2015 Full-year Results 15 February 2016 Agenda 01 2015 - - PowerPoint PPT Presentation

2015 Full-year Results

15 February 2016

Agenda

01

2015 highlights and strategy

David Atkins – CEO

02

Financial results

Timon Drakesmith – CFO

03

Portfolio update

David Atkins – CEO

04

Conclusion and Q+A

David Atkins – CEO

2

2015 highlights

3

(1) LfL NRI including premium outlets

Consistently strong performance

EPS +12.6% NAVPS +11.3% TPR 12.4%

New European market

Dublin, Ireland

Portfolio recycling

£360m disposals

Completed four developments

64,900m2 Total 25% profit on cost

Capturing rental growth

LfL NRI +3.1%(1)

2015 highlights and strategy

Investment management driving performance

4

Investment management strategy

Leading position in the European market segment

1

European countries or cities with strong macro indicators and infrastructure investment

2

Identified asset management

• pportunities

4

Venues matched to consumer trends, in particular experience, convenience and luxury shopping tourism

3

2015 highlights and strategy

Building our portfolio to secure future growth

5

Irish loan portfolio, Dublin Grand Central, Birmingham Festival Park, Majorca

Kildare Village, Dublin

Acquisitions

Market-leading platform in Ireland Quality retail in Birmingham, UK’s second city Fast-growth premium

• utlets

£690m Positive engagement with borrowers £175m 50:50 joint venture signed with CPPIB £46m New VIA Outlet and increased stake in Kildare Village, Dublin

2015 highlights and strategy

On-going review of lower-return assets

6

Note: Premium for disposals versus 31 December 2014 book value

Monument Mall, Newcastle Irish platform (hits all filters): immediate scale, Europe’s B’Ham the UK’s fastest growing regional B’Ham Villebon 2, Paris Bercy 2, Paris

Disposals

Completed successful asset management Standalone retail park in France Lower-return smaller shopping centres £360m of disposals in last twelve months Completed first tranche of £200m to finance Irish loan acquisition Planned £300m of further disposals in course of 2016 Recycling capital in UK retail parks

Drakehouse, Sheffield

£75m 46% PoC £62m 4% premium to BV £47m 1 1% premium to BV £116m 16% premium to BV

2015 highlights and strategy

Focus on strategic priorities continues to deliver strong results

7

NAVPS (pence)

710

400 450 500 550 600 650 700 750 2011 2012 2013 2014 2015

+11%

CAGR +7.6% EPS (pence) DPS (pence)

26.9

10 12 14 16 18 20 22 24 26 28 30 2011 2012 2013 2014 2015

CAGR +8.7%

22.3

5 7 9 11 13 15 17 19 21 23 25 2011 2012 2013 2014 2015

CAGR +7.7%

+13% +9%

2015 highlights and strategy

Financial results

Timon Drakesmith – CFO

• Review of 2015 financial performance
• Analysis of valuation trends
• Details on recent changes in debt levels
• Funding capacity for our development pipeline

8

02

Headline results

9

(1) Adjusted profit and adjusted EPS restated from £85.0m and 11.6p respectively to exclude restructuring costs of £3.0m, which were excluded when calculating adjusted earnings figures for 31 December 2014 (2) Valuation for total portfolio including premium outlets at constant currency. Uplift is underlying capital return

Income statement 31 Dec 2015 31 Dec 2014 Change Net rental income (£m)

318.6 305.6 +4.3%

Adjusted profit (£m)(1)

210.9 174.3 +21.0%

Adjusted EPS (p)(1)

26.9 23.9 +12.6%

Total dividend (p)

22.3 20.4 +9.3%

Balance sheet Portfolio value (£m)(2)

8,374 7,734 +7.1%

EPRA NAVPS (p)

710 638 +1 1.3%

LTV (%)

38 34 +4 p.p.

Financial results

Positive LfL net rental income growth

10

(1) Includes LfL movement of UK other properties – principally assets held for development and non-core (2) Includes Value Retail only as VIA Outlets was acquired in July 2014

2.1 2.6 2.5 2.3 7.3 3.1

1 2 3 4 5 6 7 8 9 UK shopping centres UK retail parks France Total exc. Premium

• utlets

Premium outlets Total

2015 LfL NRI growth by sector (%)

(1) (1) (2)

Financial results

Strong profit growth

11

174.3 210.9 6.0 5.5 9.7 5.9 0.2 12.3 (3.0)

100 120 140 160 180 200 220

2014 2015

Adjusted profit movement (£m)

LfL NRI Acquisitions and disposals Developments Premium

• utlets

Admin FX & other Financing

+21.0%

Financial results

Valuation analysis

12

(1) At constant exchange rates (2) Figures on a proportionally consolidated basis (3) Principally assets held for redevelopment and non-core (4) Premium outlet figures relate to Hammerson interests

2015 capital return(1) Components of underlying valuation change Value at 31 Dec 2015(2) (%) Yield shift (%) Income (%) Other (%) (£m) UK shopping centres

+6.8 +4.4 +2.3

• 3,065

UK retail parks

+1.3 −0.2 +1.5 −0.1 1,656

France

+7.1 +9.3 −0.9 −1.7 1,861

UK other interests(3)

+1.7 +1.8 +0.7 −1.4 160

Developments

+12.3

• +12.3

388

Premium outlets(4)

+16.4 +7.2 +9.4 +0.2 1,244

Total ex Ireland

+7.1 +4.9 +2.4 −0.1 8,374

Irish loan portfolio

690

Total inc Ireland

9,064

Financial results

NAVPS uplift

13

638 710 47 22 27 (21) (3)

580 600 620 640 660 680 700 720 740 760

Dec 2014 Dec 2015

Adjusted NAV movement (pence per share)

Portfolio revaluation Premium

• utlets

revaluation Adjusted profit Dividends FX & other

+11.3%

Financial results

Healthy financing ratios

14

Financing policy 31 Dec 2015 31 Dec 2014 Net debt

• £2,968m

£2,265m

Gearing

<85% 54% 46%

Loan to value

<40% 38% 34%

Cash/undrawn facilities

• £931m

£648m

Weighted average cost of finance

• 3.8%

4.7%

Interest cover

>2.0x 3.6x 2.8x

Net debt/EBITDA

<10x 9.6x 8.0x

Fixed rate debt

>50% 61% 79%

GBP/EUR fixed balance sheet hedging

80% - 90% 90% 88%

Financial results

Management of leverage

15

Today Proformas Actual 31 Dec 2015 (1) Post 50% Grand Central and announced disposals (1) Conversion of Irish loans to property by summer 2016 (2) £300m disposals by end 2016 Net debt

£2,968m £2,951m £3,164m £2,864m

LTV

38% 38% 39% 37%

(1) Value denominator includes £690m acquisition cost of Irish loan portfolio (2) Payment for conversion to property including balancing payment to Allianz (total £220m)

Financial results

Controlled deployment of capex

16

(1) On-site developments include Victoria Gate, Leeds and WestQuay Watermark, Southampton (2) The Goodsyard - Phase 1 only . Note: Additional pipeline development opportunities shown in Appendix

Forecast development expenditure (£m)

Committed capex at on-site developments (1) Brent Cross extension Croydon town centre The Goodsyard (2) Discretionary capex

Average annual capex 2013-2015

• 50

100 150 200 250 300 2016 2017 2018 2019 2020 Financial results

Debt maturities and refinancing plan

17

(1) As at 31 December 2015 shown on a proportionally consolidated basis

100 200 300 400 500 600 700 800 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Revolving credit facilities US private placement Sterling bonds Euro bonds Secured debt

Debt maturity profile (£m) (1)

Recent financings (£1.7bn)

• £1.1bn credit facility (£691m drawn down at 31 December 2015)
• £350m 2025 bond issue (2.5% effective coupon)
• £272m bond redemption originally due December 2016

Future funding plans

• Refinancing of 2017 RCF with new debt issuance and disposals
• Credit agencies reaffirmed ratings

Financial results

Portfolio update

David Atkins - CEO

Shopping centres

• UK
• Ireland
• France

Retail parks Premium outlets Developments

18

03

Positioned in prime assets delivering growth across the group

19

(1) Includes UK other interests – principally assets held for redevelopment and non-core

UK shopping centres 34%

French shopping centres 20% Retail parks 18% Premium

• utlets

14% Other/developments(1) 6% Our portfolio today Irish shopping centres (loans) 8%

Occupancy

97.7%

Leases signed

400 leases (£28m)

Leasing vs previous passing

+9.5%

Portfolio update

Portfolio update: Shopping centres, UK

Brent Cross, London

Grand Central: highly-prized new addition

21

(1) GVA per head (ONS)

50:50 JV with CPPIB; Hammerson £175m net investment Adjacent to Bullring Largest John Lewis store outside London Birmingham economic growth second only to London in UK (1) £750m New Street Station regeneration 12% rental reversion on retail 7-8% IRR

Forecast run-rate annual centre footfall

22m

% catering

18% 40,400m2

Size Portfolio update: Shopping centres, UK

Sales patterns reflect shopper confidence

22

Hammerson UK shopping centres Retail sales(1)

+1.3% (+80bps vs index(2))

Footfall

+1.1%

Car park usage(3)

+4.1%

(1) Hammerson UK same-centre retail sales growth (2) VISA face-to-face spending index (2015: 0.5%) (3) Car count at Hammerson UK shopping centres

• 1%

0% 1% 2% 3% 4% 5% 6% 7%

Fashion accessories Department stores Gifts & cards Fashion Footwear Catering Leisure & travel Jewellery Technology Health & beauty Sport & Outdoors

50]% of Hammerson’s base rent, recognising –

YoY sales growth by category in Hammerson UK shopping centre portfolio(%)

Portfolio update: Shopping centres, UK

Multichannel drives greater efficiency of prime retail space

23

(1) Adjusted for online returns to store and attributing click & collect purchases (2) Source: CBRE/IPF research (3) Pure-play online sales (predominantly ASOS, very.com, boohoo and Amazon) fulfilled in shopping centre via Collect+ kiosk

• 1. Online returns and Click & Collect (1)
• 3. Collect+ (3)
• 2. Retail ‘halo’ effect (2)

Incremental sales driven by multichannel

+10% +5-6% +1-2%

In store sales

1 2 3

Portfolio update: Shopping centres, UK

Competition for the best retail space

24

• 50%
• 30%
• 10%

10% 30% 50% 70% 90%

Hammerson UK shopping centre principal leasing deals vs ERV Tenant-mix deals International brands/ upsizing Unit stores and new concepts Catering Hammerson UK shopping centres Number of leases at or above ERV

73%

Leasing vs previous passing

+8.8%

Leasing vs ERV

+3.5%

ERV growth

+2.8%

Portfolio update: Shopping centres, UK

Growth in non-rental income

25 4 6 8 10 12 14 16 2012 2013 2014 2015

Other Storage Vending Car valeting Kiosks Advertising & promotions

UK shopping centre commercialisation revenue (£m) Car park income 2015 net income

£23.1m

LfL YoY growth

+4.1%

Bad Brownie, Oracle The White Company, Oracle Cath Kidston, Brent Cross TESLA, Brent Cross

+9%

Income from kiosks +29% in 2015

Portfolio update: Shopping centres, UK

Portfolio update: Shopping centres, Ireland

26 Dundrum, Dublin

Strengthening our European retail platform with new Irish portfolio

27

Note: Structure of property ownership on conversion of loans: (1) Hammerson/Allianz 50:50 JV (2) 50% co-ownership with IPUT (25%) and Irish Life (25%). Development site 100% Hammerson (3) 50% co-ownership with Irish Life (50%)

Dundrum Town Centre(1) Dundrum Phase 2 Development site(1) Dublin Central Development Site Pavilions, Swords(2) Ilac Centre(3)

Fastest growing European economy Best quality retail in Dublin Leading market position Dundrum Town Centre 50%

• wnership (JV with Allianz)

Development sites at Dundrum and central Dublin Strong reversion potential IRR 7-8%

Total footfall

48m

Total development opportunity

27 acres 200,000m2

Total retail area Portfolio update: Shopping centres, Ireland

On track with asset conversion

28

Hammerson acquisition costs

£m

Face value of Irish loan portfolio (50%)

960

Hammerson loan acquisition cost (50%)

690

Expected expenditure on fees, tax and Allianz re-balance

220

Forecast total investment

910

Continuing positive engagement with borrowers On track for property ownership by summer 2016 Hammerson operational team established in Dublin

Update on transfer to property ownership

Portfolio update: Shopping centres, Ireland

Exceptional economic backdrop in Ireland

29 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016F Grafton St Henry St

Sources: OECD; Ireland CSO; KBC/ESRI; National Tourism Development Authority; CBRE

Dublin rental growth (€/m2)

2015 GDP growth +6.7% 2015 Retail sales value growth +3.6% 2015 new car sales growth +18% Unemployment 6-year low at 7.8% Consumer confidence at 8-year high 8.6 million tourists in 2015, +14%

Portfolio update: Shopping centres, Ireland

Europe’s fastest growing economy

Dundrum leasing deals above expectations

30

Rent reviews settled on average +10% vs previous passing

Portfolio update: Shopping centres, Ireland

Strong trading reflecting consumer confidence Tenant sales (2015 YoY) (1)

+6.0%

Footfall (2015 YoY)

+1.3%

Rental uplift +29% Consolidates luxury mall Upsize and full refit

Top 15 store globally

Bought out previous lease Over 2.5x previous rent

(1) Retail sails for Dundrum Town Centre, based on available data

Portfolio update: Shopping centres, France

Le Jeu de Paume, Beauvais

2012 - 2015: Repositioning of our French portfolio

32

(1) Premium for disposal vs 31 December 2014 book value

Significant work to transform French platform Refurbishments Selective disposals Developments Acquisitions £30m Attracting new brands Total £210m 15% premium to BV(1) Total £420m 35% PoC Total £125m 8% valuation uplift

Portfolio update: Shopping centres, France

Lifting quality and performance with re-tenanting

Number of units re-tenanted across portfolio

Portfolio update: Shopping centres, France

Hammerson France portfolio

Leasing vs previous passing

+9.7%

Leasing vs ERV

+1.5%

New brands

20 40 60 80 100 120 140 160 180 200 2014 2015 2016 +

51 units 78 units

2015 target

33

Target 20% retail

• ffer renewed

Turnaround in performance

34

(1) Hammerson France same-centre retail sales growth. Includes all shopping centres, excludes extensions and developments

Hammerson France portfolio performance (% growth)

• 3.0%
• 2.7%
• 1.0%

0.6%

• 4.0%
• 3.0%
• 2.0%
• 1.0%

0.0% 1.0% 2.0% 3.0% 2012 2013 2014 2015

Sales NRI excl. Indexation NRI

Portfolio update: Shopping centres, France

(1)

Portfolio update: Retail parks

35 B&Q Eco learning store, Cyfarthfa retail park, Merthyr Tydfil

Rugby image

Elliott’s Field, Rugby Elliott’s Field, Rugby

Focused strategy in retail park market

36

(1) Source: PMA

Shopping parks Hybrid parks Key homeware goods parks Standard homeware parks Solus units 2.7% 2.5% 2.0% 1.8% 1.5%

Hammerson investment focus

Market forecast rental growth(1)

UK Retail Park market(1)

5% 23% 12% 16% 43% 13% 30% 39% 8% 13%

Shopping parks Hybrid parks Key homeware goods Standard homeware Solus

79% by number of properties 40% by number of properties

Hammerson portfolio

Portfolio update: Retail parks

Taking advantage of strong occupational demand

37

Shopping parks Hybrid parks Key homeware goods parks Share of lettings: 64% Leasing vs ERV: +2% Share of lettings: 10% Leasing vs ERV: +11% Share of lettings: 20% Leasing vs ERV: +10%

Portfolio update: Retail parks

Hammerson retail parks portfolio

Leasing vs previous passing

+7.7%

Leasing vs ERV

+4.2%

ERV growth

+1.3%

Portfolio update: Premium outlets

La Vallée Village, Paris Kildare Village, Dublin

Insert new picture?

Kildare Village, Dublin

New investments in premium outlets

Ownership increased from 14% to 38% £14m investment, Hammerson share Extension completed: 33 new boutiques and two restaurants and hospitality services Footfall exceeded 3 million in 2015

39

Value Retail: Kildare Village, Dublin Acquired Majorca’s only major outlet centre £32m investment, Hammerson share 87 stores, including restaurants and a cinema Open 7 days a week 3.8 million visitors per year VIA Outlets: Festival Park, Majorca

Portfolio update: Premium outlets

Premium outlets continue to grow strongly

40

Value Retail VIA Outlets Sales growth

+1 1.0% +9.6%

Sales density

€15,000/m2 €3,300/m2

Sales density growth

+8.4% +1 1.2%

Key 2015 leasing deals at VIA Outlets:

Portfolio update: Premium outlets Landquart, Zurich

Trends in European luxury shopping

41

Source: Global Blue (1) Other Asia: Hong Kong (4%), Malaysia (3%), Korea (3%), Thailand (2)%, Singapore (2%), Taiwan (2%), Indonesia (1%), Philippines (1%), Vietnam (1%) (2) Gulf States: Kuwait (4%), Saudi Arabia (3%), UAE (2%) and Qatar (2%)

Total European tax refunded sales by nationality, 2015

Proportion of total YoY change

China Other Asia(1) Gulf States(2) Other Russia

43% 19% 12% 5% 21% +32% +20% +18%

• 41%

+17%

Portfolio update: Premium outlets

Portfolio update: Developments

42

Leeds aerial VG pic?

Victoria Gate, Leeds Victoria Gate, Leeds Victoria Gate, Leeds

On site developments: Victoria Gate, Leeds

43

Creating the premium and aspirational shopping offer for the north of England

Portfolio update: Developments Under offer and advanced negotiations

83%

Size

35,400m2

Total project cost

£165m; 6.4% YoC

Completion

Q3 2016

Pre-lets exchanged

68%

On site developments: WestQuay Watermark, Southampton

44

Consolidating WestQuay and Watermark as the city’s leading leisure and retail destination

Under offer and advanced negotiations

89%

Size

17,000m2

Total project cost

£85m; 6.0% YoC

Completion

Q1 2017

Portfolio update: Developments Pre-lets exchanged

80%

Major developments: Croydon

45

2015

CPO Inquiry confirmed Acquisition 50% interest in Whitgift centre (total 75%) Revised design of enhanced three level scheme – capex refined Advance retailer discussions Bought further land interests

2016

Sign anchor commitments Submit detailed planning for enhanced scheme

Transforming South London’s retail and leisure offer

(1) Hammerson share Croydon Partnership retail

200,000m2

Cost to complete(1)

£650 - 700m

Earliest start

2017

Portfolio update: Developments

Major developments: Brent Cross

2015

Infrastructure planning consents approved Advanced tenant mix proposals May 2016 confirmed date for CPO inquiry Secured infrastructure funding to bring forward a new rail station

2016

CPO inquiry to be held Sign anchor commitments Work up detailed scheme design

Regenerating North London’s iconic retail destination

(1) Hammerson share

New CGI image to come

Incremental retail space

90,000m2

Cost to complete (1)

£475-550m

Earliest start

2017

Portfolio update: Developments 46

Major developments: The Goodsyard

47

2015

GLA support for the scheme Revised planning application submitted June 2015

• 25,000m2 additional

commercial space

• Revised office and

residential buildings design

2016

Planning determination scheduled March 2016 New employment, retail and commercial opportunities

Opportunity to create a new London village

(1) Hammerson share Size (gross external area)

270,000m2

Total Phase 1 cost to complete(1)

£140-160m

Earliest start

2017

Replace!!

Portfolio update: Developments

Conclusion

48

04

Proven strategy delivering consistent performance

49

Resilient business model Disciplined investment management Embedded growth Prime property

NAVPS (pence)

710

400 450 500 550 600 650 700 750 2011 2012 2013 2014 2015

+11%

CAGR +7.6% EPS (pence) DPS (pence)

26.9

10 15 20 25 30 2011 2012 2013 2014 2015

CAGR +8.7%

22.3

5 10 15 20 25 2011 2012 2013 2014 2015

CAGR +7.7%

+13% +9%

Questions

50

Disclaimer

51

Appendices

52

53

(1) As at 31 December 2015, including Irish loan portfolio

Property portfolio

£9.1 billion

Annual visitors

280 million

Retail space

2.2 million m2

Portfolio overview (1)

Hammerson invests in prime retail assets throughout Europe

UK shopping centres 34% France 20% UK Retail Parks 18% Premium

• utlets

14% Irish loan portfolio 8% Gross Asset Value

£9.1bn

UK shopping centres

£3.1bn

France

£1.9bn

UK Retail Parks

£1.7bn

Premium Outlets

£1.2bn

Ireland retail (loans)

£0.7bn

Other/ developments £0.5bn

Our assets

Other/ developments 6% Appendices

Household consumption

54

Source: Marketline analysis (using data from Eurostat, OECD and ONS)

• 15
• 10
• 5

5 10 15 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

United Kingdom France Ireland

Growth in household final consumption expenditure (%)

UK shopping centres 34%

France 20% UK retail parks 18% Premium

• utlets

14% Irish loan portfolio 8%

Tenant sales growth across the portfolio

55

(1) 2015 retail park footfall increase (2) 2015 Value Retail sales (3) Retail sales for Dundrum Town Centre, based on available data

Other/developments 6%

UK shopping centres

+1.3%

France shopping centres

+0.6%

Retail parks(1)

+4.2%

Premium outlets(2)

+11.0%

Ireland shopping centres(3) +6.0%

Appendices

Sales growth

2015 French sales overview

56

• 8.0%
• 6.0%
• 4.0%
• 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Appendices

Tenant sales growth in Hammerson France portfolio 2015 (%)

Operational statistics

57

(1) Retail sales on same-centre basis, includes all shopping centres (2) France data includes VAT

Appendices

Occupancy (%)

UK shopping centres UK retail parks France Devs & other Group

31 December 2015

98.3 98.4 96.9 91.0 97.7

30 June 2015

97.8 98.2 96.7 89.0 97.2

31 December 2014

98.1 98.5 96.6 91.3 97.5

UK shopping centres France

Sales(1)

+1.3% +0.6%

Footfall

+1.1% −0.6%

Rent:sales(2)

12.1% 1 1.1%

OCR(2)

19.2% 14.0%

Sales densities(2)

UK £/ft2 France £/ft2

2015

310-620 220-621

2014

290-590 200-610

2013

270-560 200-620

Positive uplift in rents for the group in 2015

58

(1) Including UK Other properties – principally assets held for development and non-core

Leasing vs previous passing Leasing vs ERV ERV growth Rent secured from new leases UK shopping centres

+8.8% +3.5% +2.8% £1 1.7m

UK retail parks

+7.7% +4.2% +1.3% £8.3m

France

+9.7% +1.5% 0.0% £7.2m

Group (1)

+9.5% +2.0% +1.6% £27.9m

Appendices

14.6% 13.3% 12.8% 11.8% 11.9% 10.9% 10.0% 11.3%

0% 5% 10% 15% 20% 25% 30% 2012 2013 2014 2015

Corporate expenses Operational costs

Cost:income ratio

59

Cost:income ratio (%)

26.5% 24.2% 22.8% 23.1%(1)

(1) Excluding car park costs (£9.3m in 2015) cost:income ratio would be 21.1%

Appendices

Recycling capital in 2015

60

Disposals Date of disposal

Value £m Above book value (1) Drakehouse retail park, Sheffield April 2015

62 4%

Bercy 2, Paris June 2015

47 1 1%

Grand Maine, Angers July 2015

45 16%

Monument Mall, Newcastle December 2015

75 1%

Kingston-upon-Thames land interest December 2015

12 1%

Villebon 2, Paris January 2016

1 16 16%

Total

357 9%

(1) Book value as at 31 December 2014

Appendices

On site and major developments

On site developments(1)

Lettable area m2 Potential completion Current value £m Estimated cost to complete(2) £m Estimated annual income(3) £m Let(4) %

Victoria Gate (Phase 1), Leeds 35,400 Q3 2016 116 68 11 62 WestQuay Watermark, Southampton 17,000 Q1 2017 38 56 5 80 Total 52,400 124 16

61

Major developments

Ownership % Lettable area m2 Earliest start Potential completion Estimated cost to complete £m Croydon town centre, South London 50 200,000 2017 2020/21 650-700 The Goodsyard, London E1(5) 50 270,000 2017 Phased 140-160 Brent Cross extension, London NW4 41 90,000 2017 2021 475-550 Total 560,000 1,265-1,410

(1) Group ownership 100% for all on site schemes (2) Incremental capital cost including capitalised interest (3) Incremental income net of head rents and after expiry of rent-free periods (4) Let or in solicitors' hands by income at 12 February 2016 (5) Cost reflects phase 1 only. Due to residential component of scheme, area is gross external and income is not applicable (6) € converted at £1 = €1.357

Appendices

Development pipeline opportunities

Scheme Lettable area m2 Key Facts Silverburn (Phase 4), Glasgow 50,000

• Consent granted in October 2015 for a masterplan for a future extension of existing centre
• Masterplan includes retail, hotel and leisure uses

Union Square, Aberdeen 27,800

• Extension of existing shopping centre for retail, leisure and catering. Including additional car

parking and a hotel and reconfiguration of part of existing centre

• Planning application submitted in February 2016

Victoria Gate, Leeds (Phase 2) 73,000

• Planning consent for retail-led scheme, including up to 2,700 car park spaces
• Freehold control of site obtained

WestQuay Watermark, Southampton (Phase 2) 58,000

• Outline planning consent for mixed-use scheme
• Council-owned land, with joint review of scheme under way

Oldbury, Dudley 10,900

• Planning submitted in January 2016 for new development

Orchard Centre, Didcot 10,000

• £50 million expansion of existing centre with M&S Food Hall anchor
• Planning approval in July 2015

Parc Tawe, Swansea 21,000

• Refurbishment and modernisation of existing retail park
• Planning dispute successfully appealed in September 2015

Italie Deux, Paris 13ème 5,100

• Retail extension of existing shopping centre
• Progressing necessary consents to enable start-on site

Les 3 Fontaines, Cergy Pontoise 24,500

• Retail and leisure extension as part of wider city centre project
• Submission of a number of consent applications and agreement with a number of co-owners

achieved in first half of 2015

• Awaiting confirmation of consents and final co-ownership agreements

SQY Ouest, Saint-Quentin-en- Yvelines 30,200

• Opportunity to reposition existing shopping centre, creating a leisure-led destination

Total 310,500

62 Appendices

Premium outlets overview

63

Value Retail Villages VIA Outlet centres Bicester Village, UK Kungsbacka, Gothenburg Kildare Village, Dublin Batavia Stad, Amsterdam Maasmechelen Village, Brussels Fashion Arena, Prague Wertheim Village, Frankfurt Festival Park, Majorca La Vallée Village, Paris Landquart, Zurich Ingolstadt Village, Munich Alcochete, Lisbon Fidenza Village, Milan La Roca Village, Barcelona Las Rozas Village, Madrid

Appendices

International fashion and luxury brands Mainstream fashion brand outlets Low-end discount outlets

Premium outlets

64

Value Retail brand sales (€m)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Value Retail

VIA Outlets <€2,000 €2,000–€10,000 €30,000+

Increasing sales densities €/sq m Segmentation of Outlet market

Fashion Arena, Prague

CAGR 17%

Hammerson’s investment in Value Retail

Holding companies 22% equity

Bicester Village

33 45

La Roca Village

23 35

Las Rozas Village

19 31

La Vallée Village

1 1 22

Maasmechelen Village

13 24

Fidenza Village

20 32

Wertheim Village

31 43

Ingolstadt Village

1 1

Kildare Village (2)

27 38

65

(1) Excludes €46m of additional loans secured against various Value Retail assets (2) Including acquisition of additional stake completed in January 2016

Village ownership via LPs (%) Total Village

• wnership (%)

Hammerson €58m(1) shareholder loan

Appendices

Premium outlets share of results

66 Appendices

Income statement 2015 2014

Value Retail £m VIA Outlets £m Total £m Value Retail £m VIA Outlets £m Total £m Profit for the year

159.3 13.1 172.4 109.9 (1.1) 108.8

EPRA adjustments

(142.2) (7.0) (149.2) (93.9) 2.0 (91.9)

Adjusted earnings of premium outlets

17.1 6.1 23.2 16.0 0.9 16.9

Interest receivable from Value Retail loans

5.3

• 5.3

5.8

• 5.8

Total contribution to adjusted profit

22.4 6.1 28.5 21.8 0.9 22.7 Balance sheet

Share of net assets

743.8 110.8 854.6 628.8 104.2 733.0

EPRA adjustments

59.9 6.8 66.7 31.9 4.0 35.9

EPRA adjusted investment

803.7 117.6 921.3 660.7 108.2 768.9

Investment in VR China (within Other investments)

4.8

• 4.8
• Loan to Value Retail

76.4

• 76.4

63.5

• 63.5

Total impact of balance sheet – EPRA basis

884.9 117.6 1,002.5 724.2 108.2 832.4

Our sustainability vision

67

2015 Highlights

To create retail destinations that deliver positive impacts economically, socially and environmentally

2016 Plans

• 4% reduction in Group CO2e

emissions intensity

• Four industry sustainability

awards

• Delivered net zero energy

EcoPod for Costa

• £2m saved through waste

management

• 3% reduction in electricity

demand in UK

• £174k savings in electricity costs
• Retained GRESB Green Star and

improved scores in all industry benchmarks

• £2m+ Community investment
• 6% Reduction in electricity

consumption

• 5% reduction in landlord water

intensity

• 3% reduction in CO2e

emissions

• 98% diversion of waste from

landfill

• Install renewable technology
• n one existing asset
• Update True Value of

Shopping Centres research

• Further senior management

sustainability training

Our sustainability vision

68

To create retail destinations that deliver positive impacts economically, socially and environmentally

Our 2010-2015 targets Our performance Our 2015 – 2020 ambitions

Reduce like-for-like carbon emissions by 20% v. 2010 baseline by 2015

• 20%

20% reduction in carbon emissions v 2015 baseline 45% of suppliers by value to be engaged with on sustainability, annually 88% Introduce refreshed sustainable supplier survey in 2016 in the UK and France and continue to improve supplier engagement

• n sustainability

Increase waste recycling to 85% by 2015 UK 76% France 50% 100% diversion from landfill in the UK, 98% in France Biodiversity action plans at all retail assets by 2015 32/41 in place Work with partners to trial pioneering, restorative approaches to biodiversity at six managed assets All employees to complete CR training biennially 59% employees trained 2015 100% of Hammerson employees employed for 12 months or more to receive sustainability training Reduce water consumption from 2010 by 12% by 2015 UK +28% France -29% Reduce landlord water intensity by 10%

Lease expiries and breaks as at 31 Dec 2015

69

(1) The amount by which rental income, based on rents passing at 31 December 2015, could fall in the event that occupational leases due to expire are not renewed or replaced by new leases. For the UK, it includes tenants’ break options. For France, it is based on the date of lease expiry. (2) The ERV at 31 December 2015 for leases that expire or break in each year and ignoring the impact of rental growth and any rent-free periods.

Rents passing that expire/break in ERV of leases that expire/break in Weighted average unexpired lease term Proportionally consolidated excluding premium outlets

2016 £m 2017 £m 2018 £m 2016 £m 2017 £m 2018 £m To break years To expiry years

Notes

1 1 1 2 2 2

United Kingdom Shopping Centres

21.5 9.3 24.3 26.2 9.5 22.9 6.2 8.1

Retail Parks

7.8 2.1 3.3 9.0 2.3 3.3 8.7 9.7

Other

2.4 1.0 1.9 3.0 1.1 1.4 9.3 10.4

Total

31.7 12.4 29.5 38.2 12.9 27.6 7.3 8.8

France

13.5 4.6 3.6 15.2 4.8 4.1 2.7 5.8

Total investment portfolio

45.2 17.0 33.1 53.4 17.7 31.7 6.0 8.0

Appendices

Rent reviews as at 31 Dec 2015

70

(1) Rents passing at 31 December 2015, after deducting head and equity rents, which are subject to review in each year (2) Projected rents for space that are subject to review in each year, based on the higher of the current rental income and the ERV as at 31 December 2015 and ignoring the impact of changes in rental values before the review date

Rents passing subject to review in ERV of leases to review in Proportionally consolidated excluding premium outlets

Outstanding £m 2016 £m 2017 £m 2018 £m Outstanding £m 2016 £m 2017 £m 2018 £m

Notes

1 1 1 2 2 2

United Kingdom Shopping Centres

26.8 9.5 12.5 19.2 30.8 10.2 13.4 20.8

Retail Parks

37.2 14.5 9.2 8.8 38.4 14.8 9.4 9.2

Other

4.9 0.9 0.8 0.5 5.2 0.9 0.9 0.5

Total

68.9 24.9 22.5 28.5 74.4 25.9 23.7 30.5

Appendices

Valuation data

71

(1) Excludes premium outlets

UK shopping centres UK retail parks France retail UK Other interests Total continuing portfolio True equivalent yield (%)(1) 31 Dec 2015

5.2 5.6 4.7 7.6 5.2

31 Dec 2014

5.4 5.6 5.3 7.2 5.5

Change (bps)

(20) (60) 40 (30)

ERV (£m) 31 Dec 2015

166.2 90.9 101.0 13.6 371.7

31 Dec 2014

160.8 87.4 107.0 13.4 368.6

Change (%)

3.3% 4.0% (5.6%) 1.5% 0.8%

Appendices

Components of valuation change

72

Note: The total portfolio movement includes the movement in the UK Other interests portfolio where valuations changed by a total of £1m during 2015

Components of valuation change in 2015 – total portfolio (£m)

127 (3) 161 287 67 24 (15) 77 1 (2) (29) 36 4 195 19 117 36 368

• 50

50 100 150 200 250 300 350 400 Yield Income Development & other Total UK shopping centres UK retail parks France Total Portfolio Developments Appendices

Tenants in administration

73

31 December 2015 % of passing rents 51 units in administration

1.1

4 units unoccupied

0.1

30 June 2015 52 units in administration

1.0

10 units unoccupied

0.3

31 December 2014 55 units in administration

1.0

13 units unoccupied

0.4

Appendices