2011 H al a f l - f Y - e Y a e r a Res e u s lt l s t 1 August 2011

Transcription

1 2011 Half-Year Results 1 August 2011

2 Agenda Introduction Financial Results Portfolio Review Development Update Summary and Conclusion 2

3 Headline Results 30 June Dec June 2010 EPS 9.6p 9.7p Dividend 7.3p 7.15p NAV 520p 495p 421p Gearing 60% 52% 72% 3

4 Strategy in Action Strategy H1 Highlights Asset Management: Focus on income growth Emphasis on customer 3.9 % growth in like-for-like income 125 leases signed for 33,500m 2 Occupancy of 97.2% Portfolio Management: Capital recycling Development 373m on acquisitions Planning approvals secured for 250,000m 2 developments Development Agreements for Sheffield & Didcot HoT s with CMS for Principal Place Capital Structure: Flexible funding Joint ventures 505m revolving credit facility agreed Gearing of 60% provides flexibility Liquidity of 488m 4

5 Investment Management - Positioning for Growth Acquisitions 634m Silverburn 149m Battery RP 50m Leadenhall Court 65m Gresham Street 55m Wrekin RP 42m SQY Ouest 18m Falkirk RP 70m St Martins Portfolio 185m 31 Dec June 2011 Disposals 704m L Université 76m Espace Saint Quentin 159m O Parinor 196m Harbour Exchange 134m Bishops Square 139m Disposals Acquisitions Average Lot size 141m 53m Average Value 4,300/m 2 2,800/m 2 5

6 UK Retail Backdrop Polarisation retailers and locations 300 retailers occupy 70% of all UK floor space Successful retailers expanding: Expansion into new formats (H&M Cos Monki) (A&F Hollister Gilly Hicks) New international retailers always want top 30 locations Limited new retail supply to meet occupier and investor demand 6

7 France Retail Backdrop Key economic indicators better than UK Refurbished shopping centres in established locations particularly attractive MSU s requiring larger units as product ranges widen to include accessories Tenant relationships increasingly important given shorter-term leases Click & collect increasingly important Strong investor competition for best assets

8 London Office Backdrop City of London take up fell in H1, with little evidence of ERV growth Demand remains unpredictable Long-term demand for smaller units relatively stable Ongoing demand for large pre-lets Future supply shortage will support rental growth Investor demand compressed yields over last 18 months 8

9 Strategic Positioning Market Polarisation of retail demand Hammerson Dominant regional centres and convenient retail parks High retail vacancy Low vacancy Limited London office supply Flexible consented properties ready for delivery Constrained property finance Unsecured financing provides liquidity for development funding Continued investor demand Prime property 9

10 Financial Results

11 Headlines Income Statement H Change vs. H Net Rental Income ( m) % Adjusted Profit Before Tax ( m) Adjusted EPS (pence per share) % -1.0% Balance Sheet Portfolio Value 5, % 1 NAV (pence per share) % ROE (%) Gearing (%) Notes: 1 Underlying valuation increase 2 For 12 months to 30 June

12 Focus on Like-for-like Income 30 June June 2010 m m % UK Shopping Centres UK Retail Parks French Retail UK Offices Overall

13 Adjusted Profit vs H H Acquisitions (13.3) Disposals 2.1 Developments 4.9 Like-for-like NRI (4.3) Administration costs (2.7) Exchange & other H Adjusted profit ( m) 13

14 Portfolio Valuation Movement Value at 30 June 2011 m UK Shopping Centres 2,415 H % month % 6.4 UK Retail Parks 1, France Retail 1, London Offices Developments Total 5,

15 Drivers of H1 Valuation Trends UK Shopping Centres UK Retail Parks France Yield Income/ERV Development/other London Offices Total Investment Portfolio million 15

16 NAV Per Share Movement NAV Dec Investment Portfolio Revaluation 2 Development Portfolio Revaluation 10 Adjusted Profit (6) Dividends 1 Exchange and other NAV June NAV per share (pence) 16

17 Robust Financing Ratios 30 June Dec 2010 Net Debt 2,190m 1,795m - Bonds 1,672m 1,639m - Bank 585m 278m Gearing 60% 52% Loan to value 38% 34% Cash/undrawn facilities 488m 1,035m Weighted average (cost of finance) 5.4% 5.0% Interest cover 2.6 x 2.6 x Net debt/ebitda 8.8 x 7.2 x Debt fixed/hedged 80% 94% 17

18 Gross Debt Maturity Profile m Bank drawn debt Euro bonds Sterling Bonds Undrawn facilities 18

19 Financing Strategy Support strong investment grade credit rating Continue with Hammerson financing guidelines - Gearing < 85% - Net debt/ebitda < 10 x - Interest cover > 2.0 x Maintain high liquidity Opportunistic on financing sources - Non-recourse loans e.g. O Parinor - Public and private bond issuance Manage average interest rate down Fund growth drivers of the Group 19

20 Portfolio Review

21 Prime Investment Portfolio 18 shopping centres; 18 retail parks; 7 offices Average lot size: 81.2 million Over 2,600 occupiers Occupancy rate: 97.2% Average unexpired lease term: 8.4 years Passing rent: million 12% 88% 27% 73% Retail Of fices France UK As at 30 June

22 Strong Trading Picture UK Footfall and Sales Footfall 2.6%(-0.9% market average) 1 Sales 1.9% (0.2% market average) 1 Rent: sales 13.2% (Dec 2010: 13.5%) Non-rental Income Car parking income: 5.2 million 2 (HY2010: 4.3m) Commercialisation: 1.8 million 2 (HY2010: 1.5m) France Footfall and Sales Footfall -0.5% (-0.6% market average) 1 Sales 1.8% (-0.8% market average) 1 Rent: sales 9.4% (Dec 2010: 9.5%) Non-rental Income Car parking income: 0.5 million 2 (HY2010: 0.4m) Commercialisation: 0.6 million 2 (HY2010: 0.6m) Note: 1) Benchmark Footfall UK; French Footfall Index; BRC retail sales; CNCC index (estimate) 2) Hammerson share, net of costs 22

23 Robust Letting Performance New lease value m ERV of new leases m No. above ERV No. below ERV Aggregate vs ERV UK Retail % Office % UK Total % France % Group % Reducing incentives in UK Retail Improving trend for deals in negotiation 23

24 Maximising Value of Existing Assets Maximising Customer Sales Working with Technology Repositioning & refurbishment Combined Marketing Initiatives Promotional Events Commercialisation Path Intelligence Vente Privee Mobile websites Click & Collect Social media marketing Centrale: Introduce cinema, mall reconfiguration Bullring: Spiceal Street catering quarter Queensgate: Major redevelopment for 5,500m 2 Primark Manor Walks: Food store and cinema anchor 24

25 Repositioning The Oracle Simultaneous transactions deliver tenant mix improvements and financial returns 1 upsize, 2 surrenders, 3 new lettings & 1 relocation New tenants; Hollister, Apple, TM Lewin and Paperchase Zone A rents increased from 232 to 240 Footfall up 11% on Apple opening day 25

26 Meeting Consumer Demand at Brent Cross Repositioning of specialist mall 5 to match catchment demographics Lease surrenders agreed with; Kookai, Oasis, Kate Kuba, Thorntons and Tie Rack New lettings agreed with; Whistles, Jaeger Boutique, Kurt Geiger, Lush and Hawes & Curtis Rental uplift 155k (Hammerson share) Average tenant Dun and Bradstreet rating improved from 3 to 2 Currently zero vacancy 26

27 Combined Management at Saint Quentin SQY Ouest Espace Saint Quentin New retail concepts introduced to Espace Saint Quentin Passing rents increased by 98k (Hammerson share) Renovation program to be launched in 2011 Acquisition of adjacent SQY Ouest in February 2011 Leasing, operations and marketing synergies 27

28 Taking Control of Central Retail Park, Falkirk Acquisition of remaining 75% in March 2011 Strategy to reposition tenant mix Former Au Naturale unit let to Mothercare and Next, Smyths Toys in former MFI Unit Vacant possession of Reid Furniture and World of Sofas, contracts exchanged with Dunelm Vacancy of 2.6%, with all vacant space currently under offer 28

29 Active Management of 99 Bishopsgate Head Lease rent review settled at nil uplift Latham & Watkins new leases agreed with 500k uplift Purchase of virtual freehold increases liquidity and control Refurbish Deutsche space to release into market 2012 Business plan to maximise returns 29

30 Creating Exceptional Places 350 promotional events hosted in last 6 months Commercialisation boosts footfall and revenue Outstanding architecture and public realm Social media as a marketing tool to drive sales Improved leisure and catering offer across the portfolio Footfall at UK centres up 2.6% against benchmark -0.9% 30

31 Development

32 Realising Value From Development Potential to amplify returns to shareholders Near term pipeline 1 of 181,400m 2 / 1.1 billion Pre-lets lock in rent, reduce risk and provide funding flexibility Phased programme to match market demand Note 1 : Potential commencement within 3 years 32

33 Major Development Achievements Completed rue du Faubourg Saint Honoré. Valued at 51 million over cost Construction and leasing progress at Les Terrasses du Port, Marseille Planning approval for Principal Place, EC2 HoT agreed with CMS Cameron McKenna Planning approval for London Wall Place, EC2 Planning approval for Eastgate Quarters, Leeds Development agreements signed: - Sevenstone, Sheffield - The Orchard Centre, Didcot 33

34 Development and Extension Sequencing Committed Near Term Longer Term Les Terrasses du Port 305m France Faubourg St.Honoré 2m London Principal Place Office 290m Principal Place Residential 195m The Goodsyard London Wall Place 345m UK Retail Eastgate Quarters, Leeds 550m Sevenstone, Sheffield 290m Brent Cross Cricklewood Extensions Portfolio Extensions/Redevelopments 335m Note: Hammerson Share of cost to complete depending on JV Structure Indicative timings only earliest start on site to completion Extensions and redevelopments cover UK and France Retail, and London Office

35 Conclusion Continued growth in like-for-like net rental income Retail portfolio outperforming benchmarks Capitalising on upturn in London offices Acquisitions position portfolio for enhanced growth Development progress with completion, construction and consents Persistent investor demand for high quality assets Hammerson well placed to continue strong momentum 35

36 Questions

37 Appendices 37

38 Top Ten Properties Ownership (%) Valuation 30/06/11 (1) ( m) Passing rent (2) ( m) Italie 2, Paris 13ème Brent Cross, London NW Bullring, Birmingham Highcross, Leicester The Oracle, Reading Cabot Circus, Bristol WestQuay, Southampton Union Square, Aberdeen Les Trois Fontaines, Cergy Pontoise O Parinor, Aulnay-sous-Bois Notes: 1) Hammerson s share of valuation and passing rent shown in respect of joint ventures 2) Passing rents are at the end of rent free periods and after deducting head and equity rents 38

39 Major Developments Scheme Lettable Cost Value Estimated cost Estimated annual area Earliest start Forecast completion to 30/06/11 1 at 30/06/11 to complete 1 income 2 Let 3 m 2 m m m m % COMMITTED Faubourg Saint-Honoré 4 8,200 Complete Complete Terrasses du Port 56,000 Commenced April NEAR-TERM Principal Place: -office 56,500 April 2012 Dec 2014 n/a residential 23,100 March 2013 Nov 2015 n/a nil London Wall Place 45,800 June n/a nil Sub total (excluding Faubourg) 181, , LONGER-TERM Eastgate Quarters, Leeds 106, n/a nil Sevenstone, Sheffield 60, n/a nil Notes (1) Capital cost including capitalised interest. (2) Net of head rents and after expiry of rent-free periods. For Principal Place and London Wall Place, head rent is estimated at 7% of gross rental income. (3) Let or in solicitors hands by income at 29 July (4) Data for property as a whole, including redevelopment which opened in June (5) converted at 1 = (6) Timings are indicative only. 39