The Scale of Commitment to CRE

Howard Cooke

27th June 2014

Introduction

• Research Analysis Phase 1

• Surplus Property

• Retail Sector

• Research Phase 2

Research – Phase 1

• FTSE 350 to December 2012

• Total Turnover - £1.16 trillion

• Largest Sector - Banking Total £302bn

• Total Profit - £168 billion

• Most profitable - Health Average £1.8bn

• People - 6.4m FTE’s

• Total Lease Commitment £132.5bn

• UK Business Lease Commitment £382bn

• Total Commitment £1.16 Trillion (Rent, Rates, Services &

FM)

Turnover

PBIT

Profit Ratio

Banking & Finance

Construction Consumer Goods

Engineering Health Industrials Leisure Prof & Support Services

Retailing TMT Transport Utilities0%

20%

40%

60%

80%

Operating Lease Profile Per Sector

Less than 1 Year 2 to 5 Years Over 5 Years

% o

f Tota

l Lease C

om

mit

ment

Lease Commitment

Lease Commitment

Banking & Finance

Construction Consumer Goods

Engineering Health Industrials Leisure Prof & Sup-port Services

Retailing TMT Transport Utilities Average of Companies

0%

100%

200%

300%

400%

500%

600%

700%

Operating Lease Costs as a Percentage of Profit

Lease Commitment

Lease Length

• Retailing• Leisure• Utilities

Proportion of Profit

• Retailing• Transport• Leisure

Absolute Measure

• Retailing• TMT• Banking &

Finance

Commitment

Surplus Property Headline Numbers

• Total Provision - £4.2 billion

• Gross Liability - £25.7bn

• UK Business - £74bn

• Smallest Provision - Health (Total & Average)

• Largest Provision - TMT (Total & Average)

Net Book Value as % of Net Assets

Surplus Property

Surplus Property

Surplus Property

Contraction Remain the Same Expansion0%

20%

40%

60%

80%

0%

37%

63%

4%

59%

37%

11%

75%

13%

Comparison of Change of Revenue, Headcount & UK Property

Total Revenue Growth Headcount UK Property Portfolio

Survey

Total - 2007 Total - 2008 Total - 2009 Total - 2010 Total - 2011 Total - 2012 -

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Retail Sector - Operating Lease Commitment

Within One Year (£'m) Two to Five Years (£'m) More than Five Years (£'m)

£'m

'sRetail Sector

£7,826m

£8,135m

£6,468m

£8,533m

£9,167m

£9,387m

Total - 2007 Total - 2008 Total - 2009 Total - 2010 Total - 2011 Total - 2012 75

100

125

150

175

200

Retail Sector - Key Metrics Rebased to 2007

Turnover PBIT Leases Commitment Property Provision

2007 =

100

Retail Sector

Retail Sector

Retail Sector

Retail Sector

Retail Sector

Next Steps

• Conclude 2005 to 2013 data

• Further Questionnaire

• Research Output

Howard Cooke

t: 01628 782639 m: 07768 996705 e: hc@core-consult.co.uk