Slide 1: Annual Results to 31 March 2015
ANNUAL RESULTS TO 31 March 2015 28th May 2015
Slide 2: Introduction
INTRODUCTION
Slide 3: Introduction
Introduction • Another year of fantastic results and we are not done yet. £87.4m pre tax. • Strategy is clearer than ever; London for capital growth and regions for income. It is performing on all fronts. • Developments in delivery mode. • Considerable reversionary potential within the investment po
Slide 4: Financial
FINANCIAL
Slide 5: Headline Numbers
Headline Numbers INCOME STATEMENT Mar 2013 Mar 2014 Mar 2015 Profit before tax £5.0m £101.7m £87.4m EPRA earnings per share 2.4p 33.3p 2.4p 3.70p 4.75p 5.15p Final dividend per share Up 28.4% Up 8.4% BALANCE SHEET Mar 2013 Mar 2014 Mar 2015 Group’s share of property portfolio at £626m £802m £1,021m
Slide 6: Income Statement
Income Statement £m 170 160 £96.6m £155.3m 150 140 £11.1m 130 120 £16.4m 110 100 £24.8m 90 £87.4m £12.2m 80 £3.4m 70 60 £20.1m 50 £38.6m 40 30 20 10 0 Net rental Development Gain on sale and Total property Administration Performance Net finance Financial Other costs Profit before tax income and trad
Slide 7: EPRA Net Assets
EPRA Net Assets p 410 7.2p 1.0p 400 79.3p 390 11.0p 380 6.8p 370 360 350 340 330 320 2.4p 310 300 385.1p 290 280 313.0p 270 260 250 EPRA NAV at EPRA EPS Gain on sale and Development Other EPRA Purchase of own Dividends EPRA NAV at 31 March 2014 revaluation of surplus increase adjustments shares 31 M
Slide 8: Building Rental Surpluses – Investment Portfolio
Building Rental Surpluses – Investment Portfolio £m £59.5m £60.0 £50.0 £40.0 £36.7m £30.0 £20.0 £10.0 £0.0 31 March 2010 31 March 2011 31 March 2012 31 March 2013 31 March 2014 31 March 2015 Gross Passing Rent Estimated Rental Value (ERV) 8
Slide 9: Whilst Keeping Finance Costs Down – Interest Rate Protection
Whilst Keeping Finance Costs Down – Interest Rate Protection Fixed rate borrowings £m 600 4.5% 4.6% 4.2% 4.2% 500 4.2% 400 300 4.5% 200 3.6% 100 0 Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Retail Bond Convertible Bond Other Fixed Rate Borrowings 9 Helical Bar plc
Slide 10: Loan to Value
Loan to Value Value £000’s 1200 1000 800 600 52% 400 34% 200 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Value of property portfolio Secured loan to value Loan to value including unsecured debt 10
Slide 11: Loan Expiry in Parent and Subsidiaries as at 31 March 2015
Loan Expiry in Parent and Subsidiaries as at 31 March 2015 (excludes JV’s) Average maturity 4.4 years £m Average cost of debt 4.0 % £200.0 • £100m 5 year Convertible Bond £180.0 £175.2m • £81m 10 year Investment Facility £160.0 • £75m RCF extended to November 2019 £140.0 £136.1m £120.0 £100.0 £83.6m
Slide 12: Loan Expiry in Joint Ventures as at 31 March 2015
Loan Expiry in Joint Ventures as at 31 March 2015 £m Average maturity 3.0 years Average cost of debt 4.5 % £100.0 £90.0 • £165m 5 year Development Facility £80.0 £70.0 £60.0 £50.0 £40.0 £30.0 £25.6m £22.8m1 £21.6m1 £20.0 £10.0 £0.0 < 1 year 1 - 2 years 2 - 3 years 3 - 4 years 4+ years 1 £44.4m non-r
Slide 13: Firepower
Firepower 31 March 2015 Purpose To fund capex on £93m Unutilised bank facilities development programme and investment acquisition. £70.2m blocked pending Cash £136m refinancing of uncharged properties. Uncharged Properties (at fair value) £131m 13 Helical Bar plc
Slide 14: Strategy
Strategy 1. Extend debt maturities - £100m RCF extended to 5 plus 1 plus 1. - Replace three retirement village facilities with one 5 year facility. - Arrange finance for phase 2 redevelopment of The Bower. 2. Maintain high level of hedging. • Over £500m of total debt fixed or hedged for 4 years at a
Slide 15: London
LONDON
Slide 16: London – Capital Growth
London – Capital Growth • London represents 42% of portfolio. • 27% valuation gain (net of all costs) in London this year, £78m. • Development programme of 1.24m sq ft – 365,000 sq ft pre let or pre sold. • London assets all have angles for capital growth; from new developments to internal refurbish
Slide 17: London – Location
London – Location Enterprise House, W2 Charterhouse Square, EC1 C-Space, EC1 Clifton Street, EC2 Barts Square, EC1 The Bower, EC1 Shepherds Building, W14 Chart House, N1 The Powerhouse, W4 One King Street, W6 One Creechurch New Loom House, E1 Artillery Lane, E1 King Street, W6 Place, EC3 17
Slide 18: London - Purchases and Sales April 2014 – March 2015
London - Purchases and Sales April 2014 – March 2015 Acquired Price Sold Price Comment Charterhouse Square, EC1 £16.0m Clifton Street, E1 £38.25m Completion Sept 2015 Chart House, N1 £6.3m Artillery Lane £15.1m Completion Aug 2015 Hammersmith Cinema, W6 £4.0m Uxbridge £5.4m Uxbridge, UB8 £4.3m (4:2
Slide 19: London Office Development Pipeline
London Office Development Pipeline NIA Sq ft 300,000 2015 2016 2017 2018 ONE CREECHURCH PLACE 250,000 One Barts Close 200,000 THE BOWER: TOWER 150,000 THE BOWER: WAREHOUSE 100,000 C SPACE CLIFTON 23-28 50,000 STREET CHARTERHOUSE HAMMERSMITH 90 BARTS SQUARE TOWN HALL THE BOWER: ARTILLERY CLOSE 54-58
Slide 20: London Development Scheme Review
London Development Scheme Review Property Partner HB Status Start Area Total Completion Helical Potential Share Sq Ft NIA Cost Profit to Helical Profit Date to Come Empire House 20,726 sq ft hotel/retail The Studio Phase 1 Phase 1 – Jan 2014 18,363 sq ft office £180m Phase 1 – July 2015 The Bower, 3
Slide 21: The Bower, Old Street, London EC1
The Bower, Old Street, London EC1 • Phase 1 to be completed July 2015. • Place making – new street and public realm. Empire B House O A L L D D Studio W S I T N NEW STREET R E S Tower Warehouse E T T R E E T 21
Slide 22: The Bower, Old Street, London EC1
The Bower, Old Street, London EC1 Empire House • Fully let. • 17,315 sq ft hotel pre-let to Z Hotels at £650,000. • 3,411 sq ft restaurant pre-let to Ceviche at £140,000. • Completed and open March 2015. 22
Slide 23: The Bower, Old Street, London EC1
The Bower, Old Street, London EC1 The Studio • Fully let. • 18,363 sq ft offices pre-let to John Brown Media at £805,445 (£40.00 psf ground floor, £45.00 psf 1-3). • 1,173 sq ft A3 pre-let to Honest Burger at £75,530. • 2,982 sq ft A3 pre-let to Enoteca da Luca at £91,000. 23
Slide 24: The Bower, Old Street, London EC1
The Bower, Old Street, London EC1 The Warehouse • 122,000 sq ft office:- • Levels 4 and 5, 24,434 sq ft pre-let to Farfetch at £50.25. • Level 6 under offer to Farfetch. • Levels 8 and 9 under offer. • 1,604 sq ft A3 pre-let to Bone Daddies at £67,253. • 3,078 sq ft A3 pre-let to The Draft House at
Slide 25: The Bower, Old Street, London EC1
The Bower, Old Street, London EC1 The Tower • Phase 2 – to commence Q3 2015. completion Q1 2017. • 170,000 sq ft office. • 7,300 sq ft retail/A3. • Total cost £197m.1 • Revaluation surplus to 31 March 2015 - £23m.2 • Anticipated future profit - £25m.2 1 Total cost to joint venture . 2 Helical share.
Slide 26: Barts Square, London EC1
Barts Square, London EC1 “BARISSQUAREESIAIE ><€ es FARRINGDON GROSSRAIL STATION WEST SMITHFIEY THE ASKEW BUILDING ABERNETHY ALBION WAY LITTLE BRITAIN 26 > WELICALAN
Slide 27: Barts Square, London EC1
Barts Square, London EC1 Phase 1 Phase 2 • Construction commenced. • One Bartholomew Close - 211,000 sq ft office. • 144 residential units. • Commence Q1 2016. • 92 residential units launched September 2014: • Complete Q3 2018. ‐ Total value £137.5m. ‐ 64 exchanged, value £86.5m. ‐ Average sales pri
Slide 28: Barts Square, London EC1
Barts Square, London EC1 28
Slide 29: Barts Square, London EC1
Barts Square, London EC1 29
Slide 30: 1 Creechurch Place, London EC3
1 Creechurch Place, London EC3 • 271,500 sq ft offices. • Construction by Skanska well underway – frame commenced. • Completion due September 2016. • Aldgate public realm improvements. • EC3 market will be short of space. • Profit share to Helical at different rents. Assuming market tenant incentive
Slide 31: 23-28 Charterhouse Square, London EC1
23-28 Charterhouse Square, London EC1 • Acquired in December 2014 for £16m. • New 155 year lease from Governors of Sutton’s Hospital in Charterhouse at 8.25% gearing. • Major refurbishment of 38,600 sq ft offices and 5,350 sq ft A3. • Planning application submitted. • Start on site December 2015, co
Slide 32: C Space, London EC1
C Space, London EC1 32
Slide 33: C Space, London E1
C Space, London E1 • Contemporary re-invention of a former carpet factory with 62,000 sq ft of offices. • Work with existing façade but increase window sizes and full height glazing to ground floor. • Cut back ground floor to allow light to lower ground floor. • Additional floor with terraces. • New
Slide 34: Clifton Street, Shoreditch, EC2
Clifton Street, Shoreditch, EC2 • Signed contract to purchase 45,000 sq ft building in November 2013. Deposit £1m. Agreed purchase price £21m. Anticipated completion summer 2015. • Assigned contract in September 2014. Purchasers will pay £38.25m upon PC of the building, on track for September 2015.
Slide 35: King Street, Hammersmith, London W6
King Street, Hammersmith, London W6 35
Slide 36: King Street, Hammersmith, London W6
King Street, Hammersmith, London W6 • Development agreement with Hammersmith & Fulham Borough Council and in a joint venture (50/50) with Grainger plc. • Planning permission received 14 April 2014 for 196 homes, 40,000 sq ft council offices, 3 screen cinema together with retail / residential space.
Slide 37: King Street, Hammersmith, London W6
King Street, Hammersmith, London W6 37
Slide 38: Scottish Power, Glasgow
Scottish Power, Glasgow • 220,000 sq ft net office. • Helical now appointed to deliver Cat B fit out. • Total fee increased to £7.4m. • Helical share - £5.5m. • Completion February 2016. • Three surplus sites at Cathcart, Yoker and Falkirk we aim to trade and expect a profit of £500k - £1m. • Outlin
Slide 39: London – Income Producing Asset Market and Strategy
London – Income Producing Asset Market and Strategy • Strategy: Buy if we can find value. Continue to drive performance of existing assets through refurbishment and re-letting. London is a core part of the long term portfolio. • Acquisitions likely to have angles to increase capital value e.g. recen
Slide 40: London Income Producing Asset Review – Key Projects
London Income Producing Asset Review – Key Projects Valuation Net Rent Headline increase Property March ERV rents Key Events in Year since March 2015 (psf) 2014 Artillery Lane £0m £0.9m +66.4% £65.00 • Planning for A3 on ground floor received City • Refurb implemented • Forward sold for £15.1m. c. £
Slide 41: The Regions
THE REGIONS
Slide 42: The Regions: Strategy for Income
The Regions: Strategy for Income • The regions are 58% of our portfolio by value. • Focus on sectors with strong occupational demand with prospects for rental growth and inward yield shift. • Acquire institutional quality property which may have lost its institutional appeal, e.g. shorter income, in
Slide 43: The Regions: Purchases and Sales April 2014 – March 2015
The Regions: Purchases and Sales April 2014 – March 2015 Purchases Sales Net Investment Retail £71.7m £176.6m -£104.9m Logistics £129.2m £7.9m £121.3m Offices £35.5m £30.4m £5.1m TOTAL £236.4m £214.9m £21.5m • Since period end, we have acquired £13.4m of assets and have £19.6m in solicitors hands to
Slide 44: The Regions: Industrial / Logistics
The Regions: Industrial / Logistics • 14.3% of the portfolio; £146m value. • £129.2m purchased in year. • 1.3% valuation growth after 6% acquisition costs. • Very strong occupational demand and virtually no space being built. (the economics don’t work). Stevenage • Beginning to see rental growth. •
Slide 45: The Regions: Retail
The Regions: Retail • Big rotation out of town centre retail with sale of Corby and Clydebank. • 18.2% of portfolio. £97.9m of retail warehousing. £61.3m of in town retail, dominated by Cardiff, The Hayes. • 2.6% valuation growth. • 4.4% ERV growth, dominated by Cardiff, +13.2%. Cardiff • Numerous r
Slide 46: The Regions: Offices
The Regions: Offices • 10.4% of portfolio; £106m value. • 52% of value in Manchester; Churchgate House and Dale House. • 25% of value in South East. Churchgate House • 12.2% valuation growth in year. • Performance dominated by Churchgate and Lee House Manchester. 30,000 sq ft let in year. Now 87% oc
Slide 47: Retirement Villages
Retirement Villages Asset Class No. No. No. Status Anticipated Units Sold Reserved Completion Liphook 151 147 - Complete. Complete. Potential phase 4 subject to planning. Faygate 173 28 10 Construction ongoing. 2019 Clubhouse opens June 2015. Exeter 164 13 21 Construction ongoing. 2019 Great Alne 16
Slide 48: Portfolio Summary
Portfolio Summary Asset Class Value % Net Initial Yield Reversionary Strategy Portfolio (ex development Yield assets) London Offices £432m 42.3% 2.9% 6.2% Deliver projects to continue to add value for capital growth. Regional Offices £106m 10.4% 5.2% 7.6% Continue leasing, especially in Manchester.
Slide 49: Conclusion
CONCLUSION
Slide 50: Conclusion
Conclusion • The strategy is working to deliver strong total property returns. London Total Returns Regional Total Returns £7.9m £17.6m £18.8m £30.7m Income £77.8m Capital Growth £2.5m Income Development and Trading Profits Revaluation and Gain on Sale • Total property return of £155.3m. 50
Slide 51: Notes
Notes ey 51
Slide 52: Appendices
APPENDICES
Slide 53: Performance Related Awards
Performance Related Awards 2014 2015 £m £m - Share Awards Charge 7.7 7.9 Directors - Deferred Payments 2.9 - - Cash Payments 4.7 4.9 Senior Management / Staff 0.4 0.6 Payroll Taxes 2.1 3.0 Total Charge in Year 17.8 16.4 53
Slide 54: Helical's Portfolio – Changes to Book Value
Helical's Portfolio – Changes to Book Value £1,200,000,000 £1,000,000,000 Convertible Bond Issue £800,000,000 Retail Bond Issue £600,000,000 £400,000,000 £200,000,000 £0 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Mar-08 Sep-08 Dec-08 Mar-09 Sep-09 Dec-09 Mar-10 Sep-10 Dec-10 Mar-11 Sep-11 Dec-
Slide 55: Portfolio Geography by Helical Equity
Portfolio Geography by Helical Equity Scotland Poland 1% Wales 3% 5% North South East 13% 11% South West 4% Midlands 18% London 45% 55
Slide 56: IPD
IPD 1 yr 3 yr 5 yr 10 yr 20 yr % pa % pa % pa % pa % pa Helical 20.4 17.4 11.9 10.9 14.9 IPD 17.5 11.4 10.5 6.3 8.9 Helical’s Percentile Rank 19 5 13 3 1 Source: Investment Property Databank 56
Slide 57: Investment Portfolio – Helical's Share
Investment Portfolio – Helical’s Share Book Value (m) % Value London £370.2m 46.9% Regional Office £103.5m 13.1% Industrial / Logistics £145.7m 18.5% Retail £159.1m 20.1% Retirement Village £11.3m 1.4% TOTAL £789.8m 100% Note: Part of Barts Sq and all of Old Street are held as investments 57
Slide 58: Trading & Development Portfolio – Helical's Share
Trading & Development Portfolio – Helical’s Share Book Value Fair Value Surplus Over % Value (Fair) (m) (m) Book Value (m) Office £8.7m £17.5m £8.8m 7.6% Retail £26.0m £26.3m £0.3m 11.4% Mixed Use £5.2m £5.2m - 2.2% Change of Use £4.5m £8.3m £3.8m 3.5% Residential £26.3m £33.3m £7.0m 14.4% Retiremen
Slide 59: Investment Portfolio Changes
Investment Portfolio Changes Investment Change Mar 12 Mar 13 Mar 14 Mar 15 Portfolio since Mar 14 London Offices 30.2% 35.9% 43.2% 46.9% 3.7% Retail 61.0% 56.0% 40.8% 20.1% -20.7% Industrial / Logistics 5.3% 2.9% 2.1% 18.5% 16.4% Regional Offices 2.1% 3.7% 12.7% 13.1% 0.4% Other 1.3% 1.5% 1.2% 1.4%
Slide 60: Investment Portfolio – Key Statistics
Investment Portfolio – Key Statistics Valuation increase of 11.7% in year to March, including capex, sales and purchase % of Portfolio Valuation Net Initial Reversionary (HB Share) Change Yield Yield London Offices 46.9% 27.0% 2.9% 6.2% Retail 20.1% 2.6% 6.2% 6.5% Industrial / Logistics 18.5% 1.3% 7
Slide 61: Investment Portfolio
Investment Portfolio Average Capital Value Vacancy Rate Change to Unexpired Lease psf (floor area) ERV in Year Term (years) London Offices £331 26.8% 7.0 20.4% Retail £189 2.2% 7.9 4.4% Industrial / Logistics £59 0.3% 4.8 0.6% Regional Office £189 7.9% 5.8 -0.9% TOTAL £146 5.1% 7.0 8.6% Note: London
Slide 62: Investment Portfolio: Lease Expiries
Investment Portfolio: Lease Expiries Lease Expiries and Tenant Break Options in: 2016 2017 2018 2019 2020 Percentage of Rent Roll 9.0% 14.0% 10.7% 12.6% 11.4% Number of Leases 76 86 68 37 34 Average Rent per Lease £49,100 £67,400 £65,000 £141,000 £139,000 62
Slide 63: Asset Management Overview – March 2014 to March 2015
Asset Management Overview – March 2014 to March 2015 Rent % of rent roll Rent lost at break/expiry -£4.0m 9.6% Net rent lost through administration -£0.1m 0.3% New lettings and changes at lease renewal £5.1m 12.2% Rent reviews and RPI uplifts £0.1m 0.3% Net Increase £1.1m 63
Slide 64: Top Tenants
Top Tenants Rank Tenant Tenant Industry Rent % Rent (Helical) Roll 1 Endemol UK Media £2.3m 6.2% 2 Network Rail Infrastructure Infrastructure £2.0m 5.5% 3 DSG Retail Retail £1.3m 3.5% 4 Homebase Retail £1.3m 3.5% 5 Sainsbury's Supermarkets Retail £1.3m 3.5% 6 Economic Solutions Government £1.0m 2.6%
Slide 65: Case Studies
Case Studies
Slide 66: New Loom House – Past
New Loom House – Past • Acquired July 2013. • Price - £34.2m (£304 psf). • 112,000 sq ft total. • 14,500 sq ft vacant. • NOI - £1,607,230 - NIY 4.4%. • Average rent £18.26 psf. • ERV at purchase £2.6m. (£25 psf) - RY 7.2%. • Rationale: • Crossrail. • Rental growth. • Asset management. Helical Bar pl
Slide 67: New Loom House - Present
New Loom House - Present • Current NOI - £1,668,917 (yield on cost 4.4%). • Contracted NOI - £1,824,241 (4.85%). • Lease events completed: • 22 new lettings (£21 - £37.50 psf). • 6 renewals. • 4 rent reviews. • Combined contracted rent secured £1.38m (54,312 sq ft). • Average rent £22 psf. • 3,441 s
Slide 68: The Loom House - Future
The Loom House - Future • Works underway for a new entrance to Gower’s Walk, onsite café, restaurant, bike store and showers along with comprehensive refurbishment of reception and common parts. • 11,000 sq ft of work space to include a 9,000 sq ft ‘super unit’. • Cost £5m - completion Q1 2016. • An
Slide 69: New Loom House - Proposed Ground Floor
New Loom House - Proposed Ground Floor New entrance Restaurant Super unit Cafe 69
Slide 70: The Shepherds Building – Past
The Shepherds Building – Past • Acquired April 2000. • Price £12.5m (£90 psf). • 138,750 sq ft vacant. • New 6th floor constructed – 11,250 sq ft. • First lettings at £25 psf in 2001. • Maintained 95%+ occupancy by net internal area from 2007 until now. • Ground floor common parts refurbished in 201
Slide 71: The Shepherds Building - Present
The Shepherds Building - Present • Current NOI - £3,633,069. • Contracted NOI - £4,127,919. • Average rent £30.50 psf. • Highest rent achieved £47.50 psf. • Total area 151,000 sq ft. • 10,759 sq ft vacant (92.8% occupied). • 8,154 sq ft comprehensively refurbished - quoting rent £52.50 psf. • March
Slide 72: The Shepherds Building - Future
The Shepherds Building - Future • Continue rolling refurbishment to include landlord air conditioning. • 60% of income has lease event by end 2017 (average rent £28 psf). • 80% in next 5 years. Helical Bar plc 7 2 72
Slide 73: Slide 73