HALF YEAR RESULTS PRESENTATION HALF YEAR ENDED 30 SEPTEMBER 2013 - - PowerPoint PPT Presentation

WWW.BRITISHLAND.COM HALF YEAR ENDED 30 SEPTEMBER 2013

HALF YEAR RESULTS PRESENTATION

RESULTS OVERVIEW

Chris Grigg Chief Executive

1

INTRODUCTION

• A strong set of results

– Improving performance from Retail – Further step-up in Offices’ performance

• Successfully executing our plan

– Investing our placing proceeds – Increasing our development pipeline

2

3

PERFORMANCE HIGHLIGHTS

HY to 30 September % Change UK Valuation £11.2bn +2.8% Capital Returns vs IPD +100bps NAV per Share 623p +4.5% Dividend per Share 13.5p +2.3% 6 month Total Accounting Return 6.8%

• 80

20 120 220 320

Asset Management Development Yield Movement Total Valuation

MATERIAL IMPROVEMENT IN VALUATIONS

4

UK Valuation Drivers

£m

H1 2012/13 H2 2012/13 H1 2013/14

£22m £90m £309m

TOTAL VALUATION MOVEMENT

STRONGER LETTING ACTIVITY

• Investment lettings and renewals at 5.4% ahead of ERV

Future Annual Rent Added Increased Letting Activity

6.1 9.8 14.1

H1 2012/13 H2 2012/13 H1 2013/14 Lettings/renewals and Rent Reviews

Sq ft 000’s £m

5

410 433 609 59 110 322

H1 2012/13 H2 2013/13 H1 2013/14 Investment Lettings Development Lettings

INVESTING IN LINE WITH STRATEGY ADDING FUTURE GROWTH TO THE PORTFOLIO

6

Rebuilding

• ur

development pipeline Successfully investing placing proceeds Accelerating asset sales

• £1.1bn recently committed/near term development pipeline
• Focused on London offices and residential
• Significant profit potential
• Proceeds fully deployed ahead of expectations
• Largest deal Paddington Central (£470m)
• Expected to be accretive to earnings in current year
• Taking advantage of investment market strength to sell
• Sale of mature UK retail assets
• Proceeds reinvested in high quality locally dominant schemes
• Sale of Puerto Venecia reduces European exposure to 1%

1 2 3

RETAIL

7

IMPROVING RETAIL PERFORMANCE

• Strengthening capital returns (+1.5%) after 18 months of declines
• Performance driven by yield compression and asset management
• Continue to outperform IPD across all subsectors

Capital Returns (%) H1 2012/13 H2 2012/13 H1 2013/14 Retail Parks (2.3) (0.8) 1.0 Superstores 0.5 (1.1) 2.1 Shopping Centres (0.3) (1.0) 0.3 Department Stores (0.6) 3.2 6.5 Leisure 0.0 (0.2) 2.0 UK Retail (1.0) (0.6) 1.5

8

9

CONTINUED RETAIL POLARISATION

Retail Occupancy Retail ERV Growth Indexed March 2010 = 100 %

97.4 98.0 94.7 95.3 88.3 88.9 Mar 13 Sep 13

BL All Retail IPD All Retail IPD Secondary

85 90 95 100 105

BL All Retail IPD All Retail IPD Secondary

Mar 10 Sep 10 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13

10

Increased Lettings/Renewals

STRONG RETAIL ASSET MANAGEMENT

• Leasing activity significantly ahead
• f last half year
• Lettings/renewals 3.8% ahead
• f ERV
• Administration down to 0.2% of total

rent (from 0.9%)

• Occupancy up 60bps to 98.0%
• Continue to outperform on footfall

224 150 29 403 354 271 97 721

Retail Parks Shopping Centres Development Total Retail

H1 2012/13 H1 2013/14

Sq ft 000s

11

BREADTH AND QUALITY OF OFFER IN RETAIL

Food & Leisure

75,000sq ft

• Costa at Bradford, Elgin, Lincoln
• Giraffe at Milton Keynes
• Wagamama at Whiteley
• Ed’s Diner at Meadowhall
• Cineworld at Whiteley

Fashion

248,000sq ft

• Nike at Rotherham and Chester
• Outfit at Stockton
• Schuh at Glasgow Fort
• Fat Face at Drake Circus, Plymouth
• JD Sports at Ealing

Homewares

125,000sq ft

• Wren Kitchens at Colchester and Oxford
• CSL at Stockton
• Next Home at Colchester
• Harvey’s at Bradford, Wakefield and Oldham

TAKING ADVANTAGE OF MARKET STRENGTH RECYCLING RETAIL ASSETS

12

• Increase in pace of asset sales
• £311m of retail assets sold to year to date; £243m sold last year
• Over £80m of deals under offer; more than £100m in the market

Retail Asset Sales (Year to Date) No of Assets Sale Price Retail Parks 3 £70m Foodstores 2 £15m Shopping Centres 2 £215m High Street 1 £11m Total 8 £311m

INVESTING IN THE RIGHT RETAIL LOCATIONS SOUTHGATE, BATH

430,000sq ft Top 10

Bath as a UK Tourist Destination

18m

Visitors pa

50% acquired for

£101m

13

INVESTING IN THE RIGHT RETAIL LOCATIONS SOUTHGATE, BATH

Modern retail formats Great brands Bought significantly below replacement cost Growth potential

• Affordable rents
• Improving the occupier mix
• 5.7% yield when fully let

14

DEVELOPING IN THE RIGHT RETAIL LOCATIONS WHITELEY SHOPPING

15

320,000 sq ft scheme completed in May 7.8% yield on cost Highly affordable

• Rents £25 - £45psf
• Service charge:

£3.50psf Planning for 60,000 sq ft leisure scheme Nearly 2.5m shoppers since

• pening

£90m estimated annual sales

OFFICES AND RESIDENTIAL

16

ANOTHER STRONG OFFICE PERFORMANCE

• Strong performance with capital returns of 5.4%
• Capital returns driven by both standing investments, 3.4% and

developments, 11.1%

• Outperformed IPD across sector and subsectors

17

Capital Returns (%) H1 2012/13 H2 2012/13 H1 2013/14 West End 3.6 6.2 6.9 City 1.5 1.4 3.8 BL Offices 2.3 3.4 5.4 Residential 4.8 3.1 3.6 BL Offices and Residential 2.4 3.3 5.4

West End City

64% 36% 43% 57% 41% 59%

BENEFITING FROM INCREASED WEST END EXPOSURE

18

£2.7bn £4.5bn

SEP 2013 (Reported) SEP 2013 Including NDV of committed developments

£5.5bn

MARCH 2010

36%

STRONG OFFICE ASSET MANAGEMENT

• Step up in letting activity across

investment and developments

• 439,000 sq ft of lettings/extensions

– 9.5% ahead of ERV – Further 142,000 sq ft under offer

• Occupancy at 94.7% reflecting

completion and acquisitions

– City occupancy – 97.0% – West End occupancy – 92.8%

19

Letting Activity by Sector

Insurance TMT 37% 12% 8% 7% 3% 2% Insurance 31%

TMT Insurance Corporate Other Financial Legal Oil & Gas

20

10-30 BROCK STREET

£20.1m ERV; 88% pre-let

Profit on cost of over 60% 10 PORTMAN SQUARE

£9.7m ERV; 51% pre-let

Profit on cost of over 50% CLARGES

11% valuation uplift

Start on site Dec 2013

DELIVERING PERFORMANCE THROUGH DEVELOPMENTS

• Completed 637,000 sq ft of London developments
• 262,000 sq ft development pre-lets agreed/under offer

OBTAINED PLANNING COMPLETED COMPLETED

21

CREATING OUTSTANDING SPACES – REGENT’S PLACE

10-30 Brock Street Completion another significant milestone 10 Brock Street 100% let 3 months after completion Secures additional £18m of rent for 16 years

Manchester City FC

22

DELIVERING RENTAL GROWTH – REGENT’S PLACE

70 65 60 55 50 45

10/20 Triton St 20 Triton St 10/30 Brock Street

Debenhams

£ PSF

2009/10 2010/11 2011/12 2012/13 2013/14

42.50psf 70psf

Manchester City FC

DELIVERING STRONG RETURNS FROM 2010 OFFICE DEVELOPMENT PROGRAMME

• Profit on cost over 40%; IRRs of c30%

23

65 133 167 216 297 400 192 188 192 175 126 90 Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13 Profit Taken Profit to Come

£257m £321m £359m £391m £423m £490m

£m

24

PADDINGTON CENTRAL

Acquired for

£470m

Fully let yield of

6.2%

Significant

• pportunity to create

value from asset management and development Third of vacant office space already let at terms ahead of ERV

• n acquisition

SHOREDITCH ESTATE – EAST LONDON

25

Shoreditch Estate Broadgate

E S W N

REPLENISHING OUR DEVELOPMENT PIPELINE

• 2.1m sq ft next phase London and retail development

(recently committed and near-term)

• £1.1bn total development cost
• Estimated profit to come of around £275m

26

Clarges Estate The Hempel Aldgate Phase 1 Yalding House 4 Kingdom Street Shoreditch Estate 5 Kingdom Street

2014

458,000 sq ft

2015

562,000 sq ft

Start on site 2013

1,044,000 sq ft

NEAR-TERM PIPELINE RECENTLY COMMITTED

FINANCIAL REVIEW

Lucinda Bell Finance Director

27

28

HIGHLIGHTS

HY to 30 September H1 2013 H1 2014 Change Underlying Profit before Tax (£m) 137 146 +6.6% Underlying Earnings per Share (p) 15.2 14.5 (4.6%) Dividend per Share (p) 13.2 13.5 +2.3% Net Asset Value per Share (p) 596 623 +4.5% Valuation Performance 0.2% 2.8% Total Accounting Return 2.4% 6.8%

29

£m

NET RENTAL INCOME MOVEMENT

272 275

(15) 13 3 3 (1)

H1 2013 PY Acquisitions/ Disposals Placing Investment Developments Like for Like Other H1 2014

Like for like Retail 1.5% Offices 0.4% Total 1.2%

30

£m 104 98 6 2 (3) 1

H1 2013 Ropemaker Sale Equity Placing Proceeds Equity Proceeds Investment Other H1 2014

FINANCING COSTS

31

INCOME STATEMENT

HY to 30 September H1 2012/13 H1 2013/14 Change Net Rental Income (£m) 272 275 1.1% Fees & Other Income (£m) 8 7 Administrative Expenses (£m) (39) (38) Net Finance Costs (£m) (104) (98) Underlying PBT (£m) 137 146 +6.6% Underlying EPS (p) 15.2p 14.5p (4.6)%

DEPLOYING OUR PLACING PROCEEDS

• £790m acquisition spend including £100m of development opportunities
• NIY of 5.7% on £690m of income producing investments
• £230m of prospective development spend
• Earnings neutral in H1; 0.5p accretive in FY14

32

Acquisition Spend Prospective Development Spend £m £m Paddington Central 470 180 Ealing Broadway Shopping Centre 143

• Surrey Quays JV buy-out

48 24 Other Acquisitions 126 26 Investments 787 230

33

NAV (p)

GROWTH IN EPRA NET ASSET VALUE

596p 14p 623p 10p 10p 10p (13p) (4p)

Mar 13 Developments Offices Retail Underlying Profit Dividends Other Sep 13

34

STRONG VALUATION PERFORMANCE

HY to 30 September 2013 Valuation £m Uplift % ERV Growth % NEY % IPD Capital Return Outperformance (bps) Weighting %

UK Retail 6,636 1.5 0.6 5.8 +50 59% UK Offices & Residential 4,561 4.9 41%

• Of which Offices

4,401 5.0 1.7 5.5 +160 39% UK Total 11,197 2.8 0.9 5.7 +100 100%

• of which Standing Investments

10,247 2.1 0.9 5.7

• of which Development

950 8.9

£0.6bn £1.7bn £1.0bn £0.7bn £0.4bn £1.7bn £0.9bn

DEBT FINANCING – DIVERSE FUNDING PROFILE

• £610m of new financing

arranged in H1

• £3.1bn raised since 2011

(£2.6bn BL share)

• £1.3bn of facilities in place for

more than two years

• 75% fixed over 5 years

35

Diverse Debt Profile (30 September 2013)1 Drawn Unsecured Debt-undrawn Debentures & Loan Notes US Private Placements Convertible Bonds Securitisations Other JV & funds debt

1 Pro forma for the drawdown of the £200m 2014 USPPs and repayment of £200m of Drawn Facilities

36

STRENGTH OF BALANCE SHEET METRICS

Proportionally Consolidated 31 Mar 2013 30 Sep 2013 Loan to Value (LTV) 40.2% 42.3% Average Interest Rate 4.6% 4.2% Interest Cover 2.3x 2.5x Average Maturity of Drawn Debt (years) 9.9 8.9* Group 31 Mar 2013 30 Sep 2013 Loan to Value (LTV) 24.2% 28.5% Average Interest Rate 4.4% 3.7% Interest Cover 2.8x 3.3x

* Pro forma for drawing down £200m from 2014 USPPs

DEVELOPMENT PROGRAMME DRIVING FUTURE PERFORMANCE

• 2010 committed office programme already 68% pre-let,

well ahead of plan

• Recently committed programme; profit on cost 25%
• Total pipeline of 3m sq ft

Sq ft ‘000 Current Dev. Cost £m 2010 Committed Development Programme 2,666 1,335 Recently Committed Programme 1,044 626 Near-term Pipeline 1,020 478 Total recently Committed/Near-term 2,064 1,104 Medium-term Prospects c1,000

37

DEVELOPMENT PROGRAMME – CONTRIBUTING TO FUTURE PERFORMANCE

• Current development commitment
• f £1.3bn
• Residential commitment at £500m

level, as previously set

• New developments to come on

stream as 2010 programme completes

• Capacity to further replenish pipeline

as 2010 developments complete

38

Development Commitment

200 400 600 800 1000 1200 1400 Mar 13 Sep 13 Mar 14 Sep 14 Mar 15

Near-term Prospects Recently Committed Developments 2010 Committed Developments

£m

39

A PLATFORM FOR FUTURE INCOME GROWTH

Annualised Gross Rents Cash Flow Basis £m Accounting Basis £m Current Passing Rent 5495 5731 Expiry of Rent-free Periods 571 Fixed, Minimum Uplifts 13 2010 Non-Completed Developments Pre-let 28 24 Recently Committed Developments Pre-let 4 4 Total Contracted 651 601 Developments – 2010 Committed Developments to let2 29 23 Developments – Recently Committed/Near-term to let2 46 39 Investments – RPI, Letting of Vacancies etc. 2,3,4 30 28 Potential Rent in 5 Years 756 691 Increase 38% 21%

Table shows UK total, excluding assets held in Europe.

1 Rent includes £27m of completed 2010 Programme Developments on a cash flow basis, £23m on an accounting basis 2

Valuers estimate of non-contracted rents

3 Illustrative impact based on RPI of 2.5% pa 4 Includes RPI, open market rent reviews, re-letting of expiries and the letting of non-development vacant space 5 Gross rents plus, where rent reviews are outstanding, any increase to ERV (as determined by the Group’s external valuers), less any ground rents

payable under head leases

CONCLUSION

CHRIS GRIGG Chief Executive

40

OUTLOOK

41

• Market outlook overall positive

– London to remain strong – Improving outlook for high quality retail

• Expect to continue to benefit from our actions

– Increased exposure to London and the South East (now 61% of portfolio) – Investment in up and coming London locations – Replenished development pipeline – Increased focus on locally dominant retail assets

42

OUR PRIORITIES

Delivering returns from developments Driving growth from standing investments Continued asset recycling

• Completing and letting up our 2010 programme
• Starting on site on recently committed developments
• Taking Paddington and Shoreditch through planning
• Selectively adding to the development pipeline
• Focusing on leasing and asset management
• Bedding down new assets such as Ealing Broadway and

Southgate, Bath

• Continued sale of more mature retail assets
• Disciplined acquisitions

1 2 3

SUMMARY

43

• British Land is a strongly performing business

– Delivering value from asset management, development and portfolio reshaping

• Executing smartly, according to plan

– Raised funds and successfully deployed them – Continue buying and selling well – Replenishing our development pipeline

• Encouraged by the outlook for our markets

APPENDICES

44

ANOTHER SUCCESSFUL PERIOD OPERATIONALLY

45

BL UK Property Returns vs IPD1 bps

50 160 100 60 90 60

• 20

40 60 80 100 120 140 160 180

Retail Offices Total Capital Returns Total Returns

1 For 6 months ended 30 September 2013

RECONCILIATION OF UNDERLYING PROFIT BEFORE TAX

46

HY to 30 September (£m) 2012/13 2013/14 IFRS profit before tax 109 422 Net valuation movement (includes disposals) 13 (287) Deferred and current taxation of joint ventures & funds (3) (6) Amortisation of intangible assets 1

• Capital financing costs

10 17 Non-recurring items 7

• Underlying Profit Before Tax

137 146 EPRA adjustments (3) (19) EPRA Earnings Before Tax 134 127

£m

PERIOD ON PERIOD PROFIT GROWTH

47

137 146

(8) 13 3 7 (3) (4)

H1 2013 PY Transactions Equity Placing Like-for-Like Income Growth Development Activity Cost of New Facilities Other H1 2014

UK GROSS RENTAL INCOME1 – SECTORAL

48

HY to 30 Sep 2013 Annualised as at 30 Sep 2013

(Accounting Basis) £m Group JVs & Funds Total Group JVs & Funds Total

Retail parks 52 21 73 102 45 147 Superstores 5 32 37 7 63 71 Shopping centres 27 30 57 50 64 114 Department stores 16

• 16

34

• 34

Leisure 14

• 14

28

• 28

UK Retail 114 83 197 221 172 394 City 3 42 45 4 82 86 West End 35

• 35

84

• 84

Provincial 3

• 3

6

• 6

All Offices 41 42 83 94 82 176 Residential2 2

• 2

3

• 3

All Offices & Residential 43 42 85 97 82 179 UK Total 157 125 282 318 254 573

Table shows UK total, excluding assets held in Europe.

1 Gross rental income will differ from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives 2 Stand-alone residential

OPERATING COSTS METRIC

49

HY to 30 September (£m) H1 2012/13 H1 2013/14 Property outgoings 7 9 Administrative expenses 37 36 Share of joint ventures and funds expenses 7 9 Less: Performance & management fees (from joint ventures & funds) (5) (5) Other fees and commission (3) (2) EPRA Costs (including direct vacancy costs) (A) 43 47 Direct vacancy costs (6) (6) EPRA Costs (excluding direct vacancy costs) (B) 37 41 Total Gross Rental Income inc. share of joint ventures and funds (C) 284 291 EPRA Cost Ratio (including direct vacancy costs) (A/C) 15.1% 16.4% EPRA Cost Ratio (excluding direct vacancy costs) (B/C) 13.1% 14.4%

RECONCILIATION OF EPRA NAV & NNNAV

50

As at 31 Mar 13 30 Sep 13 £m Pence £m Pence Balance Sheet (IFRS) Net Assets 5,687 568 6,106 604 Deferred tax arising on revaluation movements 14 1 5

• Mark to market on effective cash flow hedges and

related debt adjustments 198 20 138 14 Adjust to fully diluted on exercise of share options 58 6 37 4 Surplus on trading properties 10 1 12 1 EPRA NAV 5,967 596 6,298 623 Deferred tax arising on revaluation movements (14) (1) (5) (1) Mark to market of debt and derivatives (431) (43) (277) (27) EPRA NNNAV 5,522 552 6,016 595

EPRA BALANCE SHEET (PROPORTIONAL CONSOLIDATION)

51

£m Mar 13 Group JVs & Funds Sep 13

Total properties 10,499 6,219 5,219 11,438 Net debt (4,266) (2,628) (2,292) (4,920) Other net liabilities (266) (51) (169) (220) EPRA Net Assets 5,967 3,540 2,758 6,298 Loan to value (LTV)1 40.2% 28.6% 42.3% Average interest rate 4.6% 3.6% 4.2% Interest cover 2.3x 3.3x 2.5x Average maturity of drawn debt (years) 9.9 8.8 8.92

1 Group LTV based on Group Properties and net investment in JV & Funds, and Group net debt 2 Weighted average debt maturity includes the drawdown of £200m from the 2014 USPPs

£m

DEBT MATURITY – GROUP1

52

1 Pro forma for the drawdown of the £200m 2014 USPPs and repayment of £200m of Drawn Facilities

Year to 30 September 200 400 600 800 1,000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

Debentures & Loan Notes Private Placements Convertible Bonds

£m

DEBT MATURITY – JOINT VENTURES AND FUNDS1

53

1 At British Land share

200 400 600 800 1,000 2014 2015 2016 2017 2018 2019-2023 2024-2036

JVs - Securitisations JVs - Bank Drawn Funds - Bank Drawn JVs - Bank Undrawn Funds - Bank Undrawn

Year to 30 September

GROSS AND NET DEBT RECONCILIATION

54

As at 30 September 2013 (£m) Group JVs & Funds Total Gross debt (principal value) 2,687 2,507 5,194 IFRS Adjustments: Issue costs and premia (7) (11) (18) Fair value hedges 61

• 61

Other items 20

• 20

Gross Debt (IFRS basis) 2,761 2,496 5,257 Market value of derivatives 29 94 123 Cash & liquid investments (112) (210) (322) Net debt (IFRS basis) 2,678 2,380 5,058 EPRA Adjustments: Mark to market on effective cash flow hedges and related debt adjustments (50) (88) (138) Net Debt (EPRA Basis) 2,628 2,292 4,920

55

4,266 4,920 625 136 153 99 74 19 18

Mar 13 Net Debt Acquisitions Disposals Development and Capex Operating Cashflow Dividends Convertible bond market value Other Sep 13 Net Debt

£m

EPRA NET DEBT – PROPORTIONALLY CONSOLIDATED

£2.1bn Available Facilities £1.5bn Available Facilities LTV 40.2% 42.3%

MAJOR HOLDINGS

As at 30 September 2013 (excl. developments under construction) BL Share % Sq ft 000’s Rent £m pa1 Occupancy Rate %2 Lease Length yrs3 1 Broadgate, London EC2 50 3,963 177 97.0 7.6 2 Regent's Place, London NW1 100 1,589 67 97.6 9.6 3 Meadowhall Shopping Centre, Sheffield 50 1,374 82 97.4 8.4 4 Sainsbury’s Superstores 52 2,864 67 100.0 15.7 5 Tesco Superstores 50 2,687 61 100.0 14.6 6 Paddington Central 100 609 22 92.9 10.7 7 Teeside Shopping Park, Stockton-on-Tees 100 451 14 100.0 7.5 8 Drake Circus Shopping Centre, Plymouth 100 570 15 98.7 6.7 9 Debenhams, Oxford Street 100 363 10 100.0 25.5 10 Portman Square, W14 100 132 5 51.0 12.5

1 Annualised contracted rent including 100% of Joint Ventures & Funds 2 Includes accommodation under offer or subject to asset management 3 Weighted average to first break 4 Development reached practical completion in May 2013

56

TOP 20 CUSTOMERS & CUSTOMER SPLIT BY INDUSTRY

57

As at 30 September 2013 % of Total Rent

Tesco plc 7.3 Sainsbury Group 5.9 Debenhams 5.7 UBS AG 3.2 Home Retail Group 2.7 Kingfisher (B&Q) 2.6 HM Government 2.5 Arcadia Group 2.1 Next plc 2.1 Virgin Active 2.1 Spirit Group 1.6 Alliance Boots 1.5 Herbert Smith 1.4 DSG International 1.3 Marks & Spencer Plc 1.2 Royal Bank of Scotland plc 1.2 Hutchison Whampoa 1.2 Asda Group 1.1 New Look 1.0 House of Fraser 1.0

Customer Split by Industry (%)

15% 18% 19% 7% 8% 14% 11% 2% 6%

Supermarkets Fashion & Beauty General Retail DIY Food / Leisure Banks and Financial Services Professional & Corporate Government Other Businesses

UK PORTFOLIO WEIGHTING

58

As at 30 September 2013 (%) 2012 2013 (Current) 2013 (Pro forma)¹ Retail parks 24.5 22.9 20.8 Superstores 12.6 11.7 10.9 Shopping centres 17.6 17.3 15.7 Department stores 4.6 4.6 4.1 Leisure 3.0 2.8 2.6 UK Retail 62.3 59.3 54.1 City 17.1 16.5 17.3 West End 18.4 22.0 25.3 Provincial 0.8 0.8 0.7 All Offices 36.3 39.3 43.3 Residential2 1.4 1.4 2.6 All Offices & Residential 37.7 40.7 45.9 UK Total 100.0 100.0 100.0

Table shows UK total, excluding assets held in Europe.

1 Pro forma for committed developments at estimated end value (as determined by the Group’s external valuers) and disposals completed/exchanged post half end 2 Stand-alone residential

UK PORTFOLIO VALUATION BY SECTOR

59

Group JVs & Funds Total Change %2 As at 30 September 2013 £m £m1 £m H1 Retail parks 1,755 814 2,569 1.1 Superstores 118 1,188 1,306 2.0 Shopping centres 756 1,181 1,937 0.3 Department stores 512 1 513 6.5 Leisure 308 3 311 2.0 UK Retail 3,449 3,187 6,636 1.5 City 57 1,786 1,843 3.6 West End 2,468

• 2,468

6.0 Provincial 85 5 90 4.0 All Offices 2,610 1,791 4,401 5.0 Residential3 160

• 160

2.6 All Offices & Residential 2,770 1,791 4,561 4.9 UK Total 6,219 4,978 11,197 2.8 UK Standing Investments 5,682 4,565 10,247 2.1 UK Developments 537 413 950 8.9

Table shows UK total, excluding assets held in Europe. Total portfolio valuation including Europe of £11.4bn at period end, +2.7% valuation movement.

1 Group’s share of properties in joint ventures and funds 2 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

3 Stand-alone residential

UK PORTFOLIO NET YIELDS1

60

As at 30 September 2013 (excl. developments) EPRA Net Initial Yield % EPRA Topped- Up Net Initial Yield %2 Overall Topped- Up Net Initial Yield%3 Net Reversionary Yield % Net Equivalent Yield %

Retail parks 5.5 5.7 5.8 5.8 5.9 Superstores 5.1 5.1 5.1 5.1 5.1 Shopping centres 5.4 5.7 5.7 5.8 5.8 Department stores 5.4 5.4 7.8 4.5 6.0 Leisure 7.6 7.6 8.8 6.0 8.4 UK Retail 5.5 5.6 5.9 5.6 5.8 City 5.3 6.1 6.1 6.0 5.6 West End 3.0 4.8 4.9 5.6 5.4 Provincial 7.1 7.1 7.1 5.7 6.3 All Offices 4.0 5.3 5.4 5.8 5.5 UK Total 5.0 5.5 5.8 5.7 5.7

Table shows UK total, excluding assets held in Europe.

1 Including notional purchaser's costs 2 Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of growth 3 Including fixed/minimum uplifts (excluded from EPRA definition)

UK LEASE LENGTH AND OCCUPANCY

61

As at 30 September 2013 Average Lease Length (yrs) Occupancy Rate (%) To Expiry To Break Occupancy Occupancy (underlying)1 Retail parks 9.5 8.6 95.7 97.4 Superstores 15.0 15.0 100.0 100.0 Shopping centres 9.6 8.8 95.6 97.0 Department stores 27.4 24.1 99.5 99.5 Leisure 21.2 21.2 99.8 100.0 UK Retail 12.6 11.8 96.9 98.0 City 9.6 7.7 96.5 97.0 West End 11.6 9.6 89.8 92.8 Provincial 8.8 8.4 100.0 100.0 All Offices 10.6 8.7 92.8 94.7 UK Total 11.9 10.7 95.4 96.8

Table shows UK total, excluding assets held in Europe.

1 Including accommodation under offer or subject to asset management

UK ANNUALISED RENT & ESITMATED VALUE (ERV)

62

As at 30 September 2013 (excl. Developments) Annualised Rents (Valuation Basis) £m1 ERV £m Average Rent (£psf)2 Group JVs & Funds Total Total Contracted ERV

Retail parks 103 46 149 159 23.2 23.8 Superstores 7 63 70 70 21.8 21.7 Shopping centres 50 66 116 123 25.3 26.2 Department stores 30

• 30

25 13.4 11.0 Leisure 25

• 25

20 13.4 10.8 UK Retail 215 175 390 397 21.4 21.3 City 4 77 81 91 47.4 45.7 West End 69

• 69

124 48.5 50.8 Provincial 6

• 6

5 27.1 21.9 All Offices 79 77 156 220 46.8 47.2 Residential3 3

• 3

3

• All Offices & Residential

82 77 159 223

• UK Total

297 252 549 620 25.7 26.0

Table shows UK total, excluding assets held in Europe.

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 Office average rent £psf is based on office space only 3 Stand-alone residential

UK RENT SUBJECT TO OPEN MARKET RENT REVIEW

63

12 months to 30 September (£m) 2014 2015 2016 2017 2018 2014-16 2014-18 Retail parks 18 17 22 16 21 57 94 Superstores 8 23 13 4 4 44 52 Shopping centres 14 17 14 14 12 45 71 Department stores

• 5
• 1

5 6 Leisure

• UK Retail

40 57 54 34 38 151 223 Offices:

• City

29 6 5 12 3 40 55 West End 5 17 7 21 22 29 72 Provincial

• 1

5

• 6

6 All Offices 34 24 17 33 25 75 133 UK Total 74 81 71 67 63 226 356 Potential Uplift at Current ERV 2 3 1

• 6

6

Table shows UK total, excluding assets held in Europe.

UK RENT SUBJECT TO LEASE BREAK OR EXPIRY

64

As at 30 September (£m) 2014 2015 2016 2017 2018 2014-16 2014-18 Retail parks 4 7 7 9 13 18 40 Superstores

• Shopping centres

10 7 12 11 6 29 46 Department stores

• Leisure
• UK Retail

14 14 19 20 19 47 86 City 1 1 19

• 8

21 29 West End 2 4 1 14 9 7 30 Provincial

• All Offices

3 5 20 14 17 28 59 UK Total 17 19 39 34 36 75 145 % of Contracted Rent 2.8% 2.9% 6.1% 5.4% 5.6% 11.8% 22.7% Potential Uplift at Current ERV 2 1

• (1)

(1) 3 1

Table shows UK total, excluding assets held in Europe.

ERV RESETTING TO MARKET

65

Annualised at 30 September (£m pa) 2014 2015 2016 2017 2018 2014-16 2014-18

ERV Expiring – existing portfolio1 20 19 39 33 34 78 145 Speculative developments – City 10 1

• 11 11

Speculative developments – West End 9

• 6
• 15 15

Speculative developments – Retail 3 1

• 4 4

Total Rent Resetting to Market 42 21 45 33 34 108 175 ERV of current vacancies2,3 28 28 Vacant & Income Expiring 136 203

1 Rent is based on ERV, reflecting current valuation 2 Including space under offer of £7m and space in asset management of £1m 3 Including £10m of vacant space at recently completed developments

Total ERV Resetting to Market (Next 3 Years)

TOTAL ERV RESETTING TO MARKET (NEXT 3 YEARS)

66 ¹ ERV of unlet portion of committed developments as a proportion of portfolio ERV including ERV of committed developments

13% 29% 5% 0% 5% 10% 15% 20% 25% 30% British Land IPD (exc. development) Portfolio Vacancies & Expiries Developments (Speculative)¹

UK CONTRACTED RENTAL INCREASES (CASH FLOW BASIS)

Annualised at 30 September (£m pa) 2014 2015 2016 2017 2018 2014-16 2014-18 Expiry of rent free periods – standing portfolio 38 9 9 1

• 56

57 Expiry of rent free periods – development pre-lets

• 3

21 5 3 24 32 Fixed uplifts (EPRA basis) 1 1

• 1

2 3 Fixed & minimum uplifts in lieu of rental growth 1 1 3 3 2 5 10 Total 40 14 33 9 6 84 102

67

RECENTLY COMMITTED DEVELOPMENT PROGRAMME

68

12 months to 30 September (£m) Sector BL Share Sq ft PC Calendar Current Value Cost to Complete ERV Pre-let Resi End Value % '000 Year £m £m1,4 £m2 £m £m The Clarges Estate3 Mixed Use 100 193 2017 170 179 5.6 - 388 Hereford Retail 100 310 2014 35 40 5.5 2.8 - The Hempel Residential 100 40 2015 34 26 -

• 81

Craven Hill Gardens Residential 100 25 2014 33 8 -

• 50

Aldgate Place, Phase 1 Residential 50 221 2016 8 52 -

• 655

Broadgate Circle Offices 50 45 2014 7 8 1.2 -

• Milton Keynes, Kingston Centre

Retail 50 21 2014 4 1 0.3 0.3 - Broughton Park, Chester Retail 44 54 2014 2 5 0.5 0.4 - Meadowhall Surrounding Land Retail 50 22 2015 1 3 0.4 0.4 - Whiteley Leisure, Fareham Retail 50 58 2015 1 6 0.5 0.2 - Fort Kinnaird, Edinburgh Retail 22 55 2015 - 3 0.3 0.1 - Total Recently Committed: 1,044 295 331 14.3 4.2 584

Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%)

1 From 1 October 2013 to practical completion (PC) 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 3 Includes 103,000 sq ft of residential 4 Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate 5 End value excludes hotel site, receipts of £5 million (BL share) estimated

2010 DEVELOPMENT PROGRAMME

69

12 months to 30 September (£m) Sector BL Share Sq ft PC Calendar Current Value Cost to Complete ERV Pre-let Resi End Value3 % '000 Year £m £m1,6 £m2 £m £m 10 - 30 Brock St, Regents Place4 Mixed Use 100 505 Completed 360 6 20.1 17.1 115 5 Broadgate Offices 50 710 2015 195 87 19.2 19.2

• The Leadenhall Building

Offices 50 605 2014 195 43 18.6 8.6

• 10 Portman Square

Offices 100 132 Completed 165 5 9.7 4.9

• Marble Arch House5

Mixed Use 100 86 2013 64 9 3.9

• 18

39 Victoria Street Offices 100 93 2013 63 6 4.9

• 199 Bishopsgate

Offices 50 144 Completed 55 1 3.5 1.8

• Whiteley Shopping, Fareham

Retail 50 321 Completed 42 1 2.6 2.4

• Bedford Street

Residential 100 24 2014 26 3

• 27

Glasgow Fort (Leisure) Retail 44 46 Completed 7 2 0.5 0.5

• Total 2010 Programme:

2,666 1,172 163 83.0 54.5 160 Total Committed: 3,710 1,467 494 97.3 58.7 744

Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%)

1 From 1 October 2013 to practical completion (PC) 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 3 Residential development of which £120 million completed or exchanged 4 Includes 126,000 sq ft of residential, of which £93 million has now sold and completed during the half 5 Includes 10,000 sq ft of residential 6 Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate

NEAR-TERM AND PROSPECTIVE DEVELOPMENTS

70

As at 30 September 2013 (£m) BL Share Sq ft Total Cost Status % '000 £m1 Near-term Pipeline The Shoreditch Estate Offices 100 322 165 Pre-submission 5 Kingdom Street Offices 100 2402 154 Consented 4 Kingdom Street Offices 100 145 93 Consented Surrey Quays (Extension) Retail 100 98 24 Consented Yalding House Offices 100 29 22 Pre-submission Glasgow Fort (Retail) Retail 44 112 17 Planning submitted Deepdale, Preston Retail 22 74 3 Consented Total Near-term 1,020 478 Medium-term Pipeline 100 Liverpool Street Offices 50 496 Pre-submission Power Court, Luton Retail 100 158 Pre-submission Aldgate Place, Phase 2 Residential 50 145 Consented Wardrobe Court Residential 100 74 Pre-submission Fort Kinnaird, Edinburgh Retail 22 30 Planning submitted Lancaster Retail 100 n/a Pre-submission Eden Walk Shopping Centre, Kingston Retail 50 n/a Pre-submission Harmsworth Quays Residential 100 n/a Pre-submission Total Medium-term 903

1 Total cost including site value. Excludes notional interest as interest is capitalised individually on each development at our capitalisation rate 2 210,000 sq ft of which is consented

ESTIMATED FUTURE DEVELOPMENT SPEND AND CAPITALISED INTEREST

71 PC Prelet ERV Cost to complete £m (excluding notional interest) – 6 mths As at 30 September 2013 Calendar Year £m Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16

5 Broadgate 2015 19.2 34 25 28 The Leadenhall Building 2014 8.6 19 11 13 Marble Arch House 2013

• 7 2

39 Victoria Street 2013

• 4 1 1

Bedford Street 2014

• 3 -

Total 2010 Programme: 27.8 67 39 42

• The Clarges Estate

2017

• 3 22 33 35 29

23 Hereford 2014 2.8 17 20 3

• The Hempel

2015 n/a 4 6 7 5 2 1 Craven Hill Gardens 2014 n/a 7 1 - Aldgate Place, Phase 1 2016 n/a 8 5 8 9 3 6 Broadgate Circle 2014

• 4 3 1

Milton Keynes, Kingston Centre 2014 0.3 1 - Broughton Park, Chester 2014 0.4 1 4 Meadowhall Surrounding Land 2015 0.4

• - 2 -

Whiteley Leisure, Fareham 2015 0.2

• 1 3 2

Fort Kinnaird, Edinburgh 2015 0.1 2 1 Total Recently Committed: 4.2 47 63 57 51 34 30 Total Committed: 32.0 114 102 99 51 34 30 Total Near-term 24 25 33 64 77 79 Indicative Interest Capitalised on above at attributable rates1 10 10 9 8 10 11

1 Financing costs are capitalised on qualifying expenditure for committed and near term developments; the rate is at 3% for

Leadenhall and 4% for all other developments

ESTIMATED FUTURE DEVELOPMENT RENTAL INCOME (ACCOUNTING BASIS)

72

PC Gross Rental Income (Accounting Basis)1 £m – 12 mths As at 30 September 2013 Calendar Year Sep 14 Sep 15 Sep 16 Sep 17 Sep 18

Committed Developments 5 Broadgate Q1 2015 Contracted

• 9 18 18

18 The Leadenhall Building Q2 2014 Contracted 2 7 7 7 7 Non-contracted - 4 8 8 8 Broadgate Circle Q4 2014 Non-contracted - - 1 1 1 Marble Arch House Q4 2013 Non-contracted - 3 3 3 3 39 Victoria Street Q4 2013 Non-contracted - 3 4 4 4 Clarges Estate Q2 2017 Non-contracted - - - 3 5 Total Offices Contracted 2 16 25 25 25 Non-contracted - 10 16 19 21 Hereford Q2 2014 Contracted 1 2 2 2 2 Non-contracted - 2 2 2 2 Other Retail Developments Contracted - 1 1 1 1 Non-contracted - - 1 1 1 Total Retail Contracted 1 3 3 3 3 Non-contracted - 2 3 3 3 Total Committed Contracted 3 19 28 28 28 Non-contracted - 12 19 22 24 Recently Completed Developments (letting of vacant space) 199 Bishopsgate Q3 2012 Non-contracted 1 1 1 1 1 10 Portman Square Q2 2013 Non-contracted 1 4 4 4 4 10 - 30 Brock Street Q3 2013 Non-contracted - 2 3 3 3 Total Recently Completed1 Non-contracted 2 7 8 8 8

1 Pre-lets plus valuers estimates of non-contracted rent

NUMBER OF SHARES

73

Number of shares (m) Mar 13 Sep 13 Basic Weighted Average 895 993 Period End 986 999 Diluted Weighted Average 901 997 Period End 1,001 1,011

West End Development Completions

SHORTAGE OF QUALITY SPACE

74

1 2 3 4 5 6 7 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Total (m) Available U/C 10 yr average Grade A take-up

M sq ft

Source: Deloitte Real Estate

City Development Completions

SHORTAGE OF QUALITY SPACE

75

0.0 0.5 1.0 1.5 2.0 2.5 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 Total (m) Available U/C 10 yr average Grade A take-up

Source: Deloitte Real Estate

M sq ft

Rental Growth Driven by Imbalance between Supply and Demand

OFFICE MARKET RENTAL OUTLOOK

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

Actual Forecast

£ psf

• 20

40 60 80 100 120 140

1990 1991 1993 1994 1996 1997 1999 2000 2002 2003 2005 2006 2008 2009 2011 2012 2014 2015 2017

West End City

REGENT’S PLACE

77

78

Key: 200 residential units sold on long leases; retail at ground floor 88,000 sq ft retail (16 units) around Sheldon Square Development sites (355,000 sq ft) + Crossrail box below (80,000 sq ft) Multi-let offices 268,000 sq ft Multi-let offices 143,000 sq ft 206 room 4-star hotel (111,000 sq ft) BL ownership New Hammersmith & City line station and access to Crossrail Non BL ownership

FIVE KINGDOM STREET

FOUR KINGDOM STREET

ONE KINGDOM STREET ONE SHELDON SQUARE

Non BL

• wnership

PADDINGTON CENTRAL

79

BROADGATE

OUR TEAM TODAY

80

DAVID LOCKYER

Head of West End Office Asset Management

NICOLA THOMAS

Head of Property Performance

DARREN RICHARDS

Head of Investment

RICHARD WISE

Head of UK Retail Asset Management

BRYAN LEWIS

Head of Superstores

CHARLES BUTTERS

Acquisitions Director

MATTHEW PINSENT

Head of City Office Asset Management

OFFICES RETAIL

FINANCE

OUR TEAM TODAY

81

MARC FURLONGER

Head of Forecasting

ROB HUDSON

Group Financial Controller

SARAH BARZYCKI

Head of Finance

SIMON CARTER

Head of Treasury & Capital Markets

STRATEGY

JEAN-MARC VANDEVIVERE

Head of Strategy & Residential

DISCLAIMER

The information contained in this presentation has been extracted largely from the Half Year Results Announcement for the year ended 30 September 2013. This presentation may contain certain “forward-looking” statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual outcomes and results may differ materially from any outcomes or results expressed

• r 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 and no representation or warranty is given in relation to them, including as to their completeness or accuracy or the basis on which they were prepared. 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. This presentation is made only to investment professionals as defined in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ('the FP Order'). The content of this presentation has not been approved by a person authorised under the Financial Services and Markets Act 2000 (“FSMA”). Accordingly, this presentation may only be communicated in the UK with the benefit of an exemption set

• ut in the FP Order. An investment professional includes:

(i) a person who is authorised or exempt under FSMA; and (ii) a person who invests, or can reasonably be expected to invest, on a professional basis for the purposes of a business carried on by him; and (iii) a government, local authority (whether in the United Kingdom or elsewhere) or an international organisation; and (iv) any director, officer, executive or employee of any such person when acting in that capacity. 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 provided in relation to the accuracy, completeness or reliability of the information contained herein. The distribution of this presentation in jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other 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 the City Code 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.

82