Annual General Meeting 21 July 2015 www.britishland.com @britishlandplc
Introduction John Gild ersleev e Chairm an
Long term outperformance Outperforming peers and the market on TSR Total shareholder return, year to 31 March % 140% 120% 100% 80% 60% 40% 20% 0% 1 year 3 years 5 years British Land Average (key peers) FTSE 100 Note: Key peers include Land Securities, Derwent London, Great Portland Estates, Hammerson, Intu and SEGRO 3
2015 financial highlights 48 % 2-year total accounting return FY to 31 March 2015 Change NAV per Share 829p +20.5% Valuation £13.6bn +12.1% Total Property Return 18.4% Underlying Profit Before Tax £313m +5.4% Dividend per Share 27.7p +2.5% Total Accounting Return 24.5% 4
Exceptional leasing performance 10 % Investment lettings/ • Strong leasing volumes renewals vs ERV • Letting space on attractive terms • Good quality and diverse mix of occupiers • Strengthening rental trend; strong growth in Offices, notable improvement in Retail FY to 31 March 2015 Retail Office Total Lettings / renewals (000 sq ft) 1,137 810 1,947 Lettings / renewals under offer (000 sq ft) 348 152 500 Investment lettings / renewals vs ERV 8.7% 10.8% 10.0% Occupancy 98.5% 98.1% 98.3% LFL occupancy +30bps +730bps +310bps ERV growth 2.5% 8.0% 4.6% 5
Office leasing – exceptional progress at Leadenhall 45 £90 psf 44 43 42 41 • Nearly 1m sq ft of lettings/renewals 40 39 38 Rental high 37 • Office occupancy 98.1% 36 35 34 • Leadenhall c.90% let/under offer 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 Let prior to 2014/15 13 12 11 Let in 2014/15 10 9 8 Under offer 7 6 5 4 In negotiations 3 Reception and Restaurants 2 1 6
Widening the appeal of Broadgate • £20 million redevelopment of Broadgate Circle completed • 5 Broadgate completed • Planning submitted on Blossom Street, Shoreditch and 1 Finsbury Avenue 7
Facebook at Regent’s Place – a strong endorsement of the campus • Facebook’s largest European hub • Total space over 150,000 sq ft • Rents nearly doubled 8
Making progress at Paddington Central • On site at 4 Kingdom Street • £210m acquisition of One Sheldon Square 9
Retail & Leisure leasing • Over 1m sq ft lettings/renewals • Further 348,000 sq ft under offer • Almost full occupancy at 98.5% 10
Operational metrics remain strong in retail Retailer same store sales Average dwell time Average LFL spend + 4.5 % + 16 % annualised + 3.7 % Source: Springboard Source: BL consumer surveys Source: BL consumer surveys Footfall + 1.9 % +5% Occupancy remaining affluent high at 98 .5 % ahead of market by shopper visits 290 bps Source: BL consumer surveys, CACI Source: Springboard and Experian Source: BL 11
Investment driving performance – Meadowhall • £3m upgrade attracting premium new brands • £50m refurbishment starting September 12
Investment driving performance – Ealing Broadway • Acquired two adjoining properties • Phase 1 refurbishment completed • Submitted planning for wider refurbishment 13
£2.4bn investment activity – broadly balanced £960m acquisitions + £210m development capex £1.3bn disposals £135m Surrey Quays £123m additional Leisure Park superstore sales £245m further non core retail disposals £137m office disposals £210m 1 Sheldon Square £370m residential sales £169m HUT shopping parks £733m Tesco Property Exchange acquired 3 shopping parks & 3 shopping centres sold 21 standalone foodstores 14
Conclusion • Portfolio + 38% in 5 years • Gearing reduced to 36.5% • Increased London focus • Offices weighted towards West End • Concentrated in 3 campuses • Retail focused on large, multi-let assets, matching the way people shop • Well positioned for long term trends 15
Introduction Chris Grigg Chief Executive
Macro trends driving our strategy Transforming impact Population growth of technology and urbanisation Importance of Sustainability infrastructure Globalisation 17
Creating great environments 18
Growing in London and the south east 2010 London investment Ealing Broadway The Leadenhall Building 2015 London & South East Paddington Central Other 19
Investing around infrastructure £ 3 bn Assets close to Crossrail stations Crossrail route Blossom Street, Shoreditch Ealing Broadway The Leadenhall Building Paddington Central Broadgate Marble Arch House Clarges, Mayfair Regents Place 10 Portman Square 20
Customer Orientation – understanding our customers Retailer sales data on nearly Data from over 125,0 0 0 90 % 9 m pa shopper surveys completed of multi-let assets hits to our websites Accurate footfall data from all Cross-referencing Understanding local Wi-fi data, social demographics and media, asset of our multi-let catchments website traffic assets 21
Significant development pipeline • Highly successful development programme since 2010 • Completed projects generated over £1bn of profit; an IRR of over 30% • Expected to generate £500m with around £330m still to come Sq Ft Total cost £m Estimated Profit m £m Completed developments (since 2010) 3.2 1,120 1,100 Committed/Near-Term Projects 2.4 1,500 500 22
Developments under construction 4 Kingdom Street Retail extensions Glasgow Fort, retail extension Whiteley, leisure extension Clarges Mayfair The Hempel 23
Near term pipeline 5 Kingdom Street Drake Circus, Plymouth Blossom Street, Shoreditch 100 Liverpool Street 24
Canada Water Masterplan One of London’s largest regeneration opportunities Canada Water 46 acres London Site controlled by Opportunity British Land with area the London Borough of Southwark Well developed local infrastructure Up to 1 m sq ft Retail, Leisure, Culture & Education Can create a new environm ent in Up to tune with how 4 m sq ft people will live, Up to residential work and shop 2 m sq ft of employment 25
Capital efficiency – strength of debt metrics Proportionally Consolidated 31 Mar 2014 31 Mar 2015 Loan to Value (LTV) 40% 35% Average Interest Rate 4.1% 3.8% Interest Cover 2.5x 2.6x Average Maturity of Drawn Debt (years) 8.7 8.7 Group 31 Mar 2014 31 Mar 2015 Loan to Value (LTV) 29% 28% Available undrawn facilities £2.0bn £1.2bn Average Interest Rate 3.5% 3.3% Interest Cover 3.2x 3.0x 26
Outlook • Outlook broadly in line with first half • Yields have tightened further • Some political uncertainty remains • Expect interest rates and inflation to remain low • Rental growth has strengthened • Strong growth in offices • Clearer growth trends in retail 27
Summary Meadowhall £50million refurbishment 28
Q&A
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