British Land Company PLC · LSE:BLND
British Land — FY2015 Earnings Presentation
92 slides from British Land's earnings presentation, May 14, 2015
Slide 1: Results Presentation
Results Presentation Full Year ended 31 March 2015 www.britishland.com @britishlandplc
Slide 2: Results Overview
Results Overview Chris Grigg Chief Executive
Slide 3: Highlights
Highlights Another strong set of results Continued outperformance Exceptional leasing activity Ongoing portfolio repositioning 3
Slide 4: Macro trends driving our strategy
Macro trends driving our strategy Transforming impact Population growth of technology and urbanisation Importance of Globalisation infrastructure Sustainability 4
Slide 5: Focused investment activity
Focused investment activity 1 Creating great Leveraging our placemaking skills to create Places People environments Prefer Exciting and lifestyle oriented real estate Growing in 2 Investing in existing assets London and Focusing on regeneration and growth areas the South East Investing around 3 Acce
Slide 6: 2015 financial highlights
2015 financial highlights 48% 2-year total accounting return FY to 31 March 2015 Change NAV per Share 829p +20.5% Valuation £13.6bn +12.1% Total Property Return 18.4% Underlying Profit Before Tax £313m +5.4% Dividend per Share 27.7p +2.5% Total Accounting Return 24.5% 6
Slide 7: Strong valuation performance
Strong valuation performance 12% Increase in valuation • Valuation well ahead in both sectors Contribution to valuation uplift – +7.5% in Retail; +18.8% Offices • Letting up of recently completed developments a key factor • Benefiting from increased weighting to London and the South East – Now 64% o
Slide 8: Exceptional leasing performance
Exceptional leasing performance 10% Investment lettings/ • Strong leasing volumes renewals vs ERV • Letting space on attractive terms • Good quality and diverse mix of occupiers • Strengthening rental trend; strong growth in Offices, notable improvement in Retail FY to 31 March 2015 Retail Office To
Slide 9: Broadly balanced investment activity
Broadly balanced investment activity Investment Activity £2.4bn Gross investment activity in 2015 £m Net Spend £343m £395m (£19m) £626m (£105m) 1,200 800 400 0 -400 -800 -1,200 2011 2012 2013 2014 2015 -1,600 Disposals Acquisitions & Development Net Spend 9
Slide 10: Investing in line with strategy
Investing in line with strategy 1 Increasing investment in London and South East 3 Selling mature retail assets • Now 64% of total portfolio £245m sold in addition to • £245m • £210m acquisition of One Sheldon superstore disposals Square 4 • On site at 4 Kingdom Street Pre-selling residential apartm
Slide 11: Retail & Leisure highlights
Retail & Leisure highlights Improving rental growth Continued strength of operating metrics Ongoing evolution of the portfolio Strong uplift in valuation and total returns 11
Slide 12: Improved Retail & Leisure valuation performance
Improved Retail & Leisure valuation performance 90bps Outperformance vs All Retail Total Returns % FY valuation change -1.5% 4.4% 7.5% 8 6 4 2 0 -2 FY 2013 FY 2014 FY 2015 H1 Valuation change H2 Valuation change ERV Growth
Slide 13: Good demand from high quality occupiers
Good demand from high quality occupiers Lettings and renewals by sector by rent 16.6% 8.7% Letting/renewals ahead of ERV 43.3% 13.8% 1.1m sq ft 5.1% 4.6% 3.9% 12.7% Fashion & Footwear Electrical & General Retail Mobile Phone Food & Leisure DIY Health & Beauty Other
Slide 14: British Land operational metrics remain strong
British Land operational metrics remain strong Retailer same store sales Average dwell time Average LFL spend + 3.7% + 4.5% + 16% annualised Source: Springboard Source: BL consumer surveys Source: BL consumer surveys +5% affluent Footfall +1.9% Occupancy remaining shopper visits ahead of market by h
Slide 15: Continuing to outperform footfall benchmarks
Continuing to outperform footfall benchmarks BL footfall performance vs Experian benchmark +290bps Outperformance in 2015 Sep 09 = 100 110 105 100 95 90 UK Market (Experian Index) British Land 85 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 15
Slide 16: Strengthening rental growth trend
Strengthening rental growth trend British Land Retail rental growth vs IPD 2.5% Rental growth % in 2014/15 3.0 2.5 2.0 1.5 1.0 0.5 0.0 H1 2013/14 H2 2013/14 H1 2014/15 H2 2014/15 FY 2013/14 FY 2014/15 -0.5 British Land IPD 16
Slide 17: Investment driving performance – Meadowhall
Investment driving performance – Meadowhall • £3m upgrade to premium retail offer • Last 6 month sales +6.0% for retailers in Park Lane – vs 3.6% across Meadowhall • £50m refurbishment planned to start in September 17
Slide 18: Investment driving performance – Ealing Broadway
Investment driving performance – Ealing Broadway • Bought in two adjoining ownerships Acquired in 2013 for £143m; 6.9% NIY • Phase 1 refurbishment completed • Re-positioning the occupiers • Submitted planning for wider refurbishment and PRS development • Delivering performance: – ERV +19% since acqu
Slide 19: Continuing to evolve our retail portfolio
Continuing to evolve our retail portfolio 28 superstores: £475m; 4.8% NIY £245m mature assets; 6.2% NIY £720m disposals Surrey Quays leisure park (£135m) £749m acquisitions £445m increasing share of existing assets; 5.3% NIY £169m invested in HUT portfolio 5.6% NIY Completed 305,000 sq ft Old Market
Slide 20: Office & Residential highlights
Office & Residential highlights Valuations strongly ahead Exceptional leasing activity Campuses performing well and appealing to new occupiers Good progress on new developments Strong and broad based rental growth 20
Slide 21: Strong Office & Residential performance
Strong Office & Residential performance • Outperformed IPD capital returns by 440 bps 8.0% ERV growth in 2015 % FY valuation change 5.0% 14.5% 18.8% 20 16 12 8 4 0 FY 2013 FY 2014 FY 2015 H1 Valuation change H2 Valuation change ERV Growth 21
Slide 22: Exceptional Office leasing in strong markets
Exceptional Office leasing in strong markets 10.8% Lettings/renewals • 960,000 sq ft of lettings/renewals ahead of ERV completed/under offer • Terms well ahead of valuation: 21% 16% 10.8% ahead of ERV • Occupancy at 98.1% (+730 bps 10% like-for-like) • Diverse range of lettings 8% – 175,000 sq ft te
Slide 23: Leasing strategy success at Leadenhall
Leasing strategy success at Leadenhall £90psf 45 44 43 42 41 40 39 38 Rental high • 84% let/under offer up from 53% 37 36 a year ago 35 34 33 32 • Diverse mix of occupiers 31 30 29 • Beating records for City rents 28 27 4 times over 26 25 24 • Most recent letting at £90psf 23 22 21 to Affinity Shipp
Slide 24: Widening the appeal of Broadgate
Widening the appeal of Broadgate Attracting different occupiers 62,000 sq ft let to WeWork 11,000 sq ft let to Central Working £20 million redevelopment of Broadgate Circle completed 5 Broadgate completing shortly Planning granted at 100 Liverpool Street 24
Slide 25: Making progress at Paddington Central
Making progress at Paddington Central First round of public realm improvements underway On site at 4 Kingdom Street for 147,000 sq ft office building Acquisition of One Sheldon Square for £210 million Grey space fully let including 51,000 sq ft to Microsoft Good prospects for rental growth with aver
Slide 26: Facebook at Regent’s Place – a strong endorsement of the campus
Facebook at Regent’s Place – a strong endorsement of the campus Now Facebook’s largest European hub Taking an additional 66,000 sq ft Brings total space to over 150,000 sq ft Rents nearly doubled on a net effective basis Improving retail and A3 offer in line with broader occupier mix Nearly 350,000
Slide 27: Significant development pipeline
Significant development pipeline • Highly successful development programme since 2010 • Completed projects generated over £1bn of profit; an IRR of over 30% • Successfully replenished our pipeline at good prices • Significant development projects committed or in near-term pipeline • Expected to gene
Slide 28: Financial Review
Financial Review Lucinda Bell Chief Financial Officer
Slide 29: Highlights
Highlights FY to 31 March 2014 2015 Change Underlying Profit before Tax (£m) 297 313 5.4% Underlying Earnings per Share (p) 29.4 30.6 4.1% Dividend per Share (p) 27.0 27.7 2.5% Valuation Performance 8.3% 12.1% EPRA Net Asset Value per Share (p) 688 829 20.5% LTV 40% 35% Total Accounting Return 20.0%
Slide 30: Underlying profit bridge
Underlying profit bridge £m 6 (7) 9 (7) 16 (1) 297 313 FY 2014 Developments Like-for-Like Liability Current year Administration Other FY 2015 rental growth management investment expenses activity 30
Slide 31: Net rental income movement
Net rental income movement £m 9 3 (12) 22 1 562 Retail 1.5% 585 Offices 4.2% Total 2.3% FY 2014 Developments Like-for-Like Current year Current year Prior year FY 2015 rental growth acquisitions disposals investment activity 31
Slide 32: Financing costs
Financing costs £m (6) 6 (1) 3 (1) (202) (201) FY 2014 Developments Liability Current year Current year Prior year FY 2015 management acquisitions disposals investment activity 32
Slide 33: Income statement
Income statement FY to 31 March 2014 2015 Change Net Rental Income (£m) 562 585 4.1% Fees & Other Income (£m) 15 14 Administrative Expenses (£m) (78) (85) Net Finance Costs (£m) (202) (201) Underlying PBT (£m) 297 313 5.4% Underlying Earnings per Share (p) 29.4 30.6 4.1% EPRA Operating cost ratio 16
Slide 34: Another strong valuation performance
Another strong valuation performance FY to March 2015 Valuation Uplift Uplift Yield ERV NEY Weighting London/SE £bn £m % Compression Growth % % Weighting bps % % Retail & Leisure 7.5 581 7.5 47 2.5 5.2 53 Offices & Residential 6.1 1,001 18.8 47 - Of which Offices 5.8 982 19.4 51 8.0 4.6 45 Total 13.
Slide 35: Valuation growth drivers – Retail & Leisure
Valuation growth drivers – Retail & Leisure FY to March 2015 Valuation Uplift Yield Compression ERV Growth £bn % bps % H1 H2 FY H1 H2 FY H1 H2 FY Shopping parks 3.3 7.2 1.1 7.5 45 7 52 0.9 2.1 3.0 Shopping centres 2.2 5.8 3.2 8.7 38 13 48 0.3 1.8 2.1 Superstores 0.9 3.1 (1.0) 1.9 12 (11) 3 0.1 (0.1)
Slide 36: Valuation growth drivers – Offices & Residential
Valuation growth drivers – Offices & Residential FY to March 2015 Valuation Uplift Yield Compression ERV Growth £bn % bps % H1 H2 FY H1 H2 FY H1 H2 FY West End 3.2 9.0 9.0 18.6 21 24 46 2.6 3.6 6.3 City 2.6 9.0 11.3 20.6 34 30 59 5.9 4.4 10.6 Offices 5.8 8.9 10.0 19.4 26 27 51 3.9 4.0 8.0 Residentia
Slide 37: Growth in diluted EPRA net asset value
Growth in diluted EPRA net asset value NAV (p) 31p (27p) 56p (8p) (3p) 92p 829p 688p Mar 14 Offices & Retail & Underlying Dividends Dilution for Tesco Mar 15 Residential Leisure Profit convertible Swap 37
Slide 38: Strength of debt metrics
Strength of debt metrics Proportionally Consolidated 31 Mar 2014 31 Mar 2015 Loan to Value (LTV) 40% 35% Average Interest Rate 4.1% 3.8% Interest Cover 2.5x 2.6x Average Maturity of Drawn Debt (years) 8.7 8.7 Group 31 Mar 2014 31 Mar 2015 Loan to Value (LTV) 29% 28% Available undrawn facilities £2.0
Slide 39: Development programme
Development programme Development Commitment £m Under Near Term • Under construction programme 900 Construction commitment £0.8bn 800 • 4 Kingdom Street now committed Pre sold/ Retail • 87% of costs fixed on projects 700 Pre let Residential under construction 600 • Near-term pipeline replenished - w
Slide 40: Future income growth
Future income growth Annualised Gross Rents Cash Flow Basis Accounting Basis £m £m Current Passing Rent 578 Expiry of Rent-free Periods 63 613 Fixed, Minimum Uplifts 16 Developments – Under construction 21 21 Total Contracted 678 634 Developments – Under Construction 17 15 Investments – Reversions 1
Slide 41: Outlook
Outlook Chris Grigg Chief Executive
Slide 42: Re-positioning the business for long-term growth
Re-positioning the business for long-term growth A bigger and more modern portfolio More concentrated in London and the South East – 64% of our portfolio up from 50% A larger Offices business – Nearly half our portfolio up from one third – West End now over 60% – Focused on large mixed use campuses
Slide 43: Clear strategic focus aligned to long-term trends
Clear strategic focus aligned to long-term trends Macro trends Investment themes Transforming impact 1 Creating great environments of technology Population growth 2 Growing in London and the South East and urbanisation 3 Investing around infrastructure Importance of infrastructure 4 Internet resilie
Slide 44: Our priorities for the year ahead
Our priorities for the year ahead 1 Consistent approach Focus on London and South East Creating great environments Improving areas with good infrastructure Development Investing in our existing Retail assets 2 Disciplined use of Likely to be a net disposer to fund developments and capital exploit a
Slide 45: Canada Water − one of London’s largest regeneration opportunities
Canada Water − one of London’s largest regeneration opportunities Canada Water 46 acres Site controlled by British Land with the London Borough of Southwark London Good Opportunity Area infrastructure Nine Elms White City King’s Cross Earls Court 200 acres 93 acres 67 acres 69 acres 21 ownerships 5
Slide 46: A new town centre for Canada Water
A new town centre for Canada Water Mixed use development Modern and technology enabled Up to 7m sq ft of space (gross) Adaptable Retail Internet enabled Sport & leisure Intelligent buildings Residential Energy efficient Educational Cultural In tune with modern lifestyles Using existing water and Int
Slide 47: Outlook
Outlook Outlook broadly in line with first half Yields have tightened further Some political uncertainty remains Expect interest rates and inflation to remain low Rental growth has strengthened Strong growth in offices Clearer growth trends in retail 47
Slide 48: Appendices
Appendices
Slide 49: BL property outperformance vs IPD – 5 years
BL property outperformance vs IPD – 5 years 5 years ended 31 March 2015 Outperformance bps pa 600 500 480 400 300 350 200 240 180 100 100 100 0 Retail Offices Total Capital Returns Total Returns 49
Slide 50: Adjusted net debt – proportionally consolidated
Adjusted net debt – proportionally consolidated (£bn) LTV 40% LTV 35% 0.3 (1.0) 0.8 4.9 (0.1) 4.9 Mar 14 Acquisitions Development & Disposals Operating Mar 15 Net Debt Capex Cashflow after Net Debt cash dividends 50
Slide 51: Reconciliation of underlying profit before tax
Reconciliation of underlying profit before tax FY to 31 March (£m) 2014 2015 IFRS Profit before tax attributable to shareholders of the Company 1,100 1,734 Net valuation movement (includes disposals) (873) (1,505) Deferred and current taxation of joint ventures & funds 5 (2) Capital financing costs
Slide 52: Gross rental income
Gross rental income1 12 months to 31 March 2015 Annualised as at 31 March 20154 Accounting Basis £m Group JVs & Funds2 Total Group JVs & Funds2 Total Shopping parks 106 53 159 114 62 176 Shopping centres 61 51 112 63 50 113 Superstores 11 57 68 13 38 51 Department stores 32 - 32 29 - 29 Leisure 29 -
Slide 53: Operating costs metric
Operating costs metric FY to 31 March (£m) 2014 2015 Property outgoings 35 33 Administrative expenses 78 85 Fees and other income (15) (14) Ground rent costs (2) (3) EPRA Costs (including direct vacancy costs) 96 101 Gross rental income 597 618 Ground rent costs (2) (3) Gross Rental Income (EPRA bas
Slide 54: Reconciliation of EPRA NAV & NNNAV
Reconciliation of EPRA NAV & NNNAV 31 March 14 31 March 15 £m pence £m pence Balance Sheet (IFRS) Net Assets 7,117 697 8,565 786 Deferred tax arising on revaluation movements 6 13 Mark to market on effective cash flow hedges and 173 257 related debt adjustments Adjust to fully diluted on exercise of
Slide 55: EPRA balance sheet (proportional consolidation)
EPRA balance sheet (proportional consolidation) JVs & £m March 14 Group Funds March 15 Total properties 12,040 9,068 4,609 13,677 Net debt (4,890) (3,425) (1,493) (4,918)2 Other net assets (liabilities) (123) 491 (215) 276 EPRA Net Assets 7,027 6,134 2,901 9,035 Loan to Value (LTV)1 40% 28% 35% Aver
Slide 56: Debt maturity – group
Debt maturity – group (£m) 1,200 1,000 800 600 400 200 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Debenture & loan notes (Secured) Bank Term Loan (Secured) US Private Placements (Unsecured) Convertible Bond (Unsecured) Bank RCF Drawn (U
Slide 57: Debt maturity – joint ventures and funds
Debt maturity – joint ventures and funds1 (£m) 1,200 1,000 800 600 400 200 0 2016 2017 2018 2019 2020 2021 - 2025 2026-2036 JVs - Securitisations Funds - Bank drawn Funds - Bank undrawn JVs - Bank drawn 1 At British Land share (including share of HUT) 57
Slide 58: Debt Financing – Diverse funding profile
Debt Financing – Diverse funding profile • £1.9bn of refinancings arranged Diverse Debt Profile1 (31 March 15) (including £785m RCF April 14) £0.6bn £0.7bn • WAIR improved to 3.8% from 4.1% • Treasury activity in the year has improved earnings by £11m in FY15, £18m in FY16 £0.7bn British Land £1.6bn
Slide 59: Gross and net debt reconciliation
Gross and net debt reconciliation At 31 March 2015 £m Gross Debt (principal value) 5,202 IFRS adjustments: Issue costs and premia (23) Fair value hedges 153 Other Items 99 IFRS gross debt 5,431 Market value of derivatives 32 Cash (288) IFRS net debt 5,175 Adjustments: Remove market value of derivati
Slide 60: Number of shares
Number of shares Number of shares (m) Mar 14 Mar 15 IFRS Basic Weighted Average 999 1,016 IFRS Diluted Weighted Average 1,004 1,022 EPRA Diluted1 Weighted Average 1,004 1,080 Period End 1,021 1,090 1 Including convertible dilution 60
Slide 61: FY16 income statement guidance
FY16 income statement guidance • Gross rental income – Annualised accounting rent: £611m as at 31 March 2015 – Post year end acquisition: Purchase of One Sheldon Square for £210m with £9m of gross rental income – Developments: Further £13m of contracted income to come from developments (including £1
Slide 62: Superstores
Superstores Stand-alone Superstores1 In Shopping Centres & Shopping Total Exposure1,2,3 Parks2 Store Size Number Valuation Capital WALL Number Valuation Capital WALL Number Valuation Capital WALL of Stores (BL share) Value to FB of Stores (BL share) Value to FB of Stores (BL share) Value to FB ‘000
Slide 63: Major property holdings
Major property holdings At 31 March 2015 BL Sq ft Rent Occupancy Lease 1 (excl. developments under construction) Share % 000’s £m pa Rate % Length yrs3 2 1 Broadgate, London EC2 50 3,963 194 99.9 6.5 2 Regent's Place, London NW1 100 1,588 72 99.4 8.4 3 Meadowhall Shopping Centre, Sheffield 50 1,448
Slide 64: Top customers & customer split by industry
Top 20 customers & customer split by industry As at 31 March 2015 % of Contracted Rent Customer Split by Industry (%) Tesco plc 6.5% Manufacturing Other Business Debenhams 5.7% 3% 1% J Sainsbury plc 5.0% Government 3% General Retail 20% HM Government 3.2% TMT 6% UBS AG 3.0% Kingfisher (B&Q) 2.6% DIY
Slide 65: Portfolio weighting
Portfolio weighting At 31 March 2014 2015 (Current) 2015 (Current) 2015 (Pro forma)¹ % % £m % Shopping parks 23.1 24.4 3,330 23.1 Shopping centres 15.6 16.0 2,185 15.2 Superstores 11.1 6.9 934 6.5 Department stores 4.7 4.3 593 4.1 Leisure 2.8 3.8 515 3.6 Retail & Leisure 57.3 55.4 7,557 52.5 West En
Slide 66: Portfolio valuation by sector
Portfolio valuation by sector At 31 March 2015 JVs & Group Total1 Change %2 Funds1 £m £m £m H1 H2 FY Shopping parks 2,161 1,169 3,330 7.2 1.1 7.5 Shopping centres 1,106 1,079 2,185 5.8 3.2 8.7 Superstores 233 701 934 3.1 (1.0) 1.9 Department stores 592 1 593 6.5 10.1 17.3 Leisure 511 4 515 7.1 2.0 7
Slide 67: Portfolio net yields
Portfolio net yields1,2 At 31 March 2015 EPRA Net EPRA Topped- Overall Topped- Net Equivalent Net Reversionary Initial Yield % Up Net Initial Up Net Initial Yield % Yield % Yield %3 Yield%4 Shopping parks 4.9 5.1 5.2 5.1 5.1 Shopping centres 4.6 4.9 4.9 5.1 5.1 Superstores 5.2 5.2 5.2 5.2 5.1 Depart
Slide 68: Portfolio yield & ERV movements
Portfolio yield & ERV movements As at 31 March 2015 ERV NEY ERV Growth %1 NEY Yield Compression2 bps £m % H1 H2 FY H1 H2 FY Shopping parks 184 5.1 0.9 2.1 3.0 45 7 52 Shopping centres 125 5.1 0.3 1.8 2.1 38 13 48 Superstores 51 5.2 0.1 (0.1) (0.1) 12 (11) 3 Department stores 24 4.5 8.6 0.0 8.7 19 42
Slide 69: Lease length and occupancy
Lease length and occupancy1 At 31 March 2015 Average Lease Length (yrs) Occupancy Rate (%) Occupancy To Expiry To Break Occupancy (underlying)2 Shopping parks 8.9 7.9 97.4 98.2 Shopping centres 9.0 7.9 96.5 97.7 Superstores 14.8 14.5 100.0 100.0 Department stores 21.5 21.4 100.0 100.0 Leisure 18.9 1
Slide 70: Annualised rent & estimated rental value (ERV)
Annualised rent & estimated rental value (ERV)1 At 31 March 2015 Annualised Rents (Valuation Basis) £m2 ERV £m Average Rent (£psf) Group JVs & Funds Total Total Contracted3, 4 ERV3 Shopping parks 114 62 176 184 25.4 25.6 Shopping centres 63 51 114 125 29.3 30.9 Superstores 13 38 51 51 21.4 21.2 Depa
Slide 71: Rent subject to open market rent review
Rent subject to open market rent review1 At 31 March 2015 2016 2017 2018 2019 2020 2016-18 2016-20 For period to 31 March £m £m £m £m £m £m £m Shopping parks 19 17 26 27 18 62 107 Shopping centres 14 14 18 16 10 46 72 Superstores 15 5 4 9 15 24 48 Department stores Leisure - - 2 1 - 2 3 Retail & Lei
Slide 72: Rent subject to lease break or expiry
Rent subject to lease break or expiry1 At 31 March 2015 2016 2017 2018 2019 2020 2016-18 2016-20 For period to 31 March £m £m £m £m £m £m £m Shopping parks 12 7 11 12 14 30 56 Shopping centres 10 9 9 6 9 28 43 Superstores 1 - - - - 1 1 Department stores Leisure Retail & Leisure 23 16 20 18 23 59 100
Slide 73: ERV resetting to market
ERV resetting to market At 31 March 2015 2016 2017 2018 2019 2020 2016-18 2016-20 For period to 31 March £m £m £m £m £m £m £m ERV expiring – existing portfolio1 30 50 29 50 44 109 203 Speculative developments – West End 2 14 - - - 16 16 Total Rent Resetting to Market 32 64 29 50 44 125 219 ERV of cu
Slide 74: Contracted rental increases (cash flow basis)
Contracted rental increases (cash flow basis) At 31 March 2015 2016 2017 2018 2019 2020 2016-18 2016-20 For period to 31 March £m £m £m £m £m £m £m Expiry of rent free periods 36 40 5 3 - 81 84 Fixed uplifts (EPRA basis) - - 1 1 - 1 2 Fixed & minimum uplifts in lieu of rental growth 1 3 4 2 1 8 11 T
Slide 75: Reshaping of our retail portfolio – buying and selling well
Reshaping of our retail portfolio – buying and selling well Acquisitions and Disposals & Development Drake Circus Virgin Active Ealing B’way SouthGate Bath HUT units Portfolio Eden walk HUT units Tesco Swap Surrey Quays (50%) Superstore Equity Stake £m 6.1% 7.3% 6.3% 5.7% 5.3% 1000 £29m 800 Net Spen
Slide 76: Completed developments in period
Completed developments in period At 31 March 2015 Current Cost to Let & Under Sector BL Share Sq ft ERV Value Complete Offer % '000 £m £m1,2 £m3 £m The Leadenhall Building Offices 50 601 385 12 19.4 16.2 Broadgate Circle Offices 50 42 23 1 1.2 1.0 Old Market, Hereford Retail 100 305 92 4 4.9 4.8 Mea
Slide 77: Under Construction development programme
Under Construction development programme At 31 March 2015 Sector BL Sq ft PC Current Cost to ERV Let & Resi Share Calendar Value Complete Under End Offer Value % '000 Year £m £m1,2 £m3 £m £m4 5 Broadgate Offices 50 710 2015 399 23 19.2 19.2 - Yalding House Offices 100 29 2015 21 6 1.6 - - 4 Kingdom
Slide 78: Near-term and medium-term developments
Near-term and medium-term developments 2 At 31 March 2015 Sector BL Share Sq ft Start On Site Total Cost Status % '000 £m Near-term Pipeline 5 Kingdom Street1 Offices 100 240 2016 188 Consented 100 Liverpool Street Offices 50 517 2017 236 Consented5 Blossom Street, Shoreditch Mixed Use 100 347 2016
Slide 79: Residential development programme
Residential development programme At 31 March 2015 Sq Ft No. Market PC Date BL Share Mar 15 Cost End Sales Exchanged Units /Status Value1 To come2 Value & Completed '000 % £m £m £m £m Mixed-use Clarges Mayfair3 103 34 2017 100 228 137 464 259 Mixed use 103 34 228 137 464 259 Residential-led Bedford
Slide 80: Estimated future development spend and capitalised interest
Estimated future development spend and capitalised interest At 31 March 2015 Pre-let Cost to complete £m (excluding notional interest) PC ERV - 6 mths Calendar £m Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Total Year 5 Broadgate 2015 19.2 11 12 23 Yalding House 2015 - 6 6 4 Kingdom Street 2017 - 16 2
Slide 81: Estimated future development rental income (accounting basis)
Estimated future development rental income (accounting basis) At 31 March 2015 PC Gross Rental Income (Accounting basis) £m – 12 mths Calendar Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Year Onsite developments 5 Broadgate 2015 Contracted 12 18 18 18 18 Yalding House 2015 Non-contracted - 1 2 2 2 Clarges Es
Slide 82: Property Yields and interest rate yield gap
Property Yields and interest rate yield gap Retail and London Office Yields All Retail Central London Offices 10.0 8.0 NIY % 6.0 4.0 2.0 Source: IPD Property Yield vs 10 Year Gilt Yields Gap as multiple of gilt yield 3.0 1.0 -1.0 1990 1997 1999 2003 2005 2008 2010 2014 Source: IPD/Bloomberg 82
Slide 83: Central London pipeline
Central London pipeline Q1 2015 m sq ft 10.0 8.0 6.0 4.0 2.0 0.0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Source: Knight Frank Completed Pipeline Pre-let Potential Speculative 10 year average new/refurb take-up U/C Pre-let U/C - Speculative 10 year average dev completions
Slide 84: West End development pipeline
West End development pipeline Q1 2015 m sq ft 2.5 2.0 1.5 1.0 0.5 0.0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Source: Knight Frank Completed Pipeline Pre-let Pipeline Speculative 10 year average new/refurb take-up U/C Pre-let U/C - Speculative 10 year average dev complet
Slide 85: City development pipeline
City development pipeline Q1 2015 m sq ft 6.0 5.0 4.0 3.0 2.0 1.0 0.0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Source: Knight Frank Completed Pipeline Pre-let Pipeline Speculative 10 year average new/refurb take-up U/C Pre-let U/C - Speculative 10 year average dev complet
Slide 86: Vacancy Central London
Vacancy Central London West End & City Vacancy Rates % 18 16 14 12 10 8 6 4 2 0 1985 1990 1995 2000 2005 2010 2015 Source: CBRE West End Void Rate (Period end) Pipeline Pre-let 86
Slide 87: London office market rental outlook
London office market rental outlook Rental Growth Driven by Imbalance Between Supply and Demand Prime London Office Rents £ psf 140 120 100 80 60 40 20 Actual Forecast 0 2011 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015
Slide 88: Regent’s Place Campus
Regent’s Place Campus PLACES-FOR-|REGENT’S EVERYONE |PLACE/AT 30
Slide 89: Paddington Central Campus
Paddington Central Campus Development sites (355,000 sq ft) + 1 Crossrail box below (80,000 sq ft) 2 Multi-let offices 267,000 sq ft 3 Multi-let offices 143,000 sq ft 200 residential units sold on 3 4 long leases; retail at ground floor 5 New Hammersmith & City Line 2 4 station and access to Crossra
Slide 90: Broadgate Campus
Broadgate Campus 1 1 Finsbury Avenue 2 2 Finsbury Avenue 15 3 3 Finsbury Avenue 4 1&2 Broadgate 16 5 3 Broadgate 14 6 100 Liverpool Street 7 8-12 Broadgate 17 18 13 8 The Broadgate Circle 9 5 Broadgate Under Construction 2 19 12 10 135 Bishopsgate 3 11 155 Bishopsgate 1 12 175 Bishopsgate 5 9 11 13
Slide 91: Blossom Street, Shoreditch
Blossom Street, Shoreditch Broadgate Blossom St, Shoreditch
Slide 92: Disclaimer
Disclaimer The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the period ended 31 March 2015. This presentation may contain certain “forward-looking” statements. By their nature, forward-looking statements involve risk and uncertaint