Hammerson plc · LSE:HMSO
Hammerson — Investor Day (November 2017)
48 slides from Hammerson's investor day presentation, Nov 9, 2017
Slide 1: Creating desirable destinations
Creating desirable destinations Westquay, Southampton 9 November 2017 [image]
Slide 2: Our well-positioned European portfolio
Our well-positioned European portfolio Equity markets seem to be over playing anxiety about Hammerson portfolio split (1) structural changes in retail Little differentiation between global retail REITs – geographically or by asset quality 6% and management skill 20% 33% Exacerbated by cyclical weakn
Slide 3: Our prime pan-European shopping centre portfolio
Our prime pan- European shopping centre portfolio Selected portfolio of prime shopping centres 48% in Europe Growing markets – top 15 cities 86% of portfolio ranked as top 30 national schemes (1) Contemporary schemes, on average under 20 years old, well designed and well invested (1) % of portfolio
Slide 4: Today's agenda
Today’s agenda 01 Our markets and strategy 11:00 Mark Bourgeois – MD UK and Ireland 02 Leasing trends and the evolution of the store 11:30 Iain Mitchell – UK Commercial Director Alex Evered – Group Head of Insight 03 Creating desirability 12:00 Sophie Ross – Group Head of Multichannel 04 Westquay: A
Slide 5: Our markets and strategy
01 Our markets and strategy Mark Bourgeois – MD UK and Ireland Summer Food Fest at Oracle, Reading
Slide 6: What's happening on the ground?
What’s happening Consumption growth (%) (1) H1 2017 Opening/closures of retail units (2) 5.0 on the ground? 4.0 3.0 2.0 Net +103 1.0 0.0 +20,213 openings closures Cyclical consumer spending -1.0 squeeze -2.0 -20,110 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 +20,213 openings Retailers fa
Slide 7: Shopping centre market polarisation
Shopping centre market polarisation: retail and leisure will continue to merge and polarisation will increase market share of large prime malls Evolution of retail space Supermalls: UK sales growth outperformance (1) 2.0 Pure retail Shopping Destination Seamless Constantly 1.5 and leisure multichann
Slide 8: Our winning shopping centre strategy
Our winning shopping centre strategy 1. Leasing momentum 2. Focus on desirability 3. An enviable skillset Footfall outperformance 2017 (1) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Jun-17 Jan-17 May-17 Mar-17 Apr-17 Jul-17 Sep-17 Feb-17 Aug-17 Waterfront, Oracle (1) Hammerson UK shopping centre footfall ve
Slide 9: Our product experience framework
Our product experience framework We create desirability Iconic destinations Differentiated retail Experience led Customer first Built environment Optimal retail mix including Food & beverage Insight driven customer new concepts engagement Communal spaces Leisure as anchor Flexible stores Frictionles
Slide 10: Leasing trends and the evolution of the store
02 Leasing trends and the evolution of the store Iain Mitchell – UK Commercial Director Alex Evered – Group Head of Insight DJ set at Student Sessions at Cabot Circus, Bristol
Slide 11: A record volume of leasing across our shopping centres
A record volume of leasing across our shopping centres 2017 shopping centre leasing (£m/%), as at September (1) 5.0 25 4.5 4.0 20 3.5 3.0 15 2.5 2.0 10 1.5 1.0 5 0.5 0.0 0 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 UK SC France Ireland Cum 2017 Cum 2016 Leasing volume +42% YoY Co
Slide 12: Pricing tension for the right space
Pricing tension for the right space Shopping centre leases signed above/(below) ERV (%) (as at end September 2017) 100% 80% 60% 40% 20% Total 8% above ERV 0% -20% -40% -60% Rent reviews secured +7% positive rental uplift (1) (1) Rent reviews settled in 2017, UK and Ireland only Leasing trends and th
Slide 13: Current trends in leasing
Current trends in leasing Athleisure and well-being Well curated fashion Exceptional dining experiences Cars presented stylishly Convenient services International (non-US) Personal luxuries Brands communicating direct to consumers Leasing trends and the evolution of the store 13
Slide 14: Rigorous approach to leasing and close retailer relationships
Rigorous approach to leasing and close retailer relationships Focus on consistent LfL NRI growth Granular unit-by-unit approach Numerous drivers to contribute to income and phasing Good visibility Close to our tenants and future brands Hammerson shopping centre LFL NRI growth (%) 3.0% 2.0% 1.0% 0.0%
Slide 15: Evolution of space
Retailers know that stores and online are complementary Consolidation Online Ecommerce of the high retailers Evolution of space growth; crisis street; increasingly of faith in independent going offline store-based stores & opening Rise of big retail Rise of omni- struggled stores box out-of- channel
Slide 16: Retailers are optimising their store estates
Retailers are optimising their store estates Over the next 5 years, do you expect to have Over the next 5 years, do you expect to have more or fewer retail stores? (% of respondents) more or fewer stores? (% of fashion respondents) 100% 100% Largest portfolios 90% 19 anticipate 80% 44 reduction 45 8
Slide 17: Each retailer's proposition will dictate its space requirements
Each retailer’s proposition will dictate its space requirements and the focus of its investment Consumer products Curator Total focus on customer experience. Includes brands speaking Carefully selected products, customer support, make it easy to direct to consumers find what you are looking for Inve
Slide 18: Click & collect and online transactions originated in-store
Click & collect and online transactions originated in-store account for a third of all online sales, growing rapidly 2017: Online sales generated by a 2020: Online sales generated by a store, add 10% to in-store sales (1) store, add 14% to in-store sales (1) Store originated Store originated Online
Slide 19: Store productivity is more than just in-store sales
Store productivity is more than just in-store sales Representation of a retailers’ store productivity 1. Click & collect and online transactions originated in-store (1) +10−14% 2. Retail ‘halo’ effect (2) In-store sales 123 +5−7% 3. Retail logistics support (Collect+) (3) Retailers are focused on to
Slide 20: Creating desirability
03 Creating desirability Sophie Ross – Group Head of Multichannel Summer Food Fest at Oracle, Reading
Slide 21: We create desirability
We create desirability We want our centres to be irresistible to retailers and consumers A Shopping Affair, Victoria Leeds Light show, Westquay Net Promoter score (%): 62 Apple 61 Westquay 52 Our shopping centres (1) 26 Alton Towers 10 sky Beach Bar pop-up, Oracle (1) Includes UK shopping centre por
Slide 22: A customer-centric culture
A customer- People centric culture Young team from variety of backgrounds bring new skills Insight Data from our own centres; customer surveys; partnerships Connected teams Best practice informs delivery across all centres 22
Slide 23: Consistency through a framework approach (2015)
Consistency through a framework approach Product Experience Framework - 2015 Toilets Wayfinding Seating Handsfree Click & Play 9 Interactive Style Chatbot upgrade shopping Collect hoardings Seeker Brent Cross Bullring Cabot Circus Centrale
Slide 24: Consistency through a framework approach (2017)
Consistency through a framework approach Product Experience Framework - 2017 Toilets Wayfinding Seating Handsfree Click & Play 9 Interactive Style Chatbot upgrade shopping Collect hoardings Seeker Brent Cross Bullring Cabot Circus Centrale
Slide 25: Our strategy: technology is evolving quickly
Our strategy: technology is evolving quickly, we focus on human habit and our own core competencies 1. Individuals are social and sensory, they want inspiration and entertainment 2. Consumers want certainty and convenience 3. We are not smarter than Silicon Valley! Partners for technology Creating d
Slide 26: Individuals are social and sensory, they want inspiration and entertainment
1. Individuals are social and sensory, they want inspiration and entertainment Destination leisure: An immersive and genuinely differentiated leisure experience Chel-ski indoor skiing Winter Gardens, New York 4D cinema, Pulton’s Park, Hampshire Box Park, Croydon Events at Bullring The Escape Game, M
Slide 27: Consumers want certainty and convenience
2. Consumers want certainty and convenience 5-star service: End to end concierge style service to support our shoppers on a frictionless journey Health clinic, Westgate Mall, Singapore VR, Toms stores Dart charge Post Office, Suntec City Mall, Singapore Handsfree shopping, Bicester Village Valet Par
Slide 28: Partners for technology
We are not smarter than Silicon Valley! Partners for technology Partners for technology: test/learn/roll out Style Seeker Plus app Chatbot Creating desirability 28
Slide 29: Roadmap for delivery
Roadmap for delivery Now 2 - 3 years 3 - 5 years Identify new leisure and event spaces in centres Portfolio allocation Evaluate large space retail re-purposed as leisure Dispose assets not adaptable to high-spec leisure and events Constant analysis of consumer behaviour to deliver relevant Product E
Slide 30: Westquay: asset management and development
04 Westquay: asset management and development Peter Cooper – Director UK Shopping Centres Westquay, Southampton
Slide 31: Westquay: delivering regional excellence
Westquay: delivering regional excellence Hammerson built 2000; extended 2016 1million sq ft retail, leisure & dining 18 million footfall p.a. Leading regional destination southern England Joint venture with GIC Selection of tenants Westquay: asset management and development 31
Slide 32: Strategic journey to create a modern and relevant scheme
Strategic journey to create a modern and relevant scheme and position for New hero next phase of growth image for Westquay 2012: Reposition grab’n’go dining Level 4 Dwell time +7% 2014/15: Lease expiry provided opportunity to re-profile tenant mix New flagship brands; lifted rental tone Westquay val
Slide 33: A dining and leisure destination in its own right
We have created a dining and leisure destination in its own right 17,000m2 extension 20+ restaurant brands Gateway for new entrants to city Hollywood Bowl Showcase Cinema de Lux Public Esplanade with dedicated programme of events Revives profile of historic city walls GIC investment underpins valuat
Slide 34: A skilfully curated dining mix with wide-reaching appeal
A skilfully curated dining mix with wide-reaching appeal 1. Leisure / experiential dining 2. Mid market quality casual 1 3. Aspirational casual dining Tenants Westquay: asset management and development 34
Slide 35: Capturing a greater share of the market spend
Capturing a greater share of the market spend Distribution of Southampton catchment shopper spend (%) (1) YTD: 13 leases signed , £3.2m 100% ERV growth +2.1% 90% 21 21 22 80% 70% 60% 49 48 46 50% Laing jewelers Smiggle 40% 30% 8 7 8 20% 22 23 25 10% 0% 2015 2016 2017 Westquay Rest of Southampton Oth
Slide 36: Future plans and Westquay phase two
Future plans and Westquay phase two Residential Phase 1 Residential Hotel Retail, catering and leisure 36
Slide 37: Thank you
Thank you 37
Slide 38: Appendices
Oracle, Reading Appendices Appendices 38
Slide 39: Westquay key facts
Westquay KEY FACTS SOUTHAMPTON Developed in 2000 and owned in a joint venture Opened between Hammerson and GIC, Westquay has transformed Southampton’s city centre. Extended in 2000 / 2016 2016 to provide a 62k sq ft cinema, additional catering accommodation of 100k sq ft, leisure of 12k Size (sq ft)
Slide 40: Westquay, Southampton
WESTQUAY, SOUTHAMPTON 40
Slide 41: Westquay catchment
Westquay catchment Source: Javelin (Westquay North and South) Appendices 41
Slide 42: Westquay visitors' mode of transport
Westquay visitors’ mode of transport Source: Javelin Appendices 42
Slide 43: Westquay customer profile and behaviour
Westquay customer profile and 2.1 22% 35 89 22 behaviour £108 71% 3.6 1.4 £20 50% Source: Javelin (Westquay North and South) Appendices 43
Slide 44: Optimising the tenant mix at Westquay
Secured ‘powerhouse brands’ on Upper Mall Optimising the tenant mix at Westquay North Repositioned Lower Mall with aspirational offer Westquay rental tone (Zone A rent. £/sq ft) 320 300 280 260 240 2013 2014 2015 2016 Today Appendices 44
Slide 45: High-quality build, adaptable space and continuous asset investment
High-quality build, adaptable space and continuous asset investment Investment in centre Service charge Maintaining. Replacing like with (tenant) like. E.g. flooring upkeep, running footfall counters, CCTV, wifi upgrade Positioning capex Wayfinding projects, WC upgrades, LED lighting, public seating
Slide 46: Retail 'halo' effect
Retail ‘halo’ effect Retail halo: online sales that do not interact with a store “If you’ve got a great product or marketing angle, DTC [direct to consumer] is suddenly letting you get it to market, experiment, iterate and build a following in completely new ways.” Anthony Fletcher, chief executive,
Slide 47: Retail logistics support (Collect+)
Retail logistics support (Collect+) We partner with Collect+ in all our UK centres: Parcels passing through our centres monthly 16000 14000 12000 10000 8000 6000 4000 2000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct 94,000 parcels have been collected, returned or sent so far this year Appendices 47
Slide 48: Leading retail destinations sit at the heart of their communities
Leading retail destinations sit at the heart of their communities Teenage Markets, Leeds 82% Of retail jobs to local people (1) Teenage Markets, Leeds 40,000 Full-time equivalent jobs created £40m Yoga at Victoria, Leeds Invested by retailers in training Your 5 at Bullring £2.4bn Estimated attributa