Derwent London Plc · LSE:DLN
Derwent London — Investor Day (September 2021)
150 slides from Derwent London's investor day presentation, Sep 28, 2021
Slide 1: Investor Day Presentation
DERWENT LONDON INVESTOR DAY PRESENTATION 28 SEPTEMBER 2021 PAGE 1
Slide 2: Agenda for the Day
AGENDA FOR THE DAY 11:00 Registration and Coffee 11:30 Presentations Market Update Developments Investment Activity Q&A 13:15 Lunch 14:00 Property Tour 16:30 Drinks PAGE 2
Slide 3: Introduction
INTER GRU PPA Ups Walt liclileks Mos LON
Slide 4: Derwent London Background
DERWENT LONDON BACKGROUND POSITIVE FIRST HALF RESULTS TO JUNE 2021 OUR • Total return +2.7% DEVELOPMENT • EPRA earnings per share 54.0p, +10.5% PIPELINE On-site On-site • Interim dividend per share 23.0p, +4.5% developments developments • EPRA NTA per share 3,864p, +1.4% 410,000 sqft ft 410,000 sq •
Slide 5: Investing in the Portfolio
INVESTING IN THE PORTFOLIO Latest retrofitting projects Derwent London EPC Property Target compliance 2023 ‘E’ or better 99% 2030* ‘B’ or better 43% 6-8 Greencoat Place SW1 Proposed Reception view - Opt *Current UK government White Paper Francis House SW1 Design proposals C1 PAGE 5 Rev A RCO 03/02/2
Slide 6: Agenda for the Day
AGENDA FOR THE DAY 11:30 Presentations Market Update Developments Investment Activity Q&A 13:15 Lunch 14:00 Property Tour 16:30 Drinks PAGE 6
Slide 7: Market Update & Occupier Drivers
MARKET UPDATE & OCCUPIER DRIVERS OUR RESPONSE
Slide 8: Agenda
AGENDA K E T ) London Office Occupier Market Update What Is Happening In Our Portfolio Key Demand Drivers & Our Response Thinking About Design A Sustainable Portfolio - Net Zero Carbon Digital Strategy & An Intelligent Portfolio PAGE 8
Slide 9: London Office Occupier Market Update
LONDON OFFICE OCCUPIER MARKET UPDATE
Slide 10: Central London Office Occupier Market
CENTRAL LONDON OFFICE OCCUPIER MARKET K Market & Sentiment Take-up / Under Offers Improving Increasing Flight to Quality Supply Driving pre-letting activity Total supply is levelling off Beyond the Demise Demand Good demand for amenity, high Greater transparency & rising sustainability credentials &
Slide 11: Key Occupier Metrics
KEY OCCUPIER METRICS K E T ) T AKE-UP UNDER OFFER AVAILABILITY VACANCY ( SQ FT) (SQ FT) (SQ FT) RATE (%) Q1 2021 1.4m 1.9m 25.7m 8.8% QUARTERLY Q2 2021 1.6m 2.8m 26.1m 9.3% July 2021 0.5m 3.6m 26.7m 9.4% MONTHLY August 2021 0.8m 3.7m 26.7m 9.4% Source: CBRE PAGE 11
Slide 12: Key Occupier Metrics
KEY OCCUPIER METRICS K E T ) T AKE-UP UNDER OFFER AVAILABILITY VACANCY ( SQ FT) (SQ FT) (SQ FT) RATE (%) Q1 2021 1.4m 1.9m 25.7m 8.8% QUARTERLY Q2 2021 1.6m 2.8m 26.1m 9.3% July 2021 0.5m 3.6m 26.7m 9.4% MONTHLY August 2021 0.8m 3.7m 26.7m 9.4% Source: CBRE PAGE 12
Slide 13: Key Occupier Metrics
KEY OCCUPIER METRICS K E T ) T AKE-UP UNDER OFFER AVAILA BILITY VACANCY ( SQ FT) (SQ FT) (SQ FT) RATE (%) Q1 2021 1.4m 1.9m 25.7m 8.8% QUARTERLY Q2 2021 1.6m 2.8m 26.1m 9.3% July 2021 3.6m 26.7m 9.4% MONTHLY 1.3m August 2021 3.7m 26.7m 9.4% Source: CBRE PAGE 13
Slide 14: Key Occupier Metrics
KEY OCCUPIER METRICS K E T ) T AKE-UP UNDER OFFER AVAILABILITY VACANCY ( SQ FT) (SQ FT) (SQ FT) RATE (%) Q1 2021 1.4m 1.9m 25.7m 8.8% QUARTERLY Q2 2021 1.6m 2.8m 26.1m 9.3% July 2021 0.5m 3.6m 26.7m 9.4% MONTHLY August 2021 0.8m 3.7m 26.7m 9.4% Source: CBRE PAGE 14
Slide 15: Key Occupier Metrics
KEY OCCUPIER METRICS K E T ) T AKE-UP UNDER OFFER AVAILABILITY VACANCY ( SQ FT) (SQ FT) (SQ FT) RATE (%) Q1 2021 1.4m 1.9m 25.7m 8.8% QUARTERLY Q2 2021 1.6m 2.8m 26.1m 9.3% July 2021 0.5m 3.6m 26.7m 9.4% MONTHLY August 2021 0.8m 3.7m 26.7m 9.4% Source: CBRE PAGE 15
Slide 16: Key Occupier Metrics
KEY OCCUPIER METRICS K E T ) T AKE-UP UNDER OFFER AVAILABILITY VACANCY ( SQ FT) (SQ FT) (SQ FT) RATE (%) Q1 2021 1.4m 1.9m 25.7m 8.8% QUARTERLY Q2 2021 1.6m 2.8m 26.1m 9.3% July 2021 0.5m 3.6m 26.7m 9.4% MONTHLY August 2021 0.8m 3.7m 26.7m 9.4m Source: CBRE PAGE 16
Slide 17: Take-up
TAKE-UP K E T ) Central London office take-up (million sq ft) 20 Take-up YTD: 18 4.3m sq ft 16 14 Annual average 12 2021 monthly average 10 54% higher than 8 Apr-Dec 2020 Under offer 6 4 41% lower than 2 5-year average 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 Source: CBRE
Slide 18: Under Offer
UNDER OFFER K E T ) 1-2 Broad St, EC2 Belgrove House, WC1 280,000 sq ft 180,000 sq ft S Q FT Q1 2021 1.9m Bloom, EC1 40 Leadenhall St, EC3 112,000 sq ft 70,000 sq ft Q2 2021 2.8m August 2021 3.7m 20 Old Bailey, EC4 280 Bishopsgate, EC2 Source: CBRE 58,000 sq ft 55,000 sq ft 5 Old Broad St, EC2 280 B
Slide 19: Availability & Vacancy Rate
AVAILABILITY & VACANCY RATE VACANCY SQ FT RATE Q1 2021 25.7m 8.8% Vacancy rate (%) Q2 2021 26.1m 9.3% 16 West End West End average City City average July 2021 26.7m 9.4% 14 Central London August 2021 26.7m 9.4% 12 Vs 5-year 16.2m 5.3% 10 average 8 6 Availability by location 4 Southbank 8% 2 Midtown
Slide 20: Tenant Controlled Space
TENANT CONTROLLED SPACE K E T ) Key withdrawals: 171 Victoria St Turnmill 190 High Holborn 10 Bishop Square 195,000 sq ft 56,000 sq ft 44,000 sq ft 30,000 sq ft Floorspace (million sq ft) 1.0 Sub-let additions Sub-let withdrawals Balance 0.8 0.6 0.4 0.2 0.0 (0.2) (0.4) May-20 Aug-20 May-21 Aug-21 Ma
Slide 21: Development Pipeline
DEVELOPMENT PIPELINE Floor area (million sq ft) 10 Completed 9 Under construction let/under offer 32% Under construction available 8 Proposed let/under offer of space under Proposed available construction is 7 pre-let or under 6 offer 5 Completion average (since 2000) 4 7.6m sq ft 3 of speculative 2
Slide 22: Development Pipeline - Central London
DEVELOPMENT PIPELINE - CENTRAL LONDON E T ) Floor area (million sq ft) 10 Completed 9 Under construction let/under offer 32% Under construction available 8 of space under construction is 7 pre-let or under 6 offer 5 Completion average Significant (since 2000) 4 supply gap 7.6m sq ft 3 of speculative
Slide 23: Current Active Demand
CURRENT ACTIVE DEMAND K E T ) SQ FT Q1 2021 8.5m Q2 2021 9.0m Active demand (million sq ft) 12 Current 9.7m 11 8% above 10-yr average Vs 10-year average 8% 10 9 8 7 600,000 sq ft 400,000 sq ft 200,000 sq ft 6 Central London demand 10-year average 5 50-70,000 sq ft Jun-07 Jun-08 Jun-09 Jun-10 Jun-11
Slide 24: Rental Growth
RENTAL GROWTH Prime rental growth (% pa) 40 West End City 30 20 10 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 (10) (20) (30) (40) Source: CBRE PAGE 24
Slide 25: Office Occupier Summary
OFFICE OCCUPIER SUMMARY E T ) IMPROVING INCREASED TAKE-UP MARKET & ENCOURAGING UNDER CONDITIONS OFFER STATS & OCCUPIER SENTIMENT TOTAL SUPPLY LEVELLING OFF, WITH MORE POSITIVE GOOD CONFIDENCE & TENANT WITHDRAWAL STORY TRANSPARENCY IN ACTIVE DEMAND EMERGENCE OF TWO-TIER MARKET PAGE 25
Slide 26: What Is Happening in Our Portfolio
WHAT IS HAPPENING IN OUR PORTFOLIO
Slide 27: Improving Business Sentiment
IMPROVING BUSINESS SENTIMENT E T ) 1. Headcount Headcount • In July 2021 80% of our top occupiers were looking to increase or maintain headcount, up from 55% 55% a year ago 2. Rent Rent collection collection • Offices near pre-covid covid levels (June 2021 quarter now 98% received) 3. Vacancy Vacanc
Slide 28: Managing 2021 Lease Expiry & Breaks
MANAGING 2021 LEASE EXPIRY & BREAKS E T ) Activity to address portfolio breaks and expiries in 2021 30 25 24 20 49,000 sq ft (+55%) 15 (12) 88-94 10 (4) TOTTENHAM COURT ROAD (3) 5 5 0 As at Asset Man Disposals Near-term As at June 2020 & Leasing projects August 2021 37,000 sq ft (+40%) 28,000 sq ft
Slide 29: Other Activity
OTHER ACTIVITY OLIVERS YARD NCORKNGSTAR CHARLOTTE BUILDING THE @) PARTNERSHIP ; - 7
Slide 30: Customer Survey Feedback
CUSTOMER SURVEY FEEDBACK E T ) HYBRID / AGILE WORKING RETURN TO THE OFFICE POSITIVE CULTURE, FOR BUSINESS COLLABORATIVE WORK, ATTRACT / SOCIAL INTERACTION, RETAIN NEW BUSINESS, TALENT TRAINING & WELLBEING THE "RIGHT" SPACE & LOCATION PAGE 30
Slide 31: Key Demand Drivers & Our Response
KEY DEMAND DRIVERS & OUR RESPONSE
Slide 32: Occupier Drivers
OCCUPIER DRIVERS AN ACCELERATION OF CHANGE ) Amenity Adaptability Brand Talent Intelligent Smart Wellness Training Agility Data Sustainability Digital Wellbeing Culture Innovation Collaboration Experience Mentoring Health & Productivity Safety PAGE 32
Slide 33: Listening to Our Occupiers
LISTENING TO OUR OCCUPIERS THE OFFICE IS WORK IS A A PLACE TO: PLACE YOU GO, WORK NOT JUST A COLLABORATE THING YOU DO INNOVATE INTERACT FLIGHT TO PRODUCE QUALITY MENTOR WE LISTEN, WE LEARN, WE ACT PAGE 33
Slide 34: Our Response - Building on the Brand
OUR RESPONSE - BUILDING ON THE BRAND E T ) Driving the right initiatives, setting us apart from others to make Derwent London a more valuable overall offer for the customer, which will set us apart from others Shared Amenity Customer Service Village Hubs & Experience & Amenity Furnished + Flexible u
Slide 35: New Initiatives Video
NEW INITIATIVES VIDEO
Slide 36: Thinking About Design
THINKING ABOUT DESIGN
Slide 37: Design
DESIGN T ) PAGE 37
Slide 38: Design: Connect & Control
DESIGN Connect & control PAGE 38
Slide 39: Design
DESIGN Large floor-celling results in farther daylight penetratia Challenge
Slide 40: Design: Desirable & Relevant
DESIGN Desirable & relevant PAGE 40
Slide 41: Design: Generosity
DESIGN T ) Generosity PAGE 41
Slide 42: Design: Volume & Light
DESIGN T ) Volume & light PAGE 42
Slide 43: Design: Amenity
DESIGN T ) Amenity PAGE 43
Slide 44: Design: Wellbeing
DESIGN T ) Wellbeing PAGE 44
Slide 45: Design
DESIGN ) Creating the very best canvas for London's businesses & talent PAGE 45
Slide 46: Design
DESIGN ) Creating the very best canvas for London's businesses & talent PAGE 46
Slide 47: Driving Portfolio Amenity & Overall Derwent London Offer
DRIVING PORTFOLIO AMENITY & OVERALL DERWENT LONDON OFFER A new offer Furnished + Flexible spaces PAGE 47
Slide 48: Design - An Exciting Pipeline
DESIGN - AN EXCITING PIPELINE T ) Distinctly Derwent Our journey continues PAGE 48
Slide 49: A Sustainable Portfolio - Net Zero Carbon
A SUSTAINABLE PORTFOLIO - NET ZERO CARBON
Slide 50: Net Zero Carbon by 2030
Our Drivers: It is good for our business NET ZERO Future-proofing CARBON the portfolio BY 2030 Meeting Stakeholder expectations Collaborating with Customers PAGE 50
Slide 51: Net Zero Carbon Workstreams
New Green Developments Leases Business Activity Scottish Existing Estate Portfolio PAGE 51
Slide 52: Business Activity
Business Renewable Energy All our electricity supplies are Activity on renewable tariffs and we are working with our suppliers to move our gas supplies onto renewable tariffs Corporate Carbon Accounting Developing our approach to carbon accounting which looks to integrate carbon forecasting into our
Slide 53: New Developments
Reducing Energy Baker Street now formally registered with NABERS UK, targeting a minimum of 4 stars Embodied Carbon Low carbon materials and construction methods - Soho Place & The Featherstone Building have reduced embodied carbon by over 10% during construction New Carbon Offsetting Developments W
Slide 54: Existing Portfolio
Existing Customer Engagement Portfolio We have issued a Net Zero Carbon survey to our existing customers potentially creating future collaboration opportunities Reducing Energy We have set buiding specific energy targets in line with a 1.5oC climate scenario (2030) EPCs Detailed assessment of our po
Slide 55: Green Leases
Green Leases Lease Agreements Detailed review of our standard lease to strengthen our existing sustainability requirements Fit Out In tandem with the lease review we are updating our 'Licence to Alter' to reflect our Net Zero requirements EPCs Effectively compliant with the 2023 requirements & over
Slide 56: Scottish Estate
Scottish Estate Carbon Offsets 40ha of Woodland Carbon Code planted in 2015 which has started to produce its first carbon credits - exploring further expansion Renewable Energy Site studies completed for a 100 acre solar farm - potential to cover over 40% of the portfolio’s electricity needs - linki
Slide 57: Digital Strategy & an Intelligent Portfolio
DIGITAL STRATEGY & AN INTELLIGENT PORTFOLIO
Slide 58: Digital Strategy
DIGITAL STRATEGY Customer Experience DIGITAL STRATEGY Operational Efficiency Intelligent Buildings PAGE 58
Slide 59: Intelligent Buildings
INTELLIGENT BUILDINGS By 2023 55%* of our portfolio will be Intelligent PAGE 59 *By floor area
Slide 60: Intelligent Buildings Video
INTELLIGENT BUILDINGS VIDEO
Slide 61: Intelligent Buildings: Carbon
INTELLIGENT BUILDINGS Carbon PAGE 61
Slide 62: Intelligent Buildings: Costs
INTELLIGENT BUILDINGS Costs PAGE 62
Slide 63: Intelligent Buildings: Customer Experience
INTELLIGENT BUILDINGS Customer experience PAGE 63
Slide 64: Intelligent Buildings
INTELLIGENT BUILDINGS PAGE 64
Slide 65: Customer Experience
CUSTOMER EXPERIENCE MARKET) PAGE 65
Slide 66: App Video
APP VIDEO
Slide 67: Developments
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Slide 68: Development Agenda
DEVELOPMENT AGENDA ARKET) Introduction Richard Baldwin, Director of Development 19-35 Baker Street Benjy Lesser, Development Associate Mike Taylor, Hopkins Architects Network Building Tim Hyman, Group Architect Stuart Piercy, Piercy & Company Bush House Jonathan Theobald, Development Manager & Inves
Slide 69: Development Is a Major Part of Our Business
DEVELOPMENT IS A MAJOR PART OF K E T ) OUR BUSINESS E T ) Floorspace (million sq ft) Development (% of portfolio) 7 70 6 60 5 50 4 40 3 30 2 20 1 10 0 H2 2013 H2 2014 H2 2015 H2 2016 H2 2017 H2 2018 H2 2019 H2 2020 H1 2021 0 Core income On-site Consented Under appraisal Future appraisal PAGE 69 Deve
Slide 70: Development Activities Enhance Our Property Performance
DEVELOPMENT ACTIVITIES ENHANCE OUR A R K E T ) PROPERTY PERFORMANCE E T ) Capital Growth Index (2011=100) 500 450 400 350 300 250 200 150 100 50 - 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 H1 2021 PAGE 70 DL Developments DL Portfolio DL Non-Developments MSCI IPD Central London Offices
Slide 71: Collaboration
COLLABORATION ARKET) PAGE 71
Slide 72: Soho Place
Soho Place NET ZERO x ey ——7 | [soe 9 as = wet FL p— PAGE 72
Slide 73: Soho Place Net Zero
Soho Place NET ZERO ~N PAGE 73
Slide 74: The Featherstone Building
THE FEATHERSTONE BUILDING tig i lab aS PAGE 74
Slide 75: The Featherstone Building
THE FEATHERSTONE BUILDING PAGE 75
Slide 76: 19-35 Baker Street
NET ZERO EH Fo Fo ae E4 WM ia Fo Bs <q Oo Ly NOD 19-
Slide 77: Network Building
NETWORK BUILDING ANG PAGE 77
Slide 78: Bush House
NET ZERO BUSH HOUSE =) we ee \ ee ee) PAGE 78
Slide 79: Procurement
PROCUREMENT ARKET) y ENGAGEMENT REPUTATION RELATIONSHIPS Explore Manufacturing SRW Mechanical & Electrical PAGE 79
Slide 80: Inflation
INFLATION ARKET) Source: Gardiner & Theobald PAGE 80
Slide 81: Baker Street W1
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Slide 82: Scheme Overview
SCHEME OVERVIEW K E T ) 217,000 SQ FT NIA OFFICES 29,000 SQ FT NIA RETAIL (MAJORITY PRE-SOLD) 45,000 SQ FT NSA RESIDENTIAL (41 UNITS) 7,000 SQ FT NSA AFFORDABLE HOUSING (10 UNITS) 298,000 SQ F T (100% AREA GAIN) VP: S E P T 2021 START ON SITE: OCT 2021 TARGET COMPLETION: Q2 2025 ESTIMATED C A P E X
Slide 83: Portman Square
Spe" THE PORTMAN a ESTATE PAGE 83
Slide 84: Aerial View of Site
AERIAL VIEW OF SITE PAGE 84
Slide 85: Aerial View of Site
AERIAL VIEW OF SITE PAGE 85
Slide 86: Ground Floor Pedestrian Route / Creating a New Place
GROUND FLOOR PEDESTRIAN ROUTE / CREATING A NEW PLACE PAGE 86
Slide 87: Ground Floor - Retail & Residential
GROUND FLOOR - RETAIL & RESIDENTIAL PAGE 87
Slide 88: Ground Floor - Offices / Reception
GROUND FLOOR - OFFICES / RECEPTION PAGE 88
Slide 89: Baker Street Elevation
BAKER STREET ELEVATION PAGE 89
Slide 90: Baker Street Elevation Dusk
BAKER STREET ELEVATION DUSK PAGE 90
Slide 91: Central Courtyard View
19-35 Baker Street Office Presentation to Agents 24th May 2021 Retail arcade - greenery CENTRAL COURTYARD VIEW PAGE 91
Slide 92: Landscape and Planting
B A K E R S T RE E T COURT YA RD - RE TA IL M E WS V IE W TOWA RDS GLOUCE S T E R P LA CE Plante r Te x t u r e s a n d S h a p e s Planting Te x t u r e s Pla n t in g Te xt u r e s Atelier U and OF Planters - Mixed Colours Atelier U Pl LANDSCAPE AND PLANTING PAGE 92 Atelier Atelier U U Planters -
Slide 93: Corner View
CORNER VIEW PAGE 93
Slide 94: Reception
RECEPTION PAGE 94
Slide 95: Typical Office Floor
TYPICAL OFFICE FLOOR - 24,700 SQ FT FLOOR PLATE PAGE 95
Slide 96: Lift Lobby
LIFT LOBBY PAGE 96
Slide 97: Office Space
OFFICE SPACE PAGE 97
Slide 98: Office Space
OFFICE SPACE PAGE 98
Slide 99: Level 7 Floor Plate / External Terraces
LEVEL 8 - 17,278 SQ FT FLOOR PLATE / EXTERNAL TERRACES PAGE 99
Slide 100: Roof Level / Shared Amenity & Terrace
ROOF LEVEL / SHARED AMENITY & TERRACE PAGE 100
Slide 101: Roof Level Amenity Space
19-35 Baker Street Client Design Review 1st April 2021 Option 1: low-level planters along pavilion perimeter ROOF LEVEL AMENITY SPACE - 1,615 SQ FT PAGE 101
Slide 102: Sustainability Benchmarks
BAKER STREET OFFICE BREEAM WIRED EPC Nabers WELL ‘Enabled’ LEED Target Outstanding Platinum ‘A’ Rating 4 stars Building Gold NET ZERO BREEAM Home Quality BREEAM BREEAM • All electric building Excellent Mark 4.5 stars Excellent Very Good • Openable windows • Natural ventilation BAKER STREET & GEORGE
Slide 103: Fully Integrated Derwent Digital Building
FULLY INTEGRATED DERWENT DIGITAL BUILDING • Smart from the start • Integrated Derwent Building Platform bespoke operational software • Smart from the start • AI to optimise plant & maximise efficiency Derwent Digital • Integrated Building Platform bespoke • Workplace software operational Sensors pro
Slide 104: Urban Model
URBAN MODEL PAGE 104
Slide 105: Facade Model
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Slide 106: Materials
MATERIALS PAGE 106
Slide 107: Mock Up
MOCK UP PAGE 107
Slide 108: The Network Building W1
THE NETWORK BUILDING W1 FITZROVIA, LONDON PAGE 108
Slide 109: Network Building Key Dates and Areas
EXISTING BUILDING PROPOSED OFFICE DEVELOPMENT KEY DATES FLOOR NIA AREA SQ FT 8th 6,372 • Planning resolution to grant dual 7th 16,275 consent: July 2021 2nd-6th 17,513 1st 15,220 • Vacant possession: June 2022 Ground Office 2,820 • Start on-site: July 2022 Ground Reception 2,950 Ground Retail 4,930
Slide 110: Facade Study and Sustainability Targets
Facade Study Model Material Palette BREEAM ‘Outstanding ’ target rating LEED ‘Platinum’ target rating WELL v2 enabled (for future tenant certification EPC of B, modelling options for ECP of A NABERS UK energy rating to be progressed PAGE 110 Sculptural Facade Piers
Slide 111: PAGE 111
PAGE 111
Slide 112: Integrated Bench - Whitfield Street Facade
Integrated bench - Whitfield Street facade PAGE 112
Slide 113: PAGE 113
PAGE 113
Slide 114: PAGE 114
PAGE 114
Slide 115: Bush House WC2
BUSH HOUSE WC2 SOUTH WEST WING PAGE 115
Slide 116: Accelerated Development Opportunity
Ne w Inn Pa ss ag e HOUGHTO N 11 Cycle Hir 9 10 Aldwych House e Sta 11 9 12 8 St 6 ACCELERATED DEVELOPMENT OPPORTUNITY 0 Cle STREET tion Bank 3 5 7 me 7 nt EXISTING SITE Pr C Da im o 69 71 ary f E nes Ingersoll House Sc 81 ho 63 ol 61 21.6m 91 95 1 17.2m ALDWYC Our Lady Inn 1 110 20.7m o5 LB H (site
Slide 117: Location Under Transformation
LOCATION UNDER TRANSFORMATION Australia House King’s College The Strand Aldwych Public Realm Soho House India House King’s College Waldorf Hotel Lyceum Theatre Somerset House PAGE 117
Slide 118: Creating a Landmark
CREATING A LANDMARK • Approx. 134,000 sq ft of high quality offices within the retained and extended office building • New rooftop level with terraces • Full comprehensive refurbishment of existing space to include new plant and windows • Relocation of the core • Principal design team appointed with
Slide 119: Responding to the Surroundings
RESPONDING TO THE SURROUNDINGS The proposed massing responds to the 1 surrounding context and feedback received from Westminster City Council: 3 1 Roof - A single storey roof extension at 9th floor with external terracing plus 10th floor amenity and terrace space 2 2 Courtyard Infill - A ground plus
Slide 120: Active Ground Floor
Key Plan ACTIVE GROUND FLOOR Do not scale from this drawing. Check drawing on receipt and immediately report any discrepancies to the Architect. Verify all dimensions and levels on site prior to construction. The contents of this drawing are Stiff + Trevillion Architects LLP copyright and shall not
Slide 121: Flexible Office Floors
Key Plan ILL FLEXIBLE OFFICE FLOORS ) Do not scale from this drawing. Check drawing on receipt and immediately report any discrepancies to the Architect. • Typical floorplate Verify all dimensions and levels on site prior to construction. The contents of this drawing are Stiff + Trevillion Architect
Slide 122: Investment
INVESTMENT PAGE 122
Slide 123: Introduction & Investment Strategy
INTRODUCTION & INVESTMENT STRATEGY ARKET) • Limited stock • Competitive bidding for right product INVESTMENT MARKET • c.£41bn global equity circling London offices* • Disciplined approach • Balance sheet, reputation & track record OUR STRENGTHS • Knowledge of local markets • Broad property skill set
Slide 124: The London Office Investment Market: Flight to Quality
THE LONDON OFFICE INVESTMENT MARKET FLIGHT TO QUALITY • Rental prospects improving POSITIVE OUTLOOK • Business confidence returning • Tier One / Prime yield compression GOOD DEMAND • Strong demand for value add / development sites • Performance of older Secondary stock lagging • A tight market & low
Slide 125: The London Office Investment Market: Positive Yield Gap
THE LONDON OFFICE INVESTMENT MARKET POSITIVE YIELD GAP • Lower interest rate environment continues to support global property values • Following long Brexit uncertainty investors more focused on London Yield (%) 6.0 Cyclical low Current yield 5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 Berlin Madrid Amsterdam P
Slide 126: The London Office Investment Market: Deep Demand from Global Capital
THE LONDON OFFICE INVESTMENT MARKET DEEP DEMAND FROM GLOBAL CAPITAL HALF YEAR ACTIVITY BY ORIGIN Other SOURCES OF GLOBAL DEMAND 3% Asia 17% UK 26% Middle East 5% North America 14% North America 27% Europe 27% HALF YEAR ACTIVITY BY ASSET Asia £41bn 49% Development Source: CBRE 6% Value Add Europe 16%
Slide 127: The Lazari Transaction
THE LAZARI TRANSACTION A West End portfolio of five properties for a total price of £290m after costs Baker Street Holding • Proposed 50/50 Joint Venture • Acquiring existing headleases totalling 122,200 sq ft across three assets (100%) • Existing income of £5.2m pa (100%) Knowledge Quarter Holdings
Slide 128: The Importance of Long-Term Relationships (1) Lazari Investments
THE IMPORTANCE OF LONG-TERM RELATIONSHIPS (1) LAZARI INVESTMENTS • Rare West End portfolio transaction • Family owned property company - c.£3bn central London portfolio • Acquisitions have synergies with group holdings • Lazari’s first joint venture – Derwent London’s development expertise PAGE 128
Slide 129: The Importance of Long-Term Relationships (2) UCLH
THE IMPORTANCE OF LONG-TERM RELATIONSHIPS (2) UCLH Acquisitions • 250 Euston Road NW1, entirely let to UCLH • 171-174 Tottenham Court Road W1, strategic asset within a larger UCLH ownership UCLH • Central London estate totalling c.2.5m sq ft principally around Fitzrovia • Vision to become world clas
Slide 130: The Importance of Long-Term Relationships (3) The Portman Estate
THE IMPORTANCE OF LONG-TERM RELATIONSHIPS (3) THE PORTMAN ESTATE • The Portman Estate owns 110 acres across Marylebone • Actively looking to regenerate it’s wider Estate • The Group’s relationship with The Portman Estate spans over 40 years • Recent success following headlease regear on 19-35 Baker
Slide 131: Adding to the Pipeline
ADDING TO THE PIPELINE Combined potential for c.220,000 sq ft future development • Bringing forward development and capturing marriage value, with a total cost of £500 per sq ft • Tired former Government building neighbouring King’s College London and LSE campuses • Project to benefit from major pub
Slide 132: Disposals: Recycling Tier Two Buildings
DISPOSALS RECYCLING TIER TWO BUILDINGS JOHNSON BUILDING EC1 ANGEL SQUARE EC1 • Combined sales of £260m following selective approach to recycling • Taking advantage of market liquidity • Focusing on higher returns and Tier One investments and projects • De-risking portfolio vacancy from Tier Two spac
Slide 133: Q&A
Q&A
Slide 134: Property Tour
PROPERTY TOUR PAGE 134
Slide 135: Charlotte Street
80 CHARLOTTE STREET PAGE 135
Slide 136: Charlotte Street Timeline
2007 Outdated 234,000 sq ft of offices let to Saatchi & 2011 Saatchi, part of Publicis Planning permission granted for Groupe a 377,000 sq ft mixed-use Make-designed project: 1.4 acre island site in a core - 322,000 sq ft offices West End location - 43,000 sq ft residential including 10,000 sq ft of
Slide 137: Network Building
NETWORK BUILDING PAGE 137
Slide 138: Network Building Timeline
2007 A freehold mixed-use building of 64,200 sq ft 2011 Acquired headlease for £31m before costs - giving us direct control of the property 2016 34,000 sq ft refurbishment completed to the rear of the property at 78 Whitfield Street 2021 Dual planning permission granted for a 137,000 sq ft office de
Slide 139: 171-174 Tottenham Court Road
171-174 TOTTENHAM COURT ROAD PAGE 139
Slide 140: 171-174 Tottenham Court Road W1
171-174 TOTTENHAM COURT ROAD W1 2021 Acquired 16,200 sq ft freehold building in H2 Off market transaction with Lazari Investments £24.7m after costs Multi-let at £0.6m pa Strategic holding forming part of a larger UCLH- controlled island site Longer-term part of a major Knowledge Quarter site Opposi
Slide 141: Euston Road
250 EUSTON ROAD PAGE 141
Slide 142: Euston Road NW1
250 EUSTON ROAD NW1 2021 Acquired 165,900 sq ft office property in H2 Off market transaction with Lazari Investments Substantial island site of 1.6 acres in the heart of the Knowledge Quarter £189.9m after costs Let entirely to UCLH at £4.7m pa or £28 psf until 2039 with fixed annual increases of 2.
Slide 143: 19-35 Baker Street
19-35 BAKER STREET PAGE 143
Slide 144: 19-35 Baker Street W1
19-35 BAKER STREET W1 2007 Existing properties totalling 143,000 sq ft Held in a JV: 55% Derwent London and 45% The Portman 2017 Estate Planning permission gained in November for a major mixed-use development of 298,000 sq ft: 2021 - 218,000 sq ft offices - 52,000 sq ft residential Vacant possession
Slide 145: Joint Venture: Baker Street
JOINT VENTURE: 38-52, 54, 60 & 66 BAKER STREET PAGE 145
Slide 146: Joint Venture: Baker Street
JOINT VENTURE: 38-52, 54,60 & 66 BAKER STREET 2021 Memorandum of Understanding with Lazari Investments to create a 50:50 JV Potential 240,000 scheme JV expected to acquire three multi-let freehold properties totalling 122,200 2022 sq ft in H2 for £64.4m after Submit Planning application costs (50% s
Slide 147: Soho Place
SOHO PLACE wee We on ~ oa oO LB ee = - ">=: ; I mori . "i J 2 5 ; 3 P \ / 4 Nee | Demet Aner iW THER - 1. i oe Lees ap } Le 7h ‘ae = ry an ts 4 i 4 f il * * is } = Migr Rap i r es iv) iif f = < ‘3 = “ft he | ‘ | | ee lf Vi “ © me A is > til ‘44 Vr fe Pikes 4+ Seater s _ ae — sf o> Z Se : = f ' - “ a
Slide 148: Soho Place Timeline
1986 Acquired a 25% leasehold interest in 135-155 Charing Cross Road (62,000 sq ft) 1998 Acquired remaining 75% 2006 leasehold interest and freehold in 135-155 Charing Acquired 17 Oxford Street Cross Road (3,300 sq ft) and Astoria Theatre (42,300 sq ft) 2009 Buildings subjected to compulsory purchas
Slide 149: Derwent London Attendees
DERWENT LONDON ATTENDEES MARK BREUER CHAIRMAN PAUL WILLIAMS CHIEF EXECUTIVE DAMIAN WISNIEWSKI CFO NIGEL GEORGE DIRECTOR DAVID SILVERMAN DIRECTOR EMILY PRIDEAUX DIRECTOR RICHARD BALDWIN DIRECTOR OF DEVELOPMENT DAVID LAWLER COMPANY SECRETARY HEAD OF FINANCIAL PLANNING JENNIFER WHYBROW JAY JOSHI TREASU
Slide 150: Disclaimer
DISCLAIMER This presentation has been prepared by Derwent London plc may become apparent. Past performance is not indicative (the “Company”). No representation or warranty (express or of future results and forward-looking statements are not implied) of any nature is given nor is any responsibility o