Land Securities Group PLC · LSE:LAND
Land Securities — Landsec — Retail Investor Conference Oxford 2018
56 slides from Land Securities's conference presentation, 2018
Slide 1: Retail Investor Conference Oxford 2018
RETAIL Investor Conference Oxford 2018
Slide 2: Retail Portfolio
RETAIL PORTFOLIO Scott Parsons Managing Director
Slide 3: Agenda
Landsec – Investor Conference 2018 3 Agenda MARKET AND PORTFOLIO UPDATE Scott Parsons Managing Director, Retail Portfolio OUTLETS Ailish Christian-West Head of Property WESTGATE OXFORD Andrew Dudley Head of Development FILM Q&A TOUR OF WESTGATE OXFORD LUNCH
Slide 4: Repositioned Retail Portfolio
Landsec – Investor Conference 2018 4 Repositioned Retail Portfolio Retail Portfolio proportion of capital value – March 2007 vs September 2017 38% 33% 27% 23% 15% 14% 12% 12% 11% 9% 6% 2007 2017 2007 2017 2007 2017 2007 2017 2007 2017 2007 2017 2007 2017 Regional Suburban London Hotels Retail parks
Slide 5: Retail Portfolio strategy
Landsec – Investor Conference 2018 5 Retail Portfolio strategy
Slide 6: Retail space UK vs US
Landsec – Investor Conference 2018 6 Retail space UK vs US Shopping centre GLA (sq m) per capita Department store % of total GLA USA 2.19 46% USA Canada 1.56 UK 27% Australia 1.03 Austria 0.45 Australia 23% UK 0.43 European Union 0.31 Asia 17% China 0.26 Middle East 15% Germany 0.22 Source: ICSC Sou
Slide 7: Physical store remains the dominant sales channel
Landsec – Investor Conference 2018 7 Internet penetration Despite fast growth in online retail, physical store is and will continue to be the dominant sales channel. Today, 85.5% of the total £223bn of comparison goods spend in the UK touches a store. Source: CACI
Slide 8: Department store rents are relatively low
Landsec – Investor Conference 2018 8 Department store rents are relatively low Rental comparison between shopping centre “anchors” and other uses Rent / sq ft £22.43 £21.00 £22.10 £21.50 £20.25 £21.18 £10.87 £10.87 £10.73 £5.82 £5.82 Supermarket Cinema Gym Department store £6.75 Contracted rent/sq f
Slide 9: Repositioning retail space
Landsec – Investor Conference 2018 9 Repositioning retail space MSUs — Relatively low rents — Affordable space — Strong destinations perform well
Slide 10: Repositioning the offer
Landsec – Investor Conference 2018 10 Repositioning the offer Retailers taking space — New brands taking space — Global retailers UK expansion — Brands arriving exceeding brands departing… but only in the best locations
Slide 11: Pure-play online retailers taking physical space
Landsec – Investor Conference 2018 11 Potential pure-play online retailers taking physical space
Slide 12: Retail Portfolio strategy
Landsec – Investor Conference 2018 12 Retail Portfolio strategy
Slide 13: Cinemas: resilient reasons to visit centres
Landsec – Investor Conference 2018 13 Cinemas Resilient reasons to visit centres Annual spend per head £ 19.17 19.18 17.00 17.40 17.13 17.60 15.27 15.87 13.57 13.91 12.46 12.87 12.93 12.65 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: UK Cinema Association White Rose,
Slide 14: Food and beverage: adding to the mix
Landsec – Investor Conference 2018 14 Food and beverage Adding to the mix Eating out market value Westgate Oxford roof terrace restaurants Westgate Social +2.2% p.a. £70.1bn £65.6bn 10% Breakfast 8% Snack 21% 19% 30% 31% Bluewater, Kent Galleria, Hatfield Lunch Dinner 43% 38% 2013 2016 Source: JLL T
Slide 15: Curating the brand mix
Landsec – Investor Conference 2018 15 Curating the brand mix — Attracting brands consumers want — Leases outside the Landlord and Tenant Act — Greater landlord control — Curating a relevant mix of brands Bluewater, Kent
Slide 16: Keeping the offer fresh
Landsec – Investor Conference 2018 16 Keeping the offer fresh Engaging and design-led shop fit-outs Westgate Oxford St David’s, Cardiff
Slide 17: Evolving leisure offer
Landsec – Investor Conference 2018 17 Evolving leisure offer
Slide 18: Innovation: smart parking
Landsec – Investor Conference 2018 18 Innovation Smart parking directs you to a free space
Slide 19: Everything is experience
Landsec – Investor Conference 2018 19 Everything is experience St David’s, Cardiff Follow your Dreams. St David’s, Cardiff Yorkshire Day. Xscape, Yorkshire Future Sports Stars. Xscape, Yorkshire Student Lock-in. St David’s, Cardiff Narnia Experience. Gunwharf Quays, Portsmouth Titan the Robot. Xscap
Slide 20: Retail Portfolio strategy
Landsec – Investor Conference 2018 20 Retail Portfolio strategy
Slide 21: Making our great destinations even better
Landsec – Investor Conference 2018 21 Making our great destinations even better — New Primark unit at Bluewater — White Rose leisure extension fully let — UK’s largest retail solar PV installation — Two new mixed-use destination opportunities in London Yorkshire day. White Rose extension, Leeds Aard
Slide 22: Summary
Landsec – Investor Conference 2018 22 Summary — Outperforming benchmarks — Greater dwell time — Low voids — Resilient income — Selective investment St David’s, Cardiff
Slide 23: Outlets
OUTLETS Ailish Christian-West Head of Property
Slide 24: Landsec outlet update
Landsec – Investor Conference 2018 24 Landsec outlet update +37% Gunwharf Quays – retail sales FY11/12 – FY16/17 (£m) sales uplift 150 145 140 135 130 125 120 115 110 105 100 FY11/12 FY12/13 FY13/14 FY14/15 FY15/16 FY16/17
Slide 25: Our locations
Landsec – Investor Conference 2018 25 Our locations Junction 32 Castleford Braintree Essex Galleria Hatfield Clarks Village Gunwharf Quays Street Portsmouth
Slide 26: Landsec view of outlet categorisation in the UK
Landsec – Investor Conference 2018 26 Landsec view of outlet categorisation in the UK Outlet schemes Main operators Increasing sales densities £/sq ft £2,000+ Luxury Bicester Village Value Retail £500 – £1,000 Premium Gunwharf Quays Landsec Cheshire Oaks, York, Ashford McArthur Glen Braintree, Clark
Slide 27: Why retailers like outlets
Landsec – Investor Conference 2018 27 Why retailers like outlets — To clear end of season stock — Better margins — Customer experience Gunwharf Quays, Portsmouth — To test new products — Limited overlap with premium full-price stores Gunwharf Quays, Portsmouth
Slide 28: Why we like outlets
Landsec – Investor Conference 2018 28 Why we like outlets — Relevant retailer mix — Stronger demand tension — Shorter lease lengths — Leases typically outside Landlord and Tenant Act — Performance related break clauses Gunwharf Quays, Portsmouth
Slide 29: How we operate outlets
Landsec – Investor Conference 2018 29 How we operate outlets — Vibrant environment — Evolving mix of brands — Close customer relationships — Insights and intelligence at the heart of everything we do
Slide 30: Insights and intelligence
Landsec – Investor Conference 2018 30 Insights and intelligence Instant feedback pods Feedback from over Real-time parking information on website 1,200 and sensors to aid access shoppers Providing sales analytics TORK system to helping to assess impact measure footfall into on store performance publ
Slide 31: Landsec outlet assets
Landsec – Investor Conference 2018 31 Landsec outlet assets Gunwharf Quays, Portsmouth Galleria, Hatfield Braintree, Essex Clarks Village, Street Junction 32, Castleford — 570,000 sq ft — 300,000 sq ft — 200,000 sq ft — 200,000 sq ft — 240,000 sq ft — Void rate of 1% — Void rate of 6.2% — Void rate
Slide 32: Summary
Landsec – Investor Conference 2018 32 Summary — Leading owner manager of outlets in the UK — Acquired three assets with NIY of 6.5% — Sales up by average of 3.2% in first six months of ownership — Drivers of success — Physical environment — Curation of brand mix — Specialist outlet team Braintree, E
Slide 33: Westgate Oxford
WESTGATE OXFORD Andrew Dudley Head of Development
Slide 34: Creating Westgate Oxford
Landsec – Investor Conference 2018 34 Creating Westgate Oxford Westgate story — Why Oxford? — How we did it — Delivery — Performance
Slide 35: Why Oxford?
Landsec – Investor Conference 2018 35 Creating Westgate Oxford Why Oxford? 1 2 Strong 3 retailer Great demand catchment Constrained supply
Slide 36: Why Oxford: retailer demand
Landsec – Investor Conference 2018 36 Why Oxford Retailer demand — Number 1 PROMIS location — 1m sq ft retail requirement — Poor existing F&B and leisure offer
Slide 37: Why Oxford: great catchment
Landsec – Investor Conference 2018 37 Why Oxford Great catchment — Young, affluent — 7 million visitors each year — Student annual spend £750m
Slide 38: Why Oxford: constrained supply
Landsec – Investor Conference 2018 38 Why Oxford Constrained supply Poor Poorly Piecemeal existing configured ownership retail offer and undersized units Man vyi
Slide 39: How we did it: History
Landsec – Investor Conference 2018 39 How we did it History 1971 Westgate opened
Slide 40: How we did it: History
Landsec – Investor Conference 2018 40 How we did it History 2010 Bought by Westgate Oxford Alliance
Slide 41: Quality of design
Landsec – Investor Conference 2018 41 How we did it Quality of design — Strong expectations on architecture — Five distinct city blocks — Five different architects, one retained as master planner Glenn Howells Architects – Buildings 1 and 1A Panter Hudspith Architects – Building 2 Allies and Morriso
Slide 42: Approach to design
Landsec – Investor Conference 2018 42 How we did it Approach to design Height limit of 18.2m to preserve views of the city
Slide 43: Approach to design
Landsec – Investor Conference 2018 43 How we did it Approach to design — Natural flow on two level retail — Unique roof terrace — Bonn Square Arcade
Slide 44: Sustainability
Landsec – Investor Conference 2018 44 What we delivered Sustainability — Lowest carbon retail destination in the country — Centralised air source heating — Low-carbon concrete and recycled steel
Slide 45: Impact
Landsec – Investor Conference 2018 45 What we delivered Impact — £738m of gross economic value — Created 3,500 fte retail jobs — 580 construction jobs
Slide 46: Creating Westgate Oxford
Landsec – Investor Conference 2018 What we delivered Creating Westgate Oxford — 800,000 sq ft over three levels — 1,000 space car park — 100 shops
Slide 47: Best of the high street
Landsec – Investor Conference 2018 47 What we delivered Best of the high street Upper ground floor River Island, H&M and Uniqlo
Slide 48: Affordable luxury
Landsec – Investor Conference 2018 48 What we delivered Affordable luxury Lower ground level Gant, Hugo Boss, Ted Baker 140,000 sq ft John Lewis
Slide 49: Creating Westgate Oxford
Landsec – Investor Conference 2018 49 What we delivered Creating Westgate Oxford Roof terrace Curzon cinema 25 food and beverage operators Leisure zone
Slide 50: Creating Westgate Oxford
Landsec – Investor Conference 2018 50 What we delivered Creating Westgate Oxford — Created great public spaces — Major new square – Leiden Square — Events ‘quad’ on roof terrace Roof terrace — New community space for Oxford Leiden Square
Slide 51: Residential
Landsec – Investor Conference 2018 51 What we delivered Residential — 59 private apartments — 53 sold or reserved — Record values
Slide 52: Customer journey
Landsec – Investor Conference 2018 52 What we delivered Customer journey — 60% of visitors arrive by bus or park and ride — Early engagement — Single tariff — New branding — New services and buses
Slide 53: Milestones
Landsec – Investor Conference 2018 53 What we delivered Milestones — Hit every milestone of 7-year development programme — 32-month build programme — Biggest archaeological dig in Oxford’s history Development May 2017 — Opened 24 October 2017 Oxford Archaeology excavations
Slide 54: Performance
Landsec – Investor Conference 2018 54 Performance — 94% let or in solicitors’ hands — Footfall — 6.3 million to date — Well ahead of projected annual 15 million — ERV £14m (Landsec 50% share) — TDC £217m (Landsec 50% share)
Slide 55: Summary
Landsec – Investor Conference 2018 55 Summary — Highest retailer demand in the UK — Hit every milestone — 94% let or in solicitors’ hands — 67 brands new to Oxford — Stunning design Westgate Oxford
Slide 56: Important notice
Landsec – Investor Conference 2018 56 Important notice This presentation may contain certain ‘forward-looking’ statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materiall