Annual General Meeting 18 July 2017 www.britishland.com @BritishLandPLC
A successful year John Gildersleeve Chairman
2017 Highlights Underlying profits up 7% to 390m (+ 27m) Total sales of 1.5bn 9% ahead of valuation SouthGate, Bath NAV down 0.4% to 915p Valuation fall of 1.4% 1.7m sq ft lettings and renewals across the business 8% ahead of ERV 3
Creating a Resilient Business Increase in West End as a % of Offices 35% 61% Offices Fall in banks 12% as a % of portfolio 7% March 2010 March 2017 Increase in Multi-let as a % of retail 60% 78% Retail March 2010 March 2017 Fall in superstores 15% as a % of portfolio 4% March 2010 March 2017 March 2010 March 2017 +57% Increase in underlying profit since 2010 Financial Fall in Loan to Value 47% 27% March 2010 March 2017 All figures pro forma for sale of 50% interest in The Leadenhall Building and RBS surrender at 135 Bishopsgate in June 17 4
Our Strategy 100 Liverpool Street, Broadgate Paddington Central Mayflower, Basildon Glasgow Fort Meadowhall Regent s Place 5
Offices Attracting Occupier and Investor Demand The Leadenhall Building Commitment in 2010 Partner with Oxford Properties Leasing complete in July 2016 Setting record rents for the City Sale in March 2017 1.15bn headline price (100%) 24% ahead of September 2016 valuation 25% IRR since 2010 The Leadenhall Building 6
Offices Broadening the Offer Our research shows that 96% Value public transport links close to the office 98% Say communal working areas are important 92% Want food and beverage options nearby Paddington Central Survey of London Millennials 4 Kingdom Street Office space 89% under offer PC 5% ahead of pre-referendum net effective ERVs >20% IRR 4 Kingdom Street >40% ahead of best Paddington Central rent on acquisition in 2013 7
Offices Leasing Activity 1m sq ft of office lettings progressed 279,000 sq ft of lettings, 1.4% ahead of ERV Development of 7 Clarges Street 83% let; one floor to go Rents in line with pre-referendum ERVs 4 Kingdom Street 1m Sq ft lettings progressed 7 Clarges Street Yalding House 8
Retail Reshaping the Portfolio 881m of non-core retail disposals >50 of portfolio turned % over in last 5 years 3% above valuation 4.3% average yield Further 102m of superstores sold post year end Non-core multi-let assets Superstores Department stores Westgate, Wakefield Tesco JV Debenhams, Oxford Street 2012 2017 2.5bn sales 1.5bn acquisitions 9
Retail Enhancing Environments Tollgate, Colchester Ealing Broadway 6m spend ERV +14% Footfall +8% 12.5m refurb Over 30% re-let since acquisition ERV +6% Meadowhall Glasgow Fort 60m refurbishment 37 lettings 7.6% ahead of ERV 12m investment 15 lettings First out of town store for 4 retailers 10
Retail Capturing Incremental Demand Occupiers extending stores New formats and locations 1.3m Sq ft leasing activity Multi-let portfolio lettings vs ERV Lettings vs ERV % 12 10 8 6 4 2 0 +8% 0.9m sq ft +11% 1.0m sq ft 2016 2017 11
Sustainability Sector Leading Performance Customer Orientation Wellbeing Targeting wellbeing to support productivity Helping occupiers attract and retain talent Targeting WELL standard at 100 Liverpool Street Right Places Community Young Readers Programme Connecting with communities and retailers Enlivening our places Sector leader for 3 consecutive years Capital Efficiency Future-proofing Office developments BREEAM Excellent as a minimum <1% incremental cost Better capital value Expert People Skills and opportunity Connecting with occupiers and communities Securing skills our industry needs Lower occupancy cost 44% reduction in carbon intensity 35% reduction in energy intensity vs 2009 } 2020 target: 55% reduction 12
Looking Forward Chris Grigg Chief Executive
Continuing Progress 370,000 sq ft leasing 7.8% ahead of ERV in Q1 2018 100 Liverpool Street Progressed plans at 1 Triton Square 35m refurbishment of 1 Finsbury Avenue starting next month; exclusive discussions with Mimecast on 78,000 sq ft Under offer or advanced negotiations on over 870,000 sq ft across our three London campuses Since May, 135m asset disposals with a further 88m under offer 14
300m Capital Return The Leadenhall Building 300m rolling share buyback programme; decision reflects: Less acquisition opportunities due to strength of investment markets Share price weakness due to macro uncertainties Our commitment to seeking the best returns for shareholders No material change in LTV expected Retain flexibility to pursue development opportunities 15
Our Campuses Broadgate 100 Liverpool Street 1 Finsbury Avenue 288,000 sq ft refurbishment Includes 45,000 sq ft retail 35 million investment Committed Q1 18 135 Bishopsgate Started on site in December 2016 520,000 sq ft development Includes 90,000 sq ft retail Expected completion end 2019 Costs to come of 152 million (BL share) 325,000 sq ft refurbishment Includes 43,000 sq ft retail RBS surrendered lease June 2017; 34m surrender premium (100%) 55 million investment Planning expected summer 2017 16
Our Campuses Broadgate Broadgate Circle Pop up restaurant, 1 Finsbury Avenue 17
Storey Flexible Workspace 80,000 sq ft launching this summer 2 Finsbury Avenue, Broadgate 7,000 sq ft over 4 floors Liverpool Street 2 minutes Appold Studios, Broadgate International House, Ealing Broadway 20,000 sq ft Ealing Broadway 6 minutes 54,000 sq ft, including Kingfisher 25,000 sq ft Liverpool Street 2 minutes a further 80,000 sq ft of opportunities identified across our campuses 18
Our Campuses Paddington Central Pergola Floating restaurant 19
Our campuses Regent s Place 1 Triton Square 310,000 sq ft office space 125,000 sq ft additional space Under offer for pre-let of entire office space Received resolution to grant planning 200m commitment 20
Retail Opportunities Meadowhall Leisure Retail extensions 322,000 sq ft leisure extension Planning decision expected summer 2017 Includes: 48m consented leisure scheme at Drake Circus, Plymouth Leisure extension at Serpentine Green, Peterborough, target planning submission autumn 2017 Eden Walk, Kingston 538,000 sq ft mixed use regeneration scheme Retail, residential, office, cinema, event space Planning granted March 2017 21
Canada Water Proposed mix of uses 3,500 new homes 2m sq ft Workspace 1m sq ft Retail & Leisure www.canadawatermasterplan.com 22
Canada Water The Printworks Toyota Mulberry, London Fashion Week Triumph 23
Outlook Good year and continuing progress 1 Triton Square Macro-uncertainty impacting share price Property markets remain resilient Buying back our shares represents an opportunity at this time Remain well placed to progress attractive opportunities in our pipeline Low leverage and long leases High quality portfolio focused on customers needs Flexibility to adjust to changing market conditions 24
Disclaimer The information contained in this presentation has been extracted largely from the Full Year Results Announcement for the year ended 31 March 2017. This presentation may contain certain forward-looking statements. Such statements reflect current views on, among other things, our markets, activities, projections, objectives and prospects. Such forwardlooking statements can sometimes, but not always, be identified by their reference to a date or point in the future or the use of forward-looking terminology, including terms such as believes, estimates, anticipates, expects, forecasts, intends, due, plans, projects, goal, outlook, schedule, target, aim, may, likely to, will, would, could, should or similar expressions or in each case their negative or other variations or comparable terminology. By their nature, forward-looking statements involve inherent risks, assumptions and uncertainties because they relate to future events and circumstances which may or may not occur and may be beyond our ability to control or predict. 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 (whether by British Land or any of its associates, directors, officers, employees or advisers), including as to their completeness or accuracy or the basis on which they were prepared. Other than in accordance with our legal and regulatory obligations (including under the UK Financial Conduct Authority s Listing Rules, the Disclosure Rules and Transparency Rules and the Market Abuse Regulation), 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. Important factors that could cause actual results, performance or achievements of British Land to differ materially from any outcomes or results expressed or implied by such forward-looking statements are set out in the section headed forward-looking statements in the Full Year Results Announcement. Information contained in this presentation relating to British Land or its share price or the yield on its shares are not guarantees of, and should not be relied upon as an indicator of, future performance. Nothing in this presentation should be construed as a profit forecast or profit estimate. 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 regulation 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. 25