Half Year Results Presentation Six months ended 30 September 2018 - - PowerPoint PPT Presentation

@BritishLandPLC www.britishland.com #BLHY2019 $BLND

Half Year Results Presentation

Six months ended 30 September 2018

Progressing our Strategy

Chris Grig g , Chief Executive

2

• Leasing well across the business

– 421,000 sq ft Offices leasing – Office developments letting up ahead of schedule and on better terms than expected – Retail demand firm with 457,000 sq ft leasing

• Good operational performance

– Occupancy high at 97.8% – Outperforming on Retail footfall and sales – Further roll out of Storey in Offices – Progress at Canada Water: master development agreement signed and planning submitted

• Thoughtful allocation of capital

– £842m asset sales – 5 Broadgate sold for £500m; 18% pa return – Share buyback extended by £200m; £94m completed

Further good operational and strategic progress

3

10 0 Liverpool Street, PC Q1 20 20

Finance Review

Sim on Ca rter, CFO

4

5

Focus on capital discipline since the referendum

Selling W ell £2.4bn incom e producing sales at 4.2% Build ing Ba la nce Sheet Strength Leverage dow n 5.4% Cost of debt dow n 40bps Inv esting In Our Prop erties At c.6% yield via developm ents and share buyback

6

Headlines

Period to H1 2018 H1 2019 Change % Underlying earnings per share (p) 19.2 17.2 (10.4%) Underlying Profit (£m) 198 169 (14.6%) Dividend per share (p) 15.04 15.50 3.0% As at H2 2018 H1 2019 Change % Valuation performance +0.9% (1.9%) EPRA net asset value per share (p) 967 939 (2.9%) Loan to value (LTV) 28.4% 26.7%

7

Net rental income

267 297 (20) (10) (6) 7 (1)

HY 2018 Prior period surrender premia Net divestment Impact of CVAs and administrations Like-for-like rental growth

• exc. CVAs and

administrations Developments HY 2019

£m

1 Like for like rental growth is stated excluding the impact of surrender premia, CVAs and administrations

Offices 5.8% Retail 0.2% Total1 2.3%

8

Financing costs

(66) 4 6 (4) (2)

HY 2018 Financing activity Net divestment Developments Share buyback HY 2019

(62)

£m

9

Underlying earnings per share

19.2p 17.2p 17.3p (0.8p) (0.6p) 0.7p 0.6p (1.9p)

HY 2018 Prior period surrender premia HY 2018 excl. surrender Net divestment and developments Impact of CVAs and admins LFL rental growth Share buybacks HY 2019

Pence

1 Like for like rental growth is stated excluding the impact of surrender premia, CVAs and administrations

1

Com m itted d ev elop m ents a nd buy ba ck exp ected to a d d a p p rox. 5p to future a nnua lised EPS

10

Income statement

HY to 30 September H1 2018 H1 2019 Change % Net rental income (£m) 297 267 (10.1%) Fees & other income (£m) 8 6 (25.0%) Administrative expenses (£m) (41) (42) (2.4%) Net finance costs (£m) (66) (62) 6.1% Underlying Profit (£m) 198 169 (14.6%) Underlying earnings per share (p) 19.2 17.2 (10.4%) Dividend per share (p) 15.04 15.50 3.0%

11

CVAs and Administrations

Contacted rent reduction £’m Number of Stores % of CVAs Number of stores in portfolio c.2,000 Stores exposed to CVA/admins 114 Administrations 5.8 38 CVAs 76 Unaffected

• 36

47% Reduced Rents 5.2 27 36% Closures 3.7 13 17% Total Rent Impact 14.7 1 2 3 4 5 6 7

Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Q3 FY19 CVAs - reduced rents CVAs - stores closing Admins - stores closing

Annualised contracted rent impact by Quarter (£’m)

58 % of £ 9.5m rent on stores closing is let or in negotia tions

All numbers as of 13th November 2018, over the last 18 months

Rent on stores closing: £ 9.5m | Rent reductions: £ 5.1m

12

6 months to September 2018 Valuation £m Movement £m Movement % Yield movement Bps ERV growth % NEY % Weighting % Offices 6,130 50 0.7 +1 0.2 4.4 48 Retail 6,305 (307) (4.5) +14 (1.5) 5.4 49 Residential 128 (4) (3.1) n/a n/a n/a 1 Canada Water 293 1 0.3 n/a n/a n/a 2 Total 12,856 (260) (1.9) +7 (0.8) 4.9 100

• Of which

Standing Investments 11,918 (323) (2.5) +7 (0.8) 4.9 93

• Of which Development

938 63 7.2 n/a n/a n/a 7

As calculated by IPD, ERV Growth doesn’t take into account asset management initiatives

Valuation performance

13

200 400 600 800 1,000 1,200 1,400 1,600 1,800 More than 0% 0% to -2.5%

• 2.5% to -5%
• 5% to -10%

More than -10% Local Multi-let Regional Multi-let Superstores Leisure Solus Department Stores

Sept ’18 Valuations (£’m)

Retail Valuation Movements

6 7% of rent lost throug h CVA/ a d m in is a t a ssets seeing m ore tha n 5% v a lua tion d ecline

% Va lua tion Mov em ent in H1 FY19

14

Retail Operational Performance

New Lettings & Renewals Rent Reviews Occupancy Floor Area (Sq ft ‘000) Net Effective Rent (£’m) Vs ERV Floor Area (Sq ft ‘000) Net Effective Rent (£’m) Vs Previous Rent Total Retail 457 8.0 +5.0% 622 15.4 +2.2% 97.6% Regional multi-let 269 3.9 +6.6% 232 6.5 4.1% 97.3% Local multi-let 183 3.8 +3.7% 362 8.7 0.9% 97.0% British Land H1 FY19 (yoy) Outperformance vs Benchmark (bps) Footfall

• 1.2%

+210 Retailer LFL Sales

• 2.5%

+90 Retailer Total Sales

• 0.6%

+150

15

967p 939p (28p) 17p (15p) (3p) 2p

Mar 18 Valuation performance Underlying Profit Dividends Financing activity Share buyback Other Sep 18

EPRA net asset value

(1p)

16

Pursuing developments on a risk managed basis

• Committed pipeline

– ERV of £63 million – Delivering c.4p to EPS once fully occupied – 69% pre-let or under offer – Speculative exposure now 3.7% – As at September, 65% costs to go covered by Clarges residential receipts – 93% of costs are fixed

• Near term pipeline

– ERV of £27 million – Planning consent achieved

ERV of committed developments

£63m

£m – ERV

10 20 30 40 50 60 70 Committed Near Term

Pre-let or under offer £43m

Costs to g o £ 353m Costs to g o £ 36 4 m

17

Strength of debt metrics

Proportionally Consolidated 31 Mar 2018 30 Sept 2018 Loan to value (LTV) 28.4% 26.7% Weighted Average Interest Rate 2.8% 2.9% Interest Cover 4.0x 3.7x Available Undrawn Facilities £1.2bn £1.5bn Weighted Average Drawn Debt Maturity 8.6yrs 8.5yrs Senior unsecured credit rating (Fitch) A A

Including impact of repayment of secured Broadgate bonds and associated swaps, committed prior to 30 September 2018 and completed on 5 October 2018

£ 1.1bn of new fina nce since Ma rch 20 18

Update on Strategy

Chris Grig g , Chief Executive

18

19

Future British Land: progressing our mixed use strategy

Mixed Use places to work, shop and live

Offices

• Focused on London campuses
• Well connected,

sustainable and smart

• Balance of type of

space, lease length

• Further build out of Storey

Reta il

• Smaller more focused portfolio
• Multi-let with mixed

use potential

• High quality, diverse

retail integrated within

• ur campuses

Build to Rent

• Complementary to
• ur current strategy
• Existing options within
• ur portfolio (e.g. Canada

Water)

• Bolt on acquisitions

may play a role

• Significant pre-let progress

at Campus developments

• Further roll out of Storey

including the acquisition

• f a standalone building
• £634m assets sold or under
• ffer in the last 12 mths
• Investing in assets which fit
• ur strategy
• In exclusive discussions to

acquire a BTR operator

• Opportunities identified

across our portfolio, including Canada Water

20

Our unique London campuses

Ca m p uses a ccount for 8 0 % of Offices p ortfolio

421,0 0 0 sq ft

Office leasing

6.5%

ahead of ERV

69% let

• r under offer

Developments

A range of developments attracting a broader mix of occupier

21

• McCann: 148,000 sq ft at 135 Bishopsgate

– Leading global advertising group – Non-conventional city occupier relocating from the West End – “21st Century Warehouse”

135 Bishopsgate, PC Q3 20 19

…the build ing’s loca tion a t the intersection of Shored itch, Sp ita lfield s a nd The City w ill connect us to som e of the m ost im p orta nt crea tiv e, tech a nd historic hubs tha t Lond on ha s to offer.”

Ma rk Lund , CEO McCa nn W orld group UK

Mimecast – the largest tech letting in the City this year

• Mimecast: 113,000 sq ft at 1FA

– 79,000 sq ft let in April 2018 – Exercised option over 34,000 sq ft

• Now 42% let or under offer
• Further 73,000 sq ft allocated to

Storey

1FA, PC Q1 20 19

“British La nd ’s p rogressiv e a p p roa ch w ill ensure our new Lond on office a t 1FA is grea t for colla bora tion, innov a tion a nd rela xing a t the end of the d a y .”

Neil Murra y , Co-found er, Mim eca st

22

TP ICAP – maintaining our appeal to financial services

23

• TP ICAP: 123,000 sq ft at 135 Bishopsgate

– Existing occupier recommitting to Broadgate – Vote of confidence in London and Broadgate

• 135 Bishopsgate now 94% pre-let

– Includes 42,000 sq ft let to Eataly

135 Bishopsgate, PC Q3 20 19

“…op ening a p la ce in Lond on w here p eop le ca n buy , ea t a nd lea rn is a v ery im p orta nt a nd exciting m ilestone for us. This is rea l Lond on.”

Luca Ba ffig o, CEO Ea ta ly

Opening up Broadgate to the neighbourhood

135 Bishopsgate, PC Q3 20 19 135 Bishopsgate, previous

Ea ta ly ’s fronta ge is 8 0 m long a nd 12m high, lev era ging the p ublic rea lm a long Bishop sga te benefitting from high footfa ll

24

• Integral part of our campus offer

– Operational across all three campuses – 130,000 sq ft; 87% let or under offer – Premium of 42% to ERV on leased space

• 186,000 sq ft further space identified

– 120,000 sq ft on our campuses – 65,600 sq ft in standalone buildings – Potentially 10% of our Offices portfolio

Continued roll out of Storey

Storey at 338 Euston Road, Regent’s Place

25

Retail – maintaining our operational focus

• Market environment challenging

– Rapid structural change – Cost pressures on retailers

• Continuing demand for our space

– 457,000 sq ft lettings and renewals – 5.0% ahead of ERV – Retail portfolio 98% full

• Operational outperformance

– Total sales down 0.6%; 150 bps ahead of benchmark driven by refurbishment and asset management initiatives – Footfall down 1.2%; 210 bps ahead of benchmark

Meadowhall

26

• £2.4bn assets sold since March 2014

– £995m superstores – £614m department stores – £559m multi-let assets – £196m leisure and solus assets

• £634m sold or under offer in the last 12

months

– £215m sold – £419m exchanged or under offer

• Physical Retail plays a key role in our

mixed use environments

– Long term holders of assets that meet our criteria

Delivering a smaller, more focused Retail portfolio

3

Teesside, Stockton

27

28

Key criteria for long term Retail assets

Criteria Key a ttributes

Size and location

• Urban locations with excellent local market position and connectivity
• Strong demographics of catchment
• Right-sized to underpin supply-demand tension

Environment

• Strong visual identity; high quality environment
• Flexible space with capacity to respond to evolving demand
• Mixed use potential

Operators

• Good occupier mix; reflective of local area
• Winning and aspirational growth brands and categories
• Local operators and local lifestyle uses complementing major brands

Services

• Advanced marketing, enlivenment and events plan
• Data sharing
• Technology enabled customer services

• Attractive market

– Clear structural growth dynamics – Fragmented with small professional offering – Highly complementary to our business – Part of our mixed use vision

• Focused on achieving scale

– Exclusive discussions with an operator to add scale and enhance expertise – Substantial opportunities within our portfolio

Build to Rent – building a presence in this growth market

3

Canada Water

29

Significant residential opportunities in our existing portfolio

30

4,0 0 0 – 5,0 0 0

units opportunities across our portfolio

Our vision for Canada Water

A p a rtnership betw een British La nd a nd Lond on Borough

• f Southw a rk crea ting a new urba n centre

31

• Master development agreement

signed

– New 500-year headlease, simplifying current structure – Aligns our interest with Southwark Council; ownership split 80:20

• Planning submitted

– Outline planning for the overall masterplan including 3,000 homes – Detailed planning for the first three buildings including 265 homes – Part of a major first phase, covering 1.9m sq ft

Further good progress at Canada Water

3

Canada Water

32

First detailed plots

3

Plot A1 – residential & workspace A2 – workspace & leisure K1 – residential

33

34

Future British Land: London focused mixed use business

March 2010 Current

Indicative business split 5+ years

66% 49% 30 -35%

Retail Campus-focused Offices Storey Residential

33% 48 % 5% 10 % 50 -55%

• London focused: over 70% of group
• Smaller, more focused Retail
• Meaningful Residential exposure
• Right balance of flexible and core workspace

Conclusion and outlook

3

• Uncertain environment

– Expect this to continue – Our business is strong financially, with limited speculative exposure

• Clear and consistent strategy

– Good progress on Retail sales – Continuing to benefit from the unconventional London cycle and our developments – Promising opportunities in Build to Rent

• Confident in our business

– Quality portfolio; high occupancy – Clear and consistent long term strategy – Optionality and flexibility built into our business

Winter Forest, Broadgate

35

Appendices

36

37

Custom er Orienta tion

We use our insight into customers’ needs and identify major long term trends to create environments in tune with changing lifestyles

Rig ht Pla ces

We design engaging, sustainable places which bring people together through the right mix of occupiers, services and activities

Ca p ita l Efficiency

We allocate our capital, manage our finances and partner with like-minded organisations to deliver sustainable long-term value

Exp ert Peop le

We employ expert people and work with specialist partners to create insight, develop skills and build capability

Our Strategy

British Land is a leading UK commercial property company focused on high quality retail and London offices

Pla ces Peop le Prefer

By m a na g ing our b usiness to b e resilient, susta ina ble a nd resp onsiv e, w e crea te end uring d em a nd for our p rop erties a nd v a lue for our sta kehold ers

38

We Enliv en

Com m unity

Supporting communities for local people and occupiers

We Connect We Design

Mem orable experience

Creating lasting, positive impressions

Function

Facilities and safety

Occupier service

Supporting occupiers and British Land value add

We Enha nce

Events

Bringing people together and attracting visitors

Accessibility

Convenience and access

Authenticity

How our users feel and interact with the space

Segm ent m ix

Balance of different segments and uses

We apply our Placemaking Framework across the business

Com m unication

Digital connectivity, branding and marketing

Form

Efficient and effective buildings and space

Occupier m ix

Occupiers and campus community

Custom er service

On-site hospitality & customer service

39

81% of our Retail & Office assets are within our managed environments

Figures shown on a proportionally consolidated basis including the group's share of properties in Joint Ventures & Funds

Offices

£6.1bn

80% of Office assets are at our campuses Reta il & Leisure

£6.3bn

82% of Retail assets are multi-let

Further £ 0 .3bn a t Ca na d a W a ter a nd £ 0 .1bn of sta nd a lone Resid entia l a ssets

58%

London Weighting

40

Retail Multi-let Portfolio

Regiona l Loca l

Missions include Leisure-dom inated Trips, Fam ily Day Out and The Big Ticket Shop

Our two core products each fulfil specific shopper missions

Attracting visitors from a wide catchment for a planned trip Fitting into the daily life of local communities

Retail offer covers multiple categories with depth of choice in each Significant leisure and F&B e.g. restaurants, cinema Typically >30 occupiers Footfall >10 m , spend >£ 10 0 m p.a. Drive-time >20 m ins Dwell >60 m ins Missions include Local Neighbourhood Shopper, Convenient Leisure and Single Item Pick-Up Retail offer covers multiple categories & includes local services and am enities Convenient leisure and F&B e.g. gym and coffee shops Typically 15– 30 occupiers Footfall often <8 m , spend <£ 10 0 m p.a. Drive-time <15 m ins Dwell <60 m ins

41

Multi-let Retail assets

Southgate, Bath Broughton, Chester1 Fort Kinnaird, Edinburgh1 Glasgow Fort1

• St. Stephen’s, Hull

Eden Walk, Kingston Giltbrook, Nottingham Serpentine Green, Peterborough Drake Circus, Plymouth Meadowhall, Sheffield New Mersey, Speke1 Teesside, Stockton Mayflower, Basildon Old Market, Hereford Studlands, Newmarket Weston Lock, Bath Inverness1 Harlech, Newport Cornerhouse, Barrow Westside, Leeds Elk Mill, Oldham Hindpool, Barrow The Woolwich Estate Nugent, Orpington Forster Square, Bradford Beaumont, Leicester Botley Road, Oxford Woodfields, Bury Valentine, Lincoln1 Deepdale, Preston1 Forster Square, Bradford Mostyn Champneys, Llandudno1 Queens, Stafford1 Tollgate, Colchester

• St. Peter’s, Mansfield

Orbital, Swindon Prospect Place, Dartford1 Kingston Centre, Milton Keynes Royal Victoria Place, Tunbridge Wells Crown Point, Denton Whiteley, Fareham Wheatley, Doncaster Ealing Broadway Lion, Woking Crown Wharf, Walsall1

1 Assets held within Hercules Unit Trust or its subsidiaries and joint ventures

Regiona l Loca l

Attracting visitors from a wide catchment for a planned trip Fitting into the daily life of local communities

42

Our Retail portfolio is well positioned to meet both consumer and retailer demands

Source: CACI Retail Footprint 2017, BL Insight team Note that population reach includes Broadgate

BL local centres BL regional centres BL asset catchments

Potential to reach

60 %

• f the population

Annual footfall of

30 5m

Average rent to sales ratio

9%

Occupancy cost ratio

14%

43

Physical store sales £ 26 9 b n True Value of Stores £ 28 2 bn Total retail sales £ 323 b n £6 bn £7 bn £20 bn £19 bn £2bn

Online sales increasingly integrated with physical stores: 87% of UK retail sales touch the store

8 7% of

total retail sales in 20 17

Click & Collect sales Online sales browsed in store Online sales not browsed in store Online pureplay sales Mail order & TV shopping

Retail sales by channel (UK, all sectors, 2017)

Source: GlobalData/ British Land

Boost

+5%

Online sales of store operators Total online sales Online that touched the store

44

Physical store openings significantly boost retailers’

• nline presence

Postal area share of retailer website visits

Indexed vs. start of store opening period

Note: Based on a sample of 29 retailers opening at British Land centres between April 2014 and December 2016. For retailers with fewer than 30 UK stores, there is a 84% boost to online presence, based on a sample of 7 retailers Source: British Land/Connexity Hitwise

80 90 100 110 120 130 140 150 160 170

• 20 weeks
• 15
• 10
• 5

Store Opening 5 10 15 +20 weeks

+52%

45

BL footfall performance vs benchmark

British Land UK Market (ShopperTrak UK National Index) Jan-10 = 100

75 80 85 90 95 100 105 110 115

Jul-14 Jan-11 Jan-10 Jan-16 Jul-10 Jul-11 Jan-12 Jul-13 Jul-12 Jan-13 Jul-16 Jan-18 Jan-15 Jan-17 Jul-17 Jul-15 Jul-18 Jan-19 Jan-14

Tyco (formerly Experian) Index BL Index

Outperformance for 6m to Sep 2018

+210 bps

1

Major property holdings

At 30 September 2018 BL Share % Sq ft 000’s Rent £m pa1,4 Occupancy Rate %2,4 Lease Length yrs3,4 1 Broadgate 50 4,133 140 98.9 5.5 2 Regent's Place 100 1,740 76 99.6 7.2 3 Paddington Central 100 958 45 98.9 5.8 4 Meadowhall, Sheffield 50 1,500 89 98.9 5.9 5 Glasgow Fort 78 510 21 99.1 5.9 6 Teesside, Stockton 100 569 17 95.3 5.1 7 Drake Circus, Plymouth 100 1,082 19 97.2 6.0 8 Ealing Broadway 100 540 15 90.9 4.6 9 Sainsbury's Superstores5 51 1,457 34 100.0 8.3 10 10 Portman Square 100 134 10 100.0 6.6

1 Annualised EPRA contracted rent including 100% of Joint Ventures & Funds 2 Including accommodation under offer or subject to asset management 3 Weighted average to first break 4 Excludes committed and near term developments 5 Comprises standalone stores

47

Broadgate Campus

2 FA & 3 FA

• 2FA & 3FA - Innovation cluster inc. 64k sq ft
• f Storey space
• 3FA – UBS surrendered lease in Jan 2018. ‘Light

touch’ refurb completed, now 100% let/under offer

• Current size: 189k sq ft
• Potential size: 563k sq ft

1 FA

• Pre-let 113k sq ft to Mimecast,

11k sq ft to Everyman Cinemas

• 73k sq ft to be Storey space
• Size: 288k sq ft
• Completion: Q1 2019

135 Bishopsgate

• 94% let or under offer
• Pre-let 123k sq ft to TP ICAP,

148k sq ft to McCann, 42k sq ft to Eataly

• Size: 334k sq ft
• Completion: Q3 2019

1-2 Broadgate

• Current size: 331k sq ft
• Potential size: 533k sq ft

100 Liverpool Street

• Pre-let 160k sq ft to SMBCE
• Under offer on further 49k sq ft
• Current size: 380k sq ft
• Redevelopment: 521k sq ft
• Completion: Q1 2020

54% of Broadgate com m itted developm ents pre-let or under offer

48

Paddington Central Campus

49

Regent’s Place Campus

50

Top 20 occupiers & occupier split by industry

As at 30 September 2018 % of Contracted Rent

Tesco1 4.5 Sainsbury’s 3.9 Debenhams2 (incl. Head Office) 3.8 Government 2.9 Next plc 2.6 Kingfisher (incl. Head Office) 2.3 Facebook 2.0 Dentsu Aegis3 1.8 Marks & Spencer 1.8 Spirit Group 1.8 Visa Inc 1.7 Alliance Boots 1.7 Dixons Carphone 1.6 Arcadia Group 1.4 Herbert Smith 1.4 Homebase4 1.3 TK Maxx 1.2 Gazprom 1.1 Vodafone 1.1 JD Sports 1.0

Occupier Split by Industry (%)

1 Includes £3.4m at Surrey Quays Shopping Centre 2 Of which 1.8% relates to rent received at the Head Office, 10 Brock Street 3 Represents current occupation of 10 Triton Street covering 118,000 sq ft of space. Taking into account their pre-let of 310,000 sq ft at 1 Triton Square, % of contracted rent would rise to 5.3%.

As part of this new letting, Dentsu Aegis have an option to return their existing space at 10 Triton Street in 2021. If this option is exercised, there is an adjustment to the rent free period in respect of the letting at 1 Triton Square to compensate British Land.

4 Taking into account rent adjustments following CVA. Reduces to 1.1% taking account of asset sales under offer 5 Does not include letting to SMBC at 100 Liverpool Street

Banks & Financial services 11% General Retail 16% Fashion & Beauty 18% Food / Leisure 12% Professional & Corporate 11% TMT 9% Grocery & Convenience 9% Home & DIY 7% Other 7%

Banks5 3% Asset Management 5% Other Financial 3%

51

Capital Activity

Since 1 April 2018 Offices £m Retail £m Residential £m Canada Water £m Total £m Purchases1 32 110

• 142

Sales2 (500) (139) (203)

• (842)

Development Spend 69 21 9 8 107 Capital Spend 8 16

• 24

Net Investment (391) 8 (194) 8 (569) Gross Investment 609 286 212 8 1,115

On a proportionally consolidated basis including the Group’s share of joint ventures and funds

1 Includes £32m Orsman Road, Haggerston which exchanged in the period but has not yet completed 2 Includes £45m Richmond Homebase which exchanged prior to FY19 and completed in the period. Includes £203m of Clarges completions which exchanged prior to FY19

and completed in the period

52

(2,000) (1,600) (1,200) (800) (400)

• 400

800 1,200 1,600

Capital Activity

£52m £648m (£47m) 2013 2014 2015 2016 £45m 2017 (£502m) Net Spend1 £m Sales Capital Investment Net Spend Purchases

1 Previous periods have been restated to exclude residential sales transactions exchanged in the period that have now completed 2 2018 restated to exclude Richmond Homebase which completed after 31 March 2018

(£572m) 20182 (£569m) H1 2019

Gross investment activity in H1 FY19

£ 1.1bn

53

Purchases

Since 1 April 2018 Sector Price (100%) £m Price (BL Share) £m Annual Passing Rent £m1 Completed Royal Victoria Place, Tunbridge Wells Retail 92 92 3 Hercules Unit Trust units Retail 18 18 1 Exchanged Orsman Road, Haggerston Offices 32 32 2 Total 142 142 6

1 BL share of annualised rent topped up for rent frees

54

Sales

1 Exchanged during the year ended 31 March 2018, completed in the period 2 All of which exchanged prior to FY19 and completed in the period 3 BL share of annualised rent topped up for rent frees

Since 1 April 2018 Sector Price (100%) £m Price (BL Share) £m Annual Passing Rent £m3 Completed Richmond Homebase1 Retail 45 45 1 Cheltenham Gallagher Retail Park Retail 73 29 1 Southampton David Lloyd Retail 15 15 1 5 Broadgate Offices 1,000 500 18 B&Q Glasgow Retail 28 28 2 Hamilton David Lloyd Retail 10 10 1 Brentwood Virgin Active Retail 12 12 1 Clarges, Mayfair2 Residential 203 203

• Aldgate Phase 1

Residential 1

• Total

1,387 842 25

55

Clarges Residential Unit Sales

Number of units £m Completed in FY18 2 25 Completed in FY19 19 203 Total Completed 21 228 Exchanged (of which 1 exchanged and completed post period end) 3 106 Total Sold 24 334 Units remaining 10 123 Total 34 457

56

H2 FY19 income statement guidance

• Gross Rents

– Annualised accounting gross rent of £555m as at 30 September 2018 – This reflects the £14.2m reduction to contracted rents as a result of CVAs and administrations as at 30th September 2018 – Transactions exchanged post period end are expected to reduce annualised rents by £9.1m (H2 impact: £1.9m) – No material expiries relating to properties in the development pipeline expected in H2 – Rental income will be driven by like-for-like growth

• Operating costs

– Property outgoings and administrative costs expected to be broadly in line with H1 levels

• Financing

– Weighted average interest rate 2.9%

• n gross debt of £3.8bn

– Undrawn facilities of £1.5bn as at 30 September, with commitment fees of c.30bps p.a.

• Dividend

– As announced in May 2018, the dividend for the year ending 31 March 2019 is 31.0 pence per share (quarterly dividend of 7.75 pence per share)

• Other

– Capital activity has the potential to significantly impact

• profits. For example, selling/acquiring £100m of assets

would reduce/increase profits by c.£4m and LTV by c.0.5%. As we expect to continue making retail sales, this is based on an average retail portfolio topped up NIY

• f 5.1% and marginal cost of debt of 1.4%

– Annualised impact of the £200m share buyback is c.0.8p,

• f which c.0.3p is expected in FY19, based on current

share price levels

57

Illustrative future income profile breakdown (cash basis)

For the year to 31 March 2019 2020 2021 2022 2023 Total Accounting Basis At 30 September 2018 £m £m £m £m £m £m Current Passing Rent 569 557 Contracted uplifts4 12 16 2 3 1 34 Letting of Committed Developments1 – let or under offer 3 18 22

• 43

36 Contracted rent 646 593 Sales exchanged post period end (9)

• (9)

(9) Letting of completed developments 2

• 2

1 Lease Expiries – Development pipeline (4) (5) (1)

• (10)

(10) Letting of Committed Developments1 – speculative 5 14 1

• 20

17 Letting of Near Term Developments1

• 27

27 21 RPI Linked Leases2 1 1 1 2 2 7 7 Reversion3 4 4 4 7 3 22 19 Vacancies 14 12 719 651 Letting of Medium Term Developments (excl. Canada Water & Eden Walk) 94 78

On a proportionally consolidated basis including the Group’s share of joint ventures and funds. Figures based on valuation rent and include assumptions on outstanding rent review settlements

1 Assumes lettings contracted are rent producing at practical completion 2 Assumed at 2.75% per annum 3 Includes reversion on expiries and open market rent reviews within 5 years 4 Includes £2m agreement for lease rents

58

Gross rental income1

Accounting Basis £m 6 months to 30 September 2018 Annualised as at 30 September 20184 Group JVs & Funds Total Group JVs & Funds Total West End 70

• 70

136

• 136

City 4 36 40 6 63 69 Offices 74 36 110 142 63 205 Regional 30 45 75 57 89 146 Local 47 13 60 93 26 119 Multi-let 77 58 135 150 115 265 Department Stores and Leisure 20

• 20

39

• 39

Superstores 1 10 11 2 19 21 Solus and Other 8

• 8

13

• 13

Retail 106 68 174 204 134 338 Residential2 2

• 2

4

• 4

Canada Water3 5

• 5

8

• 8

Total 187 104 291 358 197 555

On a proportionally consolidated basis including the group's share of joint ventures and funds

1 Gross rental income differs from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives 2 Standalone residential 3 Reflects standing investment only 4 After impact of reduction in rent from CVAs and administrations

59

Underlying Profit Bridge

198 169 (6) (5) (20) (6) 7 4 (3)

HY 2018 Prior period surrender premia Net divestment (including share buyback) Developments Impact of CVAs and administrations Like-for-like rental growth

• exc. CVAs and

administrations Financing activity Other HY 2019

£m

60

Administrative expenses

HY to 30 September H1 2018 £m H1 2019 £m Personnel costs 26 28 Share scheme costs 2 (1) Other administrative expenses 16 18 Total 44 45 Capitalised costs (3) (3) Total administrative expenses 41 42

On a proportionally consolidated basis including the Group's share of Joint ventures and Funds and excluding non-controlling interests in the Group's subsidiaries.

61

Operating costs metric

HY to 30 September H1 2018 £m H1 2019 £m Property operating expenses 19 24 Administrative expenses 41 42 Net fees and other income (8) (6) Ground rent costs and operating expenses de facto included in rents (1) (4) EPRA Costs (including direct vacancy costs) 51 56 Gross rental income 316 291 Ground rent costs and operating expenses de facto included in rents (1) (4) Gross Rental Income (EPRA basis) 315 287 EPRA Cost Ratio (including direct vacancy costs) 16.2% 19.5%

On a proportionally consolidated basis including the Group's share of Joint ventures and Funds and excluding non-controlling interests in the Group's subsidiaries.

62

Reconciliation of Underlying Profit

HY to 30 September H1 2018 £m H1 2019 £m IFRS profit before tax 238 (42) Net valuation (profit)/loss (167) 265 Profit on disposal of investment and trading properties (20) (65) Capital financing costs 153 17 Non-controlling interests (6) (6) Underlying Profit and EPRA Earnings 198 169

On a proportionally consolidated basis including the Group's share of Joint ventures and Funds and excluding non-controlling interests in the Group's subsidiaries.

63

Number of shares

As at 31 Mar 2018 (m) 30 Sept 2018 (m) IFRS Basic Weighted average1 1,013 981 IFRS Diluted Weighted average2 1,016 981 Underlying/EPRA diluted Weighted average3 1,016 984 Year/Period end4 989 982

1 For use in IFRS basic earnings per share. 2 For use in IFRS diluted earnings per share. 3 For use in Underlying/EPRA diluted earnings per share. 4 For use in EPRA NAV per share and EPRA NNNAV per share.

64

EPRA balance sheet

31 March 18 Group JVs & Funds 30 September 18 Total properties (£m) 13,716 9,314 3,542 12,856 Adjusted net debt (£m) (3,973) (2,410) (1,118) (3,528) Other net liabilities (£m) (183) (83) (22) (105) EPRA Net Assets (£m) 9,560 6,821 2,402 9,223 Loan to value (LTV)1 28.4% 26.7% Weighted average interest rate 2.8% 2.9% Interest cover 4.0x 3.7x Weighted average maturity of drawn debt (years) 8.6 8.5

1 Group LTV based on Group Properties and net investment in Joint ventures & Funds, and Group net debt.

65

Reconciliation of EPRA NAV & NNNAV

31 March 18 30 September 18 £m Pence £m pence IFRS Net Assets 9,506 967 9,261 949 Deferred tax arising on revaluation movements 5 5 Mark to market on derivatives and related debt adjustments 137 105 Adjust to fully diluted on exercise of share options 32 27 Surplus on trading properties 134 58 Non-controlling interests (254) (233) EPRA NAV 9,560 967 9,223 939 Deferred tax arising on revaluation movements (31) (11) Mark to market of debt and derivatives (485) (407) EPRA NNNAV 9,044 914 8,805 897

66

Gross and net debt reconciliation

As at 30 September 2018 Group £m JVs & Funds £m Less non- controlling interests £m Total £m Gross Debt (principal) (2,597) (1,277) 111 (3,763) IFRS adjustments: Issue costs and premia 14 1 (1) 14 Fair value hedge adjustments (151)

• (151)

Other items 13 3

• 16

IFRS gross debt (2,721) (1,273) 110 (3,884) Market value of derivatives (4) (24) 1 (27) Cash 116 171 (9) 278 IFRS net debt (2,609) (1,126) 102 (3,633) Adjustments: Remove market value of derivatives 11 Remove fair value hedges 107 Other adjustments (13) Adjusted net debt (3,528)

67

Loan to value (LTV)

As at 31 March 2018 £m Valuation movement Acquisitions Capital spend Disposals Share buyback Other As at 30 September 2018 £m Total properties 13,716 (246) 110 106 (826)

• (4)

12,856 Other investments 172

• 1

173 LTV assets 13,888 (246) 110 106 (826)

• (3)

13,029 Adjusted net debt 3,973

• 113

106 (774) 50 60 3,528 Other (30)

• (14)

(44) LTV liabilities 3,943

• 113

106 (774) 50 46 3,484 LTV 28.4% 0.5% 0.6% 0.5% (4.1%) 0.4% 0.4% 26.7%

On a proportionally consolidated basis including the Group's share of Joint ventures and Funds and excluding non-controlling interests in the Group's subsidiaries.

68

Debt metrics

Proportionally Consolidated 31 Mar 2018 30 Sept 2018 Loan to value (LTV) 28.4% 26.7% Weighted average interest rate 2.8% 2.9% Interest cover 4.0x 3.7x Weighted average maturity of drawn debt 8.6yrs 8.5yrs Group 31 Mar 2018 30 Sept 2018 Loan to value (LTV) 22.1% 20.1% Available undrawn facilities £1.2bn £1.5bn Weighted average interest rate 2.0% 2.2% Interest cover 5.3x 5.0x Senior unsecured credit rating (Fitch) A A

Including impact of repayment of secured Broadgate bonds and associated swaps, committed prior to 30 September 2018 and completed on 5 October 2018

69

Debt maturity (£m)

£m

On a proportionally consolidated basis including the group's share of joint ventures and funds and excluding non-controlling interests in the Group's subsidiaries. Reflects the repayment of £223m (£111m BL Share) Broadgate Bonds, completed October 2018.

200 400 600 800 1,000 1,200 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039

JVs – Securitisations (Secured) Sterling Bond (Unsecured) Funds – Bank drawn (Secured) Convertible Bond (Unsecured) Debenture & loan notes (Secured) Bank RCF Drawn (Unsecured) US Private Placements (Unsecured) Bank RCF Undrawn (Unsecured)

70

Debt financing – diverse profile

• £1.3bn of financing activity,

including £1.1bn of new facilities – Amended and extended our largest syndicated RCF at £735m – Issued new £231m USPP – Repaid £223m (£111m BL%) of secured Broadgate bonds, removing properties from the securitisation and increasing

• ur flexibility
• LTV reduced from 28.4% to 26.7%
• Weighted average interest rate of 2.9%
• Average drawn debt term 8.5 years
• Senior unsecured credit rating of ‘A’ (Fitch)

£3.8bn Drawn Debt1 (30 September 2018)

1 Proportionally consolidated. HUT’s debt shown at our share (£0.4bn) within JV & Funds. Reflects the repayment of £223m (£111m BL Share) Broadgate Bonds, completed October 2018.

£0.3bn £0.6bn £0.4bn £0.3bn £0.6bn £1.2bn £0.4bn Bank RCFs Drawn (Unsecured) US Private Placements (Unsecured) Convertible Bond (Unsecured) Sterling Bond (Unsecured) Debentures & loan notes (Secured) JVs Securitisations (Secured) JV & Funds Loans (Secured)

71

Valuation growth drivers – Offices

6 months to September 2018 Valuation £m Movement £m Movement %1 Yield movement bps2 ERV Growth %2 H1 H1 H1 West End 4,097 14 0.3

• 0.2

City 2,033 36 1.4 +1 0.1 Offices 6,130 50 0.7 +1 0.2

Ca m p uses rep resent 8 0 % of the Offices p ortfolio

1 Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales 2 Excluding committed developments, assets held for development and residential assets

72

Valuation growth drivers – Retail

6 months to September 2018 Valuation £m Movement £m Movement %1 Yield movement bps2 ERV Growth %2 H1 H1 H1 Regional 2,950 (122) (4.0) +9 (0.8) Local 2,217 (163) (6.8) +20 (2.5) Multi-let 5,167 (285) (5.2) +14 (1.6) Other 1,138 (22) (1.7) +13 (1.4) Retail 6,305 (307) (4.5) +14 (1.5)

Multi-let a ssets rep resent 8 2% of the Reta il p ortfolio

1 Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales 2 Excluding committed developments, assets held for development and residential assets

73

Retail Portfolio Valuation – previous classification

At 30 September 2018 Group JVs & Funds Total H1 Change1 £m £m £m % £m Shopping parks 1,827 1,105 2,932 (5.5) (175) Shopping centres 1,116 1,132 2,248 (3.7) (87) Superstores 96 262 358 (0.7) (3) Department stores 147

• 147

(24.9) (49) High Street 179 1 180 (1.1) (2) Leisure 424 16 440 2.0 9 Retail & Leisure 3,789 2,516 6,305 (4.5) (307)

On a proportionally consolidated basis including the group's share of joint ventures and funds

1 Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales

74

Portfolio valuation by sector

At 30 September 2018 Group JVs & Funds Total H1 Change1 £m £m £m % £m West End 4,097

• 4,097

0.3 14 City 118 1,915 2,033 1.4 36 Offices 4,215 1,915 6,130 0.7 50 Regional 1,087 1,863 2,950 (4.0) (122) Local 1,826 391 2,217 (6.8) (163) Multi-let 2,913 2,254 5,167 (5.2) (285) Department Stores and Leisure 539

• 539

(3.1) (18) Superstores 96 262 358 (0.7) (3) Solus and Other 241

• 241

(0.2) (1) Retail 3,789 2,516 6,305 (4.5) (307) Residential2 108 20 128 (3.1) (4) Canada Water 293

• 293

0.3 1 Total 8,405 4,451 12,856 (1.9) (260) Standing Investments 7,941 3,977 11,918 (2.5) (323) Developments 464 474 938 7.2 63

On a proportionally consolidated basis including the group's share of joint ventures and funds

1 Valuation movement during the period (after taking account of capital expenditure) of properties held at the balance sheet date, including developments (classified by end use), purchases and sales 2 Standalone residential

75

Portfolio weighting

At 30 September 2018 2017 % 2018 (current) % 2018 (current) £m 2018 (pro-forma1) % West End 30.6 31.9 4,097 32.0 City 17.6 15.8 2,033 17.5 Offices 48.2 47.7 6,130 49.5 Regional 22.1 22.9 2,950 22.3 Local 16.3 17.2 2,217 16.5 Multi-let 38.4 40.1 5,167 38.8 Department Stores and Leisure 4.4 4.2 539 4.0 Superstores 3.3 2.8 358 2.7 Solus and Other 2.7 1.9 241 1.8 Retail 48.8 49.0 6,305 47.3 Residential2 1.0 1.0 128 1.0 Canada Water 2.0 2.3 293 2.2 Total 100.0 100.0 12,856 100.0 Of which London 57% 58% 7,428 60%

On a proportionally consolidated basis including the group's share of joint ventures and funds

1 Pro forma for developments under construction and committed developments at estimated end value (as determined by the Group’s external valuers), excludes Clarges Residential 2 Standalone residential

76

Lease length and occupancy

At 30 September 2018 Average Lease Length (yrs) Occupancy Rate (%)1 To Expiry To Break EPRA Occupancy Occupancy2,4 West End 8.2 6.7 97.0 97.8 City 6.3 5.5 98.4 98.9 Offices 7.5 6.3 97.4 98.2 Regional 7.3 6.1 96.5 97.3 Local 7.0 5.8 96.7 97.0 Multi-let 7.2 6.0 96.6 97.1 Department Stores and Leisure 15.9 15.9 99.8 99.8 Superstores 8.9 8.8 100.0 100.0 Solus and Other 11.7 10.7 100.0 100.0 Retail 8.3 7.3 97.1 97.6 Canada Water3 6.0 5.8 95.4 97.1 Total 8.0 6.9 97.2 97.8

1 Space allocated to Storey is shown as occupied where there is a Storey tenant in place otherwise it is shown as vacant. Total occupancy would rise from 97.8% to 97.9% if Storey

space were assumed to be fully let.

2 Including accommodation under offer or subject to asset management 3 Reflects standing investment only. Removing the impact of Tesco reduces the term to break to 3.2 years. 4 Where occupiers have entered administration or CVA but are still liable for rates, these are treated as occupied. Reflecting units currently occupied but expected to become vacant,

then the occupancy rate for Retail would reduce from 97.6% to 96.1%, and total occupancy would reduce from 97.8% to 97.0%

77

Portfolio net yields1,2

At 30 September 2018 EPRA net initial yield % EPRA topped up net initial yield %

3

Overall topped up net initial yield %

4

Net equivalent yield % Net equivalent yield movement bps Net reversionary yield % ERV Growth %

5

West End 3.6 4.0 4.0 4.3

• 4.7

0.2 City 4.4 4.5 4.5 4.7 1 5.3 0.1 Offices 3.9 4.2 4.2 4.4 1 4.9 0.2 Regional 4.5 4.7 4.8 5.1 9 5.2 (0.8) Local 5.2 5.3 5.4 5.7 20 5.5 (2.5) Multi-let 4.8 5.0 5.0 5.3 14 5.3 (1.6) Department Stores and Leisure 6.0 6.0 7.1 6.0 33 4.4 (2.8) Superstores 5.7 5.7 5.7 5.4 (1) 5.2 (0.2) Solus and Other 5.2 5.5 5.7 5.2 (13) 4.4 (0.1) Retail 5.0 5.1 5.3 5.4 14 5.2 (1.5) Canada Water6 3.1 3.2 3.2 3.9 (4) 3.8 0.4 Total 4.4 4.7 4.8 4.9 7 5.0 (0.8)

On a proportionally consolidated basis including the group's share of joint ventures and funds

1 Including notional purchaser's costs 2 Excluding committed developments, assets held for development and residential assets 3 Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of rental growth 4 Including fixed/minimum uplifts (excluded from EPRA definition) 5 As calculated by IPD 6 Reflects standing investment only

78

Retail Portfolio Net Yields1,2 – previous classification

At 30 September 2018 EPRA net initial yield % EPRA topped up net initial yield %

3

Overall topped up net initial yield %

4

Net equivalent yield % Net equivalent yield movement bps Net reversionary yield % ERV Growth %

5

Shopping parks 5.1 5.2 5.3 5.4 13 5.5 (2.1) Shopping centres 4.6 4.8 4.8 5.1 13 5.0 (0.1) Superstores 5.7 5.7 5.7 5.4 (1) 5.2 (0.2) Department stores 6.4 6.4 8.0 6.3 119 4.7 (18.4) High Street 3.3 3.4 3.4 4.9 (2) 5.2 (0.2) Leisure 5.9 5.9 6.8 6.1 2 4.6 (0.0) Retail 5.0 5.1 5.3 5.4 14 5.2 (1.5)

On a proportionally consolidated basis including the group's share of joint ventures and funds

1 Including notional purchaser's costs 2 Excluding committed developments and residential assets 3 Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of rental growth 4 Including fixed/minimum uplifts (excluded from EPRA definition) 5 As calculated by IPD

79

Annualised rent & estimated rental value (ERV)

At 30 September 2018 Annualised Rents (Valuation Basis) £m1 ERV £m Average Rent (£psf) Group JVs & Funds Total Total Contracted2 ERV West End3 137

• 137

179 57.9 66.8 City3 6 68 74 88 49.5 56.9 Offices3 143 68 211 267 54.8 63.2 Regional 59 90 149 167 31.3 33.9 Local 103 25 128 139 23.3 24.9 Multi-let 162 115 277 306 27.1 29.1 Department Stores and Leisure 34

• 34

26 17.8 13.2 Superstores 5 16 21 19 22.7 20.6 Solus and Other 13

• 13

11 19.8 16.8 Retail 214 131 345 362 25.2 25.8 Residential4 5

• 5

4 47.4 37.9 Canada Water5 8

• 8

10 17.9 21.8 Total 370 199 569 643 31.0 33.5

On a proportionally consolidated basis including the group's share of joint ventures and funds, excluding committed, near term and assets held for development

1 Gross rents plus, where rent reviews are outstanding, any increases to ERV (as determined by the Group’s external valuers), less any ground rents payable under head leases, excludes contracted rent subject

to rent free and future uplift

2 Annualised rent, plus rent subject to rent free 3 £psf metrics shown for office space only 4 Standalone residential 5 Reflects standing investment only

80

Rent subject to open market rent review

For the year to 31 March 2019 2020 2021 2022 2023 2019–21 2019–23 At 30 September 2018 £m £m £m £m £m £m £m West End 4 15 10 9 13 29 51 City 13 4 9

• 26

26 Offices 17 19 19 9 13 55 77 Regional 10 10 19 12 11 39 62 Local 9 11 12 6 18 32 56 Multi-let 19 21 31 18 29 71 118 Department Stores and Leisure 7

• 7

7 Superstores 3 8 6 1 1 17 19 Solus and Other

• Retail

29 29 37 19 30 95 144 Residential

• 1
• 1

Canada Water1

• Total

46 48 56 29 43 150 222

On a proportionally consolidated basis including the group's share of joint ventures and funds excluding committed, near term and assets held for development

1 Reflects standing investment only

81

Rent subject to lease break or expiry

For the year to 31 March 2019 2020 2021 2022 2023 2019–21 2019–23 At 30 September 2018 £m £m £m £m £m £m £m West End 3 4 20 22 25 27 74 City 4 14 9 1 3 27 31 Offices 7 18 29 23 28 54 105 Regional 10 15 9 13 20 34 67 Local 11 12 10 12 12 33 57 Multi-let 21 27 19 25 32 67 124 Department Stores and Leisure

• Superstores
• 2
• 2

Solus and Other 1

• 1

1 Retail 22 27 19 25 34 68 127 Residential

• 4
• 4

4 Canada Water1 1 1 1

• 1

3 4 Total 30 50 49 48 63 129 240 % of contracted rent 4.9% 8.3% 8.1% 8.1% 10.4% 21.3% 39.8%

On a proportionally consolidated basis including the group's share of joint ventures and funds excluding committed, near term and assets held for development

1 Reflects standing investment only

82

Contracted rental increases (cash flow basis)

For the year to 31 March 2019 2020 2021 2022 2023 2019–21 2019–23 At 30 September 2018 £m £m £m £m £m £m £m Expiry of rent free periods 9 15 1

• 25

25 Fixed uplifts (EPRA basis)

• 2
• 2

Fixed & minimum uplifts 1 1 1 1 1 3 5 Total 10 16 2 3 1 28 32

On a proportionally consolidated basis including the group's share of joint ventures and funds excluding committed, near term and assets held for development

83

Total Property Return (as calculated by IPD)

6 months to 30 September 2018 Offices Retail Total % British Land IPD British Land IPD British Land IPD Capital Return 0.8 1.3 (4.6) (2.2) (1.9) 1.1 – ERV Growth 0.2 0.6 (1.5) (1.1) (0.8) 0.3 – Yield Movement1 1 bps (3) bps 14 bps 5 bps 7 bps (5) bps Income Return 1.6 1.9 2.6 2.4 2.1 2.2 Total Property Return 2.5 3.2 (2.1) 0.2 0.2 3.3

1 Net equivalent yield movement

84

De-risked development pipeline focused on campuses

1 Finsbury Avenue 288,000 sq ft Completion Q1 2019

Committed Developments

100 Liverpool Street 521,000 sq ft Completion Q1 2020 Gateway Building 105,000 sq ft 135 Bishopsgate 334,000 sq ft Completion Q3 2019 1 Triton Square 366,000 sq ft Completion Q4 2020

Near term pipeline

Expected start 2019

Medium term pipeline

Blossom Street, Shoreditch 335,000 sq ft 1-2 Broadgate 533,000 sq ft 2-3 Finsbury Avenue 563,000 sq ft 5 Kingdom Street 371,000 sq ft Meadowhall Leisure 333,000 sq ft

• ERV of £63m
• 69% pre-let or under offer
• ERV of £27m
• Both schemes consented

Eden Walk, Kingston 533,000 sq ft

85

At 30 September 2018 Sector BL Share Sq ft PC Calendar Year Current Value Cost to Come ERV Let & Under Offer % '000 £m £m1 £m2 £m Committed Pipeline 1 Finsbury Avenue Office 50 288 Q1 2019 122 26 8.2 3.4 135 Bishopsgate Office 50 334 Q3 2019 121 54 9.6 9.0 Plymouth (Leisure) Retail 100 108 Q4 2019 20 21 3.2 2.0 100 Liverpool Street Office 50 521 Q1 2020 201 96 18.9 7.2 1 Triton Square4 Office 100 366 Q4 2020 251 156 23.1 21.8 Total Committed 1,617 715 353 63.0 43.4 Retail Capital Expenditure3 58

On a proportionally consolidated basis including the group's share of joint ventures and funds (except area which is shown at 100%)

1 From 1 October 2018. Cost to come excludes notional interest as interest is capitalised individually on each development at our capitalisation rate 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 3 Capex committed and underway within our investment portfolio relating to leasing and asset management 4 ERV let & under offer of £21.8m represents space taken by Dentsu Aegis. As part of this letting, Dentsu Aegis have an option to return their existing space at 10 Triton Street in 2021.

If this option is exercised, there is an adjustment to the rent free period in respect of the letting at 1 Triton Square to compensate British Land

Committed developments

86

Near term development pipeline

At 30 September 2018 Sector BL Share Sq ft Expected Start on Site Current Value Cost to Come ERV Let & Under Offer Planning Status % '000 Calendar Year £m £m1 £m2 £m Near term Pipeline Blossom Street, Shoreditch Office 100 335 Q2 2019 23 241 20.6

• Consented

Gateway Building Leisure 100 105 Q3 2019 7 123 6.0

• Consented

Total Near Term 440 30 364 26.6

• Retail Capital Expenditure3

102

On a proportionally consolidated basis including the group's share of joint ventures and funds (except area which is shown at 100%)

1 From 1 October 2018. Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 3 Forecast capital commitments within our investment portfolio over the next 12 months relating to leasing and asset enhancement

87

Medium term development pipeline

1 Planning consent for previous 240,000 sq ft scheme 2 Canada Water site covers 5m sq ft in total based on net area based on gross area of up to 7m sq ft 3Phase 1 consists of Phase 1a, 1b, 1c. Detailed planning submitted for Phase 1a, outline planning submitted for total Phase 1 4On drawdown of the Master Development Agreement, ownership reduces to 80% with LBS owning 20%. LBS ownership will adjust over time depending on level of investment by Southwark

At 30 September 2018 Sector BL Share Sq ft Planning status % '000 Medium term Pipeline 2-3 Finsbury Avenue Office 50 563 Consented 1-2 Broadgate Office 50 533 Submitted 5 Kingdom Street Office 100 371 Consented1 Meadowhall (Leisure) Retail 50 333 Consented Ealing – 10-40 The Broadway Retail 100 298 Pre-submission Aldgate Place Phase 2 Residential 50 145 Consented Eden Walk Retail & Residential Mixed Use 50 533 Consented Plymouth, George Street Retail 100 45 Pre-submission Total Medium Term excl. Canada Water 2,821 Canada Water Phase 12,3,4 Mixed Use 100 1,917 Submitted outline

88

Estimated future development spend and capitalised interest

At 30 September 2018 PC Calendar Year Cost to Come £m (excluding notional interest) – 6 months breakdown Mar-19 Sep-19 Mar-20 Sept-20 Mar-21 Sept-21 Mar-22 Sept-22 1 Finsbury Avenue Q1 2019 24 1 1

• 135 Bishopsgate

Q3 2019 33 17 2 2

• Plymouth (Leisure)

Q4 2019 13 6 2

• 100 Liverpool Street

Q1 2020 47 27 9 8 5

• 1 Triton Square

Q4 2020 41 40 40 16 19

• Total Committed

158 91 54 26 24

• Blossom Street, Shoreditch

2022 16 10 11 35 45 45 35 30 Gateway Building 2023

• 20

5 5 14 20 21 Total Near Term 16 10 31 40 50 59 55 51 Indicative Interest Capitalised

• n above at attributable rates1

3 2 2 1 1 1 1 1 Contracted Residential receipts to come2 106

• 1 Assumes interest capitalised at 2% on qualifying expenditure for developments

2 Includes sale exchanged post period end. Does not include book value of units not yet sold of £123m

89

Canada Water – Illustrative Scheme

Ma sterp la n First d eta iled p lots Outline Submitted Detailed planning submitted in May 18 Total NIA (sq ft) 5.0m 0.6m Commercial (sq ft) 2.1m 0.3m Retail & Leisure (sq ft) 0.7m 0.1m New Homes (units) 3,000 265

A1 A2 K1 L1 H1 H2 H3 L2 D1 D2 M1

Note: The figures above are indicative and are likely to change as development plans evolve

Buildings highlighted above reflect indicative First Major Scheme, totaling 1.9m sq ft

90

2010 2011 2012 2014 2015 2016 2017 2018 2019 2013 2020

Canada Water: key milestones and timeline

Target grant of planning Earliest possible start on site Acquisition of 50% of Surrey Quays shopping centre 23 acres Conditional agreement to acquire Printworks 14.5 acres Remaining 50% of Surrey Quays shopping centre acquired 23 acres Surrey Quays leisure park acquired 8.5 acres MDA signed with Southwark Council Planning application submitted

91

0.0 2.0 4.0 6.0 8.0 10.0 12.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Central London development pipeline

Note: Forecast reflects CBRE’s estimate of earliest completions. Central London comprises the City, Docklands, Midtown, Southbank and West End areas.

Source: CBRE

m sq ft 4.8m 4.3m

Completed U/C Pre-let Pipeline Pre-let U/C – Speculative Potential Speculative 10 year average new and under-construction take-up 10 year average development completions

Q3 20 18

92

West End development pipeline

Note: Forecast reflects CBRE’s estimate of earliest completions

0.0 0.5 1.0 1.5 2.0 2.5 3.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 1.1m 1.0m

Completed U/C Pre-let Pipeline Pre-let U/C – Speculative Potential Speculative 10 year average new and under-construction take-up 10 year average development completions Source: CBRE

m sq ft

Q3 20 18

93

City development pipeline

Note: Forecast reflects CBRE’s estimate of earliest completions

0.0 1.0 2.0 3.0 4.0 5.0 6.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2.4m 2.1m

Completed U/C Pre-let Pipeline Pre-let U/C – Speculative Potential Speculative 10 year average new and under-construction take-up 10 year average development completions

m sq ft

Source: CBRE

Q3 20 18

94

0.0 2.0 4.0 6.0 8.0 10.0

Property Yields and interest rate yield gap

Source: IPD

% NIY % Q3 2018

Source: IPD/Bloomberg

(2)

• 2

4 6 8 10 1994 1997 2000 2002 2005 2007 2010 2012 2015 2017

All Retail Central London Offices Yield Group UK 10 Year Gift Yield IPD All Property Net Initial Yield

Reta il a nd Lond on Office Yield s Prop erty Yield v s 10 Yea r Gilt Yield s

95

London office market rental outlook

£ psf 20 40 60 80 100 120 140 2000 1995 1990 2010 2005 2020 2015

Forecast

Source: CBRE (historic) and Average Agents' Consensus (including PMA) for forecasts

Actual

West End City

Prim e Lond on Office Rents

96

2 4 6 8 10 12 14 16 18 20 1985 1990 1995 2000 2005 2010 2015 Q3 2018

Vacancy Central London

5.5% 3.7%

Source: CBRE (historic)

West End West End 10 year average City City 10 year average

W est End & City Va ca ncy Ra tes

97

Sustainability – Half Year highlights

Custom er Orientation

W ellbeing

• We published a new report, A Design

for Life, quantifying the benefits of integrating design that supports good mental and physical health. The report showed that designing the urban environment around wellbeing had the potential to boost the UK economy by £15.3bn over a development cycle, as well as help individuals to live happier, more connected and fulfilling lives

• Our investment in the public realm

at Glasgow Fort has contributed to a 17% increase in visit frequency

• ver the last year and a 6% increase

in dwell time.

Capital Efficiency

Futurep roofing

• The re-use of materials in our re-

development of 1 Triton Square, Regent’s Place, has resulted in 35,000 tons of concrete and 1,877 tons of steel being reused. The emissions avoided are equivalent to powering the building for 26 years

• Following last year’s refurbishment,

Meadowhall achieved a BREEAM In- Use rating of ‘Outstanding’ and is currently installing 3,148 panels of solar PV on-site.

Expert People

Skills & op p ortunity

• The Retail & Skills Centre at Fort

Kinnaird celebrated its fifth anniversary by winning the Collaborators Award from Estates Gazette. Established in 2013 with three local councils, the Capital City Partnership, Department for Work & Pensions and Skills Development Scotland, the Centre has trained 2,663 people and helped 3,585 people into work.

• Our partnership with the National

Literacy Trust has won a Charity Times Award. Over 34,000 young readers at primary schools across the UK have been supported in improving their literacy by employees of British Land and our customers over the last seven years and we are beginning to help the charity in their work with children of pre-school age.

Right Places

Com m unity

• British Land came 2nd in the

2018 UK GivX benchmark, which puts a value on corporate community investment

• Our Regent’s Place Community

Fund has attracted new partners and doubled its annual donations to £59,000. This will be invested in local projects supporting employability, social cohesion, health and wellbeing

• Our team won an award from the

British Heart Foundation, recognising the £1m generated from donations collected by our centre teams over the last seven years.

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20 18 p erform a nce

Sustainability Indices

MSCI disclaimer available http://www.britishland.com/sustainability/performance/benchmarks

1 Sector specific percentile ranking

Global Real Estate Sustainability Benchmark 2018: Green star for 9th year FTSE4Good1 2018: 96th percentile Sustainalytics ESG Ratings1 2018: 98th percentile DJSI World & Europe1 2018: 92nd percentile EPRA Sustainability Reporting Awards 2018: Gold for 7th year MSCI ESG Ratings 2018: AAA rating

Other b enchm a rks a nd a w a rd s

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Disclaimer

The information contained in this presentation has been extracted largely from the Half Year Results Announcement for the period ended 30 September 2018. This presentation may contain certain “forward-looking” statements. Such statements reflect current views on, among other things, our markets, activities, projections, objectives and

• prospects. Such ‘forward-looking’ statements can sometimes, but not always, be identified by their reference to a date or point in the future or the use of ‘forward-looking’ terminology,

including terms such as ‘believes’, ‘estimates’, ‘anticipates’, ‘expects’, ‘forecasts’, ‘intends’, ‘due’, ‘plans’, ‘projects’, ‘goal’, ‘outlook’, ‘schedule’, ‘target’, ‘aim’, ‘may’, ‘likely to’, ‘will’, ‘would’, ‘could’, ‘should’ or similar expressions or in each case their negative or other variations or comparable terminology. By their nature, forward-looking statements involve inherent risks, assumptions and uncertainties because they relate to future events and circumstances which may or may not occur and may be beyond our ability to control or predict. Actual outcomes and results may differ materially from any outcomes or results expressed or implied by such forward-looking

• statements. Any forward-looking statements made by or on behalf of British Land speak only as of the date they are made.

Other than in accordance with our legal and regulatory obligations (including under the UK Financial Conduct Authority’s Listing Rules and the Disclosure Rules and Transparency Rules, and the Market Abuse Regulation), British Land does not undertake to update forward-looking statements to reflect any changes in British Land’s expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Important factors that could cause actual results, performance or achievements

• f British Land to differ materially from any outcomes or results expressed or implied by such forward-looking statements are set out in the section headed “forward-looking statements”

in the Half Year Results Announcement. Information contained in this presentation relating to British Land or its share price or the yield on its shares are not guarantees of, and should not be relied upon as an indicator of, future performance. Nothing in this presentation should be construed as a profit forecast or profit estimate. This presentation is published solely for information purposes. This presentation does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any security, nor a solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable law. No representation or warranty, either express or implied, is given (whether by British Land or any of its associates, directors, officers, employees or advisers) in relation to the accuracy, completeness or reliability of the information contained herein, including as to the completeness or accuracy of any forward-looking statements

• r the basis on which they were prepared.

Certain of the information contained in this presentation has been obtained from published sources prepared by other parties. Certain other information has been extracted from unpublished sources prepared by other parties which have been made available to British Land. British Land has not carried out an independent investigation to verify the accuracy and completeness of such third party information. No responsibility is accepted by British Land or any of associates, directors, officers, employees or advisers for the accuracy or completeness of such information. The distribution of this presentation in jurisdictions other than the UK may be restricted by law and regulation and therefore any persons who are subject to the laws of any jurisdiction

• ther than the UK should inform themselves about, and observe, any applicable requirements. This presentation has been prepared for the purpose of complying with English law

and regulation and the information disclosed may not be the same as that which would have been disclosed if this presentation had been prepared in accordance with the laws of jurisdictions outside the UK. All opinions expressed in this presentation are subject to change without notice and may differ from opinions expressed elsewhere. This presentation has been presented in £, £ms and £bns. Certain totals and change movements are impacted by the effect of rounding.