FULL YEAR RESULTS TO MARCH 2015 2 nd June 2015 - - PowerPoint PPT Presentation

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FULL YEAR RESULTS TO MARCH 2015

2nd June 2015

AGENDA

2

• Highlights
• Strategy
• Financial
• Investment
• Asset Management
• Outlook
• Questions

HIGHLIGHTS

Andrew Jones

FINANCIAL HIGHLIGHTS

4

31 March 2015 31 March 2014 Change Reported Profit £159.5m £125.3m +27% Valuation Movement £118.4m £95.9m +23% EPRA NAV per share 141p 121p +16% T

• tal Accounting Return

21.7% 16.5% +520 bps EPRA Earnings per share 6.6p 4.2p +57% Dividend per share 7.0p 7.0p

• Special Dividend per share

2.0p n/a

KEY PORTFOLIO HIGHLIGHTS

5

31March 2015 31 March 2014 Change Portfolio Valuation £1,400.4m £1,219.8m +15%¹ Contracted Rental Income £85.6m £78.0m +9.7% EPRA T

• pped Up NIY

5.8% 6.4% 65 bps Like for like income growth 2.9% 3.4%

• 0.5%

Occupancy 99.7% 99.6% +0.1% WAULT (years to expiry) 13.1 12.7 +0.4 years T

• tal Property Return

17.5% 17.0% +50 bps

¹ like for like valuation movement 9.2%

OPERA TIONAL HIGHLIGHTS

6

£598m Investment Activity £309m acquisitions – NIY 6.2% £289m disposals – NIY 5.2% £51.0m profit on cost

• £29m capital profit on Carter Lane - driving special dividend

50 Asset Management transactions 2.6m sq ft – 12.4% above previous passing rent; 6.6% above ERV Income growth of £2.6m pa Like for like income growth of 2.9% 3.1m sq ft of development 2.0m sq ft of committed developments

• Primark, Islip – PC in September 15
• HUT, Warrington – PC in October 15

1.1m sq ft of pipeline - planning submission imminent at Bedford for 750,000 sq ft Effectively Financed Increased operational flexibility with new £400m unsecured facility

• Cost of borrowing reduced by 50 bps to 3.4%
• Debt maturity increased to 6.2 years

Loan to Value 36% 100bps NIY arbitrage

STRATEGY REVIEW

Andrew Jones

OUR CORE SECTORS

Focussed on winning sectors meeting occupiers’ needs

8

March 2015 40% 35% 9% 6% 5% 5%

DEVELOPMENT RETAIL LEISURE DISTRIBUTION RESIDENTIAL OFFICE 1 Distribution Portfolio valuation: £656.9m Total return: +20.0% NIY: 5.4%¹ Ave rent £5.40 psf Occupancy: 100%, WAULT: 12.9 years 2 Retail Portfolio valuation: £523.5m Total return: +17.6% NIY: 6.0%¹ Ave rent £16.50 psf Occupancy: 98.5%, WAULT: 12.3 years

£1,400m

¹ EPRA Topped Up Yield

• 1. Core stretch assets will have strong real estate fundamentals, good income characteristics & high occupier contentment in sectors where we have expertise

INVESTMENT STRA TEGY

9

Income

Strong and sustainable

Asset management

Grow, strengthen and lengthen income

Short-cycle development

Refurbish, redevelop and extend

Distribution Retail

Occupier led

Core Stretch1

Opportunistic Leicester Newark Odeon Southampton Dagenham Kirkstall, Leeds Primark, Islip

FINANCIAL REVIEW

Martin McGann

INCOME ST A TEMENT

11

31 March 2015 31 March 2014 % Change Reported Profit £159.5m £125.3m +27.3% Net rental income £57.6m £51.3m +12.3% Share of joint venture income £9.0m £3.1m +190% Management fees £2.2m £0.8m +175% Administrative costs £(12.5)m £(13.5)m

• 7.4%

Finance costs £(15.4)m £(15.4)m

• Other
• £0.1m
• EPRA earnings

£40.9m £26.4m +55% EPRA EPS 6.6p 4.2p +57% DPS 7.0p 7.0p

• Special Dividend

2.0p

72.7 66.3 75.8 84.4 84.4 77.1 90.5 5.3 1.8 13.5 14.8 9.8 1.2 2.5 13.4 4.5 3.6

40.0 50.0 60.0 70.0 80.0 90.0 100.0

DELIVERING INCOME GROWTH

12

(£m)

Development Activity

Mar 14 contracted rent roll Net occupier transactions & new space Acquisitions Mar 15 Contracted net income Activity in legals PPE net investment June 15 Annualised Run Rate Disposals

BALANCE SHEET

Statutory

13

31 March 2015 31 March 2014 Property portfolio £1,164.1m £1,030.6m Joint ventures £148.4m £109.0m Cash £50.6m £78.4m Bank debt (£465.5m) (£415.5m) Other net liabilities (£27.4m) (£46.6m) Net Assets £870.2m £755.9m EPRA Adjustments £7.0m £1.1m EPRA Net assets¹ £877.2m £757.0m EPRA NAV per share 141p 121p

• 1. Excludes fair value of derivatives

MOVEMENTS IN EPRA NAV

14

NAV per share (p)

121.0 120.6 121.6 140.6 6.6 7.0 1.0 12.3 6.7 116.0 120.0 124.0 128.0 132.0 136.0 140.0 144.0

EPRA NAV Mar-14 EPRA Earnings Dividend Revaluation EPRA NAV Mar-15 Other

Management Activity

DEBT METRICS

Financing Effectively

15

• Bank debt of £465.5m (£563.0m incl JVs¹)
• New £400m² unsecured RCF - replaced five secured debt facilities of £269.3m
• New 7 year £196m secured Helaba facility
• New 5 year JV facilities with PBB and M&G
• Average interest rate today of 3.4% vs 3.9% in March 2014 - 80% hedged
• Average maturity increased 2.5 years to 6.2 years
• Net gearing 36% vs 32% in March 2014

¹ LMP share ²£100m additional flexibility

INVESTMENT REVIEW

Valentine Beresford

¹ LM Share ² PPE Activity – 4 Acquisition £16.0m (5.8%); 3 Disposals £41m (5.0%)

INVESTMENT ACTIVITY SUMMARY

17

Number of transactions £m¹ NIY WAULT Acquisitions 20 £309m 6.2% 14.8 yrs Retail 14 £100m 6.3% 13.6 yrs Distribution 6 £209m 6.1% 15.3 yrs Disposals 16 £289m 5.2% 13.7 yrs Retail 10 £106m 6.2% Non Core (Office & residential) 6 £183m 3.4% T

• tal Activity

36 £598m + 100 bps +1.1 yrs Post Period End Activity² 8 £57m

RECYCLING CAPIT AL

Recycling out of mature assets

18

Harlow £37.2m 4.7% NIY Sold Apr15 (PPE) Brackmills Bishop Auckland Lichfield Londonderry £14.4m 5.5% NIY Sold Apr 15 (PPE) £23.85m 5.3% NIY Sold Nov 2014 £13.3m 5.5% NIY Sold Apr 2015 (PPE) £18.0m 7.3% NIY Sold March 15

2 disposals - £33.0m¹, NIY 5.0% Fully executed asset management plan

Brackmills Travis Perkin’s lease extended from 3 months to 10 years Harlow 9 year lease surrendered and relet on 25 year lease to Brake Brothers

Profit on cost £8.3m (34.1%) 11 disposals - £112.9m¹, NIY 6.1% Asset management plans completed

Redevelopment of Bishop Auckland 20 leasing initiatives undertaken

Profit on cost £16.4m (18.4%) Retail Park Sales Distribution Sales

¹ Including post period end

£9.0m at Share £6.7m at Share £18.6m at Share

ACQUISITION ACTIVITY

Focussed on Distribution Acquisitions

19

Newark

Dixons Carphone, Newark Acquired Sept 2014 £68.5m (NIY 6.4%) £4.5m rental income; WAULT 18.8 years

Croydon

Tesco dark store, Croydon Acquired Dec 2014 £21.1m (NIY 5.5%) £1.2m rental income; WAULT 5.8 years

Retail

10 convenience led retail assets – incl post period end £49.7m (NIY 6.0%) 70% let to M&S Simply Food and Aldi £3.1m rental income; WAULT 15.9 years

CASE STUDY: DAGENHAM

20

Dagenham – A13

Eddie Stobart Logistics, Dagenham Acquired Jan 2015 £56.5m (NIY 5.1%) £3.0m rental income; WAULT 16.5 years Asset management opportunity to work in partnership with occupier Strategically located adjacent to A13 and HS1 railway line c.£15m identified capital expenditure Delivering c.7% yield on cost Anticipated delivery 2017

A13 Railway line

ASSET MANAGEMENT REVIEW

Mark Stirling

ASSET MANAGEMENT ACTIVITY

22

No. Area (000 Sq Ft) Uplift (£m) % above ERV % above previous rent LFL rental growth WAULT (Years) New Lettings & Regears 30 500 £2.0m 14.6% 15.2% 1.9% 16.2 Rent Reviews 20 2,133 £0.6m 4.2% 3.2% 1.0%

• FY T
• tal

50 2,634 £2.6m 6.6% 12.4% 2.9% Asset management activity delivered 10% income return on capital expenditure¹

¹ £10.9m asset management capital expenditure

PROPERTY PERFORMANCE

23

• ERV growth 3.5% v IPD 3.2%
• WAULT 13.1 years v IPD 11.3 years¹
• 35% of capital return through management activity

T

• tal Return

Income Return Capital Return FY to March 15 LM IPD LM IPD LM IPD Distribution 20.0 21.4 6.0 5.7 13.2 14.9 Retail 17.6 13.5 6.3 5.3 10.7 7.8 Core Portfolio 18.8 16.6 6.2 5.6 11.9 10.6 All Property 17.5 17.1 5.8 5.1 11.1 11.5

¹ WAULT incl breaks 12.3 years v IPD 10.5 years

CASE STUDY: WORKING IN PARTNERSHIP

Convenience Sector

24

M&S

5 investment deals on 65,600 sq ft plus asset mgmt initiative 4 let on 20 year, contracted uplifts Total income of £1.3m; WAULT 19.0 years Yield on cost of 6.3%¹ Two further deals in legal's

Aldi

6 deals over the year on 97,600 sq ft Let on 20 year, RPI linked leases £1.5m rental income; WAULT 18.9 years Yield on cost of 5.6% A further deal in legal's

¹ Includes asset management initiative at Tonbridge

COMMITTED DEVELOPMENT

£112m capital expenditure delivering 7.1% yield on cost

25

Islip Distribution Centre – 1,062,000 sq ft 100% pre let to Primark Acquired yield on cost: 6.8% Rent £5.3m pa on 25 year lease with 1.5% annual uplifts Construction on site - completion September 2015 Omega, Warrington – 690,000 sq ft 100% pre let to The Hut Group Funding yield: 7.5% Rent £3.8m pa on 15 year lease Construction on site – completion October 2015

Islip Warrington

FUTURE PIPELINE

£76m capital expenditure delivering 7.4% yield on cost

26

Planning submission imminent for 750,000 sq ft scheme 7.5 miles from J13 of M1 motorway Prospective rent: £4.4m - anticipated yield on cost 7.6% Completion estimated 2017

Bedford

Planning secured for 300,000 sq ft distribution unit 2 miles from J15 M6 Established location with nearby

• ccupiers incl. Dunelm, Sainsbury,

M&S Completion estimated 2017

Stoke In Solicitors Hands

Currently in solicitors hands on further retailer led opportunities

OUTLOOK

Andrew Jones

RET AIL MARKET OUTLOOK

28

• UK consumer conditions are the strongest for over 10 years
• Recession & technology is quickly changing consumer mind-sets
• click & collect continues to grow
• accelerating retailers ‘right-sizing’ strategies…….at last!
• Asset performances continue to ‘polarise’
• convenience and value retail is ‘winning’
• legacy retail is challenged
• Occupier demand is strengthening
• market rents are improving but income still set off 2005/7 ‘high watermarks’

DISTRIBUTION MARKET OUTLOOK

29

• Distribution & fulfilment becoming more important than stores
• Infrastructure is key to efficient distribution of goods
• consumer is demanding same/next day delivery
• delivery reliability is critical for brand loyalty
• Availability is at its lowest point since records began
• retailers account for 66%¹ of distribution demand
• Demand & supply dynamics favourable for rental growth
• new ‘benchmark’ rents are set on new development
• “Sheds are the new shops”

¹ Source: JLL

INVESTMENT MARKET OUTLOOK

30

• Strong investor appetite supported by economic outlook
• Structural changes from occupiers is creating winners and losers
• Investor demand is polarising to assets that will generate organic income growth
• Long dated income remains highly attractive in low interest rate environment
• Valuations to date driven by yield shift
• Income growth needed to support future value increases
• Pricing remains largely rational……………but there are exceptions!

SUMMARY

31

1 Investing in Winning Sectors Core sectors of distribution and retail Reflecting modern day shopping behaviour 2 Creating Opportunities Right asset picks & invest to create value Strong occupier relationships creating opportunities Increased focus on development 3 Driving Income & Value Accretive acquisitions & unemotional recycling Drive contracted income from £85.6m to £90.5m Invest in our development pipeline 4 Financing Effectively Increased operational flexibility from unsecured facility Continue to drive business efficiencies 5 Delivering Performance Total shareholder returns through: NAV progression Dividends Underlying income growth

QUESTIONS?

APPENDICES

TOP 10 TENANTS1,2

34

(1) Investment portfolio as at 31 March 2015 (2) Gross rental income based on annualised rents (3) Market capitalisation as at 28 May 2015 (4) Market capitalisation of parent Kingfisher (5) Market capitalisation of parent Home Retail Group (6) Market capitalisation of parent Associated British Food

T enant Rent (£m pa) % of total rent Market cap (£m)3 9.3 11.0 22,9686 5.7 6.8 5,310 4.6 5.4 595 4.5 5.4 N/A 4.0 4.8 1,3235 4.0 4.7 9,815 3.8 4.5 N/A 3.6 4.2 8,6894 3.2 3.8 5,270 3.0 3.5 N/A T

• tal

45.7 54.1 Other commercial 38.8 45.9% Residential 1.1 T

• tal

85.6 100.0

RET AIL MARKET

Consumer habits have changed supported by online and more frequent top up shops

35

Share of online retail sales to grow to 15.7% by 2019 from 7.1% in 2009 Online sales grown consistently by c.£3bn p.a. since 2005 – forecast to grow at same rate Online growth is stable in absolute terms 26 million households received c. 1 billion parcels in 2014 Next day delivery is up 18% year on year

Internet Only Convenience

Convenience food market share grown from 14.6% to 17.8% in last 5 years Sector expected to grow 5% p.a., significantly ahead of all retail sales growth forecasts New entrants (Aldi, Lidl, B&M etc) are taking sizeable market share Aldi & Lidl account for c.9.2% of UK grocery market Marks & Spencer Simply Food to grow stores by 250

Omni Channel

Annual online growth for omni channel retailers

• utstripped pure plays in 2014 (15% v 13%)

Internet sales make up c.30% of established omni channel retailers (eg Dixons Carphone = 29%; John Lewis = 25%; Argos = 44%) Established omni channel retailers seeing store sales fall with internet sales rising (eg John Lewis) The need for physical remains – click & collect and internal showrooming (eg 32% of all Argos sales & 54% of John Lewis

• nline sales through click & collect)

Other retailers re-positioning their portfolio (eg Mothercare total UK sales broadly static, but UK store space reduced 4.5% (32 stores) & online now 30%)

Sources: Javelin, IMRG, Verdict, Experian, Mintel, Company disclosures

INVESTMENT YIELDS

36

4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% Retail - good secondary RW - prime restricted solus RW - prime restricted RP RW - secondary Distribution - prime Industrial - good secondary

Peak yields Trough yields Mean yields Current yields 1 StdDev

Source: CBRE, April 2015 – yields assume rack rented 15 year leases let to strong covenants with open market rent reviews

INVESTMENT ACTIVITY Acquisitions

37

• No. of

Price LMP share NIY WAULT H1 Sector assets Date (£m) (£m) (%) to expiry to 1st break Rotherham Distribution 1 13-May-2014 10.3 10.3 6.0 13.9 13.9 Llanelli Retail 1 03-Jul-2014 12.8 4.3 6.9 14.7 14.7 Isle of Man Retail 1 04-Jul-2014 5.2 5.2 7.9 7.2 6.2 Birkenhead Leisure 1 05-Aug-2014 5.5 5.5 7.7 15.0 15.0 Liskeard Retail 1 19-Sep-2014 9.0 3.7 6.2 12.8 12.8 Bangor Retail 1 29-Sep-2014 3.4 3.4 7.0 9.3 9.3 Newark Distribution 1 30-Sep-2014 68.5 68.5 6.4 18.8 18.8 Mipp Equalisation Retail

• 23.4

23.4 6.2 14.3 14.1 Subtotal 7 138.1 124.3 6.5 16.0 15.9 H2 Guisborough Retail 1 03-Oct-2014 5.3 5.3 5.8 18.3 15.0 Hull Retail 1 04-Nov-2014 3.1 3.1 5.8 15.0 15.0 Leicester Distribution 1 12-Nov-2014 5.2 5.2 6.4 5.8 5.8 Totton Retail 1 18-Nov-2014 8.8 4.2 5.9 8.9 8.9 Warrington Distribution 1 17-Dec-2014 47.5 47.5 7.5 15.0 15.0 Croydon Distribution 1 17-Dec-2014 21.1 21.1 5.5 5.8 5.8 Grimsby Retail 1 12-Jan-2015 3.7 1.9 7.3 20.0 15.0 Hemel Hempstead Retail 1 14-Jan-2015 12.2 6.1 6.1 10.3 10.3 North Shields Retail 1 19-Jan-2015 13.1 6.5 6.2 9.1 7.1 Dagenham Distribution 1 23-Jan-2015 56.5 56.5 5.1 16.5 16.5 Warrington Retail 1 09-Feb-2015 6.6 6.6 5.5 16.3 16.3 Ferndown Retail 1 29-Mar-2015 5.4 5.4 5.2 20.0 20.0 Liverpool Retail 1 31-Mar-2015 8.2 8.2 5.5 17.6 17.6 Mipp Equalisation Retail

• 7.0

7.0 6.1 14.0 13.8 Subtotal 13 203.7 184.6 6.0 14.0 13.8 TOTAL 20 341.8 308.9 6.2 14.8 14.6

INVESTMENT ACTIVITY Disposals

38

• No. of

Price LMP share NIY WAULT H1 Sector assets Date (£m) (£m) (%) to expiry to 1st break DFS – Suite Portfolio Retail 2 25-Apr-2014 3.7 1.1 8.5 16.0 16.0 Berkhamstead Retail 1 30-May-2014 12.5 12.5 3.8 19.6 19.1 Huddersfield Leisure 1 04-Jun-2014 15.2 15.2 6.1 24.4 24.4 Forest House Office 1 21-Aug-2014 12.9 12.9 6.7 14.8 14.8 Scarne Retail 1 08-Sep-2014 1.4 1.4 7.0 7.5 7.5 Elm Park Court Office 1 17-Sep-2014 3.6 3.6 11.7 1.0 1.0 DFS – Chesterfield Portfolio Retail 3 29-Sep-2014 17.1 5.2 7.8 16.0 16.0 Residential - Various Residential 38

• 23.6

20.6 2.4

• Subtotal

48 90.0 72.5 5.2 14.3 14.2 H2 Bristol Retail 1 18-Nov-2014 8.1 8.1 7.7 10.5 8.7 Milton Keynes Retail 1 01-Dec-2014 21.8 21.8 6.1 8.7 8.7 Wick Retail 1 02-Dec-2014 8.1 8.1 8.0 8.5 8.0 Bishops Auckland Retail 1 11-Dec-2014 23.8 23.8 5.3 11.0 9.4 Carter Lane Office 1 16-Jan-2015 138.8 138.8 4.3 17.0 14.6 Londonderry Retail 1 27-Mar-2015 18.0 9.0 7.3 15.2 15.2 Residential - Various Residential 19

• 15.5

6.6 2.4

• Subtotal

25 234.1 216.2 4.9 13.5 11.9 TOTAL 73 324.1 288.7 5.2 13.7 12.6

39

INVESTMENT ACTIVITY Post Period End

• No. of

Price LMP share NIY WAULT Acquisitions Sector assets Date (£m) (£m) (%) to expiry to 1st break Basildon Distribution 1 Apr-2015 3.5 3.5 6.5 4.6 4.6 M&S Convenience asset Retail 1 May-2015 4.8 4.8 5.3 20.0 20.0 M&S Convenience asset Retail 1 May-2015 3.0 3.0 5.6 20.0 20.0 M&S Convenience asset Retail 1 May-2015 4.7 4.7 6.0 20.0 20.0 Sub-T

• tal

4 16.0 16.0 5.8 16.2 16.2 Disposals Brackmills Distribution 1 Apr-2015 14.4 14.4 5.5 8.9 8.9 Harlow Distribution 1 Apr-2015 37.2 18.6 4.7 24.3 24.3 Lichfield Retail 1 May-2015 13.3 6.6 5.5 11.9 11.4 Residential - Various Residential 6

• 3.2

1.3 2.5 0.0 0.0 Sub-T

• tal

9 68.1 40.9 5.0 16.4 15.9 T

• tal

13 84.1 56.9 +80bps

DEVELOPMENT ACTIVITY

40 Location Sector Sq ft % Pre Let Comment Practical Completion Rent roll YOC1

• n PC2

Valu’n yield (£m) (%) (%) Committed Islip Distrib 1,062,000 100% New 25 year lease to Primark, 1.5% annual uplifts Sept-15 5.3 6.8 4.5 Warrington Distrib 690,000 100% New 15 year lease to The HUT Group Oct-15 3.8 7.5 Undiscl Leeds Retail 120,000 52% 49% pre-let, 3% in solicitors’ hands³ Sep-15 2.7 7.5 5.6 Loughborough Retail 54,000 100% Food store extension of 12,690 sq. ft. to 54,000 sq ft 2016 1.5 5.3 4.5 Coventry Retail 15,000 100% New 15 year lease to B&M Aug-15 0.2 8.6 5.7 Liverpool Retail 29,000 100% Pre let to Aldi and Marks & Spencer Mar-16 0.5 5.8 5.5 Ferndown Retail 11,000 100% New 20 year lease to Marks & Spencer Mar-16 0.3 5.2 4.7 Total committed 1,981,000 90% 14.3 7.1% 5.3% Conditional Bedford Distrib 750,000

• Subject to satisfactory planning consent

Stoke Distrib 300,000

• Subject to vacant possession and satisfactory planning consent

Leicester Retail 29,000 100% Pre-agreed to Smyths Toys and Home Bargains.

(1) Yield on cost (2) Practical completion (3) Including post period activity: 49% contracted, 8% in solicitors hands

ASSET MANAGEMENT – PLANNING GAINS - H1

41 Scheme name Location Sector Consent Sq ft Comment Initiative Westcroft Milton Keynes Retail A1 2,400 Extension of Store 21 to accommodate Aldi Asset Management Islip Thrapston Distribution B1/B2 1,062,000 Construction of new 1,062,000 sq. ft. unit Development Mountbatten Retail Park Southampton Retail Bulky 21,200 Full cover Mezz & External Dec Asset Management Kings Lynn Kings Lynn Retail Bulky 40,700 Build over Garden Centre Asset Management Christchurch Retail Park Christchurch Retail A3 2,500 Costa and Subway pod units Asset Management Airport Retail Park Coventry Retail Bulky 15,000 Construction of new 15,000 sq. ft. unit Development Hertford Retail Park Hertford Retail A3 4,300 Construction of two new pod units Asset Management Eldon Way Crick Distribution B1/B2 15,000 Change of use and alterations Asset Management Damolly Retail Park Newry Retail A3 1,500 Change of use from Retail to Restaurant Asset Management Damolly Retail Park Newry Retail Bulky 8,400 Pets at Home variation Asset Management Seager Retail Park Cardiff Retail Bulky 10,200 Permitted Use Asset Management Total 1,183,200

ASSET MANAGEMENT - PLANNING GAINS - H2

42 Scheme name Location Sector Consent Sq ft Comment Initiative Dunstable Road Retail Park Luton Retail A3 6,900 Change of use from A1 to A3 Asset Management Cannon Lane Tonbridge Retail A1 18,700 Subdivision of Halfords & food consent for M&S Asset Management Lottbridge Drove Retail Park Eastbourne Retail A1 11,100 Staples subdivision Asset Management Christchurch Retail Park Christchurch Retail A1 10,100 Elevations to Unit 9 - DFS Asset Management Havens Head Retail Park Milford Haven Retail A3 8,000 Food consent for Unit B1 Asset Management St Margaret’s Retail Park Leicester Retail A1 28,500 Subdivision of new unit Development Alban Retail Park Bedford Retail D2 8,300 Change of Use from A1 to D2 Asset Management Campbell Road Stoke Distribution B8 300,000 Demolition & redevelopment of existing unit Development Total 391,600

PORTFOLIO METRICS

43 Revaluation Rent Fixed Area Valuation surplus Occupancy NIY WAULT (years) roll uplifts Average rent (£ psf) As at 31-Mar-15 (m sq ft) (£m) (£m) (%) (%) (%) expiry break (£m) (%) Existing Retail – wholly owned 1.4 345.3 18.3 5.6 99.2 5.8 11.7 10.7 21.8 30.9 16.20 Retail - MIPP JV 0.5 106.2 2.2 2.1 99.1 6.0 13.0 12.6 6.7 23.9 14.20 Retail - DFS JV 0.1 39.2 1.9 5.1 100.0 7.6 15.0 15.0 3.1 0.0 32.60 Retail Subtotal 2.0 490.7 22.4 4.8 98.5 6.0 12.3 11.5 31.6 26.4 16.50 Distribution 5.9 558.6 49.3 9.7 100.0 5.4 12.9 12.1 31.9 50.8 5.40 Leisure 0.3 77.1 2.1 2.8 100.0 6.1 22.4 22.4 5.0 100.0 15.50 Office 0.2 73.3 8.4 12.9 100.0 6.0 9.1 7.4 4.7 64.1 20.20 Investment portfolio 8.4 1,199.7 82.2 7.4 99.7 5.8 13.1 12.3 73.2 44.4 8.70 Residential

• 69.6

0.2 0.3 n/a

• 1.1

Developments 2.3 131.1 36.0 37.9 n/a

• 11.3

Total 10.7 1,400.4 118.4 9.2 n/a

• 85.6

RESPONSIBLE BUSINESS: CASE STUDIES

44

Retail Park, Kirkstall, Leeds

BREEAM Very Good Sustainable & renewable materials used wherever possible Effective insulation & solar shading used to reduce the need for mechanical heating & cooling High efficiency LEDs for external lighting Provision of an occupiers’ fit-out guide to further enhance the environment performance of the units Improved connectivity through pedestrian and cycle routes as well as public transport (including new bus shelter with real time travel information) Local sourcing of services, workers and supplies encouraged as well as promotion of local employment

• pportunities & apprenticeships

Primark Distribution Unit, Islip

BREEAM Very Good Neutral cut & fill with no materials taken off site involving 500,000m³ of earthworks Promote the use of sustainable materials, sourced responsibly where feasible Foul drainage system on-site with dedicated treatment plant Installation of solar panels covering c.30,000 sq ft and 10% roof lights installed to provide good levels of natural light

BALANCE SHEET

Proportionately Consolidated

31 March 2015 31 March 2014 (£m) Group JV T

• tal

T

• tal

Property portfolio 1,164.1 236.3 1,400.4 1,219.8 Cash 50.6 13.0 63.6 87.5 Bank debt (465.5) (97.5) (563.0) (473.1) Other net liabilities (27.4) (3.4) (30.8) (78.3) Net assets 721.8 148.4 870.2 755.9 EPRA adjustments 7.0 1.1 EPRA net assets 877.2 757.0 EPRA NAV per share (p) 140.6 121.0

45

INCOME ST A TEMENT

Proportionately Consolidated

31 March 2015 31 March 2014 (£m) Group JV T

• tal

T

• tal

Reported profit 145.2 14.3 159.5 125.3 Net rental income 57.6 13.3 70.9 58.5 Management fees 2.2 (0.9) 1.3

• Administrative costs

(12.5) (0.1) (12.6) (13.9) Net finance costs (15.4) (3.2) (18.6) (18.3) Other

• (0.1)

(0.1) 0.1 EPRA Earnings 31.9 9.0 40.9 26.4 Valuation Movement 112.4 6.0 118.4 95.9 Exceptional items1 0.9 (0.7) 0.2 3.0

46

(1) Includes derivative movements, profit/(loss) on sales, early closure costs of debt and hedging and deferred tax

DEBT FACILITIES

As at 31 March 2015

Facility Drawn Maturity Asset(s) Sector Lender (£m) (£m) (years) Expiry Wholly-owned portfolio Distribution term loan Distribution Helaba 196.2 196.2 6.7 28-Nov-21 General revolver n/a Bank of Scotland 55.0 55.0 1.2 20-Jun-16 General revolver n/a RBS 80.0 30.5 4.2 2-Jun-19 Retail term loan Retail RBS 140.0 117.3 3.4 6-Aug-18 Retail term loan Retail Wells Fargo 34.7 34.7 1.1 27-Apr-16 Odeon term loan Leisure Lloyds 31.8 31.8 2.6 18-Nov-17 T

• tal wholly-owned

537.7 465.5 4.3 JV portfolio (LondonMetric at share) Distribution JV (50%) Distribution MetLife 7.4 7.4 0.9 23-Feb-16 Moore House (40%) Residential RBS 16.9 16.9 1.4 28-Aug-16 DFS JV (30.5%) Retail M&G 21.9 21.9 4.3 23-Jul-19 MIPP JV (50%) Retail Deutsche Pfandbriefbank 62.5 51.3 4.8 22-Jan-20 T

• tal JV portfolio

108.7 97.5 3.9 T

• tal Group and JV

646.4 563.0 4.2 47

DEBT FACILITIES

As at 2 June 2015

Facility Drawn Maturity Asset(s) Sector Lender (£m) (£m) (years) Expiry Wholly-owned portfolio Distribution term loan Distribution Helaba 196.2 187.9 6.5 28-Nov-21 Unsecured All Syndicate 400.0 265.0 6.8 1-Apr-22 T

• tal wholly-owned

596.2 452.9 6.7 JV portfolio (LondonMetric at share) Distribution JV (50%) Distribution MetLife 7.4 7.4 0.7 23-Feb-16 Moore House (40%) Residential RBS 16.0 16.0 1.2 28-Aug-16 DFS JV (30.5%) Retail M&G 21.9 21.9 4.1 23-Jul-19 MIPP JV (50%) Retail Deutsche Pfandbriefbank 62.5 51.3 4.6 22-Jan-20 T

• tal JV portfolio

107.8 96.6 3.8 T

• tal Group and JV

704.0 549.5 6.2 48

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