Full Year Results Presentation - British Land/media/Files/B/... · Presentation. Year ended 31 March 2020. Introduction . Chris Grigg, CEO. 2 • London offices leasing well – 946,000

Full Year Results PresentationYear ended 31 March 2020

Introduction Chris Grigg, CEO

2

• London offices leasing well– 946,000 sq ft, 9% ahead of ERV

– Developments 88% let, locking in £54m of rent

– Offices value +2.3%; developments +7.5%

• Pragmatic approach to Retail leasing – 1.4m sq ft leasing activity

– Deals over one year 4% below passing rent

– Occupancy high at 96%

– Values down 26.1%

• EPS down 6.3% to 32.7p– Impact of £1bn net sales of income producing

assets since April 2018

– Challenging retail market

Resilient FY20 Performance

Broadgate3

• Operating environment and outlook highly uncertain

• Key market trends likely to accelerate – More flexible ways of working

– Further shift to online retail

• Strategy, focusing on campuses, informed by many of these trends – Modern buildings

– Customer focused offer

– Additional flexibility through Storey

• Resilient financial position – Debt low and LTV 34%

– £1.3bn undrawn facilities & cash

– No need to refinance until 2024

– Temporary dividend suspension4

Well positioned in uncertain times

Broadgate

• All but two Retail centres open– Essential stores open c. 15% of total

• Campuses are open and all buildings accessible – Physical occupancy low

– Most F&B, retail and leisure units closed

• Work recommenced at developments following initial suspension – All major sites now open, but with reduced

workforce

– 135 Bishopsgate completed, being fitted out

– 100 Liverpool Street expected to complete calendar Q3 2020

– 1 Triton Square expected to complete calendar Q2 2021

5

Covid-19 Response

3

The Barcode, PlymouthGlasgow Fort

Financial ResultsSimon Carter, CFO

Results Overview

Underlying earningsper share

-6.3% vs March 19

EPRA Net Asset Value per share

-14.5% vs March 19

Portfolio valuation

-10.1% vs March 19(Retail -26.1%, Offices +2.3%)

Loan to value

Incl: +340bps val’n declines,+210bps capital spend

Undrawn facilities and cash

No requirement to refinance until 2024

7

32.7p 774p £11.2bn

34.0% £1.3bn

Committed and completed developments

pre-let4.2p EPS accretion when fully let

88%

8

Underlying earnings per share

34.9p

33.5p32.7p

(2.5p)

1.1p (1.5p) 1.4p (1.3p)

0.6p

2019 Net divestment &development

Share buyback Excl. impact ofcapital activity

Like for likeincome incl. CVAs

& admins

Cost savings Covid-19 relatedprovisions for

tenant incentives& rent debtors

IFRS 16 adoption& fee income

2020

Financing £6m Admin £7m

9

Net rental income

478

532

(33)

(14)

(7)

(6)3

3

2019 Net divestment Like for like incl.CVAs and admins

Tenant incentiveprovisions

Rental debtorsprovisions

IFRS 16 adoption Developments andother

2020

£m

Offices +0.8%1

Retail –5.1%1

1

1 Like for like is stated excluding the impact of surrender premia, CV19 provisions for tenant incentives and CV19 provisions for rental debtors

10

Income statement

Financial Year to 31 March 2019 2020 Change %

Net rental income (£m) 532 478 (10.2%)

Fees & other income (£m) 10 13 30.0%

Administrative expenses (£m) (81) (74) (8.6%)

Net finance costs (£m) (121) (111) (8.3%)

Underlying Profit (£m) 340 306 (10.0%)

Underlying earnings per share (p) 34.9 32.7 (6.3%)

Dividend per share (p) 31.00 15.97 (48.5%)

11

Dividend policy guidance

• To protect the long term strength of the business, the dividend has been temporarily suspended in response to Covid-19

• As a REIT, the dividend is an important element of shareholder return

• The Board is focussed on resuming dividends at an appropriate level as soon as there is sufficient clarity of outlook

• Guiding principles:• A significant improvement in rent collection

• More visibility on the post lockdown productivity of our assets, principally how quickly retail customers and office workers return.

12

EPRA net asset value

905p

774p

(137p)

33p (31p)6p (2p)

Mar 19 Valuation performance UnderlyingProfit

Dividends Share buyback Financing activity Mar 20

Valuation performance

Valuation£m

Valuation movement

Yield movement

ERVmovement

Total 11,157 +38bps -4.7%

Offices 6,773 -4bps +3.2%

Retail 3,873 +101bps -11.7%

Residential 147

Canada Water 364

13

2.3%

(10.1%)

(26.1%)

(2.7%)

9.8%

Market demand is expected to be softer in the short term, but supply for prime remains

constrained, helping support rents

Developments£1.0bn (+7.5%)

Office valuation performance

Standing Portfolio£5.8bn (+1.2%)

+3.2% ERV growth

-4bps yield shift

£243m spend in period

£83m valuation uplift

+2.3%Offices FY20

valuation movement

14

97% Office

occupancy

15

-

200

400

600

800

1,000

1,200

1,400

1,600

0% to -5% -5% to -15% -15% to -25% -25% to -30% -30% to -35% More than -35%

Shopping Centres Retail Parks Superstores Leisure High Street Dept Stores

March ’20 Valuations (£’m)

Retail Valuation Movements

% Valuation Movement in FY20

-26.1%Retail FY20 valuation

movement

Valuers’ Covid-19 adjustments included:

• 3 months rent on all non-essential retail deducted as a capital sum

• Non-contractual income deducted as a capital sum for 6 month period

• Increasing yields by c.25-100 bps

• Increased void period

• Increased structural vacancy

On average accounted for a decline of c.6%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Total FY18 Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20

Admins - stores closing

Admins - reduced rents

CVAs - stores closing

CVAs - reduced rents

Annualised contracted rent impact by Quarter (£’m)

12 months: £11m12 months: £13m

CVAs & Admins

16

17

Retail Leasing Overview

1. Excludes temporary deals with terms of less than one year

96%Retail occupancy

Fashion & Beauty- 251k sq ft- £5.5m headline rent- (1%) vs passing- 4.6 years average lease term- 7 months average incentive

General Retail- 212k sq ft- £4.0m headline rent- (11%) vs passing- 6.9 years average lease term- 17 months average incentive

Home & DIY- 148k sq ft- £2.5m headline rent- (6%) vs passing- 7.6 years average lease term- 9 months average incentive

Food & Leisure- 58k sq ft- £1.2m headline rent- +7% vs passing- 8.4 years average lease term- 4 months average incentive

Grocery & Convenience- 62k sq ft- £0.9m headline rent- +5% vs passing- 14.0 years average lease term - 12 months average incentive

Other Business- 28k sq ft- £0.2m headline rent- (13%) vs passing- 2.7 years average lease term - 1 month average incentive

-4%vs previous passing

rent1

British Land Footfall movement vs Benchmark1

% YoYBL Footfall Benchmark Outperformance (bps)

1 ShopperTrak UK National Index

-0.2 -0.2-1.2

-8.0

-78

-4.4 -4.6 -5.8

-12.6

-85

FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4

+420 +440 +460 +460+700

18

Footfall

Grocery anchored assets: -70%

Post lockdown23 Mar - 10 May

British Land LfL sales movement vs Benchmark1

% YoYBL LfL Sales Benchmark Outperformance (bps)

1 BRC KPMG In-Store LFL Non-Food Index

+520 +310 +270 +460

19

Retailer sales

1.1

-0.1

-1.1

-8.4

-82

-4.1 -3.2 -3.8

-13.0

FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4

Grocery anchored assets: -42%

Post lockdown23 Mar - 10 May

20

Covid-19: Rent collection and deferrals

As at 15th May Offices Retail1 Total

Received 97% 43% 68%

Rent deferrals 1% 40% 22%

Rent forgiven 1% 4% 3%

Moved to monthly - 1% -

Outstanding 1% 12% 7%

Total 100% 100% 100%

Collection of adjusted billing2 99% 78% 91%

1 Includes non-office customers located within our London campuses.2 Total billed rents exclusive of rent deferrals, rent forgiven and tenants moved to monthly payments.

Rent due since 2 March to 30 April

51%49%

21

Our assessment of Covid-19 on our customers

In FY20, income from lower impact customers fully covered total Group property, admin and finance costs

Lower ImpactTypical sectors:• Global Technology • Financial Institutions• Professional & Corporate • Grocery & Convenience• Government93% Rent collected for period 2nd March – 30th April

Higher ImpactTypical sectors:• Food & Leisure• Fashion & Beauty• General Retail• Travel & Media• Home & DIY39% Rent collected for period 2nd March – 30th April

Over a third of higher impact businesses are listed with a market cap of over £1bn1

Based on contracted rents on proportionally consolidated basis1 Market capitalisation as at 18th May

Strength of debt metrics31 March 2019 31 March 2020

Undrawn Facilities and Cash £1.7bn £1.3bn

No requirement to refinance until: 2022 2024

Loan to value (LTV)1 28.1% 34.0%

Weighted Average Interest Rate1 2.9% 2.5%

Interest Cover1 3.8x 3.8x

Weighted Average Drawn Debt Maturity1 8.1yrs 7.5yrs

Senior unsecured credit rating (Fitch) A A

Unsecured debt covenants:

Net Borrowings not to exceed 175% of Adjusted Capital and Reserves 29% 40%

Net Unsecured Borrowings not to exceed 70% of Unencumbered Assets 21% 30%

Valuation headroom 45%

221 Proportionally consolidated basis

23

2020 Sustainability Targets – key achievements • Achieved or exceeded

– 73% reduction in carbon intensity (scope 1 and 2) vs 2009 baseline (target: 55%)

– 55% reduction in landlord energy intensity vs 2009 baseline (target: 55%)

– 1,745 people supported into jobs through Bright Lights, our skills and employment programme (target: 1,700)

• More challenging but excellent progress – 96% electricity purchased from renewable

sources (target: 100%)

– 94% progress on our Local Charter (target: 100%)

– Investing £2.8m in 2020 to make a positive difference to local communities

Young Readers, Ealing

24

New 2030 Environmental Commitments • Net zero carbon portfolio by 2030

– All future developments to be net zero embodied carbon

– 50% less embodied carbon on all major developments by 2030

– 75% less operational carbon across our portfolio by 2030

• Transition fund established – From 2020 we will assume an internal carbon

price of £60 per tonne for new developments

– This will fund the offsetting of embodied emissions associated with developments through accredited offset schemes

– The remaining amount will be paid into the Transition Fund to finance retrofitting of standing portfolio, including R&D

100 Liverpool Street

25

New 2030 Social Commitments • Place based approach

– Partner with local stakeholders

– Education and employment partnerships at each place

– Underpinned by our Local Charter, comprising 5 key commitments to local communities

• Piloting our approach at three locations, building on successful partnership model at Regent’s Place and Fort Kinnaird

Tree Shepherd, Canada Water

Looking forward Chris Grigg, CEO

• Occupiers focused on getting back to the office

• Focus on transition to the “new abnormal”…– Occupancy will be phased and significantly

reduced

• …and in the “new normal” – Managing communal space, staggered hours of

operation, more frequent deep cleans

• Businesses appreciate the benefits of the office– Developing and maintaining culture and teams

– Interacting with and serving customers/clients

– Hiring, training, learning from experience

– Social interaction, supporting mental health27

Offices – working with our customers to get back to work

1 Triton Square, Regent’s Place

• Demand likely to focus on modern, high quality space– Particularly flagship (e.g. headquarter) space

– Customers seeking more flexibility and focus on health/safety and well managed space

– Further polarisation in terms of quality of space and customer services

• Some trends likely to reverse– Reduced hot desking as employees value personal

space

– Trends towards greater densities likely to reverse

– Working from home patterns will likely evolve

• Our campuses are well positioned – Delivering modern, sustainable workspace with a

focus on wellbeing

– Control and management of public spaces 28

Offices – early thoughts on potential long term trends

Storey Club, Paddington

• Use of online retail has accelerated

• Changing consumer behaviour – Likely more “mission based” shopping

– Less dwell time, less browsing

– Challenges for leisure / experiential operators

• Retail parks relatively better placed– Open air centres more attractive to shoppers

– Well located, easily accessible, facilitate instore fulfilment and Click & Collect

• Retail, F&B will remain an important part of our mixed use environments long term – Key to creating attractive, vibrant London places

• Committed to achieving further selective sales

29

Retail, early thoughts on near and long term view

SouthGate, Bath

• Key planning milestones achieved– Resolution to grant outline planning for Masterplan

– Confirmation that the Mayor of London will not call the application in for further consideration

• Next steps – Expect to draw the headlease down over the

summer

– End 2020, earliest possible start on site, depending on prevailing conditions

• Future plans – Resolution includes detailed consent on the first

three buildings, capital spend of £330m

– Initial discussions with potential partners on the whole scheme

30

Further good progress delivered at Canada Water

First Phase building

Outlook

Canada Water

1 Broadgate 31

• London Offices– Occupier demand likely to be softer short term

– Supply of prime likely to remain constrained for some time with developments postponed or delayed

– Expect demand for modern, high quality and well located space to remain firm

– Expect investment market to recover as confidence returns

• Retail – Occupier market will remain challenging

– Liquidity not expected to return to the multi-let investment markets in the short term

– Investor demand for standalone assets remains relatively robust

Appendices

33

76%London & South

East

£11.2bn(BL share)

A diverse, high quality portfolio

Other Retail (5%)

London Campuses (49%)

Residential & Canada Water (5%)

Shopping Centres (14%)

Standalone offices (11%)

Retail Parks (16%)

34

Near and longer term challenges & implications

Retail Office

Near term

• Open air, well located centres will play a key role • Increase in “mission-based” shopping• Reduced dwell time, less browsing • Likely decrease in experiential and leisure activities

• Locations ability to support instore fulfilment, particularly Click & Collect will be key to retailer networks

• Return to work likely to be phased• Changes in commuting methods/patterns: travel is a key challenge

• Careful management of communal space, including lifts and meeting rooms will be essential

• Hotdesking will decline, space per employee likely to rise

• Majority of meetings likely to remain virtual

Long term

• Significant, permanent shift to online likely to accelerate

• Retailers likely to refine and focus networks on stores which best enable distribution and fulfilment (including Click & Collect)

• Evolution of lease structures, potential continued increase in turnover leases but with linkage to online fulfilment

• Flexible working trend likely to continue, with increased working from home

• Workspace and face-to-face interaction remains key for culture, attracting best talent, training and maintaining client/customer relationships

• Increased space per employee • Focus on health / safety and property management

35

Storey roll out

Current Locations

Forthcoming Locations

36

Our Retail portfolio is well positioned to meet both consumer and retailer demands

Source: CACI Retail Footprint 2019, BL Insight teamNote that population reach includes Broadgate

BL centres

BL asset catchmentsPotential to reach

c.50%of the population2

Annual footfall1 of

295m

Average rent to sales ratio2

9%

Occupancy cost ratio2

14%1 For the 12 month period to 31 March 20202 For the 12 month period to 30 September 2019

37

BL footfall performance vs benchmark

British Land

UK Market (ShopperTrak UK National Index)

Jan-10 = 100

45

50

55

60

65

70

75

80

85

90

95

100

105

110

115

120

Jul-10 Jan-17Jan-14 Jan-15Jan-13 Jul-14Jul-11Jan-10 Jul-15Jul-12Jan-11 Jan-12 Jan-20Jan-18Jul-13 Jul-17 Jul-18Jul-16 Jan-19Jan-16 Jul-19

BL Index

Outperformance for12m to Mar 2020

+460bps

38

Major retail property holdings

As at 31 March 2020 BL Share %

Sq ft000’s

Rent (100%)£m pa1,4

OccupancyRate %2,4

Lease Length yrs3,4

1 Meadowhall, Sheffield 50 1,500 82 96.1 4.9

2 Drake's Circus, Plymouth 100 1,190 20 90.1 6.3

3 Glasgow Fort 78 510 20 96.1 5.7

4 Ealing Broadway 100 540 15 92.1 3.8

5 Teesside, Stockton 100 569 16 96.5 3.8

6 Speke, New Mersey 68 502 14 94.4 5.7

7 Kingston Centre, Milton Keynes 100 380 8 90.4 7.0

8 Serpentine Green, Peterborough 100 337 8 99.6 6.7

9 St. Stephen’s, Hull 100 552 9 97.7 3.9

10 Fort Kinnaird, Edinburgh 39 560 19 92.1 5.1

1 Annualised EPRA contracted rent including 100% of Joint Ventures & Funds2 Including accommodation under offer or subject to asset management3 Weighted average to first break4 Excludes committed and near term developments

39

Customer Orientation

We use our insight into customers’ needs and identify major long term trends to create

environments in tune with changing lifestyles

Right Places

We design engaging, sustainable places which bring people together through the right

mix of occupiers, services and activities

Capital Efficiency

We allocate our capital, manage our finances and partner with like-minded organisations to

deliver sustainable long-term value

Expert People

We employ expert people and work with specialist partners to create insight, develop

skills and build capability

Areas of focus to deliver our strategyBritish Land is a mixed use commercial property company focused on London offices and high quality retail

Places PeoplePrefer

By managing our business to be resilient, sustainable and responsive, we create enduring demand for our properties and value for our stakeholders

40

Broadgate Campus

2 FA & 3 FA• 2FA & 3FA - Innovation cluster inc. 51k sq ft

of Storey space• 3FA – UBS surrendered lease in Jan 2018. ‘Light

touch’ refurb completed• Current size: 250k sq ft• Potential size: 563k sq ft

1 FA• Pre-let 113k sq ft to Mimecast, 30k sq ft to Product

Madness, 11k sq ft to Everyman Cinemas, 29k sq ft to Workday

• 73k sq ft to be Storey space• Size: 287k sq ft• PC’d Q1 2019

135 Bishopsgate• 90% let• Pre-let 123k sq ft to TP ICAP,

148k sq ft to McCann, 44k sq ft to Eataly• Size: 335k sq ft• PC’d: Q1 2020

1 Broadgate• Current size: 330k sq ft• Potential size: 538k sq ft• Planning permission secured March 2019100 Liverpool Street

• Pre-let 184k sq ft to SMBCE, 71k sq ft to Milbank LLP, 60k sq ft to BMO, 40k sq ft to Peel Hunt

• Current size: 380k sq ft• Redevelopment: 524k sq ft• Completion: Q3 2020

83% of Broadgate completed and committed developments pre-let

41

Paddington Central Campus

42

Regent’s Place Campus

43

Top 20 occupiers & occupier split by industry

As at 31 March 2020

% of Retail Rent

Tesco plc1 7.8Next plc 4.9Kingfisher 3.6Walgreens (Boots) 3.5M&S Plc 2.8J Sainsbury 2.6Dixons Carphone 2.5Debenhams 2.5Frasers 2.4JD Sports 2.2TJX (TK Maxx) 2.1Arcadia Group 2.0New Look 1.9Asda Group 1.7Virgin 1.6TGI Fridays 1.5Steinhoff 1.5H&M 1.4Hutchison Whampoa Ltd 1.4DFS Furniture 1.3

Occupier Split by Industry (%)

1 Includes £3.4m at Surrey Quays Shopping Centre2 Taking into account their pre-let of 310,000 sq ft at 1 Triton Square, % contracted rent would rise to 13.0%. As part of this new letting, Dentsu Aegis have an option to return their existing space at 10 Triton Street in 2021. If this option is exercised, there is an adjustment to the rent free period in respect of the letting at 1 Triton Square to compensate British Land.

Banks & Financial services 13%

General Retail 14%

Fashion & Beauty 18%

TMT 13%Food / Leisure 11%

Professional &Corporate 9%

Grocery & Convenience 7%

Home & DIY 6%

Other 9%

Retail Top Occupiers Offices Top OccupiersAs at 31 March 2020

% of Office

Rent

Facebook 7.8Government 6.4Dentsu Aegis2 4.4Visa 4.0Herbert Smith Freehills 3.2Gazprom 2.5Microsoft Corp 2.4Vodafone 2.0Tullett Prebon 2.0Deutsche Bank 1.9Henderson 1.7Reed Smith 1.7The Interpublic Group (McCann) 1.6Mayer Brown 1.4Skyscanner 1.3Mimecast Ltd 1.3Credit Agricole 1.2Aramco 1.2Kingfisher 1.2Monzo Bank 1.1

44

Capital Activity

Since 1 April 2019 Offices £m

Retail £m

Residential £m

Canada Water£m

Total £m

Purchases 86 13 19 - 118

Sales1 - (296) (86) - (382)

Development Spend 243 9 5 25 282

Capital Spend 69 34 - - 103

Net Investment 398 (240) (62) 25 121

Gross Investment 398 352 110 25 885

On a proportionally consolidated basis including the Group’s share of joint ventures and funds1Includes Clarges residential sales of £86m, of which £6m exchanged prior to FY20 and completed in the period

45

(2,000)

(1,600)

(1,200)

(800)

(400)

-

400

800

1,200

1,600

Capital Activity

£45m

FY16 FY17

(£502m)

FY18

(£739m)Net Spend1

£m

Sales Capital Investment Net SpendPurchases

1 Previous periods have been restated to exclude transactions exchanged in the period that have now completed

(£752m)

FY19

£121m

FY20

Gross investment activity since April 2018

£2.7bn

46

PurchasesSince 1 April 2019 Sector Price

(100%)£m

Price (BL Share)

£m

Annual Passing Rent

£m1

Completed

West One, London Offices 217 54 2

6 Orsman Road, Haggerston Offices 32 32 2

Aldgate Place, Phase 2 Residential 19 19 -

Former ToysRus unit, Stockton-on-Tees Retail 8 8 -

Sainsbury’s, Burton upon Trent Retail 5 5 1

Total 281 118 5

1 BL share of annualised rent topped up for rent frees

47

Sales

1 BL share of annualised rent topped up for rent frees2 £6m of which exchanged prior to FY20 and completed in the period

Since 1 April 2019 Sector Price (100%)

£m

Price (BL Share)

£m

Annual Passing Rent

£m1

Completed

Portfolio of Sainsbury’s stores Retail 522 246 15

David Lloyd, Croydon Retail 22 22 1

Homebase, Walton on Thames Retail 20 20 1

Debenhams, Bournemouth Retail 8 8 1

Clarges2 Residential 86 86 -

Total 658 382 18

48

Clarges Residential Unit Sales

Number of units £m

Completed in FY18 2 24



Total Completed 33 445

Units remaining 1 3

Total 34 448

49

Illustrative future income profile breakdown (cash basis)For the year to 31 March 2021 2022 2023 2024 2025 Total Accounting

Basis As at 31 March 2020 £m £m £m £m £m £mCurrent Passing Rent 516

522Contracted uplifts4 36 15 7 1 2 61Pre-lets of Committed Developments1 15 22 - - - 37 31Contracted rent 614 553Sales exchanged post year end - - - - - - -Letting of completed developments 4 - - - - 4 3Lease Expiries – Development pipeline (5) (1) (1) - - (7) (8)Letting of Committed Developments1 – speculative 4 1 - - - 5 4Letting of Near Term Developments1 - - 29 - 20 49 40RPI Linked Leases2 1 1 1 1 1 5 6Reversion3 - 8 (1) (3) (1) 3 2Vacancies 27 27 23

700 623Letting of Medium Term Developments (excl. Canada Water & Eden Walk) 79 62

On a proportionally consolidated basis including the Group’s share of joint ventures and funds. Figures based on valuation rent and include assumptions on outstanding rent review settlements 1 Assumes lettings contracted are rent producing at practical completion2 Assumed at 2.6% per annum 3 Includes reversion on expiries and open market rent reviews within 5 years4 Includes £8m agreement for lease rents

50

Gross rental income1

Accounting Basis £m 12 months to 31 March 2020 Annualised as at 31 March 2020

Group JVs & Funds Total Group JVs & Funds Total

West End 155 1 156 144 2 146

City 15 69 84 7 63 70

Offices 170 70 240 151 65 216

Retail Parks 94 58 152 90 55 145

Shopping Centre 64 52 116 61 49 110

Superstores 5 5 10 5 2 7

Department Stores 7 - 7 5 - 5

High Street 6 - 6 6 - 6

Leisure 15 1 16 14 1 15

Retail 191 116 307 181 107 288

Residential2 4 - 4 4 - 4

Canada Water 9 - 9 8 - 8

Total 374 186 560 344 172 516

On a proportionally consolidated basis including the group's share of joint ventures and funds1 Gross rental income differs from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives2 Standalone residential

51

Underlying Profit Bridge

340

317306

(23)

(14) 13 (7)

(6)3

2019 Net divestment &developments

Excl. impact ofcapital activity

Like for like incl.CVAs and admins

Cost savings Tenant incentiveprovisions

Rental debtorsprovisions

IFRS 16 adoption &other

2020

£m

52

Administrative expensesFinancial Year to 31 March 2019

£m2020

£m

Personnel costs 54 50

Share scheme costs (3) (3)

Other administrative expenses 36 33

Total 87 80

Capitalised costs (6) (6)

Total administrative expenses 81 74

On a proportionally consolidated basis including the Group's share of Joint ventures and Funds and excluding non-controlling interests in the Group's subsidiaries.

53

Operating costs metricFinancial Year to 31 March 2019

£m2020

£m

Property operating expenses 45 83

Administrative expenses 80 73

Net fees and other income (10) (13)

Ground rent costs and operating expenses de facto included in rents (9) (16)

EPRA Costs (including direct vacancy costs) 106 127

Gross rental income 576 560

Ground rent costs and operating expenses de facto included in rents (9) (20)

Gross Rental Income (EPRA basis) 567 540

EPRA Cost Ratio (including direct vacancy costs) 18.7% 23.5%

Impairment of tenant incentives and guaranteed rent increases - 20

Adjusted EPRA Cost ratio (including direct vacancy costs and excluding impairment of tenant incentives and guaranteed rent increases) 18.7% 19.8%


54

Reconciliation of Underlying ProfitFinancial Year to 31 March 2019

£m2020

£m

IFRS loss after tax attributable to shareholders (291) (1,027)

Net valuation loss 683 1,389

Profit on disposal of investment and trading properties (77) (18)

Capital financing costs 67 63

Non-controlling interests (41) (99)

Taxation (1) (2)

Underlying Profit and EPRA Earnings 340 306


55

Number of shares As at 31 March 2019

(m)31 March 2020

(m)

IFRS Basic

Weighted average1 971 934

IFRS Diluted


Underlying/EPRA diluted


Year/Period end4 956 932

1 For use in IFRS basic earnings per share.2 For use in IFRS diluted earnings per share. A loss in the current and prior periods results in an anti-dilutive effect, therefore no adjustment has been made for the dilutive effect of share options. 3 For use in Underlying/EPRA diluted earnings per share. 4 For use in EPRA NAV per share and EPRA NNNAV per share.

56

EPRA balance sheet31 March 2019 Group JVs & Funds 31 March 2020

Total properties (£m) 12,316 7,903 3,274 11,177

Adjusted net debt (£m) (3,521) (3,010) (844) (3,854)

Other net liabilities (£m) (146) (50) (60) (110)

EPRA Net Assets (£m) 8,649 4,843 2,370 7,213

Loan to value (LTV)1 28.1% 34.0%

Weighted average interest rate 2.9% 2.5%

Interest cover 3.8x 3.8x

Weighted average maturity of drawn debt (years) 8.1 7.5

1 Group LTV based on Group Properties and net investment in Joint ventures & Funds, and Group net debt.

57

Reconciliation of EPRA NAV & NNNAV31 March 2019 31 March 2020

£m Pence £m pence

IFRS Net Assets 8,689 916 7,147 771

Deferred tax arising on revaluation movements 5 6

Mark to market on derivatives and related debt adjustments 113 141

Adjust to fully diluted on exercise of share options 24 18

Surplus on trading properties 29 13

Non-controlling interests (211) (112)

EPRA NAV 8,649 905 7,213 774

Deferred tax arising on revaluation movements (11) (9)

Mark to market of debt and derivatives (477) (442)

EPRA NNNAV 8,161 854 6,762 726

58

New EPRA Best Practice Recommendations

At 31 March 2020 £m Pence

EPRA NAV 7,213 774

Purchasers’ costs 659

EPRA NRV1 7,872 845

EPRA NAV 7,213 774

Intangibles (11)

EPRA NTA1 7,202 773

EPRA NNNAV 6,762 726

EPRA NDV2 6,762 726

EPRA published its latest Best Practices Recommendations in October 2019 which included three new Net Asset Valuation metrics, namely EPRA Net Reinstatement Value (NRV), EPRA Net Tangible Assets (NTA) and EPRA Net Disposal Value (NDV). These metrics are effective from 1 January 2020 but have been presented below as at 31 March 2020 to provide a comparison to the current measures, EPRA NAV and EPRA NNNAV.

1 The new EPRA guidance states that deferred taxes expected to crystallize should no longer be excluded. The group will conduct a review of such items upon adoption of theguidance but does not expect any resulting EPRA adjustment to be material.2 As the Group’s EPRA NDV is the same as the EPRA NNNAV, there are no reconciling items.

59

Gross and net debt reconciliationAs at 31 March 2020 Group

£mJVs & Funds

£mLess non-

controllinginterests

£m

Total£m

Gross Debt (principal) (3,294) (977) 113 (4,158)

IFRS adjustments:Issue costs and premia 11 2 (1) 12

Fair value hedge adjustments (222) - - (222)

Other items 3 - - 3

IFRS gross debt (3,502) (975) 112 (4,365)Market value of derivatives 62 (9) 1 54

Cash 193 131 (8) 316

IFRS net debt (3.247) (853) 105 (3,995)

Adjustments:Remove market value of derivatives (52)

Remove fair value hedges 196

Other adjustments (3)

Adjusted net debt (3,854)

60

Loan to value (LTV)As at

31 March2019

£m

Valuation movement

Acquisitions Capital spend

Disposals Sharebuyback

Other As at 31 March

2020£m

Total properties 12,316 (1,304) 119 386 (371) - 11 11,157

Other investments & PPE

151 (12) - 11 (19) - - 131

LTV assets 12,467 (1,316) 119 397 (390) - 11 11,288

Adjusted net debt 3,521 - 119 388 (382) 125 83 3,854

Other (19) - - - - - 7 (12)

LTV liabilities 3,502 - 119 388 (382) 125 90 3,842

LTV 28.1% 3.4% 0.7% 2.1% (2.2%) 1.0% 0.9% 34.0%


61

Debt metricsProportionally Consolidated 31 March 2019 31 March 2020

Loan to value (LTV) 28.1% 34.0%



Weighted average maturity of drawn debt 8.1yrs 7.5yrs

Group 31 March 2019 31 March 2020

Loan to value (LTV) 22.2% 28.9%

Available undrawn facilities £1.5bn £1.1bn



Senior unsecured credit rating (Fitch) A A

62

-

200

400

600

800

1,000

1,200

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038

Financial Year ending 31 March

Debt maturity£m

Bank RCFs Undrawn (Unsecured)Bank RCFs Drawn (Unsecured)Debenture & Loan Notes (Secured)Convertible Bond (Unsecured)Sterling Bond (Unsecured)US Private Placements (Unsecured)Funds – Bank Drawn (Secured)JVs – Securitisations (Secured)

On a proportionally consolidated basis including the Group's share of joint ventures and funds and excluding non-controlling interests in the Group's subsidiaries. Includes post year end financing activity: 1. extension of RCF to FY 2026, 2. refinance of HUT bank loan to FY 2024

63

Debt financing – diverse profile

• Issued £100m 2034 USPP floating rate note

• Completed first ESG linked RCF at £450m with initial 5 year term

• Extended additional £925m of committed bank facilities by 1 year

• No requirement to refinance until 2024

• LTV increased by 590bps to 34.0%2

– Valuation declines +340bps– Development spend +210bps

• Weighted average interest rate new low of 2.5%2

• Weighted average drawn debt term maturity 7.5 years2

• Post year end, refinanced HUT bank loan to December 2023 and extended £525m of RCFs by a further year

£4.2bn Drawn Debt1 (31 March 2020)

1 Proportionally consolidated. HUT’s debt shown at our share (£0.4bn) within Funds.2 On a proportionally consolidated basis

£0.7bn

£0.8bn

£0.4bn

£0.3bn

£0.6bn

£1.0bn

£0.4bnBank RCFs Drawn US Private PlacementsConvertible Bond Sterling Bond Debenture & loan notesJVs SecuritisationsFunds LoansUnsecured Secured

64

Portfolio valuation by sectorAt 31 March 2020 Group JVs & Funds Total Change %1

£m £m £m H1 H2 FY

West End 4,151 53 4,204 (0.1) 1.5 1.4

City 300 2,269 2,569 1.3 2.5 3.7

Offices 4,451 2,322 6,773 0.4 1.9 2.3 Retail Parks 1,115 724 1,839 (12.4) (18.8) (28.7)Shopping Centre 753 757 1,510 (11.8) (19.8) (29.2)Superstores 89 - 89 (1.5) (7.7) (4.7)Department Stores 33 - 33 (10.5) (33.3) (40.3)High Street 133 1 134 (9.7) (11.0) (19.8)Leisure 249 19 268 0.8 (8.4) (7.1)Retail 2,372 1,501 3,873 (10.7) (18.2) (26.1)Residential2 147 - 147 (2.1) (0.6) (2.7)Canada Water 364 - 364 12.4 (1.6) 9.8Total 7,334 3,823 11,157 (4.3) (6.3) (10.1)Standing Investments 6,593 3,432 10,025 (5.2) (7.4) (12.0)

Developments 741 391 1,132 4.6 2.3 6.5

On a proportionally consolidated basis including the group's share of joint ventures and funds1 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 sales2 Standalone residential

65

Valuation movement – Offices

Financial Year to 31 March 2020 Valuation £m

Change £m

Change%1

Yield movementBps2

ERV movement%2

West End 4,204 59 1.4 - 2.4

City 2,569 92 3.7 (14) 4.5

Offices 6,773 151 2.3 (4) 3.2

Campuses represent 81% of the Offices portfolio

1 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 sales2 Excluding committed developments, assets held for development and residential assets

66

Valuation movement – RetailFinancial Year to 31 March 2020 Valuation

£mChange

£m Change

%1Yield movement

bps2ERV movement

%2

Retail Parks 1,839 (755) (28.7) +117 (13.6)

Shopping Centre 1,510 (623) (29.2) +99 (10.2)

Total 3,349 (1,378) (28.9) +109 (12.1)

Other 524 (99) (11.2) +46 (8.4)

Retail 3,873 (1,477) (26.1) +101 (11.7)

1 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 sales2 Excluding committed developments, assets held for development and residential assets

Shopping Centre and Retail Parks represent 86% of the Retail portfolio

67

Portfolio net yields1,2

As at 31 March 2020 EPRA net initial

yield %

EPRA topped up net initial

yield %3

Overall topped up net initial

yield %4

Net equivalent

yield %

Net equivalent

yield movement

bps

Net reversionary

yield %

ERV Growth

%5

West End 3.5 4.1 4.1 4.3 - 4.8 2.4City 3.2 4.0 4.0 4.5 (14) 5.3 4.5Offices 3.4 4.1 4.1 4.4 (4) 5.0 3.2Retail Parks 7.0 7.2 7.3 7.0 117 6.8 (13.6)Shopping Centre 6.1 6.2 6.3 6.4 99 6.4 (10.2)Superstore 6.9 6.9 6.9 5.7 38 5.6 (9.8)Department Store 15.6 15.6 22.9 9.2 185 10.4 (19.8)High Street 3.8 4.0 4.0 5.5 57 5.9 (9.8)Leisure & Other 5.3 5.4 6.0 5.8 22 5.1 (1.2)Retail 6.5 6.6 6.9 6.6 101 6.5 (11.7)Canada Water 3.4 3.4 3.4 4.0 25 4.0 (5.8)Total 4.6 5.1 5.2 5.2 38 5.5 (4.7)

On a proportionally consolidated basis including the group's share of joint ventures and funds1 Including notional purchaser's costs2 Excluding committed developments, assets held for development and residential assets3 Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of rental growth4 Including fixed/minimum uplifts (excluded from EPRA definition)5 As calculated by IPD

68

Portfolio weightingAs at 31 March 2020 2019

%2020

%2020

£m

West End 33.0 37.7 4,204

City 18.2 23.0 2,569

Offices 51.2 60.7 6,773

Retail Parks 21.0 16.5 1,839

Shopping Centre 17.2 13.5 1,510

Superstores 2.7 0.8 89

Department Stores 0.6 0.3 33

High Street 1.4 1.2 134

Leisure 2.4 2.4 268

Retail 45.3 34.7 3,873

Residential1 1.0 1.3 147

Canada Water 2.5 3.3 364

Total 100.0 100.0 11,157

Of which London 61% 71% 7,878

On a proportionally consolidated basis including the group's share of joint ventures and funds1 Standalone residential

69

Lease length and occupancyAs at 31 March 2020 Average Lease Length (yrs) Occupancy Rate (%)

To Expiry To Break EPRA Occupancy Occupancy1,2,3

West End 6.4 5.4 97.6 97.7

City 7.5 6.3 85.4 96.6

Offices 6.8 5.7 92.9 97.3

Retail Parks 6.8 5.5 94.1 96.1

Shopping Centre 6.6 5.2 94.2 95.6

Superstores 6.9 6.8 100.0 100.0

Department Stores 18.1 9.1 97.9 97.9

High Street 4.7 4.0 91.7 92.1

Leisure 14.6 14.3 93.1 93.1

Retail 7.3 5.9 94.2 95.7

Canada Water 4.9 4.7 97.7 97.9

Total 7.0 5.8 93.6 96.6

1 Space allocated to Storey is shown as occupied where there is a Storey tenant in place otherwise it is shown as vacant. Total occupancy would rise from 96.6% to 97.1% if Storey space were assumed to be fully let. 2 Including accommodation under offer or subject to asset management3 Where occupiers have entered administration or CVA but are still liable for rates, these are treated as occupied. Reflecting units currently occupied but expected to become vacant, then the occupancy rate for Retail would reduce from 95.7% to 94.7%, and total occupancy would reduce from 96.6% to 96.0%

70

Annualised rent & estimated rental value (ERV)As at 31 March 2020 Annualised Rents

(Valuation Basis) £m1ERV

£mAverage Rent

(£psf)

Group JVs & Funds Total Total Contracted2 ERV

West End3 136 2 138 191 62.8 69.4

City3 6 64 70 118 50.3 63.1Offices3 142 66 208 309 58.0 66.9Retail Parks 91 58 149 140 25.0 22.9Shopping Centre 62 51 113 116 29.7 29.9Superstores 7 - 7 5 21.0 17.1Department Stores 6 - 6 4 6.6 4.6High Street 6 - 6 9 13.1 18.6Leisure 14 1 15 15 17.1 16.3Retail 186 110 296 289 24.1 23.0Residential4 4 - 4 4 44.7 37.4Canada Water5 8 - 8 9 17.7 20.5Total 340 176 516 611 30.9 33.4

On a proportionally consolidated basis including the group's share of joint ventures and funds, excluding committed, near term and assets held for development1 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 uplift2 Annualised rent, plus rent subject to rent free3 £psf metrics shown for office space only4 Standalone residential5 Reflects standing investment only

71

Rent subject to open market rent reviewFor the year to 31 March 2021 2022 2023 2024 2025 2021–23 2021–25

As at 31 March 2020 £m £m £m £m £m £m £m

West End 17 9 23 7 16 49 72

City 11 - - 15 11 11 37

Offices 28 9 23 22 27 60 109

Retail Parks 17 11 14 6 6 42 54

Shopping Centre 12 7 12 7 4 31 42

Superstores - - - 1 3 - 4

Department Stores - - 1 2 - 1 3

High Street - - 1 - - 1 1

Leisure - - - - 1 - 1

Retail 29 18 28 16 14 75 105

Residential - 1 - - - 1 1

Canada Water1 - - - - - - -

Total 57 28 51 38 41 136 215

On a proportionally consolidated basis including the group's share of joint ventures and funds excluding committed, near term and assets held for development1 Reflects standing investment only

72

Rent subject to lease break or expiry For the year to 31 March 2021 2022 2023 2024 2025 2021-23 2021-25


West End 13 29 17 14 16 59 89

City 12 3 4 12 6 19 37

Offices 25 32 21 26 22 78 126

Retail Parks 17 11 16 25 12 44 81

Shopping Centre 14 14 14 14 7 42 63

Superstores - - 2 - - 2 2

Department Stores - 3 - - - 3 3

High Street 2 1 1 1 1 4 6

Leisure - - - - - - -

Retail 33 29 33 40 20 95 155

Residential 3 - - - - 3 3

Canada Water1 1 1 1 2 - 3 5

Total 62 62 55 68 42 179 289

% of contracted rent 10.9 10.8 9.6 11.8 7.4 31.3 50.5

On a proportionally consolidated basis including the group's share of joint ventures and funds excluding committed, near term and assets held for development1 Reflects standing investment only

73

Contracted rental increases (cash flow basis) For the year to 31 March 2021 2022 2023 2024 2025 2021-23 2021-25


Expiry of rent free periods 29 15 4 - - 48 48

Fixed uplifts (EPRA basis) 1 - - - - 1 1

Fixed & minimum uplifts - 1 3 - 2 4 6

Total 30 16 7 - 2 53 55

On a proportionally consolidated basis including the group's share of joint ventures and funds excluding committed, near term and assets held for development

74

Total Property Return (as calculated by IPD)12 months to 31 March 2020 Offices Retail Total% British Land IPD British Land IPD British Land IPD

Capital Return 2.5 (0.5) (27.3) (14.5) (10.3) (4.8)

– ERV Growth 3.2 1.3 (11.7) (5.8) (4.7) (1.0)

– Yield Movement1 (4 bps) (2 bps) 101 bps 59 bps 38 bps 18 bps

Income Return 3.1 3.8 6.2 5.4 4.3 4.5

Total Property Return 5.7 3.3 (22.6) (9.8) (6.4) (0.4)

1 Net equivalent yield movement

75

De-risked development pipeline focused on campuses

1 Finsbury Avenue 287,000 sq ftPC’d Q1 2019

Recently Completed & Committed Developments

1 Broadgate538,000 sq ft

135 Bishopsgate335,000 sq ftPC’d Q1 2020

Near term pipeline Medium term pipeline excl. Canada Water

Norton Folgate336,000 sq ft

• ERV of £62m• 88% pre-let

• ERV of £49m• All schemes consented

1 Triton Square366,000 sq ft

Completion Q2 2021

Aldgate Place, Phase 2

133,000 sq ft

Medium term pipeline excl. Canada Water

2-3 Finsbury Avenue 563,000 sq ft

5 Kingdom Street438,000 sq ft

Eden Walk, Kingston 452,000 sq ft

100 Liverpool Street 524,000 sq ft

Completion Q3 2020

76

As at 31 March 2020

Sector BLShare

Sqft

PCCalendar

Year

CurrentValue

Cost toCome

ERV Let & Under Offer

% '000 £m £m1 £m2 £m

1 Finsbury Avenue Office 50 287 Q1 2019 171 - 8.3 7.0

135 Bishopsgate Office 50 335 Q1 2020 214 - 9.7 8.7

Plymouth (Leisure) Retail 100 108 Q4 2019 26 2 1.8 1.2

Total Completed in the Year 730 411 2 19.8 16.9

100 Liverpool Street Office 50 524 Q3 2020 378 27 19.3 15.4

1 Triton Square3 Office 100 366 Q2 2021 385 49 22.6 21.8

Total Committed 890 763 76 41.9 37.2

Other Capital Expenditure4 57

On a proportionally consolidated basis including the group's share of joint ventures and funds (except area which is shown at 100%)1 From 1 April 2020. Cost to come excludes notional interest as interest is capitalised individually on each development at our capitalisation rate2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives)3 ERV let & under offer of £21.8m represents space taken by Dentsu Aegis. As part of this letting, Dentsu Aegis have an option to return their existing space at 10 Triton Street in 2021. If this option is exercised, there is an adjustment to the rent free period in respect of the letting at 1 Triton Square to compensate British Land4 Capex committed and underway within our investment portfolio relating to leasing and asset management

Recently Completed & Committed developments

77

Near term development pipelineAs at 31 March 2020

Sector BLShare

Sq ft Earliest Start on

Site

CurrentValue

Cost toCome

ERV Let &Under Offer

Planning Status

% '000 Calendar Year

£m £m1 £m2 £m

Near Term Pipeline

Norton Folgate Office 100 336 Q3 2020 95 280 22.0 - Consented

1 Broadgate Office 50 538 Q2 2021 96 230 20.0 - Consented

Aldgate Place, Phase 2 Residential 100 133 Q4 2020 37 95 7.0 - Consented

Total Near Term 1,007 228 605 49.0 -

Other Capital Expenditure3 22

On a proportionally consolidated basis including the group's share of joint ventures and funds (except area which is shown at 100%)1 From 1 April 2020. Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 3 Forecast capital commitments within our investment portfolio over the next 12 months relating to leasing and asset enhancement

78

Medium term development pipeline

1 Planning consent for previous 240,000 sq ft scheme2 On drawdown of the Master Development Agreement, ownership reduces to 80% with LBS owning 20%. LBS ownership will adjust over time depending on level of investment by Southwark

As at 31 March 2020 Sector BL Share Sq ft Planning status

% '000

Medium term Pipeline

5 Kingdom Street1 Office 100 438 Submitted

2-3 Finsbury Avenue Office 50 563 Consented

Eden Walk Retail & Residential Mixed Use 50 452 Consented

Ealing – 10-40 The Broadway Retail 100 303 Pre-submission

Gateway Building Leisure 100 105 Consented

Canada Water2 Mixed Use 100 5,000Resolution to grant

planning

Total Medium Term 6,861

79

Estimated future development spend and capitalised interest As at 31 March 2020 PC

Calendar Year

Cost to Come £m (excluding notional interest) – 6 months breakdown

Sept-20 Mar-21 Sept-21 Mar-22 Sept-22 Mar-23 Sept-23 Mar-24 Total

Plymouth (Leisure) Q4 2019 2 - - - - - - - 2

Total Completed 2 - - - - - - - 2

100 Liverpool Street Q3 2020 9 18 - - - - - - 27

1 Triton Square Q2 2021 18 26 5 - - - - - 49

Total Committed 27 44 5 - - - - - 76

Norton Folgate 2023 10 30 45 60 67 40 28 - 280

1–2 Broadgate 2025 4 4 22 19 29 35 36 32 181

Aldgate Place, Phase 2 2023 5 10 24 28 20 6 1 1 95

Total Near Term 19 44 91 107 116 81 65 33 556

Indicative Interest Capitalised on above at attributable rates 4 3 3 3 4 5 4 2

80

Canada Water – Illustrative Scheme

Masterplan First detailed plots

Resolution to grant planning received 30th September 2019

Total NIA (sq ft) 5.0m 0.6m

Commercial (sq ft) 2.1m 0.3m

Retail & Leisure (sq ft)

0.7m 0.1m

New Homes (units) 3,000 265

A1

A2

K1

L1

H1

H2

H3

L2

D1 D2

M1

Note: The figures above are indicative and are likely to change as development plans evolve

Buildings highlighted above reflect indicative First Major Scheme, totaling 1.9m sq ft

81

2010 2011 2012 2014 2015 2016 2017 2018 20192013 2020

Canada Water: key milestones and timeline

Earliest possible start on site

Acquisition of 50% of Surrey Quays shopping centre23 acres

Conditional agreement to acquire Printworks

14.5 acres

Remaining 50% of Surrey Quays shopping centre acquired23 acres

Surrey Quays leisure park acquired 8.5 acres

MDA signed with Southwark Council Planning application submitted

Resolution to grant planning Outline masterplanDetailed first phase

82

0.0

2.0

4.0

6.0

8.0

10.0

12.0

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Central London development pipeline – delayed by Covid-191

Note: Forecast reflects CBRE’s estimate of earliest completions. Central London comprises the City, Docklands, Midtown, Southbank and West End areas1 CBRE Covid-19 impact (assumes completion of all space under construction delayed by six months and only 25% of proposed space will complete within 5 years).

Source: CBRE

m sq ft

5.0m4.2m

CompletedU/C Pre-letPipeline Pre-letU/C – SpeculativePotential Speculative10 year average new and under-construction take-up10 year average development completions

Q2 2020

83

0

2

4

6

8

10

12

14

16

18

20

1985 1990 1995 2000 2005 2010 2015 Q1 2020

Vacancy Central London

5.2%

3.3%

Source: CBRE (historic)

West End

West End 10 year average

City

City 10 year average

West End & City Vacancy Rates

84

2020 Sustainability Targets: FY20 performance

FY20 2020 Target

FutureproofingCapital efficiency

Achieved: 100% 100% of current new developments on track to achieve BREEAM Excellent/Very Good Achieved: 55% 55% improvement in landlord energy efficiency vs 2009 baseline96% 100% of electricity to come from renewable sourcesAchieved: 73% 55% improvement in carbon efficiency vs 2009 baselineAchieved: 16% 15% reduction capital carbon emissions vs concept (embodied carbon)2 Trial 3 visible interventions to improve local air quality1% to landfill Zero waste to landfill

Skills and opportunityExpert people

Achieved: 1,745 1,700 people supported into employment (cumulative)2.1% 3% of BL workforce and priority tier 1 and 2 suppliers to be apprentices 96% 100% strategic suppliers signed up to new code of conductPiloted Pilot a Living Wage Zone at a London campus100% / 78% 100% BL and supplier workforce at managed assets paid Living Wage

WellbeingCustomer orientation

On track Achieve WELL Certification on 100 Liverpool StreetAchieved Establish and pilot wellbeing specification for retail developments Achieved Define and trial a measurement of office productivity

Achieved Research & publish on how development design impacts public health

CommunityRight places

94% Fully implement Local Charter at staffed assets and major developments19% 20% employee skills-based volunteering68% 90% employee volunteering

85

FY 2019 performance

Sustainability Indices Performance

MSCI disclaimer available http://www.britishland.com/sustainability/performance/benchmarks

Global Real Estate Sustainability Benchmark

2019: Green star for 10th year

FTSE4Good2019: 98th percentile

Sustainalytics ESG Ratings

2019: 96th percentile

Carbon Disclosure Project2019: B2018: A-

EPRA Sustainability Reporting Awards

2019: Gold for 8th year

MSCI ESG Ratings2019: AAA rating

Other benchmarks and awards

http://www.britishland.com/sustainability/performance/benchmarks

86

DisclaimerThe information contained in this presentation has been extracted largely from the Full Year Results Announcement for the year ending on 31 March 2020. For the purpose of this document, references to "presentation" shall be deemed to include this document, the oral briefing provided by British Land on this document, the question-and-answer session that follows the oral briefing, and any materials distributed in connection with this document or the oral briefing through The Regulatory News Service. This document is incomplete without reference to, and should be viewed solely in conjunction with, the wider presentation.

All statements of opinion and/or belief contained in this presentation and all views expressed represent British Land's own current assessment and interpretation of information available to them as at the date of this presentation. Please note that this presentation may contain or incorporate by reference certain ‘forward-looking’ statements. These forward-looking statements include all matters that are not historical fact. Such statements reflect current views, intentions, expectations, forecasts and beliefs of British Land concerning, among other things, our markets, activities, projections, strategy, plans, initiatives, objectives, performance, financial condition, liquidity, growth and prospects, as well as assumptions about future events, and appear in a number of places throughout this presentation. Such ‘forward-looking’ statements can sometimes, but not always, be identified by their reference to a date or point in the future, the future tense, or the use of ‘forward-looking’ terminology, including terms such as ‘believes’, ‘considers’, ‘estimates’, ‘anticipates’, ‘expects’, ‘forecasts’, ‘intends’, ‘continues’, ‘potential’, ‘due’, ‘potential’, ‘possible’, ‘plans’, ‘seeks’, ‘projects’, ‘budget’, ‘goal’, ‘guidance’, ‘trends’, future’, ‘outlook’, ‘schedule’, ‘budget’, ‘target’, ‘aim’, ‘may’, ‘likely to’, ‘will’, ‘would’, ‘could’, ‘should’ or similar expressions or in each case their negative or other variations or comparable terminology.

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Other than in accordance with our legal and regulatory obligations (including under the UK Financial Conduct Authority’s Listing Rules and the Disclosure Guidance and Transparency Rules, the EU Market Abuse Regulation and the requirements of the Financial Conduct Authority and the London Stock Exchange), British Land does not intend or undertake any obligation to update or revise publicly forward-looking statements to reflect any changes in British Land’s expectations with regard thereto or any changes in events, conditions, circumstances or other information on which any such statement is based (regardless of whether those forward-looking statements are affected as a result). Important factors that could cause actual results, performance, developments or achievements of British Land to differ materially from any outcomes or results expressed in or implied by such forward-looking statements include (among other things) business, economic and regulatory changes, as well as those risks which are set out in the ""Effective Risk Management" section of British Land's latest annual report and accounts (which can be found at www.britishland.com) (as updated or supplemented by the "Risk Management and Principal Risks" and the "Forward-looking statements" sections of 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, or be taken as implying that the earnings of British Land for the current year or future years will necessarily match or exceed the historical or published earnings of British Land.

This presentation is published solely for information purposes, and is not to be reproduced or distributed, in whole or in part, by any person other than British Land. The information, statements and opinions contained in this presentation do not constitute or form part of an offer or invitation to sell or issue, or the solicitation of an offer to subscribe for or buy, or any recommendation or advice in respect of, any security or financial instrument, 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 part of this presentation, nor the fact of its distribution, shall form the basis of or be relied on for any purpose, including in connection with any contract or engagement or investment decision in any jurisdiction, and recipients are cautioned against relying on this presentation. No representation or warranty, either express or implied, is given (whether by British Land or any of its associates, directors, officers, employees or advisers) in relation to the accuracy, completeness, fairness or reliability of the information contained herein, including as to the completeness or accuracy of any forward-looking statements expressed or implied or the basis on which they were prepared, or their achievement or reasonableness, or that the objectives of British Land will be achieved, and liability or responsibility (including of British Land, its shareholders, advisers or representatives) howsoever arising in connection with this presentation is therefore expressly disclaimed (including in respect of any error, omission or misstatement, or for any loss, howsoever arising, from the use of this presentation).

Certain of the information contained in this presentation has been obtained from published sources prepared by other parties. Certain other information has been extracted from unpublished sources prepared by other parties which have been made available to British Land. British Land has not carried out an independent investigation to verify the accuracy and completeness of such third party information. No responsibility is accepted by British Land or any of associates, directors, officers, employees or advisers for the accuracy or completeness of such information. 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. All opinions expressed in this presentation are subject to change without notice and may differ from opinions expressed elsewhere. This presentation has been presented in £, £ms and £bns. Certain totals and change movements are impacted by the effect of rounding.

Documents

Full Year Results Presentation - British Land/media/Files/B/... · Presentation. Year ended 31 March 2020. Introduction . Chris Grigg, CEO. 2 • London offices leasing well – 946,000