Half Year Results Presentation Six months ended 30 September 2017 - - PowerPoint PPT Presentation

@BritishLandPLC www.britishland.com #BLHY2018 $BLND

Half Year Results Presentation

Six months ended 30 September 2017

Significant progress

Chris Grigg Chief Executive

3

Highly active first half

• Strong results reflecting good progress

– 1.3m sq ft of leasing activity: £32m rent – 1.8m sq ft of planning approvals – £1bn sales: 13% ahead of valuation

• Demonstrating:

– Healthy demand for our space – Active capital management – Strong financial platform – Successfully positioned for growth

1 Triton Square

4

Delivering strong results

• Underlying profits steady at £198m

– Despite £1.5bn income-producing asset sales since March 2016

• NAV up 2.6% to 939p

– Valuation uplift of 1.4%

• 1.3m sq ft lettings and renewals

across the business

– 6.8% ahead of ERV – Occupancy at 98%

• Leading sustainability performance

Meadowhall

AAA rated 5 Stars Gold Award 98th percentile 91st percentile

5

London offices performance

• Lettings and renewals of 741,000 sq ft

– 2.8% ahead of ERV – Incentives remaining steady

• New lettings represent 8% share
• f central London activity

– Average lease length of over 15 years

• Under offer or in advanced

negotiations on a further 570,000 sq ft

– Across a mix of sectors: technology, leisure and hospitality, finance

• Occupancy of 97%

Broadgate

Ca m p us stra tegy genera ting strong d em a nd

6

Our Campuses represent c.80% of the office portfolio

7

10 0 Liverpool Street

522,000 sq ft

Broadgate: transforming the experience

161,000 sq ft

Under offer 135 Bishopsgate

325,000 sq ft

168,000 sq ft

Under offer 1 Finsbury Avenue

288,000 sq ft

78,000 sq ft

Under offer 2 Finsbury Avenue

Lettings

36% of sp a ce let or und er offer a cross the com m itted a nd nea r term p ip eline

8

Broadgate: thriving neighbourhoods

Old Street Tech start-up Shoreditch Creative sector Spitalfields Modern markets The City Financial Centre Barbican Cultural hub

BROADGATE

35minutes

From Heathrow

9

Enhancing the campus offer through flexible workspace

• Storey launched in June 2017
• Operational across 85,000 sq ft

– 59,000 sq ft let or under offer to date – Terms at or ahead of budget – Median headcount of 50

• Fitting out another 50,000 sq ft

– 27,000 sq ft at Paddington Central, 4 Kingdom Street – 23,000 sq ft at Regent’s Place, 338 Euston Road

International House, Ealing Appold Studios, Broadgate

10

Paddington Central: leasing well and broadening the mix

• Successful leasing of 4 Kingdom Street

– 147,000 sq ft speculative development – 40% ahead of best rents at Paddington

• n acquisition in 2013
• Pergola attracted 130,000 visitors

this summer – Christmas season launched with new brands

• Progress at the Gateway

– 20 storey hotel covering 105,000 sq ft – Advanced negotiations for a pre-let – Received a resolution to grant planning

Pergola The Gateway Building

11

Leasing success at Regent’s Place

• Commitment to redevelop

1 Triton Square

• Fully pre-let on the office space

– Dentsu Aegis Network taking 310,000 sq ft on a 20 year term – Largest West End pre-let in 22 years

• Facebook increased their

commitment at 10 Brock Street

– Total occupation is now 185,000 sq ft

1 Triton Square

12

Regent’s Place: proximity to exceptional talent

8

universities

22

museums & galleries

58 0

research centres

3,0 0 0

scientists

10 0 ,0 0 0

students

Regent’s Place

13

Retail performance: strong demand for our space

• Leasing activity of 578,000 sq ft

– Terms 11.9% ahead of ERV

• Market polarising
• Occupancy of 98%

St Stephen’s, Hull

14

Omni-channel: the Changing Role of the Store

26 %

Online sales browsed in store1

52 %

Increase in retailer website hits ahead of new store openings2

Discov ery Tra nsa ction Fulfilm ent

30 %

shoppers use Click+Collect at our Local centres3

67%

make an additional purchase when collecting3

1) UK retail market, source: True Value of Stores, July 2016, GlobalData/British Land. 2) Based on a sample of 29 retailers opening at British Land centres between April 2014 and December 2016, using Connexity Hitwise data. 3) Research conducted by CACI; based on surveys across 19 British Land Local Centres in 2017.

15

Retail: reshaping our portfolio for an omni-channel world

Off strategy assets 10 – 4 0 The Broadway Orbital, Swindon

• 1. Disp osa ls
• 2. Acquisitions
• 3. Inv estm ent

£1.7bn in 3 years £50 0 m expected in next year £49 m acquisition adjacent to Ealing Broadway Shopping centre £43 m capital spend, improving our assets

16

Investment driving performance at Meadowhall

• £60m refurbishment completed

– Occupiers invested a further £38m

• Outperforming IPD on a 1, 3 and 5

year basis

• Strong half year performance

– 1.2% capital uplift – 1.3% ERV growth

• Enhancing the brand mix

Meadowhall

17

A sustainable approach supporting shareholder value

• Planning received on 330,000 sq ft

leisure hall

• Our refurbishment boosted the

regional economy by £32m

– 70% of construction spend went to local businesses within 25 miles – 200,000 hours of paid employment went to local people – 24 apprenticeships were supported

• r created and

– 1,500 students participated in educational events with our construction team “The Meadowhall project is bringing revenue into Sheffield…giving

• pportunities to local em ployers is how the region can be regenerated.”

David Higgins, Clear Line, Sheffield business

Meadowhall Leisure Hall

18

Investment driving performance at Whiteley

• Local centre opened in 2013

– Total return c.20% pa – ERV growth more than 6% pa

• Strong half year performance

– 3.3% capital uplift – 14.3% ERV growth

• 33% customers use C&C
• Attracting new occupiers

Whiteley

19

Summary

• Strong performance
• Results demonstrate:

– Healthy demand for our space – Actively management of capital – Positioned for low-risk growth – Strong financial platform

Broadgate Forster Square, Bradford

Finance Review

Lucind a Bell Chief Financial Officer

21

Active focus on capital discipline

• Highly active first half:

– Debt reduced by £500 million – LTV at 27% – Issued £300 million unsecured Sterling bond at 2.375% coupon – Settled 1.5% convertible bond – Launched £300 million share buyback – Reduced financing costs by another £12 million

22

Headlines

Period to H1 2017 H1 2018 Change % Underlying Profit (£m) 199 198 (0.5) Underlying earnings per share (p) 19.3 19.2 (0.5) Dividend per share (p) 14.60 15.04 3.0 As at H2 2017 H1 2018 Change % Valuation performance +1.6% +1.4% EPRA Net Asset Value per share (p) 915 939 2.6 Loan to value 29.9% 26.9%

Tota l Accounting Return of 4.2%

23

Net rental income

1.5% 4.2% 2.3% Retail Offices Total

297 312 (22) (15) 15 2 5

HY 2017 Net divestment Expiries on developments RBS Surrender Development lettings Like for like rental growth HY 2018 1.7% 1.9% 1.8% Retail Offices Total1

£m

1 Like for like rental growth is stated excluding the impact of surrender premia.

24

Financing costs

£m

(78) 8 7 (3)

HY 2017 Financing activity Net divestment Developments and

• ther

HY 2018

(66)

25

Underlying Profit

199 198 198 (15) (15) 15 5 8 1

H1 2017 Net divestment Development expiries RBS surrender Like for like rental growth Financing activity Other H1 2018

£m

26

Income statement

HY to 30 September H1 2017 H1 2018 Change % Net rental income (£m) 312 297 (4.8) Fees & other income (£m) 8 8 – Administrative expenses (£m) (43) (41) 4.7 Net finance costs (£m) (78) (66) 15.4 Underlying Profit (£m) 199 198 (0.5) Underlying earnings per share (p) 19.3 19.2 (0.5) Dividend per share (p) 14.60 15.04 3.0

27

Valuation performance

6 months to September 2017 Valuation £bn Movement £m Movement % Yield Movement bps ERV Growth % NEY % Weighting % Retail 6.6 20 0.3 5 1.0 5.3 49 Offices & Residential 6.6 185 2.6 (6) 1.2 4.4 49 Canada Water 0.3 (13) (4.5) 2 Total 13.5 192 1.4 – 1.0 4.8 100

• Of which Standing

Investments 12.4 157 1.2

• Of which

Development 1.1 35 3.3

28

Valuation growth drivers – Retail

6 months to September 2017 Valuation £bn Movement £m Movement % Yield movement bps ERV Growth % H1 H1 H1 Regional 3.0 2 0.1 4 1.2 Local 2.2 (21) (0.9) 11 1.1 Multi-let 5.2 (19) (0.4) 7 1.1 Other 1.4 39 2.5 (3) 0.5 Retail 6.6 20 0.3 5 1.0

Multi-let a ssets rep resent 79% of the Reta il p ortfolio

29

Valuation growth drivers – Offices

6 months to September 2017 Valuation £bn Movement £m Movement % Yield Movement bps ERV Growth % H1 H1 H1 West End 4.1 128 3.2 (11) 1.0 City 2.4 50 1.7 1 1.3 Offices 6.5 178 2.6 (6) 1.2 Residential 0.1 7 3.6 Offices & Residential 6.6 185 2.6

Ca m p uses rep resent 79% of the Offices p ortfolio

30

915p 939p 18p 19p (14p) (3p)

Mar 17 Valuation performance Underlying Profit Dividends Liability management costs Share buyback Sep 17

Increase in EPRA Net Asset Value

4p

31

Strength of debt metrics

Proportionally Consolidated 31 Mar 2017 30 Sept 2017 Loan to value (LTV) 29.9% 26.9% Weighted Average Interest Rate 3.1% 3.0% Interest Cover 3.6x 4.0x Available Undrawn Facilities £1.0bn £1.5bn Weighted Average Maturity of Drawn Debt (years) 7.7 8.9

32

10 20 30 40 50 60 70

De-risked development pipeline

• Committed pipeline
• ERV of £55 million
• Almost 60% pre-let or

under offer

• Speculative exposure just 4%
• 85% costs to go covered by

Clarges residential receipts

• Near term pipeline
• Over 20% let or under offer
• n ERV of £21 million

Committed Near Term

ERV of Committed & Near Term Developments

£76m

£m – ERV

Teesside (Leisure) Plymouth (Leisure) Bradford (Leisure)

ERV £55m ERV £21m Pre-let or under offer Costs to go £218m Costs to go £446m

33

Illustrative future income profile – 5 year basis

Annualised Gross Rents Cash Flow Basis £m Accounting Basis £m Current Passing Rent 588 Contracted Uplifts 39 585 Total Contracted Rent 627 Letting of Completed Developments 4 3 Sales completed post period end (5) (5) Lease Expiries – Development pipeline (13) (12) Letting of Committed Developments – let or under offer 32 26 Letting of Committed Developments – to let 23 20 Letting of Near Term Developments (of which £4m let or under offer) 21 17 RPI Linked Leases1 10 10 Reversion2 34 32 Letting of Medium Term Developments (excl. Canada Water) 109 92

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

1 Assumed at 2.8% per annum and uplift at rent review based on ERVs determined by the Group’s valuers. 2 Includes reversion on expiries and open market rent reviews within 5 years and current portfolio vacancies.

Exclud es the im p a ct of future sa les a nd p urcha ses

£55m

34

Summary - Robust financial platform

Over the last 6 years:

• LTV reduced from almost 45%

to under 27%

• Weighted average interest rate

reduced from 4.9% to 3.0%

• Interest cover almost doubled

from 2.2x to 4.0x

• Financing costs reduced by 38%
• 50% growth in profits
• Dividend growth and improved

payout ratio

4 Kingdom Street, Paddington

Positioned for Growth

Chris Grigg Chief Executive

36

Canada Water: a unique opportunity in central London

37

Canada Water

46 acre m ixed use opportunity in Central London

38

Canada Water Masterplan

2 m sq ft

Com m ercial

1m sq ft

Retail & Leisure

3,50 0

New hom es

5.5 m sq ft

Net internal area

39

Canada Water Phase 1

1m sq ft

Com m ercial

250 k sq ft

Retail & Leisure

650

New hom es

1.8 m sq ft

Net Internal Area

40

Substantial growth opportunities

Nea r term p ip eline Med ium term p ip eline

135 Bishopsgate, Broadgate Eden Walk Kingston Leisure-led Retail

• pportunities

£21m Additional rent

3.2 m

sq ft

2&3 Finsbury Avenue Gateway, Paddington Stockton, Teesside 5 Kingdom Street

41

London Campuses: a winning strategy

42

Capital discipline

• Disciplined approach

to capital allocation

– Investing in opportunities that deliver long term value

• Expect to be a net seller

this year

• Our options include

– Development – Acquisitions – Returning capital

• Flexibility in our decisions

– Dividend cover highest in 8 years

Broadgate Hem pel Gardens

43

Positioned for Growth

Three distinct advantages:

• 1. Our strategy

– Attracting a broader occupier mix

• 2. Our financial strength and flexibility

– Long-term income – Resilient balance sheet – Lower leverage

• 3. Attractive development pipeline

– Diverse and well-funded – Delivering long term, secure income

10 0 Liverpool Street

Appendices

45

Custom er Orienta tion

We use our insight into custom ers’ needs and identify m ajor long term trends to create environm ents in tune w ith changing lifestyles

Right Pla ces

We design engaging, sustainable places w hich bring people together through the right m ix of

• ccupiers, services and

activities

Ca p ita l Efficiency

We allocate our capital, m anage our finances and partner w ith like-m inded

• rganisations to deliver

sustainable long-term value

Exp ert Peop le

We em ploy expert people and w ork w ith specialist partners to create insight, develop skills and build capability

Our Strategy

British Land is a leading UK com m ercial property com pany focused on high quality retail and London offices

Pla ces Peop le Prefer

By m anaging our business to be resilient, sustainable and responsive, w e create enduring dem and for our properties and value for our stakeholders

46

Sustainability – half year highlights

Custom er Orientation W ellbeing Right Places Com m unity Capital Efficiency Futurep roofing Expert People Skills a nd op p ortunity

• Meadowhall refurbishment contributed £32m

to the regional economy with 70% of spend and 1 in 3 construction jobs staying in Sheffield

• 110 unemployed young people benefitted from our

Bright Lights “Starting Out” training programme at ten retail centres, creating positive futures for themselves and securing skills our retail and leisure occupiers need

• Young Readers Programme with the National Literacy

Trust expanded to 28 assets; over 7,500 children took part in fun, educational literacy events at our places

• “Down Memory Lane” dementia friendly project

expanded to eight assets, benefiting 130 local residents and fostering links with local communities

• Independent consultancy Happy City report highlighting

the positive impact on wellbeing and productivity of our £10m public realm improvements at Paddington Central

• New facilities launched which support the wellbeing of

construction workers at Broadgate, designed by local students at the University of East London

• 1,100 solar panels installed at Serpentine Green,

fulfilling 22% of electricity demand in common areas and car parks and saving 3,289 tonnes of CO2 over 25 years

• 100 suppliers took part in our Broadgate Framework

Forum, raising awareness of the social and environmental standards we expect from our suppliers

47

2017 performance vs. benchmark

Sustainability Indices

DJSI World & Europe1 2017: 91st percentile MSCI ESG Ratings 2017: ESG Leaders Index. AAA rating Global Real Estate Sustainability Benchmark 2017: Five star rating for the 2nd year Green star for 8th year Other benchmarks and awards

EPRA Sustainability Reporting Awards 2017: Gold for 6th year FTSE4Good1 2017: 96th percentile Sustainalytics ESG Ratings1 2017: 98th percentile

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

1 Sector specific percentile ranking.

48

We Enhance

Segm ent m ix

Balance of different segments and uses

Occupier service

Supporting occupiers and British Land value add

Occupier m ix

Occupiers and campus community

We Enliven

Events

Bringing people together and attracting visitors

Mem orable experience

Creating lasting, positive impressions

Custom er service

On-site hospitality & customer service

We Connect

Accessibility

Convenience and access

Com m unication

Digital connectivity, branding and marketing

Com m unity

Supporting communities for local people and occupiers

We Design

Authenticity

How our users feel and interact with the space

Function

Facilities and safety

Form

Efficient and effective buildings and spaces

Placemaking Framework applied across the business

49

Portfolio evenly split between London Offices and Retail; 65% situated in London & South East

Further £0.3bn at Canada Water and £0.1bn of standalone Residential assets

£6.5bn

Offices Retail & Leisure

£6.6bn

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

50

Retail Multi-let Portfolio Our two core products each fulfil specific shopper missions

Regiona l

Missions include Leisure-dom inated Trips, Fam ily Day Out and The Big Ticket Shop Typically >30 occupiers Footfall >10 m , spend >£ 10 0 m p.a. Drive-time >20 m ins Dwell >6 0 m ins Retail offer covers multiple categories with depth of choice in each Significant leisure and F&B e.g. restaurants, cinema Missions include Local Neighbourhood Shopper, Convenient Leisure and Single Item Pick-Up Typically 15– 30 occupiers Footfall often <8 m , spend <£ 10 0 m p.a. Drive-time <15 m ins Dwell <60 m ins Retail offer covers multiple categories & includes local services and am enities Convenient leisure and F&B e.g. gym and coffee shops

Loca l

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

• f local communities

51

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 Beaumont, Leicester Weston Lock, Bath Valentine, Lincoln1 Cornerhouse, Barrow Mostyn Champneys, Llandudno1 Hindpool, Barrow

• St. Peter’s, Mansfield

Forster Square, Bradford Kingston Centre, Milton Keynes Woodfields, Bury Studlands, Newmarket Gallagher, Cheltenham1 Harlech, Newport Tollgate, Colchester Elk Mill, Oldham Prospect Place, Dartford1 Nugent, Orpington Crown Point, Denton Botley Road, Oxford Wheatley, Doncaster Deepdale, Preston1 Ealing Broadway Queens, Stafford1 Whiteley, Fareham Orbital, Swindon Old Market, Hereford Crown Wharf, Walsall1 Inverness1 Lion, Woking Westside, Leeds

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

• f local communities

52

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

Average rent to sales ratio

10 %

Annual footfall of

315 m

Occupancy cost ratio

16 %

Potential to reach

59%

• f the population

BL local centres BL regional centres BL asset catchments

Source: CACI Retail Footprint 2017.

53

Physical store sales £265 bn True Value of Stores £278 bn Total retail sales £313 bn £5 bn £8 bn £18 bn £13 bn £4 bn

Online sales increasingly integrated with physical stores 89% of UK retail sales touch the store

Boost +5% 8 9 % of total retail sales in 20 15

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

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

Retail sa les by cha nnel (UK, a ll sectors, 20 15)

Source: GlobalData/British Land.

54

Physical store openings significantly boost retailers’

• nline presence

+52% 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

55

BL footfall performance vs benchmark

Outperformance in H1 FY18

+340bps

British Land UK Market (ShopperTrak UK National Index)

Jan-10 = 100 80 85 90 95 100 105 110 115 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17 Sep-17

56

Continued polarisation in Retail

ERV growth vs IPD

Index Mar-14 = 100

IPD Prime BL Multi-let ERV IPD All Retail IPD Secondary

Source: IPD.

95 97 99 101 103 105 107 109 111 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17

Rental growth on multi-let assets in H1 FY18

1.1

%

57

Major property holdings

At 30 September 2017 BL Share % Sq ft 000’s Rent £m pa1 Occupancy Rate %2,4 Lease Length yrs3,4 1 Broadgate 50 4,850 180 98.4 8.3 2 Regent's Place 100 1,740 75 97.2 7.7 3 Paddington Central 100 958 41 93.8 6.8 4 Meadowhall, Sheffield 50 1,500 85 97.8 6.7 5 Teesside, Stockton 100 569 17 95.5 5.5 6 Drake Circus, Plymouth 100 1,082 20 97.9 8.8 7 Sainsbury's Superstores5 51 1,742 40 100.0 9.8 8 Ealing Broadway6 100 540 14 94.9 5.2 9 Glasgow Fort 77 510 21 99.0 6.2 10 10 Portman Square 100 134 10 100.0 7.6

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. 6 Includes 10-40 The Broadway acquired during the period.

58

Top 20 occupiers & occupier split by industry

As at 30 September 2017 % of Contracted Rent

Tesco plc 4.6 J Sainsbury plc 4.3 UBS AG 3.6 Debenhams plc 3.5 Kingfisher (B&Q) 3.0 HM Government 2.8 Next plc 2.5 Facebook 1.9 Dentsu Aegis1 1.8 M&S plc 1.7 Spirit Group 1.7 Wesfarmers 1.6 Alliance Boots 1.6 Visa Inc 1.6 Dixons Carphone 1.5 Arcadia Group 1.4 Herbert Smith 1.3 TK Maxx 1.2 David Lloyd Leisure 1.1 Gazprom 1.1

General Retail 16% Fashion & Beauty 17% Banks & Financial services 14% Grocery & Convenience 9% Professional & Corporate 10% Food/Leisure 11% DIY 8% TMT 8%

Occupier Split by Industry (%)

Other 7%

UBS – 5 Broadgate 4% Other banks 3% Total banks 7% Asset Management & Other Financial 7%

1 Represents current occupation of 10 Triton Street covering 118,000 sq ft of space. Taking into account their post period end letting of 310,000 sq ft at 1 Triton Square,

% of contracted rent would rise to 5.2%. 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.

59

Broadgate Campus

100 Liverpool Street

• Lease expired in Dec 2016
• Current size: 380k sq ft
• Redevelopment: 522k sq ft

1 Finsbury Avenue

• Lease expired in Dec 2016
• Current size: 288k sq ft

135 Bishopsgate

• RBS leases surrendered

in June 2017

• Current size: 325k sq ft

2–3 Finsbury Avenue

• 2 Finsbury Avenue –

Emerging FinTech cluster

• 3 Finsbury Avenue –

expected lease break in late 2018

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

36% of Broa d ga te com m itted a nd nea r term d ev elop m ents p re-let or und er offer

60

Paddington Central Campus

61

Regent’s Place Campus

62

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

• 400

800 1,200 1,600

Capital Activity

£52m £648m (£267m)

2013 2014 2015 2016

£31m

Gross investment activity in H1 FY18

£1.2bn

Disposals

20171

(£461m) Net Spend £m

Capital Investment Net Spend Acquisitions

Financial Year

1 2017 restated to exclude transactions completing after 1 April 2017.

(£777m)

H1 2018

63

Capital Activity

Since 1 April 2017 Retail £m Offices £m Residential £m Canada Water £m Total £m Purchases 92 – – – 92 Sales1 (298) (575) (119) – (992) Development Spend 8 62 3 11 84 Capital Spend 35 4 – – 39 Net Investment (163) (509) (116) 11 (777) Gross Investment 433 641 122 11 1,207

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

1 Includes £575m Leadenhall Building disposal exchanged during the year ended 31 March 2017 and completed this period.

64

Acquisitions

Since 1 April 2017 Sector Price (100%) £m Price (BL Share) £m Annual Passing Rent £m2 Completed Tesco, Brislington – Tesco exchange transaction1 Retail 46 23 2 Harlech, Newport – Tesco exchange transaction1 Retail 41 20 1 10-40 The Broadway, Ealing Retail 49 49 2 Total 136 92 5

1 Part of a Tesco JV swap transaction resulting in a net £73m disposal of superstore assets. 2 BL share of annualised rent topped up for rent frees.

65

Disposals

1 Exchanged during the year ended 31 March 2017. 2 Of which £116m was part of a Tesco JV swap transaction resulting in a net £73m disposal of superstore assets. 3 Of which £21m exchanged in period and completed post period end. 4 Exchanged in period and completed post period end. 5 Exchanged post period end. 6 BL share of annualised rent topped up for rent frees.

Since 1 April 2017 Sector Price (100%) £m Price (BL Share) £m Annual Passing Rent £m6 Completed The Leadenhall Building1 Offices 1,150 575 17 Superstores2,3 Retail 428 242 15 B&Q, Bury & Grimsby4 Retail 56 56 4 The Hempel Collection Residential 50 50 – Exchanged Clarges, Mayfair5 Residential 66 66 – The Hempel Collection Residential 2 2 – Aldgate Place Residential 2 1 – Total 1,754 992 36

66

H2 18 income statement guidance

• Gross Rents

– Annualised accounting gross rent of £582m as at 30 September 2017 – Transactions already exchanged but completing after 30 September 2017 are expected to reduce annualised rents by £5m (H2 FY18 impact £3m) – Rental income growth will be driven by like-for-like growth

• Financing

– Weighted average interest rate now 3.0%

• n gross debt of £4.0bn
• Share Buyback

– Based on period end share price of 602p and expected H2 share purchases of £235m, number of shares would decrease by 39m by 31 March 2018 – Expected impact for the full year to 31 March 2018

• f c.0.3p on EPS and 17p on NAV (of which 4p

recognised in current period)

• Operating costs

– Administrative costs expected to be at, or slightly below, H1 level

• Dividend

– As announced in May 2017, the dividend for the year ending 31 March 2018 is increased by 3% to 30.08 pence per share (quarterly dividend

• f 7.52 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.£3.5m and LTV by c.0.5%. This is based

• n an average portfolio topped up NIY of 4.6%

and marginal cost of debt of 1.0%

67

Illustrative future income profile breakdown (cash basis)

For the year to 31 March 2018 2019 2020 2021 2022 Total At 30 September 2017 £m £m £m £m £m £m Contracted rent 627 Letting of completed developments 4 – – – – 4 Sales and purchases completing post year end (5) – – – – (5) Lease Expiries – Development pipeline (3) (9) (1) – – (13) Letting of Committed Developments1 1 9 22 23 – 55 Letting of Near Term Developments1 – 9 1 5 6 21 RPI Linked Leases2 2 2 2 2 2 10 Reversion3 4 3 2 4 7 20 Vacancies 14 Letting of Medium Term Developments (excl. Canada Water) 109

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 Assumed lettings contracted at practical completion. 2 Assumed at 2.8% per annum. 3 Includes reversion on expiries and open market rent reviews within 5 years.

68

Gross rental income1

Accounting Basis £m 6 months to 30 September 2017 Annualised as at 30 September 2017 Group JVs & Funds Total Group JVs & Funds Total Regional 31 44 75 59 87 146 Local 45 15 60 92 27 119 Multi-let 76 59 135 151 114 265 Department Stores and Leisure 23 – 23 38 – 38 Superstores 2 12 14 5 21 26 Solus and Other 10 – 10 21 – 21 Retail 111 71 182 215 135 350 West End 65 – 65 134 – 134 City 3 60 63 5 81 86 Offices 68 60 128 139 81 220 Residential2 2 – 2 4 – 4 Offices and Residential 70 60 130 143 81 224 Canada Water 4 – 4 8 – 8 Total 185 131 316 366 216 582

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.

69

Administrative expenses

HY to 30 September H1 2017 £m H1 2018 £m Personnel costs 26 26 Share scheme costs 3 2 Other administrative expenses 14 14 Total – British Land 43 42 Broadgate Estates 2 2 Total – Group 45 44 Capitalised costs (2) (3) Total administrative expenses 43 41

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.

70

Operating costs metric

HY to 30 September H1 2017 £m H1 2018 £m Property operating expenses 15 19 Administrative expenses 43 41 Net fees and other income (8) (8) Ground rent costs (1) (1) EPRA Costs (including direct vacancy costs) 49 51 Gross rental income 327 316 Ground rent costs (1) (1) Gross Rental Income (EPRA basis) 326 315 EPRA Cost Ratio (including direct vacancy costs) 15.0% 16.2%

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.

71

Reconciliation of Underlying Profit

HY to 30 September (£m) H1 2017 H1 2018 IFRS (loss)/profit before tax (205) 238 Net valuation loss/(profit) 462 (167) Profit on disposal of investment and trading properties (42) (20) Capital financing (income)/costs (9) 153 Non-controlling interests (7) (6) Underlying Profit and EPRA Earnings 199 198

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..

72

Number of shares

As at (m) 31 Mar 2017 30 Sept 2017 IFRS Basic Weighted average1 1,029 1,028 IFRS Diluted Weighted average2 1,091 1,031 Underlying/EPRA diluted Weighted average3 1,033 1,031 Year/Period end4 1,038 1,027

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.

73

EPRA balance sheet

£m 31 March 17 Group JVs & Funds 30 September 17 Total properties 13,940 9,502 4,013 13,515 Adjusted net debt (4,223) (2,491) (1,200) (3,691) Other net liabilities (219) (106) (72) (178) EPRA Net Assets 9,498 6,905 2,741 9,646 Loan to value (LTV)1 29.9% 20.1% 26.9% Weighted average interest rate 3.1% 2.1% 3.0% Interest cover 3.6x 5.1x 4.0x Weighted average maturity of drawn debt (years) 7.7 8.3 8.9

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

74

Reconciliation of EPRA NAV & NNNAV

31 March 17 30 September 17 £m pence £m pence IFRS Net Assets 9,476 921 9,632 945 Deferred tax arising on revaluation movements 3 5 Mark to market on effective cash flow hedges and related debt adjustments 155 137 Adjust to fully diluted on exercise of share options 36 36 Surplus on trading properties 83 90 Non-controlling interests (255) (254) EPRA NAV 9,498 915 9,646 939 Deferred tax arising on revaluation movements (19) (23) Mark to market of debt and derivatives (541) (506) EPRA NNNAV 8,938 861 9,117 888

75

Gross and net debt reconciliation

As at 30 September 2017 Group £m JVs & Funds £m Less non- controlling interests £m Total £m Gross Debt (principal) (2,711) (1,422) 132 (4,001) IFRS adjustments: Issue costs and premia 17 3 (1) 19 Fair value hedges (190) – – (190) Other Items 12 3 – 15 IFRS gross debt (2,872) (1,416) 131 (4,157) Market value of derivatives 44 (31) 2 15 Cash 119 203 (8) 314 IFRS net debt (2,709) (1,244) 125 (3,828) Adjustments: Remove market value of derivatives (15) Remove fair value hedges 164 Other adjustments (12) Adjusted net debt (3,691)

76

Loan to value (LTV)

As at 31 March 2017 £m Valuation movement Acquisitions Capital spend Disposals Other As at 30 September 2017 £m Total properties 13,940 180 92 118 (815) – 13,515 Other investments 151 3 – – – 1 155 LTV assets 14,091 183 92 118 (815) 1 13,670 Adjusted net debt 4,223 – 92 118 (828) 86 3,691 Other (16) – – – – 9 (7) LTV liabilities 4,207 – 92 118 (828) 95 3,684 LTV 29.9% (0.4%) 0.5% 0.6% (4.4%) 0.7% 26.9%

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.

77

Strength of debt metrics

Proportionally Consolidated 31 Mar 2017 30 Sept 2017 Loan to value (LTV) 29.9% 26.9% Weighted Average Interest Rate 3.1% 3.0% Interest cover 3.6x 4.0x Weighted Average Maturity of Drawn Debt (years) 7.7 8.9 Group 31 Mar 2017 30 Sept 2017 Loan to value (LTV) 22.6% 20.1% Available undrawn facilities £1.3bn £1.5bn Weighted Average Interest Rate 2.4% 2.1% Interest cover 4.5x 5.1x

78

Debt maturity (£m)

Year to March

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

£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.

Bank RCF Drawn (Unsecured) Sterling Bond (Unsecured)

200 400 600 800 1,000 1,200 1,400 1,600 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038

79

Debt financing – diverse profile

• LTV reduced from 30% to 27%
• Weighted average interest rate

reduced from 3.1% to 3.0%

• Issued £300 million unsecured

Sterling bond at 2.375% coupon

• Repaid £400 million 1.5%

convertible bond at maturity

• Average drawn debt term 8.9 years
• The Group has no requirement

to refinance until early 2021

£0.4bn £0.3bn £0.8bn £0.2bn £1.3bn £0.4bn

£4.0bn Drawn Debt1 (30 September 2017)

US Private Placements (Unsecured) Bank RCFs Drawn (Unsecured) Convertible Bond (Unsecured) Sterling Bond (Unsecured) JVs Securitisations (Secured) Debentures & loan notes (Secured)

1 Proportionally consolidated. 2 HUT’s debt shown at our share (£0.4 billion) within JV & Funds.

£0.6bn

JV & Funds bank loans (Secured)2

80

Portfolio valuation by sector

At 30 September 2017 Group JVs & Funds Total H1 Movement £m £m £m %1 £m Regional 1,121 1,866 2,987 0.1 2 Local 1,745 461 2,206 (0.9) (21) Multi-let 2,866 2,327 5,193 (0.4) (19) Department Stores and Leisure 588 1 589 2.4 14 Superstores 130 315 445 0.8 5 Solus and Other 365 – 365 5.8 20 Retail 3,949 2,643 6,592 0.3 20 West End 4,137 – 4,137 3.2 128 City 113 2,269 2,382 1.7 50 Offices 4,250 2,269 6,519 2.6 178 Residential2 116 18 134 3.6 7 Offices and Residential 4,366 2,287 6,653 2.6 185 Canada Water 270 – 270 (4.5) (13) Total 8,585 4,930 13,515 1.4 192 Standing Investments 7,827 4,587 12,414 1.2 157 Developments 758 343 1,101 3.3 35

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.

81

Portfolio weighting

At 30 September 2016 % 2017 (current) % 2017 (current) £m 2017 (pro-forma1) % Regional 20.7 22.1 2,987 20.8 Local 16.3 16.3 2,206 15.4 Multi-let 37.0 38.4 5,193 36.2 Department Stores and Leisure 4.6 4.4 589 4.1 Superstores 4.9 3.3 445 3.1 Solus and Other 2.5 2.7 365 2.5 Retail 49.0 48.8 6,592 45.9 West End 27.8 30.6 4,137 32.2 City 19.8 17.6 2,382 19.1 Offices 47.6 48.2 6,519 51.3 Residential2 1.4 1.0 134 0.9 Offices and Residential 49.0 49.2 6,653 52.2 Canada Water 2.0 2.0 270 1.9 Total 100.0 100.0 13,515 100.0 Of which London 58% 57% 8,627 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). 2 Standalone residential.

82

Lease length and occupancy

At 30 September 2017 Average Lease Length (yrs) Occupancy Rate (%)1 To Expiry To Break EPRA Occupancy Occupancy2 Regional 7.9 6.8 96.9 97.4 Local 7.7 6.7 97.6 98.4 Multi-let 7.8 6.7 97.2 97.9 Department Stores and Leisure 16.9 16.9 99.7 99.7 Superstores 10.7 10.0 100.0 100.0 Solus and Other 12.1 12.0 100.0 100.0 Retail 9.2 8.3 97.7 98.3 West End 8.9 7.3 95.8 96.1 City 9.4 8.2 97.2 98.1 Offices 9.1 7.7 96.3 96.9 Canada Water 6.4 6.3 95.5 97.3 Total 9.1 8.0 97.1 97.6

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

1 Space allocated to Storey is shown as occupied where there is a Storey tenant in place otherwise it is shown as vacant. Offices occupancy

would rise from 96.9% to 97.5% and total occupancy would rise from 97.6% to 97.9% if Storey space assumed to be fully let.

2 Including accommodation under offer or subject to asset management.

83

Portfolio net yields1,2

At 30 September 2017 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

6

Net reversionary yield % ERV Growth %

5,6

Regional 4.4 4.7 4.8 4.9 4 5.0 1.2 Local 5.1 5.3 5.4 5.5 11 5.6 1.1 Multi-let 4.7 5.0 5.0 5.2 7 5.2 1.1 Department Stores and Leisure 5.8 5.8 7.0 5.8 (11) 4.6 5.9 Superstores 5.8 5.8 5.8 5.5 (7) 5.3 (1.2) Solus and Other 5.3 5.3 5.3 5.4 16 4.2 (5.8) Retail 4.9 5.1 5.3 5.3 5 5.1 1.0 West End 3.4 3.8 3.8 4.3 (11) 4.7 1.0 City 4.3 4.3 4.3 4.5 1 4.9 1.3 Offices 3.7 4.0 4.0 4.4 (6) 4.8 1.2 Canada Water 2.8 2.9 2.9 3.6 11 3.7 (1.1) Total 4.3 4.6 4.7 4.8 – 5.0 1.0

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 months to 30 September 2017. 6 Excludes Euston Tower; as we move closer to tenant break in 2021, valuation now reflects refurbishment assumption which, if included, would distort these movements.

84

Annualised rent & estimated rental value (ERV)

At 30 September 2017 Annualised Rents (Valuation Basis) £m1 ERV £m Average Rent (£psf) Group JVs & Funds Total Total Contracted2 ERV Regional 61 86 147 166 31.5 33.7 Local 95 26 121 132 25.3 26.5 Multi-let 156 112 268 298 28.4 30.0 Department Stores and Leisure 36 – 36 29 14.8 12.0 Superstores 7 19 26 24 21.3 19.7 Solus and Other 21 – 21 16 20.1 16.0 Retail 220 131 351 367 24.9 25.2 West End3 128 – 128 176 57.8 61.6 City3 5 89 94 108 51.1 57.2 Offices3 133 89 222 284 54.8 59.7 Residential4 5 – 5 4 Offices and Residential 138 89 227 288 Canada Water 8 – 8 10 16.1 20.8 Total 366 220 586 665 31.0 33.3

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.

85

Rent subject to open market rent review

For the year to 31 March 2018 2019 2020 2021 2022 2018–20 2018–22 At 30 September 2017 £m £m £m £m £m £m £m Regional 7 17 11 17 14 35 66 Local 16 17 11 12 6 44 62 Multi-let 23 34 22 29 20 79 128 Department Stores and Leisure – – – – – – – Superstores 3 5 8 7 1 16 24 Solus and Other – – – – – – – Retail 26 39 30 36 21 95 152 West End 12 27 15 10 9 54 73 City 2 13 4 9 – 19 28 Offices 14 40 19 19 9 73 101 Canada Water 1 1 – – – 2 2 Total 41 80 49 55 30 170 255

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

86

Rent subject to lease break or expiry

For the year to 31 March 2018 2019 2020 2021 2022 2018–20 2018–22 At 30 September 2017 £m £m £m £m £m £m £m Regional 10 10 13 10 15 33 58 Local 7 8 10 9 12 25 46 Multi-let 17 18 23 19 27 58 104 Department Stores and Leisure – – – – – – – Superstores – – – – – – – Solus and Other – 1 – – – 1 1 Retail 17 19 23 19 27 59 105 West End 2 4 4 17 21 10 48 City – 13 9 8 1 22 31 Offices 2 17 13 25 22 32 79 Canada Water 1 1 1 1 – 3 4 Total 20 37 37 45 49 94 188 % of contracted rent 3.2% 6.0% 6.0% 7.3% 8.0% 15.2% 30.5%

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

87

For year to 31 March 2018 2019 2020 2021 2022 2018–22 At 30 September 2017 £m £m £m £m £m £m 1 Triton Square 2 – – – – 2 Committed developments 2 – – – – 2 2&3 Finsbury Avenue – 3 – – – 3 1&2 Broadgate – 6 – – – 6 10 – 40 The Broadway, Ealing 1 – 1 – – 2 Medium Term developments 1 9 1 – – 11

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

Rent subject to lease break or expiry – Developments detail

88

Contracted rental increases (cash flow basis)

For the year to 31 March 2018 2019 2020 2021 2022 2018–20 2018–22 At 30 September 2017 £m £m £m £m £m £m £m Expiry of rent free periods 11 14 5 – – 30 30 Fixed uplifts (EPRA basis) 1 1 – – – 2 2 Fixed & minimum uplifts – 1 1 1 1 2 4 Total 12 16 6 1 1 34 36

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

89

Total Property Return (as calculated by IPD)

6 months to 30 September 2017 Retail Offices Total % British Land IPD British Land IPD British Land IPD Capital Return 0.3 0.9 2.9 2.2 1.5 2.6

• ERV Growth

1.0 0.5 1.2 0.6 1.0 1.0

• Yield Movement1

5 bps

• 6 bps
• 6 bps
• 10 bps

0 bps

• 13 bps

Income Return 2.7 2.5 1.9 1.9 2.3 2.3 Total Property Return 3.0 3.4 4.8 4.1 3.8 5.0

1 Net equivalent yield movement.

90

BL property performance vs IPD – 5 years

40 240 70 60 150 1

50 100 150 200 250 300 Retail Offices Total

5 years ended 30 September 2017

Capital Returns Total Returns

Relative performance bps p.a.

91

At 30 September 2017 Sector BL Share Sq ft PC Calendar Year Current Value Cost to Come ERV Let & Under Offer % '000 £m £m1 £m2 £m Clarges Mayfair – Retail & Residential3 Mixed Use 100 104 Q4 2017 402 26 0.8 – 100 Liverpool Street Office 50 522 Q4 2019 132 136 18.8 5.1 1 Triton Square4 Office 100 366 Q4 2020 182 196 23.1 21.8 1 Finsbury Avenue Office 50 288 Q1 2019 85 32 7.8 2.2 Speke (Leisure) Retail 67 66 Q3 2018 9 8 1.1 0.9 Plymouth (Leisure) Retail 100 107 Q4 2019 – 48 3.1 1.5 Total Committed 1,453 810 446 54.7 31.5 Retail Capital Expenditure5 79

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 2017. 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 Current value includes units exchanged and not completed of £278m. Further sales of £66m exchanged post period end. 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.

5 Capex committed and underway within our investment portfolio relating to leasing and asset management.

Committed developments

92 92

Near term development pipeline

At 30 September 2017 Sector BL Share Sq ft Expected Start on Site Current Value Cost to Come ERV Let & Under Offer Planning Status % '000 £m £m1 £m2 £m Near term Pipeline 135 Bishopsgate Office 50 325 Q4 2017 89 49 9.1 4.4 Consented Gateway Building Leisure 100 105 Q3 2018 7 105 6.0 – Resolution to grant Bradford (Leisure) Retail 100 49 Q3 2018 1 16 0.9 – Pre- submission Teesside (Leisure) Retail 100 83 Q3 2018 34 48 4.6 – Resolution to grant Total Near Term 562 131 218 20.6 4.4 Retail Capital Expenditure3 95

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 2017. 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.

93 93

Medium term development pipeline

1 Planning consent for previous 240,000 sq ft scheme. 2 Canada Water site covers 5.5m sq ft in total based on net area based on gross area of up to 7m sq ft.

At 30 September 2017 Sector BL Share Sq ft Planning status % '000 Medium term Pipeline 2-3 Finsbury Avenue Office 50 563 Resolution to Grant 1-2 Broadgate Office 50 471 Pre-submission Blossom Street Office 100 340 Consented 5 Kingdom Street Office 100 332 Consented1 Meadowhall (Leisure) Retail 50 330 Resolution to Grant Peterborough (Leisure) Retail 100 204 Submitted 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 Total Medium Term excl. Canada Water 3,216 Canada Water Phase 12 Mixed Use 100 1,835 Pre-submission

94

Estimated future development spend and capitalised interest

At 30 September 2017 PC Calendar Year Cost to Come £m (excluding notional interest) – 6 months breakdown Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sept-20 Clarges Mayfair – Retail & Residential Q4 2017 20 4 2 – – – 100 Liverpool Street Q4 2019 24 36 33 22 9 8 1 Triton Square Q4 2020 6 21 38 49 42 19 1 Finsbury Avenue Q1 2019 8 10 12 1 1 – Speke (Leisure) Q3 2018 8 – – – – – Plymouth (Leisure) Q4 2019 15 15 11 6 – – Total Committed 81 86 96 78 52 27 135 Bishopsgate 2019 11 17 18 2 1 – Gateway Building 2022 3 3 3 3 3 8 Bradford (Leisure) 2019 2 7 7 – – – Teesside (Leisure) 2020 13 13 14 9 – – Total Near Term 29 40 42 14 4 8 Indicative Interest Capitalised

• n above at attributable rates1

4 5 5 4 2 1 Contracted Residential receipts to come 202 52 – – – –

1 Assumes interest capitalised at 4% on qualifying expenditure for developments.

95

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

Central London development pipeline

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

Source: CBRE

m sq ft

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

Q3 2017

9m sq ft (2.25 years of average supply) deferred since Referendum Movement since Referendum

96

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

West End development pipeline

m sq ft

Note: Forecast reflects CBRE’s estimate of earliest completions. Source: CBRE

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

Q3 2017

97

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

City development pipeline

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

Source: CBRE Note: Forecast reflects CBRE’s estimate of earliest completions.

m sq ft

Q3 2017

98

(2)

• 2

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

Yield Gap UK 10 Year Gilt Yield IPD All Property Net Initial Yield

0.0 2.0 4.0 6.0 8.0 10.0

All Retail Central London Offices

Property Yields and interest rate yield gap

Source: IPD

Property Yield vs 10 Year Gilt Yields

% NIY %

Q317

Retail and London Office Yields

Source: IPD/Bloomberg.

99

London office market rental outlook

Prime London Office Rents

£ psf 20 40 60 80 100 120 140 2000 1995 1990 2010 2005 2021 2016

Actual Forecast

West End City

Source: CBRE (historic) and Average Agents' Consensus (including PMA Autumn 17) for forecasts.

100

2 4 6 8 10 12 14 16 18 20 1985 1990 1995 2000 2005 2010 2015 Q3 2017

Vacancy Central London

5.9% 3.7%

Source: CBRE (historic).

West End City

West End & City Vacancy Rates

West End 10 year average City 10 year average

101

Retail Portfolio Valuation – previous classification

At 30 September 2017 Group JVs & Funds Total Movement £m £m £m %1 £m Shopping parks 2,056 1,154 3,210 (0.1) (3) Shopping centres 1,175 1,169 2,344 0.2 4 Superstores 130 315 445 0.8 5 Department stores 168 1 169 2.1 4 Leisure 420 4 424 2.5 10 Retail 3,949 2,643 6,592 0.3 20

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.

102

Retail Portfolio Net Yields1,2 – previous classification

At 30 September 2017 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 5.0 5.2 5.2 5.3 11 5.2 0.8 Shopping centres 4.4 4.7 4.7 5.0 3 5.1 0.7 Superstores 5.8 5.8 5.8 5.5 (7) 5.3 (1.2) Department stores 4.9 4.9 6.4 4.8 (10) 3.8 – Leisure 6.1 6.1 7.2 6.1 (15) 5.0 7.7 Retail 4.9 5.1 5.3 5.3 5 5.1 1.0

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; 6 months to 30 September 2017.

103

Disclaimer

The information contained in this presentation has been extracted largely from the Half Year Results Announcement for the period ended 30 September 2017. 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

• ther 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 of 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 Full 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

• r 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

• f 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 or the basis on which they were prepared. 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 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 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.