2023 31
Slide 50: Near Term Development Pipeline
NEAR TERM DEVELOPMENT PIPELINE Sector BL Sq ft Earliest Current Cost to ERV Planning As at Share (100%) Start on Value Come Status 31 March 2023 Site % ‘000 Calendar year £m £m1 £m2 Near Term Pipeline 2 Finsbury Avenue Office 50 747 Q2 2023 72 410 35.4 Consented Peterhouse Extension, Life Science 10
Slide 51: Medium Term Development Pipeline
MEDIUM TERM DEVELOPMENT PIPELINE As at 31 March 2023 Sector BL Sq ft Planning status Share (100%) % ‘000 Medium Term Pipeline 1 Appold Street Office 50 404 Consented International House, Ealing Office 100 165 Consented Euston Tower Office 100 571 Pre-submission Finsbury Square London Urban Logistics
Slide 52: Portfolio Net Yields
PORTFOLIO NET YIELDS 1,2 As at 31 March 2023 EPRA EPRA topped up net Overall topped up Net Net equivalent yield Net reversionary ERV net initial initial net initial equivalent yield movement yield Growth 5 yield yield yield % bps % % 3 4 % % % West End 3.3 4.4 4.4 5.0 72 5.4 4.0 City 4.0 4.8 4.8 5.0
Slide 53: Annualised Rent & Estimated Rental Value (ERV)
ANNUALISED RENT & ESTIMATED RENTAL VALUE (ERV) As at 31 March 2023 Annualised Rents Average Rent ERV (Valuation Basis) £m1 £m (£psf) Group Joint ventures Total Total Contracted2 ERV West End3 67 15 82 127 67.3 74.5 City3 8 80 88 120 56.1 61.8 Other Campuses 6 - 6 7 27.0 34.5 Residential4 - - - - - -
Slide 54: Illustrative Future Income Profile Breakdown (Cash Basis)
ILLUSTRATIVE FUTURE INCOME PROFILE BREAKDOWN (CASH BASIS) For the year to 31 March 2024 2025 2026 2027 2028 Total As at 31 March 2023 £m £m £m £m £m £m Current Passing Rent 443 Contracted uplifts4 34 26 1 - 2 63 Pre-lets of Committed Developments1 12 - 14 - - 25 Contracted rent 531 Letting of comple
Slide 55: Total Property Return (as Calculated by MSCI)
TOTAL PROPERTY RETURN (AS CALCULATED BY MSCI) 12 months to 31 March 2023 Offices Retail Total % British Land2 MSCI British Land2 MSCI British Land MSCI Capital Return (14.2) (15.3) (11.1) (12.7) (13.1) (16.1) - ERV Growth 2.6 1.6 3.0 0.4 2.8 3.5 - Yield Movement1 70 bps 104 bps 72 bps 67 bps 71 bps
Slide 56: Portfolio Valuation by Sector
PORTFOLIO VALUATION BY SECTOR At 31 March 2023 Group Joint ventures Total Change%1 £m £m £m H1 H2 FY West End 2,208 330 2,538 (2.5) (11.2) (11.3) City 494 2,072 2,566 (3.6) (11.8) (14.8) Canada Water & other Campuses 171 285 456 (1.6) (16.2) (17.4) Residential2 90 - 90 13.2 (11.2) 0.8 Campuses 2,963
Slide 57: Portfolio Weighting
PORTFOLIO WEIGHTING As at 31 March 2023 2022 2023 2023 % % £m West End 34.5 28.5 2,538 City 27.3 28.9 2,566 Canada Water & other Campuses 4.1 5.1 456 Residential1 0.7 1.0 90 Campuses 66.6 63.5 5,650 Retail Parks 20.2 22.2 1,976 Shopping Centre 7.6 8.4 746 London Urban Logistics 3.0 3.0 263 Other Ret
Slide 58: Top Occupiers
TOP 20 OCCUPIERS R E TA I L & L O N D O N U R B A N L O G I S T I C S CAMPUSES OCCUPIER SPLIT BY INDUSTRY As at % of Retail & Urban As at (% OF RENT) % of Campus rent 31 March 2023 Logistics rent 31 March 2023 Next 5.1 Meta 20.3 Walgreens (Boots) 4.3 dentsu 5.5 Grocery & Convenience Other 6% M&S 3.7
Slide 59: Valuation Movement – Campuses
VALUATION MOVEMENT – CAMPUSES Financial Year to 31 March 2023 Valuation Change Change Yield movement ERV movement £m £m %1 Bps2 %2 West End 2,538 (412) (11.3) 72 4.0 City 2,566 (446) (14.8) 69 1.3 Central London offices 5,104 (858) (12.9) 71 2.7 Canada Water & other Campuses 456 (96) (17.4) 43 (0.2)
Slide 60: Valuation Movement – Retail & London Urban Logistics
VALUATION MOVEMENT – RETAIL & LONDON URBAN LOGISTICS Financial Year to 31 March 2023 Valuation Change Change Yield movement ERV movement £m £m %1 Bps2 %2 Retail Parks 1,976 (227) (10.2) 71 2.8 Shopping Centre 746 (62) (7.6) 39 1.2 London Urban Logistics 263 (84) (24.2) 187 29.4 Other Retail 263 (28)
Slide 61: Lease Length and Occupancy
LEASE LENGTH AND OCCUPANCY As at 31 March 2023 Average Lease Length (yrs) Occupancy Rate (%) To Expiry To Break EPRA Occupancy Occupancy1,2,3 West End 8.9 8.3 91.9 96.8 City 7.1 6.1 92.4 95.2 Other Campuses 6.9 6.0 100.0 100.0 Residential4 13.2 13.2 100.0 100.0 Campuses 8.0 7.2 92.4 96.2 Retail Park
Slide 62: Rent Subject to Open Market Rent Review
RENT SUBJECT TO OPEN MARKET RENT REVIEW For the year to 31 March 2024 2025 2026 2027 2028 2024-26 2024-28 As at 31 March 2023 £m £m £m £m £m £m £m West End 5 15 9 22 1 29 52 City 15 8 27 5 1 50 56 Other Campuses - 1 - - - 1 1 Residential1 - - - - - - - Campuses 20 24 36 27 2 80 109 Retail Parks 10 1
Slide 63: Rent Subject to Lease Break or Expiry
RENT SUBJECT TO LEASE BREAK OR EXPIRY For the year to 31 March 2024 2025 2026 2027 2028 2024-26 2024-28 As at 31 March 2023 £m £m £m £m £m £m £m West End 5 7 14 5 6 26 37 City 13 11 13 3 3 37 43 Other Campuses 3 - - 1 - 3 4 Residential1 - - - - - - - Campuses 21 18 27 9 9 66 84 Retail Parks 30 20 25
Slide 64: Contracted Rental Increases (Cash Flow Basis)
CONTRACTED RENTAL INCREASES (CASH FLOW BASIS) For the year to 31 March 2024 2025 2026 2027 2028 2024-26 2024-28 As at 31 March 2023 £m £m £m £m £m £m £m Expiry of rent free periods 26 26 - - 1 52 53 Fixed uplifts (EPRA basis) 1 - - - - 1 1 Fixed & minimum uplifts 1 - 1 - 1 2 3 Total 28 26 1 - 2 55 5
Slide 65: Our 2030 Sustainability Strategy
OUR 2030 SUSTAINABILITY STRATEGY GREENER SPACES: A NET ZERO THRIVING PLACES: CREATING A CARBON PORTFOLIO BY 2030 LONG-LASTING POSITIVE IMPACT 50 % LOWER – £25m Social Impact Fund by 2030 with at least £15m embodied carbon intensity cash contributions at our offices developments to 500kg CO2e per s q
Slide 66: Sustainability Metrics
SUSTAINABILITY METRICS DEVELOPMENTS – NET ZERO CARBON OPERATIONAL – EPC RATINGS Net Zero Carbon – Completed and Committed developments % of total ERV % of total Sq Ft Net Zero Developments Embodied emissions offset Embodied % of total embodied emissions carbon intensity EPC Offices Retail Portfolio
Slide 67: Sustainability Indices Performance
SUSTAINABILITY INDICES PERFORMANCE FY 2023 performance Other benchmarks and awards Global Real Estate Carbon Disclosure Project EPRA Sustainability Sustainability Benchmark1 Reporting Awards 2022: B 2022: 5-star (Development) 2022: Gold for 11th year 2021: A- 4-star (Standing Investments) Social Mob
Slide 68: Purchases
PURCHASES Purchases since 1 April 2022 Sector Price Price Annualised (100%) (BL Share) Net Rents £m £m £m1 Completed DFS, Cambridge Retail Parks 7 7 1 Solartron Retail Park Retail Parks 35 35 3 Capitol Retail Park Retail Parks 51 51 5 Westwood Retail Park, Thanet Retail Parks 55 55 4 Mandela Way, So
Slide 69: Sales
SALES Sales since 1 April 2022 Sector Price Price Annualised (100%) (BL Share) Net Rent £m £m £m1 Completed Debenhams, Chester Other Retail 1 1 - Deepdale Shopping Park, Preston Retail Park 61 31 2 Debenhams, Cardiff Other Retail 3 3 - Paddington Central (75% sale) Campuses 939 694 27 Exchanged 126-
Slide 70: Capital Activity
CAPITAL ACTIVITY Since 1 April 2022 Campuses Retail & London Urban Logistics Total £m £m £m Purchases 33 170 203 Sales (711) (35) (746) Development Spend 255 7 262 Capital Spend 45 41 86 Net Investment (378) 183 (195) Gross Capital Activity 1,044 253 1,297 On a proportionally consolidated basis incl
Slide 71: Capital Activity Since April 2019
£7.1bn Gross investment activity CAPITAL ACTIVITY since April 2019 Net Spend1 £m £(753)m £121m £(964)m £507m £(195)m 1,000 600 200 (200) (600) (1,000) (1,400) FY19 FY20 FY21 FY22 FY23 Sales Capital Investment Purchases Net Spend On a proportionally consolidated basis including the Group’s share of j
Slide 72: Underlying Profit Bridge
UNDERLYING PROFIT BRIDGE £m 21 (5) (11) 12 - 264 247 248 2022 Net divestment Developments Excl. impact of capital CVAs, admins & Like-for-like growth Net financing costs 2023 1 activity provisions for debtors and fee income and tenant incentives 1 Prior year comparatives have been restated for a cha
Slide 73: Underlying Earnings Per Share
UNDERLYING EARNINGS PER SHARE pence 2.2p (0.5p) (0.5p) 1.3p - (1.2p) 28.3 28.3 27.0 27.1 1 2022 Net divestment Development Excl. impact of CVAs, admins & Like-for-like income Net financing costs Underlying tax 2023 capital activity provisions for growth and fee income debtors and tenant incentives 1
Slide 74: Operating Cash Flow Bridge
OPERATING CASH FLOW BRIDGE £m 47 (200) 73 (71) - 391 240 213 Cash tenant Distributions from Fees and other Operating and Net finance costs Corporation Net cash inflow FY23 income JVs and Funds income admin expenses tax from operating Dividend activities FY23 dividend equates to dividend paid in Janu
Slide 75: FY23 and March 2023 Rent Collection
FY23 AND MARCH 2023 RENT COLLECTION Rent due between 25 March 2022 and 24 March 2023 Rent due between 25 March 2023 and 9 May 2023 As at 9th May Offices Retail Total As at 9th May Offices Retail Total Received 100% 98% 99% Received 99% 91% 95% Outstanding 0% 2% 1% Outstanding 1% 9% 5% 100% 100% 100%
Slide 76: Gross Rental Income
GROSS RENTAL INCOME 1 Accounting Basis £m 12 months to 31 March 2023 Annualised as at 31 March 2023 Group Joint Ventures Total Group Joint ventures Total West End 89 23 112 85 15 100 City 15 90 105 15 93 108 Other Campuses 11 3 14 9 3 12 Residential2 - - - - - - Campuses 115 116 231 109 111 220 Reta
Slide 77: Administrative Expenses
ADMINISTRATIVE EXPENSES Financial Year to 31 March 2023 2022 £m £m Personnel costs 60 56 Share scheme costs 7 6 Other administrative expenses 32 35 Total 99 97 Capitalised costs (10) (8) Total administrative expenses 89 89 On a proportionally consolidated basis including the Group's share of joint v
Slide 78: Operating Costs Metric
OPERATING COSTS METRIC Financial Year to 31 March 2023 20221 £m £m Property operating expenses 47 68 Administrative expenses 89 89 Net fees and other income (18) (13) Ground rent costs and operating expenses de facto included in rents (28) (25) EPRA Costs (including direct vacancy costs) 90 119 Gros
Slide 79: Reconciliation of Underlying Profit
RECONCILIATION OF UNDERLYING PROFIT Financial Year to 31 March 2023 20221 £m £m IFRS (loss) / profit after tax attributable to shareholders (1,038) 963 Net valuation loss / (gain) 1,365 (642) Loss / (profit) on disposal of investment and trading properties and revaluation of investments 30 (45) Capi
Slide 80: Number of Shares
NUMBER OF SHARES As at 31 March 2023 31 March 2022 (m) (m) IFRS Basic Weighted average1 927 927 IFRS Diluted Weighted average2 927 930 Underlying/EPRA diluted Weighted average3 930 930 Period end4 933 932 1 For use in IFRS basic earnings per share. 2 For use in IFRS diluted earnings per share. A los
Slide 81: EPRA Balance Sheet
EPRA BALANCE SHEET Group Joint ventures 31 March 2023 31 March 20221 Total properties (£m)2 5,591 3,316 8,907 10,476 EPRA Net Debt (£m) (2,090) (1,037) (3,127) (3,397) Other net liabilities (£m) (203) (90) (293) (273) EPRA Net Tangible Assets (£m) 3,298 2,189 5,487 6,806 Loan to value (LTV)3 36.0% 3
Slide 82: EPRA Net Asset Metrics
EPRA NET ASSET METRICS 31 March 2023 31 March 2022 £m EPRA NTA1 EPRA NDV2 EPRA NRV3 EPRA NTA1 EPRA NDV2 EPRA NRV3 IFRS Net Assets4 5,525 5,525 5,525 6,768 6,768 6,768 Mark to market on derivatives and related debt (44) - (44) 46 - 46 adjustments Adjust to fully diluted on exercise of share options 1
Slide 83: Gross and Net Debt Reconciliation
GROSS AND NET DEBT RECONCILIATION As at 31 March 2023 Group Joint ventures Less non-controlling interests Total £m £m £m £m Gross Debt (principal) (2,250) (1,198) - (3,448) IFRS adjustments: Issue costs and premia 9 6 - 15 Fair value hedge adjustments (26) - - (26) IFRS gross debt (2,267) (1,192) -
Slide 84: Debt Metrics
DEBT METRICS Proportionally Consolidated 31 March 2023 31 March 2022 Loan to value (LTV) 36.0% 32.9% Net Debt to EBITDA 8.4x 9.7x Weighted average interest rate 3.5% 2.9% Interest cover 3.4x 3.5x Weighted average debt maturity 5.9 yrs 6.9 yrs Group 31 March 2023 31 March 2022 Loan to value (LTV) 27.
Slide 85: Loan to Value (LTV)
LOAN TO VALUE (LTV) £m As at Valuation Acquisitions Capital spend Disposals Operating Dividend Other As at 31 March 20221 movement cashflow 31 March 2023 Total properties 10,467 (1,365) 158 351 (745) - - 32 8,898 Other investments 46 - 15 - - - - - 61 LTV assets 10,513 (1,365) 173 351 (745) - - 32 8
Slide 86: Net Debt to EBITDA – Proportionally Consolidated
NET DEBT TO EBITDA – PROPORTIONALLY CONSOLIDATED 31 March 2023 31 March 2022 £m £m Net Debt Principal amount of gross debt 3,448 3,648 Less: Cash and short term deposits1 (228) (191) Plus: Cash attributable to non-controlling interests 1 1 Net debt for use in Net Debt to EBITDA proportionally consol
Slide 87: Net Debt to EBITDA – Group
NET DEBT TO EBITDA – GROUP 31 March 2023 31 March 2022 £m £m Net Debt Principal amount of gross debt 2,250 2,562 Less: Non-recourse borrowings (298) (347) 2 Less: Cash and short term deposits (99) (74) Plus: Cash attributable to non-recourse companies 37 29 Net Debt for use in Net Debt to EBITDA Gro
Slide 88: Debt Maturity
DEBT MATURITY £m Facilities Undrawn (Unsecured) 1200 Facilities Drawn (Unsecured) US Private Placements (Unsecured) 1000 Sterling Bond (Unsecured) Debentures (Secured) 800 Bank Loans (Secured) JVs Bank Loans Undrawn (Secured) 600 JVs Bank Loans Drawn (Secured) JVs Securitisation (Secured) 400 200 0
Slide 89: Debt Financing – Diverse Profile
DEBT FINANCING – DIVERSE PROFILE £5.3BN GROSS DEBT AND FACILITIES (£3.4BN DRAWN)¹ STRONG CREDIT METRICS 31 MARCH 2023 – £1.8bn undrawn facilities, from £2.1bn total facilities £0.1bn – No requirement to refinance until early 2026 £0.4bn – Interest rate on our debt 97% hedged for year to March 2024,
Slide 90: De-risked Development Pipeline Focused on Campuses
DE-RISKED DEVELOPMENT PIPELINE FOCUSED ON CAMPUSES Norton Folgate 3 Sheldon Square Canada Water, Phase 1 Mandela Way 1 Appold Peterhouse 5 Kingdom Street Euston Tower 335,000 sq ft 140,000 sq ft Plots A1, A2 and K1 578,000 sq ft 144,000 sq ft 404,000 sq ft 96,000 sq ft 332,000 sq ft 571,000 sq ft Co
Slide 91: De-risked Developments Delivering into a Supply Constrained Market
DE-RISKED DEVELOPMENTS DELIVERING INTO A SUPPLY CONSTRAINED MARKET Central London Office Development pipeline over 100k sq ft, Q1 23 1.8M SQ FT COMMITTED – 94% committed costs fixed Sq ft m Norton Folgate 1 Broadgate 6.0 – 46% office space pre let – Strong rental growth for new best- 5.0 in-class sp
Slide 92: Major Retail & London Urban Logistics Property Holdings
MAJOR RETAIL & LONDON URBAN LOGISTICS PROPERTY HOLDINGS As at 31 March 2023 Sector BL Share Sq ft Rent (100%) Occupancy Lease Length yrs3,4 % 000’s5 £m pa1,4 Rate %2,4 1 Teesside, Stockton Retail Park 100 569 15 99.1 2.2 2 Fort Kinnaird, Edinburgh Retail Park 50 560 16 99.0 4.4 3 Glasgow Fort, Glasg
Slide 93: Broadgate Campus
BROADGATE CAMPUS FULL YEAR RESULTS | 31 MARCH 2023 PG.93
Slide 94: Paddington Central Campus
PADDINGTON CENTRAL CAMPUS 9 9 FULL YEAR RESULTS | 31 MARCH 2023 PG.94
Slide 95: Regent's Place Campus
REGENT ’S PLACE CAMPUS FULL YEAR RESULTS | 31 MARCH 2023 PG.95
Slide 96: Disclaimer
DISCLAIMER The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the year ended 31 March 2023. For the purpose of this document, references to "presentation" shall be deemed to include this document, the oral briefing provided by Britis