Results Presentation Full Year ended 31 March 2015 - - PowerPoint PPT Presentation

Results Presentation

Full Year ended 31 March 2015

@britishlandplc www.britishland.com

Results Overview

Chris Grigg Chief Executive

3

Highlights

Another strong set of results Continued outperformance Exceptional leasing activity Ongoing portfolio repositioning

4

Macro trends driving our strategy

Sustainability Transforming impact

• f technology

Importance of infrastructure Population growth and urbanisation Globalisation

5

Creating great environments Growing in London and the South East Investing around infrastructure Internet resilient retail

Focused investment activity

Leveraging our placemaking skills to create Places People Prefer Exciting and lifestyle oriented real estate

1

Investing in existing assets Focusing on regeneration and growth areas

2

Accessible and well-connected properties Over £3bn of our assets are near Crossrail stations

3

Profitable development

Well located, locally preferred, multi-let assets Engaging environments with a broad F&B offering Omni-channel compatible

5

Mixed-use developments Replenishing the medium term pipeline

Understanding

• ur customers

6 4

Providing spaces and services which meet their needs

6

2015 financial highlights

FY to 31 March 2015 Change NAV per Share 829p +20.5% Valuation £13.6bn +12.1% Total Property Return 18.4% Underlying Profit Before Tax £313m +5.4% Dividend per Share 27.7p +2.5% Total Accounting Return 24.5% 2-year total accounting return

48%

7

Strong valuation performance

• Valuation well ahead in

both sectors

– +7.5% in Retail; +18.8% Offices

• Letting up of recently completed

developments a key factor

• Benefiting from increased weighting to

London and the South East

– Now 64% of portfolio (pro-forma)

• Continue to outperform market

– Capital returns 190bps ahead – Total returns 130bps ahead

Contribution to valuation uplift Yield Movement Development Asset Management Increase in valuation

12%

8

Exceptional leasing performance

• Strong leasing volumes
• Letting space on attractive terms
• Good quality and diverse mix of occupiers
• Strengthening rental trend; strong growth in Offices, notable

improvement in Retail

FY to 31 March 2015 Retail Office Total Lettings / renewals (000 sq ft) 1,137 810 1,947 Lettings / renewals under offer (000 sq ft) 348 152 500 Investment lettings / renewals vs ERV 8.7% 10.8% 10.0% Occupancy 98.5% 98.1% 98.3% LFL occupancy +30bps +730bps +310bps ERV growth 2.5% 8.0% 4.6%

Investment lettings/ renewals vs ERV

10%

9

• 1,600
• 1,200
• 800
• 400

400 800 1,200

Broadly balanced investment activity

Investment Activity

£m

Disposals Acquisitions & Development Net Spend

£343m £395m (£19m) £626m (£105m) Net Spend

2011 2012 2013 2014 2015

Gross investment activity in 2015

£2.4bn

10

Increasing medium term development pipeline

• 7m sq ft focused on London,

including Canada Water 7m sq ft

Pre-selling residential apartments

• £370m of residential sales
• Includes £259m at Clarges Mayfair

£370m

Selling mature retail assets

• £245m sold in addition to

superstore disposals £245m

Reducing investment in standalone superstores

• 28 foodstores sold
• Now under 7% of portfolio
• c60% in London and South

28

Increasing investment in London and South East

• Now 64% of total portfolio
• £210m acquisition of One Sheldon

Square

• On site at 4 Kingdom Street

64%

Investing in line with strategy

1 3 2 4 5

7%

11

Retail & Leisure highlights

Improving rental growth Continued strength of

• perating metrics

Ongoing evolution of the portfolio Strong uplift in valuation and total returns

• 2

2 4 6 8 FY 2013 FY 2014 FY 2015

Improved Retail & Leisure valuation performance

H1 Valuation change H2 Valuation change

• 1.5%

4.4% 7.5%

% FY valuation change

Outperformance vs All Retail Total Returns

90bps

ERV Growth

Good demand from high quality occupiers

1.1m sq ft

Fashion & Footwear General Retail Food & Leisure Health & Beauty Electrical & Mobile Phone DIY Other

Lettings and renewals by sector by rent

43.3% 16.6% 13.8% 5.1% 4.6% 3.9% 12.7%

Letting/renewals ahead of ERV

8.7%

14

British Land operational metrics remain strong

Retailer same store sales

+3.7%

Average dwell time

+4.5%

Source: BL consumer surveys Source: Springboard

Footfall +1.9%

ahead of market by

290bps

Source: Springboard and Experian

Average LFL spend

+16% annualised

Source: BL consumer surveys

Occupancy remaining

high at98.5%

Source: BL

+5%

Source: BL consumer surveys, CACI

affluent

shopper visits

15

85 90 95 100 105 110

UK Market (Experian Index) British Land

Continuing to outperform footfall benchmarks

Outperformance in 2015 BL footfall performance vs Experian benchmark

Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15

Sep 09 = 100

+290bps

16

Strengthening rental growth trend

Rental growth in 2014/15 British Land Retail rental growth vs IPD British Land IPD %

• 0.5

0.0 0.5 1.0 1.5 2.0 2.5 3.0

H1 2013/14 H2 2013/14 H1 2014/15 H2 2014/15 FY 2013/14 FY 2014/15

2.5%

17

Investment driving performance – Meadowhall

• £3m upgrade to premium retail offer
• Last 6 month sales +6.0% for

retailers in Park Lane

– vs 3.6% across Meadowhall

• £50m refurbishment planned

to start in September

18

Investment driving performance – Ealing Broadway

340,000 sq ft Shopping centre Growing and affluent area 19m annual footfall Next to Crossrail station

Acquired in 2013 for £143m; 6.9% NIY

• Bought in two adjoining ownerships
• Phase 1 refurbishment completed
• Re-positioning the occupiers
• Submitted planning for wider

refurbishment and PRS development

• Delivering performance:

– ERV +19% since acquisition – Sales +3.2% and accelerating

Continuing to evolve our retail portfolio

28 superstores: £475m; 4.8% NIY £245m mature assets; 6.2% NIY Surrey Quays leisure park (£135m) £445m increasing share of existing assets; 5.3% NIY £169m invested in HUT portfolio 5.6% NIY Completed 305,000 sq ft Old Market, Hereford Extensions to 4 retail schemes Refurbishment at Ealing Broadway Upgrade to premium offer at Meadowhall Improvements to landscaping and amenities £720m disposals £749m acquisitions £95m development/capex

19

20

Office & Residential highlights

Valuations strongly ahead Exceptional leasing activity Campuses performing well and appealing to new occupiers Good progress on new developments Strong and broad based rental growth

21

4 8 12 16 20

FY 2013 FY 2014 FY 2015

Strong Office & Residential performance

H1 Valuation change H2 Valuation change ERV Growth

5.0% 14.5% 18.8%

% FY valuation change

ERV growth in 2015

8.0%

• Outperformed IPD capital returns by 440 bps

22

Exceptional Office leasing in strong markets

• 960,000 sq ft of lettings/renewals

completed/under offer

• Terms well ahead of valuation:

10.8% ahead of ERV

• Occupancy at 98.1% (+730 bps

like-for-like)

• Diverse range of lettings

– 175,000 sq ft tech/flexible working – 86,000 sq ft food and leisure

Banks & Financial Services TMT Government Business/Professional Services Food & Leisure Insurance Other 38% 21% 16% 10% 8% 3% 4%

Lettings/renewals ahead of ERV

10.8%

45 44 43 42 41 40 39 38 37 36 35 34 33 32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1

Leasing strategy success at Leadenhall

• 84% let/under offer up from 53%

a year ago

• Diverse mix of occupiers
• Beating records for City rents

4 times over

• Most recent letting at £90psf

to Affinity Shipping

• Valuation +37% in the year

Let prior to 2014/15 Let in 2014/15 Under offer In negotiations

Reception and Restaurants

Rental high

£90psf

24

Widening the appeal of Broadgate

Attracting different occupiers

62,000 sq ft let to WeWork 11,000 sq ft let to Central Working

£20 million redevelopment of Broadgate Circle completed 5 Broadgate completing shortly Planning granted at 100 Liverpool Street

25

Making progress at Paddington Central

First round of public realm improvements underway On site at 4 Kingdom Street for 147,000 sq ft office building Acquisition of One Sheldon Square for £210 million Grey space fully let including 51,000 sq ft to Microsoft Good prospects for rental growth with average rents of £52 psf

26

Facebook at Regent’s Place – a strong endorsement

• f the campus

Now Facebook’s largest European hub

Taking an additional 66,000 sq ft Brings total space to over 150,000 sq ft Rents nearly doubled on a net effective basis

Improving retail and A3 offer in line with broader occupier mix Nearly 350,000 sq ft of rent reviews to come in 2016

£2.5m p.a. rental uplift at current rental levels

27

Significant development pipeline

• Highly successful development programme since 2010
• Completed projects generated over £1bn of profit; an IRR of over 30%
• Successfully replenished our pipeline at good prices
• Significant development projects committed or in near-term pipeline
• Expected to generate £500m with around £330m still to come

Sq Ft m Total cost £m Estimated Profit £m Completed developments (since 2010)1 3.2 1,120 1,100 Committed/Near-Term Projects 2.4 1,500 500

Financial Review

Lucinda Bell Chief Financial Officer

29

Highlights

FY to 31 March 2014 2015 Change Underlying Profit before Tax (£m) 297 313 5.4% Underlying Earnings per Share (p) 29.4 30.6 4.1% Dividend per Share (p) 27.0 27.7 2.5% Valuation Performance 8.3% 12.1% EPRA Net Asset Value per Share (p) 688 829 20.5% LTV 40% 35% Total Accounting Return 20.0% 24.5%

30

Underlying profit bridge

297 313 16 9 6 (7) (7) (1)

FY 2014 Developments Like-for-Like rental growth Liability management Current year investment activity Administration expenses Other FY 2015

£m

31

Net rental income movement

1.5% 4.2% 2.3% Retail Offices Total

£m

585 562 22 9 3 (12) 1

FY 2014 Developments Like-for-Like rental growth Current year acquisitions Current year disposals Prior year investment activity FY 2015

32

Financing costs

(202) (201) (6) 6 (1) 3 (1)

FY 2014 Developments Liability management Current year acquisitions Current year disposals Prior year investment activity FY 2015

£m

33

Income statement

FY to 31 March 2014 2015 Change Net Rental Income (£m) 562 585 4.1% Fees & Other Income (£m) 15 14 Administrative Expenses (£m) (78) (85) Net Finance Costs (£m) (202) (201) Underlying PBT (£m) 297 313 5.4% Underlying Earnings per Share (p) 29.4 30.6 4.1% EPRA Operating cost ratio 16.2% 16.4%

34

Another strong valuation performance

FY to March 2015 Valuation £bn Uplift £m Uplift % Yield Compression bps ERV Growth % NEY % Weighting % London/SE Weighting % Retail & Leisure 7.5 581 7.5 47 2.5 5.2 53 Offices & Residential 6.1 1,001 18.8 47

• Of which Offices

5.8 982 19.4 51 8.0 4.6 45 Total 13.6 1,582 12.1 48 4.6 4.9 100 64

• Of which Standing

Investments 12.5 1,336 11.1

• Of which

Development 1.1 246 25.9

35

Valuation growth drivers – Retail & Leisure

FY to March 2015 Valuation £bn Uplift % Yield Compression bps ERV Growth % H1 H2 FY H1 H2 FY H1 H2 FY Shopping parks 3.3 7.2 1.1 7.5 45 7 52 0.9 2.1 3.0 Shopping centres 2.2 5.8 3.2 8.7 38 13 48 0.3 1.8 2.1 Superstores 0.9 3.1 (1.0) 1.9 12 (11) 3 0.1 (0.1) (0.1) Department stores 0.6 6.5 10.1 17.3 19 42 56 8.6 0.0 8.7 Leisure 0.5 7.1 2.0 7.1 57 21 86 0.7 0.3 1.1 Retail & Leisure 7.5 6.0 2.0 7.5 35 10 47 1.1 1.5 2.5

36

Valuation growth drivers – Offices & Residential

FY to March 2015 Valuation £bn Uplift % Yield Compression bps ERV Growth % H1 H2 FY H1 H2 FY H1 H2 FY West End 3.2 9.0 9.0 18.6 21 24 46 2.6 3.6 6.3 City 2.6 9.0 11.3 20.6 34 30 59 5.9 4.4 10.6 Offices 5.8 8.9 10.0 19.4 26 27 51 3.9 4.0 8.0 Residential 0.3 4.9 2.8 7.4 Offices & Residential 6.1 8.7 9.7 18.8

37

Growth in diluted EPRA net asset value

NAV (p)

688p 829p 92p 56p 31p (27p) (8p) (3p)

Mar 14 Offices & Residential Retail & Leisure Underlying Profit Dividends Dilution for convertible Tesco Swap Mar 15

38

Strength of debt metrics

Proportionally Consolidated 31 Mar 2014 31 Mar 2015 Loan to Value (LTV) 40% 35% Average Interest Rate 4.1% 3.8% Interest Cover 2.5x 2.6x Average Maturity of Drawn Debt (years) 8.7 8.7 Group 31 Mar 2014 31 Mar 2015 Loan to Value (LTV) 29% 28% Available undrawn facilities £2.0bn £1.2bn Average Interest Rate 3.5% 3.3% Interest Cover 3.2x 3.0x

39

Offices To Let Residential To Sell Pre sold/ Pre let Offices Residential Retail

100 200 300 400 500 600 700 800 900

Development programme

• Under construction programme

commitment £0.8bn

• 4 Kingdom Street now committed
• 87% of costs fixed on projects

under construction

• Near-term pipeline replenished -

with washover/optionality

• Completed Canada Water site

assembly Development Commitment

£m Under Construction Near Term

40

Future income growth

Annualised Gross Rents Cash Flow Basis £m Accounting Basis £m Current Passing Rent 578 613 Expiry of Rent-free Periods 63 Fixed, Minimum Uplifts 16 Developments – Under construction 21 21 Total Contracted 678 634 Developments – Under Construction 17 15 Investments – Reversions 12 12 Investments – Letting of Expiries and Vacancies 18 18 Developments – Near-term to let 50 42 Potential Rent in 5 Years 775 721 Increase 34% 18%

Outlook

Chris Grigg Chief Executive

42

Re-positioning the business for long-term growth

A bigger and more modern portfolio More concentrated in London and the South East

– 64% of our portfolio up from 50%

A larger Offices business

– Nearly half our portfolio up from one third – West End now over 60% – Focused on large mixed use campuses

Retail portfolio more focused

– Well positioned for an omni-channel world

Significant development pipeline Less gearing

43

Clear strategic focus aligned to long-term trends

Importance of infrastructure Transforming impact

• f technology

Globalisation Population growth and urbanisation Sustainability Macro trends Investment themes Investing around infrastructure

6

Understanding our customers Profitable development Internet resilient retail Growing in London and the South East Creating great environments

5 4 3 2 1

Our priorities for the year ahead

Focus on London and South East Creating great environments Improving areas with good infrastructure Development Investing in our existing Retail assets Likely to be a net disposer to fund developments and exploit a strong market Lower gearing Investing in people and technology Getting closer to our customers Consistent approach Disciplined use of capital

1 2

Expanding our long-term capabilities

3

44

45

Canada Water − one of London’s largest regeneration

• pportunities

Nine Elms White City King’s Cross Earls Court

200 acres 93 acres 67 acres 69 acres 46 acres Canada Water

Site controlled by British Land with the London Borough of Southwark

21 ownerships

London Opportunity Area Good infrastructure

5 ownerships 5 ownerships 3 ownerships

46

A new town centre for Canada Water

Mixed use development

In tune with modern lifestyles

Using existing water and green spaces Modern and technology enabled Integrated with the local community

Up to 7m sq ft of space (gross) Retail Sport & leisure Residential Educational Cultural Southwark Park Russia Dock Woodland Canada Water Social and economic opportunities Affordable housing Services and amenities Engaging public realm Adaptable Internet enabled Intelligent buildings Energy efficient

47

Outlook

Outlook broadly in line with first half

Yields have tightened further Some political uncertainty remains

Expect interest rates and inflation to remain low Rental growth has strengthened

Strong growth in offices Clearer growth trends in retail

Appendices

49

BL property outperformance vs IPD – 5 years

100 480 240 100 350 180

100 200 300 400 500 600 Retail Offices Total 5 years ended 31 March 2015

Outperformance bps pa

Capital Returns Total Returns

50

Adjusted net debt – proportionally consolidated (£bn)

4.9 4.9 0.8 0.3 (1.0) (0.1)

Mar 14 Net Debt Acquisitions Development & Capex Disposals Operating Cashflow after cash dividends Mar 15 Net Debt

LTV 40% LTV 35%

51

Reconciliation of underlying profit before tax

FY to 31 March (£m) 2014 2015 IFRS Profit before tax attributable to shareholders of the Company 1,100 1,734 Net valuation movement (includes disposals) (873) (1,505) Deferred and current taxation of joint ventures & funds 5 (2) Capital financing costs 57 47 Add non-controlling interests 8 39 Underlying Profit Before Tax 297 313 EPRA adjustments

• 6

EPRA Earnings Before Tax 297 319

52

Gross rental income1

Accounting Basis £m 12 months to 31 March 2015 Annualised as at 31 March 20154 Group JVs & Funds2 Total Group JVs & Funds2 Total Shopping parks 106 53 159 114 62 176 Shopping centres 61 51 112 63 50 113 Superstores 11 57 68 13 38 51 Department stores 32

• 32

29

• 29

Leisure 29

• 29

31

• 31

Retail & Leisure 239 161 400 250 150 400 West End 109

• 109

110

• 110

City 5 89 94 4 94 98 Provincial 4

• 4
• Offices

118 89 207 114 94 208 Residential3 3

• 3

3

• 3

Offices & Residential 121 89 210 117 94 211 Total 360 250 610 367 244 611

Table shows UK total, and includes completed developments.

53

Operating costs metric

FY to 31 March (£m) 2014 2015

Property outgoings 35 33 Administrative expenses 78 85 Fees and other income (15) (14) Ground rent costs (2) (3) EPRA Costs (including direct vacancy costs) 96 101 Gross rental income 597 618 Ground rent costs (2) (3) Gross Rental Income (EPRA basis) 595 615 EPRA Cost Ratio (including direct vacancy costs) 16.2% 16.4%

Table shows figures on a proportionately consolidated basis which includes the Group’s share of joint ventures and funds and excludes non- controlling interests in the Group’s subsidiaries.

54

Reconciliation of EPRA NAV & NNNAV

31 March 14 31 March 15 £m pence £m pence Balance Sheet (IFRS) Net Assets 7,117 697 8,565 786 Deferred tax arising on revaluation movements 6 13 Mark to market on effective cash flow hedges and related debt adjustments 173 257 Adjust to fully diluted on exercise of share options 39 37 Adjust to dilute for convertible bond

• 400

Surplus on trading properties 63 96 Less non-controlling interests (371) (333) EPRA NAV 7,027 688 9,035 829 Deferred tax arising on revaluation movements (6) (13) Mark to market of debt and derivatives (321) (663) EPRA NNNAV 6,700 656 8,359 767

55

EPRA balance sheet (proportional consolidation)

£m March 14 Group JVs & Funds March 15 Total properties 12,040 9,068 4,609 13,677 Net debt (4,890) (3,425) (1,493) (4,918)2 Other net assets (liabilities) (123) 491 (215) 276 EPRA Net Assets 7,027 6,134 2,901 9,035 Loan to Value (LTV)1 40% 28% 35% Average interest rate 4.1% 3.3% 3.8% Interest cover 2.5x 3.0x 2.6x Average maturity of drawn debt (years) 8.7 7.8 8.7

56

Debt maturity – group (£m)

200 400 600 800 1,000 1,200

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Debenture & loan notes (Secured) Bank Term Loan (Secured) US Private Placements (Unsecured) Convertible Bond (Unsecured) Bank RCF Drawn (Unsecured) Bank RCF Undrawn (Unsecured)

Pro-forma for the one year extension of the £785m facility agreed post year end.

57

Debt maturity – joint ventures and funds1 (£m)

JVs - Securitisations Funds - Bank drawn Funds - Bank undrawn JVs - Bank drawn

200 400 600 800 1,000 1,200

2016 2017 2018 2019 2020 2021 - 2025 2026-2036

58

Debt Financing – Diverse funding profile

• £1.9bn of refinancings arranged

(including £785m RCF April 14)

• WAIR improved to 3.8% from 4.1%
• Treasury activity in the year has

improved earnings by £11m in FY15, £18m in FY16 British Land

• £485m RCF with initial margin 90bps

(February 15) replaced £310m and £560m RCFs

– Reducing surplus facility capacity (lower leverage mindset) – Reducing cost – Extending term to February 2020

JV & Funds

• Refinanced £675m JV & Funds debt

at borrowing costs 280bps & 80bps lower than the previous facilities (September 14 & March 15)

Convertible Bond (Unsecured) Bank RCF Drawn (Unsecured) Debenture & loan notes (Secured) US Private Placements (Unsecured) JVs Securitisations JV & Funds Term Loans (Secured)2

Bank Term Loan (Secured)

Diverse Debt Profile1 (31 March 15)

£0.7bn £0.4bn £0.3bn £0.9bn £0.7bn £1.6bn £0.6bn

59

At 31 March 2015 £m Gross Debt (principal value) 5,202 IFRS adjustments: Issue costs and premia (23) Fair value hedges 153 Other Items 99 IFRS gross debt 5,431 Market value of derivatives 32 Cash (288) IFRS net debt 5,175 Adjustments: Remove market value of derivatives (32) Remove fair value hedges (153) Other adjustments (72) Adjusted net debt 4,918

Gross and net debt reconciliation

60

Number of shares

Number of shares (m) Mar 14 Mar 15 IFRS Basic Weighted Average 999 1,016 IFRS Diluted Weighted Average 1,004 1,022 EPRA Diluted1 Weighted Average 1,004 1,080 Period End 1,021 1,090

61

FY16 income statement guidance

• Gross rental income

– Annualised accounting rent: £611m as at 31 March 2015 – Post year end acquisition: Purchase of One Sheldon Square for £210m with £9m of gross rental income – Developments: Further £13m of contracted income to come from developments (including £12m from 5 Broadgate), and per valuers assumptions; further £5m of income not yet contracted – Like-for-like: Given portfolio nearly full, will be driven by rental growth (and full year impact of FY15 leasing)

• Property outgoings

– Likely to be similar to FY15 as a percentage of gross rents

• Administrative costs

– Increase likely to be same order of magnitude to FY15 given investment in people and developments

• Financing

– Weighted average interest rate now 3.8% on gross debt of £4.9bn

• Convertible bond

– For the whole of FY16 underlying EPS will be diluted for the convertible bond. – For earnings calculations, the interest payable on the convertible of £6m will need to be added back and the number of shares increased by 58 million

• Dividend

– 2.5% increase in 2016, as we improve dividend cover

• Other

– Selling £200m of assets will reduce profits by c.£6m, pro-forma LTV by c.1%

62

Superstores

Stand-alone Superstores1 In Shopping Centres & Shopping Parks2 Total Exposure1,2,3

Store Size Number

• f Stores

Valuation (BL share) Capital Value psf WALL to FB yrs Number

• f Stores

Valuation (BL share) Capital Value psf WALL to FB yrs Number

• f Stores

Valuation (BL share) Capital Value psf WALL to FB yrs ‘000 SQ FT £m £m £m >100 9 242 377 13.6 5 366 552 13.8 14 608 466 13.7 75-100 14 294 470 18.7 1 41 483 12.9 15 335 471 17.9 50-75 17 296 443 13.2 1 12 190 12.1 18 308 421 13.1 25-50 9 64 244 9.4 3 31 437 15.5 12 95 285 11.3 0-25 8 28 200 13.3 19 79 405 11.6 27 107 321 12.1 March 2015 57 924 395 14.5 29 529 491 13.9 86 1,453 426 14.4 September 2014 81 1,286 423 14.5 26 337 479 13.9 107 1,623 433 14.4

Geographical Spread Gross Rent (BL Share) Lease Structure London & South 59% Tesco £40m RPI and Fixed 11% Rest of UK 41% Sainsburys £31m OMRR 89% Other £7m

63

Major property holdings

At 31 March 2015 (excl. developments under construction) BL Share % Sq ft 000’s Rent £m pa1 Occupancy Rate %2 Lease Length yrs3 1 Broadgate, London EC2 50 3,963 194 99.9 6.5 2 Regent’s Place, London NW1 100 1,588 72 99.4 8.4 3 Meadowhall Shopping Centre, Sheffield 50 1,448 85 97.3 7.1 4 Paddington Central 100 608 24 99.5 9.2 5 Sainsbury’s Superstores4 50 2,715 59 100.0 14.7 6 The Leadenhall Building 50 602 22 83.3 14.5 7 Debenhams, Oxford Street 100 363 11 100.0 24.0 8 Tesco Superstores4 64 1,238 27 100.0 14.8 9 Teesside Shopping Park, Stockton-on-Tees 100 417 15 96.6 7.1 10 Drake Circus Shopping Centre, Plymouth 100 414 16 96.0 5.6

64

Top 20 customers & customer split by industry

As at 31 March 2015 % of Contracted Rent

Tesco plc 6.5% Debenhams 5.7% J Sainsbury plc 5.0% HM Government 3.2% UBS AG 3.0% Kingfisher (B&Q) 2.6% Home Retail Group 2.6% Next plc 2.5% Virgin Active 1.9% Spirit Group 1.6% Dixons Carphone 1.6% Alliance Boots 1.6% Marks & Spencer Plc 1.5% Arcadia Group 1.4% Herbert Smith 1.3% Royal Bank of Scotland 1.1% Aegis Group 1.1% TJX Cos Inc (TK Maxx) 1.0% New Look 1.0% SportsDirect 0.9% General Retail 20% Fashion & Beauty 17% Banks & Financial services 14% Supermarket 13% Professional & Corporate 7% Food/Leisure 9% DIY 7% Government 3% TMT 6% Manufacturing 3%

Customer Split by Industry (%)

Other Business 1%

65

Portfolio weighting

At 31 March 2014 % 2015 (Current) % 2015 (Current) £m 2015 (Pro forma)¹ % Shopping parks 23.1 24.4 3,330 23.1 Shopping centres 15.6 16.0 2,185 15.2 Superstores 11.1 6.9 934 6.5 Department stores 4.7 4.3 593 4.1 Leisure 2.8 3.8 515 3.6 Retail & Leisure 57.3 55.4 7,557 52.5 West End 22.7 23.9 3,251 26.9 City 17.1 18.8 2,567 18.1 Provincial 0.8

• 3
• Offices

40.6 42.7 5,821 45.0 Residential2 2.1 1.9 259 2.5 Offices & Residential 42.7 44.6 6,080 47.5 Total 100.0 100.0 13,637 100.0

Table shows UK total, excluding assets held in Europe

66

Portfolio valuation by sector

At 31 March 2015 Group JVs & Funds1 Total1 Change %2 £m £m £m H1 H2 FY Shopping parks 2,161 1,169 3,330 7.2 1.1 7.5 Shopping centres 1,106 1,079 2,185 5.8 3.2 8.7 Superstores 233 701 934 3.1 (1.0) 1.9 Department stores 592 1 593 6.5 10.1 17.3 Leisure 511 4 515 7.1 2.0 7.1 Retail & Leisure3 4,603 2,954 7,557 6.0 2.0 7.5 West End 3,251

• 3,251

9.0 9.0 18.6 City 77 2,490 2,567 9.0 11.3 20.6 Provincial 3

• 3

6.5 12.2 18.7 All Offices 3,331 2,490 5,821 8.9 10.0 19.4 Residential4 220 39 259 4.9 2.8 7.4 All Offices & Residential3 3,551 2,529 6,080 8.7 9.7 18.8 Total 8,154 5,483 13,637 7.2 5.2 12.1 Standing Investments 7,558 5,007 12,565 6.6 4.9 11.1 Developments 596 476 1,072 12.8 9.8 25.9

Table shows UK total, excluding assets held in Europe. Total portfolio valuation including Europe of £13.7bn at year end, +12.1% valuation movement.

including developments (classified by end use), purchases and sales

67

Portfolio net yields1,2

Table shows UK total, excluding assets held in Europe. 1 Including notional purchaser’s costs 2 Excluding developments under construction and assets held for development 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)

At 31 March 2015 EPRA Net Initial Yield % EPRA Topped- Up Net Initial Yield %3 Overall Topped- Up Net Initial Yield%4 Net Equivalent Yield % Net Reversionary Yield %

Shopping parks 4.9 5.1 5.2 5.1 5.1 Shopping centres 4.6 4.9 4.9 5.1 5.1 Superstores 5.2 5.2 5.2 5.2 5.1 Department stores 4.1 4.1 6.1 4.5 3.8 Leisure 5.1 5.1 6.3 5.4 4.1 Retail & Leisure 4.8 5.0 5.2 5.2 4.9 West End 3.1 4.2 4.3 4.6 4.8 City 3.9 4.7 4.7 4.7 5.7 Offices 3.5 4.4 4.5 4.6 5.2 Total 4.3 4.8 4.9 4.9 5.0

68

Portfolio yield & ERV movements

Table shows UK total, excluding assets held in Europe.

As at 31 March 2015 ERV NEY ERV Growth %1 NEY Yield Compression2 bps £m % H1 H2 FY H1 H2 FY

Shopping parks 184 5.1 0.9 2.1 3.0 45 7 52 Shopping centres 125 5.1 0.3 1.8 2.1 38 13 48 Superstores 51 5.2 0.1 (0.1) (0.1) 12 (11) 3 Department stores 24 4.5 8.6 0.0 8.7 19 42 56 Leisure 23 5.4 0.7 0.3 1.1 57 21 86 Retail & Leisure 407 5.2 1.1 1.5 2.5 35 10 47 West End 145 4.6 2.6 3.6 6.3 21 24 46 City3 128 4.7 5.9 4.4 10.6 34 30 59 Offices 273 4.6 3.9 4.0 8.0 26 27 51 Total4 680 4.9 2.1 2.4 4.6 32 17 48

69

Lease length and occupancy1

At 31 March 2015 Average Lease Length (yrs) Occupancy Rate (%) To Expiry To Break Occupancy Occupancy (underlying)2 Shopping parks 8.9 7.9 97.4 98.2 Shopping centres 9.0 7.9 96.5 97.7 Superstores 14.8 14.5 100.0 100.0 Department stores 21.5 21.4 100.0 100.0 Leisure 18.9 18.8 100.0 100.0 Retail & Leisure 11.2 10.4 97.8 98.5 West End 10.6 8.6 98.0 98.7 City 9.4 7.5 93.3 97.4 Offices 10.1 8.1 95.8 98.1 Total 10.8 9.5 97.0 98.3

Table shows UK total, excluding assets held in Europe. 1 Excluding developments under construction and assets held for development 2 Including accommodation under offer or subject to asset management

70

Annualised rent & estimated rental value (ERV)1

At 31 March 2015 Annualised Rents (Valuation Basis) £m2 ERV £m Average Rent (£psf) Group JVs & Funds Total Total Contracted3, 4 ERV3

Shopping parks 114 62 176 184 25.4 25.6 Shopping centres 63 51 114 125 29.3 30.9 Superstores 13 38 51 51 21.4 21.2 Department stores 25

• 25

24 15.1 14.0 Leisure 27

• 27

23 14.8 11.9 Retail & Leisure 242 151 393 407 23.6 23.6 West End 94

• 94

145 50.6 55.3 City 4 84 88 128 48.8 55.5 Offices 98 84 182 273 49.6 55.3 Residential5 4

• 4

3

• Offices & Residential

102 84 186 276

• Total

344 235 579 683 28.1 30.0

Table shows UK total, excluding assets held in Europe.

less any ground rents payable under head leases, excludes contracted rent subject to rent free and future uplift

71

Rent subject to open market rent review1

Table shows UK total, excluding assets held in Europe.

At 31 March 2015 2016 2017 2018 2019 2020 2016-18 2016-20 For period to 31 March £m £m £m £m £m £m £m Shopping parks 19 17 26 27 18 62 107 Shopping centres 14 14 18 16 10 46 72 Superstores 15 5 4 9 15 24 48 Department stores Leisure

• 2

1

• 2

3 Retail & Leisure 48 36 50 53 43 134 230 West End 17 13 13 20 22 43 85 City 14 2 15 14 15 31 60 Offices 31 15 28 34 37 74 145 Total 79 51 78 87 80 208 375 Potential uplift at current ERV 4 1 1 2 1 6 9

72

Rent subject to lease break or expiry1

At 31 March 2015 2016 2017 2018 2019 2020 2016-18 2016-20 For period to 31 March £m £m £m £m £m £m £m Shopping parks 12 7 11 12 14 30 56 Shopping centres 10 9 9 6 9 28 43 Superstores 1

• 1

1 Department stores Leisure Retail & Leisure 23 16 20 18 23 59 100 West End 1 19

• 17

13 20 50 City 3 8 8 10 4 19 33 Offices2 4 27 8 27 17 39 83 Total 27 43 28 45 40 98 183 % of contracted rent 4.1% 6.5% 4.3% 6.8% 6.3% 15.0% 28.1% Potential uplift at current ERV 4 7

• 4

2 11 17

Table shows UK total, excluding assets held in Europe.

73

ERV resetting to market

At 31 March 2015 2016 2017 2018 2019 2020 2016-18 2016-20 For period to 31 March £m £m £m £m £m £m £m ERV expiring – existing portfolio1 30 50 29 50 44 109 203 Speculative developments – West End 2 14

• 16

16 Total Rent Resetting to Market 32 64 29 50 44 125 219 ERV of current vacancies2,3 20 20 Vacant & Income Expiring 145 239

74

Contracted rental increases (cash flow basis)

At 31 March 2015 2016 2017 2018 2019 2020 2016-18 2016-20 For period to 31 March

£m £m £m £m £m £m £m

Expiry of rent free periods 36 40 5 3

• 81

84 Fixed uplifts (EPRA basis)

• 1

1

• 1

2 Fixed & minimum uplifts in lieu of rental growth 1 3 4 2 1 8 11 Total 37 43 10 6 1 90 97

75

• 800
• 600
• 400
• 200

200 400 600 800 1000

Reshaping of our retail portfolio – buying and selling well

£m £286m £119m £31m £131m £29m Net Spend 2011 2012 2013 2014 2015

Drake Circus Virgin Active Portfolio Ealing B’way Eden walk Surrey Quays (50%) SouthGate Bath HUT units Superstore Equity Stake HUT units Tesco Swap

5 Superstores 5 Virgin Active gyms HIF 1 Shopping park 8 Superstores 6 Shopping parks 6 Superstores 2 shopping centres 28 Superstores 5 Shopping parks 1 Department store 1 Shopping centre 6.1% 7.3% 6.3% 5.7% 5.3% 5.8% 6.9% 5.6% 6.4% 5.4%

Acquisitions and Disposals & Development

Disposals Acquisitions & Development Net Spend

Note: Yields exclude development spend

76

Completed developments in period

At 31 March 2015 Sector BL Share Sq ft Current Value Cost to Complete ERV Let & Under Offer % ’000 £m £m1,2 £m3 £m The Leadenhall Building Offices 50 601 385 12 19.4 16.2 Broadgate Circle Offices 50 42 23 1 1.2 1.0 Old Market, Hereford Retail 100 305 92 4 4.9 4.8 Meadowhall Surrounding Land Retail 50 22 9

• 0.4

0.4 Fort Kinnaird, Edinburgh Retail 35 57 8 1 0.5 0.5 Deepdale, Preston Retail 35 64 6 1 0.4 0.4 Broughton Park, Chester Retail 69 54 11 1 0.7 0.7 Total Completed in Year 1,145 534 20 27.5 24.0

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

77

Under Construction development programme

At 31 March 2015 Sector BL Share Sq ft PC Calendar Current Value Cost to Complete ERV Let & Under Offer Resi End Value % ’000 Year £m £m1,2 £m3 £m £m4 5 Broadgate Offices 50 710 2015 399 23 19.2 19.2

• Yalding House

Offices 100 29 2015 21 6 1.6

• 4 Kingdom Street

Offices 100 147 2017 36 82 8.6

• Clarges Mayfair

Mixed Use 100 192 2017 310 170 5.9

• 464

Whiteley Leisure, Fareham Retail 50 58 2015 8 2 0.6 0.5

• Glasgow Fort, M&S & Retail

Terrace Retail 69 112 2015 19 10 1.8 0.9

• The Hempel Phase 15

Residential 100 25 2016 42 2

• 51

The Hempel Phase 2 Residential 100 40 2016 50 16

• 81

Aldgate Place, Phase 16 Residential 50 221 2016 24 47

• 80

Total Committed 1,534 909 358 37.7 20.6 676

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

Near-term and medium-term developments

At 31 March 2015 Sector BL Share Sq ft Start On Site Total Cost

Status % ’000 £m Near-term Pipeline 5 Kingdom Street1 Offices 100 240 2016 188 Consented 100 Liverpool Street Offices 50 517 2017 236 Consented5 Blossom Street, Shoreditch Mixed Use 100 347 2016 219 Submitted Glasgow Fort (Restaurants & Additional Retail Unit) Retail 69 42 2015 12 Consented Plymouth Leisure Retail 100 100 2016 36 Consented Speke Leisure Retail 61 66 2015 16 Submitted Aldgate Place, Phase 2 Residential 50 145 2016 56 Consented Crystal House, Ealing Broadway Residential 100 34 2016 18 Submitted Total Near-Term 1,491 781 Medium-term Pipeline Eden Walk Shopping Centre, Kingston Mixed Use 50 545 Pre-submission Canada Water Masterplan3 Mixed Use 100 5,500 Pre-submission 1 - 3 Finsbury Avenue4 Offices 50 460 Pre-submission Bradford, Forster Square Retail Park, Phase 3 Retail 100 60 Pre-submission Meadowhall Land Retail 50 350 Pre-submission Total Medium-Term 6,915

78

79

Residential development programme

At 31 March 2015 Sq Ft No. Market Units PC Date /Status BL Share Mar 15 Value1 Cost To come2 End Value Sales Exchanged & Completed ’000 % £m £m £m £m

Mixed-use Clarges Mayfair3 103 34 2017 100 228 137 464 259 Mixed use 103 34 228 137 464 259 Residential-led Bedford Street4 28 17 Completed 100 18

• 28

24 The Hempel Phase 1 25 15 2016 100 42 2 51 18 The Hempel Phase 2 40 19 2016 100 50 16 81

• Aldgate Place Phase 1

221 154 2016 50 24 47 80 38 Residential-led 314 205 134 65 240 80 Aldgate Place Phase 2 145 Consented 50 Crystal House, Ealing Broadway 34 Submitted 100 Near-Term prospective 179 Total Committed Residential 417 239 362 202 704 339

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

80

Estimated future development spend and capitalised interest

At 31 March 2015 PC Pre-let ERV Cost to complete £m (excluding notional interest)

• 6 mths

Calendar Year £m Sep-15 Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Total 5 Broadgate 2015 19.2 11 12 23 Yalding House 2015

• 6

6 4 Kingdom Street 2017

• 16

21 23 13 3 4 80 Clarges Mayfair 2017

• 51

38 36 27 10 3 165 Whiteley Leisure, Fareham 2015 0.5 2 2 Glasgow Fort, M&S & Retail Terrace 2015 0.9 10 10 The Hempel Phase 1 2016

• 1

1 2 The Hempel Phase 2 2016

• 11

3 1 1 16 Aldgate Place, Phase 1 2016

• 13

13 13 4 1 44 Total 20.6 121 88 73 45 14 7 348 Total Near-Term 13 46 48 92 107 106 412 Indicative Interest Capitalised on above at attributable rates1 7 6 8 11 8 8 48

81

Estimated future development rental income (accounting basis)

At 31 March 2015 PC Gross Rental Income (Accounting basis) £m – 12 mths Calendar Year Mar-16 Mar-17 Mar-18 Mar-19 Mar-20

Onsite developments 5 Broadgate 2015 Contracted 12 18 18 18 18 Yalding House 2015 Non-contracted

• 1

2 2 2 Clarges Estate 2017 Non-contracted

• 3

5 5 4 Kingdom Street 2017 Non-contracted

• 7

7 Total Offices Contracted 12 18 18 18 18 Non-contracted

• 1

5 14 14 Other Retail Developments Contracted 1 1 1 1 1 Non-contracted 1 1 1 1 1 Total Retail Contracted 1 1 1 1 1 Non-contracted 1 1 1 1 1 Recently completed developments (letting of vacant space) Marble Arch House 2013 Non-contracted 1 1 1 1 1 The Leadenhall Building 2014 Non-contracted 3 6 6 6 6 Broadgate Circle 2015 Non-contracted

• Total Recently Completed

Non-contracted 4 7 7 7 7

Property Yields and interest rate yield gap

• 1.0

1.0 3.0

1990 1997 1999 2003 2005 2008 2010 2014

Source: IPD/Bloomberg Source: IPD

Gap as multiple of gilt yield 2.0 4.0 6.0 8.0 10.0 All Retail Central London Offices

Retail and London Office Yields Property Yield vs 10 Year Gilt Yields

NIY %

82

83

0.0 2.0 4.0 6.0 8.0 10.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Central London pipeline

m sq ft

Q1 2015

Completed Pipeline Pre-let Potential Speculative U/C Pre-let U/C - Speculative 10 year average new/refurb take-up 10 year average dev completions Source: Knight Frank

84

West End development pipeline

m sq ft

Q1 2015

Completed Pipeline Pre-let Pipeline Speculative U/C Pre-let U/C - Speculative 10 year average new/refurb take-up 10 year average dev completions

0.0 0.5 1.0 1.5 2.0 2.5

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Source: Knight Frank

85

City development pipeline

m sq ft

Q1 2015

Source: Knight Frank Completed Pipeline Pre-let Pipeline Speculative U/C Pre-let U/C - Speculative 10 year average new/refurb take-up 10 year average dev completions

0.0 1.0 2.0 3.0 4.0 5.0 6.0

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

86

2 4 6 8 10 12 14 16 18

1985 1990 1995 2000 2005 2010 2015

Vacancy Central London

West End & City Vacancy Rates

West End Void Rate (Period end) Pipeline Pre-let

Source: CBRE

%

87

London office market rental outlook

Prime London Office Rents 2008 2013 2012 2014 2019 2018 2017 2016 2015 1996 1995 1994 1993 1999 1998 1997 2007 2006 2005 2010 2009 2011 2004 2003 1992 1991 1990 2002 2001 2000

Rental Growth Driven by Imbalance Between Supply and Demand

£ psf

Source: CBRE (historic) and Average Agents’ Consensus (including PMA) for forecasts

Actual Forecast

20 40 60 80 100 120 140

West End City

88

Regent’s Place Campus

89

Paddington Central Campus

3 2 1 Development sites (355,000 sq ft) + Crossrail box below (80,000 sq ft) Multi-let offices 267,000 sq ft Multi-let offices 143,000 sq ft 200 residential units sold on long leases; retail at ground floor New Hammersmith & City Line station and access to Crossrail 88,000 sq ft retail (16 units) around Sheldon Square Offices 196,000 sq ft Non British Land ownership 206 room 4 star hotel (111,000 sq ft) 6 5 4 9 8 7 1 2 3 4 5 6 7 8 9

Broadgate Campus

2 3 1 6 5 4 9 8 7 12 11 10 15 14 13 18 17 16 19 1 Finsbury Avenue 2 Finsbury Avenue 3 Finsbury Avenue 1&2 Broadgate 3 Broadgate 100 Liverpool Street 8-12 Broadgate The Broadgate Circle 5 Broadgate Under Construction 135 Bishopsgate 155 Bishopsgate 175 Bishopsgate 199 Bishopsgate 201 Bishopsgate The Broadgate Tower Broadwalk House Exchange House 10 Exchange Square 1 Appold Street 3 2 1 6 5 4 9 8 7 12 11 10 15 14 13 18 17 16 19 90

Blossom Street, Shoreditch

Broadgate Blossom St, Shoreditch

92

Disclaimer

The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the period ended 31 March 2015. 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 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 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 out 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

• ther 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.