Land Securities Group PLC · LSE:LAND
Land Securities — Arbuthnot Property Conference 2009
22 slides from Land Securities's conference presentation, Sep 15, 2009
Slide 1: Arbuthnot Property Conference – Land Securities
Arbuthnot Property Conference 15 September 2009 Land Securities Francis Salway Chief Executive – Land Securities Group PLC
Slide 2: Land Securities – key facts
Land Securities – key facts £9.4bn portfolio Focus on London offices and retail Retail – 25 shopping centres and 21 retail parks London offices – 9.7 million sq ft Strong development capabilities Efficient debt structure not linked to specific assets , but benefiting Piccadilly Lights, W
Slide 3: Q1 Interim Management Statement
Q1 Interim Management Statement Trends in property values in line with our February Rights Issue expectations Investment property sales in the quarter £357.4m at 2.7% below March 2009 valuation Positioned to take advantage of opportunities that will arise as the market turns Portman House, Oxf
Slide 4: Recent newsflow
Recent newsflow Queen Anne’s Mansions St David’s 2, Cardiff £360m CMBS £290 club bank facility Thomas More Square, E1 Theobald’s Court, WC1 Largest letting of second hand space £506m of sales since 1 April – in London – 192,000 sq ft on plan and on price
Slide 5: Market data - I: UK commercial property investment
UK commercial property market invetsment, £billion 0 5 10 15 2000.Q1 20 2000.Q2 2000.Q3 2000.Q4 2001.Q1 2001.Q2 2001.Q3 Source: Property Data Limited. 2001.Q4 Market data - I 2002.Q1 2002.Q2 2002.Q3 2002.Q4 2003.Q1 2003.Q2 2003.Q3 Investment volume by quarter 2003.Q4 2004.Q1 2004.Q2 2004.Q3 2004.Q4
Slide 6: Market data - II: Retail sales growth
Market data - II Retail sales growth + 12 Like-for-like Total 9 6 percent 3 0 -3 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Source: BRC Retail sales more resilient than expected in downturn
Slide 7: Market data - III: London office vacancy rates
Market data - III London office vacancy rates + 25 20 15 percent 10 5 City West End 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Source: PMA London office vacancy rates currently below levels in 1991 and 2003
Slide 8: Market data - IV: Lower versus upper quartile yield
Market data - IV Lower quartile versus upper quartile yield + inter-quartile range in equivalent yield, % 3.0 Dec-01 Jun-07 Dec-08 Jun-09 2.5 2.0 1.5 1.0 0.5 0.0 Standard Shopping Retail Central & Inner Rest of SE & Rest of UK Industrials Retail Centres Warehouses London Eastern Offices Offices Offi
Slide 9: Market data - V: UK bank lending to commercial property
Market data - V UK bank lending to commercial property - 250 14 Bank lending to property, £billion, (lhs) Property share of total lending, % (rhs) 12 property share of total lending, % bank lending to property, £billion 200 10 150 8 6 100 4 50 2 0 0 Q1 1987 Q1 1988 Q1 1989 Q1 1990 Q1 1991 Q1 1992 Q1
Slide 10: Positioning a business for the recovery phase
Positioning a business for the recovery phase 1 ge Sta Stage 1 Capital values Attractive level of gearing increase Stage 2 Occupier demand Attractive development 2 improves / rental opportunities – especially ge values increase in London West End Sta office market Land Securities – c.50% LTV gearing
Slide 11: Plan for value creation - I
Plan for value creation - I 50% equity 50% debt Phase I of recovery – favourable gearing in phase of yield compression
Slide 12: Plan for value creation - II
Plan for value creation - II J Sainsbury, Wandsworth John Lewis Partnership, Poole Phase I of recovery – occupier led developments
Slide 13: Plan for value creation - III
Plan for value creation - III Adding value through development London office development 1800 completions 1600 1400 Square feet (‘000s) 1200 1000 Park House, W1 800 600 38% pre-let 400 200 0 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14+ - year to 31 March - Selborne House, SW1 Phase 2 of recovery – d
Slide 14: Plan for value creation - IV
Plan for value creation - IV Greater London House, NW1 The Galleria, Hatfield Investment acquisitions – to target low-rented properties
Slide 15: Plans for value creation – V
Plans for value creation – V Adding value through asset management and tenant mix Turnover rent per square foot £60 £50 £40 £30 £20 £10 £- 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 Outgoing Incoming Gunwharf Quays, Portsmouth Creating outperformance from £9.4 billion existing portfolio
Slide 16: Plans for value creation – VI
Plans for value creation – VI Adding value through asset management and scheme extensions Acquired 2005 Spring 2006 shopper survey score: 31 points Spring 2009 shopper survey score: 82 points 2009 footfall: up 5% to 20% year-on-year March 2009 valuation – initial yield 8.0% March 2009 va
Slide 17: Blank sheet of paper
Blank sheet of paper
Slide 18: Creating a property business from a blank sheet of paper
Creating a property business from a blank sheet of paper High quality portfolio Portfolio priced in line with market transactions Gearing at c.50% LTV
Slide 19: Creating a property business from a blank sheet of paper
Creating a property business from a blank sheet of paper High quality portfolio Portfolio priced in line with market transactions
Slide 20: Creating a property business from a blank sheet of paper
Creating a property business from a blank sheet of paper High quality portfolio Portfolio priced in line with market transactions Gearing at c.50% LTV
Slide 21: Creating a property business from a blank sheet of paper
Creating a property business from a blank sheet of paper High quality portfolio Portfolio priced in line with market transactions Development opportunities for recovery in occupational Gearing at c.50% LTV markets Land Securities – well positioned for market recovery
Slide 22: Arbuthnot Property Conference – Land Securities
Arbuthnot Property Conference 15 September 2009 Land Securities Francis Salway Chief Executive – Land Securities Group PLC
Land Securities Group — Arbuthnot Property Conference 2009 on 6ix