British Land Company PLC · LSE:BLND
British Land — FY2019 Earnings Presentation
90 slides from British Land's earnings presentation, May 15, 2019
Slide 1: Full Year Results Presentation
Full Year Results Presentation Year ended 31 March 2019 www.britishland.com @BritishLandPLC #BLFY2019 $BLND
Slide 2: Introduction
Introduction Chris Grigg, CEO 2
Slide 3: We have delivered good operational and strategic progress
We have delivered good operational and strategic progress • Clear strategy focused on 3 core areas – Our London campuses; – A smaller retail portfolio – Residential • Good progress across the business – £1.5bn dry or off-strategy assets sold – 2.7m sq ft leasing activity; occupancy of 97% – Developm
Slide 4: Finance Review
Finance Review Simon Carter, CFO 4
Slide 5: Well positioned in uncertain markets
Well positioned in uncertain markets Strong Balance • Loan to value 28% Sheet • £1.4bn of new financing Low speculative • Current schemes 76% pre-let or under offer development risk • Speculative exposure 2.3% Future value • Near and medium term development opportunities accretive • £125m share buyb
Slide 6: Headlines
Headlines Financial Year to 31 March 2018 2019 Change % Underlying earnings per share (p) 37.4 34.9 (6.7%) Underlying Profit (£m) 380 340 (10.5%) Dividend per share (p) 30.08 31.00 3.0% Valuation performance 2.2% (4.8%) EPRA net asset value per share (p) 967 905 (6.4%) Loan to value (LTV) 28.4% 28.1
Slide 7: Underlying earnings per share
Underlying earnings per share Pence Offices 4.9% Retail 0.8% (2.1p) Total1 2.4% (1.4p) 1.5p (1.7p) 1.2p 37.4p 35.3p 34.9p 2018 Prior period 2018 excl. Impact of LfL rental Net divestment Share buyback 2019 surrender surrender CVAs and growth and premia Admins development 1 Like for like rental growt
Slide 8: De-risked developments providing future returns
De-risked developments providing future returns 76% Completed & committed developments Pence £m pre-let or under offer per share ERV 4.5p annual EPS 5 accretion once fully let 70 60 4 50 3 40 2 30 Pre-let or under 20 offer 1 10 0 - FY20 FY21 FY22 FY23 Committed Near Term 8
Slide 9: Income statement
Income statement Financial Year to 31 March 2018 2019 Change % Net rental income (£m) 576 532 (7.6%) Net finance costs (£m) (128) (121) (5.5%) Administrative expenses (£m) (83) (81) (2.4%) Fees & other income (£m) 15 10 (33.3%) Underlying Profit (£m) 380 340 (10.5%) Underlying earnings per share (p)
Slide 10: Valuation performance
Valuation performance FY to March 2019 Valuation Movement Movement Yield ERV NEY Weighting £m £m % movement movement % % Bps % Offices 6,308 80 1.1 +2 1.4 4.4 51 Retail 5,577 (752) (11.1) +37 (3.8) 5.6 45 Residential 128 (6) (4.4) n/a n/a n/a 1 Canada Water 303 (2) (0.8) n/a n/a n/a 3 Total 12,316 (
Slide 11: Retail Valuation Movements
Retail Valuation Movements March ’19 82% of rent lost through CVA/admin is at Valuations (£’m) assets seeing more than 10% valuation decline 1,500 1,000 500 - More than 0% 0% to -5% -5% to -10% -10% to -15% -15% to -20% More than -20% Local Multi-let Regional Multi-let Superstores Leisure Solus Depa
Slide 12: CVAs and Administrations over last 2 years
CVAs and Administrations over last 2 years Since 1 April 2017 Contracted Number of % of Annualised contracted rent impact rent reduction Stores CVAs by Quarter (£’m) £’m 7.0 Admins - stores closing Number of stores in CVAs - stores closing c.2,000 portfolio 6.0 CVAs - reduced rents Stores exposed to
Slide 13: Retail Operational Performance
Retail Operational Performance New Lettings & Renewals Rent Reviews Occupancy Floor Floor Net Vs Net Effective Vs Area (Sq Area (Sq Effective Previous Rent (£’m) ERV ft ‘000) ft ‘000) Rent (£’m) Rent Total Retail 1,587 25.8 +0.3% 1,795 38.2 +2.3% 96.7% Regional multi-let 720 13.1 +4.0% 358 10.2 4.7%
Slide 14: EPRA net asset value
EPRA net asset value (68p) 35p (30p) (7p) 10p (2p) 967p 905p Mar 18 Valuation Underlying Dividends Financing Share Other Mar 19 performance Profit activity buyback 14
Slide 15: Strength of debt metrics
Strength of debt metrics Proportionally Consolidated 31 Mar 2018 31 Mar 2019 Loan to value (LTV) 28.4% 28.1% Weighted Average Interest Rate 2.8% 2.9% Interest Cover 4.0x 3.8x Available Undrawn Facilities £1.2bn £1.5bn Weighted Average Drawn Debt Maturity 8.6 8.1 Senior unsecured credit rating (Fitch
Slide 16: Well positioned in uncertain markets
Well positioned in uncertain markets Strong Balance • Loan to value 28% Sheet • £1.4bn of new financing Low speculative • Current schemes 76% pre-let or under offer development risk • Speculative exposure 2.3% Future value • Near and medium term development opportunities accretive • £125m share buyb
Slide 17: Update on Strategy
Update on Strategy Chris Grigg, CEO 18
Slide 18: Good progress against our clear strategy
Good progress against our clear strategy Mixed Use places to work, shop and live Offices Retail Residential • Focused on London campuses • Smaller more focused portfolio • Principally build to rent • 1FA completed and planning • £646m assets sold or under • Sales of 25 units completed at achieved on
Slide 19: How mixed use delivers value
How mixed use delivers value 1• Taking market share – Our activity accounts for 8% of the central London leasing market with 2.5% of the stock 2• Delivering higher rents – Most recent lettings at £80psf at Broadgate – vs £71psf for City prime rents and £49psf at Broadgate in 2015 – Attracting a wide
Slide 20: How our campuses deliver mixed use
How our campuses deliver mixed use Connectivity & Scale Right Mix of Uses Vibrant Local Flexibility Neighbourhoods Located in some of London’s most Range of office space in terms of World class office space exciting areas size, specification and location Dining opportunities including Complementary
Slide 21: 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 22: The expertise to deliver 100 Liverpool Street
The expertise to deliver 100 Liverpool Street • Thoughtful design – Large but divisible floorplates providing flexibility – 90,000 sq ft retail and dining – 20,000 sq ft outdoor terraces • Working with a range of stakeholders – City planners, TfL, local communities – Minimal disruption to campus occ
Slide 23: A long term focus on Sustainability
A long term focus on Sustainability • Strong track record of environmental improvement – Carbon intensity 64% lower vs. 2009 – Energy intensity 44% lower vs. 2009 – 2 megawatts capacity from renewables • Deep focus on skills, opportunity and community – 1,232 people supported into employment since 2
Slide 24: A smaller, more focused Retail business
A smaller, more focused Retail business • £646m asset disposals since April 2018 £2.9bn asset sales since April 2014 – Range of assets, including solus retail and leisure, superstores and smaller multi-lets £m 1.4 – Only progressed sales which delivered value • £193.5m superstores sales 1.2 – Sold a
Slide 25: Residential
Residential • Continued progress at Clarges – Completed on 23 apartments in FY19 – Total of 25 units completed and 2 further exchanged, generating £383m sales – Under offer on a further 3 units, leaving 4 remaining representing sales of £34m – Total profits of £200m, IRR of 18.5% • Build to Rent – F
Slide 26: Progressing our vision for Canada Water
Progressing our vision for Canada Water 120 public consultations Attended by more than 5,000 people Providing 12,000 comments 26
Slide 27: Outlook
Outlook • London: unconventional cycle continuing – Brexit constraining office supply; pipeline likely to shift out – Occupier demand for the best quality space to remain good – Yields attractive vs other European cities • Retail: likely to remain challenging – Signs some short term operational pres
Slide 28: 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% 51% 45% 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 29: Appendices
Appendices
Slide 30: 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 31: 83% of our Retail & Office assets are within our managed environments
83% of our Retail & Office assets are within our managed environments Retail & Offices Leisure £6.3bn 63% £5.6bn 80% of Office assets London 85% of Retail assets are at our campuses Weighting are multi-let Further £0.3bn at Canada Water and £0.1bn of standalone Residential assets Figures shown on a
Slide 32: 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 Broughton, Chester1 Cornerhouse, Barrow The Woolwich Estate Botley Road, Oxford Fort K
Slide 33: 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 local centres BL regional centres Potential to reach Average rent to sales ratio 60% BL asset catchments of the population 9% Annual footfall of Occupancy cost ratio 305m Source: CACI Retail Footprint 2017, BL Insi
Slide 34: Physical store openings significantly boost retailers' online presence
Physical store openings significantly boost retailers’ online presence Postal area share of retailer website visits Indexed vs. start of store opening period 170 160 150 140 130 120 +52% 110 100 90 80 -20 weeks -15 -10 -5 Store Opening 5 10 15 +20 weeks Note: Based on a sample of 29 retailers openin
Slide 35: BL footfall performance vs benchmark
BL footfall performance vs benchmark +230bps Jan-10 = 100 Outperformance for 12m to March 2019 115 110 BL Index 105 100 95 90 Tyco (formerly Experian) Index 85 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 B
Slide 36: Major property holdings
Major property holdings At 31 March 2019 BL Share Sq ft Rent (100%) Occupancy Lease Length % 000’s £m pa1,4 Rate %2,4 yrs3,4 1 Broadgate 50 4,133 138 96.7 5.5 2 Regent's Place 100 1,740 77 98.7 5.6 3 Paddington Central 100 958 45 97.2 5.4 4 Meadowhall, Sheffield 50 1,500 88 98.9 5.9 5 Glasgow Fort 7
Slide 37: Broadgate Campus
Broadgate Campus 2 FA & 3 FA • 2FA & 3FA - Innovation cluster inc. 50k sq ft of Storey space • 3FA – UBS surrendered lease in Jan 2018. ‘Light touch’ refurb completed, now 100% let/under offer • Current size: 189k sq ft • Potential size: 563k sq ft 1 FA • Pre-let 113k sq ft to Mimecast, 30k sq ft to
Slide 38: Paddington Central Campus
Paddington Central Campus 38
Slide 39: Regent's Place Campus
Regent’s Place Campus o) TRITON STREET aS TRITON SQUARE REGENT'S PARK 2 eyston ROAD BROCK STREET REGENTS PLACE PLAZA ORUMMOND STREET @ WARREN STREET EUSTON STATION ha evston SuUAnE @ 20 Triton street (@) 1 Osnaburgh Street ® 1-8 Longford Street @ UKEN Substation ® 1 Triton Square ©) 10Brock Street @
Slide 40: Top occupiers & occupier split by industry
Top 20 occupiers & occupier split by industry As at 31 March 2019 % of Contracted Rent Occupier Split by Industry (%) Tesco1 4.8 Other 9% Sainsbury's2 3.7 Fashion & Beauty Debenhams3 3.4 19% Home & DIY 6% Government 3.0 Next 2.6 Grocery & Kingfisher 2.3 Convenience 9% Facebook3 2.0 Dentsu Aegis4 2.0
Slide 41: Capital Activity
Capital Activity Since 1 April 2018 Offices Retail Residential Canada Water Total £m £m £m £m £m Purchases 129 110 - - 239 Sales1 (500) (646) (359) - (1,505) Development Spend 212 31 11 21 275 Capital Spend 20 33 - - 53 Net Investment (139) (472) (348) 21 (938) Gross Investment 861 820 370 21 2,072
Slide 42: Capital Activity £2.1bn
Capital Activity £2.1bn Gross investment activity since April 2018 Net Spend1 £m (£47m) £45m (£502m) (£739m) (£938m) 1,600 1,200 800 400 - (400) (800) (1,200) (1,600) (2,000) 2015 2016 2017 2018 2019 Sales Capital Investment Purchases Net Spend 1 Previous periods have been restated to exclude transa
Slide 43: Purchases
Purchases Since 1 April 2018 Sector Price Price Annual (100%) (BL Share) Passing Rent £m £m £m1 Completed Royal Victoria Place, Tunbridge Wells Retail 92 92 3 184 – 192 Drummond Street Offices 38 38 1 158 – 164 Bishopsgate Offices 36 36 2 6 – 8 Eldon Street Offices 27 14 1 Hercules Unit Trust units
Slide 44: Sales (1 of 2)
Sales (1 of 2) Since 1 April 2018 Sector Price Price Annual (100%) (BL Share) Passing Rent £m £m £m2 Completed 5 Broadgate Offices 1,000 500 18 Portfolio of Spirit Pubs Retail 123 123 11 Cheltenham Gallagher Retail Park Retail 73 28 1 Clapham Junction Debenhams Retail 48 48 2 Richmond Homebase1 Reta
Slide 45: Sales (2 of 2)
Sales (2 of 2) Since 1 April 2018 Sector Price Price Annual (100%) (BL Share) Passing Rent £m £m £m3 Completed Southampton David Lloyd Retail 15 15 1 Harrow Homebase Retail 14 14 1 Brentwood Virgin Active Retail 12 12 1 Hamilton David Lloyd Retail 10 10 1 Northallerton Sainsburys Retail 7 3 - Lancas
Slide 46: Clarges Residential Unit Sales
Clarges Residential Unit Sales Number of units £m Completed in FY18 2 24 Completed in FY19 23 335 Total Completed 25 359 Exchanged (of which 1 exchanged post year end) 2 24 Total Sold 27 383 Units under offer 3 35 Units remaining 4 34 Total 34 452 46
Slide 47: FY20 income statement guidance
FY20 income statement guidance • Net Rents • Financing – Relative to FY19 reported net rental income of – Weighted average interest rate 2.9% £532m: on gross debt of £3.9bn – FY19 net divestment activity expected to reduce – Undrawn facilities of £1.5bn as at 31 March, net rents by £20m. Transaction
Slide 48: 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 At 31 March 2019 £m £m £m £m £m £m Current Passing Rent 547 4 545 Contracted uplifts 35 4 2 - 1 42 Letting of Committed Developments1 - 21 22 - - 43 37 Contracted rent 6
Slide 49: Gross rental income
Gross rental income1 Accounting Basis £m 12 months to 31 March 2019 Annualised as at 31 March 2019 Group JVs & Funds Total Group JVs & Funds Total West End 141 - 141 140 - 140 City 9 70 79 7 68 75 Offices 150 70 220 147 68 215 Regional 57 90 147 57 86 143 Local 98 24 122 90 23 113 Multi-let 155 114
Slide 50: Underlying Profit Bridge
Underlying Profit Bridge £m (20) (13) (6) (14) 15 1 (3) 380 340 FY18 Prior period Net divestment Developments Impact of CVAs Like-for-like Financing Other FY19 surrender (including share and rental growth activity premia buyback) administrations exc. CVAs and administrations 50
Slide 51: Administrative expenses
Administrative expenses Financial Year to 31 March 2018 2019 £m £m Personnel costs 52 53 Share scheme costs - (3) Other administrative expenses 36 37 Total 88 87 Capitalised costs (5) (6) Total administrative expenses 83 81 On a proportionally consolidated basis including the Group's share of Joint
Slide 52: Operating costs metric
Operating costs metric Financial Year to 31 March 2018 2019 £m £m Property operating expenses 37 44 Administrative expenses 83 81 Net fees and other income (15) (10) Ground rent costs and operating expenses de facto included in rents (2) (9) EPRA Costs (including direct vacancy costs) 103 106 Gross
Slide 53: Reconciliation of Underlying Profit
Reconciliation of Underlying Profit Financial Year to 31 March 2018 2019 £m £m IFRS profit / (loss) before tax 501 (318) Net valuation (profit)/loss (254) 654 Profit on disposal of investment and trading properties (29) (89) Capital financing costs 176 64 Non-controlling interests (14) 29 Underlying
Slide 54: Number of shares
Number of shares As at 31 March 2018 31 March 2019 (m) (m) IFRS Basic Weighted average1 1,013 971 IFRS Diluted Weighted average2 1,016 974 Underlying/EPRA diluted Weighted average3 1,016 974 Year/Period end4 989 956 1 For use in IFRS basic earnings per share 2 For use in IFRS diluted earnings per sh
Slide 55: EPRA balance sheet
EPRA balance sheet 31 March 18 Group JVs & Funds 31 March 19 Total properties (£m) 13,716 8,711 3,605 12,316 Adjusted net debt (£m) (3,973) (2,559) (962) (3,521) Other net liabilities (£m) (183) (72) (74) (146) EPRA Net Assets (£m) 9,560 6,080 2,569 8,649 Loan to value (LTV)1 28.4% 22.2% 28.1% Weigh
Slide 56: Reconciliation of EPRA NAV & NNNAV
Reconciliation of EPRA NAV & NNNAV 31 March 18 31 March 19 £m Pence £m pence IFRS Net Assets 9,506 967 8,689 916 Deferred tax arising on revaluation movements 5 6 Mark to market on derivatives and related debt adjustments 137 113 Adjust to fully diluted on exercise of share options 32 24 Surplus on
Slide 57: Gross and net debt reconciliation
Gross and net debt reconciliation As at 31 March 2019 Group JVs & Funds Less non- Total £m £m controlling £m interests £m Gross Debt (principal) (2,881) (1,126) 112 (3,895) IFRS adjustments: Issue costs and premia 12 2 - 14 Fair value hedge adjustments (170) - - (170) Other items 8 (2) 1 7 IFRS gros
Slide 58: Loan to value (LTV)
Loan to value (LTV) As at Valuation Acquisitions Capital spend Disposals Share Other As at 31 March 2018 movement buyback 31 March 2019 £m £m Total properties 13,716 (654) 232 292 (1,266) (4) 12,316 Other investments 172 (21) 151 LTV assets 13,888 (654) 232 292 (1,266) (25) 12,467 Adjusted net debt
Slide 59: Debt metrics
Debt metrics Proportionally Consolidated 31 Mar 2018 31 Mar 2019 Loan to value (LTV) 28.4% 28.1% Weighted average interest rate 2.8% 2.9% Interest cover 4.0x 3.8x Weighted average maturity of drawn debt 8.6yrs 8.1yrs Group 31 Mar 2018 31 Mar 2019 Loan to value (LTV) 22.1% 22.2% Available undrawn fac
Slide 60: Debt maturity (£m)
Debt maturity (£m) Bank RCFs Undrawn (Unsecured) £m Bank RCFs Drawn (Unsecured) Debenture & loan notes (Secured) Convertible Bond (Unsecured) 1,400 Sterling Bond (Unsecured) US Private Placements (Unsecured) 1,200 Funds – Bank drawn (Secured) JVs – Securitisations (Secured) 1,000 800 600 400 200 0 2
Slide 61: Debt financing – diverse profile
Debt financing – diverse profile • £1.4bn of new finance raised £3.9bn Drawn Debt1 (31 March 2019) – Amended and extended our largest syndicated RCF at £735m – Issued new £231m USPP £0.3bn Bank RCFs Drawn (Unsecured) £0.4bn • Repaid £223m (£111m BL%) of secured US Private Placements (Unsecured) Broa
Slide 62: Valuation movement – Offices
Valuation movement – Offices Financial Year to March 2019 Valuation Change Change Yield movement ERV movement £m £m %1 bps2 %2 West End 4,066 28 0.7 +3 1.4 City 2,242 52 1.9 - 1.3 Offices 6,308 80 1.1 +2 1.4 Campuses represent 80% of the Offices portfolio 1 Valuation movement during the period (afte
Slide 63: Valuation movement – Retail
Valuation movement – Retail Financial Year to March 2019 Valuation Change Change Yield movement ERV movement £m £m %1 bps2 %2 Regional 2,764 (329) (10.6) +36 (2.2) Local 1,973 (359) (14.9) +48 (6.2) Multi-let 4,737 (688) (12.5) +41 (4.0) Other 840 (64) (5.0) +17 (2.7) Retail 5,577 (752) (11.1) +37 (
Slide 64: Portfolio valuation by sector
Portfolio valuation by sector At 31 March 2019 Group JVs & Funds Total Change %1 £m £m £m H1 H2 FY West End 4,066 - 4,066 0.3 0.3 0.7 City 230 2,012 2,242 1.4 0.7 1.9 Offices 4,296 2,012 6,308 0.7 0.5 1.1 Regional 997 1,767 2,764 (4.0) (6.9) (10.6) Local 1,613 360 1,973 (6.8) (8.8) (14.9) Multi-let
Slide 65: Portfolio net yields
Portfolio net yields1,2 At 31 March 2019 EPRA EPRA topped up Overall topped Net Net reversionary net initial net initial up equivalent yield % 3 yield % yield % net initial yield % 4 yield % West End 3.6 4.0 4.0 4.3 4.8 City 4.0 4.4 4.4 4.7 5.3 Offices 3.8 4.1 4.2 4.4 5.0 Regional 4.8 5.0 5.1 5.3 5.
Slide 66: Portfolio yield & ERV movements
Portfolio yield & ERV movements1 3 2 3 At 31 March 2019 NEY ERV Growth % NEY Yield Movement bps % H1 H2 FY H1 H2 FY West End 4.3 0.2 1.1 1.4 - 2 3 City4 4.7 0.1 1.2 1.3 1 - - Offices 4.4 0.2 1.1 1.4 1 1 2 Regional 5.3 (0.8) (1.4) (2.2) 9 27 36 Local 5.9 (2.5) (3.8) (6.2) 20 27 48 Multi-let 5.6 (1.6)
Slide 67: Retail Portfolio Valuation – previous classification
Retail Portfolio Valuation – previous classification At 31 March 2019 Valuation Change %1 ERV movement %2 NEY Yield Movement bps £m H1 H2 FY H1 H2 FY H1 H2 FY Shopping parks 2,593 (5.5) (8.5) (13.2) (2.1) (2.6) (4.6) 13 35 47 Shopping centres 2,115 (3.7) (6.3) (9.8) (0.1) (2.0) (2.1) 13 20 34 Supers
Slide 68: Portfolio weighting
Portfolio weighting At 31 March 2019 2018 2019 2019 % % £m West End 31.0 33.0 4,066 City 17.9 18.2 2,242 Offices 48.9 51.2 6,308 Regional 22.1 22.4 2,764 Local 16.7 16.1 1,973 Multi-let 38.8 38.5 4,737 Department Stores and Leisure 4.3 2.6 323 Superstores 2.6 2.7 332 Solus and Other 2.3 1.5 185 Reta
Slide 69: Lease length and occupancy
Lease length and occupancy At 31 March 2019 Average Lease Length (yrs) Occupancy Rate (%)1 To Expiry To Break EPRA Occupancy Occupancy2,3 West End 6.8 5.7 97.2 98.3 City 6.6 5.7 93.2 96.6 Offices 6.7 5.7 95.8 97.7 Regional 7.2 6.0 95.7 97.0 Local 6.9 5.6 94.7 95.3 Multi-let 7.0 5.8 95.3 96.2 Departm
Slide 70: Annualised rent & estimated rental value (ERV)
Annualised rent & estimated rental value (ERV) At 31 March 2019 Annualised Rents ERV Average Rent (Valuation Basis) £m1 £m (£psf) Group JVs & Funds Total Total Contracted2 ERV West End3 139 - 139 184 58.6 67.2 3 City 7 67 74 101 48.7 57.6 3 Offices 146 67 213 285 54.8 63.5 Regional 58 90 148 166 31.
Slide 71: 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 At 31 March 2019 £m £m £m £m £m £m £m West End 4 15 10 9 13 29 51 City 13 4 9 - - 26 26 Offices 17 19 19 9 13 55 77 Regional 9 19 13 11 9 41 61 Local 11 12 5 17 5 28 50 Multi-let 20 31 18 28 14
Slide 72: 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 At 31 March 2019 £m £m £m £m £m £m £m West End 4 19 22 26 15 45 86 City 15 10 2 3 13 27 43 Offices 19 29 24 29 28 72 129 Regional 17 10 12 19 20 39 78 Local 15 10 13 12 20 38 70 Multi-let 32 20 25
Slide 73: 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 At 31 March 2019 £m £m £m £m £m £m £m Expiry of rent free periods 27 3 1 - - 31 31 Fixed uplifts (EPRA basis) - - 1 - - 1 1 Fixed & minimum uplifts 1 1 - - 1 2 3 Total 28 4 2 - 1 34 35 On
Slide 74: Total Property Return (as calculated by IPD)
Total Property Return (as calculated by IPD) 12 months to 31 March 2019 Offices Retail Total % British Land IPD British Land IPD British Land IPD Capital Return 1.4 2.0 (11.4) (7.3) (5.0) 0.1 – ERV Growth 1.4 1.2 (3.8) (3.3) (1.6) 0.2 – Yield Movement1 2 bps (10 bps) 37 bps 26 bps 19 bps (1 bps) Inc
Slide 75: 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 Gateway Norton Folgate Building 335,000 sq ft 366,000 sq ft 335,000 sq ft 105,000 sq ft Completion Q3 2019 Completion Q4 2020 5 Kingdom Street 429,000
Slide 76: Recently Completed & Committed developments
Recently Completed & Committed developments At 31 March 2019 Sector BL Sq PC Current Cost to ERV Let & Share ft Calendar Value Come Under Year Offer % '000 £m £m1 £m2 £m 1 Finsbury Avenue Office 50 287 Q1 2019 153 11 8.2 4.7 Total Completed in the Year 287 153 11 8.2 4.7 100 Liverpool Street Office
Slide 77: Near term development pipeline
Near term development pipeline At 31 March 2019 Sector BL Sq Expected Current Cost to ERV Let & Planning Share ft Start on Value Come Under Status Site Offer % '000 Calendar £m £m1 £m2 £m Year Near Term Pipeline Norton Folgate Office 100 335 Q3 2019 62 206 20.6 - Consented 1–2 Broadgate Office 50 53
Slide 78: Medium term development pipeline
Medium term development pipeline At 31 March 2019 Sector BL Sq ft Planning status Share % '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 Ealing –
Slide 79: Estimated future development spend and capitalised interest
Estimated future development spend and capitalised interest At 31 March 2019 PC Cost to Come £m Calendar (excluding notional interest) – 6 months breakdown Year Sep-19 Mar-20 Sept-20 Mar-21 Sept-21 Mar-22 Sept-22 Mar-23 100 Liverpool Street Q1 2020 51 16 7 8 - - - - 135 Bishopsgate Q3 2019 33 1 - -
Slide 80: Canada Water – Illustrative Scheme
Canada Water – Illustrative Scheme First detailed Masterplan plots K1 Detailed planning Outline submitted in Submitted May 18 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 ab
Slide 81: 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 Conditional agreement to acquire Printworks Surrey Quays leisure park
Slide 82: Central London development pipeline
Central London development pipeline Completed U/C Pre-let Pipeline Pre-let Q1 2019 U/C – Speculative Potential Speculative m sq ft 10 year average new and under-construction take-up 10 year average development completions 12.0 10.0 8.0 6.0 5.0m 4.0 4.2m 2.0 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12
Slide 83: West End development pipeline
West End development pipeline Completed U/C Pre-let Pipeline Pre-let U/C – Speculative Q1 2019 Potential Speculative 10 year average new and under-construction take-up m sq ft 10 year average development completions 3.0 2.5 2.0 1.5 1.0 1.0m 0.5 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Slide 84: City development pipeline
City development pipeline Completed U/C Pre-let Pipeline Pre-let Q1 2019 U/C – Speculative Potential Speculative 10 year average new and under-construction take-up m sq ft 10 year average development completions 6.0 5.0 4.0 3.0 2.4m 2.0 1.9m 1.0 0.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Slide 85: 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 85
Slide 86: 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 5.5% 4 3.6% 2 0 1985 1990 1995 2000 2005 2010 2015 Q1 2019 Source: CBRE (historic) 86
Slide 87: 2020 Sustainability Targets: FY19 performance
2020 Sustainability Targets: FY19 performance FY19 2020 Target Futureproofing 92% 100% new 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%
Slide 88: CSR & Sustainability – Highlights of our progress
CSR & Sustainability – Highlights of our progress Customer Orientation Right Places Capital Efficiency Expert People Wellbeing Community Futureproofing Skills & opportunity • We published research quantifying • We supported over 36,000 people • Our whole-life carbon strategy at 1 • We have now helpe
Slide 89: Sustainability Indices Performance
Sustainability Indices Performance FY 2019 performance Other benchmarks and awards EPRA Sustainability Global Real Estate Reporting Awards Carbon Disclosure Project Sustainability Benchmark 2018: Gold for 7th year 2018: A- 2018: Green star for 9th year Sustainalytics MSCI ESG Ratings ESG Ratings FTS
Slide 90: Disclaimer
Disclaimer The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the year ended 31 March 2019. For the purpose of this document, references to "presentation" shall be deemed to include this document, the oral briefing provided by Britis