London - A World Class City David Campbell
President & CEO
AEG Europe
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• Innovative Live Entertainment & Sports
• State Of The Art Facilities
• Global Coverage
– 115 Locations
– 4 Continents
– 17,500 Employees
Who Are AEG?
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AEG Content (Software)
• World Tours To Regional Concerts
• Exhibitions To Festivals
• Focused Sector Specialists
• Changing Market With Residencies
• Largest Owner / Manager Of Sports Teams &
Events
• Focused On Marquee Sports
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• Capital Markets
– 17 Of Top 50 US Markets
– 5 Of Top 12 European Markets
– Top 2 Australian Markets
– Top 2 Chinese Markets
• Host To 55 Sports Teams Worldwide
• 6,200 Events
– 22 Million Tickets
– 42 Million Guests
AEG Facilities (Hardware)
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2009 Pollstar Worldwide Arena Rankings
• 20 of The Top 66 Venues
– 3 Continents
– 5 Countries
– 12 US States
• 31% of Total Ticket Sales Across Top 66 Venues
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This Morning
1.1. Location, Location, LocationLocation, Location, Location
2. A Video Fairy Tale (BBC)
3. The O2 Today
4. Room For A Hotel?
5. Here’s One We Made Earlier
6. The Opportunity
7. Summary
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The O2 - Accessible
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The O2 – Fast Access
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The O2 – At Heart of New London
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This Morning
1. Location, Location, Location
2.2. A Video Fairy Tale (BBC)A Video Fairy Tale (BBC)
3. The O2 Today
4. Room For A Hotel?
5. Here’s One We Made Earlier
6. The Opportunity
7. Summary
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This Morning
1. Location, Location, Location
2. A Video Fairy Tale (BBC)
3.3. The O2 TodayThe O2 Today
4. Room For A Hotel?
5. Here’s One We Made Earlier
6. The Opportunity
7. Summary
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Finishing the Decade
• Finished 2009 At All Time High
• 2.5 Million Arena Ticket Sales
– 3rd Consecutive Year As World’s No.1
– +75% vs. Any Other Venue Worldwide (Music)
– +30% vs. Own 2008
• Gary Bongiovanni, Editor in Chief, Pollstar:
‘I get the sense that, on a worldwide basis, the
reputation of The O2 is rapidly growing to iconic status’
• Total Building Footfall: 7.5 million
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The O2 – Under The Tent
• 20,000 Seat Arena
• 2,500 Seat Music Club – indigO2
• 2,500 Capacity Night Club - matter
• 25 High Quality Restaurants, Bars and Cafés
• 11 Screen Cinema – 2,700 seats
• Major Exhibition Space - Bubble
• Flexible Event Space – London Piazza
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ArenaArena /1
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Arena /2Arena /2
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IndigO2IndigO2
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mattermatter
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Entertainment DistrictEntertainment District
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British Music ExperienceThe British Music Experience
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London PiazzaLondon Piazza
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Our Commercial Partners
• Major International Blue Chip Companies
– Olympic Sponsor Family Has Allowed
Adidas, Visa And Coke
• Often Global Relationships
• Consumer Brands Have Confidence In
AEG Delivery, And Also East London
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This Morning
1. Location, Location, Location
2. A Video Fairy Tale (BBC)
3. The O2 Today
4.4. Room For A Hotel?Room For A Hotel?
5. Here’s One We Made Earlier
6. The Opportunity
7. Summary
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London Tourism Shows Signs of Recovery
Tourism Visitors (mil) £(bil)
Overseas 14.1 8.32Domestic 10.8 2.23
Total 24.9 10.6
• Overnight Tourism Was £10.6 Billion Of Spend In 2009• Highest Spend Since 2000; Spending “Power” Of The Weak Pound• Modest Growth Forecast For 2010
• London Is No.1 City Destination Worldwide• Drives Large Overnight Stays
Tourism Nights (mil) Ave nights (%) Ave spend/dayOverseas 85.8 6.1 £98.06Domestic 23.8 2.2 £94.54
Total 108.6 4.4 £97.15
Source: ONS, IPS, Visit London, Visit Britain, UK Tourism Society
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London Hotel Provision
By Properties By Rooms
• We Are Looking At 4 Star+ Hotels
London
Local O2 Arena
Area 4-5 Star RoomsGreenwich 34%
Canary Wharf 100%
City Airport / Excel 45%
44% 56%
59% 41% 44% 56%
37% 63%
Other Star Rating
4-5 Star Rating
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Market Is Coming Back
“hotels are on the comeback trail. More accurately, hotels appear to be on two separate trails to recovery – a super highway for London and a much rougher provincial trail”.
2009 2010F 2011FOccupancy (%) 80.42 82.25 85.41
% Change 0.9% 2.3% 3.8%
ARR (£) 115.58 119.60 124.03
% Change -5.70% 3.5% 3.70%
Rev PAR (£) 93.1 98.47 106.15
% Change -4.80% 5.80% 7.8%
London Hotels
• New Supply Will Not Fulfil Demand• Strong Pipeline But Some Projects Stalled
Source: Econometric Forecasts PricewaterhouseCoopers February 2010, Benchmarking Data; STR Global February 2010
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Demand At The O2
• Driving Demand
– 4 Star Offer
– Local, Jubilee Line, River
• Mid April: 350 Guests
– Purchased Tickets >£100
– 40 – 90 Miles From The O2
– 94% Consider i.e. At The O2 For An Event
– 36% Consider If No Event
– 51% Would Pay £100+
– 42% Visited 4+ Times
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Creating Customer Delight
• The O2 Has Already Helped Redefine Customer Service
Source: JD Power 2009 European Hotel Guest Satisfaction Index Study; Bespoke AEG / The O2 Tracker
11%
51%
29%
10%9%
49%
33%
9%
Delighted Pleased Indifferent Dissappointed
The O2 Tracker
European Hotel Guest Satisfaction
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This Morning
1. Location, Location, Location
2. A Video Fairy Tale (BBC)
3. The O2 Today
4. Room For A Hotel?
5.5. Here’s One We Made EarlierHere’s One We Made Earlier
6. The Opportunity
7. Summary
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We Love LALA Live
A New Destination And Event Centre For Downtown Los Angeles
A New Paradigm For The Entertainment Industry
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$2.5 Billion Investment
Stimulating More Than $3 Billion Additional Investment
8,000 Permanent Jobs; 7,500 In Construction
$2.5 Billion Investment
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LA Live: A Content Campus
• Anchored By:
– Staples Center – 20,000 Arena
– Nokia Theatre – 7,000 Theatre
– Club Nokia – 2,500 Club
• 15 Restaurants
• 3 Clubs
• Museum & Event Space
• 14 Screen Cinema
• 650 Live Events Annually
• 12 Million Visitors
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• 878 Room JW Marriot
• 123 Room Ritz Carlton
• 224 Ritz Carlton Residences
• 80,000 sq ft Of Event Space
– Ballrooms, Banqueting & Meetings
– Largest In LA
• $1 Billion Investment
• Opened 2010
And Now A Hotel And Event Space
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This Morning
1. Location, Location, Location
2. A Video Fairy Tale (BBC)
3. The O2 Today
4. Room For A Hotel?
5. Here’s One We Made Earlier
6.6. The OpportunityThe Opportunity
7. Summary
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The O2 Campus
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As We See It
• 4 Star+
• 450 Rooms
• 30,000 sq ft Event Space
• 100 Serviced Apartments
• 250 Parking Spaces
• Outline Permission With Dome Acquisition
• 999 Year Lease
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The Brief
• 3 Hectares
• 180m River Frontage
• Litschutz Davidson Sandilands
– High Quality Design
– Compliments The O2 & Peninsula
Masterplan
– Maximise River Views
– Lean, Mean & Green
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Status
• Challenging Site
– Physical Constraints
• Challenging Politics
– Council, HCA, CABE, GLA,
Local MP, Local Residents,
Local Amenity Groups, MDL And
Many More!
– No Consistent View!!
• Planning Application
– Extensive Pre Consultation
– Open Book
– Decision Imminent…Post
Election
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Repelling Magnets – The Hotel Jigsaw
• Hotel “Jigsaw” Complicated To Complete
• Key Brands On Aggressive Expansion Trail, Banks Lending Again:
• But Key Brands Do Not Generally Build, Or Give Lease Payments, And Banks Still Want
Security Before Lending Flow
• The Hotel Jigsaw Remains Difficult To Piece Together
– Construction Pricing Being Very Keen
– 2012 On The Horizon
“…we expect to double our number of guest rooms in Europe in the next 5 years…” (Bill Marriott)
“ More banks are willing to lend real estate development in the UK again, ending a two year hiatus…” (Savills)
“to accommodate potential growth a further 40,000 net hotel bedrooms should be provided in the period up to 2026…”
(The London Plan)
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The O2 Hotel & Event Space
• Hotel
– 450, 4 Star+ Rooms
– Restaurant, Bar, Sky Bar
– Spa With Pool, Business Centre
• Serviced Apartments
– 24/7 Service
– Offsite Affordable
• Public Space To River
– Can Be Programmed In Season
• Integrated With The O2 Tent
– Onsite Parking
– Jubilee Line
– New Pier Planned
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The O2 Event Space
• Opportunity To Do To Event Space What The O2 Did
To Arenas
• The O2 = London’s Entertainment And Events
Destination
– Excel = Exhibitions
– Earls Court & Olympia = Smaller Exhibitions /
Conferences (West)
• Event Space
– 30,000 Sq Ft / 3,000 People
– Biggest Space In An Underserved City
– 2 X Nearest Space, But Flexible & Scaleable
– Above Ground With Stunning Views From Pre-event
Space
– Awards, Seminars, Conferences, Meetings, Small
Exhibitions, Banqueting, Weddings , Product Launches
And Much More
– River Transport To Door Plus Tube, Taxi & Parking
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In Summary
• Dramatic Riverside Location
• Highly Accessible, Including Boat
• Local Bed Stock At Bottom End
• Multi User Group Demand
– Canary Wharf: 2 Minutes
– Excel / City Airport: 10 Minutes
– Greenwich Peninsula / Historic Greenwich
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In Summary/2
• The O2!
– 5% Of Current The O2 Footfall = 100% Occupancy
– 15% Of Arena Footfall = 100% Occupancy
– Bon Jovi Audience Fill Hotel For A Year
• Large Event Space Will Drive Group Business
• Strong Existing Commercial Relationships
• Finalising Operator Selection
• Initial Conversations On Equity And Debt
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Video Summary
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Thank You For Listening
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Arena
• The O2 Arena:
• 20,000 seat arena
• 96 suites
• 1000+ VIP Club
• 170 event days 2009– 209 events– Music 57%– Sport 12%
• Probably best music arena in the world
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IndigO2
• 2,500 capacity music club
• 170 event days – 2009
• Highly Flexible– Broad range of music
– Many different formats
– Awards to investor presentations to lunches/dinners
• Total Building footfall; 7.5 million
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matter
• matter Night Club:
• Operated by Fabric Group (No.1 Club Worldwide– matter now No.6 club worldwide!
• 2,600 capacity nightclub– Mainly weekends
• Highly Flexible– McCartney to Pink to Corporate
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Entertainment District
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British Music Experience
• The Bubble:• 60,000 sq ft Exhibition Space
• Permanent home to The British Music Experience
• Former touring exhibitions include Tutankhamun Valley of The Kings, Bodyworlds, Michael Jackson
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London Piazza
• London Piazza Events:
• Large event space in the heart of The O2
• Events include;– Hot (Beach)– Cold (Ice Skating, Ski Slopes)– ATP warm up to roller disco