Hammerson plc · LSE:HMSO
Hammerson — H1 2019 Earnings Presentation
98 slides from Hammerson's earnings presentation, September 2019
Slide 1: Investor briefing
Investor briefing September 2019 Sensory Garden, Westquay, Southampton
Slide 2: Agenda
Agenda 01 Half-year overview 02 Half-year financial results 03 Portfolio overview 04 Summary and Q+A Appendices 2
Slide 3: Facing up to the challenges
Half-year overview Facing up to the challenges Debt reduction remains a key priority The Oracle, Reading 75% of Italie Deux and Italik sold for €473m (£423m) On pro forma basis net debt reduced to £3.1bn, Gearing 61%, LTV 37%(1) Earnings drag from disposals, dividend unchanged EPS 14.0p (-7.3%), DPS
Slide 4: Continued focus on debt reduction, active portfolio management and multi-use development
Half-year overview Continued focus on debt reduction, active portfolio management and multi-use development Capital Optimised Operational efficiency portfolio excellence Reduce debt Exit Retail Parks and Manage the structural pursue portfolio-wide shift in retail disposals Establish City Quarters 4
Slide 5: Debt reduction remains a key priority
Half-year overview Debt reduction remains a key priority Reduce debt and portfolio-wide disposals • Contracts exchanged with AXA for 75% of Italie Deux and the forward sale of the Italik extension for €473m (£423m), representing 8.5% discount to Capital December 2018 book value, NIY 4.1% efficiency
Slide 6: Manage the structural shift in retail
Half-year overview Manage the structural shift in retail – actively repurposing space, maintaining vibrancy Softer UK leasing metrics, stronger in France and Ireland UK flagships over last 18 months: • Passing rents -6.2% UK flagships H1 2019: Operational • Tenant restructuring a continuing theme; 4
Slide 7: 2019 half-year financial results
2019 half-year financial results Victoria, Leeds
Slide 8: H1 headline results
2019 half-year results H1 headline results Income statement 30 June 2019 30 June 2018 Change Net rental income (£m) 156.6 178.5 (12.3%) Adjusted profit (£m) 107.4 120.0 (10.5%) Adjusted EPS (p) 14.0 15.1 (7.3%) Interim dividend (p) 11.1 11.1 — Balance sheet 30 June 2019 31 December 2018 Change Portf
Slide 9: Portfolio valuation summary
2019 half-year results Portfolio valuation summary See appendices slides 56-57 Sector H1 2019 H1 2019 Value at Portfolio capital return(1) revaluation 30 June 2019(2) weighting(2) change % £m £m % Flagship destinations UK (9.1) (266) 2,655 28 France (3.9) (71) 1,820 19 Ireland (3.2) (30) 948 10 Prem
Slide 10: H1 2019 components of valuation change
2019 half-year results H1 2019 components of valuation change Components of capital return in H1 2019, total portfolio (%)(1) 5% 4.2% 4.5% 0.6% 0.2% 0% -0.2% -0.4% -0.5% -0.7% -2.4% -2.3% -2.5% -3.0% -3.2% -3.9% -3.8% -3.9% -3.6% -5% -4.9% -4.4% -6.0% -6.7% -9.1% -10% -9.8% -10.9% -15% UK flagship d
Slide 11: Credit ratios
2019 half-year results Credit ratios See appendices slides 59-63 30 June 2019 Internal 30 June 2019 31 Dec 2018 (Pro forma)(1) guidelines Net debt £3,055m — £3,447m £3,408m Gearing 61% <85% 69% 63% LTV – headline(2) 37% <40% 40% 38% LTV – fully proportionally consolidated(2) 43% <45% 46% 43% Cash an
Slide 12: LfL NRI movements
2019 half-year results LfL NRI movements LfL NRI movements across the portfolio (%) UK Flagships -6.8 Ireland Flagships -7.4 France Flagships 0.1 UK Retail Parks 1.0 (1) Premium Outlets 11.1 Group -0.1 -8 -6 -4 -2 0 2 4 6 8 10 12 1 Value Retail 13.9%, VIA 4.1% 12
Slide 13: Flagships LfL NRI analysis
2019 half-year results Flagships LfL NRI analysis H1 2019 LfL NRI analysis UK flagships Ireland flagships France flagships Tenant restructuring -1.8% -4.1% -1.3% Leasing(1) -0.6% 1.0% 2.2% Void costs -1.4% -0.5% Surrender premiums -0.2% -2.1% -0.7% Marketing -0.6% 0.1% Car park, commercialisation -2
Slide 14: EPS walk
2019 half-year results EPS walk H1 2019 EPS walk (pence per share) 16.0 15.0 (1.9) 14.0 0.3 1.0 13.0 (0.8) 15.1 0.5 (0.2) 12.0 14.0 11.0 10.0 H1 2018 Net disposals LfL NRI Net admin Premium outlets Interest FX, tax and H1 2019 (1) other 1 Other includes change in NRI due to developments (-0.1p) and
Slide 15: Guidance
2019 half-year results Guidance Debt reduction phase Future 2021+ 2019-2020 Net disposals Negative Neutral LfL NRI Negative Positive Development and other Neutral Positive Interest, net admin and Positive Positive other Premium outlets Positive Positive EPS Negative Positive 15
Slide 16: Portfolio overview
The Oracle, Reading Portfolio overview
Slide 17: Agenda
2019 half-year overview Agenda 01 UK flagships 02 Premium outlets 03 France 04 Ireland 05 Sustainability and City Quarters Westquay, Southampton 17
Slide 18: UK flagship destinations H1 2019 operational update
UK flagship destinations H1 2019 operational update UK flagship destinations H1 2019 H1 2018 Occupancy (%) 96.4 97.2 Leasing activity (£m) 4.4 6.8 Leasing vs. ERV (%)(1) -4 +5 Leasing vs. previous passing (%)(1) -8 +5 In-store retail sales (%)(2) -2.0 -2.5 Footfall (%)(3) +0.5 -1.6 Cabot Circus, Bri
Slide 19: What is happening to UK flagship rental income
What is happening to UK flagship rental income: 6.2% decline in passing rent over last 18 months, excluding disposal of 50% of Highcross Decline primarily driven by temporary leasing, tenant restructuring, car parking and vacancy Principal leasing more resilient and directed towards winning categori
Slide 20: Passing rent analysis – 18 months to 30 June 2019
UK flagship destinations Passing rent analysis – 18 months to 30 June 2019 Movement in passing rent – 31 December 2017 to 30 June 2019 (£m) 180 175 170 (14.3) 165 160 175.7 (6.1) 155 (5.5) -6.2% 150 161.4 4.8 (4.2) 145 1.0 151.4 140 (1) Dec-17 Highcross (50%) Dec-17 (post Vacancy/Temp Tenant Other R
Slide 21: Managing the challenge from tenant restructuring
UK flagship destinations Managing the challenge from tenant restructuring See appendices slides 51-53 Cumulative restructuring impact on rent - Q1 2018 – Q2 2019 (£m) Key stats since January 2018(1) 18.0 • 100 units affected by restructuring • £5.5m run rate of rent lost (1.6% of 16.0 passing rent)(
Slide 22: Passing rent declines driven by high street fashion
UK flagship destinations Passing rent declines driven by high street fashion See appendices slides 71-72 UK flagship destinations leasing(1) vs previous passing rent by category - H1 2019 (£’000s) 250 Type £’000s No. % vs previous passing 200 High street fashion 1,681 13 -25% 150 Non-fashion consume
Slide 23: Shifting the mix, leasing to winners
UK flagship destinations Shifting the mix, leasing to winners See appendices slide 75 Category Current Future New Rent/ Near-term mix(1) mix(1) leasing(1) sq ft rental levels Department stores 39% c.28% nil c.£10/sq ft High street fashion (traditional) 15% c.10% nil c.£30/sq ft F&B 9% c.12% 31% c.£4
Slide 24: Attracting winning brands
UK flagship destinations Attracting winning brands Principal leases - non fashion Principal leases – F&B Temporary leases Total rent - £1.6m(1) Total rent - £0.5m(1) Total rent - £1.1m(1) The White Company, Westquay Stack & Still, Kitty Café, Silverburn Grand Central LEGO, Westquay and Bullring Tand
Slide 25: Attracting an affluent audience looking for a 'big day out'
UK flagship destinations Attracting an affluent audience looking for a ‘big day out’(1) Growth Growth Dwell time (mins) 2016-2018 Party size 2016-2018 F&B 2017-2019 YTD 90 1.8 +7% Average spend +54% 85 1.7 80 +1% Dwell time +90% -6% 1.6 75 -4% Conversion +9ppts 1.5 70 65 1.4 2016 2017 2018 2016 2017
Slide 26: Footfall performance supported by operational excellence
UK flagship destinations Footfall performance supported by operational excellence Hammerson UK flagships footfall vs. national index three month moving average(1) 2% 1% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun -1% 2018 2019 -2% -3% -4% -5% Hammerson National Index Supe
Slide 27: Footfall supports retailers' omni-channel propositions
UK flagship destinations Footfall in our centres supports retailers’ omni-channel propositions 1. Drives online presence 2. Drives omni-channel sales Hammerson analysis shows typical post-opening Hammerson analysis June 2019 uplift in local web traffic(1) Customers online spending behaviour(2) +20-3
Slide 28: Premium outlets
Freeport Lisboa, Lisbon Premium outlets
Slide 29: Premium outlets H1 2019 operational update
Premium outlets H1 2019 operational update See appendices slides 84-93 Value Retail(1) VIA Outlets(1) H1 2019 H1 2018 H1 2019 H1 2018 GAV Hammerson share (£m) 1,931 1,762 659 620 Brand sales growth (%)(2) 11 6 10 6 Footfall growth (%)(2)(3) 7 2 8 0 Average sales density growth (%)(2) 8 3 7 5 Like-fo
Slide 30: Premium outlets – the drivers of success
Premium outlets Premium outlets – the drivers of success Premium outlets channel outperforms average Global tourism growth continues European sales growth during H1 2019(1) 16% Tax free sales(2) YoY growth(3) 14% 19% +14% 12% 10% 8% 14% 6% 4% 6% 2% 0% VIA sales growth Reported sales growth in Europe
Slide 31: France flagship destinations
France flagship destinations Les Terrasses du Port, Marseille
Slide 32: France flagship destinations H1 2019 operational update
France flagship destinations H1 2019 operational update See appendices slides 77-79 France flagship destinations H1 2019 H1 2018 Occupancy (%) 97.0 97.1 Leasing activity (£m) 2.8 3.6 Leasing vs. ERV (%) +4 +2 Leasing vs. previous passing (%) +5 +4 In-store retail sales (%)(1) +1.3 +2.9 Footfall (%)(
Slide 33: On-site extensions update
France flagship destinations On-site extensions update Les 3 Fontaines • Scheme revised to increase proportion of leisure and F&B • Food hall opening spring 2020, 100% pre-let • Opening of main phase Q2 2021 • Leisure phase opening mid 2023 • Good progress on pre-letting, now 39%(1) (Dec18: 23%) • C
Slide 34: Ireland flagship destinations
Summer Fest, Dundrum, Dublin Ireland flagship destinations
Slide 35: Ireland flagship destinations H1 2019 operational update
Ireland flagship destinations H1 2019 operational update See appendices slides 81-82 Ireland flagship destinations H1 2019 H1 2018 Occupancy (%) 99.5 98.9 Leasing activity (£m) 1.2 1.5 Leasing vs. ERV (%)(1) +4 +6 Leasing vs previous passing (%)(1) +12 +23 Footfall (%) +0.6 -3.0 Five Guys, Swords Pa
Slide 36: Significant potential in Irish portfolio
Ireland flagship destinations Significant potential in Irish portfolio See appendices slide 95 Near term repurposing Future developments Building 5 Cost €5m Target YOC Pavilions Pembroke Square 6% Phase 2 Phase 3 Cost €5m Dundrum Dublin Central Target YOC Stella Bowl (ex Hamleys) 7% 36
Slide 37: Sustainability and City Quarters
Rooftop Beehives, Silverburn, Glasgow Sustainability and City Quarters 37 The Goodsyard, London
Slide 38: Ambitious approach to sustainability underpins everything we do
Sustainability Ambitious approach to sustainability underpins everything we do We create destinations that deliver positive impacts economically, socially and environmentally Our target is to be net positive for carbon, resource use, water and waste by 2030 Significant reductions in resource usage d
Slide 39: Beyond retail
City Quarters Beyond retail See appendices slide 95 City Quarters potential Martineau Galleries, Birmingham 100,000m2 workspace 1,300 residential units 100 acres 200 hotel rooms Restaurants, cafés, shops and high quality public realm 6,600 residential units 1,600 hotel rooms 300,000m2 work space 9 p
Slide 40: Summary
Les Terrasses du Port, Marseille Summary
Slide 41: Clear focus on near term challenges and longer term valuation creation
Summary Clear focus on near term challenges and longer term valuation creation Debt reduction remains a key priority 75% of Italie Deux and Italik sold for €473m (£423m) On pro forma basis net debt reduced to £3.1bn, Gearing 61%, LTV 37%(1) UK continues to be challenging Tenant restructuring a conti
Slide 42: Questions
The Oracle, Reading Questions
Slide 43: Supplementary appendices
Supplementary appendices Bullring & Grand Central, Birmingham
Slide 44: Contents
Contents 01 Group 02 UK flagship destinations 03 France flagship destinations 04 Ireland flagship destinations 05 Premium outlets 06 City Quarters 07 UK retail parks 44
Slide 45: Group
01 Group 45 Festival of Light, Bullring & Grand Central, Birmingham
Slide 46: Average of £400m disposed per year over the last five years
Appendices: Group Average of £400m disposed per year over the last five years Hammerson annual disposal proceeds (£m) 700 600 500 400 300 200 100 0 2014 2015 2016 2017 2018 2019 YTD UK flagships UK retail parks UK other UK office France Ireland 46
Slide 47: £9.5 billion pan-European retail platform
£9.5 billion leading 53 pan-European retail European destinations platform 14 countries 8% 8% 29% Top 3 market position in all chosen sectors 27% 19% 49% 10% non-UK assets 2.2m UK flagship destinations - £2.7bn m2 retail space France flagship destinations - £1.8bn Ireland flagship destinations - £0.
Slide 48: Our Business Model
Appendices: Group Our Business Model What we have What we do Who we deliver for Product experience framework Shareholders High-quality property Iconic Brands in the right destinations places Our strategy Consumers Retail A dynamic and specialism diverse team Capital Optimised Operational efficiency
Slide 49: H1 2019 Group leasing cumulative activity
Appendices: Group H1 2019 Group leasing cumulative activity H1 2019 leasing and cumulative vs. H1 2018 and H1 2017 (£m)(1) Flagship leasing H1 19 H1 18 volumes £m £m 5 20 UK 4.4 6.8 4.5 18 France 4 16 2.8 3.6 3.5 14 Ireland 1.2 1.5 3 12 2.5 10 Total 8.4 11.9 2 8 1.5 6 1 4 0.5 2 0 0 May March Februar
Slide 50: H1 2019 portfolio leasing key metrics
Appendices: Group H1 2019 portfolio leasing key metrics Leasing vs previous Leasing vs ERV Like-for-like ERV New rent secured passing (%)(1) (%)(1) growth from leasing (%) (£m)(2) UK flagship destinations -8 -4 -2.5 4.4 France flagship destinations +5 +4 -0.3 2.8 Ireland flagship destinations +12 +4
Slide 51: Tenant restructuring: December 2017 – June 2019
Appendices: Group Tenant restructuring: 31 December 2017 – 30 June 2019 UK France Ireland UK UK Group flagship flagship flagship retail parks other destinations destinations destinations Number of units impacted 100 37 3 27 12 179 Passing rent pre restructuring (£m) 17.0 2.8 1.8 6.3 2.1 30.0 Current
Slide 52: Run rate of tenant restructuring in the UK & Ireland
Appendices: Group Run rate of tenant restructuring in the UK & Ireland Units in CVA or administration by month, January 2018 – June 2019 25 20 15 10 5 0 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 52
Slide 53: Top tenants
Appendices: Group Top 20 tenants(1) Rental Exposure % of passing Rental Exposure % of passing Retailer Retailer (£m) rent (£m) rent H&M 9.2 2.7% Debenhams 3.9 1.1% Inditex 8.7 2.5% Arcadia 3.8 1.1% B&Q (Kingfisher) 8.4 2.4% John Lewis PLC 3.8 1.1% Next 7.7 2.2% New Look 3.7 1.1% Marks & Spencer 5.7
Slide 54: H1 2019 key operational statistics
Appendices: Group H1 2019 key operational statistics Occupancy (%) UK flagships France Ireland UK other Group flagships flagships 30 June 2019 96.4 97.0 99.5 89.3 96.7 31 December 2018 97.6 97.1 99.0 96.9 97.2 30 June 2018 97.2 97.1 98.9 94.5 96.6 UK France Ireland Sales densities(4) UK France flags
Slide 55: NAVPS walk
Appendices: Group NAVPS walk H1 2019 EPRA NAV movement (pence per share) 790 770 4 14 750 14 738 70 730 710 15 690 685 685 670 Dec 2018 Adjusted profit Premium outlets Fx and other Reval excl. outlets Dividends June 2019 reval 55
Slide 56: H1 2019 valuation data
Appendices: Group H1 2019 valuation data UK flagships France Ireland UK retail UK other Total flagships flagships parks True equivalent yield (%) 30 Jun 2019 5.9 4.5 4.6 7.2 8.7 5.5 31 Dec 2018 5.5 4.2 4.5 6.8 8.0 5.3 Change 6 months 40bp 20bp 10bp 40bp 70bp 20bp Change 12 months 70bp 10bp 20bp 90bp
Slide 57: H1 2019 valuation data
Appendices: Group H1 2019 valuation data UK flagships France Ireland UK retail UK other Total flagships flagships parks ERV (£m) 30 Jun 2019 164.0 89.9 45.3 59.7 12.9 366.1 31 Dec 2018 169.3 89.4 45.3 59.7 13.3 377.0 LfL change 6 months (%) -2.5% -0.3% -0.1% -6.3% -3.1% -2.3% LfL change 12 months (%
Slide 58: Key disposals achieved 2017 – 2019
Appendices: Group Key disposals achieved 2017 – 2019 Proceeds(1) Buyer £m 2017: average -3% below book value Westwood and Westwood Gateway Retail Parks, Thanet 80 BMO (private equity) Saint Sébastien, Nancy 140 AEW (private equity) Place des Halles, Strasbourg 167 Greenstone Oxford Limited 2018: ave
Slide 59: Net debt analysis
Appendices: Group Net debt analysis Net debt analysis (£m)(1) 3500 3450 35 3,447 392 3400 22 3,406 95 3350 118 3300 5 3250 3200 3150 3100 3050 3,055 3000 Dec 2018 Disposal Net operating Other Dividend Capex Jun 2019 Future disposal Pro-forma proceeds cashflow proceeds (2) 1 2 On a proportionally con
Slide 60: Debt maturity profile
Appendices: Group Debt maturity profile Debt maturity profile 30 June 2019 (£m)(1) 1,000 900 800 700 Revolving credit facilities 600 Private placement 500 Sterling bonds 400 Euro bonds Secured debt 300 200 100 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 1 Proportionally consol
Slide 61: LTV methodology
Appendices: Group LTV methodology 30 June 2019 (pro forma)(1) 30 June 2019 31 December 2018 Headline Fully proportionally Headline Fully proportionally Headline Fully proportionally Net debt (£m) consolidated (£m) (£m) consolidated (£m) (£m) consolidated (£m) Group 3,055 3,055 3,447 3,447 3,406 3,40
Slide 62: Gearing sensitivity
Appendices: Group Gearing sensitivity(1) Disposals (£m)(3) 0 100 200 300 400 500 600 700 800 900 1000 Reduction in Group 0% 61% 59% 57% 55% 53% 51% 49% 47% 45% 43% 41% 5% 67% 65% 63% 61% 59% 56% 54% 52% 50% 48% 45% values(2) 10% 75% 73% 70% 68% 65% 63% 60% 58% 55% 53% 50% 15% 85% 82% 79% 76% 73% 71%
Slide 63: Reconciliation between Hammerson and Fitch Net Debt: EBITDA metrics
Appendices: Group Reconciliation between Hammerson and Fitch Net Debt: EBITDA metrics EBITDA (£m) Notes Net debt (£m) Notes Net debt/ EBITDA Hammerson basis 357.4 3,405.7 9.5 -8.6 Amortisation of tenant incentives -278.3 Dundrum JV secured debt -3.4 Share based remuneration -81.8 Highcross JV secure
Slide 64: Cost savings delivery on track to support reinvestment
Appendices: Group Cost savings delivery on track to support reinvestment Breakdown of annual cost savings (£m) 2019 reinvestment (£m) £8m p.a. £1.0m p.a. from future disposals Disposals £0.4m Operational £4m p.a. £2.7m £7m p.a. of Technology and cost savings innovation delivered £2m Board and manage
Slide 65: Flexibility over future capital expenditure
Appendices: Group Flexibility over future capital expenditure Capex 2018-2020 Committed 2018 2019 2020 Actual Forecast Forecast £m £m £m On-site developments 95 70 80 Other committed capex(1) 74 25 - 169 95 80 Discretionary Flagship destination investment 43 38 40 City Quarters 2 7 20 45 45 60 Total
Slide 66: Maintenance capex – FY 2018
Appendices: Group Maintenance capex – FY 2018 UK France Ireland Total flagships flagships flagships Service charge (maintenance) Service charge income (£m) 45 25 12 82 Maintenance expenditure within service charge (£m) 7 4 2 13 Examples: Painting, flooring upkeep, M&E: CCTV, wifi , IT systems mainte
Slide 67: Delivering against our Positive Places strategy
Our progress against 2019 plans 2019 Target Progress Reducing energy demand across the managed retail portfolio by -14.2% H1 2018 vs. H1 2019 Delivering a further 11% reduction achieved against our Installing additional renewable electricity capacity at three sites 1 complete, 2 programmed for Posit
Slide 68: Hammerson has set a target to be Net Positive by 2030
Hammerson has set a target to be Net Positive for carbon, water, resource use and socio- Carbon Resource Use economic impacts by 2030 Net Positive for carbon means Net Positive for resource use means waste avoided, recycled carbon emissions or re-used exceeds materials used avoided exceed that are n
Slide 69: Steps to becoming Net Positive
Steps to becoming Net Positive Our phase one target is to be Net Positive for landlord controlled carbon emissions, water demand, resource use and socio-economic impacts by the end of 2020 2015 27,000 tonnes CO2e 2016 539,082 m3 water 18,243 tonnes waste not 24,000 tonnes CO2e 2017 recycled or reuse
Slide 70: UK flagship destinations
02 UK flagship destinations 70 Westquay, Southampton
Slide 71: H1 2019 UK flagship leasing performance
Appendices: UK flagship destinations H1 2019 UK flagship leasing performance H1 2019 UK flagship destinations leasing (£m) H1 2019 leasing 5 8 £m 4.5 Principal leasing 7 3.1 4 6 Reconfigurations 3.5 0.2 5 3 Temporary and other 1.1 2.5 4 Total 2 3 4.4 1.5 2 1 1 UK flagship leasing key facts 0.5 0 0 L
Slide 72: Profile of leasing at UK flagship destinations
Appendices: UK flagship destinations Profile of leasing at UK flagship destinations UK flagship destinations leasing(1) vs previous passing rent – H1 2019 (£’000s) 200 Type No. £’000s % vs % vs previous ERV 150 passing Principal 26 2,577 -8% -4% 100 50 Temporary 19 1,082 -26% -55% Temporary/ vacant
Slide 73: Differentiation between categories and brands in our UK portfolio
Appendices: UK flagship destinations Differentiation between categories and brands in our UK portfolio H1 2019 Sales Hammerson UK flagship destinations category sales and range Hammerson -2.0% Index -1.7%(1) 60% H1 2019 Footfall Hammerson +0.5% Index -3.2%(2) 40% H1 2019 price deflation(3) Non-food
Slide 74: Exposure to department stores
Appendices: UK flagship destinations Exposure to department stores Hammerson exposure to department stores in UK Number of Floorspace Hammerson Bullring & Grand Central, Birmingham stores sales growth (‘000 m2) Harvey Nichols 2 8 +ve Selfridges 1 24 John Lewis 5 114 Marks & Spencer 4 28 Fenwick 1 16
Slide 75: Proactively reconfiguring department store space
Appendices: UK flagship destinations Proactively reconfiguring department store space House of Fraser Indicative plans for further repurposing Highcross, Leicester Replaced with upsized Zara and JD Sports flagships, Adventure Golf, restaurants and additional car parking Additional £1.5m of rental in
Slide 76: France flagship destinations
03 France flagship destinations 76 Les Terrasses du Port, Marseille
Slide 77: Portfolio remains weighted towards flagship assets
Appendices: France flagship destinations Portfolio remains weighted towards flagship assets Focus on flagship destinations 89% Les Terrasses du Port Italie Deux Les 3 Fontaines Other Portfolio value: £2.0bn 7 France flagship destinations Largest three assets 89% of portfolio(1) 1 By value at 30 June
Slide 78: H1 2019 leasing performance
Appendices: France flagship destinations H1 2019 leasing performance H1 2019 leasing and cumulative vs. H1 2018 and H1 2017 (£m) H1 2019 leasing 1.6 7 £m Principal leasing 1.7 1.4 6 Reconfigurations 1.2 0.8 5 Temporary and 1.0 other 0.3 4 Total 0.8 2.8 3 0.6 France flagship leasing key facts 2 0.4 L
Slide 79: Differentiation between categories and brands in France
Appendices: France flagship destinations Differentiation between categories and brands in France H1 2019 Sales Hammerson UK flagship destinations category sales and range Hammerson +1.3% 60% Index +0.2%(1) H1 2019 Footfall Hammerson +0.5% 40% Index +0.3%(2) 20% 9.5% 8.0% 3.1% 2.0% 1.3% 0.7% 0.0% 0%
Slide 80: Ireland flagship destinations
04 Ireland flagship destinations 80 Dundrum, Dublin
Slide 81: 200,000m2 of prime space plus sustainable development opportunities
Appendices: Ireland flagship destinations 200,000m2 of prime space plus sustainable development opportunities Focus on flagship destinations Dundrum Pavilions Ilac Developments Portfolio value: £1.1bn Dundrum 68% of portfolio(1) 1 By value at 30 June 2019 including developments 81
Slide 82: Key retail centres map
Appendices: Ireland flagship destinations Key retail centres map 82
Slide 83: Premium outlets
Freeport Lisboa, Lisbon 05 Premium outlets
Slide 84: Overview of European outlet market
Appendices: Premium outlets Overview of European outlet market Number of outlets in Europe(1) Leading operators by GLA(2) McArthurGlen Neinver 17% VIA 43 60 UK Value Retail Italy 41% 9% France Realm 213 circa Spain outlets 30 3.5million m2 Landsec Germany 8% 13 Poland ROS Other 17 5% 25 4% Multi 4%
Slide 85: Tiered European outlet market
Appendices: Premium outlets Tiered European outlet market Sales densities €/m2 €30,000+ International fashion and luxury brands €2,000–€10,000 Mainstream fashion brand outlets <€2,000 Low-end discount outlets 85
Slide 86: Premium outlets portfolio
Premium outlets portfolio Value Retail Villages VIA Outlets centres Bicester Village, Oxford Batavia Stad Amsterdam Fashion Outlet GLA: 28,000m2 GLA: 30,800m2 Boutiques: 163 Units: 124 La Roca Village, Barcelona Fashion Arena Prague Outlet GLA: 22,800m2 GLA: 24,600m2 Boutiques: 131 Units: 101 Las Ro
Slide 87: Hammerson's total investment in Value Retail
Appendices: Premium outlets Hammerson’s total investment in Value Retail Holding companies 25% equity Las Rozas La Vallée Maasmechelen Wertheim Ingolstadt Kildare Bicester Village La Roca Village Fidenza Village Village Village Village Village Village Village 37 29 25 14 14 22 33 2 29 50 41 38 26 27
Slide 88: Significant contribution to Group performance
Appendices: Premium outlets Significant contribution to Group performance Premium outlets value creation (£m)(1) 7.5 year IRR - 24% 1,800 1,600 1,400 1,200 1,000 1,220 800 (132) 1,641 600 (313) 653 400 200 214 0 Premium Capital Distributions Distributions Valuation Premium outlets NAV invested - ope
Slide 89: Absolute sales growth delivered through active management, acquisitions and extensions
Appendices: Premium outlets Absolute sales growth delivered through active management, acquisitions and extensions VR and VIA Sales and Sales Growth 2012 - 2018 (€m)(1) 3,500 14% 13% 12% 3,000 12% 11% 11% 2,500 10% 10% 9% 2,000 8% 8% 8% 8% 7% €m 1,500 6% 1,000 4% 500 2% 0 0% 2012 2013 2014 2015 2016
Slide 90: Sales densities growth demonstrates underlying sales performance
Appendices: Premium outlets Sales densities growth demonstrates underlying sales performance VR and VIA Average Sales Densities (€/m2) and Average sales Density Growth 2012 – 2018(1) 18,000 20% 18% 18% 16,000 16% 14,000 14% 12,000 13% 12% 10,000 10% 8% 10% 8,000 9% 8% 6,000 7% 6% 5% 5% 4% 4,000 5% 4
Slide 91: Luxury outlets incur higher costs to generate outperformance
Appendices: Premium outlets Luxury outlets incur higher costs to generate outperformance Value Retail – H1 2019 earnings walk (£m) GRI: 70% fixed, remainder turnover; includes GRI 59.7 118 brand inducement amortisation Property outgoings (18.1) Property outgoings: includes significant marketing cost
Slide 92: Lower cost model operated below luxury end of premium outlets market
Appendices: Premium outlets Lower cost model operated below luxury end of premium outlets market VIA Outlets – H1 2019 earnings walk (£m) GRI: >80% fixed, remainder turnover; includes car GRI 20.5 43 park income and inducement amortisation Property outgoings (4.7) (11) Property outgoings: includes l
Slide 93: Multi-phase extensions – a source of significant growth
Appendices: Premium outlets Multi-phase extensions – a source of significant growth Completed Future 5,800m2 2,500m2 33 units 21 units TDC TDC £100m €50-60m YOC Opening +15% Q4 2020 Bicester Village, Oxfordshire Q4 2017 La Roca Village, Barcelona 5,500m2 2,500m2 45 units 15 units TDC TDC €26m €11m Y
Slide 94: City Quarters
06 City Quarters Martineau Galleries, Birmingham
Slide 95: The City Quarters opportunity
Appendices: City Quarters The City Quarters opportunity Retail F&B Residential Workspace Leisure Education Culture Hotel Public spaces Next Start on Key schemes Area planning site submission Les 3 Fontaines, Cergy 8,400m2 n/a On site Citywall House, Southampton 2,800m2 2019 Q2 2020 Near term
Slide 96: UK Retail Parks
07 UK Retail Parks The Orchard Centre, Didcot
Slide 97: UK retail parks H1 2019 operational update
Appendices: UK retail parks H1 2019 operational update UK retail parks H1 2019 H1 2018 LfL NRI (%) 1.0 -3.4 Occupancy (%) 96.7 94.5 Leasing activity (£m) 0.6 1.3 Leasing vs. ERV (%)(1) +1 +4 Leasing vs previous passing (%)(1) +13 +2 Footfall (%)(2) +0.6 -1.9 1 2 Principal leases only H1 2019 UK benc
Slide 98: Key retail park disposals 2016 to 2019
Appendices: UK retail parks Key retail park disposals 2016 to 2019 Proceeds(1) Buyer £m 2016: average 7% below BV Thurrock Shopping Park, Thurrock 100 TH Real Estate Cramlington Retail Park, Cramlington 78 Arch (local authority) Westmorland Retail Park, Cramlington 36 Arch (local authority) 2017: av