British Land Company Plc · LSE:BLND
British Land — H1 FY2023 Earnings Presentation
87 slides from British Land's earnings presentation, November 2022
Slide 1: Half Year Results 30 September 2022
30 SEPTEMBER 2022 HALF YEAR R E S U LT S
Slide 2: Introduction
Introduction Simon Carter Broadgate HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.2
Slide 3: Business performing well in a tougher macro environment
BUSINESS PERFORMING WELL IN A TOUGHER MACRO ENVIRONMENT GOOD OPERATIONAL PERFORMANCE – EPS and DPS +12% – Leasing activity 1.5m sq ft – Occupancy 97% HIGHER INTEREST RATES LEADING TO YIELD EXPANSION – 17bps yield expansion – Cushioned by ERV growth – Values down 3.0% STRONG FINANCIAL POSITION – £1bn
Slide 4: Financial Results
FINANCIAL RESULTS Bhavesh Mistry Norton Folgate HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.4
Slide 5: Strong earnings growth and resilient balance sheet
STRONG EARNINGS GROWTH AND RESILIENT BALANCE SHEET £136M 695P £9.6BN Underlying profit EPRA NTA per share Portfolio valuation +13.3% vs Sep 21 -4.4% vs Mar 22 -3.0% vs Mar 22 30.7% £2.0BN 11.6P Loan to value Undrawn facilities and cash Dividend per share -220 bps vs Mar 22 No requirement to refinanc
Slide 6: 8% net rental income growth
8% NET RENTAL INCOME GROWTH £m 7 10 1 (1) 227 210 8% HY 2022 Net divestment Developments Provisions for debtors and Like for like growth1 HY 2023 tenant incentives HALF YEAR RESULTS | 30 SEPTEMBER 2022 1Like for like growth includes the impact of historic CVAs and administrations and surrender premi
Slide 7: Overall like-for-like net rent up 5%
OVERALL LIKE-FOR-LIKE NET RENT UP 5% Campuses Retail Parks Shopping Centres Strong leasing, Good LFL growth LFL decline expected to Storey occupancy up 10ppt to 96% driven by high occupancy moderate as rents stabilise +9.2% +0.9% +2.2% +1.4% +1.8% -4.0% HY22 vs HY21 HY23 vs HY22 Occupancy: 95.1% 96.
Slide 8: Strong rental growth driving 13% increase in underlying profit
STRONG RENTAL GROWTH DRIVING 13% INCREASE IN UNDERLYING PROFIT 6 months to September (£m) H1 2023 H1 2022 Change % Gross rental income 251 241 4.1% Property operating expense (24) (31) (22.6)% Net rental income 227 210 8.1% Interest costs fully hedged to Sep 23 Fees & other income 9 5 80.0% and 77%
Slide 9: EPRA NTA decline reflects property yield expansion
EPRA NTA DECLINE REFLECTS PROPERTY YIELD EXPANSION (35p) 15p (12p) 727p 695p Mar 22 Valuation performance Underlying Dividend Sep 22 Profit HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.9
Slide 10: Active asset management cushioning impact of yield expansion
ACTIVE ASSET MANAGEMENT CUSHIONING IMPACT OF YIELD EXPANSION Total Property Return -4.2% +1.2% +2.0% Active asset management Yield expansion Income return & ERV growth Resulting in: -2.8% Total Accounting Return TARGETING TAR OF 8-10% THROUGH THE CYCLE H A L F Y E A R R E S U L T S | 3 0 S E P T E M
Slide 11: Our capital allocation framework in the current environment
OUR CAPITAL ALLOCATION FRAMEWORK IN THE CURRENT ENVIRONMENT Current context We own a unique and extensive development pipeline, Thoughtful approach to new commitments, DEVELOPMENTS a key driver of future value and earnings accretion based on rent visibility and yield on cost Taking a disciplined, re
Slide 12: Disciplined approach to development
DISCIPLINED APPROACH TO DEVELOPMENT HIGH QUALITY DE-RISKED COMMITTED PROGRAMME – To deliver £62m of rents, 34% pre-let or under offer1 – £569m of costs to come, 92% fixed – Blended IRR of 10% CONSTRUCTION COST INFLATION IN LINE WITH PREVIOUS GUIDANCE 1 Broadgate – 8-10% for 2022, moderating to 4-5%
Slide 13: Strong balance sheet & metrics
STRONG BALANCE SHEET & METRICS 30 September 2022 31 March 2022 Net debt1 £3.0bn £3.5bn Loan to value2 30.7% 32.9% Undrawn Facilities and Cash £2.0bn £1.3bn No requirement to refinance until: Late 2025 Late 2025 Weighted Average Interest Rate2 3.5% 2.9% Interest rate hedged on debt (next 12 months)2,
Slide 14: Good long term relationships with debt providers
GOOD LONG TERM RELATIONSHIPS WITH DEBT PROVIDERS £515M PADDINGTON JV TERM LOAN (JUL 22) – Club of three banks, 5 year term, secured on JV properties RENEWED £100M BILATERAL REVOLVING CREDIT FACILITY (OCT 22) – Unsecured, ESG Linked, 5 year initial term NEW £150M BILATERAL REVOLVING CREDIT FACILITY (
Slide 15: Good operational performance and resilient balance sheet
GOOD OPERATIONAL PERFORMANCE AND RESILIENT BALANCE SHEET OUR ACTIONS ARE DRIVING STRONG EARNINGS GROWTH STRONG BALANCE SHEET WITH £2BN OF LIQUIDITY WELL PLACED TO CAPTURE ATTRACTIVE OPPORTUNITIES Canada Water The Printworks HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.15
Slide 16: Real Estate Review
REAL ESTATE REVIEW Darren Richards Exchange Square - Broadgate HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.16
Slide 17: Yield expansion partially offset by rental growth
YIELD EXPANSION PARTIALLY OFFSET BY RENTAL GROWTH VALUATION YIELD ERV VALUATION £M MOVEMENT MOVEMENT MOVEMENT TOTAL 9,643 -3.0% +17bps 1.2% Campuses 6,229 -2.7% +18bps 1.6% Central London 5,666 -3.0% +18bps 1.7% Canada Water 312 -0.2% - - Retail & Fulfilment 3,414 -3.6% +17bps 0.6% Retail Parks 2,04
Slide 18: Campuses: continued demand for best in class space
CAMPUSES: CONTINUED DEMAND FOR BEST IN CLASS SPACE 494,000 SQ FT LEASING ACTIVITY IN HY23 – £33.2m of rents (£25.2m BL share) – 18.4% ahead of ERV1 – 310,000 sq ft under offer, 3.8% ahead of ERV1 STOREY OCCUPANCY AT ALL TIME HIGH – 114,000 sq ft of leasing in the period – Occupancy at 96%, from 86%
Slide 19: Significant leasing activity on our campuses
SIGNIFICANT LEASING ACTIVITY ON OUR CAMPUSES OCCUPIERS RECOMMITTING TO THE CAMPUS – Regent’s Place: 146,000 sq ft to Meta at 10 Brock Street Modern, Public realm & high quality amenities – Broadgate: 117,000 sq ft to Credit Agricole at Broadwalk House 47,000 SQ FT OF NEW CONCEPT F&B AND LEISURE – Lo
Slide 20: Demand focused on best in class space
DEMAND FOCUSED ON BEST IN CLASS SPACE Leasing velocity of newly completed development (Average months from practical completion to achieve 75% let) VACANCY DOMINATED BY SECOND HAND SPACE 35 – Second hand space vacancy doubled to c.17m sq ft from 2019 25 – Average days on market now >800 days Months
Slide 21: Net zero initiatives well underway
NET ZERO INITIATIVES WELL UNDERWAY Campus EPC rating CAMPUSES FULLY COMPLIANT WITH 2023 MEES LEGISLATION % of total ERV 50% – 52% now rated A-B, 6ppt increase from March 22 52% of our campus portfolio is A-B rated IMPLEMENTING OUR NET ZERO PROGRAMME 40% – Exchange House now B rated (from E) at a cos
Slide 22: Retail & Fulfilment continued strong demand
RETAIL & FULFILMENT CONTINUED STRONG DEMAND HY23 Retail & Fulfilment leasing volumes (sq ft) 1M SQ FT OF LEASING ACTIVITY 250,000 – 10.3% ahead of ERV1 200,000 – Momentum from record leasing in FY22 sustained A FURTHER 772,000 SQ FT UNDER OFFER 150,000 – 18.0% ahead of ERV1 100,000 FURTHER IMPROVEME
Slide 23: Affordability is key for retailers
AFFORDABILITY IS KEY FOR RETAILERS RETAIL PARKS ARE A LOW COST FORMAT INCREASINGLY RESILIENT OCCUPIER BASE – Our Retail Parks have a 10% OCR1 OMNI CHANNEL OPERATORS – OCRs expected to trend towards 7% as rents rebase and with rates revaluation RENTS REBASED - NOW AT SUSTAINABLE LEVELS – Leasing cons
Slide 24: Shopping centre ERVs stabilising
SHOPPING CENTRE ERVS STABILISING Shopping centres ERV and NEY vs March 2018 RENTS APPROACHING A SUSTAINABLE LEVEL 8 100 7 – ERV decline plateauing: down 1.0% in HY23 95 – Yields flat in HY23 and previous 12 months 6 90 – Total property return of 2.1% in the period ERV indexed to March 2018 5 85 4 NE
Slide 25: Sound fundamentals underpinning urban logistics in London
SOUND FUNDAMENTALS UNDERPINNING URBAN LOGISTICS IN LONDON DEMAND STRONG AND INCREASING – Driven by continued growth of e-commerce – YTD 2022 take up already ahead of 2019 and 2020 – Live demand for space over 100,000 sq ft 3x available stock CHRONIC UNDERSUPPLY OF URBAN LOGISTICS SPACE – London vaca
Slide 26: Supporting current social issues in our communities
SUPPORTING CURRENT SOCIAL ISSUES IN OUR COMMUNITIES COST OF LIVING CRISIS – Over £200,000 committed to a dedicated Cost of Living Fund • Contributions to Shelter’s Hardship Fund and The Trussell Trust appeal for foodbanks • Funding strategic advice to support community partners through the crisis •
Slide 27: Key sectors performing well
KEY SECTORS PERFORMING WELL CAMPUS PROPOSITION DELIVERING RETAIL PARKS OPERATIONALLY RESILIENT SOLID FUNDAMENTALS UNDERPIN URBAN LOGISTICS 1 Broadgate development HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.27
Slide 28: Strategy & Outlook
Strategy & Outlook Simon Carter Peterhouse Western Expansion HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.28
Slide 29: Recap: our business is focused on markets with pricing power
RECAP: OUR BUSINESS IS FOCUSED ON MARKETS WITH PRICING POWER DEMAND S U P P LY Focused on modern, high quality and New space 1.5% of total market Leasing 18.4% sustainable space Campuses c.3% of available space BREEAM above ERV Rents c.10% of salary costs Outstanding ERV +1.6% vs nearly 50% in early
Slide 30: Recap: how we are creating value
RECAP: HOW WE ARE CREATING VALUE SOURCE VALUE ADD DEVELOP AND ACTIVELY OPPORTUNITIES MANAGE TARGET TOTAL ACCOUNTING RETURNS OF 8-10% THROUGH PETERHO US E HERITA GE HO USE THE CYCLE EUSTON CA N A DA CA MBRIDG E EN FIEL D TOWER WA TER RECYCLE CAPITAL HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.30
Slide 31: Timely capital allocation decisions
Recycle Capital TIMELY CAPITAL ALLOCATION DECISIONS £1BN OF DISPOSALS, LAST 12 MONTHS – Sale of 75% of majority of assets at Paddington Central for £694m • Crystallising 9% TPR since acquisition • Attractive development and asset management fees – Sale of 50% in the Canada Water Masterplan for £290m
Slide 32: De-risked developments delivering into a supply constrained market
Actively manage & develop DE-RISKED DEVELOPMENTS DELIVERING INTO A SUPPLY CONSTRAINED MARKET 1.7M SQ FT COMMITTED Central London Office Development pipeline over 100k sq ft, Q3 22 Norton 1 Broadgate Folgate Sq ft m – 92% committed costs fixed 6.0 – 40% office space pre let or Canada under offer Wate
Slide 33: Campus development pipeline: key driver of future returns
Actively manage & develop CAMPUS DEVELOPMENT PIPELINE: KEY DRIVER OF FUTURE RETURNS WITH GOOD OPTIONALITY 7.3M SQ FT PIPELINE – Low carrying value of £180 psf – Progressing planning, design Peterhouse Western Expansion 2 Finsbury Avenue Euston Tower 1 Appold and demolition works 90,000 sq ft 727,000
Slide 34: Strong progress on life sciences and innovation
Source value add opportunities STRONG PROGRESS ON LIFE SCIENCES AND INNOVATION ATTRACTIVE OCCUPATIONAL FUNDAMENTALS – In Cambridge, no lab space available vs 1.2m sq ft active requirements1 IN A COMPETITIVE MARKET, OUR STRATEGY FOCUSES ON – Off market situations – Opportunities on our existing portf
Slide 35: Retail parks preferred format for retailers
Actively manage & develop RETAIL PARKS PREFERRED FORMAT FOR RETAILERS IMPROVED STRUCTURAL OUTLOOK Online sales as a % of total retail sales 40 – Online returning to pre-covid trend 35 – Online delivery and postal return charges increasing 30 – Click and collect fastest growing channel for online ful
Slide 36: Assembling a London urban logistics portfolio
Source value add opportunities ASSEMBLING A LONDON URBAN LOGISTICS PORTFOLIO CLEAR STRATEGY – Delivering new space via repurposing and intensification STRONG PROGRESS IN OUR CORE MARKETS • Zone 1 & edge of Zone 1 locations, providing occupiers new locations • Greater London > 200,000 sq ft best in c
Slide 37: Outlook for our markets – next 12 months
OUTLOOK FOR OUR MARKETS – NEXT 12 MONTHS YIELDS – Further expansion likely, depending on the path of medium term rates – Rental growth to cushion impact CAMPUSES – Campuses continue to outperform as demand gravitates to the best space – Expect rental growth c. 2-4% on our assets RETAIL PARKS – Expec
Slide 38: Summary
SUMMARY GOOD OPERATIONAL PERFORMANCE STRONG PROGRESS ON STRATEGY NAVIGATING THE MACRO ENVIRONMENT WELL WELL POSITIONED FOR THE FUTURE Phase 2, Canada Water HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.38 Canada Water
Slide 39: Appendices
APPENDICES
Slide 40: Broadgate Campus
BROADGATE CAMPUS HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.40
Slide 41: Paddington Central Campus
PADDINGTON CENTRAL CAMPUS 9 9 HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.41
Slide 42: Regent's Place Campus
REGENT ’S PLACE CAMPUS HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.42
Slide 43: Major Retail & Fulfilment property holdings
MAJOR RETAIL & FULFILMENT PROPERTY HOLDINGS As at 30 September 2022 BL Share Sq ft Rent (100%) Occupancy Lease Length yrs3,4 % 000’s5 £m pa1,4 Rate %2,4 1 Meadowhall, Sheffield 50 1,500 71 95.0 4.1 2 Glasgow Fort, Glasgow 100 510 17 97.8 5.2 3 Teesside, Stockton 100 569 15 91.4 2.3 4 Ealing Broadway
Slide 44: Top 20 occupiers
TOP 20 OCCUPIERS R E TA I L & F U L F I L M E N T CAMPUSES OCCUPIER SPLIT BY INDUSTRY (% OF RENT) As at As at % of R&F rent % of Campus rent 30 September 2022 30 September 2022 Grocery & Meta (Facebook) 19.9 Convenience Other 5% Next 5.2 Walgreens (Boots) 4.6 Dentsu International 5.4 4% TMT 19% M&S
Slide 45: Our 2030 sustainability strategy
OUR 2030 SUSTAINABILITY STRATEGY Net Zero Carbon by 2030 Place based approach – 50% less embodied carbon emissions at our – Placed-based approach to social contribution developments, to below 500kg CO2e per sqm by 2030 – Using our Local Charter to focus on key issues (versus industry benchmark) – Pa
Slide 46: Sustainability metrics
SUSTAINABILITY METRICS DEVELOPMENTS – NET ZERO CARBON OPERATIONAL – EPC RATINGS Net Zero Carbon – Completed and Committed developments % of total ERV % of total Sq Ft Net Zero Developments Embodied emissions offset Embodied % of total embodied emissions carbon intensity EPC kg CO2e per sqm Rating Of
Slide 47: Sustainability indices performance
SUSTAINABILITY INDICES PERFORMANCE HY 2023 performance Other benchmarks and awards Global Real Estate Carbon Disclosure Project EPRA Sustainability Sustainability Benchmark1 Reporting Awards 2021: A- 2022: 5-star (Developments) 2022: Gold for 11th year 2020: A- 4-star (Standing Investment) Social Mo
Slide 48: Capital activity
CAPITAL ACTIVITY Since 1 April 2022 Campuses Retail & Fulfilment Total £m £m £m Purchases 25 22 47 Sales (694) - (694) Development Spend 113 3 116 Capital Spend 25 12 37 Net Investment (531) 37 (494) Gross Capital Activity 857 37 894 On a proportionally consolidated basis including the Group’s share
Slide 49: Capital activity since April 2018
£6.5bn Gross investment activity CAPITAL ACTIVITY since April 2018 Net Spend1 £m £(753)m £121m £(964)m £507m £(494)m 600 200 (200) (600) (1,000) (1,400) FY22 HY23 FY19 FY20 FY21 Sales Capital Investment Purchases Net Spend On a proportionally consolidated basis including the Group’s share of joint v
Slide 50: Sales and purchases
SALES AND PURCHASES Sales since 1 April 2022 Sector Price Price Annualised (100%) (BL Share) Net Rent £m £m £m1 Completed Paddington Central (75% sale) Campuses 934 694 27 Total 934 694 27 Purchases since 1 April 2022 Sector Price Price Annualised (100%) (BL Share) Net Rents £m £m £m1 Completed Mand
Slide 51: HY23 and September quarter 2022 rent collection
HY23 AND SEPTEMBER QUARTER 2022 RENT COLLECTION Rent due between 25 March 2022 and 28 September 2022 Rent due between 29 September 2022 and 9 November 2022 As at 9th November Offices Retail Total As at 9th November Offices Retail Total Received 99% 96% 98% Received 98% 94% 96% Outstanding 1% 4% 98%
Slide 52: H2 FY23 income statement guidance
H2 FY23 INCOME STATEMENT GUIDANCE NET RENTAL INCOME FINANCING – Annualised accounting gross rent of £452m1 as at 30 September 2022, – As at 30 September 2022: Weighted average interest rate was 3.5% including the impact of the 75% sale of Paddington Central on gross debt of £3.2bn. Undrawn facilitie
Slide 53: Illustrative future income profile breakdown
ILLUSTRATIVE FUTURE INCOME PROFILE BREAKDOWN (CASH BASIS) For the year to 31 March 2023 2024 2025 2026 2027 Total Accounting Basis As at 30 September 2022 £m £m £m £m £m £m Current Passing Rent 435 445 Contracted uplifts4 18 21 25 - - 64 Pre-lets of Committed Developments1 - - - 14 - 14 11 Contracte
Slide 54: Gross rental income
GROSS RENTAL INCOME 1 Accounting Basis £m 6 months to 30 September 2022 Annualised as at 30 September 2022 Group Joint Ventures Total Group Joint ventures Total West End 56 6 62 81 15 96 City 7 46 53 8 81 89 Other Campuses 6 2 8 6 - 6 Residential2 - - - 1 - 1 Campuses 69 54 123 96 96 192 Retail Park
Slide 55: Underlying profit bridge
UNDERLYING PROFIT BRIDGE £m 7 (1) 11 1 (2) 136 129 120 HY 2022 Net divestment Developments Excl. impact of capital Provisions for tenant Like for like incl. CVAs Net financing costs HY 2023 activity debtors and tenant and admins and fee income incentives HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.55
Slide 56: Underlying earnings per share
UNDERLYING EARNINGS PER SHARE 0.7p (0.1p) (0.1p) 0.1p 1.2p (0.2p) 14.5 14.5 13.9 12.9 HY 2022 Net divestment Development Excl. impact of Provisions for Like for like income Net financing costs Tax HY 2023 capital activity tenant debtors and incl. CVAs & admins and fee income tenant incentives HALF Y
Slide 57: Operating cash flow bridge
OPERATING CASH FLOW BRIDGE £m 26 (74) 34 (37) 163 (112) 112 (108) Cash rental income Distributions from Fees and other Operating and admin Net finance costs Net cash inflow from HY23 JVs and Funds income expenses operating activities Dividend HY23 Dividend equates to dividend declared and payable in
Slide 58: Administrative expenses
ADMINISTRATIVE EXPENSES 6 months to 30 September 2021 2022 £m £m Personnel costs 26 29 Share scheme costs 3 3 Other administrative expenses 18 16 Total 47 48 Capitalised costs (3) (4) Total administrative expenses 44 44 On a proportionally consolidated basis including the Group's share of joint vent
Slide 59: Operating costs metric
OPERATING COSTS METRIC 6 months to 30 September 2021 2022 £m £m Property operating expenses 31 24 Administrative expenses 44 44 Net fees and other income (5) (9) Ground rent costs and operating expenses de facto included in rents (10) (12) EPRA Costs (including direct vacancy costs) 60 47 Gross rent
Slide 60: Reconciliation of underlying profit
RECONCILIATION OF UNDERLYING PROFIT 6 months to 30 September 2021 2022 £m £m IFRS profit / (loss) after tax attributable to shareholders 370 (34) Net valuation (gain) / loss (279) 315 (Profit) / loss on disposal of investment and trading properties and revaluation of investments (3) 20 Capital finan
Slide 61: Number of shares
NUMBER OF SHARES As at 31 March 2022 30 September 2022 (m) (m) IFRS Basic Weighted average1 927 927 IFRS Diluted Weighted average2 930 927 Underlying/EPRA diluted Weighted average3 930 930 Period end4 932 933 1 For use in IFRS basic earnings per share. 2 For use in IFRS diluted earnings per share. A
Slide 62: EPRA balance sheet
EPRA BALANCE SHEET 31 March 2022 Group Joint ventures 30 September 2022 Total properties (£m)1 10,476 5,951 3,701 9,652 Adjusted net debt (£m) (3,458) (1,896) (1,081) (2,977) Other net liabilities (£m) (247) (122) (72) (194) EPRA Net Tangible Assets (£m) 6,771 3,933 2,548 6,481 Loan to value (LTV)2
Slide 63: EPRA net asset metrics
EPRA NET ASSET METRICS 31 March 2022 30 September 2022 EPRA NTA1 EPRA NDV2 EPRA NRV3 EPRA NTA1 EPRA NDV2 EPRA NRV3 IFRS Net Assets 6,733 6,733 6,733 6,598 6,598 6,598 Mark to market on derivatives and related debt 46 - 46 (134) - (134) adjustments Adjust to fully diluted on exercise of share options
Slide 64: Gross and net debt reconciliation
GROSS AND NET DEBT RECONCILIATION As at 30 September 2022 Group Joint ventures Less non-controlling interests Total £m £m £m £m Gross Debt (principal) (2,012) (1,205) - (3,217) IFRS adjustments: Issue costs and premia 9 5 - 14 Fair value hedge adjustments (35) - - (35) IFRS gross debt (2,038) (1,200
Slide 65: Loan to value (LTV)
LOAN TO VALUE (LTV) £m As at Valuation Acquisitions Capital spend Disposals Operating Dividend Other As at 31 March 2022 movement cashflow 30 Sep 2022 Total properties 10,467 (315) 24 162 (702) - - 7 9,643 Other investments 46 - 14 - - - - 4 64 LTV assets 10,513 (315) 38 162 (702) - - 11 9,707 Adjus
Slide 66: Debt metrics
DEBT METRICS Proportionally Consolidated 31 March 2022 30 September 2022 Loan to value (LTV) 32.9% 30.7% Weighted average interest rate 2.9% 3.5% Interest cover 3.5x 3.4x Weighted average maturity of drawn debt 6.9 yrs 6.3 yrs Group 31 March 2022 30 September 2022 Loan to value (LTV) 26.2% 22.0% Ava
Slide 67: Debt maturity
DEBT MATURITY £m 1200 Facilities Undrawn (Unsecured) 1000 Facilities Drawn (Unsecured) Sterling Bond (Unsecured) US Private Placements (Unsecured) 800 Debentures (Secured) Bank Loans (Secured) 600 JVs Bank Loans (Secured) JVs Securitisation (Secured) 400 200 0 2023 2024 2025 2026 2027 2028 2029 2030
Slide 68: Debt financing – diverse profile
DEBT FINANCING – DIVERSE PROFILE £5.1BN GROSS DEBT AND FACILITIES (£3.2BN DRAWN)¹ STRONG CREDIT METRICS 30 SEPTEMBER 2022 – £2.0bn undrawn facilities and cash – No requirement to refinance until late 2025 £0.4bn – Interest rate on forecast debt fully hedged for next 12 months, and 77% on average ove
Slide 69: Portfolio valuation by sector
PORTFOLIO VALUATION BY SECTOR At 30 September 2022 Group Joint ventures Total Change1 £m £m £m % £m West End 2,495 348 2,843 (2.5) (92) City 482 2,341 2,823 (3.6) (104) Canada Water & other Campuses 148 312 460 (1.6) (7) Residential2 103 - 103 13.2 12 Campuses 3,228 3,001 6,229 (2.7) (191) Retail Pa
Slide 70: Valuation movement - Campuses
VALUATION MOVEMENT - CAMPUSES 6 months to 30 September 2022 Valuation Change Change Yield movement ERV movement £m £m %1 Bps2 %2 West End 2,843 (92) (2.5) 19 2.8 City 2,823 (104) (3.6) 17 0.5 Central London offices 5,666 (196) (3.0) 18 1.7 Canada Water & other Campuses 460 (7) (1.6) 5 0.0 Residentia
Slide 71: Valuation movement – Retail & Fulfilment
VALUATION MOVEMENT – RETAIL & FULFILMENT 6 months to 30 September 2022 Valuation Change Change Yield movement ERV movement £m £m %1 Bps2 %2 Retail Parks 2,046 (78) (3.7) 20 0.8 Shopping Centre 788 (17) (2.1) (1) (1.0) Urban Logistics 323 (21) (6.0) 60 16.7 Other Retail 257 (11) (4.2) 5 (1.4) Retail
Slide 72: Retail & Fulfilment valuation movements
RETAIL & FULFILMENT VALUATION MOVEMENTS Sep ‘22 Valuation (£’m) 2,500 2,000 1,500 1,000 500 0 Greater than 0% 0% to -5% -5% to -10% Less than -10% Retail Parks Shopping Centres Urban Logistics Other Retail % Valuation Movement in H1 FY23 HALF YEAR RESULTS | 30 SEPTEMBER 2022 PG.72
Slide 73: Portfolio net yields
PORTFOLIO NET YIELDS 1,2 As at 30 September 2022 EPRA EPRA topped up Overall topped up Net Net equivalent yield Net reversionary ERV net initial net initial net initial equivalent yield movement bps yield Growth 5 yield yield yield % % % 3 4 % % % West End 3.1 4.1 4.1 4.4 19 4.8 2.8 City 3.4 4.2 4.2
Slide 74: Portfolio weighting
PORTFOLIO WEIGHTING As at 30 September 2021 2022 2022 % % £m West End 35.9 29.4 2,843 City 27.5 29.3 2,823 Canada Water & other Campuses 6.1 4.8 460 Residential1 0.6 1.1 103 Campuses 70.1 64.6 6,229 Retail Parks 17.6 21.2 2,046 Shopping Centre 8.3 8.2 788 Urban Logistics 1.2 3.3 323 Other Retail 2.8
Slide 75: Lease length and occupancy
LEASE LENGTH AND OCCUPANCY As at 30 September 2022 Average Lease Length (yrs) Occupancy Rate (%) To Expiry To Break EPRA Occupancy Occupancy1,2,3 West End 9.0 8.5 94.4 95.9 City 7.5 6.5 91.8 97.7 Other Campuses 7.2 6.3 100.0 100.0 Residential4 16.0 15.8 100.0 100.0 Campuses 8.3 7.5 93.4 96.9 Retail
Slide 76: Annualised rent & estimated rental value (ERV)
ANNUALISED RENT & ESTIMATED RENTAL VALUE (ERV) As at 30 September 2022 Annualised Rents Average Rent ERV (Valuation Basis) £m1 £m (£psf) Group Joint ventures Total Total Contracted2 ERV West End3 70 14 84 128 66.2 73.5 City3 8 77 85 119 56.4 60.6 Other Campuses 6 - 6 7 27.2 34.5 Residential4 1 - 1 1
Slide 77: Rent subject to open market rent review
RENT SUBJECT TO OPEN MARKET RENT REVIEW For the year to 31 March 2023 2024 2025 2026 2027 2023-25 2023-27 As at 30 September 2022 £m £m £m £m £m £m £m West End 3 5 14 9 23 22 54 City - 16 8 27 4 24 55 Other Campuses - - 1 - - 1 1 Residential1 - - - - 1 - 1 Campuses 3 21 23 36 28 47 111 Retail Parks
Slide 78: Rent subject to lease break or expiry
RENT SUBJECT TO LEASE BREAK OR EXPIRY For the year to 31 March 2023 2024 2025 2026 2027 2023-25 2023-27 As at 30 September 2022 £m £m £m £m £m £m £m West End 7 3 7 14 4 17 35 City 3 16 5 15 2 24 41 Other Campuses 1 2 - - 1 3 4 Residential1 - - - - - - - Campuses 11 21 12 29 7 44 80 Retail Parks 15 2
Slide 79: Contracted rental increases (cash flow basis)
CONTRACTED RENTAL INCREASES (CASH FLOW BASIS) For the year to 31 March 2023 2024 2025 2026 2027 2023-25 2023-27 As at 30 September 2022 £m £m £m £m £m £m £m Expiry of rent free periods 14 19 25 - - 58 58 Fixed uplifts (EPRA basis) - 1 - - - 1 1 Fixed & minimum uplifts - 1 1 - - 2 2 Total 14 21 26 -
Slide 80: Total property return (as calculated by MSCI)
TOTAL PROPERTY RETURN (AS CALCULATED BY MSCI) 6 months to 30 September 2022 Offices Retail Total % British Land2 MSCI British Land2 MSCI British Land MSCI Capital Return (2.6) (3.0) (3.5) (2.1) (2.9) (3.1) - ERV Growth 1.6 0.8 0.6 0.1 1.2 1.8 - Yield Movement1 18 bps 26 bps 17 bps 4 bps 17 bps 23 bp
Slide 81: De-risked development pipeline focused on campuses
DE-RISKED DEVELOPMENT PIPELINE FOCUSED ON CAMPUSES Norton Folgate Canada Water, Phase 1 Peterhouse 2 Finsbury Avenue Euston Tower 1 Appold 335,000 sq ft Plots A1, A2 and K1 585,000 sq ft 90,000 sq ft 727,000 sq ft 578,000 sq ft 363,000 sq ft Completion Q4 2023 Completion Q3 and Q4 2024 The Priestley
Slide 82: Committed developments
COMMITTED DEVELOPMENTS Sector BL Sq ft PC Current Cost to ERV Let & As at Share (100%) Calendar Value Come Under 30 September 2022 Year Offer % ‘000 £m £m1 £m2 £m5 Norton Folgate Office 100 335 Q4 2023 284 118 23.6 7.8 1 Broadgate5 Office 50 544 Q2 2025 156 198 20.2 13.7 Aldgate Place, Phase 2 Resid
Slide 83: Near term development pipeline
NEAR TERM DEVELOPMENT PIPELINE Sector BL Sq ft Earliest Current Cost to ERV Planning As at Share (100%) Start on Value Come Status 30 September 2022 Site % ‘000 Calendar year £m £m1 £m2 Near Term Pipeline 2 Finsbury Avenue Office 50 727 Q3 2023 75 409 32.0 Consented 5 Kingdom Street Office 100 338 Q
Slide 84: Medium term development pipeline
MEDIUM TERM DEVELOPMENT PIPELINE As at 30 September 2022 Sector BL Sg ft Planning status Share (100%) % ‘000 Medium Term Pipeline Thurrock Urban Logistics 100 637 Pre-submission Enfield, Heritage House Urban Logistics 100 408 Pre-submission Hannah Close, Wembley Urban Logistics 100 668 Pre-submissio
Slide 85: Estimated future development spend and capitalised interest
ESTIMATED FUTURE DEVELOPMENT SPEND AND CAPITALISED INTEREST As at 30 September 2022 Cost to Come £m PC Calendar (excluding notional interest) – 6 months breakdown Year Mar-23 Sep-23 Mar-24 Sep-24 Mar-25 Sep-25 Mar-26 Sep-26 Total Norton Folgate Q4 2023 60 37 20 1 - - - - 118 1 Broadgate Q2 2025 36 4
Slide 86: Canada Water – illustrative scheme
CANADA WATER – ILLUSTRATIVE SCHEME Masterplan Headlines • 10 year scheme • 53 acres • c.3,000 homes (25% social rent, 10% intermediate homes) • 2.5m sq ft workspace • 1m sq ft retail, leisure, education, culture • 12 acres of parks, squares and open spaces Q3 2021 Q4 2024 Q2 2026 Q4 2026 Q2 2027 Q3
Slide 87: Disclaimer
DISCLAIMER The information contained in this presentation has been extracted largely from the Half Year Results Announcement for the half year ended on 30 September 2022. For the purpose of this document, references to "presentation" shall be deemed to include this document, the oral briefing provid