Land Securities Group PLC · LSE:LAND
Land Securities — Landsec — Investor Day (September 2022)
35 slides from Land Securities's investor day presentation, Sep 21, 2022
Slide 1: Welcome to Southwark
Capital Markets event Landsec Capital Markets Southwark Welcome to Southwark THE TATE MODERN 21 September 2022
Slide 2: Itinerary
Landsec Capital Markets Southwark 2 Itinerary PRESENTATION TOUR OF SOUTHWARK INFORMAL DRINKS Introduction MARK ALLAN Central London operational update MARCUS GEDDES Delivering net zero carbon buildings in Southwark ALEXIA LAIRD External view of the Southwark market MARK FISHER The Southwark office m
Slide 3: Introduction
Landsec Capital Markets Southwark Introduction MARK ALLAN CHIEF EXECUTIVE OFFICER
Slide 4: Resilience and optionality – well positioned for future growth
Landsec Capital Markets Southwark 4 Resilience and optionality – well positioned for future growth OUR PURPOSE: SUSTAINABLE PLACES. CONNECTING COMMUNITIES. REALISING POTENTIAL High-quality portfolio Recycling capital Growth potential Driving returns Nova, SW1 21 Moorfields, EC2 Mayfield, Manchester
Slide 5: Continued strong operational momentum
Landsec Capital Markets Southwark 5 Continued strong operational momentum CENTRAL LONDON RETAIL MIXED-USE URBAN Nova, SW1 Gunwharf Quays, Portsmouth MediaCity, Greater Manchester Increasing focus from customers on Continued improvement in Integration of U+I team set to quality of space and location
Slide 6: Operational update Central London
Landsec Capital Markets Southwark Operational update Central London MARCUS GEDDES MANAGING DIRECTOR CENTRAL LONDON
Slide 7: Central London portfolio
Landsec Capital Markets Southwark 7 Central London portfolio Operational momentum remains strong Continued strong interest in high -quality space £20.8m of lettings signed or in solicitors’ hands across investment portfolio YTD, on average 4% ahead of ERV — £16.0m in offices, 1% ahead of ERV — £4.8m
Slide 8: Committed developments showing strong letting evidence
Landsec Capital Markets Southwark 8 Committed developments showing strong letting evidence Current pipeline 63% pre-let or in solicitors’ hands 21 Moorfields, EC2 The Forge, SE1 564,000 sq ft offices 140,000 sq ft offices Completion January 2023 and retail 100% pre-let Completion December 2022 Cryst
Slide 9: Pipeline of development opportunities
Landsec Capital Markets Southwark 9 Pipeline of development opportunities 1.8m sq ft of opportunities Timber Square 380,000 sq ft Near-term opportunities Earliest start Earliest completion CONSENTED The Liberty of Southwark 200,000 sq ft Earliest start Earliest completion CONSENTED Portland House 29
Slide 10: Central London portfolio – operational summary
Landsec Capital Markets Southwark 10 Central London portfolio – operational summary High-quality portfolio and pipeline continues to attract strong demand £20.8m of lettings completed or in solicitors’ hands year to date Vacancy close to half of overall London office market, reflecting high portfoli
Slide 11: Delivering net zero carbon buildings in Southwark
Landsec Capital Markets Southwark Delivering net zero carbon buildings in Southwark ALEXIA LAIRD SENIOR SUSTAINABILITY MANAGER
Slide 12: What is a net zero carbon development?
Landsec Capital Markets Southwark 12 What is a net zero carbon development? A credible net zero claim must address both upfront embodied carbon and operational carbon. All of our new developments align with the definition below UPFRONT EMBODIED CARBON OPERATIONAL CARBON Set embodied carbon target No
Slide 13: Landsec's carbon emissions
Landsec Capital Markets Southwark 13 Landsec’s carbon emissions Our new target is to halve embodied carbon intensity (kgCO2e/m2) by 2030 compared to a typical building Customers Construction Purchased activities goods and services 10% Other 3% 8% 40% 35% 4% Scope 1 Scope 2 Scope 3
Slide 14: Reducing embodied carbon on new developments
Landsec Capital Markets Southwark 14 Reducing embodied carbon on new developments PROJECT BRIEF DESIGN CONSTRUCTION Set a target and Use of low carbon materials Use of modern methods carbon budget e.g. wood of construction Consider structural retention Reduce the weight Embed embodied carbon into Re
Slide 15: The Forge – innovating construction
Landsec Capital Markets Southwark 15 The Forge – innovating construction 80% standardisation in superstructure, facade and M&E resulting in 19.4% reduction in embodied carbon — 18.4% less steel in the frame — Ribbed slab results in 13% less concrete Early engagement with supply chain was key — Testi
Slide 16: Red Lion Court – embedding flexibility and adaptability
Landsec Capital Markets Southwark 16 Red Lion Court – embedding flexibility and adaptability Expected embodied carbon of 600kgCO2e/m2 Retaining 35-40% of the existing basement and piles Post-tensioned concrete structure with high 6x6m CLT zone cement replacement and Cross Laminated Timber (CLT) infi
Slide 17: Timber Square – retention and sustainable materials
Landsec Capital Markets Southwark 17 Timber Square – retention and sustainable materials Print Building embodied carbon intensity: 434kgCO2e/m2 – already beating our 2030 target of 500kgCO2e/m2 Retaining 85% of the existing structure of the Print Building thanks to its legacy as a printworks Hybrid
Slide 18: A1-A5 embodied carbon (kgCO2e/m2)
Landsec Capital Markets Southwark 18 Timber Square A1-A5* embodied carbon (kgCO2e/m2) Embodied carbon intensity Saving 234 Sequestration 109 132 909 535 434 449 369 -65 -86 Print Building Retention CLT/steel Other Print Building Timber Square Typical new build Stage 4 Whole development *RICS Modules
Slide 19: Landsec's approach to sustainability in developments
Landsec Capital Markets Southwark 19 Landsec’s approach to sustainability in developments Meeting the needs of our customers, the community and the planet Maintaining our sector -leading position in ESG — Delivering exemplar net zero carbon developments — Halving our embodied carbon by 2030 compared
Slide 20: Southwark: The agent's view
Landsec Capital Markets Southwark Southwark The agent’s view MARK FISHER UNION STREET PARTNERS
Slide 21: A brief history of Southwark
Landsec Capital Markets Southwark 21 A brief history of Southwark Guy’s Hospital London’s ‘Liberty’ The Jubilee Line The Shard playground Train stations and viaducts 15th century 17th century 1999 2012 The Low Line Ongoing 16th century 18th century 1990 2007 Theatres and Markets and The Queen’s Walk
Slide 22: What do tenants like about the area?
Landsec Capital Markets Southwark 22 What do tenants like about the area? VARIETY OF VIEWS & ACCESS CONNECTIVITY LIFESTYLE BUILDING TYPE TO THE RIVER QUALITY AMENITY TALENT POOL OF SPACE
Slide 23: Amenity offer
Landsec Capital Markets Southwark 23 Amenity offer Cultural spaces Galleries Theatres Cinemas Independent amenity Markets Meanwhile spaces
Slide 24: Unique appeal to staff
Landsec Capital Markets Southwark 24 Unique appeal to staff Easy walk from mainline stations with no onward tube journey Cycle routes Cool factor Independent thinking An area where they would choose to go out after work Quality buildings but in a mixed-use area An area that retains both a business a
Slide 25: Who is located here?
Landsec Capital Markets Southwark 25 Who is located here? Design and architecture Early adopters seeking character warehouse space Media Large companies seeking buildings of scale, in a cool location Legal and professional Wanting alternatives to traditional locations Life sciences Proximity to hosp
Slide 26: Importance of sustainability and wellness
Landsec Capital Markets Southwark 26 Importance of sustainability and wellness The ‘flight to quality’ continues Companies of scale ask for ESG credentials as a pre-requisite Staff retention relies on ESG provision The WFH revolution The area is a target location for large companies seeking quality
Slide 27: What are the prospects for Southwark?
Landsec Capital Markets Southwark 27 What are the prospects for Southwark? Large scale More footloose Life sciences Excellent transport development tenants, seeking is a significant infrastructure opportunities alternatives to new sector underway the City Becoming Loyal local tenants Appeal to more
Slide 28: The Southwark office market
Landsec Capital Markets Southwark The Southwark office market OLIVER KNIGHT HEAD OF OFFICES
Slide 29: Creating a 1m sq ft Southwark green office cluster
Landsec Capital Markets Southwark 29 Creating a 1m sq ft Southwark green office cluster Four schemes with great transport links in a vibrant location Thameslink towards Farringdon & King’s Cross Unique blend of culture, Bank heritage, leisure and F&B Cannon Street Monument destinations Temple Blackf
Slide 30: Central London grade-A office supply likely to tighten
Landsec Capital Markets Southwark Tour 30 Central London grade-A office supply likely to tighten Some construction starts are likely to be deferred Actual construction starts in the City have reduced sharply compared to original forecasts in previous periods of economic uncertainty Growing demand fr
Slide 31: Why Southwark?
Landsec Capital Markets Southwark 31 Why Southwark? A growing market with compelling characteristics Southbank occupancy cost is at a significant discount Prime yields are above other sub markets – Q2 2022 to competing sub markets Occupancy costs, £ psf (for illustration) Mayfair and St James's (£17
Slide 32: Creating a 1m sq ft Southwark green office cluster
Landsec Capital Markets Southwark 32 Creating a 1m sq ft Southwark green office cluster Four complementary schemes with c. £1.1bn TDC and anticipated yield on cost of c. 7% THE FORGE – 140,000 sq ft TIMBER SQUARE – 380,000 sq ft THE LIBERTY OF SOUTHWARK – 200,000 sq ft RED LION COURT – 235,000 sq ft
Slide 33: Summary
Landsec Capital Markets Southwark Summary MARK ALLAN CHIEF EXECUTIVE OFFICER
Slide 34: Well positioned for future growth
Landsec Capital Markets Southwark 34 Well positioned for future growth Strong financial base and flexibility in pipeline provide optionality Strong operational performance across business Customers increasingly focused on high-quality space Macro challenges impacting investment markets Repricing of
Slide 35: Q&A
Landsec Capital Markets Southwark Q&A