British Land Company PLC · LSE:BLND
British Land — FY2017 Earnings Presentation
102 slides from British Land's earnings presentation, May 17, 2017
Slide 1: Full Year Results Presentation
Full Year Results Presentation Full Year ended 31 March 2017 www.britishland.com @BritishLandPLC #BLFY2017 $BLND
Slide 2: A successful year
A successful year Chris Grigg Chief Executive
Slide 3: Key messages
Key messages • Good results 100 Liverpool Street – Active execution of strategy – Attracting demand from occupiers and investors • Taking the business forward – Opportunities already in the portfolio – Positioned to exploit optionality 3
Slide 4: Results highlights
Results highlights • Underlying profits up 7% to £390m SouthGate, Bath (+£27m) – Strong leasing activity – Reducing finance and admin costs • NAV down 0.4% to 915p – Valuation fall of 1.4% • 1.7m sq ft lettings and renewals across the business – 8% ahead of ERV – Further 1m sq ft under offer or in a
Slide 5: Offices – Attracting occupier and investor demand
Offices – Attracting occupier and investor demand 1m Sq ft lettings progressed • Sale of The Leadenhall Building 4 Kingdom Street for £1.15bn (100%) • 1m sq ft of office lettings progressed 7 Clarges Street • Evidence of – World class buildings – Broadening our campus offer – Progressing development
Slide 6: Offices – Creating and delivering world class buildings
Offices – Creating and delivering world class buildings • The Leadenhall Building – £1.15bn headline price (100%) – 24% ahead of September 2016 valuation – 25% IRR since 2010 • Development of 7 Clarges Street – 83% let; one floor to go – Rents in line with pre-referendum ERVs • 1m sq ft lettings pro
Slide 7: Offices – Broadening the offer
Offices – Broadening the offer Our research 96% 98% 92% shows that… Value public transport Say communal working Want food and beverage links close to the office areas are important options nearby Survey of London Millennials Paddington Central 4 Kingdom Street • Office space nearly 80 % under offer
Slide 8: Offices – Creating and exploiting optionality
Offices – Creating and exploiting optionality Creating Exploiting Planning permission Arranging 1 Triton Square secured on • Short term leases 1.5m sq ft • New campus uses 2&3 Finsbury Avenue 1 Finsbury Avenue Pergola, 5 Kingdom Street 2 Finsbury Avenue Blossom Street 8
Slide 9: Retail – Strong occupier demand; continued outperformance
Retail – Strong occupier demand; continued outperformance • Positioned to perform Mayflower, Basildon – Reshaping the portfolio – Enhancing environments – Attracting a broader range of occupiers Glasgow Fort Ealing Broadway Meadowhall, Nespresso 9
Slide 10: Retail – Reshaping the portfolio
Retail – Reshaping the portfolio >50% of portfolio turned over in last 5 years • £881m of non-core retail disposals – 3% above valuation – 4.3% average yield Non-core multi-let assets Superstores £226m Department stores Westgate, Wakefield Tesco JV Debenhams, Oxford Street 2012 – 2017 £2.5bn sales £
Slide 11: Retail – Enhancing environments
Retail – Enhancing environments Tollgate, Colchester Ealing Broadway • £6m spend • £12.5m refurb • ERV +14% • Over 30% re-let • Footfall +8% since acquisition • ERV +6% Meadowhall Glasgow Fort • £60m • £12m refurbishment investment • 37 lettings • 15 lettings • 7.6% ahead • First out of town of ERV
Slide 12: Retail – Capturing incremental demand
Retail – Capturing incremental demand Occupiers extending stores New formats and locations Multi-let portfolio – lettings vs ERV 12 +11% 10 Lettings vs ERV % +8% 1.0m 8 sq ft 6 0.9m 4 sq ft 2 0 2016 2017 12
Slide 13: Retail – Operational outperformance across the portfolio
Retail – Operational outperformance across the portfolio Year Ended Total multi-let March 2017 portfolio Regional Local 240bps Footfall Ahead of market -1.9% +2.1% +0.0% ERV Growth in-store Sales 220bps Retailer Ahead of market +0.3% -0.7% +0.0% 150bps Ahead of market +2.3% +2.5% +2.4% Source: Footf
Slide 14: Continued polarisation in Retail
Continued polarisation in Retail 2.4% Rental growth on multi-let ERV growth vs IPD and Retail sales, including online assets in FY17 Index Mar-14 = 100 112 110 Retail sales inc. online BL Multi-let 108 IPD Prime 106 104 12.5% 102 100 IPD Secondary 98 96 94 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 S
Slide 15: Sustainability – sector leading performance
Sustainability – sector leading performance Sector leader for Customer Orientation Right Places 3 consecutive years Wellbeing Community • Targeting wellbeing to Young Readers Programme support productivity • Connecting with • Helping occupiers attract communities and retailers and retain talent • En
Slide 16: Finance Review
Finance Review Lucinda Bell Chief Financial Officer
Slide 17: Highlights
Highlights FY to 31 March 2016 2017 Change % Underlying Profit (£m) 363 390 7.4 Underlying Earnings per Share (p) 34.1 37.8 10.9 Dividend per Share (p) 28.36 29.20 3.0 Valuation Performance +6.7% -1.4% EPRA Net Asset Value per Share (p) 919 915 (0.4) Loan to Value (LTV) 32.1% 29.9% Total Accounting
Slide 18: Net rental income
Net rental income £m (23) 11 (8) 10 620 Retail 1.5% 610 Retail 2.0% Offices 4.2% Total Offices 4.5% 2.3% Total1 2.9% FY 2016 Capital activity Like for like Expiries on Development FY 2017 rental growth developments lettings 1 Like for like rental growth is stated excluding the impact of surrender pr
Slide 19: Financing Costs
Financing Costs £m 16 9 (5) 10 (1) (180) (151) FY 2016 Financing Financing Acquisitions Disposals Completion of FY 2017 activity – debt decisions – developments transactions lower rates 19
Slide 20: Underlying Profit up £27 million
Underlying Profit up £27 million £m 8 25 (18) 11 1 390 363 FY 2016 Capital activity Like for like Developments Financing activity Administrative FY 2017 rental growth expenses 20
Slide 21: Income statement
Income statement FY to 31 March 2016 2017 Change % Net Rental Income (£m) 620 610 (1.6) Fees & Other Income (£m) 17 17 - Administrative Expenses (£m) (94) (86) (8.5) Net Finance Costs (£m) (180) (151) (16.1) Underlying Profit (£m) 363 390 7.4 Underlying Earnings per Share (p) 34.1 37.8 10.9 Dividend
Slide 22: Valuation performance
Valuation performance FY to 31 March Valuation Movement Movement Yield ERV NEY Weighting £bn £m % Movement Growth % % bps % Retail 6.6 (133) (1.8) 14 1.6 5.2 48 Offices & Residential 7.0 (37) (0.5) 15 0.5 4.5 50 Canada Water 0.3 (33) (10.8) 9 0.9 3.4 2 Total 13.9 (203) (1.4) 15 1.1 4.8 100 - Of whic
Slide 23: Valuation growth drivers – Retail
Valuation growth drivers – Retail FY to March Valuation Movement Movement Yield Movement ERV Growth 2017 £bn £m % bps % H1 H2 FY H1 H2 FY H1 H2 FY Regional 3.0 (55) (2.8) 1.0 (1.8) 16 (4) 12 1.3 1.0 2.3 Local 2.1 (108) (4.8) 0.4 (4.5) 29 (1) 27 1.3 1.2 2.5 Multi-let 5.1 (163) (3.7) 0.7 (3.0) 22 (3)
Slide 24: Valuation growth drivers – Offices & Residential
Valuation growth drivers – Offices & Residential FY to March Valuation Movement Movement Yield Movement ERV Growth 2017 £bn £m % bps % H1 H2 FY H1 H2 FY H1 H2 FY West End 3.9 (25) (2.4) 1.7 (0.6) 16 (1) 15 0.3 0.4 0.7 City 2.9 (23) (4.9) 4.4 (0.8) 27 (13) 15 (0.2) 0.4 0.2 Offices 6.8 (48) (3.5) 2.8
Slide 25: Reduction in diluted EPRA net asset value
Reduction in diluted EPRA net asset value 36p (27p) (39p) 11p 19p (4p) 919p 915p Mar 16 H1 valuations H2 valuations Underlying Dividends Liability Reversal of Mar 17 Profit management 2012 costs convertible bond dilution & other 25
Slide 26: Strength of debt metrics
Strength of debt metrics Proportionally Consolidated 31 Mar 2016 31 Mar 2017 Loan to Value (LTV) 32.1% 29.9% Weighted Average Interest Rate 3.3% 3.1% Interest Cover 3.0x 3.6x Average Maturity of Drawn Debt (years) 8.1 7.7 26
Slide 27: Development pipeline
Development pipeline £64m ERV of Committed & Near Term Developments • Committed speculative £m – Costs to Come exposure below 4% 400 - Costs to come matched by residential receipts 350 Plymouth Leisure 300 • Near term speculative 1 Finsbury Avenue 250 exposure increases to 6% 135 Bishopsgate Speke L
Slide 28: Future income profile
Future income profile Annualised Gross Rents as at 31 March 2017 Cash Flow Accounting Basis Basis £m £m Current Passing Rent 611 Contracted Uplifts 42 608 Total Contracted Rent 653 Sales and purchases completing after year end (22) (19) Letting of Completed Developments (of which £7m let or under of
Slide 29: Summary
Summary • Good results • Improved financial strength • Modest speculative development 4 Kingdom Street 29
Slide 30: Looking forward
Looking forward Chris Grigg Chief Executive
Slide 31: Creating a resilient business
Creating a resilient business Offices Increase in West End Fall in banks 35% as a % of Offices 61% 12% as a % of portfolio 7% March 2010 Current March 2010 Current Retail Increase in Multi-let Fall in superstores 60% as a % of retail 78% 15% as a % of portfolio 4% March 2010 Current March 2010 Curre
Slide 32: Market Outlook
Market Outlook • Uncertainty created by Brexit Glasgow Fort • Wide range of outcomes • Feedback from our occupiers – Taking longer to commit Meadowhall – Continue to value London • Demand for the best space remains – Accelerating polarisation 7 Clarges Street 32
Slide 33: Office Opportunities
Office Opportunities 1 Triton Square 1 Finsbury Avenue • 288,000 sq ft refurbishment • Includes 45,000 sq ft retail • Planning expected May 2017 • £35 million investment 135 Bishopsgate • 310,000 sq ft office space • 125,000 sq ft additional space • Under offer for pre-let of entire office space • R
Slide 34: Retail Opportunities
Retail Opportunities Meadowhall Leisure Retail extensions Includes: • £48m consented leisure scheme at Drake Circus, Plymouth • Leisure extension at Serpentine Green, Peterborough, target planning submission autumn 2017 • 322,000 sq ft leisure extension • Planning decision expected summer 2017 Eden
Slide 35: Flexible workspace – responding to changing customer needs
Flexible workspace – responding to changing customer needs • Broadening our offer – Incremental demand from SMEs – Meeting needs of existing occupiers • Launching flexible workspace offer across our campuses – 80,000 sq ft being fitted out with first deal agreed on 25,000 sq ft Appold Studios, Broad
Slide 36: Canada Water
Canada Water • Fourth public consultation underway (www.canadawatermasterplan.com) Proposed mix of uses • 3,500 new homes • 2m sq ft Workspace • 1m sq ft Retail & Leisure 36
Slide 37: Disciplined approach to capital allocation
Disciplined approach to capital allocation • Forecasts and hurdle rates guide The Leadenhall Building capital allocation • Assessed on a regular basis • Flexibility to respond to changing market 37
Slide 38: Summary
Summary • Good results in an uncertain 1 Triton Square environment – Strong leasing – Profitable disposals – Progressing opportunities • Our space fulfils customers’ changing needs – Attractive to occupiers and investors • Cautious optimism for our business – High quality portfolio; robust finances
Slide 39: Appendices
Appendices
Slide 40: Our Strategy
Our Strategy British Land is a leading UK commercial property company focused on high quality retail and London offices Customer Orientation Right Places We use our insight into We design engaging, customers’ needs and identify sustainable places which major long term trends to bring people together
Slide 41: Placemaking Framework applied across the business
Placemaking Framework applied across the business We We We We Connect Design Enhance Enliven Communication Form Segment mix Customer service Digital connectivity, Efficient and effective Balance of different On-site hospitality branding and marketing buildings & spaces segments and uses & customer s
Slide 42: Portfolio evenly split between London Offices and Retail
Portfolio evenly split between London Offices and high quality Retail Offices Retail & Leisure £6.3bn £6.6bn Further £0.3bn at Canada Water and £0.2bn of standalone Residential assets Figures shown on a proportionally consolidated basis including the group's share of properties in Joint Ventures & Fu
Slide 43: Retail Multi-let Portfolio
Retail Multi-let Portfolio Our two core products each fulfil specific shopper missions Regional Local Attracting visitors from a wide catchment Fitting into the daily life for a planned trip of local communities Missions include Leisure-dominated Trips, Missions include Local Neighbourhood Shopper,
Slide 44: Multi-let Retail assets
Multi-let Retail assets Regional Local Attracting visitors from a wide catchment Fitting into the daily life for a planned trip of local communities Southgate, Bath Mayflower, Basildon Beaumont, Leicester Broughton, Chester1 Weston Lock, Bath Valentine, Lincoln1 Fort Kinnaird, Edinburgh1 Cornerhouse
Slide 45: Portfolio well positioned to meet consumer and retailer demands
Our portfolio is well positioned to meet both consumer and retailer demands BL local Potential to reach centres 60% of the population BL regional centres BL asset catchments Annual footfall of 312m Average rent to sales ratio 10% 85% of our car parking spaces are free Source: CACI Retail Footprint 2
Slide 46: Physical store openings boost retailers' online presence
Physical store openings significantly boost retailers’ online presence Postal area share of retailer website visits Indexed vs. store opening date 170 160 150 140 130 +44% 120 110 100 90 80 -20 weeks -15 -10 -5 Store Opening 5 10 15 +20 weeks Note: Based on a sample of 29 retailers opening at Britis
Slide 47: Online sales increasingly integrated with physical stores
Online sales increasingly integrated with physical stores 89% of UK retail sales touch the store Retail sales by channel (UK, all sectors, 2015) Online Online sales pureplay Mail order & not browsed sales TV shopping Online sales Click & in store browsed £4 bn Collect in store £13 bn sales £18 bn £5
Slide 48: BL footfall performance vs benchmark
BL footfall performance vs benchmark +240bpsOutperformance in FY17 Jan-10 = 100 115 110 105 100 95 90 85 80 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 British Land UK Market (ShopperTrak UK National Index) 48
Slide 49: Major property holdings
Major property holdings At 31 March 2017 BL Share Sq ft Rent Occupancy Lease % 000’s £m pa1 Rate %2 Length yrs3 1 Broadgate 50 4,850 190 98.3 8.2 2 Regent's Place 100 1,590 76 99.1 7.4 3 Paddington Central 100 958 33 94.1 6.8 4 Meadowhall, Sheffield 50 1,500 84 97.9 6.4 5 The Leadenhall Building4 50
Slide 50: Top occupiers & occupier split by industry
Top 20 occupiers & occupier split by industry As at 31 March 2017 % of Contracted Rent Tesco plc1 5.4 Occupier Split by Industry (%) J Sainsbury plc 4.8 Other 10% Fashion UBS AG 3.4 & Beauty DIY 7% 16% Debenhams 3.3 Kingfisher (B&Q) 2.8 HM Government 2.6 TMT 7% Next plc 2.4 Virgin Active 1.9 General
Slide 51: London Assets
London Assets 5 . rail i Ss Broadgate (Launching 2017-2018) ace 4.9m sq ft Paddington 1.6m sq ft City Central 30 mins from 1m sq tt Liverpool St =,,...Kings Cross Regent's & Park Farringdon Whitech @ =>¢ West End @ Bond Street @>€ Midtown ns The City ez ? >< @>< Liverpool St Tottenham Court Road © =
Slide 52: Broadgate – development opportunities
Broadgate – development opportunities to add a wider range of uses and attract a broader range of occupiers 2–3 Finsbury Avenue • 2 Finsbury Avenue – lease expired in Dec 2016 • 3 Finsbury Avenue – expected lease break in late 2018 • Current size: 189k sq ft • Potential size: 563k sq ft 1 Finsbury A
Slide 53: Paddington Central Campus
Paddington Central Campus 53
Slide 54: Regent's Place Campus
Regent’s Place Campus @ 20 Triton Street 2) 1 Osnaburgh Street ® 1-8 Longford Street @ UKPN Substation ® 1 Triton Square © 10 Brock Street @ 20 Brock Street 15-31 Hampstead Road (9) 30 Brock Street 0) Euston Tower © @ 2 Triton Square 2) 338 Euston Road BROCK STREET 63) 350 Euston Road esioy (14) 10
Slide 55: Canada Water
Canada Water O) Surrey Quays Shopping Centre * 23 acres * Tesco anchored scheme « Acquired a 50% leasehold interest in 2009 « Acquired the remaining 50% leasehold from Tesco in 2013 for £48m « Freehold owned by Southwark Council @ Former Daily Mail Printworks ¢ 14acres Reached a conditional agreemen
Slide 56: Capital Activity £2bn
Capital Activity £2bn Gross investment activity in FY17 Net Spend £52m £648m (£267m) £31m (£1,059m) £m 1,600 1,200 800 400 - (400) (800) (1,200) (1,600) (2,000) Financial 2013 2014 2015 2016 20171 Year Disposals Capital Investment Acquisitions Net Spend Net Acquisitions/ Disposals 1 2017 includes tr
Slide 57: Capital Activity
Capital Activity Since 1 April 2016 Retail Offices Residential Canada Water Total £m £m £m £m £m Purchases1 187 – – 8 195 Sales1,2 (881) (609) (56) – (1,546) Development Spend 20 132 21 10 183 Capital Spend 91 18 – – 109 Net Investment (583) (459) (35) 18 (1,059) Gross Investment 1,179 759 77 18 2,0
Slide 58: Acquisitions
Acquisitions Since 1 April 2016 Sector Price Price Annual (100%) (BL Share) Passing £m £m Rent £m4 Completed New George Street Estate, Plymouth Retail 64 64 5 10-40 The Broadway, Ealing1 Retail 49 49 2 Harlech, Newport – Tesco exchange transaction2 Retail 41 20 1 Tesco, Brislington – Tesco exchange
Slide 59: Disposals
Disposals Since 1 April 2016 Sector Price Price Annual (100%) (BL Share) Passing £m £m Rent £m3 Completed Debenhams, Oxford Street Retail 400 400 13 Superstores1 Retail 410 226 12 Portfolio of retail assets (Debenhams Manchester, Retail 191 191 12 York Clifton Moor, Wakefield Westgate) Ebury Gate Of
Slide 60: FY18 income statement guidance
FY18 income statement guidance • Gross Rents • Operating costs – Annualised accounting gross rent of £602m as at – Expected to be broadly in line with FY17 levels. 31 March 2017 This includes the investment in flexible workspace – Transactions completing after 31 March 20171 which is expected to be
Slide 61: Future income profile breakdown (cash basis)
Future income profile breakdown (cash basis) For the year to 31 March 2018 2019 2020 2021 2022 Total At 31 March 2017 £m £m £m £m £m £m Contracted rent 653 Sales and purchases completing post year end (22) – – – – (22) Letting of completed developments 11 – – – – 11 (of which £7m let or under offer)
Slide 62: Gross rental income
Gross rental income1 Accounting Basis £m 12 months to 31 March 2017 Annualised as at 31 March 2017 Group JVs & Total Group JVs & Total Funds Funds Regional 60 86 146 61 86 147 Local 98 27 125 88 26 114 Multi-let 158 113 271 149 112 261 Department Stores & 48 – 48 38 – 38 Leisure Superstores 9 32 41
Slide 63: Administrative Expenses
Administrative Expenses Financial Year to 31 March 2016 2017 £m £m Personnel Costs 50 50 Share Scheme Costs 10 4 Other Administrative Expenses 33 32 Total – British Land 93 86 Broadgate Estates 5 5 Total – Group 98 91 Capitalised Costs (4) (5) Total Administrative Expenses 94 86 On a proportionally
Slide 64: Operating costs metric
Operating costs metric Financial Year to 31 March 2016 2017 £m £m Property operating expenses 34 33 Administrative expenses 94 86 Net fees and other income (17) (17) Ground rent costs (3) (2) EPRA Costs (including direct vacancy costs) 108 100 Gross rental income 654 643 Ground rent costs (3) (2) Gr
Slide 65: Reconciliation of Underlying Profit
Reconciliation of Underlying Profit FY to 31 March (£m) 2016 2017 IFRS profit before tax 1,331 195 Net valuation (profit)/loss (849) 225 Profit on disposal of investment and trading properties (69) (20) Deferred and current taxation of joint ventures & funds 1 (1) Capital financing income (33) (6) N
Slide 66: Number of shares
Number of shares Number of shares (m) As at As at 31 March 16 31 March 17 IFRS Basic Weighted Average1 1,025 1,029 IFRS Diluted Weighted Average2 1,089 1,091 Underlying/EPRA Diluted Weighted Average3 1,089 1,033 Year End4 1,096 1,038 1 For use in IFRS basic earnings per share 2 For use in IFRS dilut
Slide 67: EPRA balance sheet
EPRA balance sheet £m 31 March 16 Group JVs & Funds 31 March 17 Total properties 14,648 9,210 4,730 13,940 Adjusted net debt (4,765) (2,990) (1,233) (4,223) Other net liabilities (209) (148) (71) (219) EPRA Net Assets (undiluted) 9,674 6,072 3,426 9,498 Dilution impact of 1.5% convertible bond 400 –
Slide 68: Reconciliation of EPRA NAV & NNNAV
Reconciliation of EPRA NAV & NNNAV 31 March 16 31 March 17 £m pence £m pence IFRS Net Assets 9,619 935 9,476 921 Deferred tax arising on revaluation movements 5 3 Mark to market on effective cash flow hedges and 198 155 related debt adjustments1 Adjust to fully diluted on exercise of share options 3
Slide 69: Gross and net debt reconciliation
Gross and net debt reconciliation At 31 March 2017 Group JVs & Funds Less non- Total £m £m controlling £m interests £m Gross Debt (principal value) 3,069 1,579 (128) 4,520 IFRS adjustments: Issue costs and premia (12) (3) - (15) Fair value hedges 237 - - 237 Other Items (13) - - (13) IFRS gross debt
Slide 70: Loan to value (LTV)
Loan to value (LTV) As at Valuation Acquisitions Capital Disposals Other As at Proforma 31 March movement Spend 31 March for 2016 2017 Leadenhall £m £m sale Total 14,648 (204) 103 263 (843) (27) 13,940 13,403 properties Other 138 - - - - 13 151 151 investments LTV Assets 14,786 (204) 103 263 (843) (
Slide 71: Strength of debt metrics
Strength of debt metrics Proportionally Consolidated 31 Mar 2016 31 Mar 2017 Loan to Value (LTV) 32.1% 29.9% Weighted Average Interest Rate 3.3% 3.1% Interest Cover 3.0x 3.6x Average Maturity of Drawn Debt (years) 8.1 7.7 Group 31 Mar 2016 31 Mar 2017 Loan to Value (LTV) 25.2% 22.6% Available undraw
Slide 72: Debt maturity (£m)
Debt maturity (£m) £m 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Year to March Convertible Bond (Unsecured) JVs – Securitisations Bank RCF Undrawn (Unsecured) US Private Placements (Unsecure
Slide 73: Debt financing – diverse profile
Debt financing – diverse profile • Extended £1.4bn of unsecured £4.5bn Drawn Debt Profile1 (31 March 2017) revolving bank facilities £0.5bn £0.5bn • Average drawn debt term 7.7 years • The Group has no requirement to refinance until early 2021 £0.6bn £1.3bn • On completion of sale of 50% interest in
Slide 74: Portfolio valuation by sector
Portfolio valuation by sector At 31 March 2017 Group JVs & Funds Total Movement %1 £m £m £m H1 H2 FY Regional 1,120 1,834 2,954 (2.8) 1.0 (1.8) Local 1,671 477 2,148 (4.8) 0.4 (4.5) Multi-let 2,791 2,311 5,102 (3.7) 0.7 (3.0) Department Stores and Leisure 574 1 575 3.2 3.1 5.1 Superstores 106 526 63
Slide 75: Portfolio weighting
Portfolio weighting At 31 March 2016 2017 (current) 2017 (current) 2017 (pro- % % £m forma1) % Regional 19.4 21.3 2,954 21.6 Local 16.3 15.4 2,148 16.1 Multi-let 35.7 36.7 5,102 37.7 Department Stores and Leisure 6.9 4.1 575 4.2 Superstores 5.3 4.5 632 3.9 Solus and Other 2.3 2.5 345 2.5 Retail 50.2
Slide 76: Lease length and occupancy
Lease length and occupancy At 31 March 2017 Average Lease Length (yrs) Occupancy Rate (%) To Expiry To Break EPRA Occupancy1 Occupancy Regional 7.9 6.7 97.3 97.7 Local 7.9 6.8 97.3 97.9 Multi-let 7.9 6.8 97.3 97.8 Department Stores and Leisure 17.4 17.4 99.8 99.8 Superstores 11.7 11.3 100.0 100.0 So
Slide 77: Portfolio net yields
Portfolio net yields1,2 At 31 March 2017 EPRA EPRA topped Overall Net Net net initial up net initial topped up equivalent reversionary 3 yield % yield % net initial yield % yield % 4 yield % Regional 4.5 4.6 4.7 4.9 5.0 Local 5.1 5.2 5.3 5.4 5.4 Multi-let 4.7 4.9 4.9 5.1 5.2 Department Stores and Le
Slide 78: Portfolio yield & ERV movements
Portfolio yield & ERV movements1 3 2 3 At 31 March 2017 NEY ERV Growth % NEY Yield Movement bps % H1 H2 FY H1 H2 FY Regional 4.9 1.3% 1.0% 2.3% 16 (4) 12 Local 5.4 1.3% 1.2% 2.5% 29 (1) 27 Multi-let 5.1 1.3% 1.1% 2.4% 22 (3) 18 Department Stores 5.9 0.4% (0.1%) 0.4% 4 (18) (15) and Leisure Superstor
Slide 79: Annualised rent & estimated rental value (ERV)
Annualised rent & estimated rental value (ERV) At 31 March 2017 Annualised Rents ERV Average Rent (Valuation Basis) £m1 £m (£psf) Group JVs & Funds Total Total Contracted2 ERV Regional 61 87 148 164 31.1 33.1 Local 90 28 118 126 24.9 26.1 Multi-let 151 115 266 290 28.0 29.6 Department Stores 36 - 36
Slide 80: Rent subject to open market rent review
Rent subject to open market rent review For the year to 31 March 2018 2019 2020 2021 2022 2018–20 2018–22 At 31 March 2017 £m £m £m £m £m £m £m Regional 13 17 12 18 13 42 73 Local 24 17 10 11 6 51 68 Multi-let 37 34 22 29 19 93 141 Department Stores - - - - - - - and Leisure Superstores 4 7 10 12 3
Slide 81: Rent subject to lease break or expiry
Rent subject to lease break or expiry For the year to 31 March 2018 2019 2020 2021 2022 2018–20 2018–22 At 31 March 2017 £m £m £m £m £m £m £m Regional 19 10 14 10 15 43 68 Local 8 7 10 9 11 25 45 Multi-let 27 17 24 19 26 68 113 Department Stores - - - - - - - and Leisure Superstores - - - - - - - So
Slide 82: Office expiries detail
Rent subject to lease break or expiry – Office expiries detail For year to 31 March 2018 2019 2020 2021 2022 2018–22 At 31 March 2017 £m £m £m £m £m £m 135 Bishopsgate 7 – – – – 7 1 Triton Square 2 – – – – 2 Near Term developments 9 – – – – 9 2&3 Finsbury Avenue – 2 – – – 2 1&2 Broadgate – 6 – – – 6
Slide 83: Contracted rental increases (cash flow basis)
Contracted rental increases (cash flow basis) For the year to 31 March 2018 2019 2020 2021 2022 2018–20 2018–22 At 31 March 2017 £m £m £m £m £m £m £m Expiry of rent free periods1 21 7 1 - - 29 29 Fixed uplifts (EPRA basis) 1 1 - - - 2 2 Fixed & minimum uplifts 1 1 1 1 1 3 5 Total 23 9 2 1 1 34 36 On
Slide 84: Total Property Return (as calculated by IPD)
Total Property Return (as calculated by IPD) Full Year to 31 March 2017 Retail Offices Total % British British British IPD IPD IPD Land Land Land Capital Return (1.7) (2.3) (0.6) (1.0) (1.2) (0.1) - ERV Growth 1.6 0.9 0.5 2.0 1.1 1.9 - Yield Expansion1 14 bps 12 bps 15 bps 13 bps 15 bps 4 bps Income
Slide 85: BL property performance vs IPD – 1 year
BL property performance vs IPD – 1 year Year ended 31 March 2017 Relative performance bps 100 50 60 70 40 10 0 -50 -100 -110 -150 -150 -200 Retail Offices Total Capital Returns Total Returns 85
Slide 86: BL property performance vs IPD – 5 years
BL property performance vs IPD – 5 years 5 years ended 31 March 2017 Relative performance bps p.a. 350 300 300 250 200 200 150 130 100 100 80 50 70 0 Retail Offices Total Capital Returns Total Returns 86
Slide 87: Superstores
Superstores 1 Standalone Superstores In Multi-let assets2 Total Exposure1,2,3 Store Size Number Valuation Capital Lease Number Valuation Capital Lease Number Valuation Capital Lease 4 4 4 ‘000 sq ft of (BL share) Value length of (BL share) Value length of (BL share) Value length stores £m psf stores
Slide 88: Recently completed & committed developments
Recently completed & committed developments At 31 March 2017 Sector BL Sq PC Current Cost to ERV Let & Share ft Calendar Value Come Under Year Offer % '000 £m1 £m2 £m3 £m 4 Kingdom Street Office 100 147 Q2 2017 151 18 9.5 7.0 Clarges Mayfair - Offices Office 100 51 Q2 2016 135 6 5.6 4.3 Glasgow Fort
Slide 89: Near term development pipeline
Near term development pipeline At 31 March 2017 Sector BL Sq Expected Current Cost to ERV Planning Share ft Start on Value Come Status Site % '000 £m £m1 £m2 Near term Pipeline 135 Bishopsgate Office 50 325 2017 107 55 9.4 Submitted Resolution 1 Triton Square Office 100 366 2018 161 200 23.3 to gran
Slide 90: Medium term development pipeline
Medium term development pipeline At 31 March 2017 Sector BL Sq ft Planning Share status % '000 Medium term Pipeline 2&3 Finsbury Avenue Office 50 563 Consented 1&2 Broadgate Office 50 375 Pre-submission Blossom Street Office 100 340 Consented 5 Kingdom Street1 Office 100 332 Consented Gateway Buildi
Slide 91: Residential development programme
Residential development programme At 31 March 2017 BL Sq Ft Total No. PC Current Cost to Sales Value Share No. Units to Date Value1 Come2 Exchanged to sell Units sell & not Completed1,3 % '000 £m £m £m £m Q4 Clarges, Mayfair 100 94 34 11 347 52 278 150 2017 The Hempel Q4 100 25 15 1 4 3 - 7 Phase 1
Slide 92: Estimated future development spend and capitalised interest
Estimated future development spend and capitalised interest At 31 March 2017 PC Cost to Come £m Calendar (excluding notional interest) – 6 mths breakdown Year Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 100 Liverpool Street Q4 2019 18 26 32 28 22 11 Speke (Leisure) Q2 2018 8 6 – – – – Clarges Mayfair
Slide 93: Central London development pipeline
Central London development pipeline Q1 2017 m sq ft 12.0 10.0 8.0 6.0 4.0 2.0 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Source: CBRE Completed Pipeline Pre-let Potential Speculative 10 year average new and under-construction take-up U/C Pre-let U/C – Speculative 10 year a
Slide 94: West End development pipeline
West End development pipeline Q1 2017 m sq ft 3.0 2.5 2.0 1.5 1.0 0.5 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Source: CBRE Completed Pipeline Pre-let Potential Speculative 10 year average new and under-construction take-up U/C Pre-let U/C – Speculative 10 year average d
Slide 95: City development pipeline
City development pipeline Q1 2017 m sq ft 6.0 5.0 4.0 3.0 2.0 1.0 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Source: CBRE Completed Pipeline Pre-let Potential Speculative 10 year average new and under-construction take-up U/C Pre-let U/C – Speculative 10 year average devel
Slide 96: Property Yields and interest rate yield gap
Property Yields and interest rate yield gap Retail and London Office Yields All Retail Central London Offices 10.0 8.0 NIY % 6.0 4.0 2.0 0.0 Source: IPD Yield Gap UK 10 Year Gilt Yield Property Yield vs 10 Year Gilt Yields IPD All Property Net Initial Yield 10 8 6 % 4 2 - (2) 1994 1997 2000 2002 200
Slide 97: London office market rental outlook
London office market rental outlook Prime London Office Rents £ psf 140 120 100 80 60 40 20 Actual Forecast 0 1990 1995 2000 2005 2010 2021 2016 West End City Source: CBRE (historic) and Average Agents' Consensus (including PMA Spring 17) for forecasts 97
Slide 98: Vacancy Central London
Vacancy Central London West End & City Vacancy Rates 20 18 16 14 12 10 8 5.6% 6 3.9% 4 2 0 1985 1990 1995 2000 2005 2010 Q1 2017 West End City Source: CBRE (historic) 98
Slide 99: Retail Portfolio Valuation – previous classification
Retail Portfolio Valuation – previous classification At 31 March Valuation Change %1 ERV Growth %2 NEY Yield Movement bps 2017 £m H1 H2 FY H1 H2 FY H1 H2 FY Shopping 3,167 (4.1) 0.7 (3.3) 1.6% 0.8% 2.4% 26 (4) 20 parks Shopping 2,276 (2.1) 0.8 (1.3) 1.3% 1.3% 2.6% 14 (3) 12 centres Superstores 632 (
Slide 100: Retail portfolio net yields – previous classification
Retail portfolio net yields1,2 – previous classification At 31 March 2017 EPRA EPRA topped Overall Net Net net initial up net initial topped up net equivalent reversionary 3 4 yield % yield % initial yield % yield % yield % Shopping parks 4.9 5.1 5.1 5.2 5.2 Shopping centres 4.5 4.7 4.7 5.0 5.1 Supe
Slide 101: Operational Performance – previous classification
Operational Performance – previous classification Year Ended Total multi-let March 2017 portfolio Shopping Parks Shopping Centres 240bps Footfall Ahead of market +0.4% -0.4% +0.0% ERV Growth in-store Sales 220bps Retailer Ahead of market +0.3% -0.4% +0.0% 150bps Ahead of market +2.4% +2.6% +2.4% Sou
Slide 102: Disclaimer
Disclaimer The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the year ended 31 March 2017. This presentation may contain certain “forward-looking” statements. Such statements reflect current views on, among other things, our markets