Slide 1: Helical Annual Results to 31 March 2016
HELICAL ANNUAL RESULTS TO 31 MARCH 2016 www.helical.co.uk @Helical_Bar_plc 1
Slide 2: Agenda
AGENDA One Highlights Gerald Kaye Two Financials Tim Murphy Three Portfolio Matthew Bonning-Snook and Duncan Walker Four Outlook Gerald Kaye Five Q&A 2 Helical Annual Results 2016
Slide 3: Highlights
Highlights Gerald Kaye 3 Helical Annual Results 2016
Slide 4: Strategy – Clearer Focus
STRATEGY – CLEARER FOCUS • Helical has assets in:- - London for development profit, income and capital growth - the regions for income and capital growth • “Equity lean” - leveraging the balance sheet to have disproportionate upside development exposure whilst managing downside risk • Efficient recy
Slide 5: Results Highlights
RESULTS HIGHLIGHTS Profit Before Tax £120m EPRA NAV Per Share 461p Dividend Per Share 8.17p Increased by £33m (38%) from Increase of by 76p (19.7%) from Increased by 0.92p (12.7%) from 2015 2015 2015 Rental Income Received Valuation Gain Loan To Value £45.5m (18.7%) £129.3m (11.1%) 55% The Bower The
Slide 6: Strong NAV and Dividend Growth Over 3 Years
STRONG NAV AND DIVIDEND GROWTH OVER 3 YEARS EPRA net assets per share Dividend per ordinary share 600 10 8.17p 500 461p 7.25p 8 6.75p 385p 400 5.55p 313p 6 5.15p Pence pence 250p 264p 300 4 200 100 2 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Growth 5.6% 18.6% 23.0% 19.7% Growth 7.8% 21.6
Slide 7: Portfolio Allocation
PORTFOLIO ALLOCATION Retirement Villages, £103.5m, 8.3% Other, £8.7m 0.7% Regional Retail, £142.6m 11.5% London Office, £611.2m, 49.3% Regional Offices, £103.5m 8.4% Regional - Industrial, £210.5m, 17.0% London - Residential, £60.0m, 4.8% TOTAL VALUE: £1.24bn 7 Helical Annual Results 2016
Slide 8: Operational Highlights – Strong Activity
OPERATIONAL HIGHLIGHTS – STRONG ACTIVITY Sales £279.2m Purchases £296.9m • Enterprise House Paddington £43.0m • The Bower – remaining ⅔ interest £168.0m • One Bartholomew Close (our share) £44.9m • Power Road Studios, Chiswick £34.2m • Clifton Street £38.3m • Industrial / Logistics £89.0m • Artiller
Slide 9: Growing Rental Stream into the Future
GROWING RENTAL STREAM INTO THE FUTURE £90,000,000 ERV = £81,000,000 £80,000,000 The Bower Phase 2 £70,000,000 London Offices £60,000,000 London Offices The Bower £50,000,000 Phase 1 London Offices £40,000,000 London Offices Regional £30,000,000 Industrial £20,000,000 Retail £10,000,000 Regional Offi
Slide 10: Upside Opportunities
UPSIDE OPPORTUNITIES Sq ft 300,000 2016 2017 2018 ONE CREECHURCH PLACE 250,000 ONE BARTHOLOMEW CLOSE 200,000 THE BOWER: TOWER 150,000 THE LOOM 100,000 23-28 CHARTERHOUSE 50,000 SQUARE FOUNTAIN COURT 90 BARTHOLOMEW CLOSE MANCHESTER - H2 H1 H1 H2 H2 H2 H1 Let Space to Let Space to Let - Forward Funded
Slide 11: Loan to Value
LOAN TO VALUE • Current LTV 55% • Clear trajectory to LTV of 37% by 2021 £1,400 90% 80% £1,200 70% £1,000 55% 60% 52% 55% £800 51% 49% 46% 50% £000 50% 45% £600 42% 37% 40% £400 30% £200 20% £0 10% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Value of Investment portfolio Value of trading and d
Slide 12: Market Comment
MARKET COMMENT • UK economy slowing – forecast downgraded from 2.4% at 1st January to 2.1% now • London dynamics still strong:- – 14% of UK population produces 23% GDP – Population anticipated to grow from 8.6m in 2015 to 9.7m in 20251 – Office employment growth 35,000 pa average over next 5 years2
Slide 13: Occupier Comment
OCCUPIER COMMENT • Re-urbanisation • Migration from west to east • War for talent • Demand for quality public realm and amenities • Clusters around transport links “And with EC1 the fastest growing postcode in Europe with 30,000 plus business growing there in the past two years, it just makes sense
Slide 14: Summary
SUMMARY • Yield compression slowing but ongoing rental growth • Execution of business plan for individual asset to drive surpluses • Strong collection of London buildings for ongoing growth • Upside with 800,000 sq ft of development and refurbishment space to let • Industrials, Manchester offices an
Slide 15: Financials
Financials Tim Murphy 15 Helical Annual Results 2016
Slide 16: Headline Numbers
HEADLINE NUMBERS INCOME STATEMENT Mar 2014 Mar 2015 Mar 2016 Net rental income £29.8m £38.6m £43.4m +12% Development profits £65.0m £17.6m £27.5m +56% Gain on sale and revaluation of investment £45.0m £96.6m £99.7m +3% properties IFRS profit before tax £101.7m £87.4m £120.1m +37% EPRA profit before
Slide 17: Income Statement
INCOME STATEMENT £m 130 £99.7m £0.8m £120.1m 120 110 100 90 80 £27.5m 70 60 £11.9m 50 £43.4m 40 £15.4m 30 £19.6m 20 £22.6m £1.4m 10 0 Net rental income Development profits Administration Performance related Net finance costs Other net costs EPRA profit before Net gain on sale and Other adjustments I
Slide 18: EPRA Net Assets per Share
EPRA NET ASSETS PER SHARE 500 84.1p 475 1.3p 460.8p 14.2p 450 12.6p 425 17.1p 400 385.1p 375 350 325 300 275 250 At 1 April 2015 EPRA EPS Gain on sale and Development surplus Dividends Other adjustments At 31 March 2016 revaluation surplus crystalised 18 Helical Annual Results 2016
Slide 19: Helical – Rental Income
HELICAL – RENTAL INCOME £m £100 £90 £81.0m £80 £70 £59.5m £60 £56.0m £50 £45.1m £40 £35.2m £36.4m £36.7m £34.0m £28.7m £28.5m £30 £20 £10 £0 31 March 2012 31 March 2013 31 March 2014 31 March 2015 31 March 2016 Gross Contracted Rent Estimated Rental Value (ERV) Helical Bar plc 19 Helical Annual Resu
Slide 20: Interest Rate Protection
INTEREST RATE PROTECTION Fixed rate borrowings £m 1000 900 800 700 4.2% 4.2% 4.2% 4.2% 600 500 400 4.4% 300 200 3.5% 100 0 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Retail Bond Convertible Bond Other Fixed Rate Borrowings Total Loan Helical Bar plc 20 Helical Annual Results 2016
Slide 21: Loan Expiry at 31 March 2016
LOAN EXPIRY AT 31 MARCH 2016 Average maturity 4.5 years Average cost of debt 4.2% • £100m RCF extended to April 2021 • £99m Investment Facility extended to August 2020 £m • £65m Retirement Village Facility to August 2020 • £200m Facility for the Bower to November 2019 400 350 300 250 200 150 100 50
Slide 22: Managing Our Loan to Value
MANAGING OUR LOAN TO VALUE £m £1,600 100% 90% £1,400 80% £1,200 70% £1,000 55% 58% 60% 54% £800 48% 50% 40% 40% £600 40% 39% 44% 32% 30% £400 32% 20% 20% 20% £200 10% £0 0% 2016 Contracted Sales Committed Capex Sale of The Bower Sale of Cardiff / Shepherds On Conversion of Inv. £7.0m Inv. £100.0m £2
Slide 23: Summary of Key Financials
SUMMARY OF KEY FINANCIALS • Growing income stream as the reversion on the investment portfolio is captured • Finance costs contained with over 80% of debt hedged for over 4 years • Debt maturity has increased to 4.5 years with no secured loans repayable before November 2019 • As we execute our busin
Slide 24: Portfolio
Portfolio Mathew Bonning-Snook | Duncan Walker 24 Helical Annual Results 2016
Slide 25: The Bower, Old Street, London EC1
THE BOWER, OLD STREET, LONDON EC1 Phase 1 Phase 2 • Empire House – (Z Hotel/Ceviche) sold for £20.65m • 171,000 sqft speculative office • The Studio – 18,363 sq ft fully let - £980,000 (one office • 17 floors (9,500 – 11,300 sq ft floors) Two ground floor tenant - £45psf) retail/restaurant units • T
Slide 26: C Space, London EC1
C SPACE, LONDON EC1 • C Space completed October 2015 • 62,000 sq ft of office space • 75% pre let to MullenLowe Ltd • £2.6m pa rent currently + c. £1m on letting remaining space • Profit recognised £30m 26
Slide 27: Barts Square, London EC1
BARTS SQUARE, LONDON EC1 Residential Residential Next Phase • Completion Q2 – Q3 2017 • 92 residential units • 144 residential units launched:- • 11,800 sq ft retail – Total value £195m • Commence Q4 2016 – 102 exchanged, value £129m • Complete Q1 2019 • Profit recognised to date £23m – Average sale
Slide 28: One Bartholomew Close, London EC1
ONE BARTHOLOMEW CLOSE, LONDON EC1 • 212,858 sq ft speculative office • On site, due to complete July 2018 • Site sold to clients of Ashby Capital LLP for £102.4m resulting in Helical profit of £26m • Baupost/Helical to receive further profit share based on fixed yield, variable on rent • Potential f
Slide 29: One Creechurch Place, London EC3
ONE CREECHURCH PLACE, LONDON EC3 • Speculative office scheme 273,000 sqft net (17 • Assuming market incentives and letting within 12 floors) months, profit share expectation:- • Under construction, due for completion Sept 2016 £60 psf overall - £18m • City of London F/H. Funded development with £65
Slide 30: Charterhouse Square, London EC1
CHARTERHOUSE SQUARE, LONDON EC1 Farringdon East • Speculative office scheme, 38,500 sqft net (plus 5,100 retail/restaurant) • Under construction, due for completion – Mar 2017 • Profit share – Helical 15% priority return, thereafter 50/50 share with Charterhouse • Rental expectation - £67.50psf 30 •
Slide 31: King Street Regeneration, Hammersmith W6
KING STREET REGENERATION, HAMMERSMITH W6 • Dev Agreement with H&F BC in a 50/50 JV with Grainger • Planning consent granted. S.73 amendment submitted, pending decision • 197 residential units, cinema, restaurants and council office. GDV £215m • Phase 1 (152 units & office) out to tender with contrac
Slide 32: 26-35 Drury Lane & 8-12 Dryden Street, London WC2
26-35 DRURY LANE & 8-12 DRYDEN STREET, LONDON WC2 • Conditional purchase contract (subject to planning and viability) • Resolution to grant planning, pending completion of S.106 • 68 apartments, 16,000 sq ft retail. GDV £157m • Construction start Q2 2017 • Anticipated profit to Helical £15m - £25m 3
Slide 33: The Loom E1
THE LOOM E1 • Acquired 2013. £34m. 112,000 sq ft • Comprehensive refurb underway of all common parts and 25,000 sq ft of offices. Completes Summer 2016. • Average rent at purchase £18 psf • New lettings £45+ psf Helical Annual Results 2016 • Highly reversionary 33
Slide 34: Shepherds Building W14
SHEPHERDS BUILDING W14 • Owned since 2000 • 150,000 sq ft, fully let • Contracted rent £6.3m • Endemol lease extended to 2026 and rent increased by £1.3m • Yield on historic cost 19.6% • Rents now £45 psf+ • Continued strong occupational demand 34
Slide 35: Power Road Studios, W4
POWER ROAD STUDIOS, W4 • Acquired December 2015 for £34.2m. 4.4% NIY • 62,000 sq ft multi let office on 2 acre site • Average rents at acquisition £24.50psf • New lettings at £38 psf. Now 5.25% yield on cost • Studies ongoing to add space to site; potentially 40-50,000 sq ft • Optionality when / if
Slide 36: The Regions: Industrial / Logistics
THE REGIONS: INDUSTRIAL / LOGISTICS • Strong occupational demand • Strong cash on cash returns; early / mid teens • Little obsolescence • Continue to acquire well located, well specified units at yields of 7.0%+ • Provides 35% of the group’s rent roll 36
Slide 37: The Regions: Retail
THE REGIONS: RETAIL • Continued polarisation of market and dominance of prime • Occupational demand for prime is strong with rising zone A rents • 2 rent reviews concluded in Cardiff at £185 ITZA • Retail warehousing - good cash cow, but likely to continue sales over next 12 months. Focus on industr
Slide 38: The Regions: Offices
Focus on markets with a sufficient depth of THE REGIONS: OFFICES • occupational demand • Provide high quality, economic space to a “London” standard • Same principle as London – good common parts / tenant services • Letting / refurbishment programme in Manchester progressing well. 30,000 sq ft let a
Slide 39: Retirement Villages
RETIREMENT VILLAGES Population Over 60 % Homes designed for over 60's 3% 23% 97% 67% Durrants Village, Faygate • Ageing population: 23% over 60 now. 29% by 2036 • Chronic lack of fit for purpose housing • Desire to downsize and release equity (bank of grandma and grandpa) • Knight Frank estimate 25%
Slide 40: Retirement Villages
RETIREMENT VILLAGES Asset No. No. No. No. Status Anticipated Profit to Come Units Built Sold Reserved Completion Inc. Clubhouse Liphook 191 151 151 - Phases 1-3 complete. Phase 4, 40 2018 £6.3m cottages underway Faygate 156 105 54 24 105 built. Remainder commence 2019 £8.9m summer 2016 Exeter 164 43
Slide 41: Outlook
Outlook Gerald Kaye 41 Helical Annual Results 2016
Slide 42: Outlook
OUTLOOK • Well positioned for growth • Development gain from London schemes and retirement villages. • Over last 12 months we have delivered on our goals:- The Powerhouse – Sold 6 buildings – Reinvested £297m – Sold 38 residential units at Barts Square • Over next 12 months:- – Lettings in London –
Slide 43: Q&A
Q&A 43 Helical Annual Results 2016
Slide 44: Appendix
Appendix 44 Helical Annual Results 2016
Slide 45: London Properties
LONDON PROPERTIES Charterhouse Square, The Bower, EC1 EC1 C Space, Shepherds 26-35 Drury Lane, Barts Square, Chart House, Building, W14 EC1 WC2 EC1 N1 The Loom, E1 The Powerhouse, One King Street, One Creechurch W4 W6 Place, EC3 Power Road King Street, W6 Studios, W4 Helical Bar plc 45 Helical Annua
Slide 46: London Development Scheme Review
London Development Scheme Review Property Partner HB Share Status Start Area Total Completion Helical Potential Helical Sq Ft NIA Cost Profit to Profit to Come Date The Studio 18,283 sq ft office 4,894 sq ft retail Phase 1 Phase 1 – Completed £180m Phase 1 – Nov 2015 Completed The Bower, The Warehou
Slide 47: Total Returns
TOTAL RETURNS • The strategy is working to deliver strong total property returns. London Total Returns Regional Total Returns Income, £12.5m Reval and Gain on Sale, £6.6m Dev and Trading Profits, £23.3m Dev and Trading Profits, £4.2m Reval and Gain on Sale, £93.0m Income, £31.0m Total property retur
Slide 48: Investment Portfolio – Key Statistics
INVESTMENT PORTFOLIO – KEY STATISTICS Valuation increase of 11.1% in year to March, including capex, sales and purchase for assets held as investments % of Portfolio Valuation Net Initial Reversionary (HB Share) Change Yield Yield London Offices 56.4% 18.8% 2.5% 6.1% Retail 12.8% -0.3% 6.1% 6.5% Ind
Slide 49: Helical London Exposure – Changes Over Time
HELICAL LONDON EXPOSURE – CHANGES OVER TIME (FAIR VALUE) Change since Total Portfolio Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Mar 15 London 26.3% 27.9% 34.2% 41.6% 54.1% 12.5% Regions 73.7% 72.1% 65.8% 58.4% 45.9% -12.5% 100% 100% 100% 100% 100% TOTAL (£572.7m) (£626.4m) (£801.7m) (£1.02bn) (£1.24bn) 80%
Slide 50: Helical's Portfolio – Changes to Fair Value
HELICAL'S PORTFOLIO – CHANGES TO FAIR VALUE £1,400,000,000 £1,200,000,000 £1,000,000,000 Convertible Bond Issue £800,000,000 Retail Bond Issue £600,000,000 £400,000,000 £200,000,000 £0 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar
Slide 51: Portfolio Geography by Helical Equity
PORTFOLIO GEOGRAPHY BY HELICAL EQUITY Scotland, 1% Wales, 4% North, 12% Midlands, 12% London, 58% South West, 5% South East, 8% Helical Bar plc 51 Helical Annual Results 2016
Slide 52: Investment Portfolio – Helical's Share
INVESTMENT PORTFOLIO – HELICAL’S SHARE Fair Value % Value Book Value Surplus London Offices £611.2m 49.3% £607.2m £4.0m London Residential £60.0m 4.8% £56.0m £4.0m Regional Offices £103.5m 8.4% £102.7m £0.8m Industrial / Logistics £210.5m 17.0% £210.5m - Retail £142.6m 11.5% £142.6m - Retirement Vil
Slide 53: Investment Portfolio
INVESTMENT PORTFOLIO Average Capital Value Vacancy Rate Change to Unexpired Lease psf (floor area) ERV in Year Term (years) London Offices £656 19.3% 7.1 7.6% Retail £183 0.2% 6.1 3.5% Industrial / Logistics £56 5.9% 5.3 1.1% Regional Office £197 6.5% 5.6 2.8% TOTAL £180 7.1% 6.3 4.4% Note: London v
Slide 54: Investment Portfolio: Lease Expiries
INVESTMENT PORTFOLIO: LEASE EXPIRIES Lease Expiries and Tenant Break Options 2017 2018 2019 2020 2021 Percentage of Rent Roll 5.4% 11.1% 11.3% 9.3% 3.9% Number of Leases 88 95 79 32 22 Average Rent per Lease £31,600 £59,700 £73,500 £149,300 £90,800 Helical Bar plc 54 Helical Annual Results 2016
Slide 55: Asset Management Overview April 2015 to March 2016
ASSET MANAGEMENT OVERVIEW APRIL 2015 TO MARCH 2016 Rent Rent lost at break/expiry -£2.5m Net rent lost through administration -£0.2m New lettings and uplifts at lease renewal £15.3m Rent reviews £0.1m Net Increase £12.7m Helical Bar plc 55 Helical Annual Results 2016
Slide 56: Top Tenants
TOP TENANTS Rank Tenant Tenant Industry Rent (Helical) % Rent Roll 1 Endemol UK Ltd Media £4.0m 7.1% 2 MullenLowe Ltd Marketing Communications £2.6m 4.6% 3 Gopivotal (UK) Limited Technology £2.0m 3.6% 4 Farfetch UK Ltd Online Retail £1.9m 3.4% 5 DSG Retail Limited Retail £1.3m 2.3% 6 Sainsbury's Sup
Slide 57: IPD
IPD • IPD 1 yr 3 yr 5 yr 10 yr 20 yr % pa % pa % pa % pa % pa Helical 21.7 22.0 15.8 10.0 15.0 IPD 11.4 14.1 10.4 5.5 9.2 Helical’s Percentile Rank 4 4 5 4 1 Source: Investment Property Databank 57 Helical Annual Results 2016
Slide 58: Case Studies
Case Studies 58 Helical Annual Results 2016
Slide 59: C Space - Before
“\ C SPACE - BEFORE /SiqN \
Slide 60: C Space - After
C SPACE - AFTER 60
Slide 61: Churchgate & Lee House - Before
CHURCHGATE & LEE HOUSE - BEFORE • Acquired March 2014, £34m (£140 psf) • 250,000 sq ft • 36% vacant by floor area • NOI - £1,800,000 – NIY 5% • Rationale: – Multi let – Strong occupational demand – Rental growth – Potential to refurb and reposition 61
Slide 62: Churchgate and Lee House - Present
CHURCHGATE AND LEE HOUSE - PRESENT • Capital expenditure to date £6.1m • Major refurbishment of reception / café and multiple floors • Current NOI £2.6m (6.1% yield on cost) • Contracted rent £3.4m (8.0% yield on cost) • 93% let by floor area (232,500 sq ft) • March 2016 valuation £51.5m 62
Slide 63: One Creechurch Lane, London EC3 Ownership and Profit Share
ONE CREECHURCH LANE, LONDON EC3 OWNERSHIP AND PROFIT SHARE DESCRIPTION The Corporation of London (CoL) own the freehold. Ground rent of £50,000 rising to 5% of rent received. At PC and letting Helical’s 10% interest is bought by HOOPP at a yield of 5.5%. In addition Helical as development manager re
Slide 64: www.helical.co.uk @Helical_Bar_plc
www.helical.co.uk @Helical_Bar_plc 64