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

Results Presentation Full Year ended 31 March 2015 www.britishland.com @britishlandplc

Results Overview Chris Grigg Chief Executive

Highlights Another strong set of results Continued outperformance Exceptional leasing activity Ongoing portfolio repositioning 3

Macro trends driving our strategy Transforming impact Population growth of technology and urbanisation Importance of Globalisation infrastructure Sustainability 4

Focused investment activity 1 Creating great Leveraging our placemaking skills to create Places People environments Prefer Exciting and lifestyle oriented real estate Growing in 2 Investing in existing assets London and Focusing on regeneration and growth areas the South East Investing around 3 Accessible and well-connected properties infrastructure Over £3bn of our assets are near Crossrail stations Internet resilient 4 Well located, locally preferred, multi-let assets retail Engaging environments with a broad F&B offering Omni-channel compatible Profitable 5 Mixed-use developments development Replenishing the medium term pipeline Understanding 6 Providing spaces and services which meet their needs our customers 5

2015 financial highlights 48 % 2-year total accounting return 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% 6

Strong valuation performance 12 % Increase in valuation • Valuation well ahead in both sectors Contribution to valuation uplift – +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 Yield Movement Development Asset Management 7

Exceptional leasing performance 10 % Investment lettings/ • Strong leasing volumes renewals vs ERV • 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% 8

Broadly balanced investment activity £2.4 bn Investment Activity Gross investment activity in 2015 Net Spend £m £343m £395m (£19m) £626m (£105m) 1,200 800 400 0 -400 -800 -1,200 2011 2012 2013 2014 2015 -1,600 Disposals Acquisitions & Development Net Spend 9

Investing in line with strategy 3 1 Increasing investment Selling mature retail assets in London and South East £245m • Now 64% of total portfolio 64% • £245m sold in addition to superstore disposals • £210m acquisition of One Sheldon Square 4 • On site at 4 Kingdom Street Pre-selling residential apartments 2 Reducing investment in £370m • £370m of residential sales standalone superstores • Includes £259m at Clarges Mayfair 28 • 28 foodstores sold 5 7% • Now under 7% of portfolio Increasing medium term • c60% in London and South development pipeline 7m sq ft • 7m sq ft focused on London, including Canada Water 10

Retail & Leisure highlights Improving rental growth Continued strength of operating metrics Ongoing evolution of the portfolio Strong uplift in valuation and total returns 11

Improved Retail & Leisure 90 bps valuation performance Outperformance vs All Retail Total Returns FY valuation change % -1.5% 4.4% 7.5% 8 6 4 2 0 -2 FY 2013 FY 2014 FY 2015 H1 Valuation change H2 Valuation change ERV Growth

Good demand from high quality occupiers 8.7 % Lettings and renewals by sector by rent Letting/renewals 16.6% ahead of ERV 43.3% 13.8% 1.1 m sq ft 5.1% 4.6% 3.9% 12.7% Fashion & Footwear Electrical & Mobile Phone General Retail Food & Leisure DIY Health & Beauty Other

British Land operational metrics remain strong Retailer same store sales Average dwell time Average LFL spend + 4.5 % + 16 % annualised + 3.7 % Source: Springboard Source: BL consumer surveys Source: BL consumer surveys Footfall + 1.9 % +5% Occupancy remaining affluent high at 98.5 % ahead of market by shopper visits 290 bps Source: BL consumer surveys, CACI Source: Springboard and Experian Source: BL 14

Continuing to outperform +290 bps footfall benchmarks Outperformance BL footfall performance vs Experian benchmark in 2015 Sep 09 = 100 110 105 100 95 90 UK Market (Experian Index) British Land 85 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 15

Strengthening rental growth trend 2.5 % Rental growth British Land Retail rental growth vs IPD in 2014/15 % 3.0 2.5 2.0 1.5 1.0 0.5 0.0 H1 2013/14 H2 2013/14 H1 2014/15 H2 2014/15 FY 2013/14 FY 2014/15 -0.5 British Land IPD 16

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 17

Investment driving performance – Ealing Broadway 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 340,000 sq ft Growing and 19m annual Next to affluent area footfall Crossrail station Shopping centre 18

Continuing to evolve our retail portfolio 28 superstores: £475m; 4.8% NIY £245m mature assets; 6.2% NIY £720m disposals Surrey Quays leisure park (£135m) £445m increasing share of existing assets; 5.3% NIY £749m acquisitions £169m invested in HUT portfolio 5.6% NIY Completed 305,000 sq ft Old Market, Hereford £95m Extensions to 4 retail schemes development/capex Refurbishment at Ealing Broadway Upgrade to premium offer at Meadowhall Improvements to landscaping and amenities 19

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 20

Strong Office & Residential performance 8.0 % • Outperformed IPD capital returns by 440 bps ERV growth in 2015 FY valuation change % 5.0% 14.5% 18.8% 20 16 12 8 4 0 FY 2013 FY 2014 FY 2015 H1 Valuation change H2 Valuation change ERV Growth 21

Exceptional Office leasing in 10.8 % strong markets Lettings/renewals • 960,000 sq ft of lettings/renewals ahead of ERV completed/under offer • Terms well ahead of valuation: 21% 16% 10.8% ahead of ERV • Occupancy at 98.1% (+730 bps 10% like-for-like) • Diverse range of lettings 8% – 175,000 sq ft tech/flexible 38% 3% working 4% – 86,000 sq ft food and leisure Banks & Financial Services Food & Leisure TMT Insurance Government Other Business/Professional Services 22

Leasing strategy success at Leadenhall £90 psf 45 44 43 42 41 40 Rental high 39 38 • 84% let/under offer up from 53% 37 36 a year ago 35 34 33 32 • Diverse mix of occupiers 31 30 29 • Beating records for City rents 28 27 4 times over 26 25 24 • Most recent letting at £90psf 23 22 21 to Affinity Shipping 20 19 18 • Valuation +37% in the year 17 16 15 14 Let prior to 2014/15 13 12 11 Let in 2014/15 10 9 8 Under offer 7 6 5 4 In negotiations 3 Reception and Restaurants 2 1

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 24

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 25

Facebook at Regent’s Place – a strong endorsement of 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 26