British Land Company PLC · LSE:BLND
British Land — H1 2020 Earnings Presentation
94 slides from British Land's earnings presentation, Nov 13, 2019
Slide 1: Half Year Results Presentation
Half Year Results Presentation Six months to 30 September 2019
Slide 2: Half year progress
Half year progress Chris Grigg, CEO 2
Slide 3: Key takeaways
Key takeaways • Achieved resolution to grant outline planning for our Canada Water Masterplan – 53 acre scheme including a new urban centre for London – 5m sq ft including 3,000 new homes – Unanimously supported by Southwark Council • Continued leasing success – 1.3m sq ft leasing activity across th
Slide 4: Financial summary
Financial summary • NAV down 5.4% to 856p • Portfolio value down 4.3% – Offices +0.4% including developments +4.9% – Canada Water +12.4% – Retail -10.7% • EPS down 6.4% to 16.1p – Impact of £0.9bn net income producing sales in 18 months – Partially offset by share buyback – Robust stance on CVAs led
Slide 5: Operational outperformance in a challenging retail market
Operational outperformance in a challenging retail market • 605,000 sq ft leasing activity – Leasing deals 1% ahead of previous passing rent1 – 3.5% ahead of ERV • Pragmatic approach to leasing – Focused on maintaining occupancy – Willing to accept lower rents or shorter leases • Supported operation
Slide 6: A commercial approach to support operational performance
A commercial approach to support operational performance Giltbrook, Nottingham Mayflower, Basildon • 30,000 sq ft Fabb Sofas returned • 20,500 sq ft Fabb Sofas returned – 60,000 sq ft re-let to M&S; 30,000 sq ft added – Re-let to Lidl; maintaining full occupancy – 15% discount to previous rent – 19%
Slide 7: Retail sales focused on assets that do not meet our criteria
Retail sales focused on assets that do not meet our criteria Population Large population in catchment, with Rental growth The right characteristics to drive trends growth potential potential income from rents and commercialisation Quality of The right number of the right type of Potential to grow an
Slide 8: Broad and flexible leasing offer
Broad and flexible leasing offer • London campuses continue to lease well – 671,000 sq ft leasing activity – 11.1% ahead of ERV • Further success increasing mix of uses – Everyman cinema open at Broadgate – 4 canal barges at Paddington; 5th to come Everyman, 1FA, Broadgate 2
Slide 9: Broad and flexible leasing offer
Broad and flexible leasing offer • Developments now 87% let or under offer – Delivering new rent of £63m when fully let – Achieving £80 psf at Broadgate vs £70 psf for city prime • Similar success on existing space – Leasing faster, to a broader range of occupier Paddington Barges
Slide 10: Broad and flexible leasing offer
Broad and flexible leasing offer High quality Ready to fit Fitted Developments & Existing Space 3 10
Slide 11: Leasing well on existing as well as new space
Leasing well on existing as well as new space Monzo New tech sector occupier 122,000 sq ft at Broadwalk House, 45,000 sq ft at 338 Euston Road, Regent’s Place Broadgate Broadwalk House, Broadgate 338 Euston Road, Regent’s Place 11
Slide 12: Storey
Storey • Fully fitted, serviced and managed space – All inclusive basis – Ability to brand own space – Targets scale ups not start ups; average headcount c. 50 – British Land-owned buildings • Evolving our offer – Storey Club – launched at Paddington Central and planned for 100 Liverpool Street – St
Slide 13: Smart & Sustainable offices
Smart & Sustainable offices • Sustainability an important theme in leasing discussions – Occupiers focused on minimising carbon footprint – Reflects employee, customer and shareholder pressure • Our long term focus on Sustainability is an important advantage – 92% of developments BREEAM Excellent or
Slide 14: Canada Water
Canada Water • Resolution to grant outline planning from Southwark Council, covering: – 53 acre masterplan – Detailed consent on the first three buildings, covering 576,000 sq ft • Earliest start on site mid next year • Next planning steps: – Completion of S106 agreement – Formal issue of planning –
Slide 15: Building a London focused, increasingly mixed use business
Building a London focused, increasingly mixed use business March 2010 Current Indicative business split 5+ years 10% 33% 66% 55% 41% 30-35% 5% 50-55% • London focused: over 70% of group • Smaller, more focused Retail • Meaningful Residential exposure Retail Campus-focused Storey Residential • Right
Slide 16: Financial Results
Financial Results Simon Carter, CFO
Slide 17: Results Overview
Results Overview 16.1p 856p £ 11.7bn Underlying earnings EPRA Net Asset Value Portfolio valuation per share per share -4.3% vs March 19 -6.4% vs H1 19 -5.4% vs March 19 (Retail -10.7%, Offices +0.4%) 30.8% 87% 4.6p Committed developments Loan to value let or under offer Committed developments EPS ac
Slide 18: Underlying earnings per share
Underlying earnings per share (1.6) 0.5 (0.5) 0.4 0.1 17.2 16.1 16.1 HY 2019 Net divestment Share Excl. impact of Retail like-for- Offices like-for- Financing HY 2020 and buybacks capital activity like income like income activities and developments other 18
Slide 19: Net rental income
Net rental income £m Like for like 1 Like for like 1 (20) -3.2% +1.1% 2 (5) 1 (2) 267 243 HY 2019 Sales Acquisitions Retail like-for- Offices like-for- Developments HY 2020 like income like income 1 Like for like rental growth is stated excluding the impact of surrender premia 19
Slide 20: Income statement
Income statement 6 months to 30 September H1 2019 H1 2020 Change % Net rental income (£m) 267 243 (9.0%) Fees & other income (£m) 6 7 16.7% Administrative expenses (£m) (42) (41) (2.4%) Net finance costs (£m) (62) (57) (8.1%) Underlying Profit (£m) 169 152 (10.1%) Underlying earnings per share (p) 1
Slide 21: EPRA net asset value
EPRA net asset value (55p) 16p (15p) (2p) 8p (1p) 905p 856 856p March 19 Valuation Underlying Dividends Share buyback Financing Other Sept 19 performance Profit activity 21
Slide 22: Valuation performance
Valuation performance Valuation Valuation Yield ERV £m movement movement movement Total 11,723 (4.3%) +17bps -2.3% Offices 6,439 0.4% +0bps +0.9% Retail 4,790 (10.7%) +37bps -4.8% Residential 147 (2.1%) Canada Water 347 12.4%x 22
Slide 23: Office valuation performance
Office valuation performance +0.4% Offices H1 valuation movement Standing Portfolio Developments £5.4bn (-0.4%) £1.0bn (+4.9%) 0bps yield shift £48m valuation uplift +0.9% ERV growth £125m spend in period Lower investment volumes recently; significant capital waiting on the sidelines pending further
Slide 24: Retail Valuation Movements
Retail Valuation Movements -10.7% Retail H1 valuation September ’19 movement Valuations (£’m) 3,500 3,000 2,500 Incl. Meadowhall, Glasgow Fort, Teesside Stockton, 2,000 New Mersey Speke 1,500 1,000 Incl. Drake Circus Incl. Ealing Plymouth, Bath Southgate Broadway, Kingston 500 Centre, Nugent Incl. O
Slide 25: CVAs & Admins
CVAs & Admins Annualised contracted rent impact by Quarter (£’m) 12 mths: £14m 12 mths: £8m 7.0 6.0 Admins - stores closing 5.0 CVAs - stores closing 4.0 CVAs - reduced rents 3.0 Incl. Debenhams and 2.0 Arcadia 1.0 0.0 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 T
Slide 26: Retail leasing overview
Retail leasing overview 96% Retail occupancy Commercialisation & car park income • 70k sq ft • £0.8m headline rent • 3 years average lease length • 1 mth average incentive Long term leasing +1% • 230k sq ft Assets to be developed • £4.8m headline rent • 80k sq ft • 15% ahead of passing rent • £0.7m
Slide 27: Continuing to outperform on key operational metrics
Continuing to outperform on key operational metrics British Land Footfall movement vs Benchmark1 BL Footfall Benchmark Outperformance (bps) % YoY +460 +240 +340 +230 +440 3.2 0.0 0.3 -0.1 -0.9 -1.4 -2.4 -3.1 -3.2 -4.5 FY16 FY17 FY18 FY19 H1 20 1 ShopperTrak UK National Index 27
Slide 28: Continuing to outperform on key operational metrics
Continuing to outperform on key operational metrics British Land LfL sales movement vs Benchmark1 BL LfL Sales Benchmark Outperformance (bps) % YoY +260 +220 +130 +160 +420 2.4 0.0 0.5 -0.2 -1.6 -1.5 -2.2 -2.9 -3.1 -3.7 FY16 FY17 FY18 FY19 H1 20 1 BRC KPMG In-Store LFL Non-Food Index 28
Slide 29: De-risked developments providing future income
De-risked developments 87% Pre-let or under offer providing future income across committed schemes Pence per share 4.6p annual EPS accretion once £m ERV committed developments fully let 5.0 70 4.5 4.0 60 To let 3.5 50 3.0 40 2.5 2.0 30 Pre-let or under offer 1.5 20 1.0 10 0.5 0.0 0 FY20 FY21 FY22 FY
Slide 30: Strength of debt metrics
Strength of debt metrics Proportionally Consolidated 31 Mar 2019 30 Sept 2019 Loan to value (LTV) 28.1% 30.8% Weighted Average Interest Rate 2.9% 2.7% Interest Cover 3.8x 3.7x Available Undrawn Facilities £1.5bn £1.4bn Weighted Average Drawn Debt Maturity 8.1yrs 7.9yrs Senior unsecured credit rating
Slide 31: Wrap Up
Wrap Up Chris Grigg, CEO
Slide 32: Key messages
Key messages 1 Continued operational resilience 2 Good progress on strategy - 1.3m sq ft leasing activity - Resolution to grant planning at - Portfolio 97% full Canada Water - Developments 87% pre let or - £236m retail sales under offer 3 Managing capital well 4 Pipeline of attractive opportunities
Slide 33: Outlook
Outlook • Retail – Occupational market to remain challenging – Investment market will be tough, but growing evidence that buyers returning to the market • London – Optimistic that current momentum will continue; function of supply as well as quality and location of our space – Benefitting from our 7
Slide 34: Appendices
STALIAN 70.60
Slide 35: A diverse, high quality portfolio £11.7bn
A diverse, high quality portfolio £11.7bn (BL share) Multi-let Retail (26%) London Campuses (45%) 72% London & South East Solus Retail (5%) Standalone offices (10%) Retail – London & SE (10%) Residential & Canada Water (4%) 35
Slide 36: Areas of focus to deliver our strategy
Areas of focus to deliver our strategy British Land is a mixed use commercial property company focused on London offices and high quality retail Customer Orientation Right Places We use our insight into customers’ needs and We design engaging, sustainable places identify major long term trends to cr
Slide 37: Why mixed use?
Why mixed use? Occupiers Employees want space which is… want space which is… Attractive to skilled Flexible Affordable Well connected Located in vibrant Well connected Safe and promotes Sustainable and employees neighbourhoods wellbeing eco friendly Tech Close to Aligned to Supported by Has a range
Slide 38: We have created a distinctive advantage in mixed use
We have created a distinctive advantage in mixed use • Mixed use campus development – 1 Broadgate, 2-3 Finsbury Avenue, 5 Kingdom Street near & medium term – 1.3m sq ft committed developments – Further opportunities Norton Folgate, Ealing, Kingston, Woolwich, Canada Water • Scale – Control of ground
Slide 39: Storey roll out
Storey roll out Current New & Forthcoming 6
Slide 40: Our Retail portfolio is well positioned to meet consumer and retailer demands
Our Retail portfolio is well positioned to meet both consumer and retailer demands BL centres Potential to reach Average rent c.50% BL asset catchments to sales ratio of the population 9% Annual footfall of Occupancy 302m cost ratio Source: CACI Retail Footprint 2019, BL Insight team Note that popul
Slide 41: Multi-let Retail assets
Multi-let Retail assets Regional Local Attracting visitors from a wide Fitting into the daily life of local communities catchment for a planned trip Southgate, Bath Mayflower, Basildon Inverness1 Nugent, Orpington Cornerhouse, Barrow The Woolwich Estate Botley Road, Oxford Broughton, Chester1 Hindpo
Slide 42: BL footfall performance vs benchmark
BL footfall performance vs benchmark +440bps Outperformance for 6m to Sep 2019 Jan-10 = 100 115 110 BL Index 105 100 95 90 85 Tyco (formerly Experian) Inde 80 75 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-1
Slide 43: Major retail property holdings
Major retail property holdings As at 30 September 2019 BL Share Sq ft Rent (100%) Occupancy Lease Length % 000’s £m pa1,4 Rate %2,4 yrs3,4 1 Meadowhall, Sheffield 50 1,500 85 97.4 5.2 2 Drake's Circus, Plymouth 100 1,082 19 96.0 5.6 3 Glasgow Fort 78 510 21 98.0 5.8 4 Ealing Broadway 100 540 15 92.7
Slide 44: Broadgate Campus
Broadgate Campus 2 FA & 3 FA • 2FA & 3FA - Innovation cluster inc. 51k sq ft of Storey space • 3FA – UBS surrendered lease in Jan 2018. ‘Light touch’ refurb completed • Current size: 189k sq ft • Potential size: 563k sq ft 1 FA • Pre-let 113k sq ft to Mimecast, 30k sq ft to Product Madness, 11k sq f
Slide 45: Paddington Central Campus
Paddington Central Campus 45
Slide 46: Regent's Place Campus
Regent’s Place Campus DRUMMOND STREET @ ROCK STREET EUSTON STATION TRITON STREET REGENTS — PLACE = TRITON SQUARE PLAZA a REGENTS. = PARK EUSTON SQUARE ©) ® @ ©) Se ysron ROAD one Pantano Wan since — @) 20 Triton Street @) 1 Osnaburgh Street ® 1-8 Longford Street @ UKPN Substation ® 1 Triton Square ©
Slide 47: Top occupiers & occupier split by industry
Top 20 occupiers & occupier split by industry Retail Top Occupiers Offices Top Occupiers Occupier Split by Industry (%) As at % of As at % of 30 September 2019 Retail 30 September 2019 Office Rent Rent Other 11% Fashion & Tesco1 7.6 Government 6.9 Beauty 19% Next 4.8 Facebook2 4.9 Home & DIY 6% King
Slide 48: Capital Activity
Capital Activity Since 1 April 2019 Offices Retail Residential Canada Water Total £m £m £m £m £m Purchases1 32 - 19 - 51 Sales2 - (236) (56) - (292) Development Spend 125 8 - 5 138 Capital Spend 20 16 - - 36 Net Investment 177 (212) (37) 5 (67) Gross Investment 177 260 75 5 517 On a proportionally c
Slide 49: Capital Activity £4.0bn
Capital Activity £4.0bn Gross investment activity since April 2017 Net Spend1 £m £45m (£502m) (£739m) (£721m) (£67m) 1,600 1,200 800 400 - (400) (800) (1,200) (1,600) (2,000) FY16 FY17 FY18 FY19 HY20 Sales Capital Investment Purchases Net Spend 1 Previous periods have been restated to exclude transa
Slide 50: Purchases
Purchases Since 1 April 2019 Sector Price Price Annual (100%) (BL Share) Passing Rent £m £m £m1 Completed Aldgate Place, Phase 2 Residential 19 19 - 6 Orsman Road, Haggerston2 Offices 32 32 - Total 51 51 - 50 1 BL share of annualised rent topped up for rent frees 2 Exchanged in period and completed
Slide 51: Sales
Sales Since 1 April 2019 Sector Price Price Annual (100%) (BL Share) Passing Rent £m £m £m1 Completed Portfolio of Sainsbury’s stores Retail 429 194 12 David Lloyd Croydon Retail 22 22 1 Clarges2 Residential 56 56 - Exchanged Homebase Walton on Thames Retail 20 20 1 Total 527 292 14 1 BL share of an
Slide 52: Clarges Residential Unit Sales
Clarges Residential Unit Sales Number of units £m Completed in FY18 2 24 Completed in FY19 23 335 Completed in HY201 5 56 Total Completed 30 415 Exchanged 2 25 Total Sold 32 440 Units under offer 1 6 Units remaining 1 4 Total 34 450 1 52 Of which 1 unit (£3m) exchanged in the period and completed po
Slide 53: H2 FY20 income statement guidance
H2 FY20 income statement guidance • Gross Rents • Financing – Annualised accounting gross rent of £522m – Weighted average interest rate now 2.7% as at 30 September 2019 on gross debt of £3.9bn – This incorporates the reduction to contracted rents as a – Undrawn facilities of £1.4bn, with commitment
Slide 54: Illustrative future income profile breakdown (cash basis)
Illustrative future income profile breakdown (cash basis) For the year to 31 March 2020 2021 2022 2023 2024 Total Accounting Basis As at 30 September 2019 £m £m £m £m £m £m Current Passing Rent 521 4 529 Contracted uplifts 20 22 3 - 1 46 Letting of Committed Developments1 26 22 - - - 48 39 Contracte
Slide 55: Gross rental income
Gross rental income1 Accounting Basis £m 6 months to 30 September 2019 Annualised as at 30 September 2019 Group JVs & Funds Total Group JVs & Funds Total West End 75 - 75 140 - 140 City 7 34 41 12 63 75 Offices 82 34 116 152 63 215 Regional 32 45 77 58 85 143 Local 44 12 56 89 22 111 Multi-let 76 57
Slide 56: Underlying Profit Bridge
Underlying Profit Bridge £m (15) (2) (5) 1 4 169 152 152 HY 2019 Net divestment and Share buybacks Excl. impact of Retail like-for-like Offices like-for-like Financing activities HY 2020 development capital activity net rent net rent and other 56
Slide 57: Administrative expenses
Administrative expenses 6 months to 30 September 2018 2019 £m £m Personnel costs 28 26 Share scheme costs (1) (1) Other administrative expenses 18 19 Total 45 44 Capitalised costs (3) (3) Total administrative expenses 42 41 On a proportionally consolidated basis including the Group's share of Joint
Slide 58: Operating costs metric
Operating costs metric 6 months to 30 September 2018 2019 £m £m Property operating expenses 24 32 Administrative expenses 42 41 Net fees and other income (6) (7) Ground rent costs and operating expenses de facto included in rents (4) (8) EPRA Costs (including direct vacancy costs) 56 58 Gross rental
Slide 59: Reconciliation of Underlying Profit
Reconciliation of Underlying Profit 6 months to 30 September 2018 2019 £m £m IFRS loss after tax attributable to shareholders (48) (404) Net valuation loss 265 576 Profit on disposal of investment and trading properties (65) (21) Capital financing costs 17 43 Non-controlling interests (19) (43) Taxa
Slide 60: Number of shares
Number of shares As at 31 Mar 2019 30 Sept 2019 (m) (m) IFRS Basic Weighted average1 971 941 IFRS Diluted Weighted average2 971 941 Underlying/EPRA diluted Weighted average3 974 944 Year/Period end4 956 933 1 For use in IFRS basic earnings per share. 2 For use in IFRS diluted earnings per share. A l
Slide 61: EPRA balance sheet
EPRA balance sheet 31 March 19 Group JVs & Funds 30 September 19 Total properties (£m) 12,316 8,434 3,289 11,723 Adjusted net debt (£m) (3,521) (2,794) (891) (3,685) Other net liabilities (£m) (146) (2) (52) (54) EPRA Net Assets (£m) 8,649 5,638 2,346 7,984 Loan to value (LTV)1 28.1% 30.8% Weighted
Slide 62: Reconciliation of EPRA NAV & NNNAV
Reconciliation of EPRA NAV & NNNAV 31 March 19 30 September 19 £m Pence £m pence IFRS Net Assets 8,689 916 7,971 860 Deferred tax arising on revaluation movements 5 6 Mark to market on derivatives and related debt adjustments 113 137 Adjust to fully diluted on exercise of share options 24 19 Surplus
Slide 63: Gross and net debt reconciliation
Gross and net debt reconciliation As at 30 September 2019 Group JVs & Funds Less non- Total £m £m controlling £m interests £m Gross Debt (principal) (3,039) (1,021) 120 (3,940) IFRS adjustments: Issue costs and premia 12 2 (1) 13 Fair value hedge adjustments (220) - - (220) Other items 4 - - 4 IFRS
Slide 64: Loan to value (LTV)
Loan to value (LTV) As at Valuation Acquisitions Capital Disposals Share Other As at 31 March movement spend buyback 30 September 2019 2019 £m £m Total properties 12,316 (531) 19 182 (263) - - 11,723 Other 151 5 - - - - 14 170 investments LTV assets 12,467 (526) 19 182 (263) - 14 11,893 Adjusted net
Slide 65: Debt metrics
Debt metrics Proportionally Consolidated 31 Mar 2019 30 Sept 2019 Loan to value (LTV) 28.1% 30.8% Weighted average interest rate 2.9% 2.7% Interest cover 3.8x 3.7x Weighted average maturity of drawn debt 8.1yrs 7.9yrs Group 31 Mar 2019 30 Sept 2019 Loan to value (LTV) 22.2% 25.4% Available undrawn f
Slide 66: Debt maturity (£m)
Debt maturity (£m) £m 1,200 Bank RCFs Undrawn (Unsecured) Bank RCFs Drawn (Unsecured) 1,000 Debenture & loan notes (Secured) Convertible Bond (Unsecured) Sterling Bond (Unsecured) 800 US Private Placements (Unsecured) Funds – Bank drawn (Secured) JVs – Securitisations (Secured) 600 400 200 - 2020 20
Slide 67: Debt financing – diverse profile
Debt financing – diverse profile • Issued £100m 2034 USPP floating rate note £3.9bn Drawn Debt1 (30 September 2019) – Follows repayment of a 5.5% £98m 2027 note Bank RCFs Drawn – Extends BL debt maturity / improves profits £0.4bn £0.4bn US Private Placements Convertible Bond • Extended £810m of comm
Slide 68: Portfolio valuation by sector
Portfolio valuation by sector As at 30 September 2019 Group JVs & Funds Total H1 Change %1 £m £m £m % £m West End 4,066 - 4,066 (0.1) (4) City 256 2,117 2373 1.3 30 Offices 4,322 2,117 6,439 0.4 26 Regional 649 1,536 2,185 (13.2) (334) Local 1,673 322 1,995 (11.1) (250) Multi-let 2,322 1,858 4,180 (
Slide 69: Valuation movement – Offices
Valuation movement – Offices 6 months to 30 September 2019 Valuation Change Change Yield movement ERV movement £m £m %1 bps2 %2 West End 4,066 (4) (0.1) 2 (0.2) City 2,373 30 1.3 (3) 2.9 Offices 6,439 26 0.4 - 0.9 Campuses represent 82% of the Offices portfolio 1 Valuation movement during the period
Slide 70: Valuation movement – Retail
Valuation movement – Retail 6 months to 30 September 2019 Valuation Change Change Yield movement ERV movement £m £m %1 bps2 %2 Regional 2,185 (334) (13.2) +41 (5.5) Local 1,995 (250) (11.1) +39 (4.7) Multi-let 4,180 (584) (12.3) +40 (5.1) Other 610 (15) (1.8) +14 0.0 Retail 4,790 (599) (10.7) +37 (4
Slide 71: Portfolio net yields
Portfolio net yields1,2 As at 30 September 2019 EPRA EPRA topped Overall Net Net Net ERV net initial up net initial topped up equivalent equivalent reversionary Growth 5 yield yield net initial yield yield yield % 3 % % yield % movement % 4 % bps West End 3.7 4.1 4.1 4.3 2 4.8 (0.2) City 3.4 4.0 4.0
Slide 72: Retail Portfolio Valuation – previous classification
Retail Portfolio Valuation – previous classification As at 30 September 2019 Group JVs & Funds Total H1 Change1 £m £m £m % £m Shopping parks 1,384 899 2,283 (12.4) (322) Shopping centres 927 942 1,869 (11.8) (250) Superstores 84 50 134 (1.5) (5) Department stores 62 - 62 (10.5) (7) High Street 153 1
Slide 73: Portfolio weighting
Portfolio weighting As at 30 September 2019 2018 2019 2019 % % £m West End 31.9 34.7 4,066 City 15.8 20.2 2,373 Offices 47.7 54.9 6,439 Regional 22.9 18.7 2,185 Local 17.2 17.0 1,995 Multi-let 40.1 35.7 4,180 Department Stores and Leisure 4.2 2.6 301 Superstores 2.8 1.1 134 Solus and Other 1.9 1.5 1
Slide 74: Lease length and occupancy
Lease length and occupancy As at 30 September 2019 Average Lease Length (yrs) Occupancy Rate (%) To Expiry To Break EPRA Occupancy Occupancy1,2,3 West End 6.2 5.0 97.0 97.3 City 7.0 5.9 84.8 97.1 Offices 6.5 5.3 92.6 97.2 Regional 6.9 5.6 95.4 96.1 Local 6.6 5.3 95.0 95.8 Multi-let 6.8 5.4 95.2 95.9
Slide 75: Annualised rent & estimated rental value (ERV)
Annualised rent & estimated rental value (ERV) As at 30 September 2019 Annualised Rents ERV Average Rent (Valuation Basis) £m1 £m (£psf) Group JVs & Funds Total Total Contracted2 ERV West End3 141 - 141 183 60.8 67.4 3 City 7 57 64 104 50.5 58.7 3 Offices 148 57 205 287 57.0 64.0 Regional 44 87 131
Slide 76: Rent subject to open market rent review
Rent subject to open market rent review For the year to 31 March 2020 2021 2022 2023 2024 2020–22 2020–24 As at 30 September 2019 £m £m £m £m £m £m £m West End 7 10 9 23 7 26 56 City 2 9 - - 15 11 26 Offices 9 19 9 23 22 37 82 Regional 5 18 12 11 8 35 54 Local 5 12 6 17 5 23 45 Multi-let 10 30 18 28
Slide 77: Rent subject to lease break or expiry
Rent subject to lease break or expiry For the year to 31 March 2020 2021 2022 2023 2024 2020-22 2020-24 As at 30 September 2019 £m £m £m £m £m £m £m West End 15 17 22 16 15 54 85 City 2 13 2 4 12 17 33 Offices 17 30 24 20 27 71 118 Regional 11 12 13 18 20 36 74 Local 11 11 14 12 19 36 67 Multi-let 2
Slide 78: Contracted rental increases (cash flow basis)
Contracted rental increases (cash flow basis) For the year to 31 March 2020 2021 2022 2023 2024 2020-22 2020-24 As at 30 September 2019 £m £m £m £m £m £m £m Expiry of rent free periods 11 21 1 - - 33 33 Fixed uplifts (EPRA basis) - - 1 - - 1 1 Fixed & minimum uplifts - 1 1 - 1 2 3 Total 11 22 3 - 1
Slide 79: Total Property Return (as calculated by IPD)
Total Property Return (as calculated by IPD) 6 months to 30 September 2019 Offices Retail Total % British Land IPD British Land IPD British Land IPD Capital Return 0.5 0.2 (11.0) (5.3) (4.3) (1.3) – ERV Growth 0.9 1.3 (4.8) (2.1) (2.3) 0.0 – Yield Movement1 0 bps 3 bps 37 bps 14 bps 17 bps 5 bps Inc
Slide 80: De-risked development pipeline focused on campuses
De-risked development pipeline focused on campuses Meadowhall Leisure 333,000 sq ft 2-3 Finsbury Avenue 563,000 sq ft 135 Bishopsgate 1 Triton Square Aldgate Place, Gateway 335,000 sq ft 366,000 sq ft Phase 2 Building Norton Folgate Completion Q1 2020 Completion Q4 2020 146,000 sq ft 105,000 sq ft 3
Slide 81: Recently Completed & Committed developments
Recently Completed & Committed developments As at Sector BL Sq PC Current Cost to ERV Let & 30 September 2019 Share ft Calendar Value Come Under Year Offer % '000 £m £m1 £m2 £m 1 Finsbury Avenue Office 50 287 Q1 2019 171 - 8.3 6.5 Total Completed in the Year 287 171 - 8.3 6.5 100 Liverpool Street Of
Slide 82: Near term development pipeline
Near term development pipeline As at Sector BL Sq ft Expected Current Cost to ERV Let & Planning 30 September 2019 Share Start on Value Come Under Status Site Offer % '000 Calendar £m £m1 £m2 £m Year Near Term Pipeline Norton Folgate Office 100 335 Q1 2020 83 243 23.0 - Consented 1 Broadgate Office
Slide 83: Medium term development pipeline
Medium term development pipeline As at 30 September 2019 Sector BL Share Sq ft Planning status % '000 Medium term Pipeline 2-3 Finsbury Avenue Office 50 563 Consented Gateway Building Leisure 100 105 Consented 5 Kingdom Street1 Office 100 429 Consented Meadowhall (Leisure) Retail 50 333 Consented Ea
Slide 84: Estimated future development spend and capitalised interest
Estimated future development spend and capitalised interest As at 30 September 2019 PC Cost to Come £m Calendar (excluding notional interest) – 6 months breakdown Year Mar-20 Sept-20 Mar-21 Sept-21 Mar-22 Sept-22 Mar-23 Sept-23 Total1 100 Liverpool Street Q1 2020 33 20 2 - - - - - 55 135 Bishopsgate
Slide 85: Canada Water – Illustrative Scheme
Canada Water – Illustrative Scheme First Masterplan detailed plots K1 Resolution to grant planning received 30th September 2019 L2 A1 H2 L1 Total NIA M1 H3 5.0m 0.6m H1 (sq ft) A2 D1 D2 Commercial 2.1m 0.3m (sq ft) Retail & Leisure 0.7m 0.1m (sq ft) New Homes 3,000 265 (units) Buildings highlighted
Slide 86: Canada Water: key milestones and timeline
Canada Water: key milestones and timeline Acquisition of 50% of Surrey MDA signed with Southwark Council Quays shopping centre Planning application submitted Remaining 50% of Surrey Quays 23 acres shopping centre acquired 23 acres Resolution to grant planning Conditional agreement Outline masterplan
Slide 87: Central London development pipeline
Central London development pipeline Q3 2019 Completed U/C Pre-let Pipeline Pre-let m sq ft U/C – Speculative Potential Speculative 10 year average new and under-construction take-up 12.0 10 year average development completions 10.0 8.0 6.0 5.2m 4.4m 4.0 2.0 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12
Slide 88: West End development pipeline
West End development pipeline Q3 2019 Completed U/C Pre-let Pipeline Pre-let m sq ft U/C – Speculative Potential Speculative 10 year average new and under-construction take-up 3.0 10 year average development completions 2.5 2.0 1.5 1.0 1.1m 0.5 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Slide 89: City development pipeline
City development pipeline Q3 2019 Completed U/C Pre-let Pipeline Pre-let m sq ft U/C – Speculative Potential Speculative 10 year average new and under-construction take-up 6.0 10 year average development completions 5.0 4.0 3.0 2.5m 2.0 2.0m 1.0 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Slide 90: London office market rental outlook
London office market rental outlook Prime London Office Rents West End City £ psf 140 120 100 80 60 40 20 Actual Forecast 0 1990 1995 2000 2005 2010 2015 2020 Source: CBRE (historic) and Average Agents' Consensus for forecasts 90
Slide 91: Vacancy Central London
Vacancy Central London West End West End & City Vacancy Rates West End 10 year average City 20 City 10 year 18 average 16 14 12 10 8 6 5.3% 4 3.4% 2 0 1985 1990 1995 2000 2005 2010 2015 Q3 2019 Source: CBRE (historic) 91
Slide 92: 2020 Sustainability Targets: FY19 performance
2020 Sustainability Targets: FY19 performance FY19 2020 Target Futureproofing 92% 100% developments on track to achieve BREEAM Excellent/Very Good Capital efficiency 44% 55% improvement in energy efficiency vs 2009 baseline 96% 100% of electricity to come from renewable sources Achieved: 64% 55% imp
Slide 93: Sustainability Indices Performance
Sustainability Indices Performance FY 2019 performance Other benchmarks and awards EPRA Sustainability Carbon Disclosure Project Global Real Estate Reporting Awards 2019: scores pending Sustainability Benchmark 2019: Gold for 8th year 2018: A- 2019: Green star for 10th year Sustainalytics MSCI ESG R
Slide 94: Disclaimer
Disclaimer The information contained in this presentation has been extracted largely from the Half Year Results Announcement for the six month period ending on 30 September 2019. For the purpose of this document, references to "presentation" shall be deemed to include this document, the oral briefin