FULL YEAR RESULTS TO MARCH 2014 3 JUNE 2014 www.londonmetric.com
AGENDA CHAIRMAN’S INTRODUCTION HIGHLIGHTS STRATEGY INVESTMENT ACTIVITY ASSET MANAGEMENT ACTIVITY FINANCIAL RESULTS OUTLOOK Q&A 2
HIGHLIGHTS
FINANCIAL HIGHLIGHTS 1 EPRA NAV Valuation uplift Reported profit 121p +11% £95.9m +8.5% £125.3m 2013: 109p 2013: loss £13.4m EPRA earnings EPRA EPS DPS LTV £26.4m +20% 4.2p +7.7% 7.0p 32% 2013: £22.0m 2013: 3.9p 2013: 7.0p 2013: 43% (1) Including share of joint ventures 4
OPERATIONAL HIGHLIGHTS Portfolio valuation Property total return T opped up initial yield £1,220m 17.0% 6.4% £95.9m uplift vs IPD 1 13.4% 2013: 6.3% Annualised rental income 2 Like-for-like rental growth Development pipeline £72.7m +16.3% 3.4% 1.2m sq ft 2013: £62.5m 2013: 3.5% 79% pre-let 3 (2) Contracted rental income £78.0m, including Islip development (1) IPD All Property Quarterly Universe (3) Weighted by rental income 5
STRATEGY
INVESTMENT STRATEGY Short-cycle Income Asset management development Strong Good income with Very attractive risk- cash flow growth opportunities adjusted returns Berkhamsted Christchurch Tamworth Out of town Occupier led Brackmills Distribution Leicester Islip 1 Opportunistic Moore House Carter Lane Non-core Crawley (1) 1 million sq ft DC pre-let to Top 25 retailer; construction of main works to commence later summer with practical completion targeted for summer 2015 7
PORTFOLIO HIGHLIGHTS £974m of investment activity £406m core acquisitions, NIY 7.6%, WAULT 14.3 years £397m commercial disposals, NIY 5.5%, WAULT 11.1 years £171m residential disposals, NIY 2.0% Occupancy 99.6% (2013: 94.5%) Investment portfolio 1 WAULT 12.7 years (2013: 11.6 years) 2 48 occupier transactions (2) Weighted average unexpired lease term – 2014: 11.8 years to first break; 2013: 10.8 years to first break (1) Investment portfolio as at 31 March 2014, excluding developments and residential 8
GROWING RENTAL INCOME (£m) Occupier transactions on existing space Islip development New rental income from acquisitions less disposals 90 1.5 80 0.8 5.3 -1.4 3.7 70 6.5 78.9 60 72.7 62.5 50 40 Mar 2013 Occupier Net new Mar 2014 PPE net new PPE lettings Letting up Rent roll transactions investment contracted investment in legals Carter Lane run-rate contracted rent roll rent roll 9
REPOSITIONING THE PORTFOLIO March 2013: Portfolio £1,217m March 2014: Portfolio £1,220m 10% 14% 29% 6% 37% 20% 59% 86% 8% core core 6% 10% 21% 7% 10% 22% DEVELOPMENT RETAIL LEISURE RETAIL DISTRIBUTION DISTRIBUTION OFFICE RESIDENTIAL 10
INVESTMENT ACTIVITY
PORTFOLIO ACQUISITIONS £175m DFS JV 1 £81m ODEON portfolio £28m Wickes portfolio 3 27 DFS stores, NIY 9.3% 10 multiplexes, NIY 7.2% 5 Wickes, NIY 7.2% WAULT 16.3 years WAULT 24.9 years, annual Purchase WAULT 10.1 years uplifts 1-5% RPI Sold10 DFS stores 2 for Simultaneously re-geared 3 leases £47.1m, NIY 8.6% Sold Dudley for £7.7m, NIY Yield on cost 6.8% 6.0% Sold further 3 stores for WAULT increased to 19.4 years £17.1, NIY 7.8%; PPE Exchanged Huddersfield for Sold Oxford for £12.4m, £15.2m, NIY 6.1%; PPE NIY 5.3% Bought 7.2 % Sold 6.0% Bought 9.3% Sold 8.4% Bought 7.2 % Sold 5.3% (1) LondonMetric share 30.5% (2) 8 freehold stores sold in the period: Adwick le Street, Alfreton, Carcroft, Matlock, Rotherham, Scunthorpe, Stoke on Trent, Warrington for £43.4m (LMP share £13.2m) with (3) LondonMetric share 33.3% long leaseholds at Adwick le Street and Hull sold PPE for £3.7m (LMP share £1.1m) 12
DISTRIBUTION ACQUISITIONS £197.2m, average NIY 7.2%, WAULT 10.6 years 1 Post period end Rotherham acquisition of £10.3m Birmingham £10.1m, Daventry £36.0m, NIY 7.9%, WAULT 11.0 years NIY 6.5%, WAULT 9.6 years Leicester £5.2m, Sheffield £32.2m, NIY 8.3%, WAULT 7.0 years 2 NIY 7.6%, WAULT 9.6 years 4 Crick £17.9m, Swindon £22.1m, NIY 7.0%, WAULT 15.0 years 3 NIY 6.5%, WAULT 13.6 years 5 Bedford £51.7m, Doncaster £13.0m, NIY 7.0%, WAULT 9.4 years NIY 7.6%, WAULT 11.8 years 6 Brackmills £9.0m, Rotherham £10.3m, NIY 8.8%, WAULT 0.3 years NIY 6.0%, WAULT 13.9 years (1) 8.8 years to first break (2) 4.0 years to first break (3) 10.0 years to first break (4) 7.3 years to first break (5) 8.6 years to first break (6) 6.9 years to first break 13
RETAIL ACQUISITIONS £49.0m 1 , average NIY 7.4%, WAULT 8.8 years 2 Ipswich £10.4m Dartford £3.2m 4 MIPP NIY 6.5%, WAULT 10.9 years NIY 6.6%, WAULT 10.3 years Milton Keynes & Cardiff £25.8m Hertford £5.4m 5 MIPP NIY 8.0%, WAULT 6.8 years NIY 5.9%, WAULT 11.6 years Eastbourne £3.0m 3 Bridgwater £1.2m 6 NIY 7.2%, WAULT 11.5 years NIY 6.8%, WAULT 18.8 years MIPP MIPP (1) LondonMetric at share, gross acquisitions £74.5m (2) 8.7 years to first break (3) LondonMetric at share, gross acquisition £9.0m (4) LondonMetric at share, gross acquisition £9.6m (5) LondonMetric at share, gross acquisition £16.3m (6) LondonMetric at share, gross acquisition £3.7m 14
DISPOSALS: COMMERCIAL £397.1m 1 of commercial disposals, average exit yield 5.5% Post period end disposals of £33.8m, average exit yield 5.6% Distribution portfolio £138.4m 2 Fleet Place £112.5m Leatherhead £75.8m Berkhamsted £12.3m NIY 5.0%, WAULT 9.2 years NIY 5.1%, WAULT 12.0 years NIY 5.9%, WAULT 9.8 years NIY 4.6%, WAULT 19.5 years Sheffield & Mansfield £19.2m Bedford – Midland Rd £6.5m Congleton £16.4m Two ODEON multiplexes 5 £22.9m NIY 6.8%, WAULT 12.9 years 3 NIY 6.2%, WAULT 9.8 years NIY 5.8%, WAULT 8.4 years 4 NIY 6.0%, WAULT 24.4 years (1) LondonMetric at share, gross disposal proceeds £544.6m (2) LondonMetric at share, gross disposal proceeds £247.6m (3) 12.2 years to first break (4) 7.0 years to first break (5) Dudley and Huddersfield 15
DISPOSALS: RESIDENTIAL £167.0m 1 of disposals, across 331 units, average exit yield 1.9% £18.1m of additional sales agreed, post period end, across 32 units Only 3 units left at Battersea; remaining equity of £2.7m Clerkenwell Quarter 2 North Stand, Highbury 2 Bridges Wharf, Battersea 2 Clapham Rd, Stockwell 2 107 units for £61.2m 48 units for £26.6m 74 units for £29.8m 134 units for £67.5m Equity released £59.4m Equity released £15.8m Equity released £16.6m Equity released £38.0m Moore House joint venture 3 Since March 2014: 10 units sold, 5 under offer releasing £4.0m of equity 134 units remaining to release £48.0m of equity (1) LondonMetric wholly owned portfolio (2) Wholly-owned residential sold to date (3) Held in JV with Green Park & PSP, LondonMetric share 40% 16
ASSET MANAGEMENT ACTIVITY ASSET MANAGEMENT ACTIVITY
ASSET MANAGEMENT 48 occupier transactions Area Uplift % above WAULT No. (sq ft) (£m) ERV to expiry New lettings 30 1,470,800 11.2 2.5 19.1 Re-gears 9 748,400 0.4 3.3 12.3 Rent reviews 9 107,500 0.2 8.0 - T otal 48 2,326,700 11.8 3.2 16.2 Area % above WAULT No. (sq ft) Rent (£m) ERV to expiry Retail 40 482,800 6.2 7.2 13.8 Distribution 3 1,443,800 7.1 0.4 22.7 Office 5 400,100 12.5 2.8 15.1 T otal 48 2,326,700 25.8 3.2 16.2 18
RE-GEAR CASE STUDIES Pre re-gear stats: Birmingham DC Brackmills DC Wickes portfolio 1 Marlow International NIY 7.9% 8.8% 7.2% 7.7% WAULT 11.0 years 0.3 years 10.1 years 6.8 years Re-gear stats: YOC 7.5% 8.0% 6.8% 7.2% WAULT 21.0 years 10.0 years 19.4 years 12.3 years (1) LondonMetric share 33.3% 19
COMPLETED DEVELOPMENTS Berkhamsted Carter Lane Bishop Auckland Phase 2 Area 22,500 sq ft 127,600 sq ft 27,300 sq ft Pre-lets 84% pre-let to M&S, Costa 72% pre-let to MFS, SEB 77% pre-let to Home Bargains, TKMaxx Lease lengths 20-year lease, no breaks 20 & 15 year leases 15 year leases Rent secured £0.5m p.a. £4.9m p.a. £0.3m p.a. Acquisition yield on cost 7.7% 5.8% 9.1% Valuation yield 4.6% 4.8% 5.7% Sale/PC Sold, completion May 2014 PC May 2014 PC April 2014 Disposal yield 1 3.9% rising to 4.6% - - (1) Based on disposal price of £12.3m 20
ISLIP DISTRIBUTION CENTRE DEVELOPMENT Site assembly across 70 acres 1,062,000 sq ft, 100% pre-let £5.3m initial rent roll with 1.5% annual uplifts 25-year lease with no breaks Onsite enabling works Yield on cost 6.9% Construction to commence Aug-14 Practical completion Aug-15 21
ISLIP DISTRIBUTION CENTRE DEVELOPMENT 22
DEVELOPMENT ACTIVITY Rent YOC 1 Valu’n roll on PC 2 yield Status Location Sector Sq ft (£m) (%) (%) Completed Carter Lane Office 127,600 72% pre-let, 20% in detailed negotiations 6.3 5.8 4.8 Berkhamsted Retail 22,500 84% pre-let to M&S, Costa 0.6 7.7 4.6 BA Ph 2 Retail 27,300 77% pre-let, 23% in detailed negotiations 0.4 9.1 5.7 Total completed 177,400 7.3 6.1 4.9 Committed Islip Distrib 1,062,000 100% pre-let, new 25 year lease, 1.5% annual uplifts 5.3 6.9 5.6 Leeds Retail 120,000 38% pre- let, 18% in solicitors’ hands; start Sep -14 2.7 7.8 6.3 Total committed 1,182,000 8.0 7.2 5.8 Conditional St Austell Retail 103,000 Planning re-submission anticipated late summer 2014 Derby Retail 22,000 50% pre-agreed to M&S for Simply Food format Swindon Distrib 150,000 100% pre-agreed extension with Oak Furniture Land (1) Yield on cost (2) Practical completion 23
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