British Land Company PLC · LSE:BLND
British Land — FY2016 Earnings Presentation
93 slides from British Land's earnings presentation, May 16, 2016
Slide 1: Full Year Results Presentation
Full Year Results Presentation Full Year ended 31 March 2016 www.britishland.com @BritishLandPLC #BLFY2016 $BLND
Slide 2: Results Overview
Results Overview Chris Grigg Chief Executive
Slide 3: Results highlights
Results highlights • Another strong set of results • Underlying profits up 16% to £363m • NAV up 11% to 919p • Good performances across the business • Rising rental growth and strong lettings • 5.3% ERV growth 4
Slide 4: Well positioned for the future
Well positioned for the future • Resilience built into the company • Optionality in our development pipeline • A portfolio suited to future and current needs 5
Slide 5: A resilient business
A resilient business • Quality of income – Long leases – 9 years to first break – High occupancy (99%) – Modern buildings • Over £1.4bn of Retail assets recycled • Strength of financing – Gearing at 32% – Long average debt maturity – over 8 years – Weighted average interest rate at 3.3% 6
Slide 6: Optionality embedded into our development pipeline
Optionality embedded into our development pipeline • Current level of development commitment is modest Committed Near term Medium term • 180,000 sq ft of offices • 100 Liverpool Street • Meadowhall Leisure – 4 Kingdom Street • 1 Finsbury Avenue • 2–3 Finsbury Avenue – Clarges Mayfair • Plymouth Leis
Slide 7: Aligning our strategy to long term trends
Aligning our strategy to long term trends Key long term trends Implications for British Land Continued strength Globalisation of London Transforming impact Rise of omnichannel of technology Population growth Sharpened focus and urbanisation on end user Importance of Blurring of work infrastructure a
Slide 8: Placemaking lies at the heart of our business
Placemaking lies at the heart of our business Offices Retail Lifestyle orientated mixed use offices Multi-let lifestyle centres Campuses Regional Large, office-led mixed use Attracting visitors from a wide lifestyle campuses catchment for a planned trip Campus-lite Local Smaller clusters Fitting into
Slide 9: Our purpose and strategy is aligned around Places People Prefer
Our purpose and strategy is aligned around Places People Prefer Places People Prefer Places where people want to work, shop and live Strategic focus Placemaking Values Customer Orientation We Connect Right Places We Design Capital Efficiency We Enhance Expert People We Enliven 10
Slide 10: How Britain shops today
How Britain shops today 39% ofof food eaten out home in the UK 90% of shopping spend touches the physical store 28% ofuseBLF&B/leisure visitors Source: IPF/Conlumino Source: ONS/British Land surveys <20 mins average customer drive time to BL assets Convenience ranked #1 70% importance for a shopping
Slide 11: A well positioned multi-let portfolio
A well positioned multi-let portfolio Potential to reach 60% of the population BL regional centres BL local Annual footfall of centres 330m BL asset catchments Average rent to sales ratio 10% 90% of our car parking spaces are free 12
Slide 12: Our data shows both regional and local can succeed
Our data shows both regional and local can succeed Ealing Doncaster Off-peak Meadowhall Glasgow Fort Broadway Wheatley Regional Regional Local Local Size (‘000 sq ft) 1,500 510 470 232 Drive time (mins) 24 16 10 12 Frequency 33 pa 50 pa 70 pa 52 pa of visit Dwell time (mins) 118 78 69 55 Annualised
Slide 13: Attracting a more diverse occupier base
Attracting a more diverse occupier base Lettings and renewals by sector by rent Retailers taking space in 3% non-traditional locations 9% 9% 32% 8.0% Letting/renewals 13% ahead of ERV 16% 18% Fashion & Footwear DIY Food & Leisure Other Health & Beauty Electrical & Mobile Phone General Retail 14
Slide 14: Our Retail operational metrics remain strong
Our Retail operational metrics remain strong Total multi-let portfolio Regional Local +3.0% Footfall Ahead of market by +2.9% +3.2% 440 bps in-store sales +2.4% Retailer Ahead of market by +2.2% +3.2% 200 bps ERV growth 3.4% Ahead of market by 3.5% 3.3% 200 bps 15
Slide 15: Local: Providing convenience and quality at Old Market, Hereford
Local: Providing convenience and quality at Old Market, Hereford Footfall ERV Rent to sales +11.5% +4.9% 8% 16
Slide 16: Regional: Expanding and improving Glasgow Fort
Regional: Expanding and improving Glasgow Fort Footfall ERV Leisure/F&B +6.7% +4.7% 13% 17
Slide 17: Investment driving performance at Meadowhall
Investment driving performance at Meadowhall Proposed Meadowhall leisure extension New additions • On site with a £60m refurbishment • Attracting new occupiers • Substantial leisure extension planned 18
Slide 18: Delivering growth across our London campuses
Delivering growth across our London campuses >70% Our 3 campuses as a % of office assets Regent’s Place Broadgate Paddington Central 19
Slide 19: Regent's Place: A model for our campus approach
Regent’s Place: A model for our campus approach 13.3% ERV growth in FY2016 • A more diverse occupier base Type of occupier by rent • Significant rental growth 3% 3% – 25% ERV growth over last 12% three years 33% – Rent reviews 30% above previous passing rent 13% • Further growth from development 17%
Slide 20: Transforming Broadgate into a London destination
Transforming Broadgate into a London destination • Buildings for a wide range of occupiers • Increasing and diversifying retail offer • Significant public realm improvements 21
Slide 21: 100 Liverpool Street
100 Liverpool Street • Major development opportunity • Significant retail and leisure • Close proximity to Crossrail station 22
Slide 22: Significant potential at Paddington Central
Significant potential at Paddington Central • Progressing public realm improvements and campus completion • Due to top out at 4 Kingdom Street this month • New co-working space opening at 2 Kingdom Street • Rental growth reflecting our actions 23
Slide 23: A focus on campuses driving Office performance
A focus on campuses driving Office performance 9.6% • Our actions contributed ERV growth FY2016 45% of the valuation uplift – ERV growth a key driver • Lettings/renewals 6% ahead of ERV – Setting new rental highs at Leadenhall • Offices portfolio c10% reversionary • Rent reviews a more important elem
Slide 24: Canada Water
Canada Water • Roger Madelin appointed • Planning submission in 2017 25
Slide 25: Financial Review
Financial Review Lucinda Bell Chief Financial Officer
Slide 26: Highlights
Highlights FY to 31 March 2015 2016 Change % Underlying Profit (£m) 313 363 16.0 Underlying Earnings per Share (p) 30.6 34.1 11.4 Dividend per Share (p) 27.7 28.4 2.5 Valuation Performance 12.1% 6.7% EPRA Net Asset Value per Share (p) 829 919 10.9 LTV 35% 32% Total Accounting Return 24.5% 14.2% 27
Slide 27: Underlying profit up £50 million
Underlying profit up £50 million £m 27 (4) (6) 15 18 363 313 FY 2015 Developments Like for like Financing Investment Administrative FY 2016 rental growth activities activity expenses 28
Slide 28: Net rental income
Net rental income £m 40 (43) 15 23 Retail Retail 1.5% 1.4% 620 585 Offices Offices 4.2% 6.8% Total Total 2.3% 3.4% FY 2015 Developments Like for like Acquisitions Disposals FY 2016 rental growth 29
Slide 29: Financing Costs
Financing Costs Weighted average interest rate at 3.3% £m 27 (11) 10 (5) (201) (180) FY 2015 Financing activity Acquisitions Disposals Completion of FY 2016 developments 30
Slide 30: Income statement
Income statement FY to 31 March 2015 2016 Change % Net Rental Income (£m) 585 620 35 6.0 Fees & Other Income1 (£m) 17 17 - - Administrative Expenses1 (£m) (88) (94) (6) 6.8 Net Finance Costs (£m) (201) (180) 21 (10.4) Underlying Profit (£m) 313 363 50 16.0 Underlying Earnings per Share (p) 30.6 34.1
Slide 31: Valuation performance
Valuation performance FY to March 2016 Valuation Uplift Uplift Yield ERV NEY Weighting £bn £m % Compression Growth % % bps % Retail & Leisure 7.3 184 2.4 13 2.4 5.0 49 Offices & Residential 7.0 761 11.8 21 9.6 4.4 49 Canada Water 0.3 5 1.7 13 0.5 3.2 2 Total 14.6 950 6.7 17 5.3 4.7 100 - Of which St
Slide 32: Valuation growth drivers – Retail & Leisure
Valuation growth drivers – Retail & Leisure FY to March 2016 Valuation Uplift Uplift Yield Compression ERV Growth £bn £m % bps % H1 H2 FY H1 H2 FY H1 H2 FY Regional 2.8 86 2.8 0.2 3.0 11 4 15 1.7 1.8 3.5 Local 2.4 61 1.5 1.1 2.6 7 2 9 1.0 2.2 3.3 Multi-let 5.2 147 2.2 0.6 2.8 9 3 12 1.4 2.0 3.4 Dept
Slide 33: Valuation growth drivers – Offices & Residential
Valuation growth drivers – Offices & Residential FY to March 2016 Valuation Uplift Uplift Yield Compression ERV Growth £bn £m % bps % H1 H2 FY H1 H2 FY H1 H2 FY West End 3.9 458 8.1 4.6 12.8 24 3 28 4.1 5.6 9.9 City 2.9 288 8.5 2.4 11.1 16 (4) 12 4.8 4.3 9.3 Offices 6.8 746 8.3 3.7 12.1 20 - 21 4.4
Slide 34: Growth in diluted EPRA net asset value
Growth in diluted EPRA net asset value 34p (26p) Stamp duty change 13p (3p) 17p 68p 919p 829p Mar 15 Offices & Retail & Leisure Underlying Dividends Finance Mar 16 Residential Profit transaction costs 35
Slide 35: Strength of debt metrics
Strength of debt metrics Proportionally Consolidated 31 Mar 2015 31 Mar 2016 Loan to Value (LTV) 35% 32% Loan to Value pro-forma for 2012 bond conversion 32% 29% Weighted Average Interest Rate 3.8% 3.3% Interest Cover 2.6x 3.0x Average Maturity of Drawn Debt (years) 8.7 8.1 Group 31 Mar 2015 31 Mar
Slide 36: Development programme
Development programme £m Committed Near-Term Pipeline 1,600 • Current speculative commitment 1,400 Residential £0.5bn, 100% of costs fixed Retail • Speculative development 1,200 5 Kingdom commitment is 4%, limit of 10% Street & 1,000 Blossom • Expecting to commit to Street 100 Liverpool Street in ea
Slide 37: Future income growth
Future income growth Annualised Gross Rents Cash Flow Accounting Basis £m Basis £m Current Passing Rent 610 Contracted Uplifts 77 641 Total Contracted Rent 687 Developments – Under Construction 16 14 RPI linked leases 7 7 Reversion 47 39 Potential Rent in 5 Years excl Near Term Developments 757 701
Slide 38: Outlook
Outlook Chris Grigg Chief Executive
Slide 39: Outlook
Outlook • British Land is well positioned • Operationally and financially resilient • Significant development pipeline with optionality • A portfolio well positioned for longer term trends 40
Slide 40: Appendices
Appendices
Slide 41: Broadly balanced investment activity
Broadly balanced investment activity Investment Activity £1,257m Gross investment activity in 2016 Net Spend £m £484m £52m £648m (£267m) £21m 1,200 800 400 0 -400 -800 -1,200 -1,600 2012 2013 2014 2015 2016 Disposals Acquisitions & Capital Investment Net Spend Note: 2015 restated to exclude post per
Slide 42: Investment Activity
Investment Activity From 1 April 2015 Retail Offices Residential Total £m £m £m £m Development Spend 17 140 30 187 Capital Spend 99 19 2 120 Purchases 100 232 – 332 Sales (420) (139) (59) (618) Net Investment (204) 252 (27) 21 Gross Investment 636 530 91 1,257 43
Slide 43: Acquisitions
Acquisitions From 1 April 2015 Area Price Price Annual (Gross) (BL Share) Passing £m £m Rent £m2 Completed 1 Sheldon Square Offices London 210 210 10 Hercules Unit Trust unit purchase1 Retail Various 95 95 5 19–33 Liverpool Street Offices London 22 22 1 Chester, Broughton development land Retail Nor
Slide 44: Disposals
Disposals From 1 April 2015 Area Price Price Annual (Gross) (BL Share) Passing Rent £m £m £m1 Completed Parkgate Shopping Park, Rotherham Retail Yorkshire 170 120 6 39 Victoria Street Offices London 139 139 5 Birstall Shopping Park, Leeds Retail Yorkshire 107 31 2 PREF – France & Portugal Retail Eur
Slide 45: Strong operational performance
Strong operational performance +440bps BL footfall performance vs Experian benchmark Outperformance in 2016 Mar-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 UK Market (Experian Index) British Land 46
Slide 46: Continued ERV growth in Retail
3.4% Continued ERV growth in Retail Portfolio rental growth vs IPD Rental growth on multi-let assets Index Mar-13 = 100 110.0 107.5 105.0 102.5 100.0 97.5 95.0 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 BL Multi-let IPD All Retail IPD Prime IPD Secondary Source: IPD 47
Slide 47: BL property outperformance vs IPD – 5 years
BL property outperformance vs IPD – 5 years 5 years ended 31 March 2016 Outperformance bps pa 450 400 400 350 300 250 280 200 200 150 140 100 120 100 50 0 Retail Offices Total Capital Returns Total Returns 48
Slide 48: BL property outperformance vs IPD – 3 years
BL property outperformance vs IPD – 3 years 3 years ended 31 March 2016 Outperformance bps pa 300 250 270 200 150 150 130 100 50 60 50 60 0 Retail Offices Total Capital Returns Total Returns 49
Slide 49: Gross rental income
Gross rental income1,2 Accounting Basis £m 12 months to 31 March 2016 Annualised as at 31 March 2016 Group JVs & Funds3 Total Group JVs & Funds3 Total Regional 55 89 144 52 83 135 Local 100 26 126 97 26 123 Multi-let 155 115 270 149 109 258 Department Stores & Leisure 57 – 57 56 – 56 Superstores 11
Slide 50: Operating costs metric
Operating costs metric FY to 31 March (£m) 2015 2016 Property operating expenses 33 34 Administrative expenses 88 94 Net fees and other income (17) (17) Ground rent costs (3) (3) EPRA Costs (including direct vacancy costs) 101 108 Gross rental income 618 654 Ground rent costs (3) (3) Gross Rental In
Slide 51: Administrative Expenses
Administrative Expenses FY to 31 March (£m) 2015 2016 Personnel Costs 49 50 Share Scheme Costs 13 10 Other Administrative Expenses 23 33 Total – British Land1 85 93 Broadgate Estates 3 5 Total – Group 88 98 Capitalised Costs – (4) Total Administrative Expenses 88 94 1 Includes the Group's share of j
Slide 52: FY17 income statement guidance
FY17 income statement guidance – Rental Income – Virtually fully let portfolio with contracted gross rent of £636m as at 31 March 2016. – Like-for-like growth, given portfolio nearly full, will be driven by rental growth and full year impact of FY16 leasing. – Property outgoings likely to be similar
Slide 53: Reconciliation of underlying profit before tax
Reconciliation of underlying profit before tax FY to 31 March (£m) 2015 2016 IFRS Profit before tax attributable to shareholders of the Company 1,734 1,312 Net valuation movement (1,473) (861) Profit on disposal of investment and trading properties (32) (63) Deferred and current taxation of joint ve
Slide 54: EPRA balance sheet (proportional consolidation)
EPRA balance sheet (proportional consolidation) £m 31 March 15 Group JVs & 31 March 16 Funds Total properties 13,677 9,787 4,861 14,648 Adjusted net debt (4,918) (3,357) (1,408) (4,765) Other net liabilities (124) (101) (108) (209) EPRA Net Assets (undiluted) 8,635 6,329 3,345 9,674 Dilution impact
Slide 55: Reconciliation of EPRA NAV & NNNAV
Reconciliation of EPRA NAV & NNNAV 31 March 15 31 March 16 £m pence £m pence Balance Sheet (IFRS) Net Assets 8,565 840 9,619 935 Deferred tax arising on revaluation movements 13 5 Mark to market on effective cash flow hedges and 257 198 related debt adjustments Adjust to fully diluted on exercise of
Slide 56: Gross and net debt reconciliation
Gross and net debt reconciliation At 31 March 2016 Group JVs & Funds Less non-controlling £m £m £m interest £m Gross Debt (principal value) 3,552 1,665 (128) 5,089 IFRS adjustments: Issue costs and premia (18) (4) 1 (21) Fair value hedges 197 – – 197 Other Items 30 – – 30 IFRS gross debt 3,761 1,661
Slide 57: Adjusted net debt – proportionally consolidated
Adjusted net debt – proportionally consolidated (£bn) LTV LTV 35% 32% 0.3 (0.6) 0.3 4.9 (0.1) 4.8 Mar 15 Acquisitions Development & Disposals Operating Cashflow Mar 16 Net Debt Capex after cash dividends Net Debt 58
Slide 58: Debt maturity – group
Debt maturity – group (£m) 1,000 800 600 400 200 0 2017 2018 2019 2020 2021 2022 2023 1 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Year to March Debenture & loan notes (Secured) Bank Term Loan (Secured) US Private Placements (Unsecured) Convertible Bond (Unsecured) Bank RC
Slide 59: Debt maturity – joint ventures and funds
Debt maturity – joint ventures and funds1 (£m) 1,000 800 600 400 200 0 2017 2018 2019 2020 2021 2022 - 2026 2027-2036 Year to March JVs – Securitisations Funds – Bank drawn Funds – Bank undrawn JVs – Bank drawn 1 At British Land share (including share of HUT) 60
Slide 60: Debt Financing – Diverse profile
Debt Financing – Diverse profile • Over £1bn of debt financing activity Diverse Debt Profile1 (31 March 2016) since 31 March 2015 £0.5bn £0.6bn • WAIR reduced by 50 bps to 3.3% from 3.8% £0.6bn • £350m 0% convertible bonds due 2020 (issued June 2015) - Flexible settlement options £1.5bn - Competitiv
Slide 61: Number of shares
Number of shares Number of shares (m) 31 Mar 15 31 Mar 16 IFRS Basic Weighted Average 1,016 1,025 Underlying and IFRS Diluted Weighted Average 1,022 1,0891 EPRA Diluted1 Weighted Average 1,080 1,089 Period End 1,090 1,096 1 Including convertible dilution 62
Slide 62: Major property holdings
Major property holdings At 31 March 2016 BL Share Sq ft Rent Occupancy Lease (excl. developments under construction) % 000’s £m pa1 Rate % Length yrs3 2 1 Broadgate 50 4,724 226 99.3 7.8 2 Regent's Place 100 1,590 79 98.7 7.4 3 Paddington Central 100 806 33 99.8 7.8 4 Meadowhall Shopping Centre 50 1
Slide 63: Top occupiers & occupier split by industry
Top 20 occupiers & occupier split by industry As at 31 March 2016 % of Contracted Rent Occupier Split by Industry (%) UBS AG1 5.7% Tesco plc 5.6% Debenhams 5.3% Other 8% J Sainsbury plc 4.6% General Retail 18% DIY 6% Kingfisher (B&Q) 2.6% HM Government 2.2% TMT 7% Next plc 2.1% Virgin Active 1.8% Pr
Slide 64: Portfolio valuation by sector
Portfolio valuation by sector At 31 March 2016 Group JVs & Funds1 Total1 Change %2 £m £m £m H1 H2 FY Regional 1,052 1,792 2,844 2.8 0.2 3.0 Local 1,893 485 2,378 1.5 1.1 2.6 Multi-let 2,945 2,277 5,222 2.2 0.6 2.8 Department Stores & Leisure 1,004 1 1,005 3.4 2.5 6.0 Superstores 153 628 781 (1.7) (0
Slide 65: Retail Portfolio Valuation – Previous Classification basis
Retail Portfolio Valuation – Previous Classification basis 1 2 3 At 31 March 2016 Valuation Change % ERV Growth % NEY Yield Compression £m H1 H2 FY H1 H2 FY H1 H2 FY Shopping parks4 3,346 1.1 0.3 1.3 0.9 1.9 2.8 5 2 7 Shopping centres 2,205 3.8 0.9 4.7 2.0 1.9 3.9 14 5 18 Superstores 781 (1.6) (0.5)
Slide 66: Portfolio weighting
Portfolio weighting At 31 March 2015 2016 (current) 2016 (current) 2016 (pro-forma1) % % £m % Regional 20.2 19.4 2,844 19.0 Local 16.8 16.3 2,378 15.9 Multi-let 37.0 35.7 5,222 34.9 Department Stores & Leisure 7.1 6.9 1,005 6.7 Superstores 6.7 5.3 781 5.2 Solus & Other 2.8 2.3 333 2.2 Retail & Leisu
Slide 67: Portfolio net yields
Portfolio net yields1,2 At 31 March 2016 EPRA net EPRA topped Overall topped Net Net initial yield up net initial up net initial equivalent reversionary 3 4 % yield % yield % yield % yield % Regional 4.3 4.4 4.5 4.8 4.8 Local 4.8 5.1 5.2 5.2 5.2 Multi-let 4.5 4.7 4.8 5.0 5.0 Department Stores & Leis
Slide 68: Portfolio net yields – Previous Classification basis
Portfolio net yields1,2 – Previous Classification basis At 31 March 2016 EPRA net EPRA topped Overall topped Net Net initial up net initial up net initial equivalent reversionary 3 4 yield % yield % yield % yield % yield % Shopping parks 4.7 4.9 4.9 5.1 5.0 Shopping centres 4.5 4.6 4.7 4.9 4.9 Super
Slide 69: Portfolio yield & ERV movements
Portfolio yield & ERV movements1 3 2 3 At 31 March 2016 NEY ERV Growth % NEY Yield Compression bps % H1 H2 FY H1 H2 FY Regional 4.8 1.7 1.8 3.5 11 4 15 Local 5.2 1.0 2.2 3.3 7 2 9 Multi-let 5.0 1.4 2.0 3.4 9 3 12 Department Stores & Leisure 5.1 0.2 0.2 0.4 19 17 37 Superstores 5.2 (0.9) (0.3) (1.3)
Slide 70: Lease length and occupancy
Lease length and occupancy1 At 31 March 2016 Average Lease Length (yrs) Occupancy Rate (%) To Expiry To Break Occupancy Occupancy (underlying)2 Regional 7.9 6.9 95.8 97.8 Local 8.7 7.5 98.9 99.6 Multi-let 8.3 7.2 97.3 98.6 Department Stores & Leisure 19.7 19.6 100.0 100.0 Superstores 14.2 13.8 100.0
Slide 71: Annualised rent & estimated rental value (ERV)
Annualised rent & estimated rental value (ERV)1 At 31 March 2016 Annualised Rents (Valuation Basis) £m2 ERV £m Average Rent (£psf) Group JVs & Funds Total Total Contracted3 ERV Regional 54 84 138 155 32.8 35.9 Local 97 27 124 134 24.2 24.7 Multi-let 151 111 262 289 28.0 29.7 Department Stores & Leis
Slide 72: Rent subject to open market rent review
Rent subject to open market rent review1 At 31 March 2016 2017 2018 2019 2020 2021 2017–19 2017–21 For period to 31 March £m £m £m £m £m £m £m Regional 15 12 17 10 18 44 72 Local 11 24 21 12 11 56 79 Multi-let 26 36 38 22 29 100 151 Department Stores & Leisure – – – – – – – Superstores 5 4 8 12 14 1
Slide 73: Rent subject to lease break or expiry
Rent subject to lease break or expiry1 At 31 March 2016 2017 2018 2019 2020 2021 2017–19 2017–21 For period to 31 March £m £m £m £m £m £m £m Regional 13 12 9 13 9 34 56 Local 9 6 8 11 9 23 43 Multi-let 22 18 17 24 18 57 99 Department Stores & Leisure – 1 – – – 1 1 Superstores – – – – – – – Solus & O
Slide 74: ERV resetting to market
ERV resetting to market At 31 March 2016 2017 2018 2019 2020 2021 2017–19 2017–21 For period to 31 March £m £m £m £m £m £m £m ERV expiring – existing portfolio1 38 33 56 46 54 127 227 Developments – Under Construction 6 10 – – – 16 16 Total Rent Resetting to Market 44 43 56 46 54 143 243 excluding N
Slide 75: Contracted rental increases (cash flow basis)
Contracted rental increases (cash flow basis) At 31 March 2016 2017 2018 2019 2020 2021 2017–19 2017–21 For period to 31 March £m £m £m £m £m £m £m Expiry of rent free periods 49 10 3 – – 62 62 Fixed uplifts (EPRA basis) – 1 1 – – 2 2 Fixed & minimum uplifts in lieu 5 1 2 1 1 8 10 of rental growth T
Slide 76: Multi-let assets
Multi-let assets Regional – Breadth and depth of Retail and Local – Convenience and accessibility, with retail, social and civic space fitting into Leisure, attracting visitors from a wide catchment the daily life of local communities Bath Southgate Shopping Centre Basildon Mayflower Shopping Park L
Slide 77: Superstores
Superstores Stand-alone Superstores1 In Multi-let assets2 Total Exposure1,2,3 Valuation Capital WALL Number Valuation Capital WALL Number Valuation Capital WALL Store Size Number (BL share) Value to FB of (BL share) Value to FB of (BL share) Value to FB ‘000 SQ FT of stores £m psf yrs stores £m psf
Slide 78: Under Construction/completed in period developments
Under Construction/completed in period developments At 31 March 2016 Sector BL Sq ft PC Current Cost to ERV Let & Resi End Resi Sales Share Calendar Value Complete Under Value Exchanged Year Offer & Completed % '000 £m £m1 £m2 £m £m £m 5 Broadgate Offices 50 710 Completed 469 8 19.2 19.2 – – Yalding
Slide 79: Near term and medium term developments
Near term and medium term developments 1 At 31 March 2016 Sector BL Share Sq ft Start On Site Total Cost Status % '000 £m Near term Pipeline 100 Liverpool Street Offices 50 520 2017 279 Consented 2 1 Triton Square Offices 100 217 2017 370 Pre-submission 1 Finsbury Avenue Offices 50 303 2017 150 Cons
Slide 80: Residential development programme
Residential development programme At 31 March 2016 Sq Ft No. PC Date BL Current Cost End Sales Market /Status Share Value1 To Value3 Exchanged & Units come2 Completed '000 % £m £m £m £m Clarges Mayfair4 103 34 Q4 2017 100 286 88 456 259 Mixed use 103 34 286 88 456 259 The Hempel Phase 1 25 15 Q2 201
Slide 81: Estimated future development spend and capitalised interest
Estimated future development spend and capitalised interest At 31 March 2016 PC Pre-let Cost to complete £m Calendar ERV (excluding notional interest) – 6 mths Year £m Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 4 Kingdom Street 2017 – 35 20 4 4 1 – Clarges Mayfair 2017 59 31 10 3 3 2 – Glasgow Fort (
Slide 82: Estimated future development rental income
Estimated future development rental income (accounting basis) At 31 March 2016 PC Gross Rental Income (Accounting basis) Calendar £m Year Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Onsite developments Clarges Estate Q2 2016 Non-contracted – 5 5 5 5 4 Kingdom Street Q2 2017 Non-contracted – – 7 8 8 Total Off
Slide 83: 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 Source: IPD Property Yield vs 10 Year Gilt Yields Gap as multiple of gilt yield 3.0 1.0 -1.0 1990 1997 1999 2003 2005 2008 2010 2014 2016 Source: IPD/Bloomberg 84
Slide 84: Central London pipeline
Central London pipeline Q1 2016 m sq ft Already secured 10.0 planning: 2018: 60% 2019: 40% 8.0 6.0 4.0 2.0 0.0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Knight Frank Completed Pipeline Pre-let Potential Speculative 10 year average new/refurb take-up U/C Pre-let
Slide 85: West End development pipeline
West End development pipeline Q1 2016 Already secured m sq ft planning: 2018: 50% 2.5 2019: 30% 2.0 1.5 1.0 0.5 0.0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Knight Frank Completed Pipeline Pre-let Potential Speculative 10 year average new/refurb take-up U/C Pre
Slide 86: City development pipeline
City development pipeline Q1 2016 Already secured planning: 2018: 60% m sq ft 2019: 30% 6.0 5.0 4.0 3.0 2.0 1.0 0.0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Source: Knight Frank Completed Pipeline Pre-let Potential Speculative 10 year average new/refurb take-up U/C Pre
Slide 87: Vacancy Central London
Vacancy Central London West End & City Vacancy Rates % 20 18 16 14 12 10 8 6 4 2 0 1985 1990 1995 2000 2005 2010 Q1 2016 Source: CBRE West End Void Rate (Period end) City Void Rate (Period end) 88
Slide 88: 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 2011 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: CBRE (historic) and Average
Slide 89: Regent's Place Campus
Regent’s Place Campus © BROCK STREET TRITON STREET REGENT'S ‘TRITON SQUARE PLAZA ® O) © Se eyst0n 08 GREAT PORTLAND STREET necenr's PARK DRUMMONO STREET (o) S WARREN. STREET O) 20 Triton Street @) 1 Osnaburgh Street ® 1-8 Longford Street © UKPN Substation ® 1,4&7 Triton Square © 10 Brock Street (O)
Slide 90: Paddington Central Campus
Paddington Central Campus 91
Slide 91: Broadgate Campus
Broadgate Campus o7 r SHOREDITCH ORS gre HIM STREET er EARL street g @ _ SPITALFIELDS 5 ) LD STREET BRUSHFIE! LIVERPOOL STREET STATION ARTILLERY LANE Mo LS eee 7 MOORGATE STATION CONCOURSE ROSSRAIL Wve *RPOo, Ls Ree @ 1 Finsbury Avenue @ 2 Finsbury Avenue @) 3 Finsbury Avenue ® 1&2 Broadgate ® 3 Bro
Slide 92: Canada Water
Canada Water @) 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 * I4acres * Reached a conditional agreem
Slide 93: Disclaimer
Disclaimer The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the period ended 31 March 2016. This presentation may contain certain “forward-looking” statements. By their nature, forward-looking statements involve risk and uncertaint