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WWW.BRITISHLAND.COM
MARCH 2014
INVESTOR PRESENTATION
1
INTRODUCTION – A LEADING UK REIT
• £17.1bn owned and managed
portfolio
• Focused on UK Retail and
London Offices
• Delivering superior total returns
by Creating Places People
Prefer
£17.1bn owned and managed portfolio
17%
22%
4% 5%
17%
12%
23%
City of London West End
Other Department stores
Shopping Centres Superstores
Retail Parks
LONDON
OFFICES
UK RETAIL
2
KEY POINTS
Strongly
performing
business
• Strong recent results
• Continued outperformance 1 Executing
smartly,
according
to plan
• Successfully deployed equity placing proceeds
• Delivering 2010 developments and replenishing the pipeline
• Repositioning Retail portfolio 2
Positive
about the
future
• Increased economic and investment activity
• Increased exposure to London/South East and replenished
development programme 3
Clear
priorities
• Driving growth from standing investments
• Delivering returns from developments
• Continued Retail repositioning 4
3
CONSISTENTLY OUTPERFORMING THE MARKET
• Significant outperformance vs IPD, +9.2% since September 2010
(+260bps pa)
• Outperformed IPD on a 5 year (+230bps pa) and 10 year basis
(+70bps pa)
HY to 30 September 2011 2012 2013 H1 2014
Total Accounting Return 17.7% 9.5% 4.6% 6.8%
Total Property Return 13.1% 8.3% 6.3% 5.5%
Total Property Return vs IPD +180bps +200bps +310bps +60bps
4
STRONGLY IMPROVING OPERATING PERFORMANCE IN
BOTH OFFICES AND RETAIL
• Good first half results, business performing well
• Continued improvement in Q3
– Like-for-like occupancy +30 bps to 97.1%
– Investment lettings/renewals +5.3% Vs ERV (Retail +3.3%, Office +6.8%)
HY to 30 September Change
UK Valuation £11.2bn +2.8%
Capital Returns vs IPD +100bps
NAV per Share 623p +4.5%
Dividend per Share 13.5p +2.3%
6 month Total Accounting Return 6.8%
5
POSITIVE PERFORMANCE DRIVEN BY…
• Strong position in retail large and high quality retail portfolio
• Increasing focus on London/South East >60% of portfolio in South East
• Successful asset management good leasing volumes; ahead of ERV
• £1.2bn development programme started in 2010 IRRs >30%
• Flexible and low cost finance 4.2% lowest of UK REITs
• Ability to secure attractive value accretive deals acquired £1.4bn of assets over the last 2 years
• Ability to sell well selling mature assets; £1.3bn of disposals over the last 2 years
6
-80
20
120
220
320
Asset Management Development Yield Movement Total Valuation
VALUATION PERFORMANCE
UK Valuation Drivers £m
H1 2012/13 H2 2012/13 H1 2013/14
£22m £90m £309m TOTAL VALUATION MOVEMENT
7
STRONGLY PERFORMING BUSINESS: RETAIL
Marked improvement in Retail: strengthening capital returns
• Occupancy up to 98.4%; rents in admin low at 0.2% (0.9% in March 2013)
• Lettings ahead of ERV (3.3% in Q3, 3.8% in H1)
• Continue to outperform on footfall: flat in Q3 vs decline of 3% in broader market
Capital Returns (%) H1 2012/13 H2 2012/13 H1 2013/14
Retail Parks (2.3) (0.8) 1.0
Superstores 0.5 (1.1) 2.1
Shopping Centres (0.3) (1.0) 0.3
Department Stores (0.6) 3.2 6.5
Leisure 0.0 (0.2) 2.0
UK Retail (1.0) (0.6) 1.5
8
CONTINUED RETAIL POLARISATION
Retail Occupancy Retail ERV Growth
Indexed March 2010 = 100 %
97.4 98.0
94.7 95.3
88.3 88.9
Mar 13 Sep 13
BL All Retail IPD All Retail IPD Secondary
85
90
95
100
105
BL All Retail IPD All Retail IPD Secondary
Mar
10
Sep
10
Mar
11
Sep
11
Mar
12
Sep
12
Mar
13
Sep
13
9
STRONGLY PERFORMING BUSINESS: OFFICES
Step up in letting activity across
investment and developments
• Encouraging interest from a broad range of
new and existing occupiers
• 579,000 sq ft of lettings/extensions year to
date; 7.9% ahead of ERV
• 30 Brock St, Regent’s Place fully let 3 months
after practical completion
– Secures £18m of rent for 16 years
• Leadenhall 52% pre-let
– Latest letting to Servcorp at £72.50psf for 15 year
term (c£5psf ahead of ERV)
– RFPs out for a further 80,000 sq ft
10
EXECUTING SMARTLY AND ACCORDING TO PLAN:
EQUITY PLACING
• Raised £493m of equity in March 2013 at 550p per share
• Fully deployed ahead of schedule
• £790m acquisition spend including £100m of development opportunities
• NIY of 5.7% on £690m of income producing investments
• £230m of prospective development spend
• Earnings neutral in H1; 0.5p accretive in FY14
Acquisition Spend
Prospective
Development Spend
£m £m
Paddington Central 470 180
Ealing Broadway Shopping Centre 143 -
Surrey Quays JV buy-out 48 24
Other Acquisitions 126 26
Investments 787 230
11
DEPLOYMENT OF EQUITY PLACING:
PADDINGTON CENTRAL
Acquired in July for £470m
Fully let yield of 6.2%
Significant opportunity to
create value from asset
management and
development
Third of vacant office
space already let at terms
ahead of ERV on
acquisition
2.3% valuation increase by
September 2013
Initial design and master
planning underway at 4
and 5 Kingdom Street
development sites
12
DELIVERING RENTAL GROWTH AT REGENT’S PLACE
70
65
60
55
50
45
10/20 Triton St 20 Triton St 10/30 Brock Street
Debenhams
£
PSF
2009/10 2010/11 2011/12 2012/13 2013/14
42.50psf
70psf
Manchester
City FC
13
5 BROADGATE EC2
£19.2m ERV 100% pre-let
BROADGATE CIRCLE, EC2
£1.2m ERV; unlet
MARBLE ARCH HOUSE, W1
£3.9m ERV; unlet; 90% resi pre-
sold
CO
MP
LE
TE
D
COMPLETING 2010 LONDON DEVELOPMENTS
199 BISHIOPSGATE EC2
£3.5m ERV; 55% let
CO
MP
LE
TE
D
10-30 BROCK STREET, NW1
£20.1m ERV; 91% let; 80% resi sold
CO
MP
LE
TE
D
10 PORTMAN SQUARE, W1
£9.7m ERV; 51% let
CO
MP
LE
TE
D
• 817,000 sq ft completed and 309,000 sq ft pre-lets agreed/under offer this year; now 70% pre-let
• Good demand for Residential; pre-sales secured above valuation; now over 80% pre-sold
LA
TE
2014
39 VICTORIA STREET, SW1
£4.9m ERV; unlet
EA
RL
Y 2
015
LEADENDHALL EC3
£18.6m ERV; 52% pre-let
CO
MP
LE
TE
D
MID
2014
14
DELIVERING STRONG RETURNS FROM
2010 OFFICE DEVELOPMENT PROGRAMME
• Profit on cost over 40%; IRRs of c30%
65 133 167
216 297
400 192
188 192
175
126
90
Mar 11 Sep 11 Mar 12 Sep 12 Mar 13 Sep 13
Profit Taken Profit to Come
£257m
£321m £359m
£391m £423m
£490m £m
15
REPLENISHING LONDON DEVELOPMENT PIPELINE
• 2.1m sq ft next phase London and retail development
(recently committed and near-term)
• £1.1bn total development cost
• Estimated profit to come of around £275m
Clarges
Estate
The
Hempel
Aldgate
Phase 1
Yalding
House
4 Kingdom
Street
Shoreditch
Estate
5 Kingdom
Street
2014
458,000 sq ft 2015
562,000 sq ft Now on site
1,044,000 sq ft
NEAR-TERM PIPELINE RECENTLY COMMITTED
16
CONTINUING TO REPOSITION RETAIL PORTFOLIO
• £304m of UK retail assets sold; Basildon Eastgate sold recently for £89m,
ahead of valuation
• £385m bought year to date; SouthGate, Bath and HUT units
• £200m of disposals under offer/in the market
Retail Asset Sales (Year to Date) No of Assets Sale Price
Retail Parks 4 £81m
Foodstores 5 £29m
Shopping Centres 3 £183m
High Street 1 £11m
Total 13 £304m
17
INVESTING IN THE RIGHT RETAIL LOCATIONS:
SOUTHGATE, BATH
430,000sq ft
Top 10 Bath as a UK
Tourist Destination
18m
Visitors pa
50% acquired for
£101m
18
WELL PLACED AND POSITIVE ABOUT THE FUTURE
• Improving sentiment across key markets
– London to remain strong
– Higher rents in offices
– Decent read through for development and residential
– Improving confidence in retail
– Improving outlook for right type of retail assets
• Expect to continue to benefit from our actions
– Increased exposure to London and the South East
– Investment in up and coming London locations
– Replenished development pipeline with optionality
– Increased focus on locally preferred retail assets
19
£0.6bn
£1.7bn
£1.0bn
£0.7bn
£0.4bn
£1.7bn
£0.9bn
FINANCIAL POSITION A CORE STRENGTH OF
BRITISH LAND
• Average interest rate of 4.2%
• 75% fixed over 5 years
• Average maturity of 9 years
• £1.3bn of facilities in place for
more than two years
• £710m of new financing
arranged year to date
• £2.7bn of debt raised since
March 2011
• LTV 41.8% at December 2013
(based on September valuations)
Diverse Debt Profile (30 September 2013)
Drawn Unsecured Debt-undrawn
Debentures & Loan Notes
US Private Placements
Convertible Bonds Securitisations
Other JV & funds debt
20
CLEAR PRIORITIES
Delivering
returns from
developments
Driving
growth from
standing
investments
Continued
Retail
repositioning
• Completing and letting up our 2010 programme
• Starting on site on recently committed developments
• Taking Paddington and Shoreditch through planning
• Selectively adding to the development pipeline
• Focusing on leasing and asset management
• Bedding down new assets such as Ealing Broadway and
Southgate, Bath
• Continued sale of more mature retail assets
• Disciplined acquisitions
1
2
3
APPENDICES
22
MAJOR HOLDINGS
As at 30 September 2013
(excl. developments under construction)
BL Share
%
Sq ft
000’s
Rent
£m pa1 Occupancy
Rate %2 Lease Length
yrs3
1 Broadgate, London EC2 50 3,963 177 97.0 7.6
2 Regent's Place, London NW1 100 1,589 67 97.6 9.6
3 Meadowhall Shopping Centre, Sheffield 50 1,374 82 97.4 8.4
4 Sainsbury’s Superstores 52 2,864 67 100.0 15.7
5 Tesco Superstores 50 2,687 61 100.0 14.6
6 Paddington Central 100 609 22 92.9 10.7
7 Teeside Shopping Park, Stockton-on-Tees 100 451 14 100.0 7.5
8 Drake Circus Shopping Centre, Plymouth 100 570 15 98.7 6.7
9 Debenhams, Oxford Street 100 363 10 100.0 25.5
10 Portman Square, W14 100 132 5 51.0 12.5
1 Annualised contracted rent including 100% of Joint Ventures & Funds 2 Includes accommodation under offer or subject to asset management 3 Weighted average to first break 4 Development reached practical completion in May 2013
23
UK PORTFOLIO WEIGHTING
As at 30 September 2013 (%) 2012 2013 (Current) 2013 (Pro forma)¹
Retail parks 24.5 22.9 20.8
Superstores 12.6 11.7 10.9
Shopping centres 17.6 17.3 15.7
Department stores 4.6 4.6 4.1
Leisure 3.0 2.8 2.6
UK Retail 62.3 59.3 54.1
City 17.1 16.5 17.3
West End 18.4 22.0 25.3
Provincial 0.8 0.8 0.7
All Offices 36.3 39.3 43.3
Residential2 1.4 1.4 2.6
All Offices & Residential 37.7 40.7 45.9
UK Total 100.0 100.0 100.0
London & South East 54.2 57.6 61.4
Rest of UK 45.8 42.4 58.6
Table shows UK total, excluding assets held in Europe. 1 Pro forma for committed developments at estimated end value (as determined by the Group’s external valuers) and disposals completed/exchanged post half end 2 Stand-alone residential
24
TOP 20 CUSTOMERS & CUSTOMER SPLIT BY INDUSTRY
As at 30 September 2013 % of Total Rent
Tesco plc 7.3
Sainsbury Group 5.9
Debenhams 5.7
UBS AG 3.2
Home Retail Group 2.7
Kingfisher (B&Q) 2.6
HM Government 2.5
Arcadia Group 2.1
Next plc 2.1
Virgin Active 2.1
Spirit Group 1.6
Alliance Boots 1.5
Herbert Smith 1.4
DSG International 1.3
Marks & Spencer Plc 1.2
Royal Bank of Scotland plc 1.2
Hutchison Whampoa 1.2
Asda Group 1.1
New Look 1.0
House of Fraser 1.0
Customer Split by Industry (%)
15%
18%
19% 7%
8%
14%
11%
2% 6%
Supermarkets Fashion & Beauty
General Retail DIY
Food / Leisure Banks and Financial Services
Professional & Corporate Government
Other Businesses
25
UK PORTFOLIO VALUATION BY SECTOR
Group JVs & Funds Total Change %2
As at 30 September 2013 £m £m1 £m H1
Retail parks 1,755 814 2,569 1.1
Superstores 118 1,188 1,306 2.0
Shopping centres 756 1,181 1,937 0.3
Department stores 512 1 513 6.5
Leisure 308 3 311 2.0
UK Retail 3,449 3,187 6,636 1.5
City 57 1,786 1,843 3.6
West End 2,468 - 2,468 6.0
Provincial 85 5 90 4.0
All Offices 2,610 1,791 4,401 5.0
Residential3 160 - 160 2.6
All Offices & Residential 2,770 1,791 4,561 4.9
UK Total 6,219 4,978 11,197 2.8
UK Standing Investments 5,682 4,565 10,247 2.1
UK Developments 537 413 950 8.9
Table shows UK total, excluding assets held in Europe. Total portfolio valuation including Europe of £11.4bn at period end, +2.7% valuation movement. 1 Group’s share of properties in joint ventures and funds
2 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 sales 3 Stand-alone residential
26
UK PORTFOLIO NET YIELDS1
As at 30 September 2013
(excl. developments)
EPRA Net Initial
Yield %
EPRA Topped-
Up Net Initial
Yield %2
Overall Topped-
Up Net Initial
Yield%3
Net
Reversionary
Yield %
Net
Equivalent
Yield %
Retail parks 5.5 5.7 5.8 5.8 5.9
Superstores 5.1 5.1 5.1 5.1 5.1
Shopping centres 5.4 5.7 5.7 5.8 5.8
Department stores 5.4 5.4 7.8 4.5 6.0
Leisure 7.6 7.6 8.8 6.0 8.4
UK Retail 5.5 5.6 5.9 5.6 5.8
City 5.3 6.1 6.1 6.0 5.6
West End 3.0 4.8 4.9 5.6 5.4
Provincial 7.1 7.1 7.1 5.7 6.3
All Offices 4.0 5.3 5.4 5.8 5.5
UK Total 5.0 5.5 5.8 5.7 5.7
Table shows UK total, excluding assets held in Europe. 1 Including notional purchaser's costs 2 Including rent contracted from expiry of rent-free periods and fixed uplifts not in lieu of growth 3 Including fixed/minimum uplifts (excluded from EPRA definition)
27
UK LEASE LENGTH AND OCCUPANCY
As at 30 September 2013 Average Lease Length (yrs) Occupancy Rate (%)
To Expiry To Break Occupancy
Occupancy
(underlying)1
Retail parks 9.5 8.6 95.7 97.4
Superstores 15.0 15.0 100.0 100.0
Shopping centres 9.6 8.8 95.6 97.0
Department stores 27.4 24.1 99.5 99.5
Leisure 21.2 21.2 99.8 100.0
UK Retail 12.6 11.8 96.9 98.0
City 9.6 7.7 96.5 97.0
West End 11.6 9.6 89.8 92.8
Provincial 8.8 8.4 100.0 100.0
All Offices 10.6 8.7 92.8 94.7
UK Total 11.9 10.7 95.4 96.8
Table shows UK total, excluding assets held in Europe. 1 Including accommodation under offer or subject to asset management
28
UK ANNUALISED RENT & ESTIMATED VALUE (ERV)
As at 30 September 2013
(excl. Developments)
Annualised Rents (Valuation Basis) £m1 ERV £m Average Rent (£psf)2
Group JVs & Funds Total Total Contracted ERV
Retail parks 103 46 149 159 23.2 23.8
Superstores 7 63 70 70 21.8 21.7
Shopping centres 50 66 116 123 25.3 26.2
Department stores 30 - 30 25 13.4 11.0
Leisure 25 - 25 20 13.4 10.8
UK Retail 215 175 390 397 21.4 21.3
City 4 77 81 91 47.4 45.7
West End 69 - 69 124 48.5 50.8
Provincial 6 - 6 5 27.1 21.9
All Offices 79 77 156 220 46.8 47.2
Residential3 3 - 3 3 - -
All Offices & Residential 82 77 159 223 - -
UK Total 297 252 549 620 25.7 26.0
Table shows UK total, excluding assets held in Europe. 1 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 uplift 2 Office average rent £psf is based on office space only 3 Stand-alone residential
29
UK RENT SUBJECT TO OPEN MARKET RENT REVIEW
12 months to 30 September (£m) 2014 2015 2016 2017 2018 2014-16 2014-18
Retail parks 18 17 22 16 21 57 94
Superstores 8 23 13 4 4 44 52
Shopping centres 14 17 14 14 12 45 71
Department stores - - 5 - 1 5 6
Leisure - - - - - - -
UK Retail 40 57 54 34 38 151 223
Offices: - - - - - - -
City 29 6 5 12 3 40 55
West End 5 17 7 21 22 29 72
Provincial - 1 5 - - 6 6
All Offices 34 24 17 33 25 75 133
UK Total 74 81 71 67 63 226 356
Potential Uplift at Current ERV 2 3 1 - - 6 6
Table shows UK total, excluding assets held in Europe.
30
UK RENT SUBJECT TO LEASE BREAK OR EXPIRY
As at 30 September (£m) 2014 2015 2016 2017 2018 2014-16 2014-18
Retail parks 4 7 7 9 13 18 40
Superstores - - - - - - -
Shopping centres 10 7 12 11 6 29 46
Department stores - - - - - - -
Leisure - - - - - - -
UK Retail 14 14 19 20 19 47 86
City 1 1 19 - 8 21 29
West End 2 4 1 14 9 7 30
Provincial - - - - - - -
All Offices 3 5 20 14 17 28 59
UK Total 17 19 39 34 36 75 145
% of Contracted Rent 2.8% 2.9% 6.1% 5.4% 5.6% 11.8% 22.7%
Potential Uplift at Current ERV 2 1 - (1) (1) 3 1
Table shows UK total, excluding assets held in Europe.
31
ERV RESETTING TO MARKET
Annualised at 30 September (£m pa) 2014 2015 2016 2017 2018 2014-16 2014-18
ERV Expiring – existing portfolio1 20 19 39 33 34 78 145
Speculative developments – City 10 1 - - - 11 11
Speculative developments – West End 9 - 6 - - 15 15
Speculative developments – Retail 3 1 - - - 4 4
Total Rent Resetting to Market 42 21 45 33 34 108 175
ERV of current vacancies2,3 28 28
Vacant & Income Expiring 136 203
1 Rent is based on ERV, reflecting current valuation 2 Including space under offer of £7m and space in asset management of £1m 3 Including £10m of vacant space at recently completed developments
32
UK CONTRACTED RENTAL INCREASES (CASH FLOW BASIS)
Annualised at 30 September (£m pa) 2014 2015 2016 2017 2018 2014-16 2014-18
Expiry of rent free periods – standing portfolio 38 9 9 1 - 56 57
Expiry of rent free periods – development pre-lets - 3 21 5 3 24 32
Fixed uplifts (EPRA basis) 1 1 - - 1 2 3
Fixed & minimum uplifts in lieu of rental growth 1 1 3 3 2 5 10
Total 40 14 33 9 6 84 102
33
DEVELOPMENT PROGRAMME
DRIVING FUTURE PERFORMANCE
• 2010 committed office programme already 68% pre-let,
well ahead of plan
• Recently committed programme; profit on cost 25%
• Total pipeline of 3m sq ft
Sq ft ‘000 Current Dev. Cost £m
2010 Committed Development Programme 2,666 1,335
Recently Committed Programme 1,044 626
Near-term Pipeline 1,020 478
Total recently Committed/Near-term 2,064 1,104
Medium-term Prospects c1,000
34
2010 DEVELOPMENT PROGRAMME
12 months to 30 September (£m) Sector BL Share Sq ft PC
Calendar
Current
Value
Cost to
Complete
ERV Pre-let Resi End
Value3
% '000 Year £m £m1,6 £m2 £m £m
10 - 30 Brock St, Regents Place4 Mixed Use 100 505 Completed 360 6 20.1 17.1 115
5 Broadgate Offices 50 710 2015 195 87 19.2 19.2
-
The Leadenhall Building Offices 50 605 2014 195 43 18.6 8.6
-
10 Portman Square Offices 100 132 Completed 165 5 9.7 4.9
-
Marble Arch House5 Mixed Use 100 86 2013 64 9 3.9 - 18
39 Victoria Street Offices 100 93 2013 63 6 4.9 - -
199 Bishopsgate Offices 50 144 Completed 55 1 3.5 1.8
-
Whiteley Shopping, Fareham Retail 50 321 Completed 42 1 2.6 2.4
-
Bedford Street Residential 100 24 2014 26 3 - - 27
Glasgow Fort (Leisure) Retail 44 46 Completed 7 2 0.5 0.5 -
Total 2010 Programme: 2,666 1,172 163 83.0 54.5 160
Total Committed: 3,710 1,467 494 97.3 58.7 744
Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%) 1 From 1 October 2013 to practical completion (PC) 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 3 Residential development of which £120 million completed or exchanged 4 Includes 126,000 sq ft of residential, of which £93 million has now sold and completed during the half 5 Includes 10,000 sq ft of residential 6 Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate
35
RECENTLY COMMITTED DEVELOPMENT PROGRAMME
12 months to 30 September (£m) Sector BL Share Sq ft PC
Calendar
Current
Value
Cost to
Complete
ERV Pre-let Resi End
Value
% '000 Year £m £m1,4 £m2 £m £m
The Clarges Estate3 Mixed Use 100 193 2017 170 179 5.6 - 388
Hereford Retail 100 310 2014 35 40 5.5 2.8 -
The Hempel Residential 100 40 2015 34 26 - - 81
Craven Hill Gardens Residential 100 25 2014 33 8 - - 50
Aldgate Place, Phase 1 Residential 50 221 2016 8 52 - - 655
Broadgate Circle Offices 50 45 2014 7 8 1.2 - -
Milton Keynes, Kingston Centre Retail 50 21 2014 4 1 0.3 0.3 -
Broughton Park, Chester Retail 44 54 2014 2 5 0.5 0.4 -
Meadowhall Surrounding Land Retail 50 22 2015 1 3 0.4 0.4 -
Whiteley Leisure, Fareham Retail 50 58 2015 1 6 0.5 0.2 -
Fort Kinnaird, Edinburgh Retail 22 55 2015
- 3 0.3 0.1 -
Total Recently Committed: 1,044 295 331 14.3 4.2 584
Data includes Group's share of properties in Joint Ventures & Funds (except area which is shown at 100%) 1 From 1 October 2013 to practical completion (PC) 2 Estimated headline rental value net of rent payable under head leases (excluding tenant incentives) 3 Includes 103,000 sq ft of residential 4 Cost to complete excludes notional interest as interest is capitalised individually on each development at our capitalisation rate 5 End value excludes hotel site, receipts of £5 million (BL share) estimated
36
NEAR-TERM AND PROSPECTIVE DEVELOPMENTS
As at 30 September 2013 (£m) BL Share Sq ft Total Cost Status
% '000 £m1
Near-term Pipeline
The Shoreditch Estate Offices 100 322 165 Pre-submission
5 Kingdom Street Offices 100 2402 154 Consented
4 Kingdom Street Offices 100 145 93 Consented
Surrey Quays (Extension) Retail 100 98 24 Consented
Yalding House Offices 100 29 22 Pre-submission
Glasgow Fort (Retail) Retail 44 112 17 Planning submitted
Deepdale, Preston Retail 22 74 3 Consented
Total Near-term 1,020 478
Medium-term Pipeline
100 Liverpool Street Offices 50 496 Pre-submission
Power Court, Luton Retail 100 158 Pre-submission
Aldgate Place, Phase 2 Residential 50 145 Consented
Wardrobe Court Residential 100 74 Pre-submission
Fort Kinnaird, Edinburgh Retail 22 30 Planning submitted
Lancaster Retail 100 n/a Pre-submission
Eden Walk Shopping Centre, Kingston Retail 50 n/a Pre-submission
Harmsworth Quays Residential 100 n/a Pre-submission
Total Medium-term 903
1 Total cost including site value. Excludes notional interest as interest is capitalised individually on each development at our capitalisation rate 2 210,000 sq ft of which is consented
37
ESTIMATED FUTURE DEVELOPMENT RENTAL INCOME
(ACCOUNTING BASIS)
PC Gross Rental Income (Accounting Basis)1 £m – 12 mths
As at 30 September 2013 Calendar Year Sep 14 Sep 15 Sep 16 Sep 17 Sep 18
Committed Developments
5 Broadgate Q1 2015 Contracted - 9 18 18 18
The Leadenhall Building Q2 2014 Contracted 2 7 7 7 7
Non-contracted - 4 8 8 8
Broadgate Circle Q4 2014 Non-contracted - - 1 1 1
Marble Arch House Q4 2013 Non-contracted - 3 3 3 3
39 Victoria Street Q4 2013 Non-contracted - 3 4 4 4
Clarges Estate Q2 2017 Non-contracted - - - 3 5
Total Offices Contracted 2 16 25 25 25
Non-contracted - 10 16 19 21
Hereford Q2 2014 Contracted 1 2 2 2 2
Non-contracted - 2 2 2 2
Other Retail Developments Contracted - 1 1 1 1
Non-contracted - - 1 1 1
Total Retail Contracted 1 3 3 3 3
Non-contracted - 2 3 3 3
Total Committed Contracted 3 19 28 28 28
Non-contracted - 12 19 22 24
Recently Completed Developments (letting of vacant space)
199 Bishopsgate Q3 2012 Non-contracted 1 1 1 1 1
10 Portman Square Q2 2013 Non-contracted 1 4 4 4 4
10 - 30 Brock Street Q3 2013 Non-contracted - 2 3 3 3
Total Recently Completed1 Non-contracted 2 7 8 8 8
1 Pre-lets plus valuers estimates of non-contracted rent
38
ESTIMATED FUTURE DEVELOPMENT SPEND AND
CAPITALISED INTEREST
PC Prelet ERV Cost to complete £m (excluding notional interest) – 6 mths
As at 30 September 2013 Calendar Year £m Mar 14 Sep 14 Mar 15 Sep 15 Mar 16 Sep 16
5 Broadgate 2015 19.2 34 25 28
The Leadenhall Building 2014 8.6 19 11 13
Marble Arch House 2013 - 7 2
39 Victoria Street 2013 - 4 1 1
Bedford Street 2014 - 3 -
Total 2010 Programme: 27.8 67 39 42 - - -
The Clarges Estate 2017 - 3 22 33 35 29 23
Hereford 2014 2.8 17 20 3 -
The Hempel 2015 n/a 4 6 7 5 2 1
Craven Hill Gardens 2014 n/a 7 1 -
Aldgate Place, Phase 1 2016 n/a 8 5 8 9 3 6
Broadgate Circle 2014 - 4 3 1
Milton Keynes, Kingston Centre 2014 0.3 1 -
Broughton Park, Chester 2014 0.4 1 4
Meadowhall Surrounding Land 2015 0.4 - - 2 -
Whiteley Leisure, Fareham 2015 0.2 - 1 3 2
Fort Kinnaird, Edinburgh 2015 0.1 2 1
Total Recently Committed: 4.2 47 63 57 51 34 30
Total Committed: 32.0 114 102 99 51 34 30
Total Near-term 24 25 33 64 77 79
Indicative Interest Capitalised on above at attributable rates1 10 10 9 8 10 11
1 Financing costs are capitalised on qualifying expenditure for committed and near term developments; the rate is at 3% for
Leadenhall and 4% for all other developments
39
-
2
4
6
8
10
12
14
16
90 91 92 93 94 95 96 97 98 99 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
Completions U/C pre-let U/C speculative 10 yr average Grade A take-up
Central London Development Completions
SHORTAGE OF QUALITY SPACE
m sq ft
Source: CBRE
40
Rental Growth Driven by Imbalance between Supply and Demand
OFFICE MARKET RENTAL OUTLOOK
Source: CBRE (historic) and Average Agents' Consensus (including PMA)
Actual Forecast
£ psf
-
20
40
60
80
100
120
140
1990 1991 1993 1994 1996 1997 1999 2000 2002 2003 2005 2006 2008 2009 2011 2012 2014 2015 2017
West End City
41
Marble Arch
Shoreditch Leadenhall
Broadgate
DELIVERING FUTURE GROWTH – FOCUS ON LONDON
AND THE SOUTH EAST
Continue to move West Transport inter-changes London residential
Up and coming areas Estates and mixed use
schemes Development
Ealing Broadway
Clarges
Eden Walk
Surrey Quays &
Harmsworth
Quays
Aldgate
Recent acquisitions
BL assets/concentration
Paddington Central
Paddington
Central
Regents Place
42
CLARGES ESTATE, MAYFAIR
43
REGENT’S PLACE
44
Key:
200 residential units
sold on long leases;
retail at ground floor
88,000 sq ft retail
(16 units) around
Sheldon Square
Development sites
(355,000 sq ft) +
Crossrail box below
(80,000 sq ft)
Multi-let offices
268,000 sq ft
Multi-let offices
143,000 sq ft
206 room 4-star hotel
(111,000 sq ft)
BL ownership
New Hammersmith &
City line station and
access to Crossrail
Non BL ownership
FIVE
KINGDOM
STREET
FOUR KINGDOM
STREET
ONE
KINGDOM
STREET
ONE
SHELDON
SQUARE
Non BL
ownership
PADDINGTON CENTRAL
45
BROADGATE
46
INCOME STATEMENT
HY to 30 September H1 2012/13 H1 2013/14 Change
Net Rental Income (£m) 272 275 1.1%
Fees & Other Income (£m) 8 7
Administrative Expenses (£m) (39) (38)
Net Finance Costs (£m) (104) (98)
Underlying PBT (£m) 137 146 +6.6%
Underlying EPS (p) 15.2p 14.5p (4.6)%
47
UK GROSS RENTAL INCOME1 – SECTORAL
HY to 30 Sep 2013 Annualised as at 30 Sep 2013
(Accounting Basis) £m Group JVs & Funds Total Group JVs & Funds Total
Retail parks 52 21 73 102 45 147
Superstores 5 32 37 7 63 71
Shopping centres 27 30 57 50 64 114
Department stores 16 - 16 34 - 34
Leisure 14 - 14 28 - 28
UK Retail 114 83 197 221 172 394
City 3 42 45 4 82 86
West End 35 - 35 84 - 84
Provincial 3 - 3 6 - 6
All Offices 41 42 83 94 82 176
Residential2 2 - 2 3 - 3
All Offices & Residential 43 42 85 97 82 179
UK Total 157 125 282 318 254 573
Table shows UK total, excluding assets held in Europe. 1 Gross rental income will differ from annualised rents due to accounting adjustments for fixed & minimum contracted rental uplifts and lease incentives 2 Stand-alone residential
48
A PLATFORM FOR FUTURE INCOME GROWTH
Annualised Gross Rents Cash Flow Basis
£m
Accounting Basis
£m
Current Passing Rent 5495
5731 Expiry of Rent-free Periods 571
Fixed, Minimum Uplifts 13
2010 Non-Completed Developments Pre-let 28 24
Recently Committed Developments Pre-let 4 4
Total Contracted 651 601
Developments – 2010 Committed Developments to let2 29 23
Developments – Recently Committed/Near-term to let2 46 39
Investments – RPI, Letting of Vacancies etc. 2,3,4 30 28
Potential Rent in 5 Years 756 691
Increase 38% 21%
Table shows UK total, excluding assets held in Europe. 1 Rent includes £27m of completed 2010 Programme Developments on a cash flow basis, £23m on an accounting basis 2 Valuers estimate of non-contracted rents 3 Illustrative impact based on RPI of 2.5% pa 4 Includes RPI, open market rent reviews, re-letting of expiries and the letting of non-development vacant space 5 Gross rents plus, where rent reviews are outstanding, any increase to ERV (as determined by the Group’s external valuers), less any ground rents
payable under head leases
49
RECONCILIATION OF EPRA NAV & NNNAV
As at 31 Mar 13 30 Sep 13
£m Pence £m Pence
Balance Sheet (IFRS) Net Assets 5,687 568 6,106 604
Deferred tax arising on revaluation movements 14 1 5 -
Mark to market on effective cash flow hedges and related debt
adjustments 198 20 138 14
Adjust to fully diluted on exercise of share options 58 6 37 4
Surplus on trading properties 10 1 12 1
EPRA NAV 5,967 596 6,298 623
Deferred tax arising on revaluation movements (14) (1) (5) (1)
Mark to market of debt and derivatives (431) (43) (277) (27)
EPRA NNNAV 5,522 552 6,016 595
50
STRENGTH OF BALANCE SHEET METRICS
Proportionally Consolidated 31 Mar 2013 30 Sep 2013
Loan to Value (LTV) 40.2% 42.3%
Average Interest Rate 4.6% 4.2%
Interest Cover 2.3x 2.5x
Average Maturity of Drawn Debt (years) 9.9 8.9*
Group 31 Mar 2013 30 Sep 2013
Loan to Value (LTV) 24.2% 28.5%
Average Interest Rate 4.4% 3.7%
Interest Cover 2.8x 3.3x
* Pro forma for drawing down £200m from 2014 USPPs
51
£m
DEBT MATURITY – GROUP1
1 Pro forma for the drawdown of the £200m 2014 USPPs and repayment of £200m of Drawn Facilities
Year to 30 September
0
200
400
600
800
1,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
Debentures & Loan Notes Private Placements Convertible Bonds
52
£m
DEBT MATURITY – JOINT VENTURES AND FUNDS1
1 At British Land share
0
200
400
600
800
1,000
2014 2015 2016 2017 2018 2019-2023 2024-2036
JVs - Securitisations JVs - Bank Drawn Funds - Bank Drawn JVs - Bank Undrawn Funds - Bank Undrawn
Year to 30 September
53
GROSS AND NET DEBT RECONCILIATION
As at 30 September 2013 (£m) Group JVs & Funds Total
Gross debt (principal value) 2,687 2,507 5,194
IFRS Adjustments:
Issue costs and premia (7) (11) (18)
Fair value hedges 61 - 61
Other items 20 - 20
Gross Debt (IFRS basis) 2,761 2,496 5,257
Market value of derivatives 29 94 123
Cash & liquid investments (112) (210) (322)
Net debt (IFRS basis) 2,678 2,380 5,058
EPRA Adjustments:
Mark to market on effective cash flow hedges and related debt
adjustments
(50) (88) (138)
Net Debt (EPRA Basis) 2,628 2,292 4,920
54
Yield gap %
UK PROPERTY MARKET- YIELD GAP VS 10 YEAR GILTS
(5)
(3)
(1)
1
3
5
0
2
4
6
8
10
12
1990 1998 2005 2012
UK 10 Year Gilt Yield IPD All Property Net Initial Yield
%
55
NUMBER OF SHARES
Number of shares (m) Mar 13 Sep 13
Basic
Weighted Average 895 993
Period End 986 999
Diluted
Weighted Average 901 997
Period End 1,001 1,011
