2017 Half-year results. 26 July 2017

Transcription

1 2017 Half-year results 26 July 2017

2 Agenda H1 highlights David Atkins CEO Financial results Richard Shaw Group Financial Controller Portfolio review Mark Bourgeois Managing Director UK and Ireland David Atkins CEO Conclusion David Atkins CEO 2

3 2017 Half-year highlights Consistent sector-leading income growth EPS +5.6% DPS +5.9% Polarisation driving demand for space Leasing volumes +44% LfL NRI +3.4% (1) Positive capital returns across all parts of portfolio NAVPS +4.3% Higher growth markets continue to outperform Ireland ERV growth 2.5% Premium outlets sales growth +11% Brent Cross extension Victoria, Leeds Batavia Stad, Amsterdam Advancing future developments Brent Cross detailed planning submitted Cergy main contractor selected Pioneering sustainability commitment Net Positive by 2030 Garden of Pure Imagination, Dundrum Cabot Circus (1) LfL NRI including Ireland and premium outlets. EPRA LFL NRI +0.7% H1 highlights 3

4 Our strategy underpins the strong financial performance Dundrum, Dublin Westquay, Southampton Mallorca Fashion Outlet Focus on growing consumer markets Create differentiated destinations Promote financial efficiency and partnerships H1 highlights 4

5 Our well-positioned European portfolio Positive valuations across all parts of the portfolio Hammerson portfolio split (2) Benefiting from structural trends in retail, despite variability of consumer environment 19% 6% 33% Solid investment market demand for prime assets underpins yields Income growth contributed over 80% of capital returns Outperformance from higher-growth markets 13% 8% 21% Irish economic data strong, driven by fundamentals European premium outlets valuations driven by structural trends of tourism and market consolidation Disposals on track 97m (1) achieved to date and total 400m planned this year UK shopping centres 3.5bn France 2.2bn Ireland 0.8bn UK retail parks 1.3bn Premium outlets 2.0bn Development & UK other 0.6bn 10.5 billion portfolio UK 57% Non-UK 43% (1) Including disposal of Westwood and Westwood Gateway retail parks, Thanet, 80m (2) As at 30 June 2017 (excludes Norwegian Outlet, Oslo acquisition and disposals in Thanet in July) H1 highlights 5

6 Achieving record leasing volumes as retailers increasingly focus on the best locations Leasing volumes across investment portfolio ( m) H H H UK Shopping Centres n/a UK Retail Parks France Ireland Coach, Victoria Leeds H1 highlights 6

7 Confidence in our income-focused growth track-record EPS (pence) DPS (pence) NAVPS (pence) 30 H1 H2 30 H1 H H117 CAGR +7.8% (1) CAGR +6.6% (1) CAGR +7.1% (2) (1) H to H (2) FY 2011 H H1 highlights 7

8 02 Financial results Richard Shaw Group Financial Controller - Review of 2017 performance - Analysis of valuation trends - Update on financing ratios - Capital recycling - Drivers of future earnings growth

9 Headline results Income statement 30 June June 2016 Change Net rental income ( m) % Adjusted profit ( m) % Adjusted EPS (p) % Interim dividend (p) % Balance sheet 30 June December 2016 Change Portfolio value ( m) (1) 10,527 9, % EPRA NAVPS (p) % LTV (%) p.p. (1) Valuation for total portfolio including premium outlets Financial results 9

10 LfL NRI growth lifted by Ireland and premium outlets H NRI by sector (1) NRI ( m) LfL NRI growth (%) UK shopping centres UK retail parks (2) France EPRA NRI Ireland (3) Premium outlets UK other and developments 8.6 n/a Total NRI (1) Figures on a proportionally consolidated basis (2) Adversely impacted by surrender premiums. Adjusted H LfL NRI growth +4.7% (3) Ireland will become EPRA LfL from Proforma LfL NRI including Ireland +1.6% Financial results 10

11 Solid uplift in profit H adjusted profit movement ( m) % 3.5 (9.8) (1.8) H Acquisitions LFL NRI Developments Premium Financing FX & other Disposals Net admin H (Ireland) (1) outlets (1) Net of interest received in H Financial results 11

12 Income growth driving valuation H Drivers of underlying valuation change Value at capital return (1) 30 June 2017 (2) (%) Yield shift (%) Income (%) Other (%) ( m) UK shopping centres ,484 UK retail parks ,340 UK other interests (3) France ,232 Ireland (4) Developments Premium outlets ,032 Total ,527 (1) At constant exchange rates (2) Figures on a proportionally consolidated basis (3) Principally assets held for redevelopment and non-core (4) Excluding Pavilions residual loan 111m Financial results 12

13 Positive valuations driving NAVPS uplift H EPRA NAV movement (pence per share) (14) +4.3% Dec 2016 Portfolio Adjusted FX & other Dividends revaluation incl. profit June 2017 premium outlets Financial results 13

14 Financing ratios underpin our balance sheet strength Financing policy 30 June Dec 2016 Net debt - 3,710m 3,413m Gearing <85% 62% 59% Loan to value <40% 37% 36% Cash and undrawn facilities - 678m 592m Weighted average cost of debt - 3.0% 3.1% Interest cover >2.0x 3.4x 3.5x Net debt/ebitda <10x 10.1x 9.5x Fixed rate debt >50% 76% 70% GBP/EUR FX balance sheet hedging 70% - 90% 80% 79% Financial results 14

15 Continuing to take advantage of refinancing opportunities Debt maturity profile 30 June 2017 ( m) Medium term opportunities to refinance upcoming maturities 2019: 500m 2.75% bonds 2020: 250m 6.875% bonds Revolving credit facilities Private placement Sterling bonds Euro bonds Secured debt Financial results 15

16 Capital recycling and funding flexibility Deleverage through disposals ahead of large developments ( m) average disposals p.a. Continue run-rate of annual disposals Pipeline of extensions and phased capex for large developments m 400m 300m disposals Average annual capex Shopping centres Retail parks France Other, including offices Financial results 16

17 Confidence in medium-term EPS growth Movement in adjusted EPS (pence per share) Drivers/outlook LfL NRI 3.7 At least 2% p.a. target. Enhanced quality of portfolio Developments 3.5 Retail parks 8% YoC Near-term projects c.6% YoC Premium outlets Acquisitions and disposals Net interest Dublin loan interest, share issue & other % growth (1) 3.8 (0.2) (0.3) (0.6) 29.2 Strong market sales growth (c.10% p.a.) Disposals 400m, ahead of future developments Further deleveraging and refinancing in low interest rate environment (1) CAGR 8.6% Financial results 17

18 03 Portfolio review Mark Bourgeois - MD UK & Ireland - First impressions - UK shopping centres - UK retail parks - Ireland David Atkins - CEO - France - Premium outlets

19 Cabot Circus, Bristol Portfolio review: UK shopping centres

20 Culture Portfolio quality First thoughts upon joining Hammerson Hammerson 75? Product experience framework Iconic destinations Best at retail Convenient & easy Interactive & engaging Entertaining & exciting Positive Places Portfolio review 20

21 Creating differentiated destinations Wimbledon tennis at the Esplanade, Westquay Light show at the Esplanade, Westquay Beacons, Highcross Garden of Pure Imagination, Dundrum Beach, Brent Cross Style Seeker, Plus app 21

22 Role of the store continues to evolve What will the primary role of your store be in 5 years? (1) Selling merchandise 75% Provide service and experience Showcase the brand In-centre sales What are your investment priorities? (1) 88% improving customer experience through in-store technology Volkswagen, Bullring 1. Instore multichannel +10% 2. Retail halo +5% 3. Collection kiosks +1-2% Productivity of the centre extends by a further 17% (1) Javelin survey of 50 retailers carried out for Hammerson Portfolio review 22

23 Our differentiated destinations attract strong leasing demand in spite of challenging retail conditions UK shopping centres H In-store retail sales (%) 3.9 * Leasing activity (%) (1) +47 Leasing vs. ERV (%) +5 ERV growth (%) +0.5 LfL NRI (%) +2.1 * * * * * Coach, Victoria Leeds Average H leasing package 9 months (H1 2016: 9 months) * * * Portfolio firsts (1) Change in volume of new leasing ( m) H1 17 vs. H1 16 Portfolio review 23

24 Our dining destinations are performing well with robust leasing demand 15% of portfolio allocated to dining and leisure F&B expertise boosting asset performance Right concept in the right location will thrive Brands with strong offer, innovative design, strong financial models and good customer service will win out Bespoke leasing approach Westquay South Introducing new concepts: Quakers Friars, Cabot Circus Largest 3 restaurant operators (by sales), Hammerson portfolio LfL sales growth (1) Issho, Victoria Leeds +2.7% +1.2% +7.5% Riverside, Oracle Victoria Leeds (1) 12 month rolling LFL to 30 June 2017 Portfolio review 24

25 Opportunity to further enhance the UK portfolio with next generation of retail Brent Cross Croydon Total retail space 175,000m 2 Cost to complete (1) m Croydon Partnership retail 200,000m 2 Cost to complete (1) m (1) Hammerson share Portfolio review 25

26 Advancing transformational development of Brent Cross towards 2018 start on site Steps towards start on site Planning May 2017: submitted detailed planning consent Autumn 2017: committee for approval Contractors Autumn: appoint shopping centre works contractor. By end of year: appoint highways contractor; secure cost certainty Regulatory approvals By end of 2017: CPO consent Leasing Finalise agreements with department stores Good initial interest from international MSU retailers Current strong demand for new space within existing scheme Portfolio review 26

27 Elliott s Field, Rugby Portfolio review: UK retail parks

28 Profitable retail park extensions adding new income Good leasing demand for well-located schemes Elliott s Field Phase 2, Rugby 78% pre-let Parc Tawe, Swansea 76% pre-let Orchard Centre, Didcot 45% pre-let Fife Central, Kirkcaldy Completed 100% pre-let Build on success of Phase 1 Strong leasing demand Profit on cost 29% Total investment 98m Total yield on cost 8% Portfolio review 28

29 Record-high occupancy across retail parks UK retail parks H Leasing activity (%) (1) +56 Leasing vs. ERV (%) +11 ERV growth (%) +0.3 LfL NRI (%) 3.0 Enhancing our well-positioned retail parks with retail know-how 99% H1 17 Occupancy +1.2% YTD Footfall LfL NRI (adj for surrender premiums) (%) (2) % Dwell time (3) (2017: 51 mins) +32% Click & Collect users (3) (2017: average C+C spend 88.75) x2 Net promoter score (3) (2017: 31%) Fife Central, Kirkcaldy (1) Change in volume of new leasing ( m) H1 17 vs. H1 16 (2) Net surrender premiums of 2.7m received in H (3) Source: CACI data versus 2015 survey Portfolio review 29

30 Dundrum, Dublin Portfolio review: Ireland

31 Delivering strong ERV growth and enhancing the consumer experience Ireland H Leasing vs. ERV (%) +13 Creative asset management at Dundrum 99.9% Occupancy ERV growth (%) +2.5 LfL NRI (%) (1) Volvo Uplift in Dundrum ERV since ownership (2) +12% 90m+ Nespresso POCO 65m 8m 73.7 Acquisition ERV July 2016 Uplift at June 2017 Expected growth H Forecast 2021 ERV Garden of Pure Imagination Smiggle (1) Proforma based on underlying net rental income in H which was accounted for as finance income (2) Dundrum ERV 100% Portfolio review 31

32 Positive activity across the rest of the Irish portfolio Ilac Centre, Dublin centre Moore Mall refurbishment completed 10 units to 5 larger units (100% pre-let) Cost 1.5m; >2x rent uplift Developments Full control secured of Dublin Central Development site Master planning commenced at Dundrum Phase 2 Pavilions, Swords Completion of ownership arrangements later this year Trading positively; leading centre in catchment Portfolio integration New Dublin Hammerson HQ Fully integrated with UK leasing team Portfolio review 32

33 Les Terrasses du Port, Marseille Portfolio review: France

34 A core asset strategy in France Focus on attractive and resilient prime centres 70% Les Terrasses du Port Italie Deux Les Trois Fontaines Regional Other 1,560m 660m Les Terrasses du Port Marseille Italie Deux Paris Les Trois Fontaines Cergy Pontoise, Paris Portfolio review 34

35 Good leasing in France with improving economic backdrop France H In-store retail sales (%) 3.1 Leasing activity (%) (1) +12 * * Leasing vs. ERV (%) +8 ERV growth (%) +0.5 * LfL NRI (%) +1.5 ILC (retail leasing index) turning positive (%) Q * Portfolio firsts (1) Change in volume of new leasing ( m) H1 17 vs. H1 16 Portfolio review 35

36 Les Trois Fontaines, Cergy: advancing opportunity to develop a compelling Paris scheme Investment Refurbishment of existing scheme completed 2016 Progressing 33,000m 2 retail and dining extension as part of a wider city centre project Opportunity Favourable location in Paris region and leading centre in catchment Strong partnership with main co-owner Auchan (hypermarket) Progress to start on site Co-ownership agreement, building permit and retail consent obtained Main contractor selected Good pre-letting Adjoining retail acquisition opportunities Size upon completion 85,000m 2 Total development cost (1) 230m (1) Excludes acquisition of additional property interests Portfolio review 36

37 La Roca Village, Barcelona Portfolio review: Premium outlets

38 A platform of considerable scale, now 19% of our portfolio VIA Outlets acquisition Norwegian Outlet, Oslo 20 Villages Opened 2010, recently extended 16,000m 2 56 units Hugo Boss, Timberland, Under Armour Average sales growth 15% ( ) Remerchandising and asset management opportunities identified Hammerson share 47m 14 Countries 60m Visitors p.a. 38

39 Value Retail: continued strong growth Value Retail H Sales growth YoY (%) +10 Sales density growth (%) +8 Footfall growth (%) +2 Total return (%) Extending Bicester Village, one of the world s most recognised and productive retail schemes Opening October new units 100m 15% YOC Over 40 new brands introduced Bicester Village Fidenza Village Kildare Village La Roca Village Kildare Village La Vallée Village Portfolio review 39

40 VIA Outlets: now an established outlet operator VIA Outlets H Sales growth YoY (%) +18 Sales density growth (%) +15 Batavia Stad extension opened Q ,500 m 2 added 45 new units Footfall growth (%) (1) +8 Total return (%) +0.3 Asset management Rebranding of 2016 acquired assets 64 leases signed Partnerships with tourism operators; international sales +63% Extensions and reconfigurations Freeport Lisboa Fashion Outlet: Major reconfiguration (Q3 2017) Mallorca Fashion Outlet: Flagship Nike and Polo Ralph Lauren stores (Q4 2017) YTD sales density +11% YTD footfall +17% (1) Excludes Mallorca Fashion Outlet and the ex-irus portfolio Portfolio review 40

41 04 Conclusion Use new format slide 41

42 Our strategy continues to deliver success Portfolio positioned to benefit from retail evolution Top-3 market position in chosen sectors Good demand for our space in a polarising landscape Leasing volumes +44% Capital recycling into higher-growth markets enhancing returns Premium outlets now 19% of portfolio Skilled and focused teams Product Experience Framework creates differentiated destinations Continuing to deliver consistent returns Sector-leading income growth EPS +6%; DPS +6% Victoria, Leeds Conclusion 42

43 Westquay, Southampton Questions 43

44 Disclaimer This presentation contains certain statements that are neither financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed or implied by these statements. Many of these risks and uncertainties relate to factors that are beyond Hammerson s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of governmental regulators and other risk factors such as the Company s ability to continue to obtain financing to meet its liquidity needs, changes in the political, social or regulatory framework in which the Company operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, national or regional basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Hammerson does not undertake any obligation to publicly release any revision to these forwardlooking statements to reflect events or circumstances after the date of these materials. Information contained in this presentation relating to the company or its share price, or the yield on its shares, should not be relied upon as a guide to future performance. 44

45 Appendices

46 10.5 billion leading pan-european retail platform (1) 60 European shopping destinations 6% 14 Countries 19% 33% Top 3 Market position in all chosen sectors 13% 8% 21% 43% non-uk assets UK shopping centres - 3.5bn France - 2.2bn Ireland - 0.8bn UK retail parks - 1.3bn Premium outlets - 2.0bn Development & UK other - 0.6bn 2.2m sq m retail space 410m visitors 4,800 Tenants (1) As at 30 June 2017 (valuation excludes Norwegian Outlet, Oslo acquisition and disposals in Thanet in July) 11 - UK shopping centres 10 - France shopping centres 2 - Ireland shopping centres 17 - UK retail parks 20 - Premium outlets 46

47 Focus on growing consumer markets Our strategy is to focus on markets which take advantage of retail property trends Retail formats Matched to consumer behaviour in the multichannel world: experience (shopping centres), convenience (retail parks) and retail tourism (premium outlets) Market position Select prime property to benefit from polarisation in occupier demand Location Selected European countries or cities benefitting from urbanisation and retail tourism Growing catchments and markets where we can gain share Appendices 47

48 Our Product Experience Framework in action Create differentiated destinations Iconic destinations Victoria, Leeds Best at retail LinkStreet, Birmingham Convenient & Easy Click & Collect services Interactive & engaging Developing the Plus App Entertaining & Exciting Westquay South, Southampton Positive Places Victoria Gate community interaction Appendices 48

49 Promote financial efficiency and partnerships Financial efficiency Flexible capital structure supports capital recycling strategy Partnerships broaden our market reach, increase scale and strengthen our business Diversified sources of debt Actively reducing weighted average cost of debt Declining cost:income ratio Accessing global capital markets JSE Listing Reducing the cost of debt (%) 6% 5% 4% 3% 5.2% 5.0% 4.8% 4.7% 3.8% 3.1% 3.0% 2% 1% 0% H Chosen operator for global capital 19bn total European property platform through partnerships Appendices 49

50 Consumer backdrop National retail sales indices (%, YoY, by value) (1) Real private consumption growth forecasts (%) (2) Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun UK (total) (0.9) (0.3) 3 UK (in store) (3.2) (3.2) (1.3) 0.1 (5.3) (2.4) 2 1 France (5.3) (3.0) 0.4 (7.5) 0 Ireland 1.4 (0.3) 0.8 (0.9) 0.8 n/a France Ireland United Kingdom UK: VISA Consumer Spending Index growth by category (%, YoY) Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Food, beverages & tobacco (0.2) (0.9) (0.4) 6.0 (0.6) 1.9 Clothing & footwear (4.0) (4.3) (0.4) 2.2 (5.3) (0.5) Household goods (2.4) (3.5) 0.0 (3.3) (4.3) (3.4) Health & education (2.2) (9.6) Transport & communication (4.1) (4.6) (1.7) (9.7) (7.4) (5.8) Recreation & culture (1.2) Hotels, restaurants and bars Misc. goods & services UK: Fashion category indicators Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 BRC Clothing LFL Negative Negative Negative Positive Negative Positive Visa spending data: Clothing & Footwear BDO Fashion sales (ex online) John Lewis Fashion sales (4.0)% (4.3)% (0.4)% 2.2% (5.3)% (0.5)% (1.0)% (3.4)% (0.8)% 1.2% (3.6)% 1.4% c.4% Flat c.6% c.5% Flat c.3% (1) Source: VISA (total and face-to-face indices); CNCC; Ireland Central Statistics Office (2) Source: Oxford Economics; annual growth; local currency Appendices 50

51 European shopping centres are in a better position than the US Differences between US and UK/European retail property markets Shopping centre space per capita (sq ft) UK has higher online sales penetration, so retailers and consumers are already well-adapted to multichannel US has at least 5x as much shopping centre space per capital as Europe US has higher amount of department store space within malls and less F&B. Most often department store anchors are owner-occupied. ecommerce penetration by country (% of sales, 2016) Split of space in shopping centres by retail category (% of total centre GLA) Source: Verdict; John Lewis retail trends Appendices 51

52 2017 YTD operational statistics UK shopping centres France Sales densities (3) UK /ft 2 France /ft 2 Sales (1) 3.9% 3.1% Footfall 1.7% 2.3% Rent:sales (2) 12.9% 12.5% H OCR (2) 20.4% 15.4% Occupancy (%) UK shopping centres UK retail parks France Ireland Group 30 June December June n/a 97.2 (1) Retail sales on same-centre basis, includes all shopping centres (2) France data includes VAT (rent:sales and OCR excluding department stores) (3) France data includes VAT; Jeu de Paume, Beauvais, excluded Appendices 52

53 H portfolio leasing overview Leasing vs previous passing (%) Leasing vs ERV (%) ERV growth (%) Rent secured from new leases ( m) UK shopping centres UK retail parks France Ireland Group (1) (1) Including UK Other and Ireland properties, principally assets held for development and non-core Appendices 53

54 Tenants in administration 30 June 2017 % of passing rents 42 units in administration units unoccupied December units in administration units unoccupied June units in administration units unoccupied 0.1 Appendices 54

55 UK shopping centre investment Hammerson UK shopping centre cash flow statement 2016 m 2015 m 2014 m Gross rental income Service charge income Total income B Service charge expenses (excl. investment) Other property expenses (Hammerson NRI) Net cash flow before maintenance capex Investment spend (service charge maintenance projects) Investment projects (capex on maintenance or value-add projects) 3a + 3b A Net cash flow from Operations Maintenance capex: total income, % 8% 8% 9% A/B Capitalised Recoverable from tenant 1. 1 Hammerson operating expenses Direct/indirect return? n/a Selection of examples Car park expenditure; landlord marketing; interactive hoardings, upkeep collection lockers/mobile phone charge points, research and marketing costs 2. 2 Service charge (maintenance) 3.a 3a Investment projects (hygiene) 3.B 3b Investment projects (value-add) n/a Painting, flooring upkeep, footfall counters, CCTV, wifi upgrade, IT upgrades Partial Direct / Indirect Wayfinding projects, WC upgrades, LED lighting, public seating upgrades Direct Creating new lettable space: e.g. CAU Oracle, Costa Westquay, car parks projects Appendices 55

56 Higher rental growth UK retail parks market split and Hammerson ownership Shopping parks Hybrid parks Key homeware goods parks Standard homeware parks Solus units Higher rental growth segments UK retail parks market (1) Hammerson portfolio Shopping parks Hybrid parks Key homeware goods 40% 84% Standard homeware Solus (1) Source: PMA; Market and portfolio split by number of parks; Adjusted for disposals Appendices 56

57 Premium outlets portfolio Value Retail Villages VIA Outlets centres Bicester Village, UK (1) GLA: 22,700m 2 Boutiques: 135 Batavia Stad Amsterdam Fashion Outlet (2) GLA: 31,000m 2 Units: 110 La Roca Village, Barcelona GLA: 23,400m 2 Boutiques: 141 Fashion Arena Prague Outlet GLA: 24,100m 2 Units: 98 Las Rozas Village, Madrid GLA: 16,500m 2 Boutiques: 105 Freeport Lisboa Fashion Outlet GLA: 29,500m 2 Units: 98 La Vallée Village, Paris GLA: 21,400m 2 Boutiques: 111 Hede Fashion Outlet, Gothenburg GLA: 16,300m 2 Units: 53 Maasmechelen Village, Brussels GLA: 19,500m 2 Boutiques: 106 Landquart Fashion Outlet, Zurich GLA: 20,700m 2 Units: 71 Fidenza Village, Milan GLA: 20,900m 2 Boutiques: 122 Mallorca Fashion Outlet GLA: 33,100m 2 Units: 52 Wertheim Village, Frankfurt GLA: 21,100m 2 Boutiques: 121 Sevilla Fashion Outlet GLA: 16,300m 2 Units: 67 Ingolstadt Village, Munich GLA: 20,500m 2 Boutiques: 120 Wroclaw Fashion Outlet, Poland GLA: 13,700m 2 Units: 85 Kildare Village, Dublin GLA: 16,800m 2 Boutiques: 99 Zweibrücken Fashion Outlet, Germany GLA: 29,400m 2 Units: 113 Vila de Conde Porto Fashion Outlet GLA: 27,800m 2 Units: 125 Norwegian Outlet, Oslo GLA: 16,000m 2 Units: 56 (1) Not including extension opening October 2017 (2) Including extension opened May 2017 Appendices 57

58 Hammerson s total investment in Value Retail: 41% (1) Hammerson 2m shareholder loan Holding companies 25% equity Hammerson is the second largest shareholder in holding company after management. Largest owner of VR as a whole. Other shareholders include APG, SPG, private investors (family and friends) Bicester Village La Roca Village Las Rozas Village La Vallée Village Maasmechelen Village Fidenza Village Wertheim Village Ingolstadt Village Kildare Village VR ownership (1) Hammerson share ( m) Value Retail 100% m GAV 1, , Participative loans (3) % Village ownership via LPs (%) Total Village ownership (%) GAV plus participative loans 1, , % Other assets % Total liabilities (762.5) (2,436.9) 31% Investment in associate excl. goodwill 1, , % (1) Hammerson s share of Value Retail s net assets at 30 June 2017, excluding goodwill (2) Largely represent the economic interests in Spanish Villages, structured as loans rather than equity Appendices 58

59 Tourism is a key driver of outlets sales growth Top 10 source markets represent 68% of sales in EU destinations, and is forecast to grow by 8% Top tax free nationalities sales growth 2017 (%) (1) Non-EU arrivals will see growth of c.5% in All European destination markets are predicted to see gains Growth non-eu arrivals to EU countries 2017 (%) (1) (1) Source: Premier Vision Annual Review 2016/2017 (data from Oxford Economics) Appendices 59

60 On site developments Scheme (1) Lettable area m 2 Expected completion Value 30 Jun 2017 m (2) Estimated cost to complete (3) m Estimated annual income (4) m Parc Tawe, Swansea 21,400 Q n/a Let (5) % Elliott s Field Shopping Park (Phase 2), Rugby 7,900 Q Orchard Centre, Didcot 8,700 Q Total 38, (1) Group ownership 100% for all on-site schemes (2) Values are not included for extension projects which are incorporated into the value of the existing property (3) Incremental capital cost including capitalised interest (4) Incremental income net of head rents and after expiry of rent-free periods (5) Let or in solicitors' hands by income at 25 July 2017 Appendices 60

61 Development pipeline opportunities Scheme Area (m 2 ) Brent Cross extension 90,000 Bristol investment properties (1) 74,000 Croydon Town Centre 200,000 Silverburn (Phase 4), (1) Glasgow 50,000 Union Square, Aberdeen (1) 27,800 Victoria, Leeds (Phase 2) (1) 73,000 WestQuay South, Southampton (Phase 2) 58,000 Extension and refurbishment of Brent Cross forming part of wider Brent Cross Cricklewood regeneration plans, totalling 175,000m 2 of retail, catering and leisure. Reserved matters planning application submitted with decision expected in September CPO decision expected in September New planning application in the name of Callowhill Court submitted December 2016 for 3.5ha site of joint venture-owned land relating to part of the real estate adjoining Cabot Circus. Masterplan includes up to 74,000m 2 retail and leisure, 500 car parking spaces, and the potential for 150 residential units and a 150 room hotel. Redevelopment of Whitgift Centre and refurbishment of Centrale shopping centre by the Croydon Partnership., a 50:50 joint venture between Hammerson and Westfield. New outline planning application submitted in October 2016 with decision expected in autumn Consent granted in 2015 for a masterplan for a future extension of existing centre. Masterplan includes 31,250m 2 retail, 8,500m 2 leisure and a hotel. Extension of existing shopping centre for up to 11,000m 2 of retail, 12,000m 2 of leisure and catering, plus up to 300 car parking spaces and a hotel. Planning application due for determination by summer Phase 1 Victoria Gate completed October Operator being sought for up to 300 bed hotel adjacent to new multi-storey car park. Phase 2 masterplanning underway to deliver phased retail/leisure mixed-use scheme to complement Victoria Gate. Freehold control of Phase 2 site obtained. Council-owned land, with potential for c.260 residential units, a hotel and number of retail units to complement the recently completed cinema and catering scheme. A joint review of scheme underway with the local authority and third parties to progress the project. Oldbury, Dudley (1) 10,900 Planning secured in May 2016 for new development of up to 11 retail and catering units. Leasing underway. The Goodsyard, London E1 270,000 Italie Deux, Paris 13ème 6,500 Les 3 Fontaines, Cergy Pontoise 33,000 SQY Ouest, Saint-Quentin-en-Yvelines (1) 32,000 Dundrum Phase II, Dublin (1) 100,000 Dublin Central, Dublin (1) 130,000 Swords Pavilions Phase III, Dublin (1) 272, ha site on edge of City of London. Planning application for major mixed-use development was deferred in April 2016 to allow further consultation. Work on-going to submit amended application in early Extension of the existing shopping centre offering a new façade and innovative concepts. Land disposal approved by the City of Paris. Building permit submitted. Retail consent obtained and free from challenge. Pre-letting on-going. Retail and catering extension as part of a wider city centre project. Co-ownership agreement, building permit and retail consent obtained. On-going pre-letting discussions and contractor selected. Opportunity to reposition existing shopping centre, creating a leisure-led destination. Trading consent obtained but challenged. Preletting on-going, Phase 1 launched to handover first units in second half of Six acre site located adjacent to Dundrum Town Centre. Opportunity to create a retail-led mixed used scheme; masterplanning process underway. Extension of duration of planning consent granted until May 2022 to create a retail-led city centre scheme. Irish government has appealed a High Court decision to designate part of the site as a National Monument. The Group is supporting the process and a hearing is expected in December Extension of planning consent granted to August Consent in place to create 124,000m 2 retail-led scheme including residential units. Pending completion of loan to own process for Phases I and II, subject to regulatory clearance due later this year. Total 1,427,200 (1) Schemes are on Group owned land. No additional land acquisitions are required. Excludes occupational and long leaseholds. Appendices 61

62 H valuation data UK shopping centres UK retail parks France Ireland UK other interests Total portfolio True equivalent yield (%) 30 Jun Dec ERV ( m) 30 Jun Dec LfL change (%) Appendices 62

63 H components of valuation change Components of valuation change in H1 2017, total portfolio ( m) UK shopping centres UK retail parks France Ireland Developments Premium outlets Total Portfolio Yield Income Development and other Total Note: Development and other includes the movement in the UK Other interests portfolio where valuations increased by a total of 3m during H Appendices 63

64 Sensitivity to FX movements Income statement As reported Weaker GBP Change Stronger GBP Change GBP/EUR % % Net rental income ( m) % % EPS (p) % % Balance sheet GBP/EUR % % NAVPS (p) % 761 1% Net debt ( m) 3,710 4,024 +8% 3,424 8% LTV (%) bps bps Appendices 64

65 Net debt Reported 30 Jun 2017 Group 3,710 3,710 Fully proportionally consolidated LTV methodology VIA Outlets Value Retail Loan 3,710 4,270 Property values Group 8,495 8,495 Ireland (loans) VIA Outlets Value Retail - 1,534 Less minority interest (84) (84) VIA Outlets net assets Value Retail net assets 1,097 - Value 9,944 10,555 LTV 37% 40% Appendices 65

66 Cost:income ratio Cost:income ratio (%) 30% 25% 26.5% 24.2% 22.8% 23.1% (1) 22.6% (2) 20.5% (3) 20% 15% 11.9% 10.9% 10.0% 11.3% 10.7% 9.0% 10% 5% 14.6% 13.3% 12.8% 11.8% 11.9% 11.5% 0% H Corporate expenses Operational costs (1) Excluding car park costs ( 9.3m in 2015) cost:income ratio would be 21.1% (2) Excluding car park costs ( 9.5m in 2016) cost:income ratio would be 20.7% (3) Excluding car park costs ( 5.1m in H1 2017) cost:income ratio would be 18.5% Appendices 66

67 Our new Positive Places objective is for Hammerson to be Net Positive for carbon, water, resource use and socio-economic impacts by 2030 Carbon Net Positive for carbon means carbon emissions avoided exceed emissions generated. Resource Use Net Positive for resource use means waste avoided, recycled or re-used exceeds materials used that are neither recycled, renewable nor sent to landfill. I am proud that Hammerson has become the first real estate company globally to identify such comprehensive targets and by extending our aims to tenant impacts we will be able to directly support our retail clients and deliver best in class retail assets that are fit for the future. David Atkins, CEO, Hammerson plc Water Net Positive for water means water replenished by external projects exceeds water consumed from mains supply. Resource Use Net Positive for socio-economic impacts means making a measurable positive impact on socio-economic issues relevant to our local communities beyond a measured baseline.

68 Steps to becoming Net Positive ,000 tonnes CO 2 e 539,082 m 3 water 18,243 tonnes waste not recycled or reused ,000 tonnes CO 2 e 511,888 m 3 water 17,293 tonnes waste not recycled or reused 40,000 FTE jobs supported across our assets 2017 Deliver carbon neutral development at Rugby Install 3 further solar PV arrays Reduce energy demand by further 7% v 2015 baseline Achieve 85% recycling Work with tenants to reduce tenant on site energy demand Major developments to support long term carbon reduction Identify local carbon saving projects 2021 CO 2 e reduced by at least tonnes Embed net positive into new developments Increase renewable capacity Appendices 68

69 Hammerson Net Positive Our ambition to be net positive for carbon emissions, water and resource demand and socio-economic impacts by 2030 So far during 2017 we have: Designed a carbon neutral, BREEAM Outstanding retail park with full co-operation from tenants. We are on track for delivery during 2017 Published a full Carbon Footprint for the Group Approved install of a 198kWp PV array at Cabot Circus scheduled to be completed during H2, taking total capacity to 500kWp Achieved further reduction in carbon emissions Published True Value of Retail the social impact footprint of the Group Key data: 40,000 fte jobs across our portfolios 800m generated in wages 82% of jobs to local people 48% to under-25s Appendices 69