British Land Company PLC · LSE:BLND
British Land — Merger or Acquisition (September 2009)
15 slides from British Land's merger presentation, Sep 18, 2009
Slide 1: Strategic Partnership for Broadgate
Strategic Partnership for Broadgate 18th September 2009
Slide 2: Executive Summary
Executive Summary • Proposed Joint Venture with Blackstone to own Broadgate, the largest City office estate • This transaction completes our strategy of re-balancing our portfolio undertaken in the last 9 months – Further reduces exposure to large single assets – Lowers the weighting of highly cycli
Slide 3: Re-balancing British Land Portfolio
Re-balancing British Land Portfolio • Broadgate reduces from 27% to 16% of portfolio • City offices reduces from 31% to 21% of portfolio BEFORE AFTER Retail 57% - Offices 41% (31% City) Retail 65% - Offices 32% (21% City) City (31%) City (21%) Retail Broadgate 16% Warehouses Broadgate 27% Retail (24
Slide 4: Joint Venture Overview
Joint Venture Overview • British Land and Blackstone will jointly own the securitised Broadgate Estate, plus 201 Bishopsgate & Broadgate Tower • Gross property price of £2.13bn reflecting 7.4% Net Equivalent Yield; 7.1% Net Initial Yield1 • Blackstone attributed £987m of third party debt and will pa
Slide 5: A Partnership to Drive & Share Returns
A Partnership to Drive & Share Returns • Broadgate offers strong income flow with 9 years to first break • Estate expected to require significant capital expenditure over the coming years – 31% of leases due for expiry over the next 5 years • British Land and Blackstone will invest capital to maximi
Slide 6: Balance Sheet Further Strengthened
Balance Sheet Further Strengthened £m 30 June 2009 Pro Forma1 Loan to Value – Group 47% 30% Loan to value ratio - inc. share of Funds & JVs 58% 53% Net Borrowings to Adjusted Capital & Reserves2 88% 42% Total Properties - inc. share of Funds & JVs £8.2bn £7.0bn Net Debt – inc. share of Funds & JVs3
Slide 7: Impact on Income Statement
Impact on Income Statement • Prospective dilution impact on underlying profits of c.£7m per quarter1 • Future property acquisitions expected to offset initial dilution. Average cost of facilities 48 bp over LIBOR • No change in expected dividend – 26p per share for 2009/10 • Interest cover remains c
Slide 8: Proposed Timetable
Proposed Timetable • Exchanged contracts to form the Joint Venture 18 September 2009 • Publication of the Circular and Notice of the General Meeting 21 September 2009 • General Meeting to approve the Proposed Transaction 8 October 2009 • Expected date of receipt of Regulatory Approvals 23 October 20
Slide 9: Benefits for Shareholders
Benefits for Shareholders • Improves the balance of our portfolio • Better risk profile • Reduces potential capital expenditure requirements • Strong JV partnership will enhance opportunities to develop and maximise returns from Broadgate • Substantially increases our capacity to seize new investmen
Slide 10: Appendix
Appendix Proposed JV for Broadgate
Slide 11: Pro Forma Balance Sheet
Pro Forma Balance Sheet £m 30 June 2009 Adjustment for Adjustments for Pro Forma 31 August 2009 Broadgate JV valuation of Broadgate Total properties (Group) 5,536 (75) (2,156) 3,305 Investments in funds and joint ventures 871 - 102 9731 Other non-current assets 65 - 209 274 Current assets less curre
Slide 12: Unsecured Group Debt Financial Covenants
Unsecured Group Debt Financial Covenants 175% maximum ratio for Net Borrowings to Adjusted 70% maximum ratio for Net Unsecured Borrowings to Capital & Reserves – 88% as at 30 June 2009, Unencumbered Assets – 9% as at 30 June 2009, 42% pro forma for Broadgate JV 9% pro forma for Broadgate JV Adjusted
Slide 13: Broadgate - Income Statement
Broadgate - Income Statement 3 months to Year ended Year ended Year ended 30 June 2009 31 March 2009 31 March 2008 31 March 2007 Gross rental income 44 182 159 165 Property outgoings (3) (7) (2) (2) Net rental income 41 175 157 163 Net financing costs (24) (92) (95) (103) Underlying profit before ta
Slide 14: Broadgate - August 2009 Valuation
Broadgate - 31 August 2009 Valuation • Valuation down 3.4% to £2.16bn in 2 months to 31 August 2009. Transaction values Broadgate at £2.13bn • JV will own the securitised Broadgate Estate, plus 201 Bishopsgate & Broadgate Tower Principal Occupiers Area Market Value as at (sq ft) 31 August 2009 (£m)
Slide 15: Disclaimer
Disclaimer This presentation and its contents may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part for any purpose without the consent of The British Land Company PLC (“British Land”). This presentation does not constitute o
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