British Land Company PLC · LSE:BLND
British Land — FY2014 Earnings Presentation
87 slides from British Land's earnings presentation, 2014
Slide 1: Full Year Results Presentation
WWW.BRITISHLAND.COM @BRITISHLANDPLC FULL YEAR RESULTS PRESENTATION FULL YEAR ENDED 31 MARCH 2014 #BLFY2014
Slide 2: Results Overview
RESULTS OVERVIEW Chris Grigg Chief Executive 2
Slide 3: Introduction
INTRODUCTION • Strong full year results – Our decisions and actions continue to drive performance – Strengthening markets • In 2010 we set out a clear plan – Substantial net investors in the market – Take on more risk, mainly through development – Increase exposure to London and South East • Continu
Slide 4: Performance Highlights
PERFORMANCE HIGHLIGHTS FY to 31 March 2014 % Change NAV per Share 688p +15.4% UK Valuation £12.0bn +8.3% Total Property Return 14.2% Underlying Profit Before Tax £297m +8.4% Dividend per Share 27.0p +2.3% Total Accounting Return 20.0% 4
Slide 5: Material Improvement in Valuations
MATERIAL IMPROVEMENT IN VALUATIONS Valuation Drivers £m TOTAL VALUATION MOVEMENT 640 £22m £90m £309m £639m 560 480 400 320 240 160 80 0 -80 H1 2012/13 H2 2012/13 H1 2013/14 H2 2013/14 Asset Management Development Yield Movement Total Valuation 5
Slide 6: Strong Operational Performance
STRONG OPERATIONAL PERFORMANCE • Continue to sign lettings/renewals ahead of ERV • Leasing activity added £24 million of new annual rent FY to 31 March 2014 Retail Office Total Lettings and renewals (000 sq ft) 1,674 632 2,306 Investment lettings/renewals vs ERV +4.9% +8.4% +6.3% Occupancy 98.5% 92.
Slide 7: Executing Smartly Ahead of Plan
EXECUTING SMARTLY AHEAD OF PLAN • Gross investment of £1.3bn focused on London and South East 1 Timely Investment • Placing proceeds invested ahead of plan; accretive to EPS and NAV • Completed 5 of our 2010 London developments on schedule; total estimated profits of £636m 2 Profitable development •
Slide 8: Key Retail and Leisure Highlights
KEY RETAIL AND LEISURE HIGHLIGHTS • Continued improvement in our retail returns – Total returns of 10.7%; further improvement in second half • Strength of operational metrics – Occupancy ahead; continued outperformance on rental growth and footfall • Successful developments – Whiteley and Glasgow Fo
Slide 9: Stronger Retail and Leisure Performance
STRONGER RETAIL AND LEISURE PERFORMANCE • Annual total returns of 10.7%; capital returns 4.6% Retail Valuation Drivers £m TOTAL VALUATION MOVEMENT 240 £(63)m £(35)m £96m £205m 160 80 0 -80 H1 2012/13 H2 2012/13 H1 2013/14 H2 2013/14 Asset Management & Development Yield Movement Total Valuation 9
Slide 10: Strong Retail Asset Management
STRONG RETAIL ASSET MANAGEMENT Increased Retail Lettings/Renewals Retail Leasing by Category Sq ft ‘000s By rent 290 GENERAL RETAIL 16% 106 1,384 FOOD, BEVERAGE 13% & LEISURE 1,005 FASHION 34% 16% HOMEWARES 9% 12% OTHER SUPERSTORES FY 2012/13 FY 2013/14 Development Investment 10
Slide 11: Broader and Higher Quality Occupier Demand
BROADER AND HIGHER QUALITY OCCUPIER DEMAND Leveraging Retailers taking Increasing Significant existing strong out of town restaurant and demand from retailer stores leisure offer home relationships improvement operators 11
Slide 12: Consistently Outperforming on Footfall
CONSISTENTLY OUTPERFORMING ON FOOTFALL • BL footfall flat over full year; improved over H2 +1.2% (outperforming market by 320 bps) British Land Footfall compared to Experian Market Benchmark Index Jan 2010 = 100 140 130 120 110 +1% pa 100 90 - -3% pa 80 70 60 2010 2011 2012 2013 2014 British Land UK
Slide 13: Consistently Outperforming on Rental Growth
CONSISTENTLY OUTPERFORMING ON RENTAL GROWTH • 1.5% ERV growth in the year, outperforming the market by 150 bps British Land Retail Rental Growth vs GDP Index 2001 = 100 130 120 110 100 90 80 Mar 01 Mar 02 Mar 03 Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 BL Retail I
Slide 14: Glasgow Fort Leisure Extension
UPGRADING OUR RETAIL PORTFOLIO THROUGH DEVELOPMENT – GLASGOW FORT LEISURE EXTENSION 46,000 sq ft cinema and restaurant extension Opened September 2013 Annual footfall up 8% to 12m Average peak dwell time up to 102 mins Catering spend increased more than 50% Average peak retail spend increased to £12
Slide 15: Whiteley Shopping Development
UPGRADING OUR RETAIL PORTFOLIO THROUGH DEVELOPMENT – WHITELEY SHOPPING New 321,000 sq ft shopping destination Over 20% valuation uplift Annual footfall of 4.7m Estimated annual sales of £90m; £5.8m annual rent roll On On site with Phase II 58,000 sq ft cinema and restaurant extension. Increases food
Slide 16: Reshaping Our Retail Portfolio: Selling More Mature Assets
RESHAPING OUR RETAIL PORTFOLIO SELLING MORE MATURE ASSETS • Taking advantage of market strength to sell more mature assets • Further £150m currently under offer/on the market UK Retail asset sales since 1 April 2013 No of Assets Sale Price Retail Parks 8 £167m Foodstores 6 £30m Shopping Centres 2 £1
Slide 17: Re-investing in Preferred Destinations
RESHAPING OUR RETAIL PORTFOLIO RE-INVESTING IN PREFERRED DESTINATIONS £502m of acquisitions Well-located, high quality destinations SouthGate, Bath on a fully let NIY of 5.7% Increased share in HUT to 60% on an effective NIY of 6% 26% equity share in portfolio of Sainsbury’s superstores Reversionary
Slide 18: Key Office and Residential Highlights
KEY OFFICE AND RESIDENTIAL HIGHLIGHTS • Successful completion of all our 2010 West End developments – Including 505,000 sq ft at Regent’s Place • Well timed acquisitions of Paddington and Shoreditch – Third major London campus at Paddington – Adds significant development potential • Achieved importa
Slide 19: Strong Office and Residential Performance
STRONG OFFICE AND RESIDENTIAL PERFORMANCE • Annual total returns of 19.4%; capital returns 15.5% Valuation Drivers £m TOTAL VALUATION MOVEMENT £85m £125m £213m £434m 400 320 240 160 80 0 -80 H1 2012/13 H2 2012/13 H1 2013/14 H2 2013/14 Asset Management Development Yield Movement Total Valuation 19
Slide 20: Demand from a Broader Range of Occupiers
DEMAND FROM A BROADER RANGE OF OCCUPIERS • 632,000 sq ft of leasing activity Office Leasing Activity by Category By rent • Investment lettings/renewals 8.4% ahead of ERV INSURANCE • Strong demand from TMT BANKING & FINANCE and insurance 15% 18% • Increasing interest from financial services - hedge 1
Slide 21: Leasing Activity Across Our Office Portfolio
LEASING ACTIVITY ACROSS OUR OFFICE PORTFOLIO • Strengthening letting interest in recent months • Over 150,000 sq ft leasing activity completed/under offer since year end including at Leadenhall and 10 Portman Square • First letting at Marble Arch House; £78.50 psf for a 10 year term Completed/under
Slide 22: Regent's Place – Great Letting Success
REGENT’S PLACE – GREAT LETTING SUCCESS 15.5% valuation uplift in year Nearly 200,000 sq ft of lettings Increased occupancy to 98.3% New rental high of £71 psf Standing investment ERVs up 11.8% over last 3 years Increasingly reversionary with average office rent of £46 psf Further refurbishment oppor
Slide 23: Paddington – Great Progress
PADDINGTON – GREAT PROGRESS Campus already increased in value by 11.1% Almost 40% of vacant space let/under offer at rents ahead of ERV Average office rent of £50 psf attractively priced Significant opportunities to develop as major West End campus Transfer our experience from Regent’s Place 23
Slide 24: Highly Profitable 2010 London Development Programme
HIGHLY PROFITABLE 2010 LONDON DEVELOPMENT PROGRAMME • £294m of additional profit generated in year; £45m to come • 73% let/under offer securing £54m pa of rent, 96% residential units sold/under offer £m £636m 45 £423m £359m 126 £257m 591 192 192 297 167 65 Mar 11 Mar 12 Mar 13 Mar 14 Profit Taken Pr
Slide 25: Progressing Our New London Developments
PROGRESSING OUR NEW LONDON DEVELOPMENTS • Added 1.1m sq ft of new potential development • Expect to commit to 4 Kingdom Street later this year • Progressing 5 Kingdom Street and Shoreditch plans; retain optionality • Estimated profit of c£375m; of which c£290m to come CLARGES THE ALDGATE YALDING 4 K
Slide 26: Broadgate – Implementing Our Long-Term Vision
BROADGATE – IMPLEMENTING OUR LONG-TERM VISION New long-term JV partner with GIC Evolving campus to broaden occupiers and uses Access enhanced by Crossrail in 2018 Development of 5 Broadgate and Broadgate Circle completing shortly Broadgate Circle creates a new food destination for Corporate the City
Slide 27: Financial Review
FINANCIAL REVIEW Lucinda Bell Finance Director 27
Slide 28: Highlights
HIGHLIGHTS FY to 31 March 2013 2014 Change Underlying Profit before Tax (£m) 274 297 8.4% Underlying Earnings per Share (p) 30.3 29.4 (3.0)% Dividend per Share (p) 26.4 27.0 2.3% Valuation Performance 1.0% 8.3% EPRA Net Asset Value per Share (p) 596 688 15.4% Total Accounting Return 4.6% 20.0% 28
Slide 29: Delivering on Strategic Objectives
DELIVERING ON STRATEGIC OBJECTIVES Offices & Residential Retail Total £m £m £m Placing investments 532 255 787 Developments - 2010, Recently 205 60 265 Committed & Replenishing Pipeline Retail Recycling*: Acquisitions 473 473 Disposals (391) (391) Europe Retail (147) (147) Net investments 737 250 98
Slide 30: Underlying Profit Bridge
UNDERLYING PROFIT BRIDGE £m 6 8 30 (18) (3) 297 274 FY 2013 Placing PC of 2010 Like for Like Prior Year Other FY 2014 Investments Developments Disposals 30
Slide 31: Net Rental Income Movement
NET RENTAL INCOME MOVEMENT £m 6 0 13 31 (26) (3) UK LikeLike for like for like UK Retail 3.0% 562 541 Offices 0.4% Total 2.2% FY 2013 Placing PC of 2010 Like for Retail Prior Year Other FY 2014 Investments Developments Like Recycling Disposals 31
Slide 32: Financing Costs
FINANCING COSTS £m 8 (5) 2 (1) (206) (202) FY 2013 Equity Placing PC of 2010 Prior Year Other FY 2014 Developments Disposals 32
Slide 33: Income Statement
INCOME STATEMENT FY to 31 March 2013 2014 Change Net Rental Income (£m) 541 562 3.9% Fees & Other Income (£m) 15 15 Administrative Expenses (£m) (76) (78) Net Finance Costs (£m) (206) (202) Underlying PBT (£m) 274 297 8.4% Operating cost ratio 15.3% 16.2% 33
Slide 34: Strong Valuation Performance
STRONG VALUATION PERFORMANCE FY ERV Valuation Uplift Growth NEY Weighting FY to March 2014 £bn % % % % Retail 6.9 4.4 1.5 5.6 53 Offices & Residential 5.1 14.5 47 - Of which Offices 4.9 14.4 5.8 5.2 44 Total 12.0 8.3 3.0 5.5 100 - Of which Standing Investments 10.9 6.6 3.0 5.5 - Of which Development
Slide 35: Valuation Growth Drivers – Retail & Leisure
VALUATION GROWTH DRIVERS – RETAIL & LEISURE Uplift % ERV Growth % Yield Compression (bps) Valuation FY to March 2014 £bn H1 H2 FY H1 H2 FY H1 H2 FY Retail parks 2.8 1.1 2.7 3.7 1.0 0.0 1.0 7 18 25 Superstores 1.3 2.0 0.7 2.8 0.5 0.2 0.7 5 3 9 Shopping centres 1.9 0.3 1.8 2.1 0.0 2.3 2.4 5 6 11 Depar
Slide 36: Valuation Growth Drivers – Offices & Residential
VALUATION GROWTH DRIVERS – OFFICES & RESIDENTIAL Uplift % ERV Growth % Yield Compression (bps) Valuation FY to March 2014 £bn H1 H2 FY H1 H2 FY H1 H2 FY City 2.1 3.6 8.1 11.8 1.2 6.6 7.9 9 30 39 West End 2.7 6.0 10.0 16.6 2.3 2.3 4.6 16 28 41 Provincial 0.1 4.0 6.6 10.9 0.0 0.0 0.0 23 24 47 Offices
Slide 37: Growth in EPRA Net Asset Value
GROWTH IN EPRA NET ASSET VALUE NAV (p) 29p 29p 36p (27p) (2p) 27p 688p 596p Mar 13 Developments Offices Retail Underlying Dividends Other Mar 14 Profit 37
Slide 38: Debt Financing – Diverse Funding Profile
DEBT FINANCING – DIVERSE FUNDING PROFILE • £1.5bn of new financing Diverse Debt Profile (31 March 2014) arranged • £785m revolving credit facility £0.6bn with maturity of 5 years and an £1.6bn initial margin of 115bps £1.0bn • £1.9bn of undrawn facilities for more than 2 years £0.7bn £0.9bn • No BL
Slide 39: Strength of Debt Metrics
STRENGTH OF DEBT METRICS Proportionally Consolidated 31 Mar 2013 31 Mar 2014 Loan to Value (LTV) 40% 40% Average Interest Rate 4.6% 4.1% Interest Cover 2.3x 2.5x Average Maturity of Drawn Debt (years) 9.9 8.7 Group 31 Mar 2013 31 Mar 2014 Loan to Value (LTV) 24% 29% Average Interest Rate 4.4% 3.5% I
Slide 40: Development Programme – Risk Management
DEVELOPMENT PROGRAMME – RISK MANAGEMENT • Current development commitment Development Commitment of £1.4bn £m • Residential commitment below 1,400 £500m limit, as previously set 1,200 • Development commitment limits: 1,000 – 15% of investment portfolio 800 600 – 10% on a speculative basis 400 • Capac
Slide 41: Future Income Growth
FUTURE INCOME GROWTH Cash Flow Basis Accounting Basis Annualised Gross Rents £m £m Current Passing Rent 557 Expiry of Rent-free Periods 51 584 Fixed, Minimum Uplifts 13 2010 Non-Completed Developments Pre-let 28 25 Recently Committed Developments Pre-let 7 5 Total Contracted 656 614 Developments – 2
Slide 42: Outlook
OUTLOOK Chris Grigg Chief Executive 42
Slide 43: Reshaping Our UK Portfolio to Deliver Long-Term Performance
RESHAPING OUR UK PORTFOLIO TO DELIVER LONG-TERM PERFORMANCE Development Investments & Disposals over last 4 yrs 10 Portman Square 5 Broadgate The Leadenhall Building Clarges Mayfair The Hempel £3.0bn 4&5 Kingdom St Marble Arch House Development 10-30 Brock Street 199 Bishopsgate Whiteley Shopping Sh
Slide 44: Repositioning Portfolio Around Key Trends
REPOSITIONING PORTFOLIO AROUND KEY TRENDS • Focused on creating “Places People Prefer” 1 Attractive environments • Well managed environments at our Office campuses and Retail destinations London as a • Committed more capital to London and South East: increased 2 leading global City weighting to over
Slide 45: Market Outlook
MARKET OUTLOOK • UK at early stages of an economic recovery – Differential between property bond yields historically wide • Positive about long-term prospects for London – Occupational demand picking up and supply remains constrained – Performance to be driven primarily by rental growth – Prime resi
Slide 46: Our Priorities
OUR PRIORITIES • Focused on driving rental growth • Progressing our new development programme • Continue to reshape our Retail portfolio • More balanced on acquisitions and disposals 46
Slide 47: Summary
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Slide 48: Appendices
APPENDICES 48
Slide 49: BL UK Property Returns vs IPD – 1 Year
BL UK PROPERTY RETURNS VS IPD – 1 YEAR Year ended 31 March 2014 bps 250 240 200 150 140 100 50 80 60 60 40 - Retail Offices Total Capital Returns Total Returns 49
Slide 50: BL UK Property Returns vs IPD – 3 Years
BL UK PROPERTY RETURNS VS IPD – 3 YEARS 3 years ended 31 March 2014 bps pa 600 500 480 400 300 340 200 250 190 100 130 140 - Retail Offices Total Capital Returns Total Returns 50
Slide 51: EPRA Net Debt – Proportionally Consolidated
EPRA NET DEBT – PROPORTIONALLY CONSOLIDATED £bn LTV 40% LTV 40% £2.0bn Available £2.1bn 1.0 Facilities Available 0.3 0.2 Facilities (0.6) (0.3) 4.9 4.3 Mar 13 Acquisitions Disposals Development & Operating Dividends Mar 14 Net Debt Capex Cashflow Net Debt 51
Slide 52: Reconciliation of Underlying Profit Before Tax
RECONCILIATION OF UNDERLYING PROFIT BEFORE TAX 12 months to 31 March (£m) 2013 2014 IFRS Profit before tax 260 1,110 Net valuation movement (includes disposals) (26) (873) Deferred and current taxation of joint ventures & funds (3) 5 Amortisation of intangible assets 1 - Capital financing costs 35 5
Slide 53: Gross Rental Income – Sectoral
GROSS RENTAL INCOME1 – SECTORAL 12 months to Annualised as at 31 March 2014 31 March 2014 (Accounting Basis) £m Total Total Retail parks 150 159 Superstores 72 71 Shopping centres 115 103 Department stores 33 33 Leisure 29 29 Retail 399 395 City 89 87 West End 84 93 Provincial 6 6 All Offices 179 18
Slide 54: Operating Costs Metric
OPERATING COSTS METRIC 12 mths to 31 March (£m) 2013 2014 Property outgoings 13 21 Administrative expenses 72 72 Share of joint ventures and funds expenses 17 20 Less: Performance & management fees (from joint ventures & funds) (10) (10) Other fees and commission (5) (5) Ground rent costs (1) (2) EP
Slide 55: Reconciliation of EPRA NAV & NNNAV
RECONCILIATION OF EPRA NAV & NNNAV As at 31 Mar 13 31 Mar 14 £m Pence £m Pence Balance Sheet (IFRS) Net Assets 5,687 568 7,117 697 Deferred tax arising on revaluation movements 14 6 Mark to market on effective cash flow hedges and 198 173 related debt adjustments Adjust to fully diluted on exercise
Slide 56: EPRA Balance Sheet (Proportional Consolidation)
EPRA BALANCE SHEET (PROPORTIONAL CONSOLIDATION) JVs & £m Mar 13 Group Funds Mar 14 Total properties 10,499 7,194 4,846 12,040 Net debt (4,266) (2,877) (2,013) (4,890) Other net assets (liabilities) (4) 76 (199) (123) EPRA Net Assets 6,229 4,393 2,634 7,027 Loan to Value (LTV)1 40% 29% 40% Average in
Slide 57: Debt Maturity – Group
DEBT MATURITY – GROUP £m 1,200 1,000 800 600 400 200 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Year to 31 March BL Undrawn Facilities BL Drawn Facilities Convertible Bonds Private Placements Debentures & Loan Notes Briti
Slide 58: Debt Maturity – Joint Ventures and Funds
DEBT MATURITY – JOINT VENTURES AND FUNDS1 £m 1,200 1,000 800 600 400 200 0 2015 2016 2017 2018 2019 2020-2024 2025-2037 Year to 31 March JV – Bank drawn Funds – Bank drawn JV & Funds – Bank undrawn JV - Securitisations 1 At British Land share 58
Slide 59: Gross and Net Debt Reconciliation
GROSS AND NET DEBT RECONCILIATION As at 31 March 2014 £m Gross Debt (principal value) 5,198 IFRS adjustments: Issue costs and premia (15) Fair value hedges 62 Other Items 39 Gross debt (IFRS basis) 5,284 Market value of derivatives 103 Cash & liquid investments (325) Net debt (IFRS basis) 5,062 EPRA
Slide 60: Investment Activity Reconciliation
INVESTMENT ACTIVITY RECONCILIATION Office/Resi Retail Total Net investments per Delivering on Strategic Objectives Slide 737 250 987 Placing investment completed in FY13 (40) (226) (266) Development capex (167) (60) (227) Residential sales (142) - (142) Other net investment (29) - (29) Net acquisiti
Slide 61: Investment Activity
INVESTMENT ACTIVITY FY14 Annualised Net Net Spend Net Rent Rent £m £m £m Placing investments 787 31 40 Retail Recycling1: Acquisitions 473 7 22 Disposals (391) (7) (26) Europe Retail (147) (3) (9) Net investments 722 28 27 1 Including HUT units at GAV and interest in Superstore Portfolio 61
Slide 62: Number of Shares
NUMBER OF SHARES Number of shares (m) Mar 13 Mar 14 Basic Weighted Average 895 999 Period End 986 1,008 Diluted Weighted Average 901 1,004 Period End 1,001 1,021 62
Slide 63: Major Property Holdings
MAJOR PROPERTY HOLDINGS As at 31 March 2014 BL Sq ft Rent Occupancy Lease 1 (excl. developments under construction) Share % 000’s £m pa Rate % Length yrs3 2 1 Broadgate, London EC2 50 3,963 177 96.8 7.2 2 Regent's Place, London NW1 100 1,589 70 98.3 9.4 3 Meadowhall Shopping Centre, Sheffield 50 1,4
Slide 64: Top Customers & Customer Split by Industry
TOP 20 CUSTOMERS & CUSTOMER SPLIT BY INDUSTRY As at 31 March 2014 % of Total Customer Split by Industry Contracted Rent Contracted Rent (%) Tesco plc 7.7 Sainsbury Group 6.0 2% 1% Debenhams 5.8 UBS AG 3.2 7% Home Retail Group 2.7 20% Kingfisher (B&Q) 2.7 8% HM Government 2.5 Next plc 2.4 13% Virgin
Slide 65: Portfolio Weighting
PORTFOLIO WEIGHTING As at 31 March 2013 2014 (Current) 2014 (Current) 2014 % % £m (Pro forma)¹ Retail parks 24.5 23.1 2,767 21.5 Superstores 12.6 11.1 1,321 10.1 Shopping centres 17.6 15.6 1,862 14.4 Department stores 4.6 4.7 564 4.3 Leisure 3.0 2.8 338 2.6 Retail 62.3 57.3 6,852 52.9 City 17.1 17.1
Slide 66: Portfolio Valuation by Sector
PORTFOLIO VALUATION BY SECTOR Total1 Change %2 As at 31 March 2014 £m H1 H2 FY Retail parks 2,767 1.1 2.7 3.7 Superstores 1,321 2.0 0.7 2.8 Shopping centres 1,862 0.3 1.8 2.1 Department stores 564 6.5 11.1 18.3 Leisure 338 2.0 8.4 10.5 Retail3 6,852 1.5 2.9 4.4 City 2,038 3.6 8.1 11.8 West End 2,720
Slide 67: Portfolio Net Yields
PORTFOLIO NET YIELDS1 As at 31 March 2014 EPRA Net Initial EPRA Topped- Overall Topped- Net Net (excl. developments) Yield % Up Net Initial Up Net Initial Reversionary Equivalent 2 Yield % Yield%3 Yield % Yield % Retail parks 5.3 5.6 5.7 5.6 5.7 Superstores 4.9 5.1 5.1 5.0 5.1 Shopping centres 5.3 5
Slide 68: Lease Length and Occupancy
LEASE LENGTH AND OCCUPANCY As at 31 March 2014 Average Lease Length (yrs) Occupancy Rate (%) (excl. developments) To Expiry To Break Occupancy Occupancy (underlying)1 Retail parks 9.1 8.2 96.8 98.3 Superstores 15.0 14.8 100.0 100.0 Shopping centres 9.1 8.1 95.6 97.3 Department stores 26.6 23.3 100.0
Slide 69: Annualised Rent & Estimated Rental Value (ERV)
ANNUALISED RENT & ESTIMATED RENTAL VALUE (ERV) As at 31 March 2014 Annualised Rents ERV £m Average Rent (£psf)2 (excl. Developments) (Valuation Basis) £m1 Total Total Contracted ERV Retail parks 157 165 24.5 24.6 Superstores 68 70 21.8 21.6 Shopping centres 104 112 30.2 31.9 Department stores 30 24
Slide 70: Rent Subject to Open Market Rent Review
RENT SUBJECT TO OPEN MARKET RENT REVIEW 12 months to 31 March (£m) 2015 2016 2017 2018 2019 2015-17 2015-19 Retail parks 19 18 16 22 25 53 100 Superstores 15 20 5 4 8 40 52 Shopping centres 9 14 14 15 10 37 62 Department stores 2 5 - - - 7 7 Leisure - - - - - - - Retail 45 57 35 41 43 137 221 City 1
Slide 71: Rent Subject to Lease Break or Expiry
RENT SUBJECT TO LEASE BREAK OR EXPIRY 12 months to 31 March (£m) 2015 2016 2017 2018 2019 2015-17 2015-19 Retail parks 7 8 6 12 13 21 46 Superstores - - - - - - - Shopping centres 8 7 9 9 5 24 38 Department stores - - - 1 - - 1 Leisure - - - - - - - Retail 15 15 15 22 18 45 85 City 1 1 19 4 17 21 42
Slide 72: ERV Resetting to Market
ERV RESETTING TO MARKET 12 months to 31 March (£m) 2015 2016 2017 2018 2019 2015-17 2015-19 ERV Expiring – existing portfolio1 19 21 45 33 46 85 164 Speculative developments – City 11 - - - - 11 11 Speculative developments – West End - 2 6 - - 8 8 Speculative developments – Retail 1 1 - - - 2 2 Tota
Slide 73: Contracted Rental Increases (Cash Flow Basis)
CONTRACTED RENTAL INCREASES (CASH FLOW BASIS) 12 months to 31 March (£m) 2015 2016 2017 2018 2019 2015-17 2015-19 Expiry of rent free periods – 33 10 8 - - 51 51 Standing portfolio Expiry of rent free periods – 3 3 21 5 3 27 35 Development pre-lets Fixed uplifts (EPRA basis) - 1 - - 1 1 2 Fixed & mi
Slide 74: 2010 Development Programme
2010 DEVELOPMENT PROGRAMME As at 31 March 2014 Sector BL Share Sq ft PC Current Cost to ERV Pre-let Resi End Calendar Value Complete Value % '000 Year £m £m1,6 £m2 £m £m3 10 - 30 Brock Street, Regent’s Place4 Mixed Use 100 505 Completed 402 3 20.5 19.1 118 10 Portman Square Offices 100 134 Completed
Slide 75: Recently Committed Development Programme
RECENTLY COMMITTED DEVELOPMENT PROGRAMME As at 31 March 2014 Sector BL Share Sq ft PC Current Cost to ERV Pre-let Resi End Calendar Value Complete Value % '000 Year £m £m1,4 £m2 £m £m3 Milton Keynes, Kingston Centre Retail 50 21 Completed 5 - 0.3 0.3 - 6 Old Market, Hereford Retail 100 305 2014 66 1
Slide 76: Near-Term and Prospective Developments
NEAR-TERM AND PROSPECTIVE DEVELOPMENTS As at 31 March 2014 BL Share Sq ft Total Cost Status % '000 £m1 Near-term Pipeline Blossom Street, Shoreditch Mixed Use 100 322 164 Pre-submission 2 5 Kingdom Street Offices 100 240 162 Consented 4 Kingdom Street Offices 100 147 99 Consented Glasgow Fort (Resta
Slide 77: Residential Development Programme
RESIDENTIAL DEVELOPMENT PROGRAMME No. BL Mar 14 Cost Sales Sq Ft Market PC Date/ Share Value To come1 Total Exchanged As at 31 March 2014 '000 Units Status % £m £m £m £m Mixed-use: The Triton Building2 126 94 Completed 100% 22 1 23 102 Marble Arch House 11 10 Completed 100% 5 1 6 17 3 Clarges Mayfai
Slide 78: Estimated Future Development Spend and Capitalised Interest
ESTIMATED FUTURE DEVELOPMENT SPEND AND CAPITALISED INTEREST PC Prelet ERV Cost to complete £m (excluding notional interest) As at 31 March 2014 Calendar Year £m Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 The Leadenhall Building 2014 9.0 33 15 4 11 5 Broadgate 2015 19.2 13 18 Total 2010 Programme: 28.
Slide 79: Estimated Future Development Rental Income
ESTIMATED FUTURE DEVELOPMENT RENTAL INCOME (ACCOUNTING BASIS) PC Gross Rental Income (Accounting Basis)1 As at 31 March 2014 Calendar Year Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 5 Broadgate Q1 2015 Contracted - 15 18 18 18 The Leadenhall Building Q2 2014 Contracted 5 7 7 7 7 Non-contracted - 8 8 8 8 Bro
Slide 80: UK Property Market – Yield Gap vs 10 Year Gilts
UK PROPERTY MARKET – YIELD GAP VS 10 YEAR GILTS % 12 UK 10 Year Gilt Yield IPD All Property Net Initial Yield 10 8 6 4 2 0 1990 1992 1993 1994 1995 1996 1997 1999 2000 2001 2002 2003 2004 2006 2007 2008 2009 2010 2011 2012 Yield gap % 5 3 1 (1) (3) (5) 80
Slide 81: London Office Market Development Completions
LONDON OFFICE MARKET DEVELOPMENT COMPLETIONS Central London Development Completions m sq ft 12.0 10.0 8.0 6.0 4.0 2.0 0.0 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Completed Under construction Demolition Planning granted 10 yr average Grade A take-up 10 yr average ta
Slide 82: London Office Market Rental Outlook
LONDON OFFICE MARKET RENTAL OUTLOOK Rental Growth Driven by Imbalance Between Supply and Demand Prime London Office Rents £ psf 140 West End City 120 100 80 60 40 20 Actual Forecast - 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Source: CBRE (historic) and Average Agent
Slide 83: London Residential Market
LONDON RESIDENTIAL MARKET Residential new unit sales in Prime Residential Annual Price Growth in Central London Prime Central London 14% 1800 1600 12% 1400 10% 1200 8% 1000 800 6% 600 4% 400 2% 200 0 0% 2010 2011 2012 2013 Q1 2014 2012 2012 2012 2013 2013 2013 2014 Annualised Source: Molior (Westmin
Slide 84: Regent's Place Campus
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Slide 85: Paddington Central Campus
PADDINGTON CENTRAL CAMPUS Key: BL ownership Non BL ownership Multi-let offices Multi-let offices 268,000 sq ft 143,000 sq ft 200 residential units Development sites sold on long leases; (355,000 sq ft) + retail at ground floor Crossrail box below (80,000 sq ft) FOUR KINGDOM STREET New Hammersmith &
Slide 86: Broadgate Campus
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Slide 87: Disclaimer
DISCLAIMER The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the year ended 31 March 2014. This presentation may contain certain “forward-looking” statements. By their nature, forward-looking statements involve risk and uncertainty