Half Year Results Presentation 6 months to 30 September 2015 www.britishland.com @BritishLandPLC #BLHY2015 $BLND
Results Overview Chris Grigg Chief Executive
Highlights • Strong set of results • Strengthening ERV in London • Positive momentum in Retail • Driving income growth • Positive leading indicators 3
Focused investment activity Growing in Investing Creating great London and around environments the South East infrastructure Understanding Internet Profitable our customers resilient retail development 4
Broadly balanced investment activity £ 860 m Investment Activity Gross investment £m Net Spend £ 343m £ 395m (£ 19m ) £ 626m (£ 315m ) (£ 2m ) 1,200 800 400 0 -400 -800 -1,200 2011 2012 2013 2014 2015 YTD 2016 -1,600 Disposals Acquisitions & Development (ex retail capex) Net Spend 5
Financial highlights 9 % 6 months total accounting return HY to 30 September 2015 Change NAV per Share 891p +7.5% Valuation £14.4bn +4.7% Total Property Return 6.9% Underlying Profit Before Tax £171m +10.3% Dividend per Share 14.2p +2.5% Total Accounting Return 9.1% 6
Valuation performance 4.7 % • Valuation ahead in both sectors Increase in valuation – +8.2% in Offices & Residential Contribution to valuation uplift – +1.8% in Retail & Leisure • Asset management and development contributed nearly 40% of uplift • Yield shift was an important driver • Continuing to outperform market – Total returns 10bps ahead Yield movement Development Asset management 7
Driving rental growth 5.7 % • Positive occupational markets Investment lettings/ renewals vs ERV • Signing new space at attractive terms vs ERV • Feeding through to rent reviews and underlying income • LFL income growth strong in Offices (7.4%); positive in Retail (1.1%) HY to 30 September 2015 Retail Offices Total Lettings/renewals (000 sq ft) 365 208 573 Lettings/renewals under offer (000 sq ft) 327 41 368 Investment lettings/renewals vs ERV 6.6% 5.0% 5.7% Rent reviews vs passing rent 4.0% 4.8% 4.3% Occupancy 98.6% 98.1% 98.4% ERV growth 0.9%* 4.5% 2.3% * 1.4% on the multi-let portfolio 8
Offices – leasing well 5.0 % • Portfolio virtually full Lettings/ renewals ahead of ERV 10% • Over 200,000 sq ft of lettings/renewals 6% • 160,000 sq ft at the Leadenhall Building, breaking £90 psf 9% 48% • 41,500 sq ft under offer, 12% ahead of ERV • Focus on driving rental growth • 720,000 sq ft of rent reviews 27% in the next 18 months Banks & Financial Services Business/Professional Services Food & Beverage Industrial Other 9
Offices & Residential valuation performance 8.2 % • Stronger ERV performance Offices & Residential valuation growth • Yield shift continuing to make a strong contribution • Outperformed IPD capital returns by 110 bps HY to 30 September 2015 Valuation uplift ERV growth City 8.5% 5.1% West End 8.1% 4.1% Total (including Residential) 8.2% 4.5% 10
Transforming Broadgate into a world-class central London destination Tech City Shoreditch Start-up Creative sector 2 1 5 BROADGATE Spitalfields Barbican Cultural hub Modern markets 3 £ 121 psf The City Average retail rent 4 Financial Centre vs. nearly £600 psf for Oxford Street 150 m Footfall at Liverpool Street 11
Broadgate development pipeline 2-3 Finsbury Avenue Advancing plans 190,000 sq ft (existing space) 10 0 Liverpool Street Planning consent received 3 1 Finsbury Avenue Resolution to grant planning consent received 2 517,000 sq ft 1 300,000 sq ft 12
Paddington Central – improving the public realm 4 Kingdom Street 2 Kingdom Street Kitchen garden Woodland garden Library 1 Kingdom Street Gam es room 13
Paddington Central – progressing development 5 Kingdom Street 4 Kingdom Street Progressing plans for 5 Kingdom Street Core at 4 Kingdom Street now complete 14
Regent’s Place – future opportunities Refurbishm ent/ Rent reviews Refurbishm ent redevelopm ent 10-20 Triton Street 338 Euston Road 1 Triton Square 375,000 sq ft 115,000 sq ft 220,000 sq ft £ 49 passing rent psf £ 41 passing rent psf £ 45 passing rent psf 15
Retail operational metrics remain strong Footfall + 1.9 % Footfall + 5.5 % Retailer same store sales + 3.3 %; to £5.6bn ahead of market by across shopping parks 30 0 bps Source: Springboard and Experian Source: Springboard and Experian Source: British Land, Springboard Click & collect 50 % Occupancy remaining Average rent to sales high at 98 .6 % less than 10 % ahead of national average Source: British Land Source: BL Consumer Surveys, CACI Source: British Land 16
Retail – good demand from high quality occupiers Lettings and renewals by sector by rent Taking space out of town 7% 3% 9% 31% 12% 16% 22% Fashion & Footwear Health and Beauty General Retail DIY Food & Beverage Electrical & Mobile Phone Other 17
Retail – leasing at attractive rates 6.6 % Lettings/ renew als ahead of ERV Peak rent Recent signings Gla sgow Fort £83 per sq ft 1,200 sq ft £60 Stockton per sq ft 2,000 sq ft Ea ling £50 A3 Broa d w a y per sq ft 3,000 sq ft 18
Continued ERV growth in Retail 1.4 % Portfolio rental growth vs IPD Rental growth on multi-let assets Index Mar-10 =100 110 105 100 95 90 85 80 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 BL ERV (All Retail) IPD ERV (All Retail) IPD ERV (Secondary Retail) Source: IPD, 2015; BL Portfolio data 19
Retail & Leisure valuation performance 2.2 % • Performance driven by multi-let portfolio Uplift on multi-let assets • Capital returns in line with IPD • Multi-let portfolio capital returns 30 bps ahead of IPD HY to 30 September 2015 Valuation uplift ERV growth Multi-let 2.2% 1.4% Superstores (1.6)% (0.9)% Other 2.4% 0.2% Total 1.8% 0.9% 20
Continued evolution of the Retail portfolio £260 million asset disposals Superstores Non-strategic retail parks £145 million investment Investing in HUT Extensions & developments Small scale capex £ 95 million £ 10 million £ 40 million (Taking share to 75%) • Glasgow Fort • Oldham • Whiteley Leisure • Swindon • £1.5bn shopping park portfolio • Broughton Chester • Tollgate Colchester 21
Driving preference at New Mersey Shopping Park, Speke 3rd 10 m Largest Annual shopping park footfall in the UK 36% 11 m in Visitors use click Average drive & collect time New Mersey Shopping Park today Proposed leisure extension 22
Investment driving performance – Meadowhall Park Lane Refurbishment helped convert target retailers
Investment driving performance – Meadowhall Refurbishment New additions On site with a £ 55 m refurbishment Attracting new occupiers
Growing our London campuses through development Broadgate Paddington Regent’s Place Canada Water Central 1 million sq ft 390,000 sq ft 220,000 sq ft c. 5.5 million sq ft • 100 Liverpool Street • 4 Kingdom Street • 338 Euston Road • Mixed use, including retail, offices and residential • 1 Finsbury Avenue • 5 Kingdom Street • 1 Triton Square • 2-3 Finsbury Avenue 25
Leisure extensions 26 New Mersey, Speke 230,000 sq ft Retail development Meadowhall 330,000 sq ft (inc. residential) 560,000 sq ft Eden Walk
Canada Water Canada Water 46 acre development opportunity in zone 2
Financial Review Lucind a Bell Chief Financial Officer
Highlights Period to H1 2015 H1 2016 Change Underlying Profit before Tax (£m) 155 171 10.3% Underlying Earnings per Share (p) 15.3 16.0 4.6% Dividend per Share (p) 13.84 14.18 2.5% As at H2 2015 H1 2016 Change Valuation Performance 5.2% 4.7% EPRA Net Asset Value per Share (p) 829 891 7.5% LTV 35% 34% H1 Total Accounting Return 13.7% 9.1% 29
Underlying profit bridge £m (6) 6 (3) 8 11 171 155 H1 2015 Financing Development Like-for-Like Administration Other H1 2016 activities rental growth expenses 30
Net rental income movement £m 22 (23) 6 12 Retail 1.1% Offices 7.4% 309 292 Total 3.3% H1 2015 Developments Like-for-Like Acquisitions Disposals H1 2016 rental growth 31
Reducing financing costs £m 11 (5) 5 (4) (103) (96) H1 2015 Financing activities Acquisitions Disposals Developments H1 2016 32
Income statement HY to 30 September H1 2015 H1 2016 Change Net Rental Income (£m) 292 309 5.8% Fees & Other Income (£m) 7 5 Administrative Expenses (£m) (41) (47) Net Finance Costs (£m) (103) (96) Underlying PBT (£m) 155 171 10.3% Underlying Earnings per Share (p) 15.3 16.0 4.6% 33
Continued valuation performance HY to Valuation Uplift Uplift Yield ERV NEY Weighting London/SE September 2015 £bn £m % Compression Growth % % Weighting bps % % Retail & Leisure 7.6 139 1.8 8 0.9 5.0 51 Offices & 6.8 523 8.2 49 Residential – Of which Offices 6.5 506 8.3 20 4.5 4.4 46 Total 14.4 662 4.7 13 2.3 4.7 100 65 – Of which Standing 13.7 602 4.5 Investments – Of which 0.7 60 8.5 Development 34
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