Hammerson plc · LSE:HMSO
Hammerson — Investor Day (June 2014)
60 slides from Hammerson's investor day presentation, Jun 12, 2014
Slide 1: Les Terrasses du Port Capital Markets Day
Les Terrasses du Port Capital Markets Day Thursday 12th June 2014
Slide 2: Today's agenda
Today’s agenda 1. Introduction David Atkins 2. France overview Jean-Philippe Mouton 3. Marseille Renaud Mollard 4. Les Terrasses du Port Renaud Mollard/Alice Roudaut/ Edouard Detaille Sandra Chalinet BREAK 5. Anticipated retailer performance Michaël Farbos 6. Pipeline Michaël Farbos/David Atkins 7.
Slide 3: The Hammerson team
The Hammerson team David Atkins Timon Drakesmith Peter Cole Jean-Philippe Mouton André Bentze Gérald Férézou CEO CFO CIO MD Hammerson France CFO, France Deputy MD, France Michaël Farbos Barthélémy Doat Edouard Detaille Renaud Mollard Alice Roudaut Sandra Chalinet Director Investments & Director of O
Slide 4: Our trading assets in France
Our trading assets in France 1 O’Parinor, Aulnay-sous-Bois 6 Grand Maine, Angers Paris Acquired 2002, refurbished/extended Acquired 2007, refurbished 2013 2013-2014 Occupancy 95.9% Occupancy 96.8% Key tenants: Carroll, Etam, Yves 1 Key tenants: C&A, Primark, UGC Rocher 2 2 Italie Deux 7 Place des Ha
Slide 5: Retail property landscape
Retail property landscape Existing shopping centre stock 680 shopping centres, representing 15,000,000 m² Retail space per inhabitant is in line with the EU average Existing stock is ageing with 50% opened before 1980 Regional sized shopping centres (>40,000 m²) represent 30% of the total GLA. Marke
Slide 6: France overview
Section Section 22 France Franceoverview overview Italie Deux, Paris
Slide 7: Growth anticipated despite high unemployment
Growth anticipated despite high unemployment GDP % growth Source : IMF % UK France Germany 6.0 France suffered less during the financial crisis 4.0 2.0 and shows modest capacity for growth in the 0.0 short term 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -2.0 -4.0 -6.0 Source : IMF % Unemploym
Slide 8: Strong fundamentals for customer spending
Strong fundamentals for customer spending Source : INSEE % Household consumption growth 6% Household consumption (manufactured goods) 4% Consumption growth has been steady throughout the last three decades… 2% 0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20
Slide 9: And healthy levels of household debt and savings
And healthy levels of household debt and savings Household savings rate (% disposable household income) France UK Source : OECD % 16.6 15.9 16.0 18 15.5 15.6 French households have maintained their historically high savings rate 12 7.0 7.3 7.3 6.7 6 2.2 0 2008 2009 2010 2011 2012 Household debt (% a
Slide 10: Recent reforms in progress
Recent reforms in progress Need for structural reforms Labour market regulations an obstacle to job creation French welfare state is costly and perceived as increasingly inefficient: not sustainable in the long term (medical, pensions, unemployment benefits) Local governments are numerous and often
Slide 11: Steady consumer sentiment and indexation positive
Steady consumer sentiment and indexation positive Index Consumer confidence Source : INSEE 95 90 Steady consumer confidence through the crisis, 85 and rising over LTM 80 75 70 Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Jan-09 May-09 Jan-10 May-10 Jan-11 May-11 Jan-12 May-12 Jan-13 May-13 Jan-14 May-14 Sep S
Slide 12: Retailer interest still strong but more selective on location
Retailer interest still strong but more selective on location % Local consumer spending outlook (% pa) Better growth perspective for Paris, Lyon and 2.0 2008-2013 2013-2018 Source : PMA Marseille 1.5 French portfolio largely in major population 1.0 areas, 7 assets in the Paris region 0.5 0.0 Well po
Slide 13: Anticipated market ERV growth
Anticipated market ERV growth Forecast French S.C. ERV growth (% p.a.) % Source: PMA 2.5 2.3 2.0 2.0 1.5 1.2 1.1 1.1 1.0 0.5 0.3 0.2 0.0 -0.1 -0.5 -0.4 2010 2011 2012 2013 2014 2015 2016 2017 2018 13
Slide 14: Marseille
Section Section 33 Marseille Les Terrasses du Port, Marseille
Slide 15: Wealthy, vibrant region
Wealthy, vibrant region Provence-Alpes-Cote d’Azur region population of 5 million 4 major cities: Marseille, Nice, Toulon and Avignon 90 % of the population live in urban areas 3rd largest economic region in France 34 million visitors per annum 15 15
Slide 16: Strong local catchment
Strong local catchment 1.5 million inhabitants (less than 35 min drive) 2 million passengers through the port including 600,000 for Corsica 1,200,000 cruise passengers (+30% YoY) 1.5m cruise passengers estimated for 2015 €5 billion spent by Marseille inhabitants per annum, €600 million spent outside
Slide 17: Marseille: France's second city
Marseille: France’s second city Population of 850,000 Exceptional location and weather Intense tourist activity Largest port in the Mediterranean sea European capital of culture 2013 – 900 new projects and 10 million visitors throughout the year Third largest economic region in France – 4,500 compan
Slide 18: Euroméditerranée: transforming Marseille
Euroméditerranée: transforming Marseille The largest urban regeneration project in Southern Europe representing €7bn of investment By 2020 Euroméditerranée will deliver 24,000 residential units 1,000,000m2 office space 200,000m2 Public infrastructure 40 hectares parks and public space 18 18
Slide 19: Les Terrasses du Port facts and figures
Les Terrasses du Port facts and figures Section Les Terrasses du Port 4 19 Les Terrasses du Port, Marseille
Slide 20: Les Terrasses du Port
Les Terrasses du Port 190 shops and restaurants 61,000 m² 260m restaurant terrace 1,500m² food hall 4 shopping levels Open 7 days a week 1,200m² event terrace 2,600 car park spaces 20 20
Slide 21: Project background
Project background Tender offer launched in 2003 by the Port of Marseille and won in 2006 by Forum Invest (FIF) A 70-year lease signed between FIF and the Port of Marseille Purchased in December 2009 for €35 million (including Beauvais) Hammerson implemented major scheme design changes Enabling work
Slide 22: Highly accessible
Highly accessible Car Bus Tramway Highway A7 / A55 / A50 13 lines 3 stations (T2) Metro Train Air 3 stations (M2) : Joliette / Train station Marseille Airport Marseille Provence Saint-Charles 22 Désirée Clary / Jules Guesde (25km -20 min.) 22
Slide 23: Our customers
Our customers Local office workers Families Young urbanites Tourists Visit Monday to Friday Visit at the weekend Visit throughout the week Cruise passengers passing through nearby terminal Peak hours during lunchtime Creches and frequent Peak hours during afternoon and after office hours workshops f
Slide 24: Aspirational and exclusive retailers
Aspirational and exclusive retailers Aspirational brands International brands 30 brands new to Marseille 22 brands taking first shopping centre store Carmen Steffens 24 24
Slide 25: Structured approach to each level
Structured approach to each level LEVEL 3 : SKY LEVEL Event Terrace LEVEL 2 : TERRACE LEVEL Aspirational brands and dining LEVEL 1 : DECK BRIDGE Fashion and beauty GF LEVEL : DECK LEVEL Food hall and services BASEMENT : SEA LEVEL Destination brands 25 25
Slide 26: Ground level
Ground level Food hall, restaurants and services 26 26
Slide 27: First level
First level Fashion and beauty Fashion & Beauty 27 27
Slide 28: Second level
Second level Aspirational brands and dining 28 28
Slide 29: Designed to facilitate multichannel retail
Designed to facilitate multichannel retail Shopping patterns are changing forever Internet, click & collect, heavily researched purposes Retailers are changing the way they interact with shoppers The store remains at the heart of the multichannel journey Centres need to facilitate new ways of shoppi
Slide 30: Investment in digital infrastructure
Investment in digital infrastructure Free wi-fi available to consumers Leading edge IP infrastructure New web and mobile applications Digital enlivenment 30 30
Slide 31: Introducing PLUS
Introducing PLUS User registration Offer redemption ‘Shop window’ offers and Plus-exclusive offers Personalised shopping centre guide Geolocalistion technology 31 31
Slide 32: Benefits to consumers, retailers and Hammerson
Benefits to consumers, retailers and Hammerson A multichannel customer engagement programme designed to deliver a highly personalised shopping experience for every Hammerson centre visitor Retailers and Hammerson Driving footfall, frequency of visit and dwell time Data regarding our visitors profile
Slide 33: Digital initiatives
Digital initiatives Interactive screens throughout the centre Digital wall to share photos and find Interactive games dedicated for centre information children and easily accesible Strong social media presence 1,400 followers 41,000 fans 62,650 hits 33 33
Slide 34: Results
Results 27,324 22,034 app Promotion downloads views 69,650 18 min total app average opens usage time Rated in top ten lifestyle apps in France on the App Store 34 34
Slide 35: Industry leading sustainability
Industry leading sustainability Green construction and design Operationally sustainable BREEAM Excellent scheme Target to recycle 75% of operational waste 94.6% of construction site waste recycled Constant monitoring of energy and water consumption Green leases signed with 92% of retailers 30 rechar
Slide 36: Les Terrasses de l'Emploi
Les Terrasses de l’Emploi France’s first retail employment initiative with a property developer 2,000 retail and operational vacancies 120 retailers 8 month initiative 6,000 applicants in 4 months Over 1,000 positions filled to date 30% 40% 60% 70% applicants aged under 25 applicants from disadvanta
Slide 37: Successful opening May 2014
Successful opening 24 May 2014 Uniqlo doubled its first day sales target Over 150,000 opening weekend visitors First weekend 10,000 shoppers signed up to PLUS More than 500,000 visitors within first 10 days 37 37
Slide 38: A full events programme to drive footfall
A full events programme to drive footfall SCHEDULE OF EVENTS MAY/ DECEMBER 2014 May Jun Jul Aug Sep Oct Nov Dec MOTHERS DAY SUMMER Cyclical events CHRISTMAS FATHERS DAY SALES 25/11-23/12 25/05 15/06 25/06-29/07 TERRASSES OF THE WORLD SUMMER FIZZ BLUE MOOD GEEK & CHIC Bespoke events BRAZIL 19/07-21/0
Slide 39: Anticipated retailer performance and analysis
Anticipated retailer Les Terrasses du Portperformance and facts and figures Section analysis 5 39 Les Terrasses du Port, Marseille
Slide 40: Marseille's retail provision
Marseille’s retail provision Plan de Campagne Retail Park Géant Barnéoud Avant Cap 93 MSUs + 122 39,000m2 31,000m2 stores 67 stores 130 stores Opened 1974, renov 1994 Opened 1990, extnd 2013 Centre Bourse 30,000m² 60 stores €541 m Opened 1977, renov in 1997 Extension project : 5,000 m² (2015) Grand
Slide 41: Market gap analysis
Market gap analysis Regional catchment spend of €12bn. Activity Market in the catchment area (€) Grocery 3,781,240,000 Fashion 1,827,752,000 Homeware 1,386,922,000 Services 1,641,849,000 Catering 1,090,929,000 Tobacco 466,803,000 Culture and leisure 2,004,404,000 Grand Total 12,199,899,000 Over 350,
Slide 42: Merchandising mix
Merchandising mix Floorspace per retail category Breakdown of units by size Fashion 22,737m2 40% 20% Department store 9,507m2 17% 300 - 800m2 >800m2 Culture, gift and leisure 8,120m2 14% 46% <300m2 Catering 6,220m2 11% 33% Homeware 4,714m2 8% Grocery 3,127m2 5% Origin of brands by floorspace Regiona
Slide 43: Turnover estimates
Turnover estimates Retailer turnover estimate per retail category Turnover estimate per level Culture & leisure Catering €15m €16m Services €17m Health & Beauty €131m premium €18m Level 2 €11m dining Homeware €20m Fashion Level 1 €145m Department Store €187m €35m Ground level €30m Grocery €35m Level
Slide 44: Project outlook and opportunities
Project outlook and opportunities City and Port improvements: Combined efforts to improve traffic flow through the Port Modernization of the Port Improve the links between the City and the Port (passenger shuttles) Southern docks (close to Les TDP) dedicated to Corsica/Sardigna Shuttles and high-end
Slide 45: Pipeline
Section Section 65 Pipeline Pipeline Silverburn, Glasgow
Slide 46: Future investment in French portfolio
Future investment in French portfolio Le Jeu de Paume, O’Parinor, Italie Deux, Saint-Sébastien, Beauvais Aulnay-sous-bois Paris 13ème Nancy 24,000 m2 development 90,000m2 including 29,000m2 4,780m2 extension 24,000m2 scheme Carrefour hypermarket anchor store 86 shops and restaurants + Primark (1st s
Slide 47: Progressing major UK schemes
Progressing major UK schemes Victoria Gate, Leeds Brent Cross Whitgift, Croydon The Goodsyard 34,300m2 luxury retail venue 100,000m2 extension 200,000m2 10 acre site in heart of Shoreditch John Lewis anchor store Completion 2019 Completion 2018 Planning submission Summer 2014 28% pre-let Total devel
Slide 48: Advancing UK extensions and refurbishments
Advancing UK extensions and refurbishments Silverburn, Glasgow Cyfarthfa Retail Park, Abbotsinch Retail Elliott’s Field, Rugby Merthyr Tydfil Park, Paisley 10,900m2 extension 14,500m2 extension 5,000m2 extension 17,200m2 new retail floor space 14 screen cinema 4,300m2 Marks and Spencer 5 retail unit
Slide 49: Forecast development expenditure
Forecast development expenditure £m On site developments 300 Les Terrasses du Port, Marseille 250 Victoria Gate, Leeds Jeu de Paume, Beauvais 200 Other on site developments 150 Future developments New extensions/redevelopments 100 Whitgift, Croydon 50 Brent Cross extension 0 2013 2014 2015 2016 2017
Slide 50: Product of the future
Section 7 Product of the future Bullring, Birmingham
Slide 51: Product framework
Product framework Hammerson brings together physical and digital to enable exceptional retail experiences Product proposition 1 Product proposition 2 Product proposition 3 Product proposition 4 Product proposition 5 Iconic destination Best@retail Convenient & easy Supportive & engaging Entertaining
Slide 52: Product proposition 1: Iconic destinations
Product proposition 1: Iconic destinations Mission: to lead the market in developing iconic, regionally-dominant destinations, combining architecture, heritage, infrastructure and sustainability to create amazing buildings that work for retailers and shoppers, now and in the future World class archi
Slide 53: Product proposition 2: Best @ retail
Product proposition 2: Best @ retail Mission: To be a partner to our retail customers, driving ongoing and incremental footfall and revenue; combining the best infrastructure with a range of tools, advice and support to make it easy for them and enable them to get the best return from their space Op
Slide 54: Product proposition 3: Convenient & easy
Product proposition 3: Convenient & easy Mission: To provide facilities and services that not only meet, but exceed, retailer and shopper expectations; being brilliant at the basics and constantly striving to improve and renew Food & beverage Shopping centre services Facilities • Diversified food co
Slide 55: Product proposition 4: Supportive & engaging
Product proposition 4: Supportive & engaging Mission: To create the best environment to support shoppers in achieving their missions, making our centres and parks comfortable, enjoyable and sociable spaces, which are constantly renewed and reinvigorated – spaces where people want to spend more time
Slide 56: Product proposition 5: Entertaining & exciting
Product proposition 5: Entertaining & exciting Mission: To make Hammerson centres a destination for leisure, shopping and entertainment, harnessing new technologies & innovations to excite and surprise our shoppers, and push the boundaries of what a shopping centre can be. Integrated leisure Highly
Slide 57: Best in class – Bullring and Les Terrasses du Port
Best in class– Bullring and Les Terrasses du Port Iconic destinations Step change architecture/externally aligned Stunning sea front location with terrace with the city overlooking the sea Best @ retail Nexus digital promotional walls Nexus digital prmotional walls Re-merchandising Level 7 East (Mic
Slide 58: Hammerson
Hanmmerson
Slide 59: Conclusion
Conclusion • Significant player in French market, with quality assets and future pipeline • Anticipated market ERV growth, with outperformance at selected locations • Marseille has a wide, wealthy catchment with current spend bleeding out of the city • Les Terrasses du Port creates an iconic venue f
Slide 60: Questions
Hanmerson roe Questions