FULL YEAR RESULTS PRESENTATION

Transcription

1 FULL YEAR RESULTS PRESENTATION FULL YEAR ENDED 31 MARCH 2014 #BLFY2014

2 RESULTS OVERVIEW Chris Grigg Chief Executive 2

3 INTRODUCTION Strong full year results Our decisions and actions continue to drive performance Strengthening markets In 2010 we set out a clear plan Substantial net investors in the market Take on more risk, mainly through development Increase exposure to London and South East Continued to execute well against that plan Delivering 2010 development programme Replenishing development pipeline Investing in attractive assets Improving operating metrics 3

4 PERFORMANCE HIGHLIGHTS FY to 31 March 2014 % Change NAV per Share 688p +15.4% UK Valuation 12.0bn +8.3% Total Property Return 14.2% Underlying Profit Before Tax 297m +8.4% Dividend per Share 27.0p +2.3% Total Accounting Return 20.0% 4

5 MATERIAL IMPROVEMENT IN VALUATIONS Valuation Drivers m TOTAL VALUATION MOVEMENT 22m 90m 309m H1 2012/13 H2 2012/13 H1 2013/14 639m H2 2013/14 Asset Management Development Yield Movement Total Valuation 5

6 STRONG OPERATIONAL PERFORMANCE Continue to sign lettings/renewals ahead of ERV Leasing activity added 24 million of new annual rent FY to 31 March 2014 Retail Office Total Lettings and renewals (000 sq ft) 1, ,306 Investment lettings/renewals vs ERV +4.9% +8.4% +6.3% Occupancy 98.5% 92.1% 96.1% LFL occupancy +100bps +190bps +130bps 6

7 EXECUTING SMARTLY AHEAD OF PLAN 1 Timely Investment Gross investment of 1.3bn focused on London and South East Placing proceeds invested ahead of plan; accretive to EPS and NAV 2 Profitable development Completed 5 of our 2010 London developments on schedule; total estimated profits of 636m Replenished development pipeline 1.1m sq ft of new development potential: recently committed/near-term pipeline now 2.0m sq ft 3 Reshaping Retail portfolio Sale of 391m mature UK retail assets ahead of valuation Invested in high quality preferred retail destinations 40% of retail portfolio turned over in last four years 7

8 KEY RETAIL AND LEISURE HIGHLIGHTS Continued improvement in our retail returns Total returns of 10.7%; further improvement in second half Strength of operational metrics Occupancy ahead; continued outperformance on rental growth and footfall Successful developments Whiteley and Glasgow Fort Trading ahead of expectations Continued recycling to reshape our retail portfolio 953m gross investment activity in the year (acquisitions, disposals, development) 8

9 STRONGER RETAIL AND LEISURE PERFORMANCE Annual total returns of 10.7%; capital returns 4.6% Retail Valuation Drivers m TOTAL VALUATION MOVEMENT (63)m (35)m 96m 205m H1 2012/13 H2 2012/13 H1 2013/14 H2 2013/14 Asset Management & Development Yield Movement Total Valuation 9

10 STRONG RETAIL ASSET MANAGEMENT Increased Retail Lettings/Renewals Retail Leasing by Category Sq ft 000s 290 By rent GENERAL RETAIL 106 1,384 1,005 FY 2012/13 FY 2013/14 FASHION 34% OTHER 9% 16% 12% 13% 16% SUPERSTORES FOOD, BEVERAGE & LEISURE HOMEWARES Development Investment 10

11 BROADER AND HIGHER QUALITY OCCUPIER DEMAND Leveraging existing strong retailer relationships Retailers taking out of town stores Increasing restaurant and leisure offer Significant demand from home improvement operators 11

12 CONSISTENTLY OUTPERFORMING ON FOOTFALL BL footfall flat over full year; improved over H2 +1.2% (outperforming market by 320 bps) British Land Footfall compared to Experian Market Benchmark Index Jan 2010 = % pa - -3% pa British Land UK Market Source: Experian 12 12

13 CONSISTENTLY OUTPERFORMING ON RENTAL GROWTH 1.5% ERV growth in the year, outperforming the market by 150 bps British Land Retail Rental Growth vs GDP Index 2001 = Mar 01 Mar 02 Mar 03 Mar 04 Mar 05 Mar 06 Mar 07 Mar 08 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 BL Retail IPD Secondary Retail GDP 13 13

14 UPGRADING OUR RETAIL PORTFOLIO THROUGH DEVELOPMENT GLASGOW FORT LEISURE EXTENSION 46,000 sq ft cinema and restaurant extension Opened September 2013 Annual footfall up 8% to 12m Average peak dwell time up to 102 mins Catering spend increased more than 50% Average peak retail spend increased to 124 Further 112,000 sq ft retail led extension now on site including an 80,000 sq ft M&S anchor store 14

15 UPGRADING OUR RETAIL PORTFOLIO THROUGH DEVELOPMENT WHITELEY SHOPPING New 321,000 sq ft shopping destination Over 20% valuation uplift Annual footfall of 4.7m On Estimated annual sales of 90m; 5.8m annual rent roll On site with Phase II 58,000 sq ft cinema and restaurant extension. Increases food & leisure offer to 25% Voted Best mid-sized shopping centre development in Europe by ICSC 15

16 RESHAPING OUR RETAIL PORTFOLIO SELLING MORE MATURE ASSETS Taking advantage of market strength to sell more mature assets Further 150m currently under offer/on the market UK Retail asset sales since 1 April 2013 No of Assets Sale Price Retail Parks 8 167m Foodstores 6 30m Shopping Centres 2 183m High Street 1 11m Total m 16

17 RESHAPING OUR RETAIL PORTFOLIO RE-INVESTING IN PREFERRED DESTINATIONS 502m of acquisitions Well-located, high quality destinations SouthGate, Bath on a fully let NIY of 5.7% Increased share in HUT to 60% on an effective NIY of 6% 26% equity share in portfolio of Sainsbury s superstores Reversionary yield of 5.7% Already made a return of over 10% 17

18 KEY OFFICE AND RESIDENTIAL HIGHLIGHTS Successful completion of all our 2010 West End developments Including 505,000 sq ft at Regent s Place Well timed acquisitions of Paddington and Shoreditch Third major London campus at Paddington Adds significant development potential Achieved important milestones at Clarges Obtained planning for an improved scheme; now on-site Progressing our long-term vision at Broadgate New JV partnership with GIC Crossrail a game changer Broadgate Circle 18

19 STRONG OFFICE AND RESIDENTIAL PERFORMANCE Annual total returns of 19.4%; capital returns 15.5% Valuation Drivers m TOTAL VALUATION MOVEMENT 85m 125m 213m 434m H1 2012/13 H2 2012/13 H1 2013/14 H2 2013/14 Asset Management Development Yield Movement Total Valuation 19

20 DEMAND FROM A BROADER RANGE OF OCCUPIERS 632,000 sq ft of leasing activity Investment lettings/renewals 8.4% ahead of ERV Strong demand from TMT and insurance Increasing interest from financial services - hedge fund and wealth management Office Leasing Activity by Category By rent TMT INSURANCE 36% 15% 9% 18% 16% 6% BANKING & FINANCE OIL & GAS BUSINESS & PROFESSIONAL OTHER 20

21 LEASING ACTIVITY ACROSS OUR OFFICE PORTFOLIO Strengthening letting interest in recent months Over 150,000 sq ft leasing activity completed/under offer since year end including at Leadenhall and 10 Portman Square First letting at Marble Arch House; psf for a 10 year term Office Leasing Activity FY to 31 March sq ft Completed/under offer since March Sq ft Broadgate 225,190 79,350 Leadenhall 106,920 13,600 Regent s Place 196,480 16,320 Portman Village 18,300 34,750 Paddington Central 30,210 4,600 Other 54,900 3,810 Total 632, ,430 21

22 REGENT S PLACE GREAT LETTING SUCCESS 15.5% valuation uplift in year Nearly 200,000 sq ft of lettings Increased occupancy to 98.3% New rental high of 71 psf Standing investment ERVs up 11.8% over last 3 years Increasingly reversionary with average office rent of 46 psf Further refurbishment opportunities 22

23 PADDINGTON GREAT PROGRESS Campus already increased in value by 11.1% Almost 40% of vacant space let/under offer at rents ahead of ERV Average office rent of 50 psf attractively priced Significant opportunities to develop as major West End campus Transfer our experience from Regent s Place 23

24 HIGHLY PROFITABLE 2010 LONDON DEVELOPMENT PROGRAMME 294m of additional profit generated in year; 45m to come 73% let/under offer securing 54m pa of rent, 96% residential units sold/under offer m 257m Mar 11 Mar 12 Mar 13 Mar 14 Profit Taken Profit to Come 359m 423m m

25 PROGRESSING OUR NEW LONDON DEVELOPMENTS Added 1.1m sq ft of new potential development Expect to commit to 4 Kingdom Street later this year Progressing 5 Kingdom Street and Shoreditch plans; retain optionality Estimated profit of c 375m; of which c 290m to come CLARGES ESTATE THE HEMPEL ALDGATE PHASE 1 YALDING HOUSE 4 KINGDOM STREET SHOREDITCH ESTATE 5 KINGDOM STREET RECENTLY COMMITTED 555,000 sq ft NEAR-TERM PIPELINE 708,000 sq ft 25

26 BROADGATE IMPLEMENTING OUR LONG-TERM VISION New long-term JV partner with GIC Evolving campus to broaden occupiers and uses Access enhanced by Crossrail in 2018 Development of 5 Broadgate and Broadgate Circle completing shortly Broadgate Circle creates a new food destination for the City Next opportunity will be at 100 Liverpool Street Corporate Legal 26

27 FINANCIAL REVIEW Lucinda Bell Finance Director 27

28 HIGHLIGHTS FY to 31 March Change Underlying Profit before Tax ( m) % Underlying Earnings per Share (p) (3.0)% Dividend per Share (p) % Valuation Performance 1.0% 8.3% EPRA Net Asset Value per Share (p) % Total Accounting Return 4.6% 20.0% 28

29 DELIVERING ON STRATEGIC OBJECTIVES Offices & Residential m Retail m Total m Placing investments Developments , Recently Committed & Replenishing Pipeline Retail Recycling*: Acquisitions Disposals (391) (391) Europe Retail (147) (147) Net investments *Sainsbury s portfolio at NAV, HUT at GAV 29

30 UNDERLYING PROFIT BRIDGE m (18) (3) FY 2013 Placing Investments PC of 2010 Developments Like for Like Prior Year Disposals Other FY

31 NET RENTAL INCOME MOVEMENT m (26) (3) 541 UK Like Like for like for like UK Retail 3.0% Offices 0.4% Total 2.2% 562 FY 2013 Placing Investments PC of 2010 Developments Like for Like Retail Recycling Prior Year Disposals Other FY

32 FINANCING COSTS m 8 (1) (5) 2 (206) (202) FY 2013 Equity Placing PC of 2010 Developments Prior Year Disposals Other FY

33 INCOME STATEMENT FY to 31 March Change Net Rental Income ( m) % Fees & Other Income ( m) Administrative Expenses ( m) (76) (78) Net Finance Costs ( m) (206) (202) Underlying PBT ( m) % Operating cost ratio 15.3% 16.2% 33

34 STRONG VALUATION PERFORMANCE FY to March 2014 Valuation bn FY Uplift % ERV Growth % NEY % Weighting % Retail Offices & Residential Of which Offices Total Of which Standing Investments Of which Development

35 VALUATION GROWTH DRIVERS RETAIL & LEISURE FY to March 2014 Uplift % ERV Growth % Yield Compression (bps) Valuation bn H1 H2 FY H1 H2 FY H1 H2 FY Retail parks Superstores Shopping centres Department stores Leisure Retail

36 VALUATION GROWTH DRIVERS OFFICES & RESIDENTIAL FY to March 2014 Uplift % ERV Growth % Yield Compression (bps) Valuation bn H1 H2 FY H1 H2 FY H1 H2 FY City West End Provincial Offices Residential Offices & Residential

37 GROWTH IN EPRA NET ASSET VALUE NAV (p) 29p 27p 36p 29p (27p) (2p) 688p 596p Mar 13 Developments Offices Retail Underlying Profit Dividends Other Mar 14 37

38 DEBT FINANCING DIVERSE FUNDING PROFILE 1.5bn of new financing arranged Diverse Debt Profile (31 March 2014) 785m revolving credit facility with maturity of 5 years and an initial margin of 115bps 1.9bn of undrawn facilities for more than 2 years No BL financing required for 4 years 1.6bn 0.9bn 0.6bn 1.0bn 0.7bn 0.4bn Unsecured bank debt Debentures & Loan Notes US Private Placements Convertible Bonds JV & funds secured debt Securitisations 38

39 STRENGTH OF DEBT METRICS Proportionally Consolidated 31 Mar Mar 2014 Loan to Value (LTV) 40% 40% Average Interest Rate 4.6% 4.1% Interest Cover 2.3x 2.5x Average Maturity of Drawn Debt (years) Group 31 Mar Mar 2014 Loan to Value (LTV) 24% 29% Average Interest Rate 4.4% 3.5% Interest Cover 2.8x 3.2x 39

40 DEVELOPMENT PROGRAMME RISK MANAGEMENT Current development commitment of 1.4bn Residential commitment below 500m limit, as previously set Development commitment limits: 15% of investment portfolio 10% on a speculative basis Capacity to further replenish pipeline as 2010 developments complete Development Commitment m 1,400 1,200 1, Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 Near Term Recently Committed 2010 Committed Developments 40

41 FUTURE INCOME GROWTH Annualised Gross Rents Cash Flow Basis m Current Passing Rent 557 Expiry of Rent-free Periods 51 Fixed, Minimum Uplifts 13 Accounting Basis m 2010 Non-Completed Developments Pre-let Recently Committed Developments Pre-let 7 5 Total Contracted Developments 2010 Committed Developments to let Developments Recently Committed 11 9 Developments Near-term to let Investments RPI and rent review uplifts Investments Letting of Expiries and Vacancies Potential Rent in 5 Years Increase 36% 20%

42 OUTLOOK Chris Grigg Chief Executive 42

43 RESHAPING OUR UK PORTFOLIO TO DELIVER LONG-TERM PERFORMANCE Development 10 Portman Square 5 Broadgate The Leadenhall Building Clarges Mayfair The Hempel 4&5 Kingdom St Marble Arch House Brock Street 199 Bishopsgate Whiteley Shopping Shoreditch Acquisitions Drake Circus Virgin Active HUT units Paddington Central SouthGate, Bath Ealing Broadway SC Eden Walk, Kingston Investments & Disposals over last 4 yrs 3.0bn Development Acquisitions 1.6bn INVESTMENTS DISPOSALS Disposals Ropemaker Place Residential units 18 Food stores 17 Retail Parks including Beehive Centre, St James Dumbarton 2 shopping centres (Bon Accord, Aberdeen and Eastgate, Basildon) 9 leisure assets 43

44 REPOSITIONING PORTFOLIO AROUND KEY TRENDS Attractive environments London as a leading global City Importance of transport infrastructure Key role of high quality physical retail Profitable development Focused on creating Places People Prefer Well managed environments at our Office campuses and Retail destinations Committed more capital to London and South East: increased weighting to over 60% of our portfolio Increased exposure to West End and up and coming locations Investment around transport hubs Over 3.0bn of our properties close to Crossrail stations Reshaping our Retail portfolio to focus on best retail locations 2.3bn of gross UK investment activity A fundamental driver of value 2010 programme a real success Great progress replenishing pipeline; retain optionality 44

45 MARKET OUTLOOK UK at early stages of an economic recovery Differential between property bond yields historically wide Positive about long-term prospects for London Occupational demand picking up and supply remains constrained Performance to be driven primarily by rental growth Prime residential pricing slowing but long-term dynamics good Retail at an earlier stage in the cycle Less yield compression; increased investor interest Retailers increasingly confident about consumer spending and role of physical space Retailers looking to take more space, but only in best locations More positive on rental growth outlook on our schemes 45

46 OUR PRIORITIES Focused on driving rental growth Progressing our new development programme Continue to reshape our Retail portfolio More balanced on acquisitions and disposals 46

47 SUMMARY 47

48 APPENDICES 48

49 BL UK PROPERTY RETURNS VS IPD 1 YEAR Year ended 31 March 2014 bps Retail Offices Total 60 Capital Returns Total Returns 49

50 BL UK PROPERTY RETURNS VS IPD 3 YEARS 3 years ended 31 March 2014 bps pa Retail Offices Total 190 Capital Returns Total Returns 50

51 EPRA NET DEBT PROPORTIONALLY CONSOLIDATED bn LTV 40% LTV 40% 2.1bn Available Facilities bn Available Facilities (0.6) (0.3) Mar 13 Net Debt Acquisitions Disposals Development & Capex Operating Cashflow Dividends Mar 14 Net Debt 51

52 RECONCILIATION OF UNDERLYING PROFIT BEFORE TAX 12 months to 31 March ( m) IFRS Profit before tax 260 1,110 Net valuation movement (includes disposals) (26) (873) Deferred and current taxation of joint ventures & funds (3) 5 Amortisation of intangible assets 1 - Capital financing costs Non-recurring items 7 - Less non-controlling interest - (2) Underlying Profit Before Tax EPRA adjustments (5) - EPRA Earnings Before Tax

53 GROSS RENTAL INCOME 1 SECTORAL (Accounting Basis) m Table shows UK total, excluding assets held in Europe 1 Gross rental income will differ from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives 2 Stand-alone residential 12 months to 31 March 2014 Total Annualised as at 31 March 2014 Total Retail parks Superstores Shopping centres Department stores Leisure Retail City West End Provincial 6 6 All Offices Residential All Offices & Residential Total

54 OPERATING COSTS METRIC 12 mths to 31 March ( m) Property outgoings Administrative expenses Share of joint ventures and funds expenses Less: Performance & management fees (from joint ventures & funds) (10) (10) Other fees and commission (5) (5) Ground rent costs (1) (2) EPRA Costs (including direct vacancy costs) (A) Direct vacancy costs (14) (13) EPRA Costs (excluding direct vacancy costs) (B) Gross Rental Income less ground rent costs Share of joint ventures and funds (GRI less ground rent costs) Total Gross Rental Income inc. share of joint ventures and funds (C) EPRA Cost Ratio (including direct vacancy costs) (A/C) 15.3% 16.2% EPRA Cost Ratio (excluding direct vacancy costs) (B/C) 12.8% 13.9% 54

55 RECONCILIATION OF EPRA NAV & NNNAV As at 31 Mar Mar 14 m Pence m Pence Balance Sheet (IFRS) Net Assets 5, , Deferred tax arising on revaluation movements 14 6 Mark to market on effective cash flow hedges and related debt adjustments Adjust to fully diluted on exercise of share options Surplus on trading properties Less non-controlling interests - (371) EPRA NAV 5, , Deferred tax arising on revaluation movements (14) (6) Mark to market of debt and derivatives (431) (321) EPRA NNNAV 5, ,

56 EPRA BALANCE SHEET (PROPORTIONAL CONSOLIDATION) m Mar 13 Group JVs & Funds Mar 14 Total properties 10,499 7,194 4,846 12,040 Net debt (4,266) (2,877) (2,013) (4,890) Other net assets (liabilities) (4) 76 (199) (123) EPRA Net Assets 6,229 4,393 2,634 7,027 Loan to Value (LTV) 1 40% 29% 40% Average interest rate 4.6% 3.5% 4.1% Interest cover 2.3x 3.2x 2.5x Average maturity of drawn debt (years) Group LTV based on Group Properties and net investment in JV & Funds, and Group net debt 56

57 DEBT MATURITY GROUP m 1,200 1, Year to 31 March BL Undrawn Facilities BL Drawn Facilities Convertible Bonds Private Placements Debentures & Loan Notes British Land facilities proforma for the new 785m revolving credit facility 57

58 DEBT MATURITY JOINT VENTURES AND FUNDS 1 m 1,200 1, Year to 31 March JV Bank drawn Funds Bank drawn JV & Funds Bank undrawn JV - Securitisations 1 At British Land share 58

59 GROSS AND NET DEBT RECONCILIATION As at 31 March 2014 m Gross Debt (principal value) 5,198 IFRS adjustments: Issue costs and premia (15) Fair value hedges 62 Other Items 39 Gross debt (IFRS basis) 5,284 Market value of derivatives 103 Cash & liquid investments (325) Net debt (IFRS basis) 5,062 EPRA adjustments: Remove market value of derivatives (103) Remove fair value hedges (62) Other EPRA adjustments (7) Net debt (EPRA basis) 4,890 59

60 INVESTMENT ACTIVITY RECONCILIATION Office/Resi Retail Total Net investments per Delivering on Strategic Objectives Slide Placing investment completed in FY13 (40) (226) (266) Development capex (167) (60) (227) Residential sales (142) - (142) Other net investment (29) - (29) Net acquisitions/disposals - Press Release 359 (36)

61 INVESTMENT ACTIVITY Net Spend m FY14 Net Rent m Annualised Net Rent m Placing investments Retail Recycling 1 : Acquisitions Disposals (391) (7) (26) Europe Retail (147) (3) (9) Net investments Including HUT units at GAV and interest in Superstore Portfolio 61

62 NUMBER OF SHARES Number of shares (m) Mar 13 Mar 14 Basic Weighted Average Period End 986 1,008 Diluted Weighted Average 901 1,004 Period End 1,001 1,021 62

63 MAJOR PROPERTY HOLDINGS As at 31 March 2014 (excl. developments under construction) BL Share % Sq ft 000 s Rent Occupancy m pa 1 Rate % 2 Lease Length yrs 3 1 Broadgate, London EC2 50 3, Regent's Place, London NW , Meadowhall Shopping Centre, Sheffield 50 1, Sainsbury's Superstores 52 2, Tesco Superstores 51 2, Paddington Central Teesside Shopping Park, Stockton-on-Tees Drake Circus Shopping Centre, Plymouth Debenhams, Oxford Street Portman Square, W Annualised contracted rent including 100% of Joint Ventures & Funds 2 Includes accommodation under offer or subject to asset management 3 Weighted average to first break 4 Development reached practical completion in April

64 TOP 20 CUSTOMERS & CUSTOMER SPLIT BY INDUSTRY As at 31 March 2014 % of Total Contracted Rent Tesco plc 7.7 Sainsbury Group 6.0 Debenhams 5.8 UBS AG 3.2 Home Retail Group 2.7 Kingfisher (B&Q) 2.7 HM Government 2.5 Next plc 2.4 Virgin Active 2.0 Arcadia Group 2.0 Spirit Group 1.6 Alliance Boots 1.6 Herbert Smith 1.4 DSG International 1.3 Marks & Spencer Plc 1.3 Royal Bank of Scotland Plc 1.2 Hutchison Whampoa 1.1 Aegis Group 1.1 House of Fraser 1.0 New Look 1.0 Customer Split by Industry Contracted Rent (%) 13% General Retail Supermarket 8% 14% 7% Professional & Corporate DIY Other Business 2% 1% 16% 20% 19% Fashion & Beauty Banks & Financial services Food / Leisure Government 64

65 PORTFOLIO WEIGHTING As at 31 March 2013 % 2014 (Current) % 2014 (Current) m 2014 (Pro forma)¹ Retail parks , Superstores , Shopping centres , Department stores Leisure Retail , City , West End , Provincial All Offices , Residential All Offices & Residential , Total , Table shows UK total, excluding assets held in Europe 1 Pro forma for developments at estimated end value (as determined by the Group s external valuers) 2 Stand-alone residential 65

66 PORTFOLIO VALUATION BY SECTOR Total 1 Change % 2 As at 31 March 2014 m H1 H2 FY Retail parks 2, Superstores 1, Shopping centres 1, Department stores Leisure Retail 3 6, City 2, West End 2, Provincial All Offices 3 4, Residential All Offices & Residential 5, Total 11, Standing Investments 10, % 4.4% 6.6% Developments 1, % 16.9% 20.9% Table shows UK total, excluding assets held in Europe. Total portfolio valuation including Europe of 12.0bn at year end, +8.0% valuation movement 1 Including Group s share of properties in joint ventures and funds 2 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 3 Including committed developments 4 66 Stand-alone residential

67 PORTFOLIO NET YIELDS 1 As at 31 March 2014 (excl. developments) EPRA Net Initial Yield % EPRA Topped- Up Net Initial Yield % 2 Overall Topped- Up Net Initial Yield% 3 Net Reversionary Yield % Net Equivalent Yield % Retail parks Superstores Shopping centres Department stores Leisure Retail City West End Provincial All Offices Total Table shows UK total, excluding assets held in Europe 1 Including notional purchaser's costs 2 Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of rental growth 3 Including fixed/minimum uplifts (excluded from EPRA definition) 67

68 LEASE LENGTH AND OCCUPANCY As at 31 March 2014 (excl. developments) Average Lease Length (yrs) Occupancy Rate (%) To Expiry To Break Occupancy Occupancy (underlying) 1 Retail parks Superstores Shopping centres Department stores Leisure Retail City West End Provincial All Offices Total Table shows UK total, excluding assets held in Europe 1 Including accommodation under offer or subject to asset management 68

69 ANNUALISED RENT & ESTIMATED RENTAL VALUE (ERV) As at 31 March 2014 (excl. Developments) Annualised Rents (Valuation Basis) m 1 ERV m Average Rent ( psf) 2 Total Total Contracted ERV Retail parks Superstores Shopping centres Department stores Leisure Retail City West End Provincial All Offices Residential All Offices & Residential Total Table shows UK total, excluding assets held in Europe 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 Office average rent psf is based on office space only 3 Stand-alone residential

70 RENT SUBJECT TO OPEN MARKET RENT REVIEW 12 months to 31 March ( m) Retail parks Superstores Shopping centres Department stores Leisure Retail City West End Provincial Offices Total Potential Uplift at Current ERV Table shows UK total, excluding assets held in Europe 70

71 RENT SUBJECT TO LEASE BREAK OR EXPIRY 12 months to 31 March ( m) Retail parks Superstores Shopping centres Department stores Leisure Retail City West End Provincial All Offices Total % of Contracted Rent 2.7% 3.1% 6.5% 5.4% 7.3% 12.4% 25.1% Potential Uplift at Current ERV (2) Table shows UK total, excluding assets held in Europe 71

72 ERV RESETTING TO MARKET 12 months to 31 March ( m) ERV Expiring existing portfolio Speculative developments City Speculative developments West End Speculative developments Retail Total Rent Resetting to Market ERV of current vacancies 2, Vacant & Income Expiring Rent is based on ERV, reflecting current valuation 2 Including space under offer of 7m and space in asset management of 1m 3 Including 18m of vacant space at recently completed developments 72

73 CONTRACTED RENTAL INCREASES (CASH FLOW BASIS) 12 months to 31 March ( m) Expiry of rent free periods Standing portfolio Expiry of rent free periods Development pre-lets Fixed uplifts (EPRA basis) Fixed & minimum uplifts in lieu of rental growth Total

74 2010 DEVELOPMENT PROGRAMME As at 31 March 2014 Sector BL Share Sq ft PC Calendar Current Value Cost to Complete ERV Pre-let Resi End Value % '000 Year m m 1,6 m 2 m m Brock Street, Regent s Place 4 Mixed Use Completed Portman Square Offices Completed Marble Arch House 5 Mixed Use Completed Victoria Street Offices Completed Bishopsgate Offices Completed Whiteley Shopping, Fareham Retail Completed Bedford Street Residential Completed Glasgow Fort (Leisure) Retail Completed The Leadenhall Building Offices Broadgate Offices Total 2010 Programme: 2,669 1, Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%) 1 From 1 April 2014 to practical completion (PC) 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 3 Residential development of which 143m completed or exchanged and a further 16m under offer 4 Includes 126,000 sq ft of residential of which 102m has now sold and completed 5 Includes 10,000 sq ft of residential of which 17m has now sold and completed during the year 6 Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate 74

75 RECENTLY COMMITTED DEVELOPMENT PROGRAMME As at 31 March 2014 Sector BL Share Sq ft PC Calendar Current Value Cost to Complete ERV Pre-let Resi End Value % '000 Year m m 1,4 m 2 m m 3 Milton Keynes, Kingston Centre Retail Completed Old Market, Hereford 6 Retail Craven Hill Gardens Residential Fort Kinnaird, Edinburgh Retail Broadgate Circle Offices Broughton Park, Chester Retail Whiteley Leisure, Fareham Retail Meadowhall Surrounding Land Retail Glasgow Fort, M&S & Retail Terrace Retail Deepdale, Preston Retail Yalding House Offices The Hempel Residential Aldgate Place, Phase 1 5 Residential Clarges Mayfair 7 Mixed Use Total Recently Committed: 1, Total Committed under construction: 2, Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%) 1 From 1 April 2014 to practical completion (PC) 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 3 Residential development of which 5m completed or exchanged 4 Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate 5 Residential end value excludes hotel site, receipts of 6 million (BL share) estimated 6 Completed post year end 7 Includes 104,000 sq ft of residential

76 NEAR-TERM AND PROSPECTIVE DEVELOPMENTS As at 31 March 2014 BL Share Sq ft Total Cost Status % '000 m 1 Near-term Pipeline Blossom Street, Shoreditch Mixed Use Pre-submission 5 Kingdom Street 2 Offices Consented 4 Kingdom Street Offices Consented Glasgow Fort (Restaurant & Car Park) Retail Consented Total Near-term Medium-term Pipeline 100 Liverpool Street Offices Pre-submission Power Court, Luton Retail Pre-submission Aldgate Place, Phase 2 Residential Consented Drake Circus Leisure Retail Pre-submission Fort Kinnaird, Edinburgh (Debenhams) Retail Pre-submission Glasgow Fort (Additional Retail Unit) Retail Consented Lancaster Retail Pre-submission Eden Walk Shopping Centre, Kingston Mixed Use Pre-submission Surrey Quays Mixed Use 100 1,500-2,000 Pre-submission Harmsworth Quays Mixed Use 100 1,000-1,500 Pre-submission Total Medium-term 4,271-5,371 1 Total cost including site value 2 210,000 sq ft of which is consented 76

77 RESIDENTIAL DEVELOPMENT PROGRAMME As at 31 March 2014 Mixed-use: Sq Ft '000 No. Market Units PC Date/ Status BL Share % Mar 14 Value m Cost To come 1 m Total m Sales Exchanged m The Triton Building Completed 100% Marble Arch House Completed 100% Clarges Mayfair Jul % Mixed use Resi-led: Bedford Street Completed 100% Craven Hill Gardens Aug % The Hempel Jan % Aldgate Place Phase Jun-16 50% Resi-led Aldgate Place Phase Consented 50% Harmsworth Quays 1,000-1,500 Pre-submission 100% Medium term prospective 1,145 1,645 Total Committed Residential Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%) 1 From 1 April 2014 to practical completion (PC) 2 Includes 51,000 sq ft of affordable housing (68 units) 3 Includes 9,500 sq ft of affordable housing (11 units) 4 Includes 10,000 sq ft of retail space

78 ESTIMATED FUTURE DEVELOPMENT SPEND AND CAPITALISED INTEREST PC Prelet ERV Cost to complete m (excluding notional interest) As at 31 March 2014 Calendar Year m Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 Mar 17 The Leadenhall Building Broadgate Total 2010 Programme: Old Market, Hereford Craven Hill Gardens Fort Kinnaird, Edinburgh Broadgate Circle Broughton Park, Chester Whiteley Leisure, Fareham Meadowhall Surrounding Land Glasgow Fort, M&S & Retail Terrace Deepdale, Preston Yalding House The Hempel Aldgate Place, Phase Clarges Mayfair Total Recently Committed: Total Committed: Total Near-term Indicative Interest Capitalised on above at attributable rates Financing costs are capitalised on qualifying expenditure for committed and near term developments; the rate is at 3% for Leadenhall and 4% for all other developments

79 ESTIMATED FUTURE DEVELOPMENT RENTAL INCOME (ACCOUNTING BASIS) PC Gross Rental Income (Accounting Basis) 1 As at 31 March 2014 Calendar Year Mar 15 Mar 16 Mar 17 Mar 18 Mar 19 5 Broadgate Q Contracted The Leadenhall Building Q Contracted Non-contracted Broadgate Circle Q Non-contracted Clarges Estate Q Non-contracted Yalding House Q Non-contracted Total Offices Contracted Non-contracted Old Market, Hereford Q Contracted Non-contracted Other Retail Developments Contracted Non-contracted Total Retail Contracted Non-contracted Total Committed Contracted Non-contracted Recently Completed Developments (letting of vacant space) 199 Bishopsgate Q Non-contracted Portman Square Q Non-contracted Brock Street Q Non-contracted Marble Arch House Q Non-contracted Victoria Street Q Non-contracted Total Recently Completed Non-contracted Pre-lets plus valuers estimates of non-contracted rent

80 UK PROPERTY MARKET YIELD GAP VS 10 YEAR GILTS % UK 10 Year Gilt Yield IPD All Property Net Initial Yield Yield gap % (1) (3) (5) 80

81 LONDON OFFICE MARKET DEVELOPMENT COMPLETIONS Central London Development Completions m sq ft Completed Under construction Demolition Planning granted 10 yr average Grade A take-up 10 yr average take up Source: CBRE 81

82 LONDON OFFICE MARKET RENTAL OUTLOOK Rental Growth Driven by Imbalance Between Supply and Demand Prime London Office Rents psf West End City 20 Actual Forecast Source: CBRE (historic) and Average Agents' Consensus (including PMA) 82

83 LONDON RESIDENTIAL MARKET Residential new unit sales in Prime Central London Residential Annual Price Growth in Prime Central London 14% 12% 10% 8% 6% 4% 2% Q Annualised 0% Source: Molior (Westminster, Camden, Kensington & Chelsea and City of London) Source: Knight Frank 83

84 REGENT S PLACE CAMPUS 84

85 PADDINGTON CENTRAL CAMPUS Key: BL ownership Non BL ownership Development sites (355,000 sq ft) + Crossrail box below (80,000 sq ft) Multi-let offices 268,000 sq ft Multi-let offices 143,000 sq ft 200 residential units sold on long leases; retail at ground floor FIVE KINGDOM STREET FOUR KINGDOM STREET ONE KINGDOM STREET ONE SHELDON SQUARE New Hammersmith & City line station and access to Crossrail 206 room 4-star hotel (111,000 sq ft) Non BL ownership 88,000 sq ft retail (16 units) around Sheldon Square 85

86 BROADGATE CAMPUS 86

87 DISCLAIMER The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the year ended 31 March 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 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 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. 87