Investor and Analyst Tour 4 Kingdom Street, Paddington Central - - PowerPoint PPT Presentation

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Investor and Analyst Tour 4 Kingdom Street, Paddington Central

21 June 2017

Introduction

Tim Roberts Head of Offices

3

Agenda

Presentation

• Our Campus approach – meeting customer needs – Tim Roberts
• Delivering our Campus approach at Paddington Central

– Tim Haddon / Tim Downes

• Flexible workspace – Introducing Storey – Joff Sharpe
• Q&A

Tour of Paddington Central Drinks on the Rooftop, 4 Kingdom Street 3.45pm 4.30pm 5.15pm

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Responding to evolving customer needs

Digital Connectivity Talent Retention and Wellbeing Value for Money Flexibility Brand Alignment Social Hub Ease of Accessibility Safety and Wellbeing Collaboration Diverse Retail and F&B Offering

Talent retention and flexibility are becoming increasingly important to occupiers

Employees are more discerning and

demanding about the quality of the workplace

Sources: BL occupier/end user surveys 2016; Stoddart Review 2016; JLL Workspace Reworked 2016

5

Our campuses provide a differentiated offer

And respond to changing

customer needs Campuses provide a unique platform

Scale

• Range of accommodation
• Economies of scale to fund enhanced

services

• Foster collaboration between

businesses Control of environment

• Security and safety
• Active management of mix of uses
• Activate space outside the buildings to

enliven By d eliv ering these benefits, w e increa se d em a nd for our ca m p uses, d riv e incom e d iv ersity a nd d eliv er returns to our sha rehold ers Occupiers

• High quality buildings and environments

attracting the best talent

• Flexible space on flexible terms
• High standard of digital infrastructure

Employees, visitors and residents

• Excellent transport connectivity
• Broad retail, leisure and F&B offer
• Vibrant environments enlivened by

events

Paddington Central

Tim Ha d d on Head of Cam pus Tim Dow nes Developm ent Director

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Introducing Paddington Central

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• 1 million sq ft with opportunity to add 0.5 million sq ft
• Diverse occupier mix

Financial 28% TMT 26% Prof Services & Corporate 20% Natural Resources 9%

Introducing Paddington Central

Insurance 4% F&B, retail & leisure 12%

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Our investment at Paddington Central

• £775 million investment

– £470m acquisition, July 2013 – £210m acquisition of 1 Sheldon Square, April 15 – £95m capital spend, primarily development of 4 Kingdom Street

• Rationale for investment

– Re-weighting to West End – Adding a third London campus – High quality, long term income – Development opportunities – Excellent transport links including Crossrail Potentia l to a p p ly our exp ertise to grow rents a nd crea te v a lue

Excellent transport connectivity

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2.5 3.0 3.5 4.0 4.5

Physical environments Events Travel & accessibility Wellbeing & Perceptions Food & drink Overall

Paddington Central Benchmark Events Travel & accessibility Wellbeing & perceptions Food & drink Overall score Physical environments

Improving and enlivening the campus

£ 10 m

invested to upgrade the campus

55,0 0 0

people attended events in the last 12 months

Vibrant environments enlivened by events

Campus experience index (out of 5)

70 %

• f occupiers and

visitors thought that the area had changed for the better

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• Retail and leisure currently provides

12% of rent, with plans to double that

• Activating the canal-side; adding barges
• Retail pop ups and street markets
• Pergola outdoor dining – 850 covers

Broadening the mix of uses

Broad retail, leisure and F&B offer

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4 Kingdom Street

• New 147,000 sq ft office over nine floors
• Balconies on each floor; roof terrace

with basketball court

• Rationalised core with bigger reception,

and more flexible floor plates

• BREEAM Excellent, WiredScore

Platinum

• £85m development cost with an NDV of

£150m

– Completed on time and under budget

8 9%

Office space

5%

Ahead of pre- referendum net effective ERVs

>4 0 %

Ahead of best Paddington Central rent on acquisition in 2013 under offer

>20 %

IRR since commitment

High quality buildings attracting the best talent High standard of digital infrastructure

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0% 5% 10% 15% 20% 25% Acquisition to Mar 15 Apr 15 to Mar 17 Acquisition to Mar 17 Total Return Paddington Central IPD West End Offices British Land £55 £60 £65 £70 £75 £80 £psf Paddington Central top headline ERV Prime West End KF Office ERV (Re-Based)

Performance to date

Jul 2013 Acquisition Apr 2015 1 Sheldon Square acquisition

2014 2015 2016 2017 2018 2013

Apr 2017 4 Kingdom Street PC

• Public realm improvements
• Development of 4 Kingdom

Street

• Evaluation and planning
• Letting 150,000 sq ft of

vacant / grey space 437k sq ft of rent reviews

13%

Annua lised tota l return since a cq uisition

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• New development opportunity on site of

current management suite

• 190 bedroom hotel totalling over 100,000 sq ft
• Ground floor enlivened with high quality retail

and F&B

• Expect to submit planning in summer 2017 for

£100m development

• In advanced negotiations with a premium
• perator for pre-let

Gateway Building

Prem ium hotel cha nging p ercep tions a nd im p rov ing a rriv a l a t the ca m p us

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Com p leting the ca m p us a nd im p rov ing connections to m ore tra nsp ort op tions

5 Kingdom Street

• Existing consent for 210,000 sq ft offices with plans to enhance by at least 30%
• Opens up route through to Royal Oak and Warwick Avenue, completing campus
• Targeting planning submission 2018

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• Utilising redundant space on completion of

Crossrail works

• Potential to add leisure venue or other uses

– e.g. conference, medical Op p ortunity to further d iv ersify the m ix of uses a t the ca m p us

The Box

Introducing Storey

Joff Sha rp e Head of Operations, responsible for Storey

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• Existing occupier at Paddington Central

taking flexible space at Broadgate for their digital team

• 25,000 sq ft at 2 Finsbury Avenue on

two year term

• Full management service and fit out
• All-inclusive rate which reflects a

premium for flexibility

Our first customer up and running…

Flexible space on flexible terms

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Our brand launched… .

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Space launching summer 2017…

Appold Studios, Broadgate 2 Finsbury Avenue , Broadgate

…a further 8 0 ,0 0 0 sq ft of opportunities identified across our cam puses

International House, Ealing Broadway

• 7,000 sq ft over 4 floors
• Liverpool Street 2 minutes
• 20,000 sq ft
• Ealing Broadway

6 minutes

• 54,000 sq ft, including Kingfisher

25,000 sq ft

• Liverpool Street 2 minutes

Conclusions

Tim Roberts Head of Offices

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Key messages

• Our approach is defined by what our

customers want

• Our unique campus proposition is well

positioned to meet the evolving needs of

• ur customers

– Good progress has been made at Paddington Central with more development to come – Flexible workspace broadens our offer to both existing and new customers

• Encouraging post-referendum
• ccupational demand is an endorsement
• f our approach

Q&A