Derwent London Plc · LSE:DLN
Derwent London — H1 2012 Earnings Presentation
84 slides from Derwent London's earnings presentation, Aug 22, 2012
Slide 1: Derwent London plc Interim results 2012
Derwent London plc Interim results 2012
Slide 2: Contents
Contents Presenters: Contents: Page John Burns Overview 2 Market summary 4 Damian Wisniewski Portfolio activity 8 Results and financial review 17 Nigel George Valuation and portfolio analysis 29 Simon Silver Projects 37 Outlook 59 Paul Williams Appendices 61 Disclaimer 83 David Silverman Presentatio
Slide 3: Overview
Overview John Burns 2
Slide 4: Overview
Overview ●● Central London market remains firm ●● Strong letting activity year to date ○○ Tenants, especially TMT, like our brand of mid-market space ●● Major asset management initiatives ●● Pushing forward development projects ●● Financial position remains robust 3
Slide 5: Market summary
Market summary 4
Slide 6: West End office supply
West End office supply H1 2012 Outlook West End development pipeline 2.5 12.5 Vacancy rate Completed Under construction or proposed Vacancy rate 2.0 10.0 ●● Low supply of West End offices Floor area (million sq ft) ○○ Vacancy rate of 4.2% Vacancy rate (%) ○○ 10-year average of 5.5% 1.5 7.5 ○○ 2012 c
Slide 7: West End office demand
West End office demand H1 2012 Outlook H1 2012 Outlook West End take-up Rental 6 Take-up values 5 ●● Take-up of 1.7m sq ft in H1 2012 ○○ 16% below 10-year average Annual average Take-up (million sq ft) 4 ○○ Few large deals with the exception of our 1 Page Street pre-let ○○ Business services and TMT
Slide 8: Central London office investment market
Central London office investment market H1 2012 Outlook Yields Central London office investment 18 Value of investment transactions (£bn) 16 ●● £7.2bn of investment transactions in H1 2012 14 ○○ 37% above 10-year average and 38% above H1 2011 12 ○○ Greater than annual total in 2009 and same 10 Annua
Slide 9: Portfolio activity
Portfolio activity 8
Slide 10: Lettings 2012
Lettings 2012 ●● 28 lettings totalling 229,100 sq ft at £8.9m pa in H1 2012 ○○ Previous income of £0.8m pa at Dec 2011 ○○ £8.1m pa (91%) were open market lettings ◦◦ £5.3m pa pre-let to Burberry at 1 Page Street ○○ £0.8m pa (9%) of short-term lettings ●● Letting performance ○○ Open market lettings 3
Slide 11: Lettings 2012
Lettings 2012 ●● Strong occupier demand at mid-market rents Holborn Fitzrovia Fitzrovia Fitzrovia £36*psf g £39*psf g £50*psf g £50*psf g £38.00psf +6% £47.50psf +22% £52.50psf +5% £57.50psf +15% St Cross Street EC1 Middlesex House W1 1 & 2 Stephen Street W1 Charlotte Building W1 Tenant: Comscore Te
Slide 12: Lettings 2012
Lettings 2012 Islington / Camden Clerkenwell £25*psf g £32.50*psf g ●● Outlook – continued activity ahead of ERVs £30.00psf +20% £37.50psf +15% ●● Active demand in our villages 35 Kentish Town Road NW1 Morelands Buildings EC1 ○○ c.4.0m sq ft of requirements1 ○○ 60% relates to TMT sector ○○ TMT targe
Slide 13: Securing rental growth - adding value: Oliver's Yard EC2
Securing rental growth - adding value 1 Oliver’s Yard EC2 ●● 185,000 sq ft of multi-let offices ●● ERV Dec 2011 - £28 to £30psf ●● Lease regears on 59% of the building ○○ H1 - Sage Publications - 40,300 sq ft ◦◦ Term extended from 2 to 7 years ◦◦ Fixed annual increases - £1.0m pa (£25 psf) rising to
Slide 14: Securing rental growth - adding value: Fitzroy Street W1
Securing rental growth - adding value 8 Fitzroy Street W1 ●● 148,000 sq ft ●● Let to Arup until 2033 ●● Rent £6.2m pa (£45 psf on typical floor) ●● Before ○○ Five-yearly upward only rent reviews ●● After ○○ Annual stepped increases to £8.4m pa (£60 psf) by 2021 ○○ Upward only rent review in 2021 ○○
Slide 15: Acquisitions & disposals
Acquisitions & disposals H1 2012 completions H2 2012 completions ●● Francis House SW1 – acquisition ●● Riverwalk House SW1 – disposal ○○ Freehold offices – £29.1m 1 ○○ £77.3m1 including Vauxhall Bridge Road SW1 ○○ Adjacent to existing ownerships ○○ Income – Riverwalk vacant, Vauxhall Bridge Road £0.
Slide 16: Francis House SW1 - acquisition
Francis House SW1 - acquisition ●● £29.1m before costs ●● 5.1% net initial yield ●● 57,000 sq ft freehold Guiding ●● Let to Channel Four Television c.£65 psf £31 psf expiring 2020 - £1.56m pa rising to £1.66m pa in 2015 ●● Low office rent – £37 psf T EE Guiding STR c.£65 psf ●● 1.2 acre holding RIA
Slide 17: Riverwalk House SW1 - disposal
Riverwalk House SW1 - disposal ●● Purchased in 2004 as part of a portfolio ○○ Leasehold, expiry 2063 ○○ 75,000 sq ft of tired government offices ○○ 7.5% net initial yield ●● Freehold acquired in 2006 in a property swap ●● Island site ○○ Residential always an alternative use ○○ Prime residential rive
Slide 18: Results and financial review
Results and financial review Damian Wisniewski 17
Slide 19: Headline numbers
Headline numbers Jun 2012 Dec 2011 Jun 2011 Total portfolio at fair value £2,728.4m £2,646.5m £2,600.2m EPRA net asset value per share 1 1,770p 1,701p 1,621p Gross property income £62.3m £125.5m £62.5m EPRA profit before tax 2 £26.5m £52.3m £26.6m EPRA earnings per share 25.06p 51.59p 25.79p Profit
Slide 20: Group balance sheet
Group balance sheet ●● Property portfolio Jun 2012 Dec 2011 Jun 2011 £m £m £m Portfolio carrying value Investment property 2,565.9 2,444.9 2,496.5 Owner occupied property 17.3 17.1 16.4 Non-current assets held for sale 92.6 137.5 45.4 Accrued income / leasehold liabilities 52.6 47.0 41.9 Total portf
Slide 21: Group balance sheet
Group balance sheet ●● Shareholders’ funds up by 4.6% ○○ To £1,739m from £1,663m ●● Net debt marginally increased ○○ To £870.2m from £864.5m Debt, net assets and gearing 1,800 100 ●● LTV and balance sheet gearing ratios 1,739 1,600 1,663 ○○ Reduced again in the period due 1,611 mainly to property va
Slide 22: Group income statement
Group income statement Half year ended Half year ended Jun 2012 Jun 2011 £m £m Gross property income 62.3 62.5 Other income 0.9 1.0 Property outgoings (5.2) (7.1) Property outgoings Rates credits 0.1 (5.1) 1.4 (5.7) Net property income 58.1 57.8 Admin expenses (11.6) (11.0) Total administrative expe
Slide 23: Group income statement - property income
Group income statement - property income H1 2012 H1 2011 Movement £m £m £m Rental income 57.4 58.9 (1.5) Surrender premiums received1 - 0.4 (0.4) SIC15 lease incentives 4.9 3.2 1.7 Gross property income 62.3 62.5 (0.2) H1 2012 Includes Network Building £0.6m £m Property acquisitions 0.8 Includes Cov
Slide 24: Property income
Property income SIC 15 adjustments for H1 2012 65 1.7 2.1 0.4 2.8 62.3 60 Rental income (£m) 2.9 57.4 55 SIC 15 impact £4.9m 50 Contracted passing Rent free Half rent Stepped rent Amortis- ation Write- offs Gross property EPRA like-for-like rental income1 rent income Rental income Gross Net Compared
Slide 25: Underlying and EPRA profit before tax
Underlying and EPRA profit before tax Gross Other Property Admin Finance Finance Share of Underlying Rates Forex on EPRA property income expenditure expenses income costs joint ventures’ profit credits intercompany profit income / ground results before tax 1 loan before tax rent (0.2) (0.1) 1.9 (0.6
Slide 26: Cashflow
Cashflow ●● Net cashflow movement in investment property portfolio Grosvenor Place1 Other H1 2012 H1 2011 £m £m £m £m Acquisitions (8.0) (29.1) (37.1) (91.3) Capital expenditure2 - (29.0) (29.0) (16.5) (8.0) (58.1) (66.1) (107.8) Disposals 67.0 (0.2) 66.8 79.0 59.0 (58.3) 0.7 (28.8) ●● Forecast capi
Slide 27: Debt facilities and gearing
Debt facilities and gearing Aug 2012 1 Jun 2012 Dec 2011 Net debt £870.2m £864.5m Gearing LTV ratio 31.4% 32.0% Balance sheet 48.5% 50.4% Interest cover ratio 356% 307% Interest cover ratio – excluding capitalised interest 316% 291% Total facilities £1,203m £1,278m £1,335m Unutilised committed facil
Slide 28: Debt facilities
Debt facilities Maturity profile of loan facilities1 - as at 30 Jun 2012 Proforma after Aug 2012 refinancing1 0 100 200 300 0 400 100500 200 0 300 100400 200500 300 0 400 100500 200 300 400 500 2012 £m 2012 £m 2012 £m 2012 £m 2013 95 55 2013 95 55 2013 2013 2014 119 6 2014 119 6 2014 125 2014 125 20
Slide 29: Liability risk management
Liability risk management Jun 2012 Dec 2011 Proportion of drawn facilities at fixed rates or hedged 90% 98% Weighted average length of swaps 6.0 years 5.0 years Spot weighted average cost of drawn facilities 1 4.46% 4.65% Spot weighted average cost of drawn facilities 2 4.72% 4.91% Hedging profile M
Slide 30: Valuation and portfolio analysis
Valuation and portfolio analysis Nigel George 29
Slide 31: Valuation
Valuation ●● Good capital growth in the first half ○○ Underlying 3.3% (H2 2011: 2.9%) ●● On-site projects valued at £325m ○○ 5 developments1 £137m - increased 9.7% ○○ 2 phased refurbishments2 £188m - increased 3.6% ○○ Substantial surpluses to come H1 2012 Portfolio valuation valuation movement £m %
Slide 32: Valuation
Valuation ●● London’s continued strength ●● Our portfolio outperformed against benchmarks ●● Total H1 2012 property return 5.2% Valuation performance ○○ IPD Central London Offices 1 4.1% 20 ○○ IPD All UK Property 1 1.2% 15 15.7 16.5 10 Valuation movement (%) 8.3 7.6 5 7.3 1.7 1.8 3.3 0 -3.3 -3.8 -5.
Slide 33: Yields and income
Yields and income ●● EPRA yields ○○ Net initial 4.5% (Dec 2011: 4.4%) ○○ ‘Topped-up’ net initial 5.1% (Dec 2011: 5.2%) True equivalent yield movement 7.5 ●● True equivalent yield 5.6% ○○ Tightened by 3bp in H1 2012 15bp ○○ Comfortable levels 7.0 True equivalent yield (%) 83bp Yield 23 basis points 9
Slide 34: Rental value
Rental value ●● H1 2012 rental value growth ○○ Underlying 2.8% (H2 2011: 2.1%) ○○ In line with our expectations ●● Steady growth since 2010 Rental value growth 10 8 Half-yearly rental value growth (%) 8.1 6 4 4.6 4.1 2 2.6 2.8 2.8 2.1 0 1.3 -2 -2.9 -4 -4.6 -6 -8 -10 -11.4 -12 -14 H1 07 H2 07 H1 08 H
Slide 35: Vacancy rates
Vacancy rates ●● EPRA vacancy rate1 by rental value 1.1% at June 2012 ○○ Decreased from 1.3% at Dec 2011 ○○ Available space only 47,000 sq ft ◦◦ 37% let since year end ●● Current on-site projects of Vacancy rates 550,000 sq ft 8 ○○ Rental value £23.9m pa net ○○ 2012 completions would take vacancy ra
Slide 36: Lease expiries and breaks
Lease expiries and breaks ●● Excellent tenant retention in the first half ●● H1 2012 expiries/breaks ○○ Exposure of £7.7m pa equating to 6.7% of rental income ○○ £1.2m pa related to identified projects Lease expiry and break analysis1 100 ◦◦ Mainly Chancery Lane and Turnmill 7 5 16 16 11 4 ○○ Of £6.
Slide 37: Low average rents
Low average rents ●● Central London offices represents 84% of income ●● Rents passing on a ‘topped-up’ basis ○○ < £30 psf 20% ○○ £30-£40 psf 31% Central London office rent profile ○○ £40-£50 psf 40% 35 ○○ >£50 psf 9% Dec-11 Jun-12 34.74 32.66 30 31.10 31.50 25 25.79 £ psf 25.01 20 15 10 Average Aver
Slide 38: Projects
Projects Simon Silver Paul Williams David Silverman 37
Slide 39: Projects
Projects ●● Planning wins and acceleration of our development programme ○○ 4 planning consents granted 600,000 sq ft ○○ 2 planning applications submitted 56,000 sq ft ○○ 7 projects on-site (5 at Dec 11) ◦◦ 5 developments 437,000 sq ft ◦◦ 2 phased refurbishments 113,000 sq ft ●● Final stages of desig
Slide 40: Planning update - Planning consents 0.6m sq ft
Planning update • Planning consents 0.6m sq ft 1 Oxford Street W1 1 Page Street SW1 Riverwalk House SW1 Bishop’s Bridge Road W2 Pre-let Sold Area: 275,000 sq ft Area: 127,000 sq ft Area: 148,000 sq ft Area: 21,400 sq ft Scheme: Offices/ retail Scheme: Offices Scheme: Residential Scheme: Residential
Slide 41: Planning update - Current planning submissions 56,000 sq ft
Planning update • Current planning submissions 56,000 sq ft Tottenham Court Rd retail W1 73 Charlotte Street W1 ●● Premier Crossrail hub ●● Fitzrovia investment ●● Scheme ●● Scheme ○○ Retail extension ○○ 11 residential units ○○ 70% area increase ○○ 1,900 sq ft offices ●● Current rents low ○○ c.£100
Slide 42: On-site developments
On-site developments Area 437,000 sq ft Pre-let 29% ERV (net)3 c.£18.4m pa Valuation1 £137m Capex2 £108m End value c.£325m Page Street SW1 Pentonville Rd N1 Buckley Building EC1 Turnmill EC1 Chancery Lane WC2 58% Pre-let under offer Area: 127,000 sq ft Area: 55,000 sq ft Area: 85,000 sq ft Area: 70,
Slide 43: 4 & 10 Pentonville Road N1
4 & 10 Pentonville Road N1 ●●New external facade ●●55,000 sq ft - over 20% increase ●●Completion Q3 2012 ●●58% under offer 42
Slide 44: Buckley Building EC1
Buckley Building EC1 ●●Creating spaces ●●85,000 sq ft ●●Completion Q4 2012 ●●£2.5m pa rent until March 2015 43
Slide 45: Turnmill EC1 Chancery Lane WC2
Turnmill EC1 Chancery Lane WC2 ●●70,000 sq ft ●●100,000 sq ft ●●Stage - demolition ●●Stage - demolition ●●Completion Q3 2014 ●●Completion Q4 2014 ●●Capex c.£26m ●●Capex c.£44m ●●ERV c.£47.50 psf ●●ERV c.£55 psf 44
Slide 46: Farringdon - The Crossrail factor
Farringdon - The Crossrail factor ●● Farringdon, set to become the capital’s best connected hub ○○ Arrival of Crossrail in 2018 ●● Totally connected ○○ Access to London’s three transportation networks - Underground, Thameslink and Crossrail ○○ North - South, East - West links ●● Significant benefits
Slide 47: Farringdon - The Crossrail factor
Farringdon - The Crossrail factor Th Buckley Building EC1 am Rosebery Avenue EC1 es lin k S S Turnmill EC1 S Morelands Buildings EC1 Farringdon srail Cros Johnson Building EC1 40 Chancery Lane WC2 S S Current scheme 46
Slide 48: On-site phased refurbishments
On-site phased refurbishments Area 113,000 sq ft Pre-let 29% ERV (net)1 c.£5.5m pa Valuation2 £49m Capex3 c.£25m End value2 c.£100m 1 & 2 Stephen Street W1 Morelands Buildings EC1 ●● Formerly Central Cross ●● 27,000 sq ft ○○ Includes new ●● 86,000 sq ft penthouse floor ○○ Phase 1: 23,000 sq ft ○○ Ph
Slide 49: Project delivery dates
Project delivery dates On-site projects - 0.6m sq ft Scheme Current net 2.2m sq ft Uplift pa net ERV pa income pa 250 £23.9m - £5.2m1 = £18.7m Consented Appraisal schemes studies 1.5m sq ft 0.7m sq ft Includes: Includes: 200 Stephen Street P2 Floorspace ('000 sq ft) 80 Charlotte Grosvenor Street Pla
Slide 50: Project pipeline summary
Project pipeline summary On-site Consented Appraisal Total projects projects studies1 pipeline2 0.6m + 1.5m + 0.7m = 2.8m sq ft Consented 80 Charlotte St W1 Bishop’s Bridge Rd W2 Appraisal Tottenham Ct Rd W1 73 Charlotte St W1 projects studies Planning Planning 1.5m 0.7m submitted submitted sq ft sq
Slide 51: 80 Charlotte Street W1
80 Charlotte Street W1 ●●In the core of our Fitzrovia estate 80 Charlotte Street sq ft Offices 323,000 Residential (private) 14,000 337,000 65 Whitfield Street sq ft Offices 12,000 Residential (private) 21,000 Residential (affordable) 10,000 43,000 1 Whitfield Place sq ft Residential (affordable) 5,
Slide 52: 80 Charlotte Street W1
80 Charlotte Street W1 ●●385,000 sq ft office and residential ●●Final stages of design ●●Expected start H2 2013 51
Slide 53: 1-5 Grosvenor Place SW1
1-5 Grosvenor Place SW1 ●● Joint venture with Grosvenor Estate ●● Unique 1.5 acre prime development opportunity ●● 2013 planning submission 52
Slide 54: White Collar Factory - update
White Collar Factory – update ●●City Road Estate EC1 ●●‘Tech City’ ●●Planning permission for 289,000 sq ft 53
Slide 55: White Collar Factory - update
White Collar Factory - update ●●Impressive volumes ●●3.5m floor to ceiling heights ●●A passive slab incorporates cooling and heating ●●Cost effective construction and operation 54
Slide 56: San Francisco site visit - 'home of tech'
San Francisco site visit – ‘home of tech’ ●● 26% of central London take up in H1 to TMT1 ●● 80% of our lettings by income, excluding Burberry, in H1 2012 to TMT sector ●● Our buildings are in sweet spot 1 Source: Jones Lang LaSalle 55
Slide 57: San Francisco site visit
San Francisco site visit ●● Introduction to the local tech community ●● How tenants utilise space ●● ‘War for talent’ 56
Slide 58: San Francisco site visit
San Francisco site visit ●● Creation of communities in hubs ●● Little conventional office space, more room for ‘break out’ ●● Want both: ○○ Flexibility to accommodate growth ○○ Certainty of outgoings ●● Reinforces our White Collar Factory initiative 57
Slide 59: White Collar Factory - putting it into practice
White Collar Factory – putting it into practice ●● Refinement of the product ○○ Finishes ○○ Services ●● 3,000 sq ft ‘live suite’ under construction at City Road ○○ Ready early 2013 ●● Opportunity to showcase the concept 58
Slide 60: Outlook
Outlook John Burns 59
Slide 61: Outlook
Outlook ●● Central London rents expected to continue to rise in H2 2012 ●● Central London yields should remain firm ●● Strong demand for our space continues ●● Increasing development exposure ○○ New starts 2012: Chancery Lane, Turnmill ○○ Expected starts 2013: Charlotte Street and Bishop’s Bridge Ro
Slide 62: Appendices
Appendices 1. Central London office vacancy 62 12. Valuation yields 73 2. Central London office supply and demand 63 13. Portfolio reversion 74 3. Central London office rental growth 64 14. Available and project space 75 4. Net asset value per share 65 15. Portfolio statistics by village 76 5. Group
Slide 63: Appendix - Central London office vacancy
Appendix 1 - Central London office vacancy 16 West End 14 City Central London 12 West End 10-yr average Vacancy rate (%) City 10-yr average 10 8 6 4 2 0 Q2 02 Q2 03 Q2 04 Q2 05 Q2 06 Q2 07 Q2 08 Q2 09 Q2 10 Q2 11 Q2 12 Source: CBRE Source: CBRE 62
Slide 64: Appendix - Central London office supply and demand
Appendix 2 - Central London office supply and demand 6 12 Rental growth (quarter-on-quarter %) 3 10 Vacancy rate (%) 0 8 -3 6 -6 4 -9 2 IPD rental growth CBRE vacancy rate -12 0 Q2 02 Q2 03 Q2 04 Q2 05 Q2 06 Q2 07 Q2 08 Q2 09 Q2 10 Q2 11 Q2 12 Source: IPD/CBRE Source: IPD/CBRE 63
Slide 65: Appendix - Central London office rental growth
Appendix 3 - Central London office rental growth 30 20 Prime rental growth (% pa) 10 0 Q2 02 Q2 03 Q2 04 Q2 05 Q2 06 Q2 07 Q2 08 Q2 09 Q2 10 Q2 11 Q2 12 -10 -20 Central London -30 City West End -40 Source: CBRE Source: CBRE 64
Slide 66: Appendix - Net asset value per share
Appendix 4 - Net asset value per share Jun 2012 Dec 2011 Basic Diluted Basic Diluted £m p p £m p p Net assets attributable to equity shareholders 1,739.1 1.706 1,697 1,662.7 1,636 1,625 Fair value of secured bonds (24.7) (20.8) Fair value of unsecured bonds (11.7) 2.4 EPRA NNNAV 1,702.7 1,670 1,662
Slide 67: Appendix - Group balance sheet - summarised
Appendix 5 - Group balance sheet - summarised Jun 2012 Dec 2011 Jun 2011 £m £m £m Investment property 2,565.9 2,444.9 2,496.5 Owner-occupied property 17.3 17.1 16.4 Other non-current assets 71.2 67.4 61.1 2,654.4 2,529.4 2,574.0 Non-current assets held for sale 92.6 137.5 45.4 Other current assets a
Slide 68: Appendix - Group income statement
Appendix 6 - Group income statement Half year Year Half year ended ended ended Jun 2012 Dec 2011 Jun 2011 £m £m £m Profit before tax (IFRS) 102.4 233.0 173.3 Revaluation surplus (77.3) (170.1) (117.3) Joint venture revaluation surplus - (0.9) (0.3) Profit on disposal of properties (0.2) (36.1) (21.5
Slide 69: Appendix - EPRA like-for-like rental income
Appendix 7 - EPRA like-for-like rental income Like-for-like Properties increase owned Against Against throughout Development H1 2011 H2 2011 the period Acquisitions Disposals property Total % % £m £m £m £m £m H1 2012 Rental income 8.2 3.2 54.2 4.9 0.8 2.4 62.3 Property expenditure (3.2) (0.5) (0.1)
Slide 70: Appendix - Debt facilities
Appendix 8 - Debt facilities 1 £m £m Maturity 6.5% secured bonds 175.0 March 2026 2.75% unsecured convertible bonds 175.0 July 2016 Overdraft 10.0 On demand Committed bank facilities Term 28.0 June 20182 Term/revolving credit 90.0 December 2017 Revolving credit 125.0 November 2015 Revolving credit 1
Slide 71: Appendix - Net debt
Appendix 9 - Net debt Jun 2012 Dec 2011 Jun 2011 £m £m £m £m £m £m Overdraft - - 7.5 Financial liabilities - due within 1 year 95.0 32.5 32.5 Financial liabilities - due after more than 1 year 778.1 835.5 871.8 Acquired fair value of secured bonds less amortisation (16.8) (17.2) (17.6) Unamortised l
Slide 72: Appendix - Valuation performance by village
Appendix 10 - Valuation performance by village Valuation Valuation Weighting movement Jun 2012 Jun 2012 H1 2012 1 £m % % West End Fitzrovia 2 995.1 36 3.1 Victoria 425.2 16 4.1 Baker Street/Marylebone 132.5 5 2.4 Soho/Covent Garden 117.9 5 0.7 Belgravia 76.0 3 0.8 Mayfair 58.0 2 1.6 Paddington 36.5
Slide 73: Appendix - Valuation drivers and rental value growth
Appendix 11 - Valuation drivers and rental value growth Drivers of valuation movement Other Rental value growth Yield shift Jun-12 1 -5 75 30 1 Dec-11 68 32 Jun-11 1 -6 70 36 1 Dec-10 28 42 30 Jun-10 1 1 22 77 Rental value growth -20 0 20 40 60 80 100 120 Contribution to valuation movement (%) H1 20
Slide 74: Appendix - Valuation yields
Appendix 12 - Valuation yields Yields EPRA initial yields 9 Pre-EPRA EPRA ‘Topped-up’ 8 Net initial net initial yield yield % % 7 West End 4.2 4.9 Yield (%) 6 City Borders 5.0 5.7 Central London 4.4 5.1 5 Provincial 6.5 7.1 EPRA portfolio 4.5 5.1 4 Initial yield 3 True equivalent yield Reversionary
Slide 75: Appendix - Portfolio reversion
Appendix 13 - Portfolio reversion Stephen Street 7 on-site and Morelands Core Total projects non-project properties portfolio rental rental2 rental rental Income profile £m pa £m pa £m pa £m pa Net contracted rental income 5.2 6.0 102.8 114.0 Contractual pre-lets / uplifts 6.6 1.6 16.0 24.2 Net ERV
Slide 76: Appendix - Available and project space
Appendix 14 - Available and project space Vacant To be vacated in at H1 H2 2012 for next Pre-let Project and vacant 2012 scheme phase Current Gross Ground Net ERV rent Reversion ERV ERV rent ERV Area Comment £m pa £m pa £m pa £m pa £m pa £m pa £m pa sq ft } On-site developments 1 Page Street SW1 127
Slide 77: Appendix - Portfolio statistics by village
Appendix 15 - Portfolio statistics by village Net Rent Vacant contracted Average Vacant review/ Estimated Floor floor rental rental space lease renewal Total rental Valuation Weighting area area income income net ERV reversion reversion value £m % sq ft ‘000 sq ft ‘000 £m pa £ psf £m pa £m pa £m pa
Slide 78: Appendix - Annualised net contracted rental income
Appendix 16 - Annualised net contracted rental income ●● Annualised net contracted rental income at 30 June 2012 ○○ Includes: Reconciliation of net contracted income Dec 11 to Jun 12 ◦◦ Annualised rents under leases 120 ○○ Excludes: ◦◦ Rental movements on outstanding Contracted income (£m pa) 115 re
Slide 79: Appendix - Lease expiry profile and lease length
Appendix 17 - Lease expiry profile and lease length Expiries and breaks as a percentage of portfolio income1 West City H2 End Borders 2012 2013 2014 2015 2016 Total Expiries 2 1 3 10 4 5 5 27 Single breaks 2 - 2 3 8 2 3 18 Rolling breaks 2 1 3 1 1 - - 5 6 2 8 14 13 7 8 50 Profile of rental income ex
Slide 80: Appendix - Rent banding and tenant profile
Appendix 18 - Rent banding and tenant profile Central London ‘topped-up’ office rent banding 1 Profile of tenants’ business sector 2 £60+ psf £0 - £20 psf Other Government and £50 - £60 psf 4% 5% public admin 8% 5% 3% £20 - £30 psf Financial 15% Media, TV, marketing 4% and advertising 31% Retail hea
Slide 81: Appendix - Projects summary 2012 to 2013
Appendix 19 - Projects summary 2012 to 2013 Current Pre net scheme Proposed 2012 2013 2014+ Total income area area capex1 capex1 capex1,2 capex1 Delivery ERV £m pa ‘000 sq ft ‘000 sq ft £m £m £m £m date £ psf On-site developments 1 Page Street SW1 - 118 127 15.6 14.7 0.6 30.9 Q2 2013 45-50 4 & 10 Pe
Slide 82: Appendix - Projects summary 2014+
Appendix 20 - Projects summary 2014+ Current Pre net scheme Proposed Earliest income area area possession £m pa ‘000 sq ft ‘000 sq ft year Comment Wedge House SE1 0.3 39 80 2012 Consent - offices 60 Commercial Road E1 0.4 30 122 2012 Consent - student residential City Road Estate EC1 0.8 124 289 201
Slide 83: Appendix - Management structure - executive team
Appendix 21 - Management structure - executive team John Burns Chief Executive Damian Wisniewski Finance Director Simon Silver Property Director Nigel George Property Director Paul Williams Property Director David Silverman Property Director Tim Kite Company Secretary Richard Baldwin Head of Develop
Slide 84: Disclaimer
Disclaimer This presentation has been prepared by Derwent London plc (the apparent. Past performance is not indicative of future results and “Company”). No representation or warranty (express or implied) forward-looking statements are not guarantees of future performance. of any nature is given nor