British Land Company Plc · LSE:BLND
British Land — Investor Presentation (October 2024)
18 slides from British Land's investor presentation, Oct 2, 2024
Slide 1: Proposed placing to fund earnings accretive retail parks portfolio
Highly O C TO B E R 2 0 2 4 PROPOSED PLACING TO FUND EARNINGS ACCRETIVE R E TA I L PA R K S P O R T F O L I O INVESTOR PRESENTATION
Slide 2: Summary
SUMMARY ACQ U I S I T I O N : P R O P O S E D P L AC I N G : T R A D I N G U P DAT E : £ 4 4 1 M R E TA I L PA R K S PROPOSED c.£300M EQUITY C O N T I N U E D O P E R AT I O N A L A C Q U I S I T I O N AT 7 . 2 % T U N I Y 1 PLACING DELIVERY I M M E D I AT E LY E A R N I N G S ACC R E T I V E EXPECT
Slide 3: Demand is strong for retail parks: the preferred physical format for retailers
DEMAND IS STRONG FOR RETAIL PARKS: THE PREFERRED PHYSICAL FORMAT FOR RETAILERS WHY RETAILERS PREFER RETAIL PARKS NET STORE TAKE UP (2016 - JUNE 2024) 2 AFFORDABILITY U K R E TA I L PA R K S + 733 units Low occupancy cost ratio: 8.9%1 ACCESSIBILITY UK HIGH STREET - 5,001 units Highly efficient way fo
Slide 4: Supply of retail parks is restricted
SUPPLY OF RETAIL PARKS IS RESTRICTED <5% RESTRICTED SUPPLY DUE TO OF RETAIL PARK SUPPLY ADDED PLANNING IN LAST 10 YEARS RETAIL PARKS ONLY 8% VALUES < REPLACEMENT COST OF TOTAL 1.5BN SQ FT UK RETAIL MARKET INVESTOR PRESENTATION PG.4
Slide 5: Retail parks expected to deliver attractive forward-looking returns
RETAIL PARKS EXPECTED TO DELIVER ATTRACTIVE FORWARD-LOOKING RETURNS STRONG OCCUPATIONAL ATTRACTIVE YIELDS FUNDAMENTALS OF 6-7% LIMITED CAPEX LIQUIDITY REQUIREMENTS R E TA I L PA R K S H AV E B E E N B E S T P E R F O R M I N G S U B S E C TO R I N U K R E A L E S TAT E A N D B L PA R K S O U T P E R
Slide 6: Acquisition overview: a high quality retail park portfolio
ACQUISITION OVERVIEW: A HIGH QUALITY RETAIL PARK PORTFOLIO 7 RETAIL PARKS TOTAL c.1.9M SQ FT STRONG TENANT MIX All assets benefit from a major superstore anchor High quality, well-maintained portfolio acquired With weighted average unexpired lease term of and are let to successful multi-channel and
Slide 7: Why we like the portfolio
WHY WE LIKE THE PORTFOLIO P O S I T I V E R E TA I L E R F E E D B A C K STRONG TRADING LOCATIONS & OCCUPIER BASE & ANCHORED BY SUPERSTORES STRONG RENTAL GROWTH HIGH OCCUPANCY 99% PROSPECTS BUYING BELOW REPLACEMENT COST £236psf ATTRACTIVE YIELD1 7.2 % 1 Topped up net initial yield (TUNIY) PG.7
Slide 8: Expected to deliver double digit returns and earnings accretion
EXPECTED TO DELIVER DOUBLE DIGIT RETURNS AND EARNINGS ACCRETION R E TA I L PA R K S A S A % O F TOTA L B R I T I S H L A N D ACQUISTION RETURNS PORTFOLIO GAV 32% 28% 25% 22% 20% 7.2% 3-5% Double digit Topped-up Net ERV ungeared 15% Initial Yield Growth IRR Mar-21 Mar-22 Mar-23 Mar-24 Sep-24 2 Pro Fo
Slide 9: Leading owner & operator of retail parks
Highly Confidential LEADING OWNER & OPERATOR OF RETAIL PARKS 2 New retail park locations (highlighted in orange): 1. Elliott’s Field Shopping Park, Rugby 5 2. Central Retail Park, Falkirk 3. Wellington Retail Park, Waterlooville 4. Ravenhead Retail Park, St Helens 4 5. Cleveland Retail Park, Middles
Slide 10: Strong tenant profile
STRONG TENANT PROFILE TOP 10 OCCUPIERS: Tenant % of Portfolio1 M&S 8% B&Q 8% TK Maxx 6% Next 6% Matalan 6% Currys Plc 5% DFS 4% Dunelm 3% Halfords 3% Pets at Home 3% 6 O F 7 PA R K S A N C H O R E D B Y M & S W I T H R E M A I N I N G PA R K A N C H O R E D B Y S A I N S B U R Y ’ S 1 As a % of cont
Slide 11: Current trading and operational update
CURRENT TRADING AND OPERATIONAL UPDATE T R A D I N G U P D AT E O P E R AT I O N A L U P D AT E For the six month period ending 30 September 2024 For the five month period ending 31 August 2024 ₤142-144M 15.2-15.4P c.0.2% 1.5M SQ FT Expected Underlying Profit Underlying Earnings per Share Portfolio
Slide 12: Key terms of equity placing
KEY TERMS OF EQUITY PLACING • Gross placing proceeds of approximately £300m to fund the retail parks portfolio acquisition PLACING SIZE • Placing to represent approximately c. 7% of British Land’s issued share capital / c. 68m of new ordinary shares • Non-pre-emptive cash placing conducted through a
Slide 13: Appendix
APPENDIX PG.13
Slide 14: Well-connected, virtually fully occupied portfolio – superstore anchored
WELL-CONNECTED, VIRTUALLY FULLY OCCUPIED PORTFOLIO – SUPERSTORE ANCHORED − Elliott’s Field Shopping Park, Rugby: well-connected, modern Portfolio Metrics shopping destination, featuring BREEAM ‘Outstanding’ extension. NOI (psf) WAULTB WAULTE Occupancy Anchor1 − Central Retail Park, Falkirk: draws on
Slide 15: Strategic & financial rationale for acquisition and placing
STRATEGIC & FINANCIAL RATIONALE FOR ACQUISITION AND PLACING • Growing exposure to retail parks is a key strand of British Land’s strategy launched in 2021. • We have deployed £711m of capital into this subsector since 1 April 2024 (including the proposed placing and acquisition). S T R AT E G I C •
Slide 16: Disclaimer (1/3)
DISCLAIMER (1/3) THIS PRESENTATION MAY NOT BE COPIED OR REPRODUCED IN ANY FORM, FURTHER DISTRIBUTED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE, IN PARTICULAR THIS PRESENTATION AND ITS CONTENTS ARE STRICTLY CONFIDENTIAL AND ARE NOT FOR
Slide 17: Disclaimer (2/3)
DISCLAIMER (2/3) Accordingly, no assurance can be given that any particular expectation will be met and reliance shall not be placed on any forward-looking statement. Additionally, forward-looking statements regarding past trends or activities shall not be taken as a representation that such trends
Slide 18: Disclaimer (3/3)
DISCLAIMER (3/3) The securities of the Company have not been and will not be registered under the Securities Act, and may not be offered or sold in the United States or to any US Person unless registered under the Securities Act or conducted pursuant to an exemption from, or in a transaction not sub