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Annual results 2016
2016 overview David Fischel
Financial performance Matthew Roberts
Optimising asset performance Julian Wilkinson
Delivering UK developments and seizing the growth opportunity in Spain
Martin Breeden
Concluding remarks David Fischel
AppendicesThis presentation contains “forward-looking statements” regarding the belief or current expectations of intu properties plc, its Directors and other members of its senior management aboutintu properties plc’s businesses, financial performance and results of operations. These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions andinvolve known and unknown risks, uncertainties and other factors, many of which are outside the control of intu properties plc and are difficult to predict, that may cause actual results, performance or developments todiffer materially from any future results, performance or developments expressed or implied by the forward-looking statements. These forward-looking statements speak only as at the date of this presentation. Except asrequired by applicable law, intu properties plc makes no representation or warranty in relation to them and expressly disclaims any obligation to update or revise any forward-looking statements contained herein to reflectany change in intu properties plc’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
2
Highlights of 2016
4
+3.6% like-for-like net rental income growth 0.0%
like-for-likevaluation growthIPD: -4.7%
15.0p underlying EPS+6% growth 404p adjusted, diluted NAVPS
2015: 404p
14.0p dividend2015: 13.7p +3.4% total financial return
including dividend
£922m cash and available facilities2015: £588m
Note: all figures include Group’s share of joint ventures.
In line with guidance, considerable momentum
UK market background
5
Occupier market Consumer market Investment market
Strong demand in prime high footfall locations
Unemployment at record lows
Prime centres remain attractive
Requirements for all unit sizes
Increasing disposable income
Limited supply of new quality retail space
Anticipate cost pressures in 2017
Relative confidence in personal finance
situationFlight to quality
A resilient picture
Our priorities in 2016
6
Good progress on all fronts
Optimising asset performanceLike-for-like net rental income +3.6 per cent
7
Note: all figures include Group’s share of joint ventures 1. H1 down; H2 up. Includes an impact of some 2% from units being held for redevelopment and the full year impact of BHS closures. Assumes no material tenant failures.
2017 full year guidance
reiterated at+0% to +2%1
%
+3.6
-6
-4
-2
0
2
4
6
8
10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Optimising asset performanceContinuing outperformance versus IPD
8
Note: all figures include Group’s share of joint ventures.
Capital growth Cumulative capital growth
-8
-6
-4
-2
0
2
4
6
8
10
12 11.0% 7.5% 1.0% 0.6% 0.6% -5.8% 1.8% 0.8% 8.2% 7.3% 4.0% 2.8% 0.0% -4.7%
%
2011 2012 2013 2014 2015 20162010
intu IPD monthly retail index
100
105
110
115
120
125
130
2010 2011 2012 2013 2014 2015 20162009
intu IPD monthly retail index
9
Valuation
-£4mlike-for-like property valuation deficit (0.0%)IPD monthly retail index -4.7%
Stamp duty increased from 4% to 5% in the period
-£60m deficit on developments-£51m for Charter Place
Expected to reverse as development proceeds
Charter Place and intu Watford valued as separate assets
Positive impact of extension onintu Watford not yet recognised
-£64m total revaluation deficitExcludes £35m surplus on intu Merry Hill treated as a profit on acquisition of businesses
Analysis of key components
£93m spent in 2016 Transforming intu Watford
Imminent developments
intu Lakeside leisure extension
intu Broadmarsh redevelopment
intu Trafford Centre, Barton Square enclosure and extension
Active asset management pipeline
Delivering UK developmentsGathering momentum
10
Charter Place, intu Watford (CGI) Grey’s Quarter, intu Eldon Square
Halle Place, Manchester Arndale (CGI)
Making the brand count
11
£20m income 480 retailers
8th equivalent centre ranking 28m website visits+15% year-on-year
1,300 promotional eventsin year £6m online sales
intu Experiences intu Digital
A key differentiating factor driving outperformance
Making the brand count
12
Scale Experience Insight
Your kind of shopping Christmas advert
3m views
+67% reach
-27% cost
The intu difference
Seizing the growth opportunity in Spain
13
12% valuation growth
2% growth in footfall and retailer sales
27 new lettings in period
£33m active asset managementpipeline
£274m1intu Costa del Sol development intu share of €700m total cost
Puerto Venecia, Zaragoza intu Costa del Sol (CGI)
1. £199m to 2019.
Development plans backed by operational performanceDevelopment pipelineOperational performance
Recycling capital
14
Acquisitions Disposals
Purchase of remaining 50 per cent of intu Merry Hill
Disposal of remaining interest in Equity One
£410m purchase price £202m net proceeds
£35m gain on acquisition £74m gain on disposal
£450m year end valuation+ £4m from June 2016 Disposal of intu Bromley
£81m net proceeds
+1% premium to June 2016 value
Focus on super prime centres
Matthew Roberts, hief Financial Officer
intu Chapelfield
Key highlights
16
0.0% valuation upliftIPD: -4.7%
+3.6% like-for-like net rental income growth H2: 0%
15.0p underlying EPS2015: 14.2p
14.0p full year dividendFinal 9.4p
404p adjusted, diluted NAVPS
£1.1bn debt activity in 2016
4.3% weighted average cost of gross debt1
43.7% debt to assets ratio
7.1 years weighted average debt maturity
Note: all figures include Group’s share of joint ventures. 1. Excludes RCF.
Strong operating performance
17
Underlying earnings
Note: all figures include Group’s share of joint ventures.
2016£m
2015£m
Net rental income 447.0 427.8
Administration expenses (38.6) (38.0)
Net finance costs (underlying) (212.9) (213.2)
Dividend from US investment - 6.7
Other 4.5 3.3
Underlying earnings 200.0 186.6
7 per cent growth
18
Financial metrics
1. The EPRA cost ratio (excluding direct vacancy costs) is calculated in accordance with EPRA guidelines.
2016 2015
Interest cover 1.97x 1.91x
EPRA cost ratio1 15.0% 16.0%
Earnings per share 15.0p 14.2p
Weighted average shares in issue 1,333.5m 1,318.1m
Dividend per share 14.0p 13.7p
Improving ratios
Net rental incomeStrong like-for-like growth
19
Note: all figures include Group’s share of joint ventures.
2016
£m
12 months to December 2015 428
Like-for-like (+3.6%) 15
Acquisition: intu Merry Hill 10
Disposal: 50% of Puerto Venecia in 2015 (6)
Total net rental income 447
Net rental incomeLeasing activity delivers growth
20
Note: all figures include Group’s share of joint ventures. 1. H1 down; H2 up. Includes an impact of some 2% from units being held for redevelopment and the full year impact of BHS closures. Assumes no material tenant failures.
2017 like-for-like net rental income growth guidance reiterated at 0 to 2%1
2016
Rent reviews, improved lettings and turnover income +2.3%
Reduced vacancy +1.7%
Capital investment +0.8%
Units closed for development (including BHS voids) -0.6%
Other letting activity
(e.g. surrender premiums; write offs)
Total net rental income LFL +3.6%
-0.6%
Items excluded from underlying profit
21
Note: all figures include Group’s share of joint ventures.
2015 benefited from valuation gains2016 2015
£m £m
Underlying earnings 200.0 186.6Property revaluation (63.8) 350.7Change in fair value of financial instruments (16.9) 5.3
Gain/(loss) on acquisition of subsidiaries 34.6 (0.8)Gain on sale of other investments 74.1 0.9
Exceptional finance costs (32.9) (31.4)Exceptional administration expenses (2.9) (1.5)
Other (e.g. deferred tax) (20.4) 7.8
Profit for the year 171.8 517.6
Net asset value per share 404 pence3.4 per cent total financial return including dividend
22
Note: all figures include Group’s share of joint ventures.
150
250
350
450 404 -14+15 -4 +3 -2 +2 404
31 Dec 2015
Underlyingearnings
Dividend paid
Propertyrevaluation
Acquisition ofintu Merry Hill
Exceptionalcosts
Foreignexchange
movements
31 Dec 2016
£225m change in net external debtCurrently 88 per cent hedged1
23
Note: all figures include Group’s share of joint ventures. 1. Excluding forward starting swaps and including RCF.
-4,500
-4,000
-3,500
-3,000
-4,139 -153+166 -410 +202 +178 -121 -55-35 +3 -4,364
31 Dec 2015 Dividendspaid
Recurring cash flow
Acquisition ofintu Merry Hill
Disposal ofintu Bromley
Disposal ofEquity One
Capital expenditure
Exceptionalcosts
OtherCharter Place finance lease
31 Dec 2016
£m
Debt funding activitiesOver £1 billion of debt activity in the year
£500m intu Merry Hill acquisition bridge
£96m refinanced intu Bromley
£121m refinanced intu Asturias intu’s share £60.5m
£375m convertible bond due 2022
£140m refinanced intu Milton KeynesFebruary 2017
24
Debt maturity
25
7.1yrsweighted average
debt maturity
4.3%weighted average cost
of gross debt1
£922mcash and committed
facilitiesNote: all figures include Group’s share of joint ventures. 1. Excludes RCF.
Minimal near term refinancing
0
200
400
600
800
1,000
2017* 2018 2019 2020 2021 2022 2023 2024 2025-2029
2030-2034
2035+
14.9 823.0 282.8 191.7 618.2 407.2 958.1 114.7 724.1 498.7 166.2
* Pro forma for the refinancing of intu Milton Keynes, signed February 2017.
LTV covenants
26
Secured debtasset by asset
Refinancing activity has rebased covenants
No covenants on intu Trafford Centre debt
Flexible structure
Equity cure required for 25% fall in values and
10% fall in income£64m
Substantial headroom
0
20
10
30
40
50
60
intu Metrocentre
% p
rope
rty
valu
e re
quire
d to
fall
befo
re a
dditi
onal
col
late
ral r
equi
red
St David’s, Cardiff
SGS intu Debenture
intu Asturias
intu Milton Keynes
Puerto Venecia
Sprucefield intu Uxbridge
intu Merry Hill
Capital expenditure
27
Funded throughAvailable facilities Development finance Capital recycling and partners
£886m to be spent by 2019; £257m committed
2017 2018 2019 2017-2019
886222367297
0
200
400
600
800
1,000
£m
Committed – intu Watford Pipeline – active asset management Spain
Committed – active asset management Extensions and developments
Financial flexibilityDebt to assets 43.7 per cent
28
Note: all figures include Group’s share of joint ventures. 1. Excludes RCF.
31 December 2016 31 December 2015£m £m
Total properties 9,985 9,602 Net external debt (4,364) (4,139)Net debt to assets 43.7% 43.1%
Cash 291 301 Undrawn committed corporate facilities 631 287
Net assets attributable to shareholders 4,979 4,976 Adjusted net asset per share 404p 404p
Weighted average cost of gross debt1 4.3% 4.6%Weighted average debt maturity 7.1 years 7.8 years
intu Lakeside
Retail trends
Optimising asset performance
Strategy for growth
Delivering our strategyThree key themes
30
intu Trafford Centre
Retail trendsMultiple sources of occupational demand
Upsizing International Miniaturisation
Portfolio of brands Aspirational Reinvention
31
Catering Leisure
Catering and leisure trendsA market leading tenant mix
32
Optimising asset performancePositive leasing metrics
33
+1.3% footfall growthShopperTrak: -2.0%
214 new long-term lettings
225 stores opened8% of portfolio
+4% aggregate lettings ahead of previous rent
£96m tenant spend on shop fits£420m in last five years
+8% total rent reviews ahead of previous rent
Optimising asset performanceSecure, long-term income streams
34
96% occupancy
89%of top 40 tenants below average risk (Experian Delphi scores)
7.7 years weighted average unexpired lease term
intu Trafford Centre
Optimising asset performanceStable valuation from quality assets
35
Super prime Prime
Percentage of UK portfolio 66% 29%Average "topped up" NIY 4.2% 5.1%Average NEY 4.7% 5.6%
Upsized from 8,000 sq ft
to16,000 sq ft
Upsized from 11,000 sq ft
to 28,000 sq ft
Upsized from 13,500 sq ft
to 22,000 sq ft
Optimising asset performanceintu Merry Hill – delivering the potential
36
The opportunity
Right sizing a number of anchors and major space users
Repositioning the food, retail and leisure
Exceptional opportunity to increase capital value
Right sizing space to fit tenant needs
Continuing to improve tenant mix – food, retail and leisure
Unique platform of physical, digital and experiential
Strategy for growthGrowing our long-term secure rental income
37
UK development momentumMartin Breeden, Development Director
intu Potteries
Fully let catering projects openedImproving catchment, footfall and dwell times
39
Number of restaurants 9 20Total cost (intu share) £10m £15mStabilised initial yield 8.4% 7.6%
Qube extension – opened Easter 2016 Grey’s Quarter – opened October 2016
Committed active asset management£106m capital expenditure
40
Opening Summer 2017 Spring 2018 Summer 2018
Total cost (intu share) £9m £13m £7mStabilised initial yield 6% 6% >10%
Hotel (CGI) New anchor (CGI) Restaurant development (CGI)
Committed developmentExtension of intu Watford
Cost to completion(intu share) £143m
Stabilised initial yield1 6-7%Pre-let2 2/3rds
1. Includes 1-2% generated through the existing centre. 2. By space. Charter Place (CGI)
41
2015 2017
2018
Near term developmentThree major projects due to start in 2017
42
Total cost (intu share) £73m £71m £56m
6-10% stabilised initial yield
Leisure extension (CGI) Redevelopment (CGI) Barton Square - enclosure and extension (CGI)
Future potentialOptionality on future developments
43
Planning approved Retail extension
Planning approved Retail extension
Planning approved Retail and leisure extension
Local planning approval Retail and leisure extension
Pending approval Retail extension
Seizing the growth opportunity in Spain
intu Asturias
Spain
45
One of Europe’s fastestgrowing major economies
Unemployment reducing
Household spending solid
Investor confidence in Spanish real estate
The economy
Create a business of scale
Focus on top 10 markets
Acquire, develop and managemarket leading retail and
leisure resorts
Our strategy
On strategy and strengthening economy
Two top 10 Spanish centresStrong operating metrics
46
Market value (100%) €278m (+14%)1 €498m (+10%)1
Occupancy 99% 97%Footfall +2%Retailer sales +2%New lettings 27
1. Valuation uplift percentage for 2016.
Lower mall development (CGI)
Madrid XanadúPotential acquisition of further top ten centre
47
153,000 sq m
220 units
13m footfall
6.9m catchment
Key tenants
intu Costa del SolWorld class retail resort
48
1. Includes €78m already incurred by intu.
€700m total cost1
7% stabilised initial yield
175,000sq m+62,000 sq m ancillary leisure
32,000 sq m acquired 2017planning advanced
CGI
Concluding remarks
50
Continue to drive forward our strategic priorities in 2017
Performing strongly both in the UK and Spain
Financial flexibility to pursue active management and development projects
Momentum and growth opportunities
Dividend increase reflecting encouraging results and confidence in prospects
UK’s top ranked shopping centres
53
Source: PMA – top shopping centres on basis of PMA Retail Score (December 2016). intu shopping centres highlighted.
˜ adjoined to intu Milton Keynes and shopped as one destination. Combined would be top ten.
Rank Centre Location Rank Centre Location
1 Westfield London London - Shepherds Bush 22 intu Watford Watford
2 Bluewater Greenhithe 23 Victoria Square Belfast
3 Westfield Stratford City London - Stratford 24 Union Square Aberdeen
4 Meadowhall Sheffield 25 The Glades Bromley
5 intu Trafford Centre Manchester 26 Festival Place Basingstoke
6 St David's Cardiff 27 Cabot Place/Canada Place London
7 intu Lakeside Thurrock 28= West Quay Southampton
8 intu Metrocentre Gateshead 28= intu Eldon Square Newcastle
9 Liverpool One Liverpool 30 Trinity Leeds Leeds
10 Bullring Birmingham 31 Princesshay Exeter
11 Brent Cross London 32 White Rose Shopping Centre Leeds
12 Cabot Circus Bristol 33 Touchwood Solihull
13 Manchester Arndale Manchester 34 Golden Square Warrington
14 The Mall at Cribbs Causeway Bristol 35 Victoria Quarter Leeds
15 Highcross Leicester
16= intu Merry Hill Brierley Hill 40 intu Chapelfield Norwich
16= the centre: mk~ Milton Keynes 41 intu Potteries Stoke-on-Trent
18 intu Derby Derby 44 intu Victoria Centre Nottingham
19 The Oracle Reading 53 intu Milton Keynes Milton Keynes
20 Silverburn Glasgow 66 intu Uxbridge Uxbridge
21 intu Braehead Glasgow 185 intu Broadmarsh Nottingham
Development pipeline
54
Development pipeline - 31 December 2016
£m Description
UK planning approval
New space
000 sq ft
Cost to completion
£m
Committed 2017-2019 2020+intu Watford Charter Place extension 380 143 143intu Trafford Centre Barton Square courtyard enclosure 112 55 55intu Metrocentre MSU for Next 13 13Manchester Arndale Halle Square redevelopment 7 7intu Lakeside Hotel 40 5 5Other committed projects Various initiatives 26 26
249 249 -
Active asset management pipelineintu Merry Hill Various initiatives 125 110 15intu Trafford Centre Various initiatives 68 15 53intu Metrocentre Various initiatives 67 55 12Manchester Arndale Various initiatives 42 27 15Other projects Various initiatives 287 55 232
589 262 327
Major extensionsintu Lakeside Leisure extension 225 113 73 40intu Broadmarsh Redevelopment 50 86 71 15intu Milton Keynes 70 70intu Victoria Centre Retail and leisure extension 500 220 220intu Braehead Retail and leisure extension 475 130 130intu Lakeside Retail extension 440 180 180Cribbs Causeway Retail and leisure extension 380 105 105intu Metrocentre Leisure extension 100 100Sprucefield 50 50
1,054 144 910
Total UK 1,892 655 1,237
SpainCommitted and pipeline* Various initiatives 94 32 62intu Costa del Sol Shopping resort 274 199 75Valencia Shopping resort 280 280Palma or Vigo Shopping resort 107 107Total Spain 755 231 524Total 2,647 886 1,761* includes asset management initiatives at intu Asturias (£53m) and Puerto Venecia (£42m).
Indicative timing
UK retail construction pipelinePMA estimate (million sq ft)
Source: PMA.
55
0
2
4
6
8
10
Completed Planned/proposed
m sq ft
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
Property table metrics
56
1. Includes Group’s share of joint ventures. 2. IPD monthly index, retail.
Full Second First Fullyear half half year
2016 2016 2016 2015
Group1 revaluation surplus (like-for-like) 0.0% -0.6% 0.6% +4.0%
IPD2 capital growth -4.7% -3.5% -1.1% +2.8%
Group1 weighted average nominal equivalent yield 5.02% 5.02% 5.01% 5.14%Change in Group nominal equivalent yield -12bp +1bp -13bp -18bp
IPD2 equivalent yield shift +29bp +25bp +4bp -23bp
Group1 ‘topped-up’ initial yield (EPRA) 4.45% 4.45% 4.49% 4.52%
Group1 change in like-for-like ERV 0.0% +0.1% -0.1% +1.5%
IPD2 change in rental value index 0.8% 0.3% 0.5% +0.7%
Yield comparisonsWide spread relative to corporate bonds
57
1994 1996 1998 2000 2002 2004 2006 2008 2010 20121995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2014 2015 2016
6.17%
5.02%
2.50%
1.24%0
2
4
6
12
10
8
%
intu weighted average nominal equivalent yield IPD monthly retail index BBB GBP 10 year corporate bond yield indexGilts 10 years
Yield by retail sub classPrime UK shopping centres – attractive asset class
Source: Cushman & Wakefield.
58
2002 2004 2006 2008 2010 20122003 2005 2007 2009 2011 2013 2014 2015 2016
8.25%
5.50%5.25%
4.00%
2001
0
2
4
6
12
10
8
%
Secondary shopping centres Prime shopping centres Prime retail warehousePrime high street shops
H1 and H2 underlying earnings
H1 2016£m
H2 2016£m
2016£m
Net rental income 219.4 227.6 447.0
Administration expenses (18.3) (20.3) (38.6)
Net finance costs (underlying) (103.6) (109.3) (212.9)
Other 2.0 2.5 4.5
Underlying earnings 99.5 100.5 200.0
Underlying earnings per share 7.5p 7.5p 15.0p
Like-for-like net rental income 7.5% 0.0% 3.6%
59
Net rental income margin
60
1. 2016 property operating expenses include £9 million of car park operating costs and £9 million contribution to shopping centre marketing.
Full year ended 31
December 2015
Total£m
Partners' share
£mintu share
£mintu share
£mGross rental income 533 (37) 496 481
Head rent payable (25) 25 - -
508 (12) 496 481
Net service charge expense and void rates (26) 3 (23) (19)
Bad debt and lease incentive write off (3) 1 (2) (6)
Property operating expenses1 (32) 8 (24) (28)
(61) 12 (49) (53)
Net rental income 447 - 447 428
Net rental income margin 90% 89%
Full year ended 31 December 2016
Lease expiry profileWeighted average expiry 7.7 years
61
Expressed as a percentage of rent roll. * Excludes six per cent in respect of leases which have expired and are mainly holding over and in negotiations.
2017* 2018 2019 2020 2021 2022-2026 2027+
40 189 7767
0
10
20
30
50
40
%
Rent review profile
62
Expressed as a percentage of rent roll. * 2016 includes rent reviews prior to 31 December 2016 yet to be settled.
2016* 2017 2018 2019 2020
9 812109
0
5
10
15
%
Retailer affordability
63
Estimated occupancy cost trends1 2 3
31 December 2016
30 June 2016
31 December 2015
Excluding anchor stores 11.4% 11.6% 11.5%
Excluding anchors and MSUs4 12.2% 12.5% 12.5%
Current rent per square foot5 6
31 December 2016
30 June 2016
31 December 2015
Anchors £12 £12 £12MSUs £30 £30 £30Standard units £48 £48 £48
12 months ended
As at
1. Compares rent to retailers' turnover.2. Actual sales of around two-thirds of sales, estimates of sales for one-third. Extent of data varies between centres.
4. MSU: major space user >10,000 sq ft.5. Based on net internal area. Generally 10 per cent to 40 per cent higher than retail area.6. Anchors and MSUs are generally let on a rent per square foot basis; standard shop unit rents are generally determined on a zoned basis.
3. Not comparable with continental Europe and US shopping centre statistics, differences include measurement of retail area (see 5) and treatment of property taxes.
Aggregate ERV
64
* Total reversion of +8% includes one per cent realisable on lease expiry with over 10 years remaining.** ‘Topped up’ net rent comprises passing rent of £427m, plus other net income of £40m (net car park income, turnover rent and commercialisation income) and contracted rent subject to rent free periods of £27m, less non-recoverable costs and running voids of £22m.
600
550
500
450
400
350
300
472 +16+31 +50 -26 543
'Topped up' net rent**
Rent reviewsVacancies Lease expiry Over-rented ERV
+7%*
reversion from lease expires and rent reviews£m
Top 20 tenants
65
Rank Tenant GroupNumber of
units% secured
rentNote:
1 Arcadia 37 4% Includes Topshop, Topman, Burton, Dorothy Perkins, Miss Selfridge, Wallis and Evans
2 Next 20 4%3 Boots 22 3%4 Debenhams 10 3%5 H & M 18 3%6 Dixons Carphone 31 2%7 New Look 21 2%8 Primark 9 2%9 River Island 17 2%10 JD Sports 23 2% Includes Blacks and Size?
11 A S Watson 40 2% Superdrug and The Perfume Shop
12 Signet Group 37 2% H Samuel and Ernest Jones
13 Marks And Spencer 17 1%14 Inditex 10 1%15 Sportsdirect 18 1% Includes USC, Van Mildert
16 Sainsbury's / Argos 17 1%
17 Superdry 15 1%18 Monsoon 20 1%19 House of Fraser 4 1%20 Goldsmiths 22 1%
408 39%
Optimising asset performanceStrong, stable income – analysis of top 40 tenants
66
Note: based on Experian Delphi bands on 7 February 2017. Top 40 tenants represent 51% of intu’s rent roll.
Corporate responsibility
67
Our progress in 2016
Corporate responsibility
68
Our contribution
Corporate responsibility
We engage with the major socially responsible investment (SRI) funds.
Benchmarking indices such as DJSI Sustainability Index and GRESB allow us to both measure our sustainability performance against our peers and highlight our commitment to corporate responsibility to our existing and potential investors.
This year we have maintained our position in a number of indices as demonstrated by the logos above.
Further details of these indices and our performance can be found in the 2016 CR report.
69
Indices
EPRA non-GAAP measuresNet asset value (diluted, adjusted)
70
Net assets£m
NAV per sharepence
Reported net assets, basic net assets per share 4,979 371
Dilutive convertible bonds and share options/awards 3 -
Diluted NAV 4,982 370
Adjustments:
Financial instrument-related valuation adjustments 378 28
Other adjusting items 7 1
Non-controlling interest 71 5
NAV (diluted, adjusted) 5,438 404
EPRA NNNAV (diluted, adjusted) 4,699 349
EPRA NNNAV is arrived at by adjusting NAV for the fair value of financial instruments (-28p), the difference between the fair value and book value of debt (-28p), share of joint ventures' adjusting items (-1p) and the non-controlling interest in respect of financial instruments (+2p).
The EPRA vacancy rate at 31 December 2016 was 2% (31 December 2015: 3%)
EPRA cost ratio £mEPRA costs - including direct vacancy costs 92EPRA costs - excluding direct vacancy costs 74Gross rental income 502EPRA cost ratio - including direct vacancy costs 18%EPRA cost ratio - excluding direct vacancy costs 15%
EPRA costs include all operating costs of the business included in underlying earnings. Gross rental income is stated after deducting head rent and service charge costs recorded directly through rents.
Proportionally consolidated income statement and balance sheet
71
Summarised income statement (£m)
Group as reportedShare of joint
ventures
Group including share of joint
ventures
Attributable to non-controlling
interests
Group proportionally
consolidated
Net rental income 406 41 447 (18) 429
Administration expenses (38) (1) (39) 1 (38)
Net finance costs (underlying) (194) (19) (213) 22 (191)
Other underlying items 26 (21) 5 - 5
Underlying earnings 200 - 200 5 205
Valuation and exceptional items (78) 14 (64) 6 (58)
Other non-underlying items 50 (14) 36 - 36
Net profit for the period 172 - 172 11 183
Summarised balance sheet (£m)
Group as reportedShare of joint
ventures
Group including share of joint
ventures
Attributable to non-controlling
interests
Group proportionally
consolidated
Investment property 9,212 732 9,944 (370) 9,574
Net external debt (4,230) (134) (4,364) 186 (4,178)
Derivative financial instruments (378) (2) (380) - (380)
Other net assets 442 (596) (154) 117 (37)
Net assets 5,046 - 5,046 (67) 4,979
Our centres
72
Our centres
73
1
2
3
45
67
8
9
10
11
12
1314
15 16 17 **Super-regional centres
65%1. 2. intu Lakeside (£1,375m)
intu Trafford Centre (£2,312m)
3. intu Metrocentre (£945m) 4. intu Merry Hill (£899m)5. intu Braehead (£546m)6. Cribbs Causeway, Bristol (£239m)
Spanish centres
4%16. Puerto Venecia, Zaragoza (£213m)17. intu Asturias (£119m)
* Including Group share of joint ventures. ** Other properties <£100 million (£327m).
In-town centres
31%7. intu Derby (£450m)8. Manchester Arndale (£446m) 9. 10.
intu Victoria Centre (£361m)
11. intu Watford (£336m) 12. intu Eldon Square (£318m) 13. intu Chapelfield (£296m) 14. intu Milton Keynes (£281m) 15. intu Potteries (£169m)
Asset valuation at 31 December 2016
£10.0bn*(2015: £9.6bn)
St David’s Cardiff (£353m)
Top properties
74
Market value
Size(sq ft 000) Ownership
Number of stores
Annualproperty
income
Headlinerent
ITZAABC1
customers Key tenants
Super-regional centres
£2,312m 1,973 100% 233 £89.3m £433 66%Debenhams, Topshop, Selfridges, John Lewis, Next, Apple, Ted Baker, Victoria’s Secret, Odeon, Legoland Discovery Centre, H&M, Hamleys, Marks & Spencer, Zara, Sea Life
intu Lakeside £1,375m 1,435 100% 249 £56.9m £355 66% House of Fraser, Debenhams, Marks & Spencer, Topshop, Zara, Primark, Vue, Hamleys, Victoria’s Secret
intu Metrocentre £945m 2,108 90% 316 £51.6m 52% House of Fraser, Marks & Spencer, Debenhams, Apple, H&M, Topshop, Zara, Primark, River Island, Odeon
intu Merry Hill £899m 1,671 100% 213 £39.1m £195 48% Marks & Spencer, Debenhams, Primark, Next, Topshop, Asda, Boots, H&M, Odeon
intu Braehead £546m 1,127 100% 122 £27.2m £2501 57% Marks & Spencer, Primark, Apple, Next, H&M, Topshop, Hollister, Superdry, Sainsbury’s, David’s Bridal
Cribbs Causeway £239m 1,075 33% 152 £12.2m £305 77% John Lewis, Marks & Spencer, Apple, Next, Topshop, Timberland, Jigsaw, Hobbs, Hugo Boss, H&M
In-town centresintu Derby £450m 1,300 100% 200 £29.7m £110 47% Marks & Spencer, Debenhams, Sainsbury’s, Next, Boots, Topshop, Cinema de Lux, Zara, H&M
Manchester Arndale £446m 1,600 48% 252 £22.2m £275 61% Harvey Nichols, Apple, Burberry, LK Bennett, Topshop, Next, Ugg, Hugo Boss, Superdry, Zara, Hollister
intu Victoria Centre £361m 976 100% 113 £19.0m £250 56%£353m 1,391 50% 203 £16.2m £212 71% John Lewis, Debenhams, Marks & Spencer, Apple, Hollister, Hugo Boss, H&M, River Island, Hamleys, Primark
intu Watford £336m 726 93% 137 £18.8m £220 83%John Lewis, Marks & Spencer, Apple, Zara, Primark, Next, Lakeland, Phase Eight, Lego, H&M, Topshop, New Look, MAC
intu Eldon Square £318m 1,350 60% 140 £15.0m £308 63%John Lewis, Fenwick, Debenhams, Waitrose, Apple, Hollister, Topshop, Boots, River Island, Next, Marks & Spencer
Spanish centres
Market value
Size(sq m 000)
Ownership
Number of stores
Annualproperty
income Key tenants
Puerto Venecia, Zaragoza €249m 119 50% 202 €11.6m El Corte Inglés, Primark, Ikea, Apple, Decathlon, Cinesa, H&M, Mediamarkt, Zara, Hollister, Toys R Us, Fnac
intu Asturias €139m 75 50% 137 €7.7m Primark, Zara, H&M, Cinesa, Eroski, Mango, Springfield, Fnac, Mediamarkt, Desigual
1 The amount presented is on the Scottish ITZA basis; the English equivalent is £335.
House of Fraser, John Lewis, Next, Topshop, River Island, Boots, Urban Outfitters, Superdry, Office
intu Trafford Centre
St David’s, Cardiff
