British Land Company PLC · LSE:BLND
British Land — FY2013 Earnings Presentation
93 slides from British Land's earnings presentation, May 12, 2013
Slide 1: Full Year Results Presentation
FULL YEAR RESULTS PRESENTATION FULL YEAR ENDED 31 MARCH 2013 www.britishland.com
Slide 2: Chris Grigg, Chief Executive
#r, British Land CHRIS GRIGG Chief Executive
Slide 3: Financial Highlights
Financial Highlights FY to 31 March 2012 2013 Change Underlying PBT £269m £274m +1.9% Underlying EPS 29.7p 30.3p +2.0% Dividend per share 26.1p 26.4p +1.1% Valuation £10.3bn £10.5bn +0.5% NAV per share 595p 596p +0.2% Total Property Returns vs IPD +200bps +310bps Income, profit, NAV and dividends al
Slide 4: Today's Agenda
Today’s Agenda Results Overview Chris Grigg Chief Executive Financial Review Lucinda Bell Finance Director Retail Review Charlie Maudsley Head of Retail Offices Review Tim Roberts Head of Offices Conclusion Chris Grigg Chief Executive 3
Slide 5: Drivers of Performance
Drivers of Performance Investment activity £1.6bn of activity Development activity £147m of profit Asset management 2m sq ft of lettings/renewals Cost control Interest cost reduced Notable successes in several areas 4
Slide 6: A Year of Significant Investment Activity
2012/3 Investment Activity A Year of Significant Investment Activity Committed development spend Total acquisitions and disposals funded by Ropemaker £795m sales NIY of 5.3% £795m £544m of acquisitions NIY of 6.3% 2 £305m £544m FY13 £461m £202m FY14 Ropemaker disposal Committed Disposals Acquisition
Slide 7: Recycling Capital to Evolve Our Portfolio
Recycling Capital to Evolve Our Portfolio London Office Weighting 35% 52% • Office portfolio more weighted to West End – West End increased from 35% 65% to 52% 48% • Greater exposure to London and the South East (55%) • New long-term joint venture with Norges at Meadowhall 2010 2013 City West End In
Slide 8: Continuing to Deliver from Development
Continuing to Deliver from Development • £147m profit delivered from committed developments this year • Over 300,000 sq ft of further pre-lets agreed/under offer • 65% pre-let/under offer: £49m rental value BROCK ST, REGENTS’ PLACE 5 BROADGATE LEADENHALL 10 PORTMAN SQ WHITELEY 500,000 SQ FT 700,000
Slide 9: Continuing to Deliver from Development
Continuing to Deliver from Development 10 PORTMAN SQUARE WHITELEY SHOPPING CENTRE Completed on time/on budget Opening 23 May 51% pre-let >90% pre-let/under offer More profit to come from development 8
Slide 10: A Good Year for Asset Management
A Good Year for Asset Management • Another year of good letting performance • Occupancy remains high • Interest costs reduced • Underlying profit: £274m FY to March 2013 Retail Offices Total Lettings/renewals sq ft 1.1m 0.9m 2.0m Investment lettings/renewals vs ERV +7.6% +7.1% +7.6% Rent reviews sq
Slide 11: Continued Polarisation
Continued Polarisation Total return (1 year) Total return (3 years) 9.2% 8.5% 6.8% 6.3% 5.6% 3.2% 1.9% -3.3% IPD IPD IPD All British IPD IPD IPD All British Prime Secondary Property Land Prime Secondary Property Land British Land delivers consistent outperformance 10
Slide 12: Lucinda Bell, Finance Director
LUCINDA BELL Finance Director
Slide 13: Financial Highlights
Financial Highlights FY to 31 March 2012 2013 Change Underlying PBT £269m £274m +1.9% Underlying EPS 29.7p 30.3p +2.0% Dividend per share 26.1p 26.4p +1.1% Valuation £10.3bn £10.5bn +0.5% NAV per share 595p 596p +0.2% Total Accounting Return 9.5% 4.6% Total Property Returns vs IPD +200bps +310bps Co
Slide 14: Net Rental Income Movement
Net Rental Income Movement +£10m (£2m) (£1m) (£12m) £546m £541m 2012 Disposals Acquisitions Development Like-for-like Other 2013 Portfolio re-positioning for growth 13
Slide 15: Income Statement
Income Statement 2012 2013 Change FY to 31 March £m £m % Net Rental Income 546 541 Fees & Other Income 17 15 Administrative Expenses (76) (76) Net Finance Costs (218) (206) Underlying PBT 269 274 +1.9% Underlying EPS 29.7p 30.3p +2.0% Efficient operating model – net operating costs 15% of gross rent
Slide 16: Resilient Valuation Performance
Resilient Valuation Performance EPRA IPD Capital ERV Topped-up Return Out- Valuation Uplift Growth NIY performance FY to 31 March 2013 £m % % % (bps) UK Retail 6,072 (1.5) 0.8 5.6 +180 UK Offices 3,717 5.0 1.5 5.7 +640 Leisure and Residential 455 1.6 0.4 7.7 UK Total 10,244 1.0 1.0 5.7 +360 - of whi
Slide 17: Growth in EPRA Net Asset Value
Growth in EPRA Net Asset Value +30p +16p (27p) (1p) (4p) (13p) 595p 600p 596p 596p 2012 Asset Market Underlying Dividends Other Before Equity Equity 2013 Management & Yield Profit Issue Issue Development Movement NAV of 596 pence 16
Slide 18: £493m Equity Placing to Exploit Attractive Opportunities
£493m Equity Placing to Exploit Attractive Opportunities • Increased flow of value and earnings accretive opportunities • Pending investment of equity proceeds the dividend will be no less than 26.4p Proceeds Annualised £m EPS3 Placing 493 (1.7p) Ealing Broadway shopping centre (143) 0.8p Surrey Qua
Slide 19: Debt Financing – Diverse Funding Profile
Debt Financing – Diverse Funding Profile • £1.2bn of debt finance arranged Diverse Debt Profile (31 March 2013) • Bringing two year total to £2.8bn • Benefiting from our scale and deal execution skills • £1.3bn of facilities in place for more than three years Taking advantage of our scale and expert
Slide 20: Balance Sheet Metrics Provide Capacity for Investment
Balance Sheet Metrics Provide Capacity for Investment Proportionally Consolidated 31 March 2012 31 March 2013 EPRA Net Debt £m 4,690 4,266 Loan to Value (LTV) 45.3% 40.2% Average Interest Rate 4.6% 4.6% Interest Cover 2.2x 2.3x Average maturity of drawn debt (years) 9.3 9.9 Group Loan to Value (LTV)
Slide 21: Gross Rental Income from Developments
Gross Rental Income from Developments +£29m +£32m +£13m (£14m) £627m £567m Temporary increase £566min outgoings as £553m £553m un-let space completes 2014-16 2013 Reported Net disposals 2013 2014 2015 2016 2013 Pro-forma Gross Rent & other Annualised Development Development Development for movements
Slide 22: Financing Costs – Impact of Developments
Financing Costs – Impact of Developments +£5m +£6m +£10m (£12m) £206m £215m £194m £194m £204m 2013 Reported Impact of 2013 2014 2015 2016 2013 Pro- Net Interest transactions Annualised Development Development Development forma for Payable impact impact impact developments Competitive and efficient c
Slide 23: Charles Maudsley, Head of Retail
CHARLES MAUDSLEY Head of Retail
Slide 24: Our Retail Approach
Our Retail Approach EXPERIENTIAL CONVENIENCE FUNCTIONAL SHOPPING Our portfolio is well balanced to the ways people shop 23
Slide 25: Our Actions
Our Actions Attracting a Broader Range of Occupiers Enhancing Overall Services Fully integrated physical and digital approach. to Customers Signed long-term deal with BT 5 new cinema and restaurant schemes Upgrading the Physical 49 food, beverage and leisure lettings and Environment renewals Increas
Slide 26: Retail Overview
Retail Overview • Total unlevered retail property return 4.0% • Capital return H1 -1.0%, H2 -0.6%, FY -1.6%, IPD -3.4% • Relative outperformance in all subsectors • Leisure total property return 8.1% Total Return Performance v IPD (%) BL IPD All Retail 9.2 4.9 4.3 +2.3% 4.0 2.6 Retail Parks Supersto
Slide 27: Robust Operating Metrics
Robust Operating Metrics BL Market vs Market ERV growth +0.8% -0.7% +150 bps Footfall -1.5% -3.7% +220 bps UK Occupancy 97.4% 94.7% +270 bps % of total rent in admin 0.9% British Land vs IPD Operational Metrics ERV growth Occupancy rate 0.8% 97.4% 94.7% BL Retail -0.7% IPD Retail -3.9% IPD Secondary
Slide 28: Leasing Activity
Leasing Activity • 1.1m sq ft of lettings/renewals Leasing activity by category Dept. Stores • 7.6% ahead of ERV 6% • 287 lettings/renewals with 210 13% 30% different retailers • Multiple transactions with 11% key retailers 11% 29% Letting activity across broad retail spectrum 27
Slide 29: Attracting Broader Range of Occupiers
Attracting Broader Range of Occupiers Fort Kinnaird Glasgow Fort St Stephen’s DEBENHAMS AT FORT KINNAIRD Meadowhall, Sheffield Leamington Cheltenham Camberley Whiteley, Fareham Drake Circus, Plymouth 8 LETTINGS AT DRAKE CIRCUS A further 420,000 sq ft of space under offer 28
Slide 30: Enhancing Overall Services to Our Customers
Enhancing Overall Services to Our Customers • Focused on providing services that: – Enhance consumer experience Retailer – Help amplify the retailers’ voice • Integrating technological advances Technology British Built • New JV with BT to provide free WiFi & Services Land Environment Consumer Integr
Slide 31: Upgrading Physical Environment – Leisure
Upgrading Physical Environment – Leisure • 40 new planning consents during the year • Initiated 5 cinema and restaurant schemes • Capital projects with capex of c£80m on the existing portfolio CINEWORLD, CHESTER VUE, GLASGOW FORT ODEON, EDINBURGH Continue to upgrade the experiential element 30
Slide 32: Upgrading Physical Environment – Debenhams
Upgrading Physical Environment – Debenhams OXFORD STREET, DEBENHAMS The profitable revitalisation of a London landmark 31
Slide 33: Continued Portfolio Reshaping
Continued Portfolio Reshaping • New long term partner on Meadowhall in Norges • Sale of 23 non-strategic or ex-growth assets • £258m of investment in Greater London assets at NIY of 6.6% UK Investment Activity FY to 31 March 2013 BL Share £m Acquisitions and Development Spend 367 Sales 243 Total act
Slide 34: £258m acquisitions in Greater London
£258m acquisitions in Greater London • 276,000 sq ft open shopping centre Eden Walk, Kingston-upon- • One of strongest catchment areas in UK Thames • Annual footfall c10m • 300,000 sq ft of retail and leisure space Ealing Shopping on 7.5 acres Centre • Affluent catchment of 1.6m people • Annual foot
Slide 35: Development – Surrey Quays and Harmsworth
Development – Surrey Quays and Harmsworth • Assembled a 37 acre site in Canada Water • Strong growing catchment Harmsworth • Zone A rents £90 - £100 Quays • Good development opportunity Surrey Quays SURREY QUAYS AND HARMSWORTH QUAYS Planning for 100,000 sq ft extension to existing 300,000 sq ft sche
Slide 36: Development – Hereford
Development – Hereford • 310,000 sq ft open air scheme • Started on site in November • Scheduled to complete in 2014 • Already over 50% pre-let by area • Occupiers include Waitrose, Next, Debenhams, and Odeon • >7% yield on cost £90m funding of a 310,000 sq ft development in Hereford 35
Slide 37: Development – Whiteley
Development – Whiteley • 320,000 sq ft scheme • Already 91% let or under offer • Unique design and retailer line up • Opening on 23rd May • > 7.5% yield on cost • Planning obtained for an additional 60,000 sq ft leisure scheme Great example of next generation retail space 36
Slide 38: Tim Roberts, Head of Offices
#r, British Land TIM ROBERTS Head of Offices
Slide 39: London Offices
London Offices • London office business continues to perform well – 9.7% unlevered total property return • Portfolio better balanced for performance – 52% of offices now in the West End • Development key driver of valuation uplift – Total profits expected to be over £420m – Clear plan to replenish d
Slide 40: Strong Office Performance
Strong Office Performance Total unlevered Property Return 9.7% Office Valuation Drivers £m Capital Return BL % IPD % Relative West End 10.0 6.3 370 bps 32% City 2.9 2.0 90 bps 65% All Offices 5.8 (0.6) 640 bps 3% Yield British Land ERV growth 1.9% (inc. developments) shift Outperformance driven by d
Slide 41: London Portfolio
London Portfolio £3,716m £3,562m • Grown our London office weighting, despite £461m sale of Ropemaker 40% 52% • More of our office portfolio in West End than City • West End acquisitions over last 3 years 60% strongly accretive to performance 48% – 17.9% total return pa since acquisition – c£800m es
Slide 42: Portfolio Well Balanced
Portfolio Well Balanced Office Portfolio Analysis by ERV • Good blend of long, medium and short term income – Significant opportunities for asset management and near term development • Long term income at core of portfolio. Prospects for replenishing through development pre-lets – 1.25m sq ft of pre
Slide 43: Investment Portfolio Activity
Investment Portfolio Activity • Investment portfolio delivered +2.3% uplift • 778,000 sq ft of investment leasing activity at 7.1% above ERV – 654,000 sq ft of lease re-gears – 124,000 sq ft of lettings 40% EXCHANGE SQUARE 155 BISHOPSGATE 199 BISHOPSGATE Re-gears with Herbert Smith and F&C Re-gear w
Slide 44: Broadgate
Broadgate • Broadening occupier base • Strengthened income flow through 611,000 sq ft of re-gears • Infrastructure hub – Crossrail • Development potential – 5 Broadgate – Broadgate Circle – 100 Liverpool Street BROADGATE CIRCLE Revitalising Broadgate 43
Slide 45: 100 Liverpool Street
100 Liverpool Street Concept design progressing well 44
Slide 46: Maximising Office Development Profits
Maximising Office Development Profits Committed Office Development Profits £423m £391m £359m £321m 126 £257m 175 192 188 192 297 216 133 167 65 March 2011 September 2011 March 2012 September 2012 March 2013 Profit Taken Profit To Come Development profits still to come of £126m 45
Slide 47: 200,000 sq ft of Agreed Office Development Pre-lets
200,000 sq ft of Agreed Office Development Pre-lets 10 PORTMAN SQUARE LEADENHALL Offices 51% pre-let Offices 50% pre-let/under offer Committed developments 61% pre-let /under offer on accretive terms 46
Slide 48: Development Pipeline
Development Pipeline • £1.2bn committed office development programme progressing well • Plan to maintain our development commitment • Existing development opportunities of over £500m Short-term Committed Near-term income 10 PORTMAN 10-30 BROCK 39 VICTORIA MARBLE ARCH LEADENHALL, BROADGATE 5 BROADGAT
Slide 49: Clarges Estate and Near Term Residential Developments
Clarges Estate and Near Term Residential Developments • Improved Clarges planning application – Increased residential from 63,000 to 94,000 sq ft – Reduced offices from 91,000 to 47,500 sq ft • Risk on committed residential development programme managed by pre-sales – 54% of residential developments
Slide 50: Chris Grigg, Chief Executive
#r, British Land CHRIS GRIGG Chief Executive
Slide 51: A Stronger Business
A Stronger Business Investment Activity 2009 – 2013 • 28%6 unlevered IRR from developments £1.3bn £[] • 9%7 unlevered IRR from acquisitio acquisitions with further upside ns since Sep 12 £750m • Replenishing our development pipeline £0.4bn • More offices in West End • Greater exposure to London and
Slide 52: Delivering Future Growth – Focus on London and the South East
Delivering Future Growth – Focus on London and the South East Aldgate Ealing Broadway Clarges Surrey Quays & Harmsworth Quays Recent acquisitions BL assets/concentration Eden Walk Continue to move West Transport inter-changes London residential Up and coming areas Estates and mixed use schemes Devel
Slide 53: Continued Investment in Development
Continued Investment in Development • Continue to see opportunity to generate good unlevered double-digit IRRs • Replenishing our pipeline : c1m sq ft near-term opportunities CLARGES ESTATE FORT KINNAIRD SURREY QUAYS Maintaining development exposure: up to 15% of gross assets 52
Slide 54: Our Retail Approach
Our Retail Approach • Physical space will remain critical to retailers • Focus on locally dominant assets • Increase exposure to South East • Important to have right approach/right assets • Invest more in our best assets • Sell assets which don’t meet our criteria Taking action to ensure our assets
Slide 55: Overall Approach
Overall Approach • Committed to London offices and UK Retail – Work individually – And in tandem – Mixed use increasingly important • Scale an important differentiator – 40-50% gearing range – Planning new investment • European business is subscale – Exit over medium term Repositioning the business
Slide 56: Outlook
Outlook • UK economy expected to grow slowly • Some signs of improving investment market – More bank funding – Continued low interest rates around the world • Occupationally – West End rents growing faster – Retail environment tough – Expect relative outperformance from our assets Our portfolio shou
Slide 57: Summary
Summary • Active and successful year • Business is in good shape • Clear direction for the business • Well placed for new investment • Large and growing London business • Development programme adding profits • Retail portfolio focused on retailers needs Generating superior shareholder returns 56
Slide 58: Appendices
#r, British Land APPENDICES
Slide 59: Another Successful Year Operationally
Another Successful Year Operationally BL UK Property Returns vs IPD bps 640bps 500bps 360bps 310bps 180bps 170bps Retail Offices Total Capital Returns Total Returns 58
Slide 60: Delivering Superior Performance
Delivering Superior Performance • Significant outperformance vs IPD, +8.3% since March 2010 (+2.4% pa) 12 months to 31 March 2011 2012 2013 Total Accounting Return 17.7% 9.5% 4.6% Total Property Return 13.1% 8.3% 6.3% Total Property Return vs IPD +180bps +200bps +310bps 59
Slide 61: Rental Income Movement
Rental Income Movement FY Reported Net Annualised Gross Rental Income Rental Income £m £m 31 March 2012 546 567 Like-for-like - (1) Acquisitions 10 18 Disposals (12) (36) Development (2) 7 Other (1) (2) 31 March 2013 541 553 60
Slide 62: Growth in Underlying Profit
Growth in Underlying Profit FY Reported Underlying profit before tax £m 31 March 2012 269 Like-for-like rental income - Net property disposals (1) Development rent (2) Other income movement (2) Reduction in finance costs 11 Other (1) 31 March 2013 274 61
Slide 63: Reconciliation of Underlying Profit Before Tax
Reconciliation of Underlying Profit Before Tax 2012 2013 12 months to 31 March £m £m IFRS Profit before tax 479 260 Net valuation movement (includes disposals) (215) (26) Deferred and current taxation of joint ventures & funds - (3) Amortisation of intangible assets - 1 Capital financing costs 2 35
Slide 64: Gross Rental Income – Sectoral
Gross Rental Income1 – Sectoral 12 months to 31 March 2013 Annualised as at 31 March 2013 (Accounting Basis) £m Group JVs & Funds Total Group JVs & Funds Total Retail parks 102 44 146 99 44 143 Superstores 8 63 71 8 62 70 Shopping centres 35 64 99 50 58 108 Department stores 32 - 32 33 - 33 UK Retai
Slide 65: Operating Costs Metric
Operating Costs Metric 2012 2013 • Our measure of efficiency: 12 months to 31 March £m £m • Controlling costs a Property Outgoings 26 26 strategic priority Administrative Expenses; Property related 46 47 • No BL development staff Corporate expenses 30 29 costs/overheads capitalised Income generated
Slide 66: Reconciliation of EPRA NAV & NNNAV
Reconciliation of EPRA NAV & NNNAV 31 Mar 2012 31 Mar 2013 As at £m Pence £m Pence Balance sheet (IFRS) net assets 5,104 565 5,687 568 Deferred tax arising on revaluation movements 31 3 14 1 Mark to market on effective cash flow hedges and 189 21 198 20 related debt adjustments Adjust to fully dilut
Slide 67: EPRA Balance Sheet (Proportional Consolidation)
EPRA Balance Sheet (Proportional Consolidation) £m Mar-12 Group JVs & Funds Mar-13 Total properties 10,337 5,554 4,945 10,499 Net debt (4,690) (1,963) (2,303) (4,266) Other net liabilities (266) (86) (180) (266) EPRA Net Assets 5,381 3,505 2,462 5,967 Loan to Value (LTV)1 45.3% 24.2% 40.2% Average i
Slide 68: Diverse Funding Profile
Diverse Funding Profile Group (LTV: 24.2%) Prop. Consol (LTV: 40.2%) £0.2bn £0.2bn £0.4bn £0.8bn 4% £0.5bn Drawn unsecured bank debt 9% 19% 19% 11% US Private Placements £0.5bn Debentures & loan notes 24% £1.0bn 22% Convertible Bonds £1.6bn Securitisations £1.0bn £0.4bn 35% Other JV & Funds secured
Slide 69: Group Debt Maturity
Group Debt Maturity £m 1,000 Undrawn Facilities 800 Drawn Facilities Convertible Bonds 600 Private Placements Debentures & Loan Notes 400 200 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 31 March 68
Slide 70: Debt Maturity – Joint Ventures and Funds
Debt Maturity – Joint Ventures and Funds British Land Share £m 1,200 Funds - Bank undrawn 1,000 Funds - Bank drawn 800 JVs - Bank drawn JVs - Securitisations 600 400 200 0 2013 2014 2015 2016 2017 2018 2019-2023 2024-2036 31 March 69
Slide 71: Movement in Proportionally Consolidated IFRS Net Debt
Movement in Proportionally Consolidated IFRS Net Debt +£411m +£442m +£203m (£777m) (£218m) +£17m (£493m) £5,306m £4,879m £4,864m £4,940m £4,661m £4,661m £4,447m £4,447m £4,464m IFRS Net Debt Operating Dividends Acquisitions Development Disposals Share Placing Other IFRS Net Debt 2012 Cash Inflow Pai
Slide 72: Gross and Net Debt Reconciliation
Gross and Net Debt Reconciliation Group JVs & Funds Total As at 31 March 2013 £m £m £m Gross Debt (principal value) 2,063 2,525 4,588 IFRS adjustments: Issue costs and premia (4) (13) (17) Fair value hedges 94 - 94 Other Items 25 - 25 Gross debt (IFRS basis) 2,178 2,512 4,690 Market value of derivat
Slide 73: Major Assets
Major Assets As at 31 March 2013 BL Sq ft Rent Occupancy Lease 1 (excluding developments) Share % ‘000 £m pa rate % length yrs3 2 1 Broadgate, London EC2 50 4,009 175 95.9 7.8 2 Regent's Place, London NW1 100 1,210 49 95.9 8.0 3 Meadowhall Shopping Centre, Sheffield 50 1,374 82 98.0 9.0 4 Sainsbury’
Slide 74: Top 20 Customers & Customer Split by Industry
Top 20 Customers & Customer Split by Industry As at 31 March 2013 % of total rent Tesco plc 7.7 Sainsbury Group 6.2 Debenhams 4.4 Supermarkets 3% 3% UBS AG 3.7 Fashion & beauty 16% Home Retail Group 2.9 10% General retail HM Government 2.6 Kingfisher (B&Q) 2.3 DIY Virgin Active 2.2 14% Food / leisur
Slide 75: Portfolio Weighting
Portfolio Weighting 2013 2013 2013 2012 (Current) (Current) (Pro forma)¹ As at 31 March 2013 % % £m % Retail parks 26.3 23.9 2,504 22.7 Superstores 13.2 12.4 1,295 11.7 Shopping centres 14.6 17.1 1,799 17.0 Department stores 4.4 4.5 475 4.3 UK Retail 58.5 57.9 6,073 55.7 Europe Retail 2.6 2.4 255 2.
Slide 76: Portfolio Valuation by Sector
Portfolio Valuation by Sector JVs & Group Funds Total Valuation movement %2 As at 31 March 2013 £m £m1 £m H1 H2 FY Retail parks 1,736 768 2,504 (2.3) (1.1) (3.4) Superstores 131 1,164 1,295 0.5 (1.1) (0.5) Shopping centres 730 1,069 1,799 (0.3) (0.3) (0.6) Department stores 474 - 474 (0.6) 3.1 2.4 U
Slide 77: Portfolio Net Yields
Portfolio Net Yields1 As at 31 March 2013 EPRA topped- Overall topped- Net Net (excluding EPRA net up net initial up net initial reversionary equivalent 2 developments) initial yield % yield % yield%3 yield % yield % Retail parks 5.5 5.7 5.8 5.9 5.9 Superstores 5.2 5.2 5.2 5.1 5.2 Shopping centres 5
Slide 78: Lease Length and Occupancy
Lease Length and Occupancy Average lease length (yrs) Occupancy rate (%) As at 31 March 2013 Occupancy (excluding developments) To expiry To break Occupancy (overall)1 Retail parks 9.8 9.0 94.6 95.8 Superstores 15.4 15.4 100.0 100.0 Shopping centres 9.9 9.2 95.8 97.5 Department stores 28.2 24.9 99.6
Slide 79: Annualised Rent & Estimated Rental Value (ERV)
Annualised Rent & Estimated Rental Value (ERV) As at 31 March 2013 Annualised rents (valuation basis) £m1 ERV £m Average rent (£psf)2 (excluding developments) Group JVs & Funds Total Total Contracted ERV Retail parks 102 44 146 156 22.5 23.3 Superstores 8 63 71 71 21.6 21.6 Shopping centres 50 58 10
Slide 80: Rent Subject to Open Market Rent Review
Rent Subject to Open Market Rent Review 12 months to 31 March (£m) 2014 2015 2016 2017 2018 2014-16 2014-18 Retail parks 19 18 20 17 10 57 84 Superstores 8 16 19 6 1 43 50 Shopping centres 11 6 17 14 11 34 59 Department stores - - - - 1 - 1 UK Retail 38 40 56 37 23 134 194 Europe Retail - - - - - -
Slide 81: Rent Subject to Lease Break or Expiry
Rent Subject to Lease Break or Expiry As at 31 March 2013 (£m) 2014 2015 2016 2017 2018 2014-16 2014-18 Retail parks 6 4 7 7 11 17 35 Superstores - - - - - - - Shopping centres 9 4 7 8 10 20 38 Department stores - - - - - - - UK Retail 15 8 14 15 21 37 73 Europe Retail 2 2 3 2 3 7 12 All Retail 17 1
Slide 82: ERV Resetting to Market
ERV Resetting to Market Annualised at 31 March (£m pa) 2014 2015 2016 2017 2018 2014-16 2014-18 ERV expiring – existing portfolio1 25 12 23 41 35 60 136 Speculative developments – City - 14 - - - 14 14 Speculative developments – West End 24 - - - - 24 24 Speculative developments – Retail - 4 - - - 4
Slide 83: Total ERV Resetting to Market (Next 3 years)
Total ERV Resetting to Market (Next 3 years) 6% 29% 13% British Land IPD (exc. development) Portfolio Vacancies & Expiries Developments (Speculative)¹ ¹ ERV of unlet portion of committed developments as a proportion of portfolio ERV including ERV of committed developments. 82
Slide 84: Contracted Rental Increases (Cash Flow Basis)
Contracted Rental Increases (Cash Flow Basis) Annualised at 31 March (£m pa) 2014 2015 2016 2017 2018 2014-16 2014-18 Expiry of rent free periods - Standing portfolio 22 1 1 - - 24 24 Expiry of rent free periods - Development pre-lets1 2 4 14 19 5 20 44 Fixed uplifts (EPRA basis) 1 1 - - - 2 2 Fixed
Slide 85: Recently Completed & Committed Developments
Recently Completed & Committed Developments PC Current Cost to Notional Resi End BL Share Sq ft Calendar Value complete interest ERV Pre-let Value As at 31 March 2013 (£m) % '000 Year £m £m1 £m1,2 £m3 £m5 £m4 Recently completed 199 Bishopsgate 50 144 Q3 12 46 3 - 3.5 0.7 - Puerto Venecia, Zaragoza 5
Slide 86: Near Term and Medium Term Prospective
Near Term and Medium Term Prospective BL Share Sq ft Total Cost As at 31 March 2013 (£m) % '000 £m1 Status Near Term Prospective The Clarges Estate Mixed Use 100 194 388 Planning Submitted Yalding House Offices 100 29 22 Pre-submission Milton Keynes, Kingston Centre Retail 50 21 4 Planning granted S
Slide 87: Estimated Future Development Spend and Capitalised Interest
Estimated Future Development Spend and Capitalised Interest Cost to complete £m PC Prelet ERV (excluding notional interest) - 6 mths As at 31 March 2013 Calendar Year £m Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 5 Broadgate Q4 14 19.2 36 31 18 18 The Leadenhall Building Q2 14 5.6 35 12 13 9 Broadgat
Slide 88: Estimated Future Development Rental Income
Estimated Future Development Rental Income (Accounting basis) PC Gross rental income (Accounting basis)1 £m – 12 mths As at 31 March 2013 Calendar Year March 14 March 15 March 16 March 17 March 18 Committed developments 5 Broadgate Q4 2014 Contracted 6 18 18 18 The Leadenhall Building Q2 2014 Contra
Slide 89: Rental Growth Potential
Rental Growth Potential Annualised Gross Rent As at 31 March 2013 Cash Flow Accounting Basis 5 Basis £m £m Current (passing) rent 544 Expiry of rent free periods2 24 553 Fixed, minimum uplifts2,3 12 RPI uplifts2,4 9 9 Developments – pre-lets 45 39 Developments – to let including recently completed s
Slide 90: Illustrative Unrealised Office Development Profits
Illustrative Unrealised Office Development Profits – Committed developments Unrealised profit illustration1 Average Valuation Yield (£m) +75bps +50bps +25bps 5.35% (25bps) (50bps) (75bps) -10% (85) (38) 14 72 136 207 286 -5% (62) (14) 39 99 165 237 317 £60 psf (39) 10 64 126 193 267 349 Estimated Re
Slide 91: Number of Shares
Number of Shares Number of shares (m) 2012 2013 Basic Weighted Average 887 895 Period end 888 986 Diluted Weighted Average 892 901 Period end 904 1,001 90
Slide 92: Presentation Footnotes
Presentation Footnotes 1Actual spend in FY 2013 and estimated spend in FY 2014 on committed developments excluding Hereford (treated as an acquisition) 2 NIY on income producing properties 3 Assuming a marginal cost of debt of 1.5%. 4 Assuming a notional investment of £250m at a 5.5% NIY. 5Pre-lets
Slide 93: Disclaimer
Disclaimer The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the year ended 31 March 2013. This presentation may contain certain “forward-looking” statements. By their nature, forward-looking statements involve risk and uncertainty