Derwent London plc · LSE:DLN
Derwent London — H1 2016 Earnings Presentation
80 slides from Derwent London's earnings presentation, Aug 11, 2016
Slide 1: Interim Results 2016
INTERIM RESULTS 2016 DERWENT LONDON PLC
Slide 2: Contents
CONTENTS Presenters: Contents: John Burns Introduction and overview 01 Simon Silver Results and financial review 11 Damian Wisniewski Valuation and portfolio analysis 22 Nigel George Projects 31 Summary 41 Appendices 44 Disclaimer 78 Derwent London plc Interim Results 2016
Slide 3: Introduction and Overview
INTRODUCTION AND OVERVIEW John Burns Derwent London plc Interim Results 2016 1
Slide 4: Highlights
HIGHLIGHTS POSITIVE RESULTS GOOD LETTINGS FINANCIAL ■■ NAV growth +1.8%1 ■■ £21.3m3 pa of lettings in year to date ■■ LTV 19.1% at 30 June 2016 ■■ EPRA PBT +14.9%2 including £4.6m pa in H2 to date ■■ Interest cover ratio increased to 371% ■■ Lettings 5.4% above Dec 15 ERV ■■ Dividend per share +10.0
Slide 5: EU Referendum Raises Uncertainty
EU REFERENDUM RAISES UNCERTAINTY ■■ Potential negative impacts: DERWENT LONDON TAKE-UP YTD BY SECTOR ■■ Economic slowdown ■■ Relocation risks Other 15% ■■ Loss of EU status Retail sales 2% Retail head offices, showrooms 3% ■■ Potential positive impacts: ■■ Weaker sterling Financial 9% £21.3m pa Prof
Slide 6: Central London Office Outlook
CENTRAL LONDON OFFICE OUTLOOK Estimates for our portfolio 2016 Market factors ■■ Current demand for our space holding up ■■ London’s economic growth is expected to slow Rents 1-5% ERV growth ■■ Central London’s vacancy remains low ■■ Developers likely to be more cautious ■■ London is an important gl
Slide 7: Occupier Demand Steady in Central London
OCCUPIER DEMAND STEADY IN CENTRAL LONDON ■■ Total occupier demand of 15.7m sq ft as at OFFICE OCCUPIER DEMAND 30 June: Demand (million sq ft) 30 ■■ 2% lower than the start of the year Potential Demand Active Demand ■■ 5% above the long-term average and the third 25 highest in the last eight years 20
Slide 8: Locking in Potential Growth
LOCKING IN POTENTIAL GROWTH Rental income (£m pa) LETTING ACTIVITY ■■ Strong letting activity YTD: 30 Pre-lets Non pre-lets ■■ 380,300 sq ft at £21.3m pa of rental income: 25 ■■ H2: 112,600 sq ft at £4.6m pa 20 ■■ 93% pre-let (by income) ■■ Overall, +5.4% above Dec 2015 ERV 15 10 5 0 2007 2008 2009
Slide 9: Development & Refurbishment Activity Overview
DEVELOPMENT & REFURBISHMENT ACTIVITY OVERVIEW ■■ Major source of income reversion Development ERV1 £82.6m ■■ Significant capital expenditure +5% in H1 ■■ Flexibility with timing Development capex to complete ■■ Yield on cost on four developments 6.7% £479m -8% in H1 ■■ Significant value add if marke
Slide 10: Development & Refurbishment Activity in Detail
DEVELOPMENT & REFURBISHMENT ACTIVITY IN DETAIL ERV £m Capex to Space gain complete ‘000 sq ft Pre-let Vacant £m t t t en en en m pm sh pm elo rbi elo v fu v Advanced De Re De stage (including refurbishments): 175 20.7 22.0 125 White Collar Factory EC1 The White Chapel Building E1 The Copyright Build
Slide 11: Rent Reviews, Lease Renewals and Regears
RENT REVIEWS, LEASE RENEWALS AND REGEARS ■■ Rent reviews and lease renewals estimated to add £33.5m pa (+15% in H1) H1 £70 psf H1 £61 psf H2 £47 psf 1-2 STEPHEN STREET W1 60 WHITFIELD STREET W1 1 OLIVER’S YARD EC1 ■■ Rent review settled on 21,100 sq ft ■■ Lease regeared on 36,200 sq ft ■■ Regear com
Slide 12: Middle Market Product Well Placed
MIDDLE MARKET PRODUCT WELL PLACED ■■ Middle market investment portfolio with robust financing £43 psf 6.8 years 4.6% £923 psf Average ‘topped-up’ Average unexpired True Average office rent lease length1 equivalent yield office value 1 Including pre-lets 8.1 years Derwent London plc Interim Results 2
Slide 13: Results and Financial Review
RESULTS AND FINANCIAL REVIEW Damian Wisniewski Derwent London plc Interim Results 2016 11
Slide 14: Headline Numbers
HEADLINE NUMBERS Jun 2016 Dec 2015 Jun 2015 Total portfolio at fair value 1 £5,128.3m £4,954.5m £4,551.8m EPRA net asset value per share2,3 3,598p 3,535p 1.8% 3,226p 11.5% EPRA triple NAV per share 2,3 3,486p 3,463p 3,125p Gross property income £76.7m £152.0m £74.3m EPRA profit before tax3 £44.8m £8
Slide 15: Net Assets, Debt and Gearing
NET ASSETS, DEBT AND GEARING ■■ EPRA NAV per share up 1.8% to 3,598p NET ASSETS, DEBT AND GEARING from 3,535p £m % 4,000 Net debt NAV gearing 3,923 3,990 80 ■■ Equity shareholders’ funds increase to £3,990m Net assets1 LTV ratio 3,500 70 ■■ Net debt increased to £1,008.6m from £911.7m: 3,000 3,012 6
Slide 16: EPRA NAV Movement
EPRA NAV MOVEMENT Revaluation surplus: EPRA NAV PER SHARE Pence (p) Investment properties £64.5m 4,000 Owner-occupied property1 £0.5m Trading property write-down2 (£1.4m) Share of JV revaluation surplus £0.2m 3,750 For EPRA NAV movement £63.8m 57p 57 37 2 2 (30) (5) 3,598 3,535 3,500 Profit on dispo
Slide 17: EPRA Profit Before Tax
EPRA PROFIT BEFORE TAX1 ■■ EPRA profit £44.8m, up 14.9% from £39.0m in H1 EPRA PROFIT BEFORE TAX 2015 ■■ Excludes profit on sale of trading property £m 100 ■■ Property income & outgoings covered on pages 16-17 90 1.1 ■■ Admin costs down 2.7% after adjusting for impact in 80 0.0 76.7 2016 of prior ye
Slide 18: Gross Property Income
GROSS PROPERTY INCOME MOVEMENTS IN GROSS PROPERTY INCOME ■■ Disposals include: £m Davidson Building WC2 £0.6m 100 22 Kingsway WC2 £0.5m ■■ Lettings and reviews include: 90 40 Chancery Lane WC2 £2.4m 5.9 1-2 Stephen Street W1 £2.3m 80 20 Farringdon Road EC1 £1.0m 0.4 3.2 (3.5) 0.1 Holden House W1 £1.
Slide 19: Property Outgoings, Cost Ratios and EPRA Rental Income
PROPERTY OUTGOINGS, COST RATIOS AND EPRA RENTAL INCOME PROPERTY OUTGOINGS H1 2016 H1 2015 £m £m Property outgoings 3.8 5.0 Decrease due to a reduction in void costs Ground rents 0.3 0.1 Surrender premiums paid 0.1 - Dilapidation receipts (0.1) (0.6) 4.1 4.5 EPRA COST RATIOS H1 2016 FY 2015 H1 2015 %
Slide 20: Cash Flow
CASH FLOW ■■ Increase in net debt of £96.9m to £1,008.6m ■■ Cash from operations is net of a payment of £5.3m (inclusive of SDLT) to Capita’s existing landlord NET CASH FLOW MOVEMENTS FORECAST CAPITAL EXPENDITURE1 H1 2016 H1 2015 Capital expenditure Capital expenditure Capitalised interest (Major pr
Slide 21: Proforma Impact of Major Schemes
PROFORMA IMPACT OF MAJOR SCHEMES ■■ Assumes no disposals and no further lettings other than those already contracted ■■ Shows impact of estimated capital expenditure and schemes commencing Contracted Estimated income on Schemes Jun 2016 capex1 schemes commencing2 Proforma Gross property income £153m
Slide 22: Debt Summary
DEBT SUMMARY ■■ Total facilities increased due to £105m of 12/15 year USPP notes drawn in May 2016 ■■ Maturity of the £75m Wells Fargo unsecured revolving Jun 2016 Dec 2015 bank facility extended by one year to July 2021 Total facilities £1,266m £1,161m Net debt £1,009m £912m Unutilised facilities £
Slide 23: Debt Facilities
DEBT FACILITIES Jun 2016 Dec 2015 MATURITY PROFILE OF DEBT FACILITIES Average interest rate (spot) 1 3.65% 3.68% £m 0 50 100 150 200 250 300 350 400 450 500 550 600 650 Average interest rate (spot) 2 3.88% 3.93% 2016 Proportion of drawn facilities at 2017 86% 85% fixed rate or hedged 2018 28 Average
Slide 24: Valuation and Portfolio Analysis
VALUATION AND PORTFOLIO ANALYSIS Nigel George Derwent London plc Interim Results 2016 22
Slide 25: Valuation
VALUATION Joint H1 2016 Valuation date 30 June: Portfolio venture valuation valuation valuation Total movement ■■ A week after EU referendum: £m £m1 £m % West End 3,364.6 12.3 3,376.9 1.8 ■■ Market uncertainty City Borders 2 1,662.5 23.4 1,685.9 1.2 Central London 5,027.1 35.7 5,062.8 1.6 ■■ Stamp D
Slide 26: Valuation Performance and Drivers
VALUATION PERFORMANCE AND DRIVERS On-site developments contribute to outperformance: DRIVERS OF VALUATION SURPLUS ■■ Valued at £591m (+3.4% in H1 2016): Uplift (%) 3.0 ■■ Advanced stage: White Collar Factory +7.1% +2.5 The Copyright Building +14.3% 2.5 -0.8 ■■ Early stages: 80 Charlotte Street -2.5%
Slide 27: Rental Value Growth
RENTAL VALUE GROWTH ■■ Underlying rental growth of 4.1% in H1 2016, driven by: ■■ Low average rents RENTAL VALUE GROWTH ■■ Letting activity Half-yearly rental value growth (%) ■■ Asset management 15 13.3 12 ■■ West End (+4.4%) outperformed City Borders 9 (+3.8%) for the first time in five years 8.1
Slide 28: Movement in Yields
MOVEMENT IN YIELDS EPRA yields ■■ Net initial yield 3.1% (Dec 2015: 3.1%): TRUE EQUIVALENT YIELD MOVEMENT1 ■■ ‘Topped-up’ net initial yield 3.8% (Dec 2015: 3.8%) True equivalent yield (%) 7.5 15bp ■■ True equivalent yield 4.58% (Dec 2015: 4.52%): 97bp 7.0 ■■ 6 basis points increase in H1 2016 83bp 6
Slide 29: Context to Yield Movement
CONTEXT TO YIELD MOVEMENT ■■ Spread between true equivalent yield and 10-year Gilt widens to 371bp: ■■ Gilt yield fell from 2.0% to 0.9% in H1 ■■ Economic slowdown: VALUATION YIELDS1 ■■ Impact on tenant demand Yield % or Gap between DL TEY and 10-year Gilt 9 Derwent London True Equivalent Yield 10-y
Slide 30: Portfolio Income Potential - Reversion
PORTFOLIO INCOME POTENTIAL - REVERSION ■■ Net income of £140.3m with ERV of £291.1m BUILD-UP OF INCOME POTENTIAL Rental uplift (£m) ■■ Significant income potential of 107% or £150.8m1: 160 £4.55m £3.02m £1.53m = + 33.5 ■■ 31% (£46.0m) locked in, including: let in Q3 2016 pre-let Q3 2016 pre-let Q3 2
Slide 31: Central London Office Rental Values
CENTRAL LONDON OFFICE RENTAL VALUES 84% of portfolio income from central London offices: ■■ Potential to drive rents - average ‘topped-up’ office rent CENTRAL LONDON OFFICE RENT PROFILE only £43.28 psf £ psf 55 ‘Topped-up’ rents H1 2016 2015 Jun-15 Dec-15 Jun-16 53.701 <£30 psf 7% 9% 51.221 50 £30-£
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Slide 33: Projects
PROJECTS Simon Silver Derwent London plc Interim Results 2016 31
Slide 34: Delivery of Current Pipeline
DELIVERY OF CURRENT PIPELINE DEVELOPMENT COMPLETIONS Floorspace (million sq ft) ■■ Three projects totalling 566,000 sq ft due to 0.40 H2 2016 2017 2018 2019 complete in H2 2016 (53% pre-let) 0.35 ■■ One project of 107,000 sq ft due to complete in 2017 (81% pre-let) 0.30 0.25 ■■ Two schemes totalling
Slide 35: H2 2016 Completion: White Collar Factory EC1
H2 2016 COMPLETION: WHITE COLLAR FACTORY EC1 ■■ 293,000 sq ft scheme due to complete Q4 2016: t le ■■ 237,000 sq ft 16-storey office tower re- p ■■ Additional office campus, restaurants, residential and % 56 a new public square ■■ 56% pre-let overall and office tower 70% pre-let ■■ Capex to complete
Slide 36: White Collar Factory Filling Up
WHITE COLLAR FACTORY FILLING UP ■■ Mixed-use scheme with ERV of £16.7m: ■■ 164,800 sq ft pre-let: ■■ £10.2m pa rental income ■■ Good interest on further space Rent Min uplift Option space Q3 2016 Spark44 £1.53m pa 22,700 sq ft £67.50 psf £70.001 psf Q2 2016 Capital One £1.92m pa 29,500 sq ft £65.00
Slide 37: H2 2016 Completion: The White Chapel Building E1
H2 2016 COMPLETION: THE WHITE CHAPEL BUILDING E1 t ■■ 270,000 sq ft light touch office refurbishment: le re- ■■ Phase 1 (185,000 sq ft): p % ■■ On site and completes Q4 2016 46 ■■ ERV £9.1m ■■ Capex to complete £10m ■■ Phase 2 (85,000 sq ft): ■■ Lower ground storage ■■ Exploring alternative uses Der
Slide 38: Good Pre-Letting Progress Since May 2016
GOOD PRE-LETTING PROGRESS SINCE MAY 2016 THE WHITE CHAPEL BUILDING E1 ■■ 84,550 sq ft, 46% of Phase 1, pre-let to four tenants: ■■ £4.0m pa (£45 to £49.50 psf) Rent Min uplift ■■ Four 10-year leases, two contain breaks in year five 7 ■■ Two thirds (by income) let in Q3 PHASE 1 6 5 Q3 2016 Reddie & G
Slide 39: 2017 Completion: The Copyright Building W1
2017 COMPLETION: THE COPYRIGHT BUILDING W1 ■■ 107,150 sq ft development due to complete in t le H2 2017 re- p ■■ 87,150 sq ft of offices pre-let to Capita in Q1 2016: % 81 ■■ £7.4m pa (gross) / £6.5m pa (net) ■■ 20-year lease with no breaks ■■ Rental incentives equivalent to a 34 months rent-free pe
Slide 40: 2019 Completion: Brunel Building W2
2019 COMPLETION: BRUNEL BUILDING W2 ■■ Demolition completed in Aug 2016 ■■ Potential to defer development ■■ 240,000 sq ft of offices ■■ ERV £14.8m (net) - Offices c.£62.50 psf ■■ Capex to complete £113m ■■ Completion H1 2019 Derwent London plc Interim Results 2016 ▪▪ Appendix 27 38
Slide 41: 2019 Completion: 80 Charlotte Street W1
2019 COMPLETION: 80 CHARLOTTE STREET W1 ■■ 380,000 sq ft development on site: ■■ 321,000 sq ft offices ■■ 45,000 sq ft residential ■■ 14,000 sq ft retail ■■ ERV £26.4m – Offices c.£80 psf ■■ Capex to complete £225m ■■ Completion H2 2019 Derwent London plc Interim Results 2016 ▪▪ Appendix 27 39
Slide 42: Planning Consents
PLANNING CONSENTS 1 OXFORD STREET W1 MONMOUTH HOUSE EC1 ■■ Two striking buildings of 275,000 sq ft - 204,000 sq ft ■■ 125,000 sq ft office-led development offices, 37,000 sq ft retail and 34,000 sq ft theatre ■■ 81% floor area uplift ■■ Positioned above Tottenham Court Road Crossrail and ■■ Scheme c
Slide 43: Summary
SUMMARY John Burns Derwent London plc Interim Results 2016 41
Slide 44: Summary
SUMMARY ■■ Increased uncertainty following EU referendum Our ■■ Rental growth likely to slow market ■■ Investment yields may rise marginally in H2 2016 ■■ Middle market product well placed Derwent ■■ Significant potential income growth London ■■ Robust financial position Derwent London plc Interim R
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Slide 46: Appendices
APPENDICES Derwent London plc Interim Results 2016 44
Slide 47: Appendices
APPENDICES 01. Group balance sheet 46 17. Portfolio income potential - reversion 62 02. Net asset value per share 47 18. Available space and projects 63 03. Group income statement 48 19. Rental value growth 64 04. Reconciliation of IFRS and EPRA profits 49 20. Valuation yields 65 05. Explanation of
Slide 48: Appendix 1 - Group Balance Sheet
APPENDIX 1 - GROUP BALANCE SHEET Jun 2016 Dec 2015 Jun 2015 £m £m £m Investment property 4,997.0 4,832.3 4,420.3 Owner-occupied property 36.6 36.1 35.8 Investments in joint ventures 32.9 30.7 26.2 Other non-current assets 104.8 94.8 86.8 5,171.3 4,993.9 4,569.1 Other current assets and liabilities (
Slide 49: Appendix 2 - Net Asset Value per Share
APPENDIX 2 - NET ASSET VALUE PER SHARE Jun 2016 Dec 2015 Diluted Diluted £m p £m p Net assets attributable to equity shareholders 3,990.4 3,922.5 Conversion of unsecured convertible bonds 141.5 140.2 Net assets for diluted NAV 4,131.9 3,556 4,062.7 3,501 Revaluation of trading properties - 1.4 Fair
Slide 50: Appendix 3 - Group Income Statement
APPENDIX 3 - GROUP INCOME STATEMENT Half year ended Year ended Half year ended Jun 2016 Dec 2015 Jun 2015 £m £m £m Gross property income 76.7 152.0 74.3 Profit on disposal of trading properties 1.9 3.2 0.6 Write-down of trading property (1.4) - - Other income less other costs 1.1 2.3 0.9 Property ou
Slide 51: Appendix 4 - Reconciliation of IFRS and EPRA Profits
APPENDIX 4 - RECONCILIATION OF IFRS AND EPRA PROFITS Half year Year Half year ended ended ended Jun 2016 Dec 2015 Jun 2015 £m £m £m IFRS profit before tax 98.5 779.5 405.0 Revaluation surplus (64.5) (650.0) (361.0) Joint venture revaluation surplus (0.2) (3.6) (0.4) Profit on disposal of properties
Slide 52: Appendix 5 - Explanation of EPRA Adjustments
APPENDIX 5 - EXPLANATION OF EPRA ADJUSTMENTS Adjustments H1 H1 2016 A B C 2016 2015 IFRS EPRA EPRA £m £m £m £m £m £m Net property and other income 74.2 (1.9) 1.4 73.7 70.7 Total administrative expenses (15.3) (15.3) (14.8) Revaluation surplus 64.5 (64.5) - - Profit on disposal of investment property
Slide 53: Appendix 6 - EPRA Like-for-Like Rental Income
APPENDIX 6 - EPRA LIKE-FOR-LIKE RENTAL INCOME Like-for-like increase on: Properties owned throughout Development H1 2015 H2 2015 the year Acquisitions Disposals property Total % % £m £m £m £m £m H1 2016 Gross rental income 3.8 2.2 59.7 2.0 - 15.0 76.7 Property expenditure (2.4) (0.2) - (1.5) (4.1) N
Slide 54: Appendix 7 - Debt Facilities
APPENDIX 7 - DEBT FACILITIES £m £m Maturity 6.5% secured bonds 175 March 2026 3.99% secured loan 83 October 2024 1.125% unsecured convertible bonds 150 July 2019 4.41% unsecured private placement notes 25 January 2029 4.68% unsecured private placement notes 75 January 2034 3.46% unsecured private pl
Slide 55: Appendix 8 - Net Debt
APPENDIX 8 - NET DEBT Jun 2016 Dec 2015 £m £m Financial liabilities - due after more than 1 year 1,021.3 918.2 Acquired fair value of secured bonds less amortisation (14.5) (15.0) Equity component of unsecured bonds 12.6 12.6 Unwinding of discount of unsecured bonds (5.9) (4.9) Unamortised issue and
Slide 56: Appendix 9 - Fixed Rates and Hedging
APPENDIX 9 - FIXED RATES AND HEDGING Jun 2016 Dec 2015 Proportion of drawn facilities at fixed rates or hedged via swaps 86% 85% Weighted average duration of swaps 1 5.2 years 4.6 years Mark-to-market cost of swaps £30.4m £17.6m Weighted average duration of fixed rate instruments 9.7 years 9.3 years
Slide 57: Appendix 10 - Central London Office Demand
APPENDIX 10 - CENTRAL LONDON OFFICE DEMAND Market statistics OFFICE TAKE-UP ■■ Central London take-up of 5.5m sq ft in H1 2016: Take-up (million sq ft) 20 Central London ■■ TMT 25%, Banking & Finance 23%, Business Services 22%, 18 Consumer Services & Leisure 14% 16 ■■ 13% below the half-year average
Slide 58: Appendix 11 - Central London Office Supply
APPENDIX 11 - CENTRAL LONDON OFFICE SUPPLY Market statistics OFFICE DEVELOPMENT PIPELINE ■■ Available space increases but remains substantially below average: Floor area (million sq ft) Vacancy rate (%) 12 12 ■■ Central London vacancy rate of 3.2% (2.3% Dec 2015) Central London Completed Vacancy rat
Slide 59: Appendix 12 - Central London Office Vacancy
APPENDIX 12 - CENTRAL LONDON OFFICE VACANCY Vacancy rate (%) 16 West End City 14 Central London West End average 12 City average 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: CBRE Derwent London plc Interim Results 2016 57
Slide 60: Appendix 13 - Central London Office Rental Growth
APPENDIX 13 - CENTRAL LONDON OFFICE RENTAL GROWTH Rental growth (% pa) 40 West End City 30 Central London 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -10 -20 -30 -40 Source: CBRE Derwent London plc Interim Results 2016 58
Slide 61: Appendix 14 - Central London Office Investment Market
APPENDIX 14 - CENTRAL LONDON OFFICE INVESTMENT MARKET Robust demand in the first half of the year ■■ £6.8bn of central London office investment transactions in H1 2016: ■■ 17% above the long-term half year average although the lowest since H2 2011 CENTRAL LONDON OFFICE INVESTMENT ■■ 62% of transacti
Slide 62: Appendix 15 - Valuation Performance by Village
APPENDIX 15 - VALUATION PERFORMANCE BY VILLAGE Valuation Valuation Weighting movement Jun 2016 Jun 2016 H1 20161 £m % % West End Central Fitzrovia2 1,850.7 36 3.2 Victoria 581.9 11 0.6 Baker Street/Marylebone 199.6 4 (2.7) Soho/Covent Garden 105.5 2 (3.7) Mayfair 87.1 2 0.0 Paddington 71.6 1 (2.3) 2
Slide 63: Appendix 16 - Portfolio Statistics by Village
APPENDIX 16 - PORTFOLIO STATISTICS BY VILLAGE Rent Net Vacant review/ Estimated Floor Vacant contracted Average space lease area1 floor area rental rental rental renewal Total rental Valuation Weighting ‘000 ‘000 income income value reversion reversion value £m % sq ft sq ft £m pa £ psf £m pa £m pa
Slide 64: Appendix 17 - Portfolio Income Potential - Reversion
APPENDIX 17 - PORTFOLIO INCOME POTENTIAL - REVERSION Rent uplift pa Rent pa £m £m £m Contracted rental income, net of ground rents 140.3 Contractual rental uplifts 1-2 Stephen Street W1 5.3 1 Page Street SW1 3.0 40 Chancery Lane WC2 2.81 20 Farringdon Road EC1 2.41 Turnmill EC1 2.1 Other 15.2 30.8 V
Slide 65: Appendix 18 - Available Space and Projects
APPENDIX 18 - AVAILABLE SPACE AND PROJECTS Vacant Pre-let Total Gross Net Pre-let Total area area area vacant Ground vacant rent net ‘000 ‘000 ‘000 ERV rent ERV ERV ERV sq ft sq ft sq ft £m pa £m pa £m pa £m pa £m pa Comment Available to occupy (EPRA) 20 Farringdon Road EC1 35 - 35 1.7 0.2 1.5 - 1.5
Slide 66: Appendix 19 - Rental Value Growth
APPENDIX 19 - RENTAL VALUE GROWTH RENTAL VALUE GROWTH1 H1 2015 H2 2015 2015 H1 2016 % % % % West End 5.0 5.8 10.8 4.4 City Borders 6.3 8.9 15.2 3.8 Central London 5.3 6.7 12.0 4.2 Provincial 2.9 0.4 3.3 2.3 Underlying 5.2 6.6 11.8 4.1 1 On EPRA portfolio Derwent London plc Interim Results 2016 64
Slide 67: Appendix 20 - Valuation Yields
APPENDIX 20 - VALUATION YIELDS YIELD PROFILE1 EPRA INITIAL YIELDS Yield (%) 8 Pre-EPRA EPRA Net initial ‘Topped-up’ yield initial yield 7 % % West End 3.1 3.7 6 City Borders 2.9 3.8 Central London 3.1 3.7 5 Provincial 6.2 6.2 4 EPRA portfolio 3.1 3.8 Reversionary yield 3 True equivalent yield Initia
Slide 68: Appendix 21 - Rent and Tenant Banding
APPENDIX 21 - RENT AND TENANT BANDING CENTRAL LONDON ‘TOPPED-UP’ PROFILE OF TENANTS’ OFFICE RENT BANDING1 BUSINESS SECTOR2 £0 - £30 psf Other 7% 9% Financial £60+ psf Government and 2% Media, TV, marketing and 21% public admin advertising £30 - £40 psf 4% 28% 15% Charities 4% Retail sales 13% £50 -
Slide 69: Appendix 22 - Major Tenants
APPENDIX 22 – MAJOR TENANTS ‘Topped-up’ income1 % 01 Burberry 6.3 02 Publicis Groupe 5.6 03 Arup 4.3 04 Capita 3.9 05 Expedia 3.4 06 Cancer Research UK 3.4 07 Government 3.2 08 The Office Group 3.2 09 FremantleMedia Group 2.0 10 MWB Business Exchange 1.8 11 EDF Energy 1.4 12 House of Fraser 1.3 13 T
Slide 70: Appendix 23 - Lease Expiries and Breaks / Vacancy Rates
APPENDIX 23 - LEASE EXPIRIES AND BREAKS / VACANCY RATES ■■ £7.5m of income subject to breaks / expiries in H1 2016: ■■ EPRA vacancy rate of 2.0%2 at 30 June 2016: ■■ £2.5m taken into projects ■■ 1.3% at the start of 2016 ■■ 80% of remainder retained or re-let ■■ Vacant space ERV totals £3.9m pa net
Slide 71: Appendix 24 - Lease Expiry Profile and Lease Length
APPENDIX 24 - LEASE EXPIRY PROFILE AND LEASE LENGTH EXPIRIES AND BREAKS AS A PERCENTAGE OF PORTFOLIO INCOME1 West City H2 End Borders Provincial 2016 2017 2018 2019 2020 Total Expiries 1 1 - 2 2 10 6 8 28 Holding over - - - - - - - - - Rolling breaks 2 - - 2 - 2 - - 4 Single breaks - - - - 4 5 5 3 1
Slide 72: Appendix 25 - Business Rates
APPENDIX 25 – BUSINESS RATES ■■ 1 April 2017 - implementation of business rates revaluation, based on rental values at 1 April 2015 ■■ CBRE expects London to see the greatest rate rise: ■■ A 40% increase on prime offices, equating to a 10.8% rise in occupancy cost (rent plus rates) ■■ 81% of our por
Slide 73: Appendix 26 - Portfolio Summary
APPENDIX 26 - PORTFOLIO SUMMARY Net Vacant ERV net income Available Refurbishment Development £m £m £m £m On site: White Collar Factory EC1 The Copyright Building W1 (0.5) - - 50.1 80 Charlotte Street W1 Brunel Building W2 Consented Consented: 0.14m sq ft 1 Oxford Street W1 Monmouth House EC1 0.6 -
Slide 74: Appendix 27 - Current Projects - Profit on Cost
APPENDIX 27 - CURRENT PROJECTS - PROFIT ON COST t t White Collar Factory The Copyright Building Brunel Building 80 Charlotte Street le le e- e- pr pr % % 56 81 Completion Q4 2016 H2 2017 H1 2019 H2 2019 Commercial area (sq ft) 967,000 285,000 107,000 240,000 335,000 Residential area (sq ft) 53,000 8
Slide 75: Appendix 28 - Project Summary - On Site
APPENDIX 28 - PROJECT SUMMARY - ON SITE Current Pre H2 Total net scheme Proposed 2016 2017 2018+ capex to Current income area area capex capex capex complete Delivery office Property £m pa ‘000 sq ft ‘000 sq ft £m £m £m £m date c.ERV psf On-site developments White Collar Factory EC1 - 124 293 27 3 -
Slide 76: Appendix 29 - Project Summary - Future Schemes
APPENDIX 29 - PROJECT SUMMARY - FUTURE SCHEMES Current Pre net scheme Proposed Earliest income area area possession Property £m pa ‘000 sq ft ‘000 sq ft year Comment Consented 1 Oxford Street W1 - - 275 2018 Offices, retail and theatre Monmouth House1 EC1 0.6 69 125 2020 Opposite White Collar Factor
Slide 77: Appendix 30 - Project Pipeline
APPENDIX 30 - PROJECT PIPELINE On-site On-site Consented developments 1.02m sq ft + refurbishments 0.36m sq ft + projects 0.68m sq ft + Appraisals 0.84m sq ft = Potential pipeline 2.90m sq ft White Collar Factory EC1 1 Oxford Street W1 Monmouth House EC13 t 4 4 en d d pm te te 1.52m sq ft en en 1.38
Slide 78: Appendix 31 - Portfolio Map
APPENDIX 31 - PORTFOLIO MAP Primrose Hill Islington Carnegie St TEC H BEL Wharfdale Rd Angel Haggerston Kings Cross Park T Alban Regent’s Park y St S t Pancras Hoxton International Th am Euston es lin k Euston Up Old Street Old Street pe rW St Mat ob Clerkenwell urn Pl thew’s Warren Street Great Sho
Slide 79: Appendix 32 - Management Structure - Executive Team
APPENDIX 32 - MANAGEMENT STRUCTURE - EXECUTIVE TEAM John Burns* Chief Executive Officer Damian Wisniewski* Finance Director Simon Silver* Property Director Nigel George* Property Director Paul Williams* Property Director David Silverman* Property Director Tim Kite* Company Secretary Richard Baldwin*
Slide 80: Disclaimer
DISCLAIMER This presentation has been prepared by Derwent London plc (the may become apparent. Past performance is not indicative of future “Company”). No representation or warranty (express or implied) of results and forward-looking statements are not guarantees of future any nature is given nor is