Slide 1: Helical Half Year Results
HELICAL HALF YEAR RESULTS Helical Half Year Results to 30 September 2016 1
Slide 2: Agenda
AGENDA One Highlights Gerald Kaye Two Financials Tim Murphy Three Portfolio Matthew Bonning-Snook and Duncan Walker Four Outlook Gerald Kaye Five Q&A Helical Half Year Results 2
Slide 3: Highlights
Highlights Gerald Kaye Helical Half Year Results 3
Slide 4: Results Highlights
RESULTS HIGHLIGHTS EPRA NAV Per Share 471p Profit Before Tax £31.1m Dividend Per Share 2.4p Increase of 15p (3.3%) from 456p (2015 - £85.9m) Increased 4.3% from 2.3p (adjusted) Net Rental Income Valuation Gain Loan To Value £24.6m – up 18.3% £28.6m (+4.0%) 53% (pro-forma 49%) C Space Helical Half Ye
Slide 5: Strategy
STRATEGY • Continued focus - London offices, Manchester offices, Logistics • Value enhancement by: − letting vacant space − asset management opportunities • Bring forward new opportunities e.g. King Street, Hammersmith and Drury Lane • Manage LTV to between 40 – 50% The Bower Helical Half Year Resul
Slide 6: Operational Highlights – Lettings to Date
OPERATIONAL HIGHLIGHTS – LETTINGS TO DATE London London London The Tower, The Loom C Space The Bower 24,724 sq ft 15,387 sq ft 59,000 sq ft London Office: 102,246 sq ft Regional Office: 26,129 sq ft Logistics: 93,364 sq ft Retail: 87,461 sq ft Power Road Studios Manchester, Churchgate and Burton-on-
Slide 7: Operational Highlights – Sales to Date
OPERATIONAL HIGHLIGHTS – SALES TO DATE London Office: £34.5m Logistics: £53.8m One King Street, Hammersmith Stevenage Regional Office: £7.0m Retail: £49.4m Cheadle Huddersfield TOTAL SALES £145m Helical Half Year Results £18.6m pre 23rd June £126.4m post 23 rd June 7
Slide 8: Portfolio Allocation
PORTFOLIO ALLOCATION Retirement Villages, Retirement Villages, £97.8m, 7.8% £103.5m, 8.3% Other, £6.0m, 0.5% Other, £8.7m 0.7% London Office, Regional Retail, -0.5% London Office, £611.2m, 49.3% £673.3m, 53.9% Regional Retail, £96.9m, 7.7% £142.6m 11.5% -3.8% Regional Offices, £102.2m, 8.2% -0.2% Re
Slide 9: Growing Rental Stream into the Future
GROWING RENTAL STREAM INTO THE FUTURE £80 Millions ERV = £ 72.9 m £70 The Bower Phase 2 London Offices £60 London Offices £50 The Bower Phase 2 London Offices The Bower Phase 1 London Offices London Offices £40 The Bower Phase 1 £30 London Offices Regional £20 Industrial *Post Half Year Sales includ
Slide 10: London Programme Completion Dates
LONDON PROGRAMME COMPLETION DATES Sq ft 2015 2016 2017 2018 300,000 ONE CREECHURCH PLACE 250,000 ONE BARTHOLOMEW CLOSE 200,000 THE TOWER 150,000 THE WAREHOUSE THE LOOM 100,000 POWER ROAD C-SPACE STUDIOS 50,000 25 CHARTERHOUSE SQUARE 90 BARTHOLOMEW THE STUDIO CLOSE 0 Oct Nov Nov Sept Nov Mar Aug Sept
Slide 11: Strong Track Record of Value Creation
STRONG TRACK RECORD OF VALUE CREATION EPRA net assets per share (pence) Dividend per ordinary share (pence) 600 10 8.17p Final 500 471p 456p 8 7.25p Interim 6.75p 385p 400 5.55p 313p 6 pence pence 300 264p 4 200 100 2 2.00p 2.10p 2.30p 2.40p 1.85p 0 0 03/13 03/14 03/15 03/16 09/16 2013 2014 2015 201
Slide 12: Market Comment
MARKET COMMENT • Market slowed down pre-Brexit and during post-Brexit uncertainty • Investment volumes down in Q2 and Q3. Anticipated to pick up in Q4 • Take up in City and Tech Belt below last three years and equivalent to 2012 • Total occupational demand above average. Decisions taking longer/dela
Slide 13: Summary
SUMMARY • Lettings – de-risking • Sales • Continued focus • Recycle capital • Manage LTV • Upside potential One Creechurch Place Helical Half Year Results 13
Slide 14: Financials
Financials Tim Murphy Helical Half Year Results 14
Slide 15: Headline Numbers
HEADLINE NUMBERS SEE-THROUGH INCOME STATEMENT Sep 2014 Sept 2015 Sept 2016 Net rental income £18.8m £20.8m £24.6m +18% Development profits / (losses) £15.6m £18.7m (£2.6m) Gain on sale and revaluation of investment properties £34.8m £68.1m £25.8m IFRS profit before tax £42.9m £85.9m £31.1m EPRA earn
Slide 16: Income Statement
INCOME STATEMENT 35 £25.8m £0.3m £31.1m 30 £24.6m 25 20 £2.6m 15 £5.9m 10 5 £5.0m £11.7m £0.6m 0 Net Rents Development Administration Net finance Other EPRA earnings Net gain on Other IFRS profit losses costs sale and before tax revaluation • Net rents have increased by 18% • Development profits of
Slide 17: EPRA Net Assets per Share
EPRA NET ASSETS PER SHARE • Adjustment to opening NAV per share from full adoption of IAS 40 – Investment Property • Development surpluses realised relate mainly to Cortonwood Retail Park and Retirement Villages p 500 21.7p 475 471.4p 4.9p 4.8p 0.7p 460.8p 4.4p 455.7p 5.1p 450 425 400 375 31 March 2
Slide 18: Debt Summary
DEBT SUMMARY March 2016 Sept 2016 Loan Maturity £m £m 500 Total facilities £881.7m £897.6m 450 400 Gross debt £775.1m £742.2m 350 300 Unutilised facilities £106.5m £155.4m £m 250 Percentage of unsecured debt 23% 24% 200 150 Uncharged properties £153m £93m 100 Gearing: 50 0 LTV ratio 55% 53% <1 1-2 2
Slide 19: Debt Facilities
DEBT FACILITIES Interest Rate Protection March 2016 Sept 2016 (fixed rates) 1,000 Average interest rate 4.16% 4.33% 900 Average interest rate (fully utilised) 3.75% 3.99% 800 Proportion of drawn down facilities 82% 88% 700 at fixed rate or hedged Average maturity of borrowings 600 4.5 yrs 4.0 yrs £m
Slide 20: Net Cash Flow Movements
NET CASH FLOW MOVEMENTS Forecast Capital Expenditure March 2016 Sept 2016 £m £m 80 Cash from operations 38.5 (7.4) 70 Acquisitions (377.1) - 60 Capex (28.0) (26.0) Joint ventures 94.1 0.7 50 Disposal proceeds 121.8 54.9 £m 40 Dividends paid (14.4) (0.8) Other cash flow movements (0.4) (0.3) 30 Incre
Slide 21: Loan to Value
LOAN TO VALUE £1,400 90% Proforma 80% £1,200 70% • Current LTV 53% (proforma 49%) £1,000 55% 60% • Capex programme will increase LTV 52% 53% 46% 49% £800 50% 45% £m • Will seek to manage LTV to range Range between 40% - 50% £600 40% 30% £400 20% £200 10% £0 0% 2013 2014 2015 2016 H1 2017 H1 2017 201
Slide 22: Summary of Key Financials
SUMMARY OF KEY FINANCIALS • Growing income stream as the reversion on the investment portfolio is captured • £10m+ of contracted rents start to flow by June 2017 • Finance costs contained with over 88% of debt hedged for almost 4 years • Debt maturity of 4.0 years with no secured loans repayable bef
Slide 23: Portfolio
Portfolio Matthew Bonning-Snook | Duncan Walker Helical Half Year Results 23
Slide 24: C Space, EC1
C SPACE, EC1 • 62,000 sq ft offices – fully let • 75% pre let to MullenLowe. 25% let to NeuLion • Contracted rents £3.64m pa Helical Half Year Results 24
Slide 25: The Warehouse & The Studio, The Bower, EC1
THE WAREHOUSE & THE STUDIO, THE BOWER, EC1 Phase 1 • The Studio – 18,363 sq ft fully let - £980,000 (one office tenant - £45psf) • The Warehouse – 121,923 sq ft fully let - £8,050,000 (five office tenants £50.25 - £68psf) Helical Half Year Results 25
Slide 26: The Tower, The Bower, EC1
THE TOWER, THE BOWER, EC1 Phase 2 • 171,158 sq ft offices • Levels 1 – 6, 59,000 sq ft pre let to WeWork • 17 floors (9,500 – 11,300 sq ft floors) • 7,200 sq ft over two ground floor retail/restaurant units • Under construction • Completion due Q2 2018 Helical Half Year Results 26
Slide 27: One Creechurch Place, EC3
ONE CREECHURCH PLACE, EC3 • 272,555 sq ft offices (17 floors) • Completed November 2016 • City of London F/H. Funded development with HOOPP. Helical 10% ownership • Assuming market incentives and letting within 12 months, profit share expectation: £60 psf overall - £18m £65 psf overall - £23m £70 ps
Slide 28: Barts Square, EC1
BARTS SQUARE, EC1 Phase 1 • 123,579 sq ft residential (144 apartments), 3,101 sq ft retail. Under construction • Sales: – 144 units launched with total value of £195m – Contracted sales: 108 units exchanged – Average sales price to date £1,578 psf • Residents’ concierge, bar and screening room. 26 c
Slide 29: 90 Bartholomew Close, EC1
90 BARTHOLOMEW CLOSE, EC1 • 23,508 sq ft offices over floors and 5,673 sq ft restaurant • Completion September 2017 • Retained facades Helical Half Year Results 29
Slide 30: One Bartholomew Close, EC1
ONE BARTHOLOMEW CLOSE, EC1 • 213,858 sq ft offices • On site, due to complete August 2018 • Funding Partners - Ashby Capital LLP • Baupost/Helical to receive profit share based on Half Helical fixed yield, Year variable on rent Results 30
Slide 31: 25 Charterhouse Square, EC1
25 CHARTERHOUSE SQUARE, EC1 • 38,500 sq ft offices, 5,100 sq ft retail/restaurant • Under construction, due for completion – Mar 2017 • Profit share – Helical 15% priority return, thereafter 50/50 share with Charterhouse Helical Half Year Results 31
Slide 32: Drury Lane, WC2
DRURY LANE, WC2 • Conditional purchase contract (subject to planning and viability) • Resolution to grant planning, pending completion of S.106 • 68 apartments, 16,000 sq ft retail. GDV £157m • Alternative office scheme (70,000 sq ft) plus retail Helical Half now being pursued Year Results 32
Slide 33: Hammersmith Town Hall, W6
HAMMERSMITH TOWN HALL, W6 • Dev Agreement with H&F BC in a 50/50 JV with Grainger • S.73 planning amendment now consented • 196 residential units, cinema, restaurants and council office. GDV £205m • Phase 1 (152 units & office) out to tender with contractors Helical Half Year Results 33
Slide 34: The Loom, E1
THE LOOM, E1 • 110,000 sq ft offices • Refurbishment complete September 2016 • Average rent at purchase £18 psf • New lettings £50+ psf • 14,000 sq ft let since refurbishment completed, 6,000 sq ft under offer, 23,000 sq ft vacant Highly • Helical reversionary Half Year Results 34
Slide 35: The Shepherds Building, W14
THE SHEPHERDS BUILDING, W14 • 150,100 sq ft offices, fully let • Contracted rent £6.3m • Rent review agreed at £54 psf • Average rents now £44 psf+ • Continued strong occupational demand Helical Half Year Results 35
Slide 36: One King Street, W6
ONE KING STREET, W6 • Acquired February 2012 for £14.1m • 3 floors refurbished and 1 floor added • Office rents at acquisition £24.50 psf, £52.50 psf at sale • Capex of £4.6m • Sold for £34.5m (post half year) at March 2016 book value. £17.8m profit, 37% IRR Helical Half Year Results 36
Slide 37: Power Road Studios, W4
POWER ROAD STUDIOS, W4 • Acquired December 2015 for £34.2m. 4.4% NIY • 62,000 sq ft multi let office on 2 acre site • Average rents at acquisition £24.50psf • New lettings at £40 psf • Planning application soon to be submitted for 45,000 sq ft of extra space • 16,000 sq ft being refurbished Optional
Slide 38: The Regions: Logistics
Portbury, Bristol THE REGIONS: LOGISTICS • Strong occupational demand • Strong cash on cash returns • Little obsolescence • 10 properties sold (£46.6m) at an 8.3% Helical Half Year Results premium to March 2016 fair value 38
Slide 39: The Regions: Offices
THE REGIONS: OFFICES • Focus on Manchester. Good fundamentals • Provide high quality, economic space to a “London” standard • 23,000 sq ft let at Churchgate House since March with a further 12,000 sq ft under offer • Booth Street and Dale House refurbishments progressing Helical Half Year Results 39
Slide 40: The Regions: Retail
THE REGIONS: RETAIL • £49.2m of retail warehousing sold since March 2016 Continued •Helical retail sales in next 6 months likely Half Year Results Cardiff, The Hayes 40
Slide 41: Retirement Villages
RETIREMENT VILLAGES • Dramatic improvement in performance post substantial reorganisation. Overheads reduced by 86% • Sales rate tripled, prices increased • 56 units sold since March 2016: £23m • Care home land sold at Liphook £2.5m • Substantial profit to come over 4 years Helical Half Year Durrant
Slide 42: Retirement Villages
RETIREMENT VILLAGES Asset No. No. No. No. Status Anticipated Profit to Come Units Built Sold Reserved Completion Liphook 191 151 151 7 Phases 1-3 complete. Phase 4, 40 2018 £6.1m cottages underway Faygate 173 105 86 13 Phase 3 under construction 2019 £6.4m Exeter 164 81 44 18 Construction ongoing 20
Slide 43: Outlook
Outlook Gerald Kaye @helicalplc Helical Half Year Results 43
Slide 44: Q&A
Q&A Helical Half Year Results 44
Slide 45: Appendix
Appendix Helical Half Year Results 45
Slide 46: London Development Scheme Review
LONDON DEVELOPMENT SCHEME REVIEW Property Partner HB Share Status Completion Potential Helical Profit to Come Phase 1 – Investment Portfolio Completed The Bower, Completed Old Street 100% £20m London EC1 Phase 2 – Q2 2018 Under construction 25 Charterhouse Square 100% Under construction Q1 2017 £6m
Slide 47: Investment Portfolio – Key Statistics
INVESTMENT PORTFOLIO – KEY STATISTICS Valuation increase of 3.0% in half year to September, including capex, sales and purchase for assets held as investments EPRA % of Portfolio Valuation Topped Up Reversionary (HB Share) Change Net Initial Yield Yield London Offices 61.5% 5.3% 3.3% 5.7% Retail 8.4
Slide 48: Helical London Exposure – Changes Over Time
HELICAL LONDON EXPOSURE – CHANGES OVER TIME (FAIR VALUE) Change Total Portfolio Mar 12 Mar 13 Mar 14 Mar 15 Mar 16 Sept 16 since Mar 16 London 26.3% 27.9% 34.2% 41.6% 54.1% 59.3% 5.2% Regions 73.7% 72.1% 65.8% 58.4% 45.9% 40.7% -5.2% TOTAL £572.7m £626.4m £801.7m £1.02bn £1.24bn £1.25bn 80% 70% 60%
Slide 49: Helical's Portfolio – Changes to Fair Value
HELICAL'S PORTFOLIO – CHANGES TO FAIR VALUE Convertible Bond Issue Retail Bond Millions Issue Helical Half Year Results 49
Slide 50: Property Portfolio – Helical's Share
PROPERTY PORTFOLIO – HELICAL’S SHARE Fair Value % Value London Offices £673.3m 53.9% London Residential £67.8m 5.4% Regional Offices £102.2m 8.2% Logistics £205.5m 16.5% Retail £96.9m 7.7% Retirement Villages £97.8m 7.8% Land £6.0m 0.5% TOTAL £1.25bn 100% Helical Bar plc Helical Half Year Results 50
Slide 51: Investment Portfolio
INVESTMENT PORTFOLIO Capital Value Vacancy Rate WAULT Years psf £ (floor area) % London Offices − Completed 868 9.5 6.7 − Being redeveloped/refurbished 575 n/a - − Held for future development/refurbishment 621 7.4 0.1 TOTAL LONDON 763 9.3 6.8 Regional Offices 204 10.9 5.5 Regional Logistics 57 3.5 4
Slide 52: Investment Portfolio: Lease Expiries
INVESTMENT PORTFOLIO: LEASE EXPIRIES Lease Expiries and Tenant Break Options 2017 2018 2019 2020 2021 Percentage of Rent 8.5% 11.8% 14.4% 8.7% 6.9% Roll Number of Leases 72 109 73 41 21 Average Rent per £61,700 £56,500 £102,800 £110,300 £171,000 Lease Helical Bar plc Helical Half Year Results 52
Slide 53: Asset Management Overview March 2016 to September 2016
ASSET MANAGEMENT OVERVIEW MARCH 2016 TO SEPTEMBER 2016 Rent Rent lost at break/expiry -£1.0m New lettings and uplifts at lease renewal £1.7m Rent reviews £0.4m Net Increase £1.1m Helical Bar plc Helical Half Year Results 53
Slide 54: Top Tenants
TOP TENANTS Rent Rank Tenant Tenant Industry % Rent Roll (Helical) 1 Endemol UK Limited Media £4.0m 7.5% 2 MullenLowe Limited Media Marketing Communications £2.6m 4.9% 3 Gopivotal (UK) Limited Technology £2.0m 3.8% 4 Farfetch UK Limited Online Retail £1.9m 3.5% 5 Sainsbury's Supermarkets Limited Foo
Slide 55: City and Tech Belt Take-up
CITY AND TECH BELT TAKE-UP SOURCE: SAVILLS – 31 OCT 2016 Q1 Q2 Q3 Q4 LT Avg 9,000,000 • There has been a steady churn of transactions 8,000,000 following the referendum result, with 34 deals 7,000,000 happening in October City take-up (sq ft) 6,000,000 • However, the average size of the transactions
Slide 56: City and Tech Belt Supply/Availability
CITY AND TECH BELT SUPPLY/AVAILABILITY SOURCE: SAVILLS – 31 OCT 2016 Grade A Grade B V Rate 16 18% • The City and Tech Belt vacancy rate remains low, 14 16% but has risen to 5.6% at the end of October 2016 14% 12 • The supply/demand balance has risen to 15, and 12% Vacancy Rate 10 remains well below
Slide 57: City and Tech Belt Rental Trends
CITY AND TECH BELT RENTAL TRENDS SOURCE: SAVILLS – 31 OCT 2016 Average Grade A Rent Average Grade B Rent Headline rents on Prime and Grade A property £70.00 in the City and Tech Belt have continued to rise – the average grade A rent for October was £60.00 £64.16/sq ft Average Rent (£/sq ft) £50.00
Slide 58: Disclaimer
DISCLAIMER Whilst we have taken all reasonable care to ensure that the information and material contained in this presentation is accurate at the time of its distribution, no representation or warranty, express or implied, is made as to its accuracy or completeness. The presentation should not be co
Slide 59: Helical
Helical Half Year Results HELICAL 59
Slide 60: 5 Hanover Square London W1S 1HQ
5 Hanover Square London W1S 1HQ 0207 629 0113 www.helical.co.uk @helicalplc Helical Half Year Results 60