Hammerson Plc · LSE:HMSO
Hammerson — Investor Presentation (September 2010)
44 slides from Hammerson's investor presentation, Sep 23, 2010
Slide 1: Investor and Analyst Tour of Silverburn and Union Square
IInvestor and d Analyst A l Tour T off Silverburn and Union Square 23 September S t b 2010
Slide 2: Agenda
Agenda o Introduction – David Atkins o UK R Retail t il E Environment i t – Lawrence L Hutchings H t hi o Silverburn – Renee Moran and David Pierotti o Tour of Silverburn o Customer Strategy – Janette Bell o Union Square – Jonathan Brooks and Ryan Manson o Tour of Union Square 2
Slide 3: The Team
The Team David Atkins Simon Melliss Lawrence Hutchings Janette Bell Morgan Bone Agatha Donnelly Chief Executive Chief Financial Officer Managing Director Director Director Manager UK Retail Sales & Marketing Corporate Comms Investor Relations Renee Moran David Pierotti Jonathan Brooks Ryan Manson Re
Slide 4: Our Approach
Our Approach Actions Outcome Asset Management: Focus on income growth Creation of customer teams Adding new skills Best owner-manager and developer of retail and office properties Portfolio Management: Capital recycling Asset outperformance p Development Innovative transactions Attractive shareholde
Slide 5: Recent Activity
Recent Activity Acquisitions q Disposals p Silverburn Espace Saint Quentin Les Terrasses du Port g Tower Exchange Leadenhall Court 5 O’Parinor
Slide 6: Hammerson Retail Portfolio Overview
Hammerson Retail Portfolio Overview | 16 Shopping Centres • Over 1 million m2 • Value: £3.7 billion* • Footfall 220 million per annum (2009) | 16 Retail Parks • About 400,000 m2 • Value: £1.0 billion* • Majority have open A1 consent *Hammerson share as at 30 June 2010 6
Slide 7: UK Retail Environment
UK Retail Environment Lawrence Hutchings
Slide 8: UK Retail Climate
UK Retail Climate o Consumer increasingly sophisticated o Retail sales held up over past 18 months o Increasing international retailer interest o Retailer base well capitalised and expansionary o Investor demand - prime shopping centres - retail parks o Development pipeline in focus - retailers - in
Slide 9: Retail Strategy
Retail Strategy o Objective: The best owner-manager and developer o Strategy: • Life cycle management • Customer intimacy o I Implementation: l t ti • Focus on driving retail sales • Invest in existing portfolio • Progress development pipeline • Improve customer insight • Benefits of scale: manageme
Slide 10: Hammerson Retail Structure
Hammerson Retail Structure Retail Division Lawrence Hutchings Project Managementt M Retail R t il Sales S l & Portfolio Operations Sustainability & Development Marketing Construction 10
Slide 11: Strategy At Work
Strategy At Work o Retail sales growth 2.5% LFL (0.9% BRC) o Footfall 2% (0.4% Benchmark) o Vacancy reducing • 6.4% June 2009 • 5.5% December 2009 • 4.4% June 2010 o Value add projects o Development pipeline – schemes redesigned o Increased operational expertise o Procurement and portfolio leverage
Slide 12: Silverburn, Glasgow
Silverburn, Glasgow Renee Moran and David Pierotti
Slide 13: Agenda
Agenda o Key facts o Location o Competition and catchment o Footfall and trading performance o Asset strategy st ateg o Summary 13
Slide 14: Key Facts - Silverburn
Key Facts - Silverburn o Acquired ownership - 50% Hammerson / 50% CPPIB o Size - 93,000 m2 * o Purchase h price - £297 million * o Valuation - £319 million (as at 30/06/10) o Scheme opened - October 2007 o Anchor stores - M&S, Debenhams, Tesco Extra, Next o Unit shops - 94 retail units, 13 restauran
Slide 15: Location
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Slide 16: Silverburn Shopping Centre
Silverburn Shopping Centre 16
Slide 17: Competition
Competition Glasgow City Centre o Buchanan Galleries – John Lewis, Sainsbury’s, Next o St Enoch Centre – Debenhams, Debenhams BHS, BHS Boots o Princes Square – Kurt Geiger, Reiss, Vivienne Westwood, Lacoste Out of Town o Braehead Shopping Centre – M&S, Sainsbury’s, BHS, Primark, Leisure Centre o The
Slide 18: Competitor Locations
@ ee} Competitor Locations
Slide 19: Catchment and Market
Catchment and Market Silverburn currently has a catchment population of 1.5 million Total Total Market Centre’s Current Population Potential (£m) Market Share (£m) Catchment Primary 470,112 1,184.3 212.9 Secondary 557,632 1,369.0 106.3 Tertiary 526,203 1,267.7 63.7 TOTAL 1,553,947 3,821.0 382.9 Silv
Slide 20: Footfall and Trading Performance
Footfall and Trading Performance 2009 Footfall: • Silverburn +7.4% • Scotland -5.8% • UK –2.0% Footfall to 30 June 2010 +4.7% Strong performers: 20
Slide 21: Asset Strategy
Asset Strategy 2010 o Current vacancy rate 2.6% o Determined tenant mix strategy o Obtain consent for additional 7,700 m2 of retail space o Enhanced commercialisation income o Collection of sales data 2011 o p Implement marketing g strategy gy to increase sales o Introduce aspirational retailers o P
Slide 22: Summary
Summary | Modern, regional shopping centre | Strong g anchor tenants | Strongest out of town retail destination | Opportunity to grow market share | Continued sales and footfall growth | Opportunity for future income and capital growth 22
Slide 23: Customer Strategy
Customer Strategy Janette Bell
Slide 24: A Common Foundation
A Common Foundation Future Future Investment Investment Maximise Grow Maximise Asset Hammerson Retail Retailers P fit Profit Value Sales Optimal Affordable Rental Occupancy Income Cost Value for Money o Better understanding o Better relationships 24
Slide 25: Building A Better Understanding
Building A Better Understanding Sales and marketing organised to drive growth Results Leasing Plan Business Develop Marketing T Target t& Generate Insight Plan Proposition Goal Market understanding Consumer proposition • catchment • Who is our target? Commercialisation • retail categories • What is
Slide 26: A Clear Strategy to Deliver Change
A Clear Strategy to Deliver Change | Focus on better, simpler and cheaper processes | Anticipate customers requirements Be Best at Basics | Improve p communication and responsiveness p | Deliver consistency of service | Build customer knowledge and understanding Drive Performance | Develop more flex
Slide 27: An Example of Our New Approach
An Example of Our New Approach A case study from Bullring • Continued strong LFL sales growth • Catering C t i driving d i i growth th across the portfolio • Bullring has a limited catering offer – focused on the express category • Birmingham emerging as the Midlands culinary capital - Brindley Plac
Slide 28: Generate Insight
Generate Insight What is the size of the opportunity? “Ladies who lunch” “Ladies who lunch” • Spend average of £113 per visit • 88% eat at Bullring already • Currently lunch at Selfridges food court • Park at Bullring for easy reach of the theatres “Brand indulgers” “Brand indulgers” • Live locally
Slide 29: Proposition Development
Proposition Development How to unlock the opportunity? Meeting the target consumer needs: • High end casual dining offer • Lunch and dinner menu • New to Birmingham market • Aspirational, Aspirational but not niche, niche and not a mainstream chain or unknown independent • Featuring a destination ba
Slide 30: Leasing Strategy
Leasing Strategy How to optimise income? A new approach to B to B marketing: • Tailored multi-media presentation for our target retailers –p personalising g the opportunity pp y • Bespoke on line portal to improve communication • Multi step sales campaign to follow Multi-step through to deal closure
Slide 31: Summary
Summary | New approach combining insight and relationships to drive growth | Approach is being used in the business today | Scalable across the portfolio | Opportunity to further differentiate Hammerson 31
Slide 32: Union Square, Aberdeen
Union Square, Aberdeen Jonathan Brooks and Ryan Manson
Slide 33: Agenda
Agenda | Key facts | Location | Catchment and competition | Leasing progress | Footfall and trading performance | Asset strategy gy | Summary 33
Slide 34: Key Facts – Union Square
Key Facts – Union Square | O Ownership hi - 100% Hammerson H | Size - 49,600 m2 | Capital value - £187 million (as at 30 June 2010) | Total development cost - £268 million (as at 30 June 2010) | Scheme opened - October 2009 | Anchor stores - M&S, Apple and CineUK | Unit shops - 54 retail units/12 sh
Slide 35: Pre-Construction – February 2007
Pre-Construction Pre Construction – February 2007 35
Slide 36: Post-Opening – February 2010
Post-Opening Post Opening – February 2010 36
Slide 37: Aberdeen Catchment Area
Aberdeen Catchment Area | Total catchment population is 418,000 (37% live within 6km of City Centre) | Affluent Affl Mosaic M i profile fil | Oil and gas capital of Europe | Continued population growth | Low unemployment of 2.3% 37
Slide 38: Competitors
Competitors Aberdeen City Centre | Bon Accord – John Lewis, Karen Millen, Warehouse | St Nicholas – M&S (fashion), Sainsbury’s Local, The Body Shop | Trinity – Debenhams, Debenhams Superdrug, Superdrug Argos Out of Town | Kittybrewster Retail Park – TK Maxx, Sports World, Currys, Comet | Berryden Re
Slide 39: Leasing Progress
Leasing Progress 100 31 July 2010 89% 90 31 December 2009 80 30 June 2009 73% 70 67% 60 50 40 30 20 10 0 Let or in solicitors' hands 39
Slide 40: Footfall and Trading
Footfall and Trading Footfall | Annualised footfall – circa 11 million | Car park revenue above target Sales | Current trading – Restaurants strong, fashion area positive, shopping park lower densities Top 5: Next, Boots, Frankie & Benny’s, Hobbycraft and Rox H&M has increased its sales target b
Slide 41: SWOT Analysis
SWOT Analysis Strengths g Weaknesses Opportunities pp Threats | Attractive shopping | Current vacancy | Exploit catchment | Resurgence of St environment Nicholas / Bon Accord | Navigational g signage g g | Complete p the tenant centres | Strong branded line mix up – Apple, Hollister | Shopping Park
Slide 42: Asset Strategy
Asset Strategy 2010 Drive sales - Refresh research - Focus on marketing campaigns Reduce vacancy - Let remaining voids - Supported by leasing strategy Improve customer proposition - Install further signage - Introduce gift cards 2011 o Build brand profile and identity o Grown non-retail revenue o Im
Slide 43: Summary
Summary | Affluent local population with high spending power | St Strong lleisure i and d catering t i offer ff | Positive leasing gpprogress g led by y new key y retailers | Clear asset strategy to drive future performance 43
Slide 44: Disclaimer
Disclaimer This presentation Thi t ti contains t i certain t i statements t t t that th t are neither ith reported t d financial fi i l results lt nor other th historical hi t i l information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future re