JPMC European Small/ Mid Cap Conference 12 September 2013 - - PowerPoint PPT Presentation

JPMC European Small/ Mid–Cap Conference

12 September 2013

Strategic priorities

Continued focus on income, asset management & developments:

• Out of town retail
• Retailer distribution

Divestment of low yielding assets:

• Wholly-owned residential investments
• City offices

Continue to leverage strong joint venture relationships Emphasis on growing income & underlying profits to cover the dividend

2

Highlights

Rebalancing portfolio; building towards dividend cover Acquisitions of £124.0m1 off average yields of 7.3% Disposals of £352.7m1 off average yields of 4.4% New lettings at One Carter Lane to MFS and SEB

• 60,600 sq ft at average rents of £62.40 psf
• WAULT 17 years (15 years to first break)

New five year financing facilities with Helaba and RBS totalling £254m

• Blended margin 2.4%

3

(1) LondonMetric share

Occupational activity

Investment portfolio £873.7m

• Average yield 6.9% (March 2013 6.4%)
• WAULT 11.3 years
• Occupancy 99.2%
• Contracted rental income £52.1m
• Income subject to fixed uplifts 24%
• Income expiring over next 5 years 3.7%

4

Development portfolio £124.7m

• Average yoc 6 – 10%, 250bp margin
• One Carter Lane on track to complete

refurbishment March 2014

• Pre-let 58% of target income

22 new leases agreed (426,500 sq ft)

• WAULT 17.1 (14.9 years to first break)
• New rents 5.8% ahead of ERVs

Delivering the strategy

5

At merger Today

Investment activity

Acquisitions of £124.0m1 (NIY 7.3%)

• Boden DC, Leicester £5.2m (NIY 8.3%)
• Norbert Dentressengle DC, Crick £17.9m (NIY 7.3%)
• Argos DC, Bedford £51.7m (NIY 7.0%)
• WH Smith DC, Birmingham £10.1m (NIY 7.9%)
• Milton Keynes & Cardiff retail parks £25.8m (NIY 8.0%)
• Martlesham Heath retail park £10.4m (NIY 6.5% rising to 7.4%)

Disposals of £352.7m1 (NIY 4.4%)

• One Fleet Place £112.5m (NIY 5.1%)
• Residential sales £101.8m, across 200 units
• Distribution portfolio £138.4m (NIY 5.6%)

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(1) LondonMetric share

Investment Strategy

Distribution London Retail

Coventry Carter Lane, London Leicester Primark, Thrapston Tesco, Harlow Clerkenwell Quarter, London Bishop Auckland

Opportunity driven Strong cashflow Retailer led Income Asset management Short-cycle development

Unilever, Leatherhead 7

In solicitor’s hands

Financing

Five year Helaba financing facility for £114m

• For five existing retailer distribution assets + future acquisitions

Five year RBS financing facility for £140m

• For majority of retail assets

£180m existing Lloyds and RBS RCFs available to finance acquisitions Redeeming £96m debt facility on One Fleet Place and One Carter Lane

• Carter Lane becomes mortgage-free

Debt term to maturity increases from 3.0 years to 4.3 years Marginal cost of debt 4.1%; all-in cost of debt 4.0%1

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(1) Falls to 3.7% assuming facilities were fully drawn on current libor and swap rates

Dividend cover – post distribution sale

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(1) Based on 12 months of London & Stamford and 12 months of Metric Property (2) Full year Metric Property and post merger contracted income from acquisitions

(2) (1)

Appendix

Top 10 tenant exposure(1)

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(1) Gross rental income based on contracted rents for total portfolio excluding residential (2) Market capitalisations as at 10 September 2013 (3) Market capitalisation of parent Home Retail Group (4) Market capitalisation of parent Associated British Foods (5) Market capitalisation of parent Kingfisher (6) USD

Debt facilities

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(1) Helaba Distribution term loan: Wellingborough, Crawley, Nottingham, Thrapston, Birmingham, Bedford, Crick (2) RBS Retail term loan 1: Christchurch, Leicester, Luton, Southampton, Milton Keynes, Tonbridge, Ipswich, Bishop Auckland, Mansfield, Loughborough, Milford Haven, Wick, Congleton, Scarne, King's Lynn, Bedford (Alban Retail Park & Midland Road), Sheffield, St Albans, Hove & Cannock (3) Wells Fargo Retail term loan: Launceston, Coventry & Newry (4) Distribution JV: Harlow (5) MIPP JV: Ashford, Bristol (Longwell Green), Camborne, Haverhill, Inverness, Lichfield, Londonderry, Nottingham, Orpington, Swindon, Eastbourne

(1) (2) (3) (4) (6)

Income statement

FY to 31 March (£m) 2013 2012 2013 2012 Profit before tax & exceptional items 45.6 32.7 39.9 19.5 Net rental income 39.4 48.1 29.2 35.5 Share of JV net income 5.3 5.5 4.5 5.3

Management fees & other income

10.6 6.4 10.4 6.4 General corporate costs (15.6) (14.2) (11.0) (9.5) Net finance costs (13.7) (14.7) (11.8) (13.4) Underlying profit 25.9 31.0 21.3 24.3 Valuation movements(3) 19.7 1.7 18.6 (4.8)

(1) 12 months of London & Stamford and 12 months of Metric Property (2) 12 months of London & Stamford and two months of Metric Property for 2013, London & Stamford only for 2012 (3) Includes revaluation, derivative movements and profit/(loss) on sales

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Pro-forma Enlarged group(1) Statutory format(2)

Balance sheet

At 31 March (£m) 2013 2012 Property portfolio (incl trading properties) 990.6 663.9 Joint ventures 120.9 161.6 Cash 37.6 136.9 Bank debt (464.5) (322.8) Other net assets (7.9) (8.7) Net assets 676.7 630.9 EPRA adjustments 10.6 12.7 EPRA net assets 687.3 643.6 EPRA NAV per share 109p 119p Exceptional items 38.9 1.8 Adjusted net assets 726.2 645.4 Adjusted NAV per share 116p 119p LTV 43% 34%

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Movement in net assets

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(1)

(1) Merger with Metric: £11.9m, internalisation of management contract £14.4m, impairment of Meadowhall mark to market £23.2m (2) Metric merger: £190.3m, tender offer: -£100.7m (3) Add back exceptional items of £49.5 less EPRA adjustments of £10.6m

(2) (3)